[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
                        THE DEPARTMENT OF ENERGY
                     FISCAL YEAR 2008 RESEARCH AND
                      DEVELOPMENT BUDGET PROPOSAL

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

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON ENERGY AND
                              ENVIRONMENT

                  COMMITTEE ON SCIENCE AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 7, 2007

                               __________

                            Serial No. 110-7

                               __________

     Printed for the use of the Committee on Science and Technology


     Available via the World Wide Web: http://www.science.house.gov

                                     
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                                 ______

                  COMMITTEE ON SCIENCE AND TECHNOLOGY

                 HON. BART GORDON, Tennessee, Chairman
JERRY F. COSTELLO, Illinois          RALPH M. HALL, Texas
EDDIE BERNICE JOHNSON, Texas         F. JAMES SENSENBRENNER JR., 
LYNN C. WOOLSEY, California              Wisconsin
MARK UDALL, Colorado                 LAMAR S. SMITH, Texas
DAVID WU, Oregon                     DANA ROHRABACHER, California
BRIAN BAIRD, Washington              KEN CALVERT, California
BRAD MILLER, North Carolina          ROSCOE G. BARTLETT, Maryland
DANIEL LIPINSKI, Illinois            VERNON J. EHLERS, Michigan
NICK LAMPSON, Texas                  FRANK D. LUCAS, Oklahoma
GABRIELLE GIFFORDS, Arizona          JUDY BIGGERT, Illinois
JERRY MCNERNEY, California           W. TODD AKIN, Missouri
PAUL KANJORSKI, Pennsylvania         JO BONNER, Alabama
DARLENE HOOLEY, Oregon               TOM FEENEY, Florida
STEVEN R. ROTHMAN, New Jersey        RANDY NEUGEBAUER, Texas
MICHAEL M. HONDA, California         BOB INGLIS, South Carolina
JIM MATHESON, Utah                   MICHAEL T. MCCAUL, Texas
MIKE ROSS, Arkansas                  MARIO DIAZ-BALART, Florida
BEN CHANDLER, Kentucky               PHIL GINGREY, Georgia
RUSS CARNAHAN, Missouri              BRIAN P. BILBRAY, California
CHARLIE MELANCON, Louisiana          ADRIAN SMITH, Nebraska
BARON P. HILL, Indiana               VACANCY
HARRY E. MITCHELL, Arizona
CHARLES A. WILSON, Ohio
                                 ------                                

                 Subcommittee on Energy and Environment

                   HON. NICK LAMPSON, Texas, Chairman
JERRY F. COSTELLO, Illinois          BOB INGLIS, South Carolina
LYNN C. WOOLSEY, California          ROSCOE G. BARTLETT, Maryland
DANIEL LIPINSKI, Illinois            JUDY BIGGERT, Illinois
GABRIELLE GIFFORDS, Arizona          W. TODD AKIN, Missouri
JERRY MCNERNEY, California           RANDY NEUGEBAUER, Texas
MARK UDALL, Colorado                 MICHAEL T. MCCAUL, Texas
BRIAN BAIRD, Washington              MARIO DIAZ-BALART, Florida
PAUL KANJORSKI, Pennsylvania             
BART GORDON, Tennessee               RALPH M. HALL, Texas
                  JEAN FRUCI Democratic Staff Director
            CHRIS KING Democratic Professional Staff Member
         SHIMERE WILLIAMS Democratic Professional Staff Member
         ELAINE PAULIONIS Democratic Professional Staff Member
                    STACEY STEEP Research Assistant


                            C O N T E N T S

                             March 7, 2007

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Nick Lampson, Chairman, Subcommittee 
  on Energy and Environment, Committee on Science and Technology, 
  U.S. House of Representatives..................................    10
    Written Statement............................................    11

Statement by Representative Bob Inglis, Ranking Minority Member, 
  Subcommittee on Energy and Environment, Committee on Science 
  and Technology, U.S. House of Representatives..................    12
    Written Statement............................................    13

Prepared Statement by Representative Jerry F. Costello, Member, 
  Subcommittee on Energy and Environment, Committee on Science 
  and Technology, U.S. House of Representatives..................    14

                               Witnesses:

Dr. Raymond L. Orbach, Under Secretary for Science, U.S. 
  Department of Energy
    Oral Statement...............................................    15
    Written Statement............................................    16
    Biography....................................................    33

Mr. Dennis R. Spurgeon, Assistant Secretary for Nuclear Energy, 
  U.S. Department of Energy
    Oral Statement...............................................    34
    Written Statement............................................    36
    Biography....................................................    40

Mr. Alexander Karsner, Assistant Secretary for Energy Efficiency 
  and Renewable Energy, U.S. Department of Energy
    Oral Statement...............................................    41
    Written Statement............................................    43
    Biography....................................................    51

Mr. Kevin M. Kolevar, Director, Office of Electricity Delivery 
  and Energy Reliability, U.S. Department of Energy
    Oral Statement...............................................    51
    Written Statement............................................    53
    Biography....................................................    56

Mr. Thomas D. Shope, Principal Deputy Assistant Secretary for 
  Fossil Energy, U.S. Department of Energy
    Oral Statement...............................................    56
    Written Statement............................................    58
    Biography....................................................    62

Discussion
  The Global Nuclear Energy Partnership (GNEP)...................    62
  Efficiency Standards Concerns..................................    63
  Bioenergy Research Centers.....................................    65
  The Ultra-Deepwater and Unconventional Onshore Research and 
    Development Program..........................................    66
  The American Competitiveness Initiative........................    69
  Nuclear Power..................................................    70
  Energy Storage.................................................    71
  Geothermal Energy Research.....................................    72
  Ethanol Potential and Sustainability...........................    73
  More on Nuclear Power..........................................    73
  Power Plant Siting.............................................    74
  Energy Conservation............................................    75
  Electro-Magnetic Pulse (EMP) Preparedness......................    75
  Potential Coal Supply..........................................    75
  The International Linear Collider..............................    76
  More on the Global Nuclear Energy Partnership (GNEP)...........    77
  The Rare Isotope Beam..........................................    78
  Solar Energy...................................................    78

              Appendix: Answers to Post-Hearing Questions

Dr. Raymond L. Orbach, Under Secretary for Science, U.S. 
  Department of Energy...........................................    82

Mr. Dennis R. Spurgeon, Assistant Secretary for Nuclear Energy, 
  U.S. Department of Energy......................................    89

Mr. Alexander Karsner, Assistant Secretary for Energy Efficiency 
  and Renewable Energy, U.S. Department of Energy................    95

Mr. Kevin M. Kolevar, Director, Office of Electricity Delivery 
  and Energy Reliability, U.S. Department of Energy..............   104

Mr. Thomas D. Shope, Principal Deputy Assistant Secretary for 
  Fossil Energy, U.S. Department of Energy.......................   107


  THE DEPARTMENT OF ENERGY FISCAL YEAR 2008 RESEARCH AND DEVELOPMENT 
                            BUDGET PROPOSAL

                              ----------                              


                        WEDNESDAY, MARCH 7, 2007

                  House of Representatives,
            Subcommittee on Energy and Environment,
                       Committee on Science and Technology,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 9:37 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Nick 
Lampson [Chairman of the Subcommittee] presiding.


                            hearing charter

                 SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

                  COMMITTEE ON SCIENCE AND TECHNOLOGY

                     U.S. HOUSE OF REPRESENTATIVES

                        The Department of Energy

                     Fiscal Year 2008 Research and

                      Development Budget Proposal

                        wednesday, march 7, 2007
                          9:30 a.m.-11:30 a.m.
                   2318 rayburn house office building

Purpose

    On Wednesday, March 7, 2007 the Energy and Environment Subcommittee 
of the House Science and Technology Committee will hold a hearing on 
the Department of Energy's (DOE) fiscal year 2008 Budget Request for 
research and development programs.

Witnesses

Dr. Ray Orbach is the Under Secretary for Science at DOE, where he has 
directed the Office of Science since 2002. Prior to joining the 
Department, Dr. Orbach served as Chancellor of the University of 
California at Riverside.

Mr. Dennis Spurgeon is the Assistant Secretary for Nuclear Energy at 
DOE. Mr. Spurgeon was recently designated as the Acting Under Secretary 
for Energy, taking the place of David Garman.

Mr. Alexander Karsner is the Assistant Secretary for Energy Efficiency 
and Renewable Energy at DOE. Previously, Mr. Karsner served in the 
private sector as an international infrastructure developer and 
entrepreneur in a wide range of energy technology fields.

Mr. Kevin Kolevar is the Director of the Office of Electricity Delivery 
and Energy Reliability at DOE. Prior to his appointment Mr. Kolevar 
served as Chief of Staff to then-Deputy of Energy Kyle McSlarrow.

Mr. Thomas D. Shope is the Principal Deputy Assistant Secretary for 
Fossil Energy. Mr. Shope is testifying in place of Assistant Secretary 
Jeffrey Jarrett who recently announced his resignation.



    The $7.2 billion request for DOE civilian energy R&D funding in 
FY08 is divided among the five offices represented at this hearing. The 
Office of Science (SC) funds basic research at universities and 10 
national laboratories, and is the single largest federal supporter of 
physical sciences research. The other four offices focus on applied 
research and technology development in the fields of Energy Efficiency 
and Renewable Energy, Fossil Energy, Nuclear Energy, and Electricity 
Delivery. Appearing for the first time in the President's budget is the 
Innovative Technology Loan Guarantee Program which would provide loan 
guarantees for advanced technology projects that avoid, reduce, or 
sequester air pollutants or anthropogenic emissions of greenhouse 
gases, and have a reasonable prospect of repaying the principal and 
interest on their debt obligations.



OFFICE OF SCIENCE (Witness--Dr. Ray Orbach)

    As part of the President's American Competitiveness Initiative 
(ACI), the FY 2008 budget request for the DOE Office of Science is $4.4 
billion. This represents an increase of approximately $600 million, or 
16 percent over the FY 2007 enacted level. However, this falls $189 
million short of the funding levels authorized in Title IX of the 
Energy Policy Act of 2005. It is important to note that the FY 2007 
Joint Funding Resolution (H.J. Res. 20) appropriated $3.8 billion for 
the Office of Science, roughly $200 million more than the 2006 enacted 
amount, but far short of the $4.1 billion requested for 2007. The 
resolution requires that DOE report back to the Congress within 30 days 
on how the additional $200 million will be spent within the Office of 
Science. Otherwise no direction is given as to increases or decreases 
for specific programs, making program comparisons between years 
difficult for the purposes of this analysis.

    The FY 2008 request for Basic Energy Sciences (BES) is $1.5 
billion, an increase of $388 million, or 35 percent above the FY06 
enacted. As the largest program with within the Office of Science, BES 
conducts research primarily in the areas of materials sciences and 
engineering. In FY 2008 BES will support approximately 10,000 
researchers in synchrotron light source and neutron scattering 
facilities, as well as $279 million for the construction and operation 
of five Nanoscale Science Research Centers.

    The budget would provide $340 million for the Advanced Scientific 
and Computing Research (ASCR), an increase of $112 million, or 49 
percent over the FY06 appropriations. This includes funding to continue 
upgrading the Leadership Class Facility (LCF) at Oak Ridge National Lab 
to peta-scale operations, making it the world's largest civilian high 
performance computing system.

    Biological and Environmental Research (BER) would receive $532 
million, a decrease of approximately $32 million from FY06 enacted 
levels. This decrease reflects the omission of several congressionally 
directed projects in the BER budget. In addition to the role of BER in 
areas such as genomics and climate change research, the FY08 request 
supports the startup of three bioenergy research centers to investigate 
biological processes for developing and deploying large scale, 
environmentally sound biotechnologies to produce ethanol from 
cellulosic biomass (plant materials).

    The FY08 funding request for High Energy Physics (HEP) is $ 782.2 
million, which is $84 million or 12 percent more than the FY 2006 
enacted level, but only a one percent increase over the FY 2007 
request. This program funds fundamental research in elementary particle 
physics and accelerator science and technology. Approximately $80 
million is requested for R&D leading to the International Linear 
Collider (ILC), a project which could cost over $7 billion and may be 
sited in the U.S.

    Fusion Energy Sciences (FES) receives $428 million, a substantial 
increase of $147 million, or 52 percent above the FY 2006 enacted. Of 
this amount, $160 million would be dedicated to support the U.S. role 
in the International Thermonuclear Experimental Reactor (ITER).

    Also of note, Nuclear Physics (NP) receives $471.3 million, an 
increase of $113.5 million, or 31.7 percent, over the FY06 enacted 
amount. The request for Science Laboratories Infrastructure is 
approximately $80 million.

APPLIED ENERGY TECHNOLOGY PROGRAMS

    While the total budget for energy R&D has risen in recent years it 
is still a fraction of the robust levels seen when the Nation responded 
to the energy crisis of the late 1970's. According to the U.S. 
Government Accountability Office the Department of Energy's budget 
authority for energy R&D fell 85 percent from 1978 to 2005 (inflation 
adjusted). Within the applied programs funding varied greatly according 
to Administration and Congressional priorities as the chart below 
indicates.




    Despite heavy investments in wind, solar and geothermal energy, the 
large bulk of the Nation's renewable energy portfolio comes from 
hydropower and still comprises only six percent of total electricity 
generation. The Energy Information Administration (EIA) projects that 
U.S. electricity generation will grow from 3,900 billion kilowatt hours 
in 2005 to 5,500 billion kilowatt hours in 2030. Coal will make up most 
of this growth and continue to provide the largest part of U.S. 
electricity generation for the foreseeable future. It is expected that, 
short of a very aggressive resurgence in nuclear capacity, new nuclear 
plants will only serve to replace aging existing plants in terms of 
overall electricity market share.



Energy Efficiency and Renewable Energy (EERE) (Witness--Alexander 
                    Karsner)

    EERE is requesting $1.2 billion for FY08, a 6.3 percent increase 
over the FY06 appropriated level. However, the request is significantly 
less than the amount appropriated for FY07 in the joint funding 
resolution passed on February 15, 2007, which increased appropriate 
funds more than $300 million over the FY06 level to approximately $1.5 
billion. As a result, the FY08 request actually represents a $237 
million cut from the FY07 appropriated amount. As with the Office of 
Science, it is not yet known how the Assistant Secretary for EERE will 
allocate the additional $300 million. These allocations must be 
determined no later than 30 days after the date of passage of the joint 
funding resolution. Since these allocations are yet to be determined, 
the rest of this analysis is based on a comparison of the FY08 request 
and the FY06 appropriated amount.
    Funding for priority programs continues to come at the expense of 
other lower-profile programs where significant technological gains can 
still be made. The FY08 request contains large cuts for Weatherization 
Programs, the Industrial Technologies Program, and the Federal Energy 
Management Program (FEMP), despite a Presidential call for increasing 
efficiency in all three of these areas. The Vehicle Technologies 
Program also suffers a slight decrease. The FY 2008 request also 
proposes to eliminate two important renewable energy R&D programs--
Geothermal Technologies and Hydropower Technologies.

    Biomass and Biorefinery Systems would receive $179 million, almost 
a 100 percent increase over FY06 funding. This large increase is 
intended to address the President's goal of making cellulosic ethanol 
cost-competitive with corn-derived ethanol by 2012, and also enabling a 
supply of 35 billion gallons of alternative fuels annually in 
accordance with the Twenty in Ten initiative--a reduction of U.S. 
gasoline usage by 20 percent in the next ten years--as outlined in the 
2007 State of the Union address. While the general goal of increasing 
the Nation's supply of alternative fuels is widely supported, there is 
some concern, expressed both by parties within DOE and in the renewable 
fuels community, that the level of commercial scale investment is too 
much too soon, given that the science of unlocking cellulosic ethanol 
is still uncertain. Some argue that some of that funding would be 
better spent in the short-term investments to decrease our overall 
energy demand, such as technologies to increase vehicle fuel 
efficiency.

    Solar energy would receive $148 million, an increase of 81 percent 
over FY06 appropriations. This funding supports the President's Solar 
America Initiative (SAI), which seeks to make electricity from 
photovoltaic cells cost competitive by 2015. Wind energy is slated for 
$40 million, essentially even with FY06 levels.
    As in the 2007 budget request, the Administration would eliminate 
R&D in Geothermal Power technologies. However, a comprehensive study 
released in January by the Massachusetts Institute of Technology found 
that the large amounts of heat stored in the Earth's crust could supply 
a substantial portion of the United States' future electricity 
requirements with minimal environmental impact and probably at 
competitive prices. The primary obstacle to commercial development of 
this resource was identified as lack of federal R&D support.
    Hydropower R&D would also be eliminated, a category that includes 
funding for ocean energy R&D (e.g., wave, tides, currents, etc.) 
despite explicit authorization in EPACT 2005 for R&D in these 
technologies. According to the Office of EERE, in the Pacific Northwest 
alone, it is feasible that wave energy could produce 40-70 kilowatts 
(kW) per meter (3.3 feet) of coastline, yet the President's budget 
requests no funds for R&D into this vast, clean, and renewable 
resource.
    The Administration continues the inconsistent treatment of Energy 
Efficiency programs. In addition to the Federal Energy Management 
Program and the Weatherization program several cuts are made throughout 
the budget. Despite mounting concerns about the role vehicles play in 
the country's reliance on foreign oil the FY08 request for Vehicle 
Technologies R&D would be reduced by $2.2 million over FY06, which 
includes funding for technologies for plug-in hybrid vehicles, 
lightweight vehicle materials, and engine technologies. The Industrial 
Technologies program, which aims to reduce the energy intensity of the 
U.S. economy by improving the energy efficiency of the Nation's 
industrial sector, would decrease by $9.9 million, a decrease of almost 
18 percent. However, Building Technologies would rise by $18.3 million 
compared to the FY06 level, a 27 percent increase. While attempting to 
pursue a balanced approach to developing clean energy technologies, the 
EERE budget seems to exhibit a pattern of defunding valuable programs 
to fund a few presidential priority projects, often with long-time 
horizons and uncertain payoffs.



Office of Nuclear Energy (Witness--Dennis Spurgeon)

    Nuclear Energy (NE) receives $568 million for research and 
development, with a large portion of that dedicated to the Global 
Nuclear Energy Partnership (GNEP). For the Nuclear office, this 
represents an increase of $347 million (157 percent) above the FY 2006 
Congressionally appropriated amount.
    The Administration unveiled the Global Nuclear Energy Partnership 
(GNEP) in 2006 as a plan to develop advanced, proliferation-resistant 
nuclear fuel cycle technologies that would maximize the energy 
extracted from nuclear fuels and minimize nuclear waste. GNEP has been 
very controversial in Congress, with little support in the House where 
only token funding has been approved. For instance, the Administration 
requested approximately $250 million in FY 2007 for GNEP (through the 
Advanced Fuel Cycle Initiative--AFCI) but GNEP will likely only receive 
roughly $80 million for FY 2007 under the joint funding resolution. 
Nonetheless, the President's FY 2008 request for GNEP is $395 million.
    Chief among the concerns about GNEP is the cost of implementing the 
program (up to $40 billion) and then deploying a fleet of the required 
technologies on a commercial scale (more than $200 billion), and 
whether such a program warrants the costs. There are also issues with 
premature selection of technologies before the completion of a full 
system-wide analysis of what would be required. Many are concerned that 
DOE has not adequately demonstrated an ability to carry out large scale 
construction and operation of such a project without major cost and 
schedule overruns.
    Finally, the Nuclear Power 2010 program also would receive a 
considerable boost with an FY08 request of $114 million, which is 
almost double the FY06 appropriation. The increase is intended to 
continue activities in new reactor designs and licensing applications 
with the Nuclear Regulatory Commission to support an industry decision 
to build a new power plant by 2009.



Office of Electricity Delivery and Energy Reliability (Witness--Kevin 
                    Kolevar)

    The Office of Electricity is requesting $115 million for FY08, a 27 
percent reduction from the FY06 appropriation. Of the total for this 
office the Administration proposes $86 million for R&D, a $46.5 
decrease from FY06 Appropriations. This continues a downward trend of 
cutting R&D to improve the reliability, efficiency and security of the 
Nations electrical grid system, improve access to the grid, and 
decrease price volatility in electricity delivery.
    Many of the EDER programs are being regrouped and consolidated 
under a new account called Visualization and Controls. This includes 
Transmission Reliability R&D, Energy Storage R&D, GridWise, and 
GridWorks. This regrouping hides the fact that most of these programs 
are being cut significantly.

Innovative Technology Loan Guarantee Program (LGP)

    The FY 2008 budget proposes $8.4 million to fund the Office of Loan 
Guarantees, which will administer the Innovative Technology Loan 
Guarantee Program (LGP), a $1.4 million increase above the FY 2007 
enacted amount. The program was established in the Energy Policy Act of 
2005 to provide loan guarantees for renewable energy, energy 
efficiency, clean coal, advanced nuclear, and other innovative energy 
projects. The FY 2008 budget request assumes a loan volume of $9 
billion for such projects. Of this, $4 billion is set aside for large 
electric power generation projects such as advanced nuclear and coal 
gasification with carbon sequestration. An additional $4 billion is set 
aside to promote biofuels and clean transportation fuels, and $1 
billion for new technologies in electricity transmission and renewable 
power systems.



Fossil Energy R&D (Witness--Thomas Shope)

    Fossil Energy R&D would receive $567 million in FY 2008, a decrease 
of almost $14 million or 2.5 percent compared to FY 2007 
appropriations. Funding increases would go exclusively to coal R&D, 
including the Clean Coal Power Initiative which aims to develop 
technologies that will increase efficiency of coal-fired power plants, 
reduce mercury and NOX emissions, and prove carbon capture and 
sequestration technologies. The FutureGen project, to demonstrate near-
zero atmospheric emissions electricity production, sees a substantial 
increase to $108 million, 500 percent above the FY06 appropriated 
amounts. However, Fuels and Power Systems, which includes R&D on 
advanced coal technologies and carbon sequestration, actually decreases 
to $184 million, 24 percent less than the FY06 appropriated amount.
    While the carbon sequestration program received a small increase, 
the request proposes conducting demos in only three or four sites 
across the country as opposed to doing a large scale demonstration in 
each of the seven regional sequestration partnerships. Many in the 
industry believe that, while federal investments have increased in 
recent years, funding for this program and the Clean Coal Power 
Initiative may be woefully inadequate to address the scale of 
challenges facing coal as it continues to provide approximately half of 
the Nation's electricity. Potentially forthcoming greenhouse gas 
regulations may adversely affect the coal industry and some other 
sectors of the economy. Yet it is not clear that technologies are 
available to cost effectively reduce carbon dioxide emissions from the 
use of coal, and sequester carbon dioxide on the scales required for a 
national greenhouse gas reduction program.
    The FY 2008 budget once again proposes to eliminate all oil and gas 
R&D, including $50 million in direct spending (mandated in the Energy 
Policy Act of 2005) for unconventional onshore and ultra-deepwater 
offshore natural gas exploration technologies that would go largely to 
smaller independent oil and gas producers.
    Chairman Lampson. This hearing will come to order. Good 
morning to everyone.
    I want to welcome you all to today's hearing, entitled 
``The Department of Energy Fiscal Year 2008 Research and 
Development Budget Proposal.''
    We changed the timing of this meeting this morning because 
of a presentation for the Joint Houses at 11:00, and we wanted 
to make sure that we had adequate time for you to get your 
presentations in, and hopefully, adequate number of questions.
    I will proceed with my opening statement, and ask unanimous 
consent that when the Ranking Member comes in, that we 
interrupt what proceedings are going on, if it is appropriate, 
to have his opening remarks. Seeing no objection, that will 
stand.
    I would like to extend a warm welcome to all five 
witnesses. Thank you for being here today, and testifying 
before the Subcommittee on Energy and Environment. The focus of 
our inquiry today is the President's 2008 budget request for 
research and development programs in the Department of Energy.
    Now, I know I don't have to remind anyone in this room just 
how high energy prices and costs for action to mitigate climate 
change have propelled energy to the forefront of public debate 
in the last few years. Our nation's energy challenges are 
momentous and incredibly diverse, and I am pleased to see that 
the President's budget request for fiscal year 2008 takes a 
number of important steps, and even some grand leaps in pursuit 
of technological solutions to these challenges.
    However, one can't help but notice serious gaps in R&D 
funding for certain programs. While resources are lavished on 
some high profile research areas, other valuable programs are 
left to languish. In a time of intense challenge, it is 
important that we keep all possibilities on the table. For 
instance, in the President's budget, hydrogen, solar, and 
cellulosic ethanol are beneficiaries of major funding 
increases. This is encouraging, but this encouraging trend is 
offset by large cuts and flat funding of equally valuable 
programs in areas such as geothermal, hydropower, ocean wave 
power, advanced grid technologies, and even oil and gas 
research.
    Furthermore, the Administration continues its trend of 
slashing funds for valuable energy efficiency programs, that 
help states, low income consumers, industries, vehicle 
manufacturers, and even the Federal Government use energy more 
efficiently. Efficiency must be regarded as another valuable 
source of energy. After all, the cheapest, cleanest, most 
secure, and most domestic energy is the energy you never have 
to produce at all. Enormous opportunities exist to increase the 
efficiency, intelligence, and security of the Nation's 
electricity grid without simply erecting more towers and 
stringing more wire. However, the Nation has not deployed these 
technologies widely yet, and research and development funding 
in many of these related programs has been cut in this budget 
request.
    The Administration requests a very aggressive increase in 
funding for nuclear energy, primarily to fund the Global 
Nuclear Energy Partnership, GNEP. Carbon-free nuclear energy 
may very well play a vital role in addressing our climate 
crisis, and it is clear that issues of waste disposal have to 
be resolved, but the Department must convince this Congress and 
the public that the billions it will cost to implement the 
program and deploy a fleet of these technologies is warranted, 
and conduct full systems analysis for GNEP.
    I am particularly disappointed to see that for the second 
year in a row, the Administration insists on ignoring EPAct 
2005 by failing to carry out vital research and development 
into ultra-deepwater and unconventional drilling technologies. 
This illustrates a fundamental misunderstanding both of what 
the program is intended to do and the need to expand domestic 
resources of fossil fuels.
    I would like to acknowledge the special role of the Office 
of Science within DOE. Although sometimes overlooked in the 
greater energy debate, the Office of Science, as the leading 
federal sponsor of research in the physical sciences, plays a 
critical part in our nation's scientific and technological 
competitiveness.
    The Office of Science has a longstanding role as steward of 
large, world-class scientific research facilities. However, 
construction and operation of facilities has come at the 
expense of funding for actual research at these facilities. I 
am glad to see Dr. Orbach plans to put this back on track.
    Furthermore, as the Department pursues plans for additional 
large-scale scientific facilities, demonstrable measures should 
be taken to assure due diligence in the areas of cost estimates 
and design. This gives everyone a higher level of comfort when 
multi-billion dollar research machines, such as the ILC, are 
proposed to Congress.
    The fiscal year 2008 request makes a commitment to the 
Office of Science that is essential to maintaining our economic 
competitiveness, drawing a new generation into the physical 
sciences, and successfully meeting future challenges, whether 
they be energy-related or otherwise.
    In the end, it is encouraging that the President's Fiscal 
Year 2008 budget request for DOE R&D programs takes a solid 
step forward. However, it is important that that step forward 
benefit all worthwhile programs, not just a few high-profile, 
exciting ones.
    Today's witnesses find themselves at the crossroads of 
intense political pressures, and the technological cutting 
edge, and probably spend much of their time trying to reconcile 
the two, never an easy task. Again, we thank them all, and look 
forward to hearing their testimony today.
    And at this time, I will call on Ranking Member Mr. Inglis 
for his opening statement.
    [The prepared statement of Chairman Lampson follows:]
              Prepared Statement of Chairman Nick Lampson
    I would like to extend a warm welcome to all five witnesses. Thank 
you for being here today and testifying before the Subcommittee on 
Energy and Environment. The focus of our inquiry today is the 
President's 2008 Budget Request for research and development programs 
in the Department of Energy.
    I know I don't have to remind anyone in this room just how much 
high energy prices and calls for action to mitigate climate change have 
propelled ``energy'' to the forefront of public debate in the last few 
years.
    Our nation's energy challenges are momentous and incredibly 
diverse, and I am pleased to see that the President's budget request 
for FY08 takes a number of important steps, and even some grand leaps, 
in pursuit of technological solutions to these challenges.
    However, one can't help but notice serious gaps in R&D funding for 
certain programs. While resources are lavished on some high-profile 
research areas, other valuable programs are left to languish. In a time 
of intense challenge, it is important that we keep all possibilities on 
the table.
    For instance, in the President's budget, Hydrogen, Solar and 
Cellulosic ethanol are beneficiaries of major funding increases. But 
this encouraging trend is offset by large cuts and flat-funding of 
equally valuable programs in areas such as geothermal, hydropower, 
ocean wave power, advanced grid technologies, and even oil & gas 
research.
    Furthermore, the Administration continues its trend of slashing 
funds for valuable energy efficiency programs that help states, low-
income consumers, industries, vehicle manufacturers and even the 
Federal Government use energy more efficiently. Efficiency must be 
regarded another valuable ``source'' of energy. After all, the 
cheapest, cleanest, most secure, and most domestic energy is the energy 
you never have to produce at all.
    Enormous opportunities exist to increase the efficiency, 
intelligence, and security of the Nation's electricity grid without 
simply erecting more towers and stringing more wire. However, the 
Nation has not deployed these technologies widely yet, and R&D funding 
in many of the related programs has been cut in this budget request.
    The Administration requests a very aggressive increase in funding 
for nuclear energy, primarily to fund the Global Nuclear Energy 
Partnership (GNEP). Carbon-free nuclear energy may very well play a 
vital role in addressing our climate crisis, and it is clear that 
issues of waste disposal have to be resolved. But the Department must 
convince this Congress and the public that the billions it will cost to 
implement the program and deploy a fleet of these technologies is 
warranted, and conduct a full systems analysis for GNEP.
    I am particularly disappointed to see that, for the second year in 
a row, the Administration insists on ignoring EPAct 2005 by failing to 
carry out vital research and development into Ultra-Deepwater and 
Unconventional drilling technologies. This illustrates a fundamental 
misunderstanding both of what the program is intended to do and the 
need to expand domestic resources of fossil fuels.
    I'd like to acknowledge the special role of the Office of Science 
within DOE. Although sometimes overlooked in the in the greater energy 
debate, the Office of Science, as the leading federal sponsor of 
research in the physical sciences, plays a critical part in our 
nation's scientific and technological competitiveness.
    The Office of Science has a long-standing role as steward of large, 
world-class scientific research facilities. However, construction and 
operation of facilities has come at the expense of funding for actual 
research at these facilities. I am glad to see that Dr. Orbach plans to 
put this back on track.
    Furthermore, as the Department pursues plans for additional large-
scale scientific facilities, demonstrable measures should be taken to 
assure due diligence in the areas of cost estimates and design. This 
gives everyone a higher level of comfort when multi-billion dollar 
research machines, such as the I.L.C. are proposed to Congress.
    The FY08 request makes a commitment to the Office of Science that 
is essential to maintaining our economic competitiveness, drawing a new 
generation into the physical sciences, and successfully meeting future 
challenges, whether they be energy-related or otherwise.
    In the end, it is encouraging that the President's FY08 budget 
request for DOE R&D programs takes a solid step forward. However, it is 
important that that step forward benefit all worthwhile programs, not 
just a few, high-profile, exciting ones.
    Today's witnesses find themselves at the crossroads of intense 
political pressures, and the technological cutting edge, and probably 
spend much of their time reconciling the two--never an easy job. Again, 
we thank them and look forward to hearing their testimony today.

    Mr. Inglis. Thank you, Mr. Chairman.
    I got released from the American Legion, and now I am here, 
and thank you for holding this hearing, and thank the witnesses 
for being here.
    There is a difference, seems to me, between simple spending 
and thoughtful investing, and that is what I hope we are here 
to discuss today. Simple spending just doesn't--it is maybe 
good, it creates an immediate impact, but investing creates 
returns in the future. And so I am very grateful for the work 
of the Department of Energy in--on these kind of investments. 
It really could change the game for us.
    So, as we discuss the R&D budget today, we are really 
acting more as investors here, investors who are looking at 
alternative fuel industries, for example, and seeing the 
payoffs that they could produce for us, and we realize that we 
have a great need to break free of an addiction to oil, and 
some of the work that you all are doing could help make that 
happen.
    So, we are certainly not there yet. Obviously, more 
commitment is needed, and we are going to need to spend good 
money to accomplish the objectives that we have set out. I 
think that many of us want to see the market make some of these 
decisions about what fuels work and that sort of thing, and I 
trust markets mostly. It is also true that some basic research 
needs to be done, and the people that are going to do that are 
in the Department of Energy and places like that, so we thank 
you for your work.
    I am particularly excited that the Chairman mentioned we 
don't want to focus on just the high profile ones, but one 
favorite one is the President's Hydrogen Initiative, because 
what a triple play opportunity, to do three things all at once 
that every American, I think, wants to do. One is improve the 
national security of the United States by no longer being 
dependent on the Middle East. Second, clean up the air, because 
the emissions would be water. And third, create jobs as we do 
that.
    And of course, South Carolina probably isn't thought of as 
a car producing state, but that is what we are now, and we have 
got a wonderful company, BMW, that stands for Bubba Makes 
Wheels, and so, Bubba is making a lot of wheels in South 
Carolina, and we hope that the BMW H7 starts sweeping the 
country, and if it does, who knows, maybe we will make some of 
those in South Carolina.
    But it is an example of what exciting things can happen 
when people put money into research, and so, we are looking 
forward to hearing your suggestions about how to do that.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Inglis follows:]
            Prepared Statement of Representative Bob Inglis
    Thank you Mr. Chairman, and I want to thank our witnesses from the 
Department of Energy for appearing here today to discuss funding for 
vital research and development projects.
    As we discuss the proposed R&D budget today, I think we all realize 
that we aren't accountants sitting around just talking numbers--we're 
investors. The alternative fuel industry is a start-up business 
opportunity that promises huge payoffs for our nation's security, 
environment, and our economy. We have the ability and opportunity to 
partner with this promising enterprise and lend federal resources to 
help establish the alternative energy industry.
    We haven't yet reached a place of energy security, nor have we 
scratched the surface of what economic benefits will come from energy 
advancements, but we don't have to look far to see great payoffs from 
today's investments. For that reason, we must stay committed to 
providing our scientists, national labs, and other R&D programs with 
adequate funding to continue the progress already made, and ensure our 
nation's energy security.
    We should focus funding on a vast array of alternatives--hydrogen, 
biofuels, wind, solar, and nuclear. If we are true investors, we will 
use discretion as certain alternatives prove to be more valuable than 
others. For now, there are many roads for our engineers, inventors, and 
scientists to follow, and we should not close those roads. On that 
note, I have specific concerns I will address regarding the future of 
the President's Hydrogen Fuel Initiative. For example, what exactly 
does the proposal mean when it says that the budget request ``completes 
the President's commitment of $1.2 billion over five years for this 
initiative?'' I hope that you agree with me that $1.2 billion is a good 
start and certainly not the end of our efforts.
    Thank you for the Department of Energy's past, present, and future 
commitments to research and develop tomorrow's energy solutions.

    Chairman Lampson. I thank the Ranking Member. If there are 
other Members who wish to submit additional opening statements, 
your statements will be added to the record.
    [The prepared statement of Mr. Costello follows:]
         Prepared Statement of Representative Jerry F. Costello
    Good morning. I want to thank the witnesses for appearing before 
our subcommittee to examine the Department of Energy's (DOE) fiscal 
year 2008 (FY08) Budget request for Research and Development Programs.
    I am privileged to represent the 12th Congressional District of 
Illinois, a region rich in coal reserves and a proud mining tradition. 
Coal plays a vital role as an energy source, and the industries 
involved in the mining, transportation and utilization of coal provide 
thousands of jobs for Illinoisans and economic stability to many 
communities across the State. Further, the Clean Coal Research Center 
at Southern Illinois University (SIUC), the State of Illinois and its 
energy industries are committed to the development and application of 
technologies for the environmentally sound use of Illinois coal. In 
addition, they have several programs, such as the Illinois Coal 
Competitiveness Program, the Illinois Coal Education Program, and the 
Illinois Coal Research Center, to further this mission.
    As a senior Member of the House Science and Technology Committee 
and the Energy and Environment Subcommittee, I have been a strong 
advocate for federal coal initiatives and programs. I am focused on 
increasing the funding levels for Clean Coal Research and Development 
(R&D) Programs for FY08 because coal is going to be the mainstay for 
electricity generation well into the future. While federal investments 
have increased slightly in recent years for Coal Research and 
Development (R&D), I am concerned that overall funding for several coal 
programs are woefully inadequate to address the scale of challenges 
facing coal as it continues to provide approximately half of the 
Nation's electricity.
    I believe clean coal technology is part of the solution to 
achieving U.S. energy independence, continued economic prosperity and 
improved environmental stewardship. FutureGen, a 275-megawatt coal 
fueled power plant, is an example of an important DOE clean coal R&D 
and demonstration project designed to turn coal into both electricity 
and hydrogen fuel with minimal air pollution. To address climate 
change, FutureGen would also bury its heat-trapping carbon dioxide 
emissions deep underground. No project of this magnitude is in 
operation anywhere in the world at a commercial scale. That is why I am 
concerned the President's proposed budget seeks to rescind $149 million 
from the Clean Coal Technology account, acting against prior 
congressional intent to defer and designate the un-obligated Clean Coal 
Technology funds for FutureGen.
    Another important coal program in the President's Coal Research 
Initiative that complements FutureGen and seeks to drive down the cost 
of clean coal technologies is the Clean Coal Power Initiative (CCPI). 
CCPI is a cooperative, cost shared program between the government and 
industry to rapidly demonstrate emerging technologies in coal-based 
power generation to help accelerate their commercialization. While CCPI 
received a slight increase in the President's proposed FY08 budget, the 
funding level is not sufficient. If Congress passes legislation to 
regulate carbon dioxide, advanced clean coal technologies must be 
successfully demonstrated and commercialized. This is the goal of the 
CCPI program and Congress and the Administration must work together to 
increase its funding to achieve its stated purpose. Further, I believe 
several large scale demonstrations of efficiency improvements and 
carbon capture technologies that can be applied to the existing fleet 
are critical to continued coal use if we are going to achieve 
meaningful reductions of carbon dioxide emissions in this country.
    Finally, the Administration's carbon sequestration program within 
the DOE is developing a portfolio of technologies that hold great 
potential to reduce greenhouse gas emissions. The Regional Carbon 
Sequestration Partnership, of which we have one for the Illinois Basin, 
are providing the critical data that the U.S. needs to support carbon 
dioxide sequestration as a strategy for addressing global climate 
change. The DOE had put out a request for proposals for Phase III large 
scale field testing of geological sequestration in December but then 
canceled it when the President's FY08 budget came in with lesser funds 
than needed to support these tests. This is not the time to limit the 
amount of activities DOE should be undertaking in the coal program. The 
budget for carbon reducing technologies must be realistic if Congress 
is going to take a hard-fast look at regulating greenhouse gases in 
this country. Therefore, it is essential that a robust budget to 
develop clean coal technologies and reduce carbon dioxide must be 
provided for FY08.
    I look forward to hearing from our panel of witnesses.

    Chairman Lampson. And at this time, I would like to 
introduce our witnesses: Dr. Raymond Orbach, Under Secretary 
for Science with the Office of Science; Mr. Alexander Karsner, 
Assistant Secretary for Energy Efficiency and Renewable Energy; 
Mr. Thomas Shope, Assistant Secretary for Fossil Energy; Mr. 
Dennis Spurgeon, who is the Assistant Secretary for Nuclear 
Energy; and finally, Mr. Kevin Kolevar, Director of the Office 
of Electricity Delivery and Energy Reliability at the 
Department of Energy.
    As our witnesses should know, spoken testimony is limited 
to five minutes each, and after which the Members of the 
Committee will have five minutes to ask questions, and we will 
start with Dr. Orbach.

    STATEMENT OF DR. RAYMOND L. ORBACH, UNDER SECRETARY FOR 
               SCIENCE, U.S. DEPARTMENT OF ENERGY

    Mr. Orbach. Thank you, Chairman Lampson. Mr. Chairman, 
Congressman Inglis, Members of the Committee, I am grateful for 
the opportunity this morning to discuss the President's Fiscal 
Year 2008 budget request for the Office of Science. I want to 
thank you, Mr. Chairman, Mr. Inglis, for your kind remarks 
about basic research and the Office of Science.
    The DOE Office of Science is the primary agency in the 
Federal Government for energy-related basic research. The 
Office interfaces with the Department of Energy's Applied 
Research programs, represented by my colleagues here this 
morning, upon which our nation relies for both energy security 
and national defense. Our goal is to underpin the applied 
research programs with the finest basic science, and at the 
same time, to energize our basic research with insights and 
opportunities from advanced applied research.
    Transformational basic science discoveries are essential to 
the success of the Department's efforts in hydrogen, solar 
power, and biofuels. We are one department, and we have been 
working very hard together on strengthening the relationship 
between the Department's basic and applied research programs.
    Let me say a few words this morning about the critical role 
that basic science plays in addressing our nation's energy 
challenge. Two examples. The first is cellulosic ethanol. To 
make this biofuel cost-effective, we must produce ethanol from 
cellulose directly. The problem is that the lignins that 
surround the cellulose in plants inhibit currently available 
enzymes from breaking down the cellulose into sugars that can 
be fermented into ethanol.
    The Office of Science will be deploying three innovative 
new bioenergy research centers, studying both microbes and 
plants, developing new methods on processes actually found in 
nature to create the breakthroughs that we need. For example, 
our DOE Joint Genome Institute announced this week, in 
conjunction with the U.S. Forest Service, that identification 
of the metabolic pathways in a fungus found in the bowels of 
insects that holds the secret to effective fermentation of the 
sugar xylose, a key to making cellulosic ethanol cost-
effective.
    Second, consider intermittent sources of energy, such as 
wind and solar and tidal. The key to base load electrical 
contributions from these renewable sources is electric energy 
storage. In April of this year, we will bring together leading 
scientists and people from industry for a major workshop to 
chart a transformational path forward for electrical energy 
storage. We shall be considering supercapacitors and other 
innovative approaches based on the latest advances in materials 
and nanotechnology, to change the way we think about electrical 
storage. Solving this problem is an enabling key for renewable 
energy to make major contributions to electric base load 
generation.
    These are examples of our mission in the Office of Science, 
investment in basic research to generate transformational 
scientific breakthroughs for our nation. Supporting 
transformational research also means providing cutting edge 
scientific facilities through our ten National Laboratories 
that will allow scientists from universities and the private 
sector to do the analysis that will give them advantages over 
their colleagues in other countries, thereby contributing to 
American competitiveness. It means educating, training, and 
sustaining a world-class scientific workforce, thousands 
strong, 25,500 supported by the Office of Science in our fiscal 
year 2008 budget in laboratories and universities across our 
nation for the sake of our country's future.
    We are not doing this in a vacuum. Other nations are 
increasing their investment in basic science, because they know 
that those who dominate science will dominate the Twenty First 
Century global economy. To remain competitive, we cannot afford 
to fall behind other nations in R&D. To remain competitive, the 
President's Fiscal Year 2008 budget request for the Office of 
Science is $4.4 billion, an increase of seven percent over the 
fiscal year 2007 request. It is an important milestone on the 
path to doubling federal support for basic research in the 
physical sciences over the next ten years, and an indispensable 
investment in our nation's energy security and America's 
continued competitiveness in the global economy.
    Thank you, and I will be pleased to answer questions.
    [The prepared statement of Dr. Orbach follows:]

                Prepared Statement of Raymond L. Orbach

    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to testify today on the Office of Science's Fiscal Year 
(FY) 2008 budget request. I appreciate your support for the Office of 
Science and basic research in the physical sciences, Mr. Chairman, and 
your understanding of the importance of this research to our nation's 
energy security and economic competitiveness. I also want to thank the 
Members of the Committee for their support. I believe this budget will 
enable the Office of Science to deliver on its mission and enhance U.S. 
competitiveness through our support of transformational science, 
national scientific facilities, and the scientific workforce for the 
Nation's future.
    The Office of Science requests $4,397,876,000 for the FY 2008 
Science appropriation, an increase of $600,582,000 over the FY 2007 
appropriated level. The FY 2008 budget request for the Office of 
Science represents the second year of the President's commitment to 
double the federal investment in basic research in the physical 
sciences by the year 2016 as part of the American Competitiveness 
Initiative. It also represents a continued commitment to maintain U.S. 
leadership in science and recognition of the valuable role research in 
the physical sciences plays in technology innovation and global 
competitiveness.
    With the FY 2008 budget request the Office of Science will continue 
to support transformational science--basic research for advanced 
scientific breakthroughs that will revolutionize our approach to the 
Nation's energy, environment, and national security challenges. The 
Office of Science is the Nation's steward for fields such as high 
energy physics, nuclear physics, heavy element chemistry, plasma 
physics, magnetic fusion, and catalysis. It also supports unique 
components of U.S. research in climate change and geophysics.
    Researchers funded through the Office of Science are working on 
some of the most pressing scientific challenges of our age including: 
1) Harnessing the power of microbial communities and plants for energy 
production from renewable sources, carbon sequestration, and 
environmental remediation; 2) Expanding the frontiers of nanotechnology 
to develop materials with unprecedented properties for widespread 
potential scientific, energy, and industrial applications; 3) Pursuing 
the breakthroughs in materials science, nanotechnology, biotechnology, 
and other fields needed to make solar energy more cost-effective; 4) 
Demonstrating the scientific and technological feasibility of creating 
and controlling a sustained burning plasma to generate energy, as the 
next step toward making fusion power a commercial reality; 5) Using 
advanced computation, simulation, and modeling to understand and 
predict the behavior of complex systems beyond the reach of some of our 
most powerful experimental probes, with potentially transformational 
impacts on a broad range of scientific and technological undertakings; 
6) Understanding the origin of the universe and nature of dark matter 
and dark energy; and 7) Resolving key uncertainties and expanding the 
scientific foundation needed to understand, predict, and assess the 
potential effects of atmospheric carbon dioxide on climate and the 
environment.
    U.S. leadership in many areas of science and technology depends in 
part on the continued availability of the most advanced scientific 
facilities for our researchers. The Office of Science builds and 
operates national scientific facilities and instruments that make up 
the world's most sophisticated suite of research capabilities. The 
resources available for scientific research include advanced 
synchrotron light sources, the new Spallation Neutron Source, state-of-
the-art Nanoscale Science Research Centers, supercomputers and high-
speed networks, climate and environmental monitoring capabilities, 
particle accelerators and detectors for high energy and nuclear 
physics, and genome sequencing facilities We are in the process of 
developing new tools such as an X-ray free electron laser light source 
that can image single large macromolecules and measure in real-time 
changes in the chemical bond as chemical and biological reactions take 
place, a next generation synchrotron light source for x-ray imaging and 
capable of nanometer resolution, and detectors and instruments for 
world-leading neutrino physics research. SC will also select and begin 
funding in FY 2007 for three Bioenergy Research Centers to conduct 
fundamental research on microbes and plants needed to produce 
biologically-based fuel
    Office of Science leadership in support of the physical sciences 
and stewardship of large national research facilities is directly 
linked to our historic role in training America's scientists and 
engineers. In addition to funding a diverse portfolio of research at 
more than 300 colleges and universities nationwide, we provide direct 
support and access to research facilities for thousands of university 
students and researchers. Facilities at the national laboratories 
provide unique opportunities for researchers and their students from 
across the country to pursue questions at the intersection of physics, 
chemistry, biology, computing, and materials science. About half of the 
annual 21,000 users of the Office of Science's scientific facilities 
come from universities. The FY 2008 budget will support the research of 
approximately 25,500 faculty, postdoctoral researchers, and graduate 
students throughout the Nation, an increase of 3,600 from FY 2006, in 
addition to supporting undergraduate research internships and 
fellowships and research and training opportunities for K-14 science 
educators at the national laboratories.
    The approximate $600 million increase in FY 2008 from the FY 2007 
appropriated level will bring manageable increases to the Office of 
Science programs for long planned for activities. The FY 2008 request 
will allow the Office of Science to increase support for high-priority 
DOE mission-driven scientific research and new initiatives; maintain 
optimum operations at our scientific user facilities; continuing major 
facility construction projects; and enhance educational, research, and 
training opportunities for the Nation's future scientific workforce. 
The budget request will also support basic research that contributes to 
Presidential initiatives such as the Hydrogen Fuel Initiative and the 
Advanced Energy Initiative, the Climate Change Science and Technology 
Programs, and the National Nanotechnology Initiative.
    The following programs are supported in the FY 2008 budget request: 
Basic Energy Sciences, Advanced Scientific Computing Research, 
Biological and Environmental Research, Fusion Energy Sciences, High 
Energy Physics, Nuclear Physics, Workforce Development for Teachers and 
Scientists, Science Laboratories Infrastructure, Science Program 
Direction, and Safeguards and Security.

OFFICE OF SCIENCE



FY 2008 SCIENCE PRIORITIES

    The challenges we face today in energy and the environment are some 
of the most vexing and complex in our history. Our success in meeting 
these challenges will depend in large part on how well we maintain this 
country's leadership in science and technology because it is through 
scientific and technological innovation and a skilled workforce that 
these challenges will be solved.
    President George W. Bush made this point in his State of the Union 
Message on January 23, 2007, when he stated,

         ``It's in our vital interest to diversify America's energy 
        supply--the way forward is through technology. . .. We must 
        continue changing the way America generates electric power, by 
        even greater use of clean coal technology, solar and wind 
        energy, and clean, safe nuclear power. We need to press on with 
        battery research for plug-in and hybrid vehicles, and expand 
        the use of clean diesel vehicles and biodiesel fuel. We must 
        continue investing in new methods of producing ethanol--using 
        everything from wood chips to grasses, to agricultural wastes. 
        . ..

         ``America is on the verge of technological breakthroughs that 
        will enable us to live our lives less dependent on oil. And 
        these technologies will help us to be better stewards of the 
        environment, and they will help us confront the serious 
        challenge of global climate change.''

    In 2006, the President announced a commitment to double the budget 
for basic research in the physical sciences at key agencies over ten 
years to maintain U.S. leadership in science and ensure continued 
global competitiveness. This commitment received bipartisan support in 
both the House of Representatives and the Senate and the FY 2008 budget 
request for the Office of Science represents the second year of this 
effort. Through the FY 2008 budget, the Office of Science will build on 
its record of results with sound investments to keep U.S. research and 
development at the forefront of global science and prepare the 
scientific workforce we will need in the 21st century to address our 
nation's challenges.
    Determining and balancing science and technology priorities across 
the Office of Science programs is an ongoing process. Several factors 
are considered in our prioritization, including scientific 
opportunities identified by the broader scientific community through 
Office of Science sponsored workshops; external review and 
recommendations by scientific advisory committees; DOE mission needs; 
and national and departmental priorities. In FY 2008, we will support 
the priorities in scientific research, facility operations, and 
construction and laboratory infrastructure established in the past few 
years and outlined in the Office of Science Strategic Plan and Twenty-
year Facilities Outlook, in addition to national and departmental 
priorities and new research opportunities identified in recent 
workshops.
    National initiatives in hydrogen fuel cell and advanced energy 
technologies will be supported through our contributions to basic 
research in hydrogen, fusion, solar energy-to-fuels, and production of 
ethanol and other biofuels from cellulose. We will also continue strong 
support for other Administration priorities such as nanotechnology, 
advanced scientific computation, and climate change science and 
technology.
    The Office of Science will support three Bioenergy Research Centers 
in FY 2008 as part of the broader Genomics: GTL program. These centers, 
to be selected in FY 2007 and fully operational by the end of 2008, 
will conduct comprehensive, multi-disciplinary research programs 
focused on microbes and plants to drive scientific breakthroughs 
necessary for the development of cost-effective biofuels and bioenergy 
production. The broader GTL program will also continue to support 
fundamental research and technology development needed to understand 
the complex behavior of biological systems for the development of 
innovative biotechnology solutions to energy production, environmental 
mitigation, and carbon management.
    The Office of Science designs, constructs, and operates facilities 
and instruments that provide world-leading research tools and 
capabilities for U.S. researchers and will continue to support next 
generation tools for enabling transformational science. For example, 
the Spallation Neutron Source (SNS), the world's forefront neutron 
scattering facility, increases the number of neutrons available for 
cutting-edge research by a factor of ten over any existing spallation 
neutron source in the world. SNS was completed and began operations in 
2006 and in FY 2008 full operations are supported and additional 
experimental capabilities continue to be added.
    When it comes on line, the Linac Coherent Light Source (LCLS) at 
the Stanford Linear Accelerator Center (SLAC) will produce X-rays 10 
billion times more intense than any existing X-ray source in the world, 
and will allow structural studies on individual nanoscale particles and 
single biomolecules. Construction of LCLS continues in FY 2008.
    A next generation synchrotron light source, the National 
Synchrotron Light Source-II (NSLS-II), would deliver orders of 
magnitude improvement in spatial resolution, providing the world's 
finest capabilities for X-ray imaging and enabling the study of 
material properties and functions, particularly at the nanoscale, at a 
level of detail and precision never before possible. Its energy 
resolution would explore dynamic properties of matter as no other light 
source has ever accomplished. Support for continued R&D and project 
engineering and design (PED) are provided in FY 2008.
    All five of DOE's Nanoscale Science Research Centers (NSRCs) will 
be operating in FY 2008. These facilities are the Nation's premier 
nanoscience user centers, providing resources unmatched to the 
scientific community for the synthesis, fabrication, and analysis of 
nanoparticles and nanomaterials.
    We will fully fund the programs for advanced scientific computing, 
including: continued support for high-performance production computing 
at the National Energy Research Scientific Computing Center (NERSC), 
which will increase capacity to 100-150 teraflops in FY 2007; support 
for advanced capabilities for modeling and simulation of scientific 
problems in combustion, fusion, and complex chemical reactions at Oak 
Ridge National Laboratory's Leadership Computing Facility, which should 
deliver 250 teraflops computing capability by the end of FY 2008; and 
support for the upgrade to 250-500 teraflop peak capacity of the IBM 
Blue Gene P system at Argonne National Laboratory's Leadership 
Computing Facility to extend architectural diversity in leadership 
computing.
    The Office of Science continues to be a partner in the interagency 
Climate Change Science Program focusing on understanding the principal 
uncertainties of the causes and effects of climate change, including 
abrupt climate change, understanding the global carbon cycle, 
developing predictive models for climate change over decades to 
centuries, and supporting basic research for biological sequestration 
of carbon. We also continue to support research in geosciences and 
environmental remediation towards the development of scientific and 
technological solutions to long-term environmental challenges.
    The Office of Science will continue to actively lead and support 
the U.S. contributions to ITER, the international project to build and 
operate the first fusion science facility capable of producing a 
sustained burning plasma to generate energy on a massive scale without 
environmental insult.
    The historic international fusion energy agreement to build ITER 
with six other international partners was signed in November 2006.
    We continue strong support for experimental and theoretical high 
energy physics and the study of the elementary constituents of matter 
and energy and interactions at the heart of physics. Full operations at 
the Tevatron Collider at Fermilab and the B-factory at SLAC are 
supported to maximize the scientific research and data derived from 
these facilities. Full operation of the neutrino oscillation experiment 
at Fermilab and start of fabrication of a next generation detector are 
supported to provide a platform for a world-leading neutrino program in 
the U.S. International Linear Collider (ILC) R&D and superconducting 
radio frequency technology R&D are supported to enable the most 
compelling scientific opportunities in high energy physics in the 
coming decades.
    Our research programs in nuclear physics continue to receive strong 
support. Operations at the Relativistic Heavy Ion Collider (RHIC) and 
additional instrumentation projects for RHIC are supported for studies 
of the properties of hot, dense nuclear matter, providing insight into 
the early universe. We will also support operations at the Continuous 
Electron Beam Accelerator Facility (CEBAF), the world's most powerful 
``microscope'' for studying the quark structure of matter, and project 
engineering and design and R&D for doubling the energy of the existing 
beam at CEBAF to 12 gigaelectron volts (GeV). Support for R&D to 
develop advanced rare isotope beam capabilities for the next generation 
U.S. facility for nuclear structure and astrophysics is also provided.
    The standard of living we enjoy and the security of our nation now 
and in the future rests on the quality of science and technology 
education we provide America's students from elementary through 
graduate school and beyond. The FY 2008 budget will provide support for 
over 25,500 Ph.D.s, graduate students, engineers, and technical 
professionals, an increase of 3,600 over the number supported in FY 
2006. The Office of Science will also support the development of 
leaders in the science and mathematics education community through 
participation of K-14 teachers in the DOE Academies Creating Teacher 
Scientists program, formerly the Laboratory Science Teacher 
Professional Development program. This immersion program at the 
national laboratories is an opportunity for teachers to work with 
laboratory scientists as mentors and to build content knowledge, 
research skills, and lasting connections to the scientific community, 
ultimately leading to more effective teaching that inspires students in 
science and math. The year 2008 will also mark the 18th year of DOE's 
National Science Bowl for high school students. National Science Bowl 
events for high school and middle school students, which will involve 
17,000 students across the Nation this year, provide prestigious 
academic competitions that challenge and inspire the Nation's youth to 
excel in math and science.

SCIENCE ACCOMPLISHMENTS

    For more than 50 years, the Office of Science (SC) has balanced 
basic research, innovative problem-solving, and support for world-
leading scientific capabilities, enabling historic contributions to 
U.S. economic and scientific preeminence. American taxpayers have 
received good value for their investment in basic research sponsored by 
the Office of Science; this work has led to significant technological 
innovations, new intellectual capital, improved quality of life, and 
enhanced economic competitiveness. The following are some of the past 
year's highlights:
    Nobel Prize in Physics. The 2006 Nobel Prize in physics was awarded 
to Dr. George Smoot (DOE Lawrence Berkeley National Laboratory and 
University of California, Berkeley) and Dr. John Mather (NASA Goddard 
Space Flight Center) for their discovery of ``the blackbody form and 
anisotropy of the cosmic microwave background radiation,'' the pattern 
of minuscule temperature variations in radiation which allowed 
scientists to gain better understanding of the origins of galaxies and 
stars. These two American scientists led the teams of researchers who 
worked on the historic 1989 NASA COBE satellite. The results of their 
work provided increased support for the ``Big Bang'' theory of the 
universe and marked the inception of cosmology as a precise science. SC 
supported Dr. Smoot's research during the period in which he worked on 
the COBE experiment, and continues to support his research today. One 
of the principal instruments used to make the discoveries was built at 
SC-supported facilities at Lawrence Berkeley National Laboratory and 
DOE's National Energy Research Scientific Computing Center 
supercomputers were used to analyze the massive amounts of data and 
produce detailed visual maps.
    Advancing Science and Technology for Bioenergy Solutions. 
Harnessing the capabilities of microbes and plants holds great 
potential for the development of innovative, cost-effective methods for 
the production of biofuels and bioenergy. Sequencing of the poplar tree 
genome was completed as part of a DOE national laboratory-led 
international collaboration; the information encoded in the poplar 
genome will provide researchers with an important resource for 
developing trees that produce more biomass for conversion to biofuels 
and trees that can sequester more carbon from the atmosphere. The DOE 
Joint Genome Institute (JGI) marked a technical milestone this year 
with the 100th microbe genome sequenced; Methanosarcina barkeri fusaro 
is capable of living in diverse and extreme environments, produces 
methane from digesting cellulose and other complex sugars, and provides 
greater understanding of potential new methods for producing renewable 
sources of energy. A chemical imaging method developed using a light-
producing cellulose synthesizing enzyme allowed researchers to observe 
the enzyme as it deposited cellulose fibers in a cell, providing 
greater understanding of the mechanism for cellulose formation.
    Delivering Forefront Computational and Networking Capabilities for 
Science. Several 2006 advances in computing, computational sciences, 
and networking enabled greater opportunities for computational research 
and effective management of data collected at DOE scientific user 
facilities. NERSC began to increase its peak capacity by a factor of 
100 and the Oak Ridge National Laboratory (ORNL) Leadership Computing 
Facility doubled its capability to 54 teraflops to provide additional 
resources for computationally intensive, large-scale projects. The 
Energy Sciences Network expanded in 2006 to include the Chicago and New 
York-Long Island metropolitan area networks (MANs), bringing dual 
connectivity at 20 gigabits per second and highly reliable, advanced 
network services to accommodate next-generation scientific instruments 
and supercomputers. Chemistry software using parallel-vector algorithms 
developed by researchers at ORNL has enabled computations 40 times more 
complex and 100 times faster than previous state-of-the-art codes. The 
development of a multi-scale mathematical framework for simulating the 
process of self-organization in biological systems has led to the 
discovery of a previously unidentified cluster state, providing 
possible applications to modeling microbial populations.
    Advances in Basic Science for Energy Technologies. Current and 
future national energy challenges may be partially addressed through 
scientific and technological innovation. Some recent accomplishments in 
basic science that may contribute to future energy solutions include 
the following. Basic research on the molecular design and synthesis of 
new polymer membranes has lead to the discovery of a new fuel cell 
membrane that is longer lasting and three times more proton conductive 
than the current gold standard for proton exchange membrane fuel cells. 
Computational studies showing that in titanium-coated carbon nanotubes 
a single titanium atom can adsorb four hydrogen molecules opens new 
ways that the control of matter on the nanoscale can lead to the 
creation of novel materials for hydrogen storage. Recent work 
demonstrating that visible light can split carbon dioxide into carbon 
monoxide and a free oxygen atom, the critical first reaction in 
sunlight-driven transformation of carbon dioxide into methanol, makes 
it feasible to consider harnessing sunlight to drive the photocatalytic 
production of methanol from carbon dioxide. Demonstration of the effect 
known as carrier multiplication in which a single photon creates 
multiple charge carriers during the interaction of photons with a 
nanocrystalline sample could lead to substantial increases in solar 
cell conversion efficiency.
    Maintaining World-leading Research Tools for U.S. Science. The 
Office of Science continues to construct and maintain powerful tools 
and research capabilities that will accelerate U.S. scientific 
discovery and innovation. The following highlight a few recent 
accomplishments. Construction and commissioning of the Spallation 
Neutron Source (SNS), an accelerator-based neutron source that will 
provide the most intense pulsed neutron beams in the world for 
scientific research and industrial development, was completed and began 
operations. Full operation of four of the five DOE Nanoscale Science 
Research Centers began in 2006, providing resources unmatched anywhere 
in the world for the synthesis, fabrication, and analysis of 
nanoparticles and nanomaterials. A nanofocusing lens device at the 
Advanced Photon Source at Argonne National Laboratory has set a world's 
record for line size resolution produced with a hard x-ray beam and 
enables such capabilities as three-dimensional visualization of 
electronic circuit boards, mapping impurities in biological and 
environmental samples, and analyzing samples inside high-pressure or 
high-temperature cells. A new record for performance, a 77 percent 
increase in peak luminosity in 2006 from the previous year, was 
achieved at the Tevatron, the world's most powerful particle collider 
for high energy physics research at Fermilab. Evidence of the rare 
single top quark was observed at Fermilab in 2006, bringing researchers 
a step closer to finding the Higgs boson. The Large Area Telescope 
(LAT), a DOE and NASA partnership and the primary instrument on NASA's 
GLAST mission, was completed in 2006 and will be placed in orbit in the 
fall of 2007 to study the high energy gamma rays and other 
astrophysical phenomena using particle physics detection techniques. 
During the 2006 operation of the Relativistic Heavy Ion Collider 
(RHIC), polarized protons were accelerated to the highest energies ever 
recorded--250 billion electron volts--for world-leading studies of the 
internal quark-gluon structure of nucleons.

PROGRAM OBJECTIVES AND PERFORMANCE

    The path from basic research to technology development and 
industrial competitiveness is not always obvious. History has taught us 
that seeking answers to fundamental questions can ultimately result in 
a diverse array of practical applications as well as some remarkable 
revolutionary advances. Working with the scientific community, the 
Office of Science invests in the promising research and sets long-term 
scientific goals with ambitious annual targets. The intent and impact 
of our performance goals may not always be clear to those outside the 
research community. Therefore the Office of Science has created a 
website (www.sc.doe.gov/measures) to better communicate to the public 
what we are measuring and why it is important.
    Further, the Office of Science has revised the appraisal process it 
uses each year to evaluate the scientific, management, and operational 
performance of the contractors who manage and operate each of its 10 
national laboratories. This new appraisal process went into effect for 
the FY 2006 performance evaluation period and provides a common 
structure and scoring system across all 10 Office of Science 
laboratories. The performance-based approach focuses the evaluation of 
the contractor's performance against eight Performance Goals (three 
Science and Technology Goals and five Management and Operation Goals). 
Each goal is composed of two or more weighted objectives. The new 
process has also incorporated a standardized five-point (0-4.3) scoring 
system, with corresponding grades for each Performance Goal, creating a 
``Report Card'' for each laboratory.
    The FY 2006 Office of Science laboratory report cards have been 
posted on the SC website (http://www.science.doe.gov/
News-Information/News-Room/2007/
Appraisa-%20Process/index.htm).

SCIENCE PROGRAMS

BASIC ENERGY SCIENCES

FY 2007 Request--$1,421.0 Million; FY 2008 Request--$1,498.5 Million

    Basic research supported by the Basic Energy Sciences (BES) program 
touches virtually every aspect of energy resources, production, 
conversion, efficiency, and waste mitigation. Research in materials 
sciences and engineering leads to the development of materials that may 
improve the efficiency, economy, environmental acceptability, and 
safety of energy generation, conversion, transmission, and use. 
Research in chemistry leads to the development of advances such as 
efficient combustion systems with reduced emission of pollutants; new 
solar photo-conversion processes; improved catalysts for the production 
of fuels and chemicals; and better separations and analytical methods 
for applications in energy processes, environmental remediation, and 
waste management. Research in geosciences contributes to the solution 
of problems in multiple DOE mission areas, including reactive fluid 
flow studies to understand contaminant remediation and seismic imaging 
for reservoir definition. Research in the molecular and biochemical 
nature of photosynthesis aids the development of solar photo-energy 
conversion and biomass conversion methods. BES asks researchers to 
reach far beyond today's problems in order to provide the basis for 
long-term solutions to what is one of society's greatest challenges--a 
secure, abundant, and clean energy supply. In FY 2008, the Office of 
Science will support expanded efforts in basic research related to 
transformational energy technologies. Within BES, there are increases 
to ongoing basic research for the hydrogen economy and effective solar 
energy utilization. The FY 2008 budget request also supports increased 
research in electric-energy storage, accelerator physics, and X-ray and 
neutron detector research.
    BES also provides the Nation's researchers with world-class 
research facilities, including reactor- and accelerator-based neutron 
sources, light sources (soon to include an X-ray free electron laser), 
nanoscale science research centers, and electron beam 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. For FY 2008, BES scientific user facilities will be scheduled to 
operate at an optimal number of hours.
    Construction of the Spallation Neutron Source (SNS) was completed 
in FY 2006 ahead of schedule, under budget, and meeting all technical 
milestones. In FY 2008 fabrication and commissioning of SNS instruments 
will continue, funded by BES and other sources including non-DOE 
sources, and will continue to increase power towards full levels. Two 
Major Items of Equipment are funded in FY 2008 that will allow the 
fabrication of approximately nine to ten additional instruments for the 
SNS, thus nearly completing the initial suite of 24 instruments that 
can be accommodated in the high-power target station.
    All five Nanoscale Science Research Centers will be fully 
operational in FY 2008: the Center for Nanophase Materials Sciences at 
Oak Ridge National Laboratory, the Molecular Foundry at Lawrence 
Berkeley National Laboratory, the Center for Nanoscale Materials at 
Argonne National Laboratory, the Center for Integrated Nanotechnologies 
at Sandia National Laboratories and Los Alamos National Laboratory, and 
the Center for Functional Nanomaterials at Brookhaven National 
Laboratory. In FY 2008, funding for research at the nanoscale increases 
for activities related to the hydrogen economy and solar energy 
utilization.
    The Linac Coherent Light Source (LCLS) at the Stanford Linear 
Accelerator Center (SLAC) will continue construction at the planned 
levels in FY 2008. Funding is also provided for primary support of the 
operation of the SLAC linac. This marks the third year of the 
transition of linac funding from the High Energy Physics program to the 
Basic Energy Sciences program. The purpose of the LCLS Project is to 
provide laser-like radiation in the X-ray region of the spectrum that 
is 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 LCLS will be the first such facility in the world for 
ground-breaking research in the physical and life sciences. Funding is 
provided separately for design and fabrication of instruments for the 
facility. Project Engineering and Design (PED) and construction for the 
Photon Ultra-fast Laser Science and Engineering (PULSE) building 
renovation begins in FY 2008. PULSE is a new center for ultra-fast 
science at SLAC focusing on ultra-fast structural and electronic 
dynamics in materials sciences, the generation of attosecond laser 
pulses, single-molecule imaging, and understanding solar energy 
conversion in molecular systems. Support continues for PED and R&D for 
the National Synchrotron Light Source-II (NSLS-II), which would be a 
new synchrotron light source, highly optimized to deliver ultra-high 
brightness and flux and exceptional beam stability. This would enable 
the study of material properties and functions with a spatial 
resolution of one nanometer (nm), an energy resolution of 0.1 
millielectron volt (meV), and the ultra-high sensitivity required to 
perform spectroscopy on a single atom, achieving a level of detail and 
precision never possible before. NSLS-II would open new regimes of 
scientific discovery and investigation.
    The Scientific Discovery through Advanced Computing (SciDAC) 
program is a set of coordinated investments across all Office of 
Science mission areas with the goal of using computer simulation to 
achieve breakthrough scientific advances that are impossible using 
theoretical or laboratory studies alone. The SciDAC program in BES 
consists of two activities: (1) characterizing chemically reacting 
flows as exemplified by combustion and (2) achieving scalability in the 
first-principles calculation of molecular properties, including 
chemical reaction rates.

ADVANCED SCIENTIFIC COMPUTING RESEARCH

FY 2007 Request--$318.7 Million; FY 2008 Request--$340.2 Million

    The Advanced Scientific Computing Research (ASCR) program is 
expanding the capability of world-class scientific research through 
advances in mathematics, high performance computing and advanced 
networks, and through the application of computers capable of many 
trillions of operations per second (terascale to petascale computers). 
Computer-based simulation can enable us to understand and predict the 
behavior of complex systems that are beyond the reach of our most 
powerful experimental probes or our most sophisticated theories. 
Computational modeling has greatly advanced our understanding of 
fundamental processes of nature, such as fluid flow and turbulence or 
molecular structure and reactivity. Soon, through modeling and 
simulation, we will be able to explore the interior of stars to 
understand how the chemical elements were created and learn how protein 
machines work inside living cells to enable the design of microbes that 
address critical energy or waste cleanup needs. We could also design 
novel catalysts and high-efficiency engines that expand our economy, 
lower pollution, and reduce our dependence on foreign oil. 
Computational science is increasingly important to making progress at 
the frontiers of almost every scientific discipline and to our most 
challenging feats of engineering. Leadership in scientific computing 
has become a cornerstone of the Department's strategy to ensure the 
security of the Nation and success in its science, energy, 
environmental quality, and national security missions.
    The demands of today's facilities, which generate millions of 
gigabytes of data per year, now outstrip the capabilities of the 
current Internet design and push the state-of-the-art in data storage 
and utilization. But, the evolution of the telecommunications market, 
including the availability of direct access to optical fiber at 
attractive prices and the availability of flexible dense wave division 
multiplexing (DWDM) products gives SC the possibility of exploiting 
these technologies to provide scientific data where needed at speeds 
commensurate with the new data volumes. To take advantage of this 
opportunity, the Energy Science Network (ESnet) has entered into a 
long-term partnership with Internet 2 to build the next generation 
optical network infrastructure needed for U.S. science. To fully 
realize the potential for science, however, significant research is 
needed to integrate these capabilities, make them available to 
scientists, and build the infrastructure which can provide cyber 
security. ASCR is leading an interagency effort to develop a Federal 
Plan for Advanced Networking R&D. This plan will provide a strategy for 
addressing current and future networking needs of the Federal 
Government in support of science and national security missions and 
provide a process for developing a more detailed roadmap to guide 
future multi-agency investments in advancing networking R&D.
    ASCR supports core research in applied mathematics, computer 
sciences, and distributed network environments. The applied mathematics 
research activity produces fundamental mathematical methods to model 
complex physical and biological systems. The computer science research 
efforts enable scientists to perform scientific computations 
efficiently on the highest performance computers available and to 
store, manage, analyze, and visualize the massive amounts of data that 
result. The networking research activity provides the techniques to 
link the data producers with scientists who need access to the data. 
Results from enabling research supported by ASCR are used by scientists 
supported by other SC programs. This link to other DOE programs 
provides a tangible assessment of the value of ASCR's core research 
program for advancing scientific discovery and technology development 
through simulations. In FY 2008 expanded efforts in applied mathematics 
will support critical long-term mathematical research issues relevant 
to petascale science, multi-scale mathematics, and optimized control 
and risk analysis in complex systems. Expanded efforts in computer 
science will enable scientific applications to take full advantage of 
petascale computing systems at the Leadership Computing Facilities.
    In addition to its research activities, ASCR plans, develops, and 
operates supercomputer and network facilities that are available 24 
hours a day, 365 days a year to researchers working on problems 
relevant to DOE's scientific missions. Investments in the ESnet will 
provide the DOE science community with capabilities not available 
through commercial networks or the commercial Internet to manage 
increased data flows from petascale computers and experimental 
facilities. In FY 2008 ESnet will deliver a 10 gigabit per second 
(gbps) core Internet service as well as a Science Data Network with 20 
gbps on its northern route and 10 gbps on its southern route. Delivery 
of the next generation of high performance resources at the National 
Energy Research Scientific Computing Center (NERSC) is scheduled for FY 
2007. This NERSC-5 system is expected to provide 100-150 teraflops of 
peak computing capacity. The NERSC computational resources are 
integrated by a common high performance file storage system that 
enables users to use all machines easily. Therefore the new machine 
will significantly reduce the current oversubscription at NERSC which 
serves nearly 2,000 scientists annually.
    In FY 2008, the Oak Ridge National Laboratory (ORNL) Leadership 
Computing Facility (LCF) will continue to provide world leading high 
performance sustained capability to researchers through the Innovative 
and Novel Computational Impact on Theory and Experiment (INCITE) 
program. The acquisition of a 250 teraflop Cray Baker system by the end 
of FY 2008 will enable further scientific advancements in areas such as 
combustion simulation for clean coal research, simulation of fusion 
devices that approach ITER scale, and quantum calculations of complex 
chemical reactions. In addition, further diversity with the LCF 
resources will be realized with an acquisition by Argonne National 
Laboratory (ANL) of a high performance IBM Blue Gene/P with low-
electrical power requirements and a peak capability of up to 100 
teraflops in 2007, and further expansion to 250-500 teraflops in FY 
2008 will bring enhanced capability to accelerate scientific 
understanding in areas such as molecular dynamics, catalysis, protein/
DNA complexes, and aging of material. With the ORNL and ANL LCF 
facilities SC is developing a multiple set of computer architectures to 
enable the most efficient solution of critical problems across the 
spectrum of science, ranging from biology to physics and chemistry.
    The Scientific Discovery through Advanced Computing (SciDAC) 
program is a set of coordinated investments across all SC mission areas 
with the goal of using computer simulation and advanced networking 
technologies to achieve breakthrough scientific advances via that are 
impossible using theoretical or laboratory studies alone. In FY 2006 
ASCR recompeted its SciDAC portfolio, with the exception of activities 
in partnership with the Fusion Energy Sciences program that were 
initiated in FY 2005. The new portfolio, referred to as SciDAC-2, 
enables new areas of science through Scientific Application 
Partnerships; Centers for Enabling Technologies (CET) at universities 
and national laboratories; and University-led SciDAC Institutes to 
establish centers of excellence that complement the activities of the 
CETs and provide training for the next generation of computational 
scientists.
    Advancing high performance computing and computation is a highly 
coordinated interagency effort. ASCR has extensive partnerships with 
other federal agencies and the National Nuclear Security Administration 
(NNSA). Activities are coordinated with other federal efforts through 
the Networking and Information Technology R&D (NITR&D) subcommittee of 
the National Science and Technology Council Committee on Technology. 
The subcommittee coordinates planning, budgeting, and assessment 
activities of the multi-agency NITR&D enterprise. DOE has been an 
active participant in these coordination groups and committees since 
their inception. ASCR will continue to coordinate its activities 
through these mechanisms and will lead the development of new 
coordinating mechanisms as needs arise such as the ongoing development 
of a Federal Plan for Advanced Networking R&D.

BIOLOGICAL AND ENVIRONMENTAL RESEARCH

FY 2007 Request--$510.3 Million; FY 2008 Request--$531.9 Million

    Biological and Environmental Research (BER) supports basic research 
with broad impacts on our energy future, our environment, and our 
health. By understanding complex biological systems, developing 
computational tools to model and predict their behavior, and developing 
methods to harness nature's capabilities, biotechnology solutions are 
possible for DOE energy, environmental, and national security 
challenges. An ability to predict long-range and regional climate 
enables effective planning for future needs in energy, agriculture, and 
land and water use. Understanding the global carbon cycle and the 
associated role and capabilities of microbes and plants can lead to 
solutions for reducing carbon dioxide concentrations in the atmosphere. 
Understanding the complex role of biology, geochemistry, and hydrology 
beneath the Earth's surface will lead to improved decision-making and 
solutions for contaminated DOE weapons sites. Understanding the 
biological effects of low doses of radiation can lead to the 
development of science-based health risk policy to better protect 
workers and citizens. Both normal and abnormal physiological 
processes--from normal human development to cancer to brain function--
can be understood and improved using radiotracers, advanced imaging 
instruments, and novel biomedical devices.
    The FY 2008 BER request continues expansion of the Genomics: GTL 
program. This program employs a systems approach to biology at the 
interface of the biological, physical, and computational sciences to 
determine the diverse biochemical capabilities of microbes, microbial 
communities, and plants, with the goal of tailoring and translating 
those capabilities into solutions for DOE mission needs. In FY 2005 BER 
engaged a committee of the National Research Council (NRC) of the 
National Academies to review the design of the Genomics: GTL program 
and its infrastructure plan. The NRC committee report, Review of the 
Department of Energy's Genomics: GTL Program was released in FY 2006 
and provided a strong endorsement of the GTL program, recommending that 
the program's focus on systems biology for bioenergy, carbon 
sequestration, and bioremediation be given a ``high priority'' by DOE 
and the Nation. The report also recommended that the program's plan for 
new research facilities be reshaped to produce earlier and more cost-
effective results by focusing not on particular technologies, but on 
research underpinning particular applications such as bioenergy, carbon 
sequestration, or environmental remediation.
    In response, SC revised its original single-purpose user facilities 
plan to instead develop and support vertically-integrated GTL Research 
Centers to accelerate systems biology research. BER will support the 
development of three Bioenergy Research Centers to be selected and 
initiated in FY 2007, and fully operational by the end of 2008. All 
three centers will conduct comprehensive, multidisciplinary research 
programs focused on microbes and plants to drive scientific 
breakthroughs necessary for the development of cost-effective biofuels 
and bioenergy production. These centers will not only possess the 
robust scientific capabilities needed to carry out their broad mission 
mandates, but will also draw upon the broader GTL program for 
technology development and foundational research. The vertically-
integrated GTL Research Centers will not require construction of 
facilities. Moreover, the competition to establish and operate them is 
open to universities, non-profit research organizations, the national 
laboratories, and the private sector--an approach that is new for the 
Department. The first three research centers will focus on bioenergy 
research. The Department announced the solicitation for Bioenergy 
Research Centers in August 2006, and proposals were due on February 1, 
2007.
    Development of a global biotechnology based energy infrastructure 
requires a science base that will enable scientists to control or 
redirect genetic regulation and redesign specific proteins, biochemical 
pathways, and even entire plants or microbes. Renewable biofuels could 
be produced using plants, microbes, or isolated enzymes. Understanding 
the biological mechanisms involved in these energy producing processes 
will allow scientists and technologists to design novel biofuel 
production strategies involving both cellular and cell free systems 
that might include defined mixed microbial communities or consolidated 
biological processes. Within the Genomics: GTL program, BER supports 
basic research aimed at developing the understanding needed to advance 
biotechnology-based strategies for biofuel production, focusing on 
renewable, carbon-neutral energy compounds like ethanol and hydrogen, 
as well as understanding how the capabilities of microbes can be 
applied to environmental remediation and carbon sequestration.
    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 potential 
causes and consequences, is possible over the next five years. In FY 
2008, BER will contribute to the CCRI by focusing on (1) helping to 
resolve the North American carbon sink question (i.e., the magnitude 
and location of the North American carbon sink); (2) deployment and 
operation of a mobile ARM 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, including abrupt climate change; 
and (4) developing and evaluating assessment tools needed to study 
costs and benefits of potential strategies for reducing net carbon 
dioxide emissions.
    In FY 2008, BER will continue to support research aimed at 
advancing the science of climate and Earth system modeling by coupling 
models of different components of the earth system related to climate 
and by significantly increasing the spatial resolution of such models. 
SciDAC-enabled activities will allow climate scientists to gain 
unprecedented insights into interactions and feedbacks between, for 
example, climate change and global cycling of carbon, the potential 
effects of carbon dioxide and aerosol emissions from energy production 
and their impact on the global climate system. BER will also add a 
SciDAC component to GTL and Environmental Remediation research. GTL 
SciDAC will initiate new research to develop mathematical and 
computational tools needed for complex biological system modeling and 
for analysis of complex data sets, such as mass spectrometry 
metabolomic or proteomic profiling data. Environmental Remediation 
SciDAC will provide an opportunity for subsurface and computational 
scientists to develop and improve methods of simulating subsurface 
reactive transport processes on ``discovery class'' computers.
    Research emphasis within BER's Environmental Remediation Sciences 
subprogram will focus on issues of subsurface cleanup such as defining 
and understanding the processes that control contaminant fate and 
transport in the environment and providing opportunities for use or 
manipulation of natural processes to alter contaminant mobility. In FY 
2008, BER will support the development of two additional field research 
sites (for a total of three), providing opportunities to validate 
laboratory findings under field conditions. The resulting knowledge and 
technology will assist DOE's environmental clean-up and stewardship 
missions. Funding for the William R. Wiley Environmental Molecular 
Sciences Laboratory (EMSL) at Pacific Northwest National Laboratory 
(PNNL) will be increased in FY 2008 to maintain operations at full 
capacity.
    Also continuing in FY 2008 is BER support for fundamental research 
in genomics, medical applications and measurement science, and the 
health effects of low dose radiation in FY 2008. Resources are 
developed and made widely available for determining protein structures 
at DOE synchrotrons, and for DOE--relevant high-throughput genomic DNA 
sequencing. Building on DOE capabilities in physics, chemistry, 
engineering, biology and computation, BER supports fundamental imaging 
research, maintains core infrastructure for imaging research and 
develops new technologies to improve the diagnosis and treatment of 
psycho-neurological diseases and cancer and to improve the function of 
patients with neurological disabilities like blindness. Funding for 
Ethical, Legal, and Societal Issues (ELSI) associated with activities 
applicable to SC, increases to support research on the ecological and 
environmental impacts of nanoparticles resulting from nanotechnology 
applied to energy technologies.

HIGH ENERGY PHYSICS

FY 2007 Request--$775.1 Million; FY 2008 Request--$782.2 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 the basic constituents of 
matter, deeper symmetries in the laws of nature at high energies, and 
mysterious phenomena that are commonplace in the universe, such as dark 
energy and dark matter. Research at these frontiers of science may 
uncover new particles, forces, or undiscovered dimensions of space and 
time; explain how matter came to have mass; and reveal the underlying 
nature of the universe. HEP supports particle accelerators and very 
sensitive detectors to study fundamental particle interactions at the 
highest possible energies as well as non-accelerator studies of cosmic 
particles using experiments conducted deep underground, on mountains, 
or in space. These research facilities and basic research supported by 
HEP advance our knowledge not only in high energy physics, but 
increasingly in other fields was well, including particle astrophysics 
and cosmology. Research advances in one field often have a strong 
impact on research directions in another. Technology that was developed 
in response to the pace-setting demands of high energy physics research 
has also become indispensable to other fields of science and has found 
wide applications in industry and medicine, often in ways that could 
not have been predicted when the technology was first developed.
    In FY 2008 HEP supports core experimental and theoretical research 
to maintain strong participation in the Tevatron, Large Hadron Collider 
(LHC) at CERN (the European Organization for Nuclear Research), and B-
factory physics program, and supports research activities associated 
with development of potential new initiatives such as International 
Linear Collider (ILC) R&D, neutrinos, dark energy, and dark matter. HEP 
places a high priority on maximizing scientific data derived from the 
three major HEP user facilities: the Tevatron Collider and Neutrinos at 
the Main Injector (NuMI) beam line at Fermilab, and the B-factory at 
SLAC. HEP will continue to lead the international scientific community 
with these world-leading user facilities at Fermilab and SLAC in FY 
2008, but these facilities will complete their scientific missions by 
the end of the decade. Thus, the longer-term HEP program supported in 
FY 2008 begins to develop new cutting-edge facilities in targeted areas 
(such as neutrino physics) that will establish U.S. leadership in these 
areas in the next decade, when the centerpiece of the world HEP program 
will reside at CERN.
    In FY 2008 HEP continues to support software and computing 
resources for U.S. researchers participating in the LHC program at CERN 
as well as pre-operations and maintenance of the U.S.-built systems 
that are scientific components of the LHC detectors. R&D in support of 
the proposed ILC is maintained in FY 2008 to support U.S. participation 
in a comprehensive, coordinated international R&D program and to 
provide a basis for U.S. industry to compete successfully for major 
subsystem contracts, should the ILC be designed and then built. The 
long-term goal of this effort is to provide robust cost and schedule 
baselines to support design and construction decisions for an 
international electron-positron linear collider. The ILC would provide 
unprecedented power, clarity, and precision to unravel the mysteries of 
the next energy frontier, which we will just begin to discover with the 
LHC. In 2006 the ILC Reference Design Report was completed, and in FY 
2007 further work toward the design, including some site-specific 
studies and detector studies, will be performed. In FY 2008 further 
work on both accelerator systems and detector studies will be 
performed.
    To provide a nearer-term future HEP program, and to preserve future 
research options, R&D for accelerator and detector technologies, 
particularly in the growing area of neutrino physics, will continue in 
FY 2008. With Tevatron improvements completed, much of the accelerator 
development effort at Fermilab in FY 2008 will focus on the neutrino 
program to study the universe's most prolific particle. The Neutrinos 
at the Main Injector (NuMI) beam allows studies of the fundamental 
physics of neutrino masses and mixings using the proton source section 
of the Tevatron complex. The NuMI beam has begun operations and will 
eventually put much higher demands on that set of accelerators. A 
program of enhanced maintenance, operational improvements, and 
equipment upgrades is being developed to meet these higher demands, 
while continuing to run the Tevatron. Fabrication of the NuMI Off-axis 
Neutrino Appearance (NOnA) Detector, which was originally proposed as a 
line item construction project in FY 2007 under the generic name of 
Electron Neutrino Appearance (EnA) Detector, is funded in FY 2008 and 
will utilize the NuMI beam. This project includes improvements to the 
proton source to increase the intensity of the NuMI beam. Meanwhile, 
fabrication will begin for the Reactor Neutrino Detector and two small 
neutrino experiments, the Main Injector Experiment n-A (MINERnA) in the 
MINOS near detector hall at Fermilab and the Tokai-to-Kamioka (T2K) 
experiment using the Japanese J-PARC neutrino beam. R&D will continue 
for a large double beta decay experiment to measure the mass of a 
neutrino. These efforts are part of a coordinated neutrino program 
developed from an American Physical Society study and a joint HEPAP/
Nuclear Sciences Advisory Committee (NSAC) subpanel review.
    To exploit the unique opportunity to expand the boundaries of our 
understanding of the matter-antimatter asymmetry in the universe, a 
high priority is given to continued operations and infrastructure 
support for the B-factory at SLAC. Final upgrades to the accelerator 
and detector are scheduled for completion in FY 2007, and B-factory 
operations will conclude in FY 2008. HEP support of SLAC operations 
decreases in FY 2008 as the contribution from BES increases for SLAC 
linac operations in preparation for the Linac Coherent Light Source 
(LCLS).
    As the Large Hadron Collider (LHC) accelerator nears its turn-on 
date in 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 an effective role for U.S. research 
groups in LHC discoveries will continue to be a high priority of the 
HEP program. R&D for possible future upgrades to the LHC accelerator 
and detectors will also be pursued.
    Enhanced support for R&D on ground- and space-based dark energy 
experimental concepts, begun in FY 2007, will be continued in FY 2008. 
These experiments should provide important new information about the 
nature of dark energy, leading to a better understanding of the birth, 
evolution, and ultimate fate of the universe. For example, the Super 
Nova/Acceleration Probe (SNAP) will be a mission concept proposed for a 
potential interagency-sponsored experiment with NASA, and possibly 
international partners: the Joint Dark Energy Mission (JDEM). DOE and 
NASA are jointly funding a National Academy of Sciences study to 
determine which of the proposed NASA ``Beyond Einstein'' missions 
should launch first, with technical design of the selected proposal to 
begin at the end of this decade. JDEM is one of the candidate missions 
in this study. In FY 2008, fabrication for the Dark Energy Survey 
Project will begin.
    The HEP program re-competed its SciDAC portfolio in FY 2006. Major 
thrusts in theoretical physics, astrophysics, and particle physics grid 
technology will be supported through the SciDAC program in FY 2008, as 
well as proposals in accelerator modeling and design to be selected in 
FY 2007. These projects will allow HEP to use computational science to 
obtain significant new insights into challenging problems that have the 
greatest impact in HEP mission areas.

NUCLEAR PHYSICS

FY 2007 Request--$454.1 Million; FY 2008 Request--$471.3 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. Scientific research supported by NP is 
aimed at advancing knowledge and providing insights into the nature of 
energy and matter and, in particular, at investigating the fundamental 
forces which hold the nucleus together and determining the detailed 
structure and behavior of the atomic nuclei. NP builds and supports 
world-leading scientific facilities and state-of-the-art 
instrumentation to carry out its basic research agenda--the study of 
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, to unique isotopes created in the laboratory 
that exist at the limits of stability and possess radically different 
properties from known matter. NP also trains a workforce needed to 
underpin the Department's missions for nuclear-related national 
security, energy, and environmental quality.
    Key aspects of NP research agenda include understanding how the 
quarks and gluons combine to form the nucleons (proton and neutron), 
what the properties and behavior of nuclear matter are under extreme 
conditions of temperature and pressure, and what the properties and 
reaction rates are 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. Knowledge and techniques developed in pursuit of 
fundamental nuclear physics research are also extensively utilized in 
our society today. The understanding of nuclear spin enabled the 
development of magnetic resonance imaging for medical use. Radioactive 
isotopes produced by accelerators and reactors are used for medical 
imaging, cancer therapy, and biochemical studies. Advances in cutting-
edge instrumentation developed for nuclear physics experiments have 
relevance to technological needs in combating terrorism. The highly 
trained scientific and technical personnel in fundamental nuclear 
physics who are a product of the program are a valuable human resource 
for many applied fields.
    The FY 2008 budget request supports operations of the four National 
User Facilities and research at universities and laboratories, and 
makes investments in new capabilities to address compelling scientific 
opportunities and to maintain U.S. competitiveness in global nuclear 
physics efforts. In FY 2008 support continues for R&D on rare isotope 
beam development, relevant to the next-generation facilities that will 
provide capabilities for forefront nuclear structure and astrophysics 
studies and for understanding the origin of the elements from iron to 
uranium.
    When the Universe was a millionth of a second old, nuclear matter 
is believed to have existed in its most extreme energy density form 
called the quark-gluon plasma. Experiments at the Relativistic Heavy 
Ion Collider (RHIC) at Brookhaven National Laboratory (BNL) are 
searching to find and characterize this new state and others that may 
have existed during the first moments of the Universe. These efforts 
will continue in FY 2008. The NP program, together with the National 
Aeronautics and Space Administration (NASA), will continue construction 
of a new Electron Beam Ion Source (EBIS) to provide RHIC with more 
cost-effective, reliable, and versatile operations. Research and 
development activities, including the development of an innovative 
electron beam cooling system for RHIC, are expected to demonstrate the 
feasibility of increasing the luminosity (or collision rate) of the 
circulating beams by a factor of ten, which would increase the long-
term scientific productivity and international competitiveness of the 
facility. Support for participation in the heavy ion program at the 
Large Hadron Collider (LHC) at CERN allows U.S. researchers the 
opportunity to search for new states of matter under substantially 
different initial conditions than those provided at RHIC. The interplay 
of the different research programs at the LHC and the ongoing RHIC 
program will allow a detailed tomography of the hot, dense matter as it 
evolves from the ``perfect fluid'' (a fluid with zero viscosity) 
discovered at RHIC.
    Operations of the Continuous Electron Beam Accelerator Facility 
(CEBAF) at Thomas Jefferson National Accelerator Facility (TJNAF) in FY 
2008 will continue to advance our knowledge of the internal structure 
of protons and neutrons. By providing precision experimental 
information concerning the quarks and gluons that form protons and 
neutrons, the approximately 1,200 experimental researchers who use 
CEBAF, 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 (QCD). In FY 
2008, the accelerator will provide beams simultaneously to all three 
experimental halls and funding is provided for engineering design 
activities for the 12 GeV CEBAF Upgrade Project. This upgrade is one of 
the highest priorities for NP and would allow for a test of a proposed 
mechanism of ``quark confinement,'' one of the compelling, unanswered 
puzzles of physics.
    Efforts at the Argonne Tandem Linear Accelerator System (ATLAS) at 
ANL and the Holifield Radioactive Ion Beam Facility (HRIBF) at ORNL 
will be supported in FY 2008 to focus on investigating new regions of 
nuclear structure, studying interactions in nuclear matter like those 
occurring in neutron stars, and determining the reactions that created 
the nuclei of the chemical elements inside stars and supernovae. The 
GRETINA gamma-ray tracking array, which continues fabrication in FY 
2008, will revolutionize gamma ray detection technology and offer 
dramatically improved capabilities to study the structure of nuclei at 
ATLAS, HRIBF, and elsewhere. The Fundamental Neutron Physics Beamline 
(FNPB) under fabrication at the SNS will provide a world-class 
capability to study the fundamental properties of the neutron, leading 
to a refined characterization of the weak force. Support continues in 
FY 2008 for the fabrication of a neutron Electric Dipole Moment 
experiment, to be sited at the FNPB, in the search for new physics 
beyond the Standard Model.
    Funds are provided in FY 2008 to initiate U.S. participation in the 
fabrication of an Italian-led neutrino-less double beta decay 
experiment, the Cryogenic Underground Observatory for Rare Events 
(CUORE). A successful search for neutrino-less beta decay will 
determine if the neutrino is its own antiparticle and provide 
information about the mass of the neutrino. Neutrinos are thought to 
play a critical role in the explosions of supernovae and the evolution 
of the cosmos. A successful search for neutrino-less beta decay will 
determine if the neutrino is its own antiparticle and provide 
information about the mass of the neutrino.
    Following the re-competition of SciDAC projects in FY 2006, NP 
currently supports efforts in nuclear astrophysics, grid computing, 
Lattice Gauge (QCD) theory, and low energy nuclear structure and 
nuclear reaction theory. NP is also supporting R&D in an international 
effort to develop a larger, more sensitive neutrino-less beta decay 
experiment.

FUSION ENERGY SCIENCES

FY 2007 Request--$319.0 Million; FY 2008 Request--$427.9 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. The FES program supports research in plasma science, 
magnetically confined plasmas, advances in tokamak design, innovative 
confinement options, non-neutral plasma physics and high energy density 
laboratory plasmas (HEDLP), and cutting edge technologies. 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. Fusion is the energy source that powers 
the sun and stars. Fusion power could play a key role in U.S. long-term 
energy plans and independence because it offers the potential for 
plentiful, safe, and environmentally benign energy. On November 21, 
2006, the DOE signed the ITER agreement with its counterparts in China, 
the European Union, India, Japan, the Republic of Korea and the Russian 
Federation, formalizing this historic arrangement for international 
scientific cooperation.
    The U.S. Contributions to ITER project is being managed by the U.S. 
ITER Project Office (USIPO), established as an Oak Ridge National 
Laboratory (ORNL)/Princeton Plasma Physics Laboratory (PPPL) 
partnership. The FY 2008 request for the U.S. Contributions to ITER 
project reflects a significant increase in procurement, fabrication 
activities, and delivery of medium- and high-technology components, 
assignment of U.S. personnel to the International ITER Organization 
abroad, and the U.S. share of common costs at the ITER site in 
Cadarache, France, including installation and testing. These costs are 
part of the Total Estimated Cost (TEC) for the U.S. Contributions to 
ITER project. There is a second category of costs, Other Project Costs 
(OPC), which is for the supporting research and development activity 
for our U.S. Contributions. Together the TEC and OPC make up the 
overall Total Project Cost which is $1,122,000,000.
    In support of ITER and U.S. Contributions to ITER, FES has placed 
an increased emphasis on its national burning plasma program--a 
critical underpinning to the fusion science in ITER. FES has enhanced 
burning plasma research efforts across the U.S. domestic fusion 
program, including: carrying out experiments on our national FES 
facilities that are exploring new modes of improved or extended ITER 
performance with diagnostics and plasma control that can also be 
extrapolated to ITER; developing safe and environmentally attractive 
technologies that could be used in future upgrades of ITER; exploring 
fusion simulation efforts that examine the complex behavior of burning 
plasmas in tokamaks; and integrating all that is learned into a 
forward-looking approach to future fusion applications. The U.S. 
Burning Plasma Organization has been established to coordinate these 
efforts.
    Section 972(c)(5)(C) of the Energy Policy Act (EPAct) of 2005, 
required the Secretary of Energy to provide ``a report describing how 
United States participation in the ITER will be funded without reducing 
funding for other programs in the Office of Science (including other 
fusion programs). . ..'' This report as well as all the other 
requirements for FES in EPAct have been or are in the process of being 
completed. The Department's FY 2008 budget provides for modest 
increases for all programs within the Office of Science and supports 
the ITER request of $160,000,000 from new funds in the FES budget 
request.
    FES supports the operation of a set of experimental facilities. 
These facilities provide scientists with the means to test and extend 
our theoretical understanding and computer models--leading ultimately 
to improved predictive capabilities for fusion science. Research and 
facility operations support for the three major facilities is 
maintained in FY 2008. Experimental research on tokamaks is continued 
with emphasis on physics issues of interest to the ITER project. The 
DIII-D tokamak at General Atomics will operate for 15 weeks in FY 2008 
to conduct research relevant to burning plasma issues and topics of 
interest to the ITER project as well as maintain the broad scientific 
scope of the program. The Alcator C-Mod at the Massachusetts Institute 
of Technology will operate for 15 weeks and the National Spherical 
Torus Experiment (NSTX) at the Princeton Plasma Physics Laboratory 
(PPPL) will operate for 12 weeks. Fabrication of the major components 
of the National Compact Stellarator Experiment (NCSX) at PPPL continues 
and assembly of the entire device will be completed in FY 2009.
    Funding for the FES SciDAC program continues in FY 2008 for the 
development of tools that facilitate international fusion 
collaborations and initiate development of an integrated software 
environment that can accommodate the wide range of space and time 
scales and the multiple phenomena that are encountered in simulations 
of fusion systems. Within SciDAC, the Fusion Simulation Project is a 
major initiative involving plasma physicists, applied mathematicians, 
and computer scientists to create a comprehensive set of models of 
fusion systems, combined with the algorithms required to implement the 
models and the computational infrastructure to enable them to work 
together.
    FES will issue a joint solicitation in FY 2008, with the National 
Nuclear Security Administration (NNSA), focused on academic research in 
high energy density laboratory plasmas, which supports the Department's 
programmatic goals in inertial confinement fusion science.

WORKFORCE DEVELOPMENT FOR TEACHERS AND SCIENTISTS

FY 2007 Request--$10.9 Million; FY 2008 Request--$11.0 Million

    The Department of Energy has played a role in training America's 
scientists and engineers for more than 50 years, making contributions 
to U.S. economic and scientific preeminence. The Nation's current and 
future energy and environmental challenges may be solved in part 
through scientific and technological innovation and a highly skilled 
scientific and technical workforce. The Workforce Development for 
Teachers and Scientists (WDTS) program acts as a catalyst within the 
DOE for the training of the next generation of scientists. WDTS 
programs create a foundation for DOE's national laboratories to provide 
a wide range of educational opportunities to more than 280,000 
educators and students on an annual basis. WDTS's mission is to provide 
a continuum of educational opportunities to the Nation's students and 
teachers of science, technology, engineering, and mathematics (STEM).
    WDTS supports experiential learning opportunities that compliment 
curriculum taught in the classroom and (1) build links between the 
national laboratories and the science education community by providing 
funding, guidelines, and evaluation of mentored research experiences at 
the national laboratories to K-12 teachers and college faculty to 
enhance their content knowledge and research capabilities; (2) provide 
mentor-intensive research experiences at the national laboratories for 
undergraduate and graduate students to inspire commitments to the 
technical disciplines and to pursue careers in science, technology, 
engineering, and mathematics, thereby helping our national laboratories 
and the Nation meet the demand for a well-trained scientific/technical 
workforce; and (3) encourage and reward middle and high school students 
across the Nation to share, demonstrate, and excel in math and the 
sciences, and introduce these students to the national laboratories and 
the opportunities available to them when they go to college.
    In FY 2008, the DOE Academies Creating Teacher Scientists (DOE 
ACTS) program, formerly the Laboratory Science Teacher Professional 
Development (LSTPD) program, will support the participation of 
approximately 300 teachers. All 17 of DOE's national laboratories will 
participate in this program. Each national laboratory can elect to 
implement either or both of the two types of teacher professional 
development models in DOE ACTS: (1) Teachers as Investigators (TAI) is 
geared towards novice teachers typically in the elementary to 
intermediate grade levels; and (2) Teachers as Research Associates 
(TARA) for teachers with a stronger background in science, mathematics, 
and engineering.
    The Science Undergraduate Laboratory Internship (SULI) program, 
which provides mentor intensive research experiences for undergraduates 
at the national laboratories, will support approximately 340 students 
in FY 2008. The Albert Einstein Distinguished Educator Fellowships, the 
College Institute of Science and Technology (CCI) program, the Pre-
Service Teacher activity for students preparing for teaching careers in 
a STEM discipline, and the National and Middle School Science Bowls 
will all continue in FY 2008.

SCIENCE LABORATORIES INFRASTRUCTURE

FY 2007 Request--$50.9 Million; FY 2008 Request--$79.0 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 and 
the clean up for reuse or removal of excess facilities to maintain the 
general purpose infrastructure. 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, BNL, and ORNL.
    In FY 2008, SLI will fund four construction subprojects: Seismic 
Safety Upgrade of Buildings, Phase I, at the Lawrence Berkeley National 
Laboratory (LBNL); Modernization of Building 4500N, Wing 4, Phase I, at 
ORNL; Building Electrical Services Upgrade, Phase II, at ANL; and 
Renovate Science Laboratory, Phase I, at BNL. Funding for FY 2008 
includes $35,000,000 held in reserve pending resolution of issues 
related to capability replacement and renovation at PNNL. If the issues 
are resolved, DOE will initiate a reprogramming request to use these 
funds to replace and/or upgrade mission-critical facilities currently 
located in the Hanford Site 300 Area. The SLI program continues funding 
for demolition of the Bevatron at LBNL in FY 2008, and funding is also 
provided for the demolition of several small buildings and trailers at 
ORNL.

SCIENCE PROGRAM DIRECTION

FY 2007 Request--$170.9 Million; FY 2008 Request--$184.9 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 DOE research and development (R&D) information 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.
    In FY 2008, Program Direction funding increases by 8.2 percent from 
the FY 2007 request. Most of the increase will support an additional 29 
FTEs, to mange the increase in the SC research investment that is a key 
component of the President's American Competitiveness Initiative; four 
new FTEs to support NSLS-II, and ITER project office activities; and 35 
FTEs--the staff of the New Brunswick Laboratory--transferring from the 
Office of Security and Safety Performance Assurance. Twenty-four FTEs 
are reduced across the SC complex in FY 2008 consistent with SC's 
corporate workforce planning strategy. The SCPD FY 2008 increase also 
supports a 2.2 percent pay raise; an increased cap for SES basic pay; 
other pay related costs such as the government's contributions for 
employee health insurance and Federal Employees' Retirement System 
(FERS); escalation of non-pay categories, such as travel, training, and 
contracts; and increased e-Gov assessments and other fixed operating 
requirements across the Office of Science complex.

SAFEGUARDS AND SECURITY

FY 2007 Request--$71.0 Million; FY 2008 Request--$71.0 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 Office of Science's Integrated Safeguards and Security 
Management strategy uses 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 FY 2008 budget includes funding necessary to protect 
people and property at the 2003 Design Basis Threat (DBT) level. In FY 
2008, funding for the Cyber Security program element addresses the 
promulgation of new National Institute of Standards and Technology 
(NIST) requirements that are statutorily required by the Federal 
Information Security Management Act (FISMA) to improve the Federal and 
Office of Science laboratory cyber security posture.

CONCLUSION

    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 and U.S. 
competitiveness. On behalf of DOE, I am pleased to present this FY 2008 
budget request for the Office of Science.
    This concludes my testimony. I would be pleased to answer any 
questions you might have.

                    Biography for Raymond L. Orbach
    Raymond Lee Orbach was sworn in by Secretary Samuel W. Bodman as 
the Department of Energy's first Under Secretary for Science on June 1, 
2006. President Bush nominated Dr. Orbach for the new position, created 
by the Energy Policy Act of 2005, on December 13, 2005, and he was 
unanimously confirmed by the U.S. Senate on May 26, 2006.
    As Under Secretary for Science, Dr. Orbach serves as the 
Secretary's advisor on science policy as well as on the scientific 
aspects of all that DOE does, from basic research, to nuclear energy, 
to the environmental clean-up of Cold War legacy sites, to defense 
programs. Dr. Orbach is responsible for planning, coordinating and 
overseeing the Energy Department's research and development programs 
and its 17 national laboratories, as well as the department's 
scientific and engineering education activities.
    Secretary Bodman has tasked Dr. Orbach with the department's 
implementation of the President's American Competitiveness Initiative, 
will help drive continued U.S. economic growth. Dr. Orbach continues to 
serve as the 14th Director of the Office of Science (SC) at the 
Department of Energy (DOE), a position he has held since the Senate 
confirmed him and he was sworn in in March 2002. In this capacity, Dr. 
Orbach manages an organization that is the third largest federal 
sponsor of basic research in the United States, the primary supporter 
of the physical sciences in the U.S., and one of the premier science 
organizations in the world.
    The SC fiscal year 2006 budget of $3.6 billion funds programs in 
high energy and nuclear physics, basic energy sciences, magnetic fusion 
energy, biological and environmental research, and computational 
science. SC, formerly the Office of Energy Research, also provides 
management oversight of 10 DOE non-weapons laboratories, supports 
researchers at more than 300 colleges and universities nationwide, and 
builds and operates the world's finest suite of scientific facilities 
and instruments used annually by more than 19,000 researchers world-
wide to extend the frontiers of science.
    From 1992 to 2002, Dr. Orbach served as Chancellor of the 
University of California (UC), Riverside. Under his leadership, UC-
Riverside doubled in size, achieved national and international 
recognition in research, and led the University of California in 
diversity and educational opportunity. In addition to his 
administrative duties at UC-Riverside, sustained an active research 
program; worked with postdoctoral, graduate, and undergraduate students 
in his laboratory; and taught the freshman physics course each year. As 
Distinguished Professor of Physics, Dr. Orbach set the highest 
standards for academic excellence.
    Dr. Orbach began his academic career as a postdoctoral fellow at 
Oxford University in 1960 and became an Assistant Professor of applied 
physics at Harvard University in 1961. He joined the faculty of the 
University of California, Los Angeles (UCLA) two years later as an 
Associate Professor, and became a Full Professor in 1966. From 1982 to 
1992, he served as the Provost of the College of Letters and Science at 
UCLA.
    Dr. Orbach's research in theoretical and experimental physics has 
resulted in the publication of more than 240 scientific articles. He 
has received numerous honors as a scholar including two Alfred P. Sloan 
Foundation Fellowships, a National Science Foundation Senior 
Postdoctoral Fellowship at Oxford University, a John Simon Guggenheim 
Memorial Foundation Fellowship at Tel Aviv University, the Joliot Curie 
Professorship at the Ecole Superieure de Physique et Chimie 
Industrielle de la Ville de Paris, the Lorentz Professorship at the 
University of Leiden in the Netherlands, the 1991-1992 Andrew Lawson 
Memorial Lecturer at UC-Riverside, the 2004 Arnold O. Beckman Lecturer 
in Science and Innovation at the University of Illinois at Urbana-
Champaign, and the Outstanding Alumni Award from the California 
Institute of Technology in 2005.
    Dr. Orbach is a fellow of the American Physical Society and the 
American Association for the Advancement of Science. Dr. Orbach has 
also held numerous visiting professorships at universities around the 
world. These include the Catholic University of Leuven in Belgium, Tel 
Aviv University, and the Imperial College of Science and Technology in 
London. He also serves as a member of 20 scientific, professional, and 
civic boards.
    Dr. Orbach received his Bachelor of Science degree in Physics from 
the California Institute of Technology in 1956. He received his Ph.D. 
degree in Physics from the University of California, Berkeley, in 1960 
and was elected to Phi Beta Kappa.
    Dr. Orbach was born in Los Angeles, California. He is married to 
Eva S. Orbach. They have three children and seven grandchildren and 
three step-grandchildren.

    Chairman Lampson. Thank you, Dr. Orbach. Mr. Spurgeon.

 STATEMENT OF MR. DENNIS R. SPURGEON, ASSISTANT SECRETARY FOR 
           NUCLEAR ENERGY, U.S. DEPARTMENT OF ENERGY

    Mr. Spurgeon. Thank you, Chairman Lampson, Ranking Member 
Inglis, Chairman Gordon, and Members of the Subcommittee. It is 
a pleasure to be here to discuss the fiscal year 2008 budget 
request for the Department of Energy's Office of Nuclear 
Energy.
    The Office of Nuclear Energy has made a great deal of 
progress in the last several years in advancing our nation's 
energy security and independence, in support of the 
Department's strategic plan. It is my near-term highest 
priority to enable industry to deploy a new generation of 
nuclear power plants. We have also made steps forward in 
developing advanced nuclear reactor and fuel cycle technologies 
while maintaining a critical national nuclear infrastructure.
    Today, 103 nuclear reactors generate roughly 20 percent of 
America's electricity. U.S. electricity demand is anticipated 
to grow by 50 percent over the next 25 years, the equivalent of 
45 to 50 one-thousand megawatt nuclear reactors must be built 
just to maintain that 20 percent share. The U.S. is at a 
critical juncture in the future of nuclear power in the United 
States. Unlike many of our international research partners, our 
nuclear industry has not been heavily supported financially or 
politically over the past 30 years. Today, the need for 
increased electric generating capacity is clear, and hopefully 
undisputed. Fortunately, we do have a growth option that allows 
us to have a diversified electric generation portfolio that 
includes a significant carbon emissions free component, and 
that is nuclear power.
    To support near-term domestic expansion of the nuclear 
industry, the fiscal year 2008 budget requests $114 million for 
the Nuclear Power 2010 program to support continued cost-share 
efforts with industry to reduce the barriers to deployment of 
new nuclear power plants in the United States. We anticipate 
the NRC will soon vote--actually, I think it is tomorrow--on 
approval of the early site permit for the Exelon Generation 
Company's Clinton site in central Illinois, which represents a 
major accomplishment in the Energy Department's efforts to 
address the barriers and stimulate deployment of new nuclear 
power plants in the United States.
    With nuclear power as the only proven base load producer of 
electricity that does not emit greenhouse gases, it is vital 
that our current fleet of reactors be expanded in order to meet 
our needs for carbon-free, dependable, and economic electric 
power.
    Any serious effort toward expanding global use of nuclear 
energy will inevitably require us to address the spent fuel and 
proliferation challenges that accompany such an expansion. To 
meet these challenges, President Bush initiated the Global 
Nuclear Energy Partnership, or GNEP, a comprehensive approach 
to enable an expansion of nuclear power in the United States 
and around the world, to promote nonproliferation goals, and to 
help resolve the nuclear waste issues.
    Domestically, GNEP provides a solution to the ever-growing 
issue of spent nuclear fuel. In conjunction with Yucca 
Mountain, GNEP provides a solution which outlines a closed fuel 
cycle, where energy is harvested from the spent fuel before the 
end product is disposed of in a permanent repository. The spent 
fuel will be recycled in a manner that will be more 
proliferation-resistant than current processes used around the 
world. A closed fuel cycle will also alleviate some of the 
burden placed on Yucca Mountain, and will possibly eliminate 
the need for a second geologic repository throughout the 
remainder of this century. We reiterate, though, that no fuel 
cycle scenario will eliminate the need for a permanent geologic 
repository such as Yucca Mountain.
    Internationally, GNEP promises to address the growing 
global energy demand in an environmentally friendly way. A 
global regime of countries able to provide a complete portfolio 
of nuclear fuel services, including Russia, France, and 
possibly Japan, China, and Britain, will provide these services 
to countries wanting to use nuclear power to meet their 
domestic growth and electricity demand without the cost and 
risk associated with nuclear fuel cycle infrastructure. By 
providing these services to other countries, we hope to 
dissuade future states from developing domestic enrichment 
capabilities like we are encountering with Iran today.
    The fact is the U.S. is not currently positioned to be an 
active member of this global regime. We have limited enrichment 
capabilities and no back-end fuel cycle capabilities. Creating 
capabilities needed to provide--to participate in the global 
expansion of nuclear power will take 15 to 20 years, meaning 
that in order to become an active participant of the global 
nuclear expansion, we need to begin now. Taking those steps 
necessary enables us to better assure that the imminent 
expansion will be safe, beneficial, and will not promote the 
proliferation of nuclear weapons. If we fail to act, we will 
have little to say in the process.
    The Department requests $405 million in fiscal year 2008 to 
begin work on developing a detailed roadmap for implementing 
all aspects of the GNEP vision.
    Mr. Chairman, we appreciate the support that we have 
received from the Committee as we seek to address the 
challenges surrounding the global expansion of nuclear power. 
We remain confident and optimistic about the role of nuclear 
energy in providing a solution to our nation's energy stability 
and independence.
    I would be pleased to answer your questions. Thank you.
    [The prepared statement of Mr. Spurgeon follows:]

                Prepared Statement of Dennis R. Spurgeon

    Chairman Lampson, Ranking Member Inglis, and Members of the 
Committee, it is a pleasure to be here to discuss the Fiscal Year (FY) 
2008 budget request for The Department of Energy's (DOE) Office of 
Nuclear Energy.
    The Department of Energy's strategic plan portrays a long-term 
vision of a zero-emission future, free from the reliance on imported 
energy. A portfolio of nuclear programs is provided for in this plan 
for near-term, medium-term, and long-term sustained advances in nuclear 
technology.
    The Office of Nuclear Energy has made a great deal of progress in 
the last several years in advancing our nation's energy security and 
independence in support of the Department's strategic plan. The 
Department remains committed to enabling industry to deploy a new 
generation of nuclear power plants. We have also made steps forward in 
developing advanced nuclear reactor and fuel cycle technologies while 
maintaining a critical national nuclear infrastructure.
    Today, 103 nuclear reactors generate roughly 20 percent of 
America's electricity. U.S. electricity demand is anticipated to grow 
50 percent over the next 25 years--the equivalent of 45 to 50 one-
thousand megawatt nuclear reactors must be built to maintain that 20 
percent share. With nuclear power as the only proven base load producer 
of electricity that does not emit greenhouse gases, it is vital that 
our current fleet of reactors be expanded in order to meet our needs 
for carbon-free, dependable and economic electric power.
    Any serious effort to stabilize greenhouse gases in the atmosphere, 
while providing the increasing amounts of energy needed for economic 
development and growth, requires the expanded use of nuclear energy. 
This will inevitably require us to address the spent fuel and 
proliferation challenges that confront the expanded, global use of 
nuclear energy. To meet these challenges, the Department initiated the 
Global Nuclear Energy Partnership (GNEP), a comprehensive approach to 
enable an expansion of nuclear power in the U.S. and around the world, 
promote non-proliferation goals, and help minimize the amount of 
nuclear waste disposal.
    GNEP is a perfect example of where global cooperation is required 
to address a changing global energy landscape. The United States has a 
unique opportunity to influence global energy policy, and more 
specifically global nuclear energy policy. However, for the U.S. to 
have influence abroad, we must have an established domestic policy 
supportive of a significant role for nuclear power in our energy 
future, an aggressive nuclear research and development program, and a 
viable nuclear technology infrastructure. Through the GNEP program, we 
are pursuing in parallel the development of the policies, technologies, 
and facilities necessary for the U.S. to be a global leader in the 
nuclear energy enterprise and to ensure our energy security and 
national security objectives.
    The Department's FY 2008 budget request proposes an $874.6 million 
investment in nuclear research, development and infrastructure for the 
Nation's future. This budget request supports the President's 
priorities to enhance the Nation's energy security while enabling 
significant improvements in environmental quality. Our request supports 
development of new nuclear generation technologies and advanced energy 
products that provide significant improvements in sustainability, 
economics, safety and reliability, and proliferation and terrorism 
resistance.
    While we have made great progress in all program areas, much 
remains to be done. Our FY 2008 request moves us in the right direction 
and I will now provide you a full report of our activities and explain 
the President's request for nuclear energy in detail.

NUCLEAR POWER 2010

    To support near-term domestic expansion of nuclear energy, the FY 
2008 budget requests $114 million for the Nuclear Power 2010 program to 
support continued cost-shared efforts with industry to reduce the 
barriers to the deployment of new nuclear power plants in the U.S. The 
technology focus of the Nuclear Power 2010 program is on Generation 
III+ advanced, light water reactor designs, which offer advancements in 
safety and economics over the Generation III designs certified in the 
1990s by the Nuclear Regulatory Commission (NRC). To reduce the 
regulatory uncertainties and enable the deployment of new Generation 
III+ nuclear power plants in the U.S., it is essential to demonstrate 
the untested federal regulatory processes for the siting, construction, 
and operation of new nuclear plants. In addition, design finalization 
of two standard plant designs and NRC certification of these Generation 
III+ advanced reactor concepts are needed to reduce the high initial 
capital costs of the first new plants so that these new technologies 
can be competitive in the deregulated electricity market and deployable 
within the next decade.
    The FY 2008 budget request continues the licensing demonstration 
activities started in previous years. Activities include completion of 
the last Early Site Permit demonstration projects and continuation of 
the New Nuclear Plant Licensing Demonstration projects that will 
exercise the untested licensing process to build and operate new 
nuclear plants and complete and obtain certification of two advanced 
Generation III+ advanced reactor designs. Engineering activities in 
support of the submission of two combined Construction and Operating 
License (COL) applications to the NRC will continue. In addition, two 
reactor vendors will continue first-of-a-kind design activities for two 
standard nuclear plants.
    We anticipate the NRC will soon vote on approval of the Early Site 
Permit for the Exelon Generation Company's Clinton site in central 
Illinois, which culminates a four-year, cost-shared project between DOE 
and the Chicago-based Exelon Corporation. NRC approval of the Clinton 
Early Site Permit would represent a major accomplishment in the Energy 
Department's effort to address the barriers and stimulate deployment of 
new nuclear power plants in the United States.
    The project teams, Dominion Energy and NuStart Energy Development 
LLC, involved in the licensing demonstration projects represent power 
generating companies and reactor vendors that operate more than two-
thirds of all the U.S. nuclear power plants in operation today. As a 
result of the Nuclear Power 2010 program and Energy Policy Act of 2005 
financial incentives (e.g., standby support), fourteen power companies 
have announced their intentions to apply for combined construction and 
operating licenses. Several have specifically stated that they are 
building on work being done in the Nuclear Power 2010 program as the 
basis for their applications.
    The U.S. is at a critical juncture in the future of nuclear power 
in the United States. Unlike many of our international research 
partners, our nuclear industry has not been heavily supported 
financially and politically over the past thirty years. Today the need 
for increased electrical generating capacity is clear and hopefully 
undisputed. We have only one growth option that allows us to have a 
diversified electrical generation portfolio that includes a significant 
carbon emissions-free component, and that is nuclear power. To realize 
this option, we are asking private companies to build plants whose 
collective cost will likely exceed their net worth. This represents an 
enormous financial risk, the same risk that caused many U.S. companies 
to go into bankruptcy in the past.
    If one accepts the fact that we need more electrical generation 
capacity, and if one desires to have a component of that new capacity 
that is carbon free, and one recognizes the financial considerations 
associated with such a large private investment in technologies that we 
have not supported in thirty years, then the importance of this program 
to our future energy security is self-evident. These companies will be 
building new generating capacity in the very near future, but the 
question they must first answer is whether this generation will come 
from clean, safe, nuclear technologies or not.
    If widely deployed in the U.S., these new technologies will create 
significant business opportunities and will support the rapid growth of 
heavy equipment fabrication, high technology and commercial 
construction industries in this country. Moreover, these American 
technologies and industrial capabilities will be highly competitive 
internationally and would support our leadership role in the global 
expansion of safe, clean nuclear power.

ADVANCED FUEL CYCLE INITIATIVE

    One of the most important and challenging issues affecting future 
expansion of nuclear energy in the U.S. and worldwide is dealing 
effectively with spent nuclear fuel and high-level waste. For the 
medium-term, the Advanced Fuel Cycle Initiative (AFCI) will develop 
fuel cycle technologies that will support the economic and sustained 
production of nuclear energy while minimizing waste in a proliferation-
resistant manner. To support the development of these technologies, the 
FY 2008 Budget request includes $395.0 million for AFCI.
    AFCI's near-term goals are to develop and demonstrate advanced, 
proliferation-resistant fuel cycle technologies for treatment of 
commercial light water reactor spent fuel, to develop an integrated 
spent fuel recycling plan, and to provide information and support on 
efforts to minimize the amount of material that needs disposal in a 
geologic repository. AFCI conducts research and development of spent 
fuel treatment and recycling technologies to support an expanding role 
for nuclear power in the U.S. and to promote world-wide expansion of 
nuclear energy in a proliferation-resistant manner as envisioned for 
the Global Nuclear Energy Partnership (GNEP). AFCI is the U.S. 
technology component of the GNEP.
    Specifically, in FY 2008, the Department intends to complete 
industry-led conceptual design studies for the nuclear fuel recycling 
center and the advanced recycling reactor Demonstration Analysis. 
Additionally, DOE will continue start-to-finish demonstrations of 
recycling technologies, which are expected to produce separated 
transuranics for use in transmutation fuel development, as well as 
conduct systems analysis and advanced computing and simulation 
activities focused on a variety of deployment system alternatives and 
supporting technology development. As part of GNEP Technology 
Development, the Department also intends to evaluate small, 
proliferation-resistant reactors for potential U.S. manufacture and 
export to reactor user nations.
    GNEP seeks to bring about a significant, wide-scale use of nuclear 
energy, and to take actions now that will allow that vision to be 
achieved while decreasing the risk of nuclear weapons proliferation and 
effectively addressing the challenges of nuclear waste disposal. GNEP 
will advance the nonproliferation and national security interests of 
the United States by reinforcing its nonproliferation policies and 
limiting the spread of enrichment and reprocessing technologies, and 
will eventually eliminate excess civilian plutonium stocks that have 
accumulated. The AFCI budget request supports the Department's goal of 
realizing the GNEP vision. AFCI activities in FY 2007 and FY 2008 are 
focused on developing a detailed roadmap for implementing all aspects 
of the GNEP vision and informing a Secretarial decision in June 2008 on 
the path forward for GNEP.
    Long-term goals for AFCI/GNEP will develop and demonstrate an 
advanced, proliferation-resistant closed nuclear fuel cycle system 
involving spent fuel partitioning and recycling of actinides and other 
long-lived radioactive elements for destruction through transmutation 
in fast reactors that could result in a significant increase in the 
effective capacity of the planned Yucca Mountain repository. This 
increase would come principally from the destruction of actinides that 
generate the heat that limits repository capacity that the Yucca 
Mountain repository would have. This capacity increase would ensure 
enough capacity to accommodate all the spent fuel generated in the 
United States this century from any reasonably conceivable deployment 
scenario for nuclear energy. Yet, under any fuel cycle scenario a 
geologic repository is necessary. Therefore, GNEP and Yucca Mountain 
are proceeding on parallel tracks.

GENERATION IV NUCLEAR ENERGY SYSTEMS INITIATIVE

    The FY 2008 budget request includes $36.1 million to continue 
development of next-generation nuclear energy systems within the 
Generation IV program. For the long-term, the Generation IV program 
will develop new nuclear energy systems that can compete with advanced 
fossil and renewable technologies, enabling power providers to select 
from a diverse group of options that are economical, reliable, safe, 
secure, and environmentally acceptable. In particular, the Next 
Generation Nuclear Plant (NGNP) reactor concept will be capable of 
providing high-temperature process heat for various industrial 
applications, including the production of hydrogen in support of the 
President's Advanced Energy Initiative.
    The NGNP, with an investment of $30 million within the Generation 
IV Nuclear Energy Systems Initiative, will utilize a Generation IV Very 
High Temperature Reactor configured for production of high temperature 
process heat for the generation of hydrogen, electricity, and other 
industrial commodities. The Energy Policy Act of 2005 (EPACT) 
authorized the Department to create a two-phased NGNP Project at the 
Idaho National Laboratory (INL). The Department is presently engaged in 
Phase 1 of the EPACT defined scope of work which includes: developing a 
licensing strategy, selecting and validating the appropriate hydrogen 
production technology, conducting enabling research and development for 
the reactor system, determining whether it is appropriate to combine 
electricity generation and hydrogen production in a single prototype 
nuclear reactor and plant, and establishing key design parameters. 
Phase I will continue until 2011, at which time the Department will 
evaluate the need for continuing into the design and construction 
activities called for in Phase II.
    The FY 2008 budget request maintains critical R&D that will help 
achieve the desired goals of sustainability, economics, and 
proliferation resistance. Further investigation of technical and 
economical challenges and risks is needed before a decision can be made 
to proceed with a demonstration of a next-generation reactor.

NUCLEAR HYDROGEN INITIATIVE

    Hydrogen offers significant promise as a future energy technology, 
particularly for the transportation sector. The use of hydrogen in 
transportation will reduce U.S. dependence on foreign sources of 
petroleum, enhancing our energy security. The FY 2008 budget request 
for the Office of Nuclear Energy includes $22.6 million to continue to 
develop enabling technologies, demonstrate nuclear-based hydrogen 
production technologies, and study potential hydrogen production 
strategies to support the President's vision for a future hydrogen 
economy.
    Currently, the only economical, large-scale method of hydrogen 
production involves the conversion of methane into hydrogen through a 
steam reforming process. This process produces ten kilograms of 
greenhouse gases for every kilogram of hydrogen, defeating a primary 
advantage of using hydrogen--its environmental benefits. Another 
existing method, electrolysis, converts water into hydrogen using 
electricity. Electrolysis is typically used for small production 
quantities and is inherently less efficient because electricity must 
first be produced to run the equipment used to convert the water into 
hydrogen. Additionally, the environmental benefits of electrolysis are 
negated unless a non-emitting technology, such as nuclear or renewable 
energy, is used to produce the electricity. The Nuclear Hydrogen 
Initiative is developing processes that operate across a range of 
temperatures for the various advanced reactors being researched by the 
Generation IV Nuclear Energy Systems Initiative. These processes, 
coupled with advanced nuclear reactors, have the potential for high-
efficiency, large-scale production of hydrogen.
    The objective of this program is to demonstrate the technologies at 
increasingly larger scales ultimately culminating in an industrial 
scale that would be technically and economically suited for commercial 
deployment. FY 2005 and FY 2006 activities were focused on the 
validation of individual processes and components; FY 2007 and FY 2008 
are focused on the design, construction and operation of integrated 
laboratory scale experiments. In FY 2008, the Department will complete 
construction of integrated laboratory-scale system experiments and 
begin testing to enable the 2011 selection of the technology that could 
be demonstrated in a pilot scale hydrogen production experiment.

RADIOLOGICAL FACILITIES MANAGEMENT

    The Office of Nuclear Energy's FY 2008 budget request also includes 
$53.0 million to maintain critical research and production facilities 
for medical isotopes and radioisotope power systems at the Idaho 
National Laboratory, the Oak Ridge National Laboratory, the Los Alamos 
National Laboratory, the Sandia National Laboratory, and the Brookhaven 
National Laboratory. This request also includes funding for University 
Research Reactors.
    These funds assure that the infrastructure for the facilities meet 
essential safety and environmental requirements and are maintained at 
operable user-ready levels. Programmatic activities, including 
production and research, are funded either by other DOE programs, by 
the private sector, or by other federal agency users.
    The Department seeks $14.9 million to maintain one-of-a-kind 
facilities at the Idaho, Oak Ridge, Brookhaven, and Los Alamos National 
Laboratories for isotope production and processing. These isotopes are 
used to help improve the accuracy, effectiveness, and continuation of 
medical diagnoses and therapy, enhance homeland security, improve the 
efficiency of industrial processes, and provide precise measurement and 
investigative tools for materials, biomedical, environmental, 
archaeological, and other research. Actual operations, production, 
research or other activities are funded either by other DOE programs, 
by the private sector, or by other federal agency users.
    The Department also maintains unique facilities and capabilities at 
the Idaho, Oak Ridge, and Los Alamos National Laboratories that enable 
the Department to provide the radioisotope power systems for space 
exploration and national security applications. The FY 2008 budget 
requests $35.1 million to maintain the basic facilities and associated 
personnel whereas mission specific development or hardware fabrication 
costs are provided by the user agencies. This arrangement is essential 
in order to preserve the basic capability regardless of periodic 
fluctuations in the demand of the end product users.
    Finally, the Department requests $2.9 million in FY 2008 to provide 
research reactor fuel to universities and dispose of spent fuel from 
university reactors. Currently, there are 27 operating university 
research reactors at 27 institutions in the U.S. Many of these 
facilities have permanent fuel cores and therefore do not require 
regular fuel shipments. However, DOE supplies approximately a dozen 
universities with fresh fuel and shipments of spent fuel as needed.

IDAHO FACILITIES MANAGEMENT

    The Department is working to transform Idaho National Laboratory 
into one of the world's foremost nuclear research laboratories. As 
such, the FY 2008 budget request seeks $104.7 million for the Idaho 
Facilities Management Program to maintain and enhance the laboratory's 
nuclear energy research infrastructure.
    The Idaho Facilities Management Program operates and maintains 
three main engineering and research campuses and the Central Facilities 
Area at the Idaho National Laboratory. The three main engineering and 
research campuses are: (1) the Reactor Technology Complex which houses 
the world-renown Advanced Test Reactor, (2) the Materials and Fuels 
Complex, and (3) the Science and Technology Campus. As the Idaho 
National Laboratory landlord, the Office of Nuclear Energy also 
operates and maintains the Central Facilities Area at Idaho National 
Laboratory, providing site-wide support services and from which various 
site infrastructure systems and facilities, such as electrical utility 
distribution, intra-laboratory communications systems, and roads are 
managed and maintained. Also included within the Central Facilities 
Area is the Radiological and Environmental Sciences Laboratory operated 
by the Office of Nuclear Energy.

IDAHO SITE-WIDE SAFEGUARDS & SECURITIES

    The mission of the Idaho Site-wide Safeguards and Security program 
is to protect the assets and infrastructure of the Idaho National 
Laboratory from theft, diversion, sabotage, espionage, unauthorized 
access, compromise, and other hostile acts that may cause unacceptable 
adverse impacts on national security; program continuity; or the health 
and safety of employees, the public, or the environment.
    The FY 2008 Budget Request includes $72.9 million to provide 
protection of nuclear materials, classified matter, Government 
property, and other vital assets from unauthorized access, theft , 
diversion, sabotage, espionage, and other hostile acts that may cause 
risks to national security, the health and safety of DOE and contractor 
employees, the public or the environment.

UNIVERSITY REACTOR INFRASTRUCTURE AND EDUCATIONAL ASSISTANCE

    While the University Educational Assistance program has concluded, 
funding will continue to be provided to the Nation's nuclear science 
and engineering universities through our applied research and 
development programs by means of our Nuclear Energy Research Initiative 
(NERI). NERI funds are competitively awarded to support research 
objectives of the Advanced Fuel Cycle Initiative, the Generation IV 
Energy Systems Initiative and the Nuclear Hydrogen Initiative. By 
increasing the opportunities for university participation in our 
research programs, the Department seeks to establish an improved 
education and research network among universities, laboratories, 
industry and government. Approximately $62 million in funding for 
universities is included in the research programs for FY 2008, a 21 
percent increase over the FY 2007 request.

CONCLUSION

    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 task ahead of investing in 
our energy security.
    I would be pleased to answer any questions you may have.

                    Biography for Dennis R. Spurgeon

    Dennis Spurgeon was sworn in on April 3, 2006, as the first 
Assistant Secretary for Nuclear Energy (NE) at the Department of Energy 
in more than a decade. In this capacity, Mr. Spurgeon is the senior 
nuclear technology official in the U.S. Government.
    Mr. Spurgeon is responsible for the Department's nuclear energy 
enterprise, including nuclear technology research and development, 
management of the Department's nuclear technology infrastructure, and 
support to nuclear education in the United States. NE's nuclear 
technology infrastructure is comprised of hot cells, test reactors, 
accelerators and other highly specialized facilities that support 
nuclear research and development, materials testing, and production of 
isotopes for medicine and radioisotope power systems for space and 
national security users. He is responsible for execution of a $536 
million annual federal budget (FY 2006).
    Mr. Spurgeon leads the recently-announced Global Nuclear Energy 
Partnership, a comprehensive strategy aimed at accelerating the 
demonstration of a more proliferation resistant closed fuel cycle and 
bringing the benefits of nuclear energy to the world in a safer and 
more secure manner, reducing the possibility that nuclear energy could 
be used for non-peaceful purposes. GNEP is part of the President's 
Advanced Energy Initiative.
    Most recently, Assistant Secretary Spurgeon served as Executive 
Vice President and Chief Operating Office for USEC, Inc. an 
international supplier of enriched uranium for nuclear plants. Prior to 
that, he served as Chairman, Chief Executive Officer and principal 
owner of Swiftships, an international leader in shipbuilding for 
commercial and military markets.
    Assistant Secretary Spurgeon held posts in the Ford administration, 
including an assignment as Assistant Director for Fuel Cycle in the 
U.S. Energy Research and Development Administration. He was a member of 
the White House task force that developed President Ford's nuclear 
policy. Earlier in his career, as a U.S. Naval officer, he served as 
technical assistant to Commissioner Tommy Thompson and later to Dr. 
Glenn Seaborg, Chairman of the Atomic Energy Commission and predecessor 
agency of the department.
    He also held executive positions at the former United Nuclear 
Corporation, where as Chief Operating Officer he managed the 
manufacturing of reactor cores for the Navy and operation of the 
Department's former N-reactor, located at the Hanford Reservation. He 
previously worked for the General Atomic Company, where he assisted in 
the development of nuclear reactor plants for electric power 
generation. He served in the U.S. Navy, achieving the rank of Captain.
    Mr. Spurgeon graduated with distinction from the U.S. Naval 
Academy. He holds a Masters of Science in nuclear engineering and the 
degree of Nuclear Engineer from the Massachusetts Institute of 
Technology.

    Chairman Lampson. Thank you very much, Mr. Spurgeon. Mr. 
Karsner, you are recognized for five minutes.

  STATEMENT OF MR. ALEXANDER KARSNER, ASSISTANT SECRETARY FOR 
  ENERGY EFFICIENCY AND RENEWABLE ENERGY, U.S. DEPARTMENT OF 
                             ENERGY

    Mr. Karsner. Thank you, Mr. Chairman. Mr. Chairman, Ranking 
Member Inglis, and Members of the Committee, thank you for the 
opportunity to testify on the President's fiscal year 2008 
budget request for the Office of Energy Efficiency and 
Renewable Energy.
    The request includes $1.24 billion for EERE, approximately 
$60 million more than the fiscal year 2007 request to Congress. 
To be clear, my testimony today on the fiscal year 2008 budget 
request is presented in comparison to the Administration's 
fiscal year 2007 request, not the final amounts that were 
eventually appropriated in the 2007 Continuing Resolution. The 
Department of Energy is in the process of preparing an 
operating plan for submittal to Congress, as required. EERE 
received an increase in funding under the CR, as you know, and 
I am grateful to Congress for its strong commitment to energy 
efficiency and renewable energy programs.
    The budget request addresses pressing energy security, 
economic, and environmental challenges facing our country 
today. Accelerating the development of renewable energy and 
energy efficiency technologies will maximize rational 
utilization of our resources and clean energy production. Much 
of EERE's funding is integral to the President's Advanced 
Energy Initiative. The AEI, launched in 2006, aims to confront 
our addiction to oil, reducing our dependence on foreign 
sources of energy, and commercializing emission-free sources of 
power generation. The technology investment is meant to change 
the way we power our homes, offices, and vehicles.
    In his 2007 State of the Union address, the President 
raised the bar further by challenging our country to reduce 
gasoline consumption by 20 percent within the decade, and 
advocated the ``Twenty in Ten'' plan. The budget request 
increases funding for programs to help the Nation achieve the 
Twenty in Ten goal, including for example, biomass and biofuels 
R&D, and expanding the availability of alternative 
transportation fuels.
    We must work to not only accelerate R&D for new energy 
technologies, but speed the adoption of the technologies into 
commercial products that can become more widely available into 
the marketplace at a reasonable cost to all Americans. EERE is 
taking aggressive steps to catalyze the rapid commercialization 
and deployment of critical energy advances through innovative 
partnerships with lenders and investment groups, with our state 
partners, and with industrial leaders. EERE's overall budget 
request reflects the funding needed to meet these goals.
    The fiscal year 2008 request for Biomass and Biorefinery 
Systems R&D is $179.3 million, an increase of approximately $30 
million. Biomass is the most viable renewable option for 
producing liquid transportation fuels in the near-term, holding 
great potential to help reduce our dependence on imported oil. 
EERE will continue to support cost-share efforts with industry 
to develop and demonstrate technologies to enable cellulosic 
biorefineries. The proposed increase will also support cost-
share projects with industry for enzyme development to produce 
low cost sugars from biomass, and for improved organism 
development, or ethanologens, for converting those sugars into 
ethanol.
    For the Vehicle Technologies Program, the Department is 
requesting $176.1 million to advance development of 
increasingly energy-efficient and environmentally friendly 
flexible platform technologies for our cars and trucks. The 
program focuses on technologies that use significantly less 
oil, and enable the auto industry to comply with reformed and 
modernized CAFE standards. Battery technologies have made 
significant progress towards our program goals, having reduced 
the cost of next generation hybrid vehicle batteries in each of 
the past three years from almost $1,200 per vehicle at the 
beginning of fiscal year 2004 to $750 per vehicle at the end of 
fiscal year 2006. We expect to bring that down the cost curve 
further in the next fiscal year to $625 per vehicle, and to 
increase our emphasis on batteries specifically optimized for 
plug-in hybrids. EERE seeks to have battery technology ready no 
later than 2014 that will enable auto manufacturers to widely 
and economically produce competitive plug-in hybrid vehicles 
having a 40 mile all electric range.
    Hydrogen is also an important element of the Nation's 
strategy for energy security and environmental stewardship. The 
President's $309 million budget request for DOE and the 
Hydrogen Fuel Initiative fulfills his commitment of $1.2 
billion over five years. The portion that is under my purview 
is $213 million, which reflects a $17.2 million increase over 
the Fiscal 2007 budget request.
    The proposed increase will accelerate and expand the 
efforts to research and develop hydrogen storage systems and 
improve performance, and fuel cell materials and components to 
reduce their cost and improve their durability. Over the past 
four years, our research has reduced the high volume costs of 
automotive fuel cells from $275 per kilowatt in 2002 to $107 
per kilowatt in 2006, a major step towards the ultimate cost 
target of $30 per kilowatt for commercial production.
    For solar energy, the budget request is $148.3 million, a 
level that is nearly twice that which was enacted in fiscal 
year 2006. To lower costs more rapidly and improve performance, 
the Department's photovoltaic R&D, for example, focuses on 
those technology pathways that have the greatest potential to 
reach cost competitiveness and grid parity by or before 2015.
    And we are emphasizing efficiency with our Building 
Technologies Program, which targets a long-term goal of cost-
neutral net zero energy buildings, houses that produce as much 
energy as they use on an annual basis by 2020. And in the near-
term, our R&D has helped industry to produce a white Light 
Emitting Diode, or LED, lamps which set a world record for LED 
brightness and efficacy in the use of a power chip.
    Our Wind Program focuses on reducing wind power costs and 
removing barriers to resource utilization to enable maximum 
market penetration of wind energy technology across the U.S., 
so that domestic emission-free clean energy may one day 
contribute up to 20 percent of our national generation 
portfolio.
    Our Industrial Technologies Program leverages its 
innovative technology transfer practices and highly successful 
partnerships with energy-intensive industries, as well as 
supporting development of next generation technologies to 
revolutionize U.S. industrial processes, including those for 
nanomanufacturing, that ultimately enhance our competitiveness, 
and deliver dramatic energy and environmental benefits.
    My written statement, of course, includes greater detail on 
these and our other programs, but this concludes my opening 
remarks, and I would be happy to answer any questions the 
Committee may have.
    [The prepared statement of Mr. Karsner follows:]

                Prepared Statement of Alexander Karsner

    Mr. Chairman and Members of the Committee, thank you for this 
opportunity to testify on the President's Fiscal Year (FY) 2008 budget 
request for the Office of Energy Efficiency and Renewable Energy 
(EERE).
    The President's FY 2008 budget request includes $1.24 billion for 
EERE, approximately $60 million (five percent) more than the FY 2007 
request to Congress. To be clear, my testimony today on the FY 2008 
budget request is presented in comparison to the Administration's FY 
2007 request--not the final amounts appropriated in the 2007 Continuing 
Resolution (CR). In accordance with the terms of the 2007 CR, the 
Department of Energy (DOE) is in the process of preparing an operating 
plan for submittal to Congress. EERE received an increase in funding 
under the CR, and I am grateful to Congress for its strong commitment 
to energy efficiency and renewable energy programs.
    The FY 2008 budget request addresses pressing energy and 
environmental challenges facing our country today by accelerating the 
development of both renewable energy technologies to increase the 
amount of clean energy produced in the United States and advanced 
energy efficient technologies, standards, and practices that use less 
energy. Much of EERE's funding is an integral part of the President's 
Advanced Energy Initiative (AEI), launched in 2006 to confront our 
addiction to oil, lessen dependence on foreign resources, and reduce 
emissions by developing clean sources of electricity generation. 
Together, new technologies can help change the way we power our homes, 
businesses, and automobiles.
    In his 2007 State of the Union address, the President raised the 
bar by seeking legislative action for our country to reduce gasoline 
consumption by 20 percent in the next 10 years, the ``20 in 10'' plan. 
The FY 2008 budget request increases funding for programs that may help 
the Nation achieve the ``20 in 10'' goal, including, for example, 
biomass/biofuels R&D that may help to expand the availability of 
alternative transportation fuels.
    EERE's applied science R&D contributes to the foundation for 
transforming the Nation's energy options and energy use. For example, 
one of this year's R&D 100 awards went to the Department's Idaho 
National Laboratory for its work with Xtreme Xylanase, an enzyme 
produced by bacteria found in the hot, acidic waters of Yellowstone 
National Park. Work on Xtreme Xylanase was funded in part by EERE's 
Biomass Program. The metabolic versatility of this enzyme (it breaks 
down cellulose and hemicellulose over a broad range of temperatures and 
acidic pH conditions) could help make cellulosic ethanol more 
efficiently and economically. In the field of solar energy, a new 
world-record 40 percent efficient concentrating photovoltaic solar cell 
was developed as a result of collaboration between DOE, the National 
Renewable Energy Laboratory, and Spectrolab. For general lighting 
applications with solid-state lighting, Cree, Inc., with DOE R&D 
funding, has released the new XLamp 7090 power white light-emitting 
diode (LED), setting a world record for LED brightness and efficacy (at 
85 lumens/Watt) in a power chip.
    It is essential, however, that, we work not only to accelerate R&D 
for new energy technologies, but address the accelerated adoption of 
technologies into commercial products that are widely available at 
reasonable cost to all Americans. Thus, in addition to its historical 
role of leading federal applied science on emerging technologies, EERE 
is taking aggressive steps to catalyze the rapid commercialization and 
deployment of critical energy advances through innovative partnerships 
and collaboration with lenders and investment groups, the States, and 
industry leaders. We seek to help enable and accelerate market 
transformation toward the use of more efficient and cleaner 
technologies.
    EERE's overall budget request reflects the funding needed to meet 
our goals. The following EERE programs target and support sectors of 
energy use and supply that will help lead our nation to a secure energy 
future:

BIOMASS AND BIOREFINERY SYSTEMS R&D

    The FY 2008 budget request for Biomass and Biorefinery Systems R&D 
is $179.3 million, an increase of $29.6 million, almost 20 percent 
above the FY 2007 request. This proposed funding increase reflects the 
essential role of the Biofuels Initiative in increasing America's 
energy security. Biomass is the most viable renewable option for 
producing liquid transportation fuels in the near-term, with the 
potential to help reduce our dependence on imported oil.
    The focus of the program is to make cellulosic ethanol cost-
competitive by 2012. EERE will continue in FY 2008 to support its cost-
share efforts with industry to develop and demonstrate technologies to 
enable cellulosic biorefineries for the production of transportation 
fuels and co-products. The FY 2008 funding increase also supports the 
validation of advancing biomass conversion technologies and feedstocks 
in biorefineries at approximately 10 percent of commercial scale. This 
effort enables industry to resolve remaining technical and process 
integration uncertainties for the ``next generation'' of biorefinery 
process technologies being examined at a significant, but less-costly 
scale.
    Ultimately, 10 percent scale demonstrations have the potential to 
reduce the overall cost and risk to industry along with improving the 
likelihood of obtaining financing for commercial-scale facilities.
    The FY 2008 funding increase will also support EERE cost-shared 
projects with industry for enzyme development for producing low cost 
sugars from biomass and for improved organism development or 
``ethanologen'' for converting those sugars to ethanol. These two 
industry cost-share projects address major barriers to meeting the 2012 
cost goal. Overall knowledge gained from Section 932 projects, 10 
percent validation scale projects, enzyme development, and ethanologen 
R&D, combined with other key R&D activities, should accelerate 
industry's ability to produce cost-competitive cellulosic ethanol.
    To address biomass resource availability and feedstock 
infrastructure to reduce the cost and improve the storage of delivered 
biomass in different geographical areas of the U.S., EERE will continue 
to support the Regional Feedstock Partnership work with the U.S. 
Department of Agriculture (USDA) and land grant colleges. These 
partnerships will help identify the regional biomass supply, growth, 
and biorefinery development opportunities.
    In order to capture and coordinate federal-wide activities 
supporting the President's goal, the Biomass Program is developing a 
National Biofuels Action Plan commissioned through the Biomass Research 
and Development Initiative. The Biomass Program will also establish the 
framework for an ethanol reverse auction in accordance with Section 942 
of EPACT 2005. The auction will award incentives on a per gallon basis 
of cellulosic biofuels produced.

VEHICLE TECHNOLOGIES PROGRAM

    In FY 2008, the Department is requesting $176.1 million for the 
Vehicle Technologies Program to advance development of increasingly 
more energy-efficient and environmentally friendly, flexible platform 
technologies for cars and trucks that will use significantly less oil 
and enable the auto industry to comply with reformed CAFE standards. 
This request is $10.1 million higher than the FY 2007 request, and will 
advance the state-of-the-art for energy storage batteries, power 
electronics and motors, and the hybrid drive systems and testing needed 
to accelerate manufacturing viability and delivery of plug-in hybrid 
electric vehicles.
    Activities in the Vehicle Technologies Program contribute to two 
cooperative government/industry activities: the FreedomCAR and Fuel 
Partnership (where CAR stands for Cooperative Automotive Research) and 
the 21st Century Truck Partnership. The FreedomCAR and Fuel Partnership 
is a collaborative effort among the U.S. Council for Automotive 
Research (USCAR--representing the three domestic automobile 
manufacturers), five energy suppliers, and DOE for cooperative, pre-
competitive research on advanced automotive technologies having 
significant potential to reduce oil consumption. The 21st Century Truck 
Partnership focuses on commercial vehicles. The partnership involves 
key members of the commercial vehicle industry, (truck equipment 
manufacturers and engine manufacturers) along with three other federal 
agencies. The R&D centers on improving advanced combustion engine 
systems and fuels and on reducing vehicle parasitic losses, meaning 
frictional and aerodynamic losses, extra loads like air conditioning, 
and other vehicle inefficiencies that increase fuel consumption.
    Vehicle Technologies Program activities that support the goals of 
the FreedomCAR and Fuel Partnership focus on high-efficiency and 
flexible platform vehicle technologies such as advanced combustion 
engines and their enabling fuels, hybrid vehicle systems (including 
plug-in hybrids), high-power and high-energy batteries, light-weight 
materials, and power electronics. These technologies could lead to 
substantial oil savings if adopted by industry participants and 
included in their manufacturing plans.
    The FreedomCAR goals include reducing the volume production cost of 
a high-power 25kW battery for use in hybrid passenger vehicles from 
$3,000 in 1998 to $500 by 2010. In 2006 we projected through the 
modeling of research data that lithium ion battery cost could be 
reduced to $750 per 25 kW battery system when produced in mass 
quantities. This year's request increases the emphasis on plug-in 
hybrid vehicle component technologies. Cited by the President as a key 
part of the strategy for reducing America's dependence on oil, these 
technologies offer the potential to make significant additional 
improvements in petroleum reduction beyond that achievable with 
standard hybrid configurations.
    Combustion engine efficiency has made good progress over the past 
three years (2004-2006), with our R&D increasing the efficiency of 
light-duty passenger vehicle diesel engines from 35 to 41 percent. This 
means that if manufacturers were to produce these more efficient 
engines, a car that previously got the CAFE average of 27 miles per 
gallon on gasoline could potentially get 37 miles per gallon with an 
advanced, clean diesel. In FY 2008, we expect to reach 43 percent 
efficiency for passenger vehicle diesel engines, approaching the 2010 
goal of 45 percent. These advanced combustion engines have the 
potential to achieve the efficiency goals for cars and trucks while 
maintaining cost and durability with near-zero emissions. Battery 
technologies have also made significant progress toward program goals, 
having reduced the cost of next-generation hybrid vehicle batteries in 
each of the past three years, from almost $1,200 per vehicle at the 
beginning of FY 2004 to $750 at the end of FY 2006. In FY 2008, we 
expect to bring that down to $625 per vehicle, and to increase our 
emphasis on batteries specifically optimized for plug-in hybrid 
vehicles to have battery technology ready by 2014 that will enable 
automobile manufacturers to economically produce competitive plug-in 
hybrid vehicles having a 40 mile all-electric range.
    R&D programs will also continue to accelerate materials research 
directed at light, strong vehicle structures to enable the production 
of lighter vehicles that could result in higher efficiency fleets, and 
to develop thermoelectric materials for efficient energy recovery from 
heat. Other activities will focus on expanding efforts to promote the 
adoption and use of petroleum-reducing fuels, technologies, and 
practices, principally by working with industry partners, fuel 
providers, Clean Cities coalitions and their stakeholders, and end-
users on activities ranging from using more alternative fuel vehicles 
and renewable fuel blends to driving smarter, minimizing wasteful idle 
time, and purchasing vehicles that get better fuel economy. 
Accordingly, the Vehicle Technologies Deployment budget request 
(including Clean Cities) will increase by over 100 percent relative to 
the FY 2007 request.

HYDROGEN TECHNOLOGY PROGRAM

    Hydrogen is an important element of our nation's long-term strategy 
for energy security and environmental stewardship. It could enhance our 
energy security by providing a transportation fuel that may be produced 
from a variety of domestic resources; and it should serve our 
environmental interests by allowing vehicles to operate using fuel 
cells, without generating any tailpipe emissions. The Department's 
research is focused on pathways that produce and deliver hydrogen from 
diverse origins including emission-free nuclear, and renewable 
resources.
    The President's $309 million FY 2008 budget request for DOE for the 
Hydrogen Fuel Initiative fulfills his commitment of $1.2 billion over 
five years. The portion of this under our purview in EERE is $213 
million, which reflects a $17.2 million increase over the FY 2007 
budget request. The proposed increase will accelerate and expand 
efforts to research and develop hydrogen-storage systems to improve 
performance, and fuel cell materials and components to reduce their 
cost, and improve durability. It will also support accelerating cost 
reduction of renewable hydrogen production technologies as well as 
critical delivery technologies.
    Much progress has been made since the announcement of the Hydrogen 
Fuel Initiative in 2003. The research has reduced the high-volume cost 
of automotive fuel cells from $275 per kilowatt in 2002 to $107 per 
kilowatt in 2006--a major step towards the ultimate cost target of $30 
per kilowatt. In FY 2008, we will continue projects on fuel cell 
catalysts and membranes, and cold-weather start-up and operation. In 
addition to reducing cost and improving performance, this work will 
help us achieve our 2010 durability target of 5,000 hours, which should 
enable a vehicle lifetime of 150,000 miles.
    We have also achieved our 2006 hydrogen cost goal of $3 per 
gasoline-gallon-equivalent for hydrogen produced by distributed 
reforming of natural gas, a potentially economical early market 
pathway. Our research will sharpen its focus to meet the same objective 
through renewable pathways--including reforming of bio-derived liquids 
and electrolysis. We are also working with the Department's Offices of 
Nuclear Energy, Fossil Energy, and Science to develop nuclear-based 
hydrogen production, hydrogen from coal--exclusively with carbon 
sequestration--and longer-term biological and photoelectrochemical 
hydrogen production pathways.
    Our diverse hydrogen-storage portfolio is also showing promising 
results, with innovative materials being developed in areas such as 
metal hydrides, chemical hydrides, and carbon-based materials. Research 
conducted at our ``Centers of Excellence,'' and by independent 
projects, has continued to increase material storage capacity. 
Substantial breakthroughs are required to reach our goal of providing 
consumers with enough storage for a 300-mile driving range, without 
compromising a vehicle's interior space.
    Developing hydrogen technologies that can be manufactured 
domestically will also improve our economic competitiveness. Our 
manufacturing R&D effort addresses the need for high-volume fabrication 
processes for fuel cells and many other components, which are all 
currently built one-at-a-time. This is essential to lowering the cost 
of these technologies, and to developing a domestic supplier base.
    In addition to these R&D activities, we are addressing other 
challenges significant to realizing the benefits of hydrogen fuel 
cells. Our Technology Validation Program has brought together teams of 
automobile manufacturers and energy companies to operate and evaluate 
fuel cell vehicles and hydrogen stations under real-world conditions. 
To date, the program has placed 69 fuel cell vehicles on the road, 
served by 10 hydrogen fueling stations.
    Furthermore, we are working to ensure safe practices, and--through 
support of existing codes and standards development organizations--we 
are laying the groundwork for developing technically sound codes and 
standards, which are essential to implementing hydrogen technologies.
    Finally, our education activities focus on overcoming the knowledge 
barriers inherent in the introduction of new technology. Last month, we 
released a multimedia web-based course that introduces hydrogen to 
first responders. In the coming year, we will continue to expand the 
availability of training and conduct outreach to raise awareness of the 
technology.
    The effects of the Department's broad-based efforts in the Hydrogen 
Program are being seen nationwide, and progress has been substantial. 
Investments are not only occurring at the federal level, but also at 
state and local levels. These diverse investments increase our 
probability of success in overcoming existing technological barriers, 
which will allow industry to make fuel cell vehicles that customers 
will want to buy, and encourage investment in a hydrogen refueling 
infrastructure that is profitable.

SOLAR ENERGY PROGRAM

    The Solar Energy Program sponsors research, development, and 
deployment of solar energy technologies and systems that can help our 
Nation meet electricity needs and reduce the stress on our electricity 
infrastructure. Through the Solar America Initiative (SAI), the Solar 
Program aims to accelerate the market competitiveness of solar 
electricity as industry-led teams compete to deliver solar systems that 
are less expensive, more efficient, and highly reliable. The Solar 
Program supports three technology areas: photovoltaics (PV), 
concentrating solar power (CSP), and solar heating and lighting. The FY 
2008 budget request for Solar Energy is $148.3 million, a level that is 
nearly twice the enacted FY 2006 level.
    To lower costs more rapidly and improve performance, the 
Department's PV R&D, budgeted in FY 2008 at $137.3 million, focuses on 
those technology pathways that have the greatest potential to reach 
cost-competitiveness and grid parity by or before 2015. Industry-led 
partnerships with universities, state groups and National Laboratories, 
known as ``Technology Pathway Partnerships,'' will continue in FY 2008 
to address the issues of cost, performance, and reliability associated 
with each pathway. Work on PV modules, the heart of PV systems, will be 
conducted, as well as other ``balance-of-system'' components.
    To catalyze market transformation, DOE will promote the expansion 
of the solar marketplace by seizing opportunities for growth and by 
lowering barriers to entry. The Department will provide technical 
outreach to States and utilities, continue pressing work on codes and 
standards issues, and solicit new applications for its Solar America 
Cities activity. These market transformation activities help pave the 
way for technologies developed by our industry partnerships to enter 
the marketplace.
    We will emphasize the importance of interconnection standard 
procedures and net metering regulations that are designed to 
accommodate solar and other clean distributed energy systems. A 
precondition for large-scale solar market penetration in America is to 
have the proper means for homeowners and businesses to connect solar 
systems to the grid, as well as to be paid for excess electricity they 
feed back into the grid. We are working with our colleagues in the 
Department's Office of Electricity Delivery and Energy Reliability to 
develop ``best practice'' recommendations for States to use as they 
undertake consideration of interconnection procedures and net metering 
regulations and make implementation decisions pursuant to Sections 1251 
and 1254 of EPACT 2005. FY 2008 funding will also be used to offer 
technical outreach to States and utilities to enhance solar 
connectivity issues.
    Work will continue on the multi-year solicitations launched in FY 
2007 that promote adoption of market-ready solar technologies and a new 
effort will support benchmarking, modeling, and analysis for the 
systems driven approach, and market, value and policy analysis needed 
to support the SAI. EERE's PV activities are increasingly coordinated 
and when possible convergent with solar energy activities in the 
Building Technologies and the Federal Energy Management programs, and 
the research activities of the DOE Office of Science.
    The FY 2008 budget request for CSP--systems that utilize heat 
generated by concentrating and absorbing the sun's energy to drive a 
heat engine/generator to produce electric power--is $9.0 million. The 
development of advanced thermal energy storage technologies will be 
expanded, along with continued support to develop next generation 
parabolic trough concentrators, solar engines, and receivers. For 
distributed applications, research will focus on improving the 
reliability of dish systems through the operation and testing of 
multiple units. Technical assistance will be provided to industry in 
its development of a 1.0 MW dish system in California that is expected 
to be the precursor of several much larger plants. Technical support 
will also be provided to the Western Governors' Association and several 
southwestern utilities to assist their CSP deployment activities.
    The Solar Heating and Lighting program, a $2.0 million request, 
will focus on R&D to reduce the cost of solar heating in freezing 
climates. The program will also support collaboration with EERE's 
Building Technologies programs to integrate photovoltaic systems, solar 
water heating, and solar space heating into home design and structure. 
Such deployment efforts will help to seize market expansion 
opportunities.

BUILDING TECHNOLOGIES PROGRAM

    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. Addressing 
that significant sector of energy consumption, the $86.5 million 
requested this year for the Building Technologies Program represents a 
$9.1 million increase of 12 percent over the FY 2007 request. The 
funding supports a portfolio of activities that includes solid state 
lighting, improved energy efficiency of other building components and 
equipment and their effective integration using whole-building-system 
design technique, the development of codes and standards for buildings 
and appliances, and education and market introduction programs, 
including ENERGY STAR and EnergySmart Schools.
    Funding for Residential Buildings Integration aims to enable 
residential buildings to use up to 70 percent less energy, and to 
integrate renewable energy systems into highly efficient buildings to 
achieve the long-term goal in 2020 of net Zero Energy Buildings--houses 
that produce as much energy as they use on an annual basis. During FY 
2008, research for production-ready new residential buildings that are 
40 percent more efficient will continue for four climate zones.
    The $19.3 million request for solid state lighting will advance 
development of the organic and inorganic LEDs that has the potential to 
double the efficiency of fluorescent lighting technology. The FY 2008 
requested funding will be used to develop general illumination 
technologies with the goal of achieving energy efficiencies of up to 93 
lumens per Watt with improved visual comfort and quality of light and 
focus on applied research that enables the industrial base to 
manufacture LEDs.
    The FY 2008 request reflects the Department's commitment to clear 
the backlog of equipment standards and test procedures that had 
accumulated in the prior 12 years and meet the statutory schedule for 
rule-makings for new products covered by EPACT 2005. The Department 
will continue to implement productivity enhancements that will allow 
multiple rule-making activities to proceed simultaneously, while 
maintaining the rigorous technical and economic analysis required by 
statute.
    Funds for the Building Technologies Program will also support 
development of highly insulating and dynamic window technologies and 
integrated attic-roof systems needed to achieve long-term zero energy 
building goals. Efforts to accelerate the adoption of efficient 
building technologies by consumers and businesses include expanded 
ENERGY STAR specifications and labels for more products, promotion of 
advanced building efficiency codes, and public-private partnerships to 
advance efficient schools, hospitals, commercial lighting, and home 
building.

FEDERAL ENERGY MANAGEMENT PROGRAM

    The Federal Energy Management Program (FEMP) assists federal 
agencies, including DOE, in increasing their use of energy efficiency 
and renewable energy technologies through alternative financing 
contract support and technical assistance, and coordinates federal 
reporting and evaluation of agency progress each year. As the single 
largest energy consumer in the U.S., the Federal Government must set an 
example and lead the Nation toward becoming a cleaner, more efficient 
consumer by using existing energy efficiency and renewable energy 
technologies and techniques. On January 24, 2007, President Bush signed 
a new Executive Order to strengthen the environmental, energy, and 
transportation management of federal agencies which includes a 
requirement for agencies to reduce their energy intensity by three 
percent each year until 2015, compared with a 2003 baseline.
    The FY 2008 request for FEMP is $16.8 million, a slight decrease of 
$0.1 million from the FY 2007 request. We are requesting $7.9 million 
for FEMP alternative financing programs that help agencies access 
private sector financing to fund energy improvements without the use of 
current appropriations. We expect to achieve not less than $160 million 
in private sector investment through Super ESPCs, Energy Savings 
Performance Contracts, and Utility Energy Service Contracts (UESCs), 
which will result in about 15 trillion Btus in energy saved over the 
life cycle of the projects. Furthermore, we are requesting $6.5 million 
for Technical Guidance and Assistance to help federal energy managers 
identify, design, and implement new construction and facility 
improvement projects that incorporate energy efficiency and renewable 
energy. FEMP will assist federal agencies in meeting the increased 
energy efficiency goals, established by the new Executive Order, by 
orienting its Technical Guidance and Assistance, Training, and Outreach 
activities towards attracting private-sector financing for investment 
into energy efficiency at federal facilities. In addition to the focus 
on facility energy consumption, FEMP also tracks alternative fuel use 
in federal vehicle fleets.
    In FY 2008, the Departmental Energy Management Program (DEMP) is 
being discontinued. FEMP will still provide policy guidance and 
technical assistance to the Department, but DOE has determined that the 
management of energy efficiency and renewable investments at its 
facilities can be more effectively conducted by those facilities. While 
not reported separately, DOE national labs and other facilities spend 
significant funding (direct and indirect) on energy efficiency 
improvements, while also using ESPCs and UESCs where appropriate.

WIND ENERGY PROGRAM

    The Wind Program focuses on reducing wind power costs and removing 
barriers to resource utilization of wind energy technology in the 
United States. The program's FY 2008 request is $40.1 million.
    As a result of thirty years of R&D, wind turbines can now provide 
cost-effective, reliable clean energy in high wind speed areas. While 
we will continue to do R&D to improve wind energy technologies in low 
wind speed areas, we are also focusing on near-term actions to remove 
existing barriers to increasing the use of wind energy, building on the 
current robust market for wind energy in the U.S. These efforts could 
help to set the path for the wind industry to accelerate its 
penetration of delivered emission-free energy, significantly expanding 
beyond the roughly one percent of installed electrical generating 
capacity today.
    The program is expanding application and deployment-related 
activities. The $12.9 million requested for Systems Integration and 
Technology Acceptance will help wind technologies entering the market 
to overcome key obstacles such as grid integration, siting, permitting, 
and environmental barriers. In addition, there will be increased 
support to address issues of pre-competitive turbine reliability and 
performance via efforts of National Laboratories and Cooperative 
Research and Development Agreements or ``CRADAs'' with industry. The 
Wind Program will also establish a federal interagency siting group to 
minimize regulatory delays on wind projects.
    The Wind Program is funding a broader effort on distributed wind 
technologies and applications to advance the full scope of diverse 
opportunities for wind energy on the distribution side of the electric 
power system.
    A U.S. wind industry-wide roadmapping analysis, being supported by 
the DOE wind program, is underway to determine the technical 
feasibility for wind energy to generate 20 percent of our nation's 
electricity. To achieve this vision it would require grid 
modernization, expansion, and integration, and removal of other 
deployment barriers. Success would enable delivery of more than 300 
gigawatts of new, clean, affordable, and domestic production capacity 
to our urban load centers and be a substantial contributor to economic 
growth, manufacturing, and rural prosperity. EERE will work with DOE's 
Office of Electricity Delivery and Energy Reliability on several 
studies aimed at expanding electricity transmission between remote wind 
resources and urban areas.

WEATHERIZATION AND INTERGOVERNMENTAL PROGRAM

    In FY 2008, we are requesting $204.9 million for Weatherization and 
Intergovernmental Activities, a $20.1 million decrease from the FY 2007 
request. The reduction is primarily related to the decrease in the 
amounts requested for the Weatherization Assistance Program, which will 
enable greater investments in advanced R&D within the EERE portfolio to 
address national priorities: reducing dependence on foreign oil, 
accelerating the development of clean, emission-free electricity supply 
options, and developing highly efficient new technologies, products, 
and practices for our homes and buildings.
    The requested $144 million for the Weatherization Assistance 
Program will fund energy efficiency audits and upgrades for at least 
54,599 low-income homes. DOE works directly with States and certain 
Native American Tribes that contract with local governmental or non-
profit agencies to deliver weatherization services to homes in need of 
energy assistance.
    The $45.5 million requested for the State Energy Program provides 
financial and technical assistance to State governments, enabling them 
to target their high priority energy needs and expand clean energy 
choices for their citizens and businesses. This request includes $10.5 
million for a competitive solicitation that will seek regional and 
state partnerships to replicate smart energy policies and programs 
among States. The regional context is outlined in EPACT and aligns with 
our electricity transmission infrastructure.
    Clean electricity generation is targeted by the Renewable Energy 
Production Initiative, which provides financial incentive payment to 
public and Tribal utilities and not-for-profit electric cooperatives 
for renewable generation systems that use solar, wind, geothermal, or 
biomass technologies. The Tribal Energy Program aims to facilitate the 
installation of 100 MW of renewable energy generation by Native 
American tribes by 2010.
    The Asia Pacific Partnership (APP) for Clean Development and 
Climate requests funding at the $7.5 million level. This international 
partnership is an important and innovative accord to accelerate the 
development and deployment of clean energy technologies among the six 
member countries: Australia, China, India, Japan, South Korea, and the 
United States. Representing about half of the world's economy, 
population, energy use, and emissions, the six countries have agreed to 
work together and with private sector partners to set and meet goals 
for energy security, national air pollution reduction, and global 
warming, employing policies and practices that promote sustainable 
economic growth and poverty reduction, while addressing the serious 
challenge of climate change.

INDUSTRIAL TECHNOLOGIES PROGRAM

    Industry consumes more energy than the residential, commercial, and 
transportation end-use sectors, and it is also the Nation's second 
largest emitter of CO2. Advancements in industrial energy-
efficient technology could improve U.S. competitiveness, and contribute 
to our national effort to reduce oil imports, alleviate natural gas 
price pressure, and preempt the need for new power plants and 
consequent emissions.
    The FY 2008 budget request for Industrial Technologies is $46.0 
million, a $0.4 million increase over the FY 2007 request. The program 
will leverage its innovative technology transfer practices and 
partnerships with energy-intensive industries, while shifting toward 
more crosscutting and higher-impact R&D activities that will bring 
innovative energy solutions to a much broader group of industrial 
companies, at a more accelerated pace.
    The Industrial Technologies Program (ITP) has a track record for 
moving innovative technologies from R&D through commercialization and 
onto the floors of industrial plants. In 2006 alone, eight technologies 
funded by ITP received prestigious R&D 100 awards. New technologies 
emerging from ITP's R&D program are being adopted to help solve some of 
industry's toughest energy and competitiveness challenges. In many 
cases, this is occurring through the industrial energy assessments that 
ITP is conducting at 250 of the Nation's largest energy-consuming 
manufacturing plants as part of Secretary Bodman's ``Easy Ways to Save 
Energy'' initiative. We estimate that ITP-sponsored technologies and 
deployment activities have contributed to industrial energy savings of 
over $3.1 billion in one year (2004).
    The $7.2 million requested for the new activity, Energy-Intensive 
Process R&D, will support R&D in four crosscutting areas to better 
deliver technology solutions for the industrial processes that consume 
the most energy. These four areas are Energy Conversion Systems, 
Industrial Reaction and Separation, High-Temperature Processing, and 
Fabrication and Infrastructure. One example of a technology that cuts 
across the industrial sector to deliver savings is ITP's ultra-high 
efficiency, ultra-low emissions, industrial steam generation ``Super 
Boiler.'' Since steam is used in every major sector, the potential 
benefits are tremendous. The Super Boiler is 10 to 20 percent more 
efficient than current technology and can reduce NOX emissions to below 
five parts per million, which represents an approximately 90 percent 
reduction in emissions from a conventional boiler.
    The $4.9 million request for the new Inter-Agency Manufacturing R&D 
activity working with the National Science and Technology Council will 
support the development or adaptation of next-generation technologies 
that can revolutionize U.S. industrial processes and deliver dramatic 
energy and environmental benefits. These next-generation technologies, 
such as entirely new processing routes and supply chains, can have 
broad application across industry, yet they typically require the type 
of high-risk, high-return R&D that one industry cannot usually 
undertake. Our initial research focus will include development of 
techniques and processes needed for nanomanufacturing. We aim to help 
transform industrial processes by enabling the mass production and 
application of nano-scale materials, structures, devices, and systems 
that provide unprecedented energy, cost, and productivity benefits in 
manufacturing.
    Deployment efforts such as ``Best Practices'' activities and 
Industrial Assessment Centers will continue to deliver the results of 
energy-efficiency R&D and energy-saving practices to industrial plants 
nationwide. A vehicle for educational outreach, the university-based 
Industrial Assessment Centers train engineers and scientists in the 
energy field, providing opportunities for students to conduct energy 
assessments at no cost to small and medium-sized manufacturing plants 
in the U.S.

FACILITIES AND INFRASTRUCTURE

    The FY 2008 budget request of $7.0 million for Facilities and 
Infrastructure, an increase of $1.0 million from the FY 2007 request, 
supports the operations and maintenance of the National Renewable 
Energy Laboratory (NREL) in Golden, CO. NREL is a single-purpose 
National Laboratory dedicated to R&D for energy efficiency, renewable 
energy, and related technologies that provides EERE, as well as DOE's 
Office of Science and the Office of Electricity Delivery and Energy 
Reliability, with R&D, expert advice, and programmatic counsel.

PROGRAM DIRECTION AND PROGRAM SUPPORT

    The Program Direction budget supports the management and technical 
direction and oversight needed to implement EERE programs at both 
headquarters and the Project Management Center. Areas funded by this 
request include: federal salaries, information systems and technology 
equipment, office space, travel, and support service contractors. The 
FY 2008 budget request for Program Direction totals $105.0 million, a 
$14.0 million increase over the FY 2007 request. This increase reflects 
EERE's updated staffing needs, which more closely align critical skills 
to mission requirements and adds staff to support technical program 
staffing shortfalls and implementation of the AEI and EPACT 2005 
priorities.
    The Program Support budget request provides resources for 
crosscutting performance evaluation, analysis, and planning for EERE 
programs and for technical advancement and outreach activities. The 
information developed by the Program Support components provides 
decision-makers at every level the information they need to make 
choices related to energy alternatives that can help the Department 
achieve its goals. The FY 2008 budget request for Program Support 
activities totals $13.3 million, representing a $2.4 million increase 
from the FY 2007 budget request. The increase reflects the expansion of 
EERE's market transformation and commercialization analysis and 
expanded efforts in the Technology Advancement and Outreach Office.

CONCLUSION

    Accelerating research, development, and deployment of America's 
abundant clean sources of energy and making more efficient use of all 
energy consumed is central to EERE's mission, and to a secure and 
competitive economic future that enhances our environmental well-being 
for our nation and our world. We believe the Administration's FY 2008 
budget request for energy efficiency and renewable energy programs 
strategically positions the stepping stones that will continuously 
catalyze and accelerate new energy sources, technologies, and practices 
into the marketplace, and hasten the transformation of how our homes, 
businesses, and vehicles use energy.
    This concludes my prepared statement, and I am happy to answer any 
questions the Committee Members may have.

                    Biography for Alexander Karsner

    Alexander ``Andy'' Karsner was unanimously confirmed by the Senate 
as Assistant Secretary for Energy Efficiency and Renewable Energy 
(EERE) on March 16, 2006 and sworn-in by Secretary of Energy Samuel W. 
Bodman on March 23, 2006.
    Assistant Secretary Karsner manages the Department of Energy's 
(DOE) $1.17 billion EERE office, which promotes the development and 
marketplace integration of renewable and environmentally sound energy 
technologies, as well as the preservation and efficient use of our 
nation's valuable resources. Assistant Secretary Karsner also helps 
lead DOE's efforts to carry out the Advanced Energy Initiative (AEI), 
announced by President Bush in his 2006 State of the Union address, 
which aims to accelerate breakthroughs in the way we power our cars, 
homes, and businesses.
    Previously, Assistant Secretary Karsner served in the private 
sector on a wide range of technologies including heavy fuel oil, 
distillates, natural gas, coal, wood waste/biomass, wind energy and 
distributed generation based upon renewable technologies. He has been 
responsible for and taken part in large-scale power projects in North 
America, Asia, the Middle East, North Africa, including unprecedented 
projects structuring in the Philippines and Pakistan.
    In 2002, Assistant Secretary Karsner led his company, Enercorp, to 
win a global competition to develop the world's largest private wind 
farm outside the United States at that time. He has worked with Tondu 
Energy Systems of Texas, Wartsila Power Development of Finland, and 
prominent multinational energy firms and developers including ABB of 
Sweden, RES of the UK, Tacke of Germany (now known as GE Wind), and 
Vestas of Denmark.
    Assistant Secretary Karsner also worked on behalf of the 
International Protocol for Hydrogen Economy, participating in meetings 
and ministerials to advance the President's agenda for a new energy 
economy. He was played an integral role in arranging DOE's U.S.-Morocco 
bilateral protocols for clean energy policy. Mr. Karsner is currently 
co-leading the Department's support for the Asia Pacific Pact to 
address global emissions with market based mechanisms.
    Assistant Secretary Karsner graduated with honors from Rice 
University, and received an MA from Hong Kong University. Mr. Karsner 
resides with his wife and family in Alexandria, Virginia.

    Chairman Lampson. Thank you, Mr. Karsner. Mr. Kolevar.

    STATEMENT OF MR. KEVIN M. KOLEVAR, DIRECTOR, OFFICE OF 
ELECTRICITY DELIVERY AND ENERGY RELIABILITY, U.S. DEPARTMENT OF 
                             ENERGY

    Mr. Kolevar. Thank you Chairman Lampson and Members of the 
Committee. Thank you for the opportunity today to testify on 
the President's fiscal year 2008 budget request for the Office 
of Electricity Delivery and Energy Reliability.
    The mission of the Office of Electricity Delivery and 
Energy Reliability (OE) is to lead national efforts to 
modernize the electricity delivery system, enhance the security 
and reliability of America's energy infrastructure, and 
facilitate recovery from disruptions to energy supply. These 
functions are vital to the Department of Energy's strategic 
goal of protecting our national and economic security by 
promoting a diverse supply and delivery of reliable, 
affordable, and environmentally responsible energy.
    The President's budget includes $114.9 million for OE in 
fiscal year 2008, which represents an eight percent decrease 
from the fiscal year 2007 request. This includes $86 million 
for Research and Development activities, $11.6 million for 
Operations and Analysis activities, and $17.4 million for 
program direction.
    I will primarily address the activities of OE's Research 
and Development program today. Our request of $86 million for 
fiscal year 2008 will fund the following four main activities: 
high temperature superconductivity, visualization and controls; 
energy storage and power electronics; and renewable and 
distributed systems integration. The development of these 
advanced electricity technologies will influence the future of 
all aspects of the electric transmission and distribution 
system.
    The first activity I would like to highlight is one to 
which the DOE has made a long-term commitment. This is the 
science and development of high temperature superconductivity. 
Superconducting cables transmit electricity through conductors 
at temperatures approaching absolute zero, thus preventing 
resistance to electrical voltage, which allows large amounts of 
electricity to be transmitted over long distances with little 
line loss. Superconductivity, therefore, holds the promise of 
alleviating capacity concerns while moving power reliably and 
efficiently.
    Another critical piece of a resilient and reliable modern 
grid is enhancing the security of our control systems. Our 
visualization and control activity focuses on improving our 
ability to measure and address the vulnerability of control 
systems. The research in this area will allow us to detect 
cyberintrusion, implement protective measures and response 
strategies, and sustain cybersecurity improvements over time.
    Our energy storage and power electronics activity is a mid-
term research endeavor to significantly reduce transmission 
system congestion, manage peak loads, make renewable 
electricity sources more dispatchable, and increase the 
reliability of the overall electric grid. This may be achieved 
through large-scale megawatt level electricity storage systems, 
or multiple, smaller, distributed storage systems. Using our 
understanding from previous energy storage demonstration 
activities, we are researching and developing new, advanced, 
higher energy density materials and storage devices for utility 
scale application. The program also focuses on research in 
power electronics to improve material and device properties 
that are needed for transmission level applications.
    Finally, in fiscal year 2007, the renewable and distributed 
systems integration activity completed the transition away from 
generation technology activities, and will now focus on grid 
integration of distributed and renewable systems in fiscal year 
2008. This is a logical step in advancing clean energy 
resources to address future energy challenges.
    Mr. Chairman, as you know, OE also carries out mission-
critical work within the Operations and Analysis Subprogram. 
These relate principally to the implementation of EPAct 
requirements in energy sector facility security and recovery.
    In his 2007 State of the Union Address, President Bush 
emphasized the importance of continuing to change the way 
America generates electric power, and highlighted the 
significant progress we have already made in integrating clean 
coal technology, solar and wind energy, and clean, safe, 
nuclear energy into the electric transmission system.
    Technologies such as power electronics, high temperature 
superconductivity, and energy storage hold not only the promise 
of lower costs and greater efficiency, but also directly 
enhance the viability of clean energy resources by addressing 
issues such as intermittency, controllability, and 
environmental impact.
    We cannot simply rely on innovative policies and 
infrastructure investment. We must also invest federal dollars 
in the research, development, and deployment of new 
technologies in order to improve grid performance and ensure 
our energy security, economic competitiveness, and 
environmental well-being.
    This concludes my statement, Mr. Chairman. I look forward 
to taking questions.
    [The prepared statement of Mr. Kolevar follows:]

                 Prepared Statement of Kevin M. Kolevar

    Mr. Chairman and Members of the Committee, thank you for this 
opportunity to testify on the President's Fiscal Year (FY) 2008 budget 
request for the Office of Electricity Delivery and Energy Reliability.
    The mission of the Office of Electricity Delivery and Energy 
Reliability (OE) is to lead national efforts to modernize the 
electricity delivery system, enhance the security and reliability of 
America's energy infrastructure, and facilitate recovery from 
disruptions to energy supply. These functions are vital to the 
Department of Energy's (DOE) strategic goal of protecting our national 
and economic security by promoting a diverse supply and delivery of 
reliable, affordable, and environmentally responsible energy.
    The President's FY 2008 budget includes $114.9 million for OE in FY 
2008, which is an eight percent decrease from the FY 2007 request. This 
includes $86.0 million for Research and Development activities, $11.6 
million for Operations and Analysis activities, and $17.4 million for 
Program Direction. As DOE is currently preparing a spending plan in 
accordance with the terms of the 2007 Continuing Resolution, my 
testimony on the FY 2008 budget request reflects a comparison to the 
Administration's FY 2007 request.
    When Thomas Edison opened the Pearl Street Station in lower 
Manhattan on September 4, 1884, he could hardly have foreseen of the 
role electricity would play in the development of American society. 
Although the demand for electric lighting and power initially drove the 
station's construction, electricity ultimately stimulated and enabled 
technological innovations that reshaped America. Today, the 
availability and access to electricity is something that most Americans 
take for granted. Most people cannot describe what it is or where it 
comes from. Yet, it is vital to nearly every aspect of our lives from 
powering our electronics and heating our homes to supporting 
transportation, finance, food and water systems, and national security.
    The Energy Information Administration has estimated that by the 
year 2030, U.S. electricity sales are expected to increase by 43 
percent from their 2005 level. Although this is a positive indicator of 
a growing economy, it is also a significant amount of new demand on an 
electricity infrastructure that is already stressed and aging. With 
this in mind, OE's FY 2008 budget request reflects a commitment to 
implement the directives of the Energy Policy Act of 2005 (EPACT), 
support research of breakthrough technologies, and coordinate federal 
response to temporary disruptions in energy supply to ensure a reliable 
and secure electricity infrastructure for every American in the coming 
decades.
    Meeting our future electricity needs will not be solved by focusing 
only on expanding our generation portfolio or on energy conservation. 
Perhaps the greatest challenge today, as it was in Edison's time, is 
building the elaborate network of wires and other facilities needed to 
deliver energy to consumers reliably and safely.

RESEARCH AND DEVELOPMENT

    The FY 2008 budget request of $86.0 million for the Research and 
Development (R&D) program within OE funds four activities: High 
Temperature Superconductivity; Visualization and Controls; Energy 
Storage and Power Electronics; and Renewable and Distributed Systems 
Integration.
    Over the past eighteen years, DOE has invested more than $500 
million in the science and development of high temperature 
superconductivity. Superconductivity holds the promise of addressing 
capacity concerns by maximizing use of available ``footprint'' and 
limited space, while moving power efficiently and reliably. It also 
supports advanced substation and interconnection designs that allow 
larger amounts of power to be routed between substations, feeders, and 
networks using less space and improving the security and reliability of 
the electric system.
    Today, the High Temperature Superconductivity activity continues to 
support second generation wire development as well as research on 
dielectrics, cryogenics, and cable systems. This activity is being 
refocused to address a near-term critical need within the electric 
system to not only increase current carrying capacity, but also to 
relieve overburdened cables elsewhere in the local grid. The 
superconductivity industry in the United States is now at the critical 
stage of moving from small business development to becoming a part of 
our manufacturing base.
    Enhanced security for control systems is critical to the 
development of a reliable and resilient modern grid. The Visualization 
and Controls Research & Development activity focuses on improving our 
ability to measure and address the vulnerabilities of controls systems, 
detect cyber intrusion, implement protective measures and response 
strategies, and sustain cyber security improvements over time. The FY 
2008 request reflects an increase of $7.75 million related to support 
this effort.
    This activity is also developing the next generation system control 
and data acquisition (SCADA) system that features GPS-synchronized grid 
monitoring, secure data communications, custom visualization and 
operator cueing, and advanced control algorithms. Advanced 
visualization and control systems will allow operators to detect 
disturbances and take corrective action before problems cascade into 
widespread outages. The need to improve electric power control systems 
security is well-recognized by both the private and public sectors.
    The Energy Storage and Power Electronics activity proposes an 
increase of $3.80 million in FY 2008 to: 1) leverage understanding 
gained from previous Energy Storage demonstration activities to 
research and develop new advanced higher energy density materials and 
storage devices for utility scale application; and 2) focus on enhanced 
research in Power Electronics to improve material and device properties 
needed for transmission-level applications.
    Large scale, megawatt-level electricity storage systems, or 
multiple, smaller distributed storage systems, could significantly 
reduce transmission system congestion, manage peak loads, make 
renewable electricity sources more dispatchable, and increase the 
reliability of the overall electric grid.
    The Renewable and Distributed Systems Integration Research & 
Development activity completed the transition away from generation 
technology activities in FY 2007 and will focus on grid integration of 
distributed and renewable systems in FY 2008, which is a logical step 
in advancing clean energy resources to address future challenges.

PERMITTING, SITING, AND ANALYSIS

    In FY 2008, the Department is requesting $5.7 million for the 
Permitting, Siting, and Analysis (PSA) Office within the Operations and 
Analysis subprogram, which implements mandatory requirements set by 
EPACT to modernize the electric grid and enhance reliability of the 
energy infrastructure by contributing to the development and 
implementation of electricity policy at the federal and State level. 
The Permitting Siting and Analysis Office is also tasked with analyzing 
transmission congestion, proposing energy corridors for the Secretary's 
consideration, and coordinating federal agency review of applications 
to site transmission facilities on federal lands.
    The Department published its National Electric Transmission 
Congestion Study on August 8, 2006, in compliance with Section 1221(a) 
of EPACT, which requires DOE to prepare a study of electric 
transmission congestion every three years. The study named more than 
fifteen areas of the Nation with existing or potential transmission 
congestion problems. The study identifies Southern California and the 
East Coast from New York City to Washington, D.C., as ``Critical 
Congestion Areas,'' because transmission congestion in these densely 
populated and economically vital areas is especially significant.
    During the development of the study, which relied on extensive 
consultation with States and other stakeholders, the Department 
provided numerous opportunities for discussion and comment by States, 
regional planning organizations, industry, and the general public. OE 
intends to supplement the tri-annual Congestion Studies study by 
publishing annual progress reports on transmission improvements in the 
congested areas.
    Section 1221(a) also requires the Secretary to issue a report based 
on the August 8 Congestion Study. In this report, if consumers in any 
geographic area are being adversely affected by electric energy 
transmission capacity constraints or congestion, the Secretary may, at 
his discretion, designate such an area as a National Interest Electric 
Transmission Corridor (National Corridor).
    Because of the broad public interest in the implementation of 
Section 1221(a), the Department invited and received over 400 public 
comments on the designation of National Corridors. The Department 
continues to evaluate these comments, and has not yet determined 
whether, and if so, where, it would be appropriate to propose 
designation of National Corridors. Prior to issuing a report that 
designates any National Corridor, the Department will first issue a 
draft designation to allow affected States, regional entities, and the 
general public additional opportunities for review and comment.
    Another major effort involves the implementation of Section 368 of 
EPACT, which requires the designation of energy right-of-way corridors 
on federal lands in the eleven contiguous Western States. An 
interagency team, with DOE as the lead agency, conducted public scoping 
meetings concerning the designation of corridors in each of the eleven 
contiguous Western States. The agencies plan to publish a draft 
Programmatic Environmental Impact Statement for the designation of the 
energy corridors in late spring of 2007 and will solicit public 
comments.
    In August 2006, DOE and eight other federal agencies signed a 
Memorandum of Understanding (MOU) that clarifies the respective roles 
and responsibilities of federal agencies, State and tribal governments, 
and transmission project applicants with respect to making decisions on 
transmission siting authorizations. DOE is preparing to implement its 
responsibilities under the new section 216(h) of the Federal Power Act 
to coordinate with these eight other federal agencies to prepare 
initial calendars, with milestones and deadlines for the federal 
authorizations and related reviews required for the siting of 
transmission facilities. DOE will maintain a public website that will 
contain a complete record of federal authorizations and related 
environmental reviews and will work closely with the lead Federal NEPA 
agency to encourage complete and expedited federal reviews. DOE is 
currently considering the procedures it will use in carrying out this 
program.

INFRASTRUCTURE SECURITY AND ENERGY RESTORATION

    The President has designated the Department of Energy as the Lead 
Sector Specific Agency responsible for facilitating the protection of 
the Nation's critical energy infrastructure. The Infrastructure 
Security and Energy Restoration (ISER) activity of the Operations and 
Analysis subprogram is responsible for coordinating and carrying out 
the Department's obligations to support the Department of Homeland 
Security in this important national initiative. The FY 2008 request is 
for $5.9 million in funding for Infrastructure Security and Energy 
Restoration within the Operations and Analysis subprogram.
    The Infrastructure Security and Energy Restoration activity 
fulfills DOE's responsibilities as defined in Homeland Security 
Presidential Directives 7 and 8 for critical infrastructure 
identification, prioritization, and protection and for national 
preparedness. In times of declared emergencies, this Office also 
coordinates federal efforts under the National Response Plan to assist 
State and local governments and the private sector in the restoration 
of electrical power and other energy-related activities.
    In the event of a large-scale electrical power outage caused by 
natural disasters such as hurricanes, ice storms, or earthquakes, DOE 
personnel will deploy to the affected region to assist in recovery 
efforts. During the 2005 hurricane season, DOE was specifically 
deployed to respond to five hurricanes: Dennis, Katrina, Ophelia, Rita 
and Wilma. In such instances, DOE coordinates all federal efforts to 
assist local authorities and utilities in dealing with both measures to 
restore power and to resolve other issues related to fuel supply.
    The Infrastructure Security and Energy Restoration Office also 
fosters greater awareness of the regional scope of energy inter-
dependencies by working with States to develop energy assurance plans 
that address the potential cascading effects of energy supply problems. 
Exercises are conducted with States and federal partners to help 
sharpen this focus. Finally, staff work with States and DHS in 
emergency situations to help resolve issues brought on by temporary 
energy supply disruptions, such as the winter 2007 propane shortage in 
Maine.

CONCLUSION

    In his 2007 State of the Union address, President Bush emphasized 
the importance of continuing to change the way America generates 
electric power and highlighted significant progress in integrating 
clean coal technology, solar and wind energy, and clean, safe nuclear 
energy into the electric transmission system.
    Technologies such as power electronics, high temperature 
superconductivity, and energy storage hold the promise of lower costs 
and greater efficiency, and also directly enhance the viability of 
clean energy resources by addressing issues such as intermittency, 
controllability, and environmental impact.
    Federal investment in the research, development, and deployment of 
new technology combined with innovative policies and infrastructure 
investment, is essential to improving grid performance and ensuring our 
energy security, economic competitiveness, and environmental well-
being.
    This concludes my statement, Mr. Chairman. I look forward to 
answering any questions you and your colleagues may have.

                     Biography for Kevin M. Kolevar

    In February 2005, Kevin Kolevar was named Director of the Office of 
Electricity Delivery and Energy Reliability at the United States 
Department of Energy. As Director, Mr. Kolevar leads the development 
and implementation of national policy pertaining to electric grid 
reliability; management of research, development, and demonstration 
activities for ``next generation'' electric grid infrastructure 
technologies; and leads federal efforts to help ensure and secure the 
reliable flow of energy.
    Mr. Kolevar is the Department lead for implementation of the 
Electricity Title of the Energy Policy Act of 2005. His 
responsibilities have included analysis of electricity congestion, the 
possible designation of National Interest Electric Transmission 
Corridors, the coordination of energy corridors across federal lands, 
and workforce issues related to the electricity utility industry.
    On behalf of the Secretary of Energy, Mr. Kolevar coordinated 
energy response efforts with the energy industry and other federal 
agencies after Hurricanes Katrina, Rita and Wilma ravaged the Gulf 
Coast. His office also collected, analyzed, and disseminated vital 
information to all involved in the response and restoration efforts and 
served an essential coordinating role for the energy sector.
    Before assuming his current position, Kolevar served as Chief of 
Staff to Deputy Secretary of Energy Kyle McSlarrow from January, 2003 
to January, 2005. In this position, he supported and advised the 
Secretary and Deputy Secretary on policy, regulatory, and legislative 
matters as well as Departmental program management. In addition to 
serving as chief of staff to the Deputy Secretary, Kolevar worked as a 
senior policy advisor to the Secretary of Energy on security and 
technology issues.
    His accomplishments while serving at the Department of Energy 
included chairing the Department of Energy National Security Working 
Group and serving as an advisor to the U.S.-Canada Task Force 
investigating the 2003 blackout. Before joining the Department of 
Energy, Kolevar spent over ten years serving as U.S. Senate staff in 
the offices of Senators Spencer Abraham (R-Mich.) and Connie Mack (R-
Fla.). He is a graduate of the University of Michigan.

    Chairman Lampson. Thank you, Mr. Kolevar. Mr. Shope, five 
minutes.

 STATEMENT OF MR. THOMAS D. SHOPE, PRINCIPAL DEPUTY ASSISTANT 
     SECRETARY FOR FOSSIL ENERGY, U.S. DEPARTMENT OF ENERGY

    Mr. Shope. Thank you, Mr. Chairman. Mr. Chairman, Members 
of the Committee, it is my honor to appear before you today to 
present the Office of Fossil Energy's proposed budget for 
fiscal year 2008.
    Fossil Energy's $863 million budget request for fiscal year 
2008 will allow the Office to support the President's top 
initiatives for energy security, clean air, climate change, and 
coal research, as well as DOE's strategic goal of protecting 
our national and economic security by promoting a diverse 
supply and delivery of reliable, affordable, and 
environmentally sound energy.
    Let me begin the presentation of our budget with coal, our 
most abundant and lowest cost domestic fossil fuel. Coal today 
accounts for nearly one quarter of all of the energy and more 
than half of the electricity produced in the United States. 
Because coal is so important to our energy future, our proposed 
budget of $448 million for the President's Coal Research 
Initiative, related fuel cell R&D, and program direction 
accounts--it accounts for more than half of our total budget.
    Our overarching goal is to conduct research and development 
that will improve the competitiveness of domestic coal in 
future energy markets, allowing the Nation to tap the full 
potential of its abundant fossil energy resources in an 
environmentally sound and affordable manner.
    This year's request completes, three years ahead of 
schedule, the President's commitment to invest $2 billion on 
clean coal research over ten years. Our Coal Research 
Initiative is broken down into the following components. We are 
requesting $73 million for the Clean Coal Power Initiative, a 
cooperative, cost-shared program between the government and 
industry to demonstrate emergent technologies in coal-based 
power generation, so as to help accelerate commercialization. 
Work on promising technologies selected in two prior 
solicitations will continue in fiscal year 2008, and we plan to 
announce a third solicitation during the year.
    The first of a kind, high priority FutureGen project will 
establish the capability and feasibility of co-producing 
electricity and hydrogen from coal with near-zero atmospheric 
emissions, including carbon dioxide. FutureGen's proposed 
budget of $108 million for fiscal year 2008 will be used to 
support detailed plant design and procurement and other 
preliminary work.
    Technology development supporting FutureGen is embodied in 
our Fuels and Power Systems program. The program's proposed 
budget for fiscal year 2008, of $245.6 million, will fund 
research and development for carbon capture and sequestration, 
membrane technologies for oxygen and hydrogen separation, 
advanced combustion turbines, fuel cells, coal-to-hydrogen 
conversion, and gasifier-related technologies.
    The high priority Carbon Sequestration Program, with a 
proposed budget for fiscal year 2008 of $79 million, is 
developing a portfolio of technologies with great potential to 
reduce greenhouse gas emissions. The goal is to achieve 
substantial market penetration after 2012. In the long-term, 
the program is expected to contribute significantly to the 
President's goal of developing technologies to substantially 
reduce greenhouse gas emissions.
    In addition, the network of seven regional carbon 
sequestration partnerships and the International Carbon 
Sequestration Leadership Forum, established by DOE in 2003, 
will continue their important work, including vital, diverse, 
geologic CO2 storage tests.
    Research and development carried out by the Coal-to-
Hydrogen Fuels program, funded at a proposed $10 million, will 
make the future transition to a hydrogen-based economy possible 
by reducing the costs and increasing the efficiency of hydrogen 
production from coal.
    We have requested $62 million for fiscal year 2008 to 
continue the important work of the Solid State Energy 
Conversion Alliance, the goal of which is to develop the 
technology for low-cost scalable and fuel-flexible fuel cell 
systems.
    Consistent with the 2006 and 2007 budget requests, the 
Petroleum Oil Technology and Natural Gas Technologies Research 
and Development programs are proposed to be terminated in 
fiscal year 2008. However, the Office of Fossil Energy will 
continue to carry out important responsibilities in the oil and 
natural gas sector, such as management of the Ultra-Deepwater 
and Unconventional Resources Research Program mandated by the 
Energy Policy Act of 2005.
    In addition, Fossil Energy will continue to authorize 
natural gas imports and exports, collect and report data on 
natural gas trades, operate the Rocky Mountain Oilfield Testing 
Center, and oversee the Loan Guarantee Program for the Alaska 
Natural Gas Pipeline.
    Mr. Chairman and Members of the Subcommittee, this 
completes my prepared statement on our research and development 
activities, and I would be happy to answer any questions.
    [The prepared statement of Mr. Shope follows:]

                 Prepared Statement of Thomas D. Shope

    Mr. Chairman, Members of the Committee, it's a pleasure for me to 
appear before you today to present the Office of Fossil Energy's (FE) 
proposed Budget for Fiscal Year 2008
    Fossil Energy's $863 million budget request for Fiscal Year 2008, 
one of the largest FE requests made by this Administration, will allow 
the Office to achieve two fundamental objectives: first, to support the 
President's top priorities for energy security, clean air, climate 
change and coal research; and second, to support the Department of 
Energy's strategic goal of protecting our national and economic 
security by promoting a diverse supply and delivery of reliable, 
affordable, and environmentally-sound energy.
    More specifically, the proposed budget emphasizes early initiation 
of an expansion of the Strategic Petroleum Reserve; rapid development 
of technologies to manage and dramatically reduce atmospheric emissions 
of the greenhouse gas carbon dioxide from fossil fuel use in power 
generation and other industrial activity; and design and other 
preparatory work on the FutureGen project to combine in one plant the 
production of electric power and hydrogen fuel from coal with near-zero 
atmospheric emissions.

THE PRESIDENT'S COAL RESEARCH INITIATIVE

    I will begin the detailed presentation of our proposed budget with 
coal, our most abundant and lowest cost domestic fossil fuel. Coal 
today accounts for nearly one-quarter of all the energy--and about half 
the electricity--consumed in the United States. Because coal is so 
important to our energy future, our proposed budget of $448 million for 
the President's Coal Research Initiative, related fuel cell R&D and R&D 
by federal employees within program direction accounts for more than 
half our total budget.
    I should mention here that our FY 2008 Budget focuses our research 
and development on activities that support the President's Advanced 
Energy Initiative and key provisions of the Energy Policy Act of 2005. 
These activities will be conducted largely through cost sharing and 
industry collaboration. As a result of the evaluations under the 
Research and Development Investment Criteria, and the Program 
Assessment Rating Tool, activities throughout the program emphasize 
research and development for technologies that will be used in the 
FutureGen project.
    The goal of the overall coal program, which includes the 
President's Coal Research Initiative, is to conduct research and 
development that will improve the competitiveness of domestic coal in 
future energy markets. The Administration strongly supports coal as an 
important component of our energy portfolio. This year's budget request 
completes the President's commitment to invest $2 billion on clean coal 
research over 10 years, three years ahead of schedule. Our coal budget 
request is broken down into the following components.

CLEAN COAL POWER INITIATIVE

    We are requesting $73 million in Fiscal Year 2008 for the Clean 
Coal Power Initiative (CCPI), a cooperative, cost-shared program 
between the Government and industry to demonstrate emerging 
technologies in coal-based power generation so as to help accelerate 
commercialization. CCPI allows the Nation's power generators, equipment 
manufacturers and coal producers to help identify the most critical 
barriers to coal use in the power sector. Technologies to eliminate the 
barriers are then selected with the goal of accelerating development 
and deployment of applications that will economically meet 
environmental standards while increasing plant efficiency and 
reliability. Work on promising technologies selected in two prior 
solicitations will continue in Fiscal Year 2008, and we plan to 
announce a third solicitation during the year, which will focus on 
advanced technology systems that capture carbon dioxide for 
sequestration and beneficial reuse.
    Some activities of the Clean Coal Power Initiative will help drive 
down the costs of Integrated Gasification Combined Cycle (IGCC) systems 
and other technologies for near-zero atmospheric emission plants that 
are essential to the FutureGen concept.

FUTUREGEN

    FutureGen is a high-priority project that will establish the 
capability and feasibility of co-producing electricity and hydrogen 
from coal with near-zero atmospheric emissions including carbon 
dioxide. FutureGen is a public/private partnership designed to 
integrate technologies that ultimately will lead to new classes of 
plants that feature fuel flexibility, multi-product output, electrical 
efficiencies of over 60 percent, and near-zero atmospheric emissions. 
FutureGen's goals include electricity at costs no more than 10 percent 
above power from comparable plants that are incapable of carbon 
sequestration. The capture and permanent storage of atmospheric carbon 
emissions is a key feature of the FutureGen concept, as is the 
capability to use coal, biomass, or petroleum coke. The project should 
help retain the strategic value of coal--the Nation's most abundant and 
lowest cost domestic energy resource. FutureGen's proposed budget of 
$108 million for Fiscal Year 2008 will be used to support detailed 
plant design and procurement, as well as ongoing permitting, 
preliminary design and site characterization work.
    To help fund both the CCPI and FutureGen projects in Fiscal Year 
2008, our proposed Budget redirects $58 million in unexpended sums and 
$257 million in deferred appropriations from the original Clean Coal 
Technology program. Specifically, the Budget proposes to transfer $108 
million of the $257 million deferral to the FutureGen project, and 
cancel the remaining $149 million from the deferral. Of the unobligated 
balances carried forward at the start of FY 2008, $58 million is 
transferred to the Clean Coal Power Initiative (CCPI).

FUELS AND POWER SYSTEMS

    Technology development supporting FutureGen is embodied in the core 
research and development activity of the Fuels and Power Systems 
program. The Fuels and Power Systems program's proposed budget for 
Fiscal Year 2008 is $245.6 million. Of this total amount, $183.6 
million will fund research and development for carbon capture and 
sequestration, membrane technologies for oxygen and hydrogen 
separation, advanced combustion turbines, coal-to-hydrogen conversion, 
and gasifier-related technologies. The remaining balance of $62 million 
will support Fuel Cells.
    The program breaks down as follows:

ADVANCED INTEGRATED GASIFICATION COMBINED CYCLE

    With proposed funding of $50 million for Fiscal Year 2008, the 
Advanced Integrated Gasification Combined Cycle program will continue 
to concentrate efforts on gas stream purification to meet quality 
requirements for use with fuel cells and conversion processes, on 
impurity tolerant hydrogen separation, on elevating process efficiency, 
and on reducing the costs and energy requirements for oxygen production 
through development of advanced technologies such as air separation 
membranes.

ADVANCED TURBINES

    A funding request of $22 million will allow the Advanced Turbines 
program to continue its concentration on the creation of a turbine-
technology base that will permit the design of near-zero atmospheric 
emission IGCC plants and a class of FutureGen-descended plants with 
carbon capture and sequestration. This research emphasizes technology 
for high-efficiency hydrogen and syngas turbines and builds on prior 
successes in the Natural Gas-based Advanced Turbine Systems Program.

ADVANCED RESEARCH

    The Advanced Research program bridges basic and applied research to 
help reduce the costs of advanced coal and power systems while 
improving efficiency and environmental performance. The proposed $22.5 
million budget for Advanced Research will fund projects aimed at a 
greater understanding of the physical, chemical, biological and thermo-
dynamic barriers that currently limit the use of coal and other fossil 
fuels.

CARBON SEQUESTRATION

    The Carbon Sequestration program, with a proposed budget for Fiscal 
Year 2008 of $79 million, is developing a portfolio of technologies 
with great potential to reduce greenhouse gas emissions. This high-
priority program's primary concentration is on dramatically lowering 
the cost and energy requirements of pre-and post-combustion carbon 
dioxide capture. The goal is to have a technology portfolio by 2012 for 
safe, cost-effective and long-term carbon mitigation, management and 
storage, which will lead to substantial market penetration after 2012. 
In the long-term, the program is expected to contribute significantly 
to the President's goal of developing technologies to substantially 
reduce greenhouse gas emissions.
    The Carbon Sequestration program's activities in Fiscal Year 2008 
will concentrate on research and development projects for carbon 
dioxide (CO2) capture and storage, as well as measurement, 
monitoring and verification technologies and processes.
    In coordination with the current partnerships, the program will 
determine the ``highest potential'' opportunities for the initial 
expedited round of large scale sequestration tests in saline, coal, 
and/or oil and gas bearing formations. This work will begin with a 
physical characterization of the surface and subsurface, reservoir 
modeling, and NEPA review.
    The Partnerships will also move on to the next phase of the Weyburn 
project, where CO2 is being injected into a producing oil 
field. Weyburn's success would deliver both decreased carbon emissions 
and increased domestic oil production.
    Finally, DOE formed the international Carbon Sequestration 
Leadership Forum (CSLF) in 2003 to work with foreign partners on joint 
carbon sequestration projects, and to collect and share information. 
That work will in continue in FY 2008.
    Several members of the CSLF have also signed on to the FutureGen 
project, and others have signaled strong interest in joining. FUELS 
Research and development carried out by the Coal-to-Hydrogen Fuels 
program, funded at a proposed $10 million, will make the future 
transition to a hydrogen-based economy possible by reducing the costs 
and increasing the efficiency of hydrogen production from coal. This 
program is an important component of both the President's Hydrogen Fuel 
Initiative and the FutureGen project.

FUEL CELLS

    Within Fuel Cells, we have requested $62 million for Fiscal Year 
2008 to continue the important work of the Solid State Energy 
Conversion Alliance, the goal of which is to develop the technology for 
low-cost, scalable and fuel flexible fuel cell systems that can operate 
in central, coal-based power systems as well as in other electric 
utility (both central and distributed), industrial, and commercial/
residential applications.

RESEARCH BY FEDERAL STAFF

    In addition to the funding levels reflected for Fuels and Power 
Systems, there is $20 million provided within the Program Direction 
account that directly supports the President's Coal Research 
Initiative, plus $1 million for fuel cells. This funding supports 
federal staff directly associated with conducting the research 
activities of specific Fuels and Power Systems subprograms.

PETROLUEM AND NATURAL GAS TECHNOLOGIES

    Consistent with the FY 2006 and FY 2007 Budget Requests, the 
Petroleum--Oil Technology and Natural Gas Technologies research and 
development programs will be terminated in FY 2008.
    The Oil and Gas group will manage the Ultra-Deepwater and 
Unconventional Resources Research Program mandated by the Energy Policy 
Act of 2005. However, I should point out that the 2008 Budget proposes 
to repeal this legislation, consistent with the FY 2007 Budget Request.
    In addition, FE will continue to authorize natural gas imports and 
exports, collect and report data on natural gas trade, and operate the 
Rocky Mountain Oil Field Testing Center.
    FE will also oversee the loan guarantee program for the Alaska 
Natural Gas Pipeline.

STRATEGIC PETROLEUM RESERVE

    The Strategic Petroleum Reserve (SPR) exists to ensure America's 
readiness to respond to severe energy supply disruptions. The Reserve 
reached its highest inventory level--700 million barrels of oil--in 
2005 the Energy Policy Act of 2005 directs DOE to fill the SPR to its 
authorized one billion barrel capacity, as expeditiously as 
practicable. Additionally, in the 2008 Budget, the President proposed 
expanding the Reserve's capacity to 1.5 billion barrels.
    Our budget request of $332 million for Fiscal Year 2008--almost 
double last year's request--will fund the Reserve's continued readiness 
through a comprehensive program of systems maintenance, exercises, and 
tests, as well as beginning expansion to one billion barrels at 
existing and new sites and NEPA work to expand to 1.5 billion barrels. 
DOE will begin immediately to fill the reserve to its current capacity 
of 727 million barrels through purchases of oil with available balances 
as well as through placement of the Department of the Interior's 
royalty in-kind oil into the SPR.

NORTHEAST HOME HEATING OIL RESERVE

    The Northeast Home Heating Oil Reserve was established in July 2000 
when the President directed the Department of Energy to establish a 
reserve capable of assuring home heating oil supplies for the Northeast 
states during times of very low inventories and significant threats to 
immediate supply. The Reserve contains two million barrels of heating 
oil stored at commercial terminals in the Northeast and is in good 
condition. The current five-year storage contracts expire in September 
2007. A request for bids was issued in February 2007. The proposed FY 
2008 budget requests $5.3 million for continued operations.

NAVAL PETROLEUM AND OIL SHALE RESERVE

    The Fiscal Year 2008 budget request of $17.3 million for the Naval 
Petroleum and Oil Shale Reserve (NPOSR) will allow it to continue 
environmental remediation activities and determine the equity 
finalization of Naval Petroleum Reserve 1 (NPR-1); operate NPR-3 until 
its economic limit is reached, and while operating NPR-3, maintain the 
Rocky Mountain Oil Field Test Center.
    Because the NPOSR no longer served the national defense purpose 
envisioned in the early 1900s, the National Defense Authorization Act 
for FY 1996 required the sale of the Government's interest in Naval 
Petroleum Reserve 1 (NPR-1). To comply with this requirement, the Elk 
Hills field in California was sold to Occidental Petroleum Corporation 
in 1998. Subsequently, the Department transferred two of the Naval Oil 
Shale Reserves (NOSR-1 and NOSR-3), both in Colorado, to the Department 
of the Interior's (DOI) Bureau of Land Management. In January 2000, the 
Department returned the NOSR-2 site to the Northern Ute Indian Tribe. 
The Energy Policy Act of 2005 transferred administrative jurisdiction 
and environmental remediation of Naval Petroleum Reserve 2 (NPR-2) in 
California to the Department of the Interior. DOE retains the Naval 
Petroleum Reserve 3 (NPR-3) in Wyoming (Teapot Dome field).

ELK HILLS SCHOOL LANDS FUND

    The National Defense Authorization Act for FY 1996 authorized the 
settlement of longstanding ``school lands'' claims to certain lands by 
the State of California known as the Elk Hills Reserve. The settlement 
agreement between DOE and California, dated October 11, 1996, provides 
for payment, subject to appropriation, of nine percent of the net sales 
proceeds generated from the divestment of the Government's interest in 
the Elk Hills Reserve. Under the terms of the Act, a contingency fund 
containing nine percent of the net proceeds of the sale was established 
in the U.S. Treasury and was reserved for payment to California.
    To date, DOE has paid $300 million to the State of California. The 
first installment payment of the settlement agreement was appropriated 
in FY 1999. While no appropriation was provided in FY 2000, the Act 
provided an advance appropriation of $36 million that became available 
in FY 2001 (second installment). The next four installments of $36 
million were paid at the beginning of FY 2002, FY 2003, FY 2004, and FY 
2005 respectively. A seventh payment of $84 million was made in FY 
2006.
    The Fiscal Year 2008 budget proposes no funding for the Elk Hills 
School Lands Fund. The timing and levels of any future budget requests 
are dependent on the schedule and results of the equity finalization 
process.

FOSSIL ENERGY'S BUDGET MEETS THE NATION'S CRITICAL ENERGY NEEDS

    In conclusion, I'd like to emphasize that the Office of Fossil 
Energy's programs are designed to promote the cost-effective 
development of energy systems and practices that will provide current 
and future generations with energy that is clean, efficient, reasonably 
priced, and reliable. Our focus is on supporting the President's top 
priorities for energy security, clean air, climate change, and coal 
research. By reevaluating, refining and refocusing our programs and 
funding the most cost-effective and beneficial projects, the Fiscal 
Year 2008 budget submission meets the Nation's critical needs for 
energy, environmental and national security.
    Mr. Chairman, and Members of the Committee, this completes my 
prepared statement. I would be happy to answer any questions you may 
have at this time.

                     Biography for Thomas D. Shope

    Thomas D. Shope is Chief of Staff for the U.S. Department of 
Energy, Office of Fossil Energy. The Office of Fossil Energy is charged 
with conducting technology research, development and demonstration 
programs that will ensure that the United States can continue to rely 
on clean, affordable energy from our traditional fuel resources. 
Specific responsibilities within Mr. Shope's purview include the 
management of the Strategic Petroleum Reserve; oil and natural gas 
research and policy; and the President's $2 billion Coal Research 
Initiative, which includes the $950 million FutureGen Program, to 
create a prototype zero-emissions coal fired power plant. In his 
position, Mr. Shope serves as the principal advisor to Assistant 
Secretary Jeffrey D. Jarrett.
    In July of 2002, Shope began his tour of duty in Washington, DC, 
serving as the Chief of Staff for the U.S. Department of the Interior, 
Office of Surface Mining Reclamation and Enforcement. Shope served as 
OSM's liaison to Secretary Gale Norton and her senior staff within the 
Department of the Interior. Mr. Shope guided and directed the 
operations of the OSM in fulfilling its role of regulating active coal 
mining operations as well reclaiming old abandoned mine lands. Mr. 
Shope played a key role in the efforts to reform and reauthorize the 
Abandoned Mine Land program and in OSM's significant enhancement of its 
technology transfer activities to State and tribal regulatory 
authorities and other stakeholders.
    A native of Munhall, Pennsylvania, Shope received his B.S. degree 
in Economics at West Virginia University in Morgantown, WV. He then 
earned his J.D. degree from Duquesne University School of Law in 
Pittsburgh. After working with the Allegheny County District Attorney's 
Office and the Pittsburgh law firm of Friedman & Friedman, Shope joined 
the Department of the Interior in February of 1991 as an Attorney 
Advisor in the Solicitor's Office. During his tenure with the 
Solicitor's Office, Shope's practice centered on various mining and 
environmental issues. Mr. Shope was extensively involved in the 
Department's Trusteeship in Natural Resource Damage Assessment and 
Restoration matters, where he served as the case attorney on various 
prominent projects including the Nation's largest Superfund related 
project, the Tri-State Mining District of Missouri, Kansas and 
Oklahoma. Throughout his career, Shope has been recognized for his 
ability to maintain and promote sensitive relations with Congress, 
State and tribal governments, industry and environmental groups.

                               Discussion

    Chairman Lampson. Thank you, Mr. Shope.
    At this point, we will open our first round of questions, 
and I am going to recognize myself for five minutes, but I will 
yield to the Chairman of the Science Committee, Mr. Gordon.

              The Global Nuclear Energy Partnership (GNEP)

    Chairman Gordon. Thank you, Mr. Chairman. This is a very 
good panel, and this is very informative.
    Dr. Orbach, you are the only member of the panel I have had 
a chance to work with, and I want to say that I am impressed 
with your enthusiasm and knowledge of the job, and I look 
forward to working with you.
    Mr. Spurgeon, I have talked with a variety of folks inside 
and outside the nuclear industry, and by and large, I get the 
feeling--well, I don't get the feeling, they have said very 
specifically that they are not happy with the GNEP program, 
that they feel like you set--well, I won't say you, but that 
there have been moving targets set, that there really hasn't 
been adequate basic research done before the potential to make 
multi-billion dollar type investments, which might mean that we 
won't maximize those investments, and don't feel like there is 
enough emphasis being put on Yucca and storage.
    Do you feel that any of that is valid?
    Mr. Spurgeon. Well, obviously, the emphasis on Yucca, there 
is nothing in this program that does anything to take away from 
the emphasis on Yucca Mountain. Yucca Mountain is critical to 
any regime that we look at for nuclear energy going forward, as 
the ultimate repository for nuclear--spent nuclear fuel.
    But what we are doing with GNEP is creating a waste form, 
and removing the long-lived transuranic elements that create 
the long-term issue of fuel.
    Chairman Gordon. So, you think you have done adequate basic 
research now?
    Mr. Spurgeon. Sir, what--we have more research to do, but 
understand, we have been reprocessing fuel throughout the world 
for, you know, for 30, 40 years. There are active reprocessing 
plants, recycle facilities in existence in all of the other 
fuel cycle nations, so the technology is something that has 
been commercialized. What we are doing is taking it to the next 
level, taking it to the next level of efficiency, and taking it 
to the next level of proliferation resistance. In that, we are 
still doing research, and that is a big part of what the budget 
request is all about.
    Chairman Gordon. Good. I don't mean to be discourteous. 
Five minutes doesn't last very long, and I am going to be 
submitting questions to you and to the other panel members, so 
that we can better understand what you are doing, and better do 
our job, and I hope that you will all be prompt in getting us 
responses.

                     Efficiency Standards Concerns

    Mr. Karsner, in your prepared statement, you acknowledge 
that the backlog of equipment efficiency standards and the test 
procedures that has developed over the last 12 years, with a 
little explanation for why and how this backlog has started, 
and why it has continued. Over the last 12 years, how many 
efficiency standards have been promulgated?
    Mr. Karsner. I can return to you the precise number for the 
record. I think it is under ten over the last 12 years.
    Chairman Gordon. What about one?
    Mr. Karsner. Okay.
    Chairman Gordon. Does that sound about right? The Central 
Air Conditioning and Heat Pumps, maybe one out of sixteen.
    Mr. Karsner. My impression was that there were more than a 
single standard that had been promulgated, but I----
    Chairman Gordon. Do you have staff or anyone here that 
could help you with that?
    Mr. Karsner. We don't have the number for the last 12 
years.
    Chairman Gordon. Okay.
    Mr. Karsner. We will have to report back for the record.
    [The information follows:]
    
    

    Chairman Gordon. Okay. It is my understanding it is one. 
So, how many more does that leave you to have to promulgate?
    Mr. Karsner. We have submitted a schedule to Congress to 
promulgate up to 17 over the next five years, and that should 
deal with both the backlog and the Energy Policy Act 
requirements.
    Chairman Gordon. Now, in that aren't you already well 
overdue?
    Mr. Karsner. There was recently a GAO report published that 
said we were overdue on every one of the standards for the 34 
that had been prescribed for the last 30 years. So the 
Department has acknowledged that particular problem, submitted 
a schedule to deal with that backlog, and since that schedule 
was sent to Congress last year, we have been 100 percent on 
time for every deadline that we have submitted.
    Chairman Gordon. Mr. Karsner, I am sure you already know 
this. You know, even without being sworn in, it is a felony to 
mislead or not tell the truth to a Congressional committee, so 
let me just ask you, have you felt any pressure, in the short 
time you have been there, not to move forward and promulgate 
these rules in an expeditious way?
    Mr. Karsner. I have felt the opposite pressure. It is a top 
line priority of Secretary Bodman, and it is a top line 
priority of my Office, and we will continue that pressure to 
meet those deadlines and----
    Chairman Gordon. Has OMB slowed you down any on this?
    Mr. Karsner. There is a procedure to go through 
concurrence. The process is very time-intensive, and therefore, 
we have recently submitted legislation to the Hill so that we 
could shrink and collapse the critical path, particularly where 
we can cultivate consensus.
    Chairman Gordon. So, you are being told full speed ahead, 
do it as quickly as you can. Is that correct?
    Mr. Karsner. And we are being given the highest priority 
attention that the--that this program can have by both the 
Secretary and the Office of General Counsel.
    Chairman Gordon. Yet in 12 years, you have only promulgated 
one rule, you are behind by statute in all the others.
    Mr. Karsner. Yes.
    Chairman Gordon. And I think the Energy Policy Act directed 
the Department to meet statutory timelines, you are behind in 
those, too, aren't you?
    Mr. Karsner. With all due respect, sir, it is obvious the 
Department is behind, not just 12 years, 30 years. So something 
systemic is problematic through multiple generations and 
Administrations, and we are seeking to fix that.
    Chairman Gordon. Well, we hope you can. It is important for 
the country, and I will also be submitting some questions for 
you.
    How is my time? No, no, no. I don't want to----
    Chairman Lampson. Go ahead and finish, and we will start 
the clock over when I start mine.
    Chairman Gordon. No, that is okay. If I am over my five 
minutes, then I will----
    Chairman Lampson. You are not. Please go ahead.

                       Bioenergy Research Centers

    Chairman Gordon. Okay. Dr. Orbach, I am interested in the 
Bioenergy Research Centers, which I think are important, and I 
am glad you have moved forward with, but it is sort of a new 
area for you. It is going from research to actual 
implementation there.
    And you are talking about bringing in private investors. I 
would like to learn a little more about that. You know, what 
kind of stakes are they going to get in this, what kind of 
return are they going to get for their investment, and if it 
doesn't work out, what is going to happen with these Centers 
afterwards?
    Dr. Orbach. We are currently actually evaluating the 
proposals that have come in, which indeed have included the 
private sector. We have given them a five year commitment for 
$25 million a year, and the understanding that we have is that 
after the five years, we will assess whether they have been 
successful. It is a new concept--you are quite right--for us, 
and so, we are looking both at procedures at effectiveness, and 
whether we can deliver on the investment.
    That is the reason why we want the private sector involved. 
We want this to get to market.
    Chairman Gordon. Well, I think it is a type of experiment 
that we need to be making, and as I said earlier, you seem to 
be on top of your game, and I hope this will be successful.
    Thank you for joining us today.
    Dr. Orbach. Thank you.
    Chairman Lampson. Thank you, Mr. Chairman. At this time, in 
the spirit of fairness, I think I will recognize the Ranking 
Member on the Full Science Committee, Mr. Hall.
    Mr. Hall. Thank you, Mr. Chairman.
    And to Mr. Shope, I don't have my--I can't see that far. I 
wish you would bring that table a little closer to us, if you 
would.
    Mr. Shope, I have some questions that I need to ask you, 
sir. I want to talk to you about--do you know what I am about 
to ask you about?
    Mr. Shope. I am anxiously awaiting.

      The Ultra-Deepwater and Unconventional Onshore Research and 
                          Development Program

    Mr. Hall. The ultra-deep provision that I put in the last 
four budgets, I put it in four times as a Democrat, and 
Republicans accepted it. This last time, I put it in as a 
Republican, and the Democrats accepted it. We have passed it 
and sent it to the President. He signed it, and now, there is a 
move on to take it out of the budget, and to take it out of the 
budget, you have to have a bill go through here, and I love the 
President. I would absolutely jump in the fire for him, but 
every now and then, I don't agree with him, and I think he is 
wrong in trying to move the ultra-deep legislation and take it 
off the books, because it doesn't cost anything, it is going to 
get reserves that are known there. It involves technology from 
schools and universities. It is more of a research bill that it 
is an energy bill, but it pays for itself in known quantities 
of energy that are there. We just can't get them up, but we are 
going to get the technology to get some up. It doesn't cost 
anybody anything. It is not a gift to Exxon or the big people, 
because they are not the ones that really look for it, and they 
can buy their own technology if they want to. Independents 
can't, but independents will do most of this work.
    And it is just a win-win deal, and I have not been able to 
impress anybody over the White House with that situation, but 
everybody else I know pretty well agrees with me.
    Now, I guess what I want to ask you, and I know your budget 
calls for the repeal of the Ultra-Deepwater and Unconventional 
Onshore Research and Development Program, and that is, I think, 
is the President's request, and maybe, the gentleman that he 
got from OMB, that is there advising him. And wonderful guys, 
admire them, respect them both, but--and I don't hate the 
sinners, I just hate their sin on this type thing, that is a 
quote from Billy Graham, it is a pretty good, all old guys are 
good to quote, you know.
    I want to ask you, though, and EI assessment of EPAct 
concluded that this was one of only a few that would increase 
supply and pay for itself through increased royalties. I just 
don't know any way to better, it is going to get over $1 
billion more in 12 years than we have to spend for it, and we 
get maybe 70 years of energy out of it. I cannot understand why 
anybody would want to repeal this.
    They sent it, to of all people, Ed Markey, to repeal it, 
about three months ago or four months ago or five months ago. 
Democrats and Republicans alike gathered together and killed 
that bill, cleared off a place and killed it right there on the 
floor about four months ago. I hope we are going to do the same 
thing this time, and I don't think we will have a lot of 
repercussions from over there, but I just, you know, it pays 
for itself, and until that happens, it is the law of the land, 
and it is to be funded on a yearly basis.
    Can you please tell me what the status of that funding is 
at this time?
    Mr. Shope. Yes, Congressman. And I appreciate and 
understand your comments.
    There is a difference of opinion, however, from the 
Administration, as to whether there are adequate incentives for 
the industry to do this research on its own, and there are 
costs associated, in the sense of foregone revenues, that will 
be going towards the program.
    So, we have submitted legislation to repeal that provision 
of EPAct once again this year. That being said, we fully intend 
to comply with the law as it exists, and that currently 
includes operation of this program. We did issue the contract 
to RPSEA last year in December. We have established the 
advisory committees, the two advisory committees that are 
required. Members are now being appointed to these committees, 
and the program is moving forward with all due diligence and 
full force, until it is repealed by this body.
    Mr. Hall. Please convey to George Herbert Bush's son that I 
am trying to help him, you know, like the little Scout helped 
the lady across the street, but she didn't want to go across 
the street, but I am trying to help him here, and trying to get 
a supply of energy that might keep our children, your kids and 
your grandkids from having to fight a war, because this country 
will fight for energy, and we don't have to. We have it right 
here, if we could just reach out there and get it.
    I want to read, and I am not being a smart-aleck with you 
or anything, but Section 99H. Funding, Oil and Gas Lease 
Income, you are familiar with that section, aren't you? I think 
there are seven places in there where it uses the word, and we 
have put it in here this way, and used the word ``shall,'' not 
``may,'' or direct that we prefer that they do that. It says, 
``and after distribution of any such funds as described in 
subsection (c), $50,000,000 shall be deposited in the Ultra-
Deepwater and Unconventional Natural Gas.'' You know where that 
is.
    Mr. Shope. Yes, sir.
    Mr. Hall. A little bit on down there later, it says ``under 
this part without fiscal year limitation, to remain available 
until expended.'' Even on the next page, it says, in section 
(d) under Allocation, from the federal ``Fund under subsection 
(a)(1) in each fiscal year shall be allocated as follows.'' 
Later, it says ``32.5 percent shall be for activities under 
section 999A.'' A little later, ``7.5 percent shall be for 
activities under section''--it is not ``may'' or precatory 
words, or we hope you will. It says ``shall,'' and I think we 
are going to defeat the bill that he has sent over here. It 
doesn't give me any pleasure to do that. It is painful for me 
to have to try to do that, but I think we are going to be able 
to do it, and maybe we get underway with this, and I would like 
to work with you in working this out, because it might prevent 
a whole generation of youngsters from having to get on a 
troopship and go take some energy away from someone when we 
have got plenty right here at home that is clean.
    Thank you, sir. I respect you and I appreciate it. I yield 
back my time, sir.
    Chairman Lampson. Thank you, Mr. Chairman. I now yield 
myself five minutes, and I want to continue that same line, if 
I may. I don't mean to be piling on either, but RPSEA happens 
to be in my Congressional district, and it is something that is 
important to an awful lot of folks there, and I join Mr. Hall.
    When he first introduced that legislation many years ago, 
and also the work to continue the effort now, because we do 
recognize that it is an important piece of legislation.
    Mr. Hall. I am even glad you are back.
    Chairman Lampson. Thank you very much. I am too.
    And obviously, the President thought that it was important, 
because he did sign it into law, and that is where I wonder 
about the difference of opinion.
    We did receive a letter from the Department and proposed 
legislation last week, asking that this section of the law be 
rescinded, and given the enormous hydrocarbon resources in 
these fields, it is foolish. So, what reasons does the 
Department have for eliminating the Ultra-Deep program, 
especially in light of its elimination of oil and gas research?
    Mr. Shope. Congressman, the Administration believes that 
there are adequate incentives, particularly with the current 
price of oil, for industry to invest in this research and 
development.
    While there certainly is a recognition about independent 
operators, it is always a concern that they don't have the 
ability to spend these types of dollars. The service industry 
that supports them certainly does, and the Administration 
believes that when you have to look at the total availability 
of dollars, as to where our highest priority work needs to be 
done with taxpayer funded dollars, this program, certainly, 
there are other incentives to have that work accomplished, 
aside from using taxpayer dollars to do it.
    Chairman Lampson. So, it is the belief that there is an 
adequate research being done by those companies now. If 
Congress doesn't rescind this law, and I don't expect it is to 
do that, you made the comment, and let me ask again, will the 
Department carry out this research as it is instructed to do so 
by law?
    Mr. Shope. Let me be perfectly clear, Congressman. We 
absolutely will do that. We are currently doing it, as I 
mentioned. We are fully supportive----
    Chairman Lampson. Then can you tell me why OMB is holding 
up the money?
    Mr. Shope. The money? Well, right now, the RPSEA contract 
is--money is starting to flow soon, so we have the plan that is 
in action, RPSEA is preparing the plan for review.
    Chairman Lampson. Is it the Administration's position that 
it is complying with the law, then, fully, right now, the OMB 
has released all the money it is supposed to have?
    Mr. Shope. It has released adequate funds to begin that 
process.
    Chairman Lampson. It hasn't released the funds that the law 
is saying that it should. The Administration proposes to cancel 
out oil and gas research, and apparently, the reasoning that 
this R&D, with the reasoning that it can be done by industry 
alone, yet given the cost of oil and gas research, only the 
biggest oil companies can afford to do this research, and 
deploy the newest technologies in the most technically 
challenging fields, so how can smaller firms leverage federal 
resources for oil and gas research?
    Mr. Shope. Congressman, again, we believe that for 
independent operators, particularly the service industries that 
provide those services to not only the independents but larger 
firms as well, will be able to provide adequate investment, and 
continue research and development.
    Chairman Lampson. Can you elaborate on areas where industry 
maybe isn't currently conducting research, or----
    Mr. Shope. I don't--no particular--no particulars are 
coming to mind right now, Congressman. Of course, we----
    Chairman Lampson. Any real industry effort to explore 
methane hydrates that you are aware of?
    Mr. Shope. There are international efforts that are ongoing 
with respect to methane hydrates. The Department has funded 
some research in the past, and that research will be coming to 
a conclusion, and the information that we will be able to yield 
from that research will further the research and development of 
hydrates.
    Chairman Lampson. I hope that you will convey the emphasis 
that at least Mr. Hall and I have placed on this. We think that 
it is something that is important. I personally am disappointed 
with the manner in which it has been handled at this point, and 
certainly would like to see things change, and change very 
quickly.
    And at this point, I will recognize the Ranking Member, Mr. 
Inglis, for his questions.

                The American Competitiveness Initiative

    Mr. Inglis. Thank you, Mr. Chairman.
    Dr. Orbach, the--as I recall, the Congress made a 
commitment to doubling funding within ten years. Is that right? 
And I am trying to figure out where we are on that schedule.
    Several years ago, and I wonder, and this is a seven 
percent increase, something tells me if it were gradual over 
that time, it would have to be a 10 percent increase in order 
to hit the ten years, but--doubling within ten years. Where are 
we with that commitment?
    Dr. Orbach. The President's commitment to double the 
funding for the physical sciences is on track. The President's 
request for '07 was a 14 percent increase, and then, a 
trajectory out to doubling. And so, the President's request for 
'08 represents that trajectory.
    Mr. Inglis. So, you think we can get there.
    And the Congress made a commitment, too. Not while I was 
here, but----
    Dr. Orbach. There was, to my knowledge, the Congress and 
the President signed an authorization for the National Science 
Foundation----
    Mr. Inglis. Right.
    Dr. Orbach.--to double its budget. The President's 
initiative, the American Competitiveness Initiative, focuses on 
the physical sciences, which includes the National Science 
Foundation, the Office of Science, and also, the core research 
in NIST.
    Mr. Inglis. Right. So, you are content that we are on 
schedule. We are----
    Dr. Orbach. Yes, I am.
    Mr. Inglis. Could always use more, I suppose, but for 
instance--I won't make you answer that.
    But now, let us see, the--now, Mr. Karsner spoke of the 
$1.2 billion, same sort of question. The President's Hydrogen 
Initiative, we are on track there? We are--have we actually 
appropriated all of the $1.2 billion, or where do we stand on 
that?
    Mr. Karsner. This would be the year that we would fulfill 
the $1.2 billion, and we are on track.
    Mr. Inglis. So, the President's budget request would put us 
on track.
    Mr. Karsner. Correct.
    Mr. Inglis. The question is whether we follow through here 
in the House to deliver on that.
    Mr. Karsner. That is correct, sir.
    Mr. Inglis. The $1.2 billion. And of course, here is hoping 
that that is not the end of the initiative, right? We are not 
going to be content at $1.2 billion? In other words, we have 
got to get, we have got to break through, I suppose, as the----
    Mr. Karsner. I wouldn't--it is the end of the initiative, 
the five year, $1.2 billion, but it is clearly not the end of 
the hydrogen program, and its robust future, that we expect it 
to continue growing to meet its technological readiness 
milestones, which are necessary over the next decade.
    Mr. Inglis. Right. Helpful.

                             Nuclear Power

    Mr. Spurgeon, what is--what holds us back from nuclear 
power, really pursuing nuclear power in this country?
    Mr. Spurgeon. Well, I think we are doing it at this point. 
The Energy Policy Act of 2005 was a major breakthrough, 
relative to starting to eliminate some of the barriers that 
have been standing in the way of having new nuclear power.
    There has been an uncertainty of the regulatory process 
heretofore, and when you are talking about major $3 to $4 
billion investments, you have got to have pretty good certainty 
that if you start down this path and try to finance this kind 
of a project, that you are, in fact, going to be able to get a 
license to construct and eventually operate the facility.
    So, the Standby Support Provision in the Energy Policy Act 
is very important in that. That is basically an insurance 
policy that protects the sponsor against regulatory and/or 
litigation delays.
    New reactor types, standardization, is something that we 
have needed in this industry. That is something that we now do 
have, and we are supporting. What the Department is being is 
really a catalyst for leveraging our public money to encourage 
private activity in the nuclear arena. So, we have been 
operating under the 2010 program as a 50/50 cost-share.
    So we are supporting the first plants through the 
regulatory process. We are also supporting the--both from a 
standardization, but from the early site permit standpoint, we 
are trying to get the, some of the environmental issues off the 
table before the major commitments for funds are made.
    And then, finally, the last piece of this puzzle is to 
provide, eventually, nuclear energy is authorized to be part of 
the loan guarantee program that would go forward, which looks 
for ways to then allow plants to be financed, perhaps with a 
greater degree of debt, as opposed to equity, which lowers the 
cost to the consumer substantially, for the cost of bus bar 
electric power.
    So, we have the tools now, and those tools are working. We 
have some 30 new nuclear plants that are in one stage or 
another of consideration, many of them in your region.
    Mr. Inglis. Yes, sir. Yeah.
    Mr. Spurgeon. And we look forward to the first applications 
for a new nuclear plant this fall.
    Mr. Inglis. Okay. Thank you, sir.
    Chairman Lampson. Mr. McNerney. Recognized for five 
minutes.

                             Energy Storage

    Mr. McNerney. Thank you, Mr. Chairman.
    I want to congratulate the board. Your testimony has been 
interesting and informative, and I understand the difficulty of 
producing a budget under these constraints. I have some 
questions though.
    Mr. Kolevar, I heard both you and Dr. Orbach refer to the 
need for energy storage, for superconductors, and for the 
distribution of electric power, but your budget shows an eight 
percent decrease. Now, I clearly understand the need for a good 
distribution system, both in terms of reliability, as we have 
seen in the Northeast a couple of times in the last decade, but 
also in terms of distributing wind energy and solar energy that 
are intermittent sources. So, how can you reconcile a decrease 
in the budget with the increasing need for research and 
development in that area?
    And also, is there any plan for construction of 
distribution systems incorporating this new technology, or is 
this still a paper exercise?
    Mr. Kolevar. Congressman, the decrease in the fiscal year 
2008 budget is reflected in other programmatic activities, 
particularly in the High Temperature Superconductivity program. 
In the Energy Storage program, in that activity within the 
Office, the fiscal year 2008 budget proposes a doubling of 
resources. As I mentioned in the testimony for pursuing both 
large-scale utility size applications and then smaller R&D 
applications that would benefit principally distributed energy 
systems and distributed electrical systems.
    We do see these technologies in use today in limited 
applications. There is a lot more work that needs to be done. 
The Office of Electricity Delivery and the Office of Science 
collaborate on storage activities. Generally speaking, while we 
partner on these, you will see the line drawn with respect to 
the timeframes involved. The work undertaken in Dr. Orbach's 
program is consistent with his program more of a long-term 
focus.
    The work that we have done in the Office of Electricity 
Delivery has been really to demonstrate now the feasibility of 
storage programs, test them into the system, validate their 
capability, continue to support those applications to increase 
the feasibility of these applications. And having pushed a 
couple of these out in demonstration programs over the last two 
years, I expect that the program will spend more time on 
research and development, with an eye toward rolling out some 
newer energy storage systems, such as flow batteries, in the 
next seven to ten years.
    Mr. McNerney. So, is that consistent with the decrease in 
the budget?
    Mr. Kolevar. Well, with respect to energy storage, sir, it 
is consistent with the increase proposed by the President for 
these activities, a little over a doubling of the moneys 
involved.

                       Geothermal Energy Research

    Mr. McNerney. Okay. I am going to move on.
    Mr. Karsner, I am very concerned about the zeroing out of 
the geothermal studies and research. My understanding is that 
there is a report from the MIT that shows up to 25 percent of 
our nation's electrical energy can be produced from geothermal 
sources in the United States, and this would form a baseline, 
as opposed to some other forms of renewable energy.
    So, what is the justification for zeroing out that part, or 
that research area?
    Mr. Karsner. Well, the study that you refer to 
specifically, the Tester study on enhanced geothermal systems, 
obviously wasn't out or taken into account when this budget was 
formulated in excess of 20 months ago, but--so to comment 
further on that, the historic and conventional geothermal 
technology that has been the focus of the program, as a legacy 
of a program, is not applied to the enhanced geothermal systems 
potential identified in that study.
    It really amounts to about 15 gigawatts of energy 
nationwide. That 15 gigawatts is being right now very 
proactively exploited in the marketplace, very profitably by 
participants in the marketplace, largely based on Energy Policy 
Act provisions in policy that induced greater development and 
exploitation of the convention geothermal.
    We will not foreclose on the possibility of emerging 
technologies, and we are reviewing the results of that study, 
to see if it is worthy of integrating into future 
considerations.
    Mr. McNerney. How is my time, Mr. Chairman?
    Chairman Lampson. Thank you very much. Mr. Bartlett from 
Maryland, five minutes.

                  Ethanol Potential and Sustainability

    Mr. Bartlett. Thank you very much. Five minutes, five 
panelists, thank you very much for cooperating with short 
answers.
    I might note, Dr. Orbach, that seven percent exponential 
growth, does double in ten years, so you are on target.
    We are producing enough ethanol to make a minimal 
contribution to reducing our dependence on gasoline, but it has 
had an enormous effect on corn prices. They have doubled from 
$2.11 in September to $4.08 in December. Tortillas are 
increased in price in Mexico, and they aren't able to buy as 
many, and my dairymen are dying because of these high prices.
    Who is looking at the potential in your bioengineering 
research and sustainability? Is that your responsibility or 
somebody else's?
    Dr. Orbach. It is the Department's responsibility, and we--
--
    Mr. Bartlett. I would just encourage you to look at 
potential and sustainability, because you know, the fact that 
you can do it doesn't mean that you are going to have enormous 
amounts of energy in the future. We still have to eat, and you 
know, that is going to compete with the need for these, for 
this energy production.

                         More on Nuclear Power

    Mr. Spurgeon, how many years do we have to operate a 
nuclear power plant to get back the fossil fuel energy it took 
to build it?
    Mr. Spurgeon. I don't have that number----
    Mr. Bartlett. If you don't have that number at your 
fingertips----
    Mr. Spurgeon.--right off the top of my head, but it is not 
that long, sir.
    Mr. Bartlett. Well, could you please get that number for 
the record, please?
    Mr. Spurgeon. I certainly will.
    [The information follows:]
    
    

    Mr. Bartlett. I get wildly divergent numbers as to how long 
that takes, and I would like to have it from the experts, what 
it really is.
    Mr. Spurgeon. Be glad to give it to you, sir.
    Mr. Bartlett. Thank you. Thank you very much.

                           Power Plant Siting

    Are you looking at siting future power plants in populated 
areas, so that we can use the excess heat for district heating 
and with ammonia cycle cooling for refrigeration in the 
summertime, rather than rather stupidly siting them where we 
have to use drinking water and cooling towers to dissipate 
precious energy?
    Mr. Spurgeon. Most of the new plants that are being 
considered today are located, or designed to be located, or 
planned to be located, I should say, at the site of existing 
reactor facilities. Most of our reactor sites were originally 
designed to accommodate more units than currently exist on 
those sites. So, this will be the first steps----
    Mr. Bartlett. I hope that when we are really siting new 
plants, that we look at putting them where people live. By the 
way, if I sleep four feet from the nuclear power plant in one 
of our submarines, I have less radiation than if I am laying 
out on the beach. And we really need to be siting these in 
populated areas, so we can use the district heat. It is really 
pretty dumb to use drinking water, evaporate drinking water to 
dissipate heat that we desperately need in a world that is 
going to be increasingly energy deficient.

                          Energy Conservation

    Mr. Karsner, I had the privilege of leading a nine Member 
delegation to China just over the break at Christmas and New 
Year's. I celebrated New Year's in China. And they began their 
conversation on energy by talking about post-oil. They seem to 
get it. We are having trouble getting it. And they have a five 
point program, the first point of which is conservation. You 
didn't mention that. Is conservation included in your 
efficiency, or who has responsibility for promoting 
conservation in our country?
    Mr. Karsner. Well conservation and efficiency, of course, 
are very closely linked. Conservation, getting less from less, 
efficiency, getting more from less. And but the idea is using 
less in both instances.
    So, we do have a responsibility. Our Office was formerly 
named the Office of Conservation, before it was changed to the 
Office of Efficiency.
    Mr. Bartlett. Good. Well, you know, conservation is two 
people riding in the car. Efficiency is using a Prius rather 
than an SUV. So, they are different, but both of them have the 
same goal, that is, using less energy, and still live 
comfortably.

               Electro-Magnetic Pulse (EMP) Preparedness

    Mr. Kolevar, you are responsible for energy distribution. 
How much energy will you be able to distribute after a robust 
EMP laydown? And I note there was an article just a couple of 
days ago about the threat from China and EMP laydown. Sir, is 
the answer none?
    Mr. Kolevar. The answer would be zero electrical energy.
    Mr. Bartlett. You are correct, sir. And I would submit that 
this ought to be a very high priority. A single weapon that 
made it 300 miles high over the center of our country would 
shut down all electric productivity for the foreseeable future. 
Am I not correct?
    Mr. Kolevar. I do not dispute that. I don't know those 
numbers specifically, but the impact would be dramatic.
    Mr. Bartlett. Yes. Thank you very much.

                         Potential Coal Supply

    Mr. Shope, you mentioned coal. We have 250 years of coal. 
If you just increase, use two percent, which we will have to do 
better than that, that shrinks to 85 years. If you use some of 
that energy to convert the coal into a liquid or a gas, you 
have now shrunk to 50 years, and since energy is now fungible, 
and it moves on a world market, if we share our 50 years of 
coal, just two percent increase with the world, that shrinks it 
to 12.5 years. That is not much, is it?
    Mr. Shope. I am not sure I understand your question, 
Congressman.
    Mr. Bartlett. Well, you know, we brag we have 250 years of 
coal.
    Mr. Shope. Right.
    Mr. Bartlett. So, then, don't worry about energy for the 
future. But if you increase its use only two percent, that 250 
years shrinks to 85 years. And since you can't fill your chunk 
of the car with coal and go down the road, you are going to 
have to convert it to a liquid or a gas. Now--and if you use 
the energy to do that from coal, you are now down to about 50 
years, and since all energy today moves on a global 
marketplace, and we are going to share that 50 years of coal 
with the world, now it shrinks, four into 50, it is 12.5. So, 
now we are down to 12.5 years.
    That doesn't leave me very sanguine that coal is going to 
solve our energy future. Am I wrong?
    Mr. Shope. Well, Congressman, of course, with respect to 
coal, that is one of the main things we are working on, is 
making it more efficient, the use of it more efficient, and 
that is what our program is geared towards, is to get more 
energy out of the coal reserves we have, and we do have ample 
coal supplies in the United States. I think----
    Mr. Bartlett. You think 12.5 years at only two percent 
growth is ample, okay? I am not sure it is ample.
    Thank you very much, Mr. Chairman.
    Chairman Lampson. Okay. Thank you. Thank you, Mr. Bartlett. 
I am apologizing to all of our Members for the timeliness of 
this, because of this joint session that is about to start, we 
are going to try to rush through these as quickly as we can.
    I will call next on Mr. Lipinski.

                   The International Linear Collider

    Mr. Lipinski. Thank you, Mr. Chairman. I would appreciate 
if the panel members could answer some written questions that I 
am going to submit.
    Right now, I just want to raise three issues. The last one 
is the only one I will ask a question on, but I just wanted to 
first say, to Mr. Shope, I am concerned that the $79 million is 
not enough for carbon sequestration, and I just want to raise 
that issue, and follow up with some questions on that.
    Mr. Karsner, I just wanted to mention that Representative 
Inglis and I have reintroduced our H Prize Act this year, to 
authorize the Secretary of Energy to establish monetary prizes 
for technological advancement in hydrogen energy. I think it is 
a smart way to go about doing it. I am happy to see that there 
is a significant increase in hydrogen research also in the 
budget this year.
    But the thing I really wanted to talk about and ask the 
question is to Dr. Orbach. And I want to thank you and the 
Department for advocating for the International Linear 
Collider, specifically housing it there at Fermilab in 
Illinois. I think this can bring great benefits, and it is very 
significant for the United States to be able to house this 
collider in the United States. I have spoken with Congressman 
Hastert on this issue. Fermilab is located in his district. I 
talked to Dr. Oddone, who is the Director at Fermilab. Could 
you elaborate a little bit, briefly, on the progress of 
bringing ILC to Fermilab, and the significance for our country 
of doing that?
    Dr. Orbach. Well, it will be very significant if we can 
bring it here. What we are doing in our '08 budget is doubling 
the amount of funds for R&D for the superconducting cavities 
and the other elements that would go into the International 
Linear Collider. We are in the process of developing an 
international agreement, or an international relationship that 
would enable us to correlate our R&D with the research and 
development in Asia and in Europe, so that we can make it truly 
international.
    We are just beginning to work out the details of that, and 
we hope that that will lead in a few years to the availability 
of the building blocks for the International Linear Collider.
    Mr. Lipinski. Thank you. I will yield back.
    Chairman Lampson. Thank you very much, Mr. Lipinski, and 
now, I will recognize Ms. Biggert, the former Chairman of our 
subcommittee.

          More on the Global Nuclear Energy Partnership (GNEP)

    Ms. Biggert. Thank you, Mr. Chairman. I have got a couple 
questions I hope I can get in.
    Mr. Spurgeon, you know, I have said many times before that 
I support the vision of GNEP, namely, to develop and deploy 
technologies, reduce the volume and toxicity of nuclear waste 
by recycling and maximizing the energy extracted from our 
uranium supplies.
    I am concerned, and I am not convinced that the Department 
is proceeding in a way that really is going to build public or 
Congressional support for this important program, and that 
really does worry me. As you know, I would be a lot more 
comfortable with DOE's plans if the Department had completed a 
comprehensive systems analysis.
    And I know that you mentioned in your testimony that you 
are working on a systems analysis, on a variety of deployments 
systems alternatives. And you are conducting a program 
environmental assessment, I know, because there was one that 
was held in Joliet right near my district.
    So, why can't the DOE conduct a similar programmatic 
systems analysis to help build support for the vision of GNEP, 
and why do you still believe that the commercial scale 
demonstration is the best way to proceed, rather than the 
engineering scale demo, especially since there hasn't been a 
comprehensive systems analysis?
    And I know that, you know, there was a cut in the budget 
last year by the Appropriations Committee, because there hadn't 
been this analysis, and we just have to get going. It really 
concerns me that you say, what, 15 years before we are going to 
be set, and you know, I think this is so crucial to our energy 
demands, and to reduce our dependence on foreign oil.
    Mr. Spurgeon. I agree with you, ma'am. We do need to get 
going, and that is the whole point of the program. We are 
conducting a comprehensive systems analysis. Some of the 
decisions are relative to precise scale, will be an outcome of 
that. We are proceeding with the generic environmental impact 
statement, programmatic environmental impact statement, in 
order to move the process forward, and we are engaging 
industry, because there is a great deal of worldwide expertise 
in this arena.
    So, we are underway with cooperative programs currently, 
with Russia, with France, with Japan, and we intend to exploit 
the worldwide knowledge in this area, in order to leverage our 
own program, to be able to take advantage of the technology 
that does exist, so we don't have to reinvent all of the wheels 
here locally.
    Ms. Biggert. Well, I guess we need that, since we are 25 
years behind.
    Mr. Spurgeon. Yes, sir. Yes, ma'am. We certainly do.
    Ms. Biggert. But you still haven't answered my question, 
about----
    Mr. Spurgeon. In terms of the scale?
    Ms. Biggert. Yes.
    Mr. Spurgeon. We believe that there are many pieces that 
need to be demonstrated yet, and that is what the R&D program 
is all about, associated with this program. There are pieces 
that need to be demonstrated at the prototypic or demonstration 
scale, and that is what we intend with part of this budget. And 
tests that will demonstrate the entire process.
    There are other pieces of the program. Because they are so 
similar to existing facilities, like some that I know you have 
visited, that are ready for commercial scale deployment. Now, 
the precise capacity will be determined as a result of our this 
year's evaluation, and the systems analysis. It can, though, be 
built, these facilities can be built in a modular fashion that 
allows us to get started and expand to commercial scale as we 
go.
    So, that is your--the conclusion is not reached. The intent 
is to move it as fast as we can, consistent with good science.

                         The Rare Isotope Beam

    Ms. Biggert. All right. I just want to thank Dr. Orbach for 
the ACI. I think you and Dr. Bodman have really pursued that, 
and the research and physical sciences, and thank you so much.
    I can't leave this hearing without asking you about RIA or 
RIA-Lite. I know that it is still in the President's budget. If 
you could just tell me the status of that.
    Dr. Orbach. We will be, in fiscal year 2008, having a 
competition for the design of what we now call the Rare Isotope 
Beam, and that design competition will be the same as the 
siting. That is, whoever proposes the best design, that is 
where it will be built.
    We have, in--when you receive the outyear budgets, when 
they go to Congress, you will find PED money in the out years 
for the beginning the process, but the design right now is in a 
competitive situation, and that is what we are pursuing.
    Ms. Biggert. Thank you. I yield back.
    Chairman Lampson. Thank you. Ms. Giffords.

                              Solar Energy

    Ms. Giffords. Thank you, Mr. Chairman.
    Mr. Karsner, briefly. I was pleased to see the President's 
'08 budget when it came to solar. I believe there is about an 
81 percent increase, $148 million. Coming from Arizona, a state 
with an abundance of sunshine, it is certainly very good news.
    I am curious about the President's initiative. I am curious 
if it is on track, the obstacles that possibly you are facing, 
and whether or not by 2015, we are truly going to have 
photovoltaic cells that are competitive with other types of 
power. So, if you could please address that, I would appreciate 
that.
    Mr. Karsner. I believe it is not only on track. I believe 
it holds great potential for getting ahead of that 2015 
timetable, particularly in places with--where we can unlock 
solar resources like Arizona and the Southwest, not just 
through photovoltaics, but you might note that we have also 
increased funding for concentrated solar power, which can 
increase base load generation, and shape the power, in 
collaboration with the expected results from storage capacity 
that we expect from Dr. Orbach's efforts.
    Ms. Giffords. Thank you. I yield back.
    Chairman Lampson. All done? Thank you very much.
    Well, I want to thank everyone, and as we bring this 
meeting to a close, particularly each and every one of our 
witnesses for testifying before the Subcommittee. I think it 
has been a very informational hearing for everyone here, and 
our witnesses have given this committee a better understanding 
of DOE's plans and priorities for the coming year.
    If there is no objection, the record will remain open for 
additional statements from the Members, and for answers to any 
of the follow-up questions that the Committee may ask of the 
witnesses. Without objection, so ordered.
    This hearing is now adjourned.
    [Whereupon, at 11:05 a.m., the Subcommittee was adjourned.]


                               Appendix:

                              ----------                              


                   Answers to Post-Hearing Questions


Responses by Raymond L. Orbach, Under Secretary for Science, U.S. 
        Department of Energy

Questions submitted by Chairman Nick Lampson

Q1.  This Committee is concerned about future of U.S. high energy 
physics and the prospects for siting the International Linear Collider 
on U.S. soil. While it is of paramount importance that the U.S. 
maintain its global leadership in this and many other scientific 
fields, Congress will undoubtedly exercise extreme caution in moving 
forward with the development of facilities that may cost the taxpayers 
billions. We need only look back as far as the Superconducting Super 
Collider to see the pitfalls that must be avoided as the ILC concept 
ripens.

Q1a.  Where does the ILC currently rank in the Department's priorities 
of proposed projects and facilities?

A1a. The Office of Science Facilities for the Future of Science, A 
Twenty Year Outlook report, issued in November 2003, ranked the 
International Linear Collider (ILC) as the top priority in the mid-term 
category.

Q1b.  What is DOE'S timeline for development of the ILC, and how does 
this compare to the timeline laid out by the research community?

A1b. The Department of Energy's Order 413.3A provides a rigorous series 
of milestones, known as Critical Decisions, to provide checks and 
balances and controls for the management of construction projects. The 
Office of Science's success in managing large construction projects 
like the Spallation Neutron Source has stemmed from rigorous observance 
of these milestones, enforced by intensive use of both internal and 
external reviews. The Critical Decisions process is among our key tools 
for determining the readiness of construction projects, correctly 
costing and scheduling the projects, and keeping them on time and 
within budget. The Office of Science takes the requirements of Order 
413.3A very seriously.
    Briefly, the major milestones are as follows: Critical Decision-0--
Approve Mission Need, Critical Decision-1--Approve Alternative 
Selection and Cost Range, Critical Decision-2--Approve Performance 
Baseline, Critical Decision-3--Approve Start of Construction, and 
Critical Decision-4--Approve Start of Operation of Project.
    Every construction project must meet requirements for approval of 
Mission Need, Alternative Selection and Cost Range, and Performance 
Baseline before a start of construction can be approved.
    The ILC has not yet passed the Critical Decision-0 (CD-0) 
milestone--that is, Mission Need for the ILC has not yet been 
established. The Department is at a very early stage in this project 
planning. Several requirements must be met before CD-0/Mission Need can 
be determined. Among them is an assessment of the scientific 
opportunities potentially represented by the ILC. This assessment will 
await analysis of early physics results from the Large Hadron Collider, 
which are now expected about 2010-2011. The technical feasibility of 
core technologies will also have to be demonstrated.
    The Global Design Group (GDE), a self-organized group drawn from 
the international research community for the ILC, issued its Reference 
Design Report in February 2007. This report includes the desired 
scientific scope of the project and a very early stage cost estimate 
using international methodology and assuming that construction would 
occur from 2012 to 2019.
    A decision to go forward with the ILC is not imminent. Even 
assuming an eventual positive decision to build an ILC, its schedule 
will almost certainly be lengthier than the GDE assumptions. Completing 
the R&D and engineering design, negotiating an international structure, 
selecting a site, obtaining firm financial commitments, and building 
the machine could take us well into the mid-2020s, if not later.

Q1c.  What are the current preliminary cost estimates for the ILC?

A1c. We do not yet have a preliminary cost estimate for the ILC that 
has been commissioned, reviewed, and validated by the Department. The 
Global Design Effort (GDE), a self-organized group drawn from the 
international research community for the ILC, issued a ``Reference 
Design Report'' in February 2007. This report includes a very early 
stage cost estimate based on international methodology which is, 
however, very different from that used by DOE in costing projects. For 
example, the GDE estimate does not include cost for detectors at the 
facility, construction escalation or inflation, contingency, 
engineering design, or a number of other costs that DOE incorporates 
into Total Project Cost. While the GDE Report is helpful in providing 
the basic outlines of the scientific scope and initial design 
parameters of the project, it does not provide sufficient information 
on such key elements as proof of core technology to allow a reliable 
cost estimate at this time.

Q1d.  Will the Department take steps to record the history of the 
failed SSC project and develop from that a ``Lessons Learned'' 
document?

A1d. There have been a number of ``lessons learned'' reports on the 
Superconducting Super Collider (SSC) and other large-scale science 
projects. The Office of Science is well aware of the lessons from the 
SSC experience and has identified five areas that need very close 
attention for any such new project. These five areas include: 
establishing a fully international basis for the project from the 
start; securing the broad support of the wider scientific community for 
the project; establishing agreed upon practices for costing, including 
how to handle issues like project changes and escalation; and 
establishing clear and strong management structures with well defined 
reporting lines. The fifth area is close attention to any larger 
national or international events that might impact project costs or 
alliances. These ``lessons learned'' will be carefully applied in 
developing the global ILC R&D effort.

Q1e.  What steps have been taken to educate Congress and the public on 
the relevance of Elementary Particle Physics, and the ILC specifically?

A1e. The call for better public outreach on the goals of particle 
physics in general and the ILC specifically has been clearly made by 
Congress and others. The Department has funded a number of publications 
in this area.
    A notable contribution to informed public discussion is the 2006 
National Research Council (NRC) report Revealing the Hidden Nature of 
Space and Time: Charting the Course for Elementary Particle Physics 
(also sometimes known as the ``EPP 2010 Report''). The report discusses 
the reasons in layman's language for maintaining U.S. leadership in 
elementary particle physics, explains the scientific opportunities 
potentially represented by an ILC, and recommends U.S. investments in 
R&D for the ILC.
    In addition, several initiatives by the elementary particle physics 
community have improved and expanded public communication over the past 
few years.
    Symmetry Magazine (http://www.symmetrymagazine.org/cms/) was 
founded in 2004 and presents a broad, human account of the aspirations 
and achievements of high energy physics.
    The Quantum Universe report (http://www.interactions.org/
quantumuniverse/qu/) is an exciting and readable account of the 
dramatic new questions facing the field. Its sequel, Discovering the 
Quantum Universe (http://www.interactions.org/quantumuniverse/qu2006/), 
lays out the exciting opportunities to be addressed by the ILC and the 
ILC's relationship to the Large Hadron Collider soon to begin at CERN 
in Switzerland. The ILC Reference Design Report recently issued by the 
GDE includes a 30-page illustrated companion document, Gateway to the 
Quantum Universe (http://media.linearcollider.org/
ilc-gatewayquantumuniverse-draft.pdf), that 
explains the potential benefits of the ILC in non-technical language 
and outlines the steps forward to achieve it.
    In recognition of the need to explain the scientific basis for the 
ILC to a wider public, the GDE has set up a network of communicators in 
the U.S., Europe, and Asia. In addition to the Gateway document 
referred to above, they publish a weekly ILC Newsline (http://
www.linearcollider.org/cms/) that features recent news, advances in the 
accelerator R&D, and articles of general interest relating to project 
organization and outreach activities.

Q1f.  What steps have been taken in the development of the ILC plan to 
include the private industries that will ultimately be contracted to 
build and operate the ILC? Are you planning to develop an 
industrialization plan?

A1f. Two years ago, a not-for-profit organization called the Linear 
Collider Forum of America (LCFOA) was formed by representatives from 
small and large U.S. companies. LCFOA provides a formal network for 
committed members to reach out to their counterparts across U.S. 
industry to educate them about the technologies being developed for the 
ILC and the potential opportunities for new business. LCFOA holds two 
to three meetings per year and has recently hosted a symposium and 
reception in the House Science Committee room to provide information 
and initiate a dialogue with Members of Congress and their staff.
    LCFOA is planning a symposium in mid-May that will bring 
representatives of industry, government, and the research community 
together to help identify areas where the accelerator technology can 
provide benefits that seed new industrial activity, research, and 
commercial applications. This symposium is organized around five 
themes: the use of linear accelerators for medicine and industry; 
applications of the superconducting accelerating technology; high power 
radio frequency sources; nanoscale instrumentation; and detector 
technologies with new imaging applications. The LCFOA symposium is part 
of a globally coordinated activity to develop partnerships between 
industry and the research community.

Q1g.  What steps have been or will be taken to assemble a team for a 
U.S. bid to host the ILC?

A1g. The GDE Reference Design Report assessed the viability of sample 
sites in the U.S. (near Fermilab), Japan, and Europe. These sites 
varied in detail, but all were found to be viable and of comparable 
cost to construct.
    The Fermilab site builds upon the extensive infrastructure already 
in place at the existing laboratory. Fermilab is taking the lead in 
developing the expertise necessary to prepare a bid to host the ILC, 
and has established a regional community committee to support the ILC 
planning process and serve as a local outreach group to describe the 
benefits and impacts an ILC could bring.

Q2a.  The Office of Science funds some $800 million a year in grants. 
But it has been said that only one of ten proposals for funding to DOE 
Office of Science get funded. Do you believe this is the right 
proportion? If not, where should that proportion be in the next five 
years?

A2a. The Office of Science grant funding is about $600 million per year 
primarily to colleges and universities. These grants are awarded 
through open competitive solicitations for proposals. A rigorous 
scientific peer review process is the standard practice for the Office 
of Science in order to ensure the highest quality research is funded. 
The standard for funding proposals should be the quality of the 
proposal and not the proportion of proposals funded.
    Thirty-two percent of the more than 1,600 new grant proposals 
received during FY 2005 were funded. Approval rates for grant renewals 
of funding for the second and third years of three-year grants and for 
supplemental awards were significantly higher, at about 90 percent. 
Combined, about half of the proposals received during FY 2005 were 
funded. While funding decisions for about 20 percent of the more than 
1,800 new grant proposals received during FY 2006 are still pending. I 
anticipate that once all grant decisions are made, approval rates for 
proposals received during FY 2006 will be similar to those in FY 2005. 
I believe that this is a healthy, competitive percentage of proposals 
funded.

Q2b.  How do you balance new construction versus upgrading of existing 
facilities and university grant funding?

A2b. To ensure that the most scientifically promising research and 
enabling research tools are supported, each program in the Office of 
Science engages in long-range planning and prioritization; regular, 
external, independent review of the supported research and scientific 
facilities to ensure quality and relevance; and evaluation of program 
performance through establishment of and subsequent measurement against 
goals and objectives.
    These activities rely heavily on input from external sources; 
including workshops and meetings of the scientific community, advice 
from federally chartered advisory committees, intra-DOE and interagency 
working groups, and reports from other groups such as the National 
Academy of Sciences. The reports and advice received often include 
recommendations on new scientific opportunities through research or new 
instruments and on appropriate levels of funding to develop the plans, 
priorities, and strategies for the program and to help maintain an 
appropriate balance among competing program elements, from new 
construction and upgrades of existing facilities to new research 
initiatives and university grant funding.
    Based on these inputs and other factors, including Department 
mission need and Administration priorities, each program is responsible 
for planning and prioritizing all aspects of supported research and 
facilities and for conducting ongoing assessments to ensure a 
comprehensive and balanced portfolio.

Questions submitted by Chairman Bart Gordon

Q1.  The FY08 budget request proposes the development of three Bio-
Energy Research Centers through the Office of Science. Given the Office 
of Science long-standing role supporting basic research and the 
physical sciences, this could be considered a big leap into the realm 
of applied energy technology development. The plan is to run these 
centers like a ``biotech startup'' with substantial private investment. 
Private investors have their own parameters for what they consider to 
be a worthwhile investment that may or may not be compatible with what 
the Department envisions for these programs. The Committee would also 
like to ensure that the centers maintain activities distinct from one 
another, and do not duplicate existing efforts.

Q1a.  Why would private investors be compelled to put their ``skin in 
the game''? What kind of return on investment can investors expect to 
see and in what timeframe? Does this arrangement require negotiating 
unique intellectual property contracts?

A1a. The three Bioenergy Research Centers will support comprehensive, 
multi-disciplinary fundamental research that is expected to provide the 
scientific foundation for development of cost-effective biofuels and 
bioenergy production. The nature of the basic research to be supported 
by these centers is believed to be high-risk to the private sector. Its 
high potential pay-off, however, is expected to attract private 
investors. The solicitation for proposals for the Centers was announced 
in August 2006. Proposals were due February 1, 2007 and are currently 
undergoing peer review. The specific nature of these private 
investments and the timeframe for a return on investment is not 
prescribed in the Funding Opportunity Announcement. The Centers will be 
encouraged to explore collaborative opportunities with private 
investors through the licensing of technology arising at the Centers 
and through entering into a variety of partnering agreements according 
to the contract provisions that will be included in the agreement for 
the operation of the center.

Q1b.  How would the research at these centers differ from what is 
conducted at other labs and within industry? How will these centers be 
distinct from one another?

A1b. These Centers are designed to fill a critical void in the Nation's 
efforts to develop and deploy cost-effective, commercially viable 
methods for producing cellulosic ethanol and other biofuels by focusing 
on basic research. Unlike industry-sponsored research in this area, 
which typically aims at incremental improvements to current 
technologies, the Centers are aimed at fundamental breakthroughs. Many 
experts in this field believe strongly that, absent transformational 
breakthroughs in basic science, it will be extremely difficult, and 
probably impossible, to develop a viable biofuels economy. Present-day 
conversion methods are simply not efficient enough, and incremental 
improvements will not meet the need. Experts largely agree that until 
we can produce ethanol from cellulose, ethanol will not be cost-
effective. But, breaking down cellulose into sugars is a challenging 
problem. At the same time, many scientists believe that the 
biotechnology revolution and today's advanced systems biology at the 
cutting edge hold out the promise of real solutions.
    DOE can provide advanced scientific resources to address the 
biofuels challenge which no other institution, research organization, 
or funding agency, private or public, can match.
    In the Funding Opportunity Announcement the Department did not 
specify any particular technology focus for the Bioenergy Research 
Centers. Rather, we deliberately requested applicants to provide their 
best scientific roadmap. While we did put a certain emphasis on 
cellulosic ethanol (and liquid transformation fuels generally), we 
largely left the research focus open. We are looking to the best 
scientific minds to identify the best approaches and we will not know 
the specific focus and approach of each Center until we have selected 
the three awardees.
    Whatever the outcome of the solicitation, however, there are many 
advantages to deploying multiple Centers. First, the existence of three 
Centers will create competition in the race for real solutions to our 
energy security needs-and experience has shown competition to be an 
enormous incentive for scientific performance and research success. 
Second, multiple Centers will enable us to make maximum use of the 
talent available to address this problem and, third, will enable us to 
explore multiple avenues to a solution at the same time, thereby 
potentially hastening success. And, finally, even as the Centers 
compete, they will also be able to learn from one another, especially 
as we facilitate and review their management with an eye to maximizing 
``best practices.''

Q1c.  What are the long-term prospects for these labs after their 
initial research goals are met, or deemed otherwise unattainable? Will 
they cease to operate or continue indefinitely with DOE funding?

A1c. The FOA offers no DOE commitment beyond the initial five-year 
period and requests that the research program described in the 
application be limited to this period. Applicants were not allowed to 
request construction funds and were instructed to plan for having the 
Center fully operational within one year of the award being made, so 
that completion of specific short-term objectives could be made during 
the five years of the award.

Q1d.  Please provide a breakdown of all the teams submitting proposals 
for the Bioenergy Research Centers and, if possible, the current state 
of bid selection.

A1d. Applications for the Bioenergy Research Centers are currently 
undergoing scientific merit review. DOE does not release information on 
ongoing financial assistance activities, not even the identities of 
applicants. Once selections are made, expected in summer 2007, the 
names of the selected applicants will be announced.

Q2a.  Section 1102 of the Energy Policy Act of 2005 mandates that the 
Department set aside 0.3 percent of funds for research, development, 
demonstration and commercial application for authorized educational 
activities. It was intent of both the House and Senate that this Fund 
be established and the funds in it be expended starting in FY 2006. We 
are now well into FY 2007 and the Department has not dedicated funding, 
has not been able to tell Congress what is spent on research, 
development, demonstration, and commercial applications, or what is 
spent on the allowable science education activities under Section 1102 
and 983 of EPACT. Can we expect these activities to be underway in time 
for teachers to receive training this summer under this program?

A2a. I appreciate your interest and support of the Department's 
contribution to math and science education in the U.S. We intend to 
reach the 0.3 percent funding level for authorized educational 
activities, if in fact we are not already exceeding that amount. We are 
currently in the process of determining the Department's total funding 
for research, development, demonstration, and commercial applications 
activities and also the total amount the Department spends on education 
activities. We will provide those figures to you as soon as they are 
available.

Q2b.  If not, what is preventing this program from moving forward?

A2b. DOE is moving forward on the authorized activities contained in 
Sections 1102 and 983 of the Energy Policy Act that have received 
appropriated funding from Congress. We are in the process of 
establishing a plan for the development of new programs that take 
advantage of the Department's unique capabilities for science education 
through experiential learning opportunities. Once we have an approved 
plan in place for new and enhanced programs as well as peer reviewed 
evaluation of those programs, the Administration will propose an 
appropriate funding level and, if funded by Congress, programs like 
those envisioned in the Energy Policy Act will move forward.

Questions submitted by Representative Ralph M. Hall

Q1.  I understand you are trying to balance funding between facilities 
and core research, can you please explain what you base your funding 
decisions on and what your plan is for the out years?

A1. The Office of Science scientific user facilities and its core 
research programs are inextricably linked. Without balanced investments 
in both facilities and research, we would run the risk of limiting 
scientific productivity, missing windows of opportunity to advance 
areas of scientific research and innovation, and decreasing the Office 
of Science's effectiveness in addressing DOE mission needs. Therefore, 
our spending plan attempts to carefully balance priorities in 
facilities and core research to promote a healthy and productive 
program.
    To help maintain appropriate balance among competing elements of 
program, such as the balance of funding between facilities and core 
research program, each program in the Office of Science engages in long 
range planning and prioritization; regular external independent reviews 
of the supported research to ensure quality and relevance; and 
evaluation of program performance through establishment of and 
subsequent measurement against goals and objectives. These activities 
rely heavily on input from external sources, including workshops and 
meetings of the scientific community, advice from the federally 
chartered advisory committees, intra-DOE and interagency working 
groups, and reports from other groups like the National Academy of 
Sciences. The reports and advice provided often include recommendations 
on appropriate levels of funding to develop research and facility 
plans, priorities, and strategies.
    Each Office of Science program considers these external inputs and 
is responsible for planning and prioritizing all aspects of supported 
research, conducting ongoing assessments to ensure a comprehensive and 
balanced portfolio, supporting the core university and national 
laboratory programs, and maintaining a strong facility infrastructure 
to support its mission.
    The Office of Science will continue to invest in its world-leading 
user facilities, which serve as valuable research tools for U.S. 
science and are critical to the effective accomplishment of our varied 
and complex missions. About 50 percent of the users at our facilities 
come from universities and are funded by the Office of Science or other 
federal agencies. In the out years, with the growth proposed in the 
American Competitiveness Initiative, I expect to make substantial 
progress on many of the new facility and facility upgrade projects 
outlined in ``Facilities for the Future of Science: A Twenty Year 
Outlook,'' with the goals of maintaining at least an order-of-magnitude 
lead in scientific capability over other facilities world-wide, and of 
operating our suite of user facilities at or near optimum levels. At 
the same time, I also plan to grow our core research funding steadily 
at universities and national laboratories and to increase support for 
existing and promising new research in areas important to DOE mission 
needs and identified by advisory groups and workshops like the Basic 
Research Needs workshops which the Office of Science has been 
conducting for the past several years.

Q2.  What is the status of ITER? How long does our funding commitment 
last for, and when are we expecting to see results?

A2. The seven ITER Parties, including the United States, signed the 
ITER Agreement on November 21, 2006. The Agreement provides the legal 
framework for the ITER phases of construction, operation, deactivation, 
and decommissioning. U.S. domestic and international ITER activities 
are well underway to complete the ITER design and prepare for the start 
of construction. The U.S. Contributions to ITER Project, which supports 
the construction phase of ITER, has a nine-year funding profile with a 
cap of $1.122 billion. It is a Major Item of Equipment project that was 
first introduced in the FY 2006 Budget Request to Congress. 
International ITER Project activities in FY 2007 and FY 2008 will 
establish overall design and schedule baselines that may affect the 
U.S. Contributions to ITER Project. DOE expects to establish the cost 
and schedule performance baselines for the U.S. Contributions to ITER 
Project in late FY 2008. The U.S. contributions consist of in-kind 
equipment, personnel who will work in the international ITER 
Organization, and cash for the ITER Organization central fund. The 
preliminary schedule for the U.S. Contributions to ITER Project 
concludes in FY 2014. Afterward, the ITER Organization is scheduled to 
complete assembling and commissioning the ITER facility between 2014 
and 2016. It is anticipated that research operations at ITER will begin 
in about 2017 and extend over a 20-year period. Funding for 
decommissioning would be furnished annually during the 20-year 
operation period. Deactivation would commence around 2037. The funding 
for deactivation would be furnished during a five-year period starting 
when ITER is shutdown around 2037.

Q3.  What do you see as the future of the elementary particle physics 
program in the United States and future of domestic facilities?

A3. Overall, the U.S. will play a leadership role in the physics of the 
Large Hadron Collider when it begins producing data in 2008 and in 
world leading research programs in neutrino physics and dark matter as 
well as a pivotal role in the development of next generation 
accelerators through its strong program of technology R&D for future 
accelerators. This research program will be carried out largely through 
strong collaborations involving both U.S. universities and the DOE 
national laboratories. Office of Science High Energy Physics user 
facilities will be concentrated at Fermilab after the Stanford Linear 
Accelerator Center (SLAC) B-factory completes operations in 2008.
    The current plan is to continue running the Fermilab Tevatron 
through the end of fiscal year 2009. This is based on input from the 
Particle Physics Project Prioritization Panel (P5), a sub-panel of the 
High Energy Physics Advisory Panel, in December 2005. The schedule for 
turning on the Large Hadron Collider (LHC) continues to evolve, and new 
results from the Tevatron are regularly being published. P5 will meet 
this summer to consider whether their recommendation needs to be 
revised on the basis of new information.
    While the Tevatron collider program will be completed by the end of 
the decade, other accelerator-based facilities at Fermilab will 
continue. In particular, the accelerator-based neutrino program, which 
employs Fermilab's powerful proton beam, will continue to be a world-
leading center investigating the science of the neutrino. The flagship 
experiments in this program, MINOS and NOvA, are expected to run well 
into the later part of the next decade.
    As to the longer-term future, although we may eventually be able to 
make a strong scientific case for the ILC, it is premature to make that 
determination at this time. While there has been some progress through 
initial international efforts, much work remains to be done before the 
U.S. is in a position to make informed evaluations and decisions. Even 
assuming a positive decision in the future to build an ILC, its 
schedule and cost will almost certainly exceed the optimistic 
projections. Completing the R&D and engineering design, negotiating an 
international structure, selecting a site, obtaining firm financial 
commitments, and building the machine could take us well into the mid-
2020s, if not later. Within this context, the Department has started to 
re-engage the U.S. particle physics community in a discussion of the 
future of particle physics by asking the question: were the ILC not to 
turn on until the middle or end of the 2020s, what are the right 
investment choices to ensure the vitality and continuity of the field 
during the next two to three decades and to maximize the potential for 
major discovery during this period?
                   Answers to Post-Hearing Questions
Responses by Dennis R. Spurgeon, Assistant Secretary for Nuclear 
        Energy, U.S. Department of Energy

Questions submitted by Chairman Bart Gordon and Subcommittee Chairman 
                    Nick Lampson

Q1.  The Department released the Global Nuclear Energy Partnership 
(GNEP) Strategic Plan this year. However, neither this plan nor the DOE 
Budget Request provides sufficient justification for the significant 
increases in funding requested for GNEP. The plan calls for research 
and development of advanced reprocessing technologies, commercial 
deployment of evolutionary reprocessing technologies, and the 
commercial deployment of a fast reactor. In two years, the Secretary is 
to make a Record of Decision regarding the path forward to the 
commercializing of reprocessing and recycling. This is a pretty short 
period of time.

Q1a.  How does the Department plan to spend a four fold increase in 
funding for GNEP in one year?

A1a. The FY 2008 budget request for the Global Nuclear Energy 
Partnership (GNEP) supports spending primarily in two areas: research 
and development (R&D) involving experimentation and advanced 
computation and simulation ($297 million) and, proposed facility 
definition and conceptual design ($92M).
    The R&D category includes funding for university programs 
supporting GNEP ($48.5M), continued work to improve our knowledge and 
confidence in advanced fuel cycle technology, including spent fuel 
separations, transmutation fuel, systems analysis, advanced computer 
simulation, and nuclear and materials science and engineering.
    The facility funding covers laboratory-led conceptual design 
activities for the Advanced Fuel Cycle Facility, a research facility to 
be located at a DOE site; and industry-assisted studies on both a 
consolidated fuel treatment center and an advanced burner reactor. The 
remaining $6 million of the FY 2008 budget request from the Office of 
Nuclear Energy for GNEP would go to support transmutation education and 
other support activities.

Q1b.  What is the balance in funding between the R&D activities and the 
commercialization activities?

A1b. The Department plans to use $45M of the FY 2008 budget request for 
industry to complete conceptual design studies of facilities suitable 
for commercialization; to document cost, schedule, risk, and needed 
technology; and to develop an economic analysis that shows how costs 
would be shared between government and business. Of the $297 million 
requested in FY 2008 for R&D funding, approximately $133M supports work 
to address scale up and end-to-end testing in order to move from 
laboratory to commercial scale. This includes funding to invest in both 
physical and intellectual infrastructure needed to support initiatives 
for closing the fuel cycle.

Q1c.  In two years, industry can basically perform studies such as 
environmental impacts for siting these facilities, designing these 
facilities, and economic analysis for the facilities; how much are we 
going to spend on studies?

A1c. The Department plans to support multiple industry studies with the 
$45 million of FY 2008 funds, as outlined above. The ongoing siting 
studies for potential locations for GNEP facilities will be completed 
with FY 2007 funds.

Q1d.  GNEP as proposed will spend billions of dollars to develop the 
Advanced Burner Reactor. Do you envision that this reactor would be a 
U.S. export product?

A1d. The advanced burner reactor is planned to be developed to destroy 
transuranics from spent nuclear fuel and simultaneously produce 
electricity. It is important to note that it is the Department's goal 
that, through GNEP, that the majority of Advanced Burner Reactor costs 
would be funded by industry (including development and construction). 
The Advanced Burner Reactor could be produced as a U.S. export product 
to other fuel cycle states.

Q1e.   Could the Advanced Burner Reactor envisioned by GNEP ever be 
converted to a breeder reactor?

A1e. The Advanced Burner Reactor is currently planned to be designed 
and licensed to consume plutonium and other transuranic elements. As 
such, it would not be built to breed plutonium. Changing the internal 
configuration of such a reactor from a burner to a breeder 
configuration would be difficult, although not impossible. Because GNEP 
envisions using this technology only within fuel cycle states where 
similar technology is already in place, proliferation concerns would be 
minimal.

Q2.  Some in the DOE have argued that in order to lead the debate on 
how nuclear technologies are deployed worldwide, the U.S. needs to lead 
in all aspects of the nuclear fuel cycle. This argument has some 
merits, but the rate of deployment of nuclear technologies in the U.S. 
and worldwide needs to be considered. While there is interest on the 
part of the nuclear industry, not one of these utilities has actually 
submitted a license application to the Nuclear Regulatory Commission.

Q2a.  What gives the DOE such confidence that the nuclear industry is 
going proceed with such a rapid deployment of nuclear power plants that 
we need to start commercial reprocessing in the very near future, when 
the industry itself has indicated that a good estimate of the rate of 
deployment of nuclear power plants will not be known until 2020 at the 
earliest?

A2a. Since the signing of the Energy Policy Act of 2005 (EPAct), it is 
our understanding that the NRC has received letters of intent from 15 
companies stating that they plan to submit applications for combined 
construction and operating licenses (COLs) for up to 33 reactors by 
2008. The first COL is expected to be issued by late 2010 and a new 
advanced light water reactor would be operational by the 2015-2016 
timeframe. Based on the success of EPAct incentives in evoking these 
letters of intent and the completion of the final design tasks through 
the Nuclear Power 2010 projects, we believe that the power companies 
will have the confidence they need to begin building the next 
generation of new nuclear plants.

Q2b.  What indication do you have that the U.S. nuclear industry is 
committed to commercial reprocessing?

A2b. Several private sector nuclear industry respondents clearly stated 
that they were interested in participating in the development of 
domestic commercial reprocessing facilities in response to the 
Department's August 2006 Request for Expression of Interest in GNEP 
Facilities.

Q3.  DOE seemingly concluded that fast reactors are the only reactor 
type that can effectively burn nuclear waste. It is not clear that the 
Department has thoroughly examined the capability of other technology 
options such as the high temperature gas cooled reactors.

Q3a.  Can you please be specific as to how much has been spent and any 
documentation that has supported the examination of other waste burning 
technologies such as high temperature gas cooled reactors?

A3a. A wide variety of fuel cycle strategies were investigated as part 
of the Department's Advanced Fuel Cycle Initiative (AFCl) and 
predecessor programs with annual funding of roughly $5 million over the 
time period of 2001-2006. Approximately $3 million in FY 2005 and $2 
million in FY 2006 was devoted specifically to examining the gas cooled 
reactor (GCR) deep burn concept.
    Extensive studies were conducted of the waste management impacts of 
alternative fuel cycle strategies. A key finding of these studies was 
that the transuranic (TRU) elements (primarily Pu, Am, Np, and Cm) 
present in light water reactor (LWR) spent nuclear fuel (SNF) are the 
primary contributors to the waste characteristics that pose the 
greatest disposal challenges (e.g., long-term heat load, peak 
repository dose, and radio toxicity). Thus, a critical goal of the 
Global Nuclear Energy Partnership (GNEP) strategy is to exclude these 
materials from the waste in its final form. In a closed fuel cycle, the 
TRU are separated from the SNF and transmuted into fission products 
with more amenable waste characteristics; this process is commonly 
called `actinide burning'.
    The Department has evaluated the burning potential of existing 
LWRs, advanced LWRs, advanced fast reactors (FRs), accelerator-driven 
systems, and the complete spectrum of Generation-IV reactor concepts 
(including high temperature gas cooled reactors and fast reactor 
alternatives). The key distinguishing feature for burning potential is 
the neutron energy spectrum--thermal or fast.
    Extensive studies of multiple recycles in thermal LWRs were 
conducted in 2001-2005. The general conclusion was that LWRs could be 
utilized for the initial recycle of plutonium, as currently employed in 
France. However, each recycle of the TRU becomes progressively more 
difficult and would be limited by fuel handling issues. A modest heat 
load/radio toxicity benefit was observed for a variety of LWR recycle 
strategies, however, a complementary fast spectrum system would still 
be required to complete the burning mission and yield more significant 
benefits.
    In summary, the burning potential of various reactor systems, 
including high temperature GCRs, has been evaluated. Thermal recycle 
systems could achieve partial burning of recycle TRU, but would require 
a follow-up fast reactor to complete the burning mission. GNEP 
continues to investigate these mixed (thermal/fast) technology options 
as alternate deployment strategies, with concurrent development of a 
sodium-cooled fast reactor technology as the baseline approach.

Q3b.  Which labs have been involved in this work?

A3b. The U.S. laboratories performing the advanced fuel cycle analyses 
include Argonne National Laboratory, Brookhaven National Laboratory, 
Idaho National Laboratory, Lawrence Livermore National Laboratory, Los 
Alamos National Laboratory, Oak Ridge National Laboratory, and Sandia 
National Laboratory.
    The LWR recycle analysis was conducted in collaboration with the 
French CEA Laboratory to assure that the most recent international 
experience with LWR recycle fuels and mixed oxide experience was 
reflected.
    The high temperature gas-cooled thermal reactor fuel cycle analysis 
was conducted by Argonne National Laboratory and Brookhaven National 
Laboratory in close collaboration with General Atomics. The Oak Ridge 
National Laboratory and the Idaho National Laboratory have also been 
involved in the fuels work for this reactor type.

Q3c.  Should more be spent on further work in this regard?

A3c. The FY 2008 budget request for GNEP supports continued 
investigation of mixed (thermal/fast) technology options as alternative 
deployment strategies. The extensive LWR recycle studies previously 
conducted were motivated by the fact that LWRs will continue to 
dominate the U.S. nuclear fleet for the next several decades. Using 
LWRs for a partial burning mission would require the development and 
demonstration of recycle fuels. Furthermore, some modifications to 
conventional LWRs would be required to allow widespread application of 
recycle fuels. If high temperature gas-cooled reactors are deployed 
extensively for either process heat applications or electricity 
production, their suitability for a partial burning mission would also 
be considered.

Q4.  For reasons of balance of trade and U.S. influence on the non-
proliferation front, it is important for there to be a healthy U.S. 
owned nuclear industry. As does DOD, DOE should consider the health of 
the U.S. owned nuclear industry when making procurement decisions. 
There is growing concern about DOE issuing nuclear research and 
development contracts to foreign owned or based nuclear companies that 
in turn receive research and development contracts from their own 
respective governments.

Q4a.  Is reciprocal treatment afforded to U.S. companies?

A4a. Speaking only for the Office of Nuclear Energy (NE), the 
overwhelming majority of DOE's Nuclear Energy Research and Development 
(R&D) funding goes to American laboratories and universities. They are 
free to sub-contract work with foreign entities. NE seeks to ensure 
that research dollars find their way to the people and facilities that 
can best do the work at the lowest cost. This tends to favor domestic 
R&D except in cases where suitable facilities do not exist, such as 
fast reactor test programs, or where a specific expertise or facility 
lies outside the United States. A special situation exists in the 
Generation IV program, where U.S. R&D is augmented by research funded 
by other countries, with all participating countries sharing the 
results of the research.
    Developing recycling facility concepts and designs requires 
expertise and practical experience that is in very short supply in the 
United States, as we have not designed or operated such facilities on a 
commercial scale in decades. In this case, DOE may rely in part upon 
foreign-owned companies that are typically subsidized by their 
governments. Domestic companies may participate in this work and in so 
doing develop more domestic capability.

Q4b.  What is your assessment of the current state of the U.S. owned 
nuclear industry?

A4b. With the lack of nuclear plant orders in the United States since 
1978, there has been a consolidation in the nuclear industry, and many 
nuclear plant component manufacturers, suppliers, and construction 
companies are no longer in that business.
    Although the Nuclear Steam Supply System vendors, Westinghouse and 
General Electric, have continued selling reactors overseas and 
servicing the currently operating reactors worldwide, many U.S. 
companies have not been similarly engaged and have not maintained their 
American Society of Mechanical Engineers N-stamps (quality assurance 
programs) which are needed for manufacturing nuclear plant components. 
A large number of nuclear plant components will have to be procured 
overseas. The prime example of this situation is that U.S. companies no 
longer have the domestic capability to make the large ring forgings 
needed for major nuclear components such as reactor pressure vessels. 
In fact, there is only one company worldwide that can produce these 
forgings, The Japan Steel Works.
    With announcements by 15 power companies of their intentions to 
submit applications to the Nuclear Regulatory Commission for combined 
Construction and Operating Licenses for as many as 33 new nuclear 
reactors, U.S. manufacturers are getting ready to reacquire, or acquire 
for the first time, their N-stamps, but it will take some time before 
the number of domestic companies holding N-stamp certification, in the 
low one-hundreds today, is as high as when our current nuclear plants 
were being built, just below 500.
    As the market for new reactor orders solidifies and these companies 
retool, many of the components of nuclear power plants are expected to 
be built in the United States. Until such manufacturing capacity is 
expanded domestically, however, components for some of the new U.S. 
reactor plants, especially large pressure vessels, steam generators, 
and pumps, will have to be built overseas.

Q4c.  Does NE have any policy of giving U.S. owned companies any 
preference in competition over R&D contracts?

A4c. Much of DOE's research portfolio is aimed at support or 
stimulation of a public interest, as opposed to buying R&D for the 
direct benefit of DOE, and thus is issued as a financial assistance 
instrument and not as a procurement contract. This differentiates DOE 
somewhat from DOD, which does R&D for the creation of weapons systems 
and the like through procurement contracts. More commonly, DOE issues 
contracts for the management and operation of National Laboratories 
that conduct research, or DOE issues financial assistance instruments. 
DOE's National Laboratories are, of course, based in the U.S. and 
conduct virtually all of their operations in the U.S. We discuss the 
statutory policies applicable to financial assistance instruments in 
the next section.

Q4d.  Are there particular laws, regulations or policies that prevent 
DOE from giving preferential treatment to U.S. owned nuclear firms in 
procurements?

A4d. There are no laws, regulations, or policies that explicitly 
prohibit DOE from giving preferential treatment to U.S. firms in 
procurements for nuclear research and development contracts. However, 
the Competition in Contracting Act of 1984 generally requires that 
agencies procure goods and services using full and open competition, 
and restrictions must be justified as necessary to meet the agency's 
needs or as falling within the Act's stated exceptions. With regard to 
nuclear energy, the Energy Research, Development, Demonstration, and 
Commercial Application Act of 2005 (Title IX of the Energy Policy Act 
of 2005) contains two provisions that requires DOE, at the very least, 
to consider foreign participation:

          Section 952(c) of the Act mandates that DOE shall 
        carry out a Nuclear Power 2010 Program. Specifically, Section 
        952(c)(2)(C) further states that the administration of the 
        program shall include ``participation of international 
        collaborators in research, development, and design efforts, as 
        appropriate.''

          Section 953 of the Act, Advanced Fuel Cycle 
        Initiative, mandates the conduct of a program to evaluate 
        proliferation-resistant fuel recycling and transmutation 
        technologies. Section 953(c) specifically provides: ``In 
        carrying out the program, the Secretary is encouraged to seek 
        opportunities to enhance the progress of the program through 
        international cooperation.''

    Notably, Section 2306 of the Energy Policy Act of 1992 (EPAct 92), 
and its implementing regulations at 10 C.F.R. 600.500 et seq., required 
an affirmative finding that a financial assistance award is in the 
economic interest of the United States, and a further finding that the 
foreign country under whose laws the foreign firm is organized affords 
U.S. firms comparable participation and investment opportunities and 
provides adequate protection of U.S. intellectual property rights. 
However, the Energy Policy Act of 2005 (EPAct 05) does not contain any 
similar provision, nor does it prescribe any blanket preference for 
U.S. firms for research and development programs. Current DOE programs 
derive most, if not all, of their direction from EPAct 05. Hence, the 
requirements of Section 2306 of EPAct 92 and its implementing 
regulations are largely inapplicable to ongoing programs.
    In addition, when we issue a research and development financial 
assistance or procurement award, the Bayh-Dole Act 35 U.S.C. 200 et 
seq. requires that small businesses, university, and non-profit 
awardees retain ownership of new inventions subject to a preference in 
any exclusive licensing of companies who agree to substantially 
manufacture in the United States. For awardees not subject to the Bayh-
Dole Act, DOE owns all new inventions unless a waiver is granted. In 
negotiating patent waivers, we seek to have provisions that maximize 
benefit to the U.S. economy such as by seeking U.S. manufacture of any 
commercial exploitation of the new inventions.

Q5.  The relationship between the Next Generation Nuclear Plant (NGNP) 
and GNEP is not clear, making it difficult to discern a comprehensive 
nuclear policy from the department.

        a.  Please outline the relationship between the NGNP project 
        and GNEP?

        b.  Of these which is an industry priority?

        c.  Are you confident that U.S. companies will be willing to 
        assume the cost-share of NGNP?

A5. One of the key objectives of the Global Nuclear Energy Partnership 
(GNEP) is to make nuclear power an attractive alternative to fossil 
fuels for developing countries around the world. Because the power 
generation requirements are limited for these countries, they will 
likely need smaller reactors. A Very High Temperature Reactor (VHTR), 
such as the one being developed under the Next Generation Nuclear Plant 
(NGNP), is a small modular reactor design that could be very well 
suited to meet the objectives of GNEP for global deployment of nuclear 
power to developing countries.
    In the meantime, a continuing priority of the Department is the 
Nuclear Power 2010 program which seeks to bring new nuclear reactors 
online in the very near term. Domestically, NGNP is not currently 
considered a competitive base load electrical power generation 
technology. Therefore, continued research and development is needed 
before it is of greater interest to the nuclear power industry. The 
petro-chemical industry and other energy and product manufacturing 
industries are the most likely to be interested in NGNP as a heat 
source for energy intensive processes. At this time, these industries, 
while expressing interest, have not expressed a willingness to invest 
equally with the government in the licensing and deployment of NGNP. 
They are interested in the government's pursuit of this technology with 
possibly a small percentage cost share. The Department remains 
committed to the timeframe laid out in the Energy Policy Act of 2005 
for development of the NGNP and is seeking to increase industry 
cooperation.

Questions submitted by Representative Ralph M. Hall

Q1.  You point out that 45-50 1,000 megawatt nuclear reactors must be 
built over the next 25 years to maintain nuclear's 20 percent share of 
electricity generation.

Q1a.  Will our current fleet last this long?

A1a. Most of the existing 103 U.S. nuclear plants are expected to 
continue operating for the next 25 years. As of today, forty-eight of 
these nuclear reactors have received license renewals for an additional 
twenty years of operation with another eight currently under review by 
the Nuclear Regulatory Commission (NRC).
    Should the entire fleet of currently operating nuclear plants 
receive only a single twenty-year license renewal, the first retirement 
would be expected in 2029. By 2032, 12 reactors totaling 8,000 
megawatts of capacity will have been retired leaving in place 92 of the 
original 104 reactors with 94,000 megawatts of capacity. The rate of 
reactor retirements then accelerate in subsequent years with half of 
the current nuclear fleet retired by 2040 and only a handful of nuclear 
plants operating in 2050.

Q1b.  Will we have to build 45-50 new plants and, in addition, replace 
our current 103?

A1b. The ``45-50'' gigawatts (GW) range does not include additional new 
plants needed to replace retiring nuclear plants. The 45-50 new plants 
address the increase in electricity demand over the next 25 years 
(through 2032). Additional new plants will be needed to replace the 
current operating plants when they are retired in order to maintain 
nuclear's share of electricity generation.

Q2.  Is the Nuclear Power 2010 program on-schedule? Between this 
program and EPACT, are they sufficient to bring on-line the necessary 
nuclear generation we need?

A2. The Nuclear Power 2010 program is on schedule. This program and the 
incentives from the Energy Policy Act of 2005 will help offset the 
technical and financial risks facing the ``first movers'' in building 
new nuclear power plants, and offer a significant catalyst to get power 
companies to build new nuclear capacity. Over a dozen power companies 
have announced their intentions to apply for combined Construction and 
Operating Licenses (COLs) for over 30 nuclear units. The reactor 
designs chosen, all being greater than 1,000 megawatts, represent as 
much as 46 gigawatts of new capacity.
    While it remains uncertain how many new nuclear plants will be 
built, as new nuclear plants are successfully placed into service on 
schedule and within projected budgets, we can expect more orders to 
follow. However, these new orders are always contingent on market 
conditions including factors such as the rate of growth in electricity 
demand, fossil fuels costs, manufacturing and construction 
infrastructure capability, and relevant environmental regulations.
    Bringing 50-60 reactors on line before 2032 would dictate a pace of 
as many as five per year over a 10-15 year period. Such a pace could be 
challenging, especially if there is a delay in follow-on orders, as 
utilities await successful start-up of the first few reactors and 
expansion of the United States manufacturing and construction 
infrastructure.

Q3.  One of the goals of the Advanced Fuel Cycle Initiative is to 
provide for proliferation-resistant technologies to recover the energy 
content in spent nuclear fuel.

Q3a.  Is this program creating this technology or does it already exist 
and this program is expanding on it?

A3a. The basis for a proliferation-resistant fuel cycle are the 
separations processes for light water reactor spent nuclear fuel that 
do not isolate pure plutonium; fabrication of fuels and targets from 
the separated actinides for fast reactor transmutation; and recycle of 
spent fast reactor fuel, again without separating pure plutonium.
    The technologies described above for a proliferation-resistant fuel 
cycle have been demonstrated only in small-scale tests conducted at the 
national laboratories, but the results are encouraging. AFCI is not 
limiting the technology to domestic use; if applied world-wide, 
international proliferation risks would be greatly reduced.

Q3b.  Is the 80 percent reduction in the volume of waste an accurate 
estimate?

A3b. The 80 percent reduction in waste volume resulting from 
application of the advanced fuel cycle technologies under development 
in AFCI/GNEP is a reasonable estimate based on current knowledge and 
experience, as well as numerous assumptions regarding the nature of the 
wastes and the waste management processes used.

Q3c.  Would this waste require the same conditions for burial at Yucca 
as the waste that is currently slotted to go there?

A3c. Assuming deployment of GNEP technologies and facilities as 
currently envisioned, it is expected that the volume, heat load and 
radio-toxicity of waste to be disposed in a geologic repository will be 
reduced. The conditions for disposal of this waste have not yet been 
analyzed in detail, although it is possible the waste packages could be 
smaller and, because of reduced heat content, more densely 
concentrated.

Question submitted by Representative Daniel Lipinski

Q1.  Argonne National Laboratory in Illinois receives a significant 
portion of the funds for GNEP. Can you elaborate on the Department's 
plan to utilize the research at Argonne Lab to support GNEP as it moves 
forward?

A1. From its earliest beginning with the first nuclear pile at Stagg 
Field at the University of Chicago in 1942, the history of the U.S. 
civilian nuclear power program has been supported and driven by the 
technical expertise at the Argonne National Laboratory (ANL) and its 
associated facilities. The ANL expertise has been involved in virtually 
all U.S. reactor concepts built, or envisioned, up to this time. In 
particular, ANL is currently supporting the Global Nuclear Energy 
Partnership's (GNEP) advanced spent fuel reprocessing and reactor 
design projects. ANL currently receives about ten percent of the GNEP 
funds in FY 2007 to support these important areas. In addition, ANL is 
home to the Advance Fuel Cycle Initiatives' national technical director 
for separations and the campaign manager for advanced waste forms and 
waste management. ANL's participation and contribution to the GNEP 
effort is planned to evolve as the GNEP program is implemented.
                   Answers to Post-Hearing Questions
Responses by Alexander Karsner, Assistant Secretary for Energy 
        Efficiency and Renewable Energy, U.S. Department of Energy

Questions submitted by Subcommittee Chairman Nick Lampson

Q1.  Administration support for renewable electricity technologies, 
such as solar PV and wind, is much appreciated as concerns about 
foreign energy dependence and climate change continue to increase. 
However, there is concern that the administration seems to be picking 
winners, rather than providing broad-based support across the entire 
spectrum of renewables technologies.

     Section 931 of EPACT 2005 specifically directs DOE to conduct a 
program of research, development, demonstration, and commercial 
application for geothermal energy.

     Why don't the Department's FY07 and FY08 budget requests reflect 
the directions given in EPAct for geothermal energy?

A1. Since the 1970s, the Department of Energy has conducted a research 
and development program in geothermal technology valued in excess of 
$1.3 billion. That investment has helped to produce the strong market 
for geothermal energy we see today. Projects under construction, or 
which have both Power Purchase Agreements and are undergoing production 
drilling, amount to 489 megawatts in eight western states. Also, the 
industry now benefits from provisions in EPACT providing tax credits 
and a streamlined leasing process.

Q2.  The Department's 2003 Strategic plan included geothermal energy 
research as part of its efforts to ``improve energy security by 
developing technologies that foster a diverse supply of reliable, 
affordable, and environmentally sound energy. . .'' Geothermal power 
was part of DOE's ``long-term vision of a zero-emission future in which 
the nation does not rely on imported energy.'' But more recently, the 
Department of Energy seems to not agree with this assessment.

Q2a.  What has happened in the past three years to apparently change 
the Department's views of the geothermal resource base and its 
potential?

A2a. In recent years, the Department's Geothermal Program has achieved 
key research objectives for conventional hydrothermal technology 
development. Geothermal power production from high-temperature, shallow 
resources is now a relatively mature energy technology. Projects under 
construction, or which have both Power Purchase Agreements and are 
undergoing production drilling, amount to 489 megawatts (mw) in eight 
western states. Additionally, the Western Governors Association 
geothermal task force recently identified over 100 sites with an 
estimated 13,000 MW of near-term power development potential.

Q2b.  The Department indicated in 2003 that there were many 
technological challenges to achieving production from the vast 
geothermal resource base. Does the Department now consider these 
challenges are solved [sic], have new information that indicates its 
prior assessments of geothermal resources are incorrect [sic], or has 
the Department concluded that federal efforts and technology 
development cannot overcome them?

A2b. Our geothermal program has achieved its key research objectives 
for conventional hydrothermal technology, and has provided substantial 
incentives that support the near-term development of the technology and 
deployment of the large geothermal resource base.
    The Department believes that recent substantial incentives, many 
authorized by the Energy Policy Act of 2005 (EPACT), will do more to 
support development of the conventional hydrothermal resources than 
technology development efforts. For example, geothermal now has both an 
investment tax credit and a production tax credit that will improve the 
technology's competitive position. (Qualifying facilities can claim one 
or the other, but not both.) EPACT also contains provisions that 
streamline and accelerate the geothermal leasing process.

Q3.  The recent MIT report, ``The Future of Geothermal Energy'' has 
generated significant interest in the potential for Enhanced Geothermal 
Systems. During the DOE budget hearing on March 7, 2007, you mentioned 
that DOE had not had the benefit of the MIT report in formulating the 
FY08 budget request.

Q3a.  Having now had the opportunity to review the MIT report, does it 
in any way change DOE's assessment of the potential benefits to be 
gained from geothermal R&D?

A3a. The MIT report, titled, ``The Future of Geothermal Energy,'' 
specifically points to the potential benefits of Enhanced Geothermal 
Systems (EGS) as a long-term energy option for the Nation and it is a 
significant and important academic contribution. On June 7&8, EERE 
conducted a workshop with industry, also entitled ``The Future of 
Geothermal Energy,'' to consider the findings of the report and hear 
from stakeholders on research & development trends in the industry.

Q3b.  How does DOE view the potential of geothermal resources, 
especially EGS resources now? Does DOE believe EGS merits the R&D 
funding support recommended by the MIT report?

A3b. The Department is using some of the FY 2007 geothermal funding to 
conduct a technology assessment of EGS to help industry prioritize its 
technology needs.

Q4.  Congress recognized the need for R&D and deployment of new 
advanced hydropower technologies, when in Section 931 of EPAct 2005, it 
directed [sic] Secretary to conduct a program of research, development, 
demonstration and commercial application for Advanced hydropower 
technologies to enhance environmental performance and yield greater 
energy efficiencies.

Q4a.  Why don't the Department's FY07 and FY08 budget requests reflect 
the directions given in EPAct for hydropower?

A4a. The hydropower industry has demonstrated the ability to achieve 
efficiency optimization, and fish survivability performance targets 
without further DOE direct investment. In the fiscal year 2006 
Appropriations Conference Report, the conferees recommended $495,000 
for hydropower research and directed the Department to ``complete 
integration studies and close out outstanding contracts in advanced 
hydropower technology.''

Q4b.  At a time when the U.S. is looking to maximize all of its 
renewable resources because of the growing effect of climate change, 
why has the Department terminated the hydropower R&D program?

A4b. The Department terminated its hydropower program in fiscal year 
2005, consistent with congressional direction over the previous years. 
The Department completed an assessment of undeveloped U.S. hydropower 
resources, the technologies needed to develop the resources, and the 
feasibility of developing the resources, and determined that the 
Department had contributed the necessary tools to industry to pursue 
development of these hydropower resources.

Q5.  Preliminary assessments indicated that the ocean off U.S. 
coastlines represents a vast potential source of clean, renewable 
energy.

Q5a.  Historically, what R&D activities, if any, has DOE conducted in 
the area of ocean power (including wave, tidal, current, and ocean 
thermal technologies)?

A5a. The Department had a program that ended in 1994, that evaluated 
Ocean Thermal Energy which did not indicate commercial viability. DOE 
is currently supporting a small project on wave energy technology R&D 
with one company and has previously supported projects for ocean 
current and tidal technologies via the Small Business Innovation 
Research Program.

Q5b.  Given the early developmental stage of many of the technologies 
to tap the ocean as an energy resource, why has DOE declined to request 
RD&D funding to advance these technologies?

A5b. The Department is monitoring domestic and worldwide progress in 
ocean energy technologies in collaboration with the Electric Power 
Research Institute and the International Energy Agency. Some countries 
with higher resource potential than the United States, relative to 
their overall energy needs, are active in ocean energy R&D. Ocean wave 
and current technologies are still in their infancy stage, with a small 
number of demonstration systems operating worldwide. The Department 
will continue to consider emerging technologies like ocean energy in 
evaluating its R&D programs based on assessment of national potential 
of these energy resources, results of R&D, expected technology 
progress, and the potential benefit from competing investments.

Questions submitted by Chairman Bart Gordon

Q1.  There is enormous potential in deploying energy efficient 
technologies throughout industry, low-income households and the Federal 
Government itself. Yet programs designed to do exactly that (i.e., 
Federal Energy Management Program, Weatherization programs, Industrial 
Technologies) are being cut back.

     Why is there an apparent lack of recognition by DOE of the need 
for greater emphasis on improving energy efficiency?

A1. The Department considers energy efficiency as a critical component 
of our balanced portfolio. The Office of Energy Efficiency and 
Renewable Energy (EERE) programs related to energy efficiency comprise 
approximately 46 percent of the total EERE proposed FY 2008 budget 
(including program direction and support funds).
    The Department is pursuing multiple programs to improve energy 
efficiency. Our Federal Energy Management Program is actively promoting 
the use of Energy Savings Performance Contracting (ESPC) across all 
federal agencies--awards have increased from $36 million in 2004, to 
$124 million in 2005, to a record $321 million in 2006. The Department 
provides education and outreach on nation-wide utility incentive 
policies; best practices on demand-side management programs; and is 
integrating energy efficiency into utility, State, and regional 
resource planning activities. To assist market adoption of efficiency 
measures, our Industrial program is pursuing a number of voluntary 
energy savings programs. Our ``Save Energy Now'' program sends energy 
experts to the nation's most energy-intensive manufacturing facilities 
to conduct assessments on how these businesses can save energy.
    The Department is providing funding, tools, and technical 
assistance to support voluntary energy savings programs on the local 
level through efforts such as Rebuild America and the State Energy 
Program. Through these programs, many states retrofit and update 
existing local government buildings, offices, and schools and also 
inform the public about the importance of energy conservation. In 
addition, our Building Technologies Program is implementing an 
integrated and aggressive plan to achieve cost-neutral Zero Energy 
Homes by 2020, and commercial buildings by 2025. In addition, the 
Department helps accelerate the adoption of efficient building 
technologies and products in the market through the EnergyStar rating 
system.

Q2.  The Department's abysmal record on promulgating appliance 
efficiency standards is now well known by Congress, consumers, 
industry, and even appliance manufacturers. It has come to the 
Committee's attention that even those standards that DOE has 
promulgated thus far are considered even by some industry 
representatives to be ineffective in saving energy and reducing 
consumer's electricity costs. Though the exact reasons for the delays 
and the promulgation of weak standards are not at all clear, the 
Committee appreciates that some attention is now being paid toward 
rectifying the situation at the Department.

Q2a.   Please list all appliances for which DOE is required to 
promulgate standards.

A2a. Statutory requirements to promulgate standards cover the following 
categories of appliances. Note that some of the appliance rule-makings 
may be bundled together for efficiency, so the number of final rule-
makings may be lower. The Department is on schedule to complete 23 of 
the standards by June 2011 and one additional by 2015 (automatic ice 
makers).




    Determinations are underway in the following categories:

          Battery Chargers and External Power Supplies 
        (Determination Analysis)

          High Intensity Discharge Lamps (Determination 
        Analysis)

Q2b.  To date, how many standards have been promulgated since the 
Administration took office in January 2001?

A2b. No efficiency standards final rules have been promulgated since 
2001. In the 18 years prior to the January 31, 2006 report to Congress, 
the Department issued 12 standards for products other than those 
directed in statute. Congress has set standards in legislation as 
recently as the EPACT05 standards for 15 additional products.

Q2c.  Of those standards that have been set or proposed by DOE, please 
specify when the standards take effect, how the new standards improve 
on existing standards, and the projections for energy and cost savings.

A2c. The proposed rule for Distribution Transformers was issued on 
August 4, 2006. The proposed standards would take effect in 2010, 
approximately three years after the planned issuance of the final rule. 
The Department's proposed level for liquid-immersed and medium dry 
voltage distribution transformers would save 2.4 Quads of cumulative 
energy over 29 years (2010-2038). In addition, the cumulative national 
net present value of total consumer costs and savings from 2010-2038 
ranges from $2.52 billion to $9.43 billion, depending on discount 
rates. The proposed rule would improve on existing standards for 
transformers.
    The proposed rule for Residential Furnaces and Boilers was issued 
on October 6, 2006 with a standard effective date of 2015.
    The Department's proposed standard level for residential furnaces 
and boilers would save 0.41 Quads of cumulative energy over 24 years 
(2015-2038). In addition, the cumulative national net present value of 
total consumer costs and savings from 2015-2038 ranges from $650 
million to $2.48 billion. The proposed rule also provided an initial 
roadmap for states to petition the Department for exemption from 
preemption of the federal standards. The Department recognizes the 
potential for additional energy savings that may be achieved under 
appropriately exempted state standards.

Q2d.  Please provide the same data for alternate proposals that were 
rejected by DOE.

A2d. First to be clear, the Department has not yet issued a final rule 
for furnaces and boilers or distribution transformers. We are still in 
the process of analyzing the proposed rules in light of comments 
received. In the notices of proposed rule-making, the Department 
considered several factors for economic justification, including safety 
and regional financial impacts. The highest standard level for 
Distribution Transformers evaluated is estimated to save 9.8 quads of 
energy but is estimated to impose a net cost on consumers of $9.4 
billion to $14.1 billion (2004$) in present value terms at three 
percent and seven percent discount rates, respectively. The lowest 
standard level considered is estimated to save 1.8 quads and would save 
consumers between $2.2 billion and $7.4 billion (2004$) in present 
value terms at three percent and seven percent discount rates, 
respectively.

Q2e.  Please provide details on the perceived limit in statutory 
authority to develop stricter standards that would ultimately save 
consumers billions?

A2e. The Energy Policy and Conservation Act directs the Department to 
establish and amend energy conservation standards such that they 
achieve the maximum improvement in energy efficiency that is 
technologically feasible and economically justified. Generally, to 
determine whether a standard is economically justified, Congress 
directs that the Department determine that the benefits of any proposed 
standard exceed its burdens to the greatest extent practicable. Under 
the statute, the Department cannot propose stricter standards if in so 
doing burdens exceed consumer benefits.

Q2f.  What is the process for setting these standards, which federal 
agencies or entities are involved in this process, and who makes the 
final decision on setting a standard?

A2f. As prescribed by the Energy Policy Conservation Act (EPCA), energy 
efficiency standards generally are established by a three-phase public 
process: advance notice of proposed rule-making (ANOPR), notice of 
proposed rule-making (NOPR), and final rule. DOE seeks public comment 
during both the ANOPR and NOPR phases of the rule-making process. The 
last step in the rule-making process is the publication of a final rule 
in the Federal Register. The final rule promulgates standard levels 
based on all of the analyses and explains the basis for the selection 
of those standards. It is accompanied by the final Technical Support 
Document.
    In each rule-making, DOE must comply with all applicable laws, 
regulations, and executive orders. In addition to the statutory 
criteria that must be considered in these rule-makings, the Department 
also analyzes and responds to public comment. Additionally, the 
Department conducts reviews for the following 13 requirements:

         1.  Executive Order (E.O.) 12866, ``Regulatory Planning and 
        Review''

         2.  Regulatory Flexibility Act

         3.  Paperwork Reduction Act of 1995

         4.  National Environmental Policy Act of 1969

         5.  E.O. 13132, ``Federalism''

         6.  E.O. 12988, ``Civil Justice Reform''

         7.  Unfunded Mandates Reform Act of 1995

         8.  Treasury and General Government Appropriations Act of 1999

         9.  E.O. 12630, ``Governmental Actions and Interference with 
        Constitutionally Protected Property Rights''

        10.  Treasury and General Government Appropriations Act, 2001

        11.  E.O. 13211, ``Actions Concerning Regulations That 
        Significantly Affect Energy Supply, Distribution, or Use''

        12.  Section 32 of the Federal Energy Administration Act of 
        1974

        13.  Congressional Notification

    The Secretary of Energy makes the final decisions regarding all the 
Department's rule-makings.

Questions submitted by Representative Ralph M. Hall

Q1.  You talk about the technical feasibility for wind energy to 
generate 20 percent of our nation's electricity and to produce more 
than 300 gigawatts of production capacity to our urban load centers.

Q1a.  What is the time-frame for this goal?

A1a. The time-frame for achievement of twenty percent production by 
wind will be determined by the private sector in response to market 
signals.

Q1b.  I have noticed that the President's budget did not include an 
extension of the production tax credit. Do you see this as an 
impediment to reaching 20 percent and 300 gigawatts?

A1b. Reaching the technical feasibility point of twenty percent 
generation by wind will ultimately be determined by the private sector 
in response to market forces. The Department works collaboratively with 
the Department of Treasury (which has jurisdiction on these issues) on 
tax policy issues.

Q2.  In the FreedomCAR and Fuel Partnership, you say the technologies 
that result from it could lead to substantial oil savings if adopted by 
industry participants. Is there a plan in place to encourage adoption?

A2. The Partnership focuses on the high-risk research needed to develop 
the necessary technologies, which helps reduce costs and address 
barriers. However, commercialization is ultimately industry's decision. 
In addition, the program's university-oriented activities create 
graduate education opportunities working with new technologies and 
encourage undergraduate engineering students to gain experience with 
hybrid systems technology and advanced combustion engines. This 
training and experience can help ensure the work force has the 
necessary expertise to help industry such technologies to industry.

Q3.  You mention in your testimony that R&D on combustion engine 
efficiency will allow ``a car that previously got the CAFE average of 
27 miles per gallon on gasoline could potentially get 37 miles per 
gallon with an advanced, clean diesel.''

Q3a.  Please explain what you mean by this.

A3a. Advanced diesel engines can provide a 25-40 percent improvement in 
fuel economy relative to the average conventional gasoline engine of 
today, based on the vehicle type and application. As part of a DOE 
diesel engine development project for a light truck/SUV application, a 
fuel economy improvement of over 45 percent was demonstrated. 
Hybridization of gasoline passenger vehicles potentially show similar 
range increases in efficiency improvements. The mile per gallon figure 
stated above is an estimate and will vary depending on vehicle type and 
duty cycle.

Q3b.  Is R&D being conducted on gasoline engines?

A3b. Yes, R&D is being conducted on gasoline engines with the goal of 
improving their efficiency by 10 to 20 percent. Such R&D focuses on 
improving the combustion process for higher efficiency, developing 
catalysts to reduce emissions from lean-burn gasoline engines for 
passenger vehicle application, and enabling more efficient use of 
ethanol.

Q4a.  What biomass conversion technologies are available today for the 
production of cellulosic ethanol?

A4a. The conversion technologies that are available today can be 
categorized into two major types of processes, which each involve 
several types of feedstocks:

        1.  Biochemical conversion processes combine chemical 
        pretreatments, enzymatic hydrolysis and fermentation to convert 
        sugar from cellulosic feedstocks into ethanol.

        2.  Thermochemical conversion processes aim to first convert 
        the cellulosic feedstocks into synthesis gas or oil, and then 
        convert these intermediate products into ethanol either through 
        fermentation or a catalytic reaction.

Q4b.  How long will it take for these conversion technologies to become 
cost effective for mass production?

A4b. The Department's research and development aims to make both 
biochemical and thermochemical technologies cost competitive by 2012.

Q4c.  How are we going to move from 10-percent scale demonstrations to 
full-scale deployment by 2012?

A4c. The Program's RD&D reduces the overall cost and risk to the 
biomass industry, and improves the likelihood of obtaining financing 
for full-scale commercial facilities. Overall knowledge gained from the 
10 percent scale solicitation and the commercial scale Section 932 
projects, enzyme and ethanologen development R&D, and the program's 
other RD&D is aimed at accelerating the ability of the biomass industry 
to design cost-competitive cellulosic ethanol plants to meet the 
President's AEI 2012 goal.

Q4d.  How will this be achieved while fulfilling the goal of making 
these cellulosic based biofuels widely available to the public at 
reasonable cost to all Americans?

A4d. We believe that the combination of the accelerated DOE Biofuels 
RD&D programs, the President's legislative proposals to implement the 
proposed Alternative Fuel Standard (AFS) and the increasing cooperation 
with USDA, DOT and other key federal agencies to facilitate ethanol 
deployment--are part of a coherent approach needed to bring the costs 
in line with competing fuels. Then the market will bring the benefits 
of cellulosic ethanol based fuels to the public on a large scale within 
the next decade.

Q5.  We've heard the President speak of switchgrass, corn stover, and 
wheat straw as feedstocks for cellulosic ethanol. Is enzyme research 
the Department is undertaking going to be applicable across the 
spectrum of feedstocks?

A5. Yes. The enzyme research supported by EERE's Biomass Program and 
the Department's Office of Science target a diverse range of feedstocks 
including switchgrass, corn stover, wheat straw, as well as wood chips. 
In recent years, the Biomass Program's research focused on using a 
combination of pretreatment and enzymes with corn stover as a model 
agricultural residue. This work is now beginning to focus on 
switchgrass as a model energy crop. One of the Program's main R&D 
objectives is to develop more efficient enzymes for lignocellulosic 
feedstocks (e.g., woodchips) and make them a part of an integrated 
process that minimizes ethanol costs. To this end, some of the Energy 
Policy Act, Section 932 selectees will work with leading enzyme 
companies to create tailored enzyme preparations for their feedstocks 
of interest. Additionally, a new solicitation with the objective of 
increasing enzyme efficiency is in the planning stages at DOE. It is 
envisioned that the projects awarded from this solicitation will result 
in enzyme systems that are cost effective for a variety of feedstocks.

Questions submitted by Representative Daniel Lipinski

Q1.  The FY08 budget request calls for an increase of 38.8 percent over 
FY06 levels for hydrogen technology R&D. How does the Department intend 
to spend these funds?

A1. The Department's budget request of $307 million reflects the 
President's Hydrogen Fuel Initiative commitment of $1.2 billion over 
five years (FY04 to FY08) to accelerate R&D in hydrogen and fuel cell 
technologies. The increased funds in the FY08 request compared to the 
FY06 appropriations will be spent on basic science research through the 
Office of Science (an 83.1 percent increase) and on focused applied R&D 
through the Office of Energy Efficiency and Renewable Energy (an 
increase of 38.8 percent).

Q2a.  I am disappointed that the FY08 request has zeroed out funding 
for geothermal. Recently there has been a great deal of interest in 
deep drilling for geothermal energy.

      I am curious to know whether, in making the decision to zero out 
geothermal funding, there were any discussions about deep drilling 
potential?

A2a. Our geothermal program has achieved its key research objectives 
and has provided substantial incentives that support the near-term 
development of the technology and deployment of the large geothermal 
resource base. The FY 2007 operating plan for the Department included 
$5 million to support geothermal power co-produced with oil and gas 
demonstration efforts, for an evaluation of enhanced geothermal systems 
to help industry prioritize its technology needs, and to bring to 
completion selected projects on exploration, drilling, and/or 
conversion technologies.

Q2b.  Has there been consideration for a demonstration-scale project of 
an underground repository that you would mine for power generation on 
the surface?

A2b. Yes, with support from the Department, the world's first heat 
mining (also called enhanced geothermal systems (EGS) project, where 
technology is used to create a geothermal reservoir, was undertaken at 
Fenton Hill, New Mexico, in 1976. The initial work demonstrated the 
feasibility of extracting energy through heat mining.

Questions submitted by Representative Mark Udall

Q1a.  Given the challenging national goals being set by Congress and 
the President for increasing the role of renewable energy in our energy 
mix, what are the long-term science and technology needs for solar, 
wind and biofuels?

A1a. The Department has undertaken a thorough review of these needs in 
the series of workshops around the topic of ``Basic Research Needs to 
Assure a Secure Energy Future.'' The entire series of reports includes 
work on hydrogen, biofuels, solar, nanotechnology, etc. and is 
available at this website: http://www.sc.doe.gov/bes/. These workshops 
contributed to the budget and policy formation processes that resulted 
in the Advanced Energy Initiative and the American Competitiveness 
Initiative.
    Activities noted in the Advanced Energy Initiative (AEI) include 
lowering the cost of producing cellulosic ethanol, improving the 
performance of lithium-ion batteries and improving the cost and 
performance of wind and solar technologies. The introduction of these 
advanced technologies in the marketplace will lower the costs of 
producing electricity from these renewable energies and will facilitate 
the growth of a productive manufacturing base and an active marketplace 
for renewable energy technologies.
    As identified in the AEI, long-term science and technology needs 
for solar center around increasing conversion efficiency and lowering 
costs, including the development of novel compound semiconductors, 
polymers, and nanostructured devices. Work is also needed in 
photoelectrochemical materials and devices. Solar thermal electric 
systems need further work in materials, especially thermal storage 
materials and high temperature working fluids. Thermochemical cycles 
are also of interest for producing fuels such as hydrogen. Improved 
polymers are needed for low temperature solar thermal applications.
    Key activities for wind technologies will focus on research, 
development and testing for improving the performance, cost 
effectiveness and reliability of large and distributed wind energy 
systems. For wind turbines, further long-term work is needed for meso-
scale atmospheric modeling to improve forecasting; for the aerodynamics 
of wind turbine blades such as turbulence, separation, stall, as well 
as improved materials and designs for turbine blades, gear-boxes and 
hubs; and for power electronics for converting power to 60 cycle line 
voltage.
    For biofuels, further work is needed on both biochemical approaches 
for producing biofuels, i.e., from cellulosic biomass--such as 
enzymatic hydrolysis, particularly for systems that can ultimately 
enable pretreatment, hydrolysis, and fermentation in a single tank, and 
on thermochemical approaches for producing biodiesel, jet fuel, 
ethanol, and other fuels.

Q1b.  Does the President's budget for EERE strike the proper balance 
between investment in short-term R&D (e.g., improving and deploying 
today's technology, processes, etc.) and investment in long-term R&D on 
``game-changing'' technologies (e.g., new biomaterials, PV 
nanostructures, etc.)?

A1b. Yes. The President's budget request for EERE strikes the proper 
balance of short-term RD&D investments and longer-term inquiries. In 
addition, the work of EERE is complemented and coordinated with that in 
the Office of Science to maximize the benefit of the taxpayer's 
investments.

Q1c.  Please describe the process of collaboration between EERE and the 
Office of Science, if any.

A1c. In addition to the activities mentioned above, EERE and the Office 
of Science (SC) collaborate in a variety of ways, including technical 
workshops, roadmaps, structured activities between SC and EERE, use by 
EERE-supported researchers of SC facilities, and joint solicitations. 
On July 31, 2006, the Department transmitted to Congress, pursuant to 
Section 994 of the Energy Policy Act of 2005, a coordination plan 
detailing a variety of these joint activities, including a number of 
workshops conducted on basic science needs for EERE-related applied 
research.

Q1d.  Is there an established process whereby basic research conducted 
under OS programs feeds seamlessly into applied research under the 
auspices of EERE?

A1d. Yes. As discussed in the Section 994 report presented to Congress, 
the Department periodically reviews science and technology activities, 
and provides an updated coordination plan every four years. EERE also 
plans with SC, and manages a number of Small Business Innovation 
Research and Small Business Technology Transfer program (SBIR/STTR) 
activities for SC. Currently, EERE is managing six topics for SC, with 
an annual value of approximately $15 million.

Q1e.  Is the ``balance'' referenced above appropriate to strike within 
EERE? Or should such a balance between short- and long-term research be 
struck between EERE and OS?

A1e. Both. As part of its balanced portfolio, EERE pursues near-, mid-, 
and long-term investment strategies for its applied research. The 
Office of Science is focused on basic research, but new technical 
platforms discovered through basic research can have a significant 
impact on EERE technologies in both the near-term and long-term. We 
have strived to achieve a balance between the EERE and SC investments 
to ensure technologies are proceeding steadily from the lab to applied 
R&D and to the marketplace.
                   Answers to Post-Hearing Questions

Responses by Kevin M. Kolevar, Director, Office of Electricity Delivery 
        and Energy Reliability, U.S. Department of Energy

Questions submitted by Chairman Nick Lampson

Q1.  I applaud your efforts to develop a comprehensive electric grid 
visualization capability to allow improved federal response during 
emergencies such as hurricanes and to identify regional and local 
impacts of energy disruptions. I understand that the new transmission 
grid monitoring system that is now operational at DOE enables 
situational awareness in the Southeastern United States.

          What is your plan to extend this visualization 
        capability across the United States?

          Could additional funding and other resources, if they 
        were brought to bear, help accelerate this process?

A1. I appreciate your interest in this important effort. Wide-area 
situational understanding is a key factor in managing the preparedness 
for and response to destructive events. The Department is partnering 
with the Department of Homeland Security, national laboratories, and 
industry to develop this strategic tool to enable real-time status of 
the electric grid and to help identify the interdependencies with other 
critical energy sectors. Although the visualization tool is now 
operational only for the Southeastern United States, we are working 
with other major utilities in multiple regions of the country to expand 
real-time status information on a national level. Additional funding 
would accelerate the process.

Q2.  In order for intermittent energy sources such as wind and solar to 
play a significant role in our electricity supply system, we must 
develop technologies to store the electricity when it is produced, then 
draw on it when we need it. As I understand it, storage is one of the 
major obstacles to more widespread adoption of renewables. There is a 
significant increase in R&D funds for Energy Storage, but a 
commensurate decrease in funding for Renewable and Distributed Systems 
Integration.

          Can you talk about the difference between the Energy 
        Storage and the Renewable and Distributed Systems Integration 
        programs and why one is being increased and the other cut?

          Can you comment on how energy storage can improve the 
        value of renewable generation to the electric system?

          Why is funding for renewables integration falling 
        even as the Administration is requesting huge funding increases 
        for technologies like solar photovoltaics?

A2. In FY 2006 and FY 2007, the energy storage program has focused on 
demonstrating and monitoring the performance of current state-of-the-
art energy storage technologies in partnership with the California 
Energy Commission (CEC) and the New York Energy Research and 
Development Agency (NYSERDA). In FY 2008, the Office proposes to 
research and develop the next generation storage concepts to lower cost 
and improve energy density. Under the Renewable and Distributed Systems 
Integration activity the Office proposes to coordinate and oversee a 
variety of demonstration projects that integrate renewables, 
distributed generation, storage, and advanced controls. This is in 
response to the recognition of the critical link between energy storage 
and renewables.
    The decrease in funding for the Renewable and Distributed System 
Integration program reflects the completion of turbine and engine 
research, which will now transition to systems integration.
    Energy storage can significantly increase the integration of 
renewable sources of energy into the electric system. Storage increases 
the reliability of intermittent resources like wind and photovoltaics, 
allowing these sources to become relatively constant sources of power. 
Renewable power produced in off-peak periods can be stored and used 
during periods of greater demand, thus making renewables dispatchable. 
Likewise, energy storage can bridge the gap during decreased periods of 
renewable production and, when combined with appropriate electronics, 
it can also eliminate short-term flutters that decrease power quality 
and impact digital equipment on the grid.
    The Department has not had a dedicated integration program that 
brings together renewables, distributed energy, and storage with 
advanced communications. In FY 2008 the Office transitioned the focus 
of the Distributed Energy Research activities to Renewable and 
Distributed Systems Integration. The decrease reflects the completion 
of distributed generation (microturbines, reciprocating engines) 
activities to reflect the desire of the Department to have a stronger 
role in renewable integration. In FY 2007, a solicitation was initiated 
that requested projects focusing on renewable systems integration such 
as photovoltaics.

Q3.  One way to meet increased electricity demand is for utilities to 
build more wires and add more generation, but there is also enormous 
potential that we have barely begun to tap to increase the efficiency 
options for the grid itself, including high temperature 
superconductors, demand-side management technologies, distributed 
generation and others.

          Why is overall R&D funding in these areas being cut?

          Could you discuss how your office is pursuing options 
        that will better utilize the existing infrastructure?

          Which national labs are involved in these efforts?

A3. We agree that there is enormous potential to increase the 
efficiency of the grid itself through high temperature superconductors, 
demand-side management technologies, and distributed energy 
technologies. The overall cut in the Office's R&D funding occurred in 
two areas, High Temperature Superconductivity and Renewable and 
Distributed Systems Integration. The cut in High Temperature 
Superconductivity funding reflects the phasing out of motor research 
and completing flywheel cooperative agreements. The decrease in funding 
for the Renewable and Distributed System Integration program reflects 
the completion of turbine and engine research, which will now 
transition to systems integration.
    The Office is pursuing three other paths in addition to High 
Temperature Superconductivity to improve/optimize the existing 
infrastructure. These include real-time monitoring and control of the 
grid, advanced energy storage, and systems integration research and 
demonstrations. Real-time monitoring and controls allow for faster 
operations, which increases reliability, and reduced reserve margins. 
Energy storage is critical overall to advancing renewables and 
improving grid operations. Renewable and Distributed Systems 
integration research is also demonstrating how to best optimize grid 
asset utilization.
    Many of the national laboratories support our research activities. 
The principle laboratories include: Oak Ridge National Laboratory, 
Sandia National Laboratory, Idaho National Laboratory, Pacific 
Northwest National Laboratories, Lawrence Berkley National Laboratory, 
and Los Alamos National Laboratory. The National Energy Technology 
Laboratory, a federal procurement office, provides project management 
activities for the Office.

Questions submitted by Representative Ralph M. Hall

Q1.  In your testimony, you say that, ``Superconductivity holds the 
promise of addressing capacity concerns by maximizing use of available 
`footprint' and limited space, while moving power efficiently and 
reliably.'' You also state that it, ``. . .supports advanced substation 
and interconnection designs. . .using less space and improving the 
security and reliability of the electric system.''

          Given the importance of High Temperature 
        Superconductivity, can you please explain the reasoning behind 
        the requested 35 percent decrease in funding from the FY06 
        level?

A1. The cut in High Temperature Superconductivity reflects the phasing 
out of motor research and completing flywheel cooperative agreements. 
Approximately one-third of the $45 million requested for the High 
Temperature Superconductivity (HTS) subprogram in FY 2007 will be spent 
on research of wire technologies: 2G wire development, dielectrics, 
cryogenics, and cable systems. This represents a decrease from FY 2006, 
when approximately half of the HTS subprogram's funding was spent on 
these technologies, because these projects have successfully met 
milestones, proven out their technological capabilities, and now move 
to the demonstration phase of development. In contrast, the Office 
expects to spend approximately two-thirds of the HTS subprogram's 
funding on HTS applications in FY 2007, which is an increase from FY 
2006 when just half of the funding was spent in this area. Since these 
applications, which include motors, have not performed as well, we will 
now focus more research dollars on achieving similar successes as have 
been seen with the wire technologies. Thus, the Department is focusing 
on a near-term critical need within the electric system to not only 
increase current carrying capacity, especially in urban areas, but also 
to relieve overburdened cables elsewhere in local grids.

Q2.  In regards to the Infrastructure Security and Energy Restoration 
activity, FY08 recommends a decrease from FY07. Given the importance of 
this activity in protecting the Nation's critical energy infrastructure 
and assisting State and local governments with energy disruption 
preparation and response, please explain the reasoning behind the 
reduced funding request.

A2. Although there is a slight decrease of $219,000 in the FY 2008 
budget request from the FY 2007 request, the Department still considers 
its obligations to protect the Nation's critical energy infrastructure 
under the Homeland Security Presidential Directives 7 and 8 to be 
extremely important. The Department's involvement with current critical 
energy infrastructure programs and its commitment to assisting State 
and local governments with disruption preparation and response is and 
will continue to be a priority. There is presently less of a need for 
as much outside support. Therefore, this decrease reflects the 
reduction of laboratory staff by one in order to accommodate program 
priorities.

Q3.  I understand that Transmission Reliability R&D, Energy Storage 
R&D, Gridwise, Gridworks and most projects in Electricity Distribution 
Transformation R&D programs are transferred to the Visualization and 
Controls sub-account as of FY07. The FY08 request for this sub-account 
is $25.3 million, but the budget for these five activities in FY06 was 
$83.9 million. Please explain this.

A3. The Visualization and Controls sub-account included the transfer of 
high-priority projects from the Transmission R&D, Gridwise, and 
Gridworks programs. In FY 2006, the budget for these three (3) 
activities was $22.6 million. The FY08 request for the Visualization 
and Controls sub-account has been increased to $25.3 million, which 
includes additional funding for cyber security research. Most of the 
projects in the Electricity Distribution Transformation R&D program 
have been transferred to the Distributed Systems Integration sub-
account.

Questions submitted by Representative Daniel Lipinski

Q1.  The FY08 request for High Temperature Superconductivity R&D is 
significantly reduced from the FY06 and FY07 requests. At one time this 
issue was viewed as a great investment for potentially large energy 
efficiency gains.

          What is Department's plan to continue research in 
        this field?

          Does the Dept. no longer see the promise in the 
        technology that it had previously, or are the major research 
        questions essentially resolved?

A1. High Temperature Superconductivity (HTS) holds tremendous promise 
for maximizing delivery capacity in existing rights-of-way while 
minimizing energy losses. Over the past 20 years, the Department has 
stewarded federal resources to carry this technology from inception to 
commercialization. In the last year, we began to witness the returns on 
this investment with the demonstration of short-length HTS cables at 
multiple sites in New York and Ohio. These projects reaffirmed the 
potential benefits of this revolutionary technology. In FY08, the 
Department plans to use available funds to continue support for core 
research in second-generation wire development, as well as to sponsor 
projects that enable installation of longer-length HTS cables and other 
applications that address many of the research questions that remain 
unresolved. The cut in High Temperature Superconductivity funding 
reflects the phasing out of motor research and completing flywheel 
cooperative agreements.
                   Answers to Post-Hearing Questions
Responses by Thomas D. Shope, Principal Deputy Assistant Secretary for 
        Fossil Energy, U.S. Department of Energy

Questions submitted by Chairman Nick Lampson

Q1.  The Energy Policy Act of 2005 established a research program for 
Ultra-deepwater and Unconventional Natural Gas and petroleum 
exploration. This is a program that Congress clearly cares about, and 
the President apparently approved of by signing it into law. However, 
the Department sent a letter to Congress asking to rescind this section 
of law, and failed to include funding in the FY 2007 Operating Plan, 
effectively killing this program. Furthermore, you are proposing to 
cancel out oil and gas research altogether, apparently with the 
reasoning that this R&D can be done by industry alone. This is 
surprisingly shortsighted on the part of the Administration given the 
enormous hydrocarbon resources in these fields, and the fact that, 
because of cost and technical complexity of extracting these resources, 
only the biggest of oil companies can afford to do the research and 
deploy the technologies. These large companies simply have priorities 
elsewhere.

Q1a.  What reasons does the Department have for eliminating the Ultra-
deep program, especially in light of its elimination of oil and gas 
research?

A1a. The Administration's request to repeal this program is based on 
the fact that oil and gas are mature industries that have every 
incentive, particularly at today's prices, to enhance production and 
continue research and development of technologies on their own. There 
is no need for taxpayers to subsidize oil companies in these efforts. 
The Administration's Research and Development Investment Criteria 
direct programs to avoid duplicating research in areas that are 
receiving funding from the private sector. We believe that independent 
producers, as well as the majors, will continue to purchase innovative 
technologies developed by service companies.

Q1b.  If Congress does not rescind this section of law will the 
Department carry out this very vital research program as it is 
instructed to do by law?

A1b. Yes, the Department is currently implementing the program 
according to the requirements of the law and will continue to do so 
unless the law is repealed.

Q1c.  Why have no funds been apportioned to the National Energy 
Technology Laboratory for carrying out the activities assigned to it in 
Subtitle J of EPAct 2005?

A1c. The $50 million available under Subtitle J in FY 2007 has been 
apportioned to NETL. NETL has begun work to produce the first annual 
research and development plan, which is required under the subtitle 
before research solicitations can be issued. Development and review of 
this plan, including review by two Federal Advisory Committees, is 
proceeding.

Q1d.  How could smaller firms leverage federal resources for oil and 
gas research?

A1d. Small firms will be eligible for research awards under the 
Subtitle J program. They may submit research proposals themselves or 
team with other organizations such as research laboratories or 
universities to apply for federal funds. Small firms may want to pay 
special attention to the portion of the solicitation for proposals that 
will deal with the technology challenges of small producers, one of the 
research areas specified by the law.

Questions submitted by Representative Ralph M. Hall

Q1.  In the President's 2007 State of the Union speech he stated that 
``It's in our vital interest to diversify America's energy supply--the 
way forward is through technology,'' that we must increase the supply 
of alternative fuels,'' and that we should ``dramatically reduce our 
dependence on foreign oil.'' One of the most promising ways to achieve 
these goals is through development of coal-to-liquids facilities.

          Why is there so little funding recommended in the FY 
        2008 budget for coal-to-liquids programs?

          How does DOE justify this lack of funding of such a 
        critical technology?

A1. Although past Department efforts and some congressionally directed 
funding has focused on production of liquid fuels from coal, the FY 
2008 Budget does not support these activities. Coal to liquids is a 
mature technology with evolutionary advances and incremental 
improvements possible, and therefore is not consistent with the 
Research and Development Investment Criteria. Past government funded 
programs have resulted in improved processes, catalysts and reactors, 
but there were no realized economic benefits because the technology was 
still not economic given other business risks and considerations, 
indicating that the obstacle was more due to market factors than 
technical issues. These coal-to-liquid processes can produce clean, 
zero-sulfur liquid fuels that are cleaner than required under the Tier 
II fuel regulations. The fuels are compatible with petroleum fuels and 
can utilize the same distribution infrastructure.
    The Office of Fossil Energy in DOE carries out an extensive 
research and technology development in coal gasification and hydrogen 
from coal. The targets of these programs are improved technology for 
clean coal-based power generation systems (for example, integrated coal 
gasification combined-cycle) and hydrogen production from coal, 
including DOE's FutureGen project. Because of technology overlaps 
between CTL fuel systems and coal gasification-based power and hydrogen 
production systems, nearly all of the President's FY 2008 budget for 
the DOE programs in coal gasification and coal fuels ($65 million) and 
a significant portion of the $27 million for advanced research support 
research and technology development that is relevant to the production 
of CTL fuels.
    A major concern regarding deployment of CTL technology is the 
potential impact on greenhouse gas emissions. The FY 2008 Budget 
provides $86 million for research directed at carbon capture and 
sequestration. This work is relevant to addressing the uncertainties 
regarding the viability of CTL fuels production if carbon dioxide 
emissions need to be controlled. The Sequestration Program is focused 
on applications for coal gasification power generation and hydrogen 
production.

Q2.  OMB and the Natural Research Council of the National noted that 
substantial benefits accrue from the DOE coal R&D program and from the 
continued use of coal in the energy mix. However, OMB and NRC have 
repeatedly criticized DOE for failing to establish a consistent 
measurement system for the future benefits of its coal research 
program, the distribution of these benefits between the public and 
private sectors, and the methodology and assumptions used in estimating 
program costs and benefits.

          Why has DOE been lax in developing these measures and 
        what steps will be taken to remedy this deficiency in FY 2008?

          Does DOE's continuing failure to adequately estimate 
        the benefits of its coal programs jeopardize future funding for 
        these programs?

A2. DOE has made significant efforts in recent years to develop a 
methodology for estimating the benefits of its research and development 
(R&D) activities that can be implemented on a consistent basis across 
all programs. Results from these efforts are included in the FY 2008 
budget submission to Congress. The Department is working to improve 
consistency across programs in the methodology and assumptions used in 
estimating program costs and benefits. The assumptions and methods 
underlying the modeling efforts have significant impacts on the 
estimated benefits. Results could vary significantly if external 
factors differ from the baseline case or alternative scenarios assumed 
for this analysis.
    At the heart of the methodology is the National Energy Modeling 
System (HEMS), which DOE/EIA uses for its Annual Energy Outlook. The 
DOE offices of Nuclear Energy, Fossil Energy, Energy Efficiency and 
Renewable Energy, and Electricity Supply and Energy Reliability use a 
consistent NEMS framework in conducting benefits analysis. Thus 
consistent policy assumptions are applied to all programs. Each of 
these DOE programs are evaluated against a consistent set of 
``success'' and ``no success'' assumptions, and all benefits reporting 
for DOE programs are based on a consistent set of metrics for economic, 
environmental, and energy security impacts. In December 2006, a group 
of external peer reviewers assessed the consistent policy scenarios 
applied to all of these DOE programs. In addition to addressing 
comments from the reviewers, DOE is also working to develop consistent 
methodologies for gathering cost and performance data for energy 
systems and for projecting this data into the future.
    There are two major challenges that DOE is continuing to deal with 
in its efforts to improve its benefits estimates:

        1.  Making benefits estimates intuitive and understandable to 
        its stakeholders, in spite of the large number of major 
        assumptions needed to predict how an advanced energy technology 
        might perform and compete over the next 50 years.

        2.  Dealing with the inherent risk associated with R&D. One 
        simply cannot state with certainty how likely high-risk R&D, 
        especially for major programs, such as the near-zero 
        atmospheric emissions coal plant (including CO2 
        capture and storage), is to meet its time and performance 
        goals. A further complication is that in order to estimate the 
        benefits of an advanced energy system, it must be competed 
        against other advanced systems that also have significant risk 
        associated with meeting cost and performance goals.

    The first item is largely a communication challenge, and we are 
working on new ways to display and explain our results. The second is 
an extreme methodological challenge.
    The Department is currently pilot testing several risk 
methodologies and will be evaluating the results throughout FY 2007.
    We do not believe that the methodological challenges to improve R&D 
benefits estimates should jeopardize programmatic funding. In some 
cases a ``rough'' estimate of benefits can be made that is sufficient 
to justify that support for certain R&D should be a priority. For 
example, relatively simple analysis that considers the degree to which 
greenhouse gases will need to be reduced over time, and the limited 
number of options for effecting major greenhouse gas reductions, 
strongly suggests that a variety of options will be necessary to tackle 
this problem, and that reducing the cost of these options will have 
huge societal benefits. R&D to reduce the cost of coal-fueled 
electricity generation that includes carbon capture and storage is 
clearly one of the more promising options.

Q3.  FutureGen is one of the projects at the forefront of the new 
technology effort. Central to the success of FutureGen is the ability 
to sequester CO2 emissions. Has the department explored 
possible storage sites for this sequestered CO2?

A3. Yes, as part of the FutureGen site selection, possible storage 
sites for the sequestered CO2 from FutureGen is being 
explored via a competitive site selection process through a 
solicitation that was issued on March 7, 2006, by the FutureGen 
Alliance, our industry partner. Twelve sites in seven states submitted 
proposals to host the FutureGen site. These sites had to pass 
qualification criteria to be given further consideration against a set 
of rigorous site evaluation criteria. The FutureGen Alliance selected 
four finalist sites from that group: Mattoon, IL; Tuscola, IL; Heart of 
Brazos near Jewett, TX; and Odessa, TX. A final site selection by the 
Alliance is expected to be made later this year after the completion of 
the environmental review process under the National Environmental 
Policy Act.

Q4.  Assuming it will be possible to inject the CO2 into the 
ground, what type of legal and regulatory framework needs to be in 
place in order to ensure that these types of plants will be built, and 
provide for safe long-term storage of large scale, long lived 
sequestered CO2?

A4. It will be necessary to have legal and regulatory frameworks 
developed specifically for carbon capture and storage projects. 
Frameworks can either be adopted or adapted from existing regulatory 
frameworks. The Department of Energy has been working with the U.S. 
Environmental Protection Agency (EPA) and the Interstate Oil and Gas 
Compact Commission (IOGCC) in the review and development of regulatory 
frameworks for Carbon Capture and Storage (CCS).
    CCS can be divided into four areas: capture, transportation, 
injection, and long-term storage of CO2. It has been 
suggested that the existing regulations under the Clean Air Act could 
be adopted to permit modifications necessary to capture CO2 
from power plants. Transportation of CO2 via pipelines, rail 
and trucks is currently regulated under federal and State statutes 
through their respective transportation agencies and, therefore, no new 
regulations for the transport of CO2 are necessary. 
Frameworks for the injection and long-term storage of CO2 in 
geologic formations could be developed from existing analogous 
regulations such as the Safe Drinking Water Act (SDWA) Underground 
Injection Control (UIC) Program, which are currently implemented by 
federal or State environmental and/or oil and gas divisions. CO2 
injections for enhanced oil and gas recovery are currently permitted as 
UIC Class II operations. The EPA has recently issued guidance to the 
EPA regions and states that would allow the deep saline tests under the 
Regional Carbon Sequestration Partnerships to be permitted as Class V, 
experimental projects. The lessons learned from these research projects 
will provide the technical data to permit future full scale CO2 
injection projects either under the existing UIC framework or as a new 
well classification. Regulations for the long-term storage and 
liability could be modeled after the UIC program but will need to be 
developed before sequestration can be adopted as a commercial 
opportunity to mitigate Greenhouse Gases.

Q5.  The Administration has indicated its strong interest in the 
development of new and alternative sources of energy. One of the goals 
of this new technology would be to reduce carbon emissions.

          In looking at the situation today, what would you 
        estimate the cost to be for a power plant to install current 
        CO2 capture and sequester technology?

          What is the availability of such technology? Is it 
        easily obtained?

A5. The capture costs will vary depending on the type of power plant 
and if the plant is existing or a new build. The costs to install the 
technology include capital costs for equipment and operational costs 
and can be displayed as increased in the cost-of--electricity, 
incremental plant capital cost, and cost of CO2 avoided and 
captured. The following table gives estimated current costs. Actual 
costs could vary significantly based on the specific plant 
configuration.



    The increased costs of electricity for capturing and storing 
CO2 are significant and the Fuels and Power Systems Program 
is undertaking extensive R&D to reduce these costs. The current costs 
of these particular scenarios are explained in more detail in the 
paragraphs below.

Post-combustion CO2 Capture:
    Installing CO2 capture on a new super-critical 
pulverized coal power plant using current state-of-the art amine 
scrubbing technology (capable of capturing 90+ percent of CO2 
emissions) results in an incremental total plant capital cost (TPC) 
equal to $1,294/kW. This corresponds to an incremental increase in cost 
of electricity (COE) of 4.7cents/kWh (from 6.4 cents/kWh to 11.1 cents/
kWh) equivalent to $63/ton CO2 avoided and $41/ton CO2 
captured [1]. The current state-of-the-art amine scrubbing is based of 
the Econamine FG+ carbon dioxide capture process being developed by 
Fluor Corporation. Significant technical and economical improvements in 
amine scrubbing have been made in the past 10 years with the leading 
technology developers being Fluor Corporation and Mitsubishi.

Pre-combustion CO2 Capture:
    Installing CO2 capture on a new integrated gasification 
combined cycle power plant using current state-of-the-art Selexol 
scrubbing technology (capable of capturing 90+ percent of CO2 
emissions) results in an incremental total plant capital cost (TPC) 
equal to -$625/kW. This corresponds to an incremental increase in cost 
of electricity (COE) of 2.5 cents/kWh (from 7.5 cents/kWh to 10.0 
cents/kWh) equivalent to $33/ton CO2 avoided and $26/ton 
CO2 captured.
    As of 2004, there are more than 30 small amine scrubbing plants 
currently capturing CO2 from flue gas sources (post NGCC and 
PC) to be used as feed sources for enhanced oil recovery, the chemical 
industry and the food/beverage industry. The size of the current 
installations range between 100 and 1,000 ton CO2 captured 
per day-significantly smaller than that required for a full-size PC 
power plant removing 17,000 ton CO2/day. Although Fluor 
Corporation is offering the Econamine FG+ at this full-scale, it is 
clear that some commercial development is still required to extend the 
envelope of commercial availability into the region required by large 
scale power plants.
    The current state-of-the-art for Selexol Scrubbing is based of the 
designs developed by UOP. There are 55+ worldwide Selexol Scrubbing 
processes removing CO2 from natural gas--the process is 
considered to be commercially available at the size required for a 
full-scale Integrated Gasification Combined Cycle power plant.

Q6.  Section 1407 of EPACT authorized $100 million a year for three 
years for high temperature Oxyfuel technology. It was to go to two 
small and two large Oxyfuel coal plants, both new and retrofits. The 
DOE has never funded that section nor is there any money in the budget 
for Oxyfuel technology.

          Why has section 1407 not been funded and why is there 
        no focus on retrofits?

A6. The Clean Coal Power Initiative (CCPI) is the primary vehicle used 
by the Department of Energy to fund demonstration scale advanced coal 
technology projects such as the high temperature Oxyfuel technology 
demonstrations authorized under section 1407 of EPACT 2005. In FY 2008, 
the Department expects to complete the CCPI Round 3 solicitation and 
proposal evaluations. Both new projects and retrofits are eligible to 
apply for funding as part of this vehicle. The solicitation will be 
followed by project selections to assemble the initial portfolio of 
advanced technology systems with carbon capture for sequestration and 
beneficial reuse. In addition, the FY 2008 coal budget request includes 
$5 Million for Oxyfuel/Oxycombustion R&D to continue the work begun in 
FY 2007 and earlier.

Questions submitted by Representative Jerry F. Costello

Q1.  Can you please give an update of the status of the FutureGen 
project?

A1. The project is moving forward on schedule. We have completed the 
first phase of the project, which included completion of the initial 
conceptual design and the initiation of the environmental review 
process as required under the National Environmental Policy Act (NEPA). 
In addition, under the first phase, a competitive site selection 
solicitation was issued on March 7, 2006, by the FutureGen Alliance, 
our industry partner. Twelve sites in seven states submitted proposals 
to host the FutureGen site. The FutureGen Alliance selected four 
finalist sites from that group: Mattoon, IL; Tuscola, IL; Heart of 
Brazos near Jewett, TX; and Odessa, TX. We are aiming to complete the 
NEPA process this year to be followed by a final site selection by the 
Alliance. We expect to continue preliminary design of the facility as 
well as further site characterization on the specific site when it is 
selected. The project is on target for a 2012 start date for 
operations.

Q2.  In FY 2007 the Administration requested $54 million for the 
FutureGen project. Since the FY 2006 enacted level for the project was 
$18 million, does the Department intend to make up the $36 million 
shortfall needed to keep the project on schedule?

A2. The Administration has requested and Congress has appropriated 
funds needed to keep the project on schedule, consist with the project 
funding plan described in the 2004 FutureGen report to Congress. This 
funding stream includes $18 million in FY 2006 and $54 million in FY 
2007.

Q3.  As you know, the President's budget proposal for FY08 seeks to 
eliminate funds needed for FutureGen in the out years. How can it keep 
its construction deadline?

A3. The President's FY 2008 budget for FutureGen is $108 million, 
consistent with the project funding plan. We are moving forward with 
the project activities with construction to begin in FY 2009 and start-
up of operations in 2012. We intend to request the necessary funds in 
the out years consistent with this project schedule.

Q4.  Please explain why DOE reduced the number of carbon sequestration 
projects around the country and how DOE will decide which projects to 
cut. How does the FY07 Operating Plan change this?

A4. The Office of Fossil Energy has been focusing its efforts on 
implementation of twenty-five field validation tests through the 
Regional Carbon Sequestration Partnerships (RCSP) Phase II initiative. 
These tests are designed to validate promising geologic formations in 
their regions to store CO2. The tests are testing the 
injectivity, modeling the fate, and measuring the response of the 
CO2 in the formations. In addition, these tests are 
developing the protocols for site characterization, monitoring, 
infrastructure development, operations, and closure that will be used 
to develop future large scale field tests. The information collected in 
these tests will support the development of Phase III, Large-Volume 
Testing, and provide information that can be used to inform future 
commercial Carbon Capture and Storage sites.
    In FY 2008, the Regional Carbon Sequestration Partnerships (CSRP) 
Field Validation Testing activities (Phase II) will complete and 
publish results for several of the 25 geologic sequestration tests 
involving CO2 injection and monitoring, mitigation, and 
verification (MMV) operations in saline formations, depleted oil and 
gas fields, and unmineable coal seams. The Department will prioritize 
among its Phase II tests, beginning with those that offer the greatest 
potential benefits. The initial focus will be weighted toward saline 
formations, since they are expected to offer the greatest capacity for 
geologic carbon sequestration. The Department will also initiate an 
expedited schedule for the multi-year Phase III of the Regional 
Partnership Program. In FY 2008, Phase III work will include the 
conduct of four large scale field tests, including completion of the 
NEPA Process for selected sites, and other work. In coordination with 
the current partnerships, the program will determine the ``highest 
potential'' opportunities for the initial expedited round of large 
scale sequestration tests in saline, coal, and/or oil and gas bearing 
formations. Due to the increased funding level in FY 2007, the 
Department of Energy (DOE) was able to initiate Phase III in FY 2007, 
further expediting the schedule for these highest priority tests. The 
Department will continue to apply a prioritization process to expedite 
the most important Phase II and Phase III tests. Several of the Phase 
11 tests are being strategically conducted to support Phase III 
activities. In addition to the knowledge gained by the Phase II tests, 
the initial work on well construction and characterization may support 
the Deployment Phase should one of the sites used for Phase II testing 
provide the necessary environment for Large-Volume Deployment Testing.
    The DOE will continue these field validation (Phase II) tests 
through FY 2008. Starting at the end of FY 2007 and through 2008 the 
DOE will complete National Environmental Policy Act (NEPA) activities 
and initiate four large volume sequestration tests through the Regional 
Carbon Sequestration Partnerships. This will include the site 
characterization and infrastructure development for storage projects 
that will inject up to one million tons of CO2 per year for 
several years. It is possible that injection could occur in FY 2008. We 
are also working closely with the EPA to assess requirements and 
procedures for permitting future commercial geologic sequestration 
deployments.

Q5.  Since last July, all the DOE Carbon Sequestration Partnerships 
have been contributing to a thoroughly vetted capacity methodology that 
will result in a DOE-produced atlas identifying areas in the U.S. which 
have sequestration capacity. This atlas is scheduled to be published in 
May of this year.

          Are you aware of any shortcomings with the DOE 
        Partnerships to identify and collect data on geographic areas?

          Second, do you believe additional funding is needed 
        to identify more sequestration sites in the United States?

A5. The Atlas represents Phase I (2003-2006) of the Regional Carbon 
Sequestration Partnerships assessment of geological storage capacity. 
The Department of Energy (DOE) is using existing funding to work on 
both historical and field data collection. During Phase II, which will 
last until 2009, the Partnerships are gathering additional information 
on geologic formations throughout the United States. This includes open 
source data gathered from Federal and State Geologic Surveys and 
proprietary data from industry partners. The information collected 
during Phase II will be used to update the capacity estimates 
throughout the United States and revise and issue an updated version of 
the Atlas in 2009. DOE expects to continue the effort to characterize 
additional geologic formations after 2009 during Phase III of the 
program. In addition, the data collected during the Phase II field 
validation tests and Phase III large volume sequestration test will be 
used to validate the capacity estimates presented in the Atlas. DOE 
will continue to use its resources to develop technologies and evaluate 
whether projects will be able to inject and store the necessary volumes 
to make this a commercial technology to mitigate future greenhouse gas 
emissions.
    DOE has shown that adequate capacity exists through the United 
States to store hundreds of years of future emissions and additional 
geographic regions will be incorporated into the DOE assessment by the 
end of Phase III of the Regional Carbon Sequestration Partnerships 
Program.

Questions submitted by Representative Daniel Lipinski

Q1.  Is the $79 million request for carbon sequestration enough to 
ensure that the proposed FutureGen plant can be constructed with this 
necessary technology? Do you believe DOE is allocating enough resources 
and moving quickly enough to develop this crucial technology that will 
lead to reducing our emissions of CO2?

A1. The FutureGen Project, as part of its site selection, has conducted 
initial site characterization of the geologic formations that will 
store the CO2 generated during its operation. The plant is 
schedule to be operational in 2012. The $86 million in the 2008 Budget 
(including $7 million of R&D by federal employees under the Program 
Direction line item), plus the $105 million in the 2007 Operations Plan 
under the Continuing Resolution (including $5 million of R&D by federal 
employees under the Program Direction line item) is sufficient funding 
to complete NEPA activities for four Large Volume Deployment Tests by 
FY 2008 and also for its Core Program to continue with development of 
Monitoring, Mitigation, and Verification (MMV) and other relevant 
technologies. With these activities, the sequestration technology 
should be advance enough to be part of FutureGen and also utilize 
FutureGen for technology verification.
    DOE has accelerated four Large-Volume Deployment Tests in 
coordination with the Regional Carbon Sequestration Partnerships. 
Funding from FY 2007 will be utilized to initiate these tests so that 
starting at the end of FY 2007 and through 2008 the DOE will complete 
National Environmental Policy Act (NEPA) activities and initiate four 
large volume sequestration tests. This will include the site 
characterization and infrastructure development for storage projects 
that will inject up to one million tons for CO2 per year for 
several years.
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