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


 
                      ENERGY AND WATER DEVELOPMENT
                        APPROPRIATIONS FOR 2009

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS
                             SECOND SESSION
                                ________


              SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT
                  PETER J. VISCLOSKY, Indiana, Chairman
 CHET EDWARDS, Texas                DAVID HOBSON, Ohio
 ED PASTOR, Arizona                 ZACH WAMP, Tennessee
 MARION BERRY, Arkansas             JO ANN EMERSON, Missouri
 CHAKA FATTAH, Pennsylvania         MICHAEL K. SIMPSON, Idaho
 STEVE ISRAEL, New York             DENNIS R. REHBERG, Montana
 TIM RYAN, Ohio                     KEN CALVERT, California   
 JOSE E. SERRANO, New York          
 JOHN W. OLVER, Massachusetts       
                                    

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
             Dixon Butler, Terry Tyborowski, Taunja Berquam,
             Robert Sherman, and Lori Maes, Staff Assistants

                                ________

                                 PART 6
                          DEPARTMENT OF ENERGY
                                                                   Page
 Secretary of the Department of Energy............................    1
 Environmental Management and Legacy Management...................  169
 Science Research.................................................  323
 Energy Supply and Conservation, Fossil Energy, Electricity 
Delivery and Energy Reliability...................................  509

                                   S

                                ________

         Printed for the use of the Committee on Appropriations
      PART 6--ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR 2009
                                                                      ?
?
                                                                      ?

                      ENERGY AND WATER DEVELOPMENT

                        APPROPRIATIONS FOR 2009

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS
                             SECOND SESSION
                                ________


              SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT
                  PETER J. VISCLOSKY, Indiana, Chairman
 CHET EDWARDS, Texas                DAVID HOBSON, Ohio
 ED PASTOR, Arizona                 ZACH WAMP, Tennessee
 MARION BERRY, Arkansas             JO ANN EMERSON, Missouri
 CHAKA FATTAH, Pennsylvania         MICHAEL K. SIMPSON, Idaho
 STEVE ISRAEL, New York             DENNIS R. REHBERG, Montana
 TIM RYAN, Ohio                     KEN CALVERT, California   
 JOSE E. SERRANO, New York          
 JOHN W. OLVER, Massachusetts       

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
             Dixon Butler, Terry Tyborowski, Taunja Berquam,
             Robert Sherman, and Lori Maes, Staff Assistants

                                ________

                                 PART 6
                          DEPARTMENT OF ENERGY
                                                                   Page
 Secretary of the Department of Energy............................    1
 Environmental Management and Legacy Management...................  169
 Science Research.................................................  323
 Energy Supply and Conservation, Fossil Energy, Electricity 
Delivery and Energy Reliability...................................  509

                                   S

                                ________

         Printed for the use of the Committee on Appropriations
                                ________
                     U.S. GOVERNMENT PRINTING OFFICE
 43-355                     WASHINGTON : 2008

                       COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman

 JOHN P. MURTHA, Pennsylvania       JERRY LEWIS, California
 NORMAN D. DICKS, Washington        C. W. BILL YOUNG, Florida
 ALAN B. MOLLOHAN, West Virginia    RALPH REGULA, Ohio
 MARCY KAPTUR, Ohio                 HAROLD ROGERS, Kentucky
 PETER J. VISCLOSKY, Indiana        FRANK R. WOLF, Virginia
 NITA M. LOWEY, New York            JAMES T. WALSH, New York
 JOSE E. SERRANO, New York          DAVID L. HOBSON, Ohio
 ROSA L. DeLAURO, Connecticut       JOE KNOLLENBERG, Michigan
 JAMES P. MORAN, Virginia           JACK KINGSTON, Georgia
 JOHN W. OLVER, Massachusetts       RODNEY P. FRELINGHUYSEN, New Jersey
 ED PASTOR, Arizona                 TODD TIAHRT, Kansas
 DAVID E. PRICE, North Carolina     ZACH WAMP, Tennessee
 CHET EDWARDS, Texas                TOM LATHAM, Iowa
 ROBERT E. ``BUD'' CRAMER, Jr.,     ROBERT B. ADERHOLT, Alabama
Alabama                             JO ANN EMERSON, Missouri
 PATRICK J. KENNEDY, Rhode Island   KAY GRANGER, Texas
 MAURICE D. HINCHEY, New York       JOHN E. PETERSON, Pennsylvania
 LUCILLE ROYBAL-ALLARD, California  VIRGIL H. GOODE, Jr., Virginia
 SAM FARR, California               RAY LaHOOD, Illinois
 JESSE L. JACKSON, Jr., Illinois    DAVE WELDON, Florida
 CAROLYN C. KILPATRICK, Michigan    MICHAEL K. SIMPSON, Idaho
 ALLEN BOYD, Florida                JOHN ABNEY CULBERSON, Texas
 CHAKA FATTAH, Pennsylvania         MARK STEVEN KIRK, Illinois
 STEVEN R. ROTHMAN, New Jersey      ANDER CRENSHAW, Florida
 SANFORD D. BISHOP, Jr., Georgia    DENNIS R. REHBERG, Montana
 MARION BERRY, Arkansas             JOHN R. CARTER, Texas
 BARBARA LEE, California            RODNEY ALEXANDER, Louisiana
 TOM UDALL, New Mexico              KEN CALVERT, California
 ADAM SCHIFF, California            JO BONNER, Alabama                 
 MICHAEL HONDA, California          
 BETTY McCOLLUM, Minnesota          
 STEVE ISRAEL, New York             
 TIM RYAN, Ohio                     
 C.A. ``DUTCH'' RUPPERSBERGER,      
Maryland                            
 BEN CHANDLER, Kentucky             
 DEBBIE WASSERMAN SCHULTZ, Florida  
 CIRO RODRIGUEZ, Texas              

                  Rob Nabors, Clerk and Staff Director

                                  (ii)


 ENERGY AND WATER DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR 
                                  2009

                              ----------                              

                                       Thursday, February 28, 2008.

                 SECRETARY OF THE DEPARTMENT OF ENERGY

                                WITNESS

HON. SAMUEL BODMAN, SECRETARY OF ENERGY

                 Chairman Visclosky's Opening Statement

    Mr. Visclosky [presiding]. I would like to bring the 
subcommittee to order.
    Mr. Secretary, I thank you very much for being here. I 
understand that you have not been in the best of health, but we 
do appreciate the trouble you have gone to be here.
    This is our third hearing of the year of the subcommittee, 
but the first dealing specifically with the Department of 
Energy that encompasses the majority of our jurisdiction. Given 
the interest in the hearing, I did want to take this 
opportunity, as I did yesterday, to welcome back Mr. Rehberg to 
the subcommittee. He is trying to introduce better health 
habits and dietary habits to us. [Laughter.]
    I appreciate that, as well as Mr. Calvert, who has 
extensive experience and knowledge as far as water issues in 
particular, and is going to make a great contribution to the 
Committee. I again appreciate their being on the subcommittee.
    But also, as everybody appreciates, the work of the 
subcommittee is certainly been driven by the staff. 
Unfortunately, our Clerk from last year, Dixon Butler, had a 
very serious illness and continues to recuperate, and Scott 
Burnison has also gone on to his next stepping stone in life, 
and we have some additional personnel changes. I just wanted to 
take a moment to highlight that, and then we can begin the 
hearing.
    First of all, we have a detailee from the Department of 
Energy, Uday Varadarajan. Uday, if you would identify yourself? 
Uday is a detailee from DOE, originally from Berkeley, went to 
Princeton, got his Ph.D. from U.C. Berkeley. The title of his 
dissertation, which Mr. Simpson is also going to elaborate on a 
bit later, was Geometry Topology in String Theory.
    So I just want to make sure we are clear on that.
    The other detailee, and I almost hate those titles because 
they really are full-fledged members of our group and staff, is 
Lauren Minto, who grew up and is from the great state of 
Montana. As I like to kid Lauren, she majored in Latin because 
all of her degrees are followed by summa and magna and cum 
laude and all of those types of words. She had the good sense 
to get two of her advanced degrees from the University of 
Indiana in Bloomington, Indiana. I don't know how she got this 
job.
    Rob Blair is continuing his work with the Committee, but in 
an enhanced capacity. Rob served with the Committee last year, 
but also had a lot of duties on Foreign Operations, and 
essentially is here fulltime picking up the slack from Kevin 
Cook. Rob, it appears that if you work on the right end of this 
panel, you have to graduate from Cornell, and is a Cornell 
grad, and also have advanced degrees from the Fletcher School 
of Law and Diplomacy, and spent some time in the Peace Corps.
    Also new to our staff is Bob Sherman. If Bob would identify 
himself? He is a graduate of Oberlin College, as well as UCONN, 
and has a great deal of congressional experience, with most of 
it on the authorizing side. Bob has seen the light and is new 
on the appropriations side. But very importantly for his work 
on weapons programs, he spent 8 years with the Arms Control and 
Disarmament Agency at the State Department.
    Returning is Lori Maes, who is our administrative aide, 
from New Mexico, went to Texas Women's University, and has been 
with the full committee for 25 years, most of which she spent 
on the Foreign Operations Subcommittee.
    Also returning is one of our leaders, Terry Tyborowski. She 
returns continuing to do an exceptional job as far as 
environmental management accounts and many of the other energy 
accounts. To show you how smart Terry is, she went to school at 
``the U,'' as some people would call it, the University of 
Miami, where it is much warmer than Cornell.
    Also, before I introduce our leaders, we have a lot of 
associate staff here, and at one point that was my occupation 
in life, so I appreciate the contribution of all of the 
associate staff, two in particular. Colonel Kenny Kraft, who is 
the associate staff for Mr. Hobson, and Shari Davenport, who is 
my associate staff.
    We also do have, if you would, our leadership and that is 
Kevin Cook, a Cornell grad, as I mentioned, formerly with the 
Corps, and previously served, as many of you know, as Clerk of 
the subcommittee. As I like to tell Kevin, he married really 
well in life.
    And finally, the Clerk is Taunja Berguarn, who has multiple 
degrees from Portland State University, and has served on the 
subcommittee and also is, if you would, experienced as far as 
her career, with the Army Corps of Engineers, also having 
served our country in Iraq during 2004.
    And very importantly, we don't know for sure, but it is our 
working assumption, is that in the old days, as I like to say, 
you had to be a former Marine to clerk an appropriations 
subcommittee, not that there is anything wrong with that, but 
it would appear that Taunja is the first woman to clerk the 
Energy and Water Subcommittee. You might want to give her a 
round of applause for that.
    With that, I do have an opening statement, and then Mr. 
Secretary, we will proceed.
    Secretary, thank you very much for appearing before the 
subcommittee today. Funding and oversight of the Department of 
Energy constitutes roughly 80 percent of the responsibility of 
the Energy and Water Development Subcommittee. The scope of DOE 
activity is diverse and of critical importance.
    Last year as the Chairman of this subcommittee, I outlined 
five themes that I view as high priority: Effective project 
management of the agency's programs, a smart investment in 
energy research development and technology, advancing national 
efforts on nuclear nonproliferation, transforming and reducing 
the nuclear weapons complex, and finally, addressing our 
national environmental cleanup responsibilities.
    These issues have not lessened in importance in the 
intervening year. On the contrary, they have become more 
critical.
    I would now add nuclear waste disposal to the list.
    The department is ultimately an implementing organization, 
and not responsible for the promulgation of policy. However, 
this issue impacts the Department's budget and operations. More 
importantly, the issue has significant impacts to the national 
budget through judgment fund payments estimated as much as $35 
billion.
    An additional energy concern is gas prices, an issue 
impacting every American. Earlier this month, the subcommittee 
had an oversight hearing on the best options for reducing oil 
consumption and decreasing CO2 emissions from the 
vehicle sector. In that hearing, we learned of several 
promising research opportunities that could lead to reduced 
reliance on oil.
    Today's hearing is the first of seven this subcommittee 
will conduct this year on the Department of Energy's fiscal 
year 2009 budget request and current management challenges and 
approaches. I would like to establish at the outset that I am 
extremely troubled by the Department's administration of the 
fiscal year 2008 appropriations. The Department has repeatedly 
and cavalierly disregarded congressional direction on 
significant issues under its jurisdiction. The language 
contained in the Omnibus Appropriation Bill was clear, yet the 
department has repeatedly thwarted specific directions and the 
intent of Congress.
    Mr. Secretary, when you came to the Department, you 
committed to reforming project management. Yet time and again, 
the Department comes to Congress with reports of significant 
cost increases and schedule slips. You now appear before us 
with what is presumably your last budget request, and there has 
been no significant change in the Department's approach to cost 
and schedule issues.
    I also question the choices that the administration has 
made in the budget request. For example, the budget proposes 
the elimination of the Weatherization Program during a period 
of rising energy costs for those who are less fortunate. Yet 
NP-2010 is substantially above its baseline estimate. Nuclear 
Nonproliferation is reduced, while funding for nuclear weapons 
is increased.
    Last year, you testified that meeting the Department's 
commitment for public health was among your highest priorities, 
yet this budget proposes to fund the Environmental Management 
account at a level that would not meet those commitments. 
President Bush proudly requests a huge increase for the Office 
of Science, and in the same document savages funding for Energy 
Efficiency and Renewable Energy programs by $467 million.
    Now, I must tell you, Mr. Secretary, I am abjectly 
disappointed. I will be interested today in hearing your 
defense of the choices made in the Department's fiscal year 
2009 budget request, fiscal year 2008 execution, and overall 
department management.
    At this point, I would like to yield to Mr. Hobson for his 
opening statement.
    Mr. Hobson. Thank you, Mr. Chairman.

                     Mr. Hobson's Opening Statement

    Mr. Secretary, this is the third year where you are 
testifying before this subcommittee. As I have said before--is 
it four?
    Secretary Bodman. It seems like three.
    Mr. Hobson. It has gone by fast. [Laughter.]
    I believe that Secretary Bodman is probably one of the best 
qualified secretaries that we have ever seen at the Department 
of Energy in a long time. However, I have to say that I am very 
disappointed that his technical expertise and management 
background have not led to the tangible improvements in the 
department that I had hoped for, and I think this committee 
hoped for.
    The nuclear waste repository at Yucca Mountain is still on 
life support, and the department is ignoring the political 
realities in the Senate and the state of Nevada that can and 
will block any progress on the repository. The department 
refuses to look seriously at alternatives for dealing with 
spent fuel.
    Meanwhile, spent fuel continues to accumulate at reactor 
sites around the country and a multi-billion dollar liability 
against the federal government grows larger every day. The 
department has fumbled attempts at recycling spent fuel under 
the global nuclear energy partnership, and have alienated even 
the strongest supporters for recycling spent fuel, and have 
done nothing to convert any of the skeptics.
    In part because of the failure to provide real solutions 
for spent fuel, the department has also failed to move forward 
decisively on nuclear power. We absolutely will need more 
nuclear power plants to reduce our dependence on foreign oil, 
and reduce our greenhouse gas emissions. The department has not 
put the U.S. nuclear industry on a secure footing, in my 
opinion, for the future.
    The massive waste treatment plant at Hanford continues to 
be behind schedule and the cost estimates are reliable only 
until the next management team takes over. I have seen that 
time and time again. But the department still believes that the 
waste treatment plant deserves $690 million every year, 
regardless of whether we have any project performance to show 
to the taxpayers.
    In total, the department is requesting $25 billion for 
fiscal year 2009. Most people do not realize that we will spend 
$2 billion of that amount at the Hanford site. We will spend 
another $2 billion at Los Alamos--not one of my favorite 
places, because we can't get any performance judgments. I guess 
success is measured by how much we spend every year on certain 
projects in certain states, rather than what results are 
achieved.
    Another place where the department made a bad deal for the 
taxpayers is the Savannah River site in South Carolina. The 
department wants to spend nearly $2.2 billion at Savannah River 
in 2009, with the centerpiece for waste spending being the MOX 
plant. I recognize the political compromise that led the 
chairman to allow that project to move forward into 
construction, but that doesn't mean I have to like it or trust 
anything the department tells us about it, and I have a very 
pointed question later on that I am going to ask about what is 
happening down there and why you are continuing to do certain 
things in the design-build of that, when there is a very 
serious technical problem with that construction.
    There are some bright spots at the department, and I am 
thinking especially of the success that Ray Orbach is achieving 
on the science front. I give Dr. Orbach credit for doing the 
best he can within the funding made available to him, for 
taking the long-range view of his programs, and for taking 
congressional guidance seriously. Unfortunately, the Office of 
Science is an exception, rather than the rule at DOE. If 
anything the DOE's motto seems to be ignore Congress's 
direction to the maximum extent.
    It is an interesting strategy when DOE is before this 
subcommittee asking for over $25 billion in 2009. If we face 
fiscal constraints similar to what happened in 2008, where we 
had to work within the president's proposed spending levels for 
our bill, I personally would recommend we do the same thing we 
did last year, which is transfer at least $1 billion from DOE 
to the Corps of Engineers.
    I would much rather give the taxpayers' hard-earned dollars 
to an agency that is beginning to understand and respond to 
project management, following congressional direction, and 
recognizes that its contractors work for the federal 
government, instead of the other way around.
    Mr. Chairman, that concludes my statement.
    Mr. Visclosky. Okay, Mr. Hobson.
    Mr. Secretary.

                  Secretary Bodman's Opening Statement

    Secretary Bodman. Mr. Chairman, Congressman Hobson, members 
of the subcommittee, thank you for giving me the opportunity of 
appearing before you for what is now the fourth time to discuss 
our department's budget request.
    I think it is safe to say that the budget of 2009, that the 
goals of the budget of 2009 are largely unchanged from our 
budget goals in previous years. This budget request provides 
us, in my judgment, the resources that are needed to continue 
to move forward on our five central missions, which we count as 
promoting and enhancing energy security, nuclear security, 
scientific discovery, environmental responsibility, and 
management excellence.
    Since 2001, this administration and Congress have invested 
more than $180 billion in the Department of Energy and its 
programs. These investments have been used to address the 
growing demand for affordable, clean and reliable energy; have 
helped safeguard our national security; and have enabled 
scientific research leading to significant improvements in the 
quality of life and the health of the American people.
    The department's fiscal year 2009 request in the amount of 
$25 billion, as has been mentioned, was developed with the need 
to continue these activities in mind, and to address the energy 
challenges that confront us daily. An investment of this size 
allows us to fulfill our central missions, as well as advance 
the goals of the president's American competitiveness 
initiative, to ensure U.S. technological competitiveness and 
economic security. It also allows us to continue our progress 
toward the goals of the president's advanced energy initiative, 
accelerating the research, development and deployment of clean 
alternative energy technology.
    The Department of Energy is responsible for promoting 
America's energy security. We encourage the development of 
reliable, clean and affordable energy supplies, and we 
strengthen United States competitiveness by leading in 
innovation and scientific discovery. At the same time, we 
continue to ensure the security of the nuclear stockpile and we 
reclaim and restore the sites that are the nation's 
environmental legacy.
    All of this is done under a rubric of sound management, 
consistent with the president's management agenda to improve 
performance and accountability. But this budget request also 
reflects our concerns about America's energy future. The 
projected growth in global energy demand is a major challenge 
for us all. It is a challenge that must be met with responsible 
action. Global demand will continue to grow. We cannot depend 
solely on hydrocarbons to meet it.
    This is a problem for all nations, for energy producers and 
consumers alike. I believe, therefore, that it is vital that 
the United States pursue policies that enhance global energy 
security, not just our own. We need new energy options, cleaner 
and more efficient technologies, and alternative fuel. And we 
must support fully the research and innovation necessary for 
their development. We must diversify our energy supplies, 
diversify our energy suppliers, and establish and secure 
additional energy supply routes.
    This budget document should also be viewed as a roadmap 
showing the future course of America's energy security. This 
course will not, in my judgment, be an easy one, but I believe 
it is a necessary one. These efforts will require a sustained 
commitment on the part of government, strong private sector 
investment, and strategic collaborations between government, 
the private sector, and the research community, including 
academia. Our goal is to foster continued economic growth and 
promote a sustainable energy future.
    Mr. Chairman, I believe the committee has a copy of my 
written statement, which I now ask be included in the record, 
so that in the interests of time, we might move to any 
questions that you or other members of the committee may have 
about the department's budget request.
    Thank you, sir.
    [The prepared statement of Samuel W. Bodman, Secretary, 
U.S. Department of Energy, follows:]

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                       MANAGEMENT OF MOX PROGRAM

    Mr. Visclosky. Mr. Secretary, thank you very much.
    The first question I would have is I would like to discuss 
what we have talked about many times, and Mr. Hobson has 
alluded to it, and that is the MOX plant in South Carolina. We 
ended up providing enough new budget authority to bring MOX 
funding to $300 million, and $94 million for the current fiscal 
year. However, since this had changed from a nonproliferation 
project to an energy project, we decided the program should be 
managed by Nuclear Energy. In the bill signed into law by the 
President of the United States of America, we shifted the 
funding out of NNSA.
    Mr. Secretary, it appears as if NNSA continues to manage 
the program. We were very clear in the direction, and how much 
longer will it take the Department to follow congressional 
directive in a law signed by the President of the United 
States?
    Secretary Bodman. Mr. Chairman, as I understand it, and I 
have reviewed this matter as recently as yesterday, the general 
counsel of the Department of Energy takes the view that I am 
not permitted under the NNSA Act, the creation of the NNSA, to 
move any activities out of the NNSA to other parts of this 
department.
    Therefore, we have taken and tried to respond in every 
possible way that we could. It is still being managed by the 
NNSA, but it is being managed with the overall supervision of 
the Nuclear Energy Office, as you have instructed. We are 
continuing to do work in the legal department, in our General 
Counsel's office, in order to determine the final answer, but 
at least on a preliminary basis, that is what I am told.
    Mr. Visclosky. We have a law that the President signed into 
law. We gave you the money.
    Secretary Bodman. I understand that, sir.
    Mr. Visclosky. We gave you the money, but made a clear 
distinction because it was eating nonproliferation alive, and 
we have problems in places like Pakistan, that this is an 
energy program which is fine. I mean, Mr. Hobson, we obviously 
have a long track record opposed to MOX.
    Secretary Bodman. Right.
    Mr. Visclosky. We gave the Department the money, but 
clearly said where it ought to be managed, and we have a law to 
that effect, and your lawyer is telling you not to do it.
    Secretary Bodman. My lawyer is telling me that I am not 
capable of doing it.
    Mr. Visclosky. Despite the fact that we passed a law?
    Secretary Bodman. Despite the fact that you passed the law. 
Yes, sir.
    Mr. Visclosky. Congress passed the law.
    Secretary Bodman. That Congress passed the law and the 
president signed it.
    Mr. Visclosky. And the administration doesn't want to do 
it.
    Secretary Bodman. It is not a matter of not wanting to do 
it, sir. It is looking at the creation of the NNSA and what the 
authorities are that have been granted to the Secretary of 
Energy. I am not permitted, according to what I am told, to 
move the project as instructed by Congress. Therefore, we have 
taken and done everything we know how to do, that is to say 
have it managed by the Nuclear Energy Office as they are 
overseeing this activity. But the day-to-day management is 
continuing to be in the NNSA.
    Mr. Visclosky. Has your legal department provided you with 
any e-mails or memorandums or paper documents to that effect?
    Secretary Bodman. The legal department has provided me with 
verbal information of the sort that I have just described, and 
they are in the process of preparing a written document to that 
effect.
    Mr. Visclosky. Do you know if your legal department has 
prepared a memorandum that is the basis of their oral 
conversations with you to that effect?
    Secretary Bodman. No, sir, I do not know.
    Mr. Visclosky. Could you answer for the record whether they 
have, and if they have, if you would submit those as part of 
your testimony to the committee?
    Secretary Bodman. I would be happy to do that.

                              MOX Transfer

    Materials related to the DOE General Counsel legal decision on the 
MOX transfer from the National Nuclear Security Administration to the 
Nuclear Energy Office were supplied directly to the Energy and Water 
Development Subcommittee.

    Mr. Visclosky. I appreciate that.

                        CONGRESSIONAL DIRECTION

    Second, the conference report clearly directed that 50 
percent of fiscal year 2008 Advanced Fuel Cycle Initiatives, 
GNEP research and development funds, roughly $75 million, are 
to be made available in an agency-wide solicitation for 
universities, national laboratories, and commercial entities. 
Once again, it is certainly our belief that the direction was 
clear and definite.
    However, it took the Department 2 months to figure out, 
apparently, what was in the conference report, and some 
additional period of time to finally come up to the Hill and 
speak to us about it. It is unfortunate that the Department of 
Energy has gone ahead and allocated funds under the CR in a way 
that apparently makes following the congressional directive 
difficult.
    Perhaps if the Department had consulted with the Committee 
months ago, we wouldn't be in the current position we are. 
Could you tell us where you are in implementing the direction 
contained in the conference report?
    Secretary Bodman. We are all for competition. That is an 
important matter, and apparently we had developed the idea that 
there would be independent areas of the academic community, the 
national laboratories, and private industry. The staff 
apparently wanted a competition run for all, and so we have had 
to start over again, having started down the path that I just 
indicated. So that is what took a couple of months.
    We are continuing to develop a plan for that. We expect to 
have that done shortly, that is to say within the next month or 
so. And we will proceed to move forward. I think that it is 
likely, as I think is indicated in the Committee's judgment, 
that there will be I think it is 50 percent of the GNEP 
activity is supposed to be done by competition. I think we are 
probably going to fall short of that, but we are doing our 
absolute level best to do it, and there is no reluctance on the 
part of the department to follow the intent of Congress.
    Mr. Visclosky. Why would you fall short on the 50 percent?
    Secretary Bodman. Because I am not halfway through the 
year.
    Mr. Visclosky. You are halfway through the year now, but 
the bill was passed in December.
    Secretary Bodman. I understand that. The bill was passed at 
the time right before Christmas.
    Mr. Visclosky. Right.
    Secretary Bodman. In effect, the first quarter of the year 
was gone.
    Mr. Visclosky. Right.
    Secretary Bodman. I have been developing the responses of 
the sort that I have already described, and we are continuing 
to do work. We will have a competition, but we have also been 
following under the Continuing Resolution. We have been 
following the direction, what we felt was the direction of 
Congress, with respect to funding individual laboratories, 
individual universities, and individual private companies.
    Mr. Visclosky. Mr. Secretary, you mention in your answer 
that staff at DOE wanted to do something.
    Secretary Bodman. It is not a matter of wanting.
    Mr. Visclosky. Congress--Congress said it should be 50 
percent.
    Secretary Bodman. I understand that.
    Mr. Visclosky. So to be honest with you, I don't care what 
the staff thinks. Congress said 50 percent.
    Secretary Bodman. I understand.
    Mr. Visclosky. And not just people on this subcommittee.
    Secretary Bodman. I understand.

                           IDAHO NATIONAL LAB

    Mr. Visclosky. Next question. The fiscal year 2008 omnibus 
include $14.8 million in funding and directed the NNSA to 
refurbish building 561 and complex building 691 at Idaho 
National Lab for material consolidation and other purposes. Are 
you aware that NNSA has informed the committee that it does not 
intend to comply with this congressional direction and is going 
to use the funding for other purposes?
    Secretary Bodman. I am aware of it. I am aware that we are 
going to request to use the funding for other purposes.
    Mr. Visclosky. What is so hard about following direction in 
a law signed by the President of the United States, that is 
agreed to by 535 elected legislators of a coequal branch of the 
government under the Constitution of the United States?
    Secretary Bodman. We think that----
    Mr. Visclosky. And there is no signing letter.
    Secretary Bodman. I am sorry.
    Mr. Visclosky. And don't get me started on that.
    Secretary Bodman. I didn't hear.
    Mr. Hobson. Well, I was just asking, if you would--and 
there is no signing letter.
    Secretary Bodman. I don't know what a signing letter is, 
Mr. Hobson.
    Mr. Hobson. Unfortunately, we have learned too much about 
them in this administration. I think most of the people in the 
past were limited in doing it. It is when the president signs a 
letter that says ``we don't like this part of a bill, so we are 
not going to enforce it.'' I think they are outrageous.
    There isn't one on this, as far as I know, on this bill. So 
that is part of our problem. We find it difficult to understand 
if a law is passed and it is the law of the land, why it is not 
being followed, especially if there is this tactic that has 
been used recently. A lot of presidents used it in the past, 
but never to the degree it is being done now.
    So we find that particularly unusual, I guess, the fact 
that there isn't a signing letter, that somebody along the way 
has just said ``we are not going to follow what the president 
has signed,'' and we don't have anything justifying it.
    I am sorry.
    Mr. Visclosky. And Mr. Secretary, NNSA obviously is going 
to come in, too, but I would suggest that you have a 
conversation with them that we passed a law.
    Secretary Bodman. I understand.
    Mr. Visclosky. They may have preferences, but we passed a 
law.
    Secretary Bodman. I understand.
    Mr. Visclosky. Okay.
    Mr. Hobson.

                       FIVE-YEAR BUDGET PLANNING

    Mr. Hobson. Thank you, Mr. Chairman.
    I have three or four issues I would like to get to. 
Normally, I would defer to the members of the committee, but 
these are things that I feel compelled to follow up on, with 
the chairman's understanding here.
    Mr. Secretary, you know well that 5-year budget planning 
was one of my top business priorities when I was here, to try 
to get some control not from our standpoint, but control of how 
we spend money, have a plan, that we know where we are going. 
You know where we are going, we know where we are going. It is 
a joint priority between the chairman and myself that we still 
share. We didn't come up with this independently. We fostered 
this together.
    The House report for 2008 contained clear direction 
requiring the department to submit updated 5-year budget plans, 
concurrent with the submission of the 2009 budget request. The 
explanatory statement accompanying the consolidated 
Appropriation Act for 2008 specifically states that guidance 
contained in the separate House and Senate reports remains 
effective unless modified by the explanatory statement.
    Despite this clear direction, the department did not submit 
any 5-year budget plans for this year. Further, committee staff 
has been informed the department has no intention of submitting 
these 5-year plans for anytime later this year. I confess to 
being surprised at this decision, given that the department has 
submitted these 5-year budget plans for key DOE programs in the 
past several years, and has done so with the support and 
participation of the Office of Management and Budget.
    Was the decision to ignore the congressional direction for 
2009 made within the department or at OMB?
    Secondly, has the department considered what the funding 
consequences may be for blatantly ignoring this and other 
directions from the Appropriations Committees?
    Thirdly, given that the department is so dismissive of the 
direction and priorities of this committee, please explain why 
we should not be similarly dismissive of the priorities that 
you all come forward with in the budget request. Because this 
was a management tool. You are a management guy.
    Secretary Bodman. Yes, sir.
    Mr. Hobson. This was designed so that people knew where you 
were going to be in the future, so that we could help you and 
work with you. But it is like, you know, forget it, we are not 
here. It is a good tool. The Corps, for example, has found that 
it is a good tool. And frankly, OMB has come around in my 
meetings with the people at OMB that it is a good thing for the 
Corps to have this.
    This is one of the ways we can control spending and we can 
control earmarks, and we know where people are going. Why your 
agency would so blatantly disregard this after following it for 
a number of years, I don't understand it.
    Secretary Bodman. First of all, just for the record, we did 
complete the 5-year plan for the NNSA, which is some $9 billion 
of the budget. So 40 percent of the budget of the Energy 
Department has a 5-year plan that has been submitted. On the 
balance of it, I plead guilty. It is between the department and 
OMB. It was a joint decision that has been made. I have no 
response to you other than that.
    Mr. Hobson. Well, we haven't see it, if there is one for 
NNSA.
    Secretary Bodman. Yes.
    Mr. Hobson. It isn't here, because I have asked my staff, 
and we have just asked here, they don't have it.
    Secretary Bodman. There is one.
    Mr. Hobson. Well, it would be nice--I mean, we only provide 
the money. It would be nice if it was shared at some point 
before we do something.
    Secretary Bodman. I understand.
    Mr. Hobson. I mean, this is just--you know how I feel about 
this, and we feel about this. This is a management tool to help 
everybody, and they have just blatantly disregarded it.
    Secretary Bodman. I can just tell you that the financial 
staff, and I am very proud of them----
    Mr. Hobson. I am glad you are.
    Secretary Bodman. Well, I am. They did a very good job of 
working on the budget and trying to get the 2009 budget right. 
I believe that we produced a very good document as a result of 
that, and it took maximum effort up until the very last minute 
to accomplish that.
    Mr. Hobson. But you are a businessman by background.
    Secretary Bodman. Yes, sir.
    Mr. Hobson. I can't believe that you ever ran anything 
without having a business plan.
    Secretary Bodman. That is correct.
    Mr. Hobson. Without having long-range plans, and that you 
put those down on paper so your management team knew where you 
were going and what you were doing.
    Secretary Bodman. I agree with that.
    Mr. Hobson. And you went to your finance people.
    Secretary Bodman. I agree with that.
    Mr. Hobson. You are now running an agency that can't do 
that. That is why the public has great distrust of government, 
is because we don't know what we are doing, and we don't put it 
out.
    Anyway, let me go on to another question here.

                             RED OIL AT MOX

    You know how I feel about MOX. There are reports that the 
Nuclear Regulatory Commission surfaced some concerns about the 
risk of red oil explosion at the MOX project as it is presently 
designed. What can you tell me about this problem and how DOE 
is addressing it in the design of the MOX facility. One of 
those things that I don't like is where you design on the fly, 
which got you in trouble out west, and you are doing it again.
    Does the Nuclear Regulatory Commission consider this issue 
resolved? I think the answer is no. The NRC is allowing the 
department to proceed with construction of the MOX plant with 
certain technical issues still unresolved. It is possible that 
the NRC may not be able to issue an operating license after we 
spend these billions of dollars for the MOX plant if this red 
oil problem is not resolved to NRC's satisfaction.
    What type of design work will need to happen to accommodate 
the red oil explosion concern, which I assume is going to cost 
us all more money. Please provide for the record a copy of all 
correspondence between the department and the NRC regarding the 
red oil issue. Also provide a copy of all internal DOE 
memoranda of communications, including e-mails on this issue.
    I think this is a very--and this is a dumb thing to say--
but a very explosive issue. We found out about this. Are you 
aware of this?
    Secretary Bodman. No, sir.
    Mr. Hobson. Well, frankly, sir, somebody should tell you 
about it, because it is a serious problem.
    Secretary Bodman. I know nothing about it, and I will be 
happy to try to provide a response for the record.

                             Red Oil Issue

    Materials related to the Nuclear Regulatory Commission technical 
issue with the MOX design and the possibility of a red oil explosion 
were supplied directly to the Energy and Water Development 
Subcommittee.

    Mr. Hobson. This is an explosive issue. It is a cost-
explosive issue and it may be a dangerous issue. We are 
continuing to build a plant and fund hundreds of millions of 
dollars into something that may have a serious design flaw in 
it right now. This is what is wrong with these--I can't think 
of the term right now. I don't like the way we build things in 
the government.
    Let me switch to another subject since you can't answer 
that one. This is my last one. You will be happy with that, for 
the moment.

                        PDCF MANAGEMENT TRANSFER

    You are saying that the NNSA Act prevents you from 
transferring projects such as MOX out of NNSA. We also 
transferred the pit disassembly and conversation facility, 
PDCF, from nonproliferation to weapons activities. This is all 
within NNSA. Has the management for PDCF been transferred to 
weapons activities yet? And if not, why not?
    Secretary Bodman. I believe that this activity, which falls 
within the nonproliferation area, is being managed in the 
nonproliferation area of the NNSA.
    Mr. Hobson. But we asked it to be shifted within NNSA.
    Mr. Visclosky. It is in the law to shift it. It is a 
defense program. It is not a nonproliferation program, and 
there was clear direction and it was in the conference report. 
It was in the omnibus bill and the President signed it into 
law. And we spent a year--a year--working on this issue to make 
sure that defense programs are in defense programs, and 
nonproliferation is nonproliferation, and energy is in energy. 
We wasted a year because energy has a legal department and they 
don't care.
    Secretary Bodman. They do care, sir. I would tell you that 
they care deeply about this. They are currently evaluating what 
is required in order to accomplish the change. The mere fact 
that the Congress decides to do something does not necessarily 
mean that I can do it. That is what we are examining.
    For example, I have been instructed to move the MOX program 
out of the NNSA to the Nuclear Energy Office. It turns out that 
I cannot do that, at least according to our reading of the law.
    Mr. Hobson. I understand that one. I understand you could 
have a question on it. I still don't agree, and lawyers can 
disagree.
    Secretary Bodman. Right.
    Mr. Hobson. And we will get into that one. But this one 
doesn't have that same thing. This is inside NNSA. This isn't 
the same question, sir. This is a different question. This is 
somebody just saying, ``we aren't going to do it.''
    Secretary Bodman. Sir, it is not a matter of saying that we 
are not going to do it, but I want to make sure that as we do 
it, we are accomplishing it in a legal fashion. That is what is 
going on here.
    Mr. Hobson. Well, what I am trying to say to you is there 
is not the same legal question.
    Secretary Bodman. I understand that.
    Mr. Hobson. One is, you are saying is in NNSA and out of 
NNSA. This one is all inside NNSA. There cannot be the same 
legal question there on that. It may be a different legal 
question, but it is not that legal question, and I don't think 
it is a legal question. I think it is an attitude in the 
agency.
    Secretary Bodman. It is not a matter of attitude, sir. I 
would tell you that. You may interpret it as such, but that is 
not the intention. I understand that, but I am just telling you 
that that is not the intention. The intention is to try to do 
this properly, and that is this activity reports to both the 
nonproliferation and to the defense programs, part of the NNSA. 
And therefore, is that now acceptable or is it not acceptable? 
It is that kind of a question.
    Mr. Hobson. I think there is a way to resolve this. Get a 
paper. We don't have any dialogue on this. We just get 
inactivity. If somebody would give us a paper, then we could 
begin a dialogue and try to work it out to where it gets 
acceptable.
    Secretary Bodman. To both sides.
    Mr. Hobson. Yes. And if we need to put something in another 
bill--I probably won't be here when that passes and neither 
will you--but we can get it done, because this is what the 
Congress, both the House and the Senate, said to do. This isn't 
something that we are doing unilaterally. This is a bill.
    Secretary Bodman. I understand.
    Mr. Hobson. So anyway, I hope you sense the frustration of 
the chairman and myself.
    Secretary Bodman. I do. I do.
    Mr. Hobson. I think, frankly, I am not going to speak for 
the chairman, but I think we feel a little had, especially this 
problem down at MOX. I acceded, and I stopped screwing around 
with MOX because a deal was made and I lived up to that deal.
    Secretary Bodman. Right.
    Mr. Hobson. But when I see this sort of thing happening, 
and I told you at the time, I think the expenses are going to 
go crazy down there. This is an ill-conceived project, in my 
opinion, but now that is coming true, I am afraid. Once we make 
a deal, I want it----
    Secretary Bodman. I agree with that. All I can tell you, 
sir, is that I will take a look at it personally and I will 
respond.
    Mr. Hobson. All right, sir. Thank you.

                        PDCF Management Transfer

    Materials related to the issues facing DOE in transferring 
management responsibilities of the pit disassembly and conversion 
facility from nonproliferation to weapons activities within the 
National Nuclear Security Administration were supplied directly to the 
Energy and Water Development Subcommittee.

    Mr. Visclosky. And for the record, I just want to make a 
note that the committee provided monies for these programs. It 
was not as though we eliminated funding. What we were trying to 
do is make sure there is segregation of programs by function.
    On MOX, I would express my support for the position that 
Mr. Hobson has taken. It is no secret I have had great 
reservations about the MOX facility as well. In the end, my 
Ranking Member, a good friend, was a gentleman about the deal 
and the agreement we had to proceed with MOX. We gave them the 
money, but we gave them the money and said, ``and you come back 
and you report regularly and you hit every milestone, and don't 
you mess up.'' And if people are going to mess up, then they 
still have a serious problem.
    Mr. Israel.

                             WEATHERIZATION

    Mr. Israel. Thank you, Mr. Chairman.
    Mr. Secretary, you can obviously detect a great deal of 
frustration and maybe even some distrust by the subcommittee. I 
think that the frustration and distrust isn't limited to some 
members of this subcommittee. I think it is felt by the 
American public at large. I will give you one example of where 
I think those anxieties occur.
    If you log onto the Department of Energy's Web site, you 
will learn from the Web site that weatherization reduces 
heating bills on an average of 31 percent, while reducing our 
reliance on imported oil. If you continue into the Web site, 
you will read that a 2002 DOE study documents, ``weatherization 
benefits to utility ratepayers, the economy and the environment 
that are in addition to the energy benefits that reduce the 
energy bills of low-income families.''
    And so on the one hand, the Department of Energy touts the 
benefits of weatherization, but in the Department of Energy 
budget there is a grand total of zero dollars for 
weatherization. The American public is paying three times for 
home heating oil what they were paying in 2001. Home heating 
oil costs have tripled since 2001 and the department is 
terminating the weatherization program.
    The department notes that the reason for this is that the 
department wishes EERE, energy efficiency and renewable energy, 
to focus on its core mission of advanced energy efficiency and 
renewable energy R&D. The department is terminating the 
weatherization assistance program to focus EERE on its core 
mission of advanced energy efficiency and renewable energy R&D.
    But then when you actually study the EERE budget, you learn 
that hydrogen is being cut 30 percent; solar is being cut 7.3 
percent; water is being cut 69 percent; industrial technologies 
are being cut 3.6 percent. So we are not focusing EERE on its 
core mission of renewable R&D. We are in fact cutting the 
budget for specific renewable technologies, while we are saying 
that we are actually increasing them.
    My question is, if in fact the department believes, as it 
must believe because it states on its Web site that 
weatherization reduces heating bills an average of 31 percent 
and that weatherization reduces our reliance on imported oil, 
and that weatherization provides benefits to utility 
ratepayers, the economy and the environment, and as the 
department knows, if home heating oil costs have tripled since 
2001, and if we are actually cutting specific renewable 
programs in the EERE, what is the rationale for terminating the 
weatherization program?
    Secretary Bodman. The rationale simply is the rate of 
return that we get. We get 20 for 1--$20 for every $1 we invest 
in the research programs. We get I think it is $1.50 return on 
the weatherization program. That is the rationale for the 
termination of the program.
    Mr. Israel. But then why are cutting hydrogen, solar, water 
and industrial technologies?
    Secretary Bodman. We are not cutting it. We are cutting it 
relative to the very generous budget that EERE got from 
Congress a year ago, but not from the request that we made a 
year ago. And so if you compare the request that we made a year 
ago to the request that we made this year, there is a 
significant increase. I don't happen to recall what it is, but 
we would be happy to get you the numbers. But that is the 
rationale, that there was a run-up in the size--I think it was 
$100 million increase in the budget for EERE that they got 
because of congressional interest in this matter.
    Mr. Israel. Mr. Secretary, you made the statement that we 
leverage far more in our research of renewable energy 
technologies.
    Secretary Bodman. That is correct.
    Mr. Israel. Congress agrees with you, which is why we 
plussed-up those numbers. And now you are saying that we ought 
to actually reduce the congressional levels.
    Secretary Bodman. It is not a matter of reducing them. This 
is a question of increases that are being put in place versus 
what we asked for a year ago. You know, that is all I can do. I 
have just been handed a note, we have increases in biomass, in 
wind, in geothermal, in building technology, and industrial 
technologies.
    Mr. Israel. Yes, you do. Well, no, you have decreases in 
industrial technologies, I believe.
    Secretary Bodman. Relative to what we asked for a year ago, 
sir.
    Mr. Visclosky. If the gentleman would yield?
    Mr. Israel. I yield to the chairman.
    Mr. Visclosky. Are gas prices lower than last year or 
relative to last year? Or are they higher? Are energy prices 
higher or lower?
    Secretary Bodman. I don't carry that number around, but I 
am sure they are higher.
    Mr. Israel. Mr. Chairman, do I have additional time? Mr. 
Chairman?
    What I hear you saying, and what I have heard you say for 
the past 45 minutes, is that Congress can tell me how they want 
to spend the money, but I will spend it the way I see it.
    Secretary Bodman. That is not what I am saying.
    Mr. Israel. The mere fact--in fact you said, really because 
Congress tells me what to do doesn't mean I can do it.
    Secretary Bodman. Well, in some cases, that is correct, 
witness the MOX program.
    Mr. Israel. I don't know if you want to go back there right 
now.
    Secretary Bodman. I have a law that I have to deal with. 
The law created the NNSA and the law limited, which was also 
passed by Congress and signed by the then-president that 
created the NNSA, prevents me from moving an activity from NNSA 
to any other part of the Energy Department.
    Mr. Israel. Mr. Secretary, do you know what the total 
amount for weatherization was last year?
    Secretary Bodman. It was about $250 million, I believe.
    Mr. Israel. Okay. Actually, it was slightly higher, but in 
the absence of that, what will the effects be?
    Secretary Bodman. A pretty good guess.
    Mr. Israel. Yes, not bad.
    Secretary Bodman. Thank you.
    Mr. Israel. What would the effects be, in your view, of 
terminating weatherization at a time when home heating oil 
costs have tripled?
    Secretary Bodman. The effects would be that a very small 
fraction of the houses that need to be dealt with won't be 
dealt with.
    Mr. Israel. So you can terminate the program in its 
entirety, and a small fraction of homes----
    Secretary Bodman. Yes, only a small fraction of the homes 
that are eligible get dealt with every year, even with $250 
million.
    Mr. Israel. How many American homes are under-insulated? Do 
you know? Do you have any idea?
    Secretary Bodman. I don't.
    Mr. Israel. Is 40 million inappropriate?
    Secretary Bodman. I would be happy to get you the numbers, 
but I don't happen to know that, sir.
    Mr. Israel. Do you know what the loss of residential 
electricity is as a result of under-insulation? I have heard 
about 17 percent. Is that accurate?
    Secretary Bodman. I have no idea.
    Mr. Israel. Okay. Would you have your department get you 
those numbers? I got those numbers.
    Secretary Bodman. I would be happy to give you our numbers 
and provide them for you and get them myself.

                       Residential Weatherization

    Approximately 19 percent or 20.3 million U.S. homes are reported to 
be poorly insulated, according to the Energy Information 
Administration. The Oak Ridge National Laboratory estimates that, on 
average, about 12 percent electricity savings per home is possible from 
adding insulation, although these savings vary widely by region. Each 
year, the Department's Weatherization Assistance Program only insulates 
a small fraction of the homes that need insulation.

    Mr. Israel. I am surprised, Mr. Secretary, that you would 
terminate funding for an entire program without knowing how 
many homes are under-insulated, what the residential electric 
loss is.
    Secretary Bodman. I can tell you that the number of homes 
that are eligible for this is far greater than the number of 
homes that are accommodated, even with the $250 million that we 
spend every year.
    Mr. Israel. Mr. Chairman, I will close just on this note. I 
understand your opinions, Mr. Secretary. I do find an 
inconsistency when you have a Web site that publicly touts the 
benefits of weatherization, and yet in testimony to this 
committee you say it is not that big a deal. Or when you have 
department information that says we are going to terminate 
weatherization in order to focus EERE on its core mission of 
advanced energy efficiency and renewable energy R&D, and then 
when you take down specific renewable accounts in the budget 
itself.
    To me, it is a matter of inconsistency, and quite frankly, 
it fuels the frustration that you feel in this subcommittee.
    I yield back my time, Mr. Chairman.

                              DOE MISSIONS

    Mr. Wamp. Mr. Secretary.
    Secretary Bodman. Mr. Wamp, how are you, sir?
    Mr. Wamp. I am fine. Thank you, sir. Thank you for your 
service.
    The very fact that oil is $100 a barrel and the subsequent 
price of gasoline is where it is and climbing, makes your job 
all by itself, let alone these other conflicts, maybe the 
least-enviable job in any administration. So thank you for 
serving during a very difficult time.
    Obviously, there is a rub, too, between the executive 
branch and the legislative branch, and I see that getting 
worse, unfortunately. OMB doesn't help that situation. Many of 
these decisions are somewhat out of your control. I am not 
defending you or the chairman and the ranking member. I am just 
telling you that I have been on this subcommittee for 11 years, 
and it seems to be getting worse, this division between the 
executive branch and the legislative branch. That is 
unfortunate.
    The interesting part about my parochial interest 
representing Oak Ridge is that we carry out a multitude of 
primary missions for the Department of Energy at my site, from 
national security under the NNSA to major science programs and 
environmental management and others. But those three major 
missions on any given year, there is always one that is in need 
of extra attention.
    So I want to focus on that particularly now. I want to say 
that the weapons and NNSA missions for the most part are funded 
in the budget request. Some changes could be made, but it is 
satisfactory. The science missions are also supported, and I am 
grateful for Orbach's leadership and for your commitment to 
science because, as you said a minute ago, the return on these 
investments is enormous for our country. Our competitiveness in 
the world is very important, and the administration has made a 
big issue out of that.
    I do want you to answer whether you expect the fusion-ITER 
mission to be funded in a supplemental request from the 
administration, because that is a question mark in the science 
world, which is are we going to honor our commitments or not, 
and will that be a supplemental request on science.
    But my major thrust, and I am just going to make this 
statement and let you answer, and I will be done, is with 
environmental management. This administration said we are going 
to have a program called accelerated cleanup. We are going to 
clean this up quicker to save money because everyone knows if 
you will go ahead and do it, you save this long-term $5.5 
billion annual obligation of the nuclear legacy in this 
country, and it is a mess.
    And there are conflicts between the states and the federal 
government. We have them in Washington state. We have them in 
Tennessee. We have the governors breaking bad on us once again 
for not meeting our milestone on agreements that the federal 
government has with the states about cleanups that will be 
made. I am sure Mr. Simpson is going to talk about this in 
Idaho.
    But the fact is, this is the lowest budget request for 
environmental management in 15 years. At my site, the gross 
amount is $100 million. The net amount is $50 million reduction 
from last year. And I am hopeful that the subcommittee will see 
fit to restore the money. But I just want to ask you to explain 
the challenges you face at trying to prioritize environmental 
management in your budget against these other issues, and if 
you think sometimes OMB just undercuts these requests, hoping 
that the Congress will put the necessary money in.
    I will yield the floor to you, Mr. Secretary.

                        ENVIRONMENTAL MANAGEMENT

    Secretary Bodman. Well, as we looked at the budget, we have 
a reduction in the overall money that we can spend in 
environmental management, as we have negotiated this out with 
our friends at OMB. It is a reduction, and therefore we have to 
make reductions. What we do is to try to look at areas that are 
not harmful to the American public, that are intended to have 
money spent on them, or at least the plan is.
    One of them is the so-called D&D accounts, the 
decontamination and decommissioning--the D&D account. 
Generally, those are buildings that are very old, that are 50 
years old or more, a number of which are at Oak Ridge. We have 
deferred those because they are not harmful to the environment.
    In Idaho, just to anticipate Mr. Simpson's questions later 
that I expect will be there, in Idaho it is the same kind of 
thing where we are looking at the salt-bearing waste material 
that is there, and it is stored and not harmful to the public 
as best we can tell. So we have deferred that for a couple of 
years, at least that is the plan in the budget.
    And so, it is strictly that. It is strictly trying to 
prioritize. We have increased funding for Oak Ridge in a number 
of areas in science and in other aspects. It is in that area 
that we have concluded that we don't need, or have an absolute 
need at this time to spend that money.
    Mr. Wamp. A quick followup just to say that this 
administration excited everyone across the DOE complex with a 
proposal called accelerated cleanup, literally saying we are 
going to throw the ball deep; we are going to cut these long-
term costs; we are going to spend more in the shortrun to save 
money in the longrun, and we are going to get our arms around 
this problem because this problem has been mounting and we are 
just stirring the pot and we are not really cleaning up the 
sites.
    And they set these goals. And it is called accelerated 
cleanup. I have to report, as the administration closes out, 
that I am concerned that my administration is going to end up 
with decelerated cleanup instead of accelerated cleanup because 
you just admitted you are deferring.
    Secretary Bodman. I fear that you are right.
    Mr. Wamp. Yes, well, that is unfortunate.
    Secretary Bodman. I was not the beneficiary of the 
acceleration.
    Mr. Wamp. I understand.
    Secretary Bodman. I was the beneficiary of the 
deceleration. So that we have been living with the commitments 
that were made by OMB to reduce budgets. That is what the 
commitment is and so we are living with it.
    Mr. Wamp. And I appreciate your candor, because it is 
brutal honesty, but I hope the subcommittee realizes the wisdom 
in going ahead and making these investments so we don't end up 
in legal conflicts with the states, so that we can honor these 
obligations, and in my site, so we can move on with what is 
called IFDP, the integrated facilities disposition plan, to 
take these World War II-era legacy buildings and get them out 
of the way and move on with cleaning up and meeting the water 
issues and the land issues with our states across this nuclear 
complex. You can't keep deferring this, but I do thank you very 
much for trying to get your arms around these difficult issues 
and for your appearance today.
    Thank you, Mr. Chairman.

                           PROJECT MANAGEMENT

    Secretary Bodman. If I may say, in contrast to the 
suggestions that were made by both the chairman and the ranking 
member, I do believe that the project management activities 
within the department are very substantially improved over that 
which I found when I got here. I think that even the GAO would 
even believe that, based on results that they have been 
discussing with my colleagues.
    Mr. Wamp. Thank you, Mr. Secretary.
    Mr. Visclosky. Mr. Hobson.
    Mr. Hobson. Mr. Secretary, one of the things that OMB is 
doing with the thing that you just talked about with Zach is 
increasing costs long-term, because those projects will go up 
in cost.
    Secretary Bodman. I agree with that, sir.
    Mr. Hobson. I want to get this in the record. I asked your 
people out there if they had a copy of the committee print and 
they don't apparently have it with them. It is surprising to me 
that nobody brought a copy of this important document, at least 
we so deem it.
    On page 478, and I am not going to ask you to do too much 
of this now because you don't have it in front of you, it 
clearly in law, not in just report language, says that 
$238,840,000 is authorized--authorized--to be appropriated for 
project 99-D-143 mixed oxide fuel facility, under the nuclear 
energy side, for the facility at Savannah River. And then it 
tells you to follow the law, the executive order 413.3(a). What 
I am trying to point out is that in law, you have an old law 
that is technically amended here, and the new law is what 
should be followed, not the old law.
    We don't have to debate this now, but I want your lawyers 
to read that and look at it, and then you come back.
    Secretary Bodman. We will be happy to do that, Mr. Hobson.
    Mr. Hobson. And we can talk about this, because this is in 
law, sir. This is not report language, which you all say, well, 
we don't have to follow report language. But I am going to tell 
you frankly, if this administration continues to do what they 
are saying and not follow what is in report language whenever 
they don't want to, then you are going to lose a lot of 
flexibility that you have now, because Congress is going to 
frustrated and they are going to put everything in law, and 
then you lose. You lose.
    Anyway, this is in the record, and I want this in the 
record, to understand that this is a serious matter. We moved 
it. It is authorized. The money is there. This is not in report 
language, and so there can't be this--it is a later law.
    Secretary Bodman. I understand that it is later. Our 
position is that that moves the money, but it does not move the 
management responsibility for the project. The management 
responsibility resides in the NNSA, and I am unable to move it.
    Mr. Hobson. [OFF MIKE]
    Secretary Bodman. No, I understand that.
    Mr. Hobson. [OFF MIKE]
    Secretary Bodman. Well, it is not a matter of the attitude, 
sir. It is just a matter of what is acceptable under the law. 
That is all.
    Mr. Hobson. Well, as interpreted by your lawyers.
    Secretary Bodman. But I want you to understand, Mr. Hobson, 
that the intention----
    Mr. Hobson. You guys didn't want to do this. We understand 
that. We know you didn't want to do this.
    Secretary Bodman. No, it is not a matter of that. It really 
isn't. We will do it. I mean, if that is something that is 
important to this Congress, then we will do it. That is not the 
issue.
    Mr. Pastor. [OFF MIKE]
    Secretary Bodman. Apparently, it is.
    Mr. Hobson. It was everybody's intention to do this, sir, 
and we feel that there has been every intention--because we 
know there was push-back not to do this. But we did it and the 
Senate agreed to it and you guys agreed to it, and then after 
the fact, somebody goes around--I mis-spoke. I don't want to 
say you agreed to it, but you got it. And then they set about 
in our opinion to find a way not to do it because they really 
didn't want to do it. We thought it was best that that money be 
somewhere else.
    Secretary Bodman. I understand that. I would just say to 
you, sir, that is not the way it has been presented to me. It 
may be that that is the intention, that there is some deep 
sinister plot of which I am unaware. I am telling you that I am 
not aware of it.
    Mr. Hobson. Well, I am not sure it is a deep sinister plot, 
but we think it is a plot.
    But anyway----
    Mr. Visclosky. Mr. Simpson.
    Mr. Simpson. Welcome to the committee, Mr. Secretary.
    Secretary Bodman. I am happy to be here, sir.
    Mr. Simpson. It is a good day, isn't it?
    It is a happy time. I know it is.
    It is kind of interesting listening to the discussion. You 
know, if the department doesn't want to do something--and I am 
not saying this is the case--an attorney can make the case, we 
can find a way that we won't be allowed to do it, or if an 
attorney wants it, we can find a way that the department will 
do it. They can find a way to make it happen, seems like all 
the time. But I don't want to get into that.

                         OMB BUDGET DISCUSSIONS

    I want to raise a couple of other questions. First of all, 
can you give us a copy of the original budget submission that 
the department made to OMB?
    Secretary Bodman. No, sir.
    Mr. Simpson. Is there a reason for that? Is this classified 
as top secret?
    Secretary Bodman. Sure. Well, it is not a matter of that. 
It is a question of a discussion that is made, that goes on 
between OMB and the department.
    Mr. Simpson. I have asked--in fact, I have----
    Secretary Bodman. And out of that comes a single budget.
    Mr. Simpson. You see, Some secretaries have given it to me, 
and some said they couldn't. Some say that I have to get it 
from OMB.
    Secretary Bodman. I see.
    Mr. Simpson. The reason I ask that is not because I am 
trying to put any pressure on the department or on the 
administration or anybody else. It is because if this committee 
decides to have an allocation in Energy and Water of more 
money, I would like to know what the professionals within your 
department thought would be the place to spend it. That comes 
from looking at the original request and what you thought was 
important and where it was cut back because of your 
negotiations with OMB.
    I know that goes on. It has to.
    Secretary Bodman. Sure.
    Mr. Simpson. They have a responsibility to try to balance 
the budget. I am not trying to jump on their case or on the 
department's case. I just want to know what the department felt 
was the appropriate funding when they originally made the 
request.
    Secretary Bodman. We would be happy to work with you, sir, 
on that as a general matter. But I am not going to give you the 
specifics of whatever budget proposal we made to OMB.
    Mr. Simpson. Interesting. You don't want Congress to know 
too much. It might be dangerous.
    Secretary Bodman. Well, it is not a matter of that. There 
is one budget that comes out of the administration.
    Mr. Simpson. I know that and I know you have a 
responsibility to defend it. I am not saying that if you give 
us the other stuff, you are not defending the president's 
administration, because part of the total budget process is 
determining what the bottom line is going to be. You don't do 
that. OMB does that. We understand that.
    Secretary Bodman. That is correct.
    Mr. Simpson. But we don't have to follow OMB.
    Secretary Bodman. I understand that.
    Mr. Simpson. We have other responsibilities also.
    Secretary Bodman. I understand that, but I do.
    Mr. Simpson. I know that, but all I am saying is we have 
other things. If you want us to act in an intelligent way and 
make intelligent decisions, we need to have access to what the 
professional people within your department think.
    Secretary Bodman. And I would be happy to provide that to 
your staff if you would like that.
    Mr. Simpson. Yes, I would like that.
    Secretary Bodman. All right, let's do it.

                               AFCI FUNDS

    Mr. Simpson. Let's go back to another question that has 
come up. I am curious about the language that was in the 
omnibus appropriation bill that says the department is directed 
to make 50 percent of the AFCI funds for research and 
development in an agency-wide solicitation for universities, 
national laboratories and commercial entities, and we were 
supposed to have a national competition for that.
    There is $180 million, $30 million of which was earmarked 
for hot cells. Of the remaining $150 million, the language 
directed $75 million of it to be competed.
    Secretary Bodman. Right.
    Mr. Simpson. If I have this correct, one-third of the year 
was over by the time the language was passed by Congress, so if 
you spent on a steady line, you have spent about $37.5 million 
of that by the time the language comes out.
    Secretary Bodman. Right.
    Mr. Simpson. Leaving $112.5 million, and now $75 million of 
that has to be competed. How long does it take to complete a 
process of deciding how you are going to go about the 
competition, get the competition done, and so forth, so that 
you could actually compete it? Because what I am wondering is--
--
    Secretary Bodman. It takes 6 months.
    Mr. Simpson. So if you started the day that the 
appropriations passed, we are into three-quarters of the money 
being spent if the programs that are already being funded are 
done.
    Secretary Bodman. That is correct.
    Mr. Simpson. So there is not $75 million left. So 
essentially, you are going to have to start de-funding some of 
the programs that are going on currently right now, or stop 
those programs, in order to save the $75 million to be competed 
in the last quarter of the month.
    Secretary Bodman. That is correct.
    Mr. Simpson. And that is the problem the department has 
with being able to do it?
    Secretary Bodman. That is correct.
    Mr. Simpson. I understand the differences between the 
committee wanting to get something done and just saying ``do 
it,'' and the department having the difficulties of doing it.
    Secretary Bodman. It just takes a while. It is not that 
there is an opposition to competition. There was a genuine 
sense that the universities, the national laboratories and 
private industry would each be competing among themselves 
because they were doing different work. The staff of this 
committee held and said, that the committee explained to our 
staff that the committee felt otherwise; that the committee 
felt that it ought to be an across-the-board competition, so we 
had to start over. So starting over adds more time, but we have 
attempted to do that, sir.
    Mr. Simpson. Have you started?
    Secretary Bodman. There is not an intention to subvert the 
wishes of this committee.
    Mr. Simpson. Have you started to put out proposals, or are 
you in a process like that for the competition or anything?
    Secretary Bodman. We are going to be several months away 
before we put out proposals and ask for--that is what takes a 
while.
    Mr. Simpson. Have you notified those programs that 
currently are spending money under the AFCI that they are going 
to be de-funded or funding is not going to be available because 
you are going to have to reserve $75 million of that for 
competition?
    Secretary Bodman. No. The answer is no.
    Mr. Simpson. But that will be coming, won't it?
    Secretary Bodman. It presumably will be.
    Mr. Simpson. Do you know what that means in terms of 
layoffs at those facilities that are currently operating?
    Secretary Bodman. It is going to be substantial. I don't 
happen to know off-hand. We are trying to avoid doing something 
dumb like stopping funding for something that is going well.
    Mr. Simpson. I understand that. And I understand there is a 
difference between what the committee and we have put in the 
report language, and what is able to actually get done.
    Well, I want to work with you and see if we can resolve 
those differences so that we don't disrupt work that is 
continuing, and still try and meet the intention of the 
committee that we have some competition out there for that. It 
may be that some of that competition has to move into next year 
and into the next year's budget.
    Secretary Bodman. I think that is where it is going to be, 
but we will do our level best to try to accomplish that which 
is the intention of this committee.
    Mr. Simpson. I appreciate that.

                         ENVIRONMENTAL CLEANUP

    The EM budget--as you know, some of us have some real 
concerns with it and the amount of money for cleanup, 
particularly at sites that have been successful like Idaho and 
Oak Ridge, is down. And with last year's budget and again this 
year, it almost seems like the more successful you are, the 
more you are going to get cut the next year.
    Secretary Bodman. That is not the intention.
    Mr. Simpson. I know, but it is the result.
    Secretary Bodman. Well, I think that where we have been 
successful, that means we have accomplished something and that 
means that there is less threat to the environment and to the 
people who live in and around there, as opposed to things like 
Hanford, which is the issue that I think Ranking Member Hobson 
mentioned before. At Hanford, there is the risk of getting 
chromium and other very serious matters into the Columbia River 
that flows right by there. I mean, that is the issue. How do we 
stop that? And so we have turned our attention more to that 
than to the so-called accounts.
    Mr. Simpson. Certainly, though, it creates uncertainty 
within the various cleanup projects around the country, and you 
are looking at employment and trying to maintain a steady 
workforce to do the cleanup responsibilities that they have. 
What does the reduction in the EM budget do to meeting the 
milestones of the state agreements that the DOE has? Are you 
going to have to renegotiate any of those agreements?
    Secretary Bodman. I am sure we will. Furthermore, there is 
a reduction in some 200 jobs that will be in Idaho. Had we just 
applied that $70 million across the board, I think it would 
have been something like, I am told, 400 or 500 jobs. So this 
would save some 300 jobs--500 minus 200--of highly qualified 
people that will continue the work in this endeavor. But we 
will defer the construction project, the salt waste-bearing 
project, by a couple of years.

                          MILESTONE AGREEMENTS

    Mr. Simpson. What does it do to the milestone agreements 
between DOE and the state? Because it has always been--for 
those people that are opposed to the Idaho Lab or opposed to 
anything nuclear always use that as their banner--that DOE 
doesn't meet its milestones. Quite frankly, they have done a 
pretty good job. What is it going to do to the milestones in 
the future?
    Secretary Bodman. I don't have that answer off-hand, but I 
would be happy to get it for you. I can give it to you in 
total. We are going to miss in 2009 about 32 milestones. About 
two-thirds or three-quarters of those, I think 23, are due to 
the budget numbers that you see there. But we are going to have 
10 or 11 that would be there anyway.
    Mr. Simpson. Is that the issue?
    Secretary Bodman. Yes, sir. And in 2008, it is some 16 
milestones that we will miss. Again, it is about two-thirds or 
three-quarters--I think it is 12 of those that are budget-
related in the 2008 budget.
    Mr. Simpson. Is the DOE paying fines and penalties for 
missing any of the milestones? Are any of the agreements 
imposing those?
    Secretary Bodman. Yes.
    Mr. Simpson. How much are we paying in fines?
    Secretary Bodman. I don't have that answer, but I would be 
happy to get it for you.

                  Environmental Management Milestones

    Fines and penalties are typically addressed in our agreements with 
state and federal regulators. Where fines and penalties were allowed, 
the governing statute or regulatory agreement usually establishes the 
maximum fine or penalty that can be imposed. From the beginning of 
fiscal year 2006 to the present, there have been four instances in 
which fines have been imposed for missed milestones. Three of those 
have been at Los Alamos, one for $345,000 that was paid by the 
contractor, one for $405,000 that DOE paid, and one that is still 
accruing for a milestone due in November 2007 that has not been 
completed yet. The fourth instance was at Hanford, where DOE paid a 
$75,000 fine in January of this year for missing two milestones related 
to the K Basins, but is seeking reimbursement from the contractor.

    Mr. Simpson. Because it seems like we would be better to 
plus-up the EM budget to the extent we could to try to meet 
those milestones, rather than paying penalties along the way.
    Secretary Bodman. I agree with that.
    Mr. Simpson. I guess that is one of the things that bothers 
me about not being able to see what the DOE originally wanted 
in terms of budget. OMB comes in and sometimes they don't know 
what they are doing, more frequently than not.
    Secretary Bodman. If I may say, the question that ought to 
get asked is how much money does it take to avoid missing these 
milestones in 2009.
    Mr. Simpson. And that is an excellent question.
    Secretary Bodman. That is the operative question.
    Mr. Simpson. Can you give us that information, of what your 
estimate would be?
    Secretary Bodman. We are working on that number.
    Mr. Simpson. Do you have a flow chart where you take all of 
the waste within the DOE complex and where it is to be disposed 
of? Do we have the capacity to dispose of it at those 
locations? What is the timeframe for doing that? What is the 
cost of doing that? Do you have a flow chart that outlines all 
that kind of stuff?
    Secretary Bodman. We have reports. I don't know that we 
have a flow chart that summarizes that in that fashion.
    Mr. Simpson. I am a picture guy. I would like to see that 
so I can wrap my mind around what some of these things are in 
the future and how long we are looking at, and frankly whether 
we have the capacity for all the storage that we are going to 
need.

                           Milestones Summary

    We have complex-wide management plans and process flow diagrams for 
the various waste types resulting from our cleanup programs. The data 
are derived from our project baselines, provide life-cycle estimates, 
and are updated annually. The Waste Information Management System 
(WIMS), which generates waste life-cycle disposition maps for the 
Department's low-level and mixed low-level radioactive waste, is 
available on the Internet (http://wims.arc.fiu.edu/WIMS/).Later this 
year we will add transuranic waste data to this system. Currently, the 
disposition maps cover a timeframe through 2050. EM's validated 
baselines include summary-level costs for the out-years, which includes 
costs for disposal of waste. These cost estimates vary but in recent 
years have been approximately 15 percent of EM's total annual budget.
    We currently have adequate capacity to dispose of the majority of 
our low-level, mixed low-level, and transuranic waste at the 
Department's disposal locations. We also utilize commercial disposal 
facilities for some low-level and mixed low-level wastes. Those waste 
streams that are without a disposal path today are well known and we 
are actively working to identify disposal options. My staff can work 
directly with the Committee staff to determine the best way to 
demonstrate WIMS and provide additional complex-wide process 
information.

    Secretary Bodman. The ultimate issue is that we are going 
to need Yucca Mountain. That is really what this comes down to.
    Mr. Simpson. Sure.
    Secretary Bodman. Mr. Hobson just said, we are not going to 
have Yucca Mountain.
    Mr. Simpson. Then we are in big trouble.
    Secretary Bodman. Well, what we can do is to, on Yucca 
Mountain, our commitment is even with the $100 million 
reduction in funding that we got from Congress, we are 
committed to filing an application for a license with the NRC 
this year. We will hope to do that.
    The other issue I would raise is that it is not just 
important to file. It is also important to get it docketed, 
that is to say to have the NRC say that the application is 
sufficiently complete that it can be evaluated by the NRC. That 
is a process called docketing, meaning that they will put it in 
their queue and manage it as such. So that takes a matter of 
months afterward. We would like to get all of that done on our 
watch if that is possible. But we are committed to file the 
license application this year.

                            DOD LIABILITIES

    Mr. Simpson. Trying to put everything in its proper place, 
like EM stuff within EM, and NE stuff within NE, there is a 
proposal to transfer liabilities for DOD responsibilities that 
are currently under NE to EM. Are we moving along with that 
process? Is that going to get done? I know just transferring 
the liabilities doesn't mean anything if you don't transfer the 
money to actually do the cleanup.
    Secretary Bodman. I don't have an answer. I don't know 
that. I would be happy to get you that.

                          Liability Transfers

    The Department began the process last year of determining the 
appropriate transfer of environmental liabilities between DOE program 
offices by requesting nominations from the Office of Science, Nuclear 
Energy and the National Nuclear Security Agency. These program offices 
have nominated materials for transfer, including spent nuclear fuel and 
some radioactive materials, in conjunction with excess contaminated 
facilities. This is a complex issue involving many of the Department's 
offices in addressing the requirements to handle these materials. The 
Department plans on taking a corporate approach to address these 
liabilities during the FY 2010 budget formulation process.

    Mr. Simpson. One last question.
    Secretary Bodman. Yes, sir.

                           PROJECT MANAGEMENT

    Mr. Simpson. Project management.
    Secretary Bodman. Yes, sir.
    Mr. Simpson. Every year we complain about DOE being on the 
GAO list of inability to complete on-budget, on-time any major 
projects. I understand some of the issues are relative to the 
fact that you have projects that are sometimes big and complex 
and unknown, like the waste treatment plant in----
    Secretary Bodman. It is also that they are one of a kind.
    Mr. Simpson. Yes, one of a kind.
    Secretary Bodman. That is the problem.
    Mr. Simpson. And that makes them very difficult. But what 
are you doing within the department to try to get off the GAO 
list of worst-performers? What are we doing to try to make sure 
that we do a better job?
    Secretary Bodman. We are working with the General 
Accountability Office, with GAO. They have given us five 
criteria that they view as important. One is leadership. That 
is to say that the leadership of the department understands the 
importance of project management. Two, that there is an effort 
related to continuous improvement. Third, that there is a root-
cause analysis of what the problem has been. Fourthly, that we 
have a program for staffing, increasing the staffing capacity. 
And fifth is results--that it works.
    Those are the five things. Of those, as I understand it, 
they have given us good marks on the first two, that we have 
strong commitment of the leadership of the department and that 
we have seen a continuous improvement in our project management 
skills.
    We have a root-cause analysis, a report which is due out 
next month. That will lead to the fourth, namely increases in 
staffing. You will notice that there is an increasing in 
staffing required, or that is proposed to the Congress in the 
2009 budget. We believe that this will lead to improved 
results, so that over time we can see our way clear to getting 
improvements.
    I think we are on a path, notwithstanding the doubts that 
were expressed by the chairman and the ranking member as we 
began. I believe that we are on a path of, if not getting off 
the list, and frankly, our folks met with OMB and concluded we 
are never going to get off the list, but that is sort of a 
fixation in their mind that we are there forever. But I do 
believe that we will see very significant improvement in the 
results that we have. I believe that we are on the right path.
    When I got here, most of the people who were running these 
very large one-of-a-kind projects weren't even certified as 
project managers. They hadn't been trained. It wasn't their 
fault. We do have standards now and they are trained. We have 
programs now and we are getting these people trained and 
focused and on top of it. So I feel much better personally 
about this than was expressed by the ranking member and by the 
chairman in their opening remarks.
    Mr. Simpson. Thank you.
    Mr. Visclosky. I am going to recognize Mr. Rehberg.
    I just want to follow up for 1 second. I regret, and I 
think Mr. Hobson does, that you don't have enough money this 
year for Yucca. Obviously, the House position was different. We 
had a conference and it is what it is, because for all of the 
disagreements that were expressed. That is not your burden. It 
is all of our burden.
    Secretary Bodman. Yes, it is.

                               WATCH LIST

    Mr. Visclosky. There were not enough monies expended, and I 
certainly regret that. It is what it is.
    Because I want to get to Mr. Rehberg and other members who 
haven't asked, but on the issue of the watch list, and I would 
also acknowledge that as far as the certification process, the 
Department has made progress, and GAO suggests that is the 
case. But I would point out the department has been on the 
watch list since 1990. If there is a watch list, there must be 
some way not to either ever be on it or to get off of it, and I 
am assuming there are other departments that are now off, and 
if there are criteria that the department is following through 
on to improve management.
    I would acknowledge that have been improvements, that there 
ought to be additional efforts to continue to improve because 
somehow yourselves and I assume other agencies have made it 
onto that list--in this case back in 1990--because of all these 
criteria that are formulated for that list, at some point there 
is a way to get off.
    Secretary Bodman. I hope so.
    Mr. Visclosky. And sooner rather than later after 18 years.
    Secretary Bodman. Thank you. I remain ever hopeful that 
that will be the case, and we are working as hard as I know how 
to work in order to try to bring about improvements of the sort 
that you alluded to. These were the five criteria--leadership 
and continuous improvement.
    Root-cause analysis, that report will be due out. That is 
to say, we are looking hard at how did we get here and what 
were the real causes of the box we find ourselves in. Then it 
is really staffing and training, so the capacity of the staff 
to function. And we have money in the budget to increase that 
focus.
    And then lastly, results. Are the projects coming in? We 
have, for example, in the last 2 or 3 years, we have brought 70 
percent of our projects into completion within 10 percent of 
the cost. That is the goal that use. CD-2 is the time that we 
make the decision and we lay the baseline for what the cost is. 
That is at the beginning, and in 70 percent of the cases we are 
bringing in our projects to completion--this is over the last 3 
years--within 10 percent of budget.
    That is pretty good. I mean, at least it is much better 
than it has been in the past. It is not 90 percent and it is 
not 95 percent, but it is 70 percent. It is a lot better than 
20 percent or some number that is significantly lower.
    Mr. Visclosky. Mr. Rehberg.
    Mr. Rehberg. Thank you, Mr. Chairman, and thank you for 
helping me in my endeavors to make the committee healthier, and 
for pointing out the level of intelligence of people moving 
from Montana to Washington to work.
    I might point out that I made the top half of the class 
possible in Montana. If it hadn't been for me, she would not 
have been ``summa'' anything.
    And congratulations to you. I have never served on a 
committee where we have 100 percent attendance, so you must be 
doing something fairly controversial.
    Secretary Bodman. It has to be controversial.

                               FUTUREGEN

    Mr. Rehberg. It seems to be a lack of support, I think, but 
it is noticeable. Obviously, my concern--and we don't need to 
talk today about the things that are going right within the 
department. I am sure there are one or two, but we need to talk 
about the areas where we have differences.
    Obviously, my biggest difference is what has happened 
within the FutureGen program within the Department of Energy. 
As I look at the decision that was made, it kind of reminds me 
of why I am glad this Department of Energy didn't have anything 
to do with NASA because the department would have divided NASA 
up into five or six different little missile programs within 
individual states and said, ``go forth, young guys, and see if 
you can compete with the Russians and good luck.''
    We have a program that is in place. The FutureGen Alliance 
is working. We have quite a number of private entities who have 
invested a lot of capital. We have dealt with India and China. 
We have had a lot of excitement about FutureGen. We finally 
went through the selection process. We found a site in Mattoon, 
Illinois.
    Everybody is kind of focused on the ability to share 
technologies with foreign countries. I have never seen a level 
of cooperation quite like this, and I am a businessman by 
trade. Obviously, I have not been in government all my life. It 
was a pretty exciting private-public partnership.
    And you guys really threw some cold water on the project. 
What business model or what brainiac sitting within the 
department has made the determination that it is better to 
divide it up and to lose all this cooperation and go contrary 
to what some of the best minds, who happen to be in the utility 
industries throughout the country, are saying is really a 
stupid thing, in backing off and delaying.
    Before I have you answer that question, I just want to read 
something that was actually in my local newspaper today. This 
is in Great Falls, Montana: USDA pulls plug on Highwood 
financing. You don't know anything about Highwood, but it is a 
coal-fired generating plant that does not have sequestration.
    Secretary Bodman. This is USDA?
    Mr. Rehberg. USDA. We would like to have sequestration of 
some components. You see, what they are doing is they are 
looking for RUS, which is Rural Utility Service funding for the 
project, and the Bush administration made it clear that none of 
the money that has been appropriated through the Department of 
Agriculture for the RUS, which is $7.1 billion, none of the 
money can be spent on new coal-fired generating plants nor 
nuclear plants.
    I could make that argument with the Department of 
Agriculture and the Bush administration, aside from you, but 
let me just read what it said in the paper just today: ``The 
financing development for the Highwood project comes amid 
increasing scrutiny nationwide of public and private financing 
for coal-fired power plants. Earlier this week, a Cambridge, 
Massachusetts-based company called Synapse Energy Economics, 
which provides regulatory advice to private and government 
institutions, released a report blaming skyrocketing 
construction costs''--which will now even be exacerbated by 
your department's decision to change directions--
``skyrocketing, regulatory uncertainties''--which is further 
exacerbated by your lack of ability to get the record of 
decision out on NEPA since December, which we are still waiting 
for that--``and environmental concerns making investment in 
coal-fired power plants less attractive.'' The report said 20 
coal-fired power plants were cancelled in 2007, and three dozen 
more were delayed.
    So again, I ask you then, under what business model, who 
has come up with the concept that we have been trucking along, 
everybody is cooperating, everything is going just fine--there 
are some delays, but frankly some of them are created by your 
department--why the change?
    Secretary Bodman. The change, sir, was done initially 
because of the increase in cost of the FutureGen project, which 
went from $950 million, and that was the number that was there 
when I arrived, it increased to $1.8 billion and was going, in 
my judgment, up from there for the reasons that your newspaper 
just alluded to.
    We also had changes in the marketplace. A number of 
states--Florida, Kansas, the State of Washington--have declined 
permission for utilities to build coal-fired power plants 
without carbon sequestration. We looked at all of that and 
looked at the fact that there seemed to be more interest in 
IGCC--integrated gasification and combined cycle--projects than 
there had been before.
    And therefore, we were on the hook for three-quarters of 
that money, of the $1.8 billion--about $1.3 billion or so. I 
didn't have $1.3 billion. The idea is to try to work with the 
utility industry in order to develop two or three separate 
carbon sequestration projects where that is where the money 
would go. So they would put the money up to build an integrated 
gasification combined cycle plant, and we would----
    Mr. Rehberg. The difficulty when you talk about the 
utilities----
    Secretary Bodman [continuing]. And we would spend the money 
on the CCS.
    Mr. Rehberg. But you have the utility companies--the big 
guys in the program--telling you that is not the direction to 
go. So yes, maybe the State of Florida and its government is 
saying they don't want it built, but the utilities are saying 
you are killing us out there because we finally get to the 
point where Texas and Illinois were willing to work with their 
legislatures to get their laws changed, to work with their 
environmental community, to work with all the entities that 
would be involved to have it located at their site--they 
finally get it done, and you take the legs out from under them, 
and then tell them to go out and stand on their own two feet. 
And they just can't do that.

                               FUTUREGEN

    Secretary Bodman. That particular project, sir, involved 
not just CCS, but involved an advanced system of first adding 
steam to the gasified coal, separating out the hydrogen using a 
metal filter, if you will, that would allow the hydrogen to 
move out and to maintain the carbon behind, and then to 
sequester the carbon dioxide following that. It involved a lot 
more than just CCS.
    Mr. Rehberg. The difficulty is when you finally come to a 
point where you are able to monitor the emissions from whatever 
plant, it would make a determination as to whether it is 
environmentally acceptable, wherever you are doing it--whether 
it is in a stream or whether it is internally. Don't kid 
yourself. Now that we have gone down this path and we have 
identified a near-zero emissions opportunity using the 
technologies within FutureGen, if you can come up with any 
technologies and support any technologies, short of what we 
know, you have just created another opportunity for a court 
case.
    Secretary Bodman. I guess I would respectfully differ with 
you. I think that where we are focusing strictly on CCS and 
sequestering the carbon dioxide, and that we do it in two or 
three different geologies, rather than just doing it in the 
state of Illinois, but the state of Texas or wherever, that we 
are better off. We learn more and we get it done faster.
    Mr. Rehberg. Why would any business trust the Department of 
Energy and want to go into any kind of a public-private 
partnership if 5 years down the road, they are moving along, 
they have worked with the legislature, you have this huge 
effort, and then you change directions and say, ``oops, you 
know, we just don't like the cost.''
    Again, let me ask you, where is the record of the decision? 
We are waiting. It is sitting over in your department. It was 
due mid-December.
    Secretary Bodman. We do not plan to issue the record of 
decision.
    Mr. Rehberg. This goes back to Representative Simpson's 
point. Once an agency decides they don't want to do something, 
they just don't do it, thereby stopping it in a different way. 
So even if we were to try and overcome the president's 
objections, there will be impediments in the way because you 
are not going to release any record of decision, which is 
integral to the continuation of the FutureGen program.
    Secretary Bodman. As far as I am concerned, sir, we have 
altered the direction of FutureGen along the lines that I have 
already alluded to.
    Mr. Rehberg. That is distressing.
    Thank you, Mr. Chairman.
    Mr. Visclosky. Mr. Rehberg, I come from Gary, Indiana. We 
don't have coal in my congressional district. We have a lot of 
it in the state. We use a lot of it, between five integrated 
steel mills and an oil refinery. We use carbon. And so I am a 
strong advocate of research as far as how do we unlock the BTUs 
in coal and how do you capture and sequester.
    I would make the observation, and it was during a hearing 
last year when you were not on the subcommittee. We had a 
member of the department come up, and I do remember, all 
kidding aside, we had to pull Mr. Simpson back off of the 
podium when the gentleman persisted in suggesting that the cost 
of this program had not gone up past $950 million--and he said 
it about three or four times, and of course, he is no longer 
with the Department of Energy--in constant dollars.
    There was a subsequent communication to the subcommittee 
that the actual cost was now about $1.7 billion going north. 
And that this could not go on forever. Even without getting 
into particulars, it is also my sense--and I am not saying 
everybody has clean or dirty hands here--that it takes two 
parties here, and whether or not the alliance itself was 
willing to be flexible and to look at the realities of the 
situation that they faced.
    So I am not in disagreement with the decision that the 
Department made. How the Department proceeds obviously is 
something that we will have to continue to pass judgment on and 
monitor.
    Mr. Hobson. You were not always negative.
    Mr. Visclosky. No, and I do feel compelled because when we 
disagree, I certainly make it known, but in this case I do 
think the department acted appropriately because the costs of 
this project had gone out of control, and to get results on the 
coal side.
    Mr. Rehberg. And I entered into this knowing of your 
position. I followed the media coverage during the process. The 
difficulty is, it is the same parties that we are going to ask 
to cooperate in the future. And frankly, I wouldn't want to do 
business with this department for these reasons. It is a level 
of credibility, and once you destroy your credibility, you 
never get it back. This is just one of those examples.
    I just happened to be in the real estate development 
business. The costs are killing us out there for construction 
costs. So I have some sympathies for the companies as well. 
They are looking at decisions that the federal government is 
making on things like asphalt, which is directly tied to crude 
oil, which is something that they have to pay for.
    So in looking at the complexity of it, it cannot be made 
from a regulatory, bureaucratic position because these are 
companies that are out there having to try and produce 
something for their customers at a reasonable price. In my 
particular case, the Highwood plant is 60,000 of my Montana 
households. It is five rural utilities in Great Falls, which is 
the third-largest city in my state. Are they going to be 
without power as a result of a decision at the Bonneville Power 
Administration in 2012?
    So any delay is going to create a crisis. So yes, maybe 
$1.8 billion sounds like a lot and going north, but that is 
just life right now, based upon what we are paying for natural 
gas and for crude oil and all the other things that go into 
construction costs. So I am not sure we can necessarily blame 
the companies or pass that cost on to the companies because 
ultimately it is a bigger decision being made by the federal 
government to be so dependent on foreign sources for our energy 
and such.
    So any delay, whether it is 1 year or 5 years is going to 
have a substantial impact on people in homes, and I am going to 
be sitting before you and asking for more money for LIHEAP, or 
going over to Labor-H and asking for more money, because they 
just will not be able to afford their home heating costs.
    Mr. Visclosky. I appreciate that.
    Mr. Rehberg. Thank you.
    Mr. Visclosky. Mr. Ryan.

                             DUF6 PROJECTS

    Mr. Ryan. Thank you, Mr. Chairman.
    I have a couple of questions, and I am going to be brief 
because I have to get to another hearing, but I am a rookie 
here so the chairman saved me for last.
    One of the issues is one of these DUF6 projects in 
Portsmouth, Ohio. There is one in Paducah and there is one in 
Portsmouth.
    Secretary Bodman. Right.
    Mr. Ryan. If you could give us an update on it. There have 
been a lot of notices with cure notices, baselines changed, and 
we are not obviously getting the kind of production down there 
that we want.
    Secretary Bodman. Yes, sir. We have two due dates. One I 
think is May or June of this year. The other, the new date is 
now December of this year for the two plants. I think the first 
is in Portsmouth and the second is in Paducah, or vice versa. 
We have had enormous difficulty bringing the contractor to 
heel, if you will, to get them to commit to it. All I can tell 
you is that those are the dates that are now given to me. If 
you asked me how much do you believe them, I would tell you I 
think we are probably going to slip it even beyond that by 3 or 
4 months.

                              CONTRACTORS

    Mr. Ryan. Let me ask you this question. What do you do with 
these contractors? Is there anything that you are doing as far 
as having them on some kind of list? Because what the problem 
is, they keep backing us up on a project like this, and then 
they end up getting other contracts to do other things. It 
seems to me that----
    Secretary Bodman. All can do is to try to prevent them 
from, for example, if they were committed to operating this 
facility after constructing it, then you could raise the 
question of should that happen. I will tell you that that issue 
has been raised and is under negotiation.
    Mr. Ryan. How about constructing another facility at some 
other time?
    Secretary Bodman. Same idea----
    Mr. Ryan. But is there a formal process that you have in 
place?
    Secretary Bodman. I don't know. I would be happy to look at 
that and sit down with you.
    Mr. Ryan. I yield to my friend.
    Mr. Hobson. It is how you write contracts, too. One of the 
things that is a problem in contracts generally from agencies 
is that their penalty clauses are not good. I am not blaming 
you for this personally.
    Secretary Bodman. I understand.
    Mr. Hobson. This is a problem with how we draw up 
government contracts. There is no real penalty people for 
exceeding the contracts, and there is no penalty in the future 
to them for exceeding contracts. That is what I hope someday 
that you will get at before you leave is how you draw 
contracts. It is not good. It is bad in the Department of 
Defense. I mean, it is terrible in the Department of Defense. 
It is outrageous. Yours is easier to fix, I think, but nobody 
reads them until there is a problem and the taxpayer loses.
    Secretary Bodman. I will look at it.
    Mr. Ryan. I appreciate that.
    Secretary Bodman. Yes, sir. And we will respond to you in 
terms of the questions you asked.

                            RENEWABLE ENERGY

    Mr. Ryan. I know Senator Brown has been very involved in 
this, too. I mean, this is a major issue for southern Ohio, so 
we want to make sure this doesn't happen anywhere else.
    We have a couple in northeast Ohio, a few General Electric 
plants, that are closing down, moving, due to the whole China 
incandescent light bulb situation. My question is, because I 
look at your zeroing out of the renewable energy production 
incentive, have you ever met with the CEO of General Electric 
or anybody from General Electric to just sit down and say, hey, 
what can we do to help you stay here in the United States, to 
be competitive here?
    I mean, the whole debate going on now in the presidential 
election, you know, we are talking about NAFTA from 1993. But 
those of us who represent these areas, we need to plug these 
areas back in. And a lot of people say, well, that is 
globalization. Half of the country is missing out on the boat 
here. I just want to know if you have done anything, or your 
office has met with a major----
    Secretary Bodman. I met with the head of nuclear power at 
General Electric and talked to him on exactly what can we do to 
be helpful. He has given me his views.
    Mr. Ryan. Is this constructive--the zeroing out of the 
renewable energy incentives? Wouldn't that be a part of any 
kind of long-term----
    Secretary Bodman. When you say ``zeroing out'' of the----
    Mr. Ryan. Renewable energy production incentive--100 
percent cut from $5 million in 2008.
    Secretary Bodman. I don't know what that number is.
    Mr. Ryan. I mean, this is kind of a philosophical thing. 
Are we going to do everything we can to help keep these 
companies here, especially if they are going to stimulate new 
production and new ideas here in the United States. It seems to 
me to cut that, it seems counterproductive.
    Secretary Bodman. I don't have an answer to that. I would 
be happy to get it for you.

                 Renewable Energy Production Incentive

    The Renewable Energy Production Incentive (REPI) provides financial 
payments for electricity generated and sold by new qualifying renewable 
energy generation facilities. Since FY 2005, the average annual 
appropriation for REPI has been about $4.9 million.
    The incentive value of REPI has diminished over time as renewable 
energy technologies have reduced in cost and become more competitive. 
Other factors, such as state initiatives and policies like Renewable 
Portfolio Standards, have further reduced the value of this program. 
The growing pool of eligible applicants has resulted in increasingly 
smaller amounts which can be paid out, given the limited availability 
of funds to distribute.
    In addition, REPI participants are eligible for Clean Renewable 
Energy Bonds (CREBs) which stimulate new renewable electric capacity by 
reducing finance costs and therefore make projects more cost-effective. 
In 2006, the Internal Revenue Service reported that borrowers submitted 
applications for about $2 billion to finance 701 projects with an 
average project size of $2.9 million. Such projects can have a 
significant local economic impact.

    Mr. Ryan. Is there a plan that you have long term? I mean, 
obviously you are in your final year here, but is there some 
kind of strategy from the executive side to say, hey, what can 
we do? I mean, we do this in the local community all the time. 
If a company talks about leaving, you get the county 
commissioners, you get the state delegation, you get the state 
incentives, and you say what can we do to keep you here. It 
seems like we are not getting that same kind of initiative at 
the federal level.
    Secretary Bodman. Our focus, frankly, is on the science, on 
the environmental management. As I have described this 
department, we are the nerds of the federal government and I am 
the chief nerd. We develop processes. We develop equipment. We 
don't do it perfectly. We are well behind where we should be in 
project management, as you have heard. But that is what we do. 
That is what we are good at.
    It is the Commerce Department, it is the Labor Department, 
it is others who work on specifically that area that you just 
alluded to. It is not something that the Energy Department 
does. Maybe we should, but we don't.
    Mr. Ryan. If you are working with GE, and you see the 
commercial all the time--desalination. They are doing this, 
they are doing that. I mean, it seems like you should be 
involved in this to help steer this company back to where they 
have been for 100 years. I am not a dinosaur. I understand what 
the global economy looks like, but they are going to do this 
somewhere, and if they feel like they have a partner with the 
Department of Energy, I think it would be a little more 
productive.

                           ENERGY EFFICIENCY

    I have one final question, Mr. Chairman. With schools, we 
had the Secretary of Labor on our other subcommittee a few days 
ago, and we were talking about making these schools energy 
efficient, almost using the schools as a laboratory for these 
kids to understand long-term, and even work on some projects 
with the schools. She mentioned a program in the Department of 
Energy. I haven't had a chance to do any research on it.
    Secretary Bodman. We do have such a program.
    Mr. Ryan. What is that program like? Do you know what the 
funding is and what is the basic mission?
    Secretary Bodman. The funding is of modest size--that is to 
say it is a few million dollars, I believe. For example, I was 
down in the city of New Orleans. We have announced our 
availability to help with the design and construction of any 
new building or any addition to current buildings, so that they 
can be more energy efficient. The Secretary of Education and I 
visited a facility over here in Virginia.
    This is an important matter that we pay a lot of attention 
to, namely energy efficiency. We do have a buildings program 
within the EERE.
    Mr. Ryan. There is not a whole lot of money in that, 
though.
    Secretary Bodman. No, but there is some. The idea is to 
develop building designs that are more accepted on a broader 
basis. I was in Orlando the week before last, where we 
announced a charge to the homebuilders of America. It was the 
National Association of Home Builders. There again, they are 
undertaking--I think we now have a commitment to build 200,000 
homes over the next 4 or 5 years to standards that are much 
more energy efficient than they have been in the past.
    So we are doing everything we know how to do within the 
constraints of finances. We have even had a marketing effort, 
believe it or not, within the department and have spent $1 
million, for which we have been criticized by some members of 
this committee. But we have focused our attention on buying 
television time. Disney had the movie Ratatouille, and I think 
``Louie'' was the rat that wanted to be a chef. For those of 
you who are young enough to have children----
    Mr. Simpson. [OFF MIKE]
    Secretary Bodman. Well, I have never seen it, but I can 
tell you that, anyway, the rat is in the cartoon and he is 
trying to convince the kids of America to get their parents to 
buy compact fluorescent lights; the idea being that if you 
install compact fluorescent lights, they are efficient and they 
work. They help save energy and they are more efficient. So we 
even have a modest marketing effort. We are doing everything we 
know how to do.

                             WEATHERIZATION

    Mr. Ryan. I don't know if I agree with that, because I have 
heard some of the comments here today and read through the 
budget a little bit. I think the weatherization stuff--that is 
critical stuff. That is not to be taken lightly.
    Secretary Bodman. I understand.
    Mr. Ryan. I understand. You say that is $1.50 for every $1 
you spend?
    Secretary Bodman. It is $1.50 for every $1 we spend, and it 
is $20 for every dollar we spend on our research programs, we 
think.
    Mr. Ryan. What does that mean? I don't understand that--
$1.50 for what?
    Secretary Bodman. It is the rate of return that we get, 
that the country gets, from both the research effort and----
    Mr. Ryan. What is your process? What is your formula for 
determining that?
    Secretary Bodman. The study of the research programs is 
done as a result of work of the National Research Council, who 
evaluated the research programs.
    Mr. Ryan. I would like to see that, because that is mind-
boggling to me because there were 80-some thousand families who 
will qualify this year for the weatherization from last year's 
budget, or something like that, and to cut their energy costs 
by one-third, that is a significant amount of money. If you 
take 80,000 households and cut their energy bill by one-third 
and it is only a few million bucks that we are spending.
    Secretary Bodman. I would be happy to get you the numbers.
    Mr. Ryan. I would be happy to look at that. All right.
    Thank you, Mr. Chairman.
    Mr. Visclosky. Thank you, Congressman.
    Mr. Ryan. Thank you, Mr. Secretary.

                    Weatherization Investment Return

    The 2005 Oak Ridge National Laboratory (ORNL) metaevaluation on the 
Weatherization Assistance Program (``Estimating the National Effects of 
the U.S. Department of Energy's Weatherization Assistance Program With 
State-Level Data: A Metaevaluation Using Studies From 1993 to 2005,'' 
ORNL-CON-493, September 2005) found first-year per-household energy 
savings for gas heated homes averaged 30.5 million Btu. Using natural 
gas price projections from EIA resulted in an energy savings benefit/
cost ratio of 1.34. Based on updated price and cost data for 2006 and 
2007, ORNL calculated the current benefit/cost ratio of 1.53 for the 
Weatherization Assistance Program. The metric of a 20 to 1 return on 
R&D investment was derived from a National Research Council study 
(``Energy Research at DOE: Was It Worth It?'' National Academy Press, 
2001).

    Mr. Visclosky. I am going to proceed. Mr. Simpson, if you 
at any point have questions yourself or want to jump in, please 
do. Mr. Hobson and I both have a defense hearing he is going to 
go to now.

                             WHISTLEBLOWERS

    Mr. Secretary, I have a couple of questions on 
whistleblowers. Last year, we had a series of questions and you 
did answer for the record very specifically, and I appreciate 
that. But I will read from last year's record, and this regards 
whistleblower litigation: The Department of Energy has 
reimbursed contractors $7,983,956 for the cost of defending 
litigation by whistleblowers in the last 5 years, from October 
1, 2001 through September 30, 2006. During fiscal years 2002 
through 2006, DOE made three reimbursements for whistleblower 
cases in which the judgment was in favor of the plaintiff. In 
those instances, DOE reimbursed contractors $350,489. During 
fiscal year 2002 through 2006, DOE contractors reached 
settlements with plaintiffs in 19 whistleblower cases before a 
final ruling. In those instances, DOE reimbursed contractors 
$4,523,073.
    There was reference made to Title 48 of the Code of Federal 
Regulations, 931.205-47(h) which at (2)(iii) requires a 
contracting officer to determine allowability of defense 
settlements and award costs on a case-by-case basis, after 
considering the terms of the contract, relevant cost 
regulations, and relevant facts and circumstances, including 
federal law and policy prohibiting reprisals against 
whistleblowers. And then it continues.
    I have a question for the record asking for an update as 
far as the costs of reimbursement to contractors. The policy 
issue I have, and particularly given the code of federal 
regulations that talk about this being case by case, whether 
the Department of Energy or any other department or 
institution, public or private, at times there are things that 
are untoward that occur, particularly in some of the programs 
that DOE is involved in where you have huge safety issues, 
health issues, public policy issues.
    Secretary Bodman. Cyber-security issues.
    Mr. Visclosky. Cyber-security issues. I alluded to it with 
Mr. D'Agostino last year in an NNSA hearing, where one of the 
managers said, ``If I was doing it, there would be blood on the 
floor.'' Of course, in the end, there was a jury award of over 
$4 million for the employee, but the attitude was ``you told on 
us, you told on us.''
    I have a concern about where the loyalties lie, in that if 
something has gone wrong and it is brought to light, I would 
hope that the first impulse of people is that, well, one, if it 
is in fact true, we should investigate whether it is, or 
potentially you have a disgruntled employee. If it is, we ought 
to correct the problem, as opposed to ``you are gone.''
    The concern I have, and I appreciated the answer last year, 
is if the government is reimbursing the contractors, where the 
contractors are settling with plaintiffs because of employment 
actions or jury awards, what is the incentive for the 
contractors at DOE to behave themselves, if we as a government 
and taxpayer are going to reimburse them to pay plaintiffs to 
settle cases?
    From a policy standpoint, I find that a very troubling 
policy. I can see even--and I am not saying I would support 
it--but reimbursement for litigation if in fact there was no 
substance to the claim. But where you have had settlements, 
where you have had jury awards, and then the government 
reimburses as a business expense the contractors, I am troubled 
by the policy. And it is not just at DOE, but it is obviously 
within your jurisdiction.
    Secretary Bodman. I am, too. I don't have an answer for 
you, sir, other than saying that I, too, share your concerns. I 
think it is important to try to protect whistleblowers. I do 
know that I get inquiries made of me by disgruntled employees, 
and I as a rule make it a program to investigate in so far as 
discussing the nature of the issue and of the complaint with 
the under secretary involved who oversee whatever laboratory--
and it is typically a laboratory-type person.
    So I share your concern. I don't have anything further to 
say other than that.
    Mr. Visclosky. Do you think we should change that policy?
    Secretary Bodman. I don't know. That is a fair comment. I 
don't know. I simply don't know about the nature of what is in 
the contracts. We have so-called M&O contracts that govern the 
relationship between the laboratory and the contractor that is 
responsible.

                         CONTRACT REIMBURSEMENT

    Mr. Visclosky. There was an interchange between myself and 
Mr. D'Agostino relative to a former employee, Sean Carpenter at 
Sandia. At about this time last year, there was a jury award 
for $4.6 million in Mr. Carpenter's favor. At the time, 
D'Agostino when I asked if that was going to be reimbursed to 
the contractor--$5.6 million--and accordingly whether the 
punitive damages, which were $4 million, are allowable will 
depend on whether Mr. Carpenter's termination resulted from 
compliance with specific terms and conditions of the contract.
    We are currently analyzing this issue. Again, my concern is 
where you had a jury and a court impose punitive damages, not 
just somebody made a mistake, and that somebody in the 
Department, well, we are looking to see about the specific 
terms and conditions of the contract with the contractor. It 
raises a serious question about what the hell these contracts 
look like as far as the allowable reimbursement.
    Secretary Bodman. I agree with the thrust of your question, 
your inquiry, but I simply don't know, nor do I have an update 
in terms of the numbers. I should have that and I will happily 
provide that to you.
    Mr. Visclosky. It is a question for the record as far as 
the last 24 months, and then specifically relative to Mr. 
Carpenter, because subsequently there has been an additional 
change. On September 26 on the Carpenter case, of 2007, a 
settlement agreement was executed by the parties. The question 
is, and again for the record I would appreciate it, did DOE 
reimburse Sandia Corporation for the amount paid to Mr. 
Carpenter pursuant to that settlement.
    Secretary Bodman. I don't know.
    Mr. Visclosky. Just so you have a sense, we have a series 
of three votes in a number of minutes. I would like at some 
point then we would recess and come back, simply because we do 
have some additional questions. We have about $25 billion on 
the table.
    Secretary Bodman. I understand that.

                         STOCKPILE STEWARDSHIP

    Mr. Visclosky. Last year in doing our work on Stockpile 
Stewardship, there was a proposal last year to build a 
replacement warhead. The Committee went to great pains to 
suggest that the administration, and in this case the Secretary 
of Energy, the Administrator of NNSA, the Secretary of Defense, 
Joint Chiefs of Staff and the Intelligence Community, join 
together to develop and submit a comprehensive Nuclear Weapons 
Strategy for the 21st Century.
    During testimony on the issue on March 29, General 
Cartwright did indicate that strategy did not exist at that 
point in time. You did have the AAAS indicate that as far as 
what that strategy should look like, the panel believes that 
the plan for nuclear weapons enterprises must have a clear 
rationale on a bipartisan basis if it is to be sustained over 
25 years, through a number of administrations and dozens of 
Congresses, recognizing that circumstances change, not, if you 
would, the policy of a particular administration, but of the 
country.
    There was House report language that was referred to in the 
conference. I am wondering where are you and the Department, as 
well as defense and the intelligence community, in developing 
that strategy? Because obviously, we have an issue as far as 
the Stockpile Stewardship program and the size of the complex. 
My thought is, until you know where you are going----
    Secretary Bodman. No, I understand, and they are in the 
process of doing that--``they'' meaning the NNSA working with 
the Defense Department, working with the State Department. 
There is a so-called ``white paper'' that is being developed.
    I also think there is going to be a meeting on a number of 
these issues with the laboratory heads meeting with you this 
afternoon, as I understand it.
    Mr. Visclosky. Mr. Secretary, there was going to be a 
meeting. That is now cancelled simply because we will be done 
voting shortly for the week, and most members will be unable to 
attend, but I would want to be clear for the record that the 
direction is for the national government, on behalf of the 
country--not a particular administration--have a strategy in 
place, although we appreciate the fact that----
    Secretary Bodman. I understand. The idea was to do a 
classified briefing for you and other members of the committee. 
There is a white paper that is being developed that is due out 
I believe later on this summer, I guess.

                                  GNEP

    Mr. Visclosky. On the GNEP facilities, in the 2008 
appropriations conference report, there is language saying that 
funding under this in the amended bill provides $181 million 
for the Advanced Fuel Cycle Initiative. Of this amount, $151 
million is for continued research and development on spent fuel 
recycling and advanced reactor design, and no funds are 
provided for facility construction--and I would emphasize those 
words--for technology demonstration or commercialization.
    In the 2009 budget request, there are funds requested of 
$33.4 million for transmutation research and development which 
would fund site evaluation infrastructure design to support a 
nuclear fuel recycling center and advanced recycling reactor 
which, if brought to fruition, would be two construction 
projects.
    Secretary Bodman. That is correct, but it is only design. 
It is the development of, and it is not monies for 
construction, which I believe was the intent of Congress.
    Mr. Visclosky. There is no construction money.
    Secretary Bodman. That is right.
    Mr. Visclosky. The budget request $53 million for advanced 
fuels research development testing, which includes funding to 
continue to do all cost, scope and schedule information for 
transient test capability. Would that be ultimately a physical 
facility that would be constructed? I am not suggesting you are 
going to build it in 2008.
    Secretary Bodman. I don't know.
    Mr. Visclosky. Okay.
    Secretary Bodman. I would be happy to respond to that.
    Mr. Visclosky. Okay. The budget also cites the need for 
improvements in existing DOE laboratory facilities, and 
certainly for the record, I would ask which laboratories, for 
what purposes, and how much. By inference, at least, that would 
also be--and I am not saying you want to do construction in 
2008--but construction.
    Secretary Bodman. This is not intended to be construction 
in 2008.
    Mr. Visclosky. I understand that.
    Secretary Bodman. It is the 2009 budget.
    Mr. Visclosky. Right. And you have a 2009 budget request 
for $10.3 million for a first-of-a-kind world-class nuclear 
fuel cycle research development and demonstration facility, 
which would be another construction project in 2009.
    Secretary Bodman. In theory, that is correct. I don't think 
that is counter to the intention of Congress.
    Mr. Visclosky. It is not counter to the intent, but there 
is some intent involved when we are suggesting you have monies 
for research and investigations, but also you are getting all 
set to build five facilities, and not in 2008, but setting the 
stage, when Congress over the last 2 years, if I am correct, 
has reduced the administration's request for their funding. 
Again, it is kind of sending a signal here, but it would appear 
that people are going ahead and getting ready to build four or 
five projects.
    Secretary Bodman. We are trying to spend the money in as 
intelligent a way as we can. In part, that would be designing 
facilities. But if you wish us not to design facilities, then 
we ought to know that.
    Mr. Visclosky. I guess I am suggesting that Congress said 
no construction and you are not constructing, but you are----
    Secretary Bodman. Sometimes Congress changes its mind, sir. 
I would observe. It doesn't happen often, but sometimes.
    Mr. Visclosky. Sometimes we do.
    Secretary Bodman. And therefore we want to try to be ready. 
That is all.
    Mr. Visclosky. Okay. Good answer. It is my understanding 
that the department's environmental impact statement for 
greater than class C waste includes waste volumes generated 
that are prone to a nuclear fuel cycle research, development 
and demonstration facility. Is that correct?
    Secretary Bodman. I don't know the answer to that.
    Mr. Visclosky. If you could answer for the record.
    Secretary Bodman. I would be happy to.

                      Nuclear Fuel Cycle Research

    As a specific action being considered in DOE's Programmatic 
Environmental Impact Statement (PEIS) for the Global Nuclear Energy 
Partnership (GNEP) program, construction and operation of the AFCF may 
be reasonably foreseeable. Under the National Environmental Policy Act, 
agencies must consider the reasonably foreseeable actions that could 
contribute to cumulative impacts. The waste volume estimates developed 
by DOE for the GNEP research facility are based on conceptual 
engineering design and past operating experience. We believe these 
estimates are reliable for the purposes of analysis in the greater-
than-class C (GTCC) EIS.

    Mr. Visclosky. And if it is affirmative, wouldn't it seem 
to be optimistic, considering where you are, that you are 
already planning on the waste stream from these facilities?
    Secretary Bodman. This is on GNEP?
    Mr. Visclosky. Yes, sir.
    Secretary Bodman. GNEP is intended to reprocess spent fuel. 
So that is what is referred to, I believe. The idea of GNEP is 
two-fold. One is to do the necessary technical work that is 
required to clean up and to prepare the fuel for use in a fast 
reactor, and then to design the fast reactor, et cetera, et 
cetera. So that is one piece of it.
    The other piece is to try to organize internationally, and 
we have been very successful in doing that. I think we have 21 
or 22 countries signed up now. That is very encouraging.

                              GNEP TRAVEL

    Mr. Visclosky. Mr. Secretary, if we are talking about, 
then, the travel relative to GNEP, the department has 
apparently indicated that given the level of congressional 
funding, there may be layoffs relative to this program.
    Secretary Bodman. Relative to GNEP?
    Mr. Visclosky. Yes, sir.
    Secretary Bodman. I am unaware of that.
    Mr. Visclosky. I stand corrected.
    Secretary Bodman. No, I am not saying you are wrong. I am 
just saying I am unaware of that. My colleague just reported to 
me, sir, that if we were to cancel the research work that is 
ongoing related to GNEP, in order to compete it, and it was 
done ahead of time--along the lines that were mentioned to the 
congressman--that there would be some layoffs by definition. If 
that is the case, and if people would stop doing the work. I 
don't have the numbers off-hand of what they would be.
    Mr. Visclosky. If I can get back to the travel. Last week, 
the committee requested a detailed listing of foreign travel 
conducted in relationship to GNEP.
    Secretary Bodman. Right.
    Mr. Visclosky. And asked if we could have it 2 days before 
the hearing. We got that last night. We would want to know, and 
would be happy to have it supplied for the record, what is the 
total number of foreign trips taken in which GNEP was one of 
the principal trip purposes?; what are the list of destinations 
for the GNEP-related trips? We have at least one here where 
someone spent a month apparently in France--must have been an 
extensive conference.
    How many DOE federal employees and contractors engaged in 
such foreign travel? What were the total costs of such GNEP-
related foreign travel? And how were those costs distributed 
among the nuclear energy, nuclear defense and nonproliferation, 
departmental administration, and other relevant appropriation 
accounts?
    If you could for the record, what is your specific 
statutory authorization to engage with any foreign countries or 
enlist foreign partners for GNEP?
    Secretary Bodman. What is my----
    Mr. Visclosky. Your statutory authority.
    Secretary Bodman. Okay. I don't know.
    Mr. Visclosky. And what specific appropriations, if any, 
were made available for any foreign activities under advanced 
fuel cycle or GNEP?
    Secretary Bodman. We would be happy to provide all that for 
you.
    Mr. Visclosky. Okay.

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    Secretary Bodman. I have what you have at least--I think a 
list of numbers of trips done by nuclear energy, by NNSA, and 
by the management office. It is about $1 million for the 
nuclear energy; $34,000 for NNSA; and $13,000 for the 
management office.
    Mr. Visclosky. Mr. Secretary, I have not a lot, but some 
additional questions to ask. We will have a series of three 
votes here and be back as quickly as possible. We will be back.
    Secretary Bodman. Do you have any estimate of what your 
timing would be?
    Mr. Simpson. About 45 minutes.
    [Recess.]

                           SPENT FUEL STORAGE

    Mr. Simpson. How much are we spending to pay utilites to 
store fuel that we were supposed to take over? Because of the 
agreement. Do you know how much were the payments in penalties 
to pay those utilities?
    Secretary Bodman. I do not.
    Mr. Simpson. Are they paid by the judgment fund?
    Secretary Bodman. That comes out of the judgment fund in 
the Justice Department.
    Mr. Simpson. I would be interested in knowing what we are 
paying in total penalties and what it is costing those 
utilities to maintain those storage facilities and keep that, 
if part of it is penalty, if part of it paying for it, or 
whatever. At some point in time, it is better for us to take it 
over, and cheaper probably to take it over, which gets to Yucca 
Mountain.
    Secretary Bodman. With respect to Yucca Mountain, that 
which I haven't said, sir, before, but I would say it now, we 
need access to the waste fund that is in the Treasury.
    Mr. Simpson. Right.
    Secretary Bodman. That has been an ongoing discussion that 
we have had with our friends at OMB.
    Mr. Simpson. We had a hearing in the Budget Committee last 
year on all of these funds, these dedicated funds, not only 
within the nuclear waste fund, but others. Unfortunately, they 
are being used to offset the size of the deficit and we are not 
spending those monies--harbor maintenance funds--you go through 
them all; transportation fund. And I think you are going to see 
us maybe hold some hearings on that within some of these 
committees. If we are not going to spend it on what it is 
appropriated for, then we ought to not collect it.
    Secretary Bodman. As a citizen, sir, I agree with you.
    Mr. Simpson. Yes. So we are going to be looking at that, 
and I know you need access to that. We directed you in our 
report language last year to start looking at interim storage. 
What are we doing with that? Are we going to have a report on 
interim storage?
    Secretary Bodman. We have a report coming out. When is the 
report on interim storage? We do have a report coming and we 
are working on it, as directed by the Congress.
    Mr. Simpson. Okay.
    Secretary Bodman. We are not opposed to it. We are not 
trying to stiff the committee.

                             YUCCA MOUNTAIN

    Mr. Simpson. All we are looking at, frankly, is if Yucca 
doesn't open--and as you know, it has problems. We are at a 
stage where we were at one time with the WIPP plant. Nobody 
thought WIPP would open and all that kind of stuff, and we are 
kind of at the same stage right now with Yucca Mountain, 
although it probably poses more challenges.
    I am one that firmly believes we have to have Yucca 
Mountain open and we need to do everything we can to make sure 
it is open, and we need to put the resources there to do it and 
make sure that is open on time, even though I know Nevada has 
the ability to block it in some respects, but I think we can 
get around those.
    Since the space available will only be for half of the DOD 
waste, what are we doing looking for the next available Yucca 
Mountain?
    Secretary Bodman. We will have a report on the next 
available Yucca Mountain that we are committed to getting done 
on our watch--that is to say during the course of this year we 
will have a report. It is going to be later on this year that 
we would have a report on a list of states where--and I take it 
there is an understanding that it would be on the other side of 
the Mississippi River, I guess. At least as I understand it, 
that was the understanding with Congress some time ago.
    So I repeat, the hope of GNEP, the goal of GNEP is to 
deliver a process technology that would substantially reduce 
the toxicity and the quantity--mostly the toxicity--of the 
waste that comes out. In other words, we would burn the 
actinides.
    Mr. Simpson. And the next Yucca Mountain would be years 
down the road.
    Secretary Bodman. Well, in fact, if we were to move ahead 
in a smart fashion, Yucca Mountain would serve for the balance 
of this century, or close to it.
    Mr. Simpson. Right, which is why I think the reprocessing 
is vitally important.
    Secretary Bodman. It is very important.
    Mr. Simpson. It is one of the reasons, besides the fact 
that most of the energy is left in the fuel rods.
    Secretary Bodman. It is just in a different chemical form.
    Mr. Simpson. Exactly. Thank you.
    Mr. Visclosky. Mr. Secretary, I don't have any further 
questions of you. I understand you have an appointment at 12:15 
p.m.
    Secretary Bodman. Yes, sir.
    Mr. Visclosky. I just would make a couple of observations. 
I am 58 years old. I have been at this a long time. I used to 
be on a congressional staff and I can remember when my mentor, 
Mr. Benjamin, who chaired the Legislative Branch Subcommittee, 
would have witnesses stay until 4:30 in the afternoon on 
relatively small accounts because his budget was well under $1 
billion.
    I don't want to hold you up from your meeting, but I would 
just make a couple of observations. We have some very 
significant other issues to cover, and you do have a budget of 
$25.014 billion.
    Secretary Bodman. Right. I understand that.
    Mr. Visclosky. That is a lot of money for 3 hours worth of 
hearings.
    Secretary Bodman. Yes, it is.

                         STOCKPILE STEWARDSHIP

    Mr. Visclosky. And I would simply point out that the depth 
of my concern here is severe. I have made my position known on 
issues such as Stockpile Stewardship, which I support.
    Secretary Bodman. Right.
    Mr. Visclosky. But my upset that about the time when four 
major complexes are about to be finished, all after their time, 
all over budget. They were taking a hard turn in the road, at 
least proposed by the administration--well, let's just build a 
new warhead. And then to find out from a briefing paper that 
was handed me this morning that one of those four facilities 
that is not even done yet, that was pursuant to stockpile 
stewardship, is now slated to be closed in 2025.
    I mean, why are we spending money?
    Secretary Bodman. I have no idea. What facility is it?
    Mr. Visclosky. It is the Dual Access Radiographic Hydro-
Test Facility that is now apparently slated to be closed. It is 
not even done being built and we are going to close. And we are 
building these four facilities for Stockpile Stewardship, and 
then the administration makes a hard turn and says, well no, 
let's go build a warhead.
    I also would point out that we had testimony before the 
Committee--and this is a serious fundamental issue with 
billions of dollars at stake--as far as the size and the 
configuration and the location of the weapons complex. It was 
indicated to us, without a great deal of I thought urgency, 
that it was going to be downsized and reconfigured by the year 
2030, and this brochure was handed to us in the year 2006.
    I do know that given the controversies between this 
subcommittee and the administration over the last year, that 
that complex has been changed. Now, now there is no deadline at 
all. It is simply complex transformation. We would like to have 
a whole series of questions about those, but they can wait as 
well.
    So we have a vote, and you have a meeting, so we will 
adjourn the hearing.
    Secretary Bodman. Thank you, sir.
    [Questions and answers for the record follow:]

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                                           Thursday, March 6, 2008.

   DEPARTMENT OF ENERGY--ENVIRONMENTAL MANAGEMENT, LEGACY MANAGEMENT

                               WITNESSES

JIM RISPOLI, ASSISTANT SECRETARY OF ENERGY FOR ENVIRONMENTAL MANAGEMENT
MICHAEL OWEN, DIRECTOR, OFFICE OF LEGACY MANAGEMENT

                 Chairman Visclosky's Opening Statement

    Mr. Visclosky [presiding]. I would like to call the 
committee to order. This afternoon, we are honored to have 
Assistant Secretary for Environmental Management James A. 
Rispoli. He is accompanied by Mr. Michael Owen, Director of the 
Office of Legacy Management.
    Before we go any further, I do want to thank you because 
typically we do not start hearings at 3 o'clock in the 
afternoon, but I hope you appreciate, given the schedule we 
have, that we are compelled to do so.
    I also do want to thank my colleagues very much, because we 
are done voting for the week, but nevertheless you are in 
attendance, and I really appreciate that very much.
    Mr. Rispoli, the total Environmental Management budget for 
fiscal year 2009 is $5.5 billion, a reduction of $167 million 
from the budget the president recently signed for 2008. Most 
disturbingly, the fiscal year 2009 level of funding will, and 
this is quoting Secretary Bodman, not meet some of the 
milestones and obligations contained in all of the 
environmental agreements that have been negotiated over many 
years with regulators. Again, the Secretary said that last week 
during his hearing, as well as according to your testimony.
    Unfortunately, the budget request does not indicate what 
milestones will be missed or the consequences of missing them, 
so we will spend some time today going over that. I know that 
during your 10 years as Assistant Secretary, you have been 
working very hard to rectify a very chaotic project management 
system. Understandably, it will take several years for your 
initiatives to be fully embraced and implemented.
    In the meantime, we continually hear from our valued 
partners at the Government Accountability Office that project 
management standards are still not being applied, such as the 
case of the balkanized project at Hanford. Increasingly, policy 
decisions are overtaxing existing projects such as the decision 
to run H Canyon another decade at Savannah River and its impact 
on the operations of the finely balanced liquid waste 
management system.
    Sometimes the lack of decision exacerbates management of 
projects, such as an unclear path for low activity waste at 
Hanford, which has significant impacts on the schedule and 
costs of getting the work done.
    These are some of the items I would like to cover with you 
here today.
    Mr. Owen, you manage the sites when the cleanup has been 
complete, including the management of the pensions of former 
workers. We are interested in hearing from you today about your 
organization and the challenges you are facing in the future as 
more sites cross the finish line.
    Mr. Rispoli and Mr. Owens, I ask that you ensure that the 
hearing record of the questions for the record and any 
supporting information requested by the subcommittee are 
cleared through the department and the Office of Management and 
Budget and delivered in final form to the subcommittee no later 
than 4 weeks from today.
    All members of the Committee who have additional questions 
for the record should submit them to the subcommittee offices 
by noon tomorrow.
    With those comments, Mr. Hobson, if you would have any 
opening statement you would care to make, I would recognize 
you.

                     Mr. Hobson's Opening Statement

    Mr. Hobson. Thank you, Mr. Chairman.
    I want to welcome Assistant Secretary Rispoli and Director 
Owen for what will probably be their last appearance before 
this subcommittee, and this is probably my last appearance here 
in this chair with you at this time. Both of you bring a 
Department of Defense-style of project management and business 
practices to the organizations in DOE, and while everything is 
not as rosy as we would like in those programs, they are 
certainly better managed than they were before your 
involvement.
    I want to thank both of you for your dedicated public 
service and your efforts that you are doing now. It is better, 
but we still have some concerns and I think you understand and 
share our concerns on some things. I just again want to say 
thanks for what you do.
    With that Mr. Chairman, I yield back.
    Mr. Visclosky. Thank you very much.
    Mr. Rispoli.

                    Mr. Rispoli's Opening Statement

    Mr. Rispoli. Thank you. Good afternoon, Chairman Visclosky, 
Congressman Hobson, members of the subcommittee. I am pleased 
to be here today and would like to note that this year marks 20 
years since the environmental management program was first 
established. Imagine that. Clearly, a lot has been 
accomplished, but a lot more needs to be done.
    I would also note, Mr. Chairman, that today marks, as 
Congressman Hobson said, the last time that I have a scheduled 
opportunity to testify before you on this subcommittee 
regarding our program's budget request. When I first appeared 
before this subcommittee 2 years ago, I pledged that safety 
would remain our first priority. No milestone to me is ever 
worth an injury to our workforce.
    Today, I am pleased to report that worker injuries have 
been reduced by 50 percent during the past 3 years, and our 
injury rate is less than 10 percent of comparable commercial 
waste disposal and construction industries.
    The second priority that I discussed with you is my goal of 
making EM a high-performing organization. I thank this 
subcommittee because you made it possible for us to collaborate 
with the National Academy of Public Administration to help us 
in improving our program. We are very proud that in addition to 
the constructive sessions and dialogue opportunities with them, 
they concluded in their report that EM is on a solid path to 
becoming a high-performing organization.
    Third, when I was sworn-in to this position, I set about to 
refine all of EM's cost and schedule baselines which guide 
every project. During the past 18 months, all EM projects, both 
line item and operating, have undergone independent audits to 
verify our costs and schedules as valid and reasonable. Today, 
our project estimates and assumptions can be viewed by us and 
by you and the Congress with greater confidence than ever 
before as a result of this very, very rigorous process over 18 
months.
    At that time, I also stated that our goal was for the cost 
and schedule performance of at least 90 percent of our projects 
to be on target or better than on target. In July of 2005, per 
a report that is put out by our Office of Engineering and 
Construction Management, 17 of our projects were not on cost 
and on schedule. Today, our portfolio of projects consistently 
meets or beats the 90 percent goal. In fact, today we have one 
project, the DUF6, that is listed as not on cost/on schedule.
    Turning now to our fiscal year 2009 budget request for 
$5.528 billion, it is based on the principle of prioritizing 
risk reduction across the DOE complex. Let me address an issue 
that I know has caused you concern that this request has broken 
with past understandings related to the department's cleanup 
budget strategy.
    I would like to recall and state the testimony my 
predecessor gave to this subcommittee in both 2003 and 2004. 
Then-Assistant Secretary Jessie Roberson testified, ``After a 
period of accelerated funding peaking in fiscal year 2005, we 
anticipate funding will then decline significantly to about $5 
billion in 2008.'' Viewed from this perspective, our 2009 
budget request is actually about $500 million more than what 
she projected on two occasions 5 years ago.
    The independently audited cost and schedules that I 
referred to were developed using our 5-year funding profile, 
and you have a 5-year funding profile, a bar chart, I believe, 
in front of you. It shows that the year that we are in now is 
the low point of where we are, but it is important to note that 
the estimates we worked up for the multi-year funding and the 
audits we went through match this funding profile that was 
given to the Congress last spring after the budget came in last 
year.
    This gave us a predictable funding profile because all your 
project costs and schedules have to be planned out to 
predictable funding, and this is the funding targets profile 
that we used as delivered last year to you. As you can see, our 
2007-2008 appropriations, as well as our 2009 request, track 
with that 5-year profile.
    The administration recognizes that with the budget before 
you today, some of the milestones contained, as the chairman 
stated, in our agreements are in jeopardy of being missed. 
Please note that other milestones are in jeopardy due to 
technical reasons. There are not only budgetary reasons, but 
technical reasons as well.
    As a result, we have had to make difficult decisions 
regarding our priorities. The milestones that guide our work, 
the regulatory milestones that guide our work, have been and 
remain important measures of progress. The Department's 
strategy is to continue to focus on cleanup that will produce 
the greatest environmental benefit and the largest amount of 
risk reduction across the nation.
    Before I close, I would like to note two accomplishments 
that demonstrate the progress we are making regarding risk 
reduction. You have a photo in front of you that demonstrates 
that 50,000 tons of equipment at Building K-31 at Oak Ridge--
this is the weight of a World War II destroyer--50,000 tons of 
equipment have been removed from that building. This is about a 
40 football field-size building. Now that this high-risk 
material has been removed, the building is available for 
industrial reuse.
    The second photograph that you have shows our contractors 
at Idaho removing transuranic waste, contaminated with organic 
chemicals that were disposed of in drums years ago. These drums 
are now decaying and their contents do pose a threat to the 
underlying Snake River plain aquifer. The photo you see and the 
enclosure that you see in the photo allows the workers to 
continue to reduce risk in all weather conditions, but more 
importantly, prevent contamination from spreading.
    Mr. Chairman, I am proud of the progress our 34,000 
contractor and federal workers have made in recent years and 
the wise and secure foundation we have built for the future. 
This subcommittee has provided critical guidance that has 
enabled us to accomplish the successes we have had to date. I 
look forward to working with you in my remaining time at the 
department, and I thank you for your consistent support over 
the years to reduce the risk to our citizens, our communities 
and our nation.
    I will be happy to answer your questions. Thank you, sir.
    The written statement follows:]

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    Mr. Visclosky. Mr. Owen.

                      Mr. Owen's Opening Statement

    Mr. Owen. Good afternoon, Mr. Chairman and other members of 
the committee.
    My name is Michael Owen, and I am the Director of the 
Office of Legacy Management at the Department of Energy. The 
Office of Legacy Management is responsible for ensuring that 
DOE's closure responsibilities are met by providing long-term 
surveillance and maintenance, records management, workforce 
restructuring and benefits continuity, property management and 
land-use planning.
    By managing post-closure responsibilities, LM has better 
positioned the department to continue focusing DOE programs and 
personnel on achieving the diverse missions of the Department.
    For fiscal year 2009, the President's request for LM 
activities is just under $186 million, a reduction of 
approximately $8 million from the fiscal year 2008 request. In 
the past, LM was funded by Other Defense Activities, ODA 
appropriations, and through fiscal year 2007, by the Energy 
Supply and Conservation, ES&C appropriation.
    However, in fiscal year 2008, a new appropriation account 
for Legacy Management was created and placed a portion that had 
previously been within ES&C into the Legacy Management, labeled 
as Legacy Management. In fiscal year 2009, funding is being 
requested only under ODA appropriation.
    I would now like to take this opportunity to explain 
briefly our fiscal year 2009 budget request from the 
perspective of LM's four strategic goals. Strategic goal number 
one, protect human health and the environment through effective 
and efficient long-term surveillance and maintenance. For the 
long-term surveillance and maintenance program, total funding 
request for fiscal year 2009 is $48 million.
    This request will allow Legacy Management to monitor and 
conduct long-term management in accordance with legal, 
contractual and regulatory agreements at 86 sites plus eight 
additional sites that are planned to be transferred to LM in 
fiscal year 2009. This request includes $8.5 million for long-
term surveillance and maintenance at the Fernald site in Ohio 
and $5.5 million for activities at the Rocky Flats site in 
Colorado, two of our larger closure sites.
    We are also requesting $15 million to monitor and conduct 
normal long-term surveillance and monitoring activities at the 
eight Nevada off-sites, located mostly in western states, which 
includes scheduled drilling of deep groundwater monitoring 
wells. Monitoring wells at these sites are very costly because 
nuclear tests were conducted at extreme depths in order to 
minimize surface impacts. Placement of wells around these sites 
is decided upon after consultation with state regulatory 
authorities.
    Strategic goal two is to preserve, protect and make 
accessible legacy records and information. In fiscal year 2009, 
Legacy Management is requesting just over $9 million for 
archives and information management programs. The increased 
funding levels for archives and information management includes 
costs associated with preparing to consolidate all of our 
archived records into one facility.
    These records are currently located in five different 
federal records centers scattered across the country, and 
consist of records for all of our sites, as well as the eight 
new sites that are coming to our control in fiscal year 2009. 
With the planned lease of a new records facility, these records 
will be transferred to a single records storage facility in 
fiscal year 2010.
    Goal three, support an effective and efficient workforce 
structured to accomplish departmental missions and ensure 
contractor-worker pension and medical benefits. The largest 
single portion of the Legacy Management budget for fiscal year 
2009 funds the pensions and benefit continuity program. The 
total request for this program is $112 million. This funding 
allows the department to make the required Employment 
Retirement Income Security Act, ERISA, minimum pension fund 
contributions and provide post-retirement benefits of medical, 
Medicare Part B, and life insurance to contractor retirees at 
LM closure sites.
    Our final goal, manage legacy lands and assets, emphasizing 
protective, real and personal property reuse and disposition. 
LM is requesting approximately $4 million for reuse of property 
management programs. Legacy Management is also charged with the 
transfer or reuse of sites that no longer support an ongoing 
departmental mission and possible disposal of properties for 
beneficial reuse.
    The Office of Legacy Management manages thousands of acres 
of land and other assets. When land is transferred to a private 
interest, it allows the land to be reused productively, reduces 
the department's footprint, and resumes payment of local 
property taxes.
    Finally, the president's budget for fiscal year 2009 
requests just over $1 million to fund all of DOE's 
Environmental Justice program, an increase of about $400,000 
from last year's request. The additional funding will expand 
our environmental justice outreach activities more into the 
southwestern part of the country, and allow for better outreach 
to Native American and Hispanic communities in that area where 
the department has a large footprint.
    In conclusion, you can see from the President's fiscal year 
2009 budget request that the Office of Legacy Management is 
taking proactive steps to increase our efficiency and 
effectiveness by consolidating funds from other appropriations 
accounts, and more importantly using prior-year funds from 
previously appropriated funding to reduce our fiscal year 2009 
budget request, while fully meeting our commitments.
    As the second office in the entire federal government to 
receive official designation from OMB as a High-Performing 
Organization, LM's fiscal year 2009 budget request continues 
our commitment to make prudent use of taxpayer dollars.
    Thank you, Mr. Chairman and members of the committee. I 
would be glad to answer any questions you may have.
    [Statement of Michael Owen, Director, Office of Legacy 
Management follows:]

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    Mr. Visclosky. Thank you very much.
    Mr. Hobson.
    Mr. Hobson. Thank you, Mr. Chairman.

                       IDAHO TRANSURANIC CLEANUP

    I have a couple of comments on something first, then I have 
a long question. This map, I am pleased to see this map. This 
was a priority of this committee. It should have been a 
priority of everybody before you and everybody else. If this 
doesn't work, this is a world catastrophe waiting to happen. I 
know the state wants to take credit for it, but it was really 
this committee that kick-started the program.
    If the river there becomes contaminated to the degree that 
it could, you would have something you couldn't fix. It would 
destroy a whole ecosystem and people's lives would be at risk. 
I view this as one of your most critical programs that you have 
to watch and maintain and do. I am pleased to see the progress 
on it.
    That is enough said about that, but I am pleased to see the 
map and pleased to see the response, because this is something 
that I used to wake up at night worrying about. It was on our 
watch, we couldn't really fix it, and pump-and-treat didn't 
work. I commend you for getting on that, and I hope whoever 
follows you at the department understands the potential world-
problem-class catastrophe of what would happen if this vital 
river becomes contaminated.
    Mr. Rispoli. And I thank you because I recall our past 
conversations. I know you have discussed it with our secretary. 
I know that you have plussed-up our money one year. We have 
this year added another $65 million on top of $104 million from 
last year, and we do recognize it and I do appreciate that. I 
would hope that this will continue because this is the real and 
present danger out there right now.
    Mr. Hobson. It is one of the major problems in this 
country, the waste that is life-threatening if it happens.
    Mr. Rispoli. Yes, sir.

                EM-WIDE NATIONAL MASTER DISPOSITION PLAN

    Mr. Hobson. At the secretary's hearing, we questioned why 
the department does not have a nationwide ``master plan'' 
showing the types, quantities, schedule and final disposition 
for all materials intended for consolidation and disposal. 
These would be the radioactive waste resulting from your 
cleanup activities, as well as special nuclear materials that 
are being consolidated for security, safety or economic 
reasons.
    Offices like Environmental Management and NNSA offer us 
their piecemeal plans for moving material and cleaning up 
sites, but no one has shown us the master plan or ``road 
chart'' that shows how all these pieces fit together. In 
particular, I have concern that EM is making promises to clean 
up certain sites on the assumption that all of the high-level 
waste will go to Yucca Mountain for disposal. But the 
repository does not have the authorized capacity to accept all 
the high-level waste in the DOE complex.
    My questions, and I am going to read them separately, does 
Environmental Management have such a nationwide master plan, or 
at least a nationwide plan, that shows the types, quantities 
and scheduled shipment dates for all the EM materials?
    Mr. Rispoli. We have something called a disposition map 
that is actually a book, Congressman Hobson. It does show that 
where there is no firm disposition path, it so notes, but for 
the most part it actually shows the disposition path for all 
the various types of waste. I would also mention that our 
Deputy Assistant Secretary Frank Marcinowski has developed this 
with his staff. It has been discussed with many stakeholders 
that are affected in those areas. It does exist. It is a living 
document. In other words, it doesn't have a date or a sit-on-a-
shelf.
    Mr. Hobson. Is this information available? First of all, is 
that DOE-wide?
    Mr. Rispoli. Yes, sir.
    Mr. Hobson. Or just EM?
    Mr. Rispoli. It is the entire--no, I am sorry, sir. It is 
EM-wide. It is for the EM complex, but it is all nationwide for 
the EM complex.
    Mr. Hobson. Is this information available in a format that 
you can provide for this hearing record? If not, can you 
provide it in a summary format, including the nationwide part 
of it showing this information graphically for the record?
    Mr. Rispoli. Yes, sir, we can.

                    EM-Wide Master Disposition Plan

    The Office of Environmental Management has complex-wide disposition 
maps for the various waste types resulting from our cleanup programs. 
The data are derived from our project baselines, provide life cycle 
estimates, and are updated annually. The Waste Information Management 
System (WIMS), which generates life-cycle disposition maps through 2050 
for low-level and mixed low-level radioactive waste, is available on 
the Internet (http://wims.arc.fiu.edu/WIMS/) and is maintained by 
Florida International University. These WIMS disposition maps identify: 
The waste type generator site, physical form, projected volumes, the 
general type of treatment required, and the disposal facility. Wastes 
that do not have a current disposition facility are labeled ``To Be 
Determined.'' DOE sites and Headquarters organizations work together to 
establish final treatment and disposal paths for these wastes and 
monitor capacity of existing disposal sites. Later this year we will 
add transuranic waste data to this system. We will provide a folder 
with these disposition maps.

    Mr. Hobson. Which office, if any, in DOE is charged with 
integrating all these different moving pieces from the various 
DOE programs--treatments on-site, shipment-off-site and receipt 
of waste and spent fuel for disposal?
    Mr. Rispoli. If we are talking about wastes that are in the 
Environmental Management program, then the Deputy Assistant 
Secretary Frank Marcinowski and his office are responsible for 
that. The Department still employs for non-waste, but for 
nuclear materials such as plutonium, uranium, a consolidation 
committee, a nuclear materials consolidation committee. It is 
presently chaired by Mr. Bill Ostendorff. It used to be chaired 
by Charlie Anderson. It is now chaired by Bill Ostendorff, who 
is the principal deputy administrator of the NNSA. They handle 
those materials that are not waste, but might have a future 
benefit or a present benefit for the nation.
    Mr. Hobson. I think what we are concerned about is seeing 
an integrated plan for the Department as a whole. We need to 
talk to the staff and everybody. One, we want to know that 
there is such a plan. Second we think there could be some 
efficiencies if there is an overall plan, instead of a hit-or-
miss approach as you move through that.

                       MOUNDO OU-1 CLEANUP STATUS

    If I have any further time, I am going to switch to 
somewhat of a parochial thing, but it is not really in my 
district. Both Congress and your department have put additional 
funding toward cleaning up the contamination at OU-1 at the 
Mound site in Miamisburg, Ohio. I gather the local community 
still believes the Department has not done enough and is 
seeking even more federal funding for this site. Can you 
explain the current status of the OU-1 cleanup and how the 
department proposes to resolve that problem?
    Mr. Rispoli. Yes, Mr. Hobson. There are two issues that are 
related to this. The first is, the Department has offered to 
convey the property minus the OU-1 area that is of concern to 
the community and that dialogue is ongoing with the community 
now. In fact, I believe that we are well along the path toward 
executing such an agreement once it is finalized. So that would 
remove that particular property from the transfer to the 
community.
    However, related to the cleanup, I was aware of the 
concern. You know, this committee gave us $30 million to----
    Mr. Hobson. And you know why. There was a signoff by a 
couple of people that everything was okay, and I didn't believe 
it was okay. And guess what? It wasn't okay. We would have left 
a mess for the community. We had the money, and frankly, the 
staff came and said we don't think this thing is cleaned up. 
This was even though the Ohio EPA signed off and I don't know 
who else signed off.
    Mr. Rispoli. The federal and the Ohio----
    Mr. Hobson. Yes, but let me tell you, what did you find? 
They had stuff.
    Mr. Rispoli. Yes, sir.
    Mr. Hobson. And we would have all walked away from that 
site and left it right over an aquifer if this committee and 
its staff hadn't said, whoa, wait a minute.
    Let me ask another question on this to Mr. Owen. What is 
the status of the department's payments to the Miamisburg Mound 
Community Improvement Corporation? Does DOE still owe any 
further money to the community organization? Is the community 
organization using the DOE funds that they have received to 
date?
    Mr. Owen. Yes, sir. We owe them no additional monies. All 
the monies have been paid. The way the contractual procedures 
that are followed by the government, that is considered a 
grant. So the Miamisburg Mound Community Improvement 
Corporation would invoice against a balance there of 
approximately $6.1 million which is available to them, and we 
owe them no additional monies. We have made all payments.
    Now, they may have to come in with matching grant 
requirements for the release of some of the funds, and that may 
still be going on. They have a master plan as to how they plan 
to develop the site.
    Mr. Hobson. But they claim that you haven't cleaned up this 
other little site.
    Mr. Rispoli. Yes, sir. They do.
    Mr. Hobson. And I don't know who is right or who is wrong 
on that, but I would like to get rid of that thing off our 
books one way or the other. It is so close to being done it 
ought to get done.
    Mr. Rispoli. I ought to give the Congress an update as to 
what was going on. I have asked the Army Corps of Engineers to 
take a look at what we have done so far, given the $30 million 
that you directed to it, and we added another $4.5 million, 
which is below all the reprogramming thresholds. I was informed 
informally today that we probably have removed with that about 
60 percent of the quantities.
    When I was first told of this issue several years ago, I 
was told that it was likely over $100 million problem, but 
nobody had really characterized it and nobody knew. But now we 
have removed 60 percent, but it took $34.5 million to do the 60 
percent. The Army is working on a report for me to recommend 
what should we do, what did they think the costs would be for 
the balance. It is a protective option, Mr. Hobson to cap it as 
we do others, like at Fernald, where we have a cap over a 
landfill, or what should we do with it.
    I expect that report within the next month or so.
    Mr. Hobson. I just worry about the groundwater.
    Mr. Rispoli. Yes, sir. I understand.

              GUARANTEED FIXED PRICE REMEDIATION CONTRACTS

    Mr. Hobson. This committee directed DOE to explore the use 
of guaranteed fixed price remediation contracts for some of 
your cleanup work. Can you explain the results of any trials 
you have conducted to date?
    Mr. Rispoli. Yes, sir. We actually did provide a report to 
the Congress that was required as a result of that direction. 
The report mentioned about four or five different things that 
we looked into with respect to that issue, with respect to that 
type of contracting.
    What it came down to was that there are a couple of 
candidates. There is a gun site at the Savannah River site. 
There are two reactors at Brookhaven and we believe that the 
SEFOR reactor at the University of Arkansas at Fayetteville 
would be candidates for it. However, with the budget we have, 
the Brookhaven reactors and the SEFOR, which was added to our 
program by an authorization act, actually by EPACT 2005, I am 
sorry, we don't have the funds to do anything with those right 
now.
    In fact, we are slowing down the work in 2009 on the 
Brookhaven reactors and we have nothing other than perhaps 
spending some planning money to look at SEFOR at Fayetteville. 
So we have some potential candidates, but at the present time, 
in all honesty, they are not moving very far, but we are poised 
to take them on when the time is right.

                      PORTSMOUTH CLEANUP STRATEGY

    Mr. Hobson. Okay. My last question is on Portsmouth.
    Mr. Rispoli. Yes, sir.
    Mr. Hobson. Portsmouth, as they would say if you were 
there, sort of a southern Ohio twang in there.
    The contract for the cleanup of the technetium 99 at 
Portsmouth should be completed sometime later this year. What 
is DOE's current strategy for cleaning up the rest of the 
Portsmouth site in addition to the DUF6 project?
    Mr. Rispoli. I am happy to tell you--well, the DUF6 
project, of course, has its own place. I am sure that you or 
someone will have questions about the status. It is, as I 
mentioned, our one project that is listed as red. It is not on 
cost or on schedule at the present time.
    On the larger front of the future D&D, I am happy to report 
to you that we are working in tandem, both the project 
management planning and the procurement planning, as I say, in 
parallel. We expect that this summer we will be approving both 
an acquisition strategy and a path forward so that we could 
package up an RFP and be able to do that work.
    Mr. Hobson. How are you going to deal with the hundreds of 
skilled employees that will become available once the Tech-99 
contract is completed? Do you have any plan to keep these 
skilled cleanup workers usefully employed at the site, or what 
are you going to do?
    Mr. Rispoli. Mr. Hobson, I don't have an answer for that. I 
will have to take that for the record.

                       Portsmouth Workforce Plan

    Yes, currently the Office of Environmental Management (EM) has 
funded activities at the Portsmouth site which supports approximately 
440 United States Enrichment Corporation (USEC) employees. About half 
of these employees support the Cold Shutdown of the Portsmouth Gaseous 
Diffusion Plant (PGDP) and the others are assigned to the Technicium-99 
(Tc-99) cleanup program. On March 3rd, DOE initiated discussions with 
USEC to establish a contractual relationship for the support of 
Surveillance and Maintenance of the PGDP DOE owned facilities until the 
contract for the decontamination and decommissioning (D&D) of the 
facilities is awarded. At that time it will be the Department's 
intention to transition the USEC employees to this new D&D contractor.
    The successful completion of the Tc-99 cleanup program is 
approaching. As this program nears completion the natural migration of 
the associated USEC employees to other deactivation projects at 
Portsmouth has already begun and will continue throughout the current 
fiscal year and into FY2009. In addition, DOE will approach USEC about 
using their employees to support the Depleted Uranium Hexafluoride 
(DUF6) project and American Centrifuge Project (ACP), as the 
projects transition from construction to operations. A significant 
number of the USEC pool of experienced employees will be used to staff 
these projects. The natural attrition of USEC at the Portsmouth site is 
being closely managed to ensure that there is a minimal impact to the 
existing workforce during the transition of the plant to D&D.

                URANIUM DISPOSITION SERVICES PERFORMANCE

    Mr. Hobson. And lastly on this, we asked the secretary 
several questions about the performance of the contractor, 
Uranium Disposition Services, LLC, for the depleted uranium 
hexafluoride projects at Portsmouth and Paducah. It sounds like 
the only consequence to the current contractor for his poor 
cost and schedule performance is that DOE may re-compete the 
operational phase for these projects.
    Well, the question is, what will be the consequences to the 
current contractor in terms of reduced award fees?
    Mr. Rispoli. On that contract, it was initially one 
contract to build, commission and operate for I believe a total 
of 5 years that particular facility. As you know, we have given 
them both a cure notice and then a second cure notice, and then 
a show cause, which is the step as a precursor to termination 
for default. We are now in dialogue with that contractor to 
remove, as you accurately conveyed, the operations part, which 
is a significant amount of work that would have been done with 
that plant.
    That is the path we are on. And certainly, the contractor 
is not enjoying when we are in termination-type proceedings, 
they are not enjoying a significant or any fee payments for the 
work they are doing. They are behind schedule and over cost.
    Mr. Hobson. The Department of Commerce maintains a list of 
nonperforming contractors that agencies are supposed to review 
before making new contract awards. Will the department submit 
the UDS partnership or the individual members of that 
partnership as non-performing contractors? If not, please 
explain why not?
    Mr. Rispoli. Mr. Hobson, I do not know the criteria for 
submitting a contract that is nonperforming, so I will have to 
take one for the record.

                       Non-Performing Contractors

    The Office of Environmental Management (EM) collects and maintains 
information on contractor performance and routinely uses this 
information, as well as past performance information available from 
other sources, in making contract award decisions. EM inputs 
information on contractor performance to the National Institutes of 
Health Contractor Performance System (NIH CPS), an automated contractor 
performance information database. EM also uses the Past Performance 
Information Retrieval System (PPIRS) which is maintained by the 
Department of Defense, as a Government-wide contractor past performance 
repository. Following the completion and closeout of contracts such as 
the DUF6 Contract held by UDS, performance information and 
supporting data that will be entered into NIH CPS is automatically 
downloaded into PPIRS; this information is captured and maintained for 
universal access by other Federal Acquisition Officials as needed in 
accordance with restrictions outlined in the Federal Acquisition 
Regulations.

    Mr. Hobson. I always worry about these contracts, although 
I don't know DOE contracts as well as I know defense contracts. 
In defense contracts, the government always--and I won't use 
the word that I would normally use--gets the short end on these 
things because they are written in such a way that we give 
performance awards to people that shouldn't get them.
    They say, well, that is the way the contract is written. I 
have had deals where they say if you are terminated early, it 
costs the government more than if the contractor completed it. 
I hope we are not doing that here. I hope that DOE doesn't do 
that and your agency doesn't do it.
    I look forward to your answers on this in a timely fashion 
while I am still here in Congress. Sometimes we don't get them 
for a long time, but I am sure you guys will do better.
    Thank you very much, Mr. Chairman.
    Mr. Rispoli. Thank you.
    Mr. Visclosky. Ms. Emerson.
    Mrs. Emerson. Mr. Chairman, I just put a mint in my mouth. 
I apologize. I am ready now. [Laughter.]

                               NAPA STUDY

    If I start coughing, forgive me. Thank you.
    And thank you all so much for being here. Mr. Rispoli, your 
testimony mentioned the NAPA study that reviewed EM. I know 
this report was just released in December, but can you update 
me and the rest of the committee on the recommendations you 
have already implemented? And also what near-term 
recommendations can we expect to be implemented in the next few 
months?
    Mr. Rispoli. Thank you. That panel has been extremely 
useful. They were I think pleasantly surprised that we did not 
wait for them to issue a final report, but actually worked with 
them every step of the way to begin implementing 
recommendations as we went.
    We have taken some significant actions. For example, they 
recognized that our staffing, that if you looked across the 
complex, we were short in both numbers, but just as 
importantly, in skill mix. So we initiated an effort to do a 
nationwide review of the staffing across the complex. We used 
the Corps of Engineers to do that, by the way.
    We then immediately plugged in 50 support people to help us 
to close the skill gaps. While we recruit, they recommended 
that we use our Cincinnati business office to do more of these 
functions. So we have done nationwide recruitments out of the 
Cincinnati business office so that we don't have to do them one 
at a time from each site, so that we can get faster and more 
professional expert help at all of these sites.
    I think most importantly to us is, again, recognition that 
many of the shortcomings we have had have in fact been due to a 
shortfall in the right skills at the right places at the right 
time. If I had to pick any one thing, I think that is probably 
one of the more important.
    They also helped us to restructure some of the organization 
at headquarters so that we at headquarters could be more 
responsive to the field. We took some of those actions. For 
example, we put all of our own environmental management 
personnel management in one office, as an example, instead of 
having it fragmented. We reorganized and created a new office 
to look at strategic issues, and that office now, not being a 
part of any other office, can look across the EM complex at 
strategic issues.
    So they have done some things for us that really have 
assisted us greatly. I thank you for it, and I would say any 
other time that you need good expert help somewhere, these are 
the people to send for it.
    Mrs. Emerson. We need to send them to a lot more agencies 
in the government, it seems like.
    So in the near term, are there some things that you are 
beginning to implement in accord with the recommendations?
    Mr. Rispoli. Absolutely. We have already begun, or in fact 
completed, I am given a monthly update on status. We have an 
executive who tracks that and actually manages the 
implementation so that we are not waiting for some future date. 
My objective is to get as much of it as we can done during my 
tenure here at the department.
    Mrs. Emerson. That is good. Thank you.

                     ACCELERATED CLEANUP STRATEGIES

    You mentioned the accelerated cleanup strategies you are 
developing and evaluating to aggressively clean up sites or 
segments of the work involving multiple sites. Can you just 
talk a little bit about the review of these strategies? Is 
there an independent entity looking at those ideas to make sure 
the safety and efficiency? Or is that review done within EM 
itself?
    Mr. Rispoli. Let me mention really quickly, we have, as you 
know, not only closed complete sites, sites such as some of the 
ones we have mentioned, like Fernald as an example. But we have 
closed discrete areas on bigger sites, larger sites in discrete 
areas. We went through this 18-month effort to re-evaluate our 
costs and schedules.
    They are now to such a degree of detail, we could actually 
look at making business decisions to close discrete areas on 
big sites or perhaps even pick out a few smaller sites and get 
those closed. So we now have the tools to do that, and in fact 
we have begun the process of evaluating from a business 
perspective whether or not that would be a good way to go as we 
go forward.
    Mrs. Emerson. Okay. Of the cleanup sites left to address, 
which ones should we be most concerned with? Which one are you 
giving special attention to, or are there any special 
considerations for that site?
    Mr. Rispoli. From a risk perspective, unfortunately, the 
places that still take the largest dollars, and I believe it is 
nearly 50 percent of our budget, are the liquid tank waste 
issues at Idaho, at Hanford, and at Savannah River. I mean, 
that is just the reality of what it is. The volumes in those 
tanks are such that they just have to be dealt with.
    So that greatly, of course, takes a big wedge out of our 
budget that has to be dedicated to that. What we are looking 
at, as I said, though, is with the information we now have, can 
we make business decisions to target smaller areas like an area 
at Savannah River. We closed Melton Valley at Oak Ridge. I 
think we closed the ``T'' area--is that the name of it at 
Savannah River? These are discrete sites on a bigger 
installation and we are looking for opportunity to do more of 
that.
    Mrs. Emerson. Very good. Thank you so much.
    Mr. Rispoli. Thank you.
    Mrs. Emerson. Thanks, Mr. Chairman.
    Mr. Visclosky. Mr. Simpson.
    Mr. Simpson. Thank you, Mr. Chairman.
    Welcome to the committee. This is going to be the last 
time, so let's get some tough questions. I am just kidding. 
[Laughter.]
    I do want to thank you, before I begin, for the job you 
have done. I think you have been one of the best EM directors 
we have had and gone a long way toward to restoring some 
credibility within the Department, so I appreciate what you 
have done.

                 MISSED COMPLIANCE AGREEMENT MILESTONES

    Now, let me ask questions. According to the Secretary's 
testimony on February 28, the EM's fiscal year 2009 budget 
request of $5.528 billion would not meet some of the milestones 
and obligations contained in all of the environmental 
agreements that have been negotiated over many years with 
regulators. I am interested in what compliance milestones will 
be missed at the $5.5 billion level and how much money is 
needed if we were to fully comply with all of those milestones? 
And could we comply with all of them technology-wise, or if 
money was no object?
    Mr. Rispoli. I think we provided to the staff and to the 
subcommittee ahead of time a summary. Let me just run through 
it so that it is on the record here. In 2008, not all of these 
would be budget-driven, but a fair number of them are and you 
have the breakdown on a cheat sheet. In 2008, we are projected 
to miss as many as 16. I shouldn't say we will miss them. I 
would say we could miss as many as 16.
    Mr. Simpson. Are those budget-driven?
    Mr. Rispoli. Not all. At Oak Ridge in 2009, as many as 
nine. Not all of these are budget-driven, and the table you 
have that I think looks like this or something similar to that 
actually shows the numbers. I can give them to you in that 
detail if you would like. At Oak Ridge, we could miss as many 
as 11 in 2008, all of which would be budget-driven. In 2009, we 
could miss as many as nine at Oak Ridge, seven of which would 
be budget-driven.
    To buy back those milestones would take about $65 million 
at Oak Ridge.
    Mr. Simpson. Just at Oak Ridge?
    Mr. Rispoli. Yes, sir.
    At Richland, Washington, I will cover Richland and the 
Office of River Protection separately, but they are basically 
the same Hanford reservation. In 2008, we could miss one 
milestone at Richland, not budget-driven, technical reasons. In 
2009, we could miss as many as 11, of which seven would be 
budget-driven.
    And of the total, which is not small, the amount it would 
take to buy those milestones back, and I am prepared to talk 
about some of the typical ones and what they are if we have 
time, would take almost $500 million at just that one site, to 
buy back those seven budget-driven milestones in 2009.
    At River Protection on the same site, they have a potential 
to miss as many as three in 2008 and another three in 2009, 
none of which are budget-driven. They would primarily be driven 
by the technical challenge of dealing with the liquid tank 
waste and things of that nature.
    At Savannah River Site in 2008, they would be at risk of 
missing one milestone in 2008 and it would be budget-driven. 
And in 2009, another five, also budget-driven, and that could 
be as much as, say, $175 million to $200 million, something in 
that range. At Los Alamos, none in 2008 would be at risk, but 
in 2009 as many as three budget-driven would be at risk, and 
that would take about $100 million to not miss those.
    Those are the most significant ones and the total would be 
in the range of $800 million to $900 million.
    Mr. Simpson. About $800 million to $900 million?
    Mr. Rispoli. Yes, sir.
    Mr. Simpson. How many of----
    Mr. Visclosky. Would the gentleman yield?
    Is that $800 million to $900 million total for 2008 and 
2009? Or is that 2008 or 2009?
    Mr. Rispoli. Those would be to buy back the 2009, because 
2008 is already----
    Mr. Visclosky. That is just 2009?
    Mr. Rispoli. Yes, sir.
    I would also for the record point out that there are also 
future milestones. In other words, you do a milestone in 2009, 
and it may then spawn other milestones for the future. That 
would cover 2009 and what we know would be other milestones 
related to those in the future.
    Mr. Simpson. Let me get that straight. What you are saying 
is, you miss a milestone this year; it causes you to 
potentially miss milestones further down the road.
    Mr. Rispoli. That is very true.
    Mr. Simpson. And if you had the $800 million or $900 
million, that you could meet the milestones now and you might 
not miss those ones down the road.
    Mr. Rispoli. That is true.
    Mr. Simpson. Are you counting when you say that such as 
Richland that you have seven budget-driven milestones that you 
might miss in 2009? Are you counting future milestones that you 
might miss because you have missed these seven?
    Mr. Rispoli. Not in that number. No, sir, that is only 
milestones in 2009. But as an example, if I may, let's say that 
there is a report due that studies--let's just pick a 
hypothetical--a groundwater contamination. You make that 
milestone on time. You may then sit with the regulator and 
develop another three or four milestones to do certain things, 
like put in wells, begin a treatment system or something like 
that. So just doing that milestone may then result in future 
milestones. So clearly if you don't meet the first one, you 
then push the other ones further out as well.

                  MISSED MILESTONE FINES AND PENALTIES

    Mr. Simpson. How many of these missed milestones are 
subject to penalties and fines?
    Mr. Rispoli. Not all of them, but a number of them would 
be.
    Mr. Simpson. Do we know what the total fines potentially 
could be with the Department for missed milestones at this 
budget level?
    Mr. Rispoli. We have a pretty good estimate. It is 
somewhere in the range of $10 million.
    Mr. Simpson. And that is for next year?
    Mr. Rispoli. That would be for 2009. Yes, sir, the 2009 
milestones.
    Mr. Simpson. Do we have an estimate of what the penalty 
would be because of these missed milestones of future missed 
milestones?
    Mr. Rispoli. No, I don't believe we do. No, sir.
    Mr. Simpson. I assume that missing these milestones means 
that the Department is intent on renegotiating contracts or 
agreements with states.
    Mr. Rispoli. Yes, sir. The process whenever a milestone is 
at risk, and we have already begun dialogue with all of the 
states because this is very important to our sites and to the 
states, is to begin that dialogue and to look at the relative 
priorities, because for example, the budget we are proposing to 
you represents priorities as we in our best judgment evaluate 
it. But a particular regulator may say, you know, I would 
rather see you do this milestone than that one, and we are open 
to that type of dialogue.
    We certainly hope that with the longstanding relationship 
we have with these regulators, that we can continue to engage 
in that dialogue. I have spoken with several myself. Our other 
executives have spoken with other state regulators, as well as 
the site managers, to begin that process.

                       COST PROJECTION CONFIDENCE

    Mr. Simpson. I noticed in an article I was reading that at 
Hanford, the largest site cleanup in the complex, DOE now 
projects completion between 2050 and 2062, which is 20 years 
behind the previous estimates. At Savannah River site, it is 
2038 to 2040, compared to 2031 in the 2008 request. At Idaho, 
it has moved from 2025 to between 2035 and 2044.
    Obviously, we are pushing the projected completion dates--I 
should emphasize ``projected''--of these sites back a number of 
years. Is there any confidence that this is any more than any 
of the other projections in the past? Because we have kind of 
had the same--and I am not trying to throw cold water or 
anything--but we have had the same type of reports from other 
EM managers that have come in and they have done a top-to-
bottom review and moved the sites and so far. And we got, 
``Aha, now we have some firm knowledge of when this is going to 
be done.''
    And we keep doing it and we keep doing it. It is kind of 
like studies when Congress does them. We pile up on shelves. 
What confidence do you have that this is any more accurate than 
any of the other studies that have been done?
    Mr. Rispoli. Congressman, I think what happened to us in 
the past, and I think you are absolutely correct in your 
observation, I think that all of our projections were done with 
the view that we were challenging the contractors and therefore 
we were projecting with the most optimistic outlook.
    Now, that is a great thing to challenge the contractors, 
but when I mentioned that we did an 18-month process to review 
the entire program and it was audited by people who are outside 
of my program, independently audited, they audited for the 
first time to a realistic funding profile. Before that, they 
were all estimated too unconstrained, so everyone was 
estimating and making all these commitments to you and to the 
state regulators based upon unconstrained funding profiles.
    Now, we have gone through and used this funding profile, 
and by the way, out here, we just said adjust for inflation. 
Assume it is flat and just adjust for inflation, because this 
is now $6.1 billion to $6.2 billion at the last part here. So 
we have redone this in an intensive 18-month effort. The work 
is voluminous. It breaks every project down into what they call 
a work breakdown structure so that every element of work is 
estimated.
    And now for the first time, each element of work has an 
early finish and a late finish, so we have allowed for risk. So 
when you ask how do you know that it is realistic this time, 
these estimates are no longer a point estimate. They say, okay, 
the best finish is here; the worst or the most pessimistic 
finish is here. And likewise, congressman, on cost, the most 
optimistic cost is down here and the most pessimistic cost is 
up here.
    So for the first time, we can share with the communities at 
each location, with the regulators and with the Congress what 
those cost and schedule ranges are. The actual work at each 
site would fill bookshelves, but we are working on providing a 
synopsis that we can provide to show for the whole program, 
site-by-site, and at the major work elements, site-by-site, 
what are the early-finish, late-finish, the low-cost and the 
high-cost ranges for the entire program.
    So I think this is intended to restore confidence with the 
Congress and with the communities that we recognize have 
suffered.
    Mr. Simpson. What has been the response of the states and 
regulators and the communities?
    Mr. Rispoli. Everyone that we have talked to, including 
professional organizations that I have explained this to, think 
that we have done exactly the right thing.
    Mr. Simpson. Will renegotiation of settlement agreements be 
required because of a more realistic view, if you want, of 
cleanup?
    Mr. Rispoli. Yes, sir, but the beauty is that now we have 
enough detail so that we can sit with the regulators and say, 
okay, if you would like to delay this one in favor of that one, 
this one costs so much money, this one costs so much money, can 
you move that around to come to a mutual agreement with the 
regulators.

                   PENALTIES PAYMENT RESPONSIBILITIES

    Mr. Simpson. If I could just finish this line for a 
second--not this line--I got distracted with this for just a 
second.
    Back to the penalties.
    Mr. Rispoli. Yes, sir.
    Mr. Simpson. Who pays the penalties?
    Mr. Rispoli. If it is driven by a lack of funding, the 
Department of Energy would pay the penalties. Some penalties 
that you have read about in the papers that were caused by 
other performance issues, we assess those to the contractor. 
But if it is driven by a lack of funding, then the department 
would pay the penalty.
    Mr. Visclosky. If I could, it would not come out of the 
U.S. Treasury. It would come out of DOE's budget.
    Mr. Rispoli. It would come out of DOE's budget. Yes.
    Mr. Simpson. Is there a line item that is in your budget 
for penalty payment?
    Mr. Rispoli. No, sir. The penalty--correct me if I am 
wrong--but I believe it would be paid from the money provided 
by this committee for that project.
    Mr. Simpson. That kind of bothers me, because if we are 
putting money into a project for cleanup and we use it to pay a 
penalty instead of the cleanup, obviously I would like to see 
more of the money actually go into cleanup.
    Mr. Rispoli. Yes, sir.
    Mr. Simpson. Are the penalties always paid in cash? Or are 
there in-kind payments?
    Mr. Rispoli. We actually went back to look at that, and 
there are both ways. Some are paid in cash. For example, we 
have paid several penalties to the US EPA in cash to their 
penalties fund.
    Mr. Simpson. To USEPA?
    Mr. Rispoli. Yes, sir. We have paid several in cash to 
them, and we have paid several in cash to a state equivalent-
type fund. It might be like an emergency response fund in a 
state where the money would go toward helping them for 
emergency response. But in the case of the federal EPA, it goes 
to their collection fund.
    Mr. Simpson. Do the settlement agreements generally dictate 
how those penalties will be paid, or to what they will go in 
the state, if it is a state that gets paid?
    Mr. Rispoli. We have had penalties, and not all of them are 
for missing a milestone. There may be others.
    Mr. Simpson. Sure.
    Mr. Rispoli. Generally, what happens is then our site 
manager enters into negotiation or dialogue with the regulator 
and they may determine an in-kind type of a thing. For example, 
in Richland, I think we bought two boats for the Columbia River 
for the state to be able to pull samples, pull water samples, 
which actually does benefit the state and the program.
    In the state of New Mexico, I think we have paid, and some 
has gone to provide staff so they can review our work, and 
others have gone into their emergency response fund. So it is 
negotiated each and every time, and it is not always a given 
that the maximum penalty--when I gave you the roughly $10 
million--it turns out to be the penalty. Sometimes it is 
negotiated to some other amount.

                MISSED MILESTONES PENDING LEGAL LAWSUITS

    Mr. Simpson. Is the department being sued anywhere by 
outside entities, not the state regulators or the people with 
whom you are in agreements, for missing agreements?
    Mr. Rispoli. I think I would take that one for the record. 
I just don't know off-hand. I do know that there have been a 
number of outside groups that have sued related to certain 
types of things. For example, a current interesting one is an 
outside group sued the regulator in the state of New Mexico and 
brought them to court. Eventually, I believe the state 
prevailed. But this is not an uncommon thing. I would take that 
question for the record, if you would like.

                       Outside Entities Lawsuits

    No, the Department is not being sued by any outside entities for 
missing requirements in our cleanup agreements.

    Mr. Simpson. Okay. Yes, I would like to know that, because 
I have heard of--and of course you hear of a lot of things 
but--groups that sue the department for noncompliance to 
something. And part of the settlement, and it is usually an 
out-of-court settlement, is to help fund that group in future 
years. That kind of concerns me.
    But I will quit now and move on a little bit later.
    Mr. Visclosky [continuing]. To follow up on Mr. Simpson's 
line of questioning. When we are talking about missing a 
milestone for budgetary reasons for lack of funds, and you 
mentioned the gap of $800 million to $900 million, that is in 
the proposed 2009 budget?
    Mr. Rispoli. Yes, sir. And it is only tied to those 
particular milestones.
    Mr. Visclosky. But you would need an additional $800 
million to $900 million to make sure, from a budgetary 
standpoint.
    Mr. Rispoli. Yes, sir. But as I would point out, not all 
milestones are what you might say equal. I, in fact, have some 
examples that--some might be considered more significant than 
others, but they are not really all equal, so to speak.
    Mr. Visclosky. Okay.
    Mr. Calvert.

                     NEW REPROCESSING TECHNOLOGIES

    Mr. Calvert. Thank you, Mr. Chairman.
    To preserve nuclear energy as a part of our future, 
electric generation especially, we must move toward 
technologies that I believe you can process spent nuclear fuel 
and recycle the hazardous radioactive materials. For the 
record, what reprocessing technologies are you presently 
working on and what is being developed at Argonne or any of the 
other labs?
    Mr. Rispoli. Well, I can address certainly within my own 
program. We have the capability to, for example, recover 
uranium in our H Canyon at the Savannah River site, where we 
have an ongoing program to bring other uranium products from 
all over the complex to the H Canyon. We are doing this not 
only for environmental management supplies of uranium, but even 
other programs within the Department of Energy. So that 
capability to recover uranium already exists.
    The Department is also working on a uranium strategy. I 
would say it is pretty far along. It is being headed up by the 
Office of Nuclear Energy. My office is cooperating with the 
Office of Nuclear Energy, but they are looking at the entire 
inventory of uranium across the Department of Energy, both 
within the nuclear energy supply, the environmental management 
supply, and the former weapons program supply, and looking at 
what can be done with this uranium, what would be the best way 
to manage it for the benefit of the nation, really.
    If it is to be released to public consumption, in what 
manner and at what rate to not upset the uranium industry, to 
not cause an imbalance or an uncertainty in the market, things 
of that nature. That is pretty far along. As I say, we are 
cooperating with the Office of Nuclear Energy on that issue, 
and that is being headed up by Assistant Secretary Spurgeon, 
who I think you know.
    Mr. Calvert. Is there any reprocessing technologies in the 
basic research stage right now that are moving along, that have 
promise, that need funding, that you see on the horizon that 
might be ready for some kind of laboratory-scale type of study?
    Mr. Rispoli. Congressman, I understand the question, but I 
think I would take it for the record or it would be better 
answered by Assistant Secretary Spurgeon. I don't know yet--has 
he yet appeared before this subcommittee?
    Mr. Calvert. No.
    Mr. Rispoli. Is it next week perhaps, or postponed until 
April? But I could take it for the record or you could also 
address that to him when he appears before you.

                  Promising Reprocessing Technologies

    Yes. The following are few examples of promising reprocessing 
technologies that would benefit from additional funding. A first 
example is the reprocessing of graphite-based fuels. Spent fuel from 
high-temperature gas-cooled reactors is difficult to reprocess, because 
the fuel particles are coated with graphite and silicon carbide, 
neither easily penetrated by conventional dissolution processes. Grind-
leach processes have been partially successful, and there has been some 
progress in the use of molten salts as silicon carbide solvents. 
Fluorination is technically feasible but provides significant 
containment problems. The reprocessing of graphite-based fuels is a 
fertile field for basic research.
    A second example of a promising class of advanced reprocessing 
technologies is hybrid treatment in which aqueous dissolution is 
followed by crystallization, solvent extraction and electrochemical 
separations. The separations literature contains information on each, 
but combined experimentation is uncommon yet offers considerable 
potential.
    A third example is the exploration of ways to convert 
electrochemical separations which are currently operated as a batch 
process into a continuous, counter-current process. In concept, one 
could imagine the flow of a molten salt and molten metal in opposite 
directions in a series of contactors, within which electrolytic or 
chemical exchange processes take place. Counter-current processes in 
general offer potential for very high recoveries, low losses and high 
throughput, and all three attributes would be beneficial for non-
aqueous spent fuel treatment.

    Mr. Calvert. Okay. Thank you.
    Mr. Rispoli. Yes, sir. Thank you.
    Mr. Visclosky. Mr. Wamp.
    Mr. Wamp. Well, this is my fourth hearing in the last 6 
hours on completely different topics, on things all around the 
world. So I will try to focus.
    I want to start, Mr. Secretary, by echoing Mr. Simpson's 
comments. You have drawn the short straw and difficult 
environment and you have done a very good job, but the deck is 
kind of stacked against you. It is a tough time, but I do 
really, really appreciate your service.
    This EM post, in my 14 years of service, is always the kind 
of hardest one to fill and to keep. And so you should be 
commended for serving your country in a challenging 
environment.
    I don't know if anybody here can answer this question, but 
I was just at another appropriations subcommittee hearing where 
it was said that at last night's budget markup, that a 
particular priority was fully funded in the budget resolution. 
Does anybody know where EM would come out in 2009 based on the 
budget resolution that passed the Budget Committee last night? 
Does anybody have any idea?
    Mr. Simpson. I was way too tired when we passed it.

                      BUDGET PRIORITIES WITHIN DOE

    Mr. Wamp. It was 12:30 a.m. when they finished, and I 
actually watched it until about 11 o'clock. That is how bored I 
was. The budget resolution in some years doesn't mean anything. 
This may be one of those years. In some years, they do mean a 
lot. But I just wondered, because that is somewhat a piece of 
this, is there any money for the Congress to do anything more 
than what OMB has asked us to do with respect to environmental 
management.
    Because obviously I was surprised last Thursday at 
Secretary Bodman's candor when I asked him the question that 
you heard me ask at the cleanup meeting, and that was whether 
we were moving from accelerated cleanup to decelerated cleanup. 
And Secretary Bodman just basically said last Thursday, I am 
afraid you are right.
    But he also went on to say that OMB has just tied the hands 
of the Department of Energy. Do you believe that is just the 
final analysis of where we are at right now, is that you made a 
valiant case for why we don't want to be out of compliance and 
miss milestones and get fined and postponed and put off, but 
OMB just wouldn't hear the cry.
    Mr. Rispoli. Congressman Wamp, if I could answer that this 
way. First, when you opened you thanked me, but I have to say 
in all honesty that many of the executives in this room and the 
other 34,000 people at your site and all of our sites are the 
ones that are really making this happen. I think they have done 
us all a fabulous job and they will continue to do that long 
after I am gone. So I thank you for the compliment, but they 
are the ones that are doing this.
    My own view toward any budget process is that, number one, 
any of us would like more in anything we do, in our personal 
lives or anywhere, but when you get what you get, my job then 
is to get the maximum return to the American public for what we 
get. And that is what we have endeavored to do.
    You reach a point where you can't go back and lament what 
you didn't get. You have to look forward and say, this is what 
I got, and what do we do with what we have to try to make this 
a better-running program. I am here to defend the budget. The 
Congress certainly has the right to give us what we ask for or 
give us less or give us more. But whatever that is, we will do 
our utmost to deliver to the American public and the 
communities the best we can for the money we have.
    Mr. Wamp. I am not being snide, but I would ask, on your 
own sheet of 2008 versus 2009 site-by-site budgets, Mr. Simpson 
and I, our sites are down, and Paducah, Portsmouth and Savannah 
River are up. The rationale behind that----
    Mr. Visclosky. That is a big mistake.
    Mr. Wamp. Well, they are trusting the Congress way too 
much, aren't they? Is there a rationale behind the budget 
request on those sites?
    Mr. Rispoli. Congressman Wamp, for us, the entire budget 
was driven on a risk reduction basis. Unfortunately, when we 
look at Idaho and when we look at Oak Ridge, D&D is considered 
by us generally, not absolutely, to be among the lower-risk 
problems we have.
    Now, sometimes you have to do the D&D and get the building 
out to deal with groundwater, and I think what has happened to 
both sites is when the year got to be lean, D&D was what we had 
to address first as being on the relative risk ranking of a 
lower priority.
    Now, as Mr. Simpson knows, we are working on some planning 
to perhaps look at re-racking what we do at Idaho to not cause 
a major loss of skilled people, because as I pointed out on 
this 5-year funding profile, 2009 is the lowest year. We don't 
want to go through one of these periods where we have a dip and 
lose people and then you can't get them back to do the work. So 
we are ready, willing and able to do that.
    I will also tell you, Mr. Wamp, that we are working very 
carefully with Gerald Boyd down there, the site manager, to 
work on our acquisition planning and our project planning for 
this integrated facilities disposition plan so that when other 
work finishes up in the 2011 timeframe, we don't lose that 
workforce and still have all of that major work to do.
    So again, with the idea that we do the best we can and we 
try to make the right decisions for the communities and for the 
nation, that is exactly what we are doing.
    Mr. Wamp. My staff actually wrote a note on here that said, 
he is going to say that it is all based on risk reduction, et 
cetera. [Laughter.]
    But let me also just put in here the caveat that we see is 
that if your site does a really good job at meeting its 
milestones and cleaning up the site, there is lower risk. And 
so the whole system rewards the ones that are out of 
compliance, not making progress, not meeting milestones. That 
is where the money goes in the budget request, and then we are 
sitting here saying why are we working so hard to make sure 
that we are a model site, and that we meet our milestones, et 
cetera? I know why, it is because that is what you are supposed 
to do, but the system I think is a little upside down.
    Tennessee does have 11 missed milestones, seven of which 
are budget-driven. On January 9, I got a letter from the 
governor--you got a letter from the governor, I got copied on 
it--and I thought, now why is the governor of Tennessee 
sticking his finger in the eyes of the Department of Energy? 
Then the president's budget request came out February 4, and I 
said why is the Department of Energy sticking their fingers in 
the eye of our governor?
    It is right at Mr. Simpson's question here. Our site is a 
little different on those missed milestones. It is not just a 
fine. It is that we have an incinerator that the state permits. 
You have to turn right around and ask the state for a permit to 
use the incinerator. So it is a whole lot more than just paying 
a fine and going on.
    Frankly, the letter that the governor wrote here is about 
as tough as one we have seen, and I have been on both sides of 
this thing, with a Democratic administration, Republican 
Congress, now Republican administration and a Democratic 
Congress, a Democratic governor or a Republican governor. I 
have literally seen every view of this prism in the last 14 
years, and this is very serious.
    The environmental management missions at the Oak Ridge site 
are my critical care patient. And we have to find a way somehow 
to get back to square one so that we don't end up so sideways 
with the state that we can't even carry forward on our 
missions. It is not as easy as to say the low-risk priorities 
can wait. It is not just that simple with us. It is a whole lot 
more of an integrated site on a variety of fronts, and we have 
to have the cooperation.

                 INTEGRATED FACILITIES DISPOSITION PLAN

    Now, I want to close with saying I really appreciate you 
mentioning IFDP without me bringing it up, because it is a 
little awkward to even bring up the integrated facilities 
disposition strategy at a site like ours when we don't even 
have adequately funded yet the current accelerated cleanup 
milestones and missions of the Cold War legacy that is out 
here, and that is underway, talking about and then where do we 
go after that.
    But when you are talking about workforces, like Mr. Simpson 
is, it is very important because, again, we are trying to 
maximize efficiency. So we want to go ahead and set up the 
long-term strategy of cleaning up this and this and that 
because we see this as a very serious responsibility of the 
federal government.
    We made a decision to build up the nuclear deterrent, and 
there is an environmental legacy associated with it, and we 
can't retreat from it. I mean it literally is like your home. 
If there is a big mess in your home, you are not going to keep 
functioning as a family until you stop and clean it up. That is 
where we are at.
    So IFDP is important. I think it is great long-term 
planning. Are there other sites around the country that have an 
organized plan like the IFDP in Oak Ridge to look at beyond 
accelerated, beyond the current closure, how do you maintain 
the budget authority, the workforce and the momentum to go 
ahead and finish cleaning up within the fences of what are 
state-of-the-art facilities.
    I mean, the Y2 national security complex and the Oak Ridge 
National Laboratory are really two of our jewels now in the 
whole system. In the modern era, they have gone through a 
transformation, but it is very ironic to have brand new 
buildings prepared for the balance of the 21st century next to 
World War II-era buildings that literally look like Quonset 
huts that need to come down. They literally are side by side. 
It is almost like you are caught in a time warp of two 
generations.
    Mr. Rispoli. I would say, in all honesty, I think that the 
Oak Ridge site has done the best job I know of of any in 
looking at their future needs and how to integrate their future 
needs with their present. I think you must know that when I 
talked about the acquisition planning and the project planning, 
they have had an industry day. We have been seeking input on 
how to approach this.
    We recognize that this is important, and we recognize, too, 
Congressman Wamp, that we can't afford to lose the workforce 
and then have to spike them back up again. What we did this 
year at Oak Ridge because of the relative risk ranking, we 
basically took whatever shortfall there was and focused it on 
ETTP, believing that that would limit the slowdown to that one 
particular area. It will delay the completion. Instead of the 
2010, 2011, 2012 timeframe to probably 2015, because of the way 
that we prioritized the work at Oak Ridge.
    Again, our objective is to be sure that the planning for 
the IFDP can be done in such a way that using this funding 
profile that we plan to, that we gave to the Congress last 
year, we preserve that workforce and can recommence and pick up 
that work as we go forward.
    Mr. Wamp. Mr. Chairman, thank you for your courtesy. I know 
I went over the 5-minute limit.
    Mr. Visclosky. No, no. Thank you very much, Mr. Wamp.

                     MISSED MILESTONES CONSEQUENCES

    Mr. Rispoli, I am going to return to Mr. Simpson's line of 
questioning about the compliance milestones and project 
management. But before I do, I would follow up on Mr. Wamp's 
observations and the dilemma we have talked about on the 
committee and the dilemma I think we face. And that is for 
people who are doing their very best and showing results, 
depending on where they fall on a risk continuum, we tend to 
assume they will be taken care of at some future date or they 
can take care of themselves.
    For others who year after year and going back 10 years, 
continue to fail as far as project management, operational 
systems, changes that don't pan out, huge overruns in their 
budget, because of the public risk, it is very difficult for us 
to propose corrective action. I have an impulse to just, well, 
you don't need any more money. I am not saying, you, but that 
project, that manager, that system, that location, they don't 
need any more money. You can't do that.
    On the other hand, no, listen, we are going to do a better 
job next year, and there are several sites--we are going to 
talk about some of them--we are having the same conversation 
today that we had in 1998.
    And I must just express my frustration with that, that I 
don't know how to get at that problem, to really force some 
corrective action in some of these areas.
    Mr. Simpson did cover a lot of material in the waterfront 
on compliance. But it is an important area, and I would like to 
discretely go down some areas with some additional fill-in 
questions.
    On each of these, for the record, we certainly would want 
to know, from a budgetary standpoint, because we do have the 
sheet that you provided the committee yesterday. For each of 
the milestones that are being missed, for a budgetary reason, 
whether it be 2008 or 2009, what is that dollar amount? 
Because, for example, with the $800 to $900 million spread, 
that is a huge volume. And we had an interchange with the Army 
Corps earlier this morning where we had 54 lines of 
justification for $2.5 billion. I suggest that that is just not 
going to do it.
    So in each of these, I would appreciate per milestone, what 
the budgetary implications are.
    For the waste isolation pilot plant, the fiscal year 2009 
budget request is $211.4 million. That is a decrease of $23 
million. Again, I would ask, and it would be true for each one 
of these, if you could enumerate specifically, which milestones 
are being missed.
    Also relative to WIPP, since this is a disposal facility, 
are there other sites that will miss milestones due to the 
level of funding proposed at WIPP. And I would ask you that 
now.
    Mr. Rispoli. I think it is fair to say that WIPP should be 
able to handle everything that is destined for WIPP, but that 
for certain sites the amount that they can package and ship 
could possibly change.
    Now one of the things that we just announced, yesterday, or 
the day before, when we passed along a copy to you is, an 
ammended record of decision whereby we will use the Idaho 
facility, the advanced mixed waste treatment facility, and we 
will take transuranic waste destined for WIPP from other sites 
and, in order to get a better efficiency and use equipment that 
is already in place in Idaho, bring that material to Idaho so 
that it can be prepared to be shipped to WIPP and then be 
shipped directly from Idaho to the Waste Isolation Pilot Plant.
    So again we are trying to do things that are, perhaps, more 
innovative, to minimize the impacts of our ability to ship 
waste from throughout the complex to the Waste Isolation Pilot 
Plant.
    Mr. Visclosky. And it would be true for this in each of the 
subsequent questions in this field, if there are fines or 
penalties per compliance miles, then we would want to know what 
those anticipated fines or penalties are. At the Idaho National 
Laboratory, for the 2009 budget, the request is $447.4 million, 
a decrease of $76.1 million below the 2008 inactive levels. At 
this funding level, are you deferring the decontamination and 
decommissioning of buildings, and slowing of varied waste 
retrievals? And are there any other additional missed 
milestones as a result of this?
    Mr. Rispoli. Mr. Chairman, at Idaho, we would in fact slow 
both retrievals of waste as well as D & D, but I would point 
out that there are other high-risk activities, including 
milestone driven that will be met, such as ground water 
treatment in certain areas on the installation, shipment of 
transuranic waste to the Waste Isolation Pilot Plant.
    Still making good progress on the tank farm and getting the 
tanks empty. And as I mentioned we would still continue on with 
construction of the sodium bearing waste project.
    We are considering at Idaho as I alluded to, but it might 
not have been clear, we are considering, if we don't put a real 
push on getting the construction for this new construction 
project done to treat the sodium bearing waste in the three 
remaining tanks that have that waste, could we in fact, avoid 
the loss of skilled workforce that are doing these other tasks. 
And the answer appears to be that we can do that.
    And so we are looking at those types of things, too, to 
mitigate the negative impact that could occur and the loss of 
skilled people at Idaho. Right now we are projecting no missed 
milestones at Idaho even though we are beating a number of 
activities that are driven both by milestones and by risk 
reduction.
    Again, as you correctly pointed out, the focus on where 
money would not be sufficient would be in the areas of D & D 
and also some waste retrieval. But we think from a risk 
perspective again we have made the right decisions in that 
regard.
    Mr. Visclosky. At Oak Ridge, for 2009, you have a decrease 
of $40.4 million. At this funding level, are you in compliance 
with the federal facilities agreement?
    Mr. Rispoli. At Oak Ridge, that is the place where, I think 
I mentioned earlier, at which we probably have the most 
milestones in jeopardy. It would be a total of 11 in 2008 and 
another 9 in 2009. All but two of those are budget related. And 
again, the combined value of those would be about $65 million. 
But I would point out that----
    Mr. Visclosky. So you wouldn't be in compliance with the 
federal facilities agreement?
    Mr. Rispoli. I am not sure that it is the federal 
facilities agreement. There are several agreements at Oak 
Ridge. We operate typically under RCRA, under the Toxic 
Substances Control Act, under several, so they may not all be 
directly tied to the FFA. But I would point out, as an example, 
what we consider to be a very high priority at Oak Ridge, is 
getting the uranium 233 out of building 3019. That is driven by 
no milestone. And we have put a very high priority on that and 
intend to continue to make progress on that project. And that, 
by the way, is one which this committee directed EM to do. It 
was previously an NE responsibility, Nuclear Energy, and we 
have taken that on, and we are making very good progress on 
that now.
    Mr. Visclosky. At Richland, the budget request for 2009 is 
a reduction of $48 million below 2008. At this funding level 
are you in compliance with the tri-party agreement?
    Mr. Rispoli. We would have at jeopardy as many as four 
milestones in 2008 and another 14 in 2009, but only 7 of those 
14 would be due to budget, and none of those in 2008 would be 
due to budget.
    We have been in dialogue with the state. I have been out 
there several times working on the issue, primarily driven by 
the tank waste, the delay in the treatment of the tank waste. 
The short answer is, yes, we would have several milestones in 
jeopardy. But once again, we believe that we have picked the 
lower risk-related milestones. We need to dialogue with the 
state to see whether they would concur with the milestones that 
we believe are the lowest risk milestones.
    Mr. Visclosky. I would then have the same series of 
questions about the milestones tri-party agreement and 
penalties for the Office of River Protection, where there was 
an increase of $9.8 million in 2009. For the Savannah River 
site, there was an increase in the budget of $63 million, and 
again would have the same series of questions.
    I would have the questions relative to clean-up activities 
at Los Alamos National Laboratory, where there was an increase 
in the funding request of $10.4 million. I have the same 
request for clean-up activities in Nevada, I saw a decrease as 
far as budget request, of $14.8 million.
    I have a request for the West Valley site. We saw an 
increase in funding of $3.5 million.
    Next is the Brookhaven National Laboratory, which has a 
decline in funding of $19.9 million.
    For the Stanford Linear Accelerator Center, which is 
declined by $1 million. And also for the Moab site, that saw an 
increase in $6.8 million over the enacted level.
    If I could ask you about the renegotiation of these 
milestones, and again, there have been some conversation about 
that, what protections does the government, do the taxpayers 
have, that in these negotiations, well, just to get somebody 
off our back. You do have a new administration, we have a new 
Congress coming in. Look, I will agree to anything to get you 
off my back.
    And so we are going down this road. I miss a milestone, 
boom, I am in a new agreement to get some regulator, someone 
off my back. And maybe it is an appropriate agreement. But 
suddenly now there is a new program, there is a new tank, there 
is a new process, and there is a new cost. And we have seen 
that occur over the years.
    What direction, what controls do you have over this so that 
when whoever is here next year is having the same discussion, 
that, hey, wait a minute, somewhere over the last 12 months, 
because of some anticipated missed milestones, whether it be 
funding or contractor failure, all of a sudden somebody took a 
hard turn in the road. And we have a whole new program now that 
has been promised and contractually entered into. How can we 
best make sure that that doesn't happen?
    Mr. Rispoli. Mr. Chairman, I think you have hit on exactly 
the problem that helped get us to where we are. When there was 
a shortfall of money in a given year and negotiations were 
being done in good faith, those milestones would be moved out 
to a future year with the hope and the expectation that the 
funding would be adequate.
    When I said we spent 18 months redoing all of our costs and 
schedules, we redid all those costs and schedules to this 5-
year funding profile we provided to you last spring. And all 
the milestones are imbedded in there.
    So now our site managers can sit down with the regulators 
at each state and say this is our long-term funding profile, 
and discuss with them what can we do and what can we not do and 
share where are the priorities.
    Because there is enough detail now, it is broken down to 
what I call the work breakdown-structure-level work packages, 
with the best estimate cost, worst estimate cost, early finish, 
late finish, so we now have for the first time, enough 
information to sit down, really at the micro level, not just 
roll it up to present to you, but at the micro level at each 
state, to sit down and do something that is much more credible 
and much more reasonable.
    So when I mention we wanted to restore our credibility with 
the Congress, it is not only with the Congress, it is with the 
regulators, with the communities, because for the first time we 
have that information, all independently audited. It has never 
been done before.

                         EM PROJECT MANAGEMENT

    Mr. Visclosky. I have one more series of questions for this 
round for myself for project management and would have a 
question for Mr. Owen after that. And then if I could turn to 
Mr. Simpson.
    On project management, the May 2007 GAO report on DOE 
project management says that despite considerable efforts to 
improve, such as training for federal managers and having 
contractors implement their own value management systems, 
overall performance on DOE's projects has not substantially 
improved.
    Performance goals for line-item projects were only met one-
third of the time. Starting in 2004, DOE began reporting 
performance information separately for EM clean up activities, 
funded from operating funds, rather than as individual line-
item construction projects. Prior to this time these operating 
projects were included with the line-item construction 
projects.
    Since February 2004, these operating projects met cost and 
schedule performance goals only about 21 percent of the time. 
Can you give us some examples of EM operating projects in your 
costs?
    Mr. Rispoli. Yes sir, I can. Basically, right now, EM has 
only a handful of capital projects, so let's get those set 
aside first. The Waste Treatment Plant at Hanford, the sodium 
bearing waste project at Idaho, the Salt Waste Processing 
Facility project at Savannah River, are among the handful of 
line-item projects we have. The other 70-plus projects are not 
funded as capital projects. They are operating-funded.
    In June of 2005, EM signed a commitment that all of those 
operating projects, over 70 of them, would come into full 
compliance with DOE order 413, which is the project management 
order. That was not done until June 2005. In fact I signed it 
as the director of the Office of Engineering Construction 
Management before coming to this position.
    When we first got started with this, as I mentioned, I have 
this sheet but this is a report by OECM and, from July of 2005, 
that shows that we had 17 projects that were not green, they 
were red or yellow, which gave us a track record of only about 
51 percent on cost on schedule.
    I honestly don't know where GAO got 21 percent. I can't 
find anything as low as 21 percent. But I did find for this 
report about 51 percent that were on cost, on schedule, as 
opposed to 21 percent.
    Now what we do, this is again an Office of Engineering 
Construction Management chart, and Mr. Chairman, I am very 
happy to tell you, that with a lot of hard work by a lot of 
people at all of our sites, we now have only one project that 
is not green.
    You see this track record starts down here at 80. This was 
in August of 2005, and you can see it gradually but 
persistently climbs to the point that we are now near 100 
percent.
    Our objective is to maintain 90 percent on cost on 
schedule. We have not been below 90 percent since August 10 of 
2006. So when I talk about credibility, it is not only having 
accurate cost and schedule ranges, but performance. Right now, 
the Environmental Management program is unequaled in the 
Department of Energy in the percentage of our projects that are 
on cost and on schedule----
    Mr. Visclosky. On operating projects, what is your level of 
confidence in the cost estimates?
    Mr. Rispoli. All of those ranges are audited to the 80 
percent confidence level. But it is a range, Mr. Chairman. In 
other words, when you are looking that far out, you have to 
have a range.
    Mr. Visclosky. It is audited to 80 percent. What is your 
confidence level in these cost estimates?
    Mr. Rispoli. I have a very, very high degree of confidence 
in these cost estimates. I do not know what else we could have 
humanly done within the understanding I have of project 
management and cost estimating to do a better job than we have 
done in getting these cost estimates to the 80 percent level.
    Mr. Visclosky. I believe you gave it your best shot 
possible----
    Mr. Rispoli. I will tell you, we do not fund then into the 
80 percent confidence level. The operating projects that we put 
into the budget are not put into the budget at the 80 percent 
confidence level, they are put into the 50 percent confidence 
level and there is quite a difference between how much you 
would have to have--we do not think it is prudent to budget to 
the 80 percent confidence level because it would greatly 
constrain what we could do with the money we have.
    So as a result, when I mention those 34,000 contractual 
employees, we challenge them every day to perform, because the 
funding they have is not to the 80 percent, it is to the 50 
percent confidence level.
    Mr. Visclosky. I just was going to ask the same thing. I 
have been waiting to hear the 50 percent.
    Mr. Rispoli. Yes sir. Every project when you develop it is 
made up of many many building blocks, and every one has an 
optimum, or a best case and a worst case, for both cost and 
schedule. And it most likely is somewhere in the--you can 
actually calculate, using standard tools available in any 
profession, what is the right number to the 50 percent 
confidence level. Which means, 50 percent, I will make it, 50 
percent, I won't.
    Or even to the 100 percent. But it goes like asymptotic--
the curve goes way up. So the standard in industry generally is 
to--like in capital construction in the private sector, is to 
estimate to the 80 percent confidence level. We have adopted 
that, using that for all of the value of our portfolio. So the 
life cycle cost of our entire portfolio has been developed with 
a range that gets you to the 80 percent confidence level. 
However, because the curve goes asymptotic, the amount of money 
you would need, we can't afford to budget to the 80 percent for 
a program this size.
    So we budget to the 50 percent.
    Mr. Visclosky. I didn't understand your answer at all.
    Are you saying that you are 800 or 900 short for 2009 or 
are you only--I don't understand what you are telling me at 
all.
    Mr. Rispoli. The life cycle cost of our program, if you 
look at how long will it go and how much will it cost, is all 
estimated to the 80 percent confidence level.
    Our budgets that we submit are budgeted to the 50 percent 
confidence level.
    Our capital projects----
    Mr. Visclosky. Okay. For EM for 2009, are you only asking 
for half the money?
    Mr. Rispoli. No, sir. No. We are asking----
    Mr. Visclosky. I just don't understand what you are getting 
at.
    Mr. Rispoli. On our capital projects, we asked you for the 
80 percent confidence level. That is what we are----
    Mr. Visclosky. Do you understand?
    Mr. Simpson. I think so.
    Mr. Visclosky. You probably do.
    Mr. Rispoli. We are 80 percent confident that we can 
deliver the capital projects for the amount we asked for, 
capital projects.
    For operating projects, which is the vast majority----
    Mr. Visclosky. Your confidence is 50 percent.
    Mr. Rispoli. Yes, sir. The amount we have asked for would 
get us to the 50 percent confidence level.
    Mr. Visclosky. Why the lack of confidence? I am just trying 
to think through this.
    Once you know what your facility processing--I would assume 
there would be a greater level of predictability.
    So much of what happens at the Department of Energy is 
unique when you start down that road. But once you kind of have 
your program, I would assume there would be a greater level of 
predictability.
    Mr. Rispoli. I think what causes the uncertainty are the 
risk and the assumptions. For example, as an example, you could 
be working on a process that is going along fine and then, all 
of a sudden, let's say there is an unexpected rupture of a drum 
and you have to shut down the operation for 2 or 3 months while 
you recover and say what happened.
    We had a case at Hanford recently where there was a spill 
of radioactive material out of a burst hose. We shut down the 
operation for months.
    Those types of risks introduce the uncertainty and when you 
are budgeting for that, you have to allow for that uncertainty.
    The question is do you want to say, ``Hey, I have a 50/50 
chance of making this cost and this schedule,'' or do you want 
to have the 80 percent confidence level.
    All of the estimates we have take us to the 80 percent 
confidence level. But for the operating projects, we budget to 
the 50 percent confidence level.
    For the capital projects, we do budget to the 80 percent 
confidence level.
    Mr. Visclosky. It is becoming clearer.

           FUTURE CLEANUP SITES TRANSFER TO LEGACY MANAGEMENT

    Mr. Owen, you have been very patient. I understand you are 
planning to receive eight sites in fiscal year 2010.
    Are there any pension liabilities associated with these 
sites and could you explain?
    Mr. Owen. At 2010, sir, the site would have pension 
liabilities associated, where there would be the transfer from 
EM to LM of the Mound site at Miamisburg, Ohio.
    Correct, none of the other sites would have pension 
liability. Just the Mound site in Miamisburg, Ohio.
    That site has a worker population of 656 retirees, 787 
additional deferred, but vested, potential retirees, for a 
total of approximately 1,400 people at about a total of 1,800 
medical recipients at that site, because you have spouses and 
dependents.
    Mr. Visclosky. Fair enough.
    Do you want to?
    Mr. Simpson. Yes. I will let you drink, Mr. Owen.
    Mr. Owen. I thought they were going to back to you, Jim.

                       MONITORING WELLS IN NEVADA

    Mr. Simpson. A couple of questions here.
    Your fiscal 2009 budget request, $10 million for installing 
deep monitoring wells at the central Nevada test area site, is 
a fourth of your request for all long-term surveillance and 
maintenance activities.
    I understand that given the depth of groundwater at the 
site, oil drilling techniques are required to be used.
    While that explains part of the projected costs, I am still 
unclear why this activity has been given such a high priority 
in the LM budget.
    How far will these wells be from population centers? Is 
this activity required by statute or is this an arrangement 
between DOE and the state of Nevada?
    And although I think these are one-time costs, anticipated 
one-time costs, what are the ongoing costs associated with it?
    Mr. Owen. Yes, sir. One, when the Nevada offsites were 
transferred from Environmental Management to Legacy Management, 
in that transfer were targeted dollars for these wells to be 
drilled.
    We are still working with the State of Nevada to determine 
just what is the most practical and needed means of drilling 
the wells. The wells are called for at the one site in a 
Federal Facilities Agreement and a consent order signed between 
the Department of Energy and the State of Nevada.
    Some of the other Nevada offsites have configurations of 
wells, but each site is somewhat different.
    This particular site is pretty isolated. It is pretty 
remote. So from that standpoint, there is no immediate 
population center that is very close to the site.
    We want to and we have agreed with Nevada to confirm and 
continue to ensure that the way we have characterized the 
subsurface contaminants is indeed correct and accurate.
    Whether or not it is actually one well or multiple wells, I 
think it will be probably multiple wells, maybe upwards to as 
many as three wells in that price tag.
    Mr. Simpson. So it is the $2 million. If we don't know how 
many wells, is that budgeted--to what confidence level?
    Mr. Owen. I don't have the technical expertise to tell you 
if it is one or three. For some reason, in the back of my head, 
I believe they say that when they refer to that well drilling, 
it is actually three different shafts that would comprise the 
well.

            CONSOLIDATED RECORDS FACILITY IN MORGANTOWN, WV

    Mr. Simpson. Okay. Also, you are requesting funds to 
consolidate records in order to move them, in fiscal year 2010, 
to a new storage facility in Morgantown, West Virginia.
    Currently, those records are at five federal records 
centers around the country.
    Is this facility on track for being ready to receive the 
records in 2010? Was your budget request--is this a lease or, 
rather, a purchase? And how much will this be if it is a lease 
for a long-term lease and how much will be saved by 
consolidating these records?
    Mr. Owen. The proposed facility is on track at this time. 
We are currently awaiting a final offer from a developer 
through GSA. I believe that offer is scheduled in tomorrow, 
literally, and it apparently is going to be on time, and then 
GSA will analyze it to see the appropriateness of the offer.
    We will have to pay some unique startup costs, in other 
words, unique equipment we will have to purchase with our funds 
and then the rest of the costs will be in a long-term lease, 
which I believe is going to be about $1.4 million per year.
    It is a very standard leasing procedure that GSA has used 
to accomplish these projects for other federal agencies.
    I will have to answer for the record, if I could, the 
actual--our cost estimated on savings over a number of years by 
consolidating at one location versus five. That all has been 
looked at.

    Cost Savings for the Legacy Management Records Storage Facility

    A project alternatives analysis was performed by DOE-LM in early 
2007 to compare life-cycle costs for several alternate approaches for 
fulfilling the approved mission need for a consolidated records storage 
facility. The selected approach was a long-term lease of a build-to-
suit facility.
    The estimated cost for a 25-year life-cycle of consolidating all 
the records in a build-to-suit leased facility would be $223.6 million. 
The life-cycle cost estimate for retaining the present situation with 
the records dispersed among five national archives facilities would be 
$251.7 million. The resulting cost savings, which are calculated based 
on a comparison between the costs of using five national archives 
facilities versus a consolidated facility would be $28.1 million.

    Mr. Simpson. What is going to happen with the five 
facilities out there now?
    Mr. Owen. They are National Archives facilities, so they 
will continue keeping records for others. Our records are 
retrieved somewhat more often than others.
    A lot of our records are medical records of former contract 
workers at the plants and they are pulled up for health 
surveying purposes.
    But the five centers are currently part of the National 
Archives network.

                           TRANSFER OF ASSETS

    Mr. Simpson. Okay. Thank you.
    Jim, talk about transfer of assets. As you know, we have 
talked about transferring and when you look at EM's total 
liabilities out there, there are liabilities that aren't 
assigned to EM that are truly EM liabilities, but they sit 
under NE and other types of things.
    So when we have talked about transferring some of those 
assets from NE to be more appropriately under the EM budget, 
and I understand why the department has some problems with 
that, while, philosophically, they agree with it, if you are 
going to transfer the assets and not transfer any money to 
handle those liabilities, you have got some problems.
    What is the department doing so that we have a more 
accurate record of what our EM issues are out there and where 
they should be located?
    Because I would rather have them under EM so I know exactly 
what they are, whether I transferred the money to actually deal 
with them or not, so that I know what I need in total EM 
dollars to address these, rather than having some maintained 
under NE, where I don't think they should be.
    Mr. Rispoli. Yes, sir.
    Congressman Simpson, in August of 2006, a policy directive 
was issued with concurrence of EM, NNSA Science Nuclear Energy 
that basically says that EM will receive all excess facilities, 
including the contamination that goes with them.
    We actually put out a call for those. Mr. Wamp talked about 
the IFDP. That is but one of them. With this complex 
transformation of NNSA, with NE at Idaho, basically, we have 
gotten responses from Science, from NNSA, from Nuclear Energy 
to a call that we just put out late last year and we are now 
evaluating how to best incorporate these facilities and 
properties into the EM inventory.
    What you may be referring to, though, is not included in 
that policy memorandum that was issued back in August of 2006, 
and that is nuclear materials that may be in the buildings as 
opposed to waste or contamination.
    For example, if there are inventories of uranium or things 
like that, that is not really an EM mission to deal with 
products that are not waste or contamination.
    So what we are doing with those is referring them to this 
nuclear consolidation committee that I mentioned. It has a long 
name. But it is headed by Bill Ostendorff, the principal deputy 
administrator, now. It used to be headed by Charlie Anderson.
    And they will be looking at all of these non-waste type 
materials that are in the inventory of NE, for example, to 
determine what is the best way for the Department to handle 
those.
    So if you follow the distinction, the real property, 
including the buildings and the grounds and any contamination 
clearly would come to EM as part of this protocol that we are 
working on.
    What is not yet resolved is what will happen with the 
materials that are not waste, that could have a value to the 
nation.
    Mr. Simpson. Will a final decision on this be made this 
year?
    Mr. Rispoli. My belief is a decision will be made on that 
this year. Yes, sir.
    Mr. Simpson. Because if we don't, new administration and 
new Department of Energy, et cetera, et cetera.
    Mr. Rispoli. Yes, sir.
    Mr. Simpson. That would be one of the important things I 
think we get done this year.

                CONTINUED OPERATION OF H CANYON FACILITY

    The DOE has announced plans to extend the operations of the 
H Canyon facility at Savannah River, to extend it to 10 years, 
to process spent nuclear fuel from the site's now shut-down 
reactors, spent nuclear fuel from foreign and domestic research 
reactors and surplus high enriched uranium inventories from 
throughout the complex and that have no other disposition 
pathway.
    Operation of H Canyon is expected to cost approximately 
$200 million per year and this project is expected to cost 
upwards of $5 billion before H Canyon is scheduled to shut down 
in 2019.
    DOE justifies the project, in part, by citing the Floyd D. 
Spence Defense Authorization Act of fiscal year 2001 and 2004, 
which requires the department to continue operations and 
maintain a high state of readiness at H Canyon.
    The Department of Energy invested a lot of money and time 
in developing environmental impact statements under the last 
administration to identify disposal pathways for spent nuclear 
fuel.
    In the example of aluminum clad fuel, I believe the record 
of decision was to can it and send it to Yucca Mountain.
    Why has the department decided to reprocess it now?
    Mr. Rispoli. I think that the answer to that is that as the 
value of uranium has gone up, that it puts the uranium 
inventory the department has into a different perspective.
    And, yes, you are correct, with the--I think it is Public 
Law 107--no, maybe it is not 107-107, but the law that says we 
must operate H Canyon. But, in fact, that Canyon is the very 
last what I would call chemical process capability in the 
inventory that can do this type of a thing.
    And, for example, the clad fuel from Idaho would go to this 
Canyon to be processed.
    We believe there is great value in retrieving that. We 
actually have, as part of the working plan, an actual map that 
shows what uranium products could be processed through H 
Canyon, from where and where they would go, and I actually have 
that with me that I can share with you, if you like, after the 
hearing.
    Mr. Simpson. Okay. Is the department using it just because 
it is available or because it is the least cost option?
    Mr. Rispoli. The Department is using it for a couple of 
reasons. One is that it has the capability to process both 
uranium and plutonium, and, secondly, it does give us a pathway 
out of the state of South Carolina for the plutonium that is 
being brought into the state.
    As you know, from several sites, Los Alamos, from Hanford, 
from other places, we are now actively shipping plutonium to 
the state of South Carolina.
    This Canyon, along with other facilities that are there at 
South Carolina, will give us the capability to take that 
plutonium and disposition it so that it doesn't reside in the 
state of South Carolina, but actually has a pathway out.
    Mr. Simpson. Under the agreement with South Carolina, do 
you have to have a disposal path for it to bring it in?
    Mr. Rispoli. That is public law and I think that is 107-
107. That is Public Law 107-107.
    Mr. Simpson. What are the capital improvements that will be 
required to continue the H Canyon operations for a decade?
    Mr. Rispoli. I have been in dialogue with the Defense 
Nuclear Facilities Safety Board. They have had questions of us 
on that. They have actually gone to review the facilities we 
have.
    I believe this subcommittee may know something of that. 
They believe that the facility is safe, that you would have to 
do upgrades, what I would call, of a normally expected nature 
to take a 1950s facility.
    But this facility has been upgraded over the years anyway. 
So it is not as though it has been in a time warp since 1950.
    We actually have a business case on it called the H Canyon 
business case. We have had that reviewed by three outside 
experts, not from the government at all, and they believe that, 
if I could use their words, that ``use of the H Canyon is like 
an open-and-shut case.''
    This is very clearly an asset to the nation to use this. 
And that business case is available or is not available?
    It has been provided.
    Mr. Simpson. Is the operation until 2019 and then closure, 
is that a firm date or is that--why 2019?
    Mr. Rispoli. Sir, I would have to take that one for the 
record. I just don't recall the answer to that. I would think 
it is in the business case, but I don't recall.
    Mr. Simpson. Do we have a disposal path for other spent 
nuclear fuel the department might take in after 2019?
    Mr. Rispoli. I understand the question. I will have to take 
that one for the record, sir.

                  Spent Nuclear Fuel Disposition Path

    The spent nuclear fuel within the scope of the Enriched Uranium 
Disposition Project is based on the current inventory of aluminum-clad 
spent nuclear fuel and estimated projection of future receipts and 
spent nuclear fuel to be generated by the Department. Should additional 
aluminum-clad spent nuclear fuel and surplus special nuclear materials 
above and beyond the current scope be identified in the future, the 
Department would need to evaluate possible disposition paths for these 
materials and determine the viable and cost-effective options, 
including operating H Canyon beyond 2019, The Department will continue 
to evaluate this situation as developments occur during the next 
several years.

    Mr. Simpson. Okay. Mr. Chairman.

      MANAGEMENT OVERSIGHT OF HANFORD WASTE VITRIFICATION PROJECT

    Mr. Visclosky. Mr. Rispoli, I would like to turn to Hanford 
at this point in time and I don't know the exact date it came 
over to this subcommittee, but it now stands a decade, and 
asked the staff to pull the House report from fiscal year 1998 
and would like to just read a portion of that.
    ``The Committee has some additional concern about the 
Hanford waste vitrification project. The success of the project 
also rests on the ability of the department to provide high 
level waste from the Hanford waste tank farm to meet the waste 
specifications of the vitrification plant.
    There is a concern that the department is focusing so 
specifically on the contract for the vitrification plant that 
the integration of the entire waste tank system may be 
overlooked.''
    And there were specific dollar figures and other verbiage 
and, to this day, it sounds, I must tell you, unfortunately, 
very familiar.
    Several years ago, under the chairmanship of Mr. Hobson, in 
another report, in this case, a conference report, there was 
also language about the high level waste vitrification program 
at Hanford and its long history of failure.
    Reasons for the increases in funding include contractor 
estimating problems, technical problems in sufficient project 
contingency, and it is unclear what steps DOE will take to 
better ensure effective management.
    That was more than 2 years ago.
    And so I will now ask about Hanford.
    The GAO issued a report on DOE oversight of contractor 
payments at the Hanford waste treatment plant in July of last 
year, at the request of this subcommittee, and wouldn't 
characterize it as flattering.
    According to the GAO, DOE did not adequately oversee the 
contractor to ensure accountability for assets purchased with 
waste treatment plant contract funds, relying primarily on the 
contractor to manage government property.
    GAO found little to no review of contractor invoices or 
supporting documents for the $40 million to $60 million in 
charges that Bechtel billed to DOE each month to help ensure 
the validity of these charges.
    And quoting from the report, ``These internal control 
weaknesses over property, coupled with the lack of DOE 
oversight, created an environment in which government property 
could be lost or stolen without detection.''
    Mr. Rispoli, the WTP project is five construction projects, 
all in some form of construction mode at the same time.
    Is it true that DOE did not assign a property administrator 
dedicated to the project until June of 2006, over 5 years after 
rewarding the contract?
    Mr. Rispoli. Mr. Chairman, we did review that report. I 
don't know if there was never a federal employee, but I do 
know, at the time of that report, there was no federal 
property, personal property expert assigned to that particular 
project.
    Since that report was issued, we have hired not only a 
competent federal employee, but Bechtel has hired 10 employees, 
10, to keep track of the personal property that is basically 
bought for the project and dispersed throughout the various 
very large construction sites.
    So the report is valid. I would not dispute that. I think 
we have taken the corrective actions that we had to take and I 
think they were appropriate, and I think the GAO report was 
correct in pointing that out to us.

                     WASTE TREATMENT PLANT CONCERNS

    Mr. Visclosky. Two years ago, you were here when the 
subcommittee had an oversight hearing on the Hanford waste 
treatment plant, which experienced several cost overruns, from 
$4.3 billion in 2001 to over $12.3 billion in fiscal year 2008.
    And I would like to revisit the status of the WTP, because 
I am still concerned regarding the management of the project.
    The waste treatment plant, as I understand it, is composed 
of five facilities--a pretreatment plant, which receives waste 
from the tanks and then sends the pretreated waste to either 
the high level waste vitrification facility or the low level 
waste vitrification facility, known as the low activity waste 
facility.
    And the two other construction efforts are an analytical 
lab and a balance of facilities activity, such as a steam plant 
and water treatment activities.
    Am I correct in that understanding as far as those 
activities?
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. And that does not include the bulk 
vitrification plant.
    Mr. Rispoli. That is correct.
    Mr. Visclosky. On the issue of treating waste, what is the 
total cost of the low activity waste facility?
    Mr. Rispoli. The low activity waste facility portion--and I 
could always confirm this for the record, but I believe the 
capital cost of it is about $1.1 billion, in that range.
    Mr. Visclosky. And that is just the cost of construction.
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. And you can specifically answer it for the 
record, I understand.
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. Giving us an estimate.
    When will the low activity waste facility be completed and 
ready for operation?
    Mr. Rispoli. The low activity waste facility could be ready 
for operation as early as 2014.
    Mr. Visclosky. And when will the pretreatment facility be 
constructed and begin sending waste to the low activity waste 
facility?
    Mr. Rispoli. If you recall, Mr. Chairman, we actually 
stopped construction for a couple of years on the pretreatment 
facility and the high level waste while we worked through the 
technical issues and the seismic issues.
    So that was kind of like the critical path delay that will 
get us to not before--2019 is what it is projected to be for 
the pretreatment facility.
    Mr. Visclosky. So there will be a gap then between when----
    Mr. Rispoli. About five.
    Mr. Visclosky. About.
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. Can you explain what happens to a facility 
that is completed and it is not going to be used, or am I 
incorrect about that, for 4, 5, 6 years?
    Mr. Rispoli. We have a report, a study that has been done 
called ``Early Low Activity Waste'' that would actually bring 
this plant online in 2014. That report, by the way, is publicly 
available. It is on both the DOE website and an Office of River 
Protection website.
    But we have basically looked at the options to bringing the 
low activity waste plant online early in 2014 so that we could 
actually begin to process liquid tank waste at the Hanford 
site.
    Mr. Visclosky. And you wouldn't need the pretreatment 
facility to do that.
    Mr. Rispoli. It would not have the capability that it would 
have after the pretreatment facility was installed. So what we 
already have in the cost and schedule baseline for this 
project, for the tank farm portion of the project, is an 
interim pretreatment capability that could provide feed to the 
low activity waste treatment plant to let it be in operation as 
early as 2014.
    Mr. Visclosky. How much of the tank waste will the low 
activity waste facility be able to handle once it is 
operational and once the pretreatment facility is operational?
    Mr. Rispoli. I was given a correction on the number of low 
activity waste as being 1.7 billion, not 1.1 billion. So we 
will still confirm that for the record.

                      Low Activity Waste Facility

    The Low Activity Waste facility ($1.748 billion) is projected to 
immobilize about 50 percent of the low activity waste, depending on 
Waste Treatment Plant performance.

    Mr. Visclosky. Yes.
    Mr. Rispoli. The plant is actually sized and has been 
sized, since I was first introduced to it, such that if it all 
began on the same day, the plant would be able to process all 
of the site's high level waste, vitrify all of the high level 
waste into glass canisters to go to Yucca Mountain national 
repository, but only 50 percent of the low activity waste that 
would be kept onsite.
    And the reason is that the plan was and still is to look at 
what other technology could be used----
    Mr. Visclosky. Can I stop you right there?
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. Because it only handles 50 percent, you have 
to look at that now.
    Mr. Rispoli. Yes, sir, that is correct.
    Mr. Visclosky. Why did the department start a program and 
go to all the trouble and design and begin construction of a 
facility that is only going to take half the waste and then 
have to sit here--when did they decide to build a lower 
activity waste facility, what year?
    Mr. Rispoli. I can't answer that, Mr. Chairman. I would 
take that for the record.

   Capacity of the Waste Treatment Plant Low Activity Waste Facility

    The record of decision for construction of the Waste Treatment 
Plant was published on February 26, 1997. The decision then was to 
build a Phase I plant and the award for the plant was in December 2000. 
This Phase I plant was to be capable of treating 10 percent of the tank 
waste by volume and 25 percent of the tank waste by activity in about 
10 years. It was designed to operate for 40 years, so was capable of 
treating 40 percent of the tank waste. The Phase I plant was to 
``verify that the treatment processes would function effectively.'' It 
was anticipated that the remaining 60 percent of the waste would be 
treated in a larger Phase II plant over 30 years.
    Subsequently, testing has resolved much of the early uncertainty in 
the effectiveness of process operations. The Phase I plant design was 
revised in 2003 to increase the capacity to immobilize the entire high 
activity fraction of tank waste in the Phase I plant. Additional 
capacity for immobilization of the larger volume of low activity 
fraction waste was also needed. Thus, alternatives for supplementing 
what began as the Phase I plant in order to treat the remaining low 
activity waste have been considered.
    The original need for including the treatment of the high level 
waste fraction in a Phase II plant has now been eliminated by 
increasing the throughput of the Waste Treatment Plant. Using 
supplemental treatment we estimate the total cost to treat the 
remainder of the low activity fraction will be only about 20 percent of 
the current Waste Treatment Plant capital cost, much less than the 
previously envisioned cost to build and operate a large Phase II plant.

    But I have known it to all be part of the same integral 
project from the beginning.
    Mr. Visclosky. Two, 3 years ago?
    Mr. Rispoli. No, sir. This goes back to the earliest--even 
during the Clinton administration, conceptually----
    Mr. Visclosky. I just think this is fundamental, myself.
    All those years have passed and they designed a waste 
treatment facility for half of the waste. And here we are, I 
read a committee report from 10 years ago, thinking about how 
we are going to deal with the others.
    How could you--you weren't there. How could you do that? 
How could the department do that?
    Mr. Rispoli. The reason is that----
    Mr. Visclosky. What was the thinking?
    Mr. Rispoli. The reason is that the low activity waste, 
when it is eventually processed, by whatever method, would be 
disposed of onsite.
    So, for example, at Savannah River right now, the low 
activity waste is being put into--its fancy name is saltstone, 
but it is really a grout.
    At Idaho, it is being put into a powder type of a form. 
There are various forms it could be.
    And it was believed that there could be another 
supplemental treatment that might even be cheaper than a low 
activity waste plant.
    Mr. Visclosky. That is what they believed then.
    Mr. Rispoli. Yes, sir. That is true.
    Mr. Visclosky. So if they thought there was a cheaper way, 
why didn't they do the cheaper way instead of going halfway 
down one road and, 10 years later, we are still thinking about 
a cheaper way now?

                           BULK VITRIFICATION

    Mr. Rispoli. The current estimate range that we have, if we 
were to build bulk vitrification as a supplemental treatment, 
would be a capital cost of about $600 million compared to a 
second low activity waste treatment plant, which would cost 
about $1.1 billion.
    Mr. Visclosky. No, I am talking about before. It may be 
lower cost today. Did they know that 10 years ago? I mean, what 
were they thinking about?
    Mr. Rispoli. I think they believed, 10 years ago, that by 
looking at supplemental technologies based upon how they knew 
them then and in discussing with regulators what the possible 
options would be, because it generally has to be acceptable to 
them, that another way could be found to treat the balance of 
the low activity waste that could be more cost-effective for 
the balance.
    They could be treated with----
    Mr. Visclosky. Which leads us to bulk vit today.
    Mr. Rispoli. Yes, sir. But, again, bulk vit would not be 
capable of handling the same types of waste that the low 
activity waste----
    Mr. Visclosky. We are going to get to that.
    Now, bulk vit, is that under construction today?
    Mr. Rispoli. No, sir.
    Mr. Visclosky. That is still a concept.
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. Now, bulk vit, and you talked about the 
potential cost estimates and the fact that you have got 50 
percent of the waste, but the type of waste varies.
    Was bulk vit decided upon because of a renegotiation with 
the state and others because of compliance issues and 
requirements to deal with the waste?
    Mr. Rispoli. I will have to take that for the record, Mr. 
Chairman. I don't know why specifically it was looked at as a 
viable technology.

                      Bulk Vitrification Decision

    There has been no decision yet or selection of a preferred 
supplemental technology for low activity waste immobilization. Bulk 
vitrification is among several technical approaches judged to be 
potentially most effective considering a broad spectrum of criteria by 
a series of expert panel reviews done since 1999. The planning basis 
for low activity waste immobilization is vitrification or a waste form 
``as good as glass'' per the Washington Ecology clarification of their 
position on the form for on-site disposal in their letter of April 25, 
2003.
    The Department will commit to a supplemental low activity waste 
treatment decision once the Tank Closure and Waste Management 
Environmental Impact Statement, as required by the National 
Environmental Policy Act (NEPA), is completed in the fall of 2008. 
However, we will select a preferred alternative for planning and 
funding of development by the summer of 2008, before completion of the 
NEPA process.

    I do know that they were looking at grout at Savannah 
River. They were looking at a powder type form at Idaho and 
they looked at bulk vit as a form in Hanford.
    But I don't know the driving reason from back at that time.
    Mr. Visclosky. I would like an answer to that, because it 
gets back to my earlier comments about compliance, is that 
people are renegotiating these under--and I understand the 
state pressuring the federal government to deal with this.
    I mean, if I am the state of Washington, I am pressuring 
you if you are building a facility to deal with half the waste. 
If you are starting down a road you are only building a 
facility to deal with half of the waste, I am pressuring you to 
do something.
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. And then if it is part of that 
renegotiation, now we are stuck paying for bulk vit.
    The next question is, okay, you have got 50 percent, you 
have got bulk vit. Are you pursuing other technologies to 
address additional low activity waste at Hanford?
    Mr. Rispoli. Yes, sir. We are looking at other things that 
can----
    Mr. Visclosky. Why?
    Mr. Rispoli. For example, we are looking at an----
    Mr. Visclosky. Why? Because bulk vit doesn't take care of 
the rest of the other half of the 50 percent?
    Mr. Rispoli. Bulk vit would indeed take care of the other 
50 percent.
    Mr. Visclosky. So why do you need the other?
    Mr. Rispoli. The other options would be to build a second 
low activity waste treatment building or----
    Mr. Visclosky. Why?
    Mr. Rispoli. To process the balance of the low activity 
waste.
    Mr. Visclosky. I thought you had 50 percent and vit takes 
care of the other half.
    Mr. Rispoli. It would. If we were to do----
    Mr. Visclosky. I come up with 10 percent. I mean, I didn't 
understand the other one at all, but I am coming up with 100 
percent here.
    Mr. Rispoli. If we were to do nothing, if we were to do 
nothing at all, other than build a Waste Treatment Plant, we 
would not finish processing the tank waste until approximately 
2079.
    Mr. Visclosky. Okay, wait. Hold on. However, add bulk vit.
    Mr. Rispoli. But if we add bulk vit, we project we could 
finish by 2046.
    Mr. Visclosky. Okay, 100 percent.
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. So why are you doing the other ones, to 
accelerate that process?
    Mr. Rispoli. If we don't do anything, if we provide----
    Mr. Visclosky. If you do bulk vit.
    Mr. Rispoli. If we do bulk vit, we would finish, projected, 
in 2046, all of the tank waste.
    Mr. Visclosky. And you are done.
    Mr. Rispoli. And we would be done.
    Mr. Visclosky. In 2046.
    Mr. Rispoli. Yes, sir. If we don't do anything, it would be 
until 2079.
    Mr. Visclosky. Right. But you are pursuing bulk vit. But I 
am asking about now the third option.
    Why the third option if you can deal with 100 percent and 
you have a deadline and you know you can be done then? Why the 
extra cost?
    Mr. Rispoli. The extra cost of bulk vit?
    Mr. Visclosky. No, no, no. You are building a third 
facility now.
    Mr. Rispoli. No, no, no. The third facility--I am sorry, I 
am missing it.
    Mr. Visclosky. You are building a new low activity 
facility.
    Mr. Rispoli. No, sir.
    Mr. Visclosky. What is your third option? Are you building 
a second low activity waste facility?
    Mr. Rispoli. What you may be addressing is we intend, as 
part of the cost and schedule, we are looking at building an 
interim pretreatment facility to service the bulk vit facility.
    Bulk vit can process only about two tanks with no treatment 
whatsoever. To process more than two tanks of waste, it would 
need some other form of pretreatment, we believe.
    So I have asked, again, for another--to take this the next 
step and by this summer to have the full business case 
presented to me to show what is the best alternative.
    In other words, should we go ahead with bulk vit the way it 
was originally planned and envisioned? Should we build or not 
build an interim pretreatment? Is it necessary or not?
    And we should have the answer to that this summer. And I 
think that is what you are getting to. The other facility you 
are, I think, referring to is an interim----
    Mr. Visclosky. Is an interim second pretreatment facility.
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. Because the pretreatment facility, as 
designed, doesn't have enough capacity.
    Mr. Rispoli. Will not be online until 2019.
    Mr. Visclosky. Right. But you are saying, under your 
current scenario, with nothing else changed, you still complete 
100 percent in 2046.
    Mr. Rispoli. We would not complete, if we do nothing else, 
until 2079. We have to have some supplemental technology to 
complete in 2046.
    Mr. Visclosky. I thought you just told me if you have the 
low activity waste facility and you do the bulk vit, you are 
done by 2046.
    Mr. Rispoli. I did say that.
    Mr. Visclosky. But if you don't have the bulk vit, then you 
can't complete until 2070 something.
    Mr. Rispoli. That is right.
    Mr. Visclosky. Okay.
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. But now what you are saying is on the front 
end of this, we don't have enough pretreatment capacity to feed 
the low activity waste facility and bulk vit.
    Mr. Rispoli. We will not have a pretreatment capacity 
until--because it was the one that is the most complex and the 
most--we stopped construction on it.
    It will not be ready until 2019. So in order to begin 
processing waste early in 2014, we would need to use bulk vit, 
which could handle, we believe, based upon what we know, two 
tanks.
    But in order to increase the amount of tankage that could 
go through bulk vit, we would need an interim pretreatment 
capability.
    Mr. Visclosky. Because you, even though bulk vit isn't 
under construction, can complete that earlier.
    Mr. Rispoli. Yes, sir, that is correct.
    Mr. Visclosky. And you need an interim pretreatment for 
bulk vit. You essentially need to--but in the end, by the time 
I am at 2018, I have got two pretreatment facilities now.
    Mr. Rispoli. By 2019, yes, sir.
    Mr. Visclosky. 2019.
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. Which gets me back to my earlier comments 
and frustration and anger. I mean, this is somebody's money.
    Who thought this up? And now we are left holding the bag 
here.
    And let me ask you, is there some legal requirement that 
bulk vit can't wait until 2019 with the pretreatment and you 
are simply deferring?
    I don't live in the state of Washington, but you are 
deferring before we now hit the taxpayers with another 
construction project at DOE that, I am guessing, the odds are 
less than 50/50 is going to come in on cost estimate or on 
time.
    Mr. Rispoli. I understand your question. But you hit the 
answer exactly and that is that if we didn't begin until 2019, 
bulk vit could only handle approximately two tanks without some 
form of treatment, for the balance of the tanks we would like 
to send to bulk vit.
    Mr. Visclosky. So who do we punish? What agreement do they 
have with the state of Washington as far as the end, the time? 
What is the agreement?
    Mr. Rispoli. Well, obviously, we have long missed the 
milestones that would have been the original milestones.
    Mr. Visclosky. So we continue to renegotiate----
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky [continuing]. New construction projects for 
new pretreatment plants and the interim pretreatment plants and 
bulk vit plants, and we are still looking at 2046.
    What confidence does the subcommittee have that if you 
proceed with an interim pretreatment facility, that is, from 
what I understand, going to be finished before the one that is 
already under construction----
    Mr. Rispoli. That is right.
    Mr. Visclosky [continuing]. Or the bulk vit plant that is 
not under construction, but is going to be done before the low 
activity vitrification plant is done, that is under 
construction, what confidence do I have that you have got two 
that are already--one is going to sit there for 6 years, 
although you are claiming you are going to use it.
    You have two projects that you haven't even started yet, 
one of which you are thinking about, are going to be completed 
before 2019, on time, on--and do we have any estimate today as 
to what that interim pretreatment facility is going to be, how 
much it is going to cost?
    Mr. Rispoli. Yes, sir. That is why I indicated that we have 
a--the next step to the study that has already been published 
is to help us make that business decision, look at the risks, 
and I expect that in the June timeframe.
    Mr. Visclosky. Let me ask you this, Mr. Rispoli. If you 
ever get the money for the interim pretreatment facility, if 
you get any more money, that is, what confidence does Mr. 
Simpson, any of us have that someone is not going to be sitting 
here 2 years from now, ``Well, you know, we have been talking 
to Washington and, well, you know, this interim pretreatment 
thing, because it is a concept and it is new technology and now 
we realized there is another problem with bulk vit,'' that you 
are going to, ``Well, we need an interim Part B pretreatment 
facility with a smaller bulk vit, while the other one''--what 
confidence do we have that you are not going to come back with 
part five within 2 or 3 years?
    Mr. Rispoli. And I have the same question, which is why I 
have asked for an independent, outside review of what we have 
got so that we can make the best decision in the June 
timeframe, this summer.
    I mean, I have the same question you do. How do we know 
that this is the right way to go? And we do not want to make 
that decision unless we have vetted it and we are confident.
    Mr. Visclosky. Maybe if the contractors, nobody got any 
money for a year, they would pay attention and really would get 
serious about things.
    I read a committee report from 10 years ago. It is the same 
story today in that we are thinking about building a 
pretreatment facility that is going to be done before one that 
is under construction today, that is going to be done in 2019.
    It boggles my mind.
    Mr. Rispoli. I understand.
    Mr. Visclosky. And it frightens me to death from a fiscal 
standpoint.
    Mr. Rispoli. I understand.
    Mr. Visclosky. Frightens me to death. And it does get back 
to this issue of the renegotiations and, again, I understand 
the urgency. We talk to the Washington members all the time, I 
understand, but that people are making these agreements and 
there is a lot of money being spent.
    Mr. Rispoli. Well, it is also correct, Mr. Chairman, that 
the objective is to meet the milestones, but I also believe it 
is absolutely true that the tank waste is a high risk activity 
and we have got to get rid of it.
    And so whether or not we had milestones, which we really 
want to endeavor to meet, this is not something we want to 
leave in those tanks until 2079.
    We, obviously, are trying to make the right decisions to 
prudently get on with it, and I will have much more and be 
happy to get back with this committee when we have that study 
and share it with you.
    But we expect that in the June timeframe.
    Mr. Visclosky. But that is just like this is catch-22. This 
is catch-22. If we don't do anything, well, there is a penalty 
and there is such an abysmal track record out here at Hanford.
    There is speculation we are going to build another facility 
and I have no confidence, even if it all turned out that 
somebody is not going to come back, ``Well, you know, we are 
still short that last 15 percent here, still short.''

     ENVIRONMENTAL IMPACT STATEMENT FOR GREATER THAN CLASS C WASTE

    If I could turn to your office's preparation for the 
environmental impact statement for greater than Class C waste.
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. Your office is responsible for that, as I 
understand it, the impact statement.
    The GNEP program, waste volume accounts for 625,000 cubic 
meters of waste or about 93 percent of the total waste volume 
included in the EIS.
    Can you explain why the EIS is going to address the GNEP 
waste when Congress has not appropriated any funds to build an 
operational GNEP facility?
    Mr. Rispoli. Yes, sir, I believe I can. I have shared this 
with your staff. Perhaps I could have someone bring it up to 
share with you and Mr. Simpson.
    We were tasked with doing the EIS for the Greater Than 
Class C waste by Congress and we have already expended a 
significant amount of effort on that particular project.
    If you look at the chart I have just given to you, what we 
have expended our effort on so far is only in the leftmost 
tier. In other words, it is 4,300 cubic meters, if you see that 
here in the leftmost here.
    In addition, there are two other either known or projected 
sources of Greater Than Class C waste.
    The middle tier, that you see as tier two, includes waste 
from West Valley, the state licensed disposal area, and also 
for new reactors that we now envision the country would build, 
as well as greater than Class C like waste totaling 26,000 more 
cubic meters that would come from an advanced fuel cycle 
facility.
    The pure GNEP part is in the right-hand most tier, which 
would be--you see the amount is enormous, 600,000 cubic meters. 
Our NEPA organization now resides within general counsel. They 
advise us that if we do not consider tier two quantities, the 
middle column, in this EIS, we would jeopardize the entire EIS.
    So the current approach we are taking is to include tier 
one and tier two, but not include the quantities in tier three 
and, in fact, make it severable. So that as we go forward with 
the EIS, if GNEP does not go forward, that entire portion could 
be severed from the EIS.
    Mr. Visclosky. So it is not integrated, it is severable.
    Mr. Rispoli. It would be severable. In fact, the quantity 
itself of 600,000 cubic meters would not even be addressed, 
because it is so huge that it would greatly change where the 
stuff could go.
    So it would be not only severable, but we would not address 
the actual quantity, but rather just, if it goes, it would have 
to be considered at some point.
    Our counsel advises us this is the only way they know to 
protect the EIS process, because NEPA requires that you not 
have severable--you not sever certain aspects of the same EIS.
    So they believe that this will let us get started and then 
at the appropriate time, if we need to shed this, it can be 
severed and we can go forward.
    Mr. Visclosky. On tier two, in the bottom green box, you 
highlight the advanced fuel cycle facility 25,000.
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. That is part of the GNEP program, too, as I 
understand it. Why would it not be also in the far right 
column?
    Mr. Rispoli. My understanding is that the advanced fuel 
cycle initiative--and it is not my program, I could be 
understanding this incorrectly--is required whether or not GNEP 
goes forward.
    Now, I have read excerpts of the hearing with Secretary 
Bodman. I understand this subcommittee's concern about the 
advanced fuel cycle facility. I understand the distinction you 
are drawing between studies and design and design and 
construction.
    But notwithstanding any of that, the view that the 
department has is that if we don't include this, since it is a 
well known entity, that as soon as we progress with an EIS 
without inclusion, we will be challenged in the courts and the 
entire EIS would be in jeopardy.
    Hence, the approach that has been recommended to me, which 
I have shared with staff here before this hearing.

                     SALT WASTE PROCESSING FACILITY

    Mr. Visclosky. Mr. Simpson, did you ask the question about 
the Salt Waste Processing Facility at Savannah River? If you 
didn't, I would want to do that.
    Mr. Rispoli, successful completion of the Salt Waste 
Processing Facility is vital to ensuring continued availability 
of space in the Savannah River site underground high level 
waste storage tanks, as well as feed for the DWPF in a 
saltstone facility.
    However, design and construction of the Salt Waste 
Processing Facility has been delayed and the facility is not 
projected to be open until 2012 or 2013.
    What is the status of the interim salt processing 
facilities at Savannah River and do these facilities have 
sufficient capacity to continue to indefinitely provide feed to 
the saltstone project and the DWPF?
    Mr. Rispoli. Mr. Chairman, there are interim facilities. In 
fact, one of them, the one that simply did a mechanical process 
of dissolution, it completed its mission and has been finished.
    The next two components just went through their operational 
readiness review and are ready to begin their processing.
    As far as all indicators are, those are on schedule and 
capable of performing as intended.
    I don't have one to share with you this moment, but we have 
developed an in-and-out chart that shows what quantities go 
into the tanks and what quantities come out of the tanks at 
Savannah River.
    It goes through the entire life cycle of the project. It 
shows when the Salt Waste Processing Facility comes online.
    We have already brought the inventory down from about 
36,500,000 gallons down to, in fiscal 2008, 36 million gallons. 
By 2009, we should be at 33.9 million gallons.
    This shows both incoming and outgoing fluids from those 
tanks.
    All of this depends upon the interim processing and then, 
at the appropriate time, Salt Waste Processing Facility comes 
online in the 2013 timeframe.
    I would point out that even that 2013 timeframe has 60 
months of schedule contingency. Recall, I had mentioned you 
have the best case and the worst case.
    This table assumes the very worst case. A 60-month 
contingency is included, schedule contingency, and it still 
shows that we can avoid a capacity issue at the tanks at 
Savannah River with the interim and with the Salt Waste 
Processing Facility coming online.
    Mr. Visclosky [continuing]. Because of funding or what we 
talked about earlier?
    Mr. Rispoli. No, sir. This is a very significant issue. 
Basically, it is not so different than what we encountered at 
Hanford with the Waste Treatment Plant. We had seismic issues 
that, if considered appropriately, are protective of the 
workers and the site and the environment.
    And by us directing the contractor to include those seismic 
considerations, we essentially resulted in a schedule that now 
causes the need for the interim processing that we have.
    I think the good news to the story is that the interim 
processing that we have already deployed has worked. We did do 
a Section 3116 determination and have been providing material 
to the saltstone facility, the grout facility, under NRC 
oversight, as you know.
    The new steps have gone through their operational readiness 
review. The next interim steps are built and are ready to go 
and they will cover us until the Salt Waste Processing Facility 
comes online.
    So we believe that we are on a very solid path to managing 
the tank waste appropriately.

                        TANK INVENTORY CAPACITY

    Mr. Visclosky. And what is the approximate compliant tank 
inventory capacity today?
    Mr. Rispoli. The tank capacity is about 37 million gallons, 
plus a one million gallon cushion. So it would be about 38 
million gallons.
    And the chart I have shows that for fiscal 2008, that we 
would finish fiscal 2008 at 36,020,000, down from 36,500,000.
    So we are bringing the inventory down.
    Mr. Visclosky. Here is my chart, and this is an older 
chart. I have got one visual for you and this is old. This is 
June 30, 2004. And the white scheme on the top shows the 
available tank space.
    In relative terms, obviously, it looks like a small margin 
of error.
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. Do you have confidence that there is going 
to be enough capacity as we proceed here?
    Mr. Rispoli. Well, clearly, this is still a small margin. I 
mean, with 37,000 plus a million for reserve, and here we will 
wrap up 2008 at 36--I am sorry--37 million, with a million in 
reserve, we will wrap up at 36 million.
    This clearly takes careful management. I would say that 
with the work of our contractor, the work of our federal 
workforce oversight, we are bringing it down, which is at least 
going the right direction, and there is nothing in this 
projection that shows the inventory will go up.
    It is all in the right direction.
    Mr. Visclosky. But you admit it is a small window.
    Mr. Rispoli. Yes, sir.
    Mr. Visclosky. If something goes wrong with the tank 
capacity, what happens to the overall project?
    Mr. Rispoli. Well, we need that tank capacity in order to 
continue the retrieval operations, the processing of the 
vitrification plant and so forth.
    So, clearly, we have to keep a sharp eye on this and make 
sure that we continue to do this saltstone processing for the 
low activity waste.
    Mr. Visclosky. Can I ask, if there is that margin, does it 
make sense to keep adding more material to the tanks from H 
Canyon? You are claiming that the capacity is continuing to 
increase.
    Mr. Rispoli. The vitrification plant puts into H Canyon 
about two million gallons per year. Just washing the canisters 
and things of that nature puts in one million gallons per year.
    The H Canyon operation puts in only 300,000 gallons per 
year. So the quantity is very small compared to other inputs 
into the tank farms at Savannah River site and this projects 
the continued use of H Canyon.
    So it is one-tenth of just--nearly one-tenth of just the 
recycling from the vitrification plant, which is two million 
gallons per year by itself, whereas H Canyon is 300,000 gallons 
per year.
    So we are aware of all these things and that is the reason 
why we have developed this input or inflow-outflow to be sure 
that we are managing the waste appropriately.
    Mr. Visclosky. Mr. Rispoli, thank you very much.

                 LOS ALAMOS NATIONAL LABORATORY CLEANUP

    Mr. Simpson. Who is responsible for the cleanup at Los 
Alamos, your office or the NNSA?
    Mr. Rispoli. We are responsible for the budgeting, the 
strategy. The oversight of the contractor is the responsibility 
of the NNSA. The actual contractor is the NNSA contractor, 
called LANS, the Los Alamos National Security Consortium, that 
is the university with Bechtel.
    So the day-to-day operations are done by the NNSA under 
their management. We fund the staff for the environmental 
management program, but they are managed, because of the NNSA 
Act, by the NNSA.
    Mr. Simpson. So how much oversight do you actually have 
over it and what is your responsibility other than just 
budgeting?
    Mr. Rispoli. We work very closely. I mean, this is a 
regular topic of conversation seriously, maybe once every week 
or two, between myself and Administrator D'Agostino.
    I have met now Mr. Bob Smolen, the new Deputy Administrator 
for Management of the laboratory. We coordinate this very 
closely with their environmental group within the NNSA, regular 
meetings with them.
    Essentially, if you think of it this way, we provide the 
staffing--and, by the way, they are plussing up their staffing. 
They are woefully short of staffing.
    Mr. George Rael is their environmental manager there, the 
fed in charge. He is a tremendously capable individual. But I 
believe at one point he had a staff of only three to do our 
work.
    I believe he is hiring another 10 people, but I met with 
him 2 weeks ago, he is having great difficulty in attracting 
people to the Los Alamos area. It is very, very difficult, I 
understand, because of its geographic location, the cost of 
living and all those things.
    So we are taking the right steps. When I mention that we 
did this nationwide survey of our sites using the Army Corps, 
we plugged in some contractor people. I think--is it five? Does 
he have five? Do you recall?
    We have plugged in a number of support to him in the 
interim to help him out. I think they are on the right path to 
get themselves properly staffed to manage the contractor.
    So we work very closely together, Mr. Simpson. I don't know 
if that has answered your question.
    Mr. Simpson. DOE is requesting a quarter of a billion 
dollars for cleanup activities at NNSA sites.
    How does the risk at these sites compare with non-NNSA 
sites?
    Mr. Rispoli. We use the same basic approach, to a risk 
management--risk reduction, rather. So we look at the highest 
priorities first.
    Los Alamos, the baseline that was the cost and schedule 
estimating that was done for them that we just finished, it was 
one of the last ones that we finished, would, in fact, require 
significantly more money than we presently have available for 
them, but it is such a new cost and schedule baseline that you 
really couldn't reasonably jump to the level that would be 
required.
    We were funding them at $140 million a year. I think in 
2008 we went to $154 million, in 2009 $164 million. If you were 
to look at the independently reviewed cost and schedule, you 
would need double that.
    But it isn't reasonable to think that you could go this way 
and then go like that and the money could be effectively used. 
So our intent is to continue to ramp the funding resources 
provided to Los Alamos--
    Mr. Simpson. How reliable is that baseline that you are 
talking about with Los Alamos compared with other sites that we 
have?
    Mr. Rispoli. It has been audited to the same degree of 
rigor. I will tell you that it has taken, I think, at least 3 
years to get all of the issues addressed, to be sure that we 
have the same degree of confidence.
    So I won't mislead you. I mean, it took a lot of work. They 
have had a change in contractor. There has been a change in 
personnel. I think they are now on the third manager since I 
have been in this position on the contractor side.
    So I think we have now reached the point that we have a 
pretty high degree of confidence, very comparable to the rest. 
It is just that we would have to ramp the funding up 
significantly to get to what it would take to meet all of the 
compliance agreements that have been negotiated with the state 
out there.
    Mr. Simpson. So we are going to see, in future years, 
continued increases in that budget.
    Mr. Rispoli. Well, we are in the 2010 budget cycle right 
now. I haven't really, myself, seen what we are looking at, but 
the same risk management approach and focus on risk reduction 
would apply as we develop the Los Alamos budget.
    It is a significant issue there. I mean, they have 
groundwater issues that are threatening the drinking water 
aquifer. I mean, it is not--we have significant transuranic 
waste that is stored both above ground and below ground.
    And when they went through the Cerro Grande fire a few 
years ago, they were very concerned about the hazard to not 
only the installation, but to the community at large, that 
could jeopardize really the national security of the country 
because of the importance of that lab.
    So, clearly, we have some work to do to get that situation 
where we need it to be.

                         RISK REDUCTION BUDGETS

    Mr. Simpson. The reason I ask that is I am looking at the 
out years here and we are looking at ramping up Los Alamos 
significantly and then I am looking at your proposed 5-year 
budget, which ramps up slightly, somewhat, over the next 
several years.
    Does that mean that the other sites are going to be looking 
at budgets that continue to go down as we are taking on 
additional responsibilities?
    Mr. Rispoli. I think that the real challenge for us is 
recognition that to meet all the milestones at Hanford alone, 
just the milestones, if we were to try to cover all those, 
would be, in 2009, half a billion dollars.
    And Hanford, meanwhile, when the EM budget went up from the 
beginning of the Bush administration, it was about $1.2 
billion, and it grew to nearly $2 billion, nominally, it never 
came back down.
    So the question that we will have to deal with is, looking 
at the relative risk, what is the latitude we have to look at 
Hanford issues, because a half a billion dollars would go, 
obviously, a long way in anybody's budget.
    And so the approach we are taking is to look at the 
relative risks, but also, now, with this capability to look at 
the individual work elements, we can even look at it, from a 
business sense, would it make sense to get something out of the 
way and be done with it, and that is the approach we are taking 
now as we do the fiscal year 2010 budget build.
    Of course, the fiscal year 2010 budget will never really go 
anywhere. I mean, this administration will not deliver a fiscal 
year 2010 budget, but at least all of the process will be there 
to look at both risk reduction and are there any good business 
case decisions to be made based upon what we now know, with all 
these independently audited costs and schedules.
    Mr. Simpson. Let me just tell you, as we talked earlier 
about this, I agree with the department on what they are doing 
in risk assessment. We ought to clean up the sites that pose 
the greatest risk as quick as we can and really focus our 
resources there, and we all understand that that doesn't mean 
that you can't--that you just ignore the other sites, that we 
have to continue to work on those and that presents problems at 
sites like Oak Ridge and Idaho this year.
    Particularly, we don't want to see the fluctuations in 
funding that create the workforce problems that you have talked 
about and are willing to look at and try to address, and I 
appreciate that, because that does create problems when we are 
trying to--when we are trying to do a job, we lay off workers 
and then, years later, we are trying to hire them back and you 
can't get them back, and that creates special problems.
    So I appreciate the fact that you understand those 
challenges that this creates.
    But, also, I have been out to Hanford and I have looked 
there and I understand that that is a huge problem and we can't 
allow that river to get contaminated.
    If we do, I think the nuclear industry in the United States 
is over, because the American public won't accept it.
    And so it is not just the future of the nuclear industry, 
it is the right thing to do, and it is the future of that 
river.
    I was sitting here listening to your discussion with the 
chairman. I want to see this--everything you guys were 
discussing about--I want to see a picture, so I can understand 
it.
    It is confusing to us and, obviously, it is challenging to 
us and frustrating to us and part of that is based on the 
history of DOE and things we have been told time and time 
again, and we naturally sit back and say, ``Are we being told 
something else that 5 years from now, somebody else will tell 
us something different'' in terms of cleanup.
    Members of this committee, particularly, who have cleanup 
sites should know, 3 years ago, 7 years ago, it was accelerated 
cleanup. Now it is more risk-based and other types of things, 
and we keep seeing changes in policies.
    We want to see some consistency and some things that get 
these sites cleaned up and I think we are willing to put the 
resources in to clean them up, as long as we have some 
consistency, and we are willing to do what is necessary at 
Hanford to clean it up.
    Everyone on this committee understands the challenges there 
and the difficulty. That is a tough site.
    Mr. Rispoli. Yes, sir.
    Mr. Simpson. And when you say we can't afford to leave that 
waste in those tanks until 2076, the problem is it won't stay 
in those tanks. It will be in the river, and we have got to get 
that site cleaned up.
    So I appreciate, actually, your attention that you are 
focusing on Hanford and these other places, even though I hope 
you understand that our job is also oversight and to make sure 
things are done with the taxpayers' dollars that we can 
justify.
    Mr. Rispoli. Yes, sir.

                   FIXED PRICE REMEDIATION CONTRACTS

    Mr. Simpson. One last question I have. This committee 
directed DOE to explore the use of guaranteed fixed price 
remediation contracts for some of your cleanup work.
    Did you give us a report on that? Have you done any trials 
on that? What has been done to date?
    Mr. Rispoli. Yes, sir. I will get you the date of the 
report. The report was signed out to you all actually on 
September 29, 2006.
    And we used a consultant who has done work for the DOD to 
help us with this report, because we learned, actually, from 
this committee staff that the DOD has been pretty successful.
    They are called LRS Federal, LLC is the name of the 
company.
    And we looked at a variety of places and, again, the ones--
there were some that were ruled out right away. For example, 
Stanford's linear accelerator, there were just so many 
uncertainties. The university owns the property.
    There are disagreements between us and the regulator and 
the state that we are working through and I think making good 
progress, but the consultant said that is just a nonstarter. 
There is way too much risk there.
    And then they eventually came down and we focused in on, 
again, a couple of reactors at Brookhaven. The SEFOR reactor, 
we believe, would be a good candidate that was added by EPACT-
2005.
    And there are two gun sites, Savannah River site, that are 
not nuclear contaminated. They are basically hazardous waste 
contaminated, and we believe one of the two would be a viable 
candidate.
    And what we said to you in our letter was that we would 
pick this up again once we finished the C.R. Well, now that we 
have a stable appropriation for 2008, we look at our budget for 
2009 and we realize that, from a risk reduction perspective, 
SEFOR, Brookhaven reactors, where we have obviously cut the 
budget, are just not at the level that we can begin doing this.
    We could begin doing something with any of those at this 
point. It is a matter of the fact that they fall at the lower 
end of the risk priority.
    Mr. Simpson. Appreciate it. Thank you very much.
    Mr. Chairman, one of the things that I would like to see, 
quite frankly, as we develop this budget is I think it would be 
a good idea, when we talk about penalties, that we are paying 
on, so I would like to see a line item in there somewhere that 
the DOE has for penalties, because I hate to see us 
appropriating money for a cleanup site and part of that money 
is going to pay penalties instead of cleanup.
    And I would like it separated out somehow so we know pretty 
much what we are appropriating for penalties.
    Mr. Visclosky. And it would evidence part of the price you 
are paying because of----
    Mr. Simpson. Right, exactly.
    Mr. Visclosky. Not all of them, but----
    Mr. Simpson. Somehow, we ought to be able to do a better 
job of that so that we have some idea of it, because obviously 
the budget level does have some impact on the penalties you are 
going to pay.
    Appreciate it. Thank you, Mr. Chairman.
    Mr. Visclosky. And I do appreciate a couple of things. One 
is the illustration that was provided to me earlier today. I 
was confused between PIT disassembly and MOX, and some people 
were very concerned about this afternoon's hearing, and 
appreciate that. I still got a bit confused myself, anyway.
    But, also, Mr. Simpson, appreciate your attendance. Mike 
does take his responsibilities very seriously.
    And I appreciate the fact that we didn't vote this 
afternoon and that he stayed in attendance. And while he and I 
are desperately trying to come back next year, both gentlemen 
here at the table may not be with us and I do want to take this 
opportunity, Mr. Rispoli and Mr. Owen, to thank you very much 
for your service and for your diligence and hard work.
    Again, as I said in my opening statement, I know you are 
trying your best. It is just very frustrating when you refer 
back 10 years and it is just the same tune.
    Mr. Rispoli. Yes, sir.
    Mr. Stupak. So wish you well and would encourage you, in 
your last year, to just keep plugging away as hard as you can. 
And if we can be of any assistance, too, I would ask that you 
let us know.
    Mr. Rispoli. Well, if I may, I would like to, again, thank 
this committee and this committee's staff for the very, very 
strong interest in supporting our program, and we know that you 
really endeavor to understand it and we appreciate that.
    We understand that and we appreciate it. And we thank you. 
It has been, for me, personally, very rewarding to work with 
all of you on this committee.
    Mr. Visclosky. Good. We are adjourned. Thank you very much.
    Mr. Owen. And I thank you for allowing me to rest my vocal 
cords.
    [Questions and answers for the record follow:]

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                                          Thursday, March 13, 2008.

                DEPARTMENT OF ENERGY--SCIENCE RESEARCH 

                                WITNESS 

RAYMOND L. ORBACH, UNDER SECRETARY FOR SCIENCE

                  Chairman Visclosky's Opening Remarks

    Mr. Visclosky [presiding]. I want to bring the hearing to 
order.
    And, first of all, I certainly want to acknowledge the 
presence of Dixon Butler, who is making what apparently is a 
great recovery.
    It is good to see you here, Dixon.
    Give him a round of applause. [Applause.]
    And on another, personal note, Shari Davenport, who is just 
coming in the door now, worked strenuously all week and 
yesterday, completely through her birthday. But the reason I 
note that is, last night, we were at a dinner, and the waiter 
asked for her ID before he served her a glass of wine at the 
reception. [Laughter.]
    And so, it was a----
    Mr. Hobson. That doesn't happen to me anymore. [Laughter.]
    Mr. Visclosky. So I just wanted to note that for the 
record, if we could.
    Good morning, Dr. Orbach. Thank you for appearing before us 
to discuss the fiscal year 2009 budget request for the Office 
of Science.
    Your office is something of an anomaly in the Department of 
Energy. You do your best to deliver on promises made to this 
committee and to follow the law of the land, a philosophy that 
other programs within DOE should adopt.
    Without your competent management, I would dismiss out of 
hand the 19 percent increase for Science, given that the 
President's request savages other energy and water programs 
under the subcommittee's jurisdiction.
    Before we get into the details of the budget request, I 
would like to highlight some of the bright spots in your 
program. The U.S. continues to lead scientific advancements in 
many areas. The Joint Dark Energy Mission is moving forward. 
You have proposed the Energy Frontier Research Centers 
initiative, an outgrowth of workshops held to identify key 
basic research obstacles to technological progress in critical 
energy issues. And the integration of research and development 
across the Department of Energy.
    And, Dr. Orbach, I know this has been a difficult year for 
the Office of Science, but I confess I am at a loss when 
confronted with people who accuse this committee of cutting the 
Office of Science.
    In fiscal year 2007, Science received a $200 million 
increase in funding in the continuing resolution over fiscal 
year 2006. I would point out that that was one of the very few 
adjustments this committee made across the government at a very 
difficult time in the C.R.
    In the fiscal year 2008 House bill, the office received an 
increase of $717 million more than 2007. However, given a less 
generous funding level in the other body and multiple threats 
of a veto from President Bush, this subcommittee had to 
integrate House and Senate priorities with a much smaller 
allocation. As a result, the Office of Science received an 
increase of only $220 million over fiscal year 2007.
    I am not a logician, and therefore, when looking forward to 
2009, I fail to comprehend the President's logic in requesting 
a huge increase for Science while cutting funding for Energy 
Efficiency and Renewable Energy programs by $467 million. I 
fail to comprehend the reason behind requesting a huge increase 
in Science while decimating the DOE environmental cleanup 
accounts and the water programs under our jurisdiction by more 
than $1 billion.
    From my perspective, floods kill people. The lack of 
navigation facilities impedes commerce and the economy. 
People's health is in danger if their drinking water is not 
clean. Contamination at DOE facilities poses immediate health 
risks. These and many other programs under our jurisdiction now 
also require attention.
    Dr. Orbach, I do look forward to discussing with you the 
choices made in fiscal year 2008 execution and priorities in 
the Office of Science fiscal year 2009 budget request for out-
year planning and overall management.
    We are under serious time constraints, as you probably 
know, and certainly would ask that, between yourself, your 
office and OMB, for not only the requests made as far as 
questions today but those for the record, that responses be 
provided to the committee within 4 weeks.
    And I would ask members for any additional questions and 
comments they have, if they could get those to the committee by 
close of business today.
    But, with that, I would like to yield to Mr. Hobson for any 
opening remarks that he has.

                     Mr. Hobson's Opening Statement

    Mr. Hobson. Thank you, Mr. Chairman.
    Good morning, Dr. Orbach. It is always a pleasure to have 
you before the committee.
    Dr. Orbach, you were sworn in as director of the Office of 
Science back in March of 2002 and were promoted to Under 
Secretary of Science in 2006.
    It is hard to imagine that we have been working with you 
for 6 years now. Some people tell me that time just seems to 
pass by faster for more mature folks like you and me. And I 
prefer to stick with the explanation that time really does fly 
by when you are having fun. Maybe not today, but----
    [Laughter.]
    Mr. Hobson. Seriously, Dr. Orbach, you are one of the few 
senior managers at the department that has earned the trust and 
respect of members on both sides of this subcommittee.
    I believe that what you have accomplished in the Office of 
Science will live on long after the end of your tenure in this 
job. The advances we are making in high-end scientific 
computing alone will make your 6 years worthwhile. We are far 
ahead of what we all thought was possible just a few years ago 
when you and I talked.
    We also value your long-term vision for the Science program 
and the Science labs and your willingness to understand 
congressional concerns and to work with the committee to 
address those concerns. It is too bad that some otherwise smart 
people at the department can't figure out the most basic 
principles of getting along with Congress. And I won't name 
names. But I should. [Laughter.]
    You have been a strong advocate for increased investment in 
basic science research at the Department of Energy, and it is 
unfortunate that politics last fall between the White House and 
Congress led to less funding than you had hoped for in fiscal 
year 2008.
    I hope you believe me when I say that the funding outcome 
last year is not a reflection on you or on this committee's 
view of the Office of Science. As Chairman Visclosky very 
eloquently explained, we have to balance many competing 
priorities--a challenge that becomes nearly impossible when we 
are constrained by artificially low budget requests for our 
energy and water programs.
    I hope the next administration will recognize the need to 
spend enough money to take care of this nation's pressing 
energy and water needs. And to whomever is in the White House 
next year, I wish them luck in finding a replacement for you at 
DOE. Yours will be hard shoes to fill.
    Before I end, I also want to welcome back Dixon Butler 
today. It is great to see him up and about again. And we wish 
him well in his recovery. He didn't want to miss this Science 
hearing for anything, and he really worked to come back for 
this hearing.
    And it is nice to see you, Dixon.
    Thank you, Mr. Chairman.
    And welcome, Ray.
    Mr. Visclosky. Dr. Orbach.

                     Dr. Orbach's Opening Statement

    Dr. Orbach. Thank you, Chairman Visclosky, Ranking Member 
Hobson, for your wonderful remarks. They are very kind. And I, 
too, am thrilled to see Dixon Butler back with us.
    Members of the committee, I am pleased to be able to appear 
before your committee for what I do expect to be my final 
budget presentation for the Department of Energy's Office of 
Science. I would like to thank the committee for your support 
for the Office of Science during my tenure--strong support.
    The president's budget request for fiscal year 2009 
continues his strong and clear support for science in this 
country, expressed through his American Competitiveness 
Initiative and Advanced Energy Initiative, both announced in 
2006.
    Congress has shown strong bipartisan support for an 
aggressive innovation and energy security agenda through the 
Energy Policy Act in 2005 and the America COMPETES Act and the 
Energy Independence and Security Act in 2007.
    And we are grateful to the Committee on Science and 
Technology for its very recent views and estimates, fiscal year 
2009 report, which states, ``The fiscal year 2009 budget for 
the DOE Office of Science of $4.7 billion is a step forward in 
addressing our near- and long-term needs. Strong support for 
basic energy research is needed to achieve major breakthroughs 
in technologies that will enable our country to secure the 
energy supplies we need for the future while addressing the 
challenges of climate change.''
    The president's fiscal year 2009 request to Congress for 
the Office of Science creates a bipartisan platform for long-
term economic health, energy security and the intellectual 
strength of our country.
    Just a few examples.
    We are introducing the concept of Energy Frontier Research 
Centers to accelerate scientific breakthroughs and innovations 
essential to the development of advanced energy technologies in 
the 21st century.
    We are providing $100 million in fiscal year 2009 to award 
grants of $2 million to $5 million per year, on a competitive 
basis, to groups of researchers in universities, laboratories, 
industry and other institutions for an initial 5-year period.
    We seek to engage the nation's finest intellectual and 
creative talent to tackle the scientific grand challenges 
associated with how nature works to direct and control matter 
at the quantum, atomic and molecular levels and to harness this 
new knowledge and capability for some of our most critical 
energy challenges.
    Another example is ITER. While the fiscal year 2008 
appropriation for ITER was reduced to R&D, the president's 2009 
request calls for the full $214 million required to fully 
engage in this crucial experiment. It is high-risk, but the 
potential for energy security is immense. ITER will directly 
benefit U.S. domestic industries, creating an American 
workforce knowledgeable in R&D and in the production of high-
tech components for the fusion industry.
    My last example is high-energy physics. The president's 
request firmly places this critical field back on track for 
U.S. world leadership.
    Former Princeton University president Harold Shapiro led 
the recent National Academy of Sciences' study on elementary 
particle physics in the 21st century. He stated, ``The United 
States has been at the forefront of elementary particle physics 
for more than half a century. Particle physics inspires U.S. 
students, attracts talent from around the world, and drives 
critical intellectual and technological advances in many other 
fields. The United States has an unprecedented opportunity, as 
a leader of nations, to undertake this profound scientific 
challenge.''
    President Shapiro's last sentence applies equally across 
the frontiers of basic research in science. The Office of 
Science has prioritized its investment to maintain U.S. global 
scientific leadership. The president's fiscal year 2009 request 
to Congress gives us the chance to be a leader of nations. I 
urge this committee to give our country and its citizens that 
opportunity.
    I thank you for your strong support for the Office of 
Science and for basic research, and I look forward to answering 
your questions.
    [Statement of Dr. Raymond L. Orbach:]

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    Mr. Visclosky. Thank you very much.
    And I would like to recognize Mr. Wamp.
    Mr. Wamp. Thank you so very much.
    I am in an unusual position--I want to welcome Dixon back 
into the room first--but I am in an unusual position, because 
this is the most important subcommittee in my world, but I am 
the ranking member of another very important subcommittee. And 
when our hearings start at 10:30, they can't start until I get 
there. So I really appreciate the courtesy of the chairman and 
other members to jump ahead here.
    And I will be very brief, because I want to echo, Dr. 
Orbach, what former Chairman Hobson said about your service. I 
think it has been exemplary and very unique. And you have got a 
skill set that--you understand the science, and you understand 
this business, which is kind of hard to do sometimes. And I 
really appreciate your service.
    The one thing I want to raise is this issue of ITER. I 
think most members don't realize that we are caught in a very 
awkward position; you are sitting in an awkward position. 
Because, right now, this really should be, in a fair and 
responsible world, it should be an issue for the supplemental 
that is coming to the Congress. But then there is a desire to 
keep the supplemental very clean.
    Because, if we are going to honor our international 
commitments here, we need to go ahead with a supplemental 
request for ITER and not wait until 2009, where you have made 
this full request, because we are not honoring our agreements 
and our commitments on ITER.
    So I hope that the person you work for--that is, the 
Commander in Chief of our country--will allow a special title 
for this particular international obligation to come with the 
supplemental.

                             FUSION ENERGY

    Most people wonder what this means. How many universities 
in our country are involved in fusion energy?
    Dr. Orbach. I don't know the precise number, but it is very 
common in almost every university curriculum.
    Mr. Wamp. And how many laboratories are involved in either 
fusion energy or partnered in the ITER project?
    Dr. Orbach. The majority of our laboratories are involved.
    Mr. Wamp. And how many U.S. companies are likely to be 
involved in the construction of ITER?
    Dr. Orbach. We would hope a major U.S. presence for 
construction.
    Mr. Wamp. I understand that just pending right in front of 
us is a couple hundred million dollars' worth of contracts of 
hardware, actual manufacturing-related U.S. jobs associated 
with ITER. This is not sending money overseas. This is like, if 
we don't honor these obligations, we effectively outsource 
these jobs overseas. And this is the good stuff; this is the 
high-tech, R&D-type work.
    And the Congress and the administration need to come 
together on this. And I just want to make a case that this is a 
big deal.
    And we are fortunate, in Oak Ridge, to handle some of the 
management of this program, because we have managed other major 
projects on time and on budget, and, as a result, the Office of 
Science saw fit for us to handle some of the management of this 
fusion project.
    And I just want to raise ITER and fusion energy as a major 
challenge and priority for the Congress, but the executive 
branch is going to have to do its part, not just send over a 
2009 budget request. There are funding problems right now that 
need to be addressed between here and there. That is the big 
issue.
    I don't want to put you on the spot, but I asked you a few 
minutes ago what your number-one priority for the coming year 
was, and what did you tell me, Dr. Orbach?
    Dr. Orbach. ITER.
    Mr. Wamp. I yield back. [Laughter.]

                    OUT-YEAR ASSUMPTIONS FOR SCIENCE

    Mr. Visclosky. Thank you, Mr. Wamp.
    Dr. Orbach, in fiscal year 2007, you asked for an increase 
of $500 million for the Office of Science, and you received an 
increase of $200 million. In 2008, your request included an 
increase of $600 million for the Science budget, and you 
received an increase of $220 million.
    This year's request is for an increase of $750 million for 
Science. Given recent history, it would seem to be unwise to 
make operating decisions for the Office of Science assuming 
that the President's request will not be changed.
    The Office of Science request represents a 19 percent 
increase in funding over fiscal year 2008 enacted levels. In 
your view, is a comparable increase in the level of research 
manpower sustainable over the long term, given current fiscal 
pressures?
    Dr. Orbach. Mr. Chairman, first of all, I do appreciate the 
committee's support in fiscal year 2007 and fiscal year 2008. 
And I acknowledge the incremental increases that the Office of 
Science received in a very difficult budget environment. And 
so, I want you to know that I am appreciative.
    I also have the responsibility of looking at the health and 
welfare of our country from the scientific perspective. And it 
is my view that the American Competitiveness Initiative, the 
trajectory that the president laid out in 2006 and that 
Congress has supported through the America COMPETES Act, 
recognize the importance of basic research for the health of 
our economy.
    Scientific research in the physical sciences underpins not 
only our scientific programs but also our manufacturing and our 
economy. The request looks large but, in fact, follows a 
trajectory that both Congress and the president and have laid 
out for an increase for basic research.
    You ask whether we have planned for less. We are very 
hopeful that the president's request and the America COMPETES 
Act authorization levels will be possible in this fiscal year, 
fiscal year 2009.
    We are planning for operations of all of our facilities at 
optimum levels. We are planning for a modest but significant 
increase in research support for universities across the 
country. We are planning very carefully for prioritized large-
scale facilities. We are also planning for infrastructure 
improvements in our laboratories. And when these are bundled 
together, the president's request is the number that we work 
toward.
    We are prepared to work with the committee and to do the 
best we can with the resources that the budget will allow. But 
I do firmly believe that this increase, which looks large 
because of past history, is on the trajectory that both 
Congress, the president and industry, have recognized as 
essential for the economy and well-being of our country.

                       U.S. LEADERSHIP IN SCIENCE

    Mr. Visclosky. Doctor, some scientists, probably those in 
particle physics, raise the issue of U.S. leadership when 
advocating for increased federal support. Could you delineate 
for us what areas of research sponsored by your office do you 
believe the U.S. is clearly a world leader in and which ones 
are not?
    Dr. Orbach. As I have stated in the past, my commitment to 
this committee, to our scientific community and to our country 
is to be a world leader in everything we do.
    And we don't do everything. When we prioritized our 
facilities, it was for the future. It was on the basis of 
scientific leadership. And where we have found that we are not 
leaders, we either ask ourselves, ``Why not?'', and try and fix 
it or we leave that for someone else.
    If you will look across the Office of Science, from high 
energy physics to nuclear physics to fusion energy to condensed 
matter physics to basic energy sciences, biology--every one of 
those programs are world leaders.
    I think we are recognized internationally for that. Ranking 
Member Hobson referred to scientific computation. It was this 
committee that enabled us to become the world leader. There is 
no issue, when it comes to the open science on high-end 
computers, the United States is very far in front of any other 
country.
    More or less, what I plan in our budget is to give us a 
decade of leadership over any other competition. This is 
important not just for the science, but also for industry and 
for our economy. And so, we will not support work that is not 
world-class.
    Mr. Visclosky. I can understand doing work in a world-class 
fashion. We all try to do that in our lives. But are there not 
any areas where someone else has an advantage on us?
    You mentioned a computational power, and I actually 
remember, some years ago--and it was under Mr. Hobson's 
leadership that the funding was provided--that Japan was at the 
time considered a leader.
    Are there not any of these slices, given the world 
competition, if you would, in science that we have fallen 
behind in?
    Dr. Orbach. I am worried the advent of the large hadron 
collider at CERN will mean an offshoring of the highest-energy 
physics machine in the world. And we have, up to this time, 
always had that leadership, and so it is a new world for us. We 
are going to have to try to maintain leadership while 
recognizing that the best machine, after the Tevatron is 
finished, is in CERN, in Switzerland.
    ITER is another example, that will be built in France.
    What we are attempting to do, as these large-scale 
facilities are found--actually, built in Tennessee but 
assembled in France----
    [Laughter.]
    Dr. Orbach. We will ship the material. But, actually, we 
will have scientists in France too, in Cadarache.
    It is a new experience for us. We have always had the 
biggest machines here in the United States. And we would 
welcome people from around the world to come and use them. And 
their intellect and their contributions has added to our own 
and given us tremendous advantages.
    Now we are in the position, at least in two of our fields, 
of having to go somewhere else in the near future for that 
leadership. And it is tricky. In high energy physics, the 
advisory committee is, as we speak, considering how to maintain 
U.S. leadership under a situation where the biggest machine is 
in CERN. And I think you will see a similar situation for the 
fusion energy community.
    To be honest, Mr. Chairman, I don't want that to happen in 
other areas. And so--at the light sources, we are moving 
hopefully to keep that decade of leadership.
    You are quite right, the Japanese did assume that 
leadership with the Earth simulator in 2002. And that was an 
area where we had lost it but we felt that we could not afford 
to. And so, that is what I meant when I said we then stepped in 
and, thanks to you and Congressman Hobson, we were able to 
regain that leadership.
    So there are some areas that we really feel, even though we 
may be behind, we have got to catch up. And that is an example 
of how we have done it.
    Mr. Visclosky. Now, for the record, I would make a note 
that, with the growth in the world economy--look at the size of 
the European community, and you discussed some of the 
facilities in Europe--whether or not it is practical, despite 
our desire, to maintain that leadership across the board, and 
whether or not there are some particular areas over and above 
those you have enumerated now that we should be, as a 
committee, very concerned about, as far as that funding is 
allocated.
    So, for the record, if there is anything else in some 
prepared questions we have, I would appreciate that.

           U.S. Maintains World-Class Scientific Leadership 

     Our goal is to be world leading or among the world leaders in 
every aspect of our portfolio investments--advanced computing, x-ray 
and neutron scattering, nuclear physics, and high-energy physics. While 
we prioritize our work and the funding of our facilities based on 
scientific leadership, all of our facilities are world leading, and we 
are recognized internationally in these scientific communities. Our 
triennial Committees of Visitors, other independent reviews, and 
reports such as those from the National Academies help us set direction 
and gauge success. The Office of Science prioritizes within its 
research programs, as well, in the accompanying areas based on 
opportunities for world leadership.
    In some cases, strategic partnerships are required to enable the 
U.S. to be among the world leaders. For example, the U.S. has supported 
an international team in developing the Large Hadron Collider (LHC) at 
CERN in Geneva, Switzerland, which will become the world's highest-
energy particle accelerator when it turns on later this year. In 
particular, the U.S. has been involved in the design and construction 
of both the LHC experiment detectors and the accelerator magnets.
    The U.S. is also playing a key role in the ITER international 
partnership. ITER, to be sited in Cadarache, France will demonstrate 
the scientific and technological feasibility of fusion energy, the 
power source of the sun and the stars. The U.S. is one of seven 
partners in ITER, which collectively represents more than half the 
world's population. Such international partnerships are expected to 
become more common in the future as ``big science'' incorporates more 
disciplines into increasingly larger-scale, more costly projects.
    Our strategic planning for both facilities and research programs is 
focused on identifying and investing in those areas of research most 
essential for U.S. scientific leadership over the next decade.

    Mr. Israel.

                   NATIONAL SYNCHROTRON LIGHT SOURCE

    Mr. Israel. Thank you, Mr. Chairman.
    Dr. Orbach, let me echo what has been said. I have a very 
high regard for you and very deeply appreciate your leadership, 
appreciate your visits to Brookhaven National Lab with me, 
which is a very significant priority of mine. And we will miss 
you.
    I appreciate the department's commitment to the NSLS, 
National Synchotron Light Source. You mentioned before that you 
are trying to make sure that we at least retain our leadership 
for a decade on light sources. And it seems to me that NSLS is 
critical to maintaining that leadership for at least a decade.
    I am pleased, once again, to see the commitment for funding 
for this project in fiscal year 2009. Of the $103.3 million 
budgeted, $93 million is slated for construction. And my first 
question is, can you give us an update on exactly what is 
happening with NSLS, the construction and related issues?
    Dr. Orbach. Yes. It is coming along quite well. This was an 
example of a machine that we didn't think could be built this 
decade. And the scientists at Brookhaven figured it out and 
proved us wrong, wonderfully. And so we moved to regain that 
leadership.
    Every country that is interested in biotech or 
pharmaceuticals or areas like that is building a light source. 
We are seeing Diamond built in England, which is a beautiful 
machine, just built for biology. And so the question is, how do 
we regain leadership? Just exactly the question Chairman 
Visclosky asked.
    And in this case, we didn't want to cede it. We felt that 
it is so important for biology, for materials, for the economic 
benefit of our country, we had to be the best. And so we 
designed it.
    We took a small hit in 2008. There was about a 30 percent 
reduction of the amount we had put in for PED. But we can fix 
that with the 2009 request. We now have a firm figure for the 
baseline for NSLS-II. And if we are allowed to follow the 
construction profile, of which the $103 million is a first step 
in that profile, we will build it on time, on budget.
    So we are, so far, on track. The technical issues, which 
were very sophisticated when you get down to that level of 
resolution, have been dealt with. And we have done review after 
review that the laboratory has surpassed beautifully.
    Mr. Israel. If we were to slip on the budget for NSLS, what 
countries are poised to move ahead of us within the next 
decade? You mentioned England?
    Dr. Orbach. Well, yes, Diamond, which is just coming 
online, as I say, is an exquisite machine.
    You know, if we slip on the funding of NSLS-II, we are 
going to build it. But it will get more expensive. Because once 
you slip, you have escalation and inflation that hurts you. But 
one way or another, the Office of Science is going to build 
NSLS-II. I have said that even in periods of budgetary 
stringency.
    This was, again, related to the question that the chairman 
asked me: Can you maintain leadership given difficult budgets? 
And so we are cherry-picking those areas that we feel are 
critical to our country.
    The Linac Coherent Light Source at SLAC in California and 
the NSLS-II will give us leadership in chemistry, in biology, 
in materials, that no other country can match. We are just 
going to do it. I just hope we can do it on time, on budget, if 
we get the money.

                         CONTINUING RESOLUTION

    Mr. Israel. How do we do it if we have a C.R. for 6 months, 
let's say? What are your plans?
    I appreciate and fully support what you are saying; you 
know that. But the assumption must be, unfortunately, that we 
are going to have, not a 3-month C.R., but we could have a 6-
month C.R., maybe even longer.
    So what contingencies are you and your budget folks 
developing in that eventually, for, say, a 6-month C.R.?
    Dr. Orbach. Well, we could keep the R&D going, and we would 
use what funds we have on the C.R. at the fiscal year 2008 
level that we could use for construction. But it would 
ultimately end up with an increase in cost and a lengthening of 
the schedule.
    I want to indicate, it sounds easy just to lengthen the 
schedule, but these are machines that our communities are 
depending on. The Northeast, as you are well aware, is a 
wonderful economic generator of jobs, and pharmaceuticals are 
especially strong. And the NSLS-II will give us the ability to 
see the proteins and cell walls one at a time. They have never 
been seen before, because they don't crystallize. So, just 
think of what that means for pharmaceuticals, for drugs and so 
on.
    We are going to build it. And if it takes longer, it will 
mean that our industries then have to take longer to develop 
their products.
    Mr. Israel. This will be my final question. Have you been 
able to project the amount of increased cost----
    Dr. Orbach. Oh, yes.
    Mr. Israel [continuing]. Or the added schedule? Could you 
share that with the subcommittee?
    Dr. Orbach. I would prefer to do that for the record----
    Mr. Israel. Yes, sure. Thank you very much.
    Thank you, Mr. Chairman.

         National Synchrotron Light Source-II (NSLS-II) Project

    The National Synchrotron Light Source-II (NSLS-II) project is 
currently on schedule and within budget. In the event of an up-to-three 
month Continuing Resolution (CR) in FY 2009, no impacts on the 
project's cost and schedule are anticipated, assuming that the language 
of the CR allows spending to continue at the FY 2008 level.
    A CR lasting into the second quarter would, however, delay key 
project activities and reduce the project's schedule contingency. The 
project's spending rate would be reduced to roughly half the planned 
rate and would necesitate delays in critical experimental facilities 
R&D activities, in completion of the initial linac design activities, 
and in site preparation activities. Such delays would substantially 
increase the risk of cost and schedule overruns on the project.
    A CR lasting longer than six months would seriously delay the start 
of construction and would certainly delay the schedule and increase the 
cost of the project.

    Mr. Visclosky. Mr. Rehberg.
    Mr. Rehberg. Thank you, Mr. Chairman.
    And welcome to the committee.
    Dr. Orbach. Thank you.

                    CARBON CAPTURE AND SEQUESTRATION

    Mr. Rehberg. I have already said hello to Dixon, so I don't 
have to do that again. [Laughter.]
    I don't know if you are doing a good job, because this is 
my first hearing with you.
    My question has to do with FutureGen and a change of 
direction within the Department of Energy. And it is hard to 
have a sense of urgency in energy projects or research that 
takes 10, 15, 20 years to see to fruition. But one of the 
concerns that I have is, any time you change directions within 
an agency that affects both the agency and the private 
partners, it creates a delay in the technology actually coming 
to a commercial schedule.
    And so, can you give me assurances that the decision that 
was made by the DOE is not going to delay the science of 
sequestration and/or carbon capture?
    And, especially as it relates to your budget, are there 
changes that are having to be made within your budget to adjust 
for a change in direction within the Department of Energy?
    Dr. Orbach. That is a very fine question, and thank you for 
raising it.
    The reason I say that is that I believe that carbon capture 
and sequestration is critical to the future of coal and of 
other fossil fuels for energy production. And, therefore, given 
that coal-fired power plants amount to 50 percent of our 
electricity, it is a major issue.
    We have joined with Fossil Energy in a collaborative 
program--and, in fact, it is in the budget--for carbon capture 
and storage. And that was unaffected by the decision of the 
department for FutureGen.
    We are working with Fossil Energy not just for FutureGen 
but also for the partnership for carbon sequestration, where 
they have seven sites across the country. And if you look at 
the budget, you will see that we have added $5 million to our 
already-robust program in sequestration so that we can be 
there, on the site, with our researchers, doing basic research, 
while the sequestration projects are being pursued.
    And we work very closely with Fossil Energy developing a 
plan to make sure that we know where the carbon is, we can 
measure it and we know where it is going when it is stored 
underground in saline aquifers. So we have maintained and 
expanded our commitment for carbon capture and sequestration.
    FutureGen referred as well to the front end, namely to the 
so-called combined cycle gasification. And that is an area 
where, actually, our high-end computers have played a role. We 
have been able to optimize the gasifiers by using simulations 
on the high-end computers, working with metal and fossil 
energy.
    So we are beginning to see the integration of the basic 
science with the applications. And I share your view; this is a 
critical area for our country and, indeed, for the world.
    Mr. Rehberg. I inherited an earmark from Senator Burns. He 
got earmarks in zero emissions before I got to Congress, and, 
now that he is gone, I have carried that forward. And we have 
what is called the Center for Zero Emissions Research 
Technology or ZERT, at Montana State University.

                       CO2 MONITORING

    But I am not familiar with other universities or other 
programs that are either within the Department of Energy or are 
congressionally mandated from within the existing larger 
budget. Do you know of any other university projects or 
congressionally mandated earmarks that are working on some of 
the monitoring?
    That is what Montana State's project is. They have the 
capacity to monitor leakage and such. And they are working on--
it is well beyond me. I have been there, I have seen it, and I 
still couldn't explain it to you. But it is pretty interesting.
    Could you tell me of any others?
    Dr. Orbach. I don't know expressly, but I would be glad to 
answer for the record. We could check through it.
    But I will say that that particular issue of monitoring is 
critical. We need to know where that CO2 is and what 
its behavior is. There is only a single example on Earth, off 
the coast of Norway, where such experiments are being 
conducted.
    But for us in the United States, we have lots of saline 
aquifers into which we can pump CO2. And so, for us, 
we have a different kind of substructure than Norway has. It is 
critical that we understand that.

[GRAPHIC] [TIFF OMITTED] T3355B.012

[GRAPHIC] [TIFF OMITTED] T3355B.013

    Mr. Rehberg. They are certainly doing something, then, 
unique that you are not doing within your budget somewhere?
    Dr. Orbach. I am afraid that I am not familiar in detail 
with what they are doing. But----
    Mr. Rehberg. I would like to know that, as well.
    I am one of those who can go either way on earmarks. I 
don't want it to be a duplication if something else is going on 
within the department. But then I also think, on the other 
side--and the members of the committee have heard me say--in 
some situations, when it has been authorized and appropriated 
and the president doesn't put it into his budget, makes us 
earmark, then the question becomes, why not?
    I mean, if it is, as you say, so important to the future of 
coal development to have carbon capture and sequestration and 
the ability to monitor, why do I have to keep coming to my 
colleagues every year to ask for a $6 million appropriation to 
Montana State to do something that you ought to just 
automatically do and give the money to Montana State?
    Dr. Orbach. Well, first of all, Montana State is a fine 
academic institution. And I am very familiar, actually, with 
the physics department there, which is excellent.
    If you will allow me, I would like to take a closer look at 
what is actually being done, and then I will return to you.
    Mr. Rehberg. Great. Thank you.
    Thanks, Mr. Chairman.
    Mr. Visclosky. Mr. Olver.

                     BIOENERGY RESEARCH COMPETITION

    Mr. Olver. Thank you, Mr. Chairman.
    I apologize. I don't get to hear with the other 
subcommittee, the one that I chair. This happens to be one of 
those days when my other two subcommittees are meeting 
simultaneously, but not my own. So I can be here. And I am 
pleased--I don't get much of a chance to talk with Mr. Orbach.
    You arrived in 2002 and served as director of the Office of 
Science, which was then elevated to an assistant secretariat, 
or deputy secretary--undersecretary for science in 2006. It 
seems to me that you have made quite an impact here. And the 
way you express what you are trying to accomplish, it seems to 
me very exemplary, and I am very impressed by that.
    However, let me--I am actually very pleased with the 
additional money that is being requested in the budget here, 
though I am somewhat concerned that a fair amount of that must 
be coming because the budget for EERE over in renewable energy 
sources has been substantially reduced. So maybe it has all 
just been rearranged, and I don't understand what has been 
rearranged, so that some of that that legitimately maybe should 
not have been there has been moved.
    Under your leadership, there was an initiative in 2007, 
three new bioenergy research centers were created, each center 
having to do with a national lab and a series of universities. 
I don't know much about that. I suppose you have something 
specifically about that that I could have, to know exactly what 
those three are. But it has been said that they were named, at 
a point. They have been named, they have been established, 
those consortia, essentially.
    What are the areas in which--this is biofuels, basically, 
cellulosic ethanol and biofuels. Is that one of the areas that 
you think we are approaching world leadership? Are we there, in 
your view?
    Dr. Orbach. Well, that is an area where I believe we are 
the world leader. And it is a very difficult area. It is one of 
tremendous importance for energy and for the balance of carbon 
dioxide upon combustion.
    We have three centers--actually, one of them is at a 
university, University of Wisconsin, which is allied with 
Michigan State. The other two are headed at laboratories. The 
three of them are very complementary. And it was a 
competition----
    Mr. Olver. It was competed?
    Dr. Orbach. Oh, absolutely.
    Mr. Olver. For the three of them? The three of them are----
    Dr. Orbach. We had enough money----
    Mr. Olver [continuing]. Competition.
    Dr. Orbach. Yes. It was a very tight competition, very 
exciting one, actually. And the competition ended up with the 
three. And they are very complementary, just coming out of the 
competition. The university one, at Wisconsin and Michigan 
State, focuses on sustainability. Can you take biomass and 
produce enough----
    Mr. Olver. So, not only are they in competition, but they 
are also in communication and collaboration.
    Dr. Orbach. Very closely.
    Mr. Olver. Very closely. And you are organizing that, as 
well? Although, in the scientific community, it is all pretty 
open, through the processes of publication and review and so 
forth.
    Dr. Orbach. Absolutely.
    Mr. Olver. The word was that their research activities were 
going to begin in the fiscal 2008 budget. Has that actually 
occurred? Obviously, these places had already been doing basic 
research that they had put together in different ways. But any 
new impetus from that would have started in 2008?
    Dr. Orbach. It actually began in 2007.
    Mr. Olver. Began in 2007.
    Dr. Orbach. We were able to take funds and, through 
Congress's approval, provide $30 million at the end of fiscal 
year 2007 to give each of those three bioenergy centers $10 
million to start up. They are all under way now.

                    ENERGY FRONTIER RESEARCH CENTERS

    Mr. Olver. Okay. Now, all right, so that one is one where 
we have, actually, leadership, world leadership.
    You have the other program that you mentioned earlier today 
of $100 million a year, to go out in $2 million to $5 million 
sums, which sounds likely to be anywhere from 20 to 50 such 
places. That sounds like a much more shotgun arrangement. I 
imagine they are going to be competed in some kind of a manner. 
I would be very curious about how that is going to go.
    And what are the areas in which that is going to function?
    Dr. Orbach. Well, what we want to do--it will be competed 
in what we call a ``funding opportunity announcement,'' which 
means it is wide open but it will be peer-reviewed.
    Mr. Olver. Is it one institution each, one of those $2 
million to $5 million goes to one institution?
    Dr. Orbach. That is correct.
    Mr. Olver. And over what areas of science are those going 
to be focusing?
    Dr. Orbach. Well, we have given eight or nine suggestions.
    Mr. Olver. I see.
    Dr. Orbach. But, in fact, what we want to do is to really 
explore the frontiers. And so, we are going to allow groups to 
come together--we call it self-assembly--and tell us what areas 
of energy research they would like to address. We have given 
some examples.
    Mr. Olver. Okay, you have given them nine examples. But 
these, then, are ones where you think, from your range of 
scientific advisors and so forth, that there are opportunities 
in the future, rather than where we have identified something 
where we have world leadership or are trying to maintain world 
leadership. Would that be fair to say?
    Dr. Orbach. That is a very accurate description. We have 
had over a dozen workshops since 2002 trying to identify the 
opportunities for energy production.
    Mr. Olver. Have you provided the committee with the 
background and the format for how this is to function, how this 
is to be done?
    Dr. Orbach. We have discussed it with the staff on the 
committee. I would be pleased to provide all of the 
information. Also, all of these workshops are on our Web site, 
and the description of the Energy Frontier Research Centers is 
also on our Web site.

                    Energy Frontier Research Centers

    The Energy Frontier Research Centers (EFRCs) are a means to attract 
the very best American scientists and engineers to address our 
country's energy needs. EFRC awards are expected to be in the $2 to $5 
million range annually for a five year period. The magnitude of the 
funding and the five year minimum commitment will enable ``self 
assembly'' of our finest minds to address current fundamental 
roadblocks to U.S. energy security. The EFRCs will address energy and 
science ``grand challenges'' in a broad range of research areas, 
defined through a series of workshops conducted over the past five 
years. EFRC proposals will be solicited in an open competition among 
all researchers for the very best ideas to address the fundamental 
questions of how nature works and to help solve some of our most 
critical real-world challenges. Universities, DOE national 
laboratories, the private sector, or partnerships among these groups 
are eligible to apply. The selection of the initial 20 to 30 awards in 
FY 2009 will depend on the quality of the proposals received as 
determined by peer review.
    There are two main criteria for research in the Energy Frontier 
Research Centers: the research must lie at the forefront of one of the 
science grand challenges described in the Basic Energy Sciences 
Advisory Committee (BESAC) report Directing Matter and Energy: Five 
Challenges for Science and the Imagination, and it must address one or 
more of the energy research challenges described in the ten Office of 
Science/Basic Energy Sciences workshop reports on Basic Research Needs 
series. These are: Advanced Nuclear Energy Systems, Catalysis for 
Energy, Clean and Efficient Combustion of 21st Century Transportation 
Fuels, Electrical Energy Storage, Geosciences: Facilitating 21st 
Century Energy Systems, The Hydrogen Economy, Materials under Extreme 
Environments, Solar Energy Utilization, Solid-State Lighting, and 
Superconductivity. All of these workshop reports are available on the 
Internet at http://www.sc.doe.gov/bes/reports/list.html.

    Mr. Olver. Well, I think it is great to actually be looking 
for things which we are not quite sure of. But that means you 
lay them out there, and if you put out 20 or 30 of these, 
whatever the number is that you happen to finally put out, you 
may get one or two that are actually the places that are going 
to go for major breakthroughs, and some of them are going to 
float along, and some of them are going to end up not producing 
much of anything, would be my guess. That is usually the way 
that research functions.
    Dr. Orbach. We hope they will all be successful, but you 
are also correct in your final analysis.
    The basic research that will be done in all of these 
centers will be critical. Which ones transform, which ones are 
transformational in how we actually produce energy in our 
country remains to be seen.
    But things like electrical energy storage, for example, 
which is critical if we are ever going to have baseload from 
intermittent sources; issues of biofuels, as we have already 
talked about--all of those are open.
    And what we want to do is--there is so much enthusiasm in 
the research community to contribute to the energy problems 
facing it. These are human beings that pay the same price for 
gas that you do; they are concerned about it. And what we want 
to do is give them the opportunity to come together and create 
ideas and processes that will give us an advantage in the 
energy field.
    Mr. Olver. Thank you, Mr. Chairman. I am just preparing 
myself for the next round.
    Mr. Visclosky. Mr. Calvert.

                                  ITER

    Mr. Calvert. Thank you, Mr. Chairman.
    And I am very pleased to be here today with Dr. Orbach. I 
have known the doctor for many years. He was the chancellor at 
the University of California-Riverside, which is in my 
congressional district, and has a great reputation in 
California, as well as here in Washington, D.C.
    And welcome, Doctor. It is good to see you again.
    And let's talk about ITER a little bit. Obviously, I have 
been very supportive of ITER for some time now. And I think 
that fusion is something that I guess some people describe as a 
silver bullet. If we could ever move in the direction in which 
we can prove that fusion is a viable energy source for the 
future of this country, then basically many of our energy 
problems are behind us.
    And I would like to give you the opportunity to describe 
why progress on fusion research in this country is so dependent 
on our participation in this project, ITER.
    Dr. Orbach. Thank you, Congressman Calvert. And thank you 
for the compliment. I have enjoyed working with you; I look 
forward to continuing.
    The issue for the world is energy in forms of production 
that are environmentally benign. And there is no other source 
that I know of that is capable of the magnitude of energy 
production without any impact on the environment besides 
fusion. It is the way the sun works. It is the way the stars 
are fired. It is an opportunity for us to try to create on 
Earth that environment.
    The difficulty is that the interior of stars exceed any 
kind of temperature that we have ever controlled on Earth 
before. And so, we now believe that magnetic confinement can 
work. It is a high risk, and I won't promise that it will work. 
But if it does, we want to be part of it, because the 
consequences for us and the world will be immense.
    We have done very rough estimates that indicate that 
something like half of the extra energy that the world needs 
under a carbon limit could be produced by fusion by the end of 
this century. That is a huge amount of energy. And it is 
because the only thing that you need is deuterium from sea 
water and lithium, which is one of the most abundant elements 
on Earth.
    So you are starting with elements that are abundant, and 
what you end up with is energy and helium gas. You don't like 
helium gas--it leaves the Earth because gravity is not strong 
enough to keep it. I just don't know of another source capable 
of that amount of energy which is clean. And so we are doing 
everything we can.
    If we are not a part of ITER and it works, just think about 
the United States 30 years, 40 years from now, and the position 
we would be in. In my view, it is absolutely critical that we 
play a major role.
    And our computational simulations, our experiments at MIT, 
at Princeton, at General Atomics, are the best in the world. 
The ITER design, the D-shaped design, is a consequence of our 
work at General Atomics.
    So we have a huge stake in this. And it has been tough for 
us, but we are going to persevere. I have worked very hard to 
keep the project office alive in Tennessee, at Oak Ridge, 
because it is a wonderful group of people. It has attracted the 
very best people in our country, for all the reasons that I 
just outlined.

                   U.S. PARTICIPATION IN ITER PROGRAM

    Mr. Calvert. Just from a business point of view, since I 
came out of the business community, we have made a deal, we 
have made a deal with a number of international partners to go 
into a very risky endeavor. Obviously, these partners 
understand that risk, these countries, and they are putting 
money up.
    And what would happen to us as a country, the United 
States, if we failed to participate, if we failed to meet our 
obligation within this agreement, with international 
partnerships in the future or deals that are going on this very 
day here in the United States?
    Dr. Orbach. Well, we have already lost some credibility, 
and we would lose all. Half the world's population is involved 
in building ITER, and I was criticized over and over again 
during the negotiations because, ``We couldn't trust the 
Americans to stay with us.''
    I pushed back. I said we are as good as our word. We ended 
up signing it in November of 2006. It is now ratified and in 
place.
    It would be tragic for our collaboration on an 
international scale, which I believe is essential for future 
large-scale scientific experiments. But also, I think we have a 
huge stake, here in our country, for our own self-interest in 
this program.
    Mr. Calvert. Thank you, Doctor.
    Thank you.
    Mr. Visclosky. Thank you very much.
    And I am going to recognize Mr. Pastor in just one moment. 
I just would also want to make the observation that it seems as 
though you have just an incredibly unfair advantage before this 
subcommittee, between Mr. Calvert, the fact that the new 
president of Purdue also held the position you did at U.C.-
Riverside. In fact, Shari Davenport is from Riverside. It just 
seems as though this is not a fair fight, at this point.
    I will now recognize Mr. Pastor.

                           BIOFUELS RESEARCH

    Mr. Pastor. Thank you, Mr. Chairman.
    Good morning.
    In your testimony, you talked about the biofuels, and you 
talk about the limitations and drawbacks of corn- and sugar-
based biofuels. And I am sure you are aware, in various states, 
including in Arizona, I know that they are doing more research 
on algae as a possible feedstock for the biofuel.
    Are you familiar with any of that research that is going 
on?
    Dr. Orbach. Yes, I am.
    Mr. Pastor. What various places are you aware of it?
    Dr. Orbach. Well, the research on algae, which is very 
promising, is focused on both fuels, and in particular fuels 
like Jp-8--is that the right one?--the jet fuel, but it is also 
possible to generate hydrogen from algae.
    And different parts of our government are supporting 
different aspects of the research. DARPA has just issued an 
announcement, competition, for jet fuel.
    We are looking at the hydrogen production; that is, can you 
actually treat algae by working with microbial genomics to 
produce hydrogen? It already does produce hydrogen, but can you 
actually make that commercial?
    Mr. Pastor. Commercial.
    Dr. Orbach. So, between the different programs in DOE and 
across the government agencies, we collaborate, we talk to one 
another. There is tremendous interest in algae.
    Mr. Pastor. In the omnibus bill that we passed, we have, as 
part of the omnibus bill, ``The department is directed to 
include algae as a potential feedstock in its biomass research 
and development.'' So is it something you agree with or 
disagree with or----
    Dr. Orbach. Oh, yes, absolutely, and we thank you for that.
    Mr. Pastor. And, I guess, the real crux of the questioning 
is going to get to, how do you feel about earmarks? [Laughter.]
    You heard about Montana State and the work they are doing. 
Do you think that it is something that is binding on your 
office, or is it advisory, or is it something you can look at 
and ignore?
    Dr. Orbach. No, we don't ignore--we follow congressional 
direction. And we have always, in my experience, done that. And 
we intend to continue.

                       SCIENCE AND ENERGY STORAGE

    Mr. Pastor. Oh, thank you. Because, I don't know, several 
weeks ago, we have the Secretary of Energy that probably was on 
the opposite side of your position, it seemed to me anyway. But 
I am glad to hear that you follow the mandated or at least the 
directed programs that Congress advises you to do.
    Also, in your testimony, and you talk about it, is 
increasing the capacity of storing energy. And we had a panel 
about 2 weeks ago, and I came away with the impression that you 
can do the biofuel, you can do the hydrogen fuel cell, and you 
can do solar, et cetera, but if you don't have the capacity to 
store them, that seems to be the bottleneck in making it 
commercially profitable, without the capacity to store it.
    And from that testimony, the impression is that we have the 
chemistry scientists, the people who understand it, but we are 
behind Korea and, I think, Japan and other countries because of 
the lack of manufacturing capacity. And as we force our auto 
industry to go into hydrogen fuel cells and other types of 
fuel, it seems like we are going to lag in the ability to 
design and manufacture the capacity to store that energy.
    And I think I read in your testimony where that is an area 
that you are very much interested in getting involved in.
    Dr. Orbach. I think we are doing pretty well. The battery 
that plug-in hybrids need is one of our targets. The lithium 
ion battery, which most of the automobile manufacturers now are 
looking toward for plug-in hybrids, has been on our radar 
screen for quite a while.
    In fact, the A-123 battery, which GM is using--actually, 
they had a car sitting out here last year, a little black car--
that battery uses a phosphate electrode that was the result of 
one of our basic research programs.
    So we are committed to electrical energy storage for all 
the reasons you said. We would like to go beyond what we have 
now. And so, we are also focusing on what we call 
transformational ways of storing electricity.
    This takes us back 200 years. Batteries have single 
electron transfer. They haven't changed, literally, in 
centuries. But nature uses two electron transfer for 
photosynthesis. Is there any way that we can get multi-electron 
transfer in a battery? You can just see how that would increase 
the capacity of the battery.
    And, finally, we now have, through nanotechnology, 
developed what we call supercapacitors. When I built radios a 
long time ago, we were talking about microfarads for a measure. 
We now have capacitors of the same size that can store farads.
    Now, the problem is that there is a materials issue. If we 
can solve that materials issue, we may well use capacitors 
instead of batteries for storage of electricity.
    So there are all kinds of ideas out there that we are 
working with and investing in to see which one would be most 
effective to go beyond what we are doing now.
    Mr. Pastor. How are you investing in some of those ideas?
    Mr. Orbach. Through basic research grants. We do that 
directly.
    I mentioned the Energy Frontier Research Centers before, 
with Congressman Olver, and that is another way that we hope we 
can get people engaged.
    But we are doing it through peer-reviewed basic research.
    Mr. Pastor. I thank you.
    I thank the chairman.
    Mr. Visclosky. Thank you very much.
    Mr. Simpson.

               U.S. INVOLVEMENT IN INTERNATIONAL RESEARCH

    Mr. Simpson. Thank you, Mr. Chairman.
    We are all sitting over here kind of giggling because I 
certainly have always wondered, too, about electron transfers 
and whether----
    [Laughter.]
    Mr. Simpson. Representative Emerson asked me about 
microfarad, and I said it is a very small farad. [Laughter.]
    So here we are asking you about sciences, which at least I 
don't understand most of it. I know what an electron is, but--
--
    [Laughter.]
    Mr. Simpson. I went to an accredited college. [Laughter.]
    You said earlier, when you were talking to Representative 
Calvert, that you dealt with people from other countries that 
said you couldn't trust the Americans to stay with us. Do you 
find that a lot?
    Dr. Orbach. To be honest, yes.
    Mr. Simpson. What do you think the genesis of that is?
    Dr. Orbach. In the science area, it has been a history of 
projects where we have been involved with foreign collaborators 
and then pulled out--the Superconducting Super Collider; we 
just did it again when we had to shut down BaBar at SLAC early; 
we have done it--I would prefer not to go through all of them 
in open session.
    Mr. Simpson. Well, what do you think the cause is of that 
phenomenon?
    Because that has been a concern, I think, of members of 
this committee, that, within the Department of Energy, we start 
down a path, then we change paths, and we are always going in 
different directions, and it seems like we never see anything 
through to completion. And so, consequently, we get very 
reluctant to be funding big, long-term projects, because we are 
never sure that that project is going to see a completion date 
ever.
    Is it the political process that we have here that changes 
directions? Is it the fact that, you know, we change 
administrations so rapidly that priorities change? Is it that 
we don't select our investments, or where we ought to be 
investing, put enough thought into it beforehand? What do you 
think the phenomenon is that causes that?
    Dr. Orbach. That is a very difficult question to answer, 
and I am not too sure I know the answer.
    I do know that we have been involved in projects where we 
have not thought through the cost of construction carefully 
enough. It is difficult, sometimes, because they are the first 
time they have been done.
    I will say that, in my 5 years, we have stopped projects, 
hopefully before they began construction. But we did it because 
we felt that either the cost was too high or the timing was 
such that it made no sense to build it.
    There was something called BTeV, which was in our 20-year 
facilities outlook, and we decided to abandon it. And that was 
because, by the time we would build it, there would be 
competition and we would not be a world leader.
    We took RIA, the Rare Isotope Accelerator, and we cut that 
cost in half, because we found the Germans were going to invest 
very strongly in this area, and we thought we could do what we 
needed to do with less money.
    So it is a complex set of reasons.
    The reason it is important to maintain commitments when you 
have foreign involvement is that the involvement is not just 
user involvement. At BaBar, for example, the Italian government 
had invested in the experiment itself; they were actually the 
spokesmen of the experiment.
    We profit enormously when other countries invest in us. And 
that is what I am worried about, is that the lack of continuity 
and commitment will discourage that investment. It is not 
dissimilar from other investments in our country, but I am 
focusing on the scientific side.
    We have done everything we can, within the Office of 
Science, to maintain commitments. And, for example, for ITER, 
we are going to keep that project office alive, one way or the 
other. And it is just so important that we are going to do it. 
And we are going to use the resources we have to do it.

                      PRIVATE INDUSTRY INVESTMENT

    Mr. Simpson. You talk about foreign country investment and 
so forth. What about private industry investment?
    We are trying to make more of our facilities user-friendly 
and hopefully recover costs from users of our facilities; is 
that right?
    Dr. Orbach. Well, it depends on how the facilities are 
being used. If it is for open science, we don't charge. We 
treat industry the same way we treat the university 
researchers.
    For example, on our computers, we have 17 companies that 
are using our leadership class facility. And as long as they 
agree to publish their results in the open literature, there is 
no charge. It is the same as for anybody else. On the other 
hand, they profit from that research.
    If they use it for proprietary purposes, then that is 
another matter. Then they pay for the cost of operations.
    Mr. Simpson. Do they pay the full cost of operations?
    Dr. Orbach. They certainly do, and we have that audited.

                            WORK FOR OTHERS

    Mr. Simpson. Let me ask you a series of questions here. 
Your laboratories aggressively pursue and perform millions of 
dollars of work for other agencies every year, a practice known 
as, not surprisingly, ``Work for Others.''
    We are all rightly proud of the expertise that our science 
facilities have developed, and we want to make sure that that 
expertise is available to the rest of the community when it 
doesn't detract from our core science mission.
    We are concerned about whether the DOE bears a fair share 
of the cost for the expansion of lab capacities needed to 
perform work for other customers. Are any of the funds that we 
appropriated to the labs to support DOE missions being used by 
the labs to market their services to other agencies or to lobby 
Congress for increased funding?
    Dr. Orbach. I hope not. The funds that you provide to the 
laboratories are for the purposes you have indicated and that 
we are pursuing. The work for others is supposed to pay its own 
way.
    There is an issue of investment in the laboratory 
infrastructure. And there, we use the overhead charge for Work 
for Others for laboratory renewal. We call that the LDRD 
funding.
    Whether that is sufficient or not is an interesting 
question, and I don't know the answer. But we do try to develop 
our laboratory capabilities that others then use in Work for 
Others through that overhead charge.
    Mr. Simpson. When the laboratory accepts work for others, 
does it only do so when it has spare space and workforce? If 
not, do you ask the committee for additional up-front funding 
for additional facilities and to hire new workers?
    Dr. Orbach. No, we do not. And, yes, it must be something 
that the laboratory can do and not interfere with its core 
mission.
    Mr. Simpson. Do the laboratory contracts impose any sort of 
ceiling on how many personnel each lab may employ?
    Dr. Orbach. Not that I know of.
    Mr. Simpson. While I could understand why an individual 
laboratory may want to grow in the future, is it in the best 
interests of the department or the taxpayers to see these labs 
grow?
    Dr. Orbach. My belief is yes,--first of all, many of the 
others are federal agencies. And, in addition, I think they 
provide a service for our country. They are very, very 
sophisticated, and I think there is work that can only be done 
at the laboratories. But, as you said at the very beginning, 
the sine qua non is that their purpose fulfills the Department 
of Energy's mission.
    Mr. Simpson. If the laboratory increases its staff to 
support work for other customers and then those staff are no 
longer needed, is DOE responsible for all of the severance 
costs associated with those employees?
    Dr. Orbach. I am sorry, I do not know the answer to that. 
If I could respond for the record, I would appreciate it.

                            Work for Others

    When performing work for other Federal agencies, the Department is 
required to recover the full cost of that work. That full cost includes 
an overhead or indirect component that covers employee benefits, 
including severance costs. So, the cost of severance for laboratory 
employees is covered by all funding sponsors of the laboratory and not 
just DOE.

    Mr. Simpson. I appreciate it. Thank you.
    Thanks, Mr. Chairman.
    Mr. Visclosky. Thank you very much.
    Mr. Berry.
    Mr. Berry. Thank you, Mr. Chairman.
    Dr. Orbach, I am afraid we have just demonstrated to the 
entire world the need for more scientific education, 
particularly this committee. [Laughter.]
    We appreciate your patience, and we certainly appreciate 
your straightforwardness in the way that you conduct this 
office.
    Dr. Orbach. Thank you.

                        CONGRESSIONAL DIRECTION

    Mr. Berry. I am almost afraid to try to ask you a question. 
[Laughter.]
    Because Simpson is going to try to make it look like I am 
from Arkansas and I talk slow. [Laughter.]
    When Mr. Hobson was the chairman of this committee--he is 
now the ranking member--he came to Arkansas and visited a water 
project that we were working on. And a reporter came up to him 
and said, ``I understand that if you do this project, once it 
is completed it will still take 200 years to correct the 
problem that we are building this project to correct.'' And Mr. 
Hobson's response to the reporter was, ``Well, if it is going 
to take 200 years, we had better get started.'' [Laughter.]
    I thought that was a pretty good answer.
    From what you have said this morning, I get the impression 
that maybe the Congress doesn't appreciate the urgency of these 
matters at times, that we are not proceeding--I know, during 
World War II and the Cold War, we put just about any amount of 
money that we needed to put in to develop the nuclear weapons 
that we used during World War II and to develop rockets and all 
of the war machines that we have built.
    And I get the sense that the matter is just as urgent 
today. It may just be a little bit different characterization. 
Instead of building a war machine, we are building an energy 
machine, for lack of a better way to describe it.
    Are we acting, as a Congress, as urgently and as in timely 
a manner as we need to be?
    I am not trying to get you to ask for something that you 
are not supposed to ask for. But I feel like we are not 
investing in these matters as much as we should be.
    Dr. Orbach. Mr. Congressman, first of all, I think you do 
understand completely what the issues are. And I am grateful to 
this committee for its support. The fiscal year 2008, as the 
chairman indicated, fiscal year 2008 omnibus funded fully our 
program for our bioenergy research centers. The biology and 
environmental research program was actually given more than the 
president requested, and I believe that is because the 
committee felt strongly in its mission. And we appreciate that 
very much.
    The magnitude of the problem that you described is 
something that I don't think our country has ever dealt with 
before. I just think we have had an atmosphere that somehow 
energy is available, it is plentiful, it is cheap, we don't 
have to worry about it. And so, frankly, we are now struggling 
with something that, frankly, I don't think any of us were 
prepared to deal with.
    My belief is it is the most serious problem that our 
country will ever face. Because, without energy, our economy 
will collapse.
    The trouble is that we have an environmental issue on top 
of everything else. And so what we are struggling to do is to 
come up with changes in the way we go about producing energy 
that will be both energy-productive and environmentally benign.
    And it is my personal belief that our current technology is 
not capable. This means that we have got to invest in the 
future. And so I am doing everything I can within our budgetary 
limits to do so.
    I do think Congress understands this. I think that you have 
been supportive. And, as I said before, we are appreciative.
    The scale of the problem is something that is quite 
staggering. My own belief is that we need a continuum of 
opportunities. We need something in what I will call the short 
near term, the next 2 to 3 years, that we can rely on. And 
there are bioenergy research centers. They are one of our main 
hopes.
    But we also have to plan for the long term. And there, ITER 
is the long term. And we have things along the way that we hope 
will materialize. Electrical energy storage that Congressman 
Pastor was referring to, that is not going to happen, I don't 
believe--I hope it will, but I don't think it will happen 
quickly. But we need to make the investment so that it can 
happen.
    So what we have tried to do in our budget is to look at a 
continuum, 2 or 3 years from now and on out till, say, 35, 40 
years, at energy production that is environmentally benign. I 
can't promise you that we will be successful, but I can say 
that if we don't try it, then we are going to pay a heavy 
price.
    Mr. Berry. Thank you, sir.
    Mr. Visclosky. Thank you, Mr. Berry.
    Doctor, what I am going to do is recognize Ms. Emerson for 
a line of questions. We have two votes, so it will be our 
intent to leave toward the end of the first and come back to 
continue, if that would be okay.
    And before members leave too, I also just want to suggest 
that--I want to thank you and all the members.
    I want to thank you very much for Uday Varadarajan, who is 
a detailee from your office. And while Mr. Berry would feign 
ignorance, Uday has done a terrific job in describing things 
like inertial confinement and its distinction between magnetic 
confinement. The problem I have, at 58, is retaining any of 
that information. [Laughter.]
    But now I would recognize Mrs. Emerson.

                        RENEWABLE FUEL STANDARDS

    Mrs. Emerson. Thanks so much for being here, Dr. Orbach. We 
do love having you. And you are the most articulate physicist I 
have ever met. [Laughter.]
    And my uncle was one, so, actually, I have a tiny bit of 
experience. But you, sort of, make the science come to life, 
and it is a great gift. And so we thank you for all you do.
    Just because we have a constrained time limit, let me ask 
you one question on each of the subjects I wanted to ask you 
about. And I apologize, since I was late; I was in another 
committee.
    On the renewable fuel standard, obviously you are aware of 
the energy bill that the Congress recently passed and the 
president signed that calls for us to meet a 36-billion-gallon 
renewable fuel standard goal by 2022. I think that is, from 
what I can tell, kind of a steep hill to climb.
    But anyway, if you could elaborate a little bit on both the 
challenges we face and the strategies that are being developed 
to comply with this renewable fuel standard, I would be 
grateful.
    Dr. Orbach. Well, it is a steep hill. I think you 
understand perfectly.
    I used to think that cellulosic ethanol from corn would 
be--pardon me--corn-based ethanol, the sugars from corn, would 
be limited to about 17 billion gallons, just on the basis of 
how much you could produce. I have been told by our farming 
community, no way, they could hit 30 billion gallons. And so--
--
    Mrs. Emerson. I don't think----
    Dr. Orbach. Well----
    Mrs. Emerson. I mean, we would have to plow up an awful lot 
of land. I think that is a little bit steep. And, believe me, I 
have a total agriculture district, so I will do anything the 
farmers say. I think that is a little bit high, though. Anyway, 
go ahead.
    Dr. Orbach. I would never argue with either you or the 
farmers.
    Mrs. Emerson. I don't argue with my farmers either.
    Dr. Orbach. But nevertheless there are problems, in terms 
of--it is exactly as you said--farm land. The cost of grain now 
is going through the roof. There is also the issue of carbon, 
because of the fertilizers and other products that are 
necessary for farming.
    So my belief is that we will get to the 36 billion, but the 
pathway will be through cellulosic ethanol and cellulosic 
fuels.
    I want to make clear that it is not just ethanol; that we 
are, in fact, at our bioenergy centers now looking at things 
like gasoline and diesel fuel from biomass. And it is not only 
feasible, I think that it is real. And you will be hearing more 
within the next couple of years, as we begin to learn how to 
add these additional carbons to the fuel.
    It won't only be from fermentation. We are seeing some 
initial signs of really quite remarkable success from other 
ways of converting the sugars to fuel. They involve catalysis, 
with remarkable new catalytic structures.
    I think there are some real surprises ahead. The next 
couple of years are going to be very exciting for fuel from 
biomass. We have enough biomass--our studies with USDA--and you 
and I have spoken about this--to replace roughly 30 percent of 
our fuels. The 36 billion represents something like 15 percent 
of what our fuel consumption would be in 2022. We have got more 
there. And I believe this is an investment well worth our 
interest and attention.
    Mrs. Emerson. You know, we actually have a--there is a 
company that is doing some experimental work in my hometown of 
Cape Girardeau that is actually taking biomass and converting 
it into gasoline. And it is, you know, kind of interesting. So, 
anyway, I appreciate that answer.

                             CAFE STANDARDS

    Let me ask you one other question real quick, with regard 
to CAFE standards. You mention them in your written testimony. 
And is the Office of Science coordinating you all's research 
and development efforts with the auto manufacturers? Or is that 
happening somewhere else in DOE?
    Dr. Orbach. It is happening all across DOE. Our interface 
with the automobile manufacturers is at the basic research 
level. They have excellent researchers. And we are in close 
contact with them, and, in fact, they use our facilities.
    And we are, for example, very much involved in the plug-in 
hybrid battery issue. I mentioned the lithium ion battery. And 
the fuel cell issue, we are involved with them. For hydrogen 
propulsion, hydrogen storage, we are working with them.
    Mrs. Emerson. This is a silly question, but do you all 
include consumer preferences or tendencies when you--you know, 
are those taken into account at all when you are developing 
vehicle technologies? I am just curious.
    Dr. Orbach. It is a very interesting question. We 
technically don't understand how to do that.
    However, the noise issue for cars is something that I, as a 
consumer, and you also care about. And so we are working with 
General Motors to design the airfoil properties of cars to 
reduce noise. Toyota has done that. That is why some of the 
Japanese cars are quieter.
    That is a consumer issue. It is also, actually, an energy 
issue. But we are actually using our computational facilities 
for that, but I am afraid that is not one of our great 
expertise areas.
    Mrs. Emerson. Just wondering. Just wondering.
    I better stop there. I think we only have 4 minutes--3. 
Thank you so much.
    Mr. Visclosky. Doctor, we will return in a few minutes.
    Dr. Orbach. Thank you.
    [Recess.]

                    ENERGY FRONTIER RESEARCH CENTERS

    Mr. Visclosky. We will go back into session.
    Dr. Orbach, you have had a number of interchanges, 
particularly with Mr. Olver, on the Energy Frontier Research 
Centers in the Office of Basic Energy Sciences, and had a 
discussion generally about the proposal as well as the $100 
million request.
    The question I would have is, much of this funding is 
intended to support research envisioned for these centers. What 
is the value added by the centers themselves?
    And also, is the funding for research, or is it for 
buildings and facilities to do research in? Because when you 
think of centers, you think of some physical place and 
structure. Is this for research at existing centers? Is this to 
build, from a construction standpoint, centers? How will the 
monies be used?
    Because while $2 million to $5 million on one level is a 
lot of money, in this scenario it is not a great deal of money.
    Dr. Orbach. It would not be used for buildings. It would 
not be used for capital equipment. It would be used for 
research. There may well be research equipment that would be 
required, but it is meant for people.
    And it would be used for groups, because we believe that 
there is an intermediate between the individual project grant 
and something as big as a laboratory that we have not explored 
before for this purpose.
    And so we would hope that maybe half a dozen researchers 
would get together, say, at a university, and we would be 
interested in pursuing some of the aspects that would be 
helpful for energy purposes for our country--and would self-
assemble and would create something that six individuals 
separately could not do and they would work together. You might 
have people from different parts of a discipline who would work 
together collaboratively.
    So it is meant to, sort of, fill in the middle between the 
individual project grant and these very large laboratories. And 
it would, we believe, bring into the energy sphere individuals 
who are very, very fine, who want to contribute but who have 
not been given the opportunity to do so.
    The $2 million to $5 million would be exclusively for 
research and would be committed over a 5-year period. There are 
no matching requirements. There is nothing else associated with 
it. It is focused on energy.
    And there would be reviews. But, after 5 years, if they 
were successful, the intention would be to renew.
    Mr. Visclosky. Would private-sector entities also be able 
to compete?
    Dr. Orbach. Yes.
    Mr. Visclosky. Okay. What is your plan in the out-years, 
for 2010, 2011, 2012? Will there be a commensurate request? 
Will there be follow-on monies on an annual basis then for this 
first 5-year period, or will there be additional competition 
for other centers, if you would?
    Dr. Orbach. The answer is yes.
    What we are doing is working under the trajectory of the 
America COMPETES Act or the American Competitiveness 
Initiative. Both of them essentially track each other.
    And what we would do--the $100 million would be there for 5 
years in our budget. We would take a look after----
    Mr. Visclosky. So it all would not be expended in 2009?
    Dr. Orbach. It would all be expended in 2009.
    Mr. Visclosky. Okay.
    Dr. Orbach. Because it is $100 million in the first year, 
another $100 million in the second and so on. It is permanent.
    Mr. Visclosky. Okay, okay, I got you.
    Dr. Orbach. But what we would do is we would take a look, 
after a couple of years--we anticipate this is going to be very 
successful, but we will take a look, and if it is successful 
and if the trajectory that I just described can happen, then we 
would probably have a second round of competition, and 
continuing the first, so that we would add more of these groups 
to our energy issues.
    It is hard to imagine 6 years out, but in some steady state 
I would like to see on the order of a hundred of these around 
the country. But we have to get there. And I can't promise that 
the trajectories will allow us to do it.
    But we will keep the 20 to 30 funded at $100 million per 
year for 5 years. That is built into our base budget.
    Mr. Visclosky. Although I assume, with your annual review, 
if something is not being productive or someone takes a hard 
turn in the road, there is no guarantee in the out-years.
    Dr. Orbach. That is correct.
    Mr. Visclosky. Okay.
    The committee and I, for one--and, again, I think I speak 
for the committee--really appreciate this initiative. It is an 
initiative of the office that strongly spurs competition, 
opening it up to additional entities. And we appreciate that.
    We do endorse the open, competitive model being proposed 
for the centers, which feature head-to-head competition between 
national labs and universities to ensure the best proposals.
    A concern I do have is for smaller universities and 
entities that still, nevertheless, given some of the larger 
institutions in this country, may be at a disadvantage in 
competing for these centers. How do you plan to address that 
issue in the competition?
    Dr. Orbach. Well, I happen to be from one of those small 
universities. And that is why the small group, say, half a 
dozen, is so important.
    Small universities can be very strong in specific areas. A 
small institution cannot cover all the areas, but most 
universities of quality will focus on some area that they are 
strong in.
    And I think the small institutions are going to do just 
fine, because we are not talking about the whole campus. And we 
hope they will seize upon this. We are trying to make it well-
known. I spoke before an executive board, a very large cross-
section of institutions from across the country, acquainting 
them with this opportunity.
    I think the small institutions may do just fine.

                        APPLIED RESEARCH FUNDING

    Mr. Visclosky. Dr. Orbach, your request for the office does 
call for a significant increase. Other areas in the DOE's 
budget, as I mentioned in my opening statement, see reductions 
for energy technology programs, with the exception of the 
nuclear sector.
    And with oil around $100 a barrel, you have mentioned, 
yourself, the issue of climate change and needing the best 
analysis, as far as a broad portfolio of energy options; and 
your tasking to advise the Secretary of Energy on scientific 
issues relative to all mission objectives, do you believe that 
the energy technology offices have adequate funding for applied 
science research in this budget, to make use of the scientific 
results of the basic research?
    Dr. Orbach. Mr. Chairman, I do. We work very closely with 
the applied programs--with Energy Efficiency and Renewable 
Energy. I mentioned Fossil Energy before. We also work with 
Nuclear Energy. We work across the board with the applied 
programs.
    And what we try to do is to maintain the integrity of both, 
so that the basic research and the applied research maintain 
their identity, because that is, after all, what those programs 
are good at.
    But we coordinate at the interface. And in our budget, for 
the first time, you will see six examples of that coordination. 
And we have worked, over this past year, very closely.
    We sent to Congress, in the summer of 2006, 21 areas that 
we thought were ripe for collaborative research. And then, this 
year, over the years, we have worked to develop these 
relationships.
    The Office of Science will put about, I think it is, $115 
million of the 2009 budget into these coordinated research 
relationships. And it is something like $400 million, when you 
take the applied program contributions into account--roughly a 
two-to-one.
    And the purpose of this is to help one another; to have the 
basic research in form be applied, but also we learn from the 
applications. It is a feed to the basic research area which has 
proven to be very effective.
    So it is a true coordination. And I gave the example of 
carbon sequestration, where we would literally have our 
research scientists on the site of the partnerships. But there 
are other examples in electrical energy storage and others that 
are in the budget.
    Mr. Visclosky. And I would want to commend you for your 
efforts to integrate that R&D. That certainly is our 
impression.
    But it would, then, be your belief that the budget provides 
sufficient funding for long-term applied science?
    Dr. Orbach. I would say so, yes, sir.
    Mr. Visclosky. Okay. And I did not ask, and I would for the 
record, getting back to the Energy Frontier Research Centers, 
staff has indicated that your office and yourself have talked 
to us about those. But you did indicate there were eight or 
nine areas. If you could, for the record, enumerate what those 
areas are.
    Dr. Orbach. Of course.

                    Energy Frontier Research Centers

    The Energy Frontier Research Centers (EFRCs) program was formulated 
based on the series of Basic Research Needs workshops organized and run 
by the Office of Science in cooperation with DOE energy technology 
programs. These workshops engaged more than 1,500 participants from 
universities, industry, and DOE laboratories, who identified high 
priority research directions to address the most critical energy 
research and technology gaps. Workshop topic areas include the hydrogen 
economy; solar energy utilization; superconductivity; solid-state 
lighting; advanced nuclear energy systems; combustion of 21st century 
transportation fuels; electrical-energy storage; geoscience as it 
relates to the storage of carbon dioxide and spent nuclear fuel; 
materials under extreme environments; and catalysis for energy-related 
processes.
    An EFRC must address one or more of the energy research challenges 
described in the Basic Research Needs workshop reports. Examples of 
scientific focus areas that would respond to the EFRC Funding 
Opportunity Announcement include: direct conversion of solar energy to 
electricity and chemical fuels; understanding how biological feedstocks 
are converted into portable fuels; a new generation of radiation-
tolerant materials and chemical separation processes for fission 
applications; addressing fundamental knowledge gaps in energy storage; 
transforming energy utilization and transmission; and science-based 
geological carbon sequestration. The EFRC program is designed to allow 
maximum flexibility to support a broad spectrum of innovative basic 
research and to bring together lead scientists from one or more 
institutions. We are particularly interested in tapping the imagination 
and creativity of the scientific community to address the fundamental 
questions of how nature works and to harness this new knowledge to meet 
some of our most critical energy challenges. Universities, DOE national 
laboratories, the private sector, and partnerships among these groups 
are eligible to apply for EFRC awards.

    Mr. Visclosky. Mr. Ryan.
    Mr. Ryan. Mr. Chairman, I am going to pass for a minute.
    Mr. Visclosky. Mr. Olver.
    Mr. Olver. Thank you, Mr. Chairman.
    Again, I want to reiterate the words that were said by Mrs. 
Emerson previously. I think you have done a wonderful job. You 
must be a wonderful teacher on what can be very difficult 
material, and a wonderful lecturer and an explainer, obviously, 
of this to people. I did not hear, at any point in this 
testimony, a hint of speaking down to any question on the part 
of any person on this side of the table, and I very much 
appreciate that.
    Mr. Visclosky. It might have been tempting to do. 
[Laughter.]
    Mr. Olver. It might have been, I don't know.
    Dr. Orbach. You are being unfair to yourself.

                              ITER FUNDING

    Mr. Olver. And, of course, now I am going to ask some 
stupid question maybe, that it will be even more tempting, I 
don't know.
    I wanted to ask you one more thing on ITER. How much of the 
budget increase is for our obligations under ITER?
    Dr. Orbach. It is quite a substantial part. We are asking 
for $214 million in the 2009 budget for our contribution to 
ITER.
    Mr. Olver. So, essentially, that is the whole of the 
budgetary increase? If I could find the damn budget.
    Dr. Orbach. Yes. It is a little less. The fusion budgetary 
increase, if my memory is right, is about $206 million. But 
buried in that is a $203 million increase for ITER. I think 
those are the right numbers.
    Mr. Olver. Well, I am having a hard time finding it again. 
I have made myself a bunch of little tabs.
    Does that grow? Is that a steady growth over the years, 
from year to year, is that the expectation?
    Dr. Orbach. Yes. It is a construction profile. And so we 
would see that grow. In the out-years, I think the budget for 
fusion energy sciences reaches about $500 million because of 
the envelope.
    Mr. Olver. If we were not to do that, if we refused to do 
that--or even if we join in this cooperation, as I agree with 
you that we really must do, would you sense that we ought to do 
fusion by ourselves as well? Or would we commit ourselves to 
whatever is being done in fusion is going to be done through 
ITER?
    Dr. Orbach. We can't afford to do it ourselves. We pay 9 
percent of the cost of construction for ITER, and we get 100 
percent of its operations.
    Mr. Olver. And you made the comment that half of the 
world's population is involved in that. That must mean China 
and India are both involved in it.
    Dr. Orbach. That is correct.
    Mr. Olver. Okay, along with the other major industrial 
countries.
    But you don't envision, at some point, that we would try to 
establish that world leadership on fusion by ourselves, 
separate from ITER, at any point? It would all be done on a 
worldwide basis.
    Dr. Orbach. It is a very important question, and it is a 
little tricky.
    For the research on ITER, no, there is nothing that can 
replace it, because it is a question of scale. You have to 
produce a burning plasma of enough energy so you get more out 
than you put in.
    Mr. Olver. But that is, then, committing oneself to 
magnetic confinement.
    Dr. Orbach. That is correct.
    Mr. Olver. Are we certain, at this point, that that is to 
be the only route to breakthrough on fusion?
    Dr. Orbach. No----
    Mr. Olver. And you were talking about, earlier here, this 
being the silver bullet maybe by the middle of the century. 
Well, that is almost 42 years away. We used to talk about it 
being 50 years away.
    Dr. Orbach. We will know if ITER works probably much sooner 
than that. It is about an 8-year construction and then, say, 10 
years of operations. We will know in about 15 years whether it 
works or not.
    The other areas you are thinking about--for example, 
inertial fusion--have not shown the ignition properties yet 
that magnetic confinement has. NIF, which is being built at 
Lawrence Livermore, will be the first opportunity to see a fuel 
pellet actually ignite.
    So the way I have looked at it--and it may not be the right 
way--is that their proof of principle will occur in 2010, 2011. 
We will see if they can actually get ignition.
    Magnetic confinement has gotten ignition. We did it at 
Princeton initially, years ago. And they are doing it at a 
place called JET in England. So the proof of principle for 
magnetic confinement, in my view, has been demonstrated.
    Mr. Olver. Is ZETA pinch also a magnetic confinement?
    Dr. Orbach. Yes, but it hasn't reached the scale of 
ignition.

                             ENERGY STORAGE

    Mr. Olver. Okay. All right, look, I have got to go on to 
something else here, or my time will have to wait for another 
round.
    On the battery issue, is the lithium ion battery--are you 
anticipating any of these $2 million to $5 million-type grants 
to go to some alternative to the lithium ion? Or are we 
convinced, at this point, that this is going to be our 
commitment as to what would be a battery going with hybrid 
vehicles?
    Dr. Orbach. Oh, I can't answer that question. It will 
depend on the competition. It certainly appears to be the best 
thing we have right now.
    Mr. Olver. At the moment.
    Dr. Orbach. At the moment. Whether it will continue to be 
remains to be seen.
    Mr. Olver. There is some worry about closing doors to 
research. And these kinds of research areas, there might be 
something that would come in that would pose a theoretically 
reasonable approach to another battery that would be as good or 
better.
    Dr. Orbach. Or a capacitor.

                    ENERGY FRONTIER RESEARCH CENTERS

    Mr. Olver. Well, all right, that raises the other issue. In 
an earlier lifetime of mine, I was an electrochemist. And I was 
sitting here thinking to myself, we wrote those electrochemical 
reactions often with two electron transfers. And, yes, I 
realized as you were explaining that to us that, yes, we viewed 
those as occurring one at a time. Although, by the time the 
equation is written, you have two--I don't remember any when it 
was necessary to write three or more into it. It usually was 
one or two.
    But you have now pointed out that--and I never thought of 
it that way--that in photosynthesis you have two electrons. Are 
any of these $2 millions to $5 millions going to be in the area 
of two electron transfer approaches to the----
    Dr. Orbach. I hope so. Again, I don't know. I am nervous 
about speculating on what the actual proposals will be.
    We very much hope that people around our country will apply 
in electrical energy storage. And we are trying to give, 
through our own research that we have already done, examples of 
areas which they might address. But it is really meant to be 
open.
    Mr. Olver. Okay. Well, we will get some more information 
about what your intended areas are and how this program is 
supposed to work.
    Dr. Orbach. Oh, yes.
    Mr. Olver. You had mentioned that private-sector entities 
might compete.
    Dr. Orbach. Oh, yes.
    Mr. Olver. What kind of private-sector--what range of 
private-sector entities?
    Dr. Orbach. It could be----
    Mr. Olver. Industrial laboratories?
    Dr. Orbach. Oh, yes. It could be small start-up companies 
that have a research capability. In the pharmaceutical area you 
have got a lot of small companies that have superb people.
    We are not limiting it. And, I must say, this is through 
this committee that we have developed these approaches.
    Mr. Olver. I had envisioned them mostly as university 
centers.
    But you are going to do 20 to 30, and those 20 to 30 will 
be funded with the next sequences over a several-year period of 
the same ones that have been funded, but with the caveat that 
the chairman had mentioned: If something really tanks, you are 
certainly not going to continue it. You keep monitoring them 
along the way.
    And then you might start another round of 20 to 30, with an 
additional $100 million per year, at some later time. But the 
intent is to do this 20 to 30 that you would first compete and 
fund those over a period of, say, 5 years.
    Dr. Orbach. Exactly.
    Mr. Olver. Okay.
    When you want to go on, I will stay around for another 
round.
    Mr. Visclosky. Mr. Simpson. [Laughter.]
    Mr. Ryan. I get nervous when he gets that look on his face.

                              ITER FUNDING

    Mr. Simpson. I sit and listen to this, and it is just kind 
of--you know, I get kind of lost.
    Do you know why it is more important to brush your teeth 
before you eat rather than after? That is something I know 
about; I am a dentist. [Laughter.]
    No, I am just kidding.
    Let me ask you a question. If ITER is so important, and you 
seem to make a good case for it, why didn't the president 
request funding for it in the supplemental? Have you had a 
problem convincing the administration, the White House, of its 
importance?
    Dr. Orbach. We simply don't know. I do not know, as of this 
moment, whether the administration will ask for supplemental 
funding for ITER.
    Mr. Simpson. Have you asked them to?
    Dr. Orbach. We have certainly made it clear through the 
administration that we would welcome that. But it is really a 
presidential decision. And we do not have information.

                             PNNL CONTRACT

    Mr. Simpson. Let me ask another couple. We talked about 
competition just a minute ago. Could you explain why your 
office recently canceled the competition for the contract at 
PNNL?
    Dr. Orbach. Yes. We had sent out a draft RFP, and in that 
draft we said that we would not accept as part of a proposal, a 
bid, the issue of a use permit. We would not allow a use permit 
to be part of the contract.
    Mr. Simpson. Explain that, if you would, please.
    Dr. Orbach. The current contract at PNNL--and it is only at 
PNNL--allows the contractor to use federal facilities for 
private ventures. They pay full cost, full cost recovery. But 
it means that they can work with private sector, also with the 
government sector, through the contractor to make use of 
federal facilities.
    And when we looked closely at it, we felt, first of all, 
that it was not necessary, and in some funny way it may even 
have been negative for tech transfer; that other laboratories 
that did not have a use permit were doing beautifully, working 
with the private sector. We just felt there were too many 
problems with it.
    In the event Congress, as part of the omnibus bill, passed 
a law that said that we had to continue the use permit, unless 
both parties--the contractor and the department--agreed to end 
it, under those circumstances you couldn't get the competition 
to work anymore, so we canceled the competition.
    And we have been in conversation with the contractor. We 
can do that because there is no competition on the table. And 
we are still in the middle of that process.
    Mr. Simpson. Do any of the other labs have the use permit 
issue?
    Dr. Orbach. No.

                         Contract Competitions

    The current status of contract competitions for the remaining nine 
Office of Science national laboratories is: Contracts for Argonne and 
Thomas Jefferson were competed in FY 2006, and contracts for Ames and 
Fermi in FY 2007; the Berkeley contract was competed in FY 2005, and 
the Oak Ridge Contract in FY 2000. The Stanford contract expires on 
September 30, 2009 and the Brookhaven contract on January 4, 2010. The 
Princeton contract is currently in the process of being competed.

    Mr. Simpson. What is the status of contract competitions 
for the remaining nine Science labs?
    Dr. Orbach. I don't know if I can remember all of them. Can 
I answer that for the record?
    Mr. Simpson. Sure.
    Dr. Orbach. Because I am worried that my memory may not be 
correct.
    We have made a commitment to this committee that we would 
complete the laboratory contracts. There may be an exception 
for specific reasons that will develop, but I would prefer not 
to talk about it. But I will provide that information for the 
record.
    Mr. Simpson. What is the length of contract that we are 
looking at?
    Dr. Orbach. Well, typically a contract is for 5 years.
    Mr. Simpson. Right.
    Dr. Orbach. And our new contract structure, because of our 
appraisal process which we instituted about 2 years ago, allows 
a contractor under the new contracts to earn an extra year if 
they score above a certain plateau that we have set for 
performance.
    And so, in principle, assuming that the laboratory 
satisfies that grading system--and it is a grading system--they 
could have the contract for 20 years. So it is a 5-year 
contract, but if the performance is above this threshold 
level--it is quite a high threshold--then we would give them an 
extra year. And that extra year would accumulate out to a 
maximum total of 20.
    Mr. Simpson. When we rebid the INL contract, one of the 
things we wanted to do--and, ultimately, successfully did with 
the laboratory part of the contract--was have a 10-year 
contract. We felt like a 5-year contract wasn't sufficient. But 
to have a 10-year contract with appropriate off-ramps for 
nonperformance. You are taking a different approach, with 5-
year contracts with on-ramps for successful work that is done 
there.
    Do you have any idea which direction do you think is the 
best way to go?
    And our feeling was, quite frankly, that having seen it for 
years and having seen the different contractors come into the 
INL, that really what you have is 3 years of work with a 5-year 
contract. First year that they were coming in, they were new to 
the contract, they were getting their feet on the ground, 
getting things running. Then they worked for 3 years, and then 
the last year was to recompete for the lab.
    And so, consequently, you didn't really get 5 years of work 
out of them. I don't want to make that sound like they didn't 
do anything those other 2 years. But it made it really 
difficult, and we felt like a 10-year contract was more 
appropriate.
    Dr. Orbach. Well, that is why we went to that year-by-year. 
It is proactive, rather than reactive.
    Part of this depends on the appraisal process.
    And we believe our appraisal process is quite robust and 
gives us a very good handle--it is actually public. We put the 
report cards on the Web, and you can compare one lab with 
another.
    And so, if we didn't have the appraisal process, we would 
have this issue. But with the appraisal process and this rather 
high threshold for extension, we felt that we would be better 
off that way.
    And you are quite right, if you just have a 5-year window, 
it is very difficult.
    But this way, a contractor that is really performing at a 
very high level would not have that problem, because there 
would always be 3 or more years out in front.

                 CONTRACT COMPETITION FOR SCIENCE LABS

    Mr. Simpson. Does the issue of third-party financing of 
buildings and so forth with some of these laboratories, do they 
come into the contract negotiation and extensions?
    Dr. Orbach. I don't know about the contract negotiation 
itself, but we have participated in third-party financing, for 
example, at PNNL, as part of the 300 Area. I don't know if that 
is in the contract or not. Again, I can find out and respond 
back. But we are allowed, under our current contracts, to 
develop third-party financing arrangements.

                         Third-Party Financial

    Third-party financing of buildings is not part of the consideration 
in the contract negotiation and extension process.

    Mr. Simpson. Are you having trouble with OMB in doing that?
    Dr. Orbach. We have to----
    Mr. Simpson. We had a problem at the site that was trying 
to do a third-party financing, and OMB was a difficult 
customer.
    Dr. Orbach. Yes, they are a difficult customer, but for 
good reasons. They are trying to make sure that this is in the 
government's interest. And that is not so simple to prove.
    And, in fact, on the PNNL situation, as I indicated, there 
are two of the three buildings that will enable us to exit the 
300 Area that will be third-party financed.
    And they were very difficult, but I think for the right 
reason. They wanted us to show that it was in the government's 
interest to do this, rather than just build them. And they made 
us jump through hoops.
    Ultimately, they approved it. And I think that we were able 
to show that it was the right way to go.
    But I welcome that kind of supervision. I mean, it is the 
right thing.
    Mr. Simpson. And I don't disagree with the supervision. 
Sometimes I wonder about the extent of their oversight and how 
restrictive they are getting, because, as you know, in most of 
our laboratories, we have aging facilities. We don't have the 
infrastructure budget to rebuild a lot of these facilities. 
And, consequently, we try to turn to other sources of trying to 
finance some of these things.
    I mean, we have scientists at the INL in old garages and 
old grocery stores? These are the top-notch scientific 
laboratories that they should be. And if we can't get the 
infrastructure needs through appropriations through Congress, 
other sources of financing through third parties is, to me, a 
viable alternative to do.
    Dr. Orbach. I concur. And, actually, I visited INL and saw 
those facilities. They have to, nevertheless, be in the 
government's interest to do that financing as opposed to direct 
appropriation. And it has worked. I mean, 2 years ago, or a 
year ago I guess, we got the green light and we have gone 
forward at PNNL.

                  CHAIN OF COMMAND FOR LANSCE FACILITY

    Mr. Simpson. Let me ask just one other series of questions. 
The LANSCE facility at Los Alamos is in a unique position. This 
is a major science asset, yet it resides physically in the 
middle of a weapons lab.
    What is the chain of command for reporting for this 
facility?
    Dr. Orbach. This is CINT, are you referring to?
    Mr. Simpson. LANSCE.
    Dr. Orbach. Oh, LANSCE. I am sorry. I misunderstood. LANSCE 
is a facility for not only our work, neutron diffraction 
through the Lujan Center, but also for weapons studies. And 
that is sponsored by NNSA.
    And part of the stored beam in LANSCE is used by us for 
open science at the Lujan Center for neutron diffraction, which 
is a pulsed neutron source.
    Mr. Simpson. So what is the chain of command for reporting 
for that?
    Dr. Orbach. That is right up through NNSA, for LANSCE, is 
right up through NNSA.
    Mr. Simpson. Given the limitation of your authority over 
Los Alamos imposed by the NNSA act, how do you ensure that this 
asset remains responsive to the science programs?
    Dr. Orbach. I think it has been just the other way around. 
I think that our relationships with NNSA have been such that 
they want to see the Lujan Center succeed. And so they have 
been very, very supportive of the center and trying to 
refurbish LANSCE to provide beam to the center. We have not had 
any difficulty.
    Mr. Simpson. And how does the user community access 
facilities that are at weapons labs? And are there restrictions 
on university personnel and foreign-born nationals and other 
people for using it as a user facility?
    Dr. Orbach. The answer is that we require all of our user 
facilities to be open. We do have restrictions--
    Mr. Simpson. How does that work at a weapons lab?
    Dr. Orbach. People access a database and get access to the 
facility.
    Mr. Simpson. So you don't see any restrictions? There are 
no problems with them----
    Dr. Orbach. There is a problem for countries that are 
determined to be terrorist-supporting. Citizens of those 
countries or individuals born in those countries need special 
access.
    And we have a process within the department where I and the 
other relevant agencies in the department review their role and 
make sure that it is not in conflict with government policy, 
and then they can also gain access.
    Mr. Simpson. So you don't see any problem that has been 
imposed by having this at a weapons lab?
    Dr. Orbach. Well, I think----
    Mr. Simpson. Should we, in the future, be looking at----
    Dr. Orbach. Yes, that is a hard one for me to answer. I 
think, for a graduate student having to go through the process 
of gaining access, it can't be very comfortable. But on the 
other hand, they do it. And so it seems to work pretty well.
    CINT--that is why I asked you about CINT--is the nano 
facility which is jointly located at Los Alamos and at Sandia. 
And there it is outside the fence. And what it is, is a vehicle 
for reaching in, but there is no security. It is outside.
    On the other hand, our combustion research facility, which 
is at Sandia in California, is behind a fence, but it is not a 
very tall fence. You have to get permission to go through, but 
once you are through, even though you are in between Sandia and 
Livermore, it is fine. It is open. And it is a completely open 
laboratory.
    So there is probably a certain amount of frustration for 
people, but we try to keep that to a minimum.
    Mr. Simpson. Thank you.
    Mr. Visclosky. Mr. Ryan.

                    ENERGY FRONTIER RESEARCH CENTERS

    Mr. Ryan. Thank you, Mr. Chairman.
    Thank you for being here. I apologize for missing early. I 
have a committee the same exact time, every time that I have 
this committee, and I have to choose, unfortunately, pick my 
spots.
    A lot of this--I represent a district that is very similar 
to the chairman's district. And I have a lot of economic 
issues, as does much of the industrial Midwest. And so I have 
an interest and my district has an interest, and I think the 
chairman, as well--I don't think I am speaking out of line--an 
interest in converting the science into economic development 
somehow, whether it is through the medical field, whether it is 
through alternative energy, you know, however this works.
    And I know I am going to spend as much time as the good 
people of the 17th District of Ohio give me in Congress to try 
to make sure that we are commercializing, we are making sure 
that we are developing our science into jobs for Americans, new 
jobs, high-wage jobs.
    And we have had a huge discussion over the last few weeks. 
If you are alive and your brain is working in America, you have 
heard the word NAFTA and globalization and the effects that 
this has had on a lot of our communities.
    And so I just think it is imperative for us to figure out 
together and work together on how we make this work and how we 
convert our science into jobs and economic development. So some 
of my questions are going to focus on that.
    One point of interest here, the Energy Frontier Research 
Centers--and I hope you didn't get too deep into this--can you 
talk to me a little bit about what your plan is for this 
additional money that you are requesting? Where would it go?
    I have a concern, as well as Mr. Visclosky, on this money 
not making its way toward small universities. And so I heard 
you say that that is where you have come from, so that is a 
comforting fact.
    And so can you just talk a little bit about the program? 
Would the money be used for all science? Would it be used for 
buildings, facilities, those kinds of things?
    Dr. Orbach. It is not meant for facilities, and that would 
not be allowed. It is meant for people and for laboratory 
equipment as might be required.
    It is really meant for people in small institutions, I 
mean, not just limited to them, but you don't need--like a 
basketball team, you don't need more than five really good 
players to make a difference.
    And so, if you have a small institution--and like most 
small institutions, you don't have many to go across the full 
spectrum, you put your money where you want to and try to make 
a difference. And most small institutions operate that way.
    So my guess is that there will be a mix. The small 
institutions in your district and any other district will be 
able to compete directly for this funding.
    Universities themselves have become very interested in tech 
transfer. And almost every university--small, medium, large--
have a tech transfer policy. They like to see spin-offs. They 
may have industrial parks associated with the institution.
    Everyone wants what you have described, and so do we.
    So I would argue that these competitions would enable 
regions across our country to compete where people are hungry, 
want to really do something.
    And the energy sphere is a perfect place to start, because 
if you think it is bad now, it is only going to get worse. And 
we are seeing that literally day by day.
    And so this is a growth field, and I can't think of a 
better area for young people to become involved in for the 
future of our country and, indeed, our globe.

                          TECHNOLOGY TRANSFER

    Mr. Ryan. Are there any recommendations, through your 
experience, on what we could do better with the tech transfer 
and with the commercialization of some of these?
    Dr. Orbach. We actually have a program in the department 
for tech transfer. In fact, I am the tech transfer coordinator. 
And we are trying to make a more effective tech transfer 
process in the Department of Energy. The secretary just issued 
a policy statement on tech transfer, which is the first policy 
statement since 1991 from the department.
    But tech transfer depends on the institution, because they 
hold the patent rights, the licensing rights, to research that 
is conducted within their institutions. So at universities, for 
example, most every university, small or large, has an approach 
for licensing inventions that are created by its faculty, for 
example.
    And that is a university issue. And I think they are pretty 
impressive, actually, in that regard.
    So what I would suggest would be that, where institutions 
want to get involved in energy, that this is a real 
opportunity.
    And if they are not familiar with us, please come and talk 
with us. Our doors are open. We talk with everyone about the 
opportunities here. And we would welcome that kind of contact.
    Mr. Ryan. We will call your scheduler.
    Dr. Orbach. Good.

                    ENERGY FRONTIER RESEARCH CENTERS

    Mr. Ryan. And we will make that happen.
    The proposal looks like it is $2 million to $5 million 
annually, as how it would break down.
    Mr. Orbach. That is correct.
    Dr. Ryan. Is that enough?
    Dr. Orbach. For a university, for example, it is a fair 
amount of cash. I mean, you are talking $2 million to $5 
million. Most of the current centers that are out there are in 
the $1 million to $2 million level.
    We have it up to $5 million because we wanted to leave that 
window open in case larger groups wanted to get together. 
Again, we don't know what we are going to get, so we tried to 
give it a range, and we will see.
    Mr. Ryan. Is there a match required?
    Dr. Orbach. No.
    Mr. Ryan. No match?
    Dr. Orbach. No match and no outreach. This is straight 
research. We are out to get energy.

                            ISOTOPE PROGRAM

    Mr. Ryan. I like that. I like that no match.
    I have another question with regard to nuclear medicine. 
One of the issues there is--where my district is between 
Cleveland and Pittsburgh. And there are hundreds and hundreds 
and hundreds of millions of dollars in research between the 
Cleveland Clinic and Case Western Reserve and university 
hospitals and University of Pittsburgh Medical Center.
    And so what our goal is to try to figure out how cities 
like Youngstown and, kind of, the old Rust Belt cities plug 
into this research.
    And so I was just reading--and I don't know a whole lot 
about this, and I was hoping you could enlighten me a little 
bit--with nuclear medicine and the medical isotope program, and 
there has been some switching of responsibilities there.
    Can you talk a little bit about what your plans are? And 
how much of a priority this is for you? And what would you see 
the future of this program being?
    Dr. Orbach. This is a major issue for us. The department 
has proposed to switch the isotope program from nuclear energy 
to the Office of Science and into our nuclear physics program. 
And the reason for that is the research side of it. And so 
there will be about a $3 million add that we will focus on 
research with isotopes.
    We have established a working group with NIH, because we 
don't want to be the ones that specify what the isotopes are 
for. And so we have a working group, as I said, right now, and 
I will meet with Dr. Zerhouni at some point. And then we will 
establish a workshop this summer for the community at large, 
people you are talking about.
    NIH and DOE Office of Science will have, I hope, worked out 
a relationship between us. We don't want to do the medicine. 
That is NIH's expertise. But on the other hand----
    Mr. Ryan. We don't want you to do the medicine.
    Dr. Orbach. No, you don't want a physicist doing medicine.
    But on the other hand, we know how to produce isotopes, and 
we know how to handle that process.
    And it may not just be from reactors. It may be from 
accelerators, as well. But we don't know which isotopes the 
nuclear medicine community requires, because, again, there is a 
research issue here. And they are experimenting with different 
isotopes.
    And there are issues with delivery and lifetimes.
    The thing is really quite complicated. So we first want to 
get a relationship with NIH worked out. And then we are going 
to open it up and ask the community what it needs and wants, 
and ultimately establish a prioritization, because we certainly 
will never be able to produce enough isotopes for everyone.
    But we will, I hope, as a consequence of this, have the 
community in sync with our two agencies, in terms of the 
direction we need take.
    Now, in parallel to this, we have another program which we 
call radiochemistry and instrumentation. That is in another 
program we have. And that is the one that has looked at things 
like PET scans and visualization in living creatures and 
sometimes humans.
    And those two have been separated. We want to bring them 
together, because they use isotopes, as well. And so, depending 
on what the community comes up with and what arrangements we 
can work out, we would like to really make a difference in this 
area.
    Right now, the United States depends on Canada for--I have 
had a technetium-99 examination, but the molybdenum-99 is 
produced at Chalk River. We depend on Belgium for isotopes. But 
because they have half-lives sometimes that are very short, we 
can't make use of all of them.
    So we need to come up with a plan for the United States, in 
terms of our needs.
    Mr. Ryan. So there are no universities included now----
    Dr. Orbach. Actually, there are.
    Mr. Ryan. There are?
    Dr. Orbach. The University of Missouri is a producer of 
isotopes through their nuclear reactor. And we do some at HFIR, 
at Oak Ridge, and I am afraid I don't know all of them. But, 
no, universities are involved.
    Mr. Ryan. Okay. And then you will open that up and----
    Dr. Orbach. Absolutely.
    Mr. Ryan [continuing]. Include more? Okay, great. Thank 
you.
    Thank you, Mr. Chairman.

                           ISOTOPE PRODUCTION

    Mr. Visclosky. Doctor, if I could follow up on Mr. Ryan for 
a second, you mentioned radioisotopes. Is there a supportive 
environment for that radioisotope effort with the 
administration?
    Dr. Orbach. Well, I hope so, yes.
    Mr. Visclosky. From a funding standpoint?
    Dr. Orbach. Well, the funding from nuclear energy is being 
transferred. And there is an additional $3 million.
    Mr. Visclosky. And that will be enough for you?
    Dr. Orbach. Well, but that is not all the funding, because 
if it is like technetium-99, for example, that is just a 
standard isotope that the community pays for. And so parts of 
this are reimbursed.
    The issue which is more tricky is research; that is, when 
an institution of the sort, for example, that Congressman Ryan 
has mentioned--these are research hospitals. They may want to 
experiment with a new isotope, and a new isotope can be very 
expensive to produce.
    Who is going to pay for it?
    And that has been a real problem with the medical 
community. And I don't know the answer to that. And that is 
something we need to work out with the community.
    If we don't have enough money, we will ask for enough, if 
it is appropriate, for the government to provide it in a 
subsequent budget. But I can't answer that now, because I don't 
know what the community will require.
    Mr. Visclosky. And it would be NIH's role to determine what 
isotopes are necessary for what medical purposes?
    Dr. Orbach. Precisely.
    Mr. Visclosky. From a research perspective, it would be 
your responsibility to research how best and most efficiently 
to then produce those isotopes?
    Dr. Orbach. That is correct.
    Mr. Visclosky. And under the administration's proposal, 
then, to move the production to your office, you would also 
then produce them?
    Dr. Orbach. That is correct.
    Mr. Visclosky. Is the production aspect of this--are you 
the right shop for that?
    Dr. Orbach. Well, considering they use our facilities to 
produce them--HFIR is an Office of Science facility----
    Mr. Visclosky [continuing]. Using your facilities now----
    Dr. Orbach. Oh, yes.
    Mr. Visclosky [continuing]. To produce it?
    Dr. Orbach. We have a very close relationship with them. I 
am now the chief technical officer for nuclear in the 
department for the Office of Science. I can't remember the 
acronym. But we have always worked closely together, because we 
have the facilities.
    Mr. Visclosky. So from your perspective, there would be a 
rationale----
    Dr. Orbach. Yes.
    Mr. Visclosky. And, of course, weatherization has nothing--
well, it has nothing to do with this hearing right now. But one 
of the arguments about zeroing out weatherization under DOE is, 
well, that is not where it is supposed to be. And I am just 
wondering, is production of those isotopes in your shop where 
it should be?
    Dr. Orbach. I believe so. We haven't had the meeting yet 
with the community, so I am a little nervous about some 
sweeping generalization. But our nuclear physics program has 
the technical knowledge to handle production of isotopes. And 
we have a research base.
    And what has been missing is the research side of isotope 
production. And that is why the transfer was made.
    Mr. Visclosky. And you continue to do the research on the 
production aspect, not just----
    Dr. Orbach. Production----
    Mr. Visclosky [continuing]. Production, but how you can 
best do it, how you can improve the efficiencies?
    Dr. Orbach. Absolutely.
    Mr. Visclosky. Okay.
    Dr. Orbach. And how we can be responsive to the medical 
community.

                        CLIMATE CHANGE RESEARCH

    Mr. Visclosky. And I have a couple more, and then I will 
recognize Mr. Olver.
    But you--because I think almost everyone has asked about 
the Energy Frontier Research Centers. And while there has been 
a lot of give-and-take here this year and in past years about 
the administration following directives and earmarks and what 
have you, I would just point out this has been, I think, a very 
positive example of where you have two co-equal branches of 
government.
    And under Mr. Hobson's leadership, when he was Chairman, 
pressing that we want to be as inclusive and broad as possible, 
because large institutions or those who have been favored in 
the past may not have all the good ideas. Small institutions 
may not have all the good ideas. And we ought to cast a 
reasonably wide net in a financially responsible fashion.
    And I really do think that you and the department, in this 
instance, took that to heart and have tried to design a program 
to do just that. And I think that type of give-and-take and 
collaboration that, if we saw a little bit more of it, the 
country would be a lot better off.
    So I would just make that observation. I do have some 
additional questions.
    We are also pleased with your decision to substantially 
increase funding for climate change modeling. However, we are 
concerned about the state of funding for the science on the 
ground needed to inform those modeling efforts, as well as the 
broader modeling needed to understand their wider impacts.
    Integrated assessment models which are used to try to 
understand the wider impacts of climate change, as well as the 
impacts of various climate policy and technology options, have 
been receiving flat or decreased funding. As we increase 
funding for modeling, shouldn't we also be increasing our 
efforts to try to understand its impact and mitigation options 
on the ground?
    Dr. Orbach. Yes, absolutely, and also to look into the 
inputs into those models from soils, from clouds and so on. We 
are having a workshop this month, on the 26th of March, 
precisely to respond to that question, namely, where should we 
put the money? There is an increase in our budget.
    Mr. Visclosky. Do we need additional money----
    Dr. Orbach. Well, we have asked for additional funding for 
climate research. And what we want to do is to understand how 
best to use those funds, what fraction of it should be used for 
inputs, and what fraction should be used for modeling.
    Mr. Visclosky. So you have asked for more money for the 
input side, not just the modeling side?
    Dr. Orbach. That is correct. We do not know the--I don't 
want to say that I know the answer yet. We have put them into a 
basket. And what we are going to try to do is optimize how they 
interface with one another.
    And to do that, we are having an open workshop, as I said, 
toward the end of this month. We have the best people in the 
country coming.
    Mr. Visclosky. Let me ask you this. You have asked for an 
increase and you are looking to see what that balance should 
be, as far as the input and the modeling. Would there be some 
efficacy if you had additional funds in that account? And if 
so, would you want to speculate as to what the range of that 
would be?

                        CLIMATE RESEARCH FUNDING

    Dr. Orbach. Well, it would be awkward to speculate. I would 
prefer to wait for the workshop to see the nature of its 
results.
    You said something else that is very important, and that 
is, when you talked about climate, you also talked about 
adaptation and its consequences.
    And that is something that has not been built in. And one 
of my dreams is to build that in, that is, to integrate the 
human person response into a modeling and measurement 
structure.
    Right now, when we do climate modeling, we have an 
integration between the atmosphere and the ocean. We allow them 
to interface. And that integration then drives the climate 
predictions.
    But when it comes to the humans, we just ask, ``Well, okay, 
if this happens, what do you do?'' We never ask, ``Well, maybe 
the humans would respond and do things differently if such-and-
such took place,'' in other words, to have an interactive model 
between human behavior and these physical climate issues.
    Mr. Visclosky. Would that be part of the discussion in your 
workshops?
    Dr. Orbach. It will be. Whether we have the capability of 
actually doing that remains to be seen. We need to work with 
the social science community and also our computational 
community to see if we can accomplish it. But that is where I 
would like to go.
    Mr. Visclosky. Didn't Isaac Asimov write a trilogy about 
that concept, the ``Foundation'' trilogy?
    Dr. Orbach. Help me.
    Mr. Visclosky. Okay, we will move on. [Laughter.]

                              ITER FUNDING

    One last thing, and then I will turn to Mr. Olver. If there 
is no funding for ITER, what are the other options?
    Dr. Orbach. Oh, goodness. Well, we are, first of all, 
committed to remain part of the ITER organization for 10 years. 
And if there is no funding for ITER in 2009, it will be a 
dreadful setback.
    To be honest with you, I haven't anticipated such a 
consequence because the consequence--to think of what might 
happen down the road if ITER works and we are not a part of 
it--we are talking about the energy future of the world and the 
United States is out of it.
    I was asked a question before about what is in it for the 
United States, for the fusion community. And if ITER works, 
then the first thing I would do is to try to get the community 
in the United States on a path towards a demonstration reactor, 
that is, to build a power reactor.
    That would be a demonstration--this is all in the out-
years. But we would want to be the producer of it. And if we 
are not part of it and the rest of these other six parties 
are--you know, right now we are spending a lot of money to buy 
oil. Just imagine if we end up spending it to buy electricity.
    I just think that it would be so awful for our country, I 
haven't really considered it.
    Mr. Olver. I guess that almost requires me to weigh in a 
little bit here on that question, Mr. Chairman. We are 
committed to, if I remember correctly, something like 9 percent 
or 10 percent of the development of ITER. And so that 9 percent 
or 10 percent per year means that there is $2 billion or 
something like that for the development of the program.
    I have people in the science field who tell me the piddling 
amount that has gone into it year by year by year by year by 
year is a major part of why it is we have not reached that 
question of whether that silver bullet is actually there; that 
if we were to spend $1 billion or $2 billion, $1 billion a year 
for 15 years, or $2 billion a year for 10 years, or something 
like that, then we would get there, then we would be most 
likely to get there, to actually achieve it.
    So, to me, not taking part in this one really does put us 
behind the eight-ball in a very severe kind of a way. I would 
just leave that. And that is not very well-articulated, 
perhaps.

                            BIOFUEL RESEARCH

    To go back to an earlier question by Mr. Pastor, who was 
talking about use of algae, growth of algae as a biofuel, as a 
bio-feedstock essentially, you then went beyond that and 
started talking about the creation of hydrogen from perhaps 
algae, but then you went on to bacterial.
    But it turns out, 40 years ago, when I decided to leave 
chemistry, I took a sabbatical, a year or two to run for 
political office. And the last sponsored research program that 
I was involved in was one--I was a junior collaborator in it--
was a bacterial production of hydrogen, in which the Air Force 
Office of Scientific Research had some interest for some space 
purpose.
    Now, just let me ask you: Since you have raised it at that 
point and sort of took the use of algae as a feedstock to that, 
which was a little off that topic, does that suggest that there 
is still some hope? Would that be one of the areas that is 
among your group of areas that your $2 million to $5 million 
might end up working in?
    Dr. Orbach. Absolutely.
    Mr. Olver. Absolutely.
    Dr. Orbach. And what has changed----
    Mr. Olver. That is very interesting.
    Dr. Orbach [continuing]. Since you and I studied that has 
been genomics has the ability now to sequence and to modify.
    Mr. Olver. Exactly.
    All right, the last one I wanted to touch on, on the three 
big centers, they are down for the development basically of 
cellulosic ethanol and other biofuels. Now, are you talking 
about ethanol, other alcohols, other biofuels containing oxygen 
or are you really talking about all kinds of biofuels?
    Dr. Orbach. I am talking about gasoline. I am talking about 
diesel fuel. I am talking about all kinds of biofuels.
    Mr. Olver. All right, then what I want to--I have a paper 
which I am going to give you. It is a group of scientists and 
engineers from the university that I abandoned 40 years ago, 
that have come back with at least a paper that they thought I 
would still understand, and asked me to try to make certain 
that we didn't close some of those other potential routes.
    Dr. Orbach. Is that UMass-Amherst?
    Mr. Olver. Yes.
    Dr. Orbach. I know the group.
    Mr. Olver. You know the group----
    Dr. Orbach. And not only is that not----
    Mr. Olver [continuing]. George Huber and so forth?
    Dr. Orbach. Yes, absolutely. In fact, I talk to Dimmesic, 
who is at Wisconsin, who was his advisor, thesis advisor, and 
asked him about--and they were the ones actually who have been 
developing the catalytic methods. And they produce gasoline.
    Mr. Olver. Okay, you mentioned those. And I didn't know 
whether you had--how far that had reached into your research 
protocols.
    Dr. Orbach. Oh, it is very much a part of it.
    Mr. Olver. Because they have the gasification to syngas and 
the pyrolysis mechanisms. There is a whole series of mechanisms 
where you can go directly to hydrocarbons, but it turns out 
that you go beyond the sequence that gets you to ethanol in the 
process, and then start rebuilding the molecules into your 
hydrocarbons.
    Dr. Orbach. That is precisely it. You strip the oxygen from 
the sugars.
    Mr. Olver. Right.
    Dr. Orbach. You then create the linear molecules. It can 
have six carbons; it can have more. And then you do another 
catalysis to turn them into the cyclic compounds that produce 
gasoline.

                           BIODIESEL RESEARCH

    Mr. Olver. So you have got fuel and biodiesel and gasoline-
type things. And my first reaction was that the energy balances 
on this, carrying it all the way down and then rebuilding, 
would be unfavorable. But then the efficiencies of the various 
processes along the way, if they fit together, you can actually 
have a breakthrough there, quite significantly.
    Dr. Orbach. I believe so. And what is so special about what 
they are doing at UMass and also at Wisconsin is the 
temperature. Normally you think of catalysis at very high 
temperatures and then you have got to put energy in. They got 
the temperature down to a couple hundred degrees Celsius, which 
is quite remarkable for a catalytic process, as you remember.
    And so there is a lot of hope here. First of all, they 
would certainly be welcome to compete for the Energy Frontier 
Research Centers, but we already are supporting research in 
catalysis for fuels on an individual project basis.
    Mr. Olver. But this is already going on in your three big 
centers, your three big group centers?
    Dr. Orbach. No, it is only going on in one of them. It is 
going on in the Wisconsin center.
    Mr. Olver. I see.
    Dr. Orbach. That is where Dimmesic is located. But that is 
what I meant when I said they are complementary.
    Mr. Olver. For the $2 million to $5 million again, in part?
    Okay, I think I have finished, Mr. Chairman. Thank you very 
much.
    Mr. Visclosky. Mr. Simpson, anything?
    Mr. Ryan.

                          HIGH-ENERGY PHYSICS

    Doctor, two other areas, and then obviously we will have a 
large number of questions for the record.
    The 2008 omnibus bill did not provide funding for the NOVA 
activity and limited funding for the International Linear 
Collider and superconducting R.F. R&D activities in the high-
energy physics program. These activities were included in the 
2009 budget request.
    Have you formulated a plan for fiscal year 2008 that would 
enable these programs to retain capabilities that they would 
require to carry out activities that you have budgeted for 
2009?
    And the second question I would have is, is there any 
consideration about asking for a reprogramming request relative 
to the program?
    Dr. Orbach. Well, the answer to the first question is yes, 
but we want to put it in a context of the future of high-energy 
physics. This was a question that you addressed at the very 
beginning.
    With the 2008 appropriation and with CERN starting to come 
on, the large hadron collider--and actually, this year, they 
will get their first beam--we have asked a larger question. And 
so we have gone back to the High Energy Physics Advisory 
Panel--they call it HEPAP--and asked them to consider how they 
would use the budget that they have now and other budgets to 
prioritize what they do to give us maintenance of world 
leadership.
    That is, what should we be doing with the funding we have 
available, and hopefully additional funding, that would be in 
the best interests of high-energy physics, in terms of 
leadership?
    And that committee is meeting as we speak. It will issue, I 
believe, a preliminary report at the beginning of April. And 
then, at the full HEPAP meeting about a month later, the full 
committee will consider its recommendations.
    So we are addressing the issue that you raise. And we will 
have, I hope, a roadmap for the community that will give us a 
better fix on the directions we are to go.

                        SUPERCOMPUTING RESEARCH

    Mr. Visclosky. It seems that some of the expertise and 
capabilities that we have developed in our civilian national 
labs in supercomputing might be of significant interest not 
only to other scientists, but also for commercial applications, 
like designing better engines. You had mentioned earlier the 
issue of coal and fossil fuels.
    I believe your scientific discovery through advanced 
computation and the Innovative and Novel Computational Impact 
on Theory and Experiment programs are aimed at taking advantage 
of such opportunities. Could you, in the time we have left, 
tell me a bit more about these programs and what kind of 
projects you are funding with it that would have commercial 
implications and applications?
    Dr. Orbach. We have been very pleased with the response of 
the commercial sector, because this is new and they haven't had 
experience with these kinds of computational platforms before. 
We have 17 companies now that have competed for time on our 
leadership class facilities and been successful.
    We started with two. The year before last, we had four. 
Last year, we had 11. And now we have 17. And the reason for 
the increase has been the remarkable results that industry has 
achieved, not just big industries, but small, medium and large.
    What we do is, when an industry is interested, we start 
them off, if they haven't had experience with supercomputers--
because these are not simple to work with--we begin their 
programs at NERSC. That is our supercomputer at Berkeley. And 
we work with them to introduce them to the use of the computer 
and to develop codes that can then run on what we call our 
capability machines at Argonne and at Oak Ridge.
    We have had phenomenal success. Boeing has reduced the 
number of wind tunnel tests, which are very expensive. In fact, 
they have been so successful they have asked us for proprietary 
time on the Oak Ridge machine, and we worked out, as I answered 
before, a scheme for them to pay the full operating cost.
    Proctor & Gamble, I have been told, will no longer issue a 
new product without actually going through a simulation to see 
how it performs. Pratt & Whitney has come out with a new, more 
efficient jet engine, which we are told was a direct result of 
the simulations that they performed on these supercomputers.
    We are seeing more and more evidence of reducing time to 
market and virtual prototyping by industry on these machines. 
This is an approach that no other country is doing. We really 
have set out, in my view, a quite U.S.-like leadership here, 
where we bring industry in to our scientific facilities and 
give them access and work with them.
    Ultimately, some of these industries may buy their own 
supercomputers. This gives them a chance to see what they can 
do with them and then determine whether they want to invest in 
them.
    If that is the case--and I believe it is--we are going to 
generate a market, then, for the producers of these machines, 
for the vendors in the private sector. That would be the ideal.
    Mr. Visclosky. Doctor, thank you very much. And I always do 
believe actions speak louder than words. And while you received 
an increase of $220 million in the omnibus, I would again note 
from my opening remarks that the House mark was $717 million, 
which I think is an indication of the belief that members of 
the panel have that you have tried your best in a number of 
areas.
    And one that I haven't specifically addressed, but, again, 
there have been questions and comments about is trying to 
integrate basic science, as far as its application, and then, 
even most recently, the commercialization.
    I can still remember a meeting, both of which we attended 
in Mr. Hobson's office, with a broad range of people, one, to 
integrate work on supercomputing and then to make sure there is 
some application, too.
    So I really do appreciate that, and certainly appreciate 
the members' attendance and wish you well in this year of 2008.
    Thank you very much.
    Dr. Orbach. Thank you, Mr. Chairman.
    [Questions and answers for the record follow:]

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                                           Tuesday, March 11, 2008.

   U.S. DEPARTMENT OF ENERGY--ENERGY SUPPLY AND CONSERVATION, FOSSIL 
          ENERGY, ELECTRICITY DELIVERY AND ENERGY RELIABILITY

                               WITNESSES

ALEXANDER KARSNER, ASSISTANT SECRETARY FOR ENERGY EFFICIENCY AND 
    RENEWABLE ENERGY
JAMES SLUTZ, ACTING PRINCIPAL DEPUTY ASSISTANT SECRETARY, OFFICE OF 
    FOSSIL ENERGY
KEVIN KOLEVAR, ASSISTANT SECRETARY FOR ELECTRICITY DELIVERY AND ENERGY 
    RELIABILITY
C.H. ``BUD'' ALBRIGHT, JR., UNDER SECRETARY OF ENERGY

                 Chairman Visclosky's Opening Statement

    Mr. Visclosky [presiding]. Good morning. The subcommittee 
will come to order. The Subcommittee on Energy and Water 
Development meets today to hear testimony on energy research 
and development programs at the Department of Energy.
    The rising price of gasoline is hitting the wallet of every 
American. In January 2003, the average retail price for a 
gallon of gasoline in the United States was $1.50, roughly 
equal to the real, inflation-adjusted price during much of the 
preceding half-century. Since then, the price of gasoline has 
risen sharply. It was last below $2 per gallon in February, 
2005, and for much of 2007 prices topped $3 per gallon. Over 
the past 2 years, this subcommittee has provided $2.4 billion 
to support research, development and deployment of renewable 
energy and energy efficiency programs.
    Today, we have the Assistant Secretary for Energy 
Efficiency and Renewable Energy, Mr. Andy Karsner, to discuss 
his fiscal year 2009 budget request. I will ask you, Mr. 
Karsner, how this investment in your programs will ease the 
price of energy for all Americans since the expenditures of 
these monies does not seem to have had a positive effect to 
date.
    Hardly a day goes by without a story on the future use of 
coal, concern over CO2 emissions, and whether 
utilities will go ahead with future coal plants. Mr. James 
Slutz, the Acting Principal Deputy for Fossil Energy, is here 
to defend the fiscal year 2009 fossil energy budget request, 
and I do hope our discussion today, Mr. Slutz, is in nominal 
dollars.
    Monitoring the electric grid capacity, surety and security 
are key to making electricity available to all of us. Assistant 
Secretary for Electricity Delivery and Energy Reliability, Mr. 
Kevin Kolevar, has the job where if you don't see him, it is a 
good thing, because it means grid operations are working. We 
look forward to hearing about the fiscal year 2009 budget 
request for these programs.
    And finally, we are pleased to have the Under Secretary of 
Energy, Mr. Bud Albright, for his first appearance before this 
subcommittee. Mr. Albright, welcome. We would like to hear from 
you about the programs under your jurisdiction, along with 
specific administration initiatives such as the retooling of 
FutureGen and the reoccurring initiative to expand the 
Strategic Petroleum Reserve.
    Gentlemen, welcome. Let me ask you to present a summary of 
your remarks. Your full written testimony will be entered into 
the record. I ask that you ensure that the hearing record, the 
questions for the record, and any supporting information 
requested by the subcommittee are cleared through the 
Department and the Office of Management and Budget, and 
delivered in final form to the subcommittee no later than 4 
weeks from today, since we will potentially be under very tight 
time constraints as far as marking up our bill.
    All members who have additional questions for the record, 
please have them submitted to the subcommittee offices by 5:00 
p.m. today.
    And now it is my pleasure to turn to my friend and 
colleague, Mr. Hobson, for any opening remarks he has.

                     Mr. Hobson's Opening Statement

    Mr. Hobson. Good morning, and thank you, Mr. Chairman.
    Well, gentlemen, welcome to an unfortunate series of Energy 
Department hearings. I do hope we won't hear another recounting 
this morning of how the Department is ignoring congressional 
direction in order to meet its own internal priorities. Some of 
you have been here before. Bud, it is good to see you again in 
this setting. This is my last hearing, and I guess some of your 
last hearings also--your first and last, I guess, Bud. I don't 
know what that says. [Laughter.]
    Congress provided a significant increase for each of your 
programs over the President's fiscal year 2008 request. Mr. 
Kolevar, your budget received nearly $14 million more than 
requested. Fossil energy received a $176 million increase from 
the request, and energy efficiency and renewable energy was the 
biggest winner, with an overall $486 million added to the 
request.
    I might have a question later about whether this is the 
right balance or not. Maybe more money should go to fossil 
energy since whether we are thinking about cutting carbon 
emissions or reducing reliance on foreign oil, we have to 
improve our coal plants.
    Of course, I think nuclear is going to be an increasingly 
important part of our generation, but I will talk about that at 
the nuclear energy hearing. I have serious questions about what 
this department has or has not done do to advance nuclear 
energy. Anyway, I hope we can talk more about the correct 
balance later.
    I am going to mention one other thing, and maybe this isn't 
the right place to do it, but I am going to do it anyway. The 
other day I was in a hearing, a defense hearing. We were 
talking about the biggest problem in Afghanistan, and it is 
energy and the transmission lines. I said to the guy that when 
I was chairman, 3M came to us with a program that would help. 
If they could get some development of their product, they could 
increase the capacity of the power lines without restringing 
them. I said, why didn't you go to DOE? And he said, well, they 
won't talk to us.
    So we did an earmark for about 3 years. Then I read an 
epistle from the Department of Energy saying how wonderful this 
new program was and that 3M had this product. I thought, how 
ironic. DOE wouldn't even talk to them in the beginning until 
we did one of those dreaded earmarks that the administration 
talks about so much. Now, there is a product out there and it 
may be of some use. So, we are going to try and go back and see 
if we can use it in Afghanistan to help with their energy 
problems.
    Once again, welcome to the subcommittee. I hope that the 
next few hours proceed smoothly and that each of you can give 
us good news about how you are implementing our direction, 
along with your own. I look forward to hearing your testimony, 
and then we will get into questions.
    Thank you for being here.
    Thank you, Mr. Chairman.
    Mr. Visclosky. Secretary Albright.

                    Mr. Albright's Opening Statement

    Mr. Albright. Thank you, Mr. Chairman and members of the 
committee. I am pleased to be here today to present the 
president's fiscal year 2009 budget proposal for the Department 
of Energy. In keeping with your invitation, this testimony will 
focus on budget requests for the Office of Energy Efficiency 
and Renewable Energy, the Office of Electricity, and the Office 
of Fossil Energy. The assistant secretary for each of the 
organizations is with us, as you know, and can give a more 
detailed statement concerning their budget request.
    First, though, let me put some context to the department's 
overall budget request. In fiscal year 2009, the department 
will implement the Advanced Energy Initiative to accelerate the 
research and development of clean energy technologies and 
diversify our nation's energy supply. These efforts will foster 
continued economic growth and promote a sustainable energy 
future.
    Our goal can be met by, one, accelerating the development 
of clean and renewable energy technologies that will 
dramatically increase the amount of reduced-emission energy 
produced in the United States; two, advancing energy-efficient 
technologies and practices that use less energy; and three, 
providing information from research, development and 
demonstration activities that can help stimulate private sector 
choices that will drive change in our energy system.
    Our energy portfolio benefits from the abundance of coal as 
a domestic energy source, and we remain committed to research 
and development to further advance coal's clean and efficient 
use. The budget provides $407 million to research and $241 
million to demonstrate advanced coal technologies. This money 
is almost entirely dedicated to cost-effective carbon capture 
and sequestration for coal-fired electricity plants.
    The department also continues to work with the Department 
of Treasury to administer a $1.65 billion in investment tax 
credits from the Energy Policy Act of 2005. That will 
accelerate the commercial deployment of technologies central to 
carbon capture and storage.
    The Office of Energy Efficiency and Renewable Energy is 
requesting $1.255 billion for 2009, approximately $19 million 
higher than in 2008. This is to manage America's investment in 
the research, development and deployment of DOE's diverse 
energy efficiency and renewable energy applied science 
portfolio. These funds support a necessary, diverse and 
critical path of energy efficiency and renewable energy 
research that, partnered with public and private actions, can 
help the United States meet the energy challenges of the 21st 
century.
    As our nation's energy capacity grows, we are faced with 
the challenge of ensuring more reliable electricity delivery. 
Because electricity is vital to nearly every aspect of life--
from powering our electronics and heating our homes, to 
supporting commerce, transportation, finance, food and water 
systems, and also ensuring national security--any disruption of 
electricity can have a major consequence to the economy and to 
public health and safety.
    With an investment of $134 million in 2009, the department, 
through the Office of Electricity Delivery and Energy 
Reliability, will provide leadership in developing the next 
generation of electric delivery infrastructure systems that 
will enable reduced-emission energy choices, spur development 
of automated grid operations, and encourage strong market 
economics.
    In 2009, the Department of Energy continues to strengthen 
the framework built over the last 8 years to ensure our 
national energy security and reliability. Energy helps drive 
the global economy and has a significant impact on our quality 
of life and the health of our people and our environment. We 
must continue to develop and to use energy if we are to support 
and sustain a strong economy. We must also continue to find 
more efficient and diverse ways to power our world.
    I appreciate this opportunity to testify. This completes my 
opening statement, and I am happy at the appropriate time to 
answer any questions you have.
    [Statement of C.H. ``Bud'' Albright:]

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    Mr. Visclosky. Thank you very much.
    Mr. Karsner.

                    Mr. Karsner's Opening Statement

    Mr. Karsner. Good morning, Chairman Visclosky, Ranking 
Member Hobson, members of the committee. Thank you for the 
opportunity to testify on the president's fiscal year 2009 
budget request for the Office of Energy Efficiency and 
Renewable Energy.
    EERE's fiscal year 2009 request of $1.255 billion, 
approximately $19 million higher than the fiscal year 2008 
request, provides a balanced and diverse portfolio of solutions 
to address the energy and environmental challenges facing us 
today. The request will enable EERE to research, develop and 
deploy renewable energy technologies to dramatically increase 
the amount of clean energy produced in the United States; 
advance energy efficiency technologies and practices to 
sustainably decouple energy demand from economic growth; and 
strengthen commercialization and deployment to support rapid 
adoption by private industry of clean energy technologies.
    The need for clean energy solutions is abundantly clear, 
with the nation's energy challenges plainly identified. Our 
efforts today and onward need to be about the implementation 
and scaling of solutions--well-identified solutions, multi-path 
solutions, parallel path solutions--trying what we must on a 
scale and a pace that is commensurate with the magnitude and 
urgency of the problem.
    On December 19, 2007, the president signed the Energy 
Independence and Security Act of 2007, EISA, into law. The new 
mandates included in EISA are unprecedented in size, scope and 
timeframe. Together, we are taking great strides to move beyond 
problem identification and towards problem solving that will 
enhance our energy security, diversify our energy systems and 
reduce emissions that affect global climate change.
    EERE's overall budget request reflects the funding needed 
to meet our energy challenges head-on. Advanced fuels in 
vehicles, renewable power, efficiency in buildings and 
industry, and technology deployment comprise EERE's portfolio 
and multi-pronged approach to energy solutions. My written 
testimony, which I will submit for the record, includes a 
description of the priorities and specific funding requests in 
the EERE program areas.
    The achievement of EERE program goals could save consumers 
over $600 billion by the year 2030, and as much as $4 trillion 
by 2050 cumulatively. Similarly, we expect that the portfolio 
will avoid six gigatons of carbon by 2030 and nearly 50 
gigatons of carbon by 2050 cumulatively. With action plans, 
performance milestones, clearly articulated deliverables, and 
continued performance, EERE's budget request will strengthen 
our dynamic partnerships with private industry and academia 
that have grown our nation's economic well being. Our 
laboratory products and partnerships resulting in industry 
commercialization are at unprecedented levels and will bring 
clean energy technologies and sources to large-scale commercial 
viability in the very near future.
    This concludes my prepared statement, and I am happy, of 
course, to answer any questions the committee members may have.
    [Statement of Alexander Karsner:]

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    Mr. Visclosky. Thank you very much.
    Mr. Slutz.

Mr. James Slutz, Acting Principle Deputy Assistant Secretary for Fossil 
                                 Energy

    Mr. Slutz. Thank you.
    Mr. Visclosky. [OFF MIKE]
    Mr. Slutz. I served as the deputy assistant secretary for 
oil and natural gas since June of 2002, and then I moved in 
managing the Office of Fossil Energy in late October of last 
year, early November.
    Mr. Visclosky. [OFF MIKE] [Laughter.]
    Mr. Slutz. Mr. Chairman, members of the subcommittee, it is 
a pleasure for me to appear before you today to present the 
Office of Fossil Energy's proposed budget for fiscal year 2009. 
FE's budget request of $1.127 billion for fiscal year 2009 is 
one of the largest fossil energy requests made by this 
administration. These funds will allow FE to fulfill its 
mission to create public benefits by enhancing U.S. economic, 
environmental and energy security.
    Achieving this mission means developing technological 
capabilities that can dramatically reduce carbon emissions to 
achieve near-zero atmospheric emission power production, 
thereby meeting the president's priority of expanding our 
climate change options with high-efficiency power plants to 
reduce carbon dioxide emissions, and the near-zero emission 
power plant known as FutureGen that will link coal generation 
with carbon sequestration.
    FE is also responsible for the management and operation of 
the nation's petroleum reserves, most notably the strategic 
petroleum reserve, which provides strategic and energy security 
against disruptions in oil supplies with an emergency stockpile 
of crude oil. More specifically, the proposed fiscal year 2009 
coal budget request of $648 million focuses on technology 
allowing the United States to maintain its technological lead 
in coal use in a way that will not raise climate concerns. This 
is the largest budget request for coal research, development 
and demonstration in over 25 years.
    The budget includes $406 million for coal R&D, including 
in-house research and development, $85 million for the clean 
coal power initiative, and $156 million for the new approach to 
the FutureGen program. The fiscal year 2009 request 
demonstrates the administration's continuing commitment to 
domestically produced energy from coal.
    The $344 million fiscal year 2009 budget request for the 
strategic petroleum reserve, an $84 million increase over 
fiscal year 2008 approved funding, will allow for expansion 
activities at two existing storage sites and the development of 
a new site in fiscal year 2009. This expansion is in accordance 
with the provision in EPACT for an expansion of reserve 
capacity from 727 million to 1 billion barrels of oil, and with 
the president's recommendation and pending legislation to 
further increase the reserve's capacity to 1.5 billion barrels 
of oil.
    Fossil energy research and development is directed at 
electric power generation from coal, our most abundant and 
lowest-cost domestic fossil fuel. This research supports many 
presidential initiatives and priorities, including the coal 
research initiative, hydrogen fuel initiative, climate change 
technology program, and FutureGen. I will highlight a few of 
the R&D program components, beginning with FutureGen.
    FutureGen promotes advanced, full-scale integration of 
integrated gasification combined cycle, or IGCC, and carbon 
capture and storage, or CCS; and technology to produce electric 
power from coal with near-zero atmospheric emissions. FutureGen 
is being restructured in a way that accelerates the commercial 
integration of CCS technologies and IGCC.
    The new approach proposed multiple commercial-scale 
demonstration power plants in place of the originally planned 
single research and development facility. Each plant would 
produce electricity and sequester an estimated annual 1 million 
metric tons of carbon dioxide. FutureGen receives an $81.7 
million increase in funding over last year in the fiscal year 
2009 budget proposal.
    The clean coal power initiative, or CCPI, is a cooperative 
cost-share program between the government and industry to 
demonstrate advanced coal-based power generation technologies. 
The budget request of $85 million for CCPI in fiscal year 2009 
will complete the third round of project solicitations, 
proposal evaluations, and project selection of advanced 
technology systems.
    The fiscal year 2009 budget request of $149 million for 
carbon sequestration--one of the key components of our 
program--is a significant increase over the nearly $119 million 
for fiscal year 2008. The increase should help develop 
economical ways to separate and permanently sequester 
greenhouse gas emissions from the combustion of fossil fuels.
    Consistent with recent budget requests, the petroleum and 
oil technology and natural gas technology research and 
development programs are proposed for termination in fiscal 
year 2009. The fiscal year 2009 budget request of $344 million 
for the strategic petroleum reserve includes $158 million for 
preparations to reach the 1 billion barrel storage capacity and 
increase draw-down capability from 4.4 million barrels a day to 
more than 6 million barrels a day, as mandated by EPACT. We are 
also requesting $13.5 million, which is aimed at the expansion 
above that to the 1.5 billion goal.
    That concludes a very brief overview of fossil energy's 
wide-ranging R&D and petroleum reserve management 
responsibilities. I would like to emphasize that by 
reevaluating, refining and refocusing our programs and funding 
the most cost-effective and beneficial projects, the fiscal 
year 2009 budget submission meets the nation's critical need 
for energy, environmental and national security.
    Mr. Chairman and members of the subcommittee, I would be 
happy to answer any questions.
    [Statement of James Slutz:]

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    Mr. Visclosky. Thank you very much.
    Mr. Kolevar.

                    Mr. Kolevar's Opening Statement

    Mr. Kolevar. Mr. Chairman, Ranking Member Hobson, and 
members of the committee, thank you for the opportunity to 
testify on the president's fiscal year 2009 budget request for 
the Office of Electricity Delivery and Energy Reliability.
    Our office's mission 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 2009 budget requests $134 million for OE, a 
17 percent increase from the fiscal year 2008 request. This 
includes $100.2 million for research and development 
activities, $14.1 million for operations and analysis 
activities, and $19.7 million for program direction.
    Today, the availability of and access to electricity is 
something that can be easy to take for granted. While more than 
a few people cannot describe what it is or where it comes from, 
electricity 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 consumption will be almost 25 
percent higher than it was in 2009. This indicates a growing 
economy, but it also promises a significant amount of new 
demand on the electricity infrastructure, an infrastructure 
that is already stressed and aging. This means that we need to 
focus our attention on reliability.
    Climate change is also affecting electric industry 
investments. Uncertainty on climate change legislation and 
policy is limiting investment in generation from fossil fuels--
coal in particular--and is stimulating investment in renewables 
such as wind. However, intermittent resources such as 
renewables require energy storage or other balancing 
technologies, advanced communications, and sophisticated 
modeling to maximize penetration without affecting the 
reliability and efficiency of our electric system.
    OE's 2009 budget request reflects a commitment to ensuring 
this reliability by supporting the research of breakthrough 
technologies such as those associated with the Smart Grid and 
Energy Storage. With $5 million dedicated solely to Smart Grid 
development, a $6.6 million increase in the 2009 request for 
energy storage, and more than $88 million dedicated to other 
R&D work, the president's budget request reaffirms the effort 
to ensure increased reliability through research and 
development.
    Modernizing the grid through technical innovation, however, 
represents just one side of the effort needed to tackle 
electricity reliability problems. Building the elaborate 
network of wires and other facilities needed to deliver energy 
to consumers reliably and safely is perhaps one of our greatest 
challenges today. This is especially true since renewable 
energy promises to become a substantial generation source. 
Since sources of renewable energy are often found in remote 
locations, we simply have to develop the capacity to deliver it 
to load centers. Basically, if we want to use more renewable 
energy, we need more wires.
    Accordingly, in 2009 this office will continue work to 
implement the major electricity infrastructure provisions of 
the Energy Policy Act of 2005. Consistent with the law, we will 
produce the second national transmission congestion study by 
August of next year. We will begin scoping for the designation 
of energy transport corridors in the eastern states, and we 
will implement the department's responsibilities to coordinate 
federal authorization for the siting of transmission 
facilities.
    However, energy security and reliability will not be solved 
solely through the modernization and expansion of our energy 
infrastructure. We also need to ensure energy delivery by 
keeping it secure and responding quickly when it is disrupted. 
In 2009, we will work to identify system-wide vulnerabilities 
and power and fuels at key domestic and select foreign energy 
facilities, and develop plans to secure and reconstitute those 
assets.
    Finally, we will help to develop tools and mitigation 
solutions to help energy sector owners and operators improve 
resiliency and implement best and effective practices and 
provide solutions to state and local governments to address 
energy supply and infrastructure challenges, and to exercise 
those response plans.
    Mr. Chairman, I believe OE's work is critical to our 
nation's energy future, and the increase in the president's 
budget request reflects this. 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.
    Mr. Chairman, this concludes my statement. I look forward 
to taking the committee's questions.
    [Mr. Kolevar's written statement follows:]

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    Mr. Visclosky. Gentlemen, thank you very much.
    I am going to recognize Mr. Hobson in just 1 second. But 
for the record, I would point out that Mr. Slutz is on one end 
of the table and Mr. Kolevar is on the other. I don't know if 
body language means anything, but I recognize from your resumes 
that Mr. Slutz is an Ohio State graduate.
    Mr. Slutz. I am.
    Mr. Visclosky. Which makes Mr. Hobson pleased. And Mr. 
Kolevar is a Michigan graduate. I just want to make note that 
they did not sit next to each other during your testimony. 
[Laughter.]
    At the beginning, I also want to acknowledge that we 
received a very nice gift from Mr. Simpson when he came in and 
that is a Boise State University pen, because he wanted me to 
have at least one pen from a winning football program. 
[Laughter.]
    Mr. Hobson. And I asked him if they were accredited yet. 
[Laughter.]
    Mr. Visclosky. I will now recognize Mr. Hobson.

                        CONGRESSIONAL DIRECTION

    Mr. Hobson. Mr. Karsner, when the secretary testified 
before this subcommittee last week, we confronted him on the 
department's failure to follow congressional direction. You are 
now about to share that experience. Between the House report 
and the conference report accompanying the 2008 Omnibus, we 
provided over a dozen directives to your office. I won't 
embarrass you by asking you to identify each of those 
directives, but I do have a set of related questions.
    Do you view report language as binding on your office or 
merely advisory and something you can ignore at your 
discretion?
    Mr. Karsner. Well, congressman----
    Mr. Hobson. You can answer yes or no. I don't care.
    Mr. Karsner. It seems a legal question for general counsel. 
I will tell you my personal feeling is that the Congress makes 
the rules and we implement and enforce them. I don't know how 
to comment on the report language itself.
    Mr. Hobson. Do you believe you are complying 100 percent 
with the directive Congress has given your office?
    Mr. Karsner. That is our objective.
    Mr. Hobson. Please provide for the record a report 
identifying all the directives to your office contained in the 
separate House and Senate reports for 2008, as well as those 
contained in the explanatory statement accompanying the 
Consolidated Appropriations Act for 2008, and document the 
status of your compliance with those directives. I would like 
the same reports back from Mr. Kolevar's office and from Fossil 
Energy.
    Mr. Karsner. Yes, sir.
    [Insert for the record]

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    Mr. Hobson. Mr. Karsner, one of the specific directions 
given to your office was to take all remaining funding from the 
National Academy of Science phase III study on prospective 
benefits of DOE's applied energy R&D programs and use those 
remaining funds for the global energy assessment. How much 
funding remained from the phase III study as of the date of 
enactment of the 2008 Omnibus, and what is the status of 
transferring those funds to global energy assessment?
    Mr. Karsner. I apologize, sir. I don't have those facts on 
hand, but I will pursue them and report back to you for the 
record and brief you as well, if you would like.

                        Global Energy Assessment

    Currently, $497,000 remains from the Phase 3 study. EERE and EIA 
are working toward placing a task order with the Global Energy 
Assessment (GEA) Council through the Department's existing contract for 
services with the National Academies. The contract action requires a 
mutually agreed upon workplan from GEA, which must include specific 
goals, deliverables, schedules, and milestones to ensure effective and 
legal use of the taxpayer dollars. Members of my staff met with GEA 
Council Representatives in October 2007 and March 2008 to move this 
project forward.

    Mr. Hobson. I believe you will find that your office has 
not complied extremely well with this.
    For the EERE and OE and FE programs, please provide this 
subcommittee a detailed report documenting the execution status 
for all the earmarked projects contained in the explanatory 
statement accompanying the Consolidated Appropriations Act of 
fiscal year 2008. Because Under Secretary Albright is also 
responsible for the Office of Nuclear Energy, I would like him 
to make sure that we have the execution report for all nuclear 
energy earmarks as well. If you have not provided funding yet, 
identify the contacts made to date and when you anticipate 
providing the funding to the recipients.
    Now, this isn't a typical question for the record where 
your response is run through multiple layers at DOE 
headquarters, and at the infamous--I don't know what to call 
it--OMB dark energy, black box where things get in there and 
they never come back. It takes months to get back. I think 
those status reports on the 2008 earmarks could be delivered 
back to us not later than 1 week from today, because I don't 
think that is a very difficult thing to do.
    It is only a status report. OMB doesn't have to make 
decisions on what is a status or not a status, and DOE doesn't 
either. It is either there, done, or not done. So I would hope 
the chairman would encourage, and we would encourage all of you 
to be--if we have problems, this is a way that we can begin to 
fix them, and figure out where we all are. Do we all understand 
where we are? Does anybody have any problems?
    Mr. Albright. No, sir. And let me volunteer to take the 
lead to make sure that we can get you the information that we 
have.
    Mr. Hobson. I would like to suggest that I will recommend 
to the chairman that this will not be the last hearing if we 
don't get this stuff. You may be back again, which I am not 
sure you guys want to do. But this is important to the 
committee and the committee's work, so I hope people will 
respond accordingly.
    Thank you, Mr. Chairman.
    [Insert for the record]

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    Thank you all.
    Mr. Visclosky. Thank you, Mr. Hobson.
    Mr. Israel.
    Mr. Israel. Thank you, Mr. Chairman.

           MANUFACTURING TECHNOLOGY RESEARCH AND DEVELOPMENT

    Mr. Karsner, I want to ask you some questions about better 
manufacturing technology research and development. Mr. Hobson 
began in his opening statement by talking about some energy 
problems we have in Afghanistan that have military 
implications. There is another military implication we have to 
our own lack of coherence on energy policy, and that is that we 
have Striker combat vehicles on the ground in Afghanistan and 
Iraq that get five to seven miles per gallon, because we 
haven't advanced battery technologies and automotives 
technologies to the point where we can actually have military 
tactical vehicles in-theater that don't rely on our adversaries 
to sell us the fuel to propel those vehicles.
    At our hearing a few weeks ago, we heard from the director 
of transportation at Argonne National Laboratory. He suggested 
that we should think about making a very significant investment 
in battery manufacturing. He said that we are supreme in 
battery materials and chemistry, but we lack manufacturing and 
prototype capabilities.
    He also said that we haven't accomplished much if we are 
going to transfer our dependence on imported oil for an 
addiction to foreign batteries, because many other countries in 
the world have made quantum leaps on battery manufacturing 
research, development and prototype and manufacturing.
    So two questions. One is, why is there such a reluctance by 
U.S. companies to commit to U.S. domestic manufacturing of 
lithium ion batteries? That is number one. And number two, what 
can your office in DOE do to promote domestic manufacturing of 
advanced batteries?
    Mr. Karsner. Thank you, congressman. Let me say for the 
record that I agree in the entirety with the remarks of the 
gentleman from Argonne National Laboratory in that respect. The 
principal vehicle for commercialization that Congress has given 
us that is meant to be a very powerful tool going forward, 
cross-cutting the entire portfolio, is the Energy Policy Act 
Title 17 loan guarantee program, of which manufacturing 
facilities for commercialization of technologies like battery 
storage should be able to avail themselves.
    So that is to say, offering debt instrument guarantees up 
to 80 percent of a new project cost should help attract 
manufacturing in this sector to our shores. That statement 
could be true of anything, of solar panels, of wind turbines, 
or water heaters, but certainly of the high priority, as you 
heard from Assistant Secretary Kolevar, of the need for storage 
technologies, either in transportation or in generation.
    If we view these things as a strategic commodity in the way 
that we viewed integrated circuits and microchips in the 1990s, 
we will be able to salvage this industry for the United States. 
But it is unfortunately the case today that we do the heavy 
lifting of the advanced research and development, and these 
things get deployed, but they don't get deployed domestically. 
They get deployed among our competitors, and then we have 
intermittent tax policy to re-import them.
    Your question specifically is what could we do better to 
cultivate a better investment environment.
    Mr. Israel. Because the loan guarantee program doesn't 
appear to be working.
    Mr. Karsner. It is in the process of being stood up.
    Mr. Israel. Okay.
    Mr. Karsner. But when it manifests, it should serve that 
purpose.
    But number one, it won't be the loan guarantees alone that 
are sufficient. You will need a predictable policy environment 
and a predictable marketplace. That means that the battery 
suppliers are looking for reliable off-take purchasers of their 
products, and they are finding that either through government 
assistance or through industry, even in France, let alone in 
China, India, Japan, Korea and the other places where the 
industry is thriving.
    So we are trying to work closely with the vehicle 
manufacturers here who have their own balance sheet 
difficulties and challenges right now, to offer some assurance 
to battery sub-suppliers. To that end, we are making new 
relationships with the battery sub-suppliers, the Advanced 
Battery Consortium, to integrate them more closely into 
FreedomCAR for exactly that purpose.

                         LOAN GUARANTEE PROGRAM

    Mr. Israel. When will the loan guarantee program actually 
be stood up?
    Mr. Karsner. Of course, the loan guarantee program is not 
managed in my office.
    Mr. Israel. Where is it managed?
    Mr. Karsner. But all of us contribute to what we believe 
would be the appropriate available technologies to----
    Mr. Israel. So forgive my ignorance, but maybe Secretary 
Albright can answer. Who has responsibility, where is the 
accountability for the loan guarantee program? Who is standing 
it up and when is it going to be stood up?
    Mr. Albright. It is in the process of being stood up. 
Currently, the initial solicitation received over 100 requests 
for loans. We have narrowed it down to 16 possible loans and 
are in the process of winnowing those to determine which will 
receive the loan guarantees. We are also in the process of 
hiring a very capable and competent staff, with extensive 
background in finance. We have not finalized the schedule, but 
we are working on the schedule for announcing solicitations 
throughout this year.
    Mr. Israel. Can you provide the subcommittee with a more 
precise timetable? Give us a little more precise sense of when 
we can expect to go from being stood up to stood up?

             Timeline for the Loan Guarantee Program Office

    With respect to the Loan Guarantee Program Office (LGPO), 
significant progress has been made over this past year. A year ago this 
week, two very experienced individuals were detailed from the U.S. 
Treasury Department to help lead the effort of evaluating a total of 
143 pre-applicants seeking an invitation to submit full applications 
for loan guarantees. The 143 pre-applicants resulted from the initial 
solicitation of the program which officially closed on December 31, 
2006. Supported by contractors over the course of last summer, the pre-
applicants underwent a rigorous technical and financial review in 
accordance with criteria set forth from the LGPO Credit Review Board 
(CRB), the governing board of the program. On August 3, 2007, David G. 
Frantz was named to serve as the Director of the Department of Energy's 
(DOE) Loan Guarantee program. Mr. Frantz reports directly to DOE's 
Chief Financial Officer.
    The final regulations for the Loan Guarantee Program were issued on 
October 4, 2007 along with the selection of 16 pre-applicants from the 
first solicitation in 2006 to be invited to submit a full application. 
Since then, a remarkable amount of work has been accomplished. The 
staff has grown from one permanent employee to nine permanent 
employees, including investment officers with 10 to 20 years of 
worldwide project financing experience, predominantly in the heavy 
infrastructure, utility, and energy sectors as well as significant 
experience working in the U.S. government in conformity with the 
requirements of the Federal Credit Reform Act of 1990 (FCRA). The LGPO 
has also recruited additional highly qualified staff, is in the process 
of finalizing a credit subsidy model, as required by FCRA, and has 
instituted comprehensive policies and procedures to initiate the 
application and due diligence process. The LGPO is in the process of 
preparing to receive its first applications from the 16 selectees in 
early April 2008. The LGPO is also working with the Office of Finance 
and Accounting and the Office of Corporate Information Systems to 
develop accounting and processing systems that will allow the office to 
monitor and manage the loans for which guarantees are issued over the 
life of the projects. Although no due date has been set for application 
submission, in the next few weeks, the LGPO expects to receive its 
first application submission from one of the 16 pre-applicants and to 
begin the due diligence necessary to assess the technical and financial 
soundness of the project in order to issue a loan guarantee. 
Simultaneously, the office is moving forward with its next solicitation 
by preparing a draft solicitation implementation plan to be submitted 
to Congress sometime during the month of April.

    Mr. Albright. I can. As soon as we have something more 
definitive from the board, I will be happy to give you that. I 
don't want to misstate when we will announce, but I can----
    Mr. Israel. Something more final from the board?
    Mr. Albright. Yes, we have a board of directors that 
manages the loan guarantee program. We are currently trying to 
determine when we realistically can put solicitations out and 
in what areas. That has not been finalized.

                           VEHICLE TECHNOLOGY

    Mr. Israel. Okay. My understanding is that Toyota actually 
has Panasonic making their batteries. Have you heard that? Is 
that accurate?
    Mr. Karsner. That is correct. I will be visiting, in fact, 
those companies this week in Japan. I am hoping to get greater 
collaboration. We generally have been siloed in our competitive 
posture with the Japanese for almost 20 years. Together, the 
two countries are about 80 percent of global energy R&D, so we 
are looking to see if we can have a more collaborative 
relationship.
    Mr. Israel. Just one final question, if I have the time.
    Mr. Visclosky. Before you do, I just want to follow up on 
that. It just seems as though this is a broken record. We had 
an oversight hearing a year ago about energy policy. It was 
noted that a lot of the investment that taxpayers have made 
through the Department of Energy on vehicle technology were 
used by domestic auto companies to put more horsepower in the 
cars, but not more mileage. And now that Toyota, who apparently 
has their own battery supply, is as large as GM, and GM is 
under financial duress.
    What assurance do we have--you know, before it was high 
performance versus mileage. Now, the Japanese figured out, hey, 
you have to have a battery supply; we are looking around and we 
are looking at a federal loan program. What assurance do we 
have that the monies Congress is going to appropriate to you, 
that the auto companies are going to use for their intended 
purpose and use them wisely? It just seems like for a 
generation, it is just a broken record.
    Mr. Israel. Mr. Chairman, that was my last question.
    Mr. Visclosky. Oh, I am sorry. [Laughter.]
    Mr. Karsner. It is probably better suited to either the 
CEOs or a specialist at business schools, but you can't 
ultimately protect business leaders from themselves. Some will 
win and some will fail.
    Mr. Visclosky. But the taxpayers--why spend the money if 
they are not going to use it?
    Mr. Karsner. I am hopeful that the new Energy Independence 
and Security Act and the movement of the CAFE standards for the 
first time since CAFE was implemented will force that 
discussion out and deliver the technologies more readily, 
because frankly it is a compliance issue at this juncture.
    Mr. Visclosky. I apologize. I thought you were moving on.
    Mr. Israel. Thank you for asking----
    Mr. Visclosky. Okay.
    Mr. Wamp.

                           ENERGY EFFICIENCY

    Mr. Wamp. Thank you, Mr. Chairman.
    We get into a lot of process discussions here, and I want 
to kind of leap out of even the budget request and talk on a 
more macro level. Last week throughout the Tennessee Valley 
Authority region, TVA's board rightly held a series of hearings 
on ways that consumers can reduce their cost on energy. I would 
like to know, as the cosponsor of the House resolution, and 
resolutions don't mean much, but Brian Baird and I co-authored 
a House resolution that encouraged taxpayers when they receive 
their rebate from the stimulus package that they would invest 
those rebate dollars into efficient and effective ways to save 
energy, from weatherization to just new energy technologies, a 
host of things.
    I just want to know, Mr. Secretary, outside of the 
bureaucracy and the running of the budgets and the spending 
money here and there, what is the Department of Energy doing to 
try to bring consumers to a better place on fuel, on 
electricity utilization--across the board? Because I think that 
just the money and the programs and the spending is not enough. 
That is the frustration that we all have, every one of us here, 
at this pain that we are in right now on energy costs and what 
to do about it. It is the topic du jour when I am at home.
    I think it is very encouraging to see a major utility like 
TVA actually talking to their customers about ways to improve 
the bottom line, and things that you can invest in. We signed 
onto this resolution because if people are going to have, you 
know, $300 to $1,800 more in their pockets here in 8 weeks--
well, first I would like them to pay down debt, but that 
doesn't really help the economy. Investing in new energy 
investments does help the economy and it helps them, and it 
helps our country in terms of independence. It is a freedom 
issue. What is DOE doing there, outside of your offices in 
Washington, D.C.?
    Mr. Albright. Is that to me?
    Mr. Wamp. Yes, sir, Mr. Secretary.
    Mr. Albright. We have on our website an efficiency section 
to suggest things that can be done. We also suggest that 
utilities and others help educate the public. I think your 
point is a very good one because we know that on energy 
efficiency matters in the home--insulation, caulking, CFLs, 
fluorescent light bulbs and other means of conserving and being 
more efficient in energy use--you have about a $2.50 return for 
every $1 you spend.
    So not only would this money go into the economy and help 
the economy and purchase products, but the $300 to $800 that 
the consumers are going to receive would get a one-and-a-half 
times return on the money they spend. So it would be good all 
the way around.
    I think our job is to help educate the public better, as 
TVA is doing. A lot of utility companies have free energy 
audits that they are willing to do, certainly for businesses, 
and I think some will do for homes as well--help analyze them.
    Mr. Wamp. I will jump over to Andy, then. In your advocacy 
to utilities, are there ever utilities--have you called a 
meeting? Have you encouraged them all to do this kind of thing?
    And then on fuel with consumers, at what point is the 
administration going to say, yes, we do have a big problem and 
one of the solutions is that consumers look at ways to conserve 
and save.
    Mr. Karsner. Thank you, congressman. And thank you for your 
leadership in the realm of efficiency in general and all you do 
every day when we are not even having hearings.
    I think you have got it right in the sense that the federal 
government sitting up here cannot reach every consumer and 
motivate the end and the outcome we see either 
macroeconomically or even at the home level. So the question 
is, what will we do at the point of sale? And who are the 
parties of the relationship at the point of sale?
    Kevin and I, our two offices, the Office of Electricity 
that has primary responsibility for utilities, and us with 
efficiency, have worked together with EPA and put under the 
same tent for the first time all the utilities in this 
country--public and private--all the public regulators at the 
state level who actually have the jurisdictional responsibility 
for those utilities, and formed a national action plan for 
energy efficiency with principles that would prioritize 
efficiency.
    And for the first time, instead of saying it is just good, 
it is virtuous, we should educate you on it, we are quantifying 
it and trying to come up with schemes to profit and motivate 
the sector to win from it. So we think the more utilities that 
can be incentivized to profit from quantifying efficiency gain 
as a resource, the more we would penetrate and be able to use 
those tax credits that the consumers will have it in their 
face, with advertising and education at the point of sale, and 
say I want to buy these things.
    Now, we also do the standard things and have expanded more 
than ever before--modernization and expansion of ENERGY STAR 
for the first time since the program came over to DOE, availing 
more products, water heaters for the first time being listed, 
moving on to LED lighting, et cetera. So we are putting out a 
lot more choice, a lot more availability. We are in the 
consumer's face as never before with the choices, but we need 
the people locally to be able to profit and motivate and build 
their businesses around gaining efficiency from that.

               COORDINATION OF EERE AND SCIENCE PROGRAMS

    Mr. Wamp. One other question for you, Andy. Dr. Orbach 
comes in here the day after tomorrow, and through the Office of 
Science we have requests for bio-energy investments and you 
have the bio-hydrogen program, the bio-refinery, biomass, bio-
ethanol, these research centers. How does the Office of Science 
and your office coordinate these programs? And how are they 
complementary with each other? And how do you make sure that we 
are not duplicative in these budget requests?
    Mr. Karsner. That is a great question. It is particularly 
poignant coming from Tennessee where Oak Ridge has a big 
applied science responsibility on cellulosic bio-refining, and 
is also one of the Bioenergy Research Centers.
    Mr. Wamp. Yes, sir.
    Mr. Karsner. Generally, Ray and I talk about the pipeline 
between us, basic and applied science, having a weld and trying 
to make that weld seamless and frictionless in terms of the 
through-put. Bearing that in mind, we have a responsibility 
under a timeframe and a stretch goal and now a legal mandate to 
reduce and displace 15 percent of our gasoline supply through 
alternative sources within a decade. That is going to take some 
redundancy in effort, some parallel paths. There is not going 
to be a single path that will be the best, given that time 
compression.
    So we are going to make investments right now in scaling 
cellulosic facilities that enable process integration in the 
marketplace. Right now, today, we are breaking ground on them 
and testing them to come down the cost curve, because we don't 
know what the price point for gasoline will be over the course 
of that decade. Ray is working on longer-term advanced 
genomics, how to break down lignocellulosic walls.
    And if the basic science laps the current state of applied 
science, that is okay. Great. We have made a good investment in 
those things.
    Mr. Wamp. Thank you, Andy.
    Thank you, Mr. Chairman.
    Mr. Visclosky. I am going to recognize Mr. Olver in a 
second.
    If I could follow up on Mr. Wamp's line of questions as far 
as people talking to each other.

                                 DARPA

    Mr. Karsner, the Defense Advanced Research Projects Agency, 
DARPA, posted a broad agency announcement last November for the 
production of biofuels from cellulosic and algae feedstocks. 
This is intended to find a surrogate for petroleum-based 
military jet fuel. I believe in his opening remarks, Mr. Hobson 
alluded to that. As I understand it, current commercial 
processes for producing biodiesel yield a fuel that is 
unsuitable for military applications which require higher 
energy intensity.
    Is DOE aware of this research sponsored by DARPA? Are you 
cooperating with them?
    Mr. Karsner. The answer to both of those questions is yes, 
sir, we are.
    Mr. Visclosky. How are you cooperating with them?
    Mr. Karsner. As you noted, they are working very 
specifically towards their fuel needs. They are the largest 
consumer of fuel in the world, and primarily on distillates and 
JP-8. So they are looking at lipid-based fuels akin to 
biodiesels. Predominantly, our program is based on alcohol-
based fuels for lightweight vehicles in the transportation 
sector. Where we have a nexus is working with them on codes and 
standards and acceptability to remove the barriers of those 
lipid-based fuels.
    This is an area where we wouldn't want redundancy in 
program, but constant communication and comparative notes. They 
have a metric to get under $3 for JP-8 and distillates. Our 
goal is to use some of their work and get it into the 
dieselization of vehicle manufacturing. So we are working with 
ASTM and other standards organizations to ensure higher blend 
rates and removal of barriers of the fuels that they----
    Mr. Visclosky. Have there been any positive results because 
of that communication and cooperation to date that you could 
supply for the record so we could say, okay, you have been 
talking to each other? Do you have something to show for it?
    Mr. Karsner. Yes. I would like to report back to you for 
the record on that. I think we would be able to demonstrate 
some movement and progress on the codes and standards and 
things that are enabling pathways for those fuels to arrive.

                             DARPA Results

    The Department of Energy is working cooperatively with the 
Department of Defense (DOD) on biofuels development. The Biomass 
Research and Development Board, co-chaired by DOE and the U.S. 
Department of Agriculture, coordinates federal activities to promote 
use of biobased fuels and products. DOD is also a member of the Board. 
The Defense Advanced Research Projects Agency (DARPA) participated in 
biweekly meetings of the Biomass Conversion Interagency Working Group 
that reports to the Board. The Working Group is managing the 
development of a comprehensive, integrated federal research, 
development and demonstration biofuels conversion plan with a target 
delivery by October 2008.
    DARPA focuses on developing JP8, military jet fuel, from cellulosic 
or algal feedstocks, with a goal of demonstrating scaleable and 
commercially viable processes at affordable costs (less than $3 per 
gallon). DOE is collaborating with DARPA and the American Society for 
Testing and Materials International in technical committees to develop 
standards for fuels, including JP8, which will enable targeted 
development activities and ensure fungibility of alternative fuel based 
JP8 formulations. DOE is also documenting material properties on 
thermochemically derived fuels from biomass feedstocks that can be used 
as a replacement for distillates and JP8 fuels. These alternative 
fuels, such as Fisher Tropsch liquids, will be produced from DOE 
validation programs in sufficient quantities that can be evaluated for 
a DOD application. DOE-funded National Laboratories such as Pacific 
Northwest National Laboratory and the National Renewable Energy 
Laboratory, together with private industry partners, have also 
submitted proposals to a DARPA broad agency announcement, BAA08-07, to 
develop JP8 from agricultural or aqua-cultural feedstocks.

    Mr. Visclosky. Okay. I appreciate the fact that there is 
communication. I would like to see some discernible positive 
results of some of that, too.
    Mr. Karsner. Absolutely.
    Mr. Visclosky. Mr. Olver?
    Mr. Olver. Thank you very much, Mr. Chairman.
    I would like to address a few questions to Mr. Karsner.

                      EERE FY 2009 BUDGET REQUEST

    I notice that the budget for energy efficiency and 
renewable energy is down for the 2009 request by $467 million 
under the 2008 enacted number. But I also notice that is 
actually up by roughly $19 million or something like that over 
the request for 2008. Now, I have been trying to figure out 
what has been happening here.
    You have had the budget since December 24, when I guess it 
was signed, so it is now 2\1/2\ months after that. Let me just 
understand. I am trying to sort out what this budget is made 
of. It looks to me that several of the accounts that are 
basically internal to the department and its operations. Those 
look like the program support, the program direction, the 
facilities and infrastructure, and the federal energy 
management program. Would that be roughly correct?
    The other programs are from hydrogen technology down 
through building technologies and industrial technologies. I am 
reading down this list of items, plus weatherization, would be 
money that goes out in contracts and grants and contracts and 
R&D contracts to be done by contractors. Would that be roughly 
correct?
    Mr. Karsner. Roughly correct. Roughly correct. I wouldn't 
say there is a firm wall, for example, for the Federal Energy 
Management Program. It has a lot of contractors and stimulants 
on the efficiency side. But I think your generalizations are 
roughly correct.

                        FY 2008 OBLIGATED FUNDS

    Mr. Olver. Well, if that is the case, for instance since we 
are out now 2\1/2\ months, I am wondering what amount of those 
contracted monies are out? How much of that is obligated? What 
is the rate of obligation? And do you expect to obligate? Could 
you show us, for instance, what the obligation rate at this 
point is and what you intend to obligate before the end of the 
year?
    Mr. Karsner. Yes, sir. I do think we could report back to 
you on that.
    Mr. Olver. You think you could report back. All right.

                            Obligated Funds

    Approximately $917.2 million has been obligated as of May 2008 for 
Energy Efficiency and Renewable Energy (EERE) Programs. EERE's current 
rate of obligation is $114.7 million (12.5 percent) per month. EERE has 
obligated 53.3 percent of the approximately $1.72 billion in total FY 
2008 appropriated funds. As EERE historically has higher monthly 
obligations in the last months of the fiscal year, EERE anticipates 
obligating the remaining FY 2008 funds before September 30, 2008.

                        FACILITY INFRASTRUCTURE

    For instance, in facilities and infrastructure, let me ask 
a little bit more specifically. That is one where the 2008 
allowance, the 2008 enacted number, is up by almost $70 million 
over the request, which was $7 million. And you are going back 
to a request of about $14 million. How much of that has gone 
out? Do you have any sense of what the intent is on that, since 
there were clear intents on the part of Congress in coming up 
with that appropriation?
    Mr. Karsner. And we are fulfilling that intent very 
specifically, that is, new facility infrastructure at our 
applied lab, the National Renewable Energy Lab in Golden, 
Colorado, and very specifically that it is going to a systems 
integration facility. So because the appropriations actually 
arrived in January, the mark in December, as you noted, I 
believe that is in the early stages of soliciting design, et 
cetera. But that speaks for that amount of money. It has begun 
to catalyze in process.
    But to answer your question much more specifically as to 
the milestones and metrics at which it will be dispersed, I 
would have to report back to you.

                  New Facility Infrastructure at NREL

    Approximately $69.3 million in FY 2008 funding for NREL equipment 
and construction is expected to be obligated by June 2008.
    The intent of Congress is that $54.5 million is to be used for the 
1) Energy Systems Integration Facility (ESIF); 2) approximately $7.9 
million is to be used for equipment in the Science and Technology 
Facility (S&TF) and the Solar Energy Research Facility (SERF); and 3) 
approximately $6.8 million is to be used for the South Table Mountain 
Site Infrastructure project. All funds will be obligated by June 2008.
    The milestones and metrics for funds to be dispersed for the ESIF 
($54.5 million in FY 2008) are scheduled as: request for proposal July 
2008; award design November 2008; award construction May 2009; award 
equipment November 2009; construction complete March 2010; and 
equipment complete December 2011.
    The milestones and metrics for funds to be dispersed for the 
equipment for the S&TF and SERF (approximately $7.9 million in FY 2008) 
are scheduled as: request for proposal August 2008; award design 
December 2008; award equipment purchase contract August 2009; and 
install equipment February 2010.
    The milestones and metrics for funds to be dispersed for the South 
Table Mountain Site Infrastructure project (approximately $6.8 million 
in FY 2008) are scheduled as follows: request for proposal July 2008; 
award design December 2008; award construction June 2009; and 
construction complete September 2010.

    Mr. Olver. Okay. But generally, you are saying you are 
actually going to fulfill that?
    Mr. Karsner. Absolutely.

                             WEATHERIZATION

    Mr. Olver. Let me follow, then, on weatherization. For 
instance, the request in 2008 was $204 million. The 
appropriation on our part for the 2008 fiscal year was $282 
million, a $78 million increase. But your request for 2009 has 
now been dropped to $58 million, which is a drop of $223 
million below the enacted number for 2008.
    I am curious. I am now zeroing in. I gave you the general 
question first as to what was going to be going out. I am 
zeroing in on that one. Are you intending to actually get those 
$282 million out by the end of this year?
    Mr. Karsner. Yes sir.
    Mr. Olver. You are?
    Mr. Karsner. Absolutely.
    Mr. Olver. And then you basically, the program goes over 
the cliff. It has been there as a request in 2008 of $204 
million. You are dropping that request to $58 million. That is 
an enormous drop in request for a program which has been up 
there year after year, and certainly saves a lot of people a 
lot of money. People who are low-income folk and can use that 
weatherization to help them with their budgets. That is a major 
negative, the major negative in the difference between your two 
budgets in 2008 and your request for 2009.
    Mr. Karsner. That is correct.
    Mr. Olver. What do you have to say for that policy of 
essentially dropping weatherization off the cliff?
    Mr. Karsner. What do I have to say for it? What I would say 
for it is that weatherization assistance, income-related 
assistance for people below the poverty line is a good and 
worthwhile objective for a great and generous nation. So it is 
not a question of whether you do it, but how you do it, how 
effectively you do it, where it belongs in the budget, and how 
effectively you are achieving your objectives.
    After almost 3 decades, we have weatherized about 5.5 
million homes, out of the 27 million annually eligible. It is 
clear that those lines are not going to dynamically move based 
on the status quo pursuit of weatherization where it is lodged, 
competing on rate of return inside the nation's energy R&D 
applied science portfolio that is committed at a mission level 
to reducing climate change emissions within a decade, and to 
energy security.
    It is a very awkward place for an income-assistance 
program, and year after year this discussion takes place 
because on the metrics of rate of return, it cannot compete 
with the rate of return of all the other things that Congress 
has us investing in.

                          HYDROGEN TECHNOLOGY

    Mr. Olver. However, it is true that the request on the part 
of the administration the previous year was over $200 million. 
So it is a very great unitary change in policy between 2008 and 
2009. That is what I was trying to focus upon, even though we 
added more money.
    Again, I think my time is up. Well, okay. I think I will go 
on to one other one.
    The one other one that I wanted to raise was the hydrogen 
technology program. You are dropping that one off a cliff. I 
really want to know, not quite as high a cliff as the 
weatherization, but you have dropped that one by $64 million 
below the enacted from last year. And the enacted from last 
year is only a couple million apart from what your request was 
last year. So it is not a policy difference that we have been 
trying to impose, as certainly is true with the facilities and 
infrastructure and the weatherization program.
    But what are you dropping out of the hydrogen? Can you 
describe for me what is being left out that you have been doing 
in 2008 and before?
    Mr. Karsner. Yes, sir. The optics are a little bit 
deceiving in hydrogen when you talk about $64 million, because 
actually it is roughly half that amount that the hydrogen 
budget is going down.
    Mr. Olver. Where is the rest of it hidden?
    Mr. Karsner. The rest of it is moving over to the Vehicle 
Technologies Program, because it deals with things like 
education, codes and standards, learning demonstration, that 
really cross all vehicle platforms. In other words, we don't 
want education to be only about hydrogen. We want it to be 
about all alternative fuel sources.
    Mr. Olver. Okay.
    Mr. Karsner. So that rightfully moves over and leaves the 
hydrogen program with an exclusive focus on research and 
development for hydrogen fuel cells, to move down the cost 
curve more rapidly. What we have done this year in readjusting 
the hydrogen portfolio is to eliminate our investment in 
production and delivery R&D, which is funded elsewhere across 
the department, particularly in the Office of Basic Science, 
where they are moving to have direct sunlight conversion to 
hydrogen, microbial and bio-conversion to hydrogen. There is a 
nuclear-to-hydrogen conversion program.
    We used extra money to amplify those areas on the hydrogen 
posture plan critical path, namely focus on the PEM-fuel cells, 
bringing the cost point closer to our target of $30 per 
kilowatt, and the more intractable program we have had with 
hydrogen storage, which is the key impediment to being able to 
get to a fuller transportation economy.
    So those two areas went up, and hydrogen production and 
delivery, at least in my portfolio, but not elsewhere across 
the department, went down, largely because the question of 
renewable sources converting to hydrogen is substantially a 
commercial one, one that we think should be pursued through the 
loan guarantees. We have worked on electrolysis. There is not a 
major mystery to it. We do it at NREL every day.
    So converting from existing renewable sources through 
electrolysis is something that we want to see more robustly in 
the commercialization camp, and we want to see the other 
focuses on production more in the basic and other programs.
    Mr. Olver. I would suggest that what we are talking about 
ties into what Mr. Israel was saying earlier about battery 
technology. The storage issue is one where if we had a really 
good battery system that served within the vehicular use of 
hydrogen, then we would have made an enormous advance. I am not 
sure that we are going to make that, but I would support his 
comments about what are we doing and are we doing enough about 
R&D in the battery technology field.
    Thank you very much.
    Mr. Visclosky. Thank you.
    Mrs. Emerson.

                 RENEWABLE ALTERNATIVE ENERGY PROJECTS

    Mrs. Emerson. Thank you, Chairman.
    And welcome to you all. Thank you for being here.
    Let me just ask a question. We have the Department of 
Energy, the Department of Agriculture, Department of Interior, 
Department of Defense--how many other departments are actually 
working on renewable alternative energy projects?
    Mr. Karsner. I would be surprised if almost every agency in 
the government didn't have some sort of play on energy. It is 
so cross-cutting at this juncture.
    Mrs. Emerson. So do you all ever get together and talk to 
each other?
    Mr. Karsner. Yes, we do. In fact, I would say although we 
have a long way to go, that we have never had a more robust 
interagency process at a higher level. We are better in some 
areas than others. Biofuels and the things that feed into the 
Energy Independence and Security Act, that have been 
prioritized in the recent legislation, have caused us to get 
together not less than once monthly at the level of 
presidential appointees and higher for the Biomass R&D Board.
    That involves the National Science Foundation, Agriculture, 
Transportation, EPA, OMB, OSTP, et cetera. We would like to do 
the same thing for permitting renewable energy across federal 
lands, with siding permitting, grid integration issues, 
something we work on with Kevin. And we can get much better, 
but we recognize that problem of stovepiping and trying to 
overcome it.
    Mrs. Emerson. So are you all working at complementary 
purposes or cross-purposes in some areas? It seems to me that 
if we are going to spend the money that we are spending that 
everybody should be working in a complementary fashion so that 
we can actually leverage that money.
    Mr. Karsner. Congresswoman, I think you are right on. That 
has to be the driver of the agenda, that fundamentally how do 
we rationalize the core strengths and history of these 
institutions to put their best foot forward, without excessive 
redundancy, but parallel competitiveness where applicable.
    Mrs. Emerson. And do you not feel that that is happening at 
the moment, with the exception of perhaps that one area that 
you mentioned?
    Mr. Karsner. I chronically feel like it is something we can 
be better at, but I do think that there is enormous engagement 
at the moment. We just hosted the Washington International 
Renewable Energy Conference, involved the Department of 
Commerce from the standpoint of export and trade of renewables, 
and the Department of Agriculture actually took the lead with 
the Department of State on that. Obviously, the Department of 
Energy was indispensable. We presented to the world a very 
ecumenical approach to U.S. government equities in renewable 
energy that demonstrated exactly that concept.
    Mrs. Emerson. Except that once you have egos involved, 
everybody wants their little bit of turf. Sometimes that is 
okay, and sometimes it works to the disadvantage of the public. 
People are so intent on having their little piece, and they are 
not willing to give it up perhaps for the greater good, so that 
we are actually trying to be more efficient, and to move these 
technologies forward much faster than we are right now.
    So it is a little bit frustrating, particularly when you 
have your constituents quite rightfully so up in arms about the 
cost of gasoline. And when you live in a rural district like 
mine, quite frankly we are over $3, which is shocking, and 
people drive ordinarily 45 minutes to an hour to work every 
day. And that is on highways, so you know how much gas they are 
having to use on a weekly basis.
    I then got another batch of letters yesterday from some 
high school students, all of whom have part-time jobs. They 
have their own cars. They have to pay their own gas. And they 
are making minimum wage. Sure, they are living at home, but 
still it is very, very troublesome to me.
    So once a month is great, but hopefully we have a strategic 
plan in place among all of the agencies so that we are actually 
going toward the same goal, so to speak.
    Mr. Karsner. That is right. And we are producing a 
strategic plan that I think will be up in front of Congress 
shortly. But the bottom line that you are pointing to, the 
problem is that we have institutions and bureaucracies in this 
country that were set up to fight a Cold War, and we haven't 
adapted to 21st century challenges driven by energy, whether 
they are economic things that affect people at home, whether 
they are macroeconomic things like our global security.
    So we are fighting this challenge that we have, both 
environmentally and security and the pocketbook issues, through 
these pockets of government and good will. So it is going to 
take your kind of thinking to reform that.

                           FUTUREGEN PROJECT

    Mrs. Emerson. It is kind of back to basics--easy, common 
sense stuff for all of us. But I still worry about the turf 
issue.
    But thank you. I appreciate it. I know you all are working 
hard and doing your best, but it is just interesting. I have to 
go over to my ag subcommittee where we are talking about the 
same exact thing. I am going to ask them the same question, if 
we haven't finished that before I get there.
    Let me ask a question, if I could. I don't remember if it 
was you, Secretary Albright. In your testimony, you were 
talking about the need on climate change technologies, and we 
are spending a lot of money to try to reduce greenhouse gas 
emissions and capture carbon, et cetera, et cetera.
    So that brings me to the whole issue of the FutureGen 
project. I realize we had a discussion with Secretary Bodman 
about that. But I guess what I want to ask is, it seems to me--
and I know the chairman may have some more specific questions--
but it seems to me that if we are intent on trying to capture 
as much carbon or sequester as much carbon as possible, and the 
FutureGen project actually was at a 90 percent capture rate, so 
now we are just going to kind of throw that one away and we are 
going to do these other projects that may not be as advanced in 
the sequestration of carbon, at least the percentages might not 
be as great.
    And then we are delaying again because we are not going to 
finish that project out totally, and we are going to start all 
these other ones, so we are just postponing and postponing. I 
just don't get it.
    Mr. Albright. The administration remains committed to the 
goals of FutureGen and to FutureGen as a project and as a 
concept. The concept was and remains to generate electricity 
with coal at a significantly reduced carbon dioxide footprint. 
We remain committed to FutureGen.
    The project that we embarked on with the Alliance started 
out as a $950 million project. It had grown to $1.8 billion. 
Frankly, no one believed that that project could be built for 
$1.8 billion, and please remember it was a research project.

                         FUTUREGEN PROJECT COST

    Mrs. Emerson. Right. Have your costs at the Department of 
Energy also doubled?
    Mr. Albright. The costs--and I am not trying to point 
fingers here at all--the costs were due to costs that were 
beyond--I guess costs are always in someone's control--but they 
were market-driven costs. The cost of engineering went up. The 
cost of steel went up. The cost of everything----
    Mr. Visclosky. Why does everybody always blame the steel 
industry for the failures at the Department. I am serious about 
that. Every witness comes in here and claims----
    Mrs. Emerson. It is China who is buying all of the steel.
    Mr. Albright. Well, the cost of everything went up.
    Mr. Visclosky. Sorry to interrupt.
    Mrs. Emerson. That is fine, Peter.
    Mr. Albright. The cost of everything has gone up and it is 
just the cost of production, the cost of the various ores, 
whatever they may be, from steel to uranium. All prices went 
up.
    Mrs. Emerson. Okay, so the cost of the whole project has 
doubled. Has it also doubled your portion at the Department of 
Energy? Has that cost also doubled as well?
    Mr. Albright. The portion we were going to bear, yes. We 
were going to bear 74 percent of the cost on the taxpayers, 
with 26 percent being borne by the Alliance and its members. 
Again, we remain committed to the goal and we believed that the 
costs were going to certainly go above $2 billion to perhaps $3 
billion. This threatened to eat up a huge portion of our coal 
research budget.
    Once we recognized that and once we believed that coming 
back to Congress with a $3 billion to $4 billion project would 
cause its cancellation, not unlike some other projects that 
have been cancelled. We didn't want to see that. We sat down 
with the Alliance, starting in April of last year, to try and 
renegotiate this. We took our concerns to them, and frankly I 
think they understood and shared some of these concerns.
    We negotiated over the cost. We talked about technology and 
how could we change the project. Negotiations went back and 
forth, but we just weren't getting where we needed to go. I 
asked that we look at the market generally. The market had 
changed, and one of the things that got my attention was that 
when we started this program, nobody was building IGCC plants 
in the private sector.
    Now, we have had 30-some-odd IGCC plants discussed. I have 
forgotten how many, but at least five or six have sought 
permitting. Most have been turned down because they didn't have 
the carbon capture and sequestration element to the plants. One 
has just been approved in West Virginia this week or last week. 
I asked our group at one of our labs, ``Does this represent an 
opportunity? Can the private sector bear the cost of building 
the plant, and can we focus on the portion that is keeping the 
plants from being certified, and save money and focus on the 
technology that was necessary, that being the carbon capture 
and sequestration''?
    They came back and said, ``We believe we will do a number 
of things. One, we will save a lot of money for the taxpayers. 
We will focus on the cost component of this, which the private 
sector has been reluctant to bear. Plus, we will be able to put 
electricity onto the grid for actual operation, actual use, as 
opposed to in a more purely research environment.''
    We believe this is a better use of taxpayer money and we 
believe it is something that is sustainable, that can be 
replicated at other plants, and we hope will give us an 
opportunity to demonstrate this with different types of coal, 
different facilities, and multiple settings, as opposed to a 
single research center.
    Mrs. Emerson. It is just kind of peculiar because you said 
April, and I think our Illinois colleagues who talked to us 
about this all the time, said they didn't get notice until 
November because the costs really until that EIS statement was 
done or something in November.
    Mr. Albright. We did try to keep this in-house and discuss 
it among the partners. It was easy to run the numbers to see 
costs rising, but we did try to keep the negotiations at the 
table.

                              REPI PROGRAM

    Mrs. Emerson. Okay. I need to switch course. Thank you. I 
need to switch. I just have really a quick question, then I 
have to go over to ag. I am sorry, Mr. Chairman.
    It is a question with regard to REPI. In a rural district, 
I have so many different utilities, I can't even count them 
all. But we also have a lot of people who took advantage of the 
REPI program. I guess you eliminated it in this budget, the 
renewable energy production initiative. So I have a lot of 
folks who relied on some assistance there. It provided a lot of 
value for my guys. Why did you all zero that out? Was that an 
OMB thing because the cost-benefit ratio didn't pan out or 
something?
    Mr. Albright. I would be happy to stumble around and try 
and answer that. Andy can give you a better answer.
    Mrs. Emerson. Whoever wants to.
    Mr. Karsner. Maybe a better answer, but I don't think it 
will be more satisfying.
    Mrs. Emerson. Just tell me the real reason.
    Mr. Karsner. Well, the real truth of the REPI program is 
that it doesn't serve the purpose for which it is intended, 
which is to be an incentive to public power companies to 
produce renewable energy. It does not provide that incentive. 
It has been a small static amount, formulaically distributed 
across public power companies after the investment was already 
made.
    So it wasn't an incentive to make the investment. It is 
almost a retro-rebate. We are not adverse to the idea that 
public power ought to be incentivized, but that mechanism--very 
old, moving along the budget line as it has--does not serve 
that purpose.

                           ELECTRICITY RATES

    Mrs. Emerson. Okay. I understand. I appreciate that.
    Let me ask you a question, and this has to do with 
electricity rates. We have a small--well, it is actually not 
small--a company in Missouri, but it is not one of the big guys 
either--whose rates are, they have told their commercial 
customers that their rates are going up 74 percent since last 
year. And I find that shocking, and it certainly does not help 
economic development in little bitty communities that are 
served by this particular company.
    Two of the things that they cited as causes for this, which 
to me are hard to understand, one is because they have switched 
over and they are actually using some wind sources now, and 
also increased costs from the federal government for 
hydropower. I just want you to tell me whether or not they are 
just blowing smoke, or whether that is true.
    Mr. Karsner. I don't know the precise case. I would be 
happy to look into it. It sounds like blowing smoke to me.
    Mrs. Emerson. Yes.
    Mr. Karsner. In fact, both those sources would be cost 
stabilization sources.
    Mrs. Emerson. I would think so.
    Mr. Karsner. And both ultimately are less volatile and do 
not have a fuel through-put cost. So typically you see wind 
where it is newly installed under a long-term contract reducing 
cost as it is doing in Texas today and giving it a more 
predictable profile for the longer term. But we would be happy 
to look into that.
    Mrs. Emerson. I just appreciate your making that comment on 
the record for me to pass along when I have to deal with this 
next week.
    Mr. Karsner. Sure.
    Mrs. Emerson. Thank you.
    Mr. Karsner. Anytime.
    Mr. Visclosky. Mr. Calvert.
    Mr. Calvert. Thank you, Mr. Chairman.

                          CARBON SEQUESTRATION

    It seems to me, and I am new on this committee so I 
apologize when I ask questions that I would like to get an 
answer for, the technology to sequester carbon. We have 
invested quite a bit of money in that over the last number of 
years. Maybe a short answer--how far along are we, 
realistically, to sequester carbon? And is it a long-term 
solution? Realistically, is there a capacity to store this 
carbon, to do it efficiently and effectively throughout the 
United States?
    Mr. Albright. The technology exists to capture, we believe. 
It has not been used on a coal-fired plant, at large-scale, but 
we hope to do it in the future. The sequestering of the carbon, 
we are in the research stage. We believe it is feasible, it 
certainly has been done at labs. If indeed it works, it has 
multiple benefits because you can use it to extract oil, gas 
and other energy sources. We believe that it is going to work.
    Mr. Calvert. Will the cost of the sequester per kilowatt--
at what point does it become uncompetitive with other energy 
sources?
    Mr. Albright. It is going to cost more. Capturing and 
sequestering carbon will, in all likelihood, knowing what we 
know today, add costs.

         COST OF CARBON SEQUESTRATION VS. COST OF NUCLEAR POWER

    Mr. Calvert. Relative to nuclear power, at a cost per 
kilowatt, at what we know today on sequestering carbon, is 
carbon going to be noncompetitive with nuclear based upon what 
we know today about the cost of that technology?
    Mr. Albright. I don't know. Jim, maybe, can give us some 
better estimates on costs, but the fact of the matter is 
whatever the cost, if we are going to demand that we reduce our 
carbon dioxide emissions to the degrees that policy decisions 
are driving those reductions, we are going to have to capture 
that carbon. We simply can't build enough nuclear to meet our 
energy demands.
    If we continue with our CO2 reduction demands, I 
don't know--absent some breakthrough technology--I don't know 
that there are a lot of other options. I don't know the exact 
qualitative cost comparisons as we currently stand.
    Jim?
    Mr. Slutz. No. I think at this stage, there are many 
different studies out there with different ranges, but 
fundamentally you start with a concept of energy demand in the 
future, and we are going to need coal, we are going to need 
nuclear, we are going to need natural gas, we are going to need 
renewables. We are going to need them all. So if you are going 
to use coal, then a fundamental enabler in a world where we are 
dealing with mitigating climate effects, then we have to deal 
with managing the carbon, and sequestration is seen as the most 
likely and viable because the volume of CO2 produced 
from coal is very large. It is a very big-scale issue to solve.
    Your question of do we have capacity in the United States 
to sequester carbon? The answer is yes. We have done the 
significant work of analyzing what the capability around the 
country is. Our research program is very geared toward--we have 
seven regional partnerships, and the strategy in that is that 
we have to be able to demonstrate at-scale sequestration in 
various geologic settings around the country.
    The only area, just from a geology standpoint, that doesn't 
lend itself to sequestration in any way is New England just 
because of the geology. The rest of the country has a 
significant opportunity with sedimentary works and basins, so 
there is potential there.

              OTHER COUNTRIES CARBON SEQUETRATION RESEARCH

    Mr. Calvert. Are any of our competitors--say, the Chinese, 
and I know they put up a coal-power plant, a number of them 
every month--are they doing any studies at all in China right 
now on sequestering carbon?
    Mr. Slutz. Well, they actually are.
    Mr. Calvert. Have they done anything?
    Mr. Slutz. Well, just earlier this week, they announced a 
joint venture with Australia, for instance, on a power plant 
and some capture capability. It is not near of the scale of the 
work that we do, but they are very engaged in some of the 
international dialogues on carbon capture.

                                ETHANOL

    Mr. Calvert. Another issue, on ethanol, especially corn-
based ethanol. The state of California, we are paying north of 
$3.50 a gallon for gasoline right now, the highest in the 
country, I think. And there is some frustration about air 
quality issues, especially in Southern California. There are 
those who say that actually corn-based ethanol adds to the 
problem, and doesn't resolve the problem. It is not as 
efficient an oxygenate as others.
    So we keep looking to cellulosic ethanol that is coming 
online. Again, realistically, has there been any realistic 
breakthroughs as of yet? I know you keep looking at that silver 
bullet as a way of getting away from corn-based ethanol. Is 
there anything on the horizon that seems promising in the short 
term?
    Mr. Albright. We believe that there is. A lot of research 
is going on into the biogenetic composition of plants and the 
non-food parts of plants to break down the cells. The most 
costly part of cellulosic ethanol, the biggest energy hog, is 
in the initial breaking of the cell structure of the plants.
    Mr. Calvert. I guess the question is, we have invested a 
lot of money in research in this. Are we any further along than 
we were 5 years ago?
    Mr. Albright. I think we are much, much further along. 
Again, that is Andy's purview and he knows this inside and out.
    Mr. Calvert. All right, Andy. How far away are we from a 
realistic technology for cellulosic ethanol?
    Mr. Karsner. Our objective is to have plants at commercial 
scale and commercial production by 2012. We are well on the way 
to those metrics and milestones. You asked about 5 years ago. 
The cost of cellulosic ethanol production 5 years ago was in 
excess of $6. Today, our price point is approximately $2.10. We 
have a cost metric goal of $1.31, indexed what was then when we 
began the program the cost of conventional corn-based ethanol.
    We think that with the movement in oil prices, the metrics 
obviously move closer in time. So I would say you have every 
reason to be confident that it is imminent and inevitable that 
we will have cellulosic-scale commercial production in this 
country within a timeframe that makes a reasonable impact.
    Mr. Calvert. Thank you.
    Mr. Albright. If I might just add one thing Andy left out, 
is that we do hope to have it as a commercial basis, but cost-
competitive commercial basis.

      ELECTRIC TRANSMISSION INITIAL CORRIDOR DESIGNATION HEARINGS

    Mr. Calvert. Okay. One last question on transmission. In 
California, we don't produce our own power per se. We bring it 
in, so transmission is extremely important to us. As I 
understand it, on March 6, DOE issued a notice denying further 
hearings on initial corridor designations. This decision, much 
like the first one designating corridors to begin with, is not 
likely to be popular with many of us here in the House. So 
please explain the consequences of this latest decision and 
what are the next steps?
    Mr. Kolevar. The department's order last week denying 
rehearing is an administrative action. After the Secretary of 
Energy announced the corridor designation in early October, the 
department entered under the auspices of the Federal Power Act, 
a 60-day period of rehearing wherein parties could contact the 
department and write in and object or if they want to support--
and some did--our decision for a variety of reasons.
    We extended that rehearing period in early December for the 
purpose of considering all of the comments that we had 
received. After considering all of these comments, we 
determined that by and large they raised the same issues that 
were brought to our attention during the period that 
immediately followed the draft corridor designation in April of 
2007.
    So we are confident that the decision that the department 
made is consistent with the law, and we hope will have an 
appreciable impact on the ability to help secure more resources 
to feed growing electricity needs. So this was really an 
administrative action. Folks that had given comment to the 
department during the draft period and that gave comment to the 
department during this period of rehearing now have the 
opportunity, now have the standing to go into court and 
challenge the department's decision. I am certain that is 
happening probably as we speak. We expect a number of parties 
to go to into circuit court and challenge the department's 
decision.
    Mr. Calvert. Thank you.
    Mr. Visclosky. Mr. Simpson.
    Mr. Simpson. Thanks, Mr. Chairman.
    I always find these discussions interesting. I keep writing 
down things that you say that I want to ask you about.

                                  COAL

    Mr. Secretary, you said we can't build enough nuclear Plan 
B to meet our demands. Is that a political or a technical 
comment?
    Mr. Albright. Depending on how you define ``political,'' it 
is probably a little of both. Siting these plants, building 
them, getting acceptance within the timeframe necessary to meet 
our energy needs, I can't conceive of the ability to build 
enough nuclear. We currently have about 20 percent of our 
electricity generated from nuclear, over 50 percent from coal. 
It is cheaper, easier, faster to build a coal plant; cheaper, 
easier, faster to build a natural gas plant.
    Technically, we can get there. There is probably not a 
technical reason. There may be some reasons getting the 
components for nuclear plants if we were to build that many.
    Mr. Simpson. I don't say this critically. I realize that we 
are 50 percent coal and we are going to rely on coal for 
production of electricity well into the future and stuff. But 
this whole discussion that we are concerned about greenhouse 
gases because we know we have to reduce our carbon footprint, 
so we are looking at ways to produce electricity from coal with 
less carbon footprint, sequestration and so forth.
    Do we know the long-term impact of sequestration on 
underground geology? Have we done long-term studies on the 
impact of sequestration on underground geology and so forth?
    Mr. Slutz. Obviously, we are collecting a lot of 
information from some of the--you know, our experience on 
sequestration in saline aquifers is limited to small-scale. We 
are now moving into larger-scale studies. Those will give us 
empirical data that we can use to model. We have a lot of 
information in geology, so our geological models are good. But 
again, we still need to do work in those areas, and there is 
uncertainty in that long term.
    An area where there is very long-term information is on 
CO2 being used as a method to enhance oil recovery 
for decades. So we have real good information on that. Again, 
so it is a matter of translating that information, that we 
know, to things that we don't know. So there is still work to 
do, but we do have a good path forward on that research.
    Mr. Simpson. Back to the original discussion, the thing 
that I find interesting is that we all know that we are going 
to have to reduce the carbon footprint, and we all know that a 
majority of our electricity is produced by hydrocarbon energy 
now. And yet when I look at the budget, we are actually putting 
more in coal research than we are in nuclear research, which 
makes me wonder why.
    If you are really going to reduce your footprint, you are 
going to have to reduce your reliance on those sources of 
energy and get into renewables, wind, solar, other types of 
things which present their own problems to some degree. Are we 
doing anything about the hazardous waste that is actually 
produced by batteries that we talked about earlier, or by solar 
panels, in both disposal of them and the building of those 
types of things? I mean, they produce hazardous waste that 
oftentimes is more hazardous than anything nuclear. Are we 
doing things in research on how to deal with those hazardous 
wastes?
    Mr. Albright. We are. We are researching all of that. I 
think one of the things that we are learning is that we 
shouldn't rely on any one source of energy to generate 
electricity, and be so dependent on coal, or in the case of 
transportation----
    Mr. Simpson. What do our long-term studies look like? In 20 
years, what do we expect the percentage of our electricity 
produced by coal to be? Increased? Decreased?
    Mr. Albright. About the same is what we think in 20 years. 
I think if you look out 50 years, the hope--and it is hard to 
look out 50 years. I have a hard time understanding the past, 
let alone explaining the future.
    Mr. Simpson. I have a hard time understanding tomorrow. 
[Laughter.]

                       EFFICIENCY OF COAL PLANTS

    Mr. Albright. If you look out 50 years, you start to see 
things change a bit. I think there is a lot of research that 
needs to go on with coal. How to burn coal more effectively and 
efficiently, and to sequester the carbon. We are at around 40 
percent efficiency now, which is high-efficiency for a coal 
plant, very high efficiency. If we can increase that 
efficiency, we burn less and generate more.
    Mr. Simpson. What is the efficiency?
    Mr. Albright. The efficiency of a coal plant?
    Mr. Simpson. Yes.
    Mr. Albright. It is about 40 percent now, for a very good 
coal plant.

                        EFFICIENCY OF WIND POWER

    Mr. Simpson. What is the efficiency of wind power?
    Mr. Karsner. The efficiency of wind power is a function of 
the site that is chosen. So it really depends on what the price 
is locally. Generally speaking, people don't like to develop 
today at less than about 35 percent. But I just visited a site 
in Hawaii that was in excess of 50 percent. So the higher the 
efficiency, the more revenue and people are very motivated to 
invest high in efficiency in wind.

                             NUCLEAR ENERGY

    Mr. Albright. If I may, I think the question you want me to 
answer is, why aren't we spending more time and effort on 
nuclear. I think we are. I don't believe that in current 
technology nuclear requires the kind of research that coal 
does. We have done a lot of research on nuclear. We have built 
nuclear plants. We know how to do it very safely, very 
efficiently. It is emission-free.
    We continue to have some technical problems, some political 
problems with what to do with the waste. But as far as the 
technology for nuclear, there are four or five very well 
accepted designs for plants, three that are highly commercially 
viable, that are being built around the world. Most of Europe 
has built a lot of nuclear. Japan has built a lot of nuclear 
and they are doing it very safely and effectively.
    We hope to build more. I believe we are looking at a 
nuclear renaissance. One of the things our loan guarantee 
program is focused on is trying to expand our nuclear 
production. We haven't built a plant in over 30 years, and that 
is a shame.
    Mr. Simpson. It is a shame. But the one thing that gets me 
about the federal government, or about our energy portfolio of 
what we are looking at in the future, is that if John Kennedy 
had not said in 1960 that we were going to land a man on the 
moon by the end of the decade, we probably wouldn't have done 
it. He set a goal out there.
    And we are sitting here and we are saying we have to reduce 
our carbon footprint. Global warming is a problem. I don't see 
us building a whole lot more dams around this country, but 
maybe making some of them more efficient and a few things like 
that. And yes, we are going to increase solar and we are going 
to increase wind power and geothermal and those kind of things, 
but we all know it is not going to meet the baseload that is 
necessary in the future.
    Why aren't we setting out a picture that says by the year 
2525, we expect 25 percent of our energy produced by a clean 
technology, nuclear power? And by the year 2035, we expect 35 
percent of it to be produced by that to give us a goal and a 
vision of what we are going to be doing in the future. Because 
right now, I don't see that. All I see is the same, well, coal 
is 50 percent now and it will be 50 percent in the future. We 
have to find a way to reduce the carbons.
    Mr. Albright. The president has laid out a vision of just 
that. We are focusing a lot of our budget on that hope and on 
that promise.
    Mr. Simpson. Which would tell me that we would be putting 
more of the research dollars into those things that we expect 
to be the future, rather than those things we expect to be 
decreasing in the future.
    Mr. Albright. One of the things that we were very, very 
disappointed in was the cutting of our ITER research facility, 
which would be we believe the next generation of nuclear 
development. That was cut substantially after our begging that 
it not be cut. We are in a world partnership to do basic 
research through this facility.
    Mr. Hobson. If I could interject something for a minute. We 
have had 8 years of this administration. There hasn't been 
construction started on one new plant. How many licenses have 
been applied for? And how many licenses have been issued in the 
last 8 years?
    Mr. Albright. I think the answer to that is certainly 
issued, zero. Applied for, there are a number that have----
    Mr. Hobson. But the number is a handful. The number by now 
was supposed to be in the double digits. This is the most 
disappointing thing. I said this to the secretary. The most 
disappointing thing is that this department has not really done 
it when it comes to nuclear energy, and I worry about what 
happens in the next administration on nuclear energy.
    I am sorry to take your time.

               EFFECT OF ASH PRODUCED BY COAL FACILITIES

    Mr. Simpson. Mr. Chairman, I just have some small questions 
I would like to ask here.
    Mr. Slutz, studies since 1970 have found that radiation 
exposure to people living around coal facilities is equal to or 
higher--and oftentimes higher--than those living near nuclear 
facilities. It turns out that fly ash from coal plants is the 
culprit. It contains high amounts of radioactive uranium and 
thorium. How is this ash from coal facilities disposed of?
    Mr. Slutz. I am sorry? How is the ash disposed of?
    Mr. Simpson. Yes.
    Mr. Slutz. In coal facilities?
    Mr. Simpson. Yes, the ash produced by coal facilities.
    Mr. Slutz. Yes. I am not a coal expert on that. Our 
research portfolio is not in that area, but we can get back 
with you. I know by being in the industry, I know it is 
disposed of in a variety of ways, depending on the location.

                          Disposal of Coal Ash

    Coal combustion byproducts including bottom ash, boiler slag, fly 
ash, and flue gas desulfurization solids are regulated by the U.S. 
Environmental Protection Agency (EPA) as non-hazardous materials under 
Subtitle C of the Resource Conservation and Recovery Act. This is based 
on years of extensive analysis and characterization by the EPA and 
state regulatory agencies of these materials, including radioactivity. 
The most recent survey results from the American Coal Ash Association, 
indicate that about 125 million tons of coal combustion byproducts were 
generated by 2006, of which more than 54 million tons (>43%) were put 
to beneficial use. The remaining 71 million tons were disposed of as 
non-hazardous materials in landfills. 2006 was the latest in seven 
consecutive years of increasing beneficial use of coal byproducts, 
including use as a key ingredient in the manufacturing of concrete, 
wallboard, and other building materials. The increasing use of coal 
combustion byproducts is indicative that they can be safely used in 
commerce.

    Mr. Simpson. It seems that this radioactive waste at the 
federal level falls between the responsibility of the NRC and 
the Environmental Protection Agency. Does it need to be 
regulated? If so, whose responsibility is it for regulation?
    Mr. Slutz. The Department of Energy, I know, is not 
involved in that regulatory decision, so I think it would be 
best directed at those other agencies, but we can follow up.

                    Regulations of Coal Ash Disposal

    Fly ash and other combustion byproducts from coal fired power 
plants have an extremely low level of radioactivity. The U.S. 
Environmental Protection Agency (EPA) has consistently found that the 
levels of radioactivity and trace metals in these materials are well 
below threshold levels for drinking water. A series of regulatory 
determinations by the EPA--most recently in 2000--have exempted all 
coal combustion byproducts from Federal regulation under RCRA Subtitle 
C governing hazardous wastes--that is, they are considered non-
hazardous materials in terms of their disposal and reuse.

    Mr. Simpson. Okay. Potentially, this subcommittee deals 
with cleanup of nuclear waste all over the country. It is where 
an awful lot of our budget goes and it is a problem and 
something has to be done. Are we creating a disposal and 
cleanup problem in the future for coal ash that is around the 
country and is going to create major cleanup problems such as 
we have with the nuclear industry currently?
    Mr. Slutz. Again, we are not focused on the coal ash issue. 
We do on issues that when you look at some of the liability 
issues regarding, those kind of questions on carbon 
sequestration, that is exactly what our program is geared to 
understand that so we don't end up with a problem.
    Mr. Simpson. Well, as I said, I don't ask these questions 
because I am opposed to coal or I am opposed to removals or 
anything else. In fact, I am very supportive of them and I 
realize they are going to be part of our future. But we have to 
understand that there are implications by the increased use of 
coal technology, by the increased use of solar, by the 
increased use of batteries and other types of things, that we 
are going to have to deal with in the future.
    I hope that the department and people within the federal 
government are thinking about what this is going to be in 20 
years or 50 years, and what is this committee doing at that 
point in time, which by then maybe I will retire, what are they 
going to be dealing with in trying to clean some of this up.
    So I appreciate your testimony today and I look forward to 
working with you on these issues. Certainly, I don't have the 
answers, and you guys are the experts. So maybe we can sit down 
and talk about this one of these days. I appreciate it. Thank 
you.
    Mr. Visclosky. I am going to recognize Mr. Rehberg in just 
one moment, but I would want to follow on on the issue of 
research, and indicate that the subcommittee has certainly 
shown strong support for research under the GenIV program as 
far as looking ahead to that long-term future.
    Secondly, for the record, because Mr. Simpson has talked 
about a number of waste issues we deal with on the nuclear side 
and you talked about coal ash. We have had a lot of discussion 
about battery development, but there are waste streams that we 
are spending billions of dollars every year through this 
subcommittee cleaning up.
    Mr. Karsner, would you be most appropriate for this? If you 
could for the record indicate what the department is doing as 
far as looking at what do we do with the waste stream? How do 
you recycle those? Not long ago, I could always take my 
flashlight batteries to a transfer station, and now they won't 
accept them. And so I assume they are in a solid waste dump 
now.

                    Recycling Battery Waste Streams

    The Department of Energy is not involved in the recycling of 
standard consumer alkaline batteries, but can speak to the recycling of 
hybrid vehicle batteries. Today, nearly all batteries for hybrid 
vehicles are produced abroad and any waste streams generated during 
manufacturing are managed in those countries. Waste streams resulting 
from batteries manufactured in the U.S. and any future growth in 
domestic battery manufacturing will be managed by our strong 
environmental regulations.
    Most hybrid vehicles manufactured to date are still on the road. 
Therefore, recycling of hybrid batteries has not been an issue. In the 
future, when these vehicles are retired in large numbers and new 
battery chemistries come on-line, the recycling infrastructure 
currently in place for both lithium ion and nickel metal hydride 
batteries will need to gradually expand. Because of the high value 
materials contained in these batteries and the mature auto dismantling/
salvage industry, hybrid vehicle batteries will be recycled. In 
addition, recycling and disposal issues are considered in DOE's battery 
development program.

    The final thing I would mention because the Secretary 
mentioned the lack of funding for EDER, our job would have been 
easier last year if the President had not been adamant that he 
would not sign a bill with one more penny than he asked for. 
This year looking ahead, if the President hadn't cut his 
proposal for funding water in this country by over $1 billion, 
so I just want to make sure that is clear.
    Also, I do want to thank Mr. Rehberg for the jelly-bellies 
that are the original gourmet jelly bean. That is the second 
gift from the right-hand side of the dais.
    Mr. Ryan. Mr. Chairman, do you have to report this as a 
gift? [Laughter.]
    Mr. Visclosky. Mr. Rehberg.
    Mr. Rehberg. Mr. Chairman, you might notice that I have my 
side of the dais eating jerky that you have provided--protein--
and I have your side eating sugars. We will get back in the 
majority one way or the other. [Laughter.]
    You could have said our side needs to lose weight and your 
side doesn't. [Laughter.]

                           FUTUREGEN ALLIANCE

    Gentlemen, the department entered into a partnership with 
the FutureGen Alliance. The partnership was 74-26. The 
department woke up one day and said, oh my gosh, we are behind 
schedule. Is the Alliance responsible for you being behind 
schedule? You are the senior partner. You control the schedule. 
You do the permitting. You do the siting.
    Who is at fault here?
    Mr. Albright. We could point fingers all day, I guess. We 
were supposed to be partners. I am sure we bear some of the 
blame for delays. I am sure they bear some of the blame for 
delays. I would like to clarify one thing. We were not in 
charge of siting. That was the Alliance's exclusive job. We 
were not in on their site selection. Specifically, we did not 
know until the time they announced.
    Mr. Rehberg. Were there regulatory impediments to the site 
selection? Did they have to work with state legislators and 
state governments to get the permitting done before they could 
pick the site?
    Mr. Albright. They did.
    Mr. Rehberg. Here is what I am getting at. It seems like 
you are not a particularly good partner. The best example of 
that is, I have been touting this project all over America and 
I don't have a dog in the fight because Montana, for one reason 
or another, wasn't smart enough to put in a proposal. It turns 
out they were pretty smart because a deal is not a deal with 
this administration.
    And so what I have been touting is the fact that isn't it 
great that there is a public-private partnership. There is an 
alliance put together with a 501(c)(3) that says we as 
companies are going to put in money that we don't want to make 
a profit off of in this 501(c)(3), and we are going to share 
this technology with anyone and everyone. And then we go out 
and we talk to foreign countries who are not required to be 
partners with us, ask them for money, and then pull the plug.
    So I guess my next question is, have any of those 
countries--because I went to China and I went to South Korea 
and talked to their governments and said you need to be a part 
of this alliance; you need to be a part of this partnership; 
this is real. The federal government is putting in a big share 
of it and companies in America, if you were going to be part of 
the global change of our environment, you need to be a part of 
it. And they said that they would.
    Did any of them make pledges or financial donations to this 
effort?
    Mr. Albright. There were some pledges made. I don't know if 
there were ever any checks actually written. We have been in 
contact with the international community on the new direction. 
There has been very positive feedback. I would like to say one 
of the reasons we started negotiations in April in trying to 
renegotiate this contract is we were seeking to avoid 
exercising a clause in the agreement that would allow the 
government in June of 2008 to make a decision whether to go 
forward with the program.
    The Alliance was allowed at any point to terminate their 
participation. The government was allowed only at given 
intervals, given points in time, and June of 2008 was out next 
one.
    Mr. Rehberg. Are you aware of any foreign countries then 
saying, well, thanks for the deal, but now that you have 
changed the rules, we are not interested in doing business with 
you anymore?
    Mr. Albright. No, sir, I am not aware of that.
    Mr. Rehberg. Okay. You say the administration made the 
decision to pull the plug because of escalating costs. A number 
of us are involved in the construction industry, so we are well 
aware of costs. What has the alliance done to cause that cost 
increase?
    Mr. Albright. As I said earlier, I don't think there was 
any mismanagement. I don't think there were any problems that 
drove the costs.
    Mr. Rehberg. Other than steel.
    Mr. Albright. I beg your pardon?
    Mr. Rehberg. Other than steel.
    Mr. Albright. I learned the error of my ways on that. 
[Laughter.]
    Mr. Rehberg. Then the question becomes, if you made the 
decision to cancel the project based upon escalating costs, how 
can the administration with a straight face come in and support 
the continuation of a MOX facility that has exactly the same 
problem?
    Mr. Albright. For a number of reasons. One, the MOX 
facility doesn't currently have the kind of alternatives that 
we have with FutureGen.
    Mr. Rehberg. Okay. Then I guess I would ask, do you expect 
under your reconfigured new management plan that the various 
facilities or companies that are going to come in and want to 
do business with you are going to set up the same kind of a 
501(c)(3) where they are going to be willing to share the 
technology with foreign countries?
    Mr. Albright. We hope the technology----
    Mr. Rehberg. You hope? You have no knowledge. Again, read 
The Wall Street Journal because there are countries that are 
now saying because of your decision, we don't want to do 
business with America. We can get you that article if you want.
    I also quote my former chairman, Mr. Hobson, and if I am 
misquoting I know you will correct me, but one of the reasons 
as I traveled through France with the chairman learning about 
was happening in Europe as far as the nuclear industry, was 
that there were not all these differing technologies out there; 
that they recognized one technology and kind of got in behind 
it as a country of companies. The difficulty in America is that 
there were competing technologies.
    As a result, I carried that forward to FutureGen and 
suggested, isn't it great that we have the alliance of 
companies working with the government, to have a technology 
that can be duplicable or replicable around the country. And 
you have just blown that entire theory right to smithereens.
    Mr. Albright. I hope not, congressman. And let me say----

                           FUTUREGEN ALLIANCE

    Mr. Rehberg. Well, you are experimenting at a time when we 
need to get these facilities in place. In relation to what Mr. 
Calvert said, we can't get a plant built. You can't anyhow. You 
have proven that. But we can't in Montana because our governor 
says, yes, we would love to have a new coal-fired generating 
plant in Highwood, Montana, but you can't build it until you 
have sequestration proven.
    Mr. Albright. That is exactly what we are trying to do. 
That is the portion that we are focusing on.
    Mr. Rehberg. But by changing directions within the 
administration, you have set us back a minimum of 5 and 
probably 10 or 15 years.
    Mr. Albright. We have advanced the goal. We have advanced 
the time because we do not believe that the other project was 
economically sustainable. We believe that Congress would have 
cut the funds off, just as they did with the super-collider in 
Texas, and you would be left with a hole in the ground. You 
would be left with the people of Mattoon, Illinois with no 
jobs, with lots of responsibilities financial and otherwise, 
expectations raised, with the inability to go forward. I 
specifically did not think that was the right choice.
    Let me say, this was a tough decision. I have made a lot of 
decisions throughout my career and obviously personal life. 
This was as hard as they get. There is not cut-and-dried 
answer.
    Mr. Rehberg. Well, unfortunately I find it a little 
disingenuous you blame the alliance at all for not coming to 
the table and sitting down and trying to cut a deal with you, 
because I wouldn't. I hope they have learned their lesson that 
they ought not do business with you in the future, but they 
have to because you are the agency they have to work with. The 
true guide will be whether these foreign countries are willing 
to do business with you anymore, and I frankly think they 
won't.
    Mr. Albright. Congressman, a good friend of mine likes to 
use the expression that even the thinnest pancake has two 
sides. I can assure you that there are two sides to this debate 
and discussion.
    Mr. Visclosky. Mr. Ryan?
    Mr. Ryan. Thank you, Mr. Chairman.

                             SEQUESTRATION

    I am going to bounce around a little bit. First, with just 
a couple of comments on the sequestration. This is something 
that we have an opportunity in Ohio, along the Ohio River, with 
economic impact in Pennsylvania, West Virginia, Ohio, a major 
regional coal-to-liquid facility, but the sequestration again 
is vital.
    So as we hear all these debates on TV about the downside of 
globalization, the downside of NAFTA in areas like mine and 
probably several others members--I know Gary, Indiana as well--
who have suffered from globalization. This is a real 
opportunity for us to use our geographic location to try to 
stimulate our local economy and this is a key component of it. 
So I just want to support what my colleagues have said.

                              BATTERY R&D

    I know the issue of batteries has been brought up here as 
well. I want to ask a question with regard to that. Some of the 
products that are brought in to make these batteries, that 
obviously we don't have in supply here in the U.S. What factor 
does that play in the development of the lithium battery?
    Mr. Karsner. At this juncture, not a significant factor 
because we don't have a significant manufacturing industry. But 
to the extent that we emphasize the need to build one, and I 
hope that we do, largely the submaterials, the materials that 
would be supplied come from nations that are more friendly and 
aligned with our interests than other dependencies that we 
have. Countries like Chile and Argentina are principal 
suppliers of lithium, by way of example.
    So on a commoditized basis in a global world, getting 
access to lithium, if we were to cultivate a robust industry 
here at home, the access to lithium would not be the priority 
problem, tradable with friends and allies. The bigger problem 
is the race to create that industry that has some demand on it 
because the longer we wait to do it, and the more robust our 
competitors are, the more they will have priority call on those 
global resources, and these things will be going to Japan and 
China and Korea, and we will be a second-hand customer.
    Mr. Ryan. Do you think we are doing enough on the 
governmental side to encourage development of this product?
    Mr. Karsner. We are----
    Mr. Ryan. What are we investing? Are we investing?
    Mr. Karsner. We are invested predominantly in the long-term 
research and development of the product to make it more 
durable.
    Mr. Ryan. How much?
    Mr. Karsner. I could get you the exact figure, but 
approximately $50 million from our portfolio. There is a robust 
storage investment from the basic science portfolio. So the 
answer is yes, we are doing an enormous amount, a world-leading 
amount in terms of the research and development of it. We are 
probably not fulfilling our interest for the commercialization, 
deployment and manufacturing piece of it.
    Mr. Ryan. What do we need to do to encourage that?
    Mr. Karsner. Well, we have tools on the books. We discussed 
earlier----
    Mr. Ryan. I am sorry I missed it. I had another hearing.
    Mr. Karsner [continuing]. That loan guarantees were 
specifically developed for commercialization of technologies 
such as these, that could avoid, sequester and reduce 
greenhouse gases. Our portfolio will be eligible for 
approximately $10 billion of those loan guarantees as they 
stand up, and we will be advising the loan guarantee program 
that storage is a priority area.
    Mr. Ryan. For the battery component?
    Mr. Karsner. For both batteries for transportation and 
storage for the grid.
    Mr. Ryan. So you think that will stimulate the 
commercialization and speed it up? What is your projection? How 
long?
    Mr. Karsner. There is simply no question that in a global 
world, as you have characterized it, we have to be in a 
competitive position to make a favorable investment environment 
for a market with too few players that possess this technology; 
too few investment dollars; and ultimately a captive market--in 
other words, the automotive industry.
    So what are we doing on the private sector side to ensure 
that we have a good, reliable, long-term customer with healthy 
balance sheets in the automotive sector that can take off these 
batteries reliably? And what are we doing as a government--
local, state and national--to assure that it is more attractive 
to get your returns in the United States?
    On both those counts, today we are not in as competitive a 
position as the Europeans or the Asians. So I think the things 
that we have in statute are powerful, and as we stand them up, 
hopefully they will be favorable, but the irony we have today 
is as leading investors in the R&D, many of these companies are 
American and are more quickly seeking their commercialization 
deployment opportunities in other investment environments 
abroad.

                               WIND POWER

    Mr. Ryan. Just to switch gears a little bit. I know we 
have--and you mentioned Hawaii where there are the high-wind 
areas for wind power. There are a lot of areas in the country 
that have moderate wind power. Are we designating any resources 
or earmarking--that is not a popular word anymore--but 
earmarking any money for development of these moderate 
windmills or windmills that would develop some power in some 
moderate wind areas?
    Mr. Karsner. That has been an interesting dialogue--even in 
our shop, in our national laboratories--among those who favor 
increasing the focus on the capacity to harness lower wind 
speeds. To some degree, we have tried to move our wind program 
to be far more relevant to the marketplace. You know, wind is 
the fastest-growing source of energy and new capacity 
additions, not just in our country, but worldwide.
    So we have to say, who is the customer that is moving it? 
It is not the federal research scientist and what we would like 
to do, or a select community project with a low wind speed 
resource. The customer is the developer that is deploying these 
at larger rates and scales every year. That customer in the 
marketplace is finding more rational ways to harness the high 
wind speeds, which yield a far lower and more competitive price 
for the wind based on all the R&D that we have invested over 30 
years.
    So our strategy has been more about size and scale and co-
location with the already available good resource, selected by 
the private sector, and then giving them pathways to the 
marketplace through our work with Kevin's shop in the Office of 
Electricity. We need, as he put in his testimony, wires. It is 
a transmission discussion. How do we get the high yielding wind 
spaces into the urban load centers?
    There is a market for lower speeds, but it is very small 
and incremental relative to these national objectives of wind 
taking increasingly large parts of an emission-free portfolio.

                              DESALINATION

    Mr. Ryan. Thank you.
    Finally, if we are going to try all the bases, 
desalination. What are you guys doing with regard to investment 
into the research for desalination?
    Mr. Karsner. Regrettably, not a great deal.
    Mr. Ryan. That answers it, I think. [Laughter.]
    Mr. Karsner. Yes, not a great deal. Because desalinization 
is so energy intensive, we do some of the front-end power 
consumption, which would be where our nexus would be to 
desalinization. But desalinization technology itself, reverse 
osmosis and conversion are not in our portfolio.
    Mr. Visclosky. Mr. Fattah.
    Mr. Fattah. Thank you, Mr. Chairman.

               EISA ENERGY EFFICIENCY BLOCK GRANT PROGRAM

    The Energy Independence and Security Act that was just 
passed by the Congress had as part of it an energy efficiency 
block grant program authorized $2 billion to help local 
communities focus in on energy efficiency and conservation 
efforts.
    I would be interested in how you view--how that program, in 
your mind, should be rolled out or implemented. What should be 
the appropriate first steps along that road?
    Mr. Karsner. Well, yes, sir. I mean, obviously, the timing 
presents far too much of a challenge for the 2009 budget 
request. But I think the onus of your question is how would you 
rationally begin a dialogue to say this should be stood up 
correctly in the first place when it is budgeted.
    And I think that that is probably a dialogue with the 
appropriate associations and representatives of counties and 
cities and those councils. I think you would want to be careful 
to optimize that volume of money which is, as it is described 
in statute, another formulaic grant program.
    You would want to be able to guide that to useful metrics 
that are measurable and serve the purpose on the first day that 
such a program were funded. But as I said, as the EISA was 
signed in mid-December, it did not factor into our thinking.
    Mr. Fattah. You said that if the Congress decides to make 
some down payment in this regard to begin this program, you 
think that one of the steps is to work with the stakeholders 
involved. But from the department's viewpoint, your sense of 
the utility of an incremental beginning in this regard, in 
terms of which of the various priorities would you think would 
be the appropriate focus?
    Mr. Karsner. Well, I mean, I think that is the problem. 
That is the challenge with formulaic grant programs managed 
through the federal government in general. Fundamentally, we 
are an ATM machine when we have that type of statute. So you 
fund us, we apply the formula, and we distribute it without 
many milestones or metrics or enforcement.
    So for us to add the value of best practices and 
reconciling the history and experience of the department, our 
national labs and what we could bring to bear, there would need 
to be some sort of a stimulus response mechanism and 
interrelationship.
    This is precisely the discussion we have on the formulaic 
grants. It is how to make them more agile and, to some degree, 
get some competitiveness amongst the stakeholders to apply best 
practices that we can then reconcile and convene the 
stakeholders to so that the whole moves up.
    Mr. Fattah. If we decide to proceed in some form on this 
program, are you confident that the process that you would 
prefer could be short-streamed in a way in which we could get 
some utility in this regard?
    Mr. Karsner. If the will of Congress were to move forward 
on that, I would be happy to have all of our resources at 
disposal to convene with your office or other interested 
parties to say, Is there a way to optimize federal best 
practices involved with that?
    Mr. Fattah. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Visclosky. Mr. Serrano.
    Mr. Serrano. I apologize for the fact that I join you at 
this time, but I was chairing my own hearing down the hallway 
with the Consumer Product Safety Commission.

                             WEATHERIZATION

    I understand that Mr. Olver, gentlemen, touched on the 
issue of weatherization, and I wanted just to follow up. Even 
if you assume that the weatherization program is an awkward fit 
in DOE, this budget does not propose moving it to another 
agency. It simply proposes eliminating it.
    When you combine that with the proposed decrease in LIHEAP 
in the HHS budget, one has to wonder how low-income Americans 
are supposed to pay their energy bills next winter. It seems 
like the administration simply has no interest in helping those 
who need the most help.
    Now, I have to tell you that I have taken a bit of heat--
and that is a terrible pun--in my congressional district for 
accepting an agreement with CITGO that, as you know, is 
providing a lot of home heating oil at a 40 percent discount. 
Many people see it as some sort of incredible propaganda move 
by President Chavez from Venezuela.
    But I say that because my district is a living example of 
what happens when folks have trouble paying their bill at the 
end of the year. And what can you tell us? I mean, is there an 
indifference to this issue? Is there a desire, perhaps, to 
remedy this later on? To tell us that it doesn't fit within DOE 
may be a technical answer, but it certainly doesn't help Mr. 
Smith's problems next winter.
    Mr. Karsner. Congressman, I think you are asking precisely 
the right question, and one that is asked all too rarely. How 
do you fix this problem? Because this has been a yo-yo question 
year after year after year, based on the metrics of competing 
this particular program against all the other programs with 
higher returns.
    So the question about a consolidation of income-related 
federal weatherization assistance is the important question, 
and it is a statutory question, because the provisions for this 
particular program, unlike many others, are embedded in the law 
from which it has arisen.
    Therefore, it does require a hands-on approach by Congress 
across multiple committees to determine how a consolidation 
would best occur to more effectively deliver without having to 
compete it in this particular portfolio where, as you point 
out, it is, in fact, awkward.
    We would be happy to consult with that in any way. We have 
offered HHS and across all agencies any technical assistance, 
any technology provisions, those core strengths of the 
department, to continue in perpetuity to assure that they are 
getting what our strength is, the technology focus. But in 
terms of the delivery mechanism, that is a statutory fix, and 
it requires multiple committees to consult, and probably on 
both sides--probably on the Senate and the House side. I am not 
an expert in such things.
    But our focus would be just as you outlined it--how do you 
make this an effective and efficient delivery mechanism not 
just for the 88,000 homes that get it each year, but for the 27 
million homes that are eligible for it each year?
    So we have that delta. We are not fixing it. We are doing 
policy by placebo when we talk about it each year as to how it 
competes in this portfolio. We would be happy to work with your 
office if you think a consolidation move is in the interest.
    Mr. Serrano. I appreciate that. At the expense of having to 
repeat yourself because of my earlier lack of presence in the 
committee, why is it an awkward fit within DOE?
    Mr. Karsner. Well, I think there are multiple reasons, you 
know. The first and obvious thing to say is we have been asked 
several times in this committee about redundancy across the 
federal government and how to be more streamlined and efficient 
in our delivery.
    Now, I understand the stakeholders in this are quite 
passionate, and they are doing good work, and I understand why 
they would want to hedge their bets across multiple pots and 
pools of money and keep it that way. But the first thing that 
is obviously asked by those people who command or review the 
budgets across the whole federal government is why do we have 
this in multiple places.
    So the second thing would be to say what is the right place 
relative to mission. It stands that this is the only income-
related assistance program in all of the Department of Energy's 
scientific, research, development and deployment portfolio. So 
it completely stands out in a way that we formulaically apply 
it and never get to any substantial percentage of those who are 
available for the help.
    Mr. Serrano. Well, I would hope, Mr. Chairman, that these 
gentlemen--you know, they have made the offer to work with us--
that we could do that, because there are a whole host of issues 
in this country that still have not been resolved and that make 
us look bad in view of the wealth of our society, and one of 
them is that there are still folks in--a significant number of 
people who just don't know how they are going to pay their 
heating bill next year.
    And I am not talking necessarily about the ones who will be 
hit by the economic downturn. That is going to be everybody in 
this room to a different extent. We are talking about folks 
that were never really able to get a handle on this issue.
    Under weatherization, the government stepped in, and was 
able to do something. However, now it seems like more and more 
we are either consolidating or eliminating programs, and 
creating a serious problem. So I certainly stand ready to work 
on this, and I know that you will, too, Mr. Chairman. And I 
thank you.
    Mr. Visclosky. Mr. Rehberg.
    Mr. Rehberg. Thank you, Mr. Chairman.
    Very seldom do you have an out-and-out victory over the 
bureaucracy. Andy, thank you. Friday was his executive 
assistant's last day, and yesterday was her first day with me. 
So I stole her from you.
    Mr. Karsner. I cursed the day.
    Mr. Rehberg. Yes, curse--you should have paid her more.
    Mr. Karsner. Yes. [Laughter.]
    Or had her work less hours in preparation for the 
committee.
    Mr. Rehberg. Yes, something like that. [Laughter.]

                       TRIBAL GRANT OPPORTUNITIES

    And I know all about you. And my question is for you. It is 
a very quick one, and that is the Karok tribe in northern 
California was a successful grantee and entered into a 
partnership with your department for a First Steps grant. It 
was a pretty exciting opportunity for them, because they came 
up with a plan, and the plan was a small hydro and solar 
project, and there were, lo and behold, that partnership kind 
of ended as well.
    I have gone back to my prior discussion. And can you 
explain why now Wally Herger has to come in for an earmark, one 
of those dastardly things--and if we do what you are reading in 
the paper today it is not going to happen. Again, why do we 
enter into partnerships with the department when the rug is 
kind of pulled out from under us, especially in something as 
exciting, I think, as the First Steps grant program?
    Mr. Karsner. Does that fall under the tribal program?
    Mr. Rehberg. Yes, it is tribal.
    Mr. Karsner. And I will report back for the record on that 
specific tribe and grant opportunity.
    But in general, the tribal program is not unlike Mr. 
Serrano's questions on the weatherization, where incrementalism 
and very selected choice opportunities to the few who could 
interconnect with the federal government has been the guidance, 
instead of a more holistic national and measurable vision of 
saying these are all the tribal communities in need, these are 
all of their resources, this is the timeframe it takes to fix 
the problem.
    And so that has been the difficulty. It is not that there 
is not virtue in the small amount of money that we give to the 
tribal programs or have over our history. And it is not that it 
doesn't do good work when it connects. It is that we need----
    Mr. Rehberg. But isn't there kind of an inherent believed 
expectation of some kind of a follow-through on the part of the 
department when they enter into it? I mean, you know, this is 
time. This is effort. This is commitment.
    Mr. Karsner. Well, I mean, I can't speak to that one 
opportunity, and there may be that, and I will revert to that. 
But in general, those grants have their own definition of time. 
And so it should be understood when those grants are received 
whether there is a multiyear mortgage or whether it is a one-
off opportunity. And so, I mean, that is almost an explicit 
contractual relationship.
    Mr. Rehberg. Okay. If you could report back on that one 
specifically.
    Mr. Karsner. Yes, sir.

                       Tribal Grant Opportunities

    In FY 2007, the Karuk Tribe of California applied for and was 
competitively awarded $98,120 under DOE's Tribal Energy Program's 
Funding Opportunity Announcement ``First Steps Toward Renewable Energy 
and Energy Efficiency on Tribal Lands'' to conduct an ``Energy Analysis 
and Conservation on Karuk Trust Lands.'' The project started on 
September 30, 2007 and is scheduled to be completed by December 31, 
2008. The agreement with the Karuk Tribe was for the ``First Steps'' 
project only, with no DOE contractual obligation for future funding 
except through a future competitive process.
    Also in FY 2007, and for several prior years, DOE's Tribal Energy 
Program had issued a Funding Opportunity Announcement seeking 
feasibility studies from the Federally recognized Tribes and Alaska 
Native Corporations for renewable energy and energy efficiency 
projects. In FY 2008, DOE's Tribal Energy Program did not seek either 
``First Steps'' nor feasibility studies project proposals from the 
Tribal community. Rather, the Tribal Energy Program has been refocused 
to (1) provide highly cost-shared financial support toward deploying 
renewable energy and energy efficiency systems ``in the ground'' in 
Alaska and the lower 48 states within 18 to 24 months and (2) develop 
model financial solutions, legal frameworks, and Tribal training to 
spur broader project development. The goal is to provide the knowledge, 
technical assistance and legal templates to spur greater project 
development through a more holistic national strategy for the Tribal 
community, rather than continue awards for feasibility studies to a 
limited number of applicants that result in very few actual projects.

    Mr. Rehberg. Thank you, Mr. Chairman.

                           FUTUREGEN PROGRAM

    Mr. Visclosky. Thank you very much.
    Mr. Secretary, we have had a number of questions on the 
FutureGen program, and I would also have a number of them. 
Could you, for us, describe your restructuring plan in a bit 
more detail? When do you expect, for example, the first clean 
coal plant to actually begin operations?
    Mr. Albright. We have put a request for information out to 
the public. We got in excess of 50 responses. We are analyzing 
the information that we got back. We will meet with interested 
parties who responded and those who didn't respond. We will be 
open to the public to get more information.
    We hope to make a selection by the end of 2008 as to 
where--selecting the companies to build these facilities. I 
don't know exactly what the timeframe will be on completion of 
those.
    Mr. Visclosky. Do you have a ballpark year?
    Mr. Albright. Ballpark would be 2015.
    Mr. Visclosky. And what is going to be the federal cost 
share as to how the Program is going to be run?
    Mr. Albright. The way we are structuring this is the 
government, the federal government, is trying to structure it 
so that we pay the carbon capture and sequestration element of 
this. They build the plant. We pay for the portion that the 
private sector was unwilling to pay for, and that is the carbon 
capture and sequestration.

                          FUTUREGEN COST-SHARE

    Mr. Visclosky. So it will be 100 percent on the plant on 
the private side and 100 percent on the----
    Mr. Albright. Well, the plants will be eligible. It will be 
no additional federal involvement. They are already eligible 
for certain loan guarantees, tax credits, et cetera, 
potentially.
    Mr. Visclosky. Okay. Tax credits would be tax policy, and 
loan guarantees, I understand what those are about. Will there 
be any other federal monies they would be eligible for for the 
plants themselves that would be from programs under this 
committee's jurisdiction?
    Mr. Slutz. We don't anticipate that. The plant would serve 
as a cost-share component against the CCS, so it would meet the 
demonstration--the overall project would need to meet the 
demonstration requirements of at least a 50 percent cost share.
    That is one of the challenges as we, or challenge/
opportunities as we work through all the comments that we have 
received from industry, and many positive comments, is how to 
structure that cost share so it is--so we can get the most 
competitive and optimal bids, you know, when we get to the 
request for funding proposals stage.
    Mr. Visclosky. Under the demonstration, it is supposed to 
be 50-50, depending on each plant being somewhat unique and 
each of the capture and sequestration being somewhat unique. Is 
there a requirement in your solicitation that it be 50-50, or 
you are looking to be as close to 50-50 as possible? Is there a 
range as far as the cost share?
    Mr. Slutz. The total value of the project would be--because 
part of it gets very technical in the details of what qualifies 
for various cost share. But I can kind of sketch out what we 
would envision as a potential proposal based on plants that 
industry has proposed--is it would be probably in the range of 
a 600-megawatt power plant, which would cost somewhere in the 
probably $2.5 billion-plus range.
    We would be paying for the carbon capture and storage 
demonstrated on one 300-megawatt train of that power plant. And 
that would be--and we are working within the budget of $1.3 
billion that was allocated for the FutureGen project.
    We would anticipate being able to do multiple plants. Does 
that give you framework? And part of that is trying to 
understand--we have some estimates on cost, but because of the 
nature of where this is, those are fairly preliminary, and we 
need that feedback from industry.
    Mr. Visclosky. I understand there is some give here, but 
the concern I would have, and I think all of the members would, 
is that the proposal of FutureGen originally was 74-26, 76-24--
--
    Mr. Slutz. I think 74 government, 26 industry.
    Mr. Visclosky. And we would want to know as we proceed 
here, given the comments that a number of members have made 
about the first go-around here, is to make sure we know what 
the values are on both sides of this transaction. If you could 
for the record, I would appreciate that very much.

                          FutureGen Cost Share

    Under the original FutureGen approach, the Department was 
responsible for 74 percent of the total project cost, and industry was 
responsible for 26 percent. the restructured approach to FutureGen will 
limit the Department's expense to the incremental cost of carbon 
capture and storage (CCS). The allowable CCS-related costs will be 
defined when a new Funding Opportunity Announcement (FOA) is released 
in summer 2008. The costs incurred will vary based on the nature and 
extent of the proposals received, yet the Department will limit its 
cost contributions to only the CCS portion of the power plant, and to a 
maximum of 50% of the total project cost.

    You will be getting solicitations--and I assume that also 
will be site-specific as far as the solicitations you receive. 
They will be for specific sites. Who picks the sites? That is 
my question.
    Mr. Albright. Private sector.
    Mr. Visclosky. So that will be similar to the original 
FutureGen program where----
    Mr. Albright. It will be.
    Mr. Visclosky [continuing]. The alliance picked the----
    Mr. Albright. It will be, except these will be commercially 
sited plants for commercial purposes.
    Mr. Visclosky. So part of their response to your 
solicitation is okay, we want to participate, we will build a 
plant, and we will build a plant in Montana.
    Mr. Albright. Correct. Correct. [Laughter.]

                 INTEGRATED GASIFICATION COMBINED CYCLE

    Mr. Visclosky. Right? I mean, that is the right answer.
    The restructuring does seem to follow many of the 
suggestions made by the MIT report on coal published last year, 
in particular to build multiple clean coal demonstrations.
    One observation--and Mr. Slutz probably this would be 
directed to you, that you did not take from the report--was not 
to pick winners when it comes to the power plant technology. 
What was the rationale in demanding that plants use integrated 
gasification combined cycle technology?
    Mr. Slutz. You are talking about in our request for 
information?
    Mr. Visclosky. Yes.
    Mr. Slutz. The program is written around, and we think the 
integrated gasification combined cycle has a clear role. We 
actually expanded when we requested, did the RFI, and again, we 
are still--understand that that closed last week, so the stack 
of, you know, comments, we are integrating through quite an 
extensive comment program.
    But we did ask for a broader input on whether that was the 
right path, should we consider other paths. And so we are 
analyzing those. Just from the state of the technology, we 
think there is clearly a lot of interest and a lot of 
opportunity in IGCC.
    Mr. Visclosky. So it is not a given that it will be IGCC 
technology at each Plant. Is that still somewhat in question, 
if I understand your answer?
    Mr. Slutz. We have received comments from industry around 
that issue, and we are working through those comments. That 
will be worked through before we go out with the formal request 
for proposal.
    Mr. Visclosky. So what is your answer?
    Mr. Slutz. We haven't made a decision on that yet, but it 
is skewed toward IGCC.
    Mr. Visclosky. Secretary?
    Mr. Albright. We tried to leave it as open as we could. We 
wanted the private sector to give us information. If they have 
a better way to do this, we wanted to hear from them as to what 
they believe is a better way. We believe, given what we know, 
that IGCC is likely the technology that will be----
    Mr. Visclosky. So it is most likely we----
    Mr. Albright. Most likely.
    Mr. Visclosky [continuing]. Might see that, but it is not a 
certainty.
    Mr. Albright. We did not try to lock the private sector 
into what the government says you must do. We tried to leave it 
as open as possible. They have massive amounts of information 
and technological and commercial expertise, some of which we 
have, some of which we don't have.
    The commercial application is what we are really looking 
for here, and that is a huge part of the difference between the 
research facility and commercial application. We are trying to 
get to the end point.
    Whereas the earlier research, the commercial ventures, 
would have been able to pick and choose what they wanted out of 
this research facility, we are now saying we will pay for a 
large portion of this; you tell us what you want to do, what is 
commercially feasible.

                 UNDERGROUND STORAGE OF CARBON DIOXIDE

    Mr. Visclosky. Okay. The underground storage of carbon 
dioxide emissions will be a key component of the proposed 
projects. And in particular, the Department intends to provide 
support for building and operation of a storage system.
    The Department is also supporting several such large-scale 
tests of underground storage as part of the regional carbon 
sequestration partnerships over the next few years. It would 
seem as though it is a duplication. And what is the rationale 
of the Department for supporting both large-scale tests and the 
carbon storage of FutureGen plants?
    Mr. Albright. We have announced that we will have seven 
carbon sequestration partnerships around the country. We hope 
that each of those will demonstrate the unique needs of various 
geographic areas.
    Specific testing will go on at those unique geographic 
areas. There is nothing that precludes the FutureGen project 
from collaborating with the seven partnerships. We hope that we 
will learn from both the sequestration partnerships and from 
FutureGen.
    Mr. Visclosky. In a sense, what is your coordination role? 
Do you propose FutureGen be filling in less speculative sites? 
Would that be the right question?
    Mr. Slutz. I think--sorry.
    Mr. Albright. No, no, go ahead.
    Mr. Slutz. Really, you have to look at----
    Mr. Visclosky. I just want to make sure we are not doing 
two----
    Mr. Slutz. No, no, no, but you----
    Mr. Visclosky [continuing]. Tracks that never meet.
    Mr. Slutz. It is a very good question. And because as we 
look, the whole coal--it is not just the partnerships and that, 
but how do you integrate the whole coal research portfolio, 
what you do, and then the higher level, how do you research the 
Department's portfolio. But the sequestration partnerships are 
under way right now. They have completed small-scale tests. We 
have actually approved four of them to move forward with large-
scale tests.
    We actually have some detailed--and they are doing data 
acquisition in the first year of that. The other three will be 
moving forward, we anticipate, later this year. But those are 
on a scale that we will begin those very soon, okay? And we 
need to get that information very quickly.
    One thing that is very--FutureGen integrates that all 
together, and you have to have that integration. And remember, 
we will be working the next few years on getting the--you know, 
we make the selections later this year. But we are looking at 
2015 for a commercially operating FutureGen, the first of the 
FutureGen plants if they were starting from ground zero versus 
ones already on the drawing board. So from a time scale, the 
partnerships are working now. We will bring in significant 
information that will be used to set the regulatory structure. 
And then these FutureGen plants will come in after that with 
the integrated system. So it really is a complementary system.
    Mr. Visclosky. So you would build on the knowledge you want 
to gain from the partnership in a sense, although a lot of this 
will be concurrent as well as you proceed.
    Mr. Slutz. Yes. They will be operating concurrently, but 
for instance, injection in the large-scope partnerships are 
probably a year away. You are looking several years before you 
get the FutureGen plant operating on an integrated scale.

                        FUTUREGEN SITE SELECTION

    Mr. Visclosky. Okay. A substantial amount of time, money 
and effort have gone into the site selection process for 
FutureGen and, in particular, to environmental impact 
assessments at the final four sites considered.
    And in particular, the site at Mattoon, Illinois. Are there 
any plans by the Department to try to make sure that these 
efforts don't go to waste? For example, has the Department 
pursued coordination of the efforts made at those sites with 
the regional partnership program?
    Mr. Albright. We have put in our requests for information, 
and we will continue to work on having companies look 
specifically at those areas that have done the kind of work 
that was done in Mattoon. We have encouraged both in writing in 
the RFI and also just verbally, to try and pay particular 
attention to those areas. I think they have addressed the 
liability.
    There are studies that have been done on the suitability of 
the sites, that should perhaps not be directly on a one-for-one 
basis. They can't just flip it and apply it to a new project. 
But they should save significant amounts of time and 
engineering effort that would have to go into a site.
    That is kind of a long answer to saying yes, we have worked 
and we will continue to work with the private sector. We 
believe that that work that has been done on those sites will 
not go for naught. But again, that is going to be left to the 
private sector to make that determination.

                        OFFICE OF FOSSIL ENERGY

    Mr. Visclosky. Gentlemen, one thing--and Mr. Rehberg is 
here, and Mr. Serrano--we have, I guess, one vote. And 
apparently we have to be out of here at 1:15 p.m., which I just 
found out about.
    But I have just scratched the surface, and as a courtesy I 
have waited to last. So if I could continue for a few more 
minutes on fossil, I will run to vote, and if we could just 
come back as quickly as possible, and squeeze as much as we 
can, I would really appreciate that.

                             FOSSIL ENERGY

    Mr. Secretary, I do notice that the Department does not 
seem, as far as their appointments to the Fossil Energy 
program--a serious commitment. There is today no Assistant 
Secretary. And with all due respect to Mr. Slutz, who is 
acting, there is no permanent Principal Deputy for Fossil 
Energy. And those are two of the top positions.
    With the lack of permanent personnel at these top two 
positions, what are we to infer as far as the administration's 
commitment to fossil?
    Mr. Albright. I am not sure what you should infer. I can 
tell you what you should not infer that there is a lack of 
commitment. I think the budget certainly shows that, if nothing 
else.
    Let me take a second to compliment Jim on the work he has 
done. He has been willing to serve in this position and has 
done an exemplary job of leading the team, working very, very 
hard on some of the most difficult and vexing issues.
    As you know, we had a nominee for assistant secretary who 
withdrew his name just a few weeks ago. We are trying to see 
what we do in light of that. There is no lack of commitment. 
There is no lack of time, energy and effort that is going into 
ensuring that we are fully staffed in that shop. It is just the 
cold reality of this stage in the administration it is hard to 
get people to fill positions for a few----
    Mr. Visclosky. Mr. Slutz.
    Mr. Slutz. I am going to do the best job I can.
    Mr. Albright. He is doing a great job.
    Mr. Visclosky. That all we can do, you know?
    Mr. Albright. He is doing a great job.
    Mr. Visclosky [continuing]. A struggle every day.
    But along that same line, the Office of Fossil Energy is a 
federal steward for underground geological storage of carbon 
dioxide and is expected to be critical to our efforts to avoid 
global warming. I am told that the underground storage may be 
critical for management of carbon dioxide emissions not only 
for coal-fired plants but also to store emissions from a range 
of sources, including ethanol plants and future natural gas 
power plants.
    But I was looking at the organizational chart and I do not 
know--and I stand to be corrected--if it is a man or a woman 
who is the Director of the Office of Sequestration for--I 
shouldn't say that. The person who runs the program reports to 
the Office of Sequestration and Hydrogen Clean Coal Fuels, is 
that correct?
    Mr. Slutz. Are you looking at an ACL chart?
    Mr. Visclosky. No.
    Mr. Slutz. I am sorry. I am not sure what chart--Dr. Victor 
Der--oh, Lowell Miller. And Lowell works for Victor Der.
    Mr. Visclosky. Okay. And so Mr. Miller is in charge. He is 
in charge.
    Mr. Slutz. Of the sequestration----
    Mr. Visclosky [continuing]. Of sequestration.
    Mr. Slutz. He is a Director. And then our Deputy Assistant 
Secretary for the Clean Coal Program is----
    Mr. Visclosky. Okay, and then that reports to----
    Mr. Slutz. And he reports to me.
    Mr. Visclosky. Reports to you. Okay.
    Mr. Slutz. And then that is implemented out to the National 
Energy Technology Laboratory.
    Mr. Visclosky. Okay.
    I am going to defer on fossil for a moment here and get to 
biofuel, Mr. Karsner, if I could.
    You know, I think let's run and we will be right back.
    [Recess.]

                 CO2 EMISSIONS FROM BIOFUELS

    Mr. Visclosky. The Committee will come to order, and I do 
appreciate, gentlemen, your patience with us here.

                                BIOFUEL

    Mr. Karsner, a key challenge to increasing biofuel 
production is making biofuels cost competitive with petroleum-
based transportation fuels, so we have had a fair amount of 
conversations about them today.

                FEEDSTOCKS AND CO2 EMISSIONS

    I have a couple of questions . When you compare feedstocks, 
will some produce more or less CO2 than others, 
taking into consideration the full production life cycle?
    And I don't want to be rude, but obviously we have got a 
couple--and they told us literally we have got like 21 minutes 
here. It is not my idea, let me tell you.
    Mr. Karsner. The question is that----
    Mr. Visclosky. But in all of these, if you would want to 
expand for the record, I would deeply appreciate that, if you 
could.
    Mr. Karsner. Okay. We will do that. That is a complex 
question. The short answer is yes, different feedstocks will 
have different life cycle characteristics and greenhouse gas 
emission profiles.
    All of them, depending on the energy intensity of the 
production and conversion, are going to be a greenhouse gas 
reduction relative to the conventional carbon-based fossil 
fuels or the petroleum fuels that they are displacing.
    Mr. Visclosky. Okay. And if I could, as far as the matrix--
how the Department, when they are doing research, and depending 
how things develop, deciding which road to go down--how do you 
balance your choices between feedstocks that may produce 
significant energy, but yield significant CO2 
emissions with those that may produce less energy but have less 
CO2 emissions?
    Because as you had mentioned a couple times, and I agree 
with you, you know, this is a national security problem. This 
is an economic problem. This is environmental. How does the 
department think about these things?
    Mr. Karsner. To some degree, we still remain somewhat 
agnostic on the feedstock itself. Of course, the Department's 
historic core strength is in the conversion technology, the 
conversion platform, rather than the inputs.
    As we get closer to the targets for commercialization and 
our funding of these commercialization plants, we have to be 
into feedstock inputs. But in all cases, those feedstocks and 
these conversions yield a better climate change profile than 
what they are displacing. So there is a lot of analysis right 
now on the sustainability, on the climate change profile, of 
the various forms of biofuels.
    It is important to put it in context against what it is 
displacing, first off. And then both conversion technologies 
and feedstocks progressively yield different profiles. What we 
want to do is to be as diverse in our investments as possible 
so----
    Mr. Visclosky. At the front end.
    Mr. Karsner. At the front end, so different regions, 
different feedstocks, as many different feedstocks as we can 
accommodate and understand the attributes of, which right now 
is fairly rudimentary. In other words, running sweet sorghum, 
or switchgrass, or urban green waste or agricultural waste--we 
are in a learning process right now.
    But all different regions of the country have biomass that 
is capable of being utilized for cellulosic conversion, and so 
our challenge is thinking of our energy sources on a far more 
distributed basis than the concentrated base we have today in 
the Gulf region or Alaska, and then piped everywhere.
    Mr. Visclosky. Is the emphasis on the substitution? And is 
CO2 secondary?
    Mr. Karsner. I think that it is fair to say that the 
emphasis is on breaking the addiction to oil and displacing oil 
first and foremost, and that we know, no matter what, depending 
on the energy intensity in, that the environmental profile 
should be better. So it is all about, then, improving that 
environmental profile as we improve the process.
    Mr. Visclosky. You are agnostic at the beginning. For 
example, we funded these programs in 2007 and 2008. From what 
you have learned in just, say, 2007 to beginning of 2008, 
although we are almost halfway through the year now, and 
recognizing you develop your budgets much earlier, let me go 
back to 2005, 2006.
    Has that changed? Has your funding signature changed as far 
as how you are approaching feedstock for the 2009 request? As 
you have learned, has that adjusted where you are putting----
    Mr. Karsner. I think it is fair to say we have 
progressively gotten far more into feedstocks than we were 24 
months ago. We don't want needless overlap with the USDA, and 
so we do a joint funding, joint program with them on several 
aspects of it. We have moved far more into sustainability, 
space of direct and indirect land use of the feedstocks, the 
impacts of nitrates and phosphates in water runoff, et cetera. 
Those are inevitable things that will increase our focus.
    The bundling, the handling, the single versus double pass 
harvesters, we have to focus on the feedstock equation as we 
get closer to commercialization on the conversion platforms. We 
had one of our cellulosic winners in yesterday who identified, 
not like many other places in the sector, feedstock management 
as being his number one commercial risk.
    Mr. Visclosky. Okay.

                      STRATEGIC PETROLEUM RESERVE

    Secretary, we have not talked a lot about the Strategic 
Petroleum Reserve, but essentially, the capacity right now is 
about 727 million barrels. The proposal is to go up to 1.5 
billion, as I understand it.
    With the price of oil hitting $100 a barrel, and apparently 
Guy Caruso, the head of the Energy Information Administration, 
indicated last week in testimony that this was likely to be the 
high, although I don't think anybody is speaking of a certainty 
here, what is the rationale for the expansion beyond the 
authorized levels now?
    Mr. Albright. Well, the president has determined that we 
need, for strategic reasons, a 90-day supply of oil. That would 
be about a 1.5 billion fill. At the current fill, I think we 
have about a 57-, 53-, somewhere in that range, day supply. Get 
to a million, we will be at about a 60-day supply.
    As to Mr. Caruso's comments, I hope he didn't try to 
predict that this is the all-time high. I thought that at $60, 
and then at $70, and then at $80. But we do know that 
historically prices have gone up during switch-over periods and 
during the summer.
    Due to reduced efficiencies in the burn of the fuel, you 
need more oil in the summer time for an equal amount of energy.
    Mr. Visclosky. But as far as the facility and then the 
purchase of the oil, What is the estimated overall cost to get 
to 1.5 billion?
    Mr. Albright. I will be happy to try and get that for you. 
I don't know.
    Do you know that?
    Mr. Slutz. Well, you know, I can give it to you in round 
numbers, and then we can--but to move to the billion level, the 
total cost of it is around $5 billion. Then to move to the 1.5, 
it is another $5 billion cost.
    Mr. Visclosky. I would understand that it is--oh, you were 
talking about construction?
    Mr. Slutz. Construction costs.
    Mr. Visclosky. Construction. Okay.
    Mr. Slutz. That does not include acquisition of the oil.
    Mr. Visclosky. Okay. I am told that that potentially could 
be 45, 55--and of course, obviously, it is completely dependent 
upon what the price is, too.
    Offering some context for my question, if you would, assume 
$10 billion in construction costs, which is not an 
inconsequential sum of money, and then the add-on for the oil--
Mr. Karsner's budget for this year is $1.7 billion, give or 
take, and the request is a bit over $1.2 billion, $1.3 billion.
    If we invested that--I will throw out--say $50 billion over 
the next 19 years in renewable technologies and alternative 
fuels and conservation, could we make up that 750 million 
barrels? I mean, I am dividing 1.7 into $50 billion and 
thinking, I am getting a lot of renewable research and 
conservation and other efforts. Could I just replace those 
barrels without building the----
    Mr. Albright. I think we probably need to do both. 
Certainly, again, the president has made a determination that 
our strategic interest is served by having a 90-day supply, and 
that is what we are building toward. I don't think that is 
coming at the expense of our advancement of renewable and 
efficiency technology that we are working on.
    I might add that when we do our purchases for the fills, we 
do make an economic analysis of whether or not, given the price 
at the time, given the contracts that we can possibly get, we 
make the purchase. We have not made the last two purchases 
because we didn't feel that they were economically viable. Now, 
again, that is not to look 6 months down the road, but it is to 
say given what we know today.

               HIGH TEMPERATURE SUPERCONDUCTIVITY PROGRAM

    Mr. Visclosky. Mr. Kolevar, I do not want to ignore you, 
because my son just got back from his visit to Ann Arbor 2 
weeks ago, so I don't want to leave you in the lurch. Sorry 
about that day.
    Mr. Kolevar. Good choice.
    Mr. Visclosky. The high temperature superconductivity 
program has focused on high-performance conductor wires with 
100 times capacity than conventional copper wires. Would you 
explain some of the new attributes? And are the new conductor 
wires available on the markets? And if not, when will they be 
deployed?
    Mr. Kolevar. Right, so you have two different wires in the 
marketplace. You have 1G wire. You have 2G wire. The 
superconducting lines are really flat tape, superconducting 
materials sandwiched between metals--silver in the case of 1G 
wire, nickel in the case of 2G wire.
    And while we have 1G wire in demonstration now, I think we 
are looking at I believe Albany, the Albany project, coming up 
is a 2G wire cable demonstration. We think 2G ultimately holds 
the prospect of much lower costs, if not because of the further 
advancements in materials research, if for no other reason than 
the cost difference in precious metals that go into the wire 
itself. But we have seen significant progress on the wire side 
in the high temperature superconductivity program.
    When I first came into this job 3 years ago, I considered 
the HTS program to be about a mid- to perhaps a long-range type 
of R&D program. And I have revised it upwards in the last 
couple of years based on the penetration that we are starting 
to see.
    Mr. Visclosky. The new wires, if you would, have an 
attribute of being able to move more electricity, and is it 
more efficiently? Do you lose less power on those wires as 
well, then, or----
    Mr. Kolevar. I would have to go back and look. I am not 
aware that you lose power in the 2G lines. My understanding is 
that the attributes principally are greater capacity to move it 
and, just as important, a much potentially less expensive wire.
    Mr. Visclosky. And you don't have to go through the process 
of having to find new corridors, because you are essentially 
rewiring existing corridors, as I understand it.
    Mr. Kolevar. Yes. Really, when you are talking about HTS 
wires, I think you are talking mostly about some transmission, 
but a lot of urban distribution.
    Mr. Visclosky. Okay.
    Mr. Kolevar. So in cities like New York City and other 
large cities where you are utilizing, say, underground 
pipelines.
    Mr. Visclosky. Okay. I am corrected.
    Mr. Olver had a couple of comments.
    Mr. Olver. Thank you, Mr. Chairman.

                           SUPERCONDUCTIVITY

    You started on the superconductivity. And, Mr. Kolevar, you 
are talking about the wires. Well, that gets you back into 
resistance, because the superconductivity isn't going to be 
maintained in these cheaper wires. Superconductivity does have 
the opportunity, I think, to reduce a huge amount of long-range 
loss, transmission loss, and ought to have some--I don't know 
enough about this as I ought to, so I am not sure whether I am 
really on target here.
    But I was going to ask you how much of your relatively 
small budget--it is only $134 million or so--goes into the 
issue of superconductivity, because I think there is a major 
opportunity in transmission loss, which is very, very 
significant in our major lines.
    Mr. Kolevar. For fiscal year 2009, we propose $28.3 million 
in R&D for the----
    Mr. Olver. In the superconductivity portion.
    Mr. Kolevar. And I will say that there are certainly going 
to be transmission size applications for high temperature 
superconducting wire in the future. Most of the work that we 
are seeing now is smaller scale. The longest lines that we are 
really looking to put in place right now, with 300 meters or so 
in Albany and longer in New Orleans. And given the cost of 
coolant along those lines, I think long-distance transmission 
for HTS is something that is far off in the future. But that 
should in no way diminish the significance of this application 
in an urban setting to really allow for much more effective 
flows of electricity.

                        OFFICE OF FOSSIL ENERGY

    Mr. Olver. Okay. I wanted to give something to Mr. Slutz 
over there.
    You don't have fusion in your bailiwick. Maybe you are 
quite happy not to have fusion in your bailiwick. But there is 
a nuclear process which I think is in the science program 
because it has never quite reached the development level, 
whereas everything else that you guys talk about is basically 
research and development.
    Your proposed budget is a couple hundred million dollars 
above what it has been, and there are at least a body of people 
who think that if one were to spend perhaps $1 billion a year, 
per year, for, a period of years, we might finally break 
through.
    There remains that holy grail, essentially, because both 
the volume and the intensity of the waste that you produce in 
fusion, at least as best we know about it, is so much less than 
it is in the case of fission nuclear processes.
    So there may be some place in the future to ramp upward the 
amount that is being expensed so--at the level it has been, you 
expend a couple hundred million dollars a year, as has been the 
case now for a lot of years, and you make very little progress 
along the way. It needs a certain, really, scale to that 
research program to get there, I think.

                           CELLULOSIC ETHANOL

    A third comment that I wanted to make, on the cellulosic 
ethanol, I have had scientists come to me and say, please do 
not close avenues that are available. We have operated on corn 
ethanol, and we are now moving toward cellulosic ethanol, and 
both of those depend upon the breakdown to the ethanol, which 
in corn is relatively easy, but still takes a lot of energy.
    In the case of cellulosic, either you are working on a 
sequence of biological events that get you down to the ethanol, 
or there are those who now think they have a closure of that to 
just one or two steps that get you down to that point. One or 
two steps, if they prove to be relatively effective, would seem 
to be a good deal better than going the other, but there are 
others.
    This group of scientists I speak of has come in saying we 
can take the very same feedstock that is being talked about for 
cellulosic ethanol and break it down in sort of a Fischer-
Tropsch process, and get it down to carbon monoxide and 
hydrogen, and then start putting the compounds back together to 
get hydrocarbons again.
    And that one is one that--you had made the comment 
earlier--that we should not foreclose routes of research. And 
that is one that I think ought to be at least considered if, 
and I don't know whether you have any money in that kind of an 
approach.
    Mr. Karsner. Yes, sir. I think that approach is being 
pursued widely amongst many of the people that we work with and 
affiliate, particularly through the basic science program and 
the----
    Mr. Olver. Through the basic science, not through the 
development side yet. It is out in the basic science side.
    Mr. Karsner. Well, I think that is right. We haven't seen a 
commercially scalable process integration proposal of the type 
that you are talking about. That dialogue has really just begun 
over the last 12 months to 24 months.
    People like Jay Keasling and people like Dumesic over at 
University of Wisconsin think it is very promising, and it 
certainly would be the case that the department is not at all 
foreclosed on that. The Secretary is actually quite fond of 
that particular scheme and pathway.
    To some extent, it is sort of first past the post. We don't 
want to choose any one of these things. We want to cultivate 
the conditions where the first one that succeeds is allowed to 
succeed. But if you have folks you would like to refer to us 
and have that conversation--applied science program--our door 
is really quite open. We do not have----
    Mr. Olver. In the applied science, in the applied science.
    Mr. Karsner. That is correct.
    Mr. Olver. That is a different section from what you have 
in your responsibility.
    Mr. Karsner. We handle the biofuels. It is applied science 
in use perspective. We work closely with the basic sciences 
which operate the three----
    Mr. Olver. So that argument could come under you because it 
starts with biofuel stocks----
    Mr. Karsner. Yes.
    Mr. Olver [continuing]. And goes down and then 
reconstitutes, which strikes--think that that would take more 
energy than just coming down the several steps along the way. 
But if there are more efficient steps coming down all the way, 
and then building up, it might be that it might prove to be 
marginally the better way to go.
    Mr. Karsner. The question is not the process itself. It is 
what is the relative maturity of the process compared to all 
other processes. We are open to all these things, and work with 
them at the appropriate place in the RD&D pipeline where they 
exist. So if they are ready to build out today, which I do not 
think is the case with that particular process, that is closer 
to our shop.
    If they are just at the beginning of studying on how to 
string together alcanes to hydrocarbons from cellulosic or 
green sources, that is more resident in Dr. Orbach's shop. But 
we will find a home for it if it is a viable process. And we 
are certainly not foreclosing on that. Of course, every 
cellulosic developer that comes to us says his thing is better 
than the next guy.
    You know, our deal is in the national interest to cultivate 
the right policy conditions, market conditions, and have 
multiple bets in parallel to see which one is first past the 
post.
    Mr. Olver. I think we are at time up, but if I can have 1 
more minute?
    Mr. Visclosky. One.

                            HYDROGEN ECONOMY

    Mr. Olver. I want to just go back to the hydrogen economy 
again for a moment, because there has been much said about it, 
and my guess is that you all understand that in the process of 
developing a hydrogen economy, why I suggested that a battery 
breakthrough would be very important.
    But in a hydrogen economy, whether you make hydrogen by 
starting with coal or natural gas and blasting it with heat and 
pressure and water and so forth, you get hydrogen, but you use 
a hell of a lot of energy. And the amount of energy that you 
use is greater than what you are going to get out by then using 
the hydrogen in any mechanism we know.
    Well, the same thing is basically true if you are going to 
do it with nuclear power, at least--nuclear power, however the 
nuclear power happens to come.
    You are going to use a lot of energy to break down that, 
even if it is basically just an electrolysis to hydrogen, in 
which case the transmission and the storage and so forth 
becomes really key. So you are never in these processes going 
to get more energy out when you finally work with the hydrogen 
fuel cell at the end and put hydrogen in it in order to run a 
vehicle.
    It may be important to do it and valuable to do it, simply 
because you are changing the direction that it is--you are 
changing the--you are getting away from the CO2 
issue if you can make the hydrogen by some mechanism other than 
using coal and other hydrocarbon kinds of mechanisms. But you 
are not going to get away from the fact that you will be using 
more energy than you will get out of the process in the long 
run. I believe that is correct.
    Mr. Karsner. In the law of thermodynamics, each conversion 
loses energy, so it is correct in that sense. And just viewing 
hydrogen much more so as a carrier of energy rather than the 
source of energy is sort of important to our concept 
ultimately.
    So you are right. It is competition with plug-ins and 
batteries. We pursue them both. It is a race between the 
efficacy of protons versus electrons in carrying our energy to 
displace oil. But thought about in the appropriate context, 
each of those can find an appropriate mix in the marketplace.
    Mr. Olver. Okay.
    Mr. Visclosky. I never learned that law in law school at 
Notre Dame. [Laughter.]
    Mr. Karsner. They taught it at Michigan. [Laughter.]
    Mr. Visclosky. I am sure they taught it--and Ohio, let's 
just say, and South Carolina. I will go down the road with you, 
okay?
    Following up on the hydrogen, though, we have some very 
specific questions we would ask for the record as far as how 
the monies that are being transferred, and you had an earlier 
interchange with Mr. Olver, are being redistributed. And if you 
could answer that for the record.
    Mr. Karsner. Yes, sir.

                  ENERGY EFFICIENCY PROGRAM INVESTMENT

    Mr. Visclosky. Also, I do make note of the fact that the 
snacks have now gone and the members have gone, so there must 
be some correlation.
    I would, again, want to thank Mr. Hobson, because when he 
became Chairman 5 years ago they arrived on the scene, and it 
has helped attendance.
    I also would be remiss, and I do believe if he was here he 
would join me, Mr. Secretary, Mr. Hobson and I have been very 
perturbed at most of our hearings this year about the lack of 
follow-through or the complete ignoring of not congressional 
direction but the law that was signed by the President that was 
passed by the Congress.
    In this case, I want to thank you because there was a 
direction in the law passed by Congress, signed by the 
President, that we were having a very difficult time with, and 
you were very responsive and very cooperative and have done 
everything possible to make sure the law is implemented. And I 
certainly appreciate that very much.
    And I just want you to know fair is fair, and in this case, 
you went out of your way, and I appreciate that very much.
    I would just ask in the end, and everybody is getting real 
nervous here now, to get us off--just one last question. And I 
am not trying to be facetious, Mr. Karsner, but to almost get 
back to my original point, we are spending a lot of money.
    And there are a complex number of reasons why gasoline is 
whatever it is today. If I am that average constituent waiting 
on tables at a diner, working in a mill or, as Ms. Emerson 
said, driving 45 minutes each way in the country, it is killing 
them.
    What can we tell the American people we are going to get 
out of this investment the next year as far as some immediate--
we all are paid to look down the road. What about the next 12 
months? What are you working on that we can say something is 
going to start turning a corner?
    Mr. Karsner. I wish I could tell you that there was an easy 
fix. I have to answer that for my own family when I visit with 
them. And there isn't an easy fix. We have been postured toward 
long-term transformational technologies.
    We have moved more than ever, I think it is fair to say, 
under this secretary toward commercialization and deployment in 
an intelligent way that views the scale of the problem and the 
rate of deployment relevant to the problems as a guiding 
metric. That has not always been the case.
    The bottom line for all the technologies that are in these 
portfolios is to compete today. We can no longer compete them 
exclusively on first cost, the cost you see when you first buy 
a widget, the cost you see when you first buy a fuel.
    It has got to be on the life cycle, total cost of 
ownership. And until we impress that as the competitive metric 
in our society, and stop doing things at builder's grade, or 
stop viewing our investments in clean energy technologies or 
new transmission, as only the investment on the day we make 
them, then we won't get to deployment.
    But the loan guarantees are meant to do that. $38 billion 
are meant to push this stuff out the door. Banks, investors, 
are capitalizing in this way. And of course, we want to 
continue to work with your leadership, Mr. Chairman, to come up 
with the mechanisms that adapt our institution toward more 
rapid commercialization.
    Mr. Visclosky. Gentlemen, do continue your hard work.
    And, Mr. Secretary, if you could also stay in close touch 
with us as far as the permutations and progress on FutureGen.
    Mr. Karsner. Yes, sir.
    Mr. Visclosky. And again, thank you very much for your 
cooperation, and thank you for your time and patience.
    [Questions and Answers for the record follow:]

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                           W I T N E S S E S

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                                                                   Page
Albright, C.H....................................................   509
Bodman, Hon. Samuel..............................................     1
Karsner, Alexander...............................................   509
Kolevar, Kevin...................................................   509
Orbach, Raymond..................................................   323
Owen, Michael....................................................   169
Rispoli, Jim.....................................................   169
Slutz, James.....................................................   509