[Senate Hearing 110-442]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 110-442

                                                        Senate Hearings

                                 Before the Committee on Appropriations

_______________________________________________________________________


                                                       Energy and Water

                                                            Development

                                                         Appropriations

                                                            Fiscal Year
                                                                   2008

                                          110th CONGRESS, FIRST SESSION 

                                                      H.R. 2641/S. 1751

DEPARTMENT OF DEFENSE--CIVIL

DEPARTMENT OF ENERGY

DEPARTMENT OF THE INTERIOR

NONDEPARTMENTAL WITNESSES

 Energy and Water Development Appropriations, 2008 (H.R. 2641/S. 1751)


                                                        S. Hrg. 110-442
 
    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2008

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                                   ON

                           H.R. 2641/S. 1751

 AN ACT MAKING APPROPRIATIONS FOR ENERGY AND WATER DEVELOPMENT FOR THE 
     FISCAL YEAR ENDING SEPTEMBER 30, 2008, AND FOR OTHER PURPOSES

                               __________

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

                               __________

         Printed for the use of the Committee on Appropriations


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html

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                               __________
                      COMMITTEE ON APPROPRIATIONS

                ROBERT C. BYRD, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             THAD COCHRAN, Mississippi
PATRICK J. LEAHY, Vermont            TED STEVENS, Alaska
TOM HARKIN, Iowa                     ARLEN SPECTER, Pennsylvania
BARBARA A. MIKULSKI, Maryland        PETE V. DOMENICI, New Mexico
HERB KOHL, Wisconsin                 CHRISTOPHER S. BOND, Missouri
PATTY MURRAY, Washington             MITCH McCONNELL, Kentucky
BYRON L. DORGAN, North Dakota        RICHARD C. SHELBY, Alabama
DIANNE FEINSTEIN, California         JUDD GREGG, New Hampshire
RICHARD J. DURBIN, Illinois          ROBERT F. BENNETT, Utah
TIM JOHNSON, South Dakota            LARRY CRAIG, Idaho
MARY L. LANDRIEU, Louisiana          KAY BAILEY HUTCHISON, Texas
JACK REED, Rhode Island              SAM BROWNBACK, Kansas
FRANK R. LAUTENBERG, New Jersey      WAYNE ALLARD, Colorado
BEN NELSON, Nebraska                 LAMAR ALEXANDER, Tennessee

                  Terrence E. Sauvain, Staff Director
                  Bruce Evans, Minority Staff Director
                                 ------                                

              Subcommittee on Energy and Water Development

                BYRON L. DORGAN, North Dakota, Chairman
ROBERT C. BYRD, West Virginia        PETE V. DOMENICI, New Mexico
PATTY MURRAY, Washington             THAD COCHRAN, Mississippi
DIANNE FEINSTEIN, California         MITCH McCONNELL, Kentucky
TIM JOHNSON, South Dakota            ROBERT F. BENNETT, Utah
MARY L. LANDRIEU, Louisiana          LARRY CRAIG, Idaho
DANIEL K. INOUYE, Hawaii             CHRISTOPHER S. BOND, Missouri
JACK REED, Rhode Island              KAY BAILEY HUTCHISON, Texas
FRANK R. LAUTENBERG, New Jersey      WAYNE ALLARD, Colorado

                           Professional Staff

                               Doug Clapp
                             Roger Cockrell
                         Franz Wuerfmannsdobler
                        Scott O'Malia (Minority)
                         Brad Fuller (Minority)

                         Administrative Support

                              Robert Rich


                            C O N T E N T S

                              ----------                              
                                                                   Page

                        Wednesday, March 7, 2007

Department of Energy:
    Office of Environmental Management...........................     1
    Office of Civilian Radioactive Waste Management..............    20

                        Thursday, March 15, 2007

Department of Defense--Civil: Department of the Army: Corps of 
  Engineers--Civil...............................................    53
Department of the Interior: Bureau of Reclamation................    74

                       Wednesday, March 21, 2007

Department of Energy: Office of Science..........................   167

                       Wednesday, April 11, 2007

Department of Energy.............................................   221

                       Wednesday, April 18, 2007

Department of Energy: National Nuclear Security Administration...   321

                       Nondepartmental Witnesses

Department of Defense--Civil: Department of the Army: Corps of 
  Engineers--Civil...............................................   393
Department of the Interior: Bureau of Reclamation................   460
Department of Energy.............................................   487


    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2008

                              ----------                              


                        WEDNESDAY, MARCH 7, 2007

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:21 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Byron L. Dorgan (chairman) 
presiding.
    Present: Senators Dorgan, Murray, Domenici, Bennett, Craig, 
and Allard.

                          DEPARTMENT OF ENERGY

                   Office of Environmental Management

STATEMENT OF HON. JAMES A. RISPOLI, ASSISTANT SECRETARY 
            OF ENERGY FOR ENVIRONMENTAL MANAGEMENT


              opening statement of senator byron l. dorgan


    Senator Dorgan. I call the hearing to order. Let me 
apologize for the delay, but we have had two votes on the floor 
of the Senate and they are just finishing.
    This is the first hearing of the Energy and Water 
Subcommittee this year and the first since I have assumed the 
chairmanship, and I am pleased to be in this role and working 
on so many interesting and divergent issues. I am also pleased 
to be working with my colleague Senator Domenici. I visited the 
National Laboratory at Sandia in New Mexico with Senator 
Domenici 2 weeks ago. I saw some of the scope of the 
subcommittee's jurisdiction during that visit and was very 
impressed, very interested.
    Today we have two important programs to hear from, the 
Office of Environmental Management and the Office of Civilian 
Radioactive Waste Management. I am going to put most of my 
opening statement into the record so that we can hear the 
witnesses, but let me say that the Radioactive Waste Office has 
the immediate task of submitting a license for the Yucca 
Mountain waste repository to the Nuclear Regulatory Commission 
by June 2008. The Environmental Management Office has the 
immediate and long-term task of cleaning up the contamination 
from nuclear weapons facilities that date back to the Second 
World War. It is clear to me as I look at the budget that we 
have some very serious budget problems and we will evaluate 
some of those today.


                           PREPARED STATEMENT


    I am going to put the rest of my statement in the record. I 
will be using a portion of that discussion during the question 
period. I want to thank both Mr. Sproat and Mr. Rispoli for 
being with us today.
    [The statement follows:]

             Prepared Statement of Senator Byron L. Dorgan

    The hearing will come to order. Thank you all for being here today. 
This is the first hearing of the Energy and Water Subcommittee this 
year and the first of my chairmanship.
    I am happy to be in this role and excited by the prospect of 
working on so many interesting and divergent issues. I am also pleased 
to be working with my colleague, and long-time chairman of this 
subcommittee, Senator Domenici.
    I visited Sandia National Laboratory in New Mexico with Senator 
Domenici two weeks ago.
    During that visit I saw some of the scope of this subcommittee's 
jurisdiction and my colleague's wealth of experience on these matters.
    Today, we have two important programs to hear from--the Office of 
Environmental Management and the Office of Civilian Radioactive Waste 
Management.
    The Radioactive Waste office has the immediate task of submitting a 
license for the Yucca Mountain waste repository to the Nuclear 
Regulatory Commission by June, 2008.
    The Environmental Management (EM) office has the immediate and 
long-term task of cleaning up the contamination from nuclear weapon 
facilities that date back to World War II.
    It is clear the proposed budget for the EM program is inadequate.
    The EM program has recognized the shortfall in requested funding 
and has proposed to focus fiscal year 2008 cleanup on the highest risk 
activities across the complex. This is obviously wise.
    But I'm concerned by the budget's implied premise that it is okay 
to delay addressing lower risk activities.
    It is very clear that this budget will lead to missed milestones 
set out in cleanup agreements with the States. In fact, the Department 
is already stating it intends to work with the States to modify these 
cleanup agreements.
    I find it unfortunate that the administration proposes to modify 
cleanup agreements based purely upon lack of funding.
    Nuclear waste cleanup is difficult work involving some of the most 
dangerous materials on earth. We all understand that difficulties arise 
in this type of work that leads to missed milestones.
    But, as I understand it, the States are often understanding in 
these circumstances and have agreed to make changes to the agreements 
when legitimate obstacles to cleanup have arisen.
    It seems too much to ask that States agree to milestone changes 
simply because the Federal Government proposes to short-change such an 
important program.
    I'm also concerned by a fiscal year 2008 budget document statement 
that says the life-cycle cost of the EM program is estimated to have 
increased by $50 billion.
    We need a better explanation for this estimated cost increase and 
what the Department is doing to reverse this escalation.
    The Department of Energy's own website has a section on the history 
of the EM program and its origins in the weapons programs that produced 
the contamination. The website notes that scientists in the weapons 
program early on advised that the resulting waste stream presented 
grave problems.
    DOE's website then notes, ``The imperatives of the nuclear arms 
race, however, demanded that weapons production and testing be given 
priority over waste management and the control of environmental 
contamination.''
    This historical observation about the Cold War period still seems 
applicable today.
    The Department's budget proposes some big increases in a few 
programs, but proposes severe decreases for Environmental Management.
    I'm concerned that we are again prioritizing other activities while 
not fully recognizing the risk of nuclear waste contamination or our 
obligation to cleanup.
    This subcommittee has members with a keen interest in seeing the 
Federal Government live up to its responsibility at these waste sites. 
I look forward to working with them toward this goal.

    Senator Dorgan. Mr. Rispoli, if you will please present 
your testimony, we will include your entire testimony as part 
of the record and you may summarize.

                   STATEMENT OF HON. JAMES A. RISPOLI

    Mr. Rispoli. Thank you, Mr. Chairman. Good afternoon, 
Chairman Dorgan, and I look forward to seeing other members of 
the subcommittee, I am sure. I am happy to be here today to 
answer your questions on the fiscal year 2008 budget request 
for the Environmental Management program. I would like to thank 
you and your subcommittee for your support in this program.
    As you know, the EM program has solved a number of cleanup 
challenges, including Rocky Flats, Fernald, and other major 
facilities that process significant amounts of plutonium and 
uranium and at one time presented challenges that seemed 
unanswerable. We are making progress on many other complex 
challenges that the program still faces. EM has been able to 
achieve notable results by addressing these challenges through 
risk reduction and prioritization and judicious use of the 
resources that you entrust to us on behalf of the American 
people.
    I realize that maybe we will not get the full benefit of 
this, but I would like to just quickly run through just some of 
the posters here that give you the idea of the before and after 
of what we have accomplished, some of the sites that we have 
closed literally just in the past year and a half. So I would 
like to start with the Rocky Flats poster. You can see the 
before and after, a significant cleanup effort, 3.6 million 
square feet of buildings demolished; the site will become a 
wildlife refuge.



    The next poster is Fernald in Ohio. It is not much of a 
smaller site. Secretary Bodman and I were there with the 
Administrator of the EPA just last month to celebrate the 
closure of Fernald as well as other Ohio sites, and we will 
have a couple of shots of those as well. This will also become 
parkland, wetlands, prairie. You will notice on the right-hand 
side of the after that there actually is a 75-acre on-site 
disposal cell.



    The next two are Columbus and Ashtabula, Ohio. We 
celebrated those at the same ceremony. Columbus is a Battelle 
Memorial Institute property. It is about 31 acres and it is now 
available for reuse by the owner. The Ashtabula project is a 
similar privately owned property, 42 acres, also available for 
reuse by the owner.




    The next shot is Miamisburg, Ohio. Miamisburg also 
processed nuclear materials. In the case of Miamisburg you will 
notice there are three significant buildings still there that 
can be spotted in the before shot, and that is because this 
particular site is being taken over by a community reuse 
organization and the site will be put to a constructive reuse.


    Some ongoing projects at other places: Oak Ridge, for 
example, where we have a very large, significant EM site, but 
at Oak Ridge, this is a picture of the Melton Valley before and 
after, where we removed 600,000 tons of rock and millions of 
cubic yards of soil that was contaminated.



    At Savannah River, recently I went to the T Area 
celebration, where we demolished 28 facilities and took care of 
problems immediately adjacent to the Savannah River. 


    We have a picture here next of a truck pulling into the 
Waste Isolation Pilot Plant in New Mexico with the first 
remote-handed transuranic waste shipment. We have since 
accomplished five shipments. This is very recent, within the 
past month. We have since completed five shipments of 
transuranic waste from the Idaho facility to the Waste 
Isolation Pilot Plant after getting--obtaining, with the help 
of the regulator in the State of New Mexico and the EPA, the 
permits that we needed to be able to do this, a very 
significant accomplishment for us.


    I would like to show you a shot of a troubled project. This 
is the K Basins at Hanford. It has been a very, very difficult 
and challenging project. Spent nuclear fuel on the left below 
22 feet of water, that we had to retrieve and then deal with 
all of the disintegrated pieces that derived from that fuel, 
again through 22 feet of water, with workers working with 
manipulators straight down through that to maneuver and pick up 
the pieces. You can see pictures of them in the center as well 
as on the right side of the cleanup as it was completed.


    This is important. These basins are very close to the 
Columbia River and it is important to us to get these emptied 
out so that we can get on with ensuring that there is no 
contamination to the river from those.
    The Idaho poster shows a very significant event. The 
Department had statutory authority to, after waste was removed 
from tanks, to close the tanks by grouting them with only de 
minimis material left in the tanks. It is a relatively new 
statutory authority, section 3116 of the 2005 National Defense 
Authorization Act, and this was the first application of that 
authority, at Idaho during the week of Thanksgiving, 2006.


    These cleanup successes were accomplished by the 
collaboration of DOE, the Congress, the States, and the 
national regulatory agencies, Indian nations, and communities, 
focusing on a common vision. All these completions and 
accomplishments should be recognized as results derived from 
partnerships that were founded on mutual respect and 
collaboration.
    The task before us is very complex. We face challenges of 
having to develop and deploy new technologies as we proceed. We 
recognize our regulatory commitments and must focus on our 
urgent risks. At the same time, we are improving our management 
performance and incorporating new project scope, and in many of 
the projects we discover that the contamination is far greater 
than we had anticipated. But despite all of these, we are 
resulting and achieving progress.
    First and foremost, safety is our top priority. We will 
continue to maintain and demand the highest safety performance. 
We believe that every one of our workers deserves to go home as 
healthy as he or she was when they came to work in the morning.
    One of my goals as Assistant Secretary is that at least 90 
percent of our portfolio will meet or beat our cost and 
schedule targets. Over the past year, we have personally 
conducted quarterly performance reviews of all of our projects 
with our leadership team. I can tell you today that we have 
shown measurable improvement, but we have yet to realize the 
full potential of implementing our management systems. So we 
will renew our emphasis on applying these principles as we go 
forward. We have not yet attained the appropriate skills mix to 
most effectively implement our procurement and project 
execution strategies, so we are in the process of strengthening 
those capabilities.
    Based on the results we are already seeing, I am optimistic 
that we can fulfill these multi-year objectives to be a truly 
high-performing organization.
    As Secretary Bodman stated yesterday before the House 
Appropriations Energy and Water Development Subcommittee, the 
Federal Government has an obligation to address the 
environmental legacy of nuclear weapons production. Our request 
of $5.655 billion consists of three appropriations: defense 
environmental cleanup, non-defense environmental cleanup, and 
the Uranium Enrichment Decontamination and Decommissioning 
Fund.
    In keeping with the principles of reducing risk and 
environmental liabilities, our 2008 request will support the 
following priority activities. First is stabilizing radioactive 
tank wastes in preparation for treatment. This is about 31 
percent of our request. We consider it to be the most clear and 
imminent risk that we address in our program. Storing and 
safeguarding nuclear materials and spent nuclear fuel, which is 
about 17 percent of our request. Dispositioning transuranic 
low-level and other solid waste, about 16 percent of our 
request; and remediating major areas at our sites and 
decontaminating and decommissioning excess facilities, which is 
about 26 percent of our request. Examples of milestones and 
planned activities by site-specific categories can be found in 
my formal statement, Mr. Chairman, that I request be accepted 
for the record.
    This budget requests and reflects difficult decisions to 
focus funding on activities we have identified to reduce the 
highest risks we face. Some of these funding decisions are not 
driven by existing compliance agreements. Therefore, this 
budget request does not cover some of the lower risk-reducing 
activities required under existing compliance agreements.

                           PREPARED STATEMENT

    Mr. Chairman and members of the subcommittee, let me assure 
you that we will continue to work with this subcommittee and 
our regulators in implementing our risk reduction approach, 
using the resources you provide to ensure the best possible 
protection for the public. Challenges lie ahead, but we are 
focused on our objectives--safety, performance, cleanup, and 
closure. I look forward to continuing to work with this 
subcommittee and the Congress to address your concerns and 
interests, and I would be pleased to answer your questions 
during the hearing. Thank you, sir.
    [The statement follows:]

              Prepared Statement of Hon. James A. Rispoli

    Good morning, Chairman Dorgan and members of the subcommittee. I am 
pleased to be here today to answer your questions on the President's 
fiscal year 2008 budget request for the Department of Energy's 
Environmental Management (EM) program. I want to thank the subcommittee 
for support of the EM program.
    The EM mission was undertaken to address the safe and successful 
cleanup of the Cold War legacy brought about from five decades of 
nuclear weapons development and government-sponsored nuclear energy 
research. This mission, as I pointed out last year, is both inherently 
challenging and innately beneficial to the American people. As this 
committee knows the EM program has solved several cleanup challenges, 
including Rocky Flats and Fernald, that at one time seemed 
unanswerable. We are also making progress on the many other complex 
challenges that the program still faces. Since I last appeared before 
this committee, EM has been able to achieve notable results by 
addressing these challenges through a risk reduction and prioritization 
strategy and a judicious use of the resources that Congress entrusts to 
us. EM is implementing this prioritized, risk reduction strategy 
supported by the crucial tenets of safety, performance, cleanup, and 
closure.
    The President's fiscal year 2008 budget request will allow this 
prioritized work on these important cleanup and closure projects to 
continue across the complex. For the EM program, the President's budget 
request for fiscal year 2008 is $5.66 billion. We've been able to 
achieve a decrease of $173 million from the fiscal year 2007 request by 
employing a thoughtful balance of reducing risk and completing cleanup 
for the EM program. Nearly half of our budget request will go towards 
our highest risks activities in stabilizing tank waste, nuclear 
materials, and spent nuclear fuel, and another quarter is going to 
clean up contaminated soil, groundwater, and unused facilities. With 
this request, we are continuing on our strategic course to address high 
priority-tank waste treatment and radioactive waste disposition while 
preserving our site completion and closure drive.
    With this budget request, the Defense Waste Processing Facility at 
Savannah River Site (SRS), the Advanced Mixed Waste Treatment Facility 
at Idaho National Laboratory (INL), and the Toxic Substance Control Act 
Incinerator at Oak Ridge Reservation (ORR) will continue to operate, 
along with the initiation of operations at the Depleted Uranium 
Hexafluoride (DUF6) conversion facilities in both Ohio and 
Kentucky. Design and construction will continue at the Waste Treatment 
Plant at Hanford, the Sodium-Bearing Waste Treatment Plant at INL, and 
the Salt Waste Processing Facility at SRS. Tank farm operations will 
continue at Hanford, INL, and SRS along with spent nuclear fuel 
receipt, storage, and cleanup.
    At the SRS, this request will support ongoing nuclear material 
processing in H-Canyon and plutonium vitrification design to support 
ultimate disposition. At Hanford, it supports consolidation of 
plutonium and unirradiated category 1 and 2 nuclear fuel to an off-site 
location, pending a consolidation decision. Consolidation of enriched 
uranium from INL to an off-site location, and design and long-lead 
procurement for the U-233 disposition project at Oak Ridge Reservation 
is also supported in this request.
    This request enables transuranic (TRU) waste projects to continue 
with priority for INL and Los Alamos National Laboratory (LANL) TRU 
waste. Other contact and remote-handled TRU shipments to the Waste 
Isolation Pilot Plant (WIPP) are also supported. Low-level radioactive 
waste and mixed low-level radioactive waste activities will be 
supported at Hanford, Nevada Test Site (NTS), INL, SRS, and ORR.
    The request will allow high-priority waste retrieval, soil and 
groundwater remediation, and decontamination and decommissioning (D&D) 
of excess facilities at Hanford, INL, SRS, ORR, Portsmouth, Paducah, 
LANL, and other sites. In addition, the request supports targeted 
technology development and deployment in support of high-level waste, 
soil and groundwater, and facility D&D.
    With this budget request, EM will achieve our goals for risk 
reduction and cleanup completion at:
  --Lawrence Livermore National Laboratory-Site 300, California;
  --Inhalation Toxicology Laboratory, New Mexico;
  --Pantex Plant, Texas;
  --Sandia National Laboratory, New Mexico; and,
  --Argonne National Laboratory-East, Illinois.
    As cleanup work is completed at sites with continuing missions, EM 
will transfer long-term surveillance and monitoring activities to the 
cognizant program office or, for those sites without a continuing 
mission, to the Office of Legacy Management.
    The fiscal year 2008 budget request will allow the EM cleanup 
program to reduce risk, honor commitments and produce results worthy of 
the investment of the American people. We are committed to ensuring 
strong management of this complex cleanup work to secure safe and 
efficient progress that protects the public, our workers, and the 
environment. We have shown we can deliver meaningful results. Your 
continued support will allow us to deliver results important for today, 
as well as for generations to come.

                         RISK REDUCTION RESULTS

    The results being delivered by the EM program's risk reduction and 
prioritization strategy are proving that linking safety, performance, 
cleanup, and closure can lead to significant outcomes. We are 
communicating and discussing our challenges with our State and Federal 
regulators, Congress, the communities, and other interested parties. We 
believe that reasonable solutions are best found through open 
interaction with all interested parties. Recently, we celebrated 
another success at the completion ceremonies for the Fernald, Ashtabula 
and Columbus sites. Cleanup successes achieved with the assistance of 
representatives from Congress, the State and national regulatory 
agencies, and the communities, collaborating and focusing on a common 
vision. It is the latest demonstration of our progress following the 
earlier completion of cleanup at Rocky Flats in Colorado, the Kansas 
City Plant in Missouri, and the Lawrence Livermore National Laboratory-
Main Site in California. All these completions should be recognized as 
results that have been borne from partnerships founded on mutual 
respect and collaboration.
    EM has also made other significant progress:
  --Stabilizing and packaging for disposition all plutonium residues, 
        metals, and oxides (SRS and Hanford);
  --Producing well over 2,000 cans of vitrified high-level waste from 
        radioactive tank liquid wastes (SRS and the West Valley 
        Demonstration Project);
  --Retrieving and packaging for disposal over 2,100 metric tons of 
        spent nuclear fuel from the K-Basins on the Hanford site to 
        protect the Columbia River;
  --Characterizing, certifying, and shipping close to 37,000 cubic 
        meters of TRU waste from numerous sites to WIPP for permanent 
        disposal;
  --Disposing of more than 965,000 cubic meters of legacy low-level 
        waste and mixed low-level waste (contaminated with hazardous 
        chemicals); and
  --Eliminating 11 out of the 13 high-risk material access areas 
        through material consolidation and cleanup.
    In addition, on a site-specific level, we have:
  --Initiated pre-conceptual design of the Plutonium Disposition 
        Facility at SRS;
  --Completed disposal at WIPP of all legacy drummed TRU waste from 
        SRS;
  --Completed demolition of the 232-Z facility at Hanford;
  --Completed clean up at the Melton Valley area and the D&D of three 
        gaseous diffusion buildings at the ORR (K-29, 31 and 33) at 
        ORR;
  --Disposed of over 8,500 tons of scrap metal from the Portsmouth 
        site; and
  --Completed the first remote-handled TRU waste shipments to the WIPP 
        from INL.

                         SOLVING THE CHALLENGES

    The task before us is extremely complex. We sometimes face the 
challenge of having to engineer new approaches or invent new 
technologies as we proceed. Technologies were not available or 
sufficiently effective, our regulatory environment has continued to 
change, performance issues have hindered progress, new scope has been 
added to our program, and greater than anticipated contamination has 
been found for some existing cleanup. But ingenuity and hard work are 
resulting in progress.
    DOE is committed to resolve this cleanup in partnership with our 
stakeholders and regulators. The consequences of inaction pose 
unacceptable risks to our environment and the public.
    In continuing to address these challenges, EM is focusing its 
cleanup efforts on the reduction of high risk issues to most 
efficiently invest the department's fiscal year 2008 funding request. 
We intend to overcome these challenges in collaboration with our 
partners, dealing openly with any impacts to previously predicted cost, 
schedule and performance. I want to assure you that we will meet these 
challenges with the energy and dedication that have demonstrated our 
steadfastness to our mission and our commitment to the public.
    First and foremost, safety is our top priority. We will continue to 
maintain and demand the highest safety performance. We have taken 
measures to fully integrate safety into our project designs at an 
earlier stage while assuring our line project teams have the necessary 
experience, expertise, and training. Every worker deserves to go home 
as healthy as she or he was when they came to work in the morning. 
Safety will remain a cornerstone in the execution of our mission 
objectives.
    We are actively engaged, both within the department and externally 
with our regulators and stakeholders, in identifying issues that impact 
our mission objectives. We have been challenged by lower than expected 
performance levels, increased scope, and unrealized planning 
assumptions. As we identify issues that could affect future performance 
and regulatory commitments, we are taking significant steps to improve 
our operations in planning and executing our work. We are applying 
lessons learned to help prevent future occurrences that will impact our 
planning and commitments.
    One of my goals as Assistant Secretary is that at least 90 percent 
of our ``projectized'' portfolio will meet or exceed our cost and 
schedule targets. We have begun the process of integrating our 
management tools into our business processes. Over the past year, I 
have personally conducted Quarterly Performance Reviews of all EM 
projects with our leadership team. I report to you that we have showed 
progress but we have yet to realize the full potential of implementing 
our management systems and better applying risk management principles--
that is, identifying project uncertainties and developing mitigation 
measures. Some of our projects have fallen short of expected 
performance, but we are engaging our field management contractors with 
state-of-the-practice project management methods.
    Over the last year, it has become apparent that we have not yet 
attained our full potential in our procurement and execution of 
projects. We have instituted measures to strengthen our emphasis on 
program execution. This multi-year objective already is producing 
results that should provide more effective management in the future. 
This initiative is being coupled with additional training for Federal 
managers and staff to enhance project management and acquisition 
skills. This integrated approach will deliver dividends for our 
managers in the long term.
    We are improving our ability to ensure that proper procurement 
vehicles are available to meet our acquisition strategies. We are 
taking a new look at contract types and fee structures within our 
contracts. EM must acquire the best services including those of small 
business, to meet our business objectives and to become a top-
performing organization.
    I have asked my senior leadership at Headquarters and in the field 
to take immediate actions to ensure that everyday operating processes 
reflect lessons learned. Lastly, in conjunction with the National 
Academy of Public Administration, EM has undertaken a review of our 
organization and its associated functions and authorities. To date, the 
process has identified areas for improvement, along with some 
refinements of our organizational alignment. During the next few 
months, EM will be implementing the resulting recommendations to ensure 
we have an organizational structure that will enhance our ability to 
respond to the needs of the mission.

                  THE FISCAL YEAR 2008 BUDGET REQUEST

    The department's fiscal year 2008 budget request for defense EM 
activities totals $5,655 million. The request consists of three 
appropriations, Defense Environmental Cleanup, Non-Defense 
Environmental Cleanup, and the Uranium Enrichment Decontamination and 
Decommissioning Fund.
    The fiscal year 2008 budget request reflects safety as its utmost 
priority. The Office of Environmental Management is committed to our 
safety principles and to maintaining the highest safety performance to 
protect the workers, the public and the environment.
    The budget request reflects prioritizing program work to balance 
the goals of risk reduction; completing ongoing work to achieve 
completion at four sites; and, meeting our environmental commitments. 
For fiscal year 2008, EM's funding priorities are listed in order of 
risk, to best address our cleanup challenges:
  --Requisite safety, security, and services across EM cleanup sites;
  --Radioactive tank waste storage, treatment, and disposal;
  --Spent nuclear fuel storage, receipt, and remediation;
  --Solid waste (transuranic, low-level, and mixed low-level wastes) 
        treatment, storage, and disposal;
  --Special nuclear materials storage, processing, and disposition;
  --Soil and groundwater remediation; and
  --D&D of contaminated facilities.
    Examples of milestones and planned activities for fiscal year 2008 
by site-specific categories are:
Hanford
            Richland
    Consolidate, package, and remove of spent nuclear fuel and other 
radioactively-contaminated elements within the K Basins (K-East and K-
West).--The K Basins project is a high priority, risk reduction 
activity due to its close proximity to the Columbia River. The goal of 
this project is removal of all spent nuclear fuel, radioactive sludge, 
contaminated K Basin water, and radioactive debris from the K Basins. 
The endpoint of the K Basins cleanup will mean the removal of more than 
55 million curies of radioactivity that pose a threat of leakage to the 
surrounding environment, including the Columbia River.
    Amplify River Corridor remediation activities for Reactor Areas D, 
F, and H.--The River Corridor Closure Project will complete remediation 
of contaminated waste sites; the D&D and demolition of facilities that 
are adjacent to the Columbia River; and placement of eight reactors 
into an interim safe storage condition. The work performed within the 
River Corridor Closure Project includes digging up contaminated soil, 
constructing interim safe storage (cocooning) of the reactors, 
demolishing facilities in the old reactor complexes and facilities in 
the 300 Area, disposing of waste in the Environmental Restoration 
Disposal Facility, and constructing surface barriers or caps over 
contaminated sites.
    Continue retrieval of contact handled suspect transuranic waste and 
scheduled shipments to WIPP.--The Hanford Site contains thousands of 
containers of suspect transuranic waste, low-level, and mixed low-level 
wastes. The end point of this project will include the retrieval of 
contact-handled suspect transuranic waste in the low-level burial 
grounds, the treatment of mixed low-level waste, the disposal of low-
level waste, and certification and shipment of transuranic waste to 
WIPP.
    Continues on track groundwater/vadose zone remediation 
activities.--Due to 40 years of vast weapon production processes, 
Hanford's groundwater has been contaminated with carbon tetrachloride, 
chromium, technetium 99, strontium, and uranium plumes. EM is dedicated 
to preventing the potential for contaminates reaching the groundwater 
by: decommissioning an additional 100 unused groundwater wells; 
monitoring 700-plus wells for contaminants of concern above drinking 
water standards; and, commencing design of final remediation actions to 
address carbon tetrachloride and technetium plumes.
            Office of River Protection
    Sustain tank farm closure processes and maintain the tanks in a 
safe and compliant condition.--The radioactive waste stored in Hanford 
tank farms has been accumulating since 1944. Due to the age of the 
tanks, a number have leaked in the past into surrounding soil and 
groundwater. In order to reduce the risk of future tank leaks into the 
environment, the overall objectives of this project include the 
stabilization of radioactive waste stored underground in tanks, 
including retrieval, treatment, disposal, and closure of the 
facilities.
    Progress on path forward for the Waste Treatment and Immobilization 
Plant.--The Waste Treatment and Immobilization Plant (WTP) is critical 
to the completion of the Hanford tank waste program by providing the 
primary facility to immobilize (vitrify) the radioactive tank waste at 
the Hanford Site. The WTP complex includes five facilities: the 
Pretreatment Facility, the High-Level Waste Facility, the Low-Activity 
Waste Facility, the Balance of Facilities, and the Analytical 
Laboratory. In fiscal year 2008, the WTP project team plans to 
complete: close-in of the annex building in the Low-Activity Waste 
Facility; installation of roofing and completion of the building shell 
for the Analytical Laboratory; construction of the water treatment 
building in the Balance of Facilities; and renewal of construction for 
the High-Level Waste Facility and the Pretreatment Facility.
Idaho
    Transfer spent nuclear fuel from wet to secure dry storage.--
Promote the safe and secure receipt, dry storage, and packaging and 
future transfer of the spent nuclear fuel to a Federal geologic 
repository.
    Continue shipments of transuranic waste to the WIPP.--Maintain 
program activities that support waste characterization, packaging, and 
transportation of remote-handled transuranic waste to WIPP that lead to 
reduced surveillance and operation costs.
    Pursue ongoing sodium-bearing waste treatment facility 
construction, including efforts to gain necessary regulatory approvals 
for sodium bearing waste treatment and disposal.--The overall objective 
of this project is treatment and disposal of the sodium-bearing tank 
wastes, closure of the tank farm tanks, and performance of initial tank 
soils remediation work. Construction and operation of the sodium-
bearing waste facility will reduce potential risk to human health and 
the environment by preventing the potential migration of contamination 
into the Snake River Plain Aquifer, which is a sole-source aquifer for 
the people of Southeastern Idaho.
Los Alamos National Laboratory
    Characterize, certify, and ship above-grade transuranic waste 
inventory.--The Solid Waste Stabilization and Disposition Project 
includes the treatment, storage, and disposal of legacy transuranic and 
mixed low-level waste generated between 1970 and 1999 at LANL. Final 
disposal of the legacy transuranic waste from LANL will reduce risk to 
workers, as well as reduce security costs associated with transuranic 
waste.
    Promote soil and water remediation and monitoring.--The LANL Soil 
and Water Remediation Project's objective is to identify, investigate 
and remediate, when necessary, areas with chemical and/or radiological 
contamination attributable to past Laboratory operations.
    In fiscal year 2008, in order to fulfill the objective of 
protecting and monitoring the regional aquifer, as well as long-term 
surveillance and monitoring to provide necessary safeguards and 
protection for surface and ground waters, the following activities are 
planned:
  --Perform groundwater monitoring at all major watersheds: LA/Pueblo; 
        Mortandad; Canon de Valle; Sandia; and in close proximity to 
        the major waste sites;
  --Conduct stormwater sampling and implement erosion control measures;
  --nstall and monitor four wells in Pajarito and Bayo canyons; and
  --Complete construction of 260 Outfall Corrective Measures for 
        alluvial and surface water treatment system.
Oak Ridge
    Continue design of U-233 down-blending project and begin Building 
3019 modifications.--Down-blending the Building 3019 inventory for 
disposition is in accordance with the national non-proliferation goals 
by making the U-233 material unsuitable for use in weapons and reducing 
security costs at the Oak Ridge National Laboratory.
    Ship contact-handled transuranic waste to WIPP.--Process 250 cubic 
meters of contact-handled transuranic debris and 170 cubic meters of 
remote-handled transuranic debris with shipments to the WIPP; and 
continue to dispose of low-level/mixed low-level waste at the NTS.
    Complete the Molten Salt Reactor Experiment fuel salt removal 
remediation project.--Upon completion of active remediation, 
surveillance and maintenance activities of the Molten Salt Reactor 
Experiment facility will be provided until decontamination and 
decommissioning of the site has occurred.
    Decontaminate and decommission building K-25 and K-27, including 
completing demolition of the K-25 west wing.--Surveillance and 
maintenance of the K-25 and K-27 buildings will be continued in order 
to maintain safe conditions. Demolition of K-25 east wing and K-27 will 
occur after the decontamination and decommissioning process.
Paducah
    Complete construction and startup of the deleted uranium 
hexafluoride conversion facility (DUF6).--The Paducah 
DUF6 conversion facility is scheduled to begin operation in 
fiscal year 2008. The DUF6 conversion facility will convert 
depleted uranium hexafluoride into a more stable form, depleted uranium 
oxide, which is suitable for reuse or disposition. The depleted uranium 
oxide will be sent to a disposal facility, the hydrogen fluoride by-
products will be sold on the commercial market, and the empty cylinders 
will be sent to disposal or reused.
    Store, treat, and dispose of legacy waste and newly generated 
waste.--The Paducah Gaseous Diffusion Plant is responsible for some 
waste streams generated by the United States Enrichment Corporation's 
operation of the Plant. In fiscal year 2008, we plan to complete 
expansion of five new sections of on-site landfill for non-hazardous 
waste disposal; perform ongoing characterization, packaging, treatment 
and disposal of 50 cubic meters of newly generated waste (mixed and 
low-level); and complete legacy low-level waste characterization, 
packaging, and disposal. The continued shipment and disposal of the 
waste will reduce potential for release into the environment from aging 
containers.
Portsmouth
    Finalize construction and startup of the uranium hexafluoride 
conversion facility.--The Portsmouth DUF6 conversion 
facility is scheduled to begin operation in fiscal year 2008. Like the 
Paducah facility, the DUF6 conversion facility will convert 
depleted uranium hexafluoride into a more stable form, depleted uranium 
oxide, suitable for reuse or disposition.
    Store, characterize, treat, and dispose of legacy waste generated 
by activities at the Portsmouth Gaseous Diffusion Plant.--We will 
continue to characterize, treat, and dispose of any newly generated 
waste; develop the management and disposal of low-level waste 
associated with 438 converter shells in storage with potentially 
classified waste; disposition of excess site equipment (vehicles, 
scrap, etc.) and disposition of poly bottle solutions which contain 
liquids with high fissile material and are required to be treated prior 
to disposal.
    Continue transition activities from cold shutdown mode to 
decommissioning.--In fiscal year 2008, there is an increase in funding 
to support the transition of the Gaseous Diffusion Plant from a cold 
shutdown to decontamination and decommissioning. Activities include: 
conducting environmental monitoring and reporting for groundwater, 
surface water, sediment, biological, vegetation, and associated sample 
collection; performing enhanced uranium deposit mitigation measures for 
criticality concerns in the process buildings to eliminate near-term 
safety issues; and initiating soil and groundwater investigation and/or 
remediation underneath approximately 140 buildings.
Savannah River Site
    Consolidate on-site Plutonium to K Area.--In order to meet the 
Department's Design Basis Threat criteria, plutonium at SRS is being 
consolidated into one Category 1 Special Nuclear Materials Storage 
Facility. The receipt, storage, and disposition of these special 
nuclear materials at the SRS allows for de-inventory and shutdown of 
other DOE complex sites, while providing substantial risk reduction and 
significant mortgage reduction savings to the Department.
    Ship all legacy transuranic waste to WIPP and treat low-level waste 
and mixed low-level waste.--In fiscal year 2008, SRS plans to dispose 
of transuranic waste previously characterized as mixed low-level waste; 
dispose of low-level waste and newly generated waste, including soil, 
groundwater and decontamination and decommissioning wastes; dispose of 
mixed low-level waste inventory and newly generated waste; and dispose 
of hazardous waste inventories, thus reducing potential exposure to 
project workers.
    The end-state for this project is the shipment of all legacy 
transuranic waste to the WIPP, the treatment of PUREX waste, and the 
elimination of all legacy inventories and disposition of newly 
generated low-level waste, mixed low-level waste, and hazardous waste.
    Continue groundwater corrective actions across the Site.--The SRS 
is working to prevent the spread of contamination into adjoining 
groundwater aquifers and nearby surface waters. Existing contamination 
in vadose zones, groundwater and surface water/sediments are currently 
being cleaned up, thereby reducing the risk to site workers, the public 
and the environment.
    Treat, stabilize, and dispose legacy radioactive waste stored in 
underground storage tanks.--The continuation of the design and 
construction of the Salt Waste Processing Facility will aid the Defense 
Waste Processing Facility in the process of safely disposing of the 
liquid tank wastes. The Salt Waste Processing Facility will separate 
the high-activity fraction from the low-activity fraction of the salt 
waste stored in the underground tanks at the SRS. The completion of the 
Salt Waste Processing Facility will support the mission of SRS in 
meeting its Federal Facilities Agreement commitments for waste tank 
disposition.
Waste Isolation Pilot Plant
    Operate the WIPP in a safe manner to support disposal capabilities 
for transuranic waste.--The WIPP in Carlsbad, New Mexico, is the 
nation's only mined geologic repository for the permanent disposal of 
defense-generated transuranic waste. All of the defense-generated 
transuranic waste from eligible generator sites must come to WIPP for 
receipt, handling, and disposal.

                               CONCLUSION

    The fiscal year 2008 budget request enables risk reduction to 
continue. Challenges lie ahead but we are focused on our objectives and 
our strategy. Safety, performance, cleanup, and closure underpin our 
actions and initiatives. We are committed to work with all interested 
parties to resolve issues. We look forward to continuing to work with 
this subcommittee and the Congress to address your concerns and 
interests. Our success relies on our effective partnerships with our 
regulators, the communities, and our contractors to produce progress in 
accomplishing meaningful results for the American public.
    I look forward to a continuing dialog with you and the 
subcommittee. This concludes my formal statement for the record. I will 
be pleased to answer any questions at this time.

    Senator Dorgan. Mr. Rispoli, thank you very much.
    We will hear from Mr. Sproat and then ask questions. But we 
have been joined by the ranking member, former chairman of this 
subcommittee, Senator Domenici. Senator Domenici, welcome.

             OPENING STATEMENT OF SENATOR PETE V. DOMENICI

    Senator Domenici. Thank you very much, Mr. Chairman. I am 
pleased to say a few words and thank you for that.
    First, thanks to the witnesses for coming. I look forward 
to working with you as we put together this balanced bill for 
fiscal year 2008. I am glad that you are starting out this way, 
which would indicate to me that you want to get a bill; you do 
not want to go through what we did last year, with no bill.
    I look forward to addressing many important issues 
revolving around research programs that can have a real impact 
on our energy security and will support cutting edge scientific 
research. We will also face a number of challenging issues, 
such as Katrina recovery and environmental cleanup. I 
appreciate your willingness, Mr. Chairman, to visit New Mexico 
to tour our great labs and hear from the people who have 
devoted their professional careers to supporting our Nation's 
security and nuclear deterrent. You did that with me and I am 
most appreciative and will not forget that.
    Mr. Chairman, you have also selected a great staff. Doug 
Clapp and Franz Wuerfmannsdobler are exceptional and will serve 
the subcommittee well. Along with my two veteran people, I 
think we have a good team. Roger Cockrell is the best guy in 
town and you kept him on water projects and he will serve us 
well, Democrat and Republican.
    I noted earlier that there are many challenging matters. 
Two of those issues are the topic of the hearing today, Yucca 
Mountain and environmental cleanup. Yucca Mountain, the budget 
provides $494 million and makes the development and submission 
of the license application to the Nuclear Regulatory Commission 
(NRC) in 2008 a top priority.
    I am going to skip through the Yucca, assuming that you 
have covered most of it, and go to the matter that is haunting 
the laboratory at Los Alamos with reference to cleanup. I think 
you know there is a big problem there. But I would say with 
reference to Yucca just one thing. Last year Senator Reid and I 
developed legislation to address the potential that waste might 
remain on site well past 2017, opening date for Yucca Mountain. 
As Mr. Sproat pointed out in the written testimony, at the 
Federal Government legal liability increases by $500 million 
annually each year Yucca Mountain is delayed. Is that correct?
    Mr. Sproat. That is correct.
    Senator Domenici. I will continue to work with the majority 
leader and the chairman to see if we can find an acceptable 
compromise that will reduce our legal liability in the near 
future. I hope you can think about that and work with us on 
that. That is a lot of money going right out the window for 
nothing.
    Mr. Sproat. Yes, sir.
    Senator Domenici. The budget provides for environmental 
management at $5.6 billion for defense and non-defense. The 
budget is in steady decline from the fiscal year 2006 level 
that was a record at $7.3 billion. This is a reduction of 
nearly 25 percent. You have got a real job.
    In particular, I am concerned at what this will mean to Los 
Alamos. Just 2 years ago the Department entered into a consent 
agreement, Mr. Chairman, with Los Alamos and the State to clean 
this up by 2015. That is a very important document and a very 
important commitment. Unfortunately, the budget requests for 
the past 2 years have been wildly inconsistent and insufficient 
to deliver on the agreed-upon cleanup milestones.
    I have spoken with Secretary Bodman regarding my 
frustration with the lack of funding consistency and I believe 
the Department needs to set a budget baseline that matches our 
cleanup goals and then deliver on these commitments, not 1 year 
but multiple years. We simply cannot continue to make 
environmental management the bill payer for every new important 
R&D program.

                           PREPARED STATEMENT

    I also realize that I need to make this appeal directly to 
OMB. I will do that, which has held the Department's budget 
flat. But when you have a consent agreement it would seem to me 
that you have got to pay for it. I understand the Secretary 
will go to New Mexico and try to work out something that is 
more doable, but yet over 12 or 15 years will do the job. We 
will all be interested in whether that works.
    Thank you, Mr. Chairman.
    [The statement follows:]

             Prepared Statement of Senator Pete V. Domenici

    Mr. Chairman, I would like to welcome you to your first budget 
hearing as chairman of the Energy and Water Subcommittee. I look 
forward to working with you as we put together a balanced bill for 
fiscal year 2008.
    I look forward to addressing many important research programs that 
can have a real impact on our energy security and will support cutting 
edge scientific research. We will also face a number of challenging 
issues, such as the Katrina recovery and environmental cleanup.
    I appreciate your willingness to visit New Mexico to tour one of 
our great labs and hear from the people who have devoted their 
professional careers to supporting our Nation's security and nuclear 
deterrent.
    It means a lot to me that you would make your first laboratory 
visit in New Mexico.
    Mr. Chairman, you have also selected great staff--Doug and Franz 
are exceptional and will serve the subcommittee well. We will also 
continue to share the services of Roger Cockrell--the best water guy in 
town.
    Mr. Chairman, as I noted earlier there are many challenging policy 
matters facing this subcommittee. Two of those issues are the topic of 
this hearing today--Yucca Mountain and environmental cleanup.

                             YUCCA MOUNTAIN

    This budget provides $494 million and makes the development and 
submission of the license application to the NRC in 2008 a top 
priority.
    I believe that the Secretary recognizes the importance of ensuring 
that the license is of the highest quality and can be vigorously 
defended in 2008.
    The Department has taken a new approach to standardizing the 
canisters used to package and ship spent nuclear fuel to the repository 
for storage. I am interested in this approach, but want to make sure 
this solution will cut costs.
    I know the Department is very serious about completing Yucca 
Mountain by 2017; but the Congress still must pass authorizing 
legislation in order for Yucca Mountain to stay on even this new 
schedule. Although, I will assist in anyway I can in moving this 
legislation, I am not confident that this language will pass without 
significant changes, if at all.
    Last year, Senator Reid and I developed legislation to address the 
potential that waste might remain on site well past the proposed 2017 
opening date for Yucca Mountain. As Mr. Sproat pointed out in his 
written testimony that the Federal Government's legal liability 
increases by $500 million annually each year Yucca Mountain is delayed.
    I will continue to work with both the majority leader and Chairman 
Dorgan to see if there is an acceptable compromise that will reduce our 
legal liability in the near future.

                        ENVIRONMENTAL MANAGEMENT

    The budget provides $5.6 billion for defense and non-defense 
cleanups. This budget is on a steady decline from the fiscal year 2005 
record level of $7.3 billion. This is a reduction of nearly 25 percent.
    I understand the Department has attempted to prioritize cleanups 
based on risk in order to fit within the budget constraints. But the 
facts paint a very different picture. The budget cuts will undermine 
the Department's existing cleanup obligations and will push back 
completion dates.
    In particular, I am concerned about what this will mean for Los 
Alamos. Just 2 years ago the Department entered into a Consent 
Agreement with the State to cleanup the site by 2015.
    Unfortunately, the budget requests for the past 2 years have been 
wildly inconsistent and are insufficient to deliver on the agreed upon 
cleanup milestones.
    I have spoken with Secretary Bodman regarding my frustration with 
the lack of funding consistency. I believe the Department needs to set 
budget baselines that match our cleanups goals and then deliver on 
these commitments year after year.
    We simply can't continue to make environmental management the bill 
payer for every new important R&D initiative. I also realize I need to 
make this appeal directly to OMB, which has held the Department's 
budget flat.
    Nevertheless, I am committed to work with the laboratory, the State 
of New Mexico, the Department and Chairman Dorgan to find the 
appropriate level of funding for this cleanup effort.
    Thank you Mr. Chairman.

    Senator Dorgan. Senator Domenici, thank you very much.

       CONSEQUENCES OF A REDUCED ENVIRONMENTAL MANAGEMENT BUDGET

    Senator Dorgan. Let me make a comment that I did not make 
at the start of this and then I am going to call on Senator 
Murray for a moment. I was looking back at the web site of the 
Department of Energy. They note that scientists early on in the 
weapons programs in this country's effort to produce nuclear 
weapons advised that the resulting waste stream presented very 
grave problems, but the DOE's own web site says: ``The 
imperatives of the nuclear arms race, however, demanded that 
the weapons production and testing be given priority over waste 
management and the control of environmental contamination.''
    Well, we understand what happened and the Department of 
Energy's web site describes why it happened. Now there is a 
responsibility to address it, and I am very concerned about the 
proposed budget. What we are confronted with is a requirement 
to address these issues with a budget that is dramatically 
reduced, a budget that I think will result in substantially 
missed milestones. I am going to ask about that.
    But I know that both of you will be required today to 
support the President's budget. That is your role. But I do 
want to ask questions about the consequences. What are the 
consequences of a budget that is a 23 percent reduction in 4 
years for the EM budget? What is the basis of that, with so 
much cleanup work yet to be done across these complexes? How 
can such a great reduction in funding be proposed and what 
would be its consequences?
    So I will ask those questions, but I wanted to, following 
Senator Domenici's comments, make those observations. I am 
going to call on Senator Murray.

                   STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. Mr. Chairman, I will just submit an opening 
statement for the record. Just let me thank you for having this 
hearing. I look forward to working with you and Senator 
Domenici on the critical issues that your subcommittee is going 
to have to address this year, and I want to thank Mr. Rispoli 
and Mr. Sproat for being here today.
    I appreciate the opportunity to talk about the importance 
of cleaning up waste across the DOE complex, but particularly 
at Hanford in my home State. I do want to just say quickly I am 
pleased the administration is keeping its commitment to getting 
the vit plant back on track and fully funded. It is a long 
process. We are in it for the long haul and I appreciate that.
    I have a number of questions and I will be asking them 
after we have heard the testimony. Thank you, Mr. Chairman.
    [The statement follows:]

               Prepared Statement of Senator Patty Murray

    Thank you Chairman Dorgan for calling this meeting to examine DOE's 
cleanup efforts across the country and thank you Mr. Rispoli and Mr. 
Sproat for coming here to testify today.
    I glad to have the opportunity to talk about the importance of 
cleaning up waste across the complex and particularly at Hanford in my 
home State.
    I am pleased that the administration is keeping its commitment to 
getting the vit plant back on track and fully funded.
    I know that this is a long process and I am it in it for the long 
haul. There are several important projects ongoing at Hanford and today 
I would just like to ask a few particular questions of you Mr. Rispoli.

    Senator Domenici [presiding]. Thank you very much.
    The chairman asked if I would just proceed with where he 
was going and ask you, Mr. Sproat to, wherever you were on the 
testimony, proceed.

            Office of Civilian Radioactive Waste Management

STATEMENT OF HON. EDWARD F. SPROAT III, DIRECTOR
    Mr. Sproat. I had not started. Thank you, Senator.
    Good afternoon, Mr. Chairman, Senator Domenici, Senator 
Murray. Thank you very much and I appreciate the invitation of 
the subcommittee to talk about the President's fiscal year 2008 
appropriations request for the Office of Civilian Radioactive 
Waste Management, of which I am the Director. We have 
responsibility, as you know, to design, build, license, and 
operate the Yucca Mountain repository, the national high-level 
waste repository.
    Fiscal year 2008 is a major critical year for the national 
repository program. This is the year when we have major 
deliverables that are due: the supplemental environmental 
impact statement for the repository, certifying the licensing 
support network and submitting the license application to the 
Nuclear Regulatory Commission.
    The President's budget request, $494.5 million, will allow 
us to achieve those milestones, which are on the critical path 
to opening this repository by 2017, which is our best 
achievable date. In my written testimony, which I ask be 
introduced in the record, there are more specifics about our 
deliverables for 2008 and the other descriptions of funding of 
State and local oversight associated with the repository is 
also mentioned in that formal statement.
    Let me talk a little about the impact of the fiscal year 
2007 final appropriations, final authorization. For fiscal year 
2007, which as you know has only been passed here in the past 3 
or 4 days, the President----
    Senator Domenici. You mean appropriations, not 
authorizations.
    Mr. Sproat. I am sorry, appropriations.
    The President asked for $544.5 million for the Yucca 
Mountain program, of which was appropriated $444.5 million, 
which was $100 million less than what the President asked for. 
So right now my management team and I are in the middle of the 
effort to understand the impacts of that on the program. While 
we are still evaluating the impacts of the final 2007 
appropriation, it is likely but not yet certain that we will 
not be able to meet our best achievable schedule for opening 
the repository by March 2017. A 1-year slip is likely, but we 
are still evaluating the recovery options. So I have not given 
up on that 2017 date.
    However, we will meet our commitment to deliver the license 
application for the repository to the NRC by mid-2008. It is 
certain, however, that we will have a reduction in force, 
across the program later in fiscal year 2007 and in 2008, even 
with the full fiscal year 2008 appropriation request of $494.5 
million. Exactly how much of a reduction in force and when it 
will occur we are still evaluating.
    What I would like to talk about next is the issue of our 
ability to access or not access the Nuclear Waste Fund. I know 
certain members of this committee are probably very familiar 
with this issue. By 2009, fiscal year 2009, there is going to 
be a major turning point for this program. Sustained funding 
well above current and historic levels will be required 
starting in fiscal year 2009 if we are to complete this 
repository in 2017.
    The current funding levels will not be adequate to support 
design and, if necessary, concurrent capital purchases, 
construction, transportation infrastructure, and the 
transportation and disposal casks that we will need to begin to 
design and purchase to open the repository by 2017. Now, one of 
the problems, I think as the committee is well aware, is that 
the Nuclear Waste Fund was created by the Nuclear Waste Policy 
Act and is funded by a one mill per kilowatt-hour fee on all 
nuclear generation in the country. As of today, the fund has a 
balance of approximately $19.5 billion--that is with a ``b''--
which is invested in U.S. Treasury instruments. The Government 
receives approximately $750 million per year in revenues from 
ongoing nuclear generation and the fund averages about a 5.5 
percent annual return on its investments.
    At the present time, due to technical scoring requirements, 
the Department cannot access the Nuclear Waste Fund receipts, 
interest, or corpus for their intended use without having a 
significant negative impact on the Federal budget deficit. In 
the legislation that the administration submitted to Congress 
last year and again we submitted yesterday, the President 
proposes fixing this problem by reclassifying mandatory Nuclear 
Waste Fund receipts as discretionary in an amount equal to 
appropriations from the fund for authorized waste activities. 
Funding for the program would still have to be requested 
annually by the President and appropriated by the Congress from 
the Nuclear Waste Fund.
    While the lack of access to the fund is not critical to the 
program in fiscal year 2008, it will have a serious consequence 
in fiscal year 2009 and beyond. For each year beyond 2017 the 
repository opening is delayed, the Department estimates that 
U.S. taxpayers' potential liability to contract holders will 
increase by approximately $500 million per year. This will be 
in addition to the estimated current potential liability of 
approximately $7 billion. There will also be added additional 
costs associated with keeping the defense waste sites, 
particularly the one in Senator Murray's site, open longer than 
originally anticipated.
    So in summary, the President's fiscal year 2008 budget 
request will provide the needed funds to allow us to submit the 
construction application for Yucca Mountain in mid-2008, which 
is on the critical path. The significant reduction in the 
fiscal year 2007 funds will present challenges that I and my 
management team are working on and it puts in jeopardy our 
ability to meet the March 2017 date, but we are still working 
on some potential work-arounds.

                           PREPARED STATEMENT

    Each year's delay beyond March 2017 will result in an 
increase in taxpayer liability, and therefore I respectfully 
urge the Congress to consider and pass the President's fiscal 
year 2008 budget request and the proposed Nuclear Waste 
Management and Disposal Act which we sent up to the Hill 
yesterday.
    With that, I would be pleased to answer any questions the 
committee may have.
    [The statement follows:]

            Prepared Statement of Hon. Edward F. Sproat III

    Mr. Chairman and members of the committee, I am Edward F. Sproat 
III, Director of the Department of Energy's (DOE) Office of Civilian 
Radioactive Waste Management (OCRWM). I appreciate the invitation to 
appear before the committee to discuss the President's fiscal year 2008 
budget request for my office which has the responsibility to design, 
license, construct, and operate a repository for the disposal of high-
level radioactive waste, as defined in the Nuclear Waste Policy Act 
(NWPA) of 1982, as amended.
    When I first came to this program last summer I outlined four 
strategic objectives to implement the President's priorities during my 
tenure. They are:
  --Submit a high-quality and docketable License Application to the 
        Nuclear Regulatory Commission (NRC) no later than Monday, June 
        30, 2008;
  --Design, staff, and train the OCRWM organization such that it has 
        the skills and culture needed to design, license, and manage 
        the construction and operation of the Yucca Mountain Project 
        with safety, quality, and cost effectiveness;
  --Address the Federal Government's mounting liability associated with 
        unmet contractual obligations to move spent nuclear fuel from 
        nuclear plant sites; and
  --Develop and begin implementation of a comprehensive national 
        transportation plan that accommodates State, local, and tribal 
        concerns and input to the greatest extent practicable.
    The President's fiscal year 2008 budget request of $494.5 million 
for this program is supportive and vital to achieving these objectives.

                    FISCAL YEAR 2008 KEY ACTIVITIES

    Fiscal year 2008 will be a critical year for the program. It is 
imperative that the DOE submit a high-quality License Application to 
the NRC in 2008. This activity is on the critical path to opening the 
repository and allowing the Department to meet its contractual 
obligations to begin accepting and removing spent nuclear fuel and 
high-level radioactive waste from 131 sites around the country. This 
budget request will provide the funding needed to complete that License 
Application.
    In fiscal year 2008, our objectives are to:
  --Submit a License Application for the repository to the NRC;
  --Certify the Licensing Support Network in accordance with NRC 
        requirements and regulations;
  --Complete the Supplemental Yucca Mountain Environmental Impact 
        Statement (EIS);
  --Begin the defense of the License Application after submittal;
  --Design the standard canisters to be used by the industry to package 
        and ship spent nuclear fuel to the repository;
  --Perform critical personnel safety upgrades at the Yucca Mountain 
        site;
  --Perform the analysis and deliver the report to Congress required by 
        the NWPA on the need for a second repository; and
  --Resolve comments and issue the final EIS for the Nevada Rail Line 
        which is required to transport spent nuclear fuel to the 
        repository.
    In addition to the specific deliverables outlined above, the budget 
request also includes funds for the following activities:
  --Funding for payments-equal-to-taxes to the State of Nevada and Nye 
        County, Nevada, where Yucca Mountain is located. Our fiscal 
        year 2008 request also includes funding for the State of Nevada 
        and affected units of local government as well as funding for 
        the University System of Nevada and Nye County and Inyo County, 
        California, for independent scientific studies.
  --Funding for cooperative agreements with State regional groups and 
        other key parties involved in transportation planning. NWPA 
        Section 180(c) pilot grants will also be pursued to support 
        operational preparedness training and to refine the Section 
        180(c) program.
  --Funding for program management and integration of the project 
        components through formal baselines, procedures, and the system 
        requirements hierarchy, and for resolving cross-cutting issues 
        that impact the waste management system. This area has been 
        weak in the past and is now targeted by senior management for 
        improvement.
  --Funding for program direction which supports Federal salaries, 
        expenses associated with building maintenance and rent, 
        training, and management and technical support services, which 
        include independent Nuclear Waste Fund audit services, 
        independent technical and cost analyses, and University-based 
        independent technical reviews.
         impact of fiscal year 2007 final budget authorization
    The President's fiscal year 2007 budget request for the Yucca 
Mountain Program was $544.5 million. The final budget authority 
received for fiscal year 2007 was $444.5 million, a $100 million 
reduction. While we are still evaluating the impact of the final fiscal 
year 2007 appropriation in conjunction with the President's fiscal year 
2008 request, it is likely but not yet certain, that we will not be 
able to meet our Best-Achievable Schedule (attached) for opening the 
repository by March 2017. A 1-year slip is likely, but we are still 
evaluating recovery options. We will, however, meet our commitment to 
deliver the License Application for the repository in mid-2008.

          IMPLICATIONS OF NON-ACCESS TO THE NUCLEAR WASTE FUND

    The NWPA established the requirement that the generators of high-
level nuclear waste must pay for its disposal costs. As a result, the 
Nuclear Waste Fund was created and is funded by a 1 mil per kilowatt-
hour fee on all nuclear generation in this country. As of today, the 
Fund has a balance of approximately $19.5 billion which is invested in 
U.S. Treasury instruments. The government receives approximately $750 
million per year in revenues from on-going nuclear generation and the 
Fund averages about 5.5 percent annual return on its investments. At 
the present time, due to technical scoring requirements, the Department 
cannot access the Nuclear Waste Fund annual receipts, interest or 
corpus, for their intended use without a significant negative impact on 
the Federal budget deficit. Because the monies collected are counted as 
mandatory receipts in the budgetary process, spending from the Nuclear 
Waste Fund is scored against discretionary funding caps for the 
Department. In legislation the administration submitted to Congress 
last year and has submitted again to this Congress, the President 
proposes fixing this problem by reclassifying mandatory Nuclear Waste 
Fund receipts as discretionary, in an amount equal to appropriations 
from the Fund for authorized waste disposal activities. Funding for the 
Program would still have to be requested annually by the President and 
appropriated by the Congress from the Nuclear Waste Fund.
    While lack of access to the Fund is not critical to the program for 
fiscal year 2008, it will have serious consequences in fiscal year 2009 
and beyond. Over the past 6 months, we have been developing a projected 
budget authority needs estimate by fiscal year through repository 
construction. It is based on projected funding requirements for 
construction of the repository and the transportation infrastructure 
needed to meet the Best-Achievable Schedule opening date of March 2017, 
assuming enactment of the Nuclear Waste Management and Disposal Act 
that the administration has introduced. Sustained funding well above 
current and historic levels will be required if the repository is to be 
built. Funding at current levels in future years will not be adequate 
to support design and the necessary concurrent capital purchases for 
repository construction, the transportation infrastructure, and the 
transportation and disposal casks.
    For each year beyond 2017 that the repository's opening is delayed, 
the Department estimates that U.S. taxpayers' potential liability to 
contract holders who have paid into the Nuclear Waste Fund will 
increase by approximately $500 million. This will be in addition to the 
estimated current potential liability of approximately $7.0 billion due 
to the Department's not beginning removal of spent nuclear fuel in 1998 
as required by contract. There will also be added costs associated with 
keeping defense waste sites open longer than originally anticipated. 
The Department has not yet estimated those costs. It can be seen, 
however, that each year of delay in opening the repository has 
significant taxpayer cost implications, as well as the potential for 
delaying construction of needed new nuclear power plants. Therefore, 
the administration believes it is in the country's best interest to 
expedite construction of the repository and the transportation 
infrastructure necessary to bring both defense and commercial spent 
nuclear fuel and high-level waste to Yucca Mountain.
    In summary, the President's fiscal year 2008 budget request will 
provide the needed funds to allow submittal of the construction License 
Application for Yucca Mountain by mid-2008. The significant reduction 
in requested funding for fiscal year 2007, however, will present 
challenges and puts in jeopardy the Department's ability to meet the 
March 2017 opening date. And, each year's delay beyond the March 2017 
date will result in increased potential taxpayer liability to utility 
contract holders as well as increased costs for storage at defense 
waste sites across the country. I respectfully urge the Congress to 
consider and pass the President's fiscal year 2008 budget request for 
the Office of Civilian Radioactive Waste Management.
    I would be pleased to answer any questions the committee may have 
at this time.

           BEST-ACHIEVABLE YUCCA MOUNTAIN REPOSITORY SCHEDULE
------------------------------------------------------------------------
               Milestone                               Date
------------------------------------------------------------------------
Design for License Application Complete  November 30, 2007.
Licensing Support Network Certification  December 21, 2007.
Supplemental Environmental Impact        May 30, 2008.
 Statement (EIS) Issued.
Final License Application Verifications  May 30, 2008.
 Complete.
Final Rail Alignment EIS Issued........  June 30, 2008.
License Application Submittal..........  June 30, 2008.
License Application Docketed by NRC....  September 30, 2008.
------------------------------------------------------------------------


            BEST-ACHIEVABLE REPOSITORY CONSTRUCTION SCHEDULE
------------------------------------------------------------------------
               Milestone                               Date
------------------------------------------------------------------------
Start Nevada Rail Construction.........  October 5, 2009.
Construction Authorization.............  September 30, 2011.
Receive and Possess License Application  March 29, 2013.
 Submittal to NRC.
Rail Access In-Service.................  June 30, 2014.
Construction Complete for Initial        March 30, 2016.
 Operations.
Start up and Pre-Op Testing Complete...  December 31, 2016.
Begin Receipt..........................  March 31, 2017.
------------------------------------------------------------------------

    The schedule above is based on factors within the control of DOE, 
enactment of the Nuclear Waste Management and Disposal Act, 
appropriations consistent with optimum Project execution, issuance of 
an NRC Construction Authorization consistent with the 3-year period 
specified in the Nuclear Waste Policy Act, and the timely issuance by 
the NRC of a Receive and Possess license. This schedule also is 
dependent on the timely issuance of all necessary other authorizations 
and permits, the absence of litigation related delays and the enactment 
of pending legislation proposed by the administration.

    Senator Domenici. Proceed. Do you want to go ahead?
    Senator Murray. My understanding is Senator Dorgan had to 
step out for just a short while. So if it is okay with you, 
Senator Domenici, I will go ahead and start with my questions, 
and then I am hopeful--oh, he is back.
    Senator Domenici. He has finished his statement.
    Senator Dorgan [presiding]. Thank you very much. I 
apologize. I had a relative that had a little fender-bender. 
She is fine, but needed to talk to her dad, and it was not her 
fault.
    Senator Craig. Of course, dad. I've been there.
    Senator Dorgan. Thank you both.
    Mr. Sproat, I apologize for having missed your testimony.
    Mr. Sproat. That is all right.
    Senator Dorgan. But I have read your testimony and I 
appreciate your being here.
    I will proceed to questions and I will defer my questions. 
Senator Domenici, do you want to begin?

                NUCLEAR WASTE FUND LEGISLATIVE PROPOSAL

    Senator Domenici. Mr. Chairman, I just want to extend--I 
know you have had this, but here is a very interesting proposal 
that is included in his testimony that we have not had come up 
from the administration before. I am not so sure that--I do not 
think we ought to throw it away. This $19 billion sitting 
around in the fund is not being used and the fact that we 
continue to appropriate for the repository is driving some 
programs into bankruptcy while this grows. And they have an 
idea on how to moderate it and I think maybe we should look at 
it a little. It would just be saying maybe it ought to be used 
for its intended purpose.
    Mr. Sproat. What it is intended to be used for.
    Senator Dorgan. All right. Did you wish to ask questions 
now?
    Senator Domenici. No.
    Senator Dorgan. Senator Murray, why don't you proceed.
    Senator Murray. Thank you very much, Mr. Chairman.

               SUPPLEMENTAL BULK VITRIFICATION TECHNOLOGY

    The environmental management budget literature indicates 
that liquid tank waste is the highest priority issue, but there 
is a reduction in funding for the work done in the tank farm 
activities and there is zero funding requested for the 
supplemental treatment. I understand the need to thoroughly 
investigate potential technology, but this budget runs out of 
money prior to the cold test in June. Can you explain the logic 
in that, Mr. Rispoli?
    Mr. Rispoli. I believe, Senator, that you are addressing 
the testing for the demonstration project, which is a----
    Senator Murray. Could you turn on your microphone.
    Mr. Rispoli. Sorry. Thank you.
    I believe you are discussing the supplemental bulk 
vitrification technology, which is a supplemental technology 
that we have been talking about for several years now. We met 
with--I met with the contractor and the contractor's team just 
last week. As you know, they have performed engineering scale, 
one-sixth scale tests on the technology, and they would like to 
do a full-scale test this summer.
    I would point out that in a review of that particular 
project that was done independently, a technical review, we did 
find a number of technical issues. The contractor as a result 
of that review has been working on those technical issues and 
they believe that they have solved the most significant one at 
least, which is the migration of a highly radioactive 
technetium, which is soluble, to the surface, which would not 
then accomplish its intended purpose of encapsulating it in the 
glass.
    They would like to demonstrate this in a full-scale test 
this summer. We have worked with them and we believe we can 
accomplish that full-scale test this summer.
    Senator Murray. Do you have money in the budget to do that?
    Mr. Rispoli. We believe we can--yes. Yes, Senator, we 
believe we can accomplish that this summer.
    Senator Murray. Okay, very good.

              FISCAL YEAR 2008 FUNDING FOR HAMMER PROGRAM

    Let me ask you about the funding for HAMMER. Year after 
year we get budgets with no request for HAMMER. You know what 
the facility is. It is a facility that trains many people 
actually, but our workers in particular, emergency responders 
and others dealing with hazardous material. Safety is, as you 
know, at the Hanford site a top concern and we want to make 
sure they have the best training possible.
    I am concerned because we continue to see no funding, no 
funding in the CR, or in the fiscal year 2008 request. Did you 
ask for funding for the HAMMER facility?
    Mr. Rispoli. The HAMMER facility we intend to fund by 
having the contractors at Hanford buy their training through 
the HAMMER facility. That has been a model that has worked 
successfully. We do not envision that the HAMMER facility will 
not be supported. We believe we have a strong base of support 
for that facility from within the budget at Hanford through the 
contractors that require the training for their workers.
    Senator Murray. Do you need any additional funding for 
HAMMER outside of that?
    Mr. Rispoli. Pardon me, Senator?
    Senator Murray. Do you need any additional funding for 
HAMMER outside the private contractors?
    Mr. Rispoli. I believe that we can attain the support 
required for the HAMMER facility through that mechanism.
    Senator Murray. Can you give me the budget for that 
separately from this and show me how that works on paper?
    Mr. Rispoli. Yes, I can.
    [The information follows:]

                             HAMMER Funding

    The base cost of the facility is $6.4 million. This is funded by 
distributing the cost proportionally to each project at Hanford. The 
cost to conduct classes is funded through fees paid by attendees for 
each class.

                    HANFORD SITE MANAGERS VACANCIES

    Senator Murray. Okay. I wanted to ask you about the lack of 
communication between management at the Hanford site and people 
back at headquarters. I understand that has been partly 
responsible for the struggles at the Hanford Vitrification 
plant. I know that you are working on that, but we are facing a 
situation today where two of our top manager positions are 
going to be vacant. We have Roy Schepens and the pending 
retirement of Keith Klein. There are three contracts that are 
scheduled for competition and there is a lot of work to be done 
at the site. There have been a lot of changes in the contractor 
teams and now the Federal leadership is in transition. It seems 
like a lot of musical chairs out there at a time when we 
specifically need continuity and leadership.
    Can you tell me where you are on those positions?
    Mr. Rispoli. Yes, I can, Senator. Thank you. You are 
correct. Senator and members of the subcommittee, we are losing 
two highly skilled long-term professionals to retirement at the 
site out there. Roy Schepens is already physically retired and 
Keith Klein announced his retirement. In fact, he has been 
aspiring to do this for quite some time. It is the culmination 
of a remarkable career.
    I can tell you that this week we are interviewing for Roy 
Schepens' replacement at headquarters. I would also tell you 
that we actually did something a little different for the 
Federal Government. We hired a search firm because we realized 
that not everyone would look to the Government web site to look 
for this type of a position if, for example, they are in 
private industry.
    So we did everything we could to shake the trees to get 
qualified people to apply.
    Senator Murray. Are you finding qualified people?
    Mr. Rispoli. Well, I personally know none of the names, but 
that is the way it is supposed to be. It has been paneled. 
There have been a group of experts, including some people who I 
am sure you would know, that went through and reviewed the 
candidates and then forwarded them to the selecting official 
for interviews and selection. The interviews again started this 
week. I am very optimistic that that process will have yielded 
some viable candidates that we can look at for that position.
    In the case of Keith Klein, we do have some time because 
his retirement is not until the end of May. But again, given 
the time that it takes, we know that in fact Mike Weis, the 
deputy manager, will be the acting manager there. I believe you 
know Mike Weis. I am sure that he himself will be a contender 
for that position. We all have a very high degree of confidence 
in him and I believe that that will work out very well.
    I might also mention that Shirley Olinger will be the 
acting manager of the Office of River Protection and she has 
been the deputy there for quite some time as well.
    So I think in the management end for this interim period we 
are in good hands. For the one that was more imminent, we are 
interviewing now and we can go forward. You are correct in that 
we have three contracts that are being advertised. I will tell 
you that--you may recall from last year that we did appoint a 
Deputy Assistant Secretary for Acquisition and Project 
Management. We are managing these efforts centrally. The work 
is done in the field, but we are managing the time lines 
separately. Having visited there myself, I can tell you that 
the team working on those procurements is robust, they are 
competent, they are qualified. They have got people that have 
done this before. And that, coupled with our new headquarters 
structure and oversight, I feel that we can get through this 
period even with the loss of the two managers that are out 
there.
    With all of that said, Senator, I know that it is going to 
be--for the people of the community, they are going to see it 
as a tumultuous period. I think we just have to get through 
this together.
    Senator Murray. I appreciate your personal attention to 
that.
    Mr. Chairman, I have some other questions I wanted to 
submit for the record if I could.
    Senator Dorgan. Without objection.
    Senator Murray. And I appreciate your accommodation today.
    Senator Dorgan. Without objection. Thank you very much, 
Senator Murray.
    Mr. Rispoli. Thank you, Senator.
    Senator Dorgan. Senator Domenici.
    Senator Domenici. Mr. Chairman, do you want to go?
    Senator Dorgan. I will defer.
    Senator Domenici. Do you have time to hold the whole 
meeting? I cannot do the whole.
    Senator Dorgan. Yes.
    Senator Domenici. I thank you.

          MISSED CLEANUP MILESTONES AT LOS ALAMOS NATIONAL LAB

    I want to ask some questions that are parochial and if I 
get to the others, fine. But I want to talk to you, Mr. 
Rispoli, about Los Alamos missed milestones. The Department has 
proposed $140 million for Los Alamos--write that down--which is 
insufficient to clear up and clean up the milestones contained 
within the consent order that the Department entered into with 
the State in 2005. According to that June 15, 2006, baseline 
for the project, which assumes completion of all consent order 
milestones, the budget for Los Alamos would be $283 million, 
more than double the request.
    If the Department remains on its current path proposed as 
part of the 2007-2008 budgets, cleanup milestones will be 
missed and the cleanup will be delayed 2 years beyond the 
consent order deadline of 2015.
    Now, sir, I am not sure that I understand how you can 
justify a budget that forces the Department to miss agreed-upon 
milestones and will result in fines and other penalties from 
the State. Can you tell me how you intend to keep the cleanup 
on schedule with the budget baseline you have offered for the 
2008 budget?
    Mr. Rispoli. Senator, thank you. There are actually two 
parts to my answer on your question. As you know, we have been 
funding in the current fiscal year, we have been funding at a 
rate of about $141 million per year, which is the same rate 
that we were funding at in the prior fiscal year. We did that 
notwithstanding that we were in a CR situation and that the 
budget for 2007 had about $90 million. We recognized that were 
we not to fund at the $141 million level that we would have 
jeopardized milestones in the current fiscal year.
    I personally met with Mr. Curry in his offices in Santa Fe. 
He has met with me here in Washington. I have met with his 
senior-most staff. We recognize that and we believe that we 
needed to provide the funds to the lab to be able to attain 
those milestones.
    With all of that said, as you know, the State has issued 
four and is considering issuing a fifth notice of violation in 
2007, none of which are related to funding shortfalls. They are 
basically all conduct of operations. We, both myself and 
Administrator Tom D'Agostino, are personally aware of the 
problem. We both talk with the contractor about this issue and 
it is a very difficult issue. I think we are making headway. I 
think we will be seeing some changes in the way that the 
laboratory itself approaches the management of that portion of 
the work, which I think is a good thing.
    I would also mention that in the competition for this 
contract the contractor who won, the LANS organization, did in 
fact envision efficiencies, to be able to address going forward 
in a more efficient way. For example, we believe that at Los 
Alamos today, it costs us at least five times more per drum of 
transuranic waste to ship it to WIPP than it does anywhere else 
in the complex. So we do believe that we can attain 
efficiencies with the new kind of thinking that the contractor 
said they would bring to this issue.
    Looking forward to the second part of your question, we 
know that the milestones created by the recent agreement needed 
to have a new cost and schedule baseline. The laboratory worked 
up a new cost and schedule projection so that we would know how 
to fund it. However, despite two tries to get that estimate 
through an independent audit, it has not passed.
    So the challenge we have is until we really know what those 
efficiencies will bring and what this new cost and schedule can 
do, we do not know what the right amount of funds are to put on 
it. We know that we have been funding at $141 million per year. 
We know that we have been not missing milestones with that 
level of funding. I would tell you that we need to reassess 
that once we have an independent audit of the cost and schedule 
for the environmental work at Los Alamos.
    Senator Domenici. Well, look. I have done the charts and 
looked at them. You are going to miss the milestones, there is 
no question, by 2 years. And it is important to me that I know 
that you are working with Mr. Ron Curry. He is New Mexico's 
environmental man. It is my understanding that that 
relationship between the Environment Department and Los Alamos 
is not very good. Are you doing anything to improve it or do 
you know whether anything is happening out there that might 
improve it?
    Mr. Rispoli. Senator, I will tell you that I agree fully 
with you that the relationship has not been good. I think in 
fairness that the relationship between myself and Mr. Curry is 
strong and between his senior staff and us is strong. I think 
it is also noteworthy that the Federal Government changed its 
environmental manager. They have appointed Mr. George Rael of 
the NNSA to be the new leader of the environmental program for 
the Federal staff. And you probably heard the press release 
today that the laboratory itself will be placing a new manager 
in charge of the environmental program there.
    I do think that Mr. Curry and I are clearly in agreement 
that we want to have a good relationship and I do believe that 
these steps will get us where we want to be.
    Senator Domenici. Could you please explain to me and the 
committee who is responsible for paying these fines? Is it DOE, 
University of California, or LANS?
    Mr. Rispoli. My understanding, Senator, is that because, in 
the case of the Los Alamos operation, that not all of the fines 
are attributable to LANS. In other words, some of them are, but 
some of them were direct contracts from the Los Alamos site 
office with contractors to do the work. My understanding is 
that the fines will, at least most of them will be borne by the 
Federal Government.
    I am aware that in one case the contractor indicated they 
would take a fine, but I believe in most cases it would be the 
Federal Government.
    Senator Domenici. Do you have any idea, just looking at 
them out there, to tell the chairman how many thousands of 
dollars they are allegedly fining us in those five fines, four 
fines?
    Mr. Rispoli. Senator, I only have one with me. That one 
alone is $402,000 and it is a potential notice of violation. I 
can get you the answer for that for the record.
    Senator Domenici. Would you get us the answer for the 
record?
    Mr. Rispoli. Yes, sir.
    [The information follows:]
   Fines Assessed Against DOE and Los Alamos National Security (LANS)
    In the past eight months, the New Mexico Environment Department 
(NMED) has assessed penalties against the Department and/or Los Alamos 
National Security, LLC (LANS) for five alleged violations of the 
Consent Order or other hazardous waste regulations. As of March 22, 
2007, the five violations and the responsible parties are summarized 
below:

----------------------------------------------------------------------------------------------------------------
                                                                                               Actual Fine
             Description                         Date              NMED Proposed Fine      (Responsible Party)
----------------------------------------------------------------------------------------------------------------
Improper disposal of debris from       7/12/06................  $88,930................  $51,000 (DOE to
 Incinerator Ash Pile.                                                                    pay).\1\
Late Investigation Report submittal    9/12/06................  $30,000 plus $3,000/day  $120,000 (DOE to
 on Incinerator Ash Pile.                                        from Oct 12 until        pay).\1\
                                                                 project completion.
Failure to report new release          9/15/06................  $795,620...............  TBD (UC and/or LANS to
 associated with chromium groundwater                                                     pay--responsibility
 contamination.                                                                           under negotiation).\2\
Improper removal of hazardous waste    10/25/06...............  $402,600...............  TBD (UC to pay).\2\
 from Sigma Mesa D&D project.
Failure to comply with Work Plan       12/7/06................  $1,000/day for first 30  $30,000 paid to date,
 provisions for Material Disposal                                days (paid) plus         but continuing at
 Area-C characterization.                                        $3,000/day until new     $3,000/day (starting 1/
                                                                 report submitted.        5/07) until report is
                                                                                          submitted) (LANS to
                                                                                          pay).
----------------------------------------------------------------------------------------------------------------
\1\ The National Nuclear Security Administration agreed to pay these penalties.
\2\ DOE has directed the fines to the contractor, but negotiations are still pending regarding eligibility for
  reimbursement under the contracts.

    As a general rule, LANS, the current Management & Operating (M&O) 
contractor, has the responsibility (and University California (UC) 
before it) for performing environmental remediation at Los Alamos 
National Laboratory (LANL). However, to reduce costs, some years ago 
DOE decided to contract directly with companies outside the M&O 
contractor to perform several environmental remediation projects, 
including remediation work on the Incinerator Ash Pile in TA-73. In the 
two cases of penalties associated with the Airport Ash Pile, listed as 
items #1 and #2 above, DOE has acknowledged that it is responsible for 
paying the penalties and LANS was not responsible for any activities 
that led to the alleged violations.
    Under the current M&O Contract, LANS is responsible for paying for 
violations associated with environmental remediation work they are 
responsible for (see #5 above). The previous M&O contractor, the 
University of California, was likewise responsible under its M&O 
contract for fines and penalties. Some of the actions that led to the 
assessment of penalties occurred prior to the date that LANS took over 
the contract, June 1, 2006. As a result, UC may have responsibility for 
certain of the penalties and/or both UC and LANS may share in the 
liability (see #3 and #4 above). No final determinations have yet been 
made with respect to these penalties.

    Senator Domenici. I am finished. Thank you very much.
    Mr. Rispoli. Thank you, Senator.
    Senator Dorgan. Senator Craig.

                         CONTRACTOR PERFORMANCE

    Senator Craig. Jim, let us stay on the cleanup theme for a 
moment because it is important for all of us and our labs to 
try to stay on those schedules as much as we can. How do you 
rate the Idaho cleanup contractor's performance, let us say 
compared with other cleanup projects at DOE?
    Mr. Rispoli. I believe that the Idaho contractors are 
both--are doing very well. I think that they are performing at 
a level that we feel comfortable with. I am not suggesting that 
they are earning every penny of their fee because I do not 
honestly know to that level of detail. But I do know that when 
I look across the program that Idaho is performing very well 
for us.
    Senator Craig. It is my understanding that they have come 
in in most instances ahead of schedule and under budget with 
most of their cleanup effort. Is that not true?
    Mr. Rispoli. In most areas that is true. As you know, even 
in one facility, the Advanced Mixed Waste, we had to make up 
for a lot of lost time and were successful in doing that. But 
yes, Senator, I would agree.
    Senator Craig. Do you believe the best performers should be 
rewarded with additional funds to accelerate project schedules 
to achieve real cleanup results or would you expect good 
performers to do more with less because of their successes?
    Mr. Rispoli. I think the answer is a little bit of both. 
But I would offer to you that in many cases contracts provide 
incentives for contractors who can deliver more with less. In 
other words, we try to incentivize our contractors to do 
exactly that, that if they can perform work in a less than full 
funding situation they would then have opportunity to earn more 
fee.
    Senator Craig. Could you please provide me, and I think all 
of us would be interested in, a copy of the remaining fiscal 
year 2007 EM budget when finalized and an explanation as to any 
impacts it would have on these projects? Of course, I am 
interested in the Idaho cleanup.
    Mr. Rispoli. You mean for the continuing resolutions?
    Senator Craig. That is correct.
    Mr. Rispoli. Yes, Senator. That is--right now the 
continuing resolution is with OMB. It is in the final stages of 
being prepared to be brought to the Congress. But I would be 
happy to do that in a separate meeting with you.
    Senator Craig. Rumors abound and we would like to put those 
away.
    Mr. Rispoli. Yes, sir.

              PROPOSED LEGISLATION FOR NUCLEAR WASTE FUND

    Senator Craig. Ward, again thank you for being before the 
committee and the working relationship we have with you. How 
confident are you in your ability to complete the Yucca 
Mountain license application by June 2008? You have discussed 
that some.
    Mr. Sproat. Senator, assuming that we receive the full 
amount that the President requested for fiscal year 2008, which 
is $494.5 million, I am 100 percent confident we will meet that 
date.
    Senator Craig. Does this require the Fix Yucca legislation 
you proposed, that was proposed by DOE yesterday?
    Mr. Sproat. No, Senator, it does not. In other words, the 
Fix Yucca legislation--and I am prepared to talk about any 
parts of that you would like--is not a prerequisite to the 
submittal of the license application. Parts of it are a 
prerequisite before the NRC would be able to grant us a 
construction authorization, primarily land withdrawal.
    Senator Craig. What is your opinion of the Domenici-Craig 
Nu Way bill from the last Congress? Does the certainty of 
interim storage of defense waste at Yucca hurt or help this 
project?
    Mr. Sproat. I believe it would help this project because, 
No. 1, I believe it would give us legislative clarity, if you 
will, regarding the Department's authority to do interim 
storage of high level waste and naval spent nuclear fuel, which 
right now we believe--and it has been looked at by a number of 
people over a number of years. We currently believe we do not 
have that legislative authority to do that. So that certainly 
would give us that authority and capability and would allow us 
to move forward with, probably on an expedited basis, on 
figuring out how to make that happen.
    Senator Craig. Thank you. Thank you both.
    Mr. Chairman.
    Senator Dorgan. Senator Craig, thank you very much.
    Senator Bennett.

                      ATLAS MILL SITE CLOSURE DATE

    Senator Bennett. Thank you, Mr. Chairman.
    Mr. Secretary, you probably will not be surprised that I 
want to talk about the Atlas Mill site. By nodding, I guess you 
are prepared to----
    Mr. Rispoli. Yes, sir, I am.
    Senator Bennett [continuing]. To talk about that.
    We know that the first recommendation--or first comment 
perhaps is a better term--that came out of the Department as to 
when this would be done was it would take about 7 to 10 years, 
and that would put it 2017, 10 years from today.
    Secretary Bodman before the Energy and Commerce Committee 
on the House side said it will occur around 2028. So he has 
added another 10 years to the 10 years that was the outside 
date we had, and I am not sure whether he is anticipating that 
that would take place in 1 year or if it would start in 2028 
and then take another 7 to 10 years.
    I am sure it comes as no surprise that Secretary Bodman's 
testimony set off a lot of alarm bells down in that part of my 
State. I would like to have you talk to us about that and tell 
us what you think is really going to happen, how much it is 
going to cost, and therefore help me understand what my 
responsibilities on this subcommittee ought to be to try to see 
to it that we get as close to the original projected date as we 
possibly can.
    Mr. Rispoli. Thank you, Senator Bennett. We are in the 
process now of evaluating proposals that we have in hand from 
the contractor community to do that. We expect to have an award 
this summer. The process that we would have in the Department, 
the 2028 is a good planning figure. That is the planning figure 
that we use, but it is exactly that. It is a planning figure, 
because the process that we would have will require the 
contractor to propose what technology, what efficiencies, and 
so forth they would employ.
    We are assuming there will be one trainload per day, one 
trainload per day that would be hauling that material out to 
Crescent Junction. We are assuming a certain type of conveyor 
system to load the train cars, for example. But until we 
evaluate the proposals and develop a cost and schedule that can 
be independently audited, the 2028 number, while a good number 
and the best we have, is a planning number. It could be 
significantly better than that depending upon the contract 
mechanism chosen.
    Of course, the other factor then is the annual funding. 
This year we are looking in the 2008 budget about $23 million 
is in the budget for the funding. I think until we evaluate the 
proposal and look at what is the proper baseline, I think that 
we are at that early stage where we just do not know. As soon 
as we finish that evaluation, we will have a much better handle 
on what would a reasonable schedule and baseline be.
    The 2028 is a good number, as I say, but we still have 
quite a ways to go in the evaluation process.
    Senator Bennett. Let me say back to you what I think I 
heard so you can tell me whether I am right or not. By midyear 
this year, you will have an understanding of which contractor 
you want and how that contractor will go about it?
    Mr. Rispoli. Yes, sir.
    Senator Bennett. And at that point, presumably you will 
know how soon the contractor can begin?
    Mr. Rispoli. At that point we would be ready to send in an 
independent review team to review the contractor's numbers, to 
say yes, this is a valid cost and schedule. So that will 
actually begin happening this summer, and typically the process 
is just a few months after that when we would know whether it 
is a valid cost and schedule.
    Senator Bennett. So let us go through it. Let us just put 
some dates on it. Let us say you know by July. You pick the 
contractor. Let us give you 90 days, August, September, and 
October, so you will know by November whether the contractor is 
good or not. Assuming that he or she is, you will know in 
November what the time schedule will be?
    Mr. Rispoli. I think that is a reasonable time line, yes, 
sir.
    Senator Bennett. So let us say that the first shipments can 
then start, what, 5 years from November? Will it take them that 
long to put the conveyor belt in or whatever, or 5 months? Or 
do you have any sense of the timing?
    Mr. Rispoli. No, sir, I do not know that yet, because I do 
not know what technologies or what approaches those who are 
bidding will actually propose to us. So I cannot say when they 
would have the system in place to begin loading the rail cars 
and moving the material away from there to Crescent Junction.
    Senator Bennett. Well, let us assume for just a minute that 
the contractor physically could do it in a year, within a year 
after November, so that it could start moving as early as 
November of 2008.
    Mr. Rispoli. I think that is a reasonable--at this point in 
time, I think that is a reasonable assumption. I would offer to 
you that actually once we have the proposals evaluated it would 
be very appropriate at that time for me to visit with you and 
give you more detail, once that is available information.
    Senator Bennett. Okay. But what I want to nail down and be 
absolutely sure, Secretary Bodman's use of the term ``2028'' 
did not signal a determination on the part of the Department to 
put this off an extra 10 years?
    Mr. Rispoli. I think the Secretary was referring to the 
best number we have today, which is a 2028 number based upon an 
assumption of costs and assumption of annual funding profile. I 
think that once we see what the approach is and what the actual 
cost is likely to be, we can evaluate that and see how good or 
how not good the 2028 number is. But we just do not have a 
better number today.
    Senator Bennett. I understand that. But again, what I hear 
you telling me is that the Department's use of the 2028 as a 
planning date is not a signal that they have decided to slow 
this down or delay it?
    Mr. Rispoli. I would not take it to be that, no, sir. I 
would agree with you. That is true.
    Senator Bennett. Because that is the signal that got sent 
in the press, that they were thinking, gee, this could be done 
by 2018. On the timetable we have talked about, 2018 is logical 
if they start in November of 2007. It takes them a year to get 
the thing in place, 2008, and it takes them 10 years to get it 
done, it is 2018. So 2028, that is the outside year that you 
think it could happen if the Congress does not fund it properly 
or if the contractor runs into unforeseen difficulties. But for 
planning purposes, you say this will be done by 2028, but that 
is not the statement we are going to delay it to 2028?
    Mr. Rispoli. That is true because, as I mentioned earlier, 
we know we are going to move it by train. We know that our 
planning today is one train per day. That may or may not be 
optimal. It may be the best that can be done, depending upon 
the physical parameters, traffic and things like that.
    Senator Bennett. When you brief me later this year, we can 
go into all of those. But the point I wanted to make and that 
you now have confirmed is that Secretary Bodman's testimony was 
not a statement that the Department wants to delay this 
project.
    Mr. Rispoli. I do not think that we took it as a delay. 
Again, it was just a planning number that we had, and that is 
the number we gave to the Secretary to use based upon what we 
know today, which is not very much.
    Senator Bennett. Thank you.
    Senator Dorgan. Thank you.
    Senator Allard.

          LESSONS LEARNED APPLICATIONS TO OTHER CLEANUP SITES

    Senator Allard. Thank you, Mr. Chairman. I apologize for 
being late. I apologize for not hearing the testimony because 
you did talk about Rocky Flats, which I think is a success 
story that we do not talk enough about.
    Mr. Chairman, when I first got involved with Rocky Flats 
having been elected to the U.S. Senate, it was a cleanup 
project laid out over 70 years, $35 billion in costs. We were 
able to put together an accelerated program of cleanup, bring 
it down to 10 years, and we were able to finish that project 1 
year ahead of the redone schedule with savings of hundreds of 
millions of dollars. I think one of the key aspects of good 
cleanup were the incentives that we built into the contract 
which really kept things moving.
    We had very cooperative employees with the Department of 
Energy working out there and citizens in the area, who made it 
their goal to get the cleanup done. The agency had bought into 
it. But I do think that there are a lot of lessons to be 
learned by this.
    Are we going to apply some of the lessons learned in this 
cleanup to other sites? Because this is the largest cleanup I 
think in the world, frankly, where we have had a success story 
like this, where we have been under budget and ahead of 
schedule. I would like to know if there are lessons learned 
here that can be applied to other projects where we might have 
nuclear cleanup.
    Mr. Rispoli. Senator Allard, absolutely. And I believe that 
we actually touched on this at the ceremony itself out in 
Colorado last year. We are addressing lessons learned from 
Rocky Flats in a couple of ways. I will mention two of them.
    The first is that we have established a lessons learned 
section of our internal house web site, you might say. So that 
not only for the Rocky Flats situation, but many others as 
well, we can better share lessons learned. We are so spread out 
geographically that we realize that oftentimes different 
organizations are facing similar challenges, and so use the 
electronic media as best we can to get that out.
    The other is that at the Rocky Flats cleanup not only the 
prime contractor, but even a number of the subs had people with 
a lot of experience. As that job closed down, they have 
actually sent those people to other places to help with similar 
situations in other places.

                           PREPARED STATEMENT

    But I believe that you are absolutely right. We had some 
tremendous success there. I would likewise say we gave in our 
opening a few photos of places that are not as big, but 
certainly just as significant, such as the Fernald site in 
Ohio, where we again had similar successes in lessons learned, 
and we are working to promulgate those.
    Senator Allard. While I think about it, Mr. Chairman, I 
would like to make my full statement a part of the record if I 
might.
    Senator Dorgan. Without objection.
    [The statement follows:]

               Prepared Statement of Senator Wayne Allard

    Thank you, Chairman Dorgan, for holding this hearing today. I am 
proud of the work that Senator Domenici accomplished last year and I 
look forward to working with you as the new Chairman, as well as the 
other members of this committee. I would also like to thank the panel 
for coming today and offering their testimony.
    This is my third year on this subcommittee, and I like to take 
advantage of all the opportunities to hear from the Department of 
Energy's EM Assistant Secretary about Rocky Flats. I think it is 
important for many reasons to talk about this success story, because if 
you were to visit the site today, you would see what Rocky Flats looked 
like more than 50 years ago. It is pristine and quiet with little to 
remind you that it once was the place of the most dangerous building in 
the United States.
    I remember the time-frame when the Department of Energy, then the 
Atomic Energy Commission, established Rocky Flats as a nuclear weapons 
production facility. I remember the decades of production and the many 
workers who toiled to protect our country--24 hours a day, 7 days a 
week.
    The first time I toured Rocky Flats--with the site's extensive 
security controls, enormous concrete buildings, and tons of weapons-
grade plutonium still on site--it was unimaginable what it would look 
like today. I remember the worries of security threats, wide-spread 
contamination, industrial pollution, and radioactive fall-out. And, 
most importantly, I remember the early estimates for cleaning-up Rocky 
Flats--70 years and $35 billion.
    So, Mr. Chairman, I thought I would again touch on this success 
because we are fortunate to have come so far and to have achieved so 
much. The picturesque Rocky Flats that exists today seemed like a dream 
just 10 years ago. Few believed the site could be successfully cleaned-
up. Even fewer believed that the clean-up could be completed early--15 
months ahead of the already accelerated schedule and hundreds of 
millions of dollars below budget. We in Congress, and the Department of 
Energy, need to celebrate this success and hopefully channel it into 
other clean-ups around our country.
    Again, thank you Mr. Chairman for bringing us here today, and I 
look forward to the testimony of the witnesses.

                        CLEANUP FUNDING STRATEGY

    Senator Allard. The other idea when we were working on 
this--I was on the authorizing side in the Armed Services 
Committee and this was under my jurisdiction at the time. Part 
of the thinking was that once we get Rocky Flats clean then 
that begins to free up dollars for cleaning up other sites. Is 
that happening, and we are getting expedited cleanup in some of 
these other sites?
    Mr. Rispoli. I think that right now we are looking at over 
the next, in 2006, 2007, 2008, 2009, at a number of sites--it 
is in my statement for the record; it is also in the budget--
that are being cleaned up. I believe what we are looking at 
after that are essentially the really big sites that we will be 
at for a long time, driven more by schedules and technology 
problems, such as Hanford, Savannah River, Oak Ridge.
    In fact, at Oak Ridge we will even be adding more. I 
reviewed a proposal just yesterday that will add even more 
square footage to the program for D&D such as we did at Rocky 
Flats.
    Senator Allard. Well, I hope that you continue to push 
cleanup on those other sites, because they were also 
cooperative in this effort. There was an extra amount of 
dollars that went to the cleanup of Rocky Flats to speed up 
cleanup, so we could point to a success story. The idea was 
that once we got it cleaned up it would free out other dollars 
so that they could proceed at a more rapid pace in getting 
their cleanup problems handled. So I hope that you keep that in 
mind when you are putting together your budgets and working 
with those other areas.

                   GLOBAL NUCLEAR ENERGY PARTNERSHIP

    Can you give us an update on where the Department is on the 
Global Nuclear Energy Plan proposed by the administration 
several years ago?
    Mr. Rispoli. Unfortunately, Senator, I cannot. I am not----
    Senator Allard. Can you, Mr. Sproat?
    Mr. Sproat. Just so I am clear, Senator, are you talking 
about the Global Nuclear Energy Partnership?
    Senator Allard. Yes, I am.
    Mr. Sproat. That is not under my area of responsibility and 
I would prefer that if you would like an update on that, let me 
take that question for the record and ask Assistant Secretary 
Spurgeon to come back and brief you on that. That is under his 
area of responsibility.
    Senator Allard. This is where we have the MOX and all that 
and it is now a MOX Plus facility.
    Mr. Sproat. Yes, sir.
    Senator Allard. All right. If you could respond to the 
record, I would appreciate it.
    [The information follows:]

                     Advanced Fuel Cycle Initiative

    The Global Nuclear Energy Partnership (GNEP) is funded under the 
Advanced Fuel Cycle Initiative (AFCI) within the Office of Nuclear 
Energy. AFCI activities are currently focused on developing a detailed 
roadmap for implementing the GNEP initiative, including supplying 
information to support a Secretarial decision on the path forward for 
GNEP. The Secretarial decision on the path forward for GNEP, and 
subject to compliance with all applicable law and regulation, longer-
term, AFCI activities are anticipated to include supporting supply 
arrangements among nations to provide reliable fuel services worldwide 
for generating nuclear energy. There has already been considerable 
progress internationally to encourage such arrangements.
    The GNEP Statement of Principles has been endorsed by Japan and 
France and is currently being considered by Russia, China, and the 
United Kingdom. A U.S.-Russian Action Plan was submitted to President 
Bush and President Putin in December 2006. Similar action plans are 
being prepared for Japan and France. Domestically, the Department has 
sought input from the private sector to assist the Department in 
developing an appropriate business model for the proposed nuclear fuel 
recycling center and advanced recycling reactor components of GNEP, 
including potential scope, cost, schedule, and technical risk.
    DOE is also working with the Nuclear Regulatory Commission (NRC) to 
provide information regarding potential commercial separations plants 
and advanced reactor concepts. DOE is working to develop a Memorandum 
of Understanding on interactions with the NRC for GNEP similar to that 
which is in place regarding the Next Generation Nuclear Plant.

    Mr. Rispoli. I would point out that the MOX facility in 
particular at the Savannah River site is an NNSA project, and I 
think that all of it is kind of held together and has to be 
dealt with in the context of the nuclear future for the Nation. 
But the MOX project in particular, if you have a question on 
it, that would be appropriate for the NNSA.
    Senator Allard. Okay, I appreciate it. And it all has to 
happen together.
    Mr. Rispoli. I think they are all interconnected, yes, sir.
    Senator Allard. Yes. And I think that we need to look at 
reprocessing our nuclear rods. We have got technology now where 
we can, with the reprocessed rod we bring the waste stream down 
to 5 percent. It is highly toxic, but we bring it down to 5 
percent, which I think helps take care of some of our storage 
issues. And with the new technology it is much more difficult 
to convert to a nuclear weapon, I understand. So I think that 
it would help quell some of the opposition that we have had in 
the past when we looked at reprocessing rods.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Allard, thank you very much.
    We are coming up on some very big decisions in these areas, 
the MOX facilities, Global Nuclear Energy Partnership (GNEP) 
and Reliable Replacement Warhead program (RRW), many of which 
are related and have significant consequences. We likely will 
be holding some hearings in this subcommittee on those very 
issues. I have not set a date, but I expect to do that.
    Let me just say that I went to graduate school in Colorado, 
knew of and saw Rocky Flats at the time, and about 2 weeks ago 
flew over Rocky Flats on a commercial airline going from Denver 
to North Dakota. It is quite remarkable to look down and see 
what has been done at that site. I was duly impressed, and I 
appreciate your raising that issue. That is, I think, an 
example of great success.

                     MISSED MILESTONES CONSEQUENCES

    Mr. Rispoli, you heard the comment that I and my colleague 
Senator Domenici offered about the 23 percent reduction over 4 
years in funding. I respect that you are here to represent the 
President's request to Congress and you would not be a very 
diligent subordinate if you did not fully support that. But 
clearly there are consequences to that, and can you tell me the 
milestones that will be missed? You talked about meeting 90 
percent of the milestones. What about the milestones that are 
missed, and is the budget request simply a reflection that 
these are lesser priorities than the other issues?
    Mr. Rispoli. Mr. Chairman, if I may address it this way, 
everywhere that we operate we have milestones that are 
established by some sort of an agreement, whether it be a tri-
party agreement with the EPA and the State or a consent order 
with the State or some other agreement. We have milestones. And 
intrinsic, built into all of those agreements generally is a 
provision to renegotiate milestones as you face technical 
difficulties and the State recognizes that you have made every 
effort to comply.
    So a normal process is in fact that we need to recognize 
that and address milestones that for one reason or another 
cannot be met.
    Senator Dorgan. Yes, but this is not about technical 
difficulties. I am talking about funding.
    Mr. Rispoli. Yes, I understand.
    Senator Domenici. And with so much cleanup work yet to be 
done and your description to Senator Allard of the big projects 
yet to be started, how does one justify reducing funding for 
these things? How do you justify it?
    Mr. Rispoli. I understand the question, yes, Senator. What 
we did was--and this may not be on the mark to answer your 
question. What we did was we recognized all the milestones and 
within those milestones we applied a risk-based approach to 
where do we get the greatest risk reduction for the funds that 
you appropriate and give us to operate our program.
    In so doing, there were some milestones that we believe 
related to low-risk activities, generally but not always, 
generally D&D of a building, for example, or D&D of a number of 
buildings. And those came to the bottom of the list. So when it 
was time to make budget decisions, we tried to focus the 
resources where the greatest risk reduction would be and leave 
for the lower end some of the D&D and other related types of 
activities.
    And you are correct that the budget could not cover all of 
those, but that is the rationale that we used.
    Senator Dorgan. But that is still not quite responsive. You 
are talking about how you focused. I am asking the question of 
why, given the body of work in front of us--which, and I am new 
to this, but it appears to me to be very substantial--why on 
earth would we be talking about a 23 percent reduction in 
funding over 4 years?
    Mr. Rispoli. Yes, sir, it is a significant difference when 
you look across the years. I would point out that the annual 
cost for funding, for example, Rocky Flats, Fernald, all these 
other closure sites, was about $1 billion a year and those 
sites did complete. So when you look at the difference between 
a year or 2 ago and today, we would certainly recognize that $1 
billion worth of annual requirement basically was completed, 
and so we had to redirect our resources and attention to other 
places.
    Senator Dorgan. But would you agree it is counterintuitive, 
given the amount of work and given the fact that we will miss 
milestones, not for technical reasons but because we are 
suggesting this is not a high enough priority to even maintain 
level funding, to be talking about budget cuts in this area?
    Mr. Rispoli. I understand your question, Senator, and I am 
not disagreeing with your point at all. But I would also point 
out that at the time those milestones were set up it assumed 
technologies that did not exist or in some cases, like at 
Hanford, we have had to use two or even three technologies 
instead of one. We assumed that certain regulatory things would 
be in place. They were not in place. There were extra 
quantities of things that had to be done that resulted in 
consuming more resources to get the work done.
    So there are many, many factors to this that led to a 
funding profile that got us to where we are today.
    Senator Dorgan. Is the reduction in funding in recent years 
a component of what has led to the estimated increase in the 
life cycle costs of the program?
    Mr. Rispoli. Any life cycle cost is a balance--I believe 
again you are correct--it is a balance between the amount that 
you can provide to that project on its funding curve and the 
life and the duration of the project. Certainly, in general if 
you have a shorter duration you would have a lower cost.
    Senator Dorgan. Do not misunderstand the intent of my 
questions. Because we have got competing interests for funding 
in this subcommittee, with some very big projects and some very 
important ones, I am trying to understand the circumstances 
that have led to certain requests, in this case a request for a 
budget cut in an area that seems to me to be in significant 
need of perhaps, at minimum, level funding, given the workload 
in front of us.
    Well, you have done the best you can to avoid directly 
answering my questions. But I think if I can find an 
interpreter I will understand what you have said. Again, I am 
not making fun of you. I understand your role here. Your role 
here is to support the President's budget. Ours is to try to 
evaluate with limited resources and nearly unlimited needs and 
wants, how to allocate and economize.
    So I appreciate you being here. And I did start in a very 
positive way, talking about Rocky Flats.
    Mr. Rispoli. Yes, sir. Thank you.
    Senator Dorgan. When we get these projects completed and 
you look at it, it is almost breathtaking to see because you 
would not believe it could be done until you have seen it after 
the fact. And I appreciate that.
    Mister--is it ``SPROUT'' or ``SPROAT?''
    Mr. Sproat. ``SPROAT.''

                    YUCCA MOUNTAIN UPDATED BASELINE

    Senator Dorgan. Mr. Sproat, does the Department of Energy 
plan to update these 6-year-old cost estimates for the project 
before it submits the license application?
    Mr. Sproat. Yes, Senator, we do. As a matter of fact, when 
we set the new best achievable milestones schedule for the 
repository last summer, basically at that point in time we were 
rebaselining the project, saying--taking a look at how long it 
would take to build the repository, the railroads, the 
transportation infrastructure. That required us to go back and 
take a look at what our budget authority request annual 
requirements should be between now through repository 
construction.
    We did that. We had it reviewed by an independent outside 
engineering construction firm. We incorporated their comments. 
That work has been completed. I just got released from the 
Office of Management and Budget this week to release those 
figures. Right now what we are doing is packaging those figures 
in a way that when people read it they can make sense out of 
it, and I suspect we will be able to send that revised budget 
authority request case flow up here to the Hill within the next 
2 weeks.

  YUCCA MOUNTAIN REDUCTION IN FISCAL YEAR 2008 TRANSPORTATION REQUEST

    Senator Dorgan. The fiscal year 2007 budget request for the 
program sought $67.7 million for transportation. In 2008 you 
are requesting $15 million for transportation. Can you describe 
to me what that precipitates, what does that mean?
    Mr. Sproat. The basic reason that reduction was made is 
because we do not need the money in fiscal year 2008.
    Senator Dorgan. Okay, so it is a timing issue.
    Mr. Sproat. That is exactly right. The primary reason is 
that in early--in 2006, we were prepared to make a record of 
decision of selecting what is called the Caliente route, the 
Nevada Rail Line route through Nevada to the repository. At 
that point in time, though, the Walker River Payute Tribe, who 
owns the land, came to us and said: We would like you to 
evaluate an alternative route through our reservation. They had 
previously not been willing to do that.
    As a result, and taking a look at that potential route, we 
see a significant opportunity for both schedule and dollar 
savings. So we are currently doing an environmental impact 
review of that route. As a result, that is pushing off the 
record of decision for the Nevada Rail Line for about a year.
    So we are putting a lot of money into transportation this 
year through the environmental impact statement work, but the 
record of decision to decide which rail line we are going to go 
with is not going to be made until probably about a year plus 
from now, and therefore we do not need as much money in 
transportation as we did in 2007.
    Senator Dorgan. A quick question. Does the DOE have the 
authority to commence construction of a rail spur to Yucca 
Mountain in the absence of the NRC construction authorization 
for the repository?
    Mr. Sproat. We believe we do. However, we have requested 
clarification of that authority in our legislation that we sent 
up here to the Hill yesterday. We do believe we have that 
authority, but we suspect that without clear legislative 
direction we will probably end up in some legal lawsuits and 
litigation regarding that. So that is why we are including that 
in our legislation.
    Senator Dorgan. Your program will not be a stranger to 
legal action, will it?
    Mr. Sproat. No, sir, it will not.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Dorgan. Let me thank both of you very much for 
being here and for being involved in these programs. Both are 
important programs.
    Do my colleagues have any additional questions?
    If not, we will be sending some additional questions to you 
and ask for your response.
    We will leave the record open until this Friday, March 9, 
at 5 o'clock, so the questions can be submitted.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
              Questions Submitted to Hon. James A. Rispoli
             Questions Submitted by Senator Byron L. Dorgan
                      los alamos missed milestones

    Question. Mr. Rispoli, the Department has proposed $140 million for 
Los Alamos cleanup, which is insufficient to the cleanup milestones 
contained within the Consent Order the Department, has entered into 
with the State in 2005. According to the June 15, 2006 baseline for the 
project, which assumes completion of all the Consent Order Milestones, 
the budget for Los Alamos should be $283 million more than double the 
request. If the Department remains on the current path proposed as part 
of the fiscal year 2007 and fiscal year 2008 budgets, cleanup 
milestones will be missed and the cleanup will be delayed by 2 years 
beyond the Consent Order deadline of 2015. Mr. Rispoli, I am not sure I 
understand how you can justify a budget that forces the Department to 
miss agreed upon milestones and will result in fines and other 
penalties from the State. Please clarify.
    Answer. The President's request for fiscal year 2008 for LANL is an 
appropriate amount and is based on the Consent Order requirements in 
the budget year and the site contractor's performance since assuming 
responsibility for cleanup in mid-fiscal year 2006. The contractor 
continues to develop the legacy cleanup program baseline, and when 
complete later this year we anticipate that a new baseline will be 
validated. We anticipate that this will be accomplished in time to 
inform the fiscal year 2009 budget process.
    The budget level that your question refers to for Consent Order 
compliance ($283 million) is consistent with an amount that the Los 
Alamos site contractor has identified as part of a proposed revision to 
the legacy cleanup program cost and schedule baseline which it 
submitted to the Los Alamos Site Office. This revised amount addresses 
all aspects of cleanup scope at the site (soil and water remediation, 
legacy transuranic waste disposition, and decontamination and 
decommissioning), not only the environmental restoration activities 
that are subject to the requirements of the Consent Order. This 
revision has undergone an external independent review by the 
Department's Office of Engineering and Construction Management that 
revealed a number of deficiencies that require corrective actions.
    Question. Mr. Rispoli, can you tell me how you intend to keep 
cleanup on schedule with the budget baseline you have offered in the 
2008 budget?
    Answer. The Los Alamos site contractor has developed and submitted 
to the Los Alamos Site Office a proposed revision to the legacy cleanup 
program cost and schedule baseline. This revision has undergone an 
external independent review by the Department's Office of Engineering 
and Construction Management that revealed a number of deficiencies that 
require corrective actions. That process is continuing, and when 
complete later this year we anticipate that a new cost and schedule 
baseline will be validated. We anticipate that this will be 
accomplished in time to inform the fiscal year 2009 budget process.

                  RENEGOTIATING THE LANL CONSENT ORDER

    Question. Last week, I spoke with Secretary Bodman about the 
challenges facing the Los Alamos National Lab in complying with the 
various cleanup milestones. It was his belief that he needed to take 
action to find a workable cleanup strategy within the existing budget 
constraints. I believe it is important for the Department to implement 
a cleanup strategy that is sustainable within the existing budget 
constraints.
    I expect the State to push back in a very public fashion and I 
understand their frustration, but no matter how many fines or penalties 
the State levies it will not do anything to cleanup the sites. We need 
a partnership between the State and the Department to negotiate 
realistic cleanup goals. Can you tell me what your plan is to 
prioritize cleanup at LANL and work with the State on a path forward?
    Answer. The Department is committed to the cleanup of the Los 
Alamos National Laboratory. Our priorities at the site are to reduce 
risks, to improve our performance such that we can meet the 
requirements of the Consent Order, and to accomplish these goals 
efficiently. To meet these priorities, we have to make some changes. 
These changes have started already, and include personnel changes on 
the environmental side at the contractor level. We have also made a 
significant management change at the Los Alamos Site Office with the 
reassignment of Dan Glenn, previously the Pantex Site manager, to Los 
Alamos. He brings a fresh perspective to assessing and addressing the 
problems at Los Alamos. He also brings his experience in developing and 
implementing ideas leading to the successful resolution of complex 
issues at the Pantex site in Texas that should improve performance at 
Los Alamos. We anticipate that this kind of fresh start at both the 
contractor and Government management levels will foster improved 
relations with the State.
    We are in the midst of the validation process for a new, 
comprehensive and integrated baseline for the complete scope of the Los 
Alamos legacy waste cleanup. When this baseline is in place, we expect 
to see improved activity planning and efficient execution of the 
cleanup work at the site.
    Question. Based on your current budget request, will this result in 
delaying the cleanup beyond the existing 2015 deadline?
    Answer. We recognize that without efficiencies in work performance 
at the site and an executable comprehensive cost and schedule baseline 
for the work, we will have difficulty in meeting the overall cleanup 
date of 2015 in the consent order. When the Department completes its 
review of the new proposed cleanup baseline for Los Alamos and is able 
to validate it later this year, we will assess whether the completion 
date for overall cleanup of the site as contained in the consent order 
is still achievable.

                                 FINES

    Question. Mr. Rispoli, it is my understanding that there is some 
sort of provision in the consent order that says if the Department does 
not provide adequate clean up funding the Lab cannot be held 
responsible. Is that true?
    Answer. Section III.K.3 of the consent order states that no 
provision of the consent order shall require the Government to obligate 
or pay funds in contravention of the Anti-Deficiency Act, and that 
payment or obligation of funds by the Government for activities 
required by the Order shall be subject to the availability of 
appropriated funds. Based on this provision, the site cleanup 
contractor would not be responsible for non-performance if sufficient 
funds were not appropriated.

         LOS ALAMOS NATIONAL LABORATORY (LANL) SAFETY CONCERNS

    Question. Mr. Rispoli, it is my understanding that the relationship 
between the New Mexico Environment Department and Los Alamos is not 
very good. I understand that LANL had safety concerns with the drilling 
operation, what were those concerns and do you believe they were 
justified?
    Answer. The hazards involved in drilling four boreholes between two 
pits at Material Disposal Area C were a major concern for the 
Department. The borehole drilling was potentially dangerous because it 
risked penetrating the radionuclide inventory and compressed toxic 
gases at the landfill. Material Disposal Area C is a 1960s vintage 
disposal area and, as is the case with many of these old landfill 
sites, the actual distance between the pits cannot be determined 
reliably from the design drawings from that era. Similarly, the 
integrity of the soil ridges between the waste pits is difficult to 
determine after so many years since placement of the wastes.
    Therefore, the contractor had to rely on geophysics data to 
determine the safe drilling locations for the boreholes. Upon review of 
the geophysics data by all parties, Los Alamos Nuclear Services, NNSA, 
and the New Mexico Environment Department, resolution was reached that 
placement of four boreholes between waste pits in one location of 
Materials Disposal Area C could be accomplished after taking worker and 
environmental risks into account. The drilling was done using a geo-
probe to confirm the existence of the boundary between waste pits 
without entering the waste pits. Safety procedures required that the 
geo-probe insertion and subsequent drilling be done by workers in level 
B protection consisting of breathing air and chemical protection suits. 
The use of level B protection also involves physical risk to the worker 
during the drilling activities as their vision and movement is 
restricted by their trailing breathing air hose apparatus. To mitigate 
this additional hazard, mockups were conducted of all activities with 
the protective clothing to ensure that the work could be conducted 
safely and that the field procedure could be implemented as written. 
These precautions and appropriate work planning enabled the drilling to 
be completed without incident.
    The Department requires that all work be done safely at every site. 
Given the nature of the hazards involved, I believe the concerns were 
justified and the contractor took the appropriate safety measures to 
implement the requirements set forth in the consent order.

                           TECHNICAL AREA-21

    Question. Mr. Rispoli, in fiscal year 2007 the Department requested 
$18 million in funding to initiate decommissioning of TA-21--a former 
plutonium facility--in order to characterize the extent of the 
contamination beneath this facility. However, the fiscal year 2008 
request does not provide any funding to support this cleanup which has 
a cleanup deadline of 2013. Every year this project goes without 
funding is another year delay in the consent order. Mr. Rispoli, your 
fiscal year 2007 budget requested $18 million for TA-21 cleanup, since 
Congress didn't spell out how the funds are to be used, can you tell me 
if you intend to use the funds to begin the D&D work?
    Answer. As part of the prioritization process that is associated 
with the development of the Environmental Management budget, my office 
examines the requirements to ensure safety, to provide essential 
services, and to undertake environmental compliance and risk reduction 
activities throughout the DOE complex. Typically, decontamination and 
decommissioning activities are not associated with high priority risk 
reduction requirements. The work at Technical Area 21 at Los Alamos 
falls into this latter category. In addition, Los Alamos does not have 
an approved cost and schedule baseline for the work. Once the cost and 
schedule estimates are independently verified, we will have a higher 
confidence level. We anticipate that this independent verification will 
be accomplished in time to inform the fiscal year 2009 budget process. 
At that time, the Department will review activities for Los Alamos 
National Laboratory cleanup including the decontamination and 
decommissioning work scope.
    Question. Without any funding requested in your fiscal year 2008 
budget how do you intend to recover from this delay and meet the 2013 
consent order milestone for this project?
    Answer. As part of the prioritization process that is associated 
with the development of the Environmental Management budget, my office 
examines the requirements to ensure safety, to provide essential 
services, and to undertake environmental compliance and risk reduction 
activities from across the DOE complex. Typically, decontamination and 
decommissioning activities are not associated with high priority risk 
reduction requirements. The decontamination and decommissioning work at 
Technical Area 21 does not yet have an approved cost and schedule 
baseline. An appropriate confidence level in the scope, cost, and 
schedule profiles for these work activities is needed before we 
proceed. This confidence would be indicated by the validation of the 
baseline that is expected later this year, in time to inform the fiscal 
year 2009 and out-year budget process. At that time the Department will 
review activities for Los Alamos National Laboratory cleanup and 
whether the completion data for overall cleanup of the site as 
contained in the Consent Order is still achievable.

                     LOS ALAMOS NATIONAL LABORATORY

    Question. Mr. Rispoli, the lab has been working hard to accelerate 
the disposal of high priority drums of TRU waste at WIPP. 
Unfortunately, this involves sorting through more than 12,000 drums of 
waste and then verifying their contents. This has been slowed by the 
NNSA Site Office's unwillingness to accept responsibility for the 
accelerated cleanup plan. It is my understanding that the Defense 
Nuclear Facility Safety Board supports the accelerated approach, but 
the NNSA Site Office has not yet signed off on this new plan.
    Do you favor the accelerated approach proposed by the contractor 
and do you believe it will result in the acceleration of shipments to 
WIPP?
    Answer. The Administrator of the NNSA has directed his Headquarters 
Chief of Nuclear Safety to work with the NNSA site office and the 
contractor to identify and implement an acceptable plan to dispose of 
the high priority drums presently stored above ground in fabric 
structures. This approach is focused on accelerating the safety 
documentation as well as the necessary upgrades to nuclear facilities 
required to characterize and package high priority drums for disposal 
at the Waste Isolation Pilot Plant (WIPP). In addition, the NNSA team 
is poised to evaluate and approve innovative approaches in the work 
plan that meet the intent of federal requirements and DOE Orders to 
ensure that the project is achievable. The project is now on an 
aggressive schedule with the goal of initiating shipments of high 
priority waste later this year and completing by January 2008. These 
shipments are among the Department's top priorities for waste shipments 
destined for disposal at the WIPP.

                   ACCELERATION OF TRU WASTE TO WIPP

    Question. What can your office do to help the LANL site office 
become more comfortable with this strategy?
    Answer. The Office of Environmental Management and the National 
Nuclear Security Administration (NNSA) are collaborating in various 
aspects of the project to ship the high priority drums of above-grade 
stored legacy transuranic waste to the Waste Isolation Pilot Plant. In 
addition, the Waste Isolation Pilot Project office will support the 
shipping schedule that will be identified under this project. I have 
directed my staff to be mindful of your concerns regarding the LANL 
site office in their continuing regular interactions with NNSA.

                             SANDIA CLEANUP

    Question. Mr. Rispoli, your fiscal year 2008 budget does not 
provide any funding to complete the remaining cleanup project at Sandia 
National Lab. It is my understanding you are waiting for the State of 
New Mexico to give the final approval before you place a cap on the 
landfill. Why has the State not approved this final action and what 
source of funding do you intend to use to complete this project?
    Answer. The Sandia Site Office has been working closely with the 
New Mexico Environment Department (NMED) to satisfy additional requests 
for information to support the proposed regulatory decision to allow 
placement of a permanent cap on the mixed waste landfill. This has 
resulted in additional scope being added to the project in the form of 
a requirement for development and application of a contaminant fate and 
transport model, collection of soil gas samples from the landfill and 
immediate surroundings, participation in a formal public review and 
comment resolution on the Corrective Measures Implementation Plan, a 
Corrective Measures Implementation Report, and a Long-term Monitoring 
and Maintenance Report. These products must be delivered and accepted 
by NMED and the process activities completed before approval can be 
provided for installation of the final landfill remedy. Some measures, 
such as preparation of the landfill surface to allow emplacement of the 
cap sub-grade soil layer, have been permitted by the regulators, and 
this work has been completed.
    We had not anticipated the extent of these additional requirements. 
Unexpended project funds from fiscal year 2006 are being used to fund 
this work but the additional scope requires funds that exceed the 
available balances. Under the Revised Continuing Appropriations 
Resolution, 2007, the Department has provided an additional $4.7 
million to support these activities.

               CONSOLIDATION OF SPECIAL NUCLEAR MATERIAL

    Question. Mr. Rispoli, the Department has inventories of special 
nuclear material including plutonium, highly enriched uranium and spent 
fuel that exceeds our national security mission needs and is very 
costly to secure. As I have expressed several times before, I believe 
the Department needs to work quickly to consolidate and dispose of this 
material to reduce costs and eliminate the proliferation risks. Can you 
please explain to the subcommittee your strategy for the consolidation 
of this material and challenges you face in consolidating this 
material?
    Answer. The Department's Nuclear Materials Disposition and 
Consolidation Coordination Committee (NMDCCC), established in 2005 to 
address nuclear material consolidation and disposition issues, recently 
completed an implementation plan (IP) for consolidation and disposition 
of surplus non-pit, weapons-usable plutonium. While the IP recommends 
consolidating this material to the Savannah River Site (SRS), any 
decisions on proposed consolidation and disposition are subject to 
review under the National Environmental Policy Act (NEPA), other 
applicable laws, and a final determination by the Secretary.
    Challenges facing the Department for consolidating plutonium 
include completing required environmental reviews, assuring support 
from the South Carolina Congressional delegation and local authorities, 
and complying with legal requirements. For example, prior to shipping 
additional weapons-usable plutonium to SRS, Public Law 107-107, 
National Defense Authorization Act for Fiscal Year 2002, requires 
submittal to Congress of a plan for disposal of plutonium that would 
have been disposed of using the Plutonium Immobilization Plant that was 
cancelled in 2002.
    With respect to highly enriched uranium (HEU) and spent fuel, the 
deputy secretary has approved the Enriched Uranium (EU) Disposition 
Project which would provide for continued operation of SRS's H-Canyon 
facilities. As part of the project, surplus HEU materials currently 
managed by the Environmental Management Office, the National Nuclear 
Security Administration (NNSA), and Naval Reactors will be sent to SRS 
and processed in the H-Canyon facilities for disposition purposes. 
Spent fuel currently stored at the Idaho National Laboratory (INL), and 
in various domestic facilities and other countries, that is aluminum-
clad (this is the only type of cladding material that is compatible 
with the H-Canyon processing capabilities) will also be shipped to SRS 
and be disposed of through processing in H-Canyon, along with the 
aluminum-clad spent fuel already at SRS. The uranium from processing 
the spent fuel and HEU materials is planned to be blended down to a low 
enrichment and sold to the Tennessee Valley Authority for use in 
manufacturing fuel for its commercial nuclear plants. As a result, 
additional waste will be generated from continued operation of H-
Canyon, but that amount is relatively small. Approximately 225 
additional Defense Waste Processing Facility (DWPF) canisters will 
result from operation of H-Canyon through 2019. There is sufficient 
space in the site tanks to store this waste prior to transferring it to 
DWPF for vitrification. The EU disposition plan also includes 
processing in H-Canyon of approximately two metric tons of weapons-
usable plutonium that cannot be disposed of using the Mixed-Oxide (MOX) 
Fuel Fabrication Facility or the proposed Plutonium Disposition Project 
due to specific contaminants. Therefore, H-Canyon processing is 
critical to our efforts to consolidate plutonium.

      MIXED-OXIDE (MOX) FUEL FABRICATION FACILITY VS.VITRIFICATION

    Question. Mr. Rispoli, your budget requests $15 million to perform 
design work on the Plutonium Vitrification Demonstration project in 
South Carolina. As I understand it, this facility will be able to 
handle up to 13 tons of plutonium that can not be processed through the 
MOX plant. Could you explain to the subcommittee why you are pursuing 
this project and why this is not an acceptable solution for the 34 tons 
of U.S. surplus weapons grade plutonium the United States and Russia 
have agreed to eliminate from their stockpiles.
    Answer. We have proposed the Plutonium Vitrification Disposition 
Project in order to be able to disposition plutonium that, because of 
isotopic content and impurities such as chlorides and fluorides, are 
not suitable for processing in the MOX Fuel Fabrication Facility as 
currently designed. This plutonium was to be disposed of using the 
Plutonium Immobilization Plant, but construction of that facility was 
cancelled in April 2002 when the decision was made to proceed with only 
the MOX plant. We are required by law to have a disposition path out of 
the State for all surplus plutonium stored at the Savannah River Site 
(SRS) and the proposed Plutonium Vitrification Disposition Project, 
together with the MOX plant and continued operation of the H-Canyon 
facilities, will ensure there is a disposition path for all plutonium 
currently at SRS or that may be sent there in the future. The proposed 
Project is subject to review pursuant to the National Environmental 
Policy Act (NEPA) and compliance with other applicable laws relating to 
potential consolidation and disposition of plutonium at SRS.
    The current concept, process, and planned capability of the 
Plutonium Vitrification Disposition Project would be unsuitable to 
disposition the additional 34 metric tons (MT) of surplus plutonium 
planned to be processed in the MOX facility. Significant changes would 
be required in the design, footprint, process and throughput of the new 
project. It is envisioned that the proposed Plutonium Vitrification 
Disposition Project would be designed to fit in the basement of an 
existing facility and sized to disposition up to approximately 13 MT of 
lower purity plutonium by vitrifying it in lanthanide borosilicate 
(LaBS) glass. LaBS glass is well suited for plutonium with higher 
quantities of impurities and does not degrade the quality and 
performance of the product for long-term storage and disposal. However, 
when mixed with plutonium, LaBS glass produces a significant radiation 
field. This effect is manageable for vitrifying the plutonium not 
suitable for the planned MOX facility, but would not be desirable for a 
significantly longer campaign such as the additional 34 MT of higher 
purity plutonium. That is because in order to maintain the radiation 
exposure to operators as low as reasonably achievable, it would take 
about an additional 20 years of operation to vitrify the additional 34 
MT of plutonium or require a substantially more complex and costly 
facility. Therefore, adding the 34 MT of surplus plutonium planned to 
be processed in the MOX facility to the 13 MT planned to be vitrified 
would likely require changing the waste form from glass to ceramic in 
order to eliminate high radiation.
    Although the reaction that causes the high radiation levels does 
not occur when the plutonium is mixed with ceramic, the ceramic does 
not accept impurities and maintain its quality as well as glass. Much 
of the 13 metric tons of plutonium contains significant impurities that 
could result in cracking of the ceramic pellets. The cancelled 
Plutonium Immobilization Plant that was to immobilize plutonium in 
ceramic required blending a large amount of pure plutonium with the 
impure plutonium in order to dilute the impurities to an acceptable 
level. There is not enough pure Pu in the 13 metric tons to dilute the 
impurities to an acceptable level.
    The lanthanide borosilicate glass planned to be used in the 
vitrification process is preferred over ceramic for vitrifying 
relatively lower quantities of impure plutonium not only because it can 
accommodate more impurities than the ceramic, but also because addition 
of the lanthanide allows a larger amount of plutonium to be included in 
each can of glass. Also, the change would require construction of a new 
and larger facility (similar to that of the cancelled Plutonium 
Immobilization Plant) vs. modification of an existing facility because 
production of the ceramic waste form requires much more space than 
exists in the K-Area facility.
    Additionally, the Plutonium Vitrification Disposition Project would 
utilize the can-in-canister concept where small cans of vitrified 
plutonium are placed inside Defense Waste Processing Facility (DWPF) 
canisters and the canisters are then filled with high activity waste 
glass. The cans of vitrified plutonium need the high-level waste glass 
to surround them in order to qualify the waste package for disposal at 
Yucca Mountain; this high-level waste glass also provides resistance to 
proliferation. With a ceramic waste form and the additional 34 MT of 
plutonium, approximately 100,000 cans of ceramified plutonium would be 
generated, requiring 3,600 DWPF canisters of high activity glass. That 
would require processing beyond the planned DWPF completion date of 
2026 by approximately a decade and require about 2,000 more DWPF 
canisters of glass waste than will be produced from processing all of 
the Savannah River tank waste. Taking into account the additional waste 
resulting from the entire Enriched Uranium Disposition Project through 
2019, which is approximately 200 to 250 additional DWPF canisters, 
there is simply not enough high-level radioactive glass at SRS to over-
pour the plutonium glass or ceramic generated from 13 MT of plutonium 
to meet the spent fuel standard required to assure proliferation 
resistance in the repository. Since neither the plutonium-ceramic nor 
the vitrified plutonium can be sent to the geologic repository without 
being inside DWPF canisters filled with glass waste, this approach is 
not viable.
    For all these reasons, the proposed Plutonium Vitrification 
Disposition Project is not viable for the disposition of the plutonium 
destined for the MOX plant.

        WASHINGTON STATE--HIGH LEVEL WASTE VITRIFICATION PROJECT

    Question. Mr. Rispoli, the Department has faced enormous challenges 
in containing the cost of this massive project to vitrify the millions 
of gallons of high level waste stored in underground tanks in 
Washington. This project was originally budgeted for $5.7 billion in 
2003. Today, after several independent evaluations, the Department 
estimates that the total projects cost will be $12.3 billion and will 
be completed by 2019. Can you please explain why the original baseline 
was so low and why you believe this new cost estimate will not escalate 
further over the next decade?
    Answer. The Department of Energy, with the advice and assistance of 
the U.S. Army Corps of Engineers has implemented several major 
initiatives to ensure that we fully understand what is required to 
successfully complete the Waste Treatment Plant (WTP) project and begin 
plant operations.
    The major reasons for the increases in the estimated cost and the 
delays in schedule result from faulty initial estimates and the overly 
optimistic treatment of uncertainty and risk for the following: (1) 
design of novel technology for a large, complex nuclear-chemical plant 
(pulse jet mixing pumps, non-Newtonian fluids, etc), (2) quantity, 
procurement and availability of equipment and materials, (3) 
availability and productivity of professional and craft labor, and (4) 
environmental and safety regulatory compliance (fire proofing, seismic 
ground motion, etc.). These were further aggravated by conditions 
created by deficiencies in the acquisition strategy and management 
approach. It is important to note that the March 2003 performance 
baseline was established with a design completion of 30 percent, using 
a majority of estimating tools which were based on parametric costs 
from similar facilities. The December 2006 performance baseline was 
established with a design completion of 78 percent, using a majority of 
estimating tools which were based on costs from material take-offs. 
This provides a more highly detailed cost estimate that enables higher 
confidence.
    The Department has increased its confidence in the success of this 
project as a result of implementing several key actions that addressed 
its project management capability, management of calculating technical 
risks, and the project's cost and schedule baseline. Over the past 18 
months, the Department has retained a broad range of external, senior 
professionals from private industry, academia, and other government 
agencies to thoroughly review the key elements of the WTP. Key 
initiatives to reinforce the confidence in the project are as follows:
Strengthen Project Management
    The Assistant Secretary for Environmental Management has 
established a Headquarters' senior-level waste treatment and 
immobilization plant oversight team. The team is fully engaged in all 
aspects of the project;
    The Department commissioned an independent expert team that 
completed an after action fact finding review to better understand the 
management issues associated with the project. All of the 
recommendations have been or are in the process of being addressed;
    DOE has recruited talented personnel in the areas of contracting, 
procurement, contract law, and project management;
    The WTP contractor is implementing an earned value management 
system (EVMS) to track variances to the baseline. The system is being 
independently certified to be fully compliant with the requirements of 
the American National Standards Institute/Environmental Industry 
Association (ANSI/EIA) 748-A-1998. This system, currently in use by the 
contractor as a management tool, will accurately report project cost 
and schedule performance;
    A structured daily, weekly, and monthly project reporting system is 
in place, and a Quarterly Performance Review is conducted by the 
Assistant Secretary for Environmental Management;
    The Secretary of Energy is engaged in the WTP project and meets 
with senior principals of Bechtel National Inc. on a regular basis.
Verify Technology
    The Department commissioned a broad group of distinguished 
independent senior professionals from private industry and academia to 
thoroughly review all technology aspects of the WTP process flow sheet. 
The flow sheet report was finalized in March 2006 and identified 28 
issues that have already been or currently are being addressed;
    DOE is on a path forward to having the final earthquake seismic and 
ground motion criteria approved by the Secretary of Energy. DOE has 
retained the U.S. Army Corps of Engineers to oversee the drilling of 
one core hole and three deep boreholes to confirm the geophysical 
properties of the layers of bedrock below the WTP project site. 
Borehole drilling commenced in June 2006 and was completed in October 
2006. We forecast that the Secretary of Energy will approve the final 
seismic and ground motion criteria by September 2007;
    The Defense Nuclear Facilities Safety Board has been actively 
engaged in the seismic issue and all safety related technical issues 
from the commencement of the project. Also, I meet monthly with the 
Board to share information and discuss issues.
Establish a Credible Project Cost and Schedule
    In August 2006, the U.S. Army Corps of Engineers delivered to the 
Department an independent review of the contractor's May 2006 estimate-
at-completion, which provided a qualified validation of the cost and 
schedule baseline--with the addition of $650 million and three months 
of schedule contingency.
    In addition, two other external independent reviews were 
implemented (March 2006 and October 2006) to confirm the quality of the 
WTP cost and schedule baseline and project management systems.
    In December, 2006, as a result of the independent reviews, the 
Department's Office of Engineering and Construction Management 
validated a final total project cost of $12.263 billion and schedule 
completion date of November 2019. The revised project cost and schedule 
was approved by the Deputy Secretary of Energy on December 22, 2006.
    Based on the actions we have taken and the reviews by independent 
industry experts, the project is now reinforced with a strong project 
management framework, a clear understanding of the technical issues, 
and a credible project cost and schedule baseline.

                 WASHINGTON STATE--TRI-PARTY AGREEMENT

    Question. Mr. Rispoli, in 1989 the Department entered into a Tri-
Party Agreement between the U.S. EPA, the State of Washington and DOE 
to set cleanup milestone for Office of River Protection. Since the 
agreement has been signed, the Department has been forced to work 
through hundreds, if not thousands of changes to this agreement and 
renegotiate revisions to the compliance orders. It seems inevitable 
that the Department will miss milestones and will be forced to 
renegotiate the consent agreement when neither party fully understands 
the extent and the nature of the existing contamination. It appears 
that the Department is accepting an enormous amount of risk to sign-up 
to an enforceable agreement without understanding the full extent of 
the cleanup. How has the Department worked through the thousands of 
missed agreed upon milestones?
    Answer. The Department of Energy (DOE) remains committed to the 
cleanup at the Hanford site in accordance with the Tri-Party Agreement 
(TPA). It is important to remember that the TPA is a ``living'' 
document that was designed to be updated. For example, there are TPA 
milestones that call for new milestones to be defined at specified 
points in time. Similarly, new sections are added to the TPA, as 
appropriate. To clarify, DOE has missed relatively few agreed upon 
milestones. In fact, DOE has completed 96 percent of the milestones 
within schedule from the start of the TPA. There were originally 161 
milestones, and today there are 950 completed milestones and 235 
milestones to go for a total of 1,185 milestones. In accordance with 
the terms of the TPA, there have been 442 approved change requests, 6 
amendments, and 3 modifications known as ``Director's Determinations.''
    As with any ``living'' document, the TPA parties explore 
opportunities to improve safety, effectiveness, efficiency, and 
flexibility of the Hanford cleanup. To do this, the parties engage in 
regular dialog to ensure the milestones make sense and further the 
intent of the TPA.
    Question. What has been the process for the Department to engage 
the other interested parties to work out an achievable solution?
    Answer. The Department of Energy (DOE), the Environmental 
Protection Agency, and the State of Washington have engaged in a series 
of large and small group meetings to understand technical and schedule 
issues regarding the Waste Treatment Plant, supplemental treatment for 
low-activity tank waste, tank waste retrieval, and groundwater 
remediation. The goal of all of the parties remains safe, timely, risk-
informed cleanup of the Hanford site.
                                 ______
                                 
            Questions Submitted to Hon. Edward F. Sproat III
             Questions Submitted by Senator Byron L. Dorgan

                           SECOND REPOSITORY

    Question. Mr. Sproat, I read an article that quoted you as saying 
that the threat of a second nuclear fuel repository would convince 
Congress to approve the legislation the administration sent up 
yesterday. I couldn't disagree more with this analysis. For Members to 
take your threat seriously it must be believable and I don't believe 
your statement is. Of all the options we have before us today, 
including GNEP, do you believe this administration would endorse the 
creation of a second repository?
    Answer. This was never intended to be threat of a second 
repository; rather, it was meant to communicate a statutory 
requirement. Section 161(b) of the Nuclear Waste Policy Act (NWPA), as 
amended, requires the Secretary of Energy to report on the need for a 
second repository. That report is required to be submitted to the 
President and the Congress between January 1, 2007 and January 1, 2010. 
Without passage of the provisions in the administration's proposed 
legislation that would remove the administrative capacity limitation 
provisions in section 114(d) of the NWPA limiting the capacity of Yucca 
Mountain to 70,000 metric tons of heavy metal until a second repository 
is operational, this report will likely conclude that a second 
repository is needed to dispose of the commercial spent nuclear fuel 
from the existing fleet of commercial reactors and the remaining 
defense high-level radioactive waste that cannot be disposed within the 
70,000 metric ton limit. While GNEP spent nuclear fuel recycling has 
the potential to reduce the volume of spent nuclear fuel to be disposed 
of in Yucca Mountain it will be many years before there is sufficient 
information on which to make reasonable projections as to when and to 
what extent advanced recycling facilities will be deployed.

                      YUCCA MOUNTAIN AUTHORIZATION

    Question. Yesterday, the administration sent up legislation, 
identical to the version from the 109th Congress, which I introduced on 
behalf of the administration. It is my understanding that passage of 
this legislation is critical if you are to meet the 2017 operations 
goal you have set for the project. If Congress fails to enact this 
legislation, what impact will this have on the opening or operations of 
Yucca Mountain?
    Answer. First, without passage of the administration's legislation 
the Nuclear Regulatory Commission cannot grant a construction 
authorization for Yucca Mountain because permanent land withdrawal is 
required as a condition to receive a construction authorization. 
Second, without the funding reform proposed in the legislation, the 
Department is highly unlikely to have sufficient budget authority 
available to construct the repository to our best-achievable schedule 
for initial repository operation in 2017.

                     CANISTER HANDLING AND STORAGE

    Question. Mr. Sproat, the budget discusses a new canister storage 
approach that will simplify the canister handling operations at Yucca 
Mountain. Can you please explain this new approach has [sic] how it 
will impact the overall project costs? What do utilities think of this 
new approach?
    Answer. The canistered approach, utilizes the transportation, aging 
and disposal (TAD) canister for the receipt of most of the commercial 
spent nuclear fuel expected to be disposed of at Yucca Mountain. The 
use of the TAD canister will eliminate hundreds of thousands of 
individual spent fuel assembly handling operations at the Yucca 
Mountain facilities, which will allow the Department to simplify the 
design of the repository surface facilities and their operations. This, 
in turn, will result in less costly facilities and reduced operating 
costs. Regarding overall program costs, any increased program costs for 
the purchase of the TAD canisters is expected to be off-set by 
programmatic savings in facility construction and operations. The 
Department cannot speak for utilities as to their views; on this 
approach. However, during the development of the TAD performance 
specification requirements, the Department did attend several industry 
meetings to receive technical input for the TAD performance 
specification. At these meetings the industry was generally supportive 
of the canister development effort.

                       GOVERNMENT LEGAL LIABILITY

    Question. Mr. Sproat, included in your statement you indicate that 
Federal Government's legal liability for failure to accept spent fuel 
by 1998 will increase by $500 million annually after 2017. This will be 
on top of the existing $7 billion liability. Why isn't the 
administration doing anything in the meantime to reduce or eliminate 
this well defined problem? Why wait until 2017?
    Answer. If the Department starts accepting spent nuclear fuel in 
2017, we estimate that the liability to the U.S. Government to be $7 
billion; that liability will grow by $500 million per year every year 
the repository is further delayed. The Department believes that the 
best approach to limiting the Government's liability is to begin 
acceptance of commercial spent fuel at the repository at the earliest 
possible date. The passage of the administration's proposed legislation 
to ensure the timely opening of Yucca Mountain is the most significant 
step urgently needed to limit the liability. The Department also 
believes that an interim storage facility at another location could not 
be sited, licensed, constructed and begin operations appreciably sooner 
than the Yucca Mountain repository begins accepting spent fuel. 
Moreover, under the current law, an interim storage facility could not 
be constructed until after NRC grants a construction authorization for 
the repository and then only an amount of spent fuel equivalent to 
10,000 metric tons of heavy metal could be accepted at the storage 
facility until the repository begins operations, at which time the 
limit would increase to 15,000 metric tons.
    Question. Why hasn't the administration considered an interim 
strategy to stage the fuel or set it aside for recycling in light of 
the looming legal liability?
    Answer. The Department's best-achievable schedule for commencing 
operations of the Yucca Mountain repository is 2017. The Department 
believes that interim storage could not be undertaken appreciably 
sooner than when Yucca Mountain could be open. Moreover, under the 
current law, an interim storage facility could not be constructed until 
after NRC grants a construction authorization for the repository and 
then only an amount of spent fuel equivalent to 10,000 metric tons of 
heavy metal could be accepted at the storage facility until the 
repository began operation, at which time the limit would increase to 
15,000 metric tons.

                            NEVADA RAIL LINE

    Question. Mr. Sproat, this budget requests $15 million to support 
work on the Nevada rail line, yet the legislation you have just sent to 
the Hill requires Congress to withdraw land for this rail line. Why 
would we spend any amount of funding in this project until we are 
certain that we can get access to the land we will need to build the 
project?
    Answer. The President's fiscal year 2008 budget requests $15 
million for transportation projects, which includes $5 million for work 
with States, Tribes, and other stakeholders on national transportation 
planning efforts. The $10 million requested for work on the Nevada Rail 
Line Project will be used to complete the environmental impact 
statement on possible rail alignments. This information is necessary to 
define the ultimate path a rail line to Yucca Mountain would take in 
Nevada and to support the granting of either a permanent withdrawal of 
lands or a right-of-way for the Nevada Rail Line. The proposed 
legislation would withdraw land for the repository but not for the 
Nevada Rail line.

                                LAYOFFS

    Question. Mr. Sproat, the Department recently announced layoffs of 
contractor staff in order to restructure the workforce. Can you tell me 
how this will impact the project and if you expect additional layoffs 
during this fiscal year?
    Answer. The OCRWM prime contractor, Bechtel SAIC Company (BSC) 
located in Nevada developed a workforce restructuring plan (WRP) that 
is consistent with the level of funding provided in fiscal year 2007. 
The WRP will result in layoffs of approximately 65 BSC employees. This 
will allow BSC to assess and realign, where necessary, those skills 
that are essential to successfully completing the License Application 
by February 2008. The funding reduction and the WRP have no impact on 
the license application submission, but the program will defer non 
license application related activities in fiscal year 2007. Because the 
funding received by the program for fiscal year 2007 was $100 million 
less than the President requested, we do anticipate making additional 
reduction in force later in fiscal year 2007 and in fiscal year 2008. 
The timing and size of those further reductions are currently being 
evaluated.

                          SUBCOMMITTEE RECESS

    Senator Dorgan. This hearing is recessed.
    [Whereupon, at 3:32 p.m., Wednesday, March 7, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2008

                              ----------                              


                        THURSDAY, MARCH 15, 2007

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:33 p.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Byron L. Dorgan (chairman) 
presiding.
    Present: Senators Dorgan, Landrieu, Reed, Domenici, 
Bennett, Craig, and Allard.

                      DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army

                       Corps of Engineers--Civil

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

              OPENING STATEMENT OF SENATOR BYRON L. DORGAN

    Senator Dorgan. I'm going to call the hearing to order. 
This is the hearing of the Subcommittee on Energy and Water 
Development and we will take testimony today on the budget 
request and justifications for the Department of the Army, Army 
Corps of Engineers, the Bureau of Reclamation and the 
Department of the Interior.
    My ranking member is Senator Domenici. He is, at the 
moment, in the Budget Committee. They are marking up the budget 
document. I don't know how long he will be there but it might 
take some while. So he has indicated it's fine to begin without 
him because he is busy on budget votes.
    I'm joined by my colleague, Senator Craig, and we have two 
panels today. I am going to have both panels seated together 
and I appreciate that. We have a series of six votes today that 
start at 3:45 and because of that, I think because we have six 
votes that will be sequential, they will take us probably 1\1/
2\ hours to 1 hour and 40 minutes to complete. I want to try to 
do a good hearing and a complete hearing but try to complete it 
as efficiently and effectively as we can before we start those 
votes. Because if we would have to recess and then come back 1 
hour or 1 hour-plus later, that would not be helpful to 
anybody.
    I'd like to make a brief opening statement and then I'm 
going to call on Senator Craig.
    Today the subcommittee will take testimony on the fiscal 
year 2008 budget request for the Army Corps of Engineers and 
the Bureau of Reclamation. General Strock is with us today from 
the Corps of Engineers. Sir, my understanding is that this will 
be your final hearing with us and you will soon retire from the 
Army. Let me thank you for your service to our country and 
thank you for appearing before this committee a number of times 
and we look forward to a smooth transition with your successor, 
General Van Antwerp when he is confirmed.
    Let me say that the President's budget for the Corps of 
Engineers proposes $4.87 billion. That's nearly $500 million 
below the enacted level of fiscal year 2007, $5.34 billion. The 
highlights of the fiscal year 2008 budget include general 
investigations' proposed 45 percent decrease, $90 million down 
from the current year--excuse me, proposed at $90 million, $73 
million less than the current year enacted. General 
construction is proposed at a 38 percent decrease from current 
year. We have a very substantial backlog in unconstructed 
projects. I'm very concerned about both of these 
recommendations, frankly.
    The Mississippi River and Tributaries is proposed at $260 
million, a decrease of 35 percent from the current year. The 
O&M, operations and maintenance general, is proposed at an 
increase of 25 percent. This increase is somewhat less than it 
sounds because of the $286 million shifted from the 
construction account to O&M for the sake of budget 
transparency.
    The fiscal year 2008 budget request is assembled along the 
Corps' eight business lines. I'm going to put a statement in 
the record speaking about the investigation accounts and the 
construction funding and some other thoughts about it.
    Let me just say even as I include my whole statement in the 
record that I'm disappointed by the budget because frankly, as 
I think our witnesses know and I hope the administration knows, 
we have a substantial amount of work to be done. We have 
projects that are not yet funded. We have projects underway 
that are not funded adequately and I frankly don't understand 
the budget request. I understand we have to tighten our belts 
but I also understand there is a very big difference between 
spending and investing and I think when you take a look at all 
of the appropriations requests that we receive in the Congress, 
if ever you would classify projects as investments, you would 
classify these projects as investments. These, in many cases, 
are water projects, public works projects that will provide 
dividends for years to come to this country. So I don't view 
this as typical spending. We are providing flood control, we 
are saving substantial money in flood control projects, we are 
investing in water projects that enhance our economy and 
provide opportunities that weren't otherwise provided.

                           PREPARED STATEMENT

    So I'm very concerned about the budgets. With respect to 
the Bureau of Reclamation, again I think we have budgets here 
that come to us probably expecting the committee to add back 
funding. Maybe that's the case. If it is, my hope will be that 
this expectation is realized because I think the Corps of 
Engineers and Bureau of Reclamation are critical to a whole 
range of things that represent the public good in our country 
and we must provide adequate funding for the things that they 
undertake on our behalf.
    I'm going to call on Senator Craig and ask that my entire 
statement be part of the record.
    [The statement follows:]

             Prepared Statement of Senator Byron L. Dorgan

    Good afternoon--the hearing will come to order.
    Today, the subcommittee will take testimony on the fiscal year 2008 
budget requests for the U.S. Army Corps of Engineers and the Bureau of 
Reclamation.
    The hearing will consist of two panels. The first panel will 
consist of witnesses from the U.S. Army Corps of Engineers.
    Testifying for them will be: John Paul Woodley, Principle Deputy, 
Assistant Secretary of the Army for Civil Works, and Lieutenant General 
Carl A. Strock, Chief of Engineers for the U.S. Army Corps of 
Engineers.
    At the conclusion of this panel, we will observe a short break and 
seat the panel for the Bureau of Reclamation. Testifying for the Bureau 
of Reclamation will be: Mark Limbaugh, Assistant Secretary for Water 
and Science, Department of the Interior, and Robert Johnson, 
Commissioner, Bureau of Reclamation. Mr. Woodley, General Strock, thank 
you for appearing before us today.
    General Strock, I understand that this will be your final hearing 
with us as you will soon retire from the Army. I want to thank you for 
your service to this committee and the Nation. I look forward to a 
smooth transition with your successor, General Van Antwerp, when he is 
confirmed.
    The President's budget for the Corps of Engineers proposes $4.87 
billion, which is $469 million below the fiscal year 2007 enacted 
amount of $5.34 billion.
    Several of the highlights for the fiscal year 2008 budget include:
  --General investigations is proposed at $90 million, down 45 percent 
        ($73 million) from the current year. Even if we were going to 
        consider the proposed cancellation of $50 million of fiscal 
        year 2007 funds, this account would still be 20 percent below 
        the fiscal year 2007 enacted amount.
  --Construction, general is proposed at $1.523 billion, a decrease of 
        38 percent ($813 million) from the current year which certainly 
        doesn't help to reduce the more than $40 billion backlog in 
        unconstructed projects. I am not sure whether we will be able 
        to make up the entire deficit in this account.
  --Mississippi River and Tributaries is proposed at $260 million, a 
        decrease of 35 percent ($137 million) from the current year.
  --Operation and maintenance, general is proposed at $2.471 billion, 
        an increase of about 25 percent ($496 million). I wish this is 
        as good as it sounds. However, this increase is inflated by 
        $286 million that was shifted from the construction account to 
        O&M for the sake of ``budget transparency''.

                 BUDGET PRIORITIES FOR FISCAL YEAR 2008

    Your fiscal year 2008 budget request is assembled along the Corps' 
eight business lines: Emergency Management; Environment; Flood and 
Coastal Storm Damage Reduction; Hydropower; Navigation; Recreation; 
Regulatory; and Water Supply.
    In the GI account, the budget proposal arbitrarily limits funding 
to $90 million. The only justification used is that since the Corps 
civil works program already has a large backlog of ongoing construction 
work, there is no need to study and design additional projects. There 
are many reasons why this is a shortsighted budgetary view:
  --The planning program in the Corps' GI account is the entry point 
        for Federal involvement in solutions to water resource problems 
        and needs.
  --It assumes that the country will stop growing and that new 
        investment opportunities will not be present.
  --In truth, as the country grows, new investment opportunities will 
        be presented and some previously authorized projects may no 
        longer make sense or may be less competitive.
    Construction funding within the budget was prioritized primarily by 
the use of the benefit to cost ratio. While this is a more equitable 
way to compare projects than previous measures, it still does not get 
to the heart of your budgeting dilemma. That is, that your program has 
been underfunded for years.
    Your budget proposes that 16 high priority projects consume some 51 
percent of the construction budget. The remaining 52 projects that you 
recommended have to split the remaining 49 percent of the construction 
budget. This will lead to these 52 projects limping along for another 
year. Meanwhile the other 250 or so projects that are on-going from 
previous years are not even addressed in the budget.
    Our national water resource needs continue to grow as our 
population grows and shifts around the country. The American Society of 
Civil Engineers has again graded our infrastructure as a ``D''. How 
does this budget address this abysmal grade? It doesn't!
    You are budgeting in large measure as if there is a finite group of 
projects that once they are finished, investment in our national 
infrastructure will be complete. Then all that will be required is 
funding to maintain this infrastructure. You are not providing 
sufficient funding to maintain what we have, much less provide for the 
future.
    Finding a new and better prioritization system will not solve the 
problems of consistently underfunding infrastructure. Sure you may 
succeed in prioritizing your agency into irrelevance, but that does not 
help the problem nor can we allow that to happen.
    The only way to solve this problem, is for the administration to 
provide more funding for these infrastructure investments. If they 
won't then the Congress will certainly try. Note that I did not say 
spend more money, I said invest more. The funding that we provide is 
for investments not only for today but in our future.

                            BUDGET PROPOSALS

    The fiscal year 2006 budget has a number of proposals, some new for 
this year, some recycled from previous years.
    The budget has again proposed the elimination of continuing 
contracts in favor of multiple year contracting. I will have a number 
of questions for you concerning this proposal.
    The budget again proposes a beach policy that has been previously 
rejected by the Congress. I think it is safe to assume that the 
modified policy will also be rejected.
    Finally, I find it fascinating that the administration has proposed 
considerable authorizing language as a part of the budget. Perhaps you 
should consider proposing an administration WRDA bill to address these 
needed authorizing provisions.
    It is obvious from this budget proposal that the Congress has 
considerable work ahead. The President has proposed considerable 
infrastructure investments, unfortunately, they are not in our country, 
but in Iraq and Afghanistan.
    I look forward to working towards preparing a responsible budget 
for our national infrastructure.
    Our second panel will consist of witnesses from the Department of 
Interior. Testifying will be: Mark Limbaugh, Assistant Secretary for 
Water and Science, Department of the Interior, and Robert Johnson, 
Commissioner, Bureau of Reclamation.
    The two major project accounts for the Department of Interior under 
the jurisdiction of the Energy and Water subcommittee are the Central 
Utah Completion Act Account and the Bureau of Reclamation.

                        THE CENTRAL UTAH PROJECT

    The Central Utah Project Completion Act of 1992 authorized this 
element of the Colorado River Storage Project to be completed by the 
Central Utah Conservancy District.
    The Central Utah Project Completion account is proposed at $43 
million for fiscal year 2008, an increase of nearly 27 percent ($9 
million) from the current year.
    The increase in this account is primarily due to construction 
contracts planned for the project in fiscal year 2008.

                       THE BUREAU OF RECLAMATION

    The Bureau of Reclamation is proposed at $958.4 million for fiscal 
year 2008, a decrease of 6.5 percent ($66.6 million) from the current 
year.
    This budget includes: $816.2 million for the Water and Related 
Resources account, $51.6 million for the Central Valley Project 
Restoration Fund, $31.8 million for the California Bay-Delta 
Restoration account, and $58.8 million for the Policy and 
Administration account.
    Major projects funded in Water and Related Resources include: $27.2 
million for the Central Arizona Project, $124.8 million for 
California's Central Valley Project, $58 million for the Animas-La 
Plata Project in Colorado, $55 million for rural water projects, and 
$77 million for continued work to ensure the safety of dams.

                      ISSUES FOR FISCAL YEAR 2008

    I am concerned that funding for rural water projects is declining. 
We have people in my home State that can see Lake Sakakawea from their 
house, yet 50 years after the lake was constructed, they still have to 
haul water to their homes each and every week whether it is -35 degrees 
or 100 degrees outside. It should not be that way. Not in this country. 
The budget proposal further drags out completion of these projects and 
the delivery of fresh water to these impacted communities.
    Under Water 2025, $11 million is proposed to meet the challenge of 
preventing crises and conflicts over water in the west. Ten million 
dollars of the funds are proposed for the 50:50 challenge grant program 
which relies on local initiative and innovation to identify and 
formulate the most sensible improvements for local water systems.
    Another area of the budget that has been seriously underfunded is 
water reclamation and reuse. Water reclamation and reuse is a vital 
component of increasing near term water supplies for the West. The 
Federal share for most of these projects is about 25 percent or $20 
million whichever is less. In many cases, the few Federal dollars 
involved are the difference as to whether these projects can move 
forward or not. The Federal dollars are leveraged against other funding 
to make these projects a success. Only about $10 million was provided 
for these projects in the budget request. Congress normally provides 
$25-30 million.
    The administration has proposed $1 million to develop and 
administer the Loan Guarantee program. This new program is intended to 
address aging water infrastructure issues in the West. It was 
authorized by the Reclamation Rural Water Supply Act of 2006.
    Title I of this act requires the Secretary to establish a formal 
rural water supply program for rural water and major maintenance 
projects. The Secretary is also to establish programmatic and 
eligibility criteria along with other reporting requirements and 
criteria for appraisal and feasibility studies. I am glad to see that 
you are funding this initiative and hope that you will include rural 
water supply as a bigger part of your budget for fiscal year 2009.
    I look forward to working with you gentlemen as we prepare the 
fiscal year 2008 budget for your agencies.

                    STATEMENT OF SENATOR LARRY CRAIG

    Senator Craig. Mr. Chairman, I will adhere to your 
admonition about time because we do want to hear these folks 
who are before us. I must also say to the panel, a lot of what 
the Senator has said, I agree with. It's probably the result of 
him coming from the High Plains and me coming from the high 
desert. Like no one else, our States appreciate and understand 
water.
    But let me welcome, of course, Assistant Secretary Woodley 
and General Strock. Again, thank you for your service. 
Commissioner Johnson and the Assistant Secretary are in the 
back of the room and he'll be forward. Are you going to have 
everybody at the table?
    Senator Dorgan. Yes.
    Senator Craig. Then Commissioner Limbaugh, why don't you 
move down and let me ask that you go over to the right side. 
There you go. So we'll get you all at the table. There we go.
    I want to thank you all for your willingness to work with 
our offices on a variety of issues from the Corps helping 
deliver clean drinking water to many of my Idaho constituents, 
the Bureau of Reclamation storing Idaho's most precious 
resource, water. I sat through several budget hearings so far 
and one trend remains true. Declining budgets are a part of the 
current fiscal reality that we're all dealing with. I realize 
and understand you all are forced to balance priorities with 
the current fiscal constraints and I appreciate what a 
difficult task that must be.
    Now, let me turn my focused comments specifically to the 
Army Corps of Engineers. First I want to start by thanking 
members of the Corps that have served our country in Iraq. You 
will play a vital role, not only domestically but 
internationally as we pursue stable environments, both in 
Afghanistan and Iraq. We thank you for your service there.
    Second, thank you for your diligent work in my State, as I 
mentioned earlier, in drinking water, waste water 
infrastructure. Some may argue this isn't part of your core 
mission. However, you all do phenomenal work in my State and 
generally, complete projects within a reasonable timeframe, 
within budget, for which I commend you and thank you.
    The Corps also plays a vital role in operating and 
maintaining our national waterways. As has just been mentioned, 
Idaho ships a significant number of products on the Snake and 
Columbia systems. It is important that we maintain those while 
dredging has gone on. The reality of infrastructure 
maintenance, aging locks, aging gates--all of those kinds of 
things to sustain a very critical transportation system is 
important. So I am concerned about that. I'm also concerned 
about the administration's proposal that would create a lock 
tax. As you know, shippers already pay a fuel tax. I'm 
interested in hearing how this new tax will access--will be 
accessed as well as where the revenue might end up. If it's 
just a new source of revenue that gets dumped into the General 
Fund, I don't think any of our users are all that interested. 
Dedicated revenues that end up replacing used infrastructure 
makes--could make some sense.
    The Bureau of Reclamation, as you know well, Commissioner 
and Assistant Secretary--water is what makes the West what it 
is today. We have a problem with aging infrastructure and I 
appreciate your helping find long-term solutions to those 
problems. I commend the administration for acting quickly, 
setting up a guarantee loan program. Although it is only set at 
$1 million, I'm encouraged. I think it is a step clearly in the 
right direction that begins to address some of the ways we 
solve some of these problems. We need to continue looking for 
creative financing packages for our water users so they can 
rehabilitate their infrastructure in an efficient and cost 
effective way.
    We in the West are no longer at the frontier. We are a 
developed economy in an aging infrastructure and with a 
developed economy, it has resources properly leveraged that can 
assist itself when government becomes a cooperating partner and 
I'm not here nor are any of my users here to suggest that the 
government ought to be the only partner or that it ought to be 
the only supplier of resource. I've been supportive of the 2025 
Program as well as Title 16 Program and I hope to see those 
programs continue to yield results.
    One last thing--this is not only directed at your agencies 
but also at the Federal agencies that have provided budgets in 
Congress. It's been difficult to decipher which programs have 
received increases, which have received decreases and more 
specifically, what was enacted in the 2006 versus what is 
requested now. This information isn't widely available, has 
been tough not only to find areas to look at, understand and/or 
criticize. These are the realities of what we're working with 
now and I hope the administration works on this for the next 
year so that we all have a better understanding of where we 
are.
    Thank you, Mr. Chairman. I look forward to all of your 
testimony.
    Senator Dorgan. Senator Craig, thank you very much. To my 
other colleagues, let me say that we have six votes starting at 
3:45 and so I want to try to see if we can get the witnesses to 
make their statements and I want to make sure we have ample 
opportunity at the hearing to ask questions as well. If you'd 
like to make a very brief opening statement, I'll recognize 
that but I----
    Senator Bennett. I've got a page and a half, Mr. Chairman. 
Will that be enough?
    Senator Dorgan. Why don't you proceed?

                 STATEMENT OF SENATOR ROBERT F. BENNETT

    Senator Bennett. Okay. I just wanted to address the Army 
Corps and thank them for their excellent work in Utah. We've 
had their quick response to devastating floods in Washington 
County and I enjoyed working with them.
    But I do have a significant issue that I want to call 
General Strock's and Secretary Woodley's attention to. The Army 
Corps has made good progress in rural Utah by providing 
financial and technical assistance for water infrastructure 
projects. Rural Utah 595 Program--you're nodding, you're 
familiar with that. It makes it possible for rural cities and 
counties to build the critical water projects that otherwise 
they couldn't afford. So the Congress has supported this 
program and I'm asking for the subcommittee's continued 
support.
    But the committee--although the committee has provided 
specific funding to the rural Utah account, on two separate 
occasions, the Army Corps has reprogrammed nearly $1.5 million 
to spend on projects in other States and these missing funds 
could complete several infrastructure projects in Utah that are 
now on hold because of the lack of funding.
    I raised this concern with the Division Commander, 
Brigadier General McMahon, last week when he came to see me and 
he assured me that the Corps was simply borrowing the money and 
the funds would be replaced. I'm not familiar with that process 
in the Federal system, how you borrow money that has been 
earmarked for one purpose and use it for another. Maybe we 
ought to be paid interest. I don't know. But I understand that 
the Corps has formulated its work plan for fiscal 2007 and in 
that work plan, it did not include funds to restore those that 
were borrowed from the rural Utah account. So I want to raise 
the issue here and have a response on the record for replacing 
the funds and would like to know when they will be replaced.
    So that's my issue, Mr. Chairman and I raise it and it's 
there to be responded to either in the question period or if 
we're all drawn away from votes, on the record. Thank you very 
much.
    Senator Dorgan. Senator Bennett, thank you very much. 
Senator Landrieu.

                           PREPARED STATEMENT

    Senator Landrieu. I'm going to waive my opening statement 
and will submit it for the record but I do need several 
questions after the testimony.
    [The statement follows:]

             Prepared Statement of Senator Mary L. Landrieu

    Thank you Chairman Dorgan and thank you Assistant Secretary Woodley 
and General Strock for appearing before this committee. Today, we are 
here to discuss the very important matter of the Corps budget and I 
appreciate the chance to share my thoughts with this committee and with 
you the leadership of the Corps.
    I find the President's budget request for the Corps for fiscal year 
2008 is once again woefully inadequate. The President's budget requests 
a mere $4.87 billion while we all know there is substantially more 
needed. Additionally, I am troubled by the continuation of the downward 
trend of investment in the country's infrastructure, specifically civil 
works projects. Specifically for Louisiana, several important projects 
have either been omitted or under funded in the President's budget 
request, such as: Morganza to the Gulf, SELA and others. While the 
Corps' regular fiscal year 2008 budget request is cause enough for 
concern, I am also concerned by the supplemental appropriations request 
the administration is asking Congress to consider.
    The piece-meal approach to hurricane recovery is still not 
sufficient. The request to reprogram, rather than appropriate $1.3 
billion to cover identified shortfalls for hurricane recovery is not a 
sustainable approach. Many Americans and most Louisianans recall the 
President's commitment from Jackson square to rebuild the devastated 
region; however the rhetoric has not matched the funding request. 
Robbing Peter to pay Paul will not provide adequate protection to 
prevent future disasters. Accordingly, I urge the Corps to deliver an 
estimate of the full cost of hurricane protection system recovery so 
Congress can develop a comprehensive path forward.
    The path forward must involve comprehensive wetland, navigation and 
flood protection planning. In the fiscal year 2006 Energy and Water 
Appropriations bill, this committee directed the Corps to develop a 
``full range of flood control, coastal restoration and hurricane 
protection measures exclusive of normal policy considerations'' in 
close coordination with the State of Louisiana. I remain concerned that 
the Corps will not follow Congress' intent in either presenting options 
outside of normal policy considerations or in the development of plans 
with sufficient input for Louisiana's interests. The State of Louisiana 
has developed its plan for flood control, coastal restoration and 
hurricane protection and I urge the Corps to incorporate the State's 
findings into its Cat 5 plan.
    Finally, I look forward to having some of my questions answered and 
I again thank the chair for the opportunity to speak here today.

    Senator Dorgan. General Strock and Secretary Woodley, thank 
you both for appearing on behalf of the Corps. We appreciate 
once again your willingness to be here to present statements 
and answer questions. Why don't you proceed as you wish, Mr. 
Secretary.

                STATEMENT OF HON. JOHN PAUL WOODLEY, JR.

    Mr. Woodley. Thank you, Mr. Chairman. I will be very brief 
and I want to begin my testimony by paying tribute to my 
colleague who is retiring later this year, the 51st Chief of 
Engineers. Lieutenant General Strock will be concluding a very 
distinguished career in which he served as Chief of Engineers 
at perhaps the most challenging time in that agency's long and 
storied history. So I want to put that directly before the 
committee before I say anything else.
    Senator Dorgan. Mr. Secretary, the committee shares your 
gratitude and the ``thank you'' that we would offer General 
Strock for his service to our country as well.
    Mr. Woodley. We have requested a 3 percent increase over 
our fiscal year 2007 request this year, providing $2.5 billion 
for the operation and maintenance account as the chairman 
noted, which represents a 9 percent increase over our request 
for fiscal year 2007.
    We have prioritized to--first of all, dam safety to 
continue to repair those projects that are in danger and to 
work on--give special priority to those projects that protect 
human health, human safety and property.
    We've also asked for an increase of funding in the 
Regulatory program to $180 million. This funding will be used 
for permit processing, enforcement and compliance, including 
our increased workload that we are anticipating because of 
recent judicial determinations by the Supreme Court.

                           PREPARED STATEMENT

    We will be working with stakeholders as Senator Craig 
indicated, to see what kind of solution we can reach about the 
depletion of the Inland Waterways Trust Fund. That fund is very 
close to depletion because of the enormous investments that we 
are making in the Nation's waterway infrastructure and 
construction and some kind of action, we believe, should be 
taken to address the question of the depletion of that fund.
    So those are the highlights of our submission. I very much 
appreciate the opportunity to appear and address your questions 
today.
    [The statement follows:]

           Prepared Statement of Hon. John Paul Woodley, Jr.

    Mr. Chairman and distinguished members of the subcommittee: thank 
you for the opportunity to testify before the subcommittee, and to 
present the President's budget for the Civil Works program of the Army 
Corps of Engineers for fiscal year 2008.

                                OVERVIEW

    The fiscal year 2008 budget for Army Civil Works provides funding 
for development and restoration of the Nation's water and related 
resources within the three main Civil Works program areas, namely, 
commercial navigation, flood and coastal storm damage reduction, and 
aquatic ecosystem restoration. The budget also supports hydropower, 
recreation, environmental stewardship, and water supply services at 
existing water resources projects owned or operated by the Corps. 
Finally, the budget provides for protection of the Nation's regulated 
waters and wetlands; cleanup of sites contaminated as a result of the 
Nation's early efforts to develop atomic weapons; and emergency 
preparedness. The budget does not fund work that should be the 
responsibility of non-Federal interests or other Federal agencies, such 
as wastewater treatment and municipal and industrial water treatment 
and distribution.
    Total new discretionary funding in the fiscal year 2008 budget is 
$4.871 billion for fiscal year 2008, the highest amount ever in a Civil 
Works budget. Within this total, we have allocated $2.471 billion to 
activities funded in the operation and maintenance (O&M) account. This 
is the highest funding level for operation and maintenance ever 
proposed in a President's budget or enacted by the Congress. It is 9 
percent above the fiscal year 2007 budget level for the O&M account and 
$206 million above fiscal year 2006 enacted, after accounting for the 
$296 million that the budget has proposed to transfer in fiscal year 
2008 from construction to operation and maintenance.
    The budget also includes a fiscal year 2007 recommendation to re-
allocate up to $1.3 billion of emergency supplemental appropriations 
enacted in fiscal year 2006. This would enable the Corps to use 
available, unobligated funds for measures that will provide a better 
overall level of protection for the New Orleans metropolitan area in 
the near-term. This proposal is discussed further below.
    A 5-year budget development plan (FYDP) is under development and 
will be provided to the relevant committees of Congress. The FYDP 
includes two scenarios or projections: one based on the President's 
proposed fiscal year 2008 budget; and one above that level based on the 
most recently enacted appropriations (fiscal year 2006) at the time the 
budget was prepared. The projections are formula driven. They do not 
represent budget decisions or budget policy beyond fiscal year 2008, 
but they can provide perspective on the Army Civil Works program and 
budget.
    Enclosure 1 displays the current estimate for the distribution of 
new discretionary funding among eight appropriation accounts, eight 
program areas plus executive direction and management, and five sources 
including the general fund of the Treasury and trust funds. Enclosure 2 
is a crosscut between appropriation accounts and program areas.

                      PERFORMANCE-BASED BUDGETING

    The fiscal year 2008 budget reflects a performance-based approach 
to budgeting. Competing investment opportunities for studies, design, 
construction, and operation and maintenance were evaluated using 
multiple metrics. We used objective, performance criteria to guide the 
allocation of funds among construction projects (see below).
    The budget includes initiatives leading to the development of a 
more systematic, performance-based budget and improved asset 
management. For instance, to improve investment decision making, the 
budget funds the development of economic models for navigation and 
methods for evaluating the benefits of aquatic ecosystem restoration 
efforts. To help identify, evaluate, and establish priorities for the 
maintenance and rehabilitation of existing flood and storm damage 
reduction, commercial navigation, and hydropower assets, the budget 
provides funding to develop asset management systems and risk-based 
condition indices. Finally, the budget presents information for 
operation and maintenance activities by river basin and by mission 
area, setting the stage for improved management of Civil Works assets 
and more systematic budget development in future years.
    The focus on Civil Works program performance has a number of 
foundations. First, the Civil Works Strategic Plan, which was updated 
in 2004, provides goals, objectives, and performance measures that are 
specific to program areas as well as some that are crosscutting. 
Second, each program area has been assessed using the Program 
Assessment Rating Tool (PART). Summaries of all completed civil works 
program assessments can be found on the administration's new website, 
www.ExpectMore.gov. Both the Civil Works Strategic Plan and the PART-
based program evaluations are works in progress and will continue to be 
updated.

            HIGHLIGHTS--WATER RESOURCES DEVELOPMENT ACCOUNTS

Studies and Design
    The fiscal year 2008 budget provides $90 million for the 
Investigations account and $1 million for studies in the Mississippi 
River and Tributaries account. The budget funds the 67 most promising 
studies and preconstruction engineering and design (PED) activities. 
Performance was assessed based on the likelihood in the near-term of 
meeting the construction guidelines discussed below. For instance, 
among the projects in PED, the projects with benefit-cost ratios of 3.0 
to 1 or higher received funding.
    Within the $90 million, $13 million is for the Louisiana Coastal 
Area study and science program for coastal wetlands restoration; $22 
million is for other project-specific studies and design; $10 million 
is to continue the national inventory of flood and storm damage 
reduction projects; $17 million is for research and development; and 
$28 million is for other coordination, data collection, and study 
activities. Priorities within research and development include the 
Navigation Economic Technologies research program and the development 
of benefit evaluation methods for aquatic ecosystem restoration.
Construction
    The budget provides $1.523 billion in the Construction account and 
$108 million for construction projects in the Mississippi River and 
Tributaries account.
    Many more construction projects have been authorized, initiated, 
and continued than can be constructed efficiently at any one time. The 
funding of projects with low economic and environmental returns and of 
projects that are not within Civil Works main mission areas has led to 
the postponement of benefits from the most worthy projects, and has 
significantly reduced overall program performance.
    To remedy this situation and to achieve greater value to the Nation 
from the Civil Works construction program, the budget focuses 
significant funding on the projects that yield the greatest return to 
the Nation, based upon objective performance criteria. The budget again 
proposes performance guidelines to allocate funds among construction 
projects. The most significant change is the inclusion of benefit-cost 
ratio (BCR) as a metric, rather than remaining benefit-remaining cost 
ratio. The BCR compares the total benefits to the total costs of a 
project at its inception, and provides a way to establish priorities 
among projects.
    Under the guidelines, the budget allocates funds among construction 
projects based primarily on these criteria: their BCR; their 
contribution to addressing a significant risk to human safety or to dam 
safety assurance, seepage control, or static instability correction 
concerns; and the extent to which they cost-effectively contribute to 
the restoration of nationally or regionally significant aquatic 
ecosystems that have become degraded as a result of Civil Works 
projects, or to a restoration effort for which the Corps is otherwise 
uniquely well-suited. The construction guidelines are provided in 
Enclosure 3.
    The construction projects funded in the budget include 6 national 
priorities; 11 dam safety assurance, seepage control, and static 
instability correction projects; and 41 other, high-performing 
projects. The budget also funds ongoing continuing contracts, but no 
new contracts, for 11 projects with BCRs between 1.5 to 1 and 3.0 to 1.
Operation and Maintenance
    The budget proposes $2.471 billion for the Operation and 
Maintenance account and $151 million for maintenance activities in the 
Mississippi River and Tributaries account. Even after adjusting for the 
reassignment of work, discussed below, this amount is the highest 
funding level for operation and maintenance ever proposed in a 
President's budget.
    The budget emphasizes performance of existing projects by focusing 
on the maintenance of key commercial navigation, flood and storm damage 
reduction, hydropower, and other facilities. The proposed funding would 
enable the Army Corps of Engineers to carry out priority maintenance, 
repairs, and rehabilitations, and priority initiatives such as the 
development of asset management systems.
    The operation and maintenance program now includes four types of 
activities that were funded in the Construction program until last 
year. The budget transfers responsibility and funding for these 
activities--compliance with Biological Opinions at operating projects 
pursuant to the Endangered Species Act, rehabilitation of existing 
projects, use of maintenance dredging material, and replacement of sand 
due to the operation and maintenance of Federal navigation projects--
because they are integrally connected to the operation and maintenance 
of Corps projects. The reassignment to the Operation and Maintenance 
program is needed to improve accountability and oversight, reflect the 
full cost of operation and maintenance, and support an integrated 
funding strategy for existing projects. The budget includes proposed 
appropriations language to cover funding for these activities in the 
Operation and Maintenance account.
    The budget proposes that Congress allocate operation and 
maintenance funding by river basin, rather than on a project-by-project 
basis. The justification materials present a current estimate for each 
basin of the distribution of proposed funding among the flood and 
coastal storm damage reduction, commercial navigation, hydropower, 
stewardship, recreation, and water supply program areas. Should 
operation and maintenance work be funded using this framework, managers 
in the field would be better able to adapt to uncertainties and better 
able to address emergencies as well as other changed conditions over 
the course of the fiscal year, consistent with congressional 
appropriations decisions. The Corps has displayed its current project-
by-project estimates for the fiscal year 2008 operation and maintenance 
program on its website.

                       HIGHLIGHTS--PROGRAM AREAS

    The Army Civil Works program includes eight program areas, plus the 
oversight/executive direction and management function. The eight 
program areas are commercial navigation, flood and coastal storm damage 
reduction, environment, recreation, hydropower, water supply, emergency 
management, and the regulatory program. Budget proposals for the nine 
areas are discussed below.
Flood and Coastal Storm Damage Reduction, and Emergency Management
    The fiscal year 2008 budget provides $1.384 billion for flood and 
coastal storm damage reduction, and $45 million for emergency 
management.
    Among the 69 construction projects funded in the fiscal year 2008 
budget, 46 are for flood and coastal storm damage reduction, including 
8 dam safety and seepage control projects and 34 projects that address 
a significant risk to human safety or have high benefit-cost ratios.
    The budget emphasizes natural disaster preparedness and flood and 
coastal storm damage prevention. Specifically, the budget includes $40 
million in the Flood Control and Coastal Emergencies account to fund 
preparedness for flood and coastal emergencies and other disasters. 
This is a 25 percent increase for preparedness activities compared to 
the fiscal year 2007 budget, and is needed to maintain and improve our 
ability to respond to disasters. The budget also includes $20 million 
in multiple accounts to apply lessons learned from Hurricanes Katrina 
and Rita (including the 12 follow-on actions identified by the Chief of 
Engineers and stepped-up cooperation with Federal Emergency Management 
Agency programs for flood plains), $10 million to continue to inventory 
and assess flood and storm damage reduction projects across the Nation, 
and $10 million to continue to assess the safety of the Corps portfolio 
of dams (including improving ordinary, but essential, inspection 
procedures).
    The budget provides funding for all work currently planned to 
remedy the most serious (Action Class I and II) dam safety, seepage, 
and static instability problems at Corps dams. The planning, design, 
and construction of these projects are funded at the maximum amount 
that the Corps estimates that it can use efficiently and effectively.
    The budget continues to support Federal participation in initial 
construction, but not in re-nourishment, at beach nourishment projects 
that provide storm damage reduction or ecosystem restoration outputs.
Commercial Navigation
    The fiscal year 2008 budget provides $2.009 billion for the 
commercial navigation program area.
    The amount budgeted for inland waterway construction projects 
(replacements and expansions in the Construction Account, and 
rehabilitations in the Operation and Maintenance account) is about $418 
million, the highest amount ever included in a President's budget. Half 
of the funding, or $209 million, would be derived from the Inland 
Waterways Trust Fund. The funding in the Inland Waterways Trust Fund 
will not be sufficient after fiscal year 2008 to support this level of 
investment in our principal inland waterways.
    The administration is developing and will propose legislation to 
require the barges on the inland waterways to pay a user fee. The user 
fee will address the decline in the balance in the Inland Waterways 
Trust Fund, which affects the government's ability to finance a portion 
of the continuing Federal capital investment in these waterways. The 
legislation will be offered this spring for consideration by Congress.
    The budget focuses operation and maintenance funding on those 
waterway segments and commercial harbors that support high volumes of 
commercial traffic, with emphasis on the heavily-used Mississippi, 
Ohio, and Illinois waterways. The budget also funds harbors that 
support significant commercial fishing, subsistence, public 
transportation, harbor of refuge, national security, or safety 
benefits.
    The budget continues the policy of funding beach replenishment, 
including periodic re-nourishment, where the operation and maintenance 
of Federal navigation projects is the reason for the sand loss on 
shorelines.
Environment
    The fiscal year 2008 budget provides $514 million for the 
environment program area.
    The budget includes $274 million for aquatic ecosystem restoration, 
of which $162 million is for the Corps of Engineers share of the South 
Florida/Everglades restoration effort. Of this amount, $35 million is 
for the Modified Water Deliveries project, a key element of this effort 
that both the National Park Service and the Corps are funding. The 
budget provides $23 million for the Upper Mississippi restoration 
program and $13 million for the Louisiana Coastal Area restoration 
effort and its science program. The costs of compliance with Biological 
Opinions at existing projects are not included in the above figures. 
The budget includes these costs as part of the joint operation and 
maintenance costs of the affected projects and allocates these costs 
among the program areas served by the projects.
    The budget provides $110 million for environmental stewardship. 
Corps of Engineers-administered lands and waters cover 11 million 
acres, an area equal in size to the States of Vermont and New 
Hampshire. Funded activities include shoreline management, protection 
of natural resources, support for endangered species, continuation of 
mitigation activities, and protection of cultural and historic 
resources.
    The budget provides $130 million for the Formerly Utilized Sites 
Remedial Action Program (FUSRAP) to clean up contamination at sites 
resulting largely from the early atomic weapons program. This funding 
will enable continued progress toward completion of remedial actions at 
a number of sites.
Regulatory Program
    The fiscal year 2008 budget provides $180 million to the Corps 
Regulatory Program to protect wetlands and other waters of the United 
States. This represents a $22 million increase over the fiscal year 
2006 enacted level of $158 million, and a $55 million increase since 
2001. The funding will be used for permit processing, for enforcement 
and compliance actions and for jurisdictional determinations, including 
additional workload necessitated by the Supreme Court's Carabell and 
Rapanos decisions.
    Investing in the Regulatory Program is a win-win proposition. The 
added funds will enable most public and private development to proceed 
with minimal delays, while ensuring that the aquatic environment is 
protected consistent with the Nation's water quality laws.
Recreation
    The fiscal year 2008 budget provides $267 million for recreation 
operations and related maintenance.
    To help finance recreation modernizations, the budget includes an 
initiative based on a promising model now used by other major Federal 
recreation providers such as the National Park Service and the Forest 
Service. The administration is re-proposing legislation for the Corps 
to generate additional revenue to help upgrade and modernize the 
recreation facilities at the sites where this money is collected. 
Specifically, the legislation includes authority for the Corps to 
charge entrance fees and other types of user fees where appropriate, 
and to cooperate with non-Federal park authorities and districts. The 
Corps would keep collections above an annual baseline amount.
Hydropower
    Hydropower is a renewable source of energy. The Civil Works program 
is the Nation's largest producer of hydroelectric energy, and provides 
3 percent of the Nation's total energy needs.
    The fiscal year 2008 budget provides $291 million for hydropower. 
This total includes $159 million for hydropower operation and 
maintenance costs, $43 million for the costs of replacements at four 
hydropower projects, and $89 million for the costs allocated to 
hydropower from multipurpose projects and programs. The replacement 
projects will help to reduce the forced outage rate, which is well 
above the industry average.
Water Supply
    On average, Civil Works projects provide 4 billion gallons of water 
per day to meet the needs of municipal and commercial users across the 
country. The budget includes $4 million for operation and maintenance 
costs allocable to water storage.
Executive Direction and Management
    The fiscal year 2008 budget provides $177 million for the Expenses 
account.
    Within this amount, $171 million is for the management and 
executive direction expenses of the Army Corps of Engineers, both at 
its Headquarters and Major Subordinate Divisions, as well as support 
organizations such as the Humphreys Engineer Center Support Activity, 
the Institute for Water Resources, and the Finance Center.
    In addition, the budget proposes to consolidate funding for 
activities related to oversight and general administration of the Civil 
Works program within the Expenses account, including funding for the 
Office of the Assistant Secretary of the Army (Civil Works). Of the 
$177 million for the Expenses account, $6 million is for the Office of 
the Assistant Secretary of the Army (Civil Works), including some 
indirect and overhead costs that previously were centrally funded by 
the Army.

                        OTHER BUDGET HIGHLIGHTS

Protection of Greater New Orleans
    The fiscal year 2008 budget also recommends, as part of a fiscal 
year 2007 supplemental appropriations package, enactment of a statutory 
provision to authorize the Secretary of the Army to reallocate up to 
$1.3 billion of the emergency supplemental appropriations that were 
provided in fiscal year 2006, but that remain unobligated. The 
recommended statutory language would reallocate unobligated funds 
appropriated by Public Law 109-234 (the ``Fourth Emergency Supplemental 
Appropriations Act of 2006'') to fund activities specified in Public 
Law 109-148 (the ``Third Emergency Supplemental Act of 2006''), and 
would reallocate unobligated funds among certain activities specified 
in the third emergency supplemental appropriations act of 2006. Within 
the total amount that would be reallocated, $270 million would be 
reallocated from the Construction account to the Flood Control and 
Coastal Emergencies account.
    The fiscal year 2006 emergency supplemental appropriations were 
initially allocated based on ``rough order of magnitude'' estimates by 
the Corps of the amount of work that would be required to rebuild, 
complete, and raise the levees in New Orleans. Their estimate of the 
cost of the work necessary to accomplish these objectives is expected 
to increase greatly as a result of various engineering forensic 
investigations and assessments, a review of new storm surge data, 
increased material costs, and other factors. The earlier cost and 
schedule estimates have proven to be low, and actionable re-estimates 
will not be available until this summer. Without the reallocation of 
the fiscal year 2006 funds that were allocated in law, important work 
to increase the level of protection in some areas could not be 
completed in concert with similar work in other areas. The proposed re-
allocation would enable the Corps to best apply available funding to 
those measures that will increase in the near-term the overall level of 
protection for the New Orleans metropolitan area.
General Provisions
    The budget includes bill language to authorize continuation of 
limits on reprogramming with certain changes; replace the continuing 
contract authority of the Corps with multi-year contracting authority 
patterned after the authority available to other Federal agencies; and 
prohibit committing funds for ongoing contracts beyond the appropriated 
amounts available, including reprogramming.
    The budget also includes bill language to authorize the following: 
continuation of the national levee inventory and assessment; 
continuation of activities in Missouri River Basin to comply with the 
Endangered Species Act; completion of the two Chicago Sanitary and Ship 
Canal invasive species barriers in Illinois, subject to appropriate 
cost-sharing; and completion of the McAlpine Lock and Dam, Kentucky and 
Indiana, project.

                WATER RESOURCES DEVELOPMENT ACT PROPOSAL

    I am working with others in the administration towards the goal of 
developing a legislative framework that will reflect the 
administration's priorities for a Water Resources Development Act for 
consideration by Congress. This proposal or a subsequent legislative 
proposal will support the budget's recommendations for the Civil Works 
program as addressed in my testimony today.
    In the coming weeks I hope to be able to make a proposal that will 
help accomplish the principles, policies, and practices that have 
proven to be successful in the past, and will seek to create incentives 
for their improvement. Working together, I believe the administration 
and the Congress can make very substantial improvements in the Civil 
Works program, and I look forward to offering a proposal that I trust 
you will find helpful.

                     PRESIDENT'S MANAGEMENT AGENDA

    The Army Civil Works program is pursuing five government-wide 
management initiatives, as are other Federal agencies, plus a sixth 
initiative on real property asset management. ``Scorecards'' for the 
Army Corps of Engineers and other Federal agencies can be found at 
http://www.whitehouse.gov/results/agenda/scorecard.html.
    Under these initiatives, the Corps is improving its efficiency 
through recently completed public-private competitions. In addition, 
the Corps is undertaking two efforts (for Logistics Management and the 
Operation and Maintenance of Locks and Dams) to improve its performance 
through re-engineering of internal business processes, rather than 
through public-private competitions.
    The Corps has also made great progress in working with the Office 
of the Department of Defense Inspector General on the fiscal year 2006 
audit. The Corps is continuing to work towards the goal of obtaining an 
unqualified opinion, on its accounts, and has been a leader within the 
Department of Defense in this area. The Corps is committed to 
addressing any concerns that may arise during the audit.

                               CONCLUSION

    In developing this budget, the administration made explicit choices 
based on performance. The increase in O&M funding, transfer of 
activities from construction to O&M, emphasis on high-performing 
construction projects, and increase for preparedness for flood and 
hurricane emergencies and other natural disasters, for example, all 
reflect a performance-based approach.
    At $4.871 billion, the fiscal year 2008 Army Civil Works budget is 
the highest Civil Works budget in history. This budget provides the 
resources for the Civil Works program to pursue investments that will 
yield good returns for the Nation in the future. The budget represents 
the wise use of funding to advance worthy, mission-based objectives. I 
am proud to present it.
    Thank you, Mr. Chairman and members of the subcommittee, for this 
opportunity to testify on the President's fiscal year 2008 budget for 
the Civil Works program of the Army Corps of Engineers.

  ENCLOSURE 1.--DEPARTMENT OF THE ARMY CORPS OF ENGINEERS--CIVIL WORKS
                    BUDGET, FISCAL YEAR 2008--SUMMARY
------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Requested New Appropriations by Account:
    Investigations.....................................     $90,000,000
    Construction.......................................   1,523,000,000
    Operation and Maintenance..........................   2,471,000,000
    Regulatory Program.................................     180,000,000
    Flood Control, Mississippi River and Tributaries...     260,000,000
    Expenses...........................................     177,000,000
    Flood Control and Coastal Emergencies..............      40,000,000
    Formerly Utilized Sites Remedial Action Program....     130,000,000
                                                        ----------------
      TOTAL............................................   4,871,000,000
                                                        ================
Requested New Appropriations by Program Area:
    Commercial Navigation..............................   2,009,000,000
        (Inland and Intracoastal Waterways)............  (1,052,000,000)
        (Channels and Harbors).........................    (957,000,000)
    Flood and Coastal Storm Damage Reduction...........   1,384,000,000
        (Flood Damage Reduction).......................  (1,356,000,000)
        (Coastal Storm Damage Reduction)...............     (28,000,000)
    Environment........................................     514,000,000
        (Aquatic Ecosystem Restoration)................    (274,000,000)
        (FUSRAP).......................................    (130,000,000)
        (Stewardship)..................................    (110,000,000)
    Hydropower.........................................     291,000,000
    Recreation.........................................     267,000,000
    Water Supply.......................................       4,000,000
    Emergency Management...............................      45,000,000
        (Flood Control and Coastal Emergencies)........     (40,000,000)
        (National Emergency Preparedness)..............      (5,000,000)
    Regulatory Program.................................     180,000,000
    Executive Direction and Management.................     177,000,000
                                                        ----------------
      TOTAL............................................   4,871,000,000
                                                        ================
Sources of New Appropriations:
    General Fund.......................................   3,889,000,000
    Harbor Maintenance Trust Fund......................     735,000,000
    Inland Waterways Trust Fund........................     209,000,000
    Special Recreation User Fees.......................      37,000,000
    Disposal Facilities User Fees......................       1,000,000
                                                        ----------------
      TOTAL............................................   4,871,000,000
                                                        ================
Additional New Resources:
    Rivers and Harbors Contributed Funds...............     445,000,000
    Coastal Wetlands Restoration Trust Fund............      81,000,000
    Permanent Appropriations...........................       9,000,000
                                                        ----------------
      TOTAL............................................     535,000,000
                                                        ----------------
      Total New Program Funding........................   5,406,000,000
------------------------------------------------------------------------


                                                  ENCLOSURE 2.--DEPARTMENT OF THE ARMY CORPS OF ENGINEERS--CIVIL WORKS BUDGET, FISCAL YEAR 2008
                                                                   [CROSSCUT BETWEEN APPROPRIATION ACCOUNTS AND PROGRAM AREAS]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Flood/                Aq. Ec.                            Hydro-     Water      Emerg.     Regul.    Ovrsgt/
                                                           Navigation    Storm    Recreation   Restor.   Stewrdshp.    FUSRAP     Power      Supply     Mgmt.      Prog.       ED&M      TOTAL
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Investigations...........................................          19         41  ..........         30  ..........  .........  .........  .........  .........  .........  .........         90
Construction.............................................         572        665  ..........        241  ..........  .........         45  .........  .........  .........  .........      1,523
Operation & Maint........................................       1,383        475         251          1         106  .........        246          4          5  .........  .........      2,471
MR&T-I...................................................  ..........          1  ..........  .........  ..........  .........  .........  .........  .........  .........  .........          1
MR&T-C...................................................          10         96  ..........          2  ..........  .........  .........  .........  .........  .........  .........        108
MR&T-M...................................................          25        106          16  .........           4  .........  .........  .........  .........  .........  .........        151
FUSRAP...................................................  ..........  .........  ..........  .........  ..........        130  .........  .........  .........  .........  .........        130
FC&CE....................................................  ..........  .........  ..........  .........  ..........  .........  .........  .........         40  .........  .........         40
Regulatory...............................................  ..........  .........  ..........  .........  ..........  .........  .........  .........  .........        180  .........        180
Expenses.................................................  ..........  .........  ..........  .........  ..........  .........  .........  .........  .........  .........        177        177
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      TOTAL..............................................       2,009      1,384         267        274         110        130        291          4         45        180        177      4,871
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

 Enclosure 3.--Department of the Army Corps of Engineers--Civil Works 
                        Budget, Fiscal Year 2008

                  CONSTRUCTION PERFORMANCE GUIDELINES

    1. Project rankings.-- All ongoing specifically authorized 
construction projects, including projects funded in the Mississippi 
River and Tributaries account, will be assigned based upon their 
primary purpose to one of the main mission areas of the Corps (flood 
and storm damage reduction; commercial navigation; aquatic ecosystem 
restoration) or to hydropower. Flood and storm damage reduction, 
commercial navigation, and hydropower projects will be ranked by their 
total benefits divided by their total costs (BCR), calculated at a 7 
percent real discount rate. Aquatic ecosystem restoration projects will 
be ranked by the extent to which they cost-effectively contribute to 
the restoration of a nationally or regionally significant aquatic 
ecosystem that has become degraded as a result of a civil works 
project, or to a restoration effort for which the Corps is otherwise 
uniquely well-suited (e.g., because the solution requires complex 
alterations to the hydrology and hydraulics of a river system).
    2. Projects funded on the basis of their economic and environmental 
returns.--Ongoing flood and storm damage reduction, commercial 
navigation, and hydropower construction projects with a BCR of 1.5 or 
higher and ongoing aquatic ecosystem restoration construction projects 
that are cost-effective in contributing to the restoration of a 
nationally or regionally significant aquatic ecosystem that has become 
degraded as a result of a civil works project or to a restoration 
effort for which the Corps is otherwise uniquely well-suited will 
receive at least the amount needed to pay estimated contractor earnings 
required under ongoing contracts and related costs. In allocating funds 
among these projects, priority will be given to those with the highest 
economic and environmental returns.
    3. Projects funded to address significant risk to human safety.--
Flood and storm damage reduction projects that are funded to address 
significant risk to human safety will receive sufficient funding to 
support an uninterrupted effort during the budget year.
    4. Projects with low economic and environmental returns.--Ongoing 
flood and storm damage reduction, commercial navigation, and hydropower 
construction projects with a BCR below 1.5 will be considered for 
deferral, except for flood and storm damage reduction projects that are 
funded to address significant risk to human safety. Likewise, ongoing 
aquatic ecosystem restoration construction projects that do not cost-
effectively contribute to the restoration of a nationally or regionally 
significant aquatic ecosystem that has become degraded as a result of a 
civil works project, and do not cost-effectively address a problem for 
which the Corps is otherwise uniquely well-suited, will be considered 
for deferral.
    5. New starts and resumptions.--The budget could include funds to 
start up new construction projects, or to resume work on ongoing 
construction projects on which the Corps has not performed any physical 
work under a construction contract during the past 3 consecutive fiscal 
years, only if the project would be ranked that year in the top 20 
percent of the ongoing construction projects in its mission area. The 
term ``physical work under a construction contract'' does not include 
activities related to project planning, engineering and design, 
relocation, or the acquisition of lands, easements, or rights-of-way. 
For non-structural flood damage reduction projects, construction begins 
in the first fiscal year in which the Corps acquires lands, easements, 
or rights-of-way primarily to relocate structures, or performs physical 
work under a construction contract for non-structural project-related 
measures. For aquatic ecosystem restoration projects, construction 
begins in the first fiscal year in which the Corps acquires lands, 
easements, or rights-of-way primarily to facilitate the restoration of 
degraded aquatic ecosystems including wetlands, riparian areas, and 
adjacent floodplains, or performs physical work under a construction 
contract to modify existing project facilities primarily to restore the 
aquatic ecosystem. For all other projects, construction begins in the 
first fiscal year in which the Corps performs physical work under a 
construction contract.
    6. Other cases.--Projects will receive the amount needed to ensure 
that they comply with treaties and with biological opinions pursuant to 
the Endangered Species Act, and meet authorized mitigation 
requirements. Dam safety assurance, seepage control, and static 
instability correction projects that are funded in the construction 
program will receive the maximum level of funding that the Corps can 
efficiently and effectively spend in each year.

    Senator Dorgan. General Strock.

STATEMENT OF LIEUTENANT GENERAL CARL STROCK, CHIEF OF 
            ENGINEERS
    General Strock. Thank you, Mr. Chairman. With your 
permission, I'll submit my full statement for the record.
    Senator Dorgan. Without objection.
    General Strock. I'm honored to be testifying before you 
today with Mr. Woodley and my Director of Civil Works, Major 
General Don Riley and our Director of Programs, Mr. Gary Loew 
as well as our colleagues from the Bureau of Reclamation.
    Sir, this is a performance-based budget that reflects the 
realities of a national budget that must address recent 
national disasters and the ongoing global war on terror. The 
fiscal year 2008 budget focuses construction funding on 69 
projects that will provide the highest economic and 
environmental returns on the Nation's investment.
    The 69 projects include 6 national priority projects, 11 
dam safety projects and 52 other ongoing projects. These 
projects are critical to the future success of our water 
resources and this funding will be used to improve the quality 
of our citizens' lives and to contribute to national economic 
growth and development. This budget uses objective performance 
measures to establish priorities among projects and proposes 
changes to the Corps' contracting practices to increase control 
over future costs. We believe that focusing our effort on 
funding and completing a smaller, more beneficial set of 
projects will improve overall program performance and will help 
the Nation realize the net benefits, per dollar, from its 
investment much sooner.
    The Corps has learned many lessons in the past year, since 
Hurricane Katrina struck the gulf coast in 2005. The lessons 
learned provided great insight into changes that need to be 
made with respect to parts of our organizational culture, in 
the planning, execution and life cycle management of projects 
and in how we communicate risk to the American public and our 
decision makers.
    In light of this, as an institutional response, I issued my 
12 Actions for Change in August in recognition of the need to 
continue to change our organization to better serve the Nation. 
These 12 actions also commit the Corps to ensuring the American 
public has the information necessary to fully understand and 
make decisions about risk when they live behind or near a Corps 
of Engineers project.
    The fiscal year 2008 budget includes $2.47 billion for 
operation and maintenance and $158 million under the 
Mississippi River and Tributaries Program. I can assure you 
that I will continue to do all that I can to make these 
programs as cost effective and as efficient as possible.
    Domestically, the Corps of Engineers volunteers from across 
the Nation continue to respond to the call to help construct 
and improve a comprehensive hurricane and storm damage 
protection system along our gulf coast. This critical work they 
are doing will reduce the risk of future storms to people and 
communities in the region.
    Over the past year, Corps dams, levees and reservoirs again 
provided billions of dollars in flood damage reduction and 
protected lives, homes and businesses in many parts of the 
Nation following heavy rains.
    Internationally, the U.S. Army Corps of Engineers continues 
to support the mission to help Iraq and Afghanistan build 
foundations for democracy, freedom and prosperity. Many USACE 
civilians, each of whom is a volunteer and soldiers are 
providing engineering expertise, quality construction 
management and program and project management in those nations. 
The often unsung efforts of these patriotic men and women 
contribute daily toward this Nation's goals of restoring the 
economy, security and quality of life for all Iraqis and 
Afghans.
    In closing, sir, the Corps is committed to staying on the 
leading edge of service to the Nation. In support of that, 
we're working with others to continue to transform our Civil 
Works Program. We're committed to change that ensures an open, 
transparent and performance based Civil Works budget.

                           PREPARED STATEMENT

    Ladies and gentlemen of the committee, thank you very much 
for the honor to serve you over the last 3 years. It has been a 
wonderful experience for me. I regret that I will not be 
working with you into the future but I wish you the very best 
of luck in pursuit of a sound water resources policy for the 
Nation. Thank you.
    [The statement follows:]

          Prepared Statement of Lieutenant General Carl Strock

    Mr. Chairman and distinguished members of the subcommittee: I am 
honored to be testifying before your subcommittee today, along with the 
Assistant Secretary of the Army (Civil Works), the Honorable John Paul 
Woodley, Jr., on the President's fiscal year 2008 budget for the United 
States Army Corps of Engineers' Civil Works Program.
    My statement covers the following 3 topics:
  --Summary of Fiscal Year 2008 Program Budget;
  --Construction Program; and
  --Value of the Civil Works Program to the Nation's Economy, and to 
        the Nation's Defense.
               summary of fiscal year 2008 program budget
Introduction
    The fiscal year 2008 Civil Works budget is a performance-based 
budget, which reflects a focus on the projects and activities that 
provide the highest net economic and environmental returns on the 
Nation's investment or address significant risk to human safety. Direct 
Program funding totals $5.406 billion, consisting of discretionary 
funding of $4.871 billion and mandatory funding of $535 million. The 
Reimbursed Program funding is projected to involve an additional $2 
billion to $3 billion.
Direct Program
    The budget reflects the administration's commitment to continued 
sound development and management of the Nation's water and related land 
resources. It proposes to give the Corps the flexibility and 
responsibility within each major watershed to use these funds to carry 
out priority maintenance, repairs, and rehabilitations. The budget 
incorporates objective performance-based metrics for the construction 
program, funds the continued operation of commercial navigation and 
other water resource infrastructure, provides an increase in funding 
for the regulatory program to protect the Nation's waters and wetlands, 
and supports restoration of nationally and regionally significant 
aquatic ecosystems, with emphasis on the Florida Everglades and the 
Upper Mississippi River. It also would improve the quality of 
recreation services through stronger partnerships and modernization. 
Additionally, it emphasizes the need to fund emergency preparedness 
activities for the Corps as part of the regular budget process.
Reimbursed Program
    Through the Interagency and Intergovernmental Services Program we 
help non-DOD Federal agencies, State, local, and tribal governments, 
and other countries with timely, cost-effective implementation of their 
programs, while maintaining and enhancing capabilities for execution of 
our Civil and Military Program missions. These customers rely on our 
extensive capabilities, experience, and successful track record. The 
work is principally technical oversight and management of engineering, 
environmental, and construction contracts performed by private sector 
firms, and is financed by the customers.
    Currently, we provide reimbursable support for about 60 other 
Federal agencies and several State and local governments. Total 
reimbursement for such work in fiscal year 2008 is projected to be $2.0 
billion to $3.0 billion. The exact amount will depend on assignments 
received from the Federal Emergency Management Agency (FEMA) for 
hurricane disaster relief and from the Department of Homeland Security 
for border protection facilities.

                          CONSTRUCTION PROGRAM

    The goal of the construction program is to produce as much value as 
possible for the Nation from available funds. The budget furthers this 
objective by giving priority to the continued construction and 
completion of those water resources projects that will provide the best 
net returns on the Nation's investment for each dollar invested 
(Federal plus non-Federal) in the Corps primary mission areas. The 
budget also gives priority to projects that address a significant risk 
to human safety, notwithstanding their economic performance. Under 
these guidelines, the Corps allocated funding to 69 construction 
projects, including 6 national priority projects; 11 other dam safety 
assurance, seepage control, and static instability correction projects; 
and 52 other ongoing projects.
    The budget uses objective performance measures to establish 
priorities among projects, and through a change in Corps contracting 
practices to increase control over future costs. The measures proposed 
include the benefit-to-cost ratios for projects with economic outputs; 
the extent to which the project cost-effectively contributes to the 
restoration of a nationally or regionally significant aquatic ecosystem 
that has become degraded as a result of a Civil Works project or to an 
aquatic ecosystem restoration effort for which the Corps is otherwise 
uniquely well-suited; and giving priority to dam safety assurance, 
seepage control, static instability correction, and projects that 
address a significant risk to human safety. Resources are allocated 
based on Corps estimates to achieve the highest net economic and 
environmental returns and to address significant risk to human safety. 
This approach significantly improves the realization of benefits to the 
Nation from the Civil Works construction program and will improve 
overall program performance by bringing higher net benefits per dollar 
to the Nation sooner.
Maintenance Program
    The facilities owned and operated by, or on behalf of, the Civil 
Works Program are aging. As stewards of this infrastructure, we are 
working to ensure that its key features continue to provide an 
appropriate level of service to the Nation. Sustaining such service 
poses a technical challenge in some cases, and proper operation and 
maintenance also is becoming more expensive as this infrastructure 
ages.
    The Operation and Maintenance (O&M) program for the fiscal year 
2008 budget consists of $2.471 billion in the Operation and Maintenance 
account and $158 million under the Mississippi River and Tributaries 
program, with a focus on the maintenance of key commercial navigation, 
flood and storm damage reduction, hydropower, and other facilities. 
Specifically, the operation and maintenance program supports the 
operation, maintenance, repair and security of existing commercial 
navigation, flood and storm damage reduction, and hydropower works 
owned and operated by, or on behalf of, the Corps of Engineers, 
including administrative buildings and laboratories. Funds are also 
included in this program for national priority efforts in the Columbia 
River Basin and Missouri River Basin to support the continued operation 
of Corps of Engineers multi-purpose projects by meeting the 
requirements of the Endangered Species Act. Other work to be 
accomplished includes dredging, repair, aquatic plant control, removal 
of sunken vessels, monitoring of completed costal projects, and 
operation of structures and other facilities, as authorized in the 
various River and Harbor, Flood Control, and Water Resources 
Development Acts.
  value of the civil works program to the nation's economy and defense
    We are privileged to be part of an organization that directly 
supports the President's priorities of winning the global war on 
terror, securing the homeland and contributing to the economy.
The National Welfare
    The way in which we manage our water resources can improve the 
quality of our citizens' lives. It has affected where and how people 
live and influenced the development of this country. The country today 
seeks economic development as well as the protection of environmental 
values.
    Domestically, USACE personnel from across the Nation continue to 
respond to the call to help re-construct and improve the hurricane and 
storm damage reduction system for southeast Louisiana. The critical 
work they are doing will reduce the risk of future storms to people and 
communities in the region.
    Over the past year, Corps dams, levees and reservoirs again 
provided billions of dollars in flood damage reduction and protected 
lives, homes and businesses in many parts of the Nation following heavy 
rains.
    Mr. Chairman, we will continue to work with you, this subcommittee, 
and other Members of Congress on the ongoing study, and the 
authorization and funding proposed by the administration, for 
modifications to the existing hurricane protection system for New 
Orleans. The budget's recommendation, as part of a fiscal year 2007 
supplemental appropriations package, to re-allocate up to $1.3 billion 
of emergency supplemental appropriations enacted in fiscal year 2006 
will enable the Corps to use available, unobligated funds for measures 
that will provide a better overall level of protection for the New 
Orleans metropolitan area in the near-term.
Research and Development
    Civil Works Program research and development provides the Nation 
with innovative engineering products, some of which can have 
applications in both civil and military infrastructure spheres. By 
creating products that improve the efficiency and competitiveness of 
the Nation's engineering and construction industry and providing more 
cost-effective ways to operate and maintain infrastructure, Civil Works 
Program research and development contributes to the national economy.
The National Defense
    Internationally, the U.S. Army Corps of Engineers continues to 
support the mission to help Iraq and Afghanistan build foundations for 
democracy, freedom and prosperity.
    Many USACE civilians--each of whom is a volunteer--and soldiers are 
providing engineering expertise, quality construction management, and 
program and project management in those nations. The often unsung 
efforts of these patriotic men and women contribute daily toward this 
Nation's goals of restoring the economy, security and quality of life 
for all Iraqis and Afghanis.
    In Iraq, the Gulf Region Division has overseen the initiation of 
more than 4,200 reconstruction projects valued in excess of $7.14 
billion. Of those, more than 3,200 projects have been completed.
    These projects provide employment and hope for the Iraqi people. 
They are visible signs of progress.
    In Afghanistan, the Corps is spearheading a comprehensive 
infrastructure program for the Afghan national army, and is also aiding 
in important public infrastructure projects.

                               CONCLUSION

    The Corps of Engineers is committed to staying at the leading edge 
of service to the Nation. In support of that, I have worked to 
transform our Civil Works Program. We're committed to change that 
ensures an open, transparent, and performance-based Civil Works 
Program.
    Thank you, Mr. Chairman and members of the committee. This 
concludes my statement.

    Senator Dorgan. General Strock, thank you very much. Next 
we will hear from Secretary Limbaugh and Commissioner Johnson. 
Secretary Limbaugh is from the Department of the Interior and 
represents, with Mr. Johnson, the budget for the Bureau of 
Reclamation. You may proceed.

                       DEPARTMENT OF THE INTERIOR


                         Bureau of Reclamation

STATEMENT OF MARK LIMBAUGH, ASSISTANT SECRETARY FOR 
            WATER AND SCIENCE
    Mr. Limbaugh. Mr. Chairman, thank you. Mr. Chairman, 
distinguished members of the committee, it's an honor to be 
here today on behalf of Secretary of the Interior, Dirk 
Kempthorne, to present the 2008 budget request for the Bureau 
of Reclamation and the Central Utah Project Completion Act 
Office.
    With me here today is Commissioner Bob Johnson and Reed 
Murray, the Program Director for the Central Utah Project 
Completion Act Office.
    Interior's mission lies at the confluence of people, land 
and water and Interior employees fulfill a mission that spans 
12 times zones and stretches pole to pole and we operate in 
every single State and the U.S. Territories. So how we do our 
jobs in Interior and at the Bureau of Reclamation affects 
whether 31 million people have drinking water when they turn on 
their tap or irrigation water for farms that produce 60 percent 
of the Nation's produce.
    Our work contributes to the energy security of the Nation 
through the Hydropower produced by Reclamation projects.
    Now three themes occur in our efforts to manage the 
Interior's broad portfolio. First is pursuit of management 
excellence. Second are partnerships and third is the use of 
science that informs our decisions. Applying these themes, the 
Bureau of Reclamation has embarked on a Managing for Excellence 
Initiative to enhance transparency, accountability and 
effectiveness in its future business operations.
    Now in partnership with many of our water contractors, 
power customers and stakeholders, Reclamation manages and 
delivers water while addressing competing needs through 
adaptive management programs, endangered species recovery and 
habitat conservation programs and innovative water management 
solutions in places like the Grand Canyon, the Platte River, 
the CALFED program in California and the incredible work we've 
done in partnership with the seven basin States in the Colorado 
River Basin.
    Reclamation has also teamed up with the U.S. Geological 
Survey to update our water management predictive models by 
incorporating the latest in climatic science and data that 
reflect our constantly changing snow melt and run-off patterns.
    So in formulating the 2008 budget, the Department committed 
to ensure that our programs, including the Bureau of 
Reclamation and the Central Utah Project Completion Act, would 
maintain a high level of service to the American people and 
reach even higher levels of excellence.
    The President's 2008 budget request for the Department of 
the Interior is $10.7 billion of which $958.4 million is for 
the Bureau of Reclamation. The request for the Central Utah 
Project Completion Act is $43 million, to continue with 
planning and construction of that project in cooperation with 
our partner, the Central Utah Water Conservation District.
    Now, the 2008 budget highlights two initiatives in the 
Bureau of Reclamation. To help Reclamation's water contractors 
address the impacts of drought and the many other water supply 
challenges, the President's budget includes $11 million to 
continue our Water 2025 Competitive Grants program. Continuing 
that challenge grant program will allow Reclamation to promote 
innovative, collaborative solutions in areas of the West where 
we are now experiencing or can predict that we will be 
experiencing conflict over water, all the while leveraging a 
small Federal investment with cost-share partners. We will 
again, Mr. Chairman, send legislation to the Congress 
requesting permanent authorization for this program in order to 
keep this valuable cooperative, competitive grant program 
alive.
    Another priority is a new program that Senator Craig 
mentioned, our Loan Guarantee program. Now, we propose $1 
million to kick that program off and we're trying to help 
address the challenges of financing improvements to an aging 
Federal infrastructure. This Loan Guarantee program will allow 
our contractor water users access to capital markets that they 
probably wouldn't have without it in order to assist the Bureau 
of Reclamation in rebuilding and preparing its infrastructure 
for the future.
    Finally, Mr. Chairman, I'd like to highlight two long-term 
issues that we're addressing in the 2008 budget request. First, 
our 2008 budget will help launch the recovery of the San 
Joaquin River in California. Now, this restoration program, 
which has authorizing legislation before the Congress now, is a 
result of an agreement that settles litigation that has been 
spanning 18 years. We applaud the farmers and the fishermen, 
the environmentalists and the public officials who have come 
together and worked out an agreement in order to both improve 
the environment and protect the local economy in California.
    Second, the recently-initiated Platte River Recovery 
program is equally innovative, covering three States, thousands 
of farmers, hundreds of agricultural dependent-communities and 
four endangered and threatened species. In partnership with the 
Federal Government, this recovery program will permit existing 
water and power users in the Platte River Basin to continue 
operating while allowing for future growth, all in compliance 
with the Endangered Species Act.

                           PREPARED STATEMENT

    So Mr. Chairman, in closing, I again thank you for the 
opportunity to appear before this committee. I look forward to 
working with you and the members of the committee on issues 
related to the Bureau of Reclamation's Central Utah Project 
Completion Act and other issues that come before us and 
certainly look forward to answering any questions you may have. 
Thank you.
    [The statement follows:]

                  Prepared Statement of Mark Limbaugh

    Good morning. I am pleased to be here today on behalf of the 
Secretary to discuss the President's fiscal year 2008 budget for the 
Department of the Interior and, in particular, the Bureau of 
Reclamation. I appreciate the opportunity to highlight our priorities 
and key goals.
    Developing a budget for the Department of the Interior is an 
extraordinary exercise. We have an extensive mandate that rivals just 
about any governmental agency in its breadth and diversity--and its 
importance to the everyday lives of our citizens. Our 73,000 employees 
live and work in communities across America and its territories. We 
have 2,400 field offices. We manage 145,000 assets--second only to the 
Department of Defense. Our work stretches from pole to pole from 
wildlife refuges in the Arctic to scientific research at the South 
Pole.
    Managing one in every 5 acres in the United States, we oversee land 
and resources that stretch across 12 time zones from the Caribbean to 
the Pacific Rim. The sun literally never sets on the Department of the 
Interior. We have the third largest contingent of Federal law 
enforcement officers, with 3,400 officers and agents. We oversee over 
800 dams and irrigation projects. Interior-managed lands and water 
generate one-third of the Nation's domestic energy supply. The 
Department serves American Indians, including 561 federally recognized 
Tribes, Alaska Natives, and our Nation's affiliated island communities. 
We undertake research and provide information to understand the Earth 
and assist us in the management of the Nation's water, biological and 
mineral resources, and monitor all manner of natural hazards including 
volcanoes, earthquakes, and landslides. We also work with States to 
restore abandoned mine land sites and protect communities.

                            BUDGET OVERVIEW

    Our overall 2008 request for the Department of the Interior is 
$10.7 billion. Permanent funding that becomes available as a result of 
existing legislation without further action by the Congress will 
provide an additional $5.1 billion, for a total 2008 Interior budget of 
$15.8 billion.
    The budget request for the Bureau of Reclamation and the Central 
Utah Project Completion Act (CUPCA) programs under the purview of this 
subcommittee is $1 billion; the Bureau of Reclamation's proposed budget 
is $958.4 million and the CUPCA proposed budget is $43.0 million.
    With enactment of the fiscal year 2007 Joint Resolution, we now 
have a full year appropriation of $1.0 billion for the Bureau of 
Reclamation and $34.0 million for CUPCA. This does not include 
additional funds that are authorized and will be provided for 50 
percent of the January 2007 pay raise. Based on direction in the Joint 
Resolution we are preparing a detailed operating plan for these two 
agencies for fiscal year 2007. Once our operating plans are approved we 
will submit them to Congress on March 17. At that time we will be able 
to provide comparisons at the program level with the 2008 budget 
request.
    The comparisons in our 2008 budget are with the third 2007 
continuing resolution, which was in effect through February 15. 
Throughout this testimony the comparisons will be on that basis.
    The Department's 2008 budget is carefully crafted within the 
President's commitment to continue to fund the Nation's highest 
priorities while eliminating the deficit in 5 years. The administration 
is on track to achieve this goal.
    At the heart of Department's 2008 budget are four major initiatives 
including:
  --The National Parks Centennial Initiative to enhance National Parks 
        as we approach their 100th anniversary in 2016;
  --The Healthy Lands Initiative, which will allow access to public 
        lands for a number of uses and provide for energy for the 
        Nation while also protecting critical lands and habitat;
  --The Safe Indian Communities Initiative to combat the 
        methamphetamine crisis on Indian lands; and
  --The Improving Indian Education Initiative that will enable Indian 
        children to grow up in an environment that allows them to 
        achieve their dreams.

                THE NATIONAL PARKS CENTENNIAL INITIATIVE

    The President's 2008 parks budget totals a historic $2.4 billion. 
The park operating budget, at $2.1 billion, provides an increase of 
$290 million over the continuing resolution spending level, the largest 
increase in park operations funding ever proposed. This is $258.3 
million over the 2006 level and $230 million over the President's 2007 
budget for parks.
    Within our operating budget increase, we propose a $100 million 
Centennial Commitment over 10 years, for a total of $1 billion 
dedicated to park operations. Our Centennial Initiative will also 
inspire philanthropic organizations and partners to donate $100 million 
per year over 10 years to the National Park Service. The Centennial 
Challenge Federal Fund will match all private donations up to an amount 
of $100 million. These Federal mandatory matching funds and 
philanthropic contributions, together with the $100 million annual 
Centennial Commitment in discretionary funds for park operations, would 
infuse up to $3 billion into the park system over the next decade.

                        HEALTHY LANDS INITIATIVE

    Another priority for the Secretary is the Healthy Lands Initiative, 
which will ensure continued access to public lands for traditional uses 
and recreation, while maintaining strong environmental protections for 
wildlife and habitat.
    As activities on public land increase, we are seeing growing 
conflicts among recreation users, energy developers, hunters, ranchers, 
and others all competing to protect, access, and use these public 
lands. Several Interior bureaus will join together to identify, 
restore, and mitigate the potential impacts of increased energy 
production in wildlife-energy interface areas and potentially prevent 
the listing of certain species such as sage grouse.
    Focused on six strategic areas, these funds will transform land 
management from the current parcel by parcel approach to landscape-
scale decision making, drawing upon partnerships and new policy tools 
to provide increased access for energy and other uses, while 
simultaneously preserving important habitat corridors and sites for the 
benefit of species. In 2008, including this increase, over 400,000 
acres will be restored in partnership with Federal leaseholders, 
private landowners, State, local, and tribal governments--to benefit 
wildlife. The Healthy Lands Initiative includes $22.0 million to fund 
partnerships with local communities, conservation groups, and companies 
to rehabilitate and protect working landscapes.

              THE METHAMPHETAMINE CRISIS IN INDIAN COUNTRY

    I would like to highlight two other 2008 priorities for the 
Department of the Interior, our Safe Indian Countries and Indian 
Education Initiatives. While I recognize that the Senate Indian Affairs 
Committee has jurisdiction over these matters, I also know many of you 
represent States and tribes that are struggling with the impacts 
associated with methamphetamine.
    Methamphetamine is a highly addictive synthetic stimulant that 
creates intense euphoric highs for periods up to 24 hours. It is 
inexpensive and, unfortunately, has rapidly become the drug of choice 
for an increasing number of Americans.
    The social effects of methamphetamine use are tragic. Addicted 
mothers are giving birth to drug-addicted babies. The drug is fueling 
homicides, aggravated assaults, rape, child abuse, and other violent 
crimes. Violent crime in Indian Country is reaching crises levels at 
twice the national average.
    Our budget includes $16 million for a Safe Indian Communities 
initiative that reconfigures and tailors our focus to combat organized 
crime, break up drug trafficking, and interrupt the drug supply.

                       IMPROVING INDIAN EDUCATION

    Improving Indian education is also a priority. One of only two 
school systems operated by the Federal Government, the Bureau of Indian 
Education should oversee schools that are models of performance for the 
No Child Left Behind Act. Yet only 30 percent of the schools in the 
Bureau of Indian Education system are meeting NCLB goals.
    In recent years, we have improved school facilities by replacing 32 
schools and renovating another 39 schools. It is now time to focus on 
the classroom. Our 2008 budget proposes to invest $15.0 million to 
improve the performance of students in Indian schools. Additional 
funding will provide educational program enhancements and tools for 
lower performing schools and educational specialists to guide Indian 
schools in achieving academic success. The request also provides 
additional funding for transportation to reduce the redirection of 
education dollars to pay for buses and fuel.

                 INTERIOR PRIORITIES FOR WATER PROGRAMS

    The Department, through the Bureau of Reclamation, is the largest 
supplier and manager of water in the 17 western States. The 2008 budget 
emphasizes Reclamation's core mission of delivering water and power. 
Reclamation priorities include a focus on ensuring facility integrity 
and site security and resolving major western water challenges.
    In addition to the initiatives I described, Interior's 2008 budget 
requests resources for priority programs in the Bureau of Reclamation 
and CUPCA. The 2008 budget for the Bureau of Reclamation includes four 
major initiatives, including:
  --Improving and diversifying water supplies to prevent crises through 
        cooperative, cost sharing efforts funded by Water 2025;
  --Development of a Loan Guarantee Program that will help water 
        districts to repair aging infrastructure; and
  --The California Bay-Delta Restoration program which supports the 
        efforts of a consortium of Federal and State agencies that are 
        working to improve the health of the ecosystem and water 
        management and supplies;
  --Improvements in the safety and reliability of Bureau of Reclamation 
        facilities through the Safety of Dams Program.

              WATER 2025, PREVENTING CRISES AND CONFLICTS

    The 2008 budget includes $11.0 million for Water 2025. The 
overarching goal of Water 2025 is to meet the challenge of preventing 
crises and conflicts over water in the West. Water 2025 will achieve 
this by increasing the certainty and flexibility of water supplies, 
diversifying water supplies, and preventing crises through 
cooperatively adding environmental benefits in many watersheds, rivers, 
and streams.
    The 2008 Water 2025 request includes $10.0 million for the 50/50 
challenge grant program, which relies on local initiative and 
innovation to identify and formulate the most sensible improvements for 
local water systems. The request also includes $1.0 million for system 
optimization reviews for Reclamation to work on a 50/50 cost-share 
basis with local entities to assess the potential for water management 
improvements.
    The administration will submit legislation for the authorization 
necessary to accomplish the goals of this program.

                         LOAN GUARANTEE PROGRAM

    The 2008 request includes $1.0 million for the Loan Guarantee 
program which is a critical component of Interior's strategy to address 
aging water infrastructure challenges in the West. The Loan Guarantee 
Program uses a business-like approach that recognizes the inability of 
many water districts to secure funds for expensive rehabilitative 
repairs without the capability to use Federal facilities as collateral 
to obtain bank financing. The program was authorized by the Reclamation 
Water Supply Act in 2006.
    The loan program will allow water districts to obtain long-term 
loans to address major rehabilitation and replacement projects, thereby 
addressing the key issue facing Reclamation's aging infrastructure. The 
$1.0 million included in the 2008 budget will be used for setting up 
the administrative components of the Loan Guarantee Program.

                    CALIFORNIA BAY-DELTA RESTORATION

    The 2008 budget includes $31.8 million for CALFED. The CALFED Bay-
Delta Authorization Act was signed into law in 2004. A Consortium of 
Federal and State agencies works collaboratively, funding and 
participating in the CALFED program. Their efforts focus on improving 
the health of the ecosystem and water management and supplies. In 
addition, CALFED addresses the issues of water supply reliability, 
aging levees, and threatened water quality.
    The Bay-Delta system is critical to California's economy because 
the two rivers that flow into the Bay-Delta provide potable water for 
two-thirds of California's homes and businesses and irrigate more than 
7 million acres of farmland on which 45 percent of the Nation's fruits 
and vegetables are grown. The Bay-Delta system also provides habitat 
for 750 plant and animal species, some listed as threatened or 
endangered.
    Funding for California Bay-Delta Restoration is requested in the 
following program areas: $7.0 million for the environmental water 
account; $8.5 million for the storage program; $5.0 million for water 
conveyance, $1.5 million for ecosystem restoration; $4.8 million for 
water quality; $3.0 million for science; and $2.0 million for 
Reclamation's oversight function to ensure program balance and 
integration.

                         SAFETY OF DAMS PROGRAM

    A total of $77.0 million is requested for the Safety of Dams 
program, an increase of $8.0 million from 2007 that is primarily for 
corrective actions at Folsom Dam. The Dam Safety program continues to 
be one of Reclamation's highest priorities. The program helps ensure 
the safety and reliability of Reclamation's dams by focusing funding 
and resources on those facilities, which pose the highest risk to the 
downstream public. The program includes: investigation, identification, 
evaluation, decision-making and risk reduction activities. The program 
accomplishes three main tasks: Safety Evaluations of Existing Dams, 
Initiating Safety of Dams Corrective Actions, and conducting the DOI 
Dam Safety program.
    By focusing on the safety and reliability of Reclamation's dams, 
the Dam Safety program plays a vital role in accomplishing the 
Department's end outcome goal of delivering water consistent with 
applicable State and Federal law in an environmentally responsible and 
cost efficient manner. The efforts of the Dam Safety program are 
currently measured by the percent of water infrastructure in fair to 
good condition as measured by the Facility Reliability Rating.

                       MAINTAINING CORE PROGRAMS

    The 2008 request for Reclamation's principal operating account is 
$816.2 million, which is an increase of $60.3 million over the 2007 
continuing resolution. The budget proposal continues to emphasize 
assuring operation and maintenance of Bureau of Reclamation facilities 
in a safe, efficient, economic, and reliable manner; ensuring systems 
and safety measures are in place to protect the public and Reclamation 
facilities; working smarter to address the water needs of a growing 
population in an environmentally responsible and cost-efficient manner; 
and assisting States, tribes, and local entities in solving 
contemporary water resource issues. Funding for each project or program 
within Reclamation's budget request is based upon Departmental and 
bureau priorities, compliance with the Department of the Interior 
strategic plan, and performance accomplishments.
    The 2008 request includes a total of $429.5 million for water and 
energy, land, and fish and wildlife resource management development 
activities. Funding in these activities provides for planning, 
construction, water conservation activities, management of Reclamation 
lands including recreation, and actions to address the impacts of 
Reclamation projects on fish and wildlife.
    Reclamation's 2008 budget assumes enactment of two legislative 
proposals. First, a proposal for the Pick-Sloan Missouri Basin program 
would re-allocate the repayment of capital costs of the program. Power 
customers would be responsible for repayment of all construction 
investments from which they benefit. This change would increase 
reimbursements to the Treasury from power customers by $23.0 million in 
2008. A legislative proposal will be transmitted to the appropriate 
congressional authorizing committees for consideration.
    Second, the 2008 budget also reflects the settlement of an 18-year 
legal dispute, Natural Resources Defense Council v. Rodgers, over the 
Bureau of Reclamation's operation of Friant Dam near Fresno, 
California. Reclamation's budget presumes that implementing legislation 
will be enacted. Bills have already been introduced in the Senate and 
the House, as S. 27 and H.R. 24, which would implement the proposed 
Settlement. Consistent with this legislation, Reclamation's 2008 budget 
would redirect approximately $7.5 million per year of payments from the 
Central Valley Project Friant Division and $9.8 million from the 
Reclamation Fund into the newly-created San Joaquin Restoration Fund, 
which would be available without further appropriations to implement 
the provisions of the settlement.

                          ACHIEVING KEY GOALS

    I would like to call the attention of the subcommittee to our 
mission goals and the efforts we are making to achieve results for the 
Nation in areas that touch on the issues and programs of interest to 
the subcommittee.
    Achieving Energy Security.--In his State of the Union address, 
President Bush underscored that America must enhance energy security. 
The Department of the Interior plays a key role in advancing this goal. 
Nearly one-third of the energy produced in the United States each year 
comes from public lands and waters managed by Interior. To carry out 
the goals of the Energy Policy Act and enhance the availability of 
affordable oil, gas, and alternative energy sources, the 2008 budget 
for Interior programs includes $481.3 million for energy programs, an 
increase of $25.5 million over the 2007 continuing resolution. With 
these resources, the Department will enhance energy security through 
increased production, protect the environment, promote conservation, 
and expand the use of new technologies and renewable energy sources.
    Cooperative Conservation.--Through partnerships, Interior works 
with landowners and others to achieve conservation goals across the 
Nation and to benefit America's national parks, wildlife refuges, and 
other public lands. The 2008 budget includes $324.0 million for the 
Department's cooperative conservation programs, $34.6 million over 
2007. These programs leverage Federal funding, typically providing a 
non-Federal match of 50 percent or more. They provide a foundation for 
cooperative efforts to protect endangered and at-risk species; engage 
local communities, organizations, and citizens in conservation; foster 
innovation; and achieve conservation goals while maintaining working 
landscapes.
    Refuge Operations and Species Protection.--Targeted increases for 
the National Wildlife Refuge System and other FWS species conservation 
programs will focus new resources on conserving and restoring the 
habitat necessary to sustain endangered, threatened, and at-risk 
species and prevent additional species from being listed under the 
Endangered Species Act. A program increase of $4.7 million for refuge 
wildlife and habitat management will allow the refuge system to 
increase the number of recovery plan actions completed in 2008 by 111; 
protect or restore an additional 57,983 acres; and fill three new 
positions to manage the new Northwestern Hawaii Marine National 
Monument. The 2008 budget also includes $2.2 million in programmatic 
increases for the recovery of the gray wolf and the Yellowstone grizzly 
bear.
    Healthy Forests Initiative.--The 2008 budget for the Healthy 
Forests Initiative, a total of $307.3 million, supports the 
Department's efforts to reduce the threat of catastrophic wildfire and 
improve forest and rangeland health. The 2008 budget request funds the 
Hazardous Fuels Reduction program at $202.8 million, an increase of 
$3.0 million for fixed costs over the 2007 level. An additional $1.8 
million in the hazardous fuels program will be shifted from program 
support activities to on-the-ground fuel reduction to help treat high-
priority acres.
    Wildland Fire Management.--The 2008 budget proposes $801.8 million 
to support fire preparedness, suppression, fuels reduction, and burned 
area rehabilitation. This amount represents a net increase of $32.6 
million above 2007, including an increase of $37.4 million for 
suppression operations. This budget will fully fund the expected costs 
of fire suppression in 2008 at $294.4 million, based on the 10-year 
average. The 2008 Preparedness program is funded at $268.3 million, a 
net reduction of $6.5 million from the 2007 level. A significant 
portion of this reduction will be achieved by eliminating management 
and support positions and lower-priority activities. The 2008 Wildland 
Fire Management program will realign its preparedness base resources to 
better support initial attack capability, which will include the 
addition of over 250 firefighters. These actions will help maintain 
initial attack success.
    Oceans Conservation.--Interior bureaus conduct ocean and coastal 
conservation activities that significantly advance understanding of the 
processes and status of ocean and coastal resources. The 2008 
President's budget includes $929.5 million to support the President's 
Ocean Action Plan. This funding will allow Interior bureaus to continue 
their high-priority work within the U.S. Ocean Action Plan and includes 
an increase of $3.0 million for USGS. In 2008, USGS will begin to 
implement the Oceans Research Priorities Plan and Implementation 
Strategy by conducting observations, research, seafloor mapping, and 
forecast models. USGS will also begin to implement an interagency 
national water quality monitoring network. Also included is $600,000 
for three new positions to support management of the new Northwestern 
Hawaiian Islands Marine National Monument.
    Indian Trust.--The 2008 request for Indian Trust programs is $489.9 
million, $17.6 million above 2007. The Indian Land Consolidation 
program is funded at $10 million, $20.7 million below 2007. The 2008 
budget also includes $4.6 million in reductions to reflect efficiencies 
and improvements in services to beneficiaries, the completion of trust 
reform tasks, the completion of project task efforts, and management 
efficiencies. The budget includes a $3.6 million increase for the 
Office of Historical Accounting to assist with the increased workload 
associated with additional tribal trust lawsuits.
    Payments in Lieu of Taxes.--PILT payments are made to local 
governments in lieu of tax payments on Federal lands within their 
boundaries and to supplement other Federal land receipts shared with 
local governments. The 2008 budget proposes $190 million for these 
payments. The 2008 request is a reduction of $8 million from the 2007 
level. This level of funding is significantly above the historical 
funding level for PILT. From the program's inception in 1977 through 
2001, the program was funded in the range of $96-$134 million.

                               CONCLUSION

    We believe that the Department's 2008 budget will--in its 
entirety--make a dramatic difference for the American people. We will 
better conserve our public lands. We will improve our national parks. 
We will protect our wildlife and its habitat. We will help craft a 
better future for Indian country and particularly for Indian children. 
We will better manage and protect water and related resources and 
produce the energy that America needs to heat our homes and run our 
businesses. This concludes my overview of the 2008 budget proposal for 
the Department of the Interior and my written statement. I will be 
happy to answer any questions that you may have.

    Senator Dorgan. Secretary Limbaugh, thank you very much. 
Mr. Johnson.

STATEMENT OF ROBERT W. JOHNSON, COMMISSIONER
    Mr. Johnson. Thank you, Mr. Chairman and members of the 
subcommittee. It's my pleasure to be here. This is my first 
opportunity to testify before this committee and I look forward 
to working with you now and in the future.
    The overall fiscal year 2008 appropriation request for 
Reclamation totals $958.4 million. This request provides 
funding for multiple priorities of the Reclamation program, 
consistent with the President's objective of achieving a 
balanced budget by 2012. I would like to, in my oral 
presentation, highlight three broad categories of activity that 
comprise the major portion of the Reclamation budget.
    First, our budget reflects the need to maintain our 
existing portfolio of projects. Reclamation has over 472 dams, 
348 reservoirs, 58 powerplants and many other water delivery 
facilities. Our infrastructure provides water to 31 million 
people and 10 million acres of irrigated farmland. We generate 
42 billion kilowatt hours of electricity annually, enough to 
provide power for a population of about 8 million.
    Our predecessors gave us a magnificent infrastructure that 
has helped meet our water needs in the American West amazingly 
well. Much of that infrastructure is 50 to 100 years old and 
its proper operation and maintenance is our top priority. 
Approximately $380 million of the Reclamation budget, about 40 
percent, is dedicated to making sure that our facilities are 
operated and maintained in a safe and reliable fashion.
    Second, we frequently find ourselves having to manage our 
projects to meet changes in social and public values that are 
embodied in the Endangered Species Act, the Clean Water Act, 
the National Environmental Protection Act and other State and 
Federal environmental laws. In many cases, meeting these 
requirements have been manifested in the development of broader 
river management and/or restoration plans. Implementation of 
these plans is becoming a significant element of the 
Reclamation program. Reclamation's involvement is almost always 
necessary to meet its obligations associated with the operation 
and maintenance of its projects.
    Reclamation is currently involved in environmental 
restoration management programs on the Colorado, Middle Rio 
Grande, Platte, Klamath, Columbia, San Joaquin, Trinity and 
Sacramento Rivers. We anticipate that our efforts on these and 
other river systems will continue to be a significant part of 
the Reclamation program well into the future. Our 2008 budget 
request includes about $150 million for these activities.
    Finally, Reclamation continues to be actively involved in 
programs to develop new water supplies and infrastructure. In 
total, these programs represent approximately $175 million of 
our 2008 request. Examples of ongoing activities in our 2008 
budget include the Animas-La Plata Project. This project is 
located in southwestern Colorado and will provide water 
supplies to settle the water right claims of the Ute Mountain 
Ute and Southern Ute Indian Tribes. It will provide municipal 
and industrial water to rural communities in the Four Corners 
areas of Colorado and New Mexico and it will provide water 
service to parts of the Navajo Indian Reservation.
    Second, rural water programs. The Reclamation budget 
includes funding for water systems to deliver surface water to 
Indian and non-Indian communities in the rural Great Plains. 
These projects provide good quality water to rural areas where 
existing water supplies are either non-existent or of very poor 
quality.
    Three, water re-use projects. Under title XVI of Public Law 
102-575, Reclamation continues to provide some funding for 
development of projects that re-use existing waste water 
supplies. Located primarily in southern California, these 
projects provide drought-proof supplies that we hope meet 
increasing demands for water caused by fast-growing urban 
populations.
    Fourth, Indian water distribution systems in Arizona. Under 
the authority of the Central Arizona Project, Reclamation is 
funding construction of water delivery systems to serve 
Colorado River water to Indian tribes in central Arizona. These 
systems provide new water supplies to settle Indian water right 
claims and meet economic development needs on the reservations.
    Finally, water conservation programs. Through the Water 
2025 program and our Water Conservation Field Services program, 
Reclamation provides funding for implementation of water 
conservation projects. Using a challenge grant approach, these 
programs are competitive and usually leverage non-Federal 
funding to maximize the effectiveness of the Federal 
investment. These programs have been successfully applied in 
all 17 reclamation States.

                           PREPARED STATEMENT

    In conclusion, our budget represents a proper balance 
between maintaining our infrastructure and meeting our 
environmental compliance obligations with river restoration 
plans and also providing money for the development of new water 
supplies.
    Mr. Chairman, thank you and I'd be happy to answer 
questions.
    [The statement follows:]

                Prepared Statement of Robert W. Johnson

    Thank you, Mr. Chairman, Mr. Domenici and members of the 
subcommittee, for the opportunity to appear in support of the 
President's fiscal year 2008 budget request for the Bureau of 
Reclamation. With me today is Bob Wolf, Director of Program and Budget.
    Since this is my first opportunity to present the President's 
budget, I would like to make two introductory comments. First, I truly 
appreciate the time and consideration this committee gives to reviewing 
and understanding Reclamation's budget and its support for the program. 
Second, while the development of an annual budget is a long and complex 
task, it is truly rewarding to see our institution work so hard to 
prioritize and define our program in a manner that serves the public 
and those who rely on Reclamation for their water and power.
    Our fiscal year 2008 request has been designed to support 
Reclamation's efforts to deliver water and generate hydropower, 
consistent with applicable State and Federal law, in an environmentally 
responsible and cost-efficient manner.
    The funding proposed is for key projects and programs that are 
important to the Department and in line with administration objectives. 
The budget request also supports Reclamation's participation in efforts 
to meet emerging water supply needs, to address water shortage issues 
in the West, to promote water conservation and improved water 
management, and to take actions to mitigate adverse environmental 
impacts of projects.
    The fiscal year 2008 request for Reclamation totals $958.4 million 
in gross budget authority and is partially offset by discretionary 
receipts in the Central Valley Project Restoration Fund ($51.3 
million).

                      WATER AND RELATED RESOURCES

    The fiscal year 2008 request for Water and Related Resources is 
$816.2 million. More specifically, the request for Water and Related 
Resources includes a total of $429.5 million for water and energy, 
land, and fish and wildlife resource management activities (which 
provides for construction, management of Reclamation lands, and actions 
to address the impacts of Reclamation projects on fish and wildlife), 
and $386.7 million for facility operations, maintenance, and 
rehabilitation activities.
    Providing adequate funding for facility operations, maintenance, 
and rehabilitation continues to be one of Reclamation's highest 
priorities. Reclamation continues to work closely with water users and 
other stakeholders to ensure that available funds are used effectively. 
These funds are used to allow the timely and effective delivery of 
project benefits; ensure the reliability and operational readiness of 
Reclamation's dams, reservoirs, power plants, and distribution systems; 
and identify, plan, and implement dam safety corrective actions and 
site security improvements.
Highlights of the Fiscal Year 2008 Request for Water and Related 
        Resources Include
    I would like to share with the committee several highlights of the 
Reclamation budget:
    Water 2025 ($11 million).--Water 2025 is a high priority for the 
Secretary of the Interior and will focus financial and technical 
resources on areas in the West where conflict over water either 
currently exists or is likely to occur in the coming years.
    The overarching goal of Water 2025 is to meet the challenge of 
preventing crises and conflict over water in the West. Water 2025 will 
contribute to meeting this goal by increasing certainty and flexibility 
in water supplies, diversifying water supplies, and reducing conflict 
through the use of market-based approaches and enhancing environmental 
benefits in many watershed, rivers and streams consistent with State 
and Federal laws.
    With $11 million, Water 2025 will continue to be a multifaceted 
program with projects that embody the overarching goal of preventing 
crises and conflict over water in the West. Leveraging limited Federal 
dollars through the Challenge Grant program will continue to be a major 
component of Water 2025. The Challenge Grant program will focus on 
projects that improve water management through conservation, 
efficiency, and water markets, as well as collaborative solutions to 
meet the needs of the future. Beginning with fiscal year 2007, a system 
optimization review component has been added to ensure existing water 
management systems are operated to maximize water deliveries. 
Modernization of existing systems will occur within the framework of 
existing treaties, interstate compacts, water rights, and contracts.
    In addition to the program and policy priorities reflected in the 
fiscal year 2008 budget request, the Department intends to re-submit 
permanent authorizing legislation this spring to support the Water 2025 
program.
    Loan Guarantee Program ($1 million).--The fiscal year 2008 request 
includes funding for a Loan Guarantee program, which is an important 
component of Interior's strategy to address aging water infrastructure 
challenges in the West. The loan guarantee program, which is a 
business-like approach that recognizes the inability of many water 
districts to fund expensive rehabilitative repairs without the 
capability to use Federal facilities as collateral to obtain bank 
financing, was authorized by Title II of Public Law 109-451, the Rural 
Water Supply Act of 2006.
    Klamath Project in Oregon and California ($25 million).--The fiscal 
year 2008 request will continue and increase funding for Reclamation to 
collaborate with other Federal and State agencies, tribes and the 
public to develop a basin-wide recovery plan that addresses water 
supply, water quality, fish habitat, and fish populations.
    Lower Colorado River Operations Program in California, Arizona and 
Nevada ($15.4 million).--The fiscal year 2008 request will provide 
funds for the work necessary to carry out the Secretary's 
responsibilities as water master of the lower Colorado River. The 
fiscal year 2008 request funds measures under the multi-species 
conservation program to provide long-term Endangered Species Act 
compliance for lower Colorado River operations for both Federal and 
non-Federal purposes.
    Middle Rio Grande in New Mexico ($23.2 million).--The fiscal year 
2008 request will continue funding for endangered species activities 
and Reclamation's participation in the Middle Rio Grande Endangered 
Species Act Collaborative Program as well as repair of priority river 
maintenance sites.
    Animas-La Plata in Colorado and New Mexico ($58 million).--The 
fiscal year 2008 request includes $58 million to continue construction 
of the project's major features, Ridges Basin Dam and Durango Pumping 
Plant and the Ridges Basin Inlet Conduit. The project is critical to 
implementation of the Colorado Ute Settlement Act. Funding will be 
primarily directed to these three features while other key features are 
held for future implementation.
    Savage Rapids in Oregon ($15 million).--The fiscal year 2008 
request will provide funds for continuing construction of the pumping 
facilities. Removal of this irrigation diversion dam and the 
installation of pumping facilities will allow the local farming 
community to continue irrigated agriculture and remove a migration 
barrier for the threatened Southern Oregon and Northern California coho 
salmon.
    Columbia/Snake River Salmon Recovery in Idaho, Oregon, Montana, and 
Washington ($15 million).--The fiscal year 2008 request will address 
the requirements in the biological opinions issues in December 2000 by 
the U.S. Fish and Wildlife Service and in November 2004 by the National 
Oceanic and Atmospheric Administration Fisheries (NOAA Fisheries). The 
2004 biological opinion has been remanded to NOAA Fisheries and a new 
biological opinion is due in July 2007. During the remand, the 2004 
biological opinion remains in place as Reclamation continues to 
implement actions identified in the 2004 updated proposed action. These 
requirements include significantly increased regional coordination 
efforts; actions to modify the daily, weekly, and seasonal operation of 
Reclamation dams; acquisition of water for flow augmentation; tributary 
habitat activities in selected subbasins to offset hydrosystem impacts; 
and significantly increased research, monitoring, and evaluation. The 
request includes funding for the Nez Perce Water Settlement Act.
    Platte River Endangered Species Recovery Program ($9.6 million).--
The fiscal year 2008 budget request is for Federal participation in the 
Platte River Recovery Implementation Program. The agreement for the 
program was signed by Secretary Kempthorne and the Governors of 
Nebraska, Colorado and Wyoming in late 2006.
    Site Security ($35.5 million).--An appropriation in the amount of 
$35.5 million is requested for site security to ensure the safety and 
security of the public, Reclamation's employees and key facilities. 
This funding includes $11.7 million for physical security upgrades and 
$23.8 million to continue all aspects of Reclamation-wide security 
efforts, including law enforcement, risk and threat analysis, 
implementing security measures, undertaking security-related studies, 
and maintaining guards and patrols on the ground.
    The fiscal year 2008 budget request assumes annual costs associated 
with guard and patrol activities will be treated as project O&M costs 
subject to being reimbursed based on project cost allocations. These 
costs in fiscal year 2008 are estimated at $22.1 million of which $18.9 
million will be reimbursed. Of the funding to be reimbursed, $11.6 
million will be in direct up-front funding from power customers, while 
$7.3 million in appropriated funds will be reimbursed by irrigation 
users, M&I water users, and other customers in the year in which they 
were incurred through Reclamation's O&M allocation process. Reclamation 
will continue to treat facility fortification, studies, and anti-
terrorism management-related expenditures as non-reimbursable.
    Safety of Dams ($77 million).--Assuring the safety and reliability 
of Reclamation dams is one of the Bureau's highest priorities. The Dam 
Safety Program is critical to effectively manage risks to the 
downstream public, property, project, and natural resources. The fiscal 
year 2008 request provides for risk management activities at 361 dams 
and dikes, which would likely cause loss of life if they were to fail. 
In fiscal year 2008, large-scale, ongoing corrective action work is 
planned at Folsom Dam. Reclamation is working closely with the U.S. 
Army Corps of Engineers to coordinate this work with the flood control 
efforts to minimize Federal costs and duration of work.
    Rural Water ($55 million).--The fiscal year 2008 request continues 
funding for ongoing rural water projects. This includes funding for 
Municipal, Rural, and Industrial (MR&I) systems for the rural water 
components of the Pick Sloan-Missouri Basin Program--Garrison Diversion 
Unit (North Dakota), the Mni Wiconi Project (South Dakota), and the 
Lewis and Clark Project (South Dakota, Iowa, and Minnesota).
    On December 22, 2006, the President signed Public Law 109-451, the 
Rural Water Supply Act of 2006. Title I of the statute requires the 
Secretary to establish a formal rural water supply program for rural 
water and major maintenance projects in the 17 western States. The Act 
requires the establishment of programmatic and eligibility criteria for 
the rural water program along with other reporting requirements and 
criteria for appraisal and feasibility studies. Implementation of the 
Act will allow the Department, the administration and Congress to set 
priorities and establish clear guidelines for project development to 
help meet the water supply needs of rural communities throughout the 
West.
    Science and Technology (S&T) ($13.4 million).--The fiscal year 2008 
request includes funding for the development of new solutions and 
technologies which respond to Reclamation's mission-related needs. We 
feel our S&T work is important and will contribute to the innovative 
management, development, and protection of water and related resources. 
Of the amount requested, about $4.4 million is planned for internal 
desalination Research & Development conducted by Reclamation.
                       policy and administration
    The $58.8 million request in fiscal year 2008 is a slight increase 
and includes funding for labor cost increases due to cost of living 
raises and inflationary costs for non-pay activities. Funding requested 
will be used to: (1) develop, evaluate, and direct implementation of 
Reclamation-wide policy, rules, and regulations, including actions 
under the Government Performance and Results Act, and implement the 
President's Management Agenda; and (2) manage and perform functions 
that are not properly chargeable to specific projects or program 
activities covered by separate funding authority.

                CENTRAL VALLEY PROJECT RESTORATION FUND

    This fund was established by the Central Valley Project Improvement 
Act, title XXXIV of Public Law 102-575, October 30, 1992. The request 
of $51.6 million is expected to be offset by discretionary receipts 
totaling $51.3 million, which is the maximum amount that can be 
collected from project beneficiaries under provisions of section 
3407(d) of the Act. The discretionary receipts are adjusted on an 
annual basis to maintain payments totaling $30 million (October 1992 
price levels) on a 3-year rolling average basis. The request of $51.6 
million was reduced by $7.5 million (i.e., would have been $59.1 
million) due to a legislative proposal, which redirects $7.5 million 
collected from the Central Valley Project Friant Division water users 
to the new San Joaquin River Restoration Fund for fiscal year 2008. 
These funds will be used for habitat restoration, improvement and 
acquisition, and other fish and wildlife restoration activities in the 
Central Valley Project area of California.

        SAN JOAQUIN RIVER RESTORATION FUND PROPOSED LEGISLATION

    The 2008 budget also reflects the settlement of NRDC v. Rodgers. 
The administration will submit authorizing legislation, the San Joaquin 
River Restoration Settlement Act, which includes a provision to 
establish the San Joaquin River Restoration Fund. Under the settlement, 
the legislation proposes to redirect approximately $17.3 million per 
year of payments from the Central Valley Project, Friant Division water 
users into the Fund which would be available without further 
appropriations to implement the provisions of the settlement. 
Previously, $7.5 million of these funds went into the Central Valley 
Project Restoration Fund.

             CALIFORNIA BAY-DELTA RESTORATION FUND (CALFED)

    Title I of Public Law 108-361, titled the Calfed Bay-Delta 
Authorization Act, was signed by the President on October 25, 2004. The 
act authorized $389 million in Federal appropriations over the period 
of fiscal year 2005 through fiscal year 2010. For fiscal year 2008, 
$31.8 million is requested to enable Reclamation to advance its 
commitments under the CALFED Record of Decision and with a focus 
towards implementation of priority activities included in the Calfed 
Bay-Delta Authorization Act that will contribute to resolving water 
resource conflicts in the CALFED solution area. Funds will specifically 
be used for the environmental water account, feasibility studies of 
projects to increase surface storage and improve water conveyance in 
the Delta, conduct critical science activities, implementation of 
projects to improve Delta water quality, ecosystem enhancements, and 
program planning and management activities.

                  FISCAL YEAR 2008 PLANNED ACTIVITIES

    Reclamation's fiscal year 2008 priority goals are directly related 
to continually fulfilling our progress in water and power contracts 
while balancing a range of competing water demands. Reclamation will 
continue to deliver water consistent with applicable State and Federal 
law, in an environmentally responsible and cost-efficient manner. 
Reclamation will strive to deliver 28 million acre-feet of water to 
meet contractual obligations while addressing other resource needs (for 
example, fish and wildlife habitat, environmental enhancement, 
recreation, and Native American trust responsibilities). Reclamation 
will work to maintain our dams and associated facilities in fair to 
good condition to ensure the reliable delivery of water. Reclamation 
will strive to meet or beat the industry forced outage average to 
ensure reliable delivery of power. Reclamation will reduce salinity by 
preventing an additional 18,500 tons of salt from entering the water 
ways.
    Moreover, the fiscal year 2008 budget request demonstrates 
Reclamation's commitment in meeting the water and power needs of the 
West in a fiscally responsible manner. This budget continues 
Reclamation's emphasis on delivering and managing those valuable public 
resources. Reclamation is committed to working with its customers, 
States, tribes, and other stakeholders to find ways to balance and 
provide for the mix of water resource needs in 2008 and beyond.

                           MANAGEMENT STUDIES

    Reclamation continues to make significant advancements in its quest 
for management excellence. Reclamation's Managing for Excellence Action 
Plan reflects specific actions to realize the underlying principles of 
the President's Management Agenda. The National Academy of Sciences, at 
Reclamation's request, completed and published its study in 2006 to 
assist Reclamation in determining the appropriate organizational, 
management, and resource configurations to meet its construction and 
related infrastructure management responsibilities associated with 
fulfilling its core mission of delivering water and power for the 21st 
century.
    The Managing for Excellence action plan, developed in response to 
the Academy's report, outlines a process and timeframe for identifying 
and addressing the specific actions that can be taken to increase 
transparency, efficiency, and accountability within Reclamation. As of 
the end of January 2007, Reclamation has completed approximately 50 
percent of the 41 action items identified. Although the philosophy of 
Managing for Excellence will continue into the future, the Managing for 
Excellence Action Plan will conclude after December 2007 and 
implementation will continue as part of Reclamation's normal business.

                               CONCLUSION

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

    Senator Dorgan. Mr. Johnson, thank you very much. I'm going 
to ask a couple of questions and then turn to my colleagues. 
We've been joined by Senator Jack Reed as well. Senator Reed, 
others made a very brief statement. Would you like to make a 
comment?
    Senator Reed. I'll just put that in the record, Mr. 
Chairman.
    [The statement follows:]

                Prepared Statement of Senator Jack Reed

    Senators Dorgan and Domenici, it is an honor to serve with you 
again on the Appropriations Committee. I look forward to working with 
you on this subcommittee given the importance of energy and water 
programs to Rhode Island.
    Good afternoon, Secretary Woodley and Lieutenant General Strock, I 
look forward to hearing your testimony. I want to commend the work of 
Colonel Thalken, Bobby Byrne, and the New England District. With over 
400 miles of coastline, the Corps has a number of ongoing navigation 
and ecosystem restoration projects in Rhode Island that are extremely 
important to my State's economy and environment.
    The Corps also provides an important service in the inspection of 
our Nation's dams and levees. I am interested in your efforts to help 
local communities and States ensure that these critical infrastructure 
projects are sound and able to protect the lives and properties for 
which they were designed. I am also interested in the Corps efforts to 
restore aquatic ecosystems given the number of ongoing projects in 
Rhode Island to protect our coastal ponds.

    Senator Dorgan. All right. I'm going to ask a series of 
questions about the Missouri River System and the eighth year 
of the drought now, ninth year of the drought in Montana and 
that system. But I withhold on those questions. I'm just going 
to ask a question to, I would say, Secretary Woodley and 
General Strock, on the issue of the pumps in New Orleans, which 
I expect you would come here and expect to get a question 
about.
    I've read the reports, the Associated Press reports and so 
on and I would like to have both of you comment publicly about 
it. The story that is told in these reports is that a 
substantial amount of money was committed to rush to put in 
pumps to protect New Orleans but the pumps apparently, while 
costing $26.6 million, came from a company that the U.S. 
Justice Department had sued just 4 years ago. Those pumps 
apparently did not work. People inside the Corps of Engineers 
questioned whether the pumps should be purchased, alleged that 
they would not work. In any event, at least the stories about 
this suggest that it was a profound waste of the taxpayers' 
money, an unwise decision in contracting. I want to ask you 
what we should make of these stories and what the Corps' view 
is of what has happened there.
    Mr. Woodley. Senator, the provision of pumping capacity to 
complement the temporary closure structures on the drainage 
canals at Lake Pontchartrain, is perhaps the single aspect of 
the project that has taken more of my personal attention than 
any other. I have been very deeply involved in it and have 
followed it very closely. I can tell you that the challenges of 
that effort should not be minimized. We're not talking about 
the kind of pump that you put in your birdbath. These are very 
serious installations of enormous capacity, capacity almost 
unknown elsewhere in the Nation.
    They were accomplished in time for the beginning of the 
2006 hurricane season on a schedule of unprecedented speed and 
scope and overcoming enormous challenges of the hydraulics and 
the planning and construction by people who were extremely 
dedicated to the work. I am not familiar with the 
technicalities of it. I do not pretend technical expertise. I 
do know that a great deal of technical expertise and scrutiny 
has been given to this and I believe that at the end of the 
day, when the full story is told that it will be a rather 
different story from the impressions and implications that we 
have from the initial report.
    Senator Dorgan. Well, let me ask a specific question then. 
Is it the case that a mechanical engineer from Corps wrote a 
memo to Corps officials saying the equipment being installed 
was defective, warned that the equipment would break down 
should they be tasked to run at a normal use, as it be required 
and that when the pumps were installed, they were defective, 
have broken down sufficient so that you've had to withhold 20 
percent of the funding of the contract?
    General Strock. Sir, I should probably answer that as the 
Corps of Engineers representative here. I am not aware of a 
member of the Corps of Engineers that expressed those concerns 
but his or her concerns, I think, are valid. The fact is, as 
the Secretary has said, this is a very, very complex and large-
scale operation. I'm not sure that anything like this has ever 
been done before. In addition to focusing on the complexity, 
I'd also like to recognize that this is a tremendously 
important function, too. Our task is to keep the waters of Lake 
Pontchartrain out of the city in the event of another storm 
surge but we must do that in a way that does not interfere with 
the city's ability to pump rainwater that falls inside the 
city. So we know how important this is.
    Sir, the process that would normally be followed for a 
project of this size and complexity would take about 3 years to 
accomplish. It's been about 18 months since the Corps got this 
mission and by the end of April, we will have those pumps 
operating effectively. We know what the problems are and we 
have the solutions in place. The normal protocol is to test 
pumps in the factory. You can do that with pumps below 42 
inches in diameter. With pumps the size of these, there is no 
protocol for factory testing and we have not been able to 
identify a factory in the United States that can test these in 
the factory as the Hydraulic Institute likes to do.
    Our Engineering Research and Development Center worked with 
the Hydraulic Institute and proposed a protocol of field 
testing. That protocol was reviewed and approved by the 
Hydraulic Institute, which is the authoritative body in these 
matters and those tests have been conducted in the field. They 
did determine problems. We experienced significant vibrations 
in the pumps. We know why that occurred. We are making fixes to 
that.
    So sir, this is not unexpected. The process of 
certification and testing of the pumps, which would normally be 
done in a factory had to occur in the field in this case. We 
were faced with the challenge of running things through the 
normal process and having no pumping in place or very little 
pumping in place for the 2006 hurricane season. We chose to 
accept a calculated risk and put something in place that would 
have an effect at the beginning of the hurricane season.
    So sir, I offer no apologies for this, for the efforts of 
the Corps of Engineers. There may be some issues you touched on 
that I'm not familiar with that I will look into. The matter of 
the Department of Justice investigation, we were aware of that 
during the contract award process. Unless a contractor has been 
debarred or specifically proposed for debarment, we cannot 
prohibit a contractor--cannot deny an award to a contractor and 
that process had not occurred with the contractor.
    Senator Dorgan. General, thank you. I will have some other 
questions. Let me just point out on debarment. It's pretty hard 
to get debarred these days. That's a particular concern I have.
    General Strock. Yes sir, but as the law says, unless they 
are debarred, we cannot----
    Senator Dorgan. You cannot consider----
    General Strock. We cannot prevent them from----
    Senator Dorgan. You can't consider other issues? But my 
point is that there are a whole lot of companies, I think, out 
there of which significant questions have been raised in 
contracting that are not debarred and that I would hope we 
would think twice before contracting with again.
    But having said that, we've been joined by the ranking 
member, Senator Domenici. Senator Domenici, we have a series of 
six votes starting in 35 minutes. I'm going to start a series 
of 5-minute rounds. I apologize for that but if you have an 
opening comment, I'd be happy to recognize you for that and 
then I'm going to call on Senator Craig and we'll just use the 
early-bird rule.

             OPENING STATEMENT OF SENATOR PETE V. DOMENICI

    Senator Domenici. Mr. Chairman, I want to take just a 
couple of minutes to explain where I have been. I happen to 
also be on the Budget Committee. Today, the Budget Committee 
was finishing its work, fellow Senators and that meant under 
their rules, you must be present in the room to vote. You can't 
vote by proxy. So we had a full house of Senators voting for 
the last 2\1/2\, 3 hours and that meant I could not be in two 
places. I knew that you all would be here and get the job done 
and I'm going to return it now to you, Mr. Chairman and then my 
turn will come. If it doesn't, I'll do my homework another way. 
Thank you.
    Senator Dorgan. Thank you, Senator Domenici. I did mention 
the Budget Committee responsibilities you have and I appreciate 
you being here.
    [The statement follows:]

             Prepared Statement of Senator Pete V. Domenici

    Thank you Mr. Chairman, I would like to take a couple of moments 
and address a couple of priority issues.
    Like all of my colleagues, I continue to eagerly await the final 
decision by the Corps on which priorities they will choose to fund for 
the fiscal year 2007 budget. I sincerely hope that the Corps will not 
focus only on its priorities, but will continue to provide funding to 
the many ongoing projects and studies that were funded in fiscal year 
2006.
    As part of the fiscal year 2008 budget the administration has 
indicated that the Inland Waterway Trust Fund may go broke within a 
couple of years due to the large amount of rebuilding needs. The 
administration has indicated that they will be submitting a legislative 
proposal to replace the current 20-cent per-gallon diesel fuel tax with 
a user fee.
    As the author of this current fee, I have more than a passing 
interest as to how this matter is resolved. It is vital to our economy 
that we sustain a viable, operating inland waterway system. The 
continued effectiveness of the system will be determined if there is a 
reliable source of funding.
    The responsibility for solving this problem falls to EPW and the 
Finance Committee, but the solution will have a big impact on this 
subcommittee in the future.
    Mr. Chairman, I want to address an issue that I believe you and I 
share a similar interest--drought relief.
    As you are well aware many communities and rural areas in the West 
and Midwest are experiencing a severe drought. I believe we need to 
find solutions to address our long term water needs and we need more 
resources committed to this effort.
    Two programs that have not received sufficient attention in this 
budget are Water 2025 and the reclamation and reuse programs managed by 
the Bureau. I think everyone would agree that $11 million requested for 
Water 2025 will not provide the long term solutions we will need.
    Another area that has been seriously underfunded is water 
reclamation and reuse. This activity is a vital component of increasing 
near term water supplies for the West. The Federal dollars are 
leveraged to make these projects a success. Only about $10 million was 
requested for these activities in fiscal year 2008. I am proud of the 
fact that Congress has consistently provided between $25 million to $30 
million for this important work.
    Mr. Chairman, I would like to work with you to bring greater 
attention to this issue and work to raise awareness among our 
colleagues. When compared to the budget priorities of this 
administration, which increasingly includes large amounts of funding 
for environmental infrastructure projects, it is not at all 
unreasonable for this subcommittee to focus more resources on 
addressing water shortages. I am certain it will pay off in the future.
    Mr. Chairman, another priority of this subcommittee has been the 
recovery of the gulf coast following Hurricanes Katrina and Rita. Over 
the last several supplemental requests this subcommittee has provided 
over $6 billion in rebuilding assistance to the gulf coast.
    This region was devastated by these storms, and I am proud to say 
this subcommittee worked hard to address critical infrastructure 
repairs and upgrades that are needed in this region.
    I am interested in hearing from General Strock and Assistant 
Secretary Woodley regarding the rebuilding efforts.
    I am also interested to know if the Corps has been a good steward 
of the Federal resources. I am concerned about recent press reports of 
extraordinary price inflation and poor quality work being performed in 
Louisiana. I hope our witnesses can address these concerns.
    Mr. Chairman, before I close I would like to thank General Strock 
for all his hard work during the hurricane recovery efforts. The 
General is retiring from the Army and this will be his last hearing 
before this subcommittee.
    General, I am sorry you are going, but I greatly appreciate your 
hard work and dedication to this country.
    Thank you.

    Senator Dorgan. Senator Craig.
    Senator Craig. Thank you very much, Mr. Chairman. I have 
several questions. I'll ask a couple of them and submit the 
rest for the record so that we can save time and everybody get 
a round.
    To the Corps, does the 2008 budget request provide 
sufficient funding to complete the Snake River Programmatic 
Sedimentation Management Plan by its 2009 due date and if not, 
how does the Corps intend to provide potential navigation 
maintenance if it is not needed prior to the completion of the 
plan?
    General Strock. Sir, I'll need to take that for the record. 
I don't have the specifics on that study in front of me.
    Senator Craig. Okay. We'll take that for the record then 
and anticipate you responding to it. To the Bureau, Mark, can 
you please describe in more detail the new Loan Guarantee 
program that you've outlined? For instance, what kind of 
strings are attached to these loans and what kind of interest 
rates and loan durations can we look forward to?
    Mr. Limbaugh. Mr. Chairman and Mr. Craig, thank you. Before 
I answer that, I too want to add, I was remiss in not adding my 
goodwill to General Strock. Under his leadership, we have, 
between the Bureau of Reclamation and the Army Corps of 
Engineers, we've probably worked closer and better together 
than ever before. So thank you, General Strock.
    To answer your question, Senator, we are in the process of 
developing the rules and regulations for that program. It's my 
understanding in talking with the Department of Agriculture, 
who we will be working very closely with to try to administer 
this program without increasing the bureaucratic side of 
operating a program such as this. The way it works is we would 
only have to appropriate a percentage of the total loan volume 
out there as it pertains to the default rate or the possible 
estimated default rate.
    So this would allow us to be able to allow our contractors 
to obtain financing for their share of improvements to our 
system, which currently, we're just doing under the Operation 
and Maintenance contracts that we have. It's burdensome on them 
to have to come up with large amounts of money in 1 year or 2 
years from the rate payers. So this would allow a tool in the 
toolbox, if you will, in order to finance their share.
    The interest rates are generally lower than the normal 
commercial rates, from what I'm told. I have not done any 
recent analysis of those rates and what levels they are but 
they are very close to the municipal rates that are currently 
available under the tax free municipal bonds, which are also an 
opportunity for some of these contractors to use.
    But I guess the point is, Mr. Chairman and Senator Craig, 
this program is something that we don't have right now and what 
we're trying to do is take care of a problem that we see out 
there in as fiscally responsible way as possible, not to hit 
our appropriations budget as much as it would have if we did 
direct loans but also to add a tool in the toolbox that our 
contractors can use to keep these facilities viable into the 
next century.
    Senator Craig. Mr. Chairman, thank you. Secretary, thank 
you for those thoughts and as you work through this, keep us 
informed. You participated with me in the Center for the New 
West in looking at creative, out-of-the-box ideas that I think 
added a dynamic, like you say, a valuable tool in the process 
and Commissioner Johnson, you've been there looking at this. 
We've got a lot of work to do across the country and to be able 
to leverage resources in a way that multiples them beyond our 
capability here is, I think, a very valuable approach. So I'll 
watch this very closely to see if we can't assist you in making 
it happen sooner and enhancing it if at all possible.
    Mr. Limbaugh. We will keep you informed.
    Senator Craig. Thank you, Mr. Chairman. Thank you.
    Senator Dorgan. Senator Craig, thank you very much. Senator 
Bennett.
    Senator Bennett. Thank you, Mr. Chairman. I got my question 
asked in my opening statement so I won't ask it again and see 
if you remember it well enough to give me an answer.
    General Strock. Yes, Senator, we certainly do but on 
something on the detail of a program like that, we would have 
to take that for the record and get back to you. I can assure 
you that of course, any re-programming of any kind at this 
time, under the rules established by the committee would have 
to be submitted to both houses for a concurrence of some 
nature. But we will definitely be working on that. We recognize 
that prior reprogrammings have, in many cases, created an 
obligation on the part of the agency to seek repayment at the 
earliest possible time, especially when the funding could be 
usefully utilized within the program, as you indicate that it 
can be now. So we're very concerned about that and we'll 
definitely be getting back to you directly.
    Senator Bennett. Thank you. I like the phrase, the earliest 
possible time. Thank you, Mr. Chairman.
    Senator Dorgan. Thank you very much, Senator Bennett. 
Senator Landrieu.
    Senator Landrieu. Thank you. I want to begin by saying the 
three gentlemen representing the Corps before me have been 
personally supportive of our efforts in New Orleans and in the 
gulf coast to rebuild. I've spent many hours with you all, 
walking levees, looking at flood walls, walking through 
neighborhoods assuring people. So I want to start with a 
personal thank you to you.
    But after being close up for 18 months, I've come to the 
conclusion that you all may be stuck in an agency that is 
dysfunctional and I believe that your wholly inadequate budget 
is what this committee is discussing. I have two or three 
specific questions but for this committee, because I intend to 
stay on this committee for several years to try to fix it, I 
want to say to the chairman, I thank him for taking his time to 
ask the question about the pumps and I'll get to that in a 
minute.
    But the overall budget for this Corps, the way I'm looking 
at it, is a construction budget of all new construction for the 
whole country--for the whole country--of $1.5 billion of new 
construction, $2.4 billion for operation and maintenance, $180 
million for regulatory and then there are other things. Is this 
what is reflected in the documents that you've submitted?
    I want to show you all a chart that I had my office do 
since I couldn't get this information from anywhere. We just 
did it ourselves. This is a frightening chart. This shows the 
fall-off in appropriations of Civil Works projects in this 
country since 1929. We are funding less than one-tenth of the 
GDP of Civil Works projects in 2007 than we did in 1929.
    And in the year 2005, which is not even on this chart, I 
want the chairman and the ranking member to know, the levees in 
New Orleans broke. That is the end of the story. That's the 
only story that needs to be told. That's what happens when a 
government like ours will not fund critical infrastructure 
operation and maintenance and construction. Levees break. 
Cities and communities are ruined.
    The problem I have, Mr. Chairman, with this budget is it's 
the same budget. Nothing has changed. Nothing. Nothing has 
changed. There is no money in this budget for SELA. There is no 
money in this budget for adequate levee construction. I don't 
know how many people have to die. I don't know how many homes 
have to be lost. I don't know how many businesses have to be 
ruined to change the budget.
    Now, there is no sense in my arguing this with you because 
you all are not in charge of the budget. But I'm going to ask 
this chairman publicly to have someone from the administration 
that is in charge of the budget, appear before this committee. 
I would like to ask OMB that controls the budget to appear 
because I'm going to ask them how they justify this budget. 
Maybe pre-Katrina. You never really would know what would 
happen when levees broke so we could sort of pretend we didn't 
have to do anything. But after Katrina?
    This is my question. The chairman asked his question of 
this but the memo was written by a Corps, according to the AP, 
by Maria Garzino, a Corps mechanical engineer overseeing 
quality assurance at a MWI test site in Florida. In her memo, 
she warned that the pumps would break down should they be 
tasked to run under normal use, as would be required in the 
event of a hurricane. The pumps failed less strenuous testing 
than the original contract called for, according to the memo. 
Originally, each of the 34 pumps was supposed to be load 
tested, made to pump water. Of the eight pumps that were load 
tested, one was turned on for a few minutes. The other was run 
at a third of the operating pressure. Three of the other load 
test pumps experienced catastrophic failure and these are the 
pumps that we have installed in the canals that flooded the 
city of New Orleans and hurricane season is 2 months away. So 
you can imagine the calls that I'm getting to my office today, 
trying to explain this and my time is up.
    So I want to say, I have many questions I'm going to 
submit. But I am going to call for a full investigation of how 
these pumps were purchased, how they were installed, why they 
don't work but more importantly, Mr. Chairman, I think we have 
to get to the bottom of a budget that is wholly inadequate, not 
just for south Louisiana but I think it is inadequate for the 
other 49 States that are represented in this Nation and I think 
it is a dangerous budget and I think people's lives are at risk 
because I've seen their lives lost because of the levees 
breaking. I could go on but nothing has changed in this budget 
and I'm going to continue to press to get more funding, more 
fuller funding and more organizational reform at the Corps of 
Engineers. Thank you.
    Senator Dorgan. Senator Landrieu, thank you very much. 
Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman and 
gentlemen, thank you. Secretary Woodley and General Strock, in 
the wake of Katrina, you've conducted a review of levee systems 
throughout the country. One of them was in Woonsocket, Rhode 
Island and you discovered some deficiencies, which the local 
officials have estimated would cost $2 million to repair and 
also, there are some indications of even more serious 
structural issues.
    My first question is, is this a one-shot sort of inspection 
or do you have a regular program to inspect the structural 
aspects of these levies?
    General Strock. Sir, this was not a one shot effort. We 
have a program entitled, Inspection of Completed Works. When 
the U.S. Army Corps of Engineers works in partnership and 
constructs levees, they are turned over to a local sponsor for 
operation and maintenance. It is their responsibility to 
provide 100 percent of that O&M. We have a periodic inspection 
requirement that ensures that they are performing the 
maintenance and that's important that they do that so we can 
ensure that they are maintaining the Federal specifications 
when they are in the Federal program, as the levee in 
Woonsocket is, then in the event of a compromise of that 
structure under-load, if a storm overwhelms it and it needs 
repair, then we can go in and have the authority to repair 
that.
    If they do not maintain it, then when those structures are 
damaged, we do not have the authority to go in and conduct 
repairs. So this is a periodic inspection. The difference this 
time is we learned very well in New Orleans that we had to re-
emphasize the rigor of this program and for that reason, we had 
about 120 communities that were required to show us that they 
have a plan to improve the operation and maintenance of those 
levees.
    Senator Reed. Well, it struck me that this was--if there 
was ongoing inspections, they wouldn't have quite this 
liability that they would have been corrected or at least have 
been on notice and I think a lot of the community leaders were 
surprised when the inspection took place and the extent of your 
criticism was known.
    Is this--again, you might have an inspection program on 
paper but is this done on a yearly basis? Is it done rigorously 
or is it now something?
    General Strock. Sir, it's done every 2 years and we saw a 
wide variety. We saw many cases where there were repetitive 
deficiencies noted on the levees and we simply didn't present 
an ultimatum to the community as we have now. We have just 
recognized that we have to get tough, if you will, on the 
operation and maintenance responsibilities. It's all about 
public safety. It is regrettable if we let things slip over the 
years but we have to draw the line now and that's what we're 
going to do.
    Senator Reed. Well, going forward and that's what I think 
our major objective should be is that this is one of 100-plus 
levee systems around the country in small communities. I'm 
wondering within your request of funding, will there be any 
Federal dollars requested to help these communities? And it's 
not just for Rhode Island, I would suspect it's probably every 
one of these facilities. And again, these are small communities 
who are struggling to do all sorts of things and the idea that 
within 1 year, because of your--as you described ultimatum, 
they have to put in millions of dollars of sophisticated 
engineering work without any help. Have you considered that in 
your request?
    General Strock. Sir, we don't currently have the authority 
to provide the assistance. We don't have the appropriation to 
do that and it's a policy call about whether to apply for that 
kind of capability, which we have not made at the Corps of 
Engineers.
    Senator Reed. Well, I would hope that if--it seems to me, 
the only way this is going to get done, frankly--otherwise 
you're going to have communities that just have a stark choice. 
They don't have the resources and the real consequences that 
imperil Federal flood insurance for the surrounding communities 
and that's--that leaves a too unacceptable sort of option. So 
we've got to something at every level and also local State 
level. But I would hope we could get our heads together and 
come up with something.
    General Strock. Yes, sir. And sir, I'll provide you the 
details on Woonsocket about the specifics of the progress at 
that particular level.
    Senator Reed. Colonel Thalken, by the way, your Commander, 
is an excellent district engineer and he's been very 
cooperative with us. He and his civilian colleagues should be 
complimented for the effort in New England. Please pass that on 
to him.
    General Strock. I agree, sir, and thank you.
    Senator Reed. One of the other areas that was illustrated 
in Katrina that made us all sort of sit up and take notice is 
the poor state of flood mapping. You have inundation maps, FEMA 
has flood maps. Your inundation maps will show much larger 
flooding in CAT 2 and 3 storms and many communities are living 
in sort of a never-never land where they look at 20-year-old 
FEMA maps and they think they can build in a particular where 
your inundation map shows already flooding in a serious storm.
    My time is expiring but I would hope that we could work 
together to ensure that we have a consistent mapping program 
that reflects your information and the FEMA information and do 
it in a way that all the communities know where they stand.
    General Strock. FEMA does have the lead on the Map 
Modernization program, sir, and we work very closely with them.
    Senator Reed. I have other questions, Mr. Chairman and I'll 
submit them. Thank you.
    Senator Dorgan. Thank you very much. Senator Domenici.
    Senator Domenici. Well, thank you very much, Mr. Chairman. 
I think it probably is best for us that I came along kind of 
late today because frankly, I've been at this so long that I am 
truly sick and tired of the kind of budgets we are getting from 
the executive branch of Government for the Corps of Engineers 
and the Bureau of Reclamation. I truly believe, Mr. Chairman, 
that we don't have enough time. If we had enough time, we could 
spend the next 6 or 7 months, this committee, just traveling 
this country to find out where--where we are not doing our job. 
It's got to be rampant.
    These little tiny budgets that you're sending up here to 
accomplish what we know is the problem is an absolute joke. 
Some people spent a lot of their time the last 15 years beating 
up on the Corps for not doing what people thought they should. 
I never was on that side. I tried my best to work with the 
Corps but I thought for the most part, they tried very hard. I 
still feel that way.
    I think you can slack off and make mistakes but I tell you, 
that one card that the Senator from Louisiana put up showing 
just one line, linear, what's happening to the projects of the 
Corps of Engineers is absolutely--it just convinces you that 
somebody doesn't care.
    To me, Mr. Chairman, you asked me a moment ago, what about 
OMB? They don't testify. What about OMB? They sit in the back 
room and there is no question they underfund this and they 
know, for most of the time--look at me. I've been chairman up 
here. They got a good sucker like me that I was both Budget 
Committee Chairman and chairman of this subcommittee and I'd go 
fight to get them an extra $3 billion or $4 billion every year. 
They knew it. I think I contributed to making it worse. They 
just come along and fund everything less, figuring somebody, 
some dodo down there in the Senate or the House will come along 
with an extra $3 billion or $4 billion. But that isn't right. 
We took it away from other programs here, the way we budget.
    So I have a whole bunch of questions here I'm going to give 
you. I want them answered, if you don't mind, to the committee. 
They are about my State. They are about drought out there and 
there will be one in there that will be directed to you, Mr. 
Chairman, seeing if you might come out there and go visit these 
drought areas one day, one time.
    But I actually don't think we can put a budget together 
that is meaningful that spends the kind of money that the White 
House has sent up here for the Bureau of Reclamation and the 
Corps of Engineers. I think it's just as well let a few kids 
get down there with crayons and let them draw some things. 
They'll do just as well as we do. Because we don't know what we 
can do with this little tiny bit of money they've given us and 
the messages have been there. Now they are falling apart and 
who is to blame? And then we just had Katrina knock us in the 
head. It's no longer cheap. This is big, big time business.
    So I've got about 10 for you and I hope you answer them. I 
know you're leaving us, General, as I understand it. I met your 
successor. He's not here today but he's going to do fine and we 
look forward to working with him. He will do a good job, trying 
to bear with it and I hope the first time we get him up here 
that we impose on his good judgment the fact that he is also 
responsible to us, not just to the OMB and executive branch. If 
they want to come up here and testify, they better not come up 
here with budgets like this because they are going to be 
insulted because all they do is infuriate us.
    I mean, nice, decent Senators see this kind of junk and 
then we say, what is happening? If we wait another 5 years 
before we get started, we'll never fix this stuff. You all know 
that. You can't do it, that's all. So I'm not even going to ask 
you a question. I'm just going to tell you, whatever your 
problems are, we can fix those. But we can't fix the problems 
of these--of all of this work that is under-funded and falling 
apart and conduct oversight hearings on whether we bought 
things from the right supplier or not, when the whole thing is 
falling down.
    You know, I was also the one that came along and put that 
tax on barges. You remember. I don't know if any of you were 
around. I was the Lone Ranger then but I did win. It was a 
terrific, exciting day on the floor when we took a vote and 
every big Senator that was from the South wanted to continue 
the way we were and I'll be darned if I didn't win and they had 
to pay a little bit of money for the Inland Waterways. But then 
you know, it doesn't get spent anyway but we should shock them 
a little more and make the program a real good one, in my 
opinion. But anyway, we'll see.
    Mr. Chairman, we've got a lot of work to do and I thank you 
for your dedication. But we can't get it done unless we hit 
them hard because it's not going to work out. It's just going 
to be us up here working and they're not going to be working.
    Senator Dorgan. Senator Domenici, thank you very much.
    Senator Domenici. Thank you.
    Senator Dorgan. Senator Allard.

                           PREPARED STATEMENT

    Senator Allard. Mr. Chairman, thank you. I do have a 
statement I'd like to have you put in the record, if you would, 
please.
    Senator Dorgan. Without objection.
    [The statement follows:]

               Prepared Statement of Senator Wayne Allard

    Mr. Chairman, I would like to thank you for holding this hearing. I 
would also like to extend a special welcome to Commissioner Johnson, as 
I believe that this is the first time he has appeared before our 
subcommittee. I am currently moving back and forth between this hearing 
and mark-up in the Budget Committee, so I appreciate the chance to be 
here.
    Those of us in the West are well aware of the important work that 
the Army Corps and the Bureau of Reclamation has done over the years. 
The projects developed by both of these entities are vital in supplying 
water to many people in rural areas of my home State of Colorado. The 
value of these projects has become even more evident during the 
prolonged drought that Colorado--and the entire West--continues to 
experience.
    Mr. Woodley, I am grateful for the work that the Army Corps has 
done and continues to do in Colorado, especially with the Fountain 
Creek and Chatfield Reallocation Studies. I must however express my 
disappointment with the fact that, although both of these studies could 
be completed with another year of funding, neither project was included 
in the President's proposed budget again this year. I will have 
questions about these projects later in this hearing.
    I would also like to bring up a concern that is emerging with 
Bureau projects throughout the West, which I will also follow-up on 
with some questions. Mr. Commissioner, as I am sure you are aware, many 
federally-owned Bureau of Reclamation projects are at or past their 
life expectancy and are in severe need of rehabilitation. While the 
cost of rehabilitation is generally one-half to one-third of the cost 
of replacing a project, this is more than many communities can afford. 
The Bureau has maintained that rehabilitation is the same as operations 
and maintenance, which in many cases was turned over to local operating 
agencies long ago.
    It seems to me, however, that these two things are not the same. No 
matter how many oil changes or tune-ups you perform on a car, it will 
eventually no longer be serviceable. The same can be said of these 
projects. Local entities have worked diligently over the years to care 
for, and make repairs to, these projects. But eventually they reach the 
end of their operational life, and more extensive help is needed. 
Especially in light of ever increasing Federal water standards and ever 
diminishing water supplies. I believe that the Federal Government 
should play a role in assisting local communities in the rehabilitation 
of federally-built, federally-owned projects.
    Again, thank you for holding this hearing, Mr. Chairman. I look 
forward to working with you, the Ranking Republican Member Mr. Domenici 
and our colleagues to ensure that these two important agencies are able 
to continue moving forward with the important services that they 
provide to our communities.

    Senator Allard. Well, I have some of the same concerns, I 
guess, that Senator Domenici raised. In the State of Colorado, 
for example, we have a Fountain Creek Water Study that we 
started in 2001 and then in the President's budget, he doesn't 
continue the study. Isn't that a waste of taxpayer dollars to 
put out some money at the first part and then you don't put any 
more and you haven't even completed the study? I don't 
understand the thinking when you get these projects. It seems 
to me that when you get a study started, you complete it and 
find out what the results are and if you decide at that point 
you didn't want to move on, you've got the basis of the study 
and that's understandable. But why stop in the middle of the 
study and run the risk of wasting taxpayer dollars on the first 
half of the study because you didn't complete the last half.
    So my question is, is how do you determine your priorities 
and some of your funding and in particular, on issues like 
that? That really is a perplexing problem for me. I don't 
understand how you set your priorities when you let things like 
that happen. Secretary Woodley?
    Mr. Woodley. Senator, I can tell you that I believe that 
would be a study funded in our General Investigations account 
and that account is the single account, I would say, which is 
under the greatest pressure in all of our budget. That is the 
most difficult thing to budget something in, in my budget 
process. I'm an advocate for a strong investigations and 
studies program because I believe that it pays enormous 
dividends for the Nation. There is a view within the 
administration that the studies have an element to them that is 
counterproductive because they tend to--they lead to new 
proposals for new projects as opposed to working on our backlog 
of existing projects.
    Senator Allard. Yes, but Secretary, why would you start a 
study and then not complete it? Not provide money to complete 
it? I mean, you really haven't answered my question. I can 
understand your frustrations. There are a lot of requests but 
it seems to me, it's even more imperative that you focus your 
resources on what you have, complete those and then take the 
next step and we're all better off if we do that.
    Mr. Woodley. I think your point is very well taken, 
Senator.
    General Strock. Senator, if I could, from the Corps' side 
on this?
    Senator Allard. Yes. I didn't hear your response, Secretary 
Woodley.
    Mr. Woodley. I said it was very well taken.
    Senator Allard. Oh.
    Mr. Woodley. I said that I believe that the Senator's point 
is very well taken, Mr. Chairman.
    Senator Dorgan. So his proposition that withdrawing funding 
in the middle of a study is not the right thing to do?
    Senator Allard. Yes, that's--can we change the budget 
proposal?
    Mr. Woodley. That's what I said, Senator. Except to the 
extent that of course, that the President's budget is totally 
without flaw.
    Senator Allard. Lieutenant General.
    General Strock. Yes, sir. I certainly agree with what 
Secretary Woodley has said here. Where the Corps is concerned, 
though, we do have some flexibility in this current fiscal year 
work plan and studies like this, which are underway, are being 
considered in the development of that work plan. We do not want 
to stop a study if we don't have to. Unfortunately, that work 
plan has not been approved and I can't share with you where 
Fountain Creek is going to fall out in that. But I can assure 
you we understand the importance of this study and in putting 
together our work plan, we took that into consideration.
    Senator Allard. You know, we have flooding problems on that 
creek. We have discharge problems in that creek. We have a lot 
of things that are happening in regard to that creek and I have 
a hard time understanding, if we're really interested in water 
quality and being able to manage our river and waterways, why 
more attention isn't paid to that particular project and it 
affects more than just the Fountain Creek. You've got the 
downstream aspect of it, which the Arkansas River and a lot of 
interest there that are very keen, all the way down to the 
gulf, as to what is happening on that little creek because it 
drains out of such a large metropolitan area, which is Colorado 
Springs.
    General Strock. And that is absolutely consistent with our 
new approach, doing things on a more watershed and basin wide 
basis to understand the cumulative benefits and impacts that 
works within the watersheds. So absolutely, Fountain Creek is a 
great example of that.
    Senator Allard. Well, you know, I guess we're a little 
unique in the State of Colorado. We're head waters some six, 
seven major drainage systems. We have four--we're broken down 
into four districts and so I guess our interests get kind of 
divided out. The other thing that I want you to take a look at 
is the Chatfield Reallocation Study. It's one of those projects 
that is just an emerging problem. We've got some farmers who 
are going to be without water because of some water management 
issues in the State of Colorado and it seems like we have 
plenty of storage capacity, more than what we need for flood 
control, considering all the other resources we have on there 
but if we could just have a study again, I think it would help 
us on that. So I hope you can take a look at it. I've got a 
number of other questions that I'd like to raise with you but 
the fact that I'm running out of time and we're getting ready 
to have a vote here, we'll send those to you and if you could 
give us a response, I'd appreciate it.
    General Strock. Yes, sir.
    Senator Allard. Thank you.
    Senator Dorgan. Senator Allard, thank you.
    Senator Landrieu. Mr. Chairman, could I say one more thing 
before I leave and I really appreciate again, you using your 
time for the questions but I want the record to reflect, I'm 
also very concerned about the recommendation to move $1.3 
billion--$1.3 million--billion; thank you, Roger--$1.3 billion 
from one set of levee projects, flood control, to another. I'm 
going to oppose that. I understand that in the past, it's been 
done but I'm not going by the past anymore.
    If there was enough money in the pot, I could understand 
moving it around, based on what you're ready to fund. But when 
the pot is only one-fourth or less filled, moving money around, 
once it has been allocated, only makes it that much harder for 
those of us that have to fight to get it for you. So I am 
opposed to it. The chairman knows that and I hope it is not 
reflected in the budget that we submit to the full committee.
    Mr. Woodley. Senator, in response to that, the important 
thing is that the money be made available to the effort that 
must go forward. We are now in a state where we need additional 
money. If you can find a better source for that----
    Senator Landrieu. Well, then go get--let me suggest where 
you can get it from. You can go to 1600 Pennsylvania Avenue and 
you can ask the President for an additional $1.3 billion. You 
will not get it from this Senator or this committee. Thank you.
    Mr. Woodley. In that event, Senator, there will be delays 
in the process and the program.
    Senator Dorgan. Well, we have a vote that is starting but I 
have about--well, I have time so I'm going to ask you all some 
questions as well and let me say this. Senator Domenici and I 
think Senator Allard and Senator Landrieu all expressed 
concerns I have.
    You're all up here representing the President's budget. I 
understand that. On the other hand, I cannot believe that you 
are satisfied to be here representing, for example, in the 
Construction account, a very substantial decrease for the 
Corps. A 38 percent decrease given what Senator Landrieu showed 
you on that chart. I mean, I can't believe you're here thinking 
that makes a lot of sense.
    So you, I guess, are tied to saying to me you support the 
President's budget. We can't get the Director of OMB up here 
but everyone in this room, I would think, understands that, 
given what we have to do, cutting the construction budget of 
the Corps of Engineers by 38 percent makes no sense at all.
    My understanding is that in the Corps budget you proposed 
67 projects for construction. Now we have about 300 projects 
that we fund. That means about 230 projects you're proposing 
that we not fund. Are you saying to us you don't support those 
projects? You don't want--I guess what you're saying to us is 
that you don't want those projects funded. Is that what you're 
saying to the country? And if so, why? Why would you say that?
    Mr. Woodley. We're saying that within the constraints of 
the amounts that we've been allocated, that the projects we're 
recommending are the highest priorities but generally, we agree 
completely that this budget does not fund all of the good 
things that the Corps of Engineers could accomplish in fiscal 
year 2008.
    Senator Dorgan. So some of the projects that you are not 
funding do have merit you say?
    Mr. Woodley. Yes, Mr. Chairman, they certainly do.
    General Strock. Sir, if I could just chime in on that. In 
my humble opinion, all of those projects do. We have the most 
rigorous process in government to make recommendations to the 
administration and Congress on what could be done with our 
investments. We have a $1.3 billion backlog in O&M right now 
that should be done but we also have a--if you'd look just at 
those budgeted projects, we have about a $9 billion backlog in 
construction and with the full suite of projects, it's about a 
$50 billion backlog.
    So clearly, there is a need there and there is 
justification. Having said that, sir, I do understand the 
context in which we're working and I know that the funds are 
not unlimited, either to the Congress or the President. So we 
just make our level effort to have a process in which we can 
prioritize using performance based metrics where the money 
should be sent, where these investments should be made to 
produce the highest returns. It is tough but we think we have 
done about as well as we can, given those constraints on the 
availability of funds.
    Senator Dorgan. Yes, but because you're confronted with a 
Hobson's choice doesn't justify making the wrong choice, 
consistently the wrong choice and it seems to me, although I 
understand your point, that your point is that you're saying to 
me there are 230 other projects that have merit but we won't go 
ahead and complete them. We won't work on them this year at 
all. I mean, is that Byzantine, as my colleagues, Senator 
Allard suggests? We have 240, roughly 230 ongoing projects that 
are underway and you say, ``Sorry.'' Tell everybody in the 
country that is looking at these projects, expecting these 
projects, that they are not the priority that you thought they 
were. We're not going to do it.
    General Strock. Sir, the challenge we have on that is that 
for years, we--as we encountered this situation, we spread the 
available budget thinner and thinner and thinner and it got to 
the point that no project was receiving sufficient funds to 
complete anything. So we decided, with the administration, to 
try to concentrate the available funding into projects that 
could be completed and begin to return on those investments. 
And we've attempted to do that, sir, to pick out those high 
performing projects that will do that for us. And it is 
regrettable. They are clearly--all of our projects that I 
recommend to you will have a 1 to 1 return on investment as a 
minimum or higher.
    Senator Dorgan. Or higher?
    General Strock. Higher, yes sir. Today, in order to reach 
the funding cutoffs, they had to have at least a 1.5 benefit-
to-cost ratio for us, where economics are concerned.
    Senator Dorgan. You all can't, I guess, express publicly 
the frustration I express. I understand what has happened to 
our fiscal policy. We were told, and I did not support it, 
``Katy, bar the door. Let's give very big tax cuts.'' That 
reduces our revenue stream and then we have people come, and by 
the way, the same people who sat at these tables telling us 
that we're going to have future expected budget surpluses--
people representing the President, who knows whether they felt 
that was the right thing or not, to the table representing the 
President and say, ``We're out of money'' so therefore these 
projects, that have merit and invest in the infrastructure of 
this country, we can't possibly do them. Why? Well, we gave the 
store in tax cuts and it didn't quite work out. We had a 
recession. We had a terrorist attack and two wars. So we pump 
up $500 billion, $450 billion, none of which we pay for. I 
mean, it's unbelievable to me. So I know you're here speaking 
for others and I know that if I ask you a question and ask you 
to be completely candid about your personal feelings, you will 
not do that because you're here representing the President's 
budget.
    I'm telling you, I agree with a couple of my colleagues 
here. This makes no sense and I've just taken over the 
chairmanship of this committee. I don't have the foggiest idea 
how we put this together but I'll guarantee this--when we make 
choices about this, we're not going to take a look at 240 
projects and say, yes, those projects are underway. Yes, they 
have merit. But this country really thinks that it doesn't 
matter and we'll just stop them. That is not what this 
committee is going to do.
    Now let me just say this. I've seen the Corps of Engineers 
walking the dikes in Grand Forks. I saw the dikes fail. I 
watched the Corps of Engineers people working 24 hours a day in 
a heroic struggle to fight a flood after an entire American 
city, the largest since the Civil War, was evacuated into big 
hangers on an Air Force base. I watched all that. I have 
enormous admiration for the Corps of Engineers and the men and 
women who work there. By the same token, I am the most 
frustrated person in the world about the Corps of Engineers for 
other reasons and General, you know that. I've said that 
before.
    I've watched the Bureau of Reclamation people, over 
Thanksgiving weekend, work 24 hours a day to try to get water 
back into the Fort Yates Standing Rock Indian community because 
the water was gone. The intake silted in because of the 
Missouri River problems. I watched these people from the Bureau 
of Reclamation work right through, around the clock. I have 
great admiration for their dedication and what they've done.
    And yet, I have to tell you, I also am very, very 
frustrated by the Bureau of Reclamation, which brings me to 
this question of the Missouri River. And it's probably a proxy 
for a lot of other frustrations and concerns around this 
country but let me describe it and then I'm going to ask you a 
couple of questions.
    The Missouri River System division built some dams on that 
river. We didn't go ask somebody if you could build a dam in 
North Dakota and flood 500,000 acres, the size of Rhode Island, 
permanently. We didn't go say, ``Let's give away 500,000 acres 
of our State. We'll take a flood that comes and stays so they 
can play softball in the spring in St. Louis.'' We didn't do 
that. The Federal Government came to us and said, you know 
what? You're a sparsely populated State. You've got the 
Missouri River. Can you put a dam and create a big old flood 
there that stays there forever, the size of Rhode Island and if 
you do that, we'll give you something. So that's the cost. We 
got the cost. We got the flood that comes and stays and we'll 
give you Reclamation, we'll give you a whole irrigation, a 
whole series of things, rural water and so we got this flood 
that comes and stays. Then we didn't get the benefits, as you 
know. We got a miniscule portion of the benefits and 
incidentally, this budget that is being proposed will continue 
to diminish the opportunities for us to get the full benefits.
    But having said all that, now we have a reservoir, a big 
reservoir up there that goes up and down like a cork. Now we're 
in the eighth year of a drought, ninth year for Montana. We 
should have 55 million acre feet of water in that Missouri 
River System. There is about 34 million acre feet. Already 
there should have been sirens going off and bells and whistles 
and people saying, ``Wait a second. We've got a huge drought, a 
big problem.'' That has not been the case. There have been a 
few minor adjustments here and there but we still release 
gushing water to support a minimum of an industry down south at 
the expense of a major industry up north.
    Having said all that, we're in a situation now, I mentioned 
the Standing Rock Indian Reservation, where we're out of water 
over the Thanksgiving Day holiday. The city of Parshall is up 
there currently trying to figure out, if they are going to have 
water. Walhalla will be out of water in August.
    So I asked the question of the Corps and the Bureau: How 
are you going to help us deal with this? I know you can't 
control how much water is in the snow pack and how much is 
going to come into the system. But the fact is, if it's going 
to be 20 or 30 percent less again this year, let's deal with 
these things. Let's not tell the communities, ``we're sorry, 
you're on your own.''
    Now I noticed that neither of your budgets have any money 
in it, at least that I can see, for drought issues, to be able 
to give your agencies the opportunity to deal with the drought 
issues on the Missouri River, as an example. To Mr. Johnson and 
Secretary Limbaugh, is there any money in your budget request 
for drought issues on the Missouri?
    Mr. Johnson. A small amount for administration. I think it 
is a little less than $500,000.
    Senator Dorgan. Five hundred thousand dollars?
    Mr. Johnson. Yes, around that ballpark.
    Senator Dorgan. For administration?
    Mr. Johnson. Well, yes, for----
    Senator Dorgan. That's not drought. There may be a drought 
in administration from here to there but I'm talking about 
drought relief money. There's nothing really requested.
    Mr. Johnson. Well, the drought--we do--we have two parts to 
our Drought Act. One is emergency response and the other one is 
contingency planning.
    Senator Dorgan. Let me ask about the emergency----
    Mr. Johnson. Doing drought planning. So the money would be 
for helping do drought plans.
    Senator Dorgan. You do have an emergency account for 
drought but there is no money in it and no money requested?
    Mr. Johnson. That's correct, yes.
    Senator Dorgan. All right. And why would that be the case 
if we're in the eighth year of a drought in our region, in the 
Missouri River System? Why has there not been a request?
    Mr. Johnson. Well, I think particularly on the Missouri 
River Basin, the Dakota Resources Act provides us the ability 
to deal with the tribes there and the problems that we're 
having on the Missouri River. So we have another source of 
funding there to try to deal with that. One of the problems we 
have--
    Senator Dorgan. But you are limited to that because you 
don't have other drought money?
    Mr. Johnson. Right. We don't have other money but we do 
have those funds to help and we have plans in place to address 
the problems on the reservations if they occur.
    Senator Dorgan. All right. General Strock or Secretary 
Woodley, have you requested money for drought issues on the 
Missouri River?
    General Strock. Very much like the Bureau, sir, minimal 
amounts in the funding but we do have the authorities when the 
emergencies exist, to move money to that account, much like we 
do in flood control and coastal emergencies. We have those 
authorities, we have used those in the Upper Missouri and we 
are watching very closely Walhalla and Parshall. We know there 
is a danger there. The current projections for snow pack tell 
us we probably won't have a problem this year but if we do, we 
have the authorities to go in and help, as we have in the past.
    Senator Dorgan. Wouldn't it have made more sense though, 
for both of your agencies to suggest we put a little money in 
the accounts? And I'm going to help you, no matter what your 
response is, I'm going to try to help you this year do that.
    General Strock. Yes, sir.
    Senator Dorgan. But again, I'm perplexed why we would not 
get a budget request that reflects reality.
    General Strock. That is the approach we take in our flood 
control. We have some money in the account, ready to use if we 
need it. But I assure you, sir, if there is an emergency, we 
will be there to do what needs to be done.
    Senator Dorgan. Yes but General, I'm telling you, I have 
meetings out there with all these folks. I just had a meeting 
1\1/2\ weeks ago, 60 to 80 people come from all the communities 
up and down and the Bureau and the Corps is there, wonderful 
people. But you know what they say to me? They say, well, we 
don't have money in these accounts. That's what they say. And 
then I come to a budget hearing and realize you're not asking 
for money in the accounts. That's why there is no money in the 
accounts.
    General Strock. Sir, we'll look into that. The implication 
is, therefore we cannot help and I'll make sure that they 
understand what our authorities are and what we can do to help. 
But thank you, sir.
    Mr. Woodley. Senator, we would address that with the $40 
million that we have requested for the flood control and 
coastal emergencies account on the water intake issue. So there 
is not--it is not specific to North Dakota but it is a flood 
control and coastal emergencies account request of $40 million 
to have on hand if the emergency develops, which we all are 
obviously concerned that it will.
    Senator Dorgan. But with due respect, my understanding is 
that account is not considered overfunded. If anything, it is 
considered dramatically underfunded, even at $40 million. And 
we're not exactly a coastal state, as you know.
    Mr. Woodley. But that is the funding that would be 
available. It is underfunded today because it was not funded in 
fiscal year 2006 and I believe that the request in fiscal year 
2006 was not supported by the committee and therefore, it is 
not available for funding under the continuing resolution.
    Senator Dorgan. Let me--I guess the vote has started and I 
will have to depart in a bit. But let me again express to you 
that none of this is to diminish your service. You come here in 
good faith, representing a budget from the administration but 
you understand, I hope, that this has not been one side of the 
political aisle ragging away at this budget. Almost all of 
those you have heard from say, this isn't a real request. This 
must have been knifed badly by the Office of Management and 
Budget. I know you can't answer the question but I still want 
to ask the question. I assume that you asked for considerably 
more money than this budget request comes to us with. I mean, I 
assume that the budget that you sent up the road in this budget 
process in the administration requests significantly more, 
would that be correct, Secretary Woodley?
    Mr. Woodley. Let me answer that by saying, Senator, that 
this program offers substantial opportunities for worthwhile 
investments in water resources that are not reflected in the 
budget and that is, I think, not a controversial statement. 
That is something that anyone could demonstrate with a very 
minimal knowledge and study of the program.
    General Strock. And sir, where the Corps is concerned, we 
have expressed a capability to do more if more funding were 
available and expressed what we would do with that money.
    Senator Dorgan. I want to make a final point. We, in the 
upper reaches of the Missouri, and I'm going to be parochial 
about the Missouri River system, feel aggrieved, as you know, 
by the management of this system. The river system has had a 
change in management planning and I did not think that change 
was particularly constructive because it still flushes far too 
much water downstream for a very miniscule industry. The barge 
industry has now shrunk to just a minnow of an industry and 
yet, instead of during drought retaining water in the upstream 
reservoir which you would normally do, well you'd easily 
conclude that during a drought, you try to conserve to the 
extent you can. Instead of doing that, we're still pursing an 
antiquated management plan that is almost unbelievable.
    You may say that's the fault of Congress. We've got some 
work to do and I tell you what, I'm determined to make a change 
there. But I also think that the Corps of Engineers should have 
long ago decided that you shouldn't have to get down to 31,000 
million acre feet before you take the kind of measures you 
ought to take to retain water in the upper reservoirs. We're at 
34,000 million acre feet now. That should long ago have 
triggered the response that I would have expected from the 
Corps, General Strock.
    General Strock. Sir, if I might point out, what triggered 
the revision of the Master Manual was the drought of the 1980's 
and at that time, the trigger for navigation preclude was 20 
million acre feet. So this revised Master Manual raises that by 
10 million acre feet and I think we've tried to accommodate the 
best we can. And sir, it is not about navigation versus 
recreation. We're also under a mandate to abide by a biological 
opinion of the Fish and Wildlife Service that found our 
operations to be jeopardizing several threatened and endangered 
species. We have hydropower to consider, sir. All the mission 
areas of the Corps are involved in the Missouri River and it is 
one of the largest challenges I've ever dealt with and I've 
personally dealt with its challenges, you know, sir. We tried 
to do the best we could to strike the right balance between all 
the competing problems. The basic challenge for us is that we 
are in a drought and we're in the business of distributing 
shortages so no one is happy right now.
    Senator Dorgan. The fact is, the President went to Missouri 
during a campaign and said, I'm with you. With respect to the 
Missouri River system, the reason we've not made the changes 
that we should make is because there was a heavy dose of 
politics involved in it. Now you run the Corps. I know you're 
not involved in politics. I'm not alleging that but the fact 
is, the way that Missouri River system has been managed has 
been much to the detriment of the upstream States. I believe 
that the change that was made, was made because of substantial 
pressure over a long period of time and it took 12\1/2\ years, 
even then, 12\1/2\ years to revise the Master Manual and even 
that revision didn't get what I thought was a fair result for 
the upstream States.
    General Strock. Yes, sir.
    Senator Dorgan. General Strock, I didn't mean to make your 
last day here an unpleasant one.
    General Strock. Sir, it was not at all unpleasant.
    Senator Dorgan. But I want to be honest about our feeling 
about things. I hope that I conveyed to you, you've got men and 
women in the Bureau and the Corps that we admire. I want to 
work with your agencies. I want this committee to provide the 
kind of funding that is necessary to address these serious 
issues.

                     ADDITIONAL PREPARED STATEMENT

    The subcommittee has received a statement from Reed R. 
Murray, Program Director, Central Utah Project Completion Act 
Office, Department of the Interior which will be included for 
the record.
    [The statement follows:]

 Prepared Statement of Reed R. Murray, Program Director, Central Utah 
       Project Completion Act Office, Department of the Interior

    My name is Reed Murray. I serve as the Program Director of the 
Central Utah Project Completion Act Office under the Assistant 
Secretary--Water and Science in the Department of the Interior. I am 
pleased to provide the following information about the President's 
fiscal year 2008 budget for implementation of the Central Utah Project 
Completion Act.
    The Central Utah Project Completion Act, titles II-VI of Public Law 
102-575, provides for completion of the Central Utah Project (CUP) by 
the Central Utah Water Conservancy District. The act also authorizes 
funding for fish, wildlife, and recreation mitigation and conservation; 
establishes an account in the Treasury for deposit of these funds and 
other contributions; establishes the Utah Reclamation Mitigation and 
Conservation Commission to coordinate mitigation and conservation 
activities; and provides for the Ute Indian Rights Settlement.
    The act provides that the Secretary may not delegate his 
responsibilities under the act to the Bureau of Reclamation. As a 
result, the Department has established an office in Provo, Utah, with a 
program director to provide oversight, review and liaison with the 
District, the Mitigation Commission, and the Ute Indian Tribe, and to 
assist in administering the responsibilities of the Secretary under the 
act.
    The 2008 request for the Central Utah Project Completion Account 
provides $43 million for use by the District, the Mitigation 
Commission, and the Department to implement titles II-IV of the act, 
which is $8.9 million more than 2007. This funding level, if maintained 
in the out years, will allow the project to be completed by the 
scheduled date of 2021.
    The request for the District includes $39.6 million to fund the 
designs, specifications, land acquisition, and construction of the Utah 
Lake System ($23.6 million); to continue construction on the Uinta 
Basin Replacement Project ($9.5 million); to implement water 
conservation measures ($5 million); and to implement groundwater 
conjunctive use projects ($1.5 million).
    The request includes $976,000 for the Mitigation Commission to 
implement the fish, wildlife, and recreation mitigation and 
conservation projects authorized in title III ($715,000) and to 
complete mitigation measures committed to in pre-1992 Bureau of 
Reclamation planning documents ($261,000).
    Finally, the request includes $2.4 million for the Program Office 
for operation and maintenance costs associated with instream flows and 
fish hatchery facilities ($789,000) and for program administration 
($1.6 million).
    In conclusion, we appreciate the opportunity to testify before the 
committee and would be happy to respond to any questions.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Dorgan. Additional questions will be submitted for 
the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Departments for response subsequent to 
the hearing:]

             Questions Submitted to John Paul Woodley, Jr.
             Questions Submitted by Senator Byron L. Dorgan

                 THREE AFFILIATED TRIBES LAND TRANSFER

    Question. Secretary Woodley, can you update us on the transfer of 
lands at Lake Sakakawea to the Three Affiliated Tribes?
    Answer. The Corps of Engineers continues to research and develop 
responses to comments that were received on the draft Effects Report, 
released in June 2006. All responses will be integrated into the final 
Effects Report.
    Question. What are the remaining steps?
    Answer. The Corps is following a three step process. Phase I is 
called Determination of Authority and will determine if the Corps has 
been given the authority to declare lands no longer needed for 
construction, maintenance, and operation as lands to be held in trust 
for the benefit of the Three Affiliated Tribes. Phase II is called 
Development and will be where criteria, restrictions, land 
determination, and agreements will be discussed and determined. Phase 
III, called Implementation, will be where the decisions made in Phase 
II will be implemented.
    Question. Is there any time schedule for completing the transfer?
    Answer. If and when a decision is made to transfer the proposed 
24,000 acres it will take approximately 12 to 18 months to complete 
real estate transfer packages.

                      ESA COMPLIANCE ISSUES IN O&M

    Question. For fiscal year 2008, your budget has again proposed that 
environmental compliance activities on the Columbia/Snake and Missouri 
River systems be funded as a part for the individual projects that make 
up the system in O&M rather than in the construction account which is 
the tradition.
    Secretary Woodley, What is the rational for this change? How does 
this make your budget more transparent? Wouldn't you agree that 
including these items in the O&M projects and then aggregating the O&M 
projects into a region, actually makes the budget more opaque?
    Answer. We have made this change to improve accountability and 
oversight in their appropriate business line categories, reflect the 
full cost of operating and maintaining the existing projects, and 
support an integrated investment strategy for work at operating 
projects. These are activities, in most part, that are conducted to 
comply with the Endangered Species Act at operating projects. In 
addition, their costs are allocated among project purposes rather than 
to Aquatic Ecosystem Restoration. This explains much of the shift in 
costs among business programs. The full list and specific reasons are 
as follows:
    Endangered Species Act Biological Opinion compliance at operating 
projects.--These projects are Columbia River Fish Mitigation, Chief 
Joseph Dam modifications, Howard Hanson Dam modifications, Willamette 
River Temperature Control, and Missouri River Fish and Wildlife 
Recovery.
    Renourishment to restore sand lost to shorelines from Federal 
navigation operation and maintenance.--This includes the specifically 
authorized Assateague, Maryland, Lower Cape May Meadows, New Jersey, 
and about eight projects for storm damage reduction. This also includes 
the section 111 (Mitigation of Shore Damages) CAP program. The funds 
for this work would be derived from the Harbor Maintenance Trust Fund.
    Disposal of material from maintenance dredging.--This includes the 
program for Dredged Material Disposal Facilities at operating projects, 
plus the Indiana Harbor disposal facility project. Funds for dredged 
material disposal facilities will be derived from the Harbor 
Maintenance Trust Fund.
    Rehabilitation Projects.--These are projects that maintain and 
restore levels of service, but for which the extent of the work is not 
large enough to constitute a capital replacement. For fiscal year 2008, 
the ongoing work at Locks and Dams 11, 19, and 24 migrates to the O&M 
account. Previously unfunded rehabilitation projects at Locks and Dam 
27 and Markland Locks and Dam will be initiated in O&M.
    Beneficial use of material from maintenance dredging.--For fiscal 
year 2008, this includes Poplar Island, Maryland. In the future, 
Houston-Galveston and Hamilton Wetlands island projects will migrate; 
section 204 (Beneficial Uses of Dredged Material) and section 145 
(Placement of Dredged Material on Shores) CAP Programs.
    While the placement of funds for these activities have shifted from 
Construction to O&M the accountability for their performance continues 
to be monitored on a specific item by item basis through the Project 
Management review process at their respective Districts. The ESA 
compliance activities in particular are done to meet very specific 
milestones and targets for habitat and species improvements as required 
in BiOp and the law and therefore these specific items must be followed 
closely or risk failing their checkpoints, regardless in what account 
they are funded.
    Question. What assurance do we have that ESA compliance activity 
funds provided on these O&M projects won't be siphoned off to fund 
other maintenance needs at the individual projects?
    Answer. The amount proposed in the President's budget is adequate 
to do both ESA and O&M activities. The O&M program has strict rules and 
regulations regarding the movement of funds. In addition, any funding 
reductions would lead to a reprioritization of the ESA and O&M regional 
needs.

                      MAJOR REHABILITATIONS IN O&M

    Question. Your budget has proposed moving major rehabilitation 
projects from CG to O&M. As I understand the major rehab projects 
generally consist of work on aging locks, or power plants where the 
result may be a project that is operationally improved from its pre-
rehab state. Major rehabs do not include constructing additional lock 
chambers or other major work or simple maintenance.
    History has obviously been ignored in this decision. Note that many 
years ago, major rehabilitations were funded in O&M. Work, at that 
time, included no operational improvements, just rehabbing the 
structure as it existed. It was funded with 100 percent O&M funding.
    However, due to O&M funding shortages, major rehabs were becoming 
backlogged. In an effort to resolve this situation, Congress and the 
administration agreed that major rehabs could be undertaken to not only 
modernize facilities such as locks, but to provide operational 
improvements as well.
    To help fund navigation rehabs, the administration and Congress 
agreed that these major rehabs would be funded in the Construction 
Account, and that half the costs would come from the Inland Waterways 
Trust Fund. The caveat in this agreement was that these would be 
considered new investment decisions for the country, and would 
therefore be considered new construction starts, having to compete with 
other new starts in the budget. This in not an unreasonable position, 
considering the rehabbed project would be operationally better than 
what was originally constructed.
    Now we have come full circle, there is a backlog of major rehabs. 
Your budget proposal recommends moving these projects back to O&M.
    Secretary Woodley, what is the basis for this recommendation? Why 
is O&M a better choice than CG?
    Answer. The administration is proposing that rehabilitations be 
funded out of the Operation & Maintenance, General appropriation when 
the rehabilitations are limited to work that will repair and restore 
the capability of a project and will not change the authorized project 
purpose or operational capability. Since this work is more closely 
aligned with the existing project authorizations, and the magnitude of 
the work is less than that of a replacement, the work was moved to the 
O&M appropriation. Rehabilitations that will result in replacements of 
locks or improved operational capability will continue to be funded out 
of the Construction appropriation due to the larger magnitude of the 
work and change in project outputs.
    Another issue that accompanies this for navigation major rehabs is 
funding. The administration also proposes that the Corps be allowed to 
use funds from the Inland Waterways Trust Fund (IWTF) in the O&M 
account. Currently, the IWTF can only be used in the Construction 
Account. The IWTF was established to pay half the cost of construction 
projects in the Construction Account. Access to the IWTF is needed in 
O&M for rehab projects to continue to cost share these projects.
    Question. Secretary Woodley, the budget proposal indicates that the 
administration is concerned that the IWTF may go bankrupt within a few 
years. How does this proposal improve the situation?
    Answer. Section 1405 of the Water Resources Development Act of 1986 
makes amounts in the Inland Waterways Trust Fund available for 
construction and rehabilitation expenditures for navigation projects on 
the inland and coastal waterways of the United States. The Corps is not 
proposing to use the IWTF to fund routine operations and maintenance 
activities. Changing rehabilitations from one appropriation to another 
(Construction or Operations & Maintenance) would not impact the balance 
within the IWTF. The amount withdrawn from the IWTF would be the same 
regardless of what appropriation is used since rehabilitations are 
eligible for cost sharing from the IWTF whether they are funded from 
the Construction or the O&M appropriations so the proposal is neutral 
in that regard.
    Question. Secretary Woodley, the administration has committed to 
proposing legislation to replace the IWTF diesel tax with a user fee 
later this year. How will this fee be assessed as well as collected? 
Will there be tollbooths on the inland waterways? Are you going to 
propose the IWTF to be taken off budget?
    Answer. The administration is finalizing the details of its 
proposal for a new lock user fee and expects to submit its proposal to 
the Congress in 2008. The Department of the Treasury will be 
responsible for promulgating regulations for the assessment and 
collection of the user fee.

                         REGIONAL O&M BUDGETING

    Question. Secretary Woodley, could you explain this concept of 
Regional O&M budgeting to me? It appears to me that you assigned region 
numbers to projects and then added the projects together to establish 
the region amount.
    Secretary Woodley, how does aggregating projects in that manner 
improve O&M budgeting?
    Answer. Aggregating Operation & Maintenance, General appropriation 
(O&M) funding by regions or systems adheres to the principles of 
managing by watersheds or basins. It will allow O&M needs to be 
assessed within the regional goals and the resource within a particular 
region to then be directed to the most critical needs, including those 
that arise outside the normal budgeting and appropriation cycle. It 
could also allow more flexibility to address critical needs.
    Question. Secretary Woodley, wouldn't you agree that regional 
budgeting tends to make you lose sight of the unique individual project 
issues that a project by project budget makes you examine?
    Answer. I would respectfully disagree. Although the O&M 
requirements are developed and then presented on a regional basis, the 
basic O&M requirements, start at the individual project level as viewed 
within the control of the required goals and objectives. Thus each 
project's unique characteristics are the foundation of the budget 
development and so considered within the larger parameters of the 
region or system.
    Question. Secretary Woodley, why not propose a single river basin 
as a demonstration and then develop the fiscal year 2009 budget from 
its inception for this basin as a system?
    Answer. We are considering that in the development of the fiscal 
year 2009 budget. We are thinking about organizing the O&M program by 
``systems'' that better matches our watershed management principles, 
operational objectives and performance goals with the budget. We are 
also considering developing an infrastructure management plan for each 
system as well that will establish a 5 year plan for that system into 
the future.
    Question. Secretary Woodley wouldn't funding O&M by regions as 
proposed, limit your flexibility rather than enhance it? As it 
currently stands you have reprogramming authority for each line item at 
50 percent of the appropriated amount or $2 million, whichever is less. 
Under the proposed reprogramming guidance that changes to a flat $3 
million for everything but studies. That appears to limit you to $3 
million per region were we to appropriate by region. What are your 
thoughts on this?
    Answer. Budgeting by regions as the administration prepares, would 
allow more flexibility to address needs. Within a region or system, the 
overall funding can be better allocated to individual projects based on 
current needs, once O&M funds are appropriated. A better match of 
current critical needs to current funding within the region or system 
can be made during allocations. It would reduce reprogramming actions.

           CONTINUING CONTRACTS, CARRYOVER AND REPROGRAMMING

    Question. Secretary Woodley, the administration has proposed 
revisions to current Corps construction contracting authorities. Will 
you explain the contracting language that your budget proposes?
    Answer. In section 103 of the General Provisions of the Budget 
Appendix, the administration proposes amending section 2306c of title 
10, U.S.C. by replacing continuing contracts with multiyear contract 
authority. The proposal also requires authorization for contracts over 
$100 million and notification for contracts with contingent liability 
over $20 million. The advantages to this approach are that the Congress 
through its oversight, and the agency, through its more intensive 
management of such large contracts, would have greater control over 
expenditures. The multiyear contract authority expands an existing 
multiyear funding authority codified in title 10, United States Code 
and available within the Department of Defense. It also applies to the 
National Aeronautics and Space Administration and the Coast Guard.
    The proposed legislation would repeal the Corps existing continuing 
contract authority, effective October 1, 2008. It also would amend an 
existing title 10 authority for multi-year services contracting to 
include multi-year civil works contracting. Under this amended 
provision, the head of an agency may enter into contracts for 
``services associated with the Civil Works program'' and obligate only 
the amount needed each year plus the amount of expected termination 
costs. The Corps would need specific statutory authority to use the 
multi-year contract authority for any contract over $100 million. 
Furthermore, the Corps would need to notify the specified committees at 
least 30 days prior to awarding any contract with a contingent 
liability (i.e., expected termination cost) exceeding $20 million.
    The Secretary of the Army must also ensure that the Corps limits 
the duration of each multi-year contract to the term needed to achieve 
a substantial reduction of costs on the margin. By law, multiyear 
contracts under this authority are limited to 5 years, but, the 
Secretary of the Army may approve a contract period of greater than 5 
years if he determines that a period of longer than 5 years is 
necessary to achieve the substantial cost reduction and if he notifies 
specified congressional committees at least 30 days prior to contract 
award.
    Question. Secretary Woodley, How much funding did the Corps 
carryover from fiscal year 2006 due to the limitations imposed by 
Congress in the fiscal year 2006 E&W Bill? I am not addressing 
emergency funds, only those provided in regular appropriations bills.
    Answer. The Corps carried over a total of $2,445 million, not 
including Emergency Supplemental funds, from fiscal year 2006 in the 
four accounts most sensitive to the limitations, i.e. Investigations, 
Construction, Operation and Maintenance and Flood Control, Mississippi 
River and Tributaries. Of this amount $1,006 million was obligated and 
$1,439 million was unobligated. This compares with a total carryover 
averaging $550 million over the previous 10 years and with $798 from 
fiscal year 2005 into fiscal year 2006.
    Question. In your view, how much of that was due to reprogramming 
restrictions and how much too contracting restrictions? No matter how 
you divide it, that is a lot of money. You are basically saying that 
you were unable to execute nearly 25 percent of your program in fiscal 
year 2006 due to legislative restrictions. Will this new language 
improve project execution so that we won't see a repeat of that large 
of a carryover into fiscal year 2009? How?
    Answer. By virtue of the significant increase in carryover compared 
to other years, the legislative restrictions were a major factor in 
underutilization of available funds in fiscal year 2006; however, our 
records are not sufficiently detailed to quantify exactly how much is 
attributable to the new rules versus other factors. The new language 
proposed by the administration, if enacted, is expected to allow more 
realistic scheduling with multi-year contracts as well as provide more 
flexibility in management of available funds while addressing 
congressional priorities. Much carryover is a function of funds being 
in the wrong place plus a need for more careful scheduling and an 
emphasis on meeting commitments. In addition to the new reprogramming 
and contracting language proposed by the administration, the Corps has 
aggressively taken positive steps to write up-to-date guidance and 
provide increased training for program development, defense and 
execution. Furthermore, a command emphasis has been placed on meeting 
commitments, that is, carrying out the schedules upon which the 
provided funds are based.
    Question. Secretary Woodley, Do you believe that the reprogramming 
language proposed in your budget will improve the ability of the Corps 
to utilize scarce funds? If so, how?
    Answer. Once funds are appropriated; there are physical variables 
that are unknown until a program, project or activity (PPA) is 
underway. The O&M program, in particular, is subject to weather-related 
emergencies, major accidents and structural failures that require 
immediate action without administrative delays to obtain committee 
concurrence. The reprogramming language proposed as sections 101a(4) 
and (5) under General Provisions in the Budget Appendix provide more 
flexibility to address these unknowns by raising the thresholds from $2 
million to $3 million. Section 101a(6) recognizes the urgency of taking 
action to respond to a flood, hurricane, or other natural disaster.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein

    Question. The Office of Management and Budget's fiscal year 2008 
cross-cut budget for the California Bay-Delta Restoration Program 
(CalFed) shows a total of $32.6 million in Army Corps of Engineers 
CalFed-related spending. This is a significant decrease from $76.6 
million in the fiscal year 2007 budget and $80.7 million in fiscal year 
2006 obligated funding. This represents a 60 percent decline in Corps 
CalFed-related spending in just 2 years. Why has the Corps CalFed-
related spending declined so sharply?
    Answer. The main reason for the sharp decline in the CalFed-related 
budget in fiscal year 2008 is mainly due to the major decrease in the 
Santa Ana River portion of this funding. Previous year budgets for the 
Santa Ana River project ranged from $22 to $57 million; in fiscal year 
2008 this has dropped to $7.5 million. This decrease was mainly due to 
the development of new budget criteria which limited the types of work 
that we could actually include in the budget. Another contributing 
factor to this decline were the new rules on the Continuing Authority 
Program including the moratorium on signing agreements, and limits set 
by Congress on starting new phases or starting anything not named.
    Question. The 2004 CalFed authorization (Public Law 108-361) 
authorized $90 million for the Corps to improve the stability of the 
highly vulnerable levees in the Sacramento-San Joaquin Delta. In its 
May 2006 Report to Congress on the CalFed Levee Stability Program, the 
Corps described a so-called ``Strategy for Action'' that proposed $18 
million for levee stability funding and several million more in 
additional feasibility studies for fiscal year 2008.
    Nevertheless; despite this major, bipartisan authorization by 
Congress, and detailed proposals from the Corps on funding, the 
President's budget proposes no funding for Delta levee stability 
projects. Why is there no funding proposed in fiscal year 2008 for this 
major priority?
    Answer. Senator, there was a 180 day report that was prepared but 
contained no specific project details. The report laid out a strategy 
but was not a decision document per se nor contained specifics about 
projects to construct. Without any specific details or an 
administration approved report, the project did not fit into any of the 
construction guidelines that the administration used in prioritizing 
projects for this years budget.
    Question. Isn't there a similarity here to the Army Corps of 
Engineers' failure to heed warnings of a potential flood control 
disaster in New Orleans, given the widespread recognition of the high 
risk for levee failure that would cut off the drinking water supply for 
over 20 million people?
    Answer. In evaluating this as well as other projects within the 
universe of those eligible for inclusion in the budget, the guidelines 
allow for strong consideration of significant impacts to people in 
terms of risk to life. The Corps conducts a full screening of the 
factors involved in this metric such as the velocity and depth of 
potential flows during a flood event, the warning times for escape, the 
population at risk within the floodplain. This project did not fit into 
that guideline category, either for inclusion in the budget.
    Question. The Napa River Flood Protection project is a 100-year 
flood protection project coupled with recreation and the restoration of 
over 730 acres of San Francisco Bay estuary. The Corps recently 
analyzed these wetlands and rated them at the highest possible level of 
ecosystem restoration under Corps guidance.
    Upper Newport Bay is one of the last remaining coastal wetlands in 
Southern California. The Upper Newport Bay Ecosystem Restoration 
project undertaken by the Corps increases the quality of wetlands 
habitat, which supports federally endangered species, and improves 
water quality.
    While multipurpose projects such as these are encouraged in the 
Corps planning process, there is no budget guidance that recognizes the 
array of project benefits for such projects. Would you consider 
changing the budgeting process to recognize a project's full array of 
benefits?
    Answer. Evaluating multi-output projects continues to be a 
challenge and the Corps is advancing the evaluation process for such 
projects. In particular, they are refining the Environmental benefits 
evaluation process to incorporate the many facets of environmental 
project outputs and then combining them with other project outputs to 
make a comprehensive analysis for the budget prioritization process.

           SACRAMENTO RIVER, GLENN-COLUSA IRRIGATION DISTRICT

    Question. Funds are needed in fiscal year 2007 to make progress on 
addressing two outstanding obligations associated with the Sacramento 
River, Glenn-Colusa Irrigation District, Gradient Facility project: an 
outstanding obligation associated with a revegetation/mitigation 
contract of approximately $115,000 and settling a dispute with 
neighboring Butte County over damages incurred to Butte County roads 
during the construction process, an obligation that could exceed 
$300,000. While no funds were appropriated for this project 
specifically in fiscal year 2006, this is an on-going project and these 
two project obligations were incurred prior to fiscal year 2006. 
Therefore, funding these two pre-existing project obligations 
represents an eligible use of fiscal year 2007 funds. Do you agree, 
and, if not, why not?
    Is it your intent to address both of these pre-existing obligations 
using funds provided to the Corps of Engineers in fiscal year 2007?
    Answer. The fiscal year 2007 work plan guidelines prevented us from 
providing fiscal year 2007 funds to GCID. We were able to reprogram 
carried over fiscal year 2006 funding from Hamilton Wetlands to GCID to 
make the outstanding contract payment. Regarding the dispute/claim, a 
hearing was held in front of the Armed Services Board of Contract 
Appeals in February 2007, and we are still awaiting their decision.
                                 ______
                                 
            Questions Submitted by Senator Mary L. Landrieu

                       BACKLOG OF AUTHORIZED WORK

    Question. The Corps has a backlog of authorized projects that are 
slowly being constructed or have not even started with construction. 
Currently, this backlog is $40 billion to $45 billion. Additionally, 
the next WRDA bill will likely authorize another $12 billion of 
projects. Therefore, a conservative estimate of the backlog after the 
WRDA bill will be at least $50 billion. The administration has 
requested about $1.5 billion for construction in fiscal year 2008.
    Based on your current budget request and your 5 year plan, how long 
will it take for us to catch up on the backlog?
    Answer. The administration is proposing to reduce the backlog by 
the amount in the budget, which is a little over $1.6 billion. Our 
five-year development plan indicates that, under either of the two 
scenarios, the funding requirements for projects in the fiscal year 
2008 budget will tail off over time, and hundreds of millions of 
dollars will become available through fiscal year 2011 to finance 
additional work. Likewise, the requirements of projects in the fiscal 
year 2008 budget for studies and Preconstruction Engineering and Design 
tail off, leaving tens of millions of dollars for additional planning 
and design work to prepare projects for construction.

              DECLINING INVESTMENT AS A PERCENTAGE OF GDP

    Question. As a percentage of GDP, our current investment in civil 
works is less than one-tenth of what it was in the mid 1930s and less 
than one-sixth of what it was in the early 1960s.
    This budget puts our Nation at risk. What is your plan for dealing 
with this gross under-investment in civil works?
    Answer. The budget reflects the appropriate level of investment for 
the Corps Civil Works program. It focuses resources on completing 
ongoing projects and maintaining our existing investments. The 
discretionary part of the budget is under extreme pressure due to the 
many other competing investment needs. The administration believes it 
must reduce the backlog of ongoing construction projects before we can 
provide for additional studies. With the funding that is available, we 
attempt to fund the highest performing projects. Overall, my vision 
plan is reflected in the Civil Works Strategic Plan, dated March 2004 
with the goals being:
  --Provide sustainable development and integrated management of the 
        Nation's water resources.
  --Repair past environmental degradation and prevent future 
        environmental losses.
  --Ensure that operating projects perform to meet authorized purposes 
        and evolving conditions.
  --Reduce vulnerabilities and losses to the Nation and the Army from 
        natural and man-made disasters, including terrorism.
  --Be a world-class public engineering organization.
    The 5-Year Development Plan supports the Strategic Plan by 
continuing our focus during fiscal year 2008-2012 on the ongoing 
construction projects and activities that provide the highest net 
economic and environmental returns on the Nation's investment, as well 
as on the most productive operation, maintenance, and repair 
activities, and on activities in the FUSRAP program, the Regulatory 
Program, and Emergency Management that contribute to performance goals.

                              BEACH POLICY

    Question. Storm damage reduction projects along our coasts provide 
tremendous benefits to our national economy. Beaches are the leading 
tourist destination in the United States. California beaches alone 
receive nearly 600 million tourist visits annually. This is more 
tourist visits than to all of the lands controlled by the National Park 
Service and the Bureau of Land Management combined. Beach tourists 
contribute $260 billion to the U.S. economy and $60 billion in Federal 
taxes. People from over 400 congressional districts throughout the 
United States own property in the Bogue Banks Area of North Carolina. 
Similar ownership is true in other coastal communities demonstrating 
the national implications of these projects.
    Also, these projects are justified on the basis that they provide 
storm damage reduction benefits. As these are National Economic 
Development benefits within one of your prime mission areas of flood 
control it puzzles me as to why both yours and prior administrations 
refuse to budget for these projects. As more and more of our population 
migrate towards the coasts, it will become imperative to provide 
protection to these areas. The only other option is to continue paying 
disaster payments when these communities are impacted.
    Secretary Woodley, with this major impact on our national economy, 
what is the administration's justification for the proposed change in 
beach policy? A change, I would note, that Congress has consistently 
rejected.
    What would you recommend to make these projects more competitive in 
the budget process?
    Answer. The administration's budget policy is to put beach 
nourishment projects on the same footing as other projects, in that the 
Federal Government would participate financially in initial 
construction but non-Federal interests would be responsible for follow-
on costs, in this case renourishment costs, except where a Federal 
navigation project has caused the erosion. This policy is a component 
of the administration's overall efforts to direct Civil Works funds to 
the most productive uses.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici

               FUNDING FOR THE INLAND WATERWAY TRUST FUND

    Question. Secretary Woodley, the budget proposal indicates that the 
administration is concerned that the Inland Waterway Trust Fund may go 
bankrupt within a few years. As a solution, the administration has 
committed to proposing legislation to replace the existing diesel tax 
with a user fee later this year.
    How will this fee be assessed as well as collected and will this 
change the way the funds are allocated in the future?
    Answer. The details of the nature of the user fee, and how it will 
be assessed, collected, and allocated have not been developed. The 
details of the proposal will be developed over the next several months 
through a process that will include consultation with other interested 
Federal agencies, the users of the system, and other stakeholders.
    Question. Will this proposal seeks to take the waterway trust fund 
off budget?
    Answer. The decision on whether to recommend taking the waterway 
trust fund off budget has not been made. That issue will be considered 
as the details of the proposal are developed.

                       MIDDLE RIO GRANDE PROJECTS

    Question. Secretary Woodley, since you have held this position, I 
have been working on four critical projects along the Rio Grande 
corridor that include the following four elements.
  --Bosque Restoration Project.--This project would provide a workable 
        open space for the city of Albuquerque and river habitat 
        restoration.
  --Middle Rio Grande Flood Protection.--The Corps is currently 
        evaluating the levees to determine if they have reached their 
        design lifetime and to provide assistance in rehabilitation of 
        levees where necessary.
  --Bosque Wildfire Rehabilitation.--This element provides recovery 
        from a damaging series of fires between Bernalillo and Belen 
        that pose a grave threat to human health, and to construct 
        access points to the river for fire fighting.
  --Middle Rio Grande Endangered Species Collaborative Program.--A 
        partnership with the Bureau of Reclamation to manage water 
        flows on the Rio Grande and provide endangered species 
        protection and recovery.
    Unfortunately the President's fiscal year 2008 budget proposal only 
provides $311,000 for only one of the four elements. The fiscal year 
2006 budget provided $5,847,000 to support the management of all four 
elements.
    Please explain how the Corps plans to meet all four critical 
obligations with the funding proposed in the fiscal year 2008 budget?
    Answer. Sir, funds to complete the feasibility study for the Bosque 
Restoration Project are in the President's budget for fiscal year 2008. 
No funds are in the 2008 budget for the Middle Rio Grande Flood 
Protection Project or the Bosque Wildfire Rehabilitation Project. Work 
will stop on those projects once fiscal year 2007 funds have been 
expended. Funds for the Middle Rio Grande Endangered Species 
Collaborative Program are provided through the Bureau of Reclamation's 
appropriation.
    Question. Although the Corps has proposed a systems management 
approach to managing major O&M responsibilities, why can't the Corps 
seem to integrate these activities along middle Rio Grande?
    Answer. Sir, the Corps of Engineers is moving towards a systems/
watershed approach for preparing our annual budget request and planning 
and executing work. But, the budget supports only that work that is 
high-performing and contributes to the Corps main water resources 
development missions, namely commercial navigation, flood and coastal 
storm damage reduction, and aquatic ecosystem restoration.
    Question. Additionally, what role can the Corps undertake in 
reformulating the current Biological Assessment for the Rio Grande to 
bring the management of the river back to a more balanced condition?
    Answer. Sir, I believe that the Corps of Engineers, with its 
expertise in flood control, ecosystem restoration, and water resources 
planning can greatly contribute to reformulating the Biological 
Assessment. How the Biological Opinion is reformulated will impact 
virtually all of the Corps studies, designs, and projects on the Rio 
Grande. The Bureau of Reclamation is currently the lead agency for the 
Middle Rio Grande Endangered Species Act Collaborative Program. The 
Corps is actively participating in efforts to reformulate the 
Biological Assessment and is providing technical and management 
support. Funding for these activities performed by the Corps is 
provided by the Bureau of Reclamation.

                       ACEQUIAS IRRIGATION SYSTEM

    Question. Secretary Woodley, the Acequias Irrigation System Program 
was established to help small irrigation districts with historic 
significance to maintain their irrigation facilities. This program also 
helps mitigate downstream flooding. The Corps has resolved several 
significant operational issues with the State of New Mexico over the 
last 5 years. However the President's fiscal year 2008 budget proposal 
does not include any funding for this critical program.
    Please explain how the Corps of Engineers will continue to support 
these historic irrigation systems without financial resources?
    Answer. Sir, the Corps would not be able to support these historic 
irrigation systems without financial resources. The project was a low 
priority for funding under the fiscal year 2008 budget construction 
guidelines. Any additional reconnaissance studies the local sponsor has 
identified for future rehabilitation may similarly not be a funding 
priority.

                     CONTINUING AUTHORITIES BUDGET

    Question. The Corps of Engineers has several continuing authority 
programs. These programs provide the flexibility needed to address 
relatively small projects throughout the country. I was unsettled to 
see that the Presidents fiscal year 2008 budget proposal decreased the 
funding over the 2006 enacted levels by more than 65 percent.
    Is the President's budget proposal an attempt to eliminate these 
programs?
    Answer. No Senator, the administration does not intend to eliminate 
these continuing program authorities. The fiscal year 2008 budget 
proposes to use available funding to continue ongoing phases for the 
highest performing projects.
    Question. Does the Corps believe that the flexibility provided by 
these continuing authorities is no longer necessary or important to the 
Nation?
    Answer. No, we value these programs as they have the potential to 
solve many of our domestic infrastructure and environmental needs. The 
projects can be implemented in a short period of time and at little 
cost to address water resources problems.
    Question. How can the Corps attempt to meet the anticipated needs 
of the projects within these programs with the proposed budget?
    Answer. The projects in the continuing authority's universe 
competed for funding using objective metrics that were very similar to 
those used for specifically authorized projects. The highest performing 
projects were funded for the phase continuing from the fiscal year 2007 
budget.
                                 ______
                                 
          Questions Submitted by Senator Kay Bailey Hutchison

                     HARBOR MAINTENANCE TRUST FUND

    Question. My State of Texas has some of the Nation's largest ports 
and they pay a significant portion of the funds that go into Harbor 
Maintenance Fund. However, I continue to hear from my ports that the 
fund is idle. Can you tell me the status of the Harbor Maintenance 
Fund?
    Answer. The Harbor Maintenance Trust Fund (HMTF) was established by 
the Water Resources Development Act (WRDA) of 1986. The WRDA of 1986 
provides for a Harbor Maintenance Tax (HMT) to be collected on the 
value of cargo imported, moved into a foreign trade zone or moved 
domestically. The HMT is also assessed on the value of passenger 
tickets. HMT revenues are collected by the Bureau of Customs and Border 
Protection and deposited into the U.S. Treasury. The Department of the 
Treasury maintains accountability for the fund and transfers money out 
of the fund to reimburse authorized expenditures. The U.S. Army Corps 
of Engineers (USACE) does not receive direct appropriations from the 
HMTF and therefore USACE expenditures for navigation projects are 
limited to Congressional appropriations.
    Question. How much does the fund contain today?
    Answer. The estimated balance in the HMTF, after anticipated 
transfers to the U.S. Treasury for fiscal year 2007 expenditures by 
USACE and other agencies, is approximately $4 billion.
    Question. What are the requirements for using funds in the Harbor 
Maintenance Fund?
    Answer. The HMT is used to recover 100 percent of the USACE 
eligible operations and maintenance (O&M) expenditures for commercial 
navigation, along with 100 percent of the O&M cost of the St. Lawrence 
Seaway by the St. Lawrence Seaway Development Corporation. Section 201 
of WRDA 96 authorizes the recovery of Federal expenditures for 
construction of confined disposal facilities required for operation and 
maintenance of any harbor or inland harbor; dredging and disposal of 
contaminated sediments that are in or that affect the maintenance of 
Federal navigation channels; mitigation of operation and maintenance 
impacts, and operation and maintenance of dredged material disposal 
facilities. During the 103rd Congress, legislation was enacted which 
allows the Department of the Treasury, the USACE, and the Department of 
Commerce to share a maximum total of $5 million per year for expenses 
incurred in the administration of the HMT.
    Question. How do you prioritize projects for funding?
    Answer. There continues to be keen competition for limited 
Congressional appropriations to perform USACE's navigation mission. 
USACE therefore prioritizes navigation projects for inclusion in the 
President's budget in order to reduce the risk of failure and increase 
the reliability of our projects, and maximize public benefits for the 
investment. Factors such as volume and value of cargo moved, benefits 
of the project, criticality of work to be performed, anticipated 
impacts of not performing the work, legal mandates, safety issues, 
environmental compliance, etc. are used to prioritize projects.
    Question. How much has been paid out of the fund annually over the 
past 5 years?
    Answer. The following table reflects HMT receipts and HMTF 
transfers to the U.S. Treasury, in thousands of dollars, for fiscal 
years 2002 through 2006:

             HMT RECEIPTS AND HMTF TRANSFERS TO THE U.S. TREASURY FOR FISCAL YEARS 2002 THROUGH 2006
                                            [in thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                      Harbor
                   Fiscal Year                      Maintenance        USACE       Other Agency        Total
                                                   Tax Receipts      Transfers       Transfers       Transfers
----------------------------------------------------------------------------------------------------------------
2002............................................           652.9           639.9            16.3           656.2
2003............................................           758.0           568.9            17.0           585.9
2004............................................           869.7           630.9            17.3           648.2
2005............................................         1,047.9           687.2            18.7           706.0
2006............................................         1,206.5           779.0            19.0           798.1
----------------------------------------------------------------------------------------------------------------

    Question. If funds have not been expended out of the fund, why is 
that the case?
    Answer. Annual reimbursements from the HMTF are limited to 
congressional appropriations. Annual HMT revenue has consistently 
exceeded annual expenditures resulting in a growing HMTF balance.
                                 ______
                                 
               Question Submitted by Senator Wayne Allard
    Question. Please share how the Army Corps set its priorities for 
its budget request this year. I am specifically looking for information 
that would lead me to understand why funding for the completion of the 
Fountain Creek Watershed study and funding for the Chatfield 
Reallocation Study were not included?
    Answer. Chatfield was not in the Corps' 2008 budget as it was not 
in the 2007 budget the initial criteria under the guidelines. Funding 
priority is given to studies funded in the previous year.
                                 ______
                                 
         Questions Submitted to Lieutenant General Carl Strock
             Questions Submitted by Senator Byron L. Dorgan
    Question. How will we easily be able to tell how much we are 
investing in these endangered species recovery efforts?
    Answer. To assist us in capturing this information, we will develop 
a new system to closely monitor and track funds expended for recovery 
efforts and will make that information available upon request.
    Question. General Strock, How have the reprogramming restrictions 
imposed by the fiscal year 2006 E&W Act affected your ability to 
effectively and efficiently manage the Civil Works program?
    Answer. The reprogramming and contracting guidance contained in the 
fiscal year 2006 Energy and Water Development Appropriations Act and/or 
subsequent delays in obtaining approvals have adversely impacted 
performance rates so that, in some cases, weather or environmental 
windows were missed, contract options could not be taken advantage of 
and a larger carryover of unobligated or unexpended funds occurred with 
work still not accomplished. On the other hand, these restrictions have 
resulted in greater discipline at all management levels in preparing 
cost estimates, expressing capabilities and applying available funds as 
intended by the Congress.
    Question. General Strock, You are soon to retire so I'll ask you an 
unfair question that I know Secretary Woodley would have to avoid or be 
very careful to answer--as the outgoing Chief, what changes would you 
recommend to Corps contracting and reprogramming guidance in order to 
give your successor the flexibility needed to manage the Civil Works 
program?
    Answer. As mentioned earlier, the reprogramming and contracting 
guidance contained in the Fiscal Year 2006 Energy and Water Development 
Appropriations Act has effectively brought about greater care in 
estimating, expressing capabilities and managing funds on hand; 
however, more flexibility is needed to efficiently utilize available 
funds for the purposes intended by the Congress. I believe the proposed 
contracting and reprogramming language set forth in the President's 
budget, if adopted, provides that flexibility.

                             MISSOURI RIVER

    Question. Gentlemen, it should come as no surprise to you that we 
are suffering through our eighth year of drought in North Dakota. What 
is the situation and outlook for Missouri River runoff this year?
    Answer. Drought continues to persist in the Missouri River Basin. 
Moderate to severe drought exists in much of Montana and Wyoming and 
the western portions of the Dakotas and Nebraska. The remainder of the 
basin is essentially drought free. Current storage in the Missouri 
River Mainstem Reservoir System is 37.3 MAF, 17.5 MAF below normal, but 
2.6 MAF higher than one year ago. The 2007 runoff forecast above Sioux 
City, Iowa is for 21.2 MAF, 84 percent of normal.
    Question. How will this impact operation of the Missouri River?
    Answer. Service to all of the congressionally authorized project 
purposes is reduced due to the ongoing drought, currently in its eighth 
year. The upper three reservoirs are drawn down 24 to 34 feet and 
releases from all projects are much below normal. Due to excellent 
runoff below the reservoir system, releases from Gavins Point were at 
record low levels during March, April and May of 2007, and were well 
below normal the remainder of the year. Power production at the Corps 
hydropower facilities in 2007 is expected to be a record low 5.0 
billion kWh, only half of normal. Lower reservoirs and releases have 
reduced access at many boat ramps and marinas throughout the region, 
and have made access for municipal and industrial water supply more 
difficult. None the less, all municipal water intakes have remained 
operational throughout 2007, and are expected to remain viable in 2008. 
Although the Corps made significant efforts on behalf of fish and 
wildlife during 2007, the drought continues to reduce the benefits of 
those efforts. All three of the upper reservoirs rose significantly 
during the forage fish spawn; however reports from the North Dakota 
Game and Fish Department indicated that the smelt spawn in Garrison was 
poor due to the lack of proper substrate at the current reservoir 
level. Efforts to conserve cold water habitat in Garrison reservoir 
were expanded this year, saving an estimated 800,000 acre-feet of cold 
water in the reservoir. Fledge ratios for both the interior least tern 
and piping plover were below the fledge ratio goals outlined in the 
2003 Biological Opinion, however there were a record number of terns 
present in the region during the nesting season. Spring pulses from 
Gavins Point dam for the benefit of the endangered pallid sturgeon were 
not implemented in 2007 due to the low system storage.
    Question. Do you anticipate a normal navigation season?
    Answer. The 2007 navigation season was shortened 35 days and 
minimum service flow support was provided throughout the shortened 
season. The 2008 navigation season will start on the normal opening 
date of April 1 at the mouth with minimum service flow support. The 
season length will be determined based on the July 1 storage check, but 
is estimated to range from 17 to 60 days based on studies provided in 
the draft Annual Operating Plan.
    Question. How much more should I expect the level of Lake Sakakawea 
to drop under the operations of the Master Manual for fiscal year 2008?
    Answer. If runoff in 2008 is near lower quartile levels, conditions 
at Garrison are expected to be similar to those experienced in 2007. 
With runoff above lower quartile, reservoir levels will improve, 
averaging about 7 feet higher than in 2007 for median runoff 
conditions, to as much as 15 to 20 feet higher with upper decile runoff 
conditions. However, if the drought deepens and runoff declines to 
lower decile conditions, the reservoir could be 5 feet lower in 2008 
than it was in 2007, and could fall below the record low pool of 
1,805.8 feet msl by early 2009.
    Question. How will this continued fall of Lake Sakakawea affect the 
Snake Creek Embankment? Will we have to draw down Lake Audubon further 
than we already have?
    Answer. Lake Audubon is historically maintained by the Bureau of 
Reclamation at a near constant elevation of 1,847.2 feet from spring 
through Labor Day. After Labor Day, the lake level is lowered to 
1,845.0 feet and held constant at this elevation throughout the ice 
fishing season. Lake Audubon reached its annual winter target elevation 
of 1,845.0 feet the first week of November 2007. The recently completed 
draw down was conducted in accordance with normal lake operation and no 
further drawdown is planned at this time.
    The Corps of Engineers implemented a 43 foot maximum water level 
difference between Lake Audubon and Lake Sakakawea in March 2007 based 
on the results of an underseepage evaluation. This restriction will 
remain in effect until additional data is obtained and can be evaluated 
under more severe lake and reservoir fluctuations.
    As of November 6, 2007 Lake Sakakawea was at elevation 1,813.1 feet 
and Lake Audubon was at elevation 1,845.0 feet, resulting in a water 
level difference of 31.9 feet. Current forecasts indicate that Lake 
Sakakawea will continue to slowly recede until the latter part of 
February 2008 and then rise to its peak elevation around mid-summer. 
Under the November 1, 2007 basic and lower basic simulations, Lake 
Sakakawea is projected to recede to 1,809.1 feet and 1,808.0 feet, 
respectively, by the end of February 2008. Utilizing the lower basic 
simulation, the projected maximum water level difference at the end of 
February will be 37.0 feet, which is well below the allowable 43 feet 
maximum difference.
    Question. How will the continued drop in water levels on Lake 
Sakakawea impact various water intakes that draw from the lake as well 
as those that draw from the river?
    Answer. Under all runoff conditions simulated in the 2007-2008 
Annual Operating Plan, all of the water intakes on Garrison reservoir 
remain operational throughout 2008. Releases from Garrison will be 
scheduled at a level sufficient for the intakes below the dam to remain 
operational throughout the year.
    Question. Why have you not proposed at least a token amount of 
funding for drought in your budget, when you know that the west has 
been suffering an extended drought?
    Answer. The Corps has proposed funding for control of noxious weeds 
associated with lower reservoir levels resulting from the drought. The 
Corps also provides significant funding for cultural resources within 
the basin which may be impacted by drought conditions.
    Question. What is your funding capability for drought emergency 
assistance?
    Answer. Emergency assistance due to drought is generally requested 
due to the loss of water meant for human consumption within a 
community. Under Public Law 84-99 the Corps is authorized to provide 
technical assistance to a local community facing an emergency. The 
Corps may also provide temporary emergency water assistance for human 
consumption/usage to a drought distressed area to meet minimum public 
health and welfare requirements. Corps assistance is supplemental to 
State and local efforts. Corps assistance under this authority may 
include transport of water to local water points, distribution of 
bottled water, temporary connection of a new supply to the existing 
distribution system, and installation of temporary filtration. Several 
areas are considered in determining the amount of Federal direct 
assistance; such as economic impact to the community, environmental 
issues, weather impacts, other water sources (wells), long term lake 
level projections, and good engineering judgment.

                              A-76 AND HPO

    Question. In 2001 and 2002, OMB imposed arbitrary numerical 
privatization quotas on agencies. The practice was prohibited by 
Congress in February 2003, unless there was ``considered research and 
sound analysis of past activities (that) is consistent with the stated 
mission of the executive agency.'' In July 2003, OMB repudiated the use 
of government-wide quotas. Nevertheless, the Corps of Engineers (CoE) 
appears to be following the arbitrary quota imposed by OMB in 2002, 
according to CoE documents. Why did the Congressional prohibition and 
the OMB repudiation have no affect on CoE's numerical privatization 
quota? Was there any of the legally required ``considered research and 
sound analysis of past activities (that) is consistent with the stated 
mission of the executive agency'' done in connection with this? How 
many additional Federal employees are CoE obligated to OMB to review 
for privatization under OMB Circular A-76?
    Answer. The Corps is not pursuing any privatization activities.
    Question. CoE's decision to attempt to review the locks and dams 
personnel for privatization generated strong bipartisan, bicameral 
opposition. Even CoE management conceded that at least part of the 
workload performed by locks and dams personnel is inherently 
governmental. Would CoE have begun this OMB Circular A-76 privatization 
review if it had not had a ``commitment'' to OMB to review for 
privatization at least 7,500 jobs? Are there actions that CoE can 
undertake on its own to increase the efficiency of locks and dams 
operations or operations generally? Do CoE managers believe that they 
are obligated to strive to generate efficiencies? If there were no A-76 
quota for CoE to fulfill, could taxpayers and lawmakers on this 
subcommittee count on CoE management to always strive to make the 
agency's operations more efficient?
    Answer. The Corps is not studying the locks and dams personnel for 
A-76 competition. Rather, the Corps has initiated an internal study of 
business processes to improve efficiency and effectiveness of the 
Nation's inland waterway system. Any resulting changes will be 
implemented over a period of 5 years. We do not anticipate any adverse 
impact on the workforce.
    Question. How many months old is the A-76 privatization review of 
information technology and how many employees are involved? According 
to an October 12, 2006, GovExec.com story, ``Information technology 
management at the Army Corps of Engineers is being stressed to the 
breaking point by staff shortages resulting from a stalled public-
private job competition, according to senior Corps officials. I have 
been informed that an early September meeting of senior IT leaders at 
the agency reflected concern that IT services are suffering from 
significant attrition at ``virtually every Corps [information 
management] office,'' according to a summary of the meeting at  distributed by the agency's Chief 
Information Officer, Wilbert Berrios. Some have lost as much as 35 
percent of their workforce since the inception of a competitive 
sourcing process more than 2 years ago. ``We are one missed signal away 
from a train wreck,'' officials warned at the September 6 meeting in 
Jekyll Island, GA., according to the summary, with staffing levels only 
``one person deep in several critical areas.'' Do you agree with that 
account? If not, why not?
    Answer. The Information Management/Information Technology (IM/IT) 
competition resulted in a win by the in-house team (called the Most 
Efficient Organization (MEO)). MEO was issued the formal notice in 
April 2007 and began the transition in May 2007. Currently the MEO are 
recruiting from the existing IM/IT employees and are well underway to 
assume full responsibility for IM/IT service delivery by May 2008. We 
do not foresee any disruption of service during the transition period.
    Question. While not quite as long as the infamous Walter Reed 
privatization review, the CoE information technology A-76 is certainly 
one of the longest reviews since the circular was revised in May 2003, 
is it not? And like Walter Reed, if this GovExec.com count is to be 
believed, the affected workforce has been significantly disrupted. With 
respect to CoE's information technology privatization review, assume 
that the contractor's appeal will not prevail. After taking into 
account the dangerous levels of workforce disruption caused by the 
privatization review, the costs of carrying out the privatization 
review, and the costs of transitioning the workforce into the new 
organization, how much will there be left in unverified, projected 
savings? Please state each component in detail.
    Answer. The court case was settled and, as mentioned above, the MEO 
started the transition in May 2007. Projected savings is about $500 
million over a 6-year period. The savings are based on the MEO's bid 
and derived from the MEO's technical solution using the best business 
processes.
    Question. How many jobs and what sort of jobs will be reviewed 
under the new HPO? I understand that the HPO will involve 3,500 
employees in the locks and dams, maintenance fleets, and district 
offices, as opposed to 2,000 employees in the locks and dams? Will the 
HPO be far more wide-ranging than the A-76 review?
    Answer. Under the HPO initiative, the Corps is studying the 
business processes rather than reviewing jobs. There are approximately 
3,000 positions engaged in the operations and maintenance of navigation 
locks and dams. The Corps does not anticipate any negative impact on 
employees.
    Question. What guidelines are you working under regarding the HPO? 
I understand that the guidelines from OMB can all fit on one side of a 
single piece of paper. Would CoE need legislation or for the Congress 
to undertake any action to plan for or to implement the HPO?
    Answer. The Corps is using accepted practices for internal business 
process re-engineering such as Lean Six Sigma. No legislation is 
required for studying an HPO. However, before implementing the 
resulting organization, congressional approval may be required.
    Question. Will the HPO involve privatization, job loss, or forced 
reapplications for employment for the in-house workforce? Is the HPO 
based on any budget assumptions? If so, what are they?
    Answer. HPO will not involve privatization, job loss, or forced 
reapplication. No budget assumptions or targets are driving this 
initiative.
    Question. Has the HPO team begun work? When will the HPO team 
finish work? How long will it take before the HPO plan is implemented? 
How will the team incorporate the views of non-management employees? 
How many non-management employees will be on the HPO team? How many 
union members will be on the HPO team?
    Answer. The HPO team for locks and dams started the study in 
January 2007 and is scheduled to complete its work in July 2008. After 
that, there is a 5-year transition to attain the end-state 
configuration. The team is made up of a typical cross section of the 
locks and dams personnel, including lock masters, operations managers, 
and other district employees, The HPO team is totally independent of 
the Corps management and empowered to do the study without any 
interference. Team members have been visiting project sites, meeting 
with employees, and soliciting input by various means from all 
employees.
    Question. It seems that an extraordinary number of important issues 
could be dealt with by the HPO team, but it is unclear what they might 
consider or how broad the mandate is. For example, it appears that the 
HPO plan could propose reducing hours at some locks and dams, reducing 
capabilities at some CoE district offices, or using one CoE district's 
maintenance fleet in another CoE district even if that means the first 
CoE district's maintenance backlog might be ignored. Will such issues 
or similar issues be seriously considered? Is there any limitation on 
the consideration of such or similar issues? If so, what are they?
    Answer. The main thrust of the HPO study is to provide a safe, 
reliable, efficient and effective operations and maintenance for the 
U.S. Inland Marine Transportation System. It is not intended to cut 
corners or reduce capabilities.

                     CONTINUING AUTHORITIES PROGRAM

    Question. I realize that the Continuing Authorities Program is a 
sideline to your major mission areas. We annually fund about $150 
million to this program, where you usually budget less than $50 
million. However, you need to understand that it is a program that is 
very important to my colleagues and hundreds of local communities 
across the country. The Congress has been concerned about the 
management of this program. We recognize that we have contributed to 
some of the management issues by recommending more projects that 
funding was available for. In fiscal year 2006 and continuing in fiscal 
year 2007 there is a moratorium on projects within the CAP program from 
advancing to the next stage of project development.
    What measures have we put in place to more effectively manage the 
program?
    Answer. The following actions have been taken to improve management 
for CAP.
    In February 2006 we established a national Program Manager for CAP 
to manage and analyze large and complex data and this has greatly 
improved the overall management of CAP.
    In June 2006, we provided Congress with a 5 Year Program Management 
Plan (PMP) for CAP. The intent is to review and update the PMP 
annually. Implementation of the PMP will be an improvement action.
    Beginning with the fiscal year 2008 budget, we've implemented a 
performance based method for development of the CAP budget. This is a 
new approach for CAP budget development. It should help improve CAP by 
providing a clear and consistent method analyzing CAP for budgetary 
purposes.
    For the fiscal year 2007 program we developed a ranking methodology 
using appropriate criteria for determining fiscal year 2007 
allocations. The method helped improve CAP by providing a clear method 
for allocating fiscal year 2007 funds.
    Question. What is the outlook for fiscal year 2007?
    Answer. For fiscal year 2007 CAP funding requests exceeded 
available funds by $33,069,000. Therefore we developed a ranking 
methodology using appropriate criteria that was implemented to 
prioritize requests and optimize use of available funds. CAP funds for 
fiscal year 2007 are fenced by section. In addition, the moratorium on 
execution of new FCSA's and PCA's continues in fiscal year 2007. The 
fencing and moratorium restrictions create challenges in optimal 
management of CAP funding.
    Question. Will all funding provided in each section of the program 
be utilized in current project development phases and will some 
projects be ready to move to the next phase?
    Answer. The CAP Fiscal Year 2007 Work Plan funds $124,616,000 at 
this time with a reserve of $13,786,000. The plan provides $89,104,000 
to complete 163 project phases, $28,721,000 for continuing work, and 
$6,791,000 to initiate new phases.
    Under the current PCA moratorium, we are only able to move projects 
into construction if full funding is available to fund the entire 
construction. This significantly limits the number of CAP projects that 
can move into construction during fiscal year 2007.
    Under the current FCSA moratorium, we are required to limit Federal 
funding for feasibility work at $100,000. This restriction has caused 
numerous CAP projects to cease or postpone feasibility work.
    Question. Will we propose a package of projects to move forward? 
When?
    Answer. We provided detailed lists of active CAP projects to 
Congress in June 2006. Those reports showed FCSA and PCA execution 
status, allocation history, obligation capabilities through fiscal year 
2011, and estimated Federal costs. The June 2006 reports did not make 
specific recommendations regarding which projects should be considered 
for moving forward. It would be a better management approach if 
decisions regarding selection of CAP projects to forward were made 
using the performance based budgeting method and the fiscal year 2007 
allocation methods mentioned earlier. The nature of CAP is that these 
are smaller projects with less certainty regarding costs, scope, and 
sponsor commitments. Flexibility of management is highly desirable due 
to the nature of the program.
                                 ______
                                 
            Questions Submitted by Senator Mary L. Landrieu

                    LATEST $1.3 BILLION FUNDING NEED

    Question. Secretary Woodley, your testimony referred to the 
administration's request for reprogramming $1.3 billion in emergency 
supplemental appropriations from last year to cover shortfalls in 
hurricane protection projects in Louisiana. The Corps is developing 
estimates of future funding shortfalls with a goal of having complete 
estimates this summer.
    Does the administration intend to request supplemental 
appropriations when the future shortfalls are identified?
    Answer. Emergency authority and funding was provided by Congress 
and we are executing this mission in that manner. The Corps of 
Engineers is working with the resources provided to restore and improve 
the Hurricane Protection System as authorized and funded in fiscal year 
2006. This is the number one domestic priority of the Corps of 
Engineers, and we are committed to executing this mission in the most 
efficient and expeditious manner possible. The Corps continues to 
develop new information and incorporate it into our planning process, 
constantly working to improve the reliability of our cost estimates and 
construction schedule estimates. We are committed to developing and 
communicating these estimates in a transparent manner. We will ensure 
that the Congress and the administration have the information that they 
require in order to identify an appropriate vehicle for funding the 
completion of the 100-year system.
    Sufficient unobligated funds exist in the 4th supplemental 
appropriation to cover immediate work on those measures that will 
reduce the risk for the New Orleans metropolitan area with the proposed 
$1.3 billion reprogramming. This work includes floodwalls and levees 
that are ready for contract award. Fiscal Year 2006 4th Supplemental 
funds proposed for reallocation are not required until later in the 
year when designs and required environmental documentation are 
complete. The Corps is currently updating cost-estimates for the 
remaining work, and it would be premature to request additional funding 
until the Corps finishes these revisions. Funds reappropriated from the 
4th Supplemental will need to be replenished by additional 
appropriations at some future date, possibly in the fall of 2007.

                        CRITICAL INFRASTRUCTURE

    Question. On March 8, Homeland Security Secretary Michael Chertoff 
agreed with me that levees should be categorized as critical 
infrastructure.
    I would like to ask the Corps to begin the appropriate 
conversations and collaboration with the Department of Homeland 
Security to expedite the inclusion of levees as critical infrastructure 
and report back to me within 6 weeks on your progress. Can the Corps do 
this?
    Answer. Yes, Senator we can do this. Levees are already included 
within the framework of the National Infrastructure Protection Plan 
(NIPP). As established in the Dams Sector Specific Plan released in May 
2007: ``The Dams Sector is comprised of the assets, systems, networks, 
and functions related to dam projects, navigation locks, levees, 
hurricane barriers, mine tailings impoundments, or other similar water 
retention and/or control facilities.'' It is important to highlight 
that ``levees'' is used in this context to designate flood damage 
reduction systems (dikes, embankments, levees, floodwalls, pumping 
stations, etc.); also including conventional dams that perform critical 
functions as part of flood damage reduction systems. Therefore levees 
are clearly part of the Dams Sector as one of the 17 Critical 
Infrastructure and Key Resources (CI/KR) sectors established by the 
NIPP. The Dams Sector is currently pursuing the formal establishment of 
a Levee Sub-Sector which will include the creation of the corresponding 
Levee Sector-Coordination Council.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye

                KIKIAOLA HARBOR, ISLAND OF KAUAI, HAWAII

    Question. Please provide me with a status of the project.
    Answer. Sir, funding for the project is being considered during 
development of the Civil Works Fiscal Year 2007 Work Plan. The Honolulu 
District is updating the plans, specifications, and permits in 
preparation for advertisement and award of a construction contract.
    Question. My records indicate that there were five reprogramming 
actions taken on the project beginning in 1980, 2001, 2002, 2003, and 
2005, and totaling $10,045,000. What are the chances of the Corps 
restoring these funds for the Kikiaola project? If so, does the Corps 
have a time table as to when these funds can be restored?
    Answer. Sir, any funds included for the project in the Corps of 
Engineers Fiscal Year 2007 Work Plan would be applied toward the Corps' 
commitment to restore previously reprogrammed funds. The Work Plan will 
be provided to the Committees shortly.
    Question. I understand that $15,000,000 in construction funds is 
needed in fiscal year 2008. Does this amount take into account the 
$10,045,000 that was reprogrammed by the Corps since 1980? Please 
explain how, if any, would the Corps factor in any reprogrammed 
amounts.
    Answer. Sir, whether a project has experienced previous net 
revocations is a consideration in development of the fiscal year 2007 
Work Plan. Any funds allocated to the project would be applied toward 
the commitment to restore previously revoked funds.
    Question. Would the $15,000,000 be sufficient to complete the 
Kikiaola Light Draft Harbor project?
    Answer. Yes, sir. The $15,000,000 would be sufficient to complete 
the project based on our current cost estimates.
                                 ______
                                 
                Questions Submitted by Senator Jack Reed

                             BUDGET REQUEST

    Question. The Defense Authorization Act for fiscal year 2007 
included a provision directing the Corps to assume responsibility for 
the annual operations and maintenance of the Fox Point Hurricane 
Barrier in Providence, Rhode Island. The Corps is to assume 
responsibility within 2 years after the date of the enactment of the 
Act, which I believe is October 17, 2008. Could you tell me where the 
Corps is in the process of taking over operations and control of the 
hurricane barrier? The Corps did not request funding for this project 
in the fiscal year 2008 budget, is not funding needed at this time? Do 
you plan to request funding in the President's budget request for 
fiscal year 2009?
    Answer. We have not received any funding to date for this effort. 
We have met with the city of Providence to develop a strategy; however, 
we have not initiated this work because of funding delays and at this 
time it is unlikely that we will be able to perform all of the tasks 
necessary to take over operation and maintenance of the project by 17 
October 2008. We have Construction funds currently available; however, 
these funds are for the purpose of reimbursing the city of Providence 
for the Federal share of their costs in making eligible repairs to the 
Fox Point Hurricane Barrier. We are not authorized to use these funds 
for the purpose of completing tasks necessary to take over operation 
and maintenance of the project. The fiscal year 2009 budget to be 
released in February 2008 and as of yet have not made any decisions for 
that budget.
    Question. The Corps has a number of ongoing projects in Rhode 
Island to assist with navigation and aquatic ecosystem restoration. 
These projects are funded under the Continuing Authorities Programs; 
yet, there is no funding request in the fiscal year 2008 budget for 
these projects. Could you tell me why the administration's budget 
request does not provide a list of these ongoing projects in each State 
and the amount of funding needed for their completion? Could you 
provide a national list of projects currently funded under the Corps' 
Continuing Authorities Program and the cost to complete work on these 
projects? Also, why does the administration not provide specific 
funding requests for these projects in its budget?
    Answer. Yes, sir the list requested is attached. Competition for 
Constructions funds is very keen and the budget presented the best 
allocation of funds among all the competing interest.

                    FIVE YEAR CAPABILITIES FOR CAP PROJECT PHASES IN FISCAL YEAR 2008 BUDGET
                                            [in thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                        Cost to
                Project Name                  CAP Section No.          MSC              DISTRICT        Complete
----------------------------------------------------------------------------------------------------------------
KWETHLUK, AK................................              14   POD...............  POA...............        100
TALLAHATCHIE RIVER, SITE 3, TALLAHATCHIE                  14   MVD...............  MVK...............        621
 COUNTY, MS.
14 OLD FORT NIAGARA, YOUNGSTOWN, NY.........              14   LRD...............  LRB...............        100
27TH STREET BRIDGE, GLENWOOD SPRINGS, CO....              14   SPD...............  SPA...............        322
ALDEN SEWER DISTRICT NO. 2..................              14   LRD...............  LRB...............        100
ARGOSY ROAD BRIDGE, RIVERSIDE, MO...........              14   NWD...............  NWK...............        650
BARNES CO., KATHRYN, ND.....................              14   MVD...............  MVP...............        300
BATESVILLE WASTEWATER TREATMENT PLANT, WHITE              14   SWD...............  SWL...............        477
 RIVER, AR.
BEAR CREEK, ROLAND, STORY CO., IA...........              14   MVD...............  MVR...............         90
BEAVER CK WASTEWATER TREATMENT PLANT,                     14   LRD...............  LRL...............        100
 GREENE, CO.
BELLE ISLE, DETROIT, MI.....................              14   LRD...............  LRE...............         50
BELPRE, OH SEWER AND WATERLINE PROTECTION...              14   LRD...............  LRH...............         80
BIG SISTER CREEK, N. COLLINS................              14   LRD...............  LRB...............        100
BLACK RIVER, RIVER DRIVE....................              14   MVD...............  MVP...............        500
BLANCHARD RIVER, OTTAWA, OH.................              14   LRD...............  LRB...............  .........
BRITTON ROAD BRIDGE, JONES, OK..............              14   SWD...............  SWT...............         40
CANADAWAY SEWERLINE.........................              14   LRD...............  LRB...............        250
CASS LAKE, LEECH LAKE TRIBE.................              14   MVD...............  MVP...............        225
CAULKS CREEK, ST. LOUIS COUNTY, MO..........              14   MVD...............  MVS...............        421
CHAGRIN RIVER, GATES MILLS, OH..............              14   LRD...............  LRB...............  .........
CITY OF BLUFFTON, WELLS CO (SEC. 14)........              14   LRD...............  LRL...............        100
COAL CREEK, ALBIA, MONROE CO., IA...........              14   MVD...............  MVR...............        125
COAL CREEK, ALBIA, MONROE CO., IA...........              14   MVD...............  MVR...............         38
CONWAY, CROWS RUN, PA.......................              14   LRD...............  LRP...............        126
CROOKED CREEK, MADISON, IN..................              14   LRD...............  LRL...............        220
CUYAHOGA RIVER, BATH ROAD...................              14   LRD...............  LRB...............  .........
CUYAHOGA RIVER, VAUGHN RD...................              14   LRD...............  LRB...............        100
DEERFIELD TOWNSHIP, WARREN CO...............              14   LRD...............  LRL...............        100
DELAWARE CANAL, PAUNNACUSSING CREEK, BUCKS                14   NAD...............  NAP...............        750
 COUNTY, PA.
DES MOINES RVR, KEOSAUGUA, VAN BURNE CO., IA              14   MVD...............  MVR...............         90
DUNKARD CREEK, BLACKVILLE, PA...............              14   LRD...............  LRP...............         39
EAST FORK BIG CREEK, BETHANY, MO............              14   NWD...............  NWK...............         69
EAST LIVERPOOL, OH..........................              14   LRD...............  LRP...............        129
EAST POINT, NJ..............................              14   NAD...............  NAP...............        360
EAST VALLEY CREEK, ANDOVER..................              14   LRD...............  LRB...............        100
EIGHTEENMILE CREEK, NEWFANE.................              14   LRD...............  LRB...............        100
EIGHTEENMILE CREEK, NORTH CREEK RD..........              14   LRD...............  LRB...............        100
ELIZABETH RIVER, VALLEYVIEW ROAD, HILLSIDE,               14   NAD...............  NAN...............        800
 NJ.
ELK RIVER, SHERBURNE CO.....................              14   MVD...............  MVP...............        600
ELLICOTT CREEK, NORTH FOREST RD., AMHERST...              14   LRD...............  LRB...............        100
ERIE BASIN MARINA, BUFFALO, NY..............              14   LRD...............  LRB...............        100
FT. ABERCROMBIE, ND.........................              14   MVD...............  MVP...............        960
FT. ABERCROMBIE, ND.........................              14   MVD...............  MVP...............         40
GRAND RIVER (NOWS), GRAND HAVEN, MI.........              14   LRD...............  LRE...............         50
GRAND RIVER, PAINESVILLE, OH, SR84 BRIDGE...              14   LRD...............  LRB...............  .........
GRAYCLIFF HOUSE, EVANS, NY..................              14   LRD...............  LRB...............         80
GREEN HILL RD., ASHTABULA RIVER, PLYMOUTH                 14   LRD...............  LRB...............        100
 TOWNSHIP.
HANLOCK RD., ASHTABULA RIVER, PLYMOUTH                    14   LRD...............  LRB...............        100
 TOWNSHIP.
HIGHWAY A, TURKEY CREEK, MO.................              14   MVD...............  MVS...............         35
HODGENVILLE, KY.............................              14   LRD...............  LRL...............        200
HOLMES BAY [STATE HIGHWAY RTE 191], WHITING,              14   NAD...............  NAE...............        675
 ME.
HURON RIVER, S.R. 99........................              14   LRD...............  LRB...............        100
IA RVR, IA CITY, JOHNSON CO., IA............              14   MVD...............  MVR...............         90
IA RVR, SAC & FOX SETTLEMENT, TAMA COUNTY,                14   MVD...............  MVR...............        348
 IA.
KANAWHA RIVER, CHARLESTON, WV (MAGIC ISLAND               14   LRD...............  LRH...............        960
 TO PATRICK STREET).
KENOSHA HARBOR, RETAINING WALL, KENOSHA, WI.              14   LRD...............  LRE...............        700
KEUKA LAKE, HAMMONDSPORT....................              14   LRD...............  LRB...............        100
KINNICKINNIC RIVER STORM SEWER, MILWAUKEE                 14   LRD...............  LRE...............        130
 COUNTY, WI.
MIDDLE BASS ISLAND, OH, DEIST ROAD..........              14   LRD...............  LRB...............  .........
MONONGAHELA RIVER, W. ELIZABETH, PA.........              14   LRD...............  LRP...............         70
MT. PLEASANT AVE., MALAPARDIS BROOK,                      14   NAD...............  NAN...............        650
 HANOVER, NJ.
NOKOMIS RD, TEN MILE CREEK, LANCASTER, TX...              14   SWD...............  SWF...............        516
NORTH PARK..................................              14   LRD...............  LRC...............      1,300
NORTH SHORE DRIVE, SOUTH BEND, IN...........              14   LRD...............  LRE...............         65
OAKLAND SEWAGE FACILITY, TN.................              14   MVD...............  MVM...............         46
OHIO RIVER, HUNTINGTON, WV SEVENTH STREET                 14   LRD...............  LRH...............        380
 WEST SEC. 14.
OHIO RIVER, HUNTINGTON, WV SEVENTH STREET                 14   LRD...............  LRH...............         40
 WEST SEC. 14.
OHIO RIVER, HUNTINGTON, WV STAUNTON AVENUE                14   LRD...............  LRH...............        140
 SEC. 14.
OHIO RIVER, HUNTINGTON, WV STAUNTON AVENUE                14   LRD...............  LRH...............         40
 SEC. 14.
OLD CHAPPELL HILL ROAD, DAVIS CREEK,                      14   SWD...............  SWF...............        180
 WASHINGTON COUNTY, TX.
OUACHITA RIVER, CITY OF MONROE, LA..........              14   MVD...............  MVK...............         60
PARTRIDGE BROOK, WESTMORELAND, NH...........              14   NAD...............  NAE...............        381
PATUXENT RIVER, PATUXENT BEACH ROAD, MD.....              14   NAD...............  NAB...............        700
PEPPER'S FERRY RWTR, RADFORD, VA SEC. 14....              14   LRD...............  LRH...............         40
PIPE CREEK, HAYES HOLLOW RD.................              14   LRD...............  LRB...............        100
PLATTE CITY SEWER, PLATTE CITY, MO..........              14   NWD...............  NWK...............        260
PLATTE RIVER BRIDGE, CONCEPTION, MO.........              14   NWD...............  NWK...............        227
POWERS BLVD, COLORADO SPRINGS, CO...........              14   SPD...............  SPA...............        441
QUODDY NARROWS, SOUTH LUBEC ROAD, LUBEC, ME.              14   NAD...............  NAE...............        202
RANSOM CREEK, HOPKINS ROAD, AMHERST, NY.....              14   LRD...............  LRB...............        730
RED DUCK--NINETH STREET, KY., NO. 14........              14   MVD...............  MVM...............        595
RED LAKE RIVER, MN..........................              14   MVD...............  MVP...............        960
RED LAKE RIVER, MN..........................              14   MVD...............  MVP...............         40
ROCKPORT, IN................................              14   LRD...............  LRL...............        200
ROUTE YY, WORTH COUNTY, MO..................              14   NWD...............  NWK...............        227
ROUTE YY, WORTH COUNTY, MO..................              14   NWD...............  NWK...............         99
SALAMANCA, NY...............................              14   LRD...............  LRP...............         70
SAND COVE PARK, SACRAMENTO RIVER, CA........              14   SPD...............  SPK...............         59
SAND HILL BRIDGE, MEDICINE CREEK, GRUNDY                  14   NWD...............  NWK...............        305
 CO., MO.
SAND HILL BRIDGE, MEDICINE CREEK, GRUNDY                  14   NWD...............  NWK...............         79
 CO., MO.
SARTELL, MN.................................              14   MVD...............  MVP...............        500
SEC. 14 LINCOLN BOROUGH, PA.................              14   LRD...............  LRP...............         70
SHOTWELL CREEK, ST. LOUIS COUNTY, MO........              14   MVD...............  MVS...............        203
SIX-MILE CREEK, ITHACA, NY..................              14   LRD...............  LRB...............  .........
SOUTH BRANCH, RAHWAY RIVER, WOODBRIDGE, NJ..              14   NAD...............  NAN...............        550
SOUTH FORK CLEAR CREEK, ROUTE FF, MARYVILLE,              14   NWD...............  NWK...............        189
 MO.
SOUTH HARRISON COUNTY, IN...................              14   LRD...............  LRL...............        200
SOUTHERN UNIVERSITY, CAMPUS ROAD, BATON                   14   MVD...............  MVN...............        204
 ROUGE, LA.
SPRINGDALE CREEK SPRINGDALE CEMETARY PEORIA,              14   MVD...............  MVR...............         90
 IL.
ST JOHNS LANDFILL, OR.......................              14   NWD...............  NWP...............        809
STRANGER CREEK AT K-32, KS..................              14   NWD...............  NWK...............        428
STRANGER CREEK AT K-32, KS..................              14   NWD...............  NWK...............         73
STURGEON RIVER, HOUGHTON COUNTY, MI.........              14   LRD...............  LRE...............        280
THIEME DRIVE, FORT WAYNE, IN................              14   LRD...............  LRE...............         60
TONAWANDA CREEK, LOCKWOOD, NIAGARA COUNTY...              14   LRD...............  LRB...............        100
TONAWANDA CREEK, NEWSTEAD...................              14   LRD...............  LRB...............        100
TONAWANDA CREEK, RIDDLE ROAD, NY............              14   LRD...............  LRB...............  .........
TONAWANDA CREEK, TONAWANDA CREEK RD.,                     14   LRD...............  LRB...............        100
 AMHERST.
TOWN OF PORTER..............................              14   LRD...............  LRB...............        100
TOWN OF WELLS, NY...........................              14   NAD...............  NAN...............        500
TUCKER ROAD, COMITE RIVER, LA...............              14   MVD...............  MVN...............        200
TUSCARAWAS CO., RD. 1, (JOHNSON HILL), OH...              14   LRD...............  LRH...............        295
U.S. HIGHWAY 71 BRIDGE, RED RIVER, OGDEN, AR              14   SWD...............  SWL...............        465
WALKER LANE, WASHINGTON, WV, SECTION 14.....              14   LRD...............  LRH...............         80
WALNUT BOTTOM RUN, ING-RICH ROAD, BEAVER                  14   LRD...............  LRP...............         77
 FALLS, PA.
WEST FORK MEDICINE CREEK, GALT BRIDGE, MO...              14   NWD...............  NWK...............        119
WEST FORK MEDICINE CREEK, GALT BRIDGE, MO...              14   NWD...............  NWK...............         11
WESTFIELD RIVER, AGAWAM, MA.................              14   NAD...............  NAE...............        155
WESTFIELD RIVER, OLD RTE. 9, CUMMINGTON, MA.              14   NAD...............  NAE...............        188
WESTON, WV (US RT 19 S).....................              14   LRD...............  LRP...............         90
WHITE RIVER, AUGUSTA, AR....................              14   SWD...............  SWL...............        100
WHORTON BEND ROAD, ETOWAH CO., AL...........              14   SAD...............  SAM...............        524
UNALAKLEET STORM DAMAGE REDUCTION,                       103   POD...............  POA...............        400
 UNALAKLEET, AK.
BAYOU TECHE-CHITIMACHA......................             103   MVD...............  MVN...............        200
COMMERCIAL PORT ROAD, GUAM 000..............             103   POD...............  POH...............      1,977
F-1 FUEL PIER, GUAM.........................             103   POD...............  POH...............        550
FORT SAN GERONIMO, PR.......................             103   SAD...............  SAJ...............        300
GOLETA BEACH, CITY OF GOLETA, CA............             103   SPD...............  SPL...............      2,015
GOLETA BEACH, CITY OF GOLETA, CA............             103   SPD...............  SPL...............        300
INDIAN RIVER INLET, SUSSEX COUNTY, DE.......             103   NAD...............  NAP...............        544
LAKE ERIE AT PAINESVILLE....................             103   LRD...............  LRB...............  .........
LAKE ERIE ATHOL SPRINGS, NY.................             103   LRD...............  LRB...............      1,050
LAKEVIEW PARK...............................             103   LRD...............  LRB...............        100
LASALLE PARK, BUFFALO, NY...................             103   LRD...............  LRB...............  .........
LELOALOA SHORE PROTECTION, AMERICAN SAMOA...             103   POD...............  POH...............      1,663
NANTASKET BEACH, HULL, MA...................             103   NAD...............  NAE...............         81
PHILADELPHIA SHIPYARD, PA...................             103   NAD...............  NAP...............      2,802
PLEASURE ISLAND, BALTIMORE COUNTY, MD.......             103   NAD...............  NAB...............        300
PORTER COMMUNITY PARK.......................             103   LRD...............  LRB...............        100
PUERTO NUEVO BCH, PR........................             103   SAD...............  SAJ...............         73
TARPON SPRINGS, FL..........................             103   SAD...............  SAJ...............        922
VETERAN'S DRIVE SHORELINE, ST. THOMAS,                   103   SAD...............  SAJ...............        281
 U.S.V.I..
KAHO'OLAWE SMALL BOAT HARBOR, HI............             107   POD...............  POH...............        494
MACKINAC ISLAND HARBOR BREAKWATER, MI.......             107   LRD...............  LRE...............        200
APRA SMALL BOAT HARBOR, GUAM................             107   POD...............  POH...............        620
ARKANSAS RIVER, RUSSELLVILLE HARBOR, AR.....             107   SWD...............  SWL...............      2,746
BASS HARBOR, TREMONT, ME....................             107   NAD...............  NAE...............        144
BLACKWATER RIVER, HAMPTON HARBOR, NH........             107   NAD...............  NAE...............        144
BLYTHEVILLE HARBOR, AR......................             107   MVD...............  MVM...............      3,280
BUCKS HARBOR, MACHIASPORT, ME...............             107   NAD...............  NAE...............         42
BUFFALO INNER HARBOR, NY....................             107   LRD...............  LRB...............      3,600
CHARLESTOWN BREACHWAY & NINIGRET POND,                   107   NAD...............  NAE...............        301
 CHARLESTOWN, RI.
CHEFORNAK NAVIGATION IMPROVEMENTS,                       107   POD...............  POA...............        400
 CHEFORNAK, AK.
CLEVELAND LAKEFRONT STATE PARK, OH..........             107   LRD...............  LRB...............  .........
COLD BAY NAVIGATION IMPROVEMENTS............             107   POD...............  POA...............        400
COOLEY CREEK, OH............................             107   LRD...............  LRB...............  .........
DOUGLAS HARBOR, AK..........................             107   POD...............  POA...............      2,778
EAST BOAT BASIN, SANDWICH, MA...............             107   NAD...............  NAE...............        100
EAST TWO RIVER, TOWER, MN...................             107   MVD...............  MVP...............        350
ELIM NAVIGATION IMPROVEMENTS, ELIM, AK......             107   POD...............  POA...............        400
ESCANABA, MI................................             107   LRD...............  LRE...............        309
FISHERMANS COVE, NORFOLK, VA................             107   NAD...............  NAO...............        252
GALVESTON ISLAND HARBOR, GALVESTON, TX......             107   SWD...............  SWG...............        599
GRAND MARAIS, MN............................             107   LRD...............  LRE...............        200
GRAND PORTAGE HARBOR, MN....................             107   LRD...............  LRE...............        130
GUSTAVUS NAVIGATION IMPROVEMENTS, AK........             107   POD...............  POA...............        250
IGIUGIG NAVIGATION IMPROVEMENTS, IGIUGIG, AK             107   POD...............  POA...............        400
KNIFE HARBOR, MN............................             107   LRD...............  LRE...............        100
KOKHANOK HARBOR, AK.........................             107   POD...............  POA...............        400
NANTICOKE HARBOR, MD........................             107   NAD...............  NAB...............        300
NANWALEK NAVIGATION IMPROVEMENTS, AK........             107   POD...............  POA...............        250
NASSAWADOX CREEK, NORTHAMPTON COUNTY, VA....             107   NAD...............  NAO...............        608
NEW RIVER INLET, ONSLOW CO., NC.............             107   SAD...............  SAW...............         80
NFTA BOAT HARBOR............................             107   LRD...............  LRB...............        100
NORTH KOHALA NAVIGATION, HI.................             107   POD...............  POH...............        520
NORTHERN MICHIGAN COLLEGE, TRAVERSE CITY, MI             107   LRD...............  LRE...............      1,314
NORTHWEST TENNESSEE REGIONAL HARBOR, LAKE                107   MVD...............  MVM...............      3,110
 COUNTY, TN.
OAK BLUFFS HARBOR, OAK BLUFFS, MA...........             107   NAD...............  NAE...............        360
OHIO RIVER, PROCTORVILLE, OH., SEC. 107.....             107   LRD...............  LRH...............        200
OLCOTT HARBOR, NEWFANE, NY..................             107   LRD...............  LRB...............  .........
ONTONAGON RIVER, MI.........................             107   LRD...............  LRE...............        125
OUTER COVE MARINA, CNMI.....................             107   POD...............  POH...............        570
OYSTER POINT MARINA.........................             107   SPD...............  SPN...............        650
PALM BEACH HARBOR, FL.......................             107   SAD...............  SAJ...............        250
POINT JUDITH HARBOR, NARRAGANSETT, RI.......             107   NAD...............  NAE...............        100
PORT FOURCHON EXTENSION, LAFOURCHE PARISH,               107   MVD...............  MVN...............        500
 LA.
PORT GRAHAM NAVIGATION IMPROVEMENTS, PORT                107   POD...............  POA...............        160
 GRAHAM, AK.
PORT HUENEME, CA............................             107   SPD...............  SPL...............      4,000
RHODES POINT, MD............................             107   NAD...............  NAB...............      3,600
ROUGE RIVER, MI.............................             107   LRD...............  LRE...............        320
ROUND POND HARBOR, BRISTOL, ME..............             107   NAD...............  NAE...............         80
SEWARD MARINE INDUSTRIAL CENTER NAVIGATION               107   POD...............  POA...............        400
 IMPROVEMENT, AK.
SHALLOTTE RIVER, BRUNSWICK COUNTY, NC.......             107   SAD...............  SAW...............         49
SMALL NAVIGATION IMPROVEMENTS, ILIAMNA, AK..             107   POD...............  POA...............        290
ST LAWRENCE, AK.............................             107   POD...............  POA...............      9,600
ST. JEROME CREEK, ST. MARY'S COUNTY, MD.....             107   NAD...............  NAB...............        300
ST. JEROME CREEK, ST. MARY'S COUNTY, MD.....             107   NAD...............  NAB...............        100
TATITLEK, AK................................             107   POD...............  POA...............      3,105
TATITLEK, AK................................             107   POD...............  POA...............        294
TELLER NAVIGATION IMPROVEMENTS, TELLER, AK..             107   POD...............  POA...............        200
TWO HARBORS, MN.............................             107   LRD...............  LRE...............        212
WALNUT CREEK ACCESS AREA, ERIE COUNTY, PA...             107   LRD...............  LRB...............  .........
WALTER SLOUGH, DARE COUNTY, NC..............             107   SAD...............  SAW...............        448
WESTPORT, MA................................             107   NAD...............  NAE...............        531
WOODS HOLE GREAT HARBOR, FALMOUTH, MA.......             107   NAD...............  NAE...............        150
WURTLAND, KY (NAVIGATION CHANNEL                         107   LRD...............  LRH...............      7,300
 IMPROVEMENT).
WURTLAND, KY (NAVIGATION CHANNEL                         107   LRD...............  LRH...............         50
 IMPROVEMENT).
111 FAIRPORT HARBOR, OH.....................             111   LRD...............  LRB...............        100
111 VERMILLION, OH..........................             111   LRD...............  LRB...............        100
AGUADILLA COASTLINE, PR.....................             111   SAD...............  SAJ...............      3,250
CAMP ELLIS, SACO, MAINE.....................             111   NAD...............  NAE...............        247
LORAIN HARBOR, OH...........................             111   LRD...............  LRB...............        100
MATTITUCK HARBOR, NY........................             111   NAD...............  NAN...............        300
MOBILE PASS, AL.............................             111   SAD...............  SAM...............        777
MOREHEAD CITY HARBOR, NC., SECTION 933......             145   SAD...............  SAW...............      4,100
21ST AVE WEST CHANNEL, DULUTH, MN...........             204   LRD...............  LRE...............         20
BARATARIA BAY WATERWAY, MILE 6.0-0.0,                    204   MVD...............  MVN...............        100
 PLAQUEMINES PH, LA.
BLACKHAWK BOTTOMS, DES MOINES COUNTY, IA....             204   MVD...............  MVR...............        306
CALCASIEU RIVER, MILE 5.0-14.0, CAMERON                  204   MVD...............  MVN...............      1,125
 PARISH, LA.
ISLE AUX HERBES.............................             204   SAD...............  SAM...............        250
MAUMEE BAY HABITAT RESTORATION, OH..........             204   LRD...............  LRB...............      1,500
MRGO MILE -3 TO -9 MARSH RESTORATION,                    204   MVD...............  MVN...............      1,071
 (2001), PLAQUEMINES PH.
WANCHESE MARSH CREATION AND PROTECTION, NC..             204   SAD...............  SAW...............         20
WYNN ROAD, OREGON, OH.......................             204   LRD...............  LRB...............        600
DAUPHIN ISLAND PARKWAY, AL..................             204   SAD...............  SAM...............        450
HELEN WOOD PARK, AL.........................             204   SAD...............  SAM...............      1,600
OTTAWA RIVER, OH............................             204   LRD...............  LRB...............        600
RESTORATION OF THE CAT ISLANDS CHAIN, WI....             204   LRD...............  LRE...............        205
BEAVER CREEK & TRIBS, BRISTOL, TN...........             205   LRD...............  LRN...............        800
CHIPPEWA RIVER AT MONTEVIDEO, MN............             205   MVD...............  MVP...............      3,472
EAST PEORIA, IL.............................             205   MVD...............  MVR...............        100
FARGO, RIDGEWOOD ADDITION, ND...............             205   MVD...............  MVP...............      2,035
HEACOCK CHANNEL, RIVERSIDE COUNTY,                       205   SPD...............  SPL...............      5,300
 RIVERSIDE, CA.
205 LIMESTONE CREEK, FAYETTEVILLE, NY.......             205   LRD...............  LRB...............  .........
ABERJONA RIVER, WINCHESTER, MA..............             205   NAD...............  NAE...............        150
AITKIN, MN..................................             205   MVD...............  MVP...............      5,673
AITKIN, MN..................................             205   MVD...............  MVP...............        216
AMBERLEY CREEK, CINCINNATI, OH..............             205   LRD...............  LRL...............        350
ARCHEY FORK CREEK, CLINTON, AR..............             205   SWD...............  SWL...............        108
ARROYO, PR (205)............................             205   SAD...............  SAJ...............        271
ATHENS, OH RICHLAND AVE. CORRIDOR...........             205   LRD...............  LRH...............        200
BALDWIN CREEK, NORTH ROYALTON, OH...........             205   LRD...............  LRB...............  .........
BANLICK CREEK, KENTON CO., KY...............             205   LRD...............  LRL...............        200
BAYOU CHOUPIQUE CAP 205.....................             205   MVD...............  MVN...............        200
BAYOU QUEUE DE TORTUE, VERMILION PARISH, LA.             205   MVD...............  MVN...............        125
BEAVER CREEK, FRENCHBURG, KY................             205   LRD...............  LRL...............        150
BEML MILL BROOK HIGHLAND PARK, NJ...........             205   NAD...............  NAN...............        300
BEN HILL COUNTY, GA.........................             205   SAD...............  SAS...............      1,200
BEPJ POPLAR BROOK...........................             205   NAD...............  NAN...............        850
BIG SISTER CREEK, ANGOLA....................             205   LRD...............  LRB...............        100
BLACK ROCKS CREEK, SALISBURY, MA............             205   NAD...............  NAE...............        250
BLACKSNAKE CREEK, ST. JOSEPH, MO............             205   NWD...............  NWK...............      3,639
BLACKSNAKE CREEK, ST. JOSEPH, MO............             205   NWD...............  NWK...............          6
BLASDELL STP................................             205   LRD...............  LRB...............        100
BOCA DE CACHETA, PR.........................             205   SAD...............  SAJ...............        250
BREAKNECK CREEK, FRANKLIN...................             205   LRD...............  LRB...............        100
BRUSH CREEK, GLADY FORK, PRINCETON, WV......             205   LRD...............  LRH...............         50
BUCKEYE LAKE, OH............................             205   LRD...............  LRH...............        858
BUCKEYE LAKE, OH............................             205   LRD...............  LRH...............         75
BYRUM CREEK, ANDERSON COUNTY, SC............             205   SAD...............  SAS...............        275
CANE BEND, BOSSIER PARISH, LA...............             205   MVD...............  MVK...............        150
CANISTEO MINE PIT LAKE, MN..................             205   MVD...............  MVP...............      2,300
CANISTEO MINE PIT LAKE, MN..................             205   MVD...............  MVP...............        275
CASHIE RIVER, WINDSOR, NC...................             205   SAD...............  SAW...............         70
CAZENOVIA CREEK, STEVENSON STREET, BUFFALO..             205   LRD...............  LRB...............        100
CEDAR RIVER, CEDAR FALLS UTILITIES, CEDAR                205   MVD...............  MVR...............        350
 FALLS , IA.
CEDAR RUN, PA...............................             205   NAD...............  NAB...............        200
CITY OF BLUFFTON, WELLS CO (SEC 205)........             205   LRD...............  LRL...............        200
CITY OF DELPHI, CARROLL CO (DEER CK LEVEE)..             205   LRD...............  LRL...............        200
CITY OF FLEMING-NEON, LETCHER, CO...........             205   LRD...............  LRL...............        200
CITY OF WHITTIER, CA........................             205   SPD...............  SPL...............      1,200
CONCORDIA, KS...............................             205   NWD...............  NWK...............        125
COSGROVE CREEK FLOOD CONTROL, CALAVERAS                  205   SPD...............  SPK...............        750
 COUNTY.
COUSHATTA INDIAN RESERVATION FDR PROJECT,                205   MVD...............  MVN...............        125
 ALLEN PARISH, LA.
COWSKIN CREEK, WICHITA, KS..................             205   SWD...............  SWT...............      1,100
CROWN POINT BASIN, JEFFERSON PARISH, LA.....             205   MVD...............  MVN...............        350
DAM BREAK EARLY WARNING SYSTEM, SILVERTON,               205   NWD...............  NWP...............        425
 OR.
DETROIT BEACH, LAKE ERIE, FRENCHTOWN                     205   LRD...............  LRE...............      1,380
 TOWNSHIP, MI.
DETROIT BEACH, LAKE ERIE, FRENCHTOWN                     205   LRD...............  LRE...............         50
 TOWNSHIP, MI.
DRY CREEK, CHEYENNE, WY.....................             205   NWD...............  NWO...............         32
DUCK CREEK, OH FWS..........................             205   LRD...............  LRH...............        200
EIGHTEENMILE CREEK, BOSTON..................             205   LRD...............  LRB...............        100
EIGHTEENMILE CREEK, HAMBURG.................             205   LRD...............  LRB...............        100
ELIZABETHTOWN, KY...........................             205   LRD...............  LRL...............        150
ELKTON, MD..................................             205   NAD...............  NAB...............        300
EST LA GRANGE ST. CROIX.....................             205   SAD...............  SAJ...............        350
EUREKA CREEK, MANHATTAN, KS.................             205   NWD...............  NWK...............      3,123
FARMERS BRANCH, TARRANT COUNTY, TX..........             205   SWD...............  SWF...............      7,189
FISH CREEK/CUYAHOGA RIVER, KENT.............             205   LRD...............  LRB...............        100
FORT YUKON FLOOD CONTROL, FORT YUKON, AK....             205   POD...............  POA...............         75
FRED CREEK, TULSA, OK.......................             205   SWD...............  SWT...............        350
FULMER CREEK, VILLAGE OF MOHAWK, NY.........             205   NAD...............  NAN...............      1,112
GOOSE CREEK, JACKSON, MO....................             205   MVD...............  MVS...............        109
GRAND RIVER, HARPERSFIELD DAM...............             205   LRD...............  LRB...............        100
GRANDVIEW HEIGHTS, OH.......................             205   LRD...............  LRH...............        200
H0ODS CREEK, BOYD COUNTY, KY................             205   LRD...............  LRH...............         37
HAIKEY CREEK, BIXBY, OK.....................             205   SWD...............  SWT...............      4,125
HATCH, NM...................................             205   SPD...............  SPA...............        400
HEBER SPRINGS, CLEBURNE CO., AR.............             205   SWD...............  SWL...............         50
HESHBON TO HEPBURNVILLE, LOWER LYCOMING                  205   NAD...............  NAB...............        600
 CREEK.
HESTER, ADAMSON & HEARTSILL CREEKS,                      205   SWD...............  SWL...............        166
 GREENWOOD, AR.
HIDDEN VALLEY, NEEDMORE BRANCH, GREENE                   205   SWD...............  SWL...............        150
 COUNTY, MO.
HIGH SCHOOL BRANCH, NEOSHO, MISSOURI........             205   SWD...............  SWL...............        100
HIGHWAY 164 BRIDGE, LITTLE PINEY,                        205   SWD...............  SWL...............         70
 HARGARVILLE, AR.
HINKSTON CREEK, MT STERLING, KY.............             205   LRD...............  LRL...............        200
HOMINY SWAMP, WILSON, NC....................             205   SAD...............  SAW...............        100
HOWELL CREEK, WEST PLAINS, MO...............             205   SWD...............  SWL...............        100
HUBBLE CREEK, JACKSON, MO...................             205   MVD...............  MVS...............        106
HUGHES CREEK, KANAWHA COUNTY, WV., SEC. 205.             205   LRD...............  LRH...............        200
INDIAN CREEK, CEDAR RVR, CEDAR RAPIDS, IA...             205   MVD...............  MVR...............        408
IRONDEQUOIT CREEK, PENFIELD, NY.............             205   LRD...............  LRB...............  .........
JACKSON BROOK, MORRIS CITY, NJ..............             205   NAD...............  NAN...............        800
JAM UP CREEK, MOUNTAIN VIEW, MO.............             205   SWD...............  SWL...............        100
JEAN LAFITTE, FISHER SCHOOL BASIN, LA.......             205   MVD...............  MVN...............      1,851
JORDAN, MN..................................             205   MVD...............  MVP...............        243
KEOPU-HIENALOLI STREAM, ISLAND OF HAWAII, HI             205   POD...............  POH...............      6,110
KESHEQUA CREEK, NUNDA.......................             205   LRD...............  LRB...............  .........
KINGS POINT, WARREN COUNTY, MS..............             205   MVD...............  MVK...............        135
KNOX COUNTY, KELSO CREEK, IN................             205   LRD...............  LRL...............        302
KULIOUOU STREAM, OAHU, HI...................             205   POD...............  POH...............        397
LAC QUI PARLE RIVER, DAWSON, MN.............             205   MVD...............  MVP...............        869
LAFAYETTE PARISH, LA........................             205   MVD...............  MVN...............        800
LAMOTTE CREEK, PALESTINE, IL................             205   LRD...............  LRL...............         95
LEWIS CREEK, BULVERDE, TX...................             205   SWD...............  SWF...............        290
LINE CREEK, CHICKASHA, OK...................             205   SWD...............  SWT...............        350
LITTLE BRAZOS RIVER, TX.....................             205   SWD...............  SWF...............      3,500
LITTLE DUCK CREEK, OH.......................             205   LRD...............  LRL...............        350
LITTLE FOSSIL CREEK, HALTOM CITY, TX........             205   SWD...............  SWF...............      4,762
LITTLE RIVER DIVERSION, DUTCHTOWN, MO.......             205   MVD...............  MVM...............        709
LOCKPORT TO LA ROSE, LAFOURCHE PARISH, LA...             205   MVD...............  MVN...............      2,011
LONG HILL TOWNSHIP..........................             205   NAD...............  NAN...............      3,115
LOUISIANA, MO...............................             205   MVD...............  MVS...............        113
LOVINGTON, IL...............................             205   MVD...............  MVS...............        166
MACOMB COUNTY, MI...........................             205   LRD...............  LRE...............        361
MAD CREEK, MUSCATINE, IA....................             205   MVD...............  MVR...............      3,492
MAGAZINE BRANCH, ELK RIVER, CHARLESTON, WV..             205   LRD...............  LRH...............         75
MAGAZINE BRANCH, ELK RIVER, CHARLESTON, WV..             205   LRD...............  LRH...............        302
MAGPIE & DON JULIO CREEKS, SACRAMENTO,                   205   SPD...............  SPK...............      1,585
 CALIFORNIA.
MASCATATUCK RIVER LOG JAM, SCOTT CO, IN.....             205   LRD...............  LRL...............         40
MCKINNEY BAYOU, TUNICA COUNTY, MS...........             205   MVD...............  MVK...............      3,445
MEREDOSIA, IL...............................             205   MVD...............  MVS...............         87
MILL CREEK, GARFIELD HEIGHTS................             205   LRD...............  LRB...............  .........
MILLWOOD, GRASSY LAKE, AR, SECTION 1135.....             205   SWD...............  SWL...............          5
MINNESOTA RIVER, GRANITE FALLS, MN..........             205   MVD...............  MVP...............      6,578
MONTOURSVILLE, LYCOMING COUNTY, PA..........             205   NAD...............  NAB...............        600
MORRIS CREEK, KANAWHA AND FAYETTE COUNTIES,              205   LRD...............  LRH...............        200
 WV., SEC. 205.
MOYER CREEK, VILLAGE OF FRANKFURT, NY.......             205   NAD...............  NAN...............        890
NEWPORT, MN.................................             205   MVD...............  MVP...............      2,250
NORTH RIVER, PEABODY, MA....................             205   NAD...............  NAE...............        100
OAK CREEK FLORENCE CO BE710.................             205   SPD...............  SPA...............        500
ONONDAGA CREEK, SYRACUSE....................             205   LRD...............  LRB...............        100
PAILET BASIN, JEFFERSON PARISH, LA..........             205   MVD...............  MVN...............        300
PALAI STREAM, HAWAII, HI....................             205   POD...............  POH...............      4,859
PALAI STREAM, HAWAII, HI....................             205   POD...............  POH...............         62
PALO DURO, CANYON, TX (LOCAL FLOOD                       205   SWD...............  SWT...............        350
 PROTECTION PROJECT).
PECAN CREEK, GAINESVILLE, TX................             205   SWD...............  SWF...............      4,091
PLATTE RIVER, FREMONT, NE...................             205   NWD...............  NWO...............        190
PLATTE RIVER, SCHUYLER, NE..................             205   NWD...............  NWO...............        320
PLEASANT CREEK, GREENWOOD, IN...............             205   LRD...............  LRL...............        300
POST OAK CREEK, CORSICANA, TX...............             205   SWD...............  SWF...............        323
PRAIRIE CREEK, RUSSELLVILLE, AR.............             205   SWD...............  SWL...............        155
RANDOLPH, NE................................             205   NWD...............  NWO...............        224
RED DUCK CREEK, KY., NO. 205................             205   MVD...............  MVM...............        476
RED OAK, IOWA...............................             205   NWD...............  NWO...............        276
RICHLAND CREEK, NASHVILLE, TN...............             205   LRD...............  LRN...............        300
RIO CULEBRINAS-AG205........................             205   SAD...............  SAJ...............        230
RIO DESCALABRADO (205)......................             205   SAD...............  SAJ...............        216
RIO EL OJO DE AGUA, PR., BER................             205   SAD...............  SAJ...............      5,519
RIO GRANDE AND UNNAMED TRIBUTARY, EAGLE                  205   SWD...............  SWF...............        432
 PASS, TX.
RIO GUAMANI, GUAYANA, PR., BEGUM............             205   SAD...............  SAJ...............        200
RIO JACAQUAS, PR (205)......................             205   SAD...............  SAJ...............        300
RIO LOCO, GUANICA, PR.......................             205   SAD...............  SAJ...............        268
RIO OROCOVIS, PR (205)......................             205   SAD...............  SAJ...............        303
RIO PATILLAS, PR (205)......................             205   SAD...............  SAJ...............        185
ROCKFORD, MN................................             205   MVD...............  MVP...............        200
ROSETHORNE BASIN, JEAN LAFITTE, LA..........             205   MVD...............  MVN...............      2,000
ROSSVILLE, KS., SEC. 205....................             205   NWD...............  NWK...............        100
SALCHA FLOOD DAMAGE REDUCTION, SALCHA, AK...             205   POD...............  POA...............        150
SANDY CREEK, TN., NO. 205...................             205   MVD...............  MVM...............      8,130
SAUGATUCK RIVER, WESTPORT, CT...............             205   NAD...............  NAE...............         71
SCOTTS CREEK, SC., CAP 205..................             205   SAD...............  SAC...............        156
SEDGEWICK, KS, LITTLE ARK RIVER WATERSHED...             205   SWD...............  SWT...............        350
SIX MILE CREEK, ITHACA......................             205   LRD...............  LRB...............        100
SNOQUALMIE RIVER, WA (BESNQ)................             205   NWD...............  NWS...............         75
SOUTH SUBURBAN AREA OF CHICAGO, IL..........             205   LRD...............  LRC...............        300
ST. MARY'S RIVER, FORT WAYNE, IN............             205   LRD...............  LRE...............         50
STEELE CREEK, VILLAGE OF ILION, NY..........             205   NAD...............  NAN...............        500
STONY CREEK, ROCKY MOUNT, NC................             205   SAD...............  SAW...............         70
SUN VALLEY, EL PASO, TX.....................             205   SPD...............  SPA...............        265
TONGUE & YELLOWSTONE RVRS, MILES CITY, MT...             205   NWD...............  NWO...............        400
TOOKANY CREEK, CHURCH ROAD, PA..............             205   NAD...............  NAP...............      4,804
TOOKANY CREEK, GLENSIDE ROAD, PA............             205   NAD...............  NAP...............      4,828
TOWN BRANCH, CORSICANA, TX..................             205   SWD...............  SWF...............        268
TOWN BRANCH, NEWARK, AR.....................             205   SWD...............  SWL...............         50
TOWN OF CARENCRO, LAFAYETTE PARISH, LA......             205   MVD...............  MVN...............      6,000
TUSCARAWAS CO BEAVERDAM CREEK...............             205   LRD...............  LRH...............        200
VILLAGE OF RUSSELLS POINT, LOGAN CO.........             205   LRD...............  LRL...............        200
WAIAHOLE-WAIAKANE VALLEY, OAHU, HI..........             205   POD...............  POH...............        650
WAIAKEA STREAM, HAWAII, HI..................             205   POD...............  POH...............        666
WAILELE STREAM, OAHU, HI....................             205   POD...............  POH...............        961
WEST VIRGINIA STATEWIDE FLOOD WARNING SYSTEM             205   LRD...............  LRH...............      2,015
WHITE RIVER, ANDERSON, IN...................             205   LRD...............  LRL...............        340
WHITE SLOUGH BE608..........................             205   SPD...............  SPN...............      1,648
WHITEWATER RIVER, AUGUSTA, KS...............             205   SWD...............  SWT...............        380
WILD RICE & MARSH RIVERS, ADA, MN...........             205   MVD...............  MVP...............      3,175
WILLIAMSTOWN, WV............................             205   LRD...............  LRH...............        300
WILLOWWOOD ADDITION, EDMOND, OK.............             205   SWD...............  SWT...............        270
WINNEBAGO RVR, MASON CITY, IA...............             205   MVD...............  MVR...............        225
WV RALEIGH CO., NORTH SAND BRANCH...........             205   LRD...............  LRH...............        100
WYNNE, AR NO. 205...........................             205   MVD...............  MVM...............      1,125
ZIMBER DITCH, STARK CO, OH..................             205   LRD...............  LRH...............        350
AQUATIC ECOSYSTEM RESTORATION FOR ROSE BAY,              206   SAD...............  SAJ...............      4,362
 VOLUISIA CO., FL.
ARKANSAS RIVER FISHERIES HABITAT                         206   SPD...............  SPA...............         25
 RESTORATION, PUEBLO, CO.
BOTTOMLESS LAKE STATE PARK, NM..............             206   SPD...............  SPA...............      1,452
CLEAR LAKE, IA..............................             206   MVD...............  MVR...............          2
CONFLUENCE POINT STATE PARK, MO.............             206   MVD...............  MVS...............        186
EUGENE DELTA PONDS, OR......................             206   NWD...............  NWP...............      1,485
GOOSE CREEK, CO.............................             206   NWD...............  NWO...............         27
JACKSON CREEK, GWINETT CO., GA..............             206   SAD...............  SAS...............        600
LYNCHES RIVER, LAKE CITY, SC................             206   SAD...............  SAC...............        350
ORLAND PARK, IL.............................             206   LRD...............  LRC...............      2,800
ST. HELEN-NAPA RIVER RESTORATION............             206   SPD...............  SPN...............        150
STORM LAKE, IA..............................             206   MVD...............  MVR...............         10
WWTP, STEPHENVILLE, TX......................             206   SWD...............  SWF...............      1,508
5TH AVE DAM REMOVAL, COLUMBUS, OH...........             206   LRD...............  LRH...............      2,250
ALLATOONA CREEK, COBB CO., GA...............             206   SAD...............  SAM...............        300
ALLEN CREEK, HALL CNTY, GA..................             206   SAD...............  SAS...............        275
ARCOLA CREEK, MADISON, OH...................             206   LRD...............  LRB...............        600
ARKANSAS RIVER, ARK CITY, KS................             206   SWD...............  SWT...............      1,120
ARROWHEAD CREEK AT WILSONVILLE, OR..........             206   NWD...............  NWP...............      1,313
ARROYO LAS POSITAS, CA......................             206   SPD...............  SPN...............        161
BAYOU GROSSE TETE RESTORATION, IBERVILLE                 206   MVD...............  MVN...............        125
 PARISH, LA.
BEARGRASS CREEK, LOUISVILLE, KY., WETLANDS &             206   LRD...............  LRL...............        350
 REPARIAN RESTORATION.
BEAVER RUIN CREEK, GWINETT CO., GA..........             206   SAD...............  SAS...............        345
BELLE ISLE PIERS, DETROIT, MI...............             206   LRD...............  LRE...............         50
BELLE ISLE STATE PARK, LANCASTER COUNTY, VA.             206   NAD...............  NAO...............        754
BIG COTTON INDIAN CREEK, GA.................             206   SAD...............  SAS...............        275
BIG FISHWIER CREEK, FL......................             206   SAD...............  SAJ...............        163
BIRD ISLAND RESTORATION, MARION, MA.........             206   NAD...............  NAE...............      2,270
BLACK LAKE ECOSYSTEM RESTORATION............             206   POD...............  POA...............      3,460
BLACK LAKE ECOSYSTEM RESTORATION............             206   POD...............  POA...............      3,460
BLOOMINGTON, IN, WETLANDS DEVELOPMENT.......             206   LRD...............  LRL...............        150
BLUE HOLE LAKE, NM..........................             206   SPD...............  SPA...............        224
BLUE RIVER, CO (SEC. 206)...................             206   SPD...............  SPK...............        213
BOOTHEEL CREEK, FL..........................             206   SAD...............  SAJ...............        200
BOQUERON REFUGE, PR.........................             206   SAD...............  SAJ...............        345
BRIGHTWOOD LAKE, CONCORD....................             206   LRD...............  LRB...............        100
BROWNSVILLE BRANCH, LONOKE CO, AR...........             206   MVD...............  MVM...............        239
BRUSH NECK COVE, WARWICK, RI................             206   NAD...............  NAE...............        180
BUTLER CREEK, GA............................             206   SAD...............  SAM...............      3,700
C-1 REDIVERSION/LAGOON RESTORATION, BREVARD              206   SAD...............  SAJ...............        200
 COUNTY, FL.
CABIN CREEK, SPALDING CNTY..................             206   SAD...............  SAS...............        275
CABIN CREEK, WEST VIRGINIA..................             206   LRD...............  LRH...............        213
CAMP CREEK, ZUMWALT PRAIRIE PRESERVE, OR....             206   NWD...............  NWW...............        531
CANOA RANCH AQUATIC RESTORATION, AZ.........             206   SPD...............  SPL...............        362
CANONSBURG LAKE, PA.........................             206   LRD...............  LRP...............        300
CARPENTER CREEK, WASHINGTON.................             206   NWD...............  NWS...............      1,754
CARPINTERIA CREEK PARK, CA..................             206   SPD...............  SPL...............        140
CARSON RIVER CITY, NV.......................             206   SPD...............  SPK...............        500
CASS RIVER, CITY OF VASSAR, MI..............             206   LRD...............  LRE...............         73
CEDAR LAKE, IN..............................             206   LRD...............  LRC...............      7,560
CHAPEL BRANCH, SC...........................             206   SAD...............  SAC...............        340
CHAPEL BRANCH, SC...........................             206   SAD...............  SAC...............        167
CHARITON RIVER/RATHBUN LAKE WATERSHED, IA...             206   NWD...............  NWK...............      4,171
CHATTACHOOCHIE RIVER DAM REMOVAL, GA........             206   SAD...............  SAM...............      2,000
CHENANGO LAKE, NY...........................             206   NAD...............  NAB...............        200
CHEROKEE CREEK AQUATIC ECOSYSTEM                         206   SWD...............  SWT...............        195
 RESTORATION, OK.
CHINO CREEK, CA.............................             206   SPD...............  SPL...............        292
CHIPPOKES STATE PARK, SURRY COUNTY, VA......             206   NAD...............  NAO...............      1,177
CHRISTINE AND HICKSON DAMS..................             206   MVD...............  MVP...............        230
CIENEGA CREEK AQUATIC RESTORATION, AZ.......             206   SPD...............  SPL...............        100
CITY CREEK, UT..............................             206   SPD...............  SPK...............        225
CITY CREEK, UT..............................             206   SPD...............  SPK...............        145
CLEAR LAKE, IA..............................             206   MVD...............  MVR...............      2,467
CLEARWATER LAKE, GOGEBIC COUNTY, MI.........             206   LRD...............  LRE...............         75
CODORUS CREEK, PA...........................             206   NAD...............  NAB...............      1,200
COFFEE LAKE AT WILSONVILLE, OR..............             206   NWD...............  NWP...............        250
CONCORD STREAMS RESTORTION, CONCORD, NC.....             206   SAD...............  SAW...............      1,030
CONCORDIA UNIVERSITY, WI....................             206   LRD...............  LRE...............        341
CONFLUENCE GREENWAY.........................             206   MVD...............  MVS...............        244
COTTONWOOD CREEK, ARLINGTON, TX.............             206   SWD...............  SWF...............        150
CROW CREEK AQUATIC ECOSYSTEM RESTORATION,                206   SWD...............  SWT...............        195
 TULSA, OK.
CRUTCHO CREEK, OKLAHOMA COUNTY, OK.,                     206   SWD...............  SWT...............        250
 (ECOSYSTEM RESTORATION PR).
CUYAHOGA RIVER STREAM PROJECT, AKRON, OH....             206   LRD...............  LRB...............         40
DAVIS LAKE RESTORATION......................             206   SAD...............  SAJ...............        300
DEEP RUN/TIBER HUDSON, MD...................             206   NAD...............  NAB...............        400
DENTS RUN, MD...............................             206   NAD...............  NAB...............      1,500
DETROIT RIVER, CITY OF TRENTON, MI..........             206   LRD...............  LRE...............        325
DOWAGIAC RIVER, CASSOPOLIS, MI..............             206   LRD...............  LRE...............        909
DRAYTON DAM.................................             206   MVD...............  MVP...............        300
DRY BRANCH CK, CITY OF LAWRENCE, MARION, CO.             206   LRD...............  LRL...............        100
DUCK CREEK/FAIRMOUNT PARK WETLAND RESTOR                 206   MVD...............  MVR...............        516
 SCOTT COUNTY, IA.
DUCK CREEK/FAIRMOUNT PARK WETLAND RESTOR                 206   MVD...............  MVR...............         78
 SCOTT COUNTY, IA.
EAST FORK WHITE RIVER, COLUMBUS, IN.........             206   LRD...............  LRL...............         80
EKLUTNA, AK.................................             206   POD...............  POA...............        200
EL PASO, RIO BOSQUE WETLANDS RESTORATION, TX             206   SPD...............  SPA...............        175
ELIZ RIVER, GRANDY VILLAGE, NORFOLK, VA.....             206   NAD...............  NAO...............        956
ELIZ RIVER, OLD DOMINION UNI DRAINAGE CANAL,             206   NAD...............  NAO...............        195
 NORFOLK, VA.
ELIZ RIVER, SCUFFLETOWN CREEK, CHESAPEAKE,               206   NAD...............  NAO...............        101
 VA.
ELIZ RIVER, WOODSTOCK PARK, VIRGINIA BEACH,              206   NAD...............  NAO...............        621
 VA.
EMIQUON FLOODPLAIN RESTORATION..............             206   MVD...............  MVR...............      4,644
ENGLISH CREEK...............................             206   SPD...............  SPL...............      1,122
EUGENE FIELD, IL............................             206   LRD...............  LRC...............        600
FAIRMOUNT PARK AQUATIC ECOSYSTEM                         206   SPD...............  SPL...............        297
 RESTORATION, CA.
FALL BROOK, PA..............................             206   NAD...............  NAB...............        500
FALLS RUN, WHEELING CREEK, BELMONT, OH......             206   LRD...............  LRP...............        119
FILBIN CREEK, SC............................             206   SAD...............  SAC...............        257
FOREST PARK, ST. LOUIS, MO..................             206   MVD...............  MVS...............        225
FOX RIVER/TICHIGAN LAKE, WATERFORD, WI......             206   LRD...............  LRE...............         75
FREEBORN COUNTY ECOSYSTEM RESTORATION, MN...             206   MVD...............  MVR...............        214
FREEMAN LAKE WILDLIFE REFUGE, ELIZABETHTOWN,             206   LRD...............  LRL...............        181
 KY.
GALLA CREEK, AR.............................             206   SWD...............  SWL...............        793
GALVESTON COUNTY MUD 12 EXOSYSTEM                        206   SWD...............  SWG...............        200
 RESTORATION.
GIWW-MAD ISLAND MARSH, TX...................             206   SWD...............  SWG...............      4,950
GOOSE POND/MIAMI OXBOW......................             206   LRD...............  LRL...............         98
GRAND (NEOSHO) RIVER ABOVE MIAMI, OK........             206   SWD...............  SWT...............        206
GRAND MARAIS RIVER, RLWSD...................             206   MVD...............  MVP...............      1,285
GRAND MARAIS RIVER, RLWSD...................             206   MVD...............  MVP...............        200
GRASS LAKE, FOX RIVER, IL...................             206   LRD...............  LRC...............      1,435
GREEN RIVER, UT.............................             206   SPD...............  SPK...............        100
GREENBURY POINT, MD.........................             206   NAD...............  NAB...............        700
GROVER'S MILL POND, TWP OF WINDSOR, MERCER               206   NAD...............  NAP...............        800
 COUNTY, NJ.
GUM THICKET CREEK, NC.......................             206   SAD...............  SAW...............        155
HAY CREEK, ROSEAU COUNTY, MN................             206   MVD...............  MVP...............      3,666
HERON HAVEN, NE.............................             206   NWD...............  NWO...............        459
HIGGINS LAKE, MI............................             206   LRD...............  LRE...............         75
HOCKING RIVER WETLANDS, LANCASTER, OH.......             206   LRD...............  LRH...............        662
HOCKING RIVER WETLANDS, LANCASTER, OH.......             206   LRD...............  LRH...............        264
HOFFMAN DAM, IL.............................             206   LRD...............  LRC...............      5,522
HOGAN'S CREEK, FL...........................             206   SAD...............  SAJ...............        200
HOMER LAKE, ST. JOSEPH RIVER................             206   LRD...............  LRE...............        469
HORICON MARSH, WI...........................             206   MVD...............  MVR...............        300
HORSESHOE LAKE RESTORATION, ALEXANDER                    206   MVD...............  MVS...............      2,193
 COUNTY, IL.
HORSESHOE LAKE RESTORATION, ALEXANDER                    206   MVD...............  MVS...............         10
 COUNTY, IL.
HOUGHTON LAKE, ROSCOMMON CO, MI.............             206   LRD...............  LRE...............        517
HUFF RUN, BELDON SITE, OH...................             206   LRD...............  LRH...............        734
HUFF RUN, BELDON SITE, OH...................             206   LRD...............  LRH...............        309
HUNTSVILLE SPRING BRANCH, HUNTSVILLE, AL....             206   LRD...............  LRN...............        800
HURON RIVER, ROCKWOOD, MI...................             206   LRD...............  LRE...............         75
IA RVR/CLEAR CREEK, JOHNSON COUNTY, IA......             206   MVD...............  MVR...............      1,580
IA RVR/CLEAR CREEK, JOHNSON COUNTY, IA......             206   MVD...............  MVR...............         80
INCLINE & 3RD CREEKS, NV....................             206   SPD...............  SPK...............        400
INDIAN CREEK ECOSYSTEM RESTORATION,                      206   NWD...............  NWW...............      3,664
 CALDWELL, ID.
ISSAQUAH CREEK, WA..........................             206   NWD...............  NWS...............        709
JACKSON FISH PASSAGE PROJECT................             206   MVD...............  MVR...............         83
JANES-WALLACE MEMORIAL DAM, SANTA ROSA, NM..             206   SPD...............  SPA...............        200
JOHNSON CREEK/SPRINGWATER, OR...............             206   NWD...............  NWP...............        608
JOHNSON POND, LYNDONVILLE, NY...............             206   LRD...............  LRB...............        279
JONESBOROUGH (206), TN......................             206   LRD...............  LRN...............        215
KANKAKEE, KANKAKEE COUNTY, IL...............             206   MVD...............  MVR...............        196
KELLOGG CREEK, OR...........................             206   NWD...............  NWP...............        357
KETTLE MORAINE WET PRAIRIE RESTORATION, WI..             206   MVD...............  MVR...............        300
KEYSTONE HERITAGE PARK WETLAND RESTORATION,              206   SPD...............  SPA...............        200
 EL PASO, TX.
KICKAPOO CREEK, CONCHO RIVER, UPPER COLORADO             206   SWD...............  SWF...............        242
 RIVER BASIN, TX.
KINNICKINNIC RIVER, WI......................             206   MVD...............  MVP...............        200
KINNICKINNIC RIVER, WI......................             206   MVD...............  MVP...............         50
KOONTZ LAKE, IN (SEC. 206)..................             206   LRD...............  LRE...............      6,302
LA STATE PEN, LAKE KILLARNEY RESTORATION, W              206   MVD...............  MVN...............      1,600
 FELICIANA PAR, LA.
LAKE ANNA, LOUISA, ORANGE AND SPOTSYLVANIA               206   NAD...............  NAO...............        347
 COUNTIES, VA.
LAKE AUSTIN ECOSYSTEM RESTORATION, AUSTIN,               206   SWD...............  SWF...............        170
 TX.
LAKE BELLE VIEW AQUATIC ECOSYSTEM                        206   MVD...............  MVR...............      3,798
 RESTORATION, WI.
LAKE CONNESTEE, SC..........................             206   SAD...............  SAC...............        115
LAKE CONNESTEE, SC..........................             206   SAD...............  SAC...............         27
LAKE CYPRESS SPRINGS, FRANKLIN COUNTY, TX...             206   SWD...............  SWF...............        175
LAKE LOU YAEGER RESTORATION, IL.............             206   MVD...............  MVS...............        175
LAKE MAUVAISTERRE, JACKSONVILLE, IL.........             206   MVD...............  MVS...............        202
LAKE NATOMA, CA.............................             206   SPD...............  SPK...............        437
LAKE TSALA APOPKA...........................             206   SAD...............  SAJ...............          6
LAKE VERRET RESTORATION, ASSUMPTION PARISH,              206   MVD...............  MVN...............        706
 LA.
LEMAY WETLAND RESTORATION (SECTION 206).....             206   MVD...............  MVS...............         66
LEXINGTON ROAD PARK GREENWAY--JEFFERSON                  206   LRD...............  LRL...............         84
 COUNTY.
LICKING RIVER DAM REMOVAL, FALMOUTH, KY.....             206   LRD...............  LRL...............        100
LITTLE CUYAHOGA RIVER, AKRON, OH............             206   LRD...............  LRB...............         60
LITTLE RIVER WATERSHED, HALL COUNTY, GA.....             206   SAD...............  SAM...............      3,918
LOCKPORT PRAIRIE NATURE PRESERVE, WILL                   206   LRD...............  LRC...............      1,171
 COUNTY.
LONG LAKE, IN...............................             206   LRD...............  LRC...............        900
LOWER BLACKSTONE RIVER, RI..................             206   NAD...............  NAE...............        150
LOWER BOULDER CREEK, CO.....................             206   NWD...............  NWO...............        811
LOWER HEMPSTEAD HARBOR, VILLAGE OF SEA                   206   NAD...............  NAN...............        500
 CLIFF, NY.
LOWER MENOMONEE RIVER VALLEY, MILWAUKEE, WI.             206   LRD...............  LRE...............         75
LOWER TRUCKEE RIVER, PAIUTE.................             206   SPD...............  SPK...............        100
LOWER WHITE ROCK CRK, DALLAS, TX............             206   SWD...............  SWF...............        250
LYNCHES RIVER, LAKE CITY, SC................             206   SAD...............  SAC...............      1,250
MALDEN RIVER ECOSYSTEM, MA..................             206   NAD...............  NAE...............         81
MALLETT'S CREEK, WASHTENAW COUNTY, MI.......             206   LRD...............  LRE...............        388
MANHAN DAM, EASTHAMPTON, MA.................             206   NAD...............  NAE...............        410
MANHASSET BAY, TOWN OF NORTH HEMPSTEAD, NY.,             206   NAD...............  NAN...............        350
 ECOSYSTEM RESTORATION.
MARION MILL POND, VILLAGE OF MARION, OSCEOLA             206   LRD...............  LRE...............        414
 COUNTY, MI.
MARYVILLE, TN...............................             206   LRD...............  LRN...............        275
MENOMONEE, WI...............................             206   LRD...............  LRE...............        150
MENTOR MARSH................................             206   LRD...............  LRB...............        100
MILFORD POND, MILFORD, MA...................             206   NAD...............  NAE...............      4,300
MILL CREEK ECOSYSTEM RESTORATION............             206   SAD...............  SAW...............         25
MILL CREEK RESTORATION AT MOREA, SCHUYLKILL              206   NAD...............  NAP...............        215
 COUNTY, PA.
MILL POND RESTORATION, NASHUA, NH...........             206   NAD...............  NAE...............        150
MILL POND, LITTLETON, MA....................             206   NAD...............  NAE...............        100
MILL RIVER, STAMFORD, CT....................             206   NAD...............  NAE...............      2,988
MINERAL BAYOU, DURANT, OK...................             206   SWD...............  SWT...............        133
MISSION CREEK, CA...........................             206   SPD...............  SPL...............        406
MISSOURI STREAM RESTORATION, MO.............             206   NWD...............  NWK...............        100
MOKUHINIA/MOKUULA ECOSYSTEM RESTORATION,                 206   POD...............  POH...............      1,356
 MAUI, HI.
MONGAUP WATERSHED ENVIRON. RESTORTION,                   206   NAD...............  NAP...............        165
 LIBERTY, SULLIVAN, NY.
MOSES LAKE ECOSYSTEM RESTORATION, TEXAS                  206   SWD...............  SWG...............         30
 CITY, TX.
MUD CREEK, GREAT SOUTH BAY, PATCHOGUE, NY...             206   NAD...............  NAN...............        250
MULBERRY PLANTATION, SC.....................             206   SAD...............  SAC...............        197
NANTICOKE CREEK, LUZERNE COUNTY, PA.........             206   NAD...............  NAB...............        830
NARROWS RIVER, NARRAGANSETT, RI.............             206   NAD...............  NAE...............        180
NASHAWANNUCK POND, EASTHAMPTON, MA..........             206   NAD...............  NAE...............        715
NC OYSTER RESTORATION, NC...................             206   SAD...............  SAW...............        130
NEPONSET RIVER, BOSTON, MA..................             206   NAD...............  NAE...............        200
NFTA OUTER HARBOR...........................             206   LRD...............  LRB...............        100
NINIGRET & CROSS MILLS PONDS, CHARLESTOWN,               206   NAD...............  NAE...............        800
 RI.
NIPPERSINK CREEK............................             206   LRD...............  LRC...............        750
NOISETTE CREEK, SC..........................             206   SAD...............  SAC...............        194
NORTH BEACH, MD.............................             206   NAD...............  NAB...............        600
NORTH FORK GUNNISON, CO (206)...............             206   SPD...............  SPK...............      3,725
NORTH OTTAWA, MN............................             206   MVD...............  MVP...............      4,597
NORTH OTTAWA, MN............................             206   MVD...............  MVP...............        100
NORTH PARK, ALLEGHENY COUNTY................             206   LRD...............  LRP...............      3,272
NORTH SATUS DRAIN, YAKIMA, WA...............             206   NWD...............  NWS...............        135
NORTHWEST BRANCH, ANACOSTIA RIVER, MD.......             206   NAD...............  NAB...............      2,500
OAKS BOTTOM, OR.............................             206   NWD...............  NWP...............        103
OHIO RIVER GARVIN BROWN NATURE PRESERVE,                 206   LRD...............  LRL...............        302
 JEFFERSON COUNTY, K.
OHIO RIVER, HAYS KENNEDY PARK, LOUISVILLE,               206   LRD...............  LRL...............        100
 KY.
OLMOS CREEK, RESTORATION, SAN ANTONIO, TX...             206   SWD...............  SWF...............        749
ORE KNOB, NC AQUATIC RESTORATION............             206   LRD...............  LRH...............        900
OSGOOD POND RESTORATION, MILFORD, NH........             206   NAD...............  NAE...............         65
OTSEGO LAKE, MI.............................             206   LRD...............  LRE...............         75
PAINT BRANCH FISH PASSAGE, MD...............             206   NAD...............  NAB...............        400
PAINTERS CREEK, MN..........................             206   MVD...............  MVP...............      2,787
PARADISE CREEK, CITY OF MOSCOW, ID..........             206   NWD...............  NWW...............      2,717
PAUL DOUGLAS WOODS, SOUTH BARRINGTON, IL....             206   LRD...............  LRC...............        597
PECK LAKE, GENEVA, IL.......................             206   LRD...............  LRC...............        475
PIGS EYE LAKE...............................             206   MVD...............  MVP...............        410
PITCHER LAKE OXBOW RESTORATION..............             206   LRD...............  LRL...............         99
POCOTALIGO RIVER AND SWAMP ECOSYSTEM                     206   SAD...............  SAC...............        494
 RESTORATION, SC.
PORT OF SUNNYSIDE, WA.......................             206   NWD...............  NWS...............      4,365
PORT OF SUNNYSIDE, WA.......................             206   NWD...............  NWS...............         68
POTASH BROOK, NY............................             206   NAD...............  NAN...............        500
QUINCY BAY, IL..............................             206   MVD...............  MVR...............        300
QUONOCHONTAUG POND, CHARLESTOWN, RI.........             206   NAD...............  NAE...............         70
RANSOM CREEK, AMHERST.......................             206   LRD...............  LRB...............        100
RED OAK CREEK TRIBUTARY, RED OAK, TX........             206   SWD...............  SWF...............        175
REEDY RIVER, SC.............................             206   SAD...............  SAC...............        674
REEDY RIVER, SC.............................             206   SAD...............  SAC...............        247
REEVES CREEK, CLAYTON CNTY..................             206   SAD...............  SAS...............        275
RINCON CREEK................................             206   SPD...............  SPL...............        393
RIO GRANDE, LAREDO, TX......................             206   SWD...............  SWF...............      2,277
RIO GRANDE, LAREDO, TX......................             206   SWD...............  SWF...............         61
ROSCOE'S CUT, MACINTOSH.....................             206   SAD...............  SAS...............        150
RUN POND COASTAL ECOSYSTEM RESTORATION, MA..             206   NAD...............  NAE...............        195
SALMON RIVER, CHALLIS, ID...................             206   NWD...............  NWW...............      3,315
SALT RIVER RESTORATON, CA...................             206   SPD...............  SPN...............        350
SAN MARCOS RIVER, SAN MARCOS, TX............             206   SWD...............  SWF...............        439
SAV HARBOR ECOSYSTEM RESTORATION............             206   SAD...............  SAS...............        275
SAXIS ISLAND, ACCOMACK COUNTY, VA...........             206   NAD...............  NAO...............      1,503
SAXMAN RUN..................................             206   LRD...............  LRP...............        188
SECORD AND SMALLWOOD LAKES, GLADWIN COUNTY,              206   LRD...............  LRE...............        381
 MI.
SHAMROCK LAKE, CITY OF CLARE, MI............             206   LRD...............  LRE...............         75
SHERADEN PARK & CHARTIERS CR, PA............             206   LRD...............  LRP...............        500
SHIREY BAY/RAINEY BRAKE WMA.................             206   SWD...............  SWL...............         50
SOUNDVIEW PARK, CITY OF BRONX, NY...........             206   NAD...............  NAN...............        400
SOUTH FORK NOOKSACK RIVER, WA...............             206   NWD...............  NWS...............         82
SOUTH NEWPORT RIVER 207.....................             206   SAD...............  SAS...............        300
SOUTH PARK LAKE.............................             206   LRD...............  LRB...............  .........
SOUTHAMPTON CREEK, ENVIRONMENTAL RESTORATION             206   NAD...............  NAP...............        139
SPRING CREEK, NY............................             206   NAD...............  NAN...............        350
SPRING LAKE, MI.............................             206   LRD...............  LRE...............         75
SPRING LAKE, SAN MARCOS, TX.................             206   SWD...............  SWF...............      1,241
SPRINGFIELD MILLRACE, OR....................             206   NWD...............  NWP...............      3,134
SQAW CREEK, IL..............................             206   LRD...............  LRC...............      2,947
SQUAK VALLEY PARK RESTORATION, WA...........             206   NWD...............  NWS...............        619
STEVENSON CREEK, CLEARWATER, FL.............             206   SAD...............  SAJ...............      2,867
STORM LAKE, IA..............................             206   MVD...............  MVR...............      2,172
SULPHUR CREEK AQUATIC RESTORATION, LAGUNA                206   SPD...............  SPL...............      1,200
 NIGUEL, CA.
SWEETWATER ECOSYSTEM RESTORATION, CA........             206   SPD...............  SPL...............      1,585
SWEETWATER ECOSYSTEM RESTORATION, CA........             206   SPD...............  SPL...............        285
SYRACUSE LAKEFRONT, ONONDAGA, NY............             206   LRD...............  LRB...............  .........
TAMARISK ERADICATION, CO....................             206   SPD...............  SPK...............        304
TEN MILE RIVER, RI..........................             206   NAD...............  NAE...............        935
THOMPSON CREEK RESTORATION..................             206   SPD...............  SPN...............        400
THREE CREEKS ENVIRONMENTAL RESTORATION, OH..             206   LRD...............  LRH...............        902
THREE CREEKS ENVIRONMENTAL RESTORATION, OH..             206   LRD...............  LRH...............        412
TIDAL MIDDLE BRANCH, MD.....................             206   NAD...............  NAB...............        500
TILLAMOOK BAY & ESTUARY, OR.................             206   NWD...............  NWP...............        150
TOLEDO BEND RESERVOIR, TX & LA..............             206   SWD...............  SWF...............        300
TREATS POND, COHASSET, MA...................             206   NAD...............  NAE...............        700
TURKEY CREEK REST., FL......................             206   SAD...............  SAJ...............        320
TURTLE BAY, CA..............................             206   SPD...............  SPK...............        250
UNDERWOOD CREEK, WAUWATOSA, WI..............             206   LRD...............  LRE...............        295
UNIVERSITY LAKES RESTORATION, EAST BATON                 206   MVD...............  MVN...............      1,000
 ROUGE PARISH, LA.
UPPER JORDAN RIVER ECOSYSTEM RESTORATION, UT             206   SPD...............  SPK...............      3,270
UPPER YORK CREEK DAM REMOVAL, CA............             206   SPD...............  SPN...............        550
VALLEY CREEK PARK WETLAND RESTORATION, EL                206   SPD...............  SPA...............        175
 PASO, TX.
VERMILLION RIVER ECOSYSTEM RESTORATION,                  206   MVD...............  MVN...............      1,000
 LAFAYETTE PARISH, LA.
WALNUT BRANCH, SEGUIN, TX (SEC. 206)........             206   SWD...............  SWF...............      1,488
WANAMAKER WETLANDS, KS......................             206   NWD...............  NWK...............        150
WATAUGA, NC, AQUATIC RESTORATION............             206   LRD...............  LRH...............      2,240
WATAUGA, NC, AQUATIC RESTORATION............             206   LRD...............  LRH...............        230
WATKINS CREEK, ST. LOUIS, MO................             206   MVD...............  MVS...............        200
WEBER RIVER, UT (SEC. 206)..................             206   SPD...............  SPK...............        100
WEST JORDAN RIVER, UT.......................             206   SPD...............  SPK...............        480
WEST JORDAN RIVER, UT.......................             206   SPD...............  SPK...............          7
WESTERN BRANCH, PATUXENT, MD................             206   NAD...............  NAB...............      1,200
WESTERN CARY STREAMS RESTORATION, CARY, NC..             206   SAD...............  SAW...............         30
WESTMORELAND PARK, OR.......................             206   NWD...............  NWP...............      1,661
WHITE SLOUGH WATER POLLUTION CONTROL                     206   SPD...............  SPK...............        200
 FACILITY, LODI, CA.
WHITEBREAST WATERSHED ECOSYSTEM RESTORATION,             206   MVD...............  MVR...............      3,945
 IA.
WHITEBREAST WATERSHED ECOSYSTEM RESTORATION,             206   MVD...............  MVR...............        121
 IA.
WILSON BAY RESTORATION, JACKSONVILLE, NC....             206   SAD...............  SAW...............      2,356
WILSON BRANCH, SC...........................             206   SAD...............  SAC...............         44
WILSON PARK CREEK, MILWAUKEE COUNTY, WI.....             206   LRD...............  LRE...............         75
WINDOM FISH PASSAGE, MN.....................             206   MVD...............  MVR...............        225
WINNAPAUG POND, WESTERLY, RI................             206   NAD...............  NAE...............      1,120
WISWALL DAM, DURHAM, NH.....................             206   NAD...............  NAE...............  .........
WOLF PEN CREEK, COLLEGE STATION, TX.........             206   SWD...............  SWF...............        300
WOOD CANYON AQUATIC RESTORATION, LAGUNA                  206   SPD...............  SPL...............        661
 NIGUEL, CA.
WOOD CANYON AQUATIC RESTORATION, LAGUNA                  206   SPD...............  SPL...............         50
 NIGUEL, CA.
WWTP, MERIDIAN, TX..........................             206   SWD...............  SWF...............        246
ZEMUARRY PARK LAKE RESTORATION, TANGIPAHOA               206   MVD...............  MVN...............        225
 PARISH, LA.
BLACKWELL LAKE, BLACKWELL, OK...............             208   SWD...............  SWT...............        310
DICKENSON COUNTY, VA., SEC. 208.............             208   LRD...............  LRH...............         60
ALLIN'S COVE, BARRINGTON, RI................            1135   NAD...............  NAE...............          5
BAYOU DESIARD, MONROE, LA...................            1135   MVD...............  MVK...............      1,707
BOYD'S SALT MARSH RESTORATION, RI...........            1135   NAD...............  NAE...............        203
DELAWARE BAY OYSTER RESTORATION, NJ.........            1135   NAD...............  NAP...............        783
ECOSYSTEM REVITALIZATION @ ROUTE 66.........            1135   SPD...............  SPA...............      3,637
KANAHA POND WILDLIFE SANCTUARY RESTORATION,             1135   POD...............  POH...............      1,690
 MAUI, HI.
LAKE ST. JOSEPH, TENSAS PARISH, LA..........            1135   MVD...............  MVK...............        142
LOWER KINGMAN ISLAND........................            1135   NAD...............  NAB...............        110
PRISON FARM SHORELINE HABITAT, ND...........            1135   NWD...............  NWO...............         74
RATHBUN LAKE HABITAT RESTORATION PROJECT, IA            1135   NWD...............  NWK...............        858
BENNINGTON LAKE DIVERSION DAM, WA...........            1135   NWD...............  NWW...............        338
BLOOMINGTON AREA RESTORATION, LONG BRANCH               1135   NWD...............  NWK...............         25
 LAKE, MO.
BLUE VALLEY WETLANDS, JACKSON CO., MO.......            1135   NWD...............  NWK...............         19
FERN RIDGE LAKE MARSH RESTORATION, OR.......            1135   NWD...............  NWP...............         30
GREEN RIVER DAM, OUTLET WORKS MODIFICATIONS,            1135   LRD...............  LRL...............        200
 KY.
LOWER COLUMBIA SLOUGH, OR...................            1135   NWD...............  NWP...............      1,605
STEEP BANK CREEK, FELSENTAL NWR, AR.........            1135   MVD...............  MVK...............         59
WALLA WALLA RIVER SECTION 1135, OR..........            1135   NWD...............  NWW...............        824
ACADEMY CREEK, HALL CNTY....................            1135   SAD...............  SAS...............        275
AGUA FRIA RIVER RIPARIAN RESTORATION........            1135   SPD...............  SPL...............         96
AMITE RIVER DIVERSION SPOIL BANK GAPPING,               1135   MVD...............  MVN...............        125
 LIVINGSTON PH, LA.
AQUATIC HABITAT RESTORATION @ PUBLO OF SANTA            1135   SPD...............  SPA...............        335
 ANA, NM.
ARK. RVR ENV REST, LK DARDANELLE,                       1135   SWD...............  SWL...............         10
 RUSSELLVILLE & FT. SMITH, AR.
ARKANSAS RIVER, GARDEN CITY, KS.............            1135   SWD...............  SWT...............        145
ASHLEY CREEK ECOSYSTEM RESTORATION, UT......            1135   SPD...............  SPK...............        259
ASSUNPINK CREEK, ENVIRONMENTAL RESTORATION..            1135   NAD...............  NAP...............      2,976
AUGRES RIVER, ARENAC COUNTY, MI.............            1135   LRD...............  LRE...............        284
BACK RIVER, CHATHAM COUNTY, GA..............            1135   SAD...............  SAS...............        275
BATTLE ISLAND, WI...........................            1135   MVD...............  MVP...............        530
BATTLE ISLAND, WI...........................            1135   MVD...............  MVP...............         50
BAYOU MACON, E&W CARROLL & FRANKLIN                     1135   MVD...............  MVK...............      2,647
 PARISHES, LA.
BAYOU MACON, LAKE VILLAGE, AR...............            1135   MVD...............  MVK...............        600
BELHAVEN HARBOR ENVIRON, NC.................            1135   SAD...............  SAW...............        170
BELLEVIEW WETLANDS, CO......................            1135   NWD...............  NWO...............        150
BIG LAKE ECOSYSTEM RESTORATION, OK..........            1135   SWD...............  SWT...............        408
BIG SUNFLOWER RIVER, CLARKSDALE, MS.........            1135   MVD...............  MVK...............        168
BLOOMINGTON AREA RESTORATION, LONG BRANCH               1135   NWD...............  NWK...............        150
 LAKE, MO.
BLUE VALLEY WETLANDS, JACKSON CO., MO.......            1135   NWD...............  NWK...............        941
BRAIDED REACH...............................            1135   NWD...............  NWS...............      4,765
BRAIDED REACH...............................            1135   NWD...............  NWS...............        256
BROAD MEADOWS MARSH RESTORATION, MA.........            1135   NAD...............  NAE...............      1,888
BUFFALO RIVER HABITAT.......................            1135   LRD...............  LRB...............  .........
BULL CREEK CHANNEL ECOSYSTEM RESTORATION, CA            1135   SPD...............  SPL...............      2,090
C-102/103 RESTORATION, DADE COUNTY, FL......            1135   SAD...............  SAJ...............        200
C-7 MIAMI-DADE, FL..........................            1135   SAD...............  SAJ...............        224
C-9, MIAMI-DADE, FL.........................            1135   SAD...............  SAJ...............        250
CALOOSAHATCHEE OXBO.........................            1135   SAD...............  SAJ...............        330
CANNON BRAKE/LOWER VALLIER, ARK & JEFFERSON             1135   MVD...............  MVK...............      1,157
 COUNTIES, AR.
CAYUGA LAKE INLET, ITHACA...................            1135   LRD...............  LRB...............        200
CDF NO. 3, OREGON, OH.......................            1135   LRD...............  LRB...............        100
CITY OF RICHLAND ECOSYSTEM RESTORATION, WA..            1135   NWD...............  NWW...............      1,327
CONNEAUT HARBOR, OH.........................            1135   LRD...............  LRB...............        225
CROCKERY CREEK LAMPREY BARRIER, MI..........            1135   LRD...............  LRE...............        100
CUCAMONGA AND DEER CREEK CHANNELS ECOSYSTEM             1135   SPD...............  SPL...............        152
 RESTORATION, CA.
DADE COUNTY, FL.............................            1135   SAD...............  SAJ...............        217
DILLON LAKE, OH., SECTION 1135..............            1135   LRD...............  LRH...............        900
DUCK CREEK, STODDARD COUNTY, MO.............            1135   MVD...............  MVM...............      3,243
DUMP LAKE, YAZOO COUNTY, MS.................            1135   MVD...............  MVK...............        116
EAGLELAND HABITAT RESTORATION, SAN ANTONIO,             1135   SWD...............  SWF...............        328
 TX.
EAST HARBOR STATE PARK, WEST HARBOR, OH.....            1135   LRD...............  LRB...............         96
ESTRAL BEACH, NEWPORT, MI...................            1135   LRD...............  LRE...............         75
FAIRMOUNT DAM, PA...........................            1135   NAD...............  NAP...............      1,452
FLINT RIVER AND SWARTZ CREEK, FLINT, MI.....            1135   LRD...............  LRE...............        390
FRAZIER/WHITEHORSE OXBOW LAKE WEIR, LA......            1135   MVD...............  MVK...............      1,269
GERRITESEN CREEK, BROOKLYN, NY..............            1135   NAD...............  NAN...............      3,700
GULL POINT, PRESQUE ISLE, ERIE, PA..........            1135   LRD...............  LRB...............  .........
HNC MILE 12-31.4 RESTORATION, TERREBONNE                1135   MVD...............  MVN...............      2,500
 PARISH, LA.
HOOSIC RIVER, TOWN OF ADAMS, MA.............            1135   NAD...............  NAN...............        400
HOVEY LAKE WILDLIFE AREA HABITAT                        1135   LRD...............  LRL...............        480
 DEVELOPMENT, IN.
HOYT LAKE--SCAJAQUADA CREEK, BUFFALO, NY....            1135   LRD...............  LRB...............        100
INDIAN RIDGE MARSH, CHICAGO, IL.............            1135   LRD...............  LRC...............      1,244
JOE CREEK HABITAT RESTORATION, TULSA, OK....            1135   SWD...............  SWT...............      3,775
JOPPA PRESERVE RESTORATION, TX..............            1135   SWD...............  SWF...............      3,905
KALAMAZOO RIVER, BATTLE CREEK, MI...........            1135   LRD...............  LRE...............        409
KAUNAKAKAI STREAM ENVIRONMENTAL RESTORATION,            1135   POD...............  POH...............        342
 MOLOKAI, HI.
KAWAINUI MARSH ENVIRONMENTAL RESTORATION,               1135   POD...............  POH...............      4,034
 OAHU, HI.
KEITH LAKE FISH PASS, JEFFERSON COUNTY, TX..            1135   SWD...............  SWG...............        200
KIDS CREEK, TRAVERSE CITY, MI...............            1135   LRD...............  LRE...............         50
LAKE CHAMPLAIN SEA LAMPREY BARRIERS.........            1135   NAD...............  NAN...............        200
LAKE FAUSSE POINT ECOSYSTEM RESTORATION, ST.            1135   MVD...............  MVN...............        250
 MARY PARISH, LA.
LAKE GEORGE RESTORATION, YAZOO COUNTY, MS...            1135   MVD...............  MVK...............      1,160
LAKE JESSUP.................................            1135   SAD...............  SAJ...............      2,862
LAKE POYGAN, WI.............................            1135   LRD...............  LRE...............        627
LAKE ST. JOSEPH, TENSAS PARISH, LA..........            1135   MVD...............  MVK...............      3,329
LAS CRUCES DAM ENVIRONMENTAL RESTORATION,               1135   SPD...............  SPA...............        450
 DONA ANA COUNTY, NM.
LEWISVILLE LAKE, FRISCO, TX.................            1135   SWD...............  SWF...............      1,430
LONG BRANCH LAKE ECOSYSTEM RESTORATION......            1135   NWD...............  NWK...............        174
LONGWOOD COVE WETLANDS, GAINESVILLE, GA.....            1135   SAD...............  SAM...............      2,250
LOWER CACHE RIVER, AR., 1135................            1135   MVD...............  MVM...............        750
LOWER DECATUR BEND, NE., IA.................            1135   NWD...............  NWO...............      2,392
LOWER DEER CREEK, MS........................            1135   MVD...............  MVK...............        171
LOWER OBION RIVER & VICINITY, DYER COUNTY,              1135   MVD...............  MVM...............      2,709
 TN.
LOWER ROUGE, ROTUNDA DR. AND I-94, MI.......            1135   LRD...............  LRE...............      2,710
MANISTEE RIVER LAMPREY BARRIER, MI..........            1135   LRD...............  LRE...............        100
MAPES CREEK, WA.............................            1135   NWD...............  NWS...............      1,961
MARK TWAIN LAKE FISH HABITAT, MO............            1135   MVD...............  MVS...............        150
MILLWOOD, GRASSY LAKE, AR., SECTION 1135....            1135   SWD...............  SWL...............         50
MONROE LAKE, IN, MOIST SOIL UNITS...........            1135   LRD...............  LRL...............        100
MORDECAI ISLAND COASTAL WETLANDS, NJ........            1135   NAD...............  NAP...............        750
MORGANZA FOREBAY RESTORATION, POINTE COUPEE             1135   MVD...............  MVN...............        225
 PH, LA.
MT. ETNA/MT. HOPE WETLANDS, SALAMONIE LAKE,             1135   LRD...............  LRL...............        142
 IN.
MURPHY SLOUGH, CA...........................            1135   SPD...............  SPK...............        291
NB PENTWATER RIVER LAMPREY TRAP, MI.........            1135   LRD...............  LRE...............        100
NFTA OUTER HARBOR...........................            1135   LRD...............  LRB...............        100
NMLC, BUZZARD BAY, MA.......................            1135   NAD...............  NAE...............        430
NORFORK TAILWATER RESTORATION, AR...........            1135   SWD...............  SWL...............         50
NORTH NASHUA RIVER, FITCHBURG, MA...........            1135   NAD...............  NAE...............        110
NORTHPORT HARBOR, TOWN OF HUNTINGTON, NY....            1135   NAD...............  NAN...............        350
O.C. FISHER LAKE ECOSYSTEM RESTORATION, TX..            1135   SWD...............  SWF...............      3,791
OLD MAIN STEM TRINITY ECOSYSTEM RESTORATION,            1135   SWD...............  SWF...............        175
 DALLAS, TX.
OLD RIVER NORTH, CONCORDIA PARISH, LA.......            1135   MVD...............  MVK...............        175
OLD TRINITY RIVER CHANNEL WILDLIFE                      1135   SWD...............  SWF...............      1,949
 RESTORATION, DALLES, TX.
PALM RIVER RESORATION.......................            1135   SAD...............  SAJ...............        356
PINE MOUNT CREEK............................            1135   NAD...............  NAP...............      2,900
PONCE DE LEON AIWW..........................            1135   SAD...............  SAJ...............        109
POND CREEK, NJ..............................            1135   NAD...............  NAP...............        750
RAHWAY RIVER, CITY OF RAHWAY, NJ............            1135   NAD...............  NAN...............        300
RATHBUN SHORELINE SITE RESTORATION APPANOOSE            1135   NWD...............  NWK...............        412
 & MONROE CO., IA.
RESTORATION OF GRASS DALE, DE...............            1135   NAD...............  NAP...............      1,012
ROCHESTER HARBOR NAVIGATION CHANNEL, NY.....            1135   LRD...............  LRB...............  .........
ROCK CREEK @ BOYLE PARK, LITTLE ROCK, AR....            1135   SWD...............  SWL...............        660
ROCK CREEK @ BOYLE PARK, LITTLE ROCK, AR....            1135   SWD...............  SWL...............        150
ROUGE RIVER OXBOW, WAYNE CO., MI............            1135   LRD...............  LRE...............        415
RUFFY BROOK AND CLEARWATER RIVER............            1135   MVD...............  MVP...............      1,054
SALT CEDAR INVASIVE SPECIES ERADICATION/                1135   NWD...............  NWK...............        125
 RESTORATION, NE.
SAND HILL RIVER.............................            1135   MVD...............  MVP...............        818
SARASOTA BAY RESTORATION, FL................            1135   SAD...............  SAJ...............        400
SCHMIDT CREEK, PRESQUE ISLE COUNTY, MI......            1135   LRD...............  LRE...............         50
SEA LAMPREY BARRIER, MANISTIQUE, MI.........            1135   LRD...............  LRE...............        349
SEA LAMPREY BARRIER, PAW PAW, MI............            1135   LRD...............  LRE...............        725
SHELBYVILLE WILDLIFE MANAGEMENT AREA                    1135   MVD...............  MVS...............      3,530
 RESTORATION, IL.
SHELDON'S MARSH, HURON/SANDUSKY, OH.........            1135   LRD...............  LRB...............        151
SHORTY'S ISLAND.............................            1135   NWD...............  NWS...............      4,365
SHORTY'S ISLAND.............................            1135   NWD...............  NWS...............        679
SMITHVILLE ACQUATIC PLANTINGS...............            1135   NWD...............  NWK...............        520
SMOKES CREEK, ERIE COUNTY, NY...............            1135   LRD...............  LRB...............        499
SPUNKY BOTTOMS ECOSYSTEM RESTORATION, IL....            1135   MVD...............  MVS...............         97
STEAMBOAT CREEK, WASHOE COUNTY, NV..........            1135   SPD...............  SPK...............        120
STEAMBOAT CREEK, WASHOE COUNTY, NV..........            1135   SPD...............  SPK...............        129
STEEP BANK CREEK, FELSENTAL NWR, AR.........            1135   MVD...............  MVK...............        739
SUCKER RIVER, ALGER COUNTY, MI..............            1135   LRD...............  LRE...............         87
TAPPAN LAKE, OH., SEC. 1135.................            1135   LRD...............  LRH...............        826
TAYLOR BAY, WOODRUFF COUNTY, AR.............            1135   SWD...............  SWL...............        124
TAYLORS BAYOU, PORT ARTHUR, TX..............            1135   SWD...............  SWG...............        370
TIMES BEACH ENVIRONMENTAL IMPROVEMENT,                  1135   LRD...............  LRB...............  .........
 BUFFALO, NY.
TRAIL CREEK, LAPORTE COUNTY, IN.............            1135   LRD...............  LRE...............         50
TUJUNGA WASH ENVIRONMENTAL RESTORATION, CA..            1135   SPD...............  SPL...............        500
UMBRELLA CREEK, CAMDEN CNTY.................            1135   SAD...............  SAS...............        200
UPPER DEER CREEK, MS. DELTA, MS.............            1135   MVD...............  MVK...............        161
UPPER ROUGE, MICHIGAN AVE. TO ROTUNDA DR.,              1135   LRD...............  LRE...............      2,710
 MI.
VIRGINIA BEACH KEY, FL (SEC. 1135)..........            1135   SAD...............  SAJ...............        300
WELLS LOCK AND DAM, ELIZABETH, WV...........            1135   LRD...............  LRH...............        250
WHITNEY POINT LAKE, NY......................            1135   NAD...............  NAB...............      4,300
WHITTIER NARROWS NATURE CENTER & WILDLIFE               1135   SPD...............  SPL...............      1,559
 REFUGE RESTORATION.
WHITTIER NARROWS NATURE CENTER & WILDLIFE               1135   SPD...............  SPL...............        270
 REFUGE RESTORATION.
WILLS CREEK, MASON MINE 280, OH.............            1135   LRD...............  LRH...............      1,150
WILLS CREEK, MASON MINE 280, OH.............            1135   LRD...............  LRH...............         50
WOOD DUCK MARSH, IA.........................            1135   NWD...............  NWK...............        100
WOODSON BRIDGE, CA (SEC. 1135)..............            1135   SPD...............  SPK...............        300
WOODSON BRIDGE, CA (SEC. 1135)..............            1135   SPD...............  SPK...............        150
----------------------------------------------------------------------------------------------------------------

    Additional information in the form of Budget Justification Sheets 
is posted at: http://www.usace.army.mil/cw/cecwb/just_states/
just_states.html
    The CAP projects approved for fiscal year 2008 budgeting are listed 
under the FDR, NAV, and ENV business line sections in the 
justifications.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici

                       REBUILDING THE GULF COAST

    Question. General Strock, can you please provide an update on the 
progress the Corps making with regard to levee improvements, canal 
upgrades and increased pumping capacity in New Orleans?
    Answer. Sir, we are making steady progress on the environmental 
assessments, designs and initiation of levees and floodwall 
improvements throughout the Greater New Orleans area. For the hurricane 
protection system we have awarded 34 construction contracts to date for 
levees and floodwalls, and pump station repairs. We are prepared to 
award 30 more contracts within the next 60 days subject to favorable 
bids and availability of funds.
    We have completed construction of temporary gates on the outfall 
canals at Lake Pontchartrain which provide protection from hurricane 
surge. These temporary gates provide protection to the canals beginning 
this hurricane season.
    The previously installed pumps at the three outfall canals are 
being modified to achieve their full design capacity. All pumps will be 
modified, reinstalled and tested by June 1. By 1 June with the addition 
of portable pumps at 17th Street Canal, we will achieve a capacity of 
5,200 cubic feet per second at 17th Street Canal, 2,200 cubic feet per 
second at Orleans Canal, and 2,800 cubic feet per second at London 
Avenue Canal.
    Work is underway to install additional pumps at 17th Street Canal 
and London Avenue Canal. By mid-August we will achieve pumping capacity 
of 7,600 cubic feet per second at 17th Street Canal and 5,000 cubic 
feet per second at London Avenue canal.
    Question. Can you also address the issue of poor quality control by 
contractors supporting the rebuilding effort?
    Answer. Sir, any allegation of poor quality control is taken very 
seriously and immediately addressed by the Corps. For the rebuilding 
effort we have a comprehensive quality management plan for all phases 
of the ongoing work. This is the basis for assuring that we deliver the 
hurricane protection system to meet all safety, regulatory, 
environmental and legal requirements. We implemented quality control 
and quality assurance procedures from the outset. These procedures were 
thoroughly reviewed by representatives of the Army Audit Agency 
embedded with Task Force Guardian. Army Audit Agency auditors reported 
very favorably on those procedures, which continue today and will 
continue through completion of hurricane protection system.
    Question. Are you confident the Corps is doing its best to control 
costs on this massive project?
    Answer. Sir, we are aware of increases in construction costs in the 
Greater New Orleans area in the post-Katrina environment. The Corps is 
aggressively seeking ways to manage construction costs by using 
innovative acquisition strategies including ``Design-Build'' and ``Best 
Value'' approaches to encourage innovation. We are implementing value 
engineering and earned-value management, and are seeking external 
reviews by industry experts and academia to ensure we do all we can to 
deliver this system in a cost efficient manner.

                           ALBUQUERQUE LEVEES

    Question. General. Strock, the Corps of Engineers abruptly 
announced 122 levees of concern in a press event last month. This 
public event highlighted the national concern about the adequacy of 
flood control, changes in levee design requirements, and the efficacy 
of the Corps inspection of completed works program.
    For 3 years, I have supported evaluation of levees in New Mexico 
with focus on the Albuquerque system and I am anticipating completion 
of a project report outlining rehabilitation needs this summer.
    However, the lack of coordination of the Corps national 
communication approach and the New Mexico specific activities was 
disconnected and has created a great deal of local confusion.
    Please explain how the Corps proposes to approach the need for 
rehabilitation of flood control in New Mexico and the Nation as a whole 
that was highlighted by the recent levee restoration program 
announcements?
    Answer. Sir, there has been a recent surge of concern regarding the 
condition of levees throughout the Nation as a result of Hurricane 
Katrina. Following release of the listing of national levees of 
concern, the Corps has notified levee project owners/sponsors and the 
appropriate local, State, and Federal agencies of projects with 
unacceptable inspection ratings. The Corps is currently working to 
ensure maintenance requirements are being met and will permit sponsors 
to have a one-year maintenance deficiency grace period to make repairs 
and corrections before a levee is removed from the Rehabilitation and 
Inspection Program under Public Law 84-99.
    On a national and regional level, the Corps is coordinating its 
levee inventory information with the Federal Emergency Management 
Agency (FEMA) for its use in making decisions in the National Flood 
Insurance Program. Although these are separate programs, data from the 
levee inventory will be available to support levee certification as 
part of FEMA's National Flood Insurance Program.
    In 2005, Congress provided the Corps of Engineers with 
authorization and funding to evaluate the condition of the Albuquerque 
Levees. This evaluation, scheduled for completion in May 2007, will 
describe the existing condition of the levee system and determine the 
extent and costs of rehabilitation needed. Additional authorization and 
funding would be required to proceed with levee rehabilitation.
    Question. Please explain how the Corps will balance competing 
Federal requirements for endangered species issues and habitat 
protection and flood control along the Middle Rio Grande?
    Answer. Sir, the Corps will coordinate with the U.S. Fish and 
Wildlife Service (USFWS), the State of New Mexico and our numerous 
stakeholders regarding threatened and endangered species within any 
project location in relation to the Albuquerque Levees. Species 
potentially occurring within proposed project areas include the 
Southwestern Willow Flycatcher, Rio Grande silvery minnow Critical 
Habitat, and the Bald Eagle.
    Based on this coordination, a formal consultation with the USFWS 
and a Biological Assessment regarding these species may be required. 
Additional coordination with the USFWS for preparation of a Fish and 
Wildlife Coordination Act Report would also be required.
    The Corps would work closely with USFWS as well as other 
stakeholder agencies such as the Middle Rio Grande Conservancy 
District, City of Albuquerque, New Mexico Department of Game and Fish, 
U.S. Bureau of Reclamation, Environmental Protection Agency and local 
villages and pueblos as well as interested parties such as Tree New 
Mexico, Hawks Aloft, and others to coordinate issues and comments in 
order to protect species and their habitat while implementing proposed 
construction.
    Most of the potential construction areas would be located within 
and adjacent to the existing levee alignment. Much of the vegetation in 
these areas consists of native cottonwood, Gooding's willow and non-
native vegetation such as salt cedar, Russian olive, Siberian elm and 
Tree of Heaven. Currently, these species are not being removed while 
the levee integrity is being evaluated. If the proposed action were to 
remove trees within a certain distance of the levee, many of them would 
be non-native species but some would be the native species listed 
above. These native species, and future woody species that would have 
occupied this space, would potentially need to be mitigated for in some 
way.

  CENTRAL NM ENVIRONMENTAL INFRASTRUCTURE PROGRAM (SEC. 593) AND NEW 
              MEXICO ENVIRONMENTAL INFRASTRUCTURE PROGRAM

    Question. In what way will the Corps accelerate the resolution of 
these administrative issues so that the section 593 and 595 programs 
can proceed and be effective?
    Answer. Sir, we have recently resolved the administrative issues 
regarding the use of State grant funds for section 593 and 595 projects 
that have executed Project Cooperation Agreements (PCAs). Subject to 
the availability of funds and consistent with administration policy, a 
three party Memorandum of Agreement (MOA) can be executed for each such 
project to permit use of the State of New Mexico funding. For future 
projects, we are negotiating with the State on the use of a modified 
section 593/595 PCA format that will include the State as a limited 
participant, for purposes of reviewing and commenting on documents, and 
providing and receiving funds. This should meet the needs of both the 
State and the Government.

                                  R&D

    Question. Can you please provide my office a briefing on the 
results of these multiple demonstration programs, plans for continued 
development and propagation of these advanced decision approaches, and 
an assessment of whether additional authorities are needed to fully 
implement the program in IWR and the R&D programs?
    Answer. Yes Senator, we can arrange a briefing for you. A 
representative from my staff will contact your office in the near 
future.
    Question. Flooding, levee management, supplying water resources, 
maintaining irrigation works, reducing storage loss in reservoirs, and 
ecological restoration are all dependent on sound understanding of 
sediment movement. The Corps has an advanced program for research for 
eastern river systems. It is time to expand this program dramatically 
for rivers in the arid southwest.
    Can you please provide my office a briefing on the status of the 
Southwest Flood Damage Development and Demonstration Program, an 
overall program plan for continued research and expansion of the 
program as well as an assessment of any authorities needed to continue 
this critical work?
    Answer. Yes Senator, we can arrange a briefing for you. A 
representative from my staff will contact you office in the near 
future.
                                 ______
                                 
            Question Submitted by Senator Robert F. Bennett
    Question. Although the committee has provided specific funding to 
the Rural Utah  595 account, the Army Corps has on two separate 
occasions reprogrammed nearly $1.5 million dollars to spend on projects 
in other States. These missing funds could complete several 
infrastructure projects in Utah that are now on hold because of lack of 
funding for this program. The Army Corps has assured me that these 
``borrowed'' funds will be replaced, but has not given a timeline. Will 
you please provide your timeline for replacing these funds?
    Answer. Sir, due to restricted funding levels and the Army Corps' 
limited ability to reprogram funds, there is no existing timeline to 
reprogram funds to the Rural Utah & 595 account to replace funds that 
were reprogrammed out of the program in prior years. However, we are 
committed to reviewing funding opportunities in future years to 
identify possible methods for reprogramming funds back into the Rural 
Utah program. For the current fiscal year (2007), we believe that there 
are sufficient unobligated funds available within the Rural Utah 
program to support any funding needs that may arise.
                                 ______
                                 
               Questions Submitted by Senator Larry Craig

                   SNAKE RIVER PROGRAMMATIC SEDIMENT

    Question. Does the fiscal year 2008 budget request provide 
sufficient funding to complete the Snake River Programmatic Sediment 
Management Plan by its 2009 due date? If not: How does the Corps intend 
to provide potential navigation maintenance if it is needed prior to 
completion of the plan?
    Answer. The fiscal year 2008 budget does not provide sufficient 
funding to complete the plan by the date identified in the settlement 
agreement, which was December 2009. There was no funding budgeted for 
fiscal year 2006 and the entire fiscal year 2007 was spent in a CRA. 
Walla Walla District was only able to fund some scoping activities and 
minor base-line condition evaluations during this period. However, the 
bulk of the cost and schedule for the development of the management 
plan is associated with base-line conditions data collection in the 
areas of sediment transport and deposition, aquatic habitat, and water 
quality. To date, we have not been able to initiate any of this data 
collection. It has been determined that 3-years worth of data is 
required to obtain valid information in these areas. This information 
is critical to ensure that the results of the plan are credible and 
defensible. As a result of funding limitations the past 2 years, the 
schedule for this plan has slipped 2 years. The current schedule for 
the completion of this plan is now December 2011, subject to the 
availability of funding.
    The Corps typically dredges within the Snake River navigation 
channel every 3 to 5 years, the last time was in 2006. We are aware of 
two areas in the Snake River navigation channel that are already 
experiencing some sediment deposition. As a result, we fully recognize 
that some dredging of the navigation channel may be required to 
maintain adequate navigation prior to completing the management plan in 
2011. Therefore, we are closely monitoring the areas currently 
experiencing problems, and are developing contingency plans in case 
interim dredging is necessary.
    Question. I'm curious about the Corps' position on whether or not 
intrastate waters are jurisdictional under 404?
    Answer. Some intrastate waters may be found jurisdictional under 
the Clean Water Act (CWA) where they are in accordance with the Rapanos 
decision (2006). For example, lakes that are determined to waters of 
the State (i.e., the Great Salt Lake) are jurisdictional under the CWA. 
Waters that are determined to navigable waters will also be 
jurisdictional. Where the water body (i.e., lake) flows into a 
tributary system that flows into traditional navigable water are also 
likely to be jurisdictional. Truly isolated waters, including wetlands 
that are non-navigable, intrastate and lack a link to interstate or 
foreign commerce are not jurisdictional under the CWA, as per the 
SWANCC decision (2001).
    Question. When can we expect new ``Waters of the U.S.'' guidance in 
relation to the Rapanos decision?
    Answer. The Corps and EPA have signed an implementation memo 
explaining the Rapanos decision and the new program requirements. This 
document and other supporting documents can be found at: http://
www.usace.army.mil/cw/cecwo/reg/cwa_guide/cwa_guide.htm. We are 
inviting public comments on case studies and experiences applying the 
guidance during the first 6 months of implementation. Furthermore, we, 
within 9 months from the date of issuance, will reissue, revise, or 
suspend the guidance after carefully considering the public comments 
received and field experiences with implementing the guidance. We will 
determine our course of action following a review of the comments.

                       ENERGY AND WATER QUESTIONS

    Question. During the hearing were raised to suggest that upstream 
lake levels are low. Is it not true that there currently is an historic 
drought in the basin and can you describe the extent of the drought?
    Answer. The Missouri River Basin is currently experiencing its 8th 
consecutive year of drought. Total System Storage is currently 37.3 
million acre-feet (MAF). Since operation of the System began in 1967, 
the Basin has experienced two extended drought periods; the drought 
which extended from 1989-1993 and the current drought. Total System 
Storage reached a record low of 33.9 MAF on February 8, 2007. The three 
upper Mainstem reservoirs, Fort Peck, Garrison, and Oahe experienced 
record low pools levels of 2,196.2 mean sea level (msl) 1,805.8 msl, 
and 1,570.2 msl respectively.
    Question. The Corps undertook a decade-plus long process to revise 
the Master Manual. Did the Corps not modify the manual to provide 
additional water for lake storage at the expense of traditional 
downstream needs deemed priorities by the 8th Circuit Court of Appeal 
in the case of Operation of the Missouri River System Litigation (421 
F. 3d 618) decided on August 6, 2005, which the Supreme Court refused 
to consider on appeal and issued that decision on April 24, 2006?
    Answer. Following the 14-year Missouri River Mainstem Reservoir 
System Master Water Control Manual Review and Update Study, in March of 
2004 the Corps of Engineers modified the Master Water Control Manual 
(Master Manual) to include more stringent drought conservation 
measures. Since 2004 these measures have resulted in shorter navigation 
seasons and lower releases to support navigation as compared to what 
would have occurred under the provisions of the previous Master Manual. 
The shorter navigation seasons and lower releases have retained more 
water in the System since 2004 than would have been the case under the 
previous Master Manual.
    The navigation preclude level in the previous Master Manual was set 
at 21 MAF. The 2004 Master Manual revision increased that level to 31 
MAF. The water stored in the System has not fallen below the 31 MAF 
navigation precludes since the revision in 2004. Therefore that change 
to the previous Master Manual has had no effect during the current 
drought.
    The Master Manual was again revised in 2006 to include provisions 
for a ``spring pulse,'' as required by the 2003 Amended Biological 
Opinion for the Missouri River Mainstem System.
    On June 21, 2004, the United States District Court for the District 
of Minnesota issued a decision in a series of consolidated cases by 
Basin States, tribes and stakeholders challenging the 2004 Revised 
Master Manual and the 2003 Amended Biological Opinion for the Missouri 
River Mainstem System. The District Court's decision by Judge Paul A. 
Magnuson upheld both the revised Master Manual and 2003 Amended 
Biological Opinion. On August 6, 2005 the United States Court of 
Appeals in a consolidated opinion affirmed Judge Magnuson's decision. 
Subsequent petitions for certiorari were denied by the United States 
Supreme Court.
    Question. It was suggested that water releases exist to provide 
Missouri River navigation. While that is also true, can you please 
describe how releases are also provided to support endangered species 
protection, drinking water supply, hydro energy production, downstream 
energy production cooling capacity, and Mississippi River navigation . 
. . not only Missouri River navigation as suggested?
    Answer. Releases are made from the System to support numerous 
downstream economic uses and protect environmental resources. Along 
with navigation, these economic uses include river recreation, 
municipal and industrial water supply (including cooling water for 
thermal power plants); and irrigation. Access to water has been a 
challenge during the current drought due to low river levels. These low 
river levels have also raised concerns related to the ability of 
thermal power plants to meet water quality standards for cooling water 
discharges to the river. Considerable investments have been made by 
several entities to modify their intake structures to deal with these 
low water conditions. Releases are also managed to protect threatened 
and endangered bird species that nest below the System during the 
summer months. And the spring pulse is designed to benefit the 
endangered pallid sturgeon.
    Question. Are these multiple uses a reality that the Assistant 
Secretary may consider mentioning when discussing the suggestion that 
lake levels should be maximized?
    Answer. Yes, the multiple uses are a reality that the Assistant 
Secretary mentions in discussions regarding reservoir levels. The 
Assistant Secretary has not proposed that the System be operated to 
maximize reservoir levels. Rather, the System is managed to serve the 
multiple project purposes authorized by Congress.
    Question. During this drought, is it true that very significant 
reductions have imposed upon navigation, and that pain is not limited 
to recreational fishing?
    Answer. The extended drought has negatively impacted all project 
purposes throughout the Basin, with the exception of flood control, and 
many of the people that live and work in the Basin. This includes 
impacts to navigation, water supply from both the river reaches and the 
reservoirs (including irrigation), hydropower, upstream fisheries and 
recreation along the river reaches and the reservoirs.
    Question. During this drought, is it true that reductions have 
placed burdens on large urban downstream water supply and all other 
downstream needs?
    Answer. Considerable investments have been made by water supply 
entities in the lower river to modify their intake structures to deal 
with the low water conditions during drought. Water supply entities in 
St. Joseph, Missouri and in both Kansas City, Missouri and Kansas City, 
Kansas have modified their intakes to ensure operation at lower river 
levels.
    The thermal power, municipal and industrial water intake owners 
downstream of Gavins Point Dam identified expenditures of $18.77 
million from 2000 to 2004 to access the river at the lower drought 
operations. They estimated that by 2010 they will have invested $286.1 
million in new structures, enhancements or other measures to access 
water during critical low water conditions especially during the non 
navigation periods and also during ice periods.
                                 ______
                                 
               Question Submitted by Senator Wayne Allard
    Question. I appreciate that the Albuquerque District office has 
been working closely with the two communities--Grenada and Creede--who 
are likely to be facing compliance letters related to some maintenance 
issues with their levees. I would just like to request a commitment 
from you that the Corps will continue to work with those communities 
and will keep my office fully informed as this process continues to 
move along.
    I understand that the Corps' tamarisk removal project in Colorado 
has been very successful and is nearing completion. Could you please 
give me an update on that project?
    Because this project has been so successful and because tamarisk 
poses such a problem in Colorado, does the Corps have any plans to 
conduct additional removal projects in the State?
    Answer. Our section 206 Tamarisk Eradication project is in 
Feasibility phase. We anticipate completing the Detailed Project Report 
(including the Environmental Assessment, Engineering Report, and Real 
Estate Report) in December 2008. If the moratorium on new CAP phases is 
lifted by that time, SPD would then request funding to go to 100 
percent plans and specs. The PCA would also be prepared and ready for 
signatures at that time.
                                 ______
                                 
                  Question Submitted to Mark Limbaugh
             Question Submitted by Senator Byron L. Dorgan

                              RURAL WATER

    Question. Secretary Limbaugh, Your budget proposes $55 million for 
rural water projects. This amount seems to go down annually. How are we 
ever going to finish any of these projects with such meager funding?
    Answer. Reclamation is making significant progress in funding rural 
water projects throughout North and South Dakota and Montana. The Mid-
Dakota rural water project was completed in fiscal year 2006. Also, 
numerous rural water projects serving nearly 150,000 people in North 
Dakota have been completed as part of the Garrison Diversion Unit.
                                 ______
                                 
              Questions Submitted by Senator Wayne Allard
    Question. Secretary Limbaugh, can you explain why drought 
assistance was given so little funding in your budget?
    Answer. Reclamation prepares its budgets 2 years in advance. 
Consequently, we are unable to forecast this kind of emergency. 
However, we make every effort to address the greatest need with the 
funds available and to put our efforts into funding on-the-ground 
activities.
    Question. What drought assistance can you offer?
    Answer. The Reclamation States Emergency Drought Relief Act of 1991 
(Public Law 102-250) as amended, authorizes the Bureau of Reclamation 
to undertake drought relief measures through emergency assistance 
(Title I) and planning activities (Title II). Title I provides for 
construction, management and conservation measures to alleviate the 
adverse impacts of drought, including the mitigation of fish and 
wildlife impacts. Title I also authorizes temporary contracts to make 
available project and nonproject water and to allow for the use of 
Reclamation facilities for the storage and conveyance of water.
    Under Title I authority, Reclamation has constructed many wells for 
drinking water for smaller financially-strapped entities (towns, 
counties, tribes) that do not have the financial capability to deal 
with the impacts of drought. In many cases, Reclamation is the ``last 
resort'' for these communities.
    Question. Are the communities suffering from drought aware of the 
assistance that you can offer?
    Answer. Each of Reclamation's regional offices and many of the area 
offices have collateral duty personnel involved with the Drought 
Program. Additionally, regional directors and area managers are in 
communication with their stakeholders to remain current on the emerging 
needs of their areas. Information about the various programs 
Reclamation has is made available for consideration.
                                 ______
                                 
                Questions Submitted to Robert W. Johnson
             Questions Submitted by Senator Byron L. Dorgan

                            MINNOW SANCTUARY

    Question. The Reasonable and Prudent Alternatives specified in the 
2003 Fish and Wild life Service's Biological Opinion on the Rio Grande 
Silvery Minnow required the construction of two minnow refugia. In 
order to comply with this mandate, I have secured funding for the 
construction of a minnow sanctuary.
    What is the status of the sanctuary's construction and when will it 
be completed?
    Answer. Reclamation awarded a contract for the third, and final, 
phase of construction in 2007, and expects to complete construction by 
the summer of 2008.
    Question. Does the USBR have sufficient funding in fiscal year 2007 
to complete construction of the Minnow Sanctuary or will additional 
fiscal year 2008 funds be required?
    Answer. Sufficient funds have been appropriated in fiscal year 2008 
to complete construction of the minnow sanctuary. A contract for the 
final phase of construction was awarded on December 6, 2007, and 
construction is expected to be completed by October 2008.
    Question. Will you please provide my office with a long-term 
operations plan for the Sanctuary?
    Answer. Yes, Reclamation and the Fish and Wildlife Service are 
developing an operations plan and will provide it to your office once 
finalized.
    Question. Can the BOR commit to provide my office monthly reports 
on the progress of the Sanctuary construction similar to those provided 
for the Tularosa Basin Desalination Facility?
    Answer. Yes, Reclamation will provide these reports to your office.

                      CARLSBAD IRRIGATION DISTRICT

    Question. The Carlsbad Irrigation District faces significant 
rehabilitation needs on Brantley, Avalon and Sumner Dams along the 
Pecos River. The President's budget proposal for fiscal year 2008 is 
only $2,891,000, a decrease of over $700,000 from the current year 
representing a decrease of 50 percent in the operations and 
rehabilitation component of the budget.
    How can these rehabilitation activities progress with decreasing 
operations and maintenance budgets?
    Answer. Rehabilitation planning and implementation on the Carlsbad 
Project is the responsibility of the Carlsbad Irrigation District with 
Reclamation as a cost-share partner. Sufficient appropriated funds have 
been requested by Reclamation for its estimated cost-share amount for 
the rehabilitation.
    Question. Can the BOR commit to transfer the funding for the Pecos 
River Basin Water Salvage program to the Carlsbad Irrigation District 
for implementation of the invasive species control activities?
    Answer. Yes, BOR transfers both Federal and State funds based on 
monthly costs submitted by the Carlsbad Irrigation District.

                   EXCESS GOVERNMENT PROPERTY ISSUES

    Question. Historically the Bureau of Reclamation allowed irrigation 
districts to access excess Government equipment to implement 
maintenance on federally managed facilities. Two years ago this policy 
was abruptly reversed. Equipment acquired this way avoids waste and 
abuse of Government resources and has been instrumental in dealing with 
southern New Mexico flooding this last summer.
    Will the BOR rectify this situation by restoring the ability of the 
irrigation districts to access the Excess Government Equipment list?
    Answer. Public Law 89-48, June 14, 1965, states in part ``. . . In 
order to encourage the assumption of irrigation districts . . . of the 
operation and maintenance or works constructed to furnish or distribute 
a water supply, the Secretary is authorized to use appropriated funds 
available for the project involved to acquire movable property for 
transfer under the terms and conditions hereinbefore provided, at the 
time operation and maintenance (O&M) is assumed.''
    The Reclamation Supplement to Federal Property Management 
Regulations further provides direction if additional equipment is 
required at the time of transfer, by allowing it to be obtained in the 
same manner and from the same sources as prescribed for the initial O&M 
requirement but with a 1-year time frame. Thus Reclamation allows the 
water user organizations to still acquire needed excess property for 1 
year after the O&M transfer to them. The provisions of this authority 
does not include the replacement or upgrade of equipment previously 
transferred to a water users' organization. The irrigation districts 
will continue to have access to the Excess Government Equipment list 
with a 1-year time frame provision, which will require irrigation 
districts to compete with other entities for acquisition of Excess 
Government Equipment.

                   CHIMAYO AND ESPANOLA WATER SYSTEMS

    Question. The two rural northern New Mexico communities of Chimayo 
and Espanola are currently developing and rehabilitating their water 
systems. Under Public Law 108-354 both communities may receive support 
from the BOR to complete their water systems. The President's fiscal 
year 2008 budget does not include funds to support these two rural 
programs.
    Can the BOR explain their approach to support this type of rural 
community and the specific decision to not provide funding in fiscal 
year 2008?
    Answer. Public Law 108-354 requires that a feasibility study be 
completed within 3 years of the legislation. Work has only just begun 
on the plan. Until the entities can provide a comprehensive plan for 
the projects including cost sharing it is felt that a request for 
Federal dollars can be delayed. The $1,000,000 already obligated to the 
City of Espanola under this authority remains unexpended.

                        ANIMAS-LA PLATA PROJECT

    Question. Despite past claims of mismanagement and poor planning 
and oversight, the A-LP project is now proceeding at an acceptable 
rate. The President's budget calls for $58 million for the project in 
fiscal year 2008. However, some of the project beneficiaries claim that 
the project requires $75 million in fiscal year 2008 to keep it on 
schedule and to keep total project costs to a minimum.
    Do you believe that the $58 million requested is adequate to keep 
the project on schedule?
    Answer. Yes, the amount requested is adequate to maintain the 
current schedule. This schedule reflects a ``projected'' delay to the 
overall project completion of approximately 1 to 1\1/2\ years as 
compared to earlier project schedules. The most significant impact to a 
single feature is a delay of 1\3/4\ years in delivering water to The 
Navajo Nation at Shiprock, New Mexico.
    Question. What precautions are being taken to ensure that there are 
not further cost overruns with the project?
    Answer. We have refined and streamlined reporting within 
Reclamation for the A-LP. The Four Corners Construction Office is 
responsible for all matters pertaining to the construction of the 
project. This office is managed by a Project Construction Engineer who 
reports directly to the Regional Director of the Upper Colorado Region 
in Salt Lake City, Utah. The construction office continually evaluates 
ways to save costs and still maintain the project features. Cost 
tracking procedures implemented in 2004 now relate all project costs to 
the cost estimate (indexed for inflation) for early detection of 
problems. This cost information is shared with the Project Sponsors on 
a bi-monthly basis.
    Question. Will providing greater appropriations in the near-term 
keep down the total cost of the project?
    Answer. Yes. The project schedule is driven by available funds. The 
more funds that are available, the sooner the project can be completed. 
Future costs driven by inflation will be kept in check.

                             LOAN GUARANTEE

    Question. What progress have you made with respect to the Aamodt, 
Abeyta, and Navajo settlements?
    Answer. The Aamodt and Abeyta settlements both seek Federal 
contributions of water or funding to acquire water. The Bureau of 
Reclamation has completed a study of evaporation surplus at Cochiti 
reservoir to determine if additional water from that source would be 
available to supplement un-contracted San Juan Chama supplies, and we 
have met with the parties and provided draft copies of the study to 
them and asked for comments. The study showed that some surplus is 
available. At the direction of the Secretary, Counselor Bogert has met 
with the parties to both settlements in New Mexico several times since 
this spring, most recently in October 2007, to discuss water supply 
issues. The United States has presented the parties with a proposed 
level of Federal contribution in Aamod and Abeyta. In the meantime, 
consultations with the President's Office of Management and Budget and 
Department of Justice are on-going.
    With respect to the Navajo settlement, the Department has been 
working to develop information to assist in developing a possible 
solution, including a draft environmental impact statement on the 
proposed pipeline and the hydrologic determination on water 
availability in New Mexico. The Department will have an updated 
appraisal-level estimate of the costs of constructing the pipeline 
completed this year.
    Question. When do you anticipate you will complete your study to 
determine if there is additional water available from the San Juan-
Chama Project as a result of an over-estimation of evaporative loss 
from Cochiti Reservoir?
    Answer. The Bureau of Reclamation has completed a study of 
evaporation surplus at Cochiti reservoir to determine if additional 
water from that source would be available to supplement un-contracted 
San Juan Chama supplies. The Department provided copies of the study to 
the parties and asked for their comments. The study showed that some 
surplus is available.
    Question. When will you provide the parties to the Abeyta 
settlement an official administration position on their proposed 
settlement?
    Answer. The administration provided the position on this settlement 
at the beginning of September 2007.
    Question. Please explain why the San Joaquin Settlement and the 
Arizona Water Settlement received favorable treatment from OMB while 
the New Mexico Indian water rights settlements have not.
    Answer. OMB's analysis of Indian water rights settlements is 
predicated upon the ``Criteria and Procedures for the Participation of 
the Federal Government in Negotiations for the Settlement of Indian 
Water Rights Claims'' (55 FR 9223). With respect to Federal 
contributions, the Criteria and Procedures provide that Federal 
contributions to a settlement should not exceed the sum of the 
calculable legal exposure and additional costs related to Federal trust 
or programmatic responsibilities. Of particular interest to the 
administration in determining calculable legal exposure is the 
liability facing the United States if no legislative settlement is 
reached. In the case of the Arizona Water Rights Settlement Act, the 
settlement concluded a lawsuit over the financial repayment obligation 
of Arizona water users for the Central Arizona Project (CAP), with 
significant amounts of money at stake. The San Joaquin Settlement 
referred to in this question was not an Indian water rights settlement, 
but the calculable legal exposure was part of the analysis. The San 
Joaquin settlement would bring to an end a multiyear lawsuit, and 
continued litigation would expose the parties to the risk of 
significant costs. In situations where the proposed Federal 
contribution outweighs the litigation exposure, administration support 
for a settlement requires that the additional contribution be closely 
related to programmatic responsibilities.
    Question. Do you believe that your proposed budget of $34 million 
for the Indian Land and Water Claims Settlement Fund is adequate to 
settle unresolved Indian land and water claims in fiscal year 2008?
    Answer. The Indian Land and Water Claims Settlement Fund line item 
in the budget is adequate for its intended purpose of fulfilling BIA's 
commitment under enacted Indian land and water settlements. Funding for 
ongoing negotiations to settle unresolved Indian land and water claims 
is provided under several other items in the DOI budget, including 
Water Resources Management in BIA's budget.
    Question. How do you plan to secure a commitment from OMB that a 
reasonable Federal contribution will be made available for the New 
Mexico Indian water rights settlements?
    Answer. We will continue to meet within the Office of Management 
and Budget and the Department of Justice to keep them informed of 
developments in the New Mexico settlements and identify approaches to 
these settlements that are fair to taxpayers as well as the settling 
parties.

                              RURAL WATER

    Question. Fifty years after Garrison Dam was constructed and Lake 
Sakakawea was impounded, many of my constituents are still without a 
good source of drinking water. I am not talking about people far 
removed from the project; I am talking about people whose homes are 
within sight of Lake Sakakawea. These people do not have good water 
when there is a lake right in front of them that could provide for 
their needs. That was part of the bargain that we thought we made. We 
gave up land in return for water when and where we need it. We gave up 
the land, but you still haven't come through with the water.
    Costs continue to escalate on these projects. Benefits to the 
public are deferred. What do you recommend to make these projects more 
of a budget priority for Reclamation?
    Answer. Reclamation balances many priorities including funding 
ongoing construction projects such as rural water, while maintaining 
existing infrastructure and other ongoing priorities, all within the 
budget targets that have been established.
    Question. As you recall, The Fort Yates intake was silted over in 
2003 and left the Standing Rock Sioux Tribe with no water source. 
Thanks to considerable efforts of the tribe and your personnel, a 
temporary water intake was installed. It is still in use today?
    Are there plans for a permanent fix?
    Answer. The Tribe's engineering firm has studied several alternate 
plans for intakes that serve Fort Yates as well as the future needs of 
the entire Reservation.
    Question. What are they?
    Answer. As a result of the fiscal year 2008 appropriations, the 
Standing Rock Sioux Tribe water treatment plant near Wakpala, South 
Dakota will have the capacity to serve the entire reservation. 
Reclamation concurs with this decision as it provides for the intake 
location that should remain viable under nearly any lake condition and 
will also minimize operation and maintenance costs.
    Because it is estimated to take 3 years to allow enough funding and 
time to construct the new Wakpala intake, water treatment plant and 
connecting pipeline to the Fort Yates system, the existing water 
treatment plant and temporary intake that serves Fort Yates will need 
to remain in service for the same time period. Reclamation is working 
with the tribe to take some precautionary measures to ensure these 
current features at Fort Yates remain operational until such time as 
the new source of water from Wakpaka is made available.
    Question. Is there a schedule for this work?
    Answer. As a result of the fiscal year 2008 appropriations, the 
Standing Rock Sioux Tribe water treatment plant near Wakpaka, South 
Dakota will have the capacity to serve the entire reservation. 
Reclamation concurs with this decision as it provides for an intake 
location that should remain viable under nearly any lake condition and 
will also minimize operations and maintenance costs.
    Because it is estimated to take 3 years to allow enough funding and 
time to construct the new Wakpala intake, water treatment plant and 
connecting pipeline to the Fort Yates system, the existing water 
treatment plant and temporary intake that serves Fort Yates will need 
to remain in service for the same time period. Reclamation is working 
with the Tribe to take some precautionary measures to ensure these 
current features at Fort Yates remain operational until such time as 
the new source of water from Wakpaka is made available.
    Question. Lake Oahe has essentially retreated out of North Dakota, 
thanks to the mismanagement of the river by the Corps of Engineers, so 
that this intake is now a river intake, instead of the lake intake they 
had. Unfortunately, there appears to be a migrating sandbar that could 
cut-off the tribe's intake from the river.
    What measures is Reclamation prepared to take to ensure that this 
intake does not get cut-off from the river?
    Answer. Reclamation has developed and exercised contingency plans 
with the tribe in the event the existing river intake stops 
functioning. These plans include connecting portable pumps to the 
intake. Further measures include excavation and/or dredging the 
material to reconnect the intake to the river. We continue to evaluate 
additional measures that would redirect river flow towards the intake, 
preventing sandbars from forming.
    Question. Do you have sufficient funding for these measures?
    Answer. Reclamation has developed cost estimates for dredging this 
material in the event it blocks the intake. Reclamation estimates 
dredging cost to be approximately $150,000. Work would need to be 
reprioritized and funds shifted to cover this type of extraordinary 
operation and maintenance work.
    Question. On a similar note, the intake at Wakpala on the 
Reservation is in serious danger of being out of the water this year. 
Have you developed contingency plans to deal with this contingency?
    Answer. Reclamation has prepared contingency plans to address the 
loss of water supply to the Wakpala water treatment plant. Since this 
plant serves a relatively small population, the immediate response is 
to truck water from the City of Mobridge to the water treatment plant. 
Further options are being investigated including installing backup 
groundwater wells and extending the intake as the lake recedes.
    Question. What is the most likely scenario?
    Answer. The Army Corps of Engineers reservoir forecast for Lake 
Oahe through February 2008 predicts sufficient water depth over the top 
of the Wakpala Intake to sustain normal operations.
    Question. Is there a permanent solution that could solve both of 
these problems?
    Answer. The tribe's engineering firm has studied options to serve 
the entire reservations needs (including both Fort Yates and Wakpala). 
Based on these studies, the tribe's preferred long-term solution is to 
construct a new surface water intake near the Indian Memorial 
Recreation Area, south of Wakpala, and a new water treatment plant to 
serve the entire southern portion of the reservation. Their preferred 
plan also includes improvements to the existing Fort Yates intake and 
water treatment plant to serve the northern portion of the reservation. 
The Wakpala intake and water treatment plant facilities are estimated 
to cost $23.9 million and the Fort Yates intake and water treatment 
plant improvements are estimated to cost $2.3 million. The highest 
priority and first phase of the Wakpala facilities will involve 
construction of the new intake and raw water pipeline at an estimated 
cost of $4.5 million to address the immediate low water conditions. The 
Supplemental Appropriations Act signed on May 27, 2007 appropriated 
$4.5 million to begin design and construction of the new Wakpala 
Intake. Designs have been completed and the contract is expected to be 
advertised and awarded in December 2007. Construction is scheduled to 
begin in the spring of 2008 and the intake should be operational by the 
end of the year.
    Question. What is the range of costs that we would be considering 
for a permanent fix?
    Answer. The tribes preferred plan to meet the reservation-wide 
needs, as described above, is estimated to cost a total of $26.2 
million. Reclamation has advised the tribe that the Fort Yates well 
field, with a capacity to meet the needs of the northern portion of the 
reservation, may be a more reliable option and is estimated to cost 
$9.2 million. This option at Fort Yates together with the tribes 
preferred plan at Wakpala would result in a total cost to secure a 
reservation-wide water supply of $33.1 million. A new intake and water 
treatment plant to completely replace the existing Wakpala and Fort 
Yates facilities and meet the full reservation-wide needs was also 
evaluated. This alternative would consist of a new intake near the 
Indian Memorial Recreation Area, a new water treatment plant, storage 
facilities, and additional transmission pipelines to interconnect the 
southern and northern portions of the reservation-wide system. This 
alternative is estimated to cost over $50 million.
    Question. Is there work on this that could be undertaken in fiscal 
year 2007 and fiscal year 2008? Could you provide me with this 
additional funding amount?
    Answer. In fiscal year 2007, work continued on the groundwater 
investigations in the Fort Yates area. These investigations, including 
drawdown tests and pilot wells, are expected to be complete in 2008. If 
the project is found to be feasible and sufficient funds are made 
available, design and specifications for the $9.2 million project to 
serve the northern portion of the reservation could begin in fiscal 
year 2008. Construction of the well field and treatment facilities 
could start, pending the availability of funds, in the later part of 
2008 and extend into 2009. If the Tribe continues to prefer the Fort 
Yates intake improvement alternative at a cost of $2.3 million, design 
and construction could be initiated in fiscal year 2008.
    Designs and specifications for the $4.5 million replacement intake 
and raw water pipeline at Wakpala were completed in fiscal year 2007. 
Construction is expected to begin in the spring of 2008.
    Question. Could you provide me with this additional funding amount?
    Answer. Sufficient funds are currently available to complete 
construction of the new Wakpala Intake in 2008. After a final decision 
is made in early 2008 on the preferred Fort Yates water source, 
Reclamation will look at the funding needs.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein

      SACRAMENTO VALLEY INTEGRATED REGIONAL WATER MANAGEMENT PLAN

    Question. The Sacramento Valley Integrated Regional Water 
Management Plan received $2,000,000 in fiscal year 2006, as well as, an 
allocation of $1,200,000 in the House reported bill and $2,000,000 in 
the Senate reported bill during the fiscal year 2007 appropriations 
process. As you know, preliminary California Department of Water 
Resources' study results suggest Sacramento Valley's groundwater 
formations may offer, as much as, several hundred thousand acre-feet in 
additional water supplies for agricultural, environmental, and 
municipal uses. The funds approved by the committees in fiscal year 
2007 are needed to continue the efforts begun in fiscal year 2006 to 
better characterize the process for groundwater recharge of and 
production from the main groundwater aquifer systems. Do you agree that 
the work underway in this initiative holds great promise for increasing 
the available water supply for agricultural, environmental and 
municipal uses?
    Answer. Yes, Reclamation believes the Stony Creek Fan/Lower Tuscan 
Investigation Project (an element of the Sacramento Valley Integrated 
Regional Water Management Plan) holds promise for increasing the 
available supply of water for agricultural, municipal and environmental 
purposes, by providing additional conjunctive use capability and by 
laying a foundation for future development of water banking capacity in 
the Sacramento Valley.
    Question. In your fiscal year 2007 work program, will the Bureau of 
Reclamation support an allocation of $2,000,000, again, the same level 
approved in the fiscal year 2006 appropriations process, for the 
Sacramento Valley Integrated Regional Water Management Plan, and, if 
not, what level of funding is the Bureau of Reclamation recommending 
for this initiative?
    Answer. Reclamation would need a report from the project proponents 
showing supporting analysis and data demonstrating the potential water 
supply benefits of this project. In addition, Reclamation assumes that 
cost-sharing would be a condition of any such funding.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici

                                DROUGHT

    Question. When do you anticipate the remaining wells will be 
completed?
    Answer. In keeping with the work initiated in 2006, we have 
completed well drilling for the communities of Las Vegas, Ruidoso, and 
Ruidoso Downs, New Mexico. Drilling on the well for Capitan, New 
Mexico, will be completed within weeks. An equipment breakdown has 
caused a minor delay. As you know, we were not as successful with the 
well in Cloudcroft, New Mexico. Although drilling was completed, the 
quality of the water was not fit for human consumption and the yield 
was insufficient. Consequently, that well has been abandoned.
    Question. Please explain why completion of the wells has taken as 
long as it has.
    Answer. Ruidoso Downs was the only community of the five who had a 
plan in place. Consequently, it was necessary to procure the services 
of a contractor for the permitting, design, and monitoring of the 
wells, along with a well driller. Severe geologic formations, equipment 
breakdowns requiring competition with oil drillers for the same kind of 
equipment, and well conditions contributed to the time required for 
completion.
    Question. Is additional funding necessary for their completion?
    Answer. No additional funding is required. Funding for the five 
well projects has been sufficient.
    Question. What additional emergency drought activities should the 
Bureau of Reclamation undertake to address yet another year of 
devastating drought in the Southwest?
    Answer. The Reclamation States Emergency Drought Relief Act of 1991 
(Public Law 102-250) as amended, is specific in authorizing the kinds 
of activities the Bureau of Reclamation can undertake. Public Law 102-
250 authorizes the Bureau of Reclamation to undertake drought relief 
measures through emergency assistance (Title I) and planning activities 
(Title II). Title I provides for construction, management and 
conservation measures to alleviate the adverse impacts of drought, 
including the mitigation of fish and wildlife impacts. Title I also 
authorizes temporary contracts to make available project and nonproject 
water and to allow for the use of Reclamation facilities for the 
storage and conveyance of water.
    Reclamation's regional offices will identify and prioritize 
specific projects to be undertaken with drought program funding. 
Reclamation staff understands the on-the-ground impact of the drought 
conditions currently affecting parts of the West, and has the technical 
expertise to evaluate the priority of projects proposed to cope with 
those conditions. Projects will be selected for funding based on their 
priority and the availability of funds.

                               WATER 2025

    Question. Please describe Reclamation's future vision for the Water 
2025 program and any necessary authorities needed to implement the 
program.
    Answer. Reclamation envisions the Water 2025 program as a tool to 
meet the challenge of preventing crises and conflict over water in the 
West. This is being accomplished through the most effective low-cost 
options for increasing water supplies that are available, including: 
(1) water efficiency and conservation; (2) water markets; (3) 
collaboration; and (4) technology. In order to move forward, 
Reclamation needs Water 2025 program authority. On April 13, 2007, the 
administration transmitted a draft bill titled Reclamation Water 
Management Improvement Act that would authorize the Water 2025 program.
    Question. Please describe the major accomplishments of the Water 
2025 after its 4 years of existence.
    Answer. Since the inception of the program, the Water 2025 program 
has experienced many achievements that assist water managers in 
stretching scarce water supplies, thereby reducing the likelihood of 
conflicts over water.
    Over 122 Challenge Grants in 17 western States have leveraged $25.5 
million in Federal funding with local partnerships into $96 million in 
water management improvements. In 2007 alone, Secretary Kempthorne 
announced $9.2 million in Water 2025 Challenge Grants, targeting 44 new 
projects across the Nation that will conserve water resources and 
modernize water storage and delivery systems.
    The projects selected for award through the Challenge Grant program 
incorporate the following improvements:
  --Forty-two of the projects, collectively, will convert 134 miles of 
        earthen canals to pipeline.
  --Seventy-four of the projects include installation of water 
        measurement devices, Supervisory Control and Data Acquisition 
        (SCADA) systems and automated water delivery systems.
  --Thirty-six of the projects include water marketing plans.
  --The 122 projects, upon completion, will save approximately 400,000 
        acre-feet per year.
    In fiscal year 2008, Reclamation initiated a process to provide 
System Optimization Review grants, which are intended to fund a broad 
analysis of system-wide efficiency rather than project-specific 
planning. The final product of each grant will be a report with a plan 
of action that focuses on improving efficiency and system operations on 
a regional or basin perspective.
    Question. Specifically, how have funds that have been appropriated 
for the program reduced conflict amongst water users?
    Answer. To date, 16 projects are complete. Each Water 2025 project 
results in water better managed or saved and collaborative 
relationships developed that will reduce crisis and conflict over water 
in the west. Below are some specific examples.
  --In Lewiston, Idaho, the Lewiston Orchards Irrigation District--
        serving 18,000 customers--will save 450 acre-feet per year as a 
        result of a Water 2025 project. The saved water will reduce the 
        impact from a settlement with the Nez Perce Tribe over instream 
        flows in the Sweetwater Creek.
  --The Central Oregon Irrigation District, a fiscal year 2004 and 
        fiscal year 2006 Challenge Grant recipient, established a water 
        bank in the Deschutes Basin and formed an alliance of seven 
        irrigation districts, six cities, three tribes and the 
        Deschutes Resource Conservancy (the ``Deschutes Water 
        Alliance'' or the ``Alliance'').
  --In Utah, the Sevier River Water Users Association, a partnership of 
        canal companies and river commissioners, used their fiscal year 
        2005 Challenge Grant to enlarge the existing Supervisory 
        Control and Data Acquisition (SCADA) system to allow for 
        expansion of real-time monitoring and control systems in a 
        five-county area.
  --A fiscal year 2005 Challenge Grant to the Yuma County Water User's 
        Association will save 8,500 acre-feet per year that benefit the 
        junior water users of the Central Arizona Project, which serves 
        fast growing metropolitan areas. The 8,500 acre-feet per year 
        is enough to serve approximately 25,000 households.

                       MIDDLE RIO GRANDE PROJECT

    Question. The USBR is tasked with providing water in order to 
comply with the Fish and Wildlife Service's 2003 Biological Opinion. 
However, it is unclear where the USBR will obtain this water once the 
Albuquerque-Bernalillo County Water Utility Authority begins diverting 
its allocation of San Juan-Chama Project water. The President's fiscal 
year 2008 USBR budget proposes a 17 percent decrease to the Middle Rio 
Grande Project from fiscal year 2006 enacted levels. Additionally, the 
needs in the basin are increasing dramatically, including:
  --Repairs on high-priority irrigation system levees;
  --Meeting Endangered Species Act requirements;
  --Developing an intergraded management plan; and
  --Modernizing stream gagging.
    At the same time, the administrations fiscal year 2008 request is 
17 percent below the fiscal year 2006 budget for the Middle Rio Grande 
Project.
    How can the Bureau of Reclamation meet all these increasingly 
important obligations with a decrease in Federal spending?
    Answer. For fiscal year 2008 the request for priority site levee 
maintenance of $10,195,000 is more than what was enacted in fiscal year 
2007 ($7,382,000) and should be sufficient to continue repairs. In 
developing its budget request, Reclamation anticipated funding 
contributions from Federal partners for the non-water ESA activities of 
the Collaborative Program such as minnow rescue, species and water 
quality monitoring and research, and habitat planning, construction, 
and monitoring activities.
    Question. Does the Department of the Interior support authorization 
of the Middle Rio Grande Endangered Species Collaborative Program?
    Answer. Yes, DOI supports the authorization of the Middle Rio 
Grande Endangered Species Collaborative Program. The success of the 
Program will depend on the non-Federal and other Federal partner 
contributions in addition to Reclamation.
    Question. San Juan-Chama Project water cannot be used for meeting 
the requirements of the ESA unless it is acquired by a ``willing seller 
or lessor.'' If water cannot be acquired from project contractors, 
where do you anticipate you will get the water to meet the requirements 
of the ESA in 2008?
    Answer. Some San Juan-Chama Project water will be available for 
Reclamation to lease on a voluntary basis in 2008. Most of the 
supplemental supply that will help meet Biological Opinion flow 
requirements is previously leased SJ-C water that is still in storage. 
In addition, operational flexibilities by the Middle Rio Grande 
Conservancy District, U.S. Army Corps of Engineers contribution to 
silvery minnow spawning/recruitment flows, and other voluntary 
contributions will collectively assist in meeting ESA requirements.
    Question. What are you doing to address this potential problem?
    Answer. Reclamation in cooperation with the Collaborative Program 
stakeholders is working on development of a sustainable biological 
opinion which will contain shared responsibilities for water management 
among all of the stakeholders.

                               TITLE XVI

    Question. Secretary Limbaugh, You requested $11 million for Water 
2025 in your budget. How do you reconcile requesting funding for this 
unauthorized program when you have so many unmet authorized needs in 
the Title XVI program?
    Answer. The Water 2025 program is a high priority program to 
address the critical need for funding to prevent crises and conflicts 
over water in the West. Through the Water 2025 program, the $11 million 
requested will result in over $40 million of water infrastructure 
investment. The Bureau of Reclamation must balance competing priorities 
for funding within the Federal Government and within Reclamation. 
Reclamation's budget reflects this balance.
    Question. How much did you provide for these projects in your 
budget?
    Answer. The overall fiscal year 2008 budget request for the Title 
XVI Water Reclamation and Reuse Program is $10.1 million and provides 
$9.3 million in funding for nine authorized projects, including eight 
construction projects and one desalination demonstration project. The 
funding level reflects Reclamation's balance of the many competing 
priorities for funding within the Federal Government and within 
Reclamation.
    Question. Why is this program so unpopular?
    Answer. The administration continues to support the Title XVI Water 
Recycling and Reuse Program when it is focused on using Federal funds 
to develop innovative ways to recycle or reuse water and to construct 
projects that will help alleviate water crises or shortages in the 
West. Budget requests reflect a priority of completing those projects 
that have already been authorized for construction.
    Question. Is there anything Congress can do to modify this program 
to make it more likely to be funded?
    Answer. Public Law 102-575, Title XVI, as amended, gives 
Reclamation ample authority to investigate and identify opportunities 
for reclamation and reuse of wastewater and to conduct research for the 
reclamation of wastewater and naturally impaired ground and surface 
waters. In making its budget requests, Reclamation has placed priority 
on meeting funding obligations for projects authorized in previous 
years.
                                 ______
                                 
               Questions Submitted by Senator Larry Craig

                             LOAN GUARANTEE

    Question. Can you please describe in more detail the new loan 
guarantee program? For instance, what kinds of strings are attached to 
these loans and what kind of interest rates and loan duration?
    Answer. Title II of Public Law 109-451 provides the Secretary of 
the Interior authority to issue loan guarantees to assist in financing 
rural water supply projects; extraordinary maintenance and 
rehabilitation of Reclamation project facilities; and improvements to 
infrastructure directly related to a Reclamation project. Borrowers 
would apply for a loan from private lending institutions as defined in 
the statute. Interest rates for the guaranteed portion of the loan 
would not exceed a level that the Secretary determines to be 
appropriate with consideration of the private sector prevailing rate. 
For example, the Federal funds rate or higher. Loans may be provided 
for terms of up to 40 years. The Bureau is continuing to address the 
administrative requirements and the potential benefits of the program. 
We will keep the Committee informed of our progress.

                     MINIDOKA SPILLWAY REPLACEMENT

    Question. I'm concerned with what is occurring at the Minidoka Dam 
in Idaho. This is an aging dam that wasn't built to standard. This 
project supplies water for a lot of farmers, and assessments are 
already fairly expensive. Now the Bureau wants to replace the dam 
structure, leaving the irrigation district with a $10 million plus bill 
to pay back in about 3 years. Is this a situation where the loan 
guarantee can help or is there another way we can keep from bankrupting 
these farmers?
    Answer. Minidoka dam was built to the standards of the day in 1906. 
The structure has been modified three times to provide additional 
benefits such as power generation and flood control. After over 101 
years of service, the spillway portion of the dam is in need of 
replacement. Over the past 10 years, Reclamation has endeavored to 
address these concerns including repayment options with the appropriate 
Districts. As you are aware, the Rural Water Act of 2006 (Public Law 
109-451), was enacted on December 22, 2006. Among other things, this 
law directs the Secretary of the Interior to promulgate a regulation 
prior to issuing loan guarantees. Instead of relying on a loan 
guarantee, the districts have the option of raising their water 
assessments to users, thus giving them the adequate funds to begin 
construction or acquire non-Federal funding.
                                 ______
                                 
          Questions Submitted by Senator Kay Bailey Hutchison

                         DESALINATION RESEARCH

    Question. I am interested in the process and the schedule the 
administration will undertake to develop both a short and long-term 
strategy within your desalination research program for a viable R&D 
program that will enable communities to utilize saline aquifers.
    Please describe what the guiding principles/goals of the program 
would include.
    Answer. Over the past 10 years, as the demand for water quality and 
water quantity has increased, desalination technologies have improved 
and costs have been reduced. More and more western rural and larger 
communities are implementing groundwater desalination facilities to 
augment their water supplies. Reclamation believes there are 
opportunities to further reduce the hurdles that limit the wide use of 
existing technology, such as the problems of inland concentrate 
management, and high energy consumption.
    Within this setting, Reclamation's vision is to provide 
opportunities that expand water supplies in a sustainable manner for 
western rural communities, Native Americans, and the western basins 
supporting Reclamation projects. Our goal is to advance the state of 
the art in high risk, applied research and development to reduce the 
cost of treating impaired waters, consistent with the administration's 
R&D investment criteria, and to use partnerships to accelerate the 
implementation of improved technology.
    Question. Please describe which broad BOR mission areas would be 
supported by the desalination research.
    Answer. The research serves our broad mission of increasing the 
usable water supplies for Reclamation projects, rural communities, and 
Native Americans.
    Question. What portion of the funds do you intend to provide for 
in-house research vs. extramural grants?
    Answer. Reclamation's R&D request for desalination research 
conducted in-house consists of about $1 million through the Science and 
Technology Program and an additional $680,000 through the Colorado 
River Basin Salinity Control Project (Title I). Reclamation's request 
for extramural desalination research consists of about $2.3 million 
through the Desalination and Water Purification Research Program and an 
additional $500,000 through the Water Reclamation and Reuse Program 
(Title XVI).
    Question. Please describe how you intend to coordinate with other 
Federal/State/local and commercial entities within the desalination 
research program.
    Answer. Reclamation has contracted with the National Academy of 
Sciences (NAS) to provide a contemporary assessment of the potential 
for desalination technologies to meet current and future water supply 
needs. The NAS report will also recommend appropriate roles for the 
Federal Government, private sector, State, and local communities in 
pursuing future research.
    The report was slated for completion in December 2007. By mid-2008, 
Reclamation plans to evaluate the NAS findings and update Reclamation's 
research strategies as appropriate. We will continue to work within 
existing water research coordination forums such as the Subcommittee on 
Surface Water Availability and Quality within the White House Office of 
Science and Technology, interagency groups such as the Interagency 
Consortium for Desalination Research and the Multi-State Salinity 
Coalition, as well as research and industry associations such as the 
American Membrane Technology Association, the International 
Desalination Association, the WateReuse Foundation, and the 
International Water Association--North American Membrane Research 
Conference.

              BUREAU OF RECLAMATION--GILA RIVER SETTLEMENT

    Question. Please explain why USBR funds for participating in this 
process are not included in the fiscal year 2008 budget.
    Answer. Reclamation's fiscal year 2008 budget request does include 
$250,000 within the Colorado River Basin Project-Central Arizona 
Project item to continue collecting and evaluating necessary 
preliminary environmental data to assist the State of New Mexico in 
deciding whether to build a New Mexico Unit. Current efforts focus on 
supporting New Mexico's collaborative efforts to create a planning 
process for evaluating the best use of potential withdrawals and 
funding provided under the Central Arizona Project, as modified by the 
Arizona Water Settlement Act, for the southwestern planning region of 
New Mexico.
    Question. How do you respond to the claim that the USBR and Fish 
and Wildlife have been less than cooperative in participating in the 
development of an environmental assessment?
    Answer. Reclamation is an active participant in the state of New 
Mexico decisionmaking process and has been since the Arizona Water 
Right Settlement Act was passed. A formal environmental assessment 
under NEPA and other environmental compliance activities including 
those under the Endangered Species Act will be performed when specific 
alternatives are proposed. Based on New Mexico's process for finalizing 
their decision to the Secretary by 2014, we anticipate the evaluation 
of alternatives and associated environmental compliance activities to 
begin in approximately 2010.
    Reclamation is an active participant in the State of New Mexico's 
decisionmaking process and has been since the AWSA was passed. Both 
Reclamation and FWS signed a Memorandum of Understanding with the New 
Mexico Interstate Stream Commission, the Southwest New Mexico Water 
Planning Group, and the New Mexico Office of the Governor in March 2006 
creating the Gila-San Francisco Coordinating Committee (GSFCC) to 
collaboratively evaluate the environmental effects of potential water 
withdrawals. Reclamation is a member of the GSFCC, one of the co-chairs 
of the Technical Subcommittee, a member of the Public Involvement 
Subcommittee, a member of Sandia National Laboratories decisionmaking 
model development team to assist in regional planning efforts, and an 
active participant in other collaborative efforts including the Gila 
Science Forums.
    Question. How do you plan to improve the Department's participation 
in the development of an environmental assessment?
    Answer. Reclamation is identified as the lead agency for 
environmental compliance with New Mexico as joint lead if they so 
request. In this role, Reclamation will continue to actively 
participate in all activities associated with the New Mexico Unit of 
the Central Arizona Project under the terms of the Arizona Water 
Settlements Act, and with the Gila-San Francisco Coordinating Committee 
and other committees as appropriate as New Mexico works through the 
collaborative decisionmaking process to determine the viability of a 
New Mexico Unit and other water utilization alternatives to meet water 
supply demands in the Southwest Water Planning Region of New Mexico. 
The Fish and Wildlife Service's support of Reclamation's environmental 
compliance activities is a key element in successfully fulfilling 
Reclamation's role.

                              RURAL WATER

    Question. What is the status of the USBR development of eligibility 
criteria that are due no later than December 22, 2007?
    Answer. Public Law 109-451, the Rural Water Act of 2006 (the 
``Act''), requires Reclamation to develop three sets of criteria to 
implement the Rural Water Program, within specified timeframes. The 
criteria include eligibility and prioritization criteria, which are due 
within 1 year after enactment of the Act; criteria for the evaluation 
of appraisal investigations, due within 1 year after enactment; and 
criteria for the evaluation of feasibility studies, due within 18 
months after enactment. Based on the language in the Act, Reclamation 
has determined that it is required to follow the rulemaking process in 
the Administrative Procedures Act in developing the criteria. Instead 
of conducting three separate rulemakings, Reclamation will include all 
three sets of criteria in a single rule. We believe this is a more 
timely and efficient option than conducting multiple rulemakings. 
However, because of the specific procedural requirements associated 
with the rulemaking process--which includes a 60-day public comment 
period--Reclamation will not be able to publish the rule by December 
22, 2007. Reclamation has developed a comprehensive draft of the rule, 
which includes all three sets of criteria. The draft rule is being 
reviewed internally, and we expect to publish it as an Interim Final 
Rule in the summer of 2008.
    Question. When does the USBR anticipate initiating the assessment 
of rural water needs?
    Answer. Section 104 of Public Law 109-451 requires the Secretary, 
in consultation with several other Federal departments and agencies, to 
undertake a comprehensive assessment of rural water programs and 
activities, to be completed by December 2008. Reclamation has begun 
this effort and expects to have the Assessment completed by the 
December 2008 deadline.

                             LOAN GUARANTEE

    Question. What progress has been made in implementing the loan 
guarantee program authorized under title II?
    Answer. The Bureau is continuing to address the administrative 
requirements of the program including proposed rules and eligibility 
requirements. We will keep the Committee informed of our progress.
                                 ______
                                 
              Questions Submitted by Senator Wayne Allard
    Question. There is potential that projects will be forced to return 
O&M to Reclamation when they cannot fund necessary replacement. Should 
this happen, how will Reclamation address problems at projects that 
fail?
    Answer. Reclamation continues to proactively seek assistance for 
responsible operating entities to be able to fund necessary 
replacements of project facilities and avoid the return of facilities 
to Reclamation for operation.
    Reclamation works with the local operators of our facilities to 
provide recommendations to reduce the risk of failure and to keep those 
facilities operable. However, if such entities are unable to afford the 
full cost of operation, maintenance and replacement (OM&R) of the 
facilities, then Reclamation has a limited set of options. If the 
entity cannot meet its OM&R responsibility (to fund necessary 
rehabilitation work), as stated in the provisions of its contract, 
Reclamation would have the option of reassuming the OM&R responsibility 
of the project facilities and billing the entity for all associated 
OM&R costs. In the extreme, Reclamation could choose to stop operation 
of the facility indefinitely and minimize OM&R costs for the local 
beneficiaries.
    Question. Does it not make sense for the Bureau to assist these 
projects before failures actually occur?
    Answer. In accordance with Reclamation law and contractual 
arrangements, Reclamation cannot directly provide financial assistance 
to the responsible operating entities in the OM&R of these project 
facilities. However, through its existing oversight and administrative 
activities, Reclamation can and will continue to provide some limited 
engineering and technical support in maintaining these project 
facilities for delivery of authorized project benefits. Additionally, 
Reclamation has been actively involved in seeking financial assistance 
for these entities.
    Question. Some Bureau projects utilize an off-river reservoir which 
depends largely on ``connecting structures''--often a canal system--to 
get water in and out of the reservoir. At such projects, without the 
canals, the dam would be useless and unnecessary. Why does the Bureau 
of Reclamation seem to place lower importance on these connecting 
structures even though they are a vital part of the project itself ?
    Answer. Historically, since 1948, Reclamation has consistently 
provided formal, routine condition assessments/inspections of all such 
``connecting structures'' under Reclamation's ``Review of Operation and 
Maintenance Program.'' Reclamation is acutely aware of the operational 
importance of these canal systems and structures to convey and deliver 
project benefits, whether it is to a dam/reservoir or directly to a 
canal distribution system. However, high- and significant-hazard dams, 
which have the potential to cause loss of life or significant property 
damage should they fail, receive a deservedly higher level of condition 
assessment attention.
    Question. Given geographical and geological uniqueness and varied 
construction dates I find it difficult to believe all Bureau of 
Reclamation projects are identical. Is it the opinion of the Bureau of 
Reclamation that all repayment contracts include ``replacement'' even 
when it is not stated in the contracts?
    Answer. All Reclamation projects are indeed not identical, as you 
state. However, Reclamation laws and authorities do provide a generally 
consistent way in which to administer contracts relative to these 
projects and related O&M of these facilities. Under the terms of O&M 
contracts (not repayment contracts) with operating entities and project 
beneficiaries, replacements and rehabilitation are considered 
``maintenance.'' Within the context of managing Reclamation's 
infrastructure, the O&M of project works involves a wide range of 
activities. These O&M activities encompass those actions necessary to 
achieve continued structural integrity and operational reliability in 
delivering authorized project benefits. Maintenance tasks include major 
repairs, rehabilitation, and equipment/facility replacements and 
additions.
    Question. I would like to ask that you answer this question to my 
office in writing, as a follow-up to this hearing: What is the Bureau 
of Reclamation's official definition of ``operations and maintenance'' 
and ``operations, maintenance and replacement''?
    Answer. Within the context of managing Reclamation's water and 
power infrastructure, the operation and maintenance of project works 
involves a wide range of activities. These operations and maintenance 
activities encompass those actions necessary to achieve continued 
structural integrity and operational reliability in delivering 
authorized project benefits. Additionally, as stated in Reclamation's 
``Report to the Congress, Annual Costs of Bureau of Reclamation Project 
Operation and Maintenance for fiscal years 1993-97,'' dated September 
1998, ``the most visible maintenance tasks are the major repairs and 
rehabilitations, equipment and facility replacements, and facilities 
additions that are accomplished at every project over time.'' As such, 
the ``maintenance'' term includes ``replacements'' and, therefore, the 
definitions for both ``operations and maintenance'' and ``operations, 
maintenance, and replacement'' are considered to be synonymous. 
Similarly, for contract administration purposes within Reclamation, 
replacements have always been included as part of maintenance 
responsibilities and costs.

                                DROUGHT

    Question. Commissioner Johnson, what are the drought conditions in 
the west like today?
    Answer. All of Reclamation's 17 western States are experiencing 
some level of drought conditions ranging in intensity from abnormally 
dry to extreme. Areas of concern include the southern third of 
California through Arizona which has experienced rainfall under 50 
percent of normal over the past 60 days. In the upper portion of the 
Great Plains including portions of North and South Dakota, drought 
conditions are spreading. Much of the West is experiencing above normal 
temperatures.
    Question. Commissioner Johnson, How much funding could you utilize 
for the remainder of fiscal year 2007 and early fiscal year 2008 for 
drought assistance?
    Answer. The funding provided in the supplemental appropriations, 
U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq 
Accountability Appropriations Act, 2007, Public Law 110-28, May 25, 
2007, is sufficient for the needs of the Drought program.
    Question. Commissioner Johnson, how much funding could you utilize 
for the remainder of fiscal year 2007 and early fiscal year 2008 for 
drought assistance?
    Answer. The funding provided in the supplemental appropriations, 
U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq 
Accountability Appropriations Act, 2007, Public Law 110-28, May 25, 
2007, is sufficient for the needs of the Drought program.

                         LOAN GUARANTEE PROGRAM

    Question. I have noticed in your budget that you are providing $1 
million to initiate implementation of the Loan Guarantee Program for 
rural water projects. As more than half of your projects are more than 
50 years old, I expect that this program has raised considerable 
interest in the West. How do you envision this program working?
    Answer. The law provides authority to issue loan guarantees for 
three categories of projects: (a) rural water supply projects; (b) 
repair and rehabilitation of Reclamation facilities; and (c) 
improvements to water infrastructure directly related to Reclamation 
projects.
    The Bureau is continuing to address the administrative requirements 
and the potential benefits of the program. We will keep the committee 
informed of our progress.
    Question. What will be the eligibility criteria?
    Answer. Eligibility criteria, developed through the formal 
rulemaking process, would include factors such as financial capability 
for repayment, engineering need and feasibility, historical diligence 
in performing routine operation and maintenance, environmental impacts, 
and efficiency opportunities.
    Question. Will this solve the recapitalization problems for many of 
the older projects in the West?
    Answer. This would not likely solve the recapitalization problems 
of older projects in the West, but will be a valuable tool to assist in 
meeting this challenge.
    Question. Will this serve the small water districts?
    Answer. Yes, smaller water districts would be an important focus of 
the program.

                          SUBCOMMITTEE RECESS

    Senator Dorgan. I thank all of you for being here. I'm 
sorry about the brevity but I must now go run and catch this 
vote. This hearing is recessed.
    [Whereupon, at 4:04 p.m., Thursday, March 15, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2008

                              ----------                              


                       WEDNESDAY, MARCH 21, 2007

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:03 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Byron L. Dorgan (chairman) 
presiding.
    Present: Senators Dorgan, Murray, Domenici, Craig, and 
Allard.

                          DEPARTMENT OF ENERGY

                           Office of Science

STATEMENT OF HON. RAYMOND L. ORBACH, DIRECTOR

              OPENING STATEMENT OF SENATOR BYRON L. DORGAN

    Senator Dorgan. The hearing will come to order. This is the 
Senate Appropriations Committee, the Subcommittee on Energy and 
Water Development. We are reviewing today the fiscal year 2008 
budget request for the Department of Energy's Office of 
Science. Mr. Orbach, we welcome you. Thank you for being here.
    The proposed budget for the Office of Science is $4.397 
billion. That represents 18 percent of the Department of 
Energy's total budget and an increase of $600 million above the 
Office of Science's budget in the year 2007.
    Mr. Orbach, perhaps sometime you can whisper to us the 
secret of your relationship with OMB, that you come here with a 
proposed $600 million budget increase. You, indeed, are a rare 
species in this coming fiscal year. However it happened, 
though, we think this is a good outcome. We're committed to 
improving our Nation's ability to compete in the ever-changing 
global market place and we recognize that we have to improve 
our Nation's capabilities in mathematics and the sciences if 
we're going to continue to lead the way in innovation.
    This is particularly true in the physical science fields, 
where the Department of Energy is the leader among Federal 
agencies. In the future our country will have to maintain 
leadership in innovation and development and the Office of 
Science will be one of the keys in our success in doing that.
    A substantial increase in funding raises some different 
questions than when programs face significant decreases. But 
underlying both circumstances is the basic question of whether 
there is a plan to accommodate the change in funding and, if 
so, what is that plan? A doubling of funding over 9 years, for 
example, is an admirable goal, but we have to make sure there 
exists a plan that meets a defined goal.
    Further, we have to have a plan to maintain our base 
infrastructure in order to take advantage of investments in new 
instruments and new facilities. It's not enough to make 
investments in new instruments and facilities here at home, or 
in partnerships abroad, if we don't maintain our base programs 
and facilities.
    So the Office of Science is exploring the development of a 
number of new projects that also could have significant future 
costs, significant costs if taken to construction. And we need 
to know that out year budgeting will assume, or is assuming the 
construction, operation, and the research cost associated with 
each of those projects.
    So, Dr. Orbach, thank you for your work. I look forward to 
hearing your testimony. But, first, I will turn to my 
colleagues for any opening statements they have.
    Senator Domenici.

             OPENING STATEMENT OF SENATOR PETE V. DOMENICI

    Senator Domenici. Thank you very much.
    We're moving in a direction--this small office becoming a 
very large and powerful one. Maybe it can stay small and be 
powerful and you've alluded to how that might be done in early 
parts of your comments. But, in any event it's going to have a 
much bigger impact, somewhere, somehow, that seems quite 
obvious to me.
    I think you would be interested to know that Chairman 
Bingaman and I introduced an amendment to the budget resolution 
to increase funding for science research by $1 billion. In 
addition to fully funding the President's budget request, it 
also adds funding to funds like the America Competes Act. Mr. 
Chairman, I hope that you will look at this amendment.
    Dr. Orbach, you have had a very important job. It is your 
responsibility to challenge our labs with new and exciting 
scientific goals, as well as making investment in facilities 
and infrastructure to ensure U.S. leadership. The Energy Policy 
Act included a provision elevating your position from Director 
to Under Secretary to give you responsibility to set the 
science policies for the labs, including all of the NNSA 
facilities. And you will note that, the labs continue to 
support the best science in the world. Unfortunately, the 
funding provided by the Office of Science to these labs remains 
disproportionately low. The NNSA labs have great facilities 
that have been exclusively tools of the weapons program that 
should be incorporated into the Office of Science programs. 
Facilities, such as the Z machine and the MESA at Sandia will 
be open to tremendous new research opportunities to scientists 
and must be thought of as national user facilities.
    I understand that you are making some progress to develop a 
multi-agency board that will develop a high energy density 
plasma program consistent with the direction that I included in 
the 2006-2007 Energy and Water bills.
    I want you to know that I appreciate this bill. I still 
expect to see a viable research program that supports non-
weapons research on facilities like NIF and Z. I would also 
like to remind you of the tremendous computational capability 
and experience at the NNSA labs. As you know, it was the NNSA 
stockpile stewardship mission that fostered the undeveloped, 
high performance computing architecture that enabled this 
country to be the world leader in computing. Unfortunately, I 
don't believe the Department has dedicated sufficient resource, 
nor demonstrated its commitment to developing the next 
generation of architecture that will enable our country to 
sustain its world leadership in this field.
    Finally, let me say that I believe we need to work hard to 
address our climate challenges, and science will play a 
critical role in this, I believe. And, I believe we have two 
paths to reduce the man-made greenhouse gas emissions. And 
unless we pursue both, we won't be effective at all.
    First, of course, is to reduce our dependence on foreign 
oil with biomass and alternative energy as well as developing 
low emission energy sources such as nuclear power. 
Implementation of EPACT and the American Competitiveness 
Initiative will ensure we are on the right path.
    The second is to ensure that large, fast growing economies 
like China and India adopt these same technologies. We need to 
join with these countries as full partners to ensure that 
technology development and adoption occurs. Without it, we 
won't be successful. I'm committed to developing a full 
partnership with China and India, but they need to recognize 
that this isn't a free ride. It is a partnership. They need to 
dedicate the resources to solving this problem.
    Thank you, Mr. Chairman.
    [The statement follows:]

             Prepared Statement of Senator Pete V. Domenici

    Dr. Orbach, it is a pleasure to welcome you back to the 
subcommittee. I am pleased with the fiscal year 2008 budget request for 
the Office of Science because it continues to support objectives 
provided for in EPACT and sustains the President's commitment to double 
funding for basic science research over the next decade.
    This research is vital to our economic competitiveness and our 
ability to reduce our dependence on foreign energy, including solving 
some of the long term R&D challenges associated with solar, biomass, 
hydrogen and nuclear power.
    Dr. Orbach, you have another important responsibility and that is 
to challenge our labs with new and exciting scientific goals as well as 
making investments in facilities and infrastructure to ensure U.S. 
leadership.
    The Energy Policy Act included a provision elevating your position 
from Director to Under Secretary to give you the responsibility to set 
the science policy for all the labs, including NNSA facilities.
    As you well know, NNSA labs continue to support some of the best 
science in the world and have been recognized with Nobel prizes, E.O. 
Lawrence Awards and dozens of R&D 100 Awards. Unfortunately, the 
funding provided by the Office of Science remains disproportionately 
low.
    The NNSA labs have great facilities that have been the exclusive 
tools of the weapons program that should be incorporated into the 
Office of Science research programs. Facilities such as the Z machine 
and MESA at Sandia will open up tremendous new research opportunities 
to scientists and must be thought of as national user facilities.
    I understand that you are making some progress to develop a multi-
agency advisory board that will develop the high energy density plasma 
program consistent with the direction that I included in the fiscal 
year 2006 and fiscal year 2007 Energy and Water bills.
    I want you to know that I appreciate this effort, but I still 
expect to see a viable research program that supports non weapons 
research on facilities like NIF and Z.
    I would also like to remind you of the tremendous computational 
capability and experience at NNSA labs. As you know, it was NNSA's 
Stockpile Stewardship mission that necessitated the development of the 
current high performance computing architecture that has enabled this 
country to be the world leader in computing.
    As a result, this has also enabled the Office of Science to deploy 
some of the fastest computers in the world at Oak Ridge, Berkeley and 
Argonne National labs.
    Unfortunately, I don't believe the Department has dedicated 
sufficient resources, nor demonstrated its commitment to developing the 
next generation architecture that will enable our country to sustain 
its leadership in this field.
    We continue to have two separate computing programs and this budget 
diverts resources to DARPA to support a separate R&D program. That must 
change.
    These problems can be solved, but it will force the Office of 
Science and NNSA to work together on improving scientific research at 
all of our labs.
    Dr. Orbach, I hope I can count on your support to breakdown the 
walls of bureaucracy to solve this problem.
    Thank you, Mr. Chairman.

    Senator Dorgan. Senator Craig.

                    STATEMENT OF SENATOR LARRY CRAIG

    Senator Craig. Mr. Chairman, I'll be brief. Mr. Secretary, 
thank you, for being here and thank you for coming to the Idaho 
lab, the INL, last August. We appreciated your presence there, 
and I am told you left impressed with the resource and the 
talent that is available. We have some phenomenal assets and 
when I'm sitting here listening to Senator Domenici, I'm 
thinking about the old admonishment in front of the United 
Nations, ``swords into plow shares.'' And, the ability for us 
to use these phenomenal laboratories that were once, in part, 
related to the cold war, some of them more so than others.
    Now with assets that they have, that were once for war, can 
not only be made for peace, but we've already begun to use the 
tremendous capabilities and talents that are there for those 
purposes. We have, at our laboratory, some of those unique 
resources, as you know, the advanced test reactor, the ability 
to relate it, not just to a Federal mission, but to private and 
quasi-public relationships, I think is extremely valuable. It 
is a national asset, unique in many ways, that--something I'll 
discuss with you later on in questioning, but making it a user 
facility, I think, becomes increasingly important as we work 
with and--I was just visiting with Clay Sell today and Dennis 
Spurgeon. New partnerships between the Federal Government and 
the private sector. The Federal Government used to be this 
great black box and DOE especially, into which all things went, 
especially money.
    Today we have phenomenal demand for what can be produced. 
We don't have the resources, unless we partner and we leverage 
with the private sector. Not just our private sector, but the 
world's private sector. Because most of what we want to do 
needs to be very transparent and available to the rest of the 
world, whether it's clean energy sources, whether it's human 
health, and all of those types of things. I'm pleased to see 
that we're focusing. We've spent a lot of money, appropriately 
so directed at, by the biological sciences over the last 
decade. Now I think it's time we pony up on the physical 
sciences because they're merging out there in a way that 
probably we could never predicted a decade ago. And, in that is 
great opportunity.
    Thank you.
    Senator Dorgan. Senator Allard.

                   STATEMENT OF SENATOR WAYNE ALLARD

    Senator Allard. Mr. Chairman, thank you for holding this 
hearing. And, welcome, Mr. Secretary. As you know, Mr. 
Chairman, you and I are co-chairmen of the Senate Renewable 
Energy and Energy Efficiency Caucus. And, I represent a State, 
which, we have the National Renewable Energy Laboratory. 
They're doing a lot of good work. They're working on basic 
technologies, moving those into the marketplace. I think that's 
a proper focus. And as a scientist, myself, I consider myself 
an applied scientist. Being a veterinarian, I understand how 
good basic research has to be done in order for me as a 
veterinarian, to be able to take care of the livestock 
industry, or pet animals, whether it's working for the CDC Lab, 
or FDA, or whatever. And, it all comes down to a lot of good 
basic research that has to be done.
    I note that the Office of Science is the primary agency in 
the Federal Government in energy-related basic research. I 
think this a very important distinction that should be pointed 
out. While basic scientific research is the basis for applied 
sciences and leads to scientific advancement, it is often not 
profitable, so industry struggles to invest in basic research. 
This is where the government comes in, by funding basic 
research. It is picked up by industry and the advanced science 
communities.
    I've had time to go and visit many of our laboratories, 
been out to Lawrence Livermore, been to Sandia Laboratory that 
Senator Domenici mentioned, Los Alamos Lab, and have been 
following much of the research in MOx Plus, for example. And, I 
feel that this is where it all starts.
    We heard a presentation this morning from Ron Sega who was 
talking about our satellite program. He talked about his cycle 
of development. It all starts with good scientific basic 
research. And then you develop it to applied, then you get your 
prototype level, and then you get into the production stage. 
And, so I really can't stress how important I think your job is 
and responsibilities are.
    More attention today is being focused on clean energy and 
energy efficiency technologies due to ever-increasing supply 
constraints and demand increases, diversification of our energy 
portfolios becoming more important than ever. This means the 
development of alternative energy sources is also more 
important than ever. Renewable energy is a very important way 
that we can begin to reduce the demand for oil, and thereby 
help to make our country more secure. Research and the input of 
both government and industries are very important allowing 
these opportunities to live up to their potential.
    We must continue to provide incentives for the 
implementation of renewable technologies and for the 
infrastructure necessary to support these renewable sources. 
These technologies are a necessary step in balancing our 
domestic energy portfolio, increasing our Nation's energy 
security, and advancing our country's technological excellence.
    So, I look forward to working with the committee to ensure 
research and development, in all fields of energy technology, 
are funded in a manner that is responsible, but sufficient to 
ensure that the development and implementation of new 
technologies continues.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Murray.

                   STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. Mr. Chairman, thank you to you and Senator 
Domenici for having this important hearing. I think the Office 
of Science is very important and investment in research and 
development is obviously critical. Dr. Orbach, I'm glad to see 
you again. This hearing gives us another opportunity to talk 
about the Capability Replacement Laboratory for PNNL. This 
project is a top priority for the lab and I have a couple of 
questions regarding the funding for that project. As you know 
there were no funds in the fiscal year 2007 budget request but 
Congress added $10 million to the Office of Science for the 
effort. I was pleased to hear from you recently that the 
additional $10 million would be included in the fiscal year 
2007 work plan. However, I understand that funding is being 
held in reserve and can't be utilized until OMB approves the 
third party financing package. I also understand the fund 
requested in the fiscal year 2008 budget will also be held in 
reserve pending OMB approval.
    Would you share with the committee what you intend to do to 
prevent delay of this critical project?
    Senator Dorgan. Senator, actually, Mr. Orbach has not yet 
given his opening statement.
    Senator Murray. Oh, I apologize. I came in late and didn't 
realize we had not heard Dr. Orbach's opening statement.
    Senator Dorgan. I would like to give him the opportunity to 
give his opening statement.
    All right. Thank you very much.
    Senator Cochran has submitted a statement that he would 
like placed in the record.
    [The statement follows:]

               Prepared Statement of Senator Thad Cochran

    Mr. Chairman, I am pleased to join you in welcoming the Under 
Secretary for Science, Dr. Raymond Orbach. I am pleased that we were 
able to increase the budget for the Office of Science under the 
Continuing Resolution for fiscal year 2007.
    As Under Secretary for Science and Director of the Office of 
Science, Dr. Orbach has had the responsibility of overseeing research 
and development at 17 national laboratories across the country, 
including both the National Nuclear Security Laboratories and the 
Office of Science Laboratories. I am pleased that the fiscal year 2008 
budget includes funding to continue the American Competitiveness 
Initiative, a program that has become increasingly important to our 
scientific community in America.
    Of particular interest to me is the Basic Energy Sciences program 
which supports the Advanced Energy Initiative and biomass production 
research. Mississippi has much to contribute in the emerging biomass 
arena, and it is my hope that the universities and scientists in 
Mississippi might work with your researchers in the Office of Science 
to further develop this field.
    It is a pleasure to welcome you to the committee. I look forward to 
hearing your testimony.

    Senator Dorgan. Secretary Orbach, thank you very much. 
Please proceed. Your entire statement will be a part of the 
permanent record, and you may summarize.

                  STATEMENT OF HON. RAYMOND L. ORBACH

    Dr. Orbach. Thank you, Chairman Dorgan, Senator Domenici, 
members of the committee. And, indeed, I will answer those 
questions.
    I'm very grateful. Thank you for this opportunity for me to 
present the President's fiscal year 2008 budget request for the 
Department of Energy's Office of Science.
    As some of you noted, we are the primary agency in the 
Federal Government for energy-related basic research. Our 
office interfaces with the Department's applied research and 
defense programs upon which our Nation relies for both energy 
security and national defense. Our goal is to underpin the 
applied research programs with the finest basic science and, at 
the same time, to energize our basic research with the insights 
and opportunities that come from advanced applied research.
    Transformational basic science discoveries are essential 
for the success of the Department's efforts in such renewable 
energy sources as hydrogen, solar power, and bio-fuels. And in 
electrical energy storage, which is critical for many renewable 
energy sources because they are intermittent. We are one 
department and we have been working very hard to strengthen the 
relationship between the Department's basic and applied 
research programs.
    Let me say a few words this afternoon about the critical 
role that basic science plays in addressing our Nation's energy 
challenge and the role of the Office of Science. First, 
cellulosic ethanol. To make this bio-fuel truly cost effective, 
we must produce ethanol from cellulose efficiently. The problem 
is that the lignins surrounding the cellulose in plants inhibit 
currently available enzymes from breaking down the cellulose to 
sugars that then are fermented into ethanol.
    The Office of Science will be deploying three new 
innovative bioenergy research centers, studying both microbes 
and plants, developing new methods, based on processes actually 
found in nature, to create the breakthroughs we need.
    I can give you an example. Our Department of Energy Joint 
Genome Institute recently announced in conjunction with the 
U.S. Forest Service, the identification of the metabolic 
pathway in a fungus found in the bowels of insects that holds 
the secret to effective fermentation of the sugar xylose, a key 
to making cellulosic ethanol cost-effective.
    Second, intermittent sources of electricity, such as solar 
and wind. The key to base-load electrical generation from these 
intermittent renewable sources is electrical energy storage. In 
April of this year, we'll be bringing together leading 
scientists, technologists, and industry at a major workshop to 
chart a transformational path forward for electrical energy 
storage. We shall be considering super-capacitors and other 
innovative approaches based on the latest advances in material 
science and nanotechnology to change the way we approach 
electrical energy storage. Solving this problem is a key to 
enabling renewable energy to make major contributions to 
electric base-load generation.
    These are examples of our mission in the Office of Science. 
To invest in basic research designed to create transformational 
breakthroughs for our Nation. Supporting transformational 
research also means providing cutting-edge scientific 
facilities through our national laboratories that will allow 
scientists from universities and the private sector to do the 
analysis that will give them an advantage over their colleagues 
in other countries, thereby contributing to American 
competitiveness. It means educating, training, and sustaining a 
world-class scientific workforce, thousands strong, 25,500 in 
our fiscal year 2008 budget in universities and laboratories 
across our Nation for the sake of our country's future.

                           PREPARED STATEMENT

    We are not doing this in a vacuum. Other nations are 
increasing their investment in basic research because they know 
those who dominate science will dominate the 21st century 
global economy. The President's fiscal year 2008 budget request 
for the Office of Science totals $4.4 billion, an increase of 
15.8 percent or $600 million over the fiscal year 2007 
appropriation. It is an important milestone on the path towards 
doubling Federal support for basic research and the physical 
sciences over the next 10 years.
    And, in my view, an indispensable investment in our 
Nation's energy security and America's continued 
competitiveness in the global economy.
    Thank you.
    [The statement follows:]

              Prepared Statement of Hon. Raymond L. Orbach

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

                                        OFFICE OF SCIENCE FISCAL YEAR 2008 PRESIDENT'S REQUEST SUMMARY BY PROGRAM
                                                                [In thousands of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Fiscal Year                    Fiscal Year 2008 Request vs.
                                                            Fiscal Year     Fiscal Year        2007         Fiscal Year  -------------------------------
                                                           2006 Approp.    2007 Request     Approp.\1\     2008 Request       Request         Approp.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Basic Energy Sciences...................................       1,110,148       1,420,980  ..............       1,498,497         +77,517  ..............
Advanced Scientific Computing Research..................         228,382         318,654  ..............         340,198         +21,544  ..............
Biological and Environmental Research...................         564,077         510,263  ..............         531,897         +21,634  ..............
High Energy Physics.....................................         698,238         775,099  ..............         782,238          +7,139  ..............
Nuclear Physics.........................................         357,756         454,060  ..............         471,319         +17,259  ..............
Fusion Energy Sciences..................................         280,683         318,950  ..............         427,850        +108,900  ..............
Science Laboratories Infrastructure.....................          41,684          50,888  ..............          78,956         +28,068  ..............
Science Program Direction...............................         159,118         170,877  ..............         184,934         +14,057  ..............
Workforce Development for Teachers and Scientists.......           7,120          10,952  ..............          11,000             +48  ..............
Safeguards and Security.................................          68,025          70,987  ..............          70,987  ..............  ..............
SBIR/STTR...............................................         116,813  ..............  ..............  ..............  ..............  ..............
                                                         -----------------------------------------------------------------------------------------------
      Total, Office of Science..........................       3,632,044       4,101,710       3,797,294       4,397,876        +296,166        +600,582
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Fiscal year 2007 program allocation plan not yet finalized.

                  FISCAL YEAR 2008 SCIENCE PRIORITIES

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

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

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

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

                        SCIENCE ACCOMPLISHMENTS

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

                   PROGRAM OBJECTIVES AND PERFORMANCE

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

                            SCIENCE PROGRAMS

Basic Energy Sciences
            Fiscal Year 2007 Request--$1,421.0 Million; Fiscal Year 
                    2008 Request--$1,498.5 Million
    Basic research supported by the Basic Energy Sciences (BES) program 
touches virtually every aspect of energy resources, production, 
conversion, efficiency, and waste mitigation. Research in materials 
sciences and engineering leads to the development of materials that may 
improve the efficiency, economy, environmental acceptability, and 
safety of energy generation, conversion, transmission, and use. 
Research in chemistry leads to the development of advances such as 
efficient combustion systems with reduced emission of pollutants; new 
solar photo-conversion processes; improved catalysts for the production 
of fuels and chemicals; and better separations and analytical methods 
for applications in energy processes, environmental remediation, and 
waste management. Research in geosciences contributes to the solution 
of problems in multiple DOE mission areas, including reactive fluid 
flow studies to understand contaminant remediation and seismic imaging 
for reservoir definition. Research in the molecular and biochemical 
nature of photosynthesis aids the development of solar photo-energy 
conversion and biomass conversion methods. BES asks researchers to 
reach far beyond today's problems in order to provide the basis for 
long-term solutions to what is one of society's greatest challenges--a 
secure, abundant, and clean energy supply. In fiscal year 2008, the 
Office of Science will support expanded efforts in basic research 
related to transformational energy technologies. Within BES, there are 
increases to ongoing basic research for the hydrogen economy and 
effective solar energy utilization. The fiscal year 2008 budget request 
also supports increased research in electric-energy storage, 
accelerator physics, and X-ray and neutron detector research.
    BES also provides the Nation's researchers with world-class 
research facilities, including reactor- and accelerator-based neutron 
sources, light sources (soon to include an X-ray free electron laser), 
nanoscale science research centers, and electron beam micro-
characterization centers. These facilities provide outstanding 
capabilities for imaging and characterizing materials of all kinds from 
metals, alloys, and ceramics to fragile biological samples. The next 
steps in the characterization and the ultimate control of materials 
properties and chemical reactivity are to improve spatial resolution of 
imaging techniques; to enable a wide variety of samples, sample sizes, 
and sample environments to be used in imaging experiments; and to make 
measurements on very short time scales, comparable to the time of a 
chemical reaction or the formation of a chemical bond. With these 
tools, we will be able to understand how the composition of materials 
affects their properties, to watch proteins fold, to see chemical 
reactions, and to understand and observe the nature of the chemical 
bond. For fiscal year 2008, BES scientific user facilities will be 
scheduled to operate at an optimal number of hours.
    Construction of the Spallation Neutron Source (SNS) was completed 
in fiscal year 2006 ahead of schedule, under budget, and meeting all 
technical milestones. In fiscal year 2008 fabrication and commissioning 
of SNS instruments will continue, funded by BES and other sources 
including non-DOE sources, and will continue to increase power towards 
full levels. Two Major Items of Equipment are funded in fiscal year 
2008 that will allow the fabrication of approximately nine to ten 
additional instruments for the SNS, thus nearly completing the initial 
suite of 24 instruments that can be accommodated in the high-power 
target station.
    All five Nanoscale Science Research Centers will be fully 
operational in fiscal year 2008: the Center for Nanophase Materials 
Sciences at Oak Ridge National Laboratory, the Molecular Foundry at 
Lawrence Berkeley National Laboratory, the Center for Nanoscale 
Materials at Argonne National Laboratory, the Center for Integrated 
Nanotechnologies at Sandia National Laboratories and Los Alamos 
National Laboratory, and the Center for Functional Nanomaterials at 
Brookhaven National Laboratory. In fiscal year 2008, funding for 
research at the nanoscale increases for activities related to the 
hydrogen economy and solar energy utilization.
    The Linac Coherent Light Source (LCLS) at the Stanford Linear 
Accelerator Center (SLAC) will continue construction at the planned 
levels in fiscal year 2008. Funding is also provided for primary 
support of the operation of the SLAC linac. This marks the third year 
of the transition of linac funding from the High Energy Physics program 
to the Basic Energy Sciences program. The purpose of the LCLS Project 
is to provide laser-like radiation in the X-ray region of the spectrum 
that is 10 billion times greater in peak power and peak brightness than 
any existing coherent X-ray light source and that has pulse lengths 
measured in femtoseconds--the timescale of electronic and atomic 
motions. The LCLS will be the first such facility in the world for 
groundbreaking research in the physical and life sciences. Funding is 
provided separately for design and fabrication of instruments for the 
facility. Project Engineering and Design (PED) and construction for the 
Photon Ultrafast Laser Science and Engineering (PULSE) building 
renovation begins in fiscal year 2008. PULSE is a new center for 
ultrafast science at SLAC focusing on ultrafast structural and 
electronic dynamics in materials sciences, the generation of attosecond 
laser pulses, single-molecule imaging, and understanding solar energy 
conversion in molecular systems. Support continues for PED and R&D for 
the National Synchrotron Light Source-II (NSLS-II), which would be a 
new synchrotron light source, highly optimized to deliver ultra-high 
brightness and flux and exceptional beam stability. This would enable 
the study of material properties and functions with a spatial 
resolution of one nanometer (nm), an energy resolution of 0.1 
millielectron volt (meV), and the ultra-high sensitivity required to 
perform spectroscopy on a single atom, achieving a level of detail and 
precision never possible before. NSLS-II would open new regimes of 
scientific discovery and investigation.
    The Scientific Discovery through Advanced Computing (SciDAC) 
program is a set of coordinated investments across all Office of 
Science mission areas with the goal of using computer simulation to 
achieve breakthrough scientific advances that are impossible using 
theoretical or laboratory studies alone. The SciDAC program in BES 
consists of two activities: (1) characterizing chemically reacting 
flows as exemplified by combustion and (2) achieving scalability in the 
first-principles calculation of molecular properties, including 
chemical reaction rates.
Advanced Scientific Computing Research
            Fiscal Year 2007 Request--$318.7 Million; Fiscal Year 2008 
                    Request--$340.2 Million
    The Advanced Scientific Computing Research (ASCR) program is 
expanding the capability of world-class scientific research through 
advances in mathematics, high performance computing and advanced 
networks, and through the application of computers capable of many 
trillions of operations per second (terascale to petascale computers). 
Computer-based simulation can enable us to understand and predict the 
behavior of complex systems that are beyond the reach of our most 
powerful experimental probes or our most sophisticated theories. 
Computational modeling has greatly advanced our understanding of 
fundamental processes of nature, such as fluid flow and turbulence or 
molecular structure and reactivity. Soon, through modeling and 
simulation, we will be able to explore the interior of stars to 
understand how the chemical elements were created and learn how protein 
machines work inside living cells to enable the design of microbes that 
address critical energy or waste cleanup needs. We could also design 
novel catalysts and high-efficiency engines that expand our economy, 
lower pollution, and reduce our dependence on foreign oil. 
Computational science is increasingly important to making progress at 
the frontiers of almost every scientific discipline and to our most 
challenging feats of engineering. Leadership in scientific computing 
has become a cornerstone of the Department's strategy to ensure the 
security of the Nation and success in its science, energy, 
environmental quality, and national security missions.
    The demands of today's facilities, which generate millions of 
gigabytes of data per year, now outstrip the capabilities of the 
current Internet design and push the state-of-the-art in data storage 
and utilization. But, the evolution of the telecommunications market, 
including the availability of direct access to optical fiber at 
attractive prices and the availability of flexible dense wave division 
multiplexing (DWDM) products gives SC the possibility of exploiting 
these technologies to provide scientific data where needed at speeds 
commensurate with the new data volumes. To take advantage of this 
opportunity, the Energy Science Network (ESnet) has entered into a long 
term partnership with Internet 2 to build the next generation optical 
network infrastructure needed for U.S. science. To fully realize the 
potential for science, however, significant research is needed to 
integrate these capabilities, make them available to scientists, and 
build the infrastructure which can provide cybersecurity. ASCR is 
leading an interagency effort to develop a Federal Plan for Advanced 
Networking R&D. This plan will provide a strategy for addressing 
current and future networking needs of the Federal Government in 
support of science and national security missions and provide a process 
for developing a more detailed roadmap to guide future multi-agency 
investments in advancing networking R&D.
    ASCR supports core research in applied mathematics, computer 
sciences, and distributed network environments. The applied mathematics 
research activity produces fundamental mathematical methods to model 
complex physical and biological systems. The computer science research 
efforts enable scientists to perform scientific computations 
efficiently on the highest performance computers available and to 
store, manage, analyze, and visualize the massive amounts of data that 
result. The networking research activity provides the techniques to 
link the data producers with scientists who need access to the data. 
Results from enabling research supported by ASCR are used by scientists 
supported by other SC programs. This link to other DOE programs 
provides a tangible assessment of the value of ASCR's core research 
program for advancing scientific discovery and technology development 
through simulations. In fiscal year 2008 expanded efforts in applied 
mathematics will support critical long-term mathematical research 
issues relevant to petascale science, multiscale mathematics, and 
optimized control and risk analysis in complex systems. Expanded 
efforts in computer science will enable scientific applications to take 
full advantage of petascale computing systems at the Leadership 
Computing Facilities.
    In addition to its research activities, ASCR plans, develops, and 
operates supercomputer and network facilities that are available 24 
hours a day, 365 days a year to researchers working on problems 
relevant to DOE's scientific missions. Investments in the ESnet will 
provide the DOE science community with capabilities not available 
through commercial networks or the commercial internet to manage 
increased data flows from petascale computers and experimental 
facilities. In fiscal year 2008 ESnet will deliver a 10 gigabit per 
second (gbps) core Internet service as well as a Science Data Network 
with 20 gbps on its northern route and 10 gbps on its southern route. 
Delivery of the next generation of high performance resources at the 
National Energy Research Scientific Computing Center (NERSC) is 
scheduled for fiscal year 2007. This NERSC-5 system is expected to 
provide 100-150 teraflops of peak computing capacity. The NERSC 
computational resources are integrated by a common high performance 
file storage system that enables users to use all machines easily. 
Therefore the new machine will significantly reduce the current 
oversubscription at NERSC which serves nearly 2,000 scientists 
annually.
    In fiscal year 2008, the Oak Ridge National Laboratory (ORNL) 
Leadership Computing Facility (LCF) will continue to provide world 
leading high performance sustained capability to researchers through 
the Innovative and Novel Computational Impact on Theory and Experiment 
(INCITE) program. The acquisition of a 250 teraflop Cray Baker system 
by the end of fiscal year 2008 will enable further scientific 
advancements in areas such as combustion simulation for clean coal 
research, simulation of fusion devices that approach ITER scale, and 
quantum calculations of complex chemical reactions. In addition, 
further diversity with the LCF resources will be realized with an 
acquisition by Argonne National Laboratory (ANL) of a high performance 
IBM Blue Gene/P with low-electrical power requirements and a peak 
capability of up to 100 teraflops in 2007, and further expansion to 
250-500 teraflops in fiscal year 2008 will bring enhanced capability to 
accelerate scientific understanding in areas such as molecular 
dynamics, catalysis, protein/DNA complexes, and aging of material. With 
the ORNL and ANL LCF facilities SC is developing a multiple set of 
computer architectures to enable the most efficient solution of 
critical problems across the spectrum of science, ranging from biology 
to physics and chemistry.
    The Scientific Discovery through Advanced Computing (SciDAC) 
program is a set of coordinated investments across all SC mission areas 
with the goal of using computer simulation and advanced networking 
technologies to achieve breakthrough scientific advances via that are 
impossible using theoretical or laboratory studies alone. In fiscal 
year 2006 ASCR recompeted its SciDAC portfolio, with the exception of 
activities in partnership with the Fusion Energy Sciences program that 
were initiated in fiscal year 2005. The new portfolio, referred to as 
SciDAC-2, enables new areas of science through Scientific Application 
Partnerships; Centers for Enabling Technologies (CET) at universities 
and national laboratories; and University-led SciDAC Institutes to 
establish centers of excellence that complement the activities of the 
CETs and provide training for the next generation of computational 
scientists.
    Advancing high performance computing and computation is a highly 
coordinated interagency effort. ASCR has extensive partnerships with 
other Federal agencies and the National Nuclear Security Administration 
(NNSA). Activities are coordinated with other Federal efforts through 
the Networking and Information Technology R&D (NITR&D) subcommittee of 
the National Science and Technology Council Committee on Technology. 
The subcommittee coordinates planning, budgeting, and assessment 
activities of the multi-agency NITR&D enterprise. DOE has been an 
active participant in these coordination groups and committees since 
their inception. ASCR will continue to coordinate its activities 
through these mechanisms and will lead the development of new 
coordinating mechanisms as needs arise such as the ongoing development 
of a Federal Plan for Advanced Networking R&D.
Biological and Environmental Research
            Fiscal Year 2007 Request--$510.3 Million; Fiscal Year 2008 
                    Request--$531.9 Million
    Biological and Environmental Research (BER) supports basic research 
with broad impacts on our energy future, our environment, and our 
health. By understanding complex biological systems, developing 
computational tools to model and predict their behavior, and developing 
methods to harness nature's capabilities, biotechnology solutions are 
possible for DOE energy, environmental, and national security 
challenges. An ability to predict long-range and regional climate 
enables effective planning for future needs in energy, agriculture, and 
land and water use. Understanding the global carbon cycle and the 
associated role and capabilities of microbes and plants can lead to 
solutions for reducing carbon dioxide concentrations in the atmosphere. 
Understanding the complex role of biology, geochemistry, and hydrology 
beneath the Earth's surface will lead to improved decision making and 
solutions for contaminated DOE weapons sites. Understanding the 
biological effects of low doses of radiation can lead to the 
development of science-based health risk policy to better protect 
workers and citizens. Both normal and abnormal physiological 
processes--from normal human development to cancer to brain function--
can be understood and improved using radiotracers, advanced imaging 
instruments, and novel biomedical devices.
    The fiscal year 2008 BER request continues expansion of the 
Genomics: GTL program. This program employs a systems approach to 
biology at the interface of the biological, physical, and computational 
sciences to determine the diverse biochemical capabilities of microbes, 
microbial communities, and plants, with the goal of tailoring and 
translating those capabilities into solutions for DOE mission needs. In 
fiscal year 2005 BER engaged a committee of the National Research 
Council (NRC) of the National Academies to review the design of the 
Genomics: GTL program and its infrastructure plan. The NRC committee 
report, Review of the Department of Energy's Genomics: GTL Program was 
released in fiscal year 2006 and provided a strong endorsement of the 
GTL program, recommending that the program's focus on systems biology 
for bioenergy, carbon sequestration, and bioremediation be given a 
``high priority'' by DOE and the Nation. The report also recommended 
that the program's plan for new research facilities be reshaped to 
produce earlier and more cost-effective results by focusing not on 
particular technologies, but on research underpinning particular 
applications such as bioenergy, carbon sequestration, or environmental 
remediation.
    In response, SC revised its original single-purpose user facilities 
plan to instead develop and support vertically-integrated GTL Research 
Centers to accelerate systems biology research. BER will support the 
development of three Bioenergy Research Centers to be selected and 
initiated in fiscal year 2007, and fully operational by the end of 
2008. All three centers will conduct comprehensive, multidisciplinary 
research programs focused on microbes and plants to drive scientific 
breakthroughs necessary for the development of cost-effective biofuels 
and bioenergy production. These centers will not only possess the 
robust scientific capabilities needed to carry out their broad mission 
mandates, but will also draw upon the broader GTL program for 
technology development and foundational research. The vertically-
integrated GTL Research Centers will not require construction of 
facilities. Moreover, the competition to establish and operate them is 
open to universities, non-profit research organizations, the national 
laboratories, and the private sector--an approach that is new for the 
Department. The first three research centers will focus on bioenergy 
research. The Department announced the solicitation for Bioenergy 
Research Centers in August 2006, and proposals were due on February 1, 
2007.
    Development of a global biotechnology based energy infrastructure 
requires a science base that will enable scientists to control or 
redirect genetic regulation and redesign specific proteins, biochemical 
pathways, and even entire plants or microbes. Renewable biofuels could 
be produced using plants, microbes, or isolated enzymes. Understanding 
the biological mechanisms involved in these energy producing processes 
will allow scientists and technologists to design novel biofuel 
production strategies involving both cellular and cell free systems 
that might include defined mixed microbial communities or consolidated 
biological processes. Within the Genomics: GTL program, BER supports 
basic research aimed at developing the understanding needed to advance 
biotechnology-based strategies for biofuel production, focusing on 
renewable, carbon-neutral energy compounds like ethanol and hydrogen, 
as well as understanding how the capabilities of microbes can be 
applied to environmental remediation and carbon sequestration.
    In 2003, the administration launched the Climate Change Research 
Initiative (CCRI) to focus research on areas where substantial progress 
in understanding and predicting climate change, including its potential 
causes and consequences, is possible over the next 5 years. In fiscal 
year 2008, BER will contribute to the CCRI by focusing on (1) helping 
to resolve the North American carbon sink question (i.e., the magnitude 
and location of the North American carbon sink); (2) deployment and 
operation of a mobile ARM facility to provide data on the effects of 
clouds and aerosols on the atmospheric radiation budget in regions and 
locations of opportunity where data are lacking or sparse; (3) using 
advanced climate models to simulate potential effects of natural and 
human-induced climate forcing on global and regional climate and the 
potential effects on climate of alternative options for mitigating 
increases in human forcing of climate, including abrupt climate change; 
and (4) developing and evaluating assessment tools needed to study 
costs and benefits of potential strategies for reducing net carbon 
dioxide emissions.
    In fiscal year 2008, BER will continue to support research aimed at 
advancing the science of climate and Earth system modeling by coupling 
models of different components of the earth system related to climate 
and by significantly increasing the spatial resolution of such models. 
SciDAC-enabled activities will allow climate scientists to gain 
unprecedented insights into interactions and feedbacks between, for 
example, climate change and global cycling of carbon, the potential 
effects of carbon dioxide and aerosol emissions from energy production 
and their impact on the global climate system. BER will also add a 
SciDAC component to GTL and Environmental Remediation research. GTL 
SciDAC will initiate new research to develop mathematical and 
computational tools needed for complex biological system modeling and 
for analysis of complex data sets, such as mass spectrometry 
metabolomic or proteomic profiling data. Environmental Remediation 
SciDAC will provide an opportunity for subsurface and computational 
scientists to develop and improve methods of simulating subsurface 
reactive transport processes on ``discovery class'' computers.
    Research emphasis within BER's Environmental Remediation Sciences 
subprogram will focus on issues of subsurface cleanup such as defining 
and understanding the processes that control contaminant fate and 
transport in the environment and providing opportunities for use or 
manipulation of natural processes to alter contaminant mobility. In 
fiscal year 2008, BER will support the development of two additional 
field research sites (for a total of 3), providing opportunities to 
validate laboratory findings under field conditions. The resulting 
knowledge and technology will assist DOE's environmental clean-up and 
stewardship missions. Funding for the William R. Wiley Environmental 
Molecular Sciences Laboratory (EMSL) at Pacific Northwest National 
Laboratory (PNNL) will be increased in fiscal year 2008 to maintain 
operations at full capacity.
    Also continuing in fiscal year 2008 is BER support for fundamental 
research in genomics, medical applications and measurement science, and 
the health effects of low dose radiation in fiscal year 2008. Resources 
are developed and made widely available for determining protein 
structures at DOE synchrotrons, and for DOE-relevant high-throughput 
genomic DNA sequencing. Building on DOE capabilities in physics, 
chemistry, engineering, biology and computation, BER supports 
fundamental imaging research, maintains core infrastructure for imaging 
research and develops new technologies to improve the diagnosis and 
treatment of psycho-neurological diseases and cancer and to improve the 
function of patients with neurological disabilities like blindness. 
Funding for Ethical, Legal, and Societal Issues (ELSI) associated with 
activities applicable to SC, increases to support research on the 
ecological and environmental impacts of nanoparticles resulting from 
nanotechnology applied to energy technologies.
High Energy Physics
            Fiscal Year 2007 Request--$775.1 Million; Fiscal Year 2008 
                    Request--$782.2 Million
    The High Energy Physics (HEP) program provides over 90 percent of 
the Federal support for the Nation's high energy physics research. This 
research advances our understanding of the basic constituents of 
matter, deeper symmetries in the laws of nature at high energies, and 
mysterious phenomena that are commonplace in the universe, such as dark 
energy and dark matter. Research at these frontiers of science may 
uncover new particles, forces, or undiscovered dimensions of space and 
time; explain how matter came to have mass; and reveal the underlying 
nature of the universe. HEP supports particle accelerators and very 
sensitive detectors to study fundamental particle interactions at the 
highest possible energies as well as non-accelerator studies of cosmic 
particles using experiments conducted deep underground, on mountains, 
or in space. These research facilities and basic research supported by 
HEP advance our knowledge not only in high energy physics, but 
increasingly in other fields was well, including particle astrophysics 
and cosmology. Research advances in one field often have a strong 
impact on research directions in another. Technology that was developed 
in response to the pace-setting demands of high energy physics research 
has also become indispensable to other fields of science and has found 
wide applications in industry and medicine, often in ways that could 
not have been predicted when the technology was first developed.
    In fiscal year 2008 HEP supports core experimental and theoretical 
research to maintain strong participation in the Tevatron, Large Hadron 
Collider (LHC) at CERN (the European Organization for Nuclear 
Research), and B-factory physics program, and supports research 
activities associated with development of potential new initiatives 
such as International Linear Collider (ILC) R&D, neutrinos, dark 
energy, and dark matter. HEP places a high priority on maximizing 
scientific data derived from the three major HEP user facilities: the 
Tevatron Collider and Neutrinos at the Main Injector (NuMI) beam line 
at Fermilab, and the B-factory at SLAC. HEP will continue to lead the 
international scientific community with these world-leading user 
facilities at Fermilab and SLAC in fiscal year 2008, but these 
facilities will complete their scientific missions by the end of the 
decade. Thus, the longer-term HEP program supported in fiscal year 2008 
begins to develop new cutting-edge facilities in targeted areas (such 
as neutrino physics) that will establish U.S. leadership in these areas 
in the next decade, when the centerpiece of the world HEP program will 
reside at CERN.
    In fiscal year 2008 HEP continues to support software and computing 
resources for U.S. researchers participating in the LHC program at CERN 
as well as pre-operations and maintenance of the U.S.-built systems 
that are scientific components of the LHC detectors. R&D in support of 
the proposed ILC is maintained in fiscal year 2008 to support U.S. 
participation in a comprehensive, coordinated international R&D program 
and to provide a basis for U.S. industry to compete successfully for 
major subsystem contracts, should the ILC be designed and then built. 
The long-term goal of this effort is to provide robust cost and 
schedule baselines to support design and construction decisions for an 
international electron-positron linear collider. The ILC would provide 
unprecedented power, clarity, and precision to unravel the mysteries of 
the next energy frontier, which we will just begin to discover with the 
LHC. In 2006 the ILC Reference Design Report was completed, and in 
fiscal year 2007 further work toward the design, including some site-
specific studies and detector studies, will be performed. In fiscal 
year 2008 further work on both accelerator systems and detector studies 
will be performed.
    To provide a nearer-term future HEP program, and to preserve future 
research options, R&D for accelerator and detector technologies, 
particularly in the growing area of neutrino physics, will continue in 
fiscal year 2008. With Tevatron improvements completed, much of the 
accelerator development effort at Fermilab in fiscal year 2008 will 
focus on the neutrino program to study the universe's most prolific 
particle. The Neutrinos at the Main Injector (NuMI) beam allows studies 
of the fundamental physics of neutrino masses and mixings using the 
proton source section of the Tevatron complex. The NuMI beam has begun 
operations and will eventually put much higher demands on that set of 
accelerators. A program of enhanced maintenance, operational 
improvements, and equipment upgrades is being developed to meet these 
higher demands, while continuing to run the Tevatron. Fabrication of 
the NuMI Off-axis Neutrino Appearance (NOnA) Detector, which was 
originally proposed as a line item construction project in fiscal year 
2007 under the generic name of Electron Neutrino Appearance (EnA) 
Detector, is funded in fiscal year 2008 and will utilize the NuMI beam. 
This project includes improvements to the proton source to increase the 
intensity of the NuMI beam. Meanwhile, fabrication will begin for the 
Reactor Neutrino Detector and two small neutrino experiments, the Main 
Injector Experiment n-A (MINERnA) in the MINOS near detector hall at 
Fermilab and the Tokai-to-Kamioka (T2K) experiment using the Japanese 
J-PARC neutrino beam. R&D will continue for a large double beta decay 
experiment to measure the mass of a neutrino. These efforts are part of 
a coordinated neutrino program developed from an American Physical 
Society study and a joint HEPAP/Nuclear Sciences Advisory Committee 
(NSAC) subpanel review.
    To exploit the unique opportunity to expand the boundaries of our 
understanding of the matter-antimatter asymmetry in the universe, a 
high priority is given to continued operations and infrastructure 
support for the B-factory at SLAC. Final upgrades to the accelerator 
and detector are scheduled for completion in fiscal year 2007, and B-
factory operations will conclude in fiscal year 2008. HEP support of 
SLAC operations decreases in fiscal year 2008 as the contribution from 
BES increases for SLAC linac operations in preparation for the Linac 
Coherent Light Source (LCLS).
    As the Large Hadron Collider (LHC) accelerator nears its turn-on 
date in 2007, U.S. activities related to fabrication of detector 
components will be completed and new activities related to 
commissioning and pre-operations of these detectors, along with 
software and computing activities needed to analyze the data, will 
ramp-up significantly. Support of an effective role for U.S. research 
groups in LHC discoveries will continue to be a high priority of the 
HEP program. R&D for possible future upgrades to the LHC accelerator 
and detectors will also be pursued.
    Enhanced support for R&D on ground- and space-based dark energy 
experimental concepts, begun in fiscal year 2007, will be continued in 
fiscal year 2008. These experiments should provide important new 
information about the nature of dark energy, leading to a better 
understanding of the birth, evolution, and ultimate fate of the 
universe. For example, the Super Nova/Acceleration Probe (SNAP) will be 
a mission concept proposed for a potential interagency-sponsored 
experiment with NASA, and possibly international partners: the Joint 
Dark Energy Mission (JDEM). DOE and NASA are jointly funding a National 
Academy of Sciences study to determine which of the proposed NASA 
``Beyond Einstein'' missions should launch first, with technical design 
of the selected proposal to begin at the end of this decade. JDEM is 
one of the candidate missions in this study. In fiscal year 2008, 
fabrication for the Dark Energy Survey Project will begin.
    The HEP program re-competed its SciDAC portfolio in fiscal year 
2006. Major thrusts in theoretical physics, astrophysics, and particle 
physics grid technology will be supported through the SciDAC program in 
fiscal year 2008, as well as proposals in accelerator modeling and 
design to be selected in fiscal year 2007. These projects will allow 
HEP to use computational science to obtain significant new insights 
into challenging problems that have the greatest impact in HEP mission 
areas.
Nuclear Physics
            Fiscal Year 2007 Request--$454.1 Million; Fiscal Year 2008 
                    Request--$471.3 Million
    The Nuclear Physics (NP) program is the major sponsor of 
fundamental nuclear physics research in the Nation, providing about 90 
percent of Federal support. Scientific research supported by NP is 
aimed at advancing knowledge and providing insights into the nature of 
energy and matter and, in particular, at investigating the fundamental 
forces which hold the nucleus together and determining the detailed 
structure and behavior of the atomic nuclei. NP builds and supports 
world-leading scientific facilities and state-of-the-art 
instrumentation to carry out its basic research agenda--the study of 
the evolution and structure of nuclear matter from the smallest 
building blocks, quarks and gluons, to the stable elements in the 
universe created by stars, to unique isotopes created in the laboratory 
that exist at the limits of stability and possess radically different 
properties from known matter. NP also trains a workforce needed to 
underpin the Department's missions for nuclear-related national 
security, energy, and environmental quality.
    Key aspects of NP research agenda include understanding how the 
quarks and gluons combine to form the nucleons (proton and neutron), 
what the properties and behavior of nuclear matter are under extreme 
conditions of temperature and pressure, and what the properties and 
reaction rates are for atomic nuclei up to their limits of stability. 
Results and insight from these studies are relevant to understanding 
how the universe evolved in its earliest moments, how the chemical 
elements were formed, and how the properties of one of nature's basic 
constituents, the neutrino, influences astrophysics phenomena such as 
supernovae. Knowledge and techniques developed in pursuit of 
fundamental nuclear physics research are also extensively utilized in 
our society today. The understanding of nuclear spin enabled the 
development of magnetic resonance imaging for medical use. Radioactive 
isotopes produced by accelerators and reactors are used for medical 
imaging, cancer therapy, and biochemical studies. Advances in cutting-
edge instrumentation developed for nuclear physics experiments have 
relevance to technological needs in combating terrorism. The highly 
trained scientific and technical personnel in fundamental nuclear 
physics who are a product of the program are a valuable human resource 
for many applied fields.
    The fiscal year 2008 budget request supports operations of the four 
National User Facilities and research at universities and laboratories, 
and makes investments in new capabilities to address compelling 
scientific opportunities and to maintain U.S. competitiveness in global 
nuclear physics efforts. In fiscal year 2008 support continues for R&D 
on rare isotope beam development, relevant to the next-generation 
facilities that will provide capabilities for forefront nuclear 
structure and astrophysics studies and for understanding the origin of 
the elements from iron to uranium.
    When the universe was a millionth of a second old, nuclear matter 
is believed to have existed in its most extreme energy density form 
called the quark-gluon plasma. Experiments at the Relativistic Heavy 
Ion Collider (RHIC) at Brookhaven National Laboratory (BNL) are 
searching to find and characterize this new state and others that may 
have existed during the first moments of the universe. These efforts 
will continue in fiscal year 2008. The NP program, together with the 
National Aeronautics and Space Administration (NASA), will continue 
construction of a new Electron Beam Ion Source (EBIS) to provide RHIC 
with more cost-effective, reliable, and versatile operations. Research 
and development activities, including the development of an innovative 
electron beam cooling system for RHIC, are expected to demonstrate the 
feasibility of increasing the luminosity (or collision rate) of the 
circulating beams by a factor of 10, which would increase the long-term 
scientific productivity and international competitiveness of the 
facility. Support for participation in the heavy ion program at the 
Large Hadron Collider (LHC) at CERN allows U.S. researchers the 
opportunity to search for new states of matter under substantially 
different initial conditions than those provided at RHIC. The interplay 
of the different research programs at the LHC and the ongoing RHIC 
program will allow a detailed tomography of the hot, dense matter as it 
evolves from the ``perfect fluid'' (a fluid with zero viscosity) 
discovered at RHIC.
    Operations of the Continuous Electron Beam Accelerator Facility 
(CEBAF) at Thomas Jefferson National Accelerator Facility (TJNAF) in 
fiscal year 2008 will continue to advance our knowledge of the internal 
structure of protons and neutrons. By providing precision experimental 
information concerning the quarks and gluons that form protons and 
neutrons, the approximately 1,200 experimental researchers who use 
CEBAF, together with researchers in nuclear theory, seek to provide a 
quantitative description of nuclear matter in terms of the fundamental 
theory of the strong interaction, Quantum Chromodynamics (QCD). In 
fiscal year 2008, the accelerator will provide beams simultaneously to 
all three experimental halls and funding is provided for engineering 
design activities for the 12 GeV CEBAF Upgrade Project. This upgrade is 
one of the highest priorities for NP and would allow for a test of a 
proposed mechanism of ``quark confinement,'' one of the compelling, 
unanswered puzzles of physics.
    Efforts at the Argonne Tandem Linear Accelerator System (ATLAS) at 
ANL and the Holifield Radioactive Ion Beam Facility (HRIBF) at ORNL 
will be supported in fiscal year 2008 to focus on investigating new 
regions of nuclear structure, studying interactions in nuclear matter 
like those occurring in neutron stars, and determining the reactions 
that created the nuclei of the chemical elements inside stars and 
supernovae. The GRETINA gamma-ray tracking array, which continues 
fabrication in fiscal year 2008, will revolutionize gamma ray detection 
technology and offer dramatically improved capabilities to study the 
structure of nuclei at ATLAS, HRIBF, and elsewhere. The Fundamental 
Neutron Physics Beamline (FNPB) under fabrication at the SNS will 
provide a world-class capability to study the fundamental properties of 
the neutron, leading to a refined characterization of the weak force. 
Support continues in fiscal year 2008 for the fabrication of a neutron 
Electric Dipole Moment experiment, to be sited at the FNPB, in the 
search for new physics beyond the Standard Model.
    Funds are provided in fiscal year 2008 to initiate U.S. 
participation in the fabrication of an Italian-led neutrino-less double 
beta decay experiment, the Cryogenic Underground Observatory for Rare 
Events (CUORE). A successful search for neutrino-less beta decay will 
determine if the neutrino is its own antiparticle and provide 
information about the mass of the neutrino. Neutrinos are thought to 
play a critical role in the explosions of supernovae and the evolution 
of the cosmos. A successful search for neutrino-less beta decay will 
determine if the neutrino is its own antiparticle and provide 
information about the mass of the neutrino.
    Following the re-competition of SciDAC projects in fiscal year 
2006, NP currently supports efforts in nuclear astrophysics, grid 
computing, Lattice Gauge (QCD) theory, and low energy nuclear structure 
and nuclear reaction theory. NP is also supporting R&D in an 
international effort to develop a larger, more sensitive neutrino-less 
beta decay experiment.
Fusion Energy Sciences
            Fiscal Year 2007 Request--$319.0 Million; Fiscal Year 2008 
                    Request--$427.9 Million
    The Fusion Energy Sciences (FES) program advances the theoretical 
and experimental understanding of plasma and fusion science, including 
a close collaboration with international partners in identifying and 
exploring plasma and fusion physics issues through specialized 
facilities. The FES program supports research in plasma science, 
magnetically confined plasmas, advances in tokamak design, innovative 
confinement options, non-neutral plasma physics and high energy density 
laboratory plasmas (HEDLP), and cutting edge technologies. FES also 
leads U.S. participation in ITER, an experiment to study and 
demonstrate the sustained burning of fusion fuel. This international 
collaboration will provide an unparalleled scientific research 
opportunity with a goal of demonstrating the scientific and technical 
feasibility of fusion power. Fusion is the energy source that powers 
the sun and stars. Fusion power could play a key role in U.S. long-term 
energy plans and independence because it offers the potential for 
plentiful, safe, and environmentally benign energy. On November 21, 
2006, the DOE signed the ITER agreement with its counterparts in China, 
the European Union, India, Japan, the Republic of Korea and the Russian 
Federation, formalizing this historic arrangement for international 
scientific cooperation.
    The U.S. Contributions to ITER project is being managed by the U.S. 
ITER Project Office (USIPO), established as an Oak Ridge National 
Laboratory (ORNL)/Princeton Plasma Physics Laboratory (PPPL) 
partnership. The fiscal year 2008 request for the U.S. Contributions to 
ITER project reflects a significant increase in procurement, 
fabrication activities, and delivery of medium- and high-technology 
components, assignment of U.S. personnel to the International ITER 
Organization abroad, and the U.S. share of common costs at the ITER 
site in Cadarache, France, including installation and testing. These 
costs are part of the Total Estimated Cost (TEC) for the U.S. 
Contributions to ITER project. There is a second category of costs, 
Other Project Costs (OPC), which is for the supporting research and 
development activity for our U.S. Contributions. Together the TEC and 
OPC make up the overall Total Project Cost which is $1,122,000,000.
    In support of ITER and U.S. Contributions to ITER, FES has placed 
an increased emphasis on its national burning plasma program--a 
critical underpinning to the fusion science in ITER. FES has enhanced 
burning plasma research efforts across the U.S. domestic fusion 
program, including: carrying out experiments on our national FES 
facilities that are exploring new modes of improved or extended ITER 
performance with diagnostics and plasma control that can also be 
extrapolated to ITER; developing safe and environmentally attractive 
technologies that could be used in future upgrades of ITER; exploring 
fusion simulation efforts that examine the complex behavior of burning 
plasmas in tokamaks; and integrating all that is learned into a 
forward-looking approach to future fusion applications. The U.S. 
Burning Plasma Organization has been established to coordinate these 
efforts.
    Section 972(c)(5)(C) of the Energy Policy Act (EPAct) of 2005, 
required the Secretary of Energy to provide ``a report describing how 
United States participation in the ITER will be funded without reducing 
funding for other programs in the Office of Science (including other 
fusion programs) . . .''. This report as well as all the other 
requirements for FES in EPAct have been or are in the process of being 
completed. The Department's fiscal year 2008 budget provides for modest 
increases for all programs within the Office of Science and supports 
the ITER request of $160,000,000 from new funds in the FES budget 
request.
    FES supports the operation of a set of experimental facilities. 
These facilities provide scientists with the means to test and extend 
our theoretical understanding and computer models--leading ultimately 
to improved predictive capabilities for fusion science. Research and 
facility operations support for the three major facilities is 
maintained in fiscal year 2008. Experimental research on tokamaks is 
continued with emphasis on physics issues of interest to the ITER 
project. The DIII-D tokamak at General Atomics will operate for 15 
weeks in fiscal year 2008 to conduct research relevant to burning 
plasma issues and topics of interest to the ITER project as well as 
maintain the broad scientific scope of the program. The Alcator C-Mod 
at the Massachusetts Institute of Technology will operate for 15 weeks 
and the National Spherical Torus Experiment (NSTX) at the Princeton 
Plasma Physics Laboratory (PPPL) will operate for 12 weeks. Fabrication 
of the major components of the National Compact Stellarator Experiment 
(NCSX) at PPPL continues and assembly of the entire device will be 
completed in fiscal year 2009.
    Funding for the FES SciDAC program continues in fiscal year 2008 
for the development of tools that facilitate international fusion 
collaborations and initiate development of an integrated software 
environment that can accommodate the wide range of space and time 
scales and the multiple phenomena that are encountered in simulations 
of fusion systems. Within SciDAC, the Fusion Simulation Project is a 
major initiative involving plasma physicists, applied mathematicians, 
and computer scientists to create a comprehensive set of models of 
fusion systems, combined with the algorithms required to implement the 
models and the computational infrastructure to enable them to work 
together.
    FES will issue a joint solicitation in fiscal year 2008, with the 
National Nuclear Security Administration (NNSA), focused on academic 
research in high energy density laboratory plasmas, which supports the 
Department's programmatic goals in inertial confinement fusion science.
Workforce Development for Teachers and Scientists
            Fiscal Year 2007 Request--$10.9 Million; Fiscal Year 2008 
                    Request--$11.0 Million
    The Department of Energy has played a role in training America's 
scientists and engineers for more than 50 years, making contributions 
to U.S. economic and scientific pre-eminence. The Nation's current and 
future energy and environmental challenges may be solved in part 
through scientific and technological innovation and a highly skilled 
scientific and technical workforce. The Workforce Development for 
Teachers and Scientists (WDTS) program acts as a catalyst within the 
DOE for the training of the next generation of scientists. WDTS 
programs create a foundation for DOE's national laboratories to provide 
a wide range of educational opportunities to more than 280,000 
educators and students on an annual basis. WDTS's mission is to provide 
a continuum of educational opportunities to the Nation's students and 
teachers of science, technology, engineering, and mathematics (STEM).
    WDTS supports experiential learning opportunities that compliment 
curriculum taught in the classroom and: (1) build links between the 
national laboratories and the science education community by providing 
funding, guidelines, and evaluation of mentored research experiences at 
the national laboratories to K-12 teachers and college faculty to 
enhance their content knowledge and research capabilities; (2) provide 
mentor-intensive research experiences at the national laboratories for 
undergraduate and graduate students to inspire commitments to the 
technical disciplines and to pursue careers in science, technology, 
engineering, and mathematics, thereby helping our national laboratories 
and the Nation meet the demand for a well-trained scientific/technical 
workforce; and (3) encourage and reward middle and high school students 
across the Nation to share, demonstrate, and excel in math and the 
sciences, and introduce these students to the national laboratories and 
the opportunities available to them when they go to college.
    In fiscal year 2008, the DOE Academies Creating Teacher Scientists 
(DOE ACTS) program, formerly the Laboratory Science Teacher 
Professional Development (LSTPD) program, will support the 
participation of approximately 300 teachers. All 17 of DOE's national 
laboratories will participate in this program. Each national laboratory 
can elect to implement either or both of the two types of teacher 
professional development models in DOE ACTS: (1) Teachers as 
Investigators (TAI) is geared towards novice teachers typically in the 
elementary to intermediate grade levels; and (2) Teachers as Research 
Associates (TARA) for teachers with a stronger background in science, 
mathematics, and engineering.
    The Science Undergraduate Laboratory Internship (SULI) program, 
which provides mentor intensive research experiences for undergraduates 
at the national laboratories, will support approximately 340 students 
in fiscal year 2008. The Albert Einstein Distinguished Educator 
Fellowships, the College Institute of Science and Technology (CCI) 
program, the Pre-Service Teacher activity for students preparing for 
teaching careers in a STEM discipline, and the National and Middle 
School Science Bowls will all continue in fiscal year 2008.
Science Laboratories Infrastructure
            Fiscal Year 2007 Request--$50.9 Million; Fiscal Year 2008 
                    Request--$79.0 Million
    The mission of the Science Laboratories Infrastructure (SLI) 
program is to enable the conduct of DOE research missions at the Office 
of Science laboratories by funding line item construction projects and 
the clean up for reuse or removal of excess facilities to maintain the 
general purpose infrastructure. The program also supports Office of 
Science landlord responsibilities for the 24,000 acre Oak Ridge 
Reservation and provides Payments in Lieu of Taxes (PILT) to local 
communities around ANL, BNL, and ORNL.
    In fiscal year 2008, SLI will fund four construction subprojects: 
Seismic Safety Upgrade of Buildings, Phase I, at the Lawrence Berkeley 
National Laboratory (LBNL); Modernization of Building 4500N, Wing 4, 
Phase I, at ORNL; Building Electrical Services Upgrade, Phase II, at 
ANL; and Renovate Science Laboratory, Phase I, at BNL. Funding for 
fiscal year 2008 includes $35,000,000 held in reserve pending 
resolution of issues related to capability replacement and renovation 
at PNNL. If the issues are resolved, DOE will initiate a reprogramming 
request to use these funds to replace and/or upgrade mission-critical 
facilities currently located in the Hanford Site 300 Area. The SLI 
program continues funding for demolition of the Bevatron at LBNL in 
fiscal year 2008, and funding is also provided for the demolition of 
several small buildings and trailers at ORNL.
Science Program Direction
            Fiscal Year 2007 Request--$170.9 Million; Fiscal Year 2008 
                    Request--$184.9 Million
    Science Program Direction (SCPD) enables a skilled, highly 
motivated Federal workforce to manage the Office of Science's basic and 
applied research portfolio, programs, projects, and facilities in 
support of new and improved energy, environmental, and health 
technologies. SCPD consists of two subprograms: Program Direction and 
Field Operations.
    The Program Direction subprogram is the single funding source for 
the Office of Science Federal staff in headquarters responsible for 
managing, directing, administering, and supporting the broad spectrum 
of Office of Science disciplines. This subprogram includes planning and 
analysis activities, providing the capabilities needed to plan, 
evaluate, and communicate the scientific excellence, relevance, and 
performance of the Office of Science basic research programs. 
Additionally, Program Direction includes funding for the Office of 
Scientific and Technical Information (OSTI) which collects, preserves, 
and disseminates DOE research and development (R&D) information for use 
by DOE, the scientific community, academia, U.S. industry, and the 
public to expand the knowledge base of science and technology. The 
Field Operations subprogram is the funding source for the Federal 
workforce in the Field responsible for management and administrative 
functions performed within the Chicago and Oak Ridge Operations 
Offices, and site offices supporting the Office of Science laboratories 
and facilities.
    In fiscal year 2008, Program Direction funding increases by 8.2 
percent from the fiscal year 2007 request. Most of the increase will 
support an additional 29 FTEs, to mange the increase in the SC research 
investment that is a key component of the President's American 
Competitiveness Initiative; four new FTEs to support NSLS-II, and ITER 
project office activities; and 35 FTEs--the staff of the New Brunswick 
Laboratory--transferring from the Office of Security and Safety 
Performance Assurance. Twenty-four FTEs are reduced across the SC 
complex in fiscal year 2008 consistent with SC's corporate workforce 
planning strategy. The SCPD fiscal year 2008 increase also supports a 
2.2 percent pay raise; an increased cap for SES basic pay; other pay 
related costs such as the Government's contributions for employee 
health insurance and Federal Employees' Retirement System (FERS); 
escalation of non-pay categories, such as travel, training, and 
contracts; and increased e-Gov assessments and other fixed operating 
requirements across the Office of Science complex.
Safeguards and Security
            Fiscal Year 2007 Request--$71.0 Million; Fiscal Year 2008 
                    Request--$71.0 Million
    The Safeguards and Security (S&S) program ensures appropriate 
levels of protection against unauthorized access, theft, diversion, 
loss of custody, or destruction of DOE assets and hostile acts that may 
cause adverse impacts on fundamental science, national security, or the 
health and safety of DOE and contractor employees, the public, or the 
environment. The Office of Science's Integrated Safeguards and Security 
Management strategy uses a tailored approach to safeguards and 
security. As such, each site has a specific protection program that is 
analyzed and defined in its individual Security Plan. This approach 
allows each site to design varying degrees of protection commensurate 
with the risks and consequences described in their site-specific threat 
scenarios. The fiscal year 2008 budget includes funding necessary to 
protect people and property at the 2003 Design Basis Threat (DBT) 
level. In fiscal year 2008, funding for the Cyber Security program 
element addresses the promulgation of new National Institute of 
Standards and Technology (NIST) requirements that are statutorily 
required by the Federal Information Security Management Act (FISMA) to 
improve the Federal and Office of Science laboratory cyber security 
posture.
                               conclusion
    I want to thank you, Mr. Chairman, for providing this opportunity 
to discuss the Office of Science research programs and our 
contributions to the Nation's scientific enterprise and U.S. 
competitiveness. On behalf of DOE, I am pleased to present this fiscal 
year 2008 budget request for the Office of Science.
    This concludes my testimony. I would be pleased to answer any 
questions you might have.

                      SCIENTIFIC RESEARCH AT NREL

    Senator Dorgan. Dr. Orbach, thank you very much. I want to 
ask a series of questions and then I will turn to my 
colleagues.
    First and foremost, my colleague from Colorado mentioned 
that NREL, I had the opportunity to be in Golden, Colorado 
recently, is also working on issues like cellulosic ethanol. 
Tell me what the relationship is between your Office of Science 
and the three facilities you're going to designate, how that 
relates to NREL, what the coordination is, and so on?
    Dr. Orbach. We work very closely, Mr. Chairman, with NREL, 
and, in fact, we fund research at NREL. And, very generally, we 
support the basic end of the research continuum that leads to 
market placement of these new technologies. NREL focuses on the 
applied research, the step needed to take the basic ideas and 
convert them to the market. It's not a sharp division. In order 
to communicate, we need to understand the applied sector and 
they also do basic research, so that we can communicate most 
effectively. So, our relationship with NREL is a very close 
one, we work very closely with the program in the Department, 
Energy Efficiency and Renewable Energy for joint workshops and 
joint enterprises.
    Senator Dorgan. So the significant difference here is 
applied versus basic?
    Dr. Orbach. That's correct.

                 ADVANCED SCIENTIFIC COMPUTING RESEARCH

    Senator Dorgan. In 2008 the budget proposes $340 million 
for advanced scientific computing research. These funds will 
help complete the acquisition of a 250 teraflop system at Oak 
Ridge. What's the relationship between the computing facility 
at Oak Ridge, when it's completed, with the computing facility 
at Argonne or at Berkeley, for example?
    Dr. Orbach. Well, the one at Berkeley is what we call a 
capacity machine, which services about 2,500 users. The machine 
at Oak Ridge is what we call a capability machine. We reserve 
it for a smaller number so they can get larger amounts of time. 
There are only about 400 users at Oak Ridge.
    Also, the architectures are different. We're exploring 
speeds that have never been achieved before. Nobody knows which 
scientific problems are most efficient on which architecture. 
So, at Oak Ridge, you'll find an architecture which is a Cray 
architecture. At Argonne, you'll find a Blue GeneP architecture 
and you'll find a Power5 architecture at NERSC at Berkeley. We 
believe that different science problems will be solved more 
efficiently on different machines. We don't know. So, we want 
to have the opportunity to explore which machine is best for 
which class of scientific problems.

                          CARBON SEQUESTRATION

    Senator Dorgan. Let me also ask you about the role of the 
Office of Science in carbon sequestration. You're doing 
research in those areas?
    Dr. Orbach. Yes, we are.
    Senator Dorgan. Again, basic research as opposed to applied 
research?
    Dr. Orbach. That's correct, sir. We have it in two of our 
programs: biological and environmental research and basic 
energy sciences. The latter focuses on the geologic issues 
associated with carbon storage. The former talks about the 
earth and the ability to store carbon in roots, in the surface, 
also with biological microbes, for example, that will absorb 
carbon dioxide. It looks at the biological side for 
sequestration.

              TRANSITION OF RESEARCH INTO THE MARKETPLACE

    Senator Dorgan. You know, there's a phrase that people 
refer to. I was unaware of it, but it is called the DOE's 
valley of death. Have you heard of that?
    Dr. Orbach. Yes.
    Senator Dorgan. And, it's a phrase that people use to 
describe, I guess, how too little research really translates 
into new technologies that move to the marketplace. And, 
therefore, the valley of death. There seems to me to be a fair 
question about how effectively we translate the product of 
research into practical applications in the marketplace. Tell 
us a little about your view of that.
    Dr. Orbach. Well, it's very difficult. We're not the only 
country that struggles with that transition. The applied 
programs, in fact, are charged with that responsibility, but 
we're trying something new. The bioenergy research centers are 
a construct where we hope that the private sector will join 
with us in the basic research. The Federal money buys down the 
risk for the private capital so they can invest smaller amounts 
with this very high risk, as it is basic research. But, what 
we're hoping is that with the private sector as a partner, that 
when basic research pays off, they will then transfer that to 
the marketplace. So, we're looking at new methods. The Energy 
Policy Act gave us the Other Transactions Authority, so we have 
new funding structures now, that we can use with the private 
sector. We are attempting to come up with innovative ways to 
cross the ``valley of death.''
    Senator Dorgan. Mr. Orbach, sometimes those of us without 
strong science backgrounds have difficulty visiting with 
scientists because we don't always understand exactly what 
they're saying. We have great respect for those that work in 
the sciences, obviously, but would you do me a favor? Would you 
send the committee a list, with an analysis, of a dozen or so 
of the most interesting, promising, perhaps some controversial, 
but breathtaking research projects that you see in your agency 
and in the future of your agency so that we can try to 
understand? If you can translate all that into the kind of 
thing that those of us who are non-scientists can understand I 
think it would give us a better idea of what you are doing and 
what you see ahead of you. But, I for one, appreciate your 
being here and appreciate especially the importance of this 
office. It is not the highest profile office in the Federal 
Government, but in many ways it holds the key to tomorrow's 
opportunities for our country.
    [The information follows:]
Interesting and Promising Research Projects in DOE and in the Future of 
                                  DOE
    We are very grateful to the chairman for giving us this opportunity 
to explain the significance of what we do in terms that non-scientists 
can understand. Before we describe some of the projects we view as most 
promising, just a few words to put our answer into context:
    To describe the far-reaching impact of DOE Office of Science-
supported research on our economy, our technology, and our national 
life over the past five decades--and to predict the potential of Office 
of Science-supported research to transform Americans' lives for the 
better in the decades ahead--is an exciting task. Numbers only begin to 
tell the story. Forty-five Nobel laureates. Scores of fundamental 
discoveries in a wide array of fields from high energy physics, to 
biological research, to high-speed computing (the Office of Science 
website lists just a ``top 100''). Countless new products, 
technologies, and even whole industries owe their existence to 
scientific research first supported by the Office of Science. But lists 
alone barely convey the true scope of the transformation we have 
generated, or the potential for new discoveries to transform our 
Nation's future.
    Our lives have been fundamentally reshaped by Office of Science-
supported discoveries. The entire field of nuclear medicine arose 
largely as an outgrowth of ``accelerator science'' spearheaded by the 
Office of Science and its predecessor agencies to support research in 
high energy and nuclear physics. At the core of MRIs are 
superconducting magnets, a technology first successfully developed by 
Office of Science-supported scientists at Fermilab to build the atom-
smashing Tevatron. PET Scans grew out of pioneering advances by the 
Office of Science and predecessor agencies in particle accelerators, 
biological radiotracer molecules, photodetectors, and high-speed 
computers. Today particle accelerators producing X-rays, protons, 
neutrons, or heavy ions--once built mainly as research tools for 
physicists--provide advanced cancer treatment for millions of patients 
and are found at every major medical center in the United States.
    The Information Age itself would have been impossible without the 
fundamental breakthroughs produced by research supported by the Office 
of Science--including key discoveries essential to the development of 
the Standard Model of high energy physics. Our world of ``smart'' 
cellular phones, cameras, music players, and appliances rely on the 
utilization of such phenomena and tools as the giant magnetoresistive 
effect and plasma chambers first investigated by Office of Science-
sponsored researchers.
    In short, Office of Science-sponsored discoveries are part of the 
very fabric of our contemporary high-tech world--a legacy of its 
historic role as the primary Federal sponsor of basic research in the 
physical sciences.
    Here are some of the most promising major areas of research we are 
pursuing today:
    Harnessing Nature for New Sources of Energy.--Since initiating the 
Human Genome Project in 1986, DOE has played a leading role in 
advancing modern biotechnology. We are applying these advances and 
sophisticated new tools to the task of probing microbes for solutions 
to energy production, carbon capture, and environmental cleanup. One of 
the most promising potential applications of biotechnology today lies 
in bioenergy production. Microbes are experts at harvesting energy from 
almost any form, from solar radiation to photosynthesis-generated 
organic chemicals to minerals in the deep subsurface. For example, 
there are some 200 microbes in the hindgut of the termite. They 
contribute to the termite's super-efficiency in breaking down cellulose 
into sugars that can be fermented into fuel. We now have at our 
disposal the tools and insights for cracking nature's code for 
accomplishing these marvels. Developing cost-effective ways of 
producing ethanol from cellulose is the key to making ethanol truly 
commercially viable, and biotech likely holds the solution to this 
challenge; biofuels also are one major means of reducing net carbon 
dioxide emissions into the atmosphere.
    Our Joint Genome Institute is already sequencing the DNA in these 
microbes to identify the metabolic pathways by which these micro-
organisms accomplish their mission. To seize upon these and other 
scientific opportunities, the Office of Science is establishing three 
new Bioenergy Research Centers, funded at $25 million each per year for 
5 years, to bring together multidisciplinary teams of top scientists to 
accelerate the breakthroughs necessary for the development of cost-
effective production of cellulosic ethanol and other biofuels. 
Universities, national laboratories, nonprofit organizations, and 
private firms have been invited to compete for these grants, singly or 
in partnerships. Proposals were due on February 1, 2007; awards will be 
announced this June; and Centers will be underway by early in fiscal 
year 2008. We estimate biofuels can replace 30 percent of the 
transportation fuels we currently consume, reducing our dependence on 
imported oil, and providing energy security for our Nation.
    Making Fusion Power a Reality.--Fusion powers the sun and the 
stars. Through our participation in ITER, a major international fusion 
research project, we are seeking to overcome the technical barriers to 
bringing fusion energy to the electric grid. In November 2006, the 
United States signed an agreement with 6 other partners. Scientists 
supported by the DOE Office of Science will be working side by side 
with counterparts from China, the European Union, India, Japan, the 
Republic of Korea and the Russian Federation to build and operate a 
reactor that demonstrates the scientific and technological feasibility 
of fusion energy.
    The fusion process occurs in the sun or stars when lighter 
elements, hydrogen for example, fuse together under incredibly high 
temperatures (10-100 million degrees Celsius) to make heavier elements, 
thereby releasing energy and forming a stew of charged subatomic 
particles known as plasma. The key challenge is containing this plasma 
on earth. ITER will contain the plasma through use of extremely 
powerful magnetic fields. ITER, if successful, will put the world one 
step away from construction of a commercial fusion power plant. Fusion 
has the potential to provide abundant, clean, carbon-free energy for 
the world's growing electricity needs.
    Extending the Frontiers of Science with the World's Fastest 
Computers.--The supercomputer is science's newest and most powerful 
tool, enabling researchers to model and simulate experiments that could 
never be performed in a laboratory. Some see computer modeling and 
simulation as a new ``third pillar'' of scientific discovery, side by 
side with scientific experiment and scientific theory. Supercomputing 
has enormous implications for U.S. competitiveness, for it holds out 
the promise of enabling U.S. industry to perform ``virtual 
prototyping'' of complex systems and products, substantially reducing 
development costs and shortening time to market. The Office of Science 
has been leading the way in developing the Nation's civilian 
supercomputing capabilities, acquiring ever-faster machines, nurturing 
the complex software development knowledge necessary to take advantage 
these unprecedented processing capabilities, and helping to bootstrap 
the U.S. supercomputer industry. Thousands of scientists from DOE labs 
and universities are taking advantage of these capabilities. Two 
private firms, Pratt & Whitney and Boeing, won time on the Office of 
Science fastest computer as part of the INCITE competition--in which 
national laboratory, university, and corporate researchers vie for time 
on Office of Science machines--and are performing important simulations 
of turbine operation and aerodynamic design. This has reduced their 
cost of production and time to market, giving them more of a 
competitive edge over their rivals on the international scene.
    The Office of Science is building the world's most powerful 
supercomputing centers for open science. The Oak Ridge National 
Laboratory Leadership Computing Facility includes a Cray XT4 system 
that will be upgraded to 250 teraflop (trillions of calculations per 
second) peak capability. The Argonne National Laboratory Leadership 
Computing Facility will acquire an IBM Blue Gene/P this year with a 
peak capability of 100 teraflops. We are exploring these two different 
computer system architectures because we believe that different 
architectures will be better suited for different types of scientific 
problems. The National Energy Research Computing Center will reach 100-
150 teraflop peak capacity this year and will serve over 2,500 
scientists from DOE laboratories, universities, and companies, 
nationwide. Office of Science computing capabilities are expected to 
reach a petaflop (1,000 teraflops) by the end of 2008, far ahead of any 
foreign competition.
    Leading the Nanotech Revolution.--The Office of Science is 
positioning the United States as the global leader of the 
nanotechnology revolution, perhaps the most economically promising 
technological revolution of our era. Our five Office of Science-
supported Nanoscale Science Research Centers (four of which are now 
operational, with a fifth coming on line this year) provide our 
Nation's research community with the world's most advanced tools for 
exploring and manipulating matter at the nanoscale. Coupled with the 
world-leading high-intensity light sources at our National 
Laboratories, which enable scientists to image matter at the molecular 
level, these capabilities will have a dramatic impact on our national 
economy and energy security in the coming years. Fundamental research 
at the nanoscale may lead to methods to split water with sunlight for 
hydrogen production; technologies for harvesting solar energy with 
greater power efficiency and lower costs; super-strong lightweight 
materials to improve efficiency of vehicles; ``smart materials'' that 
respond dynamically to their environment; and low-cost fuel cells, 
batteries, supercapacitors, and thermoelectronics.
    Manipulating matter at the atomic scale takes us into the realm 
where the chemical, physical, optical, and mechanical properties of 
materials can be dramatically different, creating the potential for the 
basis of new technologies. For example, both diamonds and graphite 
found in pencil lead are made of the same element--carbon. Their vastly 
different properties arise from differences in the arrangement of 
carbon atoms at the atomic scale. Carbon nanotubes (where the carbon 
atoms are arranged in a tube shape, a nanometer in diameter and with 
walls a single atom thick) have the right properties to be the building 
blocks for a range of novel energy technologies and electronic devices: 
they are incredibly tiny, stronger than steel, can withstand high 
temperatures, and have a range of controllable electronic properties. 
Nanotubes are already finding applications in energy technologies such 
as novel Lithium-ion batteries and supercapacitors; but realizing the 
full potential of nanotubes will require addressing challenges 
associated with fabricating and manipulating these molecular scale 
objects.
    The Big Bang Machine.--Researchers at Brookhaven National 
Laboratory's Relativistic Heavy Ion Collider (RHIC) are pushing the 
frontiers of human knowledge by using a powerful particle accelerator 
to recreate conditions as they existed in the universe just 
microseconds after the Big Bang. In a headline-making development, RHIC 
has identified a new and entirely unexpected form of matter, a 
``perfect liquid'' composed of quarks and gluons, the tiny components 
that make up the core of atoms. Work at RHIC will provide scientists 
with a deeper fundamental understanding of nuclear matter and its 
interactions, knowledge that is likely to prove invaluable not only to 
research in nuclear physics, but also to research in energy, materials 
science, astrophysics, and national security.
    RHIC accelerates two beams of gold nuclei to high energies and 
brings them into head-on collisions inside state-of-the-art detectors 
designed to observe the particles that emerge. The collision 
disintegrates the nuclei and momentarily produces the unimaginably hot 
and dense matter called the quark-gluon plasma.
    Understanding our Climate.--The Office of Science leads Federal 
agencies in the field of climate modeling. Office of Science-supported 
researchers are advancing climate models through the use of 
sophisticated field measurement tools as well as the Office of 
Science's supercomputing resources, the fastest in the world available 
for civilian research. Ultimately we need to be able to understand the 
factors that determine the Earth's climate well enough to predict 
climate and climate impacts decades or even centuries in the future. 
Advanced climate and Earth system models are needed to describe and 
predict the roles of oceans, the atmosphere, sea ice, and land masses 
on climate, including the interactions and feedbacks between the 
various components of the climate system. The role of clouds and 
aerosols in controlling solar and terrestrial radiation onto and away 
from the Earth also needs to be better understood if we are to reduce 
uncertainty in climate prediction. The Office of Science is addressing 
this need through the Atmospheric Radiation Measurement (ARM) program 
which is providing scientists new insights into the effect of aerosols 
from air pollution on clouds and the consequent heating and cooling of 
the atmosphere.
    Restoring Sight to the Blind.--Diseases of the retina are the 
leading cause of blindness in the United States. The Artificial Retina 
Project, involving six DOE national laboratories, three universities, 
and an industrial partner, is utilizing the DOE labs' unique expertise 
in materials science, advanced microelectronics, and micro-fabrication 
to design and construct the most advanced device to restore sight to 
the blind. The pliable, biocompatible 60-electrode artificial retina 
has been approved by the FDA for human trials. Plans call for 30 
patients to receive artificial retinas this year.
    The artificial retina captures visual signals and sends them to the 
brain in the form of electrical impulses. The device is a miniature 
disc that contains an array of electrodes that can be implanted in the 
back of the eye to replace the damaged retina. Visual signals are 
captured by a small video camera located in eyeglasses worn by the 
blind person and processed through a microcomputer worn on a belt. The 
signals are transferred to the electrode array in the eye. The array 
stimulates the optical nerves which then carry a signal to the brain. 
The Office of Science goal for the project is to develop the technology 
to fabricate a 1000-electrode device that should allow a blind person 
to read large print and recognize faces. Technologies developed for 
this project may also be applicable to the general field of neuron 
prostheses.
    The Elusive Higgs . . . Solving the Mystery of Mass.--The Standard 
Model of particle physics, developed with the contributions of numerous 
Office of Science-supported scientists and Office of Science 
experimental facilities over many years, is an extraordinarily 
powerful, accurate, and far-reaching physical theory that explains the 
behavior of matter down to the level of tiny quarks. Yet a critical 
piece of this theory--the so-called Higgs particle--has never been 
observed. According to the Standard Model, the Higgs particle and its 
associated field are actually responsible for giving all matter its 
mass. Yet the Higgs remains the only particle predicted by the Standard 
Model that has not yet been detected. Discovery of the Higgs and its 
properties--or discovery of some tantalizing alternative possibilities 
instead of the Higgs--would open new vistas in particle physics and 
provide new clues to some of the deepest mysteries of space, time, and 
matter. Recently, work at the Tevatron at Fermilab in Illinois--
currently the world's most powerful particle accelerator--zeroed in on 
a lower range for the Higgs mass that suggest it might conceivably be 
detected at the energies achieved at the Tevatron. This would be the 
crowning discovery of the Standard Model and would mark the birth of a 
``new physics'' with the potential to transform our basic understanding 
of the physical universe.
    Using Microbes to Clean-up the Environment.--The Office of Science 
is looking at ways microbes can be used to degrade or transform 
contaminants such as toxic metals and radionuclides. Microbes have 
evolved over 3.5 billion years as masters at living in almost every 
environment. Thriving in some of the harshest environments on the 
planet, these single-celled organisms have developed powerful and 
diverse capabilities that, if harnessed through biotechnology, may 
provide cost-effective restoration strategies for many of the 
contaminated sites DOE is committed to cleaning up. Through research in 
areas such as genomics, geochemistry, imaging, and modeling and 
simulation, Office of Science-sponsored scientists are studying the 
complex interactions of microbes with contaminants in the subsurface 
environment and exploring remediation methods that rely on naturally 
occurring microbes. Several potential candidates are already being 
tested in the field. Geobacter species, for example, can transform 
uranium from a soluble form to an insoluble form, effectively removing 
it from groundwater and preventing its further mobility. A Shewanella 
species commonly found in soils is capable of reducing a wide range of 
organic compounds, metal ions, and radionuclides to less toxic forms or 
forms that are immobilized in the soil.
    Building New Tools for Basic Science.--The world-leading large 
scale instruments designed, built, and operated by the Office of 
Science and its predecessor agencies--synchrotron light sources, 
neutron scattering facilities, and particle colliders--have not only 
driven entire fields like high energy and nuclear physics, but have 
also become essential tools for studying and understanding the 
arrangement of atoms in biological molecules, pharmaceuticals, and 
materials from metals to ceramics to plastics. Particle accelerators 
have been the primary sources of light and other forms of radiation for 
these facilities. Critical to development of the next generation of 
scientific user facilities--ones that will allow researchers to observe 
matter (and its components) at increasingly smaller scales and follow 
atomic motions and chemical reactions in real time--are advances in 
accelerator sciences such as superconducting radiofrequency (SCRF) 
technology.
    The Office of Science is leading a national effort at several 
national laboratories and universities aimed at developing SCRF 
accelerator technology. This technology utilizes the remarkable 
properties of superconducting materials to greatly reduce the size and 
cost of accelerators while increasing their efficiency. These advances 
are being driven, in part, by the scientific opportunities at the very 
highest energies--SCRF is critical to realizing the proposed 
International Linear Collider, a thirty kilometer long particle 
collider which will be capable of exploring fundamental physics 
questions such as the physics responsible for the origin of mass as 
well as the nature of dark matter. However, the impact of this 
technology will be far wider, enabling next generation accelerator-
based facilities such as free electron lasers (FELs), which will 
provide world-leading tools for transformational basic science in areas 
such as materials, nanotechnology, and biotechnology in the coming 
decades. The many applications of FELs include industrial processes 
such as laser penning to toughen ship propellers, high power laser 
weapons systems for naval defense, laser surgery, as well as imaging 
fundamental chemical and biological processes.
    Basic research in science pursues the frontiers of discovery. While 
we expect discoveries to follow our instincts, we are often surprised, 
sometimes with wonderful consequences. What we have listed above is our 
present understanding of things to come, but there will be more--
opportunities that we did not anticipate. With sufficient investment 
and consistent support, we can discover, apply, and improve the quality 
of our lives.

    Senator Dorgan. Senator Domenici.

                        CLIMATE CHANGE RESEARCH

    Senator Domenici. Let me just echo what you just said. You 
will find within the Federal Government and outside the Federal 
Government are gigantic research institutions and researchers 
that will be knocking at your door and trying to become part of 
the success that is, what they hope it's going to be because of 
what you have and what we have made available to you and what 
we're going to give you and the challenge we are going to place 
upon you. We wish you very, very much success.
    Climate research, which is being spoken of very, very 
heavily by many, many people. The Department has requested $138 
million to support climate change research. It is my 
understanding that this supports DOE's role in the 
administration's multi-agency climate change research 
initiative. It appears, from budget documents, that the 
Department has primary responsibility for carbon science cycle 
and the climate impacts. That doesn't mean you're in charge of 
the whole program, but obviously this does give you a very big 
role in climate change research by the United States and on 
behalf of the Department of Energy.
    We very much want to help you with that as the source of 
your money, the source of your policy direction. There are so 
many things that one would ask, but this is not the time. This 
is, sort of, an opening round here. Staff will initiate a 
number of other ones and many will be submitted on behalf of 
both sides of the isle. So, we won't be trying for one-side to 
get up on, take over from the other. This is going to be a very 
wonderful venture together. And, I look forward to it and I 
hope you do. We have some great laboratories that you are going 
to be working with and when they see the relationship that is 
given to them in this legislation, in this funding, they will 
be very, very surprised.
    Mr. Chairman, thank you for yielding to me and I appreciate 
the opportunity to work with you on this committee with him and 
other people in these areas.
    Senator Dorgan. Senator Craig.

                     IMPORTANCE OF NEUTRON SOURCES

    Senator Craig. Thank you very much, Mr. Chairman. And, 
again, Mr. Secretary, we thank you for being here. As you can 
hear by our chairman and ranking member, there are tremendously 
high levels of expectation and we're all very excited about 
getting more heavily involved in both basic research and then 
its application.
    I had mentioned earlier, you were at the National Lab in 
Idaho. You visited and you saw, it's my understanding, the 
Advanced Test Reactor. It's a valuable national asset and the 
question is, how to make the ATR a successful national user 
facility. You manage many user facilities successfully and 
because of your experience in this area, I would like to ask 
that you work very closely with DOE NE too, and Assistant 
Secretary Dennis Spurgeon, in an effort to make the ATR a 
world-class user facility.
    You know and I'm told that all neutrons are not created 
equally. The Office of Science uses HFIR at Oak Ridge for basic 
neutron physics research, while Navy DOE NE uses the ATR for 
nuclear energy research. How important is it for science that 
you have access to these complementary neutron sources for 
varying fluxes and energies?
    Dr. Orbach. It's extraordinarily important because the 
excitations we look at, in various structures, have different 
energies. And they also are sometimes very difficult to see 
with low fluxes. The power of the ATR is exceptional and it's 
an exceptional resource in that regard.
    Senator Craig. Well, I look forward to working with you and 
you working with the lab. As I say, we have these marvelous 
resources at hand, and now we're in the business of 
transforming them into plow shares. And that's an exciting 
opportunity for us and for the world and we thank you.
    Senator Dorgan. Senator Allard.
    Senator Allard. Thank you, Mr. Chairman.

                                EARMARKS

    Senator Allard. I want to cover the renewable energy lab 
there in Colorado at Golden. They do basic research and as well 
as applied research. And one of the criticisms I've gotten from 
the lab is that they begin to count on a certain amount of 
money and then all of sudden earmarks come in and take away 
from what they were counting on in the budget process. What 
portion of your budget is dispersed based on earmarks and what 
portion is given out in grants?
    Dr. Orbach. Well, I can only give you the fiscal year 2006 
numbers, because the fiscal year 2007 grants are still 
underway.
    In 2006, we had $129 million that were congressionally 
directed out of a total budget of $3.6 billion.
    Senator Allard. Three-point-six billion dollars?
    Dr. Orbach. Yes.
    Senator Allard. Okay. All right. And, how much of your 
proposed funding will be directed to programs--well, let me 
see, no--and how has that split changed over the last 5 to 10 
years?
    Dr. Orbach. It's increased quite substantially. In previous 
years it was around $60 million, but it more than doubled in 
fiscal year 2006.
    Senator Allard. So, you're saying from fiscal year 2005 to 
fiscal year 2006 that earmarks doubled?
    Dr. Orbach. Yes.
    Senator Allard. Really. That is a very significant 
increase. And, then in the bill that we had last year I think 
there was a lot of earmarks in that again. So, that trend was 
continuing. It started out that way at least, didn't it?
    Dr. Orbach. The fiscal year----
    Senator Allard. It never made it to the floor, maybe, did 
it?
    Dr. Orbach. I'm sorry.
    Senator Allard. Did it make it to the floor? I was trying 
to remember, on the Energy Bill. I don't think it did.
    Dr. Orbach. Well, the Senate bill did not make it to the 
floor. The House bill passed.
    What we are doing is that I sent out a letter, actually 
today and tomorrow, to all those who received congressionally 
directed funds in fiscal year 2006 and gave them the 
opportunity to apply through our normal process of peer review 
in fiscal year 2007.
    Senator Allard. Based on ability to do the research?
    Dr. Orbach. Based on the mission of the Department and the 
quality of the research that will be determined through peer 
review.
    Senator Allard. Research institutions in Colorado and 
agencies seem very comfortable with the grant process where 
you're rewarded the grant based on your ability to do the 
research and your proven record of performance. And so, I'm 
very comfortable with that grant process. And, you know, we'll 
be looking at ways with what we can do to make sure we sustain 
the grant process.
    Dr. Orbach. Thank you.
    Senator Allard. Now, as I mentioned, renewable energy and 
energy efficiency are important to me and the chairman has a 
specific interest in that too. How much of your proposed 
funding will be directed to programs that involve research in 
renewable energies and conservation?
    Dr. Orbach. I can give you some specific numbers, but it's 
a very complex calculation. And the reason is that many of our 
research programs support renewable research, but indirectly. 
For example, our light sources for structures for biological 
systems, the Joint Genome Institute. I would prefer to answer 
that for the record, if I could, in detail, but also to go into 
the richness of the way in which we support renewable energy. 
The AEI, the Advanced Energy Initiative, that's one crosscut 
that we've done, is around $700 million. That includes fusion 
energy. And so, part of this depends on how you define 
renewables. And, I would prefer that, so as not to mislead you, 
to give you the numbers for the record, but the numbers in our 
biology and environmental research exceed $100 million in the 
2008 budget, $75 million of which are the three bioenergy 
centers that we'll be funding in fiscal year 2008.
    Senator Allard. Well, I'm interested in how much goes 
toward renewable energy. I assume maybe the chairman of the 
committee might be too. So, I would get those figures to me and 
I think the committee----
    Dr. Orbach. It's a very significant fraction, but I would 
urge you to include the resources that we use for the purposes 
of renewable energy.
    [The information follows:]

   Proposed Funding for Research Programs in Renewable Energies and 
                              Conservation
    The DOE Office of Science supports an enormous range of basic 
scientific research relevant to renewable energy and energy efficiency. 
To convey the full scope of this research and the relevant funding, I 
would like to take a moment to explain the complex process by which 
basic research ultimately informs, shapes, and transforms our energy 
economy by providing new technologies, approaches, and products.
    Basic research differs from applied research in a key respect: in 
basic research there is often no one-to-one correspondence between a 
discovery or breakthrough, on the one hand, and an application, on the 
other. Breakthroughs often lead to multiple applications. Applications 
often rely on multiple breakthroughs. The relationship between the 
explicit goal of a basic research program and its ultimate impact on 
the energy economy may be quite unexpected and surprising.
    For example, as I pointed out in my opening remarks, one of the 
major breakthroughs needed to make intermittent renewable energy 
sources such as solar and wind power part of electrical baseload is a 
major improvement in our methods of electrical storage. A major 
breakthrough in electrical storage would likely change the entire 
technological and economic calculus affecting solar and wind power. It 
could bring solar and wind into their own.
    But, for budget purposes, analysts would not tend to classify 
funding for research in electrical storage as research in renewable 
energy--even though it could have a far more profound effect on the 
technological and commercial viability of these renewables than some of 
the research that is focused more explicitly on solar and wind 
technologies themselves.
    There is a second and related point. Basic research in the physical 
sciences today is critically dependent on advanced facilities and 
instruments. The materials research sponsored by our Basic Energy 
Sciences (BES) program--which has enormous implications for both energy 
efficiency and the development of more effective solar and other 
renewable energy sources--relies on a set of advanced, high-intensity 
light and neutron sources. These light sources--and we own and are 
building the very best in the world--are expensive to create, and a 
large portion of BES's budget goes to the construction and operation of 
these facilities. Yet they provide the critical tools our scientists 
need to push the boundaries in such areas of research. BES's four 
Nanoscale Science Research Centers (soon to become five) provide tools 
that will revolutionize materials, create vast new energy efficiencies 
throughout the economy, and also enable us to overcome at the nanoscale 
many of the barriers that prevent solar and other renewable energy 
sources from being truly efficient. Our Joint Genome Institute (JGI), 
built and operated by our Biological and Environmental Research (BER) 
program, is playing a critical role in the biofuels revolution. JGI is 
using its high-throughput capabilities to sequence the genomes of key 
bioenergy crops such as the poplar tree and key organisms, such as the 
200 microbes in the hindgut of the termite, which hold Nature's secret 
to the super-efficient breakdown of cellulose, a critical step in 
producing cellulosic ethanol.
    Yet if a conventional budget analyst were asked to identify our 
funding for renewable energy and energy efficiency, none of these 
facilities might show up in the analyst's total, because they are not 
classified in that way--even though they are playing a critical role in 
our ability to make progress in these fields.
    A third point is that many of the breakthroughs we achieve in the 
search for more efficient materials and motors, or more effective 
conversion of solar energy to fuels, will have multiple applications 
throughout the economy, improving quality of life for Americans and 
strengthening U.S. global economic competitiveness. The National Energy 
Policy noted that the U.S. economy grew by 126 percent since 1973, but 
energy use increased by only 30 percent. Half to two-thirds of these 
energy savings came from technological improvements throughout the 
American economy, but of course these technological improvements also 
had a major effect on the strength of the U.S. economy and Americans' 
quality of life.
    So I want to encourage the committee to view this basic research 
and its relevance in its totality.
    With that preface, here is a programmatic profile of where our 
transformational basic research relevant to renewable energy and energy 
efficiency is to be found.
    Basic Energy Sciences ($1.5 billion under the fiscal year 2008 
request). BES is our largest ``use-inspired'' energy-related research 
program. Virtually every research program under BES's Materials Science 
and Engineering Division is pursuing research relevant to increased 
efficiency in energy production and use through the development of 
lighter-weight, stronger materials, more efficient engines, and more 
effective transmission and storage of electrical power, to name only a 
few examples. The Chemical Sciences, Geosciences, and Biosciences 
Division is also providing transformational research aimed at 
efficiencies through improved catalysis and combustion. In addition, 
within the BES program, $94.6 million is specifically directed toward 
research in renewable energy, including solar, biomass, hydrogen, and 
wind.
    Biological and Environmental Research (Genomics: GTL Program: 
$154.8 million under the fiscal year 2008 request; Joint Genome 
Institute: $60 million under the fiscal year 2008 request). BER's GTL 
program is devoted to basic research aimed primarily at discoveries 
relevant to renewable energy, providing the Nation's major thrust 
toward basic science breakthroughs leading to the development of cost-
effective commercially viable cellulosic ethanol and other forms of 
biofuels. GTL is the heir to the Human Genome Project, which the DOE 
Office of Science (then known as Energy Research) initiated in 1986. 
GTL has been applying the major advances in biotechnology that have 
grown out of that monumental effort to the advanced study of microbes 
and plants for energy production, environmental remediation, and carbon 
sequestration. This includes $75 million for the establishment of three 
new Bioenergy Research Centers, for which proposals have been received; 
results of this competition will be announced in June. In addition, as 
mentioned, BER's Joint Genome Institute is playing a critical role by 
providing high throughput sequencing of the plants and microbes for 
biofuels.
    Fusion Energy Sciences (FES) ($427.9 million under the fiscal year 
2008 request). Fusion is not usually classified as a renewable energy 
source, but it offers essentially the same benefits: a theoretically 
almost limitless supply of energy with minimal impact on the 
environment. Fusion holds out the promise of delivering plentiful, 
clean, carbon-free energy using elements that are available in abundant 
quantities on earth with virtually no adverse environmental impact. As 
the planet's consumption of energy rapidly increases, fusion holds out 
one of the most formidable potential solutions to growing global energy 
demand; and, like renewables, fusion will produce energy that is carbon 
dioxide and greenhouse gas free. Side by side with renewables and 
greater energy efficiencies throughout our economy, fusion in all 
likelihood will play a major role in our energy portfolio of the 
future. The request includes $160 million for the U.S. contribution to 
ITER, the major international fusion reactor that the United States has 
joined with the European Union, Japan, China, the Russian Federation, 
South Korea, and India to build, starting this year.
    Advanced Scientific Computing Research (ASCR) (approximately 25 
percent of the $340.2 requested for the program in fiscal year 2008). 
Finally, though the amounts are difficult to quantify because of the 
in-kind nature of the contribution, the Advanced Scientific Computing 
Research program contributes substantially to Office of Science efforts 
on renewable energy, energy efficiency, and fusion energy by providing 
computer time, resources, and technical assistance at its 
supercomputing facilities. ASCR provides a very small amount (a few 
million dollars) of direct support for renewables research but provides 
a significant amount for relevant research (about 25 percent of the 
program) through partnerships with BES, BER, and FES. These 
partnerships include the Fusion Simulation Project, computational 
chemistry, materials simulations, computational biology, and supporting 
efforts in computer science and applied mathematics. In addition, the 
National Energy Research Scientific Computing (NERSC) facility provides 
computing time to researchers supported by the Office of Science. Over 
60 percent of the fiscal year 2007 allocations at NERSC are to BES 
(chemistry, materials, geosciences, and engineering), FES, or BER 
researchers. The ASCR Innovative and Novel Computational Impact on 
Theory and Experiment (INCITE) program provides access and computing 
time to the best research from academe, industry, and government labs 
without regard to source of support. In 2007, nearly half of the INCITE 
projects are in fusion, materials, chemistry, engineering, or biology 
representing over 35 million hours of computer time for research in 
these areas.
    This answer necessarily excludes crucial areas of basic science 
research for which the Office of Science is steward, including climate 
modeling, research toward environmental remediation of DOE sites, and 
fundamental research in nuclear and high energy physics, among others. 
Furthermore, it is reasonable to expect some of the fundamental 
research in nuclear and high energy physics to also have energy 
implications, but on a much longer time scale. This very fundamental 
research provides the broader scientific foundation for our ``use-
inspired'' basic research related to energy.

    Senator Allard. That would be fine.
    Dr. Orbach. Good.
    Senator Allard. Thank you, Mr. Chairman.
    Senator Dorgan. Senator Murray.

                            300 AREA AT PNNL

    Senator Murray. Thank you, Mr. Chairman. And, we'd love to 
have you come out and visit PNNL and see some of those great 
research projects. It really is amazing what they're doing. 
And, going back to my questioning. You know that the 
replacement of the 300 Area is top priority for PNNL, and as I 
said, it's apparently hung up over this third party financing 
that OMB is demanding. If you can share with this committee how 
you're dealing with that, I would really appreciate it.
    Dr. Orbach. Well, it's important to us too. What we have 
done, and thanks to you for the help you have given us in 
fiscal year 2007, is to steer $10 million in 2007, which would 
complete the $20 million that fits the profile for the physical 
sciences facility and the 325 building. The replacement process 
is a package and it relies on the third party financing of two 
buildings. We have worked very closely with the laboratory and 
we believe we now have a package that will meet the 
requirements for third party financing. We have had to take 
into account market prices. It's really a good value for the 
taxpayer and we believe that we now have a package which the 
taxpayer will find valuable.
    Senator Murray. And will OMB approve it?
    Dr. Orbach. We will be submitting it to OMB. We hope to 
have final release from our department by the end of this week 
and then submit it to OMB. We have an understanding with them 
that within a month we will get a response. So that we can 
release those funds, hopefully, by the end of April or 
beginning of May.
    Senator Murray. Okay. Do you have a contingency plan if 
they say no?
    Dr. Orbach. We would probably go back to the drawing board 
and try and fix the third party financing. We think this will 
work, but third party financing of two parts is essential to 
successful departure from the 300 Area. And, I'd hate to give 
them up. We have both a biology and a computational facility. 
PNNL's role in computation is going to be very important in the 
future and that building is a stand alone building, which 
primarily will be Department of Homeland Security, large data 
sets. I think that's essential for the future of the 
laboratory. So, I'm going to do the best I can to get those 
third party packages approved.
    Senator Murray. Okay. Well, so within 1 month we should 
hear from OMB on----
    Dr. Orbach. Yes. My best estimate is that it will leave the 
Department, hopefully, by the end of this week and then we have 
an understanding with OMB that we'll get a response within 
roughly 1 month.
    Senator Murray. Well, there are two other Federal partners, 
NNSA and DHS, DHS you mentioned. Neither of them have any funds 
in the fiscal year 2008 budget request, and I was told that if 
funds were added by Congress to the Department of Homeland 
Security budget in 2007, which I was able to do, that they 
would include funds in 2008. We added $2 million, yet there are 
no funds in the budget request. Are you working with NNSA and 
DHS to ensure adequate funds are included?
    Dr. Orbach. Yes. We're working very closely with them. We 
have an MOU that you're aware of. The funding in 2007 has $7.9 
million from NNSA and $2 million from DHS in addition to our 
$10 million. The $2 million is set, so is the $7.9 million, so 
I think we can deliver on the 2007 committment. We're sort of 
taking one year at a time. In 2008, for the reasons you 
understand----
    Senator Murray. They did not include any money in the 2008 
request.
    Dr. Orbach. Yes. I have spoken with Admiral Cohen about 
that and we hope that some resolution will be found.
    Senator Murray. Will be found. Okay, that's not a very 
definitive answer. I hope that as a steward of the PNNL and all 
the laboratories that you really take a leadership role and 
push them in coming together with us on that.
    Dr. Orbach. I will promise you that. I have been doing it 
and I will continue to do that.

                              5-YEAR PLAN

    Senator Murray. Okay. I also was disconcerted that the 5-
year plan made no mention of this project either. And I was 
curious if this is a priority and we're all moving toward, why 
it wasn't part of the 5-year plan?
    Dr. Orbach. Well, the 5-year plan came to us at a bizarre 
time. We didn't have a 2007 budget and we were trying to put 
together the 5-year plan. So we didn't know how the 2007 budget 
would fit into the 2008 and then, from then on. It's not a one-
year-at-a-time, but a continuum. And, frankly, we had no time 
to go through the review process with OMB that we normally 
would in a 5-year plan. So, what you have, as you noted, is 
really just a simple extrapolation of the 2008 budget out for 5 
years on a proportional basis. It's not a 5-year plan, it's 
2008----
    Senator Murray. It's a budget based on current numbers and 
it's not a plan.
    Dr. Orbach. That's correct. It's based on the President's 
request for 2008 and then extrapolated out.
    Senator Murray. It's disconcerting to see that because we 
need that kind of leadership in the 5-year plan to make sure 
we're all----
    Dr. Orbach. Absolutely, and in the previous year, in fiscal 
year 2007, we had a 2006 budget so we could put a 5-year plan 
together. But, the budget process this year just didn't give us 
the opportunity to do that.
    Senator Murray. Thank you, Mr. Chairman.
    [The statement follows:]

               Prepared Statement of Senator Patty Murray

    Thank you Chairman Dorgan for holding this hearing today and giving 
us the opportunity to discuss these important DOE programs.
    I'm very pleased the Administration is continuing to increase 
funding for basic and physical sciences. It is vital to build robust 
research and development budgets and to maintain a healthy level of 
investment in our national laboratory system in order to attract the 
best and brightest minds in the sciences.
    If the United States is to remain on the cutting edge of research 
and development, the work of the Office of Science is a resource we can 
not afford to under fund. As a long time advocate of increased funding 
for the Office of Science, I'm pleased to see the administration has 
requested $4.4 billion for fiscal year 2008. These investments are 
necessary to keep us on track as leaders in discovery and technology 
advancements.
    I also take great pleasure in representing one of our national 
laboratories. The Pacific Northwest National Laboratory does cutting 
edge work that is an integral part of the future growth of Washington 
State and our Nation. It's important to make full use of all our 
resources to advance science, and the national lab system should play a 
key role.
    One critical project the PNNL has been working on in Washington 
State is the capability replacement project. I look forward to getting 
the opportunity to ask you several questions on that project shortly 
and other matters vital to the Hanford cleanup project.
    Thank you for coming today to testify, Dr. Orbach.

    Senator Dorgan. Senator Murray, thank you very much.

                            RENEWABLE ENERGY

     Secretary Orbach, my colleague Senator Allard is 
absolutely correct that many of us will be interested in the 
issue of renewable energy and the work that you're doing in 
those areas and will want to keep abreast of the relationship 
with the other parts of the Energy Department that are doing 
research in those areas as well.
    Senator Domenici, did you have additional questions?
    Senator Domenici. Mr. Chairman, I believe that if we do, 
and I would prefer to submit them through my staff to the 
Secretary if you don't mind and then back to the committee. I 
would wrap it up from my standpoint by saying, while your 
office has been kind of put in the limelight, by the 
President's remarks in his State of the Union Address and some 
that followed. For many of us, we now know that you have a very 
broad charter. You are not limited to one thing or another. You 
have a very broad base of activities that come within your 
jurisdiction and in your power. And, I hope, and from what I 
can see, I think I'm right, that our chairman is going to be 
looking for places where we can make a real contribution to 
America's energy unpreparedness, in terms of our being too 
heavily committed and too big a user of petroleum products for 
our lifestyle, which carries with it significant negative 
baggage. And, you have been given an opportunity to do, to lead 
a research effort in a number of areas to change that situation 
that exists and is not doing us a bit of good as a people.
    That's a fun situation to be in, if in fact you are given 
some tools.
    Dr. Orbach. Senator, thank you. We have an opportunity here 
that I think we have not had before. The scientific community 
understands exactly your words and has made decisions, personal 
decisions to get involved in energy research. What we are going 
to do is the best basic research in the world that, as I said 
in my opening remarks, will make renewables contribute in a 
significant fashion, not at the 1 and 2 percent, but at the 30 
percent level in our economy.
    Senator Domenici. That's your goal, you say.
    Dr. Orbach. Yes.

                      MAJOR CONSTRUCTION PROJECTS

    Senator Dorgan. Secretary Orbach, I too am going to send 
you a list of questions and I'm interested in visiting some of 
the laboratories and to try to see some of the work, visit with 
the scientists, and so on. It must be almost nirvana to be able 
to hire scientists to operate a department like yours and just 
inquire what's happening in the universe. So, I imagine that 
you have some unbelievably bright staff, some of America's 
best, working on some breathtaking scientific projects. I'm 
also going to be asking our staff here to do some visits to the 
laboratories and will keep in close touch with you.
    I want to ask, you don't have any major construction 
projects in your 2008 budget request, but we know of course 
that you have several projects envisioned in the longer term. 
The International Linear Collider, the ITER and the National 
Synchrotron Light Source II, apparently. Do you have the out-
year cost estimates for these projects? How confident are you 
in the estimates? Will you be able to accommodate, you think, 
in future budgets, large construction projects? Are these 
projects or other projects, in your 20-year facilities plan or 
is that 20-year facilities plan being modified to accomplish 
these projects? So, these are, I'll let you answer that 
question, but these are the kind of questions we're also going 
to submit to you because we want to work with you to make sure 
that you have a funding plan for the longer term, not just 
2008, a funding plan that works.
    Dr. Orbach. Yes, actually, we take pride in that. The 
Spallation Neutron Source was just finished last year. It was 
$1.4 billion. It came in slightly under budget and slightly 
ahead of schedule. Project management is very, very serious to 
us. In terms of ITER, we can give you the explicit numbers out 
to 2014 when the construction is intended to end. And, we have 
been the primary driver for project management in the ITER 
construction process.
    Senator Dorgan. What does ITER look like physically?
    Dr. Orbach. It's huge. It's about eight stories high. It 
looks like a donut. It's a way of containing a fusion plasma at 
200 million degrees of sufficient density to generate half a 
gigawatt of power. So, it's a big donut. If you imagine a donut 
and you put your hand in the middle and open up your fingers, 
you have a d-like cross section, and that's now thought to be 
the appropriate geometry for stability of these plasmas at 
these huge temperatures. It will burn deuterium and tritium. 
These are two isotopes of hydrogen. It's the way the sun works. 
And, they will produce nothing but energy and helium gas. It's 
completely benign.
    Senator Dorgan. You know, Secretary Orbach, your 
personality changes when I ask you a question that allows you 
to provide an answer you know I won't understand.
    Dr. Orbach. I'm sorry. I think----

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Dorgan. But, let me tell you something. I hope I 
speak for Senator Domenici as well. If he understood all that, 
then I'm in serious trouble as a chairman. We really are very 
interested in these things and interested in what our 
scientists are doing. And, I asked the question to elicit your 
response. I hope that our subcommittee, all of the members of 
our subcommittee will be interested in working with you on 
these really fascinating projects.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

            Questions Submitted by Senator Dianne Feinstein

                 BIOLOGICAL AND ENVIRONMENTAL RESEARCH

    Question. The Department of Energy's Office of Biological and 
Environmental Research (DOE-OBER) has a robust program for monitoring 
carbon cycles on land, but does not address ocean carbon. DOE 
traditionally has not examined ocean acidification in the context of 
global warming. Increases in atmospheric carbon dioxide make the ocean 
more acidic, and ocean acidification has a large impact on global 
carbon cycles. Please answer the following questions:
    Do you believe that monitoring of oceanic carbon cycles is within 
the scope of the Office of Biological and Environmental Research?
    Answer. The uptake of carbon dioxide by the ocean has a chemically 
well-understood effect on the acidity of ocean water. Since the 
industrial revolution, the pH of the ocean has been reduced slightly. 
This fact was brought to the attention of the scientific community in 
part through global ocean carbon cycle modeling carried out at DOE 
laboratories, with the support of the Biological and Environmental 
Research (BER) program. Changes in ocean pH may have an effect on the 
ocean carbon cycle in the future, and the BER climate modeling program 
will attempt to account for those effects in the development of the 
coupled climate-carbon cycle models supported by the program. The BER 
climate change research program conducts basic research and develops 
advanced climate modeling. Supported research includes studying the 
effects of climate change on important terrestrial ecosystems, but does 
not include environmental monitoring. Monitoring of the oceanic carbon 
cycle is outside the present scope of BER; however, it is supported by 
other Federal agency partners in the Climate Change Science Program 
(CCSP), including the National Oceanic and Atmospheric Administration 
(NOAA) and the National Science Foundation (NSF).
    Question. If so, how much of the 17 percent increase in funding 
provided by the President's fiscal year 2008 budget would be needed to 
initiate such a program? Is more funding needed? If so, how much?
    Answer. As stated above, environmental monitoring is outside the 
scope of the BER basic research program. Monitoring of ocean carbon 
cycles is supported by other Federal agencies.
    Question. If not, how can other Federal agencies best take 
advantage of DOE's expertise in this realm? What types of programs do 
you envision where the Office of Biological and Environmental Research 
provides important support to this national need?
    Answer. One of the most robust methods of studying the carbon cycle 
of the entire ocean, and the chemistry of ocean water, including its 
acidity, is through detailed, three-dimensional models of the 
biogeochemistry of the ocean. When such a model is coupled to a model 
of the atmosphere, uptake of atmospheric carbon dioxide by the ocean is 
accounted for. This approach is central to the BER climate modeling 
program, which includes leading-edge three-dimensional modeling of the 
coupled atmosphere-ocean system. Other Federal agencies can best take 
advantage of DOE's expertise in this realm by communicating their 
process research results to the modeling teams so that the models 
account for the most up-to-date scientific results.
    Question. The Department of Energy's Office of Biological and 
Environmental Research (DOE-OBER) has developed unique capabilities to 
monitor and predict chemical and physical interactions between fluids 
and subsurface environments. This capability is essential to 
understanding the behavior of carbon dioxide in the deep subsurface; 
and the application of this knowledge to the permitting and monitoring 
of carbon sequestration sites. Please answer the following questions:
    In addition to technology development, what efforts are you making 
to improve our scientific understanding of the behavior of carbon 
dioxide at potential sites for geologic carbon sequestration?
    Answer. Within the Office of Science, the Basic Energy Sciences 
(BES), Biological and Environmental Research (BER), and Advanced 
Scientific Computing Research (ASCR) programs support research that 
underpins efforts to understand the behavior of carbon dioxide 
sequestered in deep geological formations. BES-supported research 
focuses on areas where improved understanding is needed to evaluate the 
potential for deep underground sequestration, including understanding 
the mechanical stability of porous and fractured reservoirs/aquifers, 
understanding multiphase fluid flow within the aquifers, and 
understanding the geochemical reactivity within the reservoirs/
aquifers. BER supports research towards the development of methods or 
strategies to enhance carbon sequestration in long-term stable forms in 
plants and soils. This research includes the development of functional 
genomic, genetic, and proteomic approaches that may lead to improved 
biomass systems for carbon fixation and sequestration. ASCR leads the 
development of high-performance computers for related scientific 
applications and supports research in multiscale mathematics and 
computation science needed to develop optimal codes for modeling 
complex systems such as subsurface biogeochemical processes. ASCR has 
also partnered with BER to support research on groundwater reactive 
transport modeling and simulation through the Scientific Discovery 
through Advanced Computing (SciDAC) program.
    Additionally, the Office of Science has led a series of workshops 
that engaged the broader scientific community to identify the 
challenges associated with terrestrial and subsurface geological carbon 
sequestration and promising research areas that, if pursued, could lead 
to further understanding of related biochemical and geochemical 
processes and enable the development of long-term sequestration 
technology options. More information on these workshops can be found in 
the subsequent reports: ``GTL: Genomics Roadmap--Systems Biology for 
Energy and Environment,'' August 2005 (http://genomicsgtl.energy.gov/
roadmap); the Basic Research Needs for Geosciences: Facilitating 21st 
Century Energy Systems workshop held in February 2007, (report to be 
released soon); and Computational Subsurface Sciences Workshop, held in 
January 2007 (http://subsurface2007.labworks.org/report/).
    Question. At the current level of investment, how long before we 
have sufficient scientific knowledge to begin permitting various sites 
around the country in the near future?
    Answer. Sufficient scientific understanding currently exists to 
support planned large-scale demonstrations of carbon sequestration in 
depleted oil and gas reservoirs. Only after these large-scale 
demonstrations are conducted will there be sufficient understanding of 
the long-term stability and environmental impacts of geological storage 
of carbon dioxide in such reservoirs. DOE's Office of Fossil Energy is 
pursuing this applied research and development path. Knowledge about 
deep saline aquifers is far less extensive, and many substantial issues 
need to be addressed through research and demonstration before it will 
be possible to permit sequestration in saline aquifers at a commercial 
scale.
    Question. In addition to current efforts in carbon capture and 
sequestration technology; what additional programs are needed to 
develop carbon sequestration science to the point where we can safely 
permit and monitor sequestration sites? How much additional funding is 
needed to implement these programs?
    Answer. The Office of Science, in coordination with the Office of 
Fossil Energy, is supporting a range of basic research activities that 
will provide a sound scientific basis for carbon sequestration. Such 
research includes the study of geophysical imaging methods needed to 
measure and monitor below-ground reservoirs of carbon dioxide resulting 
from geological sequestration, multiscale modeling to understand and 
visualize saline aquifers and other geological reservoirs, and studies 
to enhance long-term sequestration processes and the stability of 
stored carbon in terrestrial vegetation and soils. The recent Office of 
Science-led workshops on Basic Research Needs for Geosciences: 
Facilitating 21st Century Energy Systems, February 2007, and 
Computational Subsurface Sciences Workshop, January 2007, identified 
priority research areas needed to develop carbon sequestration science. 
The results of these workshops will help inform ongoing research 
planning and future budget requests.
    Question. In fiscal year 2007, some compromises had to be made for 
new facility construction and for user facility operations in the 
synchrotron radiation/photon science area. How do you see the fiscal 
year 2008 budget addressing the objective of maintaining the on-time, 
on-budget completion of major construction projects and also achieving 
a level of funding for facility operations which is needed to ensure 
scientific accomplishment commensurate with the large investments that 
have been made in major scientific user facilities?
    Answer. To support users and to maintain the facilities and 
instruments, the fiscal year 2008 budget funds facility operations 
generally at or near optimal levels, with the exception of Fusion 
Energy Sciences facilities, which would be operated at about half of 
optimal levels as part of a balanced fusion program, consistent with 
the fiscal year 2007 request and fiscal year 2006 appropriation. The 
fiscal year 2008 budget provides funding for the major construction 
projects and major items of equipment at a level that assumes full 
funding of construction in fiscal year 2007; i.e., the fiscal year 2008 
budget was submitted to Congress prior to passage of the final fiscal 
year 2007 appropriation. Therefore, impacts on construction projects 
from the fiscal year 2007 appropriation are not addressed in the fiscal 
year 2008 budget.
    Question. California is, and has been an R&D leader, contributing 
greatly to the U.S. economy through its scientific and technical 
talent. The challenge is sustaining this talent with increasing 
pressures on the Federal budget. The Nation needs to leverage its 
investments across agencies and throughout the U.S. scientific 
enterprise to effectively and synergistically apply its world-class R&D 
capabilities. I am interested in how the DOE plans to leverage the 
investments and accomplishments of the NNSA complex, such as its 
tremendous supercomputing capability and the fusion capability of the 
National Ignition Facility, to support our civilian science programs? 
Will you and the Office of Science be able to reap benefits from the 
investments made to develop NNSA's scientific capabilities to support 
DOE's national security mission? How do you plan to leverage the 
capabilities at universities, Office of Science laboratories, and the 
NNSA laboratories to capitalize on the strengths and capabilities 
across the DOE complex?
    Answer. The Office of Science (SC) utilizes investments made by 
NNSA in the field of High Energy Density Physics (HEDP) as well as in 
high-performance computing in a number of ways.
    Increased cooperation between these two programs will have benefits 
for both. The NNSA HEDP infrastructure, represented by facilities such 
as the National Ignition Facility (NIF) in California, OMEGA at the 
University of Rochester, and the Z-Pinch at Sandia, are all used by SC 
funded researchers to advance the field of High Energy Density 
Laboratory Plasmas (HEDLP), which is a subset of HEDP. These facilities 
will be used by SC to perform research on extreme states of matter, for 
example, simulating in a laboratory physical properties of phenomena 
that once could only be viewed from afar by telescope. These facilities 
may also serve to move forward research on inertial fusion energy.
    Many of the facilities that NNSA uses for stockpile stewardship, 
including Z-Pinch, Omega, and NIF (which will begin operations in 
2010), can be used for both national security and energy-related HEDP 
research. The joint NNSA-SC Fusion Energy Sciences (FES) HEDLP program 
is currently being put together. A workshop to consider integration of 
NNSA and FES program elements is planned for May 2007. Details of the 
joint HEDLP program are contained in the DOE NNSA and SC fiscal year 
2008 President's Budget Request narratives.
    In the area of computation, there has been a high level of 
collaboration to advance the state-of-the art in computation. NNSA is a 
world leader in mission-driven computation for its stockpile 
stewardship program. SC laboratories have assisted in the development 
of software codes, for instance, and have also benefited from NNSA's 
experience in running machines like Cray's Red Storm and the IBM 
BlueGene/L.
    Researchers from NNSA and SC labs as well as university researchers 
are already reaping benefits from the array of facilities within the 
DOE complex. We are examining ways to increase collaboration with NNSA 
facilities without compromising national security or NNSA's mission. We 
expect this collaboration to develop further and help keep the United 
States at the forefront of many areas of physical science.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici

                  LOW DOSE RADIATION EFFECTS RESEARCH

    Question. Dr. Orbach, you and I have worked on understanding the 
effects of low dose radiation for some time. It appears that the 
science indicates that the linear no-threshold model theory does not 
hold up scientifically.
    Can you tell me what the conclusions of the Department's research 
indicate and when you will complete this evaluation?
    Answer. Until recently, biophysical models of response to radiation 
exposure have assumed independent action of ionization events in cells 
and tissues. The models assume that the single cell is the unit of 
function. The models also assume that every ionization event increases 
the probability of DNA breaks. Together, these physical/biological 
assumptions supported linear, no-threshold models of radiation risk and 
cancer. Historically, measurements of initial radiation damage such as 
cell death, chromosome aberrations, or micronuclei formation in 
cellular systems showed a fairly linear response with dose, but these 
experiments seldom encompassed the lower doses of interest.
    New research from DOE's Low Dose Program directly challenges the 
old fundamental assumptions. The new findings provide compelling 
evidence that ionization events in cells and tissues are not completely 
independent and that tissues have surveillance mechanisms that 
dramatically affect the development of cancer and the behavior of 
cancer cells. The research is establishing the importance of studying a 
tissue's biological response to an exposure, rather than studying just 
the initial events within an individual cell.
    This new research includes recent studies that highlight biological 
signaling between irradiated cells and nearby non-irradiated cells. 
This crosstalk cannot be explained with the older biophysical 
paradigms, which assume that the single cell is the unit of function. 
These data also show that cells within a tissue are not independent of 
each other in a multi-cellular organism. Indeed, the signaling from 
non-irradiated cells can actually eliminate damaged cells from a 
tissue. These and other results are consistent with the conclusions of 
the recent French National Academy Report ``Dose-effect Relationships 
and Estimation of the Carcinogenic Effects of Low Doses of Ionizing 
Radiation'' (March 2005).
    We believe that investments being made to study the effects of low 
doses of radiation in 3 dimensional tissues, a significant advance over 
traditional isolated cell approaches, will provide substantial results 
in the next 3 to 5 years. Research to understand the variability and 
genetic susceptibility of individuals to low doses of radiation is much 
more difficult but will have significant payoffs in 5 to 7 years.
    Question. How will you work to see that this information is used to 
make informed decisions about environmental and worker safety?
    Answer. In addition to verifying and expanding research findings, 
we are working to communicate the new biological paradigms to the 
larger scientific communities in the United States and around the 
world. We feel that the quickest and most appropriate route to 
establish the need for reconsideration of risk estimate models is to 
gain understanding and acceptance from the scientific community first, 
while informing the regulating agencies and the general public along 
the way.
    The growing body of research from the Low Dose Program now provides 
a scientific basis for reconsideration of models used to set regulatory 
standards. The Low Dose Program is supporting research to help in the 
development of new mechanistic models that would incorporate all 
aspects of radiation biology, from cellular and molecular actions 
within tissues, to the evolution of cancer as a multi-cellular disease. 
Ongoing research in the Low Dose Program and advances in systems 
biology hold promise in providing this modeling framework, which can 
facilitate moving new biological paradigms into the regulatory process.

                   SCIENTIFIC INTERACTION WITH CHINA

    Question. I have been talking for quite some time about the need 
for a U.S. global climate change policy that incorporates all world 
economies, including the developing world. The foundation of our 
success will be the development of affordable technologies.
    Today, the United States is the largest emitter of greenhouse 
gases, but China will soon overtake us in this regard. I believe it is 
critical that we engage China as a partner in our efforts to curb 
reductions in greenhouse gases. We need to launch a serious, ambitious 
effort to reduce greenhouse gas emissions in both of our nations 
through technology deployment and other coordinated efforts.
    Please tell me about the current collaborative efforts between the 
United States and China to advance technologies that will reduce 
greenhouse gas emissions, including any bilateral R&D programs.
    Answer. The fossil energy protocol is a bilateral agreement on 
energy technology cooperation that has a goal of reducing the impact of 
China's growing demand on global hydrocarbon markets; some of the 
activities in the Protocol relate to modeling and technologies for 
control of greenhouse gas emissions in China. Additionally, both China 
and the United States are charter members of the Carbon Sequestration 
Leadership Forum (CSLF), which is an international climate change 
initiative focused on development of improved cost-effective 
technologies for the separation and capture of carbon dioxide for its 
transport and long-term safe storage. The United States and China are 
co-sponsors of a CSLF-recognized project for ``Regional Opportunities 
for CO2 Capture and Storage in China''.
    Question. Can you please tell me what additional steps this 
administration plans to take to address this important issue?
    Answer. The fossil energy protocol was renewed in 2006 for an 
additional 5 years.

           WORKFORCE DEVELOPMENT FOR TEACHERS AND SCIENTISTS

    Question. I am pleased to see that the fiscal year 2008 budget 
request would increase this account to $11 million, an increase of 57 
percent over the operating plan for fiscal year 2007.
    I believe the Department of Energy can make an important 
contribution to the quality of math and science teaching in this 
country, which is so critical to our Nation's continued economic 
competitiveness.
    I understand that the Department is developing a strategic plan for 
the scale-up of its activities in this area.
    Could you describe the main elements you are including in this 
strategic plan?
    Answer. A strategic plan is being developed in the Office of 
Science for its Office of Workforce Development for Teachers and 
Scientists (WDTS). It is not a Departmental-wide blueprint for this 
program area. As the strategic plan is under development, I regret that 
I am unable to provide a substantive answer to your question at this 
time. As to a ``scale-up'' of our activities, I point you to 
recommendation number five of the just-released interagency Academic 
Competitiveness Council report (located at http://www.ed.gov/about/
inits/ed/competitiveness/acc-mathscience/index.html), which states that 
``funding for Federal STEM education programs designed to improve STEM 
education outcomes should not increase unless a plan for rigorous, 
independent evaluation is in place, appropriate to the types of 
activities funded.'' We have begun working with the other members of 
the Council under the auspices of the National Science and Technology 
Council to implement the recommendation in this report. Overall, the 
fiscal year 2008 request to Congress of $11.0 million is an increase of 
38 percent over the fiscal year 2007 appropriated level of $8.0 
million.
    Question. How will you ensure that the expanded program will 
include the widest possible cross-section of our Nation's educational 
system?
    Answer. In January 2007, WDTS held a series of 9 focus groups 
designed to gather advice and information from a very wide cross-
section of STEM education leaders from universities, educational 
associations, under-represented populations, the private sector, other 
Federal agencies, and other groups. These entities remain part of the 
planning process for WDTS and will help ensure that the program 
includes the widest possible cross-section of participants from our 
Nation's educational system.

                      HIGH ENERGY DENSITY PHYSICS

    Question. Dr. Orbach, as you are aware, this subcommittee has 
carried language in the fiscal year 2006 and draft fiscal year 2007 
bill directing the Department to integrate the Federal research in High 
Energy Density Physics among DOE's Office of Science and the NNSA and 
other Federal agencies.
    I want to thank you for supporting the multi agency effort to 
establish the High Energy Density Laboratory Plasmas program, including 
the establishment of a multi agency advisory group to oversee the 
establishment of research priorities and goals.
    One objective of my proposal was to expand the use of critical NNSA 
facilities such as the Z machine for non weapons research.
    What is the DOE's plan to maintain the United State's leadership in 
this area of science?
    Answer. As part of the new joint program on High Energy Density 
Laboratory Plasmas (HEDLP), SC and NNSA are initiating a series of 
focused workshops to engage the research community in identifying 
promising research opportunities that merit increased investment as the 
joint program is implemented. The first workshop is scheduled for this 
May. These workshops will examine the use of NNSA facilities for world-
class HEDLP science. The workshops will be used to guide development of 
new research efforts in fiscal year 2009, which will be competitively 
solicited and peer reviewed, to ensure top-quality science for this 
investment.
    Question. Has the Department included any funding for this 
scientific research as a joint program? If not, why not?
    Answer. Funding will be provided from existing support for HEDLP 
within SC's Fusion Energy Sciences (FES) program and NNSA in fiscal 
year 2008. As the program matures, it is expected to compete for 
funding against the other programs in SC and NNSA.
    Question. What is the Department's plan for stewardship of this 
important area of scientific research?
    Answer. HEDLP will be nurtured under the joint program by NNSA and 
FES to steward this emerging field of physics. DOE plans to establish a 
new advisory committee to give technical advice and help develop a 
scientific roadmap for the joint program.

                  INTEGRATION OF SCIENCE AND THE NNSA

    Question. With passage of the Energy Policy Act of 2005, your 
position has been elevated to the Under Secretary level. In this 
position, you now have responsibility for setting the scientific agenda 
for both the Office of Science labs as well as integrating the 
capabilities of the NNSA facilities, which have tremendous scientific 
capabilities and facilities. This budget is the first year that you 
would have had to integrate the research at all labs.
    How has this budget request changed to integrate research of NNSA 
and Office of Science facilities?
    Answer. The Office of Science (SC) and NNSA have always had a high 
level of collaboration in a number of areas, including high-performance 
computing and high-energy density physics (HEDP). These collaborations 
are being expanded, and new areas are currently being added. I think 
the key to any collaboration is to take advantage of both NNSA and SC 
strengths. Increased cooperation between these two programs will have 
benefits for both.
    In the area of computation, there has been a high level of 
collaboration to advance the state-of-the-art in computation. NNSA is a 
world leader in mission-driven computation for its stockpile 
stewardship program. SC laboratories have assisted in the development 
of software codes, for instance, and in turn have benefited from NNSA's 
experience in running machines such as Cray's Red Storm and the IBM 
BlueGene/L.
    Many of the facilities NNSA uses for stockpile stewardship, 
including Z-Pinch, Omega, and the National Ignition Facility (which 
will begin operations in 2010) can be used for HEDP and energy-related 
HEDP research. The joint NNSA-SC Fusion Energy Sciences (FES) program 
in High Energy Density Laboratory Plasmas (HEDLP) is currently being 
put together. A workshop to consider the integration of NNSA and FES 
program elements is planned for May 2007. Details of the joint HEDLP 
program are contained in the NNSA and SC fiscal year 2008 President's 
Budget Request narratives.
    Question. Which NNSA research facilities do you believe offer the 
best opportunity to support the Science research priorities?
    Answer. There are a number of ongoing collaborations between NNSA 
in computation and HEDLP. With the start of the joint program in HEDLP, 
and the workshop planned for May, we expect to learn more about how to 
maximize the potential for collaboration. At a minimum, I expect this 
cooperation will improve the effectiveness of both programs' missions 
and use of facilities.

                       HIGH PERFORMANCE COMPUTING

    Question. High Performance Computing developed by the NNSA to 
support the weapons stockpile stewardship program, and the research 
within the Office of Science has enabled breakthrough advances in 
science and engineering in the United States. These advances contribute 
to the Nation's economic competitiveness. Even today, industry looks to 
the Department to define future computing architecture and code 
development.
    What is the DOE long term strategy to keep the Nation at the 
forefront of High Performance Computing?
    Answer. As a partner in the President's American Competitiveness 
Initiative, we are committed to keeping America at the forefront of 
High Performance Computing (HPC) and the computational sciences. The 
first petascale computer resource for open science will be operating at 
the Leadership Computing Facility (LCF) at Oak Ridge National 
Laboratory in late 2008. Experts expect that, for at least the next 
decade, chip transistor counts will continue to follow Moore's law, but 
fundamental physics will significantly limit chip speeds. Consequently, 
increased parallelism will be essential for continued chip performance 
improvement, and increased transistor counts will allow radical 
departures from traditional CPU designs. To prepare for future systems, 
we are partnering with the National Nuclear Security Administration 
(NNSA), the Defense Advanced Research Projects Agency (DARPA), and the 
National Security Agency (NSA) through the High Productivity Computer 
Systems program to foster development of the next generation of 
hardware. Further, SC and NNSA have entered into a research contract 
with IBM to develop the next generation of the IBM Blue Gene.
    In addition, we will redirect a portion of our computer science 
research portfolio to address major obstacles constraining the ability 
of a broad range of computational scientists to use petascale computers 
effectively in areas important to DOE missions. Also, our Scientific 
Discovery through Advanced Computing (SciDAC) program has created a 
powerful, integrated research environment for advancing scientific 
understanding through modeling and simulation. Through SciDAC, applied 
mathematicians, computer scientists and computational scientists are 
working in teams to create the comprehensive, scientific computing 
software infrastructure needed to enable scientific discovery in the 
physical, biological, and environmental sciences at the petascale and 
to develop efficient and scalable data management and knowledge 
discovery tools for large data sets. Further, SciDAC-2 expanded the 
original program by collaborating with the NNSA and the National 
Science Foundation as new funding partners.
    Finally, we will continue the successful Computational Science 
Graduate Fellowship with NNSA to develop the next generation of 
computational science leaders.
    Question. What is the DOE doing to establish a R&D roadmap with 
industry and labs to support long term research of advanced computing 
architecture concepts, algorithms, and software in order to meet the 
next technological changes?
    Answer. The 2004 report of the Federal High-End Computing 
Revitalization Task Force (HECRTF) coordinated by the National Science 
and Technology Council (NSTC) established the R&D roadmap, which we are 
actively pursuing through government-wide interagency working groups. 
Both the Office of Science (SC) and NNSA are formal mission partners in 
Phase III of the DARPA High Productivity Computing Systems (HPCS) 
research program. Phase III of the HPCS program is focused on the 
generation of HPC systems that will be available from Cray and IBM in 
the 2011 timeframe. In addition, both SC and NNSA will participate in 
an NSA workshop which is intended to bring together key experts across 
related interdisciplinary fields to consider and define the 
opportunities and challenges in six technical thrusts for improving 
power efficiency, chip input/output (I/O), interconnect, resilience, 
productivity, and file system I/O.
    The long term architectural strategy for system vendors is in a 
period of significant change. Both SC and NNSA are working with vendors 
to help them better understand our mission needs. Examples include 
working with Cray on its XMT multithreaded architecture and with IBM on 
the Road Runner architecture and the design of the next generation of 
the Blue Gene architecture.
    SC and NNSA continue to work together in the area of HPC software 
environments. A recent example is SC participation in the NNSA workshop 
on its TriLab L2 petascale user environment milestone that was held 
after the 2007 Advanced Simulation and Computing principal investigator 
meeting. As a next step, SC and NNSA are co-sponsoring a workshop on 
petascale tools in Washington, DC this August. Results from this 
workshop will inform SC funding plans in petascale tool research to 
meet both SC and NNSA needs.

    INTEGRATION OF HIGH PERFORMANCE COMPUTING AMONG SCIENCE AND NNSA

    Question. Both the DOE/Office of Science (SC) and NNSA have 
national High Performance Computing programs for their respective 
missions. Both offices support acquisition plans with decidedly 
different goals. The Office of Science seeks to expand computing 
capacity to other labs, while the NNSA is seeking to reduce the number 
of labs with High Performance Computing from 3 to 2 labs.
    What is the plan within DOE to acquire new high performance 
computing platforms and how is it integrated and coordinated between 
the Office of Science and the NNSA?
    Answer. To support open scientific discovery, we must maintain our 
balanced high performance computing (HPC) resources portfolio that 
includes two types of HPC facilities. In the case of the National 
Energy Research Scientific Computing (NERSC) Center, we have 
established a mission-critical high performance production computing 
center. NERSC provides HPC resources for open science to support the 
needs of the Office of Science program offices. Currently, NERSC 
supports over 400 projects with 2,500 users and is predominately 
characterized by capacity computing. Within the current NERSC funding 
profile we have established a stable 3-year upgrade cycle which is 
consistent with the life cycle of HPC production resources.
    The second priority in our ``Facilities for the Future of Science: 
A Twenty Year Outlook'' is establishment of HPC capability computing 
facilities. In contrast to NERSC, which supports thousands of users 
with small allocations of time, the high performance computing 
resources at the Leadership Computing Facilities (LCFs) at Oak Ridge 
and Argonne provide large allocations to a small number of projects 
with the potential for breakthrough scientific impact. Because access 
to capability computing is so important to our national 
competitiveness, we have made the HPC resources at the LCFs available 
to the open scientific community, including industry, through the 
Innovative and Novel Computational Impact on Theory and Experiment 
(INCITE) program. Over the past 3 years we have focused our efforts on 
establishing capability computing centers to provide a variety of HPC 
resources for open science.
    In 2003, we signed a memorandum of understanding with NNSA to 
establish a framework for planning and coordinating research, 
development, engineering, and test and evaluation activities related to 
high-end technical computing. The acquisition of both the Red Storm 
(Cray XT3) computer at the LCF at Oak Ridge National Laboratory and the 
proposed IBM Blue Gene/P at the Argonne LCF were a result of a 
partnership between NNSA Advanced Simulation and Computing (ASC) and 
the Office of Science. More recently, Lawrence Livermore National 
Laboratory, Argonne National Laboratory, and IBM have entered a 
research and development contract to develop the next generation of 
Blue Gene-based products. Oak Ridge is working with Sandia National 
Laboratories and Cray to develop a quad-core version of the Catamount 
operating system. As we go forward, we will continue to rely on our 
close collaboration with NNSA in the area of high performance computing 
research and testbeds. However, NNSA's requirements for classified 
computing are inconsistent with the Office of Science's mission to 
support open science; therefore, ASCR does not share production systems 
with NNSA-ASC.

                            GENOME RESEARCH

    Question. Are we making sufficient investments in the scientific 
underpinnings that would support our Nation's biofuels goals?
    Answer. The Department recognizes the significant scientific and 
technological barriers that need to be overcome in order to achieve our 
Nation's biofuels goals, and is investing a significant portion of our 
research budget to support fundamental research underpinning microbial 
and plant research relevant to biofuels. Three GTL Bioenergy Research 
Centers, representing a total investment of $375 million over the next 
5 years, will conduct comprehensive, multidisciplinary, and integrated 
basic research programs in bioenergy-related systems and synthetic 
biology. Research at the Centers will focus on developing the science 
underpinning biofuel production that will ultimately lead to technology 
deployable in the Nation's energy economy. The Centers will draw 
heavily on technology and basic science generated in the entire 
portfolio of Genomics: GTL activities. The Department also provides 
significant investments in a broad suite of scientific user facilities, 
such as the Production Genomics Facility and structural biology user 
stations at DOE synchrotrons and neutron sources, with unique 
instrumentation, computational capabilities, and experimental capacity 
to enable scientists in universities, Federal laboratories, and 
industry to conduct research underpinning the goals of biofuels 
production.
    Question. With the need to support the DNA characterization of many 
more plants to support our biofuels goals, why has the Department 
reduced funding for the Joint Genome Initiative?
    Answer. The DOE Joint Genome Institute (JGI) receives a significant 
fraction of the overall budget for Biological and Environmental 
Research (BER), indicating our commitment to provide genome sequencing 
resources supporting the Department's missions and its biofuels goals. 
The level of fiscal year 2008 funding has increased significantly 
relative to that of fiscal year 2006. The budget request for the JGI, 
in addition to reflecting a realistic funding balance among the entire 
portfolio of BER research supporting our biofuels goals, also reflects 
the need to replace aging sequencing equipment with more advanced 
instrumentation capable of greater throughput. JGI receives funds from 
sources other than the ``operating'' line in the budget. In fiscal year 
2008, $10 million is requested for JGI from the Genomics: GTL 
Sequencing portion of the BER budget. JGI also receives funding from 
external sources. In fiscal year 2006, JGI received $2.9 million for 
sequencing from ``work for others''; about $1.3 million of which was 
from the intelligence community and the rest from a variety of other 
sources.

                            CLIMATE RESEARCH

    Question. Dr. Orbach, the Department has requested $138 million to 
support Climate Change Research. It is my understanding that this 
supports DOE's role in the Administration's multi agency Climate Change 
Research Initiative. It appears from budget documents, the Department 
has primary responsibility for carbon cycle science and climate 
impacts.
    Can you please explain the administration's research priorities and 
how the Department supports those efforts?
    Answer. The administration's Climate Change Research Initiative 
(CCRI) is a set of cross-agency activities in areas of high priority 
climate change research where substantial progress is anticipated over 
the next 2 to 4 years. The specific focus areas include: climate 
forcing (atmospheric concentrations of greenhouse gases and aerosols); 
climate observations, climate feedbacks, and sensitivity; climate 
modeling, including enabling research; regional impacts of climate 
change, including environment-society interactions; and climate 
observations.
    In fiscal year 2008, the Biological and Environmental Research 
(BER) program will continue to participate in specific research areas 
of the CCRI. These areas include climate forcing, climate modeling, and 
climate change observation. Climate forcing, which includes modeling 
carbon sources and sinks, especially those in North America and 
quantifying the magnitude and location of the North American carbon 
sink, is a high priority need identified in the interagency Carbon 
Cycle Science Plan. In climate modeling, DOE's contribution to the CCRI 
will continue to involve the production of future potential climate 
scenarios for use in assessing the environmental implications of 
different future possible climate states. In the climate observations 
area of the CCRI, the DOE Atmospheric Radiation Measurement (ARM) 
program mobile facility will be deployed to a location where data are 
needed to fill gaps in understanding key atmospheric properties and 
processes, and their effect on the Earth's radiation balance and 
climate. The Integrated Assessment Research contribution to the CCRI 
will continue to be the development of tools for use in assessing the 
costs and benefits of human-induced climate change, including those 
associated with different policy options for mitigating such change. 
The requested BER budget to support these specific CCRI activities in 
fiscal year 2008 is $23.7 million. The remainder of BER's $138 million 
climate change research request supports research in the long-standing 
U.S. Global Change Research Program (USGCRP) and climate change 
mitigation research.
    Question. Does the Office of Science support climate research 
modeling to determine what effect climate change may have on regional 
rainfall patterns? What does the DOE research tell us?
    Answer. The BER climate modeling program supports the development 
and testing of coupled ocean-atmosphere-land surface climate models. 
Those models are used to project climatic change based on specified 
atmospheric greenhouse gas concentrations. Those model runs are 
performed at horizontal grid cell resolution of about 150 kilometers 
(or about 90 miles). There are systematic biases in the precipitation 
patterns in these model runs, particularly in the tropics due to 
processes like convection that are apparently not being represented 
accurately in the atmospheric component of the model. Researchers are 
working in a concerted way to address these systematic biases. Such 
biases notwithstanding, results such as earlier spring snow melt over 
large parts of the Southwestern United States and a northward shift of 
storm-tracks are fairly robust results in the climate change 
projections so far.

                          CARBON SEQUESTRATION

    Question. The Department plays a large role in supporting carbon 
research, including the possibility for long term sequestration within 
the Climate Change Research program.
    What is your opinion of the technological potential for this 
country to safely sequester large amounts of carbon?
    Answer. Carbon capture and storage technologies through geological 
storage and terrestrial sequestration provide options for reducing 
greenhouse gas emissions. Successful research, development, and 
demonstration are expected to result in widespread, safe deployment of 
these technologies.
    Question. How long do you believe it will be before we will be able 
to utilize large scale carbon sequestration in this country?
    Answer. Although several commercial-scale projects currently 
operate outside the United States, we believe it will be several years 
before the United States will be able to utilize large-scale carbon 
sequestration. Sufficient scientific understanding currently exists to 
support planned large-scale demonstrations of carbon sequestration in 
depleted oil and gas reservoirs. Only after these demonstrations are 
conducted, however, will there be sufficient understanding of the long-
term stability and environmental impacts of geological storage of 
carbon dioxide in these reservoirs to proceed on a large scale. 
Knowledge about deep saline aquifers is far less extensive, and many 
substantial issues must be addressed through research and demonstration 
before we could consider permitting the injection of carbon dioxide 
into saline aquifers at a commercial scale.
    Question. What does the scientific data indicate about our domestic 
capacity to store CO2?
    Answer. Scientific data indicate that the United States has a large 
number of geological formations amenable to storage of large quantities 
of carbon dioxide--e.g., oil and gas reservoirs, unminable coal seams, 
and deep saline reservoirs. Current estimates indicate that hundreds of 
years of total domestic carbon dioxide emissions could be stored in 
such formations. In a recent Department study led by the National 
Energy Technology Laboratory (NETL)--``Carbon Sequestration Atlas of 
the United States and Canada''--the DOE Regional Carbon Sequestration 
Partnerships identified over 3.5 trillion tons of possible carbon 
dioxide storage capacity in the U.S. and Canada. Again, greater 
scientific understanding and demonstration of feasibility are needed 
before use of such storage capacity on a commercial scale can be safely 
implemented. There is also significant potential for terrestrial carbon 
sequestration in soils and plants, which is an ongoing area of research 
for the Office of Science as well as other Federal agencies.

                OFFICE OF SCIENCE--ENERGY-WATER PROGRAM

    Question. The Energy Policy Act of 2007 included in section 979 an 
authority for the Office of Science to pursue research, development, 
demonstration, and commercial applications to address issues associated 
with the management and efficient use of water in the production of 
energy. As you are well aware, water plays a big role in the production 
of electricity, and the development of technologies to minimize water 
usage will be critical in areas facing drought conditions.
    Unfortunately, the budget request doesn't provide any funding to 
support this important activity.
    Can you tell me what if anything the Department is doing to carry 
out the direction in section 979?
    Answer. The Department is undertaking activities responsive to 
section 979. For example, Science (SC), Energy Efficiency and Renewable 
Energy (EERE), and Environmental Management staff are working together 
to track existing DOE-wide research, development, and demonstration 
projects relevant to water needs in energy production. SC and EERE 
representatives participate in the National Science and Technology 
Council's Water Availability and Quality Subcommittee. SC and EERE 
representatives are working with the national laboratories to develop a 
broad-based understanding of technology and development needs that 
could improve water efficiency for energy production. Lastly, the 
Department is in the process of preparing a report to Congress 
responsive to section 979(f).

             BIOLOGICAL AND ENVIRONMENTAL RESEARCH FUNDING

    Question. I understand there has been discussions about changing 
the funding model for the Office of Biological and Environmental 
Research to adopt a block funding model that would send the bulk of 
research funding to a single ``core lab.'' I believe this would 
discourage competition among labs to come up with creative research and 
discourage the development of broad multidisciplinary approach at each 
lab.
    Is the Department considering changing the BER program to a block 
funding model?
    Answer. BER will transition its research and technology development 
portfolio at the national laboratories into one with three key thrusts. 
First, BER will maintain its use of and reliance on rigorous merit-
review for research selection. Second, it will focus on support of 
team-based research efforts. Third, it will fund a portfolio of 
laboratory research focused on one or more BER Scientific Focus Areas. 
There is no plan to support a Scientific Focus Area exclusively at a 
single ``core'' national laboratory. The purpose of this new funding 
strategy is to better align BER's approach with that used by the other 
major DOE Office of Science programs.
    Question. Would this approach impede the other DOE labs from 
promoting relevant new ideas and quickly responding to emerging 
national problems when a single lab has been designated for funding as 
the lead lab?
    Answer. Impeding competition is contrary to the principles in the 
Administration's R&D Investment Criteria, and any new approach should 
encourage, not impede, competition.

                       JOINT DARK ENERGY MISSION

    Question. Over the past few years, this committee has consistently 
demonstrated its strong support for the Joint Dark Energy Mission. 
However, other priorities in the Office of Sciences 20 Year Facilities 
Plan are moving forward, even some ranked lower than the Joint Dark 
Energy Mission (JDEM). This program seems to be stuck and moving 
nowhere--especially in light of the Department's budget priorities.
    I am specifically concerned that the Administration's fiscal year 
2008 request for JDEM will hinder the Department's capacity to move 
forward aggressively either in partnership with NASA or as a single 
agency mission in 2008.
    Unfortunately, this budget reduction may also discourage 
international collaborations interested in a near term launch.
    What do you and the Office of Science plan to do in the remainder 
of 2007 and in 2008 to get JDEM moving? What can Congress do to help 
you ensure that JDEM doesn't become a missed opportunity?
    Answer. The DOE fiscal year 2007 appropriation and the President's 
fiscal year 2008 budget request have allocated resources for continuing 
the dark energy program, including funding R&D for the SuperNova/
Acceleration Probe (SNAP), a concept for JDEM. In addition, there is 
funding for mid-term or longer-term ground- or space-based dark energy 
R&D of approximately $3 million in fiscal year 2007 and $5.8 million 
requested for fiscal year 2008. This research will be competitively 
selected.
    In fall 2006, DOE and NASA began jointly funding a National 
Research Council (NRC) study, to be completed by September 2007, to 
advise NASA on which of the 5 proposed NASA Beyond Einstein missions, 
including JDEM, should be developed and launched first. If the 
recommended top priority by the NRC study is JDEM, DOE and NASA could 
request to proceed jointly on this mission, leading to construction and 
launch during the next decade.
    In response to a Congressional directive for DOE to begin planning 
for a single-agency dark energy mission and explore other launch 
options, DOE has been investigating a scenario of participation with 
international partners, in particular France and Russia.
    There are also other international efforts towards a space-based 
dark energy mission. CNES is supporting an equivalent amount of R&D 
towards DUNE, a French dark energy concept. The European Space Agency 
(ESA) has recently completed a feasibility study for a dark energy 
mission and is planning to have a competition and decision in 2009 for 
its next mission.
    DOE and CNES officials have discussed a possible partnership and 
have agreed to work together until fall 2007 to document possible 
cooperation on the SNAP mission. Whether CNES will eventually 
participate in SNAP, DUNE, or other missions depends on the results of 
the NRC study and other policy considerations. DOE officials have also 
discussed possible Russian collaboration with the Federal Agency for 
Science and Innovations of the Russian Federation. The Department's 
path forward will be determined following the results of the NRC study 
and we continue to support dark energy R&D.

                            CLIMATE MODELING

    Question. The DOE plays a leadership role in the Nation's Climate 
Change Science Program that includes self-consistent modeling of the 
world's atmosphere, land, and oceans. For more than 20 years, Los 
Alamos National Laboratory scientist [sic] have utilized their 
substantial know-how and computational facilities to develop the best 
ocean and sea ice models, and have applied them to the coupled earth 
system models. This is a strong successful collaboration among the best 
and brightest from almost every national laboratory. What is the Office 
of Science program strategy for modeling and remote sensing in response 
to recent observations of the Greenland ice melt? Isn't there a sense 
of urgency to produce even more accurate sea ice predictions as Arctic 
ice thins, and also to build a model of Greenland glacial melting?
    Answer. The BER strategy is to continue its support for the 
leading-edge coupled ocean-sea ice modeling (COSIM) group at LANL as 
part of BER's broader climate change research subprogram. DOE 
researchers examined Arctic sea-ice under various emission scenarios 
for the IPCC Fourth Assessment Report using the Community Climate 
System Model. Because Arctic sea-ice is already in the ocean, its 
melting does not directly affect sea level, though it does affect 
navigability of the northern ocean. Researchers at LANL are currently 
examining the Greenland ice melt using an interactive ice-sheet model 
coupled to the other components of the climate model: land surface, 
sea-ice, and atmosphere. Ice-sheet models need to resolve fast-flow 
features such as ice streams, subglacial process physics, and marine 
processes, and also to include stress coupling. Thus, the challenge to 
get all these extremely complex processes well-represented in the 
models is immense. For glacial melt, the increased lubrication of 
glacier beds by increased summer melt water that drains down crevasses 
and moulins to the beds needs to be represented in the land-ice models. 
DOE does not carry out remote sensing, but we do use the results of 
remote sensing supported by other Federal agencies to evaluate or test 
the results of our modeling activities.

                           COMPUTER QUESTIONS

    Question. These big parallel supercomputers have always been very 
difficult to program and the knowledge to do so is only understood by 
specialists that exist in our Nation's National Laboratories and 
Universities. Now that computer manufacturers have started to produce 
multi-core processors, the technology needed for advancement in 
scientific understanding has become even more complicated and 
inaccessible.
    Can you describe the complete DOE investment strategy in this area, 
and speak specifically to how these investments go beyond simply 
supporting procurement of large hardware and represent tangible 
investments in the specialized scientists needed to make these machines 
available to the country?
    Answer. As a partner in the President's American Competitiveness 
Initiative, we are committed to keeping the United States at the 
forefront of High Performance Computing (HPC) and the computational 
sciences. In addition to acquiring large high performance computing 
resources that will generate millions of gigabytes per year of data, 
ESnet has entered into a long term partnership with Internet 2 to build 
the next generation optical network infrastructure needed for U.S. 
science. Further, SC will redirect a portion of its computer science 
and research portfolio to address major obstacles that would constrain 
the ability of a broad range of computational scientists to use 
petascale computers effectively in areas important to DOE's missions. 
Within our Applied Mathematics research program, for example, we are 
conducting a petascale data workshop to identify the next-generation 
mathematical techniques that will enable scientists to extract the 
scientific phenomena buried in massive complex data sets.
    Through our Scientific Discovery through Advanced Computing 
(SciDAC) program, applied mathematicians, computer scientists, and 
computational scientists are working in teams to create the 
comprehensive, scientific computing software infrastructure needed to 
enable scientific discovery in the physical, biological, and 
environmental sciences at the petascale and to develop efficient and 
scalable data management and knowledge discovery tools for large data 
sets. In 2006, we re-competed SciDAC (SciDAC-2) and introduced the 
concept of SciDAC Institutes to increase the presence of the program in 
the academic community and to complement the efforts of the SciDAC 
Centers. Our SciDAC Institutes will infuse new ideas and community 
focus into the SciDAC program, as well as provide students with 
valuable computational science experiences. In addition to SciDAC 
Institutes, SciDAC-2 expanded the original program by collaborating 
with the NNSA and the National Science Foundation as new funding 
partners.
    Finally, SC and NNSA will continue the successful Computational 
Science Graduate Fellowship to develop the next generation of 
computational science leaders.
    Question. There is a trend toward managing and extracting 
actionable knowledge from very large amounts of data. This trend has 
grown faster than traditional scientific simulation and has immediate 
importance in national security matters.
    How do you plan to ensure that your investment strategy is 
applicable to these new trends?
    Answer. Using the NSTC High-End Computing Revitalization Task Force 
report as our roadmap, we are undertaking a broad investment strategy 
for the deployment and utilization of new HPC resources. Our Leadership 
Computing Facilities provide architectural diversity so that 
researchers have the resources they need to tackle challenging 
scientific questions. The first petascale computer resource for open 
science will be operating at the Leadership Computing Facility (LCF) at 
Oak Ridge National Laboratory in late 2008. Additionally, the HPC 
resources at NERSC have undergone a significant upgrade so that they 
can continue to meet SC mission-critical needs and help prepare our 
researchers to make optimum use of the Oak Ridge LCF, as well as the 
LCF at Argonne National Laboratory. Because access to capability 
computing is so important to our national competitiveness, we have made 
the HPC resources at the LCF available to the open scientific community 
across Federal agencies and national laboratories, in universities, and 
in industry, through the Innovative and Novel Computational Impact on 
Theory and Experiment (INCITE) program.
    We are coupling our investment in hardware with a corresponding 
investment in our base computer science and applied mathematics 
research programs to develop system software and tools as well as new 
algorithms for analysis of multi-scale and complex data. Through our 
SciDAC Outreach Center we are disseminating SciDAC accomplishments to 
the broader HPC community.
    Within DOE, NNSA and SC have entered a research and development 
contract with IBM to develop the next generation of Blue Gene-based 
products. Oak Ridge is working with Sandia National Laboratories and 
Cray to develop a quad-core version of the Catamount operating system. 
Although the two programs are managed differently because of the NNSA's 
requirements for classified data, SC and NNSA will continue and grow 
our close collaboration in high performance computing research and 
testbeds.
    Within the broader community, we closely coordinate our activities 
with other Federal agencies through the Networking and Information 
Technology Research and Development (NITRD) subcommittee of the 
National Science and Technology Council (NSTC). Lastly, both SC and 
NNSA are formal mission partners in Phase III of the DARPA High 
Productivity Computing Systems (HPCS) research program. Phase III of 
the HPCS program is focused on the generation of HPC systems that will 
be available from Cray and IBM in the 2011 timeframe.
    Question. DOE has two major programs in computational sciences: the 
Office of Science program and the NNSA ASC program. These two programs 
seem to be managed very differently, and I am struck by the lack of 
synergy between them. Further, NSF and DARPA are pushing their own 
computer initiatives.
    Why isn't the DOE maintaining its leadership for the country in 
terms of a national investment strategy for technology and scientific 
investment for computing, computational sciences, and computer sciences 
for the future?
    Answer. DOE continues to maintain a leadership role in 
computational science and high end computing systems for open science. 
The first petascale computer resource for open science will be 
operating at the Leadership Computing Facility at Oak Ridge National 
Laboratory in late 2008. Within SciDAC we created a powerful, 
integrated research environment for advancing scientific understanding 
through modeling and simulation. NSF and NNSA have joined SC as funding 
partners for SciDAC-2. Through the INCITE program, we are making 80 
percent of the leadership computing facilities available to the open 
science community through a peer-reviewed process.
    Question. It appears that there is very little mission coordination 
among the various agencies in order to sustain a long term R&D program 
that goes beyond the purchase of a faster computer.
    How are you going to bring these various pieces together?
    Answer. Through the American Competitiveness Initiative, we will 
continue to work with our partners within DOE and NITRD on a national 
roadmap for the future. In addition, the Office of Science has focused 
partnerships with the mission agencies including NNSA, NSA, DOD, and 
DARPA.

                           SUPERCONDUCTIVITY

    Question. Given the fundamental science challenges inherent in 
superconductivity and recent successes in technology demonstration 
projects using second generation coated conductors, what is the Office 
of Science investment strategy for seizing basic and applied research 
opportunities in this area?
    Answer. In May, 2006, SC's Office of Basic Energy Sciences 
sponsored a workshop entitled Basic Research Needs for 
Superconductivity. The workshop identified seven ``priority research 
directions'' and two ``crosscutting research directions'' that capture 
the promise of revolutionary advances in superconductivity science and 
technology. The first seven directions set a course for research in 
superconductivity that will exploit the opportunities uncovered by the 
workshop panels in materials, phenomena, theory, and applications. 
These research directions extend the reach of superconductivity to 
higher transition temperatures and higher current-carrying 
capabilities, create new families of superconducting materials with 
novel nanoscale structures, establish fundamental principles for 
understanding the rich variety of superconducting behavior within a 
single framework, and develop tools and materials that enable new 
superconducting technology for the electric power grid that will 
dramatically improve its capacity, reliability, and efficiency for the 
coming century. The seven priority research directions identified by 
the workshop take full advantage of the rapid advances in nanoscale 
science and technology of the last 5 years. Superconductivity is 
ultimately a nanoscale phenomenon. Its two composite building blocks--
Cooper pairs mediating the superconducting state and vortices mediating 
its current-carrying ability--have dimensions ranging from a tenth of a 
nanometer to a hundred nanometers. Their nanoscale interactions among 
themselves and with structures of comparable size determine all of 
their superconducting properties.
    The workshop participants found that superconducting technology for 
wires, power control, and power conversion had already passed the 
design and demonstration stages. Second generation (2G) wires have 
advanced rapidly; their current-carrying ability has increased by a 
factor of 10, and their usable length has increased to 300 meters, 
compared with only a few centimeters five years ago. However, while 2G 
superconducting wires now considerably outperform copper wires in their 
capacity for and efficiency in transporting current, significant gaps 
in their performance improvements remain. The fundamental factors that 
limit the current-carrying performance of 2G wires in magnetic fields 
must be understood and overcome to produce a five- to tenfold increase 
in their performance rating.

                          SUBCOMMITTEE RECESS

    Senator Dorgan. We thank you very much for coming here 
today and thank you for your work.
    This hearing's recessed.
    [Whereupon, at 2:54 p.m., Wednesday, March 21, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2008

                              ----------                              


                       WEDNESDAY, APRIL 11, 2007

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:33 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Byron L. Dorgan (chairman) 
presiding.
    Present: Senators Dorgan, Murray, Reed, Domenici, Craig, 
Bond, Allard, and Stevens.

                          DEPARTMENT OF ENERGY

STATEMENT OF HON. DENNIS R. SPURGEON, ASSISTANT 
            SECRETARY NUCLEAR ENERGY

              OPENING STATEMENT OF SENATOR BYRON L. DORGAN

    Senator Dorgan. We'll call the hearing to order. This is 
the Senate Appropriations Subcommittee on Energy and Water 
Development. We thank our witnesses for being here today. This 
is a hearing on the Office of Nuclear Energy, the Office of 
Energy Efficiency and Renewable Energy, the Office of Fossil 
Energy and the Office of Electricity Delivery and Energy 
Reliability.
    We're here to take testimony from the four program offices 
I've just described within the Department of Energy which 
oversee major aspects of the U.S. Government's energy R&D 
demonstration and deployment programs. I have a great deal of 
interest in these issues, as do others on this subcommittee, 
and I look forward to hearing today from our witnesses.
    Passage of the Energy Policy Act of 2005 (EPACT), thanks to 
my colleagues, Senator Domenici and Senator Bingaman and their 
leadership, was, I think, a step in the right direction. I was 
pleased to be on the authorizing committee and to be a part of 
the work in the passage of that legislation.
    But it was only a step. More needs to be done and we will 
continue to work in the authorization process to do that. The 
Energy Policy Act, however, only has its full impact if it is 
properly funded and implemented. Our ability to meet head on 
the challenges that we tried to describe in our Energy Policy 
Act will be hobbled by continued baby steps if we do not fully 
fund many of the issues that we care about. We need to be more 
deliberate, I believe, in addressing the major challenges that 
are associated with energy, since it is the central 
underpinning of our other economic, social, environmental, and 
foreign policy goals.
    So I believe we should set goals. We need to know where we 
are going and how we are going to get there; so there are two 
points that I think are very relevant to this hearing.
    First, we need to do a much better job of investing in our 
energy future. Second, we need to begin making these 
investments within and across entire energy systems rather than 
picking and choosing pieces of an energy puzzle.
    Note chart 1. In December 2006, a Government Accountability 
Office (GAO) study gave us this information. The total budget 
authority for energy research and development has dropped by 
over 85 percent in real terms between 1978 and 2005. We need to 
put our energy challenges front and center and we will never be 
able to move forward with declining investments like that. 
Research and development figures in a chart like this should 
indicate increasing funding but regrettably, that has not been 
the case.
    Chart 2 shows that of the Energy Department's $24.3 billion 
budget request for 2008, only $3.1 billion is directed toward 
energy matters. Let me say that again: Of $24.3 billion in the 
Department of Energy budget request, $3.1 billion is directed 
toward energy matters and of that only $2.5 billion is directed 
at energy technology programs. While I realize the Department 
has very broad and important mandates, this means that, in 
simple terms, only $1 in $8 in the Department of Energy request 
is actually going toward energy issues.
    On the second point, energy systems have many elements to 
them and we must undertake improvements along the R&D chain to 
these systems as wholes. We have two major systems at work, the 
transportation system and a power generation system. We must be 
prepared to understand these systems and address them at every 
stage, not just in bits and pieces.
    For example, if we want to promote renewable fuels, and I 
do, then we need to look at feed stocks, bio-refineries, fuel 
transportation, infrastructure, vehicles, public education, and 
marketplace acceptance. The Department of Energy suggests it 
does not pick winners and losers but I think in many ways 
that's very disingenuous.
    We can see many examples where, with tight budgets and 
different priorities, some areas have been done well and others 
not so well. One needs to look only at the Department's fiscal 
year 2007 spending plan. It demonstrates that two of our 
witnesses' programs had windfall budget increases while two saw 
cutbacks.
    The Department's consistency in those areas, I think, is an 
inconsistency in following through on long-term commitments and 
recognizing the Government's role in investing and directing 
policies along each stage of the energy system. I understand 
that we have limited resources and nearly unlimited wants. But 
we must find a way of addressing those key areas that are 
crucial to our energy success in the future.
    If our energy policy is going to be central to our Nation's 
future, and energy will be central to our Nation's future, then 
we're not going to be able to do it on the cheap or do it at 
the margins. I'm very interested in hearing today from the four 
witnesses, whose direct activities in the Department of Energy 
are, I believe, essential and central to the question of 
whether we will succeed in meeting our energy needs.
    Senator Domenici.

             OPENING STATEMENT OF SENATOR PETE V. DOMENICI

    Senator Domenici. Mr. Chairman, I realize that we have a 
full load of witnesses and many people here to hear what they 
have to say, including Senators but I would like to give just a 
brief opening statement. It will not be long.
    First let me say, I greatly appreciate the statement you 
made. I listened to it attentively. Obviously, I'm not sure 
that I agree with the conclusions that were arrived at by you 
and your helpers. But I do agree wholeheartedly with the 
premise and the thesis of what you've said.
    Actually, Mr. Chairman, we didn't have a Department of 
Energy for a long time. It was a Department put together by 
just piecing all kinds of agencies and then for a long time, 
nobody knew what the Department of Energy was supposed to do. 
You knew that from afar. I knew it from inside. We didn't know 
whether we were supposed to be for nuclear power. We didn't 
even know if there should be nuclear power mentioned within the 
Department of Energy for a number of years, Senator Bond. It 
just wasn't even thought of. So that accounts for many of the 
ups and downs that you have spoken of.
    Today, these four witnesses from the Department of Energy 
represent major energy supply R&D accounts. They've developed 
innovative research initiatives such as cellulosic biomass 
programs, the Global Nuclear Energy Partnership (GNEP), 
FutureGen and Solar America, which have the potential of 
deploying cleaner burning fossil fuel technology as well as 
zero emission technologies such as nuclear, solar and wind 
generation.
    This budget supports many of the research priorities 
included in EPACT, the bill you alluded to that we passed 2\1/
2\ years ago. One important goal of EPACT has been to make sure 
that innovative energy technology doesn't stay in the lab but 
will be deployed to reduce our greenhouse gas emissions as well 
as our country's less dependence on foreign energy sources.
    It is a fact that our energy markets are based on low cost, 
conventional generation. High cost renewable energy 
technologies face a serious challenge in the cost competitive 
environment.
    In addition to supporting additional R&D efforts, I've been 
focused on implementing the title XVII Loan Guarantee Program. 
This initiative can be effective--an effective tool in the 
leveraging of the Federal balance sheet to make the first of a 
kind renewable and alternative energy technology cost 
competitive.
    I've been surprised by the challenges facing the 
implementation of loan guarantee programs that we provided in 
the energy bill, especially in light of the fact that the 
export/import bank provides $18 billion in loan coverage to 
support U.S. commercial investments overseas. This is twice the 
level provided to support DOE's title XVII.
    I know investment overseas is important but I believe we 
have a serious problem when the administration provides greater 
assistance to support the sale of nuclear reactors to China 
than it provides for the deployment of nuclear reactors in our 
own country. I believe that's wrong and I think somehow we must 
fix it. It is very hard for us to fix it. I mean, we are going 
to have to pass specific laws that specifically direct whatever 
it is we want in this area that we're talking about in terms of 
loan guarantees.
    I'd like to also make a brief point about the Global 
Nuclear Energy Partnership--GNEP. This is a very exciting 
initiative. It proposes to close the nuclear fuel cycle. I 
understand there could be questions about it but I think once 
it gets on the table, let's the daylight see it all and see how 
it comes out. It is apt to be a very exciting thing that we 
should put together and work on.

                          PREPARED STATEMENTS

    I ask that the balance of my statement be made a part of 
the record and thank you, Mr. Chairman, for giving me an 
opportunity to address these issues and thank you, witnesses. 
It's good to have you all here.
    Senator Dorgan. Without objection. Senator Reed has also 
submitted a statement for the record.
    [The statements follow:]

             Prepared Statement of Senator Pete V. Domenici

    Mr. Chairman, today we have four witnesses representing the 
Department of Energy's major energy supply R&D accounts. These offices 
have developed innovative research initiatives such as the cellulosic 
biomass program, GNEP, FutureGen and Solar America, which have the 
potential of deploying cleaner burning fossil fuel technology as well 
as zero emission technologies such as nuclear, solar, and wind 
generation.
    This budget supports many of the research priorities included in 
EPACT. One important goal of EPACT has been to make sure that 
innovative energy technology doesn't stay in the lab but will be 
deployed to reduce our greenhouse gas emissions as well as make our 
country less dependent of foreign energy sources.
    It is a fact that our energy markets are based on low cost, 
conventional generation and that high cost, renewable energy 
technologies face a serious challenge in a cost competitive 
environment.
    In addition to supporting additional R&D efforts, I have been 
focused on implementing the title 17 loan guarantee program. This 
initiative can be an effective tool in leveraging the Federal balance 
sheet to make the first of a kind renewable and alternative energy 
technologies cost competitive.
    I have been surprised by the challenges facing the implementation 
of the loan guarantee program, especially in light of the fact that the 
Export-Import Bank provides $18 billion in loan coverage to support 
U.S. commercial investment overseas. This is twice the level provided 
to support DOE's title 17 program.
    I know investment overseas is important, but I believe we have a 
serious problem when the administration provides greater assistance to 
support the sale of nuclear reactors to China, than it provides for the 
deployment of nuclear reactors in our own country.
    Mr. Chairman, I would like to make a brief point about the Global 
Nuclear Energy Partnership (GNEP). This is a very exciting initiative. 
It proposes to close the nuclear fuel cycle and make a significant 
reduction on our spent fuel inventories.
    The world has begun to embrace nuclear power as a cost effective 
energy solution that does not contribute to greenhouse gases. Today, 
there are plans to build an additional 200 new nuclear plants in 
countries all across the world.
    I commend the administration for their efforts to develop a 
comprehensive plan that will address spent fuel management and to 
optimize this energy resource in a safe and secure manner.
    This issue is not going away and this country should be part of the 
global solution.
    I am looking forward to hearing from our witnesses, who are working 
very hard to make our country more energy independent and to reduce 
greenhouse gas emission to the lowest levels possible.
    Gentlemen, I appreciate your service very much.
                                 ______
                                 
                Prepared Statement of Senator Jack Reed

    Chairman Dorgan and Senator Domenici, I want to thank you for 
holding this hearing to review the Department of Energy's fiscal year 
2008 budget request. Federal funding for energy efficiency and 
renewable energy programs is very important to me. I want to express my 
disappointment at the Department of Energy's budget proposal for the 
Office of Energy Efficiency and Renewable Energy. The fiscal year 2008 
budget proposes only $1.24 billion for EERE--a $230 million decrease 
compared to the fiscal year 2007 Continuing Resolution funding level.
    Our Nation faces significant challenges as we strive to ensure our 
energy security, reduce the economic risks of high energy prices, and 
address global climate change. Energy efficiency and renewable energy 
programs that improve technologies for our homes, our businesses, and 
our vehicles must be the ``first fuel'' in the race for secure, 
affordable, and clean energy.
    Energy efficiency is the Nation's greatest energy resource. We now 
save more energy each year from energy efficiency than we get from any 
single energy source, including oil, natural gas, coal, and nuclear 
power. A 2001 National Research Council report found that for every 
dollar invested in the 17 Department of Energy energy-efficiency 
research and development programs, nearly $20 is added to the U.S. 
economy in the form of new products, new jobs, and energy cost savings 
to American homes and businesses.
    Unfortunately, under this administration, efficiency funding has 
fallen alarmingly since 2002. Adjusting for inflation, funding for 
efficiency has been cut by one-third. The fiscal year 2007 Continuing 
Resolution provided $1.473 billion for efficiency and renewable energy. 
I want to thank Senators Dorgan and Domenici for this increased 
funding. The $300 million added in fiscal year 2007 will help to 
restore the cuts of recent years, but increased investment is 
necessary. The Energy Policy Act of 2005 authorized over $3.8 billion 
for the EERE account. In order to reduce our dependency on fossil fuels 
and enhance our energy security, this is a time to grow our Nation's 
investment in energy efficiency, not cut funding.
    I want to add that I am disappointed that the Department of 
Energy's fiscal year 2007 spending plan submitted to Congress cut 
funding to the Weatherization program. The Senate passed an amendment 
to the Supplemental Appropriations bill to restore funding to $237 
million. While I hope this amendment will prevail in conference, it is 
my hope that the Department will reconsider its spending plan and 
restore the funding for weatherization while maintaining funding for 
other programs in the intergovernmental account.
    In closing, I want to say that I am glad to see the 
administration's support for cellulosic ethanol and an increase in 
funding to support cost-shared projects with industry for enzyme 
development to produce low cost sugars from biomass and for improved 
organism development for converting those sugars to ethanol. I want to 
make sure that the Department of Energy is aware of important research 
being conducted by the University of Rhode Island and Brown University 
in this field. Researchers in my State are developing biotechnology 
strategies to increase biomass of native grasses and enzymes for post-
harvest digestion of cellulose to improve efficiency of cellulosic 
ethanol production.

    Senator Dorgan. My colleagues, I would prefer to go to the 
witnesses but if you have a very brief opening statement that 
you feel like you must make, I'd certainly be happy to respect 
that.
    Senator Bond. That's a challenge, Mr. Chairman. I was going 
to spend most of my time praising you and the ranking member 
for the money you put in, the $300 million increase in funding 
through the continuing resolution.
    Senator Dorgan. Take as much time as you want.
    Senator Bond. For efficiency of renewable energy. I 
strongly support renewable energy, nuclear power, clean coal 
research. We have a lot of problems in Missouri if we have 
carbon caps or taxation. For low-income people, LIHEAP only 
covers one-sixth of them. We've lost jobs overseas from the 
increased cost of natural gas.
    These impose tremendous burdens and the best way we can 
work, I think, for the future, is through clean coal technology 
because right now, I just heard--I don't know, I just heard 
this fact that by 2012, the timeframe when Kyoto is going to go 
into place--by that time, China and India will build almost 800 
new coal-fired powerplants. The combined carbon emissions from 
those plants will be five times as much as the total reductions 
mandated by the Kyoto Accords and even though nobody is meeting 
them and we can't get China and India to meet them and curb 
their growth unless we are able to provide them the technology. 
I commend the President's Asia Pacific Partnership because 
that--developing the technology here, making it comparable in 
cost to current technology for coal-fired energy is absolutely 
essential. We've got to get over the foot dragging and the 
bureaucracy, get the money released for the EPA Act and I 
support your efforts and more authorization. I just think this 
is a critical element if we're going to take care of the needs 
in our country and not see our efforts overwhelmed by the 
growth in new coal-powered plants in China and India.
    Senator Dorgan. Thank you, Senator Bond. Others?
    Senator Craig. With reason and concern, I will only accept 
a slight bump up in the Idaho Lab budget. Other than that, I'll 
make my comments during the questioning period.
    Senator Dorgan. Thank you, Senator Craig.
    Senator Craig. Dennis, did you hear that?
    Mr. Spurgeon. Yes, sir, I heard that.
    Senator Craig. Thank you very much.
    Senator Dorgan. Senator Allard.

                           PREPARED STATEMENT

    Senator Allard. Mr. Chairman, I have some comments. I'll 
just submit them in the record.
    Senator Dorgan. Without objection.
    [The statement follows:]

               Prepared Statement of Senator Wayne Allard

    Mr. Chairman, thank you for holding this hearing today. I think it 
is very appropriate that you have asked the offices that are 
responsible for dealing with some of the most common ways of producing 
electricity to be here with the Office of Delivery and Reliability. And 
as we are all aware, no amount of electricity does us any good if we 
cannot get it to where it is needed.
    No one can argue that we are dangerously reliant on foreign sources 
of energy. We must decrease our reliance on foreign sources of energy 
by diversifying our energy sources and increasing conservation. I have 
long felt that a balanced energy portfolio that takes no technology off 
of the table is what is best for this Nation.
    For this reason I am a strong supporter of nuclear energy. Nuclear 
generation facilities produce vast and reliable quantities of 
electricity. I am pleased with the recent movement toward increasing 
our nuclear capacity, which has been the result of the Energy Policy 
Act passed in 2005. I am hopeful that we can continue this progress.
    I would like to extend a special welcome to Mr. Karsner, who 
oversees the Office of Energy Efficiency and Renewable Energy, which in 
turn oversees the National Renewable Energy Laboratory in Colorado. 
NREL makes a major contribution to the development of renewable energy 
technology and the technologies that are developed at NREL will remain 
vital to our Nation's energy progress.
    Renewable energy is a very important way that we can begin to 
reduce the demand for oil and, thereby, help make our country more 
secure. There are great opportunities for solar, wind, geothermal, 
biomass, fuel cells and hydro to make significant contributions. 
Research and the input of both government and industry partners are 
very important to allowing these opportunities to live up to their 
potential.
    Finally, fossil energy will remain important to energy production 
in this country. Technological advancements have made the use of coal 
cleaner and more efficient than ever before. In the United States we 
have vast amounts of domestic resources from traditional oil, coal and 
gas resources to unconventional sources such as oil shale. I firmly 
believe that we can and must continue to use these resources 
responsibly.
    I look forward to working with the committee to ensure that 
research and development in all fields of energy technology are funded 
in a manner that is responsible, but sufficient to ensure that the 
development and implementation of new technologies continues.

    Senator Dorgan. Thank you very much. Well, let me, on 
behalf of the entire subcommittee, thank the witnesses. We will 
begin today by hearing from the Honorable Dennis Spurgeon, who 
is the Assistant Secretary of the Office of Nuclear Energy. Mr. 
Spurgeon, let me say to all four of you that your full comments 
will be made a part of the permanent record and you may 
summarize. Mr. Spurgeon.

                  STATEMENT OF HON. DENNIS R. SPURGEON

    Mr. Spurgeon. Thank you very much, Mr. Chairman. Chairman 
Dorgan, Ranking Member Domenici and members of the 
subcommittee, it is a pleasure to be here today to discuss the 
fiscal year 2008 budget request for the Department of Energy's 
Office of Nuclear Energy.
    The Office of Nuclear Energy has made progress in the last 
several years in advancing our Nation's energy security and 
independence in support of the Department's strategic plan. It 
is my highest near-term priority to enable industry to deploy a 
new generation of nuclear power plants. We have also made steps 
toward the developing of advanced nuclear reactor and fuel 
cycle technologies while maintaining a critical national 
nuclear infrastructure.
    Today, 103 nuclear reactors generate roughly 20 percent of 
America's electricity, with the 104th reactor, Browns Ferry 
Unit 1, about to enter service. U.S. electricity demand is 
anticipated to grow 50 percent in the next 25 years, the 
equivalent of 45 to 50 1,000 megawatt nuclear reactors must be 
built just to maintain that 20 percent share.
    The United States is at a critical juncture in the future 
of nuclear power in the United States. Unlike many of our 
international research partners, our nuclear industry has not 
been heavily supported, financially and politically, over the 
past 30 years. Today, the need for increased electrical 
generation capacity is clear and hopefully undisputed.

                           NUCLEAR POWER 2010

    Fortunately, we do have a growth option that allows us to 
have a diversified electrical generation portfolio that 
includes a significant carbon emissions-free component and that 
is nuclear power. To support near term domestic expansion of 
nuclear energy, the fiscal year 2008 budget requests $114 
million for the Nuclear Power 2010 Program, to support 
continued cost shared efforts with industry to reduce the 
barriers to deployment of new nuclear power plants in the 
United States.
    In the past few weeks, we have seen major milestones met in 
the expansion of safe and clean nuclear power. In early March, 
the NRC voted to approve the early site permit for the Exelon 
Generation Company's Clinton site in central Illinois and 2 
weeks ago, the NRC approved the early site permit for the 
Entergy Corporation's Randolph site in Mississippi. The 
approval of these two sites is a step toward the ordering of 
new nuclear powerplants for construction on American soil, a 
feat that hasn't happened in 30 years.
    Why nuclear power? Nuclear power is the only proven base 
load producer of electricity for new capacity that does not 
emit greenhouse gases. It is vital that our current fleet of 
reactors be expanded in order to meet our needs for carbon-
free, dependable electric power.

                   GLOBAL NUCLEAR ENERGY PARTNERSHIP

    Any serious effort toward expanded global use of nuclear 
energy will inevitably require us to address the spent fuel and 
proliferation challenges that accompany such an expansion. To 
meet these challenges, President Bush initiated the Global 
Nuclear Energy Partnership or GNEP, a comprehensive approach to 
enable the expansion of nuclear power in the United States and 
around the world, to promote nonproliferation goals, to more 
efficiently use our nuclear fuel resources and to help resolve 
nuclear waste management issues.
    Domestically, GNEP provides a solution to the ever-growing 
issue of spent nuclear fuel. In conjunction with Yucca 
Mountain, GNEP provides a solution that outlines a closed fuel 
cycle, where energy is harvested from spent fuel before the end 
product is disposed of in a permanent geologic repository. The 
spent fuel will be recycled in a manner that will be more 
proliferation resistant than current processes used around the 
world. A closed fuel cycle will also alleviate some of the 
burden placed on Yucca Mountain and will possibly eliminate the 
need for a second geologic repository throughout the remainder 
of this century. We reiterate though that no fuel cycle 
scenario will eliminate the need for a geologic repository.
    We are all aware of the enormous amount of energy available 
from nuclear fission. One pound of uranium fuel in a reactor 
makes the same amount of electricity as 125 million pounds of 
coal. Recycling, as we planned in GNEP, while decreasing the 
overall mass of spent nuclear fuel, will also make it possible 
to use the energy remaining in the used fuel. A recycling 
facility processing fuel from existing U.S. light water 
reactors could recover the energy equivalent of the oil 
delivered by the Alaska Pipeline.
    Internationally, GNEP promises to address the growing 
global energy demand in an environmentally friendly manner. A 
global regime of countries able to provide a complete portfolio 
of nuclear fuel services, including Russia, France and possibly 
Japan, China and Britain, will provide these services to 
countries wanting to use nuclear power to meet their basic and 
growing energy needs without the cost and risk associated with 
the nuclear fuel cycle infrastructure. By providing these 
services to other countries, we hope to dissuade future states 
from developing enrichment capabilities like we are 
encountering in Iran today.
    The fact is, the United States is not currently positioned 
to be an active member of the global regime. We have limited 
enrichment capabilities and no back end recycling capabilities. 
Creating the capabilities needed to participate in the global 
expansion of nuclear power will take at least 15 to 20 years, 
meaning that in order to become an active participant of the 
global nuclear expansion, we need to begin now.
    Taking those necessary steps enables us to better assure 
that the imminent expansion will be safe, beneficial and will 
not promote the proliferation of nuclear weapons.
    The Department requests $405 million in fiscal year 2008 to 
begin work on developing a detailed, technically sound roadmap 
for implementing all aspects of the GNEP vision.

                           PREPARED STATEMENT

    Mr. Chairman, we appreciate the support we have received 
from the subcommittee as we seek to address the challenges 
surrounding the global expansion of nuclear power. We remain 
confident and optimistic about the role of nuclear energy in 
providing a solution to our Nation's energy stability and 
independence.
    I would be pleased to answer your questions, sir.
    Senator Dorgan. Secretary Spurgeon, thank you very much for 
your testimony. We appreciate it.
    [The statement follows:]

             Prepared Statement of Hon. Dennis R. Spurgeon

    Chairman Dorgan, Ranking Member Domenici, and members of the 
subcommittee, it is a pleasure to be here to discuss the fiscal year 
2008 budget request for The Department of Energy's (DOE) Office of 
Nuclear Energy.
    The Department of Energy's strategic plan portrays a long-term 
vision of a zero-emission future, free from the reliance on imported 
energy. A portfolio of nuclear programs is provided for in this plan 
for near-term, medium-term, and long-term sustained advances in nuclear 
technology.
    The Office of Nuclear Energy has made progress in the last several 
years in advancing our Nation's energy security and independence in 
support of the Department's strategic plan. The Department remains 
committed to enabling industry to deploy a new generation of nuclear 
power plants. We have also made steps forward in developing advanced 
nuclear reactor and fuel cycle technologies while maintaining a 
critical national nuclear infrastructure.
    Today, 103 nuclear reactors generate roughly 20 percent of 
America's electricity, with the 104th reactor, Browns Ferry unit 1, 
about to enter service. U.S. electricity demand is anticipated to grow 
50 percent over the next 25 years--the equivalent of 45 to 50 one-
thousand megawatt nuclear reactors must be built just to maintain that 
20 percent share. With nuclear power as the only proven base load 
producer of electricity that does not emit greenhouse gases, it is 
vital that our current fleet of reactors be expanded in order to meet 
our needs for carbon-free, dependable and economic electric power.
    Any serious effort to stabilize greenhouse gases in the atmosphere, 
while providing the increasing amounts of energy needed for economic 
development and growth, requires the expanded use of nuclear energy. 
This will inevitably require us to address the spent fuel and 
proliferation challenges that confront the expanded, global use of 
nuclear energy. To meet these challenges, the Department initiated the 
Global Nuclear Energy Partnership (GNEP), a comprehensive approach to 
enable an expansion of nuclear power in the United States and around 
the world, promote non-proliferation goals, and help minimize the 
amount of nuclear waste disposal.
    GNEP is a perfect example of where global cooperation is required 
to address a changing global energy landscape. The United States has a 
unique opportunity to influence global energy policy, and more 
specifically global nuclear energy policy. However, for the United 
States to have influence abroad, we must have an established domestic 
policy supportive of a significant role for nuclear power in our energy 
future, an aggressive nuclear research and development program, and a 
viable nuclear technology infrastructure. Through the GNEP program, we 
are pursuing in parallel the development of the policies, technologies, 
and facilities necessary for the United States to be a global leader in 
the nuclear energy enterprise and to ensure our energy security and 
national security objectives.
    The Department's fiscal year 2008 budget request proposes an $874.6 
million investment in nuclear research, development and infrastructure 
for the Nation's future. This budget request supports the President's 
priorities to enhance the Nation's energy security while enabling 
significant improvements in environmental quality. Our request supports 
development of new nuclear generation technologies and advanced energy 
products that provide significant improvements in sustainability, 
economics, safety and reliability, and proliferation and terrorism 
resistance.
    While we have made progress in all program areas, much remains to 
be done. Our fiscal year 2008 request moves us in the right direction 
and I will now provide you a report of our activities and explain the 
President's request for nuclear energy.

                           NUCLEAR POWER 2010

    To support near-term domestic expansion of nuclear energy, the 
fiscal year 2008 budget requests $114 million for the Nuclear Power 
2010 program to support continued cost-shared efforts with industry to 
reduce the barriers to the deployment of new nuclear power plants in 
the United States. The technology focus of the Nuclear Power 2010 
program is on Generation III+ advanced, light water reactor designs, 
which offer advancements in safety and economics over the existing 
fleet of nuclear power plants already operating in the United States. 
To reduce the regulatory uncertainties and enable the deployment of new 
Generation III+ nuclear power plants in the United States, it is 
essential to demonstrate the untested Federal regulatory processes for 
the siting, construction, and operation of new nuclear plants. In 
addition, design finalization of two standard plant designs and NRC 
certification of these Generation III+ advanced reactor concepts are 
needed to reduce the high initial capital costs of the first new plants 
so that these new technologies can be competitive in the deregulated 
electricity market and deployable within the next decade.
    The fiscal year 2008 budget request continues the licensing 
demonstration activities started in previous years. Activities include 
completion of the last Early Site Permit demonstration projects and 
continuation of the New Nuclear Plant Licensing Demonstration projects 
that will exercise the untested licensing process to build and operate 
new nuclear plants and complete and obtain certification of two 
advanced Generation III+ advanced reactor designs. Engineering 
activities in support of the submission of two combined Construction 
and Operating License (COL) applications to the NRC will continue. In 
addition, two reactor vendors will continue first-of-a-kind design 
activities for two standard nuclear plants.
    In the past few weeks we have seen major milestones met in the 
expansion of safe and clean nuclear power. Earlier this month the NRC 
voted to approve the Early Site Permit for the Exelon Generation 
Company's Clinton site in central Illinois, and just yesterday the NRC 
approved the Early Site Permit for the Entergy Corporation's Grand Gulf 
site in Mississippi. The approval of these two sites is a step towards 
the ordering of new nuclear power plants for construction on American 
soil, a feat that hasn't happened in 30 years. With nuclear power as 
the only proven base load producer of electricity that does not emit 
greenhouse gases, it is vital that our current fleet of reactors be 
expanded in order to meet our needs for carbon-free, dependable and 
economic electric power.
    The project teams, Dominion Energy and NuStart Energy Development 
LLC., involved in the licensing demonstration projects represent power 
generating companies and reactor vendors that operate more than two-
thirds of all the U.S. nuclear power plants in operation today. As a 
result of the Nuclear Power 2010 program and Energy Policy Act of 2005 
financial incentives (e.g. standby support), 14 power companies have 
announced their intentions to apply for combined construction and 
operating licenses. Several have specifically stated that they are 
building on work being done in the Nuclear Power 2010 program as the 
basis for their applications.
    The United States is at a critical juncture in the future of 
nuclear power in the United States. Unlike many of our international 
research partners, our nuclear industry has not been heavily supported 
financially and politically over the past 30 years. Today the need for 
increased electrical generating capacity is clear and hopefully 
undisputed. Fortunately, we do have a growth option that allows us to 
have a diversified electrical generation portfolio that includes a 
significant carbon emissions-free component, and that is nuclear power. 
To realize this option, we are asking private companies to build plants 
whose collective cost could be a significant percentage of their net 
worth. This represents an enormous financial risk that few companies or 
lenders will be willing to assume without demonstrated certainty in the 
regulatory process and project cost.
    If one accepts the fact that we need more electrical generation 
capacity, and if one desires to have a component of that new capacity 
that is carbon free, and one recognizes the financial considerations 
associated with such a large private investment in technologies that we 
have not supported in 30 years, then the importance of this program to 
our future energy security is self-evident. These companies will be 
building new generating capacity in the very near future, but the 
question they must first answer is whether this generation will come 
from clean, safe, nuclear technologies or not.
    If widely deployed in the United States these new technologies will 
create significant business opportunities and will support the rapid 
growth of heavy equipment fabrication, high technology and commercial 
construction industries in this country. Moreover, these American 
technologies and industrial capabilities will be highly competitive 
internationally and would support our leadership role in the global 
expansion of safe, clean nuclear power.

                     ADVANCED FUEL CYCLE INITIATIVE

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

            GENERATION IV NUCLEAR ENERGY SYSTEMS INITIATIVE

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

                      NUCLEAR HYDROGEN INITIATIVE

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

                   RADIOLOGICAL FACILITIES MANAGEMENT

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

                      IDAHO FACILITIES MANAGEMENT

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

                IDAHO SITE-WIDE SAFEGUARDS & SECURITIES

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

      UNIVERSITY REACTOR INFRASTRUCTURE AND EDUCATIONAL ASSISTANCE

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

                               CONCLUSION

    This concludes my prepared statement. Your leadership and guidance 
has been essential to the progress the program has achieved thus far 
and your support is needed as we engage the task ahead of investing in 
our energy security.
    I would be pleased to answer any questions you may have.

    Senator Dorgan. Next, we will hear from Secretary Karsner. 
Secretary Karsner is Assistant Secretary for the Office of 
Energy Efficiency and Renewable Energy. Secretary Karsner, we 
welcome you.

STATEMENT OF HON. ALEXANDER KARSNER, ASSISTANT 
            SECRETARY FOR ENERGY EFFICIENCY AND 
            RENEWABLE ENERGY
    Mr. Karsner. I appreciate that. Chairman Dorgan, Ranking 
Member Domenici, members of the subcommittee, thank you for 
this opportunity to testify on the President's fiscal year 2008 
budget request for the Office of Energy Efficiency and 
Renewable Energy, EERE.
    The request includes $1.24 billion for EERE, approximately 
$60 million more than the fiscal year 2007 request to Congress. 
To be clear, my statement today is presented primarily in 
comparison with the administration's fiscal year 2007 request; 
however, because the Department has now submitted its fiscal 
year 2007 operating plan, I'm also going to highlight some of 
the key allocations from that appropriation.
    The fiscal year 2008 budget request addresses pressing 
energy and environmental challenges by accelerating the 
development of renewable energy and advanced energy efficiency 
technologies. Much of EERE's funding is an integral part of the 
President's Advanced Energy Initiative (AEI). The AEI was 
launched in 2006 to confront our Nation's addiction to oil, 
lessen dependence on foreign resources and reduce emissions by 
developing clean sources of electricity generation.
    In the 2007 State of the Union Address, the President 
raised the bar further by seeking legislative action to reduce 
gasoline consumption by 20 percent within the decade, the 20 in 
10 plan. The 20 in 10 legislative proposals include an 
increased alternative fuel standard and reduced fuel 
consumption through raising and reforming corporate average 
fuel economy with a CAFE&ogram.
    The President's budget request increases funding for 
programs that support the 20 in 10 goal, including biomass and 
biofuels R&D to expand the availability of alternative 
transportation fuels. While the fiscal year 2007 continuing 
resolution is a substantial increase over the President's 
fiscal year 2008 budget proposal, the funds will be used to 
accelerate critical components of the Advanced Energy 
Initiative. EERE is directing an additional $30 million to 
commercial biorefinery demonstrations, $10 million additional 
for plug-in hybrid battery development, and over $100 million 
for improvements at the National Renewable Energy Laboratory, 
NREL. The increase will accelerate the completion of NREL's 
research support facility, a state-of-the-art building complex. 
As a national model of LEED certified advanced design, it's 
going to showcase the renewable energy and energy efficiency 
technologies that NREL develops and reduce its operating costs. 
Preliminary analyses indicate the potential to achieve up to 
$122 million of life cycle savings.
    The increase will also support expansion of NREL's 
Integrated Bio-Refinery Research Facility, which provides the 
industry with a very unique test bed for emerging technologies.
    Returning to fiscal year 2008, EERE's overall budget 
request reflects the goals of accelerating new energy R&D and 
expanding commercialization and deployment of emerging 
technologies. The request for biomass and biorefinery systems 
R&D is $179.3 million, an increase of $29.6 million or almost 
20 percent over the previous year. This proposal highlights the 
essential role of the Biofuels Initiative in increasing 
America's energy security.
    The program is focused on making cellulosic ethanol cost-
competitive by 2012. EERE will continue to support cost-shared 
efforts with industry to develop and demonstrate cellulosic 
biorefinery technologies that enable the production of 
transportation fuels and co-products. In addition, EERE is 
engaging in cost-shared projects with industry for enzyme 
development and for improved organism development or 
ethanologens for converting the sugars into ethanol. These two 
projects address major barriers to meeting our 2012 targets.
    For the Vehicle Technologies Program, the Department is 
requesting $176.1 million for fiscal year 2008 to advance the 
development of energy-efficient, environmentally friendly, 
flexible platform technologies for cars and trucks that use 
significantly less oil and enable industry to comply with the 
proposed reformed CAFE standards. This request is $10.1 million 
higher than the fiscal year 2007 request and will advance the 
state of the art for energy storage batteries, power 
electronics and motors, and drive systems and testing needed to 
accelerate the viability and delivery of plug-in hybrid 
electric vehicles.
    Battery technologies have made significant progress, 
reducing the cost of next generation hybrid vehicle batteries 
in each of the past 3 years, from almost $1,200 per vehicle to 
$750 per vehicle. In fiscal year 2008, we expect to bring that 
down further to $625 per vehicle and to increase our emphasis 
on batteries specifically optimized for plug-in hybrid 
applications.
    Next, hydrogen is an important element of our strategy for 
energy security and environmental stewardship. The President's 
$309 million budget request for the Hydrogen Fuel Initiative 
fulfills his 5-year commitment of $1.2 billion. The portion of 
this under EERE is $213 million, which reflects a $7.2 million 
increase over the fiscal year 2007 budget request.
    Much progress has been made since the announcement of the 
Hydrogen Fuel Initiative in 2003. The research has reduced the 
high volume cost of automotive fuel cells from $275 per 
kilowatt in 2002 to $107 per kilowatt in 2006, a major step 
toward the ultimate cost target of $30 per kilowatt.
    Our research is going to continue to sharpen its focus to 
meet hydrogen production objectives through renewable pathways, 
including performing with bioderived liquids and electrolysis.
    For solar energy, the fiscal year 2008 request is $148.3 
million, a level that is nearly twice the enacted 2006 level. 
The Department's photovoltaic R&D focuses on those technology 
pathways that have the greatest potential to achieve more cost 
competitiveness and grid parity by or before 2015. Industry-led 
partnerships with universities, State groups and national 
laboratories, known as Technology Pathway Partnerships, will 
continue in fiscal year 2008 to address the issues of cost, 
performance, and reliability.
    Other priority key program areas of EERE include Building 
Technologies, which targets the long-term goal in 2020 of net-
zero energy buildings--houses that can produce as much energy 
as they use on an annual basis. We're going to help industry 
produce a white light-emitting diode, or LED, lamp, which has 
already set the world record for LED brightness and efficacy in 
a power chip.
    Wind energy focuses on reducing wind power costs and 
removing siting and transmission barriers to expand and use 
wind energy up to potentially 20 percent of our grid capacity 
in the United States.
    Industrial Technologies, which in addition to leveraging 
successful partnerships with energy intensive industries, will 
support the development of next generation technologies that 
can revolutionize the U.S. industrial processes and deliver 
dramatic energy and environmental benefits.

                           PREPARED STATEMENT

    My written statement, of course, includes greater detail on 
these and other programs but this concludes my opening remarks 
and I'm happy to answer any questions the subcommittee members 
may have of me.
    Senator Dorgan. Secretary Karsner, thank you very much for 
your testimony.
    [The statement follows:]

              Prepared Statement of Hon. Alexander Karsner

    Mr. Chairman and members of the committee, thank you for this 
opportunity to testify on the President's fiscal year 2008 budget 
request for the Office of Energy Efficiency and Renewable Energy 
(EERE).
    The President's fiscal year 2008 budget request includes $1.24 
billion for EERE, approximately $60 million (5 percent) more than the 
fiscal year 2007 request to Congress. To be clear, because of timing in 
drafting this testimony and finalizing the Department's operating plan 
for the fiscal year 2007 year-long Continuing Resolution (CR), my 
written testimony on the fiscal year 2008 budget request is presented 
primarily in comparison to the administration's fiscal year 2007 
request. EERE received a $300 million increase in funding under the CR. 
I am grateful to Congress for its vote of confidence in the energy 
efficiency and renewable energy programs, but note that this level is 
above the allocation in the President's request. In allocating the 
additional $300 million, EERE will accelerate the priorities reflected 
in administration initiatives such as the ``20 in 10'' plan and the 
Advanced Energy Initiative (AEI), while still carrying out 
implementation of the Energy Policy Act of 2005 (EPACT).
    The fiscal year 2008 budget request addresses pressing energy and 
environmental challenges facing our country today by accelerating the 
development of both renewable energy technologies to increase the 
amount of clean energy produced in the United States and advanced 
energy efficient technologies, standards, and practices that use less 
energy. Much of EERE's funding is an integral part of the President's 
AEI, launched in 2006 to confront our addiction to oil, lessen 
dependence on foreign resources, and reduce emissions by developing 
clean sources of electricity generation. Together, new technologies can 
help change the way we power our homes, businesses, and automobiles.
    In his 2007 State of the Union address, the President raised the 
bar by seeking legislative action for our country to reduce gasoline 
consumption by 20 percent in the next 10 years, the ``20 in 10'' plan. 
The fiscal year 2008 budget request increases funding for programs that 
may help the Nation achieve the ``20 in 10'' goal, including, for 
example, biomass/biofuels R&D that may help to expand the availability 
of alternative transportation fuels.
    EERE's applied science R&D contributes to the foundation for 
transforming the Nation's energy options and energy use. For example, 
one of this year's R&D 100 awards went to the Department's Idaho 
National Laboratory for its work with Xtreme Xylanase, an enzyme 
produced by bacteria found in the hot, acidic waters of Yellowstone 
National Park. Work on Xtreme Xylanase was funded in part by EERE's 
Biomass Program. The metabolic versatility of this enzyme (it breaks 
down cellulose and hemicellulose over a broad range of temperatures and 
acidic pH conditions) could help make cellulosic ethanol more 
efficiently and economically. In the field of solar energy, a new 
world-record 40 percent efficient concentrating photovoltaic solar cell 
was developed as a result of collaboration between DOE, the National 
Renewable Energy Laboratory, and Spectrolab. For general lighting 
applications with solid-state lighting, Cree, Inc., with DOE R&D 
funding, has released the new XLamp 7090 power white light-emitting 
diode (LED), setting a world record for LED brightness and efficacy (at 
85 lumens/Watt) in a power chip.
    It is essential, however, that, we work not only to accelerate R&D 
for new energy technologies, but address the accelerated adoption of 
technologies into commercial products that are widely available at 
reasonable cost to all Americans. Thus, in addition to its historical 
role of leading Federal applied science on emerging technologies, EERE 
is taking aggressive steps to catalyze the rapid commercialization and 
deployment of critical energy advances through innovative partnerships 
and collaboration with lenders and investment groups, the States, and 
industry leaders. We seek to help enable and accelerate market 
transformation toward the use of more efficient and cleaner 
technologies.
    EERE's overall budget request reflects the funding needed to meet 
our goals. The following EERE programs target and support sectors of 
energy use and supply that will help lead our Nation to a secure energy 
future:

                  BIOMASS AND BIOREFINERY SYSTEMS R&D

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

                      VEHICLE TECHNOLOGIES PROGRAM

    In fiscal year 2008, the Department is requesting $176.1 million 
for the Vehicle Technologies Program to advance development of 
increasingly more energy-efficient and environmentally friendly, 
flexible platform technologies for cars and trucks that will use 
significantly less oil and enable the auto industry to comply with 
reformed CAFE standards. This request is $10.1 million higher than the 
fiscal year 2007 request, and will advance the state of the art for 
energy storage batteries, power electronics and motors, and the hybrid 
drive systems and testing needed to accelerate manufacturing viability 
and delivery of plug-in hybrid electric vehicles.
    Activities in the Vehicle Technologies Program contribute to two 
cooperative government/industry activities: the FreedomCAR and Fuel 
Partnership (where CAR stands for Cooperative Automotive Research) and 
the 21st Century Truck Partnership. The FreedomCAR and Fuel Partnership 
is a collaborative effort among the U.S. Council for Automotive 
Research (USCAR--representing the three domestic automobile 
manufacturers), five energy suppliers, and DOE for cooperative, pre-
competitive research on advanced automotive technologies having 
significant potential to reduce oil consumption. The 21st Century Truck 
Partnership focuses on commercial vehicles. The partnership involves 
key members of the commercial vehicle industry, (truck equipment 
manufacturers and engine manufacturers) along with three other Federal 
agencies. The R&D centers on improving advanced combustion engine 
systems and fuels and on reducing vehicle parasitic losses, meaning 
frictional and aerodynamic losses, extra loads like air conditioning, 
and other vehicle inefficiencies that increase fuel consumption.
    Vehicle Technologies Program activities that support the goals of 
the FreedomCAR and Fuel Partnership focus on high-efficiency and 
flexible platform vehicle technologies such as advanced combustion 
engines and their enabling fuels, hybrid vehicle systems (including 
plug-in hybrids), high-power and high-energy batteries, lightweight 
materials, and power electronics. These technologies could lead to 
substantial oil savings if adopted by industry participants and 
included in their manufacturing plans.
    The FreedomCAR goals include reducing the volume production cost of 
a high-power 25kW battery for use in hybrid passenger vehicles from 
$3000 in 1998 to $500 by 2010. In 2006 we projected through the 
modeling of research data that lithium ion battery cost could be 
reduced to $750 per 25 kW battery system when produced in mass 
quantities. This year's request increases the emphasis on plug-in 
hybrid vehicle component technologies. Cited by the President as a key 
part of the strategy for reducing America's dependence on oil, these 
technologies offer the potential to make significant additional 
improvements in petroleum reduction beyond that achievable with 
standard hybrid configurations.
    Combustion engine efficiency has made good progress over the past 3 
years (2004-2006), with our R&D increasing the efficiency of light-duty 
passenger vehicle diesel engines from 35 to 41 percent. This means that 
if manufacturers were to produce these more efficient engines, a car 
that previously got the CAFE average of 27 miles per gallon on gasoline 
could potentially get 37 miles per gallon with an advanced, clean 
diesel. In fiscal year 2008, we expect to reach 43 percent efficiency 
for passenger vehicle diesel engines, approaching the 2010 goal of 45 
percent. These advanced combustion engines have the potential to 
achieve the efficiency goals for cars and trucks while maintaining cost 
and durability with near-zero emissions. Battery technologies have also 
made significant progress toward program goals, having reduced the cost 
of next-generation hybrid vehicle batteries in each of the past 3 
years, from almost $1,200 per vehicle at the beginning of fiscal year 
2004 to $750 at the end of fiscal year 2006. In fiscal year 2008, we 
expect to bring that down to $625 per vehicle, and to increase our 
emphasis on batteries specifically optimized for plug-in hybrid 
vehicles to have battery technology ready by 2014 that will enable 
automobile manufacturers to economically produce competitive plug-in 
hybrid vehicles having a 40 mile all-electric range.
    R&D programs will also continue to accelerate materials research 
directed at light, strong vehicle structures to enable the production 
of lighter vehicles that could result in higher efficiency fleets, and 
to develop thermoelectric materials for efficient energy recovery from 
heat. Other activities will focus on expanding efforts to promote the 
adoption and use of petroleum-reducing fuels, technologies, and 
practices, principally by working with industry partners, fuel 
providers, Clean Cities coalitions and their stakeholders, and end-
users on activities ranging from using more alternative fuel vehicles 
and renewable fuel blends to driving smarter, minimizing wasteful idle 
time, and purchasing vehicles that get better fuel economy. 
Accordingly, the Vehicle Technologies Deployment budget request 
(including Clean Cities) will increase by over 100 percent relative to 
the fiscal year 2007 request.

                      HYDROGEN TECHNOLOGY PROGRAM

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

                          SOLAR ENERGY PROGRAM

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

                     BUILDING TECHNOLOGIES PROGRAM

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

                   FEDERAL ENERGY MANAGEMENT PROGRAM

    The Federal Energy Management Program (FEMP) assists Federal 
agencies, including DOE, in increasing their use of energy efficiency 
and renewable energy technologies through alternative financing 
contract support and technical assistance, and coordinates Federal 
reporting and evaluation of agency progress each year. As the single 
largest energy consumer in the United States, the Federal government 
must set an example and lead the Nation toward becoming a cleaner, more 
efficient consumer by using existing energy efficiency and renewable 
energy technologies and techniques. On January 24, 2007, President Bush 
signed a new Executive Order to strengthen the environmental, energy, 
and transportation management of Federal agencies which includes a 
requirement for agencies to reduce their energy intensity by 3 percent 
each year until 2015, compared with a 2003 baseline.
    The fiscal year 2008 request for FEMP is $16.8 million, a slight 
decrease of $0.1 million from the fiscal year 2007 request. We are 
requesting $7.9 million for FEMP alternative financing programs that 
help agencies access private sector financing to fund energy 
improvements without the use of current appropriations. We expect to 
achieve not less than $160 million in private sector investment through 
Super ESPCs, Energy Savings Performance Contracts, and Utility Energy 
Service Contracts (UESCs), which will result in about 15 trillion Btus 
in energy saved over the lifecycle of the projects. Furthermore, we are 
requesting $6.5 million for Technical Guidance and Assistance to help 
Federal energy managers identify, design, and implement new 
construction and facility improvement projects that incorporate energy 
efficiency and renewable energy. FEMP will assist Federal agencies in 
meeting the increased energy efficiency goals, established by the new 
Executive Order, by orienting its Technical Guidance and Assistance, 
Training, and Outreach activities towards attracting private-sector 
financing for investment into energy efficiency at Federal facilities. 
In addition to the focus on facility energy consumption, FEMP also 
tracks alternative fuel use in Federal vehicle fleets.
    In fiscal year 2008, the Departmental Energy Management Program 
(DEMP) is being discontinued. FEMP will still provide policy guidance 
and technical assistance to the Department, but DOE has determined that 
the management of energy efficiency and renewable investments at its 
facilities can be more effectively conducted by those facilities. While 
not reported separately, DOE national labs and other facilities spend 
significant funding (direct and indirect) on energy efficiency 
improvements, while also using ESPCs and UESCs where appropriate.

                          WIND ENERGY PROGRAM

    The Wind Program focuses on reducing wind power costs and removing 
barriers to resource utilization of wind energy technology in the 
United States. The program's fiscal year 2008 request is $40.1 million.
    As a result of 30 years of R&D, wind turbines can now provide cost-
effective, reliable clean energy in high wind speed areas. While we 
will continue to do R&D to improve wind energy technologies in low wind 
speed areas, we are also focusing on near-term actions to remove 
existing barriers to increasing the use of wind energy, building on the 
current robust market for wind energy in the United States. These 
efforts could help to set the path for the wind industry to accelerate 
its penetration of delivered emission-free energy, significantly 
expanding beyond the roughly one percent of installed electrical 
generating capacity today.
    The program is expanding application and deployment-related 
activities. The $12.9 million requested for Systems Integration and 
Technology Acceptance will help wind technologies entering the market 
to overcome key obstacles such as grid integration, siting, permitting, 
and environmental barriers. In addition, there will be increased 
support to address issues of pre-competitive turbine reliability and 
performance via efforts of National Laboratories and Cooperative 
Research and Development Agreements or ``CRADAs'' with industry. The 
Wind Program will also establish a Federal interagency siting group to 
minimize regulatory delays on wind projects.
    The Wind Program is funding a broader effort on distributed wind 
technologies and applications to advance the full scope of diverse 
opportunities for wind energy on the distribution side of the electric 
power system.
    A U.S. wind industry-wide roadmapping analysis, being supported by 
the DOE wind program, is underway to determine the technical 
feasibility for wind energy to generate 20 percent of our Nation's 
electricity. To achieve this vision it would require grid 
modernization, expansion, and integration, and removal of other 
deployment barriers. Success would enable delivery of more than 300 
gigawatts of new, clean, affordable, and domestic production capacity 
to our urban load centers and be a substantial contributor to economic 
growth, manufacturing, and rural prosperity. EERE will work with DOE's 
Office of Electricity Delivery and Energy Reliability on several 
studies aimed at expanding electricity transmission between remote wind 
resources and urban areas.

              WEATHERIZATION AND INTERGOVERNMENTAL PROGRAM

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

                    INDUSTRIAL TECHNOLOGIES PROGRAM

    Industry consumes more energy than the residential, commercial, and 
transportation end-use sectors, and it is also the Nation's second 
largest emitter of CO2. Advancements in industrial energy-
efficient technology could improve U.S. competitiveness, and contribute 
to our national effort to reduce oil imports, alleviate natural gas 
price pressure, and pre-empt the need for new power plants and 
consequent emissions.
    The fiscal year 2008 budget request for Industrial Technologies is 
$46.0 million, a $0.4 million increase over the fiscal year 2007 
request. The program will leverage its innovative technology transfer 
practices and partnerships with energy-intensive industries, while 
shifting toward more crosscutting and higher-impact R&D activities that 
will bring innovative energy solutions to a much broader group of 
industrial companies, at a more accelerated pace.
    The Industrial Technologies Program (ITP) has a track record for 
moving innovative technologies from R&D through commercialization and 
onto the floors of industrial plants. In 2006 alone, 8 technologies 
funded by ITP received prestigious R&D 100 awards. New technologies 
emerging from ITP's R&D program are being adopted to help solve some of 
industry's toughest energy and competitiveness challenges. In many 
cases, this is occurring through the industrial energy assessments that 
ITP is conducting at 250 of the Nation's largest energy-consuming 
manufacturing plants as part of Secretary Bodman's ``Easy Ways to Save 
Energy'' initiative. We estimate that ITP-sponsored technologies and 
deployment activities have contributed to industrial energy savings of 
over $3.1 billion in one year (2004).
    The $7.2 million requested for the new activity, Energy-Intensive 
Process R&D, will support R&D in 4 crosscutting areas to better deliver 
technology solutions for the industrial processes that consume the most 
energy. These four areas are Energy Conversion Systems, Industrial 
Reaction and Separation, High-Temperature Processing, and Fabrication 
and Infrastructure. One example of a technology that cuts across the 
industrial sector to deliver savings is ITP's ultra-high efficiency, 
ultra-low emissions, industrial steam generation ``Super Boiler.'' 
Since steam is used in every major sector, the potential benefits are 
tremendous. The Super Boiler is 10 to 20 percent more efficient than 
current technology and can reduce NOX emissions to below 5 
parts per million, which represents an approximately 90 percent 
reduction in emissions from a conventional boiler.
    The $4.9 million request for the new Inter-Agency Manufacturing R&D 
activity working with the National Science and Technology Council will 
support the development or adaptation of next-generation technologies 
that can revolutionize U.S. industrial processes and deliver dramatic 
energy and environmental benefits. These next-generation technologies, 
such as entirely new processing routes and supply chains, can have 
broad applications across industry, yet they typically require the type 
of high-risk, high-return R&D that one industry cannot usually 
undertake. Our initial research focus will include development of 
techniques and processes needed for nanomanufacturing. We aim to help 
transform industrial processes by enabling the mass production and 
application of nano-scale materials, structures, devices, and systems 
that provide unprecedented energy, cost, and productivity benefits in 
manufacturing.
    Deployment efforts such as ``Best Practices'' activities and 
Industrial Assessment Centers will continue to deliver the results of 
energy-efficiency R&D and energy-saving practices to industrial plants 
nationwide. A vehicle for educational outreach, the university-based 
Industrial Assessment Centers train engineers and scientists in the 
energy field, providing opportunities for students to conduct energy 
assessments at no cost to small and medium-sized manufacturing plants 
in the United States.

                     FACILITIES AND INFRASTRUCTURE

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

                 PROGRAM DIRECTION AND PROGRAM SUPPORT

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

                               CONCLUSION

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

    Senator Dorgan. Next we will hear from the Honorable Tom 
Shope, the Assistant Secretary of the Office of Fossil Energy. 
Mr. Shope, thank you for being with us.

STATEMENT OF HON. THOMAS D. SHOPE, ACTING ASSISTANT 
            SECRETARY FOR FOSSIL ENERGY
    Dr. Shope. Thank you, Mr. Chairman, thank you, Ranking 
Member Domenici and members of the subcommittee. It is an honor 
for me to appear before you today to present the Office of 
Fossil Energy's proposed budget for fiscal year 2008.
    Fossil Energy's $863 million budget request for fiscal year 
2008 will allow the office to support the President's top 
initiatives for energy security, clean air, climate change and 
coal research as well as DOE's strategic goal of protecting our 
national and economic security by promoting a diverse supply 
and delivery of reliable, affordable, and environmentally sound 
energy.
    Let me begin the presentation of our budget with coal, our 
most abundant and lowest cost domestic fossil fuel. Coal today 
accounts for nearly one-quarter of all of the energy and more 
than one-half of the electricity produced in the United States. 
Because coal is so important to our energy future, our proposed 
budget of $448 million for the President's coal research 
initiative, related fuel cell R&D and program direction 
accounts for more than one-half of our total budget. Our 
overarching goal is to conduct research and development that 
will improve the competitiveness of domestic coal in future 
energy markets, allowing the Nation to tap the full potential 
of its abundant fossil energy resources in an environmentally 
sound and affordable manner.
    This year's request completes 3 years ahead of schedule the 
President's commitment to invest $2 billion on clean coal 
research over 10 years. Our coal research initiative is broken 
down into the following components. We are requesting $73 
million for the Clean Coal Power Initiative, a cooperative, 
cost-shared program between the Government and industry to 
demonstrate emerging technologies in coal-based power 
generation so as to help accelerate commercialization. Work on 
promising technologies selected in two prior solicitations will 
continue in fiscal year 2008 and we plan to announce a third 
solicitation during the year.
    The first of a kind, high priority FutureGen project will 
establish the capability and feasibility of co-producing 
electricity and hydrogen from coal with near zero atmospheric 
emissions, including carbon dioxide. FutureGen's proposed 
budget of $108 million for fiscal year 2008 will be used to 
support detailed plant design and procurement and other 
preliminary work. Technology development supporting FutureGen 
is embodied in our Fuels and Power Systems Program. Included in 
the Program's proposed budget for fiscal year 2008 of $245.6 
million, you will find the research and development for carbon 
capture and sequestration, membrane technologies for oxygen and 
hydrogen separation, advanced combustion turbines, fuel cells, 
coal to hydrogen conversion and gasifier related technologies.
    The high priority carbon sequestration program with a 
proposed budget for fiscal year 2008 of $79 million for 
developing a portfolio of technologies with great potential to 
reduce greenhouse gas emissions. The goal is to achieve 
substantial market penetration after 2012. In the long term, 
the program is expected to contribute significantly to the 
President's goal of developing technologies to substantially 
reduce greenhouse gas emissions.
    In addition, the network of seven regional carbon 
sequestration partnerships and the International Carbon 
Sequestration Leadership Forum established by DOE in 2003 will 
continue their important work, including conducting vital, 
diverse geologic CO2 storage tests. Research and 
development carried out by the Coal to Hydrogen Fuels Program, 
funded at a proposed $10 million, will make the future 
transition to a hydrogen-based economy possible by reducing the 
costs and increasing the efficiency of hydrogen production from 
coal.
    We have requested $62 million in fiscal year 2008 to 
continue the important work of a Solid State Energy Conversion 
Alliance, the goal of which is to develop the technology for 
low cost, scalable, and fuel flexible fuel cell systems.
    Consistent with our fiscal year 2006 and 2007 budget 
requests, the Petroleum Oil Technology and Natural Gas 
Technologies Research and Development Programs are proposed to 
be terminated in fiscal year 2008. However, the Office of 
Fossil Energy will continue to carry out important 
responsibilities in the oil and natural gas sector, such as 
management of the ultra-deep water and unconventional resources 
research program mandated by the Energy Policy Act of 2005.
    In addition, fossil energy will continue to authorize 
natural gas imports and exports, collect and import data on 
natural gas trade, operate the Rocky Mountain Oil Field Testing 
Center and oversee the Loan Guarantee Program for the Alaska 
Natural Gas Pipeline.
    The Energy Policy Act of 2005 directs the strategic 
petroleum reserve to prepare to increase its oil storage to 1 
billion barrels. Additionally, the President recently 
recommended expanding the reserve's capacity to 1.5 billion 
barrels. Our budget request of $331 million, almost double last 
year's request, will fund the reserve's continued readiness as 
well as the immediate filling of the reserve to its current 
capacity of 727 million barrels. The budget includes $168 
million to begin expansion at existing and new sites towards 
the 1.5 billion barrels.

                           PREPARED STATEMENT

    Mr. Chairman and members of the subcommittee, this 
completes my prepared statement. I'd be happy to answer any 
questions you may have.
    Senator Dorgan. Secretary Shope, thank you very much for 
your testimony.
    [The statement follows:]

               Prepared Statement of Hon. Thomas D. Shope

    Mr. Chairman, members of the committee, it's a pleasure for me to 
appear before you today to present the Office of Fossil Energy's (FE) 
proposed Budget for fiscal year 2008
    Fossil Energy's $863 million budget request for fiscal year 2008, 
one of the largest FE requests made by this administration, will allow 
the Office to achieve 2 fundamental objectives: first, to support the 
President's top priorities for energy security, clean air, climate 
change and coal research; and second, to support the Department of 
Energy's strategic goal of protecting our national and economic 
security by promoting a diverse supply and delivery of reliable, 
affordable, and environmentally-sound energy.
    More specifically, the proposed budget emphasizes early initiation 
of an expansion of the Strategic Petroleum Reserve; rapid development 
of technologies to manage and dramatically reduce atmospheric emissions 
of the greenhouse gas carbon dioxide from fossil fuel use in power 
generation and other industrial activity; and design and other 
preparatory work on the FutureGen project to combine in one plant the 
production of electric power and hydrogen fuel from coal with near-zero 
atmospheric emissions.

                THE PRESIDENT'S COAL RESEARCH INITIATIVE

    I will begin the detailed presentation of our proposed budget with 
coal, our most abundant and lowest cost domestic fossil fuel. Coal 
today accounts for nearly one-quarter of all the energy--and about half 
the electricity--consumed in the United States. Because coal is so 
important to our energy future, our proposed budget of $448 million for 
the President's Coal Research Initiative, related fuel cell R&D and R&D 
by Federal employees within program direction accounts for more than 
half our total budget.
    I should mention here that our fiscal year 2008 Budget focuses our 
research and development on activities that support the President's 
Advanced Energy Initiative and key provisions of the Energy Policy Act 
of 2005. These activities will be conducted largely through cost 
sharing and industry collaboration. As a result of the evaluations 
under the Research and Development Investment Criteria, and the Program 
Assessment Rating Tool, activities throughout the program emphasize 
research and development for technologies that will be used in the 
FutureGen project.
    The goal of the overall coal program, which includes the 
President's Coal Research Initiative, is to conduct research and 
development that will improve the competitiveness of domestic coal in 
future energy markets. The administration strongly supports coal as an 
important component of our energy portfolio. This year's budget request 
completes the President's commitment to invest $2 billion on clean coal 
research over 10 years, 3 years ahead of schedule. Our coal budget 
request is broken down into the following components:
Clean Coal Power Initiative
    We are requesting $73 million in fiscal year 2008 for the Clean 
Coal Power Initiative (CCPI), a cooperative, cost-shared program 
between the Government and industry to demonstrate emerging 
technologies in coal-based power generation so as to help accelerate 
commercialization. CCPI allows the Nation's power generators, equipment 
manufacturers and coal producers to help identify the most critical 
barriers to coal use in the power sector. Technologies to eliminate the 
barriers are then selected with the goal of accelerating development 
and deployment of applications that will economically meet 
environmental standards while increasing plant efficiency and 
reliability. Work on promising technologies selected in two prior 
solicitations will continue in fiscal year 2008, and we plan to 
announce a third solicitation during the year, which will focus on 
advanced technology systems that capture carbon dioxide for 
sequestration and beneficial reuse.
    Some activities of the Clean Coal Power Initiative will help drive 
down the costs of Integrated Gasification Combined Cycle (IGCC) systems 
and other technologies for near-zero atmospheric emission plants that 
are essential to the FutureGen concept.
FutureGen
    FutureGen is a high-priority project that will establish the 
capability and feasibility of co-producing electricity and hydrogen 
from coal with near-zero atmospheric emissions including carbon 
dioxide. FutureGen is a public/private partnership designed to 
integrate technologies that ultimately will lead to new classes of 
plants that feature fuel flexibility, multi-product output, electrical 
efficiencies of over 60 percent, and near-zero atmospheric emissions. 
FutureGen's goals include electricity at costs no more than 10 percent 
above power from comparable plants that are incapable of carbon 
sequestration. The capture and permanent storage of atmospheric carbon 
emissions is a key feature of the FutureGen concept, as is the 
capability to use coal, biomass, or petroleum coke. The project should 
help retain the strategic value of coal--the Nation's most abundant and 
lowest cost domestic energy resource. FutureGen's proposed budget of 
$108 million for fiscal year 2008 will be used to support detailed 
plant design and procurement, as well as ongoing permitting, 
preliminary design and site characterization work.
    To help fund both the CCPI and FutureGen projects in fiscal year 
2008, our proposed Budget redirects $58 million in unexpended sums and 
$257 million in deferred appropriations from the original Clean Coal 
Technology program. Specifically, the Budget proposes to transfer $108 
million of the $257 million deferral to the FutureGen project, and 
cancel the remaining $149 million from the deferral. Of the unobligated 
balances carried forward at the start of fiscal year 2008, $58 million 
is transferred to the Clean Coal Power Initiative (CCPI).

                        FUELS AND POWER SYSTEMS

    Technology development supporting FutureGen is embodied in the core 
research and development activity of the Fuels and Power Systems 
program. The Fuels and Power Systems program's proposed budget for 
fiscal year 2008 is $245.6 million. Of this total amount, $183.6 
million will fund research and development for carbon capture and 
sequestration, membrane technologies for oxygen and hydrogen 
separation, advanced combustion turbines, coal-to-hydrogen conversion, 
and gasifier-related technologies. The remaining balance of $62 million 
will support Fuel Cells.
    The program breaks down as follows:
Advanced Integrated Gasification Combined Cycle
    With proposed funding of $50 million for fiscal year 2008, the 
Advanced Integrated Gasification Combined Cycle program will continue 
to concentrate efforts on gas stream purification to meet quality 
requirements for use with fuel cells and conversion processes, on 
impurity tolerant hydrogen separation, on elevating process efficiency, 
and on reducing the costs and energy requirements for oxygen production 
through development of advanced technologies such as air separation 
membranes.
Advanced Turbines
    A funding request of $22 million will allow the Advanced Turbines 
program to continue its concentration on the creation of a turbine-
technology base that will permit the design of near-zero atmospheric 
emission IGCC plants and a class of FutureGen-descended plants with 
carbon capture and sequestration. This research emphasizes technology 
for high-efficiency hydrogen and syngas turbines and builds on prior 
successes in the Natural Gas-based Advanced Turbine Systems Program.
Advanced Research
    The Advanced Research program bridges basic and applied research to 
help reduce the costs of advanced coal and power systems while 
improving efficiency and environmental performance. The proposed $22.5 
million budget for Advanced Research will fund projects aimed at a 
greater understanding of the physical, chemical, biological and thermo-
dynamic barriers that currently limit the use of coal and other fossil 
fuels.
Carbon Sequestration
    The Carbon Sequestration program, with a proposed budget for fiscal 
year 2008 of $79 million, is developing a portfolio of technologies 
with great potential to reduce greenhouse gas emissions. This high-
priority program's primary concentration is on dramatically lowering 
the cost and energy requirements of pre- and post-combustion carbon 
dioxide capture. The goal is to have a technology portfolio by 2012 for 
safe, cost-effective and long-term carbon mitigation, management and 
storage, which will lead to substantial market penetration after 2012. 
In the long term, the program is expected to contribute significantly 
to the President's goal of developing technologies to substantially 
reduce greenhouse gas emissions.
    The Carbon Sequestration program's activities in fiscal year 2008 
will concentrate on research and development projects for carbon 
dioxide (CO2) capture and storage, as well as measurement, 
monitoring and verification technologies and processes.
    In coordination with the current partnerships, the program will 
determine the ``highest potential'' opportunities for the initial 
expedited round of large scale sequestration tests in saline, coal, 
and/or oil and gas bearing formations. This work will begin with a 
physical characterization of the surface and subsurface, reservoir 
modeling, and NEPA review.
    The Partnerships will also move on to the next phase of the Weyburn 
project, where CO2 is being injected into a producing 
oilfield. Weyburn's success would deliver both decreased carbon 
emissions and increased domestic oil production.
    Finally, DOE formed the international Carbon Sequestration 
Leadership Forum (CSLF) in 2003 to work with foreign partners on joint 
carbon sequestration projects, and to collect and share information. 
That work will in continue in fiscal year 2008.
    Several members of the CSLF have also signed on to the FutureGen 
project, and others have signaled strong interest in joining.
Fuels
    Research and development carried out by the Coal-to-Hydrogen Fuels 
program, funded at a proposed $10 million, will make the future 
transition to a hydrogen-based economy possible by reducing the costs 
and increasing the efficiency of hydrogen production from coal. This 
program is an important component of both the President's Hydrogen Fuel 
Initiative and the FutureGen project.
Fuel Cells
    Within Fuel Cells, we have requested $62 million for fiscal year 
2008 to continue the important work of the Solid State Energy 
Conversion Alliance, the goal of which is to develop the technology for 
low-cost, scalable and fuel flexible fuel cell systems that can operate 
in central, coal-based power systems as well as in other electric 
utility (both central and distributed), industrial, and commercial/
residential applications.
Research by Federal Staff
    In addition to the funding levels reflected for Fuels and Power 
Systems, there is $20 million provided within the Program Direction 
account that directly supports the President's Coal Research 
Initiative, plus $1 million for fuel cells. This funding supports 
Federal staff directly associated with conducting the research 
activities of specific Fuels and Power Systems subprograms.
Petroluem and Natural Gas Technologies
    Consistent with the fiscal year 2006 and fiscal year 2007 Budget 
Requests, the Petroleum-Oil Technology and Natural Gas Technologies 
research and development programs will be terminated in fiscal year 
2008.
    The Oil and Gas group will manage the Ultra-Deepwater and 
Unconventional Resources Research Program mandated by the Energy Policy 
Act of 2005. However, I should point out that the 2008 Budget proposes 
to repeal this legislation, consistent with the fiscal year 2007 Budget 
Request.
    In addition, FE will continue to authorize natural gas imports and 
exports, collect and report data on natural gas trade, and operate the 
Rocky Mountain Oilfield Testing Center.
    FE will also oversee the loan guarantee program for the Alaska 
Natural Gas Pipeline.
Strategic Petroleum Reserve
    The Strategic Petroleum Reserve (SPR) exists to ensure America's 
readiness to respond to severe energy supply disruptions. The Reserve 
reached its highest inventory level--700 million barrels of oil--in 
2005 The Energy Policy Act of 2005 directs DOE to fill the SPR to its 
authorized 1 billion barrel capacity, as expeditiously as practicable. 
Additionally, in the 2008 Budget, the President proposed expanding the 
Reserve's capacity to 1.5 billion barrels.
    Our budget request of $332 million for fiscal year 2008--almost 
double last year's request--will fund the Reserve's continued readiness 
through a comprehensive program of systems maintenance, exercises, and 
tests, as well as beginning expansion to 1 billion barrels at existing 
and new sites and NEPA work to expand to 1.5 billion barrels. DOE will 
begin immediately to fill the reserve to its current capacity of 727 
million barrels through purchases of oil with available balances as 
well as through placement of the Department of the Interior's royalty 
in-kind oil into the SPR.
Northeast Home Heating Oil Reserve
    The Northeast Home Heating Oil Reserve was established in July 2000 
when the President directed the Department of Energy to establish a 
reserve capable of assuring home heating oil supplies for the Northeast 
states during times of very low inventories and significant threats to 
immediate supply. The Reserve contains 2 million barrels of heating oil 
stored at commercial terminals in the Northeast and is in good 
condition. The current 5-year storage contracts expire in September 
2007. A request for bids was issued in February 2007. The proposed 
fiscal year 2008 budget requests $5.3 million for continued operations.
Naval Petroleum and Oil Shale Reserve
    The fiscal year 2008 budget request of $17.3 million for the Naval 
Petroleum and Oil Shale Reserve (NPOSR) will allow it to continue 
environmental remediation activities and determine the equity 
finalization of Naval Petroleum Reserve 1 (NPR-1); operate NPR-3 until 
its economic limit is reached, and while operating NPR-3, maintain the 
Rocky Mountain Oilfield Test Center..
    Because the NPOSR no longer served the national defense purpose 
envisioned in the early 1900s, the National Defense Authorization Act 
for Fiscal Year 1996 required the sale of the Government's interest in 
Naval Petroleum Reserve 1 (NPR-1). To comply with this requirement, the 
Elk Hills field in California was sold to Occidental Petroleum 
Corporation in 1998. Subsequently, the Department transferred 2 of the 
Naval Oil Shale Reserves (NOSR-1 and NOSR-3), both in Colorado, to the 
Department of the Interior's (DOI) Bureau of Land Management. In 
January 2000, the Department returned the NOSR-2 site to the Northern 
Ute Indian Tribe. The Energy Policy Act of 2005 transferred 
administrative jurisdiction and environmental remediation of Naval 
Petroleum Reserve 2 (NPR-2) in California to the Department of the 
Interior. DOE retains the Naval Petroleum Reserve 3 (NPR-3) in Wyoming 
(Teapot Dome field).

                      ELK HILLS SCHOOL LANDS FUND

    The National Defense Authorization Act for fiscal year 1996 
authorized the settlement of longstanding ``school lands'' claims to 
certain lands by the State of California known as the Elk Hills 
Reserve. The settlement agreement between DOE and California, dated 
October 11, 1996, provides for payment, subject to appropriation, of 9 
percent of the net sales proceeds generated from the divestment of the 
Government's interest in the Elk Hills Reserve. Under the terms of the 
Act, a contingency fund containing 9 percent of the net proceeds of the 
sale was established in the U.S. Treasury and was reserved for payment 
to California.
    To date, DOE has paid $300 million to the State of California. The 
first installment payment of the settlement agreement was appropriated 
in fiscal year 1999. While no appropriation was provided in fiscal year 
2000, the Act provided an advance appropriation of $36 million that 
became available in fiscal year 2001 (second installment). The next 4 
installments of $36 million were paid at the beginning of fiscal year 
2002, fiscal year 2003, fiscal year 2004, and fiscal year 2005 
respectively. A seventh payment of $84 million was made in fiscal year 
2006.
    The fiscal year 2008 budget proposes no funding for the Elk Hills 
School Lands Fund. The timing and levels of any future budget requests 
are dependent on the schedule and results of the equity finalization 
process.

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

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

    Senator Dorgan. Finally, we will hear from the Honorable 
Kevin Kolevar, Director of the Office of Electricity Delivery 
and Energy Reliability. Director, you may proceed.

STATEMENT OF KEVIN M. KOLEVAR, DIRECTOR, OFFICE OF 
            ELECTRICITY DELIVERY AND ENERGY RELIABILITY
    Mr. Kolevar. Thank you, Mr. Chairman, members of the 
subcommittee for the opportunity to testify on the President's 
fiscal year 2008 budget request for the Office of Electricity 
Delivery and Energy Reliability.
    The mission of the Office 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.
    The President's budget request includes $114.9 million for 
OE in fiscal year 2008, which represents a 16 percent decrease 
from the fiscal year 2007 operating plan. This request includes 
$86 million for Research and Development activities, $11.6 
million for Operations and Analysis activities and $17.4 
million for Program Direction.
    I will first address the activities of OE's Research and 
Development program. Our request of $86 million for fiscal year 
2008 will fund the following four main activities--high 
temperature superconductivity, visualization and controls, 
energy storage and power electronics, and renewable and 
distributed systems integration. The development of these 
advanced electricity technologies will influence the future of 
all aspects of the electric transmission and distribution 
systems.
    The first activity I would like to highlight is the science 
and development of high temperature superconductivity. 
Superconducting cables transmit electricity through conductors 
of temperatures approaching absolute zero, thus preventing 
resistance to electrical voltage, which allows large amounts of 
electricity to be transmitted over long distances with little 
line loss. Superconductivity, therefore, hold the promise of 
alleviating capacity concerns while moving power efficiently 
and reliably.
    Another critical piece of a resilient and reliable modern 
grid is enhancing the security of our control systems. Our 
visualization and control activity focuses on improving our 
ability to measure and address the vulnerabilities of control 
systems. The research in this area will allow us to detect 
cyber intrusion, implement protective measures and response 
strategies, and sustain cyber security improvements over time.
    Using our understanding from previous energy storage 
demonstration activities, we are researching and developing 
new, advanced higher energy density materials and storage 
devices for utility scale application. The program also focuses 
on research in power electronics to improve material and device 
properties that are needed for transmission level applications.
    Finally, in 2007, the renewable and distributed systems 
integration activity will complete the transition away from 
generation technology activities and will then focus on grid 
integration of distributed and renewable systems in 2008. This 
is a logical step in advancing clean energy resources to 
address future challenges.
    I will now discuss DOE's Permitting, Siting and Analysis 
Office, which is tasked with implementing mandatory EPACT 
requirements to modernize the electric grid and enhance the 
reliability of the energy infrastructure. These requirements 
include analyzing transmission congestion, proposing energy 
corridors for the Secretary's consideration and coordinating 
Federal agency review of applications to site transmission 
facilities on Federal lands. The President's budget requests 
$5.7 million for this Office in fiscal year 2008.
    On August 8, 2006, the Department published its National 
Electric Transmission Congestion Study in compliance with 
section 1221(a) of the Energy Policy Act. This study 
highlighted more than 15 geographic areas where electric 
congestion or capacity constraints exist. The Department has 
announced that, due to the significant public interest in the 
national corridor issues, before the Secretary designates any 
national corridor, he will first issue any designations in 
draft form to facilitate focused review and comment by affected 
States, regional entities, and the general public.
    Another major effort involves the implementation of section 
368 of the Energy Policy Act, which requires the designation of 
energy right-of-way corridors on Federal lands in the 11 
contiguous western States. The agencies plan to publish a draft 
programmatic environmental impact statement for the designation 
of the energy corridors in the late spring of this year and 
will solicit public comments.
    Finally, this Office is preparing to implement DOE's 
responsibilities under the new section, 216(h) of the Federal 
Power Act. Section 216(h) provides for the Department to act as 
the lead agency for purposes of coordinating all applicable 
Federal authorizations and related environmental reviews 
required to site an electro-transmission facility.
    OE's Office of Infrastructure Security and Energy 
Restoration facilitates the protection of the Nation's critical 
energy infrastructure. This Office is responsible for 
coordinating and carrying out the Department's obligations for 
critical infrastructure identification, prioritization, 
protection, and national preparedness within the energy sector. 
The President's 2008 budget request includes $5.9 million for 
this Office.
    In times of declared emergencies, this Office coordinates 
Federal efforts under the National Response Plan to assist 
State and local governments and the private sector in the 
restoration of electrical power and other energy-related 
activities. DOE personnel deployed in regions affected by 
large-scale electrical outages to assist in recovery efforts. 
The Infrastructure Security and Energy Restoration Office also 
works with States to foster greater awareness of the regional 
scope of energy interdependencies and to develop energy 
assurance plans that address the potential cascading effects of 
energy supply disruptions.
    In his 2007 State of the Union Address, the President 
emphasized the importance of continuing to change the way 
America generates electric power and highlighted the 
significant progress we have already made in integrating clean 
coal technology, solar and wind energy, and clean safe nuclear 
energy into the electric transmission system.
    Technology such as power electronics, high temperature 
superconductivity and energy storage hold not only the promise 
of lower costs and greater efficiency but also directly enhance 
the viability of clean energy resources by addressing issues 
such intermittency, controllability and environmental impact.
    We cannot simply rely on innovative policies and 
infrastructure investment. We must also invest Federal dollars 
in the research, development, and deployment of new technology 
in order to improve performance and ensure our national 
security, economic competitiveness, and environmental well-
being.
    Mr. Chairman, this concludes my statement. I look forward 
to any subcommittee questions.
    Senator Dorgan. Dr. Kolevar, thank you very much for your 
statement.
    [The statement follows:]

                 Prepared Statement of Kevin M. Kolevar

    Mr. Chairman and members of the committee, thank you for this 
opportunity to testify on the President's fiscal year 2008 budget 
request for the Office of Electricity Delivery and Energy Reliability.
    The mission of the Office of Electricity Delivery and Energy 
Reliability (OE) is to lead national efforts to modernize the 
electricity delivery system, enhance the security and reliability of 
America's energy infrastructure, and facilitate recovery from 
disruptions to energy supply. These functions are vital to the 
Department of Energy's (DOE) strategic goal of protecting our national 
and economic security by promoting a diverse supply and delivery of 
reliable, affordable, and environmentally responsible energy.
    The President's fiscal year 2008 budget includes $114.9 million for 
OE in fiscal year 2008, which is an 8 percent decrease from the fiscal 
year 2007 request. This includes $86.0 million for Research and 
Development activities, $11.6 million for Operations and Analysis 
activities, and $17.4 million for Program Direction. As DOE is 
currently preparing a spending plan in accordance with the terms of the 
2007 Continuing Resolution, my testimony on the fiscal year 2008 budget 
request reflects a comparison to the administration's fiscal year 2007 
request.
    When Thomas Edison opened the Pearl Street Station in lower 
Manhattan on September 4, 1884, he could hardly have foreseen the role 
electricity would play in the development of American society. Although 
the demand for electric lighting and power initially drove the 
station's construction, electricity ultimately stimulated and enabled 
technological innovations that reshaped America. Today, the 
availability and access to electricity is something that most Americans 
take for granted. Most people cannot describe what it is or where it 
comes from. Yet, it is vital to nearly every aspect of our lives from 
powering our electronics and heating our homes to supporting 
transportation, finance, food and water systems, and national security.
    The Energy Information Administration has estimated that by the 
year 2030, U.S. electricity sales are expected to increase by 43 
percent from their 2005 level. Although this is a positive indicator of 
a growing economy, it is also a significant amount of new demand on an 
electricity infrastructure that is already stressed and aging. With 
this in mind, OE's fiscal year 2008 budget request reflects a 
commitment to implement the directives of the Energy Policy Act of 2005 
(EPACT), support research of breakthrough technologies, and coordinate 
Federal response to temporary disruptions in energy supply to ensure a 
reliable and secure electricity infrastructure for every American in 
the coming decades.
    Meeting our future electricity needs will not be solved by focusing 
only on expanding our generation portfolio or on energy conservation. 
Perhaps the greatest challenge today, as it was in Edison's time, is 
building the elaborate network of wires and other facilities needed to 
deliver energy to consumers reliably and safely.

                        RESEARCH AND DEVELOPMENT

    The fiscal year 2008 budget request of $86.0 million for the 
Research and Development (R&D) program within OE funds 4 activities: 
High Temperature Superconductivity; Visualization and Controls; Energy 
Storage and Power Electronics; and Renewable and Distributed Systems 
Integration.
    Over the past 18 years, DOE has invested more than $500 million in 
the science and development of high temperature superconductivity. 
Superconductivity holds the promise of addressing capacity concerns by 
maximizing use of available ``footprint'' and limited space, while 
moving power efficiently and reliably. It also supports advanced 
substation and interconnection designs that allow larger amounts of 
power to be routed between substations, feeders, and networks using 
less space and improving the security and reliability of the electric 
system.
    Today, the High Temperature Superconductivity activity continues to 
support second generation wire development as well as research on 
dielectrics, cryogenics, and cable systems. This activity is being 
refocused to address a near-term critical need within the electric 
system to not only increase current carrying capacity, but also to 
relieve overburdened cables elsewhere in the local grid. The 
superconductivity industry in the United States is now at the critical 
stage of moving from small business development to becoming a part of 
our manufacturing base.
    Enhanced security for control systems is critical to the 
development of a reliable and resilient modern grid. The Visualization 
and Controls Research & Development activity focuses on improving our 
ability to measure and address the vulnerabilities of controls systems, 
detect cyber intrusion, implement protective measures and response 
strategies, and sustain cyber security improvements over time. The 
fiscal year 2008 request reflects an increase of $7.75 million related 
to support this effort.
    This activity is also developing the next generation system control 
and data acquisition (SCADA) system that features GPS-synchronized grid 
monitoring, secure data communications, custom visualization and 
operator cueing, and advanced control algorithms. Advanced 
visualization and control systems will allow operators to detect 
disturbances and take corrective action before problems cascade into 
widespread outages. The need to improve electric power control systems 
security is well-recognized by both the private and public sectors.
    The Energy Storage and Power Electronics activity proposes an 
increase of $3.80 million in fiscal year 2008 to: (1) leverage 
understanding gained from previous Energy Storage demonstration 
activities to research and develop new advanced higher energy density 
materials and storage devices for utility scale application; and (2) 
focus on enhanced research in Power Electronics to improve material and 
device properties needed for transmission-level applications.
    Large scale, megawatt-level electricity storage systems, or 
multiple, smaller distributed storage systems, could significantly 
reduce transmission system congestion, manage peak loads, make 
renewable electricity sources more dispatchable, and increase the 
reliability of the overall electric grid.
    The Renewable and Distributed Systems Integration Research & 
Development activity completed the transition away from generation 
technology activities in fiscal year 2007 and will focus on grid 
integration of distributed and renewable systems in fiscal year 2008, 
which is a logical step in advancing clean energy resources to address 
future challenges.

                    PERMITTING, SITING, AND ANALYSIS

    In fiscal year 2008, the Department is requesting $5.7 million for 
the Permitting, Siting, and Analysis (PSA) Office within the Operations 
and Analysis subprogram, which implements mandatory requirements set by 
EPACT to modernize the electric grid and enhance reliability of the 
energy infrastructure by contributing to the development and 
implementation of electricity policy at the Federal and State level. 
The Permitting Siting and Analysis Office is also tasked with analyzing 
transmission congestion, proposing energy corridors for the Secretary's 
consideration, and coordinating Federal agency review of applications 
to site transmission facilities on Federal lands.
    The Department published its National Electric Transmission 
Congestion Study on August 8, 2006, in compliance with section 1221(a) 
of EPACT, which requires DOE to prepare a study of electric 
transmission congestion every 3 years. The study named more than 15 
areas of the Nation with existing or potential transmission congestion 
problems. The study identifies Southern California and the East Coast 
from New York City to Washington, DC, as ``Critical Congestion Areas,'' 
because transmission congestion in these densely populated and 
economically vital areas is especially significant.
    During the development of the study, which relied on extensive 
consultation with States and other stakeholders, the Department 
provided numerous opportunities for discussion and comment by States, 
regional planning organizations, industry, and the general public. OE 
intends to supplement the tri-annual Congestion Studies study by 
publishing annual progress reports on transmission improvements in the 
congested areas.
    Section 1221(a) also requires the Secretary to issue a report based 
on the August 8 Congestion Study. In this report, if consumers in any 
geographic area are being adversely affected by electric energy 
transmission capacity constraints or congestion, the Secretary may, at 
his discretion, designate such an area as a National Interest Electric 
Transmission Corridor (National Corridor).
    Because of the broad public interest in the implementation of 
section 1221(a), the Department invited and received over 400 public 
comments on the designation of National Corridors. The Department 
continues to evaluate these comments, and has not yet determined 
whether, and if so, where, it would be appropriate to propose 
designation of National Corridors. Prior to issuing a report that 
designates any National Corridor, the Department will first issue a 
draft designation to allow affected States, regional entities, and the 
general public additional opportunities for review and comment.
    Another major effort involves the implementation of section 368 of 
EPACT, which requires the designation of energy right-of-way corridors 
on Federal lands in the 11 contiguous Western States. An interagency 
team, with DOE as the lead agency, conducted public scoping meetings 
concerning the designation of corridors in each of the 11 contiguous 
Western States. The agencies plan to publish a draft Programmatic 
Environmental Impact Statement for the designation of the energy 
corridors in late spring of 2007 and will solicit public comments.
    In August 2006, DOE and 8 other Federal agencies signed a 
Memorandum of Understanding (MOU) that clarifies the respective roles 
and responsibilities of Federal agencies, State and tribal governments, 
and transmission project applicants with respect to making decisions on 
transmission siting authorizations. DOE is preparing to implement its 
responsibilities under the new section 216(h) of the Federal Power Act 
to coordinate with these 8 other Federal agencies to prepare initial 
calendars, with milestones and deadlines for the Federal authorizations 
and related reviews required for the siting of transmission facilities. 
DOE will maintain a public website that will contain a complete record 
of Federal authorizations and related environmental reviews and will 
work closely with the lead Federal NEPA agency to encourage complete 
and expedited Federal reviews. DOE is currently considering the 
procedures it will use in carrying out this program.

             INFRASTRUCTURE SECURITY AND ENERGY RESTORATION

    The President has designated the Department of Energy as the Lead 
Sector Specific Agency responsible for facilitating the protection of 
the Nation's critical energy infrastructure. The Infrastructure 
Security and Energy Restoration (ISER) activity of the Operations and 
Analysis subprogram is responsible for coordinating and carrying out 
the Department's obligations to support the Department of Homeland 
Security in this important national initiative. The fiscal year 2008 
request is for $5.9 million in funding for Infrastructure Security and 
Energy Restoration within the Operations and Analysis subprogram.
    The Infrastructure Security and Energy Restoration activity 
fulfills DOE's responsibilities as defined in Homeland Security 
Presidential Directives 7 and 8 for critical infrastructure 
identification, prioritization, and protection and for national 
preparedness. In times of declared emergencies, this Office also 
coordinates Federal efforts under the National Response Plan to assist 
State and local governments and the private sector in the restoration 
of electrical power and other energy-related activities.
    In the event of a large-scale electrical power outage caused by 
natural disasters such as hurricanes, ice storms, or earthquakes, DOE 
personnel will deploy to the affected region to assist in recovery 
efforts. During the 2005 hurricane season, DOE was specifically 
deployed to respond to 5 hurricanes: Dennis, Katrina, Ophelia, Rita and 
Wilma. In such instances, DOE coordinates all Federal efforts to assist 
local authorities and utilities in dealing with both measures to 
restore power and to resolve other issues related to fuel supply.
    The Infrastructure Security and Energy Restoration Office also 
fosters greater awareness of the regional scope of energy 
interdependencies by working with States to develop energy assurance 
plans that address the potential cascading effects of energy supply 
problems. Exercises are conducted with States and Federal partners to 
help sharpen this focus. Finally, staff work with States and DHS in 
emergency situations to help resolve issues brought on by temporary 
energy supply disruptions, such as the winter 2007 propane shortage in 
Maine.

                               CONCLUSION

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

                          FOSSIL ENERGY BUDGET

    Senator Dorgan. Let me begin with a couple of questions and 
then I'll call on my colleagues.
    First, Secretary Shope, the ability to use the abundant 
supplies of coal that we have in this country depends a lot on 
the research and development capability in the fossil energy 
R&D programs. I was looking at your numbers and if you take out 
the 25 percent for FutureGen and then take out the strategic 
petroleum reserve money, isn't it then the case that the 
administration budget is proposing less money for fossil energy 
R&D?
    Mr. Shope. Well Senator, we do take a portfolio approach to 
not only the coal aspect of the program, the entire fossil 
energy program, as I mentioned, focusing on energy security 
both in the domestic economic impacts as well as economic 
opportunities that it provides. So when we talk about our coal 
budget, we really are looking at a $426 million coal budget 
going forward. That's the amount of money we will be advancing 
in 2008.
    Senator Dorgan. But isn't that a substantial reduction?
    Mr. Shope. Compared to our 2006 budget, we had $366 million 
that was applied in 2006.
    Senator Dorgan. Applied by 2007 numbers?
    Mr. Shope. In 2007, we're going to be applying $425 
million.

                             COAL RESOURCES

    Senator Dorgan. My point was not about your portfolio 
approach, admirable as that might be. My point was with respect 
to the use of our coal resources, abundant resources that can 
probably only be used in the future, in the way that many of us 
would like them to be used, if we, through research and 
development, unlock the mystery of this technology to be able 
to sequester carbon and burn coal in a way that's clean, 
doesn't just spoil our atmosphere and so on. My question is, if 
you remove SPRO and remove FutureGen, isn't the case, with 
respect to the issue of being able to use our coal resources 
and able to devote research and development funds, that there 
is a substantial reduction there?
    Mr. Shope. If you're looking at strictly the MMG research 
and the research and development, our fuels and power systems, 
that's correct. There's a decrease in there but there is an 
increase again--we've looked at our program and said, what is 
it that we need to accomplish our goals?
    Senator Dorgan. I understand that but then how does one 
justify at this moment--it seems to me that we've come to an 
important intersection here in energy policy. Some regions have 
coal resources, others have oil, nuclear power and so we're 
talking about a lot of issues here. We have hundreds of years 
of coal resources. We can only use them, in my judgment, if 
we're able to make the investment to unlock the mystery of how 
to avoid putting effluents into the air and causing all kinds 
of issues. How do we use research and development to get to 
that point? So how does one justify coming to this 
intersection, saying to us, ``Oh, by the way, with respect to 
that account, we want to cut funding.''
    Mr. Shope. Well, Senator, I agree with your statements 
about that. That's exactly what we need to do is to move 
forward and we're looking for a technology approach forward. I 
would say to you that the research and development--we still 
have a very active, vibrant portfolio in our research and 
development area. But we also are looking forward to moving 
these--the technologies out, getting them applied. So that's 
why we do have the FutureGen project going forward. It's part 
of our--that's actually a research project in and of itself so 
all the money that we are using in FutureGen are research 
dollars.
    But in addition, we're trying to look at carbon capturing 
storage, the issue that is really preeminent in our program and 
saying we need to move forward and get these technologies 
deployed so we'll increase in our sequestration budget as well, 
to bring this to fruition.
    Senator Dorgan. You know, the problem is, it's never much 
fun to inquire of someone who I think, in a less guarded 
moment, would probably say, I understand your point. We should 
be asking for more money but this is the President's budget. 
I'm here to support the President's budget. That's what I'm 
paid for. So I can't get, perhaps, as candid an answer as I 
would hope on whether it makes a lot of sense at this 
intersection, to cut that portion of the budget. It just seems 
nuts to me. With all due respect, if we want to use that 
resource, we're going to have to find ways to be able to use it 
and unlocking those ways, in my judgment, would require some 
directed funding to our priorities. We're going to do that 
rather than cutting funding.

             ENERGY EFFICIENCY AND RENEWABLE ENERGY BUDGET

    But I understand your answers, Mr. Secretary. I don't mean 
to badger you. Let me ask Secretary Karsner a similar type of 
question. You and I visited the Renewable Energy Laboratory at 
Golden, Colorado. I was enormously impressed by it. I, of 
course, have a great interest in all of these accounts and a 
good many of them are going to be decreased, as you know and I 
suspect if I asked you the same question, I'll get an answer--
--
    Mr. Karsner. I support the President's budget.
    Senator Dorgan. So is there any chance after the hearing, 
we could have a cup of coffee and find out where I could ask 
you the same questions? But more seriously, you know, we here 
in Congress added money to this bill, as you know $300 million. 
When you take that with the 2007 level and then the plus up of 
$300 million, the 2008 request, in virtually every area, with, 
I think, maybe two exceptions, is going to be a cut in funding 
2008 versus 2007.
    We're talking, on the authorizing committee, Senator 
Bingaman, Senator Domenici, myself and Senator Craig, and 
others about this notion of how to put together another follow-
on energy bill and what parts are necessary, so we understand 
the urgency. It seems to me there is a confluence of events 
here with respect to what has become sort of a consensus on 
climate change, our vulnerability with respect to oil and 
foreign oil. There is a greater urgency to these issues and it 
seems to me out of step with that greater urgency to see 
proposed reductions in spending in most of the accounts dealing 
with renewable and energy efficiency issues. Would you agree 
with me, Secretary Karsner?
    Mr. Karsner. In substance, in the character of what you're 
saying, I do agree. I think the differential is largely 
accounted for by the idiosyncrasies of the budgeting process. 
This 2008 budget originated more than 2 years ago, just as I'm 
currently preparing a 2009 budget 2 years into the future for 
an administration I won't be a part of. Technology, of course, 
moves much faster, as do these priorities, and when we had the 
opportunity for the spend plan, which is really the first 
budget that I've had the opportunity to exercise influence 
over, it does very accurately reflect our priorities in a 
contemporaneous, real-time snapshot of the portfolio approach 
and there is a heavier emphasis on efficiency.
    Senator Dorgan. I think it is important to note that the 
Congress, on a bipartisan basis, in putting together the fiscal 
year 2007 appropriation bills, combined, I believe, 10 bills 
into one omnibus because we were required to do that. 
Republicans and Democrats together said ``You know what? We're 
under funded in the renewables area and so we added to all of 
these accounts.'' There are priorities that come from the 
administration and then priorities that come from the Congress 
and we will try to work our will in terms of what we believe 
the right priorities will be. I mentioned the renewable energy 
and fossil fuel accounts and I think it's important to 
understand that there is a renewed urgency here with respect to 
both and so your area is going to be critically important to 
us. We need to get out of your area some very significant 
opportunities and changes for the future.

                         NUCLEAR ENERGY BUDGET

    Secretary Spurgeon, can you tell me how the $114 million 
for shared costs of efforts to reduce barriers to deploy 
nuclear power, would be spent? I don't quite understand from 
the description how that would be dispersed.
    Mr. Spurgeon. It's spent through two consortia. The NuStart 
Consortia, which consists of 10 electric generating companies 
plus two manufacturers and the Dominion Power Group, which has 
one utility and manufacturer and architect engineers associated 
with it. The whole objective of the Nuclear Power 2010 Program 
is to remove the barriers to entry of these first nuclear 
powerplants into the marketplace. So what we are doing is we're 
spending money on design standardization costs. We're spending 
money in design standardization and in preparing the combined 
operating licenses for two different types of reactors, one a 
boiling water reactor and the second, a pressurized water 
reactor.
    So it's to get the first ones through the process so that 
those that follow can reference the first ones and shorten the 
time scale and thus, cost for introducing nuclear power in the 
United States.

              ELECTRICITY DELIVERY TECHNOLOGICAL ADVANCES

    Senator Dorgan. I don't know as much about that area. 
That's why I asked the question. I will submit further 
questions as well, just so that I understand more. And, 
finally, then I will turn to my colleagues.
    Director Kolevar, it seems to me that we have not seen any 
substantial change in the technology of delivering electricity 
for perhaps three-quarters of a century. We string lines and we 
run electricity over the lines and we run these lines through a 
corridor. I know some companies are working on new 
technologies--composite conductors, to name one, and there are 
others. If we could see dramatic advances there, we might be 
able to use existing corridors to double or triple the 
capability of moving electricity to where it's needed and 
that's part of what your investment is about, I understand.
    With what hope can we approach a future with new 
technologies for the transmission of electricity? Thus far, we 
have had very few advances in those areas.
    Mr. Kolevar. You're correct, Mr. Chairman. It is certainly 
challenging space. There have been a variety of new 
technological advances that we have not seen penetrate the 
system in any significant fashion. I do believe the opportunity 
is there for a couple of reasons. One, the system today is 
increasingly stressed and in two parts of the country, we 
either came close to or experienced blackouts. I think that 
will drive greater technological penetration of transmission 
scale applications and distribution scale applications that can 
enhance reliability.
    I also think it's the case that the work that is going on 
with the Federal Energy Regulatory Commission (FERC) and the 
Nuclear Regulatory Commission (NRC) in pushing new mandatory 
reliability standards will help some of these technologies to 
be pushed into the market.

           ELECTRICITY DELIVERY AND ENERGY RELIABILITY BUDGET

    Senator Dorgan. Director Kolevar, I'll give you the 
opportunity to learn from Secretary Shope on this subject but 
you're probably not happy to see a $132 million research and 
development budget drop to $86 million. I assume that this is 
probably not advancing our pursuit of new technologies.
    Mr. Kolevar. We were able to leverage a number of synergies 
in the program where we saw the drop that you reference from 
fiscal year 2006 to 2008. Mr. Chairman, I would also note that 
the majority of that reduction was scheduled for phase-out. It 
was in some reciprocating engine work and in some combined heat 
and power work where we had achieved or came very close to 
achieving some pre-established milestones. There was a general 
thought that when we achieve what we set out to achieve that we 
ought to then discontinue that project and focus on some other 
applications.
    Senator Dorgan. Would you prefer at least the minimum level 
of funding for the pursuit of research and development for new 
technology in electric transmission?
    Mr. Kolevar. I'm sorry, I don't understand your question. 
At the minimum 2008 level?
    Senator Dorgan. At least in the pursuit of research and 
development and in the area where there has been so little 
progress for so long and where so much is necessary for us to 
be able to produce in one area and transmit to another. I was 
wondering whether you would prefer level funding, at a minimum 
level, for this function of research and development.
    Mr. Kolevar. Yes, sir. Level funding at a minimum would be 
appreciated.
    Senator Dorgan. Thank you. Senator Domenici.
    Senator Domenici. Well, Mr. Chairman, you succeeded.
    Senator Dorgan. I did. I didn't want to mention that but I 
did.
    Senator Domenici. Three witnesses and three shots but you 
got there. Let me make an observation first. Obviously, he's 
sitting in the chair and I'm sitting next to him as ranking 
member. That got turned around just a few months ago but I 
think that it should be--it would be appropriate for me to 
indicate to the four of you that I can recall your coming 
before the subcommittee to get confirmed for your jobs and I 
was obviously sitting in this position with my friend and 
ranking member--who came before the Energy and Natural 
Resources Committee, which frequently gets confused with this 
subcommittee. This isn't the subcommittee.
    And I was quite impressed when we finished getting all of 
you, the four of you, that this late in this administration, we 
were going to get such qualified people. I openly expressed 
myself as saying that the Secretary of Energy and his Under 
Secretary, Clay Sell, have done some exciting work in getting 
the four of you to take these jobs. And I repeat that. I hope 
you're as enthused now as you were when you told us why you 
would take this job, knowing full well that whether it is a 
Republican or a Democrat, there is a big chance you will not be 
around for 5 or 6 years to see your dreams achieved.
    I do believe I was right in my assessment about you. Your 
work has been exciting. I think you are challenged even though 
you had a terrible start with the lousy work that the United 
States Senate did and we were in charge, not them, in not 
getting an appropriation bill and then throwing upon you the 
kind of appropriation that we did and then you having to 
address questions like you are here, when this appropriation 
process is all out of focus for the year 2005, 2006, 2007, and 
2008. But I commend you.

                     PREVENTING REGIONAL BLACKOUTS

    Now I want to just start with you on the right hand side. 
When we passed the energy bill, the authorizing bill, those of 
us who were very thrilled with the bill had a check-off list 
and almost everybody had one item that said that if this works, 
it should not be too long before America can say, we will not 
have any more regional blackouts in our grid across the 
country. I didn't ask you, Director Kolevar, whether I could 
make that statement. We thought that's what we did. I'm sure 
Senator Craig said the same thing. He had it on his list. What 
we had done is created authority in you so that we should avoid 
the pitfalls that cause the grid failures.
    Now quickly, without too much elaboration, did we give you 
the right authority and are you pursuing--is this being pursued 
with vigor so that what we told the American people may become 
a reality in terms of the stability of the grid system?
    Mr. Kolevar. Yes, sir, I would say that you did. We believe 
that the provisions contained in the Energy Policy Act of 2005, 
when executed, will dramatically assist reliability of the 
overall transmission and distribution systems.
    Senator Domenici. I want to say to you, I think they're 
right and I certainly would not want you to operate under this 
law if it is deficient. If it is, I think you ought to tell us 
because we don't want you to go 4 years or so trying to give us 
stability in the grid and then tell us, the law was short. You 
got it?

                         LOAN GUARANTEE PROGRAM

    Mr. Kolevar. Yes, sir.
    Senator Domenici. Now let me move over to Secretary 
Karsner.
    Secretary Karsner, I'll try to hurry up but I can't resist. 
If you or any of the other witnesses are talking about a budget 
and you're talking about the amount of money the Federal 
Government is putting into an account and you look to the 
energy bill and found that there is a section that provides for 
loan guarantees for new technology or technologies that 
implement this act, would it be fair to think that you would 
assume that maybe some loan guarantees would be added to your 
portfolio so that more money could be spent by the 
entrepreneurs and business people that took advantage of this 
law?
    Mr. Karsner. That would be fair.
    Senator Domenici. Let me just say, that is fair and that 
is--the chairman knows that and he was not talking against that 
in his questions but the truth of the matter is and Senator 
Craig, would you believe that we still do not have a packaged 
set of regulations from the Department of Energy----
    Senator Craig. Twenty months after the passage of the act. 
Yes, I'm counting, month by month, week by week, day by day.
    Senator Domenici. No, I'm telling you that I understand 
that every time we turn around, we run into another stalwart 
and they are stalwarts--in this administration that say, I 
don't like loan guarantees and therefore, they get them 
stalled. We write them. They pass judgment based on their 
existence in life and say, well, I don't like them. I submit 
and Mr. Chairman, that on loan guarantees, when we're finished, 
even though we're not an authorizing committee, that we ought 
to ask our staff how to write loan guarantee provisions in this 
bill that if signed by the President, we will be rid and 
finished with them having any judgment with reference to how to 
write the loan guarantee bills. And I'm going to try to do 
that, if you would help, we'll do it bipartisan and get it 
written and get that out of the way so loan guarantees will be 
finished in terms of having to look at authorizing language. 
Would that help you and would that help you, Secretary Shope, 
in your part of this law, too?
    Mr. Shope. The loan guarantee provisions are beneficial to 
our program.
    Senator Domenici. Not yours; Secretary Karsner?
    Mr. Karsner. They are essential to the growth of 
commercialization in our----
    Senator Domenici. What about you, Secretary Spurgeon?
    Mr. Spurgeon. Essential.
    Senator Domenici. Even in the big nuclear program, you need 
it?
    Mr. Spurgeon. Yes, sir.
    Senator Domenici. Oh and the administration loves the 
nuclear program. Have they said anything to you as to why we 
can't get the loan guarantees going?
    Mr. Spurgeon. Senator Domenici, the administration--the 
Department of Energy is moving very aggressively to implement 
the loan guarantee program. Now that we have the requisite 
authorization to move forward with creating the office, which 
was established, which was received 1 month ago. It is a matter 
of public record that the Department has prepared a notice of 
proposed rulemaking and that has been received and is under 
review at the Office of Management and Budget as of March 16.
    Senator Domenici. So you must be part of driving this 
thing?
    Mr. Spurgeon. Yes, sir.

                               COAL USAGE

    Senator Domenici. Well, that's good. I like the way you 
drive things. It's apt to get done. It's very important that 
you understand what's going on or it won't happen. We'll be 
through another Congress.
    I have one last question to ask of the Secretary who is in 
charge of coal. People think that the United States is going to 
stop using coal because of environmental problems. Everything I 
read about the future says that there will be more coal used in 
the next decade than this previous--this decade past. Is that 
the assumption you're operating under?
    Mr. Shope. Yes, it is, Senator. I would agree with that.
    Senator Domenici. And is it not true that we must convert 
coal to things like liquids and other usable products and that 
requires a lot of technology and innovative--and money to be 
invested?
    Mr. Shope. It does, Senator and it is part, again, of the 
President's alternative fuel strategy to include clean coal to 
liquids technologies, to make it part of our strategy. So yes, 
the entire use of coal is essential to our Nation's energy 
security.

                   GLOBAL NUCLEAR ENERGY PARTNERSHIP

    Senator Domenici. My last question is, who knows anything 
about the GNEP Program? Secretary Spurgeon, how much money did 
the President put in to start this program?
    Mr. Spurgeon. To start it in 2008?
    Senator Domenici. Yes.
    Mr. Spurgeon. Four hundred and five million dollars, sir.
    Senator Domenici. That's what you are here asking us for.
    Mr. Spurgeon. Yes, sir.
    Senator Domenici. That won't get you ready in terms of 
specifications?
    Mr. Spurgeon. Yes, sir. That gets us to the point where we 
can define a technology pathway forward with sufficient 
information so that we're not guessing at what the right answer 
might be. We need to offer it to the Secretary for the 
Secretary to make a decision on a pathway forward and you need 
to inform that decision by good information from industry, from 
our national laboratories and from our universities.
    Senator Domenici. Thank you very much.
    Senator Dorgan. Senator Craig.
    Senator Craig. Thank you, Mr. Chairman. I didn't make an 
opening statement so let me react not unlike the ranking member 
has, by agreeing certainly with the premise of your opening 
statement as it relates to our energy future and where we need 
to go and what we've done to date and what I hope we will do in 
the future.
    Let me also say that last Wednesday, I stood on the top of 
a reactor core, EBR-1. For those of you who don't know what 
EBR-1 was, it's now an historic site. I didn't think we'd been 
involved in the nuclear business long enough to describe it as 
a historic event but it was, is an historic site so designated 
by President Lyndon Johnson. EBR-1 was first constructed in 
1949. It started producing power in 1951. It lit the first 
light bulb ever powered by nuclear generated electricity in 
1951 out on the high deserts of Idaho.
    When I was standing on top of that reactor core, Dennis, I 
thought, oh, if we had only continued from that point forward 
at the rate we were moving at that time. We might not even be 
so dependent upon the Middle East today or anybody else for 
that matter and my guess is, we wouldn't be generating 
electricity at the rate of only 20 percent total nuclear. It 
would be substantially greater than that and we'd have the 
waste problem solved a decade or so ago. But we stalled out 
politically. We simply--we were fearful of where we were even 
though the technology argued there was nothing to fear. We've 
changed that. We've adjusted and thank goodness America is 
awakening to a new reality and that new reality is embodied in 
the Energy Policy Act of 2005 that deals primarily with power 
generation, in something that the chairman and I introduced 
just recently that deals primarily with transportation sector 
fuels, the SAFE Act and all I am saying to all of you in your 
presentation today is, too many good ideas and not enough 
money.
    Because we can help drive industry in the right direction 
by creating some of the safeguards, some of the buffers and 
some of the incentives. But the marketplace is doing a 
marvelous job at this moment. I say this publicly and loudly, 
even though I don't like saying it. The good news of last year 
is that we got $3 gas. We may get it again this summer. The bad 
news is we got $3 gas but the good news, is it's probably 
creating and generating in the marketplace, one of the greatest 
resurgent and investment in energy than the total energy 
portfolio ever in the history of our country. And that's good 
because I find it shameful of a great power to be so reliant 
upon those who would jerk our diplomatic chain and change our 
foreign policy in a way simply so that we can continue to serve 
our habits and I'm talking about hydrocarbon habits.

                   NEXT GENERATION NUCLEAR POWERPLANT

    Now, having said that, let me switch back to EBR-1 or 
should I fast-forward to GNEP and NGNP because that's really 
where we are today. Since the time that Pete Domenici and I and 
Jeff Bingaman and everybody else on that committee crafted 
EPACT, 33, 34 nuclear reactors on the drawing board? What is it 
today, Dennis?
    Mr. Spurgeon. The number can be either but it's either 33 
or 34.
    Senator Craig. Somewhere in that range. Now, let me say 
this to you as a statement because I don't disagree with any 
direction you're headed in. I just wish we could head there a 
little faster. You're going to find too many of us on this--not 
too many of us on this subcommittee would in any way disagree 
with you as it relates to nuclear power and the role it plays 
and the value of it in the future--our security, our 
competitiveness, reduction of greenhouse gases--all of that. 
And I would suspect that you would not hear any complaints from 
myself, Senator Domenici or the chairman regarding the strong 
emphasis you've placed on the budget for securing nuclear power 
through your R&D efforts in the advanced fuels cycle initiative 
or NGNP or GNEP.
    My only advice to you would be that you remain flexible. In 
dealing with both chambers, both parties as it relates to a 
broad goal that we all seem to support. The resurgence of 
nuclear power in the United States, I think, is upon us. I'm 
not sure where a new administration will take us but I'm 
confident that the two committees of authority in the House and 
the Senate, in a bipartisan way, will advance the cause we 
started with the passage of EPACT.
    However, you may find that the narrow goals of GNEP that 
must follow may not be pursued as aggressively as some of us 
might like. Instead, we all need to keep focused on moving the 
ball forward for nuclear and maintaining the momentum of what 
we've done. I think you understand what I'm saying. If the 
nuclear budget remains whole but it doesn't reflect exactly 
what any one of us might ask for, we can all agree that the 
nuclear resurgence continues and will be as a positive step 
forward for this country. My guess is that we'll tinker around 
the edges and we may add a few dollars here or there to all of 
your budgets. They are woefully inadequate.
    I'm willing to shift the priorities in the entire budget to 
give you greater ability in your budget. I am just growing so 
very tired, as the American people are, of finding this great 
Nation jerked around by puppet governments around the world, 
largely because of a dependency we've now developed and a lack 
of vision decades ago in where we needed to get.
    Thank you all for your presentations today. You are very 
skillful in doing it. If the Secretary had been here, he'd have 
got 10 minutes. You each got 10 minutes. So we were glad to see 
you and not the Secretary.
    Because I think it was important that all that you said be 
said for the sake of the country and the policy you project. 
Thank you. Thank you, Mr. Chairman.
    Senator Dorgan. Senator Craig, thank you very much. Senator 
Allard?

                 NAVAL OIL SHALE RESERVE CERTIFICATION

    Senator Allard. Thank you, Mr. Chairman. Thank all of you 
for your testimony. Secretary Shope, you're familiar with the 
naval oil shale reserve legislation and the agreement that was 
worked out by the Department of Energy and the Department of 
the Interior when there was a transfer of management of that 
particular property in Colorado?
    Mr. Shope. I am, yes sir.
    Senator Allard. My understanding is that the Department of 
the Interior is ready to certify that you're not ready to 
certify because you're waiting for a cleanup to be completed. 
What is your estimate it is going to cost to finish that 
cleanup?
    Mr. Shope. Again, Senator, the reserve has been transferred 
to the Department of the Interior, so actually----
    Senator Allard. I'm sorry. I got that turned around.
    Mr. Shope. Yes, sir.
    Senator Allard. I apologize for that.
    Mr. Shope. So we actually will wait until the Department of 
the Interior certifies the plant.
    Senator Allard. They need to certify and I've been told 
that we're waiting for your certification but you're not 
willing to give that until they have cleaned up the Anvil Point 
facility.
    Mr. Shope. Senator, I'll have to take that particular 
question for the record because that's inconsistent with what 
my current knowledge is of that matter, Senator.
    Senator Allard. Okay, well that's what we've been told by 
the Department of Energy is that you're waiting for the cleanup 
of that and we've been estimated that the cleanup is around $13 
million at the high end. It's not anticipated to go over $13 
million--that's a high figure and yet, there is revenue being 
generated from that property now. I've been told that equals 
about $70 million. The legislation directs that the revenue 
from the natural resources on that property be returned to the 
local communities and the State of Colorado and you have $13 
million of outside costs and you're holding $70 million in 
there that you're not redistributing back to the State of 
Colorado.
    It seems to me that there ought to be more of a concerted 
effort to get that return. Why are you sitting on that money?
    Mr. Shope. Well again, Senator, the Department of the 
Interior has the lead on it. We would certify after their 
certification--and you're indicating----
    Senator Allard. According to our information, they have 
certified it.
    Mr. Shope. And that has not been made known to me but I 
will immediately look into it and address that in the record.
    Senator Allard. They had indicated--they indicated to my 
staff that they are willing to certify. The legislation 
requires joint certification, which means the Department of 
Energy also has to certify. So that's our understanding and I 
would hope that you would get back to us because that's 
important. For the life of me, I don't understand why you're 
sitting on $70 million when the maximum estimate on cleanup on 
that is around $13 million. Heck, even if you wanted to raise 
your estimate to $20 million, if you could get the other $50 
million or so to the local communities because they're being 
impacted right now because of the oil shale development that is 
happening in that particular area of the State. So they need 
that to meet their challenges that they are facing with that 
development. So, we'll continue to stay in touch with you on 
that and if you'll respond back. We'll get a formal question to 
you and then if you could respond back to us, we'd appreciate 
it.
    Mr. Shope. Absolutely, Senator.
    [The information follows:]

                         Anvil Points Mine Site
    When the management of Anvil Points mine site was transferred to 
the Department of the Interior there was environmental remediation work 
that needed to be completed. The Department of the Interior assumed 
responsibility for the cleanup of Anvil Points; however, the Secretary 
of Energy must approve the cleanup plan.
    To the best of our knowledge the Department of the Interior has 
completed a feasibility study and the detailed engineering plan. The 
final cleanup plan appears to be in draft form; however, the cleanup 
plan has not been submitted to the Department of Energy for approval.
    It is also our understanding that part of the cleanup plan involves 
removal of the mine access road. However, before this can happen the 
U.S. Geological Survey must get into the mine and remove drilling cores 
that have been stored there.
    The Department of Energy remains ready to review and approve the 
Anvil Points environmental remediation plan once it is submitted by the 
Department of the Interior.

              PROGRAM ASSESSMENT RATING TOOL (PART) SCORES

    Senator Allard. Also, you're familiar with the PART Program 
of the President. I suppose all of you have done that. It's 
where you measure--you put goals out there that are measurable 
and then you are evaluated. Actually, the Department of Energy 
has done better than most of the agencies and I want to 
compliment you on that.
    But there are six areas in which I think there are some 
issues that need to be addressed and I'm just going to call 
them quickly to your attention. In the Department--and I'm not 
calling these up because I support them but what I want to make 
sure is that the taxpayer dollars that are going in there are 
creating results. There are two programs that have been 
measured and this is done by the Office of Management and 
Budget (OMB), by the way. There are two areas where you have 
been rated as ineffective. I don't know who has jurisdiction 
over the Natural Gas Technology Program.
    Mr. Shope. I do, Senator.
    Senator Allard. Why is that rated ineffective?
    Mr. Shope. It's rated ineffective based upon the other 
priorities within the Office of Fossil Energy. So it's 
ineffective in the sense of--not that the program is 
mismanaged, not that there has been any inappropriate 
activities or misspending of money----
    Senator Allard. What's happening to the money they're 
getting?
    Mr. Shope. It's now being effectively utilized, all the 
dollars have been and our reviews demonstrate that. What the 
ineffectiveness refers to is the balance of putting money 
toward natural gas research and development in light of the 
high costs, the high price of hydrocarbons as they are being 
received today.
    Senator Allard. Is that a correctable problem?
    Mr. Shope. Well, we corrected it by terminating the 
program.
    Senator Allard. Okay, so it's terminated.
    Mr. Shope. At the end of 2008.
    Senator Allard. Okay, very good. All right, what about oil 
technology? That's rated as ineffective.
    Mr. Shope. Again, the same thing. This is not ineffective 
in the sense of mismanagement or any inappropriate--it's a 
matter, is this--is the taxpayer dollars being best spent by 
investing in this research in 2008?
    Senator Allard. It will be terminated?
    Mr. Shope. Yes.
    Senator Allard. It will be terminated. All right. Now there 
are some that don't demonstrate any results. It's all--there is 
the National Nuclear Infrastructure Program and they haven't 
bothered to set any goals at all or measure them so why haven't 
they bothered to do that? I guess that's you, Secretary 
Spurgeon.
    Mr. Spurgeon. I think that's another program within the 
Department that's being referred to there, sir.
    Senator Allard. And that will be terminated or what?
    Mr. Spurgeon. I'm not sure which program that is, so. I 
think it's a Defense program.
    Senator Allard. It's called the national nuclear 
infrastructure. If you go on Expectmore.gov on the Internet, 
you'll see it there.
    Mr. Spurgeon. Let me take that for the record for the 
Department, sir.
    [The information follows:]

                     Program Assessment Rating Tool
    The National Nuclear Infrastructure Program Assessment Rating Tool 
(PART) is focused on activities carried out by the Office of Nuclear 
Energy's Idaho Facilities Management and Radiological Facilities 
Management programs at Idaho National Laboratory (INL).
    Performance measures were established for the INL during the fiscal 
year 2005 merger of the Idaho National Engineering and Environmental 
Laboratory (INEEL) and the Argonne National Laboratory-West (ANL-W). 
The National Nuclear Infrastructure PART assessment was completed 
during the fiscal year 2006 budget formulation process, concurrent with 
activities associated with creation of INL.
    The overall rating of ``Results Not Demonstrated'' is not due to 
the lack of performance measures, but the inability to demonstrate 
results against the established performance measures during the short 
period of time between the establishment of the new laboratory and 
completion of the PART assessment. The Department continues to track 
its performance against cost and schedule baselines. Further, the 
Department employs a Facility Operability Index performance measure 
that assesses the readiness of the infrastructure to support NE, other 
DOE and Work-For-Others milestones. The Department continues to 
evaluate and look for improvements in the operation of INL.

              PROGRAM ASSESSMENT RATING TOOL (PART) SCORES

    Senator Allard. All right. And then on the University 
Nuclear Education Program--results not demonstrated. Why is 
that?
    Mr. Spurgeon. What was that, Senator?
    Senator Allard. It's the University Nuclear Education 
Programs. Results are not demonstrated. In other words, they 
haven't been able to establish goals that show that they're 
getting anything accomplished.
    Mr. Spurgeon. We have a--I think our university dollars are 
being very well spent. It's sometimes very difficult to 
quantify goals for research that is happening and support of 
developing education programs for us. I'll give you a better 
answer than I'm able to give up here.
    Senator Allard. When they make application, you can insist 
on them giving you----
    Mr. Spurgeon. We are. We are moving the university research 
programs to be program based and so that we will be able to 
have a better measure of performance against objective.
    [The information follows:]
          PART Score for University Nuclear Education Program
    The mission of the University Reactor Infrastructure and Education 
Assistance program has been to enhance the national nuclear educational 
infrastructure to meet the manpower requirements of the Nation's 
energy, environmental, health care, and national security sectors. More 
specifically, the program was designed to address declining enrollment 
levels among U.S. nuclear engineering programs.
    A PART assessment was completed for the University Reactor 
Infrastructure and Education Assistance program during the fiscal year 
2007 budget formulation process. The assessment, conducted under the 
title ``University Nuclear Education Programs,'' determined that 
enrollment target levels of the program had been met and that Federal 
assistance was no longer needed to encourage students to enter into 
nuclear-related disciplines. Since the late 1990s, enrollment levels in 
nuclear education programs have tripled, reaching upwards of 1,500 
students in 2005, the program's target level for the year 2015. In 
addition, the number of universities offering nuclear-related programs 
also has increased. These trends reflect renewed interest in nuclear 
power. Students continue to be drawn into this course of study and 
universities, along with nuclear industry societies and utilities, 
continue to invest in university research reactors, students, and 
faculty members. However, the assessment also concluded that the 
program performance measures that did not clearly communicate the 
linkage between Federal funding and growth in enrollment in nuclear-
related disciplines. This led to the rating of ``Results Not 
Demonstrated''.
    The Department is using part of its fiscal year 2007 funds to 
support all students currently on an Office of Nuclear Energy 
fellowship or scholarship for the period of their initial appointment. 
No student is in danger of losing his/her funding assuming that they 
stay within the original guidelines of the program with regard to 
course of study and grades. No additional funds are requested in fiscal 
year 2008 for these activities, effectively closing out the program. 
However, $2.9 million was requested in fiscal year 2007 to provide 
fresh reactor fuel to universities and to dispose of spent fuel from 
university reactors. Under the fiscal year 2007 CR, these activities 
are also being funded. In fiscal year 2008, $2.9 million is requested 
for these activities under Research Reactor Infrastructure, within the 
Radiological Facilities Management program.
    In addition to funding research reactor activities, the Department 
remains committed to supporting university research through its Nuclear 
Energy Research Initiative (NERI). In fiscal year 2007, $38.3 million 
will support NERI grants to universities within NE's R&D programs. The 
fiscal year 2008 budget request includes $58.6 million to support NERI 
grants to universities within NE's R&D programs.

              PROGRAM ASSESSMENT RATING TOOL (PART) SCORES

    Senator Allard. Now there's one other program, the State 
energy programs. What's happening there? They are--who has 
those?
    Mr. Karsner. That's me.
    Senator Allard. Why aren't those--why aren't there any 
results being demonstrated there?
    Mr. Karsner. I can't speak to the report. I feel like there 
are results being demonstrated there but I'm happy to analyze 
that report.
    Senator Allard. The Office of Management and Budget did an 
evaluation on that and said they----
    Mr. Karsner. It will not be the first time I disagree with 
the Office of Management and Budget.
    Senator Allard. Well, if you could get something back to us 
on those. As policy makers, if we knew----
    Mr. Karsner. Absolutely, sir.

    [The information follows:]

                    State Energy Program PART Score
    In 2004, the State Energy Program (SEP) received a rating of 
``Results Not Demonstrated'' for the OMB Performance Assessment Rating 
Tool (PART) exercise. This rating is ``given when programs do not have 
acceptable long-term and annual performance measures'' (quoted from OMB 
PART Tool Guidance No. 2007-02, Jan 29, 2007). The Program had offered 
information for the PART based on an evaluation conducted by Oak Ridge 
National Laboratory (ORNL). OMB cited the need for a more comprehensive 
impact methodology for the study as well as an independent evaluator.
    DOE has taken several actions in response to OMB's concerns. In 
2005, SEP requested an independent review of the ORNL report by the 
Board of Directors of the International Energy Program Evaluation 
Conference, Inc. This independent review found the ORNL study to be a 
``reasonable foundation from which to estimate the national effects of 
the SEP program.'' In 2006 the program finalized the SEP Strategic 
Plan, which established long-term goals, objectives, and strategies to 
set a new direction for the program in response to the OMB assessment. 
In 2007 SEP initiated a comprehensive evaluation of the program by an 
independent evaluator to quantify program performance and identify 
areas for improvement.

                  UNIVERSITY NUCLEAR EDUCATION PROGRAM

    Senator Allard. Some of these programs, I think--they look 
good and sound good so I want to--and like all the rest, I want 
to see us move forward on that. So I just want to follow up 
that. Thank you, Mr. Chairman.
    Senator Domenici. Mr. Chairman?
    Senator Dorgan. Yes?
    Senator Domenici. With reference to the program you asked 
about, it referred to----
    Senator Dorgan. University, yes.
    Senator Domenici. I want to say that in 1995, when there 
was nothing going on and this Senator decided we should get 
started on some and we started by putting back into the 
university system what had been there for many years and 
terminated and that was some assistance to encourage youngsters 
who had the proclivity for nuclear engineering and the like, 
excited them about--and it was working and we spent about $25 
million a year at the maximum and then the President, because 
he didn't have enough money, terminated it and I don't think 
I've been able to put it back. But that's the history.
    Senator Dorgan. Thank you for that response and I'd agree 
that we need to encourage students to get into these areas. 
It's probably important when you have a shortage there.
    Senator Domenici. Thank you.
    Senator Dorgan. Senator Murray.
    Senator Murray. Thanks very much, Mr. Chairman, for holding 
this hearing and Senator Domenici and all of our panelists. I 
think it's been a very interesting discussion. I think we all 
are looking for ways to provide alternative energy and I think 
there are a lot of great ideas out there. This has been a great 
panel and chance to hear all that. I was out in my state over 
the last week and had a chance to talk to my sorghum grain 
farmers there, very interested in the opportunities that are 
out there and obviously, my dairy farmers are talking about 
biowaste. We've got nuclear, biodiesel, hydrogen--so many 
opportunities and a lot of work ahead of us.
    I think we have to remember, we've got to be careful what 
we do. Every source of energy seems to have a challenge to it 
and how we move forward is really important but I appreciate 
all the work that you're doing.

                           VEHICLE EFFICIENCY

    Secretary Karsner, let me start with you. I really 
appreciate the President's initiative to cut our dependency on 
oil through the greater use of biofuels but there are other 
things we can do as well. We not only need to introduce 
alternative fuels but we have to look at how we can get 
efficiency in vehicles as well. Your efficiency programs--we've 
seen a significant increase in the 2007 spending plan and the 
increase in the 2008 EERE budget seems to emphasize funding for 
hybrid electric systems and decreases funding for research and 
materials and advance combustion. According to the Department's 
own estimates, these activities would have a lot more dramatic 
and near term impact on CO2 emissions and reducing 
our dependency. Can you comment on whether you agree that 
improvements in combustion processes could greatly enhance our 
fuel economy by new lightweight materials, things like that?
    Mr. Karsner. I do agree that improvements will remain a 
central focus. I think some of the diminishing, programmatic 
budgeting there might reflect some of these successes, 
actually. In other words, there are natural limits to what 
gains can be had from the physical properties of internal 
combustion efficiency and it's going to ultimately be balanced 
against the emissions that come out of those engines. So the 
idea is, optimizing the efficiency to the maximum degree as a 
physical device and minimizing the emissions in some of those 
cases, for example, heavy trucks, is what that applies to. 
We're getting right up to that optimum barrier.
    Senator Murray. Do you think we know everything we need to 
know?
    Mr. Karsner. No, absolutely not.
    Senator Murray. Okay. Well, how much of the 2007 spending 
plan was directed to advanced combustion R&D?
    Mr. Karsner. I can report back with the precise numbers but 
we did have a substantial increase in the 2007 spend plan to 
vehicle technologies.
    [The information follows:]
                  Funding For Advanced Combustion R&D
    For fiscal year 2007, $49,706,000 is being directed to advanced 
combustion R&D in the Vehicle Technologies Program.

                FUNDING FOR ADVANCED COMBUSTION RESEARCH

    Senator Murray. And your 2008 is reduced funding?
    Mr. Karsner. Well, of course, the 2008 was submitted ahead 
of the 2007, so as Senator Dorgan pointed out, it's a bit of an 
anomaly this year.
    Senator Murray. Okay. Well, it just seems to me that we 
need to keep focusing on all kinds of programs and reducing the 
research on that is not going to help us improve our--or help 
us get off our dependency of oil. So I'm a little bit concerned 
about that.

                                BIOFUELS

    I also wanted to ask you, DOE seems to be putting a lot of 
their focus on cellulosic ethanol but there are other biofuels 
that contribute to the mix as my farmers tell me, constantly. 
What is the Department doing to support really a diversified 
approach to reducing our Nation's dependence with fuel such as 
biodiesel or biomethane?
    Mr. Karsner. Well, of course, we support all biofuels and 
of course, the President's approach is to have the broadest 
scope available to alternative sources to gasoline. That's the 
subject of a hearing tomorrow but the administration endorses 
all of those.
    Some of them are more mature than others in terms of their 
efficiency process and their competitiveness so they don't need 
the level of breakthrough that cellulosic ethanol needs. The 
other sort of metric that we look at is the quantitative or 
volumetric capacity to make an impact of those biofuels and, 
although all of these are important and we want to maximize 
what each of them can contribute, there is no question that 
ethanol, through various forms of biomass, volumetrically will 
contribute much, much more than any of those that you named and 
so that's why it gets a greater emphasis.
    Senator Murray. Are there projects out there that do cross 
funding that help both of them----
    Mr. Karsner. Well, codes and standards, by way of example--
in fact, I would say we have more emphasis on the codes and 
standards for biodiesel so that we can certify them. Since we 
have a fairly competitive biodiesel industry that is growing 
very rapidly, it's very important to us that engine 
manufacturers be able to warrant the use of those in different 
ambient conditions so that's a big focus with biodiesel. We've 
just certified B-5 in some of the engines. I understand we're 
looking at B-20 levels and so codes and standards will be one 
of those that is cross funded.

         GRID RESEARCH AT PACIFIC NORTHWEST NATIONAL LABORATORY

    Senator Murray. Okay, thank you. I appreciate that and 
Director Kolevar, I just wanted to mention, I heard Senator 
Dorgan talking to you about the grid and modernizing our grid 
and moving to better technologies and what we needed to do and 
I just wanted to make sure you knew about the Pacific Northwest 
National Lab and the work that they're doing out of my State to 
help efficiency on the grid. Have you ever visited there?
    Mr. Kolevar. I have not, Senator. I intend to this year. 
I'm aware they're pulling real time data from Bonneville Power 
and visualizing, from a layman's perspective and then in more 
detail on some of the work that is going on there. It sounds to 
be very promising.
    Senator Murray. Yes, the Grid Wise Program is really 
starting to look at how we can really focus on some 
efficiencies and better transmission. We'd really love to have 
you come out and take a look at it. Mr. Chairman, you might 
want to, too. I think you're right to mention that we need to 
have some efficiencies with that system and there is some work 
being done. I think we need to do more but we'd love to have 
both of you visit. So, thank you very much.

                RETRIEVABLE ENERGY IN SPENT NUCLEAR FUEL

    Senator Dorgan. Thank you very much. Just a couple other 
queries. Secretary Spurgeon, you talked about the closed fuel 
cycle. Can you tell me, just for my own information, how much 
energy is retrieved from spent fuel? You talked about 
retrieving the energy from spent fuel. What percent of the 
energy?
    Mr. Spurgeon. Well, if we do a recycle and if we just 
recycle one time, in a light water reactor, you would recover 
20 percent roughly of the input fuel. Now there are ways, 
looking to the future, where you could recover substantially 
more than that. But just one recycle and that's where I made 
the comparison base when I said as much as the Alaska Pipeline 
provides in energy value. It's just based on one recycle, 20 
percent saving existing reactors, not including new ones that 
might be built in the future.

                             WEATHERIZATION

    Senator Dorgan. Secretary Karsner, the issue of 
weatherization. I did not ask you about that. I assumed since I 
come from North Dakota that you would have expected me to so I 
don't want to disappoint you here. As you know, in the 
weatherization account, the proposal is to make a cut in that 
account. It was $242 million in fiscal year 2006. In fiscal 
year 2008, it will be $144 million, which is the budget 
request. Tell me what you think the consequences of that would 
be, to cut $100 million from weatherization?
    Mr. Karsner. Well, there are lots of consequences. One of 
the primary consequences is that we have more funding to 
accelerate biofuels for national security and lower greenhouse 
gas emissions. That's on the positive side. On the negative 
side, it will mean, because that is an additive program for 
returns; that is, that there is a correlation between dollars 
spent and houses weatherized. It will obviously mean a 
diminution in the amount of houses we can achieve in a fiscal 
year.
    Senator Dorgan. I've been out to watch what they do in the 
weatherization program to substantially improve some of these 
older homes in order to reduce the amount of heat loss. Is that 
program effective? Also, is it a part of our energy efficiency 
efforts? Because we're saving energy by insulating homes and so 
on, so tell me how you view that program.
    Mr. Karsner. I view any efficiency improvements as 
effective but with a limited pool of dollars and an enormous 
task, as I said, for the larger aggregate goals of lowering 
greenhouse gas emissions and enhancing national security, it 
has the unfortunate disposition of competing against other 
efficiency investments in our applied research and development 
portfolio that have enormous returns that are multiplicative 
across the population. Although this is a very important 
segment of the population and it is a worthy program to focus 
on, in the context of competing in our portfolio to achieve 
those same efficiency objectives, the returns are very, very 
low.
    Senator Dorgan. Are these mostly lower income people that 
are competing?
    Mr. Karsner. For the weatherization dollars?
    Senator Dorgan. Right.
    Mr. Karsner. It is all low income people.
    Senator Dorgan. So the competition, we've put them in here 
as the lower income people that own old homes that are leaking 
heat and terribly inefficient, trying to struggle through the 
winter to pay a heat bill. They're put in competition with all 
the other accounts and so they get hit with a $100 million 
reduction in funding. Is that something you support?
    Mr. Karsner. Well, I don't support the phrasing of it in 
that particular way but I do support the cut in the sense that 
I have to look at it as a portfolio. I have no other choice but 
to look at the precious taxpayer dollars that way. In fact in 
reality, this cut is really restoring what the Clinton 
administration budgetary year appropriations were in terms of 
apportionment of the portfolio. The President, in his first 
term push for poverty alleviation, substantially injected new 
funding into the weatherization program, I think at a time 
before most of the other technologies were reasonably 
commercial where they are today and at a time before we felt 
this kind of pressure from $3 gas and other pressing 
priorities.
    So we are sort of putting it back into balance to where it 
had historically been, which still makes it one of the largest 
programs in the Nation's applied research and development 
portfolio for new energy developments. And these are difficult 
choices but we feel like turning the housing stock itself 
quicker in the aggregate through working on the building 
envelope, insulation, better windows across the board is at 
least as important ultimately.
    Senator Dorgan. Mr. Karsner, we added $25 million in the 
Supplemental here in the Senate for weatherization. Do you 
support that?
    Mr. Karsner. No, I do not.
    Senator Dorgan. Do you oppose it?
    Mr. Karsner. I do oppose that.
    Senator Dorgan. Why?
    Mr. Karsner. The first reason is a little bit personal. We 
submitted a $160 million budget for fiscal year 2007 and though 
we had the authority of the spend plan through Congress' 
generous markup of our budget, of my own volition and push, I 
sought to meet the Senate written mark of $204 million and 
added $40 million to the weatherization program in the spend 
plan. Much of that money this late in the year will roll over 
into next year so it is well funded to begin with and it is at 
the level that the Senate itself had written into the budget, 
albeit I understand it was the last Senate. Every new dollar 
that we add for that is taking a dollar away from the other 
efficiency programming markups that we have and the returns on 
those are 20 to 1, according to the National Academy of 
Sciences, and I think the returns are too big to forfeit.
    Senator Dorgan. Let me--well, first of all, thank you. You 
know, while we might agree and disagree about certain 
priorities and the importance of certain accounts, I agree with 
Senator Domenici's statement earlier. I think all four of you 
are significant public servants whose background and 
capabilities give you the opportunity to do a good job for this 
country and coming to serve in an administration that is not so 
long for this town, what 20 or 21 months left? I mean, you've 
not signed on for a 6- or 8-year term in most cases.
    You've come from various disciplines to assume leadership 
in these accounts and I appreciate that. I think all four of 
you have a lot to offer this country, even when we might 
disagree about priorities. It's my intent that I and the other 
members of this subcommittee work with you as we want to learn 
from you and want to help you meet the challenges ahead. While 
we might disagree on the exact amounts that should be invested 
in certain activities, at the end of the day, I think, we all 
share a common interest in success in your four areas. All four 
of these areas are very, very important as functions in the 
Department of Energy and your coming here today to respond to 
our questions and to give us a glimpse of what you're doing is 
very important.
    I understand Senator Domenici has made a career of this 
during the Clinton administration, having agency witnesses come 
up and defend the President's budget. That's what they're paid 
to do. It's what they are required to do and if they didn't do 
that, they'd probably go back and find out that their desk was 
cleaned out. So it is a little frustrating for us sometimes but 
having recognized that, we appreciate working with you and we 
appreciate you being here today.
    Senator Domenici, do you have anything to add at the 
conclusion?
    Senator Domenici. One last one. First, Mr. Chairman, I want 
to thank you for your last remarks. I have great admiration for 
a Senator who speaks as you have just spoken and I don't know 
you that well even though we've been here a long time but the 
more I learn, the more I like what I hear and I thank you for 
that.
    I want to say and ask which one of you would be--would 
represent global warming, the problems with global warming, 
proposed solutions. Which one would have----
    Mr. Karsner. I think that's the Department, sir.
    Senator Domenici. The Department. So we'll talk to the 
Department on that, okay? I think that's okay. I'll talk to the 
Department because I want to just make a statement.
    You know, we're soon going to be called upon to perhaps 
vote on a program, an American program to help contain 
CO2, one way or another. There are various ways to 
do that, one of which is the simplest one was to put a tax on 
carbon.
    I think that has lost favor quite a bit. In between there, 
there are various ways. I'd just like to make a point that I 
have spent a substantial amount of time and continue to spend 
more on analyzing the amount of CO2 that China and 
India are producing and emitting and the lack of positive 
action on the part of either of those countries to diminish the 
carbon dioxide and to the contrary, a dramatic increase in 
power plants that are fed by dirty coal. That's your area, 
Secretary Shope. You know about that. You're not in charge of 
the big picture but you know about that. They are unfortunate--
they have a lot of coal but it's dirty coal. At least the Lord 
could have made it clean and it wouldn't have had an ambient 
problem. They don't even clean up the first stage in the 
countries I just spoke of. They burn it without anything on 
there to clean up the pollutants as it is burned.
    But I'm going to close with this remark. As of now, we 
understand that they produce in China--not India, China, about 
one reactor that is somewhere between 500 and 750 kilowatts--
megawatts, excuse me, a week, about one a week. Now, you can't 
hardly imagine that being an American even though we claim we 
are the biggest gobblers of energy and we do nothing like that, 
such that if we were asked to spend great amounts of money to 
constrain carbon dioxide, the question will be asked of those 
who are for it, what is China and India going to do?
    And if the answer is nothing, then it would appear to me 
that the American people would have a very big, big issue to 
raise with the Congress that would do something because all we 
would do would be to tie our own hands and legs, do nothing 
significant to help the problem of CO2 in the outer 
atmosphere because, as a matter of fact, it is global in nature 
not American. And I'm not going to support unilateral 
containment without some hope--no, without some real evidence 
that China and India will join us in research and development 
and expenditure of substantial money to contain CO2 
in their countries.
    I think that's important that those of us who are involved 
get our heads together and see what all this means. It may mean 
that China might have to think a little sooner rather than 
later about what they'll do because I don't know that we'll sit 
by and buy their products forever either at the prices that are 
reduced because they spend nothing to clean it up while we 
spend much. That's a true impediment to us selling any products 
worldwide or vice versa. I thank you, Mr. Chairman. I yield.
    Senator Dorgan. Senator Domenici, thank you. If in fact it 
is a global economy and we all live in the same fishbowl then 
global pollution affects all of us as well and the Senator has 
expressed himself with respect to a vote on the Kyoto Treaty, 
believing that you cannot begin to deal with these issues, 
leaving China and India out of the equation. Especially because 
it's a global economy, those industries, those manufacturing 
plants and others that want to belch pollutants into the air 
have no regulatory costs of doing so and can simply move their 
plant overseas, fire their American workers and accelerate the 
job loss in this country.
    Having said all that, I think the testimony today, for 
example, with respect to the search for new technologies, the 
search for carbon sequestration, the search of this country to 
unlock the mysteries from these new technologies is very 
important because I assume that we will want very quickly to 
share those technologies with everyone around the world. I 
would say to you, Senator Domenici, I was persona non grata in 
my State for some long while with the coal industry when I 
served in the State capitol. I was one of those that led the 
fight to demand that, with respect to strip mining of coal, 
there would be segregation of topsoil, that companies ensure 
the contouring of the land for reclamation and that every new 
plant producing electricity had to have the latest available 
technology, wet scrubbers for instance.
    You can well imagine the way the industry responded. I was 
an enemy of the industry. Well, guess what? Twenty years later, 
twenty-five years later, they are all glad they did it and all 
of us in North Dakota are glad they did it.
    We produce a lot of coal. We're the first State in the 
country to meet the ambient air standards, even though we had 
substantial plants, because we spent the money to put those wet 
scrubbers on. We now see contoured land that looks great. It 
was land from which coal seams were extracted and topsoil was 
segregated and the contour was redone. You drive past there 
these days and see the vegetation, you can't tell there was 
coal mined from it.
    It is always harder at ground zero to begin to push these 
issues. You're absolutely right. If we decide to proceed and 
China and India do nothing, we will have accomplished very 
little and yet, in many ways, just as with stopping the spread 
of nuclear weapons, it falls on our country's shoulders. We 
must at least, at a minimum, begin a series of no regret steps 
as we begin to address all of these issues.

                     ADDITIONAL COMMITTEE QUESTIONS

    So, Senator Domenici, you and I will have a lot of work to 
do and I'll enjoy doing it with you because you have a great 
deal of experience and have offered a lot to this subcommittee 
over many, many years.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
             Questions Submitted to Hon. Dennis R. Spurgeon
             Questions Submitted by Senator Byron L. Dorgan

                   GLOBAL NUCLEAR ENERGY PARTNERSHIP

    Question. I have heard Secretary Bodman talk about the Global 
Nuclear Energy Partnership (GNEP) as being an initiative that will take 
a couple of decades. Yet, your testimony refers to a Secretarial 
decision in June 2008. Further, your testimony refers to the 
development of commercial-scale reprocessing facilities in conjunction 
with industry. I understand many in industry feel more research and 
development is necessary on GNEP before moving forward on facilities.
    So, I am confused by the disconnect between Secretary Bodman's own 
observation of GNEP being a couple decade long process and this rush to 
a Secretarial decision in June 2008 and development of commercial scale 
reprocessing facilities.
    First, can you please explain to me what the Secretarial decision 
in June 2008 will be about? And second, can you explain why we would be 
turning so soon to development of commercial scale facilities?
    Answer. The Secretarial decision in 2008 is intended to determine 
the GNEP path forward. The Department intends for this decision to 
include a decision on whether or not and how to proceed with a nuclear 
fuel recycling center and an advanced recycling reactor. This will 
require compiling information regarding the requisite technologies, 
economics, and environmental impacts. The specific elements supporting 
the decision are a credible technology pathway and progress on its 
implementation; a business plan; definition of a government-private 
partnership that could be formed; completion of NEPA requirements; and 
a nonproliferation assessment.
    In addition, a path forward on the Advanced Fuel Cycle Facility is 
anticipated to be part of the Secretarial decision.
    The Department's work with industry at this stage will focus our 
research and development in support of future commercial-scale 
facilities. Engaging industry at this time could save the United States 
nearly a decade in time and a substantial amount of money, while still 
engaging and reinvigorating the nuclear community with new facilities 
and continued long-term R&D. Development of a credible U.S. program for 
construction of commercial fuel cycle facilities is a critical element 
of a strategy to convince other States considering nuclear energy 
programs that they can rely on the United States for their fuel cycle 
needs. Making the United States an influential participant in fuel 
cycle technology is vital to fulfilling the GNEP vision.
    Question. Under GNEP, I understand it will take one new fast 
reactor to burn the reprocessed fuel from approximately every three to 
four light water reactors. If this is correct and today there are 103 
existing light water reactors, we will need 25 to 34 new fast reactors 
to burn just the reprocessed fuel from existing light water reactors. I 
understand the nuclear power industry is not interested in building 
fast reactors. For GNEP to work properly, will the Federal Government 
have to build 30+ fast reactors or will industry be mandated to build 
them?
    Answer. Deployment of advanced fast reactors is currently 
envisioned as a commercial activity, with revenues being generated from 
the production of electricity while the transuranic material is 
simultaneously consumed. One goal for GNEP is to establish a business 
case that supports the commercial deployment of advanced recycling 
reactors, which are fast reactors. The number of advanced recycling 
reactors required to use the fuel recovered from LWR spent nuclear fuel 
depends on a number of factors. For example, a key factor is the rate 
at which an advanced recycling reactor would destroy the transuranic 
elements, recovered from the spent nuclear fuel, while generating 
electricity. Other factors include the initial core loading of an 
advance recycling reactor and the ability to recycle the spent fuel 
from the advanced recycling reactors.
    Question. A primary goal of GNEP is to develop a reprocessing 
technology that is ``proliferation resistant.'' Some claim DOE's 
proposed separations technologies all provide less than 1 percent of 
the International Atomic Energy Agency's ``self-protection'' standard 
for plutonium. Given these considerations, how can DOE's GNEP proposal 
meet the nonproliferation goal?
    Answer. One goal of GNEP is to develop a reprocessing technology 
that is ``more'' proliferation resistant than those currently used 
throughout the world which separate pure plutonium. The separations 
technologies being considered by the Department would not separate pure 
plutonium and would, therefore, be more proliferation resistant than 
those currently in use. The Department's fiscal year 2008 budget 
request supports over $88 million for further research and development 
on advanced reprocessing technologies.
    Question. Another goal of GNEP is to confine reprocessing and 
uranium enrichment to ``countries that already have substantial, well-
established fuel cycles.'' Does DOE's fiscal year 2008 budget request 
include funds for cooperation with the Korea Atomic Energy Research 
Institute (KAERI) for pyroprocessing research and development?
    Answer. Bilateral collaboration with South Korea on nuclear energy 
R&D occurs under the International Nuclear Energy Research Initiative 
(I-NERI). All I-NERI joint projects employ cost sharing on an 
approximately equal basis by the participating countries. Each country 
is responsible for funding its side of joint projects. In the case of 
the United States, current-year approved program budgets provide the 
funding for our contributions to the joint projects. As part of I-NERI 
collaborations, Korea, as represented by KAERI, is actively engaged in 
relevant work in fiscal year 2007 and supported in the fiscal year 2008 
budget request.
    It is important to note, however, that KAERI does not process spent 
fuel or special nuclear material as part of this cooperation. All 
pyroprocessing-related research and development activities involving 
use of spent fuel or special nuclear material under these I-NERI 
projects or work-for-others programs is done at DOE National 
Laboratories. Annual meetings between the U.S. Government, National 
Laboratory and KAERI officials have been instituted since 2006 to 
monitor cooperative activities in the area of pyroprocessing and 
advanced fuel cycle technologies.
    Question. Does DOE intend to offer the Republic of Korea, a country 
that the United States to date has not permitted to reprocess due to 
proliferation concerns, a role in GNEP as a ``supplier'' country?
    Answer. The Republic of Korea has the sixth largest nuclear power 
program in the world. The Government of the Republic of Korea has made 
the decision not to possess reprocessing or enrichment facilities and 
is limiting the scope of its research and development on pyroprocessing 
technologies. Nevertheless, the Republic of Korea is actively engaged 
in the development of advanced reactor and fuel cycle technology, 
nuclear safety, radioactive waste management, and other related work 
programs on the national, bilateral and multilateral levels. We gain a 
great deal by working with these experts. The Republic of Korea is 
engaged in research and development that supports GNEP involving small-
reactors, advanced burner reactors, computer modeling, safeguards and 
basic science, but not separations of spent fuel.
    At this point, DOE has not specifically invited countries to 
participate in GNEP as ``supplier countries.'' It is generally 
anticipated that the expansion of civilian nuclear power could be 
provided by countries already possessing the infrastructure to 
manufacture nuclear power plants as well as provide fuel supply 
services.
    Question. Which countries has DOE invited to participate in GNEP as 
``supplier'' countries?
    Answer. At this point, DOE has not specifically invited countries 
to participate in GNEP as ``supplier countries.'' It is generally 
anticipated that the expansion of civilian nuclear power could be 
provided by countries already possessing the infrastructure to 
manufacture nuclear power plants as well as provide fuel supply 
services.
    Question. Which countries has DOE invited to be ``users''?
    Answer. DOE believes it is advantageous to seek partnerships for 
the expansion of civilian nuclear power worldwide by providing support 
on infrastructure development for countries newly considering nuclear 
power (e.g., legal, regulatory, safety, knowledge base, experience, 
etc.). DOE does not plan to invite countries as ``users'' or 
``suppliers,'' but rather seeks partners. The GNEP partnership is open 
to all countries agreeing to the statement of principles. The benefit 
of partnership is having access to products and services on the front 
and back end of the fuel cycle while relieving countries of the 
liability, infrastructure and expense associated with such facilities. 
Ultimately, there will be technology partners, materials partners 
(e.g., uranium) and infrastructure partners. In December 2006, the 
United States co-hosted, along with several other IAEA Member States 
(Canada, China, France, India, Japan, Russia, and South Korea), a 
workshop in Vienna, Austria, on ``Issues for the Introduction of 
Nuclear Power.'' Twenty-six countries currently without nuclear power--
yet considering it as a potential addition to the energy portfolio--
attended this workshop.

                         NUCLEAR ENERGY'S ROLE

    Question. The Energy Information Administration's Annual Energy 
Outlook 2007 reference case indicates that nuclear power provided 19 
percent of the Nation's electricity in 2005 and is expected to provide 
15 percent of the Nation's electricity in 2030.
    How do you reconcile the fact that, even as the U.S. Government is 
providing greater Federal assistance to the nuclear power industry 
through various research programs and deployment incentives than ever 
before, that portion of electricity generated from nuclear power 
facilities is expected to decrease as a percentage of our overall 
electricity production in the next 25 years?
    Answer. As you know, there has been no new construction of nuclear 
plants in the United States in 30 years. However, nuclear power still 
supplies a significant percentage of our electrical needs, because 
plant efficiencies have increased electricity production equivalent of 
27 1000 megawatt plants without new construction. As such, there is 
little additional efficiency to be gained with the existing fleet of 
reactors.
    According to the Energy Information Administration's (EIA) Annual 
Energy Outlook 2007, America's demand for electric power is projected 
to increase at an average annual rate of 1.5 percent between now and 
2030. In the Annual Energy Outlook 2007, EIA assumes that the 
equivalent of 12 new nuclear plants (1,000 megawatts each) would be 
built by 2030. The capacity lost from the few currently operating 
plants that will be retired by 2030 is assumed to be offset by power 
uprates at existing plants and the restart of TVA's Browns Ferry Unit 
One. Therefore EIA estimates total nuclear capacity to increase from 
100 GW today to 112 GW in 2030. Based on EIA's assumptions, all the 
nuclear plants operating in 2030 would produce only about 15 percent of 
the generation mix in the United States.
    The Department is aggressively pursuing actions through our Nuclear 
Power 2010 program to ensure the growth of electricity produced by 
nuclear power. To date, 15 power companies have notified the Nuclear 
Regulatory Commission of their intentions to submit 19 applications for 
combined Construction and Operating Licenses for 33 new reactor plants. 
Therefore, we expect that much more than the 12 gigawatts of new 
nuclear capacity projected by EIA will be realized before 2030. New 
nuclear plants would only need to be brought on line at a rate of three 
or four per year, a rate lower than that already proven achievable in 
some years in the 1970s, in order for nuclear power to provide 20 
percent of the mix in 2030.
                                 ______
                                 
             Questions Submitted to Hon. Dennis R. Spurgeon
            Questions Submitted by Senator Pete V. Domenici

        GNEP ADVANCED FUEL CYCLE FACILITY--LUXURY OR NECESSITY?

    Question. Mr. Spurgeon, the Department has requested funding for 
the Advanced Fuel Cycle Facility. This new research facility is 
intended to perform all of the critical advanced reactor fuel 
development. However, it seems to me that this brand new facility 
actually duplicates the numerous older facilities located across the 
DOE complex that are still in use today.
    This funding would go a long way in upgrading several existing 
facilities and would have the added benefit of supporting a diverse 
scientific mission such as medical isotopes, environmental 
characterization, and support for the space mission.
    This new facility seems to be more of a luxury, rather than a 
necessity.
    Can you please explain your rationale for deciding to build a 
single brand new facility rather than make the necessary investments in 
our existing laboratory infrastructure?
    Answer. The Advanced Fuel Cycle Facility (AFCF) project is in the 
early stages of the conceptual design; no decision has been made to 
construct the facility and DOE is evaluating reasonable alternatives. 
The Department is aware that facilities exist that, with refurbishment 
or upgrades, could perform some, but not all, of the functions 
currently planned for the AFCF. A full examination of the trade-offs 
between constructing a new facility and upgrading existing ones is 
required in accordance with the Department orders for a major system 
acquisition.
    The AFCF would allow the Department to perform R&D, technology 
development, and demonstrate the integrated operations and processes 
involved in the recycling of spent nuclear fuel. These operations would 
include receiving the spent nuclear fuel, separating its various 
constituents, fabricating new fuel, containing transuranic elements, 
for an advanced recycling reactor, manufacturing lead test assemblies 
that are necessary for fuel qualification, and waste handling. This 
facility would have a continuous throughput rate from start to finish, 
from reprocessing both spent thermal and fast reactor fuel to 
fabricating new fuel types yet to be fully developed. Currently, no 
single facility with that capability exists.

                            NP 2010 PROGRAM

    Question. Mr. Spurgeon, your budget provides $113 million for the 
Nuclear Power 2010 program. This is significantly below the $183 
million needed to fulfill the 50/50 cost share agreement to prepare the 
detailed engineering designs needed to resolve the technical, 
engineering and regulatory challenges needed to license a new reactor.
    What is the Department's justification for failing to meet its cost 
share commitment and how will this impact the cost and schedule of this 
project?
    Answer. The Department of Energy (DOE) is meeting its cost-share 
funding commitment for these important nuclear energy projects. DOE 
remains committed to spend $586.5 million as Federal cost share as 
agreed to with industry. DOE's cost-share primarily supports the 
demonstration of the ``untested'' regulatory process for the combined 
Construction and Operating Licenses for two new nuclear plants. It also 
supports the completion of the first-of-a-kind engineering for two 
reactor designs. The designs will be completed in sufficient detail to 
give power companies the cost and schedule information they need to 
make plant orders. If the fiscal year 2008 budget request of $114 
million is appropriated by Congress, DOE will have provided industry 
with over $300 million of the $586.5 million total of Federal cost 
share by the end of fiscal year 2008.
    In November 2006, the industry proposed DOE increase its cost-share 
for these two projects by $161 million to a new total DOE cost-share of 
$727 million. With this increase, industry proposes activities worth 
$183 million in fiscal year 2008. DOE declined this industry request 
because its cost and scope went beyond DOE's original commitments.
    Question. Based on the budget shortfall, are you able to predict 
which design, engineering, or regulatory activities will not be funded. 
Do you believe this will impact one reactor design over the other?
    Answer. DOE does not believe one particular reactor design would 
have an advantage over the other based on DOE's fiscal year 2008 budget 
request.
    The fiscal year 2008 budget request of $114 million for the Nuclear 
Power 2010 program is sufficient for funding necessary activities in 
fiscal year 2008. The request is consistent with the agreed-to cost-
share funding commitment.

                        NP 2010 PROGRAM REFORMS

    Question. Last year, I raised a number of tough questions about the 
cost controls of the NP 2010 program and whether or not the NuStart 
team would be able to deliver on the budget commitments they had agreed 
to. This criticism seemed to force the reactor vendors to sharpen their 
pencils and improve the work product.
    Do you believe the DOE's private partners have made the necessary 
improvements to get this program back on track?
    Answer. Given that these are uncharted waters for industry and DOE, 
substantial improvements have occurred on the NuStart and Dominion 
projects and the Department recognizes some risks remain. These known 
risk areas and the contingency plans to address them are under constant 
NuStart and Dominion management review.
    One of the more substantial improvements has been the integration 
of the reactor vendor engineering and power company combined 
Construction and Operating License (COL) application development 
efforts. These integration efforts are evident through formal review 
teams such as the Economic Simplified Boiling Water Reactor and the AP 
1000 Engineering Review Teams and the Design Control Document/
Construction and Operating License Integration Team. DOE believes these 
industry efforts significantly improve the likelihood two COL 
applications will be submitted to the Nuclear Regulatory Commission in 
the first quarter of fiscal year 2008.
    Question. Are you confident that this program will be able to 
deliver two reactor designs that the NRC will be able to license?
    Answer. The Department of Energy (DOE) is highly confident the 
licensing demonstration projects with Dominion and NuStart will yield 
approved Nuclear Regulatory Commission (NRC) design certifications and 
combined Construction and Operating Licenses (COL) for the two advanced 
light water reactor designs: the Westinghouse Advanced Passive (AP) 
1000 and the GE Economic Simplified Boiling Water Reactor (ESBWR). The 
NRC already certified the reactor design for the AP 1000 in December 
2005. NRC has projected the ESBWR design certification could occur in 
fiscal year 2010. DOE expects COL applications to be submitted to NRC 
in the first quarter of fiscal year 2008 and NRC issuance of approved 
licenses in fiscal year 2010.

                   FOREIGN INTEREST IN NUCLEAR ENERGY

    Question. Mr. Spurgeon, it seems everyday that I pick up a 
newspaper, another country or company is announcing that they are going 
forward with a new nuclear plant, or expanding their existing fleet to 
meet their growing energy needs. Countries such as India, China, 
Pakistan, Russia, Romania, Finland, Argentina and the United States all 
have plants under construction. Worldwide there are another 200 new 
plants on the drawing boards.
    The countries that have expressed an interest in a nuclear plant 
also need to make plans for uranium fuel supplies and a solution for 
their nuclear waste. Not all of these questions have been answered and 
this has forced the IAEA to think about how the world can safely expand 
civilian nuclear power without increasing the proliferation threat.
    It occurs to me that the rest of the world is moving ahead with 
civilian nuclear power regardless of what the United States does.
    What do you think about the worldwide nuclear effort and how will 
GNEP play a role in this?
    Answer. Worldwide, nations are becoming more concerned with meeting 
energy demands, providing energy security and engaging in energy 
practices that are acceptable for sustaining the environment. DOE sees 
nuclear power as a safe, clean, and efficient means to meet these 
needs. The expansion of nuclear power can satisfy these needs and must 
be expanded in a safe and proliferation resistant manner. For that 
reason, DOE, through the Global Nuclear Energy Partnership (GNEP), 
plans to assist countries newly interested in nuclear power to work 
toward developing sound infrastructure. In December, 2006, the U.S. co-
hosted a workshop in Vienna, Austria, on ``Issues for the Introduction 
of Nuclear Power.'' Twenty-six countries currently without nuclear 
power--yet considering it as a potential addition to the energy 
portfolio--attended this workshop.
    While a key goal of GNEP is expansion of nuclear energy, GNEP has 
other roles. Another key objective of GNEP is to reduce the 
proliferation risks that might otherwise be associated with the global 
expansion of nuclear energy. GNEP supports the goals and objectives 
outlined in the Energy Policy Act of 2005 which calls for diversifying 
the U.S. energy supply with sources such as nuclear power which is an 
important emissions-free component of the U.S. energy portfolio. GNEP 
provides a vision for future energy needs worldwide in a way that 
reduces waste burdens and proliferation risks. GNEP aims to reinforce 
nonproliferation policies by offering reliable nuclear fuel services to 
discourage the spread of enrichment and reprocessing technologies. GNEP 
also aims to draw down and eventually to eliminate excess stocks of 
separated civil plutonium that have accumulated. In addition, GNEP 
facilities aim to reduce proliferation and security risks by using 
materials that are less easily used in nuclear weapons than separated 
plutonium.

                                  GNEP

    Question. Mr. Spurgeon, the budget request for the GNEP program is 
extremely complicated. The budget seems to fund three separate 
activities including fundamental R&D, technology design and then a 
third category known as ``technology development.'' This third 
category, which consumes one-third of the GNEP budget, seems to 
duplicate the other activities.
    Can you please clarify this and provide me with a detailed written 
accounting of the spending plan for the GNEP Technology Development 
Account.
    Answer. The GNEP Technology Development activity includes 
activities within the Advanced Fuel Cycle Initiative that provide 
support to each of the three Global Nuclear Energy Partnership (GNEP) 
projects: the nuclear fuel recycling center, advanced recycling 
reactor, and an advanced fuel cycle research facility. Whereas the work 
associated with GNEP R&D activities such as Separations and Advanced 
Fuels Development involves basic research and bench-scale or 
laboratory-scale experiments of a variety of potential technologies, 
the Technology Development activity funding will be used to further 
develop technology that has been shown to be feasible at the laboratory 
or engineering scale, as well as to optimize design parameters and size 
equipment. This account also supports the small reactor and 
international collaboration efforts.
    As the Department continues its research and development, industry 
engagement, and other activities, the specific allocations for fiscal 
year 2008 for GNEP Technology Development activity could change. 
However, for fiscal year 2008, the Department currently anticipates 
allocating approximately $50 million for the nuclear fuel recycling 
center, $34 million for an advanced recycling reactor, $38 million for 
an advanced fuel cycle research facility, $6 million for international 
collaborations and agreements, and $5 million for grid-appropriate 
reactors in developing countries.

           GNEP--COORDINATING RESEARCH WITH OTHER NE PROGRAMS

    Question. The committee would like to understand the Department's 
view on the plans to tie together the various elements that make up its 
nuclear programs such as NGNP and GNEP. First, there is the potential 
to cooperate on fuel technologies that would benefit the high 
temperature gas reactor being considered for NGNP as well as Advanced 
Reactors being developed under the GEN IV program.
    Will the Department conduct the appropriate analysis high 
temperature gas cooled reactor's capability to burn nuclear waste and 
the potential for synergy with the NGNP and GNEP?
    Answer. One of the key objectives of the Global Nuclear Energy 
Partnership (GNEP) is to make nuclear power an attractive alternative 
to fossil fuels for developing countries around the world. Because the 
power demand requirements are limited for these countries, they will 
likely need smaller reactors. A Very High Temperature Reactor (VHTR), 
such as that being developed in the Next Generation Nuclear Plant 
(NGNP) program, is a small modular reactor design that could 
potentially be well suited in meeting the objectives of GNEP for global 
deployment of nuclear power to developing countries. While the 
Department (DOE) has conducted studies regarding the use of VHTRs for 
actinide destruction, DOE chose to utilize fast reactors initially for 
this component (actinide destruction) of the GNEP mission, while DOE 
continues research and development on VHTR and other technologies. The 
decision to use fast reactors is detailed in DOE's December 2006 
report, The U.S. Generation IV Fast Reactor Strategy. The Sodium-Cooled 
Fast Reactor (SFR) was chosen as the most promising fast reactor 
concept for meeting DOE's strategic goals. The United States has 
extensive experience with SFRs, and an SFR deployed as the Advanced 
Burner Reactor under GNEP could be operational in the 2020-2025 
timeframe.
    DOE is performing research and development on the NGNP consistent 
with the timeline established in the Energy Policy Act of 2005. 
Additional research and development on the use of high-temperature gas-
cooled reactor for actinide burning could be performed after the 
underlying concepts supporting VHTR operation with uranium have been 
thoroughly validated.

             COOPERATIVE NUCLEAR FUEL RESEARCH WITH RUSSIA

    Question. I understand that NNSA, in conjunction with Rosatom, is 
developing the technology such as fuel and advanced power conversion 
systems for high temperature gas cooled reactors in a cost-shared 
program whose purpose it is to ultimately burn surplus Russian weapons 
plutonium.
    How much has been committed to this program and under what program? 
What is the nature of the research and how will this benefit the GNEP 
effort? Is this research being coordinated with NE?
    Answer. Between fiscal year 1999 and fiscal year 2006, the 
Department provided $17.1 million to Russian Institutes to develop the 
Gas Turbine-Modular Helium Reactor (GT-MHR) for plutonium disposition 
in Russia. During that timeframe, Rosatom provided an equivalent $17.1 
million of matching Russian funds as well. This program is managed 
through the National Nuclear Security Administration (NNSA) and has 
been in place for over 8 years. The current scope of this cooperation 
is to conduct research and development in high risk technology areas 
such as the development of plutonium particle fuel and power conversion 
unit technologies. The advanced recycling reactor component of the GNEP 
program may benefit from this effort as it continues to develop 
advanced fuel forms and power conversion technologies. The Office of 
Nuclear Energy receives and considers reports summarizing the Russian 
GT-MHR research program.
    Question. Based on the Russian's level of indecision on MOX; why 
does the Department believe this would be a prudent use of resources at 
this time. Is this being cost shared?
    Answer. The Russian view of weapon grade plutonium is that it is a 
valuable national resource and that disposition in Russian Light Water 
Reactors (LWRs), such as the VVER, is not the most efficient use of 
this resource. Originally, both the United States and Russia had agreed 
to MOX disposition in LWRs. However, over time, the Russians expressed 
misgivings with LWR disposition, although they have never specifically 
excluded use of LWRs for disposition. The Russians have since proposed 
consideration of two additional approaches, which they consider to be a 
more efficient use of their plutonium. These two additional approaches 
are disposition in the BN-800 fast reactor, which is under construction 
(the plutonium disposition program has always considered the 
disposition of a limited quantity of plutonium in the BN-600 fast 
reactor); and development of a High Temperature Gas Cooled Reactor for 
possible use for plutonium disposition, should this reactor become 
available in time.
    The current Russian proposal includes cost sharing in every 
scenario under discussion, including LWRs, although specific details 
have yet to be negotiated.

                           NUCLEAR FUEL CYCLE

    Question. Mr. Spurgeon, much of the focus of the Department since 
the passage of the Energy Policy Act 2005 toward nuclear power has been 
on the development of new nuclear reactors. As you know, there are 
other valued components of the domestic nuclear fuel cycle. Currently, 
our country has only one functioning aging enrichment facility and 
another soon to come on-line in the next few years. These facilities 
will provide the fuel of the nuclear renaissance in America and build 
upon the President's energy security programs.
    Can you tell me what the Office of Nuclear Energy is doing to 
encourage development in the front end of the U.S. nuclear fuel cycle, 
in the enrichment areas of the fuel cycle?
    Answer. With 104 nuclear power plants currently licensed in the 
United States and the announcements by power companies for license 
applications for over 30 new plants, the Department of Energy (DOE) 
believes that U.S. energy security would be significantly enhanced by 
private sector investment in new domestic uranium enrichment capacity. 
Currently, the aging and energy-intensive gaseous diffusion plant at 
Paducah, Kentucky is the Nation's only operating enrichment plant. 
Three private companies, General Electric (GE), Louisiana Energy 
Services (LES), and USEC Inc. (USEC) are at various stages of deploying 
new U.S. enrichment plants featuring advanced technology. LES is the 
furthest along with construction having started on its National 
Enrichment Facility in New Mexico that will utilize gas centrifuge 
technology commercially deployed by Urenco in Europe. USEC and GE are 
working to demonstrate commercial viability of the American Centrifuge 
and SILEX projects, respectively.
    With respect to the Department working with private enrichers, DOE 
and USEC signed an agreement in June 2002, whereby USEC Inc. made a 
commitment to deploy an enhanced version of DOE's previously developed 
gas centrifuge technology at the Portsmouth Gaseous Diffusion Plant 
site. USEC, in order to demonstrate its American Centrifuge, is funding 
a Cooperative Research and Development Agreement with the DOE's Oak 
Ridge National Laboratory. In December 2006, DOE and USEC signed a 
long-term lease agreement for USEC to build its commercial plant at DOE 
facilities at Portsmouth, Ohio. At the same time, DOE granted USEC a 
patent license for DOE's gas centrifuge technology that requires USEC 
to pay royalties to the U.S. Government on annual sales of enriched 
uranium from centrifuge plant production. While LES and GE are pursuing 
other technical approaches, DOE encourages all three companies in their 
efforts to deploy reliable and competitive advanced enrichment 
technology.
    Question. Does the Department need any new authorities in this 
regard?
    Answer. Both LES and USEC are seeking to use DOE's uranium 
inventories to facilitate the startup of their new enrichment 
facilities. At this time, DOE does not need additional authorization to 
sell or transfer uranium to a private company.
                                 ______
                                 
             Questions Submitted to Hon. Alexander Karsner
             Questions Submitted by Senator Byron L. Dorgan

               BALANCING RENEWABLE AND EFFICIENCY FUNDING

    Question. DOE has strongly backed many of the programs in your 
office and the President highlighted initiatives to be pursed by the 
Office of Energy Efficiency and Renewable Energy in his State of the 
Union address. This includes work on hydrogen technology, biomass and 
biorefinery R&D, solar energy, and vehicle technologies. These are all 
important.
    However, it seems that there is much greater emphasis on targeted 
renewable energy programs than other programs within your office such 
as energy efficiency programs, the Weatherization Assistance Program, 
and the State Energy Programs. In your opinion, do you have the right 
balance between the renewable side of your office and the energy 
efficiency side of your office? Why are these energy efficiency 
programs not seeing the same funding increases as the renewable energy 
programs are?
    Answer. Yes, the Office of Energy Efficiency and Renewable Energy 
maintains a balanced portfolio that supports achievement of programs' 
goals and ensures optimal use of resources.
    The fiscal year 2008 budget request includes increases for many of 
our energy efficiency programs. The Building Technologies Program 
budget request is $9.1 million greater than the fiscal year 2007 
request, the Vehicle Technologies Program budget request is $10.1 
million greater than the fiscal year 2007 request and the Industrial 
Technologies Program is $435,000 greater than the fiscal year 2007 
request.
    Many of the Department's efficiency programs have very high returns 
at low cost, such as FEMP, appliance standards, energy efficiency 
building codes, ``Save Energy Now'', and Energy Star rating system, to 
name a few.

               BALANCING RESEARCH WITH DEPLOYMENT FUNDING

    Question. I recognize that money at DOE is being devoted to R&D 
but, voluntary deployment and market transformation programs also are 
needed to move new technologies into the marketplace, and standards and 
codes are needed to set a minimum threshold for using cost-effective 
technologies. By some accounts, just over 50 percent of your $1.24 
billion in your fiscal year 2008 budget request is for research and 
development activities. Is this an appropriate amount? What portion of 
funding is being applied to renewable energy R&D and what portion to 
energy efficiency R&D? What is the Department doing, beyond the basic 
R&D, to transition new technologies into the marketplace on the 
efficiency side?
    Answer. The Office of Energy Efficiency and Renewable Energy (EERE) 
maintains a balanced portfolio of programs to advance renewable power 
generation, diversify transportation fuels, and promote energy 
efficiency. In our fiscal year 2008 request, almost 52 percent is R&D 
with the balance invested in regulation, commercialization and grant 
programs. This balance is appropriate because many of the Department's 
efficiency programs are lower cost programs, such as FEMP, appliance 
standards, energy efficiency building codes, ``Save Energy Now'', and 
Energy Star rating system, to name a few.
    The Office of Energy Efficiency and Renewable Energy (EERE) 
programs related to energy efficiency comprise approximately 46 percent 
of the total EERE proposed fiscal year 2008 budget (including program 
direction and support funds).
    The Department's approach to promoting new technologies couples 
technology push with market demand pull, and works to address barriers 
to the market adoption of advanced technologies through various program 
initiatives. For example, the Department plans to lead by example with 
the Executive Order 13423 and become an early adopter of energy 
efficient and renewable energy technologies. By identifying markets 
where the life-cycle costs of advanced energy technologies currently 
form a compelling economic argument, the Federal Government will create 
demand pull which will increase the economies of scale and drive the 
technologies down the cost curve. The Department is also looking to 
stimulate the commercialization of advanced technologies by bridging 
the gap between R&D and the market place. To this end, the Department 
has designated a Director of Commercialization and Deployment, located 
within the Energy Efficiency and Renewable Energy Program, to oversee 
and guide our deployment-related efforts. However, ultimately 
commercialization decisions are up to industry.

                   WEATHERIZATION ASSISTANCE PROGRAM

    Question. The Weatherization Assistance Program funding has been 
cut from $242.5 million in fiscal year 2006 to $204.5 million in the 
fiscal year spending plan, and the fiscal year 2008 request is for $144 
million. That is a 41 percent cut from fiscal year 2006. Why is the cut 
so significant? Is the Department still interested in moving the 
Weatherization Assistance Program to another Federal agency?
    Answer. The 2007 operating plan optimizes resources and provides 
the appropriate amount of resources to support the achievement of goals 
and priorities. We have chosen to prioritize investments in energy 
efficiency and renewable energy R&D that have multiplicative returns 
such as improvements to appliances and the building envelope that 
affect the whole American population rather than additive returns not 
associated with technological R&D that target a single segment of the 
population. For example, the National Academy of Sciences studied the 
benefits of the energy efficiency portfolio and found that the return 
on the research and development (R&D) investment was roughly 20 to 1. 
In contrast, the Weatherization Assistance Program has a return on 
investment of 1.5 to 1.
    The Department of Energy has no current proposal to move the 
Weatherization Assistance Program to another Federal agency.

                          APPLIANCE STANDARDS

    Question. As you know, DOE has been plagued for years by long 
delays in issuing appliance efficiency standards. So far, you seem to 
be meeting the aggressive schedule you set last year for getting the 
required standards out, and I am pleased that you asked for additional 
funds. However, a recent GAO report said additional changes are needed 
in the program, and I am concerned that recent proposed standards have 
been weak and are not using the tremendous potential of this program to 
address our energy needs.
    The GAO report said the program faces a 600 percent increase in 
workload with a 20 percent resource increase in the fiscal year 2007 
budget. Have you analyzed the staffing and funding requirements to 
carry through the standards plan, and can you share that with us?
    Answer. Yes, the Department has conducted a thorough assessment of 
resource needs for the efficiency standards program. On January 31, 
2006, the Department submitted an aggressive plan to Congress, 
addressing both the history and the future plans for the Appliance 
Standards Program. That plan does in fact commit to a rulemaking 
schedule that is six times the historical rulemaking rate for this 
program. The actions detailed in that plan are expected to dramatically 
increase the efficiency of the process and the output rate. In addition 
in our fiscal year 2007 operating plan, we have directed resources 
necessary to improve the program. Early improvements in the program are 
evidenced by the timely issuance of final test procedures for various 
products and final standards for commercial products, as set out in the 
plan DOE provided to Congress. . Changes in our process include 
implementing product bundling within a single rulemaking and organizing 
staff into seven technology teams.
    Since committing to this schedule for the standards program, the 
Department has met 100 percent of its scheduled deadlines. We have 
completed eight rulemakings since EPACT 2005, including test procedure 
rulemakings and codification of prescribed standards, and have made 
significant progress on others that were underway prior to EPACT 2005. 
In 2006, we initiated standards rulemaking for 12 additional products 
and remain on schedule for all future deadlines.
    Question. Some of the largest possible savings, for example from 
standards on furnace fans and refrigerators, are not included in the 
plan, and thus will not be considered for at least 5 years. Can you 
tell us how much additional resources you would need to begin work on 
the most important standards now?
    Answer. You correctly note that the plan did not include provisions 
for new refrigerator and furnace fan efficiency standards. Current 
statutory requirements for refrigerator standards have been met and 
refrigerators of today consume approximately 70 percent less energy 
than they did in the early 1970s. The Energy Policy Act of 2005 gave 
DOE the authority to set standards for furnace fans but did not specify 
a statutory deadline. The plan provided to Congress is focused on 
implementing all statutorily required rulemakings, which are numerous. 
We continue to evaluate our published schedule for opportunities to 
accelerate and expand to additional products, such as furnace fans, 
while staying on schedule.
    Question. DOE has rejected some recent suggested standards because 
they were not deemed consistent with current law. Do you need any 
additional legal authority to issue standards that make the most sense 
for consumers?
    Answer. In February, Secretary Bodman sent legislation to Congress 
requesting authorization to streamline the standards process and bring 
more efficient products to market sooner. This fast-track legislative 
proposal would allow the Department to move directly to a Final Rule 
for certain products when a clear consensus for a standard exists among 
manufacturers, efficiency advocates, and other stakeholders. By using 
this process, we would be able to promulgate an energy efficiency 
standard directly when all relevant interests jointly have negotiated 
and submitted an agreed proposed standard that meets all statutory 
criteria. In some cases, directly issuing a final rule would shorten 
the time to a completed standard by nearly a third and shave months off 
the rulemaking process. To be clear, if the Department determines that 
a consensus does not exist, this proposal would not preclude 
rulemaking; it would simply require the Department to use the 
traditional three-stage process.
    Other pending legislative proposals would fix various problems with 
the existing statute, provide DOE with needed flexibility in some 
areas, establish statutory efficiency standards for several products, 
and mandate DOE to develop standards for other products. We are hopeful 
that constructive legislation in this area will be enacted before the 
end of this year.

                             BUILDING CODES

    Question. A small DOE program to assist States in setting and 
achieving compliance with their building energy codes leverages a few 
million dollars to improve the efficiency of every new building in much 
of the country. It has been rated the most cost-effective of all DOE 
programs assisting States. Yet the proposed fiscal year 2008 budget 
request would cut it.
    Several studies have shown we are wasting huge amounts of energy 
because of poor compliance with codes. EPACT 2005 authorized a program 
to help States improve compliance. With so much building occurring 
around the country, wouldn't this be a good time to add a little 
funding to help make sure these buildings are up to code?
    Answer. Yes, we are currently restarting and reinvigorating the 
codes program under the fiscal year 2007 Continuing Resolution which 
provided approximately $2 million to the State building energy codes 
activities. The fiscal year 2008 request is $3.8 million. The 
Department has effectively provided technical assistance and training 
through the Building Energy Code Program website, 
(www.energycodes.gov), technical support, web-based training, stand-up 
training, webcasts, and Setting the Standard newsletter. Efficient use 
of funds allows the Department to continue to provide assistance to 
improve compliance to national, regional, and State building code 
officials and stakeholders. For example, there are over 3 million hits 
a month on the Department's www.energycodes.gov website and some 6,000 
residential code compliance tools are downloaded monthly by designers, 
builders and code officials. The Department trains approximately 2,000 
code officials, designers, and builders to implement these codes and 
updates and improves the core materials and code compliance software to 
reflect recent changes in the model energy codes and emerging energy 
efficiency technologies.

                   FEDERAL ENERGY MANAGEMENT PROGRAM

    Question. I understand that you are big supporter of improving 
energy efficiency in Federal facilities. I am concerned about the 
ability of your office to sufficiently train, educate, and support 
other agencies of the Federal Government related to the Federal Energy 
Management Program (FEMP). In January, President Bush signed an 
Executive Order with new and updated energy savings targets and other 
requirements. Yet the proposed budget would cut the Federal Energy 
Management Program, which leads the Government-wide effort to save 
energy, by another 12 percent.
    What is DOE's role in implementing the new Executive Order? What 
funding is provided in the budget for this purpose?
    Wouldn't additional funding for FEMP save the Federal Government 
more money than it would cost by reducing energy waste?
    Answer. The Department's role is to provide specific and 
authoritative guidance to Federal agencies on the provisions of the 
Executive Order and to support agency efforts to meet the goals through 
assistance with third party financing and design assistance. Virtually 
all of FEMP's fiscal year 2008 budget request of $16.8 million will be 
used for the implementation of the Executive Order and associated 
statutory requirements in some way.
    The private sector will be the most important funding source for 
saving energy at Federal agencies. FEMP's third party financing 
activities, in conjunction with the private sector, can potentially 
fund projects needed to meet the Executive Order goals.

                            PUBLIC EDUCATION

    Question. Public education is the quickest way to reduce energy use 
and address current energy prices and supply-demand imbalance. Yet 
there is almost no money for public education on energy efficiency in 
the budget, despite a $90 million authorization in EPACT 2005.
    How much funding would be available for proactive energy-efficiency 
public education programs under this budget? Where is that funding in 
the budget?
    What is your plan for using those funds, including plans for 
partnering or contracting with other organizations?
    Answer. Within our fiscal year 2008 budget request, we include $4.9 
million in funding to support public information activities within our 
Program Support budget line and within each program's budget.
    The funding supports a range of activities and programs including 
websites, Energy Saver fact sheets, development of publications, the 
EnergyStar program, and the Energy Efficiency and Renewable Energy 
Information Center. In the past we have partnered with the 
Environmental Protection Agency (EPA), the Alliance to Save Energy, 
retailers and utilities to promote energy efficiency through public 
awareness campaigns such as ``Powerful Savings,'' ``Easy Ways to Save 
Energy'' and the ``Power Is In Your Hands.'' We have also collaborated 
with EPA and retailers to promote EnergyStar qualified products through 
the EnergyStar program. The 2008 budget supports our partnerships with 
business and non-governmental organizations to help leverage funding to 
promote education on energy efficient technologies and products as well 
as alternative sources of energy and fuel.

                              OIL SAVINGS

    Question. In the State of the Union address, President Bush called 
for reducing our gasoline use by 20 percent in 10 years. This budget 
increases some budget areas important to that goal, such as DOE's 
Biomass program, but decreases others, including DOE's Vehicle 
Technologies program.
    If we are serious about addressing our ``addiction'' to oil, don't 
you think we need to invest more in vehicle efficiency as well as in 
new fuels, and in improving trucks and buses as well as cars?
    Answer. The Department's balanced portfolio of investments 
addressing both efficiency improvements and alternative energy sources 
outlined in the 2008 budget optimizes the use of resources and supports 
the achievement of stated goals. The 2008 Budget for the Vehicle 
Technologies Program is approximately $10 million above the 2007 
request. Most of the increase is to support the development of plug-in 
hybrid technologies, which show great promise of increasing light duty 
vehicle fuel economy.
    Question. The president's goal assumes a 4 percent annual fuel 
economy improvement in new cars and light trucks, but the light truck 
fuel economy standards issued so far only increase by 2 percent a year. 
What will change to get a 4 percent increase in the future? Do we need 
more research to support this goal?
    Answer. The President's goal to reduce gasoline consumption is 
ambitious and would require the use of more advanced fuel economy 
technologies in the new vehicle fleet. The Department believes that 
accelerated consumer adoption of hybrid and plug-in hybrid electric 
vehicles and advance combustion engines offers the potential to 
significantly reduce oil consumption in the near-term. However, any 
requirements to improve new car and light truck fuel economy would also 
have to be technologically feasible, economically practicable, and 
ensure that vehicle safety is not compromised.
    The Department of Energy's role in this effort is to accelerate 
advanced technology vehicles including through significant new 
investments in advanced batteries for hybrid and plug-in hybrid 
electric vehicle applications. Also, the Department is continuing 
research and development of advanced combustion engines to address the 
technical barriers to the commercialization of more efficient advanced 
internal combustion engines. Specific goals for combustion research are 
to improve, by 2012, the efficiency of internal combustion engines from 
30 percent to 45 percent for light-duty applications while meeting 
cost, durability, and emissions constraints.

                   EPACT 2005 AND GEOTHERMAL PROGRAMS

    Question. The Energy Policy Act of 2005 provides specific 
directives for DOE's renewable energy research efforts. In general, the 
overall approach is spelled out in section 931, which states: (a)(1) 
OBJECTIVES.--The Secretary shall conduct programs of renewable energy 
research, development, demonstration, and commercial application, 
including activities described in this subtitle. Such programs shall 
take into consideration the following objectives: (A) Increasing the 
conversion efficiency of all forms of renewable energy through improved 
technologies. (B) Decreasing the cost of renewable energy generation 
and delivery. (C) Promoting the diversity of the energy supply. (D) 
Decreasing the dependence of the United States on foreign energy 
supplies. (E) Improving United States energy security. (F) Decreasing 
the environmental impact of energy-related activities. (G) Increasing 
the export of renewable generation equipment from the United States.
    Subsection (c) of this section of EPAct specifically provides 
direction for geothermal energy research. It states:
    GEOTHERMAL.--The Secretary shall conduct a program of research, 
development, demonstration, and commercial application for geothermal 
energy. The program shall focus on developing improved technologies for 
reducing the costs of geothermal energy installations, including 
technologies for: (i) improving detection of geothermal resources; (ii) 
decreasing drilling costs; (iii) decreasing maintenance costs through 
improved materials; (iv) increasing the potential for other revenue 
sources, such as mineral production; and (v) increasing the 
understanding of reservoir life cycle and management.
    For the fiscal year 2007 Spending Plan and the fiscal year 2008 
budget request, how do the Department's decisions in each of those 
documents with respect to the geothermal energy research and 
development program comport with the statutory direction provided by 
Congress in section 931 of Public Law 109-58?
    Answer. Since the 1970s, the Department of Energy has conducted a 
research and development program in geothermal technology valued in 
excess of $1.3 billion. That investment has helped to produce the 
strong market for geothermal energy we see today. In fiscal year 2007 
and fiscal year 2008, the Department requested zero funds for the 
Geothermal Program because the program has achieved key research 
objectives for conventional hydrothermal technology development and 
there are substantial incentives that support the near-term development 
of the technology and deployment of the geothermal resource base. 
Consequently, power production from high-temperature, shallow resources 
is now a relatively mature technology. Projects under construction, or 
which have both power purchase agreements and are undergoing production 
drilling, amount to 489 megawatts in eight Western States. The fiscal 
year 2007 operating plan for the Department included $5 million to 
support geothermal power co-produced with oil and gas demonstration 
efforts, for an evaluation of enhanced geothermal systems to help 
industry prioritize its technology needs, and to bring to completion 
selected projects on exploration, drilling, and/or conversion 
technologies. In addition, some fiscal year 2006 unspent or uncosted 
funds will also be used to conclude research projects on exploration, 
drilling, and/or conversion technologies.

  GEOTHERMAL PROGRAM AND THE NATIONAL RESEARCH COUNCIL RECOMMENDATIONS

    Question. The administration's repeated efforts to close down and 
defund the geothermal research program also appears to contradict the 
recommendations of the last external review of the Department of 
Energy's renewable programs, the 2000 report of the National Research 
Council entitled Renewable Power Pathways. That National Research 
Council's examination of the geothermal program states in clear terms 
the importance of the program, and the recommendation that it continue 
to be funded: ``In light of the significant advantages of geothermal 
energy as a resource for power generation, it may be undervalued in 
DOE's renewable energy portfolio.''
    Does the Department agree with the National Research Council that 
the U.S. geothermal resource base holds significant potential to 
contribute to national energy needs?
    What actions did the Department take to implement the 
recommendations made by the National Research Council in 2000?
    Has the Department had further communications with the National 
Research Council about its assessment and any follow-up by the 
Department?
    Answer. Yes, the U.S. geothermal resource base is large, and can 
contribute to diversification of our national energy portfolio through 
increased private sector development. DOE's Geothermal Program has 
achieved its key research objectives for conventional geothermal 
resources. There are substantial incentives that support development of 
the geothermal resource base without further investment in R&D. The 
fiscal year 2007 operating plan for the Department included $5 million 
to support geothermal power co-produced with oil and gas demonstration 
efforts, for an evaluation of enhanced geothermal systems to help 
industry prioritize its technology needs, and to bring to completion 
selected projects on exploration, drilling, and/or conversion 
technologies. In addition, some fiscal year 2006 unspent or uncosted 
funds will also be used to conclude research projects on exploration, 
drilling, and/or conversion technologies.
    Since 2000, the Department has taken actions to implement all 10 
recommendations made by the National Research Council. These actions 
include new or expanded research initiatives, technology demonstration 
projects, increased collaboration with other agencies, and improved 
international cooperation.
    The Geothermal Program has not had any further communication with 
the National Research Council; however the Department has continued to 
work with the National Research Council in other areas of renewable 
energy.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein

                         GEOTHERMAL TERMINATION

    Question. The President's budget for fiscal year 2008 proposes to 
eliminate funding for geothermal energy research. Based on reports by 
the National Renewable Energy Laboratory (NREL) and the Massachusetts 
Institute of Technology, the Geothermal Energy Association estimates 
that, with a relatively small amount of research funding, geothermal 
energy can meet up to 20 percent of U.S. power needs by 2030. Please 
answer the following questions:
    Given the critical need to develop low-carbon electricity 
generation technologies, why does the DOE propose to stop conducting 
research into geothermal energy?
    Answer. The Department's geothermal program has achieved its key 
research objectives and there are substantial incentives that support 
the near-term development of the technology and deployment of the 
geothermal resource base. Geothermal power production from high-
temperature, shallow resources is now a relatively mature energy 
technology. Projects under construction, or which have both Power 
Purchase Agreements and are undergoing production drilling, amount to 
489 megawatts in eight Western States. The Western Governors 
Association geothermal task force recently identified over 100 sites 
with an estimated 13,000 megawatts of near-term power development 
potential.

                    WIND AND SOLAR PRODUCTION COSTS

    Question. The Massachusetts Institute of Technology (MIT) has 
released a report suggesting that, for less than the cost of a single 
clean-coal power plant, the United States could conduct the research 
needed to enable production of up to 100 GWe of low carbon energy from 
enhanced geothermal systems by 2050. How much would it cost for EERE 
research programs to enable production of 100 GWe of energy from wind 
and solar sources by 2050?
    Answer. The primary factors contributing to production of 100 GWe 
of wind and solar energy are no longer exclusively or even 
substantially driven by government funded research projects. The rate 
at which potential capacity is converted to productive projects will 
depend on the amount and type of private capital investments in 
projects, and on the durability and scope of policy incentives. The 
goal of the Wind Program and Solar Program is to enable these renewable 
energy technologies to compete with conventional electricity throughout 
the Nation by helping to reduce costs. Under the President's Solar 
America Initiative, the goal is to improve the performance and reduce 
the cost of solar energy systems to make photovoltaics cost-competitive 
with conventional electricity sources by 2015. The President's fiscal 
year 2008 budget request of $40 million for wind and $148 million for 
solar contributes to these goals being met. Also, the Department's 
investment in technology development of next-generation systems may 
help enable solar companies to invest more private capital in scaling 
up manufacturing, as well as accelerate cost reductions to help 
increase demand for solar as it reaches cost-competitiveness in more 
markets.
    If the research goals are met, DOE estimates 177 GW of wind power 
and 190 GW of solar power by 2050. These estimates are in accordance 
with the Government Performance and Results Act (GPRA) analysis that 
accompanies the President's budget.

                      ENHANCED GEOTHERMAL SYSTEMS

    Question. The Massachusetts Institute of Technology (MIT) report 
only considers the potential to tap geothermal energy from putative 
``Enhanced Geothermal Systems (EGS).'' What is the additional untapped 
capacity of more conventional geothermal technologies? How much of this 
capacity could be tapped by 2030 with sustained investment of $50-$100 
million per year? By 2050?
    Answer. Currently, conventional geothermal production is 
approximately 3,000 MWe. A recent Western Governor's Association report 
indicates that there is potential for up to 5,600 MWe by 2015.
    The rate at which potential capacity is converted to productive 
projects will largely depend on the amount and type of private capital 
investments in projects.
    Question. In the Energy Policy Act (EPACT), the Secretary of Energy 
was instructed to ``promulgate regulations which describe in detail 
methods for calculating and verifying energy and power consumption and 
cost, based on the provisions of the 2005 California Non-Residential 
ACM manual.'' Please answer the following questions:
    What is the DOE's progress towards this goal?
    Can DOE provide a detailed comparison between proposed regulations 
and the California Non-Residential ACM manual, with justification for 
deviations? If not, how much additional funding is needed to complete 
this effort?
    If such funding were provided, when would these new regulations be 
issued?
    Answer. EPACT section 1331 directs the Secretary of the Treasury, 
in consultation with the Secretary of Energy, to promulgate methods of 
calculation for energy consumption and cost. On June 26, 2006, the 
Department of the Treasury and the Internal Revenue Service (IRS) 
issued Notice 2006-52, Deduction for Energy Efficient Commercial 
Buildings, that set interim guidance relating to the deduction for 
energy efficient commercial buildings under  179D of the Internal 
Revenue Code. The Department of Energy provided technical guidance for 
the Notice. It is my understanding that Treasury elected to adopt the 
provisions of the California ACM manual that do not conflict with 
ASHRAE Standard 90.1-2001.
    At this time, the IRS has only promulgated interim guidance in 
advance of proposed regulations. The justification for any potential 
deviation from the California manual and proposed Federal rules would 
rest with the Department of Treasury.
    At this time, I am not able to provide an answer as to when the 
Department of Treasury might request funding for this rule nor when 
Treasury might promulgate a proposed rule.
    Question. Can DOE provide similar updates for progress towards all 
other energy efficiency regulatory requirements of the Energy Policy 
Act (EPACT)?
    Answer. I am pleased to report progress on a number of energy 
efficiency requirements of EPAct. On January 31, 2006, the Department 
submitted a report to Congress on its standards activities prepared in 
response to section 141 of EPACT 2005. The report publicly laid out our 
action plan and schedule for rulemakings out to the year 2011. Since 
committing to this schedule for the standards program, the Department 
has met 100 percent of its targets. We have completed eight rulemakings 
since EPACT 2005, including test procedure rulemakings and codification 
of prescribed standards, and have made significant progress on others 
that were underway prior to EPACT 2005. The Department has also 
established guidelines regarding the use of energy metering in Federal 
buildings, as outlined in section 103. A standard for premium efficient 
electric motors was published in the Federal Register on August 18, 
2006, per section 104. The section 109 requirement for a determination 
on whether the revised ASHRAE (American Society of Heating, 
Refrigeration and Air-Conditioning Engineers) code requires revisions 
to Federal building performance standards is on track. In addition, an 
acquisition plan for an energy efficiency pilot program for states has 
been completed and a procurement requirements document developed to 
fulfill section 140.

                   GLOBAL NUCLEAR ENERGY PARTNERSHIP

    Question. The Department of Energy's Office of Nuclear Energy (DOE-
NE) has given many different reasons for the need to invest in the 
nuclear fuel reprocessing aspects of the Advanced Fuel Cycle Initiative 
through the program known as the ``Global Nuclear Energy Partnership 
(GNEP).'' This initiative represents a significant change from long-
standing U.S. nuclear policy, but no consensus has been established and 
program goals have not yet been fully vetted by an independent 
authority. The President's budget requests an increase of $152 million 
over fiscal year 2007 levels for this program, and an even greater 
increase with respect to fiscal year 2006 levels. These increases are 
much greater than the combined increases for research into all 
renewable resources such as wind, solar, geothermal, and biological. 
Please answer the following questions:
    What is the primary justification for this program? In order of 
priority, what are the secondary justifications for this program?
    Answer. Today, 103 nuclear reactors generate roughly 20 percent of 
America's electricity. U.S. electricity demand is anticipated to grow 
50 percent over the next 25 years--the equivalent of 45 to 50 one-
thousand megawatt nuclear reactors must be built just to maintain that 
20 percent share. With nuclear power as the only proven base load 
producer of electricity that does not emit greenhouse gases with the 
ability to increase output substantially, it is vital that our current 
fleet of reactors be expanded in order to meet our needs for carbon-
free, dependable and economic electric power.
    Any serious effort to stabilize greenhouse gases in the atmosphere, 
while providing the increasing amounts of energy needed for economic 
development and growth, requires the expanded use of nuclear energy. 
This will inevitably require us to address the spent fuel and 
proliferation challenges that confront the expanded, global use of 
nuclear energy. To meet these challenges, the Department initiated the 
Global Nuclear Energy Partnership (GNEP), a comprehensive approach to 
enable an expansion of nuclear power in the United States and around 
the world, promote non-proliferation goals, and help minimize the 
amount of nuclear waste disposal.
    Additionally, many formerly non-nuclear countries are now 
considering the nuclear option to meet their energy needs. It is vital 
for the United States to be able to influence the safety, security and 
proliferation characteristics of nuclear reactors intended for these 
emerging nuclear states, as well as position U.S. industry for 
leadership in this growing international market. Together with the 
assurance of reliable fuel services, GNEP provides an attractive energy 
solution for many countries that could serve to eliminate the need for 
them to develop the more proliferation-vulnerable parts of the nuclear 
fuel cycle. Coupled with the spent fuel recycling and actinide burning 
technologies of GNEP, the United States has the potential to meet its 
growing energy demands and those of developing countries in a manner 
that minimizes potential negative impact to the United States and the 
world.
    Question. The GNEP implementation plan calls for rapid construction 
of demonstration facilities for nuclear fuel reprocessing. Can you 
provide a consensus statement from our international partners 
describing what their contribution will be and what their requested 
contribution from the United States is?
    If such a consensus is not available, then what level of funding is 
needed to establish the needed international consensus prior to 
building new facilities on U.S. soil? Please justify.
    Answer. Discussions are currently in progress with several of our 
international partners to help define the parameters of and potential 
deployment strategies for the GNEP facilities. Those discussions are 
not yet at the point where a consensus on the amount of cost sharing, 
or if cost share at all, could be established. At this time, given the 
undefined technical, political, financial, and strategic aspects of 
GNEP, it is not possible to pursue quantitative discussions with our 
partners. Likewise, those same undefined factors render it impractical 
to make a reasonable estimate of the level of funding required to 
establish an international consensus prior to constructing the GNEP 
facilities in the United States. When GNEP has developed sufficiently 
to develop those estimates, the Department would be able to provide 
them.
    Question. In his statement, Assistant Secretary Spurgeon stated 
that ``Any serious effort to stabilize greenhouse gases in the 
atmosphere, while providing the increasing amounts of energy needed for 
economic development and growth, requires the expanded use of nuclear 
energy''. No further documentation was provided to support this 
conclusion. Can DOE provide a comparison of the complete lifecycle 
costs to produce nuclear energy and safely manage nuclear waste as 
compared to producing a comparable amount of energy from renewable 
energy resources? If such a comparison cannot be provided, then please 
provide scientific, peer-reviewed support for this statement.
    Answer. A recent study by the European Commission (``External 
Costs--Research results on socio-environmental damages due to 
electricity and transport,'' European Commission, 2003, p. 12, [http://
ec.europa.eu/research/energy/pdf/externe_en.pdf]) states, ``Nuclear 
power in general generates low external costs, although the very low 
probability of accidents with very high consequences and the fuel cycle 
impacts are included. It is also a technology with very [lifecycle] low 
greenhouse gas emissions.'' On page 13 of the report, a table shows 
that nuclear power's external costs are on a par with renewables. While 
this study considered European experiences, it is expected the 
situation in the United States would not differ significantly.
    Other reports may contradict this. What can be said is that there 
is currently in operation no clean, base-load, fossil-fuel power-
generation technology; solar and wind power have great potential in 
their limited ranges of operations; hydroelectric is essentially fully 
subscribed; and that leaves nuclear power. Nuclear power now provides 
over two-thirds of our Nation's non-emitting electricity while 
renewables, primarily hydropower, account for the rest. Until such time 
as we can efficiently store the power produced by wind and solar power, 
they will continue to augment but cannot replace base-load power 
generation. Nuclear power is the only non-emitting technology that is 
ready today to be deployed in quantities sufficient to meet our growing 
demand for electricity.

                             FOSSIL ENERGY

    Question. The Department of Energy's Office of Fossil Energy (DOE-
FE) has proposed extensive new investments in coal energy, yet proposes 
cuts in funding for oil and gas research. Acting Assistant Secretary 
Shope justifies this change with an argument that can be summarized as, 
``because coal is a critical domestic energy resource today, it will 
continue to be so in the future.'' This may happen, but continued 
innovation may well replace coal with improved new technologies. Coal 
is a valuable energy resource over the near-term, but its long-term 
future is still uncertain. Please answer the following questions:
    A recent study by the Climate Group indicates that the global 
market for biofuels, wind power, solar photovoltaic, and fuel cells 
will be $167 billion by 2015; with $523 million of venture capital 
invested in these technologies in California in 2005. What is the 
comparable global market for clean coal technologies? How will 
continued investment in coal research and development improve American 
competitiveness in a global, carbon-constrained economy? How does the 
return on investment for coal compare to that for other technologies?
    Answer. Recent estimates indicate large markets for clean coal 
technologies through the near-term and continuing out to 2030. The 
International Energy Agency (IEA) World Energy Outlook (WEO) 2006 
projects that coal will remain the dominant source of electricity to 
2030 in both scenarios investigated (a reference scenario and an 
alternate scenario that significantly reduces the rate of increase in 
demand and emissions). Coal-based power generation in 2030 will be at 
least 60 percent higher than today, remaining the world's largest 
source of electricity in 2030. Investment in electricity generation is 
expected to exceed $5.2 trillion cumulatively by 2030, resulting in 
more than 5000 GW of new capacity. Over 144 GW of integrated 
gasification combined cycle (IGCC) capacity is expected over that 
timeframe. Assuming a conservative capital cost of $1,000 per kilowatt 
for new coal plants, this equates to roughly a $150 billion market for 
the expected new IGCC plants alone.
    With the increased demand for coal, R&D investments in clean coal 
technology development aimed at near-zero emissions, while improving 
its efficient use, could help coal remain a competitive and 
environmentally-sound energy option for future generations of power 
plants, as well as for production of alternative fuels. As energy 
demand rises, coal will continue to compete by deploying new systems 
and innovative technologies that will keep it, and the existing fleet 
of coal-fueled generating stations, viable well into the future.
    We will continue to rely on all forms of energy sources to meet the 
growing energy needs. Coal will continue to be relied upon for baseload 
power generation. Continued investment in coal R&D (including low cost 
carbon capture and storage) will help produce clean, economical, and 
efficient coal-based power plants to keep the United States at a 
competitive advantage and poised to take advantage of global 
opportunities even in a carbon-constrained scenario. Meeting future 
global energy needs will require the introduction of a variety of 
technologies to meet growing electricity demands with stringent 
emission regulations. Coal will remain in the near-term and beyond.
    Question. The United States Geological Survey (USGS) has recently 
completed a series of studies indicating that only 10-20 percent of 
total U.S. coal resources may be economically recoverable. How does 
this compare with prior estimates by the Department of Energy? If the 
USGS estimates are correct, to what extent does this limit the 
capability of coal to power America's future?
    Answer. The Department of Energy's coal resource estimates are all 
based on U.S. Geological Survey (USGS) data. It is our understanding 
that USGS has not completed any full basin studies that validate the 
findings of the several local studies referred to. We look forward to 
reviewing the systematic inventory of the U.S. coal reserve base 
currently underway by the USGS, once it is available. The coal resource 
in the United States is vast; estimated to be 4,000 to 9,600 billion 
tons. Current usage is about 1 billion tons/year. Coal will be able to 
power America for the foreseeable future.
    Question. Energy experts at the Electric Power Research Institute 
(EPRI) have suggested that the technology to separate carbon dioxide 
from the emissions of coal fired utilities is ready for commercial 
demonstration, and that the biggest challenge is demonstrating the 
ability to safely sequester carbon dioxide. Is this true? If so, then 
why does the proposed fiscal year 2008 budget direct significantly more 
funding to research into coal combustion and carbon dioxide separation 
than to research into carbon sequestration?
    Please provide a comparison between total requested funding for 
carbon sequestration, and that for coal combustion and carbon capture.
    Answer. The emphasis of the funding for Carbon Sequestration 
(capture and storage) remains focused on the storage component of 
sequestration, including CO2 field injection tests. However, 
cost and efficiency penalties of existing capture technologies remain a 
challenge in terms of affordability and net plant output impacts. While 
certain post-combustion CO2 capture technologies, such as 
amine-based systems, could be ready for commercial demonstration in the 
next several years, several other advanced systems are only at the 
laboratory, bench-, and pilot-scale stage of development. Because of 
differences in plant age, size, configuration, and other site-specific 
factors, it is expected that a suite of CO2 capture 
technologies will be employed by electric utilities in order to achieve 
significant reductions in emissions from coal-based power plants 
without significantly increasing the cost of electricity.
    The Department of Energy (DOE) estimates that based on current 
amine scrubbing technology, the removal of CO2 from the flue 
gas of an existing coal-fired power plant would constitute as much as 
90 percent of the total cost of carbon capture, transport, and storage. 
Hence, the criticality of continued research and development of 
CO2 capture technologies. DOE's coal program targets 
improved performance and cost savings based on a system-wide approach 
that targets the most effective avenues for advancing carbon capture 
and storage technology. DOE conducts R&D on technologies that will 
enable carbon capture and storage in the following program areas: 
Integrated Gasification Combined Cycle, Turbines, Sequestration, Fuels, 
Fuel Cells, and Advanced Research.
    The DOE Carbon Sequestration Program aims to develop technologies 
that will lower both the cost of the carbon capture technology, but 
also the amount of additional power capacity required due to efficiency 
loses. It is the goal of the Program, by 2012, to develop technologies 
resulting in less than a 20 percent increase in the cost of electricity 
for post-combustion capture and oxycombustion technologies. Pre-
combustion (integrated gasification combined cycle related) 
technologies are targeting less than a 10 percent increase in the cost 
of electricity. Of the approximately $86 million requested for the 
Carbon Sequestration Program (including roughly $7 million of R&D by 
Federal employees under the Program Direction line item), about $15 
million (or about 18 percent) is intended to be used for carbon capture 
technology research. These technologies are based on application to 
both coal combustion and gasification systems.
                                 ______
                                 
                Questions Submitted by Senator Jack Reed

                     EPACT AND EFFICIENCY PROGRAMS

    Question. Mr. Karsner, you have recognized energy efficiency as a 
critical response to the Nation's energy challenges, but the budget 
proposed by the President does not. Funding for the President's 
Advanced Energy Initiative programs is coming mostly from cuts in 
efficiency programs. Given that efficiency is the Nation's fastest and 
most abundant clean energy resource, how can you justify a budget that 
continues to cut research, development, and deployment in this 
strategically critical area? Do you believe that the funding for 
energy-efficiency programs in the budget match the Nation's need for 
saving energy? What would be the impacts of the proposed budget cuts, 
including for industrial and vehicles R&D, and for weatherization 
assistance?
    Answer. The fiscal year 2008 budget adequately funds a balanced 
portfolio of activities at levels that support achievement of programs' 
goals. It is important to note that the Office of Energy Efficiency and 
Renewable Energy (EERE) programs related to energy efficiency comprise 
approximately 46 percent of the total EERE proposed fiscal year 2008 
budget (including program direction and support funds). For example, 
the Building Technologies Program budget request is $9.1 million 
greater than the fiscal year 2007 request and the Vehicle Technologies 
Program budget request is $10.1 million greater than the fiscal year 
2007 request and the Industrial Technologies Program is $435,000 
greater than the fiscal year 2007 request.
    EERE maintains a balanced portfolio that uses an integrated 
strategy of energy efficiency and renewable energy to increase our 
energy security and reduce our dependence on oil. The 2008 budget 
request optimizes resource use and appropriately funds all energy 
efficiency programs to support achievement of stated goals.
    The fiscal year 2008 budget request includes funding increases for 
both the Industrial Technologies Program and the Vehicle Technologies 
Program. In general we have chosen to prioritize investments in energy 
efficiency and renewable energy R&D that have multiplicative returns 
such as improvements to appliances and the building envelope that 
affect the whole American population rather than additive returns not 
associated with technological R&D that target a single segment of the 
population. For example, the National Academy of Sciences studied the 
benefits of the energy efficiency portfolio and found that the return 
on the research and development (R&D) investment was roughly 20 to 1. 
In contrast, the Weatherization Assistance Program has a return on 
investment of 1.5 to 1.
    Question. Mr. Karsner, the Energy Policy Act of 2005 (EPACT 2005) 
authorized a number of new energy-efficiency programs on public 
education, utility efficiency programs, building codes, appliance 
rebates, and other areas. Are any new energy-efficiency programs 
authorized in EPACT funded in the proposed budget? Does this budget 
allow you sufficient funding to implement the energy bill, including 
the added requirements on the appliance standards, Federal energy 
management, and Energy Star programs?
    Answer. Yes, we are implementing numerous energy efficiency 
programs authorized by EPACT 2005. Here are some selected examples. The 
fiscal year 2008 requests funds for the establishment of new 
EnergyStar qualification levels for clothes washers, as directed in 
EPACT section 131; the issuance of grants to establish Advanced Energy 
Efficiency Technology Transfer Centers as directed in EPACT section 
917; reporting on the establishment of a program to inform the public 
on various aspects of energy efficiency as directed in section 134 and 
developing the next generation of low-emission, high efficiency diesel 
engine technologies as directed in section 754. We have also requested 
funds under section 140 to provide financial assistance to States to 
carry out energy efficiency pilot programs.
    Yes, the fiscal year 2008 budget request includes adequate funding 
for a balanced portfolio that supports achievement of goals, including 
sufficient funding for appliance standards, Federal energy management 
and EnergyStar.

                    WEATHERIZATION FUNDING DECREASE

    Question. Mr. Karsner, I led a bipartisan letter to Secretary 
Bodman supporting the fiscal year 2007 funding level of $242.5 million 
for Weatherization. You chose to cut that program to $204.5 million, 
and in recent House testimony I think you referred to Weatherization as 
a ``welfare program.'' As you know, in the fiscal year 2007 
Supplemental Appropriations bill passed by the Senate, we included an 
additional $25 million for Weatherization. Weatherization provides 
almost 25 percent in energy savings for every house we improve, and 
well over 100,000 homes were done this past year. It is clearly a 
successful deployment program that helps lower-income homeowners and 
neighborhoods today. It is not a welfare program, it is an energy 
program. With the administration's support and focus on reducing energy 
demands, why wouldn't you also strongly support Weatherization?
    Answer. The 2008 budget optimizes resources and adequately supports 
the achievement of the program's goals and priorities. We have chosen 
to prioritize investments in energy efficiency and renewable energy R&D 
that have multiplicative returns such as improvements to appliances and 
the building envelope that affect the whole American population rather 
than additive returns not associated with technological R&D that target 
a single segment of the population. The National Academy of Sciences 
studied the benefits of the energy efficiency portfolio and found that 
the return on the research and development (R&D) investment was roughly 
20 to 1. In contrast, the Weatherization Assistance Program has a 
return on investment of 1.5 to 1.

             INDUSTRIAL EFFICIENCY PROGRAM FUNDING DECREASE

    Question. Mr. Karsner, the industrial energy efficiency program has 
been slashed from well over $100 million just a few years ago to 
approximately $50 million in fiscal year 2007. The fiscal year 2008 
budget request would further reduce this effort. With over one-third of 
our energy use in this sector, what is the justification for this cut?
    Answer. The fiscal year 2008 request for the Industrial 
Technologies Program (ITP) is $435,000 higher than the fiscal year 2007 
request. Also, under the discretion given to the Department by Congress 
under the fiscal year 2007 Continuing Resolution, this program was 
increased by $11 million. ITP has historically worked with the eight 
most energy-intensive manufacturing industries to research, develop, 
and implement advanced technologies that save energy, reduce costs, and 
improve environmental performance. These activities have contributed to 
significant reduction in energy use. As the program evolves, we are 
seeking more effective and efficient ways to develop technologies that 
are high impact and applicable to multiple industries. ITP has 
developed a new strategy with more emphasis on crosscutting R&D which 
will allow ITP to continue partnership with end-user industries while 
broadening industry participation to include other growth industries 
and technology developers.

            MATERIALS MANUFACTURING AND INDUSTRIAL MATERIALS

    Question. Mr. Karsner, in fiscal year 2006, research and 
development for the materials manufacturing industry was $21 million. 
There is only $9 million in your budget for fiscal year 2008, a 55 
percent cut, and research and development for industrial materials is 
slashed by 57 percent to $5 million. These low numbers reflect a 
decision to back away from development of key new technologies that 
could significantly strengthen our manufacturing global competitiveness 
while reducing carbon emissions in a sector that consumes more energy 
than any other sector of the economy. Materials manufacturers co-fund 
this research and development effort and outlined a program in the 
range of $250 million to support the development of the next generation 
of production process technologies needed by their industries to be 
able to dramatically reduce their energy use per unit of output, cut 
carbon emissions, and compete globally. What is the rationale for 
cutting back investment in research and technology in materials 
manufacturing and industrial materials?
    Answer. The Industrial Technologies Program (ITP) has invested 
approximately $21 million in fiscal year 2006 through the Industries of 
the Future on technology development, focusing on industry-specific 
research needs. However, ITP is seeking more effective and efficient 
ways to develop technologies that have higher impacts and are 
applicable to multiple industries. ITP has developed a new strategy 
with more emphasis on crosscutting R&D which will minimize duplicative 
efforts and allow ITP to develop technologies meeting the needs of 
multiple industries. This approach will also accelerate technology 
development with broader industry participation to include other growth 
industries and technology developers. Materials manufacturing R&D will 
continue to play an important part of this program.

                      ``SAVE ENERGY NOW'' CAMPAIGN

    Question. Mr. Karsner, EERE has implemented the ``Save Energy Now'' 
campaign to audit the 200 largest industrial customers/facilities in 
the United States. Could you specifically detail what facilities have 
been audited and most importantly, what energy measures have been 
implemented in those facilities? If changes have not been implemented, 
could you please explain why? Do you think funding support through the 
industrial program would help on the implementation side?
    Answer. As of December 31, 2006, the first 200 Energy Savings 
Assessments, with the firms listed in the following pages, were 
conducted. Several companies had more than one plant audited. 
Approximately half a billion dollars per year in energy savings was 
identified from those audits. Typical energy savings identified 
consisted of 5 to 15 percent of a plant's total energy use, consistent 
with a potential reduction of 3.3 million tons per year in 
CO2 emissions. The audited firms are being contacted 6 
months, 1 year, and 2 years after the audit to determine implementation 
of these recommendations. To date, the energy measures most commonly 
implemented in the plants as a result of these audits are in the areas 
of process heat and steam.
    It is entirely the choice of the audited company as to whether 
savings recommendations are implemented and the cost-effectiveness of 
the recommendations is dependent on interest rates, and equipment, 
labor, materials prices, and other considerations in addition to the 
energy prices. Often the purchases must wait for the next capital 
acquisition cycle or the next time that the plant shuts down for 
routine maintenance. Nevertheless, as of April 24, 2007, $116 million 
of the potential $494 million per year of energy savings has already 
been implemented or is in the process of being implemented.
    The fiscal year 2008 budget funding level is appropriate and 
sufficient to support achievement of the program's mission and goals. 
The program is not designed to be an implementation mechanism--it is 
the choice of the audited company as to whether it is worthwhile and 
cost-effective to implement the audit findings. The Save Energy Now 
initiative has demonstrated it can provide useful information to inform 
these industry decisions.

                     APPLIANCE EFFICIENCY STANDARDS

    Question. Mr. Karsner, DOE has been plagued for years by long 
delays in issuing appliance efficiency standards. So far you seem to be 
meeting the aggressive schedule you set last year for getting the 
required standards out, and I am pleased that you asked for additional 
funds. However, a recent GAO report said additional changes are needed 
in the program, and I am concerned that recent proposed standards have 
been weak and are not using the tremendous potential of this program to 
address our energy needs.
    The GAO report said the program faces a 600 percent increase in 
workload with a 20 percent resource increase in the fiscal year 2007 
budget. Have you analyzed the staffing and funding requirements to 
carry through the standards plan, and can you share that with us?
    Some of the largest possible savings, for example from standards on 
furnace fans and refrigerators, are not included in the plan, and thus 
will not be considered for at least 5 years. Can you tell us how much 
additional resources you would need to begin work on the most important 
standards now? DOE has rejected some recent suggested standards because 
they were not deemed consistent with current law. Do you need any 
additional legal authority to issue standards that make the most sense 
for the American people?
    Answer. Yes, the Department has conducted a thorough assessment of 
resource needs for the efficiency standards program. On January 31, 
2006, the Department submitted an aggressive plan to Congress, 
addressing both the history and future plans for the Appliance 
Standards Program. That plan does in fact commit to a rulemaking 
schedule that is six times the historical rulemaking rate for this 
program. The actions detailed in that plan will dramatically increase 
the efficiency of the process and the output rate. In addition, in the 
2007 operating plan and 2008 budget, the Department directed resources 
to support these efforts. Changes in our process include implementing 
product bundling within a single rulemaking and organizing staff into 
seven technology teams.
    Since committing to this schedule for the standards program, the 
Department has met 100 percent of its scheduled deadlines. We have 
completed eight rulemakings since EPACT 2005, including test procedure 
rulemakings and codification of prescribed standards, and have made 
significant progress on others that were underway prior to EPACT 2005. 
In 2006, we initiated standards rulemaking for 12 additional products 
and remain on schedule for all future deadlines.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici

                       LOAN GUARANTEE REGULATIONS

    Question. I understand that the Department sent its proposed draft 
regulations at the end of March to OMB for approval. It has been nearly 
3 weeks without any action.
    Based on the delays in approving the regulations, will you be able 
to meet the August deadline for the implementation of regulations as 
established in the Joint Funding Resolution?
    Answer. The Department is working to meet the August 2007 deadline 
contained in the Revised Continuing Appropriations Resolution, 2007, 
Public Law 110-5. A Notice of Proposed Rulemaking was published in the 
Federal Register on May 16, 2007 and is open for public comment until 
July 2, 2007. It is not possible to guarantee that the rule will be 
completed by the August deadline but an aggressive effort is underway 
to make that happen.

              LOAN GUARANTEE PROGRAMS (TITLE 17 OF EPACT)

    Question. The Export-Import Bank of the United States is planning 
to provide over $18 billion in new loan guarantees in fiscal year 2008, 
more than double the level proposed for the Department of Energy. A 
portion of these loan guarantees will be for new advanced technology 
power generation facilities being built overseas.
    Can you explain why the administration has such a difficult time in 
providing adequate loan authority to implement a no-cost loan guarantee 
program at the similar level as we support foreign economic development 
under the Export-Import Bank program?
    Answer. The nature of the Energy Policy Act of 2005 Title XVII loan 
guarantee program is unique among other Federal loan guarantee programs 
in that it encourages the employment of new or significantly improved 
and innovative technologies to reduce or sequester pollutants or 
greenhouse gas emissions, while at the same time requiring a 
``reasonable prospect of repayment.'' Other programs are primarily 
concerned with commercial market risk. To manage the inherent risks of 
this loan guarantee program, DOE is planning for an initial small 
portfolio of projects in order to gain experience and expertise and to 
ensure that the program is implemented correctly.

     LOAN GUARANTEE--TECHNICAL EVALUATION AND FINANCIAL EVALUATION

    Question. It is my understanding that the Department is attempting 
to recruit staff that has strong project development experience to 
evaluate these applications from a financial standpoint.
    At the same time, the evaluations are currently undergoing a 
technical evaluation by DOE staff to determine whether or not the 
technology is commercially viable.
    How are the evaluations proceeding and when do you expect these 
evaluations to be completed?
    Answer. The Department is completing a preliminary review of the 
143 pre-applications submitted in response to the August 2006 
solicitation and guidance has been issued to program offices to begin 
the technical reviews of the pre-applications. Until the program 
offices have had the opportunity to complete the technical reviews on a 
sufficient number of pre-applications, the Department cannot say 
precisely how long it will take to complete the evaluations.
    Separately, the Loan Guarantee Office will be reviewing each pre-
application for compliance with the financial, commercial, and other 
criteria set forth in the August 2006 solicitation and accompanying 
guidelines. Ultimately, the goal is to complete the pre-application 
evaluations this summer.

                        DEPLOYING NEW TECHNOLOGY

    Question. Mr. Karsner, our energy sector has developed around low 
cost energy technologies such as coal. We have spent decades and 
billions of dollars supporting alternative energy sources such as wind 
and solar, yet these technologies still only make up a small portion of 
our generation mix. Tax credits have helped, but the intermittent 
nature of these incentives has undermined their effectiveness.
    It appears that we need to come up with a new model that will 
encourage the commercial deployment of alternative energy sources 
utilizing private capital. Obviously, this is something we have 
attempted through the loan guarantee program, but I wonder if we need a 
larger more aggressive solution in order to transform our energy 
sector--similar to the Export Import Bank or Overseas Private 
Investment Corporation.
    I assume you have met with investors and venture capital groups 
interested in deploying new technology. What is the major concern of 
these groups and what can we do to encourage investment in new 
alternative energy technology to get it out of the lab and into the 
market?
    Answer. In general, investment decisions center on maximizing the 
expected return for a given level of risk. With respect to alternative 
energy technology investments in particular, private sector investors 
repeatedly voice at least three primary concerns: an unstable and 
irregular policy environment and the negative economic incentive to 
build first-of-a-kind plants.
    By creating a stable and standardized policy environment with 
reasonable investment incentives, the Federal Government can help to 
lower risk and to increase private sector support of alternative energy 
technologies.
    Question. What about the deployment of high cost investments such 
as nuclear power?
    Answer. The principal causes of the financial risk surrounding 
nuclear power are political and regulatory uncertainties. By 
demonstrating the new Nuclear Regulatory Commission licensing process, 
codified at 10 CFR part 52, via our partnership program, Nuclear Power 
2010, the political and regulatory uncertainties of nuclear power would 
be significantly reduced. Further, the Department has just released a 
Notice of Public Rulemaking and has not yet solicited expressions of 
interest for loan guarantees by the nuclear power utilities, so it is 
not clear how the industry will respond to such an offering. 
Consequently, it is too early for the Department to assess whether a 
more aggressive solution would be needed to encourage more nuclear 
power plant construction.

                              BATTERY R&D

    Question. Mr. Karsner, your budget for Vehicles Technology is 
presented in a new format that provides fewer details about specific 
research projects.
    I am interested to learn what the budget provides for battery R&D. 
As you are well aware the gasoline/electric hybrid car technology has 
become very popular. However, batteries continue to be the greatest 
technology challenge facing auto manufacturers.
    How much funding has the President requested for battery research 
in fiscal year 2008 and how has that changed over the past 2 years?
    Answer. The fiscal year 2008 budget includes $42 million to support 
advanced battery R&D, such as batteries for plug-in hybrid vehicles. 
This includes work on long-life, abuse-tolerant lithium batteries and 
more advanced high-power batteries along with power-control systems and 
components that are optimized for plug-in hybrids. The fiscal year 2008 
request for energy storage R&D is a 70 percent increase over the fiscal 
year 2006 appropriations, and is level with the fiscal year 2007 
operating plan.
    Question. Please explain to the subcommittee what your goals are 
for battery research? What can we expect in terms of performance 
improvements over the next 5 years?
    Answer. Energy storage research aims to reduce costs and help 
overcome specific technical barriers related to performance, life, and 
abuse tolerance. The current cost of high energy, plug-in hybrid 
vehicle battery is $1,000/kWh; our cost goal in support of the AEI is 
to reduce the cost of these batteries to $300/kWh by 2014. These 
barriers are being addressed collaboratively by the DOE's technical 
research teams and battery manufacturers.

                              SOLAR ENERGY

    Question. Mr. Karsner, during the past 6 years there has been 
explosive growth (+45 percent) in solar cell manufacturing worldwide. 
However, the United States currently produces only about 10 percent of 
the solar cells produced worldwide and has only grown by 7 percent 
since 2001. The current manufacturing leaders are Japan and Europe.
    Clearly there are many factors that contribute to this outcome, but 
I am interested to know if the United States is behind because we lack 
the technical capability or if policies being pursued in Europe and 
Japan are driving this demand growth.
    Answer. The capabilities in U.S. industry and at national 
laboratories and universities are strong. Indeed, U.S. companies are 
producing the highest-performance products in a variety of PV 
technologies, including crystalline silicon, amorphous silicon, and 
concentrating PV. Additionally, the leading global producer of 
polysilicon feedstock is a Michigan-based subsidiary of Dow-Corning 
(Hemlock Corporation).
    The United States has lost market share in solar photovoltaic (PV) 
manufacturing because in recent years solar companies have sited 
manufacturing facilities near locations with the highest demand for the 
technology. Installations have increased significantly in Japan and 
Germany due to their long-term policies and incentives. Similarly, the 
solar manufacturing capacity in these countries has increased steadily 
as well, a fact that can be linked to the policies. For example, the 
German feed-in tariff program guarantees the owner of the panel a 
steady price for generated energy (that is even higher than the price 
of electricity) for 20 years following the installation; this tariff 
established a long-term, stable investment environment that has been 
attractive to companies looking to site facilities for adding 
manufacturing capacity. In addition, Germany and the European Union 
have also bundled cash grants, cost savings and other incentives for 
companies building new manufacturing facilities--offsetting up to 40 
percent of the capital expenditure required to build a new plant--which 
has resulted in U.S. companies announcing plans to site facilities in 
Germany.
    Question. What is the Department of Energy doing to improve the 
efficiency and deployment of solar technology in the United States?
    Answer. The Solar America Initiative (SAI) in February 2006 will 
make solar photovoltaics (PV) cost-competitive by 2015. Achieving the 
goal of the SAI will require a significant investment in reducing the 
cost of PV systems. Funding in fiscal year 2007 for the Solar America 
Initiative totals $159 million.
    There are critical areas where the Department is focusing its 
efforts to help increase efficiency, cost-effectiveness and deployment 
of solar technologies. First, solar thermal concentrating solar power 
plants (CSP) have the potential to contribute significantly to 
electricity supply in the Southwest, home to 15 of the 20 fastest-
growing metro areas in the country. Second, by focusing on the 
development of building efficiency design and technologies coupled with 
distributed PV, the Department could help enable Americans nationwide 
to buy new ``zero energy'' homes and to work in ``zero energy'' office 
buildings--which will produce as much energy as they use.
    Question. What can we expect in terms of technology or 
manufacturing improvements over the next 5 years?
    Answer. On March 8, 2007, under the SAI, the Department announced 
the selection of 13 industry-led solar technology development projects 
expected to receive up to $168 million in Federal funding over the next 
3 years (subject to appropriations). These projects may ultimately help 
to expand the annual U.S. manufacturing capacity of PV systems. These 
projects are specifically focused on developing new photovoltaic 
components or manufacturing equipment, or even complete photovoltaic 
systems.

                  CELLULOSIC BIOMASS--REVERSE AUCTION

    Question. The fiscal year 2008 budget request includes $5 million 
to develop options to establish a reverse auction for biofuels as 
proscribed in section 942 of EPACT. This incentive program is intended 
to help make cellulosic biofuels cost competitive by 2015. It is my 
understanding that the reverse auction would require DOE to solicit 
bids from eligible producers. The lowest bid on a per gallon basis 
would receive the incentive funding.
    This is a first of a kind proposal for biofuels. Do you believe 
that we are ready technologically or economically, to support this 
auction?
    Answer. The Department is evaluating section 942 of EPACT 2005, 
which directs the establishment of a reverse auction incentive program 
for the production of cellulosic biofuels. The fiscal year 2008 budget 
request includes $5 million to develop background knowledge and 
evaluate options for this incentive program.

                      IMPROVED BUILDING EFFICIENCY

    Question. Mr. Karsner, the fiscal year 2008 budget requests an 
increase in funding for building efficiency R&D including improvements 
to window, lighting, and insulation designs. At the same time, funding 
for weatherization has been reduced.
    Are you able to quantify the benefits of investing in innovative 
building technologies over the weatherization program? In other words, 
can we save more energy by investing in building technologies R&D and 
deployment as opposed to the weatherization assistance?
    Answer. EERE is evaluating the potential benefits of the Building 
Technologies Program and the Weatherization Assistance Program. In 
addition, the National Academies of Science has indicated that the 
Weatherization Program's return on investment is 1.5 to 1, compared to 
an approximately 20 to 1 return on investment for the Building 
Technologies Program.

                          CONCENTRATING SOLAR

    Question. I have been very interested in the commercialization of 
the concentrating solar power (CSP) technology. What is DOE's plan for 
supporting this dish technology deployment in the fiscal year 2007 and 
fiscal year 2008 budgets?
    In the fiscal year 2006 budget, DOE provided about $3.3 million to 
Sandia to support the development of a 1 MW dish engine pilot project. 
Is the plan to increase that funding in fiscal year 2007 budget to 
continue these efforts? If so, for how much money and when will it 
become available?
    Answer. The Department is working with industry on the development 
of two CSP technologies: parabolic trough and dish-engine systems. The 
Department is providing technical assistance to the first commercial 
U.S. CSP project, a 64 MW trough system near Las Vegas, by Solargenix/
Acciona Solar Power, which is expected to become operational in May 
2007. Stirling Energy Systems (SES), a dish system developer, plans to 
commercialize dish technology through two projects (300 MW and 500 MW) 
in California. The Department is supporting the SES effort by providing 
technical assistance in improving the reliability of their Stirling 
engine, and helping in the design-for-manufacture of the system. The 
effort will continue through fiscal year 2008.
    In fiscal year 2007, the Department is funding Sandia at the $1.5 
million level to support technical assistance to SES for system 
deployment. At this time, Sandia has access to the entire $1.5 million.
    As I understand it, there are two solar projects targeted to start 
actual construction (``hardware in the ground'') in late 2008 or early 
2009. A major program to commercialize the dish engine systems for 
high-volume, low-cost manufacture is underway. When the transformation 
from low-volume to high-volume production of this hardware is 
completed, it will pave the way for U.S.-based companies to take a very 
big step into the large-scale solar market.
    Question. How can the Department most effectively support the 
commercial deployment of this technology in the near term in order to 
realize large scale commercial deployment?
    Answer. We believe our support for technical assistance to 
companies pursuing trough and dish technologies as designed and funded 
in the fiscal year 2008 budget is very effective. Large scale, near-
term CSP commercialization is ultimately the decision of industry and 
depends on competitive Net Present Value (NPV) assessments by capital 
markets, which can only be realized through life cycle cash flows.

                        EXISTING BIOMASS AWARDS

    Question. Recipients of the alternative hydrogen production and 
utilization competitive grants (No. DE-PS26-06NT42801) are telling 
Congress that DOE's fiscal year 2008 budget does not includes funds for 
their awards and that they need to cease work.
    Can you clarify the funding commitment for this competitively 
awarded program to the subcommittee and provide details on how DOE will 
fund the competitively awarded grant in the future?
    Answer. The fiscal year 2008 budget request for the Fuels program 
is $10 million, which is a reduction of $12 million from the fiscal 
year 2007 operating level. Fiscal year 2008 funding will only support 
areas of research and development (R&D) that are central to the 
production of hydrogen from coal. We will continue Hydrogen from Coal 
Research to develop improved, novel technology for the production of 
hydrogen including research in scale-up technologies which will 
simultaneously produce and separate coal-derived hydrogen from the 
other gas constituents in one membrane reactor. All research in high-
hydrogen content liquid fuels will be terminated because these are 
mature but evolving technologies where the private sector has the 
resources and incentives to conduct R&D. All research in hydrogen 
utilization for mobile applications (e.g., car engines) will be 
terminated because this research is conducted by the Office of Energy 
Efficiency and Renewable Energy (EERE). This research terminated within 
the Office of Fossil Energy would include projects selected as a result 
of Funding Opportunity Notice No. DE-PS26-06NT42801 since they are 
aimed at ethanol production and mobile applications of hydrogen 
utilization. Termination of this work is proceeding in an orderly 
manner and contractors have been properly notified.

              DEPLOYMENT OF RENEWABLE ENERGY TECHNOLOGIES

    Question. In a GAO report to Congress dated December 2006, it is 
repeatedly stated that DOE has made steady incremental progress in 
making each of the renewable energy technologies more cost competitive.
    As I have mentioned in my opening statement, I am more concerned at 
this point about deployment of these technologies.
    What is the Department doing to take these technologies that are 
more cost competitive and fully deploy them into the marketplace?
    Answer. The Department's approach to promoting new technologies 
couples technology push with market demand pull, and works to address 
barriers to the market adoption of advanced technologies through 
various program initiatives. For example, the Department plans to lead 
by example with the Executive Order 13423 and become an early adopter 
of energy efficient and renewable energy technologies. By identifying 
markets where the life-cycle costs of advanced energy technologies 
currently form a compelling economic argument, the Federal Government 
will create demand pull which will increase the economies of scale and 
drive the technologies down the cost curve. The Department is also 
looking to stimulate the commercialization of advanced technologies by 
helping to bridge the gap between R&D and the market place. To this 
end, the Department has designated a Director of Commercialization and 
Deployment, located within the Energy Efficiency and Renewable Energy 
Program, to oversee and guide our deployment-related efforts. However, 
commercialization decisions are ultimately up to industry.
                                 ______
                                 
               Question Submitted by Senator Thad Cochran

    Question. Secretary Karsner, it is my understanding that your 
office is willing to consider funding for renewable energy programs 
through an ``unsolicited proposal'' process. Mississippi State 
University has submitted an unsolicited proposal to your office for its 
Sustainable Energy Research Center (SERC), a program which was funded 
in fiscal year 2006 and included in the fiscal year 2007 Senate Energy 
and Water Appropriations report. What is the status of this proposal? 
Will the SERC receive fiscal year 2007 funding?
    Answer. On February 27, 2007 the Office of the Biomass Program 
received the SERC unsolicited proposal via email. The Program responded 
on March 6, 2007 by directing Mississippi State University to the 
formal channels for submitting an unsolicited proposal and by inviting 
them to meet with the Program. For any proposal to be considered 
unsolicited, it must be unique and not covered by any current or 
proposed solicitation. The Biomass Program hosted Dr. Glenn Steele and 
Dr. William Batchelor at DOE on April 12, 2007 and informed them of 
upcoming competitive solicitations that would be applicable to their 
area of focus. We will provide a formal response to the unsolicited 
proposal. Currently, the Program is in the process of preparing that 
response.
    The Office of Biomass Program is in the process of evaluating the 
SERC proposal. The Program needs to make a determination that the 
proposal is meritorious and compliant with criteria for unsolicited 
proposals, and meets and supports the Program's Research, Development 
and Deployment plans to be recommended for funding.
                                 ______
                                 
               Question Submitted by Senator Wayne Allard

              ELECTRICITY DELIVERY AND ENERGY RELIABILITY

    Question. What is being done to increase available transmission 
from the often remote sites where renewable energy is produced to the 
more populated areas where the electricity is needed and how are your 
offices working together on that?
    Answer. The transmission grid needs to be sufficiently large and 
robust to accommodate the increased level of renewable energy resources 
that are becoming available, as well as to meet the many other 
challenges of the 21st century.
    The Department is implementing the provisions of the Energy Policy 
Act of 2005 (EPACT) to help ensure that consumers receive electricity 
over a dependable, modern infrastructure. These provisions include 
EPACT section 368 that requires designation of energy corridors on 
Federal lands; section 1221(a) that requires a study of electricity 
transmission congestion once every 3 years, coupled with the authority 
given to the Secretary of Energy to designate national interest 
electric transmission corridors; and the new Federal Power Act section 
216(h) that requires the Department to act as the lead agency for 
purposes of coordinating all applicable Federal authorizations and 
related environmental reviews to site an electric transmission 
facility.
    The Department also provides technical assistance to States, 
regional bodies, and others on issues such as methods and tools to 
increase regional planning and coordination of transmission, improving 
transmission siting, better understanding the location of suitable 
renewable resources (``resource characterization''), and improving the 
ability of the grid to plan for and operate with renewables that are 
intermittent (``grid integration issues''). Technical assistance is 
provided to the Department's Power Marketing Administrations as they 
explore what role they can play in providing access to additional 
renewable generation through transmission. With some types of 
assistance, such as renewable grid integration, the technical 
assistance is informed by research and development that is sponsored by 
the Department.
    At the distribution level of the grid, the Department continues to 
provide technical assistance to States that wish to adopt more 
favorable interconnection standards, metering, demand response, and 
related methods that enable greater use of distributed renewables 
generation. For example, the Department funded the national voluntary 
``IEEE 1547'' interconnection standard that is referenced in EPACT 
section 1254 regarding ``Interconnection Standards'' for States to 
consider.
    In addition, using funding under the Renewable & Distributed 
Systems Integration activity line of the fiscal year 2007 Operating 
Plan, the Office of Electricity Delivery and Energy Reliability (OE) is 
soliciting for projects that would integrate renewable and distributed 
energy systems into the grid. By successfully demonstrating this 
integration, the use of renewable and distributed energy technologies 
to support electric distribution operations should substantially 
increase for supplying power and other ancillary services during peak 
load periods. The project would also demonstrate the ability of these 
technologies to reduce power required by the distribution feeder. This 
will be accomplished through modeling, design, integration, and R&D of 
renewables and distributed energy integration into the distribution 
system; low-cost sensors; advanced monitoring; and consumer 
information.
    The Office of Energy Efficiency and Renewable Energy (EERE) 
typically focuses research and development activities on improving the 
efficiency, cost, and emissions profiles of generation technologies, 
including renewables.
    OE and EERE understand that for this policy to succeed, it is 
crucial to collaborate not only on grid-scale innovations, but also on 
bringing the applications to the consumer. In coordinating near-term 
and long-term goals, OE and EERE remain alert to changes in need and 
demand. Both offices also support State and regional efforts to 
integrate renewable and distributed energy resources in their electric 
system planning efforts. In this spirit, OE and EERE have formed a 
focus group to concentrate on integration issues with renewables. OE 
and EERE are closely coordinating fiscal year 2007 activities under the 
operating plan in this area.
    Question. I am also curious what research is being done to develop 
electricity storage, especially electricity manufactured from renewable 
sources?
    Answer. The energy storage program of the Office of Electricity 
Distribution and Energy Reliability has conducted a research program on 
basic storage mechanisms, devices, and systems for over a decade. The 
program is considered worldwide to be one of the leaders in this field. 
Research is conducted on advanced batteries, flow batteries, 
supercapacitors, and flywheels, as well as the necessary megawatt level 
power electronics. Major demonstrations are fielded in partnership with 
utilities, the California Energy Commission (CEC), and the New York 
State Energy Development Authority. In particular, we are involved with 
the CEC in the development of a microgrid which incorporates 500kW of 
supercapacitors to harmonize wind and hydro power. We also work with 
the Bonneville Power Administration on a power electronics device which 
will smooth short term wind and wave power fluctuations when combined 
with storage. A project with the Iowa municipalities explores the 
possibility of using 200MW of compressed air storage in conjunction 
with a 75MW wind farm and inexpensive off-peak power.
    Energy storage can significantly increase the integration of 
renewable sources of energy into the electric system. Storage increases 
the reliability of intermittent resources like wind and photovoltaics, 
allowing these sources to become relatively constant sources of power. 
Renewable power produced in off-peak periods can be stored and used 
during periods of greater demand, thus making renewables dispatchable. 
Likewise, energy storage can bridge the gap during decreased periods of 
renewable production and, when combined with appropriate electronics, 
it can also eliminate short term flutters that decrease power quality 
and impact digital equipment on the grid.
                                 ______
                                 
              Questions Submitted to Hon. Thomas D. Shope
             Questions Submitted by Senator Byron L. Dorgan

                      FOSSIL ENERGY BUDGET REQUEST

    Question. Your testimony suggests that your fiscal year 2008 budget 
request of $863 million is one of the largest fossil energy requests by 
this administration. Yet, there are only two large program requests in 
your budget--a doubling of funds for the FutureGen project and a 
doubling of funds for the Strategic Petroleum Reserve (SPR) expansion. 
The FutureGen request now makes up 25 percent of the coal R&D request.
    With the extraction of the requests for FutureGen and the SPR 
expansion from your budget request, are you not actually cutting many 
other fossil energy R&D programs?
    Answer. The FutureGen project is a key Presidential priority in the 
Office of Fossil Energy's portfolio and is an important component of 
the Coal Research Initiative. It remains a significant step towards 
realizing the goal of creating a near-zero atmospheric emission energy 
option for coal. The Strategic Petroleum Reserve provides an emergency 
oil stock to bolster U.S. energy security and a possible mitigation 
when disruptions in commercial oil supplies threaten the U.S. economy. 
We believe the current budget represents a balanced Fossil Energy 
Program portfolio that addresses all of the highest priority 
requirements to meet the program goal.

                       COAL R&D RESEARCH FUNDING

    Question. The President's fiscal year 2008 Budget Request 
recommends $245.6 million for the coal R&D program, is approximately 
$55.7 million less than the fiscal year 2006 enacted budget level. This 
is largely due to some programs being zeroed out or severely cut back. 
This includes the Innovations for Existing Plants (IEP) program and the 
Advanced Research program. For example, defunding the IEP program will 
eliminate work for testing mercury control technologies and research on 
the energy-water nexus. This program is extremely important in 
validating mercury control technologies to insure different coals will 
be competitive under the mercury control (mercury MACT) rules, which 
require utilities to begin making reductions of mercury from their 
emissions by 2012. Without this program, there is a very real 
possibility that technologies will not be available by 2012 that can 
capture the mercury emitted from the combustion of coals.
    Why has the Department requested elimination or reduction of 
important coal research and development programs?
    Answer. The fiscal year 2008 Coal Research and Development budget 
request proposes a balanced research and development (R&D) program 
portfolio in support of the overall goal of near-zero atmospheric 
emissions coal.
    Within the Advanced Research Program, bioprocessing was determined 
too long term to have an appreciable impact and certain other topics 
are not focused on technology being developed in the Coal R&D Program 
aimed at achieving the overall goal of near-zero emissions coal.
    The IEP Program was developing low-cost technologies for reducing 
emissions from existing coal power plants and has been very successful. 
However, the industry now has regulatory drivers to incentivize them to 
continue development and deployment on their own of such technologies. 
EPA promulgated the Clean Air Interstate Rule (CAIR) to reduce 
emissions of sulfur dioxide and nitrogen oxides and the Clean Air 
Mercury Rule (CAMR) to reduce mercury emissions. These regulations 
provide industry with incentives to fund R&D for technologies for low-
cost compliance to meet the emissions standards. Therefore, further 
Federal investment in mercury removal and other emission control 
technology is not needed.

                      CARBON SEQUESTRATION FUNDING

    Question. The carbon sequestration program request is proposed at 
$79 million for fiscal year 2008, and the Department funded $100 
million in the fiscal year 2007 Spending Plan. I have noted that the 
DOE budget justification states that DOE will conduct demonstrations in 
3 or 4 sites across the country with the $79 million sequestration 
budget, as opposed to conducting large-scale demonstrations in each of 
the 7 regional sequestration partnerships--which is necessary to insure 
this technology can be used in every region of this country.
    Are the funds requested for fiscal year 2008 sufficient enough to 
conduct the several large-scale carbon sequestration demonstrations in 
every region of this country that are necessary to insure carbon 
sequestration is a valid option to insure carbon capture and storage 
from coal fired power plants? What is the Department's longer-term 
strategy related to the carbon sequestration program?
    Answer. The Department's long-term strategy is to conduct large-
scale field tests to determine that carbon capture and storage is a 
safe, effective approach to reduce greenhouse gas emissions. In 2007, 
the program is beginning work on the ``highest potential'' 
opportunities for an initial expedited round of four large scale 
sequestration tests (approximately 1 million tons CO2 per 
year for each site). DOE has provided additional funding in the fiscal 
year 2007 budget for the Carbon Sequestration Program to award these 
initial large volume sequestration tests. The fiscal year 2008 budget 
request is sufficient to continue the four large-volume sequestration 
injection projects that were accelerated with additional funding 
received in fiscal year 2007.

                  CLEAN COAL POWER INITIATIVE FUNDING

    Question. The DOE request for the Clean Coal Power Initiative 
(CCPI) is $73 million for fiscal year 2008. Although this has increased 
by $68 million over the President's request of $5 million in fiscal 
year 2007, it still seems inadequate. The CCPI program is the only 
mechanism through which those clean coal technologies can be 
demonstrated in order to determine their commercial acceptable. It is 
through the demonstration program at DOE that this country has achieved 
significant reductions in NOX, SOX and 
particulate matter because of technologies that were developed and 
demonstrated with DOE support. As a result, our Nation has 
significantly reduced criteria pollutants from coal-fired power 
generation, while both maintaining low cost electricity for the 
consumer and increasing the amount of coal-fired electric power 
generation over the last 3 decades. Given the success of this program, 
it would be a prudent decision to increase the budget for this program 
so that DOE can work with industry to conduct several large scale 
projects to demonstrate carbon capture and sequestration technologies 
that can be applied to both the existing fleet and new coal plants if 
we are going to achieve meaningful reductions of carbon dioxide 
emissions.
    Is it not the case that, of the $73 million requested in fiscal 
year 2008, $58 million was returned from a previous project that did 
not go forward? Does this mean that the Department is only asking for 
$15 million in new funding for the CCPI program in fiscal year 2008? 
The Department has made much larger requests for the CCPI program in 
previous years so why is the Department not committed to funding this 
program to the same extent in fiscal year 2008?
    Answer. The Department's strategy has been to accumulate sufficient 
funds over several years and issue a solicitation to support the Clean 
Coal Power Initiative (CCPI). The $68 million increase for CCPI in 
fiscal year 2008 over the fiscal year 2007 request is derived in part 
from the transfer of $58 million in balances from the Clean Coal 
Technology Program that are no longer needed to complete active 
projects. This increase allows for the solicitation of a third round of 
demonstration projects in fiscal year 2008. In addition the fiscal year 
2007 funding level which was increased by $55 million over the request 
will be used for the third round solicitation.

   RESCISSION OF $149 MILLION FROM THE CLEAN COAL TECHNOLOGY ACCOUNT

    Question. The President's fiscal year 2008 budget request 
recommends rescinding $149 million of previously appropriated clean 
coal technology funds. Rescinding these dollars would effectively 
cancel that money for future clean coal demonstration projects and send 
these funds back into the Federal Treasury. The clean coal program is 
under funded in a time when accelerated investments in coal technology 
development have never been more important. We should not be rescinding 
clean coal funds, but adding new funds to the program to insure we 
develop, in a timely manner, cost effective coal technologies.
    Why does the administration insist on rescinding this funding, 
which was previously appropriated and can be directed for clean coal 
demonstration projects in future years?
    Answer. All project funding commitments in the CCT Program have 
been fulfilled and only project closeout activities remain. The 
administration proposes to transfer $108 million of the $257 million 
deferral to the FutureGen project, and cancel the remaining $149 
million. Of the $66 million in unobligated balances carried forward at 
the start of fiscal year 2008, $58 million is transferred to the Clean 
Coal Power Initiative (CCPI). CCPI will complete the Round 3 
solicitation using unobligated funds from projects that were selected 
but not awarded, plus appropriations that have not yet been committed 
to projects. We believe that the cumulative available funding will be 
sufficient for a Round 3 CCPI solicitation.

                UNIVERSITY OIL AND GAS RESEARCH FUNDING

    Question. I am very concerned about the impacts of the cuts in oil 
and gas research funding for a number of reasons but am particularly 
worried about the impacts of these cuts on the education of our next 
generation of energy technologists who are graduate students today.
    Can you tell me how many universities will be affected by the 
scheduled elimination of almost all oil and gas R&D by DOE in its 
fiscal year 2007 Spending Plan?
    Can you please list those universities that currently receive 
funding? Can you tell me if and when you intend to issue a stop work 
order to these institutions?
    Will these universities be forced to shut down their oil and 
natural gas research programs?
    Answer. There are 25 projects at universities that will be affected 
by the funding reduction in the operations plan. Federal funding for 
oil and gas research and development activities is not needed because 
industry has the incentives and resources to accomplish such activities 
on its own. Given the private sector's incentives and capabilities, we 
believe that private industry is best positioned to fund R&D at 
universities and elsewhere, which will provide educational 
opportunities for our next generation of energy technologists.
    The universities that currently receive funding are: University of 
Alaska, Fairbanks; University of Alabama; University of Arkansas; 
University of Arizona; Baylor University; California Institute of 
Technology; Carnegie Mellon University; Clemson University; Colorado 
School of Mines; Stanford University; University of Illinois; 
University of Kansas; Florida International University; Georgia Tech 
University; Kansas State University; Louisiana State University; 
Massachusetts Institute of Technology; Michigan Tech University; 
Western Michigan University; University of Mississippi; Mississippi 
State University; University of Southern Mississippi; Montana State 
University; Montana Tech--Bureau of Mines; New Mexico Institute of 
Mining and Technology; State University of New York; University of 
Columbia; University of Oklahoma; Oklahoma State University; Prairie 
View A&M University; University of North Carolina; University of Tulsa; 
University of Pittsburgh; Penn State University; University of Texas--
Austin; University of Texas--Bureau of Economic Geology; Texas A & M 
University; University of Houston; Rice University; University of Utah; 
West Virginia University; Woods Hole Oceanographic Institute; and the 
University of Wyoming.
    The Oil and Natural Gas program has previously sent letters to all 
program participants notifying them of the potential shortfalls in the 
fiscal year 2007 budget. These researchers are currently working using 
existing (prior year) funds. Subsequently, all universities with 
existing cooperative agreements impacted by the decrease in funds were 
contacted and informed of the lack of funding for fiscal year 2007. The 
majority of DOE projects are grants or cooperative agreements, for 
which a stop work order is not issued.
    Each university program will have to examine its particular 
situation. In many cases, other Government and/or industry funding may 
be available to the university.

                           NATURAL GAS CARTEL

    Question. In his 2006 State of the Union speech, President Bush 
indicated he wanted to reduce our reliance on ``imported energy 
sources.'' At the same time, DOE and FERC have launched an aggressive 
campaign to import more liquefied natural gas (LNG) into the United 
States.
    The two largest suppliers of imported liquefied natural gas to the 
United States are Trinidad Tobago and Algeria. Trinidad Tobago has only 
around 23 trillion cubic feet of gas reserves and will ultimately have 
to get gas supplies from Venezuela if it wants to continue its 
liquefaction enterprise. Algeria is a member of OPEC. Further, I note 
that Russia, Iran, Qatar, Algeria, and Venezuela announced recently 
they are meeting in Doha this week to discuss forming a natural gas 
cartel. This is very troubling.
    Finally, I would point out that according to DOE's 2003 National 
Petroleum Council Gas Supply Study, the United States has almost 60 
years of technically recoverable natural gas, but we need new 
technologies to produce them.
    How does the administration's policy of reducing our reliance on 
imported energy sources square with its policies to encourage the 
imports of very large volumes of LNG, especially in light of this very 
disturbing news about a possible gas cartel?
    Answer. Historically, U.S. imports of natural gas have come 
primarily from Canada by pipeline with small amounts of LNG imported 
from various countries. In the Energy Information Administration's most 
recent Annual Energy Outlook natural gas imports from Canada are 
forecast to decline and LNG imports are expected to rise to fill this 
gap.
    The administration's role in addressing LNG imports is to ensure 
that importing facilities are permitted in a timely manner. The market 
will decide what facilities are economic, which ones will be built, and 
how much LNG to import. Furthermore, we don't believe intense 
discussions of a gas cartel are likely to result in the development of 
a cartel at this point, considering the relative infancy of the global 
LNG spot market.
    The administration's policy of reducing our reliance on imported 
energy also includes research and development that will strengthen the 
Nation's energy security. For example, the administration has proposed 
to make the R&D investment tax credit permanent. Under the Advanced 
Energy Initiative, the 2008 Budget includes initiatives for hydrogen 
fuel, biofuels, plug-in hybrid vehicles, clean coal, nuclear, and solar 
photovoltaics to help displace future demand for oil and natural gas. 
The administration also supports removing unnecessary barriers to 
developing existing reserves of oil and gas including, for instance, 
the environmentally responsible exploration and development of reserves 
in Alaska.
    Question. Is the administration aware of the fact that if all LNG 
import facilities approved by the administration were built and 
operating at capacity we would be importing almost 60 percent of our 
natural gas most of it from many of the same countries that hold us 
hostage to imported oil?
    Answer. The administration is responsible for permitting proposed 
LNG import facilities. However, the market will decide which ones will 
ultimately be built and become operational. It is unlikely that it 
would be economical to construct every LNG import facility that has 
been proposed, and historically LNG importing facilities have typically 
operated below their peak capacity levels. Also, Australia and Norway, 
countries that are viewed as reliable energy suppliers, are developing 
LNG exporting facilities that could supply U.S. markets.
    Question. Who are the 10 largest U.S. investors and partners in 
building and operating regasification facilities in the United States?
    Answer. There are currently only five built and operating LNG 
import terminals in the United States. These include the Distrigas 
terminal in Everett, Massachusetts owned by Suez; the Cove Point, 
Maryland terminal owned by Dominion; the Elba Island, Georgia terminal 
owned by El Paso; the Trunkline terminal in Lake Charles, Louisiana 
owned by Southern Union; and the Energy Bridge terminal in the Gulf of 
Mexico offshore Louisiana owned by Excelerate Energy.
    Question. Why would the administration propose eliminating all 
funding at DOE for natural gas supply research when we have 60 years of 
technically recoverable gas reserves in the United States but need new 
technologies to produce them?
    Answer. Natural gas production is a mature industry that has every 
incentive, particularly at today's prices, to enhance production and 
continue research and development of technologies on their own. There 
is no need for taxpayers to subsidize natural gas companies in these 
efforts.
                                 ______
                                 
             Questions Submitted by Senator Robert C. Byrd

                               FUTUREGEN

    Question. Mr. Secretary, in 2004, the President announced the 
initiation of the FutureGen project, a $950 million, 10-year 
demonstration project to construct the world's first coal-fueled, near-
zero emissions electricity and hydrogen power plant.
    I have been supportive of the concept behind FutureGen. FutureGen, 
if successful in meeting the intended goals, could be a major 
breakthrough for a clean and efficient use of coal and good for the 
economic and environmental well being of our country and the world. 
However, ever since the inception of this project, I have been very 
vocal about my major concerns about the project--namely how the 
administration intends to pay for its $700-plus million share of this 
project without robbing the basic Fossil Energy research and 
development programs and the total cost growth potential of this 
project, given increasing costs of construction and the types of 
unanticipated costs that usually accompany first-of-its-kind projects.
    The Department of Energy's press release, dated April 10, 
announcing that the price of construction materials and equipment, 
labor, and other heavy construction expenses have significantly driven 
the estimated total costs of the FutureGen project to $1.7 billion 
through fiscal year 2016 came as no surprise to this Senator. Even with 
the Department assuming $300 million in anticipated power sales to 
offset the costs of the project, the Federal Government is still left 
with a hefty cost share of $1.1 billion--at least $300 million more 
than anticipated.
    Despite the many inquiries I have submitted to the Department of 
Energy in the past, the Department has never been able to adequately 
explain to me how it is planning to fund its $700 million-plus share 
for the FutureGen project. Can you explain to me how the Department 
plans to pay for this major escalation of an additional $300 million?
    Answer. The initial cost estimate for FutureGen was developed by 
the National Energy Technology Laboratory (NETL), which estimated the 
total cost of the FutureGen Project at approximately $950 million in 
constant 2004 dollars. This cost estimate was included in the 2004 
Report to Congress. While the Department has acknowledged that costs 
for some of the currently planned components of the FutureGen plant 
have generally increased, the Department has made no commitment beyond 
the $39 million Government cost-share in Budget Periods Numbers 0 and 
1. Budget Period No. 1 will begin the detailed design for the plant and 
re-scoping of the project may be necessary to remain within budget. The 
cost for the FutureGen Project is shared between the Department of 
Energy, the FutureGen Industrial Alliance, and contributions from 
foreign governments. The Department anticipates requesting sufficient 
appropriations for the Government's cost-share for FutureGen to meet 
the objectives and schedule for this initiative.
    Question. I have helped to provide funding for many major 
Government construction projects in the past and know that 
unanticipated costs are commonplace. Beyond inflation increases that 
DOE has just projected, how does the Department plan to cope with 
unforeseen costs that might arise with the construction of this first-
of-its-kind project? How much funding has been set aside for future 
contingencies?
    Answer. The project is structured in phases such that progression 
to the next phase depends on the successful accomplishment of 
objectives and milestones from each preceding phase.
    To date, the cost basis estimate has remained the same as the 
original cost estimate identified in the March 2004 Program Summary to 
Congress. Contingencies are inherent in the base cost estimate as a 
function of design definition and technology development. The inherent 
contingency in the FutureGen cost estimate is consistent with industry 
recommended practices for a conceptual design with substantial advanced 
technologies. The costs associated with these contingencies are 
included in anticipated funding profile.
    Cost and schedule risks are very real for large, first-of-a-kind 
projects and cannot be eliminated completely until construction is 
completed. We are making our best efforts to maintain budget for this 
important validation of the coal-based near-zero atmospheric emissions 
concept.
    Question. In fiscal year 2008, the FutureGen program is funded at 
$108 million, a 500 percent increase from the fiscal year 2006 level, 
while the Natural Gas R&D program, the Oil R&D program, and the 
Innovations for Existing Plants program under the Coal R&D program were 
zeroed out. This is a very disturbing trend, and one that I suspect 
will only worsen as the project goes to construction in future years. 
Will you be cutting into the Coal R&D program even deeper to fund cost 
growths in FutureGen?
    Answer. During the 2000 campaign, the President committed to spend 
$2 billion over 10 years on clean coal technology. The budget completes 
that commitment 3 years ahead of schedule, with $385 million in funding 
for the Coal Research Initiative in 2008. The funding levels in the 
budget for clean coal activities are among the highest in this 
administration and also from any President in the last 2 decades.
    The fiscal year 2008 budget request for FutureGen, when adjusted 
for inflation, is consistent with the funding profile as disclosed in 
the FutureGen Program summary as reported to Congress in fiscal year 
2004. The fiscal year 2008 funding request is to cover NEPA compliance, 
significant design activities, and procurement of long-lead items. 
FutureGen is integral to the Coal R&D program, and continual 
investments in the coal R&D program are necessary in order to support 
the development of technologies to drive towards the goal of near-zero 
atmospheric emissions coal, which includes the integrated, scale-up 
testing of the necessary R&D.
    The Natural Gas research and development (R&D), the Oil R&D, and 
the Innovations for Existing Plants programs are proposed for 
termination because the Federal R&D role in these areas have been 
completed and industry should take on that responsibility. The oil and 
gas industry has the incentives and resources to accomplish oil and gas 
R&D without additional Federal subsidies, which are unwarranted in 
today's price environment. Promulgation of CAIR and CAMR provided a 
market incentive for developing many advanced, cost-effective emissions 
controls and has ended the need for Federally funded R&D in areas under 
the Innovations for Existing Plants program. The current fiscal year 
2008 budget request has been formulated based on the needs of the 
Fossil Energy Program and is consistent with meeting the goals and 
objectives of the Department's Strategic Plan.
    Question. What role will the National Energy Technology Laboratory 
play in FutureGen? Enough to support the approximately 1,200 Federal 
and contractor staff who currently support Fossil Energy Research and 
Development program?
    Answer. The National Energy Technology Laboratory (NETL) has the 
lead responsibility for managing the FutureGen project as well as the 
many other projects that it has under its purview to advance the 
Department's goals and carry out its mission.
    Question. If FutureGen is successful, will the Department be able 
to deploy FutureGen-type technologies in other locations across the 
country in coming decades or will additional resources, studies, tests, 
and demonstrations to expand deployment of these technologies be 
necessary?
    Answer. The goals of the FutureGen project are to prove the 
technical feasibility and economic viability of a near-zero atmospheric 
emission coal energy option, thus leading to the broad acceptance of 
the concept. The FutureGen project has been designed to operate under 
real-world conditions and at large enough scale to adequately prove the 
viability of the concept. The key is to prove that near-zero 
atmospheric emissions coal is technically viable and that its costs are 
not prohibitive. The coal research and development program of which 
FutureGen is a part, is designed to advance the development of 
technologies that reach the goal of near-zero atmospheric emissions 
while increasing efficiencies, increasing clean energy production, and 
decreasing costs. Ultimately, the market will determine when and how 
many of these plants are deployed, yet a successful operation of the 
first FutureGen plant is an important prerequisite to the widespread 
deployment of near-zero atmospheric emission coal plants.

                      CLEAN COAL POWER INITIATIVE

    Question. The administration has included $73 million for the Clean 
Coal Power Initiative (CCPI) in the fiscal year 2008 budget, which is a 
considerable improvement over the $5 million that the President sought 
in his fiscal year 2007 budget request.
    I understand that two CCPI Round II projects are experiencing cost 
growths. Will the fiscal year 2008 CCPI funds be used to make up these 
cost growths and how much would be made available to each project? How 
much fiscal year 2008 funding and how much prior-year funding will be 
applied to a third CCPI solicitation?
    Answer. Additional funding provided by DOE to an awarded project to 
help cover project cost growth due to the increase in material, 
equipment, and skilled labor cost comes from unobligated funds 
appropriated to the coal demonstration program before fiscal year 2006. 
These are funds previously committed to projects which have withdrawn 
from the demonstration program since selection and would be used for 
the Round III solicitation absent cost growth in projects from previous 
rounds. Funds provided to a project to cover cost growth will not be 
available to fund projects selected in CCPI Round 3. No fiscal year 
2008 funds will be used to cover any cost growth for existing projects 
but cost growth will reduce the funding available for the next round of 
solicitations. The CCPI program operates under the fiscal constraints 
of the Clean Coal Technology program, so the maximum allowable increase 
in the Government share to these projects is 25 percent over the 
Government's original estimate of costs. In the case of the Southern 
Company, Orlando IGCC project, this means a maximum increase in the 
Government share of $59 million, and $59 million in cost growth has 
been approved. In the case of the Western Greenbrier Cogen. WVa FBC 
project, this means a maximum potential increase in the Government 
share of $28 million, but no cost growth has been approved. Combined, 
the maximum potential net reduction in the planned fiscal year 2008 
CCPI solicitation is $87 million, of which $59 million has been 
approved.
    CCPI will complete the Round 3 solicitation using unobligated funds 
from projects that were selected but not awarded, plus appropriations 
that have not yet been committed to projects. We believe this 
cumulative amount is sufficient for proceeding with a Round 3 CCPI 
solicitation.

                       COAL-TO-LIQUIDS INITIATIVE

    Question. It is my understanding that the coal-to-liquids process 
is only commercially feasible when the price for crude oil is at $40 
per barrel or higher. What is the Department of Energy doing to provide 
price guarantees or other financial incentives for investors? Does the 
administration support legislation that promotes coal-to-liquids 
projects?
    Answer. The Department is closely following the response to the 
incentives established by the Energy Policy Act (EPACT) of 2005 which 
include coal-to-liquids deployment projects being eligible for 
incentives such as tax credits and/or loan guarantees as authorized in 
EPACT.
    The President has set a goal of increasing the supply of renewable 
and alternative fuels, including coal-derived liquid fuels, by setting 
a mandatory fuels standard to require 35 billion gallons of renewable 
and alternative fuels in 2017--nearly five times the 2012 target now in 
law. In 2017, this will displace 15 percent of projected annual 
gasoline use.
    The administration wants to work with Congress to allow coal-
derived liquids to be eligible under the proposed alternative fuels 
standard. The standard should be structured to allow the market to 
determine the most efficient way to meet the standard, including to 
what extent coal-derived fuels will be used.
    Question. I understand that there are environmental concerns 
associated with the coal-to-liquids process. What support can the 
Office of Fossil Energy provide to industry in identifying ways to 
incorporate the capture and storage of carbon dioxide emissions from 
the coal-to-liquids process and from using the fuel produced by the 
process?
    Answer. The Office of Fossil Energy is supporting industry in this 
area through its carbon sequestration technology development effort. 
This Carbon Sequestration Program includes laboratory and pilot-scale 
research aimed at developing new technologies and systems for 
greenhouse gas mitigation, which could be applied to coal-to-liquids 
processes as well as other industrial processes, though the primary 
objective is to apply them to power generation systems. In 2007, the 
program is beginning work on the ``highest potential'' opportunities 
for an initial expedited round of large scale sequestration tests 
(approximately 1 million tons CO2 per year for each site). 
DOE has provided additional funding in the fiscal year 2007 budget for 
the Carbon Sequestration Program to award several large volume 
sequestration tests.

IMPACT OF THE FISCAL YEAR 2008 BUDGET ON THE NATIONAL ENERGY TECHNOLOGY 
                               LABORATORY

    Question. If this fiscal year 2008 budget is enacted, how many 
Federal, contractor, and construction jobs will be eliminated at the 
National Energy Technology Laboratory, which is based in Morgantown, 
West Virginia; Pittsburgh, Pennsylvania; and Tulsa, Oklahoma; with 
smaller offices in Tulsa, Oklahoma; and Fairbanks, Alaska?
    Answer. We are managing our human resources effectively to achieve 
our program goals and do not anticipate significant changes in staffing 
levels.
    Question. In the past, NETL has received approximately $2 million 
per year in General Plant Projects, which covers critical maintenance 
needs. Can you tell me why the past several Fossil Energy budgets have 
zeroed out funds for critical maintenance at the major NETL sites, all 
of which are more than 40 years old? Will this impact the health and 
safety of the workers?
    Answer. NETL received almost $2 million in fiscal year 2006 for 
General Plant Projects and $4 million in fiscal year 2007. It is 
anticipated that NETL has sufficient funds to continue these activities 
in fiscal year 2008.

               CLEAN ENERGY TECHNOLOGY EXPORTS INITIATIVE

    Question. I initiated the Clean Energy Technology Exports (CETE) 
Initiative in the fiscal year 2001 Energy and Water Appropriations 
bill. The administration then completed a 5 Year Strategic Plan in 
2002. From fiscal year 2004-2006, I helped provide $1.6 million in 
funding to help further this initiative.
    Please provide me with a detailed account on how these appropriated 
funds were utilized.
    Answer. The Department remains committed to the goals of the Clean 
Energy Technology Export (CETE) Initiative. I have attached a matrix of 
our spending allocations in 2005 and 2006. In summary, we have funded 
programs that support direct partnership with industry, as well as 
programs that coordinate interagency efforts and improve the efficacy 
of Federal activities to support deployment.

                                                  CETE PROJECTS
----------------------------------------------------------------------------------------------------------------
                                                                                                  Funding Amount
        Activity/Short Title           Project Partners/ Leverage         Summary Comments        (In thousands)
----------------------------------------------------------------------------------------------------------------
          Fiscal Year 2005

CETE Website........................  GETF........................  Provides central site for                $25
                                                                     CETE info dissemination,
                                                                     and to summarize
                                                                     opportunities from other
                                                                     donor organizations like
                                                                     EBRD, ADB and GEF. Allows
                                                                     both novice and
                                                                     sophisticated market
                                                                     players to find appropriate
                                                                     points of contact for
                                                                     questions. Could eventually
                                                                     be used to track
                                                                     performance metrics.
DOE-USAID Hydropower Partnership....  U.S. Hydropower Council for   Fiscal year 2005 focus on                100
                                       International Development.    project development and
                                       $200k from USAID and          closure in India, Mexico
                                       private sector.               and Guatemala. Track record
                                                                     of success. Multiple
                                                                     private sector partners.
Sustainable Finance.................  Resource Mobilization         Continue work in Poland and              175
                                       Advisors (RMA). $200k from    Mexico. Initiate work in
                                       U.K. Govt, NADBank and        Philippines to build
                                       World Bank.                   portfolio of viable EE
                                                                     projects for investment.
                                                                     Initiated study on
                                                                     Financing Mechanisms to
                                                                     support clean energy with
                                                                     input from private partners
                                                                     and U.S. agencies.
                                                                     Supported Resource Guide as
                                                                     outreach tool for U.S.
                                                                     exporters.
Management Plan.....................  ORNL........................  ............................              75
Tsunami Study.......................  Argonne.....................  ............................              75
Sustainable Communities.............  GTI.........................  ............................              35
Green Olympics/Beijing..............  ORNL........................  ............................              45
REEEP...............................  ............................  ............................              50
Africa Geothermal...................  ............................  ............................              15
                                                                                                 ===============
          Fiscal Year 2006

CETE Website........................  Global Environment            Provides central site for                 40
                                       Technology Foundation         CETE info dissemination,
                                       (GETF).                       and to summarize
                                                                     opportunities from other
                                                                     donor organizations like
                                                                     EBRD, ADB and GEF. Allows
                                                                     both novice and
                                                                     sophisticated market
                                                                     players to find appropriate
                                                                     points of contact for
                                                                     questions. Could eventually
                                                                     be used to track
                                                                     performance metrics.
DOE-USAID Hydropower Partnership....  U.S. Hydropower Council for   Fiscal year 2006 focus on                150
                                       International Development.    project development and
                                       $400k from USAID and          closure in India and
                                       private sector.               Guatemala. Track record of
                                                                     success with more than $50
                                                                     million in projects
                                                                     finalized in the past 2
                                                                     years. Multiple private
                                                                     sector partners.
Sustainable Financing for EE........  Resource Mobilization         Expect to close on $10                   100
                                       Advisors (RMA). $500k from    million in EE project with
                                       Philippine Govt, NADBank,     U.S. partners in Mexico in
                                       USTDA and World Bank.         next 6 months. New deals in
                                                                     Poland and Philippines in
                                                                     next 18 months.
Africa Geothermal Mission...........  EERE, Govt of Kenya.........  Reverse trade mission                     30
                                                                     bringing officials from
                                                                     Kenya to U.S. Geothermal
                                                                     Conference to meet multiple
                                                                     vendors.
Energy Efficiency Initiative in       IRG, Govt of Ukraine. $600k   Create audit fund and                     50
 Ukraine.                              from USAID.                   project development support
                                                                     with U.S. ESCO's and local
                                                                     partners in Ukraine. CETE
                                                                     money will piggyback USAID
                                                                     to help engage U.S.
                                                                     technology vendors.
Clean Tech in Thailand with Southern  FE, SSEB, Govt of Thailand..  Good exposure to technology               40
 States Energy Board (SSEB).                                         vendors in 16 States
                                                                     through SSEB. Track record
                                                                     of success. Multiple SME
                                                                     private partners. Potential
                                                                     projects include biomass/
                                                                     coal hybrid and upgrades to
                                                                     existing thermal plants.
India Coal Beneficiation............  FE, Govt. of India..........  Builds on previous studies.               45
                                                                     Necessary to mitigate
                                                                     negative environmental
                                                                     impacts of near-term coal
                                                                     expansion in huge market.
                                                                     Multiple potential private
                                                                     partners. Could expand
                                                                     under Asia Pacific
                                                                     Partnership. Possible USAID/
                                                                     India buy-in.
China Ombudsman for Renewable.......  U.S. companies attending      Goal is to set up side                    29
                                       Renewable Conference.         meetings with interested
                                                                     parties in China around
                                                                     conferences where U.S.
                                                                     companies are participating
                                                                     and/or exhibiting. First
                                                                     event is in September 2006.
China Combined Heat and Power (CHP).  LBNL, U.S. CHP Association..  Seed funding to develop a                 45
                                                                     market plan, consider tech
                                                                     options and get U.S.
                                                                     vendors involved. Huge
                                                                     market potential.
Caribbean--New Energy sources.......  IDB, CARICOM, USAID.........  Support for new initiative                20
                                                                     to explore alternatives to
                                                                     fossil fuel in the broad
                                                                     Caribbean market. Launch
                                                                     Conference in September.
                                                                     CETE funding used to engage
                                                                     U.S. vendors for wind,
                                                                     hydropower and biofuels
                                                                     technology.
PI-Kazakhstan Nuclear power tour....  ORNL. Nuclear Energy          Responds to S-1 trip.                     45
                                       Institute (NEI), Govt of      Reverse trade mission to
                                       Kazakhstan.                   visit U.S. sites with
                                                                     potential vendors and
                                                                     investors. Large market and
                                                                     potential for U.S. sales.
PI-Kazakhstan Petrochemical Industry  GOK.........................  Responds to S-1 trip.         ..............
 Tour.                                                               Reverse trade mission. U.S.
                                                                     industry interest unclear.
                                                                                                 ---------------
        Total.......................  ............................  ............................             594
----------------------------------------------------------------------------------------------------------------

    In fiscal year 2006, we instituted performance metrics to measure 
the specific and tangible impact of the CETE program and we also 
solicited input on jointly funded projects. As a result, we are now co-
funding projects with USAID, TDA and the DOE Offices of Fossil Energy 
and Energy Efficiency and Renewable Energy.
    We have supported programs in 13 different countries in partnership 
with more than 20 private companies and 10 international organizations. 
Our funding is being leveraged at least 2:1 with other resources from 
private partners and other donor organizations.
    The programs we are supporting are intended to benefit multiple 
projects with multiple U.S. vendors and developers, and yet could not 
be accomplished by any one U.S. company acting alone.
    Regarding interagency coordination, we host CETE Working Group 
meetings on a quarterly basis. Representatives from all nine 
participating agencies regularly attend. We have also developed the 
``Clean Energy Exports Assistance Network'' (www.cleean.net) as a tool 
to better inform U.S. clean technology partners of specific energy 
market conditions and opportunities, and to better coordinate 
interagency resources.
    We also supported the preparation of a report titled ``Financing 
Mechanisms for Clean Energy Technology Exports'' with input from 
industry and CETE participating agencies. The report may be found at 
the website.
    Question. Because the Department of Energy has discretion to fund 
programs though the fiscal year 2007 Joint Funding Resolution, what is 
the Department doing to further develop and integrate the CETE 
Initiative into its overall international energy technology deployment 
strategies?
    What does the Department plan to do to continue to pursue the goals 
of the CETE Initiative in fiscal year 2008?
    Answer. The Office of Policy and International Affairs and the 
Office of Energy Efficiency and Renewable Energy are working together 
to define useful projects for fiscal year 2007 and an overall strategy 
for programs in fiscal year 2008. The goal is to focus on projects that 
may create lasting institutional abilities, and that have the potential 
to transform markets.
    Programs we are considering in fiscal year 2007 include further 
input to the website (www.cleean.net), and a training program on clean 
energy technologies for foreign service and foreign commercial service 
officials. We also plan to support industry events focused on new 
market opportunities in China, Central American, and the Caribbean.
    In fiscal year 2008, we want to pursue a strategy of integrating 
the CETE goals into our international programs by ensuring better 
industry participation and more effective coordination with other 
agencies and with large donor organizations such as the World Bank and 
the Global Environment Facility. We expect to narrow our focus to fewer 
strategic markets, and to support activities in those markets that 
offer the greatest potential for commercial implementation.
    Question. How is the Department and the administration integrating 
CETE with other administration activities such as the Asia-Pacific 
Partnership?
    Answer. As you know, the CETE program encompasses all clean 
technologies and is global in focus whereas the Asia-Pacific 
Partnership (APP) has seven technology-based working groups and is a 
partnership of six countries: Japan, Australia, S. Korea, India, China 
and the United States. Further, the goals of the CETE program are to 
support the efforts of U.S. industry, while the APP more broadly 
supports green-house gas emission reductions with participation by 
industries from all member countries.
    Question. How is the Department working with other Federal agencies 
as well as the private sector on all of these initiatives?
    Answer. Despite the differences in focus, we are coordinating 
efforts through the CETE interagency working group and on the website 
(www.cleean.net). Many of our industry partners under the CETE umbrella 
also participate in the APP. We anticipate that some projects supported 
under the CETE program in India and China may be good candidates for 
funding under the APP and vice-versa.

                               GAO REPORT

    Question. In December 2006, the GAO issued a report entitled ``Key 
Challenges Remain for Developing and Deploying Advanced Energy 
Technologies to Meet Future Needs.''
    The report summarized that despite the United States being more and 
more reliant on imported energy resources, the DOE's total budget 
authority for fossil energy R&D dropped from $1.9 billion (in real 
terms) in fiscal year 1979 to $434 million in fiscal year 2006. With 
the Energy Information Administration projecting that total U.S. energy 
demand will increase by about 28 to 35 percent between 2005 and 2030, 
GAO recommended that the Congress consider further stimulating the 
development and deployment of a diversified energy portfolio by 
focusing R&D funding on advanced energy technologies.
    I note with disappointment that DOE had no comment on this 
recommendation. Would you please provide me with your comments on GAO's 
recommendations?
    Answer. The GAO report provides valuable information that will be 
useful to the Department and the Government (in general terms) in 
connection with our research and development activities. Success in R&D 
is measured by its transition to commercial application. Examples in 
the oil and gas sector include down-hole telemetry, horizontal 
drilling, 3-D seismic analyses, and polycrystalline diamond drill bits, 
all of which have been adopted by the industry. Examples in the area of 
renewable energy are geothermal energy and hydropower, both now 
considered as fully developed technologies. The GAO report also notes 
that there is over $5 billion in tax expenditures (financial 
incentives) targeted at energy suppliers and users of advanced 
technology. The Energy Policy Act of 2005 augments these incentives 
with an estimated $11 billion worth of additional financial incentives 
over 10 years. The primary role for Government in this area is to fund 
high-risk, basic energy research, as was explicitly outlined by this 
administration in the Research and Development Investment Criteria 
issued in 2003. The GAO study fails to take stock of the increases over 
the last 2 decades in funding in this area, offsetting some of the 
declines in applied R&D. Taking into account all of these factors, we 
believe that DOE R&D is sufficient to meet our Nation's energy needs.

                     OIL AND GAS PRICE RELATIONSHIP

    Question. Would you please provide comments on EIA forecasts of 
natural gas and oil prices in its Annual Energy Outlook (2005 to 2007). 
It appears that each year, EIA significantly underestimates future 
prices of these fuels, specifically:
    In EIA's Annual Energy Outlook 2006 and 2007, natural gas price 
forecasts depart from a traditional price relationship to oil based on 
Btu parity, as demonstrated in the 2005 version. This departure is 
evident in both the reference case and the high oil price scenario. 
What is the basis for this significant departure? Why do industry 
analysts continue to stick with the traditional gas-oil price 
relationship while EIA sees the price ratio as almost doubling as in 
the high oil price case? (EIA)
    Answer. The historical record shows substantial variability in oil 
and natural gas prices and in the relationship between them. The ratio 
between the annual average prices of a barrel of West Texas 
Intermediate (WTI) oil and one million British Thermal Units (BTU) of 
natural gas at the Henry Hub has varied since 1990 from a high of 14.5 
to a low of 5.7.
    Historically, fuel switching between oil and gas was thought to 
have been a major contributor to the price relationship, but there has 
recently been some decline in the capacity to switch between these 
fuels in many end-use applications. While oil and natural gas continue 
to compete in some applications, oil and natural gas prices are also 
linked to the availability of alternative sources of supply; 
competition between coal, nuclear power, renewables, and natural gas as 
fuels for electricity generation; the availability and cost of inter-
fuel conversion technologies, such as gas-to-liquids; environmental 
restrictions; and the relative importance of transportation costs in 
the total delivered price of energy from each source, which affects the 
regional scale of inter-fuel competition. EIA expects there to be a 
relationship between oil and natural gas prices that varies somewhat 
depending on many factors, not necessarily a constant ratio of price 
between oil and gas that is closely linked to the ratio of their energy 
content that some industry analysts expect.
    Tighter markets, as we have experienced in recent years, result in 
greater price impacts from similar shifts in demand or supply than 
would be seen in looser markets. On the supply side, higher oil prices 
result in increased drilling for oil and thus higher costs for oil and 
gas drilling, placing upward pressure on gas prices. Higher oil prices 
also generally result in increased cash flow and the potential for 
greater investment in oil and gas prospects, placing downward pressure 
on gas prices. Over the longer-term, world markets will play a larger 
role in determining the relationship between oil and natural gas prices 
in the United States due to increasing trade in liquefied natural gas. 
This relationship will be influenced by worldwide fuel switching 
capability, exploration and production costs (E&P) costs, and the 
potential for a growing gas-to-liquids market.
    Numerous changes occur from one Annual Energy Outlook (AEO) to 
another. Nothing was specifically implemented in the model to change 
the oil-to-natural gas price relationship. For example, natural gas 
prices in the AEO2006 and AEO2007 are higher compared to the AEO2005, 
partially as a result of much higher costs. Higher prices resulted in 
slower projected growth in residential, commercial, and industrial gas 
consumption through conservation and inter-fuel substitution. In the 
power generation market, higher natural gas prices dramatically lower 
the future natural gas generation share and raise the coal share from 
what it might have been with lower natural gas prices. However, 
notwithstanding the possibility of significant policy changes affecting 
energy use over the next 25 years, AEO reference case projections 
generally assume that current laws and policies remain in place 
indefinitely, in order to provide a baseline for policy analyses 
requested by Congress and the administration. Should future policy 
actions to mitigate greenhouse gas emissions preclude significant 
growth in coal-fired generation, and if new nuclear power plants that 
would be economically attractive under such circumstances are blocked 
by other concerns, continued growth in gas-fired generation would 
likely reduce the future ratio of oil-to-natural gas prices from that 
projected in AEO2007.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein

                               ELK HILLS

    Question. As compensation for the Federal Government's sale of the 
Elk Hills Reserve, Congress mandated in the fiscal year 1996 National 
Defense Authorization Act (Public Law 104-106) that 9 percent of the 
net sales proceeds be provided to California for its claims to State 
school lands located in the Reserve. Of the $317.7 million owed to the 
State under the terms of this settlement, approximately $300 million 
has been paid to date.
    The Department of Energy's fiscal year 2008 budget does not provide 
for the remaining compensation. It is my understanding that California 
has already agreed to allow the Department to hold $6 million of the 
remaining compensation as a ``worst case scenario'' to complete the 
equity finalization process. The State is willing to come to a 
compromise with the Department over the remaining payment, and has 
offered to complete the claim with a final appropriation of $9.7 
million. Would this be an acceptable solution to the Department, and if 
not, why?
    Answer. If the State of California wishes to submit a proposal to 
the Department, we are open to considering it.
    Question. What is the Department's timeline to complete this 
settlement with the State of California?
    Answer. The equity finalization process is a complicated matter, 
and thus the timeline is uncertain.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici

                          CARBON SEQUESTRATION

    Question. Mr. Shope, as you are well aware, coal is the most 
CO2 intensive source of energy. Today, 75 percent of coal 
reserves are held by the United States, Russia, China, India and 
Australia, and it is clear that coal will be a major energy provider 
for each of these nations for the foreseeable future.
    The recently released MIT report, The Future of Coal, stresses the 
importance of large-scale demonstration projects for carbon capture and 
storage technologies. The authors conclude that projects inject less 
than 1 million tons of carbon dioxide per year and will not be large 
enough to replicate the geological stresses that a full commercial 
scale operation would produce. I understand that the current carbon 
injection projects are on a much smaller scale.
    Do you agree that such large-scale demonstrations are needed, and 
in what timeframe? What is the Department doing to expand its R&D 
efforts in this area?
    Answer. The Department of Energy (DOE) agrees that large-scale 
projects are necessary to demonstrate that carbon sequestration 
technologies are necessary to replicate commercial-scale operations. 
DOE has been planning for large-scale sequestration tests since 2004. 
The Regional Carbon Sequestration Partnerships are currently conducting 
some smaller tests that are helping to build the infrastructure and 
demonstrate the technology on a small scale. In 2007, the program is 
beginning work on the ``highest potential'' opportunities for an 
initial expedited round of large scale sequestration tests 
(approximately 1 million tons CO2 per year for each site). 
DOE has provided additional funding in the fiscal year 2007 budget for 
the Carbon Sequestration Program to award several large volume 
sequestration tests. The DOE is in the process of negotiating these 
large volume tests with the Regional Partnerships and plans to make 
some of the awards by the end of fiscal year 2007. The Regional 
Partnerships have come forward with a portfolio of project 
opportunities, a variety of geologic conditions, and future 
commercialization opportunities.
    Question. Has the Department developed a R&D roadmap to address the 
challenges facing adoption of carbon capture and sequestration?
    Answer. The DOE Carbon Sequestration Program issues a revised 
roadmap annually in May. It contains a discussion of the program's 
structure, challenges, and goals for technology development. This 
roadmap can be downloaded from the following website: http://
www.netl.doe.gov/publications/carbon_seq/refshelf.html.

               CHINA--CARBON SEQUESTRATION COLLABORATION

    Question. The MIT study also calls for up to 10 other large-scale 
demonstration projects in other countries. China in particular is 
building coal-fired power plants at a spectacular rate.
    Would you support a major initiative to partner with China to 
develop carbon capture and storage technologies?
    Answer. The Department is actively engaged with China on the 
development of carbon capture and storage technologies. China is 
involved in the FutureGen Alliance. China is also a member of the 
Carbon Sequestration Leadership Forum, whose purpose is to make 
information on viable carbon capture and storage projects broadly 
available internationally and identify and address wider issues 
relating to carbon capture and storage. Finally, carbon sequestration 
is within the purview of the Asia Pacific Partnership's Cleaner Fossil 
Energy Task, in which both China and the United States participate. We 
look forward to continued collaborations with China in the area of 
carbon capture and storage.
    Question. In your view, how can we best encourage China to 
collaborate with the United States in developing these technologies?
    Answer. The Department of Energy (DOE) will continue to encourage 
China through involvement in the Carbon Sequestration Leadership Forum, 
the FutureGen Alliance, and the Asia Pacific Partnership on Clean 
Development and Climate. China is a member of the Carbon Sequestration 
Leadership Forum, whose purpose is to make information on viable carbon 
capture and storage projects broadly available internationally and 
identify and address wider issues relating to carbon capture and 
storage. China is also involved in the FutureGen Alliance. Finally, the 
DOE and China are members of the Asia Pacific Partnership on Clean 
Development and Climate, which has a mission to promote the technical 
transfer and demonstration of clean coal technologies. We would look 
forward to this continued collaboration with China.

                           CARBON CAPTURE R&D

    Question. Developing carbon capture and storage technologies will 
require progress on several research fronts. First, the costs of carbon 
capture must be brought down to affordable levels. Second, the 
feasibility of injection technologies must be demonstrated at 
commercial scales. Third, monitoring and verification technologies must 
be developed.
    Which of these research areas do you believe to be the most 
challenging given today's technologies?
    Answer. The Department of Energy (DOE) believes that the 
demonstration of carbon storage at the appropriate scale and the 
development of low-cost carbon capture technologies are equally 
important. The need to demonstrate carbon storage at scale is needed to 
stress the injection operations and determine the effects on the 
storage formations. Different geological conditions and settings need 
to be assessed to show that the capacity and injectivity exists for 
full scale deployment. Protocols for the site selection, 
characterization, well construction, permitting, monitoring, and 
closure need to be developed from these projects so that full scale 
deployment can occur. Carbon capture technologies exist today in 
industrial applications, but have not been demonstrated at full scale 
in conjunction with electricity generation. In addition, the commercial 
systems that exist today would increase the cost of electricity by 
approximately 30 percent to 80 percent, for pre and post combustion 
technologies, respectively. Novel capture technologies are being 
researched in the laboratory and have the potential to reduce the 
increase in cost of electricity to DOE's goal of not more than 10 
percent. Continued research and demonstration of these technologies is 
needed at a pilot-scale and in full-scale integrated demonstration. 
Monitoring, mitigation, and verification technologies are necessary but 
new technologies are not critical to deployment of carbon capture and 
storage as a greenhouse gas mitigation technology. Existing 
technologies can be adapted for monitoring CO2 in geologic 
formations. Advancement in this area could improve our knowledge of the 
fate of CO2 and drive down the associated cost of 
monitoring.
    Question. In your view, how should the Office of Fossil Energy 
allocate its resources between these areas?
    Answer. The Department of Energy (DOE) has issued a roadmap for 
technology development, which is working to stage the funding 
requirements for the capture and storage demonstration projects. Early 
emphasis is on the demonstration of storage projects and bringing down 
the cost of CO2 capture. As the capture program has success 
in developing novel technologies for low cost capture, DOE is 
supporting pilot and demonstration tests to demonstrate that these 
capture technologies are ready for commercial deployment.
    Question. How should the Federal Government and the private sector 
share the cost burden of developing these technologies?
    Answer. The Department's Carbon Sequestration Program administers 
research and development awards through cooperative agreements, which 
require that participating organizations provide a minimum of 20 
percent cost share. For demonstration projects selected under a Clean 
Coal Power Initiative solicitation, the recipient would need to provide 
a minimum of 50 percent cost-share and agree to a schedule to reimburse 
the Government based on future revenues from sales of the 
commercialized technology.

                      TAXATION OF COAL R&D DOLLARS

    Question. Under the Clean Coal Power Initiative, Round 2, the 
Department of Energy has authorized funding of various private sector 
projects to demonstrate advanced clean coal technology, including 
advanced gasifier technology.
    It is my understanding that the IRS has changed its long standing 
policy toward Federal research funding to make these funds taxable as 
corporate income. The practical effect of this policy change is that 
one branch of government is providing funding to encourage a public 
purpose activity, while another branch of government is reducing that 
funding by taxing it.
    I have worked too hard on this subcommittee and as Chairman of the 
Energy Committee to make Federal energy R&D research a priority. Now to 
have the IRS change it's policy to levy a huge tax on the Federal R&D 
funds would be devastating in our effort to increase our energy 
independence.
    Can you please explain the logic behind this decision and what 
impact it will have on Federal R&D efforts to have upwards of one-third 
of the funding going toward tax payments instead of research?
    Answer. I would refer you to the Department of Treasury for an 
explanation and rationale of their decisions.
    Question. Has Secretary Bodman contacted Treasury Secretary Paulson 
to discuss this matter?
    Answer. The Department of Energy has been in contact with the 
Treasury Department to understand the rationale behind this ruling and 
what options may be available under current law to utilize allocated 
research and development funding.
                                 ______
                                 
               Question Submitted by Senator Wayne Allard

             NAVAL OIL SHALE RESERVES ROYALTY DISTRIBUTION

    Question. As you may be aware, when Congress transferred Naval Oil 
Shale Reserves (NOSR) Numbers 1 and 3 from the Department of Energy to 
the Department of the Interior in 1998 the legislation stated that DOI 
could not begin the ``normal'' process of royalty distribution until 
DOE was compensated for their ``original investment'' and for the costs 
of cleanup of the Anvil Points facility. To ensure this happened 
section 7439 (f)(2) of the Transfer Act stated that the Secretaries of 
Interior and Energy must jointly certify to Congress that the monies 
have been recouped prior to making revenue available for distribution 
to the State of Colorado.
    Oil and gas receipts collected from production within NOSR Number 3 
have now far surpassed the estimate of what was needed to fully 
reimburse DOE for their original investment as well as covering the 
cost of environmental remediation at the Anvil Points site. It is my 
understanding that the agencies will not agree to certification until 
the necessary clean-up is complete. As you and I both know, that will 
likely take several more years.
    I was serving in the Senate at the time and played an active role 
in the passage of this provision. It is my view that DOE and DOI have 
misread the intent of Congress in determining that the clean-up must be 
complete. Can you please tell me what this position was based on?
    Answer. Although the Department of the Interior assumed 
responsibility for the environmental remediation of Anvil Points, the 
Secretary of Energy must certify that there are adequate funds in the 
account to offset all costs incurred by the Government, including the 
Department of the Interior's proposed cleanup plan. It is our 
understanding that Department of the Interior has not finalized its 
cleanup plan; consequently the cost of that plan remains to be 
estimated.
    At such time as the Department of the Interior completes the plan 
along with the estimate of costs, the Department of Energy stands ready 
to quickly review and certify whether the funds generated exceed the 
total costs. We will continue to work closely with the Department of 
the Interior to facilitate the completion of the necessary measures to 
initiate the appropriate distribution of the royalty payments from the 
former Reserves.
                                 ______
                                 
                Questions Submitted to Kevin M. Kolevar
             Questions Submitted by Senator Byron L. Dorgan

                   CONSOLIDATION OF RESEARCH PROGRAMS

    Question. I have noticed that the Distributed Energy Systems has 
been renamed to Renewable and Distributed Systems Integration. The 
funding has been reduced and the focus changed to distributed 
generation technologies on the utility side of the meter. What has 
happened to development of technologies on the customer side of the 
meter? Has it been reduced, eliminated, or moved to another research 
area? Why was this done?
    Answer. The Office of Electricity Delivery and Energy Reliability's 
(OE) Distributed Energy Systems budget line has been renamed to reflect 
the fact that distributed generation technologies have been completed. 
The Distributed Energy Program has met its performance targets of: (1) 
achieving three integrated energy systems (combined heat and power 
systems) of greater than 70 percent efficiency; (2) demonstrating a 38 
percent efficient microturbine; and (3) demonstrating a 44 percent 
efficient reciprocating engine. The research efforts will now address 
Renewable and Distributed Systems Integration (RDSI), as reflected in 
the budget request. This research will concentrate on the integration 
of renewable and distributed energy technologies into the grid at the 
distribution system level.
    The successful demonstration of this integration could 
substantially increase the use of renewable and distributed energy for 
supplying power and other ancillary services during peak load periods 
in support of electric distribution operations. These projects will 
also demonstrate the ability of these technologies to reduce power 
required to the distribution feeder. This will be accomplished through: 
modeling, design, integration, and RD&D of renewables and distributed 
energy integration into the distribution system; low-cost sensors; 
advanced monitoring; and consumer information. The goal of RDSI is to 
demonstrate a peak load reduction of 20 percent by 2015 and improve 
asset management on distribution feeders. This will be accomplished 
through the implementation of distributed energy (including renewables) 
and energy management systems that are cost competitive with system 
capacity upgrades.
    The development of technologies on the customer side of the meter 
is the responsibility of the Office of Energy Efficiency and Renewable 
Energy. Currently, only renewable technologies that can be placed on 
the utility side of the meter are being supported in this office. The 
Distributed Energy activities were moved by Congress in the fiscal year 
2006 appropriations.
    Question. DOE has developed programs such as GridWise and GridWorks 
to facilitate grid systems integration while fostering development of 
the ``smart grid'' concept. Your office has restructured and 
streamlined your R&D programs in fiscal year 2007 and into fiscal year 
2008.
    Thus, what is the status of these efforts? What has your office 
done since the 2003 Blackout to address the role of advanced 
technologies to avoid similar situations and to coordinate with the 
private sector to shepherd these technologies into the marketplace?
    Answer. In fiscal year 2005, the Department issued a solicitation 
and awarded cooperative agreements in support of the Gridwise and 
Gridworks research plans. Some of these awards are completed and others 
are still in progress. The Department remains committed to completing 
the activities initiated under this solicitation for Gridwise and 
Gridworks. As a result of these activities, the Department has 
recognized the need to promote advanced grid control technologies 
(Gridwise) and improved hardware (Gridworks) in a systematic manner.
    We have identified the causes of the 2003 blackout and have made 
progress in implementing the recommendations made by the U.S.-Canada 
Power System Outage Task Force (Task Force). The most important 
recommendation of the Task Force was for the U.S. Congress to enact 
legislation to make compliance with reliability standards mandatory and 
legally enforceable, which the Congress did in the Energy Policy Act of 
2005. The Federal Energy Regulatory Commission implements this policy 
through oversight of the North American Electric Reliability Council as 
the Nation's ``Electric Reliability Organization.''
    The electricity delivery system is extremely complex and remains 
subject to combinations of mechanical and human failures. Although 
improvements have been made to the grid since 2003 in areas such as 
operator training, we can never entirely prevent blackouts from 
occurring. What we can do is improve our ability to identify and 
isolate problems on the grid when they arise. That is why my office 
works with transmission system operators on the next level of 
technologies that will increase the ability of operators to receive 
real-time information regarding transmission problems.
    It is also important that we are not just prepared for a blackout 
similar to that of August 14, 2003; we must be well-prepared for a 
wider range of possible events. The Office of Electricity's (OE) 
Infrastructure Security and Energy Reliability program provides hands-
on expertise to assist in the recovery of the transmission network, no 
matter what the cause of the failure. Finally, under authority from the 
Energy Policy Act of 2005, OE assists State and regional planners by 
identifying areas of electric congestion, coordinating Federal 
authorizations required to site new transmission, and where 
appropriate, designating national interest electric transmission 
corridors to enable the FERC, under certain circumstances, to site 
transmission facilities.

              HIGH TEMPERATURE SUPERCONDUCTIVITY RESEARCH

    Question. I note that the funding level for high temperature 
superconductivity research and development has been cut by 42 percent 
from the funding level in fiscal year 2006. Why such a significant cut? 
What technology applications are being reduced because of these cuts?
    Answer. The cut was to focus the high temperature superconductivity 
program on higher priority wire development and cable demonstrations 
(including fault current limiters). The cut in high temperature 
superconductivity reflects phasing out of motor research and completing 
flywheel cooperative agreements.

              ELECTRICITY TRANSMISSION AND ENERGY DELIVERY

    Question. I have noted your office's work on determining areas of 
congestion and defining national corridors as well as your work in 
siting and permitting. North Dakota has a variety of energy resources 
that are stranded and that are not able to move to markets. What is 
your office doing to help promote and expand transmission delivery and 
efficiency in North Dakota and around the country?
    Answer. My office is involved in four major activities to help 
transmission delivery and improve efficiency in North Dakota and around 
the country.
    First, in August 2006, in accordance with section 1221(a) of the 
Energy Policy Act of 2005 (EPACT), the Department of Energy (DOE) 
released the National Electric Transmission Congestion Study 
(Congestion Study), which examined transmission congestion and 
constraints and identified constrained transmission paths in many areas 
(except Texas) that are facing growing demand. The congestion study 
identified three categories of congestion areas that merit further 
attention throughout the continental United States. The third type of 
congestion areas in the study, ``Conditional Congestion Areas,'' 
identified areas where congestion is not presently acute, but could 
become so if considerable new electric generation were to be built 
without associated transmission capacity. The region from the Dakotas-
Minnesota falls into this category because it contains potential 
locations for new large-scale wind and coal generation that could serve 
distant load centers.
    Second, in addition to fulfilling the EPACT requirement that the 
Department update the Congestion Study every 3 years, DOE will also 
issue annual reports in the interim that detail the progress made in 
addressing the congestion challenges as identified in the 2006 
Congestion Study. My office is preparing a draft for the Department's 
Congestion Alleviation Update that will be published in fall 2007. This 
update will detail the transmission, generation, and demand reduction 
activities that have occurred in the areas of transmission congestion 
that the Department identified in its August 2006 study.
    Third, my office is implementing two other areas of EPACT that 
relate to transmission delivery. One of these is in accordance with 
EPACT section 368 and is a joint effort with the Departments of 
Agriculture, Commerce, Defense, and Interior to designate energy 
corridors on Federal lands for oil, gas, and hydrogen pipelines in 
addition to electricity transmission and distribution facilities. A 
record of decision for the 11 contiguous Western States, is expected to 
be completed in fiscal year 2008. Corridor designation for the Eastern 
United States, Alaska, and Hawaii will begin in early fiscal year 2008. 
The second area of EPACT is in accordance with the new Federal Power 
Act section 216(h) created under EPACT section 1221(a). The Department 
is now beginning this process of coordinating all applicable Federal 
authorizations and related environmental reviews that are required to 
site an electric transmission facility.
    Fourth, my office has been and continues to support the efforts of 
States and transmission planners to work on a regional basis to better 
coordinate electric infrastructure improvements. For example, for a 
number of years we have given direct funding support, as well as in-
kind support from various technical analyses and studies, to the 
Western Governor's Association for its ``Committee on Regional Electric 
Power Coordination,'' which is an ad-hoc group of Western State 
officials who meet regularly to better coordinate and encourage needed 
electric infrastructure improvements in the Western Interconnection. A 
number of regional and sub-regional transmission planning and study 
groups in the West have emerged as a result of the encouragement of 
these State officials and their Governors. In fact, the Department 
reviewed many of the documents these groups have produced in conducting 
analysis for the Congestion Study. As a result of the Congestion Study, 
the western region, with oversight by a body of State officials, has 
now developed regional transmission planning through the Western 
Electricity Coordinating Council.
    Similarly, in the Eastern Interconnection, grid planners are 
undertaking efforts to conduct interconnection-wide analyses. The new 
Eastern Reliability Working Group has brought together all of the 
regional transmission operators, independent system operators, and 
reliability councils in the Easter Interconnection.
    The Office of Electricity also coordinates with the Office of 
Energy Efficiency and Renewable Energy to provide technical assistance 
to transmission planners and grid operators seeking to integrate wind 
generation into the transmission grid. This includes working with the 
Midwest Independent System Operator to identify possible transmission 
upgrades that will enable wind generation in North Dakota to be 
developed.

                        LOAN GUARANTEE QUESTIONS

    Question. Since the passage of the fiscal year 2007 Joint Funding 
Resolution, the Department has moved forward on several fronts related 
to the loan guarantee program. Please tell the committee where the 
Department stands in terms of setting up the new loan guarantee office, 
issuing final regulations for this program, and reviewing the pre-
applications submitted last year.
    Answer. The Department has advertised the position for the Director 
of the Loan Guarantee Program Office. A number of resumes have been 
received to date, and the Department will review the resumes for 
qualified candidates. In addition, two senior Department of the 
Treasury employees with experience in Federal loan guarantee programs 
have joined the Loan Guarantee Program Office on 6 month details to 
help establish the office. Once the Director has been hired, the 
Director will make a determination on required staffing expertise and 
those positions will be recruited.
    With respect to the issuance of final regulations, the Department 
is working to meet the August 2007 deadline contained in the Revised 
Continuing Appropriations Resolution, 2007, Public Law 110-5. A Notice 
of Proposed Rulemaking was published in the Federal Register on May 16, 
2007 and is open for public comment until July 2, 2007.
    Finally, the Department is completing a preliminary review of the 
applications to determine which applications are responsive to the 
solicitation. Guidance has been issued to program offices to begin the 
technical reviews of the pre-applications. Separately, the Loan 
Guarantee Office will be reviewing each pre-application for compliance 
with the financial, commercial, and other criteria set forth in the 
August 2006 solicitation and accompanying guidelines. Ultimately, the 
goal is to complete the pre-application evaluations this summer.
    Question. With all of these activities underway, when do you think 
that the Department can reasonably expect to make the public 
announcements regarding awards to industry?
    Answer. The Department anticipates that it will take until at least 
the first quarter of calendar year 2008 to issue the first loan 
guarantees.
    Question. In the fiscal year 2007 Long-term Funding Resolution, 
Congress provided funding to support establishment of a loan guarantee 
office. Congress authorized up to $4 billion in loan guarantees to be 
available immediately and directed that no loan guarantee awards can be 
made until final loan guarantee regulations are in place, 6 months from 
the date of enactment of the fiscal year 2007 Long-term Funding 
Resolution. Furthermore, in fiscal year 2008, the Department is seeking 
additional funding to support the loan guarantee office, and you are 
requesting $9 billion in additional authority with a caveat that this 
amount would be reduced from amounts previously provided.
    If the request is for $9 billion to be reduced by the amount 
previously provided, is that amount previously provided, the $2 billion 
the Department previously announced would be available late last year 
or the $4 billion that the Long-term Funding Resolution provided?
    Answer. As the Department anticipates that it will take until at 
least the first quarter of calendar year 2008 to issue the first loan 
guarantees, DOE anticipates issuing $9 billion in loan guarantees in 
fiscal year 2008.
    Question. Does the Department believe that new coal and nuclear 
power plants are very capital intensive and thus requiring additional 
assistance to construct first-of-a-kind technologies? The committee is 
aware of information that the costs of these plants are very large 
relative to the market capitalization of some of the utility companies 
that are interested in constructing such facilities.
    What is the Department's current assessment of the economic 
viability of new commercial coal and nuclear power plants?
    How would Federal loan guarantees affect the relative economics of 
these new coal and nuclear power plant projects?
    In view of the uncertainties and regulatory risks associated with 
the initial deployment of a new fleet of IGCC carbon capture-ready and 
nuclear power plants, in your judgment would the loan guarantee program 
play an important role bringing these planned projects to fruition?
    Answer. Advanced, environmentally friendly, clean coal technologies 
are poised to enter the market, but some require a price premium 
relative to more conventional technology. In spite of the higher cost, 
the private sector has shown great interest in these technologies. The 
2008 budget continues robust funding for the President's Advanced 
Energy Initiative to develop and accelerate the deployment of advanced 
energy technologies, including new coal and nuclear technologies. Long-
term regulatory drivers, such as the Clean Air Interstate Rule (CAIR) 
and the Clean Air Mercury Rule (CAMR), also provide an incentive for 
the private sector to invest in these technologies.
    The Department received 143 pre-applications requesting more than 
$27 billion in loan guarantee protection for this initial round of 
guarantees. Twenty-three projects, representing $16 billion in loan 
guarantees were for advanced fossil technology.
    Loan guarantees, along with other provisions in the Energy Policy 
Act of 2005, can play a role in accelerating the deployment of advance 
coal and carbon capture technologies.
                                 ______
                                 
                Question Submitted by Senator Jack Reed

                         DISTRIBUTED GENERATION

    Question. Mr. Kolevar, the 2008 request essentially zeroes out the 
Distributed Energy Resource program, which used to be a $60 million 
program aimed at helping Combined Heat and Power and other clean and 
efficient technology get onto the grid. This program was shifted to the 
Office of Energy Distribution and Energy Reliability last year and now 
is slated for elimination. Has EDER abandoned its commitment to develop 
clean distributed generation, and focus only on transmission and power 
delivery issues?
    Answer. The focus on the development of distributed generation 
technologies has been completed. The Distributed Energy Program has met 
its performance targets of: (1) achieving three integrated energy 
systems (combined heat and power systems) of greater than 70 percent 
efficiency; (2) demonstrating a 38 percent efficient microturbine; and 
(3) demonstrating a 44 percent efficient reciprocating engine. The 
research has now shifted to Renewable and Distributed Systems 
Integration (RDSI) work. This research will concentrate on the 
integration of renewable and distributed energy technologies into the 
grid at the distribution system level. By successfully demonstrating 
this integration, the use of renewable and distributed energy in 
support of electric distribution operations should substantially 
increase for supplying power and other ancillary services during peak 
load periods.
    These projects will also demonstrate the ability of these 
technologies to reduce power required to the distribution feeder. This 
will be accomplished through modeling, design, integration, and RD&D of 
renewables and distributed energy integration into the distribution 
system; low-cost sensors; advanced monitoring; and consumer 
information. The goal of the RDSI is to demonstrate peak load reduction 
of 20 percent by 2015, and improve asset management on distribution 
feeders with the implementation of distributed energy (including 
renewables), and energy management systems that are cost competitive 
with system capacity upgrades.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici

      OFFICE OF ENERGY ELECTRICITY DELIVERY AND ENERGY RELIABILITY

    Question. Mr. Kolevar, I understand that your office has had the 
responsibility for complying with section 1221 of the Energy Policy Act 
that requires the Secretary to designate ``National Interest Electric 
Transmission Corridors''
    We all know how difficult it is to site electric transmission 
lines, but with a projected 19 percent increase in electricity demand 
over the next decade; we must work through the NIMBY issues.
    What is the status of this report and what are the next steps in 
designating these critical infrastructure corridors.
    Answer. Section 216(a) of the Energy Policy Act of 2005 authorizes 
the Secretary, in his discretion, to designate geographic areas where 
transmission congestion or constraints adversely affect consumers as 
national interest electric transmission corridors (National Corridors). 
On April 26, 2007, DOE issued two draft National Corridor designations, 
in relation to the two Critical Congestion Areas identified in the 
Department's August 2006 Congestion Study. The first is the draft Mid-
Atlantic Area National Corridor and the second is the draft Southwest 
Area National Corridor. If, after consideration of all comments on 
these drafts and consultation with the affected States, the Secretary 
of Energy decides that designation of either or both areas is 
appropriate, he will issue one or more orders doing so.
    DOE welcomes comments on the draft National Corridor designations 
and has opened a 60-day public comment period, which will end on July 
6, 2007. Please refer to the Federal Register Notice for information on 
the comment process. The full text of the notice is available at http:/
/nietc.anl.gov. During the public comment period, the Department 
intends to hold seven public meetings to discuss these drafts.
    In 2006, the Department announced that, in addition to the 
statutory requirement under section 216(a) of FPA that the Department 
release a congestion study every 3 years, DOE would issue annual 
progress reports in addition to the triennial studies. Accordingly, the 
Department is beginning a review of mitigation activities underway in 
each of the congestion areas identified in last year's Congestion 
Study. The activities that will be examined include the status of 
transmission projects that are proposed, permitted and completed since 
last August. We will also be identifying new or proposed local 
generation, demand response programs, and energy conservation and 
efficiency programs affecting congestion in the identified congestion 
areas. The Department intends to issue this congestion alleviation 
progress report in fall 2007.

                           ENERGY STORAGE R&D

    Question. Mr. Kolevar, your fiscal year 2007 spending plan provides 
only $5 million to support R&D storage. This level of funding is 
woefully inadequate considering the biggest challenge to the deployment 
of renewable generation is the intermittent nature of these 
technologies. It is vitally important that your office work with Asst. 
Secretary Karsner's team to ensure that energy storage R&D compliments 
the renewable research.
    Can you explain why this important R&D effort has received so 
little in spending? If Congress provided and additional $5 million or 
$10 million how would you spend this funding?
    Answer. Funding requests for energy storage research during the 
last 5 years have fluctuated between approximately $5 million and $3 
million. However, this amount has been augmented by up to $11 million 
in congressionally directed funding and by some $7 million in annual 
cost share from our State and utility partners. The program is 
considered worldwide as one of the leaders in this field.
    An extra $5 million or $10 million would expand the scope of OE's 
research program.

                     ENERGY INFRASTRUCTURE SECURITY

    Question. Mr. Kolevar, your fiscal year 2007 spend plan recommends 
a significant increase in funding for infrastructure security, which 
was not included in your fiscal year 2007 request and it is unclear 
from the spend plan how this funding is being used and for what 
purpose.
    Is this funding being used to improve foreign energy infrastructure 
security--are these Middle East countries?
    Answer. In fiscal year 2007 the Office of Electricity (OE) has been 
tasked as the technical lead assisting the State Department in 
executing the Critical Energy Infrastructure Protection (CEIP) 
initiative, which is overseen by the National Security Council (NSC). 
The Department of Energy's (DOE) role is to assess and advise foreign 
countries who have requested U.S. assistance on needed improvements to 
their energy infrastructure security. Our teams of expert teams travel 
to the host country and assess current security measures and recommend 
improvements. The host country funds and implements the actual 
improvements that are identified in the development of a CEIP security 
program.
    The specific countries targeted by this program were selected by 
the intelligence community, were coordinated through the interagency 
process, and were provided in a report to the NSC. To date, CEIP 
Initiative activities have been limited to the Middle East, although 
DOE and the Department of Homeland Security have provided similar 
support to Canada and Mexico because of the interconnected nature of 
our energy systems.
    Question. Is this funding being cost shared by the nation that is 
benefiting from this security evaluation? Is there any reason why the 
country can't or should not pay for this activity?
    Answer. Each host country has shared the cost of the consultation 
with the U.S. Government, although specific cost-sharing mechanisms 
vary depending on the country. The Office of Electricity funds travel 
and lodging of U.S. Government employees and required security training 
for U.S. Government employees traveling to dangerous areas. It also 
provides for the participation of contractors with specific expertise 
relevant to energy security in a high-threat environment and Federally-
funded national lab experts and scientists. Finally, OE reimburses U.S. 
Embassies for their support efforts. All participating host foreign 
nations have agreed to pay for the technical experts' internal travel 
while in country. They have also provided aircraft and watercraft that 
the teams have needed and have supported the teams' security needs. 
While DOE helps to evaluate security requirements, the host country has 
the sole responsibility for funding all such security enhancements to 
the critical energy infrastructure.
    Question. Is this a free service we intend to provide to other 
countries in the future or, do we have a special obligation to these 
nations?
    Answer. The United States is not responsible for the entire cost of 
the consultation--the costs are shared with the host nation. The fiscal 
year 2007 initiative is limited to those nations the intelligence 
community has identified in a classified document to the NSC.

                          SUBCOMMITTEE RECESS

    Senator Dorgan. We thank the witnesses for appearing. This 
hearing is recessed.
    [Whereupon, at 4:15 p.m., Wednesday, April 11, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2008

                              ----------                              


                       WEDNESDAY, APRIL 18, 2007

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:35 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Byron L. Dorgan (chairman) 
presiding.
    Present: Senators Dorgan, Murray, Feinstein, Reed, 
Domenici, Craig, and Allard.

                          DEPARTMENT OF ENERGY

                National Nuclear Security Administration

STATEMENT OF HON. THOMAS P. D'AGOSTINO, ACTING UNDER 
            SECRETARY FOR NUCLEAR SECURITY AND 
            ADMINISTRATOR, NATIONAL NUCLEAR SECURITY 
            ADMINISTRATION
ACCOMPANIED BY:
        WILLIAM H. TOBEY, DEPUTY ADMINISTRATOR FOR DEFENSE NUCLEAR 
            NONPROLIFERATION, NATIONAL SECURITY ADMINISTRATION
        ADMIRAL KIRK DONALD, DIRECTOR, NAVAL NUCLEAR PROPULSION, U.S. 
            NAVY

              OPENING STATEMENT OF SENATOR BYRON L. DORGAN

    Senator Dorgan. This is a hearing of the Appropriations 
Subcommittee on Energy and Water Development. We will be joined 
shortly by ranking member, Senator Domenici. And, I welcome 
Senator Craig.
    The hearing today will be for the purpose of reviewing the 
fiscal year 2008 budget request for the National Nuclear 
Security Administration (NNSA). The proposed budget for NNSA is 
nearly $9.4 billion. That's 39 percent of the Department of 
Energy's total budget for fiscal year 2008, an increase of $306 
million above fiscal year 2007's operating plan, but only a $71 
million increase over the administration's fiscal year 2007 
budget request. The weapons activities request is $6.5 billion. 
The nuclear nonproliferation request is $1.67 billion. This 
represents about 18 percent of the NNSA total budget. The 
remainder of the NNSA's budget is made up of $808 million for 
naval reactors and $394 million for the Office of the 
Administrator.
    NNSA's fiscal year 2008 budget request appears measured 
when weighed against fiscal year 2006 and 2007, but if you go 
back a few years, we see a very substantial increase in funding 
has taken place in these accounts. In 2001, NNSA's budget was 
$6.7 billion. That has grown by about $2.7 billion in the past 
eight fiscal years.
    I'm trying to, as a new chairman of this subcommittee, 
understand as much as I can about what this budget means, what 
these activities are. This is, obviously, an interesting, 
complicated area of the Federal budget and it's an interesting 
and complicated set of policy issues.
    Mr. D'Agostino, you represent an organization that is 
involved in very important and very complicated matters. And, 
we appreciate your being here today to testify. You are 
involved in our nuclear weapons programs in this part of our 
Department of Energy. There's not much that we do that is more 
important than those issues, including the issue of 
nonproliferation. Mr. Tobey, you are involved in that issue.
    I'll be asking some questions later about the issue of the 
construct of nuclear weapons, the RRW program, the issue of the 
nonproliferation efforts that are underway. This is a, just a 
critically important function of our Government. We need to try 
to make sure we get this right. It's about national security. 
It's about stopping the spread of nuclear weapons around the 
world, stopping the spread of nuclear technology.
    We face, at this time, very significant issues with 
countries like Iran and North Korea over the issue of 
enrichment capabilities and nuclear weapons production. The 
list of nuclear weapon countries, both rogue and nonrogue, 
could very well grow in future years. If that's the case, that 
will, in my judgment, increase the threat to our country.
    And so, all of these things are very, very important. I 
can't have answers, don't have answers to all of the questions 
that are posed by these issues that we'll talk about today. 
But, I think we need to continue to explore and ask questions 
about them all and try to understand where we're headed.
    Let me call on Senator Craig. If you have any opening 
comments, Senator Craig.

                    STATEMENT OF SENATOR LARRY CRAIG

    Senator Craig. Well, Mr. Chairman, there is a portion of 
this budget that I know a good a deal about, so let me tell you 
about it. And, I say that because few understand and oftentimes 
are quite surprised when I say out in the middle of the high 
deserts of Idaho rests a nuclear submarine or at least the 
ingredients of it as it relates to nuclear propulsion. And, I 
say that because I'm talking about the construct, or the 
construction of, in 1953, a Nautilus prototype reactor, which 
really started our nuclear Navy and I suspect--Admiral, did you 
train in Idaho?
    Admiral Donald. I did not, sir.
    Senator Craig. You did not.
    Mr. D'Agostino. I did. Yes, sir, I did.
    Senator Craig. There, Mr. D'Agostino did. And, quite often 
when you talk to those of the nuclear Navy, they will have 
spent time in Idaho. Now, having said that, that is really, as 
we all know, one of the great success stories of the nuclear 
side of us, as a country. Not only what we've done with the 
nuclear Navy, the successes, the changes in the type of 
reactors, the fuel cycle.
    I say this publicly, loudly, as often as I can, had we been 
as dedicated to the commercial side of nuclear electrical 
generation as we were to nuclear propulsion and the refinement 
of reactor and fuel cycle, we would without question be leading 
the world today in highly efficient reactors of a kind that we 
are attempting to imagine. But, we're not there because we 
stopped. We did not do that with the nuclear Navy.
    Also, I will say that in 1967, the advanced test reactor at 
the INL, our national lab, began to tackle the nuclear fuels 
reliability and materials testing issue. It was commissioned in 
1967 to support the Navy's nuclear propulsion program. And, all 
I can say is that all of us can be extremely pleased with those 
successes. There is none finer in the world today than what we 
have accomplished with our nuclear Navy.
    And, as a result of that, I am, you know, pretty open, 
pretty direct, and extremely proud that so much of that was 
accomplished at the national laboratory in southeastern Idaho. 
So, obviously I look at the broader issues involved in this 
portion of the budget, but I focus very closely on a portion of 
it that deals with the Idaho facility and the ongoing work that 
we do and the science. The Office of Energy, Nuclear Energy and 
Science and transitioning the ATR to a national users facility 
that industry and the academic community can access for all 
that we're attempting to do today, Mr. Chairman, as it relates 
to the dynamics of the nuclear industry and the fuels that will 
ultimately be part of that growing industry as we now see it.
    Senator Dorgan. Senator Craig----
    Senator Craig. Again, gentlemen, thank you.
    Thank you, Mr. Chairman.
    Senator Dorgan. Thank you very much.
    Senator Reed.
    Senator Reed. Mr. Chairman, I have no opening statement. 
Thank you though.
    Senator Dorgan. Let me make one additional comment, because 
I think it's important to say that the issues we will talk 
about today, RRW, nonproliferation, and so on, are not issues 
that we deal with in isolation. These issues are part of a 
larger national and international discussion about nuclear 
weapons policies, about stock, our stockpile, reliability, 
about nonproliferation, about test ban treaties, and so on. 
There's a, so my point is, these are big issues. You know, we 
work everyday in areas here in Congress that have some big 
issues and some small issues. These are very big issues that 
have national and international consequences.
    And, Mr. D'Agostino, thank you for being here. It's been a 
pleasure to meet you and begin to work with you in these 
months. And, I would include your entire statement as a part of 
the permanent record and ask you to summarize and introduce as 
well, Admiral Donald and Mr. Tobey.

                 STATEMENT OF HON. THOMAS P. D'AGOSTINO

    Mr. D'Agostino. Thank you, Mr. Chairman and members of the 
subcommittee. I'm Tom D'Agostino, the Deputy Administrator for 
Defense Programs and I'm accompanied today by Will Tobey, on my 
left, who is the Deputy Administrator for Defense Nuclear 
Nonproliferation. And, Admiral Kirk Donald, on my right, the 
Deputy Administrator for Naval Reactors.
    As you mentioned earlier, the President's fiscal year 2008 
budget request for the NNSA is $9.4 billion. It supports three 
basic national security missions. The first is to assure the 
safety, security, and the reliability of the U.S. nuclear 
stockpile, while at the same time transforming that stockpile, 
making it smaller essentially, and the associated 
infrastructure. The second major mission is to reduce the 
threat posed by nuclear proliferation. The third is to provide 
a reliable and safe nuclear reactor propulsion system for the 
United States Navy.
    In order to accomplish this mission, we developed a vision, 
which we call Complex 2030. And simply put, this vision has 
four main portions to it. The first is to transform the nuclear 
weapons stockpile by making it smaller, by making it safer, and 
by making it more secure. The second element is to reduce the 
size of the nuclear weapons infrastructure, decreasing the 
footprint in the United States of that infrastructure and the 
impact on the environment. The third is to change the way we do 
business, drive more efficient business processes. And, the 
fourth is to sustain and improve the science and technology 
base that's gotten us to this point and allows us to have such 
a strong national security.
    I'm pleased to report today that stockpile stewardship is 
working. This program has successfully sustained the safety, 
security, and reliability of the U.S. nuclear arsenal without 
the need to conduct an underground nuclear test. Many actions 
to transform the size and operations of the complex, transform 
the stockpile, and drive the science and technology base are 
well underway.
    We are reducing the number of sites with large quantities 
of special nuclear materials and consolidating these materials 
within the remaining sites. We're maintaining an accelerated 
rate of dismantlement of retired warheads. We want to take 
these weapon systems apart. We are reconstituting the nuclear 
weapons production capability and we have revived our ability 
to extract tritium for use in the stockpile at our new tritium 
extraction facility in South Carolina.
    I'd like to emphasize that our recent Reliable Replacement 
Warhead announcement addressed the selection of a baseline for 
further study. It was not an announcement to actually, or a 
decision to actually, build a replacement warhead.
    Over the next 9 to 12 months, our plans are simply to 
develop a detailed cost, scope, and schedule baseline for a 
Reliable Replacement Warhead for the Trident submarine launched 
ballistic missile. With this baseline, we'll be able to develop 
the details and the plans necessary for us to evaluate whether 
we need to make a decision on further reducing the number of 
life extensions that we have planned and reducing the overall 
size of the stockpile itself. We will work very closely with 
the Congress as we move forward, to ensure that we proceed in a 
step-wise measured and well understood manner in this respect.
    One of the major benefits of a Reliable Replacement Warhead 
approach is that it reinforces our nonproliferation commitments 
and objectives. This strategy will allow us to increase our 
warhead dismantlement rate, sending a strong message to the 
world that we're taking meaningful steps toward further 
stockpile reductions. Additionally, increased long-term 
confidence and the credibility of the U.S. nuclear deterrent 
will assure allies and obviate any need for them to develop and 
field their own nuclear forces.
    Finally, the improved security features of a Reliable 
Replacement Warhead concept will prevent unauthorized use, 
should this warhead ever fall in the hands of terrorists. In 
the area of nuclear nonproliferation, the NNSA has worked with 
over 100 international partners to detect, prevent, and reverse 
proliferation of weapons of mass destruction. We're securing 
and reducing the quantity of nuclear and radiological 
materials, bolstering border security overseas, strengthening 
international nonproliferation and export control regimes, and 
conducting cutting-edge research and development of nuclear 
detection technologies. All of these are key mission areas for 
the nonproliferation program.
    Meeting our commitment under the Bratislava Agreement, to 
conclude security upgrade activities at the Russian nuclear 
sites by the end of 2008, is our highest priority. As a result 
of our efforts to accelerate this work, we are well positioned 
to successfully reach this milestone on schedule. In addition 
to our work with Russia, some of the highlights in the 2008 
budget include completing installation of radiation detection 
monitors at ports in Belgium, Oman, and the Dominican Republic 
and continuing the MOX fuel fabrication facility project to 
eventually dispose of surplus U.S. plutonium and support in the 
U.S. role in international nonproliferation efforts.
    The Naval Reactors Program includes development work 
necessary to ensure nuclear propulsion technology provides 
options for maintaining and upgrading current capabilities, as 
well as meeting future threats to U.S. security.
    A majority of funding supports the top priority of ensuring 
the safety and reliability of the 103 operating naval nuclear 
propulsion plants. This work involves continual testing, 
analysis, and monitoring of plant and core performance, which 
becomes more important as the reactor plants age.
    The nature of this business demands a careful and measured 
approach to developing and verifying nuclear technology. 
Designing needed component systems and processes and 
implementing them in existing and future plant designs.
    Long-term program goals have been to increase core energy, 
to achieve life-of-the-ship cores and to eliminate the need to 
refuel nuclear powered ships. Efforts associated with this 
objective have resulted in plant core lives that are sufficient 
for a 30-plus year submarine and an extended core life planned 
for the next generation aircraft carrier.
    In summary, there is an effective synergy between the 
NNSA's weapons activities and nonproliferation activities. For 
example, we have dismantled more than 13,000 weapons since 
1988. Plans are operationally deployed, United States, Russian, 
and strategic nuclear warheads will not exceed 1,700 to 2,200 
by December 2012. In 2003, the Department of Energy completed 
dismantlement of most nonstrategic nuclear warhead, nuclear 
weapons, limiting our stockpile of these systems to less than 
one-tenth of cold war levels.
    In 2004, President Bush approved a plan that will cut the 
U.S. stockpile by almost one-half from the 2001 level. And, by 
the end of 2012, the Department's efforts will have reduced the 
stockpile to its smallest level in several decades. In addition 
to weapons dismantlement, the Department is making tremendous 
progress to reduce and eliminate fissile material made surplus 
to defense requirements.

                           PREPARED STATEMENT

    I'm confident the NNSA is heading in the right direction in 
the coming fiscal year. This concludes my statement and I look 
forward to your questions.
    Thank you, Mr. Chairman.
    [The statement follows:]

            Prepared Statement of Hon. Thomas P. D'Agostino

    Thank you for the opportunity to discuss the President's fiscal 
year 2008 budget request for the National Nuclear Security 
Administration (NNSA). This is my first appearance before this 
committee as the Acting Under Secretary for Nuclear Security and NNSA 
Administrator, and I want to thank all of the members for their strong 
support for our vital national security missions.
    In the 7th year of this administration, with the strong support of 
Congress, NNSA has achieved a level of stability that is required for 
accomplishing our long-term missions. Our fundamental national security 
responsibilities for the United States include:
  --assuring the safety, security and reliability of the U.S. nuclear 
        weapons stockpile while at the same time transforming the 
        stockpile and the infrastructure that supports it;
  --reducing the threat posed by nuclear proliferation; and
  --providing reliable and safe nuclear reactor propulsion systems for 
        the U.S. Navy.
    The fiscal year 2008 budget request for $9.4 billion, an increase 
of $306 million from the fiscal year 2007 operating plan, supports the 
crucial missions to ensure the Nation's nuclear security.

                           WEAPONS ACTIVITIES

    Stockpile Stewardship is working--the nuclear weapons stockpile 
remains safe, secure and reliable. Throughout the past decade, the 
Stockpile Stewardship Program (SSP) has proven its ability to 
successfully sustain the safety, security and reliability of the 
nuclear arsenal without resorting to underground nuclear testing. The 
SSP also enables the United States to provide a credible strategic 
deterrent capability with a stockpile that is significantly smaller. To 
assure our ability to maintain essential military capabilities over the 
long-term, however, and to enable significant reductions in reserve 
warheads, we must make progress towards a truly responsive nuclear 
weapons infrastructure as called for in the Nuclear Posture Review 
(NPR). The NPR called for a transition from a threat-based nuclear 
deterrent, with large numbers of deployed and reserve weapons, to a 
deterrent that is based on capabilities, with a smaller nuclear weapons 
stockpile and greater reliance on the capability and responsiveness of 
the Department of Defense (DOD) and NNSA infrastructure to adapt to 
emerging threats.
    To meet these objectives, we developed a transformation vision and 
strategy, the cornerstones of which are Complex 2030 and the Reliable 
Replacement Warhead (RRW). We are boldly moving forward to implement 
this strategy now, bringing us closer to achieving an even smaller 
stockpile, one that is safer and more secure, one that offers a reduced 
likelihood that we will ever again need to conduct an underground 
nuclear test, and ultimately, one that enables a much more responsive 
nuclear weapons infrastructure.
    Over the next several years, our performance will not only be 
measured by the success of our continuing efforts to maintain the 
nuclear stockpile, but also, by the success of our efforts to plan and 
achieve a truly responsive nuclear weapons infrastructure for the long-
term strategic needs of the Nation. What do we mean by ``responsive 
nuclear weapons infrastructure?'' By ``responsive'' we refer to the 
resilience of the nuclear enterprise to unanticipated events or 
emerging threats, and the ability to anticipate innovations by an 
adversary and to counter them before our deterrent is degraded. 
Unanticipated events could include complete failure of a deployed 
warhead type or the need to respond to new and emerging geopolitical 
threats.
    The elements of a responsive infrastructure include the people, the 
science and technology base, the facilities and equipment to support a 
right-sized nuclear weapons enterprise as well as practical and 
streamlined business practices that will enable us to respond rapidly 
and flexibly to emerging needs. More specifically, a responsive 
infrastructure must provide proven and demonstrable capabilities, on 
appropriate timescales, and in support of national security 
requirements.
    We are focused on four implementing strategies to achieve our 
transformational objectives: (1) transform to a modernized, more cost-
effective safe and secure complex; (2) transform the nuclear stockpile 
in partnership with the DOD; (3) create a fully integrated and 
interdependent complex; and, (4) drive the science and technology base 
essential for long-term national security.
    We are taking many concrete steps today to make this transformation 
vision a reality. The completion of a Supplemental Programmatic 
Environmental Impact Statement (PEIS) for Complex 2030 in accordance 
with the National Environmental Policy Act (NEPA) will mark the most 
significant of these steps. Although the original notice of intent for 
the PEIS did not include a Consolidated Nuclear Production Center 
(CNPC), we have determined that it is important to include this concept 
as an alternative to be evaluated in the draft PEIS. The scoping period 
concluded in January 2007, and a Record of Decision for the future 
configuration of the Complex is anticipated in 2008. While we await the 
results of the NEPA process, many actions to transform the stockpile, 
transform the operation of the Complex, and drive the science and 
technology base are already well underway. Specifically, we are:
  --Reducing the number of sites with Category I/II special nuclear 
        material (SNM) and consolidating such material within the 
        remaining sites. This process has begun with the initial 
        shipment in 2006 of plutonium from Lawrence Livermore National 
        Laboratory (LLNL) and the removal of Category I/II material 
        from Los Alamos National Laboratory (LANL) Technical Area 18. 
        Within the next 5 years, we expect to eliminate the need for 
        Category I/II SNM security at Sandia National Laboratory (SNL).
  --Dramatically accelerating the dismantlement of retired weapons. The 
        Pantex Throughput Improvement Program has resulted in a 
        significant improvement in throughput and we expect our 
        dismantlement rate for fiscal year 2007 to exceed that of 
        fiscal year 2006 by nearly 50 percent. Additional activities 
        are also underway to increase the rate at which weapons can be 
        dismantled and dispositioned at Y-12.
  --Reconstituting the Nation's nuclear weapon production capability by 
        implementing our plans to ramp up to 30-50 pits per year at 
        LANL by 2012.
  --Reviving our ability to extract tritium for use in the stockpile at 
        the new Tritium Extraction Facility at the Savannah River Site 
        (SRS).
  --Developing a weapons program Science and Technology roadmap to 
        define the full set of capabilities needed to sustain the 
        future stockpile.
  --Streamlining and improving business practices by adding multi-site 
        incentives to current contracts, enhancing line management 
        structures to strengthen accountability, consolidating facility 
        organizations and establishing a systems integration structure.
    To foster confidence in the transformation process and to ensure 
that the Complex remains focused on meeting our current commitments, we 
established a ``Getting the Job Done'' list for the nuclear weapons 
complex in April 2006. By January 2007, the following commitments were 
complete: (1) delivering B61-7 and B61-11 Alt 357 Life Extension 
Program (LEP) first production units; (2) delivering the full 
capability of the Advanced Simulation and Computing Purple Machine; (3) 
updating pit lifetime estimates; (4) supporting the Nuclear Weapons 
Council (NWC) decision in November 2006 to proceed with the RRW 
strategy; and (5) extracting tritium for use in the stockpile at the 
new Tritium Extraction Facility.
    The weapons complex is also on track to fulfill the remaining 
fiscal year 2007 commitments of: (1) continuing to deliver our products 
(e.g., limited life components) to DOD; (2) eliminating the backlog of 
surveillance units consistent with an enhanced evaluation strategy 
(except the W84 and W88); (3) accelerating the dismantlement of retired 
weapons in fiscal year 2007 by 50 percent; (4) delivering the W76-1 LEP 
first production unit; and (5) certifying the W88 with a new pit and 
manufacturing 10 W88 pits in fiscal year 2007. Delivery on these and 
future near-term commitments during transformation of the weapons 
complex is essential to the continued safety, security and reliability 
of the stockpile.
    Another area where we are making tremendous progress to transform 
the Complex is in our efforts to secure nuclear weapons, weapons-usable 
materials, information, and infrastructure from theft, compromise or 
harm. We established and staffed within the Office of Defense Nuclear 
Security, a Program Evaluation Office to ensure the effectiveness of 
both our implemented security programs and security line management 
oversight. Additionally, we have met the requirements of the 2003 
Design Basis Threat and are firmly on track to meet the requirements of 
the 2005 DBT at all sites by fiscal year 2011. We are also rapidly 
improving our cyber security standards and practices. As the committee 
is aware, we recently experienced a major cyber security incident at 
LANL. While this incident has highlighted some additional areas for 
improvement, NNSA has been vigorously implementing measures over the 
last 2 years to strengthen the cyber security posture across the 
Complex. We are strongly committed to and are actively addressing the 
issues identified by the LANL incident and applying the lessons learned 
complex-wide. Sustaining and improving the security of the nuclear 
weapons complex is an integral component of NNSA's core mission, and 
thus represents one of our highest priorities.
    As we continue to draw down the stockpile, we have become concerned 
that our current path--successive refurbishments of existing warheads 
developed during the cold war and to stringent cold war 
specifications--may pose an unacceptable risk to maintaining high 
confidence in system performance over the long-term. Specifically, the 
directors of our nuclear weapons laboratories have raised concerns 
about their ability to assure the reliability of the legacy stockpile 
over the very long-term absent nuclear testing. Our DOD partners share 
these concerns. The evolution away from tested designs through a LEP 
approach, resulting from inevitable accumulations of small changes over 
the extended lifetimes of these highly optimized systems, is what gives 
rise to these concerns.
    Our decision to embark on the path to an RRW does not result from a 
failure of the stockpile stewardship program, as some have suggested, 
but is a reflection of its success. The SSP has revealed the need to 
pursue this new RRW path. Moreover, aggressive pursuit of the new 
scientific tools currently in use and being developed under the SSP is 
essential, not only to sustain existing warheads as long as they are 
needed, but to our efforts to design, develop and produce replacement 
warheads that are safer, more reliable, and cost-effective over the 
long term without nuclear testing.
    We are pursuing the RRW strategy to ensure the long-term 
sustainment of the military capabilities provided by warheads in the 
existing stockpile, not to develop warheads for new or different 
military missions. Another major driver for the RRW approach was the 
realization after 9/11 that the security threat to our nuclear 
stockpile had fundamentally changed. The security features in today's 
stockpile are commensurate with technologies that were available during 
the cold war and with the threats facing the United States at that 
time. Major enhancements in security are not readily available through 
system retrofits via the LEP approach.
    We believe that features of the RRW concept will serve as the key 
``enabler'' for achieving a smaller, more efficient and responsive 
infrastructure and opportunities for a smaller stockpile. The RRW will 
relax cold war design constraints that maximized yield to weight ratios 
and thereby allows us to design replacement components that are easier 
to manufacture, are safer and more secure, eliminate environmentally 
dangerous materials, and increase design margins, thus ensuring long-
term confidence in reliability. Moving forward with the RRW program 
will further allow us to take advantage of the scientists and engineers 
who are retiring soon and who possess the unique skills and experience 
of designing, developing, and producing nuclear weapons.
    Moreover, the benefits of the RRW approach reinforce our 
nonproliferation commitments and objectives. Because these warheads 
would be designed with more favorable performance margins, and be less 
sensitive to incremental aging effects, they would reduce the 
possibility that the United States would ever be faced with a need to 
conduct a nuclear test to diagnose or remedy a stockpile reliability 
problem. This will bolster efforts to dissuade other countries from 
testing. Moreover, once a transformed production complex demonstrates 
that it can produce replacement warheads on a timescale in which 
geopolitical threats could emerge, or respond in a timely way to 
technical problems in the stockpile, then we can eliminate many spare 
warheads, reducing further the nuclear stockpile. The RRW strategy will 
allow us to increase our warhead dismantlement rate, sending a strong 
message to the world that we are taking meaningful steps towards 
further stockpile reductions. Additionally, increased confidence in the 
U.S. nuclear deterrent will assure allies and obviate any need for them 
to develop and field their own nuclear forces. Finally, the improved 
security features of RRW will prevent unauthorized use should a warhead 
ever fall into the hands of terrorists.
    On November 30, 2006, the NWC established the feasibility of the 
RRW program as a long-term strategy for maintaining a safe, secure and 
credible nuclear deterrent. On March 2, 2007, the Nuclear Weapons 
Council (NWC) approved a design for a joint NNSA and U.S. Navy program 
to provide a replacement warhead for a portion of the Nation's sea-
based nuclear weapons. We have begun the process for the RRW design 
definition and cost study, the results of which will inform the 
decisionmaking process within the administration and Congress as to 
whether to proceed to the next phase, engineering development.

                        NUCLEAR NONPROLIFERATION

    Acquisition of nuclear weapons, weapons of mass destruction (WMD) 
capabilities, technologies, and expertise by rogue states or terrorists 
stands as one of the most potent threats to the United States and 
international security. The continued pursuit of nuclear weapons by 
terrorists and states of concern underscores the urgency of NNSA's 
efforts to secure vulnerable nuclear weapons and weapons-usable nuclear 
materials, to improve capabilities to detect and interdict nuclear 
weapons or materials, to halt the production of fissile material, and 
ultimately, to dispose of surplus weapons-usable materials. The fiscal 
year 2008 budget request will enable NNSA to continue the activities 
that support these crucial threat reduction initiatives.
    Preventing access to nuclear weapons and material has many 
dimensions. Our number one highest priority is to keep these dangerous 
materials out of the hands of the world's most dangerous actors. Absent 
access to sufficient quantities of key fissile materials, there can be 
no nuclear weapon. Much of our emphasis has focused on Russia because 
that is where most of the poorly secured material was located. We have 
made remarkable progress cooperating with Russia to strengthen 
protection, control, and accounting of its nuclear weapons and 
materials. Meeting our commitment under the Bratislava Joint Statement 
to conclude security upgrade activities at Russian nuclear sites by the 
end of 2008 will be our chief priority in fiscal year 2008. As a result 
of our efforts to accelerate this work in the wake of 9/11 and the 
momentum created by the Bratislava process, we are well-positioned to 
reach this significant milestone on schedule. Although our direct 
upgrade efforts are drawing to a close after over a decade of work, we 
will continue to work cooperatively with Russia to ensure the long-term 
sustainability of the systems and procedures we have implemented.
    Not all nuclear material of concern is located in Russia. We are 
working with other partners to secure weapons-usable nuclear materials 
worldwide and to strengthen security at civil nuclear facilities. One 
area of concern is research reactors, which often use a highly enriched 
uranium (HEU) fuel suitable for bombs. Our Global Threat Reduction 
Initiative (GTRI) seeks to convert research reactors worldwide from HEU 
to low enriched uranium (LEU) fuel and further to repatriate U.S. and 
Russian-supplied HEU from these facilities to its country of origin. A 
major accomplishment was the return of 268 kilograms of Soviet-origin 
HEU from Germany to Russia, where it will be down blended to LEU fuel. 
This repatriation operation represents the largest shipment of Soviet-
origin HEU conducted to date under the GTRI.
    We are taking aggressive steps to interdict weapons-usable nuclear 
materials and to prevent dissemination of nuclear related technology 
via strengthened export controls and improved international 
cooperation. As a complement to improving physical security, the Second 
Line of Defense Program works to enhance our foreign partners' ability 
to interdict illicit trafficking in nuclear materials. Under this 
program, we deploy radiation detection systems at high-risk land-border 
crossings, airports and seaports, increasing the likelihood of 
interdiction of diverted nuclear materials entering or leaving the 
country.
    The Megaports Initiative, established in 2003, responds to concerns 
that terrorists could use the global maritime shipping network to 
smuggle fissile materials or warheads. By installing radiation 
detection systems at major ports throughout the world, this initiative 
strengthens the detection and interdiction capabilities of our partner 
countries.
    To prevent the diffusion of critical technologies, we are training 
front line customs officers around the world. We are working to 
implement U.N. Security Council Resolution 1540, which establishes a 
requirement to criminalize proliferation involving non-state actors and 
encourages states to strengthen export control laws and improve 
enforcement. Because keeping terrorists from acquiring materials will 
be easier if we limit enrichment of uranium or reprocessing of spent 
fuel, the President proposed in 2004 a new initiative, the Global 
Nuclear Energy Partnership (GNEP), which would provide nations which 
refrain from developing or deploying enrichment and reprocessing 
technology assured access to the benefits of nuclear power.
    These are critical steps but they alone cannot address the problem. 
Indeed, there is enough fissile material in the world today for tens of 
thousands of weapons. An integral part of our strategy, therefore, has 
been to induce other states to stop producing materials for nuclear 
weapons, as the United States did many years ago. We recently tabled a 
draft treaty at the Conference on Disarmament in Geneva to do just 
that. We also supplement international diplomatic efforts with 
bilateral programs. For example, Russia still produces weapons-grade 
plutonium, not because it needs it for weapons, but because the 
reactors that produce it also supply heat and light to local 
communities. We are replacing these reactors with fossil fuel plants. 
By 2008, two of the existing three plutonium-producing reactors in 
Russia will shut down permanently, with the third shut down by 2010.
    As previously indicated, there are a number of effective synergies 
between NNSA's weapons activities and our nuclear nonproliferation 
objectives. For example, we are disposing of the substantial quantities 
of surplus weapons grade material that resulted from the thousands of 
warheads that we have dismantled by down-blending it to lower 
enrichment levels suitable for use in commercial reactors. We are also 
working with Russia to eliminate Russian HEU. Under the HEU Purchase 
Agreement, nearly 300 metric tons of uranium from Russia's dismantled 
nuclear weapons--enough material for more than 11,000 nuclear weapons--
has been down-blended for use in commercial reactors in the United 
States. Nuclear power generates 20 percent of American electricity and 
half of that is generated by fuel derived from Russian HEU. As a 
result, one-tenth of the U.S. electrical energy need is powered by 
material removed from former Soviet nuclear weapons. In addition to the 
efforts on HEU, the United States and Russia have each committed to 
dispose of 34 metric tons of surplus weapon-grade plutonium.
    If we are to encourage responsible international actions, the 
United States must set the example. We have dramatically improved 
physical security of U.S. nuclear weapons and weapons usable materials 
in the years since the attacks of 9/11. We recently withdrew over 200 
metric tons of HEU from any further use as fissile material in nuclear 
weapons, a portion of which will be devoted to powering our nuclear 
navy for the next 50 years, obviating the need over that period for 
high-enrichment of uranium for any military purpose. Seventeen tons 
will be blended down and set aside as an assured fuel supply as part of 
global efforts to limit the spread of enrichment and reprocessing 
technology.
    The risk of nuclear terrorism is not limited to the United States 
and the success of our efforts to deny access to nuclear weapons and 
material is very much dependent on whether our foreign partners share a 
common recognition of the threat and a willingness to combat it. Last 
July, just before the G-8 summit, Presidents Bush and Putin announced 
the Global Initiative to Combat Nuclear Terrorism to strengthen 
cooperation worldwide on nuclear materials security and to prevent 
terrorist acts involving nuclear or radioactive substances. Paired with 
U.N. Security Council Resolution 1540, we now have both the legal 
mandate and the practical means necessary for concrete actions to 
secure nuclear material against the threat of diversion.

                             NAVAL REACTORS

    Also contributing to the Department's national security mission is 
the Naval Reactors Program, whose mission is to provide the U.S. Navy 
with safe, militarily effective nuclear propulsion plants and ensure 
their continued safe, reliable and long-lived operation. Nuclear 
propulsion enhances our warship capabilities by providing the ability 
to sprint where needed and arrive on station, ready to conduct 
sustained combat operations when America's interests are threatened. 
Nuclear propulsion plays a vital role in ensuring the Navy's forward 
presence and its ability to project power anywhere in the world.
    The Naval Reactors Program has a broad mandate, maintaining 
responsibility for nuclear propulsion from cradle to grave. Over 40 
percent of the Navy's major combatants are nuclear-powered, including 
aircraft carriers, attack submarines, and strategic submarines, which 
provide the Nation's most survivable deterrent.

               FISCAL YEAR 2008 BUDGET REQUEST BY PROGRAM

    The President's fiscal year 2008 budget request for NNSA totals 
$9.4 billion, an increase of $306 million or 3.4 percent over the 
fiscal year 2007 operating plan. We are managing our program activities 
within a disciplined 5-year budget and planning envelope, and are 
successfully balancing the administration's high priority initiatives 
to reduce global nuclear danger as well as future planning for the 
Nation's nuclear weapons complex within an overall modest growth rate.
    The NNSA budget justification contains information for 5 years as 
required by sec. 3253 of Public Law 106-065. This section, entitled 
Future Years Nuclear Security Program, requires the Administrator to 
submit to Congress each year the estimated expenditures necessary to 
support the programs, projects and activities of the NNSA for a 5-year 
fiscal period, in a level of detail comparable to that contained in the 
budget.
    The fiscal year 2008-2012 Future Years Nuclear Security Program--
FYNSP--projects $50 billion for NNSA programs though 2012. This is an 
increase of about $1.5 billion over last year's projections in line 
with the administration's strong commitment to the Nation's defense and 
homeland security. The fiscal year 2008 request is slightly smaller 
than last year's projection; however, the outyears are increased 
starting in 2009. Within these amounts, there is significant growth 
projected for the Defense Nuclear Nonproliferation programs to support 
homeland security, including new initiatives and acceleration of threat 
reduction programs and increased inspection of seagoing cargoes 
destined for ports in the United States.

                       WEAPONS PROGRAM ACTIVITIES

    The fiscal year 2008 budget request for the programs funded within 
the Weapons Activities Appropriation is $6.51 billion, an approximately 
3.8 percent increase over the fiscal year 2007 operating plan. It is 
allocated to adequately provide for the safety, security, and 
reliability of the nuclear weapons stockpile and supporting facilities 
and capabilities.
    This request supports the requirements of the SSP consistent with 
the administration's NPR and subsequent amendments, and the revised 
stockpile plan submitted to the Congress in June 2004. Our request 
places a high priority on accomplishing the near-term workload and 
supporting technologies for the stockpile along with the long-term 
science and technology investments to ensure the design and production 
capability and capacity to support ongoing missions. This request also 
supports the facilities and infrastructure that must be modernized to 
be responsive to new or emerging threats.
    The Department has made significant strides over the past year to 
transform the nuclear weapons complex. The ``Complex 2030'' planning 
scenario was introduced in 2006 and has already resulted in a number of 
accomplishments. We have not created a separate budget line for our 
transformational activities in the fiscal year 2008 President's 
Request. Implementation actions to bring about transformation are 
incorporated into existing program elements: Directed Stockpile Work 
(DSW), Campaigns, Readiness in Technical Base and Facilities (RTBF), 
and Secure Transportation Asset. The approach to transformation relies 
extensively on existing line program organizations taking 
responsibility for individual actions required to change both the 
stockpile and its supporting infrastructure. While the administration 
continues to assess the plans and funding projections for certain 
elements of NNSA's complex transformation strategy, this budget 
contains resources to support a number of transformational initiatives 
underway within our base program activities.
    In fiscal year 2008, we are requesting $1.45 billion for DSW, an 
increase of $21.5 million over the fiscal year 2007 operating plan. We 
will continue an aggressive dismantlement plan for retired warheads and 
consolidation of special nuclear material across the nuclear weapons 
complex. Both of these efforts will contribute to increasing the 
overall security at NNSA sites. In fiscal year 2007, funding was 
increased to cover upfront costs associated with tooling procurement, 
procedure development, Safety Authorization Basis work, hiring of 
production technicians, and equipment purchases, which will support 
future-year dismantlement rates. The fiscal year 2008 request reflects 
the required funding to support the planned dismantlement rates 
reported to Congress. Funding at higher levels was unnecessary once the 
dismantlement process was improved with fiscal year 2005 and fiscal 
year 2006 funding. In May 2006, the NWC directed that the W80 LEP be 
deferred to support NNSA efforts to transform the nuclear weapons 
complex and continue work on a RRW. At the same time, the B61 and W76 
LEP workloads are increasing, since they both will have entered the 
production phase by fiscal year 2008. DSW also supports routine 
maintenance and repair of the stockpile and supports managing the 
strategy, driving the change, and performing the crosscutting 
initiatives required to achieve responsiveness objectives envisioned in 
the NPR. Our focus remains on the stockpile, to ensure that the nuclear 
warheads and bombs in the U.S. nuclear weapons stockpile are safe, 
secure, and reliable.
    Progress in other elements of the SSP continues. The fiscal year 
2008 request for the six Campaigns is $1.87 billion, a $113 million 
decrease from the fiscal year 2007 operating plan. The decrease in 
program funding is required to balance overall weapon activity 
priorities, specifically the transition of the W76 LEP from R&D to 
production, the consolidation of computing facilities, and a large 
decrease in Readiness Campaign activities associated in part to the 
transition of Tritium Extraction Facility to full operations. The 
Campaigns focus on scientific and technical efforts and capabilities 
essential for assessment, certification, maintenance, and life 
extension of the stockpile and have allowed NNSA to continue ``science-
based'' stockpile stewardship. These Campaigns are evidence of NNSA's 
excellence and innovation in science, engineering and computing that, 
though focused on the nuclear weapons mission, have broader application 
and value. The use of DOE Office of Science facilities in supporting 
Stockpile Stewardship science and engineering will increase modestly at 
the same time that access to NNSA's science facilities is extended to a 
broader community of users.
    Specifically, $425.8 million for the Science and Engineering 
Campaigns provides the basic scientific understanding and the 
technologies required to support DSW and the completion of new 
scientific and experimental facilities in the absence of nuclear 
testing.
    The Readiness Campaign, with a request of $161.2 million, develops 
and delivers design-to-manufacture capabilities to meet the evolving 
and urgent needs of the stockpile and supports the transformation of 
the nuclear weapons complex into an agile and more responsive 
enterprise. In February 2007, startup of the Tritium Extraction 
Facility at the Savannah River Site was completed, making possible the 
use of new tritium in the U.S. stockpile for the first time in 18 
years.
    The Advanced Simulation and Computing (ASC) Campaign is a key 
example of NNSA excellence and innovation in science and engineering, 
establishing world leadership in computational simulation sciences with 
broad application to national security. The request of $585.7 million 
for the ASC Campaign supports the development of computational tools 
and technologies necessary to support the continued assessment and 
certification of the refurbished weapons, aging weapons components, and 
the RRW program without underground nuclear testing. As we enhance and 
validate the predictive science capabilities embodied in these tools, 
using the historical test base of more than 1,000 cold war era nuclear 
tests to computer simulations, we can continue to assess the stockpile 
to ensure that it is safe, secure, and reliable.
    The $412.3 million request for the Inertial Confinement Fusion 
Ignition and High Yield Campaign is focused on the execution of the 
first ignition experiment at the National Ignition Facility (NIF) in 
2010, and provides facilities and capabilities for high-energy-density 
physics experiments in support of the SSP. To achieve the ignition 
milestone, $147 million will support construction of NIF and the NIF 
Demonstration Program and $232.2 million will support the National 
Ignition Campaign. The ability of NIF to assess the thermonuclear burn 
regime in nuclear weapons via ignition experiments is of particular 
importance. NIF will be the only facility capable of probing in the 
laboratory the extreme conditions of density and temperature found in 
exploding nuclear weapons.
    NIF will join the Z pulsed-power machine at Sandia National 
Laboratories and the Omega Laser at University of the Rochester's 
Laboratory for Laser Energetics as world leading facilities in 
providing quantitative measurements that close important gaps in 
understanding nuclear weapons performance. NIF, Omega, and Z are 
complementary in their capabilities, allowing scientists from both 
inside and outside the nuclear weapons complex to contribute to a 
better understanding of the high energy density physics of nuclear 
warheads. NIF will provide the only access in the world to 
thermonuclear ignition conditions and the Omega laser with its 
symmetric illumination and very high repetition rate provides a large 
amount of quantitative information. The Z facility is especially suited 
for accurate measurement of materials properties that are crucial to 
weapons performance. These facilities will be operated as national user 
facilities in order to obtain the best return on investment and maximum 
contribution to the Stockpile Stewardship mission.
    The Pit Manufacturing and Certification Campaign request of $281 
million builds on the success of manufacturing and certifying a new W88 
pit in 2007 and addresses issues associated with manufacturing future 
pit types including the RRW and increasing pit production capacity at 
LANL. There are plans to increase pit production capacity at LANL to 
meet national security needs. LANL is not only an interim capability 
for pit manufacturing at the present time, but it serves as the United 
States' sole capability. We continue to be the only nuclear weapon 
state without a true manufacturing capability.

 READINESS IN TECHNICAL BASE AND FACILITIES (RTBF) AND FACILITIES AND 
             INFRASTRUCTURE RECAPITALIZATION PROGRAM (FIRP)

    In fiscal year 2008, we are requesting $1.96 billion for the 
maintenance and operation of existing facilities, remediation and 
disposition of excess facilities, and construction of new facilities. 
Of this amount, $1.66 billion is requested for RTBF, an increase of $49 
million from the fiscal year 2007 operating plan, with $1.36 billion 
reserved for Operations and Maintenance and $307 million for RTBF 
Construction. Some new facility construction (e.g., NIF, MESA, TEF, and 
DARHT) is budgeted in applicable Campaigns.
    This request also includes $293.7 million for the Facilities and 
Infrastructure Recapitalization Program (FIRP), a separate and distinct 
program that is complementary to the ongoing RTBF efforts. The FIRP 
mission is to restore, rebuild and revitalize the physical 
infrastructure of the nuclear weapons complex, in partnership with 
RTBF. This program assures that facilities and infrastructure are 
restored to an appropriate condition to support the mission, and to 
institutionalize responsible and accountable facility management 
practices. In response to NNSA's request, Congress extended the FIRP 
end date from 2011 to 2013 to enable successful completion of the FIRP 
mission. The Integrated Prioritized Project List (IPPL) is the vehicle 
that the FIRP program will rely on to prioritize and fund outyear 
projects to reduce legacy deferred maintenance. These projects 
significantly reduce the deferred maintenance backlog to acceptable 
levels and support the SSP mission and transformation of the complex.
    These activities are critical for the development of a more 
responsive infrastructure and will be guided by decisions resulting 
from the Complex 2030 Supplemental Programmatic Environmental Impact 
Statement and the National Environmental Policy Act (NEPA) process. 
Since a significant fraction of our production capability resides in 
World War II era facilities, infrastructure modernization, 
consolidation, and sizing consistent with future needs is essential for 
an economically sustainable Complex. Facilities designed according to 
modern manufacturing, safety, and security principles will be more 
cost-effective and responsive to a changing future. For example, a 
facility could be designed to support a low baseline capacity and 
preserve the option, with a limited amount of contingent space, to 
augment capacity if authorized and needed to respond to future risks.
    Having a reliable plutonium capability is a major objective of NNSA 
planning. Options for plutonium research, surveillance, and pit 
production are being evaluated as part of the Complex 2030 NEPA process 
with a Record of Decision anticipated in 2008. The baseline Complex 
2030 planning scenario relies on Los Alamos National Laboratory 
facilities at Technical Area 55 to provide interim plutonium 
capabilities until a consolidated, long-term capability can be 
established. This interim strategy relies on the proposed Chemistry and 
Metallurgy Research Replacement-Nuclear Facility (CMRR-NF) to achieve 
all the objectives of (1) closing the existing Chemistry and Metallurgy 
Research (CMR) facility, (2) replacing essential plutonium capabilities 
currently at Lawrence Livermore National Laboratory, and (3) achieving 
a net manufacturing capacity of 50 pits per year. However, the 
increasing cost of the CMRR-NF and the need to ensure that near- and 
long-term planning for plutonium facilities are integrated requires 
that we complete our Complex 2030 decision process before committing to 
construction of the CMRR-NF. Since the CMRR Radiological Laboratory, 
Utility, and Office Building (CMRR-RLUOB) is required under all 
scenarios, this project will proceed as planned.
    The Highly Enriched Uranium Materials Facility (HEUMF) and the 
proposed Uranium Processing Facility (UPF) will allow a reduction of 
the high security area at the Y-12 National Security Complex from 150 
acres to 15 acres. This reduction will combine with the engineered 
security features of the two structures to meet the DBT at 
significantly reduced costs, to lower non-security costs, and to 
provide a responsive highly enriched uranium manufacturing capability. 
UPF planning is consistent with the timing of decisions from the 
Complex 2030 PEIS process.

                      SECURE TRANSPORTATION ASSET

    In fiscal year 2008, the budget request includes $215.6 million for 
Secure Transportation Asset (STA) Program, an increase of $6 million 
from the fiscal year 2007 operating plan, for meeting the Department's 
transportation requirements for nuclear weapons, components, and 
special nuclear materials shipments. The workload requirements for this 
program will escalate significantly in the future to support the 
dismantlement and maintenance schedule for the nuclear weapons 
stockpile and the Secretarial Initiative to consolidate the storage of 
nuclear material. The challenge to increase secure transport capacity 
is coupled with and impacted by increasingly complex national security 
concerns. To support the escalating workload while maintaining the 
safety and security of shipments, STA is increasing the number of 
SafeGuards Transporters (SGT) in operation by 2 per year, with a target 
total of 51 in fiscal year 2014. Due to resource constraints, SGT 
production has been slowed from three to 2 per year, extending the 
original 2011 endpoint target date.

                 ENVIRONMENTAL PROJECTS AND OPERATIONS

    The Environmental Projects and Operations/Long-Term Stewardship 
Program is requested at $17.5 million in fiscal year 2008. This program 
serves to reduce the risks to human health and the environment at NNSA 
sites and adjacent areas by: operating and maintaining environmental 
clean-up systems; performing long-term environmental monitoring 
activities; and, integrating a responsible environmental stewardship 
program with the NNSA mission activities.

                   NUCLEAR WEAPONS INCIDENT RESPONSE

    The Nuclear Weapons Incident Response (NWIR) Program responds to 
and mitigates nuclear and radiological incidents worldwide as the 
United States Government's primary capability for radiological and 
nuclear emergency response. The fiscal year 2008 request for these 
activities is $161.7 million, of which $28 million is reserved for the 
implementation of two new initiatives that will strengthen the Nation's 
emergency response capabilities--the National Technical Nuclear 
Forensics (NTNF) and the Stabilization Implementation programs.
    The National Technical Nuclear Forensics Program will establish a 
DOE capability to support post-detonation activities and enhance DOE 
Technical Nuclear Forensics capabilities. The development of this 
capability will facilitate the thorough analysis and characterization 
of pre- and post-detonation radiological and nuclear materials and 
devices as well as prompt signals from a nuclear detonation. Developing 
forensic capabilities of this nature is crucial to the overall 
objective of nuclear material or device attribution.
    Stabilization is a new concept and a new capability aimed at using 
advanced technologies to enhance the U.S. Government's ability to 
interdict, delay and/or prevent operation of a terrorist's radiological 
or nuclear device until national assets arrive on the scene to conduct 
traditional ``render safe'' procedures. NNSA has actively sponsored new 
research in this area and, additionally, is leveraging emerging 
technologies that have been demonstrated successfully by the DOD in 
support of the global war on terrorism. In the implementation phase, 
NNSA will transfer these matured projects into operational testing, 
potentially followed by their transition into the collection of tools 
available to Federal response teams.

                        SAFEGUARDS AND SECURITY

    The fiscal year 2008 request for Defense Nuclear Security is $744.8 
million, an increase of $121 million above the fiscal year 2007 
operating plan. This increase will accommodate the increased cost of 
sustaining the implementation of the 2003 DBT and the phased 
implementation of the 2005 DBT in 2008 and the outyears. Full 
implementation of the 2005 DBT will occur at: the Pantex Plant in 
fiscal year 2008; Lawrence Livermore National Laboratory in fiscal year 
2008; the Nevada Test Site in fiscal year 2009; the Y-12 National 
Security Complex in fiscal year 2011; and, LANL in fiscal year 2011. 
During fiscal year 2008, the program's efforts will largely be focused 
on eliminating or mitigating identified vulnerabilities across the 
nuclear weapons complex by bolstering protective force training, 
acquiring updated weapons and support equipment, improving physical 
barrier systems and standoff distances, and reducing the number of 
locations with ``targets of interest.'' Physical security systems will 
be upgraded and deployed to enhance detection and assessment, add delay 
and denial capabilities, and to improve perimeter defenses at several 
key sites.
    The fiscal year 2008 request for Cyber Security of $102.2 million 
is focused on sustaining the NNSA infrastructure and upgrading elements 
designed to counter cyber threats and vulnerabilities from external and 
internal attacks. This funding level will support cyber security 
revitalization, identify emerging issues, including research needs 
related to computer security, privacy, and cryptography. Additionally, 
the funding will provide for enhancement, certification, and 
accreditation of unclassified and classified systems to ensure proper 
documentation of risks and justification of associated operations for 
systems at all sites. The funding within this request will also be 
applied to foster greater cyber security awareness among Federal and 
contractor personnel. NNSA will sponsor a wide range of educational 
initiatives to ensure that our workforce possess the ever-expanding 
cyber security skills critical to safeguarding our national security 
information. Funding provided to NNSA sites will be conditioned upon 
their implementation of a risk-based approach to cyber security.

                    DEFENSE NUCLEAR NONPROLIFERATION

    The Defense Nuclear Nonproliferation Program mission is to detect, 
prevent, and reverse the proliferation of weapons of mass destruction 
(WMD). Our nonproliferation programs address the danger that hostile 
nations or terrorist groups may acquire weapons-usable material, dual-
use production or technology, or WMD capabilities. The fiscal year 2008 
request for these programs totals $1.673 billion, a slight decrease 
from the fiscal year 2007 operating level. This reduction is the result 
of NNSA achieving and approaching important milestones in our nuclear 
security work in Russia, including the completion of major security 
upgrades at several sites under the Material Protection, Control, and 
Accounting (MPC&A) Program and the anticipated end of construction of a 
fossil fuel plant in Seversk by the end of calendar year 2008 under the 
Elimination of Weapons Grade Plutonium Production (EWGPP) Program.

                   GLOBAL THREAT REDUCTION INITIATIVE

    The administration's fiscal year 2008 request of $119 million for 
the Global Threat Reduction Initiative (GTRI) is an increase of $4 
million over the fiscal year 2007 operating plan. The GTRI reduces the 
risk of terrorists acquiring nuclear and radiological materials for an 
improvised nuclear or radiological dispersal device by working at 
civilian sites worldwide to: (1) convert reactors from the use of WMD-
usable HEU to LEU; (2) remove or dispose of excess WMD-usable nuclear 
and radiological materials; and (3) protect at-risk WMD-usable nuclear 
and radiological materials from theft and sabotage until a more 
permanent threat reduction solution can be implemented. Specific 
increases in the GTRI budget reflect, for example, the serial 
production and delivery of 27 100-ton casks for transportation and 
long-term storage of 10,000 kg of HEU and 3,000 kg of plutonium removed 
from the BN-350 reactor site in Kazakhstan.

           INTERNATIONAL MATERIAL PROTECTION AND COOPERATION

    NNSA's International Material Protection and Cooperation fiscal 
year 2008 budget request of $372 million is a decrease of $101 million 
from the fiscal year 2007 operating plan. This decrease reflects the 
successful completion of nuclear security upgrade work at Russian 
Strategic Rocket Forces and Russian Navy sites. International material 
protection work continues in other areas, including the continuation of 
security upgrades at a significant number of sites within the Russian 
nuclear complex, including those operated by the Federal Atomic Energy 
Agency (Rosatom), and the 12th Main Directorate of the Ministry of 
Defense. Security upgrades for Russian Rosatom facilities will be 
completed by the end of 2008--2 years ahead of the original schedule, 
consistent with the Bratislava Initiative.
    The MPC&A Program is also focused on reducing proliferation risks 
by converting Russian HEU to LEU and by consolidating weapons-usable 
nuclear material into fewer, more secure locations. In fiscal year 
2008, we will eliminate an additional 1.2 metric tons of HEU for a 
cumulative total of 10.7 metric tons.
    Our Second Line of Defense (SLD) Program, a natural complement to 
our efforts to lock down vulnerable nuclear material and weapons, 
installs radiation detection equipment at key transit and border 
crossings, airports and major ports to deter, detect and interdict 
illicit trafficking in nuclear and radioactive materials. During fiscal 
year 2008, the SLD Program plans to install detection equipment at an 
additional 51 strategic overseas transit and border sites. Under the 
Megaports Initiative, we have deployed radiation detection and cargo 
scanning equipment at six ports to date in Greece, the Netherlands, 
Bahamas, Sri Lanka, Singapore and Spain. During fiscal year 2008, we 
plan to install detection equipment at three additional large ports: 
the port of Antwerp in Belgium, the port of Caucedo in the Dominican 
Republic, and the port of Salalah in Oman.
    Additionally, we are joining elements of the Megaports Initiative 
and the Container Security Initiative (CSI) under a new maritime 
security initiative, the Secure Freight Initiative (SFI) Phase I. This 
new initiative is a partnership between host governments, commercial 
container shipping entities and the U.S. Government that serves to 
increase the number of containers physically scanned for nuclear and 
radiological materials and to create a detailed record of each U.S.-
bound container. Data from radiation detection equipment provided by 
NNSA and from non-intrusive imaging equipment provided by the 
Department of Homeland Security (DHS) will enhance the identification 
of high-risk containers and facilitate the prompt resolution of 
potential nuclear or radiological threats.

              NONPROLIFERATION AND INTERNATIONAL SECURITY

    While the thrust of GTRI and MPC&A is to secure nuclear sites, 
convert reactors, and repatriate fuel from reactors worldwide, NNSA's 
Office of Nonproliferation and International Security (ONIS) provides 
technical and policy expertise in support of U.S. efforts to strengthen 
international nonproliferation arrangements (e.g., the Nuclear 
Suppliers Group, United Nations Security Council Resolution 1540 and 
the Global Initiative to Combat Nuclear Terrorism). The ONIS staff also 
fosters implementation of global nonproliferation requirements through 
engagement with foreign partners and the redirection of WMD expertise, 
and helps develop and implement mechanisms for transparent and 
verifiable nuclear reductions. The fiscal year 2008 budget request for 
the Office of Nonproliferation and International Security is $124 
million. This request includes funds for providing technical support to 
strengthen the International Atomic Energy Agency safeguards system and 
supports programs to improve foreign governments' export control 
systems. This request will augment U.S. nonproliferation cooperation 
with China and India, and enhance transparency and scientist 
redirection activities with Russia, Ukraine, Kazakhstan, Libya and 
Iraq.
    The budget request also supports activities to build up the 
nonproliferation component of the Global Nuclear Energy Partnership 
(GNEP) initiative. While GNEP is a long-term vision for the future of 
expanded use of nuclear power, NNSA plays an important role by 
providing leadership and technical expertise in the areas of safeguards 
technology, safeguards cooperation, and fuel supply arrangements to 
mitigate the proliferation risks that otherwise might accompany the 
expansion of nuclear power around the world envisioned by GNEP.

           ELIMINATION OF WEAPONS GRADE PLUTONIUM PRODUCTION

    Turning to programs that focus on halting the production of nuclear 
materials, the Elimination of Weapons Grade Plutonium Production 
(EWGPP) Program staff are working toward completing the permanent 
shutdown of two of the three remaining weapons-grade plutonium 
production reactors in Seversk and Zheleznogorsk, Russia. The fiscal 
year 2008 budget request of $182 million is a decrease of $44 million 
from the fiscal year 2007 operating plan, reflecting the planned 
completion of the fossil fuel heat and electricity facility at Seversk. 
The budget request provides the funding required to shut down these 
reactors permanently and to replace the heat and electricity these 
reactors supply to local communities with energy generated by fossil 
fuel plants by December 2008 in Seversk and by December 2010 in 
Zheleznogorsk. The reactors will be shut down immediately once the 
fossil-fuel plants are completed, eliminating the annual production of 
more than one metric ton of weapons-grade plutonium.

                     FISSILE MATERIALS DISPOSITION

    In addition to curbing the production of dangerous nuclear 
materials, NNSA is working to reduce the existing stockpiles of nuclear 
materials in both Russia and the United States. To that end, the fiscal 
year 2008 Fissile Materials Disposition budget request of $609 million 
will contribute to the elimination of surplus U.S. and Russian weapon-
grade plutonium and surplus U.S. highly-enriched uranium. Of this 
amount, $522.5 million will be allocated toward disposing of surplus 
U.S. plutonium, including $333.8 million for the Mixed Oxide (MOX) Fuel 
Fabrication Facility and $60 million for the Pit Disassembly and 
Conversion Facility (PDCF) and the Waste Solidification Building. Of 
the remaining amount, $66.8 million will be devoted to the disposition 
of surplus U.S. HEU and $20.2 million will be focused on supporting 
activities common to both programs.
    This budget request also provides funding for ongoing efforts to 
dispose of surplus U.S. HEU, including down blending 17.4MT of HEU in 
support of establishing the Reliable Fuel Supply Program, available to 
countries with good nonproliferation credentials that face a disruption 
in supply that cannot be corrected through normal commercial means. 
This initiative marks the first step towards a key GNEP policy aim of 
creating a reliable nuclear fuel mechanism, providing countries a 
strong incentive to refrain from acquiring enrichment and reprocessing 
capabilities.

       NONPROLIFERATION AND VERIFICATION RESEARCH AND DEVELOPMENT

    The fiscal year 2008 budget requests $265 million for 
Nonproliferation and Verification Research and Development. This effort 
includes a number of programs that make unique contributions to 
national security by researching the technological advancements 
necessary to detect and prevent the illicit diversion of nuclear 
materials. Within the Proliferation Detection Program, fundamental 
research is conducted in fields such as radiation detection, which 
supports national and homeland security agencies. It also advances 
basic and applied technologies for the nonproliferation community with 
dual-use benefit to national counter-proliferation and counter-
terrorism missions. Specifically, this program develops the tools, 
technologies, techniques, and expertise for the identification, 
location, and analysis of the facilities, materials, and processes of 
undeclared and proliferant WMD programs. As the sole provider for the 
science base to the U.S. national nuclear test monitoring system, the 
Nuclear Explosion Monitoring Program produces the nation's operational 
sensors that monitor from space the entire planet to detect and report 
surface, atmospheric, or space nuclear detonations. This program also 
produces and updates the regional geophysical datasets enabling 
operation of the Nation's ground-based seismic monitoring networks to 
detect and report underground detonations.

                             NAVAL REACTORS

    The Naval Reactors fiscal year 2008 budget request of $808 million 
is an increase of $26 million from the fiscal year 2007 operating plan. 
Naval Reactor's development work ensures that nuclear propulsion 
technology provides options for maintaining and upgrading current 
capabilities, as well as for meeting future threats to U.S. security.
    The majority of funding supports Naval Reactor's number-one 
priority of ensuring the safety and reliability of the 103 operating 
naval nuclear propulsion plants. This work involves continual testing, 
analysis, and monitoring of plant and core performance, which becomes 
more critical as the reactor plants age. The nature of this business 
demands a careful, measured approach to developing and verifying 
nuclear technology, designing needed components, systems, and 
processes, and implementing them in existing and future plant designs. 
Most of this work is accomplished at Naval Reactors' DOE laboratories. 
These laboratories have made significant advancements in extending core 
lifetime, developing robust materials and components, and creating an 
array of predictive capabilities.
    Long-term program goals have been to increase core energy, to 
achieve life-of-the-ship cores, and to eliminate the need to refuel 
nuclear-powered ships. Efforts associated with this objective have 
resulted in planned core lives that are sufficient for the 30-plus year 
submarine (based on past usage rates) and an extended core life planned 
for CVN 21 (the next generation aircraft carrier). The need for nuclear 
propulsion will only increase over time as the uncertainty of fossil 
fuel cost and availability grows.
    Naval Reactors' Operations and Maintenance budget request is 
categorized into six areas: Reactor Technology and Analysis; Plant 
Technology; Materials Development and Verification; Evaluation and 
Servicing; Advanced Test Reactor (ATR) Operations and Test Support; and 
Facility Operations.
    The $218 million requested for Reactor Technology and Analysis will 
support work that ensures the operational safety and reliability of 
reactor plants in U.S. warships and extends the operational life of 
Navy nuclear propulsion plants. This work includes continued 
development of the Reactor System Protection Analysis for the next 
generation aircraft carrier, CVN 21. These efforts also support 
continued work on core design concepts for submarines.
    The increasing average age of our Navy's existing reactor plants, 
along with future extended service lives, a higher pace of operation 
and reduced maintenance periods, place a greater emphasis on our work 
in thermal-hydraulics, structural mechanics, fluid mechanics, and 
vibration analysis. These factors, along with longer-life cores, mean 
that for years to come, these reactors will be operating beyond our 
previously-proven experience base.
    The $115 million requested for Plant Technology provides funding to 
develop, test, and analyze components and systems that transfer, 
convert, control, and measure reactor power in a ship's power plant. 
Naval Reactors is developing components to address known limitations 
and to improve reliability of instrumentation and power distribution 
equipment to replace aging, technologically obsolete equipment. 
Development and application of new analytical methods, predictive 
tests, and design tools are required to identify potential concerns 
before they become actual problems. This enables preemptive actions to 
ensure the continued safe operation of reactor plants and the 
minimization of maintenance costs over the life of the ship. Additional 
technology development in the areas of chemistry, energy conversion, 
instrumentation and control, plant arrangement, and component design 
will continue to support the Navy's operational requirements.
    The $110 million requested for Materials Development and 
Verification supports material analyses and testing to provide the 
high-performance materials necessary to ensure that naval nuclear 
propulsion plants meet Navy goals for extended warship operation and 
greater power capability. These funds support the test assemblies for 
use in ATR, post irradiation examination of the materials tested at 
ATR, and destructive and non-destructive examinations of spent navy 
nuclear fuel and reactor component materials.
    The $204 million requested for Evaluation and Servicing sustains 
the operation, maintenance, and servicing of Naval Reactors' operating 
prototype reactor plants. Reactor core and reactor plant materials, 
components, and systems in these plants provide important research and 
development data and experience under actual operating conditions. 
These data aid in predicting and subsequently preventing problems that 
could develop in fleet reactors. With proper maintenance, upgrades, and 
servicing, the two prototype plants will continue to meet testing needs 
for at least the next decade.
    Evaluation and Servicing funds also support the implementation of 
the dry spent fuel storage production lines that will put naval spent 
fuel currently stored in water pools at the Idaho Nuclear Technology 
and Engineering Center (INTEC) on the Idaho National Laboratory (INL) 
and at the Expended Core Facility (ECF) on the Naval Reactors facility 
in Idaho into dry storage. Additionally, these funds support ongoing 
decontamination and decommissioning of inactive nuclear facilities at 
all Naval Reactors sites to address their ``cradle to grave'' 
stewardship responsibility for these legacies and minimize the 
potential for any environmental releases.
    The $58.8 million requested for Advanced Test Reactor Operations 
and Test Support sustains the ongoing activities of the INL ATR 
facility, owned and operated by the Office of Nuclear Energy (NE), 
Science and Technology.
    In addition to the budget request for the important technical work 
discussed above, facilities funding is required for continued support 
of Naval Reactor's operations and infrastructure. The $60 million 
requested for facilities operations will maintain and modernize the 
program's facilities, including the Bettis and Knolls laboratories as 
well as ECF and Kesselring Site Operations (KSO), through capital 
equipment purchases and general plant projects.
    The $10 million requested for construction funds will be used to 
support the project engineering and design of a materials research 
technology complex and ECF M290 receiving and discharge station and to 
support the design and construction of a shipping and receiving and 
warehouse complex.

                      OFFICE OF THE ADMINISTRATOR

    This account provides for all Federal NNSA staff in Headquarters 
and field locations except those supporting Naval Reactors and the 
Secure Transportation Asset couriers. The fiscal year 2008 budget 
request is $394.7 million, an increase of $54 million over the fiscal 
year 2007 operating level.
    This budget request is consistent with the funding trajectory 
needed for personnel support in an account that is comprised of over 70 
percent salaries and benefits. NNSA needs to attain a steady-state 
staffing level of about 1,950 FTEs in fiscal year 2008 to support 
current mission needs and to implement workforce planning for 
succession. Information Technology (IT) for the Federal staff is also 
included in this account, and the fiscal year 2008 IT Request reflects 
efficiencies planned for A-76 efforts initiated in fiscal year 2006. 
The outyear budget addresses significant challenges due to the impacts 
of escalation on payroll and needed support to the NNSA Federal staff.
    The budget request includes funding for activities that were 
previously funded by the former Offices of Environment, Safety, and 
Health and Security and Safety Performance Assurance that transferred 
to the NNSA. Pursuant to section 3117 of the John Warner National 
Defense Authorization Act for fiscal year 2007 (Public Law 109-364), 
beginning in fiscal year 2008, the functions, personnel, funds, assets, 
and other resources of the Office of Defense Nuclear 
Counterintelligence of the NNSA are transferred to the Secretary of 
Energy, to be administered by the Director of the Office of 
Counterintelligence of the Department of Energy.
      historically black colleges and universities (hbcu) support
    A research and education partnership program with the HBCUs and the 
Massie Chairs of Excellence was initiated by Congress through earmarks 
in the Office of the Administrator Appropriation in fiscal year 2005, 
fiscal year 2006 and fiscal year 2007. The NNSA has implemented an 
effective program to target national security research opportunities 
for these institutions to increase their participation in national 
security-related research and to train and recruit HBCU graduates for 
employment within the NNSA. The NNSA goal is a stable $10 million 
annual effort. In fiscal year 2008, the Office of the Administrator 
appropriation will provide continued funding of $1 million to support 
certain HBCU activities. The programs funded in the Weapons Activities 
Appropriation will provide approximately $4 to $6 million of support to 
HBCU programs. In addition, the Defense Nuclear Nonproliferation 
Appropriation will provide approximately $2 to $3 million to this 
program. Lastly, the Naval Reactors Program will fund approximately $1 
million of HBCU programs in fiscal year 2008.

                               CONCLUSION

    I am confident that NNSA is headed in the right direction in the 
coming fiscal year. The budget request will support continuing our 
progress in protecting and certifying our Nation's strategic deterrent, 
transforming our nuclear weapons stockpile and infrastructure, reducing 
the global danger from proliferation and weapons of mass destruction, 
and enhancing the force projection capabilities of the U.S. nuclear 
Navy. It will enable us to continue to maintain the safety and security 
of our people, information, materials, and infrastructure. Taken 
together, each aspect of this budget request will allow us to meet our 
national security responsibilities during the upcoming fiscal year and 
well into the future.
    A statistical appendix follows that contains the budget figures 
supporting our Request. I look forward to answering any questions on 
the justification for the requested budget.

                     Fiscal Year 2008 Budget Tables

   NATIONAL NUCLEAR SECURITY ADMINISTRATION--APPROPRIATION AND PROGRAM
                                 SUMMARY
                        [In millions of dollars]
------------------------------------------------------------------------
                                                Fiscal Year
                                  Fiscal Year       2007     Fiscal Year
                                 2006 Current    Operating       2008
                                Appropriations      Plan       Request
------------------------------------------------------------------------
National Nuclear Security
 Administration (NNSA):
    Office of the                       354.2         340.3        394.7
     Administrator............
    Weapons Activities (after         6,355.3       6,275.6      6,511.3
     S&S WFO offset)..........
    Defense Nuclear                   1,619.2       1,683.3      1,672.6
     Nonproliferation.........
    Naval Reactors............          781.6         781.8        808.2
                               -----------------------------------------
      Total, NNSA.............        9,110.3         9,081      9,386.8
------------------------------------------------------------------------
NOTE: The fiscal year 2006 column includes an across-the-board
  rescission of 1 percent in accordance with the Department of Defense
  Appropriations Act, 2006, Public Law 109-148.

    The NNSA budget justification contains information for 5 years as 
required by sec. 3253 of Public Law 106-065. This section, entitled 
Future Years Nuclear Security Program (FYNSP), requires the 
Administrator to submit to Congress each year the estimated 
expenditures necessary to support the programs, projects and activities 
of the NNSA for a 5-year fiscal period, in a level of detail comparable 
to that contained in the budget.

               OUT-YEAR APPROPRIATION SUMMARY--NNSA FUTURE YEARS NUCLEAR SECURITY PROGRAM (FYNSP)
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                             Fiscal     Fiscal     Fiscal     Fiscal     Fiscal
                                                           Year 2008  Year 2009  Year 2010  Year 2011  Year 2012
----------------------------------------------------------------------------------------------------------------
NNSA:
    Office of the Administrator..........................        395        405        415        425        436
    Weapons Activities (after S&S offset)................      6,511      6,705      6,904      7,111      7,324
    Defense Nuclear Nonproliferation.....................      1,673      1,798      1,845      1,893      1,942
    Naval Reactors.......................................        808        828        849        870        892
                                                          ------------------------------------------------------
      Total, NNSA........................................      9,387      9,736     10,013     10,299     10,594
----------------------------------------------------------------------------------------------------------------


            WEAPONS ACTIVITIES--FUNDING PROFILE BY SUBPROGRAM
                        [In thousands of dollars]
------------------------------------------------------------------------
                                                Fiscal Year
                                  Fiscal Year       2007     Fiscal Year
                                  2006 Current   Operating       2008
                                 Appropriation      Plan       Request
------------------------------------------------------------------------
Weapons Activities:
    Directed Stockpile Work....     1,372,327     1,425,722    1,447,236
    Science Campaign...........       276,670       270,458      273,075
    Engineering Campaign.......       247,907       162,786      152,749
    Inertial Confinement Fusion       543,582       489,706      412,259
     Ignition and High Yield
     Campaign..................
    Advanced Simulation and           599,772       611,973      585,738
     Computing Campaign........
    Pit Manufacturing and             238,663       242,392      281,230
     Certification Campaign....
    Readiness Campaign.........       216,567       201,713      161,169
    Readiness in Technical Base     1,654,840     1,613,241    1,662,144
     and Facilities............
    Secure Transportation Asset       209,979       209,537      215,646
    Nuclear Weapons Incident          117,608       133,514      161,748
     Response..................
    Facilities and                    149,365       169,383      293,743
     Infrastructure
     Recapitalization Program..
    Environmental Projects and   .............  ...........       17,518
     Operations................
    Safeguards and Security....       797,751       761,158      881,057
    Other......................  .............       17,000  ...........
                                ----------------------------------------
      Subtotal, Weapons             6,425,031     6,308,583    6,545,312
       Activities..............

Use of Prior Year Balances:
    Security Charge for               -32,000       -33,000      -34,000
     Reimbursable Work.........
    Use of Prior Year Balances.       -37,734   ...........  ...........
                                ----------------------------------------
      Total, Weapons Activities     6,355,297     6,275,583    6,511,312
------------------------------------------------------------------------
Public Law Authorization: John Warner National Defense Authorization Act
  for fiscal year 2007 (Public Law 109-364).


                 OUT-YEAR FUNDING PROFILE BY SUBPROGRAM
                        [In thousands of dollars]
------------------------------------------------------------------------
                                Fiscal     Fiscal     Fiscal     Fiscal
                              Year 2009  Year 2010  Year 2011  Year 2012
------------------------------------------------------------------------
Weapons Activities:
    Directed Stockpile Work.  1,483,417  1,520,502  1,558,515  1,597,478
    Science Campaign........    282,741    275,622    270,390    275,626
    Engineering Campaign....    147,090    144,448    142,614    145,417
    Inertial Confinement        406,098    413,186    411,851    407,487
     Fusion Ignition and
     High Yield Campaign....
    Advanced Simulation and     598,241    583,643    570,873    582,243
     Computing Campaign.....
    Pit Manufacturing and       291,945    339,462    357,622    347,269
     Certification Campaign.
    Readiness Campaign......    190,477    184,703    180,357    183,946
    Readiness in Technical    1,698,403  1,765,458  1,862,729  1,952,633
     Base and Facilities....
    Secure Transportation       228,300    237,749    253,037    262,118
     Asset..................
    Nuclear Weapons Incident    169,835    178,327    187,243    196,605
     Response...............
    Facilities and              286,572    297,096    304,330    312,000
     Infrastructure
     Recapitalization
     Program................
    Environmental Projects       32,471     29,923     30,864     31,574
     and Operations.........
    Safeguards and Security.    924,410    969,881  1,017,575  1,067,604
                             -------------------------------------------
      Subtotal, Weapons       6,740,000  6,940,000  7,148,000  7,362,000
       Activities...........
    Security Charge for         -35,000    -36,000    -37,000    -38,000
     Reimbursable Work......
                             -------------------------------------------
      Total, Weapons          6,705,000  6,904,000  7,111,000  7,324,000
       Activities...........
------------------------------------------------------------------------


     DEFENSE NUCLEAR NONPROLIFERATION--FUNDING PROFILE BY SUBPROGRAM
                        [In thousands of dollars]
------------------------------------------------------------------------
                                                Fiscal Year
                                  Fiscal Year       2007     Fiscal Year
                                  2006 Current   Operating       2008
                                 Appropriation      Plan       Request
------------------------------------------------------------------------
Defense Nuclear
 Nonproliferation:
    Nonproliferation and              312,658       270,387      265,252
     Verification Research and
     Development...............
    Nonproliferation and               74,250       128,911      124,870
     International Security....
    International Nuclear             422,730       472,730      371,771
     Materials Protection and
     Cooperation...............
    Global Initiatives for             39,600   ...........  ...........
     Proliferation Prevention..
    HEU Transparency                   19,288   ...........  ...........
     Implementation............
    Elimination of Weapons-           187,100       225,754      181,593
     Grade Plutonium Production
    Fissile Materials                 468,773       470,062      609,534
     Disposition...............
    Global Threat Reduction            96,995       115,495      119,626
     Initiative................
                                ----------------------------------------
      Subtotal, Defense Nuclear     1,621,394     1,683,339    1,672,646
       Nonproliferation........

Use of Prior Year Balances.....       -92,215   ...........  ...........
                                ----------------------------------------
      Total, Defense Nuclear        1,619,179     1,683,339    1,672,646
       Nonproliferation........
------------------------------------------------------------------------
NOTE: The fiscal year 2006 Current Appropriation column includes
  additions for international contributions to the Elimination of
  Weapons-Grade Plutonium Production Program in the amount of
  $12,677,000, and the use of prior year balances in the amount of
  $2,215,000 for an approved appropriation transfer action to the Office
  of the Administrator.
Public Law Authorization: John Warner National Defense Authorization Act
  of 2007, (Public Law 109-364).


                 OUT-YEAR FUNDING PROFILE BY SUBPROGRAM
                        [In thousands of dollars]
------------------------------------------------------------------------
                                Fiscal     Fiscal     Fiscal     Fiscal
                              Year 2009  Year 2010  Year 2011  Year 2012
------------------------------------------------------------------------
Defense Nuclear
 Nonproliferation:
    Nonproliferation and        305,105    335,564    353,047    364,528
     Verification Research
     and Development........
    Nonproliferation and        133,041    158,693    166,479    174,276
     International Security.
    International Nuclear       408,209    402,458    407,161    414,009
     Materials Protection
     and Cooperation........
    Elimination of Weapons      138,929     24,507  .........  .........
     Grade Plutonium
     Production.............
    Fissile Materials           660,796    771,190    802,786    813,378
     Disposition............
    Global Threat Reduction     151,920    152,588    163,527    175,809
     Initiative.............
                             -------------------------------------------
      Total, Defense Nuclear  1,798,000  1,845,000  1,893,000  1,942,000
       Nonproliferation.....
------------------------------------------------------------------------


              NAVAL REACTORS--FUNDING PROFILE BY SUBPROGRAM
                        [In thousands of dollars]
------------------------------------------------------------------------
                                                Fiscal Year
                                  Fiscal Year       2007     Fiscal Year
                                  2006 Current   Operating       2008
                                 Appropriation      Plan       Request
------------------------------------------------------------------------
Naval Reactors Development:
    Operations and Maintenance        734,877       747,648      765,519
     (O&M).....................
    Program Direction..........        29,997        31,380       32,700
    Construction...............        16,731         2,772       10,000
                                ----------------------------------------
      Total, Naval Reactors           781,605       781,800      808,219
       Development.............
------------------------------------------------------------------------
Public Law Authorizations: Public Law 83-703, ``Atomic Energy Act of
  1954'' ``Executive Order 12344 (42 U.S.C. 7158), ``Naval Nuclear
  Propulsion Program'' Public Law 107-107, ``National Defense
  Authorizations Act of 2002'', title 32, ``National Nuclear Security
  Administration'' John Warner National Defense Authorization Act for
  Fiscal Year 2007, (Public Law 109-364).


                 OUT-YEAR FUNDING PROFILE BY SUBPROGRAM
                        [In thousands of dollars]
------------------------------------------------------------------------
                                Fiscal     Fiscal     Fiscal     Fiscal
                              Year 2009  Year 2010  Year 2011  Year 2012
------------------------------------------------------------------------
Naval Reactors Development:
    Operations and              771,700    795,700    822,500    836,800
     Maintenance............
    Program Direction.......     33,900     35,100     36,400     37,700
    Construction............     22,400     18,200     11,100     17,500
                             -------------------------------------------
      Total, Naval Reactors     828,000    849,000    870,000    892,000
       Development..........
------------------------------------------------------------------------


    Senator Dorgan. Mr. D'Agostino, thank you very much for 
your testimony.
    I'd like to ask a few questions, then I will call on my 
colleagues and then I will finish with the remainder of my 
questions so that my colleagues have ample time as well.

                      RELIABLE REPLACEMENT WARHEAD

    Let me ask first about the RRW program. I want to have you 
tell us how that came to be. What was, what created the 
existence of RRW? Some colleagues here in the Congress say that 
is an outgrowth of the program that was rejected, the Earth 
Penetrater Bunker Buster program and it morphed into an RRW 
program. Can you tell me, what is the origin of the RRW 
program?
    Mr. D'Agostino. Certainly, Mr. Chairman. But, I'd like to 
dispel the notion that it is an outgrowth of any, so-called 
bunker buster. The RRW program is a natural piece or element in 
the stockpile stewardship strategy. As you're aware, in the 
early 1990s the country decided to forego underground testing 
and a few years after that we endorsed a strategy of stockpile 
stewardship. This is the idea of spending resources into 
upgrading our science facilities to understand what happens as 
weapons age and to embark, essentially, on what we are in right 
now, a life extension program strategy.
    Life extension program means taking the existing warheads 
that we have and investing money to build those warheads 
exactly like they were built 10, 20, 30, 40, 50 years ago to 
make sure that they would perform as in the past because we 
aren't going to do a test anymore, underground test.
    RRW came out as a result of confluence of two things. One, 
our science tools expanded greatly. Our computing capability, 
the models and codes that we use to simulate the aging 
warheads, as well as this life extension program, made us 
realize that we're dealing with warheads that were designed 
quite differently. They were designed to maximize the yield of 
a warhead to the weight of the warhead itself. We wanted the 
most tightly designed warhead on the top of that missile 
because the Department of Defense, at the time, was interested 
in lots of weapons and being able to launch them long 
distances. And, it was also at a time when we were constantly 
designing new warheads every 10, 20 years we were exercising 
our capability. We never worried about the aging of weapons.
    And so, as we looked at what happens in the future, can a 
weapon that was designed to be replaced every 20 to 25 years 
last 30, 40, 50, 60 years? And, especially what does that do to 
our margins and more importantly, what does that do to our 
confidence? We don't want to be in a situation where we have to 
conduct an underground test.
    So, we decided to embark on an RRW approach because our 
concern was that we wanted to be able to add more design margin 
into the warhead. We wanted to put security features into the 
warhead which addressed the future threats, not the threats 
that we had in the past. And, we're also concerned about not 
wanting to replicate cold war processes and cold war techniques 
because these are very expensive.
    Senator Dorgan. Mr. D'Agostino, I want to be able to ask 
you a second question.
    Mr. D'Agostino. Oh,----
    Senator Dorgan. Thank you.
    Mr. D'Agostino. [continuing]. Certainly.
    Senator Dorgan. I want to ask a couple questions about RRW. 
I do have some questions for Mr. Tobey. But, several weeks ago, 
you and General Cartwright were in front of the Senate Armed 
Services Committee. Senator Reed asked you a question and I 
reviewed that because part of RRW relates to the question of 
whether there needs to be testing. And, let me read you the 
transcript because I want to try to understand what this means.
    Quoting Senator Reed, ``If it becomes clear at some point 
that it is not possible to certify without testing, would you 
support terminating the effort?'' General Cartwright, ``I would 
come back to this subcommittee and tell you why we've got to 
that position and what the criteria or what the detail was 
behind that and then we would have that discussion.'' Then 
Senator Nelson said, ``If it becomes clear at some point that 
it wouldn't be possible to certify the RRW without nuclear 
testing, would you support terminating the effort?'' Mr. 
D'Agostino, you indicated, I'm quoting you, ``I would say that 
because it's one of the most significant criteria that we've 
had to proceed down this path, we would have to examine that. I 
mean, we'd have to say, `Why would we go forward and continue 
with the effort.' ''
    Today's testimony, you talk about offering a reduced 
likelihood that we will ever again need to conduct an 
underground nuclear test. The question is, is there any reason 
for someone to read some subtle shift here? It seemed to me 
there might be a subtle shift. I think most of us proceed under 
the assumption that the, the understanding is, that RRW will 
not require testing. Is that still your position?
    Mr. D'Agostino. My position is certification of an RRW 
design will not require underground testing. There's a broader 
question: As weapons age there's no guarantee, in fact no one 
can guarantee today's stockpile might not require an 
underground test. We don't know all of the details on how 
materials age. And so, to certify the RRW, in my view, based on 
the information I've reviewed and the proposal submitted by Los 
Alamos and Lawrence Livermore, would not require underground 
testing to certify it.
    I'd like to add, because the design margins on the RRW are 
based solidly on tested history that already existed. The 
country's invested a lot of money in developing a nuclear test 
database. Taking advantage of that I'm confident that what we 
have in an RRW design, at this point, again, it's only on paper 
and that's where it will stay until we decide to move forward, 
but that we are further away and have a reduced likelihood 
compared to a cold war stockpile. I'm concerned that if we stay 
with a cold war stockpile, as it currently exists, that our 
chances are testing are much greater than if we shifted to an 
RRW strategy.
    Senator Dorgan. The, my understanding is that the State 
Department has not done any studies. And, I wonder if the 
Department of Energy has with respect to whether the activities 
of an RRW will have any impact on our objectives with respect 
to nonproliferation. I mean, this will be a larger 
international debate. Has there been an analysis of that, the 
consequences of that by the Department of Energy? I believe it 
has not been done by the Department of State.
    Mr. D'Agostino. If I could answer that, I could ask Mr. 
Tobey to follow with me. When we, before we made an RRW 
decision and announcement, we did consult with our allies in 
NATO and we also talked to Russia and China about the strategy 
we're approaching. In almost all cases, we had, it was well 
understood why we were proceeding down this path. There was no 
study to my knowledge, per se, of directly taking, essentially 
a straw vote if you will, on exactly how things were done.
    Mr. Tobey. Mr. Chairman, we have given that matter some 
thought. And, I think, frankly, the questions that you're 
asking are exactly the right ones.
    In analyzing nonproliferation or disarmament impacts of 
such a system, I think the right questions relate to whether or 
not such a system would reduce or increase the need for nuclear 
testing, whether it would reduce or increase pressures to, or 
would enable a reduction or an increase, pressure for an 
increase in the size of arsenals, and whether or not it would 
improve the safety and security in weapons. I think by most 
standards, and certainly the objectives of the RRW Program 
would be to lead to conditions that would actually improve 
nonproliferation and disarmament objectives. So therefore, it 
is entirely consistent with our nonproliferation policy.
    Senator Dorgan. I have one additional question, then I will 
defer to my colleagues and then I will ask some questions at 
the end.
    Back in 1974, then Secretary of State indicated that he 
felt it was urgent to create ``global standards for nuclear 
security.'' And, it's been now roughly 30 years. We're still 
not quite there. We do have some standards, but without the 
kind of definition, I think, most people feel is necessary. Mr. 
Tobey, can you describe to me what efforts are underway, from 
your standpoint, with respect to those issues?
    Mr. Tobey. Certainly, and one of the most important 
nonproliferation efforts we have underway is meant to address 
exactly that. Last year, Presidents Bush and Putin, just before 
the G-8 Summit in St. Petersburg, announced the global 
initiative to combat nuclear terrorism. I think there are two 
ways to look at this program. One, it's an effort to apply the 
lessons we've learned and the standards we've developed and the 
practices we put into place in former Soviet states worldwide.
    Another one is to allow for the practical means to 
implement the legal requirements of U.N. Security Council 
Resolution 1540. We've started with a small core of states, the 
G-8 plus four others, Kazakhstan, Australia, China, and Turkey. 
We were joined later by Morocco. We adopted, first, the 
statement of principles. We've since had a meeting to adopt a 
work program and we hope to greatly expand the organization in 
a meeting next month in June in Kazakhstan.
    Senator Dorgan. Mr. Tobey, thank you very much.
    We've been joined by the ranking member, Senator Domenici. 
I will call on Senator Domenici, then I will call on Senators 
in order of appearance.
    Senator Domenici.
    Senator Domenici. Mr. Chairman, I think that would be a bit 
unfair, so I would ask that we not do it. And, because I was 
late and it was my own fault. I attest that to everyone. Please 
don't think it was more important than any old meeting. I just, 
it just got away from me. So, you can assume it was a very fun 
meeting or a lot of fun or something.
    I just didn't get away from it. And, I looked up and I 
thought, ``My God, D'Agostino is finished and I'm almost 
finished.''
    So, I would rather go about third and that will be fair for 
you and fair for me.
    Senator Dorgan. All right. Well, as former chairman you 
certainly, we would certainly want to recognize your right to 
proceed next----
    Senator Domenici. I'll go after----
    Senator Dorgan [continuing]. As ranking member. All right.
    Senator Craig.
    Senator Craig. Thank you very much, Mr. Chairman.

                   GLOBAL NUCLEAR ENERGY PARTNERSHIP

    The NNSA's 2008 budget includes $10 million for 
nonproliferation activities within Global Nuclear Energy 
Partnership (GNEP). Is this enough to provide the global 
security that is required for a program of this magnitude?
    Mr. Tobey.
    Mr. Tobey. Senator, I think it's a good start. As you know, 
we're at the very early stages of the Global Nuclear Energy 
Partnership. I think it would be fair to regard GNEP as a 
nonproliferation program. I believe it is such for four 
reasons. First, it should diminish incentives on States to have 
indigenous enrichment programs. Second, it should allow us to 
reduce separated stock, stockpiles of separated plutonium. 
Third, we intend to use it to improve proliferation resistant 
reactor technology. And fourth, we aim to improve safeguards 
technology.
    Senator Craig. So, you referenced it as a good start, 
therefore, I used the word is it enough, is it adequate based 
on where we are with this initiative, to fund it appropriately?
    Mr. Tobey. Yes sir, it is. I meant good start in the sense 
that the GNEP program will proceed. We will need to spend more 
money on nonproliferation efforts related to it in the future.
    Senator Craig. Europeans have been recycling used nuclear 
fuel for over 30 years without an incident or hint of separated 
material theft. Are you looking at their programs and 
incorporating their experiences into GNEP?
    Mr. Tobey. We're certainly looking at their programs. 
Although I think what we're trying to do is to reach a 
situation in which we would not have, as I mentioned, separated 
stocks of plutonium, pure plutonium or nearly pure plutonium, 
which are a greater nonproliferation threat. If you look at 
incidents that have been made public about nuclear materials 
that have gotten loose I think it would tend to indicate that 
those are the cases in which we need to be concerned about. So, 
we hope to use advanced technology to avoid pure plutonium or 
nearly pure plutonium.
    Senator Craig. I think my concern, as it relates to the 
program and the long-term character of getting it online, 
costs, and all of that, is that as much of the successes around 
the world that we can incorporate, we ought not be spending our 
time, therefore, reinventing when there are successes out there 
that are measurable and usable.
    Mr. Tobey. Well, we certainly would like to learn from the 
experience of others. I think we would also like to be 
technology leaders, in this regard. And hopefully improve the 
nonproliferation characteristics of the technology for 
recycling fuel.
    Senator Craig. Thank you, Mr. Chairman.
    Gentlemen, thank you.
    Senator Dorgan. Senator Craig, thank you.
    Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman.
    And, thank you gentlemen for your testimony.

              PIT PRODUCTION/RELIABLE REPLACEMENT WARHEAD

    Mr. D'Agostino, do you know how many and what types of pits 
the complex would require to make in 2030 as part of your 
forward looking analysis?
    Mr. D'Agostino. I'm sorry Senator Reed. I missed the first 
part of the question.
    Senator Reed. Do you know how many and what type of pits 
the complex will be required to make in 2030, if you're doing 
your 2030 planning now?
    Mr. D'Agostino. Right now our plan is to build an interim 
capability of between 30 and 50 pits by the 2012 timeframe and 
to increase our capability, given our current requirements. The 
DOD, the Department of Defense, which sets the requirements for 
the Department of Energy, has currently projected, based on 
what I would say a pre-RRW type stockpile, of a need to go to 
about 125 pits per year. Which is the idea of being able to, 
over a 40-year period, replace the pits in the ongoing in 
steady state, nuclear stockpile. Every 30 or 40 years you'd be 
replacing a pit. The size, the number and type of pits, are 
clearly very dependant on the size of the stockpile itself and 
so there's that linkage there.
    Senator Reed. And, also dependant upon the progress on the 
RRW?
    Mr. D'Agostino. I think so for a couple of reasons. One, 
because of the RRW, we'll have an opportunity when we look at 
the RRW replacement strategy to look at pits that we already 
have built, essentially, in the past that can potentially be 
reused in future stockpiles.
    As you're probably aware, we had tasked our laboratories to 
take a hard look at the design and to look at the lifetimes of 
plutonium metal and the pits itself. That analysis was 
completed last year and we had the JASONS take an independent 
look at that and they validated the fact that our plutonium pit 
life, metal life times are a bit longer than we had expected. 
Up to between 85 and 100 years in some cases. That's good news 
because it provides us the flexibility to look at pits that 
we've already built. And, I think, ultimately, will allow us to 
have the smallest plutonium capability that the country might 
need instead of getting in to building a pit capability of 125 
and up. We might be looking at 125 and down from the size of 
plutonium capability.
    Senator Reed. The pit manufacturing and certification 
campaign also includes $24.9 million for the consolidated 
plutonium center.
    Mr. D'Agostino. Yes, sir.
    Senator Reed. Specifically indicate how you're going to 
spend that money.
    Mr. D'Agostino. That money would be used to do preliminary 
design. I don't like to look at it as a building right now 
because it's far from that. It's to do the studies that need to 
be done to determine the exact size that it needs to be to 
handle our future stockpile, and to take a look at the 
technologies that might need to be in this facility.
    As I mentioned earlier in my opening, one of the answers 
that I gave earlier, we're interested in making a design that's 
manufacturing a simple and as environmentally safe and as 
worker safe as possible. In the past, that was not a 
consideration. It's not that people in the past didn't care 
about these topics, it's that 30-40 years later we know a lot 
more about impacts of these materials on human safety. So, 
those types of studies, technology development activities and 
siting studies to support the work that we're going to be doing 
because we're looking at a number of different sites. That's 
what the $24 million is for.
    Senator Reed. I think the chairman opened up some very 
important questions with respect to RRW and I want to follow 
up. Some of these are very specific.
    First, the RRW schedule presently is in phase what?
    Mr. D'Agostino. Right now we are in what we call phase 2A, 
which is a design definition and cost study phase. That's what 
I would propose that we were going to be doing in fiscal year 
2007. That's what we were authorized to do, and into fiscal 
year 2008. That phase is very important because it will 
provide, what I call the detailed cost, the detailed scope, and 
the detailed schedule. That is not just the Department of 
Energy's cost, scope, schedule, but includes our work with the 
United States Navy, because it's their interface with the Navy 
systems. That needs to be done in order for us to be in a 
situation where we can look at how that influences the size of 
the stockpile, our life extension strategy, and the number of 
different types of systems, which I think are so important for 
both the committee and as well as myself to understand.
    Senator Reed. Thank you very much.
    I have additional questions, but I'll wait for another 
round, Mr. Chairman. Thank you.
    Senator Dorgan. Senator Murray.
    Senator Murray. Thank you very much, Mr. Chairman.

                 PACIFIC NORTHWEST NATIONAL LABORATORY

    And, I just have a quick parochial issue I wanted to query 
you about. And, it's an issue of the Pacific Northwest National 
Laboratory that's in my home State of Washington and I think 
you're aware of the need to replace the unique facility that 
supports an important national security mission. It's going to 
be affected by the Hanford clean up schedule. And, I wanted to 
thank you for your active support in this project that involves 
partners from the Office of Science and Department of Homeland 
Security (DHS) as well. And, I noticed that the NNSA budget 
does not include funds in 2008 for this project, and I wanted 
to find out from you if you continue to support this project.
    Mr. D'Agostino. I'll answer the question. I'd like to ask 
my colleague to amplify if he could. I appreciate your 
comments. We do support this project. The type of relationship 
we have with the Department of Homeland Security and my sister 
organization within the Department, the Office of Science, lays 
out what I would say, a commitments page on how we are going to 
integrate funding requests. In fiscal year 2008, the NNSA 
element of that is zero dollars. There are more details and 
probably Will can take it from here and talk about how we've 
integrated the three organizations together.
    Senator Murray. Mr. Tobey.
    Mr. Tobey. Certainly, Senator Murray. The zero dollars is 
really a reflection of the fact that the NNSA has been out 
ahead of the other two partners, well ahead of the other two 
partners in our spending rate on this. And frankly, I think it 
just made sense for us to be at approximately the same rate of 
spending as the other two partners. It doesn't reflect a lack 
of support for the program.
    Senator Murray. And, I assume that you would not object if 
money's added to the budget for this project?
    Mr. Tobey. Well, of course I support the President's 
budget, Senator.
    Senator Murray. Okay. Well, I would then ask, I assume 
you're going to request additional, or sufficient funding in 
the 2009 request for where you need to be.
    Mr. Tobey. We're certainly going to try and make sure that 
we support the project, we would very much like it to go 
forward. We would like the spending for it to be proportionate 
among the partners that are funding it.
    Senator Murray. Okay. Thank you very much, Mr. D'Agostino.
    Mr. D'Agostino. Thank you, Senator.
    Senator Murray. We do appreciate your support of this. This 
is very critical and we want to make sure it continues to move 
forward. And, we know the importance of all the partners 
involved in it, but we've got to keep it moving. So, thank you 
very much.
    Mr. D'Agostino. Thank you, Senator.
    Senator Dorgan. Thank you, Senator Murray.
    Senator Domenici.
    Senator Domenici. Thank you very much, Mr. Chairman.
    Senator Feinstein, it's good to see you here. I didn't 
think I would see you on this issue as soon as this. And, I 
assume I will hear you address this issue in a negative manner, 
the new nuke formation. I hope not.

                           PREPARED STATEMENT

    But, I want to say, I have an opening statement that I 
would just ask you make a part of the record.
    Senator Dorgan. Without objection.
    [The statement follows:]

             Prepared Statement of Senator Pete V. Domenici

    Thank you Mr. Chairman, I would like to welcome our witnesses. We 
have Tom D'Agostino, Acting Administrator for NNSA who is joined by 
Admiral Kirkland Donald, Naval Reactors, and Mr. Will Tobey, Nuclear 
Nonproliferation.
    Gentlemen, I appreciate your participation and hard work at the 
NNSA. You have a challenging job and these budgets make your job an 
even greater challenge.
    Mr. D'Agostino, I would like to congratulate you for executing the 
Reliable Replacement Warhead design competition and making a difficult 
selection between the two extremely innovative designs.
    As an original sponsor of the RRW program, I continue to believe 
that this program provides the best opportunity to transform the 
stockpile and reduce the overall number of warheads and weapons 
systems.
    It is clear to me that without a demonstrated capacity to produce a 
weapon that applies state-of-the-art use controls, increased 
reliability margins, and the ability to be certified without testing, 
military leaders will not accept a significantly smaller stockpile than 
we have today as they manage future risks through a massive inventory 
of weapons. Mr. D'Agostino, I want to compliment you for your advocacy 
of this program. You have worked hard to articulate the vision for this 
program since its inception in the fiscal year 2005 Energy and Water 
Conference Report.
    However, if this program is to survive and we are to realize the 
goal of a smaller deterrent, then it is vital for this administration 
to defend this program.
    Today, I will be sending a letter to the Secretary of Defense, 
Secretary of State and the National Security Advisor urging them to 
take a more active role in supporting the RRW program and to answer the 
concerns that have been raised with the creation of the RRW weapon 
system.
    This administration has a strong record on reducing our nuclear 
stockpile. They are committed to reducing the stockpile to its lowest 
levels since the Eisenhower Administration, and the RRW is consistent 
with this objective.
    For anyone interested in further reducing our nuclear stockpile and 
building on the current momentum--now is the time for action, and the 
RRW program is the right vehicle.
    Now let me turn to the other aspects of this budget request.
    I do have concerns about the cuts to the science, engineering and 
experimental activities that support the science-based stockpile 
stewardship activities. Funding for these activities has been cut by 
more than $113 million in this request. I believe the focus on 
transformation puts too much emphasis on facilities and not enough on 
science.
    Going forward it is vital that we sustain our scientific 
capabilities, especially with an RRW design. The JASONs, an independent 
team charged with evaluating the RRW program, also indicated that 
resolving important scientific questions is critical to having 
confidence in the stockpile without underground testing.
    The facts speak for themselves; all three of the labs received a 
net reduction in funding, while funding for the manufacturing plants 
was increased despite the fact there is $60 million in unobligated 
balances at the plants.
    I am surprised by the differences between the Office of Science and 
NNSA budget requests for fiscal year 2008. The Office of Science is 
committed to fully utilizing its experimental facilities and expanding 
its computational and simulation capabilities.
    The NNSA budget has taken the opposite strategy and reduced funding 
for science and experimental activities and proposes to reduce the 
number of NNSA computers from three machines to two.
    I do not believe this strategy is sustainable.
    Now let me turn to Nonproliferation. One of the most challenging 
projects before this subcommittee has been the MOX plant. This facility 
remains the preferred alternative to eliminating 34 tons of excess 
weapons-grade plutonium and fulfills our commitments under the Fissile 
Materials Agreement with Russia.
    I am told by NNSA that the MOX plant remains the most cost 
effective and timely solution to eliminate this material.
    I continue to support this initiative and believe DOE should do 
more to dispose of excess plutonium as a means to mitigate the rising 
security costs. The fiscal year 2008 request includes $881 million for 
security, an increase of $120 million above the fiscal year 2007 level. 
I am concerned that security costs continue to take a larger and larger 
bite out of the mission.
    Mr. D'Agostino, your testimony only makes brief mention of your 
consolidation efforts. I would like to learn more about NNSA's strategy 
to permanently dispose of our excess material and put a stop to the 
rising security costs.
    Mr. Chairman, I believe we need to give very close scrutiny to the 
level of assistance we are providing Russia. When we initiated many of 
the projects under the Cooperative Threat Reduction initiative, Russia 
did not have the financial means to protect and secure nuclear material 
within its country.
    Now, that picture has changed and Russia enjoys a budget surplus as 
they have profited immensely from the high price of crude oil and 
natural gas. I no longer support providing massive subsidies to 
Russia's military establishment and believe they should now be expected 
to pay for their full share of the nonproliferation obligations.
    I intend to work with the NNSA to identify areas where we can 
reduce our subsidies to Russia.
    Finally, I would like to make mention of the success of the Naval 
Reactor program. This program supports the safe and reliable operations 
of 103 nuclear plants in our naval warships.
    I am very proud of the long-term record of success of this program 
and I wish you well in the future.
    Mr. Chairman, I appreciate your patience and I will have several 
questions for our witnesses.

    Senator Domenici. But, I want to say, for a small 
committee, we have a very big sized plate that is full, not 
just full of money, but full of some of the most important 
issues to the American people that any subcommittee, any full 
committee should have, much less this small subcommittee that 
you chair. That people wonder, what in the world is energy and 
water anyway.
    And, we have a series of funds in here for Russia. Let's go 
back about 8 or 10 years, and I want to look at this with you 
very in-depth because I'm wondering whether we ought to give 
them anything. I was the proponent of the Russian programs. 
But, Russia's got more money than we do to spend. If they don't 
care about the nonproliferation, I'm just wondering why we 
should. These are nonproliferation programs, pure American 
dollars. That's one program.
    We've got GNEP in here, at least we've got to fund some of 
it. It's a huge program to finish the closed fuel cycle on 
nuclear energy, of nuclear waste and the development of nuclear 
power. Big monster program with three or four stopover points 
where buildings would be built, technology would be applied 
that is, as much as the biggest we've got around would be built 
anew. Do we do it or not? Do we have enough money? Good 
questions. Clearly, we have some big problems with whether or 
not the entity that you run today, Mr. D'Agostino, NNSA, 
whether it's working right or not. We're not going to have a 
long time in my opinion.
    Mr. D'Agostino. Right.
    Senator Domenici. Before it's determined that you cleaned 
it up and fixed it, or you didn't and it failed.
    Mr. D'Agostino. Right.

                      RELIABLE REPLACEMENT WARHEAD

    Senator Domenici. That's a giant job after we had so much 
faith in that new approach to handling the weaponry. Then we 
have last, but not least, the RRW program.
    I want to say to you, sir. If you represent the 
administration, and if they favor this program like I assume 
they do. And, if they assume, like I do, that it is a 
tremendous approach to reducing the stockpiles of nuclear 
weapons dramatically in the United States, both in number and 
size, within a reasonable time. And, that the same should occur 
and accrue to the Soviet Union, Russia, who has big monsters 
and they keep rebuilding them, monstrous bombs. And, we are 
supposed to set the world on edge here by telling that we are 
for the newest of technology in the RRW and to get on with the 
first, the second little batch of funding, which is going to 
bring a huge debate. And sir, if you represent the 
administration, you better leave this hearing and advise them 
that we better hear from some very big members of this 
administration who are charged with this problem and who have 
credibility. Because they are going to be attacked, this 
program is going to be attacked as being not what we say it is, 
or what you say it is, but something else, without any 
question.
    Mr. D'Agostino. Yes, sir.
    Senator Domenici. The opposite. I have found lacking, and I 
told the chairman, I found lacking the Secretary of Defense's 
ideas and yet, this is a defense program as much as it is not. 
I found that Secretary Rice was not forthcoming, at least had 
not been. And, I found that the Secretary of Defense has not 
been forthcoming. And, I believe that in short order this 
subcommittee ought to know from all of them, how they stand and 
why, and can we really do this, and is it good for the country 
and why.
    It's not too tough for me. I don't need much explaining 
right now. I'm not that smart, but I got a jump start because 
we funded a little bit of it last year. I think you know that. 
But, to me, if we can not convince people that it is time to 
have a new generation, completely different kind of nuclear 
weapons, a complete gigantic build down.
    Incidentally, this administration has a done a terrific job 
of building down the nuclear stockpile. They are the only 
administration that comes close to reducing to the levels of 
the Eisenhower administration, in reducing warheads that 
Americans had available for war use. This administration did it 
in spades. Now they want, without testing, they aren't saying, 
``Let us test.'' They're adding to this that they won't test, 
right? Is that right, Mr. D'Agostino?
    Mr. D'Agostino. Yes, sir. To certify the warhead, that's 
right.
    Senator Domenici. This whole new thing will say, ``We'll 
produce the weapon and we'll produce assurance it will work. It 
will be small, it will be different, and you won't have to test 
it.'' Right?
    Mr. D'Agostino. That's right, sir. That's right. To certify 
the warhead we will not have to test. I believe it will reduce 
the likelihood, certainly, especially compared to the stockpile 
we have right now, we would ever need to test.
    Senator Domenici. Mr. Chairman, I have about 20 more that 
I'll put in later. I do want to thank you for your diligence 
and say what a great start this subcommittee's had, and is 
going to have under your leadership. In my opening remarks, if 
I don't get any more of them in here, I will put them in the 
record.
    I'll close by saying, Admiral, I hope that every time you 
appear before this subcommittee, the fact that you are asked no 
questions does not mean that, that we have anything but the 
greatest admiration for the work you do. If every department of 
the Federal Government could accomplish its mission pursuant to 
its goal as set and never miss the pencil point, we would have 
short hearings and great praise.
    Admiral Donald. Yes, sir. Thank you very much. It's an 
honor to appear before this subcommittee, and I do appreciate 
the support the subcommittee's provided over the years to this 
program. It's been a large part of the success.
    Senator Dorgan. Senator Domenici, thank you.
    Senator Allard.

                           PREPARED STATEMENT

    Senator Allard. Thank you, Mr. Chairman. I have a statement 
I'd like to make a part of the record if I might.
    Senator Dorgan. Without objection.
    [The statement follows:]

              Prepared Statement of Senator Wayne Allard

    Thank you, Mr. Chairman, for holding this important hearing today 
on the National Nuclear Security Administration budget request for the 
coming fiscal year 2008.
    Over the years I have consistently supported sustaining our nuclear 
weapons stockpile, as well as efforts to develop concepts for future 
weapons. I believe that our Nation's national security is strengthened 
by our possession of such weapons.
    Some opponents of these weapons believe that they are a threat to 
our civilization. Others believe our possession of such weapons raises 
the possibility that they might be used. Many believe that if the 
United States dismantled its nuclear stockpile, then other nations 
would follow suit. And, unfortunately, some believe that nuclear 
weapons should be destroyed no matter the cost to our national 
security.
    These arguments do not always reflect the global security 
environment. First, as more than 50 years of deterrence has proven, the 
best way to ensure that a nuclear weapon is not used is to have a 
strong national defense, including nuclear weapons.
    Additionally, opponents have attacked the Bush Administration's 
nuclear weapons initiatives over the past few years, including the 
feasibility study for the Robust Nuclear Earth Penetrator, the 
development of Advanced Concepts, enhanced test readiness, and the 
construction of a new modern pit facility.
    The question that I continue to raise is where do we go from here? 
After the test moratorium went into effect and the stockpile 
stewardship program ramped up, most of our efforts became centered on 
sustaining our current nuclear stockpile. Given the political dynamics 
of the post-cold war era, this strategy seemed to make sense. But, we 
must all recognize that this decision only put off, at least for the 
time being, a larger policy decision about the future of the U.S. 
nuclear weapons stockpile. We must face the facts that our current 
stockpile is on average approaching 20 years in age.
    Again, thank you Mr. Chairman for bringing us here today and I look 
forward to hearing Mr. D'Agostino's testimony today on these and many 
other issues.

                   SECURITY AT NATIONAL LABORATORIES

    Senator Allard. It seems like the Department of Energy 
consistently has problems that raise concerns about being able 
to protect our Nation's secrets. And, we've just got a 
inspector general's report, March 2007, where we have computers 
that are missing, as far as inventories are concerned. And, I'm 
brought back to--was it 1997, 1998 I--think, Senator Domenici, 
where we had computer and security problems related to 
computers at Los Alamos and our national laboratories.
    Senator Domenici. Yes.
    Senator Allard. And, we are back in with the agencies that 
have some of our Nation's top secrets losing computers again. 
And, I'm wondering if you can explain to us how that happens?
    Mr. D'Agostino. This is my question?
    Senator Allard. Yes.
    Mr. D'Agostino. Admiral?
    Senator Allard. How do you pronounce your name?
    Mr. D'Agostino. D'Agostino, Senator.
    Senator Allard. D'Agostino. Okay.
    Mr. D'Agostino. Yes.
    Senator Allard. Got you.
    Mr. D'Agostino. Thank you. It's hard. I believe you might 
be referring to the counterintelligence laptops.
    Senator Allard. This is an inspector general report and it 
was on the counterintelligence section, yes.
    Mr. D'Agostino. That's right. With respect to control of 
material, of computers and security in general because I think 
it's not just a problem that exists at one site. It's something 
that the Secretary and I are very concerned about across all 
areas.
    Most recently, as you are well aware, we had a concern at 
Los Alamos National Laboratory last fall that resulted in 
multiple inspections by the inspector general, and the 
Government Accountability Office to look at what is going on 
with respect to cyber-security. We call it cyber-security. What 
we have found as a result of that, we had too many directives 
that were issued, by memo or email and not enough, actually, 
written down in a clear concise way and put into the contracts 
themselves. So the contractors had, what I would say, is too 
much conflicting information.
    Since that time, the Secretary had directed our Chief 
Information Officer to look at this particular problem 
specifically and the inspector general investigation that was 
done. He commissioned a special task force to look at that 
specific problem. Mr. Pike, who is the Chief Information 
Officer, provided a report. I was part of that task force that 
looked at that. We came out with a number of recommendations to 
deal with it.
    The Secretary is implementing those recommendations, in 
fact, two of the biggest recommendations were to start from 
scratch and simplify the cyber-security directives to make sure 
that it's clear what we expect from our contractors, how we 
expect our contractors to perform. And, more importantly, put 
those requirements in the contracts themselves.
    Those contract modifications are being put into the 
contracts themselves and then the next step is follow through 
with oversight by the Federal site offices and headquarters to 
make sure that we tie expectations and performance, money, and 
reward fee that we have to it. I can't explain that specific 
incident and I apologize. I don't have the details behind that 
particular incident on the laptops, but I know the Secretary is 
very concerned about this particular problem and we're taking a 
look at it, not just at the nuclear weapons laboratories and 
not just across the eight nuclear weapons sites, but across all 
17 laboratories within the Department of Energy.
    Senator Allard. It's my experience here in the Senate that 
this is a chronic problem with the Department of Energy losing 
track of computers. We always set up a committee to check it 
out and recommendations are applied and, you know, 4 or 5 years 
later it erupts again. And, I'm hoping that somebody around 
here is beginning to take this problem seriously. I think it's 
intolerable, from my point of view.
    Mr. D'Agostino. Right.
    Senator Allard. My question is, do you have money to make 
sure that you have proper controls over our Nation's classified 
information?
    Mr. D'Agostino. I know the answer to that question is yes 
and I'll explain how. In fact, right now within the NNSA our 
cyber-security budget has gone up by more than 15 percent 
compared to fiscal year 2007. But, actually there's more to it 
than that.
    For fiscal year 2009--we're putting our budget together for 
that right now--we're applying what we call risk-based and risk 
management decision processes to make sure that we know what it 
takes to fund that area. My expectation in 2009 is we'll be 
seeing additional resources in this area to address these 
particular problems. Resources are part of the problem, but the 
other part of the problem is attitude and understanding and 
having clear expectations.
    The one thing I've learned in this job over the last couple 
of years and in Defense programs is that setting clear, simple 
expectations is very important, having the expectations defined 
in contracts and in performance expectation, performance 
evaluation plans, and tying financial resources to those 
expectations so it actually drives behavior. I think that's how 
were going to get to solving this problem.
    Senator Allard. Mr. Chairman, I have one more question. I 
can either ask it now, if you'd like, or wait for another 
round.
    Senator Dorgan. You may proceed.
    Senator Allard. Okay, thank you.
    Senator Dorgan. Then I'll call on Senator Feinstein.
    Senator Allard. Thank you.

                 MIXED OXIDE FUEL FABRICATION FACILITY

    I strongly support the Mixed Oxide Program in Savannah. I 
think it's also referred to as MOX Plus, am I correct?
    Mr. D'Agostino. We just call it MOX.
    Senator Allard. Okay. When do you plan to complete your 
design work for the facility and then when do you plan on to 
begin construction and have you got any thoughts about cost 
scheduling?
    Mr. Tobey. Senator, the design is some 90 percent complete 
at this point. Small portions of the designs balance will go on 
for years because it just makes sense to do some of the design 
as the building is completed. We're ready to begin construction 
as soon as we're permitted by law, after August 1 of this year. 
And, it would, the construction would go on for some 15 years, 
is the baseline.
    Senator Allard. And, when do you think you'll be able to 
process materials?
    Mr. Tobey. The construction will be complete in 2016. We'd 
be able to process materials immediately thereafter.
    Senator Allard. Thank you.
    Mr. Tobey. And, it would run for 15 years after that.
    Senator Allard. Thank you, Mr. Chairman.
    Senator Dorgan. Senator Allard, thank you.
    Senator Feinstein.
    Senator Feinstein. Thank you very much, Mr. Chairman.
    Mr. D'Agostino, I want to thank you for the time you spent 
with me on Monday.
    Mr. D'Agostino. Yes, ma'am.

                      RELIABLE REPLACEMENT WARHEAD

    Senator Feinstein. I want to say that you're a straight 
shooter and that you're honest and direct. And, I want you to 
know that I really appreciate this.
    Mr. D'Agostino. Thank you.
    Senator Feinstein. I believe I now have a very good idea of 
what is involved in this warhead. This is a real point of 
conscious for me. I grew up following Hiroshima, 15 kilotons, 
and Nagasaki, 7 kilotons. And, I saw the wake of that all 
during my childhood. And, the mushroom cloud was the thing we 
most feared growing up----
    Mr. D'Agostino. Right.
    Senator Feinstein [continuing]. In this very great country. 
A December 2006 report by the national laboratories, has showed 
us that the plutonium pits have a lifespan of at least 85 
years. And, it's my understanding that next week, the American 
Association for the Advancement of Science is expected to issue 
a report calling on the administration to develop a bipartisan 
policy on the future of nuclear weapons and nuclear weapons 
policy before moving ahead with the RRW. My vote on this, 
depends on whether I believe this is, in fact, a new nuclear 
warhead. I told you that Monday. I have thought about it all 
day Tuesday. I've gone over in my mind, those things that we 
shared in that classified briefing.
    I worked with Sam Nunn, when he was in the Senate of the 
United States. And, I want to quote for a moment, his testimony 
on March 29 before the House Energy and Water Appropriations 
Subcommittee. And he noted, and a quote, ``On the RRW itself, 
if Congress gives a green light to this program in our current 
world environment. I believe that this will be misunderstood by 
our allies, exploited by our adversaries, complicate our work 
to prevent the spread and use of nuclear weapons and make 
resolution of the Iran and North Korea challenges all the more 
difficult.'' That's Sam Nunn, who's the chairman of the Nuclear 
Threat Reduction. And, I think very well respected for his 
background and work in this area.
    I would hope that every member of this subcommittee would 
get a classified briefing on this proposed new, proposed change 
in the warhead. Let me ask this question. Has the NNSA assessed 
the impact of the United States development of a new warhead on 
U.S. nonproliferation efforts, including efforts to convince 
other countries not to acquire nuclear weapons? And, how do you 
justify this cost to our nonproliferation efforts?
    Mr. D'Agostino. Thank you, Senator. I appreciate your 
comments earlier.
    I'm going to answer it and I'd like Mr. Tobey, as well, to 
talk a little bit about the international piece. His folks 
spend a tremendous amount of time overseas talking about this 
very subject. I don't recall if you were in the room when I 
responded earlier to the idea.
    Before we made the announcement on the Reliable Replacement 
Warhead concept, we did talk to our allies, the North Atlantic 
Treaty Organization (NATO), as well as other allies, including 
Russia and China about the strategy and the understanding that 
we want to reduce the size of our stockpile. As I mentioned to 
you earlier this week, I'm committed to making sure that when 
we reduce the size of our stockpile and we look at a future 
nuclear deterrent, that my responsibility is to make sure that 
that deterrent is as safe and as secure as humanly possible, as 
our technology allows it to be. I'm convinced that our cold war 
stockpile has, even though we assess it on an annual basis 
right now.
    Senator Feinstein. You assess that it's safe and secure on 
an annual basis?
    Mr. D'Agostino. Assess it, assess it's safe and secure on 
an annual basis. That over time, we'll be put into a situation 
where this country will be faced with a question that I don't 
want the President, whomever the President may be in the 
future, to have to decide whether we need to conduct an 
underground test. I want to stay as far away from the 
underground test question as possible.
    The question in my view, becomes if there is a future 
nuclear deterrent, and I do understand Senator Nunn's comments, 
then how should, what should it look like? I believe it should 
be small, as small as possible.
    I believe the nuclear footprint on the United States, how 
many sites and the size of the sites and how much money the 
Nation invests over a lifetime, should be commensurate with 
that. I believe that the Nuclear Posture Review that was put 
out a few years ago, which was the concept of replacing the 
large number of nuclear warheads as a nuclear deterrent during 
the cold war is not as good as having a small number of very 
safe and secure warheads with the ability of the Nation to 
respond in the future.
    Right now we are faced, I believe, with a fairly important 
point, as you are absolutely right, on what strategy is the 
right strategy. I'm concerned that if we go down a track of, 
without considering this, without understanding what RRW really 
means, then we won't actually have the information that I can 
present to you and say, ``This is what it really means with 
respect to how small the stockpile can be.''
    Senator Feinstein. Which you don't have yet.
    Mr. D'Agostino. I don't have that, that's right, ma'am. 
And, that's what I'd like to do in the next 9 to 12 months, is 
to develop the cost, the schedule, and scope with the United 
States Navy to give you a real number. How much it costs? What 
are the offsets? How small does the stockpile get as a result 
of this? What does this mean to nuclear testing, exactly what 
does this mean to nuclear testing? And, how many more nuclear 
weapons should we be dismantling? I want to be able to put that 
in writing, almost like a contract, if you will.
    Senator Feinstein. Could you speed it up and do it before 
we vote on whether to approve this appropriation?
    Senator Dorgan. Would the Senator yield on that point?
    Does the appropriation request for this coming fiscal year 
also include some small amount of money for an RRW-2, which 
would be a follow up, follow-on contract? And, if so, what, 
what's the purpose of talking about a second RRW before the Air 
Force, prior to making the decision the Senator from California 
is asking?
    Mr. D'Agostino. That's a good question, sir. We have to 
look at our B61 bomb. The B61 bomb is an Air Force bomb. It was 
designed in the early 1960s, essentially, almost 40, 45, 50 
years ago. It's got vacuum tubes inside the system itself. We 
have other concerns that I'll be glad to talk specifically in a 
classified session, I'll be glad to talk about that.
    And so, the idea was, do we--right now, we're going to be 
doing a life-extension plan, starting in the 2012, 2010 to 2012 
timeframe. And the question is, does it make sense to rebuild a 
bomb? As we will do if we don't move forward in a different 
direction or we build bombs the same way we did back in the 
1950s and 1960s? I think that's irresponsible to do that. The 
technology has changed so much in the last 50 years. The 
threats have changed so much in the last 50 years. It would be 
irresponsible for us to replicate the past.
    I don't think it's right for our workforce, it makes them 
work on components like Beryllium. Beryllium is a very 
hazardous material, and causes berylliosis, which is a disease 
we didn't know about 50 years ago. In fact, this Nation is 
spending money right now, essentially compensating our workers 
who, over the past 40 years have devoted their life to national 
security, and now are finding themselves sick. I don't want to 
get into that in the future.
    Senator Feinstein. Would you go back to your proposal?
    Mr. D'Agostino. I think it would make sense and I want to 
make sure the subcommittee gets the detailed information on the 
cost, the scope and the schedule of what an RRW could do, and 
that's what we're working on right now. We are authorized and 
appropriated to do that, and we are doing that. And it's going 
to carry forward into 2008.
    When we get that information together, and when we can look 
at what this means to the size of the stockpile, to what things 
we take off the table from our current plans, and how does this 
impact the actual infrastructure--and I use that term to 
describe buildings and processes--and how much money we save 
from that, I think the actual data that I have right now is 
compelling, but I want it to be, what we call, budget quality. 
In other words, the quality that I feel I can stand behind, and 
come to this.
    Senator Feinstein. I thought what you had said to me 
earlier, that it might be possible to actually speed up the 
reduction of the nuclear fleet, so to speak.
    Mr. D'Agostino. Oh, okay, yes, ma'am. We were talking about 
dismantling warheads.
    Senator Feinstein. Right.

                         WARHEAD DISMANTLEMENT

    Mr. D'Agostino. Yes, ma'am. A little bit different from 
RRW, we're going as quickly as possible given the resources to 
work with the Navy to get the picture right.
    On dismantlements, what we did last year was we made a 
unilateral decision outside of the Defense Department space, to 
accelerate by about 25 percent, on average, our dismantlements 
of cold war nuclear warheads.
    In fact, in fiscal year 2007, this year, we're in right 
now, we had made a commitment, I made the commitment to the 
Secretary, and the Secretary talked to the Secretary of 
Defense, of a 49 percent increase in the number of warheads 
we're dismantling, compared to fiscal year 2006.
    In all likelihood, we're going to not only hit that target, 
we're going to exceed it. We'll probably dismantle twice as 
many warheads this year as last year. The key will be keeping 
on that pace year in and year out. Right now, even though we've 
dismantled 13,000 warheads in the timeframe I mentioned 
earlier, in the 1990s, and we have a number of warheads to 
dismantle, that what we've got is a plan that takes us out into 
the early 2020 decade. And, ultimately, in the end, we need to 
pull that date, the end date, up forward.
    Senator Feinstein. How many warheads are in the RRW, long-
term program?
    Mr. D'Agostino. If you take the concept to its end. If we 
believe that we're going to have fewer and safer and securer, 
it would be the number of warheads that I can talk about 
publicly, it's the Moscow Treaty number of 1,700 to 2,200 
warheads plus, a number of what we call reliable spares.
    Because, when we say operationally deployed, these are 
warheads that are with the Department of Defense, whether 
they're in silos or at Navy bases, and we need to maintain a 
fraction of that number within the Department of Energy because 
we do surveillance. We take some systems out and we replace 
them to check on their quality.
    That is ultimately the number that you need to understand 
and that I need to understand that the Department of Defense 
can collectively come to. I have in my mind what it could be, 
it would be not appropriate, I don't believe, to discuss it in 
public until I've had a chance to talk to the Defense 
Department.
    Senator Feinstein. So, we could sit down with you, again, 
in a classified way and go over some of this?
    Mr. D'Agostino. Yes, ma'am----
    Senator Feinstein. Because it's very important.
    Mr. D'Agostino. [continuing]. Yes ma'am, I'd be glad to do 
that, I will look forward to it, thank you.
    Senator Feinstein. Thank you.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Feinstein, thank you.
    I think that might be a good idea, I'm interested in this 
issue of deployed weapons, versus total weapons, and the 
circumstances surrounding that, weapons spares, et cetera.
    Mr. D'Agostino. Yes, sir.
    Senator Dorgan. And I think that is most appropriately 
discussed, I think, in a classified setting.
    Senator Domenici, did you have other questions you wish to 
ask?
    Senator Domenici. First I want to say to the members of the 
subcommittee that are here, and in particular, Senator 
Feinstein, that it is quite amazing, as a Senator, to be able 
to say in the record this afternoon that great issues like the 
one we are discussing are frequently done without a lot of 
television, via a hardworking subcommittee. I'd say this one 
works hard, it couldn't produce anything if it didn't, it's so 
complex, unless we just abdicated to someone and said, ``We 
don't want to do anything,'' and your questioning indicates to 
me that you can join in a discussion that is predicated upon 
good sense of the past, and some good thinking about the 
future, even if it's in the most complicated, and almost 
horrific context, that has to do with building nuclear weapons 
and dismantling and destroying them.
    I do want to say to you that someone like me whose age you 
would just have to guess, because I'm in such great shape, 
nobody knows I'm a very old man, and people think I'm 55--
pretty good, right? But, what I wanted to say to you, whatever 
generation I came from, I had the same recollection of the 
bombs, and I learned an awful lot more about it by being not 
too far from Los Alamos for my childhood.
    When we used to drive to Los Alamos as a family, in our 
family car, just for the pleasure of being turned down by the 
armed guards at Los Alamos who would tell this wonderful little 
American family, ``Well, you can go no further, make a U-turn 
and go home.'' And we used to all wonder in our car, and talk 
with my dad, who had only a fourth grade education, about all 
of the things we imagined that were going on behind that high 
wall. That was it, that was the central focus for all of the 
building that has occurred since then, that you are aware of.
    I then involved myself very deeply in the next phase around 
here, which had to do with stopping testing, underground 
testing, unless the American future was at stake. And, I 
learned all I could about that, and for the first time, in 
spite of my great friend Sam Nunn, who just called me yesterday 
for a wonderful, ever-so-often conversation, if I had that I 
would have asked him about it, but I forgot. Because we agree 
on most things, but I would ask him if he would sit down with 
me, and discuss the alternatives, which I think he must do. 
Because his voice is too loud to remain unfettered, he must 
tell us what he will do, if he won't do this.
    Because that's going to end up being the question--if we're 
not going to do this, in terms of a dismantlement and change, 
what are we going to do? Are we going to leave this stockpile 
as our legacy, this one, and say, ``We just hope we never have 
to test.'' I don't want to do that, because I feel kind of 
confident that this subcommittee could make a good decision. 
And I think we ought to make the decision, not leave it for 10 
years from now, when somebody will make it secretively, and 
you'll hear about it as a puff out there in Nevada, because we 
can't tell the world what we did.

                 MIXED OXIDE FUEL FABRICATION FACILITY

    Now, having said that, I wanted to ask you about MOX, and 
the facility--how is it coming, and if we budget what the 
President asks for, where will we be? Whose got MOX?
    Mr. D'Agostino. Well, I'm going to ask Mr. Tobey to comment 
on that, and I can follow through.
    Mr. Tobey. Senator, as you probably know, we are ready to 
start construction after August 1 of this year. We're eager to 
do so, we believe it's an important program. It's consistent 
with U.S. national security and nonproliferation interests. We 
would aim to have the facility complete by 2016, and to operate 
it for at least 15 years thereafter.
    Senator Domenici. What is it going to do, so we'll all have 
on the record--we're going to build this building and do 
something, what are we going to do?
    Mr. Tobey. In the first instance, we will dispose of at 
least 34 metric tons of U.S. plutonium access to defense needs.
    Senator Domenici. Where did we get that?
    Mr. Tobey. Pardon me?
    Senator Domenici. Where did we get that?
    Mr. Tobey. From the dismantlement of weapons.
    Senator Domenici. Our own?
    Mr. Tobey. Yes sir. And it will also, it is part of an 
agreement with Russia under which Russia would also dispose of 
34 metric tons of weapons-grade plutonium.
    Senator Domenici. And I'm very glad to say, as a member of 
this subcommittee, I had something to do with that. In fact, I 
sat over there in Russia, with the President of the United 
States, seeing if they would agree. They agreed, and it took 3 
more years before we could get started. Now, we have people 
saying, we shouldn't build in the United States--shouldn't 
proceed in the United States.
    I knew all the answers that I, questions I asked, but it's 
absolutely impractical to me to have a facility that over the 
ages, we could not build because of political problems. It 
approved on all sides, and then the Russians agree to dismantle 
and deliver the equivalent of 34 tons of plutonium to be run 
through a MOX facilitating plant to produce mixed oxide fuel. 
That's what it is, isn't it?
    Mr. Tobey. Yes, sir.
    Senator Domenici. Where it gets its name--that's going to 
be reusable, isn't it?
    Mr. Tobey. Yes, it would become fuel for U.S. reactors.
    Senator Domenici. Fuel for U.S. reactors----
    Mr. Tobey. With significant value.
    Senator Domenici [continuing]. And we have people not 
wanting to do it. I wonder what they would want to do with the 
residual that is high-flying plutonium. And we get to run it 
through this piece of equipment, and it changes from that to 
something much less maligned than its current status, is that 
right?
    Mr. Tobey. Yes, sir, it is. There are no good alternatives, 
certainly none that would provide the nonproliferation 
benefits. And frankly, simply continuing to store the material, 
using 50-year life cycle costs, is the most expensive thing we 
could do with it.
    Senator Domenici. You got it.
    Mr. Tobey. And, given that the half-life of plutonium is 
24,000 years, it's not unreasonable to use a 50-year life cycle 
cost standard.
    Senator Domenici. I thank you very much, and I want to say 
to the chairman that I would like to join in a more in-depth 
briefing if you would like that, and of course, the Senator 
from California wants to do that, and I would like to go with 
you so we don't have to do it twice if you think that's a good 
idea.
    Senator Dorgan. Senator Domenici, I think what we will do 
is arrange a classified briefing and invite members of the 
subcommittee to it, so that we can have a fuller discussion in 
a classified setting of all of these issues.
    Mr. Tobey. Yes, Mr. Chairman.
    Senator Dorgan. Senator Reed. I have no further questions.
    Senator Reed. Thank you very much, Mr. Chairman.

                      RELIABLE REPLACEMENT WARHEAD

    I want to just cover some specifics. I think the questions 
have been asked, but I just want to nail things down. We're in 
phase 2A right now in the RRW, when do you anticipate 
requesting permission from the Nuclear Weapons Council and the 
Congress to start phase 3?
    Mr. D'Agostino. Senator, I'd expect it'll take us 9 to 12 
months to finish this phase 2A activity, probably putting us in 
the January/February timeframe of next year, roughly. Then we 
would take that decision to the Nuclear Weapons Council. I sit 
on the Nuclear Weapons Council with Mr. Krieg and others from 
the Defense Department.
    We will look at that phase 2A study. In particular, we will 
look at what it does to what we call the nuclear weapons 
stockpile memorandum. This is a memorandum the President 
ultimately signs and sends over to Congress, which provides the 
details on the size of the stockpile. And, I think what I--not 
only do I believe as a matter of course, but I think it's 
important for this Congress is to understand how RRW drives the 
size of that and provides the details of the stockpile.
    We will have a vote within the Nuclear Weapons Council on 
whether to move forward on what we call phase 3, which is a 
little bit of a development phase, or design development phase, 
where we would do some engineering work. We would run more 
calculations, maybe do some materials tests, so that would be 
later on next year.
    Senator Reed. Later on, being July, June, August--just to--
--
    Mr. D'Agostino. We're having our first meeting with the 
Navy out at Lawrence Livermore on May 1, so I'll have a 
schedule, probably in another 2 months that I can come talk to 
you about, sir.
    Senator Reed. Just, specifically, and you've already, I 
think, answered this in response to other questions--the RRW 
design is a new warhead, will be a new warhead, correct?
    Mr. D'Agostino. It is a new design for an existing warhead. 
I'm not a lawyer, but it's an existing military capability. 
It's a replacement warhead, but it's a new design for that 
warhead.
    Senator Reed. The warhead is the one for the Navy program, 
the D-5 missile program?
    Mr. D'Agostino. It's to replace the W76, that's right, sir.
    Senator Domenici. Senator?
    Senator Reed. Yes, sir.
    Senator Domenici. Can I ask you if you would do me a favor?
    Senator Reed. Yes, sir.
    Senator Domenici. Out in the audience are 10 trainees from 
the NNSA Training Program, Mr. D'Agostino, it's your training 
program for students from up in your country?
    Mr. D'Agostino. Yes, Senator, they are what we call Future 
Leaders. The average age in the NNSA is close to 50 years, and 
we recognize that we need to train and bring in the best folks 
we can, similar to the model that Admiral Rickover and Admiral 
Donald go off and interview and bring in bright people, bring 
new ideas into the organization. Ten of them are here, sir.
    Senator Domenici. Could they stand up?
    Mr. D'Agostino. Sir.
    Senator Domenici. Mr. Chairman, I greatly appreciate you 
permitting us to do this, and could I just welcome them, thank 
you for coming, and we hope you have a good time.
    Mr. D'Agostino, thank you for being so cordial to them.
    Mr. D'Agostino. Thank you, sir. I appreciate it, it's good 
to see them here. I appreciate having them here.
    Senator Dorgan. All of us welcome you, and we hope that 
you've enjoyed the subcommittee hearing, and we appreciate your 
service to our country by serving in public service, which is a 
very honorable and important thing to do. So, we welcome you 
here.
    Senator Reed.
    Senator Reed. I think a critical question here, with 
respect to RRW is the issue of testing. Is it a specific 
objective of the program to be able to eliminate the need for 
testing in the future? Yes or no, is that going to be a 
specific objective?
    Mr. D'Agostino. I want to be very precise in my answer, I 
think it's a little bit more difficult than a yes or no. But, 
here's what I'm going to say--we will not move forward with 
RRW, if it requires a test to certify that warhead. That is not 
something I would recommend to the Nuclear Weapons Council. It 
would be a long discussion in the Nuclear Weapons Council 
before that happened.
    Now, we do assess, on an annual basis, our stockpile for 
testing. I can't predict what might happen 40 years from now, 
as that warhead ages, but that's not, my view, is not moving 
forward.
    Senator Reed. Because Admiral Donald's been so cooperative, 
he never gets asked a question.

                           NAVY HOME PORTING

    Admiral Donald--how does your Office of NAVSEA and the 
Department of Energy participate in the overall EIS process for 
Navy home porting changes for potential additional submarines 
for Guam? In 20 words or less.
    Admiral Donald. Yes, sir, we participate with the Navy 
anytime there's an environmental impact statement or a home 
port change or a significant--potential significant impact to 
the environment. We participate as part of that team, obviously 
with concerns about the facilities that may be needed to 
support the nuclear-powered ships in the area, obviously with 
our environmental record, that subject is a matter of public 
record as well. And that's part of that consideration should 
that, any expansion be required in that area.

               NONPROLIFERATION RESEARCH AND DEVELOPMENT

    Senator Reed. Thank you, sir. The chairman's been very 
kind, but I have one additional question, Mr. Tobey. You might 
want to take this for the record, because we, we talked about 
this before, I think, in the Armed Services Committee, which 
is--if additional funding were available for nonproliferation 
research and development, how would you use it? And--would you 
like to take that one back and send us a note, or----
    Mr. Tobey. I think I actually would like to answer that, if 
that's all right, Senator?
    If the Congress appropriated, and the President signed 
additional funding for research and development, I think we 
would direct that funding toward greater efforts on 
radiological detection. That's a critical effort that will 
support our abilities across the board, as you may understand, 
and as we've discussed. We're moving our efforts from those 
that are concentrated mainly on the former Soviet states, to 
threats that are originating elsewhere, and also from the 
immediate facilities that house nuclear weapons and material 
where our work is coming to closure, to being more vigilant on 
borders, and in other places.
    And, in order to meet the emerging threat, we do need to 
work on radiological detection, we are working on radiological 
detection, and the President's budget does support that. But, 
that would be an area of additional interest.
    Senator Reed. Thank you very much.
    Thank you, Mr. Chairman, you've been very kind.
    Senator Dorgan. Senator Reed, thank you very much.
    These are--as I indicated when I started--very complicated 
issues. And I have tried very hard to meet with a lot of 
people, study these issues, try to understand these issues in 
recent months. And there's a lot to know, and a lot to 
understand, and many answers that you don't have, Mr. 
D'Agostino, and I don't have, and Senator Domenici doesn't 
have--but we have to try to, as best we can, think through 
these issues, in the context of what is in the best long-term 
interest of this country.
    The survival of this planet, I think, depends on our 
getting these things right. We've been very lucky that for 60 
years, we have not had another nuclear weapon used in anger. 
Because once one is, a planet in which there are 15,000 to 
20,000 nuclear weapons, and the release of them back and forth, 
this civilization will cease to exist, at least as we know it.
    I said earlier, at another hearing, that I very much 
opposed and felt it reckless for those at a time, who talked 
about the potential use of nuclear weapons, the need to build 
new nuclear weapons, the need to build designer nuclear 
weapons, the need to be able to burrow into caves and create 
bunker busters, and some talked about nuclear weapons were 
simply another weapon, and they were usable, were needed to be 
used under certain circumstances, I view that as pretty 
reckless, and pretty troubling, personally.
    Because there are a lot of nuclear weapons that exist, and 
because our country has signed up to a treaty that says we 
agree to some sort of goal at some point, not described with 
respect to time, that we would like to abolish nuclear weapons. 
Because of all of that, I mean, the question for all of us now 
is how do we reach into the future, and describe a future 
without nuclear weapons, or at least moving toward the 
reduction of nuclear weapons?
    I want to just tell you, I read a book awhile back that 
describes something I'd previously read in a--I believe, Time 
or Newsweek, about October 11, I believe it was exactly 1 month 
after September 11, 2001. A time during which a CIA agent code 
named Dragon Fire reported that a small, I believe 10 kiloton, 
at least, a small Russian nuclear weapon had been stolen, and 
had been smuggled into either New York City or Washington, DC, 
by terrorists, and was to be detonated in a major American 
city. That didn't hit the press, was not a part of a public 
story, but for about 1 month, at least, there was great, great 
concern about whether or not that report was accurate.
    It was later discovered to have not been an accurate 
intelligence report, but in the post-mortem, the evaluation was 
that it was perfectly plausible, that perhaps someone could 
have stolen a 10 kiloton nuclear weapon. Perhaps, if stolen, 
and gotten by a terrorist organization, it was plausible that 
it could have been smuggled into an American city, and 
plausible that such a weapon could have been detonated. And 
then we wouldn't be talking about several thousand casualties, 
we'd perhaps be talking about several hundred thousand 
casualties.
    That is the angst about the potential loss of, or stealing 
of one nuclear weapon. One. There are about, we believe, 20,000 
on this Earth. I think the survival of our planet depends on 
our getting all of this right--we've been very lucky for 60 
years. Maybe we'll be lucky for the next 600 years, I don't 
know.
    We have, in fact, a Stockpile Stewardship program in this 
country, that goes on, has gone on for some while. That means 
that we work on the weapons that exist, to make sure that they 
are weapons that are available in the event that we were 
threatened as a country, so there's nothing new about stockpile 
stewardship, about people in your organization that routinely 
do this kind of work.
    The RRW program, my colleague from California raises 
definitional questions, I don't know the answers to those. I 
think the discussions that will continue now in the early 
stages of this program, we'll try to find those definitions, 
and try to think through--what are the consequences, Senator 
Domenici asked, what are the consequences of not proceeding? 
Senator Feinstein would ask, what are the consequences of 
proceeding? That's the sort of thing, it seems to me, that this 
country needs to grapple with as a set of policies.
    Senator Domenici today has said that--and he showed me the 
letters--that he has written to the Secretary of State, 
Secretary of Defense, and one other--and I think, this is--as 
I--the reason I describe all of this at the end of this 
hearing, is this is not just some other issue. Senator Domenici 
is right--this subcommittee has in its lap some very serious 
questions to answer.
    You, Mr. D'Agostino, run an organization that is very, very 
important, and also needs to get this right, working with us to 
get it right, and I've said previously, with some of the folks 
who have appeared, I'm impressed with the quality of some of 
the folks who have come to public service, I'm very impressed, 
Mr. D'Agostino, with your willingness to sit with us----
    Mr. D'Agostino. Thank you.
    Senator Dorgan [continuing]. You and I have had a chance to 
visit on a couple of occasions, and have traveled to New Mexico 
to Sandia. I thank you for serving our country.
    I'm not sure how I come out on all of this at this point. 
I'm trying to understand it all, it's very complicated. And I 
don't think my colleague, Senator Domenici, would allege it's 
simple at all----
    Senator Domenici. Oh.
    Senator Dorgan [continuing]. It's very complicated, for 
everybody on all sides.
    But I pledge that I, and I think all members of this 
subcommittee want to try to find a way to get to the right 
answer here on these issues. Because I think the survival of 
the planet, at some point, I don't think it's expressing it too 
starkly--depends on our doing the right thing.
    And, so I want to thank the witnesses for coming. Mr. 
Tobey, thank you, you have a very important part of this. I'm 
going to submit to you some questions, and Mr. D'Agostino, I'm 
going to submit some additional questions to you.
    Mr. D'Agostino. Sure.
    Senator Dorgan. Admiral, thank you for your service.
    And, let me again, to the new leaders, say to you--I think 
public service is an unbelievable honor. Those of you who come 
to Government and say, ``I want to be a part of this,'' thanks 
for doing that, and it's nice to see an agency that worries 
about the future. I think it's sort of crass and unbelievably 
inept of you, Mr. D'Agostino, to define 50 years of age as old.
    Mr. D'Agostino. I apologize.
    Senator Dorgan. But, we welcome to those of you, if you 
choose to have them, it does you no service on this 
subcommittee, does it?
    But in any event, thanks for being worried about renewal 
for those old codgers who are nearing 50.
    Mr. D'Agostino. I don't have much hair.
    Senator Dorgan. Senator Domenici, thank you, and let me 
thank the witnesses, this hearing is recessed.
    Senator Domenici. Mr. Chairman?
    Mr. D'Agostino. Thank you, Mr. Chairman.
    Senator Dorgan. Yes?
    Senator Domenici. I just want to say, and then you 
certainly are welcome to comment, you used the word that we 
have been ``lucky'' for the last 60 years, I think you really 
mean, we have been fortunate. We have not been lucky--we have 
spent more brain power of the highest quality, and more money, 
if money means anything, than on any other issue or program 
that has to do with military, we've spent more on nuclear 
weapons and the defense that goes with them, and defending from 
them, and making sure they're never used. Because most of what 
we spend money on is to make sure nobody uses them, because 
they know they can't use them, because they know for absolutely 
for certain, that it would be a useless gesture. We spend much 
on that. And there's much to learn from how well we've done as 
we move ahead with what we contemplate in the future.
    And I know what you meant, and you know what I meant. I 
sounded flippant a couple of times, in speaking about Sam Nunn, 
I didn't intend to be, and you don't intend to be, and use any 
of the words here, they're all most difficult.
    Senator Dorgan. No, I think, but I use the word luck for 
this reason. I think in 1945 had someone said, ``You know what? 
We're going to build thousands of additional nuclear weapons, 
thousands of them, and by the way, in the next 62 years, none 
will be used in anger, that's going to require some 
unbelievably good work, and a little luck.''
    Senator Domenici. You got it.
    Senator Dorgan. I think most people would believe that to 
be the case.

                     ADDITIONAL COMMITTEE QUESTIONS

    The subcommittee will submit the balance of the questions 
for your response in the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
            Questions Submitted to Hon. Thomas P. D'Agostino
            Questions Submitted by Senator Pete V. Domenici

                              COMPLEX 2030

    Question. Mr. D'Agostino, Last year GAO reviewed the NNSA's Complex 
2030 and had several recommendations that NNSA address as part of its 
$1.5 billion transition plan. The GAO was critical of the NNSA decision 
to proceed with a plan, without knowing the military requirements for 
the stockpile.
    GAO recommended that DOD should provide clear, long-term 
requirements for the stockpile, including quantity, type and mission. 
Based on this information NNSA could then develop cost estimates based 
on the military requirements and then develop a transformation plan to 
support the preferred stockpile.
    Mr. D'Agostino, it appears that without the Department of Defense 
requirements it would be tough to develop an accurate or precise 
transformation plan.
    Has the Department of Defense provided its long-term requirements 
for the stockpile? What about pit capacity and future RRW requirements?
    Answer. The President defines the size and composition of the 
nuclear weapons stockpile by his Nuclear Weapons Stockpile Plan (NWSP), 
which is reviewed annually. The official requirements documents, such 
as the NWSP, may lag expectations relative to the size and composition 
of the future stockpile. Consequently, our transformation plans must be 
sufficiently robust to cover a realistic range of future requirements.
    With the President's commitment to achieving the smallest possible 
stockpile size consistent with national security, future production 
requirements are likely to support a much smaller stockpile. In 
evaluations led by the Department of Defense, we have established a 
range of possible stockpile scenarios that bound the most likely threat 
environments of the future. For each scenario, we have determined 
warhead production capabilities and capacities, including the 
manufacturing quantities needed for plutonium and highly enriched 
uranium components. Thus, the range of possible scenarios provides 
bounds for production capabilities and capacity ranges that we might 
need in the future. The capabilities to design, certify, and produce 
Reliable Replacement Warhead (RRW) concepts and to manufacture 125 
(net) pits per year are consistent with these evaluations.
    As warhead quantities are reduced, it is important to recognize 
that defining future capability requirements becomes more important 
than specifying capacities. We must have a given capability (e.g., 
manufacturing uranium parts with specific characteristics) regardless 
of whether we are making one or several hundred warheads. We frequently 
find that the capacity provided by the mere existence of a specific 
capability is sufficient to provide quantities needed to support a 
small stockpile. For example, a new plutonium facility designed 
according to modern lean manufacturing, safety, and security practices 
could have a minimum capacity in the range of 125 RRW pits per year and 
a lower value for legacy pits. Reducing the design capacity further 
would not result in significant reductions in facility square footage 
or cost. However, eliminating a specific capability requirement reduces 
the floor-space and fixed-cost for maintaining that capability in a 
state of readiness. One benefit of an RRW approach is that fewer 
challenging or problematic capabilities must be maintained when 
compared to legacy systems, thus, enabling better optimization of the 
Complex in the long-term.
    Question. Without the DOD requirements, how has the NNSA adopted 
the transformational plan? What if one or more of the elements such as 
the RRW isn't implemented?
    Answer. We need to transform the nuclear weapons complex 
infrastructure whether we proceed with Reliable Replacement Warhead 
(RRW) concepts or retain legacy designs. However, RRW concepts enable 
better optimization of the Complex in the long-term because some 
specific capabilities (e.g., beryllium component production) do not 
have to be retained. A primary objective of nuclear weapons complex 
transformation is to establish a responsive infrastructure capability 
that is sustainable and cost-effective for the long-term. There are key 
capabilities that must be present to meet this objective. The Complex 
must have functional capabilities to: (1) design, develop, and certify 
nuclear weapons; (2) manufacture and surveillance of plutonium 
components; (3) manufacture and surveillance of uranium components; (4) 
produce and manage tritium; (5) manufacture and surveillance of non-
nuclear components; (6) assemble and disassemble nuclear weapons and 
components; (7) storage and transport of nuclear weapons and material; 
and (8) provide the science, engineering, and technology essential to 
our nuclear deterrent and our ability to respond to technological 
surprise. In the absence of detailed projections of stockpile size and 
composition for future decades or without an RRW, transformation plans 
must be sufficiently robust to cover a realistic range of future 
requirements.
    Question. Have you reviewed the GAO findings and how has this 
changed your strategy as a result?
    Answer. The Government Accountability Office (GAO) findings in 
Views on Proposals to Transform the Nuclear Weapons Complex (GAO-06-
606T) reiterated that decisions regarding nuclear weapons complex 
transformation must be based on good information. We concur and thus 
the GAO findings have not changed our strategy. Specific findings 
identified four actions that the GAO felt were critical to successful 
transformation:
  --Clear long-term requirements from the Department of Defense (DOD) 
        for the nuclear stockpile.
    The National Nuclear Security Administration has been working 
jointly with the DOD to establish a range of possible stockpile 
scenarios that bound the most likely threat environments of the future. 
For each scenario, we have determined required warhead production 
capabilities and capacities, including plutonium and highly enriched 
uranium operations with some sprint capacity. This set of possible 
scenarios bounds the range of production capacities that we might need 
in the future to plan proposed production facilities. Given that 
stockpile projections will never be exact or remain stable for decades 
into the future, bounding future estimates of required production 
capabilities and capacity ranges are sufficient.
  --Accurate cost estimates of the proposals for transforming the 
        weapons complex.
    We have undertaken a process in compliance with the National 
Environmental Policy Act before issuing a Record of Decision containing 
specifics for the plan to transform the physical infrastructure of the 
Complex. Transforming the physical infrastructure is costly and impacts 
other transformation actions. Cost estimates of the alternatives for 
transforming the weapons complex are being prepared in parallel with 
the ongoing preparation of the Complex 2030 Supplement to the Stockpile 
Stewardship and Management Programmatic Environmental Impact Statement 
(PEIS). Business case studies are progressing concurrently with the 
PEIS, which are considering life cycle costs, decontamination and 
demolition costs, present worth analyses, cash flow analyses, 
qualitative analyses, and comparative costs. These business case 
studies will be instrumental in determining the course of action to be 
chosen in the late 2008 Record of Decision.
  --A clear transformation plan containing measurable milestones.
    We are committed to establishing annual ``Getting the Job Done'' 
lists and multi-year Complex 2030 transformation progress measures. 
These represent measurable milestones that are meaningful to 
stakeholders. However, a number of the progress measures of greatest 
interest to stakeholders are dependent on the Complex 2030 Record of 
Decision to be released in late 2008.
  --An Office of Transformation with the authority to make and enforce 
        its decisions on transformation.
    In order for transformation to be successful, new approaches must 
be firmly anchored in the culture of the entire enterprise. This means 
implementing line organizations and programs must own the new 
approaches to ensure changes are sustainable and will outlast any 
single office. The Office of Transformation, which was established in 
June 2006, is my agent of change within the National Nuclear Security 
Administration (NNSA) for nuclear weapons complex transformation. It is 
establishing transformation implementation strategies and ensuring 
ownership of changes by existing line organizations. While the Office 
of Transformation has my full support, I am the one responsible for 
seeing that the commitments we make to transformation are implemented. 
I have the authority to make and enforce decisions on transformation.
    Let me clarify one comment about the cost of transformation. There 
is no $1.5 billion transition plan in our documents or the April 2006 
GAO report. Some media and non-governmental organizations have 
incorrectly quoted a November 2006 GAO report estimating a total $150 
billion cost of the NNSA nuclear weapons enterprise over the next 25 
years as equal to the cost of transformation. NNSA plans to achieve 
transformation to Complex 2030 through existing programs and management 
structure, and within projected funding levels. If major new facilities 
are justified, incremental funding requests for capital projects will 
be supported by business case analyses.

                 CLOSING LOS ALAMOS NATIONAL LABORATORY

    Question. Some Members of Congress have suggested closing LANL. It 
strikes me that this would be contrary to our Nation's national 
security needs and unachievable based on the LANL mission 
responsibilities.
    It's no secret that I am a supporter of our national laboratories 
and I believe we should continue to take necessary steps to improve the 
safety and security at the labs--as well as make the necessary 
investments to continue to support world class scientific research.
    Mr. D'Agostino, can you detail for us why we need LANL and what 
role they play in our national security.
    Answer. From a National Nuclear Security Administration (NNSA) 
perspective, Los Alamos National Laboratory (LANL) is responsible for 
the majority of warheads in the nuclear weapons stockpile. Personnel at 
the laboratory are intimately involved with the maintenance, 
surveillance, and assessment of the warheads designed at LANL. LANL 
plays a key role in the annual assessment of the safety and reliability 
of the nuclear weapons stockpile, in the absence of nuclear testing. We 
are presently still tied to our underground test data for our legacy 
systems. Advances in science and technology enable a Reliable 
Replacement Warhead (RRW) strategy and will provide a future predictive 
capability for legacy and RRW-type systems; LANL is critical in the 
advance of our science and technology base. The experienced staff and 
the premier facilities at LANL are key to our nuclear weapons program. 
LANL also contributes to other aspects of national security such as 
threat reduction and support to the Department of Defense and the 
Department of Homeland Security and analysis of intelligence 
information. Overall, LANL is a critical contributor of science and 
technology that underpins U.S. national security.
    Question. Can you also elaborate the practical impacts to science 
and research if we were to shut down the lab and divide up the 
workforce?
    Answer. Los Alamos National Laboratory (LANL) continues to have a 
critical role in the National Nuclear Security Administration (NNSA) 
science and research program through its people and facilities. Closing 
LANL would seriously damage the science and research for the Stockpile 
Stewardship Program.
    People can be encouraged to move but a move cannot be mandated. 
With the demographics of the designer community, it is likely that we 
would lose the majority of the remaining experienced designers. In 
addition, we will also loose experienced staff in other LANL areas of 
key technical expertise: weapons materials and chemistry support for 
the complex, nuclear physics, and computational science.
    Within the areas of defense science and research, LANL provides at 
least three major and unique elements required for Stockpile 
Stewardship: neutron cross-sections to reduce uncertainties in nuclear 
weapon performance calculations; radiography to assess implosion 
performance; and an integrated plutonium production and research 
facility. LANL's Los Alamos Neutron Science Center (LANSCE) is a multi-
purpose facility that supports materials research and hydrodynamics 
research through proton radiography and neutron scattering in a 
classified environment. This is unique in the complex and has supported 
Reliable Replacement Warhead (RRW) designs already, as well as 
supporting improved understanding and predictive capability for legacy 
as well as RRW designs. LANSCE also supports basic neutron science 
through the Lujan Center. The Dual Axis Radiographic Hydrodynamic Test 
(DARHT) Facility is a unique radiographic facility and, when the second 
axis becomes available with multi-pulse capability, DARHT will be 
unique in the world. The multi-axis and multi-pulse capabilities of 
DARHT will significantly enhance our understanding of the implosion 
phase of nuclear weapons, especially as we assess the legacy systems or 
implement improved safety and surety features without nuclear testing. 
The plutonium complex at LANL has an integrated research capability to 
support the pit manufacturing activities. Such capabilities could not 
be replicated somewhere else without a severe loss of capability and a 
decade gap in restarting the operations. Superblock, which NNSA is 
presently committed to move out from, does not have the capacity to 
take over all TA-55 functions.
    In addition, LANL has numerous smaller scale research and 
development (R&D) capabilities required for Stockpile Stewardship, 
responding to emerging threats, and advancing science broadly for 
national security. Among these are the capability for classified 
beryllium manufacturing R&D, plutonium-238, high explosives chemistry, 
actinide chemistry, uranium R&D, and tritium R&D. LANL is an 
international leader in criticality science and its applications in 
safety, materials transportation and detection. LANL makes significant 
contributions in astrophysics, climate analysis, biology and forensics. 
Shutting down LANL and reassigning people would have an immediate and 
possible irreparable impact on the nuclear weapons program and, to a 
lesser degree, the broad national security science infrastructure.

                      RELIABLE REPLACEMENT WARHEAD

    Question. As you know, I was hopeful that the New Mexico RRW design 
team would be named the lead design. However, that was not the case. 
You selected the Livermore design based on several criteria, but it was 
clear that avoiding underground testing was a key driver in your 
decision.
    As an original sponsor of the RRW design competition I continue to 
support the project as it is vital if we are to transform the stockpile 
to a significantly smaller stockpile that is cheaper and safer to 
maintain.
    Your budget provides $88 million for the RRW program. Can you 
please tell me how this funding will be spent and how this will support 
a Congressional decision to proceed with the engineering design 
authorization next year?
    Answer. The fiscal year 2008 request funds the Reliable Replacement 
Warhead (RRW) Phase 2A study. The National Nuclear Security 
Administration's (NNSA) intent is to develop high fidelity baseline 
schedules and cost estimates. The laboratories will further refine the 
concept design and work with the plants concurrently during the Phase 
2A study to support a sound planning effort. This activity will 
include: some revising and extending of the selected design, analyzing 
and scheduling the required development work, planning and executing 
any required peer reviews, developing the detail cost estimate. As and 
example the certification plan will be prepared in detail including 
identifying and scheduling the hydrodynamic experiments required and 
computational analyses necessary for certification. Some computations 
and potentially some technology tests will be performed during the 
study to assure that the project scope is correctly assessed. NNSA will 
return to Congress at the appropriate time to seek both authorization 
and appropriations to proceed into the engineering development phase, 
if the Nuclear Weapons Council decides to proceed with development of 
the RRW.
    Question. Can you tell me what role Los Alamos will play in the RRW 
design and how they will be integrated into the project?
    Answer. Los Alamos National Laboratory (LANL) will lead the 
independent peer review team for the Reliable Replacement Warhead (RRW) 
and participate in development of technologies and advanced science 
analysis for potential insertion in the future stockpile. Until a long-
term pit manufacturing capability is in place, the pit manufacturing 
facility at LANL will implement the manufacturing process for the RRW 
pits eventually manufacture them during Phase 3A.

                COMPLEX 2030--FACILITIES BEFORE SCIENCE

    Question. Mr. D'Agostino, I am deeply concerned about the funding 
profile for the Science and Technology accounts within the NNSA.
    It is clear from recent budget requests that the NNSA has put more 
emphasis on facilities and security than on supporting the science 
based stockpile stewardship activities.
    However, considering the fact that the Complex 2030 transformation 
is based around the Reliable Replacement Warhead, I believe this 
warrants more scientific research in order to develop the weapon system 
without underground testing.
    The JASONs study group, which is undertaking a review of the RRW 
design, found that, ``though we see no insurmountable obstacles to 
certification of the RRW at present, there are substantial scientific 
challenges to developing a new stockpile system . . .''
    Mr. D'Agostino, how can you meet all the life extension 
responsibilities for existing weapons systems and support the RRW 
program with declining science and technology budgets?
    Answer. The current Life Extension Programs for the B61 and W76 are 
either in the production phase or entering into the production phase at 
the end of this fiscal year. The research for these existing life 
extensions is largely complete. The National Nuclear Security 
Administration strategy provides that Nuclear Weapons Council (NWC) 
approved Life Extension Programs would continue as directed, but 
Reliable Replacement Warhead (RRW) programs would be developed to 
replace legacy Life Extension Program efforts. In the science and 
technology arena, we are committed to the work required to support the 
stockpile and to develop predictive capabilities. We are at a period 
where we are completing the construction of major science facilities, 
and the associated development and construction costs are decreasing. 
We are moving to exploit these new facilities to advance the science 
and technology base for the program. However, we believe that we can do 
more within the present planned budgets by integrating our science and 
technology efforts across the laboratories, for example: ensuring 
access to the premier facilities and computational capabilities and 
developing integrated science and technology roadmaps. The broader 
science and technology needed to support the health of our nuclear 
weapon design and production can be augmented via enhanced integration 
with other agencies, and broader interaction with the general 
scientific community. The Complex would then be operated in a more cost 
effective manner. The combination of these factors (replacing life 
extensions with RRW, reductions in construction costs, and integration 
of resources) should allow us to meet needs within decreased science 
and technology budgets.
    Question. Can you please provide for me in writing your science and 
engineering R&D plan for the next 5 years that will answer the 
technical questions surrounding the RRW program and show me where this 
plan is financed in our budget?
    Answer. Science and engineering research and development (R&D) 
necessary for fundamental support of Weapon Activities as well as 
direct support of the Reliable Replacement Warhead (RRW) program is 
programmed within Defense Programs' Campaign structure. The Science, 
Engineering, Inertial Confinement Fusion Ignition and High Yield, and 
Advanced Simulation and Computation Campaigns together comprise about 
$1.42 billion in the fiscal year 2008 budget, while an additional $0.44 
billion is requested for addressing manufacturing and production 
readiness in the Readiness and Pit Manufacturing and Certification 
Campaigns. The basic R&D activities within each Campaign are described 
in the fiscal year 2008 budget request, consistent with the Program 
Plans maintained for each of the six Campaigns. Collectively the R&D 
activities that the Campaigns undertake are described in the fiscal 
year 2007-2011 Stockpile Stewardship Plan. As a relevant technology 
becomes more mature and the technical questions more unique to the 
specific weapon, the effort shifts to Directed Stockpile Work and the 
RRW program.
    An integrated planning effort by the program efforts above, the 
predictive capability framework, is ongoing to ensure timely delivery 
of science and technology to the program. The end goal of a predictive 
capability for nuclear weapons should in of itself increase efficiency 
by ensuring validated models that can be applied to all systems to 
increase confidence and decrease the repeat work frequently done system 
by system. The predictive capability framework plan will be completed 
this fiscal year. Due to the complexity of these activities, some of 
the scientific advances cannot be completed in time for the first RRW 
certification process, but the first RRW is designed to have sufficient 
margin and tie to nuclear test history to offset the higher 
uncertainties.

                 INSUFFICIENT FUNDING FOR Z OPERATIONS

    Question. In the fiscal year 2007 NNSA budget, hearing last year 
Ambassador Brooks promised that I would be pleased with the funding 
provided for Z machine--I am not pleased. This budget continues to 
support past practice of providing everything and more for NIF, while 
providing insufficient funding for Z.
    This budget continues funding Z from three separate accounts and 
fails to fully fund operations at a full shift. This is in direct 
contrast with the priorities of the Office of Science budget, which 
makes operational runtime a top priority.
    (NNSA provided $26 million to High Average Power Laser R&D in 
fiscal year 2007, which NNSA admits has little to no bearing on the 
weapons program)
    Why does the Department continue to play games with the Z budget 
when it funds projects like the High Average Power Laser program that 
does not support the weapons program?
    Answer. The National Nuclear Security Administration (NNSA) has 
requested $63.9 million for operation and use of the Z Facility at 
Sandia National Laboratories (SNL) in fiscal year 2008. These funds are 
provided for activities in pulsed power fusion and other areas of high-
energy-density weapons physics. This amount of funding will enable a 
solid program of experiments which meets high priority NNSA 
requirements as defined in joint plans developed by the Science, 
Inertial confinement Fusion Ignition and High Yield, and Advanced 
Simulation and Computing Campaigns. Compared to the fiscal year 2007 
request, funding was shifted from other activities in fiscal year 2008 
to increase funding for Z activities to this level. Requested 
enhancements of the SNL pulsed power program beyond this level were 
carefully considered, but determined to be of insufficient priority for 
funding based on program requirements.
    NNSA allocated $26 million to Inertial Fusion Technology for these 
activities ($10 million for the Nike laser at the Naval Research 
Laboratory and $16 million for the High Average Power Laser (HAPL) 
program) in the fiscal year 2007 Operating Plan submitted to Congress 
on March 16, 2007. No funds are requested for the Nike or HAPL 
activities in the fiscal year 2008 budget request due to the need to 
fund higher priority activities.
    Question. Why does the Department continue to fund Z from 3 or more 
accounts, when NIF is funded from a single account (Inertial 
Confinement Fusion)?
    Answer. Funding for the Z facility at Sandia Laboratories is 
currently provided from three different accounts: Readiness in 
Technical Base and Facilities (RTBF), the Inertial Confinement Fusion 
(ICF) program, and the Science Campaign. Funding provided by the ICF 
program and the Science Campaign covers their areas of responsibility, 
namely, pulsed power fusion and non-ignition weapon physics, 
respectively. The Department is aware of the unintended confusion 
arising from these multiple categories. In the fiscal year 2009 budget 
submission, the National Nuclear Security Administration has proposed 
consolidating all operational funding for Z in the ICF Campaign in the 
same manner as currently done for Omega and the National Ignition 
Facility.

         CHEMISTRY AND METALLURGY RESEARCH FACILITY REPLACEMENT

    Question. The Departments commitment to long-term support of the 
CMR-Replacement facility seems to have changed substantially over the 
past 2 years.
    Mr. D'Agostino, when you attended the groundbreaking in Los Alamos, 
you declared this facility vital to the mission. The fiscal year 2006 
budget request proposed $160 million for fiscal year 2008 and now the 
fiscal year 2008 request has been reduced to $95 million. Your budget 
request now seems to reflect a wait and see attitude as it pertains to 
the CMR-Replacement.
    At the same time, the NNSA has provided $25 million to initiate 
design work on the Consolidated Plutonium Center as part of your 
Complex 2030 plan, despite the fact that the Defense Department has not 
provided you with a total pit requirement or justification for any 
additional pits beyond what can be already produced.
    With flat budgets, I do not believe the NNSA has the luxury of 
spending money on new facilities without a clear justification or need.
    Mr. Schoenbauer, do you recall when the House and Senate Energy and 
Water bill eliminated funding for the proposed Modern Pit Facility in 
fiscal year 2006?
    Answer. The termination of the Modern Pit Facility project did not 
eliminate the need to manufacture plutonium pits in sufficient 
quantities to support the nuclear weapons stockpile. In the year 2000, 
our plutonium strategy assumed two facilities to meet our long-term 
mission requirements. One facility would support plutonium research and 
development (R&D) and surveillance and a second would support pit 
manufacturing at a capacity greater than 50 net pits per year to the 
stockpile. The Chemistry and Metallurgy Research Replacement (CMRR) 
Facility and other buildings in the Los Alamos National Laboratory 
(LANL) TA-55 complex were to execute plutonium R&D mission. The Modern 
Pit Facility, as a separate facility at a site to be determined, was to 
execute the mission to manufacture pits in sufficient quantities to 
support the legacy stockpile.
    The events of September 11, 2001, evolving information on plutonium 
aging, current stockpile projections, and development of reliable 
replacement warhead concepts have changed our strategy from the year 
2000. Increasing physical security costs for special nuclear materials 
(SNM) are driving us to fewer sites with Category I/II quantities of 
SNM and increased reliance on hardened, engineered-security facilities. 
Thus, our Complex 2030 planning scenario assumes that we will have 
Category I/II quantities of plutonium at only one site (e.g., a 
consolidated plutonium center (CPC)) in the long-term for R&D, 
surveillance and manufacturing. Los Alamos is one of five sites under 
consideration for the plutonium mission.
    Our Complex 2030 planning scenario also assumed that we would rely 
on TA-55 at LANL, supported by a CMRR, for interim pit production until 
a CPC became available in 2022. Our business case analyses indicated 
this was an appropriate choice for a CMRR with a total project cost 
estimate in the range of $850 million. In late 2006, LANL completed an 
independent review of the planned CMRR and the revised the cost 
estimate for the Nuclear Facility (NF) approximately doubled. This 
greatly weakened the business case for CMRR-NF to only support interim 
pit production and would have required an unacceptable budget re-
alignment over the next 5 years to retain the original CMRR schedule. 
Thus, our revised CMRR approach to best manage risks includes: (1) 
completing the CMRR Radiological Laboratory and Utilities Office 
Building; (2) continuing with design of the CMRR-NF, and (3) deferring 
commitments to construct the CMRR-NF until completion of the Complex 
2030 Record of Decision in late 2008. In parallel with preparation of a 
Complex 2030 Supplement to the Stockpile Stewardship and Management 
Programmatic Environmental Impact Statement, we are evaluating business 
cases for all plutonium facility alternatives. These alternatives 
include several CMRR-NF options and long-term consolidation of all 
plutonium functions to Los Alamos.
    Question. What makes you think that by changing the name and 
doubling the request, we would be interested in funding a similar 
facility, just 2 years later?
    Answer. The consolidated plutonium center (CPC) is not a name 
change for the Modern Pit Facility. The CPC would be the one site in 
the nuclear weapons complex in long-term for all research and 
development, surveillance and manufacturing involving Category I/II 
quantities of plutonium. The CPC would represent a consolidation of 
many functions performed at Lawrence Livermore National Laboratory 
Building 332, and Los Alamos National Laboratory plutonium facilities. 
The fiscal year 2008 funds are requested to provide conceptual CPC 
design definition and alternative evaluations necessary to support 
upcoming plutonium facility decisions. These alternative evaluations 
include options for Los Alamos as a possible site for a CPC.

                        EXPERIMENTAL HYDRO TESTS

    Question. What impacts do you foresee on hydro testing as a result 
of funding reductions you have recommended within the Directed 
Stockpile Work Account?
    Answer. The total funding for the hydrodynamic experimental program 
in the Directed Stockpile Work (DSW) account is not changing. However, 
the total funding has been re-aligned from one line (Stockpile 
Services) to three lines: Stockpile Systems, Life Extension Programs, 
and Stockpile Services. The reason for this change was to fund 
activities more consistent with the scope of the newly established DSW 
Work Breakdown Structure.
    Question. What are the likely impacts to the Life Extension Program 
as a result of reductions in funding for hydro tests in fiscal year 
2008?
    Answer. No major impact. All major hydrodynamic experiments funded 
by the Directed Stockpile Work Hydrodynamic testing program scheduled 
to support current Life Extension Programs have been conducted.

                       HIGH PERFORMANCE COMPUTING

    Question. Mr. D'Agostino, as you know, the NNSA and its 
laboratories have developed the world's fastest computing architecture. 
This was developed in response to establishment of the stockpile 
stewardship program and the necessity to simulate weapons performance 
in order to maintain the existing underground testing moratorium.
    I am concerned that NNSA does not have a long term R&D strategy to 
keep the Nation at the forefront of High Performance Computing. It is 
my understanding that both NNSA and the DOE Office of Science are 
contributing less than $20 million to be a minority partner in a much 
larger DOD R&D program.
    Due to the rapid technological advance in this field, I believe the 
Department of Energy must establish a 10-year R&D roadmap for High 
Performance Computing by integrating the NNSA and Office of Science 
efforts.
    Why doesn't the NNSA and the DOE Office of Science work together on 
a joint engineering R&D program to develop the next computing 
breakthrough rather than take a minor stake in a DOD computing R&D 
program as provided in this request?
    Answer. The National Nuclear Security Administration (NNSA) has a 
proven track record of successful research and development (R&D). 
However, while computing R&D is important to providing the capabilities 
we will need to be successful, it is not our main driver. Our system 
investments are strongly influenced by NNSA mission need. We are 
investing in the Roadrunner architecture, which we took unilateral 
responsibility for developing, but are expanding to include a wider 
science community. We are also acquiring a capability to attack the 
problem of quantifying and aggregating uncertainties in our simulation 
tools with a system designated ``Sequoia,'' to be located at Lawrence 
Livermore National Laboratory. This too will be a unilateral effort to 
start, but will involve a larger community as it takes shape. We 
exercise strong control over Roadrunner and Sequoia as we expect those 
machines to make critical mission contributions to the NNSA.
    NNSA's advanced architecture investments include an important, co-
funded collaboration with the Office of Science for Blue Gene R&D to 
capitalize on the success of Blue Gene/L and produce future generations 
of high-performance, low-power systems.
    Our participation in the Department of Defense High Productivity 
Computing Systems (HPCS) program, which includes participation by other 
Government agencies, including the DOE Office of Science, is but one 
investment in our portfolio of advanced system developments. While we 
invest a small amount in HPCS compared to the source selection 
authority, we participate as an equal in technical debates. The Defense 
Advanced Research Projects Agency (DARPA) recognizes that much of the 
technical experience of designing and deploying supercomputers lies in 
other agencies. Consequently, our small investment belies our larger 
technical influence. The result is a win-win situation for both DARPA 
and NNSA.
    Currently NNSA is meeting other programmatic needs for computing 
R&D and contributing meaningfully to the Nation's overall computing 
R&D. All of these investments are captured in the Advanced Simulation 
and Computing (ASC) program 2020 Roadmap as well as the ASC Platform 
Acquisition Strategy.
    Question. Do you believe the NNSA labs could contribute to the 
development of a High Performance R&D program that would support 
research into advanced architectures, software and algorithm 
development?
    Answer. The National Nuclear Security Administration's (NNSA) 
laboratories could and they do make such contributions. The Advanced 
Simulation and Computing (ASC) program and the NNSA laboratories have 
historically been world leaders in these areas and continue to be so 
today. Our need to predict with confidence the performance of a nuclear 
weapons systems will drive us to exa-scale computing, 1,000 times peta-
scale, by 2018 as defined in our Roadmap. We are focused on and driven 
by that need for predictivity not only for Stockpile Stewardship, but 
also for broad national security issues. As a consequence, we are 
investing in advanced architectures, operating environments and 
algorithms that we believe are essential to meeting our mission 
responsibilities. We share our technology advances and should 
participate in any national program to advance architecture, software 
and algorithm development.
    Question. I find it a little disappointing that the Office of 
Science is expanding its purchase of high performance computers for DOE 
labs as part of the American Competitiveness Initiative, while NNSA is 
cutting the number of high-speed computers it supports from 3 to 2. Why 
is the Office of Science expanding, while NNSA is contracting?
    Answer. Funding for the Advanced Simulation and Computing (ASC) 
program has been declining since fiscal year 2005, while the American 
Competitiveness Initiative is infusing new money into basic science. 
With respect to ASC, the nuclear weapons complex has been challenged to 
reduce its footprint. One method being pursued is to reduce duplicate 
capabilities across the complex and computer operations is one area 
where such savings are possible. It should be noted that the National 
Nuclear Security Administration (NNSA) has drawn down by moving to two 
major facilities, one in New Mexico and one in California. The enabling 
technologies associated with secure distance computing make it possible 
for scientists at one site to compute seamlessly and effectively at any 
other of the Department's classified sites and thus the ability for 
computing to meet mission needs is not eroded. Our consolation was 
motivated by both budget constraints and NNSA's commitment to support 
the transformed ``Complex 2030.''
    The Office of Science has been explicitly funded to increase its 
capability at the high end of computing and simulation. While NNSA will 
be more challenged by budget tightening, our mission will force us to 
continue our long tradition of supporting American competitiveness. Our 
recent partnerships in bringing Red Storm and Blue Gene to market are 
stellar examples of improving our Nation's competitiveness while 
supporting our primary mission driver. NNSA's mission is national 
security and classified while the Office of Science's is general and 
open. The Department of Energy is well positioned for collaboration 
with all the elements of the American Competitiveness Initiative.
    Question. In your budget justification I can find no mention of the 
Roadrunner platform, but did see that the Department is ready to 
embrace a new system called Sequoia. What is the Department's strategy 
on deployment on new computing platforms?
    Answer. Both Roadrunner and Sequoia are included in the National 
Nuclear Security Administration's Platform Acquisition Strategy, and 
are key steps in achieving our long range strategic goal of predicting 
with confidence the performance of a nuclear weapon. The Roadrunner 
final delivery is scheduled for fiscal year 2008, pending a favorable 
technical review of this high-risk, high-reward system. Sequoia final 
system delivery is scheduled for fiscal year 2011, also pending 
favorable technical reviews, with delivery of a smaller-scale early 
technology system in late fiscal year 2008 on which to begin software 
porting and scaling in preparation for the final system. Both system 
delivery schedules are contingent on projected budget appropriations

          ESTABLISHMENT OF A JOINT HIGH ENERGY PLASMA PROGRAM

    Question. The fiscal year 2006 Conference Report and the fiscal 
year 2007 Senate E&W bill urged the Department to bring together the 
NNSA and the Office of Science to support a joint high energy density 
physics program to provide non-weapons scientists access to NNSA 
facilities such as Z machine. This would also expand the R&D 
possibilities for weapons programs as well. While it is still in its 
early stages, I want you to know I appreciate your efforts to enable 
this level of cooperation.
    However, I am disappointed to find out that this program, which 
supports research in high-energy physics consistent with the ICF 
program is largely funded out of the Science Campaign.
    Considering that the ICF campaign is flush with cash and has 
expanded every year, what is the justification for not funding this 
research out of this program?
    Answer. Both the National Nuclear Security Administration (NNSA) 
and the Office of Science recognize the importance of stewarding high 
energy density physics and have established a joint program in high 
energy density laboratory plasmas (HEDLP). The funding request for this 
program is more than $24 million, split almost equally between NNSA and 
the Office of Science. Due to the late date in the fiscal year 2008 
budget request preparation cycle when the joint program was 
established, the fiscal year 2008 request supports the joint program 
which represents primarily existing activities.
    In formulating the fiscal year 2008 submission, funding for 
university grants and centers in HEDLP were moved from the Inertial 
Confinement Fusion (ICF) Ignition and High Yield Campaign to the 
Science Campaign. This was done in order to simplify program execution 
by placing all university accounts in a single Budget & Reporting 
Classification code. Thus, the joint program has not placed additional 
financial burdens on the Science Campaign. Programmatic oversight of 
university activities will continue to be performed by the ICF Ignition 
and High Yield and Science Campaigns as it has in the past, and the ICF 
Ignition and High Yield Campaign will serve as the NNSA integration 
point for execution of the NNSA and Office of Science joint program.
    The President's request for the ICF Ignition and High Yield 
Campaign has decreased annually since 2005.
    Question. Can you identify other NNSA programs that are appropriate 
for similar collaboration? What about High Performance Computing?
    Answer. The Office of Defense Programs within the National Nuclear 
Security Administration (NNSA) and the Office of Science created the 
Defense Programs/Office of Science Strategic Council to appropriately 
integrate strategic planning on science of significant mutual interest. 
The goal is to assure senior planning leaders, including the Deputy 
Administrator for Defense Programs and the Under Secretary of Energy 
for Science, have awareness of each organization's plans and budgets to 
enable these program elements to leverage total value.
    The Council exchanges information at least two strategic times 
during the budget process: (1) as budgets are in final preparation for 
submission to the Office of Management and Budget and (2) after 
submission of the President's budget to Congress as staff briefings and 
testimony are being prepared. Such exchanges are deemed necessary to 
guarantee planning information is shared at these strategic planning 
phases.
    With respect to high performance computing, the NNSA requirement 
for classified computing is inconsistent with the Office of Science's 
mission to support open science. Consequently, the two offices do not 
share production computing systems. In addition, NNSA supercomputers 
are sized to meet mission needs and operate 24 hours per day performing 
weapons calculations.

                     RELIABLE REPLACEMENT WARHEAD-2

    Question. The Nuclear Weapons Council has directed the Department 
to proceed with a RRW-2 conceptual study. As part of this study, will 
the NNSA consider the reuse of existing pits as a priority? With the 
positive news on pit aging, it only makes sense to consider using pits 
that are already in the stockpile.
    How would pit reuse impact the administration's Complex 2030 
strategy? How many fewer pits would be required as a result of such a 
reuse decision?
    Answer. Pit reuse has the potential to relax near-term demand for 
quantities of new pits manufactured at the interim Los Alamos National 
Laboratory production facilities. This provides additional time to 
improve long-term pit manufacturing capacities. Long-term demand for 
new pits would not be significantly reduced unless we forego the safety 
and security advantages that can only be provided through newly-
manufactured Reliable Replacement Warhead (RRW) pits. If we want to 
achieve proposed RRW safety and security objectives without an 
underground nuclear test, the number of existing pits applicable for 
reuse in RRWs is limited to the hundreds, not thousands.
    Plutonium aging results should not be extrapolated to have a much 
broader meaning in predicting the life of legacy stockpile weapons than 
is technically justified. The plutonium aging study only addressed one 
particular aging phenomenon (intrinsic radiation damage) in one 
component (a pit) among dozens of nuclear explosive package components 
and thousands of other components in a typical nuclear weapon.

                       NATIONAL IGNITION FACILITY

    Question. It is my understanding that the NIF project is now in its 
final year of construction and will cost $3.5 billion, nearly $2.5 
billion over estimate and 7 years late. Now NNSA will proceed with the 
National Ignition Campaign, which is estimated to cost over $4 billion, 
and it is already experiencing programmatic and budget growth just as 
the construction project enjoyed. As an example of this lack of budget 
discipline, I understand the NIC program will now support direct drive 
experiments on what was billed as an indirect drive machine.
    What assurances does this subcommittee have that this program will 
stick to the programmatic and budget discipline we were promised when 
the program was re-baselined in 2005?
    Answer. The National Ignition Facility (NIF) Construction Project 
is now over 90 percent complete and has maintained the identical scope 
and essentially the same schedule and budget that were determined and 
agreed to when it was rebaselined in 2001. The only minor changes to 
the schedule and budget were in response to Congressional redirection 
in 2005.
    The National Ignition Campaign (NIC) was initiated in June 2005. It 
is being pursued under the discipline of Enhanced Management methods 
including earned value accounting. It has not experienced any scope or 
budget growth beyond the $1.6 billion that was specified in its 
original baseline (detailed in the NIC Execution Plan which was signed 
by all of the participating organizations: General Atomics, Lawrence 
Livermore National Laboratory, Los Alamos National Laboratory, Sandia 
National Laboratories and the Laboratory for Laser Energetics at the 
University of Rochester); in fact the fiscal year 2008 submission 
reduces the NIC approximately $8 million below the June 2005 baseline. 
The rigorous reporting required under Enhanced Management and a 
detailed milestone structure provides the basis for monitoring 
programmatic and budget discipline.
    The NIC involves preparation of the NIF for experimentation in 
conjunction with NIF Project completion, and is thus a highly facility 
intensive activity. NIF completion and the NIC are managed as an 
integrated activity using the same discipline and successful project 
management tools developed for the NIF Project. The execution of 
complex ignition experiments in late fiscal year 2010, only 1\1/2\ 
years after NIF Project completion, would not be possible without this 
discipline.
    Question. The National Ignition Campaign (NIC) goal is to conduct 
ignition experiments on NIF in 2010. The baseline approach is indirect 
drive with beryllium ablators. Please provide information and 
justification for all other elements within NIC that are NOT directly 
related to the baseline approach? For example, is it credible to 
believe that the direct drive approach--including the necessary 
targets--can be ready for experiments in the same time frame? What is 
the metric for switching ignition baselines in the NIC program?
    Answer. Direct drive both reduces risk for the indirect drive 
program and provides an additional ignition option, which is prudent 
given the unprecedented challenge of achieving ignition in the 
laboratory.
    Direct drive studies at Omega are currently examining physics and 
technology issues critical to the success of indirect drive. An 
important recent example is the University of Rochester achievement of 
record compressed densities in cryogenic deuterium-tritium capsules. 
This critically important result provided important new knowledge 
regarding capsule physics and the operation of cryogenic systems. This 
knowledge will directly benefit the indirect drive program.
    From its inception, the National Ignition campaign (NIC) has 
included direct drive as a backup risk mitigation strategy (contained 
in the approved NIC Execution Plan). A milestone in fiscal year 2009 
provides a decision point for moving forward with facilitization of 
polar direct drive on the National Ignition Facility (NIF). The 
mainline strategy remains indirect drive, and the bulk of NIF resources 
will be devoted to it. Only if major unforeseen problems arise with 
indirect drive will a change to direct drive be considered. No 
provision is being made to conduct direct-drive ignition experiments 
(with appropriate targets etc.) in the same time frame as indirect-
drive experiments. However, the direct drive concept will continue to 
be developed and tested on the Omega laser system at the University of 
Rochester as part of the NIC effort in order to minimize the delay in 
achieving ignition in the unlikely event that the indirect approach 
fails, and because the direct-drive approach may provide higher gain at 
lower energy than indirect-drive ignition, potentially providing 
additional capabilities for Stockpile Stewardship in the post-NIC time 
frame.
    Many of the key scientific and technical issues associated with 
ignition are common to both direct and indirect drive. Because of this 
commonality, the University of Rochester team provides scientific 
leadership for both direct drive and certain key aspects of indirect 
drive. It is thus appropriate to consider the University of Rochester 
program not as a ``backup'' but rather a critical intellectual 
component of the Inertial Confinement Fusion Ignition and High Yield 
Campaign and the NIC.

            SANDIA NATIONAL LABORATORIES ION BEAM LABORATORY

    Question. Mr. D'Agostino, I understand the Sandia has managed the 
MESA project in such a fashion that it will come in under budget and 
ahead of schedule. The lab has proposed to use the budget savings to 
support a small project known as the Ion Beam Lab, which has fallen 
into disrepair.
    Does NNSA support this project? When do you expect to provide 
approval for this funding transfer to occur?
    Answer. The National Nuclear Security Administration (NNSA) 
supports building a replacement Ion Beam Laboratory at Sandia National 
Laboratories in New Mexico. The project team has submitted a 
justifiable mission need for the project which is under review. NNSA 
has provided justifications in the President's fiscal year 2008 budget 
requesting Congress to authorize the project. Upon congressional 
authorization and completion of the Microsystems and Engineering 
Sciences Applications (MESA) facility, NNSA will request Congress to 
approve transferring the uncosted balance from MESA project to start 
the Ion Beam Laboratory in fiscal year 2009. MESA is scheduled to be 
completed at the end of fiscal year 2008 and we expect the cost under-
run to be sufficient to pay for the project capital costs. Additional 
expenditures from the operating expense funds will be required to 
complete the Ion Beam Laboratory.

                         HEAVY WATER INVENTORY

    Question. Mr. D'Agostino, it is my understanding that the 
Spallation Neutron Source located at the Oak Ridge National Laboratory 
is in need of heavy water to support experiments on that machine. I 
recall that the Savannah River Site is storing a large amount of such 
material that it might provide to this Office of Science laboratory. 
Can NNSA help the Oak Ridge Lab and provide sufficient quantities of 
heavy water to support the experiments on the SNS?
    Answer. The Savannah River Site does hold a large inventory of 
surplus heavy water, assigned to the Office of Environmental Management 
(EM) for disposition. The quality of this material is lower (more 
tritium contamination) than the material in the National Nuclear 
Security Administration (NNSA) reserve, but portions of this material 
may be adequate to meet Spallation Neutron Source (SNS) requirements. 
There is also a possibility the material may not meet the SNS 
requirements. In that case, this material could be used as barter to 
exchange for material meeting the SNS specification, from a commercial 
heavy water producer. There is material in the NNSA inventory that 
meets the SNS requirements, but it is critical that this material be 
retained to support planned Defense Programs activities. NNSA cannot 
replace the material from commercial sources due to use restrictions.
    The NNSA will work with EM and the Office of Science to identify 
suitable materials at Savannah River, and to have those materials 
transferred to SNS.

                  SECURITY GUARDS AT PANTEX ON STRIKE

    Question. Mr. D'Agostino, I understand the security guards at the 
Pantex Plant have been on strike since Sunday evening and you are 
operating the plant using security personnel from various sites around 
the complex.
    Can you please update us on the status of the negotiations and if 
you are optimistic this strike can be resolved in the near future?
    Answer. Negotiations have been ongoing since February 22, 2007. The 
Pantex Guards Union (PGU) voted to strike effective April 16, 2007, at 
0001 hours. BWXT and the PGU have continued to negotiate since then, 
although the Federal mediator and negotiating parties agreed to a week-
long ``cooling off '' period that ended May 2, 2007. The PGU has 
offered various reasons for maintaining the work stoppage but the most 
recent central issues appear to be wages, medical benefit cost shares, 
and the desire for two additional paid days off each year. We are 
optimistic that an agreement can be reached quickly if both sides 
continue to negotiate in good faith.
    Question. How long can the Department sustain it security readiness 
using this substitute guard force?
    Answer. Security of the Pantex Plant will not be degraded at any 
time during the strike, regardless of its duration. Contingency force 
planning assumptions called for up to 60 days of continuous security 
readiness while maintaining plant operations through the use of non-
union augmentation personnel from other sites and the Office of Secure 
Transportation. If the strike begins to approach the 60 day threshold, 
several additional alternatives will have to be considered, including 
but not limited to additional contingency force augmentation and a 
reduction of plant operations.

                              MOX PROGRAM

    Question. The Department recently produced the independent cost 
estimate and corrective action plan for the Mixed Oxide Fuel 
Fabrication Facility as required by the Defense Authorization Act for 
fiscal year 2007. The new project baseline is now $4.7 billion. In 
addition, you have agreed to the recommendations for the Inspector 
General to improve project oversight, establish achievable milestones, 
and include performance goals into future contract negotiations. With a 
new project baseline are you prepared to move forward with construction 
once the congressional moratorium expires in August?
    Answer. Yes, DOE is prepared to move forward with construction once 
the congressional moratorium expires in August.

                            MOX ALTERNATIVES

    Question. I noticed in the budget request that the Office of 
Environmental Management has decided to proceed with a $500 million 
vitrification plant for an estimated 13 tons of non-MOXable plutonium. 
This plant seems to confuse many people who believe this is an 
acceptable solution for the weapons grade material identified for 
destruction in the MOX facility. Can you please clarify the 
Department's position regarding its plutonium disposal strategy?
    Answer. The Department's proposed baseline approach for disposition 
of surplus weapons-usable plutonium consists of a MOX Fuel Fabrication 
Facility, a Pit Disassembly and Conversion Facility, and a Waste 
Solidification Building to dispose of at least 34 metric tons (MT) of 
weapon-grade plutonium, a proposed Plutonium Vitrification process to 
vitrify up to 13 MT of non-pit plutonium, and the operation of the H-
Canyon/HB-Line facilities to process approximately 2 MT of plutonium 
bearing materials. DOE is currently evaluating the cost and feasibility 
of reducing or eliminating the mission that is currently being 
considered for the small-scale plutonium vitrification process and 
fabricating more surplus plutonium into MOX fuel. If feasible, it could 
permit DOE to use the MOX Facility and H-Canyon/HB-Line facilities to 
dispose of approximately 43 MT of surplus plutonium.
    Question. Specifically, can the Department add the 34 tons of 
weapons grade material to the smaller vitrification plant? What impact 
would it have on the cost and schedule of this project? Are there any 
technical challenges that remain unanswered?
    Answer. No. The small-scale vitrification process cannot be scaled-
up to dispose of an additional 34 metric tons of weapon-grade 
plutonium. The radiation exposure from vitrifying plutonium in 
lanthanide borosilicate glass for up to 13 metric tons is manageable 
because the process will limit worker radiation exposure to levels well 
within acceptable limits. However, managing worker radiation exposure 
becomes problematic for much greater quantities of plutonium. 
Therefore, DOE would have to consider using ceramic immobilization 
instead. However, the amount of time needed to immobilize an additional 
34 metric tons of surplus plutonium with high level waste would extend 
beyond the planned operating life of the Defense Waste Processing 
Facility at the Savannah River Site, and an insufficient quantity of 
high-activity waste remains to be processed at the Defense Waste 
Processing Facility to immobilize all of the surplus plutonium. 
Moreover, immobilization of plutonium in a ceramic form has never been 
done before and would require significant research and development 
before the facility could be designed and constructed. This approach is 
likely to take an additional 12-14 years before operation could begin 
and would likely result in significant cost increases and schedule 
delays. There would also be legal, political, and environmental 
concerns with redirecting the disposition strategy at this point.

                              GNEP AND MOX

    Question. I have heard speculation that the MOX facility could be 
easily redesigned to process spent nuclear fuel and could serve as both 
a recycling facility and fuel fabrication facility. Has the Department 
looked at modifying this facility to serve as either a spent fuel 
recycling facility or as a fuel fabrication facility for advanced 
reactors? If so, what do you believe is the most promising option for 
expanding the mission of this facility? How will this impact the 
schedule and cost of this project?
    Answer. The MOX Facility is a fuel fabrication facility and does 
not have the capability to recycle spent nuclear fuel; a separate, 
dedicated recycling facility would be required. With regard to 
fabricating fuel for advanced reactors, the MOX Fuel Fabrication 
Facility may be capable of fabricating start-up fuel for fast reactors 
as part of the Global Nuclear Energy Partnership (GNEP), if an oxide 
fuel form is selected for that program. Currently, DOE is evaluating 
both metal and oxide fuel forms for the start-up fuel. A decision on 
the fuel form for fast reactors will be made at a future time. The MOX 
Facility would not be able to produce transmutation fuel loads for 
advanced fast reactors as envisioned by GNEP because that fuel would 
contain all the transuranic elements from the recycled light water 
reactor fuel.
    Given that the necessary GNEP fuel-related decisions are in the 
future, it is not reasonable to delay construction of the MOX facility 
to incorporate the potential GNEP required design and construction 
changes. Continued delays in MOX construction will result in increased 
costs and postpone the start of facility operations. DOE will continue 
to evaluate the option to use the MOX Facility in support of fast 
reactor start-up fuel as the requirements for GNEP are developed. In 
2008, the Secretary of Energy plans to determine a path forward for 
GNEP.
    In addition to the possibility of fabricating start-up fuel for 
GNEP advanced reactors, the MOX Facility could potentially provide the 
following capabilities:
  --Disposition of additional surplus impure plutonium (currently 
        planned for the proposed Plutonium Vitrification process at the 
        Savannah River Site), if the chemical and isotopic impurities 
        can be economically removed from the material; and
  --Disposition of additional weapons plutonium (beyond the 34 MT) that 
        is expected to be declared surplus as plutonium requirements 
        are reevaluated, in connection with transformation of the 
        nuclear weapons stockpile.

                        RUSSIA'S MOX COMMITMENT

    Question. It is my understanding that the Russians have proposed to 
fulfill their commitment under the Fissile Materials Agreement to burn 
the plutonium in the existing BN-600 reactors and add an additional 6 
reactors to burn MOX fuel. This will of course require the Russians to 
build a MOX fabrication facility. As far as I can tell, the Russians 
have yet to provide a firm commitment on their funding or schedule.
    In addition, Russia's financial outlook has changed substantially 
from when this program was initiated. Russia now enjoys a budget 
surplus and earned $315 billion in oil and gas revenue last year, an 
increase of 96 percent from 1999.
    Will U.S. negotiators demand to see a much larger contribution to 
the project costs from the Russians?
    Answer. Rosatom recently provided DOE with a proposed technical 
plutonium disposition plan that is consistent with Russia's future 
nuclear energy strategy. Under this plan, Russia would irradiate 
weapon-grade plutonium as MOX fuel in fast reactors. Although no 
agreement has been reached on specific cost sharing arrangements 
pending final Russian Government approval of its technical disposition 
program, senior Rosatom officials have indicated that Russia could 
provide significant funding. We are currently reviewing Russia's 
proposed disposition plan to ensure that it is technically and 
financially credible, and will be discussing it further with Russian 
officials in the near future.

                            EXPANSION OF MOX

    Question. When this program was first conceived back in 1998, the 
United States identified upwards of 50 tons of weapons-grade plutonium 
that was excess to the mission. Is this material still available and 
theoretically able to be used in producing Mixed Oxide Fuel?
    Answer. In 1995, the U.S. Government declared 52.5 metric tons (MT) 
of plutonium (both weapon-grade and non-weapon-grade) excess to 
national security needs. Of that quantity, approximately 4 MT have been 
retained for a non-military programmatic use, approximately 3 MT of 
scraps and residues have been disposed of at the Waste Isolation Pilot 
Plant, and approximately 7 MT in the form of spent fuel are designated 
for direct disposal in a high-level waste geologic repository. Of the 
remaining approximately 38.5 MT, a minimum of 25.6 MT is suitable for 
fabrication into MOX fuel, an additional approximately 4 MT is 
considered likely to be suitable for MOX fuel, and another 
approximately 5 MT might be suitable for MOX fuel after additional 
material analysis and characterization can be performed. To the extent 
the latter approximately 9 MT proves unsuitable for MOX, that material 
could be vitrified, and would be replaced in the 34 MT planned for 
disposition under the 2000 U.S.-Russian Plutonium Management and 
Disposition Agreement with future declarations of additional excess 
plutonium from weapons pits. The remaining approximately 4 MT (out of 
the approximately 38.5 MT) is considered unsuitable for use as MOX 
fuel, and would be disposed of either through vitrification or 
processing through Savannah River Site's H-Canyon/HB-Line facilities 
and subsequent disposal with the SRS waste stream. See chart below. 



    Question. Would the economics or design of the plant change 
significantly if a policy decision were made to increase the amount of 
plutonium to be processed through this plant?
    Answer. The MOX facility is nominally designed for a 40-year life. 
The 34 metric tons disposition mission will require approximately 13 
years. As a result, the MOX facility is capable of fabricating 
significant additional quantities of plutonium into MOX fuel. Once 
built, it will cost approximately $185 million per year to operate the 
MOX facility. Changes to the design of the facility are dependent on 
the specific characteristics of the plutonium to be fabricated into 
fuel in the future.

        NNSA'S PLUTONIUM CONSOLIDATION AND DISPOSITION STRATEGY

    Question. I am very concerned about the growing security budget and 
the financial impact it has on the defense and nonproliferation 
missions. Instead of waiting for a new multi billion dollar 
consolidated plutonium facility that is still years away from 
construction, I am more interested in taking steps now to consolidate 
and dispose of excess plutonium.
    Can you please provide me with a written explanation of the 
Department's overall plutonium disposition strategy that includes 
schedule, estimated cost and potential impact it might have on out-year 
security funding.
    Answer. The Department has prepared a ``Business Case, Proposed 
Baseline Approach for Disposing of Surplus Plutonium,'' dated April 
2007 (attached). The estimated cost, schedule, and future year funding 
requirements are contained in the Business Case.

 BUSINESS CASE--DEPARTMENT OF ENERGY'S PROPOSED BASELINE APPROACH FOR 
               DISPOSING OF SURPLUS PLUTONIUM, APRIL 2007

Executive Summary
    This report presents DOE's plan to dispose of inventories of 
surplus weapons-usable plutonium \1\ and includes a discounted cash 
flow analysis which takes into account the time value of money.\2\ Data 
contained in the analysis are based on information provided by the 
National Nuclear Security Administration and the offices of 
Environmental Management and Nuclear Energy with input provided by Dr. 
David Kosson, Chair of Civil and Environmental Engineering, Vanderbilt 
University; Dr. Ian Pegg, Professor of Physics and Associate Director 
of the Vitreous State Laboratory, Catholic University; and Dr. David 
Gallay, Program Director, LMI Government Consulting.
---------------------------------------------------------------------------
    \1\ This report addresses surplus weapons-usable plutonium covered 
by Public Law 107-107 and section 4306 of the Atomic Energy Defense 
Act, as amended. Surplus weapon-grade plutonium, as defined in the 
U.S.-Russia Plutonium Management and Disposition Agreement (less than 
10 percent Pu-240 and withdrawn from nuclear-weapons programs) is a 
subset of surplus weapon-usable fissile materials.
    U.S. national security and nonproliferation objectives include the 
disposition of 43 MT of surplus plutonium by rendering it unusable for 
nuclear weapons use and encouraging Russia to dispose of its surplus 
weapons plutonium. The 43 MT includes plutonium which has been declared 
surplus and some plutonium which may be declared surplus to national 
security defense needs in the future. This does not include surplus 
plutonium that already has a disposition pathway such as spent fuel, 
scraps, and residues. The analyses pursuant to the National 
Environmental Policy Act addressed the environmental impacts of 
disposition of up to 50 MT of such surplus weapons-usable plutonium, 
including plutonium that may be declared surplus in the future.
    \2\ This is consistent with the information used previously in 
DOE's 2006 report entitled, Disposition of Surplus U.S. Materials, 
Comparative Analysis of Alternative Approaches, and with DOE's 2007 
Business Case Analysis of the Current U.S. Mixed Oxide (MOX) Fuel 
Strategy for Dispositioning 34 Metric Tons of Surplus Weapon-Grade 
Plutonium, although those reports: (1) do not discount future cash 
flows, and (2) the earlier studies analyzed the combined plutonium and 
uranium storage costs in lieu of the plutonium storage cost as 
described in this study.
---------------------------------------------------------------------------
    DOE's proposed baseline approach is designed to accomplish the 
following three objectives:
  --Dispose of \3\ approximately 43 metric tons of surplus weapons-
        usable plutonium (both weapon and non-weapon grade) so that 
        this material is rendered inaccessible and unattractive for 
        weapons use while protecting human health and the environment. 
        This goal is consistent with long-standing United States 
        national security and nonproliferation policy with respect to 
        eliminating, where possible, the accumulation of stockpiles of 
        highly enriched uranium and plutonium;
---------------------------------------------------------------------------
    \3\ The phrase ``dispose of '' is used in this paper, consistent 
with the phraseology appearing in the 2000 U.S.-Russia Plutonium 
Management and Disposition Agreement. This paper addresses the costs of 
disposition prior to ultimate disposal (of mixed oxide spent fuel and 
vitrified plutonium with high-level waste) in the planned geologic 
repository for spent fuel and high-level waste at Yucca Mountain, 
Nevada.
---------------------------------------------------------------------------
  --Encourage Russia to dispose of 34 MT of its surplus weapons 
        plutonium consistent with the September 2000 U.S.-Russia 
        Plutonium Management and Disposition Agreement; and
  --Consolidate surplus non-pit plutonium currently stored throughout 
        the DOE Complex in order to reduce the risks associated with 
        storage of such materials at multiple sites and to help reduce 
        storage and safeguards and security costs for nuclear 
        materials.
    DOE's current proposed baseline approach \4\ for disposing of 
approximately 43 metric tons of surplus plutonium involves the 
following:
---------------------------------------------------------------------------
    \4\ The proposed actions described in the following bullets are 
subject to appropriate review under the National Environmental Policy 
Act (NEPA), subsequent decisions, and compliance with other applicable 
law.
---------------------------------------------------------------------------
  --Construct and operate a Mixed Oxide (MOX) Fuel Fabrication 
        Facility, a Pit Disassembly and Conversion Facility (PDCF), and 
        a Waste Solidification Building (WSB) to dispose of at least 34 
        MT of weapon-grade plutonium;
  --Design, construct and operate a small-scale plutonium vitrification 
        process in the basement level of the K-Reactor Building to 
        vitrify up to 13 MT of non-pit plutonium \5\ with high level 
        waste; and
---------------------------------------------------------------------------
    \5\ This 13 MT includes approximately 2 MT of material currently 
proposed to be processed in the HB-Line, and vitrified in the Defense 
Waste Processing Facility and approximately 4 MT of material currently 
proposed to be fabricated into MOX fuel.
---------------------------------------------------------------------------
  --Operate the existing H-Canyon/HB-Line facilities to process 
        approximately 2 MT of plutonium-bearing materials for disposal 
        through the Savannah River Site radioactive waste system (for 
        vitrification with high level waste in the Defense Waste 
        Processing Facility) concurrent with the recovery of enriched 
        uranium for subsequent down-blending to low enriched uranium 
        and sale.
    Based on a recent review by outside experts (cited above), and an 
assessment by Shaw-AREVA MOX Services (MOX contractor) of what 
plutonium materials can likely be fabricated into MOX fuel, DOE is 
currently evaluating the cost and feasibility of reducing or 
eliminating the mission that is currently being considered for the 
proposed small-scale Plutonium Vitrification process. Preliminary 
indications are that this approach could result in cost savings of 
approximately $500 million (estimated total project cost in constant 
2006 dollars, excluding operating costs), although actual savings may 
change as the design of the small-scale Plutonium Vitrification process 
progresses. The Department is evaluating the feasibility of the 
following approach:
  --Construct and operate a Mixed Oxide (MOX) Fuel Fabrication 
        Facility, a Pit Disassembly and Conversion Facility (PDCF), and 
        a Waste Solidification Building (WSB) to dispose of at least 39 
        MT of weapon-grade plutonium;
  --Operate the existing H-Canyon/HB-Line facilities to process 
        approximately 4 MT of plutonium-bearing materials for disposal 
        through the Savannah River Site radioactive waste system (for 
        vitrification with high level waste in the Defense Waste 
        Processing Facility) concurrent with the recovery of enriched 
        uranium for subsequent down-blending to low enriched uranium 
        and sale.
    Constructing and operating a Mixed Oxide (MOX) Fuel Fabrication 
Facility at the Savannah River Site for disposing of surplus plutonium 
is in the U.S. national interest and consistent with national security 
and nonproliferation objectives. Doing so will convert plutonium into 
forms not readily usable for weapons, and will encourage Russia to 
dispose of 34 metric tons of its excess weapons plutonium in accordance 
with the 2000 U.S.-Russia Plutonium Management and Disposition 
Agreement. Proceeding with the U.S. MOX program will also help reduce 
storage costs for nuclear materials, reduce safeguards and security 
costs, and support the Department's efforts to consolidate nuclear 
materials throughout the DOE Complex. The Department of Energy believes 
that irradiating plutonium as MOX fuel in existing commercial reactors 
is a prudent and effective means for disposing of surplus plutonium 
compared to other less mature disposition technologies.
    MOX is a proven technology that has been in widespread use in 
Europe for over three decades. Moreover, the design of the U.S. MOX 
facility is 90 percent complete, the Nuclear Regulatory Commission 
(NRC) has issued a construction authorization, and DOE's contractor has 
submitted a license application to the NRC for operation of the MOX 
facility. In addition, MOX fuel lead assemblies, made from surplus 
weapons plutonium, are currently being successfully tested in a 
commercial reactor in South Carolina. Thus far, DOE has spent 
approximately $735 million on the MOX program for design, licensing, 
and site preparation activities as well as for the fabrication and 
irradiation of MOX fuel lead assemblies.\6\
---------------------------------------------------------------------------
    \6\ The approximately $735 million in sunk costs are not included 
in this baseline financial analysis. Sunk costs were included in the 
calculation of life cycle costs provided to the House Committee on 
Appropriations in March 2007, in accordance with specific direction 
from that Committee.
---------------------------------------------------------------------------
    DOE's proposed baseline approach provides a disposition path for 
the currently identified surplus plutonium that is or will be declared 
surplus in the future. It enables the Department to consolidate special 
nuclear material (SNM), including the removal of all surplus plutonium 
from Hanford as well as reducing the inventory of surplus plutonium at 
the Lawrence Livermore National Laboratory (LLNL) and the Los Alamos 
National Laboratory (LANL) by 2009. This would result in a reduction of 
existing Category I special nuclear materials storage (CAT I) 
facilities, and ultimately would result in the fewest number of DOE CAT 
I storage facilities, at the earliest date in time. The proposed 
consolidation would also facilitate the Department's plan to achieve 
its ``Complex 2030'' objectives, a more modern, smaller and efficient 
weapons complex.
    As evidenced in the financial analysis, this proposed baseline 
approach would recover uranium and plutonium from the disposition of 
surplus fissile materials for energy production providing over $2 
billion in revenues \7\ (in constant 2006 dollars) to the U.S. 
Treasury. Included in this proposed baseline approach is approximately 
2 MT of plutonium-bearing materials to be processed through H-Canyon/
HB-Line at Savannah River. The net present value cost of this proposed 
approach (i.e. MOX, the proposed small-scale Vitrification, and H-
Canyon) over a 28-year period is approximately $11.1 billion.
---------------------------------------------------------------------------
    \7\ Revenue is comprised of approximately $1.5 billion from the 
sale of MOX fuel and $700 million from the sale of uranium from 
dismantled nuclear weapons pits. Both are based on the prevailing price 
of uranium, which has been extremely volatile in recent years The 
discounted cash flow analysis used in this Business Case conservatively 
assumes that uranium and enrichment market prices that prevailed in 
November 2006 will prevail throughout the period of interest when the 
fuel materials will enter the market.
---------------------------------------------------------------------------
    In addition to encouraging Russia to dispose of 34 metric tons of 
weapons plutonium, the capability to disassemble large numbers of 
nuclear weapons pits in the United States and fabricate the resulting 
plutonium into MOX fuel utilizes a mature technology and could 
potentially provide the following capabilities:
  --Disposition of additional weapons plutonium (beyond the 34 MT) that 
        is expected to be declared surplus as plutonium requirements 
        are reevaluated, in connection with transformation of the 
        nuclear weapons stockpile. While additional declarations would 
        have to be approved by the President based on advice from the 
        Secretaries of Defense and Energy, the MOX and PDCF facilities, 
        once constructed and operating, could readily be used for this 
        purpose. The Deputy Administrator for Defense Programs will 
        specifically raise this request with the Nuclear Weapons 
        Council.
  --Currently, DOE is evaluating both metal and oxide fuel forms for 
        use as the start-up fuel for fast reactors in support of the 
        Global Nuclear Energy Partnership (GNEP). A decision on the 
        fuel form for the fast reactors will be made at a future time. 
        Given that the necessary GNEP fuel-related decisions are in the 
        future, it is not reasonable to delay construction of the MOX 
        facility to incorporate the potential GNEP required design and 
        construction changes. Continued delays in MOX construction will 
        result in increased costs and postpone the start of facility 
        operations. DOE will continue to evaluate the option to use the 
        MOX facility in support of fast reactor start-up fuel as the 
        requirements for GNEP are developed. In 2008, the Secretary of 
        Energy plans to determine a path forward for GNEP.
  --Disposition of additional impure plutonium, e.g. plutonium 
        containing levels of chlorides, fluorides and Pu-240, currently 
        proposed to be dispositioned in DOE's proposed small-scale 
        Plutonium Vitrification process. The Department is evaluating 
        the cost and technical feasibility of maximizing the use of the 
        MOX facility and reducing the mission that is currently being 
        considered for the proposed small-scale Plutonium Vitrification 
        process.
    In conclusion, DOE's proposed baseline approach for disposing of 
surplus plutonium (MOX, the proposed small-scale Plutonium 
Vitrification process, and H-Canyon) would meet U.S. national security 
and nonproliferation objectives for disposing of 43 MT of surplus 
plutonium by rendering it unusable for nuclear weapons use, and 
encouraging Russia to dispose of its surplus weapons plutonium. In 
addition, the proposed baseline approach will help reduce storage costs 
for nuclear materials, reduce safeguards and security costs, and 
support the Department's efforts to consolidate nuclear materials 
within the DOE Complex.

                               BACKGROUND

    The end of the cold war left a legacy of surplus weapons-usable 
fissile materials both in the United States and the former Soviet 
Union, leaving substantial quantities of plutonium, no longer needed 
for defense purposes. The global stockpiles of weapons-usable fissile 
materials pose a danger to national and international security in the 
form of potential proliferation of nuclear weapons and the potential 
for environmental, safety, and health consequences if the materials are 
not properly safeguarded and managed. In September 1993, in response to 
these concerns, President Clinton issued a Nonproliferation and Export 
Control Policy which committed the United States to seek to eliminate, 
where possible, the accumulation of stockpiles of highly enriched 
uranium or plutonium, and to ensure that where these materials already 
exist, they are subject to the highest standards of safety, security, 
and international accountability.
    In early 1994, the U.S. National Academy of Sciences issued a 
report evaluating a number of plutonium disposition alternatives 
ranging from sending it into space to burying it under the ocean floor, 
before recommending two promising alternatives for further study: (1) 
fabrication and use as fuel, without reprocessing, in existing or 
modified nuclear reactors, or (2) immobilization in combination with 
high-level radioactive waste. To achieve a high degree of proliferation 
resistance, the National Academy of Sciences recommended that the 
national objective should be to make the surplus weapon-grade 
``plutonium roughly as inaccessible for weapons use as the much larger 
and growing quantity of plutonium that exists in spent fuel from 
commercial reactors,'' a state they defined as the spent fuel standard. 
This standard would require a form from which extraction and use in 
weapons of any residual plutonium and other fissile materials would be 
as difficult or unattractive as the recovery of residual plutonium from 
spent commercial fuel.
    On March 1, 1995, approximately 200 metric tons of U.S.-origin 
weapons-usable fissile materials were declared surplus to U.S. defense 
needs (38.2 MT of weapon-grade plutonium and 174.3 MT of highly 
enriched uranium). In addition, DOE announced that it had 14.3 metric 
tons of other than weapon-grade plutonium that would be included in the 
disposition program.
    Subsequently, the Department of Energy convened a team of 
laboratory, independent oversight and interagency experts to determine 
a range of reasonable disposition alternatives. Following a number of 
nationwide scoping meetings, the team released a screening report in 
March 1995 that pared 37 potential disposition options down to 11; 5 
for reactor, 4 for immobilization and 2 for direct geologic disposal 
(deep borehole). The screening process led the Department to conclude 
that going beyond the spent fuel standard using advanced technologies, 
such as fast reactors and accelerators, was not appropriate. Such 
advanced options were found to require substantial additional research 
and development, with related increased costs and time, in order to 
provide the same assurance of technical viability as other, more 
readily available technologies.
    At the April 1996 Moscow Nuclear Safety Summit, the leaders of the 
seven largest industrial countries and the Russian Federation issued a 
joint statement endorsing the need to render the surplus fissile 
materials (both highly enriched uranium and plutonium) in Russia and 
the United States to a high degree of proliferation resistance. 
Subsequently, former Russian President Yeltsin declared up to 50 metric 
tons of plutonium and 500 metric tons of highly enriched uranium as 
surplus to Russia's defense needs in September 1997.
    Following the preparation of a Programmatic Environmental Impact 
Statement which evaluated various storage and disposition options, DOE 
issued a Record of Decision (ROD). In the 1997 ROD, DOE decided that it 
would consolidate the storage of weapons-usable plutonium at upgraded 
and expanded existing and planned facilities at the Pantex Plant in 
Texas and the Savannah River Site (SRS) in South Carolina, and continue 
the storage of weapons-usable HEU in upgraded facilities at DOE's Y-12 
Plant at the Oak Ridge Reservation in Tennessee. After certain 
conditions were met, most plutonium stored at the Rocky Flats 
Environmental Technology Site in Colorado would be moved to Pantex and 
SRS. Plutonium stored at the Hanford Site, the Idaho National 
Engineering and Environmental Laboratory (INEEL), and the Los Alamos 
National Laboratory (LANL) would remain at those sites until 
disposition (or moved to storage prior to disposition). In accordance 
with the ROD, DOE would provide for disposition of surplus plutonium by 
pursuing a strategy that allowed: (1) immobilization of surplus 
plutonium for disposal in a repository pursuant to the Nuclear Waste 
Policy Act, and (2) fabrication of surplus plutonium into mixed oxide 
(MOX) fuel for use in existing domestic commercial light-water 
reactors.
    In July 1998, the Department issued a draft Surplus Plutonium 
Disposition Environmental Impact Statement (SPD EIS) which analyzed 
candidate sites for plutonium disposition. The environmental 
consequences of siting, constructing, operating, and ultimately 
decommissioning the facilities under consideration for the plutonium 
disposition mission at one or more of four DOE sites was described in 
the draft SPD EIS issued in July 1998. In addition to assessing the 
environmental consequences of the disposition alternatives, DOE 
analyzed the cost and schedule differences between alternatives, taking 
into account information obtained during site visits, similar nuclear/
industrial project costs, informal vendor quotations, previous 
estimates for similar equipment, parametric cost models, site-specific 
labor rates, and operational staffing requirements and salaries. A cost 
report was issued in July 1998 that focused on the differences in cost 
for siting the facilities at the different locations. In September 
1998, at the Clinton-Yeltsin Summit, the two leaders committed their 
countries to enter into a bilateral plutonium disposition agreement.
    In April 1999, DOE issued a Supplement to the draft SPD EIS, to 
address, among other things, impacts at the specific reactor sites 
which were identified pursuant to the contract with DOE's newly 
selected MOX contractor. In November 1999, DOE issued the Surplus 
Plutonium Disposition Final Environmental Impact Statement. This 
follow-on EIS evaluated the environmental impacts of conducting 
plutonium disposition activities at the following DOE locations: 
Hanford, Savannah River, Idaho National Engineering and Environmental 
Laboratory (INEEL) and the Pantex Plant. This was followed, in January 
2000, by a decision that: the Pit Disassembly and Conversion Facility, 
the Mixed Oxide Fuel Fabrication Facility, and the Plutonium 
Immobilization Facility would be located at SRS; up to 33 MT of 
plutonium would be fabricated as mixed oxide fuel at the Savannah River 
Site; and up to 17 MT of plutonium would be immobilized at the Savannah 
River Site.\8\ The Department reasoned that pursuing this approach 
provided the best opportunity for U.S. leadership in working with 
Russia to implement similar options for reducing Russia's excess 
plutonium. Further, it would send the strongest possible signal to the 
world of U.S. determination to reduce stockpiles of surplus weapons-
usable plutonium as quickly as possible and in an irreversible manner.
---------------------------------------------------------------------------
    \8\ About 4 MT of the 17 MT has been subsequently designated for 
programmatic use.
---------------------------------------------------------------------------
    Also in November 1999, DOE issued an additional cost report, 
Plutonium Disposition Life-Cycle Costs and Cost-Related Comment 
Resolution Document, which provided the full life-cycle costs for the 
Preferred Alternative as stated in the draft SPD EIS.
    Making good on a pledge made at a 1998 Summit, the United States 
and Russia entered into a Plutonium Management and Disposition 
Agreement in September 2000 that committed each country to dispose of 
34 metric tons of surplus weapon-grade plutonium.
    In 2001, DOE undertook a review of U.S. plutonium disposition 
cooperation with Russia so as to identify a more cost-effective 
approach. The review considered more than 40 approaches for plutonium 
disposition, with 12 distinct options selected for detailed analysis 
(six MOX-based reactor disposition options, two advanced reactor 
disposition options, and four non-reactor options (immobilization and 
long-term storage). This resulted in a refined approach under which the 
United States would rely on the irradiation of MOX fuel to dispose of 
surplus plutonium. After preparation of a Supplemental Analysis 
pursuant to the National Environmental Policy Act, the Department 
issued an amended Record of Decision which, among other things, 
cancelled immobilization. Under the new approach, 34 MT of surplus 
plutonium would be fabricated into MOX fuel, including approximately 
6.5 metric tons of impure plutonium previously destined for 
immobilization.
    In 2006, DOE again evaluated its strategy for disposing of 
currently identified surplus weapons-usable plutonium, plus 26 MT of 
surplus highly enriched uranium for which viable disposition paths had 
not been identified. DOE's 2006 report titled, Disposition of Surplus 
U.S. Materials, Comparative Analysis of Alternative Approaches showed 
that all of the ``going forward'' various alternatives were within a 
few percentages of each other (in constant 2006 dollars), illustrating 
that monetary cost was not a major discriminating factor. In the case 
of storage, DOE would still have to incur the cost of disposition at 
the conclusion of the storage mission.
    In March 2007, the Department also submitted to Congress a report 
titled, Business Case Analysis of the Current U.S. Mixed Oxide (MOX) 
Fuel Strategy for Dispositioning 34 Metric Tons of Surplus Weapon-Grade 
Plutonium, which included a business case rollup of going forward costs 
(in constant 2006 dollars) of various disposition alternatives. This 
report reconfirmed that the MOX approach was the most suitable 
disposition alternative and showed that continued storage was the most 
expensive alternative over time.

             DESCRIPTION OF DOE'S SURPLUS FISSILE MATERIALS

    In accordance with the U.S.-Russia Plutonium Management and 
Disposition Agreement, the MOX facility will fabricate at least 34 MT 
of surplus weapon-grade plutonium into MOX fuel for subsequent 
irradiation in existing commercial reactors. The majority of the 
material is comprised of surplus pits, clean plutonium metal, and clean 
oxide (approximately 25.6 MT). The remaining quantity of plutonium is 
comprised of weapon-grade oxides that are acceptable to the MOX process 
and from future weapons dismantlements. Some of the metal and oxides 
are impure, and until physical sampling, analysis and characterization 
can be performed on individual cans containing this material, the final 
quantities could vary. Based on currently available information, the 34 
MT of weapon-grade plutonium is comprised of the following:
  --25.6 MT of surplus plutonium pits, clean metal, and clean oxide;
  --Approximately 4 MT of other metal and oxide; and
  --Approximately 4.4 MT from future declarations of additional surplus 
        pits.
    In August 2006, DOE identified a small-scale plutonium 
vitrification process that could be used to dispose of up to 13 MT of 
plutonium. This 13 MT includes 4 MT of other metal and oxide that DOE 
currently believes are suitable for MOX and approximately 2 MT that is 
currently planned to be processed in the H-Canyon facility.
    Based on currently available information, the 13 MT of plutonium is 
proposed to be distributed among the three facilities (MOX, the 
proposed small-scale Plutonium Vitrification process, and H-Canyon) 
based on the following material characteristics:

------------------------------------------------------------------------
        Disposition Approach           Quantity      Characteristics
------------------------------------------------------------------------
MOX.................................       4 MT  Other Metal & Oxide:
                                                  Clean WG (Weapon-
                                                  Grade) (less than 10
                                                  percent Pu-240) Oxide
                                                  and Slightly Impure WG
                                                  Oxide.
Plutonium Vitrification Facility....   \1\ 5 MT  Impure Metal & Oxide:
                                                  Clean FG (Fuel-Grade)
                                                  (greater than 10
                                                  percent but less than
                                                  19 percent Pu-240)
                                                  Metal; Clean FG Oxide;
                                                  Impure Plutonium Oxide
                                                  with Chloride; Impure
                                                  Plutonium Metal with
                                                  Chloride.
                                       \2\ 2 MT  Impure Metal & Oxide:
                                                  Power-Grade Oxide (19+
                                                  percent Pu-240); Fast
                                                  Flux Test Facility
                                                  Green Fuel (70 percent
                                                  Uranium); Plutonium
                                                  Oxide with Fluoride;
                                                  Plutonium Oxide with
                                                  Beryllium (Be);
                                                  Plutonium Oxides and
                                                  Metal with Thorium.
H-Canyon............................       2 MT  Very Impure Materials:
                                                  Material from 3013
                                                  Container
                                                  Surveillances;
                                                  Plutonium-Beryllium
                                                  Metal; Plutonium-
                                                  Vanadium Metal; Pu-
                                                  Depleted Uranium
                                                  Metal; Plutonium-
                                                  Tantalum Metal; and
                                                  Oxide with High
                                                  Uranium Content.
------------------------------------------------------------------------
\1\ As discussed elsewhere in this analysis, some or all of this
  material may be fabricated into MOX fuel in the MOX facility.
\2\ As discussed elsewhere in this analysis, some of this material may
  be processed in H-Canyon.

    DOE will evaluate how to maximize the use of the MOX Facility for 
disposition of the non-pit plutonium currently being considered for the 
proposed small-scale Plutonium Vitrification process which is in the 
very early stages of design (less than 5 percent complete). DOE will 
continue to address technical and cost uncertainties as part of the 
Conceptual Design process and will arrive at a decision as to the need 
for the Plutonium Vitrification project as part of Critical Decision-1, 
planned for late 2007. The following is a graphical presentation 
showing the potential pathways for disposing of 52.5 MT of U.S. 
weapons-usable plutonium, which was declared surplus in 1995 (including 
spent fuel and fresh fuel retained for programmatic use), as well as 
plutonium which may be declared surplus in the future:


  FINANCIAL ANALYSIS OF DOE'S PROPOSED BASELINE PLUTONIUM DISPOSITION 
                                APPROACH

    DOE's proposed baseline approach includes a MOX Fuel Fabrication 
Facility, a Pit Disassembly and Conversion Facility (PDCF), and a Waste 
Solidification Building (WSB) to dispose of 34 MT of weapon-grade 
plutonium; a proposed Plutonium Vitrification process in the basement 
level of the K-Reactor Building to vitrify an expected 7 MT of non-pit 
plutonium (but potentially up to 13 MT of non-pit plutonium) currently 
unsuitable for fabrication into MOX fuel; and the H-Canyon/HB-Line 
facilities to process approximately 2 MT of plutonium bearing materials 
at the Savannah River Site to recover enriched uranium for subsequent 
down-blending and sale.
    DOE uses a discounted cash flow analysis (or DCF) as the basis for 
its Business Case which takes into account the time value of money. The 
DCF method determines the present value of future cash flows by 
discounting them to the present using the U.S. Government's appropriate 
discount rate, as prescribed by OMB. This is necessary because cash 
flows (project related cost outflows and revenue stream inflows from 
the sale of MOX fuel and down-blended low enriched uranium) occur in 
different time periods. This approach is consistent with the 
information used previously in DOE's 2006 report entitled, Disposition 
of Surplus U.S. Materials, Comparative Analysis of Alternative 
Approaches, and with DOE's 2007 Business Case Analysis of the Current 
U.S. Mixed Oxide (MOX) Fuel Strategy for Dispositioning 34 Metric Tons 
of Surplus Weapon-Grade Plutonium, although those reports do not 
discount future cash flows.
    The underlying conditions of the economic analysis are as follows:
  --The analysis is based on estimates published previously in DOE/NNSA 
        budget documentation (updated, where appropriate) and on the 
        approved, externally reviewed and validated MOX total project 
        cost baseline. The analysis did not independently develop or 
        verify any of those estimates.
  --Revenues from the sale of MOX reactor fuel and uranium from 
        dismantled pits are included, where applicable.
  --All cash flows represent relevant differences in expected current 
        and future costs and revenues among the alternatives. Previous 
        sunk costs are not considered.
  --The net present value costs are in discounted 2006 dollars.
  --The common time period is 2007 through 2034 and therefore includes 
        current year expenditures.
  --The discount rate (representing the Government's time value of 
        money) is 3 percent, as prescribed in OMB Circular A-94.
    The ``going forward'' cost, in net present value terms and 
excluding sunk costs, of DOE's proposed baseline approach is 
approximately $11.1 billion. A detailed analysis and assumptions 
follow:

 NET PRESENT VALUE COST TO DOE OVER A 28-YEAR PERIOD--MOX, VITRIFICATION
                         AND H-CANYON OPERATIONS
                        [In millions of dollars]
------------------------------------------------------------------------
                                                            Net Present
                      Cost Element                          Value Cost
------------------------------------------------------------------------
MOX.....................................................           3,402
PDCF....................................................           2,214
WSB.....................................................             544
Other Plutonium Disposition Costs \1\...................             333
Vitrification...........................................             797
H-Canyon................................................             340
Storage.................................................           3,426
                                                         ---------------
      Net Present Value.................................          11,056
------------------------------------------------------------------------
\1\ Includes estimated costs associated with reactor modifications,
  reactor irradiation services, procurement of uranium feed materials,
  and fuel qualification.

  
  
    Assumptions:
  --MOX construction begins August 1, 2007; the facility becomes 
        operational in 2016 and operates through 2029.
  --PDCF becomes operational in 2019 and operates through 2026.
  --WSB becomes operational in 2013 and operates through 2029.
  --Proposed Plutonium Vitrification process becomes operational in 
        2013 and operates through 2019.
  --For surplus non-pit plutonium, approximately 2 MT is processed 
        through H-Canyon/HB-Line, approximately 4 MT is processed 
        through the MOX facility, and the remaining 7 MT is vitrified 
        in the proposed Plutonium Vitrification process.
  --All cash flows are represented in 2006 (real) dollars.
  --Consolidation of surplus, non-pit plutonium to SRS begins in 2007 
        and is completed in 2009.
  --H-Canyon/HB-Line are maintained as a safeguards Category II 
        facility.
  --The primary mission for H-Canyon/HB-Line is to process aluminum 
        clad spent fuel and recover enriched uranium, which continues 
        through 2019. The costs associated with the ``with other 
        missions'' are the costs attributable to operating the facility 
        for processing plutonium whereas the costs associated with the 
        ``without other missions'' are the costs to operate the 
        facility if the plutonium mission carries the full costs of 
        facility operations. The numbers are derived from the actual 
        annual operating costs.
  --The MOX total project cost is based on the current approved project 
        baseline ($4.8 billion). Note: The Revised Continuing 
        Appropriations Resolution, 2007 (Public Law 110-5) provides 
        that the Secretary of Energy may not make available funds for 
        construction activities for the MOX facility until August 1, 
        2007. This delay results in an increase to the MOX total 
        project cost which is included in the net present value 
        calculations.
  --The project cost for PDCF and WSB is based on the project data 
        sheet in the fiscal year 2008 President's budget.
  --The project costs for Plutonium Vitrification are based on the pre-
        conceptual cost range approved at CD-0, and are the same as 
        those appearing in the fiscal year 2008 President's budget.
  --Costs for all storage facilities are based on actual operating 
        costs and/or those costs projected by each of the sites.
  --Storage costs for LLNL and LANL continue until programmatic 
        materials are removed consistent with Complex 2030 goals in the 
        years 2014 and 2022 respectively. Pantex storage costs continue 
        due to continued storage of programmatic material. Storage 
        costs are based on the total, actual operating costs of the 
        storage facilities for both surplus and non-surplus 
        programmatic materials. These costs include security costs and 
        the required staffing to operate and maintain a Category 1 
        Security facility. Such costs are incurred regardless of the 
        quantity of materials stored in the facility and would be 
        incurred so long as surplus or programmatic materials are 
        stored at the facilities. The facilities at Pantex, LLNL, and 
        LANL contain both programmatic and surplus materials and 
        accordingly, storage costs would be incurred until all of the 
        materials (surplus and programmatic) have been removed. For 
        these reasons, it is not appropriate to allocate incremental 
        storage costs for only surplus plutonium.
  --The estimated nearer-term plutonium storage costs of $3.4 billion 
        represent the storage costs to the Department until removal of 
        surplus plutonium from Hanford, LLNL, and LANL pursuant to 
        DOE's Complex 2030 and material consolidation goals. If 
        consolidation of the surplus plutonium does not proceed and the 
        materials continue to be stored at present locations, then an 
        incremental storage cost of approximately $6 billion would be 
        incurred, in addition to the future cost to dispose of the 
        materials at a later time. Storage (without disposition) would 
        be the most expensive option because the discounted (net 
        present value) storage costs are within 10 percent of the 
        proposed baseline approach and do not account for the 
        additional cost to dispose of the material.
  --The net present value costs are consistent with the information 
        used previously in DOE's 2006 report entitled, Disposition of 
        Surplus U.S. Materials, Comparative Analysis of Alternative 
        Approaches, and with DOE's 2007 Business Case Analysis of the 
        Current U.S. Mixed Oxide (MOX) Fuel Strategy for Dispositioning 
        34 Metric Tons of Surplus Weapon-Grade Plutonium, but differ in 
        that: (1) the earlier studies did not discount the costs, and 
        (2) the earlier studies analyzed the combined plutonium and 
        uranium storage costs in lieu of the plutonium storage cost as 
        described in this study. If DOE continues to store surplus 
        materials at Hanford, LANL, and LLNL, cost savings from 
        removing plutonium pursuant with Complex 2030 initiative and 
        materials consolidation would not be realized.
  --Costs are included for construction of six magazines to increase 
        storage efficiency for surplus pits in Zone 4 at Pantex.
  --Costs of operating H-Canyon/HB-Line without other missions 
        represent the total cost of operating H-Canyon/HB-Line and are 
        based on actual annual operating costs. This scenario would 
        occur if other planned missions do not take place and H-Canyon/
        HB-Line was operated solely for plutonium disposition.
  --Revenues from the sale of MOX fuel and the uranium from dismantled 
        pits are based on the price of uranium as of November 2006.
  --A terminal value is used to assign an equivalent financial value to 
        those activities assumed to continue indefinitely, such as 
        storage and surveillance and monitoring.
      evaluation of alternative storage and disposition approaches
    The following section compares the Department's proposed baseline 
approach with other storage and disposition approaches on the basis of 
nonproliferation aspects, institutional factors, technical maturity and 
technical uncertainty, and cost and schedule considerations. Plutonium 
disposition approaches are grouped into two distinct categories. Those 
approaches in the first category meet U.S. national security and 
nonproliferation objectives concerning the disposition of surplus 
plutonium by rendering it unusable for nuclear weapons, and encourage 
Russia to dispose of its surplus weapons plutonium. Specific approaches 
in this category include: DOE's proposed Baseline Approach (MOX, the 
proposed small-scale Plutonium Vitrification process and H-Canyon/HB-
Line) and Maximize Utilization of MOX and H-Canyon/HB-Line. The second 
category contains those approaches that fail to accomplish these 
objectives and include: large-scale (41 MT) Immobilization Facility and 
H-Canyon, Consolidate and Vitrify (13 MT) Non-Pit Plutonium at SRS 
While Continuing to Store Surplus Pits at Pantex, Consolidate the 
Storage of Non-Pit Plutonium (13 MT) at SRS and Store Surplus 
Plutonium (43 MT) In-Place at Current Locations.

   APPROACHES THAT MEET U.S. NATIONAL SECURITY AND NONPROLIFERATION 
                               OBJECTIVES

    Proposed Baseline Approach (MOX, Plutonium Vitrification and H-
Canyon).--The proposed baseline approach consists of: (1) construct and 
operate a MOX Fuel Fabrication Facility, a Pit Disassembly and 
Conversion Facility, and a Waste Solidification Building to dispose of 
34 MT of weapon-grade plutonium; (2) design, construct and operate a 
plutonium vitrification process in the basement level of the K-Reactor 
Building to vitrify up to 13 MT of non-pit plutonium; and (3) operate 
the existing H-Canyon/HB-Line facilities to process approximately 2 MT 
of very impure plutonium bearing materials at the Savannah River Site, 
along with the mission to recover enriched uranium for subsequent down 
blending and sale.
    DOE's proposed baseline approach for disposing of surplus plutonium 
meets all of the programmatic objectives. The detailed design of the 
MOX facility is about 90 percent complete, and the technology has been 
in use throughout Europe for three decades. The proposed Plutonium 
Vitrification process, on the other hand, is in the very early stages 
of design (less than 5 percent complete). As such, there remains 
uncertainty associated with the design and cost estimates and 
therefore, future cost growth is likely. DOE will continue to address 
technical and cost uncertainties as part of the Conceptual Design 
process. The MOX fuel fabrication facility, once operational, could 
potentially provide the following capabilities: disposition of 
additional plutonium from future weapons dismantlement, if declared 
surplus; possible fabrication of start-up fuel for GNEP fast reactors 
depending on fuel form selected and the 2008 determination of the GNEP 
path forward by the Secretary of Energy; and disposition of additional 
surplus impure plutonium (currently planned for Plutonium 
Vitrification), if the chemical and isotopic impurities can be 
economically removed from the material. This approach will incur 
additional costs if there is delay in pursuing the currently planned 
program.
    Maximize Utilization of MOX and Operate H-Canyon (MOX and H-
Canyon).--Construct and operate a MOX Fuel Fabrication Facility, a Pit 
Disassembly and Conversion Facility, and a Waste Solidification 
Building to dispose of approximately 39 MT of weapon-grade and fuel-
grade plutonium, and to operate the existing H-Canyon/HB-Line 
facilities to process approximately 4 MT of certain impure and very 
impure plutonium bearing materials at the Savannah River Site, together 
with the mission to recover enriched uranium for subsequent down 
blending and sale.
    As with the proposed baseline approach, this approach meets all of 
the programmatic objectives. Overall, it has the highest degree of 
technical maturity and is therefore likely to have the least unplanned 
programmatic cost growth. The proposed small-scale Plutonium 
Vitrification process is in the very early stages of design (less than 
5 percent complete). As such, there remains uncertainty associated with 
the design and cost estimates and therefore, future cost growth is 
likely. DOE will continue to address technical and cost uncertainties 
as part of the Conceptual Design process. Engineers are currently 
evaluating the cost and technical feasibility of maximizing the use of 
the MOX facility and reducing the mission that is currently proposed 
for the small-scale Plutonium Vitrification process. If feasible, it 
could permit DOE to use MOX and H-Canyon to dispose of the 
approximately 43 metric tons of surplus plutonium. Preliminary 
indications are that this approach may result in cost savings of 
approximately $500 million (estimated total project cost in constant 
2006 dollars, excluding operating costs) when compared to the proposed 
baseline approach, although actual savings may change as the design of 
the small-scale Vitrification process progresses. Moreover, this 
approach would require minor modifications to the H-Canyon. As 
mentioned above, the MOX fuel fabrication facility, once operational, 
could potentially provide the following capabilities: disposition of 
additional plutonium from future weapons dismantlement, if declared 
surplus; and possible fabrication of start-up fuel for GNEP fast 
reactors depending on a decision by the Secretary of Energy on the 
scope of the GNEP program scheduled for June 2008.

        APPROACHES THAT FAIL TO MEET U.S. NATIONAL SECURITY AND 
                      NONPROLIFERATION OBJECTIVES

    Immobilization Facility and H-Canyon.--Under this approach, DOE 
would design, construct, and operate a new, large-scale (approximately 
41 MT) stand-alone Plutonium Immobilization Plant (using ceramification 
technology, since immobilization of such a large amount of plutonium 
would not be feasible using vitrification in a borosilicate glass due 
to the high radiation levels produced). A Pit Disassembly and 
Conversion Facility would be needed to take apart nuclear weapons cores 
and convert the resulting plutonium metal to an oxide form for 
ceramification as would a Waste Solidification Building. Operation of 
the existing H-Canyon/HB-Line facilities would be used to process 
approximately 2 MT of plutonium bearing materials at the Savannah River 
Site, together with the mission to recover enriched uranium for 
subsequent down blending and sale.
    This approach is likely to be seen by Russia as being inconsistent 
with the U.S.-Russia Plutonium Management and Disposition Agreement and 
is unlikely to encourage Russia to dispose of its surplus weapon-grade 
plutonium. Russia continues to view immobilization as another form of 
storage because it does not degrade the isotopics of the weapon-grade 
plutonium as would irradiation in a nuclear reactor. Therefore, Russia 
continues to believe that weapon-grade plutonium from the immobilized 
waste form could be retrieved for use in new nuclear weapons. This 
approach does support the program objectives of consolidating and 
disposing surplus plutonium in support of Complex 2030 and related DOE 
goals. Plutonium immobilization maintains the commitment to U.S. 
nonproliferation goals by potentially dispositioning 43 MT of plutonium 
in an intrinsically theft resistant form. The ability to complete the 
41 MT immobilization mission with high level waste located at the 
Savannah River Site is not possible, however, because of an 
insufficient quantity of high level waste needed to fill the waste 
canisters, in order to provide an intrinsically self protecting theft-
resistant form. Immobilization \9\ of plutonium in a ceramic matrix 
also has a high degree of technical uncertainty because of the 
relatively low technical maturity associated with this technology. As a 
result, substantial future cost growth to accomplish plutonium 
immobilization is likely, and the overall programmatic cost is expected 
to be greater than DOE's current planned baseline program. In addition, 
significant program delays are likely because of the currently low 
technical maturity of this option, coupled with required new 
evaluations associated with such a major program change (e.g., 
extensive research and development, facility design and construction 
are likely to mean that an Immobilization Facility could not become 
operational for an additional 12-14 years).
---------------------------------------------------------------------------
    \9\ Immobilization of plutonium in a ceramic form has never been 
done before and designs for an immobilization facility do not exist. 
This approach would require extensive research and development followed 
by a detailed engineering effort to design an immobilization facility. 
This approach is likely to take between 10-12 years before construction 
can begin and result in significant cost increases and schedule delays.
---------------------------------------------------------------------------
    Consolidate and Vitrify Non-Pit Plutonium at SRS and Continue to 
Store Pits at Pantex.--Design, construct and operate a Plutonium 
Vitrification process in the basement level of the K-Reactor Building 
to vitrify up to 13 MT of non-pit plutonium; operate the existing H-
Canyon/HB-Line facilities to process approximately 2 MT (included in 
the preceding 13 MT) of plutonium bearing materials at the Savannah 
River Site, with the mission to recover enriched uranium for subsequent 
down blending and sale, and continue to store DOE's inventory of 
surplus pits at Pantex.
    This alternative approach would result in the disposition of 
approximately 13 MT of mostly non-weapon-grade plutonium but leaves 
thousands of surplus nuclear weapon pits in storage at Pantex. Thus, 
this approach does not meet U.S. national security and nonproliferation 
objectives with respect to rendering DOE's entire inventory of surplus 
plutonium unusable for future weapons use and does not encourage Russia 
to dispose of its surplus weapons plutonium. Upgrades would be needed 
at Pantex to continue to store the surplus nuclear weapons pits. As 
stated previously, the proposed small-scale Plutonium Vitrification 
process is in the very early stages of design (less than 5 percent 
complete). As such, there remains uncertainty associated with the 
design and cost estimates and therefore, future cost growth is likely.
    Consolidate the Storage of Non-Pit Plutonium at SRS.--Under this 
approach, DOE would: consolidate the storage of up to 13 MT of non-pit 
plutonium from Hanford, Los Alamos National Laboratory and Lawrence 
Livermore National Laboratory at SRS; continue to operate the existing 
H-Canyon/HB-Line facilities to process approximately 2 MT of plutonium 
bearing materials together with the mission to recover enriched uranium 
for subsequent down blending and sale; and continue to store 
indefinitely DOE's inventory of surplus nuclear weapons pits at Pantex.
    This alternative approach would not meet U.S. national security and 
nonproliferation objectives with regard to disposing of 43 MT of 
surplus plutonium by rendering it unusable for nuclear weapons use and 
would not encourage Russia to dispose of its surplus weapons plutonium. 
Since it would also fail to provide a disposition pathway out of the 
Savannah River Site for surplus plutonium brought there for 
disposition, existing law currently prohibits the further shipment of 
this plutonium to SRS under certain circumstances to achieve 
consolidation. This approach would not prevent the accumulation of 
stockpiles of surplus plutonium, deferring final disposition decisions 
and costs until the future. Upgrades would still be needed at Pantex to 
continue to store thousands of surplus nuclear weapons pits.
    Store Surplus Plutonium In-Place at Current Locations.--DOE would 
continue to store surplus plutonium at current locations, i.e., 
Savannah River Site, Pantex, Hanford, Los Alamos National Laboratory 
and Lawrence Livermore National Laboratory. Under this approach, the 
existing H-Canyon/HB-Line facilities would process approximately 2 MT 
of plutonium bearing materials already at the Savannah River Site, with 
the mission to recover enriched uranium for subsequent down blending 
and sale.
    This alternative approach would not meet U.S. national security and 
nonproliferation objectives. It would not meet U.S. obligations under 
the 2000 U.S.-Russia Plutonium Management and Disposition Agreement and 
would not encourage Russia to dispose of its surplus weapons plutonium. 
This approach would defer final disposition decisions and costs until 
some time in the future. Storage costs, discounted to the present, are 
within approximately 10 percent of DOE's planned baseline disposition 
costs, over the equivalent time period.\10\ At the conclusion of the 
storage period, DOE would still have to fund an expensive disposition 
program, or continue to pay storage costs.
---------------------------------------------------------------------------
    \10\ The 2007 Business Case Analysis of the Current U.S. Mixed 
Oxide (MOX) Fuel Strategy for Dispositioning 34 Metric Tons of Surplus 
Weapon-Grade Plutonium showed that storage costs in constant 2006 
dollars for 50 years of storage would be $15.45 billion and would 
exceed the base case costs.
---------------------------------------------------------------------------
                               CONCLUSION

    DOE's proposed baseline approach for disposing of surplus plutonium 
(MOX, proposed small scale Plutonium Vitrification process, and H-
Canyon) would meet U.S. national security and nonproliferation 
objectives for disposing of 43 MT of surplus plutonium by rendering it 
unusable for nuclear weapons use, and would provide the best chance of 
encouraging Russia to dispose of its surplus weapons plutonium. In 
addition, the proposed baseline approach would help reduce storage 
costs for nuclear materials, reduce safeguards and security costs, and 
support the Department's efforts to consolidate nuclear materials 
within the DOE Complex.
    The detailed design of the MOX facility, a key element of the 
baseline approach, is about 90 percent complete, and the technology has 
been in use throughout Europe for three decades. The Nuclear Regulatory 
Commission (NRC) has authorized construction and DOE's contractor has 
submitted a license application to the NRC for operation of the MOX 
facility. In addition, MOX fuel lead assemblies, containing surplus 
weapons plutonium, are currently being successfully tested in a 
commercial nuclear reactor in South Carolina and the irradiation of MOX 
fuel will generate electricity through which revenues are produced for 
the U.S. Treasury. Moreover, the MOX fuel fabrication facility, once 
operational, could potentially provide the following capabilities: 
disposition of additional plutonium from future weapons dismantlement, 
if declared surplus; possible fabrication of start-up fuel for GNEP 
fast reactors depending on a decision by the Secretary of Energy on the 
scope of the GNEP program scheduled for June 2008; and disposition of 
additional surplus impure plutonium (currently planned for Plutonium 
Vitrification), if the chemical and isotopic impurities can be 
economically removed from the material.

        CYBER SECURITY FUNDING--INSUFFICIENT TO ADDRESS THE RISK

    Question. It is clear that the cyber budgets have failed to keep 
pace with the enormous investment in physical security, despite the 
fact that every day of the year our classified network is attacked 
thousands of times by foreign entities looking for access to our 
national security secrets.
    Has the NNSA requested a risk analysis of the Department's massive 
physical security buildup vs. the limited investment it has made in 
cyber security?
    Answer. In December 2006, the NNSA Chief Information Officer (CIO) 
requested that a cyber security risk analysis be completed by each 
Site. The preliminary analyses were to be completed by February 2007, 
and the final analyses and reports are due to be completed in May 2007. 
After the NNSA CIO works with sites to identify and quantify the risks, 
the Administrator must review the risks of both cyber and physical and 
distribute the budget submission accordingly. In addition to the risk 
analysis, in 2007, the NNSA OCIO will publish a cyber security threat 
statement and risk assessment methodology to be used consistently 
across the NNSA complex.
    Question. Considering that our country is constantly under cyber 
attack, wouldn't you agree that an independent review of the investment 
over the past several years would be helpful to know if we accurately 
assessed the risks by making physical security our priority?
    Answer. Independent reviews of cyber and physical security are 
conducted annually by the Office of Independent Assessment (OA) and by 
the Office Inspector General (OIG). Cyber security has increasingly 
become a priority over the past several years, and budget requests 
reflect a change in the ``balancing'' of risks based on a 
revitalization of the cyber security program within DOE and NNSA.
Loss of Personal Data
    Question. It greatly disturbs me that a subcontractor was able to 
walk out of Los Alamos lab with classified material last October, but I 
am equally frustrated with the numerous instances where the Federal 
Government has failed to protect personal information of employees. 
Last year, computer hackers were able to steal 1,500 names from NNSA's 
Albuquerque Service Center.
    What is the Department doing to encrypt and protect personal 
employee data to ensure that information has the same level of 
protection that applies to classified information?
    Answer. The Department's CIO published policy on the handling of 
Personally Identifiable Information (PII) in July 2006. The NNSA CIO 
further published implementing guidance in August 2006 that outlines 
the requirements for protection and reporting of PII and PII related 
information. These guidelines are in compliance with the OMB 
requirements for PII. In addition, the DOE and NNSA procured encryption 
software for use throughout the Department to facilitate the 
requirements implementation.

                          SUBCOMMITTEE RECESS

    Senator Dorgan. This hearing is recessed.
    [Whereupon, at 4:04 p.m., Wednesday, April 18, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2008

                              ----------                              

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

                       NONDEPARTMENTAL WITNESSES

    [Clerk's note.--At the direction of the subcommittee 
chairman, the following statements received by the subcommittee 
are made part of the hearing record on the Fiscal Year 2008 
Energy and Water Development Appropriations Act.]

                      DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army

                       Corps of Engineers--Civil

        Prepared Statement of the Fifth Louisiana Levee District
    The Board of Commissioners for the Fifth Louisiana Levee District 
respectfully requests that construction funding for Mississippi River 
Levees be increased from the $28,767,000 contained in the proposed 
budget for fiscal year 2008, to the U.S. Army Corp of Engineers' 
capability of $98,352,000, and the Mississippi River Levee maintenance 
allocation be increased from the proposed $10,726,000 to $34,538,000.
    Reduced funding, combined with the inability to let construction 
contracts under a continuing contract clause, has left thousands in 
Louisiana vulnerable to the adverse effects of a deficient levee 
system. Construction of levee enlargements is essential if the levee is 
to contain high river stages that are sure to come eventually.
    The effect of fully funded contracts for levee construction, now 
required under Public Law 109-103, (Sec. 106 and 108), adopted by the 
109th Congress in 2005, as opposed to the previous system of continuing 
contract clauses, has virtually halted enlargement of the Mississippi 
River Levee System in Louisiana. This comes at a time when the State of 
Louisiana is still reeling from the effects of devastation caused by 
serious lack of funding for levees in the past. Administration after 
administration has cut funding for levee systems and flood control, 
providing less and less with each new Federal budget. The current 
proposed budget is no exception, with only $260,000,000 allocated for 
the entire Mississippi River and Tributaries (MR&T) project. We request 
that be increased to the Corp's capabilities of $500,000,000.
    Less than $10 billion has been invested in the MR&T Project since 
its authorization following the great flood of 1927, a fraction of the 
billions that have been spent trying to restore the damage to lives and 
property created by levee failures following Hurricane Katrina. 
Billions spent that have made almost no impact.
    We urge Congress to increase funding to the Corps of Engineers in 
fiscal year 2008, to ensure that the Corps is not forced to halt of 
delay contracts for levee construction essential to the well-being of 
this Nation. It is vital that the MR&T project(s) be completed at the 
earliest possible date. This can only be accomplished through adequate 
funding and repeal of the mandate for contracts to be fully funded 
prior to the beginning construction. Prior to August 2005, the MR&T 
projects had a performance-to-cost ratio of 24-to-1 on work completed. 
Hurricane Katrina changed that ratio drastically. The economic 
justification for increased funds for levee construction in Louisiana 
cannot be questioned or disputed.
                                 ______
                                 
 Prepared Statement of the Clark County Regional Flood Control District

    Testimony for the United States Army Corps of Engineers Tropicana 
and Flamingo Washes Flood Control Project, Las Vegas, Nevada.--
$12,500,000 construction appropriations, which includes appropriations 
for work performed pursuant to Section 211 of the Water Resources 
Development Act of 1996.
    Presented herewith is testimony in support of $12,500,000 for the 
final construction appropriation necessary for the U.S. Army Corps of 
Engineers (Corps) to complete the Tropicana and Flamingo Washes flood 
control project (hereafter referred to as the Project) in Clark County, 
Nevada, and to reimburse the non-Federal sponsors, Clark County and the 
Clark County Regional Flood Control District, for work performed in 
advance of the Federal Project pursuant to Section 211 of the Water 
Resources Development Act (WRDA) of 1996.
    The President's fiscal year 2008 Civil Works budget request to 
Congress identifies no funding for this Project. It is imperative that 
we receive the requested Federal funding to protect residents of the 
rapidly growing Las Vegas Valley in Southern Nevada from devastating 
floods.
    Some history of previous funding requests and budgeting challenges 
associated with bringing this Project to a close need to be explained 
and outlined. On March 6, 2006, we learned that fiscal year 2004 and 
2005 appropriations for the Project were reprogrammed to other projects 
in the Los Angeles District in the amount of approximately $7,000,000. 
While a commitment was made to us by the Corps to reinstate these funds 
in fiscal year 2006, they were not made available to us due to language 
changes in the Conference Report that accompanies H.R. 2419. In order 
to see the construction of the Project continue, we asked and received 
permission to use the $3 million of Section 211 funds from fiscal year 
2006 appropriations to increase funding of Construction General. We 
also contributed an additional $1 million to the Project by advancing 
our 5 percent cash commitment earlier than originally anticipated. 
These steps were necessary to prevent the Project from shutting down in 
mid-construction. In fiscal year 2007, we submitted testimony 
requesting $22 million for Construction General and Section 211. We now 
learn that under current Continued Resolution Authority, the Project 
may receive Federal funding in fiscal year 2007 in the amount of only 
$12.4 million--the lesser of the two budgets authorized by the House 
and Senate. This is almost $10 million less than the original request. 
And to further muddy the waters, the President's fiscal year 2008 Civil 
Works budget request to Congress identifies no funding to complete this 
Project.
    Because the Corps' budget requests are made well in advance of the 
fiscal year 2008 budget being announced, the Corps may have assumed--
that if we had received the $22 million request in 2007--the Project 
would have been completed and no further funding for Section 211 or 
construction would have been requested or necessary. Clearly, now, 
that's not what occurred and another $12.5 million is necessary to 
bring the Project to a close and provide what is due under Section 211.
    The non-Federal sponsors are, therefore, requesting $12.5 million 
for both the final construction funding and reimbursement to the local 
sponsors of this Project. Funding at this level will allow the Federal 
commitments made in the past to be finally realized and completed in 
fiscal year 2008.
    The Feasibility Report for the Project was completed in October 
1991, and congressional authorization was included in the WRDA of 1992. 
The first Federal appropriation to initiate construction of the Project 
became available through the Energy and Water Resources Development 
Appropriations Bill signed into law by the President in October 1993. 
The Project Cooperation Agreement (PCA) was fully executed in February 
1995. Federal appropriations to date have totaled $281.7 million 
(allocations $239.1 million), allowing continued Project construction. 
The total cost of the flood control portion of the Project is currently 
estimated at $336.3 million, higher than originally anticipated 
primarily due to the delay in Federal appropriations which has resulted 
in increases in real estate and construction costs.
    In order to provide the required flood protection in a timely 
fashion, the non-Federal sponsors are implementing certain features in 
advance of the Federal Government pursuant to Section 211 of WRDA 1996. 
An amendment to the PCA was fully executed on December 17, 1999, that 
formalizes the provisions of Section 211 of WRDA 1996. Section 211(f) 
of WRDA 1996 recognized the Project as one of eight projects in the 
Nation to demonstrate the potential advantages and effectiveness of 
non-Federal implementation of Federal flood control projects. The work 
funded by the non-Federal sponsors and completed is substantial and 
includes features that were designed by the non-Federal sponsors and 
constructed by either the Federal Government or the non-Federal 
sponsors. The language contained in the fiscal year 2000 Energy and 
Water Development Bill, Senate Report 106-58, states in part, ``The 
Committee expects . . . every effort to even out reimbursement payments 
to lessen future budgetary impacts.'' To date, only $13.5 million has 
been reimbursed of the previously authorized $20.6 million.
    The local community had constructed certain elements of the Project 
prior to the execution of the PCA. These Project elements required 
modifications in order to fit into the Corps' plan and fulfill the need 
for a ``total fan approach'' to the flooding problems in the Las Vegas 
Valley. The work performed by the non-Federal sponsors, construction of 
Red Rock Detention Basin and Flamingo Detention Basin, has been 
accounted for in Section 104 credits and totals $9,906,000.
    We have already realized some benefits from construction of flood 
control features on the Project We have removed 18.7 square miles of 
flood zones from Federal Emergency Management Agency's (FEMA) Flood 
Insurance Rate Maps. This was accomplished through the completion of 
various project elements. We anticipate removal of additional flood 
zones when the Project is completed.
    In summary, the Project is an important public safety project 
designed to provide flood protection for one of the fastest growing 
urban areas in the Nation. We ask that the committee provide the 
Secretary of the Army with $12.5 million, in fiscal year 2008, in order 
to meet prior requests to complete the Project and to reimburse the 
non-Federal sponsors the Federal proportionate share of the work 
completed by the sponsors in advance of the Federal Government.
    The committee is aware that flood control measures are a necessary 
investment required preventing loss of life and damages to people's 
homes and businesses. Flood control is a wise investment that will pay 
for itself by preserving life and property and reducing the probability 
of repeatedly asking the Federal Government for disaster assistance. 
Therefore, when balancing the Federal budget, we believe a thorough 
analysis will show that there is substantial future Federal savings in 
disaster assistance that supports sufficient appropriations through the 
Civil Works Budget.
    las vegas growth, specific project benefits and flooding history
    The Las Vegas Valley continues to experience unprecedented growth. 
In the past 20+ years, people have moved into our area from all parts 
of the Nation to seek employment, provide necessary services, retire in 
the Sunbelt, and become part of this dynamic community. Approximately 
6,000 people relocate to the Las Vegas Valley every month of the year. 
Currently the population exceeds 1.9 million. The latest statistics 
show that more than 31,000 residential units are built annually. Once 
all of these factors are combined, the result is that the Las Vegas 
Valley continues to be one of the fastest-growing metropolitan areas in 
the Nation.
    The Project being constructed by the Corps is designed to collect 
flood flows from a 174-square-mile contributing drainage area. The 
Project includes three debris basins, five detention basins, 28 miles 
of primary channels, and a network of lateral collector channels. The 
debris basins collect flood flows from undeveloped Federal lands at the 
headwaters of the alluvial fans and trap large bedload debris before it 
enters the channels and causes erosion damage. The detention basins 
greatly reduce the magnitude of the flood flows so that the flows can 
be safely released and conveyed through the urbanized area at non-
damaging rates. A primary system of channels collects outflows from the 
debris and detention basins and conveys these floodwaters through our 
urban area. Lateral collector channels, which are funded locally, 
collect runoff from smaller developed watersheds and deliver it to the 
primary channels. Since flood flow over the alluvial fans, which ring 
the Las Vegas Valley, is so unpredictable in terms of the direction it 
will take during any given flood, all of the components of the Project 
are critical.
    In recent history, torrential rains deluged the Las Vegas Valley 
the morning of July 8, 1999, causing widespread drainage problems and 
major damages to public and private properties. Some of the greatest 
rainfall depths occurred over the southwest portions of the Las Vegas 
Valley resulting in significant flows in the Tropicana and Flamingo 
Washes. The runoff from this intense rainfall caused widespread street 
flooding and record high flows in normally dry washes and flood control 
facilities. The news media reported two deaths during this flood event, 
one of which was a drowning in the Flamingo Wash. Damages to public 
property caused by this storm were estimated at $20.5 million. The 
President declared Clark County a Federal Disaster Area on July 19, 
1999, recognizing the severity of damages to public and private 
properties. Significant damages could have been avoided if the Project 
had been fully implemented. However, those features of the Project that 
were completed did help to mitigate damages.
    On August 19, 2003 another flash flood hit the Las Vegas Valley and 
damaged hundreds of homes and businesses. Again in the winter of 2004-
2005, the area experienced heavier then normal rainfall amounts. That 
winter brought twice the area's average annual rainfall causing 
flooding along the Virgin and Muddy Rivers in Clark County, Nevada. 
Several areas in the Las Vegas Valley also experienced drainage 
problems. While the flood control features built as part of the Project 
helped to protect vast areas of our community, storms of this magnitude 
only reinforce the need to expeditiously build all flood control 
projects in the Las Vegas Valley.
                                 ______
                                 
          Prepared Statement of the City of Flagstaff, Arizona

                   RIO DE FLAG FLOOD CONTROL PROJECT

    Chairman Dorgan, Ranking Member Domenici, and distinguished members 
of the subcommittee, thank you for allowing me to testify on behalf of 
the city of Flagstaff, Arizona in support of $8 million in the Army 
Corps of Engineers budget for the Rio de Flag flood control project in 
fiscal year 2008 and for an increased authorization, or 902(b) fix, for 
the project. The Rio de Flag flood control project is critically 
important to the city, to northern Arizona, and, ultimately, to the 
Nation.
    As you may know, Mr. Chairman, with this subcommittee's help over 
the last 3 fiscal years, Rio de Flag received more than $11 million to 
continue construction on this important project. We are extremely 
grateful that the subcommittee boosted this project well above the 
President's request both years, and we would appreciate your continued 
support for this project in fiscal year 2008.
    Like many other projects under the Army Corps's jurisdiction, Rio 
de Flag received no funding in the President's fiscal year 2008 budget, 
although the Corps has expressed a capability of $8 million to continue 
construction on the project. We are hopeful that the subcommittee will 
fund the Rio de Flag project at $8 million when drafting its bill in 
order to keep the project on an optimal schedule.
    Flooding along the Rio de Flag dates back as far as 1888. The Army 
Corps has identified a Federal interest in solving this long-standing 
flooding problem through the Rio de Flag, Flagstaff, Arizona--
Feasibility Report and Environmental Impact Study (EIS). The 
recommended plan contained in this feasibility report was developed 
based on the following opportunities: (1) flood control and flood 
damage reduction; (2) environmental mitigation and enhancement; (3) 
water resource management; (4) public recreation; and (5) redevelopment 
opportunities. This plan will result in benefits to not only the local 
community, but to the region and the Nation.
    The feasibility study by the Corps of Engineers has revealed that a 
500-year flood could cause serious economic hardship to the city. In 
fact, a devastating 500-year flood could damage or destroy 
approximately 1,500 structures valued at more than $450 million. 
Similarly, a 100-year flood would cause an estimated $100 million in 
damages. In the event of a catastrophic flood, over half of Flagstaff 
's population of more than 60,000 would be directly impacted or 
affected.
    In addition, a wide range of residential, commercial, downtown 
business and tourism, and industrial properties are at risk. Damages 
could also occur to numerous historic structures and historic Route 66. 
The Burlington Northern & Santa Fe Railway (BNSF), one of the primary 
east-west corridors for rail freight, could be destroyed, as well as 
U.S. Interstate 40, one of the country's most important east-west 
interstate links. Additionally, a significant portion of Northern 
Arizona University (NAU) could incur catastrophic physical damages, 
disruptions, and closings. Public infrastructure (e.g., streets, 
bridges, water, and sewer facilities), and franchised utilities (e.g., 
power and telecommunications) could be affected or destroyed. 
Transportation disruptions could make large areas of the city 
inaccessible for days.
    Madame Chairwoman, the intense wildfires that have devastated the 
West during the last several years have only exacerbated the flood 
potential and hazard in Flagstaff. An intense wildfire near Flagstaff 
could strip the soil of ground cover and vegetation, which could, in 
turn, increase runoff and pose an even greater threat of a catastrophic 
flood.
    In short, a large flood could cripple Flagstaff for years. This is 
why the city believes it is important to ensure that this project 
remains on schedule and that the Corps is able to utilize its expressed 
capability of $8 million in fiscal year 2008 for construction of this 
flood control project.
    In the city's discussions with the Corps, both the central office 
in Washington and its Los Angeles District Office also believe that the 
Rio de Flag project is of the utmost importance and both offices 
believe the project should be placed high on the subcommittee's 
priority list. We are hopeful that the subcommittee will consider this 
advice and also place the project high on its priority list and fully 
fund the project at $8 million for fiscal year 2008.
    It is important to note that the city has secured the necessary 
property rights to begin construction, and the city is prepared to 
assume the costs for the non-Federal portion of the cost-sharing 
agreement.
    Finally, I strongly support inclusion of a 902(b) fix that was 
included in the fiscal year 2007 Senate Energy and Water Development 
Appropriations bill (as Section 113), which will increase the 
authorization of the project from $35 to $54 million, but was not 
included in the final bill due to the passage of the continuing 
resolution for fiscal year 2007. Nevertheless, because of the Corps' 
commitment to this project, on November 9, 2006, the Corps announced 
that they had approved a waiver to their policy to allow the 
construction contract award of Clay Avenue Wash Detention Basin prior 
to reauthorization of the total project. The current estimate for 
construction of the basin is $4.6 million. Without this increased 
authorization for the project, it cannot move forward as planned. 
Therefore, it is critically important that this provision is inserted 
in the bill:

    ``Sec. __. The project for flood damage reduction, Rio de Flag, 
Flagstaff, Arizona, authorized in section 101(b)(3) of the Water 
Resources Development Act, 2000, is modified to authorize the Secretary 
to construct the project, at a total cost of $54,130,000, with an 
estimated Federal cost of $34,970,000, and an estimated non-federal 
cost of $19,160,000.''

    As you may know, project construction and implementation of Rio de 
Flag was authorized in the Water Resources Development Act (WRDA) of 
2000. The total project cost is now estimated to be $54,100,000 in and 
above the reconnaissance study or the feasibility study. The non-
federal share is currently $24,000,000 and the Federal share is 
currently $30,000,000. Final project costs must be adjusted based on 
Value Engineering and final design features. It is important to note 
the City of Flagstaff has already committed more than $10,500,000 to 
this project, and an additional $2,000,000 in excess of its cost share 
agreement. This clearly demonstrates the city's commitment to 
completing this important project. Through this investment in the 
project, the city has entered into the Project Cooperation Agreement 
(PCA) with the Department of the Army.
    The city of Flagstaff, as the non-federal sponsor, is responsible 
for all costs related to required Lands, Easements, Rights-of-Way, 
Relocations, and Disposals (LERRD's). The city has already secured the 
necessary property rights to begin construction in 2004. Implementation 
of the city's Downtown and Southside Redevelopment Initiatives 
($100,000,000 in private funds) are entirely dependent on the 
successful completion of the Rio de Flag project. The Rio de Flag 
project will also provide a critical missing bike/pedestrian connection 
under Route 66 and the BNSF Railroad to replace the existing hazardous 
at grade crossings.
    Both design and construction are divided into two phases. Phase I 
construction commenced in 2004. Phase II of the project commenced in 
2005.
    Mr. Chairman, the Rio de Flag project is exactly the kind of 
project that was envisioned when the Corps was created because it will 
avert catastrophic floods, it will save lives and property, and it will 
promote economic growth. In short, this project is a win-win for the 
Federal Government, the city, and the surrounding communities.
    Furthermore, the amount of money invested in this project by the 
Federal Government--approximately $30 million--will be saved 
exponentially in costs to the Federal Government in the case of a large 
and catastrophic flood, which could be more than $450 million. It will 
also promote economic growth and redevelopment along areas that are 
currently underserved because of the flood potential.
    In conclusion, the Rio de Flag project should be considered a high 
priority for this subcommittee, and I encourage you to support full 
funding of $8 million for this project in the fiscal year 2008 Energy 
and Water Development Appropriations bill. I also strongly support the 
inclusion of an increased authorization, or 902(b) fix, for the project 
from $35 to $54 million. Thank you in advance for your consideration.
                                 ______
                                 
  Prepared Statement of the Arkansas River Basin Interstate Committee

    Mr. Chairman and members of the committee, I am Paul Latture II, 
Arkansas Chairman of the Arkansas River Basin Interstate Committee, 
from Little Rock, Arkansas.
    It is my privilege to present this statement on behalf of the 
Arkansas members of our committee in support of adequate funding for 
water resource development projects in our area of the Arkansas River 
Basin. Other members of the committee are: Mr. Jack Long, Little Rock; 
Mr. Jeff Pipkin, Russellville; Mr. Scott McGeorge, Pine Bluff; and Mr. 
Buck Shell, Van Buren.
    The public investment in the McClellan-Kerr has paid significant 
dividends over the life of the project. The most recent investment 
included the completion of the Montgomery Point Lock and Dam. Since the 
opening of Montgomery Point, there has been a 10 percent increase in 
total tonnage on the system. In 2005, there was an 8 percent increase 
in tonnage. This is a direct result of the increased reliability of the 
system. Without Montgomery Point Lock and Dam, the river system would 
have been closed 25 percent of the time, according to Corps of 
Engineers officials. We fully expect that tonnage will continue to 
increase. But maintaining the high reliability of the system depends on 
protecting the investment by funding projects such as the significant 
backlog of Operations and Maintenance that has built up over the years, 
by completing the Arkansas-White River Cut-off study and construction, 
and by fulfilling the wish of Congress in completing the 12-foot 
channel project.
    Mr. Chairman, Public Law 108-137 authorized a 12-foot channel on 
the McClellan-Kerr Arkansas River Navigation System. The Corps is now 
obligated to operate and maintain the system as a 12-foot channel. Over 
90 percent of the system currently is adequate for a 12-foot channel. 
Deepening the remainder of the channel to 12 feet will allow carriers 
to place 43 percent more cargo on barges, which will reduce the amount 
of fuel consumed and emissions released. Funds in the amount of $7.0 
million were allocated in fiscal year 2005. Those funds were used to 
complete the Feasibility Study and Environmental Impact Statement with 
the balance used on engineering, design, and construction activities. 
Environmental benefits include the creation of new aquatic habitat 
through new dike construction and the construction of Least Tern 
islands through beneficial use of dredged material. The Corps of 
Engineers has developed a comprehensive plan to execute the project in 
the States of Arkansas and Oklahoma to the best advantage of both 
States and the best use of the funds.
    Therefore, we request $40 million to maintain the authorized depth 
and execute the plan to its full capability in fiscal year 2008. This 
investment will increase the cost competitiveness of this low cost, 
environment-friendly transportation mode and help us combat the loss of 
industry and jobs to overseas.
    Arkansas-White Rivers Cutoff Study is to determine a permanent 
solution to prevent the developing cutoff from joining the Arkansas and 
White River near the confluence of the McClellan-Kerr Arkansas River 
Navigation System and the Mississippi Rivers. If not corrected this 
occurrence could have a dramatic adverse affect on the navigation 
system. Unless corrected, this will effectively drain the water from 
the navigation system and halt the movement of commerce on the system.
    We request an appropriation of $3.5 million of which $400,000 will 
complete the study and $3.1 million will be used for design and 
construction activities at Jim Smith Lake and along the banks of the 
Arkansas and White Rivers to support navigation.
    Maintenance of the Navigation System.--In preparation for the 
deepening of the navigation system from 9 to 12 feet, there is a 
backlog of maintenance items that has been deferred due to insufficient 
budgets to allow proper maintenance. These maintenance items are 
required even to support navigation at the 9-foot depth in order to not 
jeopardize the reliability of the system. Therefore, we request funding 
for the Little Rock District of the Corps of Engineers to be at least 
$26 million for the upcoming fiscal year for routine and deferred 
channel maintenance. These funds would be used for such things as 
repair of bank stabilization work, needed advance maintenance dredging, 
and other repairs needed on the system's components that have 
significantly deteriorated over the past three decades.
    Mr. Chairman, we respectfully request that the committee consider 
these requests as the most important to our transportation system at 
this time. We must maintain this country's transportation 
infrastructure or little else will matter in the future.
                                 ______
                                 
 Prepared Statement of the Board of Levee Commissioners for the Yazoo-
                           Mississippi Delta
    On behalf of the thousands of citizens in its 10-county district in 
Mississippi, the Yazoo-Mississippi Delta Levee Board respectfully urges 
Congress to fund the Mississippi River and Tributaries Project (MR&T) 
to the full U.S. Army Corps of Engineers' 2008 capability of $500 
million.
    While the totality of the Mississippi Valley Flood Control 
Association's requested fiscal year 2008 Civil Works Requested Budget 
(documentation for which is attached) represents badly needed work 
items throughout the Mississippi Valley, we shall speak specifically to 
those critically important flood control needs within our levee 
district in this space allotted us.
    The Mainline Mississippi River levee system is one of the great 
engineering successes in America. For 75 years it has protected lives 
and livelihoods within the shadow of the Father of All Waters, and it 
will continue to do so in the years ahead--but only if properly 
strengthened and maintained. We urge Congress to appropriate the needed 
$98.352 million to maintain our levees and keep our citizens safe and 
dry. Within that we will be able to do two seepage control projects at 
Farrell and Trotter's.
    It is only through a lack of required funding that one of the most 
successful and non-controversial flood control projects in the United 
States has come to a grinding halt in our district. The Upper Yazoo 
Project (UYP), which our board is proud to sponsor, is the prototypical 
example of what a flood control project should be--effective, 
environmentally sound, universally favored. While flood control efforts 
in other areas are threatened or stalled by lawsuits and citizen 
upheaval, the UYP has everyone's blessing, and is absent only the funds 
to complete it.
    Restoring the Yazoo/Coldwater/Tallahatchie river system to its flow 
capacity and stopping interbasin transfer of flood waters, the UYP is 
about two-thirds complete. The city of Greenwood, Mississippi, is 
already receiving its benefits. But upstream, such areas as Marks, 
Lambert, Moorhead, Mississippi Delta Community College, Tutwiler, 
Glendora, Sumner and Webb are not--and will not unless Congress 
dedicates the $22.5 million which the Corps of Engineers needs for 
scheduled work in 2008.
    We implore Congress to appropriate the needed $22.5 million for the 
UYP so that structures might be constructed, a bridge relocated, and 
another section of the river system restored to its proper capacity. 
Thousands of our citizens remain unprotected from flood waters; we turn 
to Congress to give them relief.
    Working hand-in-hand with the UYP in a common sense approach to 
flood control is the Mississippi Delta Headwater Project, through which 
waters and the stream-filling silts which they carry, are controlled. 
The UYP would clear out our waterways, the Delta Headwater Project 
would reduce the rate at which they would re-silt. We urge Congress to 
appropriate the needed $25 million for this effort to continue in 2008.
    Without proper mitigation practices, of course, all flood control 
projects would be threatened. Our levee district is very concerned that 
mitigation lands, once acquired, are not being rapidly enough turned 
over to Federal and State wildlife management agencies to ensure the 
desired public benefits. A lack of management monies is frequently 
blamed for that, so we are asking that adequate funds be appropriated 
and designated for proper management authority and practice on 
mitigation lands.
    Mississippi's four flood control reservoirs play a critical role in 
managing water from the hills and avoiding untimely releases into the 
low-lying Delta where they can wreak havoc. But as critical as these 
facilities are, they are aging and maintenance monies are deeply needed 
to ensure their integrity. Therefore we ask that respective maintenance 
funds be allocated for these reservoirs as follows:
  --Sardis Lake--$14.784 million.
  --Arkabutla Lake--$9.975 million.
  --Enid Lake--$10.927 million.
  --Grenada Lake--$11.299 million.
    Due to the nature of its alluvial soils, bank stabilization is a 
critical need in the Delta and within our district. In the past, the 
Corps had the authority to prioritize this pervasive problem and deal 
directly with those situations in which significant public importance 
was involved--hospitals, major thoroughfares, schools and the like. One 
example in our district is where bank failure threatens major 
transportation arteries near the Rising Sun community south of 
Greenwood. But the empowering language for such no longer exists. We 
urge that either this language be restored for such projects 
nationwide, or, in the alternative, we urge Congress to specifically 
allocate the needed $820,000 needed to address this problem which 
potentially affects thousands.
    The Big Sunflower River Maintenance Project is jointly sponsored by 
Mississippi's two levee boards. The Draft Supplemental Environmental 
Impact Statement for this project, which would restore flood control 
capacities to 130 miles of channels by removing sediment built up over 
the past 40 years, will be released later this year and we request that 
$2.5 million be appropriated to allow right-of-way acquisition to 
continue and to award the dredging contract.
    The Corps of Engineers has the capacity to Initiate Tributaries 
Reformulation on inland feeder streams, many of which lie in our 
district, and we urge that Congress appropriate the $2 million Corps 
2008 capacity for this needed work.
    In another issue specific to our district, funds are needed to 
initiate a study of Gunn Bayou, south of Belzoni. Poor drainage causes 
localized flooding in this area.
    There are, however, two policy issues which combine to potentially 
threaten not only these, but every flood control project in the 
country--the recently abandoned principles of Continuing Contracts and 
Reprogramming. Now absent these two longstanding practices, the Corps 
has lost the flexibility to continue works in progress and reallocate 
funds by priority. We urge Congress to restore the practices of 
Continuing Contracts and Reprogramming throughout the MR&T.
    Finally, through the implementation of revised Levee Certification 
guides and some unfortunate and ill-advised flood insurance zone 
language, the Federal Emergency Management Agency has created a 
situation in which both future investment in the Delta and homeowner 
finances are threatened. The new FEMA levee protection guide and 
subsequent flood zone rating appears to ignore the protection afforded 
by the levee system for 75 years and stands to send homeowner insurance 
costs skyrocketing, according to one estimate, anywhere from 500 to 
1,600 percent.
    We urge Congress to seriously review and address this issue.
                                 ______
                                 
  Prepared Statement of the Arkansas River Basin Interstate Committee
    Mr. Chairman and members of the committee, I am James M. Hewgley, 
Jr., Oklahoma Chairman of the Arkansas River Basin Interstate 
Committee, from Tulsa, Oklahoma.
    It is my privilege to present this statement on behalf of the 
Oklahoma members of our committee in support of adequate funding for 
water resource development projects in our area of the Arkansas River 
Basin. Other members of the committee are: Mr. Ted Coombes, Tulsa; Mr. 
A. Earnest Gilder, Muskogee; Mr. Terry McDonald, Tulsa; and Mr. Lew 
Meibergen, Enid, who also serves as Chairman of the combined Arkansas 
River Basin Interstate Committee representing the five States within 
the Arkansas River Basin.
    Mr. Chairman, Public Law 108-137 authorized a 12-foot channel on 
the McClellan-Kerr Arkansas River Navigation System. The Corps is now 
obligated to operate and maintain the system as a 12-foot channel. Over 
90 percent of the system currently is adequate for a 12-foot channel. 
Deepening the remainder of the channel to 12 feet will allow carriers 
to place 43 percent more cargo on barges, which will reduce the amount 
of fuel consumed and emissions released. Funds in the amount of $7.0 
million were allocated in fiscal year 2005. Those funds were used to 
complete the Feasibility Study and Environmental Impact Statement with 
the balance used on engineering, design, and construction activities. 
Environmental benefits include the creation of new aquatic habitat 
through new dike construction and the construction of Least Tern 
islands through beneficial use of dredged material. The Corps of 
Engineers has developed a comprehensive plan to execute the project in 
the States of Arkansas and Oklahoma to the best advantage of both 
States and the best use of the funds.
    Therefore, we request $40 million to maintain the authorized depth 
and execute the plan to it's full capability in fiscal year 2008. This 
investment will increase the cost competitiveness of this low cost, 
environment-friendly transportation mode and help us combat the loss of 
industry and jobs to overseas.
    Tow Haulage Equipment--Oklahoma.--We request funding of $6.5 
million to initiate the installation of tow haulage equipment on the 
locks located along the Arkansas River portion of the McClellan-Kerr 
Arkansas River Navigation System. Total cost for these three locks is 
$6.5 million. This project will involve installation of tow haulage 
equipment on W.D. Mayo Lock and Dam No. 14, Robert S. Kerr Lock and Dam 
No. 15, and Webbers Falls Lock and Dam No. 16, on the Oklahoma portion 
of the waterway. The tow haulage equipment is needed to make 
transportation of barges more efficient and economical by allowing less 
time for tows to pass through the various locks.
    Arkansas-White Rivers Cutoff Study is to determine a permanent 
solution to prevent the developing cutoff from joining the Arkansas and 
White River near the confluence of the McClellan-Kerr Arkansas River 
Navigation System and the Mississippi Rivers. If not corrected this 
occurrence could have a dramatic adverse affect on the navigation 
system. Unless corrected, this will effectively drain the water from 
the navigation system and halt the movement of commerce on the system.
    We request an appropriation of $3.5 million of which $400,000 will 
complete the study and $3.1 million will be used for design and 
construction of a permanent fix at Jim Smith Lake.
    Maintenance of the Navigation System.--In preparation for the 
deepening of the navigation system from 9 to 12 feet, there is a 
backlog of maintenance items that has been deferred due to insufficient 
budgets to allow proper maintenance. These maintenance items are 
required even to support navigation at the 9 foot depth in order to not 
jeopardize the reliability of the system. Therefore, we request 
additional funding in the amount of $1,549,000--plus the amount from 
Little Rock, over and above normal funding, for deferred channel 
maintenance. These funds would be used for such things as repair of 
bank stabilization work, needed advance maintenance dredging, and other 
repairs needed on the system's components that have deteriorated over 
the past three decades.
    In addition to the system-wide needed maintenance items mentioned 
above, the budget for the Corps of Engineers for the past several years 
has been insufficient to allow proper maintenance of the McClellan-Kerr 
Arkansas River Navigation System--Oklahoma portion. As a result, the 
backlog of maintenance items has continued to increase. If these 
important maintenance issues are not addressed soon, the reliability of 
the system will be jeopardized. The portion of the system in Oklahoma 
alone is responsible for returning $2.6 billion in annual benefits to 
the regional economy. The fiscal year 2006 O&M President's budget for 
Tulsa District was $8.2 million less (over 11 percent) than the fiscal 
year 2005 appropriation, which will result in no funding being 
available for critical infrastructure maintenance in fiscal year 2006. 
The fiscal year 2007 O&M President's budget is currently proposed at 
$72.4 million which is presently $10 million more than the fiscal year 
2006 budget. This $10 million increase is offset by higher energy, 
labor, and construction costs. We therefore request that $2.1 million 
be added to the budget to accomplish critical infrastructure 
maintenance items on the Oklahoma portion of the system as follows:
    McClellan-Kerr.--$600,000 to repair plate seals for the weirs;
    Robert S. Kerr.--$1,500,000 to repair erosion and construct 
emergency mooring wood dolphins.
    Mr. Chairman, we respectfully request that the committee consider 
these requests as the most important to our transportation system at 
this time. We must maintain this country's transportation 
infrastructure or little else will matter in the future.
                                 ______
                                 
  Prepared Statement of the Upper Mississippi River Basin Association 
                                (UMRBA)

                        [In millions of dollars]
------------------------------------------------------------------------
                                            President's        UMRBA
                                              Request     Recommendation
------------------------------------------------------------------------
Construction General:
    Upper Miss. River Restoration                  23.46           33.52
     Program (aka EMP)..................
    Lock and Dam 3 (Major                 ..............            5.0
     Rehabilitation) \1\................
    Lock and Dam 11 (Major                          6.3             6.3
     Rehabilitation) \1\................
    Lock and Dam 19 (Major                          0.70            1.47
     Rehabilitation) \1\................
    Lock and Dam 24 (Major                          0.34            0.49
     Rehabilitation) \1\................
    Locks 27 (Major Rehabilitation) \1\.            7.54           11.26
    Upper Mississippi and Illinois        ..............           16.2
     Rivers Navigation and Ecosystem
     Sustainability Program (if
     construction is authorized)........
Operation and Maintenance: O&M of the             187.23          279.41
 Upper Mississippi and Illinois Rivers
 Navigation System \2\..................
General Investigations: Upper             ..............           24.0
 Mississippi and Illinois Rivers
 Navigation and Ecosystem Sustainability
 Program (PED)..........................
------------------------------------------------------------------------
\1\ Funding for major rehabilitation projects would be shifted to the
  O&M account under the President's budget proposal. Major
  rehabilitation would still be cost-shared 50 percent from the Inland
  Waterways Trust Fund.
\2\ The administration has modified the structure of the O&M account in
  its fiscal year 2008 budget. Rather than budgeting for individual
  projects, the O&M request is organized by region and by business line
  within region. The UMRBA is addressing its testimony to that portion
  of the Region 7 navigation business line that is attributable to O&M
  of the Upper Mississippi and Illinois Rivers navigation system. Thus,
  we have disaggregated numbers from the President's budget.

    The Upper Mississippi River Basin Association (UMRBA) is the 
organization created in 1981 by the Governors of Illinois, Iowa, 
Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating 
river-related State programs and policies and for collaborating with 
Federal agencies on regional issues. As such, the UMRBA works closely 
with the Corps of Engineers on a variety of programs. Of particular 
interest to the basin States are the following:
         upper mississippi and illinois rivers navigation study
    It has been more than 2 years since the Corps completed its 14-year 
Upper Mississippi and Illinois Rivers Navigation Study, issuing the 
final feasibility report in September 2004 and the Chief's Report in 
December 2004. While Congress has not yet authorized the recommended 
integrated plan for navigation improvements and ecosystem restoration, 
it has provided preconstruction engineering and design (PED) funding to 
insure that necessary planning and design work can proceed, in 
anticipation of construction authorization. Congress appropriated $13.5 
million for PED in fiscal year 2005 and $10.0 million in fiscal year 
2006. A similar bridging strategy will be necessary in fiscal year 2008 
if authorization remains pending.
    PED.--The UMRBA supports $24.0 million for PED in fiscal year 2008, 
despite the fact that the administration has once again not included 
PED in its budget request. Many of the large scale projects, such as 
new locks or fish passage at dams, require 3 years or more of PED 
before they can move to construction. It is thus critical that PED work 
continue without pause and be sustained over time. In the past, PED 
funding has been directed to both navigation improvements and ecosystem 
restoration projects. This has not necessarily meant providing 
identical amounts to these two major components on an annual basis, but 
has involved attempting to ensure meaningful and substantial progress 
in planning for both navigation improvements and ecosystem restoration. 
If the Corps were to receive PED funding of $24.0 million in fiscal 
year 2008, it is anticipated that approximately $1.5 million would be 
directed to program management and completion of the economic 
reevaluation interim report, with the $22.5 million balance divided 
roughly evenly between navigation measures (including small scale 
measures and lock design at three sites) and ecosystem restoration plan 
formulation and evaluation. (Note.--The PED allocation for fiscal year 
2007 remains to be determined. It is imperative that the Office of 
Management and Budget permit the Corps to allocate reasonable and 
necessary funds to PED in fiscal year 2007. Approximately $18.0 million 
is needed for fully functional PED this year.)
    Construction.--If the integrated navigation and ecosystem 
restoration program is authorized for construction this year, 
construction could be initiated on several projects in fiscal year 
2008. In that event, UMRBA would recommend construction funding of 
$16.2 million. This funding would support mooring cells at 3 sites, 
switchboats, channel work upstream of Lock 22, fish passage at L&D 22, 
and several other ecosystem restoration projects, with approximately 
$7.6 million going to navigation improvements and $8.6 million going to 
ecosystem projects. This initial fiscal year 2008 construction 
increment would also enable the Corps to launch major construction 
activities, including work on large scale measures, in fiscal year 
2009, with full program implementation possibly beginning in fiscal 
year 2010.

         UPPER MISSISSIPPI RIVER RESTORATION PROGRAM (AKA EMP)

    In fiscal year 2007, the Upper Mississippi River Restoration 
Program, commonly known as the Environmental Management Program (EMP), 
marked 20 years as the premier program for restoring the river's 
habitat and monitoring the river's ecological health. Members of 
Congress, agency leaders, stakeholder groups, and members of the public 
all joined the Corps of Engineers in celebrating the EMP's many 
successes, including both significant contributions to river science 
and dramatic on-the-ground habitat improvements. Given this tremendous 
record of success, the UMRBA is pleased that the administration has 
again identified the EMP as one of six construction projects considered 
to be national priorities. Even with this emphasis, however, the 
administration has requested only $23.46 million for the EMP in fiscal 
year 2008. This would continue the trend of the past 10 years, in which 
the annual EMP appropriation has fallen short of the authorized funding 
level. The UMRBA strongly urges Congress to appropriate full funding of 
$33.52 million for the EMP in fiscal year 2008.
    The administration's proposed $23.46 million budget would support 
planning, engineering, design, and construction work on 23 habitat 
restoration projects. In addition, the fiscal year 2008 request would 
support modest expansion of targeted research and data acquisition and 
management efforts under the Long Term Resource Monitoring Program 
(LTRMP), which has suffered substantially from the funding shortfalls 
in recent years. However, to realize its full promise, the EMP requires 
funding at the full authorized amount of $33.52 million. This would 
support construction on three additional projects. It would also permit 
accelerated work on several other projects, thereby increasing overall 
program efficiency. Finally, funding at the full capability level would 
support LTRMP research on critical science questions and the 
acquisition of data needed for balanced river management, such as LIDAR 
terrain data. Therefore, the UMRBA urges Congress to fund the EMP at 
its full authorized amount of $33.52 million.
    UMRBA remains concerned about a 2006 directive from OMB that $3 
million of fiscal year 2007 EMP funding be devoted to development of a 
``10-year aquatic ecosystem restoration plan.'' Such a plan is 
unnecessary and would duplicate plans that the Corps completed as part 
of the 2004 Navigation Study. It is unclear whether OMB will renew this 
directive now that fiscal year 2007 funding allocations are being made, 
or attempt to apply it in fiscal year 2008. However, given the backlog 
of EMP habitat restoration projects awaiting construction, and the vast 
number of unmet needs under the LTRMP, it would be misguided to divert 
construction funds from this important work to develop a plan that is 
largely duplicative. Congress should direct the Corps to use EMP funds 
exclusively for construction of habitat restoration projects and long 
term monitoring, as authorized in the 1999 Water Resources Development 
Act.
    UMRBA recognizes that one of the biggest challenges facing future 
restoration efforts on the Upper Mississippi River (UMR) will be 
integrating the work that is currently done under EMP with the new 
ecosystem/navigation authority being proposed. Congress is currently 
considering authorization of a new dual-purpose authority for the 
Corps, as recommended in the navigation feasibility study. For now, 
however, the EMP remains the single most effective and long-standing 
UMR ecosystem restoration program. Moreover, the EMP's monitoring 
element is entirely unique and would not be replicated under some 
versions of the proposed new authority. Therefore, fully funding the 
EMP is as important today as it has ever been. The EMP must not 
languish as questions related to future program streamlining and 
coordination are being addressed.

              MAJOR REHABILITATION OF LOCKS AND DAMS (L&D)

    Most of the locks and dams on the Upper Mississippi River System 
are over 60 years old and many are in serious need of repair and 
rehabilitation. For more than 20 years, the Corps has been undertaking 
major rehabilitation of individual facilities throughout the navigation 
system in an effort to extend their useful life. This work is critical 
to ensuring navigation reliability and safety.
    The UMRBA supports the President's fiscal year 2008 budget request 
for major rehabilitation work at L&D 11 ($6.3 million) and supports 
increasing the President's request for rehabilitation work at L&D 19 
($1.47 million), L&D 24 ($0.49 million), and Locks 27 ($11.26 million). 
Funding at these levels will permit timely and efficient rehabilitation 
of these critical navigation structures. Major rehabilitation of L&D 11 
and L&D 19 could be completed in fiscal year 2008. The planned work 
spans a broad range, including gate repair/replacement, concrete work, 
and mechanical and electrical upgrades.
    The UMRBA also supports funding for a major rehabilitation project 
that is not included in the President's request: L&D 3 at $5.0 million. 
Navigation safety and embankment failure have been a concern for over 
20 years at L&D 3, and river pilots agree that this is the most 
dangerous stretch of the Upper Mississippi to navigate. Should there be 
an accident, the adjacent embankments, which have been severely 
weakened by age and past accidents, could be breached. In this event, 
commercial navigation would be curtailed and two large power plants 
would be forced to shut down.

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

    The Corps is responsible for operating and maintaining the Upper 
Mississippi River System for navigation. This includes channel 
maintenance dredging, placement and repair of channel training 
structures, stream gaging and water level regulation, and routine care 
and operation of 29 locks and dams on the Mississippi River and 7 locks 
and dams on the Illinois River. The fiscal year 2008 budget request 
totals approximately $187.23 million for O&M of this river system. 
These funds are critical to the Corps' ability to maintain a safe and 
reliable commercial navigation system, while protecting and enhancing 
the river's environmental values.
    Unfortunately, the President's fiscal year 2008 budget represents a 
further widening of the gap between the amount requested and the amount 
required for adequate operation and maintenance of the navigation 
system. In fiscal year 2006, the gap between the President's request 
and the Corps' capability was $52.14 million. In fiscal year 2008, this 
shortfall has increased to $92.18 million. For segments of the Upper 
Mississippi System, this will mean multiple years during which 
resources have not supported even baseline operation and maintenance, 
resulting in an increasing backlog, elimination of important stream 
gages, and a growing risk of failures and service interruptions. 
Responses to these continued fiscal pressures may include reductions in 
lock operating hours and cancellations of ongoing contracts. Funding 
beyond the President's request is needed to restore basic service 
levels, coordinate major maintenance with major rehabilitation at L&D 
11 and 19, and undertake a variety of other critical O&M work.
    The UMRBA supports increased funding for O&M of the Upper 
Mississippi and Illinois River System to meet routine operation and 
maintenance needs, and to address the growing unfunded maintenance 
backlog. The Upper Mississippi River System is simply too valuable to 
invite disaster through chronic underfunding of basic O&M. For fiscal 
year 2008, O&M funding totaling $279.41 million is needed on the Upper 
Mississippi River System to address ongoing needs and critical backlog 
items.

                       INLAND WATERWAYS USER FEES

    In releasing the President's fiscal year 2008 budget request for 
the Corps of Engineers, Assistant Secretary of the Army John Woodley 
announced that the administration plans to propose a new inland 
waterways user fee. There are many important unknowns, including most 
notably the form and magnitude of this new fee and its relationship to 
the existing inland waterways fuel tax, authorized as part of the 1986 
Water Resources Development Act. Given the lack of specifics, the UMRBA 
has not taken a position, but would urge Congress to proceed with great 
care in response to any such proposal. The impacts on operators and 
shippers are potentially profound and issues such as economic 
disruption, equity among waterways beneficiaries, and implications for 
the Nation's intermodal system must be fully understood and evaluated. 
The UMRBA States would be very concerned with any proposal that would 
undermine the vitality and efficiency of the Upper Mississippi River 
System, which is so central to the region's economy.
                                 ______
                                 
 Prepared Statement of the Mississippi Valley Flood Control Association
    My name is M.V. Williams and I reside in Germantown, Tennessee. I 
am the president of the West Tennessee Tributaries Association. It is 
also my pleasure and a privilege afforded me by the other nine members 
of the executive committee, to serve as chairman of that committee that 
has the responsibility for the management and direction of the 
Mississippi Valley Flood Control Association in accordance with 
policies duly adopted by the association. This statement on behalf of 
the association presents their views on the fiscal year 2008 budget for 
the Mississippi River and Tributaries Project and their request for 
$500 million.
    Since there are new members on the subcommittee and to refresh the 
memory of those that have served previously, I will briefly discuss the 
Mississippi Valley Flood Control Association which is an agency 
composed almost entirely of public bodies having local responsibility 
for flood control, drainage, bank stabilization and navigation 
improvements in parts of Illinois, Kentucky, Tennessee, Missouri, 
Arkansas, Mississippi and Louisiana. Our members are public officials 
who for the most part are elected by the people. The Association 
represents practically all of the levee and drainage districts, 
municipalities, port and harbor commissions and other State agencies in 
the Mississippi River Valley. These organizations and agencies are 
political subdivisions of the various States in which they are 
organized and function. We provide an agency through which all the 
people of the Mississippi River Valley may speak and act jointly on all 
flood control, navigation, bank stabilization and major drainage 
problems. We have appeared before the subcommittee and served the 
people in the Mississippi River Valley for over 70 years.
    Our Association is comprised of a very large group of individuals 
who are businessmen, property owners, conservationists, farmers, 
attorneys, doctors, wildlife enthusiasts, engineers, accountants, 
environmentalists, civil servants and elected officials from all 
political parties. Since 1935, our president and two vice presidents 
have been members of the United States Congress, a fact of which we are 
extremely proud. Our president this year is that great public servant 
and one of the real heroes of the Vietnam conflict, the Congressman 
from the Third District of Iowa, the Honorable Leonard Boswell. Our two 
vice presidents are Congressmen Roger Wicker from Mississippi and 
Edward Whitfield from Kentucky.
    The value of flood control and economic reality of the need for 
waterborne commerce is well known by the Congress. Therefore I will not 
go into details but for the sake of confirming what is already known, 
let me tell you that since 1928 the Nation has invested $12 billion for 
the Mississippi River and Tributaries Project. For that investment the 
Nation has realized a return of $425.5 billion that includes savings on 
transportation costs and flood damages prevented. That's a return on 
investment of $35.50 for every $1 invested. What a wonderful investment 
of taxpayers' dollars.
    Today we find ourselves again faced with an inadequate budget from 
the executive department but fortunately for us and the other citizens 
of this great Nation, the Congress in its wisdom has always recognized 
the value of such an investment and has consequently, with only rare 
exceptions, appropriated more dollars for the Mississippi River and 
Tributaries Project than has been requested by the executive 
department. We hope that happens again this year.
    We are in Washington for our 72nd Annual Spring Meeting and as 
improbable as it may seem we find the U.S. Army Corps of Engineers 
under fire from within the executive branch and of course the so-called 
environmentalists. This is the same Corps of Engineers that has in 
peace time for over 225 years built the infrastructure that is the envy 
of the rest of the civilized world and that has also defended our 
Nation in times of conflict. My war of participation was World War II 
which as all of you know involved numerous amphibious landings. Leading 
each of those landings were the U.S. Army Amphibious Engineers who were 
competently led by General Daniel Noce who served as District Engineer 
in the Memphis District during the record flood of 1937. General Noce 
was well aware of the training and experience that both young army 
officers and civilians had gained while part of the Mississippi Valley 
Division and he recruited the cadre of the amphibious engineers from 
that group. In fact the Corps of Engineers has defended our Nation from 
the War for Independence to the war on terror, from Bunker Hill to 
Baghdad. I know of no justification for the attitude that some have 
taken concerning the Corps of Engineers. This attitude is having and 
will continue to have a detrimental impact on economic development in 
this country.
    I am well aware that the purpose of this statement is to discuss 
fiscal year 2008 appropriations for the Mississippi River and 
Tributaries Project but I believe it is appropriate to mention at this 
time new policies being implemented by the Federal Emergency Management 
Agency in their map modernization program. This program is a 5-year 
program that was initiated in 2004 and consists of updating the flood 
insurance rate maps. We've been told that 20 percent of all counties 
nationwide are scheduled for update.
    Of great concern to us and should be of concern to everyone is a 
new zone designation known as Zone X (shaded) which will be all the 
areas outside the 100-year flood zone protected by levees. In the case 
of the lower Mississippi River Valley, from approximately Cape 
Girardeau, Missouri to the Gulf of Mexico, this is an area of some 
35,000 square miles or 22,400,000 acres. A warning will be placed on 
the new flood insurance rate maps that will, among other things, state 
that within this area communities should issue evacuation plans and 
encourage property owners to purchase flood insurance.
    This large area that is protected not only by the Mississippi River 
and Tributaries Levees but also by the entire Comprehensive Flood 
Control System consisting of not only levees but bank revetments, river 
cut-offs, floodways, floodwalls, diversions, flood storage reservoirs, 
control structures and many other improvements that have made certain 
that no Mississippi River Main Line Levee has failed since 1928, the 
year that the Congress directed the Corps of Engineers to build the 
system. There have been a number of floods of record proportions since 
then but not one failure. The design flood for the Mississippi River 
and Tributaries Project is to protect against a flood predicted by the 
weather bureau as the ``maximum possible'' and provides for the 
disposal of all water predicted as possible.
    This unwarranted new Zone X on Flood Insurance Rate Maps will have 
a dramatic and costly burden on all the residents, businesses and 
industries along the lower Mississippi River and its tributaries and 
this economic disaster will be felt over this entire Nation. The 
language proposed will frighten lenders and companies looking for 
industrial sites, impact crop loans as well as causing millions of 
dollars to be spent for unnecessary flood insurance premiums. This is 
such a serious matter that we would suggest strongly that the 
appropriate congressional committees hold hearings on this matter to 
determine what if any engineering basis the Federal Emergency 
Management Agency used to develop this new policy.
    Again, this statement is in support of the Mississippi River and 
Tributaries Appropriations and our request is being made only after 
careful and thoughtful considerations of the amount necessary to 
prevent the cancellation of on going contracts and to do the minimum 
amount of required maintenance work. The Mississippi River and 
Tributaries Project is unique in the fact that the appropriations 
allocated are used not only for construction but also for maintenance 
and not only for flood control but also for navigation and includes all 
environmental considerations including mitigation and restoration as 
well as irrigation and water supply.
    It is our collective opinion that to meet the requirements outlined 
above, the appropriation for the Mississippi River and Tributaries 
Project for fiscal year 2008 should be $500 million. In order to 
preserve the integrity of our flood control and navigation systems that 
represents a large investment of national assets and to preserve and 
enhance the natural environment of the Mississippi River Valley and to 
continue the authorized work that is underway, the appropriation 
request is justified and should be considered as a wise investment in 
the future well-being of this great Nation.
    As we noted in our statement last year, of utmost importance to the 
overall success of the project is the completion of the work in both 
Louisiana and Mississippi to bring the deficient levees up to the 
required grade and section. Additional funds are needed here and 
because of the scope of the work the restrictions on reprogramming 
authorities and the elimination of the use of continuing contracts both 
need to be waived in order that this work to protect thousands of acres 
of valuable land and the lives of thousands of citizens can be 
completed as rapidly as possible. Because of these restrictions, 
contracts had to be shut down at considerable cost and the loss of 
valuable construction time. We ask the subcommittee for help in this 
important matter.
    With the help of the Congress over the years, we have made progress 
in the Mississippi River Valley and for that we are extremely grateful 
but there is much to be done before the job is completed and the people 
in the valley and the entire Nation may reap the benefits of what has 
been done.
    We have attached a sheet to this statement that reflects the 
Mississippi Valley Flood Control Association's request for 
Appropriations for the Mississippi River and Tributaries Project for 
fiscal year 2008.

  MISSISSIPPI VALLEY FLOOD CONTROL ASSOCIATION--FISCAL YEAR 2008 CIVIL
WORKS REQUESTED BUDGET--MISSISSIPPI RIVER AND TRIBUTARIES APPROPRIATIONS
------------------------------------------------------------------------
                    PROJECT AND STATE                      MVFCA REQUEST
------------------------------------------------------------------------
SURVEYS, CONTINUATION OF PLANNING AND ENGINEERING &
 ADVANCE ENGINEERING & DESIGN:
    Memphis Harbor, TN..................................  ..............
    Germantown, TN......................................  ..............
    Lower Steele Bayou..................................  ..............
    Homochitto River....................................  ..............
    Fletcher Creek, TN..................................  ..............
    Memphis Metro Storm Water Management, TN............  ..............
    Bayou Meto, AR......................................      $2,550,000
    Southeast Arkansas..................................         800,000
    Coldwater Basin Below Arkabutla Lake, MS............         425,000
    Quiver River, MS....................................  ..............
    Spring Bayou, LA....................................         500,000
    Point Coupee to St. Mary Parish, LA.................  ..............
    Atchafalaya Basin Floodway Land Study, LA...........         200,000
    Alexandria, LA to the Gulf of Mexico................       1,950,000
    Morganza, LA to the Gulf of Mexico..................       6,350,000
    Donaldsonville, LA to the Gulf of Mexico............       3,500,000
    Tensas River, LA....................................  ..............
    Donaldsonville Port Development, LA.................  ..............
    Collection & Study of Basic Data....................         495,000
                                                         ---------------
      TOTAL GENERAL INVESTIGATIONS......................      16,770,000
                                                         ===============
CONSTRUCTION:
    St. John's Bayou-New Madrid Floodway, MO............      13,300,000
    Eight Mile Creek, AR................................  ..............
    Helena & Vicinity, AR...............................  ..............
    Grand Prairie Region, AR............................      37,800,000
    Bayou Meto, AR......................................      22,450,000
    West Tennessee Tributaries..........................  ..............
    Nonconnah Creek, TN.................................         500,000
    Wolf River, Memphis, TN.............................  ..............
    August to Clarendon Levee, Lower White River, AR....  ..............
    St. Francis Basin, MO & AR..........................       7,000,000
    Yazoo Basin, MS.....................................      67,125,000
    Atchafalaya Basin, LA...............................      34,000,000
    Atchafalaya Basin Floodway, LA......................      10,894,000
    MS Delta Region, LA.................................         722,000
    Channel Improvements, IL, KY, MO, AR, TN, MS & LA...      64,547,000
    Mississippi River Levees, IL, KY, MO, AR, TN, MS &        98,352,000
     LA.................................................
                                                         ---------------
      SUBTOTAL--CONSTRUCTION............................     356,690,000
      SUBTOTAL--MAINTENANCE.............................     283,669,000
                                                         ---------------
      SUBTOTAL--MISSISSIPPI RIVER & TRIBUTARIES.........     657,129,000
LESS REDUCTION FOR SAVINGS & SLIPPAGES..................     157,129,000
                                                         ---------------
      GRAND TOTAL--MISSISSIPPI RIVER & TRIBUTARIES......     500,000,000
------------------------------------------------------------------------

                                 ______
                                 
 Prepared Statement of the Louisiana Department of Transportation and 
                          Development (LADOTD)
    On behalf of LADOTD and the Association of Levee Boards of 
Louisiana (ALBL), we present recommendations for fiscal year 2008 
appropriations for U.S. Army Corps of Engineers Civil Works Projects in 
Louisiana.
    Hurricanes Katrina and Rita in 2005 totally devastated Louisiana 
and had a ripple effect throughout the Nation. Over 1,500 Louisiana 
residents lost their lives, over 200,000 homes were severely damaged or 
destroyed, and over 400,000 Louisiana citizens are still displaced. The 
true cost of these storms in lives, property, and wetlands loss--will 
never be known. Coastal Louisiana may never fully recover. All of the 
coastal infrastructure--ports, oil and gas pipelines, refineries (two 
large refineries in St. Bernard parish were out of service for months), 
chemical plants, production platforms, offshore supply depots, 
navigation channels, locks, etc.--were severely damaged whether or not 
they were protected by levees. The impact on Louisiana left a ripple 
effect on the economy of the whole country which cannot be ignored. 
Energy prices increased significantly because of the disruptions in 
production, delivery and refining. Damages to Louisiana's deepwater 
ports, which export nearly 60 percent of the Nation's grain products, 
disrupted agricultural markets worldwide. This was truly a national 
tragedy requiring a national response. The levee system intended to 
protect the New Orleans area completely failed. Worse yet, the project 
remains incomplete 40 years after authorization--due mostly to funding 
constraints. Ironically, one protection system, Larose to Golden 
Meadow, survived these two storms, but has been completely overlooked 
for accelerated funding. Present funding is not enough to bring it to 
100 percent completion, and when complete, this would still not provide 
protection against the 1 percent chance of flooding.
    It is equally tragic that another protection system still remains 
incomplete and vulnerable to a project flood. The Mississippi River and 
Tributaries Project (MR&T) has been underway since 1928 and isn't 
scheduled for completion until beyond 2031. Flooding from the 
Mississippi River would produce damages of a magnitude much greater 
than what was experienced during Hurricanes Katrina and Rita. A far 
greater portion of the State would be impacted. For these reasons, we 
consider the administration's proposed budget for the MR&T Project of 
$260 million for fiscal year 2008 to be entirely unacceptable. This 
amount is not enough to adequately fund the Corps projects in the New 
Orleans and Vicksburg Districts, let alone the entire Mississippi River 
Valley. We strongly support the Mississippi Valley Flood Control 
Association's request of $500 million for the MR&T Project.
    Supplemental funding has previously been received to complete 
numerous on-going hurricane protection projects and the SELA project. 
This is not enough, however, to provide protection against the 1 
percent chance, or greater, of flooding in any given year. We 
respectfully encourage this committee to look at newly revised cost 
estimates and necessary funding required to raise the system to a 
protection level above the original project storm. Although these 
projects are important, there are still numerous other projects for 
navigation, flood protection, and coastal restoration that either are 
unfunded or lack adequate funds to continue in a timely manner. In 
making the following funding recommendations for Louisiana projects 
regarding specific construction, studies, and operation and maintenance 
items, we would hope that Congress and the administration will honor 
their prior commitments to infrastructure development and continue to 
fund our requests. We believe these types of water resources projects 
are the most cost effective projects in the Federal budget, having to 
meet stringent economic criteria not required by other programs.

   FLOOD CONTROL, NAVIGATION, HURRICANE PROTECTION & WATER RESOURCES 
  PROJECTS SUMMARY OF RECOMMENDED APPROPRIATIONS FISCAL YEAR 2008 FOR 
                               LOUISIANA

    LADOTD & ALBL requests funding for the following projects that 
differs from what is in the fiscal year 2008 administration budget or 
is a project of particular importance for the State. Those items that 
have been appropriately funded have not been included.

------------------------------------------------------------------------
                                          ADMINISTRATION     LOUISIANA
           LOUISIANA PROJECTS                 BUDGET          REQUEST
------------------------------------------------------------------------
GENERAL INVESTIGATIONS:
    STUDIES:
        Amite River--Ecosystem            ..............      $1,000,000
         Restoration, LA................
        Amite River & Tributaries, LA     ..............       1,000,000
         Bayou Manchac..................
        Atchafalaya River, Bayous Chene,  ..............         500,000
         Boeuf & Black..................
        Calcasieu Lock, LA..............  ..............         600,000
        Calcasieu River Basin, LA.......        $395,000         395,000
        Calcasieu River & Pass            ..............         360,000
         Navigation, LA.................
        Plaquemines Parish, LA..........  ..............         500,000
        Southwest Coastal LA Hurricane    ..............       2,000,000
         Protection, LA.................
        St. Charles Parish Urban Flood    ..............         400,000
         Control, LA....................
        West Baton Rouge Parish, LA.....  ..............         543,000
        West Shore--Lake Pontchartrain,   ..............         778,000
         LA.............................
        Bossier Parish Levee & FC.......  ..............         300,000
        Cross Lake Water Supply.........  ..............         384,000
    PED:
        Bayou Sorrel Lock, LA...........       1,371,000       2,500,000
        Port of Iberia, LA..............  ..............       1,500,000
        Southwest, AR (AR, LA)..........  ..............         400,000
    NEW STUDIES:
        Baptiste Collette, LA...........  ..............         300,000
        Donaldsonville Port Development.  ..............         500,000
        Red River Waterway, LA-12 Foot    ..............         100,000
         Channel........................
    CAP:
        Port Fourchon Enlargement, LA...  ..............       1,300,000
    CONSTRUCTION GENERAL:
        Comite River, LA................  ..............      24,000,000
        East Baton Rouge Parish, LA.....  ..............       2,000,000
        Inner Harbor Navigation Canal     ..............       6,000,000
         Lock, LA.......................
        Larose to Golden Meadow.........  ..............      14,700,000
        Southeast, LA...................  ..............     169,000,000
        Red River Below Den Dam (AR, LA)  ..............      10,000,000
        Red River Emergency (AR, LA)....  ..............       6,000,000
        J Bennett Johnston WW, Miss. R.        1,500,000      15,000,000
         to Shreveport..................
        Ouachita River Levees...........  ..............       1,600,000
        Ouachita River Bank               ..............       5,000,000
         Stabilization..................
    OPERATIONS & MAINTENANCE GENERAL:
        Atchafalaya River, Bayous Chene,       6,717,000      42,000,000
         Boeuf & Black..................
        Arataria Bay Waterway...........  ..............       3,800,000
        Bayou Lacombe...................  ..............         900,000
        Bayou Lafourche.................       1,273,000       3,500,000
        Bayou Segnette..................  ..............       1,500,000
        Bayou Teche.....................         209,000         209,000
        Calcasieu River & Pass..........      16,108,000      32,000,000
        Calcasieu River Dredge Disposal        2,000,000       2,000,000
         Plan...........................
        Freshwater Bayou................       5,570,000      11,000,000
        Gulf Intracoastal Waterway......      21,851,000      36,000,000
        Houma Navigation Canal..........         135,000       4,200,000
        Mermentau River.................       1,685,000       6,300,000
        Mississippi River, Baton Rouge        59,424,000     120,000,000
         to the Gulf....................
        Mississippi River Gulf Outlet at         290,000       6,000,000
         Veince.........................
        Waterway Empire to the Gulf.....  ..............       5,000,000
        WW. IWW to Bayou Dulac..........  ..............         250,000
        Ouachita & Black Rivers (AR, LA)       9,865,000      20,143,000
        Bayou Bodcau....................         766,000       2,226,000
        Caddo Lake......................         196,000         261,000
        Wallace Lake....................         211,000         278,000
        Bayou Pierre....................          35,000          35,000
        J Bennett Johnston Waterway.....      10,431,000      16,471,000
        Lake Providence Harbor..........          25,000         546,000
        Madison Parish Port.............           4,000          81,000
------------------------------------------------------------------------

   MISSISSIPPI RIVER AND TRIBUTARIES PROJECT SUMMARY OF RECOMMENDED 
             APPROPRIATIONS FISCAL YEAR 2008 FOR LOUISIANA

    LADOTD & ALBL requests funding for the following projects that 
differs from what is in the fiscal year 2008 administration budget or 
is a project of particular importance for the State. Those items that 
have been appropriately funded have not been included.

------------------------------------------------------------------------
                                          ADMINISTRATION     LOUISIANA
           LOUISIANA PROJECTS                 BUDGET          REQUEST
------------------------------------------------------------------------
FC, MR&T GENERAL INVESTIGATIONS:
    Alexandria to the Gulf..............        $200,000      $1,950,000
    Donaldsonville to the Gulf..........  ..............       3,500,000
    Morganza to the Gulf, PED...........  ..............       6,500,000
    Spring Bayou Area, LA...............  ..............         500,000
NEW STUDIES:
    Atchafalaya Basin Floodway System            200,000         200,000
     Land Study, LA.....................
FC, MR&T CONSTRUCTION:
    Atchafalaya Basin...................      23,800,000      34,000,000
    Atchafalaya Basin Floodway System...       1,800,000      10,000,000
    Channel Improvement (N.O. Dist.)....      15,747,000      15,747,000
    Mississippi Delta Region............  ..............         722,000
    Mississippi River Levees, LA (N.O.         5,267,000      10,200,000
     Dist.).............................
    Mississippi River Levees (AR, LA,         18,500,000      47,300,000
     MS) (V. Dist.).....................
    Morganza to the Gulf (pending         ..............      14,000,000
     authorization in WRDA).............
    Channel Improvement (AR, LA, MS) (V.      23,585,000      29,585,000
     Dist.).............................
FC, MR&T MAINTENANCE:
    Atchafalaya Basin...................      11,019,000      28,000,000
    Atchafalaya Basin Floodway System...       2,291,000       2,700,000
    Baton Rouge Harbor (Devil's Swamp)..          17,000          70,000
    Bayou Cocodrie and Tributaries......          41,000          41,000
    Bonnet Carre Spillway...............       2,367,000       5,000,000
    Channel Improvement (N.O. Dist.)....      12,025,000      16,500,000
    Dredging (N.O. Dist.)...............         700,000         700,000
    MS Delta Region.....................         125,000         225,000
    Old River...........................       9,045,000      20,000,000
    Mississippi River Levees (LA) (N.          3,702,000       3,774,000
     Dist.).............................
    Mississippi River Levees (AR, LA,          2,100,000       2,700,000
     MS) (V. Dist.).....................
    Revetments & Dikes (AR, LA, MS) (V.       15,400,000      15,400,000
     Dist.).............................
    Boeuf & Tensas Rivers...............       2,667,000       6,047,000
    Red River Backwater.................       2,500,000       6,550,000
    Lower Red River.....................          45,000          45,000
------------------------------------------------------------------------

    Please note that the needed additional funds to give the New 
Orleans Area that protection that is needed is not included in the 
above request. We believe it is proper that the funds for repairing and 
improving the existing hurricane protection systems continue to be 
provided through emergency supplemental appropriations so as not to 
detract from projects that must go through the normal appropriations 
process. We solicit your continued support in providing the 
supplemental funding necessary to complete the work.
                                 ______
                                 
        Prepared Statement of the Little River Drainage District

    My name is Dr. Sam M. Hunter, DVM of Sikeston, Missouri. I am a 
veterinarian, landowner, farmer and resident of Southeast Missouri.
    I am the President of the Little River Drainage District, the 
largest such entity in the Nation. Our District serves as an outlet 
drainage and flood control District to parts of seven counties in 
Southeast Missouri. We provide flood control protection to a sizable 
area of Northeast Arkansas as well. Our District is solely tax 
supported by more than 3,500 private landowners in Southeast Missouri.
    My remarks will be directed toward the President's budget for the 
Civil Works portion of the U.S. Army Corps of Engineers for fiscal year 
2008. The President's budget requests of $4.871 billion for Civil Works 
by the U.S. Army Corps of Engineers for the next fiscal year is totally 
inadequate and only represents 60 percent of the Corps capability. An 
amount of $8 billion is more realistic.
    Those funds when properly expended are INVESTMENTS yielding a 
return of substantial benefits to the American taxpayer throughout this 
Nation. They are used to prevent flooding to much of our valuable 
farmland, to industrial sites, and to upgrade our ever aging locks and 
dam system on our navigable streams which will prevent unscheduled lock 
closures, modernize our hydro-electric plants, and restore some of our 
environmental assets.
    Over 50 percent of our locks and dams are 50 to 60 years old. These 
facilities have exceeded their life expectancy by 10 to 20 years. In 10 
years that percentage will have grown to almost 60 percent unless 
improvements are made.
    We are witnessing unscheduled lock outages now and to continue as 
we are that number will continue to grow if we do not step forward with 
a specific plan to restore, rebuild and reconstruct lock and dams on 
our waterway systems. We already have leaking gates, crumbling lock 
walls and frequent unscheduled closures occurring which hurt and 
curtail economic growth to our Nation. Parts are actually having to be 
made for some repairs because manufactures no longer exist and such 
parts are not available.
    Today our fuel needs alone are 75 percent dependent upon foreign 
oil sources. Waterborne transportation is far more energy efficient 
than truck or rail modes. Our Nation, our consumers and our producers 
will all benefit from more use of our river navigation upgrades. Less 
fuel would be needed to move mass quantities of goods, lives would be 
saved due to the more safer means of transportation, the many miles of 
highways throughout our Nation would not be adversely impacted, our 
environment would be enhanced because of less exhaust emissions and our 
farmers, manufacturers and other producers could compete with the world 
markets.
    Further, to have a modern water transportation system would provide 
an excellent means to transport mass military equipment and troops 
throughout our Nation should such a need arise. How sad it would be to 
have an aging lock and dam system in place and fail during such a 
crisis. This Nation can construct modern infrastructure for others but 
seems to let its own taxpayers depend upon ancient features with no 
immediate plans to improve them. We can and we must set in order a 
program to modernize this valuable part of our infrastructure. It is 
past time to get this done.
    Our competing nations such as Brazil and China have committed much 
more for fiscal year 2008. China has committed more than $12 billion to 
their waterway infrastructure yet we are pleading for only two-thirds 
of that amount. We have a backlog within this part of our 
infrastructure of improvements that has grown from $200 million in 1998 
to more than $1 billion in fiscal year 2008 just for operations and 
maintenance. We appreciate very much Congress stepping forward as they 
did in 2006 and increasing the needed funds substantially. You should 
not be burdened with this task each year.
    We believe Congress needs to intervene and reverse the trend of 
OMB, and of past and present administrations. We have not seriously 
invested in our waterway infrastructure for decades but we must. Local 
economies will be affected positively by these investments. Local labor 
will be used as well as local businesses who will provide needed 
materials.
    We believe the improvement and modernization and the growth of our 
waterway infrastructure should be done, but we believe it needs to be 
done with a plan. We believe the Corps of Engineers has the capability 
and they should and must develop a plan for construction of any new 
projects. We also believe they need to complete projects that are 
already started before we begin new ones. We also believe the backlog 
of operations and maintenance of the existing system needs to be done 
before any new starts are authorized, however, there may be some 
emergency new starts which would be wise to commence provided the funds 
are available and provided a systematic modernization is ongoing. We 
must get away from ``knee jerk'' emergency type repairs and 
replacements.
    We must prioritize projects and eliminate projects that are not 
returning benefits back to this Nation. We must have our Federal 
Government live up to the commitments they have made to the citizens of 
this Nation. Private interest have made many investments based upon 
faith in the Federal Government following through on what it promised 
and what they had been told would be provided to them within a 
reasonable period of time. If a project is to be funded entirely by the 
Federal Government as directed by Congress then we must fulfill that 
obligation. If local interest is to provide a portion of the cost then 
local interest must meet that mandate as well. However, we do not need 
to hold any projects up because local interests are not financially 
able to meet their cost sharing needs provided that project returns a 
benefit back to this Nation. Let us move forward with a plan and let us 
work that plan and rebuild and bring our waterway infrastructure into 
the 21st Century properly.
    I will now turn my comments to one specific project which the U.S. 
Army Corps of Engineers has been authorized by Congress to administer, 
namely, the Mississippi River and Tributaries Project (MR&T) and one 
portion of that project which benefits the citizens of Southeast 
Missouri and Northeast Arkansas, namely, the St. Francis Basin Project.
    The Corps of Engineers has a stated capability of $500,000,000 for 
fiscal year 2008 in the MR&T Project. We ask you to give consideration 
to provide funding levels at $500,000,000. This will provide some 
limited but needed new construction and some major maintenance. The 
President's budget contains only $260,000,000 which is far from 
adequate.
    The Mississippi River and Tributaries Project was authorized 
following a record flood in 1927 that inundated more than 26,000 square 
miles of the Mississippi River Valley. Over 700,000 people were left 
homeless and many lives were lost. Most, if not all, East-West commerce 
was stopped and it adversely effected the economy and the environment 
of our Nation. After that devastating event Congress in its infinite 
wisdom passed a bill and established the Mississippi River and 
Tributaries Project (MR&T) and authorized the U.S. Army Corps of 
Engineers to develop a plan to prevent such a disaster in the future. 
This project currently is a separate line item in the budget. To remove 
it will destroy the continuity of this much needed project.
    To date the MR&T Project has prevented flood damages and provided 
other benefits resulting in acurrent benefit/cost ratio of $28 to $1. 
Truly this is a wise investment for our Nation. Likewise countless 
lives have been spared from the construction of this great project. 
Also our Nation receives nearly $1 billion of navigational benefits 
each year due to this project. It is readily seen this project had 
merit from the beginning and continues to reward the citizens not only 
of the valley itself but of the citizens of the entire Nation. It is a 
wise investment for this country and it is good for our economy. It 
will be a vital link to the defense of our Nation in the event of an 
attack by our enemies. This project must be targeted for swift 
completion and then properly maintained. What an investment for our 
great Nation this project has been! Find any other project of any 
nature which approaches this ratio.
    Further, we are very concerned and strongly opposed to the 
administration's recommendation in its fiscal year 2008 budget to use 
funds from the Inland Waterways Trust Fund to pay for part of the 
operation and maintenance cost of the inland waterways as well as some 
construction. The trust fund was established in 1978 and was to be made 
available for construction and rehabilitation for navigation on the 
inland and coastal waterways not for operations and maintenance. This 
is not what our Nation agreed to in 1978 and is not what was renewed 
under WRDA in 1986. We petition this Congress to stand up and have our 
Nation live up to the promises made to the contributors of that trust 
fund and abide by past agreements.
    Investing in our waterways is a great way to stimulate the economy 
and at the same time be building and making investments into a system 
for the future which will return back more dollars than expended. We 
petition you to give this vital industry of our Nation a strong 
endorsement and do all you can to ensure our waterways systems stay 
competitive with our foreign competitors.
    At a time when we need to stimulate our economy, at a time that 
safety from terrorist activities needs to be enhanced and at a time 
that many in our Nation are concerned about cleaner air, cleaner water, 
etc., we have a great opportunity to meet those needs. We must make 
sound investments into our infrastructure which will give back more 
monies to the taxpayers of this country than was invested while at the 
same time be increasing our defense capabilities should our Nation be 
attacked from an outside force.
    Our District, as well as other Drainage and Levee Districts in 
Missouri and Arkansas, is located within the St. Francis River Basin. 
This is a project item of the Mississippi River and Tributaries 
Project.
    The St. Francis Basin Project was authorized by Congress in 1928 
for improvements by the U.S. Army Corps of Engineers. The initial 
authorization was justified by a projected benefit-cost ratio of 2.4:1. 
Today this ratio is 3.6:1 and the project is still not completed. As 
you can see this also has been a wise investment of our Federal tax 
dollars. Few projects, such as this one, where funds are provided by 
the Federal Government return more than they cost. This one does and we 
need to complete it in a timely fashion.
    Local interests have done their part in providing rights of way, 
roads, utilities and the like. Our government now needs to fulfill 
their obligatory part of the project and bring it to completion as 
quickly as possible.
    The amount allocated for maintenance in the St. Francis Basin 
Project for fiscal year 2007 was $880,000,000. This is a funding level 
that permits adequate funding to maintain the features within that 
project on which the Corps of Engineers has made improvements and which 
it is the responsibility of the Federal Government to maintain. As a 
matter of information the Memphis District U.S. Army Corps of Engineers 
was able to execute 99 percent of the available funds for maintenance 
within that project for fiscal year 2006.
    The President's budget for fiscal year 2008 contains no monies for 
construction whereas the Corps of Engineers has the capability of $7 
million. We request $7 million for construction for this project.
    The President's budget has $4.725 million for maintenance for the 
St. Francis Project. The Corps of Engineers has a stated capability of 
$23.475 million.
    We believe the Corps could adequately use $15 million each year for 
maintenance within this basin. We realize there are budgetary 
restraints this year and respectively request Congress to approve 
funding for maintenance in the St. Francis Basin Project for fiscal 
year 2008 in the amount of $23.475 million. This should provide funds 
for adequate maintenance of the features within this basin which need 
attention annually.
    Many positive changes have occurred to and within our sector of our 
Nation because of this project. We who live there welcome these 
changes. We, local interest, in Southeast Missouri and Northeast 
Arkansas want this project brought to completion and adequately 
maintained. We have waited over 70 years and we believe it is time to 
complete this wise investment for our Nation.
    A question that could and should be asked is where will we get the 
money? True, our Nation is facing record deficits but surely some of 
the monies planned to be sent abroad to build, restore and improve 
other nations' infrastructure could be reduced substantially and be 
used for the benefit of our taxpayers and Nation. Please give this 
proposal some thought.
    I wish to thank you very much for your time and kind attention and 
for taking the time to review the above. We would be very appreciative 
of anything this committee can do to help us improve our environment, 
improve our livelihood, and improve the area in which we live and work 
which ultimately is good for America. We are also very appreciative of 
all this committee has done for us in the past. We trust you will hear 
our pleas once more and act accordingly.
                                 ______
                                 
          Prepared Statement of the City of San Marcos, Texas

             SAN MARCOS RIVER ECOSYSTEM RESTORATION PROJECT

    Mr. Chairman and members of the subcommittee: on behalf of the city 
of San Marcos, Texas, I am pleased to submit this statement in support 
of our request for an earmark of $439,000 for a U.S. Army Corps of 
Engineers Section 206 Ecosystem Restoration Project for the San Marcos 
River in the fiscal year 2008 bill.
    The city of San Marcos seeks this allocation for the development of 
the Detailed Project Report/Integrated Environmental Assessment (DPR/
EA) as the next step toward completing a $4,520,000 project with 
Federal and local match to restore degraded aquatic and terrestrial 
habitat in the upper San Marcos River.
    San Marcos is located in south central Texas in Hays County, 
approximately 30 miles southwest of Austin, Texas. The proposed 
restoration area is located within the city limits of San Marcos along 
and within the San Marcos River and its headwaters. The study area 
consists of an approximate 1.0-mile stretch of the San Marcos River and 
associated riparian corridor. The ecosystem restoration project will 
restore and enhance degraded aquatic and terrestrial habitat along and 
within the San Marcos River.
    The spring-fed San Marcos River offers one of rarest aquatic 
ecosystems found in the United States. The headwaters of the river 
originate from underground springs from the Edwards Aquifer, producing 
millions of gallons of crystal clear, constant temperature water daily. 
The river creates a unique ecosystem supporting five threatened or 
endangered species that live in the San Marcos River (San Marcos 
salamander, fountain darter, Texas wild rice, San Marcos gambusia, and 
Comal Springs riffle beetle).
    The San Marcos River has attracted humans to its banks for more 
than 12,000 years, making San Marcos one of the oldest continuously 
inhabited places in the United States. The city of San Marcos has 
strived for the past 40 years to protect the river by establishing 
parks along its banks and restricting intense development.
    Still, the constant use of the popular river over many decades has 
impacted the riparian and aquatic habitat of the river, requiring 
restoration of this valuable waterway. The San Marcos River and 
associated tributaries have experienced aquatic ecosystem degradation 
due to a variety of human factors. Impoundment of water upstream, in 
its tributaries, and within the study area has altered the normal flow 
regime of the San Marcos River. The native aquatic plant communities 
within the San Marcos River have been diminished by invasive exotic and 
generalist plant species.
    Increased nutrient and sediment loads from overland surface flow, 
tributary runoff, non-point sources and storm water drainage have 
reduced water quality and in-stream habitat values within the river. 
The majority of the bottomland plant community within the study area is 
highly disturbed and fragmented due primarily to urban encroachment, 
installation of hardpan surfaces, recreational disturbance and invasion 
of non-native plant species.
    This degradation has resulted in the loss of high quality in-stream 
and riparian habitat for plant and wildlife species within the study 
area. The proposed restoration plan will help restore aquatic and 
terrestrial habitat that has degraded due to human activity, including 
critical habitat for the federally-listed species.
    The city of San Marcos applied for U.S. Army Corps of Engineers 
Section 206 Aquatic Restoration Grant funds in 2002 to turn around the 
trend toward degradation in our river corridor. A Preliminary 
Restoration Plan (PRP) was developed by the U.S. Army Corps of 
Engineers and submitted in March 2003. The PRP was approved and moved 
forward to the next phase, the development of a Detailed Project Report 
(DPR).
    However, at this stage, Federal funding for this program was 
reduced, placing the city of San Marcos PRP on the backburner. Funding 
this project is essential to restore integrity to the San Marcos River, 
the central point of our community for tourism, recreation, and quality 
of life.
    This project will directly benefit the environment by increasing 
biodiversity, carrying capacity, stability and productivity of native 
plant and wildlife species endemic to the area. Additional benefits 
include improvement of existing recreational opportunities, enhancement 
of water quality, and improvement of natural aesthetics.
    Specifically, the project will restore and sustain approximately 
22.0 acres of riparian woodland habitat, 6.0 acre of tall grass prairie 
habitat, 4.0 acres of emergent wetland habitat and 16.0 acres of 
aquatic habitat within a highly urbanized area. The total project cost 
is estimated at $4,520,000, which will be cost-shared 65 percent 
Federal Government and 35 percent city of San Marcos. The Federal share 
is $2,938,000 with a local match of $1,582,000.
    The only COE Section 206 projects that will now receive funding are 
those that have congressional support.
    Therefore, we ask you to approve a special appropriation earmark 
for $439,000 for the San Marcos River Section 206 Project to fund the 
restoration. Thank you for your consideration of this project.
                                 ______
                                 
    Prepared Statement of the St. Francis Levee District of Arkansas

                           EXECUTIVE SUMMARY

    The Mississippi Valley Flood Control Association fiscal year 2008 
Civil Works budget, Mississippi River and Tributaries Appropriations--
Requesting Appropriations of $7 million for Construction and $23.475 
million for Maintenance and Operation in the St. Francis Basin Project 
and a total of $500 million for the Mississippi River and Tributaries 
Project. The reason for this seemingly large request is to be assured 
that the Corps of Engineers may fully fund on-going and future 
construction contracts as directed in the fiscal year 2006 
appropriations act. Our requests are detailed in the tables attached to 
this statement.

                         BACKGROUND INFORMATION

    My name is Rob Rash, and my home is in Marion, Arkansas, located on 
the west side of the Mississippi River and in the St. Francis Basin. I 
am the CEO/Chief Engineer of the St. Francis Levee District of 
Arkansas. Our District is the local cooperation organization for the 
Mississippi River and Tributaries Project and the St. Francis Basin 
Project in Northeast Arkansas. Our District is responsible for the 
operation and maintenance of 160 miles of Mississippi River Levee and 
75 miles of St. Francis River Tributary Levee in Northeast Arkansas.
    The St. Francis Basin is comprised of an area of approximately 
7,550 square miles in Southeast Missouri and Northeast Arkansas. The 
basin extends from the foot of Commerce Hills near Cape Girardeau, 
Missouri to the mouth of the St. Francis River, 7 miles above Helena, 
Arkansas, a total distance of 235 miles. It is bordered on the east by 
the Mississippi River and on the west by the uplands of Bloomfield and 
Crowley's Ridge, having a maximum width of 53 miles.
    The Mississippi River and Tributaries Project and the St. Francis 
Basin Project provide critical flood protection to over 2,500 square 
miles in Northeast Arkansas alone. This basin's flood control system is 
the very lifeblood of our livelihood and prosperity. Our resources and 
infrastructure are allowing the St. Francis Basin and the Lower 
Mississippi Valley to develop into a major commercial and industrial 
area for this great Nation. The basin is quickly becoming a major steel 
and energy production area. The agriculture industry in Northeast 
Arkansas and the Lower Mississippi Valley continues to play an integral 
role in providing food and clothing for this Nation. This has all been 
made possible because Congress has long recognized that flood control 
in the Lower Mississippi Valley is a matter of national interest and 
security and has authorized the U.S. Army Corps of Engineers to 
implement a flood control system in the Lower Mississippi Valley that 
is the envy of the civilized world. With the support of Congress over 
the years, we have continued to develop our flood control system in the 
Lower Mississippi Valley through the Mississippi River and Tributaries 
Project and for that we are extremely grateful.
    Although, at the current level of project completion, there are 
areas in the Lower Mississippi Valley that are subject to major 
flooding on the Mississippi River. The level of funding that has been 
included in the President's Budget for the overall Mississippi River 
and Tributaries Project is not sufficient to adequately fund and 
maintain this project. The level of funding will require the citizens 
of the Lower Mississippi Valley to live needlessly in the threat of 
major flood devastation for the next 30 years. Timely project 
completion is of paramount importance to the citizens of the Lower 
Mississippi. Ten and Fifteen Mile Bayou improvements are just one of 
many construction projects necessary for flood relief in the St. 
Francis Basin. Ten and Fifteen Mile Bayou improvements were 
reauthorized by Congress through the Flood Control Act of 1928, as 
amended. Section 104 of the Consolidated Appropriation Act of 2001 
modified the St. Francis Basin to expand the project boundaries to 
include Ten and Fifteen Mile Bayous and shall not be considered 
separable elements. Total project length of 38 miles includes Ten and 
Fifteen Mile Bayou, Ditch No. 15 and the 10 Mile Diversion Ditch that 
provide flood control for West Memphis and Vicinity. Without additional 
funds, construction would be delayed and West Memphis and Vicinity will 
continue to experience record flooding as seen December 17, 2001. West 
Memphis and Vicinity would experience immediate flood relief when the 
first item of construction is completed.
    Next I feel that it is imperative that I mention at this time new 
policies being implemented by the Federal Emergency Management Agency 
in their Map Modernization Program. This is a 5-year program that was 
initiated in 2004 and consists of updating the Flood Insurance Rate 
Maps. We've been told that 20 percent of all counties nationwide are 
scheduled for update.
    Of great concern to us and should be of concern to everyone is a 
new Zone Designation known as Zone X (Shaded) which will be all the 
areas outside the 100-year flood zone protected by levees. In the case 
of the Lower Mississippi River Valley, from Cape Girardeau, Missouri to 
the Gulf of Mexico, this is an area of some 35,000 square miles or 
22,400,000 acres. A warning will be placed on the new Flood Insurance 
Rate Maps that will, among other things, state that within this area, 
communities should issue evacuation plans and encourage property owners 
to purchase flood insurance.
    This large area is protected by the Mississippi River and 
Tributaries Levees but also by the entire Comprehensive Flood Control 
System consisting of not only the well designed, well constructed, well 
maintained, massive levees but also bank revetments, river cut-offs, 
floodways, floodwalls, diversions, flood storage reservoirs, control 
structures and many other improvements that have made certain that no 
Mississippi River Main Line Levee has failed since 1928, the year that 
Congress directed the Corps of Engineers to build the system. There 
have been a number of floods of record proportions since 1928 but not 
one failure. The American Taxpayer has invested billions of dollars in 
this system and their money up to now has been well spent. The Federal 
Emergency Management Agency seems to think it has been wasted. Not so!
    The Design Flood for the Mississippi River and Tributaries Project 
is to protect against a flood predicted by the Weather Bureau as the 
``Maximum Possible'' and provides for the disposal of all water 
predicted as possible. This unwarranted new Zone X (Shaded) on Flood 
Insurance Rate Maps will have a dramatic and costly burden on all the 
residents, businesses and industries along the Lower Mississippi River 
and its Tributaries and this economic disaster will be felt over this 
entire Nation. The language proposed will frighten Lenders and 
Companies looking for Industrial Sites, impact Crop Loans as well as 
causing millions of dollars to be spent for unnecessary flood insurance 
premiums. This is such a serious matter that we would suggest strongly 
that the appropriate congressional committees hold hearings on this 
matter to determine what if any engineering basis the Federal Emergency 
Management Agency used to develop this new policy.

                            PROPOSED FUNDING

    We support the amount of $500 million requested by the Mississippi 
Valley Flood Control Association for use in the overall Mississippi 
River and Tributaries Project. This is the minimum amount that the 
Executive Committee of the Association feels is necessary to maintain a 
reasonable time line for completion of the overall Mississippi River 
and Tributaries Project. Also, the amounts that have been included in 
the President's budget for the St. Francis Basin Project; construction, 
operation and maintenance have not been sufficient to fund critical 
projects. These declined amounts have resulted in a significant backlog 
of work within the St. Francis Basin. Therefore, our District is 
requesting capabilities of $7 million for the St. Francis Basin Project 
construction funds and $23.475 million for the St. Francis Basin 
operation and maintenance funds. The amounts requested for the St. 
Francis Basin Project are a part of the total amounts requested for the 
Mississippi River and Tributary Appropriations of the Civil Works 
Budget.

                               SUMMATION

    With the tragedy that struck the Gulf Coast, we must now turn our 
attention to the future and attempt to make certain that at least the 
flooding does not take place again. We can prevent that; the Dutch, the 
English and the Italians have done it and so can we if we treat flood 
control as something that we must do. The citizens of this great Nation 
deserve it.
    There are four anomalies of nature that cause death and destruction 
to our Nation. They are: (1) earthquakes; (2) hurricanes; (3) 
tornadoes; and, (4) floods. The first three we can do very little if 
anything about except to prepare for the worst. We can build protection 
against floods, against the ``maximum probable flood,'' one that has an 
``improbable occurrence but nevertheless a remotely possible one.''
    In order to provide such protection we believe that three things 
must be done.
    First, the environmental laws, or at least the way they are 
interpreted for flood control projects, must be changed or we stand to 
lose more lives and have another absolute environmental catastrophe 
such as the one we have witnessed in New Orleans and along the Gulf 
Coast. Second, cancel all cost-sharing for flood control projects 
unless we do intend to only protect those that can afford it and ignore 
those that can not. Third, relax the requirements for the benefits-to-
cost ratio for flood control projects for one reason, it is impossible 
to assign a dollar value to a human life. It is our opinion that these 
things must be done, for without flood control, nothing else really 
matters.
    Again, we thank the Congress and this committee for all your help 
in the past and thank you in advance for your kind considerations of 
our requests for fiscal year 2008.

------------------------------------------------------------------------
                    PROJECT AND STATE                      MVFCA REQUEST
------------------------------------------------------------------------
Wappapello Lake, MO.....................................     $14,000,000
Mississippi River Levees................................      34,538,000
Mississippi River Channel Maintenance...................      72,549,000
Memphis Harbor, TN......................................       2,866,000
Helena Harbor, AR.......................................         563,000
Greenville Harbor, MS...................................         372,000
Vicksburg Harbor, MS....................................         445,000
St. Francis River & Tribs., AR..........................      23,475,000
White River Backwater, AR...............................       1,440,000
North Bank, Arkansas River, AR..........................         270,000
South Bank, Arkansas River, AR..........................         257,000
Boeuf & Tensas Rivers, LA...............................       7,447,000
Red River Backwater, LA.................................       5,500,000
Yazoo Basin, Sardis Lake, MS............................      14,784,000
Yazoo Basin, Arkabutla Lake, MS.........................       9,975,000
Yazoo Basin, Enid Lake, MS..............................      10,927,000
Yazoo Basin, Grenada Lake, MS...........................      11,299,000
Yazoo Basin, Greenwood, MS..............................       2,438,000
Yazoo Basin, Yazoo City, MS.............................         694,000
Yazoo Basin, Main Stem, MS..............................       3,525,000
Yazoo Basin, Tributaries, MS............................       1,018,000
Yazoo Basin, Whittington Aux Channel, MS................         191,000
Yazoo Basin, Big Sunflower, MS..........................       2,196,000
Yazoo Basin, Yazoo Backwater, MS........................         979,000
Lower Red River, South Bank, LA.........................          80,000
Bonnet Carre, LA........................................       4,857,000
Old River, LA...........................................      21,243,000
Atchafalaya Basin, LA...................................      28,641,000
Atchafalaya Basin Floodway, LA..........................       2,609,000
Baton Rouge Harbor Devil's Swamp, LA....................         717,000
Mississippi Delta Region, LA............................         225,000
Bayou Cocodrie & Tribs, LA..............................          41,000
Inspection of Completed Works...........................       1,987,000
Mapping.................................................       1,521,000
                                                         ---------------
      TOTAL MR&T MAINTENANCE............................     283,669,000
                                                         ===============
CONSTRUCTION:
    Surveying and Mapping...............................      16,770,000
    St. John's Bayou-New Madrid Floodway, MO............      13,300,000
    Grand Prairie Region, AR............................      37,800,000
    Bayou Meto, AR......................................      22,450,000
    Nonconnah Creek, TN.................................         500,000
    St. Francis Basin, MO & AR..........................       7,000,000
    Yazoo Basin, MS.....................................      67,125,000
    Atchafalaya Basin, LA...............................      34,000,000
    Atchafalaya Basin Floodway, LA......................      10,894,000
    MS Delta Region, LA.................................         722,000
    Channel Improvements, IL, KY, MO, AR, TN, MS & LA...      64,547,000
    Mississippi River Levees, IL, KY, MO, AR, TN, MS &        98,352,000
     LA.................................................
                                                         ---------------
      SUBTOTAL--CONSTRUCTION............................     356,690,000
      SUBTOTAL--MAINTENANCE.............................     283,669,000
      SUBTOTAL--MISSISSIPPI RIVER & TRIBUTARIES.........     657,129,000
LESS REDUCTION FOR SAVINGS & SLIPPAGES..................     157,129,000
                                                         ---------------
      GRAND TOTAL--MISSISSIPPI RIVER & TRIBUTARIES......     500,000,000
------------------------------------------------------------------------

                                 ______
                                 
   Prepared Statement of the Board of Mississippi Levee Commissioners
    Mr. Chairman and members of the committee: This statement is 
prepared by Peter Nimrod, Chief Engineer for the Board of Mississippi 
Levee Commissioners, Greenville, Mississippi, and submitted on behalf 
of the Board and the citizens of the Mississippi Levee District. The 
Board of Mississippi Levee Commissioners is comprised of 7 elected 
commissioners representing the counties of Bolivar, Issaquena, Sharkey, 
Washington, and parts of Humphreys and Warren counties in the Lower 
Yazoo Basin in Mississippi. The Board of Mississippi Levee 
Commissioners is charged with the responsibility of providing 
protection to the Mississippi Delta from flooding of the Mississippi 
River and maintaining major drainage outlets for removing the flood 
waters from the area. These responsibilities are carried out by 
providing the local sponsor requirements for the congressionally 
authorized projects in the Mississippi Levee District. The Mississippi 
Levee Board and the Mississippi Valley Flood Control Association 
support an appropriation of $500 million for fiscal year 2008 for the 
Mississippi River & Tributaries Project. This is the minimum amount 
that we consider necessary to allow for an orderly completion of the 
remaining work in the Valley and to provide for the operation and 
maintenance, as required, to prevent further deterioration of the 
completed flood control and navigation work.
    It is apparent that the administration loses sight of the fact that 
the Mississippi River & Tributaries Project provides protection to the 
Lower Mississippi Valley from waters generated across 41 percent of the 
continental United States. These waters flow from 31 States and 2 
provinces of Canada and must pass through the Lower Mississippi Valley 
on its way to the Gulf of Mexico. We will remind you that the 
Mississippi River & Tributaries Project is one of, if not the most cost 
effective project ever undertaken by the United States Government. The 
foresight of the Congress in their authorization of the many features 
of this project is exemplary.
    The many projects that are part of the Mississippi River & 
Tributaries Project not only provide protection from flooding in the 
area, but the award of construction contracts throughout the Valley 
provides assistance to the overall economy of this area that is also 
encompassed by the Delta Regional Authority. The employment of the 
local workforce and purchases from local vendors by the contractors 
help stabilize the economy in one of the most impoverished areas of our 
country.
    Thanks to the additional funding provided by the Congress over the 
last several years over and above the administration's budget, work on 
the Mainline Mississippi River Levee Enlargement Project is continuing. 
Of the original 69 miles of deficient levees in the Mississippi Levee 
District, 12.7 miles of work has been completed, 19.3 miles are 
currently under contract, and another 7.9 miles will be awarded in 
fiscal year 2008. Right of way has been acquired and the bids for 3.4 
miles of work were opened in November 2005. With the combined crippling 
effect of the elimination of continuing contracts and the restrictions 
on reprogramming authorities, this item was terminated. Of the 19.3 
miles currently under contract, the Corps had to negotiate a work 
``slow-down'' because of a lack of sufficient funds for the contractor 
to work at full performance. This will push completion of these 
deficient areas out another year! We are requesting $98.35 million for 
construction on the Mainline Mississippi River Levees in the Lower 
Mississippi Valley Division which will allow the Vicksburg and Memphis 
districts to keep existing contracts on schedule and award contracts to 
avoid any future unnecessary delays in completing this vital project. 
We are all well aware that the Valley some day will have to endure a 
Project Flood, we just don't know when. We must be prepared.
    The President's fiscal year 2008 budget did not include funding for 
any construction projects within the Yazoo Basin. These are all 
projects authorized and funded so wisely by the Congress. This action 
is especially difficult to understand during a time when our Nation 
needs an economic boost. All of these projects are encompassed in the 
footprint of the Delta Regional Authority, an area recognized by the 
Congress as requiring special economic assistance to keep pace with the 
rest of our great Nation. We can not lose sight of the fact that all of 
these projects are required to return more than $1 in benefits for each 
$1 spent. No project authorized and funded by the Congress should be 
indiscriminately terminated without the benefit of having the 
opportunity to complete the study process and subsequent construction 
after complying with the Corps Policy and Guidelines.
    The Final Report for the Yazoo Backwater Project will be released 
this year. The Yazoo Backwater Project will provide economic and 
environmental benefits to parts of six counties in the south 
Mississippi Delta. This project will build a pump that will evacuate 
floodwater that is generated over 4,093 square miles in the Mississippi 
Delta. The pump will lower the 100 year flood event by 4.5 feet thereby 
reducing urban and rural structural damages, providing benefits to the 
remaining agricultural lands, and reducing the frequency and duration 
of floods. Reforestation easements will be purchased on up to 55,600 
acres of existing agricultural land which will provide benefits in 
every environmental category--wetlands, terrestrial, aquatics, and 
waterfowl resources as well as vastly improving water quality. The 
recommended plan for the Yazoo Backwater Project will balance economics 
with the environment. This is a model project that should be the 
standard for future public works projects in the United States. We are 
requesting this project be funded by the Congress in the amount of $15 
million. These funds will allow the Corps to begin acquisition of the 
reforestation easements and initiate the award of the pump supply 
contract.
    The Draft Supplemental Environmental Impact Statement for the Big 
Sunflower River Maintenance Project will be released later this year. 
This maintenance project will restore flood control capacities to 130 
miles of channels by removing sediment that has built up over the past 
40 years since the channels were originally improved. Our request for 
$2.196 million will allow right-of-way acquisition to continue and for 
the award of the first dredging contract. The residents in the 
Mississippi Delta continue to suffer damages from flooding while they 
wait for this maintenance project to reach their area.
    Work on the Delta Headwaters Project has proven effective in 
reducing sediments to downstream channels. To discontinue this project 
will only increase sediment in downstream channels diminishing water 
quality, reducing the level of protection to the citizens of the Delta 
and increasing required maintenance. We are requesting $25 million to 
continue this project.
    The Upper Yazoo Project is critical to the Delta. The Corps of 
Engineers operates 4 major flood control reservoirs on the bluff hills 
overlooking the Mississippi Delta. These reservoirs hold back heavy 
spring rains and must have adequate outlet channel capacity to pass 
this excess runoff during the summer and fall months. Without 
completion of the Upper Yazoo Project, the Corps is forced to hold 
flood water from the previous spring, thereby reducing the ability to 
provide protection from the current year's flood water. We urge the 
Congress to provide $22.5 million allowing construction to continue and 
the award of additional channel enlargement items. With this 
appropriation, work can be completed to Glendora which will provide 
relief to Marks, Mississippi.
    Maintenance of completed works cannot be overlooked. The four flood 
control reservoirs overlooking the Delta have been in place for 50 
years and have functioned as designed. Required maintenance must be 
performed to avoid any possibility of failure during a flood event. We 
are asking for $10.875 million for Arkabutla Lake, $15.042 million for 
Sardis Lake, $10.927 million for Enid Lake, and $11.38 million for 
Grenada Lake. Additional funding will be used to place rip rap, add 
needed infrastructure, and repair and upgrade existing infrastructure 
around all the lakes.
    We are requesting $34.5 million for Maintenance of the Mainline 
Mississippi River Levees in the Lower Mississippi Valley Division which 
will provide for repair of levee slides, slope repair, and repair of 
the gravel maintenance roadway which is so vital to access during high 
water.
    I have reviewed a great deal of information regarding the needs of 
providing flood protection to our area. Another major feature of the 
Mississippi River & Tributaries Project relates to navigation interests 
along the Mississippi River. Several of our ports have been informed 
that the President's budget does not include enough funding for 
Critical Harbor Dredging necessary to keep these harbors opened for 
navigation. Our port commissioners have been notified that lack of 
annual dredging will cause these ports to be a hazard to navigation and 
be shut down. This will impact the movement of over 4.5 million tons of 
cargo being shipped on our waterways annually from these ports. This 
equates to an additional 180,000 truck loads per year of products on 
our highways. It is imperative that funding be made available for 
Critical Harbor Dredging to allow continued operation of these 
facilities, which are key features to the economic growth of the 
region.
    The Conference Report for Energy & Water Development Appropriations 
Act, 2006 funded the MR&T Project with $400 million. Unfortunately, the 
Conference Report included detrimental language that has crippled the 
Corps ability to get the MR&T Project done in a timely, efficient, and 
economically feasible way. The Conference Report eliminated the 
Continuing Contracts Clause that allowed the Corps to bid projects 
without all the funding in place before the project starts. This will 
significantly slow down all of our Corps projects. There have been no 
new starts in fiscal year 2006 or fiscal year 2007 for our critical 
Levee Enlargement & Berms Project because of this elimination. The 
Corps has used Continuing Contracts since 1922! The Corps of Engineers 
must be able to utilize Continuing Contracts on the MR&T Project.
    The Conference Report also included Reprogramming Authorities 
restrictions which is limiting the Corps of Engineers ability to shift 
monies within the MR&T Project. Reprogramming Authorities allow money 
to move from one project that is behind schedule to another project 
that is ahead of schedule. The reprogramming authority is now very 
limited. Money is being wasted to ``slow-down'' and stop existing on-
going work because of the language! The Reprogramming Authority 
restrictions must be relaxed for the MR&T Project in order for the 
Corps of Engineers to make maximum use of appropriations that Congress 
provides.
    In conclusion, the Conference Report for 2006 was a record year for 
funding levels for the MR&T Project. The inclusion of the detrimental 
language of Reprogramming Authority restrictions and the elimination of 
Continuing Contracts Clause has crippled the Corps of Engineers ability 
to wisely spend that money that Congress has so wisely appropriated. We 
must remove this detrimental language in the fiscal year 2008 
appropriations. The President's fiscal year 2008 budget for the MR&T 
Project provides only $260 million which is terribly inadequate and 
will not allow the Corps to proceed in the most economical manner.
    On another note, new policies are being implemented by the Federal 
Emergency Management Agency (FEMA) in their Map Modernization Program. 
A new zone designation will show a shaded ``Zone X'' outside the 100 
year flood zone but protected by levees. The entire Mississippi Delta 
is protected by the levee! An attached ``Warning'' will be on new Flood 
Insurance Rate Maps (FIRM) stating that the levee could fail! This will 
have a dramatic & costly affect to residents, businesses & industries 
along the Lower Mississippi River. New businesses will be frightened to 
build in a ``flood zone.'' Flood insurance rates will increase. Our 
Mainline Mississippi River Levee system has not failed since the Corps 
built the current levee system in 1928! This is a needless and reckless 
act by FEMA as a result of failures on some hurricane protection levees 
in New Orleans in 2005 during Hurricane Katrina.
    As members of the Congress representing the citizens of our Nation 
who live with the Mississippi River everyday, you clearly understand 
both the benefits provided by this resource, and the destructive force 
that must be controlled during a flood. On behalf of the Mississippi 
Levee Board, I cannot express enough, our appreciation for your efforts 
in providing adequate funding over the last several years that has 
allowed construction to continue on our much needed projects and thank 
you in advance for your kind considerations of our requests for fiscal 
year 2008.
                                 ______
                                 
           Prepared Statement of the City of Arlington, Texas

    Mr. Chairman and members of the subcommittee: On behalf of the city 
of Arlington, Texas, I am pleased to submit this statement for the 
record in support of our request for funding in the amount of $9.75 
million in the fiscal year 2008 Appropriation Bill for Energy and Water 
Development to support the city's continued efforts to reduce flood 
damage, improve public safety, reduce erosion and sedimentation, and 
enhance wildlife habitat and passive recreation within the Johnson 
Creek corridor through Arlington, Texas.

                       PROJECT EXECUTIVE SUMMARY

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

                          PROJECT DESCRIPTION

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

                             FUNDING NEEDS

    The modified plan, which includes completed components of the 1999/
2005 plan and new Johnson Creek projects as described above, has a 
total estimated cost of $79,997,666, of which 35 percent will be 
provided by the city.
    For fiscal year 2008, the city of Arlington, Texas is seeking $9.75 
million from the U.S. Army Corps of Engineers Programs account through 
your Energy and Water Development Appropriations Subcommittee.
    Thank you for your consideration of our request.
                                 ______
                                 
              Prepared Statement of the State of Illinois

    The State of Illinois supports the following projects in the 
administration's fiscal year 2008 budget proposal:

------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
SURVEYS:
    Illinois River Basin Restoration....................        $400,000
    Great Lakes Navigation System Study.................         800,000
CONSTRUCTION:
    Chain of Rocks Canal................................       4,500,000
    Chicago Shoreline...................................       9,000,000
    Des Plains River--Phase 1...........................       6,620,000
    East St. Louis Flood Protection Rehab...............       2,500,000
    Illinois Waterway, Lockport Lock & Dam (Dam Safety).      20,445,000
    McCook and Thornton Reservoir.......................      33,500,000
    Miss River Btwn. Ohio & Mo Rivers (Reg. Works)......       2,100,000
    Olmsted Lock & Dam..................................     104,000,000
    Upper Mississippi River Restoration.................      23,464,000
------------------------------------------------------------------------

                       OPERATION AND MAINTENANCE

    Illinois supports the Corps' budget for continued satisfactory 
maintenance and operation of navigation, flood control and multipurpose 
projects, as well as adequate manpower for public service activities 
related to the water resources in and bordering the State. Although, 
the administration's budget request contains nearly $142.4 million for 
operation and maintenance for the Corps Districts in Illinois, the 
administration has modified the structure of the O&M account by 
shifting the funding for rehabilitation projects to this account. This 
skews the O&M account funds, and the disaggregated numbers form the 
administration's budget indicate the Corps' future viability and 
commitment to maintain the inland waterway system, water supply and 
recreational reservoirs, and to maintain an operational and forecast 
dependent streamgaging network, can severely be impacted. As an 
example, there is a need for an additional $14.7 million to satisfy 
dredging needs and the backlog of maintenance for the Illinois River 
Waterway. Backlog of maintenance items for the Mississippi River in 
Rock Island and St. Louis Corps Districts is an additional $27.5 
million.
    Illinois also supports the administration's funding to the Corps 
for Lake Michigan diversion accounting. However, we request an 
additional $350,000 for the Corps to ensure that they have adequate 
appropriations to reconvene the Technical Committee for the accounting 
system to fulfill their dual measurement and accounting 
responsibilities.
    Additionally, the contamination in the Inner Harbor area of 
Waukegan Harbor warrants designation of the harbor as an ``Area of 
Concern'' by the International Joint Commission. There is an ongoing 
USEPA Legacy Act project to identify an acceptable disposal site for a 
total clean up of the contaminants in the inner Harbor. The Corps of 
Engineers is a partner in that effort. One million dollars is the 
minimum needed to complete maintenance dredging of the contaminated 
outer harbor shoaling.

                     ADDITIONAL FUNDING PRIORITIES

    The State of Illinois also recommends that additional funding be 
provided for the following projects, which are listed in the general 
priority order, in the fiscal year 2008 Corps of Engineers' budget:
Chicago Sanitary & Ship Canal Dispersal Barrier
    The State of Illinois has been working closely with the Chicago 
District and other Great Lakes agencies at both the Federal and State 
level to keep Asian Carp from reaching the Great Lakes through the 
Chicago Waterway system. We entered into a Project Cooperation 
Agreement with the Corps to construct a second, more effective and 
permanent electrical barrier in the Chicago Sanitary and Ship Canal 
using the Corps' section 1135 program, and have contributed $1.8 
million in State funds along with $475,000 from the other 7 Great Lakes 
States to match the Corps' contribution. Also, there has been unanimous 
agreement throughout the Great Lakes community that Congress needs to 
authorize and fund the U.S. Army Corps of Engineers to construct, 
operate and maintain a barrier control system. However, for the first 
time since Congress authorized the Corps to construct an aquatic 
nuisance species demonstration barrier in 1990 at 100 percent Federal 
cost, the President's proposed budget is asking the State of Illinois 
to contribute 25 percent of the total cost to make this barrier 
permanent. The President's proposed budget is also requiring the State 
of Illinois to contribute an additional $1,725,000 (this is in addition 
to the $1.8 million Illinois has already contributed along with 
$475,000 from the other 7 Great Lakes States) to allow the Corps to 
complete construction of Barrier II. Finally, this budget requires 
Illinois to fully fund the operation and maintenance of both barriers, 
which the Corps has estimated could run as high as $1.0 million per 
year. Therefore, the State of Illinois urges that the Corps receives 
$1.1 million to start construction on making the demonstration barrier 
permanent, and $6.9 million to complete Phase IIB of the Barrier II 
construction at full Federal expense, and an additional $1.0 million to 
carry out the operation and maintenance of both Dispersal Barrier 
projects annually.
The Chicago Harbor Lock Rehabilitation
    The Chicago River Lock Rehabilitation is an important project for 
the State of Illinois. It will reduce leakage of Lake Michigan water 
into the Chicago Sanitary and Ship Canal and thus will reduce Illinois' 
Lake Michigan diversion. Reducing leakage at the Chicago River Lock is 
specifically mentioned in the list of activities in the 1996 Memorandum 
of Understanding that Illinois, the other Great Lakes States and the 
U.S. Department of Justice signed to resolve the dispute over Illinois' 
alleged over diversion of Lake Michigan water. As part of the move to 
lakefront diversion accounting, improved control of Lake Michigan water 
used at the Chicago River Lock is essential. This project is also 
needed to ensure the safe operation of the lock itself. This lock is 
the second busiest lock in the country, and while almost all of the 
traffic is recreational, its value and importance to Chicago and the 
State is enormous. Currently, no funding is included in the fiscal year 
2008 budget for this purpose. To rehabilitate the lock in fiscal year 
2008, Illinois requests $7.0 million, which would primarily be used to 
fund the fabrication of two new gates for the west end of the lock.
Illinois River Basin Restoration
    Section 519 of Water Resources Development Act 2000 authorized the 
Illinois River Basin Restoration. The fiscal year 2008 budget request 
proposes $400,000 in General Investigations funds for a comprehensive 
plan. However, the State of Illinois requests that this be increased to 
$2.0 million in General Investigation funds to complete much of the 
comprehensive plan that has been developed under other authorizations. 
Additionally, the State of Illinois requests $8.5 million of 
Construction General funds to continue construction in fiscal year 2008 
of the projects that were authorized in section 519 as providing 
substantial restoration and environmental benefits through the 
comprehensive plan.
Des Plaines River--Phase One
    Section 101(b-10) of the Water Resources Development Act of 1999 
authorized Phase I of the Upper Des Plaines River Flood Control Project 
at a total cost of $68.3 million for the implementation of the six 
recommended projects. The Federal share is approximately $44.4 million 
(65 percent) and the estimated non-Federal cost is $23.9 million. While 
$6.6 million is designated to the levee 37 element of this project in 
this year's budget request, we are requesting an additional $3.0 
million in the fiscal year 2008 budget to continue work with the 
remaining elements of the project.
Upper Mississippi and Illinois Waterway System Navigation Project
    It has been more than 2 years since the Corps completed the 
feasibility phase of the Upper Mississippi and Illinois Waterway System 
Navigation Study, issuing the final feasibility report and Chief's 
Report in 2004. While Congress has not authorized construction yet, it 
has provided funding for Pre-construction, Engineering and Design 
(PED). Thus, Illinois is requesting an appropriation of $24.0 million 
for the Corps of Engineers to continue PED, and if authorized for 
construction, we recommend construction funding of $16.0 million. The 
proposed fiscal year 2008 budget contains no funding for this project.
Chouteau Island (Ecosystem Restoration)
    The Corps of Engineers, St. Louis District, is continuing the 
feasibility study for ecosystem restoration for the Chouteau Island, 
Illinois, project authorized under section 514 (Missouri and Middle 
Mississippi Rivers Enhancement Project) of the Water Resources 
Development Act of 1999 (Public Law 106-53). The project is focusing on 
ecosystem restoration on IDNR-owned land on Chouteau, Gabaret, and 
Mosenthein Islands in Madison County. Illinois requests an 
appropriation of $150,000 for the Corps of Engineers to complete the 
Feasibility Study and initiate Design for the Chouteau Island, 
Illinois, project. The fiscal year 2008 budget contains no specific 
funding for this project.
Peoria Riverfront Development
    We request the addition of $250,000 in General Investigations funds 
to finalize the design of the Lower Island of the Peoria Riverfront 
project. The fiscal year 2008 budget contains no funding for this 
purpose. The increase is needed to meet the design and construction 
schedule.
Des Plaines River Feasibility Study--Phase Two
    An expansion of the Phase I Upper Des Plaines River study was 
authorized in section 419 of the Water Resources Development Act of 
1999. The projected $25,000,000 in average annual damages, which will 
remain in the tributary floodplains of the Des Plaines River after the 
completion of Phase I project construction, is the basis for the 
expanded study of Phase II. State of Illinois, Lake County, Cook 
County, and Kenosha County all have appropriated funds under contract 
for cost sharing in the Phase II study effort. Currently, the fiscal 
year 2008 budget contains no funding to continue the Phase II study 
effort. Illinois requests an appropriation of $500,000 of General 
Investigation funds to continue the feasibility study in fiscal year 
2008.
East St. Louis & Vicinity (Ecosystem Restoration & Flood Damage 
        Protection)
    The Corps of Engineers, St. Louis District, is continuing design of 
the project for ecosystem restoration and flood damage reduction at 
East St. Louis and Vicinity, Illinois (East Side Levee and Sanitary 
District), authorized by section 204 of the Flood Control Act of 27 
October 1965 (Public Law 89-298). The project is focusing on ecosystem 
restoration within the American Bottoms area. The Water Resources 
Development Act of 2000 modified section 204 of the Flood Control Act 
of 1965, to make ecosystem restoration a project purpose. Accordingly, 
ecosystem restoration will be included with the flood control project. 
Illinois requests an appropriation of $700,000 for the Corps of 
Engineers to continue the Pre-Engineering and Design and documentation 
of the East St. Louis and Vicinity Project. Currently, the fiscal year 
2008 budget contains no funding for this purpose.

                          KANKAKEE STATE LINE

    We urge you to include $300,000 to fund the design and 
implementation phase of the State Line Kankakee Aquatic Ecosystem 
Restoration Act Project that was authorized under section 206 of the 
Water Resources Development Act of 1996, as amended. We are concerned 
that the funding level for section 206 Continuing Authorities Projects 
requested in the President's budget for fiscal year 2008 is not 
adequate to insure continuation of this project.
Wood River Levee
    The Wood River Drainage and Levee District protects an urban and 
industrial area in the Mississippi River flood plain in Madison County, 
Illinois, upstream of the city of East St. Louis. Problems with the 
integrity of the flood protection system were documented during the 
1993 flood including unexpected seepage problems that had to be handled 
as an emergency. The proposed project addresses both design deficiency 
and reconstruction issues. The design deficiency portion of the project 
has been approved; the reconstruction portion requires new 
authorization. The recommended actions are required to maintain the 
system's authorized level of protection. Illinois requests an 
appropriation of $700,000 for the design deficiency portion of the 
project for the Corps of Engineers to execute a Project Cooperation 
Agreement, construct a portion of the relief wells, and continue relief 
well design. The fiscal year 2008 budget contains no funding for this 
project.
Melvin Price Lock and Dam
    The State of Illinois also requests $750,000 funding for the Corps 
to continue the cost-shared recreation facilities with the city of 
Alton and $2,400,000 to continue design and construction of punch list 
items. The fiscal year 2008 budget contains no funding for this 
project.
Upper Mississippi River Environmental Management Plan
    Section 509 of the Water Resources Development Act of 1999 
reauthorized the Upper Mississippi River System Environmental 
Management Program (EMP). In its 20 years of existence, the EMP has 
become the most significant effort to restore and protect the natural 
resource values of the Upper Mississippi River. While $23.64 million is 
in this year's budget request, we believe this level of funding is 
below the point that Corps can efficiently continue with the program. 
To pursue this program efficiently, we believe this program should be 
pursued at the reauthorized level of $33.25 million as described in 
section 509 of the Water Resources Development Act of 1999.
Upper Mississippi River Comprehensive Plan
    Section 459 of the Water Resources Development Act of 1999 
authorized the Upper Mississippi River Comprehensive Plan for the Corps 
to develop a 3-year study to address water resource and related land 
resource problems and opportunities in the Upper Mississippi and 
Illinois River Basins. We are requesting that $686,000 be provided in 
the Corps of Engineers General Investigations funding to advance the 
Upper Mississippi Comprehensive Plan to completion.
Sections 204, 206, and 1135 Enhancement Projects
    Section 204, 206, and 1135 programs offer a wide range of 
opportunities to address fish and wildlife habitat needs which exist 
due to past Corps projects and ongoing ecosystem and dredging 
activities. The section 206 program provides a proactive tool for 
Federal participation in aquatic ecosystem restoration initiatives 
where the need for the aquatic restoration activity does not have to 
directly relate to a prior Corps sponsored project. The State of 
Illinois strongly urges full funding of these continuing authorities.
                                 ______
                                 
Prepared Statement of the Salt River Pima-Maricopa Indian Community and 
                       the City of Mesa, Arizona

    Chairman Dorgan, Ranking Member Domenici, and distinguished members 
of the subcommittee, thank you for allowing us to testify on behalf of 
the Salt River Pima-Maricopa Indian Community (SRPMIC) and the city of 
Mesa in support of a fiscal year 2008 appropriation of $1.6 million for 
the Va Shly'ay Akimel, Arizona, project of the U.S. Army Corps of 
Engineers. This project will restore a degraded stretch of the Salt 
River in central Arizona, and it is critically important to the 
environmental ecosystem for the tribe, the city, and the region.
    Construction of dams on the Salt River has damaged vegetation and 
wetlands along the Salt River basin. The Va Shly'ay Akimel project will 
restore ecosystem functions and value to a 14-mile reach of the river, 
within the Indian Community and the City of Mesa. The restoration 
project will improve approximately 1,487 acres of habitat, including 
883 acres of cottonwood/willow community, 380 acres of mesquite bosque, 
200 acres of wetlands, and 24 acres of Sonoran Desert scrub shrub. 
Restoration of this resource is particularly significant within the 
urban setting because riparian areas in the Southwest represent only 1 
percent of the landscape, yet the survival of 75-90 percent of wildlife 
in the West is dependant on riparian areas. In Arizona, over 90 percent 
of riparian areas have been lost due to impacts from European 
settlement and urbanization.
    Mr. Chairman, because of this subcommittee's efforts, over $4 
million has been appropriated for the feasibility and preconstruction 
engineering and design phases of the Va Shly'ay Akimel project over the 
last 6 fiscal years. We are extremely grateful for the subcommittee's 
ongoing support of the project.
    As a result of this prior funding, substantial progress is being 
made and the work needs to be continued. A Feasibility Study and 
Environmental Impact Study were completed in January 2005, determining 
the preferred plan for environmental restoration. Further project 
accomplishments in fiscal year 2006 and fiscal year 2007 included 
initiation of the design phase, mapping, completion of a value 
engineering study, initiation of Geotech Investigations, and 
preliminary engineering.
    For fiscal year 2008, the Corps has a capability to utilize $1.6 
million for continued PED, but the President's budget proposal only 
includes $658,000 for the project. Therefore, we request that the 
subcommittee will provide this higher level of funding in order to 
contain long-term costs and maintain an optimal project schedule.
    As non-federal sponsors of this project, the SRPMIC and the city of 
Mesa fully recognize the importance of restoring the Salt River's 
environmental integrity as soon as possible. As a consequence, the 
tribe and city are committed to discharging the requisite cost-sharing 
obligations associated with the project at the higher funding level 
next year.
    We also note that, as far as we know, this project is the only one 
in the Nation featuring a joint cost-share agreement between an Indian 
tribe and a local community. This makes it a unique project of the 
Corps of Engineers. We believe that our example of municipal-tribal 
cooperation can serve as a model for future joint projects of tribal 
communities and local governments.
    In conclusion, given the progress thus far, scope, and 
environmental impacts, it is critically important that the Va Shly'ay 
Akimel project remain on an optimal schedule. Again, because the Corps 
has a maximum capability of fully utilizing $1.6 million for continued 
PED on this project in fiscal year 2008, we ask that the subcommittee 
fund that amount.
    Thank you for your favorable consideration.
                                 ______
                                 
   Prepared Statement of the Chambers County-Cedar Bayou Navigation 
                            District, Texas

    We express full support of the inclusion of the full capability of 
the USACE for fiscal year 2008 for construction of the project to 
deepen and widen Cedar Bayou, Texas.
    President's budget included $0.
    Funds needed in fiscal year 2008--$9,056,000 (Construction 
General).

                         HISTORY AND BACKGROUND

    The Rivers and Harbor Act of 1890 originally authorized navigation 
improvements to Cedar Bayou. The project was reauthorized in 1930 to 
provide a 10-foot deep and 100-foot wide channel from the Houston Ship 
Channel to a point on Cedar Bayou 11 miles above the mouth of the 
bayou. In 1931, a portion of the channel was constructed from the 
Houston Ship Channel to a point about 0.8 miles above the mouth of 
Cedar Bayou, approximately 3.5 miles in length. A study of the project 
in 1971 determined that an extension of the channel to project Mile 3 
would have a favorable benefit-to-cost ratio. This portion of the 
channel was realigned from Mile 0.1 to Mile 0.8 and extended from Mile 
0.8 to Mile 3 in 1975. In October 1985, the portion of the original 
navigation project from project Mile 3 to 11 was deauthorized due to 
the lack of a local sponsor.
    In 1989, the Corps of Engineers, Galveston District completed a 
Reconnaissance Report dated June 1989, which recommended a study for an 
improvement to a 12-foot by 125-foot channel from the Houston Ship 
Channel Mile 3 to Cedar Bayou Mile 11 at the State Highway 146 Bridge. 
The Texas Legislature created the Chambers County-Cedar Bayou 
Navigation District in 1997 as an entity to improve the navigability of 
Cedar Bayou. The district was created to accomplish the purpose of 
Section 59, Article XVI, of the Texas Constitution and has all the 
rights, powers, privileges and authority applicable to Districts 
created under Chapters 60, 62, and 63 of the Water Code--Public Entity. 
The Chambers County-Cedar Bayou Navigation District then became the 
local sponsor for the Cedar Bayou Channel.

                PROJECT DESCRIPTION AND REAUTHORIZATION

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

                   JUSTIFICATION AND INDUSTRY SUPPORT

    First and foremost, the channel must be improved for safety. The 
channel is the home to a busy barge industry. The most cost-efficient 
and safe method of conveyance is barge transportation. Water 
transportation offers considerable cost savings compared to other 
freight modes (rail is nearly twice as costly and truck nearly 4 times 
higher). In addition, the movement of cargo by barge is environmentally 
friendly. Barges have enormous carrying capacity while consuming less 
energy, due to the fact that a large number of barges can move together 
in a single tow, controlled by only one power unit. The result takes a 
significant number of trucks off of Texas highways. The reduction of 
air emissions by the movement of cargo on barges is a significant 
factor as communities struggle with compliance with the Clean Air Act. 
Several navigation-dependent industries and commercial enterprises have 
been established along the commercially navigable portions of Cedar 
Bayou. Several industries have docks on at the mile markers that would 
be affected by this much-needed improvement. These industries include: 
Reliant Energy, Bayer Corporation, Koppel Steel, CEMEX, U.S. Filter, 
Recovery Services and Dorsett Brothers Concrete, to name a few.

                       PROJECT COSTS AND BENEFITS

    Congress appropriated $100,000 in fiscal year 2001 for the Corps of 
Engineers to conduct the feasibility study to determine the Federal 
interest in this improvement project. The study indicated a benefit to 
cost ratio of the project of 2.8 to 1. The estimated total cost of the 
project is $16.8 million with a Federal share estimated at $11.9 
million and the non-federal sponsor share of approximately $4.9 
million. Total annual benefits are estimated to be $4.8 million, with a 
net benefit of $3 million. Congress thus far has appropriated nearly 
$1.7 million for this project.
    It has also become an important project for the Port of Houston 
Authority--the Nation's busiest port in foreign tonnage. They hope to 
institute a container on barge facility as soon as this project is 
accomplished. We would appreciate the subcommittee's support of the 
required add of the $9,056,000 for construction of this important 
improvement project. The users of the channel deserve to have the 
benefits of a safer, most cost-effective Federal waterway.

                             CURRENT STATUS

    In July 2006, the project feasibility report was accepted and 
approved by Asst. Secretary of the Army John P. Woodley. The PED will 
be completed early fall this calendar year. The project will then be 
ready for construction. The USACE capability of $9,056,000 for fiscal 
year 2008 represents the total Federal share of construction of the 
project.
                                 ______
                                 
  Prepared Statement of the Brazos River Harbor Navigation District, 
                            Freeport, Texas

    We express full support of the inclusion in the fiscal year 2008 
budget for the full capability of the USACE of $721,000--General 
Investigation; $11,738,000--O&M.
    President's budget included $721,000--General Investigation; 
$5,735,000 O&M.
    Additional funds needed for fiscal year 2008 $4,003,000--O&M.

                         HISTORY AND BACKGROUND

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

                          PROJECT DESCRIPTION

    The fiscal year 2002 Energy and Water Appropriations signed into 
law included a $100,000 appropriation to allow the United States Army 
Corps of Engineers (USACE) to conduct a reconnaissance study to 
determine the Federal interest in an improvement project for Freeport 
Harbor, Texas. The USACE, in cooperation with the Brazos River Harbor 
Navigation District as the local sponsor, has completed that study. The 
report indicates that ``transportation savings in the form of National 
Economic Development Benefits (NED) appear to substantially exceed the 
cost of project implementation,'' thus confirming ``a strong federal 
interest in conducting the feasibility study of navigation improvements 
at Freeport Harbor.'' Congress has to date appropriated over $2.6 
million for this project.
    Port Freeport has the opportunity to solidify significant new 
business for Texas with this improvement project. In addition, the 
improvement to the environment by taking a huge number of trucks off of 
the road, transporting goods more economically and environmentally 
sensitive by waterborne commerce is infinitely important to the 
community, the State, and the Nation. Moreover, the enhanced safety of 
a wider channel cannot be overstated. The emergence of an LNG facility 
at Port Freeport--a joint venture of Conoco-Philips and Cheniere Energy 
further solidifies the importance of keeping this critical waterway at 
optimum depth and width.

                    ECONOMIC IMPACT OF PORT FREEPORT

    Port Freeport is 13th in foreign tonnage in the United States. It 
is responsible for augmenting the Nation's economy by over $7 billion 
annually and generating over nearly 24,000 jobs in Texas, over 7,000 
direct. It also augments the economy by providing annual State and 
local taxes of over $150,000 and an additional of over $300 million in 
Federal tax revenues. Its chief import commodities are bananas, fresh 
fruit and aggregate while top export commodities are rice and 
chemicals. The port's growth has been staggering in the past decade, 
becoming one of the fastest growing ports on the Gulf Coast. Port 
Freeport's economic impact and its future growth is justification for 
its budding partnership with the Federal Government in this critical 
improvement project.

                     DEFENSE SUPPORT OF OUR NATION

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

                     COMMUNITY AND INDUSTRY SUPPORT

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

         WHAT WE NEED FROM THE SUBCOMMITTEE IN FISCAL YEAR 2008

    The administration's budget included the full Corps capability for 
the continuation of the feasibility study which will be conducted at a 
50/50 Federal Government/local sponsor share. This will keep this 
project on an optimal and most cost-efficient time frame for the 
Federal Government and the local sponsor. We respectfully request that 
the full amount in the administration's budget remain in the Senate 
mark-up. In addition, the Corps capability for maintenance dredging for 
fiscal year 2008 is $11.738 million. The administration budget included 
$5.735 million. We respectfully request the addition of $6,002,000 in 
O&M.
                                 ______
                                 
         Prepared Statement of the Red River Valley Association

    Mr. Chairman and members of the committee, I am Wayne Dowd, and 
pleased to represent the Red River Valley Association as its president. 
Our organization was founded in 1925 with the express purpose of 
uniting the citizens of Arkansas, Louisiana, Oklahoma and Texas to 
develop the land and water resources of the Red River Basin, Enclosure 
1.
    The resolutions contained herein were adopted by the Association 
during its 82nd Annual Meeting in Shreveport, Louisiana, on February 
22, 2007, and represent the combined concerns of the citizens of the 
Red River Basin area as they pertain to the goals of the Association. 
Enclosure 2 represents a summary of the projects and funding levels 
supported by the Association.
    The President's budget included $4.871 billion for the civil works 
programs. Even though it is $138 million more than fiscal year 2007 it 
is $458 million less than what Congress appropriated in fiscal year 
2007, $5.329 billion (9 percent reduction). The problem is also how the 
funds are distributed. A few projects received their full ``Corps 
Capability'' to the detriment of many projects that received no 
funding. The $4.871 billion level does not come close to the real needs 
of our Nation. A more realistic funding level to meet the requirements 
for continuing the existing needs of the civil works program is $8 
billion in fiscal year 2008. The traditional civil works programs 
remain at the low, unacceptable level as in past years. These projects 
are the backbone to our Nation's infrastructure for waterways, flood 
prevention, water supply and ecosystem restoration. We remind you that 
civil works projects are a true ``jobs program'' in that up to 85 
percent of project funding is contracted to the private sector; 100 
percent of the construction, as well as much of the architect and 
engineering work. Not only do these projects provide jobs, but provide 
economic development opportunities for our communities to grow and 
prosper, creating permanent jobs.
    There are several policy changes proposed by the administration 
that we have concerns with.
  --Major rehabilitation and endangered species projects were moved 
        from the CG account to the O&M account. When you take out these 
        major rehab projects the O&M proposed budget is actually less 
        than fiscal year 2007. They have ``disguised'' an actual 
        reduction in O&M project funding.
  --They also propose to continue using the Inland Waterway Trust Fund 
        (ITWF) to fund 50 percent of the major rehab projects that were 
        moved to O&M. The IWTF was authorized for CG projects, not O&M. 
        If this is allowed, it will then be easy to recommend that all 
        O&M funding be taken from the IWTF and this can never be 
        allowed to happen.
  --Another proposal allocates O&M funding by region and eliminates 
        funding by individual project. We do not accept this concept 
        since you will loose ownership and identity of each project; 
        therefore, losing grass root support. If this was done, due to 
        reprogramming constraints, then reprogramming should be 
        addressed. Major reprogramming issues are with CG projects, not 
        with O&M projects.
    We have great concerns over the issue of ``earmarks''. Civil Works 
projects are not earmarks! Civil Works projects go through a process; 
reconnaissance study, feasibility study, benefit-to-cost ratio test, 
EIS, peer review, review by agencies, public review and comment, final 
Chief of Engineer approval, authorization by all of Congress in a WRDA 
bill and signed by the President. Soon they may be subject to 
independent review. No other Federal program goes through such a 
rigorous approval process. Each justified project ``stands alone'', are 
proven to be of national interest and should be funded by project. For 
most projects there is local sponsor cost sharing during the 
feasibility study, construction and for O&M. Those who have 
contributed, in most cases--millions of dollars--to the process, must 
have the ability to have a say for their projects to get funded. That 
voice is through their congressional delegation. If Congress provides a 
lump sum appropriation, to the Corps, for GI, CG and O&M, who will 
decide what gets funded? The answer is OMB and the administration. 
Congress will have given up its responsibility to provide a national 
budget. We believe that earmarks are not in the national interest, but 
it does not pertain to the civil works program. For civil works it is 
an issue of priorities and who will determine that, OMB or Congress! We 
hope Congress keeps their responsibility to set civil works priorities.
    We want to express our concern for ``fully funded'' contracts. In 
our fiscal year 2007 testimony we addressed this concern stating: ``It 
is possible that the Corps will have a carryover that exceeds $1 
billion.'' In fact the Corps had a $1.4 billion carryover. Our fear 
became reality and will grow to $3 billion at the end of fiscal year 
2007 if this policy is not changed. Hundreds of projects are neglected 
that could be funded each year and will drastically increase in cost 
when actually done. This is a true waste of Federal funds and unfair to 
local sponsors who also share the increase in cost. Another serious 
consequence is that it neglects the workload distribution of Corps 
Districts. Are we prepared to consolidate and close down Districts that 
do not have the workload to support their current workforce?
    The inland waterway tributary rivers continue to face scrutiny on 
what determines a successful waterway. This has an impact on the 
operations and maintenance funding a waterway receives. Using criteria 
that only considers tons, actually moved on the waterway, neglects the 
main benefit that justified the original waterway project, 
transportation cost savings. Currently there is no criteria used to 
consider ``water compelled rates'' (competition with rail). We know 
that there are industries not using our waterway because rail rates 
were reduced, to match the waterborne rates, the same year our waterway 
became operational. If the operation of our waterway were terminated 
the rail rates would increase. Many industries have experienced great 
``national'' transportation savings without using the waterway, which 
is why the project was authorized.
    The main problem is that there is no ``post-project'' evaluation 
for navigation projects. We support the development of such an 
evaluation and volunteer the J. Bennett Johnston Waterway and our 
efforts to develop one. Such an evaluation could be made once every 5 
years to insure the waterway continues to meet the determined criteria. 
We also believe any evaluation adopted must have input from and be 
validated by the administration, Congress and industry. Too much money 
has been expended to use an evaluation that is unfair and disregards 
the true benefits realized from these waterway projects.
    I would now like to comment on some of our specific requests for 
the future economic well being of the citizens residing in the four 
State Red River Basin regions.
    Navigation.--The J. Bennett Johnston Waterway is living up to the 
expectations of the benefits projected. We are extremely proud of our 
public ports, municipalities and State agencies that have created this 
success. This upward ``trend'' in usage will continue as new industries 
commence operations. At the Port of Shreveport-Bossier ``Steelscape'' 
became operational in April 2006 processing steel, eventually employing 
250 people and moving 500,000 tons per year on the Waterway. A major 
power company, CLECO, is investing $1 billion in its Rodemacher Plant 
near Boyce, Louisiana, on the lower Red River and is expected to move 
over 3 million tons of Coal and ``petroleum coke'', by the Waterway, in 
2009. These projects are a reality and there are many more customers 
considering using our Waterway.
    You are reminded that the Waterway is not complete; 6 percent 
remains to be constructed, $121 million. We appreciate Congress's 
appropriation level in fiscal year 2006 of $13 million; however, the 
President's fiscal year 2007 budget drastically cuts that to $1.5 
million, which is unacceptable. There is a capability for $19.5 million 
of work, but we realistically request $12 million to keep the project 
moving toward completion.
    Now that the J. Bennett Johnston Waterway is reliable year round we 
must address efficiency. Presently a 9-foot draft is authorized for the 
J. Bennett Johnston Waterway. All waterways below Cairo, Illinois are 
authorized at 12-foot, to include the Mississippi River, Atchafalaya 
River, Arkansas River and Gulf Intracoastal Waterway. A 12-foot channel 
would allow an additional one-third capacity, per barge, which will 
greatly increase the efficiency of our Waterway and further reduce 
transportation rates. This one action would have the greatest, positive 
impact to reduce rates and increase competition, bringing more 
industries to use waterborne transportation. We request a 1-year 
reconnaissance study be funded to evaluate this proposal, at a cost of 
$100,000. Fact: approximately 95 percent is already at 12-foot year 
round.
    The feasibility study to continue navigation from Shreveport-
Bossier City, Louisiana, into the State of Arkansas will be completed 
in calendar year 2007. There is great optimism that the study will 
recommend a favorable project; however, the administration must 
consider the benefit analysis by modern day criteria, not by 25-year-
old standards. Benefit analysis is by administration policy and they 
can consider externality benefits that impact society today. This 
region of SW Arkansas and NE Texas continues to suffer major 
unemployment and this navigation project, although not the total 
solution will help revitalize the economy. We request funding of 
$400,000 to initiate planning, engineering and design, PED.
    Flood Prevention.--The recent events in New Orleans have 
demonstrated what will happen when we ignore our levee systems. We know 
the Red River levees in Arkansas do not meet Federal standards, which 
is why we have the authorized project, ``Red River Below Denison Dam, 
TX, AR & LA''. Now is the time to bring these levees up to standards, 
before a major flood event, which will occur.
    We continue to consider flood control a major objective and request 
you continue funding the levee rehabilitation projects ongoing in 
Arkansas. Five of 11 levee sections have been completed and brought to 
Federal standards. Appropriations of $5 million will construct one more 
levee section in Lafayette County, AR.
    The levees in Louisiana have been incorporated into the Federal 
system; however, they do not meet current safety standards. These 
levees do not have a gravel surface roadway, threatening their 
integrity during times of flooding. It is essential for personnel to 
traverse the levees during a flood to inspect them for problems. 
Without the gravel surface the vehicles will cause rutting, which can 
create conditions for the levees to fail. A gravel surface will insure 
inspection personnel can check the levees during the saturated 
conditions of a flood. Funding has been appropriated in the past and 
approximately 50 miles of levees in the Natchitoches Levee District 
were completed this year. We request $2 million to continue this 
important project in Louisiana.
    Bank Stabilization.--One of the most important, continuing 
programs, on the Red River is bank stabilization in Arkansas and North 
Louisiana. We must stop the loss of valuable farmland that erodes down 
the river and interferes with the navigation channel. In addition to 
the loss of farmland is the threat to public utilities such as roads, 
electric power lines and bridges; as well as increased dredging cost in 
the navigable waterway in Louisiana. These bank stabilization projects 
are compatible with subsequent navigation into Arkansas and we urge 
that they be continued in those locations designated by the Corps of 
Engineers to be the areas of highest priority. We appreciated the 
congressional funding in past fiscal years and request you fund this 
project at a level of $6 million in fiscal year 2008.
    Water Quality.--Nearly 3,500 tons of natural salts, primarily 
sodium chloride, enter the upper reaches of the Red River each day, 
rendering downstream waters unusable for most purposes. The Truscott 
Brine Lake project, which is located on the South Fork of the Wichita 
River in King and Knox Counties, Texas became operational in 1987. An 
independent panel of experts found that the project not only continues 
to perform beyond design expectations in providing cleaner water, but 
also has an exceptionally favorable benefit-to-cost ratio.
    The Assistant Secretary of the Army (Civil Works), in October 1998, 
agreed to support a re-evaluation of the Wichita River Basin tributary 
of the project. The re-evaluation report was completed and the Director 
of Civil Works signed the Environmental Record of Decision. The plan 
was found to be economically justified. This year the ASA (CW) directed 
that construction would not proceed until a local sponsor was found to 
assume 100 percent of the O&M for the project. This is based on a 
policy decision, although legal decisions state otherwise. We strongly 
disagree with this position, since the current local sponsor signed a 
cooperation agreement that did not include responsibility for O&M, no 
project documents require this and the project truly benefits four 
States, which makes it unreasonable to place the O&M burden on one 
local sponsor. Since 1987 the Federal Government has funded over $1.5 
million per year for O&M. Completion of this project will reclaim Lake 
Kemp as a usable water source for the City of Wichita Falls, Sheppard 
AFB and the region. This project will provide improved water quality 
throughout the four States of the Red River providing the opportunity 
to use surface water and reduce dependency on ground water. We request 
appropriations of $2,500,000 to continue the Wichita River features in 
Texas.
    Over the past year there has been a renewed interest by the Lugart-
Altus Irrigation District to evaluate construction of Area VI, of the 
Chloride Control Project, in Oklahoma. They have obtained the support 
of many State and Federal legislators, as well as a letter from the 
Oklahoma Governor in support of a re-evaluation report. We request an 
appropriation of $1,625,000 to continue with this effort. Total request 
for the Chloride Control Project.--$4,125,000.
    Water Supply.--Lake Kemp, just west of Wichita Falls, TX, is a 
major water supply for the needs of this region. Due to siltation the 
available storage of water has been impacted. A reallocation study is 
needed to determine water distribution needs and raising the 
conservation pool. Total O&M of $892,000 is requested for fiscal year 
2008 ($210,000 is required for the base annual O&M, $467,000 for the 
study and $215,000 for backlog grouting & dam repair).
    Operation & Maintenance.--Full O&M capability levels are not only 
important for our Waterway project but for all our Corps projects and 
flood control lakes. The backlog of critical maintenance only becomes 
worse and more expensive with time. We urge you to appropriate funding 
to address this serious issue at the expressed full Corps capability.
    We are sincerely grateful to you for the past support you have 
provided our projects. We hope that we can count on you again to fund 
our needs and complete the projects started that will help us diversify 
our economy and create the jobs so badly needed by our citizens. We 
have included a summary of our requests for easy reference, Enclosure 
2.
    Thank you for the opportunity to present this testimony and project 
details of the Red River Valley Association on behalf of the 
industries, organizations, municipalities and citizens we represent 
throughout the four State Red River Valley region. The Civil Works 
program directly relates to national security by investing in economic 
infrastructure. If waterways are closed companies will not relocate to 
other parts of the country--they will move over seas. If we do not 
invest now there will be a negative impact on our ability to compete in 
the world market threatening our national security.
               enclosure 1.--red river valley association
    The Red River Valley Association is a voluntary group of citizens 
bonded together to advance the economic development and future well 
being of the citizens of the four-State Red River Basin area in 
Arkansas, Louisiana, Oklahoma and Texas.
    For the past 81 years, the Association has done notable work in the 
support and advancement of programs to develop the land and water 
resources of the Valley to the beneficial use of all the people. To 
this end, the Red River Valley Association offers its full support and 
assistance to the various Port Authorities, Chambers of Commerce, Levee 
and Drainage Districts, Industry, Municipalities and other local 
governing entities in developing the area along the Red River.
    The Resolutions contained herein were adopted by the Association 
during its 82nd Annual Meeting in Shreveport, Louisiana on February 22, 
2007, and represent the combined concerns of the citizens of the Red 
River Basin area as they pertain to the goals of the Association, 
specifically:
  --Economic and Community Development;
  --Environmental Restoration;
  --Flood Control;
  --Bank Stabilization;
  --A Clean Water Supply for Municipal, Industrial and Agricultural 
        Uses;
  --Hydroelectric Power Generation;
  --Recreation; and,
  --Navigation.
    The Red River Valley Association is aware of the constraints on the 
Federal budget, and has kept those constraints in mind as these 
resolutions were adopted. Therefore, and because of the far-reaching 
regional and national benefits addressed by the various projects 
covered in the resolutions, we urge the members of Congress to review 
the materials contained herein and give serious consideration to 
funding the projects at the levels requested.

                    RED RIVER VALLEY ASSOCIATION FISCAL YEAR 2008 APPROPRIATIONS--CIVIL WORKS
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              Fiscal Year  Fiscal Year   President   RRVA Fiscal
                                                                  2006         2007     Fiscal Year   Year 2008
                                                                Approp.      Approp.    2008 Budget    Request
----------------------------------------------------------------------------------------------------------------
Studies (GI):
    Navigation into SW Arkansas: Feasibility................          150  ...........  ...........          400
    Red River Waterway, LA--12 Channel, Recon...............  ...........  ...........  ...........          100
    Bossier Parish, LA......................................           75  ...........  ...........          300
    Cross Lake, LA Water Supply Supplement..................           99  ...........  ...........          384
    SE Oklahoma Water Resource Study: Feasibility...........           40  ...........  ...........          300
    SW Arkansas Ecosystem Restoration: Recon Study..........          100  ...........  ...........          200
    Cypress Valley Watershed, TX............................  ...........  ...........  ...........          100
    Sulphur River Basin, TX.................................          152  ...........  ...........        1,000
    Washita River Basin, OK.................................  ...........  ...........  ...........          250
    Mangum Lake, OK.........................................  ...........  ...........  ...........  ...........
    Wichita River Basin, TX, Watershed Rehab: Recon.........           50  ...........  ...........          100
    Red River Above Denison Dam, TX & OK: Recon.............  ...........  ...........  ...........          100
    Red River Waterway, Index, AR to Denison Dam............  ...........  ...........  ...........  ...........
    Mountain Fork River Watershed, OK & AR, Recon...........  ...........  ...........  ...........  ...........
Construction General (CG):
    Red River Waterway:
        J. Bennett Johnston Waterway, LA....................       13,000  ...........        1,500       12,000
        Index to Denison Reach, Bendway Weir Demo (Note.--    ...........  ...........  ...........  ...........
         Need language for full federal funded).............
    Chloride Control Project, TX & OK.......................        1,500  ...........  ...........        4,125
        Wichita River, TX...................................        1,125  ...........  ...........        2,500
        Area VI, OK.........................................          375  ...........  ...........        1,625
    Red River Below Denison Dam; AR & LA:
        AR & LA Levee Rehabilitation........................        3,000  ...........  ...........        5,000
        Bowie County Levee, TX..............................  ...........  ...........  ...........  ...........
    Red River Emergency Bank Protection.....................        3,200  ...........  ...........        6,000
    Big Cypress Valley Watershed, TX: Section 1135..........          530  ...........  ...........          500
    Palo Duro Creek, Canyon, TX: Section 205................  ...........  ...........  ...........          200
    Millwood, Grassy Lake, AR: Section 1135.................          100  ...........  ...........          350
    Little River County/Ogden Levee, AR, PED................  ...........  ...........  ...........          300
    McKinney Bayou, AR, PED.................................  ...........  ...........  ...........  ...........
Operation and Maintenance (O&M):
    J. Bennett Johnston Waterway, LA........................       11,804  ...........       10,431       14,000
    Lake Kemp, TX--Total Need...............................  ...........  ...........  ...........          892
        Basic Annual O&M....................................  ...........  ...........  ...........          210
        Reallocation Study..................................  ...........  ...........  ...........          467
        Dam Repair/Grouting.................................  ...........  ...........  ...........          215
    Lake Texoma, TX & OK--Total Need........................  ...........  ...........  ...........        9,587
        Basic Annual O&M....................................  ...........  ...........  ...........        7,087
        Suppl. EIS..........................................  ...........  ...........  ...........          500
        Backlog Maintenance.................................  ...........  ...........  ...........        2,000
----------------------------------------------------------------------------------------------------------------
NOTE.--Due to Continuing Resolution (CR)--Rules and funding levels for fiscal year 2007 are not known for this
  submission.

                                 ______
                                 
  Prepared Statement of the Riverside County Flood Control and Water 
                         Conservation District

       FISCAL YEAR 2008 WATER RESOURCES DEVELOPMENT APPROPRIATIONS
------------------------------------------------------------------------
                         PROJECT                              REQUEST
------------------------------------------------------------------------
MURRIETA CREEK FLOOD CONTROL PROJECT: Construction           $13,000,000
 General................................................
HEACOCK AND CACTUS CHANNELS: Special Authorization under      16,000,000
 WRDA...................................................
FUNDING FOR CERTIFICATION OF CORPS LEVEES: Inspection of         ( \1\ )
 Completed Works........................................
NORCO BLUFFS BANK STABILIZATION PROJECT: Construction          1,000,000
 General................................................
SAN JACINTO & UPPER SANTA MARGARITA RIVER WATERSHEDS             532,000
 SPECIAL AREA MANAGEMENT PLAN (SAMP): General
 Investigations.........................................
SANTA ANA RIVER--MAINSTEM: Construction General.........      67,840,000
------------------------------------------------------------------------
\1\ To be determined.

riverside county flood control and water conservation district board of 
 supervisors resolution no. f2007-01 supporting federal appropriations 
            for flood control projects for fiscal year 2008
    WHEREAS, the United States House of Representatives Committee on 
Appropriations, Subcommittee on Energy and Water Development, and the 
United States Senate Committee on Appropriations, Subcommittee on 
Energy and Water Development are holding hearings to consider 
appropriations for Flood Control and Reclamation Projects for fiscal 
year 2008 and have requested written testimony to be submitted to the 
committees during March 2007; and
    WHEREAS, the Riverside County Flood Control and Water Conservation 
District supports the continuation of construction efforts on the 
critical flood control project on Murrieta Creek; the furtherance of 
construction activities on the Santa Ana River Mainstem project, 
including Prado Dam; the establishment of Special Legislation 
addressing the design and construction of the Heacock and Cactus 
Channels providing flood protection to March Air Reserve Base; the 
repair and completion of the Norco Bluffs Bank Stabilization Project: 
the establishment of a National Policy addressing the certification of 
Corps constructed levees, and the continuation of Corps efforts in 
completing the Special Area Management Plan for the San Jacinto and 
Santa Margarita River Watersheds; now, therefore,
    BE IT RESOLVED by the Board of Supervisors of the Riverside County 
Flood Control and Water Conservation District in regular session 
assembled on February 6, 2007 that they support appropriations by 
Congress for fiscal year 2008 for the following projects:

                      U.S. ARMY CORPS OF ENGINEERS
------------------------------------------------------------------------
                         PROJECT                              REQUEST
------------------------------------------------------------------------
Murrieta Creek Flood Control,Environmental restoration       $13,000,000
 and Recreation Project: Construction--General..........
Heacock and Cactus Channels (MARB): Special Legislation.      16,000,000
Norco Bluffs Bank Stabilization Project: Construction--        1,000,000
 General................................................
Certification of Corps Constructed Levees: National              ( \1\ )
 Policy.................................................
San Jacinto & Upper Santa Margarita River Watersheds             532,000
 (Riverside County): Special Area Management Plan (SAMP)
Santa Ana River Mainstem: Construction--General.........      96,500,000
------------------------------------------------------------------------
\1\ To be determined.

    BE IT FURTHER RESOLVED that the General Manager-Chief Engineer is 
directed to distribute certified copies of this resolution to the 
Secretary of the Army, Members of the House of Representatives 
Committee on Appropriations and Subcommittee on Energy and Water 
Development, the Senate Committee on Appropriations and Subcommittee on 
Energy and Water Development, and the District's Congressional 
Delegation--Senators Dianne Feinstein and Barbara Boxer, Congressmen 
Ken Calvert and Darrell Issa, and Congresswoman Mary Bono.

MURRIETA CREEK FLOOD CONTROL, ENVIRONMENTAL RESTORATION AND RECREATION 
                                PROJECT

    Murrieta Creek poses a severe flood threat to the cities of 
Murrieta and Temecula. Overflow flooding from the undersized creek with 
a tributary watershed area of over 220 square miles has periodically 
wreaked havoc on the communities--most recently in 1993 when nearly $20 
million in damages was incurred by the public and private sectors. As 
the area continues to develop, the potential damages (direct and 
indirect) will only continue to increase. In 1997 the U.S. Army Corps 
of Engineers initiated studies on the Creek. The final outcome of this 
endeavor was congressional authorization in 2000 of the $90 million, 
multifaceted project known as the Murrieta Creek Flood Control, 
Environmental Restoration and Recreation Project.
    This project is being designed and will be constructed in four 
distinct phases. Phases 1 and 2 include channel improvements through 
the city of Temecula. Phase 3 involves the construction of a 250-acre 
detention basin, including 160 acres of new environmental habitat and 
over 50 acres of recreational facilities. Phase 4 will include channel 
improvements through the city of Murrieta. Equestrian, bicycle and 
hiking trails as well as a continuous vegetated habitat corridor for 
wildlife are components of the entire 7-mile long project.
    The Omnibus Appropriations Bill for fiscal year 2003 provided $1 
million for a new construction start for this critical public safety 
project and construction activities commenced in the fall of 2003 on 
Phase 1. Appropriations for fiscal year 2004 and additional funds 
allocated allowed the Corps to continue construction on Phase 1, which 
was completed in December 2004. Phase 2 traverses Old Town Temecula, 
one of the hardest hit areas during the flooding of 1993. The Corps 
anticipates having a Phase 2 construction contract ready to award in 
the winter of 2007. The District, therefore, respectfully requests the 
committee's support of a $13,000,000 appropriation in fiscal year 2008 
to allow the Corps to complete the Design Documentation Report, and 
initiate construction on Phase 2 of the long awaited Murrieta Creek 
Flood Control, Environmental Restoration and Recreation Project.

   HEACOCK AND CACTUS CHANNELS--PROTECTION OF MARCH AIR RESERVE BASE

    Heacock and Cactus Channels are undersized, earthen channels that 
border the eastern and northern boundary of the March Air Reserve Base 
(MARB). Substantial vegetation becomes established within both channels 
and impedes the conveyance of tributary storm flows to an existing 
outlet located downstream. Storm flows overtop the Cactus Channel and 
traverse MARB causing major disruption of the Base's operation, 
including the fueling of airplanes and transport of troops and 
supplies. The record rainfall of 2004/2005 also caused extensive 
erosion along Heacock Avenue jeopardizing existing utilities within the 
road right of way and cutting off access to approximately 700 
residences within the city of Moreno Valley.
    Under section 205 of the Continuing Authorities Program (CAP), the 
Corps received $100,000 in fiscal year 2005 and completed an Initial 
Appraisal Report which determined the feasibility of proceeding with a 
project to provide flood protection to this sensitive area. With the 
$546,000 received in fiscal year 2006 the Corps completed a Project 
Management Plan, executed a Feasibility Cost Sharing Agreement and is 
nearing completion of the Feasibility Study. However, this study found 
that MARB would receive approximately 85 percent of the benefits from 
constructing this project making the use of section 205 funds 
inappropriate. Therefore, the project will require Special 
Authorization under WRDA to approve and authorize the project and 
appropriate the $16,000,000 needed to provide flood protection to the 
base.
    The District requests support from the Committee for Special 
Authorization under WRDA approving the project and authorizing 
appropriations of $16,000,000 to complete the design and construct the 
project providing this critical military installation flood protection.

               CERTIFICATION OF CORPS CONSTRUCTED LEVEES

    As part of the Federal Emergency Management Agency's (FEMA) Map 
Modernization Program, the District, as well as all other agencies, 
cities and counties in the Nation are being required to provide 
certification of the reliability of all levee structures providing 
flood protection to our citizens. Many of these projects were 
constructed by the U.S. Army Corps of Engineers and in these cases, 
FEMA is requesting that the certification be provided by the Corps. 
Certification involves an extensive amount of geotechnical analysis, 
including field and lab material testing, slope stability and seepage 
checks, hydrologic and hydraulic verification and other costly and time 
consuming activities, as well as the review of operation and 
maintenance records. These projects have an established Federal 
interest. Therefore, a National Policy needs to be established 
addressing the need for these federally constructed projects to be 
certified by the Corps and authorizing the Corps to perform the 
required analysis. Furthermore, the Corps should also be authorized to 
provide Federal assistance for design and construction costs associated 
with any necessary rehabilitation, repair or reconstruction of projects 
that are found not to meet the CFR 65.10 FEMA criteria. Non-conforming 
levees put the public at risk and should be a Federal priority. Within 
our District, there are three Corps constructed levees requiring this 
Federal certification: Santa Ana River Levees constructed in 1958, 
Chino Canyon Levee constructed in 1972 and San Jacinto River Levee 
constructed in 1982.
    The District requests support from the committee for the 
establishment of a National Policy addressing this issue and the 
authorization and funding needed for the Corps to meet its obligations 
to the numerous local sponsors of federally constructed levees 
throughout the country. The Los Angeles District needs an appropriation 
of $3,000,000 for fiscal year 2008 under the Inspection of Completed 
Works--CA Operations and Maintenance Appropriation 3123 to accomplish 
the needed certification work.

                NORCO BLUFFS BANK STABILIZATION PROJECT

    The Norco Bluffs Bank Stabilization project consists of a soil 
cement toe protection structure constructed to the 100-year flood level 
at the base of the bluff, and a stable earthen buttress fill 
constructed to the top of the bluff along the Santa Ana River, in the 
city of Norco. The bluff stabilization work extends easterly from the 
Interstate 15 bridge to near Center Avenue. The estimated total cost of 
the project was approximately $14 million. The Corps received a total 
of $7.2 million in construction funds in the fiscal year 1998, fiscal 
year 1999 and fiscal year 2000 Federal budgets for the project. Since 
the available Federal funding fell short of that necessary to construct 
the entire project at once, the project was broken into two phases and 
Phase 1 was completed in May 2000. This included a soil cement toe 
protection structure along the entire length of the project, as well as 
construction of approximately 1,300 feet of buttress fill in the most 
critical reach of the bluffs, between Valley View and Corona Avenues. 
The Phase 2 contract involved the construction of the balance of the 
buttress fill and construction of most of Phase 2 was completed in 
December 2003, with the exception of hydroseeding the slopes, which was 
deferred until the appropriate season to ensure successful 
establishment of the native vegetation. Unfortunately, the record 
rainfall of the 2004/2005 season caused damages to the project that 
must be repaired in order to complete the project.
    The District requests support from the committee for a fiscal year 
2008 appropriation of $1,000,000 to complete the repairs, hydroseed the 
slopes and turn the project over to the District.

                       SANTA ANA RIVER--MAINSTEM

    The Water Resources Development Act of 1986 (Public Law 99-662) 
authorized the Santa Ana River--All River project that includes 
improvements and various mitigation features as set forth in the Chief 
of Engineers' Report to the Secretary of the Army. The Boards of 
Supervisors of Orange, Riverside and San Bernardino Counties continue 
to support this critical project as stated in past resolutions to 
Congress.
    For fiscal year 2008, an appropriation of $67,840,000 is necessary 
to provide funding for the following activities: $20,000,000 for Reach 
9 of the Santa Ana River immediately downstream of Prado Dam, 
$2,840,000 for the Seven Oaks Dam project and $45,000,000 for Prado 
Dam.
    The District respectfully requests that the committee support an 
overall $67,840,000 appropriation of Federal funding for fiscal year 
2008 for the Santa Ana River Mainstem Project.
                                 ______
                                 
     Prepared Statement of the Sacramento Area Flood Control Agency

    Dear Mr. Chairman and members of the subcommittee: On behalf of the 
Sacramento Area Flood Control Agency (SAFCA), its member agencies and 
the millions of people that may be directly or indirectly impacted by 
floods in Sacramento, we extend our sincere appreciation to the 
committee for the past consideration and support extended to the 
ongoing local, State and Federal effort to reduce flood risk in the 
Capital of California.
    According to the U.S. Army Corps of Engineers (Corps), Sacramento's 
flood risk continues to be the highest of major urban areas in the 
country. Located at the confluence of the Sacramento and American 
Rivers, the Sacramento floodplain contains 165,000 homes, over 488,000 
residents, 1,300 government facilities including the State Capital, and 
businesses providing 200,000 jobs. It is the hub of a 6-county regional 
economy that provides 800,000 jobs for 1.5 million people. A major 
flood along the American River or the Sacramento River would cripple 
this economy, cause between $7.0 billion and $16.0 billion in direct 
property damages and likely result in significant loss of life.
    The devastating flood of February 1986 revealed that Sacramento's 
defenses provided less than 100-year flood protection, far less than 
previously thought. SAFCA was created in 1989 to work with the Corps 
and the State to improve the Sacramento region's flood protection as 
rapidly as possible. Much progress has been made since then, with a 
combined investment of over $428 million in levee improvements, 
reservoir operations, and floodplain restoration. Nevertheless, much 
remains to be done. In collaboration with the Corps and the State, 
SAFCA is pursuing completion of levee improvements needed to achieve 
the minimum 100-year level of flood protection, while advancing 
measures which will lead to better than 200-year flood protection over 
the next decade.
    SAFCA's Federal fiscal year 2008 Federal budget requests are shown 
in order of priority in Table 1. Consistent with previous years' 
requests, SAFCA top priority is achieving 100-year level flood 
protection for the Sacramento area. While this goal has now been 
achieved for most of the community, work along the tributaries of 
Morrison Creek needs to move forward at Corps capability to achieve 
this level of protection for about 6,000 residential properties (about 
16,000 people). Therefore the South Sacramento Streams Group Project 
remains the top priority.
    The American River Common Features Project needs to continue at 
capability as well, to complete project elements needed to safely 
convey 160,000 cfs in the Lower American River.
    The Folsom Dam Joint Federal Project relies on the authority of the 
Folsom Dam Modifications Project and Reclamation's Dam Safety Program 
for the construction of an auxiliary spillway on the south abutment of 
the dam. This is the cornerstone of Sacramento's 200-year flood 
program, for which planning and design need to proceed at Corps 
capability levels. SAFCA supports the continuing planning for up to a 
3.5 foot raise of Folsom Dam embankments, as well as construction of 
the Folsom Dam Bridge through fiscal year 2008.

                           TABLE 1.--FEDERAL FISCAL YEAR 2008 APPROPRIATIONS REQUESTS
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                   Proposed 2008    SAFCA 2008
                             PROJECT                              Federal Budget    Request Feb      Requested
                                                                     Feb 2007          2007          Increase
----------------------------------------------------------------------------------------------------------------
South Sacramento Streams Group: Construct levee and channel                8.000          11.000           3.000
 improvements to prevent flooding in south Sacramento where
 floodwaters from four creeks threaten 100,000 residents........
American River Common Features: Raise and reinforce levees to             12.000          34.800          22.800
 assure 100-year flood protection for the urban Sacramento area
 from the American and Sacramento Rivers........................
Folsom Dam Outlet Modifications: Enlarge and retrofit Folsom Dam           6.000           6.000  ..............
 outlet gates to more efficiently manage flood storage in Folsom
 Reservoir......................................................
American River Plan (Folsom Dam Mini-Raise): Continue design of            4.500           5.000           1.500
 the Folsom Mini-Raise..........................................
American River Plan (Folsom Dam Mini-Raise, Bridge Component):            14.000          46.700          31.700
 Construct permanent bridge to replace the Folsom Dam Road......
Natomas Phase I Reimbursement: Previously appropriated funds,     ..............           4.500           4.500
 not yet received by SAFCA for federally authorized and
 completed work on the North Area Local Project.................
Sacramento River Bank Protection: Repair critical erosion sites           21.528          64.800          43.272
 and mitigate for impacts throughout the Sacramento River Flood
 Control System, including the urban Sacramento area............
                                                                 -----------------------------------------------
      TOTAL.....................................................          66.028         172.800         106.772
----------------------------------------------------------------------------------------------------------------

    Updates on progress on each of the referenced projects is provided 
in the following paragraphs.

             SOUTH SACRAMENTO COUNTY STREAMS GROUP PROJECT

    This project will provide a minimum of 100-year flood protection 
from the Morrison Stream Group, including Morrison Creek, Florin Creek, 
Elder Creek, and Union House Creek when completed. This project 
protects the existing community, as well as helps facilitate the city's 
economic development goals for the South Sacramento region. SAFCA, the 
State, and the Corps are working together to expedite construction of 
this project. Levee improvements around the Regional Wastewater 
Treatment Plant were completed in 1996. The Morrison Creek north levee 
from the Sacramento River east to the Union Pacific Railroad, and north 
to Brookfield Drive were completed in 2005-2006. In 2007 levee 
improvements will be constructed on Morrison Creek and tributaries as 
far east as Franklin Boulevard. SAFCA's goal is to implement Phase 2 
levee improvements eastward to Highway 99 by 2012 to provide 100-year 
flood protection from Morrison Creek flooding.

                 AMERICAN RIVER COMMON FEATURES PROJECT

American River Levees
    Construction of the Mayhew levee improvements has been a high 
priority and construction is planned for late summer 2007. Additional 
levee improvements to address gaps in the slurry walls along the 
American River levees on both sides of the river, and to provide levee 
height parity are expected to go to construction in 2008. This work 
will go a long way towards meeting the goal of safely conveying 160,000 
cubic feet per second through Sacramento, which will be required to 
provide 200-year flood protection on the American River.
Natomas General Re-evaluation Report (GRR)
    The Corps is studying alternatives for levee improvements needed to 
provide the Natomas basin with 200-year flood protection. The Corps 
study will proceed concurrently with SAFCA's construction of those 
improvements. The State Reclamation Board has requested section 104 
Credit for levee improvements constructed by SAFCA, with the goal of 
obtaining Federal reimbursement for State and SAFCA funding for 
construction of these improvements over the next several years. Funding 
for the Corps study effort is needed to keep the Corps study on 
schedule for completion of the GRR in 2009, thus paving the way for 
Congressional reimbursement for State and SAFCA expenditures in 2010 
and beyond.
Pocket General Re-Evaluation Report (GRR)
    SAFCA has initiated reconnaissance planning for measures which may 
be needed to provide 200-year flood protection for the Sacramento River 
East levee south of the American River. SAFCA will request that the 
Corps initiate a second GRR under the American River Common Features 
Authority, with the goal of expediting the alternative formulation 
process for any levee improvements which may be needed in this reach.

            FOLSOM DAM MODIFICATIONS: JOINT FEDERAL PROJECT

    This project will include construction of a new auxiliary spillway 
on the east abutment to Folsom Dam. This new spillway will both provide 
sufficient release capacity to allow Folsom Dam to control the 200-year 
flood, as well as to safely pass a Probable Maximum Flood without 
overtopping the dam. Since June of 2005 the Corps, Reclamation, the 
State of California, and SAFCA have rapidly advanced planning for this 
project, including a joint EIR/EIS, a Corps Post Authorization Change 
(PAC) Report by the Corps, and a Reclamation Dam Safety Modifications 
Report. All these reports will be completed by late Spring 2007, 
setting the stage for excavation to begin on the auxiliary spillway and 
related Reclamation dam safety work in October 2007. The project will 
be jointly constructed by the Corps and Reclamation, with the State and 
SAFCA serving as non-Federal cost sharing partners. The Corps will 
continue to design their portion of the JFP with construction starting 
in following years.

                        FOLSOM DAM RAISE PROJECT

    Based on current Corps design studies, a raise of up to 3.5 feet of 
the dikes and wingdams around Folsom Lake may be constructed under this 
project authority in conjunction with the Folsom Dam Modifications 
project. The Folsom Dam Bridge, an authorized part of this project, is 
currently under construction by the Corps, with a planned opening for 
traffic by the end of 2008. Ecosystem restoration is also an authorized 
component of this project, focusing on improving salmonid habitat in 
the Lower American River through improved temperature control for 
Folsom Dam releases.

                     NATOMAS PHASE I REIMBURSEMENT

    SAFCA is seeking reimbursement for work completed on Natomas levees 
under Federal authority. A total of $21 million in reimbursements have 
been authorized and appropriated, of which $16.5 million has been paid 
to SAFCA, leaving about $4.5 million which has been appropriated but 
not reimbursed to SAFCA. SAFCA needs the $4.5 million to help fund 
SAFCA's flood control improvement efforts.

                SACRAMENTO RIVER BANK PROTECTION PROJECT

    During the Construction season of 2006, an impressive amount of 
bank protection was completed along the Sacramento River including nine 
critical erosion sites along the Sacramento River east levee protecting 
Sacramento. The work has continued in 2007, during which another three 
sites were under construction. This program, executed by the Corps in 
close collaboration with the State, has been very effective in rapidly 
addressing serious erosion defects in levees protecting the Sacramento 
area and in other parts of the central valley. Additional funding, as 
well as new implementation authority, will be needed to continue 
repairs of critical erosion issues within the river system.
                                 ______
                                 
      Prepared Statement of the National Corn Growers Association

    The National Corn Growers Association (NCGA) appreciates the 
opportunity to share with the subcommittee our energy and water 
development appropriations priorities for fiscal year 2008. In general, 
our appropriations priorities include an overall increase in U.S. Army 
Corps of Engineers' funding to address the needs of our failing inland 
waterways system; $24 million for pre-construction engineering and 
design (PED) for the project entitled ``UMR-IWW System Navigation 
Study, IL, IA, MN, MO, & WI'' (Authority: section 216, Flood Control 
Act of 1970 (Public Law 91-612)); and continued support for the 
Department of Energy's Biomass Technologies Program.
    NCGA represents nearly 33,000 corn farmers from 46 States. NCGA 
also represents more than 300,000 farmers who contribute to corn check 
off programs and 26 affiliated State corn organizations across our 
country, working together to create new opportunities and markets for 
corn growers.
    America's corn producers continue to make a significant and 
important contribution to our Nation's economy. Over the last 5 years, 
the Nation's corn crop has averaged 10.3 billion bushels resulting in 
an annual average farm gate value of almost $22 billion. The relatively 
stable production over the past 10 years, made possible by innovation 
in production practices and technological advances, has helped to 
ensure ample supplies of corn for livestock, an expanding ethanol 
industry, new biobased products and a host of other uses in the corn 
industry.
    Key to our success is reliable, cost-effective and efficient 
transportation--whether by barge, truck or rail. Competition among 
these modes of transportation helps farmers receive their farm inputs, 
meet their customers' demand for timely delivery of products and 
successfully compete with foreign producers. Without a competitive 
transportation system, the promise of expanded trade and commercial 
growth is empty, job opportunities are lost, and we will be unprepared 
for the global challenges of this new century.

                      U.S. ARMY CORPS OF ENGINEERS

    Our country's inland navigation system plays a critical role in our 
Nation's economy, moving more than a billion tons of domestic commerce 
valued at more than $300 billion. Each year, more than 1 billion 
bushels of grain (over 60 percent of all grain exports) move to export 
markets via the inland waterways system. Inland waterways relieve 
congestion on our already over-crowded highways and railways that run 
through cities. One jumbo barge has the same capacity as 58 trucks or 
15 rail cars. A typical 15-barge tow on our Nation's rivers is 
equivalent to 870 trucks.
    Additionally, navigation offers transportation with unparalleled 
environmental benefits. Barges operate at 10 percent of the cost of 
trucks and 40 percent of the cost of trains, while releasing 20 times 
less nitrous oxide, 9 times less carbon monoxide, 7 times less 
hydrocarbons, and burning 10 times less high-price fuel.
    Unfortunately, investment in the inland waterways system has not 
kept pace with its needs and is deteriorating. Funding (in constant 
dollars) for operations and maintenance (O&M) on America's inland 
navigation system has remained flat for more than two decades. During 
this period, an increasing amount of routine maintenance on waterways 
infrastructure has been deferred. This deferred maintenance has become 
unfunded maintenance, and the aging waterways infrastructure, combined 
with the growing O&M backlog, has created today's average of 30 
unscheduled lock shutdowns per year.
    Over the past 5 years the U.S. Army Corps of Engineers reported 
more than 150 emergency lock closures on America's inland navigation 
system. Several high-profile closures have raised reliability concerns 
among shippers, carriers, the U.S. Army Corps of Engineers, and 
ultimately consumers who pay increased costs for expensive 
transportation delays.
    Tight O&M funding and the resultant ``fix-as-fail'' policy have led 
to a self-defeating cycle where routine maintenance dollars are now 
needed for emergency repairs. As critical maintenance needs grow, they 
become candidates for major rehabilitation--a trend that is not good 
for the waterways industry or for the Nation.
    NCGA is appreciative of the successful efforts made by this 
subcommittee in recent years to increase the budget for the U.S. Army 
Corps of Engineers. NCGA strongly supports continuing this trend with a 
significant increase over last year's funding levels to address the 
critically needed repairs and delayed construction schedules facing the 
Corps. It's important to get our inland waterways infrastructure back 
on track so we can meet the ever-increasing demands of the global 
marketplace.

                PRE-CONSTRUCTION ENGINEERING AND DESIGN

    The Upper Mississippi River and Illinois Waterway's infrastructure 
was built in the 1930's with a life expectancy of 50 years. As a 
result, the infrastructure is approaching 80 years of age, is 
undersized for efficient passage of today's tows, and is deteriorating 
from a lack of investment in both operation and maintenance and 
necessary capital improvements to rehabilitate these antique 
structures. As with our highways and interchanges, the purpose of 
modernization on the Upper Mississippi and Illinois Rivers is to make 
the entire system more efficient.
    NCGA supports funding pre-construction engineering and design as a 
means to accelerate the precursor to construction of 7 new 1,200 foot 
locks on the Upper Mississippi River and Illinois Waterway in 
anticipation of authorization through the Water Resources Development 
Act. Specifically, NCGA requests $24 million in PED funding for Locks 
20, 21, 22, 24, and 25 on the Upper Mississippi and the LaGrange and 
Peoria locks on the Illinois Waterway (Project: ``UMR-IWW System 
Navigation Study, IL, IA, MN, MO, & WI'' Authority: section 216, Flood 
Control Act of 1970 (Public Law 91-612)).
    The PED program is overseen by the Navigation & Ecosystem 
Sustainability Program (NESP), formed with the conclusion of the 
navigation study. NESP continues the research and monitoring 
recommended under the dual purpose river plan outlined in the Corps of 
Engineers' November 2004 Chief 's Report.
    In previous years, PED funding was used for preparations of a re-
evaluation report and detailed planning and design activities including 
8 projects for navigation efficiency and 19 projects for ecosystem 
restoration. Projects included lock design, fish passage studies, 
detailed planning and design for mooring cells and switch boat 
implementation and detailed planning for ecosystem restoration projects 
including island building, backwater restoration, side channel 
restoration, wing dam alteration, island-shoreline protection and dam 
embankment lowering.
    We strongly encourage the committee to support continued PED 
funding as part of an initial process to modernize our aging and 
deteriorating infrastructure and for much needed ecosystem restoration 
for the Upper Mississippi and Illinois Rivers.

                      BIOMASS TECHNOLOGIES PROGRAM

    The United States needs to displace imported petroleum with 
ethanol. Corn grain ethanol is the only economically viable solution 
over the next decade and is one of the leading ways to start weaning 
the United States from imported oil. Using starch from corn grain to 
produce ethanol provides farmers with higher profit margins even while 
fuel customers pay lower prices. Over the next decade, corn grain can 
meet all of the growth in ethanol demand and still meet growth in the 
livestock feed, human food and export sectors.
    The current Federal biomass technologies program is focused on 
long-term cellulose research. Cellulose research will not have any 
meaningful economic impact for a decade or more. A successful research 
and development (R&D) portfolio always balances near, mid and long-term 
goals, and biomass research should use a similar strategy.
    In the near term, R&D investments in corn grain ethanol production 
technology could have a strongly positive economic impact while 
immediately decreasing dependence on imported oil. Examples of R&D 
investment opportunities include improving production and utilization 
of animal feed (DDGS), co-production of biobased chemicals, utilization 
of corn kernel fiber, and decreasing natural gas use in ethanol plants. 
Sufficient supply of affordable ethanol will ensure the markets and 
infrastructure will be poised for the larger impacts coming in the mid 
to long-term.
    NCGA recommends the committee commit at least 25 percent of the 
fiscal year 2008 allocation for the biomass technologies program 
towards near-term research that enables corn grain.
    Thank you for the support and assistance you have provided to corn 
growers over the years.
                                 ______
                                 
 Prepared Statement of the Confederated Tribes of the Umatilla Indian 
                              Reservation

    We respectfully request fiscal year 2008 appropriation of funds for 
two priority watershed restoration and agricultural water supply 
protection projects in Oregon and Washington, the Umatilla Basin Water 
Supply Project (previously funded under the Umatilla Basin Project 
Phase III, OR) and the Walla Walla General Investigation Stream Flow 
Restoration Feasibility Study (previously funded under the Walla Walla 
River Watershed, OR & WA).
  --For the Umatilla Basin Water Supply Project, Oregon, we request an 
        appropriation of $1 million in the Bureau of Reclamation, 
        Pacific Northwest Region, Water and Related Resources budget. 
        This request will build upon the $450,000 committed by the 
        Bureau of Reclamation to the Project in fiscal year 2007.
  --For the Walla Walla River Watershed, Oregon and Washington, we 
        request an appropriation of $650,000 in the U.S. Army Corps of 
        Engineers, Portland Division, Walla Walla District, General 
        Investigations budget. This project is also known as Walla 
        Walla River Basin Feasibility Report/Environmental Impact 
        Statement.
    Both the Umatilla Basin Water Supply Project and the Walla Walla 
General Investigation Stream Flow Restoration Feasibility Study are 
ongoing projects and have had administration and/or congressional line 
item funding in past fiscal years.

           UMATILLA RIVER BASIN, OREGON WATER SUPPLY PROJECT

    By letter dated March 19, 2007, the Office of the Secretary of 
Interior responded favorably to the formal requests of the Washington 
and Oregon delegations and of the Confederated Umatilla Tribes, 
Westland Irrigation District and Governor Theodore Kulongoski to 
initiate Umatilla Basin water development projects and concurrent 
settlement of the Tribe's reserved water rights. Counselor to the 
Secretary, L. Michael Bogert, wrote ``I will ask the Secretary's Indian 
Water Rights Office to appoint an Assessment Team . . .'' and ``I will 
also ask the Bureau of Reclamation to move forward with a concurrent 
appraisal level study of water supply options, including a full Phase 
III exchange . . . to help resolve the Tribe's water rights claims.''
    The Bureau of Reclamation, subsequent to issuance of the March 19 
letter from Counselor Bogert, has committed $450,000 to fiscal year 
2007 work on the Umatilla Basin water supply appraisal study.
    The Umatilla Basin Water Supply Project is authorized by the 
Reclamation Feasibility Studies Act of 1966, 80 Stat. 707, Public Law 
89-561 (Sept. 7, 1966).
    The fiscal year 2008 request of $1 million to the U.S. Bureau of 
Reclamation will follow up the $450,000 fiscal year 2007 work and 
should complete the majority of the estimated 2-year appraisal level 
study. It is anticipated that the full appraisal study project will be 
completed in 2009 in order to inform the concurrent Interior Department 
Indian Water Rights Assessment Team's work products. In 2009, Interior 
should have a clear project or suite of projects necessary to satisfy 
water rights of the Confederated Umatilla Tribes on the Umatilla Indian 
Reservation and in the Umatilla River.
    This fiscal year 2008 request follows on the work of the Bureau of 
Reclamation, authorized by the Umatilla Basin Project Act of 1988 
(Public Law 100-557; 102 Stat. 2782 Title II), to construct and operate 
the Phase I Exchange with West Extension Irrigation District and the 
Phase II Exchange with Hermiston and Stanfield Irrigation Districts. 
Heralded as one of the most successful stream flow restoration and 
salmon recovery projects in the Columbia River Basin, the Umatilla 
Basin Project resulted in partially restored stream flows in the 
Umatilla River and successful reintroduction of spring Chinook, fall 
Chinook and Coho salmon. After nearly a century of dry river bed in 
summer months and extinction of all salmon stocks, there has been an 
Indian and non-Indian salmon fishery nearly every year in the Umatilla 
River since the project was completed in the mid-1990s.
    Completion of the Water Supply Study and the concurrent Tribal 
Water Rights Assessment is supported and endorsed by the Honorable 
Governor Ted Kulongoski and by local irrigation districts including 
specifically Westland Irrigation District, the Umatilla County 
Commission, and local municipalities including specifically the City of 
Irrigon.
     walla walla basin, oregon and washington, gi feasibility study
    In its sixth and final full year prior to completion, the U.S. Army 
Corps of Engineers' feasibility study will select the project necessary 
to restore stream flows in the Walla Walla River. Drained nearly dry 
during summer months by irrigation in Oregon and Washington, the Walla 
Walla River is within the aboriginal lands of the Confederated Umatilla 
Tribes and the complete loss of salmon violates the agreement by the 
United States in the Treaty of 1855 to protect these fish.
    Approximately $2.6 million of Federal funds have either been 
budgeted or appropriated through fiscal year 2007 (this includes an 
estimate $300,000 for fiscal year 2007 based upon continuing resolution 
uncertainties).
    The Feasibility Study Project is authorized by the Senate Committee 
on Public Works, July 27, 1962 (Columbia River and Tributaries), 87th 
Congress, House Document No. 403 and initiated as a result of a 
positive Reconnaissance Report for the Walla Walla River Watershed 
(1997) under a General Investigation study.
    The Confederated Tribes of the Umatilla Indian Reservation is the 
formal sponsor of the Corps of Engineers Feasibility Study and has 
provided over $3.1 million in in-kind contributions. Additionally, the 
State of Washington Department of Ecology has provided $400,000 to the 
Feasibility Study.
    Support for the completion of the Feasibility Study and moving to 
construction of the project is strong and diverse and includes the 
Honorable Governor of Washington Christine Gregoire, the Honorable 
Governor of Oregon Ted Kulongoski, the Walla Walla Watershed Alliance, 
the Walla Walla Basin Watershed Council, basin irrigation districts, 
local State legislators and many local and regional advocacy groups.
    In closing, the CTUIR appreciates the opportunity to provide this 
testimony in support of adding funds for the ongoing projects, Umatilla 
River Basin Water Supply Project, Bureau of Reclamation, and for the 
Army Corps of Engineers Walla Walla River Basin Watershed Restoration 
Feasibility Study. Both projects are critically important to protecting 
existing agricultural economies, completing future water supply 
development and concurrently restoring stream flows and recovering 
threatened salmon and other Columbia River Basin fish stocks.
    Thank you.
                                 ______
                                 
              Prepared Statement of The Nature Conservancy

    Mr. Chairman and members of the Subcommittee, I appreciate the 
opportunity to present The Nature Conservancy's recommendations for the 
Army Corps of Engineers' fiscal year 2008 appropriations. We understand 
that the Subcommittee's ability to fund programs within its 
jurisdiction is limited by the tight budget constraints but appreciate 
your consideration of these important programs.
    The Nature Conservancy is an international nonprofit organization 
dedicated to the conservation of biodiversity. Our mission is to 
preserve the plants, animals and natural communities that represent the 
diversity of life on Earth by protecting the lands and waters they need 
to survive. Our on-the-ground conservation work is carried out in all 
50 states and in 30 countries with the support of approximately one 
million members. To date, we have helped conserve more than 117 million 
acres and 5,000 river miles around the world. The Conservancy owns and 
manages approximately 1,400 preserves throughout the United States--the 
world's largest private system of nature sanctuaries. However, we 
recognize that our mission cannot be achieved by protected areas alone; 
thus, our projects increasingly seek to accommodate compatible human 
uses, especially in the developing world, to address sustained human 
well-being.
    The Conservancy has several concerns with the new starts/project 
advancement ban in the fiscal year 2006 Energy and Water Appropriations 
bill. As the largest nonfederal sponsor of ecosystem restoration 
projects (by number of projects, not total funding), this policy has 
significantly impacted the Conservancy's ecosystem restoration efforts. 
The ban has halted a number of restoration projects that are widely 
supported by local communities, that are important to biodiversity, and 
that have received significant prior investment of both federal and 
nonfederal resources. The Conservancy urges the Subcommittee not to 
renew the ban on new starts/project advancement.
    The Conservancy urges the Subcommittee to support the following 
appropriation levels in the fiscal year 2008 Energy and Water 
Development Appropriation bill:
Construction General Priorities
    Section 1135: Project Modification for the Improvement of the 
Environment.--The Section 1135 Program authorizes the Army Corps of 
Engineers (Corps) to restore areas damaged by existing Corps projects. 
This program continues to be in extremely high demand with needs far 
greater than the $30 million appropriated in fiscal year 2006. While we 
recognize that the fiscal year 2006 appropriations were in excess of 
the authorized levels, funding shortfalls continue to hold up many 
important projects. The Conservancy is the nonfederal cost share 
partner on five ecologically significant Section 1135 projects 
including Spunky Bottoms (IL), a floodplain restoration/reconnection 
project on the Illinois River that needs $150,000 to continue planning; 
Chain Bridge Flats (DC), a floodplain restoration on the Potomac River 
that needs $210,000 to initiate the reconnaissance phase; Jim Woodruff 
Lock and Dam Fish Passage (FL), a river habitat restoration on the 
Apalachicola River that needs $100,000 to initiate the reconnaissance 
phase; and Village of Oyster Ecosystem Restoration (VA), a restoration 
of intertidal wetlands and upland habitat that needs $99,000 to 
continue the feasibility study. In order to reduce the funding backlog, 
the Conservancy strongly encourages full funding of $25 million for 
Section 1135 in fiscal year 2008, an increase over the President's 
$11.2 million request.
    Section 206: Aquatic Ecosystem Restoration.--Section 206 is a newer 
program that authorizes the Corps to restore aquatic habitat regardless 
of past activities. This is another popular restoration program with 
demand far exceeding both the authorized level and the fiscal year 2006 
appropriation. The Conservancy is the nonfederal cost-share partner on 
four Section 206 projects that restore important habitats, including 
Camp Creek (OR), a headwaters stream restoration project that needs 
$525,000 to continue the feasibility study; Bootheel Creek (FL), a wet 
flatwood and depression marsh habitat restoration project that needs 
$85,000 to initiate the planning and design analysis phase; and Emiquon 
Preserve (IL), a floodplain reconnection and restoration project that 
needs $300,000 to continue planning. To reduce the funding backlog, the 
Conservancy strongly encourages $25 million for Section 206 in fiscal 
year 2008, an increase over the President's $11.3 million request.
    Upper Mississippi River System Environmental Management Program.--
The Environmental Management Program (EMP) is an important Corps 
program that restores habitat and conducts long-term resource 
monitoring of the Upper Mississippi and Illinois Rivers. EMP is a 
unique federal-state partnership involving five states (IL, IA, MN, MO 
and WI). EMP was reauthorized in WRDA 1999 with an increased 
authorization of $33.2 million. The Conservancy supports full funding 
of $33.2 million for fiscal year 2008, an increase over the President's 
$23.5 million request.
    Estuary Habitat Restoration Program.--The Estuary Restoration Act 
was approved by Congress in 2000 to recognize the importance of a 
national strategic plan and multi-level partnerships to address 
problems plaguing our nation's estuaries. With a goal of restoring a 
million acres of estuary habitat by 2010 through the Estuary Habitat 
Restoration Program, the Act encourages coordination among all levels 
of government, and engages the strengths of the public, nonprofit and 
private sectors. The Conservancy supports the President's $5.0 million 
request for the Estuary Habitat Restoration Program to promote 
restoration projects that benefit fish, shellfish and wildlife; improve 
surface and groundwater resources; provide flood control; and enhance 
recreational opportunities.
    Missouri River Fish and Wildlife Recovery.--The Missouri River 
contains more than 500 species of mussels, fish, amphibians, reptiles, 
birds and mammals, five of which are either listed or candidates for 
listing under the Endangered Species Act. The Corps has completed 30 
projects along the river in the lower four states (IA, KS, MO and NE) 
resulting in more than 40,000 acres of restored aquatic and floodplain 
habitat. This program enhances these restorations and complements 
protection and restoration efforts by many federal agencies. The 
Conservancy supports $85.0 million in fiscal year 2008 and pending 
passage of the Water Resources Development Act, supports using funding 
basin-wide, including $15 million for the Yellowstone River Intake 
project in Montana.
    South Florida Everglades Ecosystem Restoration Program.--The 
Everglades are home to a profusion of birds and wildlife with at least 
347 bird species recorded in Everglades National Park alone. For the 
last sixty years, the Corps has built projects that shunted water away 
from the Everglades. These flood control projects and agricultural and 
urban development have degraded the wetlands ecosystem. Restoration of 
this globally significant region is a priority for the Conservancy. The 
Conservancy requests $249.1 million in the South Florida Everglades 
Ecosystem Restoration Program in fiscal year 2008, an increase over the 
President's $162.4 million request. This request includes funds for 
five programs: Modified Water Deliveries to Everglades National Park 
($35 million), Critical Projects Construction ($8.3 million), Kissimmee 
River Restoration Construction ($50 million), Comprehensive Everglades 
Restoration Plan (CERP) Project Construction ($35 million), Central & 
Southern Florida Project ($120.8 million).
    Puget Sound and Adjacent Waters.--Assessments of Puget Sound's 
nearshore habitat indicate that the ecological health of the ecosystem 
is in steep decline. As urban areas continue to expand, an 
extraordinary heritage of native species and ecosystems is at risk. The 
Puget Sound and Adjacent Waters Program provides funding for early 
action projects to restore the Puget Sound and its watershed.. The 
Conservancy requests $5.0 million for Puget Sound and Adjacent Waters 
in fiscal year 2008. Identification of these early action projects is 
informed by the Puget Sound Nearshore Ecosystem Restoration General 
Investigation, for which the Conservancy requests $1.9 million in 
fiscal year 2008, an increase over the President's $400,000 request.
General Investigation Priorities
    Penobscot River Restoration.--This project involves the purchase 
and decommissioning of three dams on the Penobscot River, New England's 
second largest river. Two dams will be removed and a state-of-the-art 
fish bypass will be constructed around the third. Restoration of 
massive runs of migratory fish in the Penobscot River will expand 
recreational fishing opportunities and tourism resources, will provide 
culturally significant fishing resources to the Penobscot Indian 
Nation, and will greatly enhance recovery of Atlantic salmon and other 
ESA-listed species. The Conservancy supports $450,000 in fiscal year 
2008. This study is not included in the President's Budget.
    Hamilton City Flood Damage Reduction and Ecosystem Restoration.--
This project will increase flood protection for Hamilton City. CA and 
surrounding agricultural lands and restore over 1,500 acres of riparian 
habitat. Currently, the town is only marginally protected by a degraded 
private levee. The PED phase for this project is nearly complete. 
Pending fiscal year 2007 funding and passage of WRDA, the project will 
be ready to begin construction next year. The Conservancy supports $1.6 
million in fiscal year 2008 to complete PED and $7.5 million to begin 
construction. This study is not included in the President's Budget.
    Savannah Basin Comprehensive Water Resources Study--Phase II.--The 
Savanna River basin is experiencing tremendous growth, increasing 
demands on this limited water resource. Phase I of the study evaluated 
water management in the reservoirs based on current operations and 
indicated that future needs may not be met under current management 
practices. Phase II evaluates implementation of a new set of rules 
(e.g. hydropower contracts, recreation needs, ecological flows) that 
could meet future demands while protecting essential river habitat. 
Without Phase II, changes in dam operations are limited by outdated and 
unsustainable management rules. The Conservancy supports $250,000 in 
fiscal year 2008. This study is not included in the President's Budget.
    Willamette River Floodplain Study.--This project contributes to 
long-term restoration of floodplain habitat, an important step toward 
the recovery of several ESA-listed threatened fish species. The 
restoration goals include increasing floodplain connectivity and 
replanting riparian forests, which will contribute to the Corps' 
ability to reduce river temperatures and meet their obligations under 
the Clean Water Act. The Conservancy supports $436,000 in fiscal year 
2008. This study is not included in the President's Budget.
    Lower Mississippi River Resource Assessment.--This study will 
assess management, habitat and public access issues in the Lower 
Mississippi River Valley (LMV). Restoring and actively managing the 
natural resources of the LMV will contribute to the recovery of nine 
ESA-listed species without impacting navigation or flood control. 
Restored functionality of wetlands will also help attenuate floods and 
capture river sediment, reducing stress on the flood control system and 
the amount of nutrients transported down river to the Gulf of Mexico. 
The Conservancy supports $500,000 in fiscal year 2008. This study is 
not included in the President's Budget.
    Connecticut River Watershed Study.--This project will restore 410 
miles of river flow and thousands of acres of associated riparian, 
aquatic and floodplain natural communities in the Connecticut River 
Basin. The basin is a priority landscape for the Conservancy due to the 
high-quality tributary systems, unique natural communities and 
multitude of ESA-listed species. The study identifies dam management 
modifications for environmental benefits while maintaining beneficial 
human uses such as water supply, flood control and hydropower 
generation. The Conservancy supports $450,000 in fiscal year 2008. This 
study is not included in the President's Budget.
    Yellowstone River Corridor Comprehensive Study.--This study is 
assessing cumulative effects to the Yellowstone system and will develop 
conservation-based management practices for the river main stem. As the 
longest free-flowing river in the lower United States, the Yellowstone 
is a rare model of the structure and function of large western rivers. 
It supports a wide variety of fish, including the ESA-listed pallid 
sturgeon. The Conservancy supports $1 million in fiscal year 2008, an 
increase over the President's $200,000 request.
    Thames River Basin.--The Thames River Basin is the second largest 
freshwater contributor to Long Island Sound and provides critical 
connective habitat between freshwater and marine systems. This study 
will evaluate options to restore more natural flows and improve 
watershed management to reduce nutrient inputs, as well as options for 
ecological restoration throughout the Basin. The Conservancy supports 
$450,000 in fiscal year 2008. This study is not included in the 
President's Budget.
Operations and Maintenance Priority
    Bill Williams River--Alamo Dam.--Due to the historic loss of 
woodland habitat in the Southwest and limited restoration ability along 
other portions of the Colorado River, the Bill Williams River corridor 
provides critical opportunities for both conserving and restoring 
habitat. This plus-up request will provide additional baseline 
information about the geomorphology and sediment transport 
characteristics of the Bill Williams River and continue critical long-
term hydrologic and biological monitoring in order to construct a 
programmatic plan to support adaptive management of the river system. 
The Conservancy supports $250,000 plus-up over the President's 
Operations and Maintenance request of $1,783,000, for a total of 
$2,033,000 in fiscal year 2008.
    Thank you for the opportunity to present The Nature Conservancy's 
comments on the Energy and Water Appropriations bill. We recognize that 
you receive many worthy requests for funding each year and appreciate 
your consideration of these requests and the generous support you have 
shown for these and other conservation programs in the past. If you 
have any further questions, please do not hesitate to contact me or 
Jason Albritton, Policy Associate (703/841-4105).
                                 ______
                                 
      Prepared Statements of the Santa Clara Valley Water District

           STATEMENT OF SUPPORT--COYOTE CREEK WATERSHED STUDY

    Background.--Coyote Creek drains Santa Clara County's largest 
watershed, an area of more than 320 square miles encompassing most of 
the eastern foothills, the city of Milpitas, and portions of the cities 
of San Jose and Morgan Hill. It flows northward from Anderson Reservoir 
through more than 40 miles of rural and heavily urbanized areas and 
empties into south San Francisco Bay.
    Prior to construction of Coyote and Anderson Reservoirs, flooding 
occurred in 1903, 1906, 1909, 1911, 1917, 1922, 1923, 1926, 1927, 1930 
and 1931. Since 1950, the operation of the reservoirs has reduced the 
magnitude of flooding, although flooding is still a threat and did 
cause damages in 1982, 1983, 1986, 1995, and 1997. Significant areas of 
older homes in downtown San Jose and some major transportation 
corridors remain susceptible to extensive flooding. The federally-
supported lower Coyote Creek Project (San Francisco Bay to Montague 
Expressway), which was completed in 1996, protected homes and 
businesses from storms which generated record runoff in the northern 
parts of San Jose and Milpitas.
    The proposed Reconnaissance Study would evaluate the reaches 
upstream of the completed Federal flood protection works on lower 
Coyote Creek.
    Objective of Study.--The objectives of the Reconnaissance Study are 
to investigate flood damages within the Coyote Creek Watershed; to 
identify potential alternatives for alleviating those damages which 
also minimize impacts on fishery and wildlife resources, provide 
opportunities for ecosystem restoration, provide for recreational 
opportunities; and to determine whether there is a Federal interest to 
proceed into the Feasibility Study Phase.
    Study Authorization.--In May 2002, the House of Representatives 
Committee on Transportation and Infrastructure passed a resolution 
directing the Corps to ``. . . review the report of the Chief of 
Engineers on Coyote and Berryessa Creeks . . . and other pertinent 
reports, to determine whether modifications of the recommendations 
contained therein are advisable in the interest of flood damage 
reduction, environmental restoration and protection, water conservation 
and supply, recreation, and other allied purposes . . .''
    Fiscal Year 2006 Administration Budget Request and Funding.--The 
Coyote Watershed Study was one of only three ``new start'' studies 
proposed for funding nationwide in the administration's fiscal year 
2006 budget request. Congress did not include funding for the study in 
the final fiscal year 2006 appropriations bill.
    Fiscal Year 2007 Funding.--An appropriation add-on of $100,000 was 
requested in fiscal year 2007, and $100,000 was included in the Senate 
Appropriation bill. No funds were appropriated in the fiscal year 2007 
Corps Work Plan.
    Fiscal Year 2008 Funding Recommendation.--It is requested that the 
Congressional Committee support an appropriation add-on of $100,000 to 
initiate a multi-purpose Reconnaissance Study within the Coyote Creek 
Watershed.

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

    Background.--The Berryessa Creek Watershed is located in northeast 
Santa Clara County, California, near the southern end of the San 
Francisco Bay. A major tributary of Coyote Creek, Berryessa Creek 
drains 22 square miles in the city of Milpitas and a portion of San 
Jose.
    On average, Berryessa Creek floods once every four years. The most 
recent flood in 1998 resulted in significant damage to homes and 
automobiles. The proposed project on Berryessa Creek, from Calaveras 
Boulevard to upstream of Old Piedmont Road, will protect portions of 
the cities of San Jose and Milpitas. The flood plain is largely 
urbanized with a mix of residential and commercial development. Based 
on the U.S. Army Corps of Engineers (Corps) 2005 report, a 1 percent or 
100-year flood could potentially result in damages exceeding $179 
million. Benefit-to-cost ratios for the 6 project alternatives being 
evaluated range from 2:1 to 7.3:1.
    Study Synopsis.--In January 1981, the Santa Clara Valley Water 
District (District) applied for Federal assistance for flood protection 
projects under section 205 of the 1948 Flood Control Act. The Water 
Resources Development Act of 1990 authorized construction on the 
Berryessa Creek Flood Protection Project as part of a combined Coyote/
Berryessa Creek Project to protect portions of the cities of Milpitas 
and San Jose.
    The Coyote Creek element of the project was completed in 1996. The 
Berryessa Creek Project element proposed in the Corps' 1987 feasibility 
report consisted primarily of a trapezoidal concrete lining. This was 
not acceptable to the local community. The Corps and the District are 
currently preparing a General Reevaluation Report which involves 
reformulating a project which is more acceptable to the local community 
and more environmentally sensitive. Project features will include 
setback levees and floodwalls to preserve sensitive areas (minimizing 
the use of concrete), appropriate aquatic and riparian habitat 
restoration and fish passage, and sediment control structures to limit 
turbidity and protect water quality. The project will also accommodate 
the city of Milpitas' adopted trail master plan. Estimated total costs 
of the General Reevaluation Report work are $5 million, and should be 
completed in the spring of 2007.
    Fiscal Year 2007 Funding.--$100,000 in the fiscal year 2007 Corps 
Work Plan for the Coyote/Berryessa Creek Flood Protection Project to 
continue the General Reevaluation Report and environmental documents 
update.
    Fiscal Year 2008 Funding Recommendation.-- Based on the continuing 
threat of significant flood damage from Berryessa Creek and the need to 
continue with the General Reevaluation Report, it is requested that the 
Congressional Committee support an appropriation add-on of $1.35 
million, in addition to the $950,000 in the Administration's fiscal 
year 2008 budget request, for a total of $2.3 million for the Berryessa 
Creek Flood Protection Project element of the Coyote/Berryessa Creek 
Project.

             STATEMENT OF SUPPORT--GUADALUPE RIVER PROJECT

    Background.--The Guadalupe River is a major waterway flowing 
through a highly developed area of San Jose, in Santa Clara County, 
California. A major flood would damage homes and businesses in the 
heart of Silicon Valley. Historically, the river has flooded downtown 
San Jose and the community of Alviso. According to the U.S. Army Corps 
of Engineers (Corps) 2000 Final General Reevaluation & Environmental 
Report for Proposed Project Modifications, estimated damages from a 1 
percent flood in the urban center of San Jose are over $576 million. 
The Guadalupe River overflowed in February 1986, January 1995, and 
March 1995, damaging homes and businesses in the St. John and Pleasant 
Street areas of downtown San Jose. In March 1995, heavy rains resulted 
in breakouts along the river that flooded approximately 300 homes and 
business.
    Project Synopsis.--In 1971, the local community requested that the 
Corps reactivate its earlier study. Since 1972, substantial technical 
and financial assistance have been provided by the local community 
through the Santa Clara Valley Water District in an effort to 
accelerate the project's completion. To date, more than $85.8 million 
in local funds have been spent on planning, design, land purchases, and 
construction in the Corps' project reach.
    The Guadalupe River Project received authorization for construction 
under the Water Resources Development Act of 1986; the General Design 
Memorandum was completed in 1992, the local cooperative agreement was 
executed in March 1992, the General Design Memorandum was revised in 
1993, construction of the first phase of the project was completed in 
August 1994, construction of the second phase was completed in August 
1996. Project construction was temporarily halted due to environmental 
concerns.
    To achieve a successful, long-term resolution to the issues of 
flood protection, environmental mitigation, avoidance of environmental 
effects, and project monitoring and maintenance costs, a multi-agency 
``Guadalupe Flood Control Project Collaborative'' was created in 1997. 
A key outcome of the collaborative process was the signing of the 
Dispute Resolution Memorandum in 1998, which modified the project to 
resolve major mitigation issues and allowed the project to proceed. 
Energy and Water Development Appropriations Act of 2002 was signed into 
law on November 12, 2001. This authorized the modified Guadalupe River 
Project at a total cost of $226.8 million. Subsequent to the 
authorization, the project cost has been raised to $251 million. 
Construction of the last phase of flood protection was completed in 
December 2004 and a completion celebration held in January 2005. The 
remaining construction consists of railroad bridge replacements and 
mitigation plantings. The overall construction of the project including 
the river park and the recreation elements is scheduled for completion 
in 2006.
    Fiscal Year 2007 Funding.--$5.6 million in the fiscal year 2007 
Corps Work Plan to continue Guadalupe River Project construction.
    Fiscal Year 2008 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $8 million 
to continue construction of the final phase of the Guadalupe River 
Flood Protection Project.

               STATEMENT OF SUPPORT--LLAGAS CREEK PROJECT

    Background.--The Llagas Creek Watershed is located in southern 
Santa Clara County, California, serving the communities of Gilroy, 
Morgan Hill and San Martin. Historically, Llagas Creek has flooded in 
1937, 1955, 1958, 1962, 1963, 1969, 1982, 1986, 1996, 1997, 1998, and 
2002. The 1997, 1998, and 2002 floods damaged many homes, businesses, 
and a recreational vehicle park located in areas of Morgan Hill and San 
Martin. These are areas where flood protection is proposed. Overall, 
the proposed project will protect the floodplain from a 1 percent flood 
affecting more than 1,100 residential buildings, 500 commercial 
buildings, and 1,300 acres of agricultural land.
    Project Synopsis.--Under authority of the Watershed Protection and 
Flood Prevention Act (Public Law 566), the Natural Resources 
Conservation Service completed an economic feasibility study in 1982 
for constructing flood damage reduction facilities on Llagas Creek. The 
Natural Resources Conservation Service completed construction of the 
last segment of the channel for Lower Llagas Creek in 1994, providing 
protection to the project area in Gilroy. The U.S. Army Corps of 
Engineers (Corps) is currently updating the 1982 environmental 
assessment work and the engineering design for the project areas in 
Morgan Hill and San Martin. The engineering design is being updated to 
protect and improve creek water quality and to preserve and enhance the 
creek's habitat, fish, and wildlife while satisfying current 
environmental and regulatory requirements. Significant issues include 
the presence of additional endangered species including the red-legged 
frog and steelhead, listing of the area as probable critical habitat 
for steelhead, and more extensive riparian habitat than were considered 
in 1982. Project economics are currently being updated as directed by 
Corps Headquarters to determine continued project economic viability.
    Until 1996, the Llagas Creek Project was funded through the 
traditional Public Law 566 Federal project funding agreement with the 
Natural Resources Conservation Service paying for channel improvements 
and the District paying local costs including utility relocation, 
bridge construction, and right of way acquisition. Due to the steady 
decrease in annual appropriations for the Public Law 566 construction 
program since 1990, the Llagas Creek Project had not received adequate 
funding to complete the Public Law 566 project. To remedy this 
situation, the District worked with congressional representatives to 
transfer the construction authority from the Department of Agriculture 
to the Corps under the Water Resources Development Act of 1999 (section 
501). Since the transfer of responsibility to the Corps, the District 
has been working with the Corps to complete the project. Efforts are 
underway to reauthorize the project at its current project cost in the 
recently introduced Water Resources Development Act of 2007.
    Fiscal Year 2007 Funding.--$250,000 in the fiscal year 2007 Corps 
Work Plan.
    Fiscal Year 2008 Funding Recommendation.--Based upon the high risk 
of flood damage from Llagas Creek, it is requested that the 
Congressional Committee support an appropriation add-on of $368,000 in 
fiscal year 2008 for planning, design, and environmental updates for 
the Llagas Creek Project.

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

    Background.--The San Francisquito Creek watershed comprises 45 
square miles and 70 miles of creek system. The creek mainstem flows 
through five cities and two counties, from Searsville Lake, belonging 
to Stanford University, to the San Francisco Bay at the boundary of 
East Palo Alto and Palo Alto. Here it forms the boundary between Santa 
Clara and San Mateo Counties, California and separates the cities of 
Palo Alto from East Palo Alto and Menlo Park. The upper watershed 
tributaries are within the boundaries of Portola Valley and Woodside 
townships. The creek flows through residential and commercial 
properties, a biological preserve, and Stanford University campus. It 
interfaces with regional and State transportation systems by flowing 
under two freeways and the regional commuter rail system. San 
Francisquito Creek is one of the last natural continuous riparian 
corridors on the San Francisco Peninsula and home to one of the last 
remaining viable steelhead trout runs. The riparian habitat and urban 
setting offer unique opportunities for a multi-objective flood 
protection and ecosystem restoration project.
    Flooding History.--The creeks mainstem has a flooding frequency of 
approximately once in 11 years. It is estimated that over $155 million 
in damages could occur in Santa Clara and San Mateo counties from a 1 
percent flood, affecting 4,850 homes and businesses. Significant areas 
of Palo Alto flooded in December 1955, inundating about 1,200 acres of 
commercial and residential property and about 70 acres of agricultural 
land. April 1958 storms caused a levee failure downstream of Highway 
101, flooding Palo Alto Airport, the city landfill, and the golf course 
up to 4-feet deep. Overflow in 1982 caused extensive damage to private 
and public property. The flood of record occurred on February 3, 1998, 
when overflow from numerous locations caused severe, record 
consequences with more than $28 million in damages. More than 1,100 
homes were flooded in Palo Alto, 500 people were evacuated in East Palo 
Alto, and the major commute and transportation artery, Highway 101, was 
closed.
    Status.--Active citizenry are anxious to avoid a repeat of the 
February 1998 flood. Numerous watershed based studies have been 
conducted by the Corps, the Santa Clara Valley Water District, Stanford 
University, and the San Mateo County Flood Control District. 
Grassroots, consensus based organization, called the San Francisquito 
Watershed Council, has united stakeholders including local and State 
agencies, citizens, flood victims, developers, and environmental 
activists for over 10 years. The San Francisquito Creek Joint Powers 
Authority was formed in 1999 to coordinate creek activities with five 
member agencies and two associate members. The Authority Board has 
agreed to be the local sponsor for a Corps project and received 
Congressional authorization for a Corps reconnaissance study in May 
2002. The Reconnaissance Study was completed in March 2005 and the 
Feasibility Study was initiated in November 2005.
    Fiscal Year 2007 Funding.--$300,000 in the fiscal year 2007 Corps 
Work Plan.
    Fiscal Year 2008 Funding Recommendation.--It is requested the 
congressional committee support an appropriation add-on of $700,000 to 
continue the Feasibility Study.

     STATEMENT OF SUPPORT--SOUTH SAN FRANCISCO BAY SHORELINE STUDY

    Background.--Congressional passage of the Water Resources 
Development Act of 1976, originally authorized the San Francisco Bay 
Shoreline Study, and Santa Clara Valley Water District (District) was 
one of the project sponsors. In 1990, the U.S. Army Corps of Engineers 
(Corps) concluded that levee failure potential was low because the 
existing non-Federal, non-engineered levees, which were routinely 
maintained by Leslie Salt Company (subsequently Cargill Salt) to 
protect their industrial interests, had historically withstood 
overtopping without failure. As a result, the project was suspended 
until adequate economic benefits could be demonstrated.
    Since the project's suspension in 1990, many changes have occurred 
in the South Bay. The State and Federal acquisition of approximately 
15,000 acres of South Bay salt ponds was completed in early March 2003. 
The proposed restoration of these ponds to tidal marsh will 
significantly alter the hydrologic regime and levee maintenance 
activities, which were assumed to be constant in the Corps' 1990 study. 
In addition to the proposed restoration project, considerable 
development has occurred in the project area. Many major corporations 
are now located within Silicon Valley's Golden Triangle, lying within 
and adjacent to the tidal flood zone. Damages from a 1 percent high 
tide are anticipated to far exceed the $34.5 million estimated in 1981, 
disrupting business operations, infrastructure, and residences. Also, 
historical land subsidence of up to 6 feet near Alviso, as well as the 
structural uncertainty of existing salt pond levees, increases the 
potential for tidal flooding in Santa Clara County.
    In July 2002, Congress authorized a review of the Final 1992 Letter 
Report for the San Francisco Bay Shoreline Study. The final fiscal year 
2004 appropriation for the Corps included funding for a new start 
Reconnaissance Study.
    Project Synopsis.--At present, large areas of Santa Clara, Alameda 
and San Mateo Counties would be impacted by flooding during a 1 percent 
high tide. The proposed restoration of the South San Francisco Bay salt 
ponds will result in the largest restored wetland on the West Coast of 
the United States, and also significantly alter the hydrologic regime 
adjacent to South Bay urban areas. The success of the proposed 
restoration is therefore dependent upon adequate tidal flood 
protection, and so this project provides an opportunity for multi-
objective watershed planning in partnership with the California Coastal 
Conservancy, the lead agency on the restoration project. Project 
objectives include: restoration and enhancement of a diverse array of 
habitats, especially several special status species; tidal flood 
protection; and provision of wildlife-oriented public access. A Corps 
Reconnaissance Study was completed in September 2004 and the 
Feasibility Study was initiated in September 2005.
    Fiscal Year 2007 Funding.--$1.3 million in the fiscal year 2007 
Corps Work Plan to continue the Feasibility Study.
    Fiscal Year 2008 Funding Request.--It is requested that the 
Congressional Committee support an appropriation add-on of $2.5 million 
to continue the Feasibility Study to evaluate integrated flood 
protection and environmental restoration.

          STATEMENT OF SUPPORT--UPPER GUADALUPE RIVER PROJECT

    Background.--The Guadalupe River is one of two major waterways 
flowing through a highly urbanized area of Santa Clara County, 
California, the heart of Silicon Valley. Historically, the river has 
flooded the central district and southern areas of San Jose. According 
to U.S. Army Corps of Engineers (Corps) 1998 feasibility study, severe 
flooding would result from a 100-year flooding event and potentially 
cause $280 million in damages.
    The probability of a large flood occurring before implementation of 
flood prevention measures is high. The upper Guadalupe River overflowed 
in March 1982, January 1983, February 1986, January 1995, March 1995, 
and February 1998, causing damage to several residences and businesses 
in the Alma Avenue and Willow Street areas. The 1995 floods in January 
and March, as well as in February 1998, closed Highway 87 and the 
parallel light-rail line, a major commute artery.
    Project Synopsis.--In 1971, the Santa Clara Valley Water District 
(District) requested the Corps reactivate an earlier study of Guadalupe 
River. From 1971 to 1980, the Corps established the economic 
feasibility and Federal interest in the Guadalupe River only between 
Interstate 880 and Interstate 280. Following the 1982 and 1983 floods, 
the District requested that the Corps reopen its study of the upper 
Guadalupe River upstream of Interstate 280. The Corps completed a 
reconnaissance study in November 1989, which established an 
economically justifiable solution for flood protection in this reach. 
The report recommended proceeding to the feasibility study phase, which 
began in 1990. In January 1997, the Corps determined that the National 
Economic Development (NED) Plan would be a 2 percent or 50 year level 
of flood protection rather than the 1 percent or 100 year level. The 
Corps feasibility study determined the cost of the locally preferred 
100-year plan is $153 million and the Corps NED 50-year plan is $98 
million. The District requested that the costs of providing 50-year and 
100-year flood protection be analyzed during the preconstruction 
engineering design phase. The Corps is now proceeding with the 
preconstruction engineering design phase and has refined the NED Plan 
to address the District's comments and Endangered Species Act issues 
and has reevaluated the locally preferred plan for full Federal cost 
sharing. The findings were submitted to Corps Headquarters for approval 
in March 2004 in a Limited Reevaluation Report on the Proposed Project 
Modifications. This report contains an evaluation of the revised NED 
Plan project and the Locally Preferred Plan project, which costs $165 
million with a benefit-to-cost ratio of 1:1.42 and $212 million with a 
benefit-to-cost ratio of 1:1.24, respectively. The Report was approved 
by the Corps in October 2005. The report recommended full cost-sharing 
on the Locally Preferred Plan project. Current efforts are underway to 
reauthorize the project at its current project cost in the recently 
introduced Water Resources Development Act of 2007.
    Fiscal Year 2007 Funding.--No funds were appropriated in the fiscal 
year 2007 Corps Work Plan for the Upper Guadalupe River Project.
    Fiscal Year 2008 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $10.5 
million in fiscal year 2008 to complete final design and continue 
construction on the Upper Guadalupe River Flood Protection Project.

  STATEMENT OF SUPPORT--UPPER PENITENCIA CREEK FLOOD PROTECTION PROJECT

    Background.--The Upper Penitencia Creek Watershed is located in 
northeast Santa Clara County, California, near the southern end of the 
San Francisco Bay. In the last two decades, the creek has flooded in 
1980, 1982, 1983, 1986, 1995, and 1998. The January 1995 flood damaged 
a commercial nursery, a condominium complex, and a business park. The 
February 1998 flood also damaged many homes, businesses, and surface 
streets.
    The proposed project on Upper Penitencia Creek, from the Coyote 
Creek confluence to Dorel Drive, will protect portions of the cities of 
San Jose and Milpitas. The floodplain is completely urbanized; 
undeveloped land is limited to a few scattered agricultural parcels and 
a corridor along Upper Penitencia Creek. Based on an August 2004 U.S. 
Army Corps of Engineers' (Corps) Economics Analysis, over 5,000 homes 
and businesses in the cities of San Jose and Milpitas are located in 
the 1 percent or 100 year flood area. Flood damages were estimated at 
$455 million. Benefit to cost ratios for the 9 project alternatives 
range from 2:1 to 3.1:1.
    Study Synopsis.--Under authority of the Watershed Protection and 
Flood Prevention Act (Public Law 83-566), the Natural Resources 
Conservation Service (formerly the Soil Conservation Service) completed 
an economic feasibility study (watershed plan) for constructing flood 
damage reduction facilities on Upper Penitencia Creek. Following the 
1990 U.S. Department of Agriculture Farm bill, the Natural Resources 
Conservation Service watershed plan stalled due to the very high ratio 
of potential urban development flood damage compared to agricultural 
damage in the project area.
    In January 1993, the Santa Clara Valley Water District (District) 
requested the Corps proceed with a reconnaissance study in the 1994 
fiscal year while the Natural Resources Conservation Service plan was 
on hold. Funds were appropriated by Congress for fiscal year 1995 and 
the Corps started the reconnaissance study in October 1994. The 
reconnaissance report was completed in July 1995, with the 
recommendation to proceed with the feasibility study phase. The 
feasibility study, initiated in February 1998, is currently scheduled 
for completion in 2007.
    Advance Construction.--To accelerate project implementation, the 
District submitted a section 104 application to the Corps for approval 
to construct a portion of the project. The application was approved in 
December 2000. The advance construction is for a 2,600-foot long 
section of bypass channel between Coyote Creek and King Road. However, 
due to funding constraints at the District and concerns raised by 
regulatory agencies, the design was stopped and turned over to the 
Corps to complete.
    Fiscal Year 2007 Funding.--$319,000 in the fiscal year 2007 Corps 
Work Plan for continued project investigation.
    Fiscal Year 2008 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $109,000, in 
addition to the $191,000 in the administration's fiscal year 2008 
budget request, for a total of $300,000 for the Upper Penitencia Creek 
Flood Protection Project to continue the Feasibility Study.
                                 ______
                                 
       Prepared Statement of the Calaveras County Water District

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

                  COSGROVE CREEK FLOOD CONTROL PROJECT

    The Cosgrove Creek Flood Control Project will address flooding that 
occurs along the lower reaches of the creek, as well as flooding that 
occurs on Spring Creek. Flooding in these areas impacts over 400 people 
and 100 structures located in the 100-year floodplain. Within the 
context of the flood control effort, the project will also address 
options for the beneficial use of peak flows and address other local 
concerns such as the need for recreational opportunities in the area.
    The Calaveras County Water District respectfully requests $100,000 
for this project in fiscal year 2008 from the Corps of Engineers 
Construction General account.

  NEW HOGAN RESERVOIR/CALAVERAS COUNTY REGIONAL WATER AND WASTEWATER 
                             FACILITY STUDY

    This project will address regional water and wastewater facility 
needs for the region. New uses for recycled water, including wetlands 
creation, groundwater recharge and conjunctive use, are key elements of 
the project and will meet critical water use efficiency and 
environmental needs of the area. This project will also fund the New 
Hogan Lake Reoperation study to examine if operation of the project 
should be changed to more closely meet the contemporary needs of the 
area, including problems associated with downstream flooding and 
conjunctive use of water.
    The Calaveras County Water District respectfully requests 
$1,000,000 from the Corps of Engineers under section 205 in fiscal year 
2008, switching to section 219 depending on WRDA.
                                 ______
                                 
     Prepared Statement of the California State Coastal Conservancy

                                SUMMARY

    The following testimony is in support of the California State 
Coastal Conservancy's fiscal year 2008 Energy and Water Appropriations 
requests. The Conservancy respectfully requests needed funding for the 
following critical projects: $7.65 million for the Hamilton Bel-Marin 
Keys Wetland Restoration Project, Army Corps of Engineers, Construction 
General; $2.5 million for the South San Francisco Bay Shoreline Study, 
Army Corps of Engineers, General Investigations; $750,000 for the Napa 
River Salt Marsh Restoration Project, Army Corps of Engineers, General 
Investigations; $13.59 million for the Upper Newport Bay Ecosystem 
Restoration Project, Army Corps of Engineers, Construction General; 
$3,000,000 for the Matilija Dam Ecosystem Restoration Project, Army 
Corps of Engineers, General Investigations and $300,000 for the San 
Pablo Bay Watershed Restoration Program.

                         CONSERVANCY BACKGROUND

    The California Coastal Conservancy, established in 1976, is a State 
agency that uses entrepreneurial techniques to purchase, protect, 
restore, and enhance coastal resources, and to provide access to the 
shore. We work in partnership with local governments, other public 
agencies, nonprofit organizations, and private landowners.
    To date, the Conservancy has undertaken more than 950 projects 
along the 1,100 mile California coastline and around San Francisco Bay. 
Through such projects, the Conservancy: protects and improves coastal 
wetlands, streams, and watersheds; works with local communities to 
revitalize urban waterfronts; assists local communities in solving 
complex land-use problems and protects agricultural lands and supports 
coastal agriculture to list a few of our activities.
    Since its establishment in 1976, the Coastal Conservancy has: 
helped build more than 300 access ways and trails, thus opening more 
than 80 miles of coastal and bay lands for public use; assisted in the 
completion of over 100 urban waterfront projects; joined in partnership 
endeavors with more than 100 local land trusts and other nonprofit 
groups, making local community involvement an integral part of the 
Coastal Conservancy's work and completed projects in every coastal 
county and all 9 San Francisco Bay Area counties. In addition, we 
currently have over 300 active projects that are benefiting the 
citizens of California.
Hamilton Bel-Marin Keys Wetland Restoration Project
    In fiscal year 2008 the California Coastal Conservancy is seeking 
$7.65 million, consistent with Corps of Engineers' capability, for the 
continued construction of this project.
    This project is of critical importance as it will provide nearly 
700 acres of restored tidal and seasonal wetlands at a former Army 
base, in Marin County, California and provide much needed habitat for 
several threatened and endangered species; as well as, shorebirds and 
waterfowl migrating along the Pacific Flyway. In addition, this project 
beneficially uses dredged material from the San Francisco Bay which 
provides for increased navigation and maritime commerce for the Bay 
Area, a much needed economic stimulus for the region.
    The first phase of construction, which started last year, is taking 
place on the former Army Airfield. Miles of levees are currently under 
construction, after which the main runway and taxiways will be buried 
under millions of cubic yards of clean dredged sediment. Subsequently, 
the easterly levee will be breached allowing tidal waters to once again 
flood the site. Later in the project, the Corps will work on the 
adjacent Antenna field and Bel Marin Keys V property (subject to WRDA 
approval) resulting in a total project area of nearly 2,500 acres. This 
phased approach will be used to complete the design and construction 
tasks in conjunction with the availability of land and dredged 
material.
South San Francisco Bay Shoreline Study
    The Conservancy is seeking $2.5 million in funding in order to 
continue the Feasibility Study for this project. The study was 
initiated in fiscal year 2005 and has been ongoing, receiving $600,000 
in funds in fiscal year 2006.
    This project is of national significance as it will create the 
largest restored wetland on the West Coast of the United States and 
will provide extensive habitat for federally endangered species and 
migratory waterfowl. In addition, the project is also critical to the 
region as it will provide tidal and fluvial flood protection for the 
South San Francisco Bay Area protecting approximately 42,800 acres, 
7,400 homes and businesses, and significant urban infrastructure, to 
include major highways, hospitals and airport facilities.
    In order to continue to advance this important study it is 
imperative that local interests and the Federal Government work 
together to ensure a reliable funding stream for the project. In 
accordance, substantial cost-sharing has already begun among the land 
management agencies. The U.S. Fish and Wildlife Service contributed $8 
million toward the $100 million acquisition of the salt ponds. The 
State of California provided $72 million and the Hewlett Foundation, 
Packard Foundation, Moore Foundation, and Goldman Fund provided $20 
million. The foundations are providing an additional $15 million for 
restoration planning and $9 million for land management. The State of 
California is providing $8 million for planning and $6 million for land 
management.
Napa River Salt Marsh
    For fiscal year 2008, we are seeking $750,000 in Federal funds in 
order to complete preconstruction engineering and design (PED) for this 
project which will allow construction to commence as soon as the 
project is authorized by Congress. Last year, $125,000 was appropriated 
to the Corps of Engineers for PED activities.
    The funds requested would allow the Corps of Engineers to complete 
design of the Napa River Salt Marsh Project. Upon authorization of the 
project in WRDA, the Corps will be able to construct the project. 
Construction of the project will provide extensive benefits to the 
region, to include: providing extensive wetland habitat in San 
Francisco Bay; the beneficial use for recycled water in the North Bay; 
improve open space and recreational opportunities; and resolve urgent 
issues associated with deterioration of the site's levee, water control 
structures, and water quality.
    The 10,000 acre Napa River Salt Marsh was purchased by the State of 
California from Cargill in 1994 and is managed by the California 
Department of Fish and Game. The State Coastal Conservancy has been the 
non-Federal sponsor working with the Corps on the Feasibility Study. 
The Corps' Feasibility Study was completed and the Chief's Report was 
signed in December of 2004. Preconstruction engineering and design is 
currently taking place with construction commencing once the project is 
authorized in WRDA.
Upper Newport Bay Ecosystem Restoration
    In fiscal year 2008, we are seeking $13.59 million in funding to 
complete construction and avoid cost increases and project delays.
    Upper Newport Bay, one of the largest remaining tidal wetlands in 
Southern California, provides significant habitat for numerous 
federally endangered species, migratory waterfowl and shorebirds along 
the Pacific Flyway, and anadromous fish and other aquatic species. To 
ensure the long-term viability of this diverse salt marsh ecosystem as 
well as the stability of the region's ecosystem, the Army Corps of 
Engineers and the County of Orange developed the Upper Newport Bay 
Ecological Restoration Project, which was authorized in the Water 
Resources Development Act of 2000.
    The project will address the habitat conversion resulting from 
sedimentation in the upper bay, increase the quantity and quality of 
wetlands habitat, improve water quality by reducing sediment inflows 
and algal blooms and preserve both Federal and local navigational 
channels, which if unaddressed will require costly maintenance 
dredging.
    A construction contract was awarded in September 2005 and 
construction is underway. The available funds (Federal and non-Federal) 
will be expended by late summer 2006. The funding request of $18 
million for fiscal year 2007 will complete construction of this project 
and avoid cost increases from re-mobilizing equipment and inflation.
Matilija Dam Ecosystem Restoration Project
    In fiscal year 2008 we are seeking $3 million for the Army Corps of 
Engineers General Investigation account to complete the U.S. Army Corps 
of Engineers' engineering and Design work of the project.
    The Matilija Dam Ecosystem Restoration Project is a project of 
vital importance as the project seeks to remove the 200-foot tall 
Matilija Dam on a tributary to the Ventura River. This critical project 
is designed to reestablish runs of the endangered southern steelhead 
trout and to allow sand to flow to coastal beaches. This project is one 
of the largest dam removal projects in the Country and enjoys broad 
support from many local, State and Federal agencies.
    In order to remove the dam, 6 million cubic yards of sediments 
trapped behind the dam will be moved or recontoured. A high flow 
sediment bypass system will be constructed at a water diversion 
downstream. A silt removal system will be installed along the diversion 
canal. In addition, levees will be built in several places along the 
river channel to protect property from flooding due to the expected 
increases in stream channel elevation in the first years after removal 
of the dam. The project also involves removal of invasive plants and 
the installation of replacement water wells
San Pablo Bay Watershed Restoration Program
    We are seeking $300,000 in fiscal year 2008 appropriations for the 
U.S. Army Corps of Engineers General Investigations account.
    This critical program provides technical, planning and design 
assistance to local partners in one of the Nation's most treasured 
estuaries. Partnership collaboration and outreach guarantees that the 
program provides the services needed by local entities to improve 
habitat and flood protection throughout the watershed. By working with 
local entities, long-term water resources protection and restoration 
has increased.
    The support of the program would facilitate technical and planning 
assistance that will expand wetland habitat for numerous endangered 
species, migratory waterfowl and shorebirds, andramodous fish and other 
aquatic species. The project will also improve open space and 
recreation opportunities as well as resolve the following; issues 
surrounding levees on the Sears Point project, channel restoration on 
Gallinas Creek, water quality issues on the Black Point Antenna Field 
site as well as conduct environmental restoration and flood protection 
surveys on Wildcat Creek.
    We thank you for your consideration of these requests and look 
forward to working with you on these and other matters throughout the 
year.
                                 ______
                                 
          Prepared Statement of the American Chemical Society

    The American Chemical Society (ACS) would like to thank Chairman 
Byron Dorgan and Ranking Member Peter Domenici for the opportunity to 
submit testimony for the record on the Energy and Water Development 
Appropriations bill for fiscal year 2008. For fiscal year 2008, ACS 
requests the Department of Energy Office of Science be fully funded at 
the administration request of $4.398 billion.
    ACS is a non-profit scientific and educational organization, 
chartered by Congress, representing more than 160,000 individual 
chemical scientists and engineers. The world's largest scientific 
society, ACS advances the chemical enterprise, increases public 
understanding of chemistry, and brings its expertise to bear on State 
and national matters.
    As Congress and the administration seek to bolster the economy, 
economists agree that investments in basic research boost long-term 
economic growth more than other areas of Federal spending. Numerous 
recent reports cite the growing challenges American faces from global 
competitors, including the National Academies of Science report Rising 
Above the Gathering Storm.
    Basic physical science investments foster the new technologies and 
train the scientific workforce which drive the Nation's public health, 
defense, energy security, and environmental progress. Although industry 
funds the bulk of national R&D, the Federal Government provides 60 
percent of basic research funding and, remarkably, 40 percent of 
patents cite Federal research as their source. Yet Federal research in 
the physical sciences and engineering has been cut in half since 1970 
as a percentage of GDP. Fortunately, the President, top congressional 
leaders, and members of science and industry have all recognized the 
need to boost investment in physical sciences and engineering research. 
This investment has never been more important given its central role in 
advancing the Nation's economic, energy, and homeland security.
ACS Budget Recommendations
    Current Federal efforts to advance energy efficiency, production, 
and new energy sources while reducing air pollution and other 
environmental impacts will demand increased investment in long-term 
energy research. By supporting people, research, and world-class 
science and engineering facilities, the Department of Energy's Office 
of Science expands the frontiers of science in areas critical to DOE's 
energy, environment, and national security missions.
    The President's budget request represents leadership to ensure 
American competitiveness and innovation by providing the largest 
investment in DOE Office of Science in over 2 decades. Many in Congress 
have joined with the President in calling for expanded investment in 
basic physical science research. The President's request for $4.398 
billion is essential to ensuring the strength of our innovation 
economy.
    Increases in the Office of Science will help reverse the declining 
Federal support for physical science and encourage more students to 
pursue degrees in these fields. The Office of Science is the largest 
Federal supporter of research in the physical sciences, funding almost 
40 percent of research in these fields. The Office of Science fosters 
the new discoveries and technical talent that will continue to be 
essential to advances in coal, hydrogen, biomass, genomics, and many 
other technology areas. Additional funds should be directed to increase 
the number of grants, especially in core energy programs, and to 
improve research facilities. The Office is the primary source of 
Federal support in many research areas essential to our energy security 
and economy, such as catalysis, carbon cycle research, photovoltaics, 
combustion, and advanced computing. Increased investment is also 
important given the declining private support for long-term energy 
research.
Increase Grants in Core Programs
    ACS recommends that increases for the Office of Science be directed 
to advancing core energy research across disciplines, which enables DOE 
to respond rapidly to new challenges. For example, DOE capitalized on 
long-term atmospheric chemistry research, particularly in aerosols, and 
quickly developed a single anthrax-bacterium detector. DOE must 
strengthen its ability to attract scientists and train the next 
generation of scientists and engineers by increasing the number of 
grants in its core programs without reducing their size and duration. 
Current appropriations allow the DOE Office of Science to fund one 
third the proposals as the National Institutes of Health and the 
National Science Foundation. This rate is considerably lower than those 
of other agencies and amounts to lost opportunities for both 
significant discoveries and the education of the next generation of 
scientists and engineers.
    Within the Office of Science, ACS particularly supports the Basic 
Energy Sciences and Biological and Environmental Research programs. As 
the cornerstone of the Office, the Basic Energy Sciences (BES) program 
supports an array of long-term basic research to improve energy 
production and use and reduce the environmental impact of those 
activities. The BES program manages almost all of DOE's scientific 
user-facilities, and provides leading support for nanotechnology and 
advanced computing research--two priority research areas that will have 
important implications for energy efficiency and security. The 
Biological and Environmental Research (BER) program advances 
fundamental understanding in fields such as waste processing, 
bioremediation, and atmospheric chemistry to better understand 
potential long-term health and environmental effects of energy 
production and use and identify opportunities to prevent pollution. 
Progress in these fields is also needed to develop and advance new, 
effective, and efficient processes for the remediation and restoration 
of DOE weapons production sites. ACS supports a strong role for DOE in 
Federal efforts to advance pollution prevention and climate change 
research.
DOE and the Scientific Workforce
    As the largest supporter of research in the physical sciences, DOE 
can greatly affect the training and number of scientists in industry, 
government and academia. Inadequate investment in any research field 
constricts the supply of trained scientists and engineers who apply 
research and develop new technology. For instance, declining support 
for nuclear science and engineering will greatly affect the nuclear 
sector as a majority of today's nuclear scientists and engineers near 
retirement. Another example is the synergistic relationship between the 
need for radiochemists and NIH's ability to conduct clinical trials. 
Advances in diagnosis and treatment in nuclear medicine are dependent 
on the synthesis of highly specific radiopharmaceuticals that target 
biological processes in normal and diseased tissues. The Office of 
Science, through BER supported research, occupies a critical place in 
the field of radiopharmaceutical research. The NIH relies on the Office 
of Science's basic research to enable clinical trials.
    Another way for DOE to help attract students and retain talented 
scientists and engineers is to renew investments in scientific 
infrastructure. The Office of Science operates one of the most 
extensive and remarkable collection of scientific user facilities in 
the world, providing tools for research for more than 25,000 scientists 
funded by DOE, other Federal agencies, and industry. Many facilities 
are in poor condition or have outmoded instrumentation. Additional 
funding would allow for increased operating time, upgrades, 
instrumentation, and technical support. The proposed cuts could result 
in established facilities lying idle, allowing taxpayer investments to 
go unused.
    National laboratories also play an important role in providing 
research and training opportunities to enhance the university 
curriculum. ACS supports the initial plan by DOE to utilize its 
national laboratories to help mentor and train science teachers. 
Students at all levels clearly learn better when their teachers have a 
deep understanding of the subject, and the first-rate multidisciplinary 
research and scientific professionals at the national laboratories 
certainly could be a rich resource for science and math teachers. ACS 
urges stronger coordination among agencies with significant K-12 math 
and science programs in order to maximize the Federal investment in 
this area.
    ACS praises the work of Department of Energy leadership, and 
particularly Office of Science Director Ray Orbach, to establish a 
vision of America's scientific future with the 20 year facilities plan 
and a forward thinking departmental strategic plan. ACS views these 
documents, along with the Secretary of Energy's Advisory Board report 
``Critical Choices: Science, Energy, and Security'' as key elements of 
America's research and development portfolio. Growth in DOE Science 
funding is essential to realizing the goals in these documents, and ACS 
urges Congress to act to ensure this vision of a technologically 
advanced and safe America comes to fruition.
                                 ______
                                 
     Prepared Statement of the Napa County Flood Control and Water 
                         Conservation District

    On behalf of the Napa County Flood Control and Water Conservation 
District (District), I want to thank the subcommittee for this 
opportunity to present our priorities for fiscal year 2008 and, at the 
same time, express our appreciation for your support of the District's 
projects in the years past. The District is the local sponsor for the 
Corps of Engineers award-winning Napa River Flood Control project and 
we are requesting the subcommittee's full support of this project to 
ensure that it stays on schedule. Specifically, we request the 
subcommittee to support our request of $19 million from the Army Corps 
of Engineers Construction General account for the Napa River Flood 
Control Project. We are also seeking $3.615 million for the maintenance 
dredging of the Napa River from the Army Corps of Engineers (Operation 
and Maintenance, General account). The following text outlines these 
projects and the need for the requested funding.

                    NAPA RIVER FLOOD CONTROL PROJECT

Background
    In the last 50 years, 19 floods have struck the Valley region, 
exacting a heavy toll in loss of life and property.
    The most recent flooding event, the New Years flood of 2006, to hit 
our area is estimated to have caused some $70 million in damage within 
the city of Napa--with the vast majority of that damage in areas that 
will be protected by the Project that is currently under construction.
    The flood in 1986 killed three people and caused more than $100 
million in damage in 1986 dollars. Damages throughout Napa County 
totaled about $85 million from the January and March 1995 floods. The 
floods resulted in 27 businesses and 843 residences damaged countywide. 
Almost all of the damages from the 1986, 1995, and 1997 floods were 
within the Project area.
    Congress had authorized a flood control project in 1965, but due to 
expense, lack of public consensus on the design and concern about 
environment impacts, a project had never been realized. In mid-1995, 
Federal and State resource agencies reviewed the plan and gave notice 
to the Corps that this plan had significant regulatory hurdles to face.
    The project is located in the city and county of Napa, California. 
The population in the city of Napa, approximately, 67,000 in 1994, is 
expected to exceed 77,000 this year. Excluding public facilities, the 
present value of damageable property within the project flood plain is 
well over $500 million. The Napa River Basin, comprising 426 square 
miles, ranging from tidal marshes to mountainous terrain, is subject to 
severe winter storms and frequent flooding. In the lower reaches of the 
river, flood conditions are aggravated by local runoff. Floods in the 
Napa area have occurred in 1955, 1958, 1963, 1965, 1986 (flood of 
record), 1995, 1997 and 2005. In 1998, the river rose just above flood 
stage on three occasions, but subsided before major property damage 
occurred. In December of 2002, flooding occurred from the Napa Creek at 
the transition to the Napa River, resulting in damage to numerous 
residents and several businesses.
Approved Plan--Project Overview
    In an effort to identify a meaningful and successful plan, a new 
approach emerged that looked at flood control from a broader, more 
comprehensive perspective. Citizens for Napa River Flood Management was 
formed, bringing together a diverse group of local engineers, 
architects, aquatic ecologists, business and agricultural leaders, 
environmentalists, government officials, homeowners and renters and 
numerous community organizations.
    Through a series of public meetings and intensive debate over every 
aspect of Napa's flooding problems, the Citizens for Napa River Flood 
Management crafted a flood management plan offering a range of benefits 
for the entire Napa region. The Corps of Engineers served as a partner 
and a resource for the group, helping to evaluate their approach to 
flood management. The final plan produced by the Citizens for Napa 
River Flood Management was successfully evaluated through the research, 
experience and state-of-the-art simulation tools developed by the Corps 
and numerous international experts in the field of hydrology and other 
related disciplines. The success of this collaboration serves as a 
model for the Nation.
    Acknowledging the river's natural state, the project utilizes a set 
of living river strategies that minimize the disruption and alteration 
of the river habitat, and maximizes the opportunities for environmental 
restoration and enhancement throughout the watershed.
    The Corps has developed the revised plan, which provides 100-year 
protection, with the assistance of the community and its consultants 
into the Supplemental General Design Memorandum (SGDM) and its 
accompanying draft Environmental Impact Statement/Environmental Impact 
Report (SEIS/EIR). Construction of the project began 2 years ago. The 
coalition plan now memorialized in the Corps final documents includes 
the following engineered components: lowering of old dikes, marsh plain 
and flood plain terraces, oxbow dry bypass, Napa Creek flood plain 
terrace, upstream and downstream dry culverts along Napa Creek, new 
dikes, levees and flood walls, bank stabilization, pump stations and 
detention facilities, and bridge replacements. The benefits of the plan 
include reducing or elimination of loss of life, property damage, 
cleanup costs, community disruption due to unemployment and lost 
business revenue, and the need for flood insurance. In fact, the 
project has created an economic renaissance in Napa with new 
investment, schools and housing coming into a livable community on a 
living river. As a key feature, the plan will improve water quality, 
create urban wetlands and enhance wildlife habitats.
    The plan will protect over 7,000 people and over 3,000 residential/
commercial units from the 100-year flood event on the Napa River and 
its main tributary, the Napa Creek, and the project has a positive 
benefit-to-cost ratio under the Corps calculation. One billion dollars 
in damages will be saved over the useful life of the project. The Napa 
County Flood Control District is meeting its local cost-sharing 
responsibilities for the project. A countywide sales tax, along with a 
number of other funding options, was approved 4 years ago by a two-
thirds majority of the county's voters for the local share. Napa is 
California's highest repetitive loss community. This plan is 
demonstrative of the disaster resistant community initiative, as well, 
as the sustainable development initiatives of FEMA and EPA.

                      NAPA RIVER DREDGING PROJECT

    The Napa River navigation project was authorized by the Rivers and 
Harbors Acts of 1888, 1935, and 1946.
    The Napa River is a shallow draft navigation channel which serves 
light commercial and recreational traffic. The project is normally 
dredged by the Corps of Engineers on a 6-year cycle, with the most 
recent dredging begin completed in 1998. This dredging is 2 years 
overdue and is causing not only impediment to commercial activity but 
posing major obstacles for construction of the project from the river. 
Maintenance dredging is required to restore depths required for 
existing traffic and in anticipation of the additional boat traffic 
resulting from replacement of Maxwell Bridge. The Napa County Flood 
Control and Water Conservation District is responsible for providing a 
suitable disposal site for the dredged material.
                                 ______
                                 
        Prepared Statement of the City of St. Helena, California
City Of St. Helena
    The city of St. Helena is located in the center of the wine growing 
Napa Valley, 65 miles north of San Francisco. The area was settled in 
1834 as part of General Vallejo's land grant. The city of St. Helena 
was incorporated as a city on March 24, 1876 and reincorporated on May 
14, 1889.
    The city of St. Helena is a General Law City and operates under the 
Council-City Manager form of government. St. Helena is a full service 
city and encompasses an area of 4 square miles. The City Council is the 
governing body and has the power to make and enforce all laws and set 
policy related to municipal affairs. The official population of the 
city of St. Helena as of January 1, 2003, is 6,041. Because of its size 
and its rural nature, St. Helena has serious infrastructure, as well 
as, flood protection and environmental needs that far exceed its 
financial capabilities.
    The city from its inception has served as a rural agricultural 
center. Over the years, with the growth and development of the wine 
industry, the city has become an important business and banking center 
for the wine industry. The city also receives many tourists as a result 
of the wine industry. While, the main goal of the city is to maintain a 
small-town atmosphere and to provide quality services to its citizens, 
this is becoming increasingly difficult. Regulatory, administrative and 
resource requirements placed on the city through the listing of 
threatened and endangered species under the Endangered Species Act on 
the Napa River, as well as significant Clean Water Act requirements 
require the city with a small population base to face significant 
financial costs.
    The Napa River flows along the east boundary of the city of St. 
Helena in northern Napa County. The overall Napa River Watershed 
historically supported a dense riparian forest and significant wetland 
habitat. Over the last 200 years, approximately 6,500 acres of valley 
floor wetlands have been filled in and 45,700 acres of overall 
watershed have been converted to urban and agricultural uses. This 
degradation of natural habitats has had a significant effect on water 
quality, vegetation and wildlife, and aquatic resources within the Napa 
River Watershed.
    Surface water quality of the Napa River is dependent upon time of 
year, runoff from York and Sulphur Creeks, and urban area discharges. 
During the winter months when stream flow is high, pollutants are 
diluted; however, sedimentation and turbidity is high as well. During 
the summer months when stream flow is low, pollutants are concentrated 
and oxygen levels are low, thereby decreasing water quality. 
Agricultural runoff adds pesticides, fertilizer residue, and sometimes 
sediment. Discharges from urban areas can include contaminated 
stormwater runoff and treated city wastewater. The Napa River has been 
placed on the Clean Water Act 303(d) list and TMDL Priority Schedule 
due to unacceptable levels of bacteria, sedimentation, and nutrients. 
It is against this backdrop that the city of St. Helena faces its 
biggest challenges.
St. Helena Comprehensive Flood Control Project
    The project site is in the City of St. Helena in Napa County, 
California (County), along the Napa River and adjacent areas. Within 
and adjacent to this reach of the River, the city proposes various 
flood control components, ranging from widening the floodplain and 
constructing new floodwalls and levee, to relocating homes. An 
additional component includes flood protection at the Wastewater 
Treatment Plant (WWTP) south of the city.
    With this project, the city of St. Helena seeks to develop and 
implement a plan that will reduce damage resulting from Napa River 
flooding in a manner that is economically feasible, acceptable from a 
public policy standpoint, and environmentally sensitive. In particular, 
the city wishes to reduce flooding in a manner that will result in 
overall improvement to the health of the ecosystem in the project 
reach.
    The project will re-connect the Napa River to its historic 
floodplain, thereby reducing water surface elevations through the area 
by several feet, avoiding large flood control structures and 
canalization, and would provide 100-year flood protection to the area. 
It will also restore habitat of the natural floodplain terraces, 
including riparian and aquatic habitat. Within and adjacent to this 
reach of the river, the city proposes various flood control components, 
ranging from widening the floodplain and constructing new floodwalls 
and levee, to relocating homes. The St. Helena Comprehensive Project 
will also restore native plant and tree communities through re-
vegetation efforts.
    The city of St. Helena respectfully requests the committee's 
support for $450,000 under the Corps of Engineers General 
Investigations Account.
Upper York Creek Dam Removal And Restoration Project
    The Upper York Creek Watershed originates at the western side of 
the Napa Valley watershed and the creek flows through a narrow canyon 
before joining the Napa River at a 225 foot elevation.
    This project will improve fish passage and ecological stream 
function for the York Creek, a key Napa River Tributary. The project 
will open an additional 2 miles of steelhead habitat upstream from the 
current dam location by removing an earthen dam and accumulated 
sediment necessary to restore fish passage to provide unimpeded 
upstream adult and downstream juvenile fish passage.
    Revegetation, as part of the project, will restore a self-
sustaining native plant community that will help exclude non-native 
invasive species.
    The city of St. Helena respectfully requests the committee's 
support for $1.371 million under the Corps of Engineers section 206 
Aquatic Ecosystem Restoration Program to design and initiate 
construction under a design build contract in fiscal year 2008.
St. Helena Napa River Restoration Project
    The Napa River and its riparian corridor are considered Critical 
Habitat for steelhead and salmon recovery. The steelhead is one of six 
federally-listed threatened and endangered species within the Napa 
River and its adjoining tributaries which requires attention. Current 
conditions are such that natural habitats and geomorphic processes of 
the Napa River are highly confined with sediment transport and 
geomorphic work occurring in a limited area of the streambed and 
channel banks. Napa River's habitat for the steelhead is limited in its 
ability to provide prime spawning habitat. Limitations include 
urbanization removing significant amounts of shading and cover 
vegetation within and adjacent to the river; and a detrimental lack of 
pool habitat.
    In an effort to address these Federal environmental issues, the St. 
Helena Napa River Restoration Project, a section 06 Aquatic Ecosystem 
Restoration Project, was identified in the Napa Valley Watershed 
Management Feasibility Study of April 2001 as a specific opportunity 
for restoration.
    This project will develop riparian planting regimes to maximize 
habitat values for species, in particular, steelhead, California 
freshwater shrimp and young salmon.
    This project will address the lack of shading and cover vegetation 
along the river which has impaired the river's ability to serve as a 
critical habitat for many different species of fish and wildlife. It is 
necessary to ensure and improve the viability of Federal and State 
listed species by providing rearing, resident and migratory habitat in 
the project's three-mile stream corridor. The project will also work to 
improve area habitat to benefit the migration of steelhead to high 
value fisheries habitat in upper watershed channel reaches.
    The city of St. Helena respectfully requests $300,000 in fiscal 
year 2008 funding from the Corps of Engineers section 206 Aquatic 
Ecosystem Restoration Program to complete the feasibility study. This 
study will recommend actions not only for maximizing habitat for 
species by removing obstacles and hard bank stabilization, but to 
implement improvements to in-stream habitat such as woody debris, 
boulders and establishment of pools.
                                 ______
                                 
 Prepared Statement of the Metropolitan Water Reclamation District of 
                            Greater Chicago

    On behalf of the Metropolitan Water Reclamation District of Greater 
Chicago (District), I want to thank the subcommittee for this 
opportunity to present our priority for fiscal year 2008 and, at the 
same time, express our appreciation for your support of the District's 
projects in the years past. The District is the local sponsor for the 
Corps of Engineers priority projects of the Chicagoland Underflow Plan: 
the O'Hare, McCook and Thornton Reservoirs. We are requesting the 
subcommittee's full support for McCook and Thornton Reservoirs, as the 
O'Hare Reservoir has been completed. Specifically, we request the 
subcommittee to support the President's fiscal year 2008 budget request 
of $33,500,000 from the Army Corps of Engineers Construction, General 
account in the fiscal year 2008 Energy and Water appropriations bill. 
The following text outlines these projects and the need for the 
requested funding.
The Chicagoland Underflow Plan
    The Chicagoland Underflow Plan (CUP) consists of three reservoirs: 
the O'Hare, McCook and Thornton Reservoirs. These reservoirs are a part 
of the Tunnel and Reservoir Plan (TARP). The O' Hare Reservoir Project 
was fully authorized for construction in the Water Resources 
Development Act of 1986 (Public Law 99-662) and completed by the Corps 
in fiscal year 1999. This reservoir is connected to the existing O'Hare 
segment of the TARP. Adopted in 1972, TARP was the result of a multi-
agency effort, which included officials of the State of Illinois, 
County of Cook, city of Chicago, and the District.
    TARP was designed to address the overwhelming water pollution and 
flooding problems of the Chicagoland combined sewer areas. These 
problems stem from the fact that the capacity of the area's waterways 
has been overburdened over the years and has become woefully inadequate 
in both hydraulic and assimilative capacities. These waterways are no 
longer able to carry away the combined sewer overflow (CSO) discharges 
nor are they able to assimilate the pollution associated with these 
discharges. Severe basement flooding and polluted waterways (including 
Lake Michigan, which is the source of drinking water for millions of 
people) is the inevitable result. We point with pride to the fact that 
TARP was found to be the most cost-effective and socially and 
environmentally acceptable way for reducing these flooding and water 
pollution problems. Experience to date has reinforced such findings 
with respect to economics and efficiency.
    The TARP plan calls for the construction of the new ``underground 
rivers'' beneath the area's waterways, connected to large CSO storage 
reservoirs. The ``underground rivers'' are tunnels up to 35 feet in 
diameter and 350 feet below the surface. All 109.4 miles of the tunnels 
have just recently been completed. The tunnels capture the majority of 
the pollution load by capturing all of the small storms and the first 
flush of the large storms.
    The completed O'Hare CUP Reservoir provides 350 million gallons of 
storage. This Reservoir has a service area of 11.2 square miles and 
provides flood relief to 21,535 homes in Arlington Heights, Des Plaines 
and Mount Prospect. The Thornton and McCook Reservoirs are currently 
under construction, but until and unless they are completed, 
significant areas will remain unprotected. Without these reservoirs as 
outlets, the local drainage has nowhere to go when large storms hit the 
area.
    Since its inception, TARP has not only abated flooding and 
pollution in the Chicagoland area, but has helped to preserve the 
integrity of Lake Michigan. In the years prior to TARP, a major storm 
in the area would cause local sewers and interceptors to surcharge 
resulting in CSO spills into the Chicagoland waterways and during major 
storms into Lake Michigan, the source of drinking water for the region. 
Since these waterways have a limited capacity, major storms have caused 
them to reach dangerously high levels resulting in massive sewer 
backups into basements and causing multi-million dollar damage to 
property.
    Since implementation of TARP, 823 billion gallons of CSOs have been 
captured by TARP, that otherwise would have reached waterways. Area 
waterways are once again abundant with many species of aquatic life and 
the riverfront has been reclaimed as a natural resource for recreation 
and development. Closure of Lake Michigan beaches due to pollution has 
become a rarity. After the completion of both phases of TARP, 99 
percent of the CSO pollution will be eliminated. The elimination of 
CSOs will reduce the quantity of discretionary dilution water needed to 
keep the area waterways fresh. This water can be used instead for 
increasing the drinking water allocation for communities in Cook, Lake, 
Will and DuPage counties that are now on a waiting list to receive such 
water. Already, these counties have received millions of gallons of 
additional Lake Michigan water per day, partially as a result of the 
reduction in the District's discretionary diversion since 1980. 
Additional allotments of Lake Michigan water will be made to these 
communities, as more water becomes available from reduced discretionary 
diversion.
    With new allocations of lake water, many communities that 
previously did not get lake water are in the process of building, or 
have already built, water mains to accommodate their new source of 
drinking water. The new source of drinking water will be a substitute 
for the poorer quality well water previously used by these communities. 
Partly due to TARP, it is estimated by IDOT that between 1981 and 2020, 
283 million gallons per day of Lake Michigan water would be added to 
domestic consumption. This translates into approximately 2 million 
additional people that would be able to enjoy Lake Michigan water. This 
new source of water supply will not only benefit its immediate 
receivers but will also result in an economic stimulus to the entire 
Chicagoland area by providing a reliable source of good quality water 
supply.
The McCook and Thornton Reservoirs
    The McCook and Thornton Reservoirs of the Chicagoland Underflow 
Plan (CUP) were fully authorized for construction in the Water 
Resources Development Act of 1988 (Public Law 100-676). These CUP 
reservoirs, as previously discussed, are a part of TARP, a flood 
protection plan that is designed to reduce basement flooding due to 
combined sewer back-ups and inadequate hydraulic capacity of the urban 
waterways.
    These reservoirs will provide annual benefits of $115 million. The 
total expected annual benefits of these projects are approximately 
twice as much as their total annual costs. The District, as the local 
sponsor, has acquired the land necessary for these projects, and will 
meet its cost sharing obligations under Public Law 99-662.
    These projects are a very sound investment with a high rate of 
return. The remaining benefit/cost ratio for these 2 reservoirs 
together is 3.0. They will enhance the quality of life, safety and the 
peace of mind of the residents of this region. The State of Illinois 
has endorsed these projects and has urged their implementation. In 
professional circles, these projects are hailed for their 
farsightedness, innovation, and benefits.
    Based on two successive Presidentially-declared flood disasters in 
our area in 1986 and again in 1987, and severe flooding in the last 
several years, we believe the probability of this type of flood 
emergency occurring before implementation of the critical flood 
prevention measure is quite high. As the public agency for the greater 
Chicagoland area responsible for water pollution control, and as our 
past sponsorship for flood control projects, we have an obligation to 
protect the health and safety of our citizens. We are asking your 
support in helping us achieve this necessary and important goal of 
construction completion.
    We have been very pleased that over the years the subcommittee has 
seen fit to include critical levels of funds for these important 
projects. It is important that we receive a total of $33,500,000 in 
construction funds in fiscal year 2008 to maintain the commitment and 
finish these projects. This funding is critical in order to construct 
the McCook Reservoir Stage 1 Grout Curtain, Stage 2 Slurry Wall, and 
Stage 1 Rock Wall Stabilization Contracts and to continue the 
engineering design of other McCook and Thornton Reservoir projects. The 
community has waited long enough for protection and we need these funds 
now to move the project in construction. We respectfully request your 
consideration of our request.
Summary
    To emphasize the areas plight, I would like to relate a flooding 
event that occurred when just under 4 inches of rain fell on the 
greater Chicagoland area. Due to the frozen ground, almost all of the 
rainfall entered our combined sewers, causing sewerage back-ups 
throughout the area. When the existing TARP tunnels filled with 
approximately 1.2 billion gallons of sewage and runoff, the only 
remaining outlets for the sewers were our waterways. Between 9:00 p.m. 
and 3:00 a.m., the Chicago and Calumet Rivers rose 6 feet. For the 
first time since 1981 we had to open the locks at all three of the 
waterway control points; these include Wilmette, downtown Chicago, and 
Calumet. Approximately 4.2 billion gallons of combined sewage and 
stormwater had to be released directly into Lake Michigan.
    Given our large regional jurisdiction and the severity and 
regularity of flooding in our area, the Corps was compelled to develop 
a plan that would complete the uniqueness of TARP and be large enough 
to accommodate the area we serve. With a combined sewer area of 375 
square miles, consisting of the city of Chicago and 51 contiguous 
suburbs, there are 1,443,000 structures within our jurisdiction, which 
are subject to flooding at any given time. The annual damages sustained 
exceed $150 million. With the TARP CUP Reservoirs in place, these 
damages could be eliminated. We must consider the safety and peace of 
mind of the 2 million people who are affected as well as the disaster 
relief funds that will be saved when these projects are in place. As 
the public agency in the greater Chicagoland area responsible for water 
pollution control, and as the regional sponsor for flood control, we 
have an obligation to protect the health and safety of our citizens. We 
are asking your support in helping us achieve this necessary and 
important goal. It is absolutely critical that the Corps' work, which 
has been proceeding for a number of years, now proceeds on schedule 
through construction.
    Therefore, we urgently request that a total of $33,500,000 in 
construction funds be made available in the fiscal year 2008 Energy and 
Water Development Appropriations Act to continue construction of the 
McCook and Thornton Reservoir Projects.
    Again, we thank the subcommittee for its support of this important 
project over the years, and we thank you in advance for your 
consideration of our request this year.
                                 ______
                                 
  Prepared Statement of the Western Coalition of Arid States (WESTCAS)
    My name is Larry Libeu, and I am President of the Western Coalition 
of Arid States. The Western Coalition of Arid States (WESTCAS) is 
submitting this testimony regarding the Presidents fiscal year 2008 
budget request for the United States Army Corp of Engineers.
    WESTCAS is a coalition of approximately 125 water and wastewater 
districts, cities and towns and professional organizations focused on 
water quality and water quantity issues in the States of Arizona, 
California, Colorado, Idaho, Nevada, New Mexico, Oregon and Texas. Our 
mission is to work with Federal, State and regional water quality and 
quantity agencies to promote scientifically-sound law, regulations, 
appropriations and policies that protect public health in the 
environment of the arid West.
    Providing adequate budget for the Army Corps of Engineers is 
crucial for the immediate and long term delivery of adequate water 
supplies, hydropower, flood control, and flood and coastal restoration 
within the arid west. As such WESTCAS supports the performance criteria 
established which will ensure projects are funded and completed within 
a timely fashion. We also believe the issue of reprogramming of funds 
out of projects needs to be addressed in a more thorough manner and 
have welcomed your interest in this area of the Corps program.
    We are greatly concerned that the Corps Construction budget is down 
38 percent, the General Investigations are down 45 percent and the O&M 
budget is ever increasing. The Corps infrastructure is one of the 
foundations of our Nation's economy--and the infrastructure is aging. 
When we look at the number of projects funded by Congress last year, it 
appears the Corps is only submitting a budget that funds one-quarter of 
that work. This is not a solution for success but a path way to 
cataclysmic failure which could have devastating consequences to the 
economy.
    The Army Corps of Engineers provides funding and oversight for many 
projects within the WESTCAS States including but not limited to the 
following:

------------------------------------------------------------------------

------------------------------------------------------------------------
Alamogordo, New Mexico.....................................   $4,200,000
National Dam Safety Program................................   10,000,000
Oakland Harbor, California.................................   42,000,000
Sacramento River Bank Protection, CA.......................   21,528,000
Success Dam, Tule River, California........................   18,000,000
Sims Bayou, Houston, Texas.................................   24,154,000
------------------------------------------------------------------------

    As such, the Corps is a critical partner for WESTCAS organizations 
to provide quality water services both today and tomorrow. We look with 
interest in seeing the 5-year budget development plan that will be 
provided to Congress in the near future. This will provide a level of 
greater transparency and ability for the stakeholders of the Corps to 
better understand future budgetary trends.
    To that end, we believe it is important for the committee to 
provide greater direction for the Corps to undertake an integrated 
water management and watershed approach that will assist in focusing on 
the needs of today and with projecting future needs. What we have 
witnessed over the years of looking at agencies budgets is the lack of 
intergovernmental cooperation and cooperative planning. The planning 
should be taking place with the States and the interested parties at 
the watershed level. We believe there is widespread support for such 
approaches throughout the West.
    We note a slight increase in the Corps Regulatory program, a 
program to protect wetlands and other waters of the United States. 
Permits, and the ability to get timely consideration of such is an 
important element for our agencies. We are interested in seeing greater 
detail with regard to the Corps request in this area since they 
indicate the funding is needed because of the Supreme Court's Carabell 
and Rapanos decisions. These cases hold the potential for greater 
resource allocations on our members' part and believe this request 
needs careful attention.
    Though not in your jurisdiction, we look with interest on the 
current Water Resources Development Act authorization effort because of 
the consequences to future budgets of the agency. Reform is a good idea 
if it is not used as a tool for delay. With the Corps having over a $50 
billion backlog of projects it is important to recognize the need to 
fund this budget at a level that meets the needs in a timely manner and 
keeps the economy strong and protects the public.
    Thank you for considering our request.
                                 ______
                                 

                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

   Prepared Statement of the New Mexico Interstate Stream Commission

  COLORADO RIVER BASIN SALINITY CONTROL PROGRAM, TITLE II, BUREAU OF 
                              RECLAMATION
                                SUMMARY

    This statement is submitted in support of fiscal year 2008 
appropriations for the Colorado River Basin salinity control program of 
the Department of the Interior's Bureau of Reclamation. Congress 
designated the Bureau of Reclamation to be the lead agency for salinity 
control in the Colorado River Basin by the Colorado River Basin 
Salinity Control Act of 1974, and reconfirmed the Bureau of 
Reclamation's role by passage of Public Law 104-20. A total of $17.5 
million is requested for fiscal year 2008 to implement the authorized 
Colorado River salinity control program of the Bureau of Reclamation. 
The President's appropriation request of $7.85 million, falling again 
below previous appropriations for the program, is inadequate because 
studies have shown that the implementation of the salinity control 
program has fallen behind the pace needed to control damages from 
salinity. An appropriation of $17.5 million for Reclamation's salinity 
control program is necessary to protect water quality standards for 
salinity and to prevent unnecessary levels of economic damage from 
increased salinity levels in water delivered to the Lower Basin States 
of the Colorado River. In addition, funding for operation and 
maintenance of existing projects and sufficient general investigation 
funding is required to identify new salinity control opportunities.

                               STATEMENT

    The water quality standards for salinity of the Colorado River must 
be protected while the Basin States continue to develop their compact 
apportioned waters of the river. The salinity standards for the 
Colorado River have been adopted by the seven Basin States and approved 
by EPA. While currently the standards have not been exceeded, salinity 
control projects must be brought on-line in a timely and cost-effective 
manner to prevent future effects that could cause the numeric criteria 
to be exceeded, and would result in unnecessary damages from higher 
levels of salinity in the water delivered to Lower Basin States of the 
Colorado River.
    The Colorado River Basin Salinity Control Act was authorized by 
Congress and signed into law in 1974. The seven Colorado River Basin 
States, in response to the Clean Water Act of 1972, formed the Colorado 
River Basin Salinity Control Forum, a body comprised of gubernatorial 
representatives from the seven States. The Forum was created to provide 
for interstate cooperation in response to the Clean Water Act and to 
provide the States with information necessary to comply with Sections 
303(a) and (b) of the Act. The Forum has become the primary means for 
the Basin States to coordinate with Federal agencies and Congress to 
support the implementation of the salinity control program for the 
Colorado River Basin.
    Bureau of Reclamation studies show that quantified damages from the 
Colorado River to United States water users are about $330,000,000 per 
year. Unquantified damages are significantly greater. Damages are 
estimated at $75,000,000 per year for every additional increase of 30 
milligrams per liter in salinity of the Colorado River. Control of 
salinity is necessary for the States of the Colorado River Basin, 
including New Mexico, to continue to develop their compact-apportioned 
waters of the Colorado River.
    Timely appropriations for the funding of the salinity control 
program are essential to comply with the water quality standards for 
salinity, prevent unnecessary economic damages in the United States, 
and protect the quality of the water that the United States is 
obligated to deliver to Mexico. The Basin States and Federal agencies 
agree that increases in the salinity of the Colorado River will result 
in significant increases in damages to water users in the Lower 
Colorado River Basin. An appropriation of only the amount specified in 
the President's budget request is inadequate to protect the quality of 
water in the Colorado River and prevent unnecessary salinity damages in 
the States of the Lower Colorado River Basin. Although the United 
States has always met the water quality standard for salinity of water 
delivered to Mexico under Minute No. 242 of the International Boundary 
and Water Commission, the United States through the U.S. Section of 
IBWC is currently addressing a request by Mexico for better quality 
water. Thus, continued strong support and adequate funding of the 
salinity control program is required to control salinity-related 
damages in the United States and Mexico.
    Congress amended the Colorado River Basin Salinity Control Act in 
July 1995 (Public Law 104-20). The salinity control program authorized 
by Congress by the amendment has proven to be very cost-effective, and 
the Basin States are standing ready with up-front cost sharing. 
Proposals from public and private sector entities in response to the 
Bureau of Reclamation's advertisement have far exceeded available 
funding. Basin States cost sharing funds are available for the $17.5 
million appropriation request for fiscal year 2008. The Basin States 
cost sharing adds $0.43 for each Federal $1 appropriated.
    Public Law 106-459 gave the Bureau of Reclamation additional 
spending authority for the salinity control program. With the 
additional authority in place and significant cost sharing available 
from the Basin States, it is essential that the salinity control 
program be funded at the level requested by the Forum and Basin States 
to protect the water quality of the Colorado River. Some of the most 
cost-effective salinity control opportunities occur when Reclamation 
improves irrigation delivery systems concurrently with on-farm 
irrigation improvements undertaken by the U.S. Department of 
Agriculture's Environmental Quality Incentives Program (EQIP). The 
Basin States cost-share funding is available for both parts, on-farm 
and off-farm, and EQIP funding appears to be adequate to accomplish 
needed on-farm work. Adequate funding for Reclamation off-farm work is 
needed to maintain timely implementation and effectiveness of salinity 
control measures.
    Maintenance and operation of the Bureau of Reclamation's salinity 
control projects and general investigations to identify new cost-
effective salinity control projects are necessary for the continued 
success of the salinity control program. Investigation of new 
opportunities for salinity control are critical while the Basin States 
continue to develop and use their compact-apportioned waters of the 
Colorado River. The water quality standards for salinity and the United 
States water quality requirements pursuant to treaty obligations with 
Mexico are dependent on timely implementation of salinity control 
projects, adequate funding to maintain and operate existing projects, 
and sufficient general investigation funding to determine new cost-
effective opportunities for salinity control.
    Continued funding primarily through Reclamation's Facility 
Operation activity to support maintenance and operation the Paradox 
Valley Unit and the Grand Valley Unit is critically needed. General 
Investigation funding through Reclamation's Colorado River Water 
Quality Improvement Program has been lacking in the recent past, and 
needs to be restored to a level that supports the need for 
identification and study of new salinity control opportunities to 
maintain the levels of salinity control to meet water quality standards 
and control economic damages in the Lower Colorado River Basin.
    I urge the Congress to appropriate $17.5 million to the Bureau of 
Reclamation for the Colorado River Basin salinity control program, 
adequate funding for operation and maintenance of existing projects and 
adequate funding for general investigations to identify new salinity 
control opportunities. Also, I fully support testimony by the Forum's 
Executive Director, Jack Barnett, in request of this appropriation, and 
the recommendation of an appropriation of the same amount by the 
federally chartered Colorado River Basin Salinity Control Advisory 
Council.
                                 ______
                                 
           Prepared Statement of the Jicarilla Apache Nation

                              INTRODUCTION

    On behalf of the Jicarilla Apache Nation in New Mexico, I am 
pleased to submit this statement regarding the fiscal year 2008 
proposed budget for the Bureau of Reclamation, Department of the 
Interior. The Jicarilla Apache Nation (``nation'') is a federally 
recognized Indian Tribe, and our Reservation is located in Northern New 
Mexico. We have over 3,500 members and 85 percent of the population 
lives on our Reservation in the town of Dulce, which serves as our 
tribal headquarters. For the last 8 years we have been working with the 
Federal Government to deal with a severe problem that has been plaguing 
us--the failing public drinking water and wastewater systems on our 
Reservation.
    As more described below, the Nation has worked tirelessly to take 
corrective action to address this public health crisis by committing 
significant funds and resources, and by successfully working with 
Congress to authorize a project to replace this dilapidated 
infrastructure. The nation has done everything possible to implement 
the statutory directive placed on the Secretary of the Interior to 
comply with the law and construct our project. Unfortunately, since 
Congress authorized the project which President Bush signed into law in 
December 2002, the Bush administration has repeatedly failed to include 
funding in its annual budget to Congress to develop and construct our 
project. Notably, ours is the only project Congress has authorized 
which is fully encompassed in an Indian reservation and which has 100 
percent Indian project beneficiaries. We also understand our project is 
the only one that acknowledges and mandates corrective action for the 
Federal Government's liability in establishing and creating a deficient 
and unsafe public drinking water system serving an Indian reservation 
population.
    The nation respectfully calls upon this committee to provide 
funding in fiscal year 2008 for our project and see that the 
administration is accountable for constructing it, as set forth in our 
project's authorizing statute.

                               BACKGROUND

    The problem with the condition of the current public water system 
and waste water infrastructure on the Jicarilla Apache Reservation 
stems from generations of neglect by the Bureau of Indian Affairs 
(BIA), which, as creator, owner and operator of the system, did not 
properly design, plan for, manage, repair and upgrade portions of the 
system over the last 90 years. The system diverts water from the Navajo 
River--a pristine water source, and its initial structures served the 
original BIA facilities on the Reservation. As the community of Dulce 
became the center of activity, members began moving there from other 
areas of the Reservation. In response to the growth, the BIA expanded 
the water line to allow members to access the water from common areas. 
As the area grew with housing and other facilities, water lines were 
extended, on an ad hoc basis, with no planning or recording. By the 
1990's the community's system had every type of water piping, including 
clay, asbestos lined, other metals, as even some wood piping has been 
unearthed.
    In October 1998, the system collapsed at the river and left the 
nation without water for 6 days. The home of one of our elders burned 
down, with no water to put out the fire. The National Guard brought in 
bottled water and portable restrooms. The nation funded emergency 
efforts to restore water delivery, and received no funding from the 
BIA.
    The BIA's neglect and failure to manage and maintain its public 
water system serving our people has caused many dire health threats and 
circumstances including degraded water quality in the lines, obsolete 
and non-compliant sewage lagoon ponds which were operating without 
properly permits because the ponds did not meet the Federal standards, 
pollution from unlined sewage ponds spilling into the community and 
into nearby arroyo which fed back into the Navajo River towards 
downstream users. The most disturbing circumstance, however, is that a 
large number of tribal members are experiencing serious intestinal and 
other internal diseases, more community members have been diagnosed and 
are dying from stomach and other forms of cancer. We suspect this can 
be attributed to unsafe drinking water.

                    STATUTORY PROJECT AUTHORIZATION

    A combination of the water outage and the dire health related 
circumstances led the nation's leaders to go to Washington, DC to 
request assistance to repair the Federal Government's broken system. 
Our first step was to approach the BIA in Washington. They told us they 
had no funds to address the problem. The nation sought help from other 
Federal agencies, who were sympathetic but generally unable to assist 
because the BIA owned and operated the system. They also informed us 
that the enormity of the problems with the system required a 
significant investment of resources that they would not be able to 
accommodate.
    We then turned to our delegation from New Mexico for help. Working 
with them, the nation pursued the legislative route to authorize a 
project specifically to repair the system. The idea was not to turn to 
the BIA, which was not equipped to deal with a major water system 
infrastructure improvement project, either as a technical or funding 
matter. Based on our location in the Southwest and the work of the 
Bureau of Reclamation (BOR) working on significant projects in the 
region, we decided to work toward authorizing a project through the 
BOR. In 2000, Congress passed a bill which directed the Department of 
the Interior, through the BOR, to do a feasibility study on upgrading 
the system. See Public Law 106-243. The nation worked directly with the 
agency on the study which was completed in September of 2002.
    The study determined that $45 million would be needed to replace 
the existing water delivery and wastewater infrastructure. The report 
acknowledged the nation's efforts in taking on $15 million of debt to 
improve portions of the system including: replacement of the diversion 
structures and pipeline at the river and up to the water treatment 
plant; building a new water treatment plant and expanding its capacity; 
repairing and replacing old water towers; replacement of infrastructure 
on the expansion Mundo Ranch property.
    Based on this completed report, in 2001, our delegation introduced 
legislation to direct the Secretary of the Interior to repair and 
replace the infrastructure based on the recommendations in the 
feasibility report; the legislation also authorized the Department to 
expend funding to undertake this project. During this timeframe, with 
Senator Domenici's leadership, Congress appropriated $2.5 million in 
the fiscal year 2002 Energy and Water Development bill for the 
project's planning, design and other work needed to prepare for 
initiation of the project's construction.
    On December 13, 2002, President Bush signed into law Public Law 
107-331, which includes as Title VIII our legislation, the Jicarilla 
Apache Reservation Rural Water System Act, which directs the Secretary 
of the Interior to proceed with a project to replace the defunct 
infrastructure, as outlined and recommended in the feasibility report, 
and which authorizes the appropriations of funds ($45 million) for our 
project.

      INADEQUATE FEDERAL FUNDING AND FAILURE TO IMPLEMENT THE LAW

    Since the law's enactment, the nation has made repeated efforts to 
secure funding for the development of our project through the Bureau of 
Reclamation's account in the Energy and Water Development 
Appropriations bill and through the Executive budget process. In spite 
of our efforts, we were unable to secure funding in the fiscal year 
2003 through fiscal year 2005 appropriations cycles. Finally, in fiscal 
year 2006, Congress provided $250,000 for our project in the Energy and 
Water Development Appropriations bill. Last year, the House bill 
provided $500,000 for our project, but since Congress did not complete 
this and other appropriations bills, it remains unclear whether we will 
receive any funding this year.
    Our efforts have been further stymied by the Bush administration's 
failure to include any funds for our project in its annual budget 
submission to Congress. We have visited with the Office of Management 
and Budget, the Assistant Secretary for Water and Science and the BOR 
Commissioner urging them to implement the law and take action to help 
us address this serious pubic health crisis. Unfortunately, we have 
been told that the Bush administration is not willing to provide 
funding in its budget for ``new starts'' for water construction 
projects, and we were further informed by OMB that under their 
philosophy, local governments should bear the burden for public water 
system. Contrary to these ``views'', the law requires the Secretary to 
act, and the system at issue was federally owned and operated and its 
defunct condition was caused exclusively by Federal neglect so the 
nation should not be left with the burden of the Federal Government's 
liability. On top of these considerations, the United States has a 
trust responsibility to the nation, our citizens and our trust 
resources. These are all compelling reasons to include funding for this 
project in the budget process, and the administration must act to meet 
its obligations.
    With respect to section 104 of Public Law 109-451, we believe the 
committee should provide the Department with additional direction to 
make sure our project is funded on an expeditious and emergency basis. 
We have waited far too long and our people have suffered enormously 
while the administration refuses to address this on-going and shameful 
situation on our Reservation, which was created by the Federal 
Government itself.
    In fact, this new law explicitly recognizes that such factors as 
the ``urgent and compelling need'' for a rural water supply projects 
that are necessary to ``improve the health'' and/or ``meet applicable 
requirements established by law'' are factors for assessing the 
priority of such projects. Both of these factors apply to this project.
    On a regional level, the nation has been a good neighbor and 
steward of our resources. We have helped water users in both the Rio 
Grande and San Juan basins to resolve delicate water issues. We have a 
proven record of managing our lands and water. All we are asking is for 
support to ensure that, pursuant to statutory directives, the 
Department meets its obligations and provides the people on the 
Jicarilla Apache Reservation a safe and reliable source of drinking 
water for the betterment of our citizens.

                               CONCLUSION

    Since the legislation's enactment in December 2002, the nation has 
been forced to borrow millions of additional dollars on the project 
because of the urgency and crisis facing our people. The nation used 
tax exempt bonds to pay for the repairs and has reached its debt 
capacity. It is time for the Federal Government to step up to the plate 
and meet its statutory and moral obligations owed to the nation. We are 
asking for your help today! Please hold the Department of the Interior 
accountable for constructing our project, as directed in the 2002 
statute, and for requesting the necessary funding from Congress to do 
so. We also respectfully ask that the committee grant the nation's 
fiscal year 2008 $3 million funding request for our project.
    Thank you for your time and consideration of our views, concerns 
and requests.
                                 ______
                                 
      Prepared Statement of the Colorado River Board of California

    This testimony is in support of fiscal year 2008 funding for the 
Department of the Interior for the Title II Colorado River Basin 
Salinity Control Program (Public Law 93-320). By statute, Congress 
designated the Department of the Interior, Bureau of Reclamation 
(Reclamation) to be the lead agency for salinity control in the 
Colorado River Basin. This successful and cost effective program is 
carried out pursuant to the Colorado River Basin Salinity Control Act 
and the Clean Water Act (Public Law 92-500). California's Colorado 
River water users are presently suffering economic damages in the 
hundreds of million of dollars per year due to the River's salinity.
    The Colorado River Board of California (Colorado River Board) is 
the State agency charged with protecting California's interests and 
rights in the water and power resources of the Colorado River system. 
In this capacity, California and the other six Basin States through the 
Colorado River Basin Salinity Control Forum (Forum), the interstate 
organization responsible for coordinating the Basin States' salinity 
control efforts, established numeric criteria in June 1975 for salinity 
concentrations in the River. These criteria were established to lessen 
the future damages in the Lower Basin States, as well as, assist the 
United States in delivering water of adequate quality to Mexico in 
accordance with Minute 242 of the International Boundary and Water 
Commission.
    To date, Reclamation has been successful in implementing projects 
for preventing salt from entering the River system; however, many more 
potential projects for salt reduction have been identified that could 
be implemented through Reclamation's Basin-wide Salinity Control 
Program. In the past, the Forum has presented testimony to Congress in 
which it has stated that the rate of implementation of the program 
beyond that which has been funded in the past is essential. This is 
still the case, and California urges the Congress to fully fund 
Reclamation's continuing implementation of this critical program.
    In 2000, Congress reviewed the salinity control program as 
authorized in 1995. Following hearings, and with the administration's 
support, the Congress passed legislation (Public Law 106-459) that 
increased the ceiling authorization for this program from $75 million 
to $175 million. Reclamation has received proposals to move the program 
ahead and the seven Basin States have agreed to up-front cost sharing 
on an annual basis, which adds 43 cents for every Federal dollar 
appropriated.
    In recent years, the President's requests have dropped to below $10 
million. In the judgment of the Forum, this amount is inappropriately 
low. Water quality commitments to downstream United States and Mexican 
water users must be honored while the Basin States continue to develop 
their Compact apportioned waters from the Colorado River. 
Concentrations of salts in the River cause about $330 million in 
quantified damage in the United States. However significant 
unquantified damages also, occur. For example, damages occur from:
  --A reduction in the yield of salt sensitive crops and increased 
        water use for leaching in the agricultural sector;
  --A reduction in the useful life of galvanized water pipe systems, 
        water heaters, faucets, garbage disposals, clothes washers, and 
        dishwashers, and increased use of bottled water and water 
        softeners in the household sector;
  --An increase in the use of water for cooling, and the cost of water 
        softening, and a decrease in equipment service life in the 
        commercial sector;
  --An increase in the use of water and the cost of water treatment, 
        and an increase in sewer fees in the industrial sector;
  --A decrease in the life of treatment facilities and pipelines in the 
        utility sector;
  --Difficulty in meeting wastewater discharge requirements to comply 
        with National Pollutant Discharge Elimination System permit 
        terms and conditions, an increase in desalination and brine 
        disposal costs due to accumulation of salts in groundwater 
        basins, and fewer opportunities for recycling and reuse of the 
        water due to groundwater quality deterioration; and
  --Increased use of imported water for leaching and the cost of 
        desalination and brine disposal for recycled water.
    For every 30 milligram per liter increase in salinity 
concentrations, there are $75 million in additional damages in the 
United States. The Forum, therefore, believes implementation of the 
program needs to be accelerated to a level beyond that requested by the 
administration.
    Some of the most cost-effective salinity control opportunities 
occur when Reclamation can improve irrigation delivery systems in a 
coordinated fashion with the activities of the U.S. Department of 
Agriculture's (USDA) program through working with landowners 
(irrigators) to improve on-farm irrigation systems. With the USDA's 
Environmental Quality Incentive Program, more on-farm funds are 
available and adequate funds for Reclamation are needed to maximize 
Reclamation's effectiveness in addressing water delivery system 
improvements. The Forum, at its meeting in October 2006, in Scottsdale, 
Arizona recommended a funding level of $17,500,000 for Reclamation's 
Basin-wide Salinity Control Program to continue implementation of 
needed projects and begin to reduce the ``backlog'' of projects.
    In addition, the Colorado River Board recognizes that the Federal 
Government has made significant commitments to the Republic of Mexico 
and to the seven Colorado River Basin States with regard to the 
delivery of quality water to Mexico. In order for those commitments to 
be honored, it is essential that in fiscal year 2008, and in future 
fiscal years, that Congress provide funds to the Bureau of Reclamation 
for the continued operation of completed projects.
    The Colorado River is, and will continue to be, a major and vital 
water resource to the 18 million residents of southern California, 
including municipal, industrial, and agricultural water users in 
Ventura, Los Angeles, San Bernardino, Orange, Riverside, San Diego, and 
Imperial counties. Preservation and improvement of Colorado River water 
quality through an effective salinity control program will avoid the 
additional economic damages to users in California and the other States 
that rely on the Colorado River.
                                 ______
                                 
 Prepared Statement of the Colorado River Basin Salinity Control Forum

    This testimony is in support of funding for the Title II Colorado 
River Basin Salinity Control Program. The Congress has designated the 
Department of the Interior, Bureau of Reclamation (Reclamation), to be 
the lead agency for salinity control in the Colorado River Basin. This 
role and the authorized program were refined and confirmed by the 
Congress when Public Law 104-20 was enacted. A total of $17,500,000 is 
requested for fiscal year 2008 to implement the needed and authorized 
program. Failure to appropriate these funds will result in significant 
economic damage in the United States and Mexico.
    In recent years, the President's requests have dropped to below $10 
million. In the judgment of the Colorado River Basin Salinity Control 
Forum (Forum), this amount is inappropriately low. Water quality 
commitments to downstream United States and Mexican water users must be 
honored while the Basin States continue to develop their Colorado River 
Compact-apportioned waters. Concentrations of salts in the river cause 
about $330 million in quantified damage in the United States with 
significantly greater unquantified damages. Damages occur from:
  --a reduction in the yield of salt sensitive crops and increased 
        water use for leaching in the agricultural sector,
  --a reduction in the useful life of galvanized water pipe systems, 
        water heaters, faucets, garbage disposals, clothes washers, and 
        dishwashers, and increased use of bottled water and water 
        softeners in the household sector,
  --an increase in the use of water for cooling, and the cost of water 
        softening, and a decrease in equipment service life in the 
        commercial sector,
  --an increase in the use of water and the cost of water treatment, 
        and an increase in sewer fees in the industrial sector,
  --a decrease in the life of treatment facilities and pipelines in the 
        utility sector,
  --difficulty in meeting wastewater discharge requirements to comply 
        with National Pollutant Discharge Elimination System permit 
        terms and conditions, and an increase in desalination and brine 
        disposal costs due to accumulation of salts in groundwater 
        basins,
  --increased use of imported water for leaching and the cost of 
        desalination and brine disposal for recycled water.
    For every 30 mg/l increase in salinity concentrations, there is $75 
million in additional damages in the United States. The Forum, 
therefore, believes implementation of the program needs to be 
accelerated to a level beyond that requested by the President.
    The program authorized by the Congress in 1995 has proven to be 
very successful and very cost effective. Proposals from the public and 
private sector to implement salinity control strategies have far 
exceeded the available funding and Reclamation has a backlog of 
proposals. Reclamation continues to select the best and most cost-
effective proposals. Funds are available for the Colorado River Basin 
States' cost sharing for the level of Federal funding requested by the 
Forum. Water quality improvements accomplished under Title II of the 
Colorado River Basin Salinity Control Act also benefit the quality of 
water delivered to Mexico. Although the United States has always met 
the commitments of the International Boundary & Water Commission's 
(Commission) Minute No. 242 to Mexico with respect to water quality, 
the United States Section of the Commission is currently addressing 
Mexico's request for better water quality at the International 
Boundary.
    Some of the most cost-effective salinity control opportunities 
occur when Reclamation can improve irrigation delivery systems at the 
same time that the U.S. Department of Agriculture's (USDA) program is 
working with landowners (irrigators) to improve the on-farm irrigation 
systems. Through the USDA Environmental Quality Incentives Program, 
adequate on-farm funds appear to be available and adequate Reclamation 
funds are needed to maximize the effectiveness of the effort. These 
salinity control efforts have secondary water conservation benefits at 
the point of use and downstream at the point of reuse.

                                OVERVIEW

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

                             JUSTIFICATION

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

                     ADDITIONAL SUPPORT OF FUNDING

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

    Dear Chairman Dorgan: your support is needed to secure adequate 
funding for the Department of Interior for the Colorado River Basin 
Salinity Control Program (Program). To continue the essential work of 
the Program, the Water Authority urges funding of $17.5 million for 
fiscal year 2008. By statute, Congress designated the Department of 
Interior, Bureau of Reclamation (Reclamation) to be the lead agency for 
salinity control in the Colorado River Basin. The Program is carried 
out through the Colorado River Basin Salinity Control Act (1974) 
(Public Law 93-320) and the Clean Water Act.
    The salinity control projects through the Program benefit water 
users from seven States through more efficient water management and 
reduced salinity concentrations in Colorado River water. The Colorado 
River is the primary and single most important source of drinking water 
for more than 3 million people in San Diego County. Excess salinity 
causes economic damages in the San Diego region worth millions of 
dollars annually.
    Notably, concentrations of salts in the Colorado River annually 
cause about $330 million in quantified damages in the United States. 
For every 30 milligrams per liter increase in salinity concentrations 
there are $75 million in additional damages in the United States. 
Locally, impacts of excess salinity in the San Diego region include, 
but are not limited to, the following:
  --Reduced crop yields, impacting more than $1 billion of agricultural 
        products in the San Diego region.
  --Decreased useful life of commercial and residential water pipe 
        systems, water heaters, faucets, garbage disposals, clothes 
        washers, and dishwashers.
  --Increased household use of expensive bottled water and water 
        softeners.
  --Increased water treatment facility costs and a decrease in the life 
        of the treatment facilities.
  --Increased treatment to meet Federal and California wastewater 
        discharge requirements.
  --Fewer opportunities for water recycling due to excess salt in the 
        product water, which limits usefulness for commercial and 
        agricultural irrigation.
    To date, Reclamation has been successful in implementing projects 
for preventing salt from entering the River system; however, many 
potential projects for salt reduction have been identified that could 
be implemented through the Program. The rate of implementation of the 
Program beyond that which has been funded in the past is essential, and 
the Water Authority urges Congress to fully fund Reclamation's 
continuing implementation of this critical program.
    Some of the most cost-effective salinity control opportunities 
occur when Reclamation can improve irrigation delivery systems in a 
coordinated fashion with the activities of the U.S. Department of 
Agriculture's Environmental Quality Incentive Program through working 
with landowners (irrigators) to improve on-farm irrigation systems. 
Adequate funds from Reclamation are needed to maximize this coordinated 
effort and effectiveness in addressing water delivery system 
improvements.
    The Program has proven to be a very cost-effective approach to 
mitigate the impacts of increased salinity in the Colorado River, which 
is an investment that avoids millions of dollars in economic damages 
caused by excess salinity. In addition, the Program assists the 
delivery of quality water to Mexico in accordance with Minute 242 of 
the 1944 Water Treaty.
    The Colorado River Basin Salinity Control Forum (California and the 
other six Basin States) has recommended that a funding level of $17.5 
million for Reclamation's Basin-wide Salinity Control Program is 
necessary and appropriate to continue implementation of needed 
projects.
    The Water Authority supports the recommendation for funding and 
urges this subcommittee to support this level of funding for fiscal 
year 2008. The Water Authority appreciates your assistance in securing 
adequate funding for this vital water resource.
                                 ______
                                 

              Prepared Statement of the Mni Wiconi Project

Fiscal Year 2008 Request
    The Mni Wiconi Project beneficiaries respectfully request 
appropriations totaling $41.113 million for fiscal year 2008. The 
request consists of $30.909 million for construction and $10.204 
million for operation and maintenance (OMR) activities) in fiscal year 
2008:

                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                   Fiscal Year--
                                                                 -----------------------------------------------
                                                                    2007 House      2008 Budget    2008 Request
----------------------------------------------------------------------------------------------------------------
Construction....................................................          22.914  ..............          30.909
OMR.............................................................           9.256  ..............          10.204
                                                                 -----------------------------------------------
      Total.....................................................  ..............  ..............          41.113
----------------------------------------------------------------------------------------------------------------

Construction Funds
    Construction funds would be utilized as follows:

------------------------------------------------------------------------
                      Project area                           Millions
------------------------------------------------------------------------
Oglala Sioux Rural Water Supply System:
    Core................................................          $5.400
    Distribution........................................          11.085
West River/Lyman-Jones RWS..............................           6.842
Rosebud RWS.............................................           6.482
Lower Brule RWS.........................................  ..............
Reclamation Oversight...................................           1.100
                                                         ---------------
      Total.............................................          30.909
------------------------------------------------------------------------

    As shown on the table below, the Project will be 73 percent 
complete at the end of fiscal year 2007. Construction funds remaining 
to be spent after fiscal year 2007 will total $119.184 million.
    Amendment of the Project authorization is proposed for the first 
session of the 110th Congress to extend the construction completion 
date from fiscal year 2008 through fiscal year 2012. Additional 
administrative, overhead and other costs of the extension are projected 
at $14.635 million, bringing total remaining costs at the end of fiscal 
year 2007 to $133.820 million (in October 2006 dollars).
    Cost indexing over the last 5 years has averaged from 4.83 percent 
for pumping plants to 7.88 percent for pipelines, which are the notable 
Project components yet to be completed (see chart below). Assuming an 
average 5 percent inflation in construction costs during the remaining 
5 years necessary to complete the Project, average funding of $30.909 
million is required to complete the Project by fiscal year 2012. Costs 
of extending the Project and cost indexing from fiscal year 2008 
through fiscal year 2012 increase the remaining costs to $154.545 
million. Therefore, the funding request for fiscal year 2008 is based 
on the annual average of $30.909 million necessary to complete the 
Project by the end of fiscal year 2012.

------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Total Federal Construction Funding (Oct 2006)...........    $445,718,000
Estimated Federal Spent Through Fiscal Year 2007........    $326,533,882
Percent Spent Through Fiscal Year 2007..................           73.26
Amount Remaining after 2007:
    Total Authorized (Oct 2006).........................    $119,184,118
    Overhead Adjustment for Extension to Fiscal Year        $133,819,527
     2012...............................................
    Adjustment for 5 percent Annual Inflation...........    $154,544,690
Completion Fiscal Year (Statutory Fiscal Year 2008;                 2012
 Public Law 107-367)....................................
Years to Complete.......................................               5
Average Annual Required for Finish......................     $30,908,938
------------------------------------------------------------------------

                                                          
                                                          
Oglala Sioux Rural Water Supply System
    All of the Pine Ridge Indian Reservation, parts of the Rosebud 
Indian Reservation and parts of West River/Lyman-Jones remain without 
delivery of Missouri River water from the Oglala Sioux Rural Water 
Supply System (OSRWSS) core pipeline, the central element of the Mni 
Wiconi Project. The OSRWSS core pipeline will supply four rural water 
systems, including three Indian Reservations.
    The fiscal year 2008 funding level will connect Missouri River 
water to the central portion of the Pine Ridge Indian Reservation at 
Kyle where it can deliver water to OSRWSS distribution systems built 
previously. This will be the first opportunity to serve a significant 
portion of the population on the Pine Ridge Indian Reservation with 
Missouri River water and discontinue use of inadequate and unsafe 
groundwater supplies. Only 31 percent of the distribution system on the 
Pine Ridge Indian Reservation is complete and 69 percent remains to be 
completed.
    OSRWSS will use $5,600,000 in fiscal year 2007 funds to begin 
construction of the pipeline link between the OSRWSS North core and 
South core. When completed, this essential pipeline will permit the 
delivery of water to the Pine Ridge Indian Reservation and parts of 
West River/Lyman-Jones by alternative pipeline routes, according to the 
original strategy in the Final Engineering Report.
    The Oglala Sioux Tribe supports the funding request of West River/
Lyman-Jones for fiscal year 2008 which focuses on building the OSRWSS 
North Core westerly from Hayes toward Phillip in the West River/Lyman-
Jones service area. The intent is to complete the OSRWSS North Core and 
all other OSRWSS core facilities in fiscal year 2008. West River/Lyman-
Jones is acting as the Tribe's contractor on the OSRWSS North Core.
    The fiscal year 2008 funding request will complete the OSRWSS core. 
Earlier stages of the OSRWSS core facilities served the Lower Brule 
Indian Reservation, Rosebud Indian Reservation and eastern regions of 
West River/Lyman-Jones beginning in year 2000. Missouri River water was 
delivered to the northeastern corner of the Pine Ridge Indian 
Reservation for the first time in fiscal year 2007 but only the far 
northeastern corner of the Reservation was reachable. fiscal year 2008 
funding of $11.085 million will permit construction of the main or 
``backbone'' pipeline within the Reservation to Kyle and delivery of 
Missouri River water to distribution systems built in advance.
West River/Lyman-Jones Rural Water System
    Proposed fiscal year 2008 construction for WR/LJ includes Phase 2 
of the North Core and distribution pipelines from existing core 
pipeline to WR/LJ members between Ft. Pierre and the city of Philip. 
Phase 1 of the North Core was constructed in fiscal year 2006 and 
distribution pipelines are being extended to 200 WR/LJ members with 
fiscal year 2006 & fiscal year 2007 funding. Funding provided in fiscal 
year 2008 will complete construction of distribution pipelines that can 
be served by Phase 1 of the North Core and initiate construction of 
Phase 2.
    The North Core pipeline is the permanent water source for half of 
the WR/LJ membership. That membership includes the cities of Wall and 
Philip which are presently served from wells. Construction of Phase 2 
of the North Core remains a high priority because extended drought 
conditions in Western South Dakota threaten production from these 
groundwater sources. Upon completion the North Core will also provide 
an alternate source of water to the South Core pipeline serving the 
Oglala Sioux Tribe.
    WR/LJ members proposed to be served in fiscal year 2008 are in 
desperate need of water. Recent surveys indicate that most of those 
members haul water for domestic use and half of them haul water for 
livestock. Completion of a reliable supply of water meeting Safe 
Drinking Water Act (SDWA) standards offers immediate relief and 
economic assistance to this drought affected area.
Rosebud Rural Water System (Sicangu Mni Wiconi)
    The Rosebud Sioux Tribe and the Sicangu Mni Wiconi have made great 
strides in improving the quality of life for people connected to the 
Mni Wiconi Project. The progress made has not been without sacrifice 
and many people remain to be served. Our plans for fiscal year 2008 
address both these situations.
    The major initiative for the Sicangu Mni Wiconi is the completion 
of the Surface Water Improvements. The history of the Surface Water 
Improvements goes back to 1998 when the Tribe agreed to export 
groundwater from the Rosebud Well Field, in Southern Todd County to 
drought stricken Mellette County as an interim source of supply. A 12-
inch pipeline was constructed from near the Well Field to the town of 
White River with the understanding that a second pipeline and pump 
stations would follow and the facilities would bring high quality 
surface water to Todd County.
    Providing high quality groundwater to WR/LJ and their customers in 
Mellette County was not part of the original plan for the Sicangu Mni 
Wiconi. In addition, the city of Mission has come to rely on water from 
the Rosebud Well Field to meet their demands during periods of peak use 
in the summer months. The combination of these two factors has resulted 
in an immense burden on the Well Field. In summer months during periods 
of peak demands the wells pump constantly and do not have adequate time 
to recover.
    The easements for the parallel pipeline were obtained in 1998 and 
construction of the new pipeline will soon begin. However, available 
funds in fiscal year 2007 are not sufficient for completion and the 
majority of the Tribe's fiscal year 2008 request will go towards 
completion of the pipeline and the two pump stations required to bring 
the water to Todd County. These improvements will eliminate the stress 
to the Rosebud Well Field and provide high quality surface water from 
Mni Wiconi to Eastern Mellette and Todd County.
    The remainder of the funding request is for service lines and 
connections. The availability of high quality water has allowed people 
to inhabit lands that were allotted to their grandparent or great 
grandparent. People are anxious to live on their land and new homes are 
``sprouting up'' around the Sicangu Mni Wiconi pipelines after they are 
completed.
    These smaller pipelines are also used to provide water to 
livestock. The livestock business on range lands is an economic pillar 
for the Rosebud Reservation. By providing water, the Mni Wiconi Project 
helps improve the utilization of these lands, thereby improving the 
situation for the livestock operator, the landowner and the reservation 
economy.
    Mni Wiconi means ``Water is Life'' and we see that this is true on 
the Rosebud Reservation. Help us improve the quality of life for the 
people that are still waiting.
Lower Brule Rural Water System--Distribution
    The Lower Brule Rural Water System (LBRWS) has gained the support 
of the other sponsors to complete its portion of the Project prior to 
the completion of the other portions of the Project. This agreement to 
complete the LBRWS first is due to the relatively small portion of the 
Project that the LBRWS represents as well as the ability to save $1.5 
million to the Project as a whole by doing so. As a result, LBRWS will 
be completing its portion of the Project during 2007.
    The LBRWS continues to be grateful to the other sponsors and 
Congress for their cooperation and support in completing the funding of 
the LBRWS in this manner, and especially the South Dakota delegation 
past and present, for their continued support of this truly needed 
project. It should be noted, however, that this will not end LBRWS's 
involvement in the Project. LBRWS will continue to work with and 
support the other sponsors in seeing the entire Project come to 
fruition.
Operation, Maintenance and Replacement Budget
    The sponsors will continue to work with the Bureau of Reclamation 
to ensure that budgets are adequate to properly operate, maintain and 
replace (OMR) the core and distribution systems. The sponsors will also 
continue to manage OMR expenses to achieve a balance between 
construction and OMR. The Project has been treating and delivering more 
water each year from the OSRWSS Water Treatment Plant near Fort Pierre. 
Completion of significant core and distribution pipelines has resulted 
in more deliveries to more communities and rural users. The need for 
sufficient funds to properly operate and maintain the functioning 
system throughout the Project has grown as the Project has now reached 
73 percent completion. The OMR budget must be adequate to keep pace 
with the system that is placed in operation.
    The Mni Wiconi Project tribal beneficiaries (as listed below) 
respectfully request appropriations for OMR in fiscal year 2008 in the 
amount of $10,204,000:

------------------------------------------------------------------------
                                                            Fiscal year
                         System                                2008
------------------------------------------------------------------------
OSRWSS Off-Reservation Core.............................      $2,300,000
OSRWSS Distribution.....................................       2,500,000
RRWS....................................................       2,350,000
LBRWS...................................................       1,450,000
Reclamation.............................................       1,604,000
                                                         ---------------
      Total, Mni Wiconi.................................      10,204,000
------------------------------------------------------------------------

                                 ______
                                 

              Prepared Statement of the Mni Wiconi Project

    Senator Dorgan: We, the Mni Wiconi Project sponsors submit this 
letter to you in order to supplement our fiscal year 2008 Mni Wiconi 
Project Formal Testimony. Hopefully, this Supplemental Testimony will 
assist all members of the subcommittee on Energy and Water Development 
to further understand the truly unique needs of the Mni Wiconi Project.
    This Project covers much of the area of western South Dakota that 
is the Great Sioux Reservation established by the Treaty of 1868. Since 
the separation of the Reservation in 1889 into smaller more isolated 
reservations, including Pine Ridge, Rosebud and Lower Brule, relations 
between the Lakota population and the non-Lakota settlers on Great 
Sioux Reservation lands have been improving in successive generations. 
The Mni Wiconi Project is perhaps the most significant opportunity in 
more than a century to bring the diverse cultures of the two societies 
together for a common good. After all, ``Mni Wiconi'' is a Lakota 
phrase meaning ``water is life.'' Much progress has been made due to 
the good faith and genuine efforts of both the Lakota and non-Lakota 
sponsors. The Project is an historic basis for renewed hope and dignity 
among the Lakota people. It is a basis for substantive improvement in 
relationships.
    Each year the Mni Wiconi Project sponsor testimony addresses the 
fact that the project beneficiaries, particularly the three Indian 
Reservations, have the lowest income levels in the Nation. The health 
risks to our people from drinking unsafe water are compounded by 
reductions in health programs. We respectfully submit that our Project 
is unique and that no other project in the Nation has greater human 
needs. Poverty in our service areas is consistently deeper than 
elsewhere in the Nation. Health effects of water home diseases are 
consistently more prevalent than elsewhere in the Nation, due in part 
to (1) lack of adequate water in the home and (2) poor water quality 
where water is available. Higher incidences of impetigo, 
gastroenteritis, shigellosis, scabies and hepatitis-A are well 
documented on the Indian Reservations of the Mni Wiconi Project area. 
Progress has been made in reducing the occurrence of these diseases.
    At the beginning of the third millennium one cannot find a region 
in our Nation in which social and economic conditions are as 
deplorable. These circumstances are summarized in Table 1.\1\ Mni 
Wiconi builds the dignity of many, not only through improvement of 
drinking water, but also through direct employment and increased 
earnings during planning, construction, operation and maintenance and 
from economic enterprises supplied with Project water. We urge the 
subcommittee to address the need for creating jobs and improving the 
quality of life on the Pine Ridge, Lower Brule and Rosebud Indian 
Reservations of the project area.
---------------------------------------------------------------------------
    \1\ Table 1 was based on census data that understates population 
and poverty on the reservations and overstates income when compared 
with Interior sources. The purpose of Table 1 is to compare statistics 
from a single source between decades, namely the United States Census, 
but use of the data does not imply acceptance of census statistics by 
the Tribes.

                          TABLE 1.--PROFILE OF SELECTED ECONOMIC CHARACTERISTICS--2000
----------------------------------------------------------------------------------------------------------------
                                                                         Income
                                                         Change  ---------------------- Familities
       Indian Reservation/State             2000       from 1990     Per       Median      below    Umemployment
                                         population    (percent)    capita   household    poverty     (percent)
                                                                  (dollars)  (dollars)   (percent)
----------------------------------------------------------------------------------------------------------------
Pine Ridge Indian Reservation........          15,521      27.07      6,143     20,569        46.3         16.9
Rosebud Indian Reservation...........          10,469       7.97      7,279     19,046        45.9         20.1
Lower Brule Indian Reservation.......           1,353      20.48      7,020     21,146        45.3         28.1
State of South Dakota................         754,844       8.45     17,562     35,282         9.3          3.0
Nation...............................     281,421,906      13.15     21,587     41,994         9.2          3.7
----------------------------------------------------------------------------------------------------------------

    Employment and earnings among the Lakota people of the Project area 
are expected to positively impact the high costs of health-care borne 
by the United States and the Tribes. Our data suggest clear 
relationships between income levels and Federal costs for heart 
disease, cancer and diabetes. During the life of the Mni Wiconi 
Project, mortality rates among the Lakota people in the Project area 
for the three diseases mentioned will cost the United States and the 
Tribes more than $1 billion beyond the level incurred for these 
diseases among comparable populations in the non-Lakota community 
within the Project area.
    While this Project alone will not raise income levels to a point 
where the excessive rates of heart disease, cancer and diabetes are 
significantly diminished, the employment and earnings stemming from the 
Project will, nevertheless, reduce mortality rates and costs of these 
diseases. Please note that between 1990 and 2000 per capita income on 
Pine Ridge increased from $3,591 to $6,143, and median household income 
increased from $11,260 to $20,569, due in large part to this Project, 
albeit not sufficient to bring a larger percentage of families out of 
poverty (Table 1).
    Financial support for the Lakota membership has already been 
subjected to drastic cuts in funding programs through the Indian Health 
Service and the Bureau of Indian Affairs. This Project is a source of 
strong hope that helps off-set the loss of employment and income in 
other programs and provide for an improvement in health and welfare. 
Tribal leaders have seen that Welfare Reform legislation and other 
budget cuts nation-wide have created a crisis for tribal government 
because tribal members have moved back to the reservations in order to 
survive.
    The Mni Wiconi Project Act (Public Law 100-516, as amended) 
provides that the United States will work with us:
  --the United States has a trust responsibility to ensure that 
        adequate and safe water supplies are available to meet the 
        economic, environmental, water supply and public health needs 
        of the Pine Ridge, Rosebud and Lower Brule Indian Reservations 
        . . . 
    Lakota support for this project from the Oglala, Rosebud and Lower 
Brule Sioux Tribes has not come easily because the historical 
experience of broken commitments to the Lakota people by the Federal 
Government is difficult to overcome. The argument was that there is no 
reason to trust the Federal Government and that the respective Sioux 
Tribal Governments are being used to build the non-Lakota segments of 
the project and the Lakota segments would linger to completion. These 
arguments have been overcome by better planning, an amended 
authorization and hard fought agreements among the parties. The 
subcommittee is respectfully requested to take the steps necessary to 
complete the critical elements of the Project proposed for fiscal year 
2008.
                                 ______
                                 
     Prepared Statement of the Colorado River Commission of Nevada
    As a Nevada representative of the Colorado River Basin Salinity 
Control Forum, the Colorado River Commission of Nevada (CRC) supports 
funding the fiscal year 2008 budget request for $17,500,000 for the 
Bureau of Reclamation's Colorado River Basin Salinity Control Program. 
The CRC urges the Congress to appropriate funds requested by the 
Administration to continue to maintain and operate salinity control 
facilities as they are completed and placed into long-term operations. 
Reclamation has completed the Paradox Valley unit which involves the 
collection of brines in the Paradox Valley of Colorado and the 
injection of those brines into a deep aquifer through an injection 
well. The continued operation of this project and the Grand Valley Unit 
will be funded primarily through the Facility Operations activity. The 
CRC also supports funding to allow for continued general investigation 
of the Salinity Control Program as requested by the Administration for 
the Colorado River Water Quality Improvement Program.
    Salinity remains one of the major problems in the Colorado River. 
Congress has recognized the need to confront this problem with its 
passage of Public Law 93-320 and Public Law 98-569. Your support of the 
Forum's current funding recommendations in support of the Colorado 
River Basin Salinity Control Program is essential to move the program 
forward so that the congressionally directed salinity objectives 
embodied in Public Law 93-320 and Public Law 98-569 are achieved.
                                 ______
                                 
  Prepared Statement of the Western Coalition of Arid States (WESTCAS)
    The Western Coalition of Arid States (WESTCAS) would like to submit 
the following statement concerning the fiscal year 2008 Budget Request 
for the Department of the Interior's Bureau of Reclamation. My name is 
Larry Libeu and I am the President of the organization.
    WESTCAS is a coalition of approximately 125 water and wastewater 
agencies, cities and towns, and professional associated focused on 
water quality and quantity issues in the States of Arizona, California, 
Colorado, Idaho, Nevada, New Mexico, Oregon and Texas.
    The Bureau's overall Budget for fiscal year 2008 is $958.4 million. 
The portion of the Budget that WESTCAS has interest in, the Water and 
Related Resources Account has $816.1 million dollars, which represents 
a decrease of $17,227,000 from fiscal year 2007. It is within this 
account that Water Reclamation/Reuse Title XVI is funded. The proposed 
funding level for fiscal year 2008 is $10.1 million. The Title XVI 
program was authorized by Public Law 102-575. This program provides a 
central focus for Reclamation's efforts and expertise in planning, 
environmental review and construction of new projects.
    The Title XVI water recycling program within the BOR provides a 
excellent cost-share mechanism for helping to drought proof the West. 
Projects developed by this program allow agencies to reduce their 
dependence on the scarce imported supplies from the Colorado River and 
other western watersheds. WESTCAS believes that increased funding for 
the program is needed to begin reducing the ever increasing backlog of 
authorized, but unfunded projects as well as assist in addressing the 
serious drought conditions throughout Reclamation states. We believe 
that funding this at least at the level of $50 million a year is 
necessary to clear the approximate backlog of $350 million for this 
program.
    We have two caveats in this regard. We believe the Committee should 
provide directive language to the Bureau of Reclamation to convene a 
meeting of all of the project sponsors for authorized projects in this 
program, ask them to bring their construction schedules and financing 
information so a 5 year schedule for completion can be worked out 
consistent with increased levels of funding for the program. We would 
be pleased to lend our expertise and experience to such a meeting. We 
further believe, and we are just as disappointed as the Committee, that 
the Bureau should have already produced an overall 5 year funding 
program consistent with the directive in last years Committee report.
    Our second caveat is for the Appropriations Committee to have a 
dialogue with the authorizing Committees regarding this program 
indicating that any new project for the Title 16 program will not be 
funded until after the backlog of all ready authorized projects is 
complete. Further, in order to receive funding, the priority should be 
set by those projects that are consistent with the individual State's 
Water Plan, and recommended and supported by that State's Governor and 
shall not have elements funded by other Federal agency programs. 
Priority shall be placed on cost effectiveness of the water and 
technology being developed and how the project fits into the 
comprehensive water plan for the area.
    Another program that WESTCAS would recommend increased funding is 
the Colorado River Salinity Control Program, Title II. Increased 
agricultural use and drainage as well as continued degradation caused 
by natural elements such as shale and return flows from urban centers 
are creating an increased salinity content to the waters of the 
Colorado River. WESTCAS firmly believes that this element of the 
Bureau's budget should be funded at the $26 million level. This would 
represent an increase of $13 million over the proposed fiscal year 2008 
budget amount.
    WESTCAS supports increased funding for the CAL-FED program. The 
fiscal year 2008 budget indicates a decrease from prior years. WESTCAS 
strongly recommends that this item in the Bureau's budget be increased 
to $40.52 million. The current proposed budget has funding set at 
$31.75 million. WESTCAS would recommend the following adjustments in 
the BOR CAL-FED funding proposal: Los Vaqueros Storage Study, +$3.27 
million, Lower San Joaquin River Fish Screen Projects, +$3.50 million, 
Refuge Water Supply Diversification, +$.50 million, Environmental Water 
Account +$3.0 million, and Administration -$1.50 million. With these 
adjustments the new budget amount would be $40.52 million.
    WESTCAS also would recommend increased funding for the Middle Rio 
Grande Project to $24 million and the Lower Colorado River Operations 
Program to $17 million.
    We would like to be able to support funding for the Bureau's Water 
2025 program, but absent authorization we withhold our support at this 
time. We do believe greater integrated resource planning and water 
resource planning is need for the West. We would hope the Committee 
would consider using the information that is being developed by the 
Western States Water Council report in this area as a tool for 
evaluation future budget requests.
    We also believe the Bureau of Reclamation should be doing more with 
regard to drought preparedness. The title XVI program is important in 
this regard, but it is not intended to be used throughout the West. 
Relying on an ``emergency'' approach to drought is not an effective way 
to address this issue. There are emergencies associated with drought, 
but better planning and an ongoing well funded program in each of the 
states is needed. We recommend at least $1 million per state to address 
this ongoing issue.
    We believe that overall a $150 million increase for the Bureau's 
Water and Related Resources Account would be helpful in addressing the 
water resource needs of the West before water quality and quantity 
issues become a greater crisis as the infrastructure ages, the 
population grows and environmental needs continue to be addressed.
                                 ______
                                 
   Prepared Statement of the Garrison Diversion Conservancy District

    Mr. Chairman, members of the committee: My name is Dave Koland; I 
serve as the general manager of the Garrison Diversion Conservancy 
District. The mission of Garrison Diversion is to provide a reliable, 
high quality and affordable water supply to the areas of need in North 
Dakota. Over 77 percent of our state residents live within the 
boundaries of the District. I would like to comment on the impact the 
President's fiscal year 2008 budget request for the Garrison Diversion 
Unit (GDU) has on the effort to provide reliable, high quality and 
affordable water supplies to the citizens of North Dakota.
    The President's fiscal year 2008 budget request was pitifully 
inadequate in meeting the commitments the Federal Government has made 
to North Dakota. In return for accepting a permanent flood on 500,000 
acres of prime North Dakota river valley the Federal Government 
promised the State and tribes that they would be compensated as the 
dams were built. The dams were completed over 50 years ago and still we 
wait for the promised compensation. At the rate of payment the 
President's budget proposes the Federal Government will not even be 
able to stay current with the indexing applied by law on their 
commitment to North Dakota.
    The Municipal Rural & Industrial (MR&I) program was started in 1986 
after the Garrison Diversion Unit (GDU) was reformulated from a 
million-acre irrigation project into a multipurpose project with 
emphasis on the development and delivery of municipal and rural water 
supplies. The statewide MR&I program has focused on providing grant 
funds for water systems that provide water service to previously 
unserved areas of the State. The State has followed a policy of 
developing a network of regional water systems throughout the State. 
Every rural water system that has been built in North Dakota is still 
operating. They are providing safe, clean water to their members, 
paying 100 percent of the operation and maintenance costs, reducing 
their debt, putting money in reserve, complying with every State and 
Federal regulation, and doing so with a stable, affordable rate 
structure.
North Dakota's Success Story
    Rural water systems are being constructed using a unique blend of 
local expertise, state financing, rural development loans, MR&I grant 
funds to provide an affordable rate structure, and the expertise of the 
Bureau of Reclamation (BOR) to deal with design and environmental 
issues. The projects are successful because they are driven by a local 
need to solve a water quantity or quality problem. The solution to the 
local problem is devised by the community being affected by the 
problem. The early, local buy-in helps propel the project through the 
tortuous pre-construction stages.
    The MR&I program has been so successful and so important to North 
Dakota that the North Dakota Legislature loaned the program $18 million 
to help deal with the severe lag time that has developed in the Federal 
appropriations process.
    The desperate need for clean, safe water is evidenced by the 
willingness of North Dakota's rural residents to pay water rates well 
above the rates EPA considers affordable. The EPA Economic Guidance 
Workbook states that rates greater than 1.5 percent of the median 
household income (MHI) are not only unaffordable, but also ``may be 
unreasonable.''
    The average monthly cost on a rural water system for 6,000 gallons 
of water is currently $48.97. The water rates in rural North Dakota 
would soar to astronomical levels without the 75 percent grant dollars 
provided by the MR&I program. For instance, current rates would have to 
average a truly unaffordable $134.19/month or a whopping 3.8 percent of 
the MHI. Rates would have ranged as high as $190.80/month or a 
prohibitive 5.3 percent of MHI without the assistance of the MR&I 
program.
    The people waiting for water in our rural communities are willing 
to pay far more than what many consider an affordable, or even 
reasonable, price for clean, safe water. But there is a limit to how 
much they should be expected to pay.
Budget Impacts On Garrison Diversion Unit
    Let me begin by reviewing the various elements within the current 
budget request and then discuss the impacts that the current level of 
funding will have on the program.
    The President's budget request for fiscal year 2008 is $20.22 
million. This year, Garrison Diversion Conservancy District is asking 
the Congress to appropriate a total of $65 million for the GDU. 
Attachment 1 is a breakdown of the elements in Garrison Diversion's 
request. To discuss this in more detail, I must first explain that the 
GDU budget consists of several different program items. For ease of 
discussion, I would like to simplify the breakdown into three major 
categories. The first I would call the base operations portion of the 
budget request. This amount is nominally $23 million annually when you 
include underfinancing. However, as more Indian MR&I projects are 
completed, the operation and maintenance costs for these projects will 
increase and create a need that will need to be addressed.
    The second element of the budget is the MR&I program. This consists 
of both Indian and non-Indian funding. The Dakota Water Resources Act 
contains an additional $200 million authorization for each of these 
programs. It is our intent that each program reaches the conclusion of 
the funding authorization at the same time. We believe this is only 
fair.
    The MR&I program consists of a number of projects that are 
independent of one another. They are generally in the $20 million 
category. Some are, of course, smaller and others somewhat larger, but 
one that is considerably larger is the Northwest Area Water Supply 
Project (NAWS). The first phase of that project is under construction. 
The optimum construction schedule for completion of the first phase has 
been determined to be 5 years. The total cost of the first phase is 
$125 million. At a 65 percent cost share, the Federal funding needed to 
support that project is $81 million. On the average, the annual funding 
needed for that project alone is over $16 million. Several other 
projects have been approved for future funding and numerous projects on 
the reservations are ready to begin construction. These requests will 
all compete with one another for funding. It will be a delicate 
challenge to balance these projects. Nevertheless, we believe that once 
a project is started, it needs to be pursued vigorously to completion. 
If it is not, we simply run the cost up and increase the risk of 
incompatibility among the working parts.
    An example of the former would be the certain impact of the 
increased cost of construction over time through inflation but also by 
protracting the engineering and administration costs.
    The third element of the budget is the Red River Valley Water 
Supply Project (RRVWSP) construction phase. The Dakota Water Resources 
Act authorized $200 million for the construction of facilities to meet 
the water quality and quantity needs of the Red River Valley 
communities. Over 42 percent of North Dakota's citizens rely on the 
drought-prone Red River of the North as their primary or sole source of 
water. It is my belief that the final plans and authorizations, if 
necessary, should be expected in approximately 3 years. This will 
create an immediate need for greater construction funding.
    This major project, once started, should also be pursued vigorously 
to completion. The reasons are the same as for the NAWS project and 
relate to good engineering and construction management. Although 
difficult to predict at this time, it is reasonable to plan that the 
RRVWSP features, once started, should be completed in approximately 3 
years. This creates the need for additional funding of $30 million/year 
starting in fiscal year 2009.
    Using these two projects as examples frames the argument for a 
steadily increasing budget. There is a need to accelerate the MR&I 
program now to assure the timely completion of the NAWS project and 
then to accommodate the need for additional construction funds when the 
RRVWSP construction is underway.
    It is simply good management to blend these needs to avoid drastic 
hills and valleys in the budget requests. By accelerating the 
construction of NAWS and other projects which are ready for 
construction during the next few years, some of the pressure will be 
off when the RRVWSP construction funding is needed. A smoother, more 
efficient construction funding program over time will be the result.
    Attachment 2 shows such a program. It begins with a $65 million 
budget this year and gradually builds over time to over $140 million 
when the RRVWSP construction could be in full swing (fiscal year 2010). 
Mr. Chairman, this is why we believe it is important that the budget 
resolution recognize that a robust increase in the budget allocation is 
needed for the Bureau of Reclamation. We hope this testimony will serve 
as at least one example of why we fully support the efforts to increase 
the overall allocation in the Bureau of Reclamation Water and Related 
Resources Account in fiscal year 2008 to a total of $1 billion.
    The Bureau of Reclamation, Rural Development, Garrison Diversion 
Conservancy District, North Dakota State Water Commission and local 
rural water districts have formed a formidable alliance to deal with 
the lack of a high quality, reliable water source throughout much of 
North Dakota. This cost-effective partnership of local control, state-
wide guidance and Federal support has provided safe, clean, potable 
water to hundreds of communities and thousands of homes across North 
Dakota.
   attachment 1--garrison diversion unit (gdu) justification for $65 
                 million appropriation fiscal year 2008
    North Dakota's Municipal, Rural and Industrial (MR&I) water supply 
program funds construction projects state-wide under the joint 
administration of the Garrison Diversion Conservancy District (GDCD) 
and the State Water Commission (SWC).
    Northwest Area Water Supply Project (NAWS) is under construction 
after 16 years of study and diplomatic delay. Construction costs 
(Federal) are estimated to be $81 million. Designs are based on a 5-
year construction period; thus, over $16 million is needed for NAWS 
alone.
    Indian MR&I programs on four reservations are also under 
construction. Tribal and State leaders have agreed to split the Indian 
and non-Indian MR&I allocation on a 50/50 basis.
    The SWC has advanced the MR&I program $18 million to allow 
construction to continue on several critical projects. One project is 
the $22 million Williston Water Treatment Plant upgrade.

                        [In millions of dollars]
------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
OPERATION AND MAINTENANCE OF INDIAN MR&I SYSTEMS AND                4.76
 JAMESTOWN DAM..........................................
                                                         ===============
BREAKDOWN OF $51.29 MILLION CONSTRUCTION REQUEST:
    Operation and Maintenance of existing GDU system....            5.16
    Wildlife Mitigation & Natural Resources Trust.......            3.49
    Red River Valley Special Studies and EIS............            5.51
    Indian and non-Indian MR&I..........................           42.00
    Oakes Test Area and Miscellaneous...................            1.28
    Under financing 5 percent...........................            2.80
                                                         ---------------
      Total for Construction............................           60.24
                                                         ===============
      Grand Total.......................................           65.0
------------------------------------------------------------------------

                                                          
                                                          
                                 ______
                                 
      Prepared Statements of the Santa Clara Valley Water District
statement of support--san jose area water reclamation and reuse program 
                  (south bay water recycling program)
    Background.--The San Jose Area Water Reclamation and Reuse Program, 
also known as the South Bay Water Recycling Program, will allow the 
city of San Jose and its tributary agencies of the San Jose/Santa Clara 
Water Pollution Control Plant to protect endangered species habitat, 
meet receiving water quality standards, supplement Santa Clara County 
water supplies, and comply with a mandate from the U.S. Environmental 
Protection Agency and the California Water Resources Control Board to 
reduce wastewater discharges into San Francisco Bay.
    The Santa Clara Valley Water District (District) collaborated with 
the city of San Jose to build the first phase of the recycled water 
system by providing financial support and technical assistance, as well 
as coordination with local water retailers. The design, construction, 
construction administration, and inspection of the program's 
transmission pipeline and Milpitas 1A Pipeline was performed by the 
District under contract to the city of San Jose.
    Status.--The city of San Jose is the program sponsor for Phase 1, 
consisting of almost 60 miles of transmission and distribution 
pipelines, pump stations, and reservoirs. Completed at a cost of $140 
million, Phase 1 began partial operation in October 1997. Summertime 
2004 deliveries averaged 10.6 million gallons per day of recycled 
water. The system now serves over 517 active customers and delivers 
approximately 7,200 acre-feet of recycled water per year.
    Phase 2 is now underway. In June 2001, San Jose approved an $82.5 
million expansion of the program. The expansion includes additional 
pipeline extensions into the cities of Santa Clara and Milpitas, a 
major pipeline extension into Coyote Valley in south San Jose, and 
reliability improvements of added reservoirs and pump stations. The 
District and the city of San Jose executed an agreement in February 
2002 to cost share on the pipeline into Coyote Valley and discuss a 
long-term partnership agreement on the entire system. Phase 2's near-
term objective is to increase deliveries by the year 2010 to 15,000 
acre-feet per year.
    Funding.--In 1992, Public Law 102-575 authorized the Bureau of 
Reclamation to work with the city of San Jose and the District to plan, 
design, and build demonstration and permanent facilities for reclaiming 
and reusing water in the San Jose metropolitan service area. The city 
of San Jose reached an agreement with the Bureau of Reclamation to 
cover 25 percent of Phase 1's costs, or approximately $35 million; 
however, Federal appropriations have not reached the authorized amount. 
To date, the program has received $26.62 million of the $35 million 
authorization.
    Fiscal Year 2007 Funding.--No funds were appropriated in fiscal 
year 2007.
    Fiscal Year 2008 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $8.8 
million, in addition to the $200,000 in the administration's fiscal 
year 2008 budget request, for a total of $9 million to fund the 
Program's work.
 statement of support--san luis reservoir low point improvement project
    Background.--San Luis Reservoir is one of the largest reservoirs in 
California, and is the largest ``off-stream'' water storage facility in 
the world. The Reservoir has a water storage capacity of more than 2 
million acre-feet and is a key component of the water supply system 
serving the Federal Central Valley Project (CVP) and California's State 
Water Project. San Luis is used for seasonal storage of Sacramento-San 
Joaquin delta water that is delivered to the reservoir via the 
California Aqueduct and Delta-Mendota Canal. The San Luis Reservoir is 
jointly owned and operated by the U.S. Bureau of Reclamation and the 
California Department of Water Resources.
    The San Luis Reservoir provides the sole source of CVP water supply 
for the San Felipe Division contractors--Santa Clara Valley Water 
District (District), San Benito County Water District and, in the 
future, Pajaro Valley Water Management Agency. When water levels in San 
Luis Reservoir are drawn down in the spring and summer, high water 
temperatures result in algae blooms at the reservoir's water surface. 
This condition degrades water quality, making the water difficult or 
impractical to treat and can preclude deliveries of water from San Luis 
Reservoir to San Felipe Division contractors. In order to avoid the 
``low point'' problem, the reservoir has been operated to maintain 
water levels above the critical low elevation--the ``low point''--
resulting in approximately 200,000 acre-feet of undelivered water to 
south of the Delta State and Federal water users
    Project Goals and Status.--The goal of the project is to increase 
the operational flexibility of storage in San Luis Reservoir and ensure 
a high quality, reliable water supply for San Felipe Division 
contractors. The specific project objectives are to: (1) Avoid supply 
interruptions when water is needed by increasing the certainty of 
meeting the requested delivery schedule throughout the year to south of 
Delta contractors dependent on San Luis Reservoir; (2) Increase the 
reliability and quantity of yearly allocations to south of Delta 
contactors dependent on San Luis Reservoir; (3) Announce higher 
allocations earlier in the season to south of Delta contractors 
dependent on San Luis Reservoir without sacrificing accuracy of the 
allocation forecasts. In addition to the above objectives, identify 
opportunities to provide for ecosystem restoration.
    Preliminary studies by the District have identified six potential 
alternatives to solve the problem. More funding is needed to fully 
explore these alternatives.
    The passage of H.R. 2828 in 2004 reauthorized Federal participation 
in the CALFED Bay-Delta Program. The San Luis Reservoir Low Point 
Improvement Project was one of six new projects, studies or water 
management actions authorized in the bill to receive a share of up to 
$184 million authorized under the conveyance section of the bill.
    Fiscal Year 2007 Funding.--$1.485 million was appropriated in the 
fiscal year 2007 under the CALFED appropriation.
    Fiscal Year 2008 Funding Recommendation.--It is requested that the 
congressional committee support the administration's fiscal year 2008 
budget request of $1.4 million for the San Luis Reservoir Low Point 
Improvement Project. The San Luis request is included in the $50 
million CALFED Bay-Delta appropriation request.

             STATEMENT OF SUPPORT--CALFED BAY-DELTA PROGRAM

    Background.--In an average year, half of Santa Clara County's water 
supply is imported from the San Francisco Bay/Sacramento-San Joaquin 
Delta estuary (Bay Delta) watersheds through three water projects: The 
State Water Project, the Federal Central Valley Project, and San 
Francisco's Hetch Hetchy Project. In conjunction with locally developed 
water, this water supply supports more than 1.7 million residents in 
Santa Clara County and the most important high-tech center in the 
world. In average to wet years, there is enough water to meet the 
county's long term needs. In dry years, however, the county could face 
a water supply shortage of as much as 100,000 acre feet per year, or 
roughly 20 percent of the expected demand. In addition to shortages due 
to hydrologic variations, the county's imported supplies have been 
reduced due to regulatory restrictions placed on the operation of the 
State and Federal water projects.
    There are also water quality problems associated with using Bay 
Delta water as a drinking water supply. Organic materials and 
pollutants discharged into the Delta, together with salt water mixing 
in from San Francisco Bay, have the potential to create disinfection by 
products that are carcinogenic and pose reproductive health concerns.
    Santa Clara County's imported supplies are also vulnerable to 
extended outages due to catastrophic failures such as major earthquakes 
and flooding.
    Project Synopsis.--The CALFED Bay Delta Program is an 
unprecedented, cooperative effort among Federal, State, and local 
agencies to restore the Bay Delta. With input from urban, agricultural, 
environmental, fishing, and business interests, and the general public, 
CALFED has developed a comprehensive, long term plan to address 
ecosystem and water management issues in the Bay Delta.
    Restoring the Bay Delta ecosystem is important not only because of 
its significance as an environmental resource, but also because failing 
to do so will stall efforts to improve water supply reliability and 
water quality for millions of Californians and the State's trillion 
dollar economy and job base.
    The passage of HR 2828 (Public Law 108-361) in 2004 reauthorized 
Federal participation in the CALFED Bay-Delta Program and provided $389 
million in new and expanded funding authority for selected projects, 
including the San Luis Reservoir Low Point Improvement Project. The San 
Luis Project is one of six new projects, studies or water management 
actions authorized to receive a share of up to $184 million under the 
conveyance section of the bill. It is critical that Federal funding be 
provided to implement the actions authorized in the bill in the coming 
years.
    Fiscal Year 2007 Funding.--$33.6 million was appropriated for 
CALFED activities in fiscal year 2007.
    Fiscal Year 2008 Funding Recommendation.--It is requested that the 
committee support an appropriation add-on of $18.2 million, in addition 
to the $31.8 million in the administration's fiscal year 2008 budget 
request, for a total of $50 million for California Bay-Delta 
Restoration.
                                 ______
                                 
 Prepared Statement of the Confederated Tribes of the Umatilla Indian 
                              Reservation

    Honorable Chairman Byron Dorgan and members of the committee: We 
respectfully request fiscal year 2008 appropriation of funds for two 
priority watershed restoration and agricultural water supply protection 
projects in Oregon and Washington, the Umatilla Basin Water Supply 
Project (previously funded under the Umatilla Basin Project Phase III, 
OR) and the Walla Walla General Investigation Stream Flow Restoration 
Feasibility Study (previously funded under the Walla Walla River 
Watershed, OR & WA).
  --For the Umatilla Basin Water Supply Project, Oregon, we request an 
        appropriation of $1 million in the Bureau of Reclamation, 
        Pacific Northwest Region, Water and Related Resources budget. 
        This request will build upon the $450,000 committed by the 
        Bureau of Reclamation to the Project in fiscal year 2007.
  --For the Walla Walla River Watershed, Oregon and Washington, we 
        request an appropriation of $100,000 in the U.S. Army Corps of 
        Engineers, Portland Division, Walla Walla District, General 
        Investigations budget--to initiate Pre-engineering and Design 
        (PED) phase after fiscal year 2008 completion of Feasibility 
        Study. This project is also known as Walla Walla River Basin 
        Feasibility Report/Environmental Impact Statement.
    Both the Umatilla Basin Water Supply Project and the Walla Walla 
General Investigation Stream Flow Restoration Feasibility Study are 
ongoing projects and have had administration and/or congressional line 
item funding in past fiscal years.
Umatilla River Basin, Oregon Water Supply Project
    By letter dated March 19, 2007, the Office of the Secretary of 
Interior responded favorably to the formal requests of the Washington 
and Oregon delegations and of the Confederated Umatilla Tribes, 
Westland Irrigation District and Governor Theodore Kulongoski to 
initiate Umatilla Basin water development projects and concurrent 
settlement of the Tribe's reserved water rights. Counselor to the 
Secretary, L. Michael Bogert, wrote ``I will ask the Secretary's Indian 
Water Rights Office to appoint an Assessment Team . . .'' and ``I will 
also ask the Bureau of Reclamation to move forward with a concurrent 
appraisal level study of water supply options, including a full Phase 
III exchange . . . to help resolve the Tribe's water rights claims.''
    The Bureau of Reclamation, subsequent to issuance of the March 19 
letter from Counselor Bogert, has committed $450,000 to fiscal year 
2007 work on the Umatilla Basin water supply appraisal study.
    The Umatilla Basin Water Supply Project is authorized by the 
Reclamation Feasibility Studies Act of 1966, 80 Stat. 707, Public Law 
89-561, (Sept. 7, 1966).
    The fiscal year 2008 request of $1 million to the U.S. Bureau of 
Reclamation will follow-up the $450,000 fiscal year 2007 work and 
should complete the majority of the estimated 2 year appraisal level 
study. It is anticipated that the full appraisal study project will be 
completed in 2009 in order to inform the concurrent Interior Department 
Indian Water Rights Assessment Team's work products. In 2009, Interior 
should have a clear project or suite of projects necessary to satisfy 
water rights of the Confederated Umatilla Tribes on the Umatilla Indian 
Reservation and in the Umatilla River.
    This fiscal year 2008 request follows on the work of the Bureau of 
Reclamation, authorized by the Umatilla Basin Project Act of 1988 (100 
Public Law 557; 102 Stat. 2782 Title II), to construct and operate the 
Phase I Exchange with West Extension Irrigation District and the Phase 
II Exchange with Hermiston and Stanfield Irrigation Districts. Heralded 
as one of the most successful stream flow restoration and salmon 
recovery projects in the Columbia River Basin, the Umatilla Basin 
Project resulted in partially restored stream flows in the Umatilla 
River and successful reintroduction of spring Chinook, fall Chinook and 
Coho salmon. After nearly a century of dry river bed in summer months 
and extinction of all salmon stocks, there has been an Indian and non-
Indian salmon fishery nearly every year in the Umatilla River since the 
project was completed in the mid-1990s.
    Completion of the Water Supply Study and the concurrent Tribal 
Water Rights Assessment is supported and endorsed by the Honorable 
Governor Ted Kulongoski and by local irrigation districts including 
specifically Westland Irrigation District, the Umatilla County 
Commission, and local municipalities including specifically the City of 
Irrigon.
Walla Walla Basin, Oregon and Washington, GI Feasibility Study
    In its sixth and final full year prior to completion, the U.S. Army 
Corps of Engineers' feasibility study will select the project necessary 
to restore stream flows in the Walla Walla River. Drained nearly dry 
during summer months by irrigation in Oregon and Washington, the Walla 
Walla River is within the aboriginal lands of the Confederated Umatilla 
Tribes and the complete loss of salmon violates the agreement by the 
United States in the Treaty of 1855 to protect these fish.
    Approximately $3 million of Federal funds have either been budgeted 
or appropriated through fiscal year 2007 (this includes a estimate of 
$797,000 for fiscal year 2007 based upon recent communication with 
Corps of Engineers). As a result of the allocation of $797,000 in 
fiscal year 2007, the Corps will finish the Feasibility Study in 2008 
without additional appropriations and CTUIR's request for $100,000 will 
enable the initiation of the next PED phase.
    The Feasibility Study Project is authorized by the Senate Committee 
on Public Works July 27, 1962 (Columbia River and Tributaries), 87th 
Congress, House Document #403 and initiated as a result of a positive 
Reconnaissance Report for the Walla Walla River Watershed (1997) under 
a General Investigation study.
    The Confederated Tribes of the Umatilla Indian Reservation is the 
formal sponsor of the Corps of Engineers Feasibility Study and has 
provided over $3.1 million in in-kind contributions. Additionally, the 
State of Washington Department of Ecology has provided $400,000 to the 
Feasibility Study.
    Support for the completion of the Feasibility Study and moving to 
construction of the project is strong and diverse and includes the 
Honorable Governor of Washington Christine Gregoire, the Honorable 
Governor of Oregon Ted Kulongoski, the Walla Walla Watershed Alliance, 
the Walla Walla Basin Watershed Council, basin irrigation districts, 
local State legislators and many local and regional advocacy groups.
    In closing, the CTUIR appreciates the opportunity to provide this 
testimony in support of adding funds for the ongoing projects Umatilla 
River Basin Water Supply Project, Bureau of Reclamation, and for the 
Army Corps of Engineers Walla Walla River Basin Watershed Restoration 
Feasibility Study. Both projects are critically important to protecting 
existing agricultural economies, completing future water supply 
development and concurrently restoring stream flows and recovering 
threatened salmon and other Columbia River Basin fish stocks.
                                 ______
                                 
       Prepared Statement of the Oregon Water Resources Congress

    I am Anita Winkler, Executive Director, Oregon Water Resources 
Congress. This testimony is submitted to the United States Senate 
Appropriations Committee, Energy and Water Development Subcommittee, 
regarding the fiscal year 2008 Budget for the Bureau of Reclamation and 
Oregon Projects. The Oregon Water Resources Congress (OWRC) was 
established in 1912 as a trade association to support member needs to 
protect water rights and encourage conservation and water management 
statewide. OWRC represents non-potable agriculture water suppliers in 
Oregon, primarily irrigation districts, as well as member ports, other 
special districts and local governments. The association represents the 
entities that operate water management systems, including water supply 
reservoirs, canals, pipeline and hydropower production.

                         BUREAU OF RECLAMATION

    OWRC continues to support an increase in funding for the Bureau of 
Reclamation's Water and Related Resources program above the 
administration's proposed fiscal year 2008 budget request for the 
Bureau of Reclamation's programs west-wide. The administration's 
current budget proposal is approximately $150 million less than what we 
in the water community feel is necessary to carryout an effective 21st 
Century water program for the West.
Water 2025
    As our membership works to meet water-related challenges, we have 
found the Water 2025 program of the Bureau beneficial in providing the 
extra financial assistance necessary for the proper planning and 
actions to help prevent future crisis.
    OWRC supports the $11 million fiscal year 2008 budget request for 
the Water 2025 program. Funding this program will support our member 
districts' efforts to improve water delivery systems, conserve water, 
and implement innovative projects to meet the water needs in our State.
    With many Western States confronting significant budget deficits, 
increased emphasis is being placed on targeted Federal aid. In 
addition, we continue to be confronted by looming shortages associated 
with the on going drought in the West. While we appreciate the 
administration's request for $11 million for the Water 2025 program, we 
believe this seriously under represents the need for this program and 
the financial assistance in provides Western States to address water 
supply needs. We support a larger appropriation for the program once it 
is reauthorized and will provide a recommended dollar amount at that 
time.

                              OREGON NEEDS

    We are concerned with the overall reduction in the fiscal year 2008 
request for Oregon projects in the Bureau of Reclamation's fiscal year 
2008 budget compared to the fiscal year 2007 request. With the 
exception of the Crooked River Project and the Savage Rapids Dam 
Removal, every project is down in requested dollars. Given the aging 
infrastructure, the surging population and environmental requirements 
we feel this is shortsighted given the needs in the State. We recognize 
that the Rural Water Supply Act passed in the last Congress instituting 
a new loan guarantee program for the Bureau of Reclamation. We believe 
this may prove to be an important new tool in the Reclamation Tool Box. 
However, it should not be viewed as a substitute for a robust Water And 
Related Resources Budget.
    We are disappointed that Reclamation has not come forward with 
their 5-year budgeting plan as requested by the committee, This 
absence, coupled with not having the spending plan for the fiscal year 
2007 funding provided make it difficult to provide more thorough 
judgments and recommendations on the fiscal year 2008 budget request
Conservation Implementation
    The largest need for funding for OWRC's members is to implement 
water conservation projects. Irrigation districts in Oregon continue to 
line and pipe open waterways to enhance both water supply and water 
quality. But the ability to continue this work depends on some public 
investment in return for the public benefits. Districts have conserved 
water and provided some of the saved or conserved water to benefit the 
fishery in-stream while also building reservoir supplies.
    While some of these districts will continue to benefit from the 
funding requested in the fiscal year 2008 Bureau budget request, others 
are going through a reauthorization process or new authorizations for 
projects in their districts that will continue this conservation ethic.
Rogue River Basin
    Medford Irrigation District
    Rogue River Valley Irrigation District
    Talent Irrigation District
    Grants Pass Irrigation District
    Three contiguous districts in the Rogue Project (Medford, Rogue 
River and Talent irrigation districts) are members of OWRC. We support 
their ongoing program request in this area.
    The Grants Pass Irrigation District (GPID) continues to address the 
eventual removal of the Savage Rapids Dam. The $15 million in the 
fiscal year 2008 budget is an important continuation of the effort to 
address the agreements made in this area. OWRC supports the GPID 
request.
Deschutes Basin
    Tumalo Irrigation District
    Deschutes Resource Conservancy
    Ochoco Irrigation District
    The Tumalo Irrigation District and the Deschutes Resource 
Conservancy are currently working on new program and project 
authorizations. We appreciated the committee efforts to add $1 million 
in last years appropriation bill for the DRC.
    The Ochoco Irrigation District (Prineville, Oregon) has worked with 
the Bureau of Reclamation, along with the North Unit Irrigation 
District (Madras, Oregon) for the better part of a decade to determine 
the use of unallocated water in the district's reservoir. It is 
important that this type of approach continues to address the needs in 
these areas.
Umatilla/Columbia Basins
    Stanfield Irrigation District
    Westland Irrigation District
    Hermiston Irrigation District
    West Extension Irrigation District
    East Valley Water District
    East Fork Irrigation District
    The Umatilla districts draw their water supply from the Umatilla 
and Columbia Rivers. The districts have been in the process of 
completing boundary changes and seeking supplemental contracts as part 
of the conclusion of the boundary process. This process has taken 
nearly a decade. The districts recognize the need to move forward with 
Phase III of the project and support the $374,000 in the fiscal year 
2008 Budget for project conservation assistance and water quality 
improvements.
Eastern Basins
    Burnt, Malheur, Owyhee and Powder River Basins Water Optimization 
Study.
     The irrigation districts in these basins continue to seek support 
for this optimization study to seek alternatives for more effective 
water management through conservation projects and enhancement of water 
supply. This project has been identified by the Bureau of Reclamation 
as a regional need.
    OWRC supports the fiscal year 2008 Oregon Investigations program 
request that contains $810,000 to continue studies for these basins as 
well as several other basins in the State.
    In addition, we support ongoing State of Oregon efforts on Water 
Supply Investigations in the State. As districts and the State continue 
their efforts at better planning, there is a fundamental need for 
better information. This would help with assessing existing and future 
water needs in Oregon, completing a comprehensive inventory of above 
and below ground storage and quantify surplus winter water.
Klamath Basin
    The Klamath Project districts continue to require support for the 
work in their area. We appreciate the $25 million request for the 
collaborative efforts of all involved and recommend continued scrutiny 
by the committee to make sure the needs and issues of the water 
community are met in this area. We continue to encourage the 
administration and in particular, the various Department of the 
Interior agencies, to work closely with the districts in the project 
area on the overall funding and planning necessary for ongoing 
solutions.

                               CONCLUSION

    Thank you for the opportunity to provide testimony regarding the 
fiscal year 2008 Federal Bureau of Reclamation budget. While we support 
existing proposals, we feel that given the record-setting droughts we 
have suffered in the past few years and in anticipation of another 
drought this year, we need to support an increased budget to stabilize 
the Nation's water supply for the many needs it must meet. Providing a 
stable water supply feeds the economy locally and at the national 
level. The needs in this area should not have to rely on emergency 
approaches and funding to be addressed in a timely manner. There is a 
storing need for integrated water management and systems and watershed 
approaches. An emphasis on improved intergovernmental cooperation, 
working with State, regional and local organizations can make for 
better collaborative planning models for everyone to benefit. We would 
encourage the subcommittee to request a briefing from the Western 
States Water Council on the study they have underway in this policy 
area.
                                 ______
                                 
 Prepared Statement of the Fort Peck Assiniboine and Sioux Tribes and 
                        Dry Prairie Rural Water

                         BUREAU OF RECLAMATION

Fiscal Year 2008 Budget Request
    The Fort Peck Assiniboine and Sioux Tribes and Dry Prairie Rural 
Water respectfully request fiscal year 2008 appropriations in the 
amount of $36,851,000 for the Bureau of Reclamation from the 
Subcommittee on Energy and Water Development. Funds will be used to 
construct critical elements of the Fort Peck Reservation Rural Water 
System, Montana, (Public Law 106-382, October 27, 2000). The amount 
requested is based on need to build critical project elements and is 
well within capability to spend the requested funds as set out below:

  FISCAL YEAR 2008 WORK PLAN--FORT PECK RESERVATION RURAL WATER SYSTEM
                          (PUBLIC LAW 106-382)
------------------------------------------------------------------------
                                                               Aount
------------------------------------------------------------------------
Fort Peck Tribes:
    Water Treatment Plant:
        Phase I, Clear Well Wash Water Recover..........      $3,504,000
        Phase II, Main Treatment........................      22,475,000
    FP OM Buildings.....................................         765,000
                                                         ---------------
      Total.............................................      26,744,000
                                                         ===============
Dry Prairie:
    Branch Pipelines:
        St. Marie to Nashua and St. Marie to Opheim:
            Federal.....................................      10,107,000
            State and Local.............................       3,192,000
                                                         ---------------
              Total.....................................      13,299,000
                                                         ===============
              Total:
                  Federal...............................      36,851,000
                  State and Local.......................       3,192,000
------------------------------------------------------------------------

    The sponsor Tribes and Dry Prairie greatly appreciate the previous 
appropriations from the subcommittee that have permitted building the 
Missouri River intake, the critical water source, elements of the water 
treatment plant, the Culbertson to Medicine Lake Pipeline Project and 
branches serving rural users outside the Fort Peck Indian Reservation. 
Without funds to complete the water treatment plant, service to tribal 
users and communities has not been possible within the Fort Peck Indian 
Reservation.
    The request is comparable to the average annual appropriations 
needed to complete the project in fiscal year 2012 ($35,110,000), as 
provided by the authorizing legislation, but is within our capability 
to use:

------------------------------------------------------------------------
                                                        Fiscal Year 2008
------------------------------------------------------------------------
Total Federal Funds authorized (October 2005 $).......      $258,977,000
Federal Funds Expended Through fiscal year 2006.......       $48,318,000
Percent Complete......................................             18.66
Amount Remaining......................................      $210,659,000
Average Annual Required for fiscal year 2012 Finish          $35,110,000
 (Public Law 106-382).................................
Fiscal year 2008 Amount Requested.....................       $36,851,000
Years to Complete.....................................                 5
------------------------------------------------------------------------

    Note that cost indexing from last year due to inflation increased 
the cost of the project from $247 million to $259 million, an increase 
of $12 million. Increases in the level of appropriations are needed to 
outpace inflation.
Proposed Activities
    Public Law 106-382 (October 27, 2000) authorized this project, 
which includes all of the Fort Peck Indian Reservation in Montana and 
the Dry Prairie portion of the project outside the Reservation.

                      FORT PECK INDIAN RESERVATION

    On the Fort Peck Indian Reservation the Tribes have used 
appropriations from previous years to construct the Missouri River raw 
water intake, a critical feature of the regional water project. The raw 
water pump station has also been constructed, and the raw water 
pipeline between the Missouri River and the water treatment plant has 
been constructed to within 2 miles of the water treatment plant. The 
sludge lagoons at the water treatment plant are completed.
    The critical Missouri River water treatment plant will begin 
construction in spring 2007 and will use $15.3 million of funds on hand 
to build the first two phases of the facility. An additional $3.5 
million in fiscal year 2008 funds is needed to Complete Phase I and an 
additional $22.475 million is needed to complete the main water 
treatment plant process building in Phase II.
    This project was delayed a year due to the reduction in level of 
appropriations in fiscal year 2007 (from $16 million in fiscal year 
2006 to $6 million in fiscal year 2007) and the uncertainty of adequate 
funding to complete the project. The project was bid in fiscal year 
2006 as a complete unit, combining Phase I and Phase II, but bidders 
increased prices significantly to reflect the uncertainty of funding to 
complete the project. The project has now been separated into the two 
phases to accommodate the funding setback, but the separation into two 
phases has increased the total cost of the facility.
    The request for fiscal year 2008 does not provide for construction 
of essential pipelines from the water treatment plant to the 
communities of Poplar and Wolf Point. These are the principal core 
pipelines that extend east and west of the water treatment plant to 
serve the Fort Peck Indian Reservation and to eventually connect to Dry 
Prairie facilities on the east and west boundaries of the Reservation. 
The funds needed for the pipeline projects to Poplar and Wolf Point are 
$11.0 and $4.0 million, respectively, in addition to the fiscal year 
2008 funding request. These care critical elements of the work plan for 
fiscal year 2009.
    The pipeline project from the water treatment plant to Poplar will 
provide a replacement water supply for the community of Poplar and a 
rural section of the Fort Peck Indian Reservation contaminated by brine 
from oil drilling operations, which is the subject of EPA orders 
against the responsible oil company. There is urgency in completing the 
pipeline to Poplar before the advancing plume of contamination reaches 
existing community wells in Poplar. Projections of the date that 
contamination will reach the Poplar community wells are variable, but 
the anxiety of the Tribes' leadership and membership can be overcome by 
completing the water treatment plant and connecting the pipeline to 
Poplar in fiscal year 2009. This is a critical time frame for the 
Tribes. The staff and members of the subcommittee are urged to review 
this matter with the Tribes and Bureau of Reclamation to clarify the 
urgency of the completing necessary project facilities and alleviating 
the threat of contamination of the public water supply for the Tribes' 
headquarters community of Poplar.
    The Tribes will also use $765,000 for an administration, operation 
and maintenance building. The Bureau of Reclamation can confirm that 
the use of funds proposed for fiscal year 2008 is well within the 
project's capability to spend.

                              DRY PRAIRIE

    Dry Prairie has used previous appropriations to construct core 
pipelines and a booster pump station from the community of Culbertson 
to serve the communities of Froid and Medicine Lake. This project 
represents a significant portion of the main core pipeline for the 
eastern half of the Dry Prairie Project. Pipelines were sized to serve 
the area north of the Missouri River, south of the Canadian border and 
between the Fort Peck Indian Reservation and the North Dakota border.
    The project relies on interim water supplies. The regional water 
treatment plant will provide finished water when pipelines are 
constructed to the interconnection point for Dry Prairie between Poplar 
and Culbertson, scheduled for completion in fiscal year 2012. The 
project between Culbertson, Froid and Medicine Lake is in full 
operation and serves the last two mentioned communities.
    In fiscal year 2006 in first quarter fiscal year 2007, Dry Prairie 
built branch pipelines and connected nearly 200 rural services to the 
Culbertson to Medicine Lake pipeline in the eastern half of the Dry 
Prairie Project. Bainville, McCabe and Dane Valley residents can be 
served with the existing system capacity that is now constructed and in 
operation.
    The request for fiscal year 2008 funds of $10,107,000, supplemented 
by a non-Federal cost share of $3,192,000, will be used to begin 
construction of pipelines to rural services on the west side of the Dry 
Prairie project between the communities of St. Marie and Nashua. An 
existing water treatment plant owned by the Boeing Co., at the former 
Glasgow Air Force Base will provide an interim water supply to serve 
the west side project until the regional water treatment plant of the 
Tribes is completed and pipelines from Wolf Point to Nashua can be 
completed as scheduled in fiscal year 2012. The facilities constructed 
on the west side of the project are the same facilities required after 
connection of the regional water treatment plant. Therefore, no 
duplication of facilities or increases in costs are associated with the 
interim project.
Master Plan
    The project master plan is provided for review as an attachment. 
The request for fiscal year 2008 is shown in relation to the project 
components that remain to be completed by 2012.
Administration's Support
    The Tribes and Dry Prairie worked extremely well and closely with 
the Bureau of Reclamation prior to and following the authorization of 
this project in fiscal year 2000. The Bureau of Reclamation has heavily 
reviewed and commented on the Final Engineering Report, and all 
comments were incorporated into the report and agreement was reached on 
final presentation. OMB reviewed the Final Engineering Report prior to 
its submission to Congress in the final step of the approval process. 
The Commissioner, Regional and Area Offices of the Bureau of 
Reclamation have been consistently in full agreement with the need, 
scope, total costs, and the ability to pay analysis that supported the 
Federal and non-Federal cost shares. There have been no areas of 
disagreement or controversy in the formulation of the project.
    The Bureau of Reclamation collaborated with the Tribes and Dry 
Prairie to conduct and complete value engineering investigations of the 
Final Engineering Report (planning), the Culbertson to Medicine Lake 
pipeline (design), the Poplar to Big Muddy River pipeline (design), the 
Missouri River intake (design) and on the regional water treatment 
plant (design). Each of these considerable efforts has been directed at 
ways to save construction and future operation, maintenance and 
replacement costs as planning and design proceeded. Agreement with 
Reclamation has been reached in all value engineering sessions on steps 
to take to save Federal and non-Federal costs in the project.
    The Bureau of Reclamation conducted independent review of the final 
plans and specifications for the Missouri River raw water intake, the 
regional water treatment plant and the Culbertson to Medicine Lake 
Project. The agency participated heavily during the construction phases 
of those projects and concurred in all aspects of construction from 
bidding through the completion of construction. (The regional water 
treatment plant has not yet been constructed).
    Cooperative agreements have been developed and executed from the 
beginning phases to date between the Bureau of Reclamation and the 
Tribes and between Bureau of Reclamation and Dry Prairie. Those 
cooperative agreements carefully set out goals, standards and 
responsibilities of the parties for planning, design and construction. 
All plans and specifications are subject to levels of review by the 
Bureau of Reclamation pursuant to the cooperative agreements. The 
sponsors do not have the power to undertake activities that are not 
subject to oversight and approval by the Bureau of Reclamation. Each 
year the Tribes and Dry Prairie, in accordance with the cooperative 
agreements, develop a work plan setting out the planning, design and 
construction activities and the allocation of funding to be utilized on 
each project feature.
    Clearly, the Fort Peck Reservation Rural Water System is well 
supported by the Bureau of Reclamation. Congress authorized the project 
with a plan formulated in full cooperation and collaboration with the 
Bureau of Reclamation, and major project features are under 
construction with considerable oversight by the agency.
                                 ______
                                 

                          DEPARTMENT OF ENERGY

      Prepared Statement of the State Teachers' Retirement System

Summary
    Acting pursuant to congressional mandate, and in order to maximize 
the revenues for the Federal taxpayer from the sale of the Elk Hills 
Naval Petroleum Reserve by removing the cloud of the State of 
California's claims, the Federal Government reached a settlement with 
the State in advance of the sale. The State waived its rights to the 
Reserve in exchange for fair compensation in installments stretched out 
over an extended period of time.
    The State respectfully requests an appropriation of at least $9.7 
million in the subcommittee's bill for fiscal year 2008, in order to 
meet the Federal Government's obligations to the State under the 
Settlement Agreement.

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

State's Claims Settled, as Congress Had Directed
    In the National Defense Authorization Act for Fiscal Year 1996 
(Public Law 104-106) that mandated the sale of the Elk Hills Reserve to 
private industry, Congress reserved 9 percent of the net sales proceeds 
in an escrow fund to provide compensation to California for its claims 
to the State school lands located in the Reserve.
    In addition, in the Act Congress directed the Secretary of Energy 
on behalf of the Federal Government to ``offer to settle all claims of 
the State of California . . . in order to provide proper compensation 
for the State's claims.'' (Public Law 104-106,  3415). The Secretary 
was required by Congress to ``base the amount of the offered settlement 
payment from the contingent fund on the fair value for the State's 
claims, including the mineral estate, not to exceed the amount reserved 
in the contingent fund.'' (Id.)
    Over the year that followed enactment of the Defense Authorization 
Act mandating the sale of Elk Hills, the Federal Government and the 
State engaged in vigorous and extended negotiations over a possible 
settlement. Finally, on October 10, 1996 a settlement was reached, and 
a written Settlement Agreement was entered into between the United 
States and the State, signed by the Secretary of Energy and the 
Governor of California, under which the State would receive 9 percent 
of the sales proceeds in annual installments over an extended period.
    The Settlement Agreement is fair to both sides, providing proper 
compensation to the State and its teachers for their State school lands 
and enabling the Federal Government to maximize the sales revenues 
realized for the Federal taxpayer by removing the threat of the State's 
claims in advance of the sale.

Federal Revenues Maximized by Removing Cloud of State's Claim in 
        Advance of the Sale
    The State entered into a binding waiver of rights against the 
purchaser in advance of the bidding for Elk Hills by private 
purchasers, thereby removing the cloud over title being offered to the 
purchaser, prohibiting the State from enjoining or otherwise 
interfering with the sale, and removing the purchaser's exposure to 
treble damages for conversion under State law. In addition, the State 
waived equitable claims to revenues from production for periods prior 
to the sale. The Reserve thereafter was sold for a winning bid of $3.53 
billion in cash, a sales price that substantially exceeded earlier 
estimates.

The Money Is There to Pay the State
    The funds necessary to compensate the State have been collected 
from the sales proceeds remitted by the private purchaser of Elk Hills 
and are now being held in the Elk Hills School Lands Fund for the 
express purpose of compensating the State. Taking into account the 1 
percent government-wide rescission in the fiscal year 2006 Defense 
Appropriations Act, the Elk Hills School Lands Fund should have a 
positive balance of at least $18.18 million.

Congress Should Appropriate $9.7 Million for the Fiscal Year 2008 
        Installment of Elk Hills Compensation
    As noted above, the State's 9 percent share of the adjusted Elk 
Hills sales price of $3.53 billion is $317.70 million. To date, 
Congress has appropriated seven installments of $36 million and one 
installment of $48 million that was reduced to $47.52 million by the 1 
percent across-the-board rescission under the fiscal year 2006 Defense 
Appropriations Act, for total appropriations to date of $299.52 million 
of Elk Hills compensation owed to the State. Accordingly, the Elk Hills 
School Lands Fund should have a positive balance of at least $18.18 
million.
    We understand that Department of Energy personnel have proffered 3 
purported grounds for suspending further payments of Elk Hills 
compensation to the State. Each of these is a ``red herring.''
    Red Herring No. 1: Finalization of respective equity shares of 
Federal Government and ChevronTexaco as selling co-owners of Elk Hills 
oil field still not completed.--The President's fiscal year 2008 budget 
request says that ``the timing and levels of any future budget request 
[for Elk Hills compensation] are dependent on the schedule and results 
of the equity finalization process'' between the Federal Government and 
ChevronTexaco to determine the relative production over the years from 
their respective tracts in the Elk Hills field (Fiscal Year 2008 Budget 
Appendix, at p. 373). But DOE already has held back $67 million, 
including $6.03 million from the State's share, to protect the Federal 
Government's interests in a ``worst case scenario'' for this equity 
process, which is in its final stages after nearly a decade. The State 
has agreed to a ``hold-back'' of that amount to protect the Federal 
Government's interest. This reduces the available balance in the Elk 
Hills School Lands Fund to $12.15 million. Remaining uncertainty in the 
equity process thus provides no basis for withholding further payment 
of the State's Elk Hills compensation.
    Red Herring No. 2: No payment can be made to the State because of 
pending litigation between ChevronTexaco and DOE.--DOE has pointed to 
pending litigation brought by ChevronTexaco against DOE in the U.S. 
Court of Federal Claims (Docket No. 04-1365C) as a reason to suspend 
further payments to the State. This litigation alleges DOE personnel 
committed misconduct in the equity finalization process by having 
improper ex parte contacts and having the same DOE staff serve as both 
advocate for DOE's position and advisor preparing the decision 
documents for the decisionmaker. However, the California State Attorney 
General has analyzed this litigation and advised that this litigation 
is a claim for money damages for DOE staff misconduct that has no 
effect on the Federal Government's equity share, and so there is no 
effect on the State's share of compensation. (See Memorandum of the 
California State Attorney General, dated May 16, 2006). Indeed, under 
the governing agreement between DOE and Chevron, Chevron had waived any 
right to contest the final equity determination in court. Hence this 
litigation provides no basis for withholding the rest of the State's 
compensation.
    Red Herring No. 3: No payment can be made to the State because the 
State's share must be reduced by the equity finalization costs and 
environmental remediation costs and the final amount of such costs is 
not yet known.--The State's share of compensation is properly reduced 
by the ``direct costs of sale'' as required by Congress. Since the sale 
took place nearly a decade ago, those costs are fixed and known. The 
State has agreed to bear its share of these sales expenses. However, 
DOE is seeking to charge against the State's share two additional 
categories of costs--costs of determining the equity ownership and 
environmental remediation--that constitute ongoing costs of operating 
the oil field, not sales expenses. The California State Attorney 
General advises that these do not properly constitute sales expenses 
chargeable against the State's share.
    More specifically, the Settlement Agreement between the Federal 
Government and the State provides that the Federal Government shall pay 
the State ``nine percent of the proceeds from the sale of the Federal 
Elk Hills Interests that remain after deducting from the sales proceeds 
the costs incurred to conduct such sale.'' This reflects the 
congressional direction that, ``In exchange for relinquishing its 
claim, the State will receive seven [nine in the final legislation] 
percent of the gross sales proceeds from the sale of the Reserve that 
remain after the direct expenses of the sale are taken into account.'' 
(House Rept. No. 104-131, Defense Authorization Act for Fiscal Year 
1996, Public Law 104-106).
    The State agrees that the $27.13 million incurred for appraisals, 
accounting expenses, reserves report, and brokers' commission are 
appropriate sales expenses. (See Letter of the California Attorney 
General to DOE, dated February 10, 2005). Accordingly, the State's 9 
percent share of these proper sales expenses reduces the available 
balance of the Elk Hills School Lands Fund by $2.44 million to $9.7 
million.
    Costs of conducting the equity adjustment are properly viewed as 
ongoing costs incurred due to the joint operation of the Elk Hills oil 
field by the Federal Government and ChevronTexaco, since the equity 
adjustment already was required under their joint operating agreement 
and related to pre-sale production revenues. Similarly, costs of 
environmental remediation of the Elk Hills field was a cost 
attributable to the prior operation of the field, which created any 
environmental problems that exist. The ongoing operational nature of 
this cost is underscored by the fact that the Federal Government is 
currently engaged in the phased environmental remediation of a Naval 
Petroleum Reserve that it is not selling--NPR-3 (Teapot Dome), as 
evidenced by its fiscal year 2006 budget request.

Conclusion
    Therefore, of the current Elk Hills School Lands Fund balance of 
$18.18 million, taking into account the ``hold-back'' for worst case 
scenario under equity finalization and deducting the appropriate direct 
costs of conducting the sale, the State respectfully requests the 
appropriation of at least $9.7 million for Elk Hills compensation in 
the subcommittee's bill for the fiscal year 2008 installment of 
compensation, in order to meet the Federal Government's obligations to 
the State under the Settlement Agreement.
                                 ______
                                 
  Prepared Statement of the Consortium for Fossil Fuel Science (CFFS)

 PRODUCTION OF TRANSPORTATION FUELS FROM COAL AND BIOMASS WITH REDUCED 
                        CARBON DIOXIDE EMISSIONS

    Chairman Dorgan and members of the subcommittee: We request $3 
million in funding for a congressionally directed project in the Fuels 
Program of the Office of Fossil Energy budget to initiate a program of 
research to produce transportation fuels from coal and biomass. The 
focus of this program will be to minimize the amount of carbon dioxide 
emitted by both the fuel conversion process and by fuel utilization to 
achieve overall emissions comparable to or less than emissions 
resulting from the production and utilization of similar transportation 
fuels from petroleum.

                                OVERVIEW

    Traditional petroleum fuels and vehicles will remain our dominant 
transportation mode for at least the next 20 years. The United States 
imports over 10 million barrels of oil per day at a cost exceeding $220 
billion/year, most of it from unstable regions of the world. Expert 
testimony has been presented to the Congress showing that the true cost 
of imported petroleum goes far beyond the price of a barrel of crude 
oil, with some estimates reaching to $825 billion for 2006. Increasing 
global demand, coupled with an expected peaking in the world oil 
supply, will cause shortages and markedly increased prices in the 
future, which could lead to economic recessions due to ``oil shock.''
    It is essential that we produce transportation fuels from our own 
national resources, especially focusing on our most abundant energy 
resource, coal. It is equally essential, however, that we do so without 
harming the environment. The National Research Center for Coal and 
Energy (NRCCE, West Virginia University) and the Consortium for Fossil 
Fuel Science (CFFS, University of Kentucky) have formed an integrated 
team of fuels experts from five universities (West Virginia University, 
University of Kentucky, University of Pittsburgh, University of Utah, 
and Auburn University) to conduct a basic research program focused on 
producing Fischer-Tropsch fuels using mixtures of coal and biomass as 
the feedstock. We believe that costs can be reduced, a superior 
transportation fuel can be produced, and carbon emissions can be 
minimized through such research.
    The NRCCE and the CFFS have extensive experience and broad 
expertise in research on the conversion of coal into clean liquid 
transportation fuels and the conversion of coal into hydrogen. We have 
made significant breakthroughs in such areas as: (1) catalysis of coal 
conversion reactions; (2) C1 chemistry processes (including Fischer-
Tropsch (F-T) synthesis) to produce transportation fuels from coal-
derived syngas; (3) co-processing of coal with waste materials, 
including plastic, rubber, and cellulose (biomass); (4) development of 
novel processes to produce hydrogen from fossil fuels; and, (5) 
environmental research.
    We are now proposing a research program focused on development of 
processes that use biomass as a co-feed with coal for the production of 
clean transportation fuels with reduced carbon emissions.
    The motivations for this approach include: First, co-feeding coal 
with biomass will extend the lifetime of the Nation's coal resources; 
second, we can make use of biomass wastes that are not currently 
utilized; and, third, combined coal and biomass processes have the 
potential to yield a significant net reduction in carbon dioxide 
emissions compared to coal-only processes.
    Recent studies indicate that the total carbon dioxide emissions 
from a liquid fuel produced by F-T synthesis of syngas derived from 
mixtures of coal and biomass may be reduced by as much as 60-80 percent 
relative to those from the same fuel produced from coal alone.

                          GOALS OF THE PROGRAM

    The primary goal of the NRCCE-CFFS research program is to develop 
technology that will enable the United States to produce clean liquid 
transportation fuel from its largest domestic energy resource, coal, in 
a manner that is both sustainable and environmentally friendly. 
Incorporating biomass into the feedstock can help to achieve these 
objectives. A short summary of more specific goals is given below.
  --Investigate the pyrolysis and gasification of coal-biomass mixtures 
        to determine the role that hydrogen from biomass can play in 
        the production of syngas with the optimum composition for the 
        production of liquid fuels (gasoline, diesel fuel, and jet 
        fuel). Improvements in the gasification step will have a great 
        impact on the ultimate cost of the liquid fuels produced from 
        syngas derived from coal-biomass mixtures, since gasification 
        costs are 60-70 percent of the total cost.
  --Develop catalysts and thermochemical processes that will yield 
        transportation fuel products from coal-biomass mixtures with 
        properties better than those produced from petroleum, while 
        reducing the total carbon dioxide emissions from both 
        production and use of the fuels.
  --Develop computational models to simulate catalytic chemical 
        reactions by quantum mechanics, thereby reducing the need for 
        experimental testing and decreasing the cost of the on-going 
        research program.
  --Utilize systems analysis modeling to simulate plant performance and 
        cost factors in order to determine whether or not processes 
        developed in the laboratory are commercially viable.
  --Produce hydrogen and synthetic natural gas from coal-biomass 
        mixtures while reducing the carbon dioxide footprint.
  --Establish a more active collaboration with scientists at the 
        National Energy Technology Laboratory (NETL) who are focused on 
        this and related areas of research. Develop an exchange program 
        in which professors and graduate students from the five 
        participating universities conduct research at NETL and NETL 
        scientists have access to facilities and expertise available at 
        the universities.
    Legislation introduced in both houses of the 110th Congress 
includes tax credits and loan guarantees to hasten the deployment of 
plants which produce alternative fuels from coal. Widespread deployment 
of such plants will require a large number of fuel scientists and 
engineers. An ancillary benefit of our program will include educating 
the U.S.-based human resource pool needed to meet personnel demands for 
a coal-to-liquids industry.

                                SUMMARY

    We request your support for $3 million in funding for this program 
to the National Research Center for Coal and Energy (West Virginia 
University) from the Fossil Energy budget for fiscal year 2008. The 
funding will be shared with the other four CFFS universities (Kentucky, 
Pittsburgh, Auburn, and Utah) to support the first year of a proposed 
three-year research program for producing liquid transportation fuels 
from coal and biomass. The NRCCE-CFFS consortium will provide $750,000 
in cost-sharing.
    Achievement of our program goals will accelerate the development of 
a domestic industry for the production of clean liquid transportation 
fuels using our own natural resources, thereby strengthening the energy 
and economic security of our Nation. An alternative fuels industry will 
also provide many new jobs in the mining industry, fuel synthesis 
plants, and biomass processing.
    Thank you for the opportunity to offer testimony to the 
subcommittee.
                                 ______
                                 
     Prepared Statement of the Coalition of Northeastern Governors

    The Coalition of Northeastern Governors (CONEG) is pleased to 
provide this testimony to the Senate Subcommittee on Energy and Water 
Development regarding fiscal year 2008 appropriations for the Energy 
Conservation and Renewable Energy programs of the U.S. Department of 
Energy (DOE). The Governors recognize the difficult funding decisions 
which confront the subcommittee this year. We appreciate the 
subcommittee's continued support for energy efficiency, energy 
conservation, and renewable energy programs--all of which promote sound 
energy management and improve the Nation's energy security. Consistent 
with this thinking, the CONEG Governors request that funding for the 
State Energy Program be increased to $74 million, and funding for the 
Weatherization Assistance Program be provided at a level of $300 
million in fiscal year 2008. The Governors support the President's 
request to fund the Northeast Home Heating Oil Reserve at $7 million 
and the Energy Information Administration at $105 million in fiscal 
year 2008. At this time of heightened interest in expanded use of 
indigenous renewable energy resources, we request that the subcommittee 
require the Department of Energy to again provide modest funding of 
$7.5 million to continue the critical networks and market development 
work of the National Biomass Partnership (previously known as the 
Regional Biomass Energy Program).
    These very successful energy programs take on new significance as 
the Nation strives to strengthen the security and reliability of 
domestic energy supplies and to reduce dependence on foreign sources of 
energy. Energy efficiency, conservation and renewable energy, which 
offer near-term opportunities and results, are important complements to 
longer-term Federal investments in domestic production and emerging 
technologies. Federal resources for research and program implementation 
must also emphasize programs that can bring alternative energy and 
energy saving technologies quickly to the marketplace. The State Energy 
Program, the Weatherization Assistance Program, and the Regional 
Biomass Partnership provide established networks and Federal-State-
local government and private sector partnerships which can achieve 
timely energy savings and encourage renewable energy development. 
Modest Federal investment in these programs provides substantial 
energy, economic and environmental returns to the Nation, leveraging 
additional State and private sector investment, and contributing to 
sound energy management. These resources are undisputed clear winners 
when compared to conventional energy technologies.
    State Energy Program (SEP).--The State Energy Program (SEP) is the 
major State-Federal partnership program addressing energy efficiency 
and conservation in all sectors of the economy. It assists States' work 
in support of the national goals of greater energy efficiency, reduced 
energy costs, and development of alternative and renewable energy 
resources. The State Energy Program also helps States improve the 
security of the energy infrastructure and prepare for natural 
disasters. SEP programs increase the awareness of the opportunities 
available in States to improve energy efficiency, reduce energy costs, 
create jobs, and diversify energy use. Their transformative effects in 
the market have been repeatedly demonstrated and proven.
    Working with DOE, States tailor their renewable energy and energy 
efficiency programs in a way that makes the most sense for their market 
opportunities, thus maximizing the effectiveness of the program's 
resources. For example, the Northeast States have used SEP supported 
projects to provide technical assistance and financial incentives that 
have spurred building designers and owners to adopt energy-efficient 
design features in the commercial, institutional, multifamily, and 
industrial sectors. Our States have also used SEP resources in programs 
that monitor and enhance the reliability of the energy supply and 
delivery infrastructures, support the timely updating of energy 
emergency preparedness plans, and promote the use of alternative fuels 
in the transportation sector and other initiatives that will lead to a 
lowering of fuel consumption and cleaner air.
    The modest Federal funds provided to the SEP are an efficient 
Federal investment, as they are leveraged by non-federal public and 
private sources. According to the most recent data from the Department 
of Energy, for every $1 of Federal investment, $3.58 is leveraged by 
State and local governments, and private companies and results in $7.23 
in reduced energy bills. In its evaluation of the program, Oak Ridge 
National Laboratory estimated that the program results in annual cost 
savings of $256 million while providing environmental and public health 
benefits through reduced energy use and emission reductions.
    Weatherization Assistance Program (WAP).--Weatherization is taking 
on an increased importance as an immediate, effective tool to manage 
energy use, particularly at a time of high energy prices. Through a 
network of more than 900 local weatherization service providers, the 
Weatherization Assistance Program (WAP) improves the energy efficiency 
of more than 100,000 low-income dwellings a year, thereby reducing the 
home energy bills of the Nation's most vulnerable citizens. Increased 
and consistent funding is key to the effectiveness of this program that 
invests in training weatherization personnel.
    While an average household pays roughly 2.7 percent of annual 
income on home energy, low income households pay more than four times 
that amount. Some elderly recipients who live on fixed incomes pay as 
much as 35 percent of their annual incomes for energy bills. WAP 
provides immediate and lasting benefits and reduces the energy burden 
of low-income families by improving energy efficiency and permanently 
reducing home energy bills.
    Weatherization can reduce, on average, heating bills by 31 percent 
and overall energy bills by $358 per year at current prices through 
energy efficiency measures that address a home's heating and cooling 
systems, its electrical system, and electricity consuming appliances. 
In terms of energy savings, weatherization clients save $1.83 for every 
$1 of DOE investment, according to recent DOE information. 
Weatherization services can also improve the safety of a home by 
identifying carbon monoxide hazards from old boilers, furnaces and 
water heaters, and fire hazards from outdated electrical equipment and 
wiring.
    The WAP also provides numerous non-energy benefits. Oak Ridge 
National Laboratory has concluded that for every $1 of DOE investment, 
there are non-energy benefits worth $1.88, and the WAP contributes to 
more than 8,000 jobs nationwide. In addition, the decreased energy use 
resulting from weatherization measures also provides environmental 
benefits through decreased carbon dioxide emissions.
    Renewable Energy and the National Biomass Partnership.--Renewable 
energy plays a vital role in meeting the Nation's goal of reduced 
reliance on imported fossil fuels, a more balanced, diverse energy 
resource mix, and reduction of greenhouse gases. Modest but timely 
support for research and commercialization opportunities for near-term 
bioenergy technologies is a vital component in meeting that goal. Using 
government funding to support private market development and technology 
commercialization for biofuels offers one of the most promising hopes 
for reducing the Nation's energy vulnerabilities. States contribute 
significant resources to support the development of biomass fuels, 
technology, and infrastructure. However, State funds are not available 
for coordination of these activities across the Nation.
    The National Biomass Partnership (formerly known as the Regional 
Biomass Energy Program) brings together varied networks of State, 
private, and Federal bioenergy activities, and is a critical link in 
the chain of research, resource production and technology 
commercialization. The Partnership has successfully contributed to the 
adoption of State policies supportive of bioenergy resource and 
technology development, public awareness of the benefits and uses of 
bioenergy, greater leveraging of Federal funding and State resources, 
and increased intensity of biomass use. For example, according to a 
DOE-directed program review, the Northeast Regional Biomass Partnership 
(NRBP) directly influenced $24 million in biomass investments--69 
percent of the overall biomass investment made in the region in 2003. 
It helped create biomass working groups in nine northeast States, which 
along with the NRBP personnel, provided bioenergy education and 
training to nearly 3,000 people in the region--and greater 
participation in State-developed bioenergy policies and programs.
    Northeast Home Heating Oil Reserve.--The Nation's heightened 
emphasis on energy security places renewed importance on the Northeast 
Home Heating Oil Reserve. The Northeast, with its reliance upon 
imported fuels for both residential and commercial heating, is 
particularly vulnerable to the effects of supply disruptions and price 
volatility. The Northeast region of the country is literally at the end 
of the energy product pipeline. Any disruption along the delivery 
infrastructure anywhere in the country negatively affects the 
Northeast. The Reserve provides an important buffer to ensure that the 
States will have prompt access to immediate supplies in the event of a 
supply emergency.
    Energy Information Administration (EIA).--EIA provides timely, 
reliable and credible information and analysis on the energy produced, 
imported and consumed in the United States. At this time of volatile 
global energy markets and renewed focus on the safety and security of 
the Nation's energy supply, the information provided by the Energy 
Information Administration (EIA) is a vital tool in keeping energy 
markets functioning efficiently. In addition, States rely on EIA data 
as the core of their information for energy emergency planning. 
Increased funding in fiscal year 2008 will help ensure that EIA can 
continue to collect, analyze and make available this vital data.
    In conclusion, the Coalition of Northeastern Governors request that 
you provide $74 million for the State Energy Program, $300 million for 
the Weatherization Assistance Program and $7.5 million for the National 
Biomass Partnership in fiscal year 2008. These programs promote sound 
energy management by encourage development of alternative energy 
resources and helping manage the Nation's energy use. The Governors 
also request $7 million for the Northeast Home Heating Oil Reserve and 
$105 million for the Energy Information Administration in fiscal year 
2008. CONEG welcomes the opportunity to continue a dialogue on these 
important matters as Congress and the administration consider budget 
and energy project and policy initiatives.
                                 ______
                                 
                  Prepared Statement of Cummins, Inc.

    Cummins Inc. is pleased to provide the following statement for the 
record regarding fiscal year 2008 funding for programs in the 
Department of Energy's Offices of Energy Efficiency and Renewable 
Energy; Electricity Delivery and Energy Reliability; and Fossil Energy. 
Cummins Inc., headquartered in Columbus, Indiana, is a corporation of 
complementary business units that design, manufacture, distribute and 
service engines and related technologies, including fuel systems, 
controls, air handling, filtration, emission solutions and electrical 
power generation systems. The funding requests outlined below are 
critically important to Cummins' research and development efforts and 
represent a sound Federal investment towards a cleaner environment and 
improved energy efficiency for our Nation. We request that the 
committee fund the programs as identified below.

            OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY

Office of FreedomCAR and Vehicle Technologies/Vehicle Technologies
    Advanced Combustion Engine R&D.--Cummins recommends an increase in 
the administration's request of $34.55 million by $15.20 million to 
bring the program total to $49.75 million in fiscal year 2008. This 
program includes two important research areas--the Heavy Truck Engine 
and the Waste Heat Recovery programs. Both of these relate to heavy 
duty diesel engines and are significantly under-funded in the 
administration's fiscal year 2008 request. Formerly separate programs, 
these research areas were folded into the umbrella Advanced Combustion 
Engine R&D program in this year's request. The Heavy Truck Engine 
portion of the administration's request was reduced to $3.2 million for 
fiscal year 2008, down from $12.2 million in fiscal year 2007 and 
fiscal year 2006. The requested increase would allow for funding for 
heavy truck engine research of $15.4 million in fiscal year 2008. The 
Waste Heat Recovery program of the administration's request was reduced 
to zero, down from $4 million in fiscal year 2007 and fiscal year 2006. 
The requested increase would allow $3 million for waste heat recovery 
research in fiscal year 2008. These programs are critically important 
to the heavy duty diesel engine industry efforts to meet stringent 
emissions requirements through better understanding of combustion 
technologies. Heavy truck engines consume nearly 25 percent of all 
surface transportation fuels used in the United States, and the Heavy 
Truck Engine program is critical to engine manufacturers' efforts to 
increase on-highway fuel efficiency while meeting EPA's near zero 2010 
emissions regulations. Significant technology hurdles remain in the 
areas of engine efficiency improvements, co-fuels development, 
aftertreatment requirements and subsystem durability, on-board 
diagnostics and fuel penalty minimization due to the use of 
aftertreatment. Hybrid technologies are also becoming attractive for 
heavy duty engine applications, warranting additional research effort. 
The Waste Heat Recovery program is critical because over 50 percent of 
fuel energy is lost in diesel engines through wasted heat in exhaust, 
lubricants and coolants. This program is focused on identifying and 
developing innovative energy recovery technologies, such as 
thermoelectric, turbo-compounding and Rankine cycle technologies. It 
seeks to improve truck energy efficiency by 10 percent through better 
waste heat recovery technologies.
Office of FreedomCAR and Vehicle Technologies/Fuel Technologies
    Non-Petroleum Based Fuels and Lubricants.--Cummins recommends an 
increase in the administration's request of $6.9 million by $3.0 
million to bring the program total to $9.9 million in fiscal year 2008. 
This program funds research to better understand renewable (such as 
biodiesel and ethanol) and synthetic fuel properties and their effect 
on engine system performance when blended with petroleum fuels. While 
biodiesel fuel blends are becoming acceptable in the marketplace, their 
effect on various engine components, including fuel systems, lubricants 
and aftertreatment systems, is unknown. Current fuel filters are less 
effective for separating emulsified water in biodiesel blends and are 
likely to cause problems in the field. The increase in funding will 
help develop efficient techniques to remove water from biodiesel fuel 
blends, better understand biodiesel fuel effects on particulate 
filters, and evaluate biodiesel and lubricant interactions.
    Advanced Petroleum Based Fuels (APBF).--Cummins recommends an 
increase in the Administration's request of $6.5 million by $1.0 
million for a program total of $7.5 million for fiscal year 2008. This 
requested increase would allow additional study of fuel properties to 
enable heavy duty diesel engines to operate in the most efficient mode 
while meeting future emissions standards. Engine companies are required 
to prove emissions compliance for over 435,000 miles of useful engine 
life. The goal of this program is to study the impacts of fuel and lube 
oil sulfur content on durability and reliability of particulate 
aftertreatment systems.
Office of FreedomCAR and Vehicle Technologies/Materials Technologies
    Propulsion Materials Technology--Heavy Vehicle Propulsion Materials 
Program.--Cummins recommends an increase in the administration's 
request of $4.8 million by $1.0 million to bring the program total to 
$5.8 million in fiscal year 2008. This program supports research and 
development of next generation materials to enable diesel engine 
efficiency improvements, improved reliability and reduced 
aftertreatment system costs. Traditional engine materials may not be 
adequate for the next generation of advanced combustion concepts, such 
as low temperature combustion (LTC). High pressure injection fuel 
systems are needed to support these combustion technologies. Smaller 
hole size and clearance in emerging fuel systems requires new material 
capabilities to remove submicron particles from the fuel. Further 
research is also needed on advanced materials to mitigate cost issues 
relating to the use of precious metals required for advanced nitrogen 
oxides (NOX) reduction technologies. Increased funding for 
the program will support studies on a range of advanced materials 
technologies, including lightweight high strength materials for engine 
components, composites, catalysts and soot oxidation, filtration media 
modeling and nano-fiber filter technologies.
Office of Hydrogen, Fuel Cells and Infrastructure Program/Hydrogen 
        Technology
    Transportation Fuel Cell Systems.--Cummins requests that the 
committee support the administration's requested amount of $8.0 million 
for fiscal year 2008. As designed, the program provides support for R&D 
and system integration of energy efficient auxiliary power unit (APU) 
technologies for mobile or off-road applications. The goal of this 
effort is the demonstration of a solid oxide fuel cell (SOFC) based APU 
for Class 7/8 on-highway diesel trucks. Reduction of diesel fuel 
consumed in the idling of large diesel trucks is widely recognized as 
an important element in reducing exhaust emissions from heavy trucks. 
It would also reduce our Nation's overall dependence on foreign sources 
of oil. It is estimated that a potential reduction of up to 800 million 
gallons of diesel fuel is possible annually if SOFC systems can be used 
to provide the heating, cooling and electrical needs of truck fleets in 
lieu of idling. In 2005, Cummins Power Generation and our partner, 
International Truck and Engine Company, conducted analysis and design 
work to accurately define the requirements for such an APU, and we 
believe the goal is achievable. Increased funding in fiscal year 2008 
would allow the demonstration of a practical SOFC prototype that is 
integrated on a typical truck platform.
         office of electricity delivery and energy reliability
Research and Development/Distributed Energy Resources
    Distributed Generation Technology Development--Advanced 
Reciprocating Engine Systems (ARES).--Cummins recommends an increase in 
the administration's request of $0 million by $1.5 million to bring the 
program total to $1.5 million in fiscal year 2008. The objective of 
this program is to develop high efficiency, low emissions and cost 
effective technologies for stationary natural gas systems between 500-
6,500 kw by the year 2010. Natural gas-fueled reciprocating engine 
power plants are preferred for reliability, low operating costs and 
point of use power generation. Technologies sponsored by the ARES 
program have demonstrated 44 percent engine efficiency (an increase 
from the 32-37 percent baseline) and higher power densities than 
current products, with an expected reduction in life cycle costs and 
carbon dioxide (CO2) emissions. Improved combustion, air 
handling and controls developments have been successfully implemented 
in a field test engine and genset. Further technical challenges include 
combustion development for system efficiency, nitrogen oxides 
(NOX) reductions, advanced sensors and controls, hardware 
durability and lower life cycle costs. The development of distributed 
power generation supports national energy security needs, improves 
protection of critical infrastructure to address homeland security 
concerns, and decreases dependence on the national electrical grid 
system through point of use energy production.

                        OFFICE OF FOSSIL ENERGY

Office of Clean Coal and Natural Gas Power Systems/Fuel Cell Research 
        and Development
    Innovative Concepts--Solid State Energy Conversion Alliance 
(SECA).--Cummins requests that the committee support the 
administration's request of $62.0 million for fiscal year 2008. The 
goal of the SECA project is the development of a commercially viable 3-
10 kw solid oxide fuel cell (SOFC) module that can be mass-produced in 
modular form for RV, commercial mobile and telecommunications markets. 
The modular nature of SOFCs makes them adaptable to a wide variety of 
stationary and mobile applications. SOFCs can play a key role in 
securing the Nation's energy future by providing efficient, 
environmentally sound electrical energy from fossil fuels or hydrogen. 
A Cummins prototype successfully completed Phase 1 of the SECA program, 
operating for approximately 2,000 hours at Cummins Power Generation in 
Minneapolis, and meeting (pending DOE confirmation) SECA targets for 
durability and cost. Phase 2 of the program will bring a critical 
transition from current fuels used with SOFC (LPG or natural gas) to 
diesel fuel for mobile applications including RV, marine and truck 
auxiliary power units (APUs). The program is moving forward toward 
development, leading to possible commercial production in 2013. This 
program combines the efforts of the DOE national laboratories, private 
industry and universities. Federal funding is critical to support the 
research needed to keep this technology moving from the laboratory to 
commercial viability.
    Thank you for this opportunity to present our views on these 
programs which we believe are of great importance to our Nation's 
energy and economic security as well as continued environmental 
progress. These programs are critical to needed advancements in the 
transportation and power generation sectors.
                                 ______
                                 
             Prepared Statement of the University of Tulsa

    Dear Respected Members, Senate Appropriations Subcommittee on 
Energy and Water: I respectfully ask for the continuation of the 
funding of the project titled ``Development of Next Generation 
Multiphase Flow Prediction Tools'' for the fiscal year of 2008. This 
project was selected in response to DOE's Oil Exploration and 
Production solicitation DE-PS26-02NT15375-02, Public Resources Invested 
in Management and Extraction (PRIME), July 15, 2002. The project 
started on June 1, 2003 and scheduled to be completed by August 31, 
2008. The anticipated DOE contribution for 2008 is $107,940. This 
funding is significantly leveraged by The University of Tulsa ($151,355 
(58 percent of total cost)). In the rest of my testimony I would like 
to emphasize the importance and results of the project.
    The ``easy'' oil and natural gas finds are becoming a rarity as we 
depleted them posing a significant problem of energy shortage. Oil and 
gas industry, academia and government are working to improve enabling 
technology to facilitate more production from existing resources and 
exploitation of ``difficult to produce resources including ultra deep 
water resources, heavy oils, and unconventional natural gases.''
    The developments of fields in deep and ultra-deep waters (5,000 ft 
and more) are becoming more common. It is inevitable that production 
systems will operate under multiphase flow conditions (simultaneous 
flow of gas-oil-and water possibly along with sand, hydrates (ice-like 
structures, and waxes)). Recovery of resources from deep waters poses 
special challenges and requires accurate multi-phase-flow predictive 
tools for several applications, including the design and diagnostics of 
the production systems, separation of phases in horizontal wells, and 
multiphase separation. The available tools cannot properly account for 
the three-phase flow. At best, they lump oil and water phases as a 
single liquid phase, assuming homogeneous liquid flow. Therefore, the 
development of revolutionary next-generation multiphase flow predictive 
tools is needed.
    Multiphase flow prediction is essential for every phase of 
hydrocarbon recovery, from design to operation. Recovery from deep 
waters poses special challenges and requires accurate multiphase-flow 
predictive tools for several applications, including the design and 
diagnostics of production systems, separation of phases in horizontal 
wells, and multiphase separation. The overall objective of the proposed 
work is to develop new technologies that will enable future 
exploitation of hydrocarbons from deep waters through the development 
of revolutionary next-generation predictive tools for the simultaneous 
flow of gas-oil-water in pipes.
    The novel software tool developed in this project help design 
proper production and transportation systems. There are many impacts of 
the new tool being developed. For the industry, it is imperative to 
have accurate predictive tools for the production and transportation of 
hydrocarbons and associated water. The lost production from a single 
offshore pipeline due to inadequate design can cost $500,000 or more 
per day. More importantly, the lack of technology can result in overly 
conservative designs that can render some projects cost-prohibitive. 
Any technological improvement towards increases in producible reserves 
and efficient production practices, such as the novel software 
developed in this project, will realize more hydrocarbon production and 
increase U.S. employment. Moreover, the new technologies may give U.S. 
companies a technological advantage to exploit similar fields or 
technical services in other countries, creating possibly more job 
opportunities for U.S. residents. For the public at large, the 
availability of additional domestic hydrocarbon reserves will reduce 
the dependency of the United States on hydrocarbon imports, bringing 
more stability to U.S. energy markets and the U.S. economy as a whole.
    Significant progress has been made in this project. The model, 
engine of the software, has already been developed for the prediction 
of flow behavior during production and transportation of gas, oil, and 
water through wellbores and pipelines. Closure relationships describing 
the distribution between the liquid phases--namely mixing and inversion 
are proposed. Significant improvements are observed over the 
predictions by the two-phase unified models that assume a fully mixed 
liquid phase. The three-phase unified model is currently being enhanced 
by improving the closure relationships. The model is being incorporated 
in various software packages by the software companies.
    In conclusion, DOE's contribution to this project has already been 
invaluable. The results and deliverables of the project are being 
incorporated in available design software for design engineers to use. 
Moreover, two graduate students funded through the project are employed 
in oil and gas by companies operating in the United States serving the 
public through working on oil and gas development projects in the 
United States. One more year of support is needed to fully complete the 
project. We ask that the funding for this project to be continued in 
fiscal year 2008.
                                 ______
                                 
           Prepared Statement of the Gas Technology Institute

    This submittal is intended for the Senate Subcommittee on Energy 
and Water. Comments are for consideration for establishing the fiscal 
year 2008 Fossil Energy Oil and Natural Gas Program budgets. Thank you 
for the opportunity to provide the subcommittee with information for 
use during deliberations.
    Recently, a new record was established! The technically recoverable 
gas resource base in North America hit a 30-year high based on the 
latest estimate by the National Petroleum Council in their 
comprehensive Year 2003 study. Our understanding of the gas resource 
base has resulted in a five-fold increase over the last 30 years (See 
Figure No. 1).



 Figure 1.--Technically Recoverable Gas Resource Base Estimates (Tcf) 
       Modified from William Fisher, et. al. University of Texas

    With the resource base at record highs--expectations might be for 
gas prices to be at record lows. Having just paid our winter heating 
bills everyone is aware of current natural gas prices. Understanding 
this dichotomy requires and understanding of both our remaining oil and 
gas resource base.
    Our resource base while large and diverse is also heavily explored 
and difficult to access. Oil and gas is found in rocks that are deeper 
in depth onshore greater than 15,000 ft. Oil and gas is found in lower 
permeability formations, in deeper waters offshore, in environmentally 
sensitive areas (Rocky Mountains) and is at greater distances from 
markets (Alaska). All of these factors combine to the point where our 
large technically recoverable resource is also technically challenging.
    The resource is there however . . . and located within North 
America. Our remaining oil and gas endowment is a considerable asset 
and is being overlooked.
    We continue to drill an increasing number of oil and gas wells but 
they produce less resource for many of the reasons just discussed.
    Demand exceeds supply and we all know the consequence of that 
situation whether the commodity be a gallon of gasoline or a gallon of 
milk. We are experiencing record high oil and gas prices that will lead 
to significant economic hardship if action is not taken.
    The action to be taken is a renewed emphasis on technology. New 
technology must be developed and applied. Ten years ago, Coalbed 
Methane was part of the technical resource base with little production. 
A focused research program initiated by the Department of Energy 
resulted in gas production that now satisfies 7 percent of our gas 
demand (Figure No. 2 Coalbed Methane Production).



       Figure 2.--Coalbed Methane Production in the United States

    Funding for Oil and Gas R&D was almost cut in half during the 
1990's. Adequate gas supplies and $2.00 wellhead prices put pressure on 
the bottom line. The industry, for sound business reasons, was not 
investing in supply R&D sufficient to meet mid-term demand. The super-
majors, while they may have significant research budgets, have other 
more profitable options overseas. The service companies, which meet 
many of the research needs of large producers, do so at the direction 
of their clients. The smaller independents, which develop most of our 
onshore oil and gas resources, do not have the resources to invest in 
the R&D. Now, with gas prices at $6.00 and oil at $60 abandoned R&D 
capabilities are sorely missed.
    We require a renewed focus on our domestic resource base to fully 
utilize our significant and valuable natural gas and remaining oil 
endowment. New technology is the key to converting ``Resource to 
Production.''
    The National Petroleum Council as part of their 2003 study on 
natural gas estimated the impact of various actions on natural gas 
supplies and prices. Figure No. 3 illustrates the fact that new 
technology can have as high or greater impact than most other options. 
With this level of impact new technology programs should be receiving 
top priority during budget deliberations.



       Figure 3.--NPC Sensitivity Studies on Gas Price and Supply

    The Department of Energy Oil and Gas program is the last remaining 
organized R&D effort with a focus on our remaining domestic oil and gas 
resource base. Important projects have been developed in several 
strategic areas including:
  --Unconventional gas resources such as tight gas sands, coalbed 
        methane and gas from shales.
  --Microhole drilling for remote exploration and minimum land impact.
  --Stripper or low production oil wells.
  --Environmental issues including water produced from oil and gas 
        operations.
  --Access to Federal lands with minimum impact.
  --Technology transfer for Independent producers.
    Just when the need is greatest and at a time when research efforts 
of this type should be significantly increased in size, the 
administration has recommended that the programs be eliminated.
    I strongly believe that meeting domestic oil and gas supply has 
value to the Nation on par with all other federally supported programs, 
and that congressional and administration program and funding 
priorities should reflect that importance.
                                 ______
                                 
  Prepared Statement of the Interstate Oil and Gas Compact Commission
    Mr. Chairman and members of the Subcommittee, on behalf of the 
Interstate Oil and Gas Compact Commission (IOGCC), I am submitting this 
testimony in support of fiscal year 2008 funding for a new U.S. 
Department of Energy program that would address a serious public safety 
and environmental problem that affects all the states that historically 
drilled for oil and gas. Specifically, IOGCC is supporting a $10 
million appropriation to permanently plug abandoned and ``orphaned'' 
oil and gas wells.
    The member states of the Interstate Oil and Gas Compact Commission 
account for more than 99 percent of the oil and natural gas produced 
onshore in the United States. Formed by Governors in 1935, the IOGCC is 
a congressionally-ratified interstate compact of 30 member states. The 
mission of the IOGCC is two-fold: to conserve our nation's oil and gas 
resources and to protect human health and the environment.
    The orphan oil and gas well plugging program for states was 
authorized in Section 349(g) and (h) of the Energy Policy Act of 2005. 
For lack of congressional appropriation, the U.S. Department of Energy 
has yet to establish the program, however, the section authorizes up to 
$20 million annually in federal matching funds to states for the 
purpose of plugging abandoned wells--some of which are over a century 
old. The program matches existing state funds to speed the plugging and 
clean-up of old wells for which there is no responsible party.
    No new orphan wells can be created, since today's state regulatory 
structures, which require adequate bonding or insurance coverage, 
ensure that the costs of plugging will be covered if the responsible 
party becomes unwilling or unable to perform the task. Plugging the 
remaining orphan wells by supplementing state programs will create no 
new bureaucracy and will provide a lasting solution to the problem.
    States have taken the lead in addressing the orphan well issue, and 
thousands of sites have been reclaimed and wells permanently plugged by 
the states. All oil and gas producing states have established plugging 
funds, but they are insufficient to address a timely cleanup and 
plugging of the remaining orphan wells. It is estimated that 
approximately 60,000 orphan wells remain that have the potential to 
cause public safety or environmental harm. The requested $10 million 
appropriation to match state oil and gas plugging funds will 
permanently plug the nation's remaining orphan wells over the next 5 
years.
    The potential for groundwater contamination is the primary 
environmental concern associated with orphan wells. Unplugged wells can 
potentially serve as a conduit for the migration of fluids into a 
ground water aquifer. In some cases, fluids could flow all the way to 
the surface, potentially contaminating surface soils surrounding the 
well.
    Public safety is also in jeopardy from unplugged wells. Escaping 
methane gas from undiscovered pre-Civil War era wells can migrate to 
the surface where unsuspecting homeowners and businesses may be 
required to evacuate until the danger can be ameliorated. Similarly, 
farm equipment and equipment operators can be seriously injured by the 
unearthing of unknown oil or gas wells buried under decades of soil on 
agricultural land. States have excellent programs to find and identify 
such public safety hazards, but plugging and cleaning up the sites is 
dependent on adequate funding.
    This program is not an earmark, but rather an authorized U.S. DOE 
program. Funding of the orphan well plugging program would set in place 
an efficient and simple program to direct funding to state plugging 
efforts. The appropriation would be directed to the U.S. Department of 
Energy, which in turn would utilize the IOGCC as the fund 
administrator, as directed by the authorizing statute. IOGCC would help 
ensure that federal dollars would be dedicated to dealing with the 
wells that pose the greatest danger to public safety and the 
environment. An IOGCC Task Force has developed a prioritization 
schedule to guide the well selection process. States would match the 
federal funding, and submit a completed plugging report to the IOGCC 
for reimbursement. The long-range goal is to plug every orphan well in 
the nation that poses a threat to the environment or public safety.
    Thank you for this opportunity to submit our testimony. We urge the 
Subcommittee's favorable consideration of this request. For questions 
or further information, please feel free to contact Diane S. Shea, 
IOGCC Washington Representative, at [email protected], or 301-913-
5243.
                                 ______
                                 
       Prepared Statement of the Nuclear Waste Strategy Coalition

    Mr. Chairman and distinguished members of the Committee, the 
Nuclear Waste Strategy Coalition (NWSC or Coalition) appreciates this 
opportunity to present a Statement for the Record regarding the status 
of the fiscal year 2008 Department of Energy (DOE) Budget Request.

                             ABOUT THE NWSC

    The NWSC is an ad hoc group of state utility regulators, state 
attorneys general, electric utilities and associate members 
representing 46 member organizations in 26 states. The Coalition was 
formed in 1993 out of frustration at the lack of progress DOE had made 
in developing a permanent repository for spent nuclear fuel (SNF) and 
high-level radioactive waste (HLRW), as well as Congress's failure to 
sufficiently fund the nuclear waste disposal program (Program) since 
1982. The mission and purpose of the NWSC is to achieve:
  --Removal of commercial spent nuclear fuel and high-level radioactive 
        waste from temporary civilian and decommissioned storage sites 
        located in 33 states.
  --Authorization of a temporary, centralized commercial spent nuclear 
        fuel storage facility.
  --Appropriations from the Nuclear Waste Fund (NWF) sufficient to 
        enable the DOE to fulfill its statutory and contractual 
        obligations.
  --Augmentation of transportation planning and regulations to 
        facilitate transportation systems plan.
  --Capping of the NWF fee at the present one-tenth of a cent per 
        kilowatt-hour.
  --Operation of a permanent repository at Yucca Mountain that is 
        capable of receiving waste as soon as possible upon 
        authorization by the Nuclear Regulatory Commission (NRC).

                    FISCAL YEAR 2008 APPROPRIATIONS

    Fiscal year 2008 is a pivotal year for the Program, and the NWSC 
strongly supports the DOE's fiscal year 2008 budget request. Congress 
has the opportunity to determine the direction of the Program by 
appropriating the full $494.5 million as requested by the DOE in its 
fiscal year 2008 budget. As stated by Mr. Ward Sproat, Director, DOE/
Office of Civilian Radioactive Waste Management (OCRWM), during his 
March 7, 2007 testimony, it is absolutely vital for Congress to fully 
fund the Program in order for the DOE to carry out the latest projected 
Best-Achievable Schedule opening date of March 2017 for the permanent 
repository that includes the filing of the license application to the 
NRC in June 2008.
    Other DOE objectives in the fiscal year 2008 request include 
certifying the licensing support network, completing the supplemental 
Yucca Mountain Environmental Impact Statement, designing the standard 
canisters to be used by the industry, performing critical personnel 
safety upgrades at the Yucca Mountain site, analyzing and reporting to 
Congress on the need for a second repository, resolving comments and 
issuing the final EIS for the Nevada rail line that is required to 
transport SNF and HLRW to the permanent repository, and funding 
independent scientific studies by the State of Nevada, Nye County, Inyo 
County, the University of Nevada and affected units of local 
government.

                           NUCLEAR WASTE FUND

    There are adequate funds available in the NWF to implement the 
federal policy for permanent disposal of SNF and HLRW, provided 
Congress appropriates them. Since 1983, ratepayers from 41 states have 
paid more than $28 billion, including interest, into the NWF. The NWF 
was established by the U.S. Congress for safe, timely, and cost-
effective centralized storage and the development of a permanent 
repository. The nation's ratepayers who receive electricity from 
nuclear generating utilities pay over $750 million per year into the 
NWF, and with interest credits, this amount exceeds $1.2 billion 
annually. To date, approximately $10 billion has been spent to assure 
the national repository is developed in the most responsible manner to 
protect the health, safety, and security of every American, including 
those in Nevada, as well as each of the States with a nuclear power 
plant. The Fund now holds more than $18 billion, including interest.
    Regrettably, the NWF account balance has been used to support other 
programs and camouflage the federal deficit rather than to develop the 
permanent repository. Consequently, more than 55,000 metric tons of SNF 
and HLRW are presently stranded at more than 100 sites (commercial and 
defense) in 39 states. The NWSC asks that Congress codify the NWF 
annual receipts as offsetting collections to ensure that every cent 
collected from the ratepayers will be delivered to the Program, as 
intended by the 1982 Nuclear Waste Policy Act, as amended (NWPA).

                       NUCLEAR WASTE FUND REFORM

    NWSC members believe it is vitally important that Congress ensure 
the Program is funded in a manner that will allow the DOE to implement 
the federal Program in accordance with the NWPA. The Program is already 
in default of the NWPA requirement to begin waste acceptance by 1998, 
and continues to slip further behind schedule.
    For instance, the DOE's fiscal year 2007 budget request for the 
Program was $544.5 million. However, Congress appropriated $444.5 
million, a $100 million reduction. Consequently, three dozen workers at 
the Yucca Mountain project have already lost their jobs and several 
hundred others may face layoffs in the months ahead. Such cuts will 
likely result in further setbacks to the Program schedule.
    Additionally, in March 2007 the DOE submitted to Congress the 
``OCRWM Budget Projection fiscal year 2009-fiscal year 2023 Executive 
Summary,'' that projected annual budget expenditures of integrated 
Program needs through completion of the repository surface facilities. 
The projected budget is based on funding requirements for construction 
of the repository and the transportation infrastructure needed to meet 
the Best-Achievable Schedule opening date of March 2017, assuming 
enactment of the Administration's legislative proposal the Nuclear Fuel 
Management and Disposal Act.
    To help keep the Program on track and the Best-Achievable Schedule, 
the NWSC strongly supports the Administration's proposal for reforming 
the mechanism for funding the Program. In March 2007, the 
Administration submitted to Congress a legislative proposal that, among 
other things, would provide a stable source of funding for this Program 
by reclassifying mandatory NWF receipts as discretionary, in the amount 
equal to appropriations from the NWF for the disposal program. Funding 
for the Program would still have to be requested annually by the 
President and appropriated by the Congress from the NWF.
    While not calling for carte blanche funds for the DOE without 
Program oversight, the NWSC has been very supportive of the OCRWM 
program over the years and has worked to ensure that Congress 
appropriate sufficient funds for the nuclear waste transportation and 
disposal program. We continue those efforts today as we encourage 
Congress to introduce comprehensive legislation that reforms the NWPA, 
such as the ``Nuclear Fuel Management and Disposal Act,'' proposed by 
the Administration on March 6, 2007. Congress has an opportunity to 
enhance the management and disposal of SNF and HLRW, ensure protection 
of public health and safety and the territorial integrity and security 
of the permanent repository through legislative reform. Moreover, 
reforming the annual funding for the Program, assures the 41 states' 
ratepayers that their payments into the NWF are being used for their 
intended purpose--the removal of SNF and HLRW from commercial and 
decommissioned nuclear power plants.
    Continued under-funding will have dire consequences on the 
completion of the nation's permanent repository, the transportation 
infrastructure system plans and the transportation and disposal of 
canisters. As several members of Congress have commented in the past, 
``This Program has been starved for funding''--the 2010 deadlines for 
waste fuel acceptance at Yucca Mountain was, ``a pipe dream at existing 
funding levels.'' We hope that the 2017 deadline is not another ``pipe 
dream.''

                                LAWSUITS

    It has been more than ten years since the DOE defaulted on its 
obligations, as stated in the Nuclear Waste Policy Act of 1982, as 
amended, to remove SNF and HLRW from the nation's nuclear power plants. 
In its 1996 Indiana-Michigan decision, the U.S. Court of Appeals 
affirmed that the DOE was obligated to start moving waste on January 
31, 1998, ``without qualifications or condition.''
    More than 60 utilities have sued the federal government for damages 
associated with DOE's default to meet its 1998 obligations. The 11th 
Circuit Court of the U.S. Court of Appeals has ruled that these damage 
payments will not come from the Nuclear Waste Fund. Meanwhile, the U.S. 
Court of Claims has awarded more than $220 million to plaintiffs so 
far. As stated in Mr. Sproat's testimony, DOE has estimated that each 
year the repository's opening is delayed beyond 2017, the U.S. 
taxpayers' potential liability to contract holders will increase by 
approximately $500 million per year. The longer Congress withholds 
adequate annual funding from DOE and declines to reform the NWPA, the 
greater the potential liability will be to the nation's taxpayers.
    If the DOE fails to meet vital Program milestones such as 
submitting the license application to the NRC, the financial liability 
the DOE faces through lawsuits will continue to mount. As the DOE 
continues to delay honoring its contracts with utilities to remove 
spent fuel from plant sites, both the amount of SNF and HLRW stored, 
and the costs associated with storing it increase. NWSC members are 
concerned about the increased costs that ratepayers must bear as a 
result of these delays.

               TRANSPORTATION--RIGOROUS SAFETY STANDARDS

    The DOE has proven that it can safely transport SNF and HLRW from 
plant sites across the nation. Since the 1960s, more than 3,000 
shipments of spent nuclear fuel from nuclear power plants, government 
research facilities, universities and industrial facilities traveling 
over 1.6 million miles, ``without a single death or injury due to the 
radioactive nature of the cargo.'' \1\ This equates to more than 70,000 
metric tons of SNF, an amount equal to what the NWPA authorizes for 
Yucca Mountain. Shipments include 719 containers from the Naval Nuclear 
Propulsion program between 1957 and 1999, and 2,426 highway shipments 
and 301 railway shipments from the U.S. nuclear industry from 1964 to 
1997. In addition, since 1996, shipments of spent nuclear fuel have 
been safely transported to the United States from 41 countries to the 
DOE facilities; \2\ again, without a single death or injury--not one. 
If a repository is licensed at Yucca Mountain, the DOE projects 
approximately 4,300 shipments over a 24-year period, averaging 175 
shipments of spent nuclear fuel per year, a relatively small amount 
compared with the approximately 300 million annual shipments of 
hazardous materials (explosives, chemicals, flammable liquids, 
corrosive materials, and other types of radioactive materials) that are 
currently transported around the country every day.
---------------------------------------------------------------------------
    \1\ National Conference of State Legislatures' Report, January 
2000.
    \2\ U.S. Department of Energy Report to the Committees on 
Appropriations, January 2001.
---------------------------------------------------------------------------
    Furthermore, the DOE has safely and successfully made more than 
5,542 transuranic waste shipments at the Waste Isolation Pilot Plant 
(WIPP) in New Mexico as of March 12, 2007.\3\ The Western Governors' 
Association (WGA) signed an agreement with the DOE in April 1996 that 
affirmed regional planning processes for safe transportation of 
radioactive material. All regional high-level radioactive waste 
transportation committees also endorsed the WGA approach. The WIPP 
transportation planning system is setting the standard for safety and 
proving to be a critical step toward solving the nation's spent nuclear 
waste disposal transportation program.
---------------------------------------------------------------------------
    \3\ U.S.DOE/Waste Isolation Pilot Plant Shipment Figures, March 
2007.
---------------------------------------------------------------------------
    To ensure safety at on-site spent fuel storage facilities and 
during transportation, the material is stored in containers that meet 
the NRC's rigorous engineering and safety standards testing. To satisfy 
the NRC's rigorous standards for subsequent transportation approval, 
these containers have been dropped 30-feet onto an unyielding surface, 
dropped 40 inches onto a 6-inch vertical steel rod, exposed for 30 
minutes to a 1,475 F fire, submerged under 3 feet of water for eight 
hours, immersed in 50 feet of water for at least eight hours (performed 
in a separate cask), and immersed in 656 feet of water for at least one 
hour.\4\
---------------------------------------------------------------------------
    \4\ Nuclear Regulatory Commission Testing Requirements, 10 CFR 
Sections, 71.61, 71.71, and 71.73.
---------------------------------------------------------------------------
                               CONCLUSION

    The federal government's failure to deliver extends back several 
decades and the U.S. Congress must immediately address the growing need 
of disposal of SNF and HLRW. Therefore, it is vitally important that 
the leadership in Congress fully fund the nuclear waste disposal 
program for fiscal year 2008 and pass legislation that reforms Program 
funding for the continued progress of the permanent repository. While 
the Program continues to face complex challenges, passage of 
legislation will allow the Program to remain viable and afford the 
opportunity for ultimate success.
    In contrast, the NWSC does not support competing legislation that 
would have the DOE take title of SNF at plant sites. This previously 
introduced bill proposes stranding fuel indefinitely throughout the 
nation while the nation's ratepayers continue to pay in perpetuity into 
the NWF, which is not an acceptable option.
    Based on DOE reports, the NWSC understands the Global Nuclear 
Energy Partnership (GNEP) program would reduce the volume, heat and 
toxicity of byproducts placed in the permanent repository. However, 
this program does not diminish in any way the need for, or the urgency 
of, a geologic permanent repository at Yucca Mountain, particularly 
because the Navy, research and legacy fuel are not candidates for the 
recycling program.
    The DOE fiscal year 2008 budget contains $2 million for a study 
ordered by Congress to determine whether a second repository should be 
built, and where, as required under Section 161(b) of the NWPA. The DOE 
has already stated that it would start its review with the two-dozen 
candidate sites that were under consideration prior to selection of the 
Yucca Mountain site. Therefore, it is clear that all states have a 
stake in following through with the nuclear waste disposal policy that 
Congress selected when it passed the NWPA and reinforced when it voted 
in 2002 to support the President's selection of Yucca Mountain as a 
site suitable for development of the national repository.
    The members of the NWSC urge Congress to take a long-term view of 
our nation's energy needs, national security interests, and fairness to 
both ratepayers and electric utilities by appropriating full funding 
for the Program for fiscal year 2008. The Coalition members believe 
receipt of requested annual funding will make it possible for DOE to 
meet its projected schedule and eventually bring the nuclear waste 
disposal program to fruition as promised and mandated by the 1982 
Nuclear Waste Policy Act, as amended.
                                 ______
                                 
   Prepared Statement of the University Corporation for Atmospheric 
                            Research (UCAR)

    On behalf of the University Corporation for Atmospheric Research 
(UCAR) and the university community involved in weather and climate 
research and related education, training and support activities, I 
submit this written testimony for the record of the Senate Committee on 
Appropriations, Subcommittee on Energy and Water Development.
    UCAR is a 70-university member consortium that manages and operates 
the National Center for Atmospheric Research (NCAR) and additional 
programs that support and extend the country's scientific research and 
education capabilities. In addition to its member research 
universities, UCAR has formal relationships with approximately 100 
additional undergraduate and graduate schools including several 
historically black and minority-serving institutions, and 40 
international universities and laboratories. UCAR's principal support 
is from the National Science Foundation with additional support from 
other federal agencies including the Department of Energy (DOE).
DOE Office of Science
    The atmospheric and related sciences community appreciates 
Congress' continued support for the Administration's American 
Competitiveness Initiative, and its goal to double the DOE Office of 
Science budget by fiscal year 2016. We are pleased that the fiscal year 
2008 request again makes the Office of Science a high priority. The 
needs of the country demand that DOE continue to produce a world-class 
program in science and energy security research. The Office of Science 
manages fundamental research programs in basic energy sciences, 
biological and environmental sciences, and computational science, and 
supports unique and vital parts of U.S. research in climate change, 
geophysics, genomics, life sciences, and science education. Continuing 
to implement the doubling of basic research funding within DOE will 
result in educating, training and sustaining thousands in the nation's 
workforce (28,000 in fiscal year 2008) in our laboratories and 
universities.
    I urge the Subcommittee to fund the DOE Office of Science at the 
level of the President's fiscal year 2008 budget request of $4.4 
billion, and to enable the agency to apply that entire amount toward 
planned agency research priorities. As Director of the Office of 
Science Raymond Orbach recently stated, ``These are extraordinary times 
for science.'' This investment in our country's scientific leadership 
will enable many researchers to make extraordinary progress in numerous 
areas of discovery.

Biological and Environmental Research (BER)
    Within the Office of Science, the Biological and Environmental 
Research (BER) program develops the knowledge necessary to identify, 
understand, and anticipate the potential health and environmental 
consequences of energy production and use. These are issues that are 
absolutely critical to our country's well being and security, and now 
more than ever, they are being scrutinized by Members of Congress and 
the media in light of the recent Intergovernmental Panel on Climate 
Change (IPCC) report that states that warming of the climate is 
``unequivocal.'' Peer-reviewed research programs at universities, 
national laboratories, and private institutions play a critical role in 
the BER program by involving the best researchers the nation has to 
offer, and by developing the next generation of researchers. 
Approximately 27 percent of BER basic research funding supports 
university-based activities directly and 40 percent supports basic 
research at national laboratories. All BER research projects, other 
than those that have been in the ``extra projects'' category, undergo 
regular peer review and evaluation.
    The President's BER Request for fiscal year 2008 is $531.9 million, 
a 15 percent increase over the fiscal year 2007 Joint Resolution. While 
this is a substantial increase, it should be seen in the context of 
past appropriations, the President's higher fiscal year 2007 request 
for BER, and the decline of BER funding that has taken place in the 
recent past. With the elimination of congressionally directed projects, 
BER received a three percent increase in the final fiscal year 2007 
Joint Resolution. The fiscal year 2008 request, therefore, makes up 
much lost ground. I urge the Subcommittee to fund Biological and 
Environmental Research at the level of the fiscal year 2008 Budget 
Request, $531.93 million, a 4.5 percent increase over the fiscal year 
2007 Request, and to enable BER to apply that entire amount toward 
planned agency research priorities that are peer-reviewed and that 
involve the best researchers to be found within the nation's university 
research community as well as the DOE labs.
BER's Climate Change Research Program
    The International Polar Year (IPY) 2007-2008 officially began March 
1, with over 200 scientific projects planned, involving thousands of 
scientists from over 60 nations examining a wide range of physical, 
biological and social research topics. The scientific need to focus on 
the remote areas of the Earth will provide better understanding of the 
current global climate.
    DOE's IPY activities are supported by the DOE Office of Science's 
Climate Change Research Program in which research is focused on 
understanding the basic chemical, physical, and biological processes of 
the Earth's atmosphere, land, and oceans and how these processes may be 
affected by energy production and use, primarily the emission of carbon 
dioxide from fossil fuel combustion. DOE's Climate Change Prediction 
Program's contribution to the IPY includes improving climate change 
projections using state-of-the-science coupled climate models in time 
scales of decades to centuries and space scales of regional to global.
    BER's Climate Change Research also contributes substantially to the 
nation's Climate Change Research Initiative (CCRI) goals of 
understanding and predicting climate change, including its causes, 
consequences, and potential for abrupt change. The long-term DOE goal 
is to deliver improved climate data and models for policy makers and to 
substantially reduce differences between observed temperature and model 
simulations at regional scales. This work is critical to the ability of 
policy makers and stakeholders to provide stewardship resulting in a 
healthy planet--and it is particularly important as signs of 
increasingly dramatic change in our climate and environment appear.
    The Climate Change Research Request of $138.1 million for fiscal 
year 2008 is a 2.4 percent increase over the fiscal year 2007 Request. 
I urge the Subcommittee to fund Climate Change Research at an fiscal 
year 2008 level that is consistent with the requested increase for BER 
stated above, a 4.5 percent increase over the fiscal year 2007 Request, 
for a total of $144.3 million, and to enable DOE to apply the entire 
amount toward planned national research priorities.

Advanced Scientific Computing Research (ASCR)
    Within DOE's Office of Science, Advanced Scientific Computing 
Research (ASCR) delivers leading edge computational and networking 
capabilities to scientists nationwide, enabling advances in computer 
science and the development of specialized software tools that are 
necessary to research the major scientific questions being addressed by 
the Office of Science. Development of this capacity is a key component 
of DOE's strategy to succeed in its science, energy, environmental 
quality, and national security missions.
    ASCR's continued progress is of particular importance to 
atmospheric scientists involved with complex climate model development, 
research that takes enormous amounts of computing power. By their very 
nature, problems dealing with the interaction of the earth's systems 
and global climate change cannot be solved by traditional laboratory 
approaches.
    Within ASCR, several programs are of particular importance to 
climate change computer modeling work. The Leadership Computing 
Facility (LCF) at Oak Ridge National Laboratory (ORNL) provides a high 
performance computing resource for the Climate Science End Station and, 
in 2008, will continue its development into a world class facility with 
over 80 percent of its resources being made available to unclassified 
scientific research. In addition, the National Energy Research 
Scientific Computing Center (NERSC) operated by Lawrence Berkeley 
National Laboratory, and the Energy Sciences Network (ESnet) are also 
important enablers for climate research. These computational and 
networking resources play a vital role in the progress of U.S. climate 
research.
    The high performance computing facilities for the Office of Science 
serve thousands of scientists throughout the country at laboratories, 
universities, and other Federal agencies. Computing time is awarded to 
research groups based on peer review of submitted proposals. Basic 
research accomplished at these facilities covers a wide range of 
disciplines including climate modeling. ESnet enables researchers at 
laboratories, universities and other institutions to communicate with 
each other using collaborative capabilities that are unparalleled. This 
high-speed network enables geographically distributed research teams to 
collaborate effectively on some of the world's most complex problems. 
Researchers from industry, academia and national labs, through this 
program, share access to unique DOE research facilities, support the 
frequent interactions needed to address complex problems, and speed up 
discovery and innovation.
    LCF, NERSC, and ESnet play complementary roles in advancing the 
complex and challenging science of climate change and other scientific 
areas of extreme importance to the security and quality of life of our 
citizens. I urge the Committee to support the President's fiscal year 
2008 request of $340.2 million for DOE Advanced Scientific Computing 
Research, a 6.8 percent increase over the fiscal year 2007 request, and 
to enable DOE to apply the entire amount toward planned national 
priorities.

Scientific Discovery Through Advance Computing (SciDAC)
    BER and ASCR partner to support SciDAC, a progressive, breakthrough 
program that includes the creation of a first-generation Earth System 
model based on the extremely successful Community Climate System Model. 
A major SciDAC goal is to understand basic chemical, physical, and 
biological processes of the Earth's atmosphere, land, and oceans and 
how these processes may be affected by energy production and use. Much 
of the research is designed to provide the data that will enable an 
objective assessment of the potential for, and consequences of, global 
warming. This work is becoming increasingly critical as evidence mounts 
that regions of Earth are warming at an alarming rate. SciDAC research 
activities are competed via a merit review process and carried out at 
universities, national laboratories, and private institutions.
    Fiscal year 2008 funding will provide support for SciDAC activities 
including Centers for Enabling Technologies (CETs) that provide the 
innovations in computational research and development for petascale 
computational and data management endeavors, including climate 
research.
    BER funding for SciDAC is requested at $7.7 million for fiscal year 
2008 with ACSR supporting SciDAC Computational Partnerships at $50.2 
million, $21 million of which will fund the CETs. I urge the Committee 
to support the President's fiscal year 2008 requests within BER and 
ASCR for overall SciDAC funding.
    DOE plays a vital role in sustaining U.S. scientific leadership and 
generating U.S. competitiveness in a time when other countries are 
investing heavily in scientific research and technology. On behalf of 
UCAR and the atmospheric sciences research community, I want to thank 
the Subcommittee in advance for your attention to the recommendations 
of our community concerning the fiscal year 2008 budget of the 
Department of Energy. We understand and appreciate that the nation is 
undergoing significant budget pressures at this time, and support 
absolutely the effort to enhance U.S. security and quality of life 
through the American Competitiveness Initiative, of which the DOE 
Office of Science is a critical component.
                                 ______
                                 
              Prepared Statement of FuelCell Energy, Inc.

    FuelCell Energy, Inc. appreciates the opportunity to submit this 
statement in support of the Department of Energy's Fossil Energy, Fuels 
and Power Systems, Fuel Cell Program. We urge the Subcommittee to 
continue to support this breakthrough program by appropriating $80 
million for development of this highly efficient, clean, and secure 
energy technology.
    DOE's Fossil Energy Fuel Cell Program, through the Solid State 
Energy Conversion Alliance (SECA) fuel cell activity, is developing 
technology to allow the generation of highly efficient, cost-effective, 
carbon-free electricity from domestic coal resources with near-zero 
atmospheric emissions in central station applications. The program 
directly supports the president's FutureGen project through the 
development of cost-effective, highly efficient, power blocks that 
facilitate sequestration in coal-based systems. The technology will 
also permit grid independent distributed generation applications by 
2010.
    SECA fuel cell systems operating on coal gas are building blocks 
for zero emissions power, the ultimate goal of the President's 
FutureGen Program. These systems are projected to be available at a 
cost of $400/kw. In addition, the technology developed in this program 
will produce electricity at up to 60 percent efficiency in coal-based 
systems, produce near-zero emissions, and be compatible with carbon 
sequestration.
    In all applications SECA fuel cells will be both low-cost, with the 
above-stated goals of $400/kw, as well as highly efficient. Integrated 
with coal gasification, such systems will approach 60 percent 
efficiency compared to the existing coal-based power generation fleet 
average of about 33 percent efficiency. In distributed generation 
applications even higher efficiencies may be reached, and cogeneration 
opportunities can further increase efficiency.
    Along with these attributes fuel cells are one of the cleanest 
technologies available in terms of atmospheric emissions, which 
enhances their attractiveness for urban applications or applications in 
areas of non-attainment for Clean Air Act emissions. They also provide 
24 hour, silent operation.
    Finally, coal-based fuel cell systems will increase energy security 
by using domestic resources. In distributed generation applications 
fuel cells can eliminate transmission and distribution system 
infrastructure concerns and issues by providing generation near the 
point of use and by being able to operate in a grid-independent mode.
    The SECA Program consists of six integrated industrial 
manufacturing teams designing fuel cell systems, developing the 
necessary materials, and ultimately responsible for deploying the 
technology. These teams are complemented by two to three dozen core 
technology performers providing generic problem-solving research needed 
to overcome barriers to low-cost, high performance technology as 
identified by DOE and the manufacturing teams. The core technology 
teams are universities, national laboratories, and other research 
oriented organizations. This unique structure assures that a variety of 
approaches to solving the problems associated with fuel cells will be 
undertaken in a manner that will increase the chances of success for 
this highly complex technology.
    Several of the manufacturing teams are developing systems for 
application to large central generation systems characterized by 
FutureGen. The remaining manufacturing teams are developing fuel cells 
for possible use in both these large systems as well as in distributed 
generation applications such as auxiliary power units, military power 
applications and remote or on-site power generation.
    The DOE budget request for this program for fiscal year 2008 is 
$62.0 million, approximately the same level anticipated for fiscal year 
2007 funding. This level of funding will continue to support the 
current program, which involves larger-scale Phase II development work 
on the part of manufacturing teams in the program and continued effort 
by the core technology performers. However, in order to deliver full 
scale fuel cell system hardware for the FutureGen project additional 
support is necessary to assist and accelerate the creation of 
manufacturing capability by the formation of teams between existing 
fuel cell stack developers and industry with the goal of delivering 
hardware by the scheduled date of 2011 and also to keep the base 
program on schedule.
    We believe that the SECA fuel cell program has achieved the 
progress to date as anticipated by the program managers, and will 
continue to display such progress given sufficient funding support by 
DOE and the Congress. Hybrid technology has been successfully 
integrated into the program and an emphasis on use with coal-based 
systems has been established. Industry partners in the program have 
continued and increased cost-sharing support. All major stack 
developers have met the initial goals of the program allowing 
continuance to more advanced stages of development. This technology is 
essential to meeting the efficiency and emissions goals of the 
President's FutureGen program and will also provide low-cost, low-
emissions alternatives for distributed generation applications. 
Therefore, we urge you to support our request for $80 million to 
execute the DOE Fossil Energy, Fuels and Power Systems, Fuel Cell 
Program in fiscal year 2008.
                                 ______
                                 
       Prepared Statement of the Ground Water Protection Council

    The following request by the Ground Water Protection Council (GWPC) 
is to restore Congressional appropriations of $64 million for the 
Department of Energy's (DOE) Office of Fossil Energy (FE) Research and 
Development (R&D) program. This appropriation will continue to fund the 
RBDMS system and electronic commerce applications at $1,500,000. These 
programs developed by the Ground Water Protection Council (GWPC) 
streamline data management for oil and gas permitting, enhance oil and 
gas production, and protect the environment. Restoring the funding for 
these programs is an urgent priority for the continued development of 
domestic oil and gas and sustained environmental protection.
    The GWPC is a respected national organization of state ground 
water, UIC, and oil and gas regulatory agencies with a successful track 
record of providing solutions to ground water protection related issues 
that are environmentally protective, scientifically based, cost 
effective and publicly accepted. Through the GWPC, states work together 
to strengthen their ability to protect ground water resources in more 
effective and cost efficient ways. We are the proud recipient of the 
Secretary of Energy's ``Energy 100 Award''--given to the top 100 most 
successful and publicly beneficial projects (RBDMS) in the last 30 
years of the USDOE.
    RBDMS/CERA Accomplishments.--Data utilities from the Risk Based 
Data Management System are used in 25 states and one Indian Nation. 
RBDMS streamlines state oil and gas permit and response times, enhances 
ground water protection, and provides improved public and industry 
joint access to data, saving money for state and federal agencies, 
increasing production for small independent domestic operators, and 
creating real time efficiencies in state and federal domestic oil and 
gas programs. Over the life of these successful programs, the states 
have matched federal funding with their own funds at a 3:1 ratio. 
RBDMS/CERA projects have resulted in:
  --Improved Environmental Protection.--State agencies have achieved 
        higher levels of environmental protection through information 
        management tools developed with DOE FE R&D funding. For 
        example, current RBDMS application development efforts are 
        making it possible to overlay oil and gas well and coal mining 
        location information on source water protection area maps to 
        assess areas of review and protect underground sources of 
        drinking water. These same technologies are allowing regulatory 
        agencies to track the quality and quantity of fresh and 
        produced waters and to make important policy decisions about 
        how these resources should be managed.
  --Increased Domestic Oil and Gas Production and Increased State 
        Revenues.--Regulatory agencies have documented that the 
        information access and technology research afforded by the DOE 
        FE R&D program has helped industry maximize the recovery of oil 
        and gas from marginal wells. Nationwide, many marginal wells 
        are being reworked and brought back online at a significant 
        cost savings. For example, in North Dakota, more than 250 wells 
        over the last 5 years have been re-entered and drilled 
        horizontally at a cost savings of at least $300,000. By keeping 
        these wells available, industry has saved in excess of 
        $75,000,000 in North Dakota alone. If such technology was not 
        made readily available through the DOE FE R&D program, many 
        wells with recoverable product would have been plugged or shut 
        in.
  --Increased Data Sharing.--Improved access to oil and gas agency data 
        gives exploration geologists the ability to develop prospects 
        remotely and to drill and operate their leases more 
        efficiently. The DOE FE R&D funding has given regulatory 
        agencies the opportunity to share data with small, independent 
        operators that would not otherwise have the ability to access 
        such accurate information, thus aiding exploration and 
        development efforts.
    Fiscal Year 2008 Funding for RBDMS/CERA.--DOE Fossil Energy 
Research and Development program funding is a sound investment in 
domestic energy production and environmental protection. The DOE FE R&D 
program funds research projects that are encouraging small- and medium-
sized industry operators to expand into previously cost-prohibitive 
areas increasing the industry's ability to make more knowledgeable 
decisions about resource deployment, exploration, and well management 
and is reducing overhead costs associated with regulatory compliance. 
Fiscal year 2008 funding would provide:
  -- E-Commerce.--The development of new RBDMS e-commerce applications 
        in fiscal year 2008 will increase environmental monitoring and 
        compliance and at the same time decrease both cost and time 
        allocation for small oil and gas producers. The result is money 
        saved by state governments and federal agencies and increased 
        domestic oil and gas production.
  --Cost Effective Regulatory Approaches.--Cost Effective Regulatory 
        Approach (CERA) projects are designed to facilitate the 
        development of petroleum resources in an efficient and 
        environmentally friendly manner. For example, we are currently 
        working on minimizing ground water impacts from oil shale 
        production. Projects such as these are critical to the 
        continued enhancement of oil shale production capacity in the 
        United States.
  --Energy-Water Nexus.--The USDOE has a goal of minimizing water 
        consumption by energy-producing industries. The GWPC will 
        develop software applications that will aid state agencies in 
        tracking water quality and quantity data related to oil and gas 
        production. Automated data will assist states in the analysis 
        of related water consumption.
  -- CO2 Geosequestration.--Capture and geologic storage 
        (geosequestration) of CO2 from power plants is one 
        important tool for decreasing the release of this greenhouse 
        gas to the atmosphere. However, geosequestration of 
        CO2 in underground formations presents a potential 
        threat to underground sources of drinking water. The GWPC will 
        facilitate the development of regulations to manage 
        CO2 geologic sequestration by:
    --Creating a stakeholders workgroup made up of state agencies, 
            environmental groups, energy resource companies and other 
            affected parties focused on regulatory needs.
    --Evaluating the legal basis for regulations development including 
            federal and state authorities and rules.
    --Working with the scientific and technical communities to 
            incorporate the best available information to assure the 
            process is environmentally sound.
    --Expanding the successful RBDMS system to track and monitor 
            CO2 Geosequestration wells.
    Many domestic oil and gas fields are no longer economical for the 
major oil and gas companies to operate but still hold vast resources. 
Without small independent operators, these resources would not be 
recoverable. By increasing its recoverable resources by only 5 percent, 
the United States would produce billions of barrels of additional 
domestic oil. Conversely, failure to use new technologies to fully 
recover these resources would result in the loss of billions of dollars 
of revenues that would instead be sent overseas for oil imports.
    About 5,000 domestic independent companies drill 90 percent of the 
nation's wells and produce 68 percent of our domestic oil and 82 
percent of the natural gas. While efficient in their operations, these 
companies lack the necessary research programs to fully develop our 
domestic resources. The partnerships created between these independent 
producers and universities through the DOE FE R&D program are the focus 
of 85 percent of the program's resources. The DOE FE R&D program 
increases environmental protection, access to adequate supplies of oil 
and gas, and tax revenues generated through oil and natural gas 
production. This funding allows states to help expand oil production 
while at the same time better protect the environment through increased 
data access and more efficient data sharing between state agencies and 
producers. RBDMS and CERA projects help further these benefits.
    The Ground Water Protection Council requests continued funding in 
the amount of $1,500,000 for RBDMS and CERA programs and encourages 
restoration of Congressional appropriations of $65 million for the 
Department of Energy's (DOE) Office of Fossil Energy (FE) Research and 
Development (R&D) program.
                                 ______
                                 
           Prepared Statement of Southern Company Generation

    Mr. Chairman and Members of the Committee: Southern Company 
operates the Power Systems Development Facility (PSDF) (http://
psdf.southernco.com) in Wilsonville, AL for the U.S. Department of 
Energy's (DOE's) National Energy Technology Laboratory (NETL) and 
several industrial participants.\1\ The PSDF was conceived as the 
premier advanced coal power generation research and development (R&D) 
facility in the world. It has fulfilled this expectation. I would like 
to thank the Senate for its past support of the PSDF and request the 
committee's continued support. This statement supports the 
Administration's budget request for DOE coal R&D which includes $25 
million for work at the PSDF. These funds are necessary to conduct the 
future test program agreed to with DOE which includes wide-ranging 
support of the DOE Clean Coal Technology Roadmap. A major highlight of 
the PSDF test program is carbon capture technology development for 
coal-based power generation (see details below). Also included is 
support for FutureGen--the integrated hydrogen and electric power 
production and carbon sequestration research initiative proposed by 
President Bush. DOE has identified the PSDF as one of the primary test 
centers to support FutureGen through sub-scale component testing of 
technologies under consideration for inclusion in the FutureGen full-
scale project.
---------------------------------------------------------------------------
    \1\ Current PSDF participants include Southern Company, the 
Electric Power Research Institute (EPRI), KBR, Siemens Power 
Generation, Inc. (Siemens), Peabody Energy, the Burlington Northern 
Santa Fe Railway Company, and the Lignite Energy Council. The Lignite 
Energy Council includes major producers of lignite (who together 
produce approximately 30 million tons of lignite annually); the 
nation's largest commercial coal gasification project; and investor-
owned utilities and rural electric cooperatives from a multi-state area 
that generate electricity from lignite, serving two million people in 
the Upper Midwest region. The Council also has over 250 contractor/
supplier members who provide products and services to the plants and 
mines. In addition to the Wilsonville plant site major work is planned 
for the PSDF, or components are being developed at the following 
locations: Grand Forks, ND (sub-scale gasifier testing), Houston, TX 
(gasifier development); Orlando, FL (gas turbine low-NOX 
burner), Pittsburgh, PA (filter fabrication), Deland, FL (filter 
fabrication), and Holly Springs, MS (gasifier fabrication).
---------------------------------------------------------------------------
    A key feature of the PSDF is its ability to test new coal-based 
power generation systems at an integrated, semi-commercial scale. 
Integrated operation allows the effects of system interactions, 
typically missed in un-integrated pilot-scale testing, to be 
understood. The semi-commercial scale allows the maintenance, safety, 
and reliability issues of a technology to be investigated at a cost 
that is far lower than the cost of commercial-scale testing. Capable of 
operating at pilot to near-demonstration scales, the PSDF is large 
enough to produce industrial scale data, yet small enough to be cost-
effective and adaptable to a variety of technology research needs.
    In addition to semi-commercial scale testing, the PSDF has slip-
stream testing capability for cost effective technology screening. 
Future test work at PSDF will include the scale-up and continued 
development of several CO2 capture technologies being 
developed either at DOE's NETL facility, at private R&D laboratories or 
at PSDF. These CO2 capture technologies are envisioned for 
integration with existing or future Integrated Gasification Combined 
Cycle (IGCC) plants to reduce the cost penalties associated with the 
removal of CO2 from syngas prior to combustion for power 
generation. As a part of the effort to capture CO2, 
substantial new technologies, such as improved catalysts for water gas 
shift technology are needed and will be tested at PSDF. Also included 
in the PSDF research plans are efforts to enhance the coal feeding 
systems to enable wider ranges of coal as well as biomass to be 
economically and reliably introduced into many different versions of 
IGCC technology under consideration commercially today. PSDF has 
already demonstrated proof-of-concept of this new DOE-funded fuel feed 
system and will continue technology development to commercial ready 
scale.
    A part of DOE's goals are to encourage the commercial deployment of 
technologies for which DOE has contributed R&D funding. Consistent with 
these goals, the PSDF will also provide process technology support to 
efforts to commercialize transport gasifier technology. DOE has 
partnered with Southern Company and the Orlando Utilities Commission 
(OUC) as part of a competitive solicitation under the Clean Coal Power 
Initiative (CCPI) to build an advanced 285-megawatt transport gasifier-
based coal gasification facility at OUC's Stanton Energy Center in 
central Florida. The facility will use sub-bituminous coal and include 
state-of-the-art emission controls to demonstrate the cleanest, most 
efficient coal-fired power plant technology in the world. In addition, 
the PSDF will also provide process support to a recently announced 
commercial deployment of the transport gasifier to be constructed in 
Mississippi. This project will showcase the first ever application of 
modern IGCC technology on Gulf Coast lignites. The PSDF will also 
support the deployment of other emerging commercial technologies for 
use on other IGCC systems, including coal feed and particulate control 
technologies.
    Southern Company also supports the goals of the Clean Coal 
Technology Roadmaps developed by DOE, EPRI, and the Coal Utilization 
Research Council (CURC). These Roadmaps identify the technical, 
economic, and environmental performance that advanced clean coal 
technologies can achieve over the next 20 years. Over this time period 
coal-fired power generation efficiency can be increased to over 50 
percent (compared to the current fleet average of 32 percent) while 
producing de minimis emissions and developing cost-effective 
technologies for carbon dioxide (CO2) management. EPRI 
estimated the value of advanced coal R&D using the modern financial 
technique called ``Real Options''. The major conclusion of this study 
\2\ is that the value to U.S. consumers of further coal R&D for the 
period 2007-2050 is at least $360 billion and could reach $1.38 
trillion. But, for these benefits to be realized the critically 
important R&D program outlined in the Clean Coal Technology Roadmap 
must be conducted.
---------------------------------------------------------------------------
    \2\ EPRI Report No. 1006954, ``Market-Based Valuation of Coal 
Generation and Coal R&D in the U.S. Electric Sector'', May 2002.
---------------------------------------------------------------------------
Summary
    The United States has historically been a leader in energy 
research. Adequate funding for fossil energy research and development 
programs, including environmental and climate change technologies will 
provide our country with secure and reliable energy from domestic 
resources while protecting our environment. Current DOE fossil energy 
research and development programs for coal, if adequately funded, will 
assure that a wide range of electric generation and hydrogen production 
options are available for future needs. Congress faces difficult 
choices when examining near-term effects on the Federal budget of 
funding energy research. However, continued support for advanced coal-
based energy research is essential to the long-term environmental and 
economic well being of the United States. Prior DOE clean coal 
technology research has already provided the basis for $100 billion in 
consumer benefits at a cost of less than $4 billion. Funding the 
Administration's budget request for DOE coal R&D and long-term support 
of the Clean Coal Technology Roadmap can lead to additional consumer 
benefits of between $360 billion and $1.38 trillion.
    One of the key national assets for achieving these benefits is the 
PSDF. The fiscal year 2008 funding for the PSDF needs to be $25 million 
to support construction of new technologies that are critical to the 
goals of the Clean Coal Technology Roadmap and to the success of the 
development of cost-effective climate change technologies, of the type 
that will be demonstrated in the FutureGen project. The major 
accomplishments at the PSDF to date and the future test program planned 
by DOE and the PSDF's industrial participants are summarized below.
PSDF Accomplishments
    The PSDF has developed testing and technology transfer 
relationships with over 50 vendors to ensure that test results and 
improvements developed at the PSDF are incorporated into future plants. 
Major subsystems tested and some highlights of the test program at the 
PSDF include:
    Transport Reactor.--The transport reactor has been operated 
successfully on sub-bituminous, bituminous, and lignite coals as a 
pressurized combustor and as a gasifier in both oxygen- and air-blown 
modes and has exceeded its primary purpose of generating gases for 
downstream testing. It is projected to be the lowest capital cost coal-
based power generation option, while providing the lowest cost of 
electricity and excellent environmental performance.
    Advanced Particulate Control.--Two advanced particulate removal 
devices and 28 different filter elements types have been tested to 
clean the product gases, and material property testing is routinely 
conducted to assess their suitability under long-term operation. The 
material requirements have been shared with vendors to aid their filter 
development programs.
    Filter Safe-Guard Device.--To enhance reliability and protect 
downstream components, ``safe-guard'' devices that reliably seal off 
failed filter elements have been successfully developed.
    Coal Feed and Fine Ash Removal Subsystems.--The key to successful 
pressurized gasifier operation is reliable operation of the coal feed 
system and the filter vessel's fine ash removal system. Modifications 
developed at the PSDF and shared with equipment suppliers allow current 
coal feed equipment to perform in a commercially acceptable manner. An 
innovative, continuous process has also been designed and successfully 
tested that reduces capital and maintenance costs and improves the 
reliability of fine ash removal.
    Syngas Cooler.--Syngas cooling is of considerable importance to the 
gasification industry. Devices to inhibit erosion, made from several 
different materials, were tested at the inlet of the gas cooler and one 
ceramic material has been shown to perform well in this application.
    Syngas Cleanup.--A syngas cleanup train was constructed and has 
proven capable of meeting stringent syngas decontamination 
requirements. This module that provides an ultra clean slip stream is 
now available for testing a wide variety of technologies.
    Sensors and Automation.--More than 20 instrumentation vendors have 
worked with the PSDF to develop and test their instruments under 
realistic conditions. Automatic temperature control of the Transport 
Reactor has been successfully implemented.
    Fuel Cell.--Two test campaigns were successfully completed on 0.5 
kW solid oxide fuel cells manufactured by Delphi on syngas from the 
transport gasifier marking the first time that a solid oxide fuel cell 
has been operated on coal-derived syngas.
PSDF Future Test Program
    Future testing at the PSDF is focused on supporting CO2 
capture technologies (of the type to be used by FutureGen) and the 
Technology Roadmaps. These programs aim to eliminate environmental 
issues that present barriers to the continued use of coal including 
major reductions in emissions of SO2, CO2, 
NOX, particulates, and trace elements (including mercury), 
as well as reductions in solid waste and water consumption. Since 
FutureGen will require testing evaluations and scale-up of emerging 
technologies, DOE has identified the PSDF as a key location for support 
testing of the new technologies prior to consideration for inclusion in 
FutureGen.
    With adequate funding, work at the PSDF will include:
    H2/CO2 Separation Technologies.--Integrate 
and test advanced and potentially lower cost H2/
CO2 separation technologies to assess their performance on 
coal-derived syngas.
    Water Gas Shift Enhancements.--A variety of water gas shift reactor 
configurations and sizes can be tested at the PSDF. Optimizing the 
operation of shift catalysts when exposed to syngas at the PSDF and 
evaluating their economics will provide valuable input for the 
FutureGen project.
    Advanced Syngas Cleanup.--Test new advanced syngas cleanup systems 
for reducing hydrogen sulfide, hydrochloric acid, ammonia, and mercury 
to near-zero levels.
    New Particulate Control Device Programs.--Evaluate alternative 
filter system internal designs, on-line detector of particle 
breakthrough, and improved resistance probes.
    Improved Fuel Feed Systems.--Evaluate alternatives that have been 
identified to conventional lock hopper feed systems and coal 
preparation methods.
    Biomass Co-Feed.--Evaluate co-feed options with biomass and coal. 
Design and run a test to gasify up to a 20 percent mixture of biomass 
with coal in the Transport Gasifier.
    Transport Gasifier.--Continue transport gasifier testing to expand 
useable feedstocks, including low- and high-sodium lignites and 
bituminous coals as well as biomass mixtures with these coals and 
provide syngas for testing of syngas clean-up and downstream systems.
    Syngas Cooler.--Test alternative designs that are less complex, 
have lower capital cost, and offer better control of the syngas exit 
temperature.
    High-Temperature Heat Exchangers.--Test high-temperature heat 
exchangers as they become available for use in both advanced combustion 
and gasification technologies.
    Fuel Cell.--Support NETL fuel cell development with slip-stream 
testing. Install and test a 5 to 10 MW hybrid fuel cell/gas turbine 
module.
    Sensors and Automation.--Evaluate automation enhancements that 
simulate commercial control strategies. Further development at 
gasification operating conditions is planned for measuring coal feed 
rate, temperature, gas analysis, dust at low levels, and hazardous air 
pollutants.
                                 ______
                                 
      Prepared Statement of the American Public Power Association

    The American Public Power Association (APPA) is the national 
service organization representing the interests of over 2,000 municipal 
and other state and locally owned utilities throughout the United 
States (all but Hawaii). Collectively, public power utilities deliver 
electricity to one of every seven electric consumers (approximately 44 
million people). We appreciate the opportunity to submit this statement 
outlining our fiscal year 2008 funding priorities within the Energy and 
Water Development Subcommittee's jurisdiction.
Federal Power Marketing Administrations (PMAs)
    Power Marketing Administration Interest Rate Proposal.--The 
Administration's fiscal year 2008 budget includes a recommendation that 
would raise electricity rates by changing the interest rate charged by 
the Southeastern Power Administration (SEPA), the Southwestern Power 
Administration (SWPA), and the Western Area Power Administration (WAPA) 
on all new investments in projects whose interest rates are not set by 
law. Specifically, the Department of Energy's (DOE) budget calls for 
the these three Power Marketing Administrations (PMAs) to set their 
interest rates at the level that government corporations pay to borrow 
funds from the federal government. To implement this proposal, DOE will 
amend the regulation that governs how the PMAs establish their rates 
and will do so administratively, without any consultation with or 
action from Congress.
    The Administration's budget proposes to increase the interest rate 
charged on all new investments in these hydroelectric facilities to a 
level that is charged to government corporations--the rate that 
reflects the interest cost for the federal government to provide loans 
to government corporations. SEPA, SWPA and WAPA are neither government 
corporations nor do they borrow funds from the U.S. Treasury. All rates 
are set to recover the dollars appropriated by Congress for the 
investment in the hydroelectric facilities and to cover the cost to 
operate these projects. If implemented, this proposal could increase 
rates considerably for customers served by most of the Power Marketing 
Administrations.
    This proposal creates a serious precedent and should be rejected, 
because: (1) the process for implementing the proposal can be done 
without congressional involvement or approval; (2) the proposal would 
arbitrarily raise revenue from electric customers for deficit 
reduction; and (3) the proposal reverses decades of rate making 
precedent and accepted cost recovery practices by administrative fiat. 
We urge the Subcommittee to block the implementation of this proposal.
    Bonneville Power Administration ``Net Secondary Revenue'' 
Proposal.--Also included in DOE's fiscal year 2008 budget is a proposed 
administrative action that would direct the Bonneville Power 
Administration (BPA) to use any net ``secondary market revenues'' in 
excess of $500 million per year towards accelerated federal debt 
repayment. Because the change would be made through the rulemaking 
process, congressional approval is not needed for the policy to go into 
effect. This proposal was strongly opposed by Congress in fiscal year 
2007, and was ultimately blocked by Congress for that year. The Office 
of Management and Budget (OMB) calculates that this plan would provide 
a total of $924 million from fiscal year 2007-2016 from these ``higher-
than-historical net secondary revenues.'' OMB believes that this 
measure is needed to free up BPA borrowing authority. However, experts 
in the Northwest have calculated that the proposal would result in a 10 
percent wholesale rate increase that BPA would be forced to pass on to 
ratepayers. The Congressional Budget Office has calculated that the 
effect of the Administration's proposal on the U.S. Treasury would be 
$300 million over 10 years beginning in 2008. We urge the Subcommittee 
to block the implementation of this proposal.
    ``Emergency'' Purchase Power and Wheeling.--This new Administration 
proposal for fiscal year 2008 would require that any funds used from 
the ``Continuing or Emergency Funds'' be paid back within a year of 
being used. Like the Agency rate and net secondary revenue proposals, 
this one can be implemented administratively. Currently, in most cases, 
the PMAs have 3-5 years to recoup those funds from the customers--paid 
back with interest. Emergency funds are available to the PMAs when an 
unforeseen emergency situation (such as a drought) causes them to go 
beyond their allotted ceiling for purchase power and wheeling 
expenditures in a given fiscal year. Similar to the Agency rate 
proposal, this change is unjustified from a practical standpoint and is 
also problematic from a precedent-setting perspective. We urge the 
Subcommittee to block implementation of this proposal.
    Purchase Power and Wheeling.--We urge the Subcommittee to authorize 
appropriate levels for use of receipts so that the Western Area Power 
Administration (WAPA), the Southeastern Power Administration (SEPA) and 
the Southwestern Power Administration (SWPA) can continue to purchase 
and wheel electric power to their municipal and rural electric 
cooperative customers. Although appropriations are no longer needed to 
initiate the purchase power and wheeling (PP&W) process, the 
Subcommittee continues to establish ceilings on the use of receipts for 
this important function. The PP&W arrangement is effective, has no 
impact on the federal budget, and is supported by the PMA customers who 
pay the costs. We agree with the Administration's budget requests for 
PP&W for fiscal year 2008, which are as follows: $425.2 million for 
Western Area Power Administration (WAPA); $62.2 million for 
Southeastern Power Administration (SEPA); and $45 million for 
Southwestern Power Administration (SWPA).
    Costs of Increased Security at Federal Multi-Purpose Projects.--
Following the attacks of September 11, 2001, the Bureau of Reclamation 
(Bureau) embarked upon an aggressive program to enhance the security of 
federal dams to protect the facilities against terrorist attacks. Based 
on historical precedent, the Bureau initially determined that the costs 
of increased security measures should remain a non-reimbursable 
obligation of the federal government. In fiscal year 2005, however, the 
Bureau reversed its position and asked for some of these costs to be 
reimbursed from power customers. That year, Congress disagreed with the 
Bureau's request that these expenses be reimbursable, but the following 
year, Congress directed that $10 million of the estimated $18 million 
for guards and patrols be provided by reimbursable funding. The bill 
also directed the Bureau to provide a report to Congress within 60 days 
that would delineate the planned reimbursable security costs by 
project. The report (issued in March 2006) was similar to the previous 
(May 2005) report, except that it also included ``facility 
fortification upgrades'' as a reimbursable cost. Previously, the Bureau 
had assured its stakeholders that only the costs of guards and patrols 
would be reimbursable. There has been some clarification on that 
position, but it is not entirely clear how replacement/upgrades would 
be treated. The Administration's fiscal year 2008 request for the 
Bureau's site security is $35.5 million, of which $18.9 million (for 
guards and patrols) would be designated reimbursable from water and 
power customers. This additional obligation in essence makes everything 
reimbursable at some point. Regardless of the details of the Bureau's 
report, APPA continues to believe in the validity of the historic 
rationale established in the 1942 and 1943 Interior Department 
Appropriation Acts for treating costs of increased security at multi-
purpose federal projects as non-reimbursable obligations of the federal 
government. We therefore urge Congress to add language to the Energy 
and Water Development Appropriations Act of 2008 to clarify that all 
costs of increased security at dams owned and operated by the Bureau be 
non-reimbursable.
    Renewable Energy Production Incentive (REPI) and Renewable Energy 
Programs.--The Department of Energy's REPI program was created in 
1992's Energy Policy Act (EPAct) as a counterpart to the renewable 
energy production tax credits made available to for-profit utilities, 
and was recently reauthorized through 2016 in the Energy Policy Act of 
2005 (EPAct05). EPAct05 authorizes DOE to make direct payments to not-
for-profit public power systems and rural electric cooperatives at the 
rate of 1.5 cents per kWh (1.9 cents when adjusted for inflation) from 
electricity generated from a variety of renewable projects. According 
to DOE sources, in order to fully fund all past and current REPI 
applicants, over $80 million would be needed for fiscal year 2008. 
Despite the demonstrated need, however, DOE has asked for only $4.96 
million for fiscal year 2008, citing budgetary constraints. We greatly 
appreciate the Subcommittee's interest in this small but important 
program as evidenced by its support of funding for the program either 
at or above the Administration's budget requests in the last few years 
despite the tight budgetary environment. We urge the Subcommittee to 
continue its support with an even greater increase.
    Storage for High-level Nuclear Waste.--We support the 
Administration's efforts to finalize the location of a permanent 
storage site at Yucca Mountain, Nevada. The Administration requested 
$494.5 million for fiscal year 2008, a decrease of $50 million from its 
fiscal year 2007 request, for the nuclear waste repository at Yucca 
Mountain. We encourage the Subcommittee to provide funding for the 
project at or above the Administration's request.
    Advanced Hydropower Turbine Program.--APPA is disappointed with the 
Administration's decision to phase out this important program to 
develop a hydroelectric turbine that will protect fish and other 
aquatic habitats while continuing to allow for the production of 
emissions-free hydroelectric power. We urge the Subcommittee to 
consider providing funding for this important initiative.
    Energy Conservation.--APPA appreciates the Subcommittee's interest 
in energy conservation and efficiency programs at DOE and we hope that 
the Subcommittee will once again allocate a funding level over and 
above the Administration's request for fiscal year 2008.
    Weatherization and Intergovernmental Activities.--APPA is 
disappointed with the Administration's request of $204.9 million for 
fiscal year 2008, a decrease of $20.1 million from its fiscal year 2007 
request, for helping to increase the efficiency of commercial and 
residential buildings, including weatherization assistance, and to 
support the state and community energy conservation programs.
    Clean Coal Power Initiative and FutureGen.--APPA supports the 
Administration's request of $73 million for fiscal year 2008 for the 
Clean Coal Power Initiative. This is consistent with the President's 
commitment to fund this program at $2 billion over 10 years. We also 
urge the Subcommittee to provide the $108 million in newly requested 
funding for fiscal year 2008 for the FutureGen program.
    Distributed Generation Fuel Cells.--APPA is disappointed with the 
Administration's request of $62.03 million for fiscal year 2007 for 
distributed generation fuel cell research and development, and urges 
the Subcommittee to allocate additional funding for this program.
    Hydrogen Fuel Initiative and Vehicle Technologies.--APPA supports 
the Administration's efforts to improve the feasibility of making 
available low-cost hydrogen fuel cells, and supports its request of 
$309 million for hydrogen research and development in fiscal year 2008. 
APPA also supports the Administration's fiscal year 2008 request for 
$176 million for vehicle technologies that would apply hydrogen fuel 
cell technology to vehicles as well as provide for research for hybrid 
and electric vehicle technologies to facilitate widespread deployment 
of these technologies.
    Navajo Electrification Demonstration Program.--APPA supports full 
funding for the Navajo Electrification Demonstration Program at its 
full authorized funding level. The purpose of the program is to provide 
electric power to the estimated 18,000 occupied structures in the 
Navajo Nation that lack electric power.
    National Climate Change Technology Initiative (NCCTI).--APPA 
supports the Administration's efforts to promote greenhouse gas 
reductions through voluntary programs and investments in new 
technologies. We encourage the Subcommittee to consider allocating 
additional funds for the policy office of the NCCTI.
    Federal Energy Regulatory Commission (FERC).--DOE has requested 
$255.4 million for the overall operations of the Federal Energy 
Regulatory Commission (FERC) for fiscal year 2008. APPA supports this 
request, which is an appropriate increase of $24.6 million over the 
fiscal year 2007 request given FERC's additional responsibilities under 
EPAct05.
                                 ______
                                 
             Prepared Statement of the University of Tulsa

Background and Issues
    September 11, 2001, confirmed that both Middle East oil dependence 
and fragile infrastructure threaten national security. Domestic energy 
systems aren't secure unless they're designed to make large-scale 
failures impossible and local failures benign. Today the opposite is 
true in the oil and gas sector: The United States' extraordinarily 
concentrated energy flows could allow a devastating attack. Production 
of oil and gas, especially in the United States are also dwindling with 
each passing year. So has the ability to process the oil into valuable 
products such as gasoline to drive our vehicles. The United States 
depends on oil to move people and goods. Ninety five percent of the 
energy for transportation in the United States comes from oil. 
Transportation's demand for oil drives the market. Transportation 
accounts for two-thirds of total U.S. petroleum use, and nearly all of 
the high value petroleum products, like gasoline and distillate fuel.
    In the past, dependence on oil has cost our economy dearly. Oil 
price shocks and price manipulation by the OPEC cartel from 1979 to 
2000 cost the U.S. economy about $7 trillion, almost as much as we 
spent on national defense over the same time period and more than the 
interest payments on the national debt. Each major price shock of the 
past three decades was followed by an economic recession in the United 
States. With growing U.S. imports and increasing world dependence on 
foreign oil, future price shocks are possible and would be costly to 
the U.S. economy.
    On the government side, money has dried up, or is drying up, for 
oil and gas research as well. The Gas Research Institute (GRI) at one 
time funded close to $200 million per year in gas-related research. 
GRI's support came from a Federal Energy Regulatory Commission-mandated 
surcharge on interstate gas sales. The surcharge was phased out; 
however, producing an estimated $70 million in 2001, $60 million in 
2002-2004. In July 2005, Subtitle J Ultra-Deepwater and Unconventional 
Natural Gas and Other Petroleum Resources were passed into law. The 
program under this subtitle addresses three areas: (1) Ultra-deepwater 
architecture and technology in the Outer Continental Shelf to depths 
greater than 15,000 feet, (2) unconventional natural gas and other 
petroleum resources, and (3) the technology challenges of small 
producers. The program guarantees to provide $50,000,000 per year with 
the potential of an additional $100,000,000 per year over the next 10 
years. These funds should provide some long term solutions, but it 
should be noted that only a small portion of these funds (7.5 percent) 
will be used on conventional oil and gas studies that benefit the small 
producers. Furthermore, with this passage, additional pressure will be 
applied to close the National Energy Technology Office in Tulsa 
(formerly the National Petroleum Technology Office which was 
consolidated into the NETL in December 2000). Ironically, the Energy 
Bill provides almost no support for domestic oil production which 
desperately needs new technologies for mature fields to continue to 
support the Nation's energy future.
    Research and Development (R&D) funding for major oil companies and 
service companies hit bottom around 2003 and increased significantly 
each year until at least 2005. The major oil companies during this 
period were increasing funding at around 20 percent year-over-year and 
the service companies were increasing funding at 10-15 percent. The 
real issue is what are the major companies researching. In general it 
is not things that benefit independent operations in the United States. 
Major integrated oil and gas producers have largely moved offshore or 
overseas. This has left onshore production increasingly in the hands of 
small independent producers who lack the resources to conduct R&D.
    TU has been one of the leaders in providing new technologies for 
the oil and gas industry for almost a half century. DOE funding of our 
programs over the past 10 years has been integral to our growth. This 
growth is now being threatened. So, where will the funds come from to 
support conventional oil and gas research?

                                SOLUTION

    Ultimately, the solution to the oil dependence problem lies in 
technological progress: developing technologies to find, process, and 
use energy more efficiently, and by creating new energy sources that 
can replace petroleum cleanly and inexpensively. However, if the 
science is not done now, the technology will not be available in the 
future when it is critically needed.
    Energy security requires a program that focuses on infrastructure 
security, energy diversification and energy efficiency while facing 
energies challenges. This must be accomplished with environmentally 
friendly technologies using global partnerships and collaboration 
efforts. The University of Tulsa has many components of such a system 
in place and is now working on a plan to include others. In the 
meantime, our federal government must focus more of its funds on 
conventional oil and gas upstream and downstream research while other 
alternatives are developed, such as those through Subtitle J. These 
technologies can't be abandoned because potential replacement 
technologies are years away. It is critical that congress increase its 
commitment to oil and gas research. According to House Rpt. 108-542 
Department of Interior and Related Agencies Appropriation Bill, 2005: 
``Oil and natural gas research is critical to improving current 
technology and ensuring the best use of our domestic oil and gas 
reserves. Despite the Committee's urging to the contrary, these 
research areas continue to be seriously under funded in annual budget 
requests.'' Unfortunately, trends in industry are working against this 
need of additional funds as well.
    The DOE allocates less than 0.3 percent of its budget to actual oil 
and gas research yet ninety five percent of the energy for 
transportation in the United States comes from oil. We urge you to 
reverse the trend and insure that funding is in proportion to the 
problems faced for the sake of our national security.
    Complicating this year's funding issues is the Administration's 
support for major hydrogen energy research at the expense of a 20 
percent reduction in energy efficiency and renewable energy efforts at 
DOE. The hydrogen fuel concept is not generating new energy, but merely 
using hydrogen as a carrier for natural gas or other energy sources 
without any infrastructure to support its wide deployment, whereas 
energy efficiency is the cheapest and quickest way to create more 
available energy for the Nation's future growth. Renewable energy is 
critically important for Oklahoma which possesses abundant wind and 
solar energy potential as well as a fledgling, but rapidly growing, 
biofuel industry. Biodiesel and cellulosic ethanol R&D are very 
important for the Nation while the corn ethanol boom actually diverts 
much needed fossil fuels to its production at very little gain in 
overall energy. Corn ethanol competes directly with beef and other 
livestock production which will adversely impact Oklahoma and other 
states. Further expanding its use at taxpayers' expense will not 
achieve desired energy goals and will create problems in other 
commodities.
    We urge you to reduce hydrogen fuel research and continue robust 
energy efficiency and renewable energy R&D at DOE as well as to 
reinstate a federally managed oil and gas program which complements the 
Energy Policy Act of 2005's consortium approach to natural gas R&D. 
This will have the additional benefit of supporting academic programs 
in petroleum, geosciences, and engineering which are shortchanged in 
the Administration's new approach.
    We thank you for the opportunity to submit this testimony and look 
forward to working with you to ensure that funding for conventional oil 
and gas research continues.
                                 ______
                                 
      Prepared Statement of the American Museum of Natural History

About the American Museum of Natural History
    The American Museum of Natural History [AMNH] is one of the 
nation's preeminent institutions for scientific research and public 
education. Since its founding in 1869, the Museum has pursued its 
mission to ``discover, interpret, and disseminate--through scientific 
research and education--knowledge about human cultures, the natural 
world, and the universe.'' It is renowned for its exhibitions and 
collections of more than 32 million specimens and cultural artifacts. 
With nearly four million annual visitors, its audience is one of the 
largest and most diverse of any museum in the country. Museum 
scientists conduct groundbreaking research in fields ranging from all 
branches of zoology, comparative genomics, and bioinformatics to earth, 
space, and environmental sciences and biodiversity conservation. Their 
work forms the basis for all the Museum's activities that seek to 
explain complex issues and help people to understand the events and 
processes that created and continue to shape the Earth, life and 
civilization on this planet, and the universe beyond.
Support for Department of Energy Science Mission and Goals
    The Department of Energy (DOE) is a leading science agency, 
committed to enhancing U.S. competitiveness by providing world-class 
scientific research capacity and by advancing scientific knowledge in 
physical sciences and areas of biological, medical, environmental, and 
computational sciences-including genomic science. The American Museum 
of Natural History, in turn, is home to one of the world's largest 
natural history collections and to a preeminent molecular research 
program, which aligns with key areas of DOE's mission areas and 
research priorities.
    Building on its strengths in genomic science, in 2001 the Museum 
launched the Institute for Comparative Genomics. The importance of 
comparative genomics cannot be overstated, as investigating genomics 
with a natural history perspective enlarges our understanding of the 
evolutionary relationships among organisms, including threat agents, 
and offers important applications for human health. The Institute's 
research programs leverage the Museum's unique expertise in 
evolutionary biology and draw on its unparalleled facilities, including 
a 700 CPU parallel computing cluster (the fastest, we believe, 
installed in an evolutionary biology laboratory and one of the fastest 
in a non-defense environment), high throughput sequencing capacity, and 
an ultra-cold tissue collection that stores specimens with preserved 
DNA, as well as expertise in using remote sensing and Geographical 
Information System (GIS) technologies to applied research questions.
    The Institute has already enjoyed significant research 
achievements, which include advancing understanding of bacterial 
genomics and the evolution of pathogenicity, developing computational 
techniques to analyze chromosomal sequence data, and winning grants to 
lead international teams in assembling the ``Tree of Life'' and for 
large-scale collaborative projects in the frontiers of integrative 
biology and in plant genomics. Other current projects include 
sequencing pathogens and, with NIH support, tracing the evolution of 
pathogenicity and transfer of disease-causing genes over time and 
between species-contributing to the advancement of national security 
research by increasing the knowledge base of current pathogen 
distribution and motility in the landscape. With this distinguished 
record, the Institute now seeks to advance its microbial genomics and 
computation research and training programs, including upgrading high 
throughput instrumentation, expanding the supercomputing cluster for 
biocomputation, supporting postdoctoral trainees to build the 
scientific workforce to sustain America's competitiveness, and 
expanding related public education and outreach in a teaching 
laboratory located in the new Hall of Human Origins.
    Recognizing its potential to support the Department of Energy in 
its goals to strengthen U.S. scientific discovery and economic 
competitiveness, advance the frontiers of knowledge in areas of 
biological and computational sciences, and provide the laboratory 
capabilities and infrastructure required for U.S. scientific primacy, 
the Museum seeks in fiscal year 2008 to draw on the unparalleled 
resources of its Institute of Comparative Genomics in a partnership 
with DOE to advance these shared goals.
                                 ______
                                 
       Prepared Statement of the American Wind Energy Association

   increased r&d investments are crucial for wind energy to become a 
 mainstream power source and help significantly reduce global warming 
                               pollution
    The American Wind Energy Association \1\ (AWEA) appreciates this 
opportunity to provide testimony for the record on the Department of 
Energy's fiscal year 2008 wind energy program budget before the Senate 
Appropriations Subcommittee on Energy and Water Development.
---------------------------------------------------------------------------
    \1\ The American Wind Energy Association or AWEA, was formed in 
1974. The organization represents virtually every facet of the wind 
industry, including turbine and component manufacturers, project 
developers, utilities, academicians, and interested individuals.
---------------------------------------------------------------------------
    For fiscal year 2008, the Bush Administration requested wind energy 
research and development (R&D) investments of only $40.1 million--a $4 
million cut below current spending. This funding request does not 
recognize the strong contribution that wind energy is making--and can 
make--to produce clean energy, new jobs, and significant reductions in 
global warming pollution.
Request for the Department of Energy Wind Program: $110 million
    AWEA requests a funding level of at least $110 million for the wind 
energy program at the Department of Energy (DOE) to support wind energy 
development at the national, state, and local levels. Working in 
conjunction with the U.S. wind industry, power producers, suppliers, 
industrial consumers and residential users, DOE provides important 
technical support, guidance, information, and limited cost-shared 
funding for efforts to explore and develop wind energy resources.
    AWEA would like to commend the DOE wind program for its efforts to 
involve the industry in its program planning process. As a whole, the 
department has solicited input from AWEA on the direction of its 
program and has been responsive to comments received from the industry.
            Overview
    Wind energy could ``supply up to 20 percent of our nation's 
electricity.''--President George W. Bush, February 20, 2006.
    Wind energy development in the United States is coming off a record 
year, with nearly 2,500 megawatts (MW) of new wind energy installed 
across 22 states. The industry expects to break that record in 2007. At 
the beginning of 2007, over 11,000 MW of wind energy facilities are 
operating in the United States, producing the equivalent amount of 
electricity needed to power about 3 million average American 
households.
    Wind energy works for the environment and the economy because it 
generates energy without fuel, while providing a reliable hedge against 
rising energy costs. In addition, wind lowers consumer energy prices by 
offsetting increased costs in fossil fuels, offers significant rural 
economic development opportunities for communities, strengthens the 
nation's security by lessening our reliance on foreign sources of 
energy, and provides clean, emission-free electricity.
    The industry believes that with smart investments today, wind can 
grow to supply fully 20 percent of America's electric power. During his 
2006 State of the Union speech, President Bush stated that wind could 
eventually supply 20 percent of our electric supply and proposed 
spending more on R&D. With these factors in mind, wind energy is on the 
verge of becoming a major player in energy supply for the nation. 
However, a number of obstacles must be eliminated in order for wind to 
reach its full potential and become fully cost competitive with 
traditional energy technologies.
    The work that takes place at DOE's wind program is a vital 
component in helping to eliminate those obstacles. AWEA appreciates the 
support the subcommittee has provided to the DOE wind program in recent 
years.
    For fiscal year 2008, the Administration requested only $40.1 
million, which is a $4 million cut below current spending of $44 
million. This funding request is not consistent with the President's 
call for more R&D in this area and does not recognize the strong 
contribution that wind energy is making--and can make--to produce clean 
energy, new jobs, and significant reductions in global warming 
pollution.
    We strongly believe that the funding provided by the subcommittee 
should reflect the important work conducted by the wind program and 
respectfully request that funding be significantly increased above the 
request level.
    The wind energy program at the Department of Energy has a strong 
history of success. Over the last twenty years, the cost of wind energy 
has dropped by more than 80 percent, to a level that is close to 
competitive with traditional energy technologies. The cost of wind 
energy is currently between 5.5 to 9.5 cents per kilowatt hour (kWh), 
not including the Production Tax Credit (PTC). Over the last 2 years, 
however, the cost of wind energy--and all other sources of producing 
electric power--has actually been going up due to increases in 
commodity prices and short-term extensions of the renewable energy PTC.
    Cost shared industry/government research and development activities 
at DOE and the National Renewable Energy Laboratory (NREL) have played 
an important role in this achievement. Programs such as Wind Powering 
America have been extremely effective in educating interested parties 
across the country on the benefits of wind power. We strongly support 
the continuation of the project.
Utility-Scale, Land-Based Turbine Technology: $50 million
    The requested funding for further development of utility-scale, 
land-based turbine technology is very important to the wind industry. 
The wind industry requests $50 million for this program in order to 
reduce capital cost, improve capacity, and provide a foundation for 
wind energy technologies.
    The primary focus of this program is to reduce costs and increase 
reliability of the technology. Federal investments are needed because 
there are fundamental technical issues that are not yet understood that 
are decreasing reliability and increasing costs. In addition, dramatic 
cost reductions will almost certainly require application of unproven, 
high risk concepts, such as those below:
            Component Development
    Rotor blades.--There are multiple opportunities for advanced 
materials and blade configurations to reduce the cost of energy from 
wind turbines. Promising areas for additional support are in developing 
turbine blades that can be easily assembled on-site and developing 
aeroelastically tailored blades, or blades that are able to change 
shape in response to the wind as a means of limiting stress.
    Controls Sensors.--Advanced sensors to monitor the loading and 
position of wind turbine blades and other components that can be cost-
effectively combined with modern control theories.
    Other Components.--Towers and drive train systems are other major 
components where innovation is needed to reduce the cost of energy. In 
particular, developing a tower system that addresses transportation and 
installation constraints currently preventing further cost savings in 
these areas is of crucial importance.
            Advanced Controls and Models Research
    The application of innovative turbine control strategies shows 
considerable promise in helping to reduce loads and thus reduce the 
cost of energy. Substantial work is needed to fully understand the 
complex relationship between atmospheric conditions and wind turbine 
dynamics and how to utilize controls to optimize performance and 
minimize costs.
            Resource Characterization
    For advanced control theory to optimally reduce loads, the 
characteristics of the atmosphere within which the turbines are 
operating must be better understood. Research dollars focused on 
achieving the best means of characterizing the variations in wind 
across the rotors depending on wind speeds and height of the turbines, 
tools to measure these characteristics, and models to represent the 
inflow for analytical purposes are all important efforts.
Market Acceptance/Transformation: $34 million
    We request $34 million for market acceptance/transformation 
activities at DOE. Increased funding in this area would be targeted 
toward better understanding the impact of wind turbines on wildlife as 
well as developing tools and educational materials for policy makers 
and regulators to assist them in better understanding the environmental 
impact of wind energy projects. Funds are used for cost-shared research 
programs with industry and wildlife organizations to address targeted 
issues with avian and bat species.
    States and permitting officials also seek technical assistance on 
project siting issues. DOE could serve as a clearinghouse for 
information and resources in these areas. Outreach to these audiences 
is also required so permitting authorities feel they are making 
informed choices. In addition, resources in this area would also be 
used to develop updated resource maps at an elevation of 100 meters 
above ground level. These maps have identified previously unknown wind 
resources in several states, spurring interest in the resource from 
state policy makers and regulators.
Reliability and Testing: $10 million
    We would like to see $10 million provided for reliability and 
testing. Increased funding in this area would be used for three primary 
purposes:
  --Support for a public/private partnership to build blade and 
        dynamometer test facilities;
  --Initiation of research that will increase the reliability of wind 
        project energy projections, and;
  --Expansion of research into the causes of premature failure of major 
        wind turbine components such as gearboxes and generators.
Advanced Applications: $10 million
    The Advanced Applications research will be targeted toward the 
integration of wind energy into generation of hydrogen, deep-water 
offshore technology research, resource characterization, loads and 
environment characterization and the environmental impacts of offshore 
applications. The wind industry requests $10 million to fund research 
in these areas. Such research is needed to identify the potential for 
wind energy in these areas as well as position the United States to 
play a leading role in the development of environmentally compatible 
wind energy applications.
    AWEA believes that offshore wind energy facilities can play an 
important role in meeting the long-term energy needs of the country. 
However, we also believe that the focus of the DOE program in the near 
future should be placed on R&D efforts for land-based turbines.
Distributed Wind Systems (100 kW and below): $6 million
    AWEA is encouraged by DOE's proposed increase for small wind R&D, 
but believes an even greater emphasis is needed for this technology 
(used to power an individual home, farm or small business). Distributed 
generation with small customer-sited power plants has great potential 
for reducing energy costs, promoting competition in the marketplace, 
and strengthening the nation's electrical supply network.
    This program has provided invaluable support for the development 
and testing of more reliable small turbines for homes and businesses. 
The development of computer simulation tools allows designers to 
understand the furling behavior (when a turbine turns itself out of the 
wind during periods of very high wind speeds) of the turbines. AWEA 
believes that a $6 million DOE small wind budget would ensure that 
additional support is provided for certification testing of small wind 
generators. $6 million would also adequately fund research into 
manufacturing techniques to produce high-volume, low-cost components, 
with aerospace material properties and performance. These are all areas 
where support is needed to reduce the cost of energy and increase the 
reliability of small turbines.
    The high up-front costs of small wind systems make it very 
difficult for this technology to gain wide acceptance in the domestic 
market. This would change if DOE had the resources to work with 
America's small wind manufacturers to achieve cost reductions similar 
to those achieved by the large, utility-scale wind industry. In some 
states that provide a rebate for purchasers, small wind turbine 
manufacturers have experienced a surge in sales, demonstrating the 
public support for cost-effective small wind turbines.

                   ADDITIONAL WIND INDUSTRY PRIORITY

Wind Energy Integration Efforts within DOE's Electricity Delivery and 
        Energy Reliability Office (This funding is not located in the 
        DOE Wind Account.)
    DOE has requested only $115 million--an 8 percent cut--for its 
Electric Delivery and Energy Reliability Office responsible for 
assisting in modernization of the electric grid, including transmission 
corridor designation and federal line permitting under the Energy 
Policy Act of 2005. This work is crucial to growing the wind industry 
because it holds the key to moving wind energy from generally rural 
areas where it is produced to population centers where it is needed.
    Resources would be focused on continuing the educational activities 
that allow utilities and policy makers to make informed decisions 
regarding the impact of wind on the electric transmission system. As 
the industry grows and the size of wind projects increases, additional 
case studies showing the impact of these large projects on the grid are 
needed. The industry has experienced considerable success in completing 
integration studies of major portions of the Midwestern grid. These 
studies have been well received by regulators and transmission 
providers and have helped to quantify the impact of wind on the 
transmission system. Similar studies of the western portion of the 
country and studies of higher wind penetration levels are needed. 
Additionally, educational materials for utility control room operators 
to help them understand the impact of wind power plants and how they 
can manage operational impacts with new forecasting tools would be 
helpful.

                               CONCLUSION

    The President and the Congress have called for an increased 
commitment to the development of domestic renewable energy resources, 
particularly wind energy, to meet our nation's growing demand for 
electricity. Continued investments in wind energy R&D are delivering 
value for taxpayers by developing a domestic energy source that 
strengthens our national security, fosters rural economic development, 
creates new high-tech jobs, and helps protect the environment.
    While the wind industry continues adding new generation capacity, a 
number of challenges still exist. Continued support for the Department 
of Energy's wind program is vital to helping wind become a mainstream 
energy source that helps significantly reduce global warming pollution. 
We believe that the funds appropriated to the wind program need to be 
commensurate with the President's call for more renewable energy, and 
urge the subcommittee to approve a significant increase in funding for 
the wind program.
    AWEA appreciates the opportunity to provide this testimony to the 
Subcommittee. Thank you.
                                 ______
                                 
 Prepared Statement of the National Research Center for Coal and Energy

  PROGRAMS IN FOSSIL ENERGY, ENERGY EFFICIENCY, AND ENERGY RELIABILITY

    Thank you for considering testimony from the National Research 
Center for Coal and Energy (NRCCE) on programs in Fossil Energy, Energy 
Efficiency, and Electricity Delivery. Comments and recommendations are 
provided in the following sections of our testimony.
Office of Fossil Energy
    Our focus is on the core Fossil Energy R&D program, for which the 
Administration has recommended insufficient funding for fiscal year 
2008.
Innovations for Existing Plants Program
    The United States currently has more than 300 GW of coal-fired 
capacity that supplies over 50 percent of the Nation's electricity. 
Twenty years from now, most of these plants will still be providing 
base-load power. The Innovations for Existing Plants Program addresses 
the continuing critical role these plants will play in the future. 
However, the Administration has chosen not to fund this program in 
fiscal year 2008. It is prudent to invest in improving the operation of 
our existing workhorse power generation fleet. Our nation will benefit 
from advanced technology's ability to reduce the environmental impact 
of energy generation. This program should be restored to its previous 
level of $25 million for fiscal year 2008.
  --Mercury Research.--Recent field tests on mercury control technology 
        have shown that more research is required to obtain sufficient 
        understanding of the chemistry of mercury for different coal 
        types and the effectiveness of capture processes. Of the 
        funding recommended, $10 million should be directed to the 
        control of mercury emissions.
  --Optimal Water use in Power Generation.--Power generation accounts 
        for 40 percent of all water withdrawals in the United States, 
        second only to agriculture, and competes with other industrial, 
        agricultural, and consumer needs. Water scarcity exists not 
        only in the arid Western States but also in the East where even 
        large rivers like the Potomac and Susquehanna are unable to 
        support additional power plants. Of the funding recommended, 
        $10 million should be directed toward optimizing the use of 
        water in power generation.
  --Use of Combustion By-Products.--The By-Products sub-element of the 
        Existing Plants Program keeps combustion by-products such as 
        coal ash and scrubber sludge out of waste streams from power 
        plants by developing environmentally friendly and economically 
        attractive alternative uses. Before this sub-program was 
        implemented, only 25 percent of combustion byproducts were 
        beneficially used. That number is now over 40 percent. Without 
        continued support, we expect increasing amounts of byproduct to 
        enter the Nation's landfills. Of the funding recommended, $3 
        million should be directed toward the combustion by-products 
        program.
Fuels Program
    NRCCE recommends adding $9 million to the Fuels Program to 
reinstate a national liquid fuels program as a major thrust area and $3 
million for the advanced separations research program.
  --Coal-to-Liquids.--The promise of coal-to-liquids (CTL) technology 
        for producing transportation fuels and chemicals has stimulated 
        expressions of interest from at least 10 governors, the U.S. 
        Department of Defense, and over 15 companies for constructing 
        plants to promote energy independence. Developers cite the need 
        for R&D to reduce plant costs, to improve conversion 
        efficiency, to reduce the environmental footprint of CTL 
        technologies, and to qualify CTL fuels for use in legacy and 
        future transportation vehicles.
    We need a national advanced core research program to ensure success 
of these new CTL plants, which in most cases will be first-of-a-kind 
commercial deployments in the United States. Funds should be directed 
toward computational research on process development and economic 
modeling, co-production with biomass and other technology advances to 
minimize CO2 emissions, and advanced research in catalysis, 
wax separation, and reactor design engineering. Ancillary benefits 
include educating the U.S.-based human resource pool needed to meet 
personnel demands created by deployment of CTL industries on a large 
scale. Of the amount recommended, $1 million should be directed to 
continue the work initiated under Annex II of the U.S.-China Protocol 
for Energy Research to obtain information about China's CTL technology 
and the environmental /economic impacts of CTL plants in Shanxi 
Province. This valuable information will be obtained at a small 
fraction of the cost of financing a similar program in the United 
States.
  --Advanced Separations Research.--The current emphasis on obtaining 
        clean gas streams in gasification plants and on reducing 
        mercury and other pollutant emissions from pulverized coal 
        plants warrants continued research in advanced separations. 
        This research will yield cleaner coals that combust more 
        efficiently, thereby reducing carbon emissions as well.
Carbon Sequestration
    The Zero Emissions Research and Technology (ZERT) Center is a 
consortium of five national labs and two universities that conducts 
coordinated research on geologic sequestration of carbon dioxide. The 
Center's fundamental research complements the Regional Carbon 
Sequestration Partnership and FutureGen programs and should be 
continued at $8 million in fiscal year 2008.
Oil and Natural Gas Programs
    The Fossil Energy program in oil and natural gas supports small and 
independent producers--companies which do not have the money and may 
not have the expertise to undertake advanced research to extract the 
harder-to-get resources from mature fields. The oil and natural gas 
programs are largely responsible for training our next generation of 
petroleum engineers and geologists. Projects funded by the oil and gas 
programs support more graduate student degrees in these areas than any 
other single source. The natural gas program is laying the groundwork 
for substantial future resource recovery, including production from 
methane hydrates (which represent a potential 100 years supply for the 
United States) and from deep reserves such as the three mile well 
recently completed in Texas. The enhanced oil recovery program has the 
potential to provide the United States with more than 89 billion 
barrels of domestic oil that is currently not recoverable while 
sequestering large quantities of CO2. Curtailment of these 
programs will severely restrict our ability to produce our oil and gas 
reserves. We recommend restoration of these programs to their previous 
historic levels.
  --Petroleum Technology Transfer Council.--We recommend continued 
        funding at a level of $2.8 million for the programs 
        administered by the Petroleum Technology Transfer Council 
        (PTTC). The PTTC, working regionally through 10 universities, 
        operates resource centers for oil and natural gas information, 
        training, and conferences, all directed to the needs of small 
        producers. PTTC programs play a critical role in providing 
        independent producers throughout the country access to the best 
        technology to explore for and to develop new and innovative 
        domestic energy opportunities while remaining competitive in a 
        global energy market. Federal support will be equally matched 
        with state and private dollars.
Advanced Research
    NRCCE recommends the addition of $5 million to the Advanced 
Research Program to support computational energy sciences and materials 
research.
  --Supercomputing Science Consortium.--One of the major components of 
        the Computational Energy Sciences program is support for 
        advanced computational research at universities and national 
        labs through time allocations at facilities such as the 
        Pittsburgh Supercomputing Center (PSC). This activity is 
        coordinated by the SuperComputing Science Consortium 
        (SC2), an organization consisting of the National 
        Energy Technology Laboratory (NETL), the PSC, and higher 
        education and advanced research organizations in the region 
        near NETL. The SC2 also conducts activities at the 
        K-12 educational level that stimulate students to undertake 
        science and engineering careers. Of the funds recommended, $2 
        million should be directed to the Computational Energy Sciences 
        budget to support the SC2 program.
  --Materials Research.--An expanded suite of advanced materials is 
        needed to improve the energy efficiency and environmental 
        performance of coal-based power systems. NRCCE recommends that 
        the Administration request for this program sub-element be 
        increased by $3 million to a level of $10.1 million for fiscal 
        year 2008. The additional funding should be directed toward the 
        development of specialty metals, new alloys, and surface 
        coatings that can function at substantially higher temperatures 
        and/or withstand highly corrosive environments in applications 
        such as sensors and controls, fuel cells, and harsh 
        environments in multiphase flow energy systems. Of the added 
        funding, $2 million should support initiatives at NETL-Albany 
        and universities, for which cost sharing from industry should 
        be required.
          office of freedom car and vehicle technologies/eere
    NRCCE recommends $3 million for two programs in vehicle 
technologies that promote reduced emissions and energy savings in the 
transportation sector.
  --Transportable Emissions Testing Laboratory.--U.S. DOE established a 
        specialized Transportable Emissions Testing Laboratory in 1989 
        for research on improving fuel economy, advancing alternative 
        fuels technology, and reducing exhaust emissions of heavy duty 
        vehicles. The Laboratory provides valuable data to government 
        agencies to establish reasonable emission level standards and 
        to assess the effectiveness of new technologies. Heavy-duty 
        engine emission standards established in 2007, and increasing 
        interest in biodiesel, ethanol, hydrogen, natural gas and coal-
        to-liquids fuel necessitate further advanced fleet performance 
        measurements. Of the funds recommended, the Transportable 
        Emissions Testing Laboratory program should be continued at $2 
        million in fiscal year 2008.
  --Lightweight Composite Materials.--Advanced composite materials 
        improve energy efficiency by reducing structural weight to 
        allow a higher fraction of payload for vehicles limited to the 
        80,000 pound maximum weight restrictions on national highways. 
        Results from this program enable the design and fabrication of 
        lighter-weight trailers, trucks, and buses. Significant fuel 
        savings and reduced emissions are obtained through improved 
        fuel efficiency associated with lighter vehicles and/or a 
        reduced number of trips to deliver multiple payloads. Of the 
        funds recommended, the Lightweight Composite Materials for 
        Heavy-Duty Vehicles Program should be continued at $1 million 
        for fiscal year 2008.

                 OFFICE OF INDUSTRIAL TECHNOLOGIES/EERE

    Wasted energy is the single largest source of currently available 
energy in the United States. The Industrial Technologies Program (ITP) 
in EERE is the DOE's lead agency for improving industrial energy 
efficiency through high-value research, plant assessments, software 
tools, and training. Enhanced industrial energy efficiency is the most 
cost-effective strategy for improving U.S. industrial competitiveness 
while reducing greenhouse gas emissions from energy-intensive 
manufacturing plants. In addition, the U.S. trade deficit can be 
reduced through export of industrial energy efficiency technologies and 
equipment to developing countries such as China and India. The ITP 
budget should be restored to its 2005 level of $73 million.

         OFFICE OF ELECTRICITY DELIVERY AND ENERGY RELIABILITY

    In fiscal year 2006, the Subcommittee appropriated funds for the 
Integrated Control of Next Generation Power Systems. This program 
enhances the reliability and security of the power grid through 
technology which is based on advanced communication, computer control, 
and electronics that enable real-time detection of system problems. The 
electrical circuits are then automatically reconfigured to minimize the 
potential impact of a natural disaster, human error, or a terrorist 
attack. This project will enable DOE to design system architectures to 
effectively control the intelligent, interoperable electric grids of 
the future. This program should be continued in fiscal year 2008 at $2 
million.
                                 ______
                                 
       Prepared Statement of the American Iron & Steel Institute

    The basis for this testimony is to urge Congress to restore funding 
of the Industrial Technologies Program (ITP) line item for Steel within 
the Energy Efficiency and Renewable Energy section at the Department of 
Energy [DOE] to the original level of $10 million.
    The stated goal of the ITP is to reduce the energy intensity of the 
U.S. industrial sector through coordinated research and development, 
validation, and dissemination of energy-efficiency technologies and 
operating practices. The Department of Energy and domestic steelmakers 
co-fund cutting-edge research that addresses the needs of the nation 
and our industry. The goal of these projects is to reduce energy 
consumption [thereby diminishing the nation's dependence on foreign 
sources of oil], lessen environmental impact [through emissions 
reductions] and increase the competitiveness of domestic manufacturers. 
Furthermore, what makes the ITP program so unique and appropriate is 
that only those projects with ``dual benefits'' [i.e., a public benefit 
such as reduced emissions or petroleum use, which justifies the DOE 
investment; and an industry benefit such as a more efficient 
steelmaking process, which justifies the industry investment] are 
initiated. It is important to note that federal funding does not go to 
steel companies, it is pooled with steel industry funds and awarded to 
qualified universities, national labs, and private research 
organizations through a competitive process.
    In 2003, Congress appropriated $10 million to fund the Steel 
component of ITP. Unfortunately, in recent years the program [and the 
projects it supported] suffered deep budget cuts. This is the case once 
again, as for fiscal year 2008, the administration requested 
approximately $1.6 million.
    It must be noted, that without restoring funding to fiscal year 
2003 levels, true breakthrough programs cannot be fully developed. 
Universities, research labs and steelmakers have reached the threshold 
of what can be accomplished [in energy-efficiency improvements and 
emissions reductions] under the current funding structure.
    The chart below is representative of the gains in energy efficiency 
made by materials manufacturers since 1990, i.e., during the time they 
have partnered with DOE. 


    This chart clearly shows that steelmakers have become very 
efficient for the processes they operate today. It is not coincidental 
these gains have occurred during the time the DOE ITP program for Steel 
was funded at $10 million annually. To make the type of gains in the 
future that have been seen since 1990, new process development is 
required and new process development requires funding be restored to 
historical levels. Some of the most promising new process development 
projects with the potential to reduce steelmaking CO2 
emissions by more than 70 percent are Ironmaking by Molten Oxide 
Electrolysis [now underway at the Massachusetts Institute of 
Technology] and Ironmaking by Flash Smelting using Hydrogen [University 
of Utah]. Both of these technologies show great promise and need fiscal 
year 2008 funding to proceed.
Summary
    The Industrial Technology Program-Steel selects projects that have 
both public and private benefits, justifying the investment of both DOE 
and industry. In addition, the research is conducted at the most 
qualified facilities in North America, with over 80 percent of funding 
supporting tasks at universities, national labs and technology 
developers, many of which are small businesses. ITP-Steel is a unique 
and successful program that is not only beneficial to the domestic 
steel industry; it is beneficial to the nation as we attempt to become 
more energy-efficient while significantly improving the environment.
    Please consider restoring ITP-Steel funding to the original level 
of $10 million so that its public and private benefits can reach even 
further into our economy. Thank you for your consideration.
                                 ______
                                 
    Prepared Statement of the Nuclear Engineering Department Heads 
 Organization (NEDHO) and the National Organization of Test, Research, 
                      and Training Reactors (TRTR)

    Chairman Dorgan, Ranking Member Domenici, members of the 
Subcommittee, we appreciate the opportunity to provide testimony to the 
Subcommittee regarding fiscal year 2008 Energy and Water Development 
Appropriations legislation. Together, NEDHO and TRTR provide 
representation for the entire U.S. academic nuclear engineering 
community on issues related to federal policy and funding.
    NEDHO and TRTR urge the Congress to provide funding for University-
based nuclear engineering programs and research reactor programs 
commensurate with the authorized levels of the Energy Policy Act of 
2005, which is $50.1 million for fiscal year 2008.
    The chart below provides a recommended breakdown of funding.

                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                     Fiscal Year
                       Item                         2008 Funding                Justification/Benchmark
----------------------------------------------------------------------------------------------------------------
Research.......................................              $30.1  Basic and mission-specific (applied)
                                                                     research.
Facilities.....................................               10    University-based research reactor fuel,
                                                                     instrumentation, safety, and security
                                                                     upgrades.
People Support and infrastructure..............               10    Nuclear Engineering/Health Physics
                                                                     fellowships, scholarships, matching grants
                                                                     and minority outreach.
                                                -------------------
    TOTAL REQUEST..............................               50.1  Fiscal year 2008 funding level authorized in
                                                                     the Energy Policy Act of 2005 (Public Law
                                                                     109-58).
----------------------------------------------------------------------------------------------------------------

    As you well know, Nuclear Science and Engineering (NSE) plays a 
critical role in ensuring the U.S. energy supply, reduction of the 
global warming gases, and the national security. With regard to energy 
independence, nuclear reactors are currently generating about 20 
percent of the nation's electricity needs, and have contributed to the 
reduction of nearly 700 million tons of carbon dioxide and over one 
million tons of nitrogen oxide. These are equivalent to 96 percent of 
carbon dioxide and 41 percent of nitrogen oxide emissions from 
automobiles in the United States.
    In order to meet the anticipated increase in electricity demand, 
utilities are planning to build new nuclear reactors. There will be a 
corresponding increase in demand for scientists and engineers to 
design, license, operate, and maintain these new reactors. Nuclear 
utilities, nuclear vendors, and the Nuclear Regulatory Commission (NRC) 
need hundreds of well-trained nuclear engineers and scientists. 
Moreover, a large number of nuclear scientists and engineers are needed 
to work within the DOE complex in such programs as the NP2010, 
Generation IV, Nuclear Hydrogen Initiative, and the Global Nuclear 
Energy Partnership (GNEP).
    In its early years, nuclear science and engineering received 
significant federal funding that led to major developments such as 
nuclear submarines, research reactors, and commercial power reactors. 
However, the TMI accident, cheap fossil fuels, significant delays in 
construction of nuclear plants due to changing regulations, public 
interventions, and a surplus of electricity led to a perception that 
nuclear engineering was a field without a future and as a result, 
undergraduate enrollments decreased. Graduate enrollments also 
decreased but at a somewhat slower rate since they are not linked as 
strongly to the nuclear power industry. This situation was exacerbated 
by the reduction of federal support for NSE, including research 
support, fellowships, and scholarships.
    The downturn in enrollments and reduction in federal funding led to 
the demise of over half of the NSE programs and university nuclear 
reactors from 1980 to 2000, leading to a seven-fold reduction in the 
number of BSE graduates over this period of time. Efforts to reduce and 
reverse these alarming trends in enrollments, departments, and reactors 
led to the revitalization of the University Programs within the Nuclear 
Energy office of DOE including funding for fellowships/scholarships, 
Nuclear Engineering Education and Research (NEER), Nuclear Energy 
Research Initiative (NERI), University Reactor Sharing and University 
Reactor Instrumentation programs, revitalization of radiochemistry, 
DOE-Industry Matching grant, Innovations in Nuclear Infrastructure and 
Education (INIE), and more recently, the Young Faculty awards. These 
programs contributed mainly to the graduate education and training of 
engineers and scientists needed for national laboratories, but they 
also helped to improve departmental and reactor facility 
infrastructure.
    Historically, Congress has provided funding for the nuclear 
engineering discipline through a separate line item in the U.S. 
Department of Energy, Office of Nuclear Energy entitled ``University 
Reactor Infrastructure and Education Assistance.'' This program has 
received modest increases in funding since the end of the 1990s when it 
was nearly zeroed out. In the fiscal year 2007, both the U.S. House and 
Senate Energy and Water bills recommended funding of $27 million.
    The existing funds are not stable and flexible enough to meet the 
current and the anticipated demand for NSE graduates (BS, MS, and PhD) 
over the next decade. Therefore, we believe that the nation's policies 
on energy and national security require the significant expansion of 
the U.S. nuclear engineering education enterprise. Driving factors for 
this expansion include the anticipated Nuclear Power Renaissance, 
increased focus and interest in developing advanced fuel cycle 
technologies and reactor designs, and the expanding need for 
development and deployment of nuclear materials detection technologies 
for homeland security and monitoring and prevention of nuclear 
proliferation.
    The U.S. nuclear engineering education community stands ready to 
meet these approaching challenges. However, it will require increased 
resources from the federal government--beyond the levels enacted in 
previous fiscal years--and include funding for scholarships and 
fellowships, support of university-based reactor facilities, and basic 
and applied research.
    As such, NEDHO and TRTR believe the federal government should 
provide funding for University-based nuclear engineering programs 
commensurate with the authorized levels of the Energy Policy Act of 
2005, which is $50.1 million for fiscal year 2008.
    Also, as we are sure the committee is aware; the Administration has 
proposed the termination of funding for the University Reactor 
Infrastructure and Education Assistance account line in its fiscal year 
2007 and fiscal year 2008 budget requests. DOE NE has indicated that 
its preference is to fund academic nuclear engineering research efforts 
through its existing program lines. This means the funds for 
infrastructure and fellowships/scholarships are significantly reduced 
or completely eliminated! It is quite unfortunate and unusual that in 
this time of great need for new nuclear engineers and scientists, the 
federal government is not providing funding for nuclear engineering and 
education.
    NEDHO and TRTR are not in a position to make recommendations as to 
the specific budgetary mechanics of providing funding to university 
programs. However, our two organizations believe strongly that 
university funding must be increased, stabilized, and flexible to allow 
for the current and expected growth to support expanded research, as 
well as reinvestment in human, reactor infrastructure, and major 
research equipment.
    Finally, we recommend that the Subcommittee consider the recent 
report by the American Nuclear Society, entitled ``Nuclear's Human 
Element.'' NEDHO and TRTR endorse the principal findings and 
conclusions of this report, which lays out a framework for improving 
federal investments in nuclear science and engineering education in the 
longer term. We believe to maintain the nation's competitiveness, it is 
essential that Congress and the Executive Branch take the necessary 
steps in establishing a strong and effective platform for meeting the 
technological and human resources need in nuclear science and 
engineering.
    We look forward to working with you in formation and implementation 
of a progressive program for nuclear engineering research and 
education.
    Thank you.
                                 ______
                                 
    Prepared Statement of the North American Die Casting Association

    As President of the North American Die Casting Association (NADCA), 
I respectfully submit this testimony in support of the HyperCAST 
funding request for $1.5 million in the U.S. Department of Energy, 
Energy Efficiency and Renewable Energy, Vehicle Technologies Program 
filed with the Subcommittee by Senators Edward Kennedy and Ken Salazar.
    NADCA is the nation's leading not-for-profit technical organization 
representing all facets of the U.S. die casting industry. NADCA exists 
to support our domestic industry and to maintain our global competitive 
lead through the continued development of cutting edge technology.
    NADCA has decades of successful experience coordinating research 
and development activities between various U.S. funding agencies (DOE 
and DOD), government laboratories, universities, and metalcasting 
companies. The technology and processes developed through these 
programs is rapidly transferred by NADCA to small, medium and large 
casting companies nationwide. Past programs have earned strong bi-
partisan support from Congress.

                                OVERVIEW

    Congress has long recognized the overwhelming need to dramatically 
curtail wasteful automotive and vehicle energy consumption in our 
nation. Maximizing energy efficiency in our domestic transportation 
system is a matter of economic security and environmental necessity.
    The North American Die Casting Association is collaborating with 
the U.S. Department of Energy, Vehicle Technologies Office in an effort 
to rapidly and dramatically advance these goals. This innovative and 
dynamic program is HyperCAST.
    The HyperCAST program goal is to support our nation's 
transportation energy efficiency goals by developing technology for 
high performance, light weight, cast metal components for energy 
savings in commercial and military vehicles and trucks.
    The HyperCAST program will deliver a variety of important benefits 
including:
  --Providing significant new energy savings in transportation 
        technology, commercial and military vehicles and trucks;
  --Developing new alloy and process development to maintain our 
        domestic casting industry as a technology leader in the world 
        market;
  --Conducting university based research at Ohio State University, Case 
        Western Reserve, the Colorado School of Mines, and Worchester 
        Polytechnic Institute;
  --Transfering new technology broadly to small and medium casting 
        shops across the United States . . . 80 percent of metalcasting 
        companies have fewer then 100 employees; and
  --Matching every federal dollar with contributions from industry.
    There is no doubt that enhanced fuel efficiency and alternative 
fuel vehicles contribute to our nation's energy security. High 
performance light weight components are necessary in making petroleum 
fueled cars and trucks more energy efficient. In addition, advanced 
high strength light weight materials and processes for the design of 
components offer the greatest opportunities for the development of new 
vehicles that do not require petroleum fuels.
    The HyperCAST research is targeted at the development of high 
performance light weight aluminum and magnesium castings for energy 
efficient components for transportation. More specifically, this 
project entails the development of materials and processes for cast 
light weight frame, body, chassis and powertrain components for fuel 
efficient passenger cars and both commercial and military trucks. 
Therefore, the project is cross-cutting as it serves to meet goals of 
the FreedomCAR and 21st Century Truck programs. The advanced materials 
and processes developed will have a focus on fuel efficiency and cost 
effectiveness.
    These important technological advancements will also enhance the 
U.S. metalcasting industry's ability to maintain a lead role in the 
world market. It is technology that enables this vital industry to 
compete globally and to keep jobs in the United States.
    The objective of HyperCAST is to develop materials and processes 
for high strength light weight cast components for vehicles that are 
affordable and offer the potential for 60 percent weight reduction and 
related improvement in energy efficiency. NADCA and university 
researchers are confident that these goals can be met without 
compromising vehicle performance, cost, safety or recyclability.
    The following examples are offered to describe the energy saving 
opportunities offered by the HyperCAST Program.
    Example 1: A cast aluminum engine block with cast iron sleeves 
currently weighs 85 pounds. Moving to a magnesium composite material 
would result in about the same productivity improvement but would yield 
a casting weight of 49 pounds--a savings of 36 pounds or 42 percent.
    Example 2: An aluminum transmission case casting currently weighs 
31 pounds. Casting this component with a new aluminum composite 
material and considering a 20 percent strength increase would yield a 
casting weight of 27 pounds. Produced as a magnesium composite 
material, the casting would weigh 22 pounds--a savings of 9 pounds or 
29 percent.
    The HyperCAST numbers show a dramatic potential for improvement in 
our nation's fuel efficiency and environmental impact. There is an 
average of 280 pounds of aluminum in a car. It is estimated that the 
HyperCAST technology can reduce that weight by 100 to 120 pounds 
without compromising strength, safety or performance. In addition, for 
every pound reduced automakers can cut two more pounds or 200 to 240 
more pounds, from the drive train. Finally, for every pound reduced in 
the car's weight, estimated at almost 360 pounds, an environmental 
benefit will be realized through an annual reduction in carbon monoxide 
of 2 pounds for every one reduced. That would be 720 pounds of carbon 
monoxide reduced annually for every car manufactured with the HyperCAST 
technology.
    This project will utilize researchers from the premier universities 
(Ohio State University, Case Western Reserve University, Colorado 
School of Mines, and Purdue University) and government laboratories 
with experience in cast materials and processes for the research 
activities, premier casting companies for demonstration of the research 
results, and the industry associations for coordination of efforts and 
technology transfer. The request is supported by the following:
  --Dr. Diran Apelian, Director of Metals Processing Institute at 
        Worcester Polytechnic Institute;
  --Dr. John Moore, Head of the Metallurgy Department at the Colorado 
        School of Mines;
  --Dr. David Schwam, Director of the Metal Casting Laboratory at Case 
        Western Reserve University;
  --Dr. Allen Miller, Professor in College of Engineering at Ohio State 
        University;
  --Tim Stewart, President and CEO of Yoder Industries in Dayton, OH;
  --Richard Rogel, President and CEO of Empire Die Casting., Inc in 
        Macedonia, OH;
  --Paul Head, Vice President of Operations at Empire Die Casting., 
        Inc.;
  --Robert Hopkins, Vice President of Administration at Empire Die 
        Casting., Inc.;
  --Robert Stuhldreher, Director of Casting Operations at Metaldyne in 
        Twinsburg, OH;
  --Scott A. Frens, Senior Sales & Tool Engineer at Fort Recovery 
        Industries in Fort Recovery, OH; and
  --Barry S. Houndshell, Director of Manufacturing at Fort Recovery 
        Industries.
    Finally, the technology developed will be distributed by NADCA 
solely to North American metalcasters in order to provide the North 
American industry with a globally competitive advantage and assist in 
maintaining the viability of metalcasting in North America.
    We hope we can depend on your support to fund this valuable and 
important program.
                                 ______
                                 
         Prepared Statement of the Fuel Cell Power Association

    The Fuel Cell Power Association appreciates the opportunity to 
submit this statement in support of the Department of Energy's Fossil 
Energy, Fuels and Power Systems, Fuel Cell Program. We urge the 
Subcommittee to continue to support this breakthrough program by 
appropriating $80 million for development of this highly efficient, 
clean, and secure energy technology.
    DOE's Fossil Energy Fuel Cell Program, through the Solid State 
Energy Conversion Alliance (SECA) fuel cell activity, is developing 
technology to allow the generation of highly efficient, cost-effective, 
carbon-free electricity from domestic coal resources with near-zero 
atmospheric emissions in central station applications. The program 
directly supports the president's FutureGen project through the 
development of cost-effective, highly efficient, power blocks that 
facilitate sequestration in coal-based systems. The technology will 
also permit grid independent distributed generation applications by 
2010.
    SECA fuel cell systems operating on coal gas are building blocks 
for zero emissions power, the ultimate goal of the President's 
FutureGen Program. These systems are projected to be available at a 
target cost of $400/kw. In addition the technology developed in this 
program will produce electricity at up to 60 percent efficiency in 
coal-based systems, produce near-zero emissions, and easily enables 
carbon sequestration.
    In all applications SECA fuel cells will be both low-cost, with the 
above-stated goals of $400/kw, as well as highly efficient. Integrated 
with coal gasification, the system's 60 percent efficiency compares 
very favorably to the existing coal-based power generation fleet 
average of about 33 percent efficiency. In distributed generation 
applications even higher efficiencies may be reached, and cogeneration 
opportunities can further increase efficiency.
    Along with these attributes fuel cells are one of the cleanest 
technologies available in terms of atmospheric emissions, which 
enhances their attractiveness for urban applications or applications in 
areas of non-attainment for Clean Air Act emissions. They have already 
achieved NOX and SOX emission levels of less than 
0.05 ppm compared to orders of magnitude higher for conventional 
technologies. They also provide 24 hour, silent operation.
    Finally, coal-based fuel cell systems will increase energy security 
by using domestic resources. In distributed generation applications 
fuel cells can eliminate transmission and distribution system 
infrastructure concerns and issues by providing generation near the 
point of use and by being able to operate in a grid-independent mode.
    The SECA Program consists of six integrated industrial 
manufacturing teams designing fuel cell systems, developing the 
necessary materials, and ultimately responsible for deploying the 
technology. These teams are complemented by up to three dozen core 
technology performers providing generic problem-solving research needed 
to overcome barriers to low-cost, high performance technology as 
identified by DOE and the manufacturing teams. The core technology 
teams are universities, national laboratories, and other research 
oriented organizations. This unique structure assures that a variety of 
approaches to solving the problems associated with fuel cells will be 
undertaken in a manner that will increase the chances of success for 
this highly complex technology.
    Several of the manufacturing teams are developing systems for 
application to large central generation systems characterized by 
FutureGen. The remaining manufacturing teams are developing fuel cells 
for possible use in both these large systems as well as in distributed 
generation applications such as auxiliary power units, military power 
applications and remote or on-site power generation.
    The DOE budget request for this program for fiscal year 2008 is 
$62.0 million, slightly below the fiscal year 2007 funding level of 
$63.4 million. Funding of $65 million will continue to support the 
current program, which involves larger-scale Phase II development work 
on the part of manufacturing teams in the program and continued effort 
by the core technology performers. However, in order to deliver full 
scale fuel cell system hardware for the FutureGen project additional 
support of $15 million is necessary to assist and accelerate the 
creation of manufacturing capability by the formation of teams between 
existing fuel cell stack developers and industry, with the goal of 
delivering hardware by the scheduled date of 2011, and also to keep the 
base program on schedule. A rapid advancement to large-scale 
manufacturing is critical to the successful use of fuel cells in the 
FutureGen project and subsequent use in Integrated Gasification 
Combined Cycle (IGCC) facilities on a commercial basis. Significant 
funding over the next several years will allow development of such 
capacity by 2010 so that fuel cell modules can be manufactured and 
delivered to the FutureGen project by 2011. These large-scale modules 
will lead to the higher efficiencies and cleaner performance necessary 
to assure the use of clean coal technologies in the long run.
    We believe that the SECA fuel cell program has achieved the 
progress to date as reported by the program managers, and has excellent 
prospects for achieving program objectives given sufficient funding 
support by DOE and the Congress. Hybrid technology has been 
successfully integrated into the program and an emphasis on use with 
coal-based systems has been established. Industry partners in the 
program have continued and increased cost-sharing support. All major 
stack developers have met the initial goals of the program allowing 
continuance to more advanced stages of development. This technology is 
essential to meeting the efficiency and emissions goals of the 
President's FutureGen program and will also provide low-cost, low-
emissions alternatives for distributed generation applications. 
Therefore, we urge you to support our request for $80 million to 
execute the DOE Fossil Energy, Fuels and Power Systems, Fuel Cell 
Program in fiscal year 2008.
                                 ______
                                 
  Prepared Statement of the Center for Plasma Science and Technology, 
 Florida A&M University, and the Department of Physics, West Virginia 
                               University

    Chairman Dorgan and Members of the Subcommittee: We request an 
appropriation of $5 million to the Fusion Energy Science Program, U.S. 
DOE Office of Science, for basic research on the control of turbulent 
hot plasma in fusion power reactors. This program contributes to the 
work of the International Thermonuclear Experimental Reactor (ITER) 
program, an international fusion effort to which the United States is 
committed as a full partner.
Introduction
    As global population increases and the standard of living of third 
world countries rises, the demand for energy will increase 
substantially over current levels. The report, Future of Coal, released 
March 14, 2007 by researchers at MIT, projects that fossil energy will 
be the dominant fuel source well into the future. Generating electric 
energy and powering our transportation sector with fossil fuels will 
substantially increase CO2 emissions, thereby exacerbating 
concerns about greenhouse gas emissions which can alter the global 
climate.
    Near term, we accept the reality that fossil fuels will power the 
global economy. Carbon sequestration offers the prospect of reducing 
the environmental impact of fossil fuel use. Even with such advances, 
however, we must recognize that fossil fuel resources are limited. 
Beginning in 2020, the total world demand for energy will exceed 
substantially all available energy from fossil, hydro and non-breeding 
nuclear fission reactors, exceeding by 10 percent the total energy 
available. The shortfall will grow to nearly 50 percent of the total 
energy available by 2060. Longer term, science and technology must find 
alternative sources of energy if we are to meet the needs of our global 
population.
    Since construction of a new power plant based on existing 
technology can take as much as ten years from concept to operation, we 
must act now to plan the orderly implementation of alternative sources 
of electricity. Experience has shown that the odyssey of a new 
technology from conception to commercial deployment can exceed 20 
years.
Potential of Fusion Energy
    Fusion energy is one of our global options for providing energy in 
the future. Fusion processes create energy from super-hot plasmas using 
magnetic confinement to avoid the problems of developing materials to 
withstand temperatures exceeding 50,000 degrees K. Fusion energy 
technology has emerged as a safe and reliable option with a large fuel 
reserve--we can generate energy from sea water.
    Among the many confinement options for fusion, a spheromak 
configuration enables the attainment of the necessary high temperatures 
without requiring massive magnets, extraordinary infrastructure 
complexity and the associated costs for fusion conditions to be 
achieved. The spheromak configuration, if successful, can provide 
electricity from fusion on a scale which can be built by traditional 
energy companies in the United States. However, much of the physics of 
this option is still uncertain.
Spheromak Turbulent Plasma Experiment (STPX)
    We request support from the Energy & Water Development Subcommittee 
for a program of research called the Spheromak Turbulent Plasma 
Experiment (STPX). This joint Florida A&M University (FAMU)-West 
Virginia University (WVU) project is focused on developing basic fusion 
science with tangible benefits to the nation.
    At FAMU Center for Plasma Science and Technology, a spheromak will 
be built by a team of faculty and students already significantly 
involved in fusion funded research. A full spectrum of traditional and 
innovative diagnostic techniques for the STPX will be developed at WVU 
and a host of other collaborating Universities and National 
Laboratories along with those developed at FAMU. Although similar in 
size and generic features to an existing spheromak, the STPX detailed 
design will be driven by the need to obtain the desired physics 
outcomes. Our design will be dramatically different in several 
important features from any existing fusion facility in the world.
    STPX will make important and unique contributions to the Department 
of Energy Fusion Science Mission through the development of a more 
compact containment technology. In addition, 20 Ph.D. plasma physicists 
from currently underrepresented groups will be produced in time to 
support the U.S. contributions to ITER. These new scientists will 
thereby be the next generation of the fusion scientific workforce, the 
first group to benefit from the advances obtained through the ITER 
project. More importantly, they will find employment in basic 
scientific research.
    The other benefits from our programs consist of contributions to 
technologies for materials fabrication and processing (e.g., computer 
chips), advanced lighting, and in transportation fuels synthesis.
Outcomes from Program
    This project will use the three approaches of theory, experiment, 
and simulation to quickly obtain information and develop the tools for 
full kinetic modeling of the spheromak plasma's makeup. This project 
will enable us to understand better how turbulent plasmas are heated, a 
key step towards progress in controlled thermonuclear fusion as well as 
towards understanding astrophysical systems. The relationships between 
ion heating in fusion plasmas, reconnection events, and microparticle 
transport will also be determined through this project in a manner 
enabling the manipulation and enhancement of core plasma heating.
Period of Support
    We seek a three-year commitment of support from the Subcommittee 
totaling $15 million for construction and the development of diagnostic 
tools and processes. FAMU will share the costs by providing renovated 
housing for the STPX, (estimated cost share of $3.7 million), and the 
infrastructure support normally associated with research projects. 
Construction and diagnostics research will be finished in three years 
with the expectation that we will generate our first plasma in May of 
2011. We expect annual operations (at roughly $500K/yr) to be funded 
after attaining first plasma through normal research funds from DOE, 
NSF, and other public and private entities to FAMU, WVU, and other 
participating institutions.
Summary of Request
    We request support of $5 million for fiscal year 2008 from the 
USDOE Office of Science, Fusion Energy Sciences Program, for the 
Spheromak Turbulent Plasma Experiment.
    Thank you for the opportunity to offer testimony to the 
Subcommittee.
                                 ______
                                 
           Prepared Statement of the Nuclear Energy Institute

    On behalf of the nuclear energy industry, the Nuclear Energy 
Institute (NEI)\1\ appreciates the opportunity to provide the 
subcommittee with its perspective on the nuclear-related programs under 
the subcommittee's jurisdiction, and on the President's proposed budget 
for those programs in fiscal year 2008.
---------------------------------------------------------------------------
    \1\ The Nuclear Energy Institute is responsible for developing 
policy for the U.S. nuclear energy industry. NEI's 297 corporate and 
other members represent a broad spectrum of interests, including every 
U.S. utility that operates a nuclear power plant. NEI's membership also 
includes nuclear fuel cycle companies, suppliers of equipment and 
services, engineering and consulting firms, national research 
laboratories, manufacturers of radiopharmaceuticals, universities, 
labor unions and law firms.
---------------------------------------------------------------------------
    NEI supports fiscal year 2008 funding for the following programs: 
Office for the Energy Loan Guarantee Program ($8.4 million), Nuclear 
Power 2010 ($183 million), Generation IV reactor programs ($100 
million), Nuclear Hydrogen Initiative ($35 million), University 
programs ($50.1 million), Office of Radioactive Waste Management 
($494.5 million), Advanced Fuel Cycle Initiative (increased funding 
over fiscal year 2007), and the Nuclear Regulatory Commission ($913 
million).
    The nuclear energy industry produces one-fifth of America's 
electricity, and is preparing to build advanced-design nuclear power 
plants to meet growing electricity demand. Nuclear energy is an 
essential component of a diverse energy portfolio, and NEI appreciates 
the leadership on nuclear energy's issues by members of this committee.
    NEI's statement for the record addresses the industry's highest 
priorities. In several cases, NEI believes America's energy security 
justifies increases in fiscal year 2008 funding above the President's 
request.
    Establishing an Effective Energy Loan Guarantee Program.--The 
energy loan guarantee program was created by the 2005 Energy Policy Act 
to support private sector investment in advanced energy technologies, 
including new nuclear power plants. The loan guarantee program is 
designed to be self-financing, with project sponsors responsible for 
underwriting the cost to the federal government of providing the credit 
support. Properly implemented, there will be no cost to the taxpayer.
    This program is essential for companies planning to invest billions 
of dollars in licensing and construction of new nuclear power plants in 
the United States. The electric industry faces major capital investment 
requirements ($750 billion-$1 trillion) over the next 15-20 years (in 
distribution, transmission, generation, and environmental control 
technology). The capital investment required will strain the electric 
sector's financing capability. The size of the capital investments (at 
least $3-4 billion for new nuclear plants in today's dollars) is very 
large relative to the size of the companies making the investments, and 
the loan guarantee program provides the credit support necessary to 
finance these new plants.
    The nuclear industry believes that the loan guarantee program 
requires disciplined management and rigorous project evaluation, with 
the cost of loan guarantees covering the government's potential 
exposure. NEI appreciates the subcommittee's leadership (in the fiscal 
year 2007 continuing resolution) in providing the funding and statutory 
language necessary to establish the Loan Guarantee Office at DOE. We 
endorse the Department of Energy's request for $8.4 million to cover 
the program's administrative costs in fiscal year 2008. The nuclear 
industry notes, however, that the President's fiscal year 2008 budget 
proposes a $9 billion loan volume limitation, with only $4 billion of 
the $9 billion allocated to large power projects like nuclear power 
plants. Given the cost of new energy infrastructure projects (including 
new nuclear plants, coal gasification plants and coal-to-liquids 
projects), a robust and viable loan guarantee program will require 
larger annual loan volumes in future fiscal years.
    Maintaining the Momentum in the Nuclear Power 2010 Program.--The 
Nuclear Power 2010 Program supports the design and engineering work 
necessary to bring two advanced reactor designs (the Westinghouse 
AP1000 and the General Electric ESBWR) to the level of design 
completion necessary for companies to develop firm cost estimates, and 
to file applications for licenses to build and operate these plants. 
Approximately two-thirds of the 33 new nuclear reactors announced 
publicly depend on successful, timely completion of the first-of-a-kind 
engineering on the two advanced reactor designs supported by the 
Nuclear Power 2010 program. Through its investment in the Nuclear Power 
2010 program, the federal government achieves enormous leverage on 
behalf of the American taxpayer: The $727 million total expected 
government investment in Nuclear Power 2010, matched by equal industry 
funding, will stimulate tens of billions of dollars of investment in 
new nuclear projects by 2015.
    The Department of Energy's proposed fiscal year 2008 budget 
proposes $114 million for Nuclear Power 2010. This level of funding 
will not maintain the program's momentum, and NEI recommends fiscal 
year 2008 funding of $183 million, to be matched equally by private 
sector funding.
    Ensuring Adequate Funding for the Nuclear Regulatory Commission and 
Oversight.--The industry supports NRC's fiscal year 2008 budget request 
of $913 million to provide effective oversight of operating nuclear 
plants, timely processing of applications for license renewal and 
requests for power uprates, and efficient review of applications for 
combined construction/operating licenses, early site permits and design 
certification. We believe this level of funding should also ensure NRC 
readiness to begin review of DOE's Yucca Mountain license application 
next year. The industry also encourages the subcommittee to support 
NRC's need for additional office space to fulfill its regulatory 
responsibilities.
    Given the increase in the NRC's budget--$200 million in the last 
two years and $425 million in seven years--NEI urges the subcommittee 
to require regular progress reports from the agency on the status of 
its licensing and other regulatory activities. Such reporting will 
allow the subcommittee to determine whether the agency is achieving the 
desired operational efficiency--by reducing the time required to 
process new plant license applications as it gains experience, for 
example. The industry also urges the subcommittee to require greater 
transparency in where NRC funds are being spent, by requiring full 
disclosure of planned staffing and resource needs in individual NRC 
divisions. This would demonstrate to Congress and the industry, which 
pays up to 90 percent of NRC's budget, that more of the requested 
budget is being allocated toward licensee-specific charges rather than 
general license fees.
    Developing An Integrated Used Fuel Management Program.--The nuclear 
industry appreciates the subcommittee's leadership in the area of used 
fuel management. In 2008, the federal government will be nine years 
behind on its commitment to start moving used nuclear fuel from nuclear 
power plants across the nation to a federal repository. The nuclear 
industry supports the Administration's proposed budget of $494.5 
million for fiscal year 2008 to enable the Office of Civilian 
Radioactive Waste Management to submit a license application for the 
Yucca Mountain project by June 2008.
    The Yucca Mountain project is a key component of a three-part 
integrated used fuel management strategy that includes: (1) interim 
storage until recycling or permanent disposal--or both--are available; 
(2) research, development and demonstration to close the nuclear fuel 
cycle and reduce the volume, heat and toxicity of byproducts placed in 
the repository; and (3) developing a permanent disposal facility. 
Continued, demonstrable progress on all three elements of this 
integrated used fuel management system is important to preserve 
confidence in nuclear energy, and to support licensing and construction 
of new nuclear plants.
    The nuclear industry has consistently supported research and 
development of the advanced fuel cycle technologies incorporated in the 
Advanced Fuel Cycle Initiative (AFCI). The industry recognizes that the 
Congress has important questions about the Administration's Global 
Nuclear Energy Partnership (GNEP). Nonetheless, the industry supports 
increased funding for the Advanced Fuel Cycle Initiative in fiscal year 
2008 to continue this technology research and development program, and 
to achieve better definition of the program, which is critical to a 
long-term integrated strategy for used fuel management.
    Preparing for the Next Generation of Nuclear Power Plants.--The 
large light water reactors operating today are well-suited for baseload 
electricity production, and the nuclear industry will continue to build 
and operate these reactor types well into the 21st century. It is 
clear, however, that the promise of nuclear energy technology extends 
beyond electricity production to include production of hydrogen and 
process heat. Next-generation high-temperature reactors, using advanced 
hydrogen production technologies, can produce hydrogen for 
transportation or for upgrading coal and heavy crude oils into usable 
products, thereby relieving pressure on natural gas supply (the source 
of most hydrogen produced today). High-temperature reactors can also 
generate process heat for desalination, to extract oil from tar sands, 
and for scores of other industrial applications.
    This enormous potential justifies continued federal investment. NEI 
urges the subcommittee's support for the next-generation nuclear plant 
at the Idaho National Laboratory, funded through the Generation IV 
Nuclear Energy Systems Initiative program. NEI recommends funding for 
this program of $100 million in fiscal year 2008, higher than the $36.1 
million proposed by DOE. NEI also recommends higher funding for the 
Nuclear Hydrogen Initiative--$35 million in fiscal year 2008, rather 
than the $22.6 million proposed by DOE.
    Investment in people is as important as investment in technology, 
and the nuclear industry urges the subcommittee to restore funding of 
$50.1 million in fiscal year 2008 for university programs managed by 
the Office of Nuclear Energy to support vital research and educational 
programs in nuclear science and health physics at the nation's colleges 
and universities. NEI also encourages the subcommittee to consider 
supporting a new program within the Office of Science for undergraduate 
and graduate programs in radiochemistry and other disciplines important 
to medical, energy and other applications of commercial nuclear 
technology.
    Conclusion: Closing the Energy R&D Gap.--NEI has recommended modest 
funding increases, above the Administration's request, in several 
strategic nuclear energy programs, including Nuclear Power 2010, the 
Next Generation Nuclear Plant, the Nuclear Hydrogen Initiative, support 
for university programs and others.
    NEI sees a growing body of evidence that increases in energy R&D 
will be necessary in the years ahead to create a sustainable energy 
supply infrastructure that meets national needs. In an analysis 
provided to the Congress in February, the Government Accountability 
Office found that DOE's budget authority for renewable, fossil and 
nuclear energy R&D declined by over 85 percent (in inflation-adjusted 
terms) from 1978 through 2005. The need for new technologies to address 
critical energy needs has not diminished over the same time period, 
however, nor have the energy and environmental imperatives facing the 
United States become any less urgent.
    Similarly, the Electric Power Research Institute is conducting a 
broad-based assessment of the electricity supply and demand-side 
technologies necessary to achieve meaningful reductions in electric 
sector greenhouse gas emissions in the United States. Although still in 
progress, EPRI's analysis demonstrates that a broad-based portfolio of 
technologies and techniques--including substantial improvements in 
efficiency, aggressive deployment of new nuclear and renewable 
generating capacity, improvements in coal-fired power plant efficiency, 
carbon capture and storage--will be required. EPRI's initial estimate 
suggests that successful development and deployment of this portfolio 
between now and 2030 will require additional R&D investment of 
approximately $2 billion per year. Although the federal government 
cannot be expected to finance all of that, there is clearly a need and 
a rationale for increased federal support for energy research, 
development, demonstration and deployment, in the nuclear energy area 
and across the portfolio.
                                 ______
                                 
                    Prepared Statement of GE Energy

    The following testimony is submitted on behalf of GE Energy (GE) 
for the consideration of the Committee during its deliberations 
regarding the fiscal year 2008 budget requests for the Department of 
Energy (DOE). Among GE's key recommendations are: (1) an additional $73 
million for the Nuclear Power 2010 program to develop new U.S. nuclear 
generation; (2) $40 million in added funding for the GNEP program to 
start the necessary activities for technology demonstration and to help 
industry provide DOE with the information necessary to support the 2008 
Secretarial Record of Decision; and (3) $18 million additional for the 
Advanced Turbines program, DOE's major research effort focusing on gas 
turbines for electricity production which also addresses key needs for 
hydrogen turbines. Investments in these and the other important 
programs discussed below will help to meet the challenges of assuring a 
diverse portfolio of domestic power generation resources for the 
future.

                        NUCLEAR ENERGY PROGRAMS

    Nuclear Power 2010.--The NP2010 Program provides vital funding in 
three areas that are essential to the development of new nuclear 
generation capacity in this country. The program provides support for 
the (1) certification of new reactor designs, such as GE's advanced 
light water reactor technology (ESBWR); (2) advancement of detailed 
design and deployment planning to support new nuclear plant 
construction in fiscal year 2010; and (3) preparation, submittal and 
NRC approval of two Combined Construction and Operating Licenses (COL). 
These activities are currently advancing with co-funding support from 
GE and Toshiba Westinghouse. Adequate DOE funding in fiscal year 2008 
is necessary to maintain the schedules supporting certification, COL 
license approval and construction initiation in fiscal year 2010.
    The Administration has requested $110 million for fiscal year 2008 
to support the NP2010 Program. This request is insufficient to keep the 
program on schedule. This amount is below the amount that was 
determined to be necessary for fiscal year 2008 at the time the initial 
estimate of the total program development cost was provided by GE, 
Toshiba Westinghouse, NuStart and Dominion in 2005. Since that time, as 
new information has been developed, the Reactor Vendors and Industry 
have recognized the need to accelerate detailed design and the 
construction planning process to achieve enhanced certainty of cost and 
schedule risks. At the same time, regulatory costs have increased. As a 
result, the Reactor Vendors and Industry have determined that funding 
of $183 million in fiscal year 2008 is required, an increase of $73 
million above the Administration's budget request.
    The Advanced Fuel Cycle Initiative and the Global Nuclear Energy 
Partnership (GNEP).--The Global Nuclear Energy Partnership (GNEP), 
initiated in early 2006, benefits from the research and development 
work conducted under the Advanced Fuel Cycle Initiative (AFCI). GNEP 
seeks to expand the use of nuclear power in a proliferation-resistant 
manner, and to solve the nuclear waste issue by reducing the long-term 
radiotoxicity of spent nuclear fuel. The key emphases are on solutions 
for proliferation resistant fuel separations and long-term nuclear 
waste reduction.
    In January 2007, DOE released the updated GNEP Strategic Plan, 
which outlines an implementation strategy to ``enable a world-wide 
increase in the use of nuclear energy safely, without contributing to 
the spread of nuclear weapons capabilities, and in a manner that 
responsibly disposes of the waste products of nuclear power 
generation.'' The GNEP Strategic Plan outlines government's and 
industry's roles in the development of the technologies and facilities 
required to implement the U.S. commitment to GNEP. To achieve a 
commercial solution for GNEP, DOE recognized in the Strategic Plan the 
need for industry involvement and active participation.
    In support of the broad GNEP goals, and to help the DOE prepare for 
the 2008 Secretarial Record of Decision to proceed with a government-
industry partnership to build a nuclear fuel recycling center and a 
prototype advanced recycling reactor, DOE in January issued awards to 
11 commercial and public consortia. GE has expressed interest in 
designing, licensing, building and operating a demonstration nuclear 
fuel recycling facility and advanced recycling reactor, and was among 
those selected to conduct detailed siting studies for integrated spent 
fuel recycling facilities as part of GENP. Pursuant to this DOE award, 
GE is preparing a site characterization report for a site in Morris, 
IL. GE's technology solution, called the Advanced Recycling Center, is 
based on pyroprocessing and PRISM reactor technology developed during 
the Advanced Liquid Metal Reactor program. This technology is ready for 
commercial-scale development and could provide an economically viable 
technical solution to solving the nuclear waste issue. GE believes that 
the GNEP program would be advanced if the Office of Nuclear Energy 
updates the AFCI Comparison Report to Congress with qualitative and 
quantitative information on the proven PRISM reactor and pyroprocessing 
technologies.
    For fiscal year 2008, an additional $40 million above the 
Administration's budget request, for total GNEP funding of $435 
million, is needed. Such additional funding should be used to help 
industry conduct technology demonstration projects, such as the 
demonstration of: (1) key reactor components (e.g., reactor vessel), 
(2) electro-refiner based fuel separation, and (3) a reactor and fuel 
separation simulator, and to provide the technical, economic and 
business information to DOE necessary to support the 2008 Secretarial 
Record of Decision. GE further recommends that adequate funding be 
provided for pyroprocessing and the PRISM reactor in support of DOE's 
GNEP policy goals.

                         FOSSIL ENERGY PROGRAMS

    Cleaner coal technology is the key to maintaining coal as a 
significant part of the U.S. energy mix into the future. DOE's Clean 
Coal Power Initiative, Integrated Gasification Combined Cycle, and 
Carbon Sequestration Programs all have important roles to play in 
advancing the solutions that allow coal to be used in the most 
economical and environmentally acceptable manner.
    Clean Coal Power Initiative.--GE supports the Administration's 
request to increase the funding level for the Clean Coal Power 
Initiative (CCPI) in fiscal year 2008. We encourage Congress to 
recognize that a commercial demonstration program for advanced coal 
power technologies provides a critical pathway for the technologies 
that will preserve coal's place in the U.S. energy portfolio. There is 
a continuing need for the CCPI to serve as the vehicle for the scale-
up, plant integration, and initial deployment of advanced IGCC 
technologies, which will help IGCC technology move down the experience/
cost curve. Another critically important role of the CCPI going forward 
will be in providing a means for the demonstration of carbon 
sequestration technologies.
    GE welcomes DOE's commitment to move forward with a third round of 
the CCPI in fiscal year 2008. Further multi-project solicitations for 
later rounds of projects targeting advanced technology systems for 
CO2 capture and sequestration also will be required as part 
of the overall response to the climate change challenges facing coal-
based generation.
    IGCC.--IGCC, with its capability for pre-combustion carbon capture, 
presents a significant advantage over combustion technology. Even with 
its current 20 percent to 25 percent cost premium over pulverized coal 
combustion, IGCC can provide a lower cost of electricity with carbon 
capture. Based on the incremental cost that carbon capture will add to 
all coal-based power generation, cost reduction must be pursued 
vigorously for IGCC to realize its potential in maintaining coal 
competitiveness in a carbon-constrained environment.
    While widespread deployment is key to bringing IGCC costs down, 
technology advancements also are needed to minimize the impact of 
carbon capture. This requires a pipeline of new technologies that are 
moving toward demonstration and deployment. While the development of 
several large-scale commercial IGCC plants is underway, candidate 
technology advancements have already been identified for the next 
generation of IGCC. These technologies can significantly lower cost and 
improve performance in key areas of carbon shift, CO2 
capture, overall process efficiency plus advancing IGCC's economics for 
application on subituminous coals. However, it will not be possible to 
even begin moving these technologies forward without increasing the 
fiscal year 2008 funding request for IGCC.
    DOE's goal of a 10 percent premium for carbon capture with IGCC is 
aggressive but appropriate to the magnitude of the economic benefit 
that would be gained. Achieving this goal will require increased 
funding for technology development. The Administration's proposal to 
reduce funding for the IGCC program to $50 million in fiscal year 2008 
is not sufficient to provide the resources that are needed. We 
therefore urge that fiscal year 2008 funding for IGCC be increased by 
$16 million.
    Carbon Sequestration.--GE endorses the requested increase in 
funding for carbon sequestration technologies. Carbon sequestration and 
storage is a critical and necessary component of a total solution for 
low carbon coal. A focus of the program activity needs to be on the 
development of requirements for CO2 quality necessary for 
long-term, secure and environmentally acceptable storage. These 
requirements are needed for carbon capture system design that is 
suitable for a wide variety of geological environments. The planning 
for large-scale field tests needs to identify candidate sources of 
large and reliable quantities of CO2.
    Advanced Turbines.--GE recommends that funding be increased by $18 
million to a total of $40 million for the Advanced Turbines program. 
This program represents the Department's primary research effort 
focusing on the development of enabling technologies for high 
efficiency hydrogen turbines for advanced gasification systems. Gas 
turbine R&D is focused on advanced combustion and high temperature 
turbine technology for syngas/hydrogen fuels that will result from IGCC 
and FutureGen type power plants. The program addresses those gas 
turbine elements where the technology required for the use of syngas/
hydrogen fuels differs from the requirements for natural gas fueled gas 
turbines. Unless the fiscal year 2008 budget for the Advanced Turbines 
program is increased, funding will be inadequate for this promising 
high priority work, and the progress and benefits of this research will 
be delayed accordingly.
    GE has experience with gas turbines operating on fuel blends 
containing hydrogen, and has performed laboratory demonstration tests 
on high hydrogen content fuel. This experience highlighted the need for 
development of advanced combustion technology in order to drive down 
NOX emissions and enable advanced hydrogen generation 
processes. In addition, current strategies for effective integration of 
all major subsystems need to be reviewed and redefined for use with 
hydrogen fuel.
    Continued funding of DOE's program is essential for FutureGen to 
meet its goal of substantial improvement in the cost of carbon capture. 
FutureGen is being structured to serve as a test bed for advanced 
technology that is needed to reduce the performance penalty and improve 
the economics of carbon capture. If it is to meet its goals, the 
FutureGen program will need to draw on advancements resulting from the 
Advanced Turbines program.
    GE recommends the Committee's attention to the testimony submitted 
by the Gas Turbine Association relative to the allocation of additional 
funding above the budget submission within the Advanced Turbines 
program budget. In particular, GE encourages the Committee to provide 
adequate funding to sustain the University Turbine Systems Research 
Program.
    Advanced Research.--To enable future technological advances, within 
the funds provided for Advanced Research, the emphasis should be placed 
on investments to foster better understanding of gasification 
fundamentals. An improved physics-based understanding of gasification 
processes will facilitate improved gasifier and systems designs that 
may achieve 45-50 percent efficiency with integrated CO2 
separation, capture, and sequestration with near-zero emissions with 
less than 10 percent increase in cost-of-electricity.

                       RENEWABLE ENERGY PROGRAMS

    Solar.--GE Energy fully supports the DOE budget request for the 
development of Solar technology. GE Energy is pleased to be able to 
work with the DOE on the recently awarded Solar America Initiative. 
This program involves a diverse team of industry, universities, and 
national labs working together to develop the technologies needed to 
drive down the cost of electricity to make solar competitive with other 
power generation technologies, leading to widespread application in the 
U.S.
                                 ______
                                 
 Prepared Statement of the Health Physics Society (HPS) and the Health 
             Physics Program Directors Organization (HPPDO)

    This written testimony for the record for fiscal year 2008 requests 
$500,000 for the Health Physics Fellowships and Scholarships program 
through the Department of Energy's Office of Nuclear Energy (DOE-NE) to 
help address the shortage of health physicists, which is an issue of 
extreme importance to the safety of our nation's workers, members of 
the public, and our environment.
    Health Physics is the profession that specializes in radiation 
safety, which is necessary for the safe and successful operation of the 
nation's energy, healthcare, homeland security, defense, and 
environmental protection programs. Although radiation safety is 
fundamental to each of these vital national programs, there is no 
single federal agency in the Executive Branch that serves as a home and 
champion for the health physics profession. This is due to the fact 
that health physics is a profession that cuts across all these sectors 
and is necessary for all these sectors to exist. However, it is a 
support profession for the principle disciplines in these programs, 
such as engineers, medical professionals, law enforcement 
professionals, military personnel, and environmental scientists, which 
are championed by corresponding federal agencies.
    As the nation's development and use of radioactive materials grew 
following the end of World War II, the nation's energy, defense, public 
health, and environmental protection needs for health physicists were 
supported through student fellowships and scholarships largely from the 
Atomic Energy Agency (energy and defense) and Public Health Service 
(public health and environmental protection). However, over the years 
agencies and their missions changed, the nuclear power industry 
faltered and the DOE nuclear weapons complex downsized following the 
end of the cold war. This resulted in the academic program support from 
federal agencies dwindling until the last remaining support from DOE 
was terminated in fiscal year 1999. This lack of academic support was 
despite the continued need for health physicists in the energy, 
defense, public health, and environmental protection programs and an 
exponential growth for need in the medical and academic community.
    As the health physics human capital crisis grew and loomed in the 
early years of the 21st century, a sector receiving increasing 
attention in the human capital shortage area was the nuclear energy 
industry, particularly with its ability to provide energy without 
producing ``greenhouse gases.'' Congress and the Department of Energy 
(DOE) took action to add support to the nuclear engineering academic 
programs through DOE programs in the Office of Nuclear Energy (NE) 
(previously the Office of Nuclear Energy, Science and Technology) and 
eventually agreed that this was an appropriate support mechanism for 
the health physics academic program. In fiscal year 2005, just 3 years 
ago, Congress appropriated money to DOE-NE for a health physics 
fellowship and scholarship program as part of the University Reactor 
Fuel Assistance and Support budget item. At that time, then Director of 
DOE-NE, William Magwood, agreed this support was needed as he testified 
to this Committee that the DOE recognized ``. . . a small but important 
element [of the University Support budget item was] to provide 
scholarships and graduate fellowships to students studying the vital 
and too-often overlooked discipline of health physics.'' Shortly 
thereafter, Congress reinforced its position that DOE needed to support 
the health physics academic programs in provisions of Section 954 of 
the Energy Policy Act of 2005. However, even though the need for 
increased numbers of health physics professionals continued to exist, 
after only two fiscal years of funding the NE Health Physics Fellowship 
and Scholarship programs at minimal levels, the DOE has requested to 
cease funding this Congressionally authorized program.
    In their fiscal year 2008 Budget Request, DOE states ``Enrollment 
target levels of the University Reactor Infrastructure and Education 
Assistance program have been met and the program is no longer 
considered essential to encourage students to enter into nuclear 
related disciplines'' (emphasis added). Similarly, in the Office of 
Management and Budget's (OMB) performance assessment of the University 
Nuclear Education Programs, they conclude ``Enrollments have tripled 
since the late 1990's, reaching upwards of 1,500 students. In addition, 
more universities are offering nuclear-related programs and there is a 
growing interest in nuclear energy'' and ``While enrollments have 
reached the program's target level of 1,500 students ten years ahead of 
schedule, the program is unable to demonstrate that it caused these 
results.''
    This DOE statement and the OMB assessment are patently wrong with 
regards to health physics programs. Since DOE has only funded health 
physics programs for 2 years, we do not believe they have ever 
established ``target levels'' for health physics program enrollments 
nor has there been time to assess the effect of those 2 years of 
funding on health physics program enrollments. The DOE-NE HP fellowship 
and scholarship program thus far has provided 3 graduate fellowships in 
fiscal year 2006 and 0 undergraduate scholarships. In 2004, the HPPDO 
developed a plan for revitalizing the academic programs to a level that 
could meet the projected shortfall of health physicists. The HPPDO plan 
calls for an initial target of 20 graduate fellowships and 20 
undergraduate scholarships, i.e., target levels well above the actual 
performance of the Nuclear Education Programs. In addition, the number 
of health physics programs graduating at least 5 students annually 
decreased from 20 programs in 1995 to less than half that number in 
2005.
    Although we consider it would take approximately $1,000,000 to get 
to the HPPDO plan of 20 fellowships and 20 scholarships, we consider it 
important to address immediately the HP Graduate Fellowship program so 
we have between 15 and 20 fellows in a two-year Masters Degree program 
and up to 10 undergraduate scholarships to start meeting our nation's 
workforce needs for radiation safety personnel. Funding of $500,000 
should allow for up to approximately 12 to 15 fellows and up to 10 
scholarships with allowance for overhead administration costs. 
Considering the DOE budgets for the HP Fellowship and Scholarship 
programs for fiscal year 2005 and fiscal year 2006 combined have 
totaled $500,000 and only produced 3 fellowships, we feel this request 
is very modest and we recognize it will not begin to provide the long 
term support that will eventually be required if we are to have enough 
safety professionals for our energy, healthcare, homeland security, 
defense, and environmental protection programs.
    The Committee's favorable consideration of this request will help 
meet our nation's radiation safety needs of the future.
                                 ______
                                 
        Prepared Statement of the University of Texas at Austin

    I draw the Subcommittee's attention to the importance of the 
National Methane Hydrates R&D Program in the National Energy Technology 
Laboratory of the Department of Energy. This is the premier federal 
program that deals with a unique geologic phenomenon. Though this 
program is housed in the Office of Fossil Energy, methane hydrates are 
more than a large potential resource--they are fundamental to the 
carbon cycle on our planet.
    Methane hydrates present a basic science challenge of the first 
order. The scientific community is only beginning to figure out where 
hydrates are, how they got there, what quantities really exist, and 
what would happen if the prevailing conditions of temperature, 
pressure, salinity, and microbial symbiosis were to change. But even 
from the little we know about hydrates so far, one important conclusion 
emerges. The amount of carbon currently locked up in hydrates easily 
exceeds the total carbon in all the oil, natural gas and coal on the 
planet. So trying to make sense of how the carbon cycle works without 
studying hydrates is like learning how to drive a car when you only 
have a key to the glove box.
    Methane is also a potent greenhouse gas, even more so than the 
widely discussed carbon dioxide. The behavior of methane hydrate 
deposits--when they form, when they dissociate, and how fast these 
processes take place--very likely holds some of the keys to 
understanding how Earth's climate has changed in the past. Fully 
understanding the past would have enormous impact on predictions of how 
our climate might change in the future. Considering the political, 
social and economic ramifications of climate predictions, investment in 
understanding the scientific basis for change is wise.
    Energy supply and climate change both fall within DOE's core 
mission. The National Methane Hydrates R&D Program in NETL is therefore 
ideally situated to drive our nation's effort to understand the science 
as well as the economics of these deposits. This is not news to this 
Subcommittee, for the previous session of Congress recommended steadily 
increasing support for the program over the next five years. I urge the 
Subcommittee to maintain its commitment to this uniquely important 
program.
                                 ______
                                 
                    Prepared Statement of NGVAmerica
Introduction
    NGVAmerica appreciates the opportunity to provide the subcommittee 
the following statement concerning the fiscal year 2008 appropriations 
for the U.S. Department of Energy (DOE). NGVAmerica is a national 
organization of over 100 member companies, including: vehicle 
manufacturers; natural gas vehicle (NGV) component manufacturers; 
natural gas distribution, transmission, and production companies; 
natural gas development organizations; environmental and non-profit 
advocacy organizations; state and local government agencies; and fleet 
operators. NGVAmerica is dedicated to developing markets for NGVs and 
building an NGV infrastructure, including the installation of fueling 
stations, the manufacture of NGVs, the development of industry 
standards, and the provision of training.
Summary of Appropriations Requests
    Fund the NGV RDD&D Program at $20 Million for fiscal year 2008
    Fund the Clean Cities Program at $20 million for fiscal year 2008
    Clarify that Biogas-to-Biomethane Production Projects Qualify Under 
Existing DOE-funded Programs
Statement in Support of Appropriations Request
    Increasing the use of natural gas vehicles (NGVs) can: (1) reduce 
America's dependence on foreign oil, (2) improve air quality in urban 
areas, (3) reduce the production of greenhouse gases, and (4) pave the 
way for the more rapid introduction of hydrogen transportation 
technologies. However, to achieve all these benefits, more NGV RDD&D is 
urgently needed.
    DOE funding has been instrumental in supporting the development and 
introduction of alternative fueled technologies. Over the years, DOE 
funding has supported the development and refinement of natural gas 
engines, fueling infrastructure, codes and standards, and fleet 
demonstration projects. DOE emission testing programs and fleet case 
studies also have been critical to demonstrating the real-world air 
quality and economic benefits of using natural gas vehicles. DOE has 
also been a key player in integrating new natural gas engines into new 
vehicle platforms. As such, DOE has been an instrumental partner with 
industry in developing new and better products. As a result of these 
efforts, natural gas use for transportation displaced over 200 million 
gallons of petroleum in 2006. Most of this fuel is consumed by high 
fuel-use fleets (e.g., transit, refuse, and short-haul trucking) 
located in major urban areas. NGVAmerica members have focused their 
marketing efforts mostly on heavy-duty truck and bus applications. 
Fleets operating these vehicles provide the best opportunity for 
increased petroleum displacement as well as reduced emissions of 
harmful pollutants.
    Some of the major successes to date for our industry include full-
commercialization of several of the cleanest internal combustion 
engines in the world, a growing share of the U.S. transit bus fleet, 
the use of hydrogen-blended fuels, installation of stations that 
simultaneously dispense CNG, LNG, hydrogen blends, and hydrogen, and 
the production and use of biomethane fuel produced from landfills. Many 
of our member companies also are experiencing a robust and growing 
export market for NGV products as a result of increasing interest in 
overseas markets. However, the U.S. market continues to represent a 
challenge, particularly due to the lack of long-term governmental 
support and a lack of vehicle product offerings.
    DOE's efforts have led to some impressive developments over the 
years. Many of the products developed or supported by DOE funding will 
continue to provide benefits for many years. The heavy-duty vehicles 
that DOE help demonstrate and deploy often continue in service for 10-
15, or more years. And because these applications mostly involve high 
fuel use fleets, the continued use of these vehicles will displace a 
large amount of petroleum. A single heavy-duty natural gas urban 
transit bus, for instance, over its lifetime will displace between 
175,000-200,000 gallons of petroleum. That is a far greater amount of 
petroleum than even the most fuel-efficient light duty vehicle will 
ever replace. The point is not to stop encouraging light duty fuel 
efficiency but rather to highlight the potential petroleum displacement 
of continuing to develop more heavy-duty natural gas applications.
    The tax incentives enacted as part of the Energy Policy Act of 2005 
and SAFETEA-LU are helping to support the market for NGVs and other 
alternative fuels. These incentives significantly improve the economics 
for users of alternative fuels. Unfortunately, a compelling economic 
case alone is not sufficient to commercialize new technologies, 
particularly not when developing new products costs millions of dollars 
and is fraught with risks. In transportation, this problem is 
particularly acute because of the economic problems facing U.S. 
manufacturers and the cost these manufacturers already must incur to 
ensure their petroleum fueled products meet increasingly stringent 
emission standards.
    The NGV industry's RDD&D efforts are directed at bringing to market 
advanced NGV technology that will extend NGV use into more applications 
and lower the cost of purchasing and operating NGVs in all markets. 
Significant NGV RDD&D is needed to (1) improve engine efficiency, (2) 
further reduce engine emissions, (3) reduce the cost and improve the 
reliability of fueling infrastructure and (4) demonstrate alternative 
fuel systems in new applications--including natural gas/hybrid electric 
applications. In order to achieve these objectives and deliver the 
benefits provided by NGVs, our industry needs DOE to be a ready and 
willing partner. Given the importance of this continued effort, we 
request funding for the following specific activities:
Fund the NGV RDD&D Program at $20 Million for fiscal year 2008
    At one time, the Department of Energy had a robust on-road NGV 
RDD&D program based on a joint public/private sector plan. Several 
years ago, DOE's Energy Efficiency and Renewable Energy programs 
shifted emphasis to long-term, high-risk R&D (e.g., hydrogen vehicles). 
Since then, the Administration has requested no funding for NGV RDD&D. 
That is unfortunate since such a program is even more necessary today. 
For NGVs to achieve their market potential, federally funded RDD&D is 
needed to expand product offerings of engines to meet a wider range of 
applications. In addition, the process of integrating those natural gas 
engines into additional medium- and heavy-duty vehicle platforms must 
be accelerated. Those platforms include school buses, transit buses, 
trash trucks, delivery trucks and over-the-road trucks. Natural gas 
hybrid-electric platforms must be expedited, too. In addition, the cost 
and weight of compressed and liquefied natural gas on-board storage 
systems must be reduced. Finally, work must continue on improving NGV 
and NGV fueling safety codes and standards. Given the current priority 
to move America away from reliance on foreign oil and the potential of 
NGVs to play a significant role, Congress should restore funding for an 
NGV RDD&D program.
Fund the Clean Cities Program at $20 million for fiscal year 2008
    The Clean Cities program, which includes 89 public-private 
partnerships operating in 39 states, is one of the most effective means 
available for (1) educating the public about non-petroleum alternative 
fuels, (2) accelerating the market penetration of those fuels and 
vehicles and (3) laying the groundwork for public acceptance of 
hydrogen-based transportation. Given the need to move America away from 
dependence on petroleum-based fuels, increased funding for the Clean 
Cities program is a prudent and necessary investment. The 
Administration's request of $9.593 million for Clean Cities in fiscal 
year 2008 is inadequate given the role that Clean Cities can play in 
reducing U.S. oil dependence, which is an Administration and 
Congressional priority. We recommend and support increasing the funding 
level to $20 million.
Clarify that Biogas-to-Biomethane Production Projects Qualify Under 
        Existing DOE-funded Programs
    Biomethane is a biofuel with huge potential to offset petroleum 
reliance and reduce greenhouse gas emissions. Analysis previously 
conducted for DOE estimated that a feasible annual production capacity 
in the United States is about 1.25 quadrillion Btu or 10 billion 
gasoline-gallon-equivalent from landfills, animal waste and sewage 
alone. However, biomethane use has been overshadowed by efforts to 
produce renewable electricity and the promotion of ethanol. These 
efforts should be viewed as complementary. Federal programs for the 
production of all biofuels should be fuel neutral. As noted above, a 
huge potential exists in the United States to produce biomethane from 
landfill gas, animal and crop waste and sewage--an even cellulosic 
energy crops. In Europe, biomethane from cellulosic crops is being 
pursued as a viable alternative transportation fuel. There are a number 
of new funding programs (demonstrations, production grants, loan 
guarantees) enacted as part of the Energy Policy Act of 2005. These 
programs in some cases have been narrowly tailored to exclude 
applications that do not involve the production of electricity or, in 
the case of transportation fuels, fuels that are not ethanol or 
biodiesel. Congress should continue to fund these programs but clarify 
that biomethane projects also qualify.
Conclusion
    Mr. Chairman, natural gas vehicles help reduce America's use of 
foreign oil, improve the air quality in our urban areas, reduce the 
production of greenhouse gases, and pave the way for the more rapid 
introduction of hydrogen transportation technologies. We greatly 
appreciate your past support and consideration of these proposals.
                                 ______
                                 
 Prepared Statement of the Independent Petroleum Association of America

    On behalf of the Independent Petroleum Association of America 
(IPAA), representing over 7,000 producers of domestic oil and natural 
gas, I would like to bring to your attention a matter of significant 
importance to America's independent oil and natural gas producers.
    For the third consecutive year, the Administration's Budget request 
for the Department of Energy (DOE) for fiscal year 2008 proposed to 
eliminate the existing oil and gas technologies (core) programs, and in 
addition, proposed to repeal the Sec. 999 or non-conventional onshore/
ultra-deep/small producer program authorized in the Energy Policy Act 
of 2005 (EPACT). In the ``guidance'' document provided to DOE by the 
Office of Management and Budget (OMB) for fiscal year 2007, and in 
accordance with the recent Continuing Resolution or ``CR,'' the core 
program is assumed to be transitioning toward a ``close-out'' or 
shutting down of most of it's current activities, allotting $2.7 
million to be applied for close-out purposes. Similarly, the OMB 
guidance document assumes that repeal of the Sec. 999 program is 
imminent. IPAA would urge the subcommittee to consider rectifying this 
``yo yo'' funding effect that serves to undermine the deliverability of 
these two programs. Both the ``core'' program and the Sec. 999 program 
are of vital importance to independent producers, who develop 90 
percent of all U.S. wells, producing 82 percent of American natural gas 
and 68 percent of all American oil. In fact, historically 85 percent of 
the focus of the existing or ``core'' program has been devoted to the 
exploration and production activities associated with the independent 
producer.
    Although the Sec. 999 program received $50 million in mandatory 
funding annually in EPACT, it is not structured to assume all of the 
functions of the core program, especially as they pertain to inherently 
governmental functions or providing grants to university researchers. 
The core program continues to house programmatic functions of equal 
importance to independent producers, such as gas hydrates, the Stripper 
Well Consortium, regulatory analysis, tech transfer and on-going 
university research and development projects. These efforts 
collectively represent important efforts related to development and 
deployment of technologies that assist in maintaining and increasing 
American oil and gas production. Therefore, IPAA requests that the core 
program be appropriated $29.9 million to continue ongoing research and 
development activities for fiscal year 2008. Regarding the Sec. 999 
program, IPAA requests that the program receive an additional $25 
million appropriation to apply to areas that are expected to be assumed 
by Sec. 999, such as enhanced oil recovery for small producers and the 
University Internship Program.
    IPAA believes that during these times of elevated concerns over our 
increasing reliance on foreign sources of oil, now is not the time to 
diminish our efforts in the area of American produced oil and natural 
gas. We thank you for your prompt attention to this matter.
                                 ______
                                 
                  Prepared Statement of Austin Energy

    This testimony supports funding for development and deployment of 
plug-in hybrid vehicles (PHEVs) within the Department of Energy's 
fiscal year 2008 budget request. Specifically, Austin Energy supports 
the $80.6 million for Hybrid Electric Systems within the Vehicle 
Technologies account of the Advanced Energy Initiative of the Energy 
Efficiency and Renewable Energy budget. Within the Hybrid Electric 
Systems sub-accounts, Austin Energy supports funding of: (1) $21 
million for Vehicle and System simulation and testing; (2) $41.8 
million for Energy Storage Research and Development; (3) $15.6 million 
for Advanced Power Electronics and Electric Motors Research and 
Development; and (4) $2.1 million for the SBIR/STTR program. Austin 
would request that the Committee consider these funding requests within 
the fiscal year 2008 budget request: (1) $10 million for Section 706 of 
the Energy Policy Act of 2005 (``EPACT'')--Joint Flexible Fuel/Hybrid 
Commercialization Initiative; (2) $15 million for Sections 711/911 of 
EPACT--Hybrid Vehicles for system and component development for plug-in 
hybrid vehicles; and (3) $2.5 million for Title 8 of EPACT--Advanced 
Vehicles for a fuel cell vehicle developed with a plug-in hybrid drive 
platform. Funding of $27.5 million within these three areas should be 
included within the Hybrid Electric Systems sub-accounts section of the 
Vehicle Technologies account of the Energy Efficiency and Renewable 
Energy budget.
    Austin Energy, the Nation's 10th largest community-owned electric 
utility, serves 360,000 customers within the City of Austin and Travis 
and Williamson Counties, Texas. Austin provides electricity to the 
capital city of Texas through a diverse generation mix of nuclear, 
coal, natural gas and renewable resources. Austin Energy has been 
nationally recognized for its Green Choice renewable electricity 
program. For the last four years Austin Energy has sold more renewable 
electricity, primarily wind, than any other utility in the country.
    Austin Energy has also been a national leader in energy efficiency. 
Austin's Green Building program for both commercial and residential 
buildings has been a national model in the use of sustainable building 
technologies.
    As the President has stated frequently in the last two years, the 
United States needs to break its addiction to imported supplies of 
petroleum. One of the principle uses of imported petroleum is to 
produce gasoline to power the transportation sector, particularly 
automobiles. Already popular hybrid vehicles demonstrate that there is 
now a technologically feasible way to power automobiles with both an 
internal combustion and an electric engine. The plug-in hybrid vehicle 
is a modification of current hybrids. Plug-in hybrids can be charged 
from the existing electrical grid by plugging the car into an ordinary 
wall socket while the internal combustion engine can be a flexible fuel 
engine that will run on domestically produced biofuels.
    PHEVs will run on a dedicated electric charge for a number of miles 
(20-60, depending on the size of the battery pack), then shift to 
liquid fuel. The General Motors concept car, the Volt, unveiled at the 
recent Detroit Auto Show in January of this year, is an example of this 
type of vehicle. It has an all electric range of 40 miles.
    PHEVs have the ability to significantly increase efficiency of fuel 
use over both conventional cars and existing hybrids. Instead of the 
constant switching between gasoline and electric power as is done in a 
hybrid today, the PHEV runs on electric power until the batteries are 
drained; only then does the fuel engine engage to power the car. If the 
driver's daily commute is within the electric range (20-60 miles), or 
if driving is within a small geographical area (city delivery trucks), 
then gasoline consumption is minimized, thus starting us down the road 
to reduced imports.
    Austin Energy is convinced that PHEVs will be a significant 
contributor to reducing our nation's reliance on imported oil. Unlike 
other transportation alternatives, PHEVs require neither new fueling 
infrastructure nor driver behavioral changes. The infrastructure for 
PHEVs, standard electric sockets, already exists and Americans have 
already become accustomed to plugging-in Blackberries, cell-phones and 
lap-top computers. In the event that one forgets or is unable to plug-
in the car, it will run as usual on gasoline or flexible fuel.
    The funding initiatives recommended by the President in the DOE 
fiscal year 2008 budget submission will speed the day when PHEVs are 
widely available to American citizens. DOE's research will help achieve 
the battery technology needed to move the PHEV from a concept car to 
automobile dealer showrooms. Other DOE programs support plug-in hybrid 
technology developed as part of flexible fueling operations for cars as 
well as integrated within the advanced fuel cell vehicle. PHEV 
technology will complement any existing automobile fueling system or 
one envisioned for the future. The DOE budget submission will provide 
for deployment of PHEVs in demonstration activities to allow for 
different commercial applications of the vehicles. PHEV technology is 
adaptable to all vehicle platforms--from large trucks to commuter cars.
    Austin Energy supports Congressional appropriations to increase the 
availability of PHEVs and demonstrate its capacity as a solution to our 
``oil addiction.'' Austin Energy is also willing to support the federal 
effort by overseeing a national grass-roots campaign to demonstrate the 
consumer market for PHEVs, a project underway for more than a year now.
    Austin Energy's ``Plug-In Partners'' is an initiative to 
demonstrate to the automobile manufacturers that a consumer market 
already exists for PHEVs. Utility rebates and incentives, state, county 
and municipal government endorsements, and citizen petitions are 
evidence of an expanding interest in PHEVs. A key aspect of the Plug-In 
Partners campaign is the ``soft'' fleet orders. Fleet owners, both 
private and governmental, sign a pledge to strongly consider purchasing 
a certain number of PHEVs when available from an original equipment 
manufacturer. While the fleet owner understands that the cars are not 
presently on line, the belief in the concept of a PHEV is sufficient 
for them to make the soft fleet order. This helps demonstrate a market 
to automakers. After one year of the Plug-In Partners campaign, over 
8,400 vehicles have been pledged by soft fleet orders.
    Austin Energy's Plug-In Partners campaign was founded nationally on 
January 24, 2006 at the National Press Club in Washington, DC. This 
past January, in the Russell Senate Office Building, Plug-In Partners 
celebrated its one year anniversary. Senator Orrin Hatch of Utah spoke 
at both events of the importance of PHEVs to ending our reliance on 
foreign oil. The Plug-In Partners campaign has been joined by more than 
500 partners in 41 states, including the cities of Austin, Albuquerque, 
Aspen, Baltimore, Boston, Boulder, Chicago, Cleveland, Colorado 
Springs, Dallas, Fort Worth, Denver, Des Moines, Honolulu, Las Vegas, 
Los Angeles, Kansas City, MO, Milwaukee, Minneapolis, Philadelphia, 
Phoenix, Portland, OR, Sacramento, Salt Lake City, San Antonio, San 
Francisco and Seattle. The New York State Energy & Research Development 
Authority (NYSERDA), American Corn Growers Association, Soybean 
Producers of America, Alliance To Save Energy, American Council on 
Renewable Energy, American Wind Energy Association, Consumer Federation 
of America, Energy Future Coalition, Environmental and Energy Study 
Institute and the South Shore Clean Cities of Northeast Indiana support 
the Plug-In Partners campaign. The Center for American Progress and Set 
America Free are among the many public interest groups that are members 
of the coalition. Finally, Plug-In Partners has been endorsed by the 
American Public Power Association and almost 200 of its members around 
the country as well as the Edison Electric Institute, National Rural 
Electric Cooperative Association and the Washington Public Utility 
District Association.
    Austin Energy has also committed $1 million for rebates to Austin 
Energy customers who purchase plug-in hybrids when they become 
available.
    The Congress, by funding DOE initiatives to develop and deploy 
PHEVs, will help speed the commercialization by auto manufacturers and 
will be a significant step in lessening American dependence on imported 
oil.
                                 ______
                                 
    Prepared Statement of the National Association of State Energy 
                               Officials

    Mr. Chairman and members of the Subcommittee, I am Peter Smith of 
New York and Chair of the National Association of State Energy 
Officials (NASEO). NASEO is submitting this testimony in support of 
funding for a variety of U.S. Department of Energy programs. 
Specifically, we are testifying in support of no less than $80 million 
for the State Energy Program (SEP). We wanted to take this opportunity 
to thank the Subcommittee for its support for an increase for this 
program in fiscal year 2007. We were also pleased that the Subcommittee 
added $300 million to the final fiscal year 2007 Continuing Resolution 
for energy efficiency and renewable energy programs. Recently, 30 
members of the Senate wrote to you to fund SEP at least at $74 million 
and Weatherization at a $275 million level in fiscal year 2008. SEP is 
the most successful program operated by DOE in this area. Within an $80 
million funding level for SEP we would support the Administration's 
proposed $10.5 million competitive program, but we do not support such 
an effort at the proposed funding level of $35 million for the core SEP 
activities. SEP is focused on direct energy project development, where 
most of the resources are expended. SEP has set a standard for state-
federal cooperation and matching funds to achieve critical federal and 
state energy goals. We also support $300 million for the Weatherization 
Assistance Program (WAP). These programs are successful and have a 
strong record of delivering savings to low-income Americans, 
homeowners, businesses, and industry. We also support the increase 
proposed in the President's budget for the Energy Information 
Administration (EIA) to $105 million, including an increase of $600,000 
for EIA's State Heating Oil and Propane Program, in order to cover the 
added costs of increasing the frequency of information collection (to 
weekly), the addition of natural gas, and increasing the number of 
state participants. EIA's new state-by-state data is very helpful. EIA 
funding is a critical piece of energy emergency preparedness and 
response. This funding will permit EIA to maintain key Forms 182, 856 
and 767 (involving crude oil and emissions). NASEO continues to support 
funding for a variety of critical deployment programs, including 
Building Codes Training and Assistance ($7.5 million), Rebuild America 
($3.8 million), Energy Star ($6.8 million) and Clean Cities ($9.6 
million). NASEO supports funding for the Office of Electricity Delivery 
and Energy Reliability, at least at the fiscal year 2006 request of 
$161.9 million, with specific funding for the Division of 
Infrastructure Security and Energy Restoration of $18 million, which 
funds critical energy assurance activities. We strongly support the R&D 
function, Operations and Analysis and Distributed Energy activities 
within this office. The industries program should be funded at a $74.8 
million level, equal to the fiscal year 2005 levels, to promote 
efficiency efforts and to maintain U.S. manufacturing jobs, especially 
in light of the loss of millions of these jobs in recent years. 
Proposed cuts in these programs are counter-productive and are 
detrimental to a balanced national energy policy. We remain concerned 
that a number of programs authorized in the Energy Policy Act of 2005 
(EPACT 2005) have received no funding. Of special interest are sections 
124, 125, 126, and 128 of EPACT 2005. We were pleased that funding has 
been provided for the pilot program under Section 140 of EPACT 2005.
    Over the past five years, both oil and natural gas prices have been 
rising in response to international events, increased domestic use and 
the result of the 2005 hurricanes. We expect $60 oil to continue for an 
extended period of time, with an expanded problem as summer approaches. 
Gasoline prices have been spiking recently. In addition, we now have 
quantifiable evidence of the success of the SEP program, which 
demonstrates the unparalleled savings and return on investment to the 
federal taxpayer of SEP. Every state gets an SEP grant and all states, 
the District of Columbia and territories support the program.
    In January 2003, Oak Ridge National Laboratory (ORNL) completed a 
study and concluded, ``The impressive savings and emissions reductions 
numbers, ratios of savings to funding, and payback periods .  .  . 
indicate that the State Energy Program is operating effectively and is 
having a substantial positive impact on the nation's energy 
situation.'' ORNL updated that study and found that $1 in SEP funding 
yields: (1) $7.22 in annual energy cost savings; (2) $10.71 in 
leveraged funding from the states and private sector in 18 types of 
project areas; (3) annual energy savings of 47,593,409 million source 
BTUs; and (4) annual cost savings of $333,623,619. The annual cost-
effective emissions reductions associated with the energy savings are 
equally significant: (1) Carbon--826,049 metric tons; (2) VOCs--135.8 
metric tons; (3) NOX -6,211 metric tons; (4) fine 
particulate matter (PM10)--160 metric tons; (5) 
SO2--8,491 metric tons; and (6) CO--1,000 metric tons. The 
report done by DOE's Inspector General in April 2006 criticized DOE 
monitoring of SEP but affirmed that state actions were consistent with 
the applicable law and regulation. State monitoring and verification 
has confirmed SEP's effectiveness.
    State Energy Program Special Projects and Other Deployment 
Programs.-- Through fiscal year 2005, SEP Special Projects provided 
matching grants to states to conduct innovative project development. It 
had been operated for ten years and has produced enormous results in 
every state in the United States. We could support funding of DOE's 
new, proposed SEP competitive program, but only within an $80 million 
SEP appropriation. The other deployment programs, including Rebuild 
America, Building Codes Training and Assistance, Clean Cities and 
Energy Star, should receive funding of $27.7 million in fiscal year 
2008.
    Industrial Energy Program.--A funding increase to a level of $74.8 
million for the Industrial Technologies Program (ITP) is warranted. 
This is a public-private partnership in which industry and the states 
work with the Department of Energy to jointly fund cutting-edge 
research in the energy area. The results have been reduced energy 
consumption, reduced environmental impacts and increased competitive 
advantage of manufacturers (which is more than one-third of U.S. energy 
use). The states play a major role working with industry and DOE in the 
program to ensure economic development in our states and to try to 
ensure that domestic jobs are preserved.
    Examples of Successful State Energy Program Activities.--The states 
have implemented thousands of projects. Here are a few representative 
examples.
    California.--The California Energy Commission has operated energy 
programs in virtually every sector of the economy. The state has 
upgraded residential and non-residential building codes, developed a 
school energy efficiency financing program, industrial partnerships in 
the food and waste industry, instituted a new replacement program for 
school buses utilizing the newest natural gas, advanced diesel and 
hybrid technologies. The buildings program has reduced consumption by 
enormous amounts over the past few years, through alternative financing 
programs and outreach. The state has worked closely with the western 
governors to implement a variety of new programs. California's 
greenhouse gas mitigation plans and a new solar initiative are moving 
forward.
    Colorado.--The state has initiated new energy legislation this year 
and is greatly expanding both renewable energy and ethanol/biofuels 
development. In addition, the state is working to assist new and 
existing building energy efficiency projects. Fifty new building 
projects have received assistance and the state has arranged $170 
million of investments in 80 performance contracting projects.
    Hawaii.--Three major pieces of energy legislation were passed in 
2006. The state energy office is working with state agencies to satisfy 
LEED Silver requirements and utilize Energy Star products. The state 
has been promoting ethanol and biodiesel development, developing a new 
Hawaii Energy Strategy in 2007, developing a major hydrogen energy 
program and implementing a large Renewable Portfolio Standard. The 
energy efficient buildings program has saved $10 million annually and 
the ``Green Business Program'' has saved $175 in water, energy and 
waste minimization for every $1 in SEP funds invested.
    Idaho.--In Idaho the state has rated homes utilizing the Energy 
Star tools and signed-up 93 new builders to participate in the program. 
An aggressive energy efficiency financing program has produced more 
than 2,500 loans, totaling over $16 million, resulting in significant 
energy savings. The agricultural energy program has focused on reducing 
irrigation costs and usage to improve agricultural productivity and 
costs. The state has initiated a new industrial program.
    Kentucky.--The programs supported by SEP have assisted in 
construction of high energy performance K-12 schools, developed $45 
million in energy savings performance contracts and funded energy 
efficiency and renewable energy projects at universities and local 
governments. The state is a leader in promoting Energy Star and they 
have an R&D grant program for energy efficiency and renewable energy.
    Louisiana.--The state energy office within the Department of 
Natural Resources is still heavily involved in post-Katrina relief. In 
addition, the state operates a cash rebate program of up to $2,000 for 
homeowner energy efficiency improvements. Thus far, almost 16,000 
rebates and loans have been issued totaling $21 million, and leveraging 
$199 million more in private funds. The state has also been expanding 
renewable energy development, working to enact stronger energy codes 
and promoting alternative transportation fuels.
    Mississippi.--The state operates an energy investment loan program 
targeted to schools, hospitals and manufacturers. They are focused on 
reducing energy consumption in state and school facilities and they 
have developed 50 energy management plans. Mississippi has been very 
active in the Energy Star program and has been attempting to conduct 
post-Katrina reconstruction in an energy efficient manner. They have 
also developed a rural business opportunity program.
    Missouri.--The energy office in Missouri has been operating a low-
interest energy efficiency loan program for school districts, colleges, 
universities and local governments. Thus far, public entities have 
saved more than $75 million each year, with more than 400 projects. The 
state energy office has also worked with the Public Utility Commission 
and the utilities within the State to get $20 million invested in 
residential and commercial energy efficiency programs. A new revolving 
loan for bio-diesel has also been initiated.
    New Jersey.--The state's Clean Energy Program has invested over 
$124 million thus far with resulting bill reductions to consumers 
projected to be almost $2 billion. 36 MW of solar has already been 
installed, and the state is implementing rebates, net metering, 
standardized interconnections and a Solar Renewable Energy Certificate 
trading program. The state also has an alternative fuel, bio-heat and 
bio-diesel rebate program.
    New Mexico.--With new state legislation, the state energy office is 
supporting and expanding renewable energy usage, tax incentives for 
hybrid vehicles, school energy efficiency programs, technical 
assistance to the wind and solar industries, and expansion of 
geothermal resources. The state has arranged approximately 40 energy 
performance contracts with annual energy savings in the millions. There 
has also been an expansion in the use of ethanol and bio-fuels.
    North Dakota.--As Kim Christianson testified before Chairman 
Dorgan's Subcommittee on Energy on February 12, 2007, the state energy 
office is supporting programs for wind, ethanol and bio-diesel 
promotion. 578 MW of wind projects have been developed, with nine 
ethanol and bio-diesel plants in various stages of development. 
Projects in 412 buildings has led to $24 million in energy efficiency 
improvements. The state has also funded energy efficiency programs for 
local builders, schools and for lower income households.
    Rhode Island.--The state has reorganized and elevated the energy 
agency, instituted new renewable energy and energy efficiency programs, 
joined with the neighboring states in expanded cooperative efforts and 
also focused on energy emergency preparedness.
    South Dakota.--The state has focused on supporting wind, ethanol 
and bio-diesel development. In addition, a matching energy efficiency 
grant program has been established for heating controls, lighting, etc. 
The state also operates an energy loan program for state-run facilities 
and a technical energy analysis program for those facilities.
    Texas.--The Texas Energy Office's Loan Star program has long 
produced great success by reducing building energy consumption and 
taxpayers' energy costs through efficient operation of public 
buildings. This saved taxpayers more than $200 million through energy 
efficiency projects. Over the next 20 years, Texas estimates that the 
program will save taxpayers over $500 million. In another example, the 
state promoted the use of ``sleep'' software for computers, which is 
now used on 136,000 school computers, saving 42 million kWh and 
reducing energy costs by $3 million annually. The state has initiated 
the Texas Emissions Reduction Plan/Texas Energy Partnership in 41 urban 
counties to reduce emissions through cost-effective energy efficiency 
projects.
    Utah.--SEP funds have been utilized to support solar and wind 
programs, as well as implementation of a stronger energy building code 
through training programs. The state has also supported local 
government energy efficiency and has developed a public building energy 
efficiency pilot.
    Washington.--The state energy agency works with the Northwest 
Energy Efficiency Alliance to target over $20 million in funding for 
energy efficiency and renewable energy projects. The state is also 
closely involved in energy emergency preparedness and response. The 
Resource Efficiency Managers Program, supported by SEP, conducts on-
site training for energy savings. For example, working with Ft. Lewis 
and Puget Sound naval facilities, the program has saved over $2.5 
million. A major focus on energy efficiency programs in buildings has 
been successful.
    West Virginia.--The energy office has focused on industrial energy 
programs savings, including identified savings of $3.7 million in 2006 
alone. Energy projects in the industrial sector have totaled $33 
million during the past 10 years. The state has also supported dramatic 
expansion of renewable energy programs and is projecting $3 million in 
school energy cost savings each year through energy efficiency 
programs. Other project areas include lighting demonstrations and 
energy audits, poultry house bio-filters, building energy use in 
conjunction with West Virginia University and innovative energy 
technology opportunities in conjunction with Marshall University.
                                 ______
                                 
          Prepared Statement of BP Exploration (Alaska), Inc.

  GAS HYDRATE RESOURCE ASSESSMENT ON THE NORTH SLOPE OF ALASKA, APRIL 
                                  2007

    The 2002 through present cooperative research between BP 
Exploration (Alaska), Inc. (BPXA) and the U.S. Department of Energy 
(DOE) in collaboration with the U.S. Geological Survey is helping to 
assess Alaska North Slope (ANS) methane hydrate resource potential. 
Since gas hydrate resource potential is unconventional and unproven, 
industry would not be able to perform this research without external 
support. Industry provides shallow 3D seismic and well data and access 
to infrastructure and DOE provides major research funding. This region 
is unique in that it combines known gas hydrate presence and existing 
production infrastructure. Continued full funding of the DOE Methane 
Hydrate program authorized by the Methane Hydrate Acts of 2000 and 2005 
is essential to the success of this research. Reservoir 
characterization, reservoir modeling, and associated studies culminated 
in the drilling of an approximately $4.3MM Stratigraphic Test well, 
MtElbert-01, in early 2007. This well successfully acquired critical 
gas hydrate-bearing formation and fluid data, which will help mitigate 
potential recoverable resource uncertainty. Future production testing 
is a key goal of the Federal Research and Development program and may 
follow, but this remains to be decided following Stratigraphic Test 
data analyses. Future studies, if approved, would acquire additional 
static data and would include production testing, likely from a gravel 
pad within production infrastructure.
    Methane hydrate may contain a significant portion of world gas 
resources within offshore and onshore arctic regions petroleum systems. 
In the United States, accumulations of gas hydrate occur within 
pressure-temperature stability regions in both offshore and also 
onshore near-permafrost regions. USGS probabilistic estimates indicate 
that clathrate hydrate may contain a mean of 590 TCF in-place ANS gas 
resources (Figure 1). Over 33 TCF in-place potential gas hydrate 
resources are interpreted within shallow sand reservoirs beneath ANS 
production infrastructure within the Eileen trend (Figure 2). Regional 
reservoir modeling studies indicate that from 0 to 12 TCF of this 33 
TCF in-place might potentially be recoverable, but future exploitation 
of gas hydrate would require developing feasible, safe, and 
environmentally-benign production technology, initially within areas of 
industry infrastructure. In the United States, the ANS onshore and Gulf 
of Mexico (GOM) offshore are currently known to favorably combine these 
factors. In addition to the clear benefits that would accrue to the 
State of Alaska through realization of gas hydrate as an energy 
resource, the information and technology being developed in this 
onshore ANS program will be an important component to assessing the 
possible productivity of the potentially much larger marine hydrate 
resource. The resource potential of gas hydrate remains unproven, but 
if proven, could lead to greater U.S. energy independence.
    Although up to 100 TCF in-place gas may be trapped within the gas 
hydrate-bearing formations beneath existing ANS infrastructure, it has 
been primarily known as a shallow gas drilling hazard to the hundreds 
of well penetrations targeting deeper oil-bearing formations and has 
drawn little resource attention due to no ANS gas export infrastructure 
and unknown potential productivity. There remain significant challenges 
in quantifying the fraction of these in-place resources that might 
eventually become a technically-feasible or possibly a commercial 
natural gas reserve.
    If gas can be technically produced from gas hydrate and if future 
studies help prove production capability at economically viable rates, 
then methane dissociated from ANS gas hydrate could help supplement 
fuel-gas, provide additional lean-gas for reservoir energy pressure 
support, sustain long-term production of portions of the 
geographically-coincident 20-25 billion barrels viscous oil resource, 
and/or potentially supplement conventional export-gas in the longer 
term. Continued government-industry collaborative support of this 
research is needed to help determine this future resource potential.


    Figure 1.--ANS Gas Hydrate Stability Zone Extent. The USGS has 
   estimated 590 TCF methane in place in hydrate form in this region 
                            (Courtesy USGS).


      Figure 2.--Eileen and Tarn Gas Hydrate Trends and ANS Field 
             Infrastructure (modified after Collett, 1998).

                                 ______
                                 
    Prepared Statement of the Alliance for Materials Manufacturing 
                               Excellence
    AMMEX organizations include the basic materials manufacturing 
sector (aluminum, chemicals, forest products, glass, metal casting, 
steel) in the U.S. economy along with several stakeholders in materials 
manufacturing, such as the Northeast Midwest Institute, the National 
Association of State Energy Officials and the American Council for an 
Energy-Efficient Economy. We are writing to urge Congress to restore 
funding to the Industrial Technologies Program (ITP) at the Department 
of Energy at a level of $125 million dollars and to restore the 
structure of the program to one that emphasizes new process development 
is all six materials industries as opposed to cross-cutting research.
    ITP is a true public-private partnership. DOE and materials 
manufacturers jointly fund cutting-edge research that addresses the 
needs of the Nation and materials manufacturers. All projects have the 
shared goals of reducing energy consumption, reducing environmental 
impact and increasing competitive advantage of U.S. materials 
manufacturers. The program is unique because we select only projects 
with ``dual benefits''--a public benefit such as reduced emissions or 
petroleum use, and an industry benefit such as a more efficient 
process.
    The Department of Energy's Industrial Technology Program (ITP) and 
U.S. materials manufacturers have a long history of joining forces to 
develop and deploy new technologies which save energy, improve our 
environment and enable U.S. materials manufacturers to have the world's 
most advanced technology on the plant floor.
    The chart below is representative of the gains in energy efficiency 
made by materials manufacturers since 1990, i.e., during the time they 
have partnered with DOE. 


    This chart also shows that materials manufacturers have become very 
efficient for the processes they operate today and that to make the 
type of gains in the future that have been seen since 1990, new process 
development is required.
    The chart below shows the funding history of the DOE ITP program 
since 1990.



    In the years 1990-1996 the program consisted largely of ``industry 
funding'' and averaged $100 million annually. There were some ``cross-
cutting'' projects in this time, but they were a small percentage of 
the total. Even in the years 1999-2003, spending on industry projects 
[black] vs. crosscutting [white] was approximately 2:1.
    Beyond 2003, the ITP program was not only the target of drastic 
cuts but remaining funds were rebalanced to favor crosscutting vs. 
industry specific projects. As shown in Figure 1, the level of energy 
efficiency of materials industries dictates that new process 
development (``industry specific'' projects) are required vs. the 
crosscutting (incremental) projects.
    Our request entails two parts:
  --A return to a total program level of $125 million.
  --A re-structuring of the program so as to return to the structure 
        that was so successful from 1990-2003--a focus on new process 
        development via industry specific research with at least a 
        ratio of 2:1 of new process research to crosscutting 
        (incremental) investments.
    AMMEX members have identified their top new process development 
concepts (not in priority order) which would be pursued at the funding 
levels and structure defined above;
Aluminum
    Improved, energy-efficient burners and furnaces for aluminum 
melting.
    Improved energy efficiency and recovery rates for recycling 
technologies.
Chemicals
    Development of alternative feedstocks for the chemical industry to 
reduce dependence on petroleum and natural gas derived feedstocks.
    Nano-manufacturing scale-up methodologies for key unit operations: 
synthesis, separation, purification, stabilization, and assembly.
    Development of low-energy, low-capital membrane or hybrid 
separations technology.
Glass
    Submerged Combustion Melter.
    Waste Heat Recovery and Use as Electrical or Chemical Energy.
    Low Residence Time Glass Refining Technologies.
Forest Products
    Advanced water removal and high efficiency pulping.
    Gasification of Spent Pulping Liquors and Biomass Residuals.
Metal Casting
    Simulation of Dimensional Changes and Hot Tears.
    Engineered Coatings for Aluminum Pressure Dies.
    Developing a lightweight production cast aluminum metal matrix 
composite alloy.
Steel
    Ironmaking by Molten Oxide Electrolysis.
    Ironmaking by Flash Smelting using Hydrogen.
    Demonstration of the Paired Straight Hearth Furnace Process.
                       ammex member organizations
Kurtz Bros.
American Iron and Steel Institute
Glass Manufacturing Industry Council
Aluminum Association
Waupaca
American Foundry Society
Chemical Industry VISION 2020 Technology Partnership
American Forest and Paper Association
Hyatt Die Cast
North American Die Casting Association
National Association of State Energy Officials
Northeast Midwest Institute
Gibbs Die Casting
Intermet Corning Glass
Smith Foundry Co.
Anheuser Busch--Longhorn Glass
Glass Service, Inc.
Carteret Die Casting Corp
Leone Industries Glass Packaging
North Carolina Industries of the Future
Armstrong
North Carolina Industries of the Future
Diagnostic Instrumentation & Analysis Laboratory (Mississippi State 
Univ.)
Society for Glass Science and Practices
Praxair, Inc.
Siemens Energy and Automation, Inc.
Gas Technology Institute
Nucast
Varicast
Clinkenbeard
AVALON Precision Casting Company
Industries of the Future West Virginia
Visteon
Bremen Castings Incorporated
Savannah River Technology Center
Indiana Industries of the future
Bridesburg Foundry
Oshkosh
Federal Bronze, A Division of the One Source Casting Corporation
West Virginia Development Office
Weyerhaeuser
Columbia Steel Casting Co., Inc.
Cunningham Pattern & Engineering, Inc.
GSC Investment Castings, Machining & Assembly
Delvest, Inc.
Fan Steel
Weatherly Casting & Machine Co.
Citation Innovative Metal Components
Magma
Atchison Casting
Yankee Casting
Saint Clair Die Casting, LLC
Ahresty
The BOC Group
Saint Paul Metalcraft Inc.
Thakar Aluminum Corporation
Eclipse Inc./Combustion Tec
Briggs & Stratton
Johns Manville a Berkshire Hathaway Company
University Center for Glass Research
Owens Corning
CPI Cast Products Inc.
Pennsylvania Industries of the Future
Callen Manufacturing Corporation
CertainTeed
ABCO Diecasters Inc.
Energy Industries of Ohio
U.S. Silica Company
Borax
A&B Die Casting
PPG Industries
Brillcast, Inc.
Durametal
May Foundry & Machine
NEENAH Foundry Company
Citation Innovative Metal Components
SECAT
                                 ______
                                 
             Prepared Statement of IMPACT Technologies LLC
    Dear Honorable Senators: I am a citizen, tax payer, small business 
owner, engineer, inventor and developer of new technology covering 
several industries. I am also a small oil producer and investor in the 
oil and gas industry. I have worked for a very large (major) oil and 
gas company (Chevron) and smaller independent oil and gas producers. 
After establishing my own companies I have obtained bank financing, 
industry financing, angel financing, personal investments, state 
investment groups and directly with the U.S. Department of Energy (DOE) 
and other groups supported by DOE funding, including the Petroleum 
Technology Transfer Council (PTTC), Stripper Well Consortium (SWC) and 
several universities. In fact, I have invested my time by (previously) 
serving on the governing boards of the SWC and PTTC.
    The return on public investments (DOE, NASA, others) in properly 
vetted technologies is tremendous. I have found that industry will not 
support a new technology unless it is proven. For higher technologies 
that proving process is expensive and risky--too risky or requiring too 
long a time frame for all banks, most angel financing and too small for 
venture capital groups. I have invested significant personal monies in 
my own projects, but that will only go so far in developing significant 
technologies. That investment GAP must be filled (fully or partially) 
by public investment yielding tremendous returns in dollars and in 
public good.
    Industry wide, that tremendous return on public investment through 
DOE has included the coal bed methane resource development (measured in 
the trillion of cubic feet of natural gas) for the public benefit. 
Unconventional oil and gas shale development will only occur with DOE 
support of key technologies. The public investment of the DOE (directly 
and through SWC) has allowed technologies to be developed and tested so 
that private groups can then invest to take the products commercial. 
Most of these technologies would not become commercial if not for this 
public investment boost.
    Specifically and on a more direct and personal level, approximately 
$170,000 in DOE and SWC (cost share) funds has allowed Impact to design 
and prove of a new, patented pump technology that will gross an 
estimated $305 million over 10 years, generating taxes and jobs. This 
new pump technology will impact the oil and gas, construction, 
demolition, environmental and job shop industries. It will be licensed 
to existing pump manufacturers after the 5 years. That small, but 
significant, DOE and SWC investment will allow private angel investors 
to see proven technology and feel comfortable enough to invest and take 
the company to the next commercialization level. It will yield a direct 
return on investment of over 1,800:1 not counting the benefits it will 
generate for the impacted industries! It would not have occurred 
without DOE and SWC funding.
    A second technology now being commercialized by Impact is based on 
a $180,000 (cost share) investment from DOE and the SWC plus (funds 
used to leverage other state funds including) Oklahoma's OCAST 
investment group. With that public investment Impact has built a 
patented motor prototype and is now building on that success to 
commercialize these new motors for drilling. This new motor technology 
will impact the oil and gas, environmental, geothermal, resource 
mining, utilities and construction industries. That DOE and SWC 
investment will generate an estimated $228 million over 10 years, based 
on our conservative business plan forecasts. That is a return on public 
investment of over 1,300:1 not including the benefits to the impacted 
industries and the public through taxes, jobs and improved competition!
    A third technology Impact has developed with others is the SPI Gel 
Technology which is directly a result of the Department of Energy's 
investment in the Stripper Well Consortium. This is a new patent-
pending silicate based gel for reducing water production and pipe 
repairs. It is environmentally safe for fresh water applications. We 
are in the field test stage of this technology right now and will 
license it out later this year. The public investment of $203,000 (cost 
share) will return over a 1,000:1 return in gross sales and other 
benefits to society through jobs, taxes and continued resource 
production. This technology would not be developed without DOE and SWC 
funds.
    I have personally seen the investments of the DOE directly in and 
through the SWC and PTTC on small oil and gas producers. These new 
technologies are significant and will have a major impact on the public 
energy resources. These investments are small but have a extremely high 
return (over 1,000:1) and should be continued. These public funds fill 
the gap between concept and private funding to commercialize good 
ideas.
                                 ______
                                 
      Prepared Statement of the National Mining Association (NMA)

                          NMA RECOMMENDATIONS

Department Of Energy (DOE)
    $108 million for the FutureGen project; $257 million in previously 
appropriated funds should be designated for FutureGen; $300 million for 
base coal research and development programs; $273 million for the Clean 
Coal Power Initiative (CCPI); $8.4 million for the loan guarantee 
office and $9 billion cap on federal loan guarantee commitments; $15 
million for DOE's participation in the Asia-Pacific Partnership on 
Clean Development and Climate.
U.S. Army Corps Of Engineers
    Civil Works Program.--$180 million for the Regulatory Program. See 
the table below for NMA's list of priority lock and dam projects and 
recommendations for levels of funding required for their completion.

                               BACKGROUND

Office of Fossil Energy
    NMA strongly supports: the $108 million requested for the FutureGen 
project; as a zero cost action, the $257 million in unused Clean Coal 
Technology Program funds should be deferred to fiscal year 2009 for the 
FutureGen project (this action is essential to maintaining private 
sector cost-share and financing construction); and recommends at least 
$300 million be appropriated for base coal research and development 
programs.
    In addition, NMA recommends that CCPI be funded at a level of $273 
million, which would enable DOE to conduct a third solicitation 
targeting advanced technology systems that capture carbon dioxide for 
sequestration.
    The FutureGen public-private partnership will design and build, in 
the United States, the first-of-a-kind commercial-scale power plant 
that will provide the technological capability to: (1) capture and 
permanently store 90 percent or more of the plant's CO2 
emissions; (2) power about 150,000 American homes with the clean 
electricity it generates from coal; and (3) co-produce hydrogen and 
potentially other useful by-products from coal.
    The FutureGen Industrial Alliance, comprised of the largest coal 
producers and users in the world, has signed a cooperative agreement 
with the DOE to provide $250 million toward the cost of the project. 
The alliance members have extensive experience in building large-scale 
coal-fueled projects, while meeting budget and performance 
requirements. The alliance remains committed to moving the FutureGen 
project to its targeted completion in 2012, provided a multi-year 
funding scenario is secure, and its funding does not come at the 
expense of other coal research and demonstration programs.
    Technological advancements achieved in the base coal research and 
demonstration programs such as gasification, advanced turbines, and 
carbon sequestration, provide the component technologies that will 
ultimately be integrated into the FutureGen project. NMA believes these 
programs should be funded at a level of at least $300 million (which 
should include $109 for carbon sequestration--$30 million above the 
president's fiscal year 2008 budget request). In addition, the advanced 
turbine program should be funded at $40 million instead of the 
requested level of $22 million. The increase in funding for these and 
other programs will ensure the FutureGen project meets the intended 
goals.
    In addition, NMA recommends a $3 million level of funding for the 
Center for Advanced Separation Technology (CAST), which is led by a 
consortium of seven universities with mining research programs. The 
advanced separation program conducts high-risk fundamental research 
which will lead to revolutionary advances in separation processes for 
the coal industry and develop technologies that crosscut the full 
spectrum of mining and minerals industries.
Asia-Pacific Partnership on Clean Development and Climate (APP)
    NMA supports the administration's total request of $52 million for 
this partnership and specifically, the request of $15 million to fund 
the U.S. DOE's participation.
    The APP will spur development of cutting edge technologies and 
practices that support economic growth while reducing emissions, 
including greenhouse gas emissions. It will result in expansion of 
market opportunities for U.S. mining and equipment companies and other 
U.S. businesses.
    The APP, involving the United States, Australia, China, India, 
Japan and South Korea, is important for a number of reasons:
  --It will result in real emissions reductions. With the participation 
        by China and India, APP is the only international agreement 
        addressing rapid emissions growth in the developing world, 
        which is forecast to surpass emissions of industrialized 
        nations in 2010. APP is a voluntary, technology-based approach 
        to emissions reduction geared towards future economic growth 
        and energy security and will be more effective than unrealistic 
        mandates or treaties.
  --It builds on Methane-to-Markets and other successful programs that 
        reduce greenhouse gas emissions. The U.S. coal industry has 
        captured and re-used 308 billion cubic feet of coal mine 
        methane--the equivalent of removing 40 million automobiles per 
        year from the roads. APP, working with the EPA's Methane-to-
        Markets program will use U.S. experience and expertise to 
        accelerate large-scale capture and recycling of methane in 
        China and India.
  --It helps preserve coal as an important energy source. The United 
        States, China, India and Japan will be at the center of a 
        significant rise in population, economic activity and energy 
        use in the next 50 years. Coal is essential to sustaining 
        America's competitiveness and vitality in a changing world, as 
        it is in China and India. APP supports improvements in 
        efficiency in both coal mining and use through the acceleration 
        of clean coal technologies, industrial technology strategic 
        planning and energy efficiency best practices.
  --It creates new markets for U.S. companies in the emerging economies 
        of China and India.
U.S. Army Corps Of Engineers
    Regulatory Program.-- NMA supports the Administration's request of 
$180 million for administering the Corps' Clean Water Act (CWA), 
Section 404 permit program and for implementing the Memorandum of 
Understanding (MOU).
    The Corps' Regulatory Branch plays a key role in the U.S. economy 
since the Corps currently authorizes approximately $200 billion of 
economic activity through its regulatory program annually. The ability 
to plan and finance mining operations depends on the ability to obtain 
CWA Section 404 permits issued by the Corps within a predictable 
timeframe. In addition, NMA recommends that a portion of such 
regulatory program funding be used for implementing the MOU issued on 
February 10, 2005, by the Corps, the U.S. Office of Surface Mining, EPA 
and the U.S. Fish and Wildlife Service. The MOU encourages a 
coordinated review and processing of surface coal mining applications 
requiring CWA Section 404 permits.
    Below is a table indicating NMA's fiscal year 2008 Priority 
Navigation Projects.

                                NMA FISCAL YEAR 2008 PRIORITY NAVIGATION PROJECTS
----------------------------------------------------------------------------------------------------------------
                                                          Fiscal Year 2007   Fiscal Year 2008         NMA
                      Construction                            Request            Request        Recommendations
----------------------------------------------------------------------------------------------------------------
Robert C. Byrd Lock and Dams Ohio River, OH/WV.........         $1,800,000         $1,000,000         $1,800,000
Kentucky River Lock Addition, Tennessee River, KY......  .................        $52,000,000        $52,000,000
Marmet Lock and Dam, Kanawha River, WV.................        $50,800,000        $25,000,000        $27,000,000
McAlpine Locks and Dams, Ohio River, IN/KY.............        $70,000,000        $45,000,000        $45,000,000
Locks and Dams 2, 3, 4, Monongahela River, PA..........        $62,772,000        $70,300,000        $70,300,000
J.T. Myers Locks and Dams, Ohio River, IN/KY...........  .................  .................        $10,500,000
Olmsted Locks and Dams, Ohio River, IL/KY..............       $110,000,000       $104,000,000       $104,000,000
Winfield Lock and Dam, Kanawha River, WV...............         $4,300,000  .................  .................
Emsworth Dam, Ohio River, PA...........................        $17,000,000        $43,000,000        $43,000,000
Greenup Lock and Dam, Ohio River, KY/OH................  .................  .................        $12,100,000
----------------------------------------------------------------------------------------------------------------

                                 ______
                                 
           Prepared Statement of the American Nuclear Society

    Chairman Dorgan, Ranking Member Domenici, members of the 
subcommittee, on behalf of the more than 10,000 members of the American 
Nuclear Society, I am pleased to provide testimony on fiscal year 2008 
appropriations for the U.S. Department of Energy.
    First, as you know, ANS represents a diverse cadre of nuclear 
professionals. As such, our members' opinions on nuclear issues are 
often wide-ranging, and perhaps sometimes different from the 
subcommittee. However, the ANS truly appreciates the thoughtful and 
deliberate manner in which the subcommittee approaches issues related 
to nuclear energy, science, and technology.
    For fiscal year 2008, the ANS supports a strengthened portfolio of 
Federal investments in nuclear energy, science and technology. 
Specifically, the ANS recommends that the subcommittee fully fund the 
DOE Office of Nuclear Energy's fiscal year 2008 request, including the 
Advanced Fuel Cycle Initiative, the Nuclear Hydrogen Initiative, and 
the Generation IV reactor programs.
    The ANS also supports full funding for the Yucca Mountain 
repository program, so that DOE can proceed with its plans to submit a 
license application to the NRC by June 2008, and $913 million for the 
Nuclear Regulatory Commission.
    The ANS is aware that the Bush administration has proposed 
terminating funding for the University Reactor Infrastructure and 
Education Assistance program line in its fiscal year 2007 and 2008 
budget requests.
    In response, the ANS created the Special Committee on Federal 
Investment in Nuclear Education to review the issues and make 
recommendations on the issue. This report, entitled ``Nuclear's Human 
Element,'' focuses on longer term issues that need to be addressed by 
Congress and the executive branch in order to ensure the health and 
vitality of the U.S. nuclear science and engineering enterprise. It has 
generated a lot of positive discussion within the nuclear community, 
and we hope the subcommittee will use it to help guide the scope and 
structure of future Federal investments in this area.
    For fiscal year 2008, the ANS supports the request by the Nuclear 
Engineering Department Heads Organization (NEDHO) and the National 
Organization of Test, Research, and Training Reactors (TRTR) to provide 
$50.1 million in fiscal year 2008 in funding for university-based 
nuclear engineering programs, the level authorized by the Energy Policy 
Act of 2005.
    The ANS is aware that the DOE Office of Nuclear Energy has 
indicated its desire to continue funding university programs through 
its existing R&D programs and we recognize the debate over funding 
vehicles is more nuanced than ``line-item or nothing.'' However, we 
agree with NEDHO and TRTR that, regardless of the mechanism through 
which it is provided, DOE funding for university programs must be 
predictable, growth-oriented, and focused on longer-term scientific and 
workforce development milestones.
    Regarding the Global Nuclear Energy Partnership (GNEP), the ANS 
recognizes that there are concerns about the aggregate costs and 
technological pathways associated with implementation of the GNEP 
initiative. However, the Society supports the administration's proposed 
increase in fiscal year 2008 funding for the Advanced Fuel Cycle 
Initiative which will allow the pertinent cost and design questions to 
be explored at an expedient pace.
    Finally, the ANS supports an fiscal year 2008 funding level of $100 
million for the Next-Generation Nuclear Plant, funded through the 
Generation IV Nuclear Energy Systems Initiative account. The NGNP holds 
great promise to employ nuclear energy to meet U.S. hydrogen production 
and industrial process heat needs, and its development should be 
accelerated to meet the milestones set forth in the Energy Policy Act 
of 2005.
                                 ______
                                 
        Prepared Statement of the American Geological Institute

    To the chairman and members of the subcommittee: Thank you for this 
opportunity to provide the American Geological Institute's perspective 
on fiscal year 2008 appropriations for geoscience programs within the 
subcommittee's jurisdiction. The President's budget request for 
Department of Energy (DOE) research programs provides no funding for 
oil and gas research and development. Not only would the request 
terminate basic research for oil and gas, it would also repeal the 
ultradeep water and unconventional natural gas and other petroleum 
research funding proposed in the Energy Policy Act of 2005. Given the 
interest of the administration and Congress to reduce the Nation's 
foreign oil dependence and reduce prices on oil and natural gas, it 
seems like an inopportune time to eliminate programs that could help 
with these objectives. We are especially concerned about the reduction 
or outright termination of oil and gas research funding for 
universities. These programs not only support innovations in oil and 
gas exploration and extraction, but the teaching and training of the 
next generation of professionals and faculty in these vital areas. AGI 
applauds the requested 7 percent increase for the largest supporter of 
physical science research in the United States, DOE's Office of 
Science, and encourages the subcommittee's full support for this 
increase. We also support increased funding requests for clean energy 
research, which focuses spending on solar, biomass/biofuels, hydrogen 
fuel, FutureGen and nuclear power, however, spending for other clean 
energy alternatives, such as geothermal, could be included in 
appropriations while remaining consistent with national needs and 
objectives.
    AGI is a nonprofit federation of 44 geoscientific and professional 
associations that represent more than 100,000 geologists, 
geophysicists, and other earth scientists. The institute serves as a 
voice for shared interests in our profession, plays a major role in 
strengthening geoscience education, and strives to increase public 
awareness of the vital role that the geosciences play in society's use 
of resources and interaction with the environment.

               DOE FOSSIL ENERGY RESEARCH AND DEVELOPMENT

    AGI urges you to take a critical look at the Department of Energy's 
Fossil Energy Research and Development (R&D) portfolio as you prepare 
to craft the fiscal year 2008 Energy and Water Development 
Appropriations bill. Over the past 7 years, Members of Congress have 
strongly emphasized the need for a responsible, diversified and 
comprehensive energy policy for the Nation. The growing global 
competition for fossil fuels has led to a repeated and concerted 
request by Congress to ensure the Nation's energy security. Energy 
Information Administrator Guy Caruso has noted the Nation's need for 
fossil fuels over the next 30 years and thus the critical need to 
continue R&D on fossil fuels and all other energy resources. The 
President's proposal, which provides no funding for oil and gas R&D, is 
short sighted and inconsistent with congressional concerns. No funding 
for oil and gas R&D will hinder our ability to achieve energy stability 
and security.
    The research dollars spent by Fossil Energy R&D go primarily to 
universities, State geological surveys and research consortia to 
address critical issues like enhanced recovery from known fields and 
unconventional sources that are the future of our natural gas supply. 
This money does not go into corporate coffers, but it helps American 
businesses remain competitive by giving them a technological edge over 
foreign companies. All major advances in oil and gas production can be 
tied to research and technology. AGI strongly encourages the 
subcommittee to ensure a balanced and diversified energy research 
portfolio that does not ignore the Nation's primary sources of energy, 
fossil fuels, for at least the next 30 years.
    Today's domestic industry has independent producers at its core. 
With fewer and fewer major producing companies and their concentration 
on adding more expensive reserves from outside of the contiguous United 
States, it is the smaller independent producers who are developing new 
technologies to extract our domestic resources efficiently and cleanly. 
However, without Federal contributions to basic research that drives 
innovation, small producers cannot develop new technologies as fast, or 
as well, as they do today. The DOE program has produced many key 
successes among the typical short-term (1 to 5 year) projects. And even 
failed projects have proven beneficial, because they've often resulted 
in redirection of effort toward more practical exploration and 
production solutions. Ideally, DOE and private sector participants 
share the programs R&D funding on a 50-50 basis, with the government 
contributing actual dollars and the company contributing dollars or 
``in kind'' products and services. To justify the use of public funds, 
new technology developed from such projects is made available to 
industry.
    In 2003, at the request of the House Interior Appropriations 
Subcommittee, the National Academies released a report entitled Energy 
Research at DOE: Was It Worth It? Energy Efficiency and Fossil Energy 
Research 1978 to 2000. This report found that Fossil Energy R&D was 
beneficial because the industry snapped up the new technologies created 
by the R&D program, developed other technologies that were waiting for 
market forces to bring about conditions favorable to commercializing 
them and otherwise made new discoveries. In real dollars from 1986-2000 
the government invested $4.5 billion into Fossil Energy R&D. During 
that time, realized economic benefits totaled $7.4 billion. This 
program is not only paying for itself, it has brought in $2.9 billion 
in revenue.
    Unfortunately, despite this success, the President's fiscal year 
2008 budget request continues the alarming reduction of energy R&D 
funding by eliminating all funding for our primary energy resources, 
oil and gas. There has been an 85 percent drop in renewable, fossil and 
nuclear energy R&D funding at DOE since 1978. Federal funding for 
renewable, fossil and nuclear R&D has decreased dramatically from $5.5 
billion in 1978 to $793 million in 2005 according to a Government 
Accountability Office (GAO) report entitled Key Challenges Remain for 
Developing and Deploying Advanced Energy Technologies to Meet Future 
Needs and released in December 2006. Such significant under-investment 
in energy R&D over many decades hinders progress on cost-effective and 
environmentally-sound exploration and extraction of raw energy 
resources and clean and efficient development, production and use of 
energy products.
    The Federal investment in energy R&D is particularly important when 
it comes to longer-range research with diversified benefits. In today's 
competitive markets, the private sector focuses dwindling research 
dollars on shorter-term results in highly applied areas such as 
technical services. In this context, DOE's support of fossil energy 
research, where the focus is truly on research, is very significant in 
magnitude and impact compared to that done in the private sector, where 
the focus is mainly on development. Without more emphasis on research, 
we risk losing our technological edge in the highly competitive global 
market place.
    As we pursue the goal of reducing America's dependence on unstable 
and expensive foreign sources of oil, we must continue to increase 
recovery efficiency in the development of existing domestic oilfields, 
conserving the remaining in-place resources. Since the 1980s, 80 
percent of new oil reserves in this country have come from additional 
discoveries in old fields, largely based on re-examination of 
previously collected geoscience data. These data will become even more 
important in the future with the development of new recovery 
technologies.
    Perhaps one of the most promising areas of R&D for domestic oil 
supplies are in the ultradeep waters where drilling is allowed in the 
Gulf of Mexico. The Energy Policy Act of 2005, set aside $50 million 
annually from collected offshore royalties for ultradeep water and 
other unconventional oil and gas R&D to support clean and efficient 
exploration and extraction in the Gulf. The President's budget request 
would repeal this program and provide no funding for ultradeep water 
and other unconventional oil and gas R&D. AGI asks that you consider 
R&D spending or other incentives to encourage the private sector to 
invest in clean and efficient technological advances to enhance our 
unconventional fossil fuel supply in offshore regions where drilling is 
allowed and significant infrastructure already exists.
    The research funded by DOE leads to new technologies that improve 
the efficiency and productivity of the domestic energy industry. 
Continued research on fossil energy is critical to America's future and 
should be a key component of any national energy strategy. The societal 
benefits of fossil energy R&D extend to such areas as economic and 
national security, job creation, capital investment, and reduction of 
the trade deficit. The Nation will remain dependent on petroleum as its 
principal transportation fuel for the foreseeable future and natural 
gas is growing in importance. It is critical that domestic production 
not be allowed to prematurely decline at a time when tremendous 
advances are being made in improving the technology with which these 
resources are extracted. The recent spike in oil and natural gas prices 
is a reminder of the need to retain a vibrant domestic industry in the 
face of uncertain sources overseas. Technological advances are 
necessary to maintaining our resource base and ensuring this country's 
future energy security.

                         DOE OFFICE OF SCIENCE

    The DOE Office of Science is the single largest supporter of basic 
research in the physical sciences in the United States, providing more 
than 40 percent of total funding for this vital area of national 
importance. The Office of Science manages fundamental research programs 
in basic energy sciences, biological and environmental sciences, and 
computational science and, under the President's budget request, would 
grow by 7 percent from about $4.1 billion last year to $4.4 billion. 
AGI asks that you support this much needed increase.
    Within the Office of Science, the Basic Energy Sciences (BES) 
program supports fundamental research in focused areas of the natural 
sciences in order to expand the scientific foundations for new and 
improved energy technologies and for understanding and mitigating the 
environmental impacts of energy use. BES also discovers knowledge and 
develops tools to strengthen national security.
    The Basic Energy Sciences (BES) would remain the largest program in 
the office with an increase of 5.5 percent from $1.420 billion in 
fiscal year 2007 to $1.498 billion in fiscal year 2008 in the 
President's request. Within the BES, Chemical Sciences, Geosciences and 
Biosciences would receive a $15.4 million increase over their fiscal 
year 2007 budget. AGI strongly supports the requested increases for 
these programs.

               DOE ENERGY EFFICIENCY AND RENEWABLE ENERGY

    Within DOE Energy Efficiency and Renewable Energy, the President's 
fiscal year 2008 budget request would not support any R&D in geothermal 
technology. AGI asks that the subcommittee consider supporting 
geothermal R&D at the fiscal year 2006 level of $23 million.
                                 ______
                                 
           Prepared Statement of the Alliance to Save Energy

    The Alliance to Save Energy (the Alliance) is a bipartisan, 
nonprofit coalition of business, government, environmental, and 
consumer leaders committed to promoting energy efficiency worldwide to 
achieve a healthier economy, a cleaner environment, and greater energy 
security. The Alliance, founded in 1977 by Senators Charles Percy and 
Hubert Humphrey, currently enjoys the leadership of Senator Mark Pryor 
as chairman; Duke Energy President and CEO James E. Rogers is the co-
chairman; and Representatives Ralph Hall, Zach Wamp and Ed Markey and 
Senators Jeff Bingaman, Susan Collins, Larry Craig and Byron Dorgan as 
its vice-chairs. More than 120 companies and organizations support the 
Alliance as Associates. The Alliance recommends increases of $41.3 
million for several existing energy-efficiency deployment programs, and 
$55 million for new programs in fiscal year 2008.

                               BACKGROUND

    Energy Efficiency--Our Greatest Resource.--Gasoline, natural gas, 
and electricity prices have all reached all-time highs in the last 
couple of years. These price increases cost American families and 
businesses over $300 billion each year. The President recognized energy 
security as a major issue in the State of the Union message. And many 
of the world's top scientists recently reaffirmed the urgent need to 
address global warming in a timely manner. Energy efficiency is the 
quickest, cheapest, and cleanest way to address the linked issues of 
energy prices, energy security, air pollution, and global warming. 
Energy efficiency already is the Nation's greatest energy resource--we 
now save more energy each year due to actions since 1973 to increase 
energy efficiency than we get from any single energy source, including 
oil. But much more can and needs to be done.
    A Record of Success.--DOE programs play a key role in developing 
the energy-efficiency resource through the research and development 
(R&D) of new energy-efficient technologies, and by helping to deploy 
these technologies. A 2001 National Research Council report found that 
every dollar invested in 17 DOE energy-efficiency R&D programs returned 
nearly $20 to the U.S. economy in the form of new products, new jobs, 
and energy cost savings to American homes and businesses. Environmental 
benefits were estimated to be of a similar magnitude.
    Efficiency-Related Budget Authorizations and Studies.--Several 
reports and legislative authorizations have supported major increases 
in funding for DOE energy efficiency programs. The Energy Policy Act of 
2005 (EPAct 2005) authorized $865 million for energy efficiency R&D in 
fiscal year 2007, more than $1 billion for deployment programs, and 
additional funds for hydrogen and fuel cells and for electric energy 
R&D. This follows calls for expanding energy efficiency research by the 
National Commission on Energy Policy, the President's Committee of 
Advisors on Science and Technology, the Energy Future Coalition, and 
the President's National Energy Policy Development Group.
    Summary of the President's Energy Efficiency Fiscal Year 2008 
Budget Request.--The President's overall fiscal year 2008 budget 
request for energy-efficiency programs within DOE's Office of Energy 
Efficiency and Renewable Energy is $515 million, down nearly $117 
million (18 percent) from the fiscal year 2006 appropriated level. This 
large cut follows a gradual slide from the $695 million that was 
appropriated for these programs in fiscal year 2002. Funding for these 
programs has decreased by one-third (37 percent) since 2002, after 
adjusting for inflation. In addition, the request for electricity R&D 
programs, many of which focus on efficiency, is $86 million, a decrease 
of $50.3 million (37 percent) from the fiscal year 2006 appropriated 
level. Several deployment programs, along with industrial R&D, have 
experienced some of the biggest funding cuts.

                        ALLIANCE RECOMMENDATIONS

    In order to address the critical energy problems facing our Nation, 
the Alliance recommends funding DOE energy-efficiency programs in line 
with the EPAct 2005 authorized levels. Some specific funding requests 
are outlined below:
    It is important to maintain a broad portfolio of programs. The 
impact of DOE energy-efficiency programs has been multiplied by the 
combination of research to develop new technologies, voluntary 
deployment and market transformation programs to move them into the 
marketplace, and standards and codes to set minimum thresholds for 
using cost-effective technologies. And while the combination of 
programs has had tremendous impact, the government has often not been 
successful at picking winning technologies.
    Thus, it is important that the increases proposed in the 
administration's budget and those proposed below not be paid for 
through cuts to other highly-effective efficiency programs, which also 
address critical national energy needs. While the fuel cell and 
alternative fuels programs are important, they do not take the place of 
core programs that can have broader, more certain, and more near-term 
energy savings impacts. In particular, the Alliance opposes repeated 
cuts that threaten the viability of Industrial Technologies research 
programs and the dramatic proposed cuts to the distributed energy R&D 
program and the Weatherization Assistance Program.
Key Existing Deployment Programs (Office of Energy Efficiency and 
        Renewable Energy)
    Building Energy Codes (Building Technologies).--While residential 
and commercial building codes are implemented at the State level, 
States rely on DOE for technical specifications, training, and 
implementation assistance. The Alliance estimates that building energy 
codes could save 7.2 quads of energy by 2025. The new 2006 IECC model 
residential code includes measures to simplify the code and ease 
implementation, and thus presents exciting opportunities to increase 
code adoption and compliance. Yet the administration has proposed 
cutting funding for building codes by one-third.
    EPAct 2005 (sec. 128) authorized $25 million per year for building 
codes, including $10 million for a new program to help States improve 
compliance with their codes. Several studies have found poor rates of 
compliance with building codes, causing unnecessary energy waste. This 
new program would assist states that have adopted up-to-date building 
codes to implement a plan to achieve 90 percent compliance through 
better training, enforcement, or other measures. Thus the Alliance 
recommends a $19.4 million increase above the fiscal year 2006 
appropriated level, for a total of $25 million.
    Federal Energy Management Program.--This program helped cut Federal 
building energy use by 24 percent from 1985-2001--a reduction that now 
saves Federal taxpayers roughly $1 billion each year in reduced energy 
costs. But funding has steadily decreased for this program, even though 
large savings remain untapped. EPAct 2005 and Executive Order 13423, in 
addition to setting aggressive new Federal energy saving targets, 
require DOE to implement rules, guidelines, and reports on the targets, 
Federal building standards, Federal procurement, and metering. A needed 
funding increase for this program will actually save taxpayers money in 
lower Federal energy bills. The Alliance recommends a $5 million 
increase above the fiscal year 2006 level, for a total funding level of 
$24 million.
    Equipment Standards and Analysis (Building Technologies).--
Appliance energy efficiency standards (e.g. for refrigerators) have 
already reduced U.S. electricity use by an estimated 2.5 percent and 
reduced peak power demand by the output of 70 power plants, at minimal 
cost to the Federal Government, and saving consumers billions of 
dollars in their energy bills. But the program is years behind on 
issuing standards for close to 20 products. EPAct 2005 requires 
additional rulemakings. DOE has issued an ambitious plan to catch up, 
and has requested a $3.5 million increase to do so. But a new GAO 
report says that is not enough to meet a 600 percent increase in 
workload, and some of the most important standards are not even in the 
plan. The Alliance recommends a $10 million increase over the fiscal 
year 2006 level for total funding of $20.2 million.
New Deployment Programs (see also Building Energy Codes above)
    Energy Efficiency Pilot Program (Office of Electricity Delivery and 
Energy Reliability).--State and utility energy-efficiency programs have 
been remarkably successful at reducing electricity demand, strain on 
the grid, and the need for costly new power plants. However, they have 
been starved for funds due to electric utility restructuring. A few 
states are experimenting with innovative performance-based policies to 
prioritize efficiency resources before increasing energy supplies. 
EPAct 2005 (sec. 140) authorized $5 million per year for a new program 
to provide funding to several States to assist in the design and 
implementation of energy-efficiency resource programs that will lower 
electricity and natural gas use by at least 0.75 percent a year. The 
Alliance recommends $5 million for this new program.
    Zero Energy Commercial Buildings Initiative (Building 
Technologies).--Buildings are a major part of the problem and solution 
of high natural gas and electricity use and climate change. The 
buildings sector in the United States accounts for about 40 percent of 
total energy consumption and 40 percent of carbon dioxide emissions, 
and about half of that is from commercial buildings. There is a growing 
consensus on the need and opportunity for aggressive action to 
dramatically improve building energy efficiency; the American Institute 
of Architects (AIA) has called for reducing fossil fuel use in new and 
renovated buildings by 50 percent by 2010 and eventually by 100 
percent. DOE has a zero energy homes program, but achieving this goal 
for the many kinds of commercial buildings is even more difficult and 
more complicated. A large concerted multi-year initiative is critical 
to achieve these deep savings throughout the commercial sector.
    The Alliance, along with the AIA, American Society of Heating 
Refrigerating and Air-conditioning Engineers, Lawrence Berkeley 
National Laboratory, U.S. Green Building Council, and World Business 
Council for Sustainable Development, are the founding sponsors of an 
initiative for zero-energy commercial buildings by 2030. This public-
private collaboration will combine better tracking of real energy 
performance, demonstrations of replicable solution packages for 
different building types, strategic research, and a market 
transformation plan. The Alliance recommends $20 million for this new 
program in fiscal year 2008, to add to and complement the existing 
funding request for commercial buildings R&D.
    Energy Efficiency Public Information Initiative (Program 
Support).--The quickest way to reduce energy demand and bring high 
energy prices down is through consumer education. EPAct 2005 (sec. 134) 
authorizes $90 million per year for a public education program to 
provide consumers the information and encouragement necessary to reduce 
energy use. Such programs have a proven track record of success, as in 
the 2001 ``Flex Your Power'' campaign in California, which 
significantly reduced consumer electricity demand and assisted in 
avoiding further blackouts. DOE has contributed small amounts of 
funding to effective education campaigns, but much more is needed. The 
Alliance recommends $30 million for this new program in fiscal year 
2008.
Additional Priorities
    Industrial Best Practices (Industrial Technologies--
Crosscutting).--One of the most effective DOE industrial programs 
conducts plant-wide energy assessments, develops diagnostic software, 
conducts training, develops technical references, and demonstrates 
success stories. Oak Ridge National Laboratory reports that DOE-ITP's 
Best Practices outreach saved 82 trillion Btu in 2002, worth $492 
million. The Alliance recommends a $3 million increase for Best 
Practices, for total funding of $10.9 million.
    Energy Star (Building Technologies).--Energy Star is the most 
successful voluntary, public-private deployment program at EPA and DOE, 
making it easy for consumers to find and buy numerous energy-efficient 
products. And it functions on a very small budget. Every Federal dollar 
spent on the Energy Star program results in an average savings of more 
than $75 in consumer energy bills and a reduction of about 3.7 tons of 
carbon dioxide emissions. With additional funding, the Energy Star 
program could update its criteria, expand the program to other areas 
and add more product categories. The Alliance recommends a $2 million 
increase over the fiscal year 2006 appropriated level for total funding 
of $7.9 million.
    Building Technologies R&D.--Of all the DOE energy-efficiency 
programs, Building Technologies continues to yield perhaps the greatest 
energy savings. The 2001 National Research Council study found that 
just three small R&D programs--in electronic ballasts for fluorescent 
lamps, refrigerator compressors, and ``low-e'' glass for windows--have 
already achieved cost savings totaling $30 billion, at a total Federal 
cost of only about $12 million. Buildings R&D should be a priority for 
funding increases, especially in the areas of Windows and Insulation 
and Materials R&D.
    Energy Information Administration (EIA) Energy Consumption 
Surveys.--EIA's Energy Consumption Surveys provide unique and 
invaluable data to policy makers, industry, and researchers. The 
Alliance recommends an increase of $1.9 million, for total funding of 
$5.5 million, in order to reinstate the residential transportation 
survey, last conducted in 1994, and to conduct the Residential, 
Manufacturing, and Commercial Buildings Energy Consumption Surveys 
(RECS, MECS, and CBECS) every 3 years, as required by the Energy Policy 
Act of 1992, instead of the current 4-year schedule.
                                 ______
                                 
        Prepared Statement of Western Michigan University (WMU)

    R&D activities administered through DOE's Fossil Energy programs 
play a vital role to discover, develop and produce a significant 
portion of the Nation's domestic natural energy needs.
    Western Michigan University (WMU) provides invaluable research to 
develop new technologies for improved exploration and production of 
hydrocarbons in an environmentally responsible manner. WMU also 
disseminates this information through workshops to Michigan's small 
independent oil companies that cannot develop such technologies on 
their own.
    Most of the oil companies in Michigan consist of a few employees, 
often referred to as ``Mom and Pop'' independent producers. In the 
Midwest, there are thousands of such companies that produce many tens 
of millions of barrels of oil and equivalent natural gas a year.
    Ten years ago, in a consortium with private industry, with funding 
by DOE, WMU developed and proved a new drilling technology to recover 
oil from abandoned fields. Subsequent application of this technology 
has produced more than 20 million barrels of oil and more than 500 
billion cubic feet of natural gas in Michigan. We are now studying the 
origins and evolution of some of Michigan's major oil and gas 
reservoirs and using newly developed computer-based 3D models for 
predicting their distribution. This will create the ability to produce 
energy more efficiently, in larger quantities, and with less drilling. 
WMU is one of a limited number of universities nationwide capable of 
this type of research.
    WMU has presented its research results and techniques to several 
thousand participants at interactive workshops for industry and 
government. And WMU has an increasing enrollment of undergraduate and 
graduate students who are being trained to meet an urgent need for 
geoscientists.
    WMU's website, which receives more than 6,000 hits per month, 
connects producers, the research community and support services 
industries that produce hydrocarbons.
    This program would not be possible without DOE funding.
    WMU is nearing the final year in our current multi-year research 
program. To cut off funding now, as we are just coming to fruition with 
new results and technologies would be such a loss of taxpayers' money 
already invested.
    There are those who ask why tax dollars should support oil and gas 
research and programs such as ours at WMU. My response is that these 
are vital to the Nation's security and to the domestic economy. This 
research can improve the domestic supply of oil and gas, which in turn 
will drive down the price. When constituents of each member of Congress 
ask what the government is doing about the current high price of oil, 
one logical response is to say that they support efforts that will 
improve the domestic supply through R&D funds.
    Eighty-five percent of DOE's R&D programs are tailored to the 
exploration and development activities of the independent producer. 
These small companies drill 90 percent of the Nation's oil wells and 
they produce 85 percent of the Nation's natural gas. For these 
companies, undertaking costly research activities is not a viable 
option. They must gain education and access to technology from outside 
their doors, a key function provided by WMU.
    There is another benefit to government-supported R&D that is rarely 
recognized--training urgently needed geoscientists. The research spawns 
Master's and Ph.D. students who will take critical roles in an industry 
that suffers from a shrinking population of professionals, particularly 
American professionals. Where will the domestic industry be in the 
future if skilled students do not enter the oil and gas industry? All 
aspects of these professional jobs require increasingly complex skills 
and abilities. Who will be the explorers and developers of oil and gas 
for the next generation?
    I urge you to reinstate full funding for the DOE Oil and Gas 
research program at WMU. This is desperately needed for the American 
economy and its security. We are increasingly dependent on foreign oil 
and gas to run our economy. When will our dependency on imports be too 
great? Sixty-five percent? We are there now! Seventy-five percent? 
Eighty-five percent? I think that such high levels make us very 
vulnerable to supply interruptions, huge price spikes, and an unstable 
economy.
                                 ______
                                 
     Prepared Statement of the American Forest & Paper Association

    The Agenda 2020 Technology Alliance, a Special Project of the 
American Forest & Paper Association (AF&PA) welcomes this opportunity 
to provide the committee with its views on our industry's key public-
private partnerships within the Office of Energy Efficiency and 
Renewable Energy (EERE) and to urge increased funding to adequately 
address industry's challenges in fiscal year 2008. The Industrial 
Technologies Program (ITP) and the Office of Biomass Programs (OBP) 
provide vital funding for research, development, and demonstration 
(RD&D) of technologies that dramatically reduce the forest products 
industry's energy intensity and transforms our industry into producers 
of carbon-neutral biofuels--thus addressing strategic national needs 
associated with energy efficiency, energy security, diversified energy 
supply, and environmental performance. We recommend industry specific 
funding of $6 million for forest products industry in ITP. We support 
the President's request for $179 million for Biomass and Biorefinery 
Systems R&D in OBP and ask that the Committee work to ensure 
eligibility of forest biorefineries in these programs and keep the 
appropriations unencumbered to allow for full funding of competitive 
biomass systems and biorefinery RD&D grants. Furthermore, we recommend 
that the Committee restore OBP Platforms Research and Development 
funding of $10 million for competitive R&D for black liquor 
gasification, a key enabling technology of the forest biorefinery.
    The Agenda 2020 Technology Alliance is an industry-led partnership 
with government and academia that holds the promise of reinventing the 
forest products industry through innovation in processes, materials and 
markets. The collaborative, pre-competitive research, development, and 
deployment supported through Agenda 2020 provide the foundation for new 
technology-driven business models that will enable our industry to meet 
competitive challenges, while also contributing solutions to strategic 
national needs. The technology solutions developed through Agenda 2020 
are aligned to provide solutions to the competitive challenges faced by 
the U.S. forest products industry, which accounts for approximately 6 
percent of the total U.S. manufacturing output, employs more than a 
million people, and ranks among the top 10 manufacturing employers in 
42 States with an estimated payroll exceeding $50 billion.
    As is the case with many U.S. manufacturing industries, we face 
serious domestic and international challenges. Since early 1997, 136 
pulp and paper mills have closed in the United States, contributing to 
a loss of 84,000 jobs, or 39 percent of our workforce. An additional 
60,000 jobs have been lost in the wood products industry since 1997. 
New capacity growth is now taking place in other countries, where 
forestry, labor, and environmental practices may not be as responsible 
as those in the United States. Several drivers have heightened the need 
to develop new energy efficiency technologies: the recent volatility of 
energy markets, especially for natural gas; renewed national focus on 
climate change and environmental performance; and aging process 
infrastructure. Global competition, coupled with massive industry 
restructuring due to financial performance pressures from Wall Street, 
continue to hinder the ability of U.S. companies to make new 
investments. Each year without new investments, new technologies and 
new revenue streams, we lose ground to our overseas competitors.
    Currently, energy is the third largest manufacturing cost for the 
forest and paper industry at 18 percent for pulp and paper mills--up 
from 12 percent just 3 years ago. For some of our mills, the cost of 
energy is about to eclipse employee compensation.
    Since 1994, the forest products industry has been one of DOE's 
``Industries of the Future,'' partnering with ITP through the Agenda 
2020 Technology Alliance in RD&D that has yielded successful advances 
towards our national energy and environmental goals. Agenda 2020 stands 
as an example of successful industry-government collaboration to 
develop technologies that hold the promise of reinventing industry, 
while providing real solutions for strategic national energy needs. 
Every Federal dollar spent on ITP saves $7.06 in annual energy costs 
and 1.3 million in annual source BTUs (2004 estimates). As recently as 
2003, the ITP/Agenda 2020 portfolio included a total shared DOE and 
industry investment of almost $48 million, with nearly 55 percent 
coming from direct project cost shares by industry.
    Today, after several years of continuous and substantial cuts, the 
ITP/Agenda 2020 budget has been reduced by over 83 percent since fiscal 
year 2002. This undermines our progress in achieving crucial energy 
efficiencies at a time when energy and response to climate change are 
major factors in the survival of the U.S. forest products industry. 
Projects rescoped or cut in recent years due to budget shortfalls 
resulted in a lost energy savings potential of 5 trillion BTUs/yr. 
Recent reductions make us unable to pursue projects in key priority 
areas such as advanced water removal and high efficiency pulping, which 
represents a lost savings potential of 100-200 trillion BTUs/yr. In 
fiscal year 2008, a further funding reduction is proposed and emphasis 
shifted from industry specific funding. Unfortunately, the type of 
technologies that cross all industries are not those from which we can 
achieve the maximum savings for energy and environmental emissions. 
Furthermore, the proposed funding of $1.752 million, is barely 
sufficient to fund ongoing projects, let alone address the high 
priority R&D needs specific to the forest products industry that have 
been jointly identified by industry with the DOE.
    This comes at a crucial time when the forest products industry, 
like many energy-intensive industries, is facing unprecedented 
pressures due to the rising costs of energy and potential climate 
change mandates. Although we are nearly 60 percent self-sufficient 
(using biomass), it is imperative that we seek solutions as diverse as 
fuel switching, finding new energy sources, and options for reducing 
energy consumption. Thus we are in greater need than ever for the 
technology-based energy efficiency solutions that could be provided 
through our Agenda 2020 partnership with ITP. AF&PA's recommended ITP 
funding for forest products research ($6 million) would help our 
industry partially recover its capacity to develop and deploy vital 
energy efficiency technologies. Restoring Agenda 2020 funding to pre-
fiscal year 2005 levels will not only help the competitive position of 
American industry, but will also serve national strategic goals for 
reduced dependence on foreign oil.
    The Integrated Forest Products Biorefinery (IFPB) is a key Agenda 
2020 technology platform and a top technical and economic priority for 
our industry. The objective is to develop and deploy core technologies 
that can be integrated into existing processing infrastructure, which 
would be transformed into geographically distributed production centers 
of renewable ``green'' bioenergy and bioproducts. This can be done 
while co-producing existing product lines, creating higher skilled and 
better paying jobs, strengthening rural communities, and opening new 
domestic and international markets for U.S. forest products companies.
    The IFBP technology has the potential to integrate agricultural 
wastes, agricultural producers, forest landowners, agricultural 
landowners, forest product producers, and the petrochemical industry to 
produce clean renewable bio-fuels to support our local economies and 
the Nation. Widespread application of this technology would not only 
reduce environmental impact of burning fossil fuels, it would also 
increase the viability of agricultural, forest products, and other 
industries that use waste heat. It will create new high paying jobs, 
both direct and indirect, increasing tax revenue. From an energy 
perspective, the IFPB has the benefit of making the forest products 
industry even more energy self-sufficient, serving the DOE strategic 
goal of reduced energy intensity in industry by reducing fossil energy 
consumption. In addition, the IFPB would permit the industry to become 
a producer of renewable, carbon-positive bioenergy and biofuels, 
contributing to DOE strategic goals to dramatically reduce dependence 
on foreign oil and to create new domestic bioindustry.
    AF&PA supports the President's announced $179 million budget 
initiative in fiscal year 2007 for biorefinery research and 
demonstration.--This initiative provides much needed funding to advance 
core enabling IFPB technologies, as well as providing major capital 
cost-share for commercial scale biorefinery demonstration. The forest 
products industry is an ideal partner to develop and commercialize 
integrated biorefineries. We have much of the infrastructure and 
expertise--wood harvesting, transportation and storage, manufacturing 
and conversion infrastructure, waste handling and recovery--needed to 
achieve the goals of integrated biorefineries. By and large, they are 
located in rural communities where they can help realize important 
synergies between agricultural and forest-based feedstocks. Recent 
estimates from Princeton University show significant potential for net 
environmental benefits of IFPBs, inclusive of offsetting other fossil 
fuel consumption in the mill. The industry-wide potential is to reduce 
nearly 100 million tons of carbon emissions annually from IFPBs. The 
study also estimates the cumulative value of savings due to reduced 
CO2, SO2, and NOX emissions is $6 
million to $40 billion.
    However, private/public investments in RD&D are critical to bring 
IFPB technologies into full commercial use. Co-investment for RD&D can 
help mitigate the technical risks (especially integration with capital-
intensive, legacy infrastructure) of early adopters of emerging IFPB 
technologies. Risk mitigation is an important factor in achieving the 
benefits of IFPBs, especially for integrating biorefinery technologies 
with existing manufacturing infrastructure. Federal support through 
research funding and other investments, such as loan guarantees and tax 
credits, is critical.
    In order to achieve the promise of IFPB technologies for the 
industry and for the Nation, we need greater stability and availability 
of funds provided through the OBP budget. We urge the committee to 
preserve the proposed $179 million funding of Biomass and Biorefinery 
Systems R&D, so that there will be sufficient appropriations to fund 
biorefinery demonstration and commercialization projects. We also urge 
the committee to ensure that forest-based materials are eligible for 
this and future biorefinery research and demonstration funding. Forest-
based materials can sustainably produce enough biofuels to displace up 
to 10 percent of the country's petroleum production. They are a vital 
feedstock for achieving reduced dependence on foreign oil and 
facilitating bioindustries domestically and should be included in 
programs for biomass and biorefinery RD&D.
    A core enabling technology for part of the IFPB is black liquor 
gasification (BLG), which converts the by-product of the chemical 
pulping process into a synthetic gas. The synthetic gas can 
subsequently be burned to directly produce clean, efficient energy, or 
converted to other fuels such as hydrogen, renewable transportation 
fuels, and/or other high value chemicals. If fully developed and 
commercialized, a biorefinery based on BLG can produce up to 10 billion 
gallons of other renewable transportation fuels, and as much as 20,000 
MW of biomass power.
    In fiscal year 2006, DOE eliminated funding for BLG and related 
research, despite recent technical progress to bring the technology to 
pre-commercial demonstration. BLG is a core enabling technology for the 
IFPB, and is identified as a priority technology area for biorefineries 
in technology roadmaps created by industry, as well as in research 
plans developed by OBP to accelerate biorefineries and development of 
national bioindustry. Critical research areas identified by OBP 
include: integrated biorefinery support for thermochemical 
biorefineries, products core R&D in chemicals and fuels from syngas; 
thermochemical platform core R&D in BLG and syngas cleanup. AF&PA is 
recommending that $10 million be restored in the OBP budget for 
competitive research in these critical areas and to complete BLG core 
research and projects that were eliminated in recent cuts. This funding 
will provide the groundwork needed for next vital steps leading to 
large-scale demonstration of biofuels and biochemicals production in 
association with the industry's dominant Kraft pulping process.
    We appreciate the committee's interest in ensuring sustained and 
adequate funding for RD&D partnerships and look forward to working with 
you to advance industry and national interests.
                                 ______
                                 
Prepared Statement of the Center for Advanced Separation Technologies, 
          Virginia Polytechnic Institute and State University

    Chairman Dorgan and Ranking Member Domenici of the subcommittee, I 
represent the Center for Advanced Separation Technologies (CAST), which 
is a consortium of seven leading U.S. mining schools. I appreciate the 
opportunity to submit this testimony requesting your committee to add 
$3 million to the 2008 Fossil Energy Research and Development budget, 
U.S. Department of Energy, for Advanced Separations research. Research 
in Advanced Separations Technology Development is authorized by the 
Energy Policy Act of 2005, title IX, subtitle F, section 962. I am 
joined in this statement by my colleagues from the consortium: Richard 
A. Bajura: West Virginia University; Peter H. Knudsen: Montana Tech of 
the University of Montana; Richard J. Sweigard: University of Kentucky; 
Jan D. Miller: University of Utah; Ibrahim H. Gundiler: New Mexico 
Tech; and Maurice C. Fuerstenau: University of Nevada-Reno.
    funding request for center for advanced separation technologies
    The Center for Advanced Separation Technologies (CAST) is a 
consortium of seven universities with expertise in separations science 
as applied to energy research. It was established in 2001 to develop 
advanced technologies that can be used to efficiently produce cleaner 
fuels in an environmentally acceptable manner and to study the basic 
sciences and engineering involved. The new technologies developed and 
the highly skilled personnel produced as a result of its research 
activities will help the United States develop its domestic energy 
resources and achieve energy independence.
    The United States faces an energy crisis created by an imbalance 
between domestic supply and demand. While the United States makes up 
only 4.6 percent of the world's population, it consumes 24 percent of 
the world's energy resources, 25 percent of oil, and 44 percent of 
motor gasoline, while its domestic energy production lags behind. As a 
result, the United States imported 30 percent of its energy needs in 
2005, which is expected to grow in the future. On the other hand, the 
United States has large amounts of untapped energy resources within its 
borders, which include 271 billion tons of recoverable coal, 2.6 
trillion barrels of oil in the form of oil shale, and 20 billion 
barrels of oil in oil sands. In addition, the United States has 200,000 
trillion cubic feet (Tcf) of methane (CH4) deposited in the form of 
hydrates in ocean floors and permafrost. The amount of energy deposited 
as methane hydrates alone far exceeds the amounts of all fossil energy 
resources combined. There is a dire need to exploit these untapped 
domestic energy resources by developing advanced separation 
technologies.
Organization
    The Center for Advanced Separation Technologies (CAST) was formed 
initially between Virginia Tech and West Virginia University with the 
objective of developing technologies that can help the U.S. coal 
industry produce cleaner solid fuels with maximum carbon recovery in 
environmentally acceptable ways. The scope of work was limited to 
studies on solid-solid and solid-liquid separation methods that are 
used in the coal industry. In 2002, five other universities listed 
above joined the consortium to develop crosscutting technologies that 
can also be used in a broader spectrum of the U.S. resources 
industries. Therefore, the scope of CAST research was expanded to 
include studies of chemical/biological separations and environmental 
control.
    By working together as a consortium, the center can take advantage 
of the diverse expertise available in its member universities and 
address the interests of different geographical regions of the country. 
Working together as a consortium is consistent with the recommendations 
of a recent National Research Council (NRC) report. It stated that 
``consortia are a preferred way of leveraging expertise and technical 
inputs to the mining sector,'' and recommended that DOE should support 
``academia, which helps to train technical people for the industry.''
Progress And Next Step
    At present, a total of 59 research projects are being carried out 
at the 7 CAST member universities. Of these, 20 projects are in solid-
solid separation, 5 in solid-liquid separation, 15 in chemical/
biological separation, 9 in modeling and control, and 10 in 
environmental control. These projects were selected by industry panels 
in accordance with the priorities set forth in the CAST Technology 
Roadmap, which was developed by an industry panel in 2002. Research 
results are presented at workshops to provide a forum to exchange 
ideas, create synergy, and interact with industry. The next workshop 
will be held during July 24-26, 2007, in Blacksburg, Virginia.
    Despite the high price of coal, many coal companies are losing 
significant amounts of their mined coal due to the lack of appropriate 
solid-solid and solid-liquid separation processes. In general, 
efficiencies of removing ash, sulfur and mercury from coal using these 
processes deteriorate sharply with decreasing particle size. As a 
result, many companies discard coal fines to impoundments. According to 
a National Research Council (NRC) report, the U.S. coal industry 
discards approximately 70 to 90 million tons of fine coal annually, 
which represents a significant loss of valuable national energy 
resource and at the same time creates serious environmental concerns. 
The NRC report was produced as a result of a congressionally directed 
investigation of a major impoundment failure that occurred on October 
11, 2000, in Martin County, Kentucky. The report recommended a study to 
identify technologies that can eliminate (or reduce) the need for 
slurry impoundments.
    There are more than 760 impoundments in the eastern United States, 
many of which are rated ``high risk.'' Companies have been recovering 
some of the fine coal from the waste impoundments by taking advantage 
of the section 29 Synfuels Tax Credit. However, this tax credit is due 
to expire in 2007; therefore, there is an impending need to develop 
advanced fine coal cleaning and dewatering technologies that can be 
used not only to recover the fine coal from impoundments without the 
benefit of a tax credit but also to eliminate the waste from the source 
so that there is no need to create future impoundments.
    For the reasons described above, CAST has been focusing on 
developing advanced fine coal cleaning and dewatering technologies. In 
one project, pilot-scale tests were conducted on the coal slurry from 
an impoundment (Pinnacle) in Pineville, West Virginia. Based on the 
successful test results obtained by CAST on the coal samples taken from 
the impoundment, Beard Technologies constructed a recovery plant in 
late 2006, and is currently in the process of shakedown testing. This 
is the first plant designed to recover practically all of the coal in a 
waste impoundment without the benefit of tax credit. If successful, the 
company plans to build additional plants using the advanced separation 
technologies developed by CAST. It is estimated that there are more 
than 2.5 billion tons of coal discarded in numerous impoundments in the 
United States.
    In another fine coal dewatering project, CAST is developing a 
hyperbaric centrifuge that can remove water from fine coal using a 
combination of air pressure and centrifugal force. Recently, a semi-
continuous bench-scale test unit has been designed and constructed. In 
a series of preliminary tests conducted on a coal sample finer than 
0.15 mm in size, moisture was reduced to less than 10 percent by 
weight, which is substantially lower than those obtainable using 
conventional methods. Decanter Machine Company in Johnson City, 
Tennessee, has acquired a license from CAST to market the new 
technology, and is planning to construct a large-scale prototype unit 
for onsite testing. There are several other dewatering research 
projects carried out at CAST, all of which are promising. These include 
a flocculant injection system, which is already in use in many coal 
cleaning plants, and a deep-cone thickener which is designed to 
increase the consistency of refuse materials (mainly clay) so that they 
can be disposed of without using impoundments.
    Traditionally, the western United States subbituminous coals are 
not cleaned before burning for power generation. However, depletion of 
higher quality reserves may soon force companies to remove impurities 
prior to shipping to eastern markets. Unfortunately, the water-based 
coal cleaning methods employed for cleaning eastern coal cannot be used 
for the western coal due to the lack of water. To address this problem, 
CAST researchers have been developing ways to clean western coal using 
a dry solid-solid separation method. A pilot-scale test conducted 
onsite showed that about one-quarter of the ash and one-third of the 
sulfur can be removed with high recoveries. Further, the dry cleaning 
process also removed more than 50 percent of the mercury originally 
present in the coal. It is anticipated that the technology will be 
commercialized in 2007.
    CAST has also developed metallic filters that can remove mercury 
from flue gas. The process has been tested successfully at an operating 
power plant in Colstrip, Montana, with over 90 percent removal 
efficiencies. The spent filter can be cleaned of the captured mercury 
and reused, while the mercury stripped off the filter can be stored 
permanently in stable forms.
    Many of the separation technologies developed by CAST can also be 
used to upgrade fertilizer minerals such as potash and phosphate. In 
2006, Mosaic Potash Carlsbad, Inc. implemented a new method of 
minimizing the harmful effect of clay in processing potash ores and 
increased recovery by 6 percent. An improvement such as this has 
allowed mining companies in New Mexico, which produce more than 70 
percent of potash in the United States, retain 600 high-paying jobs. At 
present, CAST is developing new methods of processing difficult potash 
ores. These new methods will make it possible to mine 50 million tons 
of langbeinite ores, which will greatly increase the life of the U.S. 
potash industry.
    The United States is the second largest copper producer in the 
world; however, much of the ores are of too low grade to be 
economically recovered using the conventional solid-solid separation 
methods such as flotation. Therefore, CAST has been developing an 
alternate method of extracting copper from low-grade ores using a 
chloride-based leaching, followed by direct electrowinning of dissolved 
copper. This could replace the traditional methods involving fine 
grinding, flotation, and smelting, which are energy intensive and, 
therefore, are not amenable for processing low-grade ores in western 
United States. The energy savings that can be realized by using this 
new method can be as high as 25 million Btu per metric ton of copper.
    In addition to the more practical projects described above, CAST 
has also conducted fundamental research. As an example, a mathematical 
model has been developed to describe froth flotation--the most widely 
used solid-solid separation process in both the coal and minerals 
industries. The model is based on first principles so that it has 
predictive and diagnostic capabilities. In another project, 
computational fluid dynamic (CFD) simulation techniques have been 
employed to design optimal flotation machines. This project is cost-
shared by Dorr-Oliver EIMCO, Salt Lake City, Utah, the world's largest 
coal and minerals processing equipment manufacturer. In still another 
project, the forces acting between two microscopic surfaces immersed in 
water have been measured using an atomic force microscope (AFM) and a 
surface force apparatus (SFA). The results showed that strong 
attractive forces are present between hydrophobic surfaces, the origin 
of which is not yet known. The new surface force, which is referred to 
as ``hydrophobic force'' plays an important role in processing energy 
minerals, such as coal, oil sands, oil shale, petroleum, and methane 
hydrates, that are naturally hydrophobic.
    Many of the separation processes being developed at CAST can be 
used for water clean up. For example, the flotation technique which was 
developed originally for separating one type of mineral from another is 
used to remove suspended solids from waste water streams. Furthermore, 
the basic scientific knowledge gained from the solid-liquid and 
biological separations research at CAST can be used to remove toxic 
elements present in waste water, mine effluents, and ground water. 
Water treatment research is of critical importance worldwide, 
particularly to the western United States which has been under drought 
conditions since 1999. A recent study showed that by 2050 untreated 
wastewater could reduce the supply of renewable water supply by one 
third.
                     funding request and rationale
    The United States is by far the largest mining country in the 
western world. In 2005, the industry produced $73.8 billion worth of 
raw materials, including $22.3 billion for coal, and $51.5 billion for 
minerals. Australia is a smaller mining country, but has five centers 
of excellence in advanced separations as applied to coal and minerals 
processing. In 2005, Australia established the Mineral Science Research 
Institute with a funding of $22.6 million for 5 years. In the United 
States, CAST is the only consortium serving the U.S. energy and 
minerals resources industry.
    CAST is developing a broad range of advanced separation 
technologies. Although it is a relatively new center, many of our 
research projects have yielded technologies that have already been 
deployed to industry. Many other promising projects are on-going and 
require financial support. Continued funding will allow CAST to develop 
advanced technologies that can be used to exploit the abundant national 
energy resources in a manner that is acceptable to the environment. For 
fiscal year 2008, CAST is requesting $3 million for its research 
activities.
                                 ______
                                 
    Prepared Statement of the Petroleum Technology Transfer Council

    Mr. Chairman and members of the subcommittee, on behalf of the 
Petroleum Technology Transfer Council (PTTC) and its partners 
throughout its domestic oil and natural gas industry network, I would 
like to express our concern if Federal funding for technology research 
and development is terminated.
    The administration has proposed to completely stop Department of 
Energy natural gas and oil R&D funding through the appropriations 
process and to rescind R&D funding previously authorized in the 2005 
Energy Policy Act (EPACT).
    PTTC strongly opposes this policy and believes it will be harmful 
over the near- and long-term. Among those that will be negatively 
impacted are:
  --The academic community where tomorrow's scientific professionals 
        gain valuable seasoning through participation in DOE-supported 
        projects in their graduate years;
  --The young and newly trained scientific professional which is 
        already entering the workforce at near low historic levels; and
  --The domestic petroleum supply, which is developed primarily by 
        independent producers that rely heavily on evolving 
        technologies to exploit mature and problematical petroleum 
        resources.
    The R&D Consortium created and funded through EPACT, which will be 
implemented by the Research Partnership to Secure Energy for America 
(RPSEA), enables focused research in areas critical to the U.S.'s 
energy future: deepwater offshore and unconventional resources. These 
needs should be addressed.
    Still, there are significant R&D gaps that the Consortium will not 
cover that must be supported through R&D funding through the 
appropriations process:
  --Enhanced oil recovery, particularly the interplay of CO2 
        flooding with carbon capture;
  --Field demonstration and technology transfer of newly developed 
        technologies in topic areas outside those addressed by EPACT; 
        and
  --Technology transfer for proven yet under-applied technologies.
    Rightly so, there is recognition that alternative energy sources 
are important to the U.S.'s energy future. It will take time for 
alternative energy R&D spending to lead to sound and significant 
sources of alternative fuels. The scientific professionals being 
seasoned in today's natural gas and oil R&D programs will more than 
likely be those participating in tomorrow's alternative energy 
research. The academic pipeline that provides those professionals 
cannot be stopped up by intermittent starts and stops of R&D funding. 
Our country deserves better.
  why the federal investment in research and development is important
    PTTC primarily serves the upstream domestic energy industry by 
facilitating the transfer of applied technology between technology 
developers and independent producers who are the driving forces in the 
domestic natural gas and oil exploration and production (E&P) industry. 
Independents drill 90 percent of the U.S.'s natural gas and oil wells, 
produce 82 percent of the natural gas and 68 percent of oil produced 
domestically. According to the Independent Petroleum Association of 
America (IPAA), independent producers have been recently investing 150 
percent of their domestic cash flow back into domestic oil and natural 
gas development. Much of that investment is for proven technology that 
is essential for developing the more difficult to recover 
unconventional resources that are a primary target of today's 
exploration effort.
    It's a reality that the ``easy'' natural gas and oil in the U.S. 
has already been developed. Those resources that remain--deep water, 
unconventional gas, enhanced oil recovery, even oil shale--are 
increasingly complex, requiring both more manpower and new 
technologies, not to mention a tremendous capital investment. Where 
will those new technologies come from?
    Major oil companies have scaled their R&D back, and what research 
they do fund is focused on larger international opportunities. The 
technology provider/service sector R&D dollars logically follow this 
high volume, high profit mark. Technologies that are developed have 
some application in mature U.S. producing basins, but they often need 
adaptation and resizing/simplification. And when they are developed, it 
is more costly for the service sector to connect with ``thousands'' of 
dispersed independents.
    Independents are the dominant players in the domestic industry and 
their human resources have reached critical low levels. The few who do 
have the capital and human resources--not already dedicated to drilling 
and production activities--typically do not have the technical 
experience or knowledge to effectively invest R&D dollars.
    Collaborative research, partially supported with Federal funding to 
keep it focused and broadly applicable, makes good economic sense. 
History is well documented to show that federally funded R&D has led to 
significant increases in domestic energy supplies. This research also 
seasons scientific professionals emerging from the academic pipeline, 
improving their productivity to successfully exploit natural gas and 
oil reserves and making America more competitive in global energy 
markets. This higher productivity leads to more natural gas and oil 
recovery, faster.
    In conclusion the Congress has a responsibility to the United 
States to take logical actions towards a secure energy future. One of 
those steps is continuing support for natural gas and oil R&D--to both, 
recover more domestic oil and natural gas and to feed the pipeline for 
future scientific professionals.
                                 ______
                                 
  Prepared Statement of the Interstate Oil and Gas Compact Commission

    Chairman Dorgan, Ranking Member Domenici and members of the 
subcommittee, thank you for the opportunity to submit testimony on the 
appropriation to the U.S. Department of Energy (DOE) and specifically 
the Office of Fossil Energy. My testimony represents the views of an 
organization of governors of 30 member States of the Interstate Oil and 
Gas Compact Commission (IOGCC). These States account for virtually all 
of the onshore domestic production of crude oil and natural gas.
    The States strongly and unequivocally support an appropriation to 
the Fossil Energy Research and Development ``Gas--Natural Gas 
Technologies'' and ``Petroleum--Oil Technology'' programs in an amount 
no less than that appropriated in fiscal year 2005 ($78.76 million), 
which was the budget year before the President's budget called for the 
complete elimination of funding for these vital functions. States 
strongly oppose the administration's fiscal year 2008 budget request 
that would terminate these programs, which would also effectively 
eliminate the DOE's Office of Oil and Natural Gas within the Office of 
Fossil Energy. This would be a colossal mistake for a variety of 
reasons, set out more fully below. Taxpayers are very supportive of 
Federal investments in energy security, and there is no better 
investment than in Research and Development (R&D).
    In spite of the fact that the country operates under a constant 
threat of another ``energy crisis,'' government is proposing to do less 
to ensure the Nation's resources are fully produced. The U.S. domestic 
oil industry today is the Nation's largest single supplier of crude 
oil, providing about 40 percent of the national demand for oil. The 
rest is imported--and the percentage of imports grows every year--
making us more and more vulnerable to international crises and foreign 
economic manipulation. Our dependence on others for our energy security 
has never been greater. However, domestic natural gas suppliers provide 
about 85 percent of all of the natural gas demand in the Nation, with 
most imports coming from Canada. The United States even exports natural 
gas and has an abundant supply.
    One thing we can count on, however, is that domestic supplies of 
crude oil and natural gas are our best hedge against this vulnerability 
and increasing import dependency. In addition to energy security, there 
are a myriad of other reasons why domestic production is preferable to 
imports:
  --Our domestic resources are produced under the world's most 
        effective environmental protections, which have been 
        established and are enforced primarily by the States.
  --Domestic resources create high-quality jobs here at home and 
        provide the energy that powers our standard of living. For 
        example, few realize that stripper oil wells (wells producing 
        less than 10 barrels per day) account for about one-quarter of 
        the lower 48 States' onshore domestic oil production and 
        stripper gas wells (wells producing 60 Mcf per day or less) 
        about 10 percent of onshore domestic gas production. This is a 
        critical natural resource and it should not be abandoned in 
        favor of imported energy.
  --Despite perceptions to the contrary, large quantities of oil and 
        natural gas remain onshore in the United States. These 
        resources represent the most stable and secure energy 
        available. These resources may exist in fields that have 
        already been discovered and await a new technology that results 
        in cost-effective recovery. Or they may lie in reservoirs yet 
        undiscovered due only to a lack of technology appropriate for 
        deeper horizons or greater geologic complexity. The bottom line 
        is vast reserves remain untapped. While recovery rates have 
        increased dramatically in the past 50 years and exciting new 
        tools have been developed for exploration, still more can be 
        done to reach the full production potential for reservoirs.
    The U.S. Department of Energy's Office of Oil and Natural Gas, 
which is funded by the programs set forth above, is the only place in 
the U.S. Government that is responsible exclusively for oil and natural 
gas policy. It is also the only place in the U.S. Government that fully 
understands and is thus able to represent within the administration the 
critical importance of domestic oil and natural gas to our country, our 
economy, and our national security. This resident expertise is a 
national asset--one that is especially important as other agencies 
embark on rulemaking and take other actions which impact our domestic 
oil and natural gas industry. Terminating this office and its programs, 
including its critical Research and Development programs, would be a 
tragic mistake. For these reasons the IOGCC and its member States 
strongly support the continued existence and viability of DOE's Fossil 
Energy Office of Oil and Natural Gas and an appropriation in fiscal 
year 2008 at least equal to the fiscal year 2005 appropriation.
    Turning to critical area of R&D specifically, many experts believe 
R&D is the most important factor in maximizing the availability and 
utilization of petroleum resources, especially domestic reserves.
    A recent report compiled by the IOGCC confirms the declining trend 
in R&D expenditures while the country is experiencing a corresponding 
increase in reliance on imports. Major oil companies once poured 
millions into research and development. Today, however, many large 
companies have shirted their focus overseas and offshore. Eighty five 
percent of the wells in the United States are drilled by independent 
oil and natural gas producers (producing roughly 40 percent of the 
domestic oil and 65 percent of the domestic natural gas). Such smaller 
independents lack both the resources and infrastructure for significant 
R&D and it is here where government--State and Federal--can fill an 
obvious void.
    The decline of Federal and private support for oil and gas research 
is well documented. The reasoning for cutting government support seems 
steeped in politics and a failure to understand the importance of 
Federal R&D to our domestic oil and gas industry and our energy 
security. However, this is a new era of uncertainty in our energy 
security that requires a fresh look at spending priorities.
    An IOGCC publication entitled ``Who Will Fund America's Energy 
Future?'' states that ``A strong domestic energy policy demands a 
strong R&D component. As the largest holder of domestic oil and gas 
resources, the Nation benefits from their production. Domestic 
production creates wealth for other royalty owners, contributes 
significantly to State, Federal and local economies and tax bases, 
offsets imports on a barrel-per-barrel basis, and cuts into trade 
deficits that are running at record levels.''
    If the United States is to maintain its ability to produce its 
domestic supplies of oil and natural gas, Federal expenditures on R&D 
must fill the leadership role left behind by private industry. Federal 
funding on oil and natural gas must increase if the United States is to 
maintain its ability to produce the domestic oil and natural gas 
resources our country so desperately needs. But instead the 
administration's budget for fiscal year 2008 eliminates oil and natural 
gas research.
    In fact, the proposed budget calls for cutting the petroleum 
technology R&D program at the very moment that our country could 
benefit the most from technology breakthroughs that can be applied to 
our own resources.
    Informed taxpayers support funding R&D to protect the environment 
and produce more energy--precisely the mission of DOE's oil and gas 
research program. Much promising work lies ahead including developing 
new methods of drilling that reduce impacts to the environment; 
inventing new materials that allow better, faster drilling; creating 
new chemicals and biological tools that increase production; 
identifying better uses of renewables in the production of fossil 
fuels; minimizing waste; and creating high quality jobs.
    There have been many success stories from the DOE oil and gas 
research program. One recent, striking example of how DOE makes a real 
contribution to advances in environmental protection, energy production 
and innovation comes from a DOE-IOGCC project in California. Under 
DOE's Preferred Upstream Management Practices (PUMP) program, the 
project is proving that unmarketable gas can be used on site to provide 
power to oil wells previously idle. At the same time, the project is 
meeting the strict air quality standards in the Los Angeles area. DOE 
funding for this project was matched 100 percent by other partners, 
which enabled the government to double its R&D investment. Every 
government program investment should be as effective.
    This is but one example of DOE helping provide leadership in 
demonstrating a technology that may have much broader implications for 
operators in 30 other oil and gas producing States who now won't have 
to reinvent the well in order to satisfy environmental restrictions and 
the urgent need for domestic energy.
    Through careful regulation, IOGCC member States have helped 
maximize production and minimize wasteful practices that can lead to 
the premature abandonment of reservoirs. States have also developed 
innovative approaches to deal with temporarily idled wells, created 
incentives that maximize production and supported R&D that improves 
recovery rates and lowers finding costs.
    Going forward, the IOGCC believes that a balanced and effective 
energy policy must encompass a number of fundamental principles, with 
R&D serving as a centerpiece in each. Other guiding principles include 
conservation of resources both in the producing and consuming sectors, 
encouraging domestic production to create economic growth and 
stability, increasing access to public lands for responsible 
development and prolonging production from wells at economic risk.
    We strongly encourage the subcommittee's support of funding oil and 
gas research and development as a positive step toward our national 
security today and our energy security in the future.
                                 ______
                                 
               Prepared Statement of Strand Energy, L.C.

    Dear Sirs or Madams: I am the project manager for a small DOE award 
(DE-FG26-00BC15254) granted to Strand Energy, L.C. (Strand) under the 
Technology Development with Independents program which is administered 
by the National Energy Technology Laboratory (NPTL). This $75,000 grant 
is for the optimization and implementation of an improved oil recovery 
project in a small oil field operated by Strand and located in 
southwest Arkansas, the St Mary Barker Sand Unit (SMWBSU).
    I am writing you to present testimony concerning the benefits of 
this award in fostering the development of technical skills for Strand 
Energy that are allowing us to add value to this domestic energy asset 
through local and regional job development and increased reserves that 
are benefiting the citizens of Arkansas through increased tax revenues 
and royalties. Specifically, the award has allowed Strand engineering 
and geological staff to develop a skill set in the science of reservoir 
modeling; computer characterization and simulation of reservoir 
processes. This is guiding Strand in our efforts to reduce development 
risk while increasing oil reserves for this property.
    Although less than $5,000 of the $75,000 award has been used to 
date it is expected the remainder of the award will be invested during 
2007 and early 2008 in new technologies for this active small domestic 
independent exploration, exploitation and production company operating 
in the southwestern U.S. and specifically in adding further value to 
the SMWBSU. Strand Energy and our Partners have invested to date in 
access of $600,000 in equipment and well workovers in the SMWBSU 
property to implement the improved oil recovery project.
    The DOE-NPTL grant program requires that technologies and practices 
developed as a result of the project award be published publicly to the 
domestic oil and gas independents community. This will further benefit 
development of our domestic energy resources through improved oil 
recovery projects implemented by other active operators as well as by 
Strand as we acquire additional mature oil properties for redevelopment 
through secondary and tertiary recovery processes and practices 
experienced successfully at the SMWBSU field.
    I hope, as well as do the professors and graduate students I have 
worked with on this project, that the DOE will be allowed to continue 
the administration and development of additional programs like the 
NPTL's Technology Development with Independents in the future.
                                 ______
                                 
      Prepared Statement of the Coal Utilization Research Council

    CURC submits this testimony in support of an increase of $288 
million in the fiscal year 2008 Department of Energy Fossil Energy 
budget request, as follows: $88 million for the Coal R&D program (for a 
total of $333.5 million); and $200 million for the CCPI program (for a 
total of $273 million). CURC supports the administration's request to 
fund FutureGen at $108 million. Details supporting these 
recommendations are discussed below.

                              INTRODUCTION

    Coal is our country's most abundant, low cost source of fossil 
energy providing more than one-half of the electricity generated 
domestically and capable of supplying transportation fuels, chemical 
feedstocks, and pipeline quality synthetic natural gas. The challenge 
has been to sustain cost effective ways to use this abundant domestic 
energy resource in a manner that continues to provide low cost power 
and products for the American consumer while meeting environmental 
goals and national energy security needs. In large measure, technology 
is the means to these ends.
    More than three decades of experience has proven that any barriers 
to the use of coal can be overcome through the collaborative efforts of 
industry and government in jointly pursuing technology solutions. Now, 
global warming and concerns that the use of fossil fuels is an 
important factor in causing changes to the climate are a central focus 
of technology development. Equally important is the need for reliable, 
safe, and cost effective energy (and electricity) for the American 
consumer. These dual needs should be the focus of the Department of 
Energy's clean coal program.
    In light of the growing concerns over climate change and the need 
for reliable, domestically secure energy resources, it is vitally 
important that the DOE's technology research, development, 
demonstration and deployment programs, undertaken in partnership with 
the private sector, be robust and occupy a key spot on the national 
agenda. Unfortunately, even while there is acknowledgement over the 
importance of technology, there is not the corresponding commitment in 
dollars and focus. The DOE fiscal year 2008 budget request must be 
focused specifically upon the dual needs of energy security and 
achieving our Nation's environmental goals, and that budget must be 
dramatically increased if we are to succeed in developing technologies 
to address these needs.

                   THE CLEAN COAL TECHNOLOGY ROADMAP

    The CURC-EPRI Roadmap defines the steps necessary to achieve near 
zero emissions from coal use, including the cost effective capture and 
long-term storage of CO2. The Roadmap includes a technology 
development program for carbon management, defined as the capture and 
storage of carbon dioxide. The Roadmap targeted two approaches to 
carbon management: (1) higher efficiency; and (2) capture and storage 
of CO2 in geologic reservoirs. The goal of the Roadmap is to 
have, by 2025, new combustion and gasification based systems that can 
reduce emissions of traditional pollutants an order of magnitude beyond 
the performance of current technologies, capture and store 90 percent 
or more of the carbon in the coal, achieve improved efficiency over 
today's systems, and do all of these things while maintaining 
competitive low cost power generation. Our analysis suggests that the 
combined Federal and industry investment necessary to achieve the goals 
of the Roadmap is approximately $11 billion between now and 2025.
    When the Roadmap costs were first estimated, the cost of steel and 
other key power plant commodities had been relatively stable. In the 
last 2 years, these prices alone have risen by more than 50 percent and 
there is every likelihood that such prices will not lower. This means 
that the estimate of the Roadmap's projected cost to develop and 
demonstrate these improved technologies will likely increase 
dramatically as well. That analysis is underway, but was not completed 
in time for this written statement. At a minimum, demonstration 
programs will be most clearly impacted by these increased costs. 
Secondly, while much of technology development simply requires time to 
initiate and complete, it is also true that focusing efforts upon 
carbon capture and storage (CCS) technologies and augmenting funding in 
related areas will best insure the availability of such technologies in 
a timely fashion. Adequate funding for CCS technology development and 
demonstration is critical to addressing climate change; reduced funding 
levels that stretch out the time required to complete RD&D is not an 
option.
    The ``good news'' finding from the Roadmap is that there is a clear 
pathway to reach our technology performance goals for coal, and the 
ultimate technology products will be highly competitive if we conduct 
the needed RD&D. And industry stands ready to contribute its part, in 
money and intellectual resources, to the program of collaborative 
research. The ``bad news'' is that government funding, to date, has not 
been adequate and moreover, the fiscal year 2008 budget request is not 
sufficient. In sum, CURC believes that current funding for R&D is 
substantially inadequate, and funding for demonstrations is totally 
inadequate.
    Recognizing the fact that we are operating within a severely 
constrained budget, and Congress is intending to develop legislation to 
address global warming, CURC believes that funds provided for the 
entire DOE Clean Coal Program should focus primarily on those 
technology development programs that will enable both short- and long-
term CCS technology development and an extended near term program for 
mercury control technology. Activities that do not support these 
activities should be considered lower priority and only funded if 
additional funding is made available for those activities.

                            RECOMMENDATIONS

    Using the roadmap as a tool to identify our Nation's coal research, 
development and development (RD&D) needs, CURC has examined the 
President's fiscal year 2008 budget request for coal and submits the 
following recommendations.
    Clean Coal Power Initiative (CCPI).--The funding proposed for the 
CCPI, $73 million in fiscal year 2008, is wholly inadequate to meet the 
needs that this program was created to address. This is DOE's only 
program that can support the demonstration of CO2 capture 
technologies that might be retrofitted to the existing fleet of coal 
fired power generation. Equally important, funding for this program 
will support demonstrations of CO2 capture and storage 
technologies integrated with advanced combustion and IGCC based 
systems. The CURC-EPRI Roadmap recommends approximately $5.6 billion in 
funding for these types of demonstrations through 2015. The President's 
request is clearly not enough to fund the scale and magnitude of the 
projects needed. CURC recommends that funding for CCPI in fiscal year 
2008 be increased by an additional $200 million. Combined with other 
resources currently available for the program, this should be 
sufficient to allow a 3rd CCPI solicitation for project proposals to be 
issued in calendar year 2007, with anticipated awards made in 2008. 
CURC also recommends that the next CCPI solicitation primarily focus on 
large scale, fully-integrated power generation and carbon capture and 
storage demonstrations.
    FutureGen.--The Roadmap recognizes the benefits to technology 
development that the FutureGen project can provide and CURC supports 
this important R&D program that can serve as a test bed for validating 
technologies developed out of the DOE's R&D program. To succeed as 
originally envisioned, basic R&D activities must continue to provide 
the technology components needed in FutureGen. The administration seeks 
to use previously appropriated funds to support FutureGen in fiscal 
year 2008, which CURC supports. The administration also seeks to 
rescind $149 million in prior year appropriations. CURC recommends that 
this $149 million be deferred for future use. The FutureGen Industrial 
Alliance has stated previously that FutureGen, CCPI and the coal R&D 
programs each must be adequately funded because all of these programs 
are necessary to support commercial deployment of advanced clean coal 
technologies. CURC also endorses this position.
    Coal R&D Program.--The coal R&D program should be focused on 
technology R&D designed to address efficiency improvements to reduce 
CO2 emissions and on alternative CO2 capture 
technologies that might provide long term technology options, one 
result of which would be to drive down the costs of carbon management. 
CURC has concluded that the basic R&D needs identified in the CURC-EPRI 
Roadmap cannot be met with the fiscal year 2008 budget request for the 
coal R&D programs. CURC recommends that funding in fiscal year 2008 be 
increased by $88 million, without funding for earmarks, and be directed 
to the coal R&D program as follows:
  --Innovations for Existing Plants (IEP).--Much progress has been made 
        in developing and deploying technologies to reduce emissions 
        from existing coal-fired power plants. However, there is a need 
        to focus additional attention on mercury emissions control. 
        Expert opinion concluded initially that controlling and 
        capturing mercury emitted from combusting bituminous coals 
        would be the least problematic, while the lower rank (western) 
        coals would be most challenging. With this focus, control 
        problems related to western coals have been solved, but 
        unexpected issues arose with bituminous coals and problems 
        remain in that area. It is imperative that funding for this 
        program be restored to $25 million in order to continue long-
        term (more than 30 day) mercury control field tests so that 
        industry can be equipped with the technologies necessary to 
        comply with the USEPA Clean Air Mercury Rule.
  --Carbon Sequestration.--CURC recommends an increase of $30 million 
        to support the front end of a multi-year carbon sequestration 
        RD&D program. CURC recommends that DOE expand the focus of the 
        program that is supporting novel approaches to capturing 
        CO2 from the existing fleet of coal plants as well 
        as pre- and post-combustion and oxy-coal combustion. CURC also 
        recommends that sufficient funds be made available to initiate 
        or complete the Phase II CO2 injection pilot-scale 
        tests in reservoirs other than oil/gas reservoirs, unless tests 
        in oil and gas reservoirs would add significant knowledge to 
        the monitoring, measurement and verification of injecting 
        CO2 into other reservoirs. It is very important that 
        these recommended additional funds support those projects that 
        advance the science of sequestration in reservoirs other than 
        oil/gas reservoirs, which is a commercial technology in use 
        today. Additionally, the DOE budget justification indicates 3 
        or 4 large scale CO2 injection demonstrations will 
        be initiated to validate carbon storage techniques through 
        Phase III of the regional partnerships. CURC supports the DOE 
        shift to Phase III, but recommends that DOE conduct numerous 
        large scale demonstrations in a variety of permanent storage 
        reservoirs other than applications for enhanced oil recovery, 
        which is a commercial activity. These demonstrations need to be 
        undertaken in multiple regions of the country with uniquely 
        different reservoir characteristics. Finally, every effort 
        should be made to couple Phase III demonstrations with coal-
        based energy projects that include CO2 capture (if 
        such CCS projects are undertaken then significantly more 
        funding for demonstrations will be required).
  --Advanced Turbines.--This program should be increased by $12 million 
        to insure that the development of the hydrogen turbine is not 
        delayed. The hydrogen turbine is an essential component of 
        FutureGen. It is also important that other advanced turbines 
        that will use synthesis gas derived from coal should be 
        supported, as well. In both instances, such turbines are 
        essential to increase plant efficiencies and reduce carbon 
        emissions. The primary objective of this program must be to 
        focus upon the development of large scale turbines needed to 
        support advanced generation coal power facilities. University 
        research programs to ensure long term technology development 
        are also important.
  --Advanced Research.--CURC recommends an additional $8 million for 
        ultra supercritical materials research activities. This 
        program, which has been under funded for the past 2 years, 
        supports the development of high temperature materials that 
        will enable boiler systems and steam turbines to become more 
        efficient, resulting in the reduction of power plant 
        CO2 emissions. Advanced materials derived from a 
        successful high temperature materials program will enable 
        efficiency gains which, in turn, will reduce CO2 
        emissions. Therefore, this program is very important for its 
        applicability to new ultra supercritical and IGCC systems.
  --IGCC.--CURC recommends an additional $5 million to continue 
        important ongoing R&D at the Power Systems Development Facility 
        and on alternative gasification based systems that are critical 
        to supporting both FutureGen and future gasification technology 
        needs.
  --Coal to Liquids.--CURC recommends an increase of $8 million to 
        focus on coal to liquids activities. Any funding increase 
        should be directed towards activities that will achieve the 
        dual goal of increased energy security and reduced 
        CO2 emissions from coal to liquids facilities.
    CURC is concerned that the practice of earmarking funds undermines 
the competitive nature and fundamental goals of the DOE clean coal 
program. Understanding that some earmarks may be consistent with the 
DOE program goals and those of the CURC-EPRI Roadmap, CURC believes 
that Congress and DOE should consider a set of principles to govern the 
earmark process. These principles would insure that the earmarks have 
been reviewed by Congress through hearings or through other measures to 
make certain they are consistent with the goals of the program and 
focus on the development of critical CCS technologies.

                               CONCLUSION

    Continued long term use of coal, and realization of its benefits, 
will only occur if an extensive commitment to technology development 
allows coal to overcome environmental challenges. The fiscal year 2008 
budget request does not reflect such a commitment. Congress must 
support the development of FutureGen, and substantially increase 
funding for the R&D and CCPI programs with broad support for the 
development of both combustion- and gasification-based technologies, if 
we are to develop effective technology solutions to address climate 
change.
                                 ______
                                 
  Prepared Statement of the Electric Drive Transportation Association

    The Nation has come to understand that achieving real national 
security and addressing climate change will require a concerted effort 
to end America's oil dependence. The electric drive technologies being 
developed by the Department of Energy's Office of Energy Efficiency and 
Renewable Energy (EERE), in particular, the Vehicle Technologies and 
Hydrogen and Fuel Cell Technologies programs, are integral to the 
success of that effort. As you assemble the fiscal year 2008 Energy and 
Water Development budget, we respectfully request that you fund these 
programs at levels commensurate with their major contribution to ending 
our oil dependence.
    At the Electric Drive Transportation Association (EDTA), our 
mission is promotion of electric drive technologies, which reduce 
petroleum consumption and decrease emissions of greenhouse gases and of 
air pollutants. Using electricity, by itself or in conjunction with 
another fuel, electric drive technologies power the wheels of vehicles 
that are being used today throughout the transportation sector, 
including passenger vehicles, trucks, tractors, locomotives and ground 
support equipment. Electric drive also powers transportation 
infrastructure, such as truck refrigeration and truck stop 
electrification facilities, which allow idled trucks to power with 
clean, alternative electricity.
    Electric drive technologies also complement the national effort to 
increase the use of biofuels with their ability to use renewable fuels 
in hybrid applications and to use renewable power in exclusively 
electric operation.
    Multiple fuel and vehicle technologies, including hybrids, battery 
electric vehicles, fuel cell vehicles, and plug-in versions of these 
electric drive vehicles, need to be part of the national plan to end 
America's oil dependence. A substantial and consistent level of Federal 
support for research, development and deployment is essential to moving 
these technologies fully into the mainstream.
    EERE's Hydrogen and Fuel Cell Technologies Programs and the Vehicle 
Technologies Programs are the leading edge of the Federal effort to 
advance these technologies and to bring us closer to our energy goals. 
For instance, increased energy storage technologies, such as advanced 
batteries, are the foundation of the next wave of electric drive. They 
are the key to commercialization of plug-in electric drives and will 
accelerate advances in all electric drive vehicles. The 
administration's $41 million request for energy storage research and 
development is a step in the right direction. However, it is too small 
a step when considered against what is at stake and what can be 
achieved.
    For Fuel Cell and Hydrogen Technology Programs, the administration 
wisely maintains its overall commitment to hydrogen and fuel cell 
development, but the request falls short in two key areas. In the 
Technology Validation program, hydrogen infrastructure and fuel cell 
systems are certified under real world conditions. This work guides 
research agendas and helps establish the ``real world'' data collection 
necessary to develop fuel cell vehicles. However, DOE's allocation of 
fiscal year 2007 funds for this work is unclear at this time and the 
$30 million fiscal year 2008 program request is $3 million lower than 
the fiscal year 2006 appropriated level and nearly a third ($9.5 
million) lower than the 2007 request. We urge you to provide the 
appropriate guidance and ensure continuous and credible funding for the 
Technology Validation program's critical work.
    An additional tool in speeding commercialization of hydrogen fuel 
cells was created in the Title VII Federal procurement programs of 
EPAct05. The programs were designed to use the power of the Federal 
Government to promote increased overall fuel cell production and reduce 
costs by helping Federal agencies defray the incremental costs of 
purchasing hydrogen energy systems and fuel cell vehicles and 
equipment. Unfortunately, these market transition programs have not yet 
been funded and were not included in the administration's fiscal year 
2008 request.
    We ask you to implement the EPAct05 procurement programs with 
sufficient funds to maximize agencies' hydrogen and fuel cell purchases 
and leverage the Federal Government's purchasing power to increase and 
build the market for these clean, efficient energy systems.
    The Clean Cities program is another deployment program with a 
record of success. The Clean Cities program consists of voluntary local 
and regional coalitions working to build clean and efficient fleets, 
including schools, airports, and municipal buses, with advanced 
technology and alternative fuel vehicles. The program's ability to help 
more communities reduce petroleum consumption is limited only by lack 
of resources.
    The administration's $9.6 million request for the program is a 
welcome increase over the prior year's request, but still represents a 
missed opportunity for oil savings and clean technology deployment. We 
request that you provide technology- and fuel-neutral funds above the 
requested level to maximize the program's proven ability to reduce 
petroleum use and emissions while helping to commercialize new 
technologies, fuels and infrastructure.
    Other important demonstration and deployment efforts are advanced 
in the EPAct fleet programs. By requiring the use of alternative 
vehicles and fuels in Federal, State and utility fleets, the EPAct 
program requirements reduce petroleum consumption while helping to 
demonstrate and build markets for new technologies. Implementation of 
the EPAct05 alternative compliance waiver, which recognizes hybrid 
vehicles in compliance efforts for the first time, will also be part of 
the program's fiscal year 2008 responsibilities.
    The administration's request of $1.8 million will not support 
effective implementation of these key fleet programs. We request that 
you provide funding at a level that will allow the program to work as 
intended and to secure the oil savings, environmental benefits and new 
technology deployment that Congress intended.
    EDTA appreciates the committee's support for EERE's vehicle and 
hydrogen and fuel cell technology programs. We ask that you make the 
necessary investments to help transform the fuel consumption of the 
U.S. fleet with electric drive technologies and finally break our 
dependence on oil. Only then can we achieve real national security and 
a cleaner and more sustainable environment.
                                 ______
                                 
      Prepared Statement of the American Society for Microbiology

    The American Society for Microbiology (ASM) is pleased to submit 
the following testimony on the fiscal year 2008 appropriation for the 
Department of Energy (DOE) science programs. The ASM is the largest 
single life science organization with more than 42,000 members. The ASM 
mission is to enhance the science of microbiology, to gain a better 
understanding of life processes, and to promote the application of this 
knowledge for improved health and for economic and environmental well-
being.
    The DOE Office of Science supports research that drives discovery 
and innovation to create alternative energy sources, efficient energy 
production, and a sustainable environment. Increased resources for the 
DOE Office of Science are necessary to meet these challenges and the 
ASM supports the President's request of $4.398 billion for the DOE 
Office of Science, an increase of $602 million over the fiscal year 
2007 funding level.
    The requested increase is consistent with the American 
Competitiveness Initiative (ACI) and the Advanced Energy Initiative 
(AEI). DOE supported research on microbial biology is essential in 
meeting the goals of these initiatives. Microbial biology research is 
critical for advances in bioenergy. Microbial research contributions 
includes:
  --Novel bioenergy production methods, and improved biofuel production 
        by microbes. Different microbes produce a variety of energy 
        products such as ethanol, hydrogen, oils and even electrical 
        current. Discovery of new processes that use microbes and 
        microbes that enhance the efficiency of these processes, 
        genetic engineering microbes that achieve this goal and 
        learning to manage consortia of microbes to optimize biofuel 
        production are all needs that will enhance the economics of 
        bioenergy.
  --Discovery of novel plant cell wall decomposition enzymes. Microbes 
        have a tremendous diversity of undiscovered biochemical 
        capabilities, including enzymes that naturally recycle biomass. 
        Capturing this diversity for more efficient release of plant 
        carbon for conversion to energy is a central need for better 
        bioenergy processes.
  --Efficient, sustainable plant-soil systems for biofuel production. 
        Healthy, low-cost, and productive plant communities require a 
        supportive soil microbial community to recycle nutrients, 
        protect against root pathogens, produce plant growth factors, 
        fix nitrogen and aid soil structure. Furthermore, management of 
        these plant-soil systems must be done to minimize greenhouse 
        gas production.
    The ASM strongly encourages DOE to support a balanced research 
portfolio as it seeks to increase production of bioenergy sources. 
While the ASM recognizes that the AEI and ACI are critical for meeting 
the Nation's competitiveness and energy challenges, it also encourages 
the DOE to maintain support for other science and technology solutions 
to long-term environmental challenges, such as climate change and 
environmental remediation.

                 BIOLOGICAL AND ENVIRONMENTAL RESEARCH

    Within the DOE Office of Science, the Biological and Environmental 
Research (BER) division uses peer-reviewed research at national 
laboratories, universities, and private institutions to build a 
science, technology, and knowledge base for understanding and 
harnessing the capabilities of microbial and plant systems that will 
lead to cost-effective, renewable energy production, greater energy 
security, clean-up of legacy wastes, and mitigation of increases in 
atmospheric carbon dioxide. The ASM supports the President's request to 
fund the BER at $510 million, an increase of $70 million over fiscal 
year 2007 for base BER programs, with $75 million directed to GTL 
Bioenergy Research Centers.
    BER research programs such as the Genomic: GTL program, 
Environmental Remediation Sciences Division (ERSD), the Joint Genome 
Institute (JGI), and Climate Change programs are instrumental for 
understanding microbial biology, how microorganisms interact with and 
respond to their environments, and how microorganisms can be harnessed 
to produce clean, efficient energy, remove excess carbon from the 
atmosphere, and help clean up the environment.
    The fiscal year 2008 request for BER would support about 1,500 
graduate students and post-doctoral investigators at universities and 
national laboratories. Fellowship programs are also supported by BER 
for undergraduate and graduate students through its Global Change 
Education Program. This support for undergraduate and graduate students 
and post-doctoral investigators is critical for the development of the 
next generation of scientists, engineers, and science educators.

                             GENOMICS: GTL

    GTL research conducts explorations of microbes and plants at the 
molecular, cellular, and community levels. The goal is to gain insights 
about fundamental biological processes and, ultimately, a predictive 
understanding of how living systems operate. The resulting knowledge 
base--linked through DNA sequence and freely available--will catalyze 
the translation of science into new technologies for energy and 
environmental applications.
    Microbes make up the foundation of the biosphere and sustain all 
life on earth. DOE has sponsored the genome sequencing of key model 
plants and some 200 microbes relevant for generating clean energy, 
cleaning up toxic waste from nuclear weapons development, and cycling 
carbon from the atmosphere.
    In May 2006, the National Research Council of the National 
Academies of Science completed an independent review of the Genomics: 
GTL program that endorsed the systems biology approach of the program, 
applauded the research conducted by its grantees, and recommended the 
formation of interdisciplinary research centers focused on fundamental 
research addressing DOE mission needs, including bioenergy. The DOE 
embraced this recommendation, and is currently reviewing proposals for 
GTL Bioenergy Research Centers. The administration requested that $75 
million be provided in fiscal year 2008 for three of these centers. The 
ASM believes the GTL Bioenergy Research Centers are an important step 
forward to addressing national energy needs but they must be 
supplemented by a vigorous and well funded research effort. Funding for 
the GTL centers should not be at the expense of the core BER science 
programs.

              ENVIRONMENTAL REMEDIATION SCIENCES DIVISION

    The Environmental Remediation Sciences Division (ERSD) sponsors and 
supports fundamental scientific research to understand the complex 
physical, chemical, and biological properties of contaminated sites for 
new solutions to environmental remediation. DOE is responsible for the 
largest, most complex, and diverse collection of environmental 
remediation challenges in the Nation.
    DOE's remediation challenges occur in the field where highly 
interactive natural processes, over a broad range of scales, control 
the fate and transport of contaminants. The ERSD goal is to help 
provide the basis for development of innovative remediation measures to 
support decision making critical to long-term stewardship. Of the 144 
sites where DOE has remediation, waste management, or nuclear materials 
and facility stabilization responsibilities, nearly 100 have soils, 
sediments, or groundwater contaminated with radionuclides, metals, or 
organic materials.
    The ASM is concerned with the steady decline in funding for the 
ERSD from fiscal year 2004 to fiscal year 2007. The ERSD research 
conducted on microbes is an essential component in developing 
effective, sustainable remediation technologies. ASM urges Congress to 
provide at least the President's fiscal year 2008 request of $97.4 
million for ERSD.

                         JOINT GENOME INSTITUTE

    The DOE Joint Genome Institute (JGI) has completed the sequence of 
the 100 microbial genomes and released this information for the benefit 
of the global research community. The JGI is the primary source of 
genomic data for non-medical microbiology and immensely benefits the 
community.
    The JGI's Community Sequencing Program (CSP) devotes all of its 
sequencing capacity to the merit-reviewed sequencing needs of the 
broader non-medical scientific community, while addressing the DOE 
mission-relevant criteria of energy production, carbon sequestration, 
research and bioremediation research, and low dose radiation research. 
JGI is an integral component as the area of metagenomics for both 
energy and carbon sequestration grows.
    The ASM supports the President's fiscal year 2007 request of $62 
million for JGI, a $10.5 million increase over fiscal year 2006, and a 
$2 million increase over the President's fiscal year 2008 request.

                        CLIMATE CHANGE RESEARCH

    The mission of the Climate Change Research subprogram is to provide 
the scientific base for making predictions and assessments of the 
potential effects of greenhouse gases and aerosol emissions on climate 
and the environment, such as abrupt climate change, understanding the 
global carbon cycle and the development of approaches for enhancing 
biological carbon sequestration in terrestrial ecosystems. The ASM 
supports the President's fiscal year 2008 request of $138 million for 
Climate Change Research.
    Research exploring the responses and behavior of microorganisms in 
ecosystems is necessary in understanding the changes in the expanded 
plant and animal systems. Greater collaboration with the Genomics: GTL 
program and climate change research would provide a stronger basis for 
understanding the core elements of the ecosystem and its responses. The 
ASM urges greater linkages between the GTL program and Climate Change 
Research, similar to the current collaborative relationship between GTL 
and the ERSD.

                         WORKFORCE DEVELOPMENT

    Cultivating a well-trained workforce of teachers and scientists is 
vital for maintaining our Nation's competitiveness, and meeting the 
challenges of the future. The ASM supports the President's request of 
$11 million for Workforce Development for Scientists and Engineers 
within the DOE Office of Science, through undergraduate research 
internships, graduate and faculty fellowships, and pre-college 
activities. These programs build links between the national 
laboratories and the science education community, provides mentor 
intensive research experiences at national laboratories for 
undergraduate and graduate students, and encourages middle and high 
school students in the fields of math and science.

                               CONCLUSION

    The ASM supports the President's 16 percent increase for the DOE 
Office of Science in fiscal year 2008, and urges Congress to provide 
adequate funding for the BER, including ERSD, Genomics: GTL, JGI, and 
Climate Change Research programs, which are essential in meeting DOE's 
mission. The DOE Office of Science programs enhance U.S. 
competitiveness through fundamental research for advanced scientific 
breakthroughs that will revolutionize our approach to the Nation's 
energy and environment challenges.
    The ASM appreciates the opportunity to provide written testimony 
and would be pleased to assist the subcommittee as it considers the 
fiscal year 2008 appropriation for the DOE.


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page

Allard, Senator Wayne, U.S. Senator From Colorado:
    Prepared Statements of.............................36, 96, 226, 352
    Questions Submitted by.................115, 151, 152, 163, 299, 314
    Statement of.................................................   171
Alliance for Materials Manufacturing Excellence, Prepared 
  Statement of the...............................................   547
Alliance to Save Energy, Prepared Statement of the...............   555
American Chemical Society, Prepared Statement of the.............   451
American Forest & Paper Association, Prepared Statement of the...   559
American Geological Institute, Prepared Statement of the.........   553
American Iron & Steel Institute, Prepared Statement of the.......   523
American Museum of Natural History, Prepared Statement of the....   516
American Nuclear Society, Prepared Statement of the..............   552
American Public Power Association, Prepared Statement of the.....   512
American Society for Microbiology, Prepared Statement of the.....   572
American Wind Energy Association, Prepared Statement of the......   517
Arkansas River Basin Interstate Committee, Prepared Statements of 
  the..........................................................397, 400
Austin Energy, Prepared Statement of.............................   540

Bennett, Senator Robert F., U.S. Senator From Utah:
    Question Submitted by........................................   149
    Statement of.................................................    59
Board of Levee Commissioners for the Yazoo-Mississippi Delta, 
  Prepared Statement of the......................................   398
Board of Mississippi Levee Commissioners, Prepared Statement of 
  the............................................................   416
BP Exploration (Alaska), Inc., Prepared Statement of.............   545
Brazos River Harbor Navigation District, Freeport, Texas, 
  Prepared Statement of the......................................   426
Byrd, Senator Robert C., U.S. Senator From West Virginia, 
  Questions Submitted by.........................................   304

Calaveras County Water District, Prepared Statement of the.......   448
California State Coastal Conservancy, Prepared Statement of the..   449
Center for Advanced Separation Technologies, Virginia Polytechnic 
  Institute and State University, Prepared Statement of the......   562
Center for Plasma Science and Technology, Florida A&M University, 
  and the Department of Physics, West Virginia University, 
  Prepared Statement of the......................................   529
Chambers County-Cedar Bayou Navigation District, Texas, Prepared 
  Statement of the...............................................   424
City of Arlington, Texas, Prepared Statement of the..............   419
City of Flagstaff, Arizona, Prepared Statement of the............   396
City of Mesa, Arizona, Prepared Statement of the.................   424
City of San Marcos, Texas, Prepared Statement of the.............   412
City of St. Helena, California, Prepared Statement of the........   455
Clark County Regional Flood Control District, Prepared Statement 
  of the.........................................................   394
Coal Utilization Research Council, Prepared Statement of the.....   568
Coalition of Northeastern Governors, Prepared Statement of the...   491
Cochran, Senator Thad, U.S. Senator From Mississippi:
    Prepared Statement of........................................   172
    Question Submitted by........................................   299
Colorado River Basin Salinity Control Forum, Prepared Statement 
  of the.........................................................   465
Colorado River Board of California, Prepared Statement of the....   464
Colorado River Commission of Nevada, Prepared Statement of the...   473
Confederated Tribes of the Umatilla Indian Reservation, Prepared 
  Statements of the............................................438, 480
Consortium for Fossil Fuel Science (CFFS), Prepared Statement of 
  the............................................................   489
Craig, Senator Larry, U.S. Senator From Idaho:
    Questions Submitted by.....................................149, 160
    Statements of..........................................57, 170, 322
Cummins, Inc., Prepared Statement of.............................   493

D'Agostino, Hon. Thomas P., Acting Under Secretary for Nuclear 
  Security and Administrator, National Nuclear Security 
  Administration, Department of Energy...........................   321
    Prepared Statement of........................................   326
    Questions Submitted to.......................................   366
    Statement of.................................................   323
Domenici, Senator Pete V., U.S. Senator From New Mexico:
    Opening Statements of..............................16, 89, 168, 223
    Prepared Statements of........................18, 89, 169, 224, 349
    Questions Submitted by..112, 147, 157, 209, 278, 294, 312, 319, 366
Donald, Admiral Kirk, Director, Naval Nuclear Propulsion, U.S. 
  Navy...........................................................   321
Dorgan, Senator Byron L., U.S. Senator From North Dakota:
    Opening Statements of..........................1, 53, 167, 221, 321
    Prepared Statements of....................................... 2, 55
    Questions Submitted by....41, 49, 106, 115, 152, 275, 282, 300, 315

Electric Drive Transportation Association, Prepared Statement of 
  the............................................................   571

Feinstein, Senator Dianne, U.S. Senator From California, 
  Questions Submitted by........................110, 157, 206, 287, 312
Fifth Louisiana Levee District, Prepared Statement of the........   393
Fort Peck Assiniboine and Sioux Tribes and Dry Prairie Rural 
  Water, Prepared Statement of the...............................   484
Fuel Cell Power Association, Prepared Statement of the...........   528
FuelCell Energy, Inc., Prepared Statement of.....................   506

Garrison Diversion Conservancy District, Prepared Statement of 
  the............................................................   474
Gas Technology Institute, Prepared Statement of the..............   496
GE Energy, Prepared Statement of.................................   533
Ground Water Protection Council, Prepared Statement of the.......   507

Health Physics Society (HPS) and the Health Physics Program 
  Directors Organization (HPPDO), Prepared Statement of the......   536
Hutchison, Senator Kay Bailey, U.S. Senator From Texas, Questions 
  Submitted by.................................................114, 161

IMPACT Technologies LLC, Prepared Statement of...................   549
Independent Petroleum Association of America, Prepared Statement 
  of the.........................................................   540
Inouye, Senator Daniel K., U.S. Senator From Hawaii, Questions 
  Submitted by...................................................   121
Interstate Oil and Gas Compact Commission, Prepared Statements of 
  the..........................................................499, 566

Jicarilla Apache Nation, Prepared Statement of the...............   461
Johnson, Robert W., Commissioner, Bureau of Reclamation, 
  Department of the Interior.....................................    81
    Prepared Statement of........................................    82
    Questions Submitted to.......................................   152

Karsner, Hon. Alexander, Assistant Secretary for Energy 
  Efficiency and Renewable Energy, Department of Energy..........   234
    Prepared Statement of........................................   236
    Questions Submitted to.......................................   282
Kolevar, Kevin M., Director, Office of Electricity Delivery and 
  Energy Reliability, Department of Energy.......................   250
    Prepared Statement of........................................   252
    Questions Submitted to.......................................   315

Landrieu, Senator Mary L., U.S. Senator From Louisiana:
    Prepared Statement of........................................    60
    Questions Submitted by.....................................111, 120
Limbaugh, Mark, Assistant Secretary for Water and Science, Bureau 
  of Reclamation, Department of the Interior.....................    74
    Prepared Statement of........................................    75
    Question Submitted to........................................   152
Little River Drainage District, Prepared Statement of the........   409
Louisiana Department of Transportation and Development (LADOTD), 
  Prepared Statement of the......................................   407

Metropolitan Water Reclamation District of Greater Chicago, 
  Prepared Statement of the......................................   457
Mississippi Valley Flood Control Association, Prepared Statement 
  of the.........................................................   404
Mni Wiconi Project, Prepared Statements of the.................468, 471
Murray, Reed R., Program Director, Central Utah Project 
  Completion Act Office, Department of the Interior, Prepared 
  Statement of...................................................   105
Murray, Senator Patty, U.S. Senator From Washington:
    Prepared Statements of......................................20, 204
    Statements of...............................................20, 172

Napa County Flood Control and Water Conservation District, 
  Prepared Statement of the......................................   453
National Association of State Energy Officials, Prepared 
  Statement of the...............................................   542
National Corn Growers Association, Prepared Statement of the.....   437
National Mining Association (NMA), Prepared Statement of the.....   550
National Organization of Test, Research, and Training Reactors 
  (TRTR), Prepared Statement of the..............................   524
National Research Center for Coal and Energy, Prepared Statement 
  of the.........................................................   520
New Mexico Interstate Stream Commission, Prepared Statement of 
  the............................................................   460
NGVAmerica, Prepared Statement of................................   538
North American Die Casting Association, Prepared Statement of the   526
Nuclear Energy Institute, Prepared Statement of the..............   531
Nuclear Engineering Department Heads Organization (NEDHO), 
  Prepared Statement of the......................................   524
Nuclear Waste Strategy Coalition, Prepared Statement of the......   500

Orbach, Hon. Raymond L., Director, Office of Science, Department 
  of 
  Energy.........................................................   167
    Prepared Statement of........................................   174
    Statement of.................................................   173
Oregon Water Resources Congress, Prepared Statement of the.......   482

Petroleum Technology Transfer Council, Prepared Statement of the.   564

Red River Valley Association, Prepared Statement of the..........   427
Reed, Senator Jack, U.S. Senator From Rhode Island:
    Prepared Statements of......................................86, 225
    Questions Submitted by................................121, 292, 318
 Rispoli, Hon. James A., Assistant Secretary of Energy for 
  Environmental Management, Office of Environmental Management, 
  Department of 
  Energy.........................................................     1
    Prepared Statement of........................................    10
    Questions Submitted to.......................................    41
    Statement of.................................................     3
Riverside County Flood Control and Water Conservation District, 
  Prepared Statement of the......................................   431

Sacramento Area Flood Control Agency, Prepared Statement of the..   434
Salt River Pima-Maricopa Indian Community, Prepared Statement of 
  the............................................................   424
San Diego County Water Authority, Prepared Statement of the......   467
Santa Clara Valley Water District, Prepared Statements of the..443, 478
Shope, Hon. Thomas D., Acting Assistant Secretary for Fossil 
  Energy, Department of Energy...................................   244
    Prepared Statement of........................................   246
    Questions Submitted to.......................................   300
Southern Company Generation, Prepared Statement of...............   509
Sproat, Hon. Edward F., III, Director, Office of Civilian 
  Radioactive Waste Management, Department of Energy.............    20
    Prepared Statement of........................................    22
    Questions Submitted to.......................................    49
Spurgeon, Hon. Dennis R., Assistant Secretary Nuclear Energy, 
  Department of Energy...........................................   221
    Prepared Statement of........................................   229
    Questions Submitted to.....................................275, 278
    Statement of.................................................   227
St. Francis Levee District of Arkansas, Prepared Statement of the   413
State of Illinois, Prepared Statement of the.....................   420
State Teachers' Retirement System, Prepared Statement of the.....   487
Strand Energy, L.C., Prepared Statement of.......................   568
Strock, Lieutenant General Carl, Chief of Engineers, Corps of 
  Engineers--Civil, Department of the Army, Department of 
  Defense--Civil.................................................    70
    Prepared Statement of........................................    71
    Questions Submitted to.......................................   115

The Nature Conservancy, Prepared Statement of....................   440
Tobey, William H., Deputy Administrator for Defense Nuclear 
  Nonproliferation, National Nuclear Security Administration, 
  Department of Energy...........................................   321

University Corporation for Atmospheric Research (UCAR), Prepared 
  Statement of the...............................................   504
University of Texas at Austin, Prepared Statement of the.........   537
University of Tulsa, Prepared Statements of the................495, 514
Upper Mississippi River Basin Association (UMRBA), Prepared 
  Statement of the...............................................   401

Western Coalition of Arid States (WESTCAS), Prepared Statements 
  of the.......................................................459, 473
Western Michigan University (WMU), Prepared Statement of.........   558
Woodley, Hon. John Paul, Jr., Assistant Secretary of the Army 
  (Civil Works), Corps of Engineers--Civil, Department of the 
  Army, Department of Defense--Civil.............................    53
    Prepared Statement of........................................    61
    Questions Submitted to.......................................   106
    Statement of.................................................    60


                             SUBJECT INDEX

                              ----------                              

                      DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army

                       Corps of Engineers--Civil

                                                                   Page

Acequias Irrigation System.......................................   113
Additional Committee Questions...................................   106
Albuquerque Levees...............................................   147
A-76 and HPO.....................................................   117
Backlog of Authorized Work.......................................   111
Beach Policy.....................................................   112
Budget:
    Priorities for Fiscal Year 2008..............................    55
    Proposals....................................................    56
    Request......................................................   121
Central NM Environmental Infrastructure Program (sec. 593) and 
  New Mexico Environmental Infrastructure Program................   148
Construction:
    Performance Guidelines.......................................    69
    Program......................................................    72
Continuing:
    Authorities:
        Budget...................................................   114
        Program..................................................   119
    Contracts, Carryover and Reprogramming.......................   109
Critical Infrastructure..........................................   120
Declining Investment as a Percentage of GDP......................   112
ESA Compliance Issues in O&M.....................................   106
Energy and Water Questions.......................................   150
Funding for the Inland Waterway Trust Fund.......................   112
Harbor Maintenance Trust Fund....................................   114
Highlights:
    Program Areas................................................    63
    Water Resources Development Accounts.........................    62
Issues for Fiscal Year 2008......................................    57
Kikiaola Harbor, Island of Kauai, Hawaii.........................   121
Latest $1.3 Billion Funding Need.................................   120
Major Rehabilitations in O&M.....................................   107
Middle Rio Grande Projects.......................................   113
Missouri River...................................................   116
Other Budget Highlights..........................................    65
Overview.........................................................    61
Performance-based Budgeting......................................    62
President's Management Agenda....................................    66
R&D..............................................................   148
Rebuilding the Gulf Coast........................................   147
Regional O&M Budgeting...........................................   108
Sacramento River, Glenn-Colusa Irrigation District...............   111
Snake River Programmatic Sediment................................   149
Summary of Fiscal Year 2008 Program Budget.......................    71
The Bureau of Reclamation........................................    56
The Central Utah Project.........................................    56
Three Affiliated Tribes Land Transfer............................   106
Value of the Civil Works Program to the Nation's Economy and 
  Defense........................................................    73
Water Resources Development Act Proposal.........................    66

                          DEPARTMENT OF ENERGY

Additional Committee Questions...................................   275
Advanced Fuel Cycle Initiative...................................   231
Anvil Points Mine Site...........................................   265
Appliance:
    Efficiency Standards.........................................   294
    Standards....................................................   283
Balancing:
    Renewable and Efficiency Funding.............................   282
    Research With Deployment Funding.............................   282
Battery R&D......................................................   296
BioFuels.........................................................   270
Biomass and Biorefinery Systems R&D..............................   237
Building:
    Codes........................................................   284
    Technologies Program.........................................   240
Carbon:
    Capture R&D..................................................   313
    Sequestration................................................   312
        Funding..................................................   301
Cellulosic Biomass--Reverse Auction..............................   297
China--Carbon Sequestration Collaboration........................   313
Clean Coal Power Initiative......................................   306
    Funding......................................................   302
Clean Energy Technology Exports Initiative.......................   307
Coal:
    R&D Research Funding.........................................   301
    Resources....................................................   255
    -To-Liquids Initiative.......................................   306
    Usage........................................................   261
Concentrating Solar..............................................   297
Consolidation of Research Programs...............................   315
Cooperative Nuclear Fuel Research With Russia....................   281
Deploying New Technology.........................................   295
Deployment of Renewable Energy Technologies......................   298
Distributed Generation...........................................   318
Electricity:
    Delivery:
        And Energy Reliability...................................   299
            Budget...............................................   258
        Technological Advances...................................   258
    Transmission and Energy Delivery.............................   316
Elk Hills........................................................   312
    School Lands Fund............................................   249
Energy:
    Efficiency and Renewable Energy Budget.......................   256
    Infrastructure Security......................................   319
    Storage R&D..................................................   319
Enhanced Geothermal Systems......................................   288
EPACT:
    And Efficiency Programs......................................   292
    2005 and Geothermal Programs.................................   286
Existing Biomass Awards..........................................   298
Facilities and Infrastructure....................................   243
Federal Energy Management Program..............................241, 285
Foreign Interest in Nuclear Energy...............................   279
Fossil Energy....................................................   290
    Budget.......................................................   255
        Request..................................................   300
Fossil Energy's Budget Meets the Nation's Critical Energy Needs..   250
Fuels and Power Systems..........................................   247
Funding for Advanced Combustion:
    R&D..........................................................   270
    Research.....................................................   270
FutureGen........................................................   304
GAO Report.......................................................   310
Generation IV Nuclear Energy Systems Initiative..................   231
Geothermal:
    Program and the National Research Council Recommendations....   287
    Termination..................................................   287
Global Nuclear Energy Partnership (GNEP)........228, 262, 275, 280, 289
    Advanced Fuel Cycle Facility--Luxury or Necessity?...........   278
    Coordinating Research With Other NE Programs.................   280
Grid Research at Pacific Northwest National Laboratory...........   270
High Temperature Superconductivity Research......................   316
Hydrogen Technology Program......................................   239
Idaho:
    Facilities Management........................................   233
    Site-Wide Safeguards & Securities............................   233
Impact of the Fiscal Year 2008 Budget on the National Energy 
  Technology Laboratory..........................................   307
Improved Building Efficiency.....................................   297
Industrial:
    Efficiency Program Funding Decrease..........................   293
    Technologies Program.........................................   243
Infrastructure Security and Energy Restoration...................   254
Loan Guarantee:
    Program......................................................   260
    Programs (Title 17 of EPACT).................................   295
    Questions....................................................   317
    Regulations..................................................   294
    Technical Evaluation and Financial Evaluation................   295
Materials Manufacturing and Industrial Materials.................   293
Natural Gas Cartel...............................................   303
Naval Oil Shale:
    Reserve Certification........................................   264
    Reserves Royalty Distribution................................   314
Next Generation Nuclear Powerplant...............................   263
Nuclear:
    Energy Budget................................................   257
    Energy's Role................................................   277
    Fuel Cycle...................................................   281
    Hydrogen Initiative..........................................   232
    Power 2010 (NP 2010).......................................227, 230
        Program..................................................   278
            Reforms..............................................   279
Office of Energy Electricity Delivery and Energy Reliability.....   319
Oil:
    And Gas Price Relationship...................................   311
    Savings......................................................   285
Permitting, Siting, and Analysis.................................   253
Preventing Regional Blackouts....................................   260
Program Assessment Rating Tool (PART)............................   266
    Score for University Nuclear Education Program...............   267
    Scores................................................265, 267, 268
Program Direction and Program Support............................   244
Public Education.................................................   285
Radiological Facilities Management...............................   232
Rescission of $149 Million From the Clean Coal Technology Account   302
Research and Development.........................................   253
Retrievable Energy in Spent Nuclear Fuel.........................   271
``Save Energy Now'' Campaign.....................................   293
Solar Energy.....................................................   296
    Program......................................................   240
State Energy Program PART Score..................................   268
Taxation of Coal R&D Dollars.....................................   314
The President's Coal Research Initiative.........................   246
University:
    Nuclear Education Program....................................   268
    Oil and Gas Research Funding.................................   302
    Reactor Infrastructure and Educational Assistance............   233
Vehicle:
    Efficiency...................................................   269
    Technologies Program.........................................   238
Weatherization...................................................   271
    And Intergovernmental Program................................   242
    Assistance Program...........................................   283
    Funding Decrease.............................................   292
Wind:
    And Solar Production Costs...................................   287
    Energy Program...............................................   242

                National Nuclear Security Administration

Additional Committee Questions...................................   366
Approaches:
    That Fail to Meet U.S. National Security and Nonproliferation 
      Objectives.................................................   390
    That Meet U.S. National Security and Nonproliferation 
      Objectives.................................................   389
Business Case--Department of Energy's Proposed Baseline Approach 
  for Disposing of Surplus Plutonium, April 2007.................   380
Chemistry and Metallurgy Research Facility Replacement...........   371
Closing Los Alamos National Laboratory...........................   368
Complex 2030.....................................................   366
    Facilities Before Science....................................   369
Cyber Security Funding--Insufficient to Address the Risk.........   392
Defense Nuclear Nonproliferation.................................   335
Description of DOE's Surplus Fissile Materials...................   384
Elimination of Weapons Grade Plutonium Production................   336
Environmental Projects and Operations............................   334
Establishment of a Joint High Energy Plasma Program..............   374
Evaluation of Alternative Storage and Disposition Approaches.....   389
Expansion of MOX.................................................   378
Experimental Hydro Tests.........................................   372
Financial Analysis of DOE's Proposed Baseline Plutonium 
  Disposition Approach...........................................   385
Fiscal Year 2008 Budget:
    Request by Program...........................................   330
    Tables.......................................................   339
Fissile Materials Disposition....................................   336
Global:
    Nuclear Energy Partnership...................................   345
    Threat Reduction Initiative..................................   335
GNEP and MOX.....................................................   378
Heavy Water Inventory............................................   376
High Performance Computing.......................................   372
Historically Black Colleges and Universities (HBCU) Support......   338
Insufficient Funding for Z Operations............................   370
International Material Protection and Cooperation................   335
Mixed Oxide Fuel Fabrication Facility..........................354, 359
MOX:
    Alternatives.................................................   377
    Program......................................................   377
National Ignition Facility.......................................   375
Naval Reactors.................................................330, 337
Navy Home Porting................................................   362
NNSA's Plutonium Consolidation and Disposition Strategy..........   379
Nonproliferation:
    And International Security...................................   336
    And Verification Research and Development....................   336
    Research and Development.....................................   362
Nuclear:
    Nonproliferation.............................................   329
    Weapons Incident Response....................................   334
Office of the Administrator......................................   338
Pacific Northwest National Laboratory............................   348
Pit Production/Reliable Replacement Warhead......................   346
Readiness in Technical Base and Facilities (RTBF) and Facilities 
  and Infrastructure Recapitalization Program (FIRP).............   333
Reliable Replacement Warhead...............342, 350, 355, 361, 369, 374
Russia's MOX Commitment..........................................   378
Safeguards and Security..........................................   334
Sandia National Laboratories Ion Beam Laboratory.................   376
Secure Transportation Asset......................................   333
Security:
    At National Laboratories.....................................   352
    Guards at Pantex on Strike...................................   376
Warhead Dismantlement............................................   357
Weapons:
    Activities...................................................   326
    Program Activities...........................................   331

            Office of Civilian Radioactive Waste Management

Additional Committee Questions...................................    41
Advanced Fuel Cycle Initiative...................................    37
Canister Handling and Storage....................................    49
Fiscal Year 2008 Key Activities..................................    22
Global Nuclear Energy Partnership................................    37
Government Legal Liability.......................................    50
Impact of Fiscal Year 2007 Final Budget Authorization............    23
Implications of Non-access to the Nuclear Waste Fund.............    23
Layoffs..........................................................    50
Nevada Rail Line.................................................    50
Nuclear Waste Fund Legislative Proposal..........................    25
Proposed Legislation for Nuclear Waste Fund......................    32
Second Repository................................................    49
Yucca Mountain:
    Authorization................................................    49
    Reduction in Fiscal Year 2008 Transportation Request.........    40
    Updated Baseline.............................................    40

                   Office of Environmental Management

Acceleration of TRU Waste to WIPP................................    44
Additional Committee Questions...................................    41
Atlas Mill Site Closure Date.....................................    32
Cleanup Funding Strategy.........................................    36
Consequences of a Reduced Environmental Management Budget........    19
Consolidation of Special Nuclear Material........................    45
Contractor Performance...........................................    31
Environmental Management.........................................    19
Fines............................................................    43
    Assessed Against DOE and Los Alamos National Security (LANS).    30
Fiscal Year 2008 Funding for HAMMER Program......................    26
HAMMER Funding...................................................    26
Hanford Site Managers Vacancies..................................    27
Lessons Learned Applications to Other Cleanup Sites..............    35
Los Alamos:
    Missed Milestones............................................    41
    National Laboratory (LANL)...................................    44
        Safety Concerns..........................................    43
Missed:
    Cleanup Milestones at Los Alamos National Lab................    28
    Milestones Consequences......................................    38
Mixed-Oxide (MOX) Fuel Fabrication Facility vs.Vitrification.....    45
Renegotiating the LANL Consent Order.............................    42
Risk Reduction Results...........................................    11
Sandia Cleanup...................................................    44
Solving the Challenges...........................................    12
Supplemental Bulk Vitrification Technology.......................    25
Technical Area-21................................................    43
The Fiscal Year 2008 Budget Request..............................    13
Washington State:................................................
    High Level Waste Vitrification Project.......................    47
    Tri-Party Agreement..........................................    48
Yucca Mountain...................................................    18

                           Office of Science

Additional Committee Questions...................................   206
Advanced Scientific Computing Research...........................   192
Biological and Environmental Research............................   206
    Funding......................................................   215
Carbon Sequestration...........................................192, 215
Climate:
    Change Research..............................................   197
    Modeling.....................................................   216
    Research.....................................................   214
Computer Questions...............................................   217
Earmarks.........................................................   199
Fiscal Year 2008 Science Priorities..............................   177
5-Year Plan......................................................   203
Genome Research..................................................   213
High:
    Energy Density Physics.......................................   210
    Performance Computing........................................   212
Importance of Neutron Sources....................................   198
Integration of:
    High Performance Computing Among Science and NNSA............   213
    Science and the NNSA.........................................   211
Interesting and Promising Research Projects in DOE and in the 
  Future of DOE..................................................   194
Joint Dark Energy Mission........................................   216
Low Dose Radiation Effects Research..............................   209
Major Construction Projects......................................   205
Office of Science--Energy-Water Program..........................   215
Program Objectives and Performance...............................   180
Proposed Funding for Research Programs in Renewable Energies and 
  Conservation...................................................   200
Renewable Energy.................................................   204
Science:
    Accomplishments..............................................   179
    Programs.....................................................   181
Scientific:
    Interaction with China.......................................   210
    Research at NREL.............................................   192
Superconductivity................................................   218
300 Area at PNNL.................................................   202
Transition of Research Into the Marketplace......................   193
Workforce Development for Teachers and Scientists................   210

                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

Achieving Key Goals..............................................    79
Additional Committee Questions...................................   106
Animas-La Plata Project..........................................   154
Budget Overview..................................................    76
Bureau of Reclamation--Gila River Settlement.....................   161
California Bay-Delta Restoration.................................    78
    Fund (CALFED)................................................    85
Carlsbad Irrigation District.....................................   153
Central Valley Project Restoration Fund..........................    85
Chimayo and Espanola Water Systems...............................   153
Desalination Research............................................   161
Drought........................................................157, 164
Excess Government Property Issues................................   153
Fiscal Year 2008 Planned Activities..............................    85
Healthy Lands Initiative.........................................    77
Improving Indian Education.......................................    77
Interior Priorities for Water Programs...........................    77
Loan Guarantee............................................154, 160, 163
    Program.....................................................78, 164
Maintaining Core Programs........................................    79
Management Studies...............................................    86
Middle Rio Grande Project........................................   159
Minidoka Spillway Replacement....................................   160
Minnow Sanctuary.................................................   152
Policy and Administration........................................    85
Rural Water...............................................152, 155, 162
Sacramento Valley Integrated Regional Water Management Plan......   157
Safety of Dams Program...........................................    78
San Joaquin River Restoration Fund Proposed Legislation..........    85
The Methamphetamine Crisis in Indian Country.....................    77
The National Parks Centennial Initiative.........................    76
Title XVI........................................................   160
Water:
    And Related Resources........................................    83
    2025.........................................................   158
        Preventing Crises and Conflicts..........................    78

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