[Senate Hearing 110-840]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 110-840

                                                        Senate Hearings

                                 Before the Committee on Appropriations

_______________________________________________________________________


                                                       Energy and Water

                                                            Development

                                                         Appropriations

                                                       Fiscal Year 2009



                                         110th CONGRESS, SECOND SESSION

                                                      H.R. 7324/S. 3258

DEPARTMENT OF DEFENSE--CIVIL
DEPARTMENT OF ENERGY
DEPARTMENT OF THE INTERIOR
NONDEPARTMENTAL WITNESSES


 Energy and Water Development Appropriations, 2009 (H.R. 7324/S. 3258)






                                                        S. Hrg. 110-840

    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2009

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                   ON

                           H.R. 7324/S. 3258

 AN ACT MAKING APPROPRIATIONS FOR ENERGY AND WATER DEVELOPMENT FOR THE 
     FISCAL YEAR ENDING SEPTEMBER 30, 2009, 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

                    Charles Kieffer, 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

                              ----------                              

                        Wednesday, March 5, 2008

                                                                   Page

Department of Energy:
    Office of Nuclear Energy.....................................     1
    Office of Electricity Delivery and Energy Reliability........    14
    Office of Fossil Energy......................................    18

                        Wednesday, April 2, 2008

Department of Energy.............................................    53

                        Wednesday, April 9, 2008

Department of Energy.............................................   123

                        Thursday, April 10, 2008

Department of Defense--Civil: Department of the Army: Corps of 
  Engineers--Civil...............................................   161
Department of the Interior: Bureau of Reclamation................   184

                       Wednesday, April 16, 2008

Department of Energy: National Nuclear Security Administration...   233

                       Wednesday, April 30, 2008

Department of Energy: National Nuclear Security Administration...   331

                       Nondepartmental Witnesses

Department of Defense--Civil: Department of the Army: Corps of 
  Engineers--Civil...............................................   397
Department of the Interior: Bureau of Reclamation................   410
Department of Energy.............................................   416

 
    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2009

                              ----------                              


                        WEDNESDAY, MARCH 5, 2008

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:30 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Byron L. Dorgan (chairman) 
presiding.
    Present: Senators Dorgan, Domenici, Craig, Bond, and 
Allard.

                          DEPARTMENT OF ENERGY

                        Office of Nuclear Energy

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


              opening statement of senator byron l. dorgan


    Senator Dorgan. I'm going to call the hearing to order this 
morning. I thank all of you for being here. We're here to take 
testimony from officials at the Department of Energy on three 
program offices within the Department of Energy that oversee 
aspects of the Government's Energy, Research, Development, 
Demonstration, and Deployment Programs. I have great interest 
in these issues, and I look forward to hearing from the three 
witnesses today.
    I want to mention that just this morning, starting at 8 
o'clock until 9 o'clock, I have spent an hour on the subject of 
the continued use of our coal resources in this country related 
to the issue of global warming. So I've spent a fair amount of 
time this morning on this issue of coal and global warming. One 
of the keys of that, of course, is embodied in the budget 
requests and the research and development that are done in the 
fossil energy account. I'm going to ask Mr. Slutz about that 
today.
    I do want to point out that with respect to the fossil 
energy account recommended by the President, a substantial 
portion of that increase in the fossil energy account is for 
the Strategic Petroleum Reserve. I want to make a comment about 
that in a moment.
    We've been joined by Senator Domenici. I wanted to mention 
this is the first of a series of hearings that we will do with 
respect to the programs in the Department of Energy, and I 
wanted to recognize at the start of these hearings the long 
service of Senator Domenici. I'm not doing this early because 
I'm anxious for his retirement, but the fact is this is his 
last year working on these accounts, and he's done that for a 
long, long period of time.
    He's served on the Appropriations Committee since 1983 and 
been either a chairman or ranking member of this committee for 
the past 13 years, and he has been a real champion for a lot of 
issues, including energy issues. I just wanted to say to him 
that he's been a significant contributor to all of the work of 
this committee, and I'm pleased to have him as a ranking 
member. I recognize he will retire at the end of this year, but 
I did want to make a comment about that at the front end of the 
series of hearings we will have.
    Last year and this year and in future years, we will work 
closely on these issues on both sides of the aisle. Senator 
Domenici and I worked closely last year to try to figure out 
how to put a bill together.
    I do want to mention that last year, for example, in the 
Senate, we were $1.9 billion above the administration's request 
for this subcommittee. As you know, we had to cut back some of 
that because there was a $22 billion difference between the 
Congress and the President. We had to come down nearly the 
entire $22 billion on the domestic accounts, and it wasn't easy 
to do. But we did it and still tried to preserve what we could 
of the priorities.
    I want to say that the requests for the three Department of 
Energy offices before us today are about $2.69 billion of the 
Department's $25 billion fiscal year 2009 request. The 
Department has asked for some increases for the Nuclear and the 
Fossil Energy Programs, and it has essentially asked for level 
funding for the Office of Electricity and Energy Reliability.
    Let me come back to this issue of Strategic Petroleum 
Reserve. I'm a fan of the Strategic Petroleum Reserve, but I 
think there's a time to fill it and a time to pause. A 
substantial portion of the increase in fossil energy is for the 
Strategic Petroleum Reserve. A proposition of the DOE's request 
is to expand to 1\1/2\ billion barrels of oil in the SPR.
    We are now on the current course at about 96.8-97 percent 
filled with the current goal in the Strategic Petroleum 
Reserve. I am very concerned that we are continuing to put oil 
underground when oil's trading at $103 a barrel. Taking oil 
from the Gulf of Mexico as a royalty in kind and now putting it 
underground takes oil out of the supply and puts upward 
pressure on gas prices.
    I think it's exactly the wrong thing to do, and I have 
introduced legislation to try to stop that. My legislation 
would take a pause for only 1 year--a pause unless, during that 
period, oil comes back below $75 a barrel. The pause would then 
no longer be in effect. This fossil energy account is so 
important because it's where we're going to need to do our 
research for coal, carbon capture and so on.
    In order to continue to use our coal resources, we need to 
invest a lot of money. This includes what used to be the Clean 
Coal Technology Program and other things. We need to invest a 
lot of money if we're going to continue to use our coal 
resources because the emission of carbon. We'll need to find a 
way to capture and sequester it, and I don't see enough money 
requested here, especially when we've got a third of a billion 
dollars off chasing this SPR thing right now and oil's at $100 
a barrel.
    I don't see enough money in this account being focused on 
what we should be dealing with in order to continue to use our 
coal resources. Coal contributes about half of all of the 
electricity that we use in this country. Even with the climate 
change legislation, we're going to continue to use coal. The 
question isn't whether; it's how. We're going to have to 
capture carbon, but we need to prove the technology through the 
demonstration and the commercial application of it. So, we're 
going to need more investments there, in my judgment.
    Having said that, I want to just show three charts, and 
then I'm going to call on the ranking member, Senator Domenici, 
and then also Senator Bond.
    The three charts I want to show are these. These are the 
four places we are now sticking oil underground, 60 to 70,000 
barrels a day at the moment. It's going to go to at least 
120,000 barrels a day in the second half of this year if the 
administration fills it to capacity. Those are the four 
locations. This second chart shows the 1\1/2\ billion barrel 
target.
    I don't think we should fill SPR at any cost. I think we 
ought to take a pause at the moment. The third point in the 
final chart is: Does it make sense to be putting oil 
underground when you've got tanks aboveground that need more 
supply in order to put downward pressure on price? Reducing 
supply increases price. That's just a fact, and our Federal 
Government should not be doing that.
    Senator Domenici and I were at a hearing yesterday, and the 
EIA indicated that it increases price. They estimate a nickel a 
gallon. I think it's probably more than that, but nonetheless 
this is a policy choice that we should address, and I hope to 
address it in the chairman's mark this year.
    Having said all of that, I have some questions for the 
witnesses after they have testified, but I want to call on the 
ranking member, Senator Domenici.


             opening statement of senator pete v. domenici


    Senator Domenici. Well, first, Mr. Chairman, I want to 
thank you for your nice words, and you served with me on this 
subcommittee long enough to know how much it has been a part of 
my life, because I have used this subcommittee, as I see it, to 
foster nuclear--the development of nuclear power in the United 
States and to cause the renaissance that is occurring.
    Much of the things we did came from this subcommittee, and 
some of the various people that worked on this subcommittee are 
nuclear experts out there in America promoting nuclear power.
    Obviously I want to just generally state a few things and 
then put my statement in the record. First, the big issue 
remaining in the nuclear power itinerary is to move with as 
much dispatch as possible to get an American program started 
for reprocessing or recycling, whichever one calls it, the 
waste that comes out of our power plants. It's being done in 
Europe. The United States has let it pass us by, and let me say 
to my friend here on my left who's a proponent of getting 
things done in this area of energy it's almost incredible to me 
that we have put off recycling for such a long time.
    The Secretary in front of us there, Secretary Spurgeon, he 
came here with the notion of getting on with this job in the 
nuclear area, and I'm not sure that we have yet put the glass 
on this and said that here's how we're going to do it, because 
I'm not sure that everybody that has authority is moving in the 
same direction, and we've got to find out whether we're going 
to do that or not.
    If we're not going to move in the same direction, I've got 
other things to do this year. If we are, then I'll work my 
hands till there's nothing left to see if I can't get in place 
an American program for recycling. It is ghastly that we're 
doing what we're doing, and I know you're working on this. We 
may have different ideas as to how the Government ought to go 
about doing it, but I just want everybody to know I'm not a fan 
of waiting around for GNEP and I don't think you are either. 
That's a giant--you call it an ``umbrella.'' I don't know what 
it is, but, you know, it's too big, takes too long, it's going 
to do too many things that we can't wait for. And so under it 
or on top of it, we've got to use the authorities that came 
with the other program that we have ourselves put in the law, 
AFCI, which supersedes and takes the place of GNEP, and that we 
ought to see what AFCI, Alternative Fuel Cycle Initiative--is 
that it?
    Mr. Spurgeon. Advanced Fuel Cycle Initiative.
    Senator Domenici. Advanced Fuel. That's a very important 
concept and we funded it. We funded it--whenever we funded 
GNEP, we funded it, and we've got to see what you're doing with 
that today.
    I want to also say I don't have time for a hearing like 
this to go through the details of the President's budget, but I 
would like to know how his budget stacks up for the funding of 
the laboratories now, this year versus where we ended up this 
year. I don't know if that's any of your business, but we'll 
ask the question and see that the Department answers it so that 
we know because we have our version of what it says.
    I want to say to all of you, the three of you, you're doing 
a great job, all things considered. I want to say for everyone 
to hear that under the leadership of the current Secretary, Mr. 
Sam Bodman, this department has come into its own. It is a 
true, powerful department. It is one that I'm proud to say is 
the United States Department of Energy.
    We walk in there and we know you're in an energy 
department. You're not in a department that won't talk about 
nuclear. You're there, nuclear is on the way. It's a department 
that considers all aspects of energy and does a great job with 
it. And you, sir, Mr. Spurgeon in particular, having taken the 
job late, left a good job to take it, you're doing terrific. 
Sorry you lost Clay Sell. I'm sure everybody is, but you've got 
to get on without him and for the next year get something done 
beyond study. Get something where some of these programs turn 
into action.
    I yield now and thank the chairman very much.
    Senator Dorgan. Senator Domenici, thank you very much. 
Senator Bond?


                statement of senator christopher s. bond


    Senator Bond. Thank you very much, Mr. Chairman, for 
holding this hearing on the Department's budget, and I join 
with you very strongly in saluting our distinguished ranking 
member for his years of farsighted leadership in the energy 
field.
    I can tell you, Senator Domenici, your colleagues are very 
proud of your work. We're going to miss you. There's going to 
be a big hole to fill, but I think that you will leave us with 
a vision that you laid out today that will inspire us for the 
future.
    Today, I'm here, Mr. Slutz, to express my profound dismay 
and disappointment over your Department's attempt to abandon 
the FutureGen Near-Zero-Emission Integrated Coal Power Plant by 
chopping up the program into three smaller projects focusing 
only on carbon capture and sequestration technology or CCS.
    Energy's action on FutureGen calls into question the 
veracity of the Department's statements to Congress, the 
Department's reliability as a partner, the Department's 
credibility as an advocate, and the Department's judgment as an 
agency.
    As we all know, President Bush announced FutureGen in 2003 
as a public-private partnership to build a first-of-its-kind 
coal-fueled near-zero-emission power plant. FutureGen would 
provide a full-scale coal gasification technology, called IGCC 
that generates power and captures nearly all air pollution, 
working together with carbon capture technology that allows for 
carbon collection and sequestration.
    This would be historic because IGCC is not yet proven 
affordable. Carbon capture and sequestration technology, called 
CCS, for power plants is not proven at all, and neither has 
been proven working together at a full-scale affordable and 
reliable facility.
    FutureGen would enable researchers and engineers to 
demonstrate affordable clean coal technology, ensuring its 
reliability, compatibility, and solve production problems that 
arise only when technologies are tested working together and at 
full scale.
    This is vital work because while we must do more with clean 
energy sources, specifically nuclear, including wind, solar, 
biomass, energy efficiency, each is expensive, some are 
controversial, and together they are overwhelmingly 
insufficient to meet our energy needs now and in the long-term 
future.
    Entire regions of the country, such as my Midwest, the 
mountain west, and south, depend upon coal to meet our current 
energy needs. Abandoning coal would place far too much demand 
on replacement energy sources, raising energy prices even 
further, and threatening the products and jobs that depend upon 
affordable energy from coal.
    FutureGen involves what many say is needed: an 
international partnership with governments, power producers, 
coal providers, and technology companies. FutureGen has that 
with 13 industrial partners doing business on six continents, 
including China. One of the best things that the administration 
has done for climate change questions is to develop the Asia-
Pacific Partnership that will allow the transfer of our 
technology, once we demonstrate it, to India, to China, and to 
other countries.
    What are we going to transfer if we haven't demonstrated it 
and don't know whether it works?
    We all believe the Department when the Department of Energy 
said in 2004 that ``FutureGen's integration of concepts and 
components are a key to providing technical and operational 
viability. Integration issues between coal conversion systems, 
power systems, and carbon separation and sequestration systems 
can only be addressed by a large-scale integrated facility 
operation.''
    We all believed DOE when DOE issued a nearly 2,000-page 
environmental impact statement selecting DOE's preferred 
alternative to be providing financial assistance to the 
original FutureGen project. We all believed DOE when Secretary 
Bodman sent a letter this past November 30, supporting site 
selection by the end of the year. And now we all find it hard 
to believe that DOE has left FutureGen at the altar, choosing 
instead three younger cheaper women. Maybe that's not the best 
metaphor, because I support complementary efforts to develop 
CCS technology.
    The Department's suggestion would be fine, if it were in 
addition to the integrated test plan, but the Department's 
reason for restructuring ring hollow. FutureGen's costs are the 
very reason we need Government help to work out technology 
barriers and get costs down.
    The assertion that coal gasification is a proven technology 
obviating the need to fund a full power plant and its carbon 
collection system together is disproved by the Department's own 
statement I just read. It confirmed that testing the technology 
together at full scale is the only way to prove its 
affordability and reliability.
    The future is in applying carbon capture and storage to 
IGCC plants, so we need an integrated plant to prove that 
future possible and affordable technologies can be implemented.
    Mr. Chairman and ranking member, it's up to us to be strong 
leaders on clean coal technology. Others are not going to do it 
for us. Many would saddle us with massively expensive carbon 
reductions and will not care if clean coal technologies are not 
ready when those requirements kick in. We need more funding for 
clean coal technology and clean energy, and an additional few 
tens of millions of dollars here and there on these projects 
will not protect our families from the hundreds of billions, 
hundreds of billions of dollars in energy tax costs from carbon 
caps they would face under a cap-and-trade system.
    If that is implemented before this is demonstrated, there 
is going to be devastation in many areas of the country and 
significant economic harm and harm to the environment. I urge 
the administration to return to the negotiating table and work 
out a revised FutureGen agreement at Mattoon. Industry is 
waiting in good faith for a good faith negotiating partner.
    I also would urge this committee to expand its leadership 
role. We've already--you've already done wonderful work in 
support of clean energy and coal, but even greater efforts are 
needed. We must fund an expanded FutureGen and expanded clean 
coal technology. Our clean energy future depends upon it.
    Senator Dorgan. Senator Bond, thank you very much. Senator 
Bond, I will be announcing a FutureGen hearing. We are working 
on setting a date for that hearing. I'm going to ask Secretary 
Bodman to come.
    Obviously the administration has announced a decision. The 
decision, of course, is a fairly significant decision on a 
program that has been a much-heralded program, and I think it 
would be valuable for us to hear from the Secretary and from 
several other witnesses. I'll be working on setting a date for 
that. I should be able to announce that very soon in terms of 
the date, but we will have a FutureGen hearing in the very near 
future.
    Senator Craig.


                    statement of senator larry craig


    Senator Craig. Well, thank you, Mr. Chairman. I'll be 
brief. I simply cannot match the Senator from Missouri. That 
was absolute eloquence.
    Senator Bond. Thank you.
    Senator Craig. And I mean that most sincerely. I think all 
of us on this committee and certainly the authorizing committee 
recognized the critical necessity to get the technology behind 
coal and to move it. We simply must do that if we can continue 
to expect it to be what it ought to be.
    But Dennis, to you, welcome to the committee, and I want to 
say at the outset how much I've enjoyed working with you over 
the last while, and I want to congratulate you on a job well 
done in reestablishing DOE's commitment to nuclear R&D, not 
unlike some of the thoughts that Senator Domenici has had.
    The NE budget for 2009 is over $1 billion. I remember when 
a Secretary of Energy was quietly coming up to me and saying, 
I've lost my nuclear portfolio, it's down at the White House, 
and you can expect the budget to be zeroed out. And that wasn't 
long ago.
    So, there's been a dramatic turnaround. Programs like NP 
2010, to assist new reactor build, as well NGNP and, of course, 
we still clearly see the need for a global nuclear energy 
partnership with GNEP as we move this whole issue forward.
    You've heard from me, you've heard from my colleague in the 
House, Mike Simpson say that we need to invest in our Nation's 
R&D infrastructure to support these programs as outlined in the 
National Academy of Science's report last year.
    As the custodian of the INL, you know the state of the 
lab's infrastructure, and so I guess my message to you is let's 
fix it this year. I think that's tremendously important.
    A couple of suggestions: Transfer the clean-up liability on 
the lab's side to the clean-up side, freeing up infrastructure 
funding; increase the annual budget request at the INL, 
infrastructure request from about $104 to $150 million a year. 
I think all of that would go a long ways toward assuring that 
lead nuclear lab the kind of facility it will need to meet the 
requirements the DOE will place on it in the future and that 
our Nation is going to place on it.
    Mr. Kolevar, a job well done, enhancing the reliability and 
security of our Nation's electrical infrastructure and working 
with our lab in doing that. We have some excellent projects 
going on out there that, I think, because of the uniqueness of 
the lab and the way its campus is configurated and isolated, 
we've been able to offer some valuable expertise as relates to 
the grid, how we manage it against terrorist opportunity, I 
guess is one way of saying it.
    Mr. Slutz, I'll not deal with--quite with the passion that 
Senator Bond has, but I think that both the chairman and I will 
discuss SPR and the inventory. Both Senator Dorgan and I 
believe that there is another inventory that needs to be done 
besides simply filling up the salt domes, and that's a modern 
inventory of the OCS.
    America needs to know its reserves and its resources, and 
they're currently being denied by those who are simply fearful, 
even though the technology of today would suggest that at 
appropriate times those reserves might well be necessary and 
reachable in an environmentally sound way.
    Certainly in my remaining tenure here, I'm going to push 
that issue and push it very hard. I think it is wrong to deny 
our country that knowledge and we need to modernize that issue 
with the OCS.
    Mr. Chairman, thank you much.
    Senator Dorgan. Senator Craig, thank you very much.
    The subcommittee has received a statement from Senator 
Cochran which we will insert into the record.
    [The statement follows:]
               Prepared Statement of Senator Thad Cochran
    Chairman Dorgan and Ranking Member Domenici, thank you for hosting 
this hearing today. I thank the representatives from the Department of 
Energy for being here this morning, as well.
    Energy issues continue to dominate our Nation's agenda. It is the 
responsibility of all of us here to find ways to keep up with the 
world's ever-expanding electricity demands while at the same time 
increasing energy capacity and security here at home.
    One way in which we can expand our power capacity is to expand the 
use of nuclear energy in America. I am pleased that the request for 
Nuclear Energy is increased from last year, and I hope we can fund 
these efforts at the highest level possible.
    Additionally, it is crucial that we realize the important role 
fossil energy resources continue to play in meeting America's demands 
for energy. Our abundance of coal has always been the main source of 
power in our country, and it is crucial that we find new ways to make 
coal cleaner to use.
    Finally, I would like to speak about the importance of the 
Strategic Petroleum Reserve in securing a stockpile of oil that might 
be tapped in case of emergency. I am pleased that Mississippi was 
chosen by the Department of Energy as the preferred location for 
expansion of the Reserve, and I hope that despite Chairman Dorgan's 
misgivings about filling the Reserve while oil prices are high, we 
might still fund the necessary infrastructure for expansion. As 
evidenced when fuel supplies were interrupted after Hurricane Katrina, 
the United States must have ample resources of oil should a disruption 
in supply occur again.
    I appreciate each of you being here to present your budgets, and I 
look forward to hearing your testimonies. Thank you.

    Senator Dorgan. We will now recognize our witnesses for 
statements.
    Mr. Spurgeon, we're going to call on you first, and let me 
say that I've enjoyed working with you. I agree with Senator 
Domenici. You are a very solid advocate for the programs under 
your jurisdiction, and I thank you for being here. You may 
proceed.
    Let me just say to all three of you, your complete formal 
statements are made a part of the permanent record, and we 
would ask that you summarize your remarks.

                  STATEMENT OF HON. DENNIS R. SPURGEON

    Mr. Spurgeon. Thank you, 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 2009 
budget request for the Department of Energy's Office of Nuclear 
Energy.
    Our Nation's strength and prosperity is built on our 
security and the availability of reliable sources of energy. A 
cornerstone to these goals of continued economic growth and a 
sustainable energy future is nuclear power.
    The Office of Nuclear Energy's budget request supports the 
near-term expansion of safe, reliable, carbon-free nuclear 
power and the development of advanced nuclear technologies now 
and into the future.
    It is significant to note that this administration has 
increased its funding request for nuclear energy every year, 
and in total, the fiscal year 2009 request represents a 330 
percent increase in funding for nuclear energy since President 
Bush took office 7 years ago.
    We can take some pride in this increase, but from a 
historical perspective, our total budget request for 2009 is 
less in absolute dollars than the resources we were devoting to 
nuclear energy the last time I served in government, more than 
30 years ago in the Ford administration.
    In constant dollars, today's budget is about one-third of 
the budget we prepared in 1976. In fiscal year 2009, a total of 
$1.4 billion is requested for nuclear energy activities, 
including $487 million for the Mixed Oxide Fuel Fabrication 
Facility.
    I would now like to take just a moment to highlight our 
program areas and their corresponding budget requests. In 
fiscal year 2009, the President's budget requests $241.6 
million for Nuclear Power 2010, to support industry cost-shared 
near-term technology development and regulatory demonstration 
activities focused on enabling an industry decision to build a 
new nuclear power plant by 2010.
    To this end, the program will continue to support industry 
interactions with the Nuclear Regulatory Commission on new 
plant license applications as well as first-of-a-kind design 
finalization for standardized reactor designs.
    The request also supports the issuance of conditional 
agreements for standby support in fiscal 2009.
    This budget request also includes $301.5 million for the 
Advanced Fuel Cycle Initiative in support of the Global Nuclear 
Energy Partnership. In fiscal 2009, the request supports 
research and development on fuel cycle technologies that will 
support the economic and sustained production of nuclear energy 
while minimizing waste and satisfying requirements for a 
controlled, more proliferation-resistant nuclear materials 
management system.
    The request also supports ongoing international activities 
to establish a framework for ensuring a reliable international 
fuel supply and the availability of grid-appropriate reactors.
    Additionally, this budget requests $70 million for the 
Generation IV Program. This request supports critical research 
and development to achieve design goals that make the Next 
Generation nuclear plant licensable, sustainable, and economic. 
The Generation IV request also supports component and materials 
aging and degradation R&D that will provide the basis for 
supporting the extension of the current operating license 
period for existing nuclear reactors and will also enable the 
design of advanced reactor plants with longer operating 
lifespans.
    A total of $16.6 million is requested for the Nuclear 
Hydrogen Initiative to support research and development on 
enabling technologies, nuclear-based hydrogen production 
technologies, and technologies that will apply heat from 
Generation IV nuclear energy systems to produce hydrogen.
    Finally, $222 million is requested to maintain and operate 
the Department's unique nuclear facilities and infrastructure 
at Idaho National Laboratory, Los Alamos National Laboratory, 
and Oak Ridge National Laboratory. Included in the fiscal year 
2009 requests under Other Defense Activities is $487 million 
for activities associated with the continued construction of 
the Mixed Oxide Fuel Fabrication Facility and $78 million for 
sitewide safeguards and security activities at the Idaho 
National Laboratory.
    I would also like to note the fiscal year 2009 budget 
request continues our commitment to fostering the expansion of 
nuclear engineering programs at our universities. We have 
committed to designating 20 percent of funds appropriated to 
our R&D programs for work to be performed at universities at 
the level set forth in the President's budget. Twenty percent 
represents almost $77 million for this work.

                           PREPARED STATEMENT

    Mr. Chairman, this concludes my opening statement. I would 
be pleased to answer any questions.
    Thank you.
    Senator Dorgan. Secretary Spurgeon, thank you very much for 
your testimony.
    [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 today to discuss the 
President's fiscal year 2009 budget request for the Department of 
Energy's (DOE) Office of Nuclear Energy.
    Our Nation's strength and prosperity is built on our security and 
the availability of reliable sources of energy. The President's $25 
billion fiscal year 2009 budget request for the Department aggressively 
addresses the growing demand for affordable, clean, and reliable energy 
and helps preserve our national security by working to further our 
energy security. A cornerstone to the goals of continued economic 
growth and a sustainable energy future is nuclear power. The Office of 
Nuclear Energy's budget request ambitiously supports the near-term 
expansion of safe, reliable and carbon-free nuclear power and the 
development of advanced nuclear technologies now and into the future. 
It is significant to note that this administration has increased its 
funding request for nuclear energy in every year, and in total, the 
fiscal year 2009 request represents a 330 percent increase in funding 
for nuclear energy since President Bush took office 7 years ago. In 
fiscal year 2009, a total of $1.4 billion is requested for nuclear 
energy activities including $487 million for the Mixed Oxide Fuel 
Fabrication Facility.
    The President's commitment to nuclear power stems from its role as 
the only viable near-term option for producing significant amounts of 
emissions-free, baseload electricity. The expansion of nuclear power 
will play a key role in our decisions to find viable solutions to 
address the challenges posed by greenhouse gas emissions, climate 
change, and energy security while promoting a vibrant economy.
    Today, 104 nuclear reactors generate nearly 20 percent of America's 
electricity and account for nearly 70 percent of electricity produced 
from non-emitting sources. Last month, the Nuclear Energy Institute 
reported that U.S. reactors produced 807 billion kilowatt hours of 
electricity in 2007--enough to power more than 72 million homes for a 
year. That total surpasses the previous record high of 788.5 billion 
kilowatt hours in 2004. However, for nuclear power to maintain its role 
in our energy supply, it must grow. To sustain nuclear power's current 
20 percent share, 40 to 45 new reactors must be built by 2030.
    Worldwide, 31 countries operate 439 reactors totaling 372 GWe of 
electricity capacity. Thirty-four new nuclear power plants are under 
construction worldwide, and when completed, will add an additional 28 
GWe of new electricity. This new construction is taking place or being 
considered in every major region in the world including Africa, Asia 
and the Indian subcontinent, Europe, the Middle East, South America, 
and North America.
    We have recently seen projections that anticipate 55 total 
countries will operate 630 reactors totaling approximately 630 GWe by 
2030. Potentially, a total of 86 countries could have nuclear reactors 
by 2050. Internationally, nuclear power is moving forward at a rapid 
pace with each month seemingly bringing new, significant announcements.
    Nuclear power's ongoing expansion around the world requires us to 
address the used fuel and proliferation challenges that confront the 
global use of nuclear energy. To ensure that the United States plays a 
significant role in global nuclear energy policy, we must foster a 
robust domestic nuclear research and development program that maintains 
a cutting-edge nuclear technology infrastructure, and encourage 
international actions that support reliable nuclear fuel services as a 
viable option for countries that may otherwise consider the development 
and deployment of enrichment and reprocessing technologies. To meet 
these challenges, the President initiated the Global Nuclear Energy 
Partnership (GNEP). The domestic component of GNEP promotes the 
accelerated development and deployment of advanced fuel cycle 
technologies, while the international component encourages cooperation 
among States that share the common vision of the necessity of the 
expansion of nuclear energy for peaceful purposes worldwide in a safe 
and secure manner.
    We have made marked progress in every one of our program areas, but 
much remains to be done. Our fiscal year 2009 budget request moves us 
in the right direction, allowing the Department and the Office of 
Nuclear Energy to take the lead in spurring the nuclear renaissance in 
the United States. I would now like to take the time to highlight our 
program areas and their corresponding budget requests.
                           nuclear power 2010
    A key component of our work and one of our most successful programs 
at the Department of Energy is the Nuclear Power 2010 program or NP 
2010. This program was initiated by President Bush in 2002 and has 
produced significant results toward its goal of reducing the technical, 
regulatory, and institutional barriers to the deployment of new nuclear 
power plants. DOE and the President have increased our commitment to 
cross the finish line by nearly doubling its 2009 budget, calling on 
Congress to provide $241.6 million for NP 2010 to help ensure this 
important program can complete its work.
    NP 2010 supports industry through cost-sharing near-term technology 
development and regulatory demonstration activities focused on enabling 
an industry decision to build a new nuclear plant by 2010.
    Of the six Construction and Operation License (COL) applications 
that have been submitted to the Nuclear Regulatory Commission (NRC), 
five COL applications have been officially accepted for review by the 
NRC. And of these five, two applications--TVA's application for two 
Westinghouse AP1000 reactors at the Bellefonte site in Alabama, and 
Dominion Energy's application for a General Electric-Hitachi Economic 
Simplified Boiling Water Reactor at the North Anna site in Virginia--
were developed through the NP 2010 cost-share program. In total, the 
NRC expects to receive 20 COL applications for 31 new reactors by 17 
different utility companies. Of these 20 COL applications, 8 will 
reference either the Bellefonte or North Anna license applications. 
This simplification in the licensing process is expected to reduce the 
license application and review time these reference COLAs take by up to 
50 percent.
    Three early site permits have been approved for Exelon's Clinton 
site in Illinois, Entergy's Grand Gulf site in Mississippi, and the 
North Anna site, all a part of the NP 2010 cost share program, and a 
fourth ESP permit is pending. In addition, two new reactor design 
certifications have been approved by the NRC, the ABWR and the AP1000, 
and DOE is continuing with on-going first-of-a-kind design finalization 
activities for the standardized AP1000 and ESBWR designs, including: 
preparation of engineering analyses and calculations, design criteria 
documents, and total cost and schedule estimates necessary for an 
industry purchase of a new nuclear plant.
    The NP 2010 program will continue to develop generic application 
preparation guidance for 15 COL applications expected in 2008 to help 
resolve regulatory issues that could potentially delay or derail NRC 
approval.
                advanced fuel cycle initiative and gnep
    President Bush announced the Global Nuclear Energy Partnership 
(GNEP) as part of his Advanced Energy Initiative in February 2006. The 
Advanced Fuel Cycle Initiative (AFCI) is the domestic technology 
development and deployment component of GNEP. The AFCI program aims to 
develop and demonstrate advanced fuel cycle technologies for recycling 
used reactor fuel to develop an integrated used fuel recycling plan, 
and support on-going research efforts with the goal of reducing the 
amount of material that needs disposal in a geologic repository and 
maximizing our use of energy resources.
    In effort to further this important work, our budget request 
includes $301.5 million in fiscal year 2009 funding for AFCI. This 
request supports research and development activities that will advance 
the economic and sustained production of nuclear energy while reducing 
waste and satisfying requirements for a controlled nuclear materials 
management system that helps strengthen the nuclear nonproliferation 
regime. The request also supports on-going international activities to 
establish a framework for ensuring reliable international fuel services 
and the availability of grid-appropriate reactors, and the continued 
utilization of industry for schedule, cost, and technology developments 
for eventual recycling facility deployment.
    Long-term goals of AFCI/GNEP include the partitioning of used fuel 
and recycling of long-lived radioactive isotopes for destruction 
through transmutation in liquid metal-cooled fast neutron spectrum 
reactors for actinide consumption and nuclear resource sustainability
    AFCI/GNEP funding also provides support for a large number of 
universities involved in fuel cycle research and development, which 
both ensures that the United States has the intellectual capital needed 
to sustain our nuclear fuel cycle for the future and provides the 
important research needed for today's fuel cycle activities. Recycling 
used nuclear fuel rather than permanently disposing of it in a 
repository would result not only in utilizing more of the energy, but 
would also reduce the amount of high-level waste that needs disposal in 
a repository, thereby greatly enhancing the potential capacity of any 
geological repository. This increased efficiency in the fuel supply 
could ensure that even with the expansion of nuclear energy, the 
potential capacity of any geological repository would be greatly 
enhanced.
                             generation iv
    The Generation IV program is focused on very high temperature 
reactor technologies for use in a Next Generation Nuclear Power Plant 
(NGNP) to produce electricity, process heat, and hydrogen. Generation 
IV also is readying technologies that will further improve the 
economics and safety performance of existing Light-Water Reactor and 
advanced Generation IV reactor concepts.
    The fiscal year 2009 budget request includes $70 million for the 
Generation IV program. 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.
    Additionally, this request supports component and material aging 
and degradation research and development that will provide the basis 
for extending the operating license period for existing nuclear 
reactors beyond 60 years, and will also enable the design of advanced 
reactor concept plants with longer operating life spans.
                          hydrogen initiative
    Nuclear energy has the potential to produce large quantities of 
hydrogen efficiently without producing greenhouse gases and could play 
a significant role in hydrogen production for transportation and 
industrial sectors. Considerable progress in hydrogen combustion 
engines and fuel cells is bringing hydrogen-powered transportation 
close to reality. The goal of the Nuclear Hydrogen Initiative (NHI) is 
to demonstrate hydrogen production technology at increasingly larger 
scales through the use of nuclear energy that would be technically and 
economically suited for commercial deployment in concert with a nuclear 
power plant.
    A total of $16.6 million has been requested for the NHI to continue 
hydrogen production systems operation and testing, evaluation of 
process improvements, and assessment of long-term process stability, 
operability, and component durability. Furthermore, results from the 
integrated laboratory-scale experiments will be analyzed to identify 
cost drivers with an end goal of supporting a hydrogen technology 
selection by 2011.
                           nuclear facilities
    The Department of Energy supports nuclear science and technology 
through one of the world's most comprehensive research infrastructures. 
The Office of Nuclear Energy has requested $222 million to maintain and 
operate infrastructure at Idaho National Laboratory (INL), Los Alamos 
National Laboratory (LANL), Brookhaven National Laboratory (BNL), and 
Oak Ridge National Laboratory (ORNL). A total of $104.7 million is 
dedicated to Idaho National Laboratory's facilities management. INL 
conducts science and technology research across a wide range of 
disciplines, INL's core missions include: development of advanced, next 
generation fuel cycle and reactor technologies; promotion of nuclear 
technology education, and applying technical skills to enhance our 
Nation's security.
    Additionally, $38.7 million is requested to maintain a wide range 
of nuclear and radiological facilities and their associated 
infrastructures in an operational, safe, secure, and environmentally 
compliant manner at LANL, BNL, and ORNL. This infrastructure supports 
national priorities, including the provision of radioisotope power 
systems for national security uses and space exploration.
                        other defense activities
    Included in the Office of Nuclear Energy fiscal year 2009 request, 
under Other Defensive activities, is $487 million for activities 
associated with the continued construction of the Mixed Oxide Fuel 
Fabrication Facility and $78.8 million for site-wide safeguards and 
security activities at the Idaho National Laboratory to protect the 
assets and infrastructure 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.
                           university funding
    Our fiscal year 2009 budget request continues our commitment to 
fostering the expansion of nuclear engineering programs at our 
universities and research institutions. Specifically, the budget 
request for the Office of Nuclear Energy explicitly states that we 
``will continue to support R&D activities at universities and research 
institutions through competitive awards focused on advancing nuclear 
energy technologies,'' and we have committed to ``designate 20 percent 
of funds appropriated to its R&D programs for work to be performed at 
university and research institutions.'' These funds will support basic 
research and mission-specific applied R&D activities, as well as human 
capitol development activities, such as fellowships and infrastructure 
and equipment upgrades for university-based research reactors and 
laboratories. At the level set forth in the President's budget request 
for fiscal year 2009, 20 percent provides almost $77 million for this 
work. This commitment of 20 percent of appropriated funds will serve as 
a catalyst for success in achieving the objectives of the President's 
American Competitiveness Initiative and the America COMPETES Act.
    This concludes my prepared statement. I would be pleased to answer 
any questions you may have.

    Senator Dorgan. I want to recognize Secretary Kolevar. The 
Office of Electricity is an important office, and we appreciate 
the work you are doing. I was pleased to be the first person to 
announce your confirmation when you were in North Dakota for a 
meeting with a number of interests in August 2007, but thank 
you very much for your work, Mr. Secretary.
    Why don't you proceed?

         Office of Electricity Delivery and Energy Reliability

STATEMENT OF HON. KEVIN M. KOLEVAR, ASSISTANT SECRETARY 
            FOR ELECTRICITY DELIVERY AND ENERGY 
            RELIABILITY
    Mr. Kolevar. Thank you, Mr. Chairman. Mr. Chairman and 
Ranking Member Domenici, members of the committee, thank you 
for the opportunity to testify on the President's fiscal year 
2009 Budget Request for the Office of Electricity Delivery and 
Energy Reliability.
    Our office's mission is to lead national efforts to 
modernize the electric delivery system, enhance the security 
and reliability of America's energy infrastructure, and 
facilitate recovery from disruptions to energy supply.
    These functions are vital to the Department of Energy's 
strategic goal of protecting our national and economic security 
by promoting a diverse supply and delivery of reliable, 
affordable, and environmentally responsible energy.
    The President's budget requests $134 million for OE, a 17 
percent increase from the fiscal year 2008 request. This 
includes $100.2 million for research and development 
activities, $14.1 million for operations and analysis 
activities, and $19.7 million for program direction.
    Today, the availability of and access to electricity is 
something that can be easy to take for granted. And while more 
than a few people cannot describe what it is or where it comes 
from, electricity is vital to nearly every aspect of our lives, 
from powering our electronics and heating our homes to 
supporting transportation, finance, food, and water systems.
    The Energy Information Administration has estimated that by 
the year 2030, U.S. electricity consumption will be almost 35 
percent higher than it was in 2009. This indicates a growing 
economy but it also promises a significant amount of new demand 
on the electricity infrastructure, an infrastructure that is 
already stressed and aging. This means that we need to focus 
our attention on reliability.
    Climate change is also affecting electric industry 
investments. Uncertainty in climate change legislation and 
policy is limiting investment in generation from fossil fuels, 
coal in particular, and is stimulating investment in 
renewables, such as wind. However, intermittent resources, such 
as renewables, require energy storage or other balancing 
technologies, advanced communications, and sophisticated 
modeling to maximize penetration without affecting the 
reliability and efficiency of our electric system.
    OE's fiscal year 2009 budget request reflects a commitment 
to ensuring this reliability by supporting the research of 
breakthrough technologies, such as those associated with the 
Smart Grid and energy storage. With $5 million dedicated solely 
to Smart Grid development, a $6.6 million increase in the 2009 
request for energy storage, and more than $88 million dedicated 
to other R&D work, the President's request reaffirms the effort 
to ensure increased reliability through research and 
development.
    Modernizing the grid through technical innovation, however, 
represents just one side of the effort needed to tackle 
electricity reliability problems. Building the elaborate 
network of wires and other facilities needed to deliver energy 
to consumers reliably and safely is perhaps one of our greatest 
challenges. This is especially true since renewable energy 
promises to become a substantial generation source.
    Since sources of renewable energy are often found in remote 
locations, we simply have to develop the capacity to deliver it 
to load centers. Basically, if we want to use more renewable 
energy, we need more wires.
    Accordingly, in 2009, the office will continue work to 
implement the major electricity infrastructure provisions of 
the Energy Policy Act of 2005. Consistent with the law, we will 
produce the second national transmission congestion study by 
August of next year. We will begin scoping for the designation 
of energy transport corridors in the eastern United States, and 
we will implement the Department's responsibilities to 
coordinate Federal authorizations for the siting of 
transmission facilities.
    However, energy security and reliability will not be solved 
solely through the modernization and expansion of our energy 
infrastructure. We also need to ensure energy delivery by 
keeping it secure and responding quickly when it is disrupted.
    In fiscal year 2009, we will work to identify systemwide 
vulnerabilities in power and fuels at key domestic and select 
foreign energy sector assets and develop plans to secure and 
reconstitute those assets. We will help to develop tools and 
mitigation solutions to help energy sector owners and operators 
improve resiliency and implement best and effective practices 
and provide solutions to State and local governments to address 
energy supply and infrastructure challenges and to exercise 
those plans.

                           PREPARED STATEMENT

    I believe our work in OE is vital to the Nation's energy 
health and the increase in the President's request reflects 
this. Federal investment in the research, development, and 
deployment of new technology, combined with innovative policies 
and infrastructure investment, is essential to improving grid 
performance and ensuring our energy security, economic 
competitiveness, and environmental well-being.
    This concludes my statement, Mr. Chairman. I look forward 
to answering your and the committee's questions.
    [The statement follows:]
              Prepared Statement of Hon. Kevin M. Kolevar
    Mr. Chairman and members of the committee, thank you for this 
opportunity to testify on the President's fiscal year 2009 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 2009 budget includes $134 million for 
OE in fiscal year 2009, which is almost a 17 percent increase from the 
fiscal year 2008 request. This includes $100.2 million for Research and 
Development activities, $14.1 million for Operations and Analysis 
activities, and $19.7 million for Program Direction. My testimony on 
the administration's fiscal year 2009 budget request reflects a 
comparison to the administration's fiscal year 2008 budget request.
    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 consumption will be almost 35 percent 
higher than it was in 2009. This indicates a growing economy, but it 
also promises a significant amount of new demand on the electricity 
infrastructure--an infrastructure that is already stressed and aging. 
This means that we need to focus our attention on reliability.
    Climate change is also affecting electric industry investments. The 
uncertainty in climate change legislation and policies is limiting 
investment in generation from fossil fuels and is stimulating 
investment in renewables such as wind. However intermittent resources 
such as renewables require energy storage or other balancing 
technologies, advanced communications and sophisticated modeling to 
maximize penetration without affecting the reliability and efficiency 
of our electric system.
    One of the Department's strategies for reducing our dependence on 
foreign oil is increased electrification by transitioning to electric 
vehicles also known as plug-in hybrids. Plug-in hybrids could provide a 
great opportunity if we begin now to enable smart grid features such as 
enhanced intelligence and control.
    Title 13 and section 641 of the Energy Security and Independence 
Act of 2007 highlights the need for the development of a modernized 
grid. Title 13 addresses the need for a Smart Grid, which is a 
transmission and distribution network modernized with the latest 
digital and information technologies for enhanced operational 
monitoring, control, and intelligence.
    OE's fiscal year 2009 budget request also reflects a commitment to 
ensuring reliability by supporting research of breakthrough 
technologies such as those associated with a Smart Grid and Energy 
Storage. With $5 million dedicated solely to Smart Grid development, a 
$6.6 million increase in the fiscal year 2009 request for Energy 
Storage, and more than $88 million dedicated to other R&D work, the 
President's fiscal year 2009 budget request reaffirms the effort to 
ensure increased reliability through R&D.
    Modernizing the grid through technical innovation, however, 
represents just one side of the effort needed to tackle electricity 
reliability problems. Building the elaborate network of wires and other 
facilities needed to deliver energy to consumers reliably and safely is 
perhaps one of our greatest challenges today. This is especially true 
since renewable energy promises to become a substantial generation 
source. Since sources of renewable energy are often found in remote 
locations, we simply have to develop the capability to deliver it to 
load centers. Basically, if we want to use more renewable energy, we 
need more wires.
    However, energy security and reliability will not be solved by 
focusing solely on expanding our modernization and expansion of our 
energy infrastructure. We also need to ensure energy delivery by 
keeping it secure and responding quickly when it is disrupted. DOE is 
the lead agency when Federal response is required for temporary 
disruptions in energy supply to ensure a reliable and secure 
electricity infrastructure for every American. We will use fiscal year 
2009 funds to apply technical expertise to ensure the security, 
resiliency and survivability of key energy assets and critical energy 
infrastructure at home and abroad.
    The reliability and energy security effort is both multifaceted and 
necessary, and the President's request reflects this.
                        research and development
    Our High Temperature Superconductivity activities continue 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.
    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 activities propose an 
increase of $6.6 million in fiscal year 2009. This will support the 
development of new and improved energy storage devices and systems at 
utility scale, which will be incorporated in DOE's Basic Energy Science 
basic research results. We will also work to achieve substantial 
improvements in seeking lifetime, reliability, energy density, and cost 
of energy storage devices. Through this, highly leveraged prototype 
testing and utility demonstration projects will be expanded with State 
energy office participation focusing on areas of greatest utility need. 
The increase will also serve to 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 activities will 
allocate $5 million in fiscal year 2009 to develop and demonstrate 
Smart Grid technologies for an integrated and intelligent electric 
transmission and distribution network. $28.3 million will be used to 
demonstrate distributed energy systems as a resource to decrease peak 
electric load demand, increase asset utilization, and defer electric 
system upgrades. These funds will also be used to develop renewable 
energy grid integration technologies to facilitate increased deployment 
of renewables and other clean energy sources.
                    permitting, siting, and analysis
    With hopes of creating a more robust transmission system, our 
fiscal year 2009 budget request asks for $6.5 million for the 
Permitting, Siting and Analysis office. This is an $804,000 increase 
from the fiscal year 2008 budget request, and it will help to implement 
major electricity infrastructure provisions such as section 368 of 
EPACT and section 216(h) of the Federal Power Act. Further, work will 
be done to provide technical assistance to State electricity regulatory 
agencies and to electric utilities as they implement their energy 
efficiency initiatives.
    In fiscal year 2009, we will also be working to issue the second 
national transmission congestion study. In this process, we will be 
consulting with States and other interested parties on congestion 
metrics and data, and analyzing current historical congestion by 
region. Before the study is released, we will present draft conclusions 
of data analysis for public review and input.
    The implementation of section 368 of EPACT requires the designation 
of rights-of-way corridors for the transport of oil, natural gas, 
hydrogen, and electricity 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. We have published a draft 
Programmatic Environmental Impact Statement for the designation of the 
energy transport corridors, solicited public comments, and conducted 15 
public meetings, and the final PEIS is expected to be published in 
fiscal year 2008. We are preparing to begin scoping for the designation 
of energy transport corridors in the eastern States, Alaska, and 
Hawaii. The EIS for the remaining designations is expected before the 
end of fiscal year 2009.
    DOE is preparing regulations to implement its responsibilities 
under the new section 216(h) of the Federal Power Act to coordinate 
with eight other Federal agencies to prepare initial calendars, with 
milestones and deadlines for the Federal authorizations and related 
reviews required for the siting of transmission facilities. DOE will 
maintain a public website that will contain a complete record of 
Federal authorizations and related environmental reviews and will work 
closely with the lead Federal NEPA agency to encourage complete and 
expedited Federal reviews.
             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 Office of 
Infrastructure Security and Energy Restoration (ISER) in 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 2009 
request is for $7.6 million in funding for Infrastructure Security and 
Energy Restoration within the operations and analysis subprogram, which 
is a $1.8 million increase from the fiscal year 2008 request.
    In fiscal year 2009, ISER will work to identify system-wide 
vulnerabilities in power, fuels and other key energy sector assets and 
develop plans to secure and reconstitute those assets. We will help to 
develop tools and mitigation solutions to help energy sector owners and 
operators improve resiliency and implement best and effective 
practices, and provide solutions to State and local governments to 
address energy supply and infrastructure challenges. Further, we will 
continue to conduct vulnerability assessments of key domestic and 
selected foreign energy facilities in close collaboration with 
appropriate interagency and industry partners. And through the 
initialization of selected pilot projects, we will work to exercise the 
integration of regional, State and local energy resiliency and 
emergency response preparedness.
    We help to facilitate energy restoration efforts at the State and 
local level through cooperation and partnerships with local utility 
providers in support of the National Response Framework. In fiscal year 
2009, we will work to create detailed Concept of Operations Plans for 
energy response utilizing an Integrated Planning System.
                               conclusion
    As you have heard, our work in OE is vital to our Nation's energy 
health and the increase in the President's request reflects this. 
Through our research and development of technologies such as power 
electronics, high temperature superconductivity, and energy storage, we 
will work to lower costs, increase 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.

    Senator Dorgan. Secretary Kolevar, I thank you very much.
    Mr. Slutz, you are the Acting Assistant Secretary, I 
believe, and we appreciate very much your being here today to 
describe your programs, and as I indicated in my opening 
statement, I'm going to ask a number of questions about the 
fossil energy accounts, but why don't you proceed? We will then 
have the panel ask questions of the three witnesses.

                        Office of Fossil Energy

STATEMENT OF JAMES SLUTZ, ACTING PRINCIPAL DEPUTY 
            ASSISTANT SECRETARY FOR FOSSIL ENERGY
    Mr. Slutz. 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 proposed fiscal year 2009 budget.
    Fossil Energy's budget request of $1.127 billion for fiscal 
year 2009 is one of the largest Fossil Energy requests made by 
this administration. These funds will allow FE to fulfill its 
mission to create public benefits to supply enhancing U.S. 
economic, environmental, and energy security.
    Achieving this mission means developing technological 
capabilities that can dramatically reduce carbon emissions to 
achieve near-zero atmospheric emission power production, 
thereby meeting the President's priority of expanding our 
climate change options with higher efficiency power plants to 
reduce carbon dioxide emissions, the near-zero emissions power 
plants, known as FutureGen, that link high efficiency with 
carbon sequestration.
    Fossil Energy is also responsible for the management and 
operation of the Nation's petroleum reserves, most notably the 
Strategic Petroleum Reserve, which provides strategic and 
economic security against disruptions in oil supplies with an 
emergency stockpile of crude oil.
    More specifically, the proposed fiscal year 2009 coal 
budget request of $648 million focuses on technology for 
allowing the United States to maintain its technological lead 
in coal use in a way that will not raise climate concerns. This 
is the largest budget request for coal research and development 
and demonstration in over 25 years.
    The budget focuses on advancing the technology aimed at 
reducing costs and enhancing the efficiency of power plants 
with carbon capture. It also focuses on the science and 
technology to assure the safe and effective long-term geologic 
storage of carbon dioxide.
    The budget includes $406 million for coal R&D, including 
in-house research and development, $85 million for the Clean 
Coal Power Initiative, and $156 million for the New Approach to 
the FutureGen Program. The fiscal year 2009 request 
demonstrates the administration's continuing commitment to 
domestically produced energy from coal.
    The $344 million in the fiscal year 2009 budget request for 
the Strategic Petroleum Reserve, an 84 percent increase over 
fiscal year 2008, will allow for expansion of facilities at two 
existing storage sites and begin the development of a new site 
in fiscal year 2009. This expansion is in accordance with the 
provision in EPACT for an expansion of reserve capacity from 
750 million to 1 billion barrels of oil and, with the 
President's recommendation and pending legislation, to further 
increase the reserve's capacity to 1.5 billion barrels of oil.
    Fossil Energy research and development is directed at 
electric power generation from coal----
    Senator Dorgan. Secretary Slutz, could you hold a moment?
    Senator Domenici. You mentioned how much was being spent on 
coal R&D and you talked about how it was a good program.
    Where do we do most of the research that we're talking 
about and who's the head of the research to try to make the 
change to coal so it's more usable?
    Mr. Slutz. We have a coal program here that's headed by Dr. 
Victor Der at headquarters, but then that program is 
implemented through the National Energy Technology Laboratory 
and Carl Bauer is the director of the National Energy 
Technology Laboratory.
    Senator Domenici. And where is that laboratory?
    Mr. Slutz. That laboratory is located in Pittsburgh and 
Morgantown, co-located with other facilities in Tulsa and 
Albany, Oregon.
    Senator Domenici. Mr. Chairman, thank you, sir.
    Senator Dorgan. You may proceed.
    Mr. Slutz. Fossil Energy research and development is 
directed at electric power generation from coal, our most 
abundant and lowest cost domestic fossil fuel.
    This research supports many presidential initiatives and 
priorities, including the Coal Research Initiative, Hydrogen 
Fuel Initiative, Climate Change Technology Program, and 
FutureGen.
    I'll highlight a few of the R&D program components, 
beginning with FutureGen. FutureGen promotes advanced full-
scale integration of integrated gasification compliance cycle 
and carbon capture and storage technology to produce electric 
power from coal with near-zero atmospheric emissions.
    FutureGen is being restructured in a way that accelerates 
the commercial use of near-zero emissions technology. The new 
approach proposes multiple commercial-scale demonstration power 
plants in place of the original plan's single R&D facilities. 
Each plant would produce electricity and sequester an estimated 
annual 1 million metric tons of carbon dioxide.
    FutureGen receives almost $82 million funding increase over 
last year in the 2009 budget proposal.
    The Clean Coal Power Initiative, or CCPI, is a cooperative 
cost-share program between the government and industry to 
demonstrate advanced coal-based power generation technologies. 
The budget request of $85 million for CCPI in fiscal year 2009 
will complete the third round of the project solicitations, 
proposed evaluations, and project selections of advanced 
technology systems that capture carbon dioxide for 
sequestration for beneficial reuse.
    The fiscal year 2009 budget request of $149 million for 
carbon sequestration, one of the key components of our program, 
is a significant increase over the fiscal year 2008.
    Senator Domenici. Would you say that again? I missed the 
last portion of that.
    Mr. Slutz. Our 2009 budget request just for carbon 
sequestration, the carbon storage component, is $149 million. 
That's an increase of $30 million over the $119 million 
provided in fiscal year 2008.
    Senator Domenici. Okay.
    Mr. Slutz. The increase should help develop economical ways 
to separate and permanently sequester greenhouse gas emissions 
from the combustion of fossil fuels.
    Consistent with recent budget requests, the petroleum, 
which is oil technology and natural gas technologies research 
and development programs are being proposed for termination in 
2009.
    The fiscal year 2009 budget request of $344 million for the 
Strategic Petroleum Reserve would continue preparations for 
doubling the current 727-million-barrel capacity and increasing 
the drawdown capability from 4.4 million barrels per day to 
more than 6 million barrels per day. Increasing the capacity 
required--requires expanding two existing sites and adding one 
new site.
    That concludes a brief overview of Fossil Energy's wide-
ranging R&D and petroleum reserve management responsibilities.

                           PREPARED STATEMENT

    I'd like to emphasize, by reevaluating, refining and 
refocusing our programs and funding the most cost-effective and 
beneficial projects, the fiscal year 2009 budget submission 
meets the Nation's critical needs for energy, environment, and 
national security.
    Mr. Chairman, that concludes my prepared statement, and I'm 
happy to answer any questions.
    [The statement follows:]
                   Prepared Statement of James Slutz
    Mr. Chairman, members of the committee, it is a pleasure for me to 
appear before you today to present the Office of Fossil Energy's (FE) 
proposed budget for fiscal year 2009.
    FE's budget request of $1.127 billion for fiscal year 2009 is one 
of the largest FE requests made by this administration. These funds 
will allow FE to fulfill its mission: to create public benefits by 
enhancing U.S. economic, environmental, and energy security.
    Achieving this mission means developing technological capabilities 
that can dramatically reduce carbon emissions to achieve near-zero 
atmospheric emissions power production, thereby meeting the President's 
priority of expanding our climate change options with higher-efficiency 
power plants to reduce carbon dioxide and other emissions, including 
through FutureGen demonstration plants.
    FE is also responsible for the management and operation of the 
Nation's petroleum reserves, most notably the Strategic Petroleum 
Reserve, which provides strategic and economic security against 
disruptions in oil supplies with an emergency stockpile of crude oil.
    More specifically, the proposed fiscal year 2009 coal budget 
request of $648 million focuses on technology allowing the United 
States to maintain its technological lead in coal use in a way that 
addresses climate concerns. This is the largest budget request for coal 
research development and demonstration in over 25 years and leverages a 
nearly $1 billion investment in Clean Coal Technology.
    The budget includes $406.5 million for Coal R&D including in-house 
R&D $85 million for the Clean Coal Power Initiative and $156 million 
for a new approach to the FutureGen program.
    The fiscal year 2009 request demonstrates the administration's 
continuing commitment to domestically produced energy from coal. 
Combined with the required private sector cost sharing contribution as 
directed by the Energy Policy Act of 2005 (EPACT), this budget will 
bring the total public and private investment in coal technology 
leveraged by FE to nearly $1 billion. In addition, the Federal 
Government provides support to advance coal technologies through tax 
incentives for clean coal plants, and through loan guarantees to be 
allocated to various types of coal power and other gasification 
projects.
    The $344 million fiscal year 2009 budget request for the Strategic 
Petroleum Reserve, an 84 percent increase over fiscal year 2008 
approved funding, will allow for expansion activities at two existing 
storage sites and the development of a new site in fiscal year 2009. 
This expansion is in accordance with the provision in EPACT for an 
expansion of reserve capacity from 727 million to 1 billion barrels of 
oil, and with the president's recommendation to further increase the 
reserve's capacity to 1.5 billion barrels of oil.
                 fossil energy research and development
    I will begin the detailed presentation of our proposed budget with 
the work of Fossil Energy Research and Development (FERD), which is 
directed at electric power generation from 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.
    FERD supports many Presidential initiatives and priorities 
including the Coal Research Initiative, Hydrogen Fuel Initiative, and 
FutureGen. FERD also supports the Climate Change Technology Program, 
which is a priority for the Department. The components of the FERD 
program begin with FutureGen.
                               futuregen
    FutureGen promotes advanced, full-scale integration of integrated 
gasification combined cycle (IGCC) and carbon capture and storage 
technology to produce electric power from coal while capturing and 
sequestering carbon dioxide (CO2), resulting in near-zero 
atmospheric emissions coal energy systems. FERD is restructuring 
FutureGen in a way that accelerates the commercial use of carbon 
capture and storage technologies.
    The new approach proposes multiple 300-600 Megawatt (MW) 
commercial-scale demonstration clean coal power plants--as opposed to a 
single, 275 MW R&D facility--each producing electricity and capturing 
and safely sequestering at least an estimated annual 1 million metric 
tons of CO2 from each. FutureGen receives an $81.7 million 
funding increase from fiscal year 2008 in the fiscal year 2009 budget 
proposal.
                      clean coal power initiative
    The Clean Coal Power Initiative (CCPI) is a cooperative, cost-
shared program between the Government and industry to demonstrate 
advanced coal-based power generation technologies. CCPI is now focused 
on projects to help accelerate development and deployment of coal 
technologies that could economically capture carbon dioxide, including 
increasing the efficiency and reliability of carbon capture 
technologies. CCPI allows the Nation's power generators, equipment 
manufacturers, and coal producers to help identify the most critical 
barriers to coal use and the most promising advanced technologies to 
use coal cleanly, affordably, and with higher efficiencies that reduce 
carbon intensity.
    The budget request of $85 million for CCPI in fiscal year 2009 will 
complete the third round of project solicitations, proposal 
evaluations, and project selections of advanced technology systems that 
capture carbon dioxide for sequestration or beneficial reuse.
                             sequestration
    The fiscal year 2009 budget request of $149 million for carbon 
sequestration, one of the key components of the Fuel and Power Systems 
program, is an increase of $30 million over the $119 million provided 
in fiscal year 2008.
    The increase should help develop economical ways to separate and 
permanently store (sequester) greenhouse gas emissions from the 
combustion of fossil fuels. The technologies will help existing and 
future fossil fuel power generating facilities by reducing the cost of 
electricity impacts and also providing protocols for carbon capture and 
storage demonstrations to capture, transport, store, and monitor the 
CO2 injected in geologic formations.
    The increase will support site selection and characterization, 
regulatory permits, community outreach, and completion of site 
operation plans for large-scale, geologic, carbon storage tests. It 
will also fund large-scale injections and remaining infrastructure 
development. The additional funding also permits work on capture 
projects and initiates an effort to prepare for and augment the 
monitoring, measurement and verification being conducted in the Phase 
III tests.
                                hydrogen
    The budget request of $10 million in fiscal year 2009 for hydrogen 
from coal--a clean fuel for future advanced power technologies such as 
fuel cells and transportation systems--is down nearly $15 million from 
fiscal year 2008. The decrease is due to the elimination of integrated 
coal-biomass processing for carbon emissions research (which is 
generally advanced through the gasification program), elimination of 
substitute natural gas and coal-to-liquids production research (which 
are mature industries and not the high-return investment that FE 
focuses on), and a right-sizing of the effort level for early 
engineering and design studies on hydrogen production modules in near-
zero emission coal plants.
                        gasification technology
    The Integrated Gasification Combined Cycle (IGCC) budget request 
for fiscal year 2009 is $69 million, a $15.5 million increase over 
fiscal year 2008. The IGCC program develops advanced gasification-based 
technologies aimed at reducing the cost of coal-based IGCC plants, 
improving thermal efficiency, and achieving near-zero atmospheric 
emissions of all pollutants. These technologies will be an integral 
part of the carbon capture and storage demonstration projects.
                               fuel cells
    Flexible fuel cell systems that can operate in central coal-based 
power systems and with applications for electric utility, industrial 
and commercial/residential markets, receive a funding request of $60 
million in fiscal year 2009--an increase over the fiscal year 2008 
appropriation of $55.5 million. This activity enables the generation of 
highly efficient, cost-effective electricity from domestic coal with 
near-zero atmospheric emissions of carbon and air pollutants in central 
station applications. The technology also provides the technology base 
to permit grid-independent distributed generation applications.
                     oil and natural gas technology
    Consistent with the budget requests for fiscal years 2006, 2007 and 
2008, the Petroleum-Oil Technology and Natural Gas Technologies 
research and development programs are being terminated in fiscal year 
2009.
    The Ultra-Deepwater and Unconventional Gas and Other Petroleum 
Research Fund was created by the Energy Policy Act of 2005 (Public Law 
109-58) as a mandatory program beginning in fiscal year 2007. The 
program is funded from mandatory Federal revenues from oil and gas 
leases. Consistent with the fiscal year 2007 and 2008 budget requests, 
the fiscal year 2009 budget proposes to repeal the program through a 
legislative proposal.
                      strategic petroleum reserve
    The Strategic Petroleum Reserve (SPR) exists to ensure America's 
readiness to respond to severe energy supply disruptions. The Energy 
Policy Act of 2005 directs DOE to fill the SPR to its authorized 1 
billion barrel capacity as expeditiously as practicable. Additionally 
the President has proposed expanding the Reserve's capacity to 1.5 
billion barrels.
    The fiscal year 2009 budget request of $344 million would continue 
preparations for doubling the current 727 million barrel capacity up to 
1.5 billion barrels and increasing the drawdown capability from 4.4 
million barrels per day (MMB/day) to more than 6 MMB/day. The 
administration strongly believes that this expansion is necessary to 
protect the economic and energy security of the Nation, given the 
increased risk of disruption that is now apparent in the global oil 
market. Increasing the inventory to 1 billion barrels requires 
expanding two existing sites and adding one new site.
    The fiscal year 2009 budget request reflects completion of land 
acquisition activities for the Richton, Mississippi site in fiscal year 
2008 and the addition of expansion activities at the two existing sites 
and the new site in fiscal year 2009.
                   northeast home heating oil reserve
    The fiscal year 2009 budget request of $9.8 million will fund 
continuing operation of the Reserve and the leasing of commercial 
storage space.
    The President directed DOE in 2000 to establish a Northeast heating 
oil reserve which is capable of assuring a short-term supplement to 
private home heating oil supplies during times of very low inventories 
or in the event of significant threats to immediate energy supplies. 
The 2 million barrel reserve protects the Northeast against a supply 
disruption for up to 10 days, the time required for ships to carry 
heating oil from the Gulf of Mexico to New York Harbor.
                 naval petroleum and oil shale reserves
    The fiscal year 2009 budget request of $19.1 million is slightly 
less than the fiscal year 2008 request of $20.3 million. The decrease 
is due to the completion of the Risk Assessment and Corrective Action 
Studies to determine the cleanup requirements of the Elk Hills site 
(NPR-1) and reductions in operating and facility maintenance costs at 
NPR-3.
    The Naval Petroleum and Oil Shale Reserve (NPOSR) mission is to 
complete environmental remediation activities and determine the equity 
finalization of NPR-1 and to operate NPR-3 until its economic limit is 
reached, while maintaining the Rocky Mountain Oil Field Test Center as 
a field demonstration facility. Because the NPOSR no longer served the 
national defense purpose envisioned in the early 1900s, the National 
Defense Authorization Act for Fiscal Year 1996 (Public Law 104-106) 
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, two of the Naval 
Oil Shale Reserves (NOSR-1 and NOSR-3) were transferred to the 
Department of the Interior's (DOI) Bureau of Land Management, and the 
NOSR-2 site was returned 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). 
Environmental remediation is performed on those facilities which no 
longer have value to either of the missions.
               meeting 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 2009 budget submission is designed to help meet the Nation's 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.

                        POWER OUTAGE IN FLORIDA

    Senator Dorgan. Mr. Slutz, thank you very much.
    Mr. Kolevar, as you know, the recent power outage in south 
Florida disrupted normal life for more than 1 million people 
for a number of hours. The news reports that I read said the 
system worked as it was supposed to, shutting down transformers 
and power units, including two nuclear power sites, and then I 
read later that it was a human error.
    So, how is it the system worked as it was supposed to work? 
I mean tell me about what has happened there.
    Mr. Kolevar. The system did work as it was designed. It was 
human error. The individual took down protective relays at a 
substation during maintenance, attempted to put the relay back 
online without reengaging the protective systems and caused a 
short and a voltage drop within the system that affected Turkey 
Point and, subsequent to Turkey Point's going offline, other 
generation units.
    And the system is designed to try and limit the cascading 
effects of a drop in voltage and certainly the drop of 
generation. The drop in generation, 4,000 megawatts, was felt 
all the way through the system. Operators in New York could see 
that something had happened. They didn't know what it was, but 
they could see that something had happened.
    The reason I make that point is because that, while they 
could see it as far north as New York and probably farther 
north into Canada, the system was able to contain that outage, 
localize it, and Florida Power and Light did an impressive job 
of getting service back on to all of their customers in about a 
3- or 4-hour time frame.

                      STRATEGIC PETROLEUM RESERVE

    Senator Dorgan. Mr. Slutz, in the Office of Fossil Energy, 
there's about a $200 million increase in the fiscal year 2008 
enacted versus the administration's 2009 request. It appears to 
me that about $160 million of that is for the expansion of the 
Strategic Petroleum Reserve. Is that correct?
    Isn't a substantial portion of your increase for the 
increased request for the SPR?
    Mr. Slutz. Correct. About--yes.
    Senator Dorgan. Yes. And you heard me describe why I 
support SPR. I've always supported saving and creating an 
energy security blanket here with Strategic Petroleum Reserve, 
but I just think it is nuts at about $100 a barrel to be 
sticking that oil underground and taking it out of supply. And 
so, to the extent the chairman has the votes on this 
subcommittee, I intend in the chairman's mark to stop this on 
the first day of the next fiscal year. My hope is that I'll be 
able to stop it earlier than that on the floor of the Senate by 
adding it to another piece of legislation.
    We shouldn't be putting 60,000 or 70,000 barrels a day 
today underground, and we shouldn't increase that to 120,000 
barrels a day in the second half of this year. So, I just want 
you to know that, to say that we have a substantial increase in 
the Office of Fossil Energy, when I understand most of that 
increase is in the SPR, building facilities and so on is 
deceiving. My major concern is in the fossil R&D accounts 
because half of this electricity comes from coal, and if we're 
going to be able to use coal in the future, we need to have 
expanded carbon capture and carbon sequestration activities. 
That's going to require a lot of effort and a lot of resources.

                        FOSSIL BUDGET PRIORITIES

    Mr. Slutz, when you talk about increasing the request for 
carbon sequestration by $30 million, I've got to tell you 
that's a drip as opposed to a stream that's needed for us 
because there's an urgency for action.
    We need to figure out how do we capture and how do we 
sequester carbon in order to continue to use coal. I've had 
some really interesting people come in to talk to me. There is 
a Texas demonstration project where they are turning the 
effluents from that plant into chloride, hydrogen, and baking 
soda, and the CO2 from the plant is embedded in the 
baking soda, and they put it in the landfill. That's 
interesting to me.
    I'm going to go see a location within the next couple of 
weeks where they're taking the CO2 and feeding a 
contiguous algae pond, because algae lives on wastewater and 
CO2. They not only consume the CO2 with 
algae, but then they process the algae for a super fuel. So, 
you destroy the CO2, and you produce diesel as a 
result.
    So, a lot of interesting things going on, but in response 
to Senator Domenici's question, I think Carl Bauer is an 
extraordinary resource for us. He's running a great operation 
over there, but we need to do a lot of projects, both in 
research and demonstration and deployment of technologies. 
However, in my judgment, to take most of the increase in your 
Office of Fossil Energy and direct it into SPR doesn't make a 
lot of sense to me.
    We need to be directing that, in my judgment, into fossil 
R&D so that we can use our coal resources in the future in a 
way that captures the carbon and doesn't contribute to global 
warming. Your response?
    Mr. Slutz. Well, I think there are two key components that 
are significant. The Coal Program does have significant 
increases. That was a--the $648 million that is focused, 
proposed for coal research and development, is more than 25 
percent--I think it's a 25 percent increase and that includes--
--
    Senator Dorgan. That includes FutureGen?
    Mr. Slutz. Yes, yes. When you look at the Coal Program and 
break it down, there are both key demonstration projects, which 
include FutureGen and the CCPI Program, and then other very 
important research aspects. And there's about 400--I think $400 
million in the research programs and then--well, $156 million 
for FutureGen and $85 million for CCPI, and the $156 million 
for FutureGen is about--I think I mentioned it was an $80 some 
million increase from previous budgets.
    So, there is significant increase in coal. There is an 
increase--we're proposing about a $171 million in the SPR 
budget for developing new facilities. All but $13 million of 
that $175 million is targeted at increasing from 750 million to 
the 1 billion level which is what was authorized by EPACT.
    There's only $13 million of that $171 million that is 
targeted for the 1 billion to 1.5, and that is for some initial 
environmental impact statement work and some of the analytical 
work needed on site selection. So, just kind of put that in the 
frame of reference that it is incremental steps that are being 
proposed for that.
    Senator Dorgan. I understand that, but resources are 
scarce. In fact, as we give discretion to the Department with 
respect to this process, then we must use them wisely, I mean, 
if you were going to plan a journey with your car some day, and 
you say here's the road I'm taking and then somebody says, 
well, but there's a bridge out halfway through that trip. You 
say, well, it doesn't matter, I'm just going to take this road. 
But when we come to the bridge, we'll just drop off the bridge. 
This is your SPR policy.
    That wouldn't be very smart, and it's not very smart for us 
to say here's the road we're taking with respect to SPR. No 
matter the consequences, no matter the circumstances, no matter 
the price of oil, we're still going to stick it underground.
    I mean, my point is I think there's a need for a pause, a 
1-year pause with a price-cap issue, and I'm going to work on 
that.
    I don't know whether you have described, as Mr. Spurgeon 
has described, a 330 percent increase in his accounts in 7 
years. He smiled broadly as he said it, and I'm sure he feels 
very good about it.
    Have we had a 330 percent increase in the funding for clean 
coal technology and the fossil accounts in the last 7 years?
    Mr. Slutz. I can't answer that question. I mean, I don't 
know the percent increase that we've had or what we had.
    Senator Dorgan. I'm not diminishing Mr. Spurgeon's dramatic 
success, much of which should be attributed to my colleague to 
the left here, but----
    Senator Domenici. Well, I don't have anything to do with 
running the Government.
    Senator Dorgan. No, but, look, we've not been blind here. 
We understand what's been going on.
    Senator Domenici. I thought it was a great priority to get 
nuclear power plants on board and there are.
    Senator Dorgan. We have others that want to ask questions, 
and I want to recognize Senator Domenici, but I just want to 
say this.

                          CARBON SEQUESTRATION

    There isn't a ghost of a chance of us being successful in 
our fossil programs unless we understand that to continue to 
use coal in the future, given what's coming at us and the 
debate on global climate change legislation, unless we decide 
this is urgent. It's going to require significant increases in 
research and also especially in development, because you've got 
to get the commercial-scale development applications to 
understand what technology works and at what cost. Both are 
very important.
    So, as we work on this in this subcommittee, we're going to 
try to find a way to recalculate some of this and make bigger 
investments and bolder investments because we've got to 
continue to use coal, but we have to do it in a manner that 
doesn't injure our environment.
    We're not going to have a future without coal. The question 
is what kind of a future are we going to have with coal when we 
describe conditions of capture and sequestration? I'm a real 
believer that technology can solve some of these problems, but 
technology isn't inexpensive, and so, Mr. Slutz, I'm hoping 
that the next time you come, you'll be able to smile as Mr. 
Spurgeon has about what we might be able to do to increase the 
accounts that you can't ask for because you've got to be here 
supporting the President's request. You know and I know that, 
if we do what I think we should do to your accounts, you would 
be very appreciative.
    Would you agree to that?
    Mr. Slutz. I will agree that managing coal requires us to 
solve the carbon sequestration issue, and it is a huge 
challenge that we need to solve.
    Senator Dorgan. Diplomatically said. Thank you. Senator 
Domenici.
    Senator Domenici. Well, Mr. Chairman and members of the 
executive branch here in front of us, let me say, regardless of 
what my emphasis has been, along with others, like Senator 
Craig, in the field of nuclear and I'm trying to get a nuclear 
renaissance going, there's no doubt in my mind that the 
chairman has properly expressed the situation in the United 
States in terms of our future, and coal is an American--just 
the backbone of America's ability to solve the problem of 
having to import our energy needs.
    In my opinion, it would be a good thing and maybe we could 
do this. We have been spending money on coal research and it 
not all comes to you. Some goes to the Department of the 
Interior, and I think it would be good if we asked the 
administration to submit to us the amount of money that's been 
spent on coal, clean coal research, and let ``clean coal'' be a 
generic term for any kind of research that's been done on coal 
to make it more usable and friendly to American ambient air 
standards and the like.
    I'd like to see how much we've spent in the last 10 years, 
if you could ask them to tell us, and then if there are other 
departments that spend it, you could tell us who they are and 
we could ask them.
    Senator Dorgan. Mr. Slutz, would you submit that to our 
committee?
    Mr. Slutz. Yes. Yes, sir.
    [The information follows:]
                           Clean Coal Funding
    The Department of Energy has invested $3.4 billion in clean coal 
research over the last 10 years to dramatically reduce coal power plant 
emissions (including CO2) and significantly improve 
efficiency, thereby reducing carbon emissions. While funding is not 
readily available, other Government agencies that invest in clean coal 
include the National Science Foundation, the Department of Interior and 
the U.S. Geological Survey.

                     CARBON SEQUESTRATION CONTINUES

    Senator Domenici. What worries me is we've been--every year 
since I've been around doing my work on this subcommittee, we 
hear about the additions that are made to research on clean 
coal. The new addition has been CO2.
    First we had clean coal and we weren't trying to get 
CO2 out of it because climate wasn't a part of the 
issue. We were trying to clean it to meet the standard so we 
could use it in our utility. Now we've added to the research 
the burden of cleaning it and removing and making 
CO2, the removal stick.
    It seems to me that is a question to ask you and maybe you 
can get your experts to tell us. Has the fact that we are 
asking our researchers to find a way to remove and stabilize 
the removed CO2 made the research job of cleaning up 
our coal more difficult and are we ignoring clean coal and 
putting more effort on clean coal and carbon sequestration? Do 
you understand my concern?
    Mr. Slutz. As we focus on CO2, we're missing 
some of the other aspects.
    Senator Domenici. Making it more difficult. If we broke 
through and had clean coal, that'd be one thing. That'd be a 
pretty giant step. We've tried that for years. At least the 
utility companies and America would say we could burn that 
coal.
    If we say research clean coal and carbon sequestration, we 
might be making the clean coal more difficult to achieve and we 
may be taking more time to get it done, and I think I'd like an 
answer from some of your experts as to what we're doing with 
our money in that regard.

                     NATURAL GAS AND COAL RESOURCES

    It is very important. Right now the utilities of America 
are in an absolute dilemma, and that's your business and that's 
your business. You know they can't start a new powerplant, 
right? What they're all going to do is go to natural gas, 
right?
    Mr. Kolevar. Yes, sir.
    Senator Domenici. There's no question. They're going to be 
pushed up against the wall and they're going to eventually say 
whatever the cost, we have no other alternative. We're going to 
natural gas.
    Mr. Kolevar, you don't think that's good policy for 
America, do you?
    Mr. Kolevar. No, sir, it's not.
    Senator Domenici. And then how about you in your research? 
You don't think that's good for America, do you?
    Mr. Spurgeon. No, sir.
    Mr. Slutz. I think its good policy. I think there's a role 
for each of those fuels. There's going to be a role for both 
natural gas and for clean coal. There's--it's not an if--it's 
not an either/or.
    Senator Domenici. Sure.
    Mr. Slutz. It's clearly both.
    Senator Domenici. But if you ignore cleaning up the coal or 
make it take 10 years longer, your utilities can't sit by and 
wait. They're going to add capacity. You just described the 
capacity add-ons that are predicted by Caruso over there at--
that does a great job. His predictions are probably as accurate 
as any, and he says they're going to have to add great 
capacity, right?
    Mr. Slutz. Yes, sir.
    Senator Domenici. Thirty-five--what does he say?
    Mr. Kolevar. About 35 percent by 2030.
    Senator Domenici. Do you know what the utilities are saying 
they're going to do to meet the requirement? We have nuclear 
coming along, but it's by nature pretty slow.
    Mr. Kolevar. I think it's fair to say that a lot of 
utilities are not quite sure how they're going to get there.
    Senator Domenici. That's correct.
    Mr. Kolevar. But we are seeing the cancellation of planned 
coal units now, and much of that new generation coming online 
is going to be natural gas and that will make us more reliant 
on foreign sources of gas.
    Senator Domenici. And you know what natural gas is worth 
now. Remember when we started, Larry? Now it's up to nine. When 
we started, look at here. It's nine-plus, and then they're 
going to have to use it, even though it's in short supply.
    I have a number of questions, but I'm just going to get you 
on this, Bond and others, that keep attacking you. Are you 
feeling all right? Are you holding up under the barrage?

                               FUTUREGEN

    Mr. Slutz. Thanks, Senator. Yes, we are--I'm holding up. 
We're holding up. It was not an easy decision to make the 
decision on FutureGen, I can tell you, and we're working 
through that. We're working through it with our various 
industry partners. And let me just add one, which I think is--
and we'll have much more in the next few days to come out, but 
after we made the announcement, we immediately released a 
request for information.
    We requested those comments come in by Monday, March 3. I 
was able to determine yesterday we received over 50 comments, 
which is very significant for that type of technical request 
for information.
    I don't want to get ahead of myself because we need to 
analyze those comments, but I'm very optimistic that we have a 
path forward with this restructure of FutureGen that gets these 
projects out quicker in a full-scale commercial environment, 
and we're seeing a lot of interest by utilities because they 
see this as key to being able to use coal, and we're hearing a 
lot of excitement out there.
    So, we need to work through these comments. We're going to 
be working over the next month with some structured outreach 
programs with industry. And we anticipate coming out with a 
funding opportunity announcement very soon, and we'll be 
working very closely with Congress as well on this.
    Senator Domenici. Well, you've got to be smart on what 
you're going to do at the next go-around because you had the 
areas that were committed to this and perceived to have won, 
and now if you have a new program and there in some way it's 
made difficult for them to be participants, this issue will go 
on for years. And so my advice is to work with these companies 
that were part of your proposal before, and I'm sure you're 
going to do that.
    Mr. Slutz. Yes. Yes, sir.

                             NUCLEAR ENERGY

    Senator Domenici. Now let me talk about nuclear just for a 
little bit. Mr. Spurgeon, you're going to leave this Government 
when the President's term's up, I assume, or close thereto.
    Mr. Spurgeon. Yes, sir.
    Senator Domenici. First, I want to say together it would 
appear to me that your short term in this office will be 
evidenced by enormous positive success in the direction of 
nuclear power being used again in large quantities by America 
and certainly much more in the world than it ever has been, and 
we may be a player, whereas before we were doomed.
    We may, in my opinion, be back at it producing engineers 
that are experts, et cetera, and we may be interested in 
nuclear power at every level.
    Am I stating it halfway right?
    Mr. Spurgeon. Yes, sir.
    Senator Domenici. Now, since we've got nuclear power and 
got a lot of companies ready to go, there must be some things 
that are problematic about the future of nuclear power, and I 
might ask you in a minute to tell us a few, if you have them, 
but it seems to me that the overhang that is really big is, 
even though it's not as big a problem in my mind now as it was 
10 years ago, but the problem of what are we going to do with 
the waste is the only thing that stands in the way of maximum 
acceptance of nuclear power.
    You know that, right?
    Mr. Spurgeon. Yes, sir.
    Senator Domenici. That's the only thing people that know 
what they're talking about say and then it's accepted by the 
masses that, well, something's wrong, we don't have the waste 
control. We're doing darn well. We could stay a long time 
without a new repository because of the way things are right 
now.
    But are we going to find a way, a direction to move ahead 
so that we are assured of the next step which would be a 
reprocessing, a recycling plant in America? Is that going to be 
set before you and Mr. Bodman leave office or not or do you 
know?
    Mr. Spurgeon. I certainly hope so, sir. The future is 
always hard to predict, but we have all the ingredients in 
place that should allow that to happen, and that's not taking 
away anything from our long-term R&D efforts which will 
eventually get us to the point in advanced reactors and 
advanced systems that we need to get to and will get to some 
time later in this century.
    But the key to the revival of nuclear energy is making 
concrete progress, and I don't mean that as a pun, but 
``concrete'' meaning real things getting built.
    Senator Domenici. You bet.
    Mr. Spurgeon. That's our next step with respect to nuclear 
reactors in this country. We have the systems in place. We have 
some of the support mechanisms in place, but we need to push it 
over the goal line. Therein you'll see the emphasis in our 2010 
program in this year's budget because it's the new reactors 
that are going to be the pole that gets the flywheel turning.

                          SPENT FUEL RECYCLING

    But for the sustainability of nuclear energy long term--
because we don't just need the 30 or so plants that are on the 
drawing boards in one stage or another today; we need more than 
300 if we're going to have any chance of meeting some of our 
carbon goals in the near term. And so to do that then, we've 
got to solve that second of the two basic questions that have 
been out there for nuclear energy since the 40 years I've been 
in this business, which is, is it safe and what are you going 
to do with the waste?
    I think we have basically answered the question through 
good, solid, reliable operation of our nuclear plants that it 
is safe. We've got that second one to answer, but I think we 
can do that by looking at the entire back end of the fuel cycle 
as a unit.
    We need to look at used fuel and what is the best way and 
an integrated way of managing used fuel? Because through 
recycling, you can make the repository challenge much easier. 
You can put a much more stable waste form into the repository, 
making it such that it's easier to license, easier to----
    Senator Domenici. What is the objection? What is the 
objection to recycling?
    Mr. Spurgeon. It is something that goes back a long time. 
When this business started in the late 1960s and early 1970s, 
the whole policy was that the fuel coming out of a lightwater 
reactor would be recycled back into a lightwater reactor and 
the solidified, vitrified high-level waste would go into a 
repository, and at that point in time it was a salt mine that 
we were looking at for that kind of a repository. And that was 
our plan and that was moving forward, and that's when nuclear 
energy was going to provide a large share of our electric 
energy--projected to provide a large share of our electrical 
energy generation requirement.
    In 1977, President Carter indefinitely deferred 
reprocessing in this country. Now President Reagan did reverse 
that in 1981, but by 1981 nuclear energy was kind of on the 
downslide and there was no basic economic or business 
imperative for us to move forward with recycling.
    Senator Domenici. Yes, sir.
    Mr. Spurgeon. But we're now getting back to where we're now 
seeing that curve again turn upward and where we do need a 
substantial amount of new nuclear power, and to do that, we are 
now relooking at, through the Advanced Fuel Cycle Initiative 
and other programs, the ability to recycle fuel.
    I don't think--I'm sorry. I'll be quiet.
    Senator Dorgan. Let me just mention, though, that I think 
it requires a longer discussion. The reprocessing decision in 
1978 had to do with nonproliferation concerns. Valid or not, 
one might agree or disagree, this is also part of a concern 
about nonproliferation. So that's the origin of that, right?
    Mr. Spurgeon. No question, sir.
    Senator Dorgan. Okay.
    Mr. Spurgeon. Actually, I was there. I mean, I was one of 
the people that were doing the report.
    Senator Domenici. Well, just a minute because I ran out of 
time and you gave a long answer and that's sufficient. You've 
explained it.
    I want to say this. President Carter did stop this by 
executive order, and he said it was based upon the desire of 
the United States that there not be the proliferation that this 
would add to the atmosphere and that if we didn't do it, others 
would not do it since we were a leader that the world followed. 
The problem is that was a mistake and they didn't sit by and 
say we'll skip reprocessing, we'll do something else. They 
reprocessed and we did not, and now we're in a position of 
deciding whether we should or not. And the chairman is correct, 
that President that did it had a good reason. The problem is 
that the reason didn't turn out to be right, and it's many, 
many years since the decision and Europe, led by France, is 
recycling. And that's one of the giant, giant concerns that we 
must confront, and I don't know whether we're ready to confront 
it. I am, but I don't know whether others are.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Domenici, the reason I interrupted 
is only to say that the issue of reprocessing is not a 
technical issue. I mean, the decision wasn't made on a 
technical basis. It was made on a broader basis, and one might 
or might not feel it's time to revisit that.
    I think the issue of reprocessing requires a discussion 
about the kinds of things Senator Domenici has just described 
and the kinds of things others would describe about 
reprocessing. That was my only point.
    Senator Craig.
    Senator Domenici. That was fine.
    Senator Craig. Thank you very much, Mr. Chairman. I'll 
become a little more parochial. These are extremely valuable 
discussions, and I would suggest, as it relates to FutureGen 
and clean coal technology, I think the utility industry is 
ready to participate in phenomenally aggressive ways in 
partnerships to provide substantial resources.
    One of the things, if I have any disappointment in this 
administration, is we've not crossed that line of partnerships 
that I think we must if we're going to bring the resources to 
bear on the urgency that you hear this committee speak of when 
we speak about technology and the future and the need.
    Senator Domenici. You're right.
    Senator Craig. We still think we have to fund everything 
out of the hip pocket of the taxpayer, and those relationships 
are to come and they must come. Whether it's building an NGNP 
or whether it's FutureGen, they have to be targeted, they have 
to build consensus, but there's phenomenal resource out there 
waiting.
    I had the president of a major utility the other day tell 
me that they could meet the targets of a cap-and-trade in a 
reasonable fashion given the running room and the technology 
and the partnerships and the relationships with the Federal 
Government. But you all three understand, as we all four up 
here do, we have three people vying for the presidency today 
that hold nearly the same position on climate change and a 
scheme of cap-and-trade that nobody yet can figure out. And if 
that were to become policy today, the fuel switching we talk 
about would go on and distort the marketplace in ways that are 
awfully hard to perceive because utilities would be forced to 
move in the direction they must move to build their base loads, 
the clean coal technology not being in place and certainly the 
nuclear backlog and the building of infrastructure there and 
capability that's obviously under way. That's a frustration to 
all of us, or certainly it is to this senator. It may not be to 
others.

                         ADVANCED TEST REACTOR

    But, Dennis, last April, DOE designated the Advanced Test 
Reactor, ATR, as a national user facility. ATR is a unique test 
reactor that the university research community and the 
commercial nuclear industry can use to perform critical tests.
    Up until now, only the lab and the Navy have had access to 
the ATR. Now the fiscal year 2009 DOE budget only includes $2.5 
million for this activity.
    Do you consider this to be enough funding and what more 
could be done with additional funding?
    Mr. Spurgeon. I think it's a good start, sir. You're 
pointing out something that I consider to be a major 
accomplishment of moving the ATR into the marketplace, if you 
will, because it has a tremendous amount of untapped 
capabilities that can be used. And so, starting this summer, as 
you know, we are going to be having researchers from 
universities that are going to be starting to take advantage of 
that very unique facility.
    So, is it a start? Is it an acceptable start? I believe so. 
I'm hoping that this will take off and grow, and we will 
continue this program because it's--it can be a great example 
of how we can take and make full use of our national assets, 
especially the ATR, which, while it's been around for quite 
awhile, it's a very young 30-year-old plant.
    Senator Craig. Well, we'll watch it very closely because it 
is that nexus of partnership that I think ATR may assist us in 
doing, increasing those relationships with the private sector 
and the university communities that are going to be 
tremendously important.

                        ENVIRONMENTAL MANAGEMENT

    When the Secretary testified before the Energy Committee, I 
asked him to respond to the Idaho delegation's repeated request 
to transfer clean-up liability from the lab to the clean-up 
contractor. The fiscal year 2009 budget did not provide funding 
for these clean-up activities in either of the NE or EM 
budgets.
    Are you planning to fund these clean-up activities through 
NE? That would be the one question. What impact will this have 
on the R&D activities, like NGNP and GNEP, on the lab's 
infrastructure--and the lab's infrastructure?
    Mr. Spurgeon. Obviously any clean-up activity that is done 
at Idaho, however the budget funds end up getting requested, 
would be managed through the EM contractor. Nuclear Energy is 
not in the business of doing clean-up. My office is not in the 
business of managing clean-up, but it all goes through the 
Idaho Operations Office.
    Consequently, the issue here is more of how do we get 
adequate funds to manage the overall national clean-up activity 
that is ongoing and that needs to continue? From my personal 
perspective, I'm in the business of building things. I'm not in 
the business of taking things apart. There's another 
organization within the Department that does that.
    Senator Craig. Okay. Am I out of time, Mr. Chairman?
    Senator Dorgan. Close.

                   OUTER CONTINENTAL SHELF RESOURCES

    Senator Craig. Close. One last question then to you, Mr. 
Slutz, last year I included $10 million to perform an inventory 
analysis of domestic oil reserves in the Outer Continental 
Shelf, in the Energy and Water Appropriations bill.
    What are your thoughts on investing in this type of 
analysis to establish once and for all the Nation's oil 
reserves to be used at a time of need?
    And I say this because what we're looking at today is old 
knowledge, and yet we know that when incentivized, we went into 
the deep waters of the gulf and we applied today's technology 
and found phenomenal oil and oil reserves, and I am just amazed 
that we have decided to put a blindfold on because of the 
politics involved that are old, they're not the new politics 
that ought to be fitted to the new technologies. And I'm going 
to make a run at that again. I'm going to work awfully hard on 
it to see if we can't break through the mental fog out there of 
knowing where our country is as it relates to our reserves.
    Senator Domenici. What is that, Senator, you're going to 
work on, the inventory?
    Senator Craig. Ten million dollars to build the inventory.
    Senator Domenici. We did it. You put it in and then they 
took it out, and we had to take it out in conference.
    Senator Craig. I know we did it and----
    Senator Domenici. It's not law yet.
    Senator Craig [continuing]. My effort is to do it again.
    Senator Domenici. Right. I got you. I didn't understand.
    Senator Craig. Your thoughts, sir?
    Mr. Slutz. Well, let me just tie it back in, I think 
broader, when you look at it from an oil and gas reserve 
assessment, technology assessment, it's actually something 
that, as a nation and the world, that we actually do need to do 
periodically.
    It is probably--and I'll reference a study I was personally 
very involved in, was the National Petroleum Council Study that 
was titled ``Facing the Hard Truth'' when it was issued. And 
one of the key findings from that study, which was actually a 
study of studies and projections that are out there, was that 
it was something not just the United States but globally we 
needed to have a better understanding of our resource base and 
that it was time to really update that, and I think there's 
some real good information in that piece of work on how to get 
started under that.
    And, of course, almost every projection in the world, I 
think, all except one major projection, relies on the United 
States Geological Survey and their reserve assessment. So, I 
think the United States has always shown leadership in reserve 
assessment. I think it is a critical issue, not just to know 
what we have in the offshore and Outer Continental Shelf but 
also, as we look more toward unconventional resources, past 
reserve assessments have not--because of new technology 
developments over the last probably 15 years, some of those 
past assessments don't actually take into account a lot of--for 
instance, what is the real opportunity with oil shale and some 
of those things?
    So, yes, I think there is some opportunity there for us to 
better understand this.
    Senator Dorgan. Mr. Slutz, thank you very much. I do want 
to mention that we put the inventory in our bill last year, and 
I supported that. But it properly belongs with the Interior 
Appropriations Subcommittee.
    Mr. Slutz. Right.
    Senator Dorgan. Both of us are on Interior, I believe. 
That's probably where we'll want to put it.
    Mr. Slutz. I was giving you the general technology answer.
    Senator Dorgan. I understand. I also want to make a point 
that the administration has zeroed out the ultra-deep and 
unconventional oil and gas drilling research. We added back the 
money in the past, but for the second year in a row, the 
administration zeroed that out. I think is a very big mistake 
because there are resources there that we need to further 
research and develop technologies so that we can find them.

                           PREPARED STATEMENT

    Let me call on Senator Allard.
    Senator Allard. Thank you, Mr. Chairman. I would like to 
have my statement made a part of the record, if I might.
    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 
appropriate that we are hearing from, not only the offices responsible 
for dealing with electricity production, but also 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 which 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.
    In the area of fossil energy production, technological advancements 
have made the use of coal cleaner and more efficient than ever before. 
In the United States, and in the State of Colorado, 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.
    Again, Mr. Chairman, thank you for holding this hearing. And thank 
you to all of the witnesses for being present.

                          SPENT FUEL RECYCLING

    Senator Allard. Thank you, Mr. Chairman. My approach on our 
energy crisis is that we need to have a balanced approach. We 
can't take any energy source off the table right now, and I 
think that's critical. That's a position that I think is good 
for the country, happens to be good for the State of Colorado 
because we have lots of natural gas, we have lots of clean 
coal, we have lots of sources for renewable energies, and we 
have a lot of the technology to develop some of this.
    The question that I have is when we're talking about 
nuclear energy, what is being done to--that you're familiar 
with--to push the recycling of nuclear energy?
    I visited the recycling nuclear energy plants in Sellafield 
in England. I've been to France and visited those recycling 
units there, and anybody that hasn't been to those areas, I 
think they ought to spend the time to go there because it's 
American technology that they've taken to the European 
community, and I know that we're working on what we call a MOX 
plus, which means when we recycle, we end up with a byproduct 
that is more difficult to convert to a nuclear weapon of some 
type.
    Would you comment on that recycling part on nuclear energy, 
please?
    Mr. Spurgeon. From the budgetary standpoint, that's found 
in the Advanced Fuel Cycle Initiative, which is looking to 
develop the technologies which will allow us on a long-term 
basis to proceed forward with advanced recycling and also with 
advanced reactors that would then be used to recycle the 
material into.
    On a near-term basis, we are looking at, well, what can we 
do to make the fuel cycle more proliferation resistant, that 
is, so that you don't separate out pure plutonium? I don't 
happen to call it MOX plus, but on the other hand your 
description of it is accurate. And that is something that we 
are looking at.
    We look at that as the--I personally look at that as the 
next incremental step along the way toward the ultimate goal of 
long-term fast reactor recycle, but what that also does, as 
Senator Domenici was commenting on just a moment ago, it gets 
us to the point where we can have an easier solution than just 
disposing of used fuel directly in a repository, an easier 
solution to the disposition of high-level waste because the 
product of a recycle facility is a vitrified glass form that is 
easier to dispose of and gives us many more alternatives as to 
how we dispose of that material.
    Senator Allard. Reduces the waste stream.
    Mr. Spurgeon. It does reduce the waste stream. It reduces 
toxicity, but more importantly, if you just dispose of a spent 
fuel element, then you need to be able, because you don't know 
but what you might want to use that material and that resource 
that's still contained in there at some later time, it needs to 
be recoverable or retrievable. That defines a harder problem 
for a repository than if you're disposing of a glass log and it 
just needs to go in there and be safe for the time frame that 
needs to be maintained geologically stable.

                          CLEAN COAL RESEARCH

    Senator Allard. Thank you for that. I also think that we 
have to continue to rely on working on our traditional energy 
sources. Mentioned was coal. Colorado has a source of clean 
coal because it's hard, has high mercury levels. You go further 
east, you have soft coal with lower mercury levels.
    What is being done in clean coal technology to look at how 
we can easily remove mercury from coal? Is anything being done 
there?
    Mr. Slutz. In the past, we have had programs that focused 
strictly on clean coal and particularly mercury, and that was 
in our Innovations to Existing Plants Program.
    Now, what we've done is we are proposing in 2009--we 
actually proposed no funding in 2008 because much of that work 
had been done, and in 2009, we're proposing money in the 
Innovations to Existing Plants but that again is focused on the 
carbon capture piece of it and it's capturing carbon from the 
existing coal fleet, is where that line is moving to.
    So, we are--in the past, we have done work on mercury, but 
now we're moving more toward carbon capture.
    Senator Allard. Now, what I'm hearing on this carbon 
capture, some of this you're talking about disposing of the 
carbon in one way or another.
    Just sitting here listening to your discussion, I know that 
we make carbon compounds that are very light and extremely 
strong. Is there a possibility of taking those carbon compounds 
that you have left over from your coal utilization, and 
converting those into a commercial product like these carbon 
compounds where they're extremely light and extremely hard? And 
they're actually using them. Taking these synthetics and 
actually making them part of the fuselage of planes and whatnot 
because of their lightness and durability. Is there anything 
being done on that?
    Mr. Slutz. I think there's been past work being done on 
other ways to store it, other than sequestration, but right 
now, we're focused on sequestration. And I'll tell you part of 
the challenge----
    Senator Allard. Is there a future in that?
    Mr. Slutz. Well, part of the challenge is the scale. And if 
I could just give you a sense of that----
    Senator Allard. If you would.
    Mr. Slutz. If you captured all the carbon from all the 
power--the coal-burning powerplants in the United States and 
then you compressed it so it was a liquid, like it was, it's 
called super-critical, so it's like a liquid. You would have to 
manage 50 million barrels a day of that liquid. That's 2\1/2\ 
times our current oil-handling capability.
    So, from a scale--it's not that I'm not saying it doesn't--
I don't know the answer to whether it does and we can look into 
that from a standpoint of giving a technical answer of the 
possibility of that, but the part of the challenge is the 
amount of carbon dioxide we could deal with.
    Senator Allard. Well, I see that, is this liquid carbon 
dioxide or is this----
    Mr. Slutz. When you move it, you compress it.
    Senator Allard. Is this frozen carbon dioxide what you're 
dealing with in the end?
    Mr. Slutz. No, it's actually--carbon dioxide is a gas when 
you compress it.
    Senator Allard. Right. And then it----
    Mr. Slutz. And then it becomes like a liquid.
    Senator Allard [continuing]. Becomes a liquid and then a 
solid.
    Mr. Slutz. Yes.
    Senator Allard. Yes. But when you--carbon sequestration. I 
mean, if you take the oxygen out, you've got carbon?
    Mr. Slutz. Right. But CO2 is you inject it for 
sequestration.
    Senator Allard. Okay, all right. So, you inject the 
CO2 for sequestration. My point is there a carbon 
compound that's left over in the process?
    Mr. Slutz. In----
    Senator Allard. Not really?
    Mr. Slutz. Not really.
    Senator Allard. Not really. So, when we combine this with 
soda, soda ash, for example, what is happening? I mean, why are 
we combining it with soda ash? Is this a way of disposing of 
the carbon, CO2?
    Mr. Slutz. I would have to get back with you on that. I'm 
not sure of the answer to that question.
    Senator Allard. I'm trying to get an understanding here of 
the disposal cycle as we go through the sequestration.
    Mr. Slutz. Oh, sequestration. You're actually inject--what 
you're doing is you're injecting the CO2 into a deep 
underground saline aquifer, so it stays in that--because of the 
geologic pressure, it stays in that super-critical liquid.
    Senator Allard. CO2.
    Mr. Slutz. CO2, yes.
    Senator Allard. Okay.
    Mr. Slutz. Now----
    Senator Allard. No attempt has been made to take these 
byproducts and put them to a useful purpose, is what I'm trying 
to get to.
    Mr. Slutz. In the past, I think there's been some limited 
work in that.
    Senator Allard. Yes. But do you think that there--we should 
be doing something like that?
    Mr. Slutz. I don't know what the--I'm not sure what the 
potential is on that.
    Senator Allard. I think we ought to look at that. I mean, 
we always have a disposal problem, but we need to look at, you 
know, how you recycle this stuff, and if there's the technology 
there to put it to some useful purpose, I think we ought to 
look at that.
    Mr. Slutz. There is one area that we see a significant--
it's still not done on a full scale, but using CO2 
for enhanced oil recovery is one very likely possibility and an 
early possibility for finding an alternate use for 
CO2. As it's injected into the oil reservoir, it 
increases oil production. It's done--there are some--at Permian 
Base in west Texas, significant enhanced oil recovery is done 
by using CO2. So, yes, that's probably one of the 
largest reuse opportunities in enhanced oil recovery.
    Senator Allard. I see my time has expired. Thank you.
    Senator Domenici. Excuse me, Mr. Chairman. Might I comment?
    Senator Dorgan. Senator Domenici?
    Senator Domenici. I might say Senator and Mr. Secretary, 
this injection that you speak of has been done for--that's a 
pretty old use of carbon dioxide, and it was not done for the 
purpose of leaving CO2 underground. Nobody was 
trying to remove CO2. We didn't know it was a 
problem. It was a good way to fill the underground veins of oil 
and push the oil up. So, we find out now that maybe that's a 
way to get CO2 out of circulation, and it does quite 
well.
    I might say to the Senator, one of the most interesting 
things happened in testimony yesterday from Mr. Caruso from the 
Energy Information Agency. When we passed the CAFE standard for 
automobiles, Mr. Caruso just told us yesterday how much carbon 
dioxide we saved, will save by 2030 because of the forced 
change in the size of automobiles and et cetera.
    We're going to save 5 billion tons just by that law and its 
implementation among the car owners of America. So, we're not 
going to get rid of carbon dioxide only by----
    Senator Allard. Well, you need to have CO2 if 
you're going to have plant life on this world.
    Senator Domenici. Yes. But what I'm saying is there's lots 
of ways we're going to reduce it. That's one. We didn't even 
have to do anything except pass a bill to change the model of 
cars and you cut 5 billion tons in that.
    I've told the chairman that I had to leave, Secretaries, 
and I want to thank all of you and especially you, Mr. 
Spurgeon. We'll be working hard with you for the next 10 months 
to see that we can come up with some more good things before 
you leave.
    Thank you, Mr. Chairman.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Dorgan. Senator Domenici, thank you very much. At 
this time I would ask the committee members to please submit 
any additional questions they have for the witnesses for 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. Dennis R. Spurgeon
            Questions Submitted by Senator Pete V. Domenici
    Question. The difference between the Department's fiscal year 2008 
request and fiscal year 2009 request for the Advanced Fuel Cycle 
Initiative (formerly GNEP) is down roughly $100 million. Clearly this 
will result in significant change in the research objectives of this 
program. Can you please explain to the subcommittee how the Department 
has modified the scope of this program and what are the near term 
technology goals for this program?
    Answer. The reduced funding between the fiscal year 2008 budget and 
fiscal year 2009 budget for AFCI, which is the domestic technology 
research and development component of GNEP, results from, among other 
considerations, a planned reduction in R&D resulting from industry 
feedback to date showing that prior R&D scope might be greater than 
required to meet industry needs. In fiscal year 2008 the Department 
solicited input from industry to determine whether the near-term 
technology and deployment goals of GNEP could be met using commercially 
available technologies. This interaction indicated that the initial 
deployment of spent nuclear fuel recycling technologies could utilize 
technologies already in use on an industrial scale in Europe and Asia, 
with modifications to ensure pure plutonium is not separated.
    Question. The fiscal year 2008 Energy and Water bill directed the 
Department to develop a strategy to address the spent fuel inventories 
at the closed civilian nuclear facilities in New England and the West 
Coast. These sites, which have no ongoing nuclear operations, are 
simply long term storage facilities for spent nuclear fuel. What is the 
Department doing to implement this Congressional direction and what are 
the options currently under consideration?
    Answer. The fiscal year 2008 Report language requested the 
Department of Energy (DOE) develop a plan for accepting spent nuclear 
fuel currently stored at decommissioned reactors at either an existing 
Federal site, at one or more existing reactor sites, or at a 
competitively-selected interim storage site (including those sites that 
volunteered to host Global Nuclear Energy Partnership facilities). The 
Department is currently evaluating pertinent information and preparing 
a report in response to this request.
    Question. As I noted in my opening remarks, the MOX fuel 
fabrication facility has not received adequate funding and the 
Department will be forced to rebaseline the program to establish a new 
budget and schedule for this project. Can you please inform the 
subcommittee of the impacts of Congressional cuts to the MOX program 
and how much taxpayers will pay as result of these cuts? What will this 
do in terms of delaying our goal of eliminating excess plutonium from 
the U.S. weapons stockpile?
    Answer. DOE is currently analyzing the MOX cost and schedule 
impacts that will result from the $217 million funding reduction to the 
MOX project (this reduction includes $100 million cut from the budget 
request, the rescission of $115 million and a $2 million reduction in 
Other Project Costs) in the 2008 Consolidated Appropriations Act. It is 
premature to speculate on the impacts of these changes until this 
analysis is completed. However, we expect that the funding reductions 
could increase the total project cost of the currently validated 
baseline for the MOX facility, delay the facility construction and 
operations schedule, and ultimately, delay our goal of eliminating 
plutonium that has been declared excess to U.S. defense needs.
    Question. Last year, as part of the Energy and Water bill, Congress 
directed the Department to make investments in our national labs 
instead of pursuing a brand new consolidated fuel technology center. 
The labs support a wide variety of nuclear research ranging from 
nuclear weapons to medical isotopes, but the infrastructure at these 
facilities are aging and require new investments to sustain the 
scientific capability. Do you agree that we need to continue to invest 
in our scientific infrastructure and how does the fiscal year 2009 
budget request support this goal?
    Answer. The Department of Energy (DOE) strongly believes that 
investment in our scientific infrastructure is critical to successful 
accomplishment of our mission. The fiscal year 2009 budget supports 
this goal, and DOE will continue to support and maintain our facilities 
and equipment so that research and development (R&D) of nuclear energy 
technology can be conducted with the best available laboratory assets.
    DOE is actively reviewing existing facilities to determine how they 
can be used in the near term to develop and demonstrate the 
technologies we envision for the Global Nuclear Energy Partnership 
(GNEP) such as advanced fuel separations, transmutation fuel 
fabrication, improved waste forms, and integrated safeguards. Potential 
new GNEP facilities are being evaluated to inform policy decisions and 
understand the environmental impacts associated with them. It is 
important to have facilities that can perform integrated testing at an 
engineering scale to enable the United States to become a leader in 
advanced fuel cycle R&D.
    The fiscal year 2009 budget request supports funding for 
establishment of the Materials Test Station (MTS) at the Los Alamos 
Neutron Science Center (LANSCE). This work, conducted in parallel with 
NNSA's LANSCE-Refurbishment, will establish an advanced-fast-reactor-
fuel test capability in a currently unused target station at LANSCE. 
The budget request also supports infrastructure investment at the Idaho 
National Laboratory, DOE's lead laboratory for nuclear energy R&D. It 
also supports the continuation of an effort initiated this year to 
characterize the full compliment of nuclear facilities and capabilities 
that will provide data to inform future decision making. One goal of 
this effort is to help assure needed nuclear facilities are maintained 
without regard for their location or ownership. This is an ambitious 
undertaking, but I feel it is critically important to understand our 
infrastructure requirements and to target future investments according 
to a well-researched plan.
    Question. NRC Licensing of New Nuclear Plants.--It seems to me that 
the most successful NE program has been the NP 2010 program, which is a 
joint DOE/Industry cost share program to design and prepare a standard 
license for NRC review. It occurs to me that many of the new facilities 
being supported by DOE research such as the Next Generation Nuclear 
Power Plant and the spent fuel recycling facilities must at some point 
address the NRC licensing requirements and safety standards. What is 
your office doing to respond to the inevitable NRC licensing 
requirements for these facilities?
    Answer. The Energy Policy Act of 2005 (EPAct), requires the 
Secretary of Energy and the Chairman of the U.S. Nuclear Regulatory 
Commission (NRC) to jointly submit to Congress a licensing strategy for 
the Next Generation Nuclear Plant (NGNP), by August 8, 2008. EPAct also 
directs the U.S. Department of Energy (DOE) to develop the NGNP 
prototype for commercialization and directs NRC to license the 
prototype. DOE and NRC staff have worked closely together to jointly 
develop a comprehensive strategy for licensing the NGNP. This report 
was completed and submitted on August 13, 2008. This strategy 
identifies NRC policies considerations, procedures, analytical tools, 
and methods expected to be needed to establish a gas reactor safety 
review infrastructure.
    DOE envisions that spent fuel recycling facilities will be 
designed, constructed, and operated by commercial entities under NRC 
regulation. In July 2007, DOE established a Memorandum of Understanding 
(MOU) with NRC that provides for increased cooperation between DOE and 
NRC to allow NRC staff to become more educated on technologies and 
engineering aspects of potential nuclear fuel recycling facilities. NRC 
is participating in meetings, observing testing, touring DOE 
facilities, and reviewing industry deliverables provided to DOE. NRC 
staff members are considering regulatory framework issues associated 
with licensing and regulating a nuclear fuel recycling facility.
    Question. Later today, the Energy Committee will receive testimony 
on the status of the domestic nuclear fuel cycle and how various trade 
agreements and the ``Eurodif'' decision will impact the our domestic 
energy security. (I am sure you are fully aware that the United States 
is over 80 percent dependent on foreign uranium enrichment today.) Do 
you have any concerns about the viability of a domestic mining, 
enrichment and conversion industry to keep pace with expected growth in 
nuclear plants?
    Answer. The Department of Energy (DOE) agrees that the United 
States is very dependent on foreign sources of uranium, conversion, and 
enrichment to meet its domestic nuclear fuel needs. Over the past 
several years, DOE has observed encouraging signs that higher prices 
for uranium have spurred interest in domestic uranium exploration which 
will lead to increased uranium production, that the U.S. conversion 
industry is increasing its annual output, and that the United States 
will increase its domestic uranium enrichment capacity. Louisiana 
Energy Services and USEC Inc. have received licenses from the Nuclear 
Regulatory Commission to build and operate new enrichment plants in the 
United States. AREVA NC and GE Hitachi have also announced plans to 
build new enrichment plants in the United States. The Department is 
working with these private enrichers by assisting these companies in 
complying with U.S. laws and regulations regarding the protection of 
proliferation-sensitive enrichment technology. Additionally, the fiscal 
year 2008 appropriations legislation authorizes DOE to issue up to $2 
billion in loan guarantees for advanced nuclear facilities for the 
``front-end'' of the nuclear fuel cycle.
    Question. Based on the trade history of the Russian Government do 
you have any concerns regarding the ability of U.S. nuclear fuel 
industry to be competitive with their Russian counterparts?
    Answer. The U.S. enrichment industry is in a transitional phase and 
is beginning to plan and construct newer, more efficient enrichment 
plants. The Department of Energy (DOE) is concerned that unlimited 
sales of foreign enrichment at less than fair value prices in the 
United States could pose a threat to the viability of plans for 
constructing and expanding modern enrichment technologies in the United 
States. DOE is currently working with other U.S. departments and 
agencies on a number of options to address this issue.
    On December 21, 2007, DOE, the Departments of State, Commerce, and 
Defense jointly sent a letter to Senators McConnell and Bunning and 
Representative Whitfield expressing the administration's views 
regarding H.R. 4929 and a companion bill S. 2531 that would amend the 
Tariff Act of 1930 to make clear that all imports of low enriched 
uranium (LEU) are subject to coverage under the antidumping law without 
regard to the nature of the transactions pursuant to which LEU is 
imported.
    Question. USEC recently announced that the cost of the American 
Centrifuge Plant is going to increase from $2 billion to $3.5 billion. 
This plant is being counted on to replace the existing gaseous 
diffusion plant and provide a much needed source of domestic uranium 
enrichment. This technology was provided to USEC by the U.S. Government 
at no cost. Can you tell me what the state of this project is and 
whether or not you believe this facility will be commercially viable?
    Answer. While the Department of Energy (DOE) granted USEC, Inc. 
(USEC) a nonexclusive patent license to DOE-developed centrifuge 
technology at no initial cost in 2006, the license contains substantial 
royalty payments once commercialization at USEC's American Centrifuge 
Plant (ACP) is at a certain level, with royalty payments capped at $100 
million. It should be noted that the cost of developing and deploying 
centrifuge technology and constructing the ACP is being borne by USEC, 
and not the Federal Government. The Government provided access to USEC 
to the existing centrifuge facilities at Portsmouth for the purpose of 
deployment of advanced enrichment technology in a commercial plant 
under a lease amendment, executed in 2006. USEC has spent an estimated 
$540 million of its own funds to advance the centrifuge technology, a 
highly classified technology the Government still owns. In the next 
year, USEC plans to spend an additional $1 billion on research, 
deployment, and construction of the ACP. These funds have in part been 
used to support research into centrifuge technology by the Oak Ridge 
National Laboratory (ORNL) and to upgrade and modernize DOE-owned 
centrifuge facilities at the former Gaseous Diffusion Plants (GDPs) in 
Portsmouth, Ohio, and Oak Ridge, Tennessee under a Cooperative Research 
and Develop Agreement (CRADA) executed in 2002. Under the CRADA, USEC 
retains rights to inventions USEC makes during the work; however, the 
Government retains a license for Government use and a right to 
negotiate for commercial rights. Any inventions made by ORNL employees 
under the CRADA work are owned by DOE.
    Retaining the domestic capability to enrich uranium is vital to the 
Nation's energy security and national security. USEC has demonstrated 
in a lead test cascade that the American Centrifuge is capable of 
producing the level of enrichment required by its customers and has 
increased machine performance beyond initial objectives. These 
developments suggest that USEC has advanced the American Centrifuge 
sufficiently to build and operate a commercially viable full-scale 
enrichment production facility. DOE's Office of Nuclear Energy 
continues to closely monitor the progress of development and deployment 
of the American Centrifuge and to assure that the Department's rights 
and options are protected.
    Question. What will happen to this Government technology if USEC 
fails to commercialize the project technology?
    Answer. A number of actions are possible. As noted above, the 
technology license is nonexclusive. If USEC fails to commercialize the 
technology, the technology will remain available for license to another 
entity by DOE. Additionally, under the 2006 lease of the gas centrifuge 
facilities at Portsmouth with DOE, the lease can be terminated and 
rights to USEC's background technology and new technology can be 
assumed by the Government should certain commercialization failures 
occur. Similar provisions regarding the assumption of technology are 
contained in a DOE-USEC 2002 Memorandum of Understanding.
    Question. Your office has been working on a strategy to sell excess 
uranium inventories, the largest amount of material contained in the 
depleted uranium tails still stored at Paducah and Portsmouth 
enrichment facilities. I understand that the plan will propose to sell 
up to 10 percent of total annual market to avoid undermining the market 
prices. When will this plan be available for review and what does the 
Department propose to do with the proceeds of these sales?
    Answer. The Secretary of Energy recently released a Policy 
Statement on the Management of the Department of Energy's (DOE) Excess 
Uranium Inventory. This statement provides the framework within which 
DOE will make decisions concerning future use and disposition of its 
inventory. During the coming year, DOE will continue its ongoing 
program for down-blending excess highly enriched uranium into low 
enriched uranium (LEU), evaluate the benefits of enriching a portion of 
its excess natural uranium into LEU, and complete an analysis on 
enriching and/or selling some of its excess depleted uranium. Specific 
transactions are expected to flow from these analyses.
    As stated in the Policy Statement on Management of the Department's 
Excess Uranium Inventory, in the absence of otherwise applicable 
statutory authority, the Department currently may not retain any money 
it receives from the sale of uranium and use that money for 
Departmental programs, but rather must treat any such proceeds as 
receipts subject to the Miscellaneous Receipts Act.
    Question. Mr. Spurgeon, your budget proposes to spend $20 million 
this year and $100 million over the next 5 years to develop ``grid 
appropriate reactors''. It is my understanding that these small 
reactors are intended to be sent to countries with ``limited nuclear 
experience'' (fiscal year 2009 budget justification). Everything I have 
learned about nuclear power over my 36 years in the Senate is that 
economies of scale are critical to making these zero-emission 
facilities economic. Before the Department commits $100 million of 
taxpayer resources, I would be very interested in your explanation of 
the business case for this project.
    Answer. Economy of scale (EOS) is an important factor when 
optimizing the cost of electricity from any power source, but it is not 
the only factor to consider in a decision to deploy nuclear power. More 
than half of the developing countries interested in pursuing nuclear 
power have physical and/or financial constraints that preclude them 
from considering large plants. Factors such as grid capacity and 
stability, availability of investment capital, and concerns for total 
project risk will likely limit these countries to consider plants with 
electrical capacities less than 500-600 MW and total construction cost 
less than $1 billion. Because the cost of power from alternative energy 
sources in many of these countries is 5-10 times higher than for the 
United States, the modest EOS penalty on the cost of electricity from a 
smaller-sized nuclear power plant is of less concern than the total 
project cost.
    Detailed analyses by the IAEA have shown that the EOS penalty can 
be reduced (by about 85-90 percent from a large reactor) by several 
other factors associated with smaller plants, including: common systems 
shared among a group of reactors; more rapid ``learning'' during 
fabrication; phased construction of multiple small units, allowing 
revenues from initial plants to offset capital outlays of follow-on 
plants; reduced interest costs due to shorter construction times and 
lower capital outlays; economic efficiencies gained by better matching 
of the energy supply and demand rates; and simplifications in the plant 
design enabled by their smaller size. Given all these factors, it is 
likely a small reactor will be extremely competitive with other energy 
forms in the local economy of a developing country.
    The introduction of nuclear energy brings other benefits that favor 
its introduction even if economics favor a less expensive alternative. 
The need to be technically competent to safely regulate and operate 
nuclear technology requires a significant amount of infrastructure 
development that will enable significant spin-off benefits. For 
example, once a competent nuclear regulator and radiation protections 
are in place, the country can pursue nuclear medicine. Once nuclear 
certified welders, electricians and mechanics are available, they can 
also fill other skilled occupations. Engineering and science based 
academic curricula will produce technical talent for other sectors in 
the economy. In short, introduction of nuclear energy will act as a 
fulcrum to raise the technological competence of an entire nation, with 
substantial benefits. For example, the Republic of Korea's first 
reactor was purchased as a turn-key project from Westinghouse. An 
element of the deal was training the welders to perform portions of the 
construction. After completion of the reactor these highly-trained, 
skilled welders became available to expand ROK's shipbuilding industry, 
which is now a world leader.
    Question. On Saturday, the Washington Post reported that the United 
States and Russia have initialed but not signed a ``123 Agreement'' on 
nuclear cooperation. However, without final signatures and Senate 
approval, there are limits on our ability too cooperate with Russia on 
civilian nuclear research and trade. Can you explain how this will 
impact your GNEP program?
    Answer. Work with Russia under the Global Nuclear Energy 
Partnership (GNEP) has not been impacted by the lack of a 123 Agreement 
with Russia. We continue to interface with Russia on issues concerning 
GNEP. However, without a 123 Agreement, GNEP research and development 
(R&D) collaboration with Russia will be delayed. This will limit our 
access to Russia's experience and facilities, both of which could 
reduce the cost and time to develop the technologies required to close 
the fuel cycle. GNEP could develop the technologies without the 
assistance of Russia or other international partners, but the time, 
effort, and cost will be greater.
    Integration of foreign experience into the U.S. advanced fuel cycle 
R&D program significantly declined in the 1980s and 1990s, which 
accelerated our loss of expertise and nuclear infrastructure. The 
United States now lacks many of the facilities needed for GNEP. We have 
no commercial-scale separations plant, no engineering-scale separations 
or transmutation fuel fabrication capability, no operating sodium fast 
reactor, etc. Meanwhile, Russia, France, Japan, and others have made 
significant progress in developing technology and related 
infrastructure. Collaboration with GNEP R&D partners is necessary, at 
least until the United States has rebuilt the required domestic 
infrastructure. Collaboration with Russia will give the United States 
access to a significant number of research laboratories that have 
relevant expertise. During the last 9 years, we gained significant 
access to Russian experts and facilities, allowing us to rebuild our 
capabilities by integrating their most recent results.
    Question. Will the lack of an agreement limit U.S. commercial 
entities from selling natural uranium or fuel services to Russia?
    Answer. Section 123 Agreements for Cooperation act in conjunction 
with other nonproliferation tools, particularly the Non-Proliferation 
Treaty, to establish the legal framework for significant nuclear 
cooperation with other countries. While the lack of such an agreement 
will prevent the United States from exporting natural uranium to 
Russia, a wide range of cooperative activities with Russia may still go 
forward. The United States and Russia drafted a report, entitled Joint 
Working Group on the Development of a Bilateral Action Plan to Enhance 
Global and Bilateral Nuclear Energy Cooperation that details principal 
areas of cooperation as well as short-term cooperative focus areas. The 
report establishes measures that will promote sustainable and safe 
nuclear energy use and expansion, in the United States, Russian 
Federation, and worldwide while strengthening nuclear nonproliferation 
and effectively addressing waste management. Specifically, it outlines 
national strategies in nuclear power; identifies the common bases for 
U.S.-Russian cooperation in advanced reactors, exportable small and 
medium reactors, nuclear fuel cycle technologies, and nonproliferation; 
and defines a plan for cooperation.
    Question. In the fiscal year 2006 Energy and Water bill, Congress 
provided $20 million and directed the Department to work with 
interested communities to support site development plans for a 
recycling plant, advanced fuel fabrication facility and an advanced 
reactor. What is the status of this effort and what is the Department 
doing to support these sites and provide technical support? What is the 
status of the Programmatic Environmental Impact Statement? What are the 
next steps for these communities?
    Answer. The Site Characterization Reports conducted by 11 
commercial and public consortia are the product of the $10,458,242 in 
grant awards made on January 30, 2007. Recipients had 90-days to 
complete these studies and submitted the reports to DOE on May 1, 2007. 
Information generated from these reports, coupled with existing site 
information, provide a variety of data relating to both DOE and non-DOE 
sites, including: site and nearby land uses; demographics; ecological 
and habitat assessment; threatened or endangered species; historical, 
archaeological and cultural resources; geology and seismology; weather 
and climate; and regulatory and permitting requirements. The Site 
Characterization Reports were made available to the public, and 
reviewed by DOE as part of the National Environmental Policy Act (NEPA) 
process and used in preparing the draft Programmatic Environmental 
Impact Statement (PEIS). DOE met with the associated communities last 
fall to identify key community issues related to GNEP that included the 
need to educate the public about the program.
    The Department received more than 14,000 comment documents during 
the scoping period for the GNEP PEIS. Evaluation of these comments 
resulted in consideration of several alternative nuclear fuel cycles 
and technologies.
    DOE is working to clarify the impact of GNEP technical and policy 
decisions on the local communities. Communications with potentially 
affected communities will continue throughout the NEPA process.
    Question. The Department has significantly increased its support 
for this program. While the two reference reactor designs continue to 
develop better fidelity in the project details, costs continue to 
increase and reactor vendors are now concerned that the original 
agreement to cost share $1.1 billion will not be sufficient to provide 
the total cost for the Standard Design. What are the Department's plans 
to address the potential shortfall?
    Answer. The fiscal year 2009 congressional budget request is based 
on an increase in the licensing demonstration project from an initial 
total estimate of $1.1 billion to $1.45 billion ($727 million in 
Federal cost share). This increase is required to address increases in 
regulatory related costs and design standardization costs.
    The Department of Energy's (DOE) cost share primarily supports the 
development and implementation of the ``untested'' regulatory process 
for the combined Construction and Operating License (COL) applications 
for two new nuclear plants. Since the 2005 Baseline estimates were 
prepared, Nuclear Power 2010 (NP 2010) has evolved from a 
``demonstration'' program to become the centerpiece of two Design 
Centered Working Groups (DCWG) on which COL applications for 10 or more 
plants (most are twin units) depend for success. It also supports the 
completion of the first-of-a-kind engineering for two reactor designs. 
The designs must have sufficient engineering design details to provide 
power companies reliable cost and schedule information they need to 
make plant orders. A number of the utilities participating in NP 2010 
also need this information to support regulatory approvals at the State 
level via their Public Utility Commissions (PUC).
    Additional funding related to increases in regulatory-related costs 
primarily supports the evolving Nuclear Regulatory Commission (NRC) 
licensing process (significant revisions to NRC rules/requirements, 
responses to NRC requests for information, etc.) and escalating NRC 
review fees. Additional funding related to increased standardization 
supports the industry's effort to extend the level of design detail 
required for increased standardization for procurement, operation, and 
maintenance of the plants. This level of design detail would provide 
specifications of equipment and components. DOE believes this degree of 
standardization is critical to ensuring the past inefficiencies of our 
existing commercial nuclear fleet are not repeated. Without additional 
funding, there is a high risk that the aggressive operational dates 
(approximately 2015) for the first units of the two standard designs 
may not be met.
                                 ______
                                 
              Questions Submitted to Hon. Kevin M. Kolevar
             Question Submitted by Senator Byron L. Dorgan
    Question. I am pleased that the President has proposed to double 
the Energy Storage and Power Electronics account in your budget. It 
still seems to me that this number ($13.4 million) is far too low to 
adequately address our needs to develop commercial scale energy storage 
capabilities which are critical to placing renewable energy onto the 
grid. Do you believe that $13 million is enough to allow you to 
accomplish what needs to be done in this area? What other technical 
challenges would your office focus on with additional funding, and how 
would these technologies facilitate integration of renewable energy 
onto the grid?
    Answer. The President's budget request of $13.4 million for the 
Office of Electricity Delivery and Energy Reliability adequately funds 
Energy Storage and Power Electronics to further storage technology as 
an important component of the modern electrical grid. The request 
focuses on critical areas of concern. The fiscal year 2009 
Congressional request will continue to demonstrate utility scale 
storage technologies (cost-shared, pre-commercial projects) and 
initiate a partnership with the Office of Science specifically 
investigating the use of nano-materials for advanced storage electrodes 
and new high voltage electrolytes.
    Additional technical challenges include developing new storage 
technologies with improved cost effectiveness, safety, and reliability. 
Applied research would include new engineered materials and ionic 
liquids to increase energy density of storage systems. Additional 
systems research would focus on scaling up existing technologies into 
megawatt devices suitable for grid applications. Energy storage systems 
will advance the penetration of renewables by helping to eliminate 
integration concerns such as short term variations and ramping 
problems, and allow energy management by dispatching renewable energy.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
    Question. Part of DOE's mission is to promote America's energy 
security through reliable, clean and affordable energy. I understand 
that EPA plans to propose a revised rule before the end of the year 
governing cooling water intake structures at existing power plants as a 
result of a recent 2nd Circuit Court decision. The central question 
before the agency is what should be deemed the best technology 
available (BTA) to minimize the adverse environmental impacts that 
might result from cooling water intake structures. The Court has 
directed the agency to clarify why cooling towers or their performance 
equivalent, were not deemed BTA. I understand that approximately 40 
percent of the Nation's existing generation will be directly and 
materially affected by this rulemaking. Has DOE examined the short and 
long term energy reliability and security impacts of designating 
cooling towers as BTA for existing generation facilities and does DOE 
believe they would be significant?
    Answer. The Department has not prepared a study on the specific 
issue of electricity reliability impacts of a cooling tower mandate, 
but has studied the energy penalties that would occur if existing steam 
generators were required to replace existing ``once-through'' cooling 
systems with recirculating cooling tower systems. This October 2002 
report is titled the Energy Penalty Analysis of Possible Cooling Water 
Intake Structure Requirements on Existing Coal-Fired Power Plants (see 
attached). The Department agrees that a new Clean Water Act rule 
requiring cooling towers for existing steam generation units could have 
implications on the adequacy and reliability of electricity supplies in 
the near and mid-term. Moreover, the effect of such a rule could be 
significant if combined with other retrofit mandates that may be 
required of existing generators under, for example, the Clean Air Act. 
The Department participated in an interagency review of EPA's original 
rule under E.O. 12866 and will do so again when the new rule is 
submitted to the Office of Management and Budget for review.
    Question. Could DOE do an analysis of the potential impacts for 
this committee, including the impacts on electricity reliability on a 
regional basis, and provide preliminary results as early as May so that 
these results could be meaningfully considered in the EPA rulemaking?
    Answer. DOE will prepare an expedited analysis of the potential 
impacts of a ``cooling tower'' rule on electricity supply and 
reliability in order to provide the committee with preliminary results. 
In addition, the Office of Electricity Delivery and Energy Reliability 
will conduct a more thorough analysis of the issues facing the existing 
steam generation fleet, with a goal of completing that study in the 
fall of this year. We have asked EPA and the Federal Energy Regulatory 
Commission to cooperate with the Department on these studies, 
particularly with respect to the electricity reliability analysis.
                                 ______
                                 
                   Questions Submitted to James Slutz
             Questions Submitted by Senator Byron L. Dorgan
    Question. We see news around the country about proposed coal-fueled 
power plants being canceled or postponed almost every week due to 
rising construction costs, the uncertainty of future regulations on 
carbon emissions, and much more. The Office of Fossil Energy has a 
longstanding relationship of working with industry in the various clean 
coal programs. The next round for the Clean Coal Power Initiative 
(CCPI) is slated to focus on carbon capture and storage and other 
beneficial uses of CO2. What do you propose to do to get new 
coal plants built so we can continue to utilize our abundant domestic 
coal resources?
    Answer. The Department of Energy's Clean Coal efforts begin with 
Research and Development (R&D) to advance technologies serving as 
building blocks for affordable, near-zero atmospheric emissions coal 
plants. These technologies, such as advanced turbines, gasifiers, fuel 
cells, and carbon capture and storage technologies are then integrated 
and demonstrated at commercial scale through the Clean Coal Power 
Initiative (CCPI). In parallel to CCPI, large volume carbon 
sequestration tests will demonstrate the technical viability of 
geologic CO2 injection at commercial scale. FutureGen is 
restructured to focus on accelerating the commercial experience with 
the integration of carbon capture into advanced plants including 
Integrated Gasification Combined Cycle (IGCC). These early commercial 
demonstrations will help accelerate deployment of carbon capture and 
storage by addressing technical, siting, permitting and regulatory 
issues. Loan Guarantees and Tax Credits may help accelerate commercial 
deployment of advanced technologies through financial incentives and 
mitigation of some risk.
    Question. When will the Department release the CCPI Round III 
Solicitation? Is the redirection of the FutureGen program hindering the 
release?
    Answer. The CCPI Round III Draft Funding Opportunity Announcement 
(FOA) was released on October 3, 2007. The redirection of the FutureGen 
program did not hinder its release. A Public Workshop was held on 
November 1, 2007, to answer questions and receive public input on the 
Draft FOA. The public comment period was held open until November 23, 
2007. The Department is currently revising the FOA based on public 
input to ensure that it is best suited to meet the needs of both the 
public and the Department. The Department is planning to release the 
Announcement this fiscal year, with project selections taking place in 
fiscal year 2009.
    Question. How much does the Department believe will be available 
for this next solicitation?
    Answer. The Department currently expects to have $224 million 
available for CCPI Round III, which includes an anticipated $85 million 
in fiscal year 2009 funding.
    Question. In the Clean Coal Power Initiative Rounds I and II, in 
2003 and 2004 respectively, the Department made more than $300 million 
available. Is the Department still planning to go ahead even though 
this $300 million threshold may not be met?
    Answer. Yes, the Department plans to issue the CCPI Round III in 
fiscal year 2008. The Department has received a significant amount of 
interest from industry in CCPI Round III. Over 80 participants from 
industry attended the CCPI Round III Public Workshop, and they 
identified numerous projects that will be seeking to participate in 
CCPI Round III. The Department believes that meaningful projects can be 
selected. Delays of an additional 6 to 9 months would be required to 
wait for fiscal year 2010 funds to become available.
    Question. Why is the Department planning on combining the funding 
for the CCPI and FutureGen programs (as indicated in the fiscal year 
2009 budget request) and how does the Department propose to go forward 
with both?
    Answer. In the fiscal year 2009 budget request, funding for the 
CCPI and FutureGen programs has been requested as separate line items. 
The Department plans to move forward with both CCPI and FutureGen by 
issuing a separate Funding Opportunity Announcement (FOA) for each 
program. Each FOA will outline the specific requirements of each 
program, allowing potential applicants to determine which program is 
the best fit for their technology and business model.
    Question. The carbon sequestration program has grown significantly 
in the last few years and the regional partnership program has been 
well received by many stakeholders. Four of the seven Regional Carbon 
Sequestration Partnerships have been funded to conduct large-scale 
demonstrations. The Departments budget request for fiscal year 2009 is 
$149 million. Does the Department plan to fund remaining three 
partnerships with this funding in the coming year? If not, why not?
    Answer. DOE has made awards for five large-scale tests to four of 
the Regional Carbon Sequestration Partnerships (RCSP) for Phase III 
Large Volume Sequestration Testing. DOE is developing a peer-reviewed 
plan to be completed this spring that will identify the scientific and 
engineering test parameters to guide design and selection of large-
scale tests. Items to be addressed include: rate of injection, duration 
of injection, and number and phasing of tests. The remaining proposed 
Phase III projects will be evaluated in the context of this plan. The 
evaluation process requires: (1) finalizing the technical scope of the 
projects by means of an independent study by an international group of 
experts; (2) undertaking a scientific evaluation; and (3) performing a 
cost analysis of the proposed projects to ensure the project costs are 
adequate prior to award. The estimated time frame for evaluating the 
remaining awards is the summer of fiscal year 2008.
    Question. Are these funds sufficient enough to conduct the large 
scale carbon sequestration demonstrations in every region of this 
country to insure carbon sequestration is a valid option from coal-
fired power plants and other facilities?
    Answer. There are sufficient funds in the fiscal year 2009 budget 
request to conduct the pre-injection activities and initiate some 
preliminary injection activities for the large scale carbon storage 
demonstrations. These demonstrations will require funding beyond fiscal 
year 2009 for remaining CO2 injection and post-injection 
monitoring activities.
    Question. The administration has asked Congress for funding in 
fiscal year 2009 to expand the SPR to the 1.5 billion level. This will 
require a national commitment through 2029 to get to that level under 
the Bush administration's plan. Has the Department done an estimate of 
how much it would cost to construct the facilities and fill oil to the 
1.5 billion barrel level?
    Answer. The Department has not finalized its expansion plan, nor 
selected the sites for the expansion of the SPR from 1.0 billion to 1.5 
billion barrels. DOE has requested $13.5 million in fiscal year 2009 to 
prepare its expansion plans and complete a NEPA environmental review. 
However, assuming the development of 2 additional new salt dome storage 
sites of 250 million barrels in the gulf coast, the total estimated 
construction cost for the expansion of the SPR from 1.0 billion to 1.5 
billion barrels, is estimated in the order of $6.5 billion.
    Question. What is the cost of developing the Richton, MS site and 
expanding the Bayou Choctaw, LA and Bill Hill, TX sites to reach the 1 
billion barrel level?
    Answer. The total estimated construction cost for the expansion of 
the SPR from its current capacity of 727 million barrels to 1 billion 
barrels, is estimated at $5.1 billion. This is based on conceptual 
design estimates which were prepared in 2006.
    Question. How does the administration respond to its policy efforts 
to put the SPR fill on autopilot without consideration of cost and at 
the same time? Are there not better ways that we can invest our 
resources this year? Over time?
    Answer. It is the policy of this administration to expand and fill 
the Strategic Petroleum Reserves in a manner that is both consistent 
and deliberate in order to maximize the energy security of the United 
States. The costs associated with this endeavor are important and they 
are carefully considered at every step.
    Question. I have also noted that there is approximately $585 
million in the SPR account from the sale of oil after Hurricane 
Katrina. Does the Department plan to issue more RIK contracts later 
this year or seek to directly purchase oil for the SPR with this $585 
million regardless of the price of oil or offers made in a solicitation 
for direct purchase?
    Answer. The fiscal year 2009 budget states ``In fiscal year 2008 
DOE will use available balances for the purchase of additional SPR oil, 
and will continue to fill using Federal royalty oil until 727 MMB is 
achieved in fiscal year 2009.'' The administration's objective is to 
complete the fill of the SPR to 727 million barrels before the end of 
calendar year 2008 by using the $584 million in available balances from 
the Hurricane Katrina oil sale for direct purchases and continuing the 
modest transfer of royalty oil from the Department of the Interior.
    The Strategic Petroleum Reserve has undertaken a market analysis in 
accordance with the Procedures for the Acquisition of Petroleum for the 
Strategic Petroleum Reserve (10 CFR 626) to assure that the planned oil 
acquisition will not stress the market.
    Question. The Energy Policy Act of 2005 provides guidance to expand 
the Strategic Petroleum Reserve (SPR) to the level of 1 billion barrels 
but only ``without incurring excessive cost or appreciably affecting 
the price of petroleum products to consumers.'' The Department has said 
it conducts market analysis the impacts of filling the SPR and the 
price of petroleum and did so before the recent RIK contracts. Can you 
provide more detail about how the Department performs this analysis? 
Was the analysis peer-reviewed by the EIA, other agencies or 
independent experts? Is the analysis available to the public?
    Answer. Prior to engaging in activities to acquire crude oil for 
the Strategic Petroleum Reserve, the Office of Petroleum Reserves 
conducts an assessment of market conditions to evaluate the potential 
for impacts on crude oil markets. A number of market indicators are 
examined in these assessments including stock levels, spot and futures 
prices, market fundaments, and energy security policy. The most recent 
market assessment was conducted in February 2008 and is currently being 
reviewed by Department officials and was informally peer reviewed by 
staff at the Energy Information Administration. However, EIA was not 
asked to comment on or evaluate the policy recommendations contained 
within the document. These assessments are not published on the 
internet, but they have been transmitted to the Congress.
    Question. Does the Department believe there is a price threshold 
for not continuing the RIK transfer?
    Answer. It is difficult to assign such a threshold without consider 
other contemporaneous market conditions. However, in the past the 
Department of Energy has suspended or delayed its fill activities in 
response to major petroleum market events and would do so again should 
the need arise. When acquiring petroleum, whether by purchase or 
royalty transfer, DOE will seek to balance the objectives of assuring 
adequate security and minimizing impact to the petroleum market. To 
this end, DOE will consider various factors that may be affecting 
market fundamentals and the geopolitical climate. DOE decisions on 
crude oil acquisition will take into consideration the current level of 
inventories, import dependency, the international and domestic 
production levels, oil acquisition by other stockpiling entities, the 
security value of additional storage, incipient disruptions of supply 
or refining capability, market volatility, the demand and supply 
elasticity, petroleum logistics, and any other considerations that may 
be pertinent. Monetary policy, the rate of economic growth, specific 
domestic market segments, and foreign policy considerations will also 
be evaluated. The timing of DOE entry into the market, its sustained 
presence, and the quantities sought will all be sensitive to these 
factors and their impact on U.S. energy security.
    Question. Secretary Bodman stated to me and other Senators in a 
letter dated Jan. 8, 2008, that one of the reasons to increase the 
capacity of the SPR is that it only contains 57 days of import 
protection. However, Department's own website said that the United 
States has 118 days of public and private strategic stocks for import 
protection. The requirement to meet U.S. treaty obligations with the 
International Energy Agency (IEA) is for 90 days of import protection. 
Why is the Department telling U.S. policy makers that we need to fill 
the SPR for import protection and telling the international community 
that we are currently meeting our treaty obligations for import 
protection?
    Answer. Under the Agreement on an International Energy Program (the 
Charter of the IEA), member countries are permitted to meet their 
required 90 day stockholding obligations through both public and 
private stocks. The United States currently relies on U.S. industry 
stocks to make up a significant portion (one-third) of its obligation.
    Question. The fiscal year 2009 budget once again proposes to 
eliminate all oil and natural gas R&D programs. Ninety-four percent of 
this funding goes to small, independent producers that do not 
sufficient funding to conduct R&D of their own. The fiscal year 2009 
budget request also proposes to eliminate $50 million in direct 
spending for ultra-deepwater offshore and unconventional onshore 
natural gas exploration technologies that would go largely to smaller 
independent oil and gas producers.
    Small, independent, domestic producers and universities are the 
primary beneficiaries of Federal oil and gas R&D funding. Contrary to 
the administration's views, ``Big Oil'' does not have an interest in 
these programs. I am particularly concerned about the impacts of the 
cuts on the education of our next generation of energy professionals. 
Why is this administration being so shortsighted by decreasing funding 
to programs that are so vital to the Nation's future energy security 
and domestic energy production?
    Answer. Oil and gas are mature industries and both have every 
incentive, particularly at today's prices, to enhance production and 
continue research and development of technologies on their own. There 
is no need for taxpayers to subsidize oil companies in these efforts. 
Although independent operators may not have the resources to fund 
technology development directly, the service industry that supplies 
them with equipment funds significant development of applicable 
technologies. The Department expects the service industry to continue 
to provide technological innovations for use by major and independent 
producers.
    Question. Why is the administration turning its back on potential 
long-range solutions to declining domestic gas production?
    Answer. DOE is supportive of efforts to increase the availability 
of domestic sources of natural gas. DOE supports the prompt 
construction of an Alaska natural gas transportation system to deliver 
gas from the North Slope of Alaska to the lower-48 States. Alaska's 
North Slope gas resources are estimated at 35 trillion cubic feet (TCF) 
discovered and 100 TCF potential. Industry has estimated the cost at 
more than $25 billion to build a 4.5 billion cubic feet per day (bcfd) 
pipeline with expansion capacity to 5.6 bcfd. To support such a 
project, the Department is authorized under section 116 of the Alaska 
Natural Gas Pipeline Act (ANGPA) to issue loan guarantees up to $18 
billion, indexed for inflation according to the Consumer Price Index 
from October 13, 2004, to a qualified infrastructure project or, in the 
case of a qualified liquefied natural gas project, up to $2 billion of 
principal.
    Question. A significant research project within the Natural Gas 
program is Methane Hydrates. If only 1 percent can be rendered 
economic, it would double the Nation's supply of natural gas. Why would 
the Department turn its back on this huge potential resource?
    Answer. The administration does not support spending Department of 
Energy funds for research and development (R&D) on safety or production 
of methane hydrates, given the economic incentives industry has to 
pursue this R&D on its own. This is consistent with its position that 
oil and gas are mature industries and both have every incentive, 
particularly at today's prices, to enhance production and continue 
research and development of technologies on their own. There is no need 
for taxpayers to subsidize oil and gas companies in these efforts. 
However, several other Government agencies are supporting methane 
hydrate research where it fits their missions, including the U.S. 
Geological Survey (USGS), the Bureau of Land Management (BLM), and 
Minerals Management Service (MMS) within the Department of the 
Interior; the National Oceanic and Atmospheric Administration (NOAA); 
the National Science Foundation; and the Naval Research Laboratory.
    Question. In the fiscal year 2008 Omnibus legislation, Congress 
requested that the Department begin the development of coal/biomass to 
liquids technologies with funding in the Fuels subaccount. Why is the 
Department's Coal Fuels request only focused on hydrogen from fossil 
fuels?
    Answer. The Fossil Energy Coal Fuels Research Development and 
Demonstration (RD&D) Program was identified as a participant in the 
Hydrogen Fuel Initiative at the beginning of the Department's Hydrogen 
Program. Therefore, the focus on hydrogen from coal is the principal 
activity proposed in the Coal Fuels Program for fiscal year 2009, as 
the Coal-to-Liquid Fuels Technology Program had successfully achieved 
its RD&D goals for turning synthesis gas into liquid fuels, and these 
technologies can be commercialized by the private sector. The fiscal 
year 2009 budget includes development of technology for co-feeding and 
gasifying coal/biomass for electricity generation application. As with 
much of DOE's gasification program, DOE's fiscal year 2009 coal/biomass 
research targets electricity generation applications, but could also be 
used by the private sector for other applications, such as production 
of transportation fuels.
    Question. Why does the Department not support this coal-biomass 
technology opportunity?
    Answer. Consistent with the fiscal year 2008 appropriated funding, 
the Department has prepared, and will soon release, a Coal and Biomass 
to Liquid Fuels Funding Opportunity Announcement. This announcement 
will request applications for research and development proposals 
specifically limited to liquid hydrocarbon fuels from coal/biomass 
mixtures.
    Coal-biomass to liquids technology involves two major steps: First, 
the coal-biomass feedstock must be turned into a synthesis gas. Second, 
the synthesis gas must be turned into liquid fuel. The first step, 
gasification of coal-biomass, is not mature and therefore continues to 
receive funding in the fiscal year 2009 budget. As with much of DOE's 
gasification program, DOE's fiscal year 2009 coal/biomass research 
targets electricity generation applications, but could also be used by 
the private sector for other applications, such as production of 
transportation fuels. The second step, turning synthesis gas into 
liquid fuel is mature and therefore is not supported in the fiscal year 
2009 budget. The Coal-to-Liquid Fuels Technology Program had 
successfully achieved its RD&D goals for turning synthesis gas into 
liquid fuels, and these technologies can be commercialized by the 
private sector.
    Question. Congress also directed that the Department address 
energy/water technology issues in the fiscal year 2008 Omnibus 
legislation. This includes a research program to help develop tools 
that thermoelectric power plants can apply to better manage the 
critical link between water and fossil energy extraction and 
utilization is vital. The Department only supported CO2 
capture at existing facilities in its fiscal year 2009 budget request 
for the Innovations for Existing Plants program. Why does the 
Department not support the availability of funding for technologies to 
reduce water usage and consumption, while minimizing impacts on water 
quality?
    Answer. Many of the technologies for reducing water use are mature 
and subject to incremental improvement that the private sector has the 
incentives and capability to undertake on its own. Improved water 
associated with transformational technologies is supported in the 
fiscal year 2009 budget request. Integrated Gasification Combined Cycle 
(IGCC) technology supported by the Gasification program uses 
significantly less water than the conventional Pulverized Coal (PC) 
technology. The focus of the Innovations for Existing Plants Program 
(IEP), will be on the continued research and development of advanced 
carbon capture technologies applicable to new and existing coal-fired 
power plants. The IEP program will develop technologies to separate and 
permanently store CO2 that can be economically and 
effectively employed on pulverized coal power plants. As noted in the 
fiscal year 2009 budget request, the Department will also conduct 
research on optimizing power plant water use as it relates to 
CO2 capture efficiency and optimization.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
    Question. As I noted in my opening statement, the Department has 
shifted its strategy from a single 275 Megawatt facility toward 
multiple commercial demonstrations of carbon capture and sequestration 
applied to an IGCC facility. I am concerned that this strategy will 
take years to develop before we have any serious results from these 
demonstration efforts. What is the Department doing to accelerate this 
important research and what other near term efforts is the Department 
undertaking to support carbon capture and sequestration research?
    Answer. Our commitments to the program goals of FutureGen are 
unchanged--to make near-zero atmospheric emission coal power plants a 
viable technology solution to address energy security and climate 
change concerns.
    The Department is refocusing its investment on multiple, commercial 
demonstrations of Carbon Capture and Storage (CCS) technology 
integrated with Integrated Gasification Combined Cycle (IGCC) systems 
or other advanced technology coal power plants. The difference is that 
under the restructured program, our plan, with current cost estimates, 
is to support not just a single less-than-commercial-scale R&D testing 
laboratory, but rather to provide funding for commercial demonstration 
of integrated advanced carbon capture and storage technologies.
    The restructured FutureGen will provide commercial data on cost, 
performance, and reliability. This information will help reduce risk of 
siting/permitting and operations for subsequent deployment, confirm 
economics associated with CCS, and facilitate industry-wide private 
capital offerings. It is expected that these commercial projects will 
be in operation in the next 6 to 8 years or possibly sooner depending 
on the sites selected.
    The Department's fiscal year 2009 budget request proposes 
substantial increases for FutureGen, Clean Coal Power Initiative (CCPI) 
demonstration of CCS, and Carbon Sequestration. We have also increased 
overall R&D in the area of carbon capture and storage. For example, the 
fiscal year 2009 Sequestration Program budget was increased to $149 
million with the bulk of this funding being used to support the field 
test program through the Carbon Sequestration Regional Partnerships--
including five large-scale (Phase III) demonstrations of the 
feasibility of storing CO2 in geological formations. The 
results of this research will be directly applicable to the capture and 
storage of CO2 from advanced power systems such as IGCC and 
existing coal-fired power plants. Further, the Gasification Program 
fiscal year 2009 budget of $69 million will focus on continuing to 
increase the efficiency of IGCC while lowering costs. Research from 
both programs will advance the development and ultimate commercial 
deployment of IGCC with carbon capture and storage.
    Question. I am pleased to see that the office of Fossil Energy 
remains committed to expanding the Strategic Petroleum Reserve to a 1 
billion barrel capacity, as outlined in the Energy Policy Act of 2005. 
I have noticed in your budget that there is $13.5 million for planning 
purposes to expand past a one billion barrel capacity. In these tight 
budgetary times, do you not believe that we should focus on reaching 
the one billion barrel capacity before we fund the planning of further 
expansion?
    Answer. The expansion of the Strategic Petroleum Reserve to 1.5 
billion barrels is essential to providing the United States with 
critical energy security. The Department has requested an initial $13.5 
million to perform planning studies to determine the optimum 
configuration of the expansion beyond 1 billion barrels, and complete 
the environmental review process and site selection. Once the sites 
have been selected, the expansion project is expected to require in the 
range of 12 to 15 years to develop the additional 500 million barrels 
of storage capacity.
    Question. The new CURC-EPRI roadmap, released in September 2006, 
defines the steps necessary to achieve near zero emissions from coal 
use, including the capture and sequestration of CO2, and 
suggests that the investment necessary to achieve the goals of Roadmap 
is approximately $17.0 billion between now and 2025. In fiscal year 
2008, we provided nearly half that amount through the DOE Loan 
Guarantee Program. Do you believe that the funds provided through the 
Loan Guarantee Program in fiscal year 2008 will get us half way to near 
zero emissions from coal use?
    Answer. No, the Loan Guarantee Program, although an important 
incentive for deployment of new clean coal technologies, by itself is 
not expected to move the Nation half-way to near-zero atmospheric 
emissions for coal use. The CURC-EPRI roadmap, released in September 
2006, proposes a funding level for a Research, Development, and 
Demonstration (RD&D) program focused solely on coal-based electricity 
generation. The loan guarantee program is intended to provide 
incentives for deployment of early commercial facilities, which would 
come online after successful commercial-scale demonstration. As stated 
in the program regulation, it isn't a research, development or 
deployment program. Though we expect there to be some synergy between 
early commercial projects and demonstration projects, by and large the 
Government spending proposed by CURC-EPRI is geared toward reducing the 
cost and improving the performance of the technologies. The Loan 
Guarantee Program will support commercialization of technologies that 
have already been successfully demonstrated.
                                 ______
                                 
              Questions Submitted by Senator Thad Cochran
    Question. What are the Department's goals in regards to Clean Coal 
and Carbon Capture? Request levels have varied dramatically in the last 
few years, but I'm pleased to see an increase in the program. Is the 
Department planning on researching coal-to-liquids technology?
    Answer. The technology goal for the Carbon Capture and 
Sequestration Program is ``to develop, by 2012, fossil energy 
conversion systems that offer 90 percent carbon dioxide capture with 99 
percent storage permanence at less than a 10 percent increase in the 
cost of energy services.''
    With respect to researching coal-to-liquids technology, the 
Department is planning and will soon release a Coal and Biomass to 
Liquid Fuels Funding Opportunity Announcement. This announcement will 
request applications for research and development proposals 
specifically limited to liquid hydrocarbon fuels from coal/biomass 
mixtures.
    Question. The Department of Energy has chosen a site in my State as 
the preferred location for expansion of the Strategic Petroleum 
Reserve, and funds were included last year for land acquisition. Mr. 
Slutz, can you speak about the time frame and future steps required for 
such expansion to occur?
    Answer. It will take approximately 12 years to complete the site.
    Project Steps and Schedule: Design and Land Acquisition--2008-2011; 
Facilities and Pipeline Construction--2010-2016; Cavern Development 
(Solution Mining)--2014-2018; Initial Oil Fill Capability--2016; 
Planned Site Completion--2019.
                                 ______
                                 
              Questions Submitted by Senator Wayne Allard
    Question. I understand that the administration has decided to 
restructure their approach to FutureGen. Can you tell me more about 
that decision and the reasoning behind it?
    Answer. The FutureGen project encountered significant cost 
increases, which raised the total estimated project cost from $950 
million (in 2004 constant year dollars) to $1.757 billion (in 2007 as-
spent dollars). Since the Department was responsible for 74 percent of 
the total project cost, DOE's projected investment had risen to 
approximately $1.3 billion. The Department was concerned over the 
prospect of further uncontrollable cost increases and attempted to 
limit its exposure to future cost growth by engaging the Alliance in a 
series of discussions. After several months of negotiation with the 
Alliance, a mutually acceptable agreement with the Alliance could not 
be reached.
    Therefore, a ``restructuring'' of the FutureGen initiative was 
pursued in order to maintain the Department's commitment to the 
administration's goal of developing a near-zero atmospheric emission 
power plant operating on coal. A Request for Information (RFI) was 
released on January 30, 2007, and the comments received from that RFI 
are now being reviewed and analyzed.
    Rather than investing in the total cost of a single commercial-
scale experimental facility integrated with carbon capture and storage, 
the restructured FutureGen approach will invest only in the carbon 
capture and storage portion of several commercial power projects. This 
will limit taxpayers' financial exposure to only help fund the carbon 
capture and storage portion of the plant. Furthermore, this new 
approach will allow us to accelerate nearer-term technology deployment 
in the marketplace faster than the timetable for the previous approach. 
In order to be successful in competitive power markets (and comply with 
the Department's competitive proposal evaluation process), the 
underlying power plant projects will still need to be efficient, 
competitive, and environmentally sound.
    Question. What does this decision do to ensure that the results of 
the project are something that industry can pick-up and integrate into 
current or future facilities smoothly, especially with regard to high-
altitude.
    Answer. FutureGen will provide early carbon capture and storage 
(CCS) demonstration experience in a commercial setting, which is aimed 
at accelerating deployment and advancing carbon capture policy. The 
previous approach to FutureGen would have created a single ``living 
laboratory'' for research and development of advanced technologies, 
which may have needed significant testing before being considered to be 
``commercial'' by industry.
    The intent is to select multiple projects competitively and at full 
commercial size. The scale of these projects is in the range of 300 to 
600 MW, with the demonstration portion involving CCS integration to be 
on one power unit (300MW). Depending upon where the winning projects 
are located, this approach should yield more diverse information for 
future facilities than would a single FutureGen project in terms of 
coal types, regional geology, and altitude.

                          SUBCOMMITTEE RECESS

    Senator Dorgan. Let me thank all three of the Secretaries 
who have joined us today, and I think this is a useful and 
important hearing to try to establish priorities and necessary 
funding requirements as we proceed with some very important 
programs at the Department of Energy.
    This hearing is recessed.
    [Whereupon, at 11:02 a.m., Wednesday, March 5, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2009

                              ----------                              


                        WEDNESDAY, APRIL 2, 2008

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:32 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Byron L. Dorgan (chairman) 
presiding.
    Present: Senators Dorgan, Murray, Domenici, Cochran, Craig, 
and Allard.

                          DEPARTMENT OF ENERGY

STATEMENT OF HON. RAYMOND L. ORBACH, UNDER SECRETARY 
            FOR SCIENCE

              OPENING STATEMENT OF SENATOR BYRON L. DORGAN

    Senator Dorgan. The hearing will come to order. I thank all 
of you for being here today. We are here today to take 
testimony from three program offices within the Department of 
Energy that oversee major aspects of the U.S. Government's 
Science and Energy Research, Development, Demonstration and 
Deployment programs. This is a hearing of the Senate 
Appropriations Subcommittee on Energy and Water Development.
    The programs that we will be discussing today from the 
Department of Energy run the gamut from basic research to 
applied research and development, and, finally, deployment of 
innovative energy technology projects. In essence, they 
represent the A to Z for energy technology research development 
and commercial deployment in the Department of Energy.
    Important research performed by the Office of Science is 
the underpinning of our colossal achievements in energy. The 
research development and demonstration conducted by the Office 
of Energy Efficiency and Renewable Energy builds upon that 
basic research by working to make new technologies deployable.
    And the Loan Guarantee Office provides the financial 
backing to industry for the development of new and innovative 
forms of conservation and energy. Without scientific and 
technical breakthroughs in these programs, the United States 
cannot expect to achieve the lofty goals that we have set for 
ourselves. Both the administration and the Congress have set 
very substantial goals in various energy initiatives and in 
recently enacted energy laws.
    In the 2009 recommended budget for this Department, I think 
there are some concerns. I will express them during the 
questions. Science, of course--Mr. Orbach is with us--is the 
beneficiary in the budget request. The $749 million increase is 
the largest in the Department's budget; energy efficiency is 
evidently the donor. The $467 million reduction is also the 
largest reduction in the budget.
    It seems to me that if we are serious about balancing our 
energy issues--for example, greater independence from foreign 
oil and all the other related matters--we've got to be serious 
about a wide range of things. That includes science.
    It also includes energy efficiency, and it includes 
renewable energy, and so we'll talk about all of that today. 
The proposal from the President is simply his recommendation or 
set of recommendations. The Congress, both Republicans and 
Democrats, take a look at that and then evaluate what our 
recommendations are. In some cases we agree with the President 
and in other cases we do not.
    I understand that those who are here today are duty-bound 
to tell us that they think the President's budget is just 
really wonderful, that they wouldn't change a thing, and that 
they think it's great. But I think, as we look at the 
priorities here, it's important for us in the Congress to 
evaluate how these recommendations relate to the decisions that 
we have previously made about where we want this country to go 
in energy policy.
    With that, I will call on the ranking member, Senator 
Domenici.

             OPENING STATEMENT OF SENATOR PETE V. DOMENICI

    Senator Domenici. Thank you very much, Mr. Chairman. I look 
out at the three witnesses, and the only one that I am not 
personally familiar with--and that's my fault--is David Frantz. 
I have read about what you are doing, and I think we have hired 
the right person, but I wonder if you don't wonder, sometimes, 
whether you have been hired to do the right job, since it seems 
like more and more people want to make your job difficult when 
we thought it was going to be a very simple proposition.
    Having said that, we hope that you are truly ready to go 
into the market and issue some loan guarantees as soon as 
possible, and we'll all be asking you that with a great deal of 
anticipation.
    Mr. Chairman, I have prepared remarks. In some respects 
they sound somewhat like yours because you have put your finger 
on what this is that's before us here today. I want to take 
just a few moments, nonetheless, to talk about some of the 
things that are here.
    Today we have these three witnesses who represent the 
entire pipeline of energy technology. Dr. Orbach has 
responsibility for discovery science and developing new 
technology solutions. The budget requests include $100 million 
for Energy Frontier Research Centers, and I think we ought to 
have that explained so we know what that means.
    Last year was a difficult year for Science funding, but I 
am pleased to see that the administration has not changed its 
direction and remains committed to its 10-year strategy of 
doubling the Office of Science: Not just you but all science 
was to be doubled in the next 10 years on the hard side, the 
science, engineering, physics, mathematics, et cetera.
    Assistant Secretary Karsner and his office is the next step 
in the technology development, as you have indicated, and then 
I won't repeat the ins and outs of his budget but we'll talk 
about it here today.
    It is important to put into perspective $42 billion is 
nearly 10 times the annual budget of the Office of Science. The 
reason I bring that up is because Congress has provided $42.5 
billion in guarantee authority for all three for both nuclear 
and the two others that go with it that received excellence 
funding for their guarantees.
    And this is a very large amount of money, but when we look 
at what America will probably have to spend to achieve some 
degree of energy independence, the number approaches $350 to 
$500 billion, and, certainly, some people say it's much higher. 
My own guesstimate would be that we'll spend much more than 
that to get out of the mess that we are in. And the loan 
guarantees are a substantial part, and that's why it makes it 
so important, Mr. Frantz, that we get this part moving.
    I want to comment on, while we have Dr. Orbach here, I'm 
deeply concerned about the lack of investment in upgrading the 
science facilities of NNSA laboratories, specifically the 
LANSCE facility which is needed to be refurbished in order to 
support the ongoing science mission.
    Third, I am frustrated that the Congressional Budget Office 
has charged our bill, Mr. Chairman, with 1 percent of the cost 
of Loan Guarantees program despite the fact that this program 
is self-financed, and the Department is required to cover the 
cost of the program. CBO believes the Department will miss the 
mark by 1 percent. I don't know why they assume it will be 1 
percent all in one direction. It seems if you're going to miss, 
you'll miss some high, some low, and probably come out neutral. 
But they assume it will all be a miss, and we get charged $352 
million.
    That's wrong. And if we had to bear that, that's just like 
coming into our budget, slicing out $352 million for which we 
get nothing. Nothing. And, to me, the Congressional Budget 
Office just didn't read the law. I read the law this morning, 
and it's clear that we cannot lose money. And you have to 
deliver the full cost of the loan to the Secretary before he 
makes the loan and the full cost of the loan to the Government, 
That's the way it's done, and that's what you're going to do.
    I don't understand it, and I hope we all get a hold of this 
one and make sure we do it right. Thank you, Mr. Chairman.
    Senator Dorgan. Senator Craig?

                    STATEMENT OF SENATOR LARRY CRAIG

    Senator Craig. Mr. Chairman, thank you. Both you and 
Senator Domenici have done the broad overview. I'll be more 
specific and probably a little more parochial. And, let me say 
to all of you gentlemen, this will be the last time you will be 
making full budget presentations before this committee. It will 
also be my last time as a Senator to be specific about some of 
the issues that I've been involved in for a good long while.
    Secretary Orbach, as you know, I've been generally pleased 
with your office, overall. My only advice since we first met 
was to look for ways to utilize our Nation's lead nuclear 
laboratory, the INL, as it relates to the help necessary and 
important with nuclear science. The fiscal year 2009 Science 
budget spends about $3.6 million. That's less than 1 percent of 
your total annual budget at INL. That remains a question to me 
as to why that. But there are ways to fix it, and let me 
propose some ideas to you.
    Your budget more than any other reflects the work of the 
Energy Committee, and the work we did in passing the COMPETES 
bill last year. Many educational provisions were funded. If 
you'll remember, a provision I put in with the cosponsorship of 
Senator Domenici and Senator Bingaman was the Nuclear Science 
Talent provision. That is section 5006.
    It's my hope that this provision will be funded above the 
$12 million that had been authorized so that DOE science and 
the INL Center for Advanced Energy studies, the CAES, can 
administer this provision and increase our competitiveness in 
nuclear science. We've simply got to get there, and it is not 
as robust as it has been authorized or as we should allow it.
    Secretary Karsner, I've been continually impressed with the 
results of your office to do so much with so little--only $1.2 
billion. So I guess I am unabashedly pro-renewable, and I serve 
as a member of the Board of the Alliance to Save Energy. And 
efficiency is truly the most affordable clean energy solution 
we have.
    A list of accomplishments from your office is too long, but 
there are some that attract my attention. The biomass, R&D, 
utilizing farm and forest waste is, I think, the nominal 
opportunity for us. Wind power in America, we're now frustrated 
about how we integrate the potential of so much wind power as 
an intermittent source into a baseload situation. Certainly, in 
the Pacific Northwest that may well be an opportunity and a 
difficulty.
    Vehicle technology, advanced factories. I want my grand 
kids driving electric cars, so get with it because they're 
young, but they will soon be at that level, and I see that as a 
phenomenal opportunity even in a distant state like Idaho. Get 
us up to 400 miles, and we're in business. And I think that 
potential is there.
    Industrial technology, I think across the board the R&D 
that we do there advances the efficiencies in all that are 
possible. So let me suggest that your lab and my lab have great 
synergy and cooperative relationships that can produce a lot of 
what you're attempting.
    And, as Pete Domenici said, Director Frantz, we're glad to 
see you. We've been waiting for you for 2\1/2\ years and very 
disappointed that you weren't before us 2\1/2\ years ago. So 
get with it and deliver to us those kinds of loan guarantees 
that push science and push the technology out there.
    As you know, I have focused a good deal on the frustration 
we now have growing out of this bulge in ethanol production, 
corn-base needing the move to cellulosic. In fact, I'm headed 
into Canada next week to look at a stand-up up there that we 
think has some potential, so it is very exciting that we get 
there. Caution is valuable, but daringness is more important as 
we push the edges of technology to get us to an area of energy 
independence. Caution will not get us there.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Murray.
    Senator Murray. Thank you, Mr. Chairman. I join you in 
welcoming our witnesses today. I will save my time for 
questions.
    Senator Dorgan. Senator Allard?

                   STATEMENT OF SENATOR WAYNE ALLARD

    Senator Allard. Mr. Chairman, for holding this hearing 
today. I don't think anybody can argue we're dangerously 
relying on foreign sources of energy, and 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 country.
    I'd 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, and they have established a great 
relationship with the research universities there, joining in 
the partnership with the University of Colorado, School of 
Mines, and Colorado State University in this renewable energy 
effort. And I commend them for joining that coalition. I think 
it helps make this a hub of renewable energy ideas.
    Mr. Chairman, you and I co-chaired the Renewable Energy and 
Energy Efficiency caucus, and so I know I don't have to tell 
you about the importance of renewable energy. 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 unit of both government and 
industry partners are very important to allowing these 
opportunities to live up to their potential.
    I look forward to working with the community and share the 
research and development and all fields of energy technology 
are funded in a manner that is responsible, but sufficient to 
ensure that the development and implementation of new 
technology continue.
    Thank you again, Mr. Chairman.
    Senator Dorgan. Senator Allard, thank you very much.
    We will now turn to the witnesses, and I want to thank all 
of them for coming today. We will begin with Dr. Orbach. Dr. 
Orbach, please.

                  STATEMENT OF HON. RAYMOND L. ORBACH

    Dr. Orbach. Thank you, Mr. Chairman. Thank you, Chairman 
Dorgan, Ranking Member Domenici, members of the committee. I'm 
very pleased to be able to appear before your committee for 
what I expect to be my final budget presentation for the 
Department of Energy's Office of Science. I would like to thank 
the Committee for your strong support for the Office of Science 
during my tenure.
    I would particularly like to thank Senator Domenici for his 
invaluable service to the Nation and for his strong support for 
the Nation's scientific enterprise.
    The President's budget request for fiscal year 2009 
continues his strong and clear support for science in this 
country, expressed through his American Competitiveness 
Initiative and Advanced Energy Initiative, both announced in 
2006. Congress has shown strong bipartisan support for an 
aggressive innovation and energy security agenda through the 
Energy Policy Act in 2005 and the America COMPETES Act and the 
Energy Independence and Security Act in 2007.
    The President's fiscal year 2009 request to Congress for 
the Office of Science sustains this bipartisan platform for the 
long-term economic health, energy security, and intellectual 
strength of our country. Just a few examples:
    We are introducing the concept of Energy Frontier Research 
Centers to accelerate scientific breakthroughs and innovations 
essential to the development of advanced energy technologies in 
the 21st century. We are providing $100 million in fiscal year 
2009 to award grants of $2 million to $500 million per year for 
an initial 5-year period on a competitive basis to groups of 
researchers in universities, laboratories, industry, and other 
institutions.
    We seek to engage the Nation's finest intellectual and 
creative talent to tackle the scientific grand challenges 
associated with how nature works to direct and control matter 
at the quantum, atomic, and molecular levels, and to harness 
this new knowledge and capability for some of our most critical 
energy challenges.
    Another example is ITER. While the 2008 appropriation for 
ITER was reduced to R&D, the President's request calls for the 
full $214 million needed to fully engage in this crucial 
experiment. It is high risk, but the potential for energy 
security is immense. ITER will directly benefit U.S. domestic 
industries creating an American workforce knowledgeable in R&D 
and in the production of high tech components for the fusion 
industry.
    My last example is high energy physics. The President's 
request firmly places this critical field back on track for 
world leadership. Former Princeton University President Harold 
Shapiro led the major National Academy of Sciences study on 
Elementary Particle Physics in the 21st century. He stated:

    ``The United States has been at the forefront of elementary 
particle physics for more than half a century. Particle physics 
inspires U.S. students, attracts talent from around the world, 
and drives critical intellectual and technological advances in 
many other fields. The United States has an unprecedented 
opportunity as a leader of nations to undertake this profound 
scientific challenge.''

    President Shapiro's last sentence applies equally across 
the frontiers of basic research in science. The Office of 
Science has prioritized its investments to maintain U.S. global 
scientific leadership. The President's fiscal year 2009 request 
to Congress gives us the chance to be a leader of nations. I 
urge this committee to give our country and its citizens that 
opportunity.

                           PREPARED STATEMENT

    Thank you again for your strong support for the Office of 
Science and for basic research. I look forward to answering 
your questions.
    Senator Dorgan. Dr. Orbach, thank you very much.
    [The statement follows:]
              Prepared Statement of Hon. Raymond L. Orbach
    Thank you Mr. Chairman and members of the committee. I am pleased 
to appear before your committee for what I expect to be my final budget 
presentation for the Department of Energy's Office of Science. I would 
like to thank the Committee for your strong support for the Office of 
Science during my tenure. This support has enabled the Office of 
Science to make investments in basic research and advanced research 
capabilities that have and will continue to improve U.S. global 
competitiveness, energy security, the environment, and our fundamental 
understanding of the universe around us.
    Our Nation continues to face significant challenges in energy 
security and in our ability to maintain the scientific leadership and 
innovation that assures our continued economic security. These 
challenges are addressed by the President in his American 
Competitiveness Initiative and Advanced Energy Initiative announced in 
2006. In this year's State of the Union address, the President again 
called our attention to the importance of harnessing the creative 
genius of American researchers and entrepreneurs in developing the next 
generation of clean energy technologies and in keeping our Nation at 
the forefront of basic research in the physical sciences. The budget 
request for fiscal year 2009 demonstrates his forceful, continued 
commitment to these important initiatives. The Congress has also spoken 
and expressed strong, bipartisan support for an aggressive innovation 
and energy security agenda in passing the Energy Policy Act (EPAct) of 
2005 and in following up with both the America COMPETES Act and the 
Energy Independence and Security Act (EISA) in 2007.
    EPAct and the COMPETES Act both recognize the pivotal role of the 
Office of Science in securing the advantages that basic research as 
well as science, math, and engineering education can bring to the 
Nation. EISA's provisions are intended to reduce America's dependence 
on oil, improve efficiency, and cut emissions. Technology development 
proceeds fastest where there is a strong grounding in scientific 
understanding, but we will not meet the targets with solely incremental 
improvements in current technologies. We need the breakthroughs that 
will result only from transformational basic research.
    Here are a few examples. EISA mandates the use of at least 36 
billion gallons of biofuels by 2022. Without transformational 
breakthroughs in deriving fuels from plant cellulose materials, we 
reduce our chances of reaching these aggressive goals. Even though 
conventional approaches, such as sugar-based and corn-based ethanol, 
can be modestly energy positive--although this is still debated--they 
consume large quantities of food and feed grain. Increasing use of 
these feedstocks raises environmental concerns associated with land use 
changes and impacts on atmospheric concentrations of carbon dioxide. 
Biofuels derived from cellulose, and in particular feedstock crops such 
as switchgrass that can be grown on marginal land with minimal water 
and nutrient requirements, can provide the basis for a sustainable 
biofuels economy in the United States while benefiting the American 
farmer. Breakthroughs in science are essential for the development of 
more efficient and cost-effective processes for deriving fuels from 
cellulose and for developing dedicated feedstock crops. The approaches 
to cellulosic ethanol deployed in many pilot and demonstration 
bioethanol plants across the United States rely on niche feedstocks and 
conversion technologies that are not yet cost competitive. New 
scientific discoveries supported by the Office of Science will speed 
revolutionary gains in production efficiencies and cost reduction--and 
in some cases may be the only way to meet our goals.
    The transformational basic research undertaken by the Office of 
Science's Bioenergy Research Centers is one way the Department is 
addressing the difficulties of cost-effective bioethanol production 
with minimal environmental footprint, by using plant and microbial 
genomics and other novel approaches.
    EISA also mandates a national fuel economy standard of at least 35 
miles per gallon by 2020--an increase in fuel economy of some 40 
percent that will save billions of gallons of fuel. Automobile 
manufacturers will need to employ numerous conventional and advanced 
engine and vehicle technologies to reach this goal. Office of Science 
basic research will be critical in the development of cost effective 
advanced engine and vehicle technologies through research in areas such 
as high-strength, low-weight materials; electrical energy storage; 
hydrogen production, use, and storage; fuel cell materials; catalysts, 
combustion processes, and materials under extreme environments.
    In fiscal year 2009 the Office of Science will initiate Energy 
Frontier Research Centers. They will pursue innovative basic research 
to accelerate the scientific breakthroughs needed to create advanced 
energy technologies for the 21st century. These Centers will pursue 
fundamental basic research areas mentioned above as well as solar 
energy utilization; geosciences related to long-term storage of nuclear 
waste and carbon dioxide; advanced nuclear energy systems; solid state 
lighting; and superconductivity.
    The Office of Science seeks to engage the Nation's intellectual and 
creative talent to address scientific grand challenges. These are the 
necessary transformational discoveries which will fundamentally alter 
our approaches to energy production and use, and they will come from 
the next generation of scientists, mathematicians, and engineers. If 
our fiscal year 2009 request is approved, the Office of Science will be 
able to directly support the research of more than 4,300 graduate 
students--and many more who are supported by other agencies will use 
our world-leadership scientific research facilities in their 
dissertation research.
    The Office of Science is accelerating the pace of discovery and 
innovation to address the Nation's energy needs through our 
multifaceted research portfolio. Your confidence in the Office of 
Science is based on a number of demonstrated successes in our mission 
areas, and your support for the Office of Science has enabled us to 
assess the basic research needs and engage the scientific community to 
respond aggressively. We routinely assess and update these research 
opportunities and priorities with an eye to our mission and with an ear 
to the research community, whether at a national laboratory, a 
university, or in industry. Since we build and operate large-scale, 
long-term, and, by necessity, cost-effective scientific research 
facilities, and because our mission is so important, we take these 
assessments seriously. We cannot afford to go in a wrong direction; we 
need the most complete and robust analysis of scientific opportunity, 
mission need, cost, and benefit.
    A large part of this assessment effort in recent years has been 
accomplished through a series of Basic Research Needs workshops and 
other workshops led by our science programs in partnership with the 
Department's technology programs. These workshops have brought together 
subject experts with diverse views from the broader basic and applied 
research community to discuss and identify areas of focus for DOE's 
basic research efforts. These efforts have enabled the Office of 
Science to stay informed of research needs and new opportunity areas, 
as well as scientific and technological roadblocks, and have enabled us 
to create a prioritized and comprehensive research portfolio within our 
available funding.
    While these workshops are critical to building and balancing our 
research portfolio, we also have a number of planning and advisory 
resources at our disposal to inform our long-term research portfolio 
planning. The National Academy of Sciences, our Federal Advisory 
Committees, informal and formal communication with the international 
scientific community, OSTP, OMB, the Congress, and our in-house Office 
of Science personnel all play important roles. Our programs are strong 
because our research portfolio and facilities are internally and 
externally assessed regularly and because our research and facilities 
are awarded through a competitive merit review process.
    We have established effective processes for assessing basic 
research needs, and we have also developed the capacity to respond 
quickly with highly leveraged investments in scientific facilities and 
research at the national laboratories and universities. This informed, 
rapid response provides the world-class research results that will help 
solve some of our most intractable energy supply and environmental 
challenges, while keeping our Nation's scientific enterprise and 
industry at the forefront.
    I think the best way to bring my statement into sharp focus is to 
discuss some examples of how your investments in the Office of Science 
have brought quick and remarkable results, and what we plan to do with 
the funding requested for fiscal year 2009 to enhance the U.S. 
scientific and innovation enterprise and ensure the best possible 
return to the taxpayer.
    Perhaps the best example of this aggressive and nimble approach is 
the response by the Office of Science to the challenge of High 
Performance Computing (HPC). In 2002 the Japanese announced the Earth 
Simulator, a high performance computer for open science which combined 
unprecedented performance and efficiency. Congress responded by 
dramatically increasing HPC funding, and making the Office of Science 
the lead in an effort to surpass the Earth Simulator. I am pleased to 
report that your confidence in us has already resulted in the United 
States attaining world leadership in open scientific computing--by the 
end of this year we will achieve peak capacity of one petaflop at our 
Leadership Computing Facility in Oak Ridge. This exceptional capability 
is helping us model such phenomena as turbulent flows related to 
combustion and to model and simulate complex climate processes that 
will inform decisionmakers on climate change, mitigation, and 
adaptation.
    The benefits of Office of Science HPC capabilities extend well 
beyond DOE. We provide access to these resources to other Federal 
agencies, universities, laboratories, and industry. We have been 
involved in modeling and simulation runs as diverse as determining 
hurricane effects to save lives, and modeling aircraft engines and 
airframes to improve energy efficiency and reduce time-to-market. We 
use the Innovative and Novel Computational Impact on Theory and 
Experiment (INCITE) program to openly compete access to these world-
leading HPC resources. The Office of Science created INCITE for the 
purpose of bringing the capabilities of terascale computing to the 
community in order to transform the conduct of science and bring 
scientific simulation through computational modeling to parity with 
theory and experiment as a scientific tool. As a result, HPC modeling 
and simulation is now seen as a potent tool in the scientific toolbox; 
one that will potentially save lives, increases our energy and national 
security, and propels us to a competitive edge.
    Another accomplishment of the past year is the successful 
competition and award of three Bioenergy Research Centers. These 
Centers will each take different approaches to discovering 
fundamentally new solutions and solving critical roadblocks on the path 
to energy security--how will we meet the new requirement to produce 36 
million gallons of biofuels by 2022 from renewable plant sources that 
don't compete with the food supply? In authorizing and funding the 
Bioenergy Research Centers, Congress expressed its confidence in the 
ability of the Office of Science to tap the talent of our national 
laboratories and universities to tackle our fuels challenge, and these 
Centers are up and running well.
    U.S. leadership in science and technology depends on the continued 
availability of the most advanced scientific tools and facilities for 
our researchers. The suite of research capabilities operated by the 
Office of Science and used annually by 20,000 researchers from 
industry, academia and government labs are still the envy of the world. 
And over the past several years, with your support, we have delivered 
new facilities and have achieved remarkable technical milestones with 
existing facilities, enabling the United States to work at the cutting-
edge of many scientific disciplines. The Spallation Neutron Source, 
which came on line in 2006, is the world's forefront neutron scattering 
facility providing more neutrons, by a factor of 10, than any other 
neutron source in the world for research of materials and biological 
complexes. Let me give you just one example of why neutrons are so 
important. Neutrons are the only way to peer inside an operating fuel 
cell to view water forming and moving throughout the cell. In a fuel 
cell, water is formed as a by-product of the reaction between hydrogen 
and oxygen. If the water does not drain quickly and efficiently, then 
fuel cells will not work properly.
    The Linac Coherent Light Source currently under construction will 
produce x-rays 10 billion times more intense than any existing x-ray 
source in the world when it comes on line in fiscal year 2010. It will 
have the capabilities for structural studies of nanoscale particles and 
single molecules and for probing chemical reactions in real time. All 
five Office of Science Nanoscale Science Research Centers are now in 
operation, providing unparalleled resources to the scientific community 
for synthesis, fabrication, and analysis of nanoparticles and 
nanomaterials. The Tevatron at Fermilab currently remains the world's 
most powerful particle collider for high energy physics. New records 
for performance in peak luminosity were achieved in 2006, enabling the 
observation of the rare single top quark and bringing researchers 
closer to understanding the basic constituents of matter and the laws 
of nature at high energies.
    On October 24, 2007, the international ITER Agreement went into 
force. The ITER experiment will demonstrate for the first time that a 
reactor can create and sustain a burning plasma. The implications of 
this research are far-reaching. The world faces a series of tough 
choices in meeting our energy needs over the next century. While no 
silver bullet may exist, fusion appears to be the closest. Fusion 
energy provides the real possibility of abundant, economical, and 
environmentally benign energy, starting around mid-century. Our 
investments today will have huge pay-offs for our children and 
grandchildren. We are part of an international consortium that is 
sharing the cost and the risk of the project and will have full access 
to all experimental research data.
    The Office of Science is aggressively pursuing a range of research 
areas that will provide answers critical to our future energy security, 
as the material that follows will show--and we also continue to plan 
for the future, seeking to identify opportunities within available 
resources and to update our priorities appropriately. An example of 
this is the ``Facilities for the Future of Science: A 20-Year Outlook'' 
report, which was released in November 2003 and updated last year. The 
Outlook contained a prioritized list of facilities to underpin our 
major research thrusts over the next 20 years and beyond. These 
facilities are designed to be world class and adaptable to evolving 
basic research needs to ensure that U.S. taxpayers get the most value 
for their money. These facilities also allow researchers access to the 
full array of physical and biological science large-scale resources, 
creating an all-important balance and ``unity'' of science within the 
Office of Science. I ask the members during this appropriations cycle 
especially to consider the lasting value of the basic energy research 
done in the Office of Science to our Nation's well-being and economic 
prowess.
    The following programs are supported in the fiscal year 2009 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 2009 PRESIDENT'S REQUEST--SUMMARY BY PROGRAM
                                             [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                                                                                          Fiscal Year 2009 vs.
                                                 Fiscal Year  Fiscal Year  Fiscal Year      Fiscal Year 2008
                                                     2007         2008         2009    -------------------------
                                                   Approp.      Approp.      Request      Request      Percent
----------------------------------------------------------------------------------------------------------------
Basic Energy Sciences..........................   $1,221,380   $1,269,902   $1,568,160    +$298,258        +23.5
Advanced Scientific Computing Research.........      275,734      351,173      368,820      +17,647         +5.0
Biological and Environmental Research..........      480,104      544,397      568,540      +24,143         +4.4
High Energy Physics............................      732,434      689,331      804,960     +115,629        +16.8
Nuclear Physics................................      412,330      432,726      510,080      +77,354        +17.9
Fusion Energy Sciences.........................      311,664      286,548      493,050     +206,502        +72.1
Science Laboratories Infrastructure............       41,986       66,861      110,260      +43,399        +64.9
Science Program Direction......................      166,469      177,779      203,913      +26,134        +14.7
Workforce Dev. for Teachers & Scientists.......        7,952        8,044       13,583       +5,539        +68.9
Safeguards and Security (gross)................       75,830       75,946       80,603       +4,657         +6.1
SBIR/STTR (SC funding).........................       86,936  ...........  ...........  ...........  ...........
                                                ----------------------------------------------------------------
      Subtotal, Office of Science..............    3,812,819    3,902,707    4,721,969     +819,262        +21.0
Adjustments\1\.................................       23,794       70,435  ...........      -70,435       -100.0
                                                ----------------------------------------------------------------
      Total, Office of Science.................    3,836,613    3,973,142    4,721,969     +748,827       +18.8
----------------------------------------------------------------------------------------------------------------
\1\ Adjustments include SBIR/STTR funding transferred from other DOE offices ($39,319,000 in fiscal year 2007),
  a charge to reimbursable customers for their share of safeguards and security costs (-$5,605,000 in each of
  fiscal year 2007 and fiscal year 2008), Congressionally-directed projects ($123,623,000 in fiscal year 2008),
  a rescission of a prior year Congressionally-directed project (-$44,569,000 in fiscal year 2008), and offsets
  for the use of prior year balances to fund current year activities (-$9,920,000 in fiscal year 2007 and -
  $3,014,000 in fiscal year 2008).

        basic and applied research and development coordination
    I would also like to highlight the fact that the Office of Science 
continues to coordinate basic research efforts in several areas with 
the Department's applied technology offices through collaborative 
processes established over the last several years. These areas include 
biofuels derived from biomass, solar energy, hydrogen, solid-state 
lighting and other building technologies, the Advanced Fuel Cycle, 
Generation IV Nuclear Energy Systems, vehicle technologies, and 
improving efficiencies in industrial processes. The Department's July 
2006 report to Congress DOE Strategic Research Portfolio Analysis and 
Coordination Plan identified 21 additional areas of opportunity for 
coordination that have great potential to increase mission success. The 
Office of Science supports basic research that underpins nearly all 21 
areas; and 6 areas are highlighted in the fiscal year 2009 Office of 
Science budget request for enhanced R&D coordination: Advanced 
Mathematics for Optimization of Complex Systems, Control Theory, and 
Risk Assessment; Electrical Energy Storage; Carbon Dioxide Capture and 
Storage; Characterization of Radioactive Waste; Predicting High Level 
Waste System Performance over Extreme Time Horizons; and High Energy 
Density Laboratory Plasmas. The Office of Science has sponsored 
scientific workshops corresponding to these focus areas in 
collaboration with related DOE applied technology program offices. The 
workshop reports identified high priority basic research areas 
necessary for improved understanding and revolutionary breakthroughs.
    Advanced Mathematics for Optimization of Complex Systems, Control 
Theory, and Risk Assessment.--The Advanced Scientific Computing 
Research (ASCR) program supports basic research in advanced mathematics 
for optimization of complex systems, control theory, and risk 
assessment. A recommendation from the workshop focused on this subject 
indicated additional research emphasis in advanced mathematics could 
benefit the optimization of fossil fuel power generation; the nuclear 
fuel lifecycle; and power grid control. Such research could increase 
the likelihood for success in DOE strategic initiatives including 
integrated gasification combined cycle coal-fired power plants and 
modernization of the electric power grid.
    Electrical Energy Storage.--About 15 percent of the Basic Energy 
Sciences (BES) program funding requested to support basic research in 
electrical energy storage (EES) is targeted for a formally coordinated 
program with DOE applied technology program offices. The workshop 
report on this focus area noted that revolutionary breakthroughs in EES 
have been singled out as perhaps the most crucial need for this 
Nation's secure energy future. The report concluded that the 
breakthroughs required for tomorrow's energy storage needs can be 
realized with fundamental research to understand the underlying 
processes involved in EES. The knowledge gained will in turn enable the 
development of novel EES concepts that incorporate revolutionary new 
materials and chemical processes. Such research will accelerate 
advances in developing novel battery concepts for hybrid and electric 
cars and will also help facilitate successful utilization and 
integration of intermittent renewable power sources such as solar, 
wind, and wave energy into the utility sector, making these energy 
sources competitive for base-load supply.
    Carbon Dioxide Capture and Storage.--BES, ASCR and the Biological 
and Environmental Research (BER) program support basic research in 
carbon dioxide capture and storage. The storage portion of this R&D 
coordination focus area was a subject of a BES workshop on Basic 
Research Needs for Geosciences in February 2007 that focused on the 
research challenges posed by carbon dioxide storage in deep porous 
saline geological formations. The workshop report noted that the 
chemical and geological processes involved in the storage of carbon 
dioxide are highly complex and would require an interdisciplinary 
approach strongly coupling experiments with theory, modeling, and 
computation bridging multiple length and time scales. The BES effort 
supports fundamental research to understand the underlying chemical, 
geochemical, and geophysical processes involved in subsurface 
sequestration sites. The BER research effort focuses on understanding, 
modeling, and predicting the processes that control the fate of carbon 
dioxide injected into geologic formations, subsurface carbon storage, 
and the role of microbes and plants in carbon sequestration in both 
marine and terrestrial environments. These aspects of this focus area 
were also the subject of additional SC workshops that identified basic 
research areas in carbon dioxide capture and storage that could benefit 
the optimization of fossil fuel power generation and the development of 
carbon neutral fuels. The ASCR research effort supports two Scientific 
Discovery through Accelerated Computing (SciDAC) partnerships with BER 
to advance modeling of subsurface reactive transport of contaminants; 
an area that has been identified as directly relevant to carbon 
sequestration research efforts.
    Characterization of Radioactive Waste.--BES, BER, and the Nuclear 
Physics (NP) program support research in radioactive waste 
characterization. This R&D coordination focus area was the subject of 
six Office of Science workshops, including three BES workshops. The 
workshop reports noted that the materials and chemical processes 
involved in radioactive waste disposal are highly complex and their 
characterization requires an interdisciplinary approach that strongly 
couples experiments with theory, modeling, and computation bridging 
multiple length and time scales. The BES effort will focus on research 
relating to the underlying physical and chemical processes that occur 
under the conditions of radioactive waste storage, including extremes 
of temperature, pressure, radiation flux, and multiple complex phases. 
The BER research effort addresses processes that control the mobility 
of radiological waste in the environment. The NP research effort is 
focused on characterization of radioactive waste through the advanced 
fuel cycle activities. The NP program areas are structured as 
scientific disciplines with goals to understand the nuclear cross 
sections important for advanced fuel cycle reprocessing. A small 
portion of on-going research is relevant to the issues involved with 
radioactive waste and related advanced fuel cycles. The knowledge 
gained from this research will lead to enhanced understandings of 
radioactive waste characterization, which would make nuclear power a 
far more attractive component in primary energy usage.
    Predicting High Level Waste System Performance over Extreme Time 
Horizons.--BES supports basic research in predicting high-level waste 
system performance over extreme time horizons. This R&D coordination 
focus area was a subject of a BES workshop on Basic Research Needs for 
Geosciences in February 2007, which focused on research challenges 
posed by geological repositories for high level waste. The workshop 
report identified major research priorities in the areas of 
computational thermodynamics of complex fluids and solids, 
nanoparticulate and colloid physics and chemistry, biogeochemistry in 
extreme and perturbed environments, highly reactive subsurface 
materials and environments, and simulation of complex multi-scale 
systems for ultra-long times.
    High Energy Density Laboratory Plasmas.--The Fusion Energy Sciences 
(FES) program supports basic reach in high energy density laboratory 
plasmas. In May 2007, Office of Science and the National Nuclear 
Security Administration (NNSA) jointly sponsored a workshop to update 
the high energy density laboratory plasmas (HEDLP) scientific research 
agenda. Three scientific themes emerged from the workshop: enabling the 
grand challenge of fusion energy by high energy density laboratory 
plasmas; creating, probing, and controlling new states of high energy 
densities; and catching reactions in the act by ultra-fast dynamics. In 
fiscal year 2009, the FES request expands existing HEDLP research in 
response to the research opportunities identified in the workshop.

                               BASIC AND APPLIED R&D COLLABORATION FUNDING SUMMARY
                                             [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                                                                                          Fiscal Year 2009 vs.
                                                 Fiscal Year  Fiscal Year  Fiscal Year      Fiscal Year 2008
                                                     2007         2008         2009    -------------------------
                                                   Approp.      Approp.      Request      Request      Percent
----------------------------------------------------------------------------------------------------------------
Advanced Mathematics for Optimization of
 Complex Systems, Control Theory, & Risk
 Assessment:
    Science: Advanced scientific computing       ...........       $1,900       $2,000        +$100         +5.3
     research..................................
    Energy Efficiency and Renewable Energy.....  ...........  ...........          500         +500  ...........
    Nuclear Energy.............................      $10,000       19,410       55,000      +35,590       +183.4
                                                ----------------------------------------------------------------
      Total, Advanced Mathematics..............       10,000       21,310       57,500      +36,190       +169.8
                                                ================================================================
Electrical Energy Storage:
    Science: Basic energy sciences.............  ...........  ...........       33,938      +33,938  ...........
    Energy Efficiency and Renewable Energy.....  ...........  ...........        2,000       +2,000  ...........
    Electricity Delivery and Energy Reliability  ...........  ...........       13,403      +13,403  ...........
                                                ----------------------------------------------------------------
      Total, Electric Energy Storage...........  ...........  ...........       49,341      +49,341  ...........
                                                ================================================================
Carbon Dioxide Capture and Storage:
    Science: Basic energy sciences.............        5,915        5,915       10,915       +5,000        +84.5
    Advanced scientific computing research.....  ...........          976          976  ...........  ...........
    Biological and environmental research......       16,841       16,874       17,374         +500         +3.0
                                                ----------------------------------------------------------------
      Total, Science...........................       22,756       23,765       29,265       +5,500        +23.1
    Fossil Energy..............................       97,228      118,908      149,132      +30,224        +25.4
                                                ----------------------------------------------------------------
        Total, Carbon Dioxide Capture and            119,984      142,673      178,397      +35,724        +25.0
         Storage...............................
                                                ================================================================
Characterization of Radioactive Waste:
    Science: Basic energy sciences.............  ...........  ...........        8,492       +8,492  ...........
    Biological and environmental research......  ...........  ...........        1,500       +1,500  ...........
    Nuclear physics............................          200          200        6,603       +6,403       +3,202
                                                ----------------------------------------------------------------
      Total, Science...........................          200          200       16,595      +16,395       +8,198
    Nuclear Energy.............................       37,190       53,722       59,000       +5,278         +9.8
    Environmental Management...................        2,100        2,100        9,500       +7,400       +352.4
                                                ----------------------------------------------------------------
        Total, Characterization of Radioactive        39,490       56,022       85,095      +29,073        +51.9
         Waste.................................
                                                ================================================================
Predicting High Level Waste System Performance
 Over Extreme Time Horizons:
    Science: Basic energy sciences.............  ...........  ...........        8,492       +8,492  ...........
    Environmental Management...................          500          500        1,500       +1,000       +200.0
                                                ----------------------------------------------------------------
      Total, Predicting High Level Waste System          500          500        9,992       +9,492       +1,898
       Performance.............................
                                                ================================================================
High Energy Density Laboratory Plasmas:
    Science: Fusion energy sciences............       15,459       15,942       24,636       +8,694        +54.5
    National Nuclear Security Administration...       10,000       12,295       10,147       -2,148        -17.5
                                                ----------------------------------------------------------------
      Total, High Energy Density Laboratory           25,459       28,237       34,783       +6,546        +23.2
       Plasmas.................................
                                                ----------------------------------------------------------------
      Total, Basic and Applied Research              195,433      248,742      415,108      166,366        +66.9
       Collaborations..........................
----------------------------------------------------------------------------------------------------------------

                               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 global 
competitiveness. On behalf of DOE, I am pleased to present this fiscal 
year 2009 budget request for the Office of Science.
    This concludes my testimony. I would be pleased to answer any 
questions you might have.

    Senator Dorgan. Next we will hear from Secretary Karsner. 
You may proceed.
    Mr. Karsner. Thank you, sir.
STATEMENT OF HON. ALEXANDER KARSNER, ASSISTANT 
            SECRETARY FOR ENERGY EFFICIENCY AND 
            RENEWABLE ENERGY
    Mr. Karsner. Chairman Dorgan, Ranking Member Domenici, 
members of the committee, thank you for this opportunity of 
testifying in the President's fiscal year 2009 budget request 
for the Office of Energy Efficiency and Renewable Energy.
    EERE's fiscal year 2009 request of $1.25 billion is 
approximately $19 million higher than the fiscal year 2008 
request and provides a balance in diverse portfolio of 
solutions to address the energy and environmental challenges 
facing us today. The request will enable the EERE to research 
and develop renewable energy technologies, to dramatically 
increase the amount of clean energy produced in the United 
States' advanced energy technologies and practices, to 
sustainably decouple energy demand from economic growth, and 
strengthen commercialization and deployment to support rapid 
adoption by private industry of clean energy technologies.
    The need for clean energy solutions is abundantly clear. 
With the Nation's energy challenges plainly identified, our 
efforts today and onward need to be about the implementation of 
solutions: well-identified solutions, multipath solutions, 
parallel path solutions, trying what we must and at a pace that 
is commensurate with the magnitude and urgency of the 
challenges that we face.
    On December 19, 2007, the President signed the Energy 
Independence and Security Act of 2007 into law. The new 
mandates included in EISA are unprecedented in size and in 
scope and in time frame. Together we've taken great strides to 
move beyond problem identification and towards problem-solving 
that will enhance our energy security, diversify our energy 
systems, and reduce our greenhouse gas emissions that 
contribute to the serious challenge of climate change.
    EERE's overall budget request reflects the funding needed 
to meet our energy challenges head on. Advanced fuels in 
vehicles, renewable power, efficiency in buildings and 
industry, and technology deployment comprise EERE's portfolio 
and multipronged approach to energy solutions.
    My written testimony which I'll submit for the record 
includes a description of the priorities and specific funding 
requests of the EERE's program areas. The achievement of EERE 
program goals could save consumers over $600 billion by the 
year 2030, and as much as $4 trillion by 2050, cumulatively.
    Similarly, we expect that our portfolio will avoid at least 
six gigatons of carbon by 2030 and nearly 50 gigatons by 2050, 
cumulatively.
    With action plans, performance milestones, clearly 
articulated deliverables, and continued performance, EERE's 
Budget Request will strengthen our dynamic partnership with 
private industry and academia that have grown our Nation's 
economic well-being.

                           PREPARED STATEMENT

    Our laboratory products and partnerships resulting in 
industry commercialization at unprecedented levels will bring 
clean energy technologies and sources to large-scale commercial 
viability in the foreseeable future.
    This concludes my prepared statement, and I'm happy to 
answer any questions the committee members may have. Thank you.
    [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 2009 budget 
request for the Office of Energy Efficiency and Renewable Energy 
(EERE).
    EERE's fiscal year 2009 request of $1.255 billion, approximately 
$19 million higher than the fiscal year 2008 request, provides a 
balanced and diverse portfolio of solutions to address the energy and 
environmental challenges facing us today. The request will enable EERE 
to research and develop renewable energy technologies that can help 
increase the amount of clean energy produced in the United States; 
advance energy efficiency technologies and practices; and promote 
adoption by private industry of clean energy technologies.
    The need for clean energy solutions is clear. With the Nation's 
energy challenges plainly identified, our efforts today and onward need 
to be about the development of solutions--balanced, diverse, well-
identified solutions, multipath solutions, as well as parallel path 
solutions.
    On December 19, 2007, the President signed the Energy Independence 
and Security Act of 2007 (EISA) into law. Together, we have taken great 
strides to move beyond problem identification and toward problem 
solving that will enhance our energy security, diversify our energy 
systems, and reduce emissions that contribute to climate change.
    EERE's overall budget request reflects the funding needed to meet 
our energy challenges head on. Advanced fuels and vehicles, renewable 
power, efficiency in buildings and industry, and technology deployment 
comprise EERE's portfolio and multipronged approach to energy 
solutions. I will now provide a description of the priorities and 
specific funding requests of EERE's program areas.
                  biomass and biorefinery systems r&d
    In fiscal year 2009, the Department is requesting $225 million for 
the Biomass Program, an increase of $26.8 million from the fiscal year 
2008 appropriation. The Biomass Program's funding supports the Biofuels 
Initiative that was launched in 2006 as part of the Advanced Energy 
Initiative (AEI) and is designed to achieve cost competitive cellulosic 
ethanol by 2012. The funding also supports the President's ``Twenty-in-
Ten'' initiative, announced in the 2007 State of the Union, to reduce 
gasoline consumption by 20 percent by 2017.
    EISA includes increased Corporate Average Fuel Economy (CAFE) 
standards and an increased Renewable Fuel Standard (RFS). The act 
increases CAFE standards to 35 miles per gallon for all passenger 
automobiles, including light trucks, by 2020; and mandates the 
replacement of 36 billion gallons of gasoline with renewable fuel by 
2022, including 16 billion gallons of cellulosic ethanol. The Biomass 
Program's funding request for technology development and demonstration 
is expected to support timely achievement of EISA requirements. The 
program is focused on: Feedstock Infrastructure to reduce the cost of 
feedstock logistics; Platforms R&D for efficiently converting 
feedstocks into cost competitive commodity liquid biofuels; and 
Utilization of Platform Outputs to demonstrate and validate integrated 
technologies that achieve commercially acceptable performance and cost 
targets through public-private partnerships. The program strategy is to 
accelerate development of the next generation of feedstocks and 
conversion technology options for validation and demonstration in 
integrated biorefineries at commercial and 10 percent of commercial 
scale. This strategy balances the program's research, development, and 
deployment (RD&D) portfolio by encouraging technology transfer while 
maintaining core R&D funding for next generation technologies. The 
program will continue to emphasize cellulosic ethanol and expand the 
focus on other renewable biofuels, such as biobutanol and green diesel.
                      vehicle technologies program
    The fiscal year 2009 Vehicle Technologies Program's request is 
$221.1 million, an $8 million increase over the fiscal year 2008 
appropriation.
    Vehicle Technologies Program activities focus on advanced, high-
efficiency vehicle technologies, including combustion engines and 
enabling fuels, hybrid vehicle systems (including plug-in hybrids), 
high-power and high-energy batteries, advanced lightweight materials, 
and power electronics. These technologies are critical to near-term oil 
savings when used in advanced combustion hybrid and plug-in hybrid 
electric vehicles (PHEVs). In fiscal year 2009, emphasis will increase 
R&D for PHEVs, such as high energy storage batteries.
    The program continues to place increasing emphasis on accelerating 
RD&D on lithium-ion batteries, plug-in hybrids (including plug-in 
hybrid vehicle demonstrations), and drive-train electrification to 
diversify and make our Nation's vehicles more efficient to reduce 
petroleum dependency. The R&D centers on improving advanced combustion 
engine systems and fuels and on reducing vehicle parasitic losses. The 
Vehicle Technologies budget is modified in the fiscal year 2009 request 
by transferring three activities from the Hydrogen Technology Program: 
Education; Technology Validation; and Safety and Codes and Standards. 
These activity areas have congruent objectives with other efforts 
within the Vehicle Technologies Program, and combining them within one 
program enables management efficiencies.
    The Program will continue fiscal year 2008 efforts to evaluate the 
impact of intermediate ethanol blended gasoline (i.e., greater than 
E10) in conventional (i.e., non-FFV) vehicles and to improve the 
efficiency of engines operating on ethanol blends. Late model and 
legacy vehicles will be tested for emissions, performance, and 
materials impacts. Intermediate blends could provide a way to increase 
ethanol use sooner. These efforts support existing requirements and the 
President's 20 in 10 plan.
                      hydrogen technology program
    The Hydrogen Technology Program's fiscal year 2009 budget request 
is $146.2 million, $64.8 million less than the fiscal year 2008 
appropriation, due in part to the movement of the three activities 
mentioned above to the Vehicle Technologies Program. In 2009, the 
program will focus on remaining critical path barriers to the 
technology readiness goals for 2015. Substantial increases are included 
for hydrogen storage and fuel cell R&D. To provide for those increases, 
all funding for hydrogen production from renewables was eliminated and 
systems analyses continues at a somewhat reduced funding level.
    The Hydrogen Program continues to research and develop critical 
hydrogen technologies that enable near-term commercialization pathways. 
Hydrogen Storage is one of the most technically challenging barriers to 
the widespread advancement of hydrogen and fuel cell technologies in 
the transportation sector. Our portfolio continues to identify new 
materials for on-board storage having the potential for greater than 50 
percent improvement in capacity than those available prior to 2004. 
Much needs to be done to enable these materials to operate at practical 
temperatures and pressures.
    In 2009, the Hydrogen Program will significantly increase 
investment in applied R&D of novel materials and breakthrough concepts 
with potential to meet on-board storage system performance targets. R&D 
funding will be competitively awarded and conducted through both 
Centers of Excellence and independent projects. The overarching goal is 
lightweight, low-cost, low-pressure, and efficient on-board vehicular 
storage systems to achieve a driving range of greater than 300 miles, 
without impacting vehicular cargo or passenger space to be competitive 
with today's vehicles.
    To address the critical barriers of fuel cell cost and durability, 
the fiscal year 2009 request significantly increases funding for Fuel 
Stack Components R&D. Our R&D efforts have made significant progress in 
this area and will continue efforts to achieve our stated goals, 
reducing the high-volume cost of automotive fuel cells from $275 per 
kilowatt in 2002 to $94 per kilowatt in 2007. In 2009, we hope to 
reduce the modeled cost of hydrogen fuel cell power systems to $60 per 
kilowatt. One notable recent achievement was the cost-shared 
development of a membrane with 5,000 hours lifetime, a giant leap 
toward the 2010 goal of 5,000 hours durability in an automotive fuel 
cell system.
    The Hydrogen Program's fuel cell R&D will continue to pursue a 
number of technological advancements. Proton-conducting membranes that 
are low-cost, durable, and operable at a low relative humidity will be 
developed. Non-precious metal and alloy catalysts will be identified 
and developed to further lower the cost of fuel cell systems. Gas flow 
through the flow fields will be modeled and measured while fuel cells 
are in operation to ensure optimal gas and water distribution over the 
catalyst and membrane surface. And fuel cells for distributed energy 
generation will continue to be developed with an emphasis on system 
integration, cost reduction and efficiency improvements. The Department 
will also continue its participation in the International Partnership 
for Hydrogen Economy (IPHE)--collaborating on R&D of materials for both 
fuel cells and storage, and working on such projects as the evaluation 
of fuel cell-related test protocols from different countries, as well 
as hydrogen pathway and infrastructure analyses.
                          solar energy program
    The fiscal year 2009 budget request for the Solar Energy Program is 
$156.1 million, $12.3 million less than the fiscal year 2008 
appropriation. Through the President's Solar America Initiative (SAI), 
announced in the 2006 State of the Union, the Solar Program will 
accelerate market competitiveness of solar photovoltaic technologies 
through R&D aimed at less expensive, more efficient, and highly 
reliable solar systems. Targeting improved performance and reliability 
with reduced cost, the Solar Program focuses its RD&D activities in two 
technology areas: photovoltaics (PV) and concentrating solar power 
(CSP).
    The Solar Program's goal in the area of photovoltaics is to develop 
and deploy highly reliable PV systems that are cost-competitive with 
electricity from conventional resources. The Program focuses on 
improving the performance of cells, modules, and systems; reducing the 
manufacturing cost of cells, modules, plant components, and systems; 
reducing the installation, interconnection, and certification costs for 
residential, commercial, and utility systems; and increasing system 
operating lifetime and reliability. To lower costs more rapidly and 
improve performance, the Solar Program is focusing on PV technology 
pathways that have the greatest potential to reach cost competitiveness 
by 2015. Industry-led partnerships, known as ``Technology Pathway 
Partnerships,'' will be continued in fiscal year 2009 to help address 
the issues of cost, performance, and reliability associated with each 
pathway.
    The Program's CSP focus is to develop concentrating solar 
technologies. A solicitation issued in fiscal year 2007 resulted in 12 
industry contract awards focused on establishing a U.S. manufacturing 
capability of low cost trough components and the technical feasibility 
of low cost thermal storage. In fiscal year 2008, funds will be 
provided for Phase I of these contracts with the more promising 
contracts moving into Phase II in fiscal year 2009. One of the most 
important advantages of CSP is its ability to thermally store power for 
later use. The development of advanced thermal energy storage 
technologies in fiscal year 2009 will be expanded to include single 
heat transfer fluid systems that eliminate the need for multiple heat 
exchangers and thereby increase system efficiency and reduce cost. For 
distributed applications, research in fiscal year 2009 will continue on 
improving the reliability of dish systems through the operation and 
testing of multiple units as well as improving the manufacturability of 
dish systems.
                          wind energy program
    The Wind Energy Program's fiscal year 2009 request is $52.5 
million, an increase of $3.0 million from the fiscal year 2008 
appropriation. The Wind Energy Program supports the AEI objective to 
maximize wind energy resource utilization in the United States by 
leading the Nation's R&D efforts to improve wind energy generation 
technology and address barriers to the use of wind energy in 
coordination with stakeholders.
    In 2007, the United States installed more wind generation capacity 
than any other country by bringing on-line 5 GW of new wind 
installations. Wind is now a major source of new electricity 
generation, and accounts for roughly 30 percent of new capacity from 
all energy sources. Since 2000, wind energy has increased more than 6-
fold, from about 2.5 GW to nearly 16.8 GW today. While there are 
significant challenges, wind resources have the potential to provide up 
to 20 percent of our Nation's generation potential.
    The Wind Program believes that wind energy is at a transitional 
point, particularly for large land-based wind systems. The program is 
concentrating on reducing technological barriers that limit the growth 
potential of wind energy in the United States by focusing on improving 
cost, performance, and reliability of large scale land-based 
technology. As a part of the effort, NREL will be testing its first 
utility-scale multi-megawatt turbine at the National Wind Technology 
Center in Colorado, through a competitive CRADA solicitation.
    In addition, the Wind Program is facilitating wind energy's rapid 
market expansion by anticipating and addressing potential regulatory, 
transmission and manufacturing barriers; and investigating wind 
energy's application to other areas, including distributed and 
community owned wind projects.
    The Program's focus also includes energy storage efforts in 
coordination with the Office of Electricity Delivery and Energy 
Reliability to maximize wind energy resource utilization, which 
supports diversifying the domestic energy supply while enhancing system 
reliability.
                          water power program
    The Water Power Program's budget request of $3.0 million will 
support initial R&D activities, and follows an initial congressional 
appropriation of $9.9 million in fiscal year 2008. The program needs to 
evaluate the results of its fiscal year 2008 R&D projects and 
technology assessments (which will continue into fiscal year 2009) 
before considering further applied research efforts. The mission of the 
Water Power Program is to research and develop innovative and effective 
technologies capable of harnessing hydrokinetic energy resources, 
including ocean wave and current energy.
    The program will focus on conducting technology characterizations 
to identify manufacturers, performance limits and issues, known 
environmental impacts, and other relevant technical and market 
variables. In addition the program will engage in collaborative 
international activities.
                     geothermal technology program
    The fiscal year 2009 request for the Geothermal Technology Program 
is $30 million, which is an increase of $10.2 million from the fiscal 
year 2008 appropriation. The Geothermal Technology Program works in 
partnership with industry to establish Enhanced Geothermal Systems 
(EGS) as an economically competitive contributor to the U.S. energy 
supply. Geothermal energy generates ``base-load'' electricity and/or 
supplies heat for direct applications, including aquaculture, crop 
drying, and district heating, or for use in heat pumps to heat and cool 
buildings.
    The Program focuses on the innovative technology of Enhanced 
Geothermal Systems (EGS), which are engineered reservoirs created to 
produce energy from geothermal resources that would otherwise not be 
economical. EGS is a new pathway for producing geothermal energy by 
drilling wells into hot rock, fracturing the rock between the wells, 
and circulating a fluid through the fractured rock to extract the heat. 
While EGS reservoirs have been designed, built, and tested in various 
countries, a number of technical hurdles remain to be overcome, the 
most important involving creation of EGS reservoirs with commercial 
production rates and lifetimes. The Department's approach will 
concentrate initially on issues related to reservoir creation, 
operation, and management. This may involve working with cost-sharing 
partners at existing geothermal fields to develop, test, and perfect 
the tools needed to fracture hot, impermeable rock and efficiently 
circulate fluids.
    A feasibility study by the Massachusetts Institute of Technology 
(MIT) estimates that EGS could provide 100,000 MW of electric power by 
2050--10 percent of currently installed electric capacity. This 
compares with today's 2,800 MW of installed capacity at existing U.S. 
geothermal power plants using today's technology. Expected program 
outcomes will include creation of a commercial-scale geothermal 
reservoir and power plant (approximately 5 MW in generating capacity) 
capable of operating for 7 years by 2015. This initial plant, followed 
by others in differing geologic environments, should foster rapid 
growth in the use of geothermal energy as predicted by the MIT study.
                     building technologies program
    The Building Technologies Program's fiscal year 2009 request is 
$123.8 million, an increase of $14.8 million from the fiscal year 2008 
appropriation. The Building Technologies Program develops technologies, 
techniques, and tools for making residential and commercial buildings 
more energy efficient, productive, and cost-competitive. The Program's 
funding supports a portfolio of activities that includes solid state 
lighting (SSL), improved energy efficiency of other building components 
and equipment, and their effective integration using whole building 
system design techniques that will enable the design of net Zero Energy 
Buildings. The Program also includes the development of building codes 
and appliance standards and successful education and market 
introduction programs, including ENERGY STAR and EnergySmart Schools.
    The Residential and Commercial Buildings integration components of 
the Building Technologies Program aim to transform the carbon footprint 
of the built environment through Zero Energy Buildings. The 
residential-focused Building America subprogram focuses on reducing 
total energy use in a new home by 60 to 70 percent. During fiscal year 
2009, research for production-ready new residential buildings that are 
40 percent more efficient will continue for three climate zones, with 
completion in two. The Program's activities in the commercial sector 
are focused on alliances of leading market companies with national 
portfolios of buildings. The Program will engage with the developers of 
these buildings, which will provide the opportunity to better 
understand what R&D is needed to help promote the construction of 
highly efficient commercial buildings. DOE's role as convener of 
partnerships with developers and other key actors help promote 
leveraging of resources and encourage the private sector to undertake 
market transformation activities.
    The Emerging Technologies subprogram seeks to develop cost-
effective technologies for residential and commercial buildings that 
enable reductions in building energy use. Solid State Lighting will 
develop technologies that can help reduce commercial building lighting 
electricity consumption. Space Conditioning and Refrigeration R&D will 
continue work on innovative HVAC design concepts. Other highlights 
include highly insulating windows and building integrated solar heating 
and cooling systems.
    The Equipment Standards and Analysis subprogram develops minimum 
energy efficiency standards that are technologically feasible and 
economically justified as required by law. Federal energy conservation 
standards that have gone into effect since 1988 are projected to save a 
cumulative total of 75 quadrillion Btus (quads) of energy by the year 
2045 (in 2007, total annual United States consumption of primary energy 
was about 103 quads). Between fiscal year 2005 and fiscal year 2007, 
the Department identified and carried out significant enhancements to 
rulemaking activities. The Department has made a commitment to clear 
the backlog of delayed actions that accumulated during prior years, 
while simultaneously implementing all new requirements of the Energy 
Policy Act (EPACT) of 2005. EISA significantly increases the number of 
efficiency standards and test procedures DOE must develop. 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. Energy conservation standards for 10 products were 
initiated in fiscal year 2006 and 2007 that will continue in fiscal 
year 2009. In fiscal year 2008, efficiency standards rulemakings were 
initiated on four additional products. In fiscal year 2008, DOE is 
proceeding simultaneously on rulemakings for 15 products and 10 test 
procedures. In fiscal year 2009, four more standards and test 
procedures for seven more products will be added.
    The Technology Validation and Market Introduction subprogram funds 
activities that validate and promote clean, efficient, and domestic 
energy technologies. Expanding and modernizing the ENERGY STAR program 
to include solid state lighting, water heaters, photovoltaics, fuel 
cells, micro-wind turbines, combined heat and power, and other advanced 
technologies, as well as targeting the civic infrastructure (e.g., 
schools, hospitals, libraries, municipal facilities), are central 
activities that the program carries out to invest in Energy Smart 
solutions. DOE will continue to work with the Environmental Protection 
Agency on the development and implementation of Energy Star and other 
efforts to minimize duplication and maximize efficiency. In addition to 
these efforts, the Program focuses on outreach efforts to help move 
specific technologies--such as solid-state lighting and high-
performance windows--toward commercial applications. These efforts 
include design and rating tools, durability and product lifetime data, 
testing procedures, demonstrations, retailer education, and training on 
proper installation.
                    industrial technologies program
    The Industrial Technologies Program seeks to reduce the energy 
intensity (energy demand per unit of industrial output) of the U.S. 
industrial sector through coordinated research and development, 
validation, and technical assistance activities to increase 
dissemination of energy efficiency technologies and operating 
practices. The fiscal year 2009 budget request for the Industrial 
Technologies Program (ITP) is $62.1 million, which is $2.3 million less 
than the fiscal year 2008 appropriation. Internal funding shifts 
reflect a continued strategy to emphasize more effective ways to 
increase energy efficiency among energy intensive industries. The shift 
toward more crosscutting and higher impact R&D activities will allow 
ITP to develop advanced, energy-efficient technologies to serve a 
broader set of industries.
    The program will continue to support the Secretary of Energy's 
``Easy Ways to Save Energy'' campaign through the Save Energy Now (SEN) 
industrial energy savings assessments at the Nation's most energy-
intensive industrial facilities. This has been a very successful 
activity, having reached its 24-month goal of conducting 450 
assessments from 2006 through 2007. With 89 percent of the plants 
reporting results from these assessments, the program has identified 
savings of over 88 trillion Btus of source energy, including more than 
71 trillion Btus of natural gas, the amount used by almost a million 
U.S. homes. If implemented, the improvements recommended through SEN 
assessments have a potential energy savings of more than $727 million 
per year and could also reduce carbon dioxide emissions by 6.3 million 
metric tons annually, which is equivalent to taking over one million 
automobiles off the road
    Building on this success, ITP will expand partnerships with leading 
corporations across major manufacturing supply chain and deliver DOE 
plant assessments, tools, and technologies to enable dramatic energy 
efficient improvements, contributing to the EPACT 2005 goal of reducing 
industrial energy intensity by 2.5 percent per year from 2006 to 2016.
                   federal energy management program
    The Federal Energy Management Program (FEMP) budget request for 
fiscal year 2009 is $22 million, which is an increase of $2.2 million 
from the fiscal year 2008 appropriation. FEMP enhances energy security, 
environmental stewardship, and cost reduction within the Federal 
Government through reductions in energy intensity in buildings, 
increased use of renewable energy, and greater conservation of water. 
These goals are accomplished by means of technical assistance, 
coordination of Federal reporting and evaluation, supporting 
alternative fuel use in the Federal vehicle fleet, and supporting the 
Secretary's Transformational Energy Action Management (TEAM) 
Initiative.
    In a new effort this year, FEMP will support private sector 
development of alternative fuel stations at Federal sites, help the 
Federal Government identify opportunities for petroleum displacement to 
increase alternative fuel use, and conduct reporting and analysis of 
the Federal vehicle fleet. In addition, with DOE Specific Investments, 
FEMP will support the Secretary's TEAM Initiative, which will establish 
DOE as the Federal agency leader in strengthening energy and 
alternative fuels management. The TEAM Initiative works with DOE 
programs to help meet and exceed the goals of Executive Order 13423, 
such as a reduction of energy intensity of 30 percent by the end of 
fiscal year 2015.
    As part of the TEAM initiative, the Secretary has instructed all 
DOE sites to host private sector energy service companies to assess 
efficiency opportunities across the complex, addressing all lifecycle, 
cost-competitive options. DOE will lead by example, deploying a wide 
variety of lighting and other advanced technologies to achieve maximum 
energy savings. The Secretary's TEAM Initiative is bold and, as 
Congress looks to ``green'' the Capitol Complex, I would be pleased to 
provide additional information and periodic updates to this Committee 
on our efforts and actions.
        weatherization and intergovernmental activities program
    The fiscal year 2009 request for Weatherization and 
Intergovernmental Activities is $58.5 million. Stakeholders and 
partners include State and local governments, Native American Tribes, 
utilities, and international agencies and governments.
    Significant changes in the fiscal year 2009 budget request include 
increases for the State Energy Program and the Asia Pacific 
Partnership, a refocusing for Tribal Energy Activities, and conclusion 
of funding for the Weatherization Assistance Program (WAP) and the 
Renewable Energy Production Incentive. The results of DOE's 
weatherization assistance activities are little changed in the last 2 
decades: provision of positive limited benefits to selected recipients, 
but failing to catalyze broader solutions for the tens of millions of 
eligible homes that have never received retrofits. The Department 
requests no funding for WAP activities; however, States can continue to 
support weatherization assistance activities with resources provided by 
the Low-Income Home Energy Assistance Program at the Department of 
Health and Human Services. Concluding the program at DOE will allow the 
Department to focus on higher priority research and development as well 
as State, local, and utility energy projects in the State Grants 
program. Through fiscal year 2008, the Renewable Energy Production 
Incentive (REPI) provided financial incentive payments to publicly 
owned utilities, nonprofit electric cooperatives, and tribal 
governments and native corporations that own and operate qualifying 
facilities generating renewable electricity. The incentive value of 
REPI has diminished over time as renewable energy technologies have 
become competitive, rendering the program no longer necessary
    In fiscal year 2009, the State Energy Program will continue to 
include competitive grants for State policies and programs that 
increase adoption and compliance of advanced building energy codes, 
accelerate the use of performance contracting and alternative financing 
by State and local governments, and increase investments in utility 
delivered efficiency programs and other high priority EPACT 2005 and 
EISA programs.
    The State Energy Program helps enable State governments to target 
their high priority energy needs and expand clean energy choices for 
their citizens and businesses. Benefits include reduced energy use and 
costs, environmentally conscious economic development, increased 
renewable energy generation capacity, and lessened reliance on imported 
oil. A combination of technical assistance, outreach, and financial 
assistance support effective program implementation of the National 
Action Plan for Energy Efficiency and provisions of EPACT 2005 and 
EISA.
                     facilities and infrastructure
    The budget request for Facilities and Infrastructure supports 
operations and maintenance (O&M) for the National Renewable Energy 
Laboratory (NREL), a single-purpose laboratory dedicated to R&D for 
energy efficiency, renewable energy, and related technologies. The 
request for fiscal year 2009 is $13.9 million: $10.0 million for core 
O&M (a $3.1 million increase) and $4.0 million required to complete 
Phase I construction of the Energy Systems Integration Facility (ESIF).
    This budget request represents a decrease of $62.2 million compared 
to the fiscal year 2008 appropriation, primarily a reflection of 
Congress's fiscal year 2008 provision of $54.5 million to initiate 
construction activities for the ESIF and to begin additional site 
infrastructure work. Funding beyond that which is requested for fiscal 
year 2009 is not needed, as much of the construction taking place was 
fully funded in prior years. The remainder of the decrease is a result 
of including requested solar research capital equipment replacements 
within the Solar Energy Program budget, where such equipment is 
typically funded.
                               conclusion
    The penetration of EERE technologies into the marketplace could 
save consumers over $600 billion by the year 2030 and save as much as 
$4 trillion by 2050, cumulatively. Similarly, the technologies in our 
portfolio could avoid 6 gigatons of carbon (GTC) by 2030 and nearly 50 
GTC by 2050, cumulatively.\1\ With action plans, performance 
milestones, clearly articulated deliverables, and continued 
performance, EERE's budget request supports priority R&D and the 
achievement of stated goals. Our laboratory products and partnerships 
will help bring cleaner energy technologies and sources to commercial 
viability in the foreseeable future.
---------------------------------------------------------------------------
     \1\ Energy Efficiency and Renewable Energy Fiscal Year 2009 
Congressional Budget, 20.

    Senator Dorgan. Mr. Karsner, thank you very much. Finally, 
we will hear from David Frantz. Mr. Frantz, you may proceed.
STATEMENT OF DAVID G. FRANTZ, DIRECTOR, LOAN GUARANTEE 
            PROGRAM OFFICE, OFFICE OF THE CHIEF 
            FINANCIAL OFFICER
    Mr. Frantz. Mr. Chairman, members of the committee, I am 
pleased to be before you today to review our budget for fiscal 
year 2009 as well as give you a program update on our office.
    I am happy to inform you that significant progress on this 
program has been made over the past year. In fact, just 1 year 
ago, the Department began its processing of the first 143 
applications from the 2006 solicitation, and that period 
involved very rigorous technical and financial evaluations in 
accordance with criteria set forth by our Credit Review Board, 
the governing board of our program.

                   STAFFING OF LOAN GUARANTEE PROGRAM

    Coincidental with this activity, I was hired and began as a 
top priority: the immediate staffing of the office with 
permanent Government, Federal employees. In the way of a 
background, I have over 35 years of international project 
financing experience, and that also includes over 10 years of 
experience with the Overseas Private Investment Corporation as 
a director of loan origination.
    And I would add, parenthetically, that the initial cadre of 
our officers that we are hiring reflect my background. They are 
significant professional people who have long experience in the 
field and who also have experience with the Overseas Private 
Investment Corporation as well.

                   LOAN GUARANTEE PROGRAM APPLICANTS

    On October 4th, we reached our first significant milestone. 
On that day we announced the promulgation, the announcement of 
the release of the final regulations for our program under 
title XVII, and we also announced the selection of 16 
preapplicants to be invited to submit 4 applications for the 
Loan Guarantee Program.
    Prescreening conferences have been held with all of these 
applicants, finishing in the month of January, and all 16 have 
indicated the desire to proceed with us to full loan guarantees 
through our process of due diligence.
    In addition, a prodigious amount of work has been completed 
to formulate and write policies and procedures to execute this 
program and to institute systems that will facilitate us in a 
very responsive way to process these applications.

                         LOAN GUARANTEES BUDGET

    I would bring your attention to emphasize two points with 
respect to our 2009 budget. The first is that we are asking for 
$19.9 million of additional administrative expense to operate 
our office. And that is a function of the requirement to, 
essentially, double the size of our office within a year to 
accommodate our future solicitations.
    And, finally, we also are seeking an extension on the 
fiscal year 2008 budget in accordance with the report language. 
As you're aware, the whole obligation terminates on September 
30, 2009, and that's far too short a period of time for us to 
begin to prosecute our current workload as well as the new 
solicitations that you have envisioned in the report language. 
So we are seeking to extend that deadline to September 30, 
2010, for all projects other than the nuclear plant facilities 
and for the nuclear plant facilities to extend that deadline to 
2011.
    In addition to the report, the language requires us to 
submit to you and the House Committee on Appropriations a 
Solicitation Implementation Plan for our future solicitations. 
We're in the process of working on that plan, and we hope to 
have it up to you within a month or so.

                    SOLICITATION IMPLEMENTATION PLAN

    In conclusion, I would emphasize one or two items. We 
understand the objectives and roles of title XVII program. We 
are not a research and development program, nor are we an early 
stage venture capital finance group. We issue loan guarantees 
to help fund the advanced stages of projects that are designed 
to take pilot and documentation projects to full commercial 
viability.
    We, in conjunction with the Department's Program Offices, 
will seek innovation and eligible projects as well as 
environmental benefits, and a reasonable assurance of repayment 
of our guaranteed loans in order to bring advances into the 
market, enabling others to replicate or to expand these 
technologies with full participation of the private sector.
    Mitigating financial risk to the taxpayers is of utmost 
importance to us. In my personal conversations with the 
Secretary, he emphasized this point with me, and I can assure 
you our office is committed to do that.
    A number of measures are being taken to ensure risks are 
properly mitigated for each project including a thorough 
investigation and analysis of each project's financial, 
technical, and legal strengths and weaknesses, as well as all 
identifiable risks. In addition to the underwriting expertise 
of our office, each project will be reviewed in consultation 
with independent engineering consultants outside of the 
Department of Energy.

                           PREPARED STATEMENT

    Over the past 12 months a remarkable amount of work has 
been accomplished. Based on my experience at OPIC and my 
familiarity with other loan guarantee programs at other 
agencies in the Federal Government, I can tell you that the 
Department has moved very quickly in making the title XVII 
program operational. I know there has been some congressional 
frustration with the pace of activity, but we have sought to 
move quickly as possible while ensuring technical and fiscal 
soundness of the program.
    I appreciate the opportunity to be before you today, and I 
will be happy to answer any questions you may have. Thank you.
    [The statement follows:]
                 Prepared Statement of David G. Frantz
    Mr. Chairman and members of the committee, I am pleased to be 
before you today to present the Department of Energy's Loan Guarantee 
Program Office (LGPO) fiscal year 2009 budget proposal and program 
update. The LGPO administers the Federal loan guarantee program that 
was authorized for title XVII of the Energy Policy Act of 2005 (EPAct 
2005). Under this program, DOE may issue loan guarantees for innovative 
energy technology projects that avoid, reduce, or sequester air 
pollutants or anthropogenic emissions of greenhouse gases, and have a 
reasonable prospect of repaying the principal and interest on their 
debt obligations.
    I am happy to inform you that significant progress on this program 
has been made over the past year. Let me quickly review with you some 
salient milestones. A year ago this week, two very experienced 
individuals were detailed from the U.S. Treasury Department to help 
lead the effort of evaluating a total of 143 pre-applicants seeking an 
invitation to submit full applications for loan guarantees. The 143 
pre-applicants resulted from the initial solicitation of the program 
which officially closed on December 31, 2006. Supported by contractors, 
over the course of last summer the pre-applicants underwent a rigorous 
technical and financial review in accordance with criteria set forth by 
the Department of Energy's Credit Review Board (CRB), the governing 
board for the program. Coincidental with this activity, I was hired and 
began as a top priority the immediate staffing of the office with 
permanent Federal employees. In the way of background, I have over 35 
years of project finance experience, predominantly in energy, 
independent power and heavy infrastructure industries. I have spent the 
past 10 years with the Federal Government's Overseas Private Investment 
Corporation (OPIC) as a Director of Loan Origination, which provided me 
with significant experience working under the Federal Credit Reform Act 
of 1990.
    On October 4, 2007, DOE achieved two major milestones. DOE 
announced the release of its final regulations implementing the title 
XVII EPAct 2005. These regulations marked a significant step forward 
and were the result of a rigorous review and evaluation of Federal 
credit policy, public comments received on the notice of proposed 
rulemaking and analysis by DOE. The provisions of the final regulations 
have provided greater flexibility in the structuring of transactions as 
compared to the Guidelines originally published in August 2006, 
including the ability to provide guarantees up to 100 percent of one or 
more debt instruments employed in eligible projects. Simultaneously, 
the Department announced that 16 projects from the 143 pre-applications 
submitted in response to DOE's August 2006 initial solicitation would 
be invited to submit full applications for a loan guarantee.
    Pursuant to those invitations, pre-screening conferences were 
conducted with the 16 pre-applicants during the months of December 2007 
and January 2008 to provide the LGPO updates on the respective projects 
as well as to inform the project sponsors of the policies and 
procedures to be followed in preparing and submitting full 
applications. All 16 of the pre-applicants have indicated a desire to 
submit full applications and are currently in the process of preparing 
their applications in compliance with the requirements of title XVII 
program regulations. We expect that the first applications will be 
submitted to DOE this month through the Department's electronic data 
submission system, and the balance of the applications are expected to 
be received in an evenly distributed progression over the next several 
months. To date, the CRB has not established a firm deadline by which 
the 16 applications must be filed but the CRB may do so in the future. 
A prodigious amount of work has been completed to formulate and write 
policies and procedures for the application process; to establish the 
electronic data submission system for receipt of applications and 
supporting documents; to install requisite accounting systems and 
procedures for the office; and to develop a model for determining the 
credit subsidy cost of loan guarantees for projects that receive title 
XVII loan guarantees.
    The LGPO has worked aggressively to assemble a staff of highly 
qualified project finance experts with significant experience in the 
private sector as well as in Government working under the Federal 
Credit Reform Act of 1990 closing other Federal loan guarantees. In 
accordance with the fiscal year 2008 budget, the plan is to fulfill 
organizational staffing for a total of 16 Federal full time equivalent 
(FTE) employees by September 2008 augmented by 6 to 10 contractors. 
This organization is sufficient to perform the credit underwriting and 
due diligence process associated with the 16 projects invited to submit 
full applications, as well as to issue new solicitations within the 
next year. The schedule for hiring additional staff will be undertaken 
in close coordination with the requirements for managing the new 
solicitations and the processing of subsequent applications.
                    fiscal year 2009 budget request
    The Department requests $19.9 million in funding in fiscal year 
2009 for administrative expenses to operate the LGPO and for support 
personnel and associated costs. This request essentially doubles the 
size of the office, over the fiscal year 2008 appropriation, to support 
continued processing and then monitoring of loan guarantees that may be 
issued in response to the August 2006 solicitation, as well as the 
execution of new solicitations to be released this year. This request 
will be offset by fee collections from project sponsors in the same 
amount, as authorized both by EPAct 2005 and the Department's 
implementing regulations.
    In the Committee Report accompanying the Consolidated 
Appropriations Act, 2008, Congress stated the Department should issue 
no more than $38.5 billion in loan guarantees under the title XVII 
program before the end of fiscal year 2009. Pursuant to the act, the 
budgetary authority provided by the act to issue loan guarantees is 
available only until September 30, 2009. DOE's fiscal year 2009 budget 
request seeks to extend that budget authority through fiscal year 2010 
for all projects other than advanced nuclear power facilities and 
through fiscal year 2011 for advanced nuclear power facilities. This 
extension is necessitated by long development lead times for completing 
all of the steps preceding the issuance of loan guarantees for major 
energy projects. Of the total loan guarantee amounts made available by 
Congress and identified in the fiscal year 2009 budget request, $20.0 
billion will be available through fiscal year 2010 to support projects 
such as Uranium Enrichment, Coal Based Power, Advanced Coal 
Gasification, Renewables, and Electricity Delivery. The remaining $18.5 
billion will be available through fiscal year 2011 to support nuclear 
power facilities. The $38.5 billion total is in addition to the $4.0 
billion in authority provided in fiscal year 2007 under Public Law 110-
5.
 fiscal year 2008 and fiscal year 2009 solicitation implementation plan
    The Consolidated Appropriations Act, 2008 requires that at least 45 
days prior to the execution of a new loan guarantee solicitation, DOE 
must submit a loan guarantee implementation plan to the Appropriations 
Committee of both houses of Congress. The implementation plan must 
define award levels and eligible technologies. DOE is in the process of 
preparing such an implementation plan. The Department plans to submit 
the plan to the Committees on Appropriations later this month.
                               conclusion
    In conclusion, I would like to emphasize the following points:
    We understand the role and objectives of the title XVII loan 
guarantee program. We are not a research and development program nor 
are we early stage venture capital providers. We issue loan guarantees 
to help fund the advanced stages of projects that are designed to take 
pilot and demonstration projects to full commercial viability. We, in 
conjunction with the Department's Program Offices, will seek innovation 
in eligible projects as well as environmental benefits, and a 
reasonable assurance of repayment of our guaranteed loans, in order to 
bring advances into the market enabling others to replicate and to 
expand these technologies with full participation of the private 
markets.
    Mitigating financial risk to taxpayers is of utmost importance to 
Secretary Bodman and to the LGPO in implementing the title XVII 
program. A number of measures are being taken to ensure risks are 
properly mitigated for each project prior to approval of a loan 
guarantee. First, the due diligence process includes a thorough 
investigation and analysis of each project's financial, technical, and 
legal strengths and weaknesses as well as all identifiable risks. In 
addition to the underwriting expertise of the LGPO staff, each project 
will be reviewed in consultation with independent engineering 
consultants. Finally, in addition to taking a significant equity stake 
in a project, each project sponsor will also be required to pay to the 
Federal Government the credit subsidy cost to offset the risks 
associated with the DOE's issuance of the loan guarantee.
    The LGPO, when evaluating the eligibility of projects for loan 
guarantees, and throughout the process of negotiating terms and 
conditions with eligible applicants, will give due consideration to the 
technological and commercial maturity of each project in its 
development cycle. For that purpose, the LGPO will draw upon technical 
appraisals from experts both within and outside DOE.
    Over the past 12 months, a remarkable amount of work has been 
accomplished. Based on my experience at OPIC and my familiarity with 
loan guarantee programs at other agencies, I can tell you that the 
Department has moved very quickly in making the title XVII program 
operational. I know there has been some Congressional frustration with 
the pace of activity, but we have sought to move as quickly as possible 
while ensuring the technical and fiscal soundness of the program. We 
are continuing to recruit additional qualified staff to finalize the 
credit subsidy model, as well as to institute comprehensive policies 
and procedures to initiate the application and due diligence process. 
Finally, we are developing state of the art accounting and processing 
systems that will allow the LGPO to monitor and manage the loans over 
the life of the projects.
    I appreciate the opportunity to appear before you today. I will be 
happy to take any questions that the members of the committee may have.

    Senator Dorgan. Mr. Frantz, thank you very much.
    We thank all three of you for testifying. Senator Cochran 
has arrived. Senator Cochran, did you have an opening 
statement?

                   STATEMENT OF SENATOR THAD COCHRAN

    Senator Cochran. Mr. Chairman, I simply want to 
congratulate the witnesses for the work they're doing to lead 
the way with the President's Competitiveness Initiative. It's 
hard work, and I think you're doing a commendable job, and I 
ask unanimous consent that the balance of my statement be 
printed in the record.
    Senator Dorgan. Without objection.
    [The statement follows:]
               Prepared Statement of Senator Thad Cochran
    Mr. Chairman, I appreciate your holding this hearing to review 
budgets of the Department of Energy's Office of Energy Efficiency and 
Renewable Energy, Office of Loan Guarantees, and Office of Science. 
Development of efficient and clean energy technologies is one of the 
most pressing issues in the world today. I'm glad that we are here to 
consider the budgets for these accounts within the Department of 
Energy. I am pleased to welcome Dr. Raymond Orbach, who has been 
gracious in his efforts to keep me informed about current initiatives 
in the Office of Science. I'd also like to thank Dr. Karsner and Mr. 
Frantz for being here to provide testimony and answer questions.
    It is important that the Department continue to look for 
alternative and renewable sources of energy to lessen our dependence on 
foreign sources of oil and gas, while promoting cleaner energy 
production. Mississippi is blessed with abundant resources capable of 
producing biomass-based energy, and funds need to be directed to the 
unique capacities of the Southeastern region of the United States. In 
order to reach a goal of domestic energy sustainability, we must 
research and develop a broad energy portfolio. I am hopeful that 
partnerships between Mississippi's research institutions and the 
Department of Energy will continued be strengthened.
    I am glad that the Department of Energy has created cohesion 
between the Office of Science and the Office of Energy Efficiency and 
Renewable Energy. Without basic scientific research capability, the 
United States cannot reap the benefits of our natural resources to meet 
our growing energy demand. As the rest of the world rapidly increases 
energy demand, they are also advancing their scientific research. We 
need to stay competitive in the world market and make wise choices 
about fulfilling our energy needs.
    Finally, I am pleased that the Loan Guarantee program has begun
    designating its appropriated funds to deserving technologies. I 
hope the program will continue to succeed in helping to fund forward-
thinking projects.
    Thank you all for your time today and for the good work you are 
doing.

                        RENEWABLE ENERGY FUNDING

    Senator Dorgan. First of all, Mr. Karsner, I'm going to ask 
you a series of questions and as I've indicated before, I'm 
pleased that you have joined public service. I think you do an 
excellent job, and have an excitement and a passion for 
renewable energy. So let that be a precursor to my questions.
    You indicate in your testimony, Mr. Karsner, EERE's fiscal 
year 2009 request of $1.25 billion is approximately $19 million 
higher than fiscal year 2008, and as I heard you I thought, 
well, that's good news. At least they are proposing an 
increase. And then I took a look at the grid sheet and saw that 
I'd already known: In fact, the budget proposal is nearly $450 
million less than the Congress appropriated last year.
    So it's clever to say this is a $19 million increase, but, 
in fact, your budget requests for a very important part of the 
Energy Department is close to a half a billion dollars less 
than last year. To me, that's not justifiable, and so let me 
describe my concern.
    Hydrogen technology. I'm a big fan of hydrogen fuel cells. 
Senator Domenici and I were the only two legislators invited to 
a big deal with President Bush about 3 years ago, because both 
of us have been big supporters of hydrogen, hydrogen fuel cell 
futures. So we went down to the Building Museum, and the 
President talked about his support. The fact is, this year's 
request for hydrogen is not only well under last year's 
request--it cuts it by well over a quarter--it's $50 million 
short of what we were spending three years ago.
    Weatherization Assistance is zero. And I'm going to show 
you when we talk about this, the McMillan Report demonstrates 
that building issues are by far the most likely areas to 
achieve substantial gains in energy efficiency. You know, my 
concern about solar energy is cut. The fact is, we're way 
behind in solar energy, and we ought to be doing much more with 
respect to solar.
    So let me have you take a shot at that. I know you have a 
passion for these things. I know you can't possibly be up here 
feeling good about a budget request that's nearly a half a 
billion dollars under what we gave your office last year. How 
bad do you feel about this?
    Mr. Karsner. Well, thank you, Mr. Chairman, and thanks for 
your passionate support of our portfolio.
    I feel good every day I serve the President and get to work 
with Congress and advance these goals. So to be clear, the 
budget request is above our 2008 request. Of course, the 
Congress was more generous with the request than last year--and 
that was an aberration over the historical line--so we enjoyed 
an enormous plus-up of our portfolio last year, an 
unanticipated surprise, and we are working to integrate and 
manage that money usefully.
    But in terms of the multiyear planning, the programmatic 
technological R&D and deployment portfolio, it is a substantial 
aberration that we went up almost 50 percent last year, and so 
what I'm suggesting is that this year's request is back in line 
with what the administration's request had been consistent.
    Senator Dorgan. Well, Mr. Karsner--let me apologize for 
interrupting you--the decision by myself and Senator Domenici 
and other members of this subcommittee, should not be called an 
aberration. We decided that this is where we wanted to invest 
the money because, in the context of the Energy bill that 
Congress passed, we decided we have to do much, much, much more 
in renewables.
    And, if I might continue to interrupt for one second, this 
is the McKinsey & Company study which you're well aware of.
    Mr. Karsner. Yes.
    Senator Dorgan. Go to the far left side. By far the biggest 
bang for the buck by far in terms of saving energy is building 
insulation. And yet you come with this proposal to zero out 
Weatherization Assistance. I mean, just because we added a half 
a billion dollars in this day and age when energy is so 
critical, don't call it an aberration. It was a decision by a 
subcommittee that was a very informed decision.
    I'm sorry to interrupt.
    Mr. Karsner. No, it's a quite fair statement.
    Would you like me to address each of those, categorically?
    Senator Dorgan. Please do.

                      HYDROGEN TECHNOLOGY FUNDING

    Mr. Karsner. Okay. First let's talk about hydrogen. 
Hydrogen, obviously, was announced in the 2003 State of the 
Union and the President introduced it, a 5-year plan for $1.2 
billion. The Department had completed that 5-year plan in 2008 
for the $1.2 billion. Hydrogen remains amongst the most 
robustly funded of any of the programs in the EERE portfolio, 
precisely because of the progress that was made during the 
years of the hydrogen fuel initiative that enabled us to focus 
on the acute problems and the metrics that would define the 
barriers that needed to be overcome in order to achieve a 2014 
commercialization decision.
    We have upped the amount of budgetary focus on those key 
areas, principally: on-board storage in the vehicles that would 
enable a 300-mile driving range and further reduction of the 
fuel cell stacks, the Pennfuel cell stacks, that would get them 
to the programmatic target of $30 per kilowatt on a 
manufactured basis. We are making continual progress on that, 
but we seek to accelerate the progress by moving more money, 
disproportionately, into those areas.
    It's a little bit deceptive when we talk about the amount 
of money it was cut, because, actually, more than half of the 
hydrogen funding that appears to be lowered was moved over into 
the Vehicles Technology program--things like education cogent 
standard, technology validation, and demonstration--because of 
the need to diversify all of those things across biofuels, 
across plug-ins and hydrogen. In other words, Vehicles 
Technologies was a better-placed program to have a more 
agnostic technology-neutral view of all the technologies that 
we are cultivating for gasoline displacement. In order to do 
that, it has sort of become the air traffic control of 
transportation platforms for education cogent standard.
    The other portion of hydrogen that was diminished are 
specifically those elements that we think are ready for prime 
time and commercialization, and eligible for the Loan Guarantee 
Program today, and that would be renewable production of 
hydrogen, principally through electrolysis. Electrolysis is not 
overly high tech; there is not a lot of value added. When 
compared to the amount of investment, we need to dedicate the 
fuel cell stacks and storage, and so we think we can still, in 
places like the Dakotas, wind power to hydrogen with 
electrolysis using loan guarantees on a commercial basis today. 
That would be a better use of the $10 billion allocation that 
we have in that area. There are some things that need to 
graduate out based on the progress that we've made. That really 
sort of addresses hydrogen. Would you like me to go on, on 
this?

                         WEATHERIZATION GRANTS

    Senator Dorgan. Well, because I want my colleagues to have 
ample time. Weatherization you zero out, and I was thinking of 
the--I forget who it was describe something as the 
``homeopathic soup made from boiling the shadow of a pigeon.''
    How do you zero out weatherization and come here and say 
this is a good approach to dealing with energy efficiency?
    Mr. Karsner. Well, we're driven precisely by the chart that 
you held up with regard to the need to address building 
technologies in the built environment. The question isn't what 
is the mission of weatherization with respect to doing that, 
but what is the efficacy and efficiency of this mechanism, this 
program in doing that?
    Weatherization grants are income-related assistance grants 
that are good and worthwhile things for the Federal Government 
to do, but, chronically, every year we have a discussion about 
not whether we should do them but where in the Federal budget 
they belong. Because competing against the Building Technology 
programs that are the ones that can satisfy the McKinsey 
metrics for 50 percent efficiency savings and that get 20-to-1 
return, these chronically fall short, being rated at about 1.5 
return on the dollars.
    All of the metrics for weatherization suggest that it 
should be competed where it belongs in income-related 
assistance programming, which is a good and worthwhile thing, 
but it is, unfortunately, lodged to compete against these 
building technologies that deal with climate change, national 
security, that require much greater leveraging.
    Senator Dorgan. But the President does not recommend it be 
over in the other area competing in his budget as I see the 
budget. So, I understand your point, but that's not what the 
President is recommending.
    Mr. Frantz, I'm going to allow my colleagues, Senator 
Domenici and Senator Craig to have a pretty good opportunity to 
talk to you, and I know they've got a lot on their minds.
    And, Dr. Orbach, I'm going to wait until a second round. I 
appreciate the work that goes on at our laboratories. Our 
laboratories are very important institutions for investment in 
the future of this country's science. And so I'll wait. But I 
appreciate your testimony, and you've raised a lot of 
interesting questions as well.
    Senator Domenici.

                            LOAN GUARANTEES

    Senator Domenici. Well, first, Mr. Chairman, thank you for 
holding this meeting, and let's hope that within the next 2 or 
3 months we will be fully aware of the facts and the funding 
that we are going to put together for the country in this bill, 
which many fail to understand is so important to the country, 
this small appropriations bill.
    First, let me talk about loan guarantees because nothing is 
more frustrating--it's not your fault, Mr. Frantz, but my good 
friend, Senator Craig, just handed me a piece of paper a little 
bit ago, and he put two dates on it, 2005 and 2011, because you 
indicated that you probably needed 2011 for the Nuclear--which 
is not your fault again. But we just looked at those two 
numbers and shook our heads.
    Six years from the passage of the bill, the General Energy 
bill first in 12 or 15 years that had a provision in it about 
loan guarantees that, frankly, I can tell you everyone on this 
committee that helped with it--two of the members here helped 
on it--he helped a lot--we thought we passed a loan guarantee 
provision in that bill, and we run it through every lawyer 
around, and we thought it was self-executed. And if you read 
it, it's clear that the full authorization for as much loan 
guarantee authority as the Secretary wanted, he could exercise. 
He didn't have to come back to Congress, and we were very 
happy. We thought even though we had then a reluctant Secretary 
of Energy--he was reluctant, he didn't think loan guarantees 
were the right thing--but let me make sure it's understood, he 
changed his mind, and he's been a strong supporter. But the 
changing of the mind took a little while.
    Then we have the Secretary of the Treasury. You remember 
that, Senator Craig. I came to you and said, ``Can you imagine? 
Now we have even a bigger bomber against us, the Secretary of 
the Treasury.'' He didn't know what he was talking about--
excuse me, Mr. Secretary, but you didn't. He thought--he didn't 
read the section of the law, he thought we were pledging the 
Federal Government's full faith in credit to these loan 
guarantees when we aren't. And he didn't read they would pay 
for themselves, and they'd pay an up-front fee equivalent to 
what the estimate risk was. That was the theme, right? And it 
was right.
    So contrary to that we had to go through this whole process 
of appropriating it, getting you hired, setting up a whole new 
operation, and it's been 6 years and we still do not--it'll be 
6 years and we might get some of the loan guarantees for 
Nuclear. They're a little different, and it's how many do you 
have? How many do you clear?
    Senator Craig. Sixteen, Senator.
    Senator Domenici. Sixteen. They're different than that, and 
they're going to be big guarantees for a project, and we 
understand that's not going to be quite as difficult as sorting 
out, because you're not going to have 50 to compete. And we've 
got seven formal applications pending, though, which is rather 
exciting for our country.
    Now, let me ask you, do you have everything you need to 
proceed with your job?
    Mr. Frantz. I do, sir, thank you.
    Senator Domenici. You're adequately funded and adequately--
the Energy Department gives you adequate authority?
    Mr. Frantz. Yes, sir, Senator. With the approval of this 
budget, I'll have sufficient resource to prosecute the----
    Senator Domenici. All right. Now let me ask you, you were 
with which department of the Federal Government doing loan 
guarantees?
    Mr. Frantz. With the Overseas Private Investment 
Corporation, sir.
    Senator Domenici. Now, doesn't it strike you strange that 
the OPIC made money on its loan guarantees using the same 
provisions that we are? They don't lose money, they make money, 
and we've got the Office, the Congressional Budget Office, 
insisting that this one is going to lose 1 percent because 
we're going to make mistakes. You didn't even know who you are, 
what--how good you are, you're just going to lose 1 percent. So 
he charges us $352 million for the whole portfolio even though 
we haven't spent a penny yet.
    Does that strike you as a little bit wrong?
    Mr. Frantz. It does, sir. As a matter of fact, I made a 
presentation, ironically enough, to the Congressional Budget 
Office on December 7, on this very subject and made the very 
point that you're making. And that is when a self-pay program 
which differentiates us from the Overseas Private Investment 
Corporation, as you're well aware, where our clients are 
actually paying this credit subsidy cost to cover our risk, 
that seems redundant, to say the very least, that this 
additional 1 percent would be levied on the projects.
    The answer, the only answer we've received, is that it's 
because it's a new program and there is the technology aspect, 
the unproven technology risk associated with them.
    Senator Domenici. Well, when you build a nuclear 
powerplant, it isn't as if somebody is toying around with new 
technology. When they invest $4 billion, they're using a 
technology that is well known, and it has passed all kinds of 
gifted overseers to make sure that it's correct, and all kinds 
of things are built into the law to make sure that this 
happens. And so it's not like a gamble. They wouldn't gamble. 
American industry wouldn't gamble on nuclear power if they 
thought it was what he thinks over there at CBO.
    Thank you very much. Let me move over to Dr. Orbach.

                          AMERICA COMPETES ACT

    Dr. Orbach, last August Congress passed the President's--
and the President signed--COMPETES, the COMPETES law. This 
proposal is consistent with the recommendations of the National 
Academy of Sciences rising above the gathering storm, and it 
directs the Department to focus greater attention on Science, 
Mathematics, Education.
    Can you tell us, specifically, how your Department is 
supporting this legislation, and how much money is provided in 
the President's request, if you know, for COMPETES legislation?
    Dr. Orbach. Well, in the educational----
    Senator Domenici. For COMPETES.
    Dr. Orbach. For the COMPETES----
    Senator Domenici. Yes.
    Dr. Orbach [continuing]. Itself, I'll have to answer that, 
for the record, our budget is responsive to the America 
COMPETES Act and actually covers the issues that were 
addressed. So I would say that our increase in the budget 
request would deal with the America COMPETES Act.
    Senator Domenici. All right.
    Dr. Orbach. In the specific area of education, we've 
increased the Workforce Development program within the Office 
of Science together with the Fellowship program that matched 
the education components of the America COMPETES Act. About 
half of them--there's a considerable opportunity there--will be 
found in our fiscal year 2009 budget request.
    Senator Domenici. So is it fair to say that this time we 
are taking the COMPETES Act seriously, and we're attempting to 
fund it?
    Dr. Orbach. Yes, sir. I believe it's an opportunity for our 
country, and we are going to be fully behind it.

             LOS ALAMOS NEUTRON SCATTERING CENTER (LANSCE)

    Senator Domenici. All right. LANSCE Refurbishment and 
MaRIE, a proposal that is built around LANSCE; Dr. Orbach, you 
and I have spoken extensively about maintaining our science 
capability at our national laboratories, both the Office of 
Science facilities and NNSA labs. I believe you share my belief 
that we need to update LANSCE at the LANSCE facility to sustain 
cutting-edge science at that lab on materials research. That's 
what it has to do with. This will have relevant science 
applications for both NNSA Weapons programs and the Office of 
Science.
    Now, why doesn't the 2009 budget request provide funding 
necessary to upgrade this excellent facility called LANSCE?
    Dr. Orbach. Well, our part of the funding that surrounds 
the operations of LANSCE works through the Lujan Neutron 
Center, and that's fully funded in the President's request.
    In addition, the Nuclear Physics program has increased its 
funding at Los Alamos to about $4 million. And, finally, we 
have invited Los Alamos to participate in the Energy Frontier 
Research Center competition, and there is a provision in there 
for materials under extreme conditions. And we think this is an 
opportunity for the whole country, but especially for Los 
Alamos in the competitive environment.

                    ENERGY FRONTIER RESEARCH CENTERS

    Senator Domenici. What are the frontiers of science that 
you spoke of?
    Dr. Orbach. The Energy Frontier Research Centers cover the 
basic science that will enable energy prospects for our country 
for the future. Very frankly, we can't get to where we want to 
go using technology that was invented in the 19th century and 
developed in the 20th century.
    The opportunities in the 21st century, as I outlined at the 
atomic molecular level, have yet to be plumbed. And those 
centers are focused on those issues, namely energy issues that 
use modern technology.
    We're talking about opportunities for photosynthesis, 
artificial photosynthesis to take solar energy and produce 
fuels. We're talking about an electrical energy storage that 
will enable the grid issue, which was brought up before, to be 
dealt with which we can't do now, but with advanced 
technologies, with nanotechnology, and multielectron transfer, 
we believe are possible.
    And other elements that I can go into----
    Senator Domenici. That's fine.
    Dr. Orbach [continuing]. Of that basis.
    Senator Domenici. So you're going to do this kind of 
advanced frontier work?
    Dr. Orbach. Absolutely.
    Senator Domenici. Thank you, Mr. Chairman. I have some 
additional questions. I'll wait or I'll submit them.

                   ETHANOL TECHNOLOGY AND PRODUCTION

    Senator Dorgan. Senator Craig?
    Senator Craig. Thank you very much, Mr. Chairman.
    Mr. Frantz, the chairman has already offered you up to 
Senator Domenici and I, so I will not miss that challenge or 
opportunity.
    Let me walk you through a scenario that's going on in 
America as we speak that would suggest to me your sense of 
urgency in dealing with some of these loan guarantees in 
Advance Technology. Last year we produced 7.8 billion gallons 
worth of ethanol, corn-based. Everybody's frustrated now by its 
potential disruption of the food chain right down to, if you 
will, tortilla shells. And the reality that America's 
agriculture will suggest that we may be planting 8 percent less 
corn this year than we did last year.
    We just have a new ethanol plant coming on in Idaho, and 
you're going to see unit trains of corn, literally, moving out 
of the Midwest to Idaho because we're not a corn-production 
State. We're largely cold weather grains and all of that, and 
yet those prices, the whole commodity market is considered by, 
at least historic values, upside down today.
    Farmers are smiling and they should, and they're profiting 
and they should. The consumer is beginning to feel it at the 
shelf in some areas.
    Having said that, last year we suggested, by law, that if 
ethanol production by 2022 can be at 36 billion gallons and yet 
we anticipate that corn-base can only take us to about 15, now 
having said that, we are already stressing out under the 
current environment at 8 to 10 billion gallons. So 15 may be a 
very real stretch unless Monsanto can bring on their GMO of 300 
bushel of corn. But that's still out there in the scientist 
eye.
    Now the environmentalists are concerned about the carbon 
footprint of corn-based ethanol and what that does in climate 
change, and it's very energy intensive, and it needs to be 
subsidized, but yet it's factoring into the price at the pump. 
Articles last week suggested that consumers were paying less 
for gas because of ethanol in the world market.
    My point is quite simple: We believe, many of us who spend 
a lot of time looking at this, that to get to the 36 billion 
gallons or near that, we've got to get to cellulosic ethanol, 
and we must get there as soon as we can. And if you were the 
consumer out there--and you are, like all of us are--buying 
$3.30 or $3.40 a gallon for gas, there is a very real sense of 
urgency, the reason I penciled for Senator Domenici the spread 
of 6 years of time of bureaucratic movement in which we sense 
no urgency whatsoever.
    Now, having said that, New York Auto Show, almost every 
automobile on the floor was a flex fuel or E85 or an electric 
car. And yet the world is not yet ready to produce that, or at 
least we had our discussion about hydrogen today, and the world 
is not yet ready to produce it in the volume that the car 
companies will need because they're about ready to bring to 
commercial value a hydrogen fuel cell car.
    Time is of the essence, and I know you talk very 
optimistically about how you've geared up to handle this. Now, 
I hope that you have running shoes on and you are bringing that 
sense of urgency into that staff.
    Now, diligence, surely. Responsibility, of course. But run 
12 hours a day, turn the lights on, don't oh-hum this and move 
it through. America is ready to become independent, and we are 
struggling to get there, and this whole committee senses that, 
and that's why we jumped in front of it in 2005, and we hit it 
again last year. And we're phenomenally frustrated when it's 
handed off downtown to a sluggish, uncertain, frustrating, and 
sometimes less-than-willing participant.
    I don't know if we can get to cellulosic. I think there are 
some commercial operations stood up, but we ought to try. And 
we ought to try and if we fail in one, there are some 
technologies out there that might lead to the front.
    Now, if you had the loan guarantees ready 2 years ago, we 
would probably have a commercial-grade stand-up operation going 
right now.
    Senator Dorgan. For which?
    Senator Craig. But we don't have that.
    Senator Dorgan. For what?
    Senator Craig. Cellulosic ethanol.
    Senator Dorgan. Cellulosic ethanol.
    Senator Craig. At least that's what we're told by the 
industries involved. I don't necessarily believe you need to 
respond to my small rant, but I hope you appreciate what we're 
sensing on the ground with the consumer, both in food and in 
energy as to their frustration today about their pocketbooks 
being stretched beyond their capability.
    Mr. Orbach, I would like to suggest that in my conversation 
with the Center for Advanced Energy Studies in Idaho this last 
week, they will be contacting you, and sensing the 
opportunities that you hold in your office and that we hold at 
the lab; and I assured them that they should anticipate and 
expect full cooperation from you, as I know that will be the 
case, and I thank you for it.
    I'm out of time, I'll come back. Thank you.
    Senator Dorgan. Senator Craig, thank you very much.
    Senator Murray?

                       PHYSICAL SCIENCES FACILITY

    Senator Murray. Thank you very much.
    Dr. Orbach, as you know well, we've had a number of 
conversations about the level of funding and various pieces of 
the budget that relate to the tri-party memorandum of 
understanding for the Physical Sciences Building being built at 
PNNL, and the 300 Area. I know you know the topic well.
    Last year's fiscal year 2008 appropriations resulted in 
about $65 million to the Department of Energy and the 
Department of Homeland Security. That wasn't an easy task 
because the Department of Homeland Security request was zero, 
and we had to work with our colleagues here to include an 
increase of $15 million for that project.
    I appreciate that the Department of Energy this year has 
requested the appropriate level of funding in the 2009 budget. 
However, the Department of Homeland Security's 2009 budget 
request is not what was assumed in that memorandum of 
understanding. Now, I have no idea what conversations have been 
between your office and Under Secretary Cohen's office, but I 
have been ensured by them that whatever additional funds I will 
be able to add to the Department of Homeland Security budget 
for 2009 will be received, enthusiastically.
    I wanted to ask you while you're in front of our committee 
today what your understanding is of the reasons why DHS didn't 
see the required funding in 2009 consistent with that MOU.
    Dr. Orbach. Senator Murray, first of all I want to thank 
you for your help in moving this critical project forward. We 
deeply appreciate it.
    To be honest with you, I don't know why DHS submitted the 
numbers that it did. It is, as you point out, $13 million less 
than the MOU requirement that we had agreed to. I have been in 
contact through my staff with Under Secretary Cohen, and your 
description is the same as mine, namely, that he is eager to 
implement the MOU. We will do everything that we can to see to 
it that that building is built on time and on schedule.
    Senator Murray. Okay. I don't know the timing for the 
fiscal year 2009 appropriations bill, but ensuring that we have 
sufficient funds for that MOU is going to be a top priority of 
mine.
    I want to ask you if I have your commitment that you will 
do what you can to assure this project as it is currently 
envisioned is going to continue on schedule regardless of when 
the funding is made available in 2009?
    Dr. Orbach. We'll do our very best to do precisely that.
    Senator Murray. Okay, I appreciate that, and we'll work 
with you to do that.

              ENVIRONMENTAL MOLECULAR SCIENCES LABORATORY

    Dr. Orbach, I'm also really pleased to see a small increase 
in funding for the Environmental Molecular Sciences Laboratory, 
and I know the lab is planning to upgrade some of their 
equipment that's now several years old. I wanted to ask you 
today what your vision is for EMSL and what kind of challenges 
you foresee in the future?
    Dr. Orbach. Well, I have two comments to make both of which 
are laudatory about EMSL. When we visited 4 years ago, we set 
them a target. We said this is over the edge. ``This is beyond 
normal, and if you can meet it, we will continue and expand our 
support of the laboratory.'' We didn't tell them what areas to 
invest in, but those two areas that they chose are now world-
leading, and Interfacial Chemistry and Subsurface 
Biogeochemistry, if you say that phrase, people think EMSL. And 
it's really wonderful.
    The opening of the new facility, jointly with Washington 
State University, is again a statement of how successful EMSL 
has been and how it now will have an educational component as 
well.

                  SCIENCES LABORATORIES INFRASTRUCTURE

    With regard to the future, and in particular the 
infrastructure issue that you raised, this is, unfortunately, 
true not just of PNNL but of all of our laboratories. And you 
will see an increase in what we call our SLI component, our 
infrastructure component in the President's request. And I can 
tell you that over the next 5 to 10 years you will see that 
component increasing substantially as we attempt to address 
these needs.
    I met yesterday with all 10 of the laboratory directors of 
the Office of Science, and to a person they spoke of the need 
for infrastructure support. And you will see substantial 
numbers increases as a consequence in our budget proposals.
    Senator Murray. Very good, I appreciate that.
    Mr. Karsner, I also wanted to ask you about the budget 
request for a small investment in Water Power to study the 
potential of marine, ocean, and wave energy. As you know, the 
2007 Energy bill explicitly authorizes R&D for marine and 
hydrokinetic technologies--can you tell me a little bit about 
what your goal is for that research, including ocean and wave 
energies?
    Mr. Karsner. Yes, Senator. I'm actually quite excited about 
the introduction of that budgetary item as part of our request, 
along with the geothermal--reinvention of the Geothermal 
Program. It demonstrates what I'd like to think of as portfolio 
agility as new technologies evolve.
    Obviously, in the early years, it is standing up the 
correct programmatic organizational piece that would be 
disproportionate than what we would predict for subsequent 
years. But we have specific statutory requirements as well that 
need to be addressed in terms of soliciting for Marine Energy 
Center partnerships around the countries. So finding out where 
the best skills lie in universities and laboratories, in 
businesses and product manufacturers around the country, we are 
not long for putting out a solicitation for that purpose in the 
very near future.
    As well, we intend to facilitate some of the existing 
technologies that we know have evolved during the period of 
time that the Department has been engaged in this activity. So 
thanks for run-of-the-river hydro, buoys off the west coast of 
Washington and Oregon, in Hawaii, other places, and we also see 
an international component to this. There are other nations 
that have been engaged in this activity, principally in the 
United Kingdom and Scotland, in Spain, in China, where we want 
to sort of galvanize what the best of has been out and around 
the world.
    We have our work cut out for us to catalyze something new. 
There's a hardware component to it--an organizational component 
to it.
    Senator Murray. Okay. Well, you may know that the DOE's 
only Marine Science Lab is located on the Olympic peninsula in 
my home State.
    Mr. Karsner. I hope to visit there soon.
    Senator Murray. And we'd love to have you come out and see 
it.
    Mr. Karsner. Yes, and I'm going to.
    Senator Murray. I think you'd be really excited about it 
and some of the opportunities there.
    Mr. Karsner. Sure.
    Senator Murray. And while you're out--my time is short--I'd 
love to have you stop by the Bioproduct Science and Engineering 
Lab at WSU and see that great public partnership there that's 
working on some biofuel and bioproduct.
    Mr. Karsner. My intention is to visit PNNL on May 8. 
Hopefully, I can work with your office in collaborating on it.
    Senator Murray. We'd love to work with you on that. 
Fantastic. Thank you very much.
    Senator Dorgan. Senator Allard?

                          ENERGY TRANSMISSION

    Senator Allard. Thank you, Mr. Chairman, and Mr. Karsner. 
It's good to see you with us this morning. I'm real proud of 
the work that's being done on Colorado Renewable Energy.
    I'm going to focus on another tangential area which I think 
is important when we look at the total energy picture. One is 
transmission. You know, particularly, in rural areas 
transmission is an issue where you're having electricity travel 
over a certain period of time. There's not only access to 
getting transmission lines, but I think there's some efficiency 
issues that come out.
    What are we doing to develop some technology where, when 
you move your electrical current over a long period of time, 
you don't lose a lot of the electrons in the transmission 
process? And what are you doing in that particular area?
    Mr. Karsner. Thank you, Senator, and thank you for your 
leadership, both in terms of the Colorado Caucus and hosting 
NREL and the Renewable Caucus here up on the Hill. Let me say 
that the principal responsibility for the questions that you've 
asked reside in my colleague Kevin Kolevar's office, the Office 
of Electricity which at one point was part of our office, but 
has, because of the growing role----
    Senator Allard. Yes.
    Mr. Karsner [continuing]. Of the issues that you just 
addressed has stood up admirably, an excellent program for both 
emergency response and grid integration issues.
    On the latter, grid integration and integrating the new 
technologies to meet the intrinsic characteristics of renewable 
technologies, Kevin and I have worked very closely. In fact, we 
jointly program a great deal, and much of that is reflected in 
the budget. He talks about long distance DC lines and available 
technology that need citing, permitting, the transmission 
corridor authority that he's exercising, and also 
superconductivity. I don't want to go----

                           SUPERCONDUCTIVITY

    Senator Allard. I do want to get into the superconductivity 
at this time. I understand those other problems, and what are 
you doing in that area?
    Mr. Karsner. And as I was just about to say, that 
superconductivity is an area where I can't go too far in, 
because that really is Kevin's portfolio.
    Senator Allard. I see.
    Mr. Karsner. But I just would like to add, because of 
NREL's role, because of the new Energy Systems Integration 
facility that we're building, that the Office of Electricity 
will have a role in, that the transmission technologies that 
are evolving through Kevin's portfolio, and the deployment of 
those technologies that David's portfolio are taking care of, 
are indispensable to the growth of renewable technologies on 
the trajectories that our office plans.
    Senator Allard. Okay. Yes, Mr. Orbach?
    Dr. Orbach. Senator Allard, I would like to comment on the 
Superconductivity, directly----
    Senator Allard. Okay.
    Dr. Orbach. Because the Office of Science works very 
closely with Assistant Secretary Kolevar's program on 
electrical transmission. This is an example of where the 
applied program through Kevin Kolevar's program and the basic 
research work very closely together. And you will find in the 
budget a coordinated program for this effort.
    We are using nanotechnology and other methods to increase 
the current carrying capacity at temperatures for high-
temperature superconductors that would allow us to use liquid 
nitrogen cooling rather than having to go down to helium. This 
is a tremendous advance and a power line in the State of New 
York in Albany has already been put into place to demonstrate 
that you can, over reasonably short distances, conduct 
electricity without loss----
    Senator Allard. That's interesting.
    Dr. Orbach [continuing]. Using high TC.
    Senator Allard. I knew with high--with very cold 
temperatures you could do that. This is high temperatures using 
nitrogen.
    Dr. Orbach. Precisely, and that's what we've been working 
on very closely, and that's a perfect example of the 
interaction between basic science and the applied programs 
where we would call it use-inspired research.
    Senator Allard. Yes.
    Dr. Orbach. And because of the new, as I referred to in my 
opening comments, the new capabilities that we have in the 21st 
century, we have made substantial progress.

                        ELECTRIC ENERGY STORAGE

    Senator Allard. Thank you for your comments. The other area 
that's sort of tangential to all the energy development is 
storage. And, of course, though, when you talked about solar or 
wind, it's intermittent to some degree. In Colorado we happen 
to have plenty of both, so maybe it's not as much of a problem 
as it is in some States. But again, storage, I think, is an 
important issue.
    What are you doing on storage technology? I'd like to hear 
some of your comments on that. Yes?
    Dr. Orbach. Could I respond to that? The problem that we 
have currently with storage is that our batteries are no 
different than they were in the 19th century.
    Senator Allard. Yes, you have to think beyond just a 
traditional battery.
    Dr. Orbach. Precisely.
    Senator Allard. Yes.
    Dr. Orbach. And there are two developments that are taking 
place right now that we have great expectations for, but 
they're difficult.
    Senator Allard. Uh-huh.
    Dr. Orbach. The first is to take the battery, which 
currently takes one electron and transfers it, and do two-
electron transfer--actually up to four-electron transfer. That 
would increase the capacity of storage by factors of two to 
four.
    Senator Allard. Uh-huh.
    Dr. Orbach. That's what nature does.
    Senator Allard. Are you changing the materials
    or----
    Dr. Orbach. Oh, yes. We'll be going to vanadium compounds, 
for example.
    Senator Allard. Uh-huh.
    Dr. Orbach. People have even talked about six-electron 
storage.
    Senator Allard. Uh-huh.
    Dr. Orbach. We're looking at these new materials to see 
which would be most efficient, but there's another area that's 
also developing, and if you ever built a radio, you remember 
the electrolytic capacitors back when I was growing up. They 
had microfarads of capacity.
    We now, in the same volume, can store farads--a million 
times more electrical charge--and this is because, again, the 
new technologies that are being developed for nanoparticles, 
the very, very tiny spaces between the electrodes. So it's very 
possible that supercapacitors, which is what we call them, may 
well be an efficient energy storage device.
    Senator Allard. I'd--go ahead.
    Mr. Karsner. I was just going to comment from the applied 
perspective.
    Senator Allard. Sure.
    Mr. Karsner. Ray, Kevin, and myself, in fact, work very 
closely on storage because we all see it as a priority to 
enabling the growth of the technology solutions. So in our 
context it's both transportation and generation. We are moving 
on a much more wholesale basis on the generation side from 
multiple storage solutions that we had not previously invested 
in, like compressed air, molten salt for concentrated solar 
power, grid-based battery storage, electrolysis to hydrogen, 
viewing our hydrogen not just as a source but as a carrier and, 
of course, trying to optimize the best storage that's already 
available out there, which is natural gas turbines that we 
begin to alleviate the gas dependency in already existing 
hardware.
    Senator Allard. Yes, I like the idea of the hydrogen.

                           CELLULOSIC ETHANOL

    Mr. Chairman, I have one comment I want to make. I know my 
time has run out.
    I visited a company in Colorado--they're a research 
company--call Range Fuels, and this is for Senator Craig.
    They actually have developed a very ready-to-go on the 
product, cellulosic source of ethanol. And the by-product they 
bring back into the equipment and itself--they don't have to 
rely on energy itself, it can stand alone--and they're using 
wood chips and converting it to product, a combination of 
alcohols: ethyl, methyl, propo, butanol.
    Then, obviously, there's a way of, you know, separating out 
those different alcohols. So they're ready to go, they tell me, 
but they need more wood than what Colorado can provide, and so 
they're going ahead to Georgia or Southern States where they 
have more wood and shorter growths time as far as the forests 
and what not are concerned.
    So that's good news, and they did it with, I believe, a 
grant from your Energy Department in doing that, and they tell 
me they're ready to go to market.
    Mr. Karsner. In fact yesterday, it was announced in The 
Wall Street Journal that that group was the first to close of 
the six contracts related to the section 932 cellulosic 
facilities. They closed $150 million in private funding against 
the $76 million grant that we provided through the sector 
capital. So it is a success story, particularly in the current 
investment environment that cellulosic ethanol companies that 
are just breaking ground of this initial six are still able to 
track enormous private sector capital.
    Senator Allard. Thank you, that's good to hear.

                              ITER PROJECT

    Senator Dorgan. Dr. Orbach, a quick question about the 
Fusion Energy Sciences Program. Tell me, how close are we to 
some unbelievably exciting breakthroughs in that area?
    Dr. Orbach. Mr. Chairman----
    Senator Allard. Unbelievable.
    Dr. Orbach.--I hope we're very close. We are, together with 
six other parties representing half of the world's population, 
prepared to put our money on the table to build an experimental 
reactor called ITER. And the reason we can do that now and 
could not do that before is our computational facilities have 
now shown that there's a good chance that we can keep that 
plasma continued and operating for significant periods of time.
    This is the most important thing that I think the world 
addresses because we're starting construction within 8 years. 
The construction will be finished, we hope, within 5 to 10 
years. It will meet its target of producing 10 times as much 
energy as it goes into the machine itself.
    I think we're closer, so close that it's so exciting the 
opportunities that fusion brings if either is successful, will 
then generate a demonstration powerplant. And my guess is 
that's somewhere between 20 and 30 years away. So we're not 
talking 50, we're not talking in abstract terms; we're talking 
about leapfrogging the technology from ITER to a demonstration 
power plant.
    ITER itself is half a gigawatt. It's not a small machine, 
and we have every expectation that it will work and work well, 
and we're working very hard on the basic science to make sure 
that it does work.
    Senator Dorgan. The President's recommending close to a 
half a million dollar--half a billion dollars in this coming 
fiscal year, $493 million.
    You talk about the other countries involves. What kinds of 
contribution exists from other countries?
    Dr. Orbach. We have fallen behind an order of magnitude. 
Europe is at the same level we are or higher, and Japan is also 
at the same level or higher. But you have to also now count 
China and India, which are making major investments in fusion.
    In fact, the world's first superconducting tokamak is 
called East in Hefei, China. It's, believe it or not, our 
design, which we never developed. But it is now operating. They 
are putting major efforts into fusion research.
    Senator Dorgan. Do my other colleagues have questions? One 
last one, go ahead, Senator Domenici?
    Senator Domenici. Let Senator Craig, go ahead.

                       IDAHO NATIONAL LABORATORY

    Senator Dorgan. Senator Craig, go ahead.
    Senator Craig. Mr. Karsner, I did not have an opportunity 
to visit with you. In combination with the work that you're 
doing and the work that we have done and are currently involved 
in at Idaho and I'm talking about--we've already talked about 
hydrogen, hydrogen fuel cells, advanced vehicles in that sense, 
both the hybrids and the electrics. We've done a good deal of 
that work out at the lab, and the testing team continues to 
provide this function for present and future vehicle testing.
    I would hope that, you know, where we partner that there's 
a relationship there that makes sense between what you do and 
what they do, and, you know, I know there is this desire that, 
oh, that's that technology. We will reach out and grab it and 
pull it in, and sometimes that effort isn't as productive as it 
relates to how you effectively utilize resources as it is to 
team and to partner.
    We've, you know, when all of us sit here and look at our 
phenomenal lab facilities nationwide and sort out the resources 
as it relates to these labs, we recognize levels of expertise 
and talent, and know that that's where it ought to be versus 
going somewhere else.
    Can you respond to that? What is your vision for the 
vehicle testing program, and what future do you see in the 
relationship that you would have with the INL and its role?
    Mr. Karsner. Well, yes Senator, and I would say I don't 
want to limit my comments to just vehicle testing, because you 
may or may not know that Idaho National Lab was the 
instrumental lab working together with NREL last year in 
resolving the FAA, Department of Defense radar challenges that 
we face.
    Senator Craig. Yes
    Mr. Karsner. It almost closed down the wind industry, and 
the difference between the work that was done, the 
collaborative work between INL and NREL had it not occurred, 
had we not had that collaboration from that expertise located 
at the Idaho National Lab, we would not have been the world 
leader in wind energy last year. Arguably we would have had a 
fraction of the projects come on line.
    What that tells us is exactly what you're suggesting, is 
that there are repositories of good work all around the 
laboratory system, and it has been my philosophy that even 
though I have responsibility exclusively for an applied lab, 
working together with Ray and the Office of Science, we want to 
maximize the available talent spread across all of these 
laboratories. That inspires our visits to Lawrence Livermore 
where they have 50 years of experience on radioactive diffusion 
of particles, so the best wind assessment data available 
globally that can inform the way that we grow that industry: 
Idaho on vehicles and battery technology, and wind, as I 
suggested has been indispensable. Sandia has a very old 
relationship with us and is a leader on the solar technologies 
and high performance computing. We are doing generalized lab 
calls that are new to us to say, what do you have out there? 
Who are we underperforming the opportunity to engage? That's 
the way we approach these labs as national assets.
    Senator Dorgan. Senator Domenici?
    Senator Domenici. Thank you, Mr. Chair--Senator Craig are 
you finished?
    Senator Craig. Thank you, I----
    Senator Dorgan [continuing]. You at the end of the answer 
there, I think.

                              WIND ENERGY

    Senator Craig. No, no. No. No, it's what I wanted to hear 
because I think that we sense that, and we hope that those 
relationships continue, then, and the wind issue, yes, I'm 
familiar with what went on out there. I think it was Gary 
Siefer?
    Mr. Karsner. That's right.
    Senator Craig. That did the work. The Air Force might have 
stopped wind development otherwise. I mean there was that 
problem that got worked out, and he deserves a lot of credit 
for it.
    Mr. Karsner. Absolute credit for Gary. And bear in mind 
because that was a high security lab, we had all those people 
that can contribute had top-level to Q clearances that could 
engage the long-range missile radar that folks in my laboratory 
couldn't.
    Senator Craig. Yes.
    Mr. Karsner. And so it was just a very important 
collaboration we intend to----
    Senator Domenici. Thank you. Thank you very much.
    First, Mr. Karsner, I wanted to say that I suspected when 
we had you before us not too long ago for your hearings on 
whether we should send you to the Senate after the President 
had sent you up here, I was convinced that there was no way to 
contain your enthusiasm, and that if we gave you enough to do, 
you would be enthusiastic every day of the week, and if you 
could invent an extra day you'd use that, too. And I have come 
to believe that that analysis that I made when I said we should 
hurry up and get you there was right.
    Mr. Karsner. Thank you, sir.
    Senator Domenici. And I commend you for the exceptional 
work, and you also work--if you remember, you were very willing 
to say it--you were going to get something done even if we only 
had 2\1/2\ years.
    Mr. Karsner. Yes, sir.
    Senator Domenici. Because no one expects you to stay on if 
a Democrat was elected president. We'll just have to see how 
that all works out. If it works out otherwise, you can rest 
assured we'll be recommending that you stay longer, if that's 
what you'd like.
    Mr. Karsner. Thank you, sir.
    Senator Domenici. In any event----
    Mr. Karsner. My family has other plans for me.
    Senator Domenici. I--specific questions. Did you want to 
comment? Am I wrong about your----
    Mr. Karsner. Thank you for that kind compliment, and I 
would say to you and Senator Dorgan, we've enjoyed so much 
support from your committee, the authorizers and the 
appropriators, that it has made our job easier to work on a 
bipartisan basis and get things done.
    Senator Domenici. I think the real problem we have is that 
so much is going on the poor American people don't believe us 
and don't know what's going on because to get from where we are 
to where we're going to be, it's not going to be a one-way 
path.
    Mr. Karsner. That's right.
    Senator Domenici. And it's paths all over the place things 
are going on. Our money, private money is being invested all 
over with all kinds of people excited, and the public can't 
discern that. A breakthrough is going to be made in one or two 
of these areas and it makes things a lot easier to get where we 
have to go.
    Who knows which ones it's going to be? It might be the one 
you and Dr. Orbach spoke about on capacitors, on storage. That 
may be one of the big ones, if we break it. But it seems to 
have difficulties. I hope you're right, both of you, that 
you're going to make some movement.

                    FEDERAL PROCUREMENT REGULATIONS

    But I'm going to ask you about a New Mexico problem. Part 
of your responsibility problem includes increasing the Federal 
Government's usage of renewable energy, and I've been made 
aware of a Federal Procurement Rule that prevents an air base 
in Albuquerque from signing a long-term power purchase 
agreement beyond 10 years.
    We have a site in New Mexico located between a major piece 
of property called Mesa del Sole and Kirtland Air Force Base. 
It has been identified as an ideal site for 100 megawatt 
concentrating power plant with a molten salt storage reservoir. 
However, procurement rules prevent the base from entering into 
the contract beyond 10 years. That's short of the useful life 
of the plant, which has a big impact on the economics of this 
transaction agreement--potential agreement.
    Do you believe these procurement limitations are having an 
impact on the deployment of Clean Energy Technology, and if 
Congress were to change the requirement to allow Federal 
agencies to enter into a longer term power contracts, do you 
believe this would have a positive impact on commercial 
development of renewables?
    Mr. Karsner. Yes, sir. The answer is, unequivocally, yes it 
would have an impact, and I would go further and say nothing 
would have a greater impact to the Federal Government's role as 
an early adopter moving markets than to change the rules that 
enable life-cycle, cost-effective long-term procurement. It is 
a foolish limitation that is put upon ourselves to not be able 
to buy things cheaper.
    An air base down in Texas buys renewable energy credits 
because it has to when it is surrounded by the cheapest source 
of wind energy available that those wind developers would like 
to sell to the Air Force direct. But they can't sell it 
directed 2\1/2\ cents because of the limitation in long-term 
contracting, so they have to sell it to them as renewable 
energy credits for 15 cents. So we lose twice. We fail to 
stimulate the market, and we charge the taxpayer more for it. 
Nothing could be greater than long-term contracts; and without 
it none of the dams across the West would have ever been built. 
Life-cycle benefits of clean energy can't be realized if we 
can't give 20 and 30-year contracts.
    Senator Domenici. Well, maybe we have to look into that and 
seek your assistance with where we'll put it.
    Mr. Karsner. We'd be pleased.
    Senator Dorgan. Senator Domenici, might I interrupt for 
just a moment, as I want to understand this. I fully agree with 
you and with the intent of Senator Domenici's question.
    But what would prevent, in the absence of a long-term 
contract, a wind developer from Texas providing power at 2\1/2\ 
cents to the air base in Texas. I don't understand what would 
prevent them doing that.
    Mr. Karsner. They do it, indirectly.
    Senator Dorgan. But at 15 cents, what would prevent them 
from doing it, directly, at 2\1/2\?
    Mr. Karsner. Because what the power developer is seeking is 
that long-term contract----
    Senator Dorgan. I understand what they're seeking.
    Mr. Karsner [continuing]. So if the base can't provide it, 
they sell it to the utility. So the utility gets the 2\1/2\ 
cent power, and the obligation then for the military to buy it 
is achieved through the sale of the attributes of the power, 
which is an independent market, the RECs, the Renewable Energy 
Credit.
    Instead of buying the power, they're buying the attributes, 
the green attributes of the power. But it's driven by the fact 
that, ultimately, the developer needs a long-term contract from 
somebody. So the question is; is the Government allowed to be 
that somebody, in its own interest. They will get it from 
somebody. They will get it from a utility, or they won't show 
up.
    Senator Dorgan. But I was trying to understand the point. 
Texas has the largest reservoir of wind power in the country.
    Mr. Karsner. Right.
    Senator Dorgan. That wind power already exists. And I'm not 
talking about what's potentially----
    Mr. Karsner. But the base has to buy it, not wholesale, not 
direct from the supplier, but retail, indirect, from the 
utility.
    Senator Dorgan. There's nothing that prevents them from 
buying it direct except----
    Mr. Karsner. The inability to get the long-term contract.
    Senator Dorgan. But what prevents them from buying another 
short-term contract, year to year buying it direct?
    Mr. Karsner. A private developer won't have--that would put 
them in a merchant power situation where they're selling on the 
spot market their electrons. They need one big long-term, 
stable offtake agreement to pay for that new facility and to 
fund the project without it----
    Senator Dorgan. You're talking about new facilities. I'm 
talking about the largest reservoir of wind power in America 
that's already built. So we'll talk about that later. I'm just 
trying to understand.
    Mr. Karsner. We'd be pleased to engage on this issue.
    Senator Dorgan. I don't disagree on the central point that 
you're making----
    Mr. Karsner. Yes.
    Senator Dorgan [continuing]. But I don't understand another 
piece of that.
    Mr. Karsner. Okay.
    Senator Domenici. Okay. Well, we'll have to work on it 
because we've got to get agreement if we're going to get this 
change.
    Mr. Karsner. I'm enthusiastic about that one as a renewable 
energy developer.
    Senator Domenici. All right.
    Mr. Karsner. So we'd definitely be pleased to provide any 
technical bipartisan direct----

                         CLIMATE CHANGE MODELS

    Senator Domenici. Dr. Orbach, 2 weeks ago I traveled to New 
Mexico with Senator Bennett for a tour of the NNSA 
laboratories. During the tour we received briefings on the 
status of various climate models and challenges facing the 
scientist to develop an accurate predictive capability.
    While your budget seeks modest increases in funding for 
climate modeling, it is unclear what your specific goals and 
priorities are for this program. Does the Department or the 
Federal Government have a roadmap for identifying and solving 
data gaps and modeling limitations, and what is the Department 
of Energy's role in solving these complex problems?
    Dr. Orbach. This is a very serious issue that we take 
particular interest in. There is an increase, as you noted, in 
our budget for Climate Modeling. Last week we held a measure 
workshop on precisely this question. It was joint with the NOA 
from Commerce, the two agencies that are most active in the 
Climate Change Science Program. And it's through that program 
that the Office of Science contributes.
    We believe that the new computational capabilities, some of 
which you visited, will give us opportunities for long-term 
climate change prediction that we've never had before. And so 
the purpose of this workshop was to lay out advice to us on 
where to invest our funding: how much we should invest in 
Measurements and how much we should invest in Modeling.
    The results of that workshop are just becoming clear, and 
we're very excited about the prospect for U.S. leadership in 
this area.
    Senator Domenici. Thank you very much.

                        SOLAR ENERGY TECHNOLOGY

    Mr. Karsner, on Solar Power, recently Sandia Laboratory 
announced a world record for solar to energy conversion. On 
January 31, 2008, a sterling concentrating solar array located 
at Sandia Thermal Test Facility achieved a world record of 
31.25 net efficiency rate.
    Despite the promising performance, your budget maintains a 
wide disparity between funding for Photovoltaic research, $137 
million, and Concentrating Solar research (CSP), $19 million. 
Based on the economics and technology performance with 
concentrating solar, a wide, large disparity, or is there--am I 
missing something?
    Mr. Karsner. No, sir, you're not. It's actually the CSP 
that has come back from almost nothing. Concentrated Solar 
Power a few years ago before I was confirmed was actually 
knocked by the National Academy of Science and others that 
wasn't viable at all.
    I think that their views on that have evolved, largely with 
the engagement of our office and much credit to Sam Baldwin, my 
chief technology officer, so we robustly funded it again, 
organizationally, to start it out and get the ball in motion. 
Because of some of the down selects last year and a greater 
focus on precisely the technology you were talking about, 
molten sodium, molten salt storage, it's a little lower this 
year than it was last year.
    To be clear, I view the potential for concentrated solar 
power to be at par with wind power in this country if we can 
begin to iron out intermittency with improved storage 
capacities. And these new records that we are setting in that 
are proof of that.
    Senator Domenici. What happened is exactly what you said. 
They had this capacity 20 years ago when we had the first solar 
energy push followed by the dramatic drop in oil prices down to 
$8 again, and everybody went out of business. And up there at 
Sandia was this gigantic array thought to be worthless. But 
you're saying it's not worthless.
    Mr. Karsner. Not only that, I'm saying to your previous 
question, if we had 20- and 30-year Federal contracting 
authority through my Federal Energy Management Program, to 
bring the bases into compliance, to bring Federal assets into 
compliance with the EISA law, if we had that tool, you would 
see an explosion of concentrated solar projects in the country.

                       NANOSCALE SCIENCE RESEARCH

    Senator Domenici. And my last one to you has to do with 
nanotechnology, Dr. Orbach. And the Department now has all the 
National Nanotechnology Centers in operation. And each center 
has more applications than they financially support. This 
leaves many important research projects without funding and you 
hear that, we hear that, it's a reality.
    Your budget request provides $20 million in operational 
funding for each center, roughly the same level for the last 2 
years.
    Now, I, myself, understand your limitations. You can't get 
around the fact that when the Federal Government's balancing 
the whole budget and talking about that to the people, and 
they're taking it all out of domestic discretionary spending, 
we don't have enough money to spend even for exciting things. 
And that's got to stop one of these days when we'll be down to 
zero, and then maybe we'll stop cutting it.
    But, in any event, these Nano Center centers have great, 
great potential, and five of them you have in the country. They 
have to have money, and I'm just wondering, is $20 million the 
right number for 2 years in a row for such an evolving, 
explosive kind of R&D? And they need to work with the private 
sector. Each one of them has to go out there and find people 
that work in the same area that put up money for the 
development. That has to happen, right? At each center and 
universities.
    But can they do it with $20 million?
    Dr. Orbach. So far we believe they can. Last year's budget 
was severe, and we were unable to fully fund those operations. 
This year we restored the operations to what we believe is the 
optimum level.
    But you are quite right. These centers are achieving 
performance targets that we did not expect them to achieve in 3 
to 4 years, and so as their needs increase we will support 
them. It's a truly remarkable opportunity for the country. And, 
to be honest with you, we had no--we had some idea, but we were 
delighted at the developments that have taken place, especially 
at CINT.
    Senator Domenici. Let me close by just telling you and Mr. 
Karsner, both, when you have an opportunity to go visit a Nano 
Center, or have an opportunity to go visit a Micro-Engine 
Management Center like they have at Sandia at Mason, and you 
see the development of little things, that's the real push: the 
development of little things.
    And this doesn't mean ``little'' like this, so little that 
you have to work under a microscope, you can't see the machines 
you were operating. They're so small, and you put them on a pad 
just like you do now for computers and you see what they're 
going to do in the future; you just wish that you were 21 
instead of my terrible vintage of 75, because it's so exciting.
    And the nano is just coming to meet up with the micro. 
They're matching up, and I just think you don't want to drop 
the ball on the five centers that are fortunate to have this 
nanotechnology at their disposal. And if they need $25 or $30 
or $40 million, to me it's the best money we could spend.
    I thank you, and thank you for listening to me so much 
today.
    Mr. Karsner. Thank you, sir.
    Senator Domenici. I appreciate it.

                    FEDERAL PROCUREMENT REGULATIONS

    Senator Dorgan. Senator Domenici, thank you very much.
    Let me come back to the point I was trying to make, because 
I think we were talking past each other, Secretary Karsner, on 
the issue of wind energy. You're talking about the incentives 
to develop new wind energy.
    Mr. Karsner. Correct.
    Senator Dorgan. I'm talking about an air base that's paying 
15 cents a kilowatt hour for energy that exists. We have two 
air bases in North Dakota that are buying wind power. I set 
that up. There are no long-term contracts. The two wind 
turbines that provide that power for the Grand Forks and the 
Minot base, two wind turbines each, are owned by Rural Electric 
Co-ops. They then resell to the base, and that puts some money 
in the budget for the base to buy green power.
    But, look, I'd agree with the central point that Senator 
Domenici was making and you're making about long-term 
contracts. I want to ask you about something else.

                             ALGAE RESEARCH

    Two weeks ago I was in Phoenix, Arizona, and I toured an 
area where they are taking carbon off of a coal plant and using 
it to invest in algae. Now, algae is single-cell pond scum. It 
grows in waste water, and it grows by CO2 and 
sunlight.
    And we stopped funding algae research about 15 years ago. 
Last year for the first time I think we put some algae research 
money in, but this particular application is really interesting 
because when you get rid of the CO2 by feeding pond 
scum, you create this algae. The algae increases its bulk in 
hours, and then you harvest it for diesel fuel.
    And the diesel fuel from algae, for an equivalent amount of 
corn-based ethanol, for example, and equivalent amount of 
acreage, algae will produce roughly 10 times the diesel fuel 
that corn-based ethanol will produce for an equivalent amount. 
And so you have the capability of consuming CO2--
which is a terrific thing because we need to be able to use our 
coal plants--by feeding it to algae, growing the algae, and 
harvesting the algae for diesel fuel.
    Now, there are a couple of projects around the country that 
I'm very interested in. The one in Arizona is a very big 
project, and they're not doing it in algae ponds, they're doing 
it in long greenhouse.
    And so my question is, are you looking at that under 
renewable fuels? Because this is a renewable fuel when you can 
harvest the algae, and it's up to 10 times more capable of 
production than, for example, corn-based ethanol. Are you 
looking at that?
    Mr. Karsner. Yes, sir, we are looking at that. We just 
started looking at that, you're right. All of this has been in 
hibernation for quite some time while oil prices were low, and 
we're working, inaugurating work, with folks out of Sandia and 
Los Alamos. NREL has engaged Chevron on that subject. I'm aware 
of the project you're talking about. It's really two separate 
topics that require work. And Ray is aware of this, the push 
for carbon utilization as much as sequestration, as a pathway 
for dealing with climate change solutions, but also, obviously, 
the benefit of using algae and other microorganisms for 
advanced fuels that go beyond ethanol alone. So both of those 
areas are of keen interest to us.
    Senator Dorgan. The Texas company that told me about the 
process they have developed--and this is not renewable energy, 
this goes more to carbon capture--and I know this is fossil 
energy--but they are apparently treating the flue gas 
chemically and producing chloride, hydrogen, and the equivalent 
of baking soda. And the baking soda contains and captures the 
CO2, and then they just landfill the baking soda.
    Dr. Orbach, you're waving your head yes?
    Dr. Orbach. Yes, that's correct.
    Senator Dorgan. Do you agree with that?
    Dr. Orbach. There are two different ways of handling it. 
One is the way you just described it, which is chemically. 
Another is with the IGCC, the integrated plan where you 
actually separate out the CO2 before combustion. 
Both of those now are becoming, you know, within factors of 20 
percent, 30 percent, the same cost as normal coal-fired 
powerplant.
    So those technologies are moving rapidly, and I can assure 
you that fossil energy, the Office of Science and EERE work 
very closely together in developing those parameters.
    Senator Dorgan. I hope. And I hope that's the case because, 
50 percent of this electricity comes from coal. We're going to 
have to continue to use coal. The question is not whether, it's 
how, and we've got to find a way to capture and use, or 
sequester, or contain.
    In June, we're going to have a climate change debate on the 
floor of the Senate. It's going to be a big debate. The 
question is: are the targets of that bill going to meet the 
capability, technologically, for us to deal with CO2 
and to be able to continue to use coal? And much of that is 
going to come, I think, from the basis of scientific inquiry 
and from the work in the case of algae. It would be a terrific 
thing if we could convert CO2 that we don't want 
entering the atmosphere into a superfuel. It represents the 
best of all choices, it seems to me.

                         WEATHERIZATION PROGRAM

    Now, one other point I want to make. I think that we have 
not done a very good job on solar. The fact is, there have been 
some technology changes in the last 20 years. I understand that 
the solar plates are still solar plates, but there have been 
some advances in solar capability, and I think both from a tax 
incentive standpoint and in other areas, our country has not 
done well with solar. We need to do much, much better, and I 
hope we can continue to talk about that.
    And, finally, Mr. Karsner, you seemed not to be very 
disappointed about a proposal to cut your funding by about half 
a billion dollars. We're hoping to make you happier than you 
might want to let on.
    Mr. Karsner. Can I speak to that, sir?
    Senator Dorgan. Yes, of course.
    Mr. Karsner. Because--and it's considered bad form to not--
to speak to something and I wasn't directly asked, but this is 
my last hearing in front of this committee, and most of that 
cut is about the Weatherization Program.
    Senator Dorgan. About half of it.
    Mr. Karsner. And so I wanted--but the largest chunk is 
weatherization.
    Senator Dorgan. That's true.
    Mr. Karsner. Most of my mission today is making my 
successor more successful than I was. This issue is chronic, 
and we will work with anybody in this town, any administration 
or in Congress, to rationalize where income-related 
weatherization assistance can best be placed. It's something 
that is worthwhile and good, and I believe that the people that 
deserve that money ought to get it.
    But 30 years into this, we have delivered 5\1/2\ million 
homes with an annual need of 27 million people. So we are 
underperforming that mission. Then, at the same time, we're 
underperforming the mission of the McKinsey Study that you held 
up by not enabling greater investment in the building 
technologies that can seriously transform the built-
environment. We have got to separate the assistance programs 
from the technology programs and be able to serve them both. 
That is our mission this year.
    Senator Dorgan. But the key is to serve them both, and the 
zeroing out here and not adding it elsewhere means that we're 
missing a part. And so that was my point.
    I don't put on your shoulders the zeroing out of 
weatherization assistance. I don't assume that you recommended 
that, but--and it is about half of the reduction--I do think, 
however, that the reduction in the Hydrogen Technology, and for 
all the reasons you have described, I still think it is not 
justifiable.
    I think, if we're going to really make progress looking out 
15 and 25 and 40 years from now about what we want to have our 
grandchildren drive--in my judgment hydrogen fuel cell 
vehicles--I think we really need to put our shoulder to the 
wheel and fund these projects. The same with solar and other 
things.
    So I agree with Senator Domenici, I like your spirit and 
your passion, and, you know, I wish you had the resources in 
your President's budget to match your passion. But we'll 
probably see if we can help a little bit on that this year.

                      LONG-TERM INVESTMENT FUNDING

    I do want to make one final point, because Senator Domenici 
was chairman of the Budget Committee for so long, and he made 
the point that we've got to make sense of all this. We 
understand that there has to be some belt-tightening, but it's 
also important the things that really invest in this country's 
future, really invest in a big way and pay dividends such as 
trying to fix this energy situation. Failure to invest also can 
cost you a lot of money.
    Now, we have a big fiscal policy problem. People say the 
deficit this year is $400 billion in the President's proposal. 
It's not. We're going to end up borrowing $800 billion this 
year on the fiscal policy side, and $800 billion red ink, and 
then Trade side $800 billion. That's $1.6 trillion on a $14 
trillion economy. There isn't anybody that looks at that from 
around the world and says that that's an economy on track.
    So I understand the challenge. We've got to find a way to 
deal with all of this. My hope remains, however, that the 
allocation this subcommittee gets is an allocation that 
understands the difference between spending and investing. And 
there's a very big difference: Investments bring dividends, 
dividends that will accomplish a better future for this 
country. And I think if we understand that as we allocate 
funding in the appropriations process, the investments in 
energy, the investments of basic science, investments in clean 
energy facilities for the future, this country will be well 
served by those investments.
    I want to thank all three of you for being here today, and 
wish you well as you work through this year. And I thank my 
colleague Senator Domenici for his work on this subcommittee.

                  FEDERAL LOAN GUARANTEE APPLICATIONS

    Senator Domenici. Mr. Chairman, could I ask David Frantz, 
you mentioned how many applications you have and how many 
you've cleared. Are the subject matter of those cleared 
applications private? Or are they available for committee to 
look at?
    Mr. Frantz. They're private, Senator, while we're 
processing them. They're business-confidential and proprietary 
information relative to each of the projects that are----
    Senator Domenici. How long will that last? How long will 
that--a couple years, or----
    Mr. Frantz. Yes, at least. Really, a lot of the information 
can only be released by the applicants that are applying, not 
on our side. Most of that information is business-confidential 
proprietary.
    Senator Domenici. And aren't we going to know, for the 
people of our country, that we have funded a program doing such 
and such, or is that not going to happen on along that----
    Mr. Frantz. We'll publicly, with their permission, we will 
publicly make announcements as we have reached a successful 
conclusion on each one of their applications.
    Senator Domenici. I would hope so. I mean, it's very, very 
important.
    Mr. Frantz. Yes, sir.
    Senator Domenici. Not next week but that it be on your 
agenda.
    Mr. Frantz. Yes, sir.

                         SOLAR ENERGY RESEARCH

    Senator Domenici. And on solar and what I say, Mr. 
Chairman, I agree with you. And I think the mistake was made 
because we stopped the program when the price of oil cam down 
because we made it--too big of demands on solar were made at 
that point because of the disparity.
    But now we ought to relook at where we are, and maybe you 
and I could figure out a way to meet for an hour or so and talk 
about solar in our budget and see where we might make some 
better investments. And your use of the word ``investment'' 
used to not impress me when I was doing the budget because I 
was always being asked for more money; but as I look at how we 
spend our Government's money, the committees and all, without 
trying to take precedence, our committee over another, it is 
not too difficult to determine where we have an energy crisis, 
where we have energy-related investments.
    I mean, this is the nucleus of whether we're going to get 
out of this mess 10 years early or 30 years later. Science 
breakthroughs, that's the difference. And we're there whether 
people like to spend money on us or not.
    Thank you all very much.
    Senator Dorgan. Senator Domenici, thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    At this time, if the members of the subcommittee have any 
additional questions, please submit them for 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. Raymond L. Orbach
             Questions Submitted by Senator Byron L. Dorgan
                                competes
    Question. Last August the Congress passed and the President signed 
the COMPETES legislation into law. This proposal, consistent with the 
National Academy of Sciences study ``Rising Above the Gathering 
Storm,'' directs the Department to focus greater attention on science 
and mathematics education and research. Can you tell me specifically 
how the Department is supporting this legislation and how much money is 
provided in the President's request to implement the COMPETES 
legislation?
    Answer. The Department is committed to meeting its responsibility 
to help increase America's talent pool in science, technology, 
engineering, and mathematics and ensure that we will have the 
scientific workforce we will need in the 21st century to address future 
challenges and maintain U.S. global competitiveness. No additional 
funds were appropriated in fiscal year 2008 to expand existing programs 
or to establish new programs authorized under the COMPETES Act. The 
fiscal year 2009 request, however, contains increases for STEM 
education efforts aligned with the American Competitiveness Initiative 
and consistent with the goals of the COMPETES Act.
    The fiscal year 2009 budget request includes $13,583,000 for the 
Office of Science Office of Workforce Development for Teachers and 
Scientists (WDTS), a $5,539,000 increase from the fiscal year 2008 
appropriated levels. Of this increase, $4,214,000 is for the DOE 
Academies Creating Teacher Scientists (DOE ACTS) program. The $6.4 
million requested for the DOE ACTS program is consistent with the 
summer institutes authorized in section 5003(d) of the COMPETES Act. 
This section calls for the establishment or expansion of programs of 
summer institutes at each of the DOE national laboratories to provide 
additional training to strengthen the science, technology, engineering, 
and mathematics (STEM) teaching skills of teachers employed in public 
schools for K-12 students. Fiscal year 2008 is the fourth year the DOE 
ACTS program will bring K-12 teachers into the laboratories for 
research intensive experiential-based opportunities to build their 
content knowledge in STEM fields that they then bring back to their 
classrooms. The teachers selected for the program participate in 
research at the DOE national laboratories for three consecutive summers 
and bring their new knowledge and skills back to their school 
districts. The fiscal year 2009 request will support an additional 227 
teachers to participate in the program, for a total of 341 teachers.
    The Outstanding Junior Investigator award programs carried out by 
the Office of High Energy Physics, the Office of Fusion Energy 
Sciences, the Office of Nuclear Physics, and the Office of Advanced 
Scientific Computing Research, and the Office of Science Early Career 
Programs are consistent with the early career award programs authorized 
in section 5006 of the COMPETES Act. These programs are focused 
outstanding scientists that are yet to be tenured university faculty 
early in their careers and support the development of their individual 
research programs. Approximately $10,298,000 is requested in fiscal 
year 2009 across the programs to support early career scientists.
    In addition to the programs above, the Office of Science supports 
several activities that are consistent with the intent of several 
sections of the COMPETES Act, but differ in their specific 
implementation. The fiscal year 2009 budget request outlines several 
programs targeted towards support of graduate student activities and 
graduate student fellowships that are consistent with the PACE 
fellowships authorized in section 5009 of the COMPETES Act. The fiscal 
year 2009 request provides approximately $19,121,000 in graduate 
programs that range from traditional graduate fellowships that include 
stipend and tuition support to summer programs for graduate students 
for experiential learning experience in a number of scientific 
disciplines supported by the Office of Science. This is an increase of 
$983,000 over the fiscal year 2008 appropriated levels.
    Section 2008 of the COMPETES Act authorizes discovery science and 
engineering innovation institutes at the DOE national laboratories. 
These institutes must focus on the missions of the Department and 
should support science and engineering research and education 
activities related to areas such as sustainable energy technologies, 
multiscale materials and processes, micro- and nano-engineering, 
computation, and genomics and proteomics. Several research centers 
supported by the Office of Science for a total of $183 million are 
consistent with this authorization. This includes two of the three DOE 
Bioenergy Research Centers located at Lawrence Berkeley National 
Laboratory and Oak Ridge National Laboratory ($50,000,000 total in 
fiscal year 2009) and seven of the Scientific Discovery through 
Advanced Computing (SciDAC) Centers for Enabling Technologies that are 
multiple institution partnerships but centered at the national 
laboratories. In fiscal year 2009 approximately $18,800,000 is provided 
to support these seven centers. Additionally, approximately 
$100,000,000 is requested for the Energy Frontier Research Centers in 
fiscal year 2009. The competition for centers is open to laboratories, 
universities, and private sector organizations, or partnerships among 
these groups. Awards for each center will be $2-5 million per year for 
an initial 5-year period and centers will focus on innovative basic 
research to advance scientific breakthroughs relevant to 21st century 
energy technologies.
    The fiscal year 2009 request of $4,721,969,000 for the Office of 
Science will support approximately 23,700 Ph.D's, graduate students, 
undergraduates, and technical staff at universities and the national 
laboratories, a significant number of the Nation's scientific and 
technical skilled workforce. Additionally, the request will support the 
use of the Office of Science scientific user facilities by over 21,000 
researchers in fiscal year 2009. These sophisticated research 
instruments and facilities are a significant pillar of the U.S. 
scientific enterprise, enabling U.S. researchers to remain at the 
cutting-edge of science and innovation, and provide tremendous training 
opportunities for researchers and students across the country.
                          lansce refurbishment
    Question. Dr. Orbach, you and I have spoken extensively about 
maintaining our science capabilities at our national labs--both the 
Office of Science facilities and the NNSA labs. I believe you share my 
belief that we need to upgrade the LANSCE Facility to sustain cutting 
edge science at the lab in advanced materials research. This will have 
relevant scientific applications for both the NNSA weapons program and 
the Office of Science. Why doesn't the fiscal year 2009 budget request 
provide the funding necessary to support an upgrade of this facility?
    Answer. The Office of Science-supported Manuel Lujan Jr. Neutron 
Scattering Center (Lujan Center) is part of the Los Alamos Neutron 
Science Center (LANSCE). The combined facility is comprised of a high-
power 800-MeV proton linear accelerator, a proton storage ring, and 
instrumented beam lines for the Lujan Center for civilian research and 
the National Nuclear Security Administration (NNSA) Weapons Neutron 
Research facility for national security research. NNSA is responsible 
for the accelerator upgrade project, which would increase the LANSCE 
neutron source intensity by delivering more proton beam power to the 
neutron production target.
    The Office of Science has invested a total of $26 million in the 
development of six new instruments and the refurbishment of two 
existing instruments at the Lujan Center in the last decade, and 
significant strides have been made at the Lujan Center during the past 
several years. New sample environment capabilities complement existing 
strengths in high pressure and engineering stress, and the improved 
quality of user experiments are resulting in more scientific 
publications. Continued support of the Lujan Center by Science is 
contingent upon the Science triennial peer review, and further 
instrument upgrades by Science are contingent on the LANSCE accelerator 
upgrade by NNSA. The LANSCE accelerator upgrade was not possible in 
fiscal year 2009 due to competing priorities in NNSA.
    Although the Spallation Neutron Source (SNS) will become the 
Nation's signature neutron scattering facility, an October 2006 
workshop, ``The Lujan Center in the SNS Era,'' concluded that a strong 
national neutron research program requires the SNS plus other high 
intensity user facilities. The Lujan Center can remain world class with 
a future emphasis on cold neutron instruments optimized for 20Hz 
repetition rate and a shift to more inelastic neutron scattering 
capabilities at the facility.
                       sandia--advanced computing
    Question. The fiscal year 2008 Energy and Water Conference report 
directed the Department to establish an Institute for Advanced 
Architectures and Algorithms at Sandia National Labs and Oak Ridge as a 
joint endeavor between the NNSA and the Office of Science to continue 
research of high performance computing architectures. I included this 
language because I am very concerned about maintaining the U.S. and DOE 
leadership in high performance computing. As you are well aware the 
Science-based Stockpile Stewardship program and the NNSA labs pioneered 
the advanced computing platforms being deployed today and we should not 
forfeit our leadership in this field. What is your office doing to 
carry out the congressional direction to establish this joint Advanced 
Computing R&D capability and what is your plan to sustain this research 
capability?
    Answer. The Office of Science appreciates this committee's support 
for High Performance Computing in the Department. On January 28, 2008, 
Sandia and Oak Ridge briefed NNSA and the Office of Science and opened 
a dialogue about the Institute for Advanced Architectures and 
Algorithms. This was followed by a series of conference calls and a 
formal proposal from Sandia. The proposal was funded by the Office of 
Science in May and it is being jointly managed by the Office of Science 
and the NNSA.
    As we look to the future, research on advanced architectures and 
algorithms will continue to be a critical element of the computing 
programs of both the Office of Science and the NNSA. This area is one 
in which sustained, multi-year efforts are required to achieve progress 
and where active collaboration between the Office of Science and the 
NNSA will leverage scarce resources and enable the broadest impact.
                             climate change
    Question. Dr. Orbach 2 weeks ago, I traveled to New Mexico to host 
Senator Bennett on a tour of the NNSA laboratories. During this tour we 
received briefings on the status of various climate models and the 
challenges facing the scientists to develop an accurate predictive 
capability. While your budget seeks a modest increase in funding for 
climate modeling, it is unclear what your specific goals and priorities 
are for this program. Does the Department, or the Federal Government, 
have a roadmap for identifying and solving data gaps and modeling 
limitations? What is the Department of Energy's specific role in 
solving these complex problems?
    Answer. The Department coordinates its climate change research, 
including its climate modeling activities, with other agencies through 
the interagency Climate Change Science Program (CCSP). While the CCSP 
has a Strategic Plan that was released in 2003, it does not have an 
implementation plan or roadmap for achieving the scientific goals of 
the CCSP. The Department of Energy's Climate Change Research Program is 
focused on addressing data and information gaps and uncertainties that 
are limiting climate modeling. DOE has a draft strategic plan that 
provides a roadmap to address the key gaps and uncertainties and 
improve climate models and modeling. We will utilize findings and 
recommendations from several recent reports and workshops to revise our 
draft strategic plan before it is released. The reports we will use to 
guide the revision include a pending report from a recent DOE-sponsored 
workshop on grand challenges in climate change research, the 2007 
Intergovernmental Panel on Climate Change (IPCC) Working Group I Report 
on the Physical Science Basis of Climate Change, a 2007 report from a 
jointly organized workshop by the Department of Energy's Program for 
Climate Model Diagnosis and Intercomparison and the World Climate 
Research Program on Systematic Errors in Climate and Numerical Weather 
Prediction Models, and National Research Council reports on climate 
change research science.
    DOE's specific role in solving data gaps and limitations in climate 
modeling include developing and applying diagnostic tools and methods 
for evaluating climate model performance and identifying the 
limitations in model performance; supporting research and 
infrastructure to collect data and information; developing new and 
improved process models and parameterization schemes that more 
accurately represent the effects of clouds and aerosols, the two 
largest sources of uncertainty in climate modeling; developing and 
applying new and improved ocean, sea ice and land ice models for 
simulating their role in climate and sea level changes and potential 
feedbacks between sea and land ice changes and climate change; 
providing the climate modeling community with access to high 
performance computing capabilities at DOE laboratories needed to 
implement advanced, high resolution climate and Earth system models 
that are essential to modeling the physics of climate processes (e.g., 
transport of heat, atmospheric motion, formation and evolution of 
clouds, etc.) and the resulting response of climate to natural and 
human-induced forcing at regional to global resolution over decade to 
century time scales; and developing new and improved models of global 
carbon cycling in the ocean and terrestrial biosphere that can be 
incorporated in an Earth system model to simulate the interactions and 
feedbacks between climate, carbon cycling and CO2 forcing of 
climate.
    Question. The Advisory Committee for the Office of Biological and 
Environmental Research raised concerns in its report from May 2007 
regarding the availability of computing time at the laboratories to run 
climate simulations. They also raised concerns regarding general 
difficulties in ``engaging'' DOE. What has been done to improve this 
interaction and access?
    Answer. Two DOE Federal Advisory Committees, the Biological and 
Environmental Research Advisory Committee (BERAC) and the Advanced 
Scientific Computing Advisory Committee (ASCAC) were charged by me to 
address the computing needs for climate modeling, including changes 
that may be needed to provide and improve access to DOE high 
performance computing capabilities for climate modeling. The findings 
and recommendations in the report of a joint ASCAC-BERAC committee are 
under review, and a plan will be forthcoming that addresses the climate 
modeling access issues raised in the May 2007 BERAC report.
                             nanotechnology
    Question. Dr. Orbach, the Department now has all the National 
Nanotechnology Centers in operation and each center has more 
applications than they financially support. This leaves many important 
research projects without funding. Your budget request provides $20 
million in operations funding for each center, roughly the same level 
for the last 2 years. In light of the tremendous interest in this field 
of research, why hasn't your office sought an increase? If additional 
funding was provided to these centers, do you believe it would be well 
spent?
    Answer. The fiscal year 2009 request provides for support that will 
allow for full operation of the five Office of Science Nanoscale 
Science Research Centers (NSRCs). The recently completed NSRCs are user 
facilities that scientists from all sectors--academia, Federal 
laboratories, and industry--can access to pursue their ideas and are 
still in the early phases of maturing their operations. As the unique 
capabilities of the NSRCs become more widely known, the NSRCs are 
becoming oversubscribed with applications for time from potential 
users. The synchrotron and neutron scattering user facilities operated 
by the Basic Energy Sciences program have a history of such 
oversubscription. It is important to understand that such 
oversubscription is natural and healthy, because all applications for 
use of the NSRCs undergo rigorous peer review, which ensures that the 
best user proposals are supported. Furthermore, the number of users to 
whom time can be allocated is not simply dependent on the level of 
operating funds. Each NSRC was designed to operate at its full capacity 
to serve users with an annual operating budget of approximately $20 
million. It is imperative, however, that the operating budgets for the 
NSRCs--and all SC user facilities--receive appropriate cost-of-living 
increases in subsequent fiscal years so that they may maintain full 
operations. This was not possible in fiscal year 2007 and 2008, and the 
fiscal year 2009 budget request for the NSRCs seeks to redress the 
situation. As with other user facilities, additional funding will be 
required and requested in subsequent years to re-capitalize the 
equipment in the NSRCs.
                             radiation r&d
    Question. Dr. Orbach, in your testimony, you highlight the role 
your office is playing in ``Predicting high level waste system 
performance over extreme time horizons.'' I would think this research 
would be very valuable to the EPA and the NRC which has responsibility 
for setting regulatory and safety standards for nuclear waste. How will 
the data your office develops be integrated into the rulemaking process 
to ensure that the standards are scientifically sound? How far into the 
future do you intend for your models to predict? Do you intend to make 
predictions as far out as 1 million years?
    Answer. Predicting high level waste (HLW) system performance over 
extreme time horizons is one of the research coordination efforts 
proposed for the Office of Science in the fiscal year 2009 budget 
request. This area was identified as one of the scientific grand 
challenges in the Basic Energy Sciences (BES) workshop on Basic 
Research Needs for Geosciences in February 2007. The regulatory 
framework for HLW systems asks that the performance of a geological 
repository be predictable for time periods of up to 1 million years. 
Current models require significant improvements to become capable of 
more accurate predictions on such time scales. This is why the 
scientific community identified this area as a grand challenge in the 
BES Geosciences report and why we are targeting this area as one of our 
R&D coordination efforts in fiscal year 2009. The BES workshop report 
noted that the chemical and geological processes involved in the 
performance of HLW systems over extreme time scales are highly complex 
and require an interdisciplinary approach that strongly couples 
validation experiments with theory, modeling, and computation bridging 
multiple time and length scales. The report further concluded that 
fundamental research is required to provide the scientific basis for 
predictive models of HLW in geological repositories over extreme time 
horizons, including research on: computational thermodynamics of 
complex fluids and solids, the physics and chemistry of particles and 
colloids on the nanoscale, biogeochemistry in extreme and perturbed 
environments, highly reactive subsurface materials and environments, 
and simulation tools that can handle an enormous range of spatial and 
temporal scales.
    The Office of Science is not directly involved in rulemaking 
regarding HLW systems. The data, scientific knowledge, and 
computational models generated from the fundamental studies we perform 
will, of course, be widely and openly disseminated in the scientific 
literature. In addition, the R&D coordination effort proposed for 
fiscal year 2009 will directly benefit and involve the Office of 
Civilian Radioactive Waste Management (OCRWM) and the Office of 
Environmental Management (EM). An important component of integration 
between BES and these offices are the strong BES programs in the DOE 
laboratories in actinide and radiation chemistry, materials sciences, 
and geosciences. Capabilities and knowledge developed in these lab 
programs are readily and directly conveyed to complementary programs in 
the labs that are supported by OCRWM and EM.
                       joint dark energy mission
    Question. I have a few questions that underscore this committee's 
continued interest and support for DOE's role in JDEM and the science 
it is meant to address. Given that this now appears to be a NASA-led 
mission, are you comfortable that JDEM will yield the best science to 
address the science priorities of the Office of Science's High Energy 
Physics Office?
    Answer. DOE and NASA will coordinate in selecting the winning 
concept for JDEM. An important part of the selection process will be to 
ensure that the science obtained by the concept will address the needs 
of both the NASA science mission and of the High Energy Physics science 
mission. If the submitted concepts fall short of either agency's 
mission need, then the agencies will reevaluate the mission.
    Question. Last year the National Research Council considered a 
number missions and experiments to advance the state of physics 
``Beyond Einstein.'' The resulting report stated that JDEM should be 
the top priority. Unfortunately, we've heard from BEPAC panel members 
that the mission being planned will not meet their very explicit 
expectations due to budget restrictions within NASA. Are you confident 
that the Joint Dark Energy Mission that results from NASA's competition 
will be within the range of the specific scientific objectives laid out 
by the NRC panel?
    Answer. NASA and DOE are jointly planning the mission. Although 
NASA will issue the Announcement of Opportunity (AO), we will be 
working with them to write the terms of the AO and will coordinate the 
selection process. We will work together to ensure that the selected 
mission will significantly advance the study of dark energy in the most 
cost-effective manner. Until we see the actual proposals we cannot 
evaluate how well they meet the scientific objectives of the NRC panel. 
The agencies will need to decide whether the science provided by the 
selected JDEM concept is sufficient.
    Question. Recent reports from NASA indicate that DOE's contribution 
to JDEM will be ``up to'' $200 million. This is a big reduction from 
the $400 million that DOE had pledged earlier. First, is this accurate? 
Second, if so, why was this change made and where is the remaining $200 
million going? DOE has requested and this committee has provided tens 
of millions of dollars in research and development for JDEM. We would 
hate to see our significant investments go underutilized.
    Answer. DOE's expertise is in the areas of scientific 
collaborations and instrumentation. NASA, in addition to expertise in 
these areas, is the agency with the expertise and stewardship 
responsibilities for space launches and operations. The mission concept 
studies that are nearly complete indicate that the science could be 
done in a medium-class strategic mission targeted at a cost of 
approximately $600 million, not including the launch services. The 
scientific package is estimated to cost about $400 million and both DOE 
and NASA want to participate in the fabrication and operation of the 
scientific package. An equal partnership in the scientific package is 
the basis of the present $200 million cost estimate for DOE.
    With the reductions from the requested levels in the fiscal year 
2007 and fiscal year 2008 congressional appropriations, there is no 
``remaining $200 million,'' and indeed the present $200 million 
commitment will stress the High Energy Physics program. In our 
planning, the projects and programs that can be supported depend upon 
the funding available and their priority for mounting a world-class, 
productive U.S. High Energy Physics program. The funding level is 
determined by congressional appropriations. We use guidance from the 
scientific community as input to establishing priorities within the 
funding available. Guidance is presently being sought from the High 
Energy Physics Advisory Panel about the options and priorities for an 
optimal U.S. program at different funding levels.
    Question. Are you confident that DOE's investment in this project 
to date--that is, the country's investment in this project--will be 
adequately utilized?
    Answer. Yes, DOE's investment has been and will be well utilized. 
DOE's investment to date is mostly in the Supernova/Acceleration Probe 
(SNAP) concept for JDEM for R&D on the advanced optical and infrared 
sensors that would be used in the camera, as well as in designing a 
mission concept. This sensor development R&D can also be used for other 
missions and by the general scientific community. The SNAP concept 
development funded by DOE has helped the technical advancement of the 
whole JDEM mission, which was noted by the National Research Council 
study as a particular strength of JDEM compared to some other Beyond 
Einstein mission proposals.
    Question. Will DOE and NASA jointly select the winner of the JDEM 
competition?
    Answer. Yes, DOE and NASA will coordinate in selecting the winning 
concept for JDEM.
    Question. Dr. Orbach, can you give us the background on the 
development and overall strategy for the Energy Frontier Research 
Centers? As you know, this is an initiative contained in the fiscal 
year 2009 budget that some might construe as an alternative to ARPA-E 
or as another way of funding additional programs in the Science budget, 
as opposed to the Energy R&D budgets.
    Answer. The overall goal of the Energy Frontier Research Centers 
(EFRCs) is to foster, encourage, and accelerate high-risk, high-reward 
research that may provide the basis for transformative energy 
technologies of the future. The EFRCs will bring together the skills 
and talents of a critical mass of investigators, especially from 
universities, to enable energy relevant, basic research of a scope and 
complexity that would not be possible with the standard single-
investigator or small-group award. EFRCs will enable research programs 
that are balanced and comprehensive and, as needed, support 
experimental, theoretical, and computational efforts. Finally, the EFRC 
program provides a tremendous opportunity for universities to engage in 
fundamental basic research critical to future energy technologies, and 
to inspire, train, and support leading scientists of the future who 
have a deep and sincere appreciation for the global energy challenges 
of the 21st century.
    The scientific background for the EFRC initiative has been 
developed over the last 6 years through an extensive series of 
workshops sponsored by the Basic Energy Sciences (BES) program and its 
advisory committee, the Basic Energy Sciences Advisory Committee 
(BESAC). In 2002, BESAC sponsored a workshop on Basic Research Needs to 
Assure a Secure Energy Future. That workshop lead to a series of 10 
more BES workshops on basic research needs for the hydrogen economy, 
solar energy utilization, superconductivity, solid state lighting, 
advanced nuclear energy systems, combustion of 21st century 
transportation fuels, geosciences, electrical energy storage, materials 
under extreme conditions, and catalysis for energy. Finally, BESAC 
recently completed a report entitled Directing Matter and Energy: Five 
Challenges for Science and the Imagination. This set of 12 workshop 
reports, developed by some 1,500 scientists from universities, DOE 
laboratories, and industry, define the scientific and technological 
basis for the EFRC initiative.
    The high-risk, high-reward fundamental research within the EFRCs 
represents 15 percent of the total BES funding for research; the 
success of the EFRCs depends in part on their integration with the core 
research programs in BES. All of the core research programs in BES are 
actively engaged in coordination efforts with the DOE technology 
offices to promote the flow of knowledge and ideas from basic to 
applied research. This integration obviates the need for the creation 
of a new ARPA-E bureaucracy, rendering it unnecessary and 
counterproductive.
    Question. Dr. Orbach, can you give us the background on the level 
of funding for General Plant Projects (GPP)? I understand that the GPP 
level has increased over time to reflect inflation, etc. and the 
current level is $5 million per project. Anything above $5 million 
requires a reprogramming or to be a part of a Science Laboratory 
Infrastructure project. Do you believe the current level of $5 million 
provides you the flexibility to do the projects that are necessary 
under those constraints? If not, what level would you recommend?
    Answer. General Plant Projects are miscellaneous minor new 
construction projects of a general nature, the total estimated costs of 
which may not exceed $5 million per project. This $5 million threshold 
has been set since fiscal year 1999. A construction project that 
otherwise met the GPP criteria, but with a total cost above $5 million, 
would have to be requested and appropriated as a line-item construction 
project, which could stretch the necessary time frame between 
identification of the need and completion of the project, and thus 
increase overall costs. Based upon the Engineering News Report Annual 
Construction Inflation Index, $5 million in fiscal year 2009 would 
construct a project that would have required only $3.6 million in 
fiscal year 1999. So over time, inflation has reduced the Department's 
flexibility to pursue minor construction projects using GPP. An 
increase in the GPP threshold to $7 million would make the GPP 
threshold approximately equivalent after inflation to what it was when 
it was last increased in fiscal year 1999. GPP is supported both 
through direct funding and through Institutional General Plant 
Projects, or IGPP, which are funded through laboratory overhead for 
projects that cannot be allocated to a specific program. Examples of 
acceptable IGPP projects include site-wide maintenance facilities and 
utilities, such as roads and grounds outside the plant fences or a 
telephone switch that serves the entire facility. In the fiscal year 
2009 Office of Science request, $31 million is planned for direct-
funded GPP and an additional $35 million is anticipated in IGPP funding 
at Office of Science laboratories, for an overall level of $66 million 
for such minor construction projects.
    Question. Dr. Orbach, the Basic Energy Sciences budget has grown 
substantially over the past few years with the construction of several 
projects, namely SNS, the Nano Centers, and CLS at Stanford, etc. What 
do you envision the Basic Energy Sciences budget's steady state being 
in 5 years?
    Answer. The fiscal year 2009 budget request of $1,568 million for 
the Basic Energy Sciences (BES) program in the Office of Science 
reflects part of a Government-wide strategy to enhance U.S. world 
leadership in the physical sciences and maintain our Nation's 
competitive lead in technology. This strategy is the result of 
important actions by two branches of Government--first by the 
administration's American Competitiveness Initiative (ACI), and second 
by the congressional passage of two authorization acts, the America 
COMPETES Act (Public Law 110-69) and the Energy Independence and 
Security Act of 2007 (Public Law 110-140). Together these actions would 
approximately double the budget for the SC over a period of 7 to 10 
years. The Science portfolio supports a broad research program and 
facilities operations that seek to understand the fundamentals of how 
nature works and then to use this understanding to promote 
transformational changes in the way we approach energy production, 
conversion, transmission, storage, and waste mitigation.
    Under the ACI and congressional authorizations, we envision that 
the BES program will continue to be strong in 5 years with many 
exciting new capabilities. In developing future BES budget requests, 
Science will consider giving priority to six components of the BES 
budget: providing increases at least at the rate of inflation for core 
research programs and core facility operations; providing significant 
research increases in energy sciences, including the growth of Energy 
Frontier Research Centers; providing optimal construction funding, 
including for the NSLS-II project; providing instrumentation upgrades 
and fabrication for the scientific user facilities and the core 
research programs; upgrading and expanding the Spallation Neutron 
Source; and planning and conducting R&D toward the next-generation of 
light sources. The fiscal year 2009 request begins to put the BES 
budget on track with respect to the doubling path defined by the ACI 
and congressional authorizations. Projecting along that path in 
subsequent fiscal years would see the BES budget grow to approximately 
$2 billion by fiscal year 2013. I encourage your strong support of the 
President's fiscal year 2009 request to help bring this vision to 
fruition.
    Question. Dr. Orbach, the Office of Science budget this year 
includes funding that was formerly in the Office of Nuclear Energy 
budget dealing with medical isotopes. What is the rationale for the 
decision to transfer the funding from Nuclear Energy to Nuclear 
Physics?
    Answer. The Office of Science, with sustained commitment in 
promoting physical science research and experience in facility 
operation and infrastructure management, is well equipped to meet the 
needs for a successful and viable national isotope program. In fiscal 
year 2009, the Nuclear Energy isotopes program will be transferred to 
the Nuclear Physics (NP) program within Science, and will be renamed 
and reformed as the Isotope Production and Applications program. This 
new program will expand the scope of the present program of 
radioisotope production to include research production of commercially-
unavailable radioisotopes in response to the needs expressed by the 
entire research community. Based on the successful NP model of 
fostering fundamental research, and within the scope of fiscal year 
2009 budget, the new program will include the support of $3.2 million 
for development and production of research isotopes, based on 
competitive peer review. The recent report of the National Academy of 
Sciences (NAS), entitled ``Advancing Nuclear Medicine Through 
Innovation'' (September 20, 2007) raises concerns about Federal support 
for sustained U.S. competitiveness including deteriorating 
infrastructure, lack of a domestic source for research isotopes, 
shortage of trained workforce and lost opportunities. The NP has 
established a working group with the National Institutes of Health to 
address the recommendations in the report and is also planning a 
workshop in the summer that will bring, for the first time, all of the 
major stakeholders in isotope production together discuss the Nation's 
needs in isotope development and production and initiate the 
development of a community-driven strategic plan.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein
    Question. The Department of Energy (DOE) does not always allocate 
funding to transform basic research results into applied applications. 
What is the Department doing to expedite development and deployment of 
fuel cell technology and other technologies to bridge the gap between 
basic and applied research?
    Answer. The Office of Science's fiscal year 2009 budget request 
contains proposals for four new areas of coordination between programs 
in Basic Energy Sciences (BES) and the applied technology offices 
within DOE. In each area, the basic research needs required to advance 
energy technologies and close the gap between basic and applied 
research have been identified through one or more of the Basic Research 
Needs workshops conducted by BES. The four areas are Electric Energy 
Storage (EES), Carbon Dioxide Capture and Storage, Characterization of 
Radioactive Waste, and Predicting High-Level Waste System Performance 
Over Extreme Time Horizons.
    In EES, the BES workshop on Basic Research Needs for EES (April 
2007) identified key areas of interfacial chemistry, electrochemistry, 
and materials science required to advance EES for novel battery 
concepts in hybrid and electric cars and for the effective utilization 
in the utility sector of renewable, but intermittent energy sources, 
including solar, wind, and wave energy. DOE technology offices that 
might benefit include Electricity Delivery and Energy Reliability for 
utility-scale energy storage and Energy Efficiency and Renewable Energy 
for the FreedomCAR and Vehicle Technologies program and the Solar 
Energy Technologies program.
    Carbon Dioxide Capture and Storage was a primary topic of the BES 
workshop on Basic Research Needs for Geosciences (February 2007), which 
identified the research challenges associated with the complex chemical 
and geological processes that occur when carbon dioxide is stored in 
deep porous underground formations. The Office of Fossil Energy is the 
primary beneficiary of this coordination effort.
    Characterization of Radioactive Waste is a broad coordination area 
that was covered in three BES Basic Research Needs workshops: Advanced 
Nuclear Energy Systems (July 2006), Geosciences (February 2007), and 
Materials Under Extreme Environments (June 2007). These workshops noted 
the extraordinary combination of complex chemical and physics processes 
that occur under the extreme environments associated with radioactive 
waste (temperature, pressure, radiation flux, and multiple complex 
phases) and defined the materials, chemical, and geological sciences 
needed to address them. Technology offices that could benefit from this 
coordination area include the Offices of Nuclear Energy (NE), 
Environmental Management (EM), and Civilian Radioactive Waste 
Management (RW).
    Predicting High-Level Waste System Performance over Extreme Time 
Horizons was also covered in the BES workshop on Basic Research Needs 
for Geosciences (February 2007), which addressed the remarkable 
challenge of developing the scientific understanding of the chemical 
and geological behavior of high-level waste in geological repositories 
necessary to develop models with predictive capability over extreme 
time durations, perhaps up to 1 million years. The DOE technology 
offices benefiting from this area include EM, NE, and RW.
    These four new coordination areas complement and expand already 
ongoing areas of coordination between Science and the technology 
offices in the hydrogen fuel initiative (HFI) and solar energy 
utilization. Our HFI coordination is noteworthy because it has been in 
operation for over three fiscal years and has demonstrated impressive 
results, particularly in the area of fuel cells. The BES and EERE have 
coordinated their HFI activities through extensive interactions between 
program managers, including information sharing on proposal 
solicitations and awards, and by promoting scientific interactions 
between BES investigators and those supported by EERE through joint 
contractor research meetings, which began in fiscal year 2006 and have 
continued on an annual basis since then.
    An example of the benefits of the HFI coordination in the area of 
fuel cells comes from work funded both by BES and EERE and conducted at 
Brookhaven National Laboratory. This work is aimed at developing 
electro-catalytic materials for hydrogen fuel cells that address one of 
the key barriers to widespread use of this technology--the prohibitive 
cost of fuel-cell catalysts that are based on precious metals, 
typically platinum. Basic research supported by BES led to the rational 
design, enabled in part by advanced computational chemistry, and 
development of nano-structured, electrocatalytic materials that have 
ultra-low platinum content. Detailed characterization of these new 
materials demonstrated improved catalytic activity toward the oxygen 
reduction reaction, which causes most of the efficiency loss in low-
temperature fuel cells. In work supported by EERE, this fundamental 
discovery is being examined for its potential in making efficient 
catalysts that may be used to convert hydrogen to electricity in fuel 
cells for electric vehicles. While platinum is the most efficient 
electrocatalyst for accelerating chemical reactions in fuel cells in 
electric cars, platinum dissolves in reactions during stop-and-go 
driving--a major impediment. Recently, however, Brookhaven researchers 
added gold clusters to a platinum electrocatalyst, which kept it intact 
during an accelerated stability test under laboratory conditions, a 
potential breakthrough for fuel-cell technology.
    Question. I am pleased to see the administration has again asked 
for an increase in spending at the Office of Science. DOE's Office of 
Science plays an essential role in developing cleaner sources of 
energy, stimulating breakthroughs in the biological sciences, pushing 
the frontiers of knowledge in physics, and improving energy efficiency. 
If Congress provides you with the increase to $4.7 billion for the 
Office of Science, as requested, what will the agency be able to do 
that it cannot do under its current budget?
    Answer. The fiscal year 2009 budget request will help enable the 
Office of Science to meet mission needs of the Department in energy, 
the environment, and national security as well as the goals of the 
American Competitiveness Initiative and the America COMPETES Act of 
2007 for U.S. leadership in science and innovation.
    Specifically the increase in the budget request will fully fund the 
U.S. fiscal year 2009 commitment for ITER (+$203,874,000). In fiscal 
year 2008 funding for ITER was limited to $10,626,000 and fell far 
short of the U.S. commitment of $160,000,000. The ITER project, which 
will demonstrate the scientific and technical feasibility of fusion 
power, is the top priority new facility for the Office of Science and a 
high-visibility international commitment. While the Office of Science 
and the U.S. ITER Project Office have implemented a strategy to 
mitigate the adverse impacts in fiscal year 2008, the United States 
would likely be forced to default on its ITER commitments and terminate 
the U.S. ITER project if sufficient funds are not provided and would 
likely damage our credibility as a partner in future large scale 
international projects.
    The requested increase will also allow the Office of Science Basic 
Energy Sciences program to initiate support for new areas in what we 
refer to as use-inspired research related to future energy technologies 
and fundamental research grand challenges that could result in greater 
understanding of how nature works. Approximately +$100,000,000 will be 
for the Energy Frontier Research Centers. The centers will bring 
together the Nation's intellectual and creative talent from 
universities, national laboratories, and private sector organizations 
to conduct innovative basic research to advance scientific 
breakthroughs relevant to 21st century energy technologies. Research 
topics would include solar energy utilization; hydrogen production, 
storage, and use; electrical energy storage; advanced nuclear energy 
systems; superconductivity; solid-state lighting; materials under 
extreme environments; catalysis; combustion of 21st century 
transportation fuels; and geosciences related to long-term storage of 
CO2 and nuclear waste. Awards for each center will be $2-5 
million per year for an initial 5-year period and we would expect to 
make 20-30 awards.
    Approximately +$71,270,000 of the requested increase would provide 
for more optimal operations of our major scientific user facilities. 
These facilities, from synchrotron light sources, neutron scattering 
sources, and whole genome sequencing facilities to particle colliders, 
high-performance computing resources, and nanoscale science research 
centers, are used by over 21,000 individuals each year. The suite of 
research capabilities and instruments supported by the Office of 
Science make up a significant pillar of the U.S. scientific research 
enterprise. Users come from universities, national laboratories, and 
industry. The increase in funding requested for the facilities will 
provide for maintenance, improved operations and extended operation 
times which enable greater researcher utilization
    Approximately +$136,280,000 is requested for construction of the 
next generation scientific user facilities and instruments. This 
includes continued construction of the Linac Coherent Light Source at 
Stanford Linear Accelerator Center, an x-ray light source with 
unprecedented intensity and ultrashort pulses for probing materials and 
biological molecules and observing chemical reactions in real time; the 
initiation of construction of the National Synchrotron Light Source II 
at Brookhaven National Laboratory, which will have the capability to 
resolve molecular and materials structures down to the 1 nanometer 
level resolution; and the 12 GeV upgrade to the Continuous Electron 
Beam Accelerator Facility at Jefferson Laboratory, which will enable 
advanced studies of nuclear structure. The funding increase will also 
support scientific instrument fabrication for several projects 
including the Neutrinos at the Main Injector (NuMI) Off-Axis Neutrino 
Appearance (NOvA) detector at Fermilab.
    Additional increases for research (+$265,387,000) is requested for 
high performance computing, systems biology for bioenergy and 
environmental applications, chemistry, materials sciences, climate 
change research, plasma sciences, high energy physics, and nuclear 
physics and radioisotopes. Part of this increased funding is requested 
for international linear collider (ILC) research and superconducting 
radiofrequency (SRF) research to support the development of next 
generation accelerator-based facilities such as light sources, neutron 
sources, and particle colliders. Such research is not only critical to 
push the technology frontiers of future facilities, but it also enables 
advancements in technologies for medical instruments and cancer 
treatments. Fiscal year 2009 funding increases for neutrinos research 
capabilities such those enabled by NOvA, the ILC, and SRF research 
provide support for U.S. researchers to participate in the Large Hadron 
Collider at CERN. Such investments will position U.S. researchers to 
participate in the leading-edge high energy physics research here and 
abroad and maintain the critical scientific and technical capabilities 
to successfully lead the development of the next-generation particle 
collider facility in the coming decades.
    Research increases in scientific computing and applied mathematics 
will enable U.S. researchers to take advantage of petascale computing 
capabilities for the advancement of some of our most challenging 
scientific questions that are not tractable through theory or 
experimentation. Increases will also support transfer of the DOE 
Isotope Program to the Office of Nuclear Physics from the Office of 
Nuclear Energy and the creation of a research and isotope production 
program that will focus on addressing the radioisotope needs of the 
medical, research, and industry communities in the United States.
    The fiscal year 2009 request of $4,721,969,000 for the Office of 
Science will support approximately 23,700 Ph.D's, graduate students, 
undergraduates, and technical staff and universities and the national 
laboratories, a significant number of the Nation's scientific and 
technical skilled workforce. In fiscal year 2006, the Office of Science 
provided approximately $161,472,000 to California universities and 
research and industry organizations, not including the research and 
facilities supported at the four DOE laboratories in your State. The 
contributions that California scientists and engineers make to the 
Department's mission and to U.S. innovation and competitiveness are 
tremendous and I assure you they are well positioned to participate in 
the research activities we have proposed as part of the fiscal year 
2009 budget request.
    Question. I am interested by your proposed plan to establish Energy 
Frontier Research Centers (EFRC) Initiative. I think we can anticipate 
that many California universities will be eager to apply for the 
centers. How is the Department soliciting input from the scientific 
community on the initial areas of investment?
    Answer. The areas of emphasis for the EFRC initiative were 
developed over the last 6 years in an extensive series of workshops 
sponsored by the Basic Energy Sciences program and its advisory 
committee, the Basic Energy Sciences Advisory Committee (BESAC). These 
began with a BESAC workshop on Basic Research Needs to Assure a Secure 
Energy Future in 2002. This was followed by a series of 10 Basic 
Research Needs workshops run by BES that covered the hydrogen economy, 
solar energy utilization, superconductivity, solid state lighting, 
advanced nuclear energy systems, combustion of 21st century 
transportation fuels, geosciences, electrical energy storage, materials 
under extreme conditions, and catalysis for energy. Finally, BESAC 
recently completed a report on scientific grand challenges, ``Directing 
Matter and Energy: Five Challenges for Science and the Imagination.'' 
In total, some 1,500 scientists, the bulk of whom were from 
universities, participated in these workshops. The EFRC initiative 
requests proposals that satisfy two criteria with regard to topical 
areas--that they address one of the grand challenge themes from the 
BESAC report and that they address one of the energy grand challenges 
put forth in the series of 10 Basic Research Needs workshop reports.
    Question. What is your vision for the centers?
    Answer. We envision the EFRCs as centers that will bring together 
the skills and talents of a critical mass of investigators to enable 
energy relevant, basic research of a scope and complexity that would 
not be possible with the standard single-investigator or small-group 
award. The EFRCs should present research programs that are balanced and 
comprehensive and, as needed, support experimental, theoretical, and 
computational efforts. We expect that EFRCs will be lead and managed in 
such a way as to present world-leading programs that encourage high-
risk, high-reward research. Finally, the EFRC program provides a 
tremendous opportunity to inspire, train, and support leading 
scientists of the future who have a deep and sincere appreciation for 
the global energy challenges of the 21st century.
    Question. When do you anticipate the competition to be announced?
    Answer. The Funding Opportunity Announcement (FOA) for the ERFC 
competition (DE-PS02-08ER15944) was initially published on April 4, 
2008, and was amended on April 23, 2008. Applications in response to 
the FOA will be accepted through October 1, 2008.
    Question. How will universities be judged?
    Answer. Pursuant to section 989 of EPAct 2005 regarding DOE merit 
review of proposals, the EFRC FOA provides a single opportunity 
announcement for universities, for-profit companies, nonprofit 
entities, and DOE laboratories. The FOA is open equally and fairly to 
all of these entities and, importantly, is very flexible with regard to 
teaming between such entities. All applications, regardless of the 
nature of the lead organization, will be judged through rigorous merit 
review, in accordance with 10 CFR 605.10(b), on the basis of four major 
criteria: scientific and/or technical merit of the project, 
appropriateness of the proposed method or approach, competency of the 
applicant's personnel and adequacy of the proposed resources, and 
reasonableness and appropriateness of the proposed budget. Additional 
information on the EFRCs, including a link to the FOA, can be found on 
the EFRC webpage on the BES website at http://www.sc.doe.gov/bes/
EFRC.html.
    Question. As you know, Berkeley Lab is leading the Joint BioEnergy 
Institute (JBEI), along with Sandia, Livermore, UC Davis, UC Berkeley 
and the Carnegie Center for Plant Biology at Stanford. With funding 
from the Office of Science, JBEI is developing the science and 
technology that will drive sustainable biofuel solutions to the market 
in time to make a difference. Could you please give the committee a 
report on the progress of JBEI and the other bioenergy research 
centers? Is $25 million per year, per center, enough to meet the 
biofuel production targets in the Energy Independence and Security Act?
    Answer. All three DOE GTL Bioenergy Research Centers (BRCs) are up 
and running today and engaged in cutting-edge basic research needed to 
develop cost-effective methods of producing cellulosic biofuels. 
Secretary Bodman announced the award of the three BRCs on June 26, 
2007, following an open competition and an intensive scientific merit 
review process. From July through September, DOE negotiated with the 
lead institutions of the selected BRCs on the terms and conditions of 
the awards. These negotiations were concluded before the end of fiscal 
year 2007, and each of the BRCs received $9.97 million in fiscal year 
2007 funds to accelerate their start-up. The Department plans to 
provide each BRC with $25 million per year through fiscal year 2012, 
for a total 5-year program investment of $405 million.
    The three BRCs are the Joint BioEnergy Institute (JBEI), led by the 
Lawrence Berkeley National Laboratory (LBNL) and located near Berkeley, 
CA.; the BioEnergy Sciences Institute (BESC), led by Oak Ridge National 
Laboratory (ORNL) and based on the ORNL campus in Oak Ridge, TN; and 
the Great Lakes Bioenergy Research Center (GLBRC), led by the 
University of Wisconsin-Madison (UMW) in partnership with Michigan 
State University and based on the UMW campus in Madison, WI. All three 
BRCs represent multi-institutional partnerships. Partner institutions 
include universities, DOE National Laboratories, private firms, and one 
nonprofit.
    DOE will evaluate the performance of the BRCs on a yearly basis. 
The Department conducted an early Technical and Management Review of 
the BRCs in November 2007. As a result of the review, all three BRCs 
have put in place strong management plans and systems and have 
established clear sets of scientific milestones and deliverables to 
focus and guide their research programs.
    The BRCs are geographically dispersed, with scientific approaches 
that are complementary and synergistic. All three BRCs are using the 
advanced genomics-based techniques of modern systems biology to re-
engineer both plants and microbes for more efficient biologically-based 
conversion of plant fiber into fuels.
    JBEI is focusing on the widely studied ``model plants'' of 
Arabidopsis and rice (as well as some work on switchgrass), for which 
there is abundant genotypic and phenotypic information. JBEI believes 
that critical changes can be accomplished more readily in model plants 
and then transferred to bioenergy crops. JBEI is pursuing a novel 
strategy vis-a-vis lignin--a substance that occludes cellulose and 
forms a major barrier to deconstruction of plant fiber. Through 
detailed analysis of cell wall biosynthesis, JBEI is seeking to change 
the monomer composition of lignin, replacing existing monomers with new 
monomers whose mutual bonds can be cleaved by specialized enzymes. In 
addition, JBEI is studying the use of ionic liquids for pretreatment 
using advanced imaging technology, in an effort to overcome the 
limitations of current pretreatment methods, which produce chemical 
byproducts that inhibit enzymes used in subsequent hydrolysis and that 
are often toxic to the microbes used for fuel synthesis. JBEI is 
pursuing a series of unique strategies on microbes, including re-
engineering microbes to better degrade plant fiber and to produce a 
range of fuels beyond ethanol that are more like gasoline. JBEI is also 
seeking to adapt microbes to achieve Consolidated Bioprocessing, using 
single microbes or microbial communities.
    BESC is focusing on the central problem of ``recalcitrance,'' i.e., 
overcoming the resistance of plant fiber, or lignocellulose, 
degradation into sugars that can be converted into fuels (usually by 
fermentation). Research by BESC investigators has shown that 
recalcitrance of plant fiber forms the major cost barrier to achieving 
commercially viable production of cellulosic ethanol and other fuels 
from lignocellulose. BESC is focusing directly on the bioenergy crops 
of switchgrass and poplar as well studying the microbes that can 
degrade them, attempting to re-engineer both the plants and microbes to 
facilitate degradation. On the plant side, BESC is building a high-
throughput screening system with standardized pretreatment and 
enzymatic hydrolysis steps to screen thousands of genetic variants of 
switchgrass and poplar for amenability to deconstruction. The genomes 
of the most readily deconstructed variants will then be re-sequenced to 
identify the genes responsible for cell wall digestibility, providing a 
basis for genetically engineering optimized feedstocks. On the 
microbial side, BESC has engaged in bioprospecting in hot pools in 
Yellowstone National Park, inhabited by thermophiles that degrade 
cellulose. Samples are being subjected to metagenomic DNA sequencing 
and analysis in an effort to discover more efficient cellulases 
(cellulose-degrading enzymes) that operate at high temperatures. BESC's 
long-term objective is to achieve ``Consolidated Bioprocessing,'' or 
combined degradation and fuel synthesis in one step, using a re-
engineered microbe or community of microbes.
    GLBRC, in addition to focusing on recalcitrance of plant fiber, is 
pursuing the alternative approach of engineering plants to produce more 
starches and oils. These substances can be more readily converted to 
fuels. GLBRC points out that a 20-percent increase in plant oil content 
could nearly double the fuel yield from plant biomass. GLBRC, 
reflecting its affiliation with universities with strong agricultural 
programs, is focusing on re-engineering a wide variety of plants as 
well as microbes that can degrade plants and produce fuels, and they 
are investigating the sustainability of biofuel production. GLBRC plant 
researchers (mostly located at the Plant Research Laboratory at 
Michigan State University) are pursuing in-depth, genomics-based 
analysis of the complex process of cell wall biosynthesis to find 
methods of inducing more starch and lipid production in these 
structures. GLBRC is also engaged in bioprospecting and metagenomic 
analysis of microbial communities using somewhat different techniques 
and focusing on samples from Costa Rican rain forests. GLBRC is 
utilizing the technique of directed evolution (accelerated by a new 
generation of genomic sequencing technologies now available at the DOE 
Joint Genome Institute) to optimize microbes for ethanol production. 
GLBRC is also studying the production of hydrogen through microbial 
biorefineries.
    The current level of proposed funding for the three Bioenergy 
Research Centers will yield transformational discoveries that will 
enable dramatic improvements in our ability to produce biofuels from 
biomass at greatly reduced cost.
    Question. Recently you described to me how the Joint Genome 
Institute in Walnut Creek, California is sequencing the genomes of the 
organisms within the guts of termites in search of ways to more 
efficiently and cost-effectively break down biomass for conversion into 
fuel. Could you please elaborate on why this research is important and 
why the Office of Science is the appropriate funder and steward of this 
type of scientific inquiry? Additionally could you explain the broader 
role the JGI is playing in the Office of Science's energy research 
objectives? Finally, please describe how technologies developed through 
the bioenergy research centers will make their way to the marketplace.
    Answer. The diverse community of microbes inhabiting the guts of 
termites is one of nature's most efficient systems for breaking down 
cellulosic plant material and converting it into simpler products, 
including hydrogen and short chain carbon compounds, that feed the 
termite host. Although we have a general understanding of the chemical 
reactions that take place in the termite gut, we know relatively little 
about the specific microorganisms and enzymes that carry out these 
processes. However, new research techniques are now allowing us to 
directly probe novel metabolic capabilities encoded in the genomes of 
termite gut microbes. The DOE Joint Genome Institute recently completed 
sequencing of the microbial community genomes (i.e. ``metagenomes'') of 
two Costa Rican termites capable of very high rates of cellulose 
degradation. More than 800 new genes believed to be involved in 
cellulose breakdown were identified, as well as over 150 genes involved 
in hydrogen production and hundreds of additional genes encoding 
functions crucial to the operation of the system. Far more than just a 
catalogue of new genes and enzymes, this study provides researchers 
with an important new tool to understand the complex systems biology 
that allows the host and microbial community to act as an integrated 
whole. Continued studies of the termite gut symbiosis will allow us to 
not only consider novel approaches that are being applied to the 
conversion of plant biomass to biofuels, but also provides critical new 
information on a key component of the global carbon cycle. As the 
Federal Government's lead agency for biofuels research, DOE's Office of 
Science is the appropriate funder and steward for this fundamental, 
transformation research.
    In addition to its critical sequencing of the termite gut 
metagenome, the JGI is playing a key role in the DNA sequencing and 
analysis of prospective biomass crops, including the poplar (the first 
tree genome), soybean (for biodiesel), and switchgrass and of other 
microbes with enzymes or biochemical pathways important for cellulose 
degradation and carbon cycling.
    All three DOE Bioenergy Research Centers have already begun laying 
the groundwork for eventual transfer of new technologies that emerge 
from their research. Both the BioEnergy Sciences Institute (BESC), led 
by Oak Ridge National Laboratory (ORNL), and the Great Lakes Bioenergy 
Research Center (GLBRC), led by the University of Wisconsin-Madison 
(UMW) in partnership with Michigan State University, have industry 
partners as integral members of their respective teams. All three BRCs 
have advisory boards with industry representatives. The Joint BioEnergy 
Institute (JBEI), led by the Lawrence Berkeley National Laboratory 
(LBNL) and located near Berkeley, CA is developing close relations with 
the biotech industry and investment community centered in the San 
Francisco Bay Area. The BRCs will have multiple paths for 
commercialization of new technologies that flow from their discoveries. 
In addition, BER is coordinating the research in its Genomics:GTL 
program, including research at its Bioenergy Research Centers, with 
biorefinery demonstration projects funded by DOE's Office of Biomass 
Programs.
    Question. The Department of Energy's Office of Science pioneered 
the field of modern supernova cosmology. DOE's strength in this area 
has led to many awards, prizes and international recognition of the 
strength of this program. It was your personal support of this 
important work that set the stage for this international scientific 
leadership. Through the Joint Dark Energy Mission, which is a 
collaboration between your office and NASA, are you confident that DOE 
will maintain its vitality and leadership in the field? Please give the 
Committee an update on the Joint Dark Energy Mission.
    Answer. The DOE sponsored scientific community has broad expertise 
in scientific collaborations, data analysis, and advanced 
instrumentation. By contributing to these areas of expertise the 
community will maintain vitality and a leadership role in the field.
    DOE, NASA, and OSTP have been meeting regularly to lay out the plan 
for the Joint Dark Energy Mission (JDEM). As a result of the agency 
collaboration, DOE and NASA have agreed to participate in a JDEM; JDEM 
will be a medium-class strategic mission with a competitively selected, 
principal investigator-led dark energy science investigation; DOE and 
NASA will partner in the fabrication and operation of instrumentation 
necessary to execute the science investigation; and DOE's cost for the 
fabrication and operations phase is estimated to be up to $200 million 
in fiscal year 2008 dollars, or roughly 25 percent of the cost of the 
expected total lifecycle mission. The agencies are currently working on 
a Memorandum of Understanding describing the collaboration. The 
planning schedule includes the release of the Announcement of 
Opportunity (AO) near the end of 2008, with a draft in summer; 
selection of a particular concept and start of conceptual design in 
fiscal year 2009, and launch in 2014 or 2015.
                                 ______
                                 
             Questions Submitted to Hon. Alexander Karsner
             Questions Submitted by Senator Byron L. Dorgan
                        biomass/ethanol mandate
    Question. The Energy Independence and Security Act of 2007 requires 
that suppliers must blend 36 billion gallons of renewable fuel into 
gasoline by 2022. Of the 36 billion gallons of renewable fuel, 21 
billion gallons must be ``advanced biofuels'' (fuels produced from non-
corn feedstocks). On March 4, Guy Caruso, Administrator of the Energy 
Information Administration, testified before the Senate Energy 
Committee, and said that it was unlikely that we would reach these 
mandates by 2022. Do you believe that we can reach the 36 billion 
gallon mandate by 2022?
    Answer. The Department believes that the Renewable Fuels Standard 
(RFS) established in EISA is achievable. Achievement of the RFS will 
require consistent policy and regulatory certainty so as to sustain the 
necessary private investment.
    The RFS is not limited to ethanol. Other biofuels, including 
biodiesel and biomass-to-liquids, may contribute to the mandates 
specified in the RFS. However, ethanol is expected to play a central 
role in the fulfillment of this standard. In terms of ethanol produced 
from corn, the current U.S. ethanol production capacity exceeds 9.9 
billion gallons with an additional 3.7 billion gallons under 
construction.\1\ Based on current trends and our analysis of industry 
plans, we believe that the industry will likely reach the 15 billion 
gallons of conventional biofuel requirement before the scheduled 2015 
date.
---------------------------------------------------------------------------
    \1\ See Renewable Fuels Association, http://www.ethanolrfa.org/
industry/locations/ as of August 20, 2008.
---------------------------------------------------------------------------
    Integrating large amounts of renewable fuels required by the RFS 
into the current transportation fuel distribution system presents 
unique challenges, most likely requiring the use of either E85 or 
possibly intermediate ethanol blends. Combining the supply and demand 
elements of the RFS will require close coordination among renewable 
fuel and feedstock producers, transportation fuel producers and 
blenders, and Federal and State agencies. The Biomass R&D Board will 
play an important role in achieving the national goals established in 
EISA by bringing coherence to Federal strategic planning. The Board is 
co-chaired by the Departments of Energy and Agriculture, and also 
consists of senior decisionmakers from across the Federal Government.
    Question. What advanced biofuel do you foresee making up the 21 
billion gallon requirement?
    Answer. In terms of advanced biofuels, DOE's goal is to make 
cellulosic ethanol cost-competitive by 2012. We anticipate that 
cellulosic ethanol will comprise the majority of the 21 billion gallon 
``advanced biofuel'' requirement.
                             weatherization
    Question. Mr. Karsner, I understand that since 1976, we have spent 
$8 billion on the Weatherization Program, but only improved 5 million 
homes. Your budget states that, ``EERE's Energy Efficiency portfolio 
has historically provided approximately a 20 to 1 benefit to cost 
ratio; in comparison, Weatherization has a benefit to cost ratio of 1.5 
to 1.'' Clearly, we have a considerable amount of work to do to make 
our buildings and homes more energy efficient. But, as policy makers we 
need to understand the quickest and most cost effective way to do so. 
If you were to develop a more effective program what would you propose?
    Answer. After almost three decades, DOE has weatherized about 5.5 
million homes out of the 34 million annually eligible. As you have 
noted, based on a study by the National Research Council, investments 
in some energy efficiency applied R&D between 1978 and 2000 resulted in 
returns 20 times greater than the cost of the investment.\2\ In 
contrast, the energy savings from Weatherization Assistance Program 
grants result in a significantly lower benefit/cost ratio of 1.53 to 1. 
This ratio was calculated by Oak Ridge National Laboratory based on 
past evaluation efforts and Energy Information Administration projected 
energy prices.\3\ Weatherization Assistance is an important goal, but 
is an anomaly because it addresses social welfare goals in addition to 
energy efficiency improvement.
---------------------------------------------------------------------------
    \2\ ``Energy Research at DOE: Was It Worth It?'' National Research 
Council (http://www.nap.edu/openbook.php?isbn=0309074487). This study, 
published in 2001, analyzed investments in 17 energy efficiency R&D 
activities between 1978 and 2000 costing a total of $1.566 billion 
(p.23) and representing about one fifth of energy efficiency program 
spending in that time frame. The NRC found overall net economic returns 
of about $30 billion (p.29) . This is a public return 20 times greater 
than the cost of the investment within the time period considered. In 
addition, the NRC calculated net environmental benefits worth $3-20 
billion for these activities. As is the case with many diverse R&D 
investment portfolios, most of the benefits were generated by few--in 
this case, 3 of 17--activities assessed (p. 29).
    \3\ The ORNL analysis can be found on the web (http://
weatherization.ornl.gov/pdf/CON-493FINAL10-10-05.pdf). The benefit/cost 
ratio in the study is 1.34--the 1.53 ratio cited above uses the same 
calculations with energy cost data updated for 2006.
---------------------------------------------------------------------------
    Prudent portfolio management requires DOE to focus available 
resources on its core areas of expertise and mission consistent with 
the DOE Strategic Plan. DOE is currently prioritizing development of 
new technologies, model building codes, and innovative programs for 
existing homes. Through the Building Technologies Program, the 
Department is committed to developing reliable, affordable, and 
environmentally sound renewable energy and energy efficiency 
technologies that significantly reduce the energy consumption and peak 
electrical demands of residential and commercial buildings. During the 
design and construction of a new home, far more can be achieved to 
bring it to net zero energy use in a cost-effective way than can be 
done with an existing building. Furthermore, many of these gains can be 
achieved in new construction at no initial first cost. It is important 
that buildings added to the housing stock be more energy efficient when 
built, so as to prevent the more costly and less effective task of 
fixing the problem by retrofitting them in the future.
    However, building energy codes only establish a minimum level of 
construction below which builds cannot be built. While it is important 
to continue to raise the building energy codes bar, it is also 
important to invest in research, development and demonstration of homes 
that can achieve greater energy efficiency than code and eventually 
net-zero energy homes, as well as to apply these technologies to 
existing homes as much as possible. It is important to raise the bar on 
appliance standards, so that replacement appliances and equipment are 
made continually more efficient than the models they replace. It is 
also important to put in place incentive programs, such as Home 
Performance with ENERGY STAR, to encourage private sector investment in 
greater efficiency, as well as upgrade our existing building stock.
                       mesa del sol solar project
    Question. Mesa del sol.--Mr. Karsner, part of your responsibilities 
include increasing the Federal Government usage of renewable energy. I 
have been made aware of Federal procurement rules that prevent Kirtland 
Air Force Base from signing a long term power purchase agreement beyond 
10 years. We have a site in New Mexico, located between Mesa del sol 
and Kirtland AFB that has been identified as an ideal site for a 100 MW 
concentrating power plant with a molten salt storage reservoir. 
However, procurement rules prevent the base from entering into a 
contract beyond 10 years, well short of the useful life of the plant, 
which has a big impact on the economics of the deal. First, do you 
believe these procurement limitations are having an impact on the 
deployment of clean energy technology?
    Answer. It is true that the Government-wide authority for utility 
purchases is limited, in most instances, to 10 years. That authority 
was created for traditional utility purchases and is not well-suited to 
the type of renewable energy projects that would require a substantial 
initial capital investment.
    Question. If Congress were to change the requirement to allow 
Federal agencies to enter into longer term power contracts, do you 
believe this would have a positive impact on the commercial deployment 
of renewable energy technology? Would you support this change?
    Answer. The Federal Government should lead by example in its use of 
renewable energy. To do so, we should assess whether there are legal 
impediments to its use. If so, the administration stands ready to work 
with Congress to develop workable solutions.
                       concentrating solar power
    Question. Recently Sandia National Lab announced a world record for 
solar to energy conversion. On January 31, 2008, a sterling 
concentrating solar array located at Sandia Thermal Test Facility 
achieved a world record of 31.25 percent net efficiency rate. Despite 
the promising performance, your budget maintains a wide disparity 
between funding for photovoltaic research ($137 million) and 
concentrating solar research. ($19 million). Based on economic and 
technology performance with concentrating solar technology, why the 
large disparity in funding? How will the Department facilitate the 
commercial deployment with such low levels of funding?
    Answer. The Department believes that it has struck an appropriate 
balance between photovoltaic (PV) and concentrating solar power (CSP) 
technology funding. CSP's advantages include a lower cost than solar PV 
technology, as well as the capability to store thermal energy for later 
use. PV, however, remains the focus of most of DOE's solar program 
funding for several reasons.
    Primarily, PV can provide energy solutions for the entire Nation, 
not just the Southwest. Also, PV technology faces more challenges to be 
cost competitive with conventional electricity sources. It has a 
significantly larger and more diverse industry base with Federal R&D 
support needs in multiple technology areas (e.g., crystalline silicon, 
thin films, multi-junction cells) at various links in the supply chain 
(e.g., semi-conductor devices, PV modules, inverters). Significant R&D 
advances will be needed to achieve the aggressive Solar America 
Initiative PV electricity goal, to be cost-competitive nationwide with 
grid electricity by 2015.
                       plug in hybrid technology
    Question. There is no doubt that we must improve our battery 
technologies across a broad range energy sources that rely on storage 
as a key component. In my opinion, energy storage is one of the most 
important pieces currently missing in our energy puzzle. What is EERE 
currently doing to advance battery technologies?
    Answer. In fiscal year 2008, DOE's Office of Energy Efficiency and 
Renewable Energy (EERE) is providing approximately $48.2 million to 
support long-term research, applied research, and technology 
development of advanced batteries for electric, hybrid-electric and 
plug-in hybrid vehicle (EV, HEV and PHEV) applications. EERE's applied 
research is focused on developing advanced materials for the next 
generation of energy storage technologies that offer the potential for 
significant improvements over existing batteries. In fiscal year 2009, 
DOE plans to award battery contracts focusing on improving battery 
performance through the development of manufacturing technology. This 
approach is expected to improve performance attributes such as cycle 
life, while simultaneously fostering domestic manufacture of advanced 
battery technology and reducing production cost.
    In addition to battery research, EERE is providing $22 million in 
support of modeling, simulation and testing of PHEVs in fiscal year 
2008. Activities include laboratory and closed track testing, and real-
world monitored fleet evaluations.
    Question. When do you believe we can have large scale deployment of 
plug-in hybrid cars and what public policies changes are needed to 
achieve this objective?
    Answer. The Department is working to achieve faster market 
penetration of plug-in hybrids (PHEVs) by developing technological and 
cost improvements to battery and electric drive components. The 
Department's goal is to reduce the high-volume production cost of 
lithium ion batteries to $300/kW by 2014, which, along with other 
improvements, could help PHEVs become cost competitive.
    Lower costs help enable industry make the decision to 
commercialize, but ultimately greater market penetration is dependent 
on automakers as they make production decisions over the next several 
years, and by investments in battery manufacturing. GM plans to 
introduce its Chevy Volt PHEV in 2010, but we expect that there will be 
significant incremental cost that may prevent large-scale deployment. 
Other manufacturers have been non-committal on dates for commercially 
offering PHEVs.
    Consistent and durable policies have been critical to the rapid 
uptake of hybrids, and will be critical to PHEVs as well. Automakers, 
suppliers, and battery manufacturers may also be eligible to apply for 
the Department's Loan Guarantee Program under title XVII of the Energy 
Policy Act of 2005, which lowers the financial risk of private 
enterprise in moving the successful results of research investments 
from the laboratory to the commercial marketplace. The Department is 
currently soliciting up to $10 billion in loan guarantees for 
innovative energy efficiency, renewable energy, and advanced 
transmission and distribution technologies in fiscal year 2008.
                         building technologies
    Question. I know that it is the goal of the Building Technologies 
program to spur commercial production of Net-Zero Energy Homes by 2020. 
I believe that building technologies can play a very significant role 
in reducing our Nation's energy consumption. How do you expect this 
program to have nationwide effectiveness when numerous States do not 
even have a building code?
    Answer. The Department's Building Technologies Program goal of 
achieving commercially viable Net-Zero Energy Homes by 2020 is a 
research and development effort involving building industry leaders, 
many of whom recognize the inherent value in building homes that 
perform significantly beyond State and/or national model codes. While 
State and national building codes set the minimum levels of 
performance, our zero energy building-related efforts do not rely on 
the existence of codes in a jurisdiction, in moving ``beyond code.'' 
Codes require a minimum level of construction and energy efficiency 
below which houses should not be built. While there is substantial 
value in State adoption, implementation, and enforcement of building 
energy codes for the Nation, it is important for all housing can 
benefit from advances in building energy codes. We can encourage the 
construction of a significant number of Net-Zero Energy Homes by 2020.
    To reduce energy consumption and to help U.S. home builders and 
buyers make informed decisions about efficiency and distributed energy, 
the Department has developed activities to encourage a robust market 
demand for more efficient homes through national and regional consumer 
education efforts. Combined with market forces (i.e. energy prices) and 
acceptance (i.e. consumer demand), builder training and codes can work 
in concert to drive standard practice toward net-zero energy homes over 
the long term for broader deployment of energy efficient technologies.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein
    Question. Mayor Villaraigosa and the city of Los Angeles are 
interested in the green technologies funded by EERE. What is the best 
way for the Appropriations Committee to assure that EERE's funding is 
spent in a way that rewards the best ideas of local government?
    Answer. The proven way to ensure funds are allocated to the best 
ideas is the competitive solicitation process. The Department offers a 
number of resources for local governments, including programs in the 
Solar Technologies Program (Solar America Cities), Vehicle Technologies 
Program (Clean Cities), Building Technologies Program (Building 
America), and the Wind and Hydropower Technologies Program (Wind 
Powering America). In addition, cross-cutting resources are available 
such as the State Energy Program formula and competitive grants, and 
the Technical Assistance Project supported by the Department's national 
laboratories and funded by the State Energy Program. Funds for Solar 
America Cities and State Energy Program-competitive grants are awarded 
competitively to applicants through a rigorous merit review process. 
Funds provided to local governments through the State Energy Program-
formula grants are allocated according to a method determined by the 
individual State. The Technical Assistance Project (TAP) requires an 
application process and proposal review to determine eligibility for 
assistance. TAP helps States with individualized, short-term assistance 
in areas that are not covered by other DOE programs. Projects are 
limited to $5,000 or between 30-60 hours of staff time. Funding is used 
to cover staff time and travel for laboratory experts and is not 
distributed directly to the applicant.
    Question. According to a recent study by McKinsey and Company, one 
of the most cost effective opportunities to reduce greenhouse gas 
emissions is in household electronics. Specifically, the growing use of 
electricity in televisions and computers is a matter of great concern. 
What can EERE or Congress do to reduce this energy use?
    Answer. DOE is actively engaged in establishing energy efficiency 
standards for consumer electronics. The Energy Independence and 
Security Act recently prescribed efficiency standards for the most 
common class of external power supplies which become effective July 1, 
2008. In addition, the Department is currently in the beginning phases 
of initiating a rulemaking on battery chargers and external power 
supplies, which is scheduled for completion by July 2011. This 
rulemaking will address the energy use associated with a wide variety 
of products including laptop computers, cell phones, power tools, and 
printers, among others.
    In addition, the Energy Independence and Security Act of 2007 (EISA 
2007), Public Law 110-140, authorizes DOE to incorporate standby mode 
and off mode energy consumption into all new or revised standards 
adopted after July 1, 2010 (for residential products). The Department 
is now working to revise certain test procedures to account for standby 
mode and off mode energy consumption in accordance with the deadlines 
in EISA 2007. When in place, these energy efficiency standards have the 
potential to greatly reduce energy consumption and greenhouse gas 
emissions.
    DOE and the Environmental Protection Agency jointly administer the 
ENERGY STAR program to promote more efficient products, including 
consumer electronics. The Federal Government generally is required to 
purchase energy efficient products, including ENERGY STAR-labeled 
products, and has led in the procurement of low standby power devices.
    Question. I was pleased to see EERE ask for money to fund 
geothermal research this year. Please describe exactly how these funds 
will be spent, and for what purpose.
    Answer. The mission of the Department's Geothermal Technology 
Program is to conduct research and development (R&D) on Enhanced 
Geothermal Systems to advance the technology as an economically 
competitive contributor to the United States energy supply. Enhanced 
Geothermal Systems (EGS) are engineered reservoirs created to produce 
energy from geothermal resources deficient in hot water and/or 
permeability. If EGS development is successful, the technology may be 
deployable nationwide as opposed to conventional geothermal technology 
that is limited to the western United States.
    The Department issued a competitive solicitation on June 18, 2008, 
for awarding industry cost-shared EGS projects. Two topic areas are 
listed in the solicitation: component R&D technologies that address key 
aspects of reservoir creation, management, and utilization, and 
demonstration projects that will test and validate stimulation 
techniques for improving well productivity. The EGS-related R&D in the 
areas of reservoir stimulation, fracture mapping, and fluid circulation 
will also have applicability for expanding conventional (i.e., 
hydrothermal) fields.
    impact of tax credits for renewable energy and energy efficiency
    Question. I have worked with my Senate colleague Olympia Snowe to 
extend existing tax credits for renewable energy and energy efficiency. 
Please describe what impact these tax credits are having in the market 
place. Please identify the amount of new investment in renewable energy 
and energy efficiency that has resulted as a result of these tax 
provisions. Please estimate the job impacts if Congress allowed these 
credits to expire at the end of 2008.
    Answer. While the Department is unable to quantify the exact amount 
of investment in energy efficiency and renewable energy directly 
resulting from these tax provisions, the past 10 years demonstrate a 
strong correlation between the intermittent availability of the 1-year 
production tax credit (PTC) extension and the volume of investment in 
renewable energy sources such as wind power. The tax policy has likely 
spurred investment; however, American Wind Energy Association data show 
that expirations of the Federal PTC in 1999, 2001, and 2003 were 
followed by drops in new wind installations in 2000, 2002, and 2004.
    With the tax credit in effect in 2007, the United States led the 
world in new wind installations with over 5,300 MW installed.\4\ This 
growth translates into approximately $9 billion (real 2007 dollars) 
invested in wind project installations.\5\ While there are no studies 
on the exact number of jobs directly associated with the tax credit, 
increased demand has led to increased manufacturing jobs in the wind 
industry, which may compete with other energy sectors.
---------------------------------------------------------------------------
    \4\ See Annual Report on U.S. Wind Installation, Cost, and 
Performance Trends: 2007, U.S. Department of Energy's Office of Energy 
Efficiency and Renewable Energy (May 2008) http://www.nrel.gov/docs/
fy08osti/43025.pdf.
    \5\ Id.
---------------------------------------------------------------------------
                                 ______
                                 
                 Questions Submitted to David G. Frantz
             Questions Submitted by Senator Byron L. Dorgan
                               timetable
    Question. Mr. Frantz, it has been over 90 days since the President 
signed the Consolidated Appropriations Act providing the Department 
with $38.5 billion in loan guarantee authority. This bill directed the 
Department to develop a plan to execute the program and to send this 
report to Congress for review within 45 days. When can we expect the 
Department to send this proposed plan to Congress? When do you expect 
to put a solicitation out on the street for bids and how soon do you 
expect to make awards?
    Answer. On April 11, 2008, the Department of Energy submitted an 
``fiscal year 2008 Implementation Plan.'' The Consolidated 
Appropriations Act, 2008, requires that DOE wait for a period of 45 
days from submission of the Implementation Plan to Congress prior to 
issuing a new loan guarantee solicitations. The Implementation Plan 
outlines the Department's plans to issue loan guarantee solicitations 
in two stages this summer for up to $38.5 billion for projects that 
employ advanced technologies that avoid, reduce, or sequester emissions 
of air pollutants and greenhouse gases. These planned solicitations 
will mark the second and third rounds of solicitations for the 
Department's Loan Guarantee Program, which encourages the development 
of new energy technologies and is an important step in paving the way 
for clean energy projects.
                        loan guarantee potential
    Question. Mr. Frantz, I have noticed from your bio you have over 35 
years of experience in project finance in the energy sector and served 
10 years as the Director of Project Finance for OPIC. That is quite an 
extensive amount of experience. Can you please explain what the 
financial advantage the loan guarantee program provides to the 
investors of these alternative energy projects? What is the cost 
savings of receiving Federal assistance?
    Answer. One of the goals of the Department of Energy's title XVII 
Loan Guarantee Program is to encourage the commercial use in the United 
States of new or significantly improved energy-related technologies. 
There are a number of financial advantages that the loan guarantee 
program provides to investors of these types of alternative energy 
projects. Primarily, without a loan guarantee, investors in an 
innovative energy project may not have the financing necessary to 
establish the project, thereby potentially denying the commercial scale 
up of their respective technologies due to the unavailability of 
alternative debt financing.
    While the Department's loan guarantee program offers clear benefits 
to alternative energy project investors, there is no measurement of the 
aggregate cost savings of participating in the program. In fact, energy 
investors might not even be permitted to proceed to full 
commercialization due to the unavailability of alternative financing. 
Each project supported by a loan guarantee will be evaluated on its 
particular strengths and weaknesses to determine the risk factor 
associated with the project. Depending on this risk assessment, each 
project will be levied a credit subsidy cost and other fees that will 
determine the ultimate cost to the project sponsors.
                          credit subsidy model
    Question. Mr. Frantz, I understand that the Department has been 
working to perfect its credit subsidy model, which is the risk 
calculation of each loan. Getting this model correct is important as it 
sets the level of payment each borrower is required to pay under the 
EPACT title 17 loan program and will have an impact on the scoring of 
our bill by the Congressional Budget Office. What is the status of the 
credit subsidy model and how confident are you that this will provide 
an accurate risk analysis of each loan to ensure taxpayers are not on 
the hook for bad technology loans? What other agencies have reviewed 
this model for accuracy?
    Answer. The Department has been working for several months to 
develop the credit subsidy cost model and is confident that once 
completed it will allow the Department to accurately calculate the 
subsidy costs of title XVII loan guarantees. It will not be made 
publicly available. The Office of Management and Budget must review and 
approve credit subsidy cost estimates. We expect it to be completed in 
the near future.
                   staffing of loan guarantee office
    Question. Mr. Frantz, in your testimony you state that you have 16 
people on your staff to execute the $40 billion loan guarantee program. 
This sounds like an immense challenge. Can you explain how this 
compares to similar loan guarantee programs at other Federal agencies?
    Answer. There are presently 16 members of the staff which is an 
adequate number to prosecute the 16 successful applicants under the 
2006 solicitation representing an allocation in excess of $4 billion. 
This staff is also adequate to initiate the proposed solicitations for 
fiscal year 2008 which is presently planned for $38.5 billion. This 
staff is presently inadequate to prosecute the results of the fiscal 
year 2008 solicitation. The Loan Guarantee Program Office (LGPO) has 
requested in its fiscal year 2009 administrative budget $19.9 million 
with a planned staff of 35 full-time employees (FTEs), augmented by 
independent contractors as necessary to handle the workload associated 
with the fiscal year 2008 solicitations. The organizational plan of the 
LGPO is based upon years of experience by the existing LGPO staff at 
the Overseas Private Investment Corporation.
                       current investment climate
    Question. Mr. Frantz and Mr. Karsner, the clean energy technologies 
being developed by the Department can only be effective if they are 
commercially deployed. Can you please describe the financial 
environment for renewable energy technologies and the financial 
barriers facing these technologies? How has the credit crisis impacted 
investment in these sectors?
    Answer. The two principal goals of the title XVII Loan Guarantee 
Program are to encourage commercial use in the United States of new or 
significantly improved energy related technologies and to achieve 
substantial environmental benefits, with a reasonable certainty of 
repayment. In general, debt capital, a key component of an optimally 
financed project and the kind of financing the loan guarantee program 
encourages, flows to what is perceived to be the least risky 
investment. While many renewable energy projects can represent both a 
sound investment to investors and a benefit to the public through 
environmental benefits, debt financing will often instead flow to 
projects in industries that have a long and established history of low 
risk. The credit crisis only magnifies the barriers to financing of 
advanced renewable energy projects, both making capital less available 
for all project finance deals, but also encouraging the flight of 
capital to established industries and technologies and away from the 
type of projects supported by the Department's Loan Guarantee Program.

                          SUBCOMMITTEE RECESS

    Senator Dorgan. This hearing is recessed.
    [Whereupon, at 11:21 a.m., Wednesday, April 2, the subcom
mittee was recessed, to reconvene subject to the call of the 
Chair.]


    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2009

                              ----------                              


                        WEDNESDAY, APRIL 9, 2008

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:33 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Byron L. Dorgan (chairman) 
presiding.
    Present: Senators Dorgan, Murray, Domenici, Bennett, and 
Craig.

                          DEPARTMENT OF ENERGY

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

              OPENING STATEMENT OF SENATOR BYRON L. DORGAN

    Senator Dorgan. Calling the hearing to order. This is the 
Senate Appropriations Subcommittee on Energy and Water 
Development. The hearing today is an oversight hearing on the 
fiscal year 2009 budget request for the Office of Environmental 
Management and the Office of Civilian Radioactive Waste 
Management.
    We're here to take testimony from the two program offices 
that I just indicated. One is the Government's clean up of the 
cold war legacy and the other is the ultimate disposal of 
nuclear waste. This year's budget request of $5.5 billion for 
the Environmental Management Program represents the fourth 
straight year that President Bush has reduced the clean up 
budget and the strain is showing.
    The fiscal year 2009 request is down $167 million from 
fiscal year 2008. And that's down $1.75 billion from 2005. It's 
no coincidence that at the same time the White House has cut 
this budget, the U.S. Government's third largest liability, the 
environmental clean up liability has grown by 25 percent to 
$342 billion.
    Mr. Rispoli has indicated that this program will not and 
cannot meet the legally mandated clean up milestones because 
there's not enough money. We've learned that EM will miss 23 
legal milestones and lay off, we believe, upwards of 600 people 
solely because of a lack of funding. In his statement before 
the House Energy and Water Subcommittee last month, Mr. Rispoli 
estimated that the EM program may need $900 million more to 
meet all of its requirements in 2009.
    In spite of the shortfall in this particular area, the 
Department of Energy has submitted a budget to the Congress 
that is $1.1 billion higher than in 2008. The Office of Science 
has proposed an increase of $750 million. National Nuclear 
Security Administration increase of almost $300 million. Even 
Mr. Sproat's office has an increase of over $100 million in 
2009. I might also say that with respect to water funding, the 
Bureau of Reclamation and the Corps of Engineers, the President 
requests a $1 billion cut in funding in this year.
    The legal requirement of mandating the clean up is 
something that we ought not take lightly. It seems to me, with 
its budget recommendations, the Department shrugs its shoulders 
and wrings its hands and talks about hard decisions. But 
frankly, I don't think it is the right decision to decide that 
we're not going to meet our mandated requirements on clean up.
    The legal milestones that are mentioned in the 2009 budget 
for Mr. Rispoli, are milestones that were negotiated long ago. 
And they are subject to some technical problems that make some 
of them unachievable. But that's true for some. It is not true 
for all the requirements. The fact is the administration is not 
asking for the funding to meet 23 milestones that are perfectly 
achievable in 2009, milestones for which we have made a 
commitment.
    I wanted to point out that with this clean up budget work 
on contaminated soil and ground water around the EM complex 
will not be dealt with for decades to come. Meanwhile the EM 
will literally spend millions of dollars propping up old 
buildings hoping that they will stay up long enough to be torn 
down safely. That seems Byzantine to me.
    If anyone thinks that the under funding of the EM is the 
right decision I would point out that the EM is becoming the 
choke point on modernizing both the National Nuclear Security 
Administration's and the Office of Science's complexes. Both 
organizations have announced, for example, ambitious plans to 
bring about technological capability into the 21st century at 
Oak Ridge, Tennessee. Yet both programs are being stymied 
because Environmental Management doesn't have in its base line 
the $5 billion needed to tear down and clean up Oak Ridge by 
2015.
    Mr. Rispoli, I want to recognize your hard work over the 
last 3 years in trying to get the cost and scope and schedule 
of 80 clean up projects under control. I think that's been good 
work. And I want to recognize that.
    But I must say that I'm very disappointed that that work 
has not been rewarded by the Office of Management and Budget 
and the White House. In the budget that you and I know, in the 
Appropriations request, you and I know, is far short of what 
you need to do your job. For all of your effort, the 
administration and the Office of Management and Budget have 
sent us recommendations to cut your budget by $1.75 billion 
over the last 4 years even as the responsibilities and the 
commitments have grown.
    Today we'll hear from Mr. Sproat on the status and the 
progress of the Yucca Mountain disposal site. His request for 
$495 billion is $108 million above the 2008 appropriation. Mr. 
Sproat and his organization have a lot of work ahead of them. 
They have a legal mandate to attempt to develop a disposal site 
for both civilian reactor fuel and defense nuclear waste.
    Mr. Sproat, I know you recognize your program has a lot of 
challenges and some problems to overcome before it can claim 
victory. My understanding is that the first is getting your 
license application to the Nuclear Regulatory Commission. I 
understand you intend to submit that in just a few months, 
perhaps no later than June 30, of this year. But that will, I'm 
sure, be scrutinized and challenged by many who hold the 
position that Yucca Mountain is not the right solution for our 
Nation's nuclear waste program.
    I want to thank both of you for coming today. These are 
complicated programs, and important programs that Congress has 
to think through carefully. The White House and the Budget 
Office have given us their evaluation, and now it is our turn 
to evaluate. We appreciate the work that both of you do, and we 
appreciate both of you being here today. Senator Domenici.

             OPENING STATEMENT OF SENATOR PETE V. DOMENICI

    Senator Domenici. Thank you very much, Mr. Chairman. And 
thanks to our two witnesses.
    Mr. Rispoli, you have the difficult job of cleaning up the 
contaminated sites and disposing the nuclear waste throughout 
the complex. This budget, however, is not up to the task. It 
simply provides insufficient resources to do the job.
    In fact this budget request is one of the lowest I've seen 
during my tenure as chairman or ranking member. More than a 
decade is the amount of time that I have spent watching these 
budgets. And never have I seen one that misses the mark so 
much. Well below 2005-2006 when the Congress provided an excess 
of $7 billion for environmental clean up efforts.
    And when those budgets were in that ballpark, your 
Department was doing excellent work at re-prioritizing and 
doing some exciting things. Included in that was the closure of 
Rocky Flats, a rather important and outstanding achievement. 
But you're not going to have outstanding achievements with 
budgets as small as this one.
    As a result of these low funding levels it appears that the 
Department is resorting to creativity to cover its shortfalls. 
I have begun to hear about ``acceleration'' strategy, similar 
to those of your predecessors. You promised immense savings by 
accelerating clean ups in order to dramatically shorten the 
overall clean up schedule.
    I understand that things like this must be tried. And I 
welcome an opportunity to hear from you how you intend to do 
that. I'm still waiting to see the savings on the closure of 
Rocky Flats materialize in investments in plutonium missions at 
Los Alamos.
    While I don't believe there is any substitute for providing 
adequate funding for major clean up sites. I can't blame you 
for trying to find ways to prioritize clean up based on risk. 
If we would have done that from the beginning and stuck with 
it, we'd be much further along than we are now. But it's very 
difficult to change horses in midstream, especially not to have 
the money for ordered clean ups, court ordered agreements.
    I'll just take a minute on New Mexico because you will hear 
much about this unless we're able to find some money. Your 
budget again fails to provide adequate funding to my State for 
milestones negotiated between the DOE and State of New Mexico. 
You're aware of that.
    Each year the gap grows. And I have to do everything within 
my power, seek the help of the chairman to try to find the 
shortfall. This year I'm not confident that we will be able to 
find $100 million needed to clean up, in compliance with the 
agreement you negotiated with New Mexico. I hope you can tell 
me something to the contrary on the witness stand.
    Now let's talk a minute about nuclear waste with you. 
You've done a great job. You're a very enthusiastic leader and 
that's what we needed. Sandia took a very big job when they 
agreed to use their personnel and their expertise to try and 
get you a document that could be filed for a license.
    With regard to Yucca Mountain. Everybody knows that I 
strongly favor nuclear power and expanding its use as an 
emissions free source of load generation. However, I believe 
the current strategy limiting our policy option to a permanent 
repository for the disposal of spent fuel is deeply flawed. I 
believe this path will prove to be the highest cost solution. 
And it fails to take advantage of recycling, which would 
maximize our energy resources and minimize our waste 
requirements.
    Nobody in the world is putting spent fuel rods underground 
as a way of getting rid of waste. Nobody is even planning to 
take spent fuel rods and putting them in a repository for any 
long period of time as a means of disposing of waste. Why? 
Because spent fuel rods are loaded with energy.
    Only 3 percent of the energy has been used and 97 remains. 
And that's foolhardy to build a plan as we have if it would 
have even worked, if we would have gotten it through the 
Congress. To put spent fuel rods away has almost reached a 
point where it's unfathomable.
    I would like to say to the chairman and for this record 
that we have to pursue a comprehensive policy on waste. And I 
will be introducing legislation, Mr. Chairman. I will show it 
to you and share it with you, which will provide our country 
with an alternative pathway to address commercial spent fuel 
and not letting our policy to Yucca Mountain, Yucca only 
approach.
    My legislation will authorize a portion of the nuclear 
waste fund to support the development of spent fuel storage and 
reprocessing facilities. Some of these funds would be used by 
DOE to renegotiate spent fuel storage agreements with local 
communities to store and recycle spent fuel to utilize untapped 
energy and to minimize the waste volumes. I will also propose 
the Government be a full partner and sharing in the cost of 
developing the model licenses for commercial reprocessing 
facilities. Such model approaches would apply to existing as 
well as any more advanced recycling approaches. Should these 
facilities become available, DOE should be authorized to enter 
into long-term service contracts with private entities like to 
construct and operate reprocessing facilities.
    Mr. Sproat, I know that you have worked hard to manage 
Yucca. And the people at Los Alamos who work with you deserve 
every credit for taking something that was more gone than 
breathing life into it. The question now is, is it adequate for 
our country, or not. Should we proceed with it, or not?
    And I have just stated as best I could in a minute and a 
half what I think we should do. And obviously I will be ready 
with a full bill soon. Thank you very much, Mr. Chairman.
    Senator Dorgan. Senator Bennett?

                 STATEMENT OF SENATOR ROBERT F. BENNETT

    Senator Bennett. Thank you, Mr. Chairman. Assistant 
Secretary Rispoli and Director Sproat, I appreciate your taking 
the time to come before the committee. I come in listening to 
Senator Domenici talk about clean up.
    It will come as no surprise to you that I want to talk 
about clean up. Once again the project in Utah to renew uranium 
meltings from Moab and I know your staff is doing the best you 
can to keep us up to date on this. I simply want to make a few 
observations on this so that no one thinks that I've forgotten 
about it or that we've lost track of it.
    I'm pleased that you recently amended the record of 
decision to include trucking as a way of moving this material. 
It creates some problems in the State of Utah. But we will 
resolve those problems, primarily the need to have a bigger 
road.
    We will respond to that. It gives us additional flexibility 
than the pure railroad solution of how to move the tailings. 
And I'm glad to see us go down that road.
    Now as you remember I strongly objected to the Department's 
timeline of 2028 as the date for completing this project. And 
with the support of this subcommittee and the Defense 
subcommittee, we directed the Department to finish the project 
by 2019. I simply want to make it clear, again, that this is 
not a wish. This is a Congressional mandate and the Congress 
has spoken. And 2019 is the date.
    Now as part of the mandate the Appropriations Committee 
gave you 180 days from the date the President signed the bill 
to prepare a report on the funding requirements you will need 
to meet the date of 2019. And I assume that you're anxiously 
working on that report. And I look forward to receiving it 
sometime this summer when it's finished.
    Now this project started out with a cost of $80 million 
when I first came to the Senate and it first came to my 
attention. The current price tag attached to it is $800 
million. So it's gone up. It's a neat symmetry. It's gone up 10 
times in 10 years.
    Now I hope we don't have that same kind of acceleration. 
But I do think we probably will see some additional 
acceleration and we need to know in advance as much as we can 
know. We need to have accurate figures as quickly as we can get 
them so that we can appropriate accordingly.
    So, I look forward to working with you on the project. And 
want to be as helpful as I can. I appreciate the efforts that 
you have put into that. And with that parochial opening 
statement, Mr. Chairman, I have nothing further.
    Senator Dorgan. Senator Bennett, thank you very much. We 
will hear now from the Honorable James Rispoli. Mr. Rispoli, 
you may proceed. Your entire statements for both of you will be 
part of the permanent record. And we would ask that you 
summarize.

                   STATEMENT OF HON. JAMES A. RISPOLI

    Mr. Rispoli. Thank you, Mr. Chairman. Good morning, Mr. 
Chairman, Senator Domenici, Senator Bennett, members of the 
subcommittee. I also understand that a group of students from 
Jamestown in the State of North Dakota is here with us today. 
And I just thought I would mention that and welcome them. This 
is a great opportunity, I think, for these students to see a 
part of the appropriations process that's absolutely vital.
    Senator Bennett. Could you speak up a little, Mr. Rispoli?
    Mr. Rispoli. I think it's important to----
    Senator Bennett. That's better.
    Mr. Rispoli [continuing]. For this group of students from 
Jamestown, North Dakota to be here today because they get to 
see a part of the appropriations process that is so vital to 
the way our Government operates. So I welcome the students from 
Jamestown.
    Senator Dorgan. Mr. Rispoli, I did not know that they were 
in the room. But let me ask those from Jamestown to stand up 
and wave at us.
    They are all experts on the issue of waste disposal, and 
environmental management. They must be, I think you're with the 
Close Up groups. So we welcome you here.
    I know I'm meeting with a Close Up group later today. So 
that must be the group. We welcome all of them here.
    Mr. Rispoli, thank you.
    Mr. Rispoli. Well I would be remiss then, Mr. Chairman, by 
not pointing out that our budget person, Cindy Rheaume here is 
also from the great State of North Dakota.
    Senator Dorgan. Well, Cindy, welcome. Would you like to 
testify for a while?
    Mr. Rispoli. So clearly the State of North Dakota is well 
represented in the room today. I'm pleased to be here and would 
like to note this year marks the 20th year since the EM program 
was first established. Clearly a lot has been accomplished and 
a lot more needs to be done.
    When I first appeared before this subcommittee 2 years ago, 
I pledged that safety would remain our first priority. I've 
stated that no milestone is ever worth an injury to our 
workforce. Today I'm pleased to report that worker injuries 
have been reduced by 50 percent during the past 3 years and 
that our injury rate is less than 10 percent of that in the 
commercial waste disposal and construction industries. I think 
that's very, very notable for the people that are doing the 
work for all of us and for our country.
    Also, after I was sworn into this position, I set about to 
refine all of our cost and schedule baselines which guide every 
project. During the past 18 months, all, that is all, EM 
projects, both line item and clean up have undergone 
independent audits to verify their costs and schedules as valid 
and reasonable. Today our project estimates and assumptions for 
the entire EM portfolio, I believe can be viewed with far 
greater confidence than ever before.
    At that time I also stated that our goal was for the cost 
and schedule performance of at least 90 percent of our projects 
to be on target or better than on target. In July 2005, 17 of 
our projects were not on cost or on schedule. That is only 51 
percent of all projects at that time were on target.
    Today our portfolio, which currently numbers more than 65 
projects, consistently meets that 90 percent goal. And we 
actually track this regularly. We are up near 100 percent on 
cost, on schedule with the entire portfolio, which I think is a 
notable accomplishment for all the people that work in this 
program.
    Turning now to our fiscal 2009 budget request, our request 
is for $5.53 billion. And it continues to be based on the 
principle of prioritizing risk reduction across the entire 
complex.
    Let me address an issue that I know has caused concern to 
several Members of Congress and that is that this request has 
broken with past understandings related to the Department's 
clean up budget strategy. I would like to quote part of 
testimony from my predecessor, Assistant Secretary Jessie 
Roberson before this subcommittee in 2003 and 2004. She 
testified that after a period of accelerated funding peaking in 
fiscal year 2005 and here I quote, ``we anticipate funding will 
then decline significantly to about $5 billion in 2008.'' 
Viewed from this perspective and with that quote in mind, our 
fiscal 2009 budget is about a half billion dollars more than 
what she projected 5 years ago.
    The administration recognizes that with the budget before 
you as you all have noted, some of the milestones contained in 
our clean up agreements are in jeopardy of being missed. It's 
important to note that other milestones are in jeopardy due to 
technical reasons regardless of funding. As a result we had to 
make very careful decisions regarding our priorities. The 
regulatory agreements that guide our work have been and remain 
important measures of progress. The Department's strategies 
continue to focus on clean up that will produce the greatest 
environmental and safety benefit and the largest amount of risk 
reduction.
    I would like to just take a minute to share. I believe you 
all have photographs before you, but just share a couple of 
those with you. The first photograph is actually from Senator 
Domenici's home State. It's the underground of the Waste 
Isolation Pilot Plant. And it's, I think, a very good photo of 
the remote-handled waste placement machine that places the 
remote-handled waste into the horizontal bore holes in the 
walls.




    The second photograph is the 300 Area of Hanford. And this 
photograph shows by the ``X's'' through the buildings in the 
photograph how many of the buildings have actually been taken 
down. It's an amazing accomplishment. A total of 140 structures 
have been safely removed just in this area alone.




    The third photograph is a photograph of the Energy 
Technology Engineering Center in California. And this is 
another example of a before and after shot that shows that more 
than 250 buildings have been taken down in that location.




    The fourth slide is before and after at Paducah, Kentucky 
that shows a huge metal waste pile. A blight on the entire area 
that has been totally removed. Enough metal equal to the 
displacement of a World War II battleship.




    And the last slide is of DOE contractors of Idaho removing 
transuranic waste under a structure, while the structure 
provides the safety so that this waste does not become airborne 
and then migrate off the site.




    Mr. Chairman, I'm proud of the progress our 34,000 
contractors and Federal employees have made in recent years. 
And the wise and secure foundation we have built for the 
future. This subcommittee has provided the critical guidance 
that has enabled us to accomplish the successes we've had to 
date.

                           PREPARED STATEMENT

    I look forward to working with you in my remaining time at 
the Department. And I thank you for supporting our efforts to 
reduce risk to our citizens, our communities and our Nation. 
Thank you and I'm happy to answer your questions.
    [The statement follows:]
              Prepared Statement of Hon. James A. Rispoli
    Good morning Mr. Chairman, Senator Domenici, and members of the 
subcommittee. I am pleased to be here today to answer your questions on 
the President's fiscal year 2009 budget request for the Department of 
Energy's Office of Environmental Management (EM). I want to thank the 
subcommittee for your support of the EM program.
    The year 2009 will mark 20 years since the EM program was first 
established just as the cold war was coming to an end. While the budget 
we are considering today is oriented toward the future, I think it is 
appropriate to begin today by considering how much this program has 
accomplished since its creation.
    At that time, nearly 50 years of nuclear weapons production and 
energy research had left a legacy of enormous amounts of waste and 
environmental contamination at more than 100 sites across the country. 
The extent of the risk to our citizens and communities was literally 
unknown, and certainly many of the processes and technologies to reduce 
that risk had not yet been invented.
    Since then, we have closed 86 of 108 sites nationwide. The national 
``footprint'' of the Department's nuclear complex and its accompanying 
risks has been drastically reduced, and eliminated altogether from many 
States. We have packaged and safely stored all of the Nation's excess 
plutonium inventory. We have pioneered new technologies that have 
allowed us to make progress retrieving millions of gallons of tank 
waste, and to safely dispose tens of thousands of cubic meters of 
transuranic waste. In fiscal year 2006 and fiscal year 2007 alone, we 
demolished approximately 500 buildings (nuclear, radioactive, and 
industrial) as part of our decontamination and decommissioning (D&D) 
projects. And finally, we have made great strides in protecting 
groundwater using innovative treatment systems.
    Today marks likely the final time that I will be testifying before 
you regarding our program's budget request. When I first assumed the 
position of Assistant Secretary for Environmental Management in August 
2005, I set out to institute a rigorous project management system, and, 
above all, to continue to emphasize safety and risk reduction. I sought 
to refine and independently verify our project baselines--the estimates 
of scope, schedule and cost that guide every project--to ensure that 
they are realistic and executable. I will discuss our successes in this 
area as well as our ongoing challenges.
    The fiscal year 2009 budget request is once again built on the 
principle of prioritizing risk reduction across the entire complex for 
which EM is responsible, supported by our four guiding tenets of 
safety, performance, cleanup and closure. The budget request totals 
$5.528 billion, a decrease of $167 million from the fiscal year 2008 
appropriation. With 90 percent of our budget addressing mission 
activities at our cleanup sites, more than half of fiscal year 2009 
funding will go towards our highest-risk activities of stabilizing tank 
waste, nuclear materials and spent nuclear fuel; another one-quarter of 
the budget will be devoted to cleaning up contaminated soil, 
groundwater, and excess facilities, and about 14 percent going to 
manage wastes streams related to those cleanup activities. The 
remaining 10 percent covers mission activity support, including costs 
for program oversight provided by our Federal personnel, and technology 
development.
    Mr. Chairman, let me point out that the administration recognizes 
that EM's fiscal year 2009 budget request of $5.528 billion is based 
on, and would implement, an environmental management approach under 
which the Department would not meet some of the milestones and 
obligations contained in the environmental agreements that have been 
negotiated over many years. It is also important to recognize that some 
upcoming milestones will be missed regardless of the approach that is 
chosen and its associated level of funding.
    Moreover, some of the relevant agreements were negotiated many 
years ago, with incomplete knowledge by any of the parties of the 
technical complexity and magnitude of costs that would be involved in 
attempting to meet the requirements. This incomplete knowledge, coupled 
with other issues including contractor performance, overly optimistic 
planning assumptions, and emerging technical barriers, also have 
impeded the Department in meeting all milestones and obligations 
contained in the environmental compliance agreements.
    In planning its environmental cleanup efforts and developing the 
budget for those activities, the Department seeks to focus on work that 
will produce the greatest environmental benefit and the largest amount 
of risk reduction. The Department strongly believes that setting 
priorities and establishing work plans in this way is the most 
effective use of taxpayer funds and will have the greatest benefit, at 
the earliest possible time, to the largest number of people.
    In determining these priorities, the Department works closely with 
the Federal and State regulators, and will seek the cooperation of 
those entities in helping evaluate needs and focus work on the highest 
environmental priorities based on current knowledge, particularly where 
doing so necessitates modification of cleanup milestones embodied in 
prior agreements with the Department.
                        managing our priorities
    When I appeared before this subcommittee 2 years ago, I pledged 
that safety would remain our first priority. All workers deserve to go 
home as healthy as they were when they arrived at the job in the 
morning. No milestone is worth any injury to our workforce. I am 
pleased to say that EM's safety performance continues to be 
outstanding. As a result of collaborative efforts by DOE and our 
contractors, worker injuries have been reduced by 50 percent during the 
past 3 years. Currently EM's injury rate is less than 10 percent of 
comparable commercial waste disposal and construction industries.
    Another priority we discussed 2 years ago was my goal of making EM 
a high-performing organization by every measure. This goal has required 
us to look critically at every aspect of how we plan, procure, execute 
and manage every project under our jurisdiction, and how we align every 
dollar the taxpayers provide to achieving environmental cleanup goals.
    On the subject of our management practices, in September 2005, 
Congress asked NAPA to undertake a management review of EM, including 
an assessment of EM's human capital. NAPA's study, conducted over a 
period of 18 months, was very interactive; we opened our operations to 
NAPA for scrutiny and in turn have embraced and implemented nearly all 
of NAPA's proposals.
    Most of all, we were gratified that NAPA concluded in its final 
report issued this past December that EM, ``is on a solid path to 
becoming a high-performing organization.'' We know we have much 
remaining to be accomplished, but we take NAPA's conclusion as a sign 
that we are, in fact, headed in the right direction with regard to how 
we function as an organization.
    A budget is only as good as its planning basis. Our request is 
developed from our project baselines that define the scope, cost, and 
schedule for each project, and I have much to report to you in this 
area. When I assumed this position, I was concerned that the accepted 
baselines for many of our projects were unrealistic. The reasons for 
this included overly aggressive assumptions in the technical and 
regulatory arenas, increasing costs of materials and simple 
underperformance.
    Since that time, our sites have undergone an independent review to 
verify the reasonableness of the scope, cost, and schedule for each 
project. This review also documented assumptions and associated risk 
management plans that supported baseline development. As a result, all 
near-term baselines up to 5 years have now been independently reviewed 
and verified, while long-term cost ranges have been determined to be 
reasonable. As we move forward in the fiscal year 2009 budget process, 
I believe that the subcommittee can view near-term cost assumptions 
associated with our projects with greater confidence than ever before.
    The majority of EM sites do, in fact, include baselines with 
completion dates beyond 2013. Through a collaborative process with our 
field sites, EM is seeking to define aggressive but achievable 
strategies for accelerating cleanup of distinct sites or segments of 
work that involve multiple sites. Moreover, it is important to note 
that EM's site cleanup activities are managed as one integrated 
national program; the work and risks associated with each site are 
inherently interrelated with that at other sites. Thus, we continue to 
evaluate and implement cross-site risk priorities and cleanup 
activities.
    In 2005, we set out to integrate proven project management tools 
into our business processes, and address our shortcomings in project 
management by using DOE and industry-standard business management 
tools. I stated to you in 2006 that our goal was for at least 90 
percent of our projectized portfolio to perform on-target, or better 
than on-target regarding cost and schedule. I am pleased to report that 
we now consistently meet that goal--in excess of 90 percent of our 
portfolio, currently numbering more than 65 independently audited 
projects, consistently performs within cost and schedule targets.
    As an ``acquisition'' organization, EM accomplishes its mission 
through procurement and execution of our projects. Since the contract 
serves as the principal agreement governing how a project is executed 
between DOE and the contractor, contract and project management must be 
seamlessly managed in parallel. To oversee this process, about 18 
months ago, we implemented an organizational structure, including the 
creation of a Deputy Assistant Secretary for Acquisition and Project 
Management. This position integrates the two functions of procurement 
planning and project management, helping us to professionalize the 
procurement process so that we learn from, and improve upon, each 
contract experience. Moreover, it provides us with strong management 
oversight after the contract is awarded. We are striving to make EM 
nothing short of a ``Best-in-Class'' organization for project and 
contract management and engineering and technology.
    The fiscal year 2009 Technology Development and Deployment Program 
will be highly focused and concentrate its investments in EM high 
priority cleanup areas, including radioactive tank waste, soils and 
groundwater remediation, and deactivation and decommissioning excess 
facilities. Best-in-class performers, including other Federal agencies, 
the national laboratories, the university system, and private industry 
will be utilized to conduct the Technology Development and Deployment 
scope.
    The EM program has always required a strong technology component to 
accomplish its mission, one that is focused on developing and deploying 
technologies to enhance safety, effectiveness, and efficiency. As we 
look ahead to our cleanup work, we face the ongoing challenge of 
maturing and integrating technology into first-of-a-kind solutions. An 
Engineering and Technology Roadmap has been developed to address this 
need. The Roadmap identifies the technical risks the EM program faces 
over the next 10 years, and strategies to address the risks. EM's 
validated baselines are a powerful tool that allows EM managers to 
identify the points at which new knowledge and technology can be 
efficiently inserted into EM cleanup projects to address risks.
                      budgeting for our priorities
    Before I discuss the fiscal year 2009 budget request, allow me to 
draw attention to the significant cleanup progress achieved recently. 
We have:
  --Completed stabilization and packaging for all plutonium residues, 
        metals, and oxides and begun consolidation of all of these 
        materials at the Savannah River Site (SRS);
  --Produced for disposition more than 2,500 cans of vitrified high-
        level waste from highly radioactive liquid wastes;
  --Completed retrieval and packaging for disposal of more than 2,100 
        metric tons of spent nuclear fuel from K-basins at Hanford to 
        protect the Columbia River;
  --Shipped more than 50,000 cubic meters of transuranic (TRU) waste 
        from numerous sites to the Waste Isolation Pilot Plant (WIPP) 
        for permanent disposal, including 25,000 out of a planned 
        30,000 drums from SRS;
  --Disposed of nearly one million cubic meters of legacy low-level 
        waste and mixed low-level waste;
  --Eliminated 11 of 13 high-risk material access areas through 
        material consolidation and cleanup;
  --Cleaned up the Melton Valley area at the Oak Ridge Reservation and 
        continued decontamination and decommissioning of three gaseous 
        diffusion buildings at Oak Ridge; and
  --Disposed of more than 8,500 tons of scrap metal from Portsmouth.
    The program has made significant progress in shifting focus from 
risk management to risk reduction. This focus on measurable risk 
reduction continues to be the guiding principle behind the development 
of our fiscal year 2009 budget request.
    To strike the balance that allows EM to continue achieve risk 
reduction and pursue cleanup goals, we propose funding the following 
risk reduction and regulatory activities in priority order:
  --Stabilizing radioactive tank waste in preparation for treatment 
        (about 32 percent of the fiscal year 2009 request);
  --Storing, stabilizing, and safeguarding nuclear materials and spent 
        nuclear fuel (about 18 percent of the fiscal year 2009 
        request);
  --Disposing of transuranic, low-level, and other solid wastes (about 
        14 percent of the fiscal year 2009 request); and
  --Remediating major areas of EM sites, and decontaminating and 
        decommissioning facilities (about 26 percent of the fiscal year 
        2009 request).
                    fiscal year 2009 budget request
    The Department's fiscal year 2009 budget request for the Office of 
Environmental Management is $5.528 billion. The request consists of 
three appropriations, Defense Environmental Cleanup, Non-Defense 
Environmental Cleanup, and the Uranium Enrichment Decontamination and 
Decommissioning Fund.
    For fiscal year 2009, EM's funding priorities to best address our 
environmental cleanup challenges are:
  --Conducting cleanup with a ``Safety First'' culture that integrates 
        environment, safety and health requirements, and controls into 
        all work activities to ensure protection to the worker, public, 
        and the environment;
  --Establishing a disposition capability for radioactive liquid tank 
        waste and spent nuclear fuel;
  --Securing and storing nuclear material in a stable, safe 
        configuration in secure locations to protect national security;
  --Transporting and disposing of transuranic and low-level wastes in a 
        safe and cost-effective manner to reduce risk;
  --Remediating soil and groundwater in a manner that will assure long-
        term environmental and public protection; and
  --Decontaminating and decommissioning facilities that provide no 
        further value to reduce long-term liabilities while remediating 
        the surrounding environment.
    Examples of milestones and planned activities for fiscal year 2009 
by site-specific categories are:
Idaho
  --Meet requirements in the Idaho Settlement Agreement to ship stored 
        contact-handled and remote-handled transuranic (TRU) waste to 
        the Waste Isolation Pilot Plant (WIPP).
    The Idaho National Laboratory will continue characterizing, 
treating, packaging, and transporting of contact-handled and remote-
handled TRU waste to WIPP.
  --Continue construction of the sodium-bearing waste treatment 
        facility to support tank waste retrievals.
    The overall objectives of this project are to treat and dispose of 
sodium-bearing tank wastes, close the tank farms tanks, and perform 
initial tank soil remediation work. Construction and operation of the 
sodium-bearing waste treatment 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.
  --Complete the transfer of all EM-managed spent nuclear fuel to dry 
        storage.
    EM will continue to promote the safe and secure receipt and dry 
storage of spent fuel to protect the Snake River Plain Aquifer.
Los Alamos National Laboratory
  --Promote soil and water remediation.
    The Los Alamos National Laboratory (LANL) Soil and Water 
Remediation Project scope includes identification, investigation, and 
remediation of chemical and or radiological contamination attributable 
to past Laboratory operations and practices. In order to support the 
project scope, in fiscal year 2009 EM plans to: complete required 
groundwater monitoring within eight watersheds, install four regional 
aquifer monitoring wells, complete four soil cleanups, including 
Material Disposal Area R in Technical Area-16, and continue remediation 
of tanks at the Material Disposal Area A in Technical Area-21.
  --Continue TRU waste shipments to WIPP.
    The Solid Waste Stabilization and Disposition Project includes the 
treatment, storage, and disposal of legacy TRU and mixed low-level 
waste generated between 1970 and 1999 at LANL. The end-state of this 
project is the safe disposal of legacy waste from LANL. In fiscal year 
2009, EM plans to continue characterization and certification of TRU 
waste for shipment to WIPP and continue services and safety-related 
activities to maintain the waste inventories in a safe configuration 
and within allowable Material-at-Risk limits established for the site.
Moab
  --Complete necessary transportation upgrades and tailings handling 
        infrastructure and initiate movement of uranium tailings off 
        the Moab site.
    The relocation of the mill tailings at the Moab site to a 
Department of Energy constructed disposal facility near Crescent 
Junction, Utah, is necessary. In fiscal year 2009, EM plans to complete 
the rail upgrades between Moab and Crescent Junction and begin 
transporting tailings to Crescent Junction from Moab. Moreover, the 
Record of Decision has been amended to allow the tailings to be 
transported by either truck or rail. In addition, EM will continue 
disposal cell excavation at Crescent Junction.
Oak Ridge
  --Continue decontamination and decommissioning (D&D) of K-25 Process 
        Building.
    The gaseous diffusion plant comprises one of the largest complex of 
buildings in the world. In fiscal year 2009, EM will continue to vent, 
purge, and drain, characterize, remove of high risk equipment and carry 
out required foaming activities for the east and north wings of the K-
25 process building. Demolition of the west wing of the K-25 process 
building will be conducted.
  --Complete final design for the Uranium-233(U-233) down-blending 
        project and begin Building 3019 modifications.
    The U-233 inventory in Building 3019 will be down-blended as 
expeditiously as possible to reduce the substantial annual costs 
associated with safeguards and security requirements and to address 
nuclear criticality concerns raised by the Defense Nuclear Facilities 
Safety Board (DNFSB).
  --Process and ship contact-handled and remote-handled TRU waste to 
        WIPP.
    Approximately 300 cubic meters of contact-handled TRU debris and 
100 cubic meters of remote-handled TRU debris will be processed for 
disposal at WIPP.
  --Decontaminate and decommission (D&D) the Y-12 National Security 
        Complex and Oak Ridge National Laboratory (ORNL).
    Remediation of the Corehole 8 plume at ORNL and of mercury 
contamination at Y-12 will be performed. The on-site disposal cell for 
receipt of D&D debris and cleanup waste will be expanded.
Paducah
  --Initiate operations of the Depleted Uranium Hexafluoride 
        (DUF6) Conversion Facility.
    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 or reused, the hydrogen fluoride 
by-products will be sold on the commercial market, and the empty 
cylinders will be disposed of or reused.
  --Complete disposition of legacy waste.
    The Paducah Gaseous Diffusion Plant is responsible for some of the 
waste streams that were generated by the United States Enrichment 
Corporation's operation of the Plant. The disposition of this legacy 
waste will reduce risk and storage costs and is critical to 
accelerating site cleanup.
  --Reduce risk through focused cleanup of soil and waste.
    The completion of characterization and disposition of recently 
discovered soil and rubble piles along the river and closure and 
disposition of all DOE Material Storage Areas will also aid in lowering 
the risk to human health and the environment.
Portsmouth
  --Initiate operations of the DUF6 Conversion Facility.
    Similar to Paducah, the DUF6 conversion facility will 
convert depleted uranium hexafluoride into a more stable form, depleted 
uranium oxide, for reuse or disposal. The depleted uranium oxide will 
be sent to a disposal facility or reused, the hydrogen fluoride by-
products will be sold on the commercial market, and the empty cylinders 
will be disposed of or reused.
  --Complete cold shutdown activities in the former gaseous diffusion 
        operations facilities and award the D&D contract.
    The transition of the Gaseous Diffusion Plant from cold shutdown to 
decontamination and decommissioning will continue. In addition, 
Portsmouth plans to complete X-701B oxidation injection system 
groundwater field treatment activities.
Richland
  --Complete shipping of special nuclear materials from the Plutonium 
        Finishing Plant (PFP).
    The PFP complex consists of several buildings that were used for 
defense production of plutonium nitrates, oxides and metal from 1950 
through early 1989. As part of the PFP cleanup, Richland's goal is to 
complete shipments of special nuclear materials off-site to the 
Savannah River Site and procure additional casks to support completion 
of the shipping campaign by the end of fiscal year 2009.
  --Enhance groundwater remediation at the Central Plateau and along 
        the Columbia River.
    Over 50 years of weapons production at the Hanford site has left 
the groundwater contaminated by carbon tetrachloride, chromium, 
technetium 99, strontium, and uranium. EM is dedicated to protecting 
the groundwater resources at Hanford as well as the Columbia River, 
through deployment of innovative technologies in fiscal year 2009 to 
address all of the contaminants in the vadose zone and groundwater, 
with supporting investigations such as installation of new wells for 
monitoring and characterization, and geophysical logging to provide 
additional subsurface information on contaminant distribution.
  --Cleanup of waste sites and facilities along the Columbia River 
        Corridor including K-East Basin D&D.
    The K Basins project is a high priority risk reduction activity due 
to its close proximity to the Columbia River. To date, we have 
completed the removal, packaging, and transportation of approximately 
2,100 metric tons of degrading spent nuclear fuel, removal of an 
estimated 44 cubic meters of radioactively contaminated sludge, and the 
basin water is now being pumped out. In fiscal year 2009, the K-East 
basin will be completely demolished. The end-state of the K Basins 
cleanup will mean the removal of more than 55 million curies of 
radioactivity from near the Columbia River.
  --Retrieve suspect contact-handled and remote-handled TRU waste from 
        burial grounds and continue to ship to WIPP.
    The Hanford Site contains thousands of containers of suspect 
contact-handled and remote-handled TRU waste, low-level waste, and 
mixed low-level waste. Activities planned in fiscal year 2009 are to 
retrieve 1,100 cubic meters of suspect contact-handled and remote-
handled TRU waste from the low-level burial grounds, continue 
certification of transuranic waste, and dispose of on-site generated 
low-level and mixed low-level wastes at the mixed waste disposal 
trenches.
River Protection
  --Manage the tank farms in a safe and compliant manner until closure.
    The radioactive waste stored in the Hanford tanks was produced as 
part of the Nation's defense program and has been accumulating since 
1944. To protect the Columbia River, the waste must be removed and 
processed to a form suitable for disposal and the tanks must be 
stabilized. To reach these goals, EM plans to enhance the Single-Shell 
Tank Integrity Program, continue to develop retrieval technologies and 
retrieve waste from approximately one tank per year, and continue to 
evaluate supplemental treatment technology, and interim pre-treatment 
capabilities.
  --Advance in Waste Treatment and Immobilization Plant construction.
    The Waste Treatment and Immobilization Plant (WTP) is critical to 
the completion of the Hanford tank waste program by providing the 
primary treatment capability to immobilize 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 2009, EM plans to continue construction of 
all of these facilities to achieve approximately 55 percent completion, 
while maintaining the viability of other supplemental treatment 
options. The end-state of this project will be the completion of the 
WTP hot commissioning and transfer of the facilities to an operations 
contractor to run the plant.
Savannah River
  --Continue consolidation and disposition of special nuclear 
        materials.
    The receipt, storage, and disposition of materials at the Savannah 
River Site allows for de-inventory and shutdown of other DOE complex 
sites, providing substantial risk reduction and significant mortgage 
reduction savings to the Department. In fiscal year 2009, the Savannah 
River Site will complete the receipt of surplus plutonium from the 
Hanford Site, Los Alamos National Laboratory, and Lawrence Livermore 
National Laboratory. Also in fiscal year 2009, EM plans to operate H-
Canyon/HB-Line to disposition special nuclear materials and begin 
processing of Savannah River Site's spent nuclear fuel in H-Canyon.
  --Reduce radioactive liquid waste.
    The mission of the tank waste program at Savannah River is to 
safely and efficiently treat, stabilize, and dispose of approximately 
37 million gallons of legacy radioactive waste currently stored in 49 
underground storage tanks. In fiscal year 2009, planned EM activities 
include: continue operation of Actinide Removal Project, Modular 
Caustic-Side Solvent Extraction Unit, and the Defense Waste Processing 
Facility, continue the construction of the Salt Waste Processing 
Facility; and prepare sludge batches in support of continued high-level 
waste vitrification. Activities are planned to free up additional tank 
space, such as treatment of organic waste in the 1.3 million gallon 
Tank 48 to return the tank to useful service.
Waste Isolation Pilot Plant
  --Continue safe shipment, receipt, and disposal of contact-handled 
        and remote-handled TRU waste.
    WIPP in Carlsbad, New Mexico, is the Nation's only mined geologic 
repository for the permanent disposal of defense-generated TRU waste. 
In fiscal year 2009, the budget request supports up to 21 contact-
handled TRU and up to 5 remote-handled TRU shipments per week from 
across the DOE complex.
                               conclusion
    Mr. Chairman, I am proud of the progress the EM program has made in 
recent years, both in terms of meeting the Nation's cleanup priorities, 
and in building the foundation for future efforts. I respectfully 
submit EM's fiscal year 2009 budget request and am pleased to answer 
your questions.

    Senator Dorgan. Mr. Rispoli, thank you very much. Finally 
we will hear from Mr. Sproat. Mr. Sproat, you may proceed.
STATEMENT OF HON. EDWARD F. SPROAT III, DIRECTOR, 
            OFFICE OF CIVILIAN RADIOACTIVE WASTE 
            MANAGEMENT
    Mr. Sproat. Good morning, Senator and good morning, members 
of the committee. And thank you very much for the opportunity 
to come this morning to address you about my office, the Office 
of Civilian Radioactive Waste Management and the President's 
2009 request for the Yucca Mountain program.
    But I'd like to start off with just recapping what I told 
this committee last year at this time in terms of what we 
planned to do in fiscal year 2008 with the President's budget 
request for fiscal year 2008, which was $494.5 million. I told 
the committee at that time that with that money in this fiscal 
year we intended to deliver the license application for Yucca 
Mountain to the Nuclear Regulatory Commission no later than 
June 30, of this year. I also told the committee that we would 
certify the licensing support network the major litigation 
support database that the NRC requires by December 2007. I also 
said that we would complete the supplemental environmental 
impact statement.
    I said we would deliver the report to Congress, that 
Congress requires on a need for a second repository. And I said 
we would revise and issue to file an environmental impact 
statement for the Nevada rail line in fiscal year 2008.
    Now as the committee is very much aware, we ended up 
receiving from Congress $386.1 million or $108 million less 
than the President requested. And we received that at the end 
of the first fiscal quarter, or the first quarter of the fiscal 
year. Obviously it presented significant management challenges 
to my management team.
    However, we have put in place significant improvements in 
the management approaches, management processes for our office. 
And I'm very pleased to be able to report to the committee that 
despite the $108 million reduction in appropriations, we will 
meet or beat all of the deliverables schedules that we told 
this committee that we would provide at this time last year. So 
we are on schedule. And we will deliver a high quality 
docketable license application to the Nuclear Regulatory 
Commission for the repository during the month of June of this 
year.
    Now one of the things I would like to point out to the 
committee is that with that $108 million reduction from the 
President's request in fiscal year 2008, on top of the $100 
million reduction from fiscal year 2007 we are not able to 
maintain the best achievable date for opening a repository of 
March 2017. That date is no longer achievable. And I'll talk a 
little bit in a minute about what we're doing to provide the 
committee a better understanding and a better forecast of when 
a repository could be open and under what conditions.
    So let me turn to our fiscal year 2009 appropriation 
request, which is $494.7 million or essentially a flat request 
compared to the President's request for fiscal year 2008. One 
of the things the committee may not or may be aware when I 
talked to you last year, I talked about, within the context of 
the best achievable date for opening a repository, what the 
cash flows, projected cash flows, were required to do that; to 
open by 2017.
    And that cash flow included a projected budget request of 
$1.2 billion for fiscal year 2009. And as the committee will 
note, we have not requested anywhere near that amount for 
fiscal year 2009. And we have limited our budget request to an 
amount that we need to support the license application review 
and defense in front of the Nuclear Regulatory Commission and 
to maintain certain critical path design activities, but we 
will not be able to maintain all of the critical path 
activities needed to support a 2017 opening date with this 
budget request.
    And the reason that we haven't requested that $1.2 billion 
is that based on our experience and the difficulties that this 
committee is very much aware of in the appropriations process 
that we've gone through in fiscal year 2007 and fiscal year 
2008. We believe it's unrealistic to expect Congress to 
authorize a significant increase in my program's funding that's 
required to open the repository in the shortest possible time. 
Therefore what we are doing is we're rebaselining this program 
in terms of a new set of assumptions that assumes essentially 
flat funding during the license application defense process and 
then ramping up after the Nuclear Regulatory Commission gives 
the Department a construction authorization in 2011 or 2012.
    So, just turning back to fiscal year 2009 with the budget 
request that's in front of you, we intend to defend the license 
application that we'll be submitting to the Nuclear Regulatory 
Commission. We'll begin some detailed design for the repository 
facilities itself. We're going to complete some of the contour 
mapping for the Nevada rail line. And we're going to continue 
with developing the Federal capability to actually oversee 
construction and operation of this repository as well as 
further development of the security and safeguards programs 
needed to run a high level waste repository under the Federal 
Government.
    So, let me just close by addressing the issue of what is it 
going to take to actually be able to build this repository? 
It's very clear that under any scenario of recycling or non-
recycling, we still will need a deep geological repository for 
both the defense level waste and spent nuclear fuel and that 
funding required to build a repository will be at levels 
significantly higher than historical funding levels that this 
program has received in the past.
    And that without a dependable funding source from the 
Nuclear Waste Fund, which was originally intended, it really 
becomes impossible to provide a new firm date to the committee 
as to when the repository could be open. And I'd like to remind 
the committee, based on my discussions with you last year at 
this time, that for each year beyond 2017 that we defer opening 
a repository, it's an additional half a billion dollars of 
potential taxpayer liability associated with the Government's 
non-performance on taking commercial spent nuclear fuel. And 
that our forecast that if we were opening a repository in 2017, 
that liability number was approximately $7 billion and that 
would grow at about $500 million a year beyond that date.

                           PREPARED STATEMENT

    In summary what I'd like to say is that we have made 
substantial progress on this program over the last 2\1/2\, 3 
years. I have a very high confidence level in the management 
team that I'll leave behind after I leave Government service to 
move this program forward. And that it is vitally important to 
this country that under any scenario of either open fuel cycle, 
closed fuel cycle, that we have a deep geologic repository. And 
I would respectfully request this committee to give serious 
consideration to the President's request to fund this program 
at the requested levels for fiscal year 2009.
    Thank you very much. I'd be pleased to answer whatever 
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 2009 
budget request for my office which has the responsibility to design, 
license, construct, and operate the Nation's repository for the 
disposal of spent nuclear fuel and high-level radioactive waste, as 
defined in the Nuclear Waste Policy Act (NWPA) of 1982, as amended.
    When I came to this committee last year, I outlined a number of 
specific deliverables that OCRWM would achieve in fiscal year 2008, 
assuming appropriation of the President's request of $494.5 million, 
including:
  --Submit a License Application for a Construction Authorization for a 
        geologic repository for disposal of spent nuclear fuel and 
        high-level radioactive waste at Yucca Mountain to the Nuclear 
        Regulatory Commission (NRC) by June 30, 2008;
  --Certify DOE's Licensing Support Network collection in accordance 
        with NRC requirements and regulations by December 21, 2007;
  --Complete the Supplemental Environmental Impact Statement (EIS) for 
        a Geologic Repository for the Disposal of Spent Nuclear Fuel 
        and High-Level Radioactive Waste at Yucca Mountain;
  --Perform the analysis and deliver the report to Congress required by 
        the NWPA on the need for a second repository; and
  --Complete the final EIS for a Rail Alignment for the Construction 
        and Operation of a Railroad in Nevada to a Geologic Repository 
        at Yucca Mountain.
    Despite the President's request of $494.5 million, the Congress 
appropriated $386.4 million for OCRWM in fiscal year 2008, a reduction 
of $108.1 million from the President's request. This large reduction, 
which occurred well into the fiscal year, contributed to significant 
management challenges, and following the fiscal year 2007 appropriation 
which was approximately $100 million less than the President's request, 
caused a reduction in force of approximately 900 personnel from the 
program. The cumulative impact of these significant appropriation 
reductions is that DOE is no longer able to maintain the best 
achievable opening date of March 2017 that I presented to the committee 
last year. However, because of significant improvements we have made in 
management practices and processes, we will be able to complete all of 
the deliverables for fiscal year 2008 that I promised the committee 
last year on or near schedule, including the submittal of the License 
Application to the NRC this June.
           fiscal year 2009 budget request and key activities
    The President's fiscal year 2009 budget request for this program is 
$494.7 million. The committee will note that this amount is 
significantly less than the $1.2 billion for fiscal year 2009 that I 
presented to the committee last year as the amount needed to achieve 
the best achievable opening date of March 2017. This fiscal year 2009 
funding request reflects what the administration sees as the realities 
of the effects of the current discretionary spending budget caps on 
this program. Because the funding mechanism established by Congress for 
the program when it established the Nuclear Waste Fund is not currently 
available to offset appropriations for this program, we have limited 
our budget request to an amount that is needed to support the process 
to attain a Construction Authorization from the NRC and to continue 
some of the other critical path activities. We believe that unless 
Congress addresses the funding mechanism issue for this program by 
acting affirmatively on the proposed legislation this administration 
has sent to Congress, it is unrealistic to expect Congress to 
appropriate the significant increases in funding needed to open the 
repository in the shortest possible time (i.e., by 2017). We are 
therefore re-baselining the Program schedule and budget authority cash 
flow projections to reflect what we expect to be flat funding until the 
NRC issues the Construction Authorization. I will provide this revised 
information to the committee when it is completed.
    Fiscal year 2009 will be the first year of a multi-year license 
defense process. Following an acceptance review by the NRC, it is 
anticipated that the NRC will docket the License Application, thus 
beginning the formal licensing phase that is anticipated to last 3 to 4 
years. In fiscal year 2009, our objectives are to:
  --Defend the License Application for the repository before the NRC;
  --Begin detailed design for the facilities required for receipt of 
        spent nuclear fuel and high-level radioactive waste at the 
        repository;
  --Continue essential interactions with State, local, and tribal 
        governments needed to support national transportation planning;
  --Complete efforts to finalize the contour mapping and the layout of 
        the rail line to support land acquisition and complete a right-
        of-way application for the Nevada rail line;
  --Continue design and licensing work on the Transportation, Aging and 
        Disposal (TAD) canister system;
  --Continue staffing and training the OCRWM organization so 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; and
  --Continue planning and designing a compliant and well-integrated 
        safeguards and security, safety, and emergency management 
        program.
    In addition, 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 2009 request also includes oversight funding for the State 
        of Nevada, affected units of local government and an affected 
        tribe, as well as funding for the University System of Nevada 
        and Nye County, Nevada, and Inyo County, California for 
        independent scientific studies;
  --Funding for cooperative agreements with State regional groups and 
        other key parties involved in transportation planning; and
  --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. We also have included funding to 
        begin the upgrade of obsolete data storage systems which house 
        the scientific data collected over the years of this program; 
        this significant asset is now at risk of loss.
          implications of non-access to the nuclear waste fund
    The NWPA establishes 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 $21.0 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, appropriations 
for the Yucca Mountain repository have a significant negative impact on 
the Federal budget deficit. Specifically, the monies collected are 
counted as mandatory receipts in the budgetary process, while spending 
from the Nuclear Waste Fund is scored against discretionary funding 
caps for the Department. In legislation the administration submitted to 
the 109th Congress 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.
    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, 
transportation infrastructure, and transportation and disposal casks. 
The development of a credible schedule for the program is highly 
dependent upon a steady and reliable funding stream.
    The Department estimates that U.S. taxpayers' potential liability 
to contract holders who have paid into the Nuclear Waste Fund will 
increase from approximately $7.0 billion to approximately $11 billion 
if the opening of the repository is delayed from 2017 to 2020. The 
calculation of potential costs to taxpayers is a complex matter that 
depends on a number of variables that change year to year, however, on 
average the liability will increase $500 million annually. The 
Department has not attempted to calculate precisely what these costs 
would be if the opening of the repository were delayed beyond 2020. 
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.
                                summary
    In summary, the President's fiscal year 2009 budget request will 
provide the needed funds to defend the License Application for a 
Construction Authorization of a geologic repository for disposal of 
spent nuclear fuel and high-level radioactive waste at Yucca Mountain. 
The significant reductions in appropriated funding for fiscal year 2007 
and fiscal year 2008, however, have negated the Department's ability to 
meet the March 2017 best achievable opening date. 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 2009 
budget request for the OCRWM.

                          EM BUDGET SHORTFALLS

    Senator Dorgan. Mr. Sproat, thank you very much. Mr. 
Rispoli and Mr. Sproat, I was just observing to Senator 
Domenici that some while ago, some years ago, former 
Congressman Mike Parker was working for the Corps of Engineers 
representing the administration as an appointee. He came to 
Congress and in a disarming moment of candor, he said that we 
don't have enough money in the budget to do what we need to be 
doing. The next morning he was fired.
    I understand your role here today. Your role here today is 
to come up and defend the administration's budget. I understand 
that.
    But, Mr. Rispoli, your job is to clean up the mess from all 
of these nuclear weapons plants that were spread around the 
country. The plants have created an environmental hazard that's 
dramatic. So we've got to clean them up and the job of 
Environmental Management is to clean up all those plants.
    Hanford, for example, my colleague from Washington is here. 
And the fact is we have made agreements and reached agreements 
on milestones to clean them up. And the fact is this budget 
doesn't even allow you to reach the milestones that have been 
previously agreed to. Is that not the case?
    Mr. Rispoli. Senator, that is the case for there are 
milestones in jeopardy both for budget reasons as well as for 
other technical reasons. So yes, that is the case. And that has 
been acknowledged actually in the President's budget that was 
submitted to the Congress.
    Senator Dorgan. I don't understand why a portion of it is 
missing from the milestones that we've contractually agreed to 
meet. We've said here's what we're going to do. And then we 
don't ask for the money for it. Is it because it's less 
important than something else?
    And, as I have indicated your budget has decreased $1.75 
billion over the last 4 years even as the cost of all of this 
has grown substantially. I mentioned earlier that the President 
proposes $1 billion less in water projects for this committee, 
the Corps of Engineers, and Bureau of Reclamation. We're not 
going to do that.
    I assume that someone downtown understands that we have an 
obligation to meet these milestones. And so there must be 
delivered under funding hoping we'll put the money back in, in 
order to meet our contractual obligations. Is there currently a 
proposal that you'll be laying off up to 600 people because of 
the lack of funding?
    Mr. Rispoli. Mr. Chairman, there would be approximately 
that number of people that could be looking at work force 
adjustments. It doesn't have to be that high. We're evaluating 
alternatives with several of our site managers now to see 
whether or not we can smooth out and minimize any reductions. 
It's not the pure number that we worry about. It's the loss of 
the skill.
    We have people that are very, very skilled and experienced 
at what they do. And we don't think it's healthy for the 
program to have perturbations that have sharp drops and then 
have to try to hire people back.
    Senator Dorgan. Yes. I complemented you Mr. Rispoli in my 
opening because I think this is a tough job. And you've tried 
very hard and in many areas have succeeded, but I think it is 
unfair to you and the people that are engaged in your mission 
not to have the funding that will allow us to meet what we have 
already obligated ourselves to do. You know, we're going to 
have to try to think through that here on the subcommittee.

                   YUCCA MOUNTAIN LICENSE APPLICATION

    Mr. Sproat, the license application that you are 
submitting. You're going to be submitting that before June 30. 
How has the 2008 budget that we passed impacted the content of 
the license application you're submitting this year?
    Mr. Sproat. It has not impacted the content or the quality 
of the license application that we'll be submitting primarily 
because we recognize that is the highest priority the program 
had. It's on the critical path to repository construction. And 
so we diverted resources from other parts of the program to 
make sure that we had the right people and retained the right 
people in scientific expertise and engineering expertise needed 
to put together a high quality license application to meet our 
commitment date of submitting that by June 30, of this year.
    Senator Dorgan. If you submit a license application for 
Yucca Mountain and the Nuclear Regulatory Commission ultimately 
authorizes construction, can the Department of Energy begin 
construction of the repository without any changes to existing 
law and can DOE begin transporting and disposing of nuclear 
waste in the repository without changes to existing law?
    Mr. Sproat. No, Senator, there will be additional changes 
required. Specifically, the Nuclear Regulatory Commission would 
not give the Department a construction authorization until 
Congress had legislated land withdrawal for the geologic 
repository operations area or GROA, around the Yucca Mountain 
site, even though it's federally owned land to withdraw the 
land, similar to what was done with the Waste Legislation Pilot 
Project in New Mexico. Congressional legislation is required so 
that the Secretary of Energy can show to the Nuclear Regulatory 
Commission that the Department has total ownership and control 
of that land in perpetuity.
    Senator Dorgan. Do you agree with Senator Domenici's 
implied suggestion in his opening statement that a Yucca only 
policy is leading us into a box canyon of sorts?
    Mr. Sproat. What I would say is I think the primary thrust 
of the Senator's point is that there is a lot of residual 
energy in commercial spent nuclear fuel. And to put it directly 
underground as waste or dispose of that energy content doesn't 
make sense, I think is a very valid point.
    What I would say, though, is this is not an either/or 
question. That under any scenario, even if we go to fuel 
recycling of spent nuclear fuel, there is high level nuclear 
waste residual from that. And we currently have a significant 
inventory of high level nuclear waste from the Defense Program 
and the naval spent nuclear fuel from the naval reactors that 
needs to go into a deep geologic repository regardless of what 
we do with the commercial spent nuclear fuel inventory.
    Senator Dorgan. Senator Domenici?

                          SPENT FUEL DISPOSAL

    Senator Domenici. Mr. Chairman, thank you for laying the 
question directly before Mr. Sproat. Let me make sure the 
record is clear from my standpoint. Your statement that even if 
we go, we have a recycling facility, and I would assume we're 
both talking when you say recycling, we're talking about the 
French model perhaps. There is, the British have one too.
    But let's talk about the French model. If in fact that was 
used, the residual, the ultimate waste to be disposed of is 
nothing like spent fuel rods, right?
    Mr. Sproat. That is correct.
    Senator Domenici. It is much less toxic in terms of its 
half-life, right?
    Mr. Sproat. That is correct.
    Senator Domenici. It is far less in quantity than the 
quantity that is the spent fuel rod quantity, right?
    Mr. Sproat. Well, Senator, in terms of the high level 
waste, that's correct. However there are additional waste 
streams out of the recycling process greater than Class C waste 
and there are significant volumes of that that are produced.
    Senator Domenici. Yes, but the point that I make is that 
you don't need a Yucca Mountain type repository for most of the 
waste that is part of the residual of recycling. In fact, you 
could if you wanted to without any question, you could put it 
in the salt of Carlsbad, most of it.
    Mr. Sproat. Under, if the law was changed to allow that, 
yes. However----
    Senator Domenici. But wait, I'm not talking about WIPP, I'm 
talking about salt.
    Mr. Sproat. While salt is a great medium for storage of 
high level waste and for isolation from the environment, and 
the Germans are using salt beds, the problem is, is that under 
current U.S. regulations, under the Nuclear Waste Policy Act, 
retrievability is a requirement. In other words----
    Senator Domenici. I understand.
    Mr. Sproat. Salt is not a medium that makes retrievability 
very easy.
    Senator Domenici. We're not going to ask the Congress to 
authorize the building, Mr. Chairman, of a recycling facility 
and leave all the other laws in place. We would change the law 
at the same time that you were referring to. There's no need to 
have the ultimate waste that would come from recycling, that 
small amount of modest level waste. It's not a high. There's no 
need to have it retrievable. That law was----
    Mr. Sproat. That's correct.
    Senator Domenici. The reason for that law was we were 
putting in the ground very valuable sources of energy and it 
was stupid to put it in and lock it up because someday we might 
find that we take it out, like they are in Russia. They use it. 
But they recycle it and use it or in any event that's the 
answer to your question.
    I want to thank you very much for what you've done for the 
country. And I'll ask you the questions. You could not have 
done this, you could not be where you are without the good 
people at Los Alamos. Is that correct?
    Mr. Sproat. At Los Alamos and Sandia.
    Senator Domenici. Sandia is the leader.
    Mr. Sproat. Sandia National Laboratory is our lead lab on 
the post closure scientific analysis. They're the ones who have 
integrated all the 20 plus years of scientific data and put 
together the analysis that's contained in the licensing 
application. They've done an outstanding job.
    Senator Dorgan. Mr. Chairman, would you yield on that 
point? I complemented Mr. Rispoli. Let me also say I neglected 
to say how much I appreciate the work of Mr. Sproat. That's a 
tough job that you took on and I appreciate it very much.
    Mr. Sproat. Thank you, Senator.
    Senator Domenici. Thank you, Mr. Chairman. I tell you that 
when he told me some time ago he would get it done. And when 
those troops up there at Sandia said they'd get it done, I said 
you won't. The first time I wanted to scream at you all and you 
were right. You did it.
    Mr. Sproat. Thank you.
    Senator Domenici. So far. We'll see what they say over 
there.

             MISSED COMPLIANCE AGREEMENTS MILESTONES FINES

    Mr. Rispoli, let me just get square on record so we'll 
know. Who will pay the fines, fines that may ensue in New 
Mexico for the failure to meet the court agreed time on clean 
up at Los Alamos. You know they have an environmental man who 
imposes hearty fines. Are you all going to pay or do you expect 
the laboratory at Los Alamos to pay it?
    Mr. Rispoli. In the past the fines have been paid either by 
the Department or by the contractor that operates the activity 
depending upon the basic reason for missing the milestone or 
violation of the agreement. If it were, for example, purely a 
budget driven reason then I would expect the United States 
Government would pay for it from our budget. If on the other 
hand, a milestone were missed because of some technical 
difficulty or a different interpretation, for example, of the 
requirement, then typically the contractor would wind up paying 
for that fine.
    Senator Domenici. As a result of this budget can you tell 
me how many of the milestones you anticipating missing and the 
resulting delays this may have on project completion? And since 
that's a very big number, would you just do that on Los Alamos, 
please?
    Mr. Rispoli. At Los Alamos, we would expect to miss because 
of budget, three milestones. And we anticipate that the cost to 
accomplish those three milestones would be about $100 million. 
I would also point out that at any given time, we are tracking 
over 1,500 milestones in our program. At any given time over 
1,500, typically 250 a year.
    And that does not include some intermediate milestones that 
the sites also track because they're so small that they are 
just on their schedules. So, yes, we will be looking at 
milestones throughout the complex. But I do want to state for 
the record that we basically renegotiate milestones rather 
regularly, as there are technical difficulties or in some cases 
the regulator can't review the documents fast enough.
    Senator Domenici. Yes.
    Mr. Rispoli. So I just wanted to point out that it's a huge 
number of milestones that we deal with. And that for the number 
missed, we basically try to do that as best we could from a 
risk prioritization method.
    Senator Domenici. Now, let's stay with the one in Los 
Alamos. It's--if you miss the milestone there is there any 
serious risk if the milestone is reset in that particular clean 
up project?
    Mr. Rispoli. If we are in jeopardy of missing milestones we 
do, in all cases, attempt to negotiate, meet with the regulator 
to see whether they would have us reprioritize the resources we 
have. So without answering specifically to any of the 
milestones that we're looking at this year, we would always 
dialogue with the regulator to see whether we should do some 
that we thought would be a lower priority but perhaps in their 
view would be a higher priority. And I will state that we do 
that across-the-board with the regulators in all our States.
    Senator Domenici. So this serious risk at Los Alamos, that 
would be readjusted.
    Mr. Rispoli. Yes, sir.
    Senator Domenici. With others in mind.
    Mr. Rispoli. That is correct, Senator.
    Senator Domenici. Can you keep us posted on that?
    Mr. Rispoli. Yes, we can.
    Senator Domenici. Through the committee if you'd like so 
the chairman could know also.
    Mr. Rispoli. Yes, we can.
    Senator Domenici. Thank you, Mr. Chairman.
    Senator Dorgan. Senator Craig.
    Senator Craig. Thank you, Mr. Chairman. Mr. Rispoli, let me 
pick up where Senator Domenici left off. You're obviously 
calculating the potential for fines with milestones missed. So, 
system wide, how much would that figure be if there was a 
refusal to renegotiate? You just simply missed a milestone, 
paid the fine. Have you calculated that?
    Mr. Rispoli. We've run numbers for the milestones that are 
in jeopardy. We don't know that all of them would be missed. 
And in fact we're in the process of renegotiating some now.
    Senator Craig. Ok.
    Mr. Rispoli. But if all were missed it would approach $10 
million, if all were missed.
    Senator Craig. Ten million dollars?
    Mr. Rispoli. It would approach that number, yes, Senator.
    Senator Craig. You know you're down $94 million in the 
Idaho clean up. And, you know, I guess my sadness there is 
you've done so well. And I mean that as a compliment.
    And you ought to be complimented for it because you have 
done well. And Idaho has recognized it and applauded it. And 
it's given the lab a level of recognition that is very, very 
important.
    We were never a weapons lab. We don't have the kind of 
legacies, if you will, that some do. But we do have legacies. 
We've obviously got the legacy of Rocky Flats.
    And we're also very proud. We cleaned up Rocky Flats where 
we did that by moving it out of Idaho. And we're going to miss 
a milestone or two in Idaho. At least that's what we're being 
told could be the consequence of this $94 million reduction.
    So, Mr. Chairman, when you talk about frustrations as 
Senator Domenici and I do, I mean, that's all part of it. Also 
as you know, I've been pushing to take lab waste, move it over 
to EM and I understand the frustration of that. I understand 
there's going to be a response coming forward sooner rather 
than later.
    What if Congressman Mike Simpson and I just simply 
legislated it? Just said here it is. Now the argument is you 
won't take it because there isn't any money.
    But at the same time the other side of the lab has a 
different mission than EM. It is an EM problem, ultimately. So 
why don't we just line it up appropriately and if you can't do 
it because of money then what would be wrong with us just in a 
conference report of a report simply saying, here it is. It 
doesn't change the status of it. It just simply changes your 
responsibility in relation to it.
    Mr. Rispoli. Senator Craig, I might mention that we 
actually put out a call to all departmental elements including 
the Office of both Nuclear Energy, NNSA, and the Office of 
Science. All of them have proposed transfer to EM of both 
facilities and materials. And we are evaluating that now.
    Sometime during this summer we should know. We need to be 
able to put a dollar amount on it.
    Senator Craig. Yes.
    Mr. Rispoli. Or a range, a dollar range. We don't really 
even know yet what that would be until we finish the evaluation 
of what's been proposed. It's actually over 200 facilities and 
a lot of materials that are still in those facilities.
    Senator Craig. Well, if you can get that done by this 
summer, you'll probably beat us legislatively because we're at 
a bit of a stall out here. And at the same time remember that 
money is not necessarily the treater. Because you've already 
demonstrated you're willing to cut back or have to cut back 
budgets on EM and not meet milestones.
    So what we're talking about in Idaho is doing this. Now 
this does not cost money. And nor has it changed the status of 
the need. It has simply changed who handles it.
    Mr. Rispoli. Yes, sir.
    Senator Craig. I don't see that as a money issue. I see 
that as an appropriate realigning in relation to 
responsibilities. Am I wrong?
    Mr. Rispoli. I understand. And I don't disagree. I think 
what this will enable us to do by assembling it all and 
quantifying it and putting a cost range, it will enable us to 
include it in our multiyear program.
    You can only take two points of view. One is that you 
pretend it's not there. And the other is that you recognize it 
is there and work it into your program.
    Senator Craig. Sure.
    Mr. Rispoli. And we take the view that we want to recognize 
what's there and incorporate it into our program, quantify how 
long it will take and what the cost is. So that's the approach 
we're taking.
    Senator Craig. Well, that's--it's important we do that. And 
let me say again, thank you. Work well done, a great reputation 
out in Idaho for the clean up that's underway. I'm saddened 
that all of a sudden we are consciously intending to miss 
milestones at a time when we're trying to build credibility and 
reputation as it relates to DOE's responsibility and handling 
of it.
    Very quickly, Mr. Chairman, Yucca Mountain. Listen to what 
the Director has just said. There is a legacy out there that 
has to be dealt with.
    You need to come to Idaho and look at our lab and look at 
the phenomenal volume of military waste we have there. We store 
almost all of the Navy's nuclear waste. It's cladding is such 
that it must be stored. It cannot be recycled.
    Now there is a responsibility. There is a national 
responsibility that that be handled in a permanent way. I 
understand the politics of Yucca Mountain.
    But I complement Mr. Sproat for doing exactly what he said 
he could do and he's delivering. And we have an obligation, I 
believe, to carry forward to determine. We may be recycling.
    And I agree with Senator Domenici, we ought to. The 
commercial spent fuel ought to be moved into a recycling mode. 
But following that there will remain a need for a permanent, 
deep, geologic repository for certain types of waste of the 
waste stream of clean up and also our military waste. We have--
we're now mostly bringing in about of its wet storage into dry 
storage.
    But I'll invite you to Idaho. There are a lot of shiny 
little vessels out there that are a great history that we're 
very proud of, our nuclear navy. And we have every reason to be 
proud of it. But we have every responsibility to take care of 
that waste stream.
    My position on Yucca Mountain simply cannot change, nor 
will it change as long as I'm here. And afterwards as an 
advocate for the industry there will be a need for a type of 
repository that Yucca Mountain or something like it will 
demand. Even a contemporary new nuclear industry 50 years out 
fully bound to recycling.
    Where do we then finalize the last of that legacy? You do 
it in a permanent storage facility. In the case of what we're 
doing at Yucca Mountain, we've moved that along in under 
tremendous political odds. And I think the Director needs to be 
complemented in that work. And I thank you.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Murray.

        ENVIRONMENTAL MANAGEMENT FISCAL YEAR 2009 BUDGET REQUEST

    Senator Murray. Thank you very much, Mr. Chairman. And I, 
of course, thank you both for the work you've done. However, 
I've heard the word sad used about this budget request. I 
almost can't believe the low budget request for Environmental 
Management, and I just think it's disgraceful.
    There's an ongoing debate here on Capitol Hill right now 
about the cost of war in Iraq and Afghanistan. And we're still 
talking about cleaning up the waste that was left over from 
World War II and the cold war. This is the fourth year in a row 
that the administration has requested a budget lower than a 
year before. And the second year Congress has received a budget 
from the administration that is clearly non-compliant to meet 
the milestones across the States.
    You know this is not a partisan issue. It's not a regional 
issue. It really is a moral and a legal obligation that the 
Federal Government has to clean up and properly store dangerous 
waste across the country.
    Mr. Rispoli, several years ago, before you were working on 
this issue, there was an agreement to work on these clean up 
problems with a plan that was called Accelerated Clean Up, 
which really called for a focus on cleaning up and closing the 
less complicated sites so that we could shrink the total size 
of the complex. But it left a lot of serious issues out there. 
And the funds that were no longer needed to clean up those 
smaller sites were then supposed to be used for the larger 
sites without a reduction in the overall EM spending.
    Now working with my colleagues on the Senate Budget 
Committee this year we worked hard and we passed a budget that 
increases EM by about $500 million. But that is only the start 
of the work that needs to be done this year to properly address 
the portion of the funds that are needed. We cannot continue to 
have the administration send us declining budgets and expect 
miracles to occur here in Congress to add funding and then veto 
those appropriation bills because they're over the President's 
budget request. It just can't happen.
    So, Mr. Rispoli, I just have to ask, are you proud of this 
budget?
    Mr. Rispoli. I think, Senator, any budget process is 
difficult. I think it's true that in all the programs that you 
evaluate as Members of the Senate, you probably see most of 
them that could use more than they have. But at some point----
    Senator Murray. But these are meeting legal obligations.
    Mr. Rispoli. These are to address milestones that have been 
negotiated over many, many years. I think we are in dialogue 
with all of the States. As I indicated, to address from a 
relative risk standpoint, which of them need to be done and 
which can be postponed a bit, if you will.
    I would point out for example at Hanford at the beginning 
of this administration there was $1.2 billion per year going to 
Hanford. Now there's $2 billion per year going to Hanford. Even 
as----
    Senator Murray. Overall complex, the big plants being 
built. At it's river corridor clean up, it's a complex site. 
These are expectations that happen to be in my State, but the 
country needs this cleaned up. This is a nuclear waste site.
    Mr. Rispoli. Yes, we agree with that. And with respect to 
the river corridor, I think we are making tremendous head way 
with ground water. I'm sure----
    Senator Murray. I'll ask you about that in a minute, but 
let me go back. Do you think this budget request is adequate 
for EM overall?
    Mr. Rispoli. The President's budget in writing as submitted 
to the Congress acknowledges that the budget request will 
result in putting milestones at jeopardy both for budget 
reasons and for technical reasons.
    Senator Murray. It almost feels like there's this little 
conversation going on in the White House where they send over a 
budget request that's less than adequate in many, many ways, 
knowing that we're going to do our job because we represent 
States that are going to have disasters if those sites aren't 
cleaned up, and we're going to add the additional dollars. Then 
there's another room in the other part of the White House where 
they're saying veto every appropriation bill that's over the 
administration's request. Those two rooms better start talking 
to each other because we have potential disasters coming.
    I'm not just saddened by this budget request, I'm angered 
by this budget request. We have an obligation to clean up these 
sites.

                 EM FISCAL YEAR 2009 BUDGET PRIORITIES

    Let me ask you about the river corridor closure. That is a 
project that is performing well. It's ahead of schedule, and 
it's on budget. The workers have made great progress, 
decommissioning and demolishing the buildings in the 300 areas 
that cocoon the reactors along the Columbia River, cleaning up 
the burial sites.
    That sounds really successful to me. Yet the budget, this 
budget, that you sent us cuts that funding by $77 million. I do 
not understand why we're going to pull the rug out from under a 
high performance project.
    Now, you said you increased groundwater funding by $60 
million. But I have to ask, how do you expect the workers to 
get at the ground water when the buildings are still sitting on 
top of those sites?
    Mr. Rispoli. Senator, I think we are paying a lot of 
attention to groundwater. We are focusing on the highest 
priority locations as are shown on this map of the Hanford 
reservation. There's also a photo before you that shows that in 
the 300 Area alone we've taken down over 200----
    Senator Murray. I know that. But until we take those 
buildings down we can't get to the ground water. So 
undercutting that project by $77 million means we can't get to 
the ground water.
    Mr. Rispoli. What we are prepared to do is negotiate with 
the State. And if the State believes it's a higher priority for 
us to shift funds to tear down buildings, we can certainly 
discuss that with them. But I do believe that the commitment 
that the Secretary has shown to the Waste Treatment Plant, one 
of the largest public works----
    Senator Murray. That's not fair to dump it on the State. 
When the administration asks for $77 million less for river 
corridor closure what it truly means is that there will have to 
be layoffs this summer. Once the appropriation bill is written 
with additional dollars it will be too late. Somehow we're 
supposed to find these people again a few months later and hire 
them back.
    These jobs are dangerous. And we have to have, as you said 
a few minutes ago, people who are highly skilled doing them. I 
don't understand how we can manage these complex jobs that are 
out there and just say we'll negotiate with the State. This is 
in my State, but this is a national project.
    Mr. Rispoli. Senator, with all due respect I wasn't meaning 
to dump anything on the State. I think we, and the State, have 
a very, very formidable challenge in Washington. I think we 
recognize that Hanford is probably the most significantly 
contaminated site we have.
    And I believe that it's important that we and the State 
work together. We have over 10,000 workers there just in the 
environmental program that are residents of that State, working 
very, very hard to deliver the good work that they're 
delivering. I think the reality is that when your needs exceed 
the budget amounts you have to use some sort of a 
prioritization.
    Senator Murray. When our needs exceed our budget amounts, 
somebody over in OMB decides a random budget amount and then 
says anything above that is just a need someplace. These are 
clean up sites. This is nuclear waste. These are projects that 
are highly complicated.
    Mr. Chairman, I just think we're playing with fire here the 
way these have been volleyed back and forth. I'm out of time. I 
do have some other questions, but I will wait until the next 
round.
    Senator Dorgan. Well, Senator Murray, I understand your 
passion and concern. I share it. I don't know whether you were 
here when I mentioned about former Congressman Mike Parker. But 
when he showed up and expressed dissatisfaction with the 
President's budget he lost his job the next morning. So I guess 
neither of us probably expects someone from the administration 
to come and say that they're short of money.
    But it's pretty clear to me that this budget, Mr. Rispoli, 
does not give you the resources that had previously been 
committed to be spent to meet milestones. And if we live in a 
State, as Senator Murray does, where we have very substantial 
clean up obligations, there's every reason to be angry about 
that. When the Government makes commitments, the Government 
should keep its commitments.
    And there's plenty of money for other priorities of the 
administration, but this apparently is less a priority. I think 
that we're going to have to, as a subcommittee, try to 
determine how we allocate our resources this year. It's hard to 
do. As I indicated we're short of money in a wide range of 
areas given the President's budget request. But we're going to 
work hard to try to reallocate this funding to meet the 
obligations that we believe we have.
    Senator Murray, if you wanted to ask additional questions 
I'd be glad to recognize you.
    Senator Murray. Well I appreciate that and I know that you 
need to move on. I did have some questions about the VIT plants 
and supplemental treatment. I would like to submit them and I 
really would appreciate a response back.
    On a good note, the B reactor is open for tours. I know 
we're getting great response out there at the site. I 
understand that the 2,064 seats were filled in less than 24 
hours. In my State we would say those tickets sold out faster 
than a rock concert, even if they're free.
    I do think that the B reactor is an important piece of 
history and I hope that we can continue to work with all of you 
to make it more available for the public. It's an important 
site, and it's an important part of our history, good, bad and 
ugly. I think it's important that future generations see what 
some of the people sacrificed there, what they gave up and the 
ingenuity that this country came to at a time of great 
importance.
    I will submit my other questions for the record and thank 
you very much.
    Senator Dorgan. Senator Murray, thank you very much. I want 
to mention, Mr. Rispoli, before you testified I had an 
opportunity to view these photographs and what the photographs 
demonstrate to me is that money spent on this clean up is very 
important. When we clean up a site, that's real progress and 
real value.
    So this isn't a debate about money that has little 
consequence. The expenditure of the money and the completion of 
the clean up is a very significant event. And you show some of 
that in these photographs. Although it looks like you took one 
of the photographs during the winter and the comparison in the 
spring, which gives it a slightly different look, Mr. Rispoli. 
But nonetheless, I think that this is very helpful to the 
committee. And we appreciate your work.
    Let me say to both of you, we likely will be back in touch 
with you as we move toward a mark up to solicit additional 
information about both of these programs and priorities because 
we're going to have to find a way to sift through the 
President's recommendations and come up with a set of 
recommendations that represent what the committee feels the 
appropriate priorities are.

                     ADDITIONAL COMMITTEE QUESTIONS

    I would like to ask at this time that the subcommittee 
members submit any additional questions they have for 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. James A. Rispoli
               Question Submitted by Senator Patty Murray
                       three hanford procurements
    Question. Mr. Rispoli, my understanding is that the decisions 
regarding the award of two of the pending Hanford contracts--Central 
Plateau and Tanks Farm Operations have been delayed again. 
Additionally, there seems to be an indication the Mission Support 
Contract will be awarded last rather than first as originally expected. 
There is much uncertainty with these three large contracts yet to be 
decided and I'm looking forward to the day when Hanford has a full 
complement of Federal managers and all the major contracts awarded and 
running with adequate funding. With cleanup schedules and funding as 
tight as they are I would certainly like to see teams in place that 
have solid track records of staying on time and on budget.
    Having the Mission Support contract in place prior to awarding the 
Central Plateau and Tank Farm Operations would seem to offer an 
efficiency and ease of transition for the workers. Would you please 
explain the reason behind the order of the award of the contracts?
    Would you please provide an outline of the timing of the three 
contract awards and when they would be in place and running?
    Answer. With the recent award of the Tank Operations Contract on 
May 29, 2008 and the Plateau Remediation Contract on June 19, 2008 and 
the Mission Support Contract on track for a projected award in July-
September 2008 time frame as originally forecasted, this next 
generation of contracts will continue the important cleanup work 
conducted on the Hanford Site Central Plateau.
    The order of award is based on the uniqueness of each procurement, 
the evaluation process leading up to award along with the Department's 
efforts to minimize disruption to ongoing work while improving overall 
efficiency. Maintaining the cleanup momentum is one of several 
important considerations to the Department. Impacts are minimized given 
the specific scope of work contained in each of the three new 
contracts, detailed contract requirements for each contract transition, 
and a 90-day transition period that provides the flexibility to overlap 
each of the contract transition periods. Departmental planning for 
contract transition has considered the logical alternatives for 
contract award sequence, and can support award of the three contracts 
in any sequence
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                              lanl cleanup
    Question. Secretary Bodman has testified earlier this year that the 
fiscal year 2009 EM budget is short across the board, and that there 
will be missed milestones. In particular, it has come out in subsequent 
testimony that the funding for environmental cleanup work at Los Alamos 
National Laboratory is short $100 million for fiscal year 2009. Who 
will pay for the expected fines that LANL will get from the State of 
New Mexico? Will it come out of planned cleanup dollars, further 
exacerbating the problem? As a result of this budget, can you tell me 
how many of the milestones you anticipating missing and the resulting 
delays this may have on project completion?
    Answer. It is important to recognize that some milestones and 
obligations would have been missed regardless of the budgetary approach 
and the level of funding that was chosen. This is primarily the result 
of the relevant agreements having been negotiated years ago with 
incomplete knowledge by any of the parties of the technical complexity 
and magnitude of costs that would be involved in attempting to meet the 
requirements. Moreover, the cleanup program continues to be impacted by 
various safety, contract administration, project management, 
regulatory, legal, technical, economic, and other significant 
challenges. Consequently, isolating funding as the only issue placing 
some of the Department's cleanup milestones in jeopardy given the other 
confounding factors would be inaccurate and misleading.
    When a milestone is missed, whether a fine or penalty is imposed is 
left to the discretion of the Department's regulators. Once imposed, 
who pays a fine or penalty depends on whose actions are responsible for 
missing the milestone. In the past, some fines for missed milestones 
have been paid by the Department, others by contractors. There is no 
separate appropriation for fines and penalties. Therefore, fines and 
penalties paid by the Department come out of cleanup budgets.
    Of the seven Los Alamos National Lab compliance milestones 
scheduled for completion in fiscal year 2009, EM anticipates that three 
are at-risk based on the program's expected performance through fiscal 
year 2008. Since none of these milestones are on critical path to 
project completion, their delay will not result in an extension to the 
project completion date.
                     renegotiate lanl consent order
    Question. A recent newspaper story reported that Ron Curry of the 
New Mexico Environmental Department believed that Department of Energy 
actions seem to indicate that the Department wants to renegotiate and 
weaken the terms of the clean up agreement between the Department and 
the State. Is there any truth to this statement?
    Answer. No. The Department does not intend to renegotiate or weaken 
the terms of the 2005 Order on Consent. Rather, we have proposed, 
within the existing structure of the Consent Order, priorities with a 
goal of arriving at mutually agreeable opportunities to complete 
cleanup.
                      missed milestones nationwide
    Question. It is my understanding that this budget puts at risk 
three milestones at Los Alamos for fiscal year 2009. How many 
milestones nationwide do you estimate will be missed under this budget 
and how much funding will it take for Congress to add to recover these 
milestones?
    Answer. It is important to recognize that some milestones and 
obligations would have been missed regardless of the budgetary approach 
and the level of funding that was chosen. This is primarily the result 
of the relevant agreements having been negotiated years ago with 
incomplete knowledge by any of the parties of the technical complexity 
and magnitude of costs that would be involved in attempting to meet the 
requirements. Moreover, the cleanup program continues to be impacted by 
various safety, contract administration, project management, 
regulatory, legal, technical, economic, and other significant 
challenges. Consequently, isolating funding as the only issue placing 
some of the Department's cleanup milestones in jeopardy given the other 
confounding factors would be inaccurate and misleading. Of the 
approximately 120 compliance milestones scheduled for completion in 
fiscal year 2009, EM anticipates that 32 are at risk based on the 
expected progress through fiscal year 2008.
                                  wipp
    Question. Today, the Waste Isolation Pilot Plant is operating at 
full capacity, processing an average of 26 waste shipments per week. 
This throughput is helping to ensure that sites such as Idaho National 
Laboratory and Los Alamos National Laboratory meet State-mandated 
milestones for the removal of TRU waste. Your fiscal year 2009 budget 
proposes $211.5 million for WIPP, a 10 percent decrease from the fiscal 
year 2008 level. This cut will reduce the rate of waste shipments to 
WIPP. Slowing waste transfers to WIPP means that the material will 
remain where it was created and delivery milestones will be missed. Mr. 
Rispoli, why did you propose this reduced funding level? How many 
State-mandated milestones will be missed? Will there be impacts on 
storage facilities at Los Alamos and Idaho National Laboratories?
    Answer. The EM fiscal year 2009 request reflects the Department's 
priorities to focus on risk reduction while maximizing regulatory 
compliance. As noted in the budget request, the proposed fiscal year 
2009 funding would allow WIPP to support a disposal capability of 26 
waste shipments per week: 21 shipments per week of contact-handle 
transuranic waste and 5 shipments per week of remote-handled 
transuranic waste. We do not currently anticipate missing any State-
mandated milestones in fiscal year 2009 at any of our sites based on 
the WIPP program's expected performance through fiscal year 2008. There 
will be no adverse compliance impacts at the Idaho National Laboratory 
because the Department is ahead of schedule in meeting the Idaho 
Settlement Agreement milestones and the Site Treatment Plan targets for 
processing and shipping transuranic (TRU) waste. At Los Alamos National 
Laboratory, there are no State-mandated milestones specific to 
transuranic waste operations, and no adverse storage conditions are 
expected.
 los alamos national laboratory--national academy study on groundwater 
                               protection
    Question. At the request of the Office of Environmental Management 
the National Academy of Sciences initiated a study of groundwater 
protections activities at Los Alamos National Laboratory, which was 
published last year. (``Plans and Practices for Groundwater Protection 
and the Los Alamos National Laboratory.'') Their recommendations 
include: completing the characterization of disposal sites; performing 
additional modeling to understand potential pathways between watersheds 
and adding monitoring locations in the southern area of the site (and 
near the San Ildefonso Pueblo lands). Mr. Rispoli, has any decision 
been taken to act upon these recommendations? What is the status of 
these efforts? Has money been requested in the fiscal year 2009 budget 
to support this work?
    Answer. Yes, the EM program has developed an implementation plan 
for the 17 recommendations in the National Academy of Sciences study. 
Of the 17 recommendations, 13 describe work that has already been done 
or is ongoing. Funding for these activities has been requested in the 
fiscal year 2009 budget.
                         science and technology
    Question. In the ``Science and Technology Needs for DOE Site 
Cleanup'' workshop held last year, it was mentioned several times that 
current EM cleanup contracts actually serve as a barrier to new 
technology deployment. What is being done within EM to incentivize 
contractors to deploy new technologies to improve upon the efficiency 
and effectiveness of future cleanup contracts?
    Answer. The Office of Environmental Management is committed to 
further developing and utilizing an array of contract structures that 
will provide for the safe and efficient cleanup of our sites, and where 
appropriate, incentivize our contractors to deploy new and/or 
innovative technologies and approaches. Our major contracts are 
structured to incentivize the successful completion of defined mission 
objectives. As such, our incentives are geared toward rewarding results 
achieved and not the methods by which those results are achieved. The 
result of this approach is that our private sector contractors are 
incentivized to utilize their ingenuity and creativeness, including the 
use of new and/or innovative technologies, as appropriate, in bringing 
forth the best solutions to our cleanup challenges.
    In addition, and on a more specific level, we have recently issued 
guidance for using a new project management tool, the Technology 
Readiness Assessment (TRA). The TRA process, as adapted for 
environmental cleanup, is a tool for understanding, and mitigating, the 
complexity and risks associated with implementing first-of-a-kind 
technologies required for the safe and efficient cleanup of our sites. 
Rigorous application of this tool within the framework of our incentive 
contracts will enable our contractors to substantially reduce the risk 
associated with deploying new and/or innovative technologies.
    Question. If additional funding is not secured to enable Los Alamos 
to meet the milestones prescribed in the Consent Agreement that would 
result in a 2 year delay in the cleanup milestone, will this have a 
measurable impact on nearby populations? What impact will this have on 
the cost of cleanup?
    Answer. The budget request provides funding that makes any 
measurable impact on nearby populations very unlikely. The LANL site is 
extensively monitored, with thousands of environmental samples 
routinely analyzed for measurable contamination that could potentially 
impact nearby populations. These results are reported annually in site 
monitoring reports. While the potential for accidents cannot be 
completely eliminated, the Department believes that these risks are 
also very low. Administrative and engineered controls and operational 
safety protocols all contribute to the continued protection of the 
local populations.
    The Environmental Management program's goal is to meet the terms of 
the consent Agreement and finish cleanup at the earliest possible 
juncture in a cost-efficient manner.
                                 ______
                                 
            Questions Submitted to Hon. Edward F. Sproat III
            Questions Submitted by Senator Pete V. Domenici
       implementation of e&w direction to consolidate spent fuel
    Question. The fiscal year 2008 Consolidated Appropriations Act, 
Public Law 110-161, which contains the Energy and Water Division, 
directed the Department ``to develop a plan to take custody of spent 
fuel currently stored at decommissioned reactor sites.'' This language 
is borne out of frustration over the lack of options being considered 
for addressing out commercial spent fuel options. What is the status of 
this report and can you please explain to me what options you are 
considering?
    Have you reached out to the communities interested in hosting the 
GNEP facilities as the public law directs?
    Answer. The Department is preparing a report that will discuss what 
is required to develop an interim storage facility for the acceptance 
of spent nuclear fuel from decommissioned nuclear reactor sites; we 
expect to release the report this summer. The report will consider 
siting options at an existing Federal site, at one or more existing 
operating reactor sites, or at a competitively-selected interim storage 
site. While the Office of Civilian Radioactive Waste Management (OCRWM) 
has not yet reached out to the communities interested in hosting the 
Global Nuclear Energy Partnership, the report will take into account 
information the Department has acquired through the efforts of the 
Office of Nuclear Energy to reach out to such communities.
                          license application
    Question. You appear to have high confidence that DOE's Yucca 
Mountain license application will be of high quality. However, the 
Department has had numerous problems with quality assurance in the 
past. Please describe what standards you have put in place to ensure 
the application will be of the highest quality and how, during the 
transition from one administration to another, we can be assured the 
standards will be maintained.
    How long do you estimate it will take the NRC to take to review and 
approve the license for Yucca Mountain?
    Answer. The Department has taken several steps to build quality 
into the development of the License Application (LA) and we are proud 
of that work. Specifically, the Department followed a rigorous, 
disciplined process that included development of the LA in four phases, 
final LA completeness and accuracy verification reviews, and 
independent quality control checks and validation. In addition, the 
Office of Quality Assurance conducted oversight activities in parallel 
with LA development. Review and approval of the LA was required by all 
organizations at each of the four phases of development, and senior 
management from the Federal and contractor staffs were fully integrally 
and involved in LA preparation and development.
    Section 114 of the Nuclear Waste Policy Act requires that the 
Nuclear Regulatory Commission (NRC) issue a final decision on 
construction authorization for all or part of a repository within 3 
years of the date of submission of the application, except that the 
Commission may extend the deadline by not more than 12 months if the 
NRC submits to the Secretary and the Congress a written report 
explaining the reason for its failure to meet the deadline. We expect 
that the NRC will meet its mandated statutory time frame.
                       yucca mountain next steps
    Question. Beyond the resources required for DOE to support NRC 
review of its license application, have you identified additional 
activities that should be funded in order to position the Department to 
begin construction of the repository in a timely and efficient manner 
should a Construction Authorization be received from NRC? Have any such 
activities been included in your fiscal year 2009 budget request?
    Answer. Beyond funding to participate in the licensing proceeding, 
the fiscal year 2009 budget request includes funding adequate to 
execute the minimum set of critical activities which are sufficient to 
continue to make forward progress on the program. Activities to be 
funded include continued detailed design for facilities required for 
the receipt of spent nuclear fuel and high-level radioactive waste; 
continued essential interactions with State, local, and tribal 
governments needed to support national transportation planning; 
completion of efforts to finalize the contour mapping needed to 
finalize the layout of the rail line in pursuit of land acquisition and 
completion of a right-of-way application for the Nevada rail line; 
continued design work on the transportation, aging and disposal 
canister system; staffing and training of the OCRWM organization so 
that it has the skills and culture required to design, license, and 
manage the construction and operation of the Yucca Mountain Project; 
and planning for a compliant and well-integrated safeguards and 
security, safety, and emergency management program for the disposal, 
transportation, and management of spent nuclear fuel and high-level 
radioactive waste.
    Question. When the Yucca Mountain Development Act of 2002 
authorized DOE to go ahead and proceed into the licensing process for 
Yucca Mountain, the Department originally planned to submit a license 
application to NRC in 2004. This of course has been delayed. It is my 
understanding that, during the extended period that we have been 
waiting for the now forthcoming license application you have had 
significant and regular pre-application interactions with the NRC. Can 
you comment on what you have learned from these interactions in terms 
of types and extent of questions you might expect from NRC during their 
review of your application?
    How has what you have learned informed your planning in terms of 
the resources that will be required for DOE to be in a position to 
respond to NRC questions in a timely manner?
    Also, given this knowledge, what is your level of confidence that, 
provided you get the resources you believe are required for DOE to be 
responsive to NRC's review (and NRC's funding requirements are 
similarly met), that the review can be completed in the 3 to 4 years 
called for in the Nuclear Waste Policy Act?
    Answer. We believe that the pre-licensing interactions have helped 
the NRC to better understand DOE's approach to demonstrating compliance 
with the applicable regulations. Also, in some instances these 
interactions have led the Department to revise its approaches to better 
meet NRC's expectations. We are not in a position to speculate on the 
type of questions that may result from the NRC's review of the LA.
    The Department's planning relating to the resources that will be 
necessary to support the licensing proceedings has been informed by 
past interactions with the NRC, the Department's experience in 
preparation of the LA, and the Department's experiences in supporting 
regulatory proceedings and/or litigation in connection with major 
Federal projects. Subject to the availability of the requested funding, 
the Department believes that with the submittal of a high quality LA 
and the available technical Federal and contractor staff that the 
Department will be able to respond to NRC requests for additional 
information in a timely manner.
    The Department is confident that, assuming receipt of the requested 
funding, that we will be able to respond to NRC requests for additional 
information in a manner such that NRC will be able to complete their 
Safety Evaluation Report within 18 to 24 months. This will support 
timely issuance by the NRC of a decision regarding construction 
authorization within the 3 to 4 year time frame.
    Question. As you know there is now considerable interest in 
recycling used nuclear fuel. It is my understanding that recycling 
removes many of the radioactive constituents from the used fuel and 
processes them into waste forms having reduced volume as compared to 
what is originally in the used fuel. Can you comment on the ability of 
the Yucca Mountain repository to safely dispose of the waste forms that 
might result from recycling and how this might impact the amount of 
material that could be stored in the Mountain?
    Answer. Until the current law is changed, recycling of spent 
nuclear fuel will have no effect on the amount of waste that can be 
disposed of in Yucca Mountain. This is because the Nuclear Waste Policy 
Act of 1982, as amended, sets a limit of 70,000 metric tons of heavy 
metal (MTHM) based on the original uranium content of the fuel. 
Therefore, regardless of the amount of volume reduction or radionuclide 
transformation that takes place by recycling, only the amount generated 
by the original 70,000 MTHM can be placed in the repository. If the law 
were to be changed to lift that limit, the high-level waste products 
from recycled fuel in amounts greater than 70,000 MTHM could be 
disposed of in Yucca Mountain.
    The Department is in the process of evaluating the benefits of 
recycling spent nuclear fuel; however, it is premature to analyze how 
the various waste forms resulting from recycling might impact the 
amount of material that could be stored in Yucca Mountain. Further 
technical information on the characteristics of the waste form is 
required before such analyses can be performed. Studies prepared for 
the Global Nuclear Energy Partnership have indicated that the recycling 
initiative can potentially produce a waste form with less volume and 
lower heat generation.
                           new nuclear plants
    Question. What are the implications of the recent announcements of 
nuclear power plant license submittals with regard to the Yucca 
Mountain license application and the utility contracts?
    Answer. The recent announcements of nuclear power plant license 
application submittals to the NRC will not impact the License 
Application for Yucca Mountain, which is being prepared based upon the 
current statutory limit of 70,000 MTHM. The announcements similarly 
will have no impact on the Department's existing utility spent fuel 
disposal contracts, which were executed in the 1980s.
    Notwithstanding the above, the Nuclear Waste Policy Act of 1982, as 
amended, requires that any applicant seeking a license to construct and 
operate a new nuclear plant must have entered into a contract with the 
Secretary of Energy for disposal services, or that the Secretary 
affirms that such a person be in good faith negotiations with the 
Secretary for such a contract. In view of the announcements of 
applications for new nuclear plants, the Department is considering 
execution of appropriate contracts with interested utilities.

                          SUBCOMMITTEE RECESS

    Senator Dorgan. So we appreciate both of you coming to the 
Senate today and appreciate your testimony. This hearing is 
recessed.
    [Whereupon, at 10:38 a.m., Wednesday, April 9, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]







    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2009

                              ----------                              


                        THURSDAY, APRIL 10, 2008

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:30 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Byron L. Dorgan (chairman) 
presiding.
    Present: Senators Dorgan, Murray, Johnson, Landrieu, Reed, 
Domenici, Bennett, Craig, and Bond.

                      DEPARTMENT OF DEFENSE--CIVIL

                         DEPARTMENT OF THE ARMY

                       Corps of Engineers--Civil

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

              OPENING STATEMENT OF SENATOR BYRON L. DORGAN

    Senator Dorgan. We'll call the hearing to order. This is a 
hearing of the Appropriations Subcommittee on Energy and Water 
Development. This is a hearing on the fiscal year 2009 budget 
request for the U.S. Army Corps of Engineers and the Bureau of 
Reclamation.
    I want to say to my colleagues and to the witnesses, as 
well, that we have three votes in the Senate starting--I 
believe--at 10:45, which means we would have to leave the room 
here about 5 till 11. My hope is that we can finish this 
hearing in about an hour and a half, otherwise we will need 
about a 40 to 45 minute recess during those votes.
    So, I'm going to truncate my opening remarks, and I only 
point that out--not to disadvantage anybody--but hope that 
perhaps we can complete the hearing in an hour and a half.
    Today the subcommittee will take testimony on the budget 
for 2009 for the U.S. Army Corps of Engineers and Department of 
Interior.
    Testifying for the Corps will be John Paul Woodley, the 
Assistant Secretary of the Army for Civil Works, as well as 
Lieutenant General Robert L. Van Antwerp, Chief of Engineers 
for the U.S. Army Corps of Engineers.
    Testifying for the Interior will be Kameron Onley, Deputy 
Assistant Secretary of the Department of the Interior, and 
Robert Johnson, Commissioner of the Bureau of Reclamation.
    General, this is your first opportunity to appear before 
the committee, I believe. And since assuming--at least, since 
assuming the command of the Corps of Engineers. We welcome you 
here, I look forward to working with you on many water resource 
problems that we have across this entire country, and in 
particular, I hope you'll familiarize yourself--I know you 
will--with the special water issues we have in North Dakota, 
the continuing flood in Devil's Lake that is causing a lot of 
difficulty and the management of the Missouri River System.
    You know, and I know that I've been highly critical of the 
management--or the mismanagement--of the Missouri River System, 
but you and I will talk about that at a later time.
    The President proposes a fiscal year 2009 budget for the 
Corps of Engineers of $4.74 billion, which is $851 million 
below the fiscal year 2007 enacted $5.59 billion. When you take 
a look at the Corps of Engineers and the Bureau of Reclamation 
sitting in front of us today, the proposal is to reduce funding 
by almost $1 billion.
    I must say, I don't think the committee is going to do 
that, I don't think that represents the country's urgent need, 
but I understand that you come here supporting the President's 
budget.
    I do think--I made the point yesterday when Senator 
Domenici was here, I remember that former Congressman Parker 
once came to the Congress. And apparently Senator Bond asked 
him the question, and Congressman Parker--in a moment of 
careless candor, said, ``Yes,'' he thought the budget was short 
of what is needed, and the next morning he was fired.
    So, I understand the four of you are here to support the 
budget sent to us by the President, but I do want to say--
investment in water resources is unbelievably important for 
this country. And we're doing, I think, 950 water projects in 
the country of Iraq, paid for by the American people, right 
now--950 water projects in Iraq--and we come to this table with 
the proposal that we should cut $1 billion from water project 
investment in this country. I personally think that's misplaced 
priorities.
    I will not go down the list, in total, I'm going to 
truncate my opening statement and put the entire statement in 
the record--I was going to talk some about the President's 
comments about earmarks. As you know, most of this 
subcommittee's earmarks are for ongoing projects, and if we 
didn't do them, they wouldn't get done.
    So, I will truncate, again, that comment, as well.
    I will just say to my colleagues who just arrived, that 
we're going to try to finish this hearing in an hour and a 
half, because we have three votes starting at about that period 
of time. If we could finish this hearing at that time, I'd 
appreciate it.
    Let me call on my colleagues for very brief opening 
statements, if I might.
    First, Senator Domenici.

             OPENING STATEMENT OF SENATOR PETE V. DOMENICI

    Senator Domenici. Yes, thank you, Mr. Chairman.
    I just wanted to indicate that this will be my last hearing 
of this type, and the--it has been a rather exciting experience 
working on this committee.
    You are the 11th Chief of Engineers, and Commissioner 
Johnson, you are the 15th Commissioner of Reclamation that I've 
had the pleasure of working with, so I think that makes me a--
probably, I hold a record that won't be broken for awhile.
    Senator Dorgan. Senator Domenici, does that reflect how 
long you've been here, or how much turnover there's been?
    Senator Domenici. A little bit of both. I've been here, and 
some other departments for 36 years, and they've only had one 
or two leaders, or three. So this--it's quite a bit of 
turnover.
    I have statements regarding both of your functions, and I 
have some statement here regarding the tax that was placed 
upon, in the Nusra Waterway, when I was a freshman Senator, 
believe it or not, that was my bill that put on the--that 
levied the tax.
    Senator, I beat all of the powerhouses then, you know, this 
bill ran against the grain of Russel Long, and on the House 
side, Dingell, everybody--and it passed, nonetheless, and the 
tax was put on. And now it seems like it's not working, and the 
administration says they're going to send something else up to 
take its place, I don't think you've seen what they plan to put 
in, nor have I.
    In my State, I want to say to you, General, you have made a 
commitment to join us there when we dedicate the Bosque in 
Albuquerque, we established quite a big park there among those 
beautiful cottonwood trees, and I certainly hope to see you 
there.
    And Commissioner, we have one big job left with you, we 
have a wonderful building that is to house research entities 
that want to look into water research, and they can go there 
and rent space in this rather visionary idea that you could 
establish a place where they could come and do their research 
and rent space in a well-equipped building. And I hope we can 
work out the management aspects of that, and the--who's going 
to run it. And perhaps within a couple of months you'll have 
that worked out.
    Senator Dorgan. Senator Murray.

                   STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. Thank you very much, Mr. Chairman, for 
calling this hearing.
    And thank you to all of the witnesses, I appreciate your 
attendance this morning to discuss these important topics.
    I do have to leave in just a few minutes to chair a hearing 
of Transportation and HUD Subcommittee, so I won't be able to 
probably make it back for questions. I wanted to take this 
opportunity to raise a few items with you now, and I will be 
submitting questions for the record.
    Secretary Woodley, and General Van Antwerp, I want to 
commend the three Army Corps of Engineers districts that 
directly work with Washington State, Seattle, Portland and 
Walla Walla Districts--they do great work for my State and the 
people who live there. The military and civilian staff both are 
responsive, and they've worked very well with my staff, and I 
appreciate that.
    While I do have a great working relationship with those 
offices, it's often very difficult to make progress without 
adequate budgets being sent from this administration. And I am 
deeply concerned by the $846 million in cuts to the budget from 
the fiscal year 2008 appropriated dollars. It seems to me this 
is just an annual game where the administration sends us short-
sighted budget requests, expects Congress to fill in these 
important budget items, we send them back to them, and they 
veto them. It's a game that is playing with lives, and 
important projects and I resent it.
    I want to comment, as well, on the newly proposed user fees 
for the navigation locks to fund the Inland Waterway Trust 
Fund. This would place a large burden on some river systems, 
more than others, and it makes no sense to me to abandon the 
established diesel tax and try to create this entire new 
bureaucracy. I don't understand why we don't work to update the 
current vehicle.
    You know, for years now, I've been working with this 
committee and with you and the administration to deepen the 
Columbia River Channel, so we can allow larger ships and barges 
to carry millions of tons of cargo to domestic and 
international markets. I am pleased with the inclusion of funds 
to continue this effort, as the Columbia and Snake River System 
is a very important economic engine, of great importance to our 
country.
    However, it seems really illogical to me that the Corps 
would invest so much in the river transportation system, and 
then try to implement a fee that could discourage those users 
away from the river system and back onto our roads and 
highways, which is a more expensive mode of transportation. So, 
I am deeply concerned about that.
    Turning back to the severe budget cuts, and the projects 
left off the President's request--I do want to talk to you 
about a project in Centralia, Washington. We have been working 
with the Corps for many years on an important flood control 
project along the Chehalis River. This is a project that has 
been studied, reported, and finally authorized in the Water 
Resources Development Act (WRDA) bill that was passed by 
Congress last year, over a Presidential veto.
    As I'm sure you are aware, there was a tremendous storm off 
the coast of Washington State, and in Oregon, last December. It 
caused tremendous flooding and damage--we haven't seen anything 
like that in my State for some time. The flooding shut down I-
5, which is the main north/south freeway from Washington State 
all the way to California, for 4 days. The flooding overwhelmed 
the Chehalis River, the entire river basin, damaged homes, 
killed thousands of farm animals, destroyed local 
transportation infrastructure and it cost us millions--
millions--in debris cleanup.
    We still have people in Centralia and the surrounding areas 
who are still trying to pick up the pieces of their homes, 
businesses, and lives that were destroyed. I have been down 
there many times, and visited with the people and the local 
officials, and they are all really eager to find a way to 
prevent this from ever happening again.
    I made a promise to those people to work here in Congress 
to get those funds--it's to an inexpensive project, it's 
authorized at $74 million on our side, $50 million on the 
State. But in the budget that we're discussing today, Mr. 
Chairman, there is zero dollars. We cannot continue to do this, 
and I'm--if I can't come back, I will submit questions about 
this. I would like to ask you to come to my office and work 
with me on this.
    But Mr. Chairman, I just reiterate--we can't keep having 
this administration send us budgets that don't adequately fund 
the projects that we've been working with them on.
    Senator Dorgan. Senator Murray, thank you.
    Senator Bond.

                STATEMENT OF SENATOR CHRISTOPHER S. BOND

    Senator Bond. Thank you very much, Mr. Chairman.
    I certainly agree with the words of the chairman, and 
Ranking Member Domenici, and my colleague from Washington on 
the inadequacy of the budget, and also the admonition that, if 
you can't agree with this openly, you'll get canned. But we 
want you to know, and we want everybody else to know, how bad 
we think this budget is. And it's totally inadequate, and it's 
a great disappointment.
    Just a few weeks ago, Missouri was hit with devastating 
floods that ruined homes, damaged farmland, took the lives of 
too many people. This disaster served as one more harsh 
reminder of the importance of our infrastructure, including 
flood control of our rivers. And a very special thank you to 
Chairman Dorgan, Senator Domenici, the subcommittee and the 
staff for their strong commitment to flood control. Let me give 
you one specific point.
    Earmarks that were added by this committee are responsible 
for the recently completed construction of the Valley Park 
Project outside of St. Louis. This project was constructed just 
in time to protect 1,000 people, and almost $100 million in 
property, under flood water. Surely, we can agree that the 
extra $5 million earmarked by Congress to accelerate completion 
by 1 to 2 years on a project that cost almost $50 million, was 
well worth the effort and didn't come a moment too soon.
    But again, this year OMB has put us in a funding 
predicament. I'm disappointed that the administration continues 
to frustrate and under fund our efforts to modernize our water 
infrastructure.
    Despite the overwhelming and bipartisan support in Congress 
for the Water Resources Development Act, the President's budget 
does not provide money to update our Depression-era locks and 
dams. This is the most energy-efficient, economical way to 
transport commodities--both inputs coming up the river to 
agricultural areas, and the vitally important agricultural 
exports that go to the world market, that give us significant 
favorable balance of trade.
    This budget, presented to us, does not address our 
crumbling infrastructure, and provides no means to fix it. We, 
as a committee, as a Senate, must work together to address our 
navigation channels, and flood control. We must invest in the 
structures to keep our citizens safe, and the river 
transportation networks working.
    Given the flooding, and the disaster's impacts, Missourians 
need serious help to recover from the storms that we are 
enduring already this spring. Unfortunately, Missouri is not 
out of the woods yet, we have lakes near overflowing and levies 
weakened, and I looked at the weather map today, and it showed 
a solid sheet of rain all over the Midwest.
    We're in a state of repair, and at the same time, we're 
still under severe storm watches. I look to this committee to 
aid in providing supplemental funds for repair from the storms 
we've already had, and flood protection for storms Missouri 
continues to endure.
    On a side note, I would express my appreciation to the 
Corps for their creativity that has spared Missouri an 
additional man-made flood in the spring rise. I realize that 
this year the Corps did their best to alleviate the insult to 
an already-flooded State and we're grateful.
    However, in case any new reason is needed next year, you 
may be interested to know that the U.S. Geological Survey has 
completed peer-reviewed studies that a spring rise has no 
benefit to the pallid sturgeon. I wish somebody would 
understand that.
    In any event, I regret that Senator Murray and I have 
another hearing, so I will not be able to join with the 
chairman in the discussion of the Missouri River policy, which 
is always an interesting subject. We have a couple of areas of 
agreement, and even those we can't get through.
    But I look forward to working with you, Mr. Chairman, the 
committee and your staff, and I appreciate the good efforts of 
our witnesses here today, and please don't agree with me, 
because we need to keep your jobs.
    Senator Domenici. But listen, Senator, if you can't stay 
and represent your interests, I'm just sorry for you.
    Senator Bond. Well, Senator Domenici, you've heard these 
arguments so long you can--I deputize you to be my 
representative in the Missouri River basin.
    Senator Domenici. I don't want that.
    Senator Dorgan. We'll fix the Missouri River Management 
System, as soon as Senator Bond has left the room.
    Senator Bond. That's right.
    Senator Dorgan. Senator Johnson.

                    STATEMENT OF SENATOR TIM JOHNSON

    Senator Johnson. Chairman Dorgan and Ranking Member 
Domenici, thank you for calling this meeting. I will truncate 
my remarks.
    I'm very disappointed that the administration recommended 
cutting the VOR's Water and Energy Management and Development 
Account by 40 percent. This account funds several, ongoing 
regional and rural drinking water supply projects in my State. 
The Lewis and Clark Regional Water System and Mni Wiconi Rural 
Water System are the two largest. Their priority should be in 
completing these systems.
    Failing to budget any Federal funds for the Lewis and Clark 
Project delays construction completion dates, and adds further 
costs as material prices continue double-digit annual 
increases.
    The Corps of Engineers budget request falls short in 
prioritizing funds for the construction program. The 
shortcoming that I am hopeful that this committee will reverse, 
by providing additional resources for flood control and several 
works construction projects.
    In reviewing the budget request, I do want to highlight a 
positive outcome. I'm pleased that the Corps continues to 
request funds for the Missouri River Recovery Program.
    Chairman Dorgan, I'll conclude my statement at this point.
    Senator Dorgan. Senator Johnson, Thank you very much.
    Senator Bennett.

                 STATEMENT OF SENATOR ROBERT F. BENNETT

    Senator Bennett. Thank you very much, Mr. Chairman. I won't 
add to the litany that has been cited here. I do thank the 
witnesses for their appearance here, and I thank Commissioner 
Johnson for bringing along Robert Wolf--pardon me, Reed Murray, 
the Program Manager for the Central Utah Project Completion 
Act. That's very important to my State, and I appreciate his 
highlighting that by bringing that particular official along.
    And, I too, have another hearing I have to go to, I 
apologize for that. But, I'm grateful to our witnesses for the 
great work that they've done in the State of Utah, and to you 
for calling this hearing.
    Senator Dorgan. Senator Bennett, Thank you very much.
    Senator Reed.

                     STATEMENT OF SENATOR JACK REED

    Senator Reed. Well, thank you very much, Mr. Chairman. I 
briefly just want to welcome the witnesses.
    And particularly, General Van Antwerp who was a 
contemporary at West Point, it's good to see you here, Bob. And 
if you could pass on my great regards to Colonel Kurt Talken 
and Bobby Burn in the First District, they do a superb job, 
both the General and the Secretary--you should know that.
    I will be going to other hearings, but I want to get back 
and talk about issues of the Fox Point Hurricane Dam, and also 
the Woonsocket Levy Project.
    Thank you very much, gentlemen.
    Thank you, Mr. Chairman.
    Senator Dorgan. Secretary Woodley, we will begin with you, 
and then we will hear from General Van Antwerp, and then go to 
the Interior Department Secretary.
    Secretary Woodley, your entire statement will be part of 
the full record, and you may summarize. You may proceed.

                STATEMENT OF HON. JOHN PAUL WOODLEY, JR.

    Mr. Woodley. Thank you, Mr. Chairman.
    The President's budget for fiscal year 2009 annual Civil 
Works Program is $4.74 billion. In addition, the request 
includes $5.762 billion in fiscal year 2009 emergency 
appropriations for the Federal share of the additional funds 
needed to reduce the risk to the Greater New Orleans, Louisiana 
area, from storm surges that have a 1 percent annual chance of 
recurring.
    The budget for the Annual Civil Works Program proposes 
performance criteria to allocate funds among construction 
projects. These criteria give priority for funding for the 
projects that yield the greatest returns to the Nation, based 
upon objective performance criteria.
    The fiscal year 2009 construction performance criteria 
mirror those of the fiscal year 2008, except that priority is 
also accorded to projects that can be completed in fiscal year 
2009.
    For operation and maintenance of civil works projects, the 
fiscal year 2009 budget provides nearly $2.6 billion for the 
operation and maintenance account, and $163 million for the 
Mississippi Rivers and Tributaries Account.
    As anticipated at this time last year, the fiscal year 2009 
budget is based on enactment of proposed legislation to 
establish a lockage-based barge user fee, and to phase out the 
existing fuel tax. The proposed legislation was transmitted to 
the President of the Senate and the Speaker of the House of 
Representatives last Friday, April 4. Prompt enactment of this 
legislation is needed to address the declining balance in the 
Inland Waterways Trust Fund, which otherwise will run out of 
funds around the end of the 2008 calendar year.
    The budget provides $185 million for the Corps of Engineers 
share of the South Florida Everglades Restoration Program, 
which is the most ever budgeted or appropriated for the Corps 
in 1 year for these activities.
    The budget also provides $180 million for the Corps 
regulatory program, to protect wetlands and other waters of the 
United States. This is the same amount as in the budget and 
appropriation for fiscal year 2008, and represents a $55 
million increase since 2001.
    I'd like to turn now to the proposed budget for the 
emergency appropriation. The fiscal year 2009 budget proposes 
to authorize the New Orleans Area Hurricane and Storm Damage 
and Risk Reduction System to be constructed with the State of 
Louisiana, as a single, non-Federal cost share sponsor, and 
subsequently maintained and operated by the State. Based on 
statutory language proposed in the budget, the non-Federal 
sponsor would provide $1.5 billion for the non-Federal share of 
this work. The New Orleans area system would not only be 
higher, but also stronger than the pre-Hurricane Katrina 
system.
    I'm pleased to announce, Mr. Chairman, that on March 31, 
2008, the Department of Defense Inspector General issued a 
qualified audit opinion on both the 2006 and 2007 Civil Works 
Financial Statements. This is very significant, as it marks the 
first time a major component of the Defense Department has 
received an audit opinion of any kind, qualified or not.
    This achievement by the Corps of Engineers demonstrates 
exceptional stewardship on behalf of the taxpayers, and non-
Federal sponsors dollars, and the Army is extremely proud of 
the Corps.
    In summary, at $4.74 billion, the fiscal year 2009 Army 
Civil Works budget does not do all of the good things that the 
Corps could accomplish in 2009. It does, however, provide 
resources for the Civil Works Program, to pursue investments 
that will yield very good returns for the Nation in the future.
    Mr. Chairman, members of the subcommittee, this is the last 
time that I will have the privilege of appearing before the 
subcommittee to present the Army's Civil Works budget on behalf 
of President Bush. It has been a great pleasure and privilege 
to work with you.

                           PREPARED STATEMENT

    And it would be remiss of me not to mention, also, the 
privilege I've had in working with the excellent staff that 
serves the subcommittee. I don't believe that any subcommittee 
or any committee of any body anywhere in the world is better 
served than by the professional and capable staff--and 
extremely knowledgeable staff--that this subcommittee has the 
privilege of employing.
    [The statement follows:]
            Prepard 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 2009.
                                overview
    The fiscal year 2009 budget for Army Civil Works provides funding 
for development and restoration of the Nation's water and related 
resources within the 3 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 discretionary funding for the fiscal year 2009 annual program 
is $4.741 billion. This is $130 million less than the fiscal year 2008 
budget and $846 million less than Energy and Water Development 
appropriations for fiscal year 2008. Within the total Civil Works 
budget, $2.475 billion is for activities funded in the operation and 
maintenance (O&M) account. This is slightly higher than the funding 
level for operation and maintenance proposed in the President's fiscal 
year 2008 budget, which in turn was a substantial increase over prior 
budget or appropriation levels for comparable O&M activities.
    The budget also provides $5.761 billion in an fiscal year 2009 
emergency appropriations request for the Federal share of the 
additional funds needed to reduce the risk of storm surge damage to the 
greater New Orleans, Louisiana area. Based on statutory language 
proposed in the budget, the non-Federal sponsor would provide $1.527 
billion for the non-Federal share of this work. This proposal is 
discussed further below.
    A budget Five Year Development Plan (FYDP) is under development and 
will be provided to the relevant committees of Congress.
    Enclosure 1 displays the current estimate for the distribution of 
new discretionary funding among eight appropriation accounts; eight 
program areas; supervision and general administration of the Civil 
Works program; policy direction and oversight by the Army Secretariat; 
and five funding 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 2009 budget reflects a continuing maturation of the 
Army's performance-based approach to budgeting. Competing investment 
opportunities for studies, design, construction, and operation and 
maintenance were evaluated using multiple metrics. Objective 
performance criteria guided 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 example, the budget allocates operation and maintenance 
funding among 54 geographic areas based on USGS sub-watersheds. This 
approach will improve the overall performance of Civil Works assets by 
enabling managers within each of these regional areas to focus on their 
key facilities and address emerging needs.
    The focus on Civil Works program performance has a number of 
foundations. First, the 2004-2009 Civil Works Strategic Plan provided 
goals, objectives, and performance measures that are specific to 
program areas as well as some that are crosscutting. A new Civil Works 
Strategic Plan is under development for 2009-2014. Second, each program 
area has been assessed using the Program Assessment Rating Tool (PART). 
Progress to improve the performance measures was made on several 
programs during the past year. Summaries of all completed civil works 
program assessments can be found on the administration's new website, 
www.ExpectMore.gov. 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 $91 million for the 
Investigations account and $1 million for investigations in the 
Mississippi River and Tributaries account. The budget funds 65 studies 
and preconstruction engineering and design (PED) activities. We 
selected these for funding based on their likely performance. For 
instance, the projects funded for PED were those with benefit-to-cost 
ratios (BCRs) of 3.0 to 1 or higher.
    Within this $91 million, $10 million is for studies and PED under 
the Louisiana Coastal Area ecosystem restoration program and $10 
million more is for the science program that supports, and is an 
integral component of, this Corps effort to help protect and rebuild 
the ecosystem. In addition, $21 million is for other project-specific 
studies and design, $17 million is for research and development, and 
$33 million is for other coordination, data collection, and study 
activities.
    The administration urges the Congress to support the President's 
budget for the investigations program, which limits the number of 
proposed projects funded at the study or design stage. The Corps has a 
very large backlog of ongoing construction work. Adding to the number 
of projects heading for a construction start or to their funding will 
delay the completion of ongoing projects and realization of their 
benefits to the Nation. The enactment of the Water Resources 
Development Act of 2007 (WRDA 2007) has heightened this concern.
    The Civil Works budget includes $1 million to comply with the 
independent peer review requirements of section 2034 of WRDA 2007. This 
covers only the studies funded in the budget. If the Congress were to 
increase the number of studies or their funding, the Corps would likely 
need more than $1 million to comply with section 2034.
    Independent review previously was funded through individual study 
line items as study costs shared with the non-Federal sponsor. Under 
WRDA 2007, the costs of independent review are now fully Federal. In 
future budgets, we expect to include these costs under individual study 
line items after studies requiring section 2034 independent review are 
identified and accounting codes are set up to distinguish the fully 
Federal independent review costs from the other study costs, which the 
non-Federal sponsor will share.
    The fiscal year 2009 budget includes 2 new studies: The 
Investigations account includes $2 million for a high-priority study of 
the vulnerability of the United States to damage from flooding, 
including an assessment of the comparative risks faced by different 
regions of the United States. This study will provide background for a 
subsequent effort by policy officials to develop recommendations to 
improve existing Federal programs, authorities, and roles. The other 
new study is the Atchafalaya Basin Land Study in the Flood Control, 
Mississippi River and Tributaries account, for which the administration 
has repeatedly requested funding. I urge you to fund this study. It has 
a high priority because land acquisition is an important component of 
the overall flood damage reduction plan for this watershed. The fiscal 
year 2009 budget also specifically identifies $100,000 for Corps 
support to the efforts of the inter-agency committee on the Marine 
Transportation System, established by the President in the 2004 Ocean 
Action Plan. Costs to support the committee previously were included in 
the coordination with other agencies allocation in the investigations 
account.
Construction Program
    The budget provides $1.402 billion in the Construction account and 
$76 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 again proposes 
performance guidelines to allocate funds among construction projects. 
The guidelines give priority for funding to the projects that yield the 
greatest returns to the Nation, based upon objective performance 
criteria. The fiscal year 2009 guidelines mirror those for fiscal year 
2008, except that priority also is accorded to projects that can be 
completed in fiscal year 2009.
    Under the guidelines, the budget allocates funds among construction 
projects based primarily on these criteria: BCRs; contribution to 
reducing significant risk to human safety or to dam safety assurance, 
seepage control, or static instability correction concerns; capability 
of high performing projects to be completed in fiscal year 2009 in 
order to bring significant benefits online; and the extent to which 
projects 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 79 construction projects funded in the budget consist of: 11 
dam safety assurance, seepage control and static instability correction 
rehabilitation projects; 16 projects funded to address a significant 
risk to human safety (including 2 new deficiency correction projects); 
and 52 other projects (including 5 in the Mississippi River and 
Tributaries program).
Operation and Maintenance Program
    The fiscal year 2009 budget proposes $2.475 billion for the 
operation and maintenance account and $163 million for maintenance 
activities in the Mississippi River and tributaries account. The total 
amount is $16 million higher than the fiscal year 2008 budget for 
comparable activities.
    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.
    As in the fiscal year 2007 and 2008 budgets, the operation and 
maintenance program includes four activities that are directly related 
to the operation and maintenance of Corps projects, but previously were 
funded in the Construction program--compliance with the Endangered 
Species Act at operating projects; rehabilitation of existing projects; 
replacement of sand due to the operation and maintenance of Federal 
navigation projects; and construction of facilities, projects, or 
features (including islands and wetlands) to use materials dredged 
during Federal navigation operation and maintenance activities. The 
budget transfers responsibility for these activities to improve 
investment decisions on project operation and maintenance and better 
provide accountability and oversight for those decisions. For the 
inland navigation rehabilitation projects budgeted in the operation and 
maintenance account, one-half of the project funding would be derived 
from the Inland Waterways Trust Fund. Construction, replacement, and 
expansion of inland waterways projects continue to be budgeted in the 
Construction account.
    Like the budgets for the past 2 years, the fiscal year 2009 budget 
proposes to allocate operation and maintenance funding on a regional 
basis. Last year, the budget proposed allocation of funding by 21 
watersheds identified by the U.S. Geological Survey's watershed and 
sub-watershed identification system. This year, in order to more 
clearly identify the systems among which funding is allocated, the 
budget proposes to allocate funding among 54 systems. Within these 54 
systems, the justification materials allocate funding for illustrative 
purposes to flood and coastal storm damage reduction, commercial 
navigation, hydropower, stewardship, recreation, and water supply 
program areas. Funding operation and maintenance using this framework 
will increase efficiency in the operation and maintenance of Civil 
Works projects. Managers in the field will be better able to properly 
maintain key infrastructure, adapt to uncertainties, and address 
emergencies, as well as other changed conditions over the course of the 
fiscal year, while complying with congressional direction for the 
appropriations.
                       highlights--program areas
    The Army Civil Works program includes eight program areas; 
commercial navigation, flood and coastal storm damage reduction, 
environment, recreation, hydropower, water supply, emergency 
management, and the regulatory program. The budget also funds the 
supervision and general administration of the Civil Works program in 
the Corps headquarters and the eight division offices; and the policy 
direction and oversight for the program by the Office of the Assistant 
Secretary of the Army (Civil Works). Budget proposals for all areas are 
discussed below.
Flood and Coastal Storm Damage Reduction, and Emergency Management
    The fiscal year 2009 budget provides $1.322 billion for flood and 
coastal storm damage reduction and $58 million for emergency 
management.
    Among the 79 construction projects funded in the fiscal year 2009 
budget, 50 are for flood and coastal storm damage reduction, including 
11 dam safety and seepage control and static instability correction 
rehabilitations, 2 deficiency correction projects at St. Louis Flood 
Protection, Missouri and Wood River Levee, Illinois; and 29 other 
projects that address a significant risk to human safety or were 
selected based on their benefit-to-cost ratios.
    The budget for the emergency management program includes $40 
million in the Flood Control and Coastal Emergencies account to fund 
preparedness for flood and coastal emergencies and other natural 
disasters. This funding is needed in fiscal year 2009 to maintain and 
improve the Corps of Engineers ability to respond to disasters. 
Specifically, this funding would cover review and updating of emergency 
response plans, periodic exercises to test and evaluate plans, 
training, procurement of critical supplies and equipment, and pre-
disaster coordination with State and local governments and other 
Federal agencies. The fiscal year 2009 budget reflects the strong 
belief of the Army in the importance of providing regular funding for 
emergency preparedness, rather than relying on supplemental 
appropriations to finance emergency preparedness. The emergency 
management program also includes $6 million for the National Emergency 
Preparedness Program and $12 million for facility protection, both of 
which are funded in the operation and maintenance account. We continue 
to fund facility protection as a remaining item in the operation and 
maintenance account. In the past, we allocated these costs among the 
eight program areas. This year, we included these costs instead under 
the emergency management program area.
    The budget includes $14 million in multiple accounts for Actions 
for Change--a set of actions identified by the Chief of Engineers to 
aggressively incorporate the lessons learned from Hurricanes Katrina 
and Rita into the way the Corps plans, designs, constructs, and 
maintains its infrastructure. The program is being executed by four 
national teams. All actions are interrelated, but each of the four 
teams has one of the following focus areas: comprehensive systems 
approaches; risk-informed decisionmaking; risk communications; and 
professional and technical expertise. A common theme throughout the 
program is increased accountability for public safety. The Corps is 
working toward the goal of making these changes self-sustaining.
    The fiscal year 2009 operation and maintenance account includes $10 
million for the National Levee Inventory/Inspection and Levee Safety 
Program. These funds will be used to continue the national levee 
inventory, assessment, and database development that were begun with 
emergency supplemental appropriations of $30 million in fiscal year 
2006. Funds also will be used for administrative and travel costs of 
the National Levee Safety Committee established pursuant to title IX of 
the Water Resources Development Act of 2007. Title IX broadened the 
authority under which the Corps conducts the levee inventory program 
and is being implemented under the ongoing levee inventory and 
inspection program. The national levee inventory is an interagency 
effort to improve management of the Nation's flood and storm damage 
reduction infrastructure. The results of the national project inventory 
and risk-based project assessments will be linked to the Federal 
Emergency Management Agency's ongoing flood mapping program, as well as 
to the Corps levee rehabilitation and inspection program.
    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 2009 budget provides a total of $1.892 billion for 
the commercial navigation program area.
    The amount budgeted for inland waterway construction projects 
(construction, replacements, and expansions in the construction 
account, and rehabilitations in the operation and maintenance account) 
is about $326 million, which includes funding to continue 14 inland 
waterway projects; 3 seepage and static instability correction 
rehabilitation projects; completion of 5 projects; and continuation of 
construction on 5 other projects. Half of the funding for these inland 
waterways investments, about $167 million, would be derived from the 
Inland Waterways Trust Fund, reflecting both concurrent financing of 50 
percent of construction costs on most projects and rebalancing of the 
proportion where prior expenditures from the general fund of the 
Treasury exceeded 50 percent.
    The fiscal year 2009 budget is based on enactment of proposed 
legislation to establish a lockage-based barge user fee and to phase 
out the existing diesel fuel tax for the inland waterways. The prompt 
enactment of such legislation is needed to address the declining 
balance in the Inland Waterways Trust Fund, which otherwise will run 
out of funds around the end of the 2008 calendar year, and to support 
ongoing and future inland waterways projects. The funding in the Inland 
Waterways Trust Fund, which comes from the diesel fuel tax, will not be 
sufficient after fiscal year 2008 to support needed levels of 
investment in these waterways.
    Enactment of the administration's legislative proposal would ensure 
that the commercial users of the Corps locks continue to cover their 
share of project costs. The amount of the user fee would be tied to the 
level of spending for inland waterways construction, replacement, 
expansion and rehabilitation work. The proposed legislation will be 
transmitted to Congress shortly.
    The budget includes $170 million to construct channel and harbor 
projects.
    The budget focuses navigation operation and maintenance funding of 
$1.375 billion on those waterway segments and commercial harbors that 
support high volumes of commercial traffic, such as the heavily-used 
Mississippi and Ohio Rivers and the Illinois Waterway. The budget also 
funds maintenance of harbors that support significant commercial 
fishing, subsistence, safety, harbor of refuge, national security, or 
public transportation benefits.
    The Corps continues development of techniques to identify and 
compare the marginal impacts on the Nation's waterborne commerce of 
varying maintenance levels for coastal channels and harbors. The fiscal 
year 2009 budget provides for $729 million to be appropriated from the 
Harbor Maintenance Trust Fund for operation and maintenance. The growth 
of the trust fund balance and ways to address this balance are being 
discussed within the administration. We will continue to work within 
the administration to develop policies to effectively use the Harbor 
Maintenance Trust Fund.
    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 $511 million for environmental 
activities overall, including $286 million for aquatic ecosystem 
restoration. 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.
    Within the $286 million for aquatic ecosystem restoration, $185 
million is for the Corps of Engineers share of the South Florida 
Everglades Ecosystem Restoration Program, which is the most ever 
budgeted or appropriated for the Corps in 1 year for these activities. 
This level of funding for the Corps is an increase of $54 million, or 
41 percent, compared to the fiscal year 2008 enacted level. The 
increase reflects the program's priorities for 2009--which include more 
funding for the Modified Water Deliveries to Everglades National Park 
(Mod Waters) project, a key element of this effort that both the 
National Park Service and the Corps are funding (+$40 million); and 
funding to restore a 90 square mile area west of the Everglades known 
as Picayune Strand, which will provide habitat suitable for the 
endangered Florida panther and other species (+$24 million). The budget 
for this program also emphasizes continued construction of the 
Kissimmee River restoration effort; and studies and design work under 
the Comprehensive Everglades Restoration Plan, or CERP. Finally, the 
budget also continues construction of the Everglades and South Florida 
Ecosystem Restoration ``Critical Projects,'' and the South Dade County 
(C-111) and West Palm Beach Canal (C-51 & STA 1-E) Central and Southern 
Florida (C&SF) projects.
    The budget provides $20 million for the Upper Mississippi River 
System Environmental Management Program and $20 million for the 
Louisiana Coastal Area restoration effort, including $10 million for 
its important Science Program, which will assist the State and Federal 
managers of the LCA Ecosystem Restoration Program by providing science 
support aimed at improving implementation. The Science Program will 
inform and guide the program by reducing uncertainties and insuring 
that effective tools and processes are available for use by the project 
delivery team.
    The budget includes $95 million for environmental stewardship. The 
Corps administers lands and waters covering 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 completion of remedial action at one site (Linde Air 
Products Soil operable unit) and support continued progress toward 
completion of remedial actions at a number of other FUSRAP sites.
Regulatory Program
    The fiscal year 2009 budget provides $180 million for the Corps 
Regulatory Program to protect wetlands and other waters of the United 
States. This is the same as the amount in both the budget and 
appropriations for fiscal year 2008, and represents a $55 million 
increase since 2001. The funding will be used for permit processing, 
enforcement and compliance actions, and jurisdictional determinations, 
including the significant additional field documentation, coordination 
and evaluation work associated with the Supreme Court's Carabell and 
Rapanos decisions.
    Investing in the Regulatory Program has a win-win result, since it 
protects valuable aquatic resources while enabling over $225 billion in 
economic development to proceed annually. The Corps will also use the 
requested funding to develop and implement improvements such as 
electronic permit applications and data sharing with other agencies and 
the public, consistent with sections 2017 and 2040 of WRDA 2007.
Recreation
    The fiscal year 2009 budget provides $270 million for recreation 
operations and related maintenance. The budget re-proposes the Corps of 
Engineers recreation modernization initiative, which first was 
developed as part of the fiscal year 2006 and fiscal year 2007 budgets. 
This initiative, which requires legislation to implement, would allow 
the Corps to upgrade and modernize its recreation facilities through an 
expansion of the current fee structure. It would also enable the Corps, 
working at the national, State, and local levels, to pursue voluntary 
public/private partnerships and other means to help finance the 
recreation program.
Hydropower
    Hydropower is a renewable source of energy. The Civil Works program 
is the Nation's largest producer of hydroelectric energy. The Corps 
provides one-quarter of the Nation's hydroelectric power generation 
capacity and satisfies 3 percent of the Nation's total energy needs.
    The fiscal year 2009 budget provides $319 million for hydropower. 
This investment will help to reduce the forced outage rate, which 
remains well above the industry average. In addition, the 4 ongoing 
replacement projects, once completed, will produce enough power to 
electrify 37,000 homes and reduce carbon dioxide emissions into the 
atmosphere by 190,000 metric tons.
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 $6 million for this program under the 
operation and maintenance account. These costs can be broken into 5 
categories: costs to manage water supply contracts and to operate and 
maintain specific water supply facilities; ongoing water reallocation 
studies; the National Portfolio assessment of water reallocation 
possibilities; the allocated share of costs for compliance with the 
Endangered Species Act; and the allocated share of other project joint 
costs. The water supply program manages 307 water supply agreements 
that cover 7.2 million acre-feet of storage space in 136 of the Corps' 
multiple purpose reservoir projects. This storage space has an assigned 
repayment value of $9.8 billion. These costs are repaid directly to the 
U.S. Treasury by the water users. The opportunities that are being 
identified through the National Portfolio assessment to reallocate 
storage space in existing reservoirs can assist in addressing unmet 
demand for municipal and industrial water supply without building 
additional projects.
Management Expenses of the Army Corps of Engineers
    The fiscal year 2009 budget provides $177 million for the Expenses 
account to cover the costs of the Army Corps of Engineers Headquarters, 
Major Subordinate Commands or Divisions, and national support Corps 
offices such as the Humphreys Engineer Center Support Activity, the 
Institute for Water Resources, and the Finance Center.
Army Secretariat Policy Direction and Oversight
    The fiscal year 2009 budget includes $6 million for the Office of 
the Assistant Secretary of the Army (Civil Works). The Assistant 
Secretary of the Army (Civil Works) has oversight responsibility on 
behalf of the Secretary of the Army for all aspects of the Civil Works 
program of the Army Corps of Engineers; for the Army Cemeterial 
Expenses budget and program for Arlington National Cemetery and the 
Soldiers' and Airmen's Home National Cemetery; for reimbursable support 
by the Army Corps of Engineers for other domestic agencies; and for all 
international activities of the Army Corps of Engineers except those 
directly in support of U.S. forces overseas. This account finances the 
personnel and other direct costs of the Assistant Secretary's office in 
the energy and water development appropriation, consistent with 
recently enacted appropriations for this office.
            protection of the metropolitan new orleans area
    In addition to fiscal year 2009 regular appropriations for the 
Civil Works program, the fiscal year 2009 budget recommends enactment 
of fiscal year 2009 emergency appropriations of $5.761 billion for the 
remaining Federal share of the New Orleans Area Hurricane and Storm 
Damage and Risk Reduction System (HSDRRS), which is designed to reduce 
the risk to the greater New Orleans, Louisiana, area from storm surges 
that have a 1 percent annual chance of occurring and to improve 
internal drainage; to restore and complete construction of hurricane 
and storm damage reduction features in surrounding areas to previously 
authorized levels of protection; and to incorporate certain non-Federal 
levees into the Federal system. The fiscal year 2009 budget also 
proposes to authorize the HSDRRS to be constructed with the State of 
Louisiana as the single non-Federal cost-sharing partner and 
subsequently maintained and operated by the State. Pre-Katrina, the 
HSDRRS was built as a collection of separately authorized projects, 
designed with differing standards, subject to differing requirements 
for non-Federal cost-sharing, and managed by different local entities.
    The new HSDRRS system will be not only higher, but also stronger 
than the pre-Hurricane Katrina system. Armoring of critical elements 
will improve resilience during storm events. New pump stations, water 
control structures, and floodgates will add perimeter protection to 
reduce the threat of storm surges from outfall canals and navigation 
channels. Completing the Southeast Louisiana urban drainage project 
within the geographic perimeter of the Lake Pontchartrain and Vicinity 
and West Bank and Vicinity projects will enhance the effectiveness of 
interior drainage systems.
    Based on the proposed statutory language included in the 
President's budget, local entities would be responsible for 35 percent 
of the cost of the Southeast Louisiana project located within the 
geographic perimeter of the Lake Pontchartrain and Vicinity and West 
Bank and Vicinity projects, and for 35 percent of the increment of 
levee raises and other enhancements needed to the Lake Pontchartrain 
and Vicinity and West Bank and Vicinity projects above currently 
authorized levels to reduce the risk to the greater New Orleans area 
from storm surges that have a 1 percent annual chance of occurring. 
Local entities would also be responsible for 100 percent of the 
operation, maintenance, repair, replacement, and rehabilitation cost.
                        other budget highlights
General Provisions
    The budget includes proposed statutory language to authorize 
continuation of limits on reprogramming with certain proposed changes; 
to replace the continuing contract authority of the Corps with multi-
year contracting authority patterned after the authority available to 
other Federal agencies; and to prohibit committing funds for ongoing 
and new contracts beyond the appropriated amounts available, including 
reprogramming.
Improved Cost Estimating
    With my full support, the Chief of Engineers is undertaking several 
initiatives to strengthen the Corps performance in project cost 
estimating. The Chief will discuss these initiatives in detail in his 
statement.
                water resources development act of 2007
    Upon passage of WRDA 2007 on November 7, 2007, the Chief of 
Engineers and I established a joint team to oversee the implementation 
of this lengthy, complex, and costly act. We have designated a senior 
Corps policy analyst to lead our joint efforts. I meet at least bi-
weekly with the joint WRDA implementation team to review and approve 
guidance for major policy and project provisions of WRDA.
    The purpose of implementation guidance is to ensure a common 
understanding of the policies and procedures that will be used to meet 
the requirements of the law. Provisions that require development of 
implementation guidance are being identified and prioritized, and the 
writing of the guidance is underway. Implementation guidance for those 
provisions directly affecting work within the Divisions and Districts 
is being developed in consultation with the appropriate District, 
Division, and Headquarters Regional Integration Team. Due to the large 
number of provisions in the law, it will take time to issue guidance on 
each of the provisions. Priority for implementation guidance is being 
given to national policy provisions (mostly in title II) and to those 
project and program provisions where funds are currently appropriated.
    Following are some examples of WRDA provisions receiving priority 
for implementation guidance:
  --Section 2003--Written Agreements for water resources projects.
  --Section 2027--Fiscal Transparency Report.
  --Section 2031--Water Resources principles and guidelines.
  --Section 2032--Water Resources Priorities Report.
  --Section 2033--Planning.
  --Section 2034--Independent Peer Review.
  --Section 2035--Safety Assurance Review.
  --Section 2036--Mitigation for fish and wildlife and wetlands losses.
  --Title VI--Florida Everglades.
  --Title VII--Louisiana Coastal Area.
  --Title IX--National Levee Safety Program.
    Working through the joint implementation team, we are making 
excellent progress in implementation strategies for the significant 
policy provisions and numerous individual project provisions.
                     president's management agenda
    The Army Civil Works program is pursuing 5 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 the 
following website: http://www.whitehouse.gov/results/agenda/
scorecard.html.
    For the first quarter of the 2008 fiscal year, the scorecard rates 
the Corps status as red on one initiative, yellow on four, and green on 
one. I am pleased that the Corps is rated green on progress on all six 
initiatives. The Corps has worked diligently to achieve these ratings, 
and I am proud of their efforts. The Army is hopeful that the Corps of 
Engineers will receive an audit opinion in the very near future from 
the Inspector General of the Department of Defense for its fiscal year 
2006 and 2007 Civil Works financial statements. This would be the first 
time ever that a major component of the Defense Department has received 
an audit opinion. The opinion is expected to be qualified, and it is 
anticipated that the auditors will recommend a number of areas that 
need improvement. With a qualified opinion in hand and this guidance 
from the DOD Inspector General, the Army has every expectation that the 
Corps can achieve an unqualified audit opinion on its fiscal year 2008 
financial statements.
                               conclusion
    In developing this budget, the administration made explicit choices 
based on performance. The sustained level of O&M funding, transfer of 
activities from construction to O&M, emphasis on construction projects 
based on their returns, and focus on preparedness for flood, hurricane, 
and other natural disasters, for example, all reflect a performance-
based approach.
    At $4.741 billion, the fiscal year 2009 Army Civil Works annual 
budget provides the resources for the Civil Works program to pursue 
investments that will yield good returns for the Nation in the future. 
With the proposed $5.761 billion in fiscal year 2009 emergency 
appropriations, the Corps can also complete the Federal share of work 
necessary to significantly reduce the risk of storm surge damage to the 
greater New Orleans area.
    This 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 2009 budget for 
the Civil Works program of the Army Corps of Engineers. This is the 
last time I will appear before this subcommittee to present the Civil 
Works budget on behalf of President Bush. It has been my pleasure 
working with this subcommittee.

  ENCLOSURE 1.--DEPARTMENT OF THE ARMY, CORPS OF ENGINEERS--CIVIL WORKS
                 ANNUAL BUDGET, FISCAL YEAR 2009 SUMMARY
------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Requested New Appropriations for Annual Program by
 Account:
    Investigations.....................................     $91,000,000
    Construction.......................................   1,402,000,000
    Operation and Maintenance..........................   2,475,000,000
    Regulatory Program.................................     180,000,000
    Flood Control, Mississippi River and Tributaries...     240,000,000
    Expenses...........................................     177,000,000
    Office of the Assistant Secretary of the Army             6,000,000
     (Civil Works).....................................
    Flood Control and Coastal Emergencies..............      40,000,000
    Formerly Utilized Sites Remedial Action Program....     130,000,000
                                                        ----------------
      TOTAL............................................   4,741,000,000
                                                        ================
Requested New Appropriations by Program Area:
    Commercial Navigation..............................   1,892,000,000
        (Inland and Intracoastal Waterways)............    (931,000,000)
        (Channels and Harbors).........................    (961,000,000)
    Flood and Coastal Storm Damage Reduction...........   1,322,000,000
        (Flood Damage Reduction).......................  (1,295,000,000)
        (Coastal Storm Damage Reduction)...............     (27,000,000)
    Environment........................................     511,000,000
        (Aquatic Ecosystem Restoration)................    (286,000,000)
        (FUSRAP).......................................    (130,000,000)
        (Stewardship)..................................     (95,000,000)
    Hydropower.........................................     319,000,000
    Recreation.........................................     270,000,000
    Water Supply.......................................       6,000,000
    Emergency Management...............................      58,000,000
        (Flood Control and Coastal Emergencies)........     (40,000,000)
        (National Emergency Preparedness)..............      (6,000,000)
        (Remaining Items Operation and Maintenance)....     (12,000,000)
    Regulatory Program.................................     180,000,000
    Oversight and Management...........................     183,000,000
                                                        ----------------
      TOTAL............................................   4,741,000,000
                                                        ================
Sources of New Appropriations:
    General Fund.......................................   3,844,000,000
    Harbor Maintenance Trust Fund......................     729,000,000
    Inland Waterways Trust Fund........................     167,000,000
    Disposal Facilities User Fees......................       1,000,000
                                                        ----------------
      TOTAL............................................   4,741,000,000
                                                        ================
Additional New Resources:
    Rivers and Harbors Contributed Funds...............     400,000,000
    Coastal Wetlands Restoration Trust Fund............      84,000,000
    Permanent Appropriations...........................      17,000,000
                                                        ----------------
      TOTAL............................................     501,000,000
------------------------------------------------------------------------


                                              ENCLOSURE 2.--DEPARTMENT OF THE ARMY, CORPS OF ENGINEERS--CIVIL WORKS ANNUAL BUDGET, FISCAL YEAR 2009
                                                                   [Crosscut Between Appropriation Accounts and Program Areas]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Aq. Ec.                                              Water        Emerg.       Regul.
                                       Navigation  Flood/Storm   Recreation    Restor.    Stewardship    FUS-RAP     Hydropower     Supply       Mgmt.        Prog.     Ovrsgt/Mgmt     TOTAL
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Investigations......................           20           36  ...........           35  ...........  ...........  ...........  ...........  ...........  ...........  ...........           91
Construction........................          487          627  ...........          245  ...........  ...........           43  ...........  ...........  ...........  ...........        1,402
Operation & Maint...................        1,346          482          255            2           90  ...........          276            6           18  ...........  ...........        2,475
MR&T-I..............................  ...........            1  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........            1
MR&T-C..............................           10           62  ...........            4  ...........  ...........  ...........  ...........  ...........  ...........  ...........           76
MR&T--O&M...........................           29          114           15  ...........            5  ...........  ...........  ...........  ...........  ...........  ...........          163
FUSRAP..............................  ...........  ...........  ...........  ...........  ...........          130  ...........  ...........  ...........  ...........  ...........          130
FC&CE...............................  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........           40  ...........  ...........           40
Regulatory..........................  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........          180  ...........          180
Expenses............................  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........          177          177
Office of the ASA(CW)...............  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........            6            6
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
      TOTAL.........................        1,892        1,322          270          286           95          130          319            6           58          180          183        4,741
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

 enclosure 3.--department of the army, corps of engineers--civil works 
      budget fiscal year 2009 construction performance guidelines
    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).
    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 and to projects where the Corps can 
complete physical construction of the project and/or related 
administrative activities in the budget year.
    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.
    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.
    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.
    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. Secretary Woodley, thank you very much for 
your testimony.
    Next we will hear from Lieutenant General Van Antwerp. 
General.
STATEMENT OF LIEUTENANT GENERAL ROBERT VAN ANTWERP, 
            CHIEF OF ENGINEERS
    General Van Antwerp. Thank you, Mr. Chairman, distinguished 
members of the committee.
    Senator Dorgan. Is that turned on, by the way?
    General Van Antwerp. I didn't push it hard enough, there I 
am. I'm with you.
    Thank you, Mr. Chairman, distinguished members of the 
subcommittee.
    I'm the 52d Chief of Engineers, I guess if you were there 
for all of us, you'd be over 200 years old, and you're still a 
young man. You've worked with 11 Chiefs, I'm proud to be the 
11th or 12th, here.
    Senator Domenici. Young man?
    General Van Antwerp. The President's budget is a 
performance-based budget. It reflects a focus on projects and 
activities that provide the highest returns--economic, 
environmental, and address significant contributions to safety.
    It allocates funding for 79 projects overall, it includes 
11 dam safety projects, 16 life safety, and it completes 12 
projects in fiscal year 2009.
    The greatest part of the budget, as expected, supports the 
Nation's navigation network. We are an expeditionary Corps, we 
have about 800 people deployed today, we have 4 districts in-
theater, Gulf Region Division, with the north, central and the 
south districts, and a district in Afghanistan. So, we covet 
your prayers for our folks deployed, and who are doing the 
heavy lifting every day overseas.

                           PREPARED STATEMENT

    We have a commitment to being good stewards of what you 
give us for continuous improvement, and I would just like to 
thank you for the opportunity to appear before you today, and I 
look forward to your questions.
    Thank you, sir.
    [The statement follows:]
      Prepared Statement of Lieutenant General Robert Van Antwerp
    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 2009 budget for the United 
States Army Corps of Engineers' Civil Works Program.
    My statement covers the following 4 topics:
  --Summary of fiscal year 2009 Program budget;
  --Construction Program;
  --Cost Engineering Improvements; and
  --Value of the Civil Works Program to the Nation's Economy, and to 
        the Nation's Defense.
               summary of fiscal year 2009 program budget
Introduction
    The fiscal year 2009 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 $5.242 billion, consisting of discretionary 
funding of $4.741 billion and mandatory funding of $501 million. The 
Reimbursed Program funding is projected to involve an additional $2 
billion to $3 billion. In addition, the budget requests $5.761 billion 
of emergency funding for continuing efforts to improve storm protection 
for the greater New Orleans area.
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 program managers more 
flexibility to properly maintain our key facilities. The budget 
incorporates objective performance-based metrics for the construction 
program, funds the continued operation of commercial navigation and 
other water resource infrastructure, provides significant 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 an expanded fee structure and stronger partnerships, 
in support of modernization. Additionally, it emphasizes the basic 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. Rather than develop their own internal workforce to oversee 
large design and construction projects, these agencies rely on Corps of 
Engineers capabilities. Such intergovernmental cooperation is effective 
for agencies and the taxpayer by using the skills and talents that we 
bring to our Civil Works and Military Program missions. The work is 
principally technical oversight and management of engineering, 
environmental, and construction contracts performed by private sector 
firms, and is totally financed by the Agencies we service.
    Currently, we provide reimbursable support for about 70 other 
Federal agencies and several State and local governments. Total 
reimbursement for such work in fiscal year 2009 is projected to be $2.0 
billion to $3.0 billion. The exact amount will depend on assignments 
received from the agencies.
                          construction program
    The goal of the construction program is to produce as much value as 
possible for the Nation from available funds. Our fiscal year 2009 
budget of $1.478 billion (including $76 million under the Mississippi 
River and Tributaries program) 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 79 construction projects, including 11 other 
dam safety assurance, seepage control, and static instability 
correction projects, 16 projects that address a significant risk to 
human safety, and 52 other projects.
    The budget uses objective performance measures to establish 
priorities among projects and, through a proposed statutory change in 
Corps contracting practices, would also increase control over future 
costs. The performance measures used include the benefit-to-cost ratios 
for projects with economic outputs; and, for aquatic ecosystem 
restoration projects, 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. The selection 
process also gives priority to dam safety assurance, seepage control, 
static instability correction, and to projects that address a 
significant risk to human safety. Under each of these criterions, 
resources are allocated based on performance. This approach 
significantly improves the realization of benefits to the Nation from 
the Civil Works construction program and will improve overall program 
performance by allowing the Nation to realize the benefits of the 
projects with the best net returns (per dollar invested) sooner.
Maintenance Program
    The facilities owned and operated by, or on behalf of, the Corps of 
Engineers 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 maintenance is becoming 
more expensive as this infrastructure ages.
    The operation and maintenance (O&M) program for the fiscal year 
2009 budget includes $2.638 billion (including $163 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 completed works owned or 
operated by the Corps of Engineers, including administrative buildings 
and laboratories. This program includes, for example, significant 
funding for our 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 
coastal projects, and operation of structures and other facilities, as 
authorized in the various River and Harbor, Flood Control, and Water 
Resources Development Acts.
                     cost engineering improvements
    The Corps has implemented some cost engineering improvements in an 
effort to ensure the development of quality project estimates in 
support of our Civil Works customers and partners for the successful 
accomplishment of projects. Three initiatives have been implemented 
that will provide more reliable project recommendations at the 
feasibility phase of the project by developing project cost 
contingencies using a standard cost risk analysis program. Cost risk 
analysis is the process of identifying and measuring the cost impact of 
project uncertainties and risks on the estimated total project cost.
    The first initiative mandates that the National Planning Centers of 
Expertise coordinate with the Cost Engineering Directory of Expertise 
at the Walla Walla District for independent review of cost estimates, 
and include contingencies in all decision documents requiring 
Congressional authorization. This approach will provide consistency in 
business practices and in the use of cost engineering tools.
    The second initiative, which went in effect on October 1, 2007, 
requires that Corps project delivery teams conduct a cost risk analysis 
to develop contingencies for Civil Works total project cost estimates 
of all decision documents requiring Congressional authorization for 
projects exceeding $40 million.
    The third initiative requires that project managers and their 
project delivery teams use project risk management principles and 
methods in developing a project risk management plan that includes a 
risk assessment and analysis and a risk response plan to support the 
cost risk analysis. Together the project risk management plan along 
with the cost risk analysis will produce a defensible assessment of the 
Civil Works total project cost estimate. This gives the management team 
an effective tool to assist in managing the planning study and will 
assist decisionmakers in making project recommendations.
    The Corps will be incorporating lessons learned into its cost 
estimating practices on an ongoing basis. Our goal is to improve the 
accuracy of our cost estimates much earlier in the development of a 
proposed project--at the project formulation stage--in order to provide 
greater assurance in determining whether the alternatives that we are 
exploring are highly cost-effective.
  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, Corps of Engineers 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 damage from 
future storms to people and communities.
    The budget also includes a 2009 Emergency Appropriation in the 
amount of $5.761 billion for the Federal Share of additional funds 
needed to provide risk reduction from hurricane and storm surges for 
the greater New Orleans, Louisiana, area. These funds will be used to 
restore and complete construction of hurricane and storm damage risk 
reduction features into the Federal System. The budget also proposes 
that the existing systems be authorized as a single, integrated 
project, and that cost-shares of this re-authorized project be made 
consistent with cost-shares that are applied nationally.
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.
    I also want to recognize the many Corps of Engineers civilians--
each of whom is a volunteer--and Soldiers who are providing engineering 
expertise, quality construction management, and program and project 
management in other 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 Iraq, the Gulf Region Division has overseen the initiation of 
more than 4,300 reconstruction projects valued in excess of $6.5 
billion. More than 500 projects valued at $2.6 billion are ongoing. 
These projects provide employment and hope for the Iraqi people.
    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. We're committed to change that ensures an 
open, transparent, and performance-based Civil Works Program.
    Thank you, Mr. Chairman and members of the subcommittee. This 
concludes my statement.

    Senator Dorgan. General, thank you very much, we appreciate 
your testimony as well.

                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

STATEMENT OF KAMERAN ONLEY, ACTING ASSISTANT SECRETARY 
            FOR WATER AND SCIENCE
ACCOMPANIED BY:
        ROBERT W. JOHNSON, COMMISSIONER
        REED MURRAY, DIRECTOR, CENTRAL UTAH PROJECT COMPLETION ACT 
            OFFICE
        ROBERT W. WOLF, DIRECTOR, PROGRAM AND BUDGET, BUREAU OF 
            RECLAMATION
    Senator Dorgan. Secretary Onley.
    Ms. Onley. Mr. Chairman and Mr. Domenici and members of the 
subcommittee, thank you for the opportunity to appear before 
you in support of the President's fiscal year 2009 budget 
request for the Bureau of Reclamation and the Central Utah 
Project Completion Act.
    With me today is Bob Johnson, the Commissioner of the 
Bureau of Reclamation, and we also have Reed Murray, the 
Director of the Central Utah Project Completion Act Office with 
us here, if you have any questions on that program.
    I've submitted written testimony which presents a detailed 
summary of the Department's appropriation request. Today I'd 
like to highlight the 2009 Water for America initiative, and 
touch briefly on Reclamation and the Central Utah Project 
request before turning to Commissioner Johnson for more 
detailed discussion on the Reclamation request.
    The Department of the Interior's mission is complex and 
multi-faceted. Our program and mission stretch from the North 
Pole to the South Pole, and across 12 time zones, from the 
Caribbean to the Pacific Rim. Nearly every American lives 
within a 1 hour drive of lands or waters managed by the 
Interior Department.
    Our 2009 budget of $10.76 billion, benefits every American 
each day, in some way. The 2009 budget continues investments 
that Congress provided in 2008 for our top priorities. The 2009 
budget also addresses other nationally significant issues 
within a budget that maintains the President's commitment to 
fiscal restraint.
    The 2009 budget builds on our 2008 budget, which charted a 
course for excellence for our national parks, broadened our 
planning horizons to achieve healthy lands while securing 
energy for the Nation, and puts the needs of Indian country 
center stage. We continue these commitments, and are also 
proposing four new initiatives in 2009, to address water 
crisis, managing our oceans, reverse the dramatic decline in 
wild birds, and protect our borders. These initiatives have 
addressed some of the most critical issues facing this Nation.
    The Water for America initiative would ensure that 
communities have a reliable water supply for the 21st century. 
Last year, the National Science and Technology Council reported 
that abundant supplies of clean, fresh water can no longer be 
taken for granted.
    Our water scarcity is not just a problem for the West; it 
is a problem for the Nation. We are seeing prolonged droughts 
and water conflicts in such areas as the Southeast, where 
people are used to having unlimited water.
    Through this initiative, the Bureau of Reclamation and the 
U.S. Geological Survey will help communities secure reliable 
water supplies through information, technologies and 
partnerships.
    With regard to the programs under the jurisdiction of this 
subcommittee, the 2009 request for the Bureau of Reclamation 
and the Central Utah Project Completion Act is $961.3 million. 
I will defer to Commissioner Johnson to discuss the details of 
the Reclamation request, but note that the 2009 proposal of 
$919.3 million supports managing, developing and protecting 
water and related resources in an environmentally and 
economically sound manner.
    Reclamation continues to strive for the highest levels of 
service to the American people, and for the highest levels of 
management excellence.
    The request for the implementation of the Central Utah 
Project Protection Completion Act is $42 million. The majority 
of the fiscal year 2009 funding will continue to continue 
construction of the Utah Lakes System, the last component of 
the Central Utah Project which, when complete, will provide 
much-needed water for Salt Lake and Utah counties.
    The Central Utah Project anticipates ongoing construction 
of the Spanish Fork Canyon Pipeline, the return of two more of 
the high lakes in the Uinta Mountains, and natural conditions, 
and implementation of the East Juab Water Efficiency Project, 
to conjunctively use ground water and surface water.
    While here, I would be remiss if I did not mention, the 
Department strongly supports the President's $50 million 
request that is pending before this subcommittee for the Army 
Corps of Engineers work to implement the modified waters 
delivery to Everglades National Park, which Congress authorized 
in 1989. Mod waters is intended to restore the natural flow of 
water to Everglades National Park and thereby restores park 
habitat which has been adversely affected by the operations of 
the last 5 decades of Army Corps Central and Southern Florida 
Project.
    The funds for the Army Corps, when combined with the funds 
requested for the National Park Service, will allow to continue 
the work on this project and bring it closer to completion. We 
have just completed--with the Corps of Engineers--an evaluation 
of a key component related to bridging in the Tamiami Trail, 
U.S. Highway 41, which serves as the barrier to restore flow. 
We appreciate your favorable support for this project, which is 
supported by the State of Florida, and is a necessary 
prerequisite for the Everglades restoration work.
    In summary, the Department's 2009 budget will continue 
efforts to improve our national parks, protect our wildlife in 
its habitat, and make investments in Indian country for safe 
communities and Indian education. In addition, we will help 
communities address water and supply needs, conserve wild birds 
and ocean resources, improve the safety of public lands along 
the border for employees and visitors, and continue to address 
other ongoing mission priorities.

                           PREPARED STATEMENT

    I appreciate the strong support from this committee has 
given to both the Department--to the Department, and in 
particular, the Bureau of Reclamation, and to the Central Utah 
Project, and I look forward to working with you to advance the 
goals of these programs.
    Thank you.
    [The statement follows:]
                  Prepared Statement of Kameran Onley
    Mr. Chairman, Senator Domenici, and members of this subcommittee, 
it is a pleasure to appear before this subcommittee today to discuss 
the President's 2009 budget for the Department of the Interior and to 
update you on our progress in implementing our 2008 programs.
    The Department of the Interior's mission is complex and 
multifaceted. Our programs and mission stretch from the North Pole to 
the South Pole and across 12 time zones, from the Caribbean to the 
Pacific Rim. Our extensive mandate rivals any Government agency in its 
breadth and diversity--and its importance to the everyday lives of 
Americans. In a recent poll of Federal agencies, the Department of the 
Interior received the highest rating for its public service.
    Nearly every American lives within a 1 hour drive of lands or 
waters managed by the Interior Department. With 165,000 facilities at 
2,400 locations, Interior is second only to the Department of Defense 
in managed assets. The Department's law enforcement agents, over 4,000, 
comprise the third largest civilian law enforcement presence in the 
Federal Government.
    Approximately 31 million people in the West rely on drinking water 
provided through water systems managed by the Department. Interior 
irrigation systems deliver water to farmers who generate over half of 
the Nation's produce.
    The lands and waters we manage generate one-third of the Nation's 
domestic energy production. Managing these areas, Interior generates 
$18 billion annually in revenues that exceeds Interior's $10.7 billion 
appropriated budget.
    Interior fulfills special responsibilities to Native Americans as 
the manager of one of the largest land trusts in the world--over 10 
million acres owned by individual Indians and 46 million acres held in 
trust for Indian Tribes. In addition to lands managed in trust, the 
Department manages over $3.3 billion of funds held in over 1,800 trust 
accounts for approximately 250 Indian tribes and over 370,000 open 
Individual Indian Money accounts. Interior also operates one of only 
two school systems in the Federal Government, the Bureau of Indian 
Education school system. The Department of Defense operates the other.
                      overview of the 2009 budget
    The 2009 budget request for current appropriations is $10.7 
billion, $388.5 million or 3.5 percent below the level enacted by 
Congress for 2008, excluding fire supplemental funding, but $59 million 
above the amount requested in the 2008 President's budget. Permanent 
funding that becomes available as a result of existing legislation 
without further action by the Congress will provide an additional $6 
billion, for a total 2009 Interior budget of $16.7 billion. Including 
permanent funding and excluding 2008 fire supplemental funding, the 
2009 budget for Interior is slightly above 2008 amounts.
    The 2009 request includes $9.8 billion for programs funded within 
the Interior, Environment and Related Agencies Appropriation Act. 
Excluding fire supplemental funding, this is a decrease of $198.9 
million, or 2 percent, below the level enacted for 2008. The 2009 
request for the Bureau of Reclamation and the Central Utah Project 
Completion Act, funded in the Energy and Water Development 
Appropriations Act, is $961.3 million, $189.6 million below the level 
enacted for 2008.
                          the challenges ahead
    Interior's responsibilities are expanding as the Nation looks to 
its public lands for energy, water, wildlife protection, and 
recreation. Since 2001, the Nation has created 13 new parks and 15 
wildlife refuges. Population has grown dramatically near once-rural or 
remote public lands, increasing access to public lands and complicating 
land management. In the last 10 years, 60 percent of the new houses 
built in America were located in the wildland-urban interface. Changing 
land conditions, including the effects of a changing climate, have 
heightened threats from fire and other natural hazards, complicating 
land management.
    The Department is improving program efficiency, setting priorities, 
and leveraging Federal funds through partnerships and cooperative 
conservation to meet these challenges. Interior's accomplishments have 
been many and varied, with noteworthy advances in management 
excellence.
    Interior has made progress on all dimensions of the President's 
management agenda--a result achieved despite decades-long challenges in 
Indian trust management, a highly decentralized organization structure, 
and a highly dispersed workforce. In 2001, Interior had 17 material 
weaknesses reported in the annual financial and performance audit. With 
the annual audit just completed for 2007, we have eliminated all 
material weaknesses. Despite these successes, as public lands become 
increasingly important to the economy, national security, and the 
public, continued success will require a strategic focus of resources 
to address emerging challenges, achieve key priorities, and maintain 
current levels of success.
                       interior's accomplishments
    The Department's accomplishments exemplify Interior's core values: 
Stewardship for America with Integrity and Excellence. Our 
achievements, in combination with an outstanding workforce, create a 
strong foundation for continued stewardship of the Nation's resources. 
Since 2001, the Department has:
  --Restored or enhanced more than 5 million acres and 5,000 stream and 
        shoreline miles through cooperative conservation.
  --Restored, improved, and protected wetlands to help achieve the 
        President's goal to protect, enhance, and restore 3 million 
        acres by 2009.
  --Improved park facilities for visitors by undertaking over 6,600 
        projects at national parks and earning a 96 percent 
        satisfaction rate from park visitors.
  --Reduced risks to communities from the threat of catastrophic fire, 
        conducting over 8 million acres of fuels treatments on Interior 
        lands through the Healthy Forests Initiative.
  --Enhanced energy security by more than doubling the processing of 
        applications for permits to drill and increased the production 
        of renewable energy with new wind, solar, and geothermal 
        projects.
  --Awarded $9.8 million to 140 Preserve America projects involving 
        public-private partnerships that serve as nationwide models for 
        heritage tourism, historic preservation, education, and other 
        Federal programs.
  --Leveraged a four-to-one investment through a water conservation 
        challenge grant program, generating more than $96 million for 
        122 water delivery system improvements and conserving over 
        400,000 acre-feet of water to help meet the water needs of 
        people across the West.
  --Completed planned lease sales and generated a new 5-year plan for 
        2007-2012 that opens up an additional 48 million acres to 
        leasing and has the potential to produce 10 billion barrels of 
        oil and 45 trillion cubic feet of natural gas over the next 40 
        years, enough to heat 47 million homes for 40 years. The 
        October 2007 Central Gulf of Mexico OCS lease sale generated 
        $2.9 billion, $1.6 billion more than originally estimated.
  --Removed the American bald eagle from the endangered species list 
        and put in place a set of management guidelines to secure the 
        future of our Nation's symbol.
  --Advanced protection of the Papahanaumokuakea Marine National 
        Monument in Hawaii, the largest marine protected area in the 
        world, with the publication of regulations codifying management 
        measures.
  --Hosted over 464 million visitors to parks, refuges, public lands, 
        and Bureau of Reclamation sites and increased the number of 
        fishing programs on refuges by 24 and the number of hunting 
        programs on refuges by 34.
  --Established a new Recreation Reservation Service, a unified pass to 
        public lands, and clarified entrance and recreation fees, in 
        coordination with other agencies.
  --Distributed over $79 million to individual Indian money account 
        holders whose whereabouts were previously unknown and archived 
        400 million pages of trust documents in a state-of-the-art 
        facility.
    Our 2009 budget continues investments the Congress provided in 2008 
for our top priorities. We continue our Centennial Initiative with 
record funding levels for park operations. We propose to augment 
funding for our landscape-scale Healthy Lands Initiative to protect 
wildlife and assure access to energy resources on public lands. We 
propose to sustain funding increases in 2008 to combat the 
methamphetamine scourge in Indian country and improve education 
programs for students in Indian schools.
    Fulfilling the President's commitment to cooperative conservation, 
since 2001, the Department has provided $2.5 billion in conservation 
grants to achieve on-the-ground protection, restoration, and 
enhancement of lands and waters with partners. This commitment 
continues with $321.7 million requested in 2009 for challenge cost 
share and partnership programs that leverage Federal funding, typically 
more than doubling the Federal investments with matching funds.
    We also propose four new initiatives. We will advance efforts to 
improve the status of birds, including migratory birds, and avert 
further declines in bird populations with an increase of $9.0 million 
for a Birds Forever initiative. The budget continues the $35.9 million 
refuge funding increase provided by the Congress in 2008, which will 
restore 200,000 acres of bird habitat. The 2009 budget seeks an 
increase of $7.9 million to collect data that is needed to define U.S. 
jurisdiction of the extended continental shelf under the Law of the 
Sea, protect wildlife and habitat in ocean environments from marine 
debris, and conduct high priority research to support coastal 
restoration. The 2009 budget includes $8.2 million to increase the 
protection of employees, visitors, lands and resources that are 
increasingly at risk from illegal activities at parks, refuges, public 
lands, and Indian lands along the border with Mexico. Of particular 
interest to this subcommittee, we request an increase of $21.3 million 
for the Water for America initiative that will enhance knowledge of 
water resources and improve the capacity of water managers to avert 
crises caused by water supply issues and better manage water resources 
to assist in endangered species recovery.
                           water for america
    In 2007, the National Science and Technology Council reported that 
``abundant supplies of clean, fresh water can no longer be taken for 
granted.'' The Council of State Governments echoed this concern, 
concluding that ``water, which used to be considered a ubiquitous 
resource, is now scarce in some parts of the country and not just in 
the West . . . The water wars have spread to the Midwest, East, and 
South, as well.''
    Competition for water is increasing because of rapid population 
growth and growing environmental and energy needs. These water needs 
are escalating at a time of chronic drought and changes in water 
availability resulting from a changing climate.
    In 2009, our budget includes an increase of $21.3 million for a 
Water for America initiative to help communities secure reliable water 
supplies through information, technologies, and partnerships. This 
collaborative effort, which involves the Bureau of Reclamation and the 
U.S. Geological Survey, will help address the water needs of the 
Nation.
    Knowing how much water is available--and how much we consume--lies 
at the foundation of good water management. Yet this Nation has not 
completed a water census in over 3 decades. Our Water for America 
initiative will fill this void. The U.S. Geological Survey request 
includes an additional $8.2 million to begin funding the first water 
census in 30 years. USGS will begin a nationwide assessment of water 
availability, water quality, and human and environmental water use. The 
census, planned for completion by 2019, will generate information to 
assist others in managing water in a context of competing demands. The 
census will provide a national groundwater information system, new 
technology that integrates surface and groundwater information, and 
better measurements that result in better management of water 
resources.
    For more than 100 years, USGS has collected, managed and 
disseminated data on stream behavior. The USGS operates its 
streamgaging network of 7,000 gages in cooperation with State, local, 
municipal, and tribal partners. The 2009 budget will modernize 350 
gages and re-establish 50 gages discontinued in the past 2 decades to 
improve capability to ensure a consistent, historical record of 
streamflow.
    The Bureau of Reclamation will recast its water conservation 
programs and will merge Water 2025 and the Water Conservation Field 
Services program to stimulate water conservation and improved water 
management through an integrated approach that addresses urban, rural, 
and agricultural uses of water throughout the West. Through the use of 
West-wide criteria to competitively award grants, this new water 
conservation challenge grant program will stretch water supplies 
through water conservation, technology, reuse and recycling, and new or 
improved infrastructure development. This program will leverage $15.0 
million in Federal dollars with State and local funds. We will also 
protect endangered species and their habitats while protecting water 
for traditional purposes with an increase of $8.9 million. Funding will 
be used to acquire water to increase flows in the Platte River; improve 
tributary habitats for spawning on the Columbia and Snake Rivers; 
restore habitats on the Yakima River basin, the Middle Rio Grande 
River, and the Klamath basin, and improve endangered species conditions 
in the California Bay-Delta.
    The Bureau of Reclamation's 2009 budget request of $919.3 million 
is offset by $48.3 million in funds from the Central Valley Project 
Restoration Fund Offset. This request supports Reclamation's mission of 
managing, developing, and protecting water and related resources in an 
environmentally and economically sound manner in the interest of the 
American people. The budget emphasizes reliable water delivery and 
power generation by requesting more than $396 million to fund 
operation, maintenance, and rehabilitation activities at Reclamation 
facilities.
    To address important infrastructure funding needs, the budget 
includes an increase of $15.5 million for the Bureau of Reclamation's 
Safety of Dams program. This will allow the Bureau to address 
correction actions at Folsom Dam and other high priority projects.
    Reclamation is currently developing programmatic criteria for a 
Rural Water Program as required under the Reclamation Rural Water 
Supply Act of 2006. Reclamation expects to begin appraisal level 
studies in 2009. The 2009 budget includes $39.0 million for two ongoing 
authorized rural water projects: $24 million supports the 
administration's commitment to complete construction of ongoing rural 
water projects including ongoing municipal, rural and industrial 
systems for the Pick Sloan-Missouri Basin Program--Garrison Diversion 
Unit in North Dakota and the Mni Wiconi Project in South Dakota. The 
first priority for funding rural water projects is the required 
operations and maintenance component, which is $15.0 million for 2009. 
For the construction component, Reclamation allocated funding based on 
objective criteria that gave priority to projects nearest to completion 
and projects that serve tribal needs.
    The $50.0 million budget for Animas-La Plata funds the completion 
of major project components including the Ridges Basin Dam, Durango 
Pumping Plant, and Ridges Basin Inlet Conduit; enables the Bureau to 
begin filling Lake Nighthorse; and begins construction of the Navajo 
Nation Municipal Pipeline.
    The Bureau will complete removal of the Savage Rapids Dam in 2009. 
The budget includes $22.7 million for the Middle Rio Grande project to 
continue to focus on the protection and recovery of the silvery minnow 
and southwestern willow flycatcher.
    The budget request for CALFED is $32.0 million, continuing 
implementation of priority activities that will resolve water conflicts 
in the Bay-Delta of California. Funds will be used for the 
environmental water account, storage feasibility studies, conveyance 
feasibility studies, science, implementation of projects to improve 
water quality, and overall program administration.
                  supporting the department's mission
    The 2009 budget aligns resources to achieve these and other high-
priority goals guided by the Department's integrated strategic plan. 
The Department's strategic plan links the Department's diverse 
activities into four common mission areas: Resource Protection, 
Resource Use, Recreation, and Serving Communities. A fifth area, 
Management Excellence, provides the framework for improved business 
practices, processes, and tools and a highly skilled and trained 
workforce.
    Interior continues to utilize the services of over 200,000 
volunteers and extensive seasonal employees. However, the workforce 
capacity of the Department's programs is an essential ingredient for 
the uninterrupted delivery of programs and services to the American 
public.
                        other budget priorities
    Financial and Business Management System.--The Financial and 
Business Management System, an enterprise-level, integrated, 
administrative management system, is replacing the Interior 
Department's existing legacy systems. When fully implemented, the 
project will support the business requirements of all Interior bureaus 
and offices including core accounting, acquisition, personal property 
and fleet, travel, real property, financial assistance, budget 
formulation, and enterprise management information.
                         legislative proposals
    The 2009 budget is accompanied by legislative proposals that will 
affect receipt or spending levels in 2009 or in future years. These 
proposals will be transmitted to the Congress for consideration by this 
committee and other authorizing committees of jurisdiction.
    Many of these legislative changes were presented in the 2008 
President's budget, including proposals for reallocation of the 
repayment of capital costs for the Pick-Sloan Missouri Basin Program, 
and authorization for the San Joaquin River Restoration settlement.
                               conclusion
    Our 2009 budget will--in its entirety--make a dramatic difference 
for the American people. We will continue efforts to improve our 
national parks, protect our wildlife and its habitat, and make 
investments in Indian Country for safe communities and Indian 
education. In addition, we will help communities address water supply 
needs, conserve wild birds and ocean resources, improve the safety of 
public lands along the border for employees and visitors, and continue 
to address other ongoing mission priorities. This concludes my overview 
of the 2009 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 Onley, thank you very much.
    Commissioner Johnson, you may proceed.

                     STATEMENT OF ROBERT W. JOHNSON

    Mr. Johnson. Thank you, Mr. Chairman, it's a pleasure for 
me to be here, also, and it's an honor to be in front of the 
members of the committee here, as well.
    I have Mr. Robert Wolf with me today, he is the head of our 
Program and Budget Group with the Bureau of Reclamation, and 
he'll be assisting me with details if I need some help.
    I would like to truncate my oral remarks, and very quickly 
hit on three broad categories of the Reclamation budget, and 
then just spend a minute talking about our Water for America 
initiative that's included in the 2009 request.
    Reclamation's budget breaks down into three really broad 
categories. Our first priority is the operation and maintenance 
of our facilities. We deliver water to 10 million acres of 
irrigated farmland, we deliver water to 31 million people, and 
we produce 44 billion kilowatt hours of energy annually.
    We have 58 power plants, 350 high dams--450 dams, if you 
count the lower dams--and maintaining that infrastructure, 
which largely is 50 years old, or older, is the first priority 
of the Bureau of Reclamation. And when we look at our budget, 
we have about $400 million associated with insuring that we're 
able to maintain that infrastructure and continue to deliver 
those water and power supplies like we have in the past.
    The second component of our program that I like to 
generalize about is what I would call River Restoration 
Programs. The Endangered Species Act, the National 
Environmental Policy Act, and the Clean Water Act have really 
established a new set of public values that Reclamation has to 
deal with, and the Corps, as well. And we found ourselves--in 
complying with those acts--being heavily involved in restoring 
river basins--river basins where we've had heavy involvement in 
developing water supply systems. We found that in order to be 
able to deliver, or continue to deliver, the benefits of our 
projects--that we have to be very active in managing those 
river basins to maintain the ecosystems and protect the species 
that live there.
    We have about $150 million in our budget for those kinds of 
activities--the Rio Grande, the Colorado, the Snake, the 
Columbia, the Platte, the Sacramento and San Joaquin, the 
Trinity River--all have major river basin restoration programs, 
the Klamath, I don't want to leave out the Klamath--certainly 
an important river basin--and we are putting a lot of our 
resources into meeting those requirements on those river 
basins.
    The third is, Reclamation continues to be involved in the 
development of new water supplies. We're still constructing 
water projects, we're heavily into the Animas La Plata Project 
in Colorado and New Mexico, we have an active Rural Water 
Program, that I know you all have a great interest in. We have 
a Water Reuse Program, funding additional water reuse. We have 
Indian programs to develop facilities to deliver water to 
Indian tribes. And that component of our program is also 
approximately $150 million.
    So, that in a very broad framework is the crux of the 
Reclamation program, and what our 2009 budget represents.
    Quickly, I would like to touch on Water for America, a new 
initiative. An initiative that I am very excited about, I think 
it's going to help Reclamation continue to be a key player in 
dealing with some of the critical water supply issues that 
we're facing in the Western United States. Chronic drought, 
changing climate, rapid population growth, and increased 
environmental and energy needs has created water conflicts 
leading to growing interstate and intrastate competition for 
water resources.
    In fiscal year 2009 Reclamation will partner with the U.S. 
Geological Survey to implement a Water for America initiative 
aimed at addressing 21st century water challenges. The 2009 
budget request for Water for America is $31.9 million. Of this, 
$19 million appears as the Water for America line item in our 
budget. The remaining $12.9 million is included in specific 
projects for enhanced endangered species recovery activities, 
which is about $8.9 million, and investigation programs, which 
is about $4 million.
    The goal of the Water for America initiative is to address 
the impending confluence of three factors, threatening to 
overwhelm our current ability to provide water to the arid 
West--increased water demands, aging infrastructure and 
decreased, or altered, availability of water supplies.
    Reclamation's part in Water for America will focus on two 
strategies. First, Reclamation will conduct several 
comprehensive basin-wide water supply and demand studies, in 
conjunction with willing partners in areas where high levels of 
anticipated water and supply/demand imbalances exist.
    Each study will include three main elements, state of the 
art projections of future water supply and demand for the river 
basin, analysis of the basin's existing water and power 
infrastructure performance in face of changing water realities, 
and finally, recommendations for adaptation and optimizing 
current operations and activities; or by changing or 
supplementing existing infrastructure and operations and 
adopting new technologies. These activities will be carried out 
in concert with Reclamation's existing planning programs.

                           PREPARED STATEMENT

    Second, we will look at expanding, protecting and 
conserving our Nation's water resources through a broad-based 
Challenge Grant Program, building on the existing Water 2025 
Challenge Grant Program that we've had over the last 4 or 5 
years. Our intent is to broaden that program to include 
Challenge Grants that would advance water technology, water 
treatment technology, and support proactive efforts to address 
endangered species problems, as well as the traditional grants 
to encourage water conservation in areas where there is 
potential conflict in water resource use.
    Thank you, Mr. Chairman, that concludes my oral remarks.
    [The statement follows:]
                Prepared Statement of Robert W. Johnson
    Thank you, Mr. Chairman, Senator Domenici and members of the 
subcommittee, for the opportunity to appear before you in support of 
the President's fiscal year 2009 budget request for the Bureau of 
Reclamation. With me today is Robert W. Wolf, Director of Program and 
Budget. Additionally, we have Reed Murray, Program Manager for the 
Central Utah Project Completion Act should you have any questions on 
that program.
    I appreciate the time and consideration this subcommittee gives to 
reviewing and understanding Reclamation's budget and its support for 
the program. Reclamation works hard to prioritize and define our 
program in a manner that serves the best interest of the public and 
those who rely on Reclamation for their water and power.
    Our fiscal year 2009 request has been designed to support 
Reclamation's core activities to deliver water and generate hydropower, 
consistent with applicable State and Federal law, in an environmentally 
responsible and cost-efficient manner while meeting the President's 
goal of balancing the budget by 2012.
    The proposed funding will allocate funds to projects and programs 
based on objective and performance-based criteria to most effectively 
implement Reclamation's programs and its management responsibilities 
for the water and power infrastructure in the West. The President's 
budget request emphasizes the following principle: enhancing management 
of our water infrastructure and programs in the West by eliminating 
program redundancies, leveraging partnerships with our western 
stakeholders and maximizing opportunities for competitive processes.
    The fiscal year 2009 request for Reclamation totals $919.3 million 
in gross budget authority. This takes into consideration the effects of 
the proposed legislation for fiscal year 2009 that will redirect $7.5 
million for Friant surcharges from the Central Valley Project 
Restoration Fund to the San Joaquin River Restoration Fund. The request 
also is partially offset by discretionary receipts in the Central 
Valley Project Restoration Fund of $48.3 million.
                      water and related resources
    The fiscal year 2009 request for Water and Related Resources is 
$779.3 million. The request for Water and Related Resources includes a 
total of $383.0 million for water and energy, land, and fish and 
wildlife resource management activities (which provides for 
construction and management of Reclamation lands, and actions to 
address the impacts of Reclamation projects on fish and wildlife). The 
request also includes $396.3 million for facility operations, 
maintenance, and rehabilitation activities which is used to ensure 
sound and safe ongoing operations.
    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 2009 Request for Water and Related 
        Resources
    I would like to share with the committee several highlights of the 
Reclamation budget, including one of the most significant and exciting 
elements of our 2009 request, the Water for America Initiative. In 
fiscal year 2009, Reclamation will partner with the U.S. Geological 
Survey to implement the Water for America initiative aimed at 
addressing 21st century water challenges and ensuring secure water 
supplies for future generations.
    Water for America ($31.9 million).--Of this amount, $19.0 million 
appears as the Water for America Initiative line item. While the 
remaining $12.9 million is funded in specific projects for enhanced 
endangered species recovery activities ($8.9 million) and displayed as 
individual investigation programs ($4.0 million) in the budget request, 
collectively the $31.9 million supports the cohesive Water for America 
initiative. Reclamation's efforts focus on two of the Initiative's 
three strategies: Plan for Our Nation's Water Future; and Expand, 
Protect, and Conserve Our Nation's Water Resources. The third 
component, Enhance our Nation's Water Knowledge is funded with the 
USGS.
    As part of the Plan for Our Nation's Water Future component of the 
Initiative, Reclamation will incorporate the existing investigations 
programs with a new basinwide studies program, thus initiating 
comprehensive water supply and demand studies to assess the impact of 
increased water demands on finite water sources. The Expand, Protect, 
and Conserve Our Nation's Water Resources component merges the most 
successful elements of two existing water conservation programs, Water 
2025 and the Water Conservation Field Services Program. Competitive 
grants will be awarded based upon West-wide criteria to address 
emerging challenges and prevent future conflicts.
  --Plan for Our Nation's Water Future ($8.0 million).--In planning for 
        our Nation's water future, Reclamation will conduct 
        comprehensive water supply and demand studies. The studies, to 
        be done in conjunction with willing partners, will occur in 
        areas where high levels of anticipated water supply/demand 
        imbalances exist. Each study will include three main elements: 
        state-of-the-art projections of future supply and demand by 
        river basin; analyses of how the basin's existing water and 
        power infrastructure will perform in the face of changing water 
        realities; and recommendations for satisfying future water 
        needs through adapting and optimizing current operations and 
        activities, or by changing or supplementing existing 
        infrastructure and operations and adopting new technologies. 
        Additionally, Reclamation`s investigation programs will 
        complement the comprehensive basin studies and will place an 
        additional emphasis on resolving 21st century challenges.
  --Expand, Protect, and Conserve Our Nation's Water Resources ($23.9 
        million).--The Expand, Protect, and Conserve Our Nation's Water 
        Resources effort will use a broad-based challenge grant program 
        (building upon and recasting the existing Water 2025 Challenge 
        Grant program and the Water Conservation Field Services 
        Program) to accelerate the implementation of cost-effective 
        actions that will conserve water by improving efficiency; 
        recycle and desalt water to create new supplies; and support 
        proactive efforts to avoid the decline of sensitive species.
    Another component of this strategy is accelerating endangered 
species activities in order to maintain and improve existing resident 
populations and/or localized critical habitat for various species 
impacted by Reclamation projects, thereby safeguarding the water 
supplies associated with these projects. Activities will include 
acquiring land for habitat development and improvement projects, 
recovery activities for listed species, improvements to stream flow, 
removal of barriers to spawning grounds, restoration of critical 
habitat and other related actions.
    Other significant programs and highlights include:
    Klamath Project in Oregon and California ($25.0 million).--The 
fiscal year 2009 President's budget request will continue 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 ($16.4 million).--The fiscal year 2009 President's budget 
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 2009 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 ($22.7 million).--The fiscal year 
2009 President's budget 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 ($50.0 million).--The 
fiscal year 2009 President's budget request will continue construction 
of the project's major features, Ridges Basin Dam and Durango Pumping 
Plant and the Ridges Basin Inlet Conduit. It will allow for initiation 
of testing on the Durango Pumping Plant and Ridges Basin Inlet Conduit, 
thereby enabling the initial filling of Lake Nighthorse. With this 
level of funding Reclamation will start constructing components of the 
Navajo Nation Municipal Pipeline. In addition to construction funding, 
this request includes funding for continued operation and maintenance 
of improvements for wetland and wildlife mitigation lands associated 
with the project.
    Savage Rapids in Oregon ($3.0 million).--The fiscal year 2009 
President's budget 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 ($18.0 million).--The fiscal year 2009 President's budget 
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 May 2008. During the 
remand, the 2004 biological opinion remains in place as Reclamation 
continues to implement actions identified in the 2004 updated proposed 
action.
    Platte River Endangered Species Recovery Program ($11.5 million).--
The President's fiscal year 2009 budget request for the Platte River 
Recovery Implementation Program is $11.5 million. The agreement for the 
program was signed by Secretary Kempthorne and the Governors of 
Nebraska, Colorado and Wyoming in late 2006. Platte River habitat is 
essential to the recovery of the whooping crane, interior least tern, 
piping plover, and pallid sturgeon (all threatened or endangered 
species). Legislation was introduced in the 110th Congress to authorize 
the Secretary of the Interior, through the Bureau of Reclamation, and 
in partnership with the States of Wyoming, Nebraska, and Colorado, 
other Federal agencies, and other non-Federal entities to participate 
in the implementation the Platte River Recovery Implementation Program 
for Endangered Species in the central and lower Platte River Basin and 
to modify the Pathfinder Dam and Reservoir.
    Site Security ($29.0 million).--The President's 2009 budget request 
for site security helps to ensure the safety and security of the 
public, Reclamation's employees and key facilities. The funds will 
support ongoing security activities, including physical security, 
personnel security, information security, law enforcement and research 
activities to maintain an effective and reliable security program and 
allow Reclamation to conduct security-related studies and reviews. The 
request also includes appropriated funds for guards, patrols, and law 
enforcement, including coordination, execution, and maintenance of law 
enforcement agreements with agencies outside Reclamation. In fiscal 
year 2008, 2009, and in future years, Reclamation plans to collect all 
reimbursable costs, including guards and patrols, as well as operation 
and maintenance of facility fortifications. Reclamation will continue 
to treat facility fortification, studies, and anti-terrorism 
management-related expenditures as non-reimbursable.
    Safety of Dams ($91.3 million).--The President's budget allows 
Reclamation to ensure that 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. Of the budget request of 
$91.3 million, $71.5 million is for modifications at several facilities 
including Folsom Dam.
    Rural Water Program Development ($1.0 million).--The fiscal year 
2009 President's budget request of $1.0 million will allow Reclamation 
to begin implementation of the program on a pilot basis. Reclamation is 
currently working on meeting the requirements of title I of the Rural 
Water Act in order to implement the program. First, Reclamation is 
undertaking a rulemaking process, to develop programmatic criteria. 
Second, as required by the Act, Reclamation will complete an assessment 
of the status of authorized rural water supply projects and of other 
Federal programs that address rural water supply issues. This study 
will enable Federal agencies to maximize coordination in order to 
promote efficiency in those Federal activities targeting rural water 
supply needs in the West.
    Science and Technology (S&T) ($9.0 million).--The fiscal year 2009 
President's budget request includes funding for the development of new 
solutions and technologies which respond to Reclamation's mission-
related needs. Reclamation's S&T work will contribute to the innovative 
management, development, and protection of water and related resources. 
This does not include the $2.0 million for the Desalination and Water 
Purification Research program.
                      ongoing rural water projects
    This request includes $39.0 million for two ongoing authorized 
rural water projects: The first priority for funding rural water 
projects is the required operations and maintenance component, which is 
$15.0 million for 2009. The budget includes $24 million to support the 
administration's commitment to complete construction of ongoing rural 
water projects including ongoing municipal, rural and industrial 
systems for the Pick Sloan-Missouri Basin Program--Garrison Diversion 
Unit in North Dakota and the Mni Wiconi Project in South Dakota. For 
the construction component, Reclamation allocated funding based on 
objective criteria that gave priority to projects nearest to completion 
and projects that serve tribal needs.
                               title xvi
    The request includes $7.0 million to support ongoing title XVI 
construction projects, title XVI research activities, and the title XVI 
feasibility study review process developed in 2007. The title XVI 
projects develop and supplement urban and irrigation water supplies. 
Reclamation will continue to place priority on funding projects that: 
(1) are economically justified and environmentally acceptable in a 
watershed context; (2) are not eligible for funding under another 
Federal program; and (3) directly address administration priorities for 
the Reclamation program such as providing instream flows for Federally 
endangered or threatened species, meeting the needs of Native American 
communities, and meeting international commitments.
                       policy and administration
    The $59.4 million request in fiscal year 2009 funds the 
development, evaluation, and implementation of Reclamation-wide policy, 
rules, and regulations, including actions under the Government 
Performance and Results Act, and implement the President's Management 
Agenda. These funds are also used for management and performance 
functions that are not chargeable to specific projects and required for 
ongoing Commissioner's activities.
                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 $48.6 million is expected to be offset by discretionary receipts 
totaling $48.3 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 $30.0 million (October 1992 
price levels) on a 3 year rolling average basis.
    The CVPRF request is a net of $48.6 million. This includes a 
redirection of $7.5 million collected from the Central Valley Project 
Friant Division water users to the new San Joaquin River Restoration 
Fund for fiscal year 2009. Previously, these funds went into the CVPRF 
as outlined in the Reclamation Projects Authorization and Adjustments 
Act of 1992, title XXXIV of Public Law 102-575, section 3406(c)(1). 
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. 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
    Funding in fiscal year 2009 will be used to continue planning, 
engineering, environmental compliance, fisheries management, water 
operations, and public involvement activities related to the 
Restoration and Water Management goals in the settlement. The 
administration will again support passage of authorizing legislation, 
the San Joaquin River Restoration Settlement Act, which includes a 
provision to establish the San Joaquin River 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 2009, 
$32.0 million is requested to enable Reclamation to continue to advance 
its commitments under the CALFED Record of Decision and with a focus 
toward 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 2009 planned activities
    Reclamation's fiscal year 2009 priority goals are directly related 
to fulfilling contractual requests to deliver water and power, 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 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 maintain dams and associated facilities in good 
condition to ensure the reliable delivery of water. Reclamation will 
continue to meet or beat the industry forced outage average to ensure 
reliable delivery of power. Reclamation will reduce salinity by 
preventing an additional 13,500 tons of salt from entering the water 
ways.
    Moreover, the fiscal year 2009 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 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 2009 and beyond.
                        managing for excellence
    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. To 
date, Reclamation has completed 38 out of 41 activities. The balance 
will be completed by the end of February 2008.
                               conclusion
    Mr. Chairman, please allow me to express my sincere appreciation 
for the continued support that this subcommittee has provided 
Reclamation. This completes my statement. I would be happy to answer 
any questions that you may have at this time.

    Senator Dorgan. Commissioner Johnson, thank you very much.
    I have a number of questions, but I want to start. I 
mentioned in the statement as I introduced you all that I was 
looking at the Special Inspector General for Iraq 
Reconstruction report and he was reporting on the number of 
water projects that we're doing in Iraq. He noted that we're 
paying for 967 water projects we're finding in Iraq including a 
water treatment plant in Sadr City, water treatment plant al-
Wathba, water treatment plant Shark Dijla, water treatment 
plant al-Wahda, design/construct Euphrates Main Water Supply 
Project, Baldaruse Water Supply Project, Phase II Water Supply 
Project, Meshkab, and I could go on and on. And then you come 
before our committee on behalf of a budget that says, ``By the 
way, let's cut funding for water projects in the United States 
by $1 billion.''
    And I know you prepared a budget. And you probably won't 
tell us what you prepared, because the way our game is played, 
you have to send it up and it goes through the Office of 
Management and Budget strainer, then over to the White House. 
If you would come here and tell us that you didn't get as much 
as you think you need, you'll lose your job. So, that's the way 
this dance occurs yearly.
    We don't blame you for it, but I think it's very hard for 
you to come and support a proposition that we should spend $1 
billion less on water investment projects in this country in 
the coming year than we did last year.
    And frankly, I think it's very hard to make the case that 
we can do hundreds and hundreds of water projects funded by the 
United States in Iraq, but we can't afford water projects that 
are needed here. And so, we do. We paid for those. That's a 
Special Inspector General report of all of the funding that 
we're doing in Iraq.
    Let me ask the Bureau of Reclamation, since we're in the 
ninth year of a drought in western and central North Dakota, do 
you have predictions for what might happen in the future in our 
area?
    Mr. Johnson. That's part of our Water for America 
initiative. We are going to be looking at a number of basins 
West-wide, and we haven't specifically identified those basins 
yet. We're going to be going through a public process to 
identify them.
    Certainly we're aware of what's going on in the Great 
Plains Region, and there certainly has been--over the last 8 or 
9 years--significant drought that's occurred up there. We're 
aware of the reservoirs decline. In fact, I'm sure the Corps is 
probably more aware of it than us, since it's their reservoirs 
that have declined the most, but yes, we're very aware of that, 
Senator.
    Senator Dorgan. Let me ask a question about the Law of 
Armed Conflict Rural Water Project. That's been funded for the 
previous 4 years, even in 2007 when the administration prepared 
a spending plan under the continuing resolution, and yet you 
send us a request that says we shouldn't fund that project this 
year. Tell me how you came to that conclusion?
    Mr. Johnson. I think what it comes down to is the balancing 
of the priorities within the President's budget and also 
meeting the goal of achieving a balanced budget by 2012.
    Senator Dorgan. But that's not responsive. My question is 
about this project. We've funded it 4 years, and so has the 
President's budget, and all of a sudden you say, ``Don't 
continue.''?
    Mr. Johnson. Within the Rural Water Program, for the funds 
that we had, we used two primary criteria to fund the projects 
that we did. One, we tried to focus on projects that served 
Indian tribes, and two, we tried to focus on those projects 
that were farthest along, where we could put money and make the 
most progress. And that was the primary criteria that we used 
to come up with the funding that we've presented in our budget.
    Senator Dorgan. Okay. Again, you've got a tough job, and 
that's an artful answer, but you have a tough job.
    General, the President's proposed a $5.7, $5.8 billion in 
emergency Federal funding to be matched by $1.5 billion in 
local funding to complete the Hurricane Protection System. The 
President said that he committed that he was going to finish 
that in time for the 2011 hurricane season.
    Now, the funding was proposed as a part of the regular 2009 
Appropriations bill, rather than the supplemental, which means 
this will be done later than the supplemental. My understanding 
is these funds are needed by October 1, or the construction 
schedule can't be maintained, number one. And number two, my 
understanding is that it may well be the case that there's not 
$1.5 billion locally to meet the local share on this. Tell me 
about that?
    General Van Antwerp. First, a good portion of that money 
needs to be available on October 1, to award some of the 
contracts. So, that is an emergency, but not under a 
supplemental. So, we have to deal with that. And a day slipped 
will be a day slipped in the project, and the 2011 date will be 
in jeopardy if that funding isn't available on October 1.
    Senator Dorgan. But why would it not have been requested in 
a supplemental? Last year, we had veto threats against, I 
think, 10 appropriations bills, and so the result was what they 
wanted. The appropriations bills weren't done in October, but 
rather much later. And that may be the case this year. If 
that's the case, what happens, these--you can't meet these 
construction schedules? Is that what's going to happen?
    General Van Antwerp. Ultimately, if the funding isn't 
there, there will be slippage in the construction schedules, 
that's true.
    I think the second part of your question, very quickly, is 
in the cost-sharing--is that there is a provision where we can 
allow the sponsor to have additional time, up to a year, but we 
are counting on the sponsor coming up with their portion of 
this, and that's being worked very hard right now.
    Senator Dorgan. But WRDA 86 allows the non-Federal share to 
be repaid over 30 years, which would probably have been a less 
risky proposition for you to recommend.
    I have a good number of questions about the Missouri River, 
and also Devil's Lake, and I want to defer those to allow my 
colleagues to ask questions.
    Senator Domenici.
    Senator Domenici. Is it still a lake?
    Senator Dorgan. It's still flooding.
    Well, the fact is, it's overflowed, and it's now filled a 
second lake next to it, so there's no additional capacity left, 
I mean we've got real problems.
    Senator Domenici. Well, I've worked on it a couple of 
times, maybe this will be--do something this year might be my 
last time.
    In any event, let me say I'm willing to help.
    Let me put--Corps of Engineers Secretary Woodley, and your 
testimony before the subcommittee told us that there's a 
looming problem on the Inland Waterway Trust Fund, that needed 
to be addressed. However, we never received a proposal to 
mitigate the pending disaster.
    The President in 2009 budget proposal announced that 
legislation would be forthcoming. Finally, last week, the 
administration proposal was submitted to Congress, is that 
correct?
    Mr. Woodley. That is correct.
    Senator Domenici. And why did it take a year to prepare the 
legislation, and preparing it--this brand-new policy, which is 
indeed that, brand-new, and going to be very difficult to get 
through here--did you consult with relevant authorizing and 
appropriations committees? Or was that not you job?
    Mr. Woodley. Yes, sir, we consulted very heavily with a 
very wide variety of people in the community, throughout the 
administration and received views from a very large cross-
section of the people that were affected by it. I don't know 
that we would be entitled to receive formal views from the 
committee, but----
    Senator Domenici. I don't think you submitted it to us, but 
that's--that's all right.
    This legislation, from what I can tell, will be tough to 
get enacted in any year, much less this year. It took me 
several years before I was able to finally get the legislation 
establishing the Inland Water Trust Fund, I don't think you 
were here then, when that happened.
    Mr. Woodley. Very likely not, Senator.
    Senator Domenici. You probably still had hair on your head 
when that occurred.
    Mr. Woodley. Very likely so, Senator.
    Senator Domenici. A long time ago. And now you want us to 
complete this change--fundamental mechanism change in the next 
6 months, I really don't think that's going to happen, and 
nonetheless I look with interest on your proposal and look to 
learn about it, as much as I can, Senator.
    Secretary Woodley, in your press release, you state that 
the budget represents the prudent use of available funding to 
advance important mission objectives. Unfortunately, this 
budget is implemented--if it is--the Corps will be forced to 
stop construction on 75 percent construction projects. Is it 
prudent to provide no funding for projects that have been under 
construction for a year, 2 years, or, in fact, years? What are 
we supposed to tell the project's sponsors that are sharing the 
costs of these projects? How much do you estimate the Corps 
will pay in termination fees, if any? Could you just talk to me 
about this problem that we're going to have?
    Mr. Woodley. Yes sir, our effort has been to concentrate 
the very limited funding that we have on the projects that have 
the greatest potential for return. And as I say, there is no 
question that this budget does not provide all of the resources 
for all of the good things that the Corps of Engineers could 
accomplish in fiscal year 2009. I do not represent that it 
does, and I will not represent that it does. We leave a lot of 
good work on the table.
    Senator Domenici. Secretary Woodley, could you, Secretary, 
only explain the President's Executive order on earmarks, and 
based on what you know, how do you believe it will be 
implemented?
    Either of you?
    Mr. Woodley. Secretary, our view that we have taken is that 
it is something that leaves a lot of questions unanswered, and 
that will have to be answered in the course of implementation. 
And I certainly hope that we're able to work with the Office of 
Management and Budget and the Appropriations Committees to come 
to a clear understanding of exactly how it's to be implemented.
    Senator Domenici. Okay, well, I don't need anything 
further. What you're really saying is that it leaves much to be 
desired, and a lot of--there are a lot of questions about the 
earmark policy, how it would be done. And there's some holes in 
it that have to be filled, and the like, is that right?
    Mr. Woodley. Well, certainly as an Executive order, it is a 
expression of the policy of the executive branch and we will be 
implementing it as we understand it, fully and rightly. And we 
support it in every way.
    Shall I say that again?
    Senator Domenici. No, that's fine.
    Mr. Woodley. Thank you.
    Senator Domenici. Let me talk to the Commissioner a minute?
    In your quest for more water projects, and water 
activities, water action--I didn't hear you mention de-sal, or 
water purification. Are those included in your process as you 
think of getting involved more, and more effectively in water 
needs?
    Mr. Johnson. Yes, they are. We have--as part of our 
research program--have included research activities for water 
desalinization, and water technology development. In fact, we 
have O&M dollars for the Tularosa Plant that you referenced 
earlier. Our research facility there. And we do have some 
research dollars, as well, to help fund initial research 
activities at that facility.
    Senator Domenici. Well, I just want to say, you know, 
desalinization and water clean up technology is just on the 
cutting edge, I mean, we're just close to making some giant 
breakthroughs. And in States like mine which are very dry, we 
have huge amounts of inland water, and then water that's salty, 
that we could use, and which has changed the future of our 
State.
    And I hope you will continue to emphasize it, and not be 
concerned to make it something that you will be out front in, 
because you can do that.
    My last comments and observations go to you, General.
    The Corps has been doing an outstanding job for the last 10 
years on the Rio Grande River basin, with reference to the huge 
greenbelt that exists because of cottonwood trees. We have just 
about changed that area to something absolutely beautiful from 
an area that was fragile, frail, burned down anytime--two or 
three times a year, the big, big fires. It's going to be used 
by the people, and there are marshes in it for ducks and geese 
and other kinds of activities, and now a park is going to be 
constructed right in the middle of that basin, centering in 
Albuquerque. That's been authorized by Congress, and I 
understand the Corps intends to show that you know how to do a 
real water-land park with green trees in it, in an arid State. 
And I hope you will be there when we dedicate the project, 
because I think it's going to be a real credit to the Corps, 
what is going to be there, in this park, in Albuquerque, New 
Mexico.
    Senator Domenici. Thank you, Mr. Chairman.
    Senator Dorgan. Senator Johnson.
    Senator Johnson. Commissioner Johnson, it occurs to me that 
we Johnsons ought to stick together. In your testimony, we're 
getting the budget for BOR water projects, you indicate that 
the Bureau prioritized funding for operation and maintenance 
costs, and then construction funding for ongoing rural water 
systems nearest to completion, to serve populations.
    Using those criteria, the Bureau provided no funding for 
several other ongoing regional water system projects. In making 
this decision, did the Bureau examine the fact on how delaying 
funding for these projects will add to the total cost to 
complete? Do you agree that deferring construction on ongoing 
drinking water projects will contribute to an even greater 
future funding crisis at the Bureau?
    Mr. Johnson. Senator, certainly to the extent that we're 
not funding projects, they do continue to have cost increases, 
there's just no denying that. That's a very correct 
observation.
    Senator Johnson. My second question is about the effect on 
the specific projects and the view of some in the Congress that 
the Senators and House Members should have no ability to direct 
funds to specific initiatives.
    Commissioner Johnson, is there any other Federal agency 
that is funding the Lewis and Clark Regional Water System?
    Mr. Johnson. Not that I'm aware of, sir.
    Senator Johnson. Since the Bureau is proposing no Federal 
funding for the Lewis and Clark Regional Water System in fiscal 
year 2009, the only way for this project to receive Federal 
funding next fiscal year, is for the Congress to appropriate 
funding, is that correct?
    Mr. Johnson. The--you're getting back to the question on 
earmarks, I suppose.
    Senator Johnson. Yes.
    Mr. Johnson. And, you know, I think that that's--there's a 
lot of detail in that that has to be worked out, certainly 
Reclamation will follow the Executive order, as I'm sure the 
Corps will, but there's a lot of details there that are yet to 
be defined. And we'll certainly be working to--with the 
Department and with OMB, you know, on the Reclamation program 
and where that has an effect, and where it doesn't.
    Senator Johnson. Mr. Chairman, I will submit my additional 
questions to the Corps of Engineers and the BOR for a written 
response.
    Thank you.
    Senator Dorgan. Senator Johnson, thank you very much.
    Senator Craig.
    Senator Craig. Thank you very much, Mr. Chairman.
    I guess there's another way of--another perspective of 
looking at earmarks. Now that we have heard your earmarks, 
isn't that a reality? Have we not heard the priorities of the 
agencies of the executive, and therefore heard the President's 
earmarks? But, how dare we even consider those, or think of 
them in that context?
    I'm just--I guess I get a little constitutional when I 
think of who has the priorities and the responsibilities of 
budgeting under the Constitution, and not under the statute. 
And if that were the case, then I think what I just said, Mr. 
Chairman, would be constitutionally accurate--we have now heard 
the President's earmarks.
    Having said that, though, let me turn to you, Secretary 
Woodley, and thank you for at least a few earmarks that you 
have established, and one of those that I think is something, 
Mr. Chairman, we've got to take a very close look at. This 
happens to be specific to the Pacific Northwest, and to the 
Columbia Snake River Transportation System, and I'm speaking 
now to, of course, the dredging of the Lower Columbia River, 
and the budget you've put there, That certainly helps us get to 
the near completion of that project, which is critical to all 
locks and barge systems up river. Why does the Senator from 
Idaho focus on that? Because the last sea port in that system 
is in the State of Idaho.
    And, Mr. Chairman, something that I think we will 
increasingly focus on as it relates to the responsibility of 
the Army Corps of Engineers and Secretary Woodley in days to 
come will be the value of water transportation as surface road 
transportation goes up dramatically and costs of fuel, and the 
ability to move large, heavy loads through the system.
    Now, our canal and water systems in the United States are 
becoming increasingly important by the day, as we see fuel 
costs go up to $4 plus for diesel, $1,100 to fuel a big 18-
wheeler truck, versus the ability of our barge and waterway 
systems to move a large freight.
    So, therefore, completing the dredging below Portland and 
the Lower Columbia is critical to the whole of the system.
    Let me also commend you for your response to the incident 
at the John Day navigation locks. That was very important, too, 
General, as we--and you moved promptly and timely in doing 
that.
    Now, interestingly enough, I was there when Animas La Plata 
was simply an idea in the eye of a Congressman from that 
district, and few interested groups. Ray Kagosic was the 
Congressman at that time, and I was a freshman on the Interior 
Committee in the House--28 years ago, Commissioner. Does it 
take a long time to do anything around here? It sure does. But 
I understand we're about ready to cut the ribbon on Animas La 
Plata.
    So, I guess my advice to you, Mr. Chairman, is with Devil's 
Lake--just simply hang in there. It takes a long time to get 
these things done, even if we define them as an emergency.
    But, let me also say--and this is simply not a request for 
resource, because I think while I don't agree with all of your 
earmarks this year, I think they are priorities that represent 
a lot of our needs.
    In the northern tier, especially north Idaho, in a time of 
global warming, has received an unprecedented amount of 
snowfall this year. In fact, we now have historic record levels 
of snow on the ground, in the panhandle and the areas of north 
Idaho, and parts of Montana, eastern Washington and others. And 
we're hoping above hope that it leaves us slowly, and 
gradually, this spring.
    But if it doesn't, I'm quite confident the Army Corps of 
Engineers will be there. This is simply a head's up--watch 
closely as our record snow falls melt into the system. I 
believe the Snake Columbia system is at a near 30 year high in 
potential runoff, so--it is difficult to talk drought or to 
talk climate change in this particular environment. All I am 
saying to you, General, and certainly to you, Secretary, is--
stay ready. Depending on how this valuable moisture leaves us.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman.
    And again, gentlemen, thank you for joining us.
    Secretary Woodley, the Fox Point Hurricane Barrier became 
the responsibility of the Corps of Engineers in October 2008, 
and the Woonsocket Levy project will become the Corps 
responsibility in January 2009. How do you propose to meet 
those obligations under the law?
    Mr. Woodley. Authorization has been provided, Senator, so 
far we have not been able to identify the funding within our 
system to undertake that, but I can assure you, we are very 
much aware of the obligation, and intend to do everything we 
can to discharge it.
    Senator Reed. Do you have a timeline where you're going to 
identify the funds? And do you have a work plan at least, even 
though the funds might not be evident or tangible at the 
moment?
    Mr. Woodley. Yes, sir. We have estimates as to how much 
would be called for, and we are actively seeking the ability to 
do that.
    But, you know, it's certainly--when you, when an obligation 
is established or authorization is established, it is something 
that we would like to have the opportunity to budget for or 
program for, anyway, before it takes place. But in this case, 
we're just going to have to manage it as best we can.
    Senator Reed. Well, I appreciate that, Mr. Secretary, and I 
just want to make it clear, again, I think you understand this, 
that this is something I feel is very, very important, that it 
has to be done, and I obviously will work with you and General 
Van Antwerp and your colleagues, but I will return again, and 
again, to make sure that this is successfully completed. And 
I--anything you think we could do, let us know. But I expect it 
to get done.
    Mr. Woodley. Yes, sir. We understand very well your views 
on the matter.
    Senator Reed. Thank you.
    Thank you, Mr. Chairman.
    Senator Dorgan. General and Mr. Secretary, coming back to 
Devil's Lake, it's easy for us to wait, but it's not easy for 
the lake to wait. This is one of, I think, only a couple of 
examples in America where there is lake flooding, which is 
different than river flooding.
    River flooding comes and goes, it courses down, takes cars 
and homes with it, and then all of a sudden a couple of days 
later, everything looks calm.
    This lake flooding is in a closed basin, like the Great 
Salt Lake, the Devil's Lake basin has an upper area that's 
close to the size of the State of Massachusetts, and it all 
funnels down into this area at the bottom called Devil's Lake. 
And it's up 25 feet and stays up, and it's now been running off 
into Stump Lake. Stump Lake is up 15 feet in the last 2 years, 
because there's no place else for it to run, and it appears to 
me that the USGS says there's a 70 percent chance that the wet 
cycle will continue for at least another decade, and a 40 
percent chance the wet cycle there will continue for another 
three decades.
    So, in terms of protect not only the community of Devil's 
Lake, but the roads and the infrastructure in that region, the 
Corps has to be involved now in planning an increase in the 
levees and dikes and a range of other things. Can you tell me, 
is the Corps actively involved in this area, General?
    General Van Antwerp. Yes, sir, we definitely are. By the 
way, the lake elevation is 1,447 feet this morning. In these 
two lakes, as you're well aware, they do operate together, and 
we're considering in the reevaluation, how do they work 
together and what do we have to do for the levees that are 
supporting this?
    So, we are very much on top of this, we are very much 
interested in getting this fixed now, with the predictions for 
the next decade.
    Senator Dorgan. The reason I'm sensitive to the fact that 
you may not find the local sheriff $1.5 billion down in the 
gulf, is the local share that will be required for Devil's Lake 
for a levee increase. Those folks don't have the money, and 
they've been fighting a lake flood that came and stayed now for 
many, many years. So, we--let me say this about the Corps.
    I admire the Corps in the way it fights floods. I mean, 
I've watched the Corps stand on the dikes of the Red River, and 
saw the dikes breach, and saw an entire town of 50,000 people 
evacuated--I admire what the Corps does to fight floods, you do 
a good job.
    I really have great problems with what the Corps does to 
manage the Missouri River, so that's a different subject. In 
Devil's Lake and our region, we really need your help, we need 
you to be way out in front of what we need done here in terms 
of policy choices, and we need to protect people and property 
and try to manage a very difficult flood. Lake flooding is not 
something you're accustomed to, and our laws don't even comport 
to lake flooding. Most of the way we write laws have to do with 
river flooding.
    But with respect to the river, I might say, the management 
of the Missouri River is a continuing serious problem. You're 
continuing to remove water from the upper main stem dams in the 
Missouri River, North Dakota, South Dakota, Montana, and so on, 
in order to support a barge industry which apparently was 
intended to be a whale, but has now become a minnow.
    There are times when there's one barge, one barge on the 
Lower Missouri River, and for that one barge, you are releasing 
water, instead of storing it in the upper reservoirs. That's 
not in anybody's interest. That's not in Senator Bond's 
interest, because he should want that water stored so that, at 
some point whether it's the lower Missouri, or especially the 
substantial amount of barging on the Mississippi, that we would 
save that water to be using it when they need it.
    You know, it's of interest to me that when there's too much 
water down south, then they want some help with those of us up 
north, but otherwise, they want to manage the river for their 
one barge.
    Does it seem strange to you that you're releasing water, a 
pretty substantial amount of water to float one barge? And the 
reason I mention one barge, I can show you the reports, the 
weekly reports, in which there's one barge floating in the 
lower Missouri, and we have scarce water in the upper 
reservoirs and you're releasing water to float this little cork 
down there someplace, I mean, does that bother you? Tell me 
yes.
    Mr. Woodley. Yes, Senator, that is very troubling. The 
original project, of course, was authorized many years ago, 
with navigation as an authorized project purpose. I believe 
that the people that are served by the navigation channel see a 
value in continuing that navigation support, and I think that 
we have made some substantial improvements in the management 
scheme when we implemented the new Master Manual in 2004, but 
certainly at times of--particularly in times of drought--that 
is a very difficult balancing that has to take place.
    Senator Dorgan. My point is that now that river system 
would now have about 54 million acre feet in it, instead of 
that, it's roughly a 34 million, 35 million acre feet. And yet 
it still doesn't trigger drought emergency measures. And so, 
we're moving water out of these upstream reservoirs in which we 
should store it, to float one barge.
    And so, if the market system were such that the barges were 
determined to be very valuable, you'd think you'd have barge 
traffic down there. But that's not the case, there's not any 
significant barge traffic. A fair amount of what's going on 
down there, to the extent that there's any barging at all, is 
sand and gravel, and I intend to hold a hearing of this 
subcommittee, just on this issue, and it will be held a little 
later this year, as soon as we're through the appropriations 
process.
    But we're going to explore this in great, great depth. 
That's why, General Antwerp, I'm so pleased that you've joined 
us, and you and Secretary Woodley are going to be witnesses at 
that hearing, because we need to talk through this and fix it. 
The upstream industry that has developed is 10 times the barge 
industry--10 times. And yet, we are managing the river for the 
minnow, and ignoring the whale. It makes no sense to me at all, 
I've been at this for about 10 years, and I haven't been able 
to really get any satisfaction--well, once in a great while 
somebody throws us a small bone, but the management of that 
river is, in my judgment, not competent, and not at all with 
any kind of reservoir of common sense.
    So, we're going to have a hearing, I will ask you back for 
that hearing, but I did want to raise it today, because it 
really bothers those of us--Senator Johnson, myself, and 
others--who live upstream and know that there's a much 
different way to manage that for the benefit of all States--the 
States in the up-river and down-river areas.
    I have a large number of questions that--with your 
indulgence, I'm going to submit to--because we won't have a 
chance to ask all of them today, but I do want to ask a series 
of questions and as I call on my colleagues for additional 
questions--the hearing has just been changed to 11 o'clock--or, 
excuse me, the votes have just been changed to start at 11 
o'clock, so we have a few more minutes.
    I want to mention what my colleagues, Senator Domenici and 
Senator Craig had mentioned on this issue of earmarks. I don't 
understand and I think it's perhaps unworkable, these 
suggestions the President has made. I think what he has made, 
and Senator Craig was suggesting it--what he is saying is, 
``I'm going to send my earmarks to Congress, it's what I think 
we should invest in, in this country, and then if you add 
anything to it, we're going to consider those special interest, 
congressional pork, earmarks,'' or whatever lexicon you might 
want to use. That is a--that's a curious way to engage with the 
legislature.
    The Congress--certainly the President has priorities, has 
every right, and we would expect that he would pursue those 
priorities. He should, as a matter of respect, understand there 
are priorities in the Congress, as well. And perhaps a merging 
of the best of which both have to offer, rather than the worst 
of each, would be in the best public interest of this country.
    So, I raise that only because my colleagues did. I think 
the President's suggestion--especially in this subcommittee, 
more than perhaps any other, is completely unworkable. Most of 
what we do represents earmarks by the President, and in many 
cases by us, and approved by us, and that's the way this 
committee almost has to work, in terms of choosing what kind of 
investments in water policy we want to engage in around the 
country.
    Senator Craig.
    Senator Craig. I do have one additional question and I 
think Senator Domenici engaged you, Secretary Woodley, briefly 
as it relates to the proposals for the Inland Water Trust Fund, 
and what that will mean.
    And we might, for just a moment, get some of your insight 
as to what we could expect. So, I want to set this scenario up. 
Keeping in mind that a commercial vessel must pass through 
eight navigation locks from Portland to the Port of Lewiston, 
it's my understanding that this fee would be imposed on 
commercial barges using locks operated by the U.S. Army Corps 
of Engineers, the fee would be phased in, beginning October 1, 
2008, with increases each year through 2012, adjusted 
thereafter based on the total net assets of the Inland Waterway 
Trust Fund.
    It's also my understanding that this Trust Fund is used to 
pay half of the cost of new capital construction projects and 
major rehabilitation. None of us dispute the need, certainly, 
for rehabilitation.
    What would this cost? In that scenario of eight locks--how 
much will it cost, per lock? What would be the net gain in fees 
collected, using a lock versus a gas tax that is currently 
used? And how will this affect the Columbia River Navigation 
System? Can you give us some insight into that proposal?
    Mr. Woodley. Yes, sir. The net cost would have to be 
calculated by netting out the elimination or phasing out, over 
time, of the 20 cent per gallon fuel tax that exists----
    Senator Craig. Right.
    Mr. Woodley. That is to be eliminated.
    The amount will go, per barge, per lockage, from a $50 
charge, to an $80 charge by 2012, and then will, because if I'm 
not mistaken, all of the locks on their system are 600 feet or 
larger.
    And so----
    Senator Craig. I think that's right.
    Mr. Woodley. So, we are making a special provision for the 
smaller locks so that they would pay at a lower rate.
    Senator Craig. You say smaller locks, you mean smaller 
vessels?
    Mr. Woodley. No, sir, I mean smaller locks in the upper 
reaches of the system, the less than 600 foot long lock.
    Senator Craig. Oh, yes.
    Mr. Woodley. We would charge a smaller fee in order to 
provide for a more equitable distribution between the large 
locks and the smaller locks.
    The--I would expect that it would--so there's a net I can't 
figure out, the rest is a pretty straightforward calculation, 
but essentially we are projecting a need in the Fund of an 
additional $100 million a year in revenue, from whatever 
source, that it can come from indefinitely into the future as 
we continue to make the important improvements that we've made.
    We are, to some degree, a victim of our own success here, 
Senator, we have been able to budget--and the committee has 
supported--a very strong level of investment in the Inland 
Waterway System, in both new construction and in rehabilitation 
efforts. And that has--there was a time some years ago before I 
took office that the balances in the Inland Waterway Trust Fund 
had actually been allowed to accumulate, and increase. And we 
have invested those balances, but the needs for investment have 
outstripped the revenue that we're receiving from the tax.
    So, one thing that was surprising to me, in recent years, 
in spite of increases in traffic, the tax amounts, of 
collections, have actually in some--in one fiscal year--
declined. And that was a good thing, I guess, because----
    Senator Domenici. Why is that?
    Mr. Woodley. I believe that the reason is that the 
increases in fuel--in the cost of fuel--had encouraged the 
barge tow boat operators to repower their boats with more 
efficient diesel engines. Which is, of course, a good thing, 
unless you're counting on revenue from----
    Senator Craig. Sure.
    Mr. Woodley [continuing]. Them buying gallons of diesel 
fuel.
    So, this is certainly not something on which reasonable 
minds could not differ.
    Senator Craig. As this develops, we'll take a look at it.
    Last question, tied to that--non-commercial traffic, 
recreational traffic using the locks--?
    Mr. Woodley. Would not be charged any fee whatsoever, as is 
the case today.
    Senator Craig. As the current case.
    Senator Domenici. They don't pay now.
    Senator Craig. They don't pay now, no, and that's why I was 
saying----
    Mr. Woodley. On the other hand, the general revenue, the 
general fund pays 50 percent of the cost of rehabilitation, and 
all of the recreational people are, at least, we expect them to 
be taxpayers in some form or another.
    Senator Craig. Uniquely enough, but in the Snake Columbia 
System, a sizable amount and a growing traffic is in cruise 
boats, that literally make it all the way up to Lewiston, 
Idaho, Clarkston, Washington--sizable cruise boats. Are they 
considered commercial traffic in this sense, that they would 
pay a fee?
    Mr. Woodley. No, sir, I believe not. I believe that this is 
specifically for cargo-carrying barges.
    Senator Craig. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, General, Secretary.
    Senator Dorgan. The Senator from Louisiana?
    Senator Domenici, do you have an additional question?
    Senator Domenici. Yes, Mr. Chairman.
    I just wanted to close this up and talk to Secretary 
Woodley about this inland fee, waterway fee.
    You know, that was a--believe it or not, I was a freshman 
Senator when somehow or another I was challenged to do 
something about this, and passed a bill to tax the commercial 
barges. It was totally unexpected that it could be done, but we 
were aided and abetted by the Washington Post which took on the 
task of helping to pass this, by choosing the bill that would 
impose this tax to be their choice of a bill to educate their 
readers on how a bill is passed, how a law is made. And they 
logo-ized the bill, S. 789, and anytime anything was done, they 
put it on the front page, and editorially commented what phase 
this was of moving a bill.
    And of course, they played the Domenici--David against 
Goliath--and one afternoon we had a vote and we won by 12 votes 
in the United States Senate against Russell Long, my good 
friend from Louisiana. That's right.
    But let me tell you to close the record, because things are 
different now. But I won that hearing here and in the House, 
and then I was home campaigning for reelection, and I was told 
that somebody was going to open the issue while I was gone 
campaigning, and kill the tax. And my staff said, ``Abandon 
your campaign and come back,'' and I said, ``No, I can't do 
that. Can't you talk to somebody around there?''
    Well, the word got to Russell Long who had lost, I had beat 
him, that somebody threatened to do this. And he put in a phone 
call to me, and said, ``Don't you come back,''--he was a 
Democrat, I was a Republican--``You do your campaigning. I was 
beaten by you, fair game, and I'll see to it that nobody does 
that to your bill,'' himself. And, of course, I felt totally 
confident that he could do better than I, why should I return?
    And sure enough, the person--I know who it was, it was the 
Senator from the State with the lock that we were then 
building--and he saw better than to take on Russell Long, and 
the tax remained. It's been a long time, and I wish you well, 
in trying to pass a better one. And a better one would be what 
you're talking about. But don't think it will be easy, because 
people have to understand what's happening to them, and all 
kind of stories get told about what's happening to them, you 
know, until it gets down the facts. It takes a long time.
    Thank you, Mr. Chairman.
    Senator Dorgan. Thank you.
    Senator Landrieu.
    Senator Landrieu. Thank you, Mr. Chairman.
    And let me begin, I'm sorry that I was delayed in getting 
here, I had another markup in the Homeland Security Committee 
and had several bills pending, and so I apologize to the 
panelists for being late because this is a very, very important 
subject, as you know, for our State.
    But I'd like to begin, I'm going to submit my opening 
statement, Mr. Chairman, for the record. But, I'd like to begin 
by showing the expenditure chart, that is very concerning, and 
I don't think I have to explain this to the members of the 
committee who have been working on this issue long before I 
took a seat here.
    But, this is the civil works and capital investment, as a 
percentage of GDP, Mr. Chairman, and if I could just have you 
look up for just a second, at this chart, up here, it's really 
rather frightening to me.
    This is since 19--Alan, is it 1940? Since 1929. The civil 
works and capital investment is a percentage of the Gross 
Domestic Product, of which this budget sits within. I think 
this is frightening to our country. I don't think our country 
sustains its economic strength on a budget like this. We're 
going to have this chart updated, General, we're working on 
that now, it goes through 2001, but we're going to extend it 
out to the present.
    But, this brings me to my first question--that is, how are 
we justifying a Presidential budget of $800 million less than 
you used last year, when the needs are substantially greater, 
and the trend lines are extremely troubling. And I would like 
to hear from you, General, about what your comments have been 
about this, what speeches do you give about your ability to do 
your job that you have to do to protect people and to promote 
commerce with trend lines like this, and a budget that's $800 
million less than we had last year?
    General Van Antwerp. Well, ma'am, I think one thing that we 
looked at was the American Society of Civil Engineers scorecard 
that said the backlog in this particular area is about $1.6 
trillion. So, there's no question there is a huge need in the 
country to do this. What we did was, as best we were able, to 
put together a performance-based budget, based on the dollars 
that we have, to do the right things, and first things first. 
And so it was based on, there are health and safety, there are 
11 dam safety projects in there that we have to get at.
    There are a number of other projects we wanted to 
complete--we looked at cost/benefit ratios. So, basically we're 
taking a limited amount of money, and with some performance 
criteria that we could lay out for you, we racked and stacked 
those projects.
    But there is no question there is a huge backlog of 
infrastructure needs in the country.
    Senator Landrieu. Well, are you prepared to testify this 
morning, and if you would, suggest what percentage of those 
trillion dollar projects does not have a significant 
consequence for not completing them? Would you say that 10 
percent of them, or 20 percent of them, or 30 percent of them 
are actually completely without any merit? Or with such limited 
merit that we shouldn't, you know, shouldn't try to address 
them? Do you have any sort of handle on those projects?
    I understand that you've listed the trillion plus that you 
don't have money for, in some sort of rank order. I think that 
would be, actually, very easily said but very difficult to do.
    So, my question is, what percentage of that do you think we 
could potentially eliminate, and not suffer, really, a grave 
consequence? Whether it's flooding, or commerce, or et cetera?
    General Van Antwerp. Well, I guess I would approach it that 
the $1.6 trillion needs to be done over time, but some things 
are more urgent and compelling. For instance, when we look at 
the dams of the country--and there are over 3,500 significant 
ones--and then there are a lot of smaller agriculture and 
privately owned dams in this country, even.
    But, we look at those in categories one to six. And the 
most--the number 1, of which we are doing 11 of those right 
now, they are what we call ``urgent and compelling,'' we know 
that there is either seepage or piping, which is the material 
actually flowing with the water through the dam. Those need to 
be fixed now. Those are in the budget.
    We are studying Tier 2 but we're not getting at a lot of 
Tier 2. So, it goes like that. And Tier 6--that would be a 
dream for many, many years down.
    So, we're trying to really look at the life and health 
safety----
    Senator Landrieu. Where are the levees in that--levees not 
just for the Mississippi, but for the other major rivers?
    And, if Alan, you'd put up the next chart?
    General Van Antwerp. Well, we have 12,000 miles of levees 
in this country, one-third of the levees that are in harm's way 
are really in the Sacramento area, and then, of course, the 
levees in New Orleans and a lot of crucial levees across the 
country, we do have an inventory of them, we did a very 
extensive levee inventory, we know the risks and we're trying 
to get at those sections of levees first, that need to be done 
first.
    Senator Landrieu. Mr. Chairman, I think this chart is 
instructive. I asked my staff to basically show a chart of the 
major waterways, navigation waterways in the country.
    And as you can see, it's heavily weighted to the east 
coast, because the great river systems are in the east coast, 
and the channels along the southern part--which you can see 
from Texas all the way to Florida--is the intercoastal canal. 
There's also an intercoastal canal going up the eastern 
seaboard, which bears basically the predominant burden, if you 
will, and responsibility for the commerce of the Nation.
    And so, when people continue to say to me, well, ``Senator, 
Louisiana gets a very high portion of the Water bill,'' my 
simple response is, ``We have an inordinate proportion of the 
water.'' And the Water bill isn't a Desert Resources bill; it's 
a Water Resources bill. And basically, wherever the water is, 
that's where the resources need to go.
    So, I make no apologies for the 17 percent of the 
authorizations in that Water bill, and intend to see all of 
them built and--planned and built over time. But you can see 
why Louisiana, and to some degree Mississippi--because we share 
the mouth of the river, Mr. Chairman. But this drainage system 
impacts our Corps of Engineer district, I would suggest, unlike 
any in the country.
    Now, it is really telling to me, to understand the water 
battles in the West. I now understand them after looking at 
this chart, because they simply don't have enough. And what 
they do have, they're trying to use some for power and some for 
irrigation, I'm not certain they have, really, for either one.
    And at great expense to the Nation, to try to help them 
figure out their situation which I'm very sympathetic for. But 
our situation is the opposite. Today, I understand--did the 
spillway open today? Did you order the spillway opened, or did 
your Director?
    General Van Antwerp. Ma'am, I did, at 10 o'clock this 
morning, so----
    Senator Landrieu. The spillway was open. Today, because the 
river is so high, at 10 o'clock this morning, which is----
    General Van Antwerp. I think if I could correct myself, I 
think the announcement was going to be made, but I don't 
believe it's going to be open until probably tomorrow.
    Senator Landrieu. Okay, but today at 10 o'clock, Mr. 
Chairman----
    General Van Antwerp. The announcement.
    Senator Landrieu. The spillway, which is a great, sort of, 
flood prevention mechanism, if you will, is being opened for 
the first time since 1997. Because the river, the Mississippi 
River is so high, as we've all been following now for, 
actually, weeks, and the Corps has made a decision. The good 
thing about that decision, it will prevent flooding. The bad 
news about that decision, is moving water from the river into a 
fresh-water lake system has other consequences that we have to 
deal with.
    But, this is a constant battle where--in the State that I 
represent--trying to manage this water. And let me just say, 
Mr. Chairman, we can not manage it on the budget we have.
    We will have another major floods--this last one cost 
upwards of $200 billion to the Federal Government, that's going 
to be the cost of Katrina/Rita when all is said and done. And 
the primary--the primary reason of that number is not the 
hurricanes that could not be avoided, it's the collapse of the 
infrastructure system that should have held, and didn't.
    So, I know that I'm going on past my time, and I do have a 
few questions if the chairman would give me just a few more 
minutes.
    Senator Dorgan. Let me observe, the vote has just started, 
I believe, in the Senate.
    Senator Landrieu. Okay.
    Senator Dorgan. So, we'll have a very brief period, and 
then we're going to have to go back to the Senate to vote.
    Senator Landrieu. Does Senator Murray have a question? 
Okay, let me then just ask one question, but I'll wrap this up 
by saying, we cannot sustain this budget either in the State of 
Louisiana or in the country.
    Just real quickly--are you considering the drainage to the 
river proposal to the metropolitan area of New Orleans? In 
other words, the pump to the river, as opposed to the pump to 
the lake proposal? And just a very brief answer, is it even on 
your radar screen? Because it's a very important project for us 
to consider, as a better way to fix our system so it doesn't 
break again?
    General Van Antwerp. Yes, ma'am, we are. We're considering 
that as an alternative.
    Senator Landrieu. Okay, and second the Morganza to the gulf 
project, which you all have temporarily put on hold, when was 
the last time you used section 902, if you know, to prohibit 
the advancement of a project that's been authorized by this 
Congress? Do you know?
    Mr. Woodley. Senator, our practice is when we believe that 
a project is going to exceed the amount authorized by Congress, 
our practice is to return to Congress and to achieve--to make 
that known--and to seek additional authorization, and I believe 
that that is a longstanding practice, and that that is indeed 
by far the most appropriate thing for the agency to do under 
the circumstances.
    Senator Landrieu. Well, I'd like to know the last time, and 
my final word on this, it took us 25 years, Mr. Chairman, to 
get this project authorized. The Corps is the one that gives us 
the estimates. So this game--which I call it a game--they give 
you a low estimate, you can't get a higher estimate in the bill 
if their estimate is low--so they give you a low estimate, you 
finally get it authorized after you get it authorized, they 
tell you, then, it's too little and we can't--you know, we 
can't go forward.
    So, we're going to be visiting this again, this issue of 
Morganza to the gulf.
    Senator Dorgan. Senator Landrieu, Thank you very much, 
Senator Murray?
    Senator Murray. Thank you, Mr. Chairman, I know a vote's 
been called, but I want to ask just two critical questions and 
one is on the Centralia Flood Project. This is the first budget 
request since the passage of WRDA, and the Centralia Flood 
Control Project was included in that bill, it's a much needed 
project to prevent further damage from the Chehalis River 
rising over its banks.
    Now, I understand there are many projects that need funds, 
but it is really shortsighted to pass up an opportunity to get 
moving on this levy project. Can you share with me why this was 
not included in the President's proposed budget?
    Mr. Woodley. Yes, Senator. The authorization came, I 
believe, in November. By that time, our budget is very much in 
place, and very few changes are made--I was only able to make a 
very few changes to respond to matters that were included in 
the authorization. We will be working on that project for 
future fiscal years----
    Senator Murray. So, you do expect it to be in the next 
request?
    Mr. Woodley. I will say that unless--I have not seen how it 
competes in that process, it will be in a position to compete, 
I believe, in that process----
    Senator Murray. To compete in that process--that doesn't 
sound very promising.
    Mr. Woodley. No, it doesn't sound very promising, Senator, 
I will say that we have not----
    Senator Murray. Well, I mean this is my frustration in my--
go ahead.
    Mr. Woodley. We have not funded new starts in our budget, 
generally speaking, for some time.
    Senator Murray. Well, my understanding is----
    Mr. Woodley. That is a new start.
    Senator Murray. Yes, the capacity of this is $1.2 million.
    Mr. Chairman, these are what we have to do because the 
administration doesn't send us the adequate requests that we 
have passed in our authorization bills. We end up having to--
and this project, I think, is about $1.2 million that is needed 
this year--have to do it as an earmark, and then we hear, 
``Well, all the bills are going to be vetoed that have 
earmarks,'' well, that's irresponsible. We have to start 
figuring out the honesty of this budget process, and realize 
that the reason that we have to go back and do these earmarks 
is because we have an administration that is not following 
through and giving us what we need in authorized projects.
    And quickly, on the Chehalis River Basin Study, same idea. 
This is a project that is sitting out there, can you tell me 
why that was left off the table?
    Mr. Woodley. Pardon?
    We don't have the details on the Chehalis, so if you pardon 
me one second, I may be able to get you----
    Senator I apologize, I will have to answer that for the 
record.
    Senator Murray. I would appreciate that, and appreciate the 
opportunity, Mr. Chairman, to come back and ask those 
questions. I think my State is seeing what a lot of States are, 
we're losing homes, and it's costing us millions of dollars in 
damage, because we're not doing an adequate job of fulfilling 
our responsibilities as a country.
    Thank you, Mr. Chairman.
    Senator Dorgan. There's about 6 or 7 minutes left on this 
vote. Senator Landrieu, I should mention to you that I asked 
questions about the request that has been made with respect to 
the gulf, and especially the $1.5 billion anticipated local 
share which should be paid in a short period of time. I asked 
questions about how they expected that region to pay a local 
share, when WRDA would have anticipated that to the extent that 
local share existed, they might have up to 30 years. So, I 
asked that series of questions on the record, I wanted you to 
know.
    Senator Murray. Thank you.
    Senator Landrieu. And may I just say, for the record, I 
thank the Chair, because that is something I'd like to work out 
a longer time to pay, but Washington power permits, Port of 
Iberia, category five report and the ongoing cooperative 
arrangements with the Dutch were other things I wanted to ask. 
I'll submit those questions to the record, and I really thank 
the chairman for asking some of the questions about the cost 
share that's very important for us to tackle, thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Dorgan. Let me thank all of the witnesses who've 
appeared today, I apologize that we've had a vote intervene, 
but I think we have at least exhausted many of the inquiries 
that we wanted to make, and there--we will submit a list of 
written questions, and we appreciate your being at this 
hearing.
    [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. John Paul Woodley, Jr.
            Questions Submitted by Senator Pete V. Domenici
                       inland waterway trust fund
    Question. Secretary Woodley, In your testimony before this 
subcommittee last year you told us that there was a looming problem 
with the Inland Waterways Trust Fund that needed to be addressed. 
However, we never received a proposal. The President's fiscal year 2009 
budget proposal announced that legislation would be forthcoming to 
address the shortfall in the Inland Waterway Trust Fund. Finally, last 
week the administration proposal was submitted to Congress. What took 
so long to get us this legislation?
    Answer. Coordination within the administration took longer than we 
originally anticipated.
    Question. The fiscal year 2009 budget submittal states that the 
President's request utilizes all balances in the Trust Fund as well as 
all receipts expected to be generated in 2009. This is about $167 
million. How much have we been funding on average for Inland Waterways 
over the last several years?
    Answer. Annual funding from the Inland Waterways Trust Fund 
increased from $102 million in fiscal year 2003, to $203 million in 
fiscal year 2007 for an average of $149 million for the period fiscal 
year 2003-2007.
    Question. How much does the current Inland Waterways Trust Fund 
generate in annual receipts?
    Answer. The existing $0.20 per gallon diesel fuel tax generates 
about $90 million per year.
    Question. Then you have known for a number of years that this day 
of reckoning was coming and you waited until now, halfway through the 
fiscal year, to make this type of proposal?
    Answer. The balance in the Trust Fund has been adequate until the 
last 2 years when it became clear that project costs were increasing 
dramatically and the number of construction and major rehabilitation 
projects were increasing, while revenues were generally declining.
    Question. This will be tough legislation to get enacted in any 
year, much less this year. It took me several years before I was able 
to finally get the initial legislation establishing the Inland Waterway 
Trust Fund enacted in 1978. And now, you want us to completely change 
the funding mechanism in the next 6 months?
    Answer. Due to the continuing decline in the Trust Fund balance we 
urge Congress to take action at its earliest convenience.
    Question. What has been the navigation industry's reaction to your 
proposal to phase out the fuel tax and replace it with a lock user fee?
    Answer. The navigation industry in general does not support the 
imposition of any additional costs on the industry to increase revenues 
to the Trust Fund, through either lock user fees or increased taxes. 
The industry supports increased Federal expenditures and reduced Inland 
Waterways Trust Fund contributions by changing the cost-sharing 
percentages from 50 percent Federal and 50 percent Trust Fund to 75 
percent Federal and 25 percent Trust Fund.
    Question. The fuel tax has been 20 cents per gallon for more than 
10 years. Was any thought given to a proposal to raise the fuel tax? 
Why was that idea rejected?
    Answer. Yes, consideration was given to raising the fuel tax. 
However, the user fee more appropriately aligns the costs and revenues 
by financing the Trust Fund's 50 percent share of the capital costs 
from revenues paid by the users who most directly benefit from reduced 
lock outages, improved safety, reductions in the time per lockage, and 
other benefits associated with the expenditures for new locks, lock 
replacements and expansions, and rehabilitations. The existing fuel tax 
is paid by towboat operators purchasing fuel on the 27 inland and 
intracoastal waterways listed in 33 U.S.C. 1804. Operators do not pay a 
fuel tax on the 40 waterways segments that are not listed, even when 
they use a lock, while operators on the extensive open water reaches of 
the system (such as on the Lower Mississippi River) are paying a 
substantial portion of the overall fuel tax where there are no locks 
and dams. Therefore, many system users receive little direct benefit 
from the investments that are being funded with the fuel tax, while 
others are receiving these benefits but not paying for them.
    Question. It appears that the proposed lock user fee will fluctuate 
depending on the balances in the Trust Fund? Do you believe the 
industry will support a user fee that could change up or down annually?
    Answer. We believe that a fee schedule that provides sufficient 
funding to construct, replace, or rehabilitate the infrastructure 
desired by the industry, while not creating a large surplus or 
depleting the balance in the Trust Fund, could be supported since it is 
in the overall interest of the industry.
                             budget request
    Question. Secretary Woodley, in your press release on the fiscal 
year 2009 budget you state that ``The budget represents the prudent use 
of available funding to advance important, mission-based objectives. I 
am proud to present it.''
    What exactly are you proud of? Is it the decrease of $79 million 
over what you proposed in fiscal year 2008, or is it the $851 million 
decrease from what we provided in the fiscal year 2008 Omnibus?
    Answer. We are keenly aware that the nation has many competing 
needs, and this budget reflects the President's priorities for the 
Civil Works program. The Army Corps of Engineers must execute the 
budgetary resources it is provided as efficiently and effectively as 
possible. The budget provides a continued high level of funding for 
operation and maintenance of key infrastructure, with a $16 million 
increase over last year's budget. The budget also focuses resources on 
completing the highest-return construction projects, in order to 
realize their economic and environmental benefits sooner, giving 
priority to 79 high performing projects and will result in 12 project 
completions in fiscal year 2009, bringing significant benefits on line.
    Question. Is it prudent to provide no funding for projects that 
have been under construction for years?
    Answer. The fiscal year 2009 budget uses objective performance 
measures to establish priorities among projects and, through a proposed 
statutory change in Corps contracting practices, would also increase 
control over future costs. The performance measures used include the 
benefit-to-cost ratios for projects with economic outputs; and, for 
aquatic ecosystem restoration projects, 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. The 
selection process also gives priority to dam safety assurance, seepage 
control, static instability correction, and to projects that address a 
significant risk to human safety. Under each of these criteria, 
resources are allocated based on performance. This approach 
significantly improves the realization of benefits to the Nation from 
the Civil Works construction program and will improve overall program 
performance by allowing the Nation to realize the benefits of the 
projects with the best net returns (per dollar invested) sooner.
    Question. What are we supposed to tell the project sponsors that 
are sharing in the costs of these projects?
    Answer. The President's fiscal year 2009 budget for the Army Civil 
Works program is based on performance. All funds available for Civil 
Works are allocated in the budget based on the outputs and outcomes 
they would produce, and no funds are explicitly requested for paybacks. 
Likewise, the Corps capabilities to perform additional work are 
formulated based on the prospective work that could be performed, not 
based on prior reprogrammings and other transactions.
    Question. It will cost them more. It will cost us more. Again, how 
is this prudent?
    Answer. This budget is based on the administration's desire to 
produce a performance based budget focusing on completing investment 
opportunities that will yield good returns for the Nation in the 
future. It also provides the highest level of funding ever requested 
for the Civil Works program in the President's budget.
                                earmarks
    Question. Secretary Woodley, Could you explain the President's 
Executive order on earmarks?
    Answer. Executive Order No. 13457, entitled ``Protecting American 
Taxpayers from Government Spending on Wasteful Earmarks'', is intended 
to ensure that Federal funds are spent in accordance with laws, 
regulations, and merit-based decisionmaking. The recent performance-
based budgets for the Civil Works program are examples of the 
application of merit-based decisionmaking.
    Question. Based on what you know, how do you believe it will be 
implemented?
    Answer. Implementation guidance has not yet been developed. The 
Executive order is prospective and does not apply to previously enacted 
appropriations for fiscal year 2008, so as yet we have no experience 
implementing it. The Executive order supports this administration's 
strong emphasis on performance-based decisionmaking, as reflected in 
the President's Management Agenda and recent Civil Works budgets.
    Question. Secretary Woodley, do you believe that in a project based 
budget such as yours, that all of the projects in the statement of 
managers will be considered as earmarks that are advisory under this 
Executive order?
    Answer. Thoughtful consideration needs to be applied to the 
question of the designation ``earmark'' in programs, like the Army 
Civil Works program, that historically have been line-item funded for 
individual programs, projects, and activities. I believe the Executive 
order should be applied in a way that furthers the intent of 
encouraging performance based decisionmaking.
    Question. If I understand you correctly, the Intent of Congress is 
irrelevant under this Executive order. Is that correct?
    Answer. The Comptroller General established years ago that 
committee reports accompanying Acts of Congress are advisory, but are 
to be afforded great deference. Moreover, the Comptroller General 
advised that if the executive branch intends to act contrary to the 
statement of managers as laid out in such a report, an explanation is 
owed to the committee or committees that issued the guidance. Also, the 
statement of managers and other committee reports are part of the 
legislative history of the respective appropriations acts.
    Question. Have you considered how you will manage a program if all 
of these projects are contained in legislative language? You have 
always had some flexibility to allow proper management of your 
respective programs. This Executive order seems to be hurting you, more 
than it is restraining Congress. Won't your jobs be harder?
    Answer. Certainly, having allocations to each program, project and 
activity laid out in statutory language would change current management 
practices to some extent and would require greater attention and 
accuracy in the development of cost estimates. Such legislation also 
could include provisions authorizing reprogrammings or transfers among 
the line items within specified limits, which would give the program 
managers some flexibility.
    Question. How will you deal with emergency situations if all 
funding is earmarked in legislative language?
    I can assure you that Congress is not going to provide you a lump 
sum appropriation and trust that you will do the right thing. That 
would be irresponsible of us and an abdication of our constitutional 
duties. Additionally, it would also impede our ability to undertake 
proper oversight over your execution of these programs.
    Answer. If Congress were to itemize funding allocations in 
statutory language, either directly or by referencing the statement of 
managers, it would be critically important for Congress to also provide 
a mechanism to ensure that agencies have sufficient discretion to 
respond to emergencies. This could be done by statutory establishment 
of reprogramming or transfer process and conditions and/or by providing 
a line item allotment of funding to be used for emergency purposes. An 
example would be the emergency transfer authority provided to the 
Secretary of the Army in Public Law 84-99. I would note that in fiscal 
year 2007, while operating under a year-long continuing resolution, my 
staff worked closely with the Army Corps of Engineers Headquarters to 
first establish objective, transparent criteria and then to apply those 
criteria in allocating the fiscal year 2007 appropriations for the 
Civil Works program. If the executive branch were to be allowed great 
discretion in allocating Civil Works appropriations, then advance 
consultation on transparent, merit-based criteria and periodic 
reporting to Congress on program execution certainly would be 
appropriate to ensure Congress has sufficient information to carry out 
its oversight role.
                                 ______
                                 
      Questions Submitted to Lieutenant General Robert Van Antwerp
             Questions Submitted by Senator Byron L. Dorgan
                      collective bargaining rights
    Question. What impact, if any, will implementation of the HPO have 
on collective bargaining rights and the way in which Corps employees 
are represented by Federal employee unions during and after the 
implementation of the HPO? What impact, if any, will implementation of 
the HPO have on existing bargaining units within the agency, the rights 
of employees to collectively bargain within the agency and on the 
ability of various unions to continue to represent employees in the 
agency after collective bargaining agreements expire and are 
renegotiated? Will any positions within existing bargaining units be 
moved to new bargaining units? Will any positions within existing 
bargaining units be moved outside bargaining units? Why will this HPO 
be different from the logistics HPO which cast 400 employees out of 
collective bargaining arrangements for no apparent reason, given that 
their work and their worksites have not changed?
    Answer. We do not expect any change in bargaining rights. Unlike 
the Logistics High Performing Organization (HPO), the NavLocks study is 
not proposing to create a new organizational entity, therefore, local 
labor relations agreements will continue as negotiated locally.
        negotiating over appropriate arrangements and procedures
    Question. Many of the employees affected by the HPO will be 
represented by unions, both during and after implementation. Does the 
Corps acknowledge unreservedly that all represented Federal employees 
would be able to negotiate at the local level appropriate arrangements 
and procedures of the HPO and if necessary pursue appeals to Federal 
labor authorities including but not limited to the Federal Labor 
Relations Authority and Merit Systems Protection Board? What 
differences if any would there be in terms of negotiating over impact 
and implementation at the local level under the HPO and if the HPO were 
instead being separately implemented by several Corps districts 
simultaneously as several distinct reorganizations?
    Answer. There will not be any changes in bargaining rights. The 
study is not proposing a new organizational entity, therefore, local 
labor relations agreements will continue as negotiated locally. No 
Corps district reorganization is recommended in this study.
                               workforce
    Question. Will there be fewer Federal employee jobs in the locks & 
dams, district offices, and fleet maintenance crews during 
implementation and the first 5 years after implementation than there 
were on the first day of the HPO's development? If so, please provide 
an explanation that includes estimates for the Federal employee jobs 
lost for each of the three categories (locks & dams, fleet maintenance, 
and district offices). If there will be fewer jobs, how will these 
reductions be achieved in each of the three categories? What role will 
attrition play in reducing the workforce? If attrition will be used, 
when and to what extent will it be used in each of the three 
categories? Corps management has said that no employee would 
involuntarily lose his job because of the HPO--is this still the case? 
What, if any, job losses will there be through re-engineering of jobs, 
i.e., retaining the jobs but changing the types of positions, thus 
leaving current employees unqualified? In which if any of the three 
categories [locks & dams, district offices, and fleet maintenance 
crews] do you anticipate adding Federal employee jobs, and by how many? 
If so, what efforts will the Corps undertake to ensure that it has the 
funding necessary to hire the additional employees? If the HPO 
recommends an increase in the number of Federal employees, will OMB 
allow for such an increase?
    Answer. We cannot predict future funding levels and events that are 
beyond the control of the Corps and that may impact staffing levels 
throughout the organization. However, given sufficient funding for 
operating and maintaining the locks and dams, there would be no net 
loss of jobs as a result of this study. The study is not going to 
propose any new organizational entity to operate and maintain the locks 
and dams in the inland waterway system. The study will be recommending 
a series of business process improvements that are intended to provide 
consistency in O&M procedures across the Corps, while working within 
the long-range strategy of applying resources to the most critical 
projects based on risk and reliability within a watershed (or division) 
boundaries.
    If the study should recommend increases in staffing, the funds to 
support those positions would be considered through the normal budget 
process.
                            contracting out
    Question. Corps employees were told by the agency's management that 
the HPO would obviate the need for any contracting out. What 
contracting out of work either performed by Federal employees or last 
performed by Federal employees (e.g., employees who are lost through 
attrition) would occur as part of the HPO? If contracting out of work 
currently performed or last performed by Federal employees is part of 
the HPO, in which of the three categories of affected work would this 
contracting out occur, the work of how many Federal employees would be 
affected for each category, and through what procurement process would 
this contracting out occur? Would Federal employees, either already on 
the agency's staff or to be added later, be given opportunities to 
perform new work and work currently outsourced? If so, in which 
categories would this insourcing occur, the work of how many Federal 
employees would be insourced, and through what process would this 
insourcing occur?
    Answer. No contracting out of work performed by Federal employees 
will occur as part of or as a result of the study. Additionally, work 
previously outsourced may be considered for insourcing through an 
appropriate process allowed under the prevailing legislation. We do not 
have any estimate of number of positions that may be considered for 
insourcing, pending additional analysis after the completion of this 
study and as existing contracts are up for renewal.
                          terms of employment
    Question. Employees who were involved in the logistics HPO and the 
information management A-76 were forced to reapply for their jobs. Will 
any of the employees covered by the HPO be required to reapply for 
their jobs? If so, which ones? Will any of the employees covered by the 
HPO be involuntarily required to take downgrades? If so, which ones? 
Will any of the permanent employees covered by the HPO be involuntarily 
required to take seasonal employment? If so, which ones? Will the HPO 
change the pay structure of locks and dams operations and maintenance 
personnel based on where they live? Will district office personnel be 
expected to move to another district office? Please provide estimates 
by district on the numbers of district employees to be shifted to other 
districts. What adverse impacts will the HPO have for fleet maintenance 
personnel? Will fleet maintenance personnel be expected to move to 
other districts? Please provide estimates by district on the numbers of 
affected fleet maintenance employees to be shifted to new districts. 
Would fleet maintenance personnel be expected to work more outside of 
their home districts? If so, for how many more days per year?
    Answer. No employee will be required to reapply for his/her job, 
take a downgrade, or to change status from permanent to seasonal. The 
study does not recommend changes to the existing Corps chain-of-
command, organizational structure, or a decrease in the staffing 
levels.
    The NavLocks study will not require that employees in a district 
office move to another district office.
    The NavLocks study will not recommend that employees in one 
district's maintenance fleet permanently move to another district's 
maintenance fleet. However, on a short term basis, as is the current 
practice, we envision using personnel from several districts' 
maintenance fleets to assists other districts to more rapidly restore 
functionality/operating capability to a lock. As we try to manage work 
and perform the most critical tasks in a river system, on a short term 
basis, we envision making teams of service personnel from maintenance 
fleets to increase capability to quickly perform tasks to minimize 
system downtime. We realize that working away from home is inconvenient 
to employees and we will try to minimize the adverse impacts to the 
extent possible.
                             hpo structure
    Question. To what extent is the HPO different from reorganizations 
that Corps districts could accomplish on their own? What additional 
legislative authority will the Corps be seeking in order to carry out 
the HPO? Will districts continue to decide, within the parameters set 
by the Congress, how money is spent on locks and dams projects--or will 
such decisions be made by another entity, perhaps one created by the 
implementation of the HPO? Will districts continue to negotiate and 
administer contracts for locks and dams--or will such arrangements be 
determined by another entity, perhaps one created by the implementation 
of the HPO?
    Answer. The study is conducted Corps-wide for improving reliability 
and availability of the entire inland navigation system through better 
business processes. The study is not being conducted for the purpose of 
reorganizing districts; therefore, it should not be confused with 
``reorganizations'' that could be done by individual districts, based 
on their workload and/or mission changes. Regarding how money is spent 
on locks and dams projects, there will be no new organization as a 
result of the HPO and districts will continue to carry out their 
current role with regard to determining how funding is to be spent. No 
change is anticipated to the current budget development and program 
execution processes.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                          civil works program
    Question. General Van Antwerp, in your role as the Chief of 
Engineers, what do you see as the major water resource challenges 
facing this Country in the future?
    Answer. The facilities owned and operated by, or on behalf of, the 
Corps of Engineers are aging and may not have undergone a recent major 
rehabilitation. 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 maintenance is becoming more 
expensive as this infrastructure ages.
    Question. What level of funding would be necessary to maintain the 
progress realized in the Civil Works Program through the enacted 
appropriations levels for the past couple of years?
    Answer. Sir, while I cannot give you an exact number at this time, 
I believe that approximately $6 billion should be sufficient to 
maintain and continue the funding level appropriated over the last 
couple of years.
    Question. If the administration's budget proposal is enacted, what 
will be the impact on meeting the Army Corps' O&M backlog? The 
construction backlog?
    Answer. The budget of the President is viewed as the appropriate 
mix of construction and O&M funding as well as the appropriate level 
for those respective activities. The operations and maintenance backlog 
and the construction backlog do not represent a prioritization of work 
either within the two accounts or between different accounts in the 
Corps. For instance, some work in the backlog is higher priority, 
whereas other work may be a lower priority relative to funding needs in 
other Corps areas. The proposed fiscal year 2009 funding for O&M and 
construction does not significantly reduce the O&M and construction 
backlogs.
    Question. What is the percentage of the Nation's commerce that come 
into or leaves this country that goes through a Corps built and 
maintained harbor?
    Answer. Sir, we estimate that 95 percent of our Nation's foreign 
commerce goes through our Federally maintained harbors and channels.
    Question. Could you characterize the proportion of the 
discretionary budget of the Federal Government that is directed toward 
building and maintaining this Country's water infrastructure today 
versus 30 years ago?
    Answer. One way is to compare absolute budget amounts over time. 
For example, the discretionary budget of the United States is five 
times larger today than it was 30 years ago while the Corps' 
discretionary budget has doubled in size over the past 30 years. 
Another comparison is a relative comparison over time. Thirty years 
ago, slightly more than 1 percent of the discretionary budget of the 
Federal Government was designated to the Corps of Engineers to build 
and maintain the country's infrastructure. Today less than one-half of 
1 percent of the Federal Government's discretionary budget is proposed 
for the Corps of Engineers to build and maintain the country's 
infrastructure.
    In 1978 the Corps of Engineers' budget relative to the total 
discretionary budget allowance = $2.778 billion/$259.940 billion = 
.0106 or 1.06 percent. In 2008, the Corps of Engineers' budget relative 
to the total discretionary budget of the Nation = $5.586 billion/
$1,153.798 billion = .0048 or 0.48 percent.
    Question. Could you provide a historical perspective on the value 
of the Nation's inland waterways for National security and economic 
security?
    Answer. The Corps navigation services play an essential role in 
ensuring that commercial goods move smoothly along the Nation's ports 
and waterways distribution chain. A smooth, well-functioning navigation 
system is crucial to the Nation's economy. Inland and intracoastal 
waterways directly serve 38 states throughout the Nation's heartland as 
well as the States on the Atlantic seaboard, the gulf coast and the 
Pacific Northwest. The shippers and consumers in these States depend on 
the inland waterways to move about 630 million tons of cargo valued at 
over $73 billion annually. States on the gulf coast and throughout the 
Midwest and Ohio Valley especially depend on the inland and 
intracoastal waterways. Texas and Louisiana each ship over $10 billion 
worth of cargo annually, while Illinois, Pennsylvania, West Virginia, 
Kentucky, Mississippi, Alabama, and Washington State each ship between 
$2 billion and $10 billion annually. Another eight States ship at least 
$1 billion annually. According to research by the Tennessee Valley 
Authority, this cargo moves at an average transportation savings of 
$10.67 per ton compared to other modes of transportation. The unit cost 
to transport commodities over inland waterways is two to three times 
lower than other forms of transportation. Corps navigation projects 
also help limit air pollution emissions by enabling tows with many 
barges to move cargo long distances on considerably less fuel than 
trains or trucks would need to move the same amount of cargo the same 
distance.
    The inland waterways have played a key role in National defense and 
military strategy. During World War II, large quantities of strategic 
commodities were moved on the inland and intracoastal waterways. During 
the war period, the total annual ton-mileage more than doubled the 
record peacetime movements on the Mississippi, Ohio, and Illinois 
Rivers. The Gulf Intracoastal Waterway played a crucial role in moving 
strategic commodities, particularly crude and refined petroleum, and in 
1944 carried five times as much freight as in 1939. Barges were 
credited with transporting over 1.7 billion barrels of petroleum and 
petroleum products, equal to more than 7 million tank car loads, or 
73,000 trains of 100 cars each. The Gulf and Atlantic Intracoastal 
Waterways provided a protected route for the daily delivery of some 1.3 
million barrels of petroleum, in contrast with oceangoing tankers that 
were vulnerable to submarine attack. The waterways also served the 
shipbuilding and repair industries. During World War II the number of 
inland shipbuilding and repair facilities increased from 85 to 140. At 
the end of the war the Army also shipped grain down the Mississippi as 
part of the European civilian relief program.
    The waterways continue to move strategic cargo destined for 
military facilities, especially petroleum products such as gasoline, 
distillate and jet fuels, military cargo and equipment. Moving military 
vehicles and equipment by barge has provided increased security and 
simplified loading and unloading compared to rail, and has saved fuel 
and wear-and-tear compared to over-the-road moves.
    Another key role of the waterways today is for the movement of 
oversized cargo that would be difficult or impossible to move by road 
or rail. Waterways are used to move industrial plant components, 
including nuclear reactors and other power plant equipment, offshore 
oil platforms, as well as automobile factory presses and even rocket 
boosters from assembly plants to Cape Canaveral.
    Question. How much unobligated funding did the Corps carry over 
from fiscal year 2008 to fiscal year 2009?
    Answer. Mr. Chairman., our total carryover of unobligated 
appropriated Civil Works funds from fiscal year 2007 to fiscal year 
2008 was $7.4 billion. Our estimated carryover into fiscal year 2009 is 
estimated to be $5.2 billion, including supplemental funding.
    Question. To what do you attribute this large carryover?
    Answer. In brief, the carryover is attributable to a surge in 
supplemental funding and changes in internal processes. Of the total 
projected carryover of $5.2 billion, about $3.5 billion is Flood 
Control and Coastal Emergencies and Construction funds that were 
appropriated for reconstruction of New Orleans area protection and that 
will be obligated through fiscal year 2011. Another $600 million is 
other supplemental funds that were appropriated for the rehabilitation 
of projects damaged in the numerous storm and hurricane events in the 
past few years, but that cannot be obligated through fiscal year 2008. 
Finally, $1.1 billion is regularly appropriated funds. Carryover of 
regular funds is projected to grow from around $300 to $400 million in 
the years preceding fiscal year 2006 to the $1.1 billion figure due to 
changes in contracting and reprogramming processes in response to the 
guidance in the fiscal year 2006 conference report and fiscal year 2008 
statement of managers. These changes emphasize carrying over funds 
where necessary to fully fund contracts, and limiting the reprogramming 
of funds. The Corps plans to reduce carryover in the future by 
improving its scheduling and estimating practices prior to projects 
receiving funds, and by focusing on project execution, such as metrics 
for obligations and milestones, once funds are received.
    Question. What tools could we give you to help manage the program 
better?
    Answer. Mr. Chairman, I believe recent Congressional direction has 
improved Corps business practices with regard to the management of 
appropriations. Our goal is to plan well and to execute funds as 
planned, rather than to simply maximize expenditures. In the interest 
of administrative efficiency, we would welcome greater flexibility in 
allocating funds among operation and maintenance activities, and we 
would like to explore the possibility of reducing prior notification 
requirements for reprogramming, while remaining focused on executing as 
planned. This would involve giving clear guidance to the field on when 
and when not to reprogram, and then freeing them to operate within the 
framework of that guidance. This also would involve continuing to 
provide periodic reports to Congress on reprogramming, to ensure the 
necessary oversight.
    Question. General Van Antwerp, the fiscal year 2008 Omnibus 
required you to submit a report by May 1, 2008 concerning the positive 
and negative impacts of the revised policy on continuing contracts to 
the execution of the Civil Works Program. Can you give us a preview of 
this report?
    Answer. This report will discuss changes in Corps processes that 
were incorporated into execution plans and acquisition strategies to 
ensure that implementation of programs, projects, and activities (PPAs) 
complies with Congressional guidance. It will discuss impacts of the 
changes and offer recommendations.
                                 ______
                                 
                Questions Submitted to Robert W. Johnson
             Questions Submitted by Senator Byron L. Dorgan
                                drought
    Question. What is the prediction for the drought situation across 
the West in fiscal year 2009? We are entering our 9th year of the 
drought in western North Dakota.
    Answer. As a general rule, for every year of drought as many years 
of above-normal precipitation is needed to counter the effects of 
drought. Without significant snow pack or substantial rainfall, current 
drought conditions are expected to continue. Precipitation outlooks are 
generally unreliable beyond 3 months. Reclamation itself does not 
forecast weather or drought conditions. Reclamation tracks current 
drought conditions based on information provided by other agencies 
focused on weather, including the National Oceanic and Atmospheric 
Administration's Climate Prediction Center (http://www.cpc.noaa.gov/), 
and the Drought Monitor, managed by the National Drought Mitigation 
Center (http://www.drought.unl.edu/dm/monitor.html).
                          energy and water act
    Question. There are a number of projects in the fiscal year 2008 
Energy and Water Act that were not included in the President's fiscal 
year 2009 budget request. Can you provide us the capability amounts 
needed for those projects?
    Answer. The projects are California Bay-Delta Restoration and 
Central Valley Project Restoration Fund. The capability statements are 
below:
    Project Name in Hill Request.--California Bay-Delta Ecosystem 
Restoration (CA)
    Bureau Project.--California Bay-Delta Restoration (CA)
    Appropriation.--California Bay-Delta Restoration
    Authorization.--The Reclamation Act of 1902, as amended and 
supplemented, June 17, 1902; Public Law 89-561, Feasibility Studies, 
September 7, 1965; Public Law 96-375, Feasibility Studies, October 3, 
1980; Reclamation Projects Authorization and Adjustments Act of 1992, 
title XXXIV of Public Law 102-575, October 30, 1992; and Public Law 
104-333, the Omnibus Parks and Public Lands Management Act of 1996, 
title XI, California Bay-Delta Environmental Enhancement Act, November 
12, 1996; Public Law 107-66, Energy and Water Development 
Appropriations Act, 2002, November 21, 2001; Public Law 108-7, 
Consolidated Appropriations Resolution, 2003, February 20, 2003; Public 
Law 108-137, Energy & Water Development Appropriations Act, 2004, 
December 1, 2003; and Public Law 108-361, Calfed Bay-Delta 
Authorization Act, October 25, 2004.

                                            CALFED BAY-DELTA PROGRAM
                                           [Summarized Financial Data]
----------------------------------------------------------------------------------------------------------------
                                                                      Federal       Non-Federal        Total
----------------------------------------------------------------------------------------------------------------
Total Estimated Cost............................................         ( \1\ )         ( \1\ )         ( \1\ )
Allocations through fiscal year 2007 \2\........................    $292,778,000  ..............    $292,778,000
Approved by Congress fiscal year 2008...........................      40,098,000  ..............      40,098,000
Budget Request for fiscal year 2009.............................      32,000,000  ..............      32,000,000
Balance to Complete after fiscal year 2009......................         ( \1\ )         ( \1\ )         ( \1\ )
Amount Requested by Member (H)..................................      40,000,000  ..............      40,000,000
Amount Requested by Member (S)..................................      42,000,000  ..............      42,000,000
Additional Capability for fiscal year 2009......................      10,000,000  ..............      10,000,000
----------------------------------------------------------------------------------------------------------------
\1\ Unknown.
\2\ The $292.7 million reflects funds appropriated to the California Bay-Delta Restoration Account in fiscal
  year 1998 through fiscal year 2000 and fiscal year 2006 thru fiscal year 2007. Does not include funds provided
  in the fiscal year 2002, fiscal year 2003, fiscal year 2004 and fiscal year 2005 Water and Related Resources
  Appropriation, Central Valley Project.

    Location and Description.--CALFED is a collaborative effort among 
25 State and Federal agencies and representatives of California's 
environmental, urban, and agricultural communities to improve water 
quality, fish and wildlife habitat, and water supply reliability in the 
San Francisco Bay/Sacramento-San Joaquin River Delta (Bay-Delta), the 
hub of the State's water distribution system. The Bay-Delta is 
California's principal source of drinking water for more than 22 
million Californians, supplying irrigation water for the State's $27 
billion agricultural industry, and is the largest wetland habitat and 
estuary in the West supporting 750 plant and animal species. 
Ultimately, California's trillion-dollar economy is at risk if 
environmental and water management problems to restore the ecosystem 
are not resolved.
    The California Bay-Delta Environmental Enhancement Act (Bay-Delta 
Act), enacted in late 1996, authorized a total of $430 million over 3 
years (fiscal year 1998 to fiscal year 2000) for ecosystem restoration 
activities in the Bay-Delta region. From fiscal year 1998 to fiscal 
year 2000 a total of $190 million was provided through this account to 
support ecosystem restoration, as well as $30 million for other than 
ecological Bay-Delta activities. Existing agency authorities and 
appropriation language in 2002 and 2003 allowed Federal agencies to 
continue Program implementation after the Bay-Delta Act sunseted the 
end of 2000, until such time as the new authorization was enacted in 
2004.
    Project Status.--Lead CALFED agencies released the Final 
Programmatic Environmental Impact Statement/Environmental Impact Report 
and Preferred Alternative on July 21, 2000. Stage 1 of Phase III 
implementation activities (the first 7 years of a 30-year program) 
began with the signing of the Record of Decision (ROD) on August 28, 
2000, formally approving a long-term plan for restoring the Bay-Delta 
ecosystem and improving water management. Program components include 
ecosystem restoration, watershed management, water supply reliability, 
storage, conveyance, an environmental water account, water use 
efficiency (conservation and recycling), water quality, water 
transfers, levees, and science. All aspects of the Program are 
interrelated/interdependent and will incorporate a high level of 
stakeholder participation and science-based adaptive management during 
implementation.
    On October 25, 2004, the President signed the CALFED Bay-Delta 
Authorization Act, Public Law 108-361, authorizing the Secretary of the 
Interior to implement water supply technology and infrastructure 
programs aimed at increasing and diversifying domestic water resources. 
The Act provided Federal authorization through fiscal year 2010 for 
four new and expanded authorities--Environmental Water Account (EWA), 
the Levee Stability Program, specific conveyance projects, and 
oversight activities identified in sec. 103(f)(1) thru (f)(4). The Act 
authorized up to $389 million to be appropriated for these four 
activities, and it requires a number of reporting requirements, 
including annual updates to Congress.
    Additional Capability for Fiscal Year 2009.--The additional $10 
million would be used to support the CALFED Bay-Delta Program to 
provide improved water supply and water quality in the Bay-Delta. The 
full capability presented here represents the specific projects and 
programs that were recommended for implementation in the budget 
request. Reclamation has the capability to use the additional funds 
requested under existing and new authority to support the following 
programs:
    Storage Program.--Reclamation, in coordination with the State of 
California, is continuing feasibility investigations and environmental 
documentation for four proposed CALFED storage projects: Shasta 
Enlargement, Upper San Joaquin River Basin, Los Vaqueros Enlargement, 
and North of Delta Offstream Storage (NODOS; aka Sites Reservoir). 
Planning studies will focus on refinement and evaluation of alternative 
plans, benefit/cost analysis, and environmental compliance. Draft 
Feasibility Reports and NEPA documentation are due for completion in 
2008 and Final Feasibility Reports and environmental documents are due 
for completion and submittal to the Department of the Interior in 2010.
    Conveyance.--Reclamation is continuing feasibility studies for: (1) 
increased capacity of the intertie between the State Water Project 
California Aqueduct and the Central Valley Project Delta Mendota Canal, 
(2) San Luis Reservoir Lowpoint Improvement Project, (3) actions at 
Franks Tract to improve water quality in the Delta, evaluation of a 
screened through Delta facility on the Sacramento River, coordinating 
actions for relocating drinking water intake facilities for in-Delta 
water users, including assessing the feasibility of the project and 
developing a finance plan, and evaluating the environmental benefits of 
re-operating the Delta Cross Channel; and (4) recirculation of export 
water to reduce salinity and improve dissolved oxygen in the San 
Joaquin River.
    Additional funds would be used to support alternative conveyance 
options under the Bay-Delta Conservation Plan (BDCP) and the Delta 
Vision Strategic Plan in coordination with the State of California.
    Water Quality.--Reclamation is continuing implementation of 
activities that will help meet water quality standards and objectives 
for which the Central Valley Project has responsibility. Projects will 
include those within the preferred alternative proposed by the San 
Joaquin River Water Quality Management Group, of which Reclamation is a 
participant. The approach focuses on managing salt loading in the San 
Joaquin River in areas where the highest salt loads originate and 
incorporates an element of real-time management, to manage salt loading 
into the San Joaquin River, while not redirecting impacts to the Delta. 
Specific activities include continued implementation of the Westside 
Regional Drainage Plan, water quality monitoring, wetlands management, 
and other actions identified in the program to meet water quality 
standards and objectives in the lower San Joaquin River. Additional 
funds would be used for implementation of activities that reduce salt 
discharges into the San Joaquin River that are consistent with the 
Westside Regional Drainage Plan.
    Ecosystem Restoration.--Under Ecosystem Restoration Reclamation is 
participating as the Federal co-lead agency for NEPA in the BDCP. The 
BDCP contributes to the objectives of CALFED's Ecosystem Restoration 
Program. BDCP supports planning for projects that improve and increase 
aquatic and terrestrial habitats and improve ecological functions in 
the Bay-Delta system to support sustainable populations of diverse and 
valuable plant and animal species. Additional funds would be used to 
support the environmental documents for alternative conveyance under 
BDCP and in support of implementation of the Delta Vision Strategic 
Plan toward broad restoration of the Delta.
    Science.--Reclamation is continuing to participate as a key agency, 
in coordination with the Interagency Ecological Program (IEP) agencies 
and the CALFED Science Program, with investigations to determine causes 
for the decline in the Delta of pelagic organisms. Reclamation is also 
participating with expert evaluations and scientific assessments of 
Program elements and assisting the CALFED agencies with the 
establishment of performance measures, and monitoring and evaluating 
the performance of all Program elements. Additional funds will 
contribute to Reclamation's participation in both the IEP and the 
Pelagic Organism Decline studies.
    Environmental Water Account.--Reclamation is continuing as the lead 
Federal agency in this cooperative water and operations management 
program whose purpose is to provide protection to the fish of the Bay-
Delta estuary through environmentally beneficial changes in the 
operations of the State Water Project (SWP) and the Central Valley 
Project (CVP), at no uncompensated water cost to the Projects water 
users. The future of an EWA through 2011 is being discussed; a ROD will 
be signed in the next few months at which time the agencies will 
determine the future of an EWA.
    Water Use Efficiency (WUE).--Reclamation does not have the 
authority for a grant program for WUE grants. Any funding would need to 
come with authority to manage such a program.
    Planning and Management Activities.--Reclamation is continuing to 
support administration of storage, conveyance, water use efficiency, 
environmental water account, ecosystem restoration, science and water 
transfer consistent with our CALFED appropriation. Consistent with 
Public Law 108-361, activities also include: (1) Program support, (2) 
Program-wide tracking of schedules, finances, and performance, (3) 
multi-agency oversight and coordination of Program activities to ensure 
Program balance and integration, (4) development of interagency cross-
cut budgets and a comprehensive finance plan to allocate costs in 
accordance with the beneficiary pays provisions of the Record of 
Decision, and (5) coordination of public outreach and involvement, 
including tribal, environmental justice, and public advisory activities 
in accordance with the Federal Advisory Committee Act (5 U.S.C. App.), 
and (6) development of Annual Reports.

               ADDITIONAL CAPABILITY FOR FISCAL YEAR 2009
------------------------------------------------------------------------
                                                President's   Additional
                    Program                       Request     Capability
------------------------------------------------------------------------
Storage Program...............................   $6,450,000  ...........
Conveyance....................................    7,050,000   $4,000,000
Water Quality.................................    5,000,000    3,000,000
Ecosystem Restoration.........................    1,500,000    2,000,000
Science.......................................    3,000,000    1,000,000
Environmental Water Account...................    7,000,000  ...........
Water Use Efficiency (WUE)....................  ...........  ...........
Planning and Management Activities............    2,000,000  ...........
                                               -------------------------
      Total...................................   32,000,000   10,000,000
------------------------------------------------------------------------

    Submission of this capability statement does not reflect 
departmental support. The Department does not support the addition of 
funds for any program or project that would result in the reduction of 
funding for other programs or projects in the President's budget.
    Problem Areas.--These additional capabilities are for Reclamation 
activities only. There are other Federal agencies responsible for 
implementing critical aspects of the Program. For example, funding for 
levee improvement projects in the Delta, which is an important 
component of the CALFED program, is not within Reclamation's authority 
to implement and not part of these additional capabilities.
    Congressional Location and Representation.--State of California
    Congressional Districts.--Statewide
    Senators.--Dianne Feinstein (D), Barbara Boxer (D)
    Congressional Members Requesting Additional Funding.--Senator 
Dianne Feinstein
    Project Name in Hill Request.--Trinity River Restoration (CA)
    Bureau Project.--Central Valley Project Improvement Act/Central 
Valley Project, Trinity River Division (CA)
    Appropriation.--Central Valley Project Restoration Fund
    Authorization.--Public Law 98-541, To Provide for the Restoration 
of the Fish and Wildlife in the Trinity River Basin, California, and 
for Other Purposes, October 24, 1984; Public Law 104-143, Trinity River 
Basin Fish and Wildlife Management Reauthorization Act of 1995, May 15, 
1996; Central Valley Project Improvement Act, Title XXXIV, Public Law 
102-575

                             WATER AND RELATED RESOURCES CVP--TRINITY RIVER DIVISION
                                         [Summarized Financial Data \1\]
----------------------------------------------------------------------------------------------------------------
                                                                      Federal       Non-Federal        Total
----------------------------------------------------------------------------------------------------------------
Approved by Congress 2008.......................................     $10,295,000      $3,039,000     $13,334,000
Budget Request for fiscal year 2009                                   10,317,000       3,133,000      13,450,000
----------------------------------------------------------------------------------------------------------------
\1\ Includes Water and Related Resources only, does not include Restoration funds.


                                    CENTRAL VALLEY PROJECT--RESTORATION FUND
                                         [Summarized Financial Data \1\]
----------------------------------------------------------------------------------------------------------------
                                                                      Federal       Non-Federal        Total
----------------------------------------------------------------------------------------------------------------
Approved by Congress 2008.......................................     $59,122,000  ..............     $59,122,000
Budget Request for fiscal year 2009                                   48,579,000  ..............      48,579,000
----------------------------------------------------------------------------------------------------------------
\1\ The summarized financial data is based on the Central Valley Project Restoration Fund.


                           TRINITY RIVER DIVISION WATER & RELATED AND RESTORATION FUND
                                           [Summarized Financial Data]
----------------------------------------------------------------------------------------------------------------
                                                                        CVP
                                                      Federal       Restoration     Non-Federal        Total
                                                                       Fund
----------------------------------------------------------------------------------------------------------------
Total Estimated Cost \1\........................    $166,432,952         ( \2\ )  ..............    $166,432,952
Allocations through fiscal year 2007 \1\........     107,921,637      $7,126,498  ..............     115,048,135
Approved by Congress 2008.......................       6,938,000       4,000,000  ..............      10,938,000
Budget Request for fiscal year 2009.............       7,140,000       1,000,000  ..............       8,140,000
Balance to Complete after fiscal year 2009......      44,433,315         ( \2\ )  ..............      44,433,315
Amount Requested by Member (S)..................  ..............       4,000,000  ..............       4,000,000
Additional Capability for fiscal year 2009        ..............         600,000  ..............         600,000
----------------------------------------------------------------------------------------------------------------
\1\ Does not include Grass Valley Creek (Buckhorn Debris Dam).
\2\ N/A.

    Location and Description.--The Trinity River Division is located in 
Trinity County in northwestern California. The Trinity River 
Restoration Program was initiated in 1984 to restore and maintain the 
fish and wildlife stocks of the Trinity River Basin to levels that 
existed just prior to construction of the Trinity River Division. The 
Central Valley Project Improvement Act of 1992 further supported 
restoration objectives, acknowledged the Federal Government's trust 
responsibilities, specified minimum releases of 340,000 acre feet per 
year, and established completion dates for a Flow Evaluation Study. The 
current phase of the program resulted from the Trinity River Mainstem 
Fishery Restoration Environmental Impact Statement and Record of 
Decision (ROD) signed on December 19, 2000. It calls for establishment 
of a strong science program, significant physical/mechanical 
restoration actions in the mainstem, as well as increased releases to 
the river from the historical 25 percent up to 48 percent of the 
average annual inflow to Trinity Reservoir.
    Project Status.--Significant progress has been made in many aspects 
of the program, with four bridge modifications completed and open to 
traffic (April 2005), one house acquired and relocated (March 2006), 
and all floodplain infrastructure modifications completed to allow for 
peak releases of up to 11,000 cubic feet per second (cfs) depending on 
water year type (April 2007). The largest release for fishery 
restoration purposes since completion of the dams in 1963, 7,000 cfs, 
was made on May 10, 2005, followed by an even larger release of 10,200 
cfs in May 2006. Construction of the first major channel rehabilitation 
project (over 1 mile in length) was completed in November 2005. Four 
sites were constructed in 2006, and three more in 2007. Eight channel 
rehabilitation sites will be constructed in the summer and fall of 
2008, with an additional eight sites planned for 2009. The remaining 23 
rehabilitation sites are in the initial planning stages and scheduled 
for construction at the rate of 6-8 per year during the period of 2010 
to 2012. Fisheries and related studies have been funded at $4.0 to $4.5 
million per year with the objective of monitoring long term progress 
toward juvenile salmonid production goals, habitat creation, returning 
adult spawners, and harvest.
    Additional Capability for fiscal year 2009.--Reclamation has the 
capability to use an additional $600,000 in fiscal year 2009 funds to 
fully obligate the channel rehabilitation construction contracts 
planned for the summer of fiscal year 2009, resulting in important new 
fishery habitat. Planning, design, and environmental compliance 
activities for the next set of channel rehabilitation projects 
scheduled for fiscal year 2010-2012, and related monitoring activities 
in fiscal year 2009 are adequately funded.
    Submission of this capability statement does not reflect 
departmental support. The Department does not support the addition of 
funds for any program or project that would result in the reduction of 
funding for other programs or projects in the President's budget.
    Problem Areas.--Earmarking of funds in the Restoration Fund could 
impact other programs and projects. Funding priorities of the 
Restoration Fund are established through a deliberative process, 
including stakeholder input that assesses the relative benefits and 
urgency of restoration and infrastructure projects that are competing 
for funds.
    Congressional Location and Representation.--State of California
    1st Congressional District.--Mike Thompson (D)
    2nd Congressional District.--Wally Herger (R)
    Senators.--Dianne Feinstein (D), Barbara Boxer (D)
    Congressional Members Requesting Additional Funding.--Senator 
Dianne Feinstein
                              rural water
    Question. You funded only two rural water projects in your budget. 
Can you explain the rational for this?
    Answer. The fiscal year 2009 President's budget balances several 
priorities. This includes funding for ongoing construction projects 
such as rural water, while maintaining existing infrastructure and 
other ongoing priorities, all within the established budget targets. 
The President's budget includes $39 million for rural water projects; 
$26.2 million is allocated to the Mni Wiconi rural water system and 
$12.76 million is allocated to the Garrison rural water supply system.
    The criteria used for funding rural water projects give first 
priority to operation and maintenance of rural water systems. This 
priority is consistent with previously enacted Federal legislation and 
for the protection of the Federal investment. Once operation and 
maintenance needs are met, funds are allocated for rural water 
construction. For rural water construction, the criteria and number of 
considerations consist of two factors: (1) Percent of ongoing projects 
completed, and (2) projects serving tribal communities. These 
evaluation factors allow Reclamation to finish some of the ongoing 
rural water projects within the constrained budget in the near future.
    Question. Don't the Fort Peck/Dry Prairie and the Rocky Boys 
projects in Montana also have a Tribal component? What would it take to 
get them funded?
    Answer. Yes, both projects have tribal components. The Assiniboine 
and Sioux Tribes of the Fort Peck Reservation sponsor for the Fort Peck 
Reservation/Dry Prairie Rural Water System in northeast Montana. The 
Chippewa Cree Tribe of the Rocky Boys Reservation sponsors the Rocky 
Boys/North Central Regional Water System in north-central Montana.
    The outstanding costs for construction of the Fort Peck 
Reservation/Dry Prairie and the Rocky Boys/North Central projects are 
approximately $247 million and $314 million, respectively.
    Within the funding available, Reclamation focused on funding 
projects with greater percentage completion.
    Question. If I am understanding you correctly, these ongoing 
projects need to continue to have Congress add funds to them so that 
maybe they might eventually be far enough along that you might budget 
for them. Correct?
    Answer. The fiscal year 2009 President's budget balances several 
priorities including funding for ongoing construction projects such as 
rural water, while maintaining existing infrastructure and other 
ongoing priorities. Additionally, all projects are within the budget 
targets that have been established. There is no correlation between 
projects included in the President's budget and Congressional write-
ins.
    Question. The Lewis and Clark rural water project has been funded 
for the previous 4 years, even in fiscal year 2007, when the 
administration prepared a spending plan under the continuing 
resolution. Why was this project not funded for fiscal year 2009? It 
certainly makes one wonder if there could have been a hint of politics 
in your decisionmaking process since Senator Johnson is up for 
reelection this year. I realize that this may just be a coincidence, 
but it does make one question the prevailing belief by some folks that 
all recommendations by the administration are merit-based or 
competitive allocations of funding but anything that Congress provides 
is self serving or tainted by political considerations.
    Answer. Given the need to work within the framework of today's 
budget realities, as well as the need to be attentive to priorities 
associated with existing water and power infrastructure throughout the 
West, Reclamation is unable to fund the needs of all of the ongoing 
rural water projects.
    Question. Will the MR&I funding amount that you proposed for the 
Garrison Diversion Unit provide for a useable increment of work on 
either the tribal or non-tribal systems?
    Answer. The funding amount would provide for some increment of work 
for both the State and tribal programs, particularly on smaller 
contract items. Sponsors of larger projects such as the Northwest Area 
Water Supply System, the Southwest Pipeline, and the Standing Rock 
Sioux Tribe's new intake and water treatment plant would likely have to 
find other sources of funding to cost-share construction.
    Question. How long would it take to complete the project at this 
funding rate?
    Answer. The State and the Tribal Municipal, Rural, and Industrial 
grant programs are programs rather than singular projects. Therefore, 
completion is equal to reaching the construction ceilings established 
in the Dakota Water Resources Act.
    Question. How much higher will the cost of the Garrison MR&I 
project be due to this drawn out schedule?
    Answer. The Garrison Tribal and State MR&I are grant programs 
consisting of numerous projects. It is difficult to predict the 
ultimate cost of each project since cost is a function of both funding 
levels and inflation of construction costs. We agree and fully 
understand that total construction costs increase as schedules are 
extended. As an example, the Dakota Water Resources Act increased the 
State MR&I grant program by $200 million in the year 2000. That indexed 
amount is now approximately $260 million.
                           water for america
    Question. We have had to carry language annually for the last 
several years for the granting program that was an integral part of 
Water 2025. Will we be required to carry similar language for the Water 
for America initiative?
    Answer. The Water for America Initiative is largely being 
undertaken within Reclamation's existing authority. Additional 
authority is only needed to provide grants under the Challenge Grant 
Program and the Water Conservation Field Services Program. Reclamation 
transmitted a legislative proposal to the Congress in August 2008. As 
an interim measure, the inclusion of annual authority in the fiscal 
year 2009 appropriations act to issue grants and cooperative agreements 
may be necessary.
                           san joaquin valley
    Question. If the San Joaquin River Restoration Fund legislation is 
not enacted in fiscal year 2009, how will those receipts be allocated 
within the Central Valley Project Restoration Fund?
    Answer. If the $7,500,000 in Friant surcharge receipts are included 
in the Central Valley Project Improvement Act Restoration Fund fiscal 
year 2009 appropriations, the Department would propose that Reclamation 
use the funds to continue on going San Joaquin River Settlement 
activities, within existing authorities.
                               title xvi
    Question. The administration consistently says it is unable to 
support title XVI projects because of funding constraints. How do you 
justify this position on authorized programs and at the same time seek 
funding for unauthorized?
    Answer. Although Reclamation supports efforts to increase local 
water supplies through increased recycled water use, title XVI projects 
must compete with other needs within Reclamation for funding priority 
in the President's budget request. The budget request for $7 million in 
fiscal year 2009 for title XVI reflects a balance of competing 
priorities.
    Question. How much of a backlog currently exists in the title XVI 
Program?
    Answer. Of the 43 title XVI projects specifically authorized and 2 
demonstration projects undertaken through the general authority, 21 
projects are actively being pursued and 4 are complete. The Federal 
cost share for the active projects, after fiscal year 2008, is nearly 
$400 million. The Federal cost share for the 12 projects currently not 
being pursued is estimated at $260 million.
    Question. Of this program backlog, how much water could be 
generated if projects were constructed and operational?
    Answer. The maximum treatment and delivery capacity for the 21 
active title XVI projects is estimated at 640,000 acre-feet per year.
                        research and development
    Question. Do you believe that research and technology 
demonstrations are important to solve our water supply needs?
    Answer. For many years, the Bureau of Reclamation has funded 
internal and external collaborative research focused on improving our 
ability to provide water and power to the American public in a cost-
effective and environmentally sound manner.
    This research has produced great returns on the investment by: 
reducing costs of maintaining Reclamation facilities; improving water 
management and delivery; making new supplies available and affordable; 
reducing water losses; increasing power generation; reducing 
environmental impacts; and increasing the safety of workers.
    Demonstrations are an important factor in gaining confidence in new 
tools and solutions. Water users and stakeholders often employ research 
and technology as a result of a successful demonstration. The Science 
and Technology Program have funded numerous successful demonstrations 
of research products, including: innovative coatings to prevent 
corrosion on spillway gates; new water supply prediction models; 
biocontrol of salt cedar; new methods to prevent fish entrainment; use 
of ballast filters to keep invasive mussels out of water supply 
systems; application of flow deflectors to prevent stilling-basin 
erosion; and biocontrol of aquatic weeds.
    The Desalination and Water Purification Research program has funded 
external research on advanced water treatment technologies for several 
years. Reclamation provides priorities for the research and technical 
review of research proposals. More than 140 research projects and 
reports have been completed and are available to the public, covering a 
wide range of research and technology development for treatment of 
saline and brackish waters.
    Some of these research studies have been expanded into 
demonstration projects that are of sufficient size to develop more 
accurate estimates of full-scale costs. This has been especially 
helpful when the technologies being demonstrated have been studied only 
in the laboratory or have had limited ``real-world'' testing. This 
demonstration testing has also provided time to identify potential 
institutional, economic, environmental, and social issues.
    Question. Should there be cost sharing requirements these R&D 
projects?
    Answer. Nearly all of the research that Reclamation funds involve 
cost-sharing or contributions from outside partners.
    The Science and Technology Program have partnership contributions 
totaling nearly $5.6 million for fiscal year 2008. This is almost a 
one-to-one match in funding. While cost sharing is encouraged for this 
research, it is not a requirement. This enables us to fund highly 
innovative and high risk research, a special focus of Federal research 
investment.
    Both the Desalination and Water Purification Research program 
(DWPR) and the title XVI program require cost sharing. These are 
programs that provide funding to external non-Reclamation organizations 
to carry out research. The cost share helps to show the commitment of 
the recipient and provides a higher probability that the recipient will 
apply the results. One important exemption is that the DWPR program 
exempts a yearly programmatic limit of $1,000,000 from cost share for 
universities. Without this exemption, it is very difficult for 
universities to find cost share either as cash or in-kind services.
    Question. Where do you think research should be focused?
    Answer. The S&T Program focuses on the challenge that face 21st 
century water managers, specifically issues that other agencies or the 
private sector are not already researching. These include problems 
related to water supply, water delivery, infrastructure maintenance, 
hydropower production, and decision support. Some research funding is 
reserved for emerging, high-priority issues, such as climate change and 
the spread of invasive mussels into western water systems.
Desalination Research--National Academy of Science Review
    The National Academy of Science has released their report, 
``Desalination: A National Perspective''. The 2 year study was funded 
by Reclamation's Research and Development Office and the Policy Program 
Services Office, along with the U.S. Environmental Protection Agency, 
to examine the state-of-the-art in advanced water treatment 
technologies and recommend priorities for Federal research.
    The review panel recommended that Federal research be focused upon 
the following:
  --Assess environmental impacts of desalination intake and concentrate 
        on management approaches.
  --Develop improved intake methods at coastal facilities to minimize 
        impingement of larger organisms and entrainment of smaller 
        ones.
  --Assess the quantity and distribution of brackish water resources 
        nationwide.
  --Analyze the human health impacts of boron while considering other 
        sources of boron exposure, to expedite water-quality guidance 
        for desalination process design.
  --Research configurations and applications for desalination to 
        utilize waste heat.
  --Understand the impact of energy pricing on desalination technology 
        over time.
    These recommendations are being used to prioritize future 
Reclamation investment in desalination research.
    Research at the new Brackish Groundwater National Desalination 
Research Facility is focused on solutions for concentrate management, 
renewable energy/desalination hybrids, development of small-scale 
desalination systems for rural communities, and technologies for 
treatment of produced waters.
    Desalination and water reuse research being carried out in 
partnership with the WateReuse Foundation is focused on the following 
priority areas: policy, social sciences, and institutional issues; 
microbiology and disinfection; chemistry and toxicology; and treatment 
technologies for water reuse and desalination.
                              desalination
    Question. Can you update us on the status of National Brackish 
Groundwater National Desalination Research Facility? Have any research 
activities been initiated at the facility?
    Answer. The testing and shakedown of systems at the new Brackish 
Groundwater National Desalination Research Facility (BGNDRF) has been 
completed and research activities have begun. Studies are being carried 
out by Sandia National Laboratory on zero discharge desalination. 
Reclamation has been developing a test system and will soon begin 
testing on a new high flux membrane developed under an Office of Naval 
Research Grant. New Mexico State University is developing an improved 
electrodialysis process that will be moved to the BGNDRF for testing. 
The Bureau of Reclamation has been in contact with several 
organizations to discuss ideas for testing.
    A cooperative agreement has been developed with New Mexico State 
University to carry out desalination research at the facility, 
beginning at the start of fiscal year 2009. This provides $1,100,000 to 
carry out research at the BGNDRF, as well as, $2,200,000 for research, 
education, and training/outreach/technology transfer.
                           middle rio grande
    Question. We made changes to the collaborative program in the 
fiscal year 2008 Energy and Water Act, to provide for all of the 
organizations involved in the Middle Rio Grande to more effectively 
work together. Are these changes working as intended? Is there anything 
that can be done to make this program work more effectively?
    Answer. The fiscal year 2008 Energy and Water Act did several 
things for the collaborative program. While all of these changes were 
intended to benefit the program, the long term benefit to the program 
is not yet known. The Act officially established the Executive 
Committee. While lack of permanent authority has not hampered 
Reclamations ability to carry out program activities, explicit 
permanent authority would provide long term stability to the program.
    The Army Corps of Engineers also received their own funding stream 
in fiscal year 2008 for implementing the 2003 Biological opinion and 
the collaborative program long term plan. They still requested program 
support funding from the collaborative program in fiscal year 2008.
    The 15 percent cap on Reclamation's administrative expenses has 
been adhered to in a transparent manner. This no longer appears to be a 
divisive issue for non-Federal program members. The hiring of a new 
program manager and a renewed program focus on fiscal responsibility 
seems to have addressed this situation for the time being.
                            executive order
    Question. I am sure you have looked at the President's Executive 
order (EO) on earmarks. Have you made any determination as to how you 
will comply with this in fiscal year 2009?
    Answer. The Department has made a determination as to how it will 
comply with the Executive order, which is based on direction issued by 
the Office of Management and Budget. OMB guidance provides direction 
relative to operations under the Continuing Resolution for 2009 that we 
are complying with.
    Question. The Executive order indicates that any funding directed 
by Congress is an earmark, but by definition, the President can propose 
the exact same thing and it is not. This is absurd. If we provide 
funding for an authorized project and the administration proposes 
funding for an authorized project, how are the two different?
    Answer. The Executive order identifies the difference in the 
following definition: earmarks are funds provided by the Congress for 
projects, programs, or grants where the congressional direction 
circumvents otherwise applicable merit-based or competitive allocation 
processes, or specifies the location or recipient, or otherwise 
curtails the ability of the executive branch to manage its 
responsibilities pertaining to the funds allocation process. The U.S. 
Supreme Court has made it clear that committee reports and other 
legislative history materials do not bind executive agencies.
    Question. The Executive order appears to have a major impact on how 
we appropriate funding to your agency. If we have to put all of the 
projects in bill language in order to ensure that you comply with 
congressional direction, we will. How will that impact the way you 
execute your fiscal year 2009 program?
    Answer. Based on the Executive order, earmarks that are in law can 
be funded. Earmarks that are not in statute may not be funded unless 
the decision to fund them is based on authorized, transparent, 
statutory criteria and merit-based decisionmaking and to the extent 
consistent with applicable law.
    Question. Can you describe the merit-based or competitive 
allocation process that you use to determine which projects are 
proposed for funding in the budget request?
    Answer. Our process begins at the regional level with a merit-
based, competitive evaluation of projects for funding. The bureau sets 
priorities among the regional requests in order to submit a budget 
request to the Department. At the Department, the bureau's request 
competes with and is prioritized along with the other bureau budgets 
for development of a request that is submitted to the Office of 
Management and Budget. OMB conducts an evaluation and prioritization 
across the Government that leads to the development of the President's 
budget.
    Question. This is somewhat rhetorical, but why is this process 
anymore transparent than how the Congress prepares an appropriation 
bill? Is there public input into your decisions?
    Answer. As part of its Managing for Excellence initiative, the 
Bureau of Reclamation has established a policy on collaboration with 
customers and stakeholders to identify and provide opportunities for 
effective participation, where appropriate, to meet its mission. 
Reclamation meets with customers and stakeholders to develop and foster 
a participative relationship and to provide quality service. The degree 
of collaboration is largely dependent upon the complexity of the issue 
being addressed. Reclamation initiates collaboration at the earliest 
stage possible; and shares information with customers and stakeholders 
prior to key decisions being made.
                            animas-la plata
    Question. What is the status of the Animas-La Plata project? When 
do you anticipate construction to be complete?
    Answer. As of June 2008, the overall project was 62 percent 
complete. Construction work on 3 of the project's primary features; 
Ridges Basin Dam, Durango Pumping Plant, and Ridges Basin Inlet 
Conduit, is progressing well and is approximately 96 percent complete. 
Work is proceeding according to schedule with the mitigation area 
lands, including improvements being transferred into operation and 
maintenance status in October 2008. Progress on the Navajo Municipal 
Pipeline includes award of the first construction contract for 
Horizontal Directional Drilling, achieving a preliminary settlement on 
the construction of the first 7 out of 29 miles of pipeline, and 
nearing design completion on the city of Farmington Reach. Construction 
is expected to be completed in 2012.
                          yuma desalting plant
    Question. We have provided direction for the last several years 
that the Yuma Desalting Plant should be maintained and demonstrated to 
be operated at one-third capacity. What is the status of the plant? 
Will we be able to get to one-third capacity this year?
    Answer. To date, the United States has met salinity requirements, 
established in Minute 242 of the 1944 U.S.-Mexico Water Treaty of 1944 
(Treaty) with Mexico, through bypassing 108,000 acre-feet of saline 
agricultural return flows. Due to the need for more operating 
information about the Yuma Desalting Plant (YDP) and the on-going 
drought in the Southwest, Colorado River water users in the Lower Basin 
and Reclamation began discussing a jointly funded pilot run of the YDP. 
A 90-day demonstration run was completed in 2007, which provided some 
operational information to assist in planning for future operations. 
This jointly funded pilot run is for longer duration and would provide 
additional operating information needed to ascertain future plant 
operation needs and costs.
    The maximum anticipated cost of the run, including preparing the 
plant to operate, is estimated to be at $23 million. Funding partners 
include the Metropolitan Water District of Southern California, 
Southern Nevada Water Authority, and Central Arizona Water Conservation 
District. In return for funding, the partners would receive a share of 
the water produced.
    Preparations are underway for the pilot run of the YDP. The run is 
scheduled in the summer of 2009. Preparations for plant operations fall 
into three major categories: (1) readying the plant, (2) meeting 
appropriate compliance and regulatory requirements, and (3) preparing a 
funding agreement. Plant equipment is currently being inspected, 
tested, and repaired, with costs estimated at $2.6 million. These 
repairs will be completed in order to conduct the run (e.g., 
replacement of selected piping segments and the upgrade of chlorination 
and ammonia systems).
    For the pilot run, the YDP would operate for about 12 months, 
producing an estimated quantity of 30,000 acre-feet of water. 
Operations are currently anticipated to include 1 month to stabilize 
pretreatment, 2 weeks at 10 percent of full capacity, 2 weeks at 20 
percent of full capacity, and 10 months at 33 percent of full capacity.
                             loan guarantee
    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. Reclamation is in the process of developing and publishing 
rules for implementation of the program. The law provides 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.
    Reclamation's budget request for fiscal year 2008 considered only 
category (b) projects, and was intended as a pilot year for the 
program. However, because the final rule has not been published yet, we 
expect to use the fiscal year 2008 budget request to accomplish 
necessary program outreach efforts as well as provide training for 
agency personnel in fiscal year 2009. In addition, we anticipate 
initiating a few pilot projects in fiscal year 2010. Following 
development of detailed eligibility criteria for category (a) projects, 
Reclamation's future appropriation request will include funding for 
these rural water supply projects as well.
    Generally, the steps involved in issuing loan guarantees will be as 
follows: (1) Reclamation will estimate the need and potential requests 
of eligible projects as identified in the statute, and make 
appropriations requests accordingly; (2) Reclamation will determine if 
a borrower's proposed project can be considered under the criteria 
given in the statute and the rules being developed; (3) Borrowers will 
apply for a loan from a lending institution; (4) The lender will 
determine whether the borrower meets its risk criteria; (5) Once the 
lender approves the application, the borrower and lender will meet with 
Reclamation to request consideration for a loan guarantee; (6) 
Reclamation will review the application based on prioritization 
criteria to be identified in the rules, as well as availability of 
appropriations, and approve or deny the request; (7) Following 
approval, and completion of all other requirements, such as 
environmental compliance, permits, etc. a final notice of guarantee 
will be issued to the lender and the loan funds will be disbursed.
    Question. What will be the eligibility criteria?
    Answer. Eligibility criteria are being developed through the formal 
rulemaking process, and will include factors such as financial 
capability for repayment, engineering need and feasibility, historical 
diligence in performing routine O&M, environmental impacts, and 
efficiency opportunities.
    Question. Will this solve the recapitalization problems for many of 
the older projects in the West?
    Answer. The loan guarantee program will not likely solve all of the 
recapitalization problems of older projects in the West, but it will be 
a valuable tool to assist in meeting this challenge.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray
                      odessa subarea special study
    Question. I am pleased to see that the Odessa Subarea Special Study 
is progressing on schedule and that the Bureau last month released the 
``Appraisal-Level Investigation--Summary of Findings'' report. It is my 
understanding that this report identified the water supply and delivery 
alternatives that have been selected for further study. And I was happy 
to see that the President's budget included funding for this important 
study.
    Now that you have narrowed down the alternatives to be studied, can 
you please tell me how this better understanding of what remains to be 
done will shape your timeline?
    It is my understanding that now that the path forward has become 
more clear, an increase in the annual funding level will be needed to 
make sure that the study is completed in a timely fashion. Can we 
expect to see future requests from the Bureau to reflect this?
    Answer. An expedited study schedule has been developed at the 
request of the State of Washington to respond to commitments it has 
made to constituents to seek a solution as quickly as possible to 
address the urgency of the declining Odessa Ground Water Aquifer. 
Reclamation plans to complete feasibility-level engineering 
investigations; economic analyses; environmental compliance activities, 
including requirements for National Environmental Policy Act 
requirements under the expedited study schedule Reclamation would 
prepare a combined planning report and final environmental impact 
statement by the end of fiscal year 2011.
    Given the current budget climate it will be difficult to fund the 
study at the level needed to complete on schedule (fiscal year 2011). 
The State of Washington has been Reclamation's Study partner and has 
provided substantial funding to date for the Study which is one of its 
highest priorities in the Columbia River Basin.
        columbia basin project, potholes supplemental feed route
    Question. As you know, the Columbia Basin Project is an important 
tool for farmers in my home State of Washington. And securing a 
reliable water supply for the Potholes Reservoir is a key element to 
ensure efficient operation of the Project. I worked with my colleagues 
to include funding for the Potholes Reservoir Supplemental Feed Route 
in the fiscal year 2008 appropriations bill.
    Can you please tell me how the Bureau is currently working to carry 
out its efforts on the Supplemental Feed Route and how this fits into 
your larger list of priorities at the Project?
    Answer. The Columbia Basin Project is designed to collect return 
flows in Potholes Reservoir from irrigation in the northern half of the 
project for delivery to the southern half. Return flows do not provide 
all the water for the southern half and have to be augmented by direct 
feed from water pumped from the Columbia River at Grand Coulee Dam. The 
feed route, developed in 1980, has served well but is strained due to 
increased demand and water conservation measures that reduced returns. 
Reclamation completed a study funded by the State of Washington to 
evaluate and select a supplemental route that could supply one quarter 
of the yearly average feed need.
    With the completion of the study, the State provided funds to 
enlarge a road crossing on the Frenchman Hills Wasteway. This work was 
completed in March 2008 and will provide a supplemental feed capacity 
of approximately 25,000 acre/feet when land acquisition is completed. 
On the Crab Creek portion of the supplemental feed route, the State is 
providing funds to study sedimentation into Moses Lake. This study is 
underway and will be completed next year.
    Fiscal year 2008 funds are being used to begin the purchase of land 
rights and to design and develop specifications for several 
improvements needed to implement the supplemental route. Improvements 
include: an outlet structure on Pinto Dam and Brook Lake, Grant County 
Road 16 crossing on Crab Creek, and conceptual designs for various 
wildlife enhancements structures along the creek
    Given the current budget climate we have been unable to provide 
funding to this effort. Fortunately, the State as part of their 
Columbia River Water Management Program has been able to make 
significant contributions to assist in this effort.

                          SUBCOMMITTEE RECESS

    Senator Dorgan. The hearing is recessed.
    [Whereupon, at 11:08 a.m., Thursday, April 10, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]







    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2009

                              ----------                              


                       WEDNESDAY, APRIL 16, 2008

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 1:58 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Byron L. Dorgan (chairman) 
presiding.
    Present: Senators Dorgan, Feinstein, Reed, Domenici, 
Bennett, Craig, and Allard.

                          DEPARTMENT OF ENERGY

                National Nuclear Security Administration

STATEMENT OF THE HON. THOMAS P. D'AGOSTINO, 
            ADMINISTRATOR
ACCOMPANIED BY:
        ADMIRAL KIRK DONALD, DEPUTY ADMINISTRATOR FOR NAVAL REACTORS
        MAJOR GENERAL BOB SMOLEN, DEPUTY ADMINISTRATOR FOR DEFENSE 
            PROGRAMS

              OPENING STATEMENT OF SENATOR BYRON L. DORGAN

    Senator Dorgan. We're going to call the hearing to order. 
We appreciate, very much, all of you being here, and especially 
to our witnesses, we're pleased that you've joined us.
    We're starting a couple of minutes early, we will have a 
vote that starts at 2:15 in the Senate, so the committee 
members will leave here probably at 2:20, we'll go vote, and 
come back. So, we will have a brief interruption, for which we 
apologize.
    We are here to take testimony from the National Nuclear 
Security Administration (NNSA) on the fiscal year 2009 budget 
request of three NNSA programs--weapons activities, naval 
reactors and the Office of the Administrator. We'll cover the 
budget request of the Defense Nuclear Nonproliferation Program 
in a separate hearing in 2 weeks' time.
    Today we have two panels. Administrator Tom D'Agostino will 
be our witness on the first panel. He will be joined by Admiral 
Donald--the Deputy Administrator for Naval Reactors, and by 
General Smolen, Deputy Administrator for the Defense Programs, 
to help respond to questions.
    Our second panel will consist of the three National Weapons 
Laboratory Directors--Dr. Mike Anastasio of Los Alamos, Dr. 
George Miller of Lawrence Livermore, and Dr. Tom Hunter of 
Sandia.
    The three Directors play an important role in the 
stewardship and the certification of our nuclear weapons 
stockpile, and I appreciate them being willing to respond to 
our request to come to Washington.
    The total NNSA budget request for fiscal year 2009 is 
nearly $9.1 billion, by far the largest program in the 
Department of Energy, making up about 36 percent of the 
Department of Energy's budget.
    Within that budget request, $6.6 billion is for weapons 
activities, $1.2 billion for nuclear non-proliferation 
programs, $828 million for naval reactors and $404 million for 
the Office of the Administrator.
    The naval reactors budget seeks $47 million above fiscal 
year 2008 enacted level, the primary driver of that is to 
support work in Idaho on naval spent nuclear fuel. The reactors 
program is highly respected, rarely draws much attention from 
the Congress or the public, and in many ways, that's a very 
good thing. And Admiral Donald, I commend you and your 
organization for your work, and appreciate your being here 
today.
    The Weapons Activity Programs stand in contrast to the 
Naval Reactors Program in both size, and also in the sense that 
it does draw a significant amount of attention from the 
Congress, and from the public. Given the program's focus on the 
safety, security and reliability of our nuclear weapons, that's 
a good thing. In fact, I would say Congress and the American 
people should continue to pay an even greater amount of 
attention to issues that surround nuclear weapons.
    The $6.6 billion budget for weapons activities represent 
the single largest program in this Energy and Water bill. It's 
larger than the investments in the Corps of Engineers, for 
example, the Office of Science, or the funding to clean up the 
former nuclear weapons complex.
    The $6.6 billion weapons activities request in the 
President's budget is $321 million above the fiscal year 2008 
enacted level. That is the largest proposed increase, other 
than the Office of Science.
    A small, but telling, illustration is that the Department's 
budget proposes to cut $200 million from the effort to clean up 
the former nuclear weapons complex that created the special 
nuclear material in our current stockpile. That means this 
Department will unfortunately fail to meet regulatory 
milestones to clean up radioactive-contaminated waste. We had a 
hearing about that recently.
    Yet, in the same budget, the administration creates a new 
account to fund $77 million for the NNSA to tear down non-
contaminated buildings. And I can support the efforts to tear 
down unneeded buildings, but it's clear the administration is 
prioritizing that budget by failing to meet its legal 
obligations in the other area, on which we've held a hearing 
just recently.
    I mentioned that the Weapons Activity Program attracts 
public attention. Two areas that I want to mention are the 
Complex Transformation and the Reliable Replacement Warhead 
(RRW). NNSA currently has its Complex Transformation-preferred 
alternative out for public comment. I commend NNSA for holding 
numerous public meetings on the plan, and for extending the 
written comment period. That makes a lot of sense to me.
    Two basic comments I hear from people are that the Complex 
Transformation-preferred alternative fails to close any site-
through consolidation, and that significant investment in 
infrastructure are being proposed that may or may not be 
needed. I hope we can explore some of those areas in 
questioning today.
    The other NNSA issue that draws considerable attention is 
the proposed Reliable Replacement Warhead. The premise behind 
RRW is that we can produce a new nuclear weapon that is, in 
many cases, smaller, safer, reliable, and less costly than the 
current stockpile. I understand that premise, but I do have 
some significant concerns about a program that is not set in a 
construct of an overall strategic defense policy, analyzing the 
impact of such a program on our international nuclear non-
proliferation efforts.
    Last year, the Armed Services Committee, through the 
leadership of Congresswoman Tauser, in the House, created the 
Congressional Commission on Strategic Posture of the United 
States. This is a congressionally appointed panel to review the 
role of nuclear weapons in our national strategic defense.
    This subcommittee supported that effort, and also called on 
the administration to submit a comprehensive nuclear weapons 
strategy for the 21st century. The idea behind both of these 
directives is that we need to understand the role nuclear 
weapons will play in our country's future, and develop a 
national policy that is reflective of that understanding.
    The RRW, I believe, skips that step. If the RRW is pursued 
without such a broad policy review, it will have the de facto 
effect of creating that national policy.
    For that reason, I supported, ultimately, in conference, 
zeroing out the funding request for the RRW in fiscal year 
2008. Furthermore, it's not my intention to fund the 
administration's $10 million request for RRW in the fiscal year 
2009. I believe we must wait for the work of the 
congressionally appointed panel and the next administration's 
Nuclear Posture Review before we move forward with a program 
that has such significant national and international policy 
implications.
    Having said that, I want to make another comment, as well. 
In addition to recommending that we not fund, in my chairman's 
mark, the $10 million, I believe very strongly that we need to 
retain our critical skills at our national laboratories. They 
are a national treasure for a lot of reasons, but especially 
those that are engaged in programs dealing with safeguarding 
our--and making certain that--our stockpile is certifiable and 
reliable. It's very important that we retain the key personnel 
and not have our national laboratories losing the kind of 
strength--intellectual strength--that I fear would happen if we 
don't adequately fund them. The question isn't whether we 
should fund them; I believe I would join my colleague from New 
Mexico in feeling very strongly that we want to have a strong 
funding base for our national laboratories. But, I exclude from 
that, at this point, the specific funding for a program called 
RRW until other conditions are met. And they may or may not be 
met in the future.
    I want to make one additional comment, and that is, Senator 
Domenici has served on this panel for a long, long, long time, 
as chairman and ranking member, and he has been tireless in his 
efforts to promote a good number of public policies that have 
become law and have advanced the interests of this country. We 
agree on many things, disagree on a few things here and there, 
but it's been a pleasure to work with him, and this will be his 
last spring--I was going to say spring cleaning, but that 
wouldn't be the case----
    Senator Dorgan. This will be his last set of spring 
hearings that we hold for the agencies under our jurisdiction. 
And I did want to take the opportunity to say to Senator 
Domenici how much I appreciate working with him, and let me 
call on him for an opening statement.

             OPENING STATEMENT OF SENATOR PETE V. DOMENICI

    Senator Domenici. Thank you very much, Mr. Chairman. As the 
time grows near for this terminating date, I find that there is 
more and more business that I see out--that we haven't 
finished. But I have kind of concluded that that's the way it's 
going to be any time in my life, so this is as good a time as 
any to leave it to somebody else after January or February of 
this coming year. However, there are a number of things we 
ought to try to get done.
    I'm sorry that we don't agree on the RRW, because it seems 
to me that we've made this too complicated. The truth of the 
matter is you look out in the world and, you know, in Europe, 
England, Russia, the United States--we're the countries with 
big nuclear arsenals. And all of them, except us, have already 
done their RRW, or are heavily engaged in it. They have new 
weapons, new structures, new weapons, new weapons systems. Many 
of them are already being done for 30 and 40 year out--that 
they'll be good for 30 or 40 years--meaning, to me, that they 
have already have accomplished what we might have accomplished 
with an early-on RRW.
    But, we'll get there, and in due course, the things that 
were included in it that we were going to try to do, we've got 
to hope, very much, that they will get done. Because, what we 
were talking about was not more weapons, but less. We weren't 
talking about bigger weapons, but rather smaller ones, we were 
talking about weapons that are safer, in all respects. That's 
what RRW would have done had it proceeded. That's why I say, it 
will get done, whether it's RRW or another way, let's hope, but 
within the next 3 or 4 years, we'll see our way clear to do 
that.
    Senator, I very much appreciated your opening remarks. I 
think you're going to be--this subcommittee is kind of one that 
most people didn't pay attention to for a long time. I think 
the fact that we will get you as chairman, coming from outside 
of the domain of the laboratories, I think you will bring some 
Senators into the web of trying to listen and understand the 
importance of this subcommittee. I felt, many times, that too 
few Senators cared very much about what was going on in this 
subcommittee.
    I recall, for the lab directors, when we started--now it 
seems like it should just be yesterday, but it was a long time 
ago--when we started Science-based Stockpile Stewardship. I 
told you all in New Mexico many times that I regretted that, 
when we made the change and started moving in that direction 
rapidly, and funding it, and doing the things we ought to do, 
that I found myself on the floor of the Senate with, literally, 
no one paying attention, nobody challenging the work we had 
done, and no votes occurring. We produced the bill, many times, 
without a single vote on the floor, Senator. And it was Harry 
Reid and I, and we'd go down there, and sometimes Harry would 
have to go somewhere, and I'd be alone, and we'd pass the bill. 
And we're now finding that the issues are very important 
issues, and a lot more people ought to be involved one way or 
another. I hope you can get them involved, because that will 
make for it being better for everybody.
    The past 15 years we have accomplished quite a bit in 
adapting to the 21st century security demands, and making much 
scientific investments in the laboratories. Critics of the 
weapons program have claimed that nothing has changed, that we 
have not moved beyond the cold war. It couldn't be more wrong.
    From my vantage point, a lot has changed. In 1992, the Bush 
administration initiated a moratorium on nuclear testing, after 
Congress voted, the administration implemented it, and it still 
holds today. In response, Congress and the Clinton 
administration worked in a bipartisan manner to establish a 
Science-based Stockpile Stewardship I just alluded to it. I'm 
proud to say that we accomplished our goals, and in the 
process, made the United States the world leader in high-
performance computing--just an incidental item--but it was 
caused by Science-based Stockpile Stewardship's requirements, 
which drove and made demands upon the industry, and they 
produced.
    In terms of weapons policy, there's been a considerable 
shift. In 2004, President Bush set a goal of cutting nuclear 
stockpile in half by 2012. With support from Congress in 
dismantling efforts, that goal was met in 2007, 5 years early. 
Having reached that target, the President ordered an additional 
15 percent cut.
    Today we have the smallest deployed stockpile since the 
Eisenhower administration, and we are on-schedule to meet the 
arms reduction laid out by the Moscow Treaty in 2002, by the 
Bush administration.
    Recognizing that the cold war is over, the administration 
has also reduced the role of nuclear weapons in our strategic 
defense, consistent with the Nuclear Posture Review of 2001. I 
support the premise that we can make even further reductions in 
our stockpile, by maintaining our scientific expertise, with 
the right production capabilities to reverse course, if 
necessary. We did not need to keep a large number of warheads--
we don't need to keep a large number in reserve.
    I also believe that so long as we must maintain our 
stockpile, we must make every effort to deploy the safest, most 
secure technology possible. In terms of production and 
handling, we should also work to eliminate hazardous material 
that possesses significant threats to our workers and to our 
environment.
    Nobody can predict how long we will need a stockpile. So 
long as we have nuclear weapons, we must manage them and the 
weapons complex responsibly. We must continue to look for ways 
to do things better, to stop doing things so we--make us 
irresponsible.
    Mr. Chairman, this budget provides a modest amount of 
funding--$10 million--for the RRW design. I've stated most of 
what I would want to say, and you have most of what you would 
say. The requested funds would pay for an analysis, not weapons 
production. I support completion of the study as soon as 
possible, to provide policy makers with the facts needed to 
make an informed decision regarding our nuclear deterrent, but 
I understand your position, and I have not yet decided whether 
I would challenge you with a vote on the floor. Perhaps after 
you have done it, we'll talk a little, and maybe I wouldn't do 
that. But at this point I feel rather strongly about it, and 
sorry that we could not reach agreement.
    As I said, France, Russia, the United Kingdom., and China--
I didn't say before--are all in continual process of replacing 
and updating their weapons, investing in new infrastructure, 
and facilities that will operate through the middle of the 
century--I indicated that a while ago--even as our U.S. 
stockpile continues to decrease.
    I'd like to close with a comment from the--on the NNSA 
complex, the transformation effort. I have sent formal comments 
to NNSA regarding their transformation proposal. While I will 
spare the subcommittee any full review, I believe the proposal 
misses the mark on science investment for the laboratories, and 
lack of investment in high-performance computing at Sandia 
National Laboratories. This is a capability that cannot be 
taken for granted.
    I'm extraordinarily proud of what the labs and their staff 
have done in support of the United States national security 
mission, beginning with the Manhattan Project, the cold war, 
the international threat and the reduction efforts, the 
Science-based Stockpile Stewardship Program--the labs have 
always provided answers to the toughest questions facing our 
Nation, and will continue.
    In my final year, I will push NNSA to better define its 
scientific mission, and develop a strategy for investment in 
scientific excellence. Science and engineering is the lifeblood 
of the laboratories, and serves as our best recruiting tool to 
attract world-class scientists to support our national security 
needs.
    Mr. Chairman, I appreciate your providing the laboratory 
directors this opportunity. It's a rare occasion that we would 
have all three before us, and I thank you for making it happen.
    Thank you.
    Senator Dorgan. Senator Domenici, thank you very much.
    Senator Craig has agreed to waive his opening statement, 
Senator, I appreciate that very much. A vote will start 
momentarily, and we will have to recess in about 10 minutes.
    So, what I would like to do, is ask Administrator 
D'Agostino to make his statement, and then we will see whether 
we get to questions. We'll have a brief recess and come back 
and finish the hearing.
    Administrator D'Agostino, let me say that we appreciate 
your work, we know you've assumed the reins in a very 
challenging time, we appreciate the work of Admiral Donald and 
General Smolen, and appreciate your being here. You may 
proceed.

                 STATEMENT OF HON. THOMAS P. D'AGOSTINO

    Mr. D'Agostino. Thank you, Mr. Chairman. I appreciate being 
here, Senator Domenici, Senator Craig, as well. I appreciate 
the opportunity to discuss the President's fiscal year 2009 
budget request for the NNSA and your active commitment and 
engagement in our program itself.
    We have a number of fundamental national security 
responsibilities for the United States, and I'm here to discuss 
the NNSA overall mission. I'm pleased to have with me, as 
you've noted, Deputy Administrator Admiral Kirk Donald, and 
Major General Bob Smolen for Defense Programs, and particularly 
pleased that the lab directors are here. As you know, it's been 
many years since they've had an opportunity to testify, and I 
think having the lab directors--provide them an opportunity to 
talk about something so important as our stockpile, is an 
opportunity that Members of Congress ought to get firsthand. 
So, I appreciate, sir, you calling them here.
    NNSA is examining how to proceed, which addresses evolving 
national security needs in a manner that anticipates 
significant changes in the future, in how we manage our 
national security programs, our physical assets, and our 
people. The fiscal year 2009 request will go a long way towards 
making significant progress in many areas of focus, including 
those that we have embarked upon already in 2008.
    We anticipate that our request of $9.1 billion will enable 
us to accomplish the following: First, begin the process of 
changing from a cold war nuclear weapons complex, to a 21st 
century national security enterprise, which includes shrinking 
the size of the nuclear weapons complex, and consolidating 
special nuclear materials at fewer sites, increasing funding 
for critical facilities that are needed to support a nuclear 
deterrent, including funding for a chemistry and metallurgy 
research replacement facility, increasing funding for cyber-
security by 22 percent over the amount provided in 2008, 
improving cost savings associated with supply chain 
management--building upon the already $5 million of savings 
we've documented in 2007, we anticipate having those savings 
multiply to about $30 million in 2008, and envision taking cost 
savings even further in 2009.
    Second, this program will further advance nuclear non-
proliferation and radiological terrorism and activities to 
counter nuclear terrorism, including continuing our planned 
increases in budget requests for non-proliferation activities, 
which build upon the doubling of spending for these efforts, 
since September 11, 2001; increased funding for nuclear 
counterterrorism activities by 40 percent over the amount 
provided in 2008; increasing spending by 14 percent to secure 
highly-enriched uranium and other radiological materials, as 
part of a global threat reduction initiative; and, continue and 
completing activities under Bratislava Agreement with the 
Government of Russia.
    Third, this program will secure and maintain an aging 
stockpile, including continuing our defense programs ``Getting 
the Job Done'' initiative, by staying focused on deliverables 
to the Defense Department; increasing the number of weapons 
dismantlements by 26 percent over the number of dismantlements 
in 2007; and, addressing current and anticipated challenges 
associated with certifying the stockpile, without requiring 
underground testing.
    Fourth, ensuring the safety and reliability of the 103 
operating naval nuclear propulsion plants, and continuing 
development work on nuclear propulsion technology to support 
required capabilities, as well as meeting future threats to 
U.S. security.
    And finally, expanding our technical excellence, while 
developing the next generation of national security scientific 
and engineering talent. This effort is especially important to 
our weapons laboratories, and will require us to make important 
decisions to invest in certain programs and capabilities, and 
ensure our labs are run efficiently.
    We seek to reduce the overall size of the nuclear weapons 
complex, and we believe it will allow for an increased focus in 
the areas of non-proliferation, nuclear counterterrorism, 
nuclear forensics, and support to the intelligence community.
    Before concluding and taking your questions, I want to 
briefly mention a few items. As you know, nuclear weapons 
remain a cornerstone of our Nation's strategic defense posture, 
even as we continue to reduce the size of the stockpile. I'm 
pleased to acknowledge that, a few weeks ago, the Defense 
Department and Department of Energy submitted to Congress a 
classified white paper on the future of the nuclear weapons 
stockpile. While our current stockpile remains safe, secure and 
reliable, the supporting infrastructure has aged, with many of 
our facilities well over 50 years old. Maintaining the current 
infrastructure is not an option--it is too old, it is too 
expensive, it is too big, and it does not address all of our 
national security needs. Addressing these issues is possible, 
and can be accomplished with relatively flat budgets over the 
next 10 to 15 years.
    In addition, this administration is driven by the Defense 
Department and the combatant commanders belief that the effort 
to study replacement concepts is important to the long-term 
assurance of the stockpile. We believe this is a key ingredient 
towards reducing the size of the stockpile beyond already the 
50 percent reduction we have accomplished since 2001, and the 
further 15 percent reduction ordered by the President, 
President Bush, in December of last year.
    Finally, our ability to effectively dispose of plutonium 
metals and materials coming out of our increased dismantling 
programs, and our work to consolidate materials, is critical to 
the effort to reduce the worldwide nuclear danger. This is 
viewed by the administration as a critical national security 
non-proliferation program. Just as the global threat reduction 
program seeks to repatriate secure, highly-enriched uranium 
from around the world and convert that material into beneficial 
energy use, so does the plutonium disposition program seek to 
eliminate excess plutonium with the added benefit of energy 
production.
    We're working to comply with the direction given in the 
Fiscal Year 2008 Consolidated Appropriations Act, while 
preserving our vital national security mission focus.

                           PREPARED STATEMENT

    Thank you, Mr. Chairman, I look forward to working with you 
and members of the committee on these programs, and answering 
your questions.
    [The statement follows:]
            Prepared Statement of Hon. Thomas P. D'Agostino
    Thank you for the opportunity to discuss the President's fiscal 
year 2009 Budget Request for the National Nuclear Security 
Administration (NNSA). I want to thank all of the members for their 
strong support for our vital national security missions.
    In the 8th year of this administration, with the 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 considering options 
        for transforming the stockpile and the complex infrastructure 
        that supports it;
  --reducing the threat posed by proliferation of nuclear weapons, 
        material and expertise; and
  --providing reliable and safe nuclear reactor propulsion systems for 
        the U.S. Navy.
    NNSA is examining how to proceed into the future to address 
evolving national security needs in a manner that anticipates 
significant changes in how we manage our national security programs, 
our assets and our people. To that end, the fiscal year 2009 budget 
request for $9.1 billion, a decrease of $35 million from the fiscal 
year 2008 Consolidated Appropriations Act, supports NNSA's crucial 
national security mission.
    The fiscal year 2009 request will go a long way toward making 
significant progress in many areas of focus, including those that we 
have embarked upon in fiscal year 2008. NNSA anticipates that this 
request will enable the accomplishment of the following results:
  --moving from a nuclear weapons complex to an integrated national 
        security enterprise, including:
    --making decisions regarding transformation of the nuclear weapons 
            complex based on the analyses in the Complex Transformation 
            Supplemental Programmatic Environmental Impact Statement 
            this year;
    --shrinking the size of the nuclear weapons complex and 
            consolidating special nuclear material at fewer sites;
    --increasing funding for critical facilities, including an increase 
            in funding for the preliminary design of the Uranium 
            Processing Facility and Chemistry and Metallurgy Research 
            Replacement facility over the amount provided in fiscal 
            year 2007;
    --increasing funding for cyber security by 22 percent over the 
            amount provided in fiscal year 2007; and
    --improving cost-savings associated with supply chain management, 
            building upon nearly $5 million in savings in fiscal year 
            2007.
  --advancing nuclear nonproliferation and countering nuclear and 
        radiological terrorism, including:
    --increasing the amount of funds provided directly to NNSA 
            nonproliferation activities by 7 percent over the funding 
            amount provided in fiscal year 2007 (not including the 
            Mixed Oxide (MOX) Fuel Fabrication Facility);
    --increasing funding provided to nuclear counter terrorism 
            activities by 40 percent over the amount provided in fiscal 
            year 2007;
    --increasing the rate at which Highly Enriched Uranium and other 
            radiological and source materials are secured as part of 
            the Global Threat Reduction Initiative (GTRI) program by 14 
            percent; and
    --and continuing and completing activities under the Bratislava 
            agreement with the Government of Russia.
  --securing and maintaining an aging stockpile, including:
    --continuing our Defense Program's ``Getting the Job Done'' 
            initiative by staying focused on delivering products to 
            Department of Defense in a timely and cost-efficient 
            manner;
    --increasing the number of weapon dismantlements by 26 percent over 
            the number of weapons dismantled in fiscal year 2007; and
    --addressing current and anticipated challenges associated with 
            certifying the stockpile without requiring underground 
            testing.
  ----expanding our technical excellence while developing the next 
        generation of national security scientific, engineering and 
        program management talent, including:
    --developing an expanded vision of the future role of our national 
            laboratories in supporting NNSA's national security 
            mission; and
    ----expanding NNSA's efforts in nuclear nonproliferation, 
            counterterrorism, forensics, and support to the 
            intelligence community.
    Our testimony today will focus on the Weapons Activities, Naval 
Reactors, and Office of the Administrator accounts.
                      weapons activities overview
    Nuclear weapons remain a cornerstone of our Nation's strategic 
defense posture and will likely remain so throughout this century, even 
as we continue to reduce the size of our stockpile. Our nuclear 
deterrent stockpile remains safe, secure and reliable. The supporting 
infrastructure, however, is aged--many of our critical facilities are 
over 50 years old. Stockpile Stewardship is working and has been 
successful to date at finding and remedying the technical challenges 
facing our aging stockpile. Additionally, we continue to reduce the 
size of the stockpile to meet the President's mandate to have the 
smallest nuclear stockpile consistent with our national security 
objectives. As a result, today the stockpile is half of what it was in 
2001, and by 2012, the United States will have the smallest stockpile 
since the 1950s. Additional reductions in the stockpile are possible, 
but these reductions will require changes to the weapons complex and 
the composition of the stockpile.
    Our national security enterprise is a national asset and our 
weapons laboratories remain unrivaled as the pinnacle of American 
scientific, engineering and technical expertise. Development and 
maintenance of our nuclear deterrent force has made possible American 
leadership in nuclear nonproliferation, nuclear counterterrorism, 
advanced computing, and high-energy density physics. None of these 
programs would be possible at its current level without technical 
advances made by the weapons program. As we continue transforming the 
infrastructure and maintaining our nuclear deterrent force into the 
21st century, our goal is to do so without jeopardizing the 
advancements in other vital NNSA national security programs made 
possible by our investment in weapon activities.
    Let there be no doubt: today's nuclear weapons stockpile is safe, 
secure and reliable and has not required post-deployment nuclear 
testing to date, nor is nuclear testing anticipated or planned. 
However, while today's stockpile remains safe, secure and reliable, the 
weapons laboratories, the Department of Defense and the NNSA are 
concerned about our future ability to maintain the stockpile in the 
future. The Stockpile Stewardship Program has worked well, so far, to 
discover and resolve problems that in the past would have required 
nuclear testing. However, the collective judgment of the Directors of 
our national weapons laboratories is that maintaining certification of 
the finely-tuned designs of the aging cold war stockpile through Life 
Extension Programs (LEPs) only, absent nuclear testing, necessarily 
entails increasing risk overtime. Although recent studies have placed 
the life of our plutonium pits at 85 to 100 years, other exotic 
materials used in our warheads degrade at different rates and many of 
their aging properties are still not well understood. The metallurgical 
and chemical issues we face with our aging warheads continue to be a 
technical challenge for our best scientists and the risk of 
catastrophic technical failure occurring as our warheads age cannot be 
ruled out absolutely. The one certainty we do know is that warhead 
certification in the absence of testing will become more difficult, 
especially as life extensions and component aging move the warhead 
further away from originally-tested designs.
    After 9/11 we realized that the security threat to our nuclear 
warheads had fundamentally changed. The security features in today's 
stockpile are commensurate with technologies that were available during 
the cold war and designed for with the threats anticipated at that 
time. Major enhancements in security are not easily available via 
retrofits in the life extension programs.
    To understand the challenges facing our stockpile, an analogy is in 
order. Today's Mustang remains a high-performance automobile, has about 
the same dimensions and weighs only a few hundred pounds more than the 
first Mustangs, and has all the modern safety and security features we 
expect today--air bags, anti-lock brakes, GPS navigation, satellite 
radio, theft deterrent and alarm systems. The 1965 version had none of 
these features, not even seat belts! We deploy warheads today that have 
1970-1980's safety, security and anti-terrorism features. It does not 
mean that these warheads are not safe and secure, but we can do better 
and we should do better. Based on our initial assessments, I believe 
that the reliable replacement warhead concepts provide opportunities to 
incorporate the latest technological advances for precluding 
unauthorized use in a post-9/11 threat environment.
    To address these challenges, the administration has proposed two 
efforts to maintain the viability of the deterrent well into the 21st 
century. The first of these is Complex Transformation. Our goal is to 
transform the large, costly and inefficient cold war nuclear weapons 
complex that cannot meet the full production requirements of our 
customer into an integrated, modern and cost effective nuclear security 
enterprise. Complex Transformation involves more than just transforming 
an aging physical infrastructure; it seeks to transform our contracting 
and procurement processes and overall management of the enterprise to 
embrace the best in business and human capital practices. Complex 
Transformation also must be accomplished in a way that continues to 
leverage our core competencies in nuclear weapons design and 
maintenance to advance the Nation's leadership in counterterrorism, 
nonproliferation, physical and cyber security, and to support the 
intelligence community. Our Complex Transformation strategy relies on 
four pillars:
  --Transform the nuclear stockpile through the Stockpile Stewardship 
        Program in partnership with the Department of Defense;
  --Transform to a modernized, cost-effective nuclear weapons complex 
        to support needed capabilities in our physical infrastructure;
  --Create an integrated, interdependent enterprise that employs best 
        business practices to maximize efficiency and minimize costs; 
        and
  --Advance the science and technology base that is the cornerstone of 
        our nuclear deterrent forces and remains essential for long-
        term national security.
    Infrastructure transformation is a major part of Complex 
Transformation. Some major facilities date back to the Manhattan 
Project and cannot cost effectively meet today's safety and security 
requirements. In other cases, new facilities are needed to restore 
capabilities that have been put in standby since the end of the cold 
war but may be needed to support future life extension programs. With 
the support of Congress, we produced tritium in 2007 for the first time 
in 18 years and the Tritium Extraction Facility (TEF) at Savannah River 
is now on-line. Similarly, construction of the Highly Enriched Uranium 
Materials Facility (HEUMF) at the Y-12 National Security Complex in Oak 
Ridge will allow us to consolidate uranium storage and improve security 
with a significantly-reduced security footprint. And at Los Alamos 
National Laboratory, the Chemistry and Metallurgy Research Replacement 
(CMRR) project will allow us to continue the plutonium pit surveillance 
and actinide research vital to maintaining the stockpile and the 
Nation's nuclear deterrent. These three projects are representative of 
a Complex Transformation that has already commenced.
    Our plan for Complex Transformation, detailed in the draft 
Supplemental Programmatic Environmental Impact Statement (SPEIS), seeks 
to consolidate special nuclear material at fewer sites and locations 
within the nuclear weapons complex, close or transfer hundreds of 
buildings that are no longer required for the NNSA mission, and reduce 
NNSA's overall footprint by as much as a third over the next 10 years. 
By eliminating multi-site redundancies and consolidating both missions 
and capabilities at our sites, we expect to dramatically improve our 
efficiency and cost effectiveness.
    The second effort we believe is necessary to maintain the viability 
of the nuclear deterrent well into the 21st century involves continued 
study of reliable replacement concepts. We believe continued work on 
these concepts is necessary in order to allow the next administration 
and Congress to make informed decisions regarding the future 
composition of the stockpile. Continued study of reliable replacement 
concepts has been identified by U.S. Strategic Command, the Navy and 
the Air Force as essential to long-term maintenance of an effective 
nuclear deterrent force. These concepts, coupled with a responsive 
nuclear infrastructure, offers promise for further reductions in 
reserve warheads maintained as a hedge against technical failure. These 
concepts are specifically envisioned to address long term reliability 
issues that can affect our existing stockpile resulting from component 
aging, and refurbishment of aging components, that move us further from 
the original designs validated by underground nuclear testing. In 
short, we believe these concepts could provide a means to mitigate the 
technical risks inherent in a life extension-only approach. Moreover, 
reliable replacement concepts would not add new military capabilities 
to the stockpile, and would introduce safety, surety and antiterrorism 
features that cannot easily be retrofitted into the current stockpile.
    In our efforts to advance Complex Transformation and examine the 
potential promise of reliable replacement concepts, we have not lost 
focus on meeting our day-to-day commitments to the Department of 
Defense (DOD). Last year, we reconstituted a limited plutonium pit 
manufacturing capability and produced new pits for the W88 warhead, and 
maintained on-time delivery of the LEP B61 weapons to the Air Force. In 
fiscal year 2008, the Department will continue to manufacture W88 pits, 
maintain a limited pit manufacturing capability of six pits per year.
    Meeting the needs of DOD, maintaining the safety, security and 
reliability of the stockpile, and commencing Complex Transformation 
would not be possible without the support of our dedicated Federal and 
contractor workforce of 37,000 employees. Retaining our current 
workforce and attracting the next generation of national security 
scientific and engineering talent is challenging because the number of 
qualified university graduates continues to decrease each year.
    The scientific capabilities and infrastructure developed for the 
nuclear weapons mission are utilized by DOD, the Department of Homeland 
Security, and the intelligence community, are recognized as essential 
to fulfilling their responsibilities. NNSA laboratories have been 
participating jointly with other Government agencies in addressing a 
wide range of national security challenges--all of which leverage the 
core mission of nuclear weapons development and sustainability. Recent 
examples include:
  --Supporting war fighter needs in Iraq with improvised explosive 
        device (IED) modeling and analysis;
  --Supporting DOD and the Federal Bureau of Investigation in nuclear 
        weapons emergency render-safe and post-event technical 
        forensics;
  --Providing solutions to the intelligence community in their nuclear 
        counterterrorism and nonproliferation efforts by drawing upon 
        our nuclear weapons expertise;
  --Developing and deploying integrated systems for countering 
        aerosolized bioterrorist releases and bio-decontamination 
        technologies; and
  --Developing and deploying portal detector technology to prevent 
        smuggling of special nuclear material.
    Basic research at our national security laboratories has provided 
technology for airborne detection of toxic chemicals, critical 
infrastructure modeling for disaster response, and modeling of response 
strategies for potential influenza pandemics.
    It is important to recognize that certain major capabilities are 
needed at each of our national security laboratories if they are to 
continue to effectively contribute to national security. By leveraging 
the science that gave us the atomic bomb that helped win World War II 
and the technical innovations that helped win the cold war, today's 
national security labs are tackling tomorrow's national security 
challenges. Maintaining a core scientific and technical base at our 
labs will continue to attract outstanding talent to meet our future 
national security challenges.
    Weapons Activities also provides tangible support to nuclear 
nonproliferation objectives. A major priority within Defense Programs 
has been weapons dismantlement. The United States remains committed to 
its obligations under the Nuclear Nonproliferation Treaty (NPT). In 
2004, the President directed a 50 percent reduction in the size of the 
stockpile, and, in December 2007, he ordered an additional 15 percent 
cut. The result will be a nuclear stockpile one quarter the size it was 
at the end of the cold war and the smallest since the Eisenhower 
administration. During fiscal year 2007, DOE achieved a 146 percent 
increase in the rate of nuclear weapon dismantlement over the fiscal 
year 2006 rate, almost tripling our goal of a 49 percent rate increase.
                        naval reactors overview
    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, guided missile submarines, and 
strategic submarines, which provide the Nation's most survivable 
deterrent force.
          fiscal year 2009 budget request programmatic detail
    The President's fiscal year 2009 budget request for NNSA totals 
$9.1 billion, a decrease of $35.0 million or 0.4 percent less than the 
fiscal year 2008 consolidated appropriations level. 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 section 3253 of Public Law 106-065, the National Defense 
Authorization Act for Fiscal Year 2000. 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 2009-2013 Future Years Nuclear Security Program--
FYNSP--projects $47.7 billion for NNSA programs though 2013. This is a 
decrease of about $2.3 billion over last year's projections. The fiscal 
year 2009 request is slightly smaller than last year's projection; 
however, the out-years increase starting in fiscal year 2010.
Weapons Activities
            Defense Programs
    The fiscal year 2009 budget request for the programs funded within 
the Weapons Activities Appropriation is $6.62 billion, an approximately 
5.1 percent increase over the fiscal year 2008 Consolidated 
Appropriations level. It is allocated to adequately provide for the 
safety, security, and reliability of the nuclear weapons stockpile and 
supporting facilities and capabilities.
    Directed Stockpile Work (DSW) activities ensure the operational 
readiness of the nuclear weapons in the Nation's stockpile through 
maintenance, evaluation, refurbishment, reliability assessment, weapon 
dismantlement and disposal, research, development, and certification 
activities. The fiscal year 2009 request is organized by Life Extension 
Programs, Stockpile Systems, Reliable Replacement Warhead, Weapons 
Dismantlement and Disposition, and Stockpile Services. The request 
places a high priority on accomplishing the near-term workload and 
supporting technologies for the stockpile along with longterm science 
and technology investments to ensure the capability and capacity to 
support ongoing missions.
    The fiscal year 2008 Consolidated Appropriations Act did not 
contain funding for the Reliable Replacement Warhead (RRW). The 
administration believes that the characteristic features of the RRW are 
the right ones for ensuring the future of our Nation's nuclear 
deterrent force. The fiscal year 2009 request includes $10 million to 
continue the design definition and cost study. The request also 
continues efforts called out in the Explanatory Statement referenced in 
section 4 of Public Law 110-161 to address issues raised in the recent 
JASON's summer study of the feasibility of certifying RRW designs 
without nuclear testing.
    Campaigns are focused on scientific and technical efforts essential 
for the certification, maintenance and life extension of the stockpile. 
The Stockpile Stewardship Program has allowed NNSA to maintain the 
moratorium on underground testing and move to ``science-based'' 
certification and assessments for stewardship by relying on 
experiments, modeling, simulation, surveillance and historical 
underground nuclear testing experience. The Science and Engineering 
Campaigns are focused to provide the basic scientific understanding and 
the technologies required for the directed stockpile workload and the 
completion of new scientific and experimental facilities. In the 
Inertial Confinement Fusion Ignition and High Yield Campaign, the 
National Ignition Facility (NIF) will focus on completing the first 
experiment on NIF with a credible chance of demonstrating laboratory-
scale ignition in 2010. The Advanced Simulation and Computing Campaign 
will continue to improve capabilities through development of faster 
computational platforms in partnership with private industry, and with 
state of the art techniques for calculations, modeling and simulation, 
and analysis of highly complex weapons physics information. The 
Readiness Campaign consists of technology-based efforts to reestablish 
and enhance manufacturing and other capabilities needed to meet planned 
weapon component production.
    The fiscal year 2009 request makes several changes in the location 
of programs within Weapons Activities. The Pit Manufacturing and 
Certification Campaign recently concluded with the successful 
manufacturing and certification of the W88 pit. Pit manufacturing 
related activities are moved to the Direct Stockpile Work Stockpile 
Services program and pit certification activities are transferred to 
the Science Campaign. In addition, in the Science Campaign, the 
Advanced Certification program will continue efforts begun in fiscal 
year 2008 at the direction of the Congress to review, evaluate and 
implement key recommendations from the JASON's RRW study regarding 
approaches to establishing an accredited warhead certification plan 
without nuclear testing. Work being performed to understand potential 
improvised nuclear device designs and responses is being transferred to 
the nuclear weapons incident response account.
            Secure Transportation Asset
    The Secure Transportation Asset's fiscal year 2009 budget request 
is an increase of $9.5 million to $221.1 million. This funding request 
supports the increase to transportation capacity necessary for the 
dismantlement of nuclear weapons, departmental initiatives to 
consolidate and disposition nuclear material, and the implementation of 
the current operational doctrine to protect nuclear weapons and 
material in transport.
            Readiness in Technical Base and Facilities (RTBF) and 
                    Facilities and Infrastructure Recapitalization 
                    Program (FIRP)
    In fiscal year 2009, we are requesting $1.89 billion for the 
maintenance and operation of existing facilities, remediation and 
disposition of excess facilities, and construction of new facilities. 
Of this amount, $1.72 billion is requested for RTBF, an increase of 
$83.1 million from fiscal year 2008 operating levels, with $1.41 
billion reserved for Operations and Maintenance. The Operations and 
Maintenance portion also includes the Institutional Site Support 
program which supports facility transition and capability 
consolidation. The request includes $308.0 million for RTBF 
Construction.
    This request also includes $169.5 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, which we expect to be completed in fiscal year 2013, 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. The Integrated 
Prioritized Project List (IPPL) is the vehicle that FIRP will rely on 
to prioritize and fund out-year projects to reduce legacy deferred 
maintenance. These projects significantly reduce the deferred 
maintenance backlog to acceptable levels and support the Stockpile 
Stewardship mission and transformation of the complex.
    This request also includes $77.4 million for the newly established 
Transformation Disposition (TD) Program. TD is NNSA's facility and 
infrastructure (F&I) retirement program for old, cold war-era 
structures. The NNSA owns over 35 million gross square feet of 
footprint and over 25 percent of the footprint may become excess as a 
result of complex transformation. TD is established with the goal of 
reducing non-process and contaminated excess F&I. This includes 
facilities that are excess to current and future NNSA mission 
requirements, including those contaminated structures which are not 
currently the responsibility of the Office of Environmental Management. 
This program supports the performance measure of reducing the total 
square feet, improves management of the NNSA facilities and 
infrastructure portfolio, and reduces long-term costs and risks. The TD 
Program will set the groundwork for a smaller complex.
    All of these activities are critical for the development of a more 
responsive infrastructure and will be guided by decisions based on the 
Complex Transformation Supplemental Programmatic Environmental Impact 
Statement (SPEIS) and other factors such as funding and national 
security requirements. 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 future 
requirements. For example, a facility could be designed to support a 
low baseline capacity and preserve the option, with a limited amount of 
contingency space to augment capacity, if authorized and needed, to 
respond to future needs.
    Having a reliable plutonium capability is a major objective of NNSA 
planning and is a key requirement if the Nation is to maintain an 
effective deterrent, regardless of the composition of the stockpile. 
Options for plutonium research, surveillance, and pit production are 
being evaluated as part of the Complex Transformation NEPA process, 
with a decision anticipated in 2008. The preferred alternative in the 
draft Complex Transformation SPEIS proposes that Los Alamos National 
Laboratory facilities at Technical Area 55 (TA-55) provide plutonium 
research, surveillance and pit production capabilities. This 
alternative includes the proposed Chemistry and Metallurgy Research 
Replacement--Nuclear Facility (CMRR-NF) to achieve the objectives of 
(1) closing the aging existing Chemistry and Metallurgy Research (CMR) 
facility, (2) replacing essential plutonium surveillance and research 
capabilities currently at Lawrence Livermore National Laboratory and 
those being conducted in Plutonium Facility 4 (PF-4) in TA-55, and (3) 
achieving a net manufacturing capacity of 50-80 pits per year by 
allowing surveillance activities now occurring in PF-4 to be conducted 
in CMRR.
    Completion of the Highly Enriched Uranium Materials Facility 
(HEUMF) would allow a reduction of the overall size of the high 
security area at the Y-12 National Security Complex. If NNSA ultimately 
decides to build a Uranium Processing Facility (UPF) at Y-12, then Y-
12's high security area would be reduced from 150 acres to 15 acres. 
This reduction combined with the engineered security features of the 
HEUMF and UPF, would allow NNSA to meet the Design Basis Threat (DBT) 
at significantly reduced costs, to lower non-security costs, and to 
provide a responsive highly enriched uranium manufacturing capability.
            Environmental Projects and Operations
    The Environmental Projects and Operations/Long-Term Stewardship 
Program is requested at $40.6 million in fiscal year 2009. 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. The increase in this program 
is necessary to continue compliance with statutory requirements and to 
provide Long-Term Stewardship activities for two additional NNSA sites.
            Nuclear Weapons Incident Response
    The Nuclear Weapons Incident Response (NWIR) Program serves as the 
United States' primary capability for responding to and mitigating 
nuclear and radiological incidents worldwide. The fiscal year 2009 
request for these activities is $221.9 million, of which $31.7 million 
is dedicated to the continued implementation of two national security 
initiatives that will strengthen the Nation's emergency response 
capabilities--the National Technical Nuclear Forensics (NTNF) and the 
Stabilization Implementation programs.
    The NTNF program will continue the development of capabilities to 
support pre- and post-detonation activities and enhance technical 
nuclear forensics capabilities. The continued development of this 
capability will facilitate the thorough analysis and characterization 
of pre- and post-detonation radiological and nuclear materials and 
devices, including devices used in nuclear detonations as well as 
interdicted devices. Developing forensic capabilities of this nature is 
crucial to the overall objective of identifying the origin and pathways 
of interdicted nuclear materials, warheads and improvised nuclear 
devices.
    Stabilization is a 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, continues to leverage 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 to selected 
teams across the country, potentially followed by their transition into 
the collection of tools available to Federal response teams.
            Physical and Cyber Security
    The fiscal year 2009 budget request for Defense Nuclear Security is 
$737.3 million, a 7.7 percent decrease from the fiscal year 2008 
appropriation. The fiscal year 2009 request supports the base program 
and the program's focus on sustaining the NNSA sites 2003 Design Basis 
Threat baseline operations and implementing the 2005 DBT Policy 
upgrades with the Nevada Test Site reaching compliance in fiscal year 
2009. Starting in fiscal year 2009, there is no longer an offset in 
this account or in the departmental administration account for the 
security charges associated with reimbursable work. These activities 
will be fully funded by the programs with direct appropriations.
    During fiscal year 2009, the program will focus on eliminating or 
mitigating identified vulnerabilities across the weapons complex. 
Measures will include additional 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. There are no new construction starts.
    The fiscal year 2009 budget request for Cyber Security is $122.5 
million, an 11 percent increase from the fiscal year 2008 
appropriation. The fiscal year 2009 budget request 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, 
enhancements in assets and configuration management, and identify 
emerging issues, including research needs related to computer security, 
privacy, and cryptography.
    Additionally, the Cyber Security funding will provide for 
enhancement, certification, and accreditation of unclassified and 
classified computer systems to ensure the 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 possesses 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 management and policy.
Naval Reactors
    The Naval Reactors fiscal year 2009 budget request of $828 million 
is an increase of $20 million from the fiscal year 2008 request. 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 102 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 $204 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 $104 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 $106 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 $264 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 $60 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 $32 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 $22 million requested for construction funds will be used to 
support the project engineering and design of KAPL infrastructure 
upgrades and ECF M290 receiving and discharge station, to support the 
design and construction of production support complex at NRF, and to 
support the construction of a materials research technology 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 
Office of Secure Transportation couriers. The fiscal year 2009 budget 
request is $404.1 million, essentially level with the fiscal year 2008 
appropriation reflecting a leveling of staffing growth.
    This budget request is consistent with the funding needed for 
personnel support in an account that is comprised of over 70 percent 
salaries and benefits. Staffing is projected to increase by 95 to a 
total of 1,942 FTE in fiscal year 2009, in support of new hires brought 
on-board at the end of fiscal year 2008 and beginning of fiscal year 
2009 to meet increased requirements in Defense Nuclear Nonproliferation 
and Emergency Operations program goals as well as address NNSA 
workforce planning skill mix issues. Information Technology (IT) for 
the Federal staff is also included in this account, and the fiscal year 
2009 request is level with 2008.
    The out-year budget for this account projects a 3.7 percent 
increase in fiscal year 2010, followed by about 4 percent annually in 
the ensuing years. There remain significant challenges in managing this 
account due to the essentially uncontrollable impacts of escalation on 
payroll and benefits for NNSA staff that consume such a high percentage 
of this account.
            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 the Congress through 
Congressionally directed projects in the Office of the Administrator 
appropriation in fiscal year 2005. The NNSA has established 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. However, the fiscal year 2008 Consolidated 
Appropriations Act (Public Law 110-161), included $22.1 million in 
congressionally directed projects in support of the HBCU programs 
within the Office of the Administrator account, for both new and 
existing projects. In fiscal year 2009, the Office of the Administrator 
appropriation will provide funding of $3.6 million in continuing 
support for HBCU activities for institutions not yet ready to engage in 
direct NNSA mission support. The Weapons Activities appropriation will 
provide up to $6 million; the Defense Nuclear Nonproliferation 
appropriation will provide up to $3 million; and the Naval Reactors 
program will fund up to $1 million of HBCU efforts in fiscal year 2009 
in multiple research partnerships directly supporting mission program 
activities.
  appropriation and program summary tables and out-year appropriation 
                summary tables--fiscal year 2009 budget

                               NATIONAL NUCLEAR SECURITY ADMINISTRATION--OVERVIEW
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                            Fiscal Year    Fiscal Year   Fiscal Year   Fiscal Year   Fiscal Year
                                           2007 Current   2008 Original      2008      2008 Current      2009
                                          Appropriations  Appropriation  Adjustments  Appropriation    Request
----------------------------------------------------------------------------------------------------------------
National Nuclear Security
 Administration:
    Office of the Administrator.........        358,291        405,987        -3,850       402,137       404,081
    Weapons Activities..................      6,258,583      6,355,633       -58,167     6,297,466     6,618,079
    Defense Nuclear Nonproliferation....      1,824,202      1,673,275       -15,279     1,657,996     1,247,048
    Naval Reactors......................        781,800        781,800        -7,114       774,686       828,054
                                         -----------------------------------------------------------------------
      Total, NNSA.......................      9,222,876      9,216,695       -84,410     9,132,285     9,097,262
    Rescission of Prior Year Balances...  ..............      -322,000   ...........      -322,000   ...........
                                         -----------------------------------------------------------------------
      Total, NNSA (OMB Scoring).........      9,222,876      8,894,695       -84,410     8,810,285     9,097,262
----------------------------------------------------------------------------------------------------------------


               OUT-YEAR APPROPRIATION SUMMARY--NNSA FUTURE-YEARS NUCLEAR SECURITY PROGRAM (FYNSP)
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                             Fiscal     Fiscal     Fiscal     Fiscal     Fiscal
                                                           Year 2009  Year 2010  Year 2011  Year 2012  Year 2013
----------------------------------------------------------------------------------------------------------------
NNSA:
    Office of the Administrator..........................    404,081    419,848    436,266    451,771    469,173
    Weapons Activities...................................  6,618,079  6,985,695  7,197,844  7,286,912  7,460,318
    Defense Nuclear Nonproliferation.....................  1,247,048  1,082,680  1,076,578  1,111,337  1,133,982
    Naval Reactors.......................................    828,054    848,641    869,755    880,418    899,838
                                                          ------------------------------------------------------
      Total, NNSA........................................  9,097,262  9,336,864  9,580,443  9,730,438  9,963,311
----------------------------------------------------------------------------------------------------------------


                     OFFICE OF THE ADMINISTRATOR--OVERVIEW APPROPRIATION SUMMARY BY PROGRAM
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                 Fiscal Year    Fiscal Year   Fiscal Year   Fiscal Year   Fiscal Year
                                 2007 Current  2008 Original      2008      2008 Current      2009       Change
                                Appropriation  Appropriation  Adjustments  Appropriation    Request
----------------------------------------------------------------------------------------------------------------
Office of the Administrator...   \1\ 358,291        383,487        -3,490       379,997       404,081    +24,084
Congressional Directed          .............        22,500          -360        22,140   ...........    -22,140
 Projects.....................
                               ---------------------------------------------------------------------------------
      Total, Office of the           358,291        405,987    \2\ -3,850       402,137       404,081     +1,944
       Administrator..........
----------------------------------------------------------------------------------------------------------------
\1\ Reflects the Congressionally approved appropriation transfer of $17,000,000 (07-D-04) from a source within
  the Weapons Activities appropriation and $1,000,000 from the fiscal year 2007 supplemental in support of the
  Defense Nuclear Nonproliferation program.
\2\ Reflects a rescission of $3,850,000 as cited in the Fiscal Year 2008 Consolidated Appropriations Act (Public
  Law 110-161).
Public Law Authorization: Fiscal Year 2008 Consolidated Appropriations Act (Public Law 110-161) and National
  Nuclear Security Administration Act, (Public Law 106-65), as amended.


                                         OUT-YEAR APPROPRIATION SUMMARY
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year
                                                                  2010         2011         2012         2013
----------------------------------------------------------------------------------------------------------------
Office of the Administrator.................................      419,848      436,266      451,771      469,173
----------------------------------------------------------------------------------------------------------------


                                WEAPONS ACTIVITIES--FUNDING PROFILE BY SUBPROGRAM
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                            Fiscal Year    Fiscal Year   Fiscal Year   Fiscal Year   Fiscal Year
                                            2007 Current  2008 Original      2008      2008 Current      2009
                                           Appropriation  Appropriation  Adjustments  Appropriation    Request
----------------------------------------------------------------------------------------------------------------
Directed Stockpile Work..................     1,430,192      1,413,879       -12,627     1,401,252     1,675,715
Science Campaign.........................       267,758        290,216        -2,592       287,624       323,070
Engineering Campaign.....................       161,736        171,075        -1,527       169,548       142,742
Inertial Confinement Fusion Ignition and        489,706        474,442        -4,236       470,206       421,242
 High Yield Campaign.....................
Advanced Simulation and Computing               611,253        579,714        -5,177       574,537       561,742
 Campaign................................
Pit Manufacturing and Certification             242,392        215,758        -1,927       213,831   ...........
 Campaign................................
Readiness Campaign.......................       201,713        159,512        -1,424       158,088       183,037
Readiness in Technical Base and               1,613,241      1,652,132       -14,751     1,637,381     1,720,523
 Facilities..............................
Secure Transportation Asset..............       209,537        213,428        -1,905       211,523       221,072
Nuclear Weapons Incident Response........       133,514        160,084        -1,429       158,655       221,936
Facilities and Infrastructure                   169,383        181,613        -1,622       179,991       169,549
 Recapitalization Program................
Environmental Projects and Operations....  .............         8,669           -77         8,592        40,587
Transformation Disposition...............  .............  .............  ...........  .............       77,391
Defense Nuclear Security.................       656,653        806,434        -7,201       799,233       737,328
Cyber Security...........................       104,505        101,191          -904       100,287       122,511
Congressionally Directed Projects........  .............        48,000          -768        47,232   ...........
                                          ----------------------------------------------------------------------
      Subtotal, Weapons Activities.......     6,291,583      6,476,147       -58,167     6,417,980     6,618,445
Security Charge for Reimbursable Work....       -33,000        -34,000   ...........       -34,000   ...........
Use of Prior Year Balances...............  .............       -86,514   ...........       -86,514          -366
                                          ----------------------------------------------------------------------
      Total, Weapons Activities..........     6,258,583      6,355,633       -58,167     6,297,466     6,618,079
----------------------------------------------------------------------------------------------------------------
Public Law Authorization: Fiscal Year 2008 Consolidated Appropriations Act (Public Law 110-161) and National
  Nuclear Security Administration Act, (Public Law 106-65), as amended.


                 OUT-YEAR FUNDING PROFILE BY SUBPROGRAM
                        [In thousands of dollars]
------------------------------------------------------------------------
                                Fiscal     Fiscal     Fiscal     Fiscal
                              Year 2010  Year 2011  Year 2012  Year 2013
------------------------------------------------------------------------
Weapons Activities:
    Directed Stockpile Work.  1,762,079  1,789,979  1,760,218  1,776,388
    Science Campaign........    309,091    295,192    296,662    299,902
    Engineering Campaign....    148,863    146,565    150,475    153,907
    Inertial Confinement        434,007    381,173    373,005    377,762
     Fusion Ignition and
     High Yield Campaign....
    Advanced Simulation and     526,373    510,808    514,405    520,645
     Computing Campaign.....
    Pit Manufacturing and     .........  .........  .........  .........
     Certification Campaign.
    Readiness Campaign......    170,003    161,139    161,130    164,295
    Readiness in Technical    1,904,398  2,153,557  2,275,909  2,372,916
     Base and Facilities....
    Secure Transportation       249,555    261,543    268,134    269,325
     Asset..................
    Nuclear Weapons Incident    229,661    235,211    242,425    250,947
     Response...............
    Facilities and              192,945    196,379    195,096    194,779
     Infrastructure
     Recapitalization
     Program................
    Environmental Projects       37,288     39,026     37,468     36,040
     and Operations.........
    Transformation               89,457     88,589     88,008     87,863
     Disposition............
    Defense Nuclear Security    818,285    817,809    793,856    814,928
    Cyber Security..........    113,690    120,874    130,121    140,621
                             -------------------------------------------
      Total, Weapons          6,985,695  7,197,844  7,286,912  7,460,318
       Activities...........
------------------------------------------------------------------------


                                  NAVAL REACTORS--FUNDING PROFILE BY SUBPROGRAM
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                            Fiscal Year    Fiscal Year   Fiscal Year   Fiscal Year   Fiscal Year
                                            2007 Current  2008 Original      2008      2008 Current      2009
                                           Appropriation  Appropriation  Adjustments  Appropriation    Request
----------------------------------------------------------------------------------------------------------------
Naval Reactors Development:
    Operations and Maintenance (O&M).....       747,648        739,100        -6,726       732,374       771,600
    Program Direction....................        31,380         32,700          -297        32,403        34,454
    Construction.........................         2,772         10,000           -91         9,909        22,000
                                          ----------------------------------------------------------------------
      Total, Naval Reactors Development..       781,800        781,800        -7,114       774,686       828,054
----------------------------------------------------------------------------------------------------------------
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); Fiscal Year 2008 Consolidated Appropriations Act (Public Law 110-
  161); National Nuclear Security Administration Act, (Public Law 106-65), as amended.


                                     OUT-YEAR FUNDING PROFILE BY SUBPROGRAM
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year
                                                                  2010         2011         2012         2013
----------------------------------------------------------------------------------------------------------------
Naval Reactors Development:
    Operations and Maintenance..............................      782,087      811,651      827,164      831,084
    Program Direction.......................................       35,754       37,054       38,354       39,754
    Construction............................................       30,800       21,050       14,900       29,000
                                                             ---------------------------------------------------
      Total, Naval Reactors Development.....................      848,641      869,755      880,418      899,838
----------------------------------------------------------------------------------------------------------------

    Senator Dorgan. Administrator D'Agostino, thank you very 
much. There are about 8 minutes remaining on this vote, I think 
what we will do is recess the subcommittee for about 10 
minutes, and we will reconvene.
    We'll call the subcommittee back to order.

              COMPLEX TRANSFORMATION PREFERRED ALTERNATIVE

    Mr. D'Agostino, again, thank you for your testimony. I will 
ask a couple of questions and then call on my colleague, 
Senator Domenici who will be here momentarily.
    Your Complex Transformation Preferred Alternative, Mr. 
D'Agostino, calls for keeping all 8 nuclear weapons complex 
facilities. Some, including myself, are surprised that there's 
not a recommended closure of at least one site, or even one 
site.
    As I understand it, OMB had the Cost Analysis Improvement 
Group do an assessment of the NNSA's Complex Modernization 
Programs, and one of the findings said that there were 
potential economic benefits from the relocation of the uranium 
operations from Y-12 to another site. The assessment 
highlighted the vulnerability of Y-12 and the fact that other 
than the HEUMF plant, virtually all other Y-12 buildings will 
require replacement.
    I understand the final decision has not been made, but I 
believe you do specify Y-12 as the uranium center for the 
weapons complex.
    Mr. D'Agostino. Right.
    Senator Dorgan. So, can you tell us--how did you come to 
this decision to retain the NNSA mission at Y-12?
    Mr. D'Agostino. Absolutely.
    Senator Dorgan. As opposed to moving it?
    Mr. D'Agostino. Yes, sir, Mr. Chairman, I'd like to do 
that.
    We did commission the Cost Analysis Improvement Group as 
well as an additional independent group--we had two independent 
teams--look at our preferred alternative, particularly from a 
cost standpoint.
    The one thing I will start off with is, most of these 
studies typically do not take into account the value of the 
workforce that's needed to operate and deal with special 
materials, and uranium and the other materials, the work that 
happens at the Tennessee area, clearly there's a set of 
material there that requires a special workforce.
    And, we actually have very good evidence, when we moved 
material out of Rocky Flats, on how difficult it is to re-
establish a capability dealing with special materials. It took 
us much longer than expected, and cost a lot more money than we 
ever expected it to cost. I'm talking, in particular, in this 
case, about the plutonium issue.
    But, in the case of Y-12, the evidence was clear that the 
CAIG said there was no clear winner on the decision whether to 
move those capabilities out, or not. In fact, it was neck-in-
neck, dead even. And one of the things that came out of that 
was our desire to do what we're calling a ``Phase II Cost 
Study'', which is part of the Preferred Alternative process.
    We put out a draft Preferred Alternative, and during the 
time when we're gathering public comment and input, we were 
also doing a Phase II Cost Study, to further evaluate these 
other factors, such as moving people, moving equipment, moving 
the material.
    And, from my standpoint, it was very clear to me that 
because things were even from the CAIG report, the Cost 
Analysis Improvement Group, that to err on the side of the 
people on the draft alternative, and then go evaluate, and do 
this additional study, before we get to a final position on a 
preferred alternative.
    So, we are doing those Phase II cost studies for these 
materials.
    Senator Dorgan. Are you going to keep us informed of those 
results?
    Mr. D'Agostino. Absolutely, sir.
    Senator Dorgan. Let me ask you, as well, about the Kansas 
City plant. You have already decided to build a newer and more 
efficient facility there, and you're deciding to keep the new 
facility in Kansas City, as opposed perhaps to, considering 
moving it to other existing NNSA sites. Some have said Pantex 
at Sandia might be mentioned as alternatives.
    My understanding is that the Kansas City site has done good 
work, has good people there, and I don't, with my question, 
mean to take anything away from them, but----
    Mr. D'Agostino. Right.
    Senator Dorgan [continuing]. Let me ask, how have you come 
to a decision to retain the mission in Kansas City, when you 
could build the new plant at another site, when you weigh all 
of the alternatives, can you explain that to us?
    Mr. D'Agostino. Absolutely.
    Senator Dorgan. And I understand, let me also say, you're 
seeking to have the General Services Administration (GSA) 
construct the new Kansas City plant, and then the NNSA will 
lease the facility. That means this subcommittee will never 
approve construction funds, because we won't be required to. 
Why did you pursue the GSA route for the new facility--do you 
use GSA in this manner for other large facilities as well, and 
do you have a cost analysis that would tell us whether it is 
cheaper to lease than for the NNSA to own?
    Mr. D'Agostino. Certainly. Regarding the Kansas City plant, 
one thing was clear, that we were in 3 million square feet in 
Kansas City, and we were spending $100 million more a year than 
we really needed to. So, the important thing is to deliver 
products to the Defense Department--and you're right, sir, the 
Honeywell organization out there has a tremendous reputation, 
they have a 99.99 percent quality and delivery record over many 
years.
    But what was clear is that we needed to get out of that 
World War II facility. It was just costing too much. It's 
consistent with the theme of too old, too big, too expensive, 
and we needed to right-size that facility.
    So, we're going to shrink that footprint by over 60 
percent, and save about $100 million a year.
    Senator Dorgan. I'm not questioning whether you should do 
it, I was questioning the location, and also the decision to go 
through----
    Mr. D'Agostino. Right. Through the GSA.
    Senator Dorgan [continuing]. GSA, which really bypasses our 
committee, in terms of construction funding.
    Mr. D'Agostino. So, from the standpoint of the location, 
since it's clear that I needed to get out of that current 
facility, I had the option of looking around, and you know, 
whether to put it at Pantex, at Kansas City, or at--I'm sorry, 
at Sandia--or any other site across the complex.
    And given Honeywell's--and that plant, in general's, high 
level of performance, given the quality of the workforce, I did 
not feel it was worth trying to move people--based on our 
experience of closing down Rocky Flats and closing down the 
Mound Plant--to satisfy that same mission.
    And we decided, sir, to look at ways to acquire the 
project, if you will, and the GSA does do this for the Federal 
Government, and we felt that the lease approach made the most 
sense, it delivered the product, it had the lowest life cycle 
costs for the Government, plus it allowed--in the long term--as 
we expect missions to change over the number of years, it gives 
us an opportunity to be a bit more flexible--us, the Federal 
Government--to be a bit more flexible on how we satisfy the 
requirements.
    Senator Dorgan. I'm just trying to understand where the 
approval is for doing this, if it doesn't go through an 
Appropriations subcommittee. Is there carte blanche authority 
for you to go to GSA----
    Mr. D'Agostino. No, sir.
    Senator Dorgan [continuing]. And say, ``I want to build a 
building?''
    Mr. D'Agostino. Absolutely not. We go through OMB first to 
get the facility appropriately scored, then it comes into the 
Environment and Public Works Committee, here in Congress, as 
part of a GSA package to get approval by Congress.
    Senator Dorgan. The authorizing committee has signed off on 
this? Is that correct?
    Mr. D'Agostino. I don't know if it's considered an 
authorizing committee----
    Senator Dorgan. It would be.
    All right, thank you for that answer. I have other 
questions I want to submit to you in writing.
    Mr. D'Agostino. Sure.

                         NAVAL REACTORS PROGRAM

    Senator Dorgan. Admiral Donald, there's been some 
discussion about new nuclear-powered Navy ships beyond aircraft 
carriers and submarines, most of it has been on a new class of 
cruisers. Could you comment on that, and what resources the 
Naval reactors program would need if the decision was made to 
build new nuclear-powered ships?
    Admiral Donald. Yes, sir. Thank you for the question. The 
Navy right now is in the process of what's called an Analysis 
of Alternatives for the new ship, which is the cruiser that 
would replace the Aegis-class cruisers currently in service. 
We've completed the part of the Analysis of Alternatives that 
applies to the propulsion plant. The remaining part really is 
about defining the specific mission and capabilities that the 
ship needs from a combat system and a radar system perspective.
    Once that's done, then a decision would be made as to 
whether or not that ship would be nuclear-powered, or not. And, 
again, that's under review right now by the Secretary of the 
Navy, and the Chief of Naval Operations.
    Should we--should it be chosen to be a nuclear-powered 
ship, we would--our plan would be to use existing components of 
existing designs to the greatest extent possible to help in 
cost, and get the most capability you can for the cost. But 
what it would really involve for us, was, in addition to the 
specific components that you have to buy, the reactor plant 
that you'd buy, itself, you'd also have to do some amount of 
redesign to fit those components into the ship, whatever type 
of ship they chose to buy.
    So, in addition to component purchases, and the specifics 
of the plan itself, some re-design work would have to go into 
it, and likely some facilitization of existing manufacturing 
capabilities, that would have to be considered as well, sir.
    Senator Dorgan. Admiral, thank you very much.
    Senator Domenici?

                   MATERIALS, MISSIONS, AND MANPOWER

    Senator Domenici. I was wondering if I might--you go ahead.
    Administrator D'Agostino, your testimony makes a thorough 
case of the consolidation of materials, missions and manpower. 
However, in 13 pages of written testimony, I find only--find 
that only the reference to science and a handful of examples, 
primarily focused on past scientific achievements. There's 
absolutely no mention of scientific path forward, or a strategy 
to sustain the scientific excellence of the labs.
    Could you please explain to us what this budget provides in 
terms of long-term planning to sustain science capabilities at 
the laboratory?
    Mr. D'Agostino. Certainly. We have an item in our budget--
it's not a big item, it's about $5 million--to work on 
upgrading the accelerator at Los Alamos. But, more importantly, 
we have a number of facilities----
    Senator Domenici. What is that for, again?
    Mr. D'Agostino. For the, upgrading the accelerator, the 
LANSCE Accelerator, however, it's clearly not enough to do any 
significant work in fiscal year 2009. In order to really do 
that work, it will likely cost well over $100 million to 
upgrade that accelerator--that's done a tremendous job over the 
past decades, in getting the scientific information that we 
need.
    Our focus----
    Senator Domenici. So, you're saying--you're telling this 
committee you need LANSCE in order to round out the scientific 
capability of the lab, and all you could get out of this year 
was $5 million?
    Is that----
    Mr. D'Agostino. Well, I think there's more than that, 
Senator. I was going to add to that, if I could.
    Senator Domenici. Go ahead.
    Mr. D'Agostino. For one thing, we--with the support of this 
subcommittee--we have now finished the DARHT project. I think 
in about 2 days, or so, we will actually be signing, doing the 
formal completion of the DARHT project at Los Alamos, which as 
you know, is a tremendous technical achievement.
    We're in the mode now, sir, of actually operating all of 
these tools that have been appropriated over the last number of 
years, the NIF facility is in its final stages of construction. 
As you know, sir, the MESA Project was completed 3 years early, 
and is now an active part of supporting our stockpile, 
particularly the work on the W76, and so, the concern I have is 
consistent with what you've described, what is the long-term 
science for Los Alamos, and what's our long-term strategy 
across the complex?
    Our near-term strategy, sir, is to utilize the tools that 
we've built up over the last decade during Stockpile 
Stewardship, and there was a lot of utilization that we do need 
that is so important to do.
    The concern that we have, and Director Anastasio may get a 
chance to talk about this, is what is that particular 
capability for Los Alamos? We haven't answered that question 
yet, but we're in the process of working with the Office of 
Science to lay out that right path for the laboratory. I think 
MESA and NIF will do that Livermore and Sandia, quite well.
    Senator Domenici. Now, Administrator, we're approaching the 
2-year anniversary of the new management team's take-over of 
Los Alamos. It appears to me that things are on the right 
track, with several of the deliverabilities met in pit 
manufacturing, super computing and improved site security. What 
is your impression of the operation at LANL?
    Mr. D'Agostino. Senator, I would say, I'm very impressed 
with what has happened over the last 2 years. A lot of people 
will point to maybe one incident or two, I look at the overall 
trend, and when I look at the overall trend, I see good 
indication--from security, for example, the laboratory has 
actively reduced its amount of classified removable media from 
over 80,000 pieces, now it's less than 5,000 pieces.
    It has consolidated its vaults--we used to have 142, or 143 
vault-type rooms. We're already down to 114, and I think the 
Director is trying to get that number down to the 20 to 40 
range of vault-type rooms. We've centralized our classified 
document storage, and the accident rate has decreased by 35 
percent at the laboratory.
    From a project management standpoint, the laboratory is 
delivering on over 90 percent of its project deliverables on 
these milestones that we track in our systems--these are 
tremendous accomplishments--they've improved facility 
management by 11 percent, and all of this within a very 
difficult financial situation.
    So, Los Alamos has done this on the basis of hard 
management, and my hat's off to the Director for putting that 
through.
    We actually have similar types of changes going on at some 
of our other laboratories, and in addition to the programmatic 
accomplishments that you just described, a lot of times what 
gets ignored is the hard management part of the laboratory.
    Senator Domenici. I didn't mean to isolate this one out, 
and thereby indicate that you weren't making advances on all of 
them, I just chose Los Alamos, because it had received so much 
adverse criticism----
    Mr. D'Agostino. Right.
    Senator Domenici [continuing]. Two and three years ago, and 
had some security problems. It was bantered around up here as a 
laboratory that couldn't get things done, and I just wanted 
your observations for the first--it's only been 2 years for the 
new management, and you've told the committee what you think.
    Mr. D'Agostino. Yes, sir, thank you. I do think we have a 
bit more to go, but we're heading in the right direction, and 
I'm very encouraged by it, but conscious, as well.
    Senator Domenici. I have a lot more, but I want to yield 
after one last question.
    The budget provides $10 million advance for feasibility 
work on the RRW. You've been present when we've had an exchange 
between the chairman and myself, regarding whether or not we 
should fund that, and his view that we should not, my view that 
we should.
    Ten million--but that's not enough to complete the 
research. It is my understanding that an additional $55 million 
is needed to complete this phase of the study. Can you tell me 
what will be gained if Congress provides the full $65 million 
needed to complete the feasibility study? What would, then, be 
the next steps? And back up and tell me why we need the $10 
million, which we're going to have an argument about--somebody 
out there ought to be defending it--are you one who defends the 
$10 million?
    Mr. D'Agostino. I'm in defense of the $10 million, sir. I 
do think--I want to emphasize, I think it's important to 
emphasize--that this is a study, this is not about building a 
warhead.
    From my view, the gain and the understanding is to help 
inform future administrations of an approach to better manage 
our nuclear weapons stockpile. I'm very concerned that if we 
continue down the path of rebuilding our cold war stockpile 
exactly the way we built it in the past, that we will lock in 
very difficult materials that we have had to deal with in the 
past, that are causing us so much problems now.
    So, from that standpoint, what we would gain, in my view, 
is an opportunity for future administrations to actually 
understand what an RRW concept can actually deliver, in terms 
of driving the size of the stockpile down, and adding safety 
and security--additional safety and security--into our nuclear 
weapons stockpile. I think this is a matter of making sure 
everyone's fully informed, and making sure that it's clear, 
this is not a decision to build a warhead.
    Your last part of the question was, why the $10 million, 
sir? It was clear in the very early days of January of this 
year that we hadn't achieved a consensus, and you know, we 
needed an opportunity to make sure that we had to drive home 
what this Reliable Replacement concept was all about. The $10 
million in the budget request is there to make sure that all of 
the work that has happened over the last 2 years on this 
topic--and there has been some excellent work--did not get lost 
just because we immediately cut off funding on day one.
    We take the views of congressional appropriations 
seriously, when we got the bill, Deputy Administrator Smolen 
issued a note out to the complex saying, ``Stop work on RRW.'' 
And that literally means, stop work. And, you know, there's no 
way to really tie a ribbon around the information that you have 
appropriately, but we want to be able to close off that work 
appropriately, and at least put together some information for 
future administrations.
    Senator Domenici. Thank you very much.
    Senator Dorgan. If I might--I'm going to call on Senator 
Craig, and use the early bird rule back and forth, Senator 
Craig, Senator Reed then Senator Bennett.
    My understanding is last year the administration was 
already beginning to put some amount of money in the Air Force 
budget--going beyond the Navy piece, with respect to RRW. That 
presumes, of course, that that program was going to be a 
continuum. And I, I mean, I--we have a disagreement about these 
issues----
    Mr. D'Agostino. Right, right.
    Senator Dorgan. But, I think it's very important that we 
understand, how this fits in a much broader context of nuclear 
weapons policy. I appreciate the comments of Senator Domenici.
    Senator Craig?

                    STATEMENT OF SENATOR LARRY CRAIG

    Senator Craig. Mr. Chairman, thank you.
    Gentlemen, thank you.
    And Administrator D'Agostino, before I come to you with a 
question, I want to first thank the Admiral for the work we've 
done together at the lab. As you know, Idaho's lab was not a 
nuclear--a weapons lab. However, NNSA does work at the INL, 
mainly through the Navy nuclear program, and its use of the 
Advanced Test Reactor (ATR).
    In 1967, the ATR was commissioned to support the Navy 
Nuclear Propulsion Program, tackling nuclear fuels reliability 
and material testing issues. And, of course, we know that 
history--probably one of the more successful ones, if not the 
most successful in the extension of life of our Navy's--our 
national nuclear fleet.
    Last April, DOE designated the Advanced Test Reactor, the 
ATR, as a National Scientific User Facility, and that's where 
the cooperation of the Navy came in, and this would not have 
happened without the support that you've given us, and I want 
to thank you for that.
    Today, the ATR, the National User Facility, is open for 
businesses and universities from all over the Nation, and 
they're able to use the facility for research and educational 
purposes. The INL also works on certain NNSA waste, such as 
sodium debris from Sandia National, and we also have some 
highly-enriched uranium weapons-grade materials for non-weapons 
research purposes.
    Now, my question of you, Administrator. I want to talk to 
you about Building 651, and Building 691. As you know, 
infrastructure at most of our labs continues to be a problem, 
and a top priority, it is true at the Idaho lab. Our scientists 
and engineers perform research and development in facilities 
that oftentimes back-date into the 1950s.
    These are facilities at the lab that were constructed in 
the 1990s to recycle the Navy's spent nuclear fuel. These two 
building have never been used, they're basically brand new, and 
sitting there. And I understand that for a relatively small 
investment, these facilities could be upgraded and used.
    Your office looked at these facilities in the past to find 
alternative uses, funds have been made available in 2006, and 
in the Omnibus bill last year for the required upgrades, 
however, no work has begun, or is expected to begin any time 
soon. It's my understanding, understanding is that even 
Congress has provided the funds, there is a disagreement over 
the right mission, and who will be responsible for the 
facilities. So, my question is a relatively simple one--can you 
tell me what happened to the $5 million that was appropriated 
in 2006?

                           FUNDING OVERSIGHT

    Mr. D'Agostino. As to the specifics, I can't tell you at 
this point exactly what would happen. What I can talk about are 
the two buildings and how we looked at it from a Departmental 
view----
    Senator Craig. Yes.
    Mr. D'Agostino [continuing]. If I could, Senator.
    Senator Craig. Please.
    Mr. D'Agostino. Okay.
    Those buildings, we looked at originally, a couple of years 
ago, as potential areas to store plutonium while we were trying 
to de-inventory the plutonium we have at Hanford, as a--what I 
would call--an interim storage location.
    Senator Craig. Those are the right words for Idaho, thank 
you.
    Mr. D'Agostino. Yes, thank you.
    Well, the idea was getting the material out of Washington 
State, ultimately our plan was to disposition that material 
through the mixed oxide facility in South Carolina.
    At the time, Savannah River was not in a position to accept 
plutonium in South Carolina, and we had a deep desire to try to 
reduce our security costs in Hanford, because we don't want to 
declare it a permanent site. And these buildings looked 
attractive to be studied, and in fact, they were studied.
    The end result of that study was that in order to upgrade 
one of the buildings--and I believe it was Building 651--it 
would cost in excess of $300 million just to finish the 
building and put the security features in place.
    Senator Craig. For the purpose you were looking at it for?
    Mr. D'Agostino. For the original purpose, that's right, 
sir. And we felt that that was a lot of--well, it just didn't 
make financial sense to move plutonium twice, spend $300 
million just for an interim site. It made more sense to move it 
once.
    Since that time, of course, we've started construction on a 
mixed oxide facility, and now we're in the position of shipping 
material directly to South Carolina, which is a safer and more 
secure way of doing it, and ultimately not resulting in 
material that potentially accumulates, and the emission 
associated with it. The MOX construction is underway, from that 
standpoint.
    So, when we looked, it didn't make sense to use Idaho as a 
way-station, if you will----
    Senator Craig. Right.
    Mr. D'Agostino. For plutonium. And ultimately that's what 
ended up happening. I can provide to your staff, sir, the 
analysis that was done in that case, if that makes sense.
    Senator Craig. It does. And I appreciate that, also, 
answer, and I don't mean to sound as direct, as it might--
answer the question.
    Mr. D'Agostino. Right, the $5 million?
    Senator Craig. What happened to the 2006 appropriation of 
$5 million that was re-established in the 2007 budget, and 
somehow nothing has materialized? Because this was a general 
upgrading of the buildings for future use?
    Mr. D'Agostino. Right.
    Senator Craig. Okay, if you would do that, I would 
appreciate it.
    Mr. D'Agostino. Absolutely.
    Senator Craig. Because it's the anomaly that it's in--it 
was put in over in the House, it's in your budget in buildings 
that aren't in your responsibility, as I understand it.
    Mr. D'Agostino. That's right. And----
    Senator Craig. Thank you. So, I'm--we're just searching for 
some money.
    Mr. D'Agostino. That's right. And I think ultimately, 
because we had--there's, of course as you're probably aware, 
$14 million that was appropriated for this activity in the 2008 
Omnibus, as well. And what we want to do--you mentioned earlier 
in your question about sodium debris bed material from Los 
Alamos----
    Senator Craig. Right.
    Mr. D'Agostino. So, some of that money we would use for 
that purpose. But it would not require all of that money.
    Senator Craig. Okay.
    Mr. D'Agostino. So, we'll be coming back, ultimately, with 
a re-programming request.
    Senator Dorgan. Administrator----
    Senator Craig. Thank you.
    Senator Dorgan [continuing]. He wants to know where the $5 
million is, if you'd let us know, we'd appreciate that.
    Mr. D'Agostino. Absolutely.
    Senator Dorgan. Thank you.
    Senator Craig. Thank you.
    Senator Dorgan. Senator Reed.
    Senator Craig. Thank you, Mr. Chairman.
    Senator Dorgan. Thank you, Senator Craig.

                      RELIABLE REPLACEMENT WARHEAD

    Senator Reed. Thank you very much, Mr. Chairman.
    Mr. D'Agostino, can you tell us what the scope of work is 
in the NNSA budget for 2009 for the RRW concept? I ask that, 
because last year there was a specific RRW design line, 
attributed specifically to RRW, but then there was engineering 
and science work throughout the budget that was also attributed 
to the concept of RRW. Can you focus on what the scope of work 
is in this budget?
    Mr. D'Agostino. This budget has $10 million specifically in 
the RRW line, and the purpose of that money is to close on the 
cost and schedule and put--essentially tie the ribbon around, 
and gather in one spot, all the work that has gone into RRW.
    What you're, I believe, referring to, from previous years, 
is the fact that there is very similar elements of our program, 
for example, in the Surety Campaign, for example, that 
Campaign's responsibility is to develop Surety technologies 
that could be applied to any future system or existing nuclear 
weapons system that we have. It's not focused on RRW.
    The RRW line was focused on a particular design put forth 
by Lawrence Livermore National Laboratory, the ultimate lab 
design that was chosen.
    Senator Reed. But this work such as a Surety function, is 
that being coordinated with RRW, in the sense of, they're 
explicitly considering the possibility of moving forward with 
RRW development?
    Mr. D'Agostino. No, it's not--the Surety line is to develop 
a generic suite of Surety tools to be used, whether in RRW or 
not. But ultimately, what would have to happen, is once it's 
been decided that a Surety technology that was developed in 
this campaign was going to be used in RRW, we would have to 
stop work in that campaign, move it over to that Surety line. I 
think it's important for our laboratories to have the 
flexibility to continue to develop Surety technologies, because 
this effort is part of activities that bolster the skills that 
are so important to maintain.
    Not just to maintain the stockpile--and particularly to 
modify it as it changes and ages--but also to hone the exact 
skills that we use to understand and defeat nuclear terrorism. 
If we happen to come across an Improvised Nuclear Device, these 
are the exact same people that will be deciding which wire to 
cut--the green wire or the red wire. And they only do that 
based on developing these generic skills.
    Senator Reed. Let me continue in another aspect of this, 
for many, many years, but certainly the last 15 or so--there's 
been an investment in facilities, to improve existing 
facilities and capabilities for the Stockpile Stewardship 
Program to maintain nuclear weapons without testing. And, in 
fact, about 15 years ago, the daunting technical problems 
associated with RRW would never have been considered.
    But nevertheless, because we've been investing in the 
complex, we are now considering an RRW, and yet we're told now 
that there has to be more new investment in the complex for 
RRW. Can you talk about--comment upon that?
    Mr. D'Agostino. Absolutely, in fact, I will be very 
straightforward--we would need new investment, more new 
investment, to maintain our existing stockpile. We do not have 
the infrastructure to maintain our stockpile now. But the 
investment we need, just to maintain a nuclear deterrent 
whether it's a RRW-type future or life extension future--
they're two different avenues.
    What we're doing right now, is making the investments that 
would not preclude, essentially, going down either track. So, 
we're making the investments that cover both options.
    A quick example would be plutonium infrastructure. My view 
is, we don't need two plutonium infrastructures in this 
country, we only need one, and so we have to look at 
maintaining one, smaller, safer, plutonium infrastructure. I 
think that plutonium infrastructure could be at Los Alamos. 
Same thing with uranium, and the like.
    So, if we said RRW is not in our future--if the Congress 
says that, I understand how those decisions get made--that 
would drive the Administrator, myself or whoever follows me, to 
say, ``Well, we absolutely need to make investments in 
facilities that we have decided to hold off making investments 
in.''
    Beryllium oxide, and beryllium metal work, for example, is 
one area that we decided 4 years ago--beryllium is bad, bad 
stuff, we don't want to work with it, we're not going to spend 
$300 million in Tennessee to reconstitute a capability we'd 
prefer never to have again in our stockpile.
    That is still an open question--if we stayed with the 
existing legacy stockpile, at some point--and it won't be this 
year--but some future Administrator will be here, in front of 
this committee saying, ``I need to build a beryllium oxide 
capability, and a beryllium metal capability.'' And it's just a 
fact of life, because our current stockpile relies upon 
beryllium.
    Senator Reed. Just a quick follow-up, but if you go the 
other pathway will a future Administrator be here saying they 
have to build some specific facilities unique to RRW?
    Mr. D'Agostino. No, because I believe, for example, one of 
the elements of RRW will simplify work on plutonium. Right now, 
we think we can simplify it and do it in a much smaller space. 
If we have to reconstitute a capability to work with plutonium, 
for the cold war stockpile, we would need much more space than 
we currently are planning for right now.
    So, RRW takes a lot of materials off of the table that 
we'll never have to use again. And that's my main focus, is to 
get rid of as much of the hazardous material as I can. Physics 
doesn't allow us to get rid of uranium and plutonium at this 
point, but about everything else, we can do.
    Senator Reed. Thank you.
    Mr. D'Agostino. Yes, sir.
    Senator Dorgan. Senator Bennett.

                       SUBTERRANEAN NUCLEAR TESTS

    Senator Bennett. Thank you very much, Mr. Chairman.
    Mr. D'Agostino, I want to thank you for the wonderful trip 
that you arranged for me to visit Sandia, Los Alamos and 
Livermore, I learned a great deal, and I'm grateful to you and 
all of those who acted as host for that. I look forward to 
learning more. All I really learned was that, I don't know very 
much and sometimes that's the beginning of wisdom.
    I'm impressed by all of the work you've done, and by your 
computer capability, and I want to just ask, for the record, do 
you foresee the need to resume underground nuclear testing at a 
time in the future--at a time in the foreseeable future?
    Mr. D'Agostino. Of course, if I could predict that far 
ahead, I probably wouldn't be in this business, but we think we 
have a handle in the near term on knowing what issues we have 
in our current stockpile. And, as you probably were aware, 
there are concerns that we have--the stockpile remain safe and 
reliable right now, but these are very complicated devices, 
they're not static, I think General Chilton called it a 
``chemistry project in motion.'' You've got very hazardous 
materials, and radiation and exotic materials together for long 
periods of time. So, they're very complicated.
    I can't give you a definitive answer on that, but what I 
can say is we are very confident now that the tools that we 
have, and that the country's invested in over the last decade, 
can deal with most issues.
    I know I'm not giving you a direct yes or no answer, sir--
--
    Senator Bennett. Yes, yes.
    Mr. D'Agostino. Because I can't give you one.
    Senator Bennett. Well, I left you an out, and let me repeat 
it again, with the same out--and I understand, by the way, that 
no Administrator, no one sitting in your position representing 
any administration would ever say ``never.''
    Mr. D'Agostino. Right.
    Senator Bennett. But, with the understanding--do you have 
any idea in the foreseeable future, that you might have to 
renew underground testing?
    Mr. D'Agostino. No.
    Senator Bennett. Okay.
    It's important that we have that on the record----
    Mr. D'Agostino. Yes.
    Senator Bennett [continuing]. I got it from your 
predecessor, I need it for the people in Utah, to understand 
that we keep asking that question.
    Mr. D'Agostino. Right.
    Senator Bennett. Now, I was pleased that you requested an 
increase of 22 percent over fiscal year 2008, with respect to 
cyber-security.
    Mr. D'Agostino. Right.

                             CYBER-SECURITY

    Senator Bennett. As I mentioned to you, this is an issue 
I've been interested in now for a number of years. It may be 
difficult in this setting--which is not classified--but could 
you discuss the threat that NNSA and the other labs face from 
cyber attacks?
    Mr. D'Agostino. Absolutely. I'll discuss it in broad terms, 
if I could, and that is the laboratories and the Federal 
infrastructure that we have are literally bombarded with tens 
of thousands of attacks on a regular basis. Now, that doesn't 
mean all of them get through, because the people we have at our 
laboratories are very good at this. But, we are noticing a very 
significant increase in the amount of cyber-attacks.
    Quite frankly, we put forth a 22 percent increase in the 
cyber-security investment area in this budget request. In all 
likelihood, we're going to have to continue that kind of ramp-
up into the future, in order to develop the tools necessary to 
counter this threat.
    A lot of the times, the security focus always is on 
physical--guns, guards, gates--because most of us can see that 
and understand that. In this case, there is the sense that the 
information that's possessed is extremely valuable, and we have 
to ramp-up on the cyber side.
    So, we've got a long road ahead of us, and we have a lot 
more to do in this area. From a detail standpoint, I don't know 
if I want to get into too much detail.
    Senator Bennett. No, I have further questions, but I don't 
think this setting is the appropriate place to ask them. I 
think we can ask--have there, has there been a significant 
increase in, say, 12 months or 18 months? Or has it been just a 
steady kind of attack?
    Mr. D'Agostino. I see an ever-increasing rate, so the 
acceleration rate is increasing----
    Senator Bennett. It's logarithmic rather than arithmetic?
    Mr. D'Agostino. Yes, sir.
    Senator Bennett. I see, okay.
    Thank you very much.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Bennett, thank you very much.
    Senator Feinstein.

                 STATEMENT OF SENATOR DIANNE FEINSTEIN

    Senator Feinstein. Thank you very much, Mr. Chairman.
    And welcome, gentlemen, particularly you, Mr. D'Agostino, 
and I want to thank you, you know, we've talked on the RRW and 
other things, and as I've said to you privately, I'll say to 
you publicly--you have always been a straight shooter, and I 
very much appreciate that. And so you have very high 
credibility with me.
    I want you to understand that I support the chairman in his 
mark, if he does remove the $10 million for the RRW. And that's 
really based on the fact that we need to have this 
congressionally appointed bipartisan commission examine United 
States strategic posture and nuclear weapons policy. And it's 
due to report its findings and recommendations to Congress and 
the President by December 1, of this year. And the Defense 
Authorization bill also required the next President to conduct 
a nuclear posture review, and report by December 1, 2009.
    I really think the Congress--before it goes ahead with 
what, in my view, is a new nuclear warhead, should have these 
two things under its belt--should understand what's going to 
happen, how the strategic triad will or will not be changed, 
what our nuclear posture will be. And then, I think, it's 
easier to make this decision.

                  LAWRENCE LIVERMORE FINANCIAL ISSUES

    You also called me about Lawrence Livermore, and I'd like 
to ask you a couple of questions about it. You indicated to me 
that there were going to be 250 voluntary retirements, and 
about 500 involuntary retirements made. And the lab, because of 
the fact that it was an LLC, a limited liability corporation, 
the costs were higher.
    And as I began to think about that--you know, the corporate 
management was supposed to make the lab more economically 
competitive, in addition to bringing good management. I 
understand the lab has lost its tax-exempt non-profit status? 
Is that correct? It is. And that the new management has 
underestimated retirement and health benefit costs? Is that 
correct?
    Mr. D'Agostino. I don't know if that's--mis-estimated might 
be a reflection of the times, on these costs, are increasingly 
going up.
    Senator Feinstein. And, has the yearly management fee 
increased from $8 million to $46 million?
    Mr. D'Agostino. Yes, ma'am, consistent with the terms of 
the contract.
    Senator Feinstein. Who receives those fees?
    Mr. D'Agostino. The limited liability corporation, which is 
composed of the University of California, Beditel, and a few 
other contractors, Washington Group.
    I think there's one other fact----
    Senator Feinstein. I didn't know that when I talked to you, 
I've learned it since then, and it does cause me some concern. 
And so, let me ask you, what do you think about this management 
team?
    Mr. D'Agostino. Actually, I think very highly of the 
management team, and I'll say why.
    First of all, we've got 2 years under our belt using a 
limited liability approach at a similar laboratory, Los Alamos.
    And we've seen significant changes and improvements in 
management and efficiency at Los Alamos--I don't want to repeat 
an answer, but there are a series of improvements--11 percent 
improvement in maintenance of facilities, for example, at Los 
Alamos, significant reduction in the amount of security 
material that is around the laboratory, improvement in worker 
safety and worker health at the laboratory. As you may know, 
there's a term called ``days away reportable,'' and total 
reportable cases at Los Alamos, we're now heading in the right 
direction, and we're starting to see, right now at Livermore, 
the same types of trends--a shift, an improvement in the safety 
of the workforce.
    So, I have strong faith in the management team at that 
laboratory, and this approach of governance, which is a big 
difference from what it was before.
    I now have a Board of Governors at Lawrence Livermore, for 
example. Norm Patis is the chairman, and I can go to him and 
express my concerns as a shareholder--I represent all of the 
shareholders in the country that have invested in that 
laboratory. And he, as the chairman, has the ability to act to 
provide corporate resources to help the laboratory.
    We've seen it work at Los Alamos, and I'm actually excited 
about the opportunity to see it at Lawrence Livermore, as well.
    There were three main reasons why we're in the situation of 
having to do an involuntary separation.
    Senator Feinstein. Let me be clear on this. My concern is 
that the fees go up at the time you lay off people. This is a 
very hard time to lay off people. And, it's a very hard time to 
lay off these people, because I don't know what available jobs 
there are for physicists and very highly skilled personnel, if 
these are whom you are going to involuntarily lay off. And at 
the same time, the management part of it is collecting 
increased fees. I'm not sure that's the right thing.
    Mr. D'Agostino. I will admit, Senator, that it sends a very 
strange signal. My job, and ultimately the job of the lab 
director is to put the lab in the best competitive situation. 
Right now, the costs of doing work at Lawrence Livermore are 
too high. The customers that come to Dr. Miller tell him this 
is an expensive lab to work at.
    The lab has a tremendous future. It's has a future that's 
anchored by the National Ignition Facility, but also by its 
assets in intelligence, and in nuclear counterterrorism work, 
which I think are going to be very important to the country, 
whether we have a small stockpile or a large one--nuclear 
counterterrorism work is incredibly important, and we need to 
get those resources and that work into the laboratory.
    It's an incredibly difficult decision, it's one that I do 
not take lightly, I can assure you, in this whole process. But 
I will admit, it looks strange when you look at fees going up 
at the same time workforce is having to be reduced.
    Senator Feinstein. Well, I really question this. In the 
interest of full disclosure, Mr. Chairman, my husband is 
chairman of the Board of Regents of the University of 
California. And, you know, my responsibility is a little 
different. And I would really question--and I would ask you to 
look into--why the fees would go up at a time when you have to 
lay off 500 people involuntarily, let alone 250 voluntarily. It 
doesn't seem right.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Feinstein, thank you very much.
    I'm going to submit some additional questions to all three 
witnesses.
    Senator Domenici wishes to make a final comment, and then 
I'm going to call the second panel to the witness table.
    Senator Domenici?

                      RELIABLE REPLACEMENT WARHEAD

    Senator Domenici. Thank you very much, Mr. Chairman.
    Let me say first, General, I'm sorry we didn't have any 
questions for you, but I think we'll have some, we'll submit 
them.
    I do want to say, however, that your presence and your rank 
and the fact that you are involved in very serious issues that 
confront us with reference to stockpile of the future and RTW--
you're involved heavily in that, and you have long-term 
experience and that kind of makes me wonder what we need a 
brand-new group of people appointed by some--by the Congress to 
do the study work on this $10 million program and the future of 
it, when people like you are doing that work, in a formal way, 
and are very, very well-prepared, and prepared to tell us the 
answer to most of the questions, and we won't be using you for 
awhile, until we get that report, I guess.
    But I want you to clarify for me, Mr. Administrator, I 
think I'm confused now as to what the $10 million would be used 
for?
    Mr. D'Agostino. What it would be used for?
    Senator Domenici. Yes.
    Mr. D'Agostino. The $10 million would be used to make sure 
that past work has been adequately captured. So the money that 
we've invested over the last couple of years on this activity 
doesn't get lost.
    Additionally, the money would be used to help answer the 
questions that were asked, and put forth in the fiscal year 
2008 Omnibus Appropriations Act on advanced certification. One 
of the topics in the advanced certification omnibus line, 
talked about establishing this activity in order to address the 
JASON Report concerns about Reliable Replacement Warhead.
    In order to address those concerns, we need to further 
develop and mature, one or two aspects of the design on RRW, so 
we can do that work to answer that question posed by Congress. 
We could have put that money in the advanced certification 
line, but I think what we wanted to do is make it crystal clear 
that we weren't trying to play games. These are activities that 
are associated with maturing some of the design elements to 
answer the advanced certification questions.
    Senator Domenici. All right. So, General, you're fully 
aware with this, are you not?
    General Smolen. Yes, sir, I am. And answering some of the 
JASON questions was as part of this, but there is a 
distinction. The RRW piece does refine the data that remains, 
but it's not really incurred yet.
    Senator Domenici. Yes. Well, I'm having--now that you 
talked today with me, I'm even having more difficulty 
understanding why we wouldn't be doing it. I don't want to 
argue now with the chairman, we'll argue later, but what you 
tell me it's for, it's much--it seems to me to be almost common 
sense when you're stopping this program, and you don't know how 
long before you start it up again that, some of the things 
you've described we're going to do, we ought to do.
    It has nothing to do with pushing the program ahead, it has 
to do with just tying a ribbon around it, and making sure we 
don't lose what we've done. And I don't understand the Jason 
answers as well as that, they may very well be what is 
concerning some people about this.
    But I'd like you to help me later on, on that--I don't want 
to go out on a limb in fighting with the chairman on the floor, 
or anywhere else, if I don't understand that second part. But 
if that second part is as simple as the first part, and has so 
little to do with the future of an RRW, the program, than I 
feel like, number one, is it worth taking on? If it is worth 
taking on, it's rather easy to explain.
    And I thank you both for that, and I want to repeat for the 
record, for you, Mr. Administrator, I had a lot to do with 
forming NNSA.
    Mr. D'Agostino. Yes, sir.
    Senator Domenici. I worked closely with those who tried 
hard for a number of years to find somebody who could run the 
program. And I'm very, very disturbed that those who are 
looking for somebody to run the program--including this Senator 
who is helping--had you right in the backyard while we looked 
all over the Army, the military, the security network, and we 
put people in that didn't know how to do anything. In fact, 
they had NNSA going backward. And we found you.
    And I've got to tell you, I don't only agree with the 
Senator from California about your integrity, you've got that, 
but you're doing a terrific job with a very complex 
relationship, because these three labs are complex with 
relationship of the work you do, because they're nuclear 
deterrent laboratories.
    But we want you to pay attention to their future, too.
    Mr. D'Agostino. Yes, sir.
    Senator Domenici. Because they must be around, and we want 
you to particularly be concerned about science in these 
laboratories. That's what they're for.
    Thank you.
    Thank you, Mr. Chairman.
    Senator Dorgan. Well, Senator Domenici, you and I share a 
self-described common trait--we both lack understanding on 
this. I'm trying to understand it, as well, and you indicate 
you are.
    Senator Domenici. That's right.
    Senator Dorgan. And I would only observe, with respect to 
the RRW program, that there are a couple of things at work 
here. One is, what do we do, if anything? And number two is, 
when do we do it? And the only point I have made is there are 
larger and significant international issues that relate to our 
question about a nuclear weapons policy.
    So, we will nonetheless have a longer discussion----
    Senator Domenici. Right.
    Senator Dorgan [continuing]. Perhaps in private, perhaps in 
the subcommittee and maybe on the floor.
    Senator Domenici. And we will know what we're talking about 
before then.
    Senator Dorgan. Well, maybe not.
    But we'll enjoy it nonetheless.
    Senator Domenici. We'll try.
    Senator Dorgan. But, you know, these issues are very 
serious--very serious--and have substantial consequences, and I 
appreciate what you have said, I appreciate what Senator 
Feinstein has said, and our subcommittee will work through 
this.
    Let me thank the subcommittee--had we asked General Smolen 
a lot of questions, I know he would have answered them very 
well, he spent part of his career in Minot, North Dakota.
    General Smolen. Yes, sir.
    Senator Dorgan. So, he was fully prepared.
    We do intend to submit questions to the three of you, and 
we appreciate you being here, and ask that you would respond to 
written questions, and thank you very much.
    Mr. D'Agostino. Yes, sir.
    Senator Dorgan. I'm going to call the next panel forward--
this is a time when we have, for the first time in a long 
time--asked the directors of the three laboratories involved in 
weapons programs to come and testify before the Senate 
subcommittee.
    I want to say that I--we have done that for a very specific 
reason. I think it is important to, for us to hear directly 
from the directors of the laboratories involved in this 
important work.
    Dr. Mike Anastasio of Los Alamos is with us, Dr. George 
Miller of Lawrence Livermore is with us, and Dr. Tom Hunter of 
Sandia.
    We have invited them all and are appreciative that they've 
taken time to come to Washington, DC to present testimony. The 
entire testimony in your submitted testimony will be made a 
part of the permanent record, I would ask the three of you to 
summarize your testimony, if you will, and we will begin with 
Dr. Anastasio.
    Dr. Anastasio, why don't you proceed with your testimony 
followed by Dr. Miller, and followed by Dr. Hunter?
    You may proceed.
STATEMENT OF DR. MICHAEL R. ANASTASIO, DIRECTOR, LOS 
            ALAMOS NATIONAL LABORATORY, LOS ALAMOS, NEW 
            MEXICO
    Dr. Anastasio. Chairman Dorgan, Ranking Member Domenici, 
and other distinguished members of the subcommittee, thank you 
for the opportunity to testify about the Stockpile Stewardship 
Program. I am Michael Anastasio, the Director of the Los Alamos 
National Laboratory, and I'd like to personally thank the 
subcommittee for its strong support over very many years for 
this program that's so important to the country.
    As I look to the future, until there's a policy change, I 
must assume the Nation will continue to have a nuclear 
deterrent. And consequently, our role is to do everything we 
can to ensure that we remain confident in that deterrent for 
our national security.
    The Stockpile Stewardship Program that the country has been 
following has been the right approach. To remain confident 
while minimizing the need to ever do nuclear testing again.
    We knew this would be a hard, because the science needed 
requires advances that are well beyond anything we'd ever done 
before. And that meant new tools--experiment and computational, 
and the people who can use them.
    We've been making excellent overall progress over the last 
12 years, with many examples of remarkable accomplishments, 
even though not all of these new tools are yet in place.
    And to try to illustrate this, I thought I would just tell 
one little story as an example to illustrate. And imagine 
you're trying to understand what's going on inside a nuclear--
or a mock--nuclear weapon. And you need to take a three-
dimensional movie picture using x-rays.
    But unlike a medical x-ray, the object you're exploring is 
exploding in front of your eyes, and the length of the movie 
you're trying to take is only a millionth of a second long. And 
to make sure you can stop the action that you're watching, the 
exposure time of this image can only last for a few ten-
billionths of a second. That's DARHT, the new facility we're 
bringing online at Los Alamos, where we have just recently 
demonstrated that we can meet all, in fact, exceed, the 
technical requirements to accomplish the job I just described.
    But that's not all. Once you have this image, or this 
movie, now you have to say, well, what implications does that 
have for the overall nuclear performance of this device? And 
for that we need to be able to use computer simulations to 
predict the nuclear performance instead of doing a test.
    In the summer, the roadrunner computer that we've been 
developing with IBM, we anticipate will be the first computer 
in the world to ever achieve sustained performance of the 
petaflop, that's quadrillion calculations per second. I like a 
million billion better than quadrillion, maybe that speaks 
better. But we need a computer of that kind of horsepower.
    Senator Dorgan. Doctor, is that the same as 1,000 trillion?
    Dr. Anastasio. That is 1,000 trillion, yes sir.
    Senator Feinstein. Good for you.
    Senator Dorgan. That's much simpler.
    Dr. Anastasio. Okay, thank you.
    But whatever it is, it's that level of computational power 
that we need to try to, to try to answer that predictive 
question, what nuclear performance will we get.
    So that gives a little, I think, example of what we're 
trying to do. And there are many other accomplishments of 
outstanding science, that I describe at Los Alamos or the other 
three labs--or the other two labs.
    I think that just as a momentary sideline, I think it's 
also important to understand that this very same science, the 
tools and the people, that's being used to meet other national 
challenges, from countering proliferation and terrorism to 
global climate modeling, and alternate energy sources, the 
Stockpile Stewardship Program is the program that's putting 
that science in place.
    And if I think about the progress we've made, I think the 
most important thing, on progress in Stockpile Stewardship is 
that we now understand the status of the current stockpile, and 
the technical issues that control performance, better than we 
ever have. And that's reflected in the annual assessment 
letters that each of the three laboratory directors--and our 
predecessors--have sent in over the last 12 years.
    So, with all of this, I have confidence in the stockpile 
today. But, I am concerned about the risks to success for the 
future. And let me describe two concerns--two areas of risk.
    First, the risk to the long-term vitality of science at Los 
Alamos, to support our broad national security missions. The 
confluence of an aging infrastructure, demanding increasing 
standards for safety, security and the environment, a recent 
focus on near-term deliverables, and declining operation 
budget--operating budgets--are squeezing out science at the 
laboratory.
    My second long-term concern is the continuing accumulation 
of change to the stockpile, and these changes will increase 
performance uncertainties, and pose increasing risk in a low 
margin, legacy cold war weapons stockpile. And by following a 
remanufacturing approach in a life extension program, we 
require a cold war production complex using the technologies 
and processes which are increasingly expensive, not fully 
functional, and do not provide an agile response.
    To manage these growing stockpile risks, we should be doing 
more science, by increasing the use of our advanced tools, and 
further developing them. With a constrained NNSA budget, and 
the growing infrastructure costs, we are actually doing less 
science. The basic tenants of the Stockpile Stewardship Program 
are at risk.
    The good news is that the progress we've made in 
understanding opens up alternative paths that we could go 
forward with, rather than a life-extension program. Such a path 
could include a transformed stockpile, with increased 
performance margins, hence reducing risks.
    By also eliminating difficult materials, it could remit a 
transformed complex, further transformed than the NNSA plan is 
already outlining, and further reducing infrastructure costs.

                           PREPARED STATEMENT

    So, in conclusion, it's my view that it's time for the 
Nation to set a path for the future, and provide a commensurate 
budget that will reduce and take on addressing these risks that 
I've outlined. Los Alamos remains committed to do all we can in 
our role as a national security science laboratory.
    As so with that, I thank you for the opportunity to testify 
today, and I'd be happy to answer any questions.
    [The statement follows:]
             Prepared Statement of Dr. Michael R. Anastasio
    Chairman Dorgan, Ranking Member Domenici, and distinguished members 
of the subcommittee, thank you for the opportunity to provide a 
statement on the status and future of the Stockpile Stewardship 
Program. Today, the three directors of the national security 
laboratories are testifying before Congress about the Stockpile 
Stewardship Program for the first time since 2002 and much has happened 
in the interim.
    The Los Alamos National Laboratory remains committed to sustaining 
confidence in the United States' nuclear weapons stockpile through a 
more fundamental science-based understanding of weapons performance, 
safety, and security. I am keenly aware of the daunting technical 
challenges demanded by this mission, requiring the best science, 
engineering, and technology that we can muster. I am responsible for 
providing this set of capabilities and skills for today and, equally 
important, ensuring that they are sustainable over the long term.
    The three Department of Energy/National Nuclear Security 
Administration laboratories and their employees, working with the 
National Nuclear Security Administration production complex, are the 
basis and key driver for the successes of the Stockpile Stewardship 
Program. I personally appreciate the strong, vital support this 
subcommittee has provided over the years to enable us to execute our 
responsibilities.
    Los Alamos National Laboratory in particular has been at the 
forefront of both nuclear weapons development and the Stockpile 
Stewardship Program. As you know, beginning with its designation as 
Site Y of the Manhattan Project, Los Alamos National Laboratory's core 
mission has been to conceive, develop, and sustain the U.S. nuclear 
deterrent. Currently, 61 percent of the Laboratory's fiscal year 2008 
budget is allocated to carrying out our stockpile stewardship 
responsibilities (and associated security activities) and this mission 
is our highest priority. As a national security science laboratory, Los 
Alamos also applies this same science and engineering expertise to 
reducing threats from the proliferation of weapons of mass destruction 
and terrorism, and to provide for the Nation's energy security.
    Today, I will focus my comments on our core mission and will shape 
my remarks around three main themes:
  --A perspective on the evolution and content of the Stockpile 
        Stewardship Program;
  --An evaluation of the success of the Stockpile Stewardship Program 
        over its 12-year evolution; and
  --An assessment of the critical challenges and risks posed to 
        retaining confidence in the Nation's nuclear stockpile as we 
        look to the future.
            development of the stockpile stewardship program
    My first key theme is that the Stockpile Stewardship Program has 
been the correct program for the United States, even though it presents 
extreme technical challenges.
    With the end of the cold war, the Nation was at a crossroads with 
regard to our nuclear deterrent. Was the nuclear stockpile still 
required for the national defense? How long could the nuclear test 
moratorium, which began with a decision in 1992 by the United States to 
voluntarily cease underground tests of nuclear weapons, continue?
    In 1995, the United States embarked on an ambitious effort to 
sustain the nuclear weapons stockpile without nuclear testing, an 
effort for which we could not guarantee success. Many felt that 
maintenance of adequate confidence in the stockpile required following 
the scientific method with the ability to continue at least partial 
yield nuclear tests to address the inevitable issues that would arise. 
As one of the participants, I can tell you it was a very dynamic 
period, with much expert debate within the scientific and defense 
communities that considered a range of possible options. The policy 
decision was made for a moratorium on nuclear testing coupled with 
implementation of a science-based Stockpile Stewardship Program. This 
decision was a very significant policy shift because the scientific and 
engineering capabilities needed to confidently execute this program did 
not then exist.
    Congress, the White House, the relevant executive branch agencies, 
and the national laboratories outlined a core set of requirements that 
would be needed to take on this challenge. All involved understood that 
it would take at least a decade to bring together all the complicated 
elements of the new Stockpile Stewardship Program. It was also 
understood that success was in no way guaranteed because of the 
unprecedented scale of cutting edge science needed to accomplish this 
mission.
    The approach relies upon developing, and validating through inter-
laboratory peer review, a more fundamental scientific and engineering 
understanding of the performance, safety, and security of weapon 
operations. This fundamental approach is based on a much more extensive 
range of non-nuclear above-ground testing and a vastly improved 
simulation capability--calculations with high resolution both in 
spatial description and in physical models. These calculations are 
necessary for addressing issues requiring extrapolation beyond tested 
regimes. The existing nuclear test database is used as a crucial 
resource for challenging the validity of these improved simulations. 
Ultimately, expert judgment and rigorous peer review assures that 
critical conclusions are drawn from the best available data, 
appropriate high-resolution simulation outputs, and results from the 
suite of evolving testing capabilities. Sound science is always at the 
core of our confidence.
    In addition, enhancements to our weapon surveillance tools to 
accurately characterize the status of the weapons and the continued 
support of the production complex to extend the life of aging weapons 
were critical. The Stockpile Stewardship Program was described not as 
something with a fixed end-point, but as a new way of maintaining the 
Nation's nuclear weapons deterrent into the future.
Tools of Science-Based Stockpile Stewardship
    With the loss of the ability to test the integrated operation of a 
weapon, more technically sophisticated and more frequent non-nuclear 
above-ground tests were essential. We judged at the time that these 
tests should include at a minimum:
  --subcritical experiments to elucidate the dynamic behavior of 
        plutonium driven by high explosives (now proceeding at the U1a 
        facility at the Nevada Test Site);
  --advanced radiographic experiments with multiple images and enhanced 
        spatial resolution to provide multiple sequential views of 
        high-explosive implosion dynamics with very fine detail (e.g., 
        Dual Axis Radiographic Hydrotest Facility);
  --ignition experiments to explore the fusion process crucial to the 
        operation of modern warheads (e.g., National Ignition 
        Facility); and
  --enhanced surveillance tools for destructive and nondestructive 
        testing and analysis to characterize the status of the 
        stockpile.
    At the same time, we judged that our computer simulations would 
need to be enhanced at least 1 million times in order to incorporate 
the known physics and scientific resolution. We judged that this 
computational requirement was the minimum necessary to model subsystem 
behavior and predict integrated weapons safety, reliability and 
performance without underground testing.
    All of these capabilities were first-of-a-kind, requiring technical 
advances beyond the existing state of the art at the time. Because of 
technical challenges and funding limitations, all of these needed 
capabilities are still not yet fully in place 13 years later.
Production Complex and Life Extension Programs
    Hand in hand with all the above capabilities was the need to have a 
production complex, working together with the laboratories, which could 
respond to any potential issues discovered through the weapons systems 
surveillance process. In addition, weapons would be returned for 
remanufacture to their original specifications in order to extend their 
life into the future so that they would regain their original 
characteristics. This requires the full suite of cold war production 
capabilities.
    I am convinced that the Stockpile Stewardship Program has been the 
right program for the United States. What the Nation committed to over 
a decade ago is a very challenging set of integrated scientific 
capabilities that provide a means to validate the reliability of our 
strategic deterrent. For success, a balanced funding profile, between 
near-term actions and long-term capability investment was needed. A 
compromise of any one of the Stockpile Stewardship components will have 
significant consequences on the overall program. We have been able to 
sustain confidence in the nuclear deterrent through a program whose 
elements were beyond the state of the art at the program's inception--a 
remarkable testament to the people throughout the National Nuclear 
Security Administration complex.
          the stockpile stewardship program has been a success
    My second key theme is that the Stockpile Stewardship Program has 
been extremely successful since its inception.
Annual Assessment
    President Clinton stated on August 11, 1995, ``In this regard, I 
consider the maintenance of a safe and reliable nuclear stockpile to be 
a supreme national interest of the United States. I am assured by the 
Secretary of Energy and directors of our nuclear labs that we can meet 
the challenge of maintaining our nuclear deterrent under a CTB through 
a science-based stockpile stewardship program without nuclear 
testing.''
    For the 12th consecutive year in September 2007, the Laboratory 
Directors each signed their annual assessment letter reporting that 
there was no requirement for nuclear testing at this time to maintain 
the certification. I have had the honor to be involved each of these 12 
years, personally signing a letter on five occasions. Today, these 
letters also include the additional assessments required by section 
3141 of the Fiscal Year 2003 National Defense Authorization Act.
    My 2007 assessment was based on the following comprehensive data 
set analysis:
  --The details contained in the joint Los Alamos National Laboratory--
        Sandia National Laboratories 2007 annual assessment report 
        based on the ongoing theoretical, analytical, experimental, and 
        computational activities throughout the year.
  --Assessments by applicable Los Alamos National Laboratory technical 
        experts and managers on the adequacy of science-based tools and 
        methods, tools and methods employed by the manufacturing 
        infrastructure, and nuclear test readiness.
  --An evaluation of the health of the stockpile by my Director's Red 
        Team for annual assessment, an independent group of technical 
        experts from Los Alamos National Laboratory, Lawrence Livermore 
        National Laboratory, and Sandia National Laboratories.
  --The extensive and detailed technical reviews that I personally 
        conducted of each warhead with technical experts on the Los 
        Alamos National Laboratory warhead design and engineering 
        teams.
    Equally important, I assessed the current status of each weapon's 
nuclear package, the health of the overall Stockpile Stewardship 
Program, and the areas of significant risk.
Life Extension Programs
    For most stockpile issues, the application of the Stockpile 
Stewardship Program tools has allowed the laboratories to resolve 
anomalous conditions with no impact to safety, reliability, or 
performance. For other issues that cannot be resolved in a timely 
manner through the Stockpile Stewardship Program, the following options 
are available:
  --exceptions, limitations, or changes to the Military Characteristics 
        or Stockpile to Target Sequence;
  --component replacement or warhead refurbishment;
  --introduction of more robust components that sustain the reliability 
        of the stockpile;
  --selective retirement of individual warheads or a warhead type;
  --decertification; or
  --nuclear testing.
    In the past, all of these options have been employed. Today, we 
routinely use all options except decertification or nuclear testing to 
maintain the certification of warheads in the stockpile. In particular, 
we have completed the W87 Life Extension Program (LEP), achieved first 
production units on Alt 357 for the B61-7 and B61-11, as well as 
numerous smaller changes to gas transfer systems and non-nuclear 
components or subsystems to allow us to extend the life of these 
systems where possible. The first production unit for the W76-1 was not 
achieved on schedule as a result of a difficult materials production 
issue. Los Alamos National Laboratory is providing significant on-site 
technical assistance and coordination between the plant and Laboratory 
materials experts. The Laboratory also is working with the National 
Nuclear Security Administration to develop a recovery plan consistent 
with Department of Defense needs.
Reestablishing Pit Capacity
    In 2007, Los Alamos National Laboratory produced the first war 
reserve pit manufactured in the United States since the Rocky Flats 
Plant was closed in 1989. By the end of fiscal year 2007, the 
Laboratory had manufactured 11 W88 pits (one more than required) and 
delivered 6 pits to the Pantex Plant for use in stockpile warheads. One 
of these has been assembled into a war reserve W88 warhead with the new 
4T Terrazzo gas transfer system. The 4T was delivered for use and 
certified over 1 year ahead of schedule, a remarkable achievement that 
reflected excellent coordination among all sites in the nuclear weapons 
complex. As W88 warheads with Los Alamos National Laboratory 
manufactured pits enter the stockpile, warheads returned for 
surveillance will be available for disassembly and inspection, 
correcting a long-standing weakness in the W88 surveillance program.
Advanced Simulation and Computing (ACS)
    Of all of the elements of the original Stockpile Stewardship 
Program this area has shown the most progress. Los Alamos, Lawrence 
Livermore, and Sandia National Laboratories have led the way in 
developing the world's fastest supercomputers and then harnessing that 
power into tools needed to simulate our baseline weapons performance. 
This capability allows us to integrate our component level 
understanding into overall system performance. We have already enhanced 
our computing speed by more than a factor of one million with the ASC 
Purple machine at Livermore. The return on investment in this area has 
been high for the United States. For example, we are now able to 
confront the most challenging weapons physics questions that have 
plagued us for decades.
    Los Alamos National Laboratory, in a partnership with IBM, has 
completed the installation of the first phase of the Roadrunner 
supercomputer for computations in support of national security science. 
Roadrunner is expected to become the world's first system to achieve a 
sustained performance level of a petaflop--a quadrillion calculations 
per second--early this summer. All three National Nuclear Security 
Administration laboratories will use Roadrunner for advanced physics 
simulations and predictive simulations of complex scientific processes.
Advanced Radiographic Experiments
    Beginning in December 1999, warhead designers were able to see the 
clearest views ever made of the inside of an imploding, mock-weapon, 
test object with the successful operation of the first axis of the Dual 
Axis Radiographic Hydrotest Facility (DARHT). The images helped to 
validate new descriptions of high-explosive driven physics used in 
computer simulations of weapons performance.
    With the advent of the Stockpile Stewardship Program, the decision 
was made to enhance the capability of the DARHT second axis to a 4-
pulse machine. This enhancement required a completely new accelerator 
design that went far beyond what had ever been attempted before. Now in 
2008, DARHT has met, and in many cases far exceeded, all of its 
technical requirements and expectations. We expect that this month it 
will officially become ``dual'' with the formal completion of the 
project for the second axis, adding both new capability and higher 
energy to this unique accelerator facility. The first use of this full 
capability in an implosion test of a mock weapon will take place later 
this year. The ability to produce multiple pulses with varied 
intensities in a preset time sequence allows warhead designers to 
specify what they want to see and DARHT will be able to deliver.
Ignition Experiments
    The National Ignition Facility (NIF) is a critical piece of the 
Stockpile Stewardship Program and, arguably, is the most complicated 
and complex part. Developing a more detailed understanding of the 
fusion reactions that take place inside a weapon system remains one of 
the great challenges in the field of weapons science. Until the 
National Ignition Facility becomes operational, significant 
uncertainties will remain. I understand how difficult this project has 
been and am also acutely aware of the immense contributions that the 
full capacity of NIF will make to the overall Stockpile Stewardship 
Program. My conversations with Director Miller lead me to believe that 
this project is tantalizingly close to fruition.
Stockpile Surveillance
    The weapons in the stockpile are not static. The chemical and 
radiation processes inside the nuclear physics package induce material 
changes that limit weapon lifetimes. We are seeing significant changes 
that are discussed in detail in my Annual Assessment letter.
    The improvement in efficiency at Pantex helped us understand the 
present state of the stockpile and has greatly reduced our disassembly 
backlogs. This improvement allows us to get up-to-date technical 
information on the condition of weapon materials. We use the 
stewardship tools to evaluate the changes that continue within the 
stockpile. Using more detailed data from enhanced surveillance tools, 
we now have a better understanding of the major sources of stockpile 
issues:
  --Birth Defects.--Flaws introduced into the warhead resulting from 
        the manner in which it was produced, manufactured, or 
        assembled;
  --Design Limitations.--Warhead design decisions that were made that 
        limit conditions under which a warhead can reliably operate 
        because of incomplete scientific understanding of physics 
        performance; and
  --Aging Effects.--Changes in the stockpile that constantly take place 
        and reduce the operating ranges or reliability of the 
        warheads--effects that will continue to grow as the stockpile 
        ages.
    Los Alamos and the nuclear complex continue to make great strides 
in being able to both discover and correct these problems through 
advanced surveillance and nondestructive testing. As potential concerns 
are discovered, commonly referred to as SFIs or significant finding 
investigations, we are now able to use our new tools to rapidly assess, 
simulate, and model potential effects. At Los Alamos, we have 
dramatically reduced the number of open, unresolved SFIs over the last 
few years. Further, we are using our increased understanding to reduce 
the sampling rate for surveillance, while focusing on the important 
aspects for each warhead system.
Other National Security Applications of Stockpile Stewardship Tools
    Additional important national benefits derive from these 
capabilities. Los Alamos applies this same science and engineering 
expertise to reduce threats from the proliferation of weapons of mass 
destruction and terrorism, and to provide for the Nation's energy 
security. The Laboratory works on the front lines and behind the scenes 
to prevent the use of nuclear or radiological materials as threats to 
national or international security. The Nuclear Nonproliferation 
Program and its predecessors originated nuclear safeguards and created 
most of the technology used to monitor and measure nuclear materials to 
assure their use in legitimate, peaceful purposes.
Recent Los Alamos Threat Reduction Accomplishments
  --We delivered the fully integrated Cibola Flight Experiment space 
        vehicle for launch with an orbiting computer capable of 
        performing more than 1 trillion operations per second. This 
        matches the performance of the best supercomputers from a 
        decade ago, yet weighs only 40 pounds and requires only 80 
        watts of power.
  --We rapidly and effectively supported the national response to the 
        North Korean nuclear test. We provided the sole technical 
        support from the Department of Energy at the Six-Party talks in 
        Beijing on implementation of the North Korean denuclearization 
        commitments.
  --We recovered more than 1,750 U.S.-origin radiological sources in 
        fiscal year 2007, including the first-ever disposal of Radium-
        226 sealed sources.
Recent Los Alamos Science and Energy Security Accomplishments
  --We garnered over 102 major science awards from major external 
        organizations.
  --We developed the first high-resolution climate model for ocean 
        circulation that allows us to better understand climate effects 
        like El Nino and La Nina.
  --We completed the 100th genetic sequence for the Joint Genome 
        Institute.
    These accomplishments represent a different application of the 
science underlying our core nuclear weapons mission. For example, many 
of the same people who would help us deal with potential nuclear 
terrorism incidents are our experts from the nuclear weapons program. 
Our global climate change expertise developed out of our need for 
knowledge on nuclear winter effects tied to the nuclear weapons 
program, and our supercomputer expertise was developed to simulate 
nuclear explosions. The dual-use aspects of our scientific capabilities 
allow for greater national return on investments, discovering other 
important applications for the stockpile stewardship tools. This 
broader use can often enhance their application for our core mission.
    Even though all the elements of the Stockpile Stewardship Program 
are not yet in place and there are certain science processes that we do 
not understand yet, it is clear that there have been and continues to 
be significant accomplishments emanating from the scientists and tools 
of this program. This program has allowed us to sustain the necessary 
level of confidence in the stockpile. At the same time, we have much 
greater insight into the risks we face for the future.
  increasing risks to the future success of the stockpile stewardship 
                                program
    Today I have confidence in the United States nuclear deterrent and 
believe that within the next few years we will put in place the 
essential tools we envisioned at the outset of the Stockpile 
Stewardship Program. But I have increasing concerns as I look to the 
future. The stockpile continues to change because of aging and the 
necessity to remanufacture cold war weapons through the Life Extension 
Program approach. The accumulation of these changes, whose combined 
effects are difficult to quantify, will increase our uncertainties and 
pose increasing risk.
    At the same time, there are ever-increasing standards imposed by 
environmental management, safety, and security requirements driving up 
the costs of the overall infrastructure. When coupled with a very 
constrained budget, the overall effect is exacerbated, restricting and, 
in some cases eliminating, our use of experimental tools across the 
complex. This puts at risk the fundamental premise of Stockpile 
Stewardship. At a time when our uncertainties are increasing, we should 
have a more vigorous program of non-nuclear, above-ground testing 
development and use, capabilities that allow us to validate and augment 
our developing predictive simulation tools. Regrettably, we are moving 
in the opposite direction.
         tough challenges ahead--los alamos national laboratory
    I will first address specific challenges at Los Alamos National 
Laboratory. The risks at Los Alamos are similar to those that we face 
nationally.
Commitment to Science
    Although available science-based tools and methods, both the large-
scale facilities discussed above and the laboratory-scale capabilities 
that are the workhorse of our programs, have been adequate to address 
current issues in the stockpile, use of these tools is particularly at 
risk.
    Los Alamos is one of the oldest sites in the nuclear complex whose 
facilities are difficult to maintain. Several of our aging facilities 
are nuclear facilities with extremely demanding standards for the 
environment, safety, and security. At the same time, the National 
Nuclear Security Administration's preferred alternative for complex 
transformation designates Los Alamos as the national center for 
plutonium R&D and production, further concentrating nuclear operations 
on our site. This increased responsibility for nuclear facilities and 
operations must be viewed in the context of a reduction in purchasing 
power of approximately half a billion dollars over the last 5 years 
Moreover, from our preliminary planning discussions with the National 
Nuclear Security Administration, we anticipate further erosion of our 
purchasing power by about $400 million over the next 5 years, assuming 
inflation and a flat level of appropriated dollars.
    The growing costs of our infrastructure in this declining budget 
environment puts science at risk, especially our ability to execute and 
develop large-scale and laboratory-scale experiments. As the questions 
arise from a stockpile that inevitably continues to undergo change, we 
will be increasingly constrained in our ability to gather the data 
essential to assess those changes and to assure the efficacy of the 
recommended actions that must be made.
    There are equally important consequences for the long term as well. 
All of the above near-term pressures constrain our ability to renew our 
aging infrastructure, which becomes more expensive to maintain the 
longer this renewal takes. Nationally, the program has become more 
focused on implementing near-term solutions at the expense of longer-
term investments. The overall risks in the Stockpile Stewardship 
Program will be growing in the future. A balance of long-term 
investments in science and engineering with near-term actions will best 
serve the success of the program.
Commitment to the Scientists
    Key to the ability of Los Alamos to respond to national needs over 
the long term is maintaining our technical skills--our people make us a 
premier national security science laboratory. We must be able to 
recruit and retain the best and brightest scientific talent. Los 
Alamos, like all the other national laboratories, draws and retains 
scientists because of the unique capabilities and opportunities we 
offer.
    Part of what attracts people to a science laboratory such as Los 
Alamos, are the unique capabilities that are hard to find elsewhere. 
LANSCE, our neutron accelerator, has been a prime example of such a 
capability. Part of the future that we see for this facility is to 
transform it into the world's premier materials science and test 
capability, Matter-Radiation Interaction in Extremes (MaRIE). MaRIE 
will be designed to create and exploit extreme radiation fluxes and 
probe matter to achieve transformational materials performance through 
predictive multi-scale understanding. This facility would draw 
scientists to Los Alamos because it would represent a one-of-a-kind 
user facility whose scientific and practical applications could not be 
duplicated, and it would also be a key facet to the weapons program. 
When coupled with modern facilities and equipment and our role as a 
high-performance computing center (Roadrunner is the latest example), 
this facility would help ensure our access to the best scientific 
talent well into the future.
    Because there is no advanced training program for nuclear weapons 
physics and engineering at our colleges and universities, the National 
Nuclear Security Administration laboratories need the right tools to 
attract scientists and engineers from the traditional disciplines and 
then teach them the true art of what we do. Without the continuing 
commitment to exceptional science, Los Alamos National Laboratory will 
not be able to provide the incredible diversity and depth of talent we 
require.
Commitment to Modern Facilities
    Los Alamos is one of the oldest sites in the nuclear complex. With 
many old, high-consequence mission facilities, our Laboratory is very 
expensive to maintain. The Laboratory's main focus for infrastructure 
reinvestment priorities is replacing the Chemistry and Metallurgy 
Research building (CMR) and refurbishing our LANSCE accelerator 
facility. The CMR building was built in the late 1940s and early 1950s 
to support scientific research of plutonium and other actinide 
elements. But after more than 50 years of service, it will be very 
difficult for the CMR to continue to meet modern safety, security, and 
operational requirements. Several sections have been closed to help 
manage risk, and the remaining laboratory space is harder and more 
expensive to use. As part of the National Nuclear Security 
Administration's preferred alternative for complex transformation, the 
CMR would be replaced by a new facility called the Chemistry and 
Metallurgy Research-Replacement (CMR-R) project.
    The CMR-R project will include two buildings, one a light lab and 
administration building and the other a high-security R&D and storage 
building. Together these two structures will have a smaller footprint 
then the old CMR facility, and will be safer and more secure. The first 
phase of the CMR-R project, currently under construction, is the 
Radiological Laboratory Utility Office Building (RLUOB), a modern 
laboratory facility that will include 19,000 square feet of laboratory 
space, offices for 350 people, and a training facility. The second 
phase of the CMR-R project is the Nuclear Facility and construction 
will begin in the first quarter of 2010. The Nuclear Facility is being 
designed to provide 22,000 square feet of laboratory space, mostly 
dedicated to plutonium research, and will include a vault capable of 
storing 6 metric tons (6,000 kilograms) of plutonium. Neither the RLUOB 
nor the Nuclear Facility will manufacture pits. Regardless of whether 
the Nation elects to sustain the existing stockpile or transform it to 
a different configuration, congressional support of the CMR-R will be 
essential to conduct the fundamental research that supports the use of 
actinides in weapons and in other critical applications.
    As I mentioned earlier in my statement, the Laboratory has 
developed a plan to sustain our long-term scientific capability in 
materials science through the experimental facility MaRIE. This plan 
could realistically take about a decade to reach full completion. A 
critical first step in evolving LANSCE, a fully functional but aging 
facility, into the MaRIE capability would be to start refurbishing the 
base accelerator within the next year with the help of Congress. 
LANSCE-R, as we refer to the refurbishment project, is an immediate 
critical step if Los Alamos is to continue using this facility for our 
classified weapons research activities. LANSCE is the only facility of 
its type in the country that can support both classified weapons 
research and unclassified scientific experiments. The weapons program 
relies heavily on capabilities derived from LANSCE, such as proton 
radiography, to interrogate fundamental physics cross-sections, the 
properties of various classified subsystems, and materials under 
extreme conditions.
Controlling Costs while Maintaining Mission Capability
    I believe it is incumbent on my management team to focus on 
aligning overall costs with the mission requirements while at the same 
time finding efficiencies for more effective use of overall 
programmatic funding. At Los Alamos, we are actively working to reduce 
our physical footprint by roughly 2 million square feet (over one-
quarter of the reduction has been completed in the last year and a 
half). We have internally absorbed the higher operating costs 
associated with the new contract structure. At the same time, we are 
providing significant leadership in the National Nuclear Security 
Administration's effort to achieve complex integration. Los Alamos is 
also working with the National Nuclear Security Administration and the 
Department of Energy in developing a third-party financing proposal to 
build a new science complex to help further consolidate our overall 
facilities footprint. This proposed new facility would eliminate over 
450,000 square feet of existing substandard scientific space and house 
over a 1,500 scientific staff in the main Technical Area of the 
Laboratory.
    The Laboratory has also had to make tough decisions and significant 
reductions in overall staffing levels. Since the beginning of fiscal 
year 2006, the Laboratory's total headcount has been reduced by over 
2,100 individuals, about 46 percent of whom were part of the technical 
workforce. Matching the Laboratory's workforce to the size of our 
budget is my responsibility, but I am deeply concerned that with the 
loss of mission experienced scientists and engineers and the current 
budget outlook Los Alamos' ability to execute our mission is at risk 
for the future.
    In summary, it is my view that it is in the national interest that 
we continue to develop and nurture the Laboratory's scientific talent 
and to invest in and rebuild our infrastructure in order to preserve 
Los Alamos National Laboratory as a premiere scientific institution. To 
achieve these critical outcomes, we need the help of Congress to ensure 
a stable, forward-looking, balanced budget profile to plan for the 
future.
   critical crossroads for the national stockpile stewardship program
    Since the moratorium on nuclear testing began in 1992, the 
Stockpile Stewardship Program has successfully maintained the nuclear 
weapons stockpile; however, it has become increasingly difficult and 
costly to sustain our legacy stockpile, manufactured in the 1960s, 
1970s, and 1980s through refurbishment projects. The full cold war 
infrastructure required to support the older technologies and processes 
embodied in weapons developed during the cold war is expensive, not 
fully functional, and does not provide an agile response to evolving 
needs. The overall cost of the weapons complex is dominated by growing 
infrastructure costs, relatively independent of the number of weapons 
in the stockpile.
    The continuing accumulation of small changes from stockpile fixes, 
life extension activities, and aging--with combined effects that are 
difficult to quantify--will result in larger performance uncertainties 
and pose increasing risk to the certification of low-margin legacy 
warheads.
    With growing costs of the full cold war infrastructure and the 
prospects for a declining budget, it is becoming more difficult to 
maintain, use, or enhance the Stockpile Stewardship tools we have put 
in place. At the same time, there is a continued decline in the number 
of people in the complex who have direct experience with the design, 
manufacture, and testing of an actual weapon. Yet with the increasing 
risk to certification noted above, we should be moving in the opposite 
direction. To assess the impact of larger performance uncertainties 
with low-margin warheads we need a more detailed technical 
understanding of key, fundamental, technical issues to manage these 
uncertainties. This requires the more frequent use and further 
development of advanced laboratory-scale and large-scale capabilities 
and the simulation tools that can predict these results. The 
combinations of these factors cause me to conclude that the basic 
tenets of the Stockpile Stewardship Program are at risk.
    With increasing risks to certification, I urge us to implement a 
more comprehensive inter-laboratory peer review process as part of 
Annual Assessment. Only one design laboratory would have certification 
responsibility for each nuclear package, but all the information for 
each would be readily available to both design laboratories. This would 
include, for example, the original nuclear test data, and all current 
data from surveillance and non-nuclear testing. Each would then execute 
a comprehensive assessment of the current nuclear package status and 
share that with the certification responsible design laboratory that 
would inform their final assessment. This approach is a near-term step 
that could mitigate the increasing certification risks and also provide 
more opportunities to build workforce expertise at both laboratories. 
In the past 2 years, Lawrence Livermore and Los Alamos have taken a 
step in this direction where the two directors are jointly briefed on 
the status of all the nuclear packages.
    The Stockpile Stewardship Program has provided a much better 
understanding of both the stockpile status and the key technical issues 
that control performance and reliability. This insight has opened up 
the possibility of alternate paths forward beyond the current Life 
Extension Program approach. Such a path could include a transformed 
stockpile with increased performance margins, reducing risk. By also 
eliminating difficult materials it could permit a transformed complex, 
reducing infrastructure costs. It is clear to me that it is time to 
start making decisions about how to best accomplish this 
transformation.
    Los Alamos fully supports the National Nuclear Security 
Administration in the development of a more cost-effective, lower-risk, 
and more responsive nuclear weapons complex infrastructure. A 
replacement warhead strategy, such as the Reliable Replacement Warhead 
concept, would have greater margin against performance uncertainties 
and would use design options with materials and components that would 
be less complex, safer, more secure, and easier to manufacture and 
maintain. Additionally, if the Department of Defense can have greater 
confidence in the National Nuclear Security Administration complex and 
its products, then that could lead to even further reductions in the 
stockpile.
                           concluding remarks
    Los Alamos National Laboratory is committed to providing our 
technical expertise as part of the national effort to sustain 
confidence in a viable nuclear deterrent, while minimizing the risk for 
a return to nuclear testing, with the smallest number of weapons 
consistent with national policy goals.
    The Stockpile Stewardship Program has been the right approach for 
the United States. We knew at the outset that it would be a very 
challenging program as the required scientific capabilities 
necessitated advances beyond the existing state of the art. There was 
no guarantee of ultimate success.
    Over the last decade, there has been excellent overall progress 
with many examples of remarkable accomplishment. Among them is a much 
better understanding of the status of the current stockpile.
    I am concerned about the risks to success for the future. First, 
the long-term vitality of science at Los Alamos to support our national 
security missions is at risk. Second, the continuing accumulation of 
changes to the stockpile will increase performance uncertainties and 
pose increasing risk in low-margin legacy cold war designs.
    It is time for the Nation to set a path for the future that will 
address these risks.
    Thank you for this opportunity to testify. I would be pleased to 
answer any questions you may have.

    Senator Dorgan. Director Anastasio, thank you very much.
    Next, Director Miller?
STATEMENT OF DR. GEORGE H. MILLER, DIRECTOR, LAWRENCE 
            LIVERMORE NATIONAL LABORATORY, LIVERMORE, 
            CALIFORNIA
    Dr. Miller. Thank you very much, Chairman Dorgan, for 
inviting me here and giving me the opportunity to give you my 
perspective of the health of the Nation's nuclear weapons 
program. I'd especially like to thank Senator Domenici, and 
personally thank him for his many years of leadership and 
service to this Nation, and importantly, for his extensive and 
exceptional stewardship of this country's science and 
technology and nuclear affairs, broadly.
    I'm also very pleased that Senator Feinstein is here, and I 
thank her very much for her continuing support of the 
laboratories broad mission.
    I'd like to summarize just a couple of points from my 
written testimony. Through Stockpile Stewardship, this Nation 
has been able to maintain an increasingly small nuclear 
deterrent, without nuclear testing. But the job's not done.
    I'm concerned that the investments that have brought us to 
this point are at risk. As you and several members of the panel 
have pointed out, the country needs to make a series of 
decisions about the overall structure of the nuclear weapons 
program, and the policies associated with it. It is my view 
that--independent of the policy that we move forward--the 
science and technology embedded in the Science-based Stockpile 
Stewardship is necessary to succeed, because it is the 
intellectual underpinning for any decision.
    I'm extremely proud of the contributions that Livermore has 
made to bringing the Stockpile Stewardship Program to this 
point. The W87 life extension program was the first life 
extension program certified without nuclear testing.
    Through the Livermore, IBM, NNSA partnership, we have 
successively produced the world's largest computers, currently 
BlueGene/L at Livermore is 500 teraflops, half a petaflop.
    Weapons simulations using these computers have shown us 
that there's much about the inner workings of a nuclear weapon 
that we do not yet understand, and they've pointed the way to 
the scientific capability that's necessary to continue to be 
able to certify the stockpile.
    The national ignition facility is already the world's 
largest and most powerful laser, and it will be completed 
within a year. It will shortly bring fusion experiments, and 
the science of the cosmos to the laboratory. It's critical to 
enabling us to answer some of the most fundamental questions 
that we have about nuclear weapons performance.
    Since the project was re-baselined about a decade ago, the 
NIF has been on-budget, on-schedule, and met all of its 
milestones. I thank the committee for its role in allowing NIF 
to move forward. I think you can take great pride in its 
accomplishments.
    But the job of Stockpile Stewardship is not complete. The 
weapons are continuing to age, and the experienced weapons 
scientists are continuing to age. Some of the tools are just 
now coming online, they have yet to be applied to the full 
spectrum of problems that need to be resolved. As Mike said, 
DARHT has just recently been completed, it needs to be applied 
to the stockpile.
    The simulations done on the BlueGene/L have pointed out 
that we need tens of petaflops sustained to be able to 
accurately understand what's going on in a nuclear weapon. NIF 
is not yet complete.
    To ensure better confidence as we move forward, I believe 
it's important that we implement a more comprehensive peer 
review, whereby Livermore and Los Alamos more fully evaluate 
the entire stockpile each year, and it's essential that we 
complete this job.
    I think we understand what the laboratories----
    Senator Domenici. Would you repeat that again, please?
    Dr. Miller. Yes, sir.
    I believe that we should implement a more comprehensive 
peer review, whereby Livermore and Los Alamos each year would 
more fully evaluate all of the stockpile, rather than just the 
systems for which they own have responsibility.
    I think our job as laboratory directors is to provide 
technical options that can inform policy goals of the United 
States. To provide a weapons complex that's sustainable into 
the future, that has the smallest number of weapons consistent 
with policy goals, has the least costly weapons complex, and 
minimizes any need to return to testing.
    As I look into the future, I'm concerned that the 
investments that have brought us to this point are not 
sustained. If they are not sustained, I believe a crisis in 
confidence will result.
    Without a fully developed science and technology program, 
we will lose confidence in the stockpile, whether we have a 
life extension program, or some other. I believe we are seeing 
the signs of this concern borne out already, the critical 
investments in the accelerated super-computing initiative have 
already begun to decline. We are not able to fully utilize the 
experimental facilities that we have built.
    The effects are already being felt at Livermore, with the 
reductions associated with last year's Federal budget, and the 
costs associated with the contract. By the end of this fiscal 
year, Livermore will have reduced its population by more than 
2,000 people from the beginning of fiscal year 2007.
    I believe that the Stockpile Stewardship Program is at a 
cusp of being able to ensure confidence in the stockpile 
without nuclear testing. I believe we can be successful if we 
push forward, I believe we can fail if we stop.
    The weapons labs are centers of big science in this 
country. The resident expertise is being applied to the 
pressing problems of this country, of securing the Nation's 
defense and energy, and environmental and economic security.
    Nuclear weapons expertise is critical to intelligence and 
understanding the problems of proliferation and terrorism. 
Nuclear weapons expertise is critical to the issue of 
understanding nuclear forensics. As a result of the scientific 
investments made by the Department of Energy and this 
subcommittee, these labs provide value to the country, well 
beyond nuclear weapons, in areas that I believe are the 
defining issues of this century.

                           PREPARED STATEMENT

    We're doing a lot, but we can do more. All that we do is 
dependent upon the vital core of the nuclear weapons program. 
As you forward through the difficult decisions ahead of you, I 
ask that you think in terms of sustainment--sustaining and 
protecting what is most critical, and applying these critical 
resources to our country's, and the globe's, most defining and 
important problems.
    [The statement follows:]
               Prepared Statement of Dr. George H. Miller
    Mr. Chairman and members of the subcommittee, thank you for the 
opportunity to provide my perspectives on the fiscal year 2009 budget 
request as well as the health of the country's nuclear weapons 
stockpile and nonproliferation programs. I am the Director of the 
Lawrence Livermore National Laboratory (LLNL), a multidisciplinary 
national security laboratory with major responsibilities in nuclear 
weapons. My responsibility--and today's critical challenge--is to help 
enable a nuclear weapons program that is sustainable into the future 
with the smallest number of weapons and the least costly weapons 
complex consistent with policy goals and that minimizes the risk of 
needing to return to nuclear testing.
    Because this is a time of significant change for the National 
Nuclear Security Administration's (NNSA's) nuclear weapons complex and 
our Laboratory, I open my statement with my perspective of the broad 
challenges we face. I then briefly highlight Livermore's 
accomplishments in NNSA programs and specific issues related to our 
activities. I conclude with summary remarks about my future vision for 
the Laboratory.
    But first, I want to thank the Congress and especially this 
subcommittee for your continuing strong support of the Stockpile 
Stewardship Program and our important and technically demanding 
programs to reduce the dangers of proliferation of nuclear weapons. The 
Stockpile Stewardship Program continues to make excellent technical 
progress, but it is not yet complete and faces challenges in the years 
ahead. Critical decisions have to be made about the future of the U.S. 
nuclear stockpile and the weapons complex. Independent of specific 
choices made, it is clear that a strongly supported and sustained 
Stockpile Stewardship Program is necessary to ensure that this Nation 
can maintain the safety, security, and reliability of its nuclear 
deterrent over the long term. I support NNSA's goal of transforming the 
nuclear weapons complex to make it smaller, safer, more secure, and 
more cost effective. I recognize the realities that constrain the 
overall budget as we attempt to create a nuclear enterprise appropriate 
to the post-cold war era.
          challenges facing the nnsa weapons complex and llnl
    Lawrence Livermore National Laboratory serves NNSA and the Nation 
by applying multidisciplinary science, engineering, and technology to 
meet urgent challenges to national security and global stability. Since 
the Laboratory's inception in 1952, a special national security 
responsibility has been ensuring that the Nation has a safe, secure, 
and reliable nuclear weapons stockpile. In addition, Livermore provides 
advanced technologies, integrated analyses, and operational 
capabilities to prevent the spread and use of weapons of mass 
destruction and strengthen homeland security.
    Our special multidisciplinary capabilities are also applied to 
strengthen global security through research and development for 
advanced defense systems, abundant energy and environmental quality, 
biotechnology to improve human health, U.S. industrial competitiveness, 
and basic science. These activities--many directed toward finding 
innovative solutions to the great challenges of the 21st century--both 
derive from and depend on the core nuclear weapons science and 
technology and also contribute to supporting the science and technology 
required for our nuclear weapons mission.
    Livermore is an integral part of NNSA's Stockpile Stewardship 
Program and committed to helping the Nation transform the U.S. nuclear 
weapons complex and stockpile to meet 21st century deterrence needs. We 
need an affordable nuclear weapons complex; the smallest nuclear 
deterrent force consistent with policy goals; and a sustainable nuclear 
weapons program that provides confidence in the safety, security, and 
reliability of stockpile and minimizes the risk of the need for nuclear 
testing.
    The Stockpile Stewardship Program was a very ambitious undertaking 
when launched a little over a decade ago. To date it has been highly 
successful in its two major goals. First, we had to develop and use 
vastly improved tools to much better understand nuclear weapons 
performance. I am proud of our tremendous accomplishments in this area. 
Great progress has been made and even more will come with quadrillion-
operations-per-second (petascale) computers and high-fidelity 
simulations and the capability, beginning in 2009, to conduct 
thermonuclear weapons physics experiments at the National Ignition 
Facility (NIF). These tools are critically important to maintain 
confidence in our deterrent without nuclear testing. Second, we have to 
sustain the expertise--people--to ensure that the U.S. nuclear 
stockpile remains healthy by applying our improved understanding of 
weapons performance to deal with issues that arise in aging weapon 
systems without resorting to nuclear tests. So far, we have been able 
to do that. The first weapon system to successfully complete a life-
extension program under the Stockpile Stewardship Program without 
nuclear testing was Lawrence Livermore's and Sandia's W87 ICBM warhead. 
Although the job is not over, I remain confident that science-based 
stockpile stewardship will continue to be a technical success provided 
that the Nation continues its investments in the science-based 
programmatic activities.
    Budgets for NNSA nuclear weapons activities are tight and likely to 
remain so. As I look to the future, I am very concerned that the 
investments that have brought success to science-based stockpile 
stewardship might not be sustained. Over the longer term, failure to 
sustain investments in stockpile stewardship will result in loss of the 
expertise, capabilities, and activities that underpin the Annual 
Stockpile Assessment and certification of weapon modifications. That 
would lead to a loss in confidence in the stockpile. In some respects, 
the future is now at Livermore. The National Ignition Campaign, work 
needed to carry out the initial ignition experiments in 2010 and 
continuing research the following years, did not receive the full 
funding requested by NNSA in fiscal year 2007, fiscal year 2008, or 
fiscal year 2009, putting timely achievement of program goals at higher 
risk than would be the case otherwise. Reduced levels of funding for 
the Accelerated Simulation and Computing (ASC) program are eroding our 
capabilities to improve physics models in weapon simulation codes. Most 
tellingly, in fiscal year 2008 the Laboratory's spending power was 
reduced $280 million (compared to a $1.6 billion budget in fiscal year 
2007)--about $200 million more than anticipated. While our focus is on 
reducing support costs and preserving programmatic capabilities, it is 
noteworthy that the staff will decline from about 8,900 in October of 
2006 to under 7,000 FTEs by the end of fiscal year 2008. More than 500 
of these are highly-trained scientists and engineers.
    In a constrained budget environment, it is important to preserve 
critically needed capabilities and to stay focused on the long-term 
objectives: an affordable nuclear weapons complex supporting a smaller 
nuclear deterrent force sustained by a nuclear weapons program that 
provides confidence in the stockpile. Many details about the end state 
will have to be worked out--and depend on future nuclear weapon policy 
choices and world events--but it is clear that expertise, skills, and 
capabilities currently embodied in the NNSA national laboratories will 
be needed in the long term and can serve as useful technical resources 
to help define the path forward. In broad terms, a prudent path forward 
that would sustain science-based stockpile stewardship capabilities 
would be to:
  --Consolidate selected capabilities and facilities such as those for 
        special nuclear materials to reduce costs, while preserving 
        intellectual independence of key capabilities that are 
        necessary for technical peer review. Fully capable, independent 
        peer review is critical when nuclear testing is not available.
  --Sustain investments in capabilities at the NNSA laboratories that 
        are both critical to the long-term success of stockpile 
        stewardship and because of their technical leadership, provide 
        a basis for expanding work for other Federal agencies and 
        addressing important national priorities (e.g., at Livermore, 
        NIF and ASC).
  --Apply the capabilities at the NNSA laboratories to: continuing to 
        improve their understanding of weapons physics issues to reduce 
        uncertainties in weapon performance; managing issues that arise 
        in stockpiled weapons; and working with the NNSA production 
        plants and Department of Defense to devise an optimal path 
        forward for a certifiably safe, secure, and reliable stockpile 
        at affordable costs.
  --Work to reduce overhead costs at the NNSA laboratories and expand 
        work for other Federal agencies in a way that supports and 
        augments NNSA's investments in the laboratories.
    This approach, which is fully consistent with NNSA's long-term 
objectives for complex transformation, provides an additional valuable 
service to the Nation. It secures a long-term role for the weapons 
laboratories as crown jewels of large-scale science supporting our 
Nation's defense, energy, environmental, and economic security. These 
laboratories are the largest multidisciplinary concentration of PhDs in 
the country--there are no other institutions like them. As a result of 
this investment in the scientific and technical infrastructure by DOE 
and this committee, the laboratories provide value to the country well 
beyond nuclear weapons work--in areas that are the defining problems of 
this century. And we can do even more.
         new stockpile stewardship tools and their application
    One of the greatest accomplishments of the Stockpile Stewardship 
Program to date is our tremendous progress in acquiring new tools and 
using them to better understand weapons performance. When nuclear 
testing was halted, there were significant gaps in our knowledge. Some 
nuclear test results remained unexplained and for some processes in the 
detonation of a nuclear device, our simulation codes were simply not 
adequate. Either the computers were not large and fast enough or we did 
not understand the physics--or both. For those processes, we depended 
on nuclear test data to adjust the codes.
    A key focus of stockpile stewardship has been to fill the gaps in 
our knowledge to reduce our uncertainties about nuclear weapons safety, 
security, and performance as the stockpile ages. There are four major 
areas of investment in improved capabilities: more powerful computers, 
enhanced hydrodynamic testing capabilities to experimentally study the 
performance of (mock) primaries prior to nuclear explosion, an 
experimental facility to study the high-energy-density and 
thermonuclear processes in weapons (the National Ignition Facility), 
and tools to better understand the properties of plutonium. With these 
tools, we are striving to develop a better understanding of the 
physics, improve our simulation models, and use non-nuclear experiments 
and past nuclear test data to validate those model improvements. To 
date, some of the unknowns about nuclear weapons performance have been 
resolved, others we are close to resolving, and still others will 
require more time and effort. Greater knowledge increases the 
likelihood that we can resolve with confidence a problem that arises in 
stockpiled weapons without having to resort to a nuclear test.
Advanced Simulation and Computing (ASC)
    The ASC program continues to be a remarkable success. The goal set 
when the Stockpile Stewardship Program began was a million-fold 
increase in computing power in a decade. It was estimated at the time 
that a computer capable of 100 trillion floating point operations per 
second (100 teraflops) would provide a minimum level capability to 
model the full performance of a nuclear weapon in three dimensions with 
sufficient resolution to illuminate the physics issues where we need to 
make significant improvement. The goal was attained with the delivery 
to Livermore from IBM of the 100-teraflop ASC Purple supercomputer, 
with over 12,000 processors and 2 million gigabytes of storage.
    In April 2006, the NNSA laboratories began using ASC Purple for 
classified production runs. Soon after the machine began operating, a 
joint team of scientists from Livermore and Los Alamos performed a 
series of weapon simulations at unprecedented resolution using the most 
advanced ASC simulation software. The results gave dramatic new 
insights into weapons physics by pointing to phenomena not seen at 
lower resolution.
    ASC Purple is now running a series of 6 month campaigns as a 
national user facility--managed in a manner similar to a unique, large 
experimental facility. Each of the NNSA laboratories propose computing 
work packages to be run as campaigns. These packages, which need ASC 
Purple's size and capability, aim at achieving major stockpile-
stewardship milestones. The proposals are reviewed and prioritized for 
relevance, importance, and technical rationale; and machine time is 
allocated accordingly. ASC Purple is the first ASC system to be managed 
in this way.
    A remarkable feature of the ASC program is its strong partnerships 
with the U.S. computer industry and major research universities to 
accelerate the development of supercomputer platforms, storage and 
operating systems, and software capable of running efficiently on 
machines with tens to hundreds of thousands of processors. An example 
of this is Livermore's partnership with IBM to develop and bring into 
operation BlueGene/L, the world's fastest computer. With its system-on-
a-chip technology, BlueGene/L is a world apart from its predecessors. 
Compared with the previous record holder, it was 8 times faster and 
one-fourth the cost, and it required one-tenth the floor space and one-
sixth the power consumption. In 2007, the machine was expanded from 
131,000 to 208,000 processors and now benchmarks at 478 teraflops (with 
a peak speed of 596 teraflops).
    BlueGene/L was acquired through the ASC program as a computational 
research machine for evaluating advanced architectures to help define 
an affordable path to petaflop computing (quadrillion operations per 
second). It has been remarkably successful, efficiently running 
simulation codes capable of addressing a broader range of weapons 
issues than originally envisioned. For 3 years running, simulations 
performed by researchers using BlueGene/L won the prestigious Gordon 
Bell Prize, which is awarded to innovators who advance high-performance 
computing.
    It is vital that the laboratories build on the ASC program's 
outstanding successes and sustain the momentum toward petaflop 
computing and beyond by staying on schedule for the next planned ASC 
investments, the Roadrunner machine for Los Alamos and the Sequoia 
machine for Livermore, and continuing to maintain and develop the 
extraordinary simulations code systems. These next two machines take 
different approaches to the integrated problem of the computer 
architecture and simulations that must run on them. Sequoia is an 
extension of the successful BlueGene/L approach while Roadrunner takes 
a different approach. Both entail risks. The continuing advances in 
simulation required to resolve the remaining weapons performance issues 
are too important to pursue only one approach. One needs to succeed and 
hopefully both will. The generation of machines beyond them can combine 
the two different approaches.
    Through the highly successful ASC program, we are turning 
simulation into a tool of predictive science--a full partner with 
theory and experiments. In particular, we are making key discoveries 
about physical processes in the functioning of a nuclear weapon that 
help us to improve models in codes and reduce sources of uncertainty in 
weapon performance. The more powerful Roadrunner and Sequoia computers 
are essential for implementing better physics models and as discussed 
below, the methodology we have been developing to quantify 
uncertainties in weapon assessments and certification. It is critically 
important to sustain the investments that have led to such remarkable 
successes in the ASC program.
Hydrodynamic Testing
    Hydrodynamics testing is the most valuable experimental tool we 
have for diagnosing device performance issues for primaries in weapons 
before they enter the nuclear phase of operation. Hydrodynamics 
experiments are conducted at Livermore's Contained Firing Facility 
(CFF) at Site 300, our remote testing location, and the newly 
commissioned Dual-Axis Radiographic Hydrodynamic Test Facility (DARHT) 
at Los Alamos. Experiments are executed in accordance with a National 
Hydrotest Program, which NNSA coordinates with the laboratories. The 
plans include both Integrated Weapons Experiments--large-scale tests of 
mock weapon primaries--and smaller-scale focused experiments, performed 
to study specific physics or engineering issues. Over the last 3 years, 
Livermore researchers performed nearly 20 Integrated Weapons 
Experiments at CFF for both Livermore and Los Alamos. The Laboratory 
has also conducted a long series of Focused Experiments to study 
radiation case dynamics after high-explosive detonation. Important 
information was learned from these experiments that led to major 
improvements to weapons code physics and new insights into nuclear 
weapons performance.
    In the NNSA's preferred alternative for complex transformation, 
long-term plans call for closure of CFF when its use for hydrodynamic 
testing is no longer programmatically necessary and reduced NNSA 
support for Site 300. As these changes occur, Livermore scientists and 
engineers will carry out aspects of their important hydrodynamic 
experiments at other sites. It is critically important that sufficient 
funding be made available to fully utilize the new capabilities 
available at DARHT.
The National Ignition Facility (NIF)
    NIF is critical to the success of the Stockpile Stewardship 
Program. It is the only facility capable of creating in a laboratory 
the conditions necessary to experimentally access all of the nuclear 
phase operations important to modern nuclear weapons. A wide range of 
precisely diagnosed experiments can be fielded at NIF. These 
experiments offer the promise of uncovering important physics details 
about the functioning of a nuclear weapon that were inaccessible or not 
examined in underground nuclear tests. NNSA scientists will gather 
necessary data to improve and validate physics models in simulation 
codes. Ignition experiments at NIF are critical to understanding fusion 
burn, a key phenomena in the performance of weapons in the stockpile. 
The design and execution of complex NIF experiments will also test the 
expertise of NNSA scientists and sustain their critical skills and 
knowledge about nuclear design.
    Major progress continues to be made on NIF and preparations for 
fusion ignition experiments with the 192-beam laser. As has been the 
case since being rebaselined in 2000, the NIF project is meeting all of 
its technical performance, cost, and schedule milestones. Current plans 
are to complete the construction project and laser commissioning in 
March 2009, and begin the first ignition experiments in fiscal year 
2010. In July 2007, Laboratory scientists, engineers, and technicians 
commissioned the first of two 96-beam laser bays, assuring that each 
beam met NIF's operational and performance qualification requirements. 
In early 2008, all 192 main laser beams were precisely aligned. As of 
the end of March 2008, testing has been completed on 144 of the 192 
beams, and installation has begun of the final optical modules that 
convert the laser light from infrared to ultraviolet. More than 3.1 
megajoules of infrared-light energy have been fired, making NIF by far 
the world's most energetic laser. The extraordinary laser energy (more 
than 1.8 megajoules of energy in ultraviolet light), the remarkable 
beam quality, and the ability to shape the pulse to meet the specific 
needs of experiments provide NIF unique and unprecedented experimental 
capabilities.
    The National Ignition Campaign (NIC), which is being managed for 
NNSA by our Laboratory, involves multiple laboratories and encompasses 
all work needed to carry out the initial ignition experiments in 2010 
and continuing research the following years. Currently, the main thrust 
of NIC is to prepare for experiments in 2009 to validate the ignition 
target's design. Using 96 beams, these experiments will help select the 
optimum radiation temperature conditions for the ignition experiments. 
Computer simulations, which have been validated by their close match 
with data gathered from the 4-beam NIF Early Light experiments 
conducted in 2003-2004, indicate that NIF's laser beams will propagate 
effectively through the hot plasma generated in fusion experiments to 
achieve ignition.
    NIC is following a well-defined technical path toward ignition on 
NIF and the transition of NIF to routine operations in 2012 as a highly 
flexible high-energy-density user facility for research for stockpile 
stewardship as well as energy security and the basic science of matter 
at extreme conditions. However, NIC did not receive the funding 
requested by NNSA in fiscal year 2007 and fiscal year 2008, putting 
timely achievement of program goals at higher risk than would be the 
case otherwise. We remain confident that ignition will be achieved soon 
after the experimental program begins in 2010. We have larger concerns 
about a shortfall in the future funding needed to sustain the 
experimental effort and achieve the full benefits of NIF's unique 
capabilities. NIF is the only source of the data about the ``nuclear 
phase'' of operation that are necessary for the long-term success of 
stockpile stewardship.
    A number of key uncertainties about nuclear weapons physics relate 
to weapons performance near the time the device ``goes nuclear'' and 
thereafter. The process of boosting the fission yield of primaries, in 
particular, is key to weapons performance and is not well understood. 
NNSA has launched a science campaign to investigate the physics of 
boost and improve the modeling of it in simulations with the goal of 
reducing uncertainties in weapon performance. Data and insights from 
NIF experiments are required to develop and validate the models. 
Ignition and thermonuclear burn is another area where NIF experiments 
will enable scientists to better understand the underlying physics and 
reduce weapon performance uncertainties.
    In addition, NIF experiments will provide critically needed 
equation-of-state, opacity, and material dynamics data to improve and 
validate weapon simulation models. NIF is unique in its capabilities 
for these types of experiments because of its ability to produce very 
high temperatures in a sufficiently large volume for a sufficiently 
long period of time and because of its excellent diagnostics. These 
same attributes make possible scaled experiments of hydrodynamic and 
radiation transport phenomena, with results that can be directly 
compared to simulation model predictions of nuclear-phase weapon 
performance. As it nears completion, it is extremely important that the 
NIF project be fully funded so that it can be completed on time and 
that NIF be fully utilized to demonstrate ignition and resolve the 
weapons physics issues critical to continuing to certify the stockpile 
without nuclear testing. At this point in the project, there is little 
flexibility to accommodate funding shortfalls without impact on 
completion.
Plutonium Research Capabilities and Facilities
    Plutonium is an extremely complex material and understanding its 
detailed properties is a major scientific challenge. Completed in 2006, 
a concerted long-term study by Livermore and Los Alamos researchers 
concluded that the performance of plutonium pits in U.S. nuclear 
weapons will not sharply decline due to aging effects over decades. 
Because plutonium is highly radioactive, over time it damages materials 
in weapons including the pits themselves. However, the study concluded 
that the plutonium pits for most, but not all, nuclear weapons have 
minimum lifetimes of at least 85 years. These results have important 
implications in planning for the weapons production complex of the 
future.
    Still, there is much we do not know about the material and its 
properties at extreme conditions, which is important for weapon 
performance. In 2007, Livermore researchers met an important stockpile 
stewardship milestone by completing the development of a new 
description of plutonium under a variety of physical conditions--an 
``equation of state.'' This equation of state is based on advanced 
theory and simulation, including simulations only now possible with the 
ASC Purple and BlueGene/L supercomputers, together with very accurate 
data from diamond-anvil-cell measurements at high static pressures and 
dynamic experiments using the Joint Actinide Shock Physics Experimental 
Research (JASPER) gas gun at the Nevada Test Site. Work with this 
equation of state tells us that the technical research into this 
complex material must continue if we are to meet all the needs of the 
stewardship program.
    Large-scale work with plutonium at Livermore's plutonium facility 
(Superblock), which has provided vital support to the Stockpile 
Stewardship Program, will be phased out. NNSA's plans for complex 
transformation include the consolidation of weapons-useable special 
nuclear materials to fewer sites. All Category I/II quantities of 
special nuclear materials are to be removed from Livermore by the end 
of 2012--2 years earlier than planned when the first shipment of 
plutonium left the Laboratory for Los Alamos in late 2006. Since then, 
two more shipments of material have been made to the Savannah River 
Site in South Carolina, where surplus nuclear materials are being 
consolidated.
    Livermore researchers will continue research and development 
activities to better understand plutonium, improve plutonium part 
manufacturing processes, and provide surveillance of stockpiled 
weapons. Our plutonium research breakthroughs have proved important 
over the years, and the two-laboratory approach is a vital part of 
effective peer review processes. Category III amounts of nuclear 
materials will remain on the Livermore site for small-scale 
experiments. For other activities, Laboratory scientists and engineers 
will begin using facilities elsewhere to conduct their work. To this 
end, modern plutonium-capable facilities are necessary for stockpile 
stewardship and sustaining the Nation's nuclear stockpile. It is 
essential that the Nation proceed with the Chemistry and Metallurgy 
Research (CMR) Building Replacement Project at Los Alamos.
                  managing the health of the stockpile
    Lawrence Livermore is responsible for the nuclear explosive 
packages in five nuclear weapons systems--four that were designed by 
Livermore: the W62 ICBM warhead, the W84 cruise missile warhead 
(inactive), the B83 strategic bomb, and the W87 ICBM warhead; and one 
designed by Los Alamos: the W80 cruise missile warhead. The Laboratory 
monitors the health of the weapons for which it is responsible, 
conducts stockpile stewardship activities to better understand aging 
effects on weapons materials and components, develops advanced 
technologies for weapon surveillance, evaluates issues as they arise in 
stockpiled weapons, and pursues programs to extend the stockpile life 
of weapons. In addition, Livermore scientists and engineers develop 
advanced technologies for weapons surveillance and manufacture of 
weapons parts, and the Laboratory participated in the Reliable 
Replacement Warhead Feasibility Study.
    Livermore also assists others in the nuclear weapons complex on 
production issues. Laboratory engineers are working closely with the 
Pantex and Y-12 Throughput Improvement Project teams to improve plant 
efficiencies, expedite completion of joint projects, and introduce new 
capabilities. In addition, Livermore helped with the resumption of 
weapon pit manufacturing at Los Alamos, where a team succeeded in 
fabricating and certifying new pits for the W88 submarine-launched 
ballistic missile warheads. The Laboratory supplied radiographic 
inspection capabilities, produced small-scale plutonium samples for 
testing, and provided engineering evaluations and peer reviews based on 
a wide range of independently conducted experiments and simulations.
Comprehensive Peer Review and Advanced Certification
    Livermore is a key participant in formal review processes and 
assessments of weapon safety, security, and reliability. As part of the 
Annual Stockpile Assessment Process, Lawrence Livermore and Sandia 
prepare Annual Assessment Reports for each of the nuclear weapons 
systems for which the two laboratories are jointly responsible. As 
input to the reports, Laboratory scientists and engineers collect, 
review, and integrate all available information about each weapon 
system, including physics, engineering, chemistry, and materials 
science data. These Annual Assessments use the advanced tools developed 
by the stockpile stewardship program--such as ASC, DARHT, and soon 
NIF--as an integral part of the assessments. This work is subjected to 
rigorous, in-depth intralaboratory review and to expert external 
review, including formal use of red teams.
    With the aging of U.S. nuclear weapons, risks are growing that 
reliability issues will arise, and modifications to extend the 
stockpile lifetime of weapons are likely to become more complex and 
challenging to certify. In recognition of these issues, the JASON 
Defense Advisory Group recommended to NNSA that the weapon 
certification process be improved through expanded peer review 
mechanisms and refinement of the computational tools and methods for 
certification. To address these recommendations, NNSA was directed by 
Congress to implement a new Science Campaign called Advanced 
Certification to significantly increase the scientific rigor of 
certifying the Nation's nuclear deterrent. The campaign is focused on 
expanding and applying the Stockpile Stewardship Program methodology 
called the quantification of margins and uncertainties (QMU). By 
enhancing the scientific rigor and transparency of QMU, the Advanced 
Certification Science Campaign will improve the quality of the 
assessments and enable better peer review by external panels of 
experts. These efforts will expand the applicability and validity of 
the process, initially developed for the existing stockpile, to complex 
Life Extension Programs and reuse of previously produced components 
such as pits, and they will answer questions raised by the JASONs in 
their consideration of the Reliable Replacement Warhead.
    In conjunction with the Annual Assessment process, the laboratories 
have recommended that a more Comprehensive Peer Review process be 
implemented. In this process, responsibility for assessing a nuclear 
package in a weapon system will remain with the current responsible 
design laboratory. However, surveillance and underground test data for 
all stockpile systems will be accessible to both design laboratories, 
and each laboratory will annually carry out comprehensive independent 
analyses of all stockpile systems, thereby enabling in-depth, intensive 
laboratory technical peer review. This effort will provide the 
responsible laboratory and NNSA with more comprehensive evaluations of 
the stockpile and more efficiently apply complex-wide resources to 
address time urgent stockpile issues, such as significant finding 
investigation (SFI) resolution. I believe that adding the Comprehensive 
Peer Review process is the single most important action to take to 
improve confidence in the nuclear deterrent in the absence of nuclear 
testing.
Life-Extension Programs (LEPs)
    The LEP that refurbished the W87 ICBM warhead was a successful 
example of stockpile stewardship. Congress authorized the W87 LEP in 
1994, the first rebuilt W87 was delivered back to the Department of 
Defense (DOD) on schedule in 1999, and Lawrence Livermore and Sandia 
completed formal certification in 2001. NNSA and DOD established an 
extensive technical review process to certify the design changes and 
production procedures. The process entailed thorough internal reviews 
at Livermore, technical reviews by NNSA (including peer review by Los 
Alamos), and reviews by DOD. Throughout the program, the Laboratory 
collaborated with the production plants, working to ensure the quality 
of the W87 refurbishment work.
    Subsequent LEPs are proving to be challenging, and future ones can 
be expected to be even more difficult because there are going to be 
more things that need to be fixed--that happens with age. Nuclear 
weapons include a variety of reactive and organic materials sealed in 
close proximity in a hostile radiation environment. In some weapon 
systems, we are beginning to see aging signs that concern us. Cold-War-
era weapons were designed to meet stringent military characteristics 
(MCs). The limits of what was possible were often pushed in the design 
of currently-deployed weapons. Ease of manufacture or long shelf-life 
were lower design priorities. Exotic and/or environmentally unfriendly 
materials are used in a number of instances to improve performance, and 
manufacture of the weapons entailed numerous steps that are difficult 
to exactly reproduce. Furthermore, while there is a basis for high 
confidence in the performance of the stockpiled weapons as they were 
produced, some designs do not have large performance margins, which 
makes their performance less resilient to change. These factors 
increase the difficulty of certification of any modifications in 
refurbishments and the expense of rebuilding the weapons.
Reliable Replacement Warhead Feasibility
    After authorization by Congress, the Nuclear Weapons Council 
launched the Reliable Replacement Warhead (RRW) Feasibility Study in 
2005. The goal of the RRW is to replace existing aging warhead systems 
with designs that more closely meet the requirements of the post-cold 
war era. The RRW would include advanced safety and security 
technologies, and it would be designed to have much larger performance 
margins than the system being replaced. Large performance margins make 
it easier to certify reliable performance without underground nuclear 
testing. These designs would be based on devices that were well tested 
previously, further obviating the need for nuclear testing. They would 
be manufactured from materials that are more readily available and more 
environmentally benign that those used in current designs. The 
objective is for these modified warheads to be much less costly to 
manufacture by a smaller, modernized production complex. The RRW is to 
maintain the current military capability--not to improve it.
    In early 2007, NNSA announced its decision that Livermore and 
Sandia national laboratories would provide design leadership for the 
RRW for the U.S. Navy. After the decision, NNSA and the Navy began work 
to further define and develop detailed cost estimates for the RRW 
program. This work was intended to support a future decision to seek 
congressional authorization and funding in order to proceed into system 
development and potentially subsequent production. The effort has since 
been halted. Seeking clarification on a number of related policy and 
technical issues, Congress stopped funding for RRW work in fiscal year 
2008. The Nation would benefit from a clearer view of the costs of RRWs 
versus programs to extend the life of existing warheads or a blending 
of the RRW and LEP approaches--together with the technical challenges 
and risks of the various options. Considerable technical work is needed 
to support an informed decision about the preferred options for the 
Nation's enduring nuclear deterrent and nuclear weapons complex. It is 
important that we expeditiously start to develop the needed 
information.
          support of defense nuclear nonproliferation programs
    Livermore engages in a wide range of activities for NNSA's Defense 
Nuclear Nonproliferation Program, whose important mission is to address 
the threat that hostile nations or terrorist groups may acquire 
weapons-useable material, equipment or technology, or weapons of mass 
destruction (WMD) capabilities. We contribute to almost all program 
areas because the Laboratory takes an integrated, end-to-end approach 
to its WMD nonproliferation work--from preventing proliferation at its 
sources, to detecting proliferant activities and identifying ways to 
counter those efforts, to responding to the threatened or actual use of 
WMD.
    Another feature of the Laboratory's work is that we work closely 
with end-users of our technologies and systems so that our research and 
development efforts are informed by real-world operational needs. 
Livermore, in fact, supports several sponsors with unique operational 
capabilities. For Defense Nuclear Nonproliferation these include the 
National Atmospheric Release Advisory Center (NARAC), the Nuclear 
Incident Response Program, and the Forensic Science Center, which 
supports multiple sponsors. NARAC is the source of technical 
capabilities that also support the Department of Homeland Security's 
(DHS's) Interagency Modeling and Atmospheric Assessment Center. As a 
result of our special capabilities, the Laboratory is also responsible 
for DHS's Biodefense Knowledge Center and DOD's Counterproliferation 
Analysis and Planning System and the Homeland Defense Operational 
Planning System. The uniqueness of Livermore's capabilities is borne 
out by the fact that we are one of only 12 world-wide laboratories, and 
currently the only one in the United States, certified to analyze 
samples pertaining to the Chemical Weapons Convention and the only 
certified forensics laboratory able to receive all types of forensics 
evidence--nuclear, biological, explosive, and hazardous chemicals.
    Selected examples of the Laboratory's activities in support of 
Defense Nuclear Nonproliferation include:
  --In support of the Global Threat Reduction Initiative, Livermore is 
        leading the effort to secure more than 1,000 radioisotopic 
        thermonuclear generators deployed across Russia. Installed in 
        the 1970s as remote power sources, these devices are highly 
        radioactive and largely unsecured, thus posing proliferation 
        and terrorism risks.
  --In support of the Material Protection Control and Accounting 
        (MPC&A) program, Livermore completed MPC&A upgrades for the 
        last two Russian navy sites in the Kamchatka region in 2007. 
        The Laboratory also leads the Federal Information System effort 
        to establish a comprehensive national nuclear material 
        accounting system for Russia.
  --In a significant breakthrough to strengthen international nuclear 
        safeguards, a team of researchers from Lawrence Livermore and 
        Sandia recently demonstrated that the operational status and 
        thermal power of reactors can be precisely monitored over hour- 
        to month-timescales using a cubic-meter-size antineutrino 
        detector. The detectors could be used to ensure that nuclear 
        fuel in civilian power reactors is not diverted for weapons 
        purposes.
  --In support of efforts to monitor for underground nuclear 
        explosions, Livermore develops tools and methodologies for 
        detecting seismic events in regions of proliferation concern. 
        In 2007, Laboratory scientists produced regional seismic 
        calibrations for the Persian Gulf and surrounding regions, and 
        they developed improved methods for distinguishing the waveform 
        for earthquakes and nuclear explosions in North Korea.
  --The Laboratory works on a variety of advanced detection 
        capabilities. One example is major success in 2007 in 
        developing a passive technique to detect shielded highly-
        enriched uranium, an important breakthrough for homeland 
        protection.
    All of these capabilities are built upon the science and technology 
infrastructure required to meet our nuclear weapons responsibilities.
                            summary remarks
    On October 1, 2007, a newly formed public-private partnership, 
Lawrence Livermore National Security, LLC (LLNS), began its contract 
with the Department of Energy to manage and operate the Laboratory. 
LLNS is honored to take on the responsibility. We see a future with 
great opportunities to apply our exceptional science and technology to 
important national problems. To this end, we have identified four top-
level goals.
    First, we will work with NNSA to provide leadership in transforming 
the Nation's nuclear weapons complex and stockpile to meet 21st-century 
national security needs. As in NNSA's preferred alternative for complex 
transformation, we envision Livermore as a center of excellence for 
nuclear design with centers of excellence for supercomputing with 
petascale machines, high-energy-density physics with the National 
Ignition Facility (NIF), and energetic materials research and 
development with the High Explosives Applications Facility (HEAF). We 
are vigorously supporting the goal of consolidation and working toward 
eliminating Category I/II quantities of special nuclear material from 
the site by 2012.
    Second, we will carry forward Livermore's tradition of exceptional 
science and technology that anticipates, innovates, and delivers. This 
is the science and technology that brought into operation currently the 
world's most powerful computer and used it the last 3 years in a row to 
win the Gordon Bell Prize with amazing scientific simulations; that is 
finishing commissioning of NIF and preparing for experiments to achieve 
the power of the sun in a laboratory setting for national security, 
long-term energy security, and scientific exploration; that is 
developing advanced radiation detection systems as well as analysis-on-
a-chip technologies and DNA signatures for rapid detection of pathogens 
for health and security applications; and that has provided critical 
technical support since 1990 to the Intergovernmental Panel on Climate 
Change, which was a co-winner of the Nobel Peace Prize in 2007 for its 
work.
    Third, we will aggressively make available the core scientific and 
technical capabilities of the Laboratory to meet pressing national 
needs in areas that build on and contribute to the core missions and 
strengths of the Laboratory. As I highlighted in this testimony, the 
Nation and the world face many complex challenges in the 21st century 
that require the exceptional science and technology and sustained 
multidisciplinary efforts that the Laboratory can offer.
    Four, we will enhance business and operational performance, paying 
particular attention to safe and secure operations and improving our 
operational efficiency and cost effectiveness. Public trust in our 
Laboratory depends on meeting mission goals through safe, secure, 
disciplined, and cost-efficient operations.
    LLNS' start as managing contractor at the beginning of fiscal year 
2008 coincided with the reduction of $280 million in spending power at 
the Laboratory. We have been working to dramatically reduce support 
costs and the staff will decline from about 8,900 in October 2006 to 
under 7,000 FTEs by the end of fiscal year 2008. More than 500 of these 
are highly-trained scientists and engineers. The change is painful, but 
it is my responsibility to ``right size'' the Laboratory to budget 
realities.
    It is the Nation's responsibility to ``right size'' the NNSA 
laboratories to their important, continuing missions and their broader 
responsibility to ``think ahead'' and pursue multidisciplinary science 
and technology in anticipation of emerging national needs. I urge your 
continuing support for a strong Stockpile Stewardship Program and for 
sustaining the NNSA laboratories' work on the science-based stockpile 
stewardship and NNSA nonproliferation programs as well as other 
activities to meet vital national needs.

    Senator Dorgan. Dr. Miller, thank you very much.
    Finally, Director Hunter, from Sandia.
STATEMENT OF DR. THOMAS O. HUNTER, PRESIDENT AND 
            DIRECTOR, SANDIA NATIONAL LABORATORY, 
            ALBUQUERQUE, NEW MEXICO
    Dr. Hunter. Thank you, Chairman Dorgan, and Senator 
Domenici, and Senator Feinstein. It's a pleasure to be before 
you today.
    I'm Tom Hunter, President of Sandia National Laboratories. 
And our principal mission, as you know, is to provide and 
support the non-nuclear subsystems for all of the nuclear 
weapons in the stockpile. We also support a wide range of 
research and development, in other areas of national security.
    I've presented written testimony, as you've noted, I'd like 
to summarize a few points, perhaps some of the same points the 
other directors mentioned, but I'll focus on them in a little 
different way, and then be glad to answer questions.
    Let me first talk about Stockpile Stewardship. In my view, 
Science-based Stockpile Stewardship has made exceptional 
progress since its inception, over a decade ago. The Nation 
asked us to stop testing, to stop development of new weapons 
systems, and to invest in key scientific and engineering 
capabilities that would allow the continued certification of 
the stockpile. We've done that.
    Along the way, we've been leaders in the development of 
many key areas of science, in particular, advanced modern 
super-computing, high-energy density physics, advanced 
microsystems, and many areas of material science.
    One of the areas I'm most proud of, to have been associated 
with, at our laboratory is the Mesa facility, which was 
mentioned earlier by Director D'Agostino, when he said that we 
have completed on-schedule, and ahead of budget. In that 
facility, we build the small, little devices that can be put in 
nuclear weapons and I usually like to say, there we build 
little things you can't see, that do things you can't imagine.
    Today I, Dr. Anastasio, and Dr. Miller--Mike and George--
continue to support the annual assessment of the safety and 
reliability of the stockpile. We independently provide a 
personal statement of the condition of each of the systems in 
our stockpile. I don't think I can describe in words how 
significantly we take that responsibility--it means a lot to us 
professionally and personally, we do it each year, and are in 
the process of doing it this year, as well.
    This annual assessment is a matter of both legislative 
requirement, and personal accountability. Behind it stands the 
investment of the Government, the work of many dedicated 
scientists and engineers, and our personal credibility and 
reputation, and that of our institutions. The stockpile needs, 
and will continue to need, attention. The stockpile will age. 
Issues will have to be resolved. As time progresses, we must 
maintain confidence that our deterrent is effective. As we move 
forward, it is essential to recognize the need for a vital, 
scientific foundation to support this confidence, and to make 
wise choices about the composition of the stockpile and the 
nuclear weapons complex that it supports.
    I believe it is important to continue the investigation of 
a replacement strategy for legacy, cold war era warheads. A 
right-size stockpile that is safer, more secure, has more 
inherent performance margins, and can be maintained more 
effectively, should be our mutual goal.
    The nuclear weapons complex must be transformed to be more 
effective. It must work better, operate more safely, be better 
integrated, and cost less. The NNSA's program for complex 
transformation is very important. We've already begun at our 
lab, we've already completed removal of all discrete category 
two and category three nuclear materials from our site. We've 
already achieved a reduction of 18 percent of our workforce 
since 2004, that supports nuclear weapons.
    We're working to change our work mix at our California 
site. We're re-looking at our approach to super-computing. All 
of these transitions must be managed effectively so that our 
ability to effectively support the stockpile is maintained. We 
must use the insight from our Stockpile Stewardship Program to 
chose which infrastructure investments are made, and decide 
when they will be made.
    The capabilities we have developed to support our nuclear 
tern have allowed us to make many, many contributions in other 
areas of national security--from combustion science for energy 
efficiency, to nuclear waste disposal, specialized radars for 
defense applications and many more. These applications provide 
great synergy and great vitality for our ability to support the 
stockpile. The nuclear weapons path forward is actually just 
one piece, though, of a much broader nuclear future for the 
country, and for the world.
    It is important to enhance our efforts in non-
proliferation, and help realize the full potential of nuclear 
power as a safe, and environmentally friendly source of energy. 
The budget legislation you see before you will allow that to be 
addressed.
    Finally, I think I'd be remiss if I did not note that few 
threats to this country's future loom as large as our chronic 
lack of investment in science and engineering, and the 
education systems that support it. History will not judge our 
generation very favorably if we do not speak out, if we do not 
act, to significantly change our lack of attention and lack of 
investment in one of the clear elements that made this country 
great.

                           PREPARED STATEMENT

    You have the full commitment of my--my personal commitment, 
and that of my organization--to support you in addressing these 
important problems in the future, and I'll be glad to address 
any questions.
    [The statement follows:]
               Prepared Statement of Dr. Thomas O. Hunter
    Mr. Chairman and distinguished members of the subcommittee, thank 
you for the opportunity to testify. I am Tom Hunter, president and 
director of Sandia National Laboratories. Sandia is a multiprogram 
national security laboratory owned by the United States Government and 
operated by Sandia Corporation \1\ for the National Nuclear Security 
Administration (NNSA).
---------------------------------------------------------------------------
    \1\ Sandia Corporation is a subsidiary of the Lockheed Martin 
Corporation under Department of Energy prime contract no. DE-AC04-
94AL85000.
---------------------------------------------------------------------------
    Sandia's core role in the Nation's nuclear weapon program is the 
design, development, qualification, and certification of non-nuclear 
subsystems of nuclear warheads. As a multiprogram national security 
laboratory, Sandia also conducts research and development in nuclear 
nonproliferation, energy security, intelligence, defense, and homeland 
security.
    My statement today addresses the appropriation request for the 
Department of Energy (DOE) programs that fund activities at DOE 
national laboratories and specifically at Sandia National Laboratories. 
I will discuss the stockpile stewardship program and the laboratory 
capabilities at Sandia that are essential to sustain it. I will suggest 
how the NNSA laboratories can help respond to the challenges of the 
emerging global nuclear future, including nonproliferation issues. I 
will comment on programs in energy security and for the Office of 
Science. Finally, I will also bring to your attention my concern that a 
larger role for these laboratories in a broader national security 
context will be important, so that the best solutions for critical 
national needs may be achieved. My written statement includes an 
addendum of specific issues of concern that I offer for the attention 
of the subcommittee.
                       the u.s. nuclear deterrent
    The U.S. nuclear deterrent remains an essential element of the 
Nation's security. Sandia serves NNSA's long-standing mission to 
maintain and enhance the safety, security, and reliability of the U.S. 
nuclear deterrent.
Development of Stockpile Stewardship in the Post-Cold War Era
    The end of the cold war was a pivotal moment in the history of the 
U.S. nuclear weapon program. By 1992, all in-progress and planned 
nuclear weapon programs for new systems were either canceled or 
suspended, and arms reduction initiatives signaled a smaller nuclear 
weapon program in years to come. Also in that year, the United States 
committed itself to a moratorium on nuclear testing, which had been 
fundamental to the nuclear weapon development program since its 
inception.
    It was clear that a different framework for maintaining the 
stockpile would be required. The Department of Energy implemented a new 
approach called ``science-based stockpile stewardship'' and invested in 
a comprehensive suite of capabilities and programs, which included 
experimental facilities and high-performance computers. By 2002, the 
NNSA Administrator and laboratory directors were able to report to 
Congress that science-based stockpile stewardship was meeting 
expectations.\2\
---------------------------------------------------------------------------
    \2\ House Armed Services Committee, Subcommittee on Military 
Procurement, Hearing on the Safety, Security, Reliability and 
Performance of the Nuclear Stockpile, 107th Cong., 2nd sess., June 12, 
2002.
---------------------------------------------------------------------------
    Today, ``science-based'' stockpile stewardship could be considered 
a redundant phrase. Stockpile stewardship assumes and requires the 
scientific competencies and resources that have been developed over the 
last decade.
    Since 1996 the stockpile stewardship program has performed 12 
successful annual assessments of the safety and reliability of each 
weapon type in the stockpile. The assessments include peer reviews and 
red team challenges, and they provide the basis for each of the 
laboratory directors' annual reports to the Secretaries of Energy and 
Defense as well as the Secretaries' subsequent annual report to the 
President on the condition of the stockpile. As I have reported in my 
recent assessments, numerous aging issues in nuclear weapon components 
have been discovered; to date, we have been able to provide sufficient 
confidence in the safety and reliability of our stockpile to support 
national policy requirements.
    The advanced facilities and capabilities developed in the stockpile 
stewardship program enable our successful execution of the life 
extension program for the W76 warhead. In May 2007 Sandia completed the 
design--and NNSA's Kansas City Plant initiated production of--the new 
integrated arming, fuzing, and firing subsystem for this warhead. The 
radar fuze development costs were approximately 30 percent of the cost 
of the fuze we designed and produced for the W88 warhead in the late 
1980s, while meeting similar requirements for survivability in the 
severe radiation environments of a nuclear detonation.
    Sandia's Microsystems and Engineering Sciences Applications (MESA) 
facility was essential for the design, qualification, and fabrication 
of the radiation-hardened integrated circuits used in the W76 arming, 
fuzing, and firing subsystem. Advanced computational and physical 
simulation tools were used extensively in the design and qualification 
of key components, which will enable us to confidently place this life-
extended warhead in the stockpile without underground nuclear testing.
    In today's stockpile stewardship program, radiation tests using 
aboveground simulators provide adequate radiation effects testing for 
most spectra of concern to Sandia. We take the parameters derived from 
such tests and incorporate them into computational models that 
calculate system performance over a broader and more intense range of 
conditions. This achievement is possible using the capabilities and 
tools developed in the stockpile stewardship program.
    In my view, the stockpile stewardship program today has advanced to 
the point where the preferred approach would be to rely on numerical 
simulation and test facilities for certification of non-nuclear 
subsystems in the stockpile. This approach will, however, include some 
risk. We must maintain facilities, qualified people, and modeling and 
simulation capabilities that allow us to assess with confidence. We 
will continue to be concerned with certain issues in the stockpile for 
the indefinite future. However, I am confident that we will be able to 
perform our assessment and design responsibilities successfully if the 
national investment in a robust stockpile stewardship program is 
sustained in years ahead.
The Stockpile Today and Future
    The Nation's nuclear weapon policy has changed significantly since 
the end of the cold war. The stockpile is smaller in total numbers and 
comprises fewer weapon types. It is natural that nuclear weapon policy 
in the post-cold war era should undergo revision to address the threats 
of the 21st century. I understand and support the need for stockpile 
transition.
    But the fact is, the legacy stockpile is composed of weapons 
tailored for the threats and strategies of the cold war. Whether the 
designs of the legacy stockpile are appropriate for the 21st century, 
and can be maintained indefinitely, is problematic. It is important 
that Congress and the Executive agree on how the nuclear deterrent 
should be sized and shaped for the future and what role it should play 
in the larger context of national security. We need to establish the 
path forward for the deterrent, recognizing the reality of a changed 
global situation and fiscal constraints. We need a commitment to a 
robust stockpile stewardship program and an infrastructure 
appropriately configured to support it.
    In looking at future options for the stockpile, I believe it is 
important to continue to investigate a replacement strategy for legacy 
cold war era warheads. Aging issues in the stockpile will require a 
measure of stockpile refurbishment as long as those systems remain in 
stockpile. In the long term, a revived Reliable Replacement Warhead 
(RRW) program would offer advantages for ease of manufacture, 
maintenance, and assessment, and especially enhanced safety and 
security. I support the NNSA's request to fund the RRW Program so that 
the laboratories can complete their feasibility studies, including cost 
estimates.
    Simply put, the current stockpile will require continued 
maintenance and a laboratory/production complex configured around the 
past, with all its cost, complexity, and inherent risk. We must balance 
modernizing the stockpile with providing assurance to the world that we 
stand for an enhanced nonproliferation regime. The desired result would 
be a right-sized stockpile that maintains a balanced deterrent but is 
smaller, safer, more secure, and can be maintained more effectively.
Complex Transformation
    In January NNSA released its draft Supplemental Programmatic 
Environmental Impact Statement (SPEIS) for transforming the nuclear 
weapon complex. Complex Transformation is a vision for a smaller, 
safer, more secure, and less expensive nuclear weapon complex. The 
SPEIS outlines a Preferred Alternative utilizing distributed centers of 
excellence, and it would consolidate missions and facilities within the 
existing NNSA sites.
    Under the Preferred Alternative, Sandia would continue to be the 
center of excellence for science and engineering for warhead non-
nuclear systems and components and for major non-nuclear environmental 
testing. Sandia would also cease operations at the Tonopah Test Range 
and would have a different role in NNSA's high-performance computing 
program. Sandia's California laboratory would continue to support the 
Lawrence Livermore National Laboratory with non-nuclear systems 
engineering, but would transition to a multi-agency resource. We are 
developing a plan to guide that transition.
    We have long supported and see great benefit in the Preferred 
Alternative's proposal to consolidate Category I and II special nuclear 
materials (SNM). We are so committed to that concept, and to the 
improvements in security posture and the complex-wide cost savings 
associated with it, that we recently completed the removal of all 
discrete Category I and II SNM from Sandia sites. As of the end of 
February 2008, Sandia no longer possesses SNM in quantities that 
require a Category I or II security posture. This has made it possible 
for us to implement cost savings in our security protective force, 
which we have achieved through normal attrition and a thoughtful 
program of job transitioning and retraining.
    A problem of worker displacement may arise in many job 
classifications as the Preferred Alternative is implemented. NNSA has 
set a goal of reducing the nuclear weapon complex workforce by 20 to 30 
percent over 10 years. At Sandia we have sought to do our part by 
responsibly managing our workforce size. We have reduced our direct 
nuclear weapon workforce by 18 percent since 2004, largely through 
retirements and by redirecting engineers, scientists, and technicians 
to other national security programs. It is important to recognize and 
account for the fact that those organizations that have already made 
progress toward achieving their goals should not be subject to even 
further reductions.
    We at Sandia recognize the need for changes in the nuclear weapon 
complex. We support NNSA in its effort to transform the complex into an 
efficient enterprise for stewardship of the nuclear deterrent. 
Implementation of the Preferred Alternative must be carefully managed 
so that essential capabilities remain robust and workforce impacts are 
mitigated.
                       the global nuclear future
    As the demand for energy increases in the United States and 
worldwide, nuclear energy must be part of the solution. New nuclear 
power plants are now being proposed in the United States and worldwide. 
New reactor designs are likely to be part of the expansion of nuclear 
power. There will be technical issues, safety issues, and waste 
disposal issues associated with the expansion of nuclear energy, and 
the Department of Energy national laboratories can play a useful role 
in assisting with their solution.
    The global nuclear landscape is changing significantly. The 
expansion of nuclear power generation internationally raises the 
potential for growing stockpiles of separated plutonium and spent 
nuclear fuel; and the spread of nuclear technology and material 
augments concern over smuggling and the threat of nuclear terrorism. 
Policy development and technology development have not kept pace with 
the accelerating changes in the global nuclear security landscape. The 
nonproliferation regime established by the Treaty on the Non-
Proliferation of Nuclear Weapons has been challenged. Sandia and other 
laboratories have been very active in programs for nonproliferation, 
verification, and cooperative threat reduction for many years.
Reclaiming U.S. Leadership
    It is in the security interests of the United States to assert 
leadership in the development of a safe and secure global nuclear 
future. We need an integrated policy framework that will provide for 
safe, secure expansion of nuclear energy while minimizing proliferation 
risks.
    The United States must reclaim the technical leadership to support 
the development of proliferation-resistant nuclear energy expansion, 
control of nuclear materials, and verification regimes for future 
international agreements. The NNSA laboratories are unique in that they 
possess competence in both military and civilian uses of nuclear 
energy. I believe an opportunity exists to engage these laboratories in 
the development and implementation of solutions that deal with the 
larger nuclear context. To address gaps that have emerged as a result 
of both changing threat conditions and lagging investment, it will be 
important to strengthen the NNSA laboratories' capabilities to address 
the security challenges related to malicious or clandestine use of 
nuclear material or facilities.
Global Nuclear Energy Partnership (GNEP)
    Part of the approach of the United States to support safe and 
proliferation-resistant nuclear power throughout the world is the 
Global Nuclear Energy Partnership (GNEP), which is contained in the 
budget for the Department of Energy's Office of Nuclear Energy. This 
program focuses on research and development to reduce the volume and 
toxicity of high-level waste, reduce the proliferation threat posed by 
civilian inventories of plutonium in spent fuel, and provide 
proliferation-resistant technologies to recover the energy content in 
spent nuclear fuel. Sandia leads the safety, security, and regulatory 
elements of the GNEP program. We are focusing our efforts on defining 
the regulatory framework and the data requirements to support licensing 
of fast reactors and recycling facilities. We at Sandia stand ready to 
support the Department of Energy and the Congress in deployment of this 
important program.
Nuclear Waste
    An acceptable solution for radioactive waste management is critical 
to the expansion of safe nuclear power in the United States. Yucca 
Mountain was intended to be the Nation's long-term repository for spent 
nuclear fuel and high-level radioactive waste. These materials are 
currently stored at numerous sites around the country.
    Sandia completed its portion of the Yucca Mountain license 
application early and provided it to the Department of Energy's Office 
of Civilian Radioactive Waste Management (OCRWM). As the lead 
laboratory for repository systems, Sandia managed the technical effort 
to develop much of the license application safety analysis. This work 
was accomplished despite a severely reduced budget in fiscal year 2008 
and the consequent loss of some staff. We brought together the best 
talent available from among the Department of Energy national 
laboratories, research universities, and technical contractors. We 
endeavored to produce a license application that will be credible among 
technical peers, defensible before the Nuclear Regulatory Commission, 
and respected for the integrity of its science.
    We have already begun to prepare for the license application's 
defense, which will enable the Department of Energy to respond to 
technical questions from the Nuclear Regulatory Commission and requests 
for additional information throughout 2009. Public hearings and 
evidentiary hearings before the Atomic Safety Licensing Board are 
expected to last 2 to 3 more years.
    Looking ahead, the Nation should establish a path forward that 
enables an environment where nuclear energy can realize its full 
potential as a safe, environmentally friendly source of energy. 
Confidence in a nuclear waste management solution remains a critical 
element of the nuclear fuel cycle and is critical to the expansion of 
nuclear power in the near term. Yucca Mountain could be made consistent 
with an approach that includes recycling and interim storage in a 
phased approach to nuclear waste disposal. In my view, we should seek 
ways to get the most from the investment in Yucca Mountain.
    There are many options for managing the waste from current and 
future nuclear reactors, but all options ultimately rely on geologic 
disposal. The high-level waste from defense reprocessing will also need 
such a disposal method. The policy and resulting program for waste 
disposal need to be addressed now. My organization and I stand ready to 
support the administration and the Congress in the development of a 
revitalized approach to this important national issue.
                        laboratory capabilities
    Sandia National Laboratories maintains an array of 
multidisciplinary capabilities at world-class levels to support its 
mission work for the Department of Energy and synergistic programs for 
other agencies. The research and development disciplines we require 
cover most of the physical sciences and engineering specialties 
recognized today, as well as the computational and supporting 
technologies needed for modern scientific investigation.
Essential Capabilities for the Stockpile
    Sandia's essential capabilities for stockpile stewardship support 
our program's core products, which include engineered and integrated 
warhead systems; arming, fuzing, and firing systems; neutron 
generators; gas transfer systems; and surety systems.
    The capabilities that we recognize as essential for this program 
include systems integration, major environmental testing, radiation 
effects science, computational simulation, microsystem technologies, 
materials science, and the engineering sciences. Many of these 
capabilities are synergistic with those in industry and at research 
universities but do not exist in those sectors in the specialized or 
unique forms required for stockpile stewardship, and rarely as an 
integrated enterprise. Our essential capabilities are integrated with 
the core products that we design and support for the nuclear weapon 
stockpile.
            Microsystems and Engineering Sciences Applications (MESA) 
                    Complex
    The MESA complex at Sandia's New Mexico site is the cornerstone of 
NNSA's initiative to address the need for microelectronics and 
integrated microsystems to support a certifiable stockpile for the 
future. Further, it is a unique, world-class capability for the 
integration of modeling and simulation into design and product 
realization of specialized components for national security 
applications. It is a major investment on the part of the agency to 
retain the mission capability for designing and fabricating radiation-
hardened microsystems. MESA will meet that requirement for future 
decades.
    We have established in MESA the ability to develop, design, and 
produce if necessary, unique integrated microsystems for weapon safety 
and security. This capability includes a national ``trusted foundry'' 
for radiation-hardened microelectronics. We have applied approximately 
40,000 such products to the stockpile and nonproliferation missions of 
NNSA and for other national security customers. MESA is developing many 
new nano-enabled microsystem technologies for broad national security 
applications
    The MESA facility is a landmark achievement for our laboratory. It 
is especially noteworthy as an example of project management 
excellence. MESA construction is effectively complete, 3 years ahead of 
schedule and $40 million below the original baseline. A dedication 
ceremony was held in August to celebrate the opening of MESA's Weapons 
Integration Facility, the final building of the MESA complex.
            High-Performance Computing
    Sandia's high-performance computing capabilities are vital tools 
for NNSA mission responsibilities in stockpile surveillance, 
certification, and qualification, and they have proved to be 
indispensable in our work for other agencies, especially elements of 
the Department of Defense. NNSA's decades-long investment in high-
performance computing at Sandia revolutionized modern supercomputing 
and its application to science and engineering.
    Since 1992, Sandia has been a pioneer in massively parallel 
processing (MPP), which employs special software to control thousands 
of low-cost processors configured as a single machine. Sandia was the 
first to shatter the world computational speed record by exceeding one 
trillion floating-point operations per second (one teraflop) with MPP. 
We achieved this milestone on the ``Red'' supercomputer that we 
developed with Intel under the Department of Energy's Accelerated 
Strategic Computing Initiative in 1996.
    Sandia's current supercomputer, ``Red Storm,'' also has been highly 
successful in terms of performance, effective cost for computing 
capability, and improvements achieved after initial operation. Sandia 
led the development of the architecture and associated applications of 
this machine. Our partner, Cray, Inc., developed its XT family of 
supercomputers based on the Red Storm design and now has 36 
installations at 20 sites worldwide. Based on this significant 
heritage, Sandia claims the most cost-effective approach to 
supercomputing.
    Application of these computing capabilities has allowed Sandia to 
address technical problems--previously thought to be impossible--in 
support of nuclear weapon qualification activities. Further, in several 
cases other Federal agencies have asked us to address computational 
problems that could not be addressed by any other institution. The 
impact of these calculations is hard to overstate; they have allowed 
resolution of formidable science and engineering challenges in support 
of national security.
    Under the Preferred Alternative for complex transformation, NNSA 
plans to consolidate its high-performance computing platforms at the 
Lawrence Livermore and Los Alamos sites, principally due to the NNSA 
investments in computing facilities at those institutions. In order to 
remain a key participant in NNSA's high-performance computing program, 
Sandia has negotiated a memorandum of understanding with Los Alamos 
that will bring together the two laboratories' computer science and 
operational capabilities for high-performance computing. Under this 
agreement, Sandia will lead in providing the architecture and 
engineering expertise for capability platforms, and Los Alamos will 
lead in deployment and operations. Teams will be formed from both 
laboratories to provide an unparalleled computational resource for 
future NNSA capability platforms.
    This partnership is not without risk to both institutions. It is 
essential for NNSA to execute a platform strategy that supports the 
Sandia/Los Alamos partnership with a platform procurement in fiscal 
year 2010 and meets the established requirements for maintaining and 
refurbishing the nuclear weapon stockpile. These requirements clearly 
identify the need for replacing the existing NNSA Purple and Red Storm 
platforms by fiscal year 2010.
            Support for the Weapons Activities Engineering Campaign
    I am concerned about erosion in the Weapons Activities Engineering 
Campaign. This campaign contains much of the science and technology 
foundations supporting Sandia's ability to assess and sustain the 
stockpile. This science-based campaign advances the engineering 
competencies that are the basis for assessing components and subsystems 
and improving weapon safety and reliability. This program suffered a 40 
percent reduction between fiscal year 2004 and 2007; the fiscal year 
2008 appropriation was still 35 percent below the 2004 mark, and the 
2009 request is about the same. Chronic under-funding of this campaign 
may diminish the advanced engineering capabilities at the laboratories 
over the long term. These capabilities are essential for maintaining 
confidence in the assurance stewardship activities for the stockpile.
Attracting and Retaining Technical Talent
    We are very deliberate about preserving critical skills in our 
workforce. Through strategic hiring and mentoring of top graduates, 
especially from key universities throughout the country, and through a 
formal knowledge preservation program, we believe we can ensure that 
the smaller workforce of tomorrow will have access to the technical 
knowledge and lessons learned that will be needed for the future.
    We have been able to attract new talent largely because of the 
diversity of missions and professional challenges at the laboratories. 
System engineering programs, technology development, and advanced 
scientific and engineering research are essential for sustaining career 
interest and commitment. The opportunity to support national security 
needs beyond the nuclear weapon program is motivating to prospective 
staff.
NNSA Capabilities Going Forward
    My biggest concern with the long-term future of NNSA is that 
science and engineering capabilities may be relegated to a subordinate 
role as we strive to right-size the nuclear weapon complex and 
necessarily confront the fiscal realities of today. In my view, an 
essential characteristic of the cold war's resolution and a fundamental 
element of deterrence going forward is the strength and resiliency of 
the NNSA laboratories. Their scientific capabilities have deterred our 
adversaries, contributed mightily to the Nation's technological 
leadership, and seen many unparalleled applications in support of 
national security.
                            energy security
    By 2030, world energy demand and carbon emissions are expected to 
increase by 60 percent. The Nation needs a credible plan for 
transitioning from today's carbon-based energy and transportation 
infrastructure to a system that is less dependent on fossil fuels. 
Nuclear energy will be a major part of that solution, but other 
approaches to low-carbon energy generation and conversion will also be 
important.
    The Department of Energy and its national laboratories are 
exploring bold new ways of translating research into deployable 
solutions to have more impact, sooner, particularly to achieve goals 
related to reducing oil and gas imports and lowering emissions. We are 
working on a plan to leverage several key Sandia capabilities with 
academia, a few other laboratories, and industry, to dramatically 
increase the effectiveness of transformative energy research in 
transportation systems.
    Consistent with the Preferred Alternative for complex 
transformation, we are exploring a research thrust in energy security 
to be centered at Sandia's California site. The initiative would focus 
on low-net-carbon alternative fuels, accelerated electrification of 
transportation infrastructures, and combustion efficiency, which is a 
long-standing competency of the successful Combustion Research Facility 
in California. I believe a unique opportunity exists to apply existing 
facilities at Sandia's California laboratory to basic and applied 
research in support of our energy needs. This will serve to bring 
together the fundamental research efforts of the Department of Energy 
Office of Science with the applied energy programs of DOE. This will 
include university and industrial participation and draw on the 
entrepreneurial capabilities that are so strong in the San Francisco 
Bay area.
    More intensive use of modeling and simulation through high-
performance computing can accelerate the contributions of renewable 
energy technologies. Sandia is currently working toward an agreement 
with the National Renewable Energy Laboratory (NREL) to establish a 
partnership in which Sandia would provide capacity computing for NREL 
programs. NREL and Sandia bring extensive capabilities to the 
renewables mission and are focused on meeting this challenge--from 
understanding renewable resources for energy, to the conversion of 
these resources to electricity and fuels.
                   programs for the office of science
    I am increasingly concerned that the Nation's investment in science 
and engineering is not receiving the attention the Nation requires. 
This is one of the most significant challenges that will define the 
Nation's future. While legislation like the America COMPETES Act \3\ 
provides a statement of good intent, in my view it is essential for the 
Federal Government to make real investments in people, education, and 
programs across a broad spectrum of science and engineering.
---------------------------------------------------------------------------
    \3\ American COMPETES Act, Public Law 110-69, U.S. Statutes at 
Large 121 (2007): 572.
---------------------------------------------------------------------------
    The Office of Science is the steward for a significant fraction of 
the fundamental physical science research in the United States, both at 
the Department of Energy laboratories and in universities around the 
country. Its portfolio and those of a number of other agencies are 
central to American competitiveness, as argued in the ``Gathering 
Storm'' report of the National Academies.\4\ In addition, many of the 
Office of Science research directions promise revolutionary advances in 
scientific areas vital to our national security. Despite the importance 
of a strong physical science foundation for future U.S. 
competitiveness, the history of investment in the Office of Science is 
not consistent with the Department of Energy's prominent role and 
potential for the future.
---------------------------------------------------------------------------
    \4\ Committee on Prospering in the Global Economy of the 21st 
Century, Rising Above the Gathering Storm: Energizing and Employing 
America for a Brighter Economic Future (National Academy of Sciences, 
National Academy of Engineering, Institute of Medicine, 2007, http://
www.nap.edu/catalog.php?record_id=11463.
---------------------------------------------------------------------------
    Sandia has a presence in four of the Office of Science's programs: 
Basic Energy Sciences (BES), Fusion Energy Sciences, Advanced 
Scientific Computing Research, and Biological and Environmental 
Research. BES represents the lion's share of our work and includes 
research in materials, chemical sciences, combustion, geosciences, and 
nanotechnology.
    The Office of Science's Center for Integrated Nanotechnologies 
(CINT) core facility was completed in 2006 and is jointly operated by 
Sandia and Los Alamos National Laboratories as a Department of Energy 
user facility available to university and industrial researchers. CINT 
is devoted to establishing the principles that govern the design, 
performance, and integration of nanoscale materials. Leadership in the 
science and engineering of nanotechnology will be important for U.S. 
competitiveness in the decades ahead.
    Sandia is a major partner in the Joint BioEnergy Institute (JBEI), 
a research center funded by the Biological and Environmental Research 
Program. The research focus will be on understanding how to reengineer 
biological processes to develop efficient methods for converting plant 
materials into ethanol or other biofuels. This 5-year effort may help 
make biofuels production truly cost-effective on a national scale.
    The synergy between programs in the Office of Science and other 
parts of the Department of Energy is very important. The investment 
across all of these programs must be balanced in order to assure a 
steady stream of scientific advances that can be translated into 
technologies of benefit to the American people. NNSA programs and all 
aspects of energy research and development gain from the fundamental 
science available in Office of Science programs. It would be beneficial 
for the Congress to support the funding levels contained in the fiscal 
year 2009 budget submission. This support would stimulate the kind of 
productive collaborations across programs that are so helpful. In 
addition, I am aware of efforts to strengthen the fiscal year 2008 
budget by considering a supplemental appropriation for the Office of 
Science. I would encourage your consideration of that matter.
          future of the nnsa laboratories in national security
    During the cold war, the nuclear weapon laboratories benefited from 
a designated core mission that for 50 years had furnished the rationale 
for their exceptional technical foundations. The unambiguous importance 
of that mission assured sufficient funding to sustain an effective 
technology base.
    Today, the national security challenges are more complex than they 
were during the cold war. The NNSA laboratories are uniquely positioned 
to contribute to the solutions of these complex national security 
challenges. However, the NNSA Administrator and the laboratory 
directors face a formidable problem of how to maintain technical 
competencies--especially in nuclear weapons--in an era of limited 
resources, a smaller program, fierce competition for talent, and 
widespread public and political uncertainty toward the program. In this 
new and difficult operating environment, synergistic work supporting 
other national security missions is crucial. We depend on other 
national security activities to support and stabilize our critical 
capabilities and science base. It makes sense, therefore, to encourage 
more extensive use of the NNSA laboratories by multiple agencies and 
sponsors, thereby exercising and enhancing the competencies we require 
for stockpile stewardship.
    We are working with DOE and NNSA to establish a strategy and 
approach that provides enhanced access to the unique facilities at 
these laboratories that will significantly benefit the Nation's 
responsiveness to broader national security problems.
An Example of Multiprogram Synergy: Radar
    Sandia's capabilities for the nuclear weapon program benefit from 
synergy with other national security programs. An excellent example of 
this synergy is our work in radars.
    Competency in specialized radar applications is a required 
capability for the nuclear weapon program. As a result of initial 
investments in radar fuze capability for nuclear weapons, we began 
working on miniature radars based on synthetic aperture concepts in 
1983 for other national security applications. In 1985 we became 
involved in a special-access program for the Department of Defense to 
develop a 1-foot-resolution, real-time synthetic aperture radar (SAR) 
suitable for use in unmanned aircraft. Sandia flew the first real-time, 
1-foot-resolution, SAR prototype in 1990. Follow-on work sponsored by 
the Department of Defense reduced the size and cost of SAR systems, 
improved resolution, and significantly expanded the applications and 
military benefits of radar. Partnerships with industry have 
transitioned each generation of the technology into field-deployable 
systems. Sandia-designed airborne SAR systems have now been used for 
real-time surveillance by every U.S. military command.
    In this example, the original radar competency of the nuclear 
weapon program was improved by this work for the Department of Defense. 
The resulting advanced radar competency made it possible to apply new 
technology to the updated fuzing system for the W76-1 in the nuclear 
weapon program. This updated fuzing system would not have been possible 
without the competency that was maintained by work for the Department 
of Defense.
Broad National Security Engagement
    Today, nuclear weapon activities constitute about 42 percent of 
Sandia's funding. Department of Energy programs in nonproliferation, 
energy security, and science provide another 20 percent, while agencies 
other than the Department of Energy furnish 38 percent of our total 
operating funds.
    The work-for-others (WFO) process that has been in place for many 
years for accepting non-DOE work into the NNSA laboratories should be 
streamlined for the future. Many agencies could benefit from a 
reimbursable system that would give them direct access to the 
Department of Energy laboratories, and DOE would benefit from the 
additional programmatic activity and institutional support. In order to 
enhance our ability to serve the Nation, it may also be useful to 
explore innovative governance options to promote shared agency 
investment.
    There are questions that naturally arise as the laboratories take 
on important national security assignments from agencies other than the 
Department of Energy. It is important to recognize that other agencies 
do contribute more than the direct program costs of their activities. 
In fact, they pay the overhead rates that all programs pay, and those 
payments help provide support for operational and infrastructure costs 
and for the Laboratory-Directed Research and Development Program. A 
portion of our overhead rates is utilized for capital improvements, and 
in some cases other agencies have paid directly for the construction of 
buildings and the purchase of capital equipment. It is important to 
recognize that while operational costs and some capital improvements 
are currently being addressed, there is still a need for more 
substantive investment in the science and engineering fabric of the 
laboratory.
    The laboratories and NNSA should be encouraged to develop a 
realistic approach for maintaining the excellence of our scientific and 
engineering foundations well into the future. I believe we can succeed 
only as national security laboratories in a broad sense, serving the 
needs of multiple agencies for mutual benefit and shared excellence in 
national service.
    Thank you, Mr. Chairman.
                      addendum--issues of concern
    The following specific issues of concern to Sandia National 
Laboratories--some of which were addressed in my statement--are 
summarized for the attention of the Committee.
Implementation of Complex Transformation
    We support NNSA in its effort to transform the complex into an 
efficient enterprise for stewardship of the nuclear deterrent. 
Implementation of the Preferred Alternative must be carefully managed 
so that essential capabilities remain robust and workforce impacts are 
mitigated.
    High-performance computing will remain an essential competency for 
Sandia. There is significant risk that the skills acquired by Sandia's 
system computing team will be lost over time without a high-performance 
computing platform on site. Sandia is committed to cooperating with the 
implementation of complex transformation and will monitor the 
implementation process to assure that capabilities are fairly 
integrated.
    A problem of worker displacement may arise in many job 
classifications as the Preferred Alternative is implemented. NNSA has 
set a goal of reducing the nuclear weapon complex workforce by 20 to 30 
percent over 10 years. At Sandia we have sought to do our part by 
responsibly managing our workforce size. We have reduced our direct 
nuclear weapon workforce by 18 percent since 2004, largely through 
retirements and by redirecting engineers, scientists, and technicians 
to other national security programs. It is important to recognize and 
account for the fact that those organizations that have already made 
progress toward achieving their goals should not be subject to even 
further reductions. Normal attrition should allow for appropriate 
workforce restructuring, but we may need a thoughtful program for job 
transitioning and retraining for those instances in which workforce 
dislocations are acute.
Support for the Weapons Activities Engineering Campaign
    The Weapons Activities Engineering Campaign advances the 
competencies that are the basis for assessing engineered components and 
subsystems and improving weapon safety and reliability. This program 
suffered a 40 percent reduction between fiscal year 2004 and 2007; the 
fiscal year 2008 appropriation was still 35 percent below the 2004 
mark, and the 2009 request is about the same. Chronic under-funding of 
this campaign may erode the advanced engineering capabilities at the 
laboratories over the long term. These capabilities are essential for 
maintaining confidence in the assurance stewardship activities for the 
stockpile.
Cyber Security
    The United States relies extensively on information technology in 
the form of computers, chips embedded in all forms of products, 
communication systems, and military capabilities. There are growing 
indications that the security of our society is increasingly vulnerable 
to attacks on these systems. A national initiative in cyber security 
deserves increased attention, and that is beginning to happen. The 
Department of Energy and the NNSA laboratories have much to offer in 
assisting with solutions in this area.
    During the past several years, the NNSA laboratories have 
experienced an increase in the level, intensity, and sophistication of 
network attacks directed against computer resources. Offensive 
capabilities for cyber warfare and cyber espionage have advanced by 
leaps and bounds worldwide. Other nations have been working assiduously 
to neutralize the cyber advantages that the United States has enjoyed 
for 2 decades and to exploit weaknesses in our cyber architecture as an 
asymmetric vulnerability for U.S. national security. These developments 
cause us to worry that the sophistication of the threats is growing at 
a faster rate than we are able to respond in hardening our systems 
against intrusions.
    NNSA's request for cyber security in fiscal year 2009 is $122.5 
million, an increase of 22 percent over 2008. This increase is 
essential to help us continue to harden our infrastructures against 
cyber attacks. But it should be recognized that this is a first step 
toward the kind of comprehensive effort needed to deal with this 
growing threat. Additionally, there is a need to bring in other parts 
of the Department of Energy in a more significant way, particularly the 
Office of Science.
Safeguards and Security Funding Offset for Reimbursable Programs
    The fiscal year 2001 appropriation for Weapons Activities created a 
direct-funded budget for safeguards and security at NNSA sites. The 
conference report directed the Department of Energy to obtain funds 
from non-DOE customers in 2002 and beyond to offset a portion of the 
security appropriation. The laboratories have been collecting that 
offset via an overhead charge applied to work-for-others (WFO) 
projects. This practice has been called into question. Accordingly, the 
fiscal year 2009 budget execution guidance provides for direct funding 
only. Thus the funds formerly collected via the WFO offset will be 
lost, which at Sandia will cause a shortfall of several million dollars 
in funds available for safeguards and security.
Program Enhancements That Would Be Possible With Additional Funding
            Full Utilization of the Refurbished Z Pulsed Power 
                    Accelerator
    The Z pulsed-power facility provides data for nuclear weapon 
primaries, secondaries, and non-nuclear components essential for 
stockpile stewardship. Experiments on Z also explore advanced concepts 
and study alternative approaches to fusion energy. Full single-shift 
utilization is the most efficient way to maximize the return on the 
value of the recent refurbishment of Z. Operations are currently funded 
jointly by NNSA's Science and Inertial Confinement Fusion (ICF) 
Campaigns.
    A new approach to creating high-current pulsed-power devices, known 
as a Linear Transformer Driver (LTD), has recently been demonstrated at 
Sandia. LTD is more than twice as efficient as traditional pulsed-power 
devices. This advance is likely to be the future of large-scale sub-
microsecond pulsed-power devices. It is also the simplest technological 
approach to fusion energy. Additional funding would enable Sandia to 
accelerate the maturation of this game-changing technology.
            B61 Life Extension
    The B61 bomb has several versions and is one of the oldest weapon 
systems in the legacy stockpile. Many of the technologies used in the 
B61 are old, several components are reaching end-of-life, and the 
system would require upgrades to be compatible with new digital-
interfaces for future delivery systems. Modern technologies and 
redesigned architectures would permit upgrades to this weapon without 
providing a new military capability. B61 refurbishment should be 
implemented as soon as possible to sustain the Nation's gravity-
delivered nuclear weapon capability.
            Discovery Science and Engineering Innovation Institutes
    The America COMPETES Act passed last year authorized the 
establishment of Discovery Science and Engineering Innovation 
Institutes at Department of Energy national laboratories. Discovery 
Institutes would be catalysts for transformation by helping to develop 
the next generation of science and engineering leaders to address 
national challenges and meet industrial needs to compete globally. An 
appropriation for the Discovery Science and Engineering Innovation 
Institutes at national laboratories would enable this initiative to 
proceed.
Nuclear Waste
    An acceptable solution for radioactive waste management is critical 
to the expansion of safe nuclear power in the United States. Sandia 
National Laboratories has developed significant waste-repository 
expertise through its work with both the Waste Isolation Pilot Plant 
and the Yucca Mountain Project. There are many options for managing the 
waste from current and future nuclear reactors, but all options 
ultimately rely on geologic disposal. The high-level waste from defense 
reprocessing will also need such a disposal method. The policy and 
resulting program for waste disposal need to be addressed now. My 
organization and I stand ready to support the administration and 
Congress in the development of a revitalized approach to this vital 
national issue.

    Senator Dorgan. Dr. Hunter, thank you very much.
    This is--as you might expect for those of us who don't work 
in this area--this is enormously complicated, complex, and 
difficult to understand.
    Dr. Hunter, when I visited Sandia, you told me something 
about a teraflop, so let me ask you to share that again. I 
think what you said is a teraflop is one trillion computer 
functions in a second.
    Dr. Hunter. That's correct.
    Senator Dorgan. Is that correct?
    Dr. Hunter. Yes.
    Senator Dorgan. You told me that we achieved the first 
teraflop in 1997.
    Dr. Hunter. That's correct, in the mid-1990s, yes.
    Senator Dorgan. And you told me the amount of space it 
required for the computers to achieve that teraflop--how large 
was that?
    Dr. Hunter. It basically required a full room, a complete 
room full of computers, and it required many thousands 
kilowatts of electricity to support it.
    Senator Dorgan. And you said 10 years later we achieve a 
teraflop with what size application?
    Dr. Hunter. Actually, today there are chips being produced 
that were one single chip--about the size of a dime--does a 
teraflop on a chip.
    Senator Dorgan. And it requires the energy of a 60-watt 
light bulb?
    Dr. Hunter. Sixty-five.
    Senator Dorgan. Sixty-five. All right. So, that's a 
teraflop--1 trillion computer functions in a second.
    Dr. Hunter. That's correct, yes.
    Senator Dorgan. You are saying that you have achieved, or 
are about to achieve next year a petaflop.
    Dr. Anastasio. We're about to achieve this summer, a 
petaflop.
    Senator Dorgan. Which is not a trillion functions per 
second, but a thousand trillion functions per second?
    Dr. Anastasio. That's correct, sir.
    Senator Dorgan. And Mr. Miller, you said that's not enough?
    Dr. Miller. Yes, sir.
    Senator Dorgan. Yes, well, okay, so----
    Senator Dorgan. I'm not sure I understand anything about 
this. I mean, I don't understand a trillion, I understand now 
what a teraflop and a petaflop is, I understand the dramatic 
advancements, I understand that weapons physics, perhaps, allow 
you to use these unbelievable, muscular, computer capabilities 
to understand things you didn't previously understand, but I 
think I speak for this subcommittee that, we don't understand 
how a scientist might use this capability. I think you tell us 
it's important, I believe that. I think that that is important.
    Let me ask a couple of questions, and Dr. Hunter, thank you 
for allowing us all to understand what these are.
    Director Miller, you said that you've lost 2,000 people--is 
that correct?

                         FUNDING AND PERSONNEL

    Dr. Miller. Yes, sir, it is.
    Senator Dorgan. Let me try to understand how that happens, 
because the nuclear weapons program has not decreased--we 
increased it, not very much--we increased it by about $50 
million last year, so it was relatively stable, just up, just a 
little bit.
    Science, we increased last year, so we increase--in this 
subcommittee--the funding for nuclear weapons and science, and 
yet you end up losing 2,000 people. Tell us how that happened, 
does it have something, perhaps, at least in small part, to do 
with the contract that Senator Feinstein talked about?
    Dr. Miller. Yes, sir. There are three fundamental elements 
that are associated with that loss of 2,000 people. The first 
is that the Federal funding for the Laboratory mostly coming 
from NNSA, went down $100 million, so the money that you 
appropriated went elsewhere.
    Senator Dorgan. That's an NNSA decision, not the decision 
of this subcommittee, is that correct?
    Dr. Miller. It is associated with the budget that was 
approved and where money was in the budget, so again, as an 
example, the money that goes into super-computing has steadily 
gone down. At its peak in 2004, it was $750 million a year, it 
is currently $545 million.
    Senator Dorgan. Where did it go? If we're increasing the 
appropriation, does it go to facilities? The only point I'm 
making is----
    Dr. Miller. Right.
    Senator Dorgan [continuing]. That doesn't--that 
responsibility doesn't necessarily rest at this table, if we're 
actually approving more money--slightly more money--for science 
and nuclear weapons. That's a decision made somewhere else in 
the bowels of NNSA. So, I'm just trying to understand it.
    Dr. Miller. So, yes, I mean, again, in a very, very 
simplistic fashion, you know, there are three elements to 
NNSA's budget. There is the science and technology, there is 
the physical infrastructure, and there is taking care of the 
stockpile that we currently have.
    Senator Dorgan. That's correct.
    Dr. Miller. And so the increases in the budgets, in fact, 
more than the increase in the budgets, are going to maintain 
the cold war stockpile that we have, and take care of the 
infrastructure that is aging and needs replacing. And where 
does that money come from? It comes out of science.
    Senator Dorgan. All right, and----
    Dr. Miller. And the rest of your question--so we lost $180 
million, I'm sorry--we lost $100 million in Federal funding. 
The cost of the contract, as a result of principally, the 
public to private sector changes, increased the costs at the 
laboratory $130 million. Of that $130 million, $40 million was 
the increase that Senator Feinstein asked about, in terms of 
the fees that go to the companies that are the management.
    The reason for those fees was the NNSA and congressional 
decision to attract industrial partners, if you want to attract 
industrial partners, it will cost. That's what it cost in the 
case of Livermore, about $40 million extra.
    Senator Dorgan. That's a pretty substantial cost. It cost 
you some, apparently, very attractive workers.
    Dr. Miller. Right. And then the other, then the third part 
is just inflation. The sum of all of that is about $280 
million, that's what drove the decrease in people.
    Senator Dorgan. Dr. Hunter, and Anastasio, tell me--since 
the implementation of the annual certification process that's 
gone back to 1997, tell me about your confidence in the 
reliability of the nuclear weapons that are currently 
deployed--you make certifications, you now come to us and say, 
``We're doing teraflops and petaflops and 80 this, and 
quadrillion that,'' and so we're obviously muscling up in 
technology and capability. Has your confidence decreased at all 
in your certification?
    Dr. Anastasio. Well, I would say first, I am confident in 
the stockpile today. The concerns I have, the risks going 
forward to the future. It is true that as we do our annual 
assessment process, and we do our continuous work during the 
year that we find issues with the stockpile that need to get 
addressed.
    Some of those turn out to be small issues that are not 
consequential--some are very significant. And, the way we deal 
with those, that are significant, have caused us to restrict 
the scope of certification for some of the weapons systems that 
we have in the stockpile. And I can't say too much more, in 
this forum.
    And so, we're still confident in the systems, but there are 
some restrictions that are a consequence with that. And my 
biggest concern is the trend of maintaining balance across the 
three elements that George Miller talked about in the program, 
and keeping those in balance, in light of the constrained 
funding that we have, and all of the challenges the program has 
to face.
    Senator Dorgan. Director Hunter.
    Dr. Hunter. Yes, I'd break the confidence into a couple of 
pieces. The first piece is our confidence--and my personal 
confidence in being able to find and detect issues--that is up. 
That is, I feel like we can do a better job today than we did 
10 years ago, to assess and understand issues.
    We then, of course, have the question of the confidence in 
the stockpile, and we still report the stockpile as safe and 
reliable, and our confidence in that statement is quite high.
    The question, though, is are there ever cases, as Mike just 
said, where we have to put restrictions on what we say about 
the nuclear weapons, and the answer is, we see those, and 
they're well-supported by our observations and our ability to 
detect them.
    Senator Dorgan. I want to just--I'm going to call on 
Senator Domenici, but I want to say that we asked you to come 
today to talk about the weapons issues, so these are very 
important issues and your three laboratories play an important 
role. You do more than that in each of your laboratories. My 
interest is, no matter what we are doing on some of these 
programs, we're always going to have a Stockpile Stewardship 
Program as long as there are nuclear weapons, and we'll need 
that work to be done.
    My interest at the end of the day is to maintain a robust 
workforce in our national laboratories to pursue aggressive new 
science, because I think that's a significant investment in the 
future of this country--in dozens of areas, not just the issue 
of certification of nuclear weapons.
    So, I think that you should know, there's a lot of support 
on this subcommittee for the advancement of science, and for 
the work that you do in your laboratories. I think the national 
laboratories are jewels, and produce significant opportunities 
for this country's future.
    I see this--you know, we do a lot of spending. We spend 
money. Some of it we invest. And a portion of what you do is a 
significant investment into the future of this country. We have 
to continue to lead the world in science, and that's part of 
the decision of this committee, as well.
    Senator Domenici.
    Senator Domenici. Mr. Chairman, I'm so pleased to hear your 
comments so early in your chairmanship, that it makes me feel 
very happy and, about having to leave here. I'll get back to 
the worry about the future.
    But first I would like to make a deal with you, Mr. George 
Miller.
    And I want to ask Senator Feinstein--have you ever visited 
the laboratories in New Mexico, Senator?
    Senator Feinstein. No, not in New Mexico. I've visited 
Lawrence Livermore, not----
    Senator Domenici. Well, I want to make a deal with you. I 
have never been to Livermore to see the great big machine that 
costs $4.5 billion, and that I wasn't for, and that gave him 
and his predecessor gray hair, because we're all--big shot 
Domenici was going to kill that machine, and frankly I didn't, 
in the end, I gave into my most natural tendency to be a sucker 
for big science. And I have been that, for my whole career. I 
am a sucker for big science. I've missed on a couple, but on a 
couple that are very important, I've not missed.
    And the theory that permeates me, my bones, because of 
that, has caused me to continue to be worried about our 
country, in terms of its greatness having been built around 
science and technology and we were the best. And I'm very 
worried about the fact that we're losing out, because that 
seems to be too hard for a lot of our young people--math, 
science, physics and engineering.
    But George, I haven't been there, and if you will promise 
to appropriately welcome me, and to be happy about my visit, 
and to be----
    Dr. Miller. We would be honored to have you visit, anytime, 
Senator. And we will make sure that it is a joyous occasion.
    Senator Feinstein. Yes, I'll bet.
    Senator Domenici. We want him to be joyous, too.
    I'll try to do it before I leave, okay? And I was just 
going to suggest that maybe the--in return, maybe I could take 
the distinguished California Senator to New Mexico, we could 
make a swap, she could come and see our labs, and I go to see 
your big lab.
    Senator Feinstein. I would be delighted, thank you.

                       NATIONAL IGNITION FACILITY

    Senator Domenici. I think you should know--I do think you 
should know, Senator, that I was fully aware when we funded the 
NIF, the National Ignition Facility, as part of Stockpile 
Stewardship, and it hasn't been functioning yet, in that 
capacity, unless it is in the last few months, because it 
wasn't ready. So a big addition to our Stockpile Stewardship 
awaits implementation when we open NIF, if it works. And it'll 
work in some respects, for sure, but will it work in all 
respects, in all the ways or not? We don't know.
    But, I knew fully that Lawrence Livermore, without that 
machine, might be a Lawrence Livermore with a short life. The 
people of California should know that--it might have died on 
the vine. That's given it a new breath of scientific prowess 
that will bring many thousands of people there to use that 
machine, and they won't be part of Science-based Stockpile 
Stewardship, they'll be part of a pushing America yet further 
to the cutting edges of science, as they use the machine.
    Los Alamos got a machine out of it, and it's finished and 
it's finished and it's doing a great job, and they also got 
great computers out of it, and other things. And Sandia got a 
number of things, the last, clearly, is a fantastic Mesa 
facility which we've both seen, which specializes in small 
things--when you go there you will thoroughly amazed at--and 
not so worried about--whether our country's going to lose out 
in nano and technology, and the manufacture of small things.
    Small machines--so small that you can put all kinds of 
machines on little--machines, literally--on a little piece of 
metal. And those machines worked, in there pumping their little 
brains out, and we can't even see them, and we're wondering 
what to do with them, and that's what they're doing there, so--
we've got those done.
    So, a lot of things have been accomplished. I worry about 
our country on science and technology training, physics, 
engineering, math and whether we have good teachers, and 
whether we're producing students. One way I could find out 
would be to ask the three of you who are--you are a demand 
source for the best scientists that we can produce, you want 
them, right? You're out there hiring them. So, let's ask you--
are you noticing a substantial decrease in the number of 
talented Americans that seek complicated science jobs at your 
laboratory?
    Dr. Anastasio. Senator, and by the way, Senator Feinstein, 
we'd be honored to have you come visit any time you were able.
    Senator Feinstein. Thank you.
    Dr. Anastasio. And I'd love to see you again, in that 
context.
    Senator Feinstein. Thank you very much, thank you.
    Dr. Anastasio. Senator Domenici--I do see a drop off in the 
number of U.S. citizens who are at the top of their field in a 
number of key areas that are important to the laboratory. But I 
am encouraged that we're still able, at these laboratories, to 
attract some of the best and brightest people that are still 
available--whether they be U.S. citizens, or not. And I think 
that's important, that we can still attract very high-quality 
staff, but the ability or the success of this country in 
generating all of those folks, we are seeing a drop-off.
    Senator Domenici. George? Excuse me, Mr. Miller?
    Dr. Miller. Yes, sir. I would agree with what Mike said, we 
have a very prestigious post-doc called a Lawrence Fellow, 
that's basically at the top of the line in terms of post-docs. 
Generally, 60 percent of the people who win those post-docs are 
not U.S. citizens.
    So, it is a concern. The good news is we still get the very 
best and the very brightest at the laboratories, because of the 
science investments that we've talked about, because the 
science is so exciting, because the mission is so compelling. 
And quite frankly, even though our core mission is nuclear 
weapons, about 80 percent of what we do is actually publishable 
in peer-reviewed scientific journals, and so all of that is 
essential.
    Senator Domenici. Dr. Hunter.
    Dr. Hunter. Yes, Senator Domenici--I'd like to add my 
welcome to Senator Feinstein, please come.
    Nationally, we have a problem. We are not seeing enough 
students going into the fields of science and engineering and 
we're not seeing enough people coming out, the way we'd like to 
see them.
    One thing we find about these laboratories is, they not 
only have places of excitement because of the work, but they're 
also places of values and character, and they support the 
national interests, and that brings a lot of the right people 
to our laboratories. So I can report, basically, that we're 
able to get the people we generally need, but the national 
problem is one of--very significant--and one I think all of us 
can do more to try to help.
    Senator Domenici. I'm going to submit some questions for 
you to answer in writing, but we were--we've kind of gone over 
our stay here, today. And we still, perhaps, will want to go 
another round, I don't know.
    But, I want to suggest to--here, and for all of you to hear 
it and the subcommittee to hear it--we cannot continue to want 
so much of these laboratories, as we're here today describing, 
expect them to do so much, if we don't spend more money on the 
science part of the laboratories. No question in my mind that 
we are getting squeezed out, science is getting squeezed out, 
especially math, science--math, physics, engineering, and the 
like--in our national picture, too, in terms of what's going on 
in our schools. And I'm very worried about it, and hope you 
will keep your laboratories exciting, because that's what young 
people are looking for, and I think we're giving you enough 
equipment to do that.
    One question--while we have praised NIF, we should talk a 
minute about the little brother, or little sister to NIF, the 
one you have at your place that's got a funny name, called the 
Z Machine, ZA Machine or something.
    Would you tell the chairman and Senator Feinstein what that 
is, and----
    Dr. Hunter. Sure.
    The Z Machine is a very complementary facility to the NIF 
facility, it is working now, we have just refurbished it.
    It is another approach to providing very high-density, 
high-energy density environments which uses what we call pulse 
power--lots of big transformers dumped into a very small space. 
And so we've just finished refurbishing that, we're doing 
experiments today looking at implosion of fusion capsules, and 
experiments today looking at materials under very high 
pressures, and very high temperatures. And it's operating--it 
can operate as often as once a day, and we use it routinely and 
we work day in and day out with the other two laboratories to 
support experiments that they do.
    Senator Domenici. Okay. Now, will you please tell us about 
why you're worried about your laboratories--availability of 
appropriate computers?
    Dr. Hunter. Sure, I think it's the same general issue that 
Mike and George commented, because as we look at the balance of 
the investment, or the resources that go into the stockpile 
itself, or the other parts of the complex infrastructure, and 
ask them, what is the remaining amount that's spent on science? 
We find a normal and natural competition there, and that 
science piece, and the application on G, on Z, has been reduced 
over time to where we're barely able to operate at the one 
shift a day level.
    Senator Domenici. Thank you.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Domenici, thank you very much.
    I'm going to call on Senator Feinstein, but I want to 
observe, relative to this question of funding, I just came down 
the hall--as I think did Senator Domenici--from another hearing 
today, Senator Feinstein was at the hearing--in which the 
administration's requesting $196 billion as an emergency piece 
this year for Iraq and Afghanistan.
    So, the result is, because we have that war going on, it's 
very expensive--that's $16 billion a month, $4 billion a week, 
just for that emergency piece, in this year. And the result is, 
we get a domestic discretionary request in the budget in this 
subcommittee that says, ``Okay, we need to fund the nuclear 
weapons programs, the laboratories, science, and by the way we 
want you to cut $1 billion our of water projects,'' the Corps 
of Engineers, lost $800 million, the Bureau of Reclamation cut 
$200 million, roughly. The fact is, it doesn't add up.
    And so, this subcommittee, you know, unless we find some 
additional funding, is left with a Hobbesian choice. And so, 
last year we found some additional funding to try to fix some 
of these problems in the President's budget, but it is--it's a 
difficult problem, and no one here wants to short science. 
Nobody on this panel wants to do that. It's just that the 
President has given us a budget that, we've got to fix it, 
because it doesn't work.
    Senator Feinstein.

                      NATIONAL LABORATORY FUNDING

    Senator Feinstein. Thank you very much, Mr. Chairman.
    First of all, it's very fine to see the three of you here, 
thank you very much--I have great respect for each of you. I 
have respect for what you do, I don't have respect for the 
product. I'm not a friend of nuclear weapons, and you have to 
know that up front.
    I am a product of Nagasaki and Hiroshima, I grew up, I saw 
what 14 kilotons can do. I saw what 7 kilotons can do. I have 
not seen what 100 kilotons can do, and I've not seen what 400 
kilotons can do, but I know they're out there, and I am very 
concerned.
    I am not for a nuclear bunker-buster of 100 kilotons. To 
me, it was immoral. I am not for an Advanced Weapons Concept 
Program of building under 5 kiloton tactical battlefield 
nuclear weapons. I am not for 450 new plutonium pits.
    So, I'm at a very different position. And I want to see the 
United States move away from nuclear weapons. I want to see us 
do it in a way that protects our national security. I want to 
see us take a real leadership role in non-proliferation. I want 
us to work with nations so they don't become nuclear weapons 
nations, and that's my heart, and that's my vision, and that's 
why I'm here today.
    With respect to the budget in 2008, it was $1.091 billion, 
as passed. The President's budget is $1.036 billion--that's $55 
million less than last year. So, it's the President's budget 
that we are essentially working from, in this subcommittee.
    I am concerned about putting 500 highly trained scientists 
and engineers into the job market at this stage--I must tell 
you that right up. I'm concerned about it from a national 
security perspective.
    And Dr. Miller, I don't know if there's anything we can do 
about that, I don't know if they can be employed at Sandia, or 
at Los Alamos, but I worry about it. Do you have any comments?
    Dr. Miller. Thank you, Senator Feinstein. I worry about it 
a lot. These are my colleagues, many of them I've known for 35 
years, which is how long I've been at the laboratory, so this 
is an extraordinarily difficult time for the laboratory, and 
for the entire complex.
    The fact of the matter is as Director of the laboratory, I 
have a fiscal responsibility to deal with the realities that 
the Federal Government gives me. And that's the reality of this 
particular situation. As you know very well, it's occurring at 
laboratories across the Nation. Mike has also lost 2,000 people 
over the last 18 months. There are layoffs anticipated at the 
Stanford Linear Accelerator, at Argon, at Oak Ridge. The fact 
of the matter is, as we have all said, in different ways, and 
from different origins, the investment in science and 
technology for the Nation's benefit is under siege.
    So, I worry a lot about it, I do have responsibilities to 
maintain fiscal responsibility, and that's what has to happen.
    Senator Feinstein. Well, let me ask you something 
precisely, it's my understanding that the lab had expected 
about $80 million in increased costs, but the actual number 
spiraled to $280 million? What was the difference? What took up 
that difference?
    Dr. Miller. The $80 million went to $130 million, the extra 
$50 million is just inflation, which we knew about all along. 
The principal changes were--as I said before--the change from a 
public sector to a private sector.
    Senator Feinstein. How much is that?
    Dr. Miller. That's about $100 million.
    Senator Feinstein. In----
    Dr. Miller. Of the $130 million.
    Senator Feinstein. In what?
    Dr. Miller. Okay, so it is the fact that we are no longer 
tax-exempt, so we have certain taxes we have to pay. The 
healthcare, as a University of California employee, the 
healthcare benefits that the University offers are amortized 
over the entire State. Livermore has to deal with the 
healthcare in Northern California. The healthcare costs for the 
same benefits went up 47 percent.
    Senator Feinstein. How much in dollars?
    Dr. Miller. Sixty-five million.
    Senator Feinstein. So, in other words----
    Dr. Miller. We chose, we chose not use----
    Senator Feinstein [continuing]. Healthcare costs, equal to 
UC's increase cost $47 million, wow.
    Dr. Miller. Right. And the third was that, in the decisions 
that individual employees took about what kind of a retirement 
system to choose, they were given two options--one, a defined 
benefit plan like, identical to the University of California, 
one is a defined contribution plan. The defined contribution 
plan requires that the laboratory put money up front. We used 
an assumption that the same fraction of employees as took the 
defined benefit at Los Alamos, would take it at Livermore. That 
was not the case. More people picked the defined contribution 
plan, which again, increased the up-front costs for the 
laboratory.
    Senator Dorgan. Senator Feinstein, might I interrupt for a 
moment?
    Senator Feinstein. Certainly.
    Senator Dorgan. I'm--would you submit a report to this 
subcommittee on that $200 million--you said that it was a $200 
million difference?
    Dr. Miller. Yes, it's about $280 million total, including 
Federal funding. But yes, I'll be happy to.
    Senator Dorgan. Could you submit a report that outlines 
those costs, those added costs, so that we understand it?
    Dr. Miller. Yes, sir.
    Senator Dorgan. And let me ask one other question, if I 
might. What--is any of this applied overhead that is----
    Dr. Miller. Let's see--those costs are collected through 
overhead so that it makes it look like the laboratory is more 
expensive in an overhead, even though we actually haven't added 
in the overhead people, and the fact of the 2,000 people, 
roughly two-thirds, are being reduced out of the overhead, or 
support side of the laboratory. So, we're actually reducing the 
number of people in the overhead, but the overhead costs are 
going up.
    Senator Dorgan. The reason I ask the question is there's a 
lot of overhead expenditures applied--or overhead charges 
applied--to various Federal money that moves out, and so----
    Senator Feinstein. Well, but I think there were a lot of 
unintended consequences of this. And that's what concerns me. I 
don't think the people that made these decisions really 
understood that if they did this, there would be $47 million in 
additional costs for healthcare, that there would be fees that 
would go up, and the way these fees went up, and that the tax-
exempt status of the University was going to change, so that it 
is a very hefty tax burden that's put in there now.
    Dr. Miller. And Mike could give you a similar story for Los 
Alamos.
    Senator Feinstein. See, this concerns me. And the problem 
was, as I understood it, from what I overhear, is the concerns 
over security at Los Alamos, in order to compete for the 
contract, you had to provide a different management structure 
from what had existed in the past--stop me if anybody thinks 
I'm wrong.
    Senator Domenici. You're right.
    Senator Feinstein. Therefore, you took on all of these 
added costs by bringing in the private sector in a joint 
venture, which may or may not have been a good idea, I can't 
pass judgment on it. But one thing we know is there certainly 
are greater costs.
    Senator Dorgan. Senator Feinstein, I'm going to ask Los 
Alamos to submit the same report that I've asked of Lawrence 
Livermore, with respect to----
    Dr. Anastasio. Yes, sir, we'll be happy to do that, Mr. 
Chairman.
    Senator Feinstein. So, that when the President actually 
gave us a budget that was $55 million less--less than last 
year--just for, that's just for Lawrence Livermore, right?
    Senator Domenici. Yes.
    Senator Feinstein. Just for Lawrence Livermore, that really 
put them behind the 8-ball with these other costs. Is that a 
correct interpretation?
    Dr. Miller. Yes, ma'am, that's exactly right.
    Senator Feinstein. And it seems to me that the 
administration has to take into consideration that when we go 
this way, it's going to cost more, and those costs have to be 
met. And that we also have to know that it's going to cost 
more.
    So, the result is, I don't know whether these are senior 
scientists, whether they're junior people--but to quote you, 
they are highly trained scientists and engineers, that are now 
thrown into a job market--so let me ask you, between the three 
institutions, how many highly trained scientists and engineers 
are now being thrown into the job market? Being involuntarily--
    Senator Domenici. Over what period of time? Three years?
    Senator Feinstein. Well, this--no, this last year.
    Senator Domenici. Oh.
    Dr. Anastasio. Yes, at Los Alamos, we've reduced the 
workforce by a little over 2,000 people over the last 18 
months, and I would say, a little less than half of that number 
are technical people.
    We were able to do that through an involuntary--a voluntary 
program. We did not have to do an involuntary, as George is 
doing, and in other, other turnover--managing the turnover, the 
normal turnover, without replacing people that leave, but 
year--I would say close to 1,000 people----
    Senator Feinstein. Okay.
    Dr. Anastasio [continuing]. With a technical background, 
over the last 18 months.
    Senator Feinstein. And, Mr. Miller, could you comment--
answer that same question?
    Dr. Miller. Yes, again, we have lost--by the end of this 
fiscal year, relative to the beginning of 2007, so again, 
roughly 2-year period, we will have lost 2,000, of whom about 
500 are highly skilled engineers and scientists.
    Senator Feinstein. Mr. Hunter.
    Dr. Hunter. Thank you, Senator.
    In the weapons program, we've actually reduced the 
workforce by about 500 or 600 people. The net number that 
exited the laboratory was more like 200 or 300, and of that, 
about half were scientists and engineers. The reason our 
numbers are smaller is because we added a lot of other work 
from other agencies to make up for some of the downfall in 
nuclear weapons.
    Senator Feinstein. All right, so now we have thousands of 
people floating around, when we know there's cyber warfare 
going on, there are all kinds of intrusions, there are all 
kinds of efforts to capture these scientific secrets. And I 
think it's really problematic.
    Senator Dorgan. Dr. Hunter.
    Dr. Hunter. I may have been--I should clarify. In our case, 
we handled that reduction by normal attrition and limited 
hiring, as opposed to laying people off.
    Senator Feinstein. So, you didn't lay anybody off?
    Dr. Hunter. We did not lay anybody----
    Senator Feinstein. Okay.
    Dr. Hunter. This year we've laid off a few tens. I wanted 
to clarify that, thank you.
    Senator Feinstein. Thank you.
    Senator Dorgan. Senator Domenici.
    Senator Domenici. Yes.
    Senator Dorgan. Thank you.
    Senator Domenici. I wondered if Tom D'Agostino--I know 
you're not at the witness stand, but do you have any 
observations about this last 10 minutes of testimony?
    Mr. D'Agostino. Absolutely.
    Senator Domenici. That might be helpful to us?

                 SCIENCE AND TECHNOLOGY FUNDING TRENDS

    Mr. D'Agostino. I think there's at least a sense after this 
discussion that the administration is not interested in science 
and technology--I want to clarify that right off the bat. Going 
back----
    Senator Feinstein. Who said that?
    Mr. D'Agostino. Well----
    Senator Feinstein. We didn't say that.
    Mr. D'Agostino. We do have a problem in science and 
technology, there's no question about it. I think it has to do 
with the levels of resources that ultimately end up at the 
institutions. And what we're seeing here, and I think maybe Tom 
Hunter alluded to it, it's the natural tension between 
maintaining a 50-year-old nuclear weapons infrastructure and 
dealing with flat budgets. This year is an exception--we 
requested about $9.1 billion or so for the NNSA. In prior 
years, we were fairly consistent asking for money at about the 
$9.3 billion range.
    And this subcommittee's been very supportive of, there's no 
question about it, the science and technology program. But when 
things get through, we've had a year-long continuing resolution 
in fiscal year 2007, we had an Omnibus last year, and the $9.3 
billion typically gets reduced to the $9.1 billion range. 
That's been the trend over the last 2 years.
    And so now we have a flat budget over the last few years. 
And as our facilities get more expensive to maintain, there is 
going to be reductions elsewhere.
    What we're trying to do is aggressively reduce our fixed 
costs--those costs that are kind of below the radar, and George 
alluded to it when he talked about a two-thirds reduction in 
the workforce.
    Since it's typically unpopular to ask for more money in 
nuclear areas--and we've seen 3 years worth of relatively flat 
budgets--we're trying to aggressively go after and reduce those 
fixed costs, so we can reinvest our resources into this 
infrastructure. And it's a hard management problem, there's no 
question about it.
    I think we all agree that we want to reduce the costs of 
this program, without dropping the ball on the science and 
technology side. And what you're hearing, I believe, are those 
challenges we face.
    Senator Dorgan. Yes, well, but let me just also say, as I 
said before, this subcommittee doesn't just deal with you, this 
subcommittee deals with a range of other things, and we have a 
budget that is sent to us without a lot of forethought, in my 
judgment, on another large area, and that is water. It's not 
nearly as large as nuclear. But the implication that this 
subcommittee should take a look at this country's water needs, 
and cut $1 billion out of water investment is preposterous.
    Mr. D'Agostino. Right.
    Senator Dorgan. We're not going to do that. So, we also 
have a balancing problem, and it's because we've gotten a 
budget submitted to us that does not meet this country's needs.
    And so, I think this subcommittee is very strongly in 
support of science.
    Mr. D'Agostino. Absolutely.
    Senator Dorgan. And will be. But, we are also confronted 
with a budget that, in many ways, I think, is playing a game. 
We know what the water projects are, we know which ones have 
been started, we know which ones have to be invested in to be 
completed. And yet there's a bit of game being played, I think, 
in budget--Senator Domenici was chairman of the Budget 
Committee for many years, so he will recognize these issues.
    This is not our only responsibility, but it's a very 
important one. And I just want to make a point, that we're put 
in a bad position by extraneous events, when the President 
sends us a budget and says, ``Let's cut water projects by $1 
billion,'' and that will not happen. This subcommittee's not 
going to do that.
    So, we're going to try to do everything we can to make sure 
that we provide sound funding for science, and I've already 
made a statement on how I feel about the national laboratories. 
Senator Domenici, do you want to make final comment?
    Senator Domenici. Yes, I just want to say, it does bother 
me that we end up testimony, seemingly, on a low note. But I 
don't think things are really on a low note. I think the 
laboratories have done quite well, considering that we really 
are going from a cold war to a non-cold war situation, you 
know, looking back at history, when America had giant projects 
that were good for war, and then the war ended, we just got rid 
of them, we didn't have anything left over. We've done that 
before with giant science projects that helped the government--
the war ended, and we dismantled everything.
    I think we've done quite well, building this down, and only 
in the last few years has it caught up with us.
    But, I do want to say that I think you're telling us 
something, and just my interpretation--you know, if we're going 
to alter, change, or change the nuclear stockpile 
substantially--and I think you all are suggesting that we're 
probably going to--it's not going to look like it is today, in 
15 years. It's going to look considerably different. It's going 
to be much smaller--smaller numbers, smaller weapons--we're 
hoping that that also will mean that we can--it'll cost less to 
maintain them and keep them, and make sure they're reliable.
    But we're not moving head on that yet, we've solved the 
problem of not doing underground testing, and then we started 
Stockpile Stewardship out on a limb--nobody knew anything about 
it. When it was presented to me, I couldn't remember the three 
words, Science-based Stockpile Stewardship. I had to write them 
down, because they were so funny.
    Now, they've just--it's pretty obvious, what we've done, 
we've accomplished a great deal. In the meantime, we need these 
laboratories living laboratories for the future, as I see it. 
And we spent a lot of money doing that.
    But there are better laboratories for Science-based 
Stockpile Stewardship, wouldn't you think, Mr. Miller? They're 
better for it, than without it?
    Dr. Miller. Absolutely, sir. You said it very well.
    Senator Domenici. I think that's right, and I think that's 
good for the country. And we'll try our best, and we hope the 
new management teams--which were the decision of the 
administration--and I don't blame them, that was their 
prerogative, that we were going to go with the new system--I 
hope it works.
    Director Anastasio, I hope you all dedicated yourself to 
better management at Los Alamos, and I think it's gotten a 
little better. I don't have to say that about Director Hunter, 
you've always had the best management, you didn't even have to 
lay off any people--that comes with good management, 
incidentally.
    And Director Miller, I'll find out more about you when I 
come to see you, okay?
    Thank you all, very much.
    Senator Dorgan. The interesting thing, Senator Domenici, is 
that we have a lot of nuclear weapons, we talk a lot about 
them, we can't possibly use one, ever, without catastrophic 
results for our planet.
    Senator Domenici. Right.
    Senator Dorgan. We've signed up, as a country, to go to 
zero nuclear weapons at some point in the future. We will not 
do that, of course, until it is--if ever--it is determined to 
be safe and secure for our country to do that.
    But, I think the other side of this subcommittee is nuclear 
non-proliferation, which is very important, and we will be 
talking more about that at a later time, as well.

                     ADDITIONAL COMMITTEE QUESTIONS

    At this time I would ask the subcommittee members to please 
submit any questions they have for 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
    Question. Two months ago you named Dr. David Crandall as NNSA's 
Chief Scientist. In your announcement of his promotion, you stated that 
you ``outlined your expectations for Dave in this new challenging 
assignment.''
    What are your expectations and can you please tell me how you 
intend to measure his success in implementing a comprehensive science 
strategy for the labs?
    Answer. Dr. Crandall will advise me and represent the NNSA on 
science and technology issues for national security. He will work with 
NNSA program managers and with our national laboratories to define the 
nature of science and technology that NNSA can advance for national 
security and how to do that in collaboration with other parts of DOE 
and other agencies that have synergistic mission needs to those of 
NNSA. Measures of success will include defining strategic documents 
with more specifics on science and technology and agreements with other 
agencies on how to share resources to advance our respective mission 
needs.
                           advanced computing
    Question. When we faced the decision to proceed with the science-
based Stockpile Stewardship program, it was decided that the labs would 
need to develop advanced computing capabilities that didn't exist at 
that time. I recall there was significant discussion regarding the 
potential to develop this capacity.
    Fifteen years after we initiated this effort can you tell me if we 
have met or exceeded our computing goals at the time? What has this 
meant to Stockpile Stewardship?
    Answer. NNSA has exceeded its computing goals in terms of both the 
platforms and the codes. In 1996, the Accelerated Strategic Computing 
Initiative, or ASCI, originally planned for a 100 Tera-Flop (TF) entry 
level system to support a high-resolution, end-to-end, 3D simulations. 
The original goal of 100TF was achieved in fiscal year 2005 with 
delivery of the ASC Purple machine. We also acquired the BlueGene/L 
machine clocked at 360TF for science applications.
    Additionally, in 1996, the 100TF goal centered around performing a 
single calculation that was highly resolved enough to distinguish 
physical error from numerical error. The realization of Purple was 
accompanied by detailed simulations that revealed physics not 
previously seen in the 50-plus years of computational science. Today, 
we not only have the capability increase the physics basis in our 
simulations for annual assessments and other production work, but also 
have begun to adopt the codes for broader national security 
applications (i.e. threat reduction, secure transportation).
    Question. What has this meant to U.S. leadership in computing?
    Answer. To illustrate the program's impact on computing at the 
high-end: on the latest (Nov., 2007) Top 500 list of supercomputers 
around the world, the top 12 platforms shown have directly benefited 
from ASC-funded architectures. Of those 12, 9 are located in the United 
States. The United States has the top slot, with BlueGene/L at 478.2 
teraflops (as measured on the Top500 benchmark), almost three times 
faster than the second-place machine. Of the entire top 500, fully 38 
percent have major components that derived from ASC investments, and 25 
percent employ internal networks developed through ASC collaborations 
and projects.
    Your Advanced Computing and Simulation budget fails to provide any 
specifics regarding the proposed computer acquisition budget, including 
any mention of the Roadrunner platform and the status of the Sequoia 
platforms.
    Question. Can you provide the specific details as to how much you 
have budgeted for each system and the status of each platform? What are 
the out year acquisition needs and how will this budget support the 
preferred alternative you have proposed?
    Answer. The program has budgeted $25.9 million in fiscal year 2009 
to cover the final payments for Roadrunner. Since the Sequoia 
procurement is about to release a Request for Proposals, a final 
payment schedule has not been negotiated. However, the funding profile 
for fiscal year 2009-fiscal year 2012 totals about $220.0 million. In 
addition, the program has a need to replace the Purple platform that 
supports the current National User Facility and has directed the LANL-
SNL Alliance for Computing at Extreme Scales (ACES) team to begin the 
procurement process that will result in a platform, currently referred 
to as Zia, to be delivered in fiscal year 2010. While the program set 
an initial funding target of about $66.0 million for Zia, we are 
reevaluating the ability for that budget level to meet mission needs.
    It is my understanding that the NNSA intends to acquire a third 
computer known as ``Sequoia'' for Livermore to support the Blue Gene/L 
and Purple platforms. Your budget is silent on this point as far as I 
can tell.
    Question. Did the NNSA ever conduct a competitive solicitation for 
this new acquisition for Livermore?
    Answer. The program documented a mission need in March 2008 for a 
petascale platform to address uncertainty quantification. That led to a 
decision to procure a system, code-named Sequoia, to be hosted at LLNL. 
While being housed at LLNL, it is not a follow-on to BlueGene/L or 
Purple. Sequoia is being acquired via a competitive process where the 
selection will be based on best value, determined by a combination of 
price and technical features related to NNSA workload. The release of 
the Request for Proposals is imminent and five major vendors have 
expressed interest in bidding.
    Question. Did the laboratory or the NNSA consider any other 
vendors, other than IBM, regarding other technology or cost scenarios 
for this acquisition?
    Answer. LLNL will evaluate all proposals received in response to 
the Request for Proposals and negotiate a contract with the winning 
bidder based on best value to the government.
    Question. All of the most recent computing platform acquisitions 
are IBM products. What is your plan to consider alternative vendors or 
platforms to ensure we are considering the best alternatives in the 
business?
    Answer. NNSA has directed LLNL to conduct a competitive 
solicitation for Sequoia, and to employ the traditional process of 
commissioning a tri-lab committee to advise the source selection 
authority on technical responsiveness of the bids.
    Question. In the fiscal year 2008 Omnibus, language was included 
directing both the NNSA and the Office of Science to establish a joint 
advanced computing and algorithm R&D program. The objective of this 
language was to restore a world leading R&D capability in high 
performance computing architectures. The United States won't maintain 
its world leading role, if we don't continue to support research.
    What is the Department doing to establish this capability and what 
goals have been set? Also, what is the strategy for achieving these 
goals?
    Answer. The Department has established the Institute for Advanced 
Architectures and Algorithms (IAA). The goals of IAA have been set to:
  --Undertake focused research and development in partnership with 
        industry and academia on key impediments to high-performance 
        computing;
  --Promote the integrated co-design of architectures and algorithms;
  --Develop and simulate prototypes to demonstrate advantages that 
        allow application developers and algorithm researchers to 
        explore advanced architectures; and
  --Train future generations of computer engineers, computer scientists 
        and computational scientists.
    Both the DOE Advanced Scientific Computing Research (ASCR) and the 
NNSA Advanced Simulation and Computing (ASC) offices have approved the 
goals, structure and management of the IAA, including the requirement 
for every proposed IAA project to be submitted to ASCR and ASC for 
joint peer review and approval. Currently there are two technical 
workshops on memory and interconnect technologies being planned for the 
summer and the third on algorithms in the fall.
    Question. As you know, I have had great concern about NNSA's high 
performance computing strategy. In your effort to reduce the computing 
investment at our national labs, you have directed that Sandia and Los 
Alamos form a partnership in computing. The Labs have completed the 
negotiations and codified this deal in a Memorandum of Agreement.
    Since your budget request for computing is extraordinarily vague 
can you explain what your plans are for this joint computing effort, 
how the NNSA will utilize it, what type of investments will be made and 
how this is an improvement over the existing three lab strategy?
    Answer. The joint LANL-SNL MOU, formally establishing the Alliance 
for Computing at Extreme Scales (ACES), was undertaken to capitalize on 
each labs strengths as the preferred alternative was implemented and 
present an icon and entry point into the labs for academia and industry 
working with the ASC program at the New Mexico labs. The most immediate 
and visible impact will be that ACES will host the next National User 
Facility for ASC capability computing with the design team being 
directed by SNL and the operations team being led by LANL. The program 
expects a similar division of labor as future systems are acquired by 
ACES. As the program works to identify efficiencies we look to preserve 
and accentuate our strengths. ACES emphasizes the strengths resident in 
the New Mexico labs for current and future national security 
applications.
    Question. As you are well aware I believe the NNSA has made a 
serious mistake in not pursuing a trilab advanced computing strategy to 
ensure that each lab works to develop cutting edge architectures as 
well as to support the world's best computer simulation capabilities.
    Despite the fact that the NNSA has proposed to reduce computing 
investment as part of the preferred alternative, are you willing to 
keep an open mind to alternative approaches recognizing that computing 
has opened up significant modeling capabilities for the labs?
    Answer. The NNSA labs are world leaders in designing, acquiring and 
operating supercomputers. Our approach for ensuring cost-effective, 
efficient, and sustainable operations that still met the needs of the 
Stockpile Stewardship program has led us to make some tough decisions. 
We have sought, and will continue to seek, technical advice from 
outside the headquarters as we develop strategic guidance and direct 
laboratory investments.
                  bush administration--weapons policy
    Question. Mr. D'Agostino in your statement, you said that in 2004 
the Bush administration ordered the nuclear weapons stockpile to be cut 
in half and then ordered an additional 15 percent cut just this past 
December. I believe critics of the President forget these facts. Many 
also have forgotten, or were never aware of the fact that this 
President recommended a shift in the role of the deterrent in the 2001 
Nuclear Posture Review.
    Can you explain to the subcommittee what this shift has been and 
the significance of this policy?
    Answer. The 2001 Nuclear Posture Review addressed ``strategic 
capabilities'' not just nuclear forces. Its basic findings were:
  --Russia is no longer an immediate threat--this fact itself has led 
        to dramatically reduced U.S. reliance on nuclear weapons, and 
        enabled very substantial reductions both in deployed forces and 
        the overall nuclear stockpile.
  --Precision conventional strike and missile defenses will further 
        reduce reliance on nuclear forces.
  --But nuclear weapons are still an important element of national 
        security strategy.
  --Substantial nuclear arsenals remain, and proliferation concerns 
        grow--we can no longer predict when and where major new threats 
        will emerge.
  --Nuclear force planning is thus no longer threat-based (i.e., on 
        cold war nuclear targeting model) but on broader concerns of 
        defense policy.
  --The defense R&D and manufacturing base, including the nuclear 
        weapons infrastructure represented by NNSA's national 
        laboratories and production facilities must be able to respond 
        on needed timescale to emerging threats.
    The ideas reflected in the 2001 NPR reflect a major 
reconceptualization of how strategic capabilities including nuclear and 
conventional strike forces, the supporting defense infrastructure and 
missile defenses interrelate in advancing the security interests of the 
United States and its allies.
    Question. Consistent with the fiscal year 2008 Omnibus, the NNSA 
has adopted the congressionally directed level of 50-80 pits per year 
production capacity as the preferred alternative. Can you please 
explain the significance of this shift and the budgetary impact that 
will result?
    Answer. The significance of the shift to 50 to 80 pits per year 
production capacity is acknowledgement by NNSA and the Department of 
Defense that any future requirements, to include transformation of the 
nuclear weapons stockpile or life extensions of warheads, can be 
managed within the production levels that the capacity can support over 
a specific time period. The reduced capacity requirement also opens up 
the potential for upgrading/modifying the plutonium facility at the Los 
Alamos National Laboratory instead of building a completely new 
facility. The cost difference (savings) between building a new 
plutonium facility for pit production and upgrading/modifying the 
existing plutonium facility (PF-4) at LANL is estimated to be more than 
$1 billion. Either option requires a new capability for chemical and 
metallurgical activities to support pit manufacturing and other 
plutonium operations. The shift, however, comes with additional risk of 
both making the required improvements within an operating nuclear 
facility and meeting any future unknown stockpile requirements where 
time may be critical in sustaining the nuclear deterrent due to 
capacity constraints.
     chemistry and metallurgy research replacement (cmr-r) project
    Question. The NNSA's preferred alternative has proposed to build 
all three phases of the CMR-R facility at Los Alamos. There is a lot of 
misinformation being spread about this facility and its role as a 
production facility.
    Can you tell me whether or not the CMR-Replacement facility will be 
used to manufacture pits? If not, where will pits be manufactured?
    Answer. The CMR-R Nuclear facility will not be used to manufacture 
pits, but will support pit production through the availability of a 
vault to hold material and pits and through the required analytical 
chemistry and metallurgical analysis that ensures specification of 
material during production is being met. Pits will be manufactured 
within the Technical Area 55 (TA-55) plutonium facility (PF-4).
    Question. What is the proposed role of the CMR-R and why can't the 
existing facility be used? Also, why is it important that CMR-R include 
a Category II nuclear facility behind the security fence?
    Answer. The proposed role of the CMR-R is to provide analytical 
chemistry support currently conducted in CMR and add a vault for 
storage of material to support pit manufacturing and consolidation of 
plutonium missions. The existing CMR facility was built over 50 years 
ago and has significant facility infrastructure issues that impact 
personnel and safety. In addition, since its construction, further 
seismic analysis has revealed a seismic fault running under the 
building which has caused significant reduction in activities to 
maintain the safety basis. Upgrading the facility to meet modern 
seismic standards for nuclear facilities has been assessed as not being 
cost effective.
    A Category II security facility is required due to the security 
requirements for a facility operating with the amount of special 
nuclear material required to accomplish the NNSA mission. The amount of 
activities using and handling special nuclear material and the required 
load of material within the vault necessitate this security. The 
Radiological Laboratory and Utility Office Building (RLUOB), the other 
facility within the CMR-R project, is only capable by design of 
handling very small gram quantities of special nuclear material.
    Question. The budget request states that the CMR-R project total 
cost is estimated to be $2 billion, which is an increase from the 
initial estimates of $1 billion. The budget doesn't provide a specific 
justification for this increase.
    Can you please explain why this estimate has increased?
    Answer. The basis for the cost the CMR-R is being developed 
presently; NNSA does not envision having a validated cost baseline 
until fiscal year 2010. Specific quantification of the overall costs 
escalation cannot be performed now, but the factors that drive the 
increasing cost of CMR-R, especially for the Nuclear Facility, can be 
identified. These factors include: building commodity and construction 
support cost escalation in the marketplace (e.g., rapid increasing 
costs for steel, concrete, glass, formed shapes, like equipment and 
pipe, and fuel); facility structural design changes to accommodate 
higher seismic loads and enhanced security threats (``the design basis 
threat'') recognized since Critical Decision-1 in May 2005; additional 
analysis of the detailed, specific quality assurance, safety, and 
security requirements for building nuclear facilities (e.g., the 
interactions associated with fire protection and ventilation systems, 
subject to severe seismic criteria); and continued schedule delays, 
which add carrying costs and future escalation.
           economics of the proposed uranium process facility
    Question. Administrator D'Agostino, as you are well aware the CMR-R 
facility has come under intense scrutiny with Congress even prescribing 
the range of production in the fiscal year 2008 bill, which was 
included in your preferred alternative. I am quite confident that at 
the end of the day, the project will be better served by the intense 
scrutiny and review.
    I am concerned, however, that the Uranium Process Facility and the 
new Kansas City Plant has not received the same level of review as the 
CMR-R Facility.
    It is my understanding that the UPF Facility will cost between $1.4 
billion and $3.5 billion and will support uranium mission of the 
complex. Also, I understand the Cost Analysis Improvement Group 
suggested that an alternative site other than Y-12 might improve the 
economics of this project.
    Has the Department considered the precise throughput that will be 
required for the UPF to support the LEP or RRW mission and has this 
been vetted within other relevant Federal agencies.
    Answer. The UPF is being designed with a throughput to support the 
most likely range of stockpile alternatives being considered jointly by 
the NNSA and DOD at this time. This throughput capacity supports future 
nuclear weapons stockpile requirements for either an LEP or an RRW 
strategy. The NNSA has worked closely with appropriate offices in the 
Department of Defense to properly define stockpile requirements 
affecting UPF throughput.
    Question. What other sites are being considered and how will this 
impact the mission?
    Answer. Uranium operations are currently accomplished at the Y-12 
National Security Complex (Y-12) in Oak Ridge, TN. While Y-12 is 
designated as the preferred uranium center alternative in the Draft 
Complex Transformation Supplemental Programmatic Environmental Impact 
Statement, NNSA continues to evaluate two alternative sites as the 
potential locations for the uranium mission. These alternative sites 
are the Pantex Plant (PX) in Amarillo, Texas, and the Savannah River 
Site (SRS) in Aiken, South Carolina. If uranium operations were moved 
from Y-12 to either PX or SRS, the primary impacts on the NNSA mission 
are the potential risks and added costs of relying on aging Y-12 
facilities during an extended transition period, and the loss of 
workforce expertise that occurs when experienced staff choose not to 
relocate. Current planning schedules show that moving the uranium 
mission from Y-12 to either SRS or PX requires an additional 5 to 7 
years of transition operations of existing Y-12 facilities while 
replacement facilities are completed. After the transition, regardless 
of which site is chosen, the uranium processes required to support the 
NNSA mission would be qualified and fully functional.
                            enhanced surety
    Question. For the past several years, Congress has provided 
additional funding in the Engineering Campaign to support advanced 
surety research in an effort to encourage the Department to pursue 
state of the art use control technology to prevent the unauthorized use 
of our weapons.
    This is the first year that the administration has included funding 
to support advanced surety research in its request. How will this 
funding be spent and what is your goal and timetable for developing and 
deploying this state-of-the-art technology?
    Answer. The administration has developed advanced surety 
technologies for several years through the Engineering Campaign. The 
W76-1 life extension program (LEP) incorporates improved safety 
features, modern weak-links and strong-links, that were developed in 
the Campaign. Currently funded advanced surety activities include a 
laser-based advanced initiation system that, when fielded, will 
eliminate a safety concern for certain weapons in the existing 
stockpile. Additionally supported work includes security-related 
technologies that will improve the Department's response to current 
terrorist threat scenarios. The surety technologies included in the 
reliable replacement design would have provided greater performance 
margin against these postulated threats. All of these advanced surety 
technologies are fielded based on their technological maturity, and 
while some require an LEP to implement, others can be fielded without 
the need of a major refurbishment of a weapon platform.
    Question. Are you aware of any statutory prohibitions to prevent 
the NNSA from integrating use control technology into our existing LEP 
program?
    Answer. The current statutory definition of a Life Extension 
Program implies use of, or modification of, an existing pit or 
secondary (50 U.S.C. sec. 2529). Therefore, if a potential use control 
technology would require the manufacture of a new pit or secondary, 
that technology would not be allowed in a Life Extension Program. Any 
other use control technologies that can be used in concert with an 
existing pit or secondary would be allowed under the Life Extension 
Programs.
    Question. Knowing that our present warheads are going to be in the 
stockpile for many years, maybe decades more, and with the growing 
threat of terrorist extremists, are we doing enough to implement modern 
surety technologies to keep these warheads secure?
    Answer. Weapon security will always be met through a combination of 
engineered features within the weapons and the appropriate physical 
security measures, and, therefore, future surety improvements must 
balance the tradeoffs between long-term and short-term costs, time to 
implement and overall effectiveness. In addition, before any surety 
improvements can be implemented, the nuclear weapons laboratories must 
ensure that the weapon can be certified without the need of future 
underground nuclear testing. External technologies can provide surety 
improvements in a relatively short time and at a low cost compared to 
either an LEP or replacement weapons but may have significant 
operational impacts and limited effectiveness. An LEP or replacement 
designs provide the opportunity for the greatest surety improvement but 
with a longer development time and additional work required to certify 
the nuclear package without underground nuclear testing. While we have 
made progress in fielding technologies to enhance the surety of the 
stockpile, some of the opportunities for greatest improvement have not 
made it into the stockpile to include the W80 LEP and the Reliable 
Replacement Warhead. The surety of the stockpile is only as good as the 
weakest link. Therefore, to ensure the security of the enduring 
stockpile, we maintain a program to evaluate the stockpile, system-by-
system, and implement the appropriate level of surety for each system, 
accounting for all other aspects of weapon security for the system 
being evaluated.
                  lanl performance--on the right track
    Question. Administrator D'Agostino, we are approaching the 2 year 
anniversary of the new management team's take over of Los Alamos. It 
appears to me that things are on the right track with several 
deliverables met in pit manufacturing, supercomputing, and improved 
site security.
    What is your impression of the operations at LANL?
    Answer. I agree that there has been progress in meeting goals at 
Los Alamos in the areas that you cite. LANL has continued to meet 
mission deliverables and, in particular, is up-to-date in meeting their 
deliverables in pit manufacturing. The supercomputing deliverables for 
the Roadrunner computer system are being met, and LANL is working with 
us to understand the upgraded power and cooling needs of their 
computing facility. Their site security objectives have been largely 
met, including a balanced inventory of special nuclear material and the 
reduction of the amount of CREM (Classified Removable Electronic Media) 
as well as its improved management. LANL, by all measures, continues 
its tradition of outstanding science and technology. Recent positive 
progress has been made in the management of their LDRD (Laboratory 
Directed Research and Development) program to ensure that it is better 
aligned with strategic directions. There are some areas that still need 
improvement. Management costs have gone up since the new team has taken 
over and have added to the cost of doing business. Hiring is a crucial 
area to ensure future scientific success but has been slow because of 
budget difficulties. Overall, there has been steady improvement in most 
operational areas since the management transition.
               los alamos neutron science center (lansce)
    Question. Administrator D'Agostino, as you are aware, I have sent 
you a letter encouraging you to better define the long term science 
strategy and investment in the our national labs as part of the Complex 
Transformation effort. I believe strongly that the NNSA must identify a 
long term science strategy for the NNSA labs. More specifically, I also 
suggested you develop a refurbishment strategy for LANSCE.
    Do you agree that the NNSA must have a long term science 
infrastructure investment plan?
    Answer. Yes, we agree that a long term science infrastructure plan 
is required. The success of the stockpile stewardship program is a 
testament to the execution of the science investment strategies that 
were crafted in the 1990s. These strategies brought us the modern 
computational systems and experimental facilities that can be 
integrated to allow us to maintain the stockpile without underground 
testing. We are also seeing the closure of Significant Finding 
Investigations that had been open for many years because the tools were 
not available or capable. Now they are. In the immediate future we see 
the fruition of many more of the investments such as DARHT second axis, 
ZR, Omega EP, and NIF. Along with LANSCE and smaller facilities, these 
science tools will significantly advance our capability to certify and 
assess the stockpile. Presently, we are engaged in developing science, 
technology and engineering roadmaps. Many of these have pointed to the 
need for LANSCE during the next 10 years or so to address key nuclear 
physics, hydrodynamic and material issues. Science facility needs 
beyond the next 10 years is being studied but will require more results 
from the planned work in the next 5 years that may identify gaps. Other 
national missions may also be weighed in defining new science 
facilities at laboratories.
    Question. Do you believe LANL needs a new science facility to 
continue supporting the ongoing stockpile stewardship mission as well 
as support non-weapons scientific research?
    Answer. The NNNA needs LANSCE for the future to support critical 
stockpile stewardship missions; however, we have not yet determined a 
driving need within NNSA for a new science facility at LANL. LANL has 
discussed ideas that could provide benefit to other science missions 
and also to NNSA. LANL plan some major technical workshops to refine 
their ideas, and they will continue to bring these forward to the 
Department of Energy and NNSA. NNSA believes that LANL will continue to 
have exciting science missions within NNSA either with or without a new 
facility.
    Question. When will NNSA pursue a CD-0 for the LANSCE project?
    Answer. NNSA granted CD-0 for the LANSCE refurbishment project in 
December 2006, and is working to complete CD-1 by the first quarter of 
2009.
                      materials consolidation--mox
    Question. Can you please summarize for the subcommittee where the 
NNSA is in terms of consolidating special nuclear material and what the 
Department will gain as a result?
    I strongly believe that if the NNSA is going to consolidate the 
special nuclear material, it must also develop a final disposition 
strategy for the excess plutonium. Today, the current disposition 
pathway is the MOX plant at Savannah River.
    Question. The MOX plant serves as our only plutonium disposition 
path forward. Is the Department considering any other alternatives? 
Alternative paths were considered, both by the Department of Energy and 
outside experts, and ultimately rejected as not the most cost effective 
approaches.
    Answer. No, the Department is not considering any other alternative 
plutonium disposition paths for the approximately 43 metric tons (MT) 
of surplus weapon-grade plutonium planned to be processed at the MOX 
facility. While the Department is planning to use the Savannah River 
Site's H-Canyon Complex to dispose of up to 5 MT of impure, non-pit 
plutonium, the H-Canyon Complex is not suitable to dispose of large 
quantities of pure plutonium.
    Question. If Congress were to cancel the MOX project, how much 
longer would it take to develop and implement another disposition 
pathway?
    Answer. If the MOX project were cancelled, the Department would 
have to reevaluate viable alternatives for the disposition of surplus 
weapon-grade plutonium. The Department has previously considered 
immobilization to be a possible alternative and would likely reconsider 
it as a disposition path for the approximately 43 MT of weapon-grade 
plutonium currently planned for the MOX facility. Research and 
development of a ceramic immobilization process was halted 7 years ago 
and restarting such a program now would require at least 10-12 years to 
complete the necessary R&D, repository licensing, design and 
construction before such a facility were able to become operational in 
the 2018-2020 timeframe, assuming essentially unconstrained funding 
were available to support such an aggressive schedule. (Total project 
costs for MOX immobilization were estimated to be roughly equal, there 
is much more technical and financial risk associated with 
immobilization because the technology is less mature.) The amount of 
time necessary to immobilize this large quantity of weapon-grade 
plutonium would extend beyond the planned operating life of the Defense 
Waste Processing Facility (DWPF) at the Savannah River Site and an 
insufficient quantity of high-activity waste remains at DWPF to 
immobilize this quantity of plutonium. This would force consideration 
of shipping surplus plutonium to the State of Washington and performing 
some, if not all, of the can-in-canister immobilization operations at 
the Waste Treatment Plant (WTP) at Hanford.
    Question. What is the earliest you believe it could be operational? 
How much more would it cost?
    Answer. As I mentioned, it would take a minimum of 10-12 years to 
complete the necessary R&D, repository licensing, design and 
construction before an immobilization facility could become 
operational.
    Cost estimates for immobilization are highly uncertain since the 
technology supporting the immobilization of plutonium is still in the 
R&D stage and the immobilized waste form has yet to be qualified for 
acceptance in the planned geologic repository. It is likewise 
impossible to estimate, with any reasonable accuracy, the cost of 
shipping surplus plutonium to the State of Washington and performing 
some, if not all, of the immobilization operations at the Waste 
Treatment Plant at Hanford. Moreover, if the Department were to change 
its disposition program midstream and cancel the MOX project, the cost 
implications would be significant. With construction already 
significantly underway, there would be some physical stabilization of 
the construction site to bring an orderly close to the ongoing work at 
the site. An immobilization facility would still require some form of 
pit disassembly capability. Canceling the MOX program would also 
complicate the Department's proposed nuclear materials consolidation 
strategy, potentially forcing the Department to complete expensive 
security upgrades at the Hanford Site (about $200 million) and Pantex 
(about $27 million), and requiring the Department to continue to pay 
storage costs for plutonium estimated to be hundreds of millions of 
dollars per year, in addition to the possible payment of economic and 
impact assistance of up to $100 million per year to the State of South 
Carolina for failure to meet the MOX production objective as defined by 
section 4306 of the Atomic Energy Defense Act.
                         nnsa science strategy
    Question. Administrator D'Agostino, your testimony makes a thorough 
case for the consolidation of materials, mission and manpower. However, 
in the 13 pages of written testimony, I only find the reference to 
science in a handful of examples, primarily focused on past scientific 
achievements. There is absolutely no mention of a scientific path 
forward or a strategy to sustain the scientific excellence at the labs.
    Could you please explain to the subcommittee, what this budget 
provides in terms of long term planning to sustain the science 
capabilities at the laboratory?
    Answer. With respect to Science and Technology at the NNSA 
Laboratories, my most important new initiative is Special Focus Area 4: 
Future Vision and Mission for the NNSA and its Laboratories. I believe 
that the NNSA laboratories can play a central role in national security 
R&D, and complimentary to the transformation of the weapons complex, I 
would like to transform the science and technology base from one 
primarily focused on nuclear weapons, to one which also meets the 
broader national security needs of the Nation. I expect a more detailed 
discussion of this vision in the budget formulation we are currently 
preparing. We expect that this exciting new direction will attract new 
talent to the laboratories, thus allowing us to execute our core 
mission at the same time bring scientific innovation to solving 
emerging national security issues.
                      reliable replacement warhead
    Question. Administrator D'Agostino, this budget provides $10 
million to advance the feasibility work on the RRW study, but not 
enough to complete the research. It is my understanding that an 
additional $55 million is needed to complete this phase of study.
    Can you tell me what will be gained if Congress provides the full 
$65 million needed to complete the feasibility study? What would then 
be the next steps?
    Answer. The purpose of the joint Department of Defense and National 
Nuclear Security Administration Reliable Replacement Warhead Phase 2A 
study is to develop the detailed cost, scope and schedule baseline for 
a Navy Submarine Launched Ballistic Missile warhead application. This 
information is needed by the National Nuclear Security Administration, 
the Department of Defense, and the Congress in order to make informed 
decisions on whether and how to proceed with development and 
production.
    Question. Please clarify for the subcommittee whether or not you 
have the authority to expend funds to support the engineering phase of 
the RRW. Under existing authorities can the NNSA build a RRW system if 
it desired at this point?
    Answer. For refurbishments which use the Phase 6.X process, the 
Nuclear Weapons Council approves entry into the development engineering 
phase and the NNSA informs Congress. However for a new weapon 
development project, there are explicitly identified Congressional 
approval points. In the case of the Reliable Replacement Warhead, the 
National Nuclear Security Administration does not have authority to 
expend funds to support the engineering development phase, nor to build 
a Reliable Replacement Warhead.
    Question. Mr. D'Agostino it is my understanding that the existing 
nuclear nations are all making modifications to their nuclear weapons 
programs and we know that both Iran and North Korea have pursued a 
clandestine nuclear program for years.
    Do you believe that the completion of the RRW feasibility study 
would encourage any other nation to change their nuclear weapons 
policy?
    Answer. No, there is not one shred of evidence that U.S. nuclear 
weapons activities including our contemplation of replacement warheads 
has had any impact on either horizontal or vertical proliferation. With 
the end of the cold war came the cessation of the nuclear arms 
competition between the United States and Soviet Union in which one 
side's weapons modernization cycle generated a reaction in the other. 
Today, there is no coupling between Russian and U.S. nuclear weapons 
programs--indeed, the Russians are modernizing their nuclear arsenal 
and we are not.
    U.S. nuclear programs will not increase incentives for terrorists 
to acquire WMD--those incentives are already high and are unrelated to 
U.S. nuclear (or conventional) defense capabilities. Nor are such 
programs likely to have any impact on rogue state proliferation, which 
marches forward independently of the U.S. nuclear program. Indeed, 
there is no indication at all that very significant reductions in the 
numbers of U.S. (and Russian) nuclear weapons, and in the alert levels 
of nuclear forces, over the past two decades, coupled with no U.S. 
nuclear testing and very little U.S. nuclear modernization, has caused 
North Korea or Iran to slow down covert programs to acquire 
capabilities to produce nuclear weapons. On the contrary, these 
programs have accelerated during this period. Nor did such U.S. 
restraint convince India and Pakistan not to test in 1998, or North 
Korea in 2005. Rather, North Korea and Iran appear to seek WMD in 
response to their own perceived security needs, in part, to deter the 
United States from taking steps to protect itself and allies in each of 
these regions.
    But even more importantly, the credibility of the U.S. extended 
nuclear umbrella is a significant restraint on proliferation. Continued 
U.S. engagement in security cooperation with allies including a 
military presence, modern and flexible U.S. military forces, and the 
extension of a smaller but safe, reliable and capable nuclear deterrent 
to allies are key elements in assuring allies that they can count on 
the United States, and do not need their own nuclear forces.
    Question. Last year, Congress directed the Department to answer 
several critical questions posed by the JASON report regarding the RRW 
program and the subcommittee provided $20 million to provide answers to 
their questions.
    Does this work have application to warheads other than the RRW?
    Answer. Many of the issues raised during the JASON review of RRW 
are directly applicable to Life Extension Programs of existing systems 
and annual assessments of existing systems. The advanced certification 
sub-program as outlined in the two reports to Congress is focusing on 
those issues that are relevant to all systems that may be changed from 
the tested designs by the use of new materials, enhanced surety 
features, and component modifications.
    Question. Has the NNSA used these funds to secretly fund or 
subsidize the RRW feasibility study?
    Answer. No. The advanced certification sub-program will look at the 
certification issues raised by the JASON regarding RRW but it will 
address a sub-set of those issues that are common to legacy systems as 
well. The RRW funding line that is in the fiscal year 2009 budget is 
intended to address specific JASON issues that pertain specifically to 
the WR1 design.
                      university robotics program
    Question. What is your out year budget plan for the University 
Robotics Program.
    Answer. The University Research Program in Robotics (URPR) was 
placed in the Enhanced Surveillance sub-program of the Engineering 
Campaign. Based on funding priorities within this sub-program, it is 
the intent of NNSA to fund the URPR at about $1.8 million for the out-
years.
    Question. Do you believe this research initiative adds value to 
this program or would it be better suited with another office?
    Answer. Although the URPR has produced some worthwhile ideas and 
concepts for sensors and control systems, the weapon program does not 
consider this work to be priority.
                               z machine
    Question. Administrator D'Agostino, you have recently completed the 
$90 million refurbishment of the Z machine making it more efficient and 
with a greater research potential. I have heard that the out year 
budget requests could reduce the budget for this facility by 50 
percent.
    Is this NNSA planning to shut this facility down in the near future 
and how can you justify spending all this funding, but not operating 
the facilities?
    Answer. The Z machine at Sandia National Laboratories is an 
important part of the Stockpile Stewardship Program and has made 
important contributions to the program in materials properties, weapons 
effects, pulsed power fusion, and other areas. In the 2008 President's 
budget request, NNSA asked for $63.9 million for the Z machine, and in 
the 2009 President's budget request, NNSA asked for $64.0 million. In 
both of these years, there were additional funds requested for targets. 
In future years, the NNSA intends to request adequate funding to make 
effective use of the Z machine and meet Stockpile Stewardship Program 
requirements. There are no plans to shut down this unique, world-
leading facility.
                z machine and national ignition facility
    Question. NNSA has made a major investment in the construction of 
laboratory facilities to support the Stockpile Stewardship Program 
including the NIF at LLNL, the OMEGA at the University of Rochester and 
the refurbishment of the Z facility at Sandia. However, NNSA budget 
requests are below what is needed to fully utilize these facilities.
    Does this year's request and the out year budgets support the full 
utilization of these facilities? If not, what process has the 
Department used to prioritize the value and funding for these 
facilities?
    Answer. The NNSA is requesting adequate funding to meet Stockpile 
Stewardship Program goals in accordance with a balanced, technically-
based prioritization. Our responsibility is to adjust our budgets to 
meet the needs of the program according to our assessment of national 
priorities that Defense Programs must satisfy.
    The level of facility funding is determined through a rigorous 
process involving the weapons laboratories, the Science Campaigns, and 
the Directed Stockpile Work program. Weapons science priorities are set 
by a process that considers where the advancement of scientific 
knowledge can make the most impact on weapons confidence synchronized 
with the development of experimental and computing capabilities. 
Funding for experimental facilities follows from the weapons science 
priorities and consideration of costs, benefits, and customer 
commitments.
    Question. Given the progress and the opportunities provided by 
pulse power, the subcommittee also expressed their expectation that the 
Department will provide adequate funding for the full utilization of 
the Z machine in the out-year budgets.
    What has the Department done to follow these directions?
    Answer. NNSA recognizes the promise and progress of pulsed power 
and the important contributions to stockpile stewardship that the Z 
facility has been making and will make in the future. In fiscal year 
2009, NNSA is requesting $64.0 million for operation and use of the Z 
facility. This amount will enable a strong program of over 180 shots 
which will meet all 2009 requirements for stockpile stewardship. 
Additional funding is requested for targets for the Z facility. In 
future years, the NNSA intends to request adequate funding to make 
effective use of the Z machine and meet Stockpile Stewardship Program 
requirements.
    Question. The baseline ignition approach on the NIF is x-ray or 
indirect drive. This approach was chosen after detailed review of its 
maturity and value to the weapons program. Significant challenges 
remain for this approach as independent reviews have concluded and even 
now there appears to be uncertainty in the baseline target, requiring 
several different approaches to be funded. In the 2008 budget process 
this subcommittee expressed this concern and again asks the Department 
to justify why it does not defer the direct drive approach to ignition 
on NIF until after achievement of x-ray driven ignition or after 
experiments have shown that the baseline approach will not succeed.
    Given the present and future budgetary pressures on the Stewardship 
Program, why does the Department continue using significant resources 
on other approaches to ignition such as direct drive?
    Answer. In response to the present and future budgetary pressures 
on the National Ignition Campaign and the Stockpile Stewardship 
Program, resources have been shifted to maintain the indirect drive 
program. Those portions of the direct drive physics program that 
directly support the indirect drive effort are funded, along with a 
small polar direct drive program.
    As confirmed by independent reviews, success in inertial fusion and 
an ignition demonstration depend on a detailed technical understanding 
of the implosion process. Many of the key scientific and technical 
challenges associated with ignition are independent of the drive 
method--direct or indirect drive. The OMEGA laser system is flexible 
and is used to study implosion physics with direct and indirect drive. 
The choice of direct or indirect drive is a technical decision based on 
experimental capabilities and requirements.
    Studies at OMEGA examine physics and technology issues required for 
the success of indirect drive, including aspects of implosions using 
direct drive that are currently inaccessible with indirect drive. 
Implosion target physics is an integral part of the National Ignition 
Campaign. An important recent example is the achievement of record 
compressed densities in cryogenic deuterium-tritium capsules using 
direct drive on the OMEGA laser. This critically important result 
provided new knowledge regarding capsule physics and the operation of 
cryogenic systems--information directly applicable to indirect drive.
    Since its inception, the National Ignition Campaign has included 
direct drive as a risk mitigation strategy (contained in the approved 
NIC Execution Plan). Polar direct drive remains the only near-term 
back-up strategy for indirect drive ignition on the NIF. The mainline 
strategy remains indirect drive, and the bulk of NIF resources are 
devoted to it. Only if major unforeseen problems arise with indirect 
drive will a change to direct drive be considered.
    Question. Has the Department conducted an external and independent 
review of the direct drive approach on NIF taking into account the non-
ideal geometry on this facility? Has the Department considered any 
other approaches other than direct drive as the back-up to indirect 
drive on NIF? If so, what process was employed in this decision?
    Answer. Yes. The polar direct drive approach for achieving ignition 
on the NIF was reviewed by an external and independent committee as 
part of the larger program review in 2005. It was recommended that 
direct drive research be continued as a risk mitigation strategy for 
achieving ignition. Polar direct drive is optimized for the initial NIF 
geometry. An NNSA Level-1 milestone in fiscal year 2009 provides a 
decision point for moving forward with development of polar direct 
drive for the NIF. The mainline strategy remains indirect drive and 
polar direct drive is the only current back-up. The committee also 
recommended that risk mitigation include planning for the use of green 
(2-v) instead of blue (3-v) light. Other approaches to ignition on the 
NIF, such as fast ignition and shock ignition, are primarily supported 
through multi-institutional grants by the Department of Energy's Office 
of Fusion Energy Sciences and by Laboratory Directed Research and 
Development (LDRD) at the national laboratories.
    Please describe how the additional funding provided in the 2008 
budget was used in accordance with the language of Congress. In 
particular was an additional $13 million provided to Sandia National 
Laboratory to fully fund single shift operation of Z, and how many 
``additional shots to support the goal of an ignition demonstration at 
the National Ignition Facility (NIF) in 2010'' are being performed for 
the $9 million extra that University of Rochester received in fiscal 
year 2008?
    Answer. For the Z facility for fiscal year 2008, the NNSA requested 
a total of $63.9 million for its operation and use. There were 
additional funds requested to fabricate targets for Z. In the Energy 
and Water Appropriations Act of 2008, the Congress added $13.0 million 
to fully fund single shift operations. Of the $13.0 million in 
additional funding, $7.9 million was provided directly to the Z 
facility and $2 million was provided to General Atomics Corporation to 
meet target needs for Z. The remaining $3.1 million was used for the 
Congressional rescission and the program's share of Defense Programs 
site infrastructure charges.
    In addition, the Congress provided $62.0 million for the Laboratory 
for Laser Energetics operations, an increase of $9.0 million over the 
budget request, to provide additional shots to support the goal of an 
ignition demonstration at the National Ignition Facility in 2010. After 
the Congressionally mandated rescission and $1.0 million for the 
program's share of Defense Programs site infrastructure charges, the 
amount of funding provided to the University of Rochester over the 
fiscal year 2008 President's budget was $7.4 million. This funding has 
provided 262 additional shots on the OMEGA laser system and 115 shots 
on the OMEGA Extended Performance laser system in support of achieving 
ignition at the National Ignition Facility.
                                 ______
                                 
                 Questions Submitted to Dr. Tom Hunter
             Questions Submitted by Senator Byron L. Dorgan
                           advanced computing
    Question. The fiscal year 2008 Omnibus language directed both the 
NNSA and the Office of Science to establish a joint advanced computing 
and algorithm R&D program at Sandia. The objective of this language was 
to restore a world leading R&D capability in high performance computing 
architecture. The United States won't maintain its world leading role 
if we don't continue to support research.
    What has the Department been doing to establish this capability and 
what goals have been set and how will Sandia contribute to this 
research program?
    Answer. The Institute for Advanced Architectures and Algorithms 
(IAA) has been established with centers of excellence at Sandia (SNL) 
and Oak Ridge (ORNL) National Laboratories. A joint SNL-ORNL management 
structure along with strategic directions have been established. These 
strategic directions are aligned to the known technical gaps that must 
be closed for the United States to retain its leadership in high 
performance computing (HPC). However, the pacing elements in closing 
these gaps will be Federal funding and engagement by the both the U.S. 
semiconductor and HPC industry.
    Working with Federal Program Managers in DOE Office of Science 
Advanced Scientific Computing Research (ASCR) and NNSA Advanced 
Simulation and Computing (ASC), a competitive proposal and external 
review process has been developed for deployment of the initial $7.5 
million fiscal year 2008 funding. We expect the selection of winning 
proposals will be completed in Q4 fiscal year 2008 with most of the 
research activity occurring in fiscal year 2009. Although this has 
taken longer than we originally anticipated, we believe having 
concurrence from all parties on the funding process is placing IAA on 
solid footing for the future.
    As you are aware, the appropriations language instructed both DOE 
OS and NNSA to establish the IAA. This language has been interpreted to 
require that ASCR fund ORNL while ASC funds SNL. It our belief that a 
very successful IAA briefing to ASCR and ASC management in January 2008 
lead to Dr. Orbach inserting language at the last moment into the 
fiscal year 2009 President's budget requesting the continuation of IAA. 
However, no funding stream was identified. It is our understanding that 
ASCR plans to ask for additional appropriations in the fiscal year 2010 
Presidents budget request. NNSA is supportive of the creation of IAA at 
SNL but has asked SNL to prioritize their future ASC computer science 
funding to support the NNSA contribution to IAA. Evidence of NNSA's 
support can be found in stability of SNL computer science FYNSP funding 
during a period of significant declines in the ASC budget. However as 
pressures increase in the overall NNSA budget, we are concerned that 
there is significant risk in SNL IAA FYNSP funding.
    Question. The Complex Transformation Preferred Alternative proposes 
to eliminate future investment in a super computing platform at Sandia, 
despite a very strong track record in developing the first massively 
parallel computing architecture, which has become the standard for high 
speed computers.
    How will this impact the laboratory in the future and what will you 
do with the experienced staff without this mission responsibility?
    Answer. Our response to NNSA's decision to reduce capability 
platform sitting to LLNL and LANL has been to develop a strong 
partnership with LANL called the Alliance for Computing at Extreme 
Scales (ACES). On March 7, 2008, Tom Hunter and Mike Anastasio signed a 
Memorandum of Understanding (MOU) creating ACES. In this MOU, SNL has 
the leadership for architecting and engineering platforms to be sited 
at the Metropolis center at LANL while LANL has the leadership for 
deploying and operating the platforms. Although this might appear like 
a handoff, both labs have equal representation on creating and 
operating the next generation of capability computers. Other than NNSA 
reversing its decision, we believe this partnership provides the lowest 
risk path to retaining the SNL experience staff that developed and 
deployed the most successful HPC platform to-date, RedStorm.
    For ACES to be successful, NNSA must assign a near-future tri-lab 
platform to the partnership. The NNSA ASC computing strategy calls for 
a replacement for the Purple platform in fiscal year 2010. SNL and LANL 
were lead to believe that once the MOU was signed, NNSA would announce 
that ACES would provide the ``purple replacement''. SNL remains 
concerned that after almost 3 months, NNSA has not made an 
announcement.
    The MOU does not preclude SNL from developing, procuring and 
operating HPC capability platform for non-DP missions. For example with 
NNSA's support, SNL is developing a strategy for supplying HPC 
computing for the enormous challenges associated in turning information 
into knowledge through computational analysis (informatics). An example 
of informatics for national security would be the discovery of 
terrorist networks. We believe that moving in this direction provides 
new opportunities for SNL staff to make significant impacts in the U.S. 
national security through the development of new HPC architectures and 
state-of-the-art algorithms for informatics.
                        sandia funding diversity
    Question. Dr. Hunter, your lab has been the most successful of the 
three labs in diversifying your budget. However, it is my understanding 
that investment from other Federal agencies in limited and generally 
doesn't provide sufficient resources to make long term investments.
    Can you explain to the subcommittee the challenges in seeking 
outside Federal customers?
    As a result of your funding diversity, do you believe that NNSA 
uses this as an excuse for cutting corners and not making the same 
level of investment as the other?
    Answer. Our Nation is facing a diverse set of emerging threats 
ranging from traditional strategic nuclear threats to threats from 
other nation states, terrorists, natural disasters, and threats from 
technological surprise. As the Nation interacts with a changed world in 
which monolithic threats no longer dominate, the means to disrupt an 
increasingly technology-based society are rapidly multiplying. In my 
role as President and Director of Sandia National Laboratories, I view 
the NNSA's national security laboratories, with their world-class 
scientists and engineers and many one-of-a-kind facilities, as national 
assets and as a unique resource for the Nation in anticipating and 
responding to hostile actors and actions.
    I'd like to address three basic challenges, however, that currently 
limit the NNSA laboratories' ability to fully engage with other Federal 
agencies (OFAs), including: a long-term commitment to funding the 
foundational capabilities and resources of the NNSA Complex; enabling 
easier access to the NNSA's resources by OFAs; and a shared commitment 
through strategic partnerships between the NNSA complex and OFAs to 
ensure the Nation's security.
    At Sandia, our Work for Other's (WFO) program has existed for more 
than 50 years and has expanded significantly over the past two decades. 
There are many examples where the nuclear weapons program has benefited 
from WFO program activities, including radar, safety and risk 
assessment, and improved modeling and simulation capabilities. 
Likewise, various WFO customers have benefited from the long history of 
DOE investment in capabilities at the national laboratories. It is 
becoming increasingly difficult, however, for any one funding source to 
maintain the needed foundational capabilities of the laboratories.
    As we go forward, it will be essential to maintain the science, 
technology and engineering foundation of the Labs and define its vital 
role in responding to the Nation's security. This foundation, 
historically highly leveraged by other agencies with national security 
interests, faces dramatic reductions consistent with the down-sizing of 
the nuclear weapons mission. We must find a way to sustain this 
foundation so that the statutory nuclear weapons mission and the 
broader national security commitments are effectively met.
    In addition, it is imperative that OFAs should be provided easier 
access to the NNSA Complex's science, technology, and engineering 
capabilities. Commensurate with this, the NNSA and it laboratories are 
examining the existing NNSA Work for Others (WFO) program regulatory, 
policy, and procedural framework in order to identify improvements to 
current roles, responsibilities, policies, processes and requirements. 
Collectively, changes in these areas have the potential to provide 
easier access to the NNSA Complex's capabilities and allow NNSA sites 
more responsibility and accountability for meeting national security 
needs while still meeting statutory requirements.
    Overall, the common missions and shared interests of a number of 
Federal agencies with a stake in the Nation's security provide a strong 
basis for collaborative activities, mutual prioritizing of resources, 
and enduring partnerships. Such mutual missions and interests have the 
potential to develop into true strategic partnerships and enhance the 
Nation's approach to meeting national security challenges. Building 
trust among such Federal agencies is difficult, and open and consistent 
communication will be essential. Relationship development among Federal 
organization is time consuming and requires resources. However, I 
believe that we can better leverage these shared missions and interests 
of Federal agencies with the NNSA laboratories.
    Much of Sandia's work is sponsored by DOE's National Nuclear 
Security Administration (NNSA), but we also work for other Federal 
agencies, including the Department of Defense and Department of 
Homeland Security. And we work cooperatively with a number of 
government, U.S. industry, and academic partners to accomplish our 
missions and to help ensure the Nation's security. Many recognize that 
the threats the Nation faces are more diverse than ever. From my 
position at Sandia, I believe that the NNSA national security 
laboratories and my own lab are well positioned to offer the new 
science, technology, and engineering solutions to address these 
threats.
                               z machine
    Question. Dr. Hunter, we have struggled to keep full funding of the 
Z machine, which has turned out to be a fantastic research facility at 
a fraction of the cost of many of the other facilities. I recall, with 
the recent refurbishment, this facility cost less that $200 million to 
construct.
    Is the Z machine continuing to deliver important scientific data? 
How much more funding will you need above the fiscal year 2009 request 
to restore full operation?
    Answer. First of all, your recollection on the facility cost is 
correct. Over the past 25 years, the capital investment in the 
facility, including the addition of major diagnostic systems such as 
the Z-Beamlet and Z-Petawatt lasers and the recently completed Z 
refurbishment project, is less than $200 million. (Major capital 
investments over the past 25 years have included: Particle Beam Fusion 
Accelerator II (1985) $45 million; Z Conversion (1996) $12 million; 
Beamlet Laser (2001) $13 million; Z Refurbishment (2007) $90 million; 
and Z Petawatt Laser (2007) $30 million; Total $190 million)
    Today the Z machine is the most powerful and energetic laboratory 
x-ray source in the world. Z's strength is its ability to produce 
copious x-rays, large plasma environments, and controlled high 
pressures to evaluate weapons science phenomena. Z provides critical 
data for weapons primaries, secondaries, and non-nuclear components as 
part of NNSA's Stockpile Stewardship program. Achieving high energy 
density conditions is critical to develop and validate advanced 
theoretical models and codes and to characterize weapons component 
performance.
    Z provides essential data on the effects of soft x-rays on weapon 
components that cannot be obtained with any other laboratory source. 
Z's material property capability is unique, produces the most accurate 
weapons material data available in high energy density pressure 
regimes, and is required to validate new physics models of the response 
of weapons materials, such as plutonium. Z is also essential for 
evaluating the feasibility of achieving thermonuclear fusion ignition 
with pulsed power. Pulsed-power-driven fusion has the potential to be a 
very efficient and low cost approach to producing high fusion yields in 
the laboratory for weapon science and over the long term energy.
    At present, Z is funded to operate at 75 percent of full capacity 
to meet the essential requirements of NNSA's stockpile stewardship 
program. This partial capacity permits about 170-180 shots per year 
allocated as: 60 shots for material properties, 50 shots related to 
magnetically-driven Z-pinch implosions for fusion, 25 shots testing 
radiation effects, 25 shots supporting weapon secondary assessment, and 
about 10-20 pulsed power shots associated with facility operations and 
enhancements. An additional $12 million in funding is required to 
restore full single-shift operations, which would enable many other 
important opportunities to be pursued in the areas of weapon science, 
inertial confinement fusion, and fundamental science. Included in these 
additional tests are those in support of weapon primary and secondary 
assessment, nuclear survivability, and university science for the joint 
NNSA/OS High Energy Density Laboratory Plasma program. Allowing 
necessary ramp up time for training of new staff to support the full 
mission, the full single shift operations will support about 240 shots 
annually.
    Question. For several years, I have pressed the Department to 
establish a joint High Energy Density Plasma research program utilizing 
NNSA facilities to support non weapons research. Finally, the fiscal 
year 2008 budget request provided $24 million to support this research.
    Is this joint program utilizing the Z machine and do you believe 
more could be done to expand its use by the DOE Office of Science?
    Answer. The joint High Energy Density Laboratory Plasma research 
program is still being formulated by the Defense Science Division 
within NNSA and the Office of Fusion Energy Science within the DOE 
Office of Science. We believe that the Z facility as well as the Z-
Beamlet and Z-Petawatt laser capabilities should be a significant 
component of this program. These facilities can also provide 
experimental environments for the basic research needs for materials 
under extreme environments.
    At the proposed funding level it is not likely that the new joint 
program will include a large effort in utilizing the Z facility and the 
other excellent high-energy-density science facilities at the NNSA 
laboratories. There are tremendous opportunities for university and 
national laboratory researchers to use NNSA's high-energy-density 
science facilities to access experimental conditions of interest for 
fundamental science in the areas of planetary physics, material 
properties at extreme temperatures and pressures, and laboratory 
astrophysics. A basic science program on high energy density laboratory 
plasmas would be a strong component of full utilization of the Z 
facility.

                          SUBCOMMITTEE RECESS

    Senator Dorgan. We invited the three laboratory Directors, 
and I'm really pleased we did. I'm pleased you've come, and I 
hope we will be able to do this again next year.
    And thank you for your work.
    Director.
    Dr. Anastasio. Thank you very much.
    Senator Dorgan. This subcommittee's recessed.
    [Whereupon, at 4:40 p.m., Wednesday, April 16, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]








    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2009

                              ----------                              


                       WEDNESDAY, APRIL 30, 2008

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:32 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Byron L. Dorgan (chairman) 
presiding.
    Present: Senators Dorgan, Feinstein, Domenici, and Allard.

                          DEPARTMENT OF ENERGY

                National Nuclear Security Administration

STATEMENT OF WILLIAM H. TOBEY, DEPUTY ADMINISTRATOR FOR 
            DEFENSE NUCLEAR NONPROLIFERATION

              OPENING STATEMENT OF SENATOR BYRON L. DORGAN

    Senator Dorgan. The hearing will come to order. We thank 
all of you for being here today.
    This is the Senate Appropriations Committee Subcommittee on 
Energy and Water Development. We are here to take testimony 
today of the National Nuclear Security Administration's fiscal 
year 2009 budget request for defense nuclear nonproliferation 
activities.
    Today we have two panels. First we will hear from Deputy 
Administrator Will Tobey. He will be the first witness. The 
second panel will consist of two prominent nonproliferation 
experts. Dr. Siegfried Hecker is co-director at the Center for 
International Security and Cooperation at Stanford University 
and Dr. Matthew Bunn, senior research associate, Project on 
Managing the Atom at the John F. Kennedy School of Government 
at Harvard University. I thank all three for taking time out of 
their schedules to be with us.
    The administration's budget request for the National 
Nuclear Security Administration's nonproliferation activities 
is $1.25 billion for fiscal year 2009. The request is $88 
million less than the new budget authority provided in fiscal 
year 2008, but it is $410 million less than the directed 
programmatic funding provided in the 2008 bill. If that sounds 
complicated, it is. The difference is due to the fact that in 
fiscal year 2008, we redirected the use of $322 million in 
prior year balances. This fact in some ways distorts the year-
to-year comparisons, but it is important to understand.
    Further, in fiscal year 2008, we moved funding for the MOX 
facility over to the nuclear energy account and funding for the 
pit disassembly and conversion facility to the weapons 
activities. All of this makes getting adequate comparisons 
very, very difficult. Regardless, it is safe to say that we 
should have greater funding for these activities if we have the 
resources to do so.
    In his written testimony today, Deputy Administrator Will 
Tobey says that the possibility that a rogue state or a 
terrorist will acquire nuclear or other weapons of mass 
destruction poses one of the most serious threats to the United 
States and to international security. President Bush has made 
the same point.
    Today, Dr. Hecker and Dr. Bunn will also indicate that the 
threat is real and that greater financial resources are needed 
to be committed to the NNSA nonproliferation activities.
    If there is a consensus about the threat of nuclear or 
other weapons of mass destruction, then the question is are we 
doing enough? Are we doing it well? What else should we be 
doing? Today we will review the budget request with the Deputy 
Administrator with those questions in mind.
    Dr. Hecker and Dr. Bunn will discuss the adequacy of the 
budget request, but we will also ask their views on an array of 
nonproliferation policy and diplomatic challenges facing us 
here today. I have reviewed their testimony and they will cover 
some of that in their testimony.
    North Korea, Iran, Syria are front-page reminders that 
proliferation concerns are real and immediate. And the 
questions arise as to whether the international community has 
the commitment and the appropriate means of dealing with 
countries which ignore international sentiment. Sanctions 
failed to stop India's development of a nuclear weapons 
program, and now we are considering nuclear cooperation 
agreements with that country. Agreements, I think, are unwise, 
by the way.
    The 2005 Nuclear Nonproliferation Treaty review conference 
was a failure. Some argue that the administration contributed 
to that failure. I will ask about that today.
    Renewed interest in civilian nuclear power use is on the 
rise around the world, and as we see in Iran, concern about 
enrichment capability has significant proliferation concerns 
regardless if it is claimed to be purely for civilian purposes.
    These are just a few of the very significant 
nonproliferation policy and diplomatic challenges facing our 
country.
    Obviously, the White House and the State Department drive 
the nonproliferation program policy, but NNSA provides the 
technical knowledge and capability to implement and verify.
    We have a lot to cover in this hearing, and I want to make 
one point about this issue of nonproliferation. I think we have 
tried to do well as a country focusing on this, but in many 
ways it has become an orphan to so many other programs that 
have greater priority. And yet, some day we may well look in 
the rear view mirror and have seen a nuclear weapon exploded in 
a major city in this world and wonder what we could have done 
differently to stop the proliferation of nuclear weapons. There 
is not much more we do that exceeds in importance than the 
determination of this country to be a leader in 
nonproliferation. Some of our policies confound me. Some of 
them worry me. Others I am pleased with. But I think the 
purpose of this hearing is to evaluate this issue of 
nonproliferation. Are we doing enough? What more should we be 
doing? Will we 5 and 10 years from now determine that we funded 
other things less important than this and short-funded this 
program? Let us hope not.
    At any rate, we appreciate all three witnesses being here 
today, and let me call on the ranking member, Senator Domenici.

             OPENING STATEMENT OF SENATOR PETE V. DOMENICI

    Senator Domenici. Thank you very much, Mr. Chairman.
    I have always looked forward to this hearing because the 
issue of nuclear nonproliferation is near and dear to my heart 
and of such great importance to our national security.
    I am also pleased to welcome a former constituent, former 
Los Alamos Director Sig Hecker. Sig is an old and dear friend 
who I have relied on for advice for decades. I know that sounds 
funny--``decades''--because he is so young looking and it 
hardly seems like it could be decades, but it has been.
    Mr. Chairman, I strongly encourage you to seek Dr. Hecker's 
advice and wisdom on matters of nonproliferation just as I 
have, and I guarantee that you will not be sorry if you do 
that.
    Dr. Hecker, you have returned from your fifth trip to North 
Korea, as well as a recent trip to India. We look forward to 
hearing about your impressions of both countries.
    Mr. Tobey and Dr. Bunn, I also appreciate your attendance 
and look forward to discussions with you involving the 
challenge of nuclear proliferation and what our priorities 
should be in response.
    Mr. Chairman, I noted earlier that I have a strong passion 
for these accounts, and I believe that the United States must 
maintain its determination to keep the world's most dangerous 
weapons out of the hands of terrorists and the world's most 
dangerous regimes. This means doing more of what has been 
successful in the past and fixing known shortcomings. We cannot 
rely on luck to keep us safe. Preventing nuclear terrorism must 
remain a high priority. I have seen firsthand the challenges of 
reducing the enormous and sometimes poorly protected stockpile 
of the Soviet Union at the end of the cold war. Sig Hecker 
showed us many of those shortly after the cold war as they 
existed on the ground in places in the former Soviet Union.
    Since 1991 when the Soviet Union collapsed, our Nation has 
invested nearly $10 billion to lock up or destroy thousands of 
nuclear weapons and their delivery systems and hundreds of tons 
of nuclear material. The Department is now nearing completion 
of the security upgrades in Russia and the former Soviet 
republics. Just last week, one of the three remaining plutonium 
production reactors was shut down in Russia with U.S. 
assistance. In 2 years, we will complete the construction of 
coal plants in Russia necessary to enable the shutdown of two 
remaining production reactors.
    The completion of these projects coincides with the new 
phase of our relationship with Russia. Russia is the leading 
exporter of natural gas, second leading oil producer in the 
world behind Saudi Arabia. With oil prices over $100 per 
barrel, the Russian Government is no longer strapped for cash. 
This is a quite different situation than we initiated in the 
MPC&A program. Our cooperation should reflect this reality. We 
must pursue projects on the basis of shared benefits and shared 
contributions.
    Our major project of mutual benefit has been the blend-down 
of Russian highly enriched uranium. In 5 years, we will come to 
an end of the HEU purchase agreement. At that time, 500 metric 
tons of HEU from dismantled Russian weapons will have been 
eliminated, the equivalent of 20,000 warheads' worth of 
material. This weapons material is being turned into commercial 
nuclear fuel, and today supplies 50 percent of the U.S. reactor 
requirements. This program is considered by many to be the most 
successful nonproliferation program ever implemented.
    I believe we can and must do even more. When the HEU 
agreement ends in 2013, it is estimated that there will be 
hundreds of tons of excess HEU remaining in Russia. With the 
right commercial incentives, this can be an economic win for 
Russia and a security win for the world, just as the current 
agreement has been.
    I am somewhat frustrated with the Russian suspension 
agreement signed by the administration in February. It provides 
20 percent, Mr. Chairman, of the U.S. enrichment market, 
without any requirement for additional HEU down-blending, 
meaning they can sell to us without delivering any HEU, highly 
enriched uranium. That is what we should be talking about.
    I have legislation that I shared with you which will 
correct this problem. The legislation would provide Russia in 
excess of 25 percent of the U.S. market if it continues the 
down-blend of HEU. At its current rate of 30 tons per year, it 
does not blend down any additional HEU, and access will be 
limited to 15 percent of our market. This legislation provides 
a clear economic incentive for Russia to eliminate an 
additional 300 tons of HEU.
    Looking forward, we must do more to prevent states from 
acquiring nuclear weapons, and you are fully aware of that and 
I think we are in accord. We must also not allow the 
proliferative states like North Korea to help other states 
develop weapons, but it seems like there is little we can do. 
They are doing it. We find out while they are doing it or after 
they are doing it, and so goes the world.
    Addressing these issues will require sustained investment. 
I am not sure we are investing enough, but you and I have found 
that this budget is profoundly difficult and it is not getting 
any easier year by year.
    Thank you very much, Mr. Chairman.
    Senator Dorgan. Senator Domenici, thank you very much.
    Administrator Tobey, thank you very much for being with us, 
you may proceed and the statements that you and the other two 
witnesses provide today will be inserted into the record in 
full, and you may summarize. Thank you very much.

                     STATEMENT OF WILLIAM H. TOBEY

    Mr. Tobey. Chairman Dorgan, Senator Domenici, thank you for 
the opportunity to discuss the President's fiscal year 2009 
budget request for the National Nuclear Security 
Administration's Office of Defense Nuclear Nonproliferation.
    At what may be my last opportunity to speak before this 
subcommittee, I would particularly like to thank Senator 
Domenici for his leadership on nonproliferation. You have been 
a great champion of the NNSA, and we are all deeply 
appreciative of that.
    I would also like to recognize the men and women of the 
NNSA who work so hard to detect, secure, and dispose of 
dangerous nuclear material around the world. They have braved 
freezing conditions in Siberia, Hezbollah rocket attacks at 
Haifa, very difficult conditions at Yongbyon in North Korea, 
and through it all, they have never failed to accomplish their 
missions. And I feel honored to work with them.
    The fiscal year 2009 budget request for the Office of 
Defense Nuclear Nonproliferation totals $1.247 billion. This 
amount will allow us to continue our mission to detect, secure, 
and dispose of dangerous nuclear and radiological materials, 
strengthen the international nonproliferation partnerships, and 
meet evolving proliferation and international security threats.
    Specifically, this funding will advance our priorities to, 
one, enhance national capabilities to detect and interdict 
nuclear and radiological materials at key seaports and border 
crossings; two, reduce and eliminate stores of highly enriched 
uranium, weapon-grade plutonium, and vulnerable radiological 
materials across the globe; and three, work to ensure the 
sustainability of nuclear security upgrades in Russia and the 
international nonproliferation system.
    As was recognized, last week we announced the shutdown of a 
plutonium production reactor at Seversk, something that we have 
been working with the Russians on for years now, and this is an 
important achievement and shows tangible results in our 
efforts.
    We recognize that the best way to reduce the threat of 
proliferation or terrorist acquisition of nuclear weapons or 
devices is by denying them access to the necessary nuclear and 
radiological materials in the first place. To that end, our 
fiscal year 2009 request will allow us to accelerate our work, 
including installation of radiation detection systems at nine 
additional ports under our Megaports program for a total of 32 
Megaport sites worldwide, helping to secure 49 border crossings 
and other high-risk points of entry under our Second Line of 
Defense Program and expanding export control and commodity 
identification training activities with more than 50 countries.
    Additionally, in fiscal year 2009, we will undertake a new 
initiative to strengthen international safeguards to prevent 
the diversion of nuclear material from peaceful uses. This Next 
Generation Safeguards Initiative will develop the safeguards 
technologies and human resources needed to sustain our 
nonproliferation efforts while promoting international 
partnerships and meeting the challenges of growing nuclear 
energy demand.
    Underpinning all these efforts is our nonproliferation 
research and development work through which we will continue 
our leadership as the principal Federal sponsor of long-term 
proliferation-related R&D on nuclear detection and 
characterization.
    Our fiscal year 2009 request will allow us to accelerate 
our efforts under the Global Threat Reduction Initiative to 
convert HEU-fueled research reactors around the globe to the 
use of less proliferation-sensitive, low enriched uranium. We 
will also continue to repatriate U.S.- and Russian-origin 
highly enriched uranium to secure sites, secure high priority 
nuclear and radiological sites globally, and secure and remove 
orphan radiological sources that could be used in dirty bombs. 
To date, we have removed enough nuclear material for nearly 70 
nuclear weapons and secured more than enough radiological 
sources for over 8,000 dirty bombs. In fiscal year 2009, we 
will convert an additional 8 HEU reactors to LEU, remove an 
additional 700 kilograms of HEU, and secure an additional 125 
radiological sites across the globe.
    Last year I updated you on our progress under the 2005 
Bratislava joint statement on nuclear security in which we have 
partnered with Russia to secure its nuclear weapons and sites 
of highest concern. I am pleased to report that we have 
completed 85 percent of these upgrades to date and are on track 
to complete our work under the Bratislava Agreement by the end 
of calendar year 2008. In fiscal year 2009, should Congress 
grant our request for resources, our focus will be on 
completing additional high priority security work beyond the 
Bratislava Agreement.
    Additionally, our fiscal year 2009 budget request also 
includes funding to ensure the shutdown of the last remaining 
Russian plutonium production reactor by 2010, which will 
prevent the production of about one-half ton of weapons-grade 
plutonium annually. We will continue our efforts to facilitate 
Russia's commitment to dispose of 34 metric tons of surplus 
Russian weapons-grade plutonium and to disposition excess 
Russian and U.S. highly enriched uranium.
    Just last week, we were pleased to announce that the United 
States and Russia have eliminated 10 metric tons of Russian 
weapons-usable nuclear material. This material, equivalent to 
400 nuclear weapons, was successfully converted by down-
blending highly enriched uranium to low enriched uranium under 
a joint U.S.-Russian program. These material security efforts 
enhance our work to strengthen the nonproliferation regime and 
the multilateral partnerships supporting it.
    In this regard, we will continue to support the work plan 
of the Global Initiative to Combat Nuclear Terrorism and to 
advance the objectives of the United Nations Security Council 
resolution 1540, which mandate effective export controls, 
criminalize proliferation of WMD by non-state actors, and 
require states to secure proliferation-sensitive materials.
    We will likewise continue our technical and diplomatic 
support of U.S. efforts on the Nuclear Nonproliferation Treaty 
within the Nuclear Suppliers Group and on multilateral 
initiatives such as international fuel assurances and 
disablement of North Korean nuclear facilities. We recognize 
that just as today's proliferation and terrorism threats are 
global in scope, so too must be the responses we undertake to 
address them.
    I am mindful of the comments that were made at the outset 
of the hearing about the importance and urgency of our work. I 
would note that we have worked hard to accelerate our efforts 
across the board, including accelerating the conversion of 
reactors from highly enriched uranium to low enriched uranium, 
increasing nuclear material security under the Bratislava 
Initiative which advanced the completion of work in Russia by 
about 2 years, signing an agreement with Russia on the Second 
Line of Defense Program which advanced the completion of 
securing Russia's borders by about 6 years, and in fact, even 
advancing our work under the elimination of weapons-grade 
plutonium production reactors such that we have shut down one 
of the reactors months early and we are still optimistic that 
we can shut down the last remaining reactor perhaps even a year 
early.
    I am also quite mindful of the need, given the importance 
of our work, of listening to others about this work. I have 
appreciated the advice that we have gotten from this committee, 
both members and staff. We have worked hard to try and take it 
into account as we proceeded with our work.

                           PREPARED STATEMENT

    I am also grateful to the advice that we have received from 
the members of the second panel. Even before I had been 
confirmed, I sought the advice of other experts on what our job 
should be and how we should execute it, and frankly, the advice 
that I found most comprehensive and useful was that of Dr. 
Hecker. We also speak frequently with Dr. Bunn, and his advice 
and his report that he completes on securing the bomb has been 
helpful in setting forth our priorities. We have tried to 
reflect that, as well as our own thinking, in how we execute 
these programs and I am grateful for all of that help.
    Thank you.
    [The statement follows:]
                 Prepared Statement of William H. Tobey
    Thank you for the opportunity to discuss the President's fiscal 
year 2009 budget request for the National Nuclear Security 
Administration (NNSA). I want to thank all of the members for their 
strong support for our vital national security missions.
    In the 8th year of this administration, with the 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 considering options 
        for transforming the stockpile and the complex infrastructure 
        that supports it;
  --Reducing the threat posed by proliferation of nuclear weapons, 
        material and expertise; and
  --Providing reliable and safe nuclear reactor propulsion systems for 
        the U.S. Navy.
    NNSA is examining how to proceed into the future to address 
evolving national security needs in a manner that anticipates 
significant changes in how we manage our national security programs, 
our assets and our people. To that end, the fiscal year 2009 budget 
request for $9.1 billion, a decrease of $35 million from the fiscal 
year 2008 Consolidated Appropriations Act, supports NNSA's crucial 
national security mission. My testimony today will focus on NNSA's 
Defense Nuclear Nonproliferation budget request for fiscal year 2009.
                    defense nuclear nonproliferation
    The possibility that rogue states or terrorists might acquire 
nuclear and other weapons of mass destruction (WMD) and their related 
technologies, equipment and expertise, poses one of the most serious 
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 material, to detect and interdict 
nuclear and radiological materials and WMD-related equipment, to halt 
the production of fissile material for weapons, to dispose of surplus 
weapons-usable material, and to contain the proliferation of WMD 
technical expertise. The fiscal year 2009 budget request will enable 
NNSA to continue these critical activities that support threat 
reduction initiatives vital to U.S. national security.
    Preventing access to nuclear weapons and fissile material has many 
dimensions. Our highest priority is to keep these dangerous materials 
out of the hands of the world's most dangerous actors. Absent access to 
a sufficient quantity of essential fissile materials, there can be no 
nuclear weapon. The most direct way to prevent acquisition of nuclear 
weapons is by denying access to fissile material. Historically, much of 
our materials security emphasis 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. We 
recently completed security upgrades at 25 Russian Strategic Rocket 
Force sites and will meet our commitment to conclude agreed-to security 
upgrade activities at Russian nuclear sites by the end of this year, as 
provided for under the Bratislava Joint Statement signed by Presidents 
Bush and Putin. Although these direct upgrade efforts are largely 
drawing to a close after over a decade of work, we will continue 
security upgrade work at some sites added to our work scope after the 
Bratislava summit, and will continue to work cooperatively with Russia 
to ensure the long-term sustainability of the systems and procedures 
already implemented. We recently reached agreement with Russia on a 
sustainability plan that identifies the requirements for long-term 
Russian maintenance and infrastructure of security upgrades under our 
cooperative program.
    However, not all nuclear material of proliferation concern is 
located in Russia. We are also working with other partners to secure 
weapons-usable nuclear materials in other parts of the world, and to 
strengthen security at civil nuclear and radiological facilities. One 
area of particular concern is research reactors, which often use highly 
enriched uranium (HEU) fuel otherwise suitable for bombs. Our Global 
Threat Reduction Initiative (GTRI) converts research reactors around 
the world from HEU to low enriched uranium (LEU) fuel. The GTRI 
program, and its antecedents, have removed approximately 68 nuclear 
bombs' worth of highly enriched uranium and secured more than 600 
radiological sites around the world, collectively containing over 9 
million curies, enough radiation for approximately 8,500 dirty bombs. 
In the United States the GTRI program has removed over 16,000 at-risk 
radiological sources, totaling more than 175,000 curies--enough for 
more than 370 dirty bombs.
    An additional nuclear security challenge concerns the effectiveness 
and credibility of international nuclear safeguards. Against the 
backdrop of growing nuclear energy demand, concerns over the diffusion 
of sensitive nuclear technologies, and the challenges posed by Iran and 
North Korea, international safeguards are coming under increasing 
strain. To address this challenge, NNSA has launched the Next 
Generation Safeguards Initiative (NGSI), which will ensure U.S. 
leadership and investment in our technologies and experts in the 
service of nuclear nonproliferation. Enhanced and revitalized 
international safeguards will also help ensure the sustainability of 
the gains made by our associated threat reduction efforts.
    Additionally, in fiscal year 2009, we will continue to lead the 
U.S. Government efforts to oversee the disablement and dismantlement of 
North Korea's nuclear program. However, in order to continue our 
support for these critical disablement and dismantlement activities, we 
will require a waiver of the Glenn Amendment restrictions that were 
triggered by North Korea's 2006 nuclear test, as well as more 
substantial funding. The Glenn Amendment prohibits the Department of 
Energy, which would otherwise fund denuclearization activities, from 
providing any financial assistance to North Korea. Without this waiver, 
the Department will be unable to complete Phase Three denuclearization 
activities. NNSA and the administration have been working to insert 
language into the fiscal year 2008 Iraq War Supplemental, or any other 
appropriate legislative vehicle, to provide such a waiver.
    We are also taking aggressive steps to interdict illicit transfers 
of weapons-usable nuclear materials and equipment, and to prevent 
dissemination of related sensitive nuclear technology via strengthened 
export controls and cooperation. We currently provide export control 
and commodity identification training to over 50 countries across the 
globe, in order to improve nations' capabilities to deter and interdict 
illicit WMD-related technology transfers. As an important complement to 
physical security improvements, the Second Line of Defense Program 
enhances our foreign partners' ability to interdict illicit trafficking 
in nuclear materials through the deployment of radiation detection 
systems at high-risk land-border crossings, airports and seaports. 
These efforts increase the likelihood of interdicting illicit nuclear 
materials entering or leaving the country. To date, 117 Russian border 
crossings have been equipped with radiation detection equipment under 
this program.
    As part of the Second Line of Defense, 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 seaports 
throughout the world, this initiative strengthens the detection and 
interdiction capabilities of our partner countries. At the end of 2007, 
the Megaports program was operational in 12 countries and being 
implemented at 17 additional ports. In addition, we continue to carry 
out nonproliferation research and development activities, developing, 
demonstrating and delivering novel nuclear material and nuclear 
detonation detection technologies for nonproliferation and homeland 
security applications.
    Since the end of the cold war, the Nation's adversaries have been 
quick to adapt to technological improvements. Staying ahead of the R&D 
curve is critically important to keeping our Nation safe and secure. As 
the principal Federal sponsor of long-term nuclear nonproliferation-
related research and development, NNSA focuses its R&D investments on 
leading-edge, early stage basic and applied R&D programs, including 
testing and evaluation, which lead to prototype development and 
improvements in nuclear detection and characterization systems. By 
concentrating on these key R&D components, NNSA helps strengthen the 
U.S. response to current and projected WMD threats.
    These critical steps are only part of a comprehensive 
nonproliferation program. In addition to these efforts to secure, 
detect, and interdict weapons-usable materials, we also work to 
eliminate weapons-usable material. Indeed, there remains enough fissile 
material in the world today for tens of thousands of weapons. An 
integral part of our strategy, therefore, has been to encourage other 
states to stop producing materials for nuclear weapons, as the United 
States itself did many years ago. 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 electricity 
to local communities. We are helping to replace these non-commercial 
style reactors with fossil fuel plants, thereby eliminating their 
production of plutonium. We had the goal this year of shutting down two 
of the remaining three plutonium-producing reactors in Russia 
permanently. Last week we announced the elimination of the production 
of nuclear weapons-grade plutonium at the Seversk site. This is a 
historic nonproliferation milestone. The third at Zheleznogorsk will 
shut down in December 2010, if not, as we hope, sooner.
    As previously indicated, there are a number of effective synergies 
between NNSA's defense activities and our nuclear nonproliferation 
objectives. For example, we are disposing of the substantial quantities 
of surplus weapons grade HEU that has resulted from the thousands of 
warheads we have dismantled, by downblending it to lower enrichment 
levels suitable for use in commercial reactors. This past February 
marked the 15th anniversary of the U.S.-Russia HEU Purchase Agreement--
one of the most successful nonproliferation programs ever conceived. 
Under the HEU Purchase Agreement, over 322 metric tons of uranium from 
Russia's dismantled nuclear weapons--enough material for more than 
12,000 nuclear weapons--has been downblended for use in commercial 
power reactors in the United States. Nuclear power generates 20 percent 
of all American electricity, and half of that is generated by fuel 
derived from Russian HEU. As a result, one-tenth of U.S. electricity is 
made possible by material removed from former Soviet nuclear weapons.
    Similarly, disposition of surplus U.S. HEU through downblending to 
low-enriched uranium has been proceeding for nearly a decade and 
progress is continuing. As of the end of December 2007, approximately 
92 metric tons of HEU, equivalent to over 3,500 nuclear weapons, have 
been downblended and converted to power or research reactor fuel, and 
an additional 13 metric tons have been delivered to disposition 
facilities for near-term downblending. This HEU disposition progress 
has already contributed substantially to nuclear material consolidation 
efforts in the Department of Energy complex, eliminating the necessity 
for high security storage at two sites, and greatly reducing it at 
several others.
    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. In November 2007, we signed a joint statement with 
Russia that represents a technically and financially credible plan to 
dispose of 34 metric tons of Russia's surplus plutonium in fast 
reactors. Under this approach, Russia will pay for the majority of 
costs and begin disposing of its surplus plutonium in the 2012 
timeframe. Last year, the Department of Energy began construction of a 
Mixed Oxide Fuel Fabrication Facility at the Savannah River Site. The 
facility originally planned to dispose of 34 metric tons of surplus 
weapon-grade plutonium by converting it into mixed oxide (MOX) fuel to 
be irradiated in commercial nuclear reactors, producing electricity and 
rendering the plutonium undesirable for weapons use. Last September, at 
the IAEA General Conference in Vienna, Secretary Bodman announced that 
an additional 9 metric tons of plutonium, enough to make approximately 
1,100 nuclear weapons would be removed from such use and eliminated by 
conversion to mixed oxide fuel. The MOX facility is a critical 
component of the Department's surplus plutonium consolidation efforts 
and is essential to the goal of transforming the complex.
    Our efforts at home are not enough, in and of themselves. We need 
cooperation from our international partners as well, and 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 
September 11, attacks. We have made substantial reductions in our 
stockpile and made additional plutonium available for conversion into 
civilian reactor fuel. Additionally our Complex Transformation will 
further reduce the number of sites and locations where we store special 
nuclear materials, providing for improved security of these materials.
    The risk of nuclear terrorism is not limited to the United States. 
The success of our efforts to deny access to nuclear weapons and 
material is very much dependent on whether our foreign partners 
similarly recognize the threat and help us to combat it. To this end, 
we undertake efforts to strengthen the nonproliferation regime and 
expand international nonproliferation efforts. We continue to provide 
technical and policy support to U.S. efforts within the 
nonproliferation regime, including support to the Nuclear 
Nonproliferation Treaty, the Nuclear Suppliers Group, the International 
Atomic Energy Agency and a wide range of U.S. diplomatic initiatives, 
including the efforts in North Korea. We also have strengthened 
international collaboration and dialogue on nonproliferation efforts, 
including developing an international mechanism through which seven 
countries have pledged some $45 million in contributions to our 
nonproliferation programs.
    In July 2006, 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. By the end of 2007, 64 
nations had joined this Global Initiative, and a number of subject 
matter expert conferences and training activities have been conducted. 
Most recently in December 2007, representatives from 15 nations 
participated in Global Initiative to Combat Nuclear Terrorism Radiation 
Emergency Response workshop held in China by the NNSA. Paired with U.N. 
Security Council Resolution 1540 and working closely with our overseas 
partners, we now have both the legal mandate and the practical means 
necessary for concrete actions to secure nuclear material against the 
threat of diversion.
          fiscal year 2009 budget request programmatic detail
    The President's fiscal year 2009 budget request for NNSA totals 
$9.1 billion, a decrease of $35.0 million or 0.4 percent less than the 
fiscal year 2008 Consolidated Appropriations level. 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, the National Defense 
Authorization Act for Fiscal Year 2000. 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 2009-2020 13 Future Years Nuclear Security 
Program--FYNSP--projects $47.7 billion for NNSA programs though 2013. 
This is a decrease of about $2.3 billion over last year's projections. 
The fiscal year 2009 request is slightly smaller than last year's 
projection; however, the outyears increase starting in fiscal year 
2010.
Defense Nuclear Nonproliferation Budget Summary
    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 threat that hostile 
nations or terrorist groups may acquire weapons-usable material, 
equipment or technology, or WMD capabilities. The administration's 
fiscal year 2009 request totals $1.247 billion for this program, 
reflecting a return to measured growth from the fiscal year 2007 
appropriation level, but a decrease from the final fiscal year 2008 
appropriation, which included a large Congressional plus-up over the 
President's request. The decrease also reflects Congressional action to 
transfer funding for some construction projects to other budget 
accounts, and the anticipated decrease of other major construction 
activities under the Elimination of Weapons Grade Plutonium Production 
Program in 2008, following completion of major elements of that 
program's work scope.
                   global threat reduction initiative
    The fiscal year 2009 request of $220 million for the Global Threat 
Reduction Initiative (GTRI) is an increase of $27 million over the 
fiscal year 2008 operating plan. This funding will support GTRI's 
mission to reduce and protect vulnerable nuclear and radiological 
materials at civilian sites worldwide by converting reactors from HEU 
to LEU, removing excess nuclear/radiological materials, and protecting 
high priority nuclear/radiological material from theft and sabotage. 
Specific increases in the GTRI budget reflect an acceleration of (1) 
Bratislava efforts to repatriate Russian-origin HEU and convert HEU 
reactors to LEU; (2) efforts to develop a new ultra-high density LEU 
fuel needed to convert 28 high performance reactors around the world; 
(3) the removal of nuclear materials not covered under other existing 
programs; and (4) security upgrades on high priority HEU and 
radioactive materials located in the United States.
           international material protection and cooperation
    NNSA's International Material Protection and Cooperation fiscal 
year 2009 budget request of $429.7 million represents a decrease of 
$194.8 million from the fiscal year 2008 appropriated level. This large 
decrease reflects: (1) the anticipated completion of major elements of 
nuclear security upgrade work performed under the Bratislava Agreement; 
(2) completion of the majority of nuclear security upgrades in 
countries outside of Russia; and (3) large Congressional increases for 
this work over the President's fiscal year 2008 budget request. During 
the past 15 years, the Material Protection Control and Accounting 
(MPC&A) program has secured 85 percent of Russian nuclear weapons sites 
of concern, and work is underway to complete this work by the end of 
fiscal year 2008. To maintain this progress, MPC&A and Rosatom have 
developed a new joint plan identifying elements required for Rosatom's 
long-term sustainability of U.S.-installed security enhancements. In 
fiscal year 2009, international material protection activities will 
focus on the continued enhancement of Russia's capability to operate 
and maintain U.S.-funded security improvements in the long-term. 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 
2009, we will eliminate an additional 1.4 metric tons of Russian HEU 
for a cumulative total of 12.4 metric tons.
    Our Second Line of Defense (SLD) Program installs radiation 
detection equipment at key transit and border crossings, airports and 
major seaports to deter, detect and interdict illicit trafficking in 
nuclear and radioactive materials. The SLD Core Program, which installs 
radiation detection equipment at borders, airports, and strategic 
feeder ports, has equipped 117 sites in Russia. The United States and 
Russia have agreed to jointly fund work to equip all of Russia's border 
crossings with radiation detection equipment by the end of 2011, 6 
years ahead of schedule. The Core Program has also equipped 33 sites 
outside of Russia with radiation detection systems. The SLD Megaports 
Initiative has deployed radiation detection and cargo scanning 
equipment at 12 ports to date in the Netherlands, Greece, Bahamas, Sri 
Lanka, Singapore, Spain, the Philippines, Belgium, Honduras, Pakistan, 
the United Kingdom, and Israel. Various stages of implementation are 
underway at ports in 16 other locations.
    During fiscal year 2009, the SLD Core Program is planning to 
complete an additional 49 sites. The SLD Megaports Initiative plans to 
complete work at nine key ports in fiscal year 2009 in Israel, Jordan, 
Spain, Mexico, China, the United Arab Emirates, Saudi Arabia, Oman, and 
Taiwan. We will continue progress on separate ports in Spain and 
Mexico, and will initiate new work in fiscal year 2009 at ports in 
Argentina, Brazil, and Malaysia. The Megaports program is also pursuing 
outreach activities in northeastern Africa and other key regions of 
concern. Fiscal year 2009 funding will also support the procurement of 
Advanced Spectroscopic Portals (ASP) and mobile detection systems, 
including Mobile Radiation Detection & Identification Systems (MRDIS) 
and Radiation Detection Straddle Carriers (RDSC). The Megaports 
Initiative also works closely with the U.S. Department of Homeland 
Security's Bureau of U.S. Customs and Border Protection (CBP) by making 
technical resources available to complement the Container
    Security Initiative (CSI) and the Secure Freight Initiative (SFI) 
at international ports. Under SFI, all U.S.-bound containers are being 
scanned at three ports in Pakistan, Honduras, and the United Kingdom, 
fulfilling the 2006 SAFE Ports Act to couple non-intrusive imaging 
equipment and radiation detection equipment in order to demonstrate the 
effectiveness of 100 percent scanning of U.S.-bound containers. SLD 
Megaports has also partnered with CBP at four, limited capacity SFI 
locations in Hong Kong, Oman, Korea, and Singapore. The Megaports 
Initiative is installing radiation detection equipment at all CSI ports 
and has worked with CBP to pursue, where feasible, joint agreements 
with host nations to implement both the Megaports and SFI programs.
              nonproliferation and international security
    The Nonproliferation and International Security (NIS) mission is to 
prevent, mitigate, and reverse WMD proliferation by providing policy 
and technical support to strengthen international nonproliferation 
regimes, institutions, and arrangements; promote foreign compliance 
with nonproliferation norms and commitments; and eliminate or reduce 
proliferation programs and stockpiles. Major NIS strategic priorities 
in fiscal year 2009 include supporting the safe and secure expansion of 
nuclear energy use and disablement, dismantlement, and verification of 
nuclear programs in North Korea. NIS will also support the Next 
Generation Safeguards Initiative (NGSI) to strengthen international 
safeguards, revitalize the U.S. technical and human resource base that 
supports them, and develop the tools, approaches, and authorities 
needed by the International Atomic Energy Agency to fulfill its mandate 
far into the future.
    In fiscal year 2009, NIS also will confirm the permanent 
elimination from the Russian weapons stockpile of 30 metric tons of 
HEU; control the export of items and technology useful for WMD 
programs; continue an augmented export control cooperation program 
involving emerging suppliers and high-traffic transit states; break up 
proliferation networks and improve multilateral export control 
guidelines; develop and implement policy in support of global 
nonproliferation regimes; train 2,500 international and domestic 
experts in nonproliferation; provide technical expertise to the USG to 
support various WMD interdiction activities; develop and implement 
transparency measures to ensure that nuclear materials are secure; 
transition 300 Russian and FSU WMD experts to long-term private sector 
jobs; and make the preparations necessary for the USG's $50 million 
contribution to the International Atomic Energy Agency for the 
establishment of the International Nuclear Fuel Bank--an international 
effort to establish a back-up nuclear fuel supply for peaceful uses.
           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 is working towards completing the permanent shutdown of 
the three remaining weapons-grade plutonium production reactors in 
Seversk and Zheleznogorsk, Russia. The fiscal year 2009 budget request 
of $141 million reflects a decrease of $38 million from the fiscal year 
2008 level due to the successful shutdown at Seversk last week. The 
budget profile provides the funding required to replace the heat and 
electricity these reactors would otherwise supply to local communities 
with energy generated by fossil fuel, permitting the Russians to 
permanently shut down these reactors. The reactor at Zheleznogorsk will 
be shut down by December 2010, if not sooner. This construction 
activity thus leads to the elimination of more than 1 metric ton of 
weapons-grade plutonium production per year.
                     fissile materials disposition
    The Fissile Materials Disposition program request for fiscal year 
2009 is $41.8 million. The program retains three principal elements: 
efforts to dispose of U.S. highly enriched uranium (HEU) declared 
surplus to defense needs primarily by down-blending it into low 
enriched uranium; technical analyses and support to negotiations 
involving the United States, Russia, and the International Atomic 
Energy Agency (IAEA) on monitoring and inspection procedures under the 
2000 U.S.-Russia plutonium disposition agreement; and limited support 
for the early disposition of Russia's plutonium in that country's BN-
600 fast reactor including U.S. technical support for work in Russia 
for disposition of Russian weapon-grade plutonium in fast reactors 
generally.
    The fiscal year 2008 Consolidated Appropriations Act (Public Law 
110-161) appropriated funding for the Mixed Oxide Fuel (MOX) 
Fabrication Facility Project in South Carolina in the Department of 
Energy's Office of Nuclear Energy account and funding for the related 
Pit Disassembly and Conversion Facility/Waste Solidification Building 
projects in the NNSA Weapons Activities account. These projects remain 
important components of the Nation's nuclear nonproliferation efforts. 
In total, the funding commitment to the Department of Energy's 
nonproliferation activities is $1.853 billion in 2009. The MOX project 
is a key component of the U.S. strategy for plutonium disposition. It 
is the centerpiece of a comprehensive approach for disposing of surplus 
weapons-usable plutonium by fabricating it into mixed-oxide fuel for 
irradiation in existing nuclear reactors. This meets key national 
security and nonproliferation objectives by converting the plutonium 
into forms not readily usable for weapons and supports efforts to 
consolidate nuclear materials throughout the weapons complex.
    In addition to its role in the disposition of excess nuclear 
materials at home, the U.S. views the MOX project as a key component of 
U.S. global nuclear nonproliferation efforts in which fissile material 
disposition is the final step in a balanced nuclear nonproliferation 
strategy aimed at employing measures necessary to detect, secure, and 
dispose of dangerous nuclear material. In 2007, the U.S. and Russian 
governments agreed on a framework for a technically and financially 
credible Russian plutonium disposition program based on the irradiation 
of plutonium as MOX fuel in fast reactors. When all required steps have 
taken for implementation, it will enable the United States and Russia 
to meet their commitments under a 2000 agreement to dispose of a 
combined total of 68 metric tons of surplus weapon-grade plutonium--
enough material for approximately over 8,000 nuclear weapons.
    This budget request also seeks funding to dispose of surplus U.S. 
HEU, including downblending 17.4 metric tons of HEU to establish the 
Reliable Fuel Supply, which would be available to countries with good 
nonproliferation credentials that face a disruption in supply that 
cannot be corrected through normal commercial means. This initiative 
marks an important first step creating a reliable nuclear fuel 
mechanism that could provide countries a strong incentive to refrain 
from acquiring their own enrichment and reprocessing capabilities.
       nonproliferation and verification research and development
    The fiscal year 2009 budget requests $275 million for 
Nonproliferation and Verification Research and Development. This effort 
encompasses two primary programs that make unique contributions to 
national security by conducting research and development into new 
technical capabilities to detect illicit foreign production, diversion 
or detonation of nuclear materials. The Proliferation Detection Program 
conducts research across a spectrum of technical disciplines that 
supports the NNSA mission, national and homeland security agencies and 
the counterterrorism community. Specifically, this program develops the 
tools, technologies, techniques, and expertise required for the 
identification, location, and analysis of facilities, materials, and 
processes of undeclared and proliferant nuclear programs. The Nuclear 
Detonation Detection Program produces the Nation's space-based 
operational sensors that monitor the entire planet to detect and report 
surface, atmospheric, or space nuclear detonations. This program also 
produces and updates regional geophysical datasets that enable and 
enhance operation of the Nation's seismic nuclear detonation detection 
network.
   appropriation and program summary tables--out-year appropriation 
             summary tables--fiscal year 2009 budget tables

                               NATIONAL NUCLEAR SECURITY ADMINISTRATION--OVERVIEW
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                    Fiscal Year     Fiscal Year     Fiscal Year     Fiscal Year
                                   2007 Current    2008 Original       2008        2008 Current     Fiscal Year
                                  Appropriations   Appropriation    Adjustments    Appropriation   2009 Request
----------------------------------------------------------------------------------------------------------------
National Nuclear Security
 Administration:
    Office of the Administrator.         358,291         405,987          -3,850         402,137         404,081
    Weapons Activities..........       6,258,583       6,355,633         -58,167       6,297,466       6,618,079
    Defense Nuclear                    1,824,202       1,673,275         -15,279       1,657,996       1,247,048
     Nonproliferation...........
    Naval Reactors..............         781,800         781,800          -7,114         774,686         828,054
                                 -------------------------------------------------------------------------------
      Total, NNSA...............       9,222,876       9,216,695         -84,410       9,132,285       9,097,262
    Rescission of Prior Year      ..............        -322,000  ..............        -322,000  ..............
     Balances...................
                                 -------------------------------------------------------------------------------
      Total, NNSA (OMB Scoring).       9,222,876       8,894,695         -84,410       8,810,285       9,097,262
----------------------------------------------------------------------------------------------------------------


               OUT-YEAR APPROPRIATION SUMMARY--NNSA FUTURE-YEARS NUCLEAR SECURITY PROGRAM (FYNSP)
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                    Fiscal Year     Fiscal Year     Fiscal Year     Fiscal Year     Fiscal Year
                                       2009            2010            2011            2012            2013
----------------------------------------------------------------------------------------------------------------
NNSA:
    Office of the Administrator.         404,081         419,848         436,266         451,771         469,173
    Weapons Activities..........       6,618,079       6,985,695       7,197,844       7,286,912       7,460,318
    Defense Nuclear                    1,247,048       1,082,680       1,076,578       1,111,337       1,133,982
     Nonproliferation...........
    Naval Reactors..............         828,054         848,641         869,755         880,418         899,838
                                 -------------------------------------------------------------------------------
      Total, NNSA...............       9,097,262       9,336,864       9,580,443       9,730,438       9,963,311
----------------------------------------------------------------------------------------------------------------


                                        DEFENSE NUCLEAR NONPROLIFERATION
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                    Fiscal Year     Fiscal Year     Fiscal Year     Fiscal Year
  Funding Profile by Subprogram    2007 Current    2008 Original       2008        2008 Current     Fiscal Year
                                   Appropriation   Appropriation    Adjustments    Appropriation   2009 Request
----------------------------------------------------------------------------------------------------------------
Defense Nuclear
 Nonproliferation:
    Nonproliferation and                 265,197         390,752          -3,556         387,196         275,091
     Verification Research and
     Development................
    Nonproliferation and                 128,911         151,370          -1,377         149,993         140,467
     International Security.....
    International Nuclear                597,646         630,217          -5,735         624,482         429,694
     Materials Protection and
     Cooperation................
    Elimination of Weapons-Grade         231,152         181,593          -1,653         179,940         141,299
     Plutonium Production.......
    Fissile Materials                    470,062          66,843            -608          66,235          41,774
     Disposition................
    Global Threat Reduction              131,234         195,000          -1,775         193,225         219,641
     Initiative.................
    International Nuclear Fuel    ..............          50,000            -455          49,545  ..............
     Bank.......................
    Congressional Directed        ..............           7,500            -120           7,380  ..............
     Projects...................
                                 -------------------------------------------------------------------------------
        Subtotal, Defense              1,824,202       1,673,275         -15,279       1,657,996       1,247,966
         Nuclear Nonprolifera-
         tion...................
Use of Prior Year Balances......  ..............  ..............  ..............  ..............            -918
                                 -------------------------------------------------------------------------------
      Total, Defense Nuclear           1,824,202       1,673,275         -15,279       1,657,996       1,247,048
       Nonproliferation.........
Rescission of Prior Year          ..............        -322,000  ..............        -322,000  ..............
 Balances.......................
                                 -------------------------------------------------------------------------------
      Total, Defense Nuclear           1,824,202       1,351,275         -15,279       1,335,996       1,247,048
       Nonproliferation (OMB
       Scoring).................
----------------------------------------------------------------------------------------------------------------
NOTES: The fiscal year 2007 Current Appropriation column includes additions for international contributions to
  the Elimination of Weapons-Grade Plutonium Production Program in the amount of $5,397,964; to the
  International Nuclear Materials Protection and Cooperation Program in the amount of $4,916,044 and to the
  Global Threat Reduction Initiative Program in the amount of $1,738,800. Fiscal year 2008 adjustments reflect a
  rescission of $15,279,000 as cited in the fiscal year 2008 Consolidated Appropriations Act (Public Law 110-
  161).

                        public law authorization
    Fiscal Year 2008 Consolidated Appropriations Act (Public Law 110-
161)
    National Nuclear Security Administration Act, (Public Law 106-65), 
as Amended

                                     OUT-YEAR FUNDING PROFILE BY SUBPROGRAM
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                    Fiscal Year     Fiscal Year     Fiscal Year     Fiscal Year
                                                       2010            2011            2012            2013
----------------------------------------------------------------------------------------------------------------
Defense Nuclear Nonproliferation:
    Nonproliferation and Verification Research           318,620         334,182         343,397         351,098
     and Development............................
    Nonproliferation and International Security.         151,052         158,711         171,108         175,368
    International Nuclear Materials Protection           400,511         394,626         395,225         404,064
     and Cooperation............................
    Elimination of Weapons Grade Plutonium                24,507  ..............  ..............  ..............
     Production.................................
    Fissile Materials Disposition...............          37,691          27,985          28,435          26,000
    Global Threat Reduction Initiative..........         150,299         161,074         173,172         177,452
                                                 ---------------------------------------------------------------
      Total, Defense Nuclear Nonproliferation...       1,082,680       1,076,578       1,111,337       1,133,982
----------------------------------------------------------------------------------------------------------------

    Senator Dorgan. Mr. Tobey, thank you very much. I did not 
indicate, and I should have at the outset, that we appreciate 
the aggressive initiatives you have undertaken. You have been 
able, when initiatives are presented, to move very quickly and 
be aggressive in those, and we appreciate that.
    I want to ask a few questions and then call on my 
colleagues to inquire.
    In your statement, Administrator Tobey, you say the 
possibility that rogue states or terrorists might acquire 
nuclear and other weapons of mass destruction and their related 
technologies, equipment, and expertise poses one of the most 
serious threats to the United States and international 
security. You say the continued pursuit of nuclear weapons by 
terrorists and states of concern underscores the urgency of 
NNSA's efforts to secure vulnerable weapons, et cetera.
    First of all, I agree with that. I think there is an 
unbelievable danger out there in this world where a lot of 
rogue states and others wish to acquire nuclear weapons, and 
there is a lot of danger of someone acquiring one. You make the 
point that in order to do so you have got to have access to 
fissile material.
    The urgency expressed in this paragraph I think is at odds 
with the budget request by the administration. And let me ask 
the question specifically. You will be spending less money this 
coming year than you did this current year if we agree with the 
President's budget request, substantially less money, frankly, 
hundreds of millions of dollars. And yet, you describe to us 
the urgency of this mission.
    Now, I understand you come here as a requirement to support 
the President's request, but is there not a disconnect here 
with respect to the urgency and the request for less funding?
    Mr. Tobey. Mr. Chairman, I guess I would note, to some 
extent, some context which you actually noted at the start of 
your statement.
    First of all, since September 11, our budget has roughly 
doubled for nonproliferation work. Given that initial ramp-up, 
which was quite steep and allowed us to accelerate our efforts, 
we have continued to try and put the budget on a generally 
upward slope, despite the fact that some of our efforts are 
actually shutting down. They are coming to completion because 
our work is done.
    As you noted, if in fact you take into account what, as you 
also said was a complicated situation, whereby last year's 
congressional action actually took money that had been 
previously appropriated to our funds and took it away from a 
nonproliferation program, the Fissile Material Disposition 
program, it appeared to plus-up our budget when actually what 
it did was take money that had already been given to us and 
reprogram it for a different purpose.
    If you take that into account, and the fact that money 
requested for the elimination of weapons-grade plutonium 
production is going down because our work is being completed as 
we shut down these reactors, and then also take out the one-
time appropriation for the $50 million for the IAEA nuclear 
fuel bank, our request is actually about flat with last year. 
That flat request I think does not reflect an indifference to 
the urgency of our work. I think it actually allows us to 
accelerate our work in our priority areas even as our work is 
coming to completion in areas like the elimination of weapons-
grade plutonium production and the Bratislava Initiative.
    Senator Dorgan. Mr. Tobey, that is a very deft answer. But 
I look at the proposal for future year appropriations--and it 
is true we had a jump after 9/11, but as I look at 2010, 2011, 
2012, and 2013, the proposal here is essentially flat-funding. 
In fact, from 2009 to 2010, there would be a reduction; 2010 to 
2011, a reduction. And my only point is that if there is 
urgency here, I do not think that funding request by the 
President squares with the urgency.
    I note that Dr. Hecker and Dr. Bunn both point out in their 
written testimony that since the early to mid-1990s, the 
investment by DOE in nonproliferation safeguards, security 
technology experts, facilities, and so on has declined.
    So this is not your budget. You are here to support the 
budget that you have been sent up here to support. But as one 
member of this subcommittee, I observe that I think there is 
not much that we do at this moment in the history of this 
country and what we face in the world than to attempt to stop 
the proliferation of nuclear weapons, keep them out of the 
hands of rogue nations and terrorists--there is not much more 
important than that because the detonation of one nuclear 
weapon in a major city anywhere in this world will have 
cataclysmic effects on life on this planet. So I just make that 
point that I think there is a disconnect here between the 
urgency and the funding.
    A quick question, in your testimony, you referenced your 
office's work in overseeing the disablement and dismantlement 
of North Korea's nuclear weapons program. You mentioned the 
need for a legislative waiver of the Glenn Amendment 
restrictions that exist, as well as more substantial funding 
for that. Can you explain the Glenn Amendment restriction to us 
and your need for a waiver? And when must you have the waiver 
in place?
    Mr. Tobey. Sure. The Glenn Amendment prevents us from 
spending money in states that have conducted a nuclear test 
after a certain date. So, therefore, we are restricted from 
spending our funds to oversee the dismantlement or disablement 
of North Korean nuclear facilities.
    We have been able to undertake that work through funding 
from the State Department, which does not have such 
restrictions. Because our DOE personnel have the expertise to 
oversee that, the State Department has essentially contracted 
with us to do that. But those funds are quite limited relative 
to the actual costs that would be necessary with the 
disablement and dismantlement of the North Korean nuclear 
facilities.
    I must admit that it is somewhat uncertain what the exact 
time lines would be for that work. As you probably know, we 
have been waiting now for a period of months for North Korea's 
declaration, which I think would be a signal that we were 
actually going to move ahead. And as a consequence, we have not 
submitted, within our budget, those numbers because I could not 
guarantee that we would spend them.
    What I can tell you is that our estimate, if we were to 
move ahead as fast as we could with disablement, in fiscal year 
2008, our requirements would be roughly $50 million, and in 
fiscal year 2009, it would be about $360 million.
    Now, I think it is also an open question as to exactly how 
those costs might be borne, and I would expect that we would be 
interested in seeing that perhaps some of the other of the six 
parties would be willing to pay for some of those costs. But I 
wanted to lay out, at least as we see it, what the objective 
facts are.
    Senator Dorgan. I would be interested if you could give us 
some analysis. When you say $360 million, how does that break 
down? I do not need it at the moment, but if you would just 
submit it to us, I would appreciate that.
    Mr. Tobey. Okay.
    [The information follows:]

                         DPRK FUNDING BREAKDOWN
                        [In millions of dollars]
------------------------------------------------------------------------
                                      Fiscal Year 2008  Fiscal Year 2009
------------------------------------------------------------------------
By Office:
    NA-21...........................              30               260
    NA-24...........................              20               100
                                     -----------------------------------
        Total.......................              50               360
                                     ===================================
By Function:
    Material Packaging Preparation..              30                95
    Material Packaging and Transport  ................             165
    Disablement and Dismantlement...              12                43
    Verification....................               4.5              44.5
    Health, Safety, and the IAEA....               3.5              12.5
------------------------------------------------------------------------

    Senator Dorgan. Senator Domenici?
    Senator Domenici. Thank you very much, Mr. Chairman.
    Mr. Tobey, my memory slips me. What are the countries that 
are involved in the North Korean action?
    Mr. Tobey. The Six Parties are North Korea, China, Russia, 
Japan, the Republic of Korea, and the United States.
    Senator Domenici. Well, there is not any question with this 
Senator that we should not be bearing the entire monetary 
costs. It looks to me like Japan and even South Korea--they are 
not party to it. Are they? Is South Korea a party to it? Is 
South Korea one of the six countries?
    Mr. Tobey. Yes.
    Senator Domenici. They can well afford and it is very 
important to them. So I hope we hear from those in the position 
of working on this that the United States is at least trying in 
these difficult budget days to ask others to pay some of it.
    Despite occasional problems, the dismantling of the North 
Korean plutonium production infrastructure continues under 
these six party talks. If a breakthrough occurred and all the 
expected facilities decommissioned and materials were removed 
and verification activities were implemented, is that a 
definition of the project that would cost that $300 million-
plus?
    Mr. Tobey. No. That would apply simply to the disablement 
of the facilities at Yongbyon. There may well be other 
facilities that would require dismantlement.
    Senator Domenici. And that would just be more money.
    Mr. Tobey. Correct.
    Senator Domenici. You would assume the same kind of 
imposition on others of partial costs would be the order of the 
day.
    Mr. Tobey. We have undertaken this diplomatic effort as a 
partnership with other countries. It would make sense to me 
that other countries would bear a part of those costs. And 
certainly that has been the case with respect to, for example, 
shipments of heavy fuel oil that have gone to North Korea.
    Senator Domenici. Last week the Intelligence Committee 
received briefings, and some of us received them also as 
members of Armed Services or otherwise on North Korea's nuclear 
assistance to Syria. Apparently North Korea was helping Syria 
build a clandestine nuclear reactor until Israel destroyed the 
facility in the arid desert. Have we obtained any assurance 
from North Korea that it will stop exporting nuclear 
technology?
    Mr. Tobey. I am unaware of an assurance at this point. 
Obviously, that would be a priority of ours within the talks.
    Senator Domenici. Well, it seems to me kind of strange that 
we would be thinking that their talks with us were reliable, 
while at the same time they were reaching the spirit of 
everything by helping Syria directly. Does this create any kind 
of concern on your part as an American representative that that 
is going on?
    Mr. Tobey. Absolutely, sir.
    Senator Domenici. And nothing can be done about it I 
assume.
    Mr. Tobey. I think it is a matter of very serious concern, 
and I think it is an issue that will need to be resolved before 
we can be confident that the North Korean nuclear matter has 
been resolved.
    Senator Domenici. Did North Korea violate any agreements in 
providing this assistance that you know of?
    Mr. Tobey. I should caveat this with the notion that I am 
not a lawyer, and we are only beginning to look at some of 
these issues. But my understanding is that North Korea has 
withdrawn from the NPT. What may have gone on in Syria could 
well be a legal issue with respect to the NPT and Syria, and 
there are, of course, United Nations Security Council 
resolutions that were enacted with respect to North Korea in 
the wake of their nuclear test, essentially prohibiting certain 
forms of trade to include nuclear trade.
    Senator Domenici. I am going to leave that area and ask the 
chairman--I have some questions regarding Russia's 
participation and how much they should pay these days.
    Would you like to hear from some other Senators first? That 
would be all right with me.
    Senator Dorgan. We will come back.
    Senator Feinstein?
    Senator Feinstein. Thank you very much, Mr. Chairman.
    Mr. Tobey, you and I both heard Dr. Hecker speak last 
evening at the Nuclear Threat Initiative where he pointed out 
in his five trips to look at the reactors in North Korea, that 
Yongbyon had been effectively disabled and two other reactors 
dismantled. He also indicated that the North Koreans had sent 
several signals through him to us that they were interested in 
cooperating.
    How do you assess the level of North Korean cooperation at 
this point with the remaining dismantlement issue?
    Mr. Tobey. In terms of the narrow question of disablement 
which, as you have noted, there are DOE people at Yongbyon 
overseeing, the cooperation has generally been good, but has 
slowed recently from what it could be. But Yongbyon, of course, 
is not the whole story. The North Korean declaration would 
necessarily deal with facilities beyond Yongbyon, facilities 
and activities beyond what goes on at Yongbyon. And so far we 
have not seen a lot of progress in that regard.
    Senator Feinstein. Are you, in essence, saying that they 
are not cooperative with respect to--I do not know if you want 
to put forward in this setting what the remaining complications 
are, but if you do, I think it would be useful for the 
committee to hear them.
    Mr. Tobey. I think it is yet to be seen. I think we will 
need to see a North Korean declaration to know how serious they 
are about their September 19, 2005 commitment to abandon all 
their nuclear weapons and existing nuclear programs.
    Senator Feinstein. So you are saying then that there are 
other facilities in addition to these that are up and 
functioning, in other words, with fissile materials?
    Mr. Tobey. Well, I am inferring, to some extent. We know, 
for example, that they conducted a nuclear test. That test was 
not conducted at the Yongbyon site. They have, I think, talked 
in the past about uranium production facilities, mining, et 
cetera, which also would not be at the Yongbyon site. Clearly, 
there were some efforts at weaponization, which likely were not 
at the Yongbyon site.
    Senator Feinstein. Thank you very much.
    Let me go to the International Atomic Energy Agency. I 
strongly support the IAEA. I support its mission. I think it is 
important. I think in the world of the future it is only going 
to grow more important.
    My question is why are we behind on paying our dues?
    Mr. Tobey. Well, we are a strong supporter of the IAEA as 
well, and as you probably know, we are the largest single 
contributor to the IAEA. The dues, I think, are largely paid 
from--although there are some DOE funds that go to the IAEA--
the dues are largely paid by the State Department.
    Senator Feinstein. So do you know why we are behind?
    Mr. Tobey. I am sorry, Senator. I do not know.
    Senator Feinstein. Thank you.
    The third question--I still have some time--is Pakistan. 
Pakistan possesses nuclear weapons. It has an unstable 
government and a dramatic rise of Islamic fundamentalism. Many 
people have called it Ground Zero as far as terror is 
concerned. If you ask some of us what is the most threatening 
nuclear situation, we would have to say it is Pakistan in terms 
of those nuclear facilities.
    The question I have is what steps can we take to confront 
this challenge to see that the weapons remain secure and to 
actually improve the situation in terms of stability of 
government and therefore stability of the nuclear weapons 
program.
    Mr. Tobey. We have extended an invitation to Pakistan to 
join the Global Initiative to Combat Nuclear Terrorism, which 
they have done. They have participated in a Global Initiative 
exercise in China. That initiative is aimed at drawing together 
nations to share best practices, essentially throughout the 
possible prevention and response cycle for, for example, 
security practices to prevent the loss of fissile material, 
emergency response actions to try and recover it, customs and 
border guards, et cetera. And we are hopeful that Pakistan will 
avail itself of this opportunity to ensure that they have the 
best practices possible.
    I regard their military as both professional and committed 
to nuclear security.
    Senator Feinstein. My time is up. Thank you very much, Mr. 
Chairman.
    Senator Dorgan. Senator Allard?
    Senator Allard. Thank you, Mr. Chairman. I would like to 
start off with a question on the nuclear detonation detection 
program. We rely heavily on our space assets to implement that 
program, and we are getting a greater concern, I think, from a 
number of agencies about the risk that our space assets are 
being placed in, particularly in light of the fact that China 
had demonstrated their ability to knock out a satellite. They 
did their own.
    What kind of effort are you making sure to try and protect 
those assets that we rely so much on our nuclear detonation?
    Mr. Tobey. Senator, as you might imagine, the details of 
how we might protect such systems pretty quickly get into 
classified material.
    Senator Allard. What I need to know is; are you working 
with other agencies to look at that problem?
    Mr. Tobey. Yes, sir. I would note that diversifying, if you 
will, proliferating our ability to detect such detonations is 
an important response. If we have redundancy in our ability, it 
makes it more difficult for another nation to eliminate that 
capability.
    Senator Allard. I just wanted to have some assurance that 
you were looking at this risk.
    Mr. Tobey. We regard this as a very high priority.
    Senator Allard. I realize that the details of it would be 
something that we would not want to talk about in a setting 
like this, but just your assurance that you have looked at it. 
I think it does not hurt to let people know that we have some 
vulnerability out there and they do affect our ability to 
determine whether other countries are keeping their agreement 
as far as nuclear weapons agreements are concerned at least.
    My understanding is that the language on the Glenn 
amendment--attempts are being made to put that in the 
supplemental bill. Is that correct?
    Mr. Tobey. That is my understanding, Senator.
    Senator Allard. And why are we selecting the supplemental 
bill as opposed to the regular appropriation bill? Does it have 
to do with timing or does it have to do with sort of an 
aversion to the regular appropriation process?
    Mr. Tobey. I confess that that decision was not mine. I am 
not an expert in legislative procedure. I think it was done in 
consultation with people on the Hill. I think that was chosen 
as the most immediate and likely vehicle to pass.
    Senator Allard. It is important that we deal with this 
language, the sooner, the better.
    Mr. Tobey. I think in terms of minimizing risk, we would 
not be able to go forward if there is not diplomatic progress, 
so the sooner, the better. But I cannot say to you that 
tomorrow we will be able to do all that we would wish to do in 
North Korea. It is difficult to predict.
    Senator Allard. Now, let us just assume that we grant the 
waiver in a supplemental appropriation bill, and phase 3 work 
begins as quickly as possible. When would you anticipate 
completion of phase 3 in a best case scenario?
    Mr. Tobey. Completion of phase 3 would probably be a period 
of years. Even the completion of phase 2 would----
    Senator Allard. Five years, 10 years, decades?
    Mr. Tobey. I would say about 5 years would be fair. Much 
depends on the level of cooperation with North Korea, and it is 
difficult to predict.
    Senator Allard. Yes, I understand.
    Mr. Tobey. The canning campaign and even the work that we 
have undertaken now has varied significantly according to the 
level of cooperation that the North Koreans have--but even the 
current phase, in terms of the fuel that is in the reactor now 
and dealing with that, would likely take the balance of this 
year.
    Senator Allard. Now, I would like to move on to the fissile 
materials deposition. That is irradiation of plutonium. It was 
in the 2000 agreement. How far along are we in reaching the 
2000 agreement, and what percentage is the United States 
responsible for disposing of? Can you share that with us?
    Mr. Tobey. As you know, I am sure, sir, the 2000 Plutonium 
Management and Disposition Agreement provided for the 
disposition of 34 metric tons each by the United States and 
Russia.
    Senator Allard. Right.
    Mr. Tobey. Frankly, not a lot of progress had been made up 
until a couple of years ago. Neither the United States nor 
Russia seemed to have set on a disposition path.
    About a year ago, some Members of Congress had asked us to 
undertake three activities. One, make sure that our baseline 
was credible and defensible for the facility that we are 
building in South Carolina. I believe that we have done that. 
We have set a baseline. We brought in the preconstruction 
activities under that baseline and slightly ahead of time.
    Senator Allard. This is the MOX-plus?
    Mr. Tobey. The MOX facility, exactly.
    And we have significant contingency and reserves. 90 
percent of the design is complete, which is very, very high for 
a facility of this size at this stage of construction. 
Construction began on August 1. So it is well underway. I think 
our path is pretty clear.
    The second thing that I understood Congress to ask us to do 
was to look at additional missions for the facility. We found 
three potential additional missions, and we are in a position 
to execute those missions if there is a decision to do so. We 
do not need to make that decision today, even under optimal 
circumstances. But they would add substantially to the mission 
of the facility, disposing of perhaps 50 percent, maybe even 
more, additional material; making it a much more cost effective 
project.
    And then third, they asked us to try and get the Russian 
program in order. Secretary Bodman and Rosatom Director 
Kiriyenko signed a joint statement several months ago that 
provides for what we believe is a technically and financially 
credible path for the Russian disposition of plutonium, using 
fast reactors. I think it is key to understand that the Russian 
path is consistent with their own energy plans and, therefore, 
is more likely to be pursued, not out of a sense of obligation 
or because we blindly trust what they are doing, but out of 
Russian self-interest.
    Senator Allard. Thank you. My time is expired.
    Senator Dorgan. Senator Domenici, do you have some 
additional questions about Russia?
    Senator Domenici. Yes, I do.
    I did not understand your answer when you talked about 
additional work or missions for the MOX facility. What are you 
talking about?
    Mr. Tobey. The Department will use the U.S. MOX facility to 
dispose of at least 34 metric tons of surplus weapon-grade 
plutonium oxide, which includes both nuclear weapons pits and 
certain other non-pit plutonium metal and oxide material. As 
described in a technical report that the Department submitted 
to Congress in July 2007, the Department is also considering 
sending additional plutonium from nuclear weapons pits declared 
surplus to national security needs, and additional amounts of 
non-pit plutonium, pending further environmental and technical 
analysis and final decisions by the Department. Also, as 
described in the July 2007 technical report, the facility may 
provide an option to fabricate initial core loads for fast 
reactors to support the Global Nuclear Energy Partnership, 
depending on analysis and decisions which could optimally be 
made well into the future.
    Senator Domenici. I am glad to hear that there are other 
missions, and we are very fortunate that we struck a deal with 
the Russians. Even though they did not live up to their side, 
it got us off our duff and we started the MOX program, about 25 
years late or 30, but that is pretty good.
    Let me ask you on the Russian assistance. Since 1992, the 
U.S. Government has spent nearly $10 billion on the Nunn-Lugar-
Domenici program on efforts to improve controls on nuclear 
weapons materials and expertise. Most of it has been spent in 
Russia. As security upgrades are completed and material 
returned or eliminated, where does the program go from here?
    Russia now has a budget surplus as a result of oil and gas 
exports. What is NNSA doing to try to see that Russia pays its 
share of the nonproliferation costs for securing its material? 
And I will ask Dr. Bunn some questions on that subject. Could 
you answer that part?
    Mr. Tobey. Certainly, sir, I will try. We have made clear 
to the Russians that Congress has directed that our work will 
end in 2012. So they are on fair warning that in 2012, U.S. 
nuclear material security efforts in Russia will end. And we 
expect them to sustain the efforts that we have put into place. 
As you noted, our investments have been substantial. NNSA's 
will be about $2 billion.
    We have begun to compare with the Russians budgets for the 
first time, to my knowledge anyway. When I sat down with our 
Russian counterpart who works for the 12th GUMO, Lieutenant 
General Verkhovtsev, he told us about his budget request for 
sustaining nuclear material security upgrades. He assured us 
that he had gotten what he had requested. I think that level 
will have to go up if it is going to truly be sustained, but 
for the first time, we are beginning to compare our budgets so 
that as we draw down toward that 2012 mark, they recognize they 
will need to step up in order to ensure that the investment 
that we have made in nuclear security is sustained.
    I would also note that we are making some progress on cost 
sharing in other ways, so for example, the agreement that we 
signed with them to accelerate radiation detectors at Russian 
border crossings provides for Russia bearing half the costs of 
those installations.
    Senator Domenici. Well, I just would like--since you 
indicated I have been very active in this whole area--it is 
correct. I do want to express my thoughts even though I have 
only about 8 months left here. I believe that insisting that 
Russia pay the maximum amount as their share on these programs 
seems to me to be important if we are going to maintain the 
programs because I think with us having very unbalanced 
budgets, borrowing money in huge quantities to keep our 
Government going and Russia being very solvent, I think a 
couple of these programs would die on the floor of the Senate 
if somebody brought that subject up and said this is no longer 
fair. So I just urge that wherever we can, the Russians be 
asked to pay their share.
    It was not the case when we started. We paid for all of it, 
the early programs that Sig Hecker is aware of, the cameras 
that were purchased for them and the facilities so they would 
have doors that were reliable instead of open, hanging things. 
You remember that? We paid for all that. And I guess that was 
right. It was probably good money spent.
    Mr. Tobey. Senator, I certainly agree with all of that, and 
we are working in that direction. I would note though that just 
because a Russian oil company is flush with cash--and they 
are--does not necessarily mean that nuclear institutes in the 
Urals are flush with cash. And we spend the money there because 
it is in our interest.
    Senator Domenici. I understand.
    Mr. Tobey. I know you know this. I just wanted to make 
absolutely clear for others that we do this because it is in 
our interest that Russian nuclear weapons material be secured.
    Senator Domenici. Well, there is no question it is in our 
interest. We know that. I have been a staunch advocate. 
Sometimes nobody objected. Sometimes they did not even ask a 
question on the floor about us using this money.
    But I am just telling you what I think on the future, and I 
think the Russians understand. And I know they have budgets 
that come from the big central headquarters and they do not 
always get what they need, but that is really not an excuse for 
an adequate match and adequate payment because they would pay 
it from central headquarters if they knew we were not, if they 
were serious about nonproliferation.
    Last year Congress approved an increase of $125 million 
above the request for nonproliferation and verification 
research and directed you to invest $20 million toward the 
building of a laboratory scientific capability. It appears that 
this direction has not been followed. How was the money spent 
and what long-term capability has NNSA invested in at the labs?
    Mr. Tobey. Sir, we have paid close attention to that 
direction, and I actually do have a list of investments. I have 
talked to your staff about this, and I admit that we had not 
provided the level of detail that would make this clear. But I 
brought with me today that level of detail, and I would be 
happy to provide it.
    Senator Domenici. Will you please furnish it?
    [The information follows:]
 Nonproliferation and Verification R&D--Fiscal Year 2008--$133 Million 
                           Plus-Up Spend Plan
  --$25.0 million PNNL Area 300 (subject to 1 percent rescission)--
        spent on balance of construction (PSF) and completion of the 
        Foundation/Steel contract.
  --$20.5 million.--``an additional $20.5 million is provided for 
        nuclear explosion monitoring'' (subject to 1 percent 
        rescission).
    --$5 million.--``The Department is directed to conduct a 
            competitive solicitation open to all Federal and non-
            Federal entities toward an integrated suite of research, 
            technology development and demonstration areas including 
            infrasound, hydro acoustics for ground based systems treaty 
            monitoring activities. The competitive process should award 
            not less than $5 million of the additional funding for 
            nuclear explosion monitoring for research and development 
            for ground-based treaty monitoring.''
    --$2.5 million.--For national laboratory seismic calibrations of 
            threat regions and radionuclide system activities.
    --$2.0 million.--Detonation forensics technology and related base 
            science activities.
    --$11.0 million.--Space-based nuclear detonation detection system 
            R&D.
  --$20.0 million ``for the implementation of a sustained research and 
        development capability in nuclear detection and nuclear 
        materials security'' (subject to 1 percent rescission).
    --$10.0 million Radiation Detection R&D.
    --$5.0 million Radiation Detection Materials R&D.
    --$5.0 million Nuclear Material Security R&D (supporting nuclear 
            safeguards (NA-24) and alternate source development (NA-
            21)).
  --$60.0 million ``in proliferation detection to expand research in 
        critical research and development for high-risk, high return 
        nuclear detection capabilities'' (subject to 1 percent 
        rescission).
    --$5.0 million, Small Business Innovation Research taxes.
    --$1.0 million, foreign nuclear weaponization detection R&D 
            program, Goals, Objectives and Requirements and technology 
            road-mapping process.
    --$0.5 million Hf-178 project at request of SASC.
    --$20 million University basic research.
    --$9 million Testing and Evaluation, including upgrade of 
            infrastructure at Nevada Test Site.
    --$22.26 million, fully fund fiscal year 2008 projects/re-
            capitalization and equipment purchases at National Labs.
  --$7.5 million Earmarks (subject to 1.6 percent rescission).
    --$3.0 million GMU.
    --$1.5 million New England Research.
    --$2.0 million TAMU/NSSPI.
    --$1.0 million ODIS.

    Mr. Tobey. Mr. Chairman, I would like to put in the record, 
for purposes of the committee's use, a chart on 
nonproliferation funding just because I want it to be noted 
that we moved the MOX program, which is about $500 million. We 
moved it from nonproliferation to another part of our budget, 
and that did change the congressional funding line 
substantially. But it does not mean we did less. It is just 
that we did not put MOX in the nonproliferation category. Maybe 
it belongs there but we took it out and put it somewhere else.
    Senator Domenici. That is my last question. I will submit 
some in writing.
    I want to thank you for all the work you have done, and I 
wish you well especially in the North Korean situation. I just 
cannot believe, with everything everyone knows about what they 
are doing and the fact that they are going to have to do 
something in their self-interest soon to get help--and I am 
sure of that. We have to keep the pressure on some way and get 
it done. Thank you.
    Mr. Tobey. Thank you, sir.
    Senator Domenici. Thank you, Mr. Chairman.
    Senator Dorgan. Senator Domenici, thank you.
    I believe Senator Feinstein has one additional question?
    Senator Feinstein. One additional question.
    Mr. Tobey, Dr. Bunn in his statement states a goal that I 
think is a very good one, and he says, ``Our goal should be to 
remove all nuclear material from the world's most vulnerable 
sites and ensure effective security wherever material must 
remain within 4 years.'' Now, that is a quote, but I think it 
is a worthy goal.
    How does this budget help us achieve that? I can ask this 
in writing too. What more needs to be done? What additional 
resources are necessary in what areas, and how would a 
verifiable global treaty ending production of nuclear materials 
for weapons complement this effort?
    If you can answer any of it offhand, that would be great. I 
would like to send this to you in writing.
    Mr. Tobey. I would be happy to give you a fuller answer.
    Senator Feinstein. Good.
    Mr. Tobey. I can offer an answer to at least some of that.
    First of all, as I mentioned earlier, we are mindful of the 
suggestions that Matt Bunn makes and we will certainly take a 
hard look at whether or not we can achieve that goal. I would 
argue that we actually do take significant steps toward it with 
this budget in several ways.
    First of all, we continue our acceleration of the 
conversion of HEU reactors to LEU and the repatriation of fuel. 
I know that has been a concern of his, and over the last year 
or two, we have picked up the pace, in part in response to some 
of the suggestions that he has made.
    We also will continue our work to secure nuclear weapons 
material in Russia, completing the security upgrades under the 
Bratislava Initiative, and extending actually beyond that to a 
few sites that we have received since then. I regard that as, 
frankly, further evidence of success because it shows that the 
cooperation in Russia is even more extensive than it had been 
in the past.
    And then we will also be working in other ways to minimize 
the use of highly enriched uranium. So, for example, we are 
looking at development of new fuels that will allow the 
conversion of the final set of reactors that will require a 
somewhat different type of fuel.
    Senator Feinstein. Thank you. That is very helpful. We will 
put it in writing too in any event. Thank you.
    Thank you, Mr. Chairman.
    Senator Dorgan. Administrator Tobey, thank you very much 
for your work and thank you for being with us today. We 
appreciate your testimony.
    Mr. Tobey. Thank you, Mr. Chairman.
    Senator Dorgan. We look forward to continuing to work with 
you.
                       NONDEPARTMENTAL WITNESSES

STATEMENT OF DR. SIEGFRIED S. HECKER, CO-DIRECTOR, 
            CENTER FOR INTERNATIONAL SECURITY AND 
            COOPERATION, STANFORD UNIVERSITY
    Senator Dorgan. Next we will ask our other two panelists to 
come forward, Dr. Matthew Bunn, who is a senior research 
associate at the Belfer Center for Science and International 
Affairs at the John K. Kennedy School of Government at Harvard 
University. He will be joined by Dr. Siegfried Hecker, the co-
director of the Center for International Security and 
Cooperation at Stanford University.
    This committee appreciates the work that both of you do, 
and we will ask you to proceed. Dr. Hecker, would you proceed 
first and then Dr. Bunn? And then we will inquire. As I 
indicated previously, your entire statement will be made a part 
of the permanent record and you may summarize.
    Dr. Hecker. Thank you, Chairman Dorgan, Senator Domenici, 
Senator Feinstein, and Senator Allard. It is a great pleasure 
to be here, and thank you for inviting me to comment on the 
National Nuclear Security Administration's defense nuclear 
nonproliferation program and its 2009 budget.
    Thank you for admitting my written statement. What I will 
do is to briefly summarize the three main points that I have in 
my statement.
    But let me first say that my opinions have been shaped by 
34 years at the Los Alamos National Laboratory and nearly 20 
years of practicing nonproliferation with my feet on the ground 
in places like Russia, China, India, and North Korea and 
Kazakhstan. And I must say that much of this I have done with 
the strong encouragement and support of Senator Domenici, and I 
thank him for that over the years.
    My first point is that--and this has really been covered in 
great detail by all of your statements, but just to reiterate 
my point--the proliferation of nuclear weapons and weapons 
capability is growing. Today, as you have indicated, we face 
the threat from North Korea, nuclear ambitions in Iran, the 
nuclear puzzle in Syria, and the recently nuclear-armed states 
in Pakistan and India. We have an improved but not satisfactory 
nuclear security situation in Russia and the other states of 
the former Soviet Union. The danger of nuclear terrorism is 
real.
    But this is not a fight that the United States can win 
alone. We cannot simply push back the dangers beyond our own 
borders. It is imperative that we forge effective global 
partnerships to combat the threat of nuclear terrorism and the 
proliferation of nuclear weapons. And meeting these challenges 
requires diplomatic initiative and technical cooperation. The 
United States must lead in that diplomacy and the DOE/NNSA must 
provide the technical leadership and capabilities.
    The NNSA has done a commendable job in nuclear threat 
reduction and in combating nuclear proliferation. However, as 
you have also indicated, my own sense is that these activities 
are not commensurate with the magnitude of the urgency of the 
threat that we face today. So I very much agree with the 
sentiment that you have expressed.
    A second point is cooperative threat reduction, as was 
already indicated, began with Nunn-Lugar, followed by Nunn-
Lugar-Domenici legislation, directed at the aftermath of the 
breakup of the Soviet Union. We must stay engaged with Russia 
and the other states of the Soviet Union. Much progress has 
been made, but more needs to be done. We have to change the 
nature of the relationship to one in which Russia carries more 
of the burden. So, Senator Domenici, I very much agree with 
your comment. However, we must also make sure that we continue 
to have a seat at the table, and to do that requires some 
investments of our fund to do so to make certain that the 
Russians actually work in the areas that are also still very 
much in our common interests.
    We should also expand the cooperative reduction programs 
aggressively to countries that require technical or financial 
assistance. The nuclear threat exists wherever nuclear 
materials exist. These materials cannot be eliminated, but they 
can be secured and they can be safeguarded. We should more 
strongly support the IAEA and provide support for countries, 
for example, that try to implement the U.N. Security Council 
Resolution 1540 to prevent nuclear terrorism.
    But mostly, Mr. Chairman, in the spirit of what you said in 
your opening statement, as we look back in the future to what 
should we have done today, I look back to the early 1990s when 
we at the laboratory and the nonproliferation communities had 
an enormous number of ideas as to what to do when the Soviet 
Union breaks up. And similarly now, we must be equally creative 
in looking out and seeing what should we be doing. The ideas 
are out there, and it is a matter of making sure that we 
encourage them.
    But we must also enlist the other nations such as China, 
India, and for that matter, Russia to build a strong global 
partnership to prevent proliferation and nuclear terrorism. 
India and China have, for the most part, sat on the sidelines 
while the United States has led this fight. And Russia has not 
engaged commensurate internationally with its nuclear status. 
And these efforts are particularly important today as we look 
at the potential renaissance of global nuclear power.
    And the third point that I want to make is that the 
hallmark of all of these efforts of global cooperation must be 
technology partnership and an in-country presence. The DOE/NNSA 
has the principal expertise in this country in its laboratories 
across the complex. It should be applauded for sending its 
technical experts around the world, often in very difficult 
situations. And I must tell you just this past February, in 
fact, on Valentine's Day, I ran into the DOE contingent in 
North Korea in Yongbyon on a bitterly cold day. They were not 
out there for a party.
    However, there are both structural reasons and budgetary 
shortfalls that we find today that that talent that we rely on 
is actually fading away. And the issue that I want to make sure 
that I put on the table is that, of course, budgets are 
extremely important, but budgets are not everything. We do not 
have in place today the necessary personnel recruitment. We 
have no longer the working environment in the laboratories or 
the pipeline of students from the universities to replenish the 
talent to do that job. So the working environment, the research 
environment of these laboratories is also crucial, along with 
appropriate budgetary support. So I strongly support the NNSA 
Next Generation Safeguards Initiative which is aimed at 
tackling this problem as to what does one do about the 
capabilities in our laboratory system.
    Mr. Chairman, when I first visited Russia's secret cities 
in 1992, shortly after the fall of the Soviet Union, I feared 
that its collapse may trigger a nuclear catastrophe. The fact 
that nothing really terrible has happened in the intervening 16 
years is in great part due to the DOE/NNSA programs that you 
are considering here today. And we must be just as innovative 
now, as I had indicated, and just as creative to deal with the 
threat that has changed dramatically since 1992.

                           PREPARED STATEMENT

    Now, since I see my time is up, in my statement I also 
mention the implications of recent trips to North Korea. As has 
been pointed out, I have been there five times over the past 4 
years, and I was also recently in India. But since I am out of 
time, I will leave those for your questions.
    Thank you for your attention.
    [The statement follows:]
             Prepared Statement of Dr. Siegfried S. Hecker
    Thank you Chairman Dorgan, Senator Domenici and distinguished 
members of the committee for giving me the opportunity to comment on 
the National Nuclear Security Administration's Defense Nuclear 
Nonproliferation programs and 2009 budget request.
    Today I would like to make three points:
  --Nuclear threat reduction continues to be one of the highest U.S. 
        national security priorities. Unfortunately, the threat has 
        become more complex and challenging since threat reduction 
        programs began in 1992 with Russia and other states of the 
        former Soviet Union. Today, we face a nuclear threat in North 
        Korea, nuclear ambitions in Iran, a nuclear puzzle in Syria, 
        recently nuclear-armed states in Pakistan and India, and an 
        improved, but not satisfactory, nuclear security situation in 
        Russia and other states of the former Soviet Union. Moreover, 
        global energy and climate forces have brought about a 
        resurgence of interest in commercial nuclear power that places 
        additional demands on the threat reduction agenda. I favor a 
        significant expansion of DOE/NNSA's programs in these areas 
        beyond the President's budget request.
  --The greatest threats we face today are a breakdown of the 
        nonproliferation regime and the possibility that terrorists may 
        acquire nuclear weapons or fissile materials. To keep the most 
        dangerous materials out of the hands of the world's most 
        dangerous people requires a global network of nations that are 
        committed to and capable of securing their own nuclear 
        materials, preventing export, and are committed to 
        nonproliferation. We must aggressively expand cooperative 
        threat reduction programs to nations that require either 
        technical or financial assistance and enlist those countries 
        that have the technical and financial resources, but have 
        historically played either a limited or no role in 
        international nonproliferation efforts--namely, Russia, China 
        and India. The hallmark of such cooperation must be 
        partnership, technology and in-country presence.
  --Nuclear threat reduction and nonproliferation efforts must have 
        strong technical underpinnings and participation. The close 
        interplay of technology and diplomacy is crucial to effective 
        policy and implementation. The NNSA and its laboratories 
        represent the primary technical talent in these areas. 
        Unfortunately, financial support and the nuclear research 
        environment are insufficient to meet the challenges confronting 
        us. I strongly support the DOE/NNSA Next Generation Safeguards 
        Initiative and other efforts aimed at attracting more technical 
        talent to these important areas.
    Mr. Chairman, you requested that I comment on the adequacy of the 
President's fiscal year 2009 budget request for the National Nuclear 
Security Administration nuclear weapon nonproliferation efforts as well 
as the sufficiency of those efforts generally. The committee staff also 
requested that I comment on the broader policy issues, including on my 
recent visits to North Korea and India and what we should be doing to 
secure fissile materials around the world. I will touch on those 
subjects briefly and attach two articles that deal with some of these 
issues in greater detail.
    the budget and adequacy of the defense nonproliferation programs
    I will restrict my comments to the big budgetary picture. The 
overall budget request is modest compared to the importance and impact 
of NNSA's nonproliferation efforts. I recognize the demands on the 
Federal budget, yet the amount of money spent on these programs is 
small compared to dealing with the consequences of failure in any of 
its elements.
    I strongly support NNSA's comprehensive effort to deal with nuclear 
threats and steps that it has taken to tailor its programs to the 
changing nature of the threats. Nevertheless, I believe we need a 
greater sense of urgency in completing some of the ongoing efforts and 
in launching new ones with adequate budgetary support.
    The greatest threats we face today are a breakdown of the 
nonproliferation regime and the possibility that terrorists may acquire 
nuclear weapons or fissile materials. The most immediate challenges are 
North Korea and Iran. However, the recent developments in Syria 
demonstrate that efforts to acquire the bomb are more widespread than 
believed. The importance of keeping fissile materials out of the hands 
of terrorists is generally appreciated; the technical difficulty of 
doing so is not. I describe the technical challenges in detail in 
Attachment I. In addition, the resurgence of nuclear power, necessary 
to combat the world's energy and environmental crisis, must be 
supported by enhanced nonproliferation efforts if it is to succeed.
                    changing partnership with russia
    The nuclear threat changed dramatically with the end of the Cold 
War and the breakup of the Soviet Union. We came to be threatened more 
by Russia's weakness than its strength. Nunn-Lugar legislation followed 
by Nunn-Lugar-Domenici legislation established the Cooperative Threat 
Reduction program aimed primarily at Russia and the other states of the 
former Soviet Union. This innovative approach of working cooperatively 
with these nations helped them deal with the unprecedented situation of 
how to provide security for an enormous arsenal of nuclear weapons and 
an equally huge stockpile of fissile (bomb-grade) material in states 
that changed their political and economic systems dramatically, and 
whose centrally-controlled institutions collapsed almost overnight. 
Much progress has been made in helping Russia and the other states 
improve the security of their nuclear weapons and materials. Most 
importantly, nothing really terrible has happened in the Russian 
nuclear complex in the 16 years since the breakup of the Soviet Union.
    However, much remains to be done. My colleague, Dr. Matthew Bunn, 
who is also testifying today, has provided detailed annual status 
reports of accomplishments and challenges. I want to provide a 
perspective based on my many visits to the Russian nuclear complex 
since 1992. As director of the Los Alamos National Laboratory at the 
time, I visited the closed and formerly secret cities housing Russia's 
nuclear weapons laboratories in February 1992. The nuclear facilities 
and materials that were previously protected by guns and guards were 
now vulnerable. We developed scientific collaborations to build trust, 
which allowed us, 2 years later, to sign the first contracts with three 
Russian institutions for materials protection, control and accounting 
(MPC&A) cooperation. This lab-to-lab program helped Russia begin to 
develop a modern system of protection and safeguards to secure its 
nuclear materials. Our focus was always that it is in their best 
interest to secure their own materials. The responsibility is theirs; 
all we can do is help. We helped them expand this program to the 
Russian nuclear navy and the civilian sector. We then also expanded the 
program to some of the other states of the former Soviet Union. With 
Senator Domenici's help, we tackled the problem of helping Russia 
secure its nuclear knowledge by engaging Russian technical specialists 
in various civilian research and industrial projects to help in the 
massive worker reorientation challenge the Russian nuclear complex 
faced. These programs have recently come under unjust criticism by the 
Government Accountability Office. It was critical to augment the 
hardware-oriented technology programs with people-oriented efforts to 
enhance nuclear security.
    Much of the focus on the MPC&A program with Russia has been to 
complete physical security upgrades. This phase of the program is 
nearing completion. Together with the general tightening of security 
during the Putin administration, these efforts have greatly improved 
the current nuclear security situation in Russia. The focus of U.S. 
efforts must now shift to the much more difficult problem of having the 
Russian complex sustain these security improvements and to develop 
better practices in the control and accounting of nuclear materials. 
Progress has been slow, partially because Russia has reverted to the 
Soviet practice of relying mostly on physical security and secrecy, and 
partly because Russia has a very different view of its vulnerabilities 
than we do. Russian practices reflect the belief that the Chechen 
rebels pose the greatest threat. Much less attention is paid to a 
potential insider threat.
    A different approach to cooperative threat reduction will be 
required to make additional progress with the Russian nuclear complex. 
Money will be less important, but not irrelevant. In the 1990s, U.S. 
financial support was imperative. Today, thanks to oil prices of nearly 
$120 a barrel, Russia has a large budget surplus. Yet, if the United 
States is to continue to influence Russian security and 
nonproliferation practices, it will need to continue to invest some 
funds to have such influence. Once Russia completes the current round 
of facility security upgrades with NNSA support, then I recommend that 
NNSA support its laboratories to conduct a broad range of cooperative 
programs with the Russian nuclear complex. Some programs will have 
direct security implications--for example, continued work on best 
practices for MPC&A (especially control and accounting), promoting a 
security culture, eliminating the use of highly enriched uranium (HEU) 
in civilian applications, instrumentation development for nuclear 
detection and forensics, nuclear attribution, nuclear materials 
registries and databases, regulations and practices to protect 
radiation sources, emergency response to nuclear incidents, and 
proliferation resistant reactors and fuel cycle research. Other 
programs will have indirect, but still important, benefits--for 
example, nuclear energy R&D, environmental R&D, fundamental research in 
nuclear materials, radiochemistry and analytical chemistry techniques. 
We must also continue to encourage Russia to eliminate much of its 
surplus stock of fissile materials and to consolidate its still massive 
nuclear complex. In summary, we should strengthen and broaden our 
nonproliferation collaboration with Russia by supporting our own 
technical specialists to work with Russian technical counterparts. We 
should phase out direct financial support to Russia except in those 
cases where the investment is necessary to keep it meaningfully 
engaged.
          expanding cooperative threat reduction beyond russia
    I applaud the NNSA efforts to expand its nonproliferation 
activities and threat reduction programs beyond Russia. These programs 
in the other states of the former Soviet Union have significantly 
reduced the global nuclear threat. The breakup of the Soviet Union 
created four nuclear weapons states out of one. The CTR program 
reversed that dangerous situation by getting Ukraine, Kazakhstan and 
Belarus to return Soviet nuclear weapons to Russia by 1996. However, 
these states also had considerable inventories of nuclear materials and 
a robust nuclear infrastructure that was largely left in place. 
Similarly, other states such as Uzbekistan and Georgia had nuclear 
materials and nuclear facilities. The former Soviet satellite states in 
Eastern Europe also had vulnerable nuclear materials and facilities. 
NNSA cooperative programs in these countries have reduced, but not 
eliminated, the threat. These programs should be expanded and molded 
into longer-term partnerships with these states to help them manage 
their nuclear dangers while also getting the benefits of civilian 
nuclear applications.
    The NNSA also correctly assessed the need for cooperative nuclear 
threat reduction beyond the borders of the former Soviet Union. To keep 
the most dangerous materials out of the hands of the world's most 
dangerous people requires a global network of nations that are 
committed to and capable of securing their own nuclear materials and 
preventing export. There are approximately 40 countries that possess 
either nuclear materials or the necessary nuclear infrastructure to 
produce nuclear materials. There are more than 100 countries that use 
ionizing radiation sources (for medicine, industry, agriculture or 
research) that could fuel a radiological dispersal device; the so-
called dirty bomb. Whereas the importance of securing nuclear materials 
is generally appreciated today, the technical difficulty is not. In 
Attachment I to this testimony I detail why this is much more difficult 
than simply locking up these materials the way we guard gold at Fort 
Knox.
    The technical components of global security initiatives are 
crucial. To secure nuclear materials requires global partnerships and 
global reach. The DOE/NNSA and its laboratories are in the best 
position to develop such partnerships. I recommend a two-pronged 
approach: (1) Aggressively expand cooperative threat reduction to 
countries that require either technical or financial assistance; and 
(2) Enlist those countries that have the technical and financial 
resources; but have historically played either a limited or no role in 
international nonproliferation efforts. In both cases, cooperation with 
the International Atomic Energy Agency (IAEA) is imperative.
    Aggressively Expand Cooperative Nuclear Threat Reduction 
Globally.--The NNSA Global Threat Reduction Initiative has made 
significant gains in securing or removing highly enriched uranium from 
research reactors and research facilities in countries that had 
difficulty securing it. For example, partnerships between host 
countries, the United States, Russia and the IAEA resulted in the 
repatriation of HEU from Romania, Bulgaria, Uzbekistan and other 
countries to Russia. In many cases, the NNSA has helped to convert 
research reactors to operate with low enriched uranium to remove the 
proliferation risk and allow the removal of HEU. Similar partnerships 
have helped countries to better manage and secure their radiation 
sources. The financial requirements for these efforts have been modest. 
These programs should be expanded and expedited.
    Countries such as Pakistan, Libya and Kazakhstan pose special 
challenges. In my view, Pakistan represents the greatest nuclear 
security challenge. It has all the technical prerequisites: HEU and 
plutonium; enrichment, reactor and reprocessing facilities; a complete 
infrastructure for nuclear technologies and nuclear weapons; largely 
unknown, but questionable, nuclear materials security; and missiles and 
other delivery systems. It views itself as threatened by a nuclear 
India. It has a history of political instability; the presence of 
fundamental Islamic terrorists in the country and in the region; 
uncertain loyalties of some civilian (including scientific) and 
military officials; and it is home to A.Q. Khan, the world's most 
notorious nuclear black marketeer. Helping Pakistan secure its nuclear 
materials during these challenging times is made difficult by the 
precarious position of its leadership and the anti-American sentiments 
of much of its populace. Yet, such cooperation is imperative.
    Libya presented a very special case that required technical 
cooperation. Once Libya decided it was in its interest to eliminate its 
covert nuclear program, it was crucial to do so effectively and 
completely, and to learn as much as possible about nonproliferation 
patterns and practices from Libya's nuclear program history. NNSA 
technical specialists did a superb job in both cases.
    Kazakhstan also presented a special challenge. It possessed nuclear 
materials and nuclear reactors when it achieved independence from the 
Soviet Union. Next to Russia, it had the most extensive and 
sophisticated nuclear infrastructure, including the sprawling 
Semipalatinsk nuclear test site. Much progress has been made thanks to 
NNSA cooperative programs, those of the Department of State and the 
Department of Defense, and the non-governmental efforts of the Nuclear 
Threat Initiative. Yet, several serious challenges remain, such as the 
final disposition of the spent fuel from its fast reactor at Aktau, 
remain.
    I recommend that the NNSA extend its technical reach even further. 
By working closely with the IAEA, it can help countries effectively 
meet their obligations under the United Nation's Security Council 
Resolution 1540. Resolution 1540 requires states establish and enforce 
legal barriers to acquisition of weapons of mass destruction whether by 
terrorists or by states. It requires states to ensure that they have 
the infrastructure in place to address the threat posed by non-state 
actor involvement in any aspect of the proliferation of weapons of mass 
destruction. The United States was instrumental in developing this 
resolution and in getting it adopted. Now, it must take the next step 
and help provide technical assistance to countries that are struggling 
to meet its requirements.
    Enlist the Developed Nuclear Countries to More Effectively Secure 
Nuclear Materials and Prevent Nuclear Proliferation.--During the Cold 
War, the United States and Soviet Union cooperated to prevent nuclear 
proliferation. After the break up of the Soviet Union, U.S. efforts 
focused on helping Russia deal with its risks. As indicated above, 
these risks have been reduced considerably through U.S.-Russian 
cooperation. However, Russia has not re-engaged effectively to 
strengthen international efforts. Although it has cooperated with the 
United States in repatriating some weapons-usable nuclear material from 
the former states of the Soviet Union or its former satellites, its 
leadership on the global scene is not commensurate with its nuclear 
status. Although it has promoted international cooperation in reactor 
technology, providing nuclear fuel services, and storing nuclear waste, 
it has promoted global export of its own nuclear technologies without 
sufficient consideration of nuclear proliferation consequences. It has 
not contributed much to the resolution of North Korea's nuclear crisis 
and has been less than helpful in resolving the Iranian nuclear 
dilemma.
    Historically, China has not played a constructive role in limiting 
nuclear proliferation. Its past and current relationship with Pakistan 
remains troublesome. However, in recent years China has shown an 
interest in becoming constructive. Its 2005 nonproliferation policy 
paper represents a step in the right direction. China is tightening its 
export controls and has joined the Nuclear Suppliers Group (NSG). It 
has begun to engage constructively with the United States to improve 
the security of its nuclear materials in the civilian sector. The two 
countries have also begun to cooperate to improve the management and 
security of radiation sources in China. China has chosen not to engage 
more fully with the United States to cover its defense nuclear sector 
because its grievances over the Cox Report have not been addressed. In 
the past few years, China has also played a constructive role in trying 
to resolve the North Korean nuclear crisis by hosting the Six-Party 
Talks, although its approach differs from that of the United States 
because its strategic interests in North Korea differ. The bottom line 
is that China can and must do more to work effectively on global 
nuclear proliferation challenges. Although China will be guided by its 
own interests, the United States will play a pivotal role in how and 
when China engages.
    India has, not surprisingly, been missing from the global 
nonproliferation effort. Since India is outside the nonproliferation 
regime because it did not sign the NPT, it is viewed by many as a 
proliferator. It views itself as a legitimate nuclear weapon state with 
a commendable nonproliferation record. India's nuclear program has been 
shaped largely by the international sanctions that followed its first 
nuclear test in 1974. The sanctions appeared to have done little to 
limit India's nuclear weapon program, but they have limited its nuclear 
energy program and prevented cooperation in nonproliferation. Some 
welcome progress has been made recently in the area of nuclear reactor 
safety through cooperative efforts between the U.S. Nuclear Regulatory 
Commission and the Indian Atomic Energy Regulatory Board. There is much 
that should be done to work with India on its domestic safeguards and 
on its international nonproliferation support.
    The European Union has been a constructive member of the 
international nonproliferation effort. Several of its members have 
promoted global nuclear security and combating nuclear terrorism 
through G-8 initiatives with the United States. The EU-3 (Germany, 
France and the United Kingdom) have led the frustrating nuclear 
negotiations with Iran over the past few years.
    In recent years, the United States has carried the brunt of the 
international burden in preventing nuclear proliferation and combating 
the potential of global nuclear terrorism. It played the leading role 
in helping Russia cope with the nuclear dangers inherent in the breakup 
of the Soviet Union. We have turned our attention to focus on the 
global nature of the threat but, despite U.S. efforts, we appear to be 
losing ground. It is critical to enlist the full participation of the 
other major players in the nuclear arena. They should be enlisted in 
partnerships that span a broad spectrum of nuclear cooperation: This 
should include, for example, best practices in nuclear materials 
security, development of nuclear materials data bases, nuclear 
detection technologies, proliferation risk analysis, emergency 
response, nuclear forensics and attribution.
    The IAEA's role should be strengthened. The international 
safeguards effort is under enormous strain. The special inspection in 
North Korea and Iran require significant effort. The IAEA's overall 
workload has increased dramatically over the past 25 years. The number 
of safeguarded facilities has increased more than three-fold and the 
amount of HEU and separated plutonium has increased six-fold. The 
Additional Protocol has increased the number and complexity of 
inspections. Yet, the overall budget of the agency has remained 
relatively flat. The expansion of commercial nuclear power will tax the 
IAEA beyond its current capacity.
 strengthening the nonproliferation regime and expanding nuclear power
    The nonproliferation regime is under stress. North Korea's nuclear 
program and Iran's determined drive to uranium enrichment demonstrate 
how some nations use the NPT's promotion of civilian nuclear programs 
clandestinely to develop nuclear weapons or develop the nuclear weapon 
option. This problem is compounded by the fact that Article X allows 
nations to withdraw from the treaty without penalty. The recent 
revelations about Syria's clandestine nuclear program are especially 
troublesome because it was generally believed that national technical 
means would detect such a massive effort long before it entered such an 
advanced stage. The nonnuclear weapons states express an additional 
concern. They contend that the nuclear weapon states have not met their 
Article VI obligations toward nuclear disarmament. These differences 
contributed to the disastrous outcome of the 2005 NPT review 
conference. Prospects for the 2010 conference look just as grim unless 
progress is made on the North Korean and Iranian problems and on 
Article VI obligations.
    All of these concerns have surfaced just when commercial nuclear 
power is poised to take off globally because of worldwide energy demand 
and concerns about global climate change. An expansion of nuclear power 
will bring additional challenges to secure more nuclear material in 
more countries and to prevent additional states from turning their 
nuclear energy capabilities into nuclear weapons programs. The DOE's 
Global Nuclear Energy Partnership is a step in the right direction, but 
it needs better definition domestically and must become truly global to 
take into account the needs of the principal partners as well as those 
interested in future nuclear power.
 strengthening u.s. technical capabilities to combat proliferation and 
                           nuclear terrorism
    The proliferation of nuclear weapons and weapons capability is 
growing. The danger of nuclear terrorism is real. This is not a fight 
the United States can win alone. We cannot simply push the dangers 
beyond our borders. It is imperative to forge effective partnerships to 
combat the dangers of nuclear terrorism and the proliferation of 
nuclear weapons. Meeting these challenges will require diplomatic 
initiative and technical cooperation. The United States must lead 
international diplomacy and DOE/NNSA must provide technical leadership 
and capabilities.
    Unfortunately, the technical talent and facilities at the DOE/NNSA 
laboratories are steadily eroding. The technology base for 
nonproliferation and counter-terrorism activities rested on robust 
research programs in nuclear weapons and nuclear energy. Nuclear energy 
programs in the United States are just re-emerging from a couple of 
decades of inactivity. Nuclear weapons research has declined and has 
increasingly restricted its breadth of research. Moreover, facilities 
that were previously available for safeguards research are more 
difficult and costly to access. Consequently, more of the burden has 
fallen on the nonproliferation and verification budget of the NNSA. It 
has not kept up with the increased need for technical innovation in 
these areas.
    In addition, much of the safeguards technology developed and 
deployed around the world was typically demonstrated and refined 
domestically in U.S. nuclear facilities. These domestic safeguards 
technology development programs provided the foundation for measurement 
technologies, systems analysis and modeling in safeguards. For example, 
in the mid-1990's the Los Alamos National Laboratory had over $7 
million in domestic safeguards funding primarily focused on advancing 
the state of the art in nondestructive analysis. Today, it is 
approximately $250,000. Most of the domestic funds are expended for 
physical protection--guns, bullets and concrete to repel external 
threats based on the design basis threat. Consequently, we are falling 
behind in applying modern technologies to safeguard our domestic 
facilities and our technology base for safeguards is at risk. Moreover, 
it has become increasingly difficult to operate domestic nuclear 
facilities productively. The regulatory environment combined with a 
risk-averse operating environment has made it difficult to get work 
done, consequently losing the interest of some of the talent necessary 
for such programs. Recruitment of new talent in safeguards and other 
areas important in safeguards and verification has been difficult. A 
recent study by the American Physical Society and the American 
Association for the Advancement of Science \1\ pointed out the great 
difficulty in educating and training scientific talent in nuclear 
forensics and disciplines such as radiochemistry.
---------------------------------------------------------------------------
    \1\ Michael May, Chair, ``Nuclear Forensics Role, State of the Art, 
and Program Needs,'' Joint Working Group of, AAAS, APS Physics, 2007.
---------------------------------------------------------------------------
    The DOE/NNSA leadership has recognized these problems and recently 
launched the Next Generation Safeguards Initiative. This initiative 
would strengthen domestic capabilities by launching a generational 
improvement in safeguards technologies. It would greatly enhance the 
application of modern information technologies to safeguards. Other 
priorities include advanced safeguards approaches and proliferation 
risk assessments; enhanced modeling and simulation tools to better 
integrate safeguards into the design of new facilities; improved 
automation and automated process monitoring systems with real-time data 
transmission; better measurement technologies; and portable and 
multifunctional detectors. The Initiative recognizes the need to 
transfer these improvements to the IAEA so that it can deploy them in 
the field to meet the demand for greater and more sophisticated 
inspections. It also recognizes the need to build university-laboratory 
partnerships to provide educational support and training opportunities 
for the next generation of safeguards specialists. The Initiative also 
properly recognizes the need to leverage the nuclear capabilities of 
other nations to strengthen domestic and international safeguards 
capabilities. I strongly encourage the DOE/NNSA to develop this 
initiative and Congress to provide adequate funds.
    I want to make some final comments on the importance of having our 
technical specialists on the ground in country. The NNSA technical 
teams in Russia have been crucial in assessing the risks in the Russian 
nuclear complex, in comparing technologies and approaches to nuclear 
security and to learn from Russia's practices and experience. My recent 
trip to India's nuclear centers underscored the importance of an in-
country presence. I gained a much better appreciation for their 
domestic safeguards and security practices. I learned just how strongly 
the Indian nuclear energy program is geared to self-reliance. I learned 
how international sanctions over more than 30 years have slowed India's 
drive toward nuclear energy, but most likely not done much to slow its 
nuclear weapon progress. I found that whereas sanctions slowed progress 
in nuclear energy, they made India self-sufficient in nuclear 
technologies and world leaders in fast reactor technologies. While much 
of the world's approach to India has been to limit its access to 
nuclear technology, it may well be that today we limit ourselves by not 
having full access to India's nuclear technology developments. Such 
technical views should help to advise the diplomatic efforts with 
India.
    I have been in North Korea five times in the past 4 years and 
visited the Yongbyon Nuclear Center three times, including this past 
February 14. I have had sufficient access to make a reasonable 
technical assessment of North Korea's nuclear capabilities. North Korea 
has the bomb, but not much of a nuclear arsenal. It has most likely 
produced and separated between 40 and 50 kilograms of plutonium, 
sufficient for about six to eight bombs. I believe that North Korea is 
seriously disabling its Yongbyon nuclear facilities and that 
elimination of plutonium production is within reach. I was able to 
witness the activities of the DOE/NNSA technical teams on the ground in 
Yongbyon. They have done a superb job supervising the disablement of 
the Yongbyon facilities and they have very ably advised and supported 
the diplomatic process. I provide a detailed report of my observations 
and conclusions in Attachment II.

    Senator Dorgan. Dr. Hecker, thank you very much.
    Dr. Bunn, you may proceed.
    Senator Domenici. Dr. Bunn, would you wait a minute?
    Before Mr. Tobey leaves, I wonder if I could tell him that 
I want to ask a question for the record. I am going to leave 
it.
    Senator Dorgan. Yes.
    Senator Domenici. I am you going to leave a question about 
the 123 agreement and what we can expect from it. So that will 
be here for you before you leave.
    Thank you, Mr. Chairman.
    Thank you very much, Dr. Bunn.
STATEMENT OF DR. MATTHEW BUNN, BELFER CENTER FOR 
            SCIENCE AND INTERNATIONAL AFFAIRS, JOHN F. 
            KENNEDY SCHOOL OF GOVERNMENT, HARVARD 
            UNIVERSITY
    Dr. Bunn. Thank you. It is an honor to be here today to 
talk about preventing nuclear terrorism and nuclear 
proliferation, which are critical issues for our national 
security.
    Money is probably not the most important constraint on our 
ability to reduce these risks, but there are several areas 
where bigger budgets could mean faster progress.
    NNSA's nonproliferation programs are excellent investments 
in our national security and they are making substantial 
progress, as we have already heard. But the next President will 
find that much more still remains to be done, and with this 
year's budget, Congress should really focus on making sure that 
the next team has the resources and the flexibility to hit the 
ground running when they take office in January.
    I urge Congress to complete a budget this year. Operating 
on continuing resolutions for months into the fiscal year can 
be crippling for some of these fast-changing programs that have 
to respond to rapidly changing opportunities.
    So let me outline a few priorities.
    The first priority is preventing nuclear terrorism, and our 
most effective tool for doing that is to secure nuclear weapons 
and materials at their source so they cannot be stolen and fall 
into terrorist hands. We urgently need a global campaign to 
ensure that all the caches of nuclear weapons and materials, 
not just the ones in Russia, are secure and accounted for to 
standards sufficient to defeat the kinds of threats that 
terrorists and criminals have shown they can pose in ways that 
will work and in ways that will last after our assistance 
phases out. There are many obstacles to achieving that 
objective. It is going to take sustained leadership from the 
highest levels of the Government.
    The International Nuclear Materials Protection and 
Cooperation Program face costs in Russia that have shot up 
since their budget was put together. More expensive estimated 
costs to help Russian sites prepare to sustain security on 
their own and new opportunities in both Russia and South Asia. 
And I recommend an increase of about $60 million to $70 million 
in their budget.
    In the case of the Global Threat Reduction Initiative, more 
money is needed to further accelerate the conversion of highly 
enriched uranium-fueled research reactors to proliferation-
resistant LEU fuel, to accelerate the pace of removing nuclear 
material, to broaden that removal to cover a larger fraction of 
the world's HEU and a broader set of policy tools for 
convincing sites to give it up, and to secure radiological 
sources in research reactors around the world. All told, I 
think that they might need as much as an additional $200 
million or more to move forward as rapidly as they can in 
reducing these security risks.
    We also need additional steps to establish effective global 
standards for nuclear security, building on Security Council 
Resolution 1540 that requires every state to have effective 
nuclear security in place.
    I believe we also need a larger investment in nuclear 
forensics where, at least at some of our labs, they have 
actually had to lay off some of their people working on nuclear 
forensics in recent times.
    Next, it is critical that the next President engage with 
the governments of North Korea and Iran to put together a 
package, an international package, of carrots and sticks big 
enough and credible enough to convince them to give up their 
nuclear weapons ambitions and allow the verification that we 
would require. That will be mostly a White House and State 
Department effort, but Congress should be prepared to provide 
supplemental funding as needed for NNSA to take part in the 
verification of packaging of nuclear material, the 
dismantlement of nuclear facilities, and so on.
    Third, we need to reduce the demand for nuclear weapons, an 
effort that has been much more successful than many people 
realize. Here again, the White House, the State Department, and 
the Defense Department will be taking the lead, but things that 
NNSA does make a difference as well. When we send a signal that 
despite having the world's most powerful conventional forces, 
we are going to need a large arsenal of nuclear weapons 
essentially forever, that we need new nuclear weapons and we 
need a complex that can rapidly build more nuclear weapons, we 
strengthen the arguments of nuclear hawks in other countries 
arguing that their own countries need nuclear weapons as well.
    Moreover, it is very difficult to get the votes of non-
nuclear weapons states, even our closest allies, for stronger 
safeguards, tougher export controls, better enforcement, all of 
which mean more constraints on them if we are not willing to 
accept constraints ourselves and live up to our NPT obligation 
to move toward disarmament. The next President is going to have 
to hit the ground running to reestablish our disarmament 
credentials, given that the next NPT review is coming up in 
2010.
    I believe that we need, given the experience of the A.Q. 
Khan network, a dramatically improved ability worldwide to stop 
black market nuclear trafficking. This will involve stepped-up 
police and intelligence cooperation, but we also need at NNSA, 
I think, an expanded effort to help countries around the world 
put effective export controls, border controls, transshipment 
controls in place, as required by UNSC 1540. And I recommend an 
increase of about $10 million to $15 million for that effort.
    As we look at the growth and spread of nuclear energy 
around the world, we need to make sure that that does not 
contribute to the spread of nuclear weapons. Congress took an 
important step last year in providing $50 million for a fuel 
bank that will give countries additional assurance that they 
can rely on international supplies of fuel rather than building 
their own enrichment plants. And I am hopeful, although there 
are still some issues in play, that we can reach agreement to 
establish one or more fuel banks by the end of this year.
    At the same time, we need to pursue even stronger 
incentives to convince states not to build their own enrichment 
and reprocessing plants. I think in that context, building a 
reprocessing plant of our own in the near term in my view would 
be a step in the wrong direction. I think that the Congress 
provided about the right amount of money for GNEP last year. I 
would encourage you to provide a similar budget this year and 
to provide the kind of direction that this subcommittee did 
last year for GNEP.
    As we have heard already, NNSA is launching a Next 
Generation Safeguards Initiative designed to reinvest in both 
the technology and the people for strong safeguards, which we 
urgently need, and I would recommend an increase of $10 million 
to $15 million for that initiative as well beyond the budget 
request.
    Now, with respect to the programs to redirect weapons 
expertise in the former Soviet Union and elsewhere, there has 
been a lot of criticism of those programs recently, much of 
which I believe is unjustified. I do believe that those 
programs, despite the improving Russian economy, do still have 
a value that is worth the small investment that we make in 
them.
    Finally, we need information to support all of these 
policies. We need good intelligence and we need good analysis. 
I commend Congress for supporting increases in DOE's 
intelligence budget in recent years, and those increases have 
supported important new programs like the Nuclear Materials 
Information Program.
    But it is my understanding that at some of the 
laboratories, some of the critical intelligence capabilities, 
such as Livermore's Z Division, have been substantially cut 
back in the last year or so, and I would urge Congress to take 
action to reverse that because those capabilities are really 
some of the most important nuclear intelligence capabilities 
our Government has.
    I also recommend that Congress provide roughly $10 million 
so that NNSA can start taking a page from the play book of the 
Department of Homeland Security in establishing centers of 
excellence and other ways that they can draw on expertise from 
academia and from other non-government institutions to help 
them do their job better.

                           PREPARED STATEMENT

    In my prepared statement, I also talk about the issues of 
reducing plutonium and HEU stockpiles which remain troublesome 
problems, as Senator Domenici mentioned, but in the interest of 
time, I will leave that to questions.
    Thank you very much, Mr. Chairman, members of the 
committee.
    [The statement follows:]
                 Prepared Statement of Dr. Matthew Bunn
    Mr. Chairman and members of the committee: It is an honor to be 
here today to talk about critical issues for U.S. and world security--
nuclear terrorism and nuclear proliferation, and what more the National 
Nuclear Security Administration (NNSA) can do to prevent them.
    My basic message today is simple: while money is not the most 
important constraint on progress for most of the Nation's efforts to 
prevent nuclear proliferation and terrorism, there are several areas 
where additional funds could help reduce major dangers to our national 
security.
    NNSA's nonproliferation programs are critical tools in our Nation's 
nonproliferation toolbox. There can be no doubt that America and the 
world face a far lower risk of nuclear terrorism today than they would 
have had these efforts never been begun. These programs are excellent 
investments in U.S. and world security, deserving strong support; 
Americans and the world owe a substantial debt of gratitude to the 
dedicated U.S., Russian, and international experts who have been 
carrying them out.
    With this year's budget, Congress should focus on making sure a new 
team has the resources and flexibility to hit the ground running in 
reducing proliferation threats when they take office in January. I 
would urge Congress to complete a budget despite the pressures of an 
election year; operating on continuing resolutions until many months 
into a new fiscal year can be crippling for fast-changing programs such 
as these, making it very difficult to seize opportunities as they 
arise.
    These programs are making substantial progress in reducing 
proliferation threats. But in many areas, there will still be much more 
to do when a new team takes office. While many of the programs in 
Russia are nearing completion, and their budgets will decline, efforts 
elsewhere around the world must expand to address the global threat, 
taking up the slack. Clear indicators of the global nature of the 
threat are everywhere--from the nuclear programs in North Korea and 
Iran, to the global attacks by al Qaeda and their repeated efforts to 
get the materials and expertise needed to make a bomb, to roughly 20 
countries where the A.Q. Khan black-market nuclear network succeeded in 
operating for the more than 20 years before finally being disrupted, to 
the break-in at the Pelindaba site in South Africa last November, when 
four armed men penetrated the security fence without setting off any 
alarm at a site with hundreds of kilograms of weapon-grade highly-
enriched uranium (HEU), and spent 45 minutes inside the facility 
without ever being engaged by the site's security forces.
    I will not attempt to assess every element of NNSA's 
nonproliferation budget. Rather, I will outline several key 
nonproliferation priorities, and make recommendations for further steps 
NNSA or other parts of DOE can take to address them. Many of the needed 
actions to strengthen the global nonproliferation regime must be taken 
by the White House or the State Department; NNSA's critical role is in 
providing the technical expertise needed to back up nonproliferation 
initiatives, particularly in the management of nuclear weapons and 
materials.\1\ Most of these programs are constrained more by limited 
cooperation (resulting from secrecy, complacency about the threat, 
concerns over national sovereignty, and bureaucratic impediments) than 
they are by limited budgets; sustained high-level leadership focused on 
overcoming the obstacles to cooperation is the most important 
requirement for success.\2\ But in some cases, programs could move more 
quickly to seize risk reduction opportunities that already exist if 
their budgets were increased--and in still more cases, more money would 
be needed to implement a faster and broader effort if the other 
obstacles could be overcome.
---------------------------------------------------------------------------
    \1\ Most of that expertise resides at the national laboratories, 
not at DOE headquarters. This requires a continuing effort to build 
effective headquarters-laboratory partnerships, giving the labs the 
freedom to do what they do best, while keeping the policy-making 
functions with Federal officials.
    \2\ For an in-depth assessment of the programs focused on security 
for nuclear weapons and materials, see Matthew Bunn, Securing the Bomb 
2007 (Cambridge, Mass.: Nuclear Threat Initiative and Project on 
Managing the Atom, Harvard University, September 2007). The 2008 
edition is forthcoming.
---------------------------------------------------------------------------
                      preventing nuclear terrorism
    The first priority is to prevent terrorists from incinerating the 
heart of a major city with a nuclear bomb--as al Qaeda have made clear 
they hope to do. This remains a real danger, though no one can 
calculate the probability of such a catastrophe.\3\
---------------------------------------------------------------------------
    \3\ See, for example, testimony of Charles Allen, Rolf Mowatt-
Larsen, Matthew Bunn, and Gary Ackerman to the Senate Committee on 
Homeland Security and Governmental Affairs, hearing on ``Nuclear 
Terrorism: Assessing the Threat to the Homeland,'' 2 April 2008.
---------------------------------------------------------------------------
    The step we can take that most reduces this danger is securing 
nuclear weapons and materials at their source--for making plutonium or 
HEU is beyond the plausible capability of terrorist groups, and if we 
can keep these materials and nuclear weapons themselves out of 
terrorist hands, we can keep terrorists from ever getting a nuclear 
bomb. NNSA's programs are in the process of completing the security 
upgrades in Russia planned as part of the Bratislava initiative, and 
those upgrades are dramatically reducing critical risks. But the 
problem of inadequately secured nuclear stockpiles is not just a 
Russian problem, it is a global problem. Hundreds of buildings in more 
than 30 countries contain enough of the essential ingredients of 
nuclear weapons to require the highest standards of security. The world 
urgently needs a global campaign to ensure that all the caches of 
nuclear weapons and the materials needed to make them worldwide are 
secure and accounted for, to standards sufficient to defeat the threats 
terrorists and criminals have shown the can pose, in ways that will 
work, and in ways that will last. Overcoming the many obstacles to 
achieving this objective will require sustained political leadership 
from the highest levels of our Government.
                  budget increases for mpc&a and gtri
    But getting the job done as fast as it can be done will also 
require more money. In the case of the International Nuclear Materials 
Protection and Cooperation program (more commonly known as Materials 
Protection, Control, and Accounting, or MPC&A), construction costs in 
Russia have shot up since the administration prepared its budget 
request; helping Russian sites to prepare to sustain high levels of 
security is proving more expensive than expected; and new 
understandings have opened new opportunities for nuclear security 
cooperation in both Russia and South Asia. All told, I recommend an 
increase of $60-$70 million over the requested budget for the MPC&A 
effort.
    In the case of the Global Threat Reduction Initiative (GTRI), there 
are now 45 HEU-fueled research reactors that could convert to low-
enriched uranium (LEU) that cannot power a nuclear bomb with LEU fuels 
already available; GTRI has already accelerated the pace of these 
conversions, but with more money, these reactors could be converted 
faster. There will also be a need to build a fabrication plant for the 
higher-density LEU fuels now in development, in order to convert 
additional reactors, and GTRI will likely have to play a role in that--
either by paying to build the plant or by guaranteeing fabrication 
contracts to give private firms sufficient incentives to pay for 
building their own own facilities. Additional funds could also 
accelerate the pace of removing nuclear material from vulnerable sites 
around the world (in part because here, too, prices are escalating). 
And more money is also needed to secure radiological sources and 
research reactors around the world--including here in the United 
States, where upgrades are needed for some 1,800 locations with sources 
of 1,000 curies or more, and for the Nation's 32 domestic research 
reactors. Moreover, GTRI is so far planning to return only a small 
fraction of the U.S.-origin HEU abroad; while most of the remainder is 
in developed countries, in many cases there is good reason to bring 
this material back as well, and more funds would be required to give 
these facilities incentives to give up their HEU. Finally, NNSA does 
not yet have a program focused on giving underutilized HEU-fueled 
reactors incentives to shut down--in many cases likely to be a quicker 
and easier approach than conversion. All told, I believe that an 
additional $200 million or more is needed for GTRI to move forward as 
rapidly as possible in reducing these risks.\4\
---------------------------------------------------------------------------
    \4\ This does not include the potential cost of packaging and 
removing plutonium and plutonium-bearing spent fuel from North Korea, 
if an agreement to take those steps is reached. That substantial cost 
would likely have to be funded through a supplemental request.
---------------------------------------------------------------------------
                  other needed nuclear security steps
    Several additional steps could significantly contribute to efforts 
to secure nuclear stockpiles worldwide.
    Building the Sense of Urgency.--The fundamental key to success in 
these efforts is convincing political leaders and nuclear managers 
around the world that nuclear theft and terrorism are real threats to 
their countries' security, worthy of a major investment of their 
attention and resources. If they are convinced of this, they will take 
the needed actions to prevent nuclear terrorism; if they remain 
complacent about the threat and how much it could affect them, they 
will not take those actions. Congress should consider making funds 
available for activities to build this sense of urgency and commitment, 
including joint briefings on the nuclear terrorist threat, nuclear 
terrorism exercises and simulations, helping states perform realistic 
``red team'' tests of their nuclear security systems, and more.\5\ Such 
efforts might be implemented under the rubric of the Global Initiative 
to Combat Nuclear Terrorism--which has the potential to become the kind 
of global campaign to improve nuclear security that is urgently needed, 
though to date it has focused more on matters such as police training 
and emergency preparedness than on nuclear security upgrades.
---------------------------------------------------------------------------
    \5\ For a list of suggestions, see Bunn, Securing the Bomb 2007, 
pp. xxx.
---------------------------------------------------------------------------
    Forging Effective Global Nuclear Security Standards.--As nuclear 
security is only as strong as its weakest link, the world urgently 
needs effective global nuclear security standards that will ensure that 
all nuclear weapons and weapons-usable materials are protected against 
the kinds of threats terrorists and criminals have shown they can 
pose--at a bare minimum, against two small teams of well-trained, well-
armed attackers, possibly with inside help, as occurred at Pelindaba. 
(In some countries, protection against even more capable threats is 
required.) U.N. Security Council Resolution 1540 legally requires all 
countries to provide ``appropriate effective'' security and accounting 
for all their nuclear stockpiles. The time has come to build on that 
requirement by reaching a political-level agreement with other leading 
States on what the essential elements of appropriate effective security 
and accounting systems are, and then working to ensure that all States 
put those essential elements in place. In last year's defense 
authorization act, Congress called on the administration to seek to 
develop such effective global standards; Congress should now act to 
ensure that the administration is taking this step, and provide funding 
to support such efforts if needed. Ultimately, effective security and 
accounting for weapons-usable nuclear material should become part of 
the ``price of admission'' for doing business in the international 
nuclear market.
    Achieving Sustainability.--UIf the upgraded security equipment the 
United States is helping countries put in place is all broken and 
unused in 5 years, U.S. security objectives will not be accomplished. 
NNSA is working closely with Russia to try to ensure that Russia puts 
in place the resources, incentives, and organizations needed to sustain 
high levels of security for the long haul--but there is much left to 
do, and similar efforts will be needed wherever nuclear security 
upgrades are undertaken. As most nuclear managers only invest in 
expensive security measures when the government tells them they have 
to, strong regulation is essential to achieving and maintaining 
stringent standards of nuclear security, and there is far more to do to 
get effective nuclear security and accounting regulations in place 
around the world.
    Strengthening security culture.--As Gen. Eugene Habiger, former DOE 
``security czar'' and former commander of U.S. strategic forces, has 
remarked: ``good security is 20 percent equipment and 80 percent 
culture.'' We need to increase efforts to build security cultures that 
will put an end to guards patrolling without ammunition or staff 
propping open security doors for convenience. NNSA is working this 
problem hard, but changing the day-to-day attitudes and practices at 
scores of facilities in dozens of countries with many different 
national cultures, where we have only very limited influence, is an 
extraordinarily difficult policy problem. Convincing nuclear managers 
and staff that the threats of nuclear theft and sabotage are real will 
be fundamental, and many of the steps needed to build high-level 
commitment to nuclear security will also help in building strong 
security cultures. Efforts similar to those now being undertaken in 
Russia need to be undertaken wherever nuclear weapons and the materials 
to make them exist. We also need more effort to learn from cases where 
facilities or organizations have succeeded in transforming their 
security or safety cultures--and from cases where they have failed to 
do so.
    Consolidating Nuclear Stockpiles.--We need to do everything we can 
to reduce the number of buildings and bunkers worldwide where nuclear 
weapons and the materials needed to make them are located, achieving 
more security at lower cost. Our goal should be to remove all nuclear 
material from the world's most vulnerable sites and ensure effective 
security wherever material must remain within 4 years or less. Over 
time, the United States should seek an end to all civil use of HEU. And 
we should not encourage commercial reprocessing and recycling of 
plutonium, as proposed in the Global Nuclear Energy Partnership (GNEP); 
even the proposed GNEP processes that do not separate ``pure 
plutonium'' would tend to increase, rather than decreasing, nuclear 
theft and nuclear proliferation risks compared to not reprocessing this 
fuel.\6\ We should also work to reduce the total stockpiles of weapons 
and materials that must be guarded, including by ending production of 
more. NNSA's recent success in enabling Russia to shut down one of its 
three remaining plutonium production reactors--and the shut-down of the 
remaining two, planned in the next 2 years--is a major milestone. But 
there is more to be done. It is time to get serious about negotiating a 
verifiable global treaty ending production of nuclear materials for 
weapons forever, to stop the production of highly enriched uranium for 
any purpose, and to stop piling up ever larger stockpiles of separated 
civilian plutonium. In particular, Congress should direct NNSA to 
return to the negotiation of a 20-year moratorium on separating 
plutonium in the United States and Russia that was nearly completed at 
the end of the Clinton administration. The troubled plutonium 
disposition effort and opportunities for expanded disposition of HEU 
are important topics treated in more detail at the end of this 
statement. Over the longer term, if properly managed, serious pursuit 
of the steps toward a nuclear weapon free world advocated by 
Secretaries Shultz, Kissinger, and Perry and Senator Nunn could make a 
significant long-term contribution to reducing nuclear terrorism 
risks.\7\
---------------------------------------------------------------------------
    \6\ See discussion in Matthew Bunn, ``Risks of GNEP's Focus on 
Near-Term Reprocessing,'' testimony before the Committee on Energy and 
National Resources, U.S. Senate, 14 November 2007, available as of 28 
March 2008 at http://belfercenter.ksg.harvard.edu/files/bunn-GNEP-
testimony-07.pdf. The radioactivity of the plutonium-bearing materials 
that would be recovered in proposed GNEP processes is not remotely 
enough to deter theft by determined terrorists. See Jungmin Kang and 
Frank Von Hippel, ``Limited Proliferation-Resistance Benefits from 
Recycling Unseparated Transuranics and Lanthanides from Light-Water 
Reactor Spent Fuel,'' Science and Global Security 13, no. 3 (2005).
    \7\ See George P. Shultz, William J. Perry, Henry A. Kissinger, and 
Sam Nunn, ``Toward a Nuclear-Free World,'' Wall Street Journal, 15 
January 2008, and Matthew Bunn, ``Securing Nuclear Stockpiles 
Worldwide,'' in Reykjavik Revisited: Steps Toward a World Free of 
Nuclear Weapons (Palo Alto: Hoover Institution, forthcoming). For 
recent discussions of steps to reduce existing stockpiles of HEU and 
separated plutonium, see Matthew Bunn and Anatoli Diakov, ``Disposition 
of Excess Highly Enriched Uranium,'' and ``Disposition of Excess 
Plutonium,'' in Global Fissile Materials Report 2007 (Princeton, NJ: 
International Panel on Fissile Materials, October 2007, available as of 
28 March 2008 at http://www.fissilematerials.org), pp. 24-32 and 33-42.
---------------------------------------------------------------------------
    Strengthening International Approaches.--The International Atomic 
Energy Agency (IAEA) has a key role to play in improving nuclear 
security--helping to develop standards and recommendations, providing 
international peer reviews of nuclear security arrangements, 
coordinating efforts among different donors contributing to nuclear 
security improvements, and more. Some countries trust the IAEA in a way 
that they will never trust the United States, and the Agency is 
uniquely positioned to develop international security recommendations 
that will be broadly accepted around the world. But the IAEA's Office 
of Nuclear Security is constantly hampered by its very limited budget, 
which is tightly constrained by earmarks for donors' favored projects. 
While U.S. contributions to the IAEA largely flow through the State 
Department, NNSA has made substantial contributions to the Office of 
Nuclear Security in the past. I recommend that Congress direct an 
additional $5-$10 million contribution to the IAEA's Office of Nuclear 
Security, to strengthen its efforts to contribute to nuclear security 
worldwide.
    Sharing Nuclear Security Best Practices.--Just as the nuclear 
industry created the World Association of Nuclear Operators (WANO) 
after the Chernobyl accident, to bring the worst performers on safety 
up to the level of the best performers, the world needs a World 
Institute of Nuclear Security (WINS), to provide a focus for exchanging 
best practices in nuclear security and material control and accounting. 
The Nuclear Threat Initiative (NTI) and the Institute for Nuclear 
Materials Management are working with the nuclear community to 
establish such an institution. To be effective, this should ultimately 
be led by those with direct responsibility for managing nuclear 
material and facilities. But it may be necessary for NNSA and others to 
provide initial seed money to get it going; Congress should consider 
appropriating a few million dollars for that purpose.
    Building Genuine Partnerships.--To be successful, all of these 
efforts must be pursued in a spirit of genuine partnership, serving 
both our interests and those of the partner states, with ideas from 
each side's experts incorporated into the approach; the experts in each 
country know their materials, their facilities, their regulations and 
bureaucracies, and their culture better than we do, and we need to 
listen to them to get the ``buy-in'' essential to long-term 
sustainability. In particular, while these programs must look beyond 
Russia to the world, there is a special need for partnership with 
Russia, as Russia and the United States bear a special responsibility, 
with some 95 percent of the world's nuclear weapons and more than 80 
percent of its stocks of weapons-usable nuclear material. The shift to 
a true partnership approach should include establishing joint teams 
that would help other states around the world upgrade security. The 
Global Initiative to Combat Nuclear Terrorism, co-led by the United 
States and Russia, is an important step in the right direction. But as 
the President and Congress consider actions which strongly affect 
Russian interests, from missile defense in Europe to the expansion of 
NATO to Russia's borders, they need to consider the potential impact on 
the prospects for effective nuclear security partnership as well.
                        beyond nuclear security
    While securing nuclear weapons and materials at their source is the 
most effective tool to reduce the risk, we cannot expect it to be 
perfect. We urgently need a substantially stepped-up effort to build 
police and intelligence cooperation focused on stopping nuclear 
smuggling and the other elements of nuclear plots in countries all over 
the world, including additional sting operations and well-publicized 
incentives for informers to report on such plots. This will make it 
even more difficult for potential nuclear thieves and those who would 
like to buy stolen material to connect, and to put together the people, 
equipment, expertise, and financing for a nuclear bomb conspiracy 
without detection.
    The United States should also work with key states around the world 
to ensure that they put in place laws making any participation in real 
or attempted theft or smuggling of nuclear weapons or weapons-usable 
materials, or nuclear terrorism, crimes with penalties comparable to 
those for murder or treason.
    The Real, But Limited, Role of Radiation Detection.--Radiation 
detection at ports, border crossings, and elsewhere will play a role in 
these later lines of defense, but its contribution to reducing the risk 
of nuclear terrorism will inevitably be limited. The length of national 
borders, the diversity of means of transport, the vast scale of 
legitimate traffic across these borders, the small size of the 
materials needed for a nuclear bomb, and the ease of shielding the 
radiation from plutonium or especially from HEU all operate in favor of 
the terrorists. Neither the detectors now being put in place nor the 
Advanced Spectroscopic Portals planned for the future would have much 
chance of detecting and identifying HEU metal with modest shielding--
though they likely would be effective in detecting plutonium or strong 
gamma emitters such as Cs-137 that might be used in a so-called ``dirty 
bomb.'' \8\ Most of the past successes in seizing stolen nuclear 
material have come from conspirators informing on each other and from 
good police and intelligence work, not from radiation detectors.
---------------------------------------------------------------------------
    \8\ See, for example, Thomas B. Cochran and Matthew G. McKinzie, 
``Detecting Nuclear Smuggling,'' Scientific American, March 2008, 
available as of 28 April 2008 at http://www.sciam.com/
article.cfm?id=detecting-nuclear-smuggling.
---------------------------------------------------------------------------
    Hence, while it is worth making some investment in radiation 
detection, we should not place undue reliance on this line of defense. 
That being said, NNSA's Second Line of Defense program has been 
successful in cooperating with many countries to put radiation 
detection in place at key ports and border crossings, and to take 
advantage of all the opportunities for cooperation with key countries 
that it now has before it would require $50-$60 million beyond the 
budget request.
    A Modified Approach to Cargo Scanning.--Beyond the budget, Congress 
should act to modify the approach to radiation scanning of cargo 
containers approved last year. By requiring 100 percent of containers 
coming into the United States to be scanned (an extraordinarily 
difficult target to meet), offering the possibility of a waiver, and 
setting no requirements for the quality of the scanning or for what 
should be done with the information from the scans, Congress may have 
inadvertently created a situation where the requirement will repeatedly 
be waived and the scanning put in place will be of low quality and lead 
to little action. Congress should approve a revised approach in which 
terrorists would know that each container had a high chance of being 
scanned; the scans were done with the best available scanning 
technology; and the scans would be linked to immediate further search 
and other action in the event of unexplained detections. This would do 
more to keep terrorists from using containers to smuggle nuclear 
weapons and materials. At the same time, Congress should insist that 
the Department of Homeland Security provide a detailed assessment of 
the vulnerability posed by the countless potential pathways for nuclear 
smuggling between official points of entry, and should mandate an 
independent assessment of the cost-effectiveness of large investments 
in radiation detection at official points of entry when intelligent 
adversaries have options for going around them.\9\
---------------------------------------------------------------------------
    \9\ For a more optimistic view on this part of the problem, see 
Levi, On Nuclear Terrorism, pp. 87-96.
---------------------------------------------------------------------------
    A strengthened nuclear forensics effort. Congress should also act 
to strengthen U.S. and international efforts in nuclear forensics (the 
science of examining characteristics of seized nuclear material or 
nuclear material collected after a nuclear blast for clues to where it 
came from). I recommend that Congress increase funding for nuclear 
forensics R&D by at least $10 million and direct that a robust portion 
of available funding be spent to maintain and expand the technical 
capabilities at the U.S. laboratories (currently so much of the funding 
is staying at the Department of Homeland Security that U.S. 
laboratories working on forensics of seized materials have had to lay 
off some of their staff). In addition, I recommend that Congress direct 
the administration to pursue expanded efforts to put together an 
international database of material characteristics. Congress should 
understand, however, that nuclear material has no DNA that can provide 
an absolute match: nuclear forensics will provide a useful but limited 
source of information to combine with other police and intelligence 
information, but will rarely allow us to know where material came from 
by itself.\10\
---------------------------------------------------------------------------
    \10\ See Nuclear Forensics Working Group (Michael May, chair), 
Nuclear Forensics: Role, State of the Art, Program Needs (Washington, 
DC: American Physical Society and American Association for the 
Advancement of Science, February 2008).
---------------------------------------------------------------------------
                    coping with north korea and iran
    The next priority is to cope with the nuclear programs of North 
Korea and Iran. If both North Korea and Iran become established nuclear 
weapon States, this will be a dramatic blow to the entire global effort 
to stem the spread of nuclear weapons, and will put significant 
pressure on some of their neighbors to follow suit. The Bush 
administration's no-engagement approach to Iran has clearly failed, 
allowing Iran to move forward unimpeded with a substantial enrichment 
capability, just as the administration's earlier ``threaten and watch'' 
approach to North Korea failed utterly, leaving North Korea with a 
tested nuclear bomb and enough plutonium to make 5-12 nuclear weapons. 
The next president needs to take a new tack, putting together 
international packages of incentives and disincentives large enough and 
credible enough to convince the North Korean and Iranian governments 
that it is in their national interests to agree to arrangements that 
would put a wide and verifiable gap between them and a nuclear weapons 
capability. If we want these governments to address our concerns, the 
U.S. Government will have to address some of their key concerns--which 
may in the end require difficult choices, such as providing Iran with a 
security assurance as part of such an agreement, and acknowledging that 
at this point, a ban on all enrichment in Iran, however desirable, can 
no longer be achieved.\11\ It is primarily the White House and the 
State Department that need to take action, but Congress should be 
prepared to provide supplemental funding as needed for NNSA support to 
verification, packaging and removing nuclear materials and equipment, 
and helping to decommission nuclear facilities and redirect nuclear 
experts.
---------------------------------------------------------------------------
    \11\ For a discussion of the risks to U.S. national security of 
continuing to insist on zero enrichment in Iran, see Matthew Bunn, 
``Constraining Iran's Nuclear Program: Assessing Options and Risks,'' 
presentation at Oak Ridge National Laboratory, 15 November 2007, 
available as of 28 April 2008 at http://belfercenter.ksg.harvard.edu/
files/Matthew_Bunn_Oak_Ridge.pdf. For an imaginative proposal for a 
multilaterally owned and staffed enrichment facility in Iran, designed 
so that it can be easily and permanently disabled if Iran ever takes 
action to turn it to weapons use, see Geoffrey Forden and John 
Thompson, Iran as a Pioneer Case for Multilateral Nuclear Arrangements 
(Cambridge Mass.: Science, Technology, and Global Security Working 
Group, Massachusetts Institute of Technology, 2006 (revised 2007), 
available as of 28 April 2008 at http://mit.edu/stgs/irancrisis.html. 
For a discussion of the current issues, and of a proposal similar to 
the Forden-Thompson proposal, see William Luers, Thomas R. Pickering, 
and Jim Walsh, ``A Solution for the U.S.-Iran Nuclear Standoff,'' New 
York Review of Books, 20 March 2008, available as of 28 April 2008 at 
http://www.nybooks.com/articles/21112.
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                  reducing demand for nuclear weapons
    The third priority is to reduce the demand for nuclear weapons 
around the world. Efforts to reduce demand have been more successful 
than is usually recognized. Today, there are more countries that 
started nuclear weapons programs and then decided to give them up and 
accept international inspections than there are states with nuclear 
weapons--meaning that even once states start nuclear weapons programs, 
efforts to convince them that nuclear weapons are not in their interest 
succeed more often than they fail.
    Here, too, many of the needed steps require White House, State 
Department, or Defense Department action. But NNSA's programs can have 
an important effect on the demand for nuclear weapons as well. When the 
country with the most powerful conventional forces on earth insists 
that large numbers of nuclear weapons are essential to its security, 
that they will remain essential forever, that new nuclear weapons are 
needed, and that a transformed complex that is ``responsive'' in the 
sense that it could rebuild a larger nuclear arsenal if need be is also 
essential, this strengthens the arguments of those in other countries 
arguing that their country also needs nuclear weapons. Perhaps even 
more important, it will be far more difficult to get political support 
from non-nuclear-weapon states for stronger safeguards, more stringent 
export controls, tougher enforcement, and the other measures urgently 
needed to strengthen the global nonproliferation regime--all of which 
involve more constraints and costs for them--if the United States and 
the other NPT weapon states are seen as failing to live up their legal 
obligation, under Article VI of the Nonproliferation Treaty (NPT), to 
move in good faith toward nuclear disarmament.
    I believe that the case has not been made that the claimed benefits 
of the Reliable Replacement Warhead (RRW) outweigh these and other 
potential downsides. I recommend that the Congress continue to refuse 
to fund that program, and direct NNSA to focus on a smaller, cheaper 
complex designed only to support a much smaller nuclear stockpile for 
the future. The next president should recommit the United States to the 
Comprehensive Test Ban Treaty, and work to build the support in the 
Senate that will be necessary for ratification.
    More broadly, the United States and Russia, as the states with the 
world's largest nuclear stockpiles, should agree to reduce their total 
stockpiles of nuclear weapons to a small fraction of those they hold 
today, and to declare all their HEU and plutonium beyond the small 
stockpiles needed to support the remaining agreed nuclear weapon 
stockpiles (and modest set-asides for naval fuel) as excess to their 
military needs. Both countries should put this excess material in 
secure storage sites subject to international monitoring, and reduce 
these stocks through use or disposal as quickly as that can safely, 
securely, and cost-effectively be done.\12\
---------------------------------------------------------------------------
    \12\ In the Trilateral Initiative, the United States, Russia, and 
the IAEA developed technologies, procedures, and legal agreements that 
would make it possible for excess material to be placed under 
international monitoring irrevocably, without revealing classified 
information. I will address the issue of disposition of excess material 
in more detail at the end of this testimony. For visionary discussions 
of the need for both near-term steps to reduce nuclear danger and a 
broad vision of a world without nuclear weapons, see George P. Shultz, 
William J. Perry, Henry A. Kissinger, and Sam Nunn, ``A World Free of 
Nuclear Weapons,'' Wall Street Journal, 4 January 2007, and ``Toward a 
Nuclear-Free World,'' Wall Street Journal, 15 January 2008.
---------------------------------------------------------------------------
    Toward these ends, I recommend that Congress provide funding and 
direction for NNSA to:
  --Further increase the rate of dismantlement of nuclear weapons and 
        HEU components;
  --Establish international monitoring of HEU and plutonium declared 
        excess to date; and
  --Participate in the British initiative to develop approaches to 
        international verification of nuclear disarmament.
    These steps are particularly important in the lead-up to the NPT 
Review Conference in 2010. In 2005, at a moment when the world needed 
to build consensus on steps to strengthen the global effort to stem the 
spread of nuclear weapons, the NPT Review Conference collapsed in 
disarray, in substantial part because the Bush administration refused 
to even discuss the steps toward disarmament the United States and all 
the other NPT parties had committed to at the previous review. We 
cannot afford a similar failure at the upcoming review in 2010. The 
next president will have to move quickly to re-establish U.S. 
credibility on nuclear disarmament.
    I fear that the recent U.S.-India nuclear cooperation agreement, 
modifying long-standing nonproliferation rules, may also add to the 
arguments of nuclear weapons advocates in other countries. Already, 
Iranian colleagues tell me that nuclear hawks in Tehran have pointed to 
this accord, arguing that while much of the international community 
sanctioned India after the 1998 tests, the United States was soon back, 
looking for a strengthened relationship and expanded trade, and has now 
said, in effect, ``all is forgiven''--and that in much the same way, 
sanctions on oil-rich Iran would never last long, however far it might 
push its nuclear program. Congress should carefully consider whether 
the benefits of this agreement are worth these risks.
                 stopping black-market nuclear networks
    The experience of the global black-market nuclear network led by 
Pakistan's A.Q. Khan--which operated in some 20 countries for over 20 
years before it was finally disrupted, at least in part--makes clear 
that urgent steps are needed to strengthen the world's ability to 
detect and stop such black-market networks, and to strengthen global 
export controls. Unfortunately, it is clear that black-market nuclear 
networks continue to operate, and to pose serious dangers to the global 
future.
    As with stopping smuggling of nuclear materials, stopping nuclear 
technology networks will require stepped-up international police and 
intelligence cooperation; the police and intelligence response must be 
just as global as these networks are.
    It will also require a radical improvement in global controls over 
exports and transshipments of sensitive technologies. In addition to 
requiring ``appropriate effective'' nuclear security and accounting, 
UNSC 1540 requires every U.N. member state to put in place 
``appropriate effective'' export controls, border controls, and trans-
shipment controls. We should be making greater use of this new 
nonproliferation tool, helping to define what essential elements must 
be in place for states' controls in these areas to be considered 
appropriate and effective, and helping states put those essential 
elements in place. Today, important export control assistance programs 
are in place which are making a real difference--but they remain 
limited to a handful of key countries, despite the Khan network's 
demonstration that countries that no one thought of as having sensitive 
technology may provide key nodes for a black-market network. I 
recommend that Congress increase the budget for NNSA's export control 
assistance program by at least $10-$15 million, and direct the 
administration to develop a plan for making sure all countries fulfill 
their UNSC 1540 obligation to put effective controls in place.
           reducing the proliferation risks of nuclear energy
    Today, demand for nuclear energy is growing, in response to 
concerns over fossil fuel prices and availability and over climate 
change. It is crucial to take steps today to ensure that the spread of 
nuclear energy does not contribute to the spread of nuclear 
weapons.\13\
---------------------------------------------------------------------------
    \13\ For a discussion, see Matthew Bunn, ``Proliferation-Resistance 
(and Terror-Resistance) of Nuclear Energy Systems,'' presentation to 
``Systems Analysis of the Nuclear Fuel Cycle,'' Massachusetts Institute 
of Technology, 20 November 2007, available as of 28 April 2008 at 
http://belfercenter.ksg.harvard.edu/files/
bunn_proliferation_resistance_lecture.pdf.
---------------------------------------------------------------------------
    The most critical technologies of concern are enrichment and 
reprocessing, either of which can be used to support a civilian nuclear 
fuel cycle or to produce material for nuclear weapons. Every State that 
establishes an enrichment plant or a reprocessing plant is in a 
position, should it ever choose to do so, to withdraw from the NPT and 
quickly produce nuclear material for nuclear weapons. Restraining the 
spread of these technologies is a critical nonproliferation goal.
    There is no prospect, however, for an effective agreement that 
would ban additional states from developing enrichment and reprocessing 
technology; states simply will not agree to forswear this possibility 
indefinitely. The United States should eliminate ``forswear'' ``forgo'' 
and similar ``f words'' from our vocabulary in discussing these topics. 
The best that can be done is to convince suppliers to limit exports of 
these technologies to additional countries--which they have been doing 
since the mid-1970s--and, just as important, to give states strong 
incentives to rely on international suppliers for these services rather 
than making the large investments required to build enrichment and 
reprocessing plants of their own.
    Congress took an important step in this direction last year in 
providing $50 million for an international fuel bank, which would 
increase states' confidence that international supply would not be 
disrupted. The IAEA is still struggling to reach agreement on the terms 
and conditions for this bank, and to recruit additional donors. If all 
goes well, however, agreement on one or more fuel banks could be 
reached this calendar year.
    A fuel bank will be a useful step--but as the commercial market 
already provides strong assurance of fuel supply for most states, a 
fuel bank alone will only create a modest additional incentive to rely 
on international supply. The United States, Russia, and other nuclear 
suppliers are now working together to put together other incentives--
including help with infrastructure for nuclear energy, financing, and 
the like. ``Fuel-leasing''--fresh fuel supply combined with a promise 
to take the spent fuel away--could be a particularly powerful incentive 
for states to rely on international supply, since it could potentially 
allow more states to use nuclear energy without having to establish 
their own geologic repositories. I do not believe that take-back of 
spent fuel from foreign countries will be politically tenable in the 
United States in the near term, whether the reprocessing and 
transmutation technologies proposed for the Global Nuclear Energy 
Partnership (GNEP) are under active development or not; but Russia has 
legislation in place that allows it to enter into such contracts, and 
others may decide to enter the market for taking back spent fuel in the 
future.\14\
---------------------------------------------------------------------------
    \14\ Countries can already contract to send their spent fuel to 
France, the United Kingdom, or Russia for reprocessing, but France and 
the United Kingdom require that the high-level waste be returned, so 
countries still need a geologic repository.
---------------------------------------------------------------------------
    One step the United States should not take is to build a 
reprocessing plant ourselves in the near-term.\15\ Sending the message 
that the United States, with the world's largest reactor fleet, 
considers reprocessing essential to the future of nuclear energy will 
make it more difficult to convince other countries not to pursue their 
own reprocessing facilities. This, like RRW and the weapons complex, is 
an area where there would be nonproliferation benefits from spending 
less than the administration's request. I recommend that Congress 
provide a fiscal 2009 budget for GNEP similar to the fiscal 2008 budget 
provided in the omnibus appropriation, with program direction similar 
to that this subcommittee provided in its bill last year. Within that 
overall budget, spending on development of small sealed-core reactors 
with high degrees of inherent safety and security should be increased, 
to roughly $10 million. Such reactors--sometimes known as ``nuclear 
batteries''--might be factory-built, transported to where they would be 
used with a lifetime core of fuel already inside, and then transported 
back intact after 10-20 years of electricity generation, with little 
access to plutonium-bearing fuel and little build-up of weapons-
relevant nuclear expertise, potentially making nuclear energy widely 
available with reduced proliferation risks.
---------------------------------------------------------------------------
    \15\ For a more extended discussion, see Matthew Bunn, ``Risks of 
GNEP's Focus on Near-Term Reprocessing,'' testimony before the 
Committee on Energy and National Resources, U.S. Senate, 14 November 
2007, available as of 28 April 2008 at http://
belfercenter.ksg.harvard.edu/files/bunn-GNEP-testimony-07.pdf. See also 
Edwin Lyman and Frank N. von Hippel, ``Reprocessing Revisited: The 
International Dimensions of the Global Nuclear Energy Partnership,'' 
Arms Control Today, April 2008, available as of 28 April 2008 at http:/
/www.armscontrol.org/act/2008_04/LymanVonHippel.asp.
---------------------------------------------------------------------------
                        strengthening safeguards
    Events in Iran, Libya, and elsewhere make clear that the world 
needs a stronger nuclear safeguards system. The U.S. Government needs 
to do more to ensure that the International Atomic Energy Agency has 
the resources, authority, personnel, and technology it needs to do its 
job. In particular, the United States is behind on its assessed dues to 
the IAEA, and Congress should provide funding to pay the back dues and 
direct that the United States pay its dues on time each year. Congress 
should also provide increased funding for the United States voluntary 
contribution to the IAEA, in particular to ensure that funding is 
available for needed upgrades to the Safeguards Analytical Laboratory.
    That funding largely flows through the State Department. NNSA's 
role has traditionally been focused more on technical support for 
safeguards. But the U.S. investment in safeguards technology and 
safeguards experts at the national laboratories has declined 
dramatically since the early 1990s. Neither the IAEA nor the U.S. 
programs to support it have the resources needed to adapt the most 
modern technologies being developed in the commercial sector to the 
needs of safeguards, or to pursue longer-term safeguards R&D. NNSA has 
undertaken a very thoughtful ``Fundamental Safeguards Review,'' and as 
a result of that has launched a ``Next Generation Safeguards 
Initiative.'' Within nuclear energy R&D, more focus is also needed on 
``safeguards by design''--building effective safeguards and security in 
from the outset in design and construction of new facilities, just as 
is done with safety today. I recommend an increase of $10-$15 million 
in the funding for this critical effort, to finance both expanded R&D 
and expanded efforts to recruit, train, deploy, and retain the next 
generation of safeguards experts.\16\
---------------------------------------------------------------------------
    \16\ For a similar recommendation for reinvestment in safeguards,, 
see American Physical Society Panel on Public Affairs, Nuclear Energy 
Study Group, Nuclear Power and Proliferation Resistance: Securing 
Benefits, Limiting Risks (Washington, DC: APS, May 2005, available as 
of 28 April 2008 at http://www.aps.org/policy/reports/popa-reports/
proliferation-resistance/upload/proliferation.pdf).
---------------------------------------------------------------------------
 limiting proliferation of nuclear, chemical, and biological expertise
    Despite the recent improvements in the Russian economy, I believe 
that NNSA's scientist-redirection programs continue to offer benefits 
to U.S. security worth the modest investments the U.S. Government makes 
in them. Contrary to recent newspaper reports,\17\ the fact that some 
institutes that have received NNSA funds also have some experts who 
have worked on a safeguarded power reactor in Iran does not in any way 
mean that NNSA programs have somehow contributed to Iran's nuclear 
program. Moreover, while a substantial fraction of the long-term jobs 
these programs have created have gone to people who are not weapons 
scientists,\18\ that is hardly a surprise. It is hard to think of a new 
business in the United States or elsewhere that has former weapons 
scientists for 100 percent, or even 80 percent, of its employees.
---------------------------------------------------------------------------
    \17\ Matthew Wald, ``U.S.-Backed Russian Institutes Help Iran Build 
Reactor,'' New York Times, 7 February 2008.
    \18\ See U.S. Government Accountability Office, Nuclear 
Nonproliferation: DOE's Program to Assist Weapons Scientists in Russia 
and Other Countries Needs to be Reassessed (Washington, DC: December 
2007).
---------------------------------------------------------------------------
    At the same time, there is clearly a need to reform these efforts 
to match today's threats. The dramatically changed Russian economy 
creates a very different threat environment. The experience of the A.Q. 
Khan network suggests that dramatic leakage of proliferation-sensitive 
expertise may come from well-to-do experts motivated by ideology and 
greed, and not only from desperate, underemployed experts. For a 
terrorist group, a physicist skilled in modeling the most advanced 
weapons designs--the kind of person who has often been the focus of 
these programs in the past--may be much less interesting than a 
machinist experienced in making bomb parts from HEU metal, or a guard 
in a position to let thieves into a building undetected. Experts who 
are no longer employed by weapons institutes, but whose pensions may be 
inadequate or whose private ventures may have failed, could pose 
particularly high risks, but they are not addressed by current programs 
focused on redirecting weapons expertise. We need to find ways to 
address all of the highest-priority risks--but we are not likely to 
have either the access or the resources to do everything ourselves. The 
solution is likely to require working in partnership with Russia and 
other countries, to get them to do most of what needs to be done. I 
recommend that Congress provide roughly $30 million (comparable to the 
fiscal 2008 appropriation) for the Global Initiatives for Proliferation 
Prevention program, with direction to provide an in-depth analysis of 
what the most urgent risks of proliferation of weapons expertise are, 
and how they might best be addressed.
              intelligence and analysis to support policy
    Good information and analysis is critical to implementing 
successful nonproliferation policies. I recommend increases in two 
areas.
    First, the increased budgets for DOE intelligence that Congress has 
supported in recent years have supported a number of important new 
initiatives, such as the Nuclear Material Information Program (NMIP), 
intended to compile key information on nuclear stockpiles, their 
security, and the threats to them around the world. But this may have 
left too little remaining to support the critical capabilities at the 
national laboratories. It is my understanding that there have been 
drastic cuts in the budget for Livermore's Z Division, for example--
which for decades has provided some of the highest-quality nuclear 
intelligence analyses available to the U.S. Government (including 
having been correct about Iraq's aluminum tubes). I recommend that 
Congress act to ensure that these critical capabilities are maintained 
and expanded, while also ensuring that efforts like NMIP have the 
funding they need.
    Second, many important ideas for preventing proliferation come from 
independent analysts outside the Government. Yet U.S. nonproliferation 
programs rely much less on work by universities and non-government 
organizations than many other parts of the U.S. Government do. The U.S. 
Department of Homeland Security, for example, despite being a 
relatively new department operating in areas that are often shrouded in 
secrecy, has established several ``centers of excellence'' for 
university-based analysis of particular categories of homeland security 
problems, along with other programs focused on bringing in academic 
expertise to contribute to improving homeland security. NNSA should do 
more to do the same. I believe that each of the largest and most 
important nonproliferation programs would benefit from having a 
standing advisory group of outside experts regularly reviewing its 
efforts and suggesting ideas for improvement. In addition, I believe 
that NNSA could benefit greatly from a small investment in non-
government analyses of key proliferation risks and how they might be 
reduced more effectively. I recommend that Congress provide $10 million 
specifically directed for NNSA to support such non-government analyses 
of effective approaches reducing proliferation risks--and to additional 
training of the next generation of nonproliferation experts. Depending 
on the degree of success of this effort, appropriate levels of funding 
might increase in later years.
                 reducing plutonium and heu stockpiles
    Finally, disposition of the large excess stockpiles of plutonium 
and highly enriched uranium (HEU) in the United States and Russia 
continues to pose an important but difficult policy problem.\19\ As 
suggested above, the United States and Russia should agree to reduce 
their nuclear weapon stockpiles to very low levels and to eliminate all 
stocks of separated plutonium and HEU beyond those needed to support 
those low, agreed warhead stockpiles. This would mean disposition of 
far larger stocks of material in both Russia and the United States than 
have been declared excess so far. Since this will take many years, in 
the near term the United States and Russia should move to legally 
commit their excess material to peaceful use or disposal and place it 
under international monitoring to confirm that commitment--sending an 
important signal to the world that the United States and Russia are 
serious about their arms reduction obligations, at relatively minor 
cost.
---------------------------------------------------------------------------
    \19\ For more detailed discussions, see Bunn and Diakov, 
``Disposition of Excess Highly Enriched Uranium,'' and ``Disposition of 
Excess Plutonium.''
---------------------------------------------------------------------------
Disposition of Excess Plutonium
    Last year, Congress rescinded the remaining unobligated balances 
for U.S. and Russian plutonium disposition, and moved the U.S. 
plutonium disposition program to the Office of Nuclear Energy. This 
year, the requested funds are in Other Defense Activities.
    The cost of the U.S. MOX program has skyrocketed over the years. 
DOE's latest published estimates indicate a life-cycle cost for the MOX 
facility of some $7.2 billion (not counting the substantial cost of the 
pit disassembly and conversion facility). DOE has never adequately 
explained why this facility is costing many times what comparable 
facilities in Europe with more capability cost to build. Even once the 
expected $2 billion in expected revenue from MOX sales is subtracted, 
this still comes to over $120 million per ton of excess plutonium.\20\
---------------------------------------------------------------------------
    \20\ Total project cost for construction is $4.8 billion. 
Operations and maintenance is estimated at $2.4 billion. See U.S. 
Department of Energy, fiscal year 2009 Congressional Budget Request: 
Other Defense Activities (Washington, DC: DOE, February 2008), pp. The 
per-ton calculation assumes, over-generously, that the 9 tons of excess 
plutonium announced in 2007 is entirely additional to the 34 tons 
covered under the 2000 disposition agreement and costs nothing to 
process.
---------------------------------------------------------------------------
    Something has to be done with this plutonium, but it would be 
surprising if no effective approach could be found that would manage 
this material securely for less than $120 million per ton. If judged 
solely as a nuclear energy initiative, building such a plant would 
certainly not be worthwhile; it would demonstrate nothing except the 
ability to replicate in the United States an expensive fuel cycle 
approach with significant proliferation risks that is already routinely 
done in Europe, and even if a demonstration fast reactor were built for 
GNEP in the near term (which I believe would be unwise), the initial 
core could be fabricated elsewhere at lower cost.
    I recommend that Congress approve funding to proceed with the MOX 
plant for this year, while simultaneously directing DOE to carry out an 
in-depth study of potentially lower-cost alternatives. In particular, 
Congress should provide funding for DOE to restart development of 
plutonium immobilization technology, and direct DOE to outline the 
lowest-cost practicable immobilization option for the entire excess 
plutonium stockpile; Congress should also direct DOE to include, in its 
options assessment, the option of transporting the excess plutonium to 
Europe for fabrication and irradiation in existing facilities there. 
If, for example, the French were willing to take the United States 
excess plutonium for $1 billion, the U.S. Government would have saved 
billions compared to other approaches; if not, that would certainly 
make clear that even with high uranium prices, plutonium is a costly 
liability, not an asset.\21\
---------------------------------------------------------------------------
    \21\ Areva officials indicate that there are now trades among 
utilities in which some utilities agree to burn MOX fabricated from 
other utilities' plutonium, suggesting that if the price were right, it 
might be possible to convince utilities to burn this MOX in Europe.
---------------------------------------------------------------------------
    On the Russian side, critics have raised legitimate concerns about 
using excess plutonium in the BN-800 fast-neutron reactor, since it 
creates roughly as much plutonium as it burns. While DOE is working 
with Russia to modify the reactor from a plutonium ``breeder'' to a 
plutonium ``burner,'' consuming more plutonium than it produces, this 
is largely a distinction without a difference, as the baseline design 
for the BN-800 produces only slightly more plutonium than it consumes, 
and the revised design produces only slightly less. More important is 
the fact that under the 2000 Plutonium Management and Disposition 
Agreement, spent fuel from plutonium disposition will not be 
reprocessed until decades from now, when disposition of all the 
plutonium covered by the agreement has been completed. Thus, a large 
stockpile of weapons-grade separated plutonium will be transformed into 
a stockpile of plutonium embedded in radioactive spent fuel--at least 
for some time to come.
    The United States and Russia should agree that (a) the highest 
practicable standards of security and accounting will be maintained 
throughout the disposition process; and (b) all separated plutonium 
beyond the amount needed to support low, agreed numbers of warheads 
will be subject to disposition. If the United States and Russia agreed 
on those points, and also agreed that spent fuel from plutonium 
disposition (a) would not be reprocessed except when the plutonium was 
immediately going to be reused as fuel, and then under heavy guard, 
with stringent accounting measures, and (b) would only be reprocessed 
in ways that did not separate weapons-grade plutonium from fission 
products, and in which plutonium would never be separated into a form 
that could be used in a bomb without extensive chemical processing 
behind heavy shielding, then this disposition approach would deserve 
U.S. financial support. This is particularly the case as the BN-800 
approach fits in to Russia's own plans for the nuclear energy future, 
unlike previous plans that focused on MOX in VVER-1000 reactors. If the 
United States does not provide promised financial support for 
disposition in Russia, Russia may conclude that it is free to use the 
BN-800 to breed more plutonium from this weapons plutonium, and to 
reprocess the spent fuel immediately, adding to Russia's huge 
stockpiles of separated plutonium. Congress should provide sufficient 
funding for DOE to explore such approaches, and support them if 
agreement can be reached.
Disposition of Excess HEU
    The current 500-ton HEU Purchase Agreement expires in 2013. Russia 
is likely to have hundreds of tons of additional HEU at that time that 
are not needed either to support its nuclear weapons stockpile or for 
naval and icebreaker fuel. Russia has made clear that it has no 
interest in extending the current implementing arrangements for the HEU 
Purchase Agreement, under which Russia faces higher costs and lower 
prices than it would marketing new-production commercial LEU. But a 
variety of other arrangements are possible that could create 
substantial incentives for Russia to blend down additional HEU. 
Congress should direct DOE to enter into discussions with Russia 
concerning a broad range of possible incentives the United States might 
be willing to provide to help convince Russia to blend down additional 
HEU--and should consider setting aside a conditional appropriation in 
the range of $200 million to finance such incentives if an agreement is 
reached that requires such funding.
    Similarly, the United States can and should expand and accelerate 
the blend-down of its own excess HEU, beyond the roughly 3 tons per 
year now planned. Congress should provide additional funding targeted 
to accelerating the effort to get the HEU out of the canned sub-
assemblies and blended down to LEU.
                              conclusions
    Mr. Chairman, from al Qaeda to North Korea to Iran to global black-
market nuclear networks, the world today faces serious dangers from 
nuclear terrorism and nuclear proliferation. But there is no reason for 
despair. Indeed, the global effort to stem the spread of nuclear 
weapons has been far more successful than many people realize. Today, 
there are nine states with nuclear weapons; 20 years ago, there were 
nine states with nuclear weapons. (South Africa dropped off the list, 
became the first case of real nuclear disarmament, while North Korea 
joined the list.) That there has been no net increase during a period 
that saw the chaos following the collapse of the Soviet Union; secret 
nuclear weapons programs in Iraq, Iran, Libya, and, apparently, Syria; 
the entire period of the A.Q. Khan network's export operations; and the 
nuclear efforts of al Qaeda and Aum Shinrikyo is an amazing public 
policy success.
    But if we hope to maintain that success into the future, there is a 
great deal to be done--and substantial parts of the work will need to 
be done by NNSA. For the coming year, I recommend additional funding 
and direction to:
  --Move toward securing and consolidating all stocks of nuclear 
        weapons and materials worldwide, to standards sufficient to 
        defeat the threats terrorists and criminals have shown they can 
        pose, in ways that will work, and in ways that will last.
  --Build effective global standards for nuclear security, in part by 
        building on the foundation provided by UNSC 1540's legal 
        requirement that all countries provide ``appropriate 
        effective'' security for whatever stockpiles they may have.
  --Expand global police and intelligence cooperation focused on 
        stopping nuclear smuggling and terrorist nuclear plots, while 
        modifying our approach to radiation detection and cargo 
        scanning.
  --Expand R&D on nuclear forensics.
  --Engage with North Korea and Iran to verifiably end their nuclear 
        weapons programs.
  --Eliminate funding for RRW; scale back funding for complex 
        transformation to focus on a smaller, cheaper complex to 
        support a smaller stockpile; and increase funding for 
        dismantlement, placing excess materials under international 
        monitoring, and developing international approaches to 
        verifying nuclear disarmament.
  --Expand global police and intelligence cooperation to stop black-
        market nuclear networks, and increase efforts to help countries 
        around the world implement the UNSC 1540 obligations to put in 
        place appropriate effective export controls, border controls, 
        and transshipment controls.
  --Provide incentives for states not to build their own enrichment and 
        reprocessing facilities, while reducing the emphasis on near-
        term reprocessing in GNEP, reducing GNEP's requested budget, 
        and increasing funding for development of small sealed-core 
        reactors with low proliferation risks.
  --Reinvest in the people and technology needed for advanced 
        safeguards.
  --Continue a modest investment in reducing the risk of proliferation 
        of weapons expertise, while undertaking a fundamental review of 
        the highest-priority risks and the best means to address them.
  --Continue to support disposition of excess plutonium in the United 
        States and Russia, while reviewing cost-effective alternatives 
        and seeking new agreements to expand the amount of plutonium 
        subject to disposition and ensure that disposition will be 
        permanent and secure.
  --Offer new incentives for Russia to blend far more of its HEU to 
        LEU, and accelerate the blend-down of United States excess HEU.
    This is an ambitious agenda. Implementing it will require sustained 
leadership from the next president, who must move quickly to pursue 
these and other steps to reduce the threat. I believe that it is 
critical that the next president appoint a senior White House official 
with full-time responsibility for leading these efforts and keeping 
them on the front burner at the White House every day--as Congress 
directed last year.
    Implementing this agenda will also require sustained Congressional 
support. Congress has a responsibility and an opportunity to exercise 
in-depth and informed oversight of these efforts, through hearings such 
as this one and legislation. Congress should give the administration 
the funding and authority to get the job done, while holding the 
administration responsible for demonstrable results. In this year in 
particular, Congress should focus on laying the foundation of policy 
and authority that will allow the next president to hit the ground 
running. With a sensible strategy, adequate resources, and sustained 
leadership, the risks of nuclear terrorism and nuclear proliferation 
can be substantially reduced. American security demands no less.

    Senator Dorgan. Dr. Bunn, thank you very much. We 
appreciate the comments both of you have made.
    Your testimony shows substantial agreement.
    By the way, Dr. Bunn, you recommended increased funding in 
a number of areas. Did you aggregate your request? I noticed 
you made about three or four in various parts of your 
testimony.
    Dr. Bunn. I have not aggregated them partly because in 
several areas I do not specify the amount required, and most of 
those are small ones. I think the total is of the order--it 
depends on whether you count a conditional appropriation for 
blending down HEU, but the total is of the order of $600 
million or $700 million additional, I believe.
    Senator Dorgan. That is a 50 percent increase in the 
budget.
    Dr. Bunn. That is a large number.
    Senator Dorgan. You have heard the testimony from Mr. Tobey 
that the amount requested in the President's budget is 
sufficient. You disagree with that?
    Dr. Bunn. I believe that they are doing excellent work and 
that they will continue to do excellent work with the budget 
that they have requested, but I think there are additional 
opportunities to reduce risks faster and more broadly than they 
can be reduced with the budget that has been requested.
    Senator Dorgan. My question was not whether they are doing 
excellent work. I made the same observation, of course.
    But the question really is what kind of resources are we 
going to devote to this issue. What is the priority with 
respect to this issue of nonproliferation? The amount we invest 
in it tells us a little something about how important we 
believe it is.
    Let me ask a couple of other questions. Dr. Hecker, in your 
testimony, you write that international efforts have been 
focused on limiting India's access to nuclear technology, but 
they have become self-sufficient. So we now do not have access 
to India's technology developments. You say this should advise 
our diplomatic efforts.
    It seems to me that the message that India and other 
countries should take from all of this is just ignore the 
responsibilities, do not sign anything, do not be a part of the 
international community on nonproliferation, and some day you 
will get a reward for it because that is, in my judgment, what 
this agreement with India says. Tell me why that is an 
inappropriate conclusion.
    Dr. Hecker. On the basis of my recent visit to India and in 
talking with the Indian nuclear establishment, if you are 
asking why do they stay outside of the nonproliferation arena--
is that correct? I am not sure I understood your question 
correctly.
    Senator Dorgan. My question is, why would India and other 
countries not take as a lesson from this that if they just say 
we are not interested in the Nonproliferation Treaty, we do not 
have any intention of being part of this international 
agreement, and by the way, if we just wait long enough, you 
will come to us, there will not only be no penalty for it, we 
will be rewarded for it because we will reach an agreement with 
the United States on a nuclear agreement? And that agreement 
will allow us to have certain nuclear facilities behind the 
curtain with which we can produce the material to build 
additional nuclear weapons. It seems to me that is the message 
of this agreement with India. Why would other countries and 
India not receive that very message? And that message in my 
judgment is destructive.
    Dr. Hecker. That is a reasonable United States point of 
view.
    Let me just, if I may, give you the Indian point of view, 
as I talked to the Indian nuclear complex people. And they view 
it very differently. They do not view themselves as a 
proliferator. They view themselves as a legitimate nuclear 
weapons state.
    They happen to be caught on the wrong side of the divide 
when the decision was made in 1968, that those five countries 
that tested before 1968 would now be allowed to keep their 
nuclear weapons for some time, as article VI states, and others 
would not be allowed to acquire them. And the way the Indians 
view this is they did not test before 1968 in spite of the fact 
that they had substantial nuclear capabilities indigenously, 
much more so than China. But they, in essence, decided to 
refrain from nuclear testing. Their reward for refraining from 
nuclear testing is that they were now caught outside of the 
nuclear proliferation regime.
    They view that as having been discriminatory from the word 
go. They will never then abide to it. They will never get rid 
of the nuclear weapons they have now until there is global 
disarmament. And so they view it and say, well, look, if you in 
the United States and the other four so-called parties of the 
permanent five get rid of your nuclear weapons, so will we. So 
it is not surprising that the Indians take a very different 
point of view.
    To me now the issue is do you recognize the fact that India 
will not give up its weapons, and as I indicated in my 
testimony, I do not think our sanctions have particularly 
stopped its nuclear weapons program. What our sanctions have 
done, however, is slowed down their nuclear energy programs. In 
turn, they have made the Indians actually significantly more 
capable in nuclear energy technology to where today it may 
actually, I believe, be much in our benefit to have nuclear 
cooperation for nuclear energy with India. And so one has to do 
this tradeoff and in the end make the decision as to whether 
the risks are worth the benefits.
    Senator Dorgan. But it is curious, it seems to me, when we 
talk about nonproliferation, that we are reaching an agreement 
with a country that will allow them to produce additional 
nuclear weapons outside of what has been the established 
normative here, that is, the Nonproliferation Treaty. But I 
understand your answer from the perspective of India.
    I certainly believe the message we are sending to the world 
is hang in there. This country will recognize your right to 
build additional nuclear weapons. A lot of other countries 
would say, well, they are left outside of the effective date as 
well. That exclusive club that had nuclear weapons--what makes 
them so exclusive?
    But let me go beyond this and ask. The renewed calls these 
days from some quarters for the reconsideration and 
ratification of the Comprehensive Test Ban Treaty--a treaty I 
support, by the way, a treaty unfortunately which the Senate 
rejected some years ago. Could you give your opinions on the 
issue? And as a former national laboratory director, Dr. 
Hecker, could you talk about the certifications and the 
scientific challenges with CTBT, and has progress been made in 
those areas? Because some have alleged that the capability does 
not exist to provide certification.
    Dr. Hecker. I was there as director of record in 1996 when 
that decision was made by President Clinton, and I have 
reflected often on the overall decision of the Comprehensive 
Test Ban.
    What I would like to say, particularly still being close to 
having had the responsibility at Los Alamos to certify the 
safety and the reliability of nuclear weapons, that test ban 
comes with a price. And there is no question today that, as I 
look back since 1996, the last 12 years, because of the test 
ban, it has taken us longer. It has cost us more to recertify 
nuclear weapons fabrication. That was particularly for the 
plutonium component that was moved from Rocky Flats to Los 
Alamos.
    It is costing us from the standpoint of understanding the 
effects of aging in the nuclear stockpile, and slowly our 
confidence erodes, which could be boosted by nuclear testing. 
And so there is no question there is some risk associated with 
that. However, annually the laboratory directors must assess 
that risk and certify it to the President that the stockpile is 
still safe and reliable without nuclear testing. And I did so 
for several years and my colleagues have done so since then.
    So now what I have to do is trade that off versus the 
benefits of a nuclear test ban, and there I say today that the 
greatest risk of going back to nuclear testing is that the 
Chinese would go back to testing and the Indians would go back 
to testing, the Pakistanis would go back to testing. And as I 
personally today weigh those risks, I definitely come out in 
favor that it is in our Nation's and the world's interest to 
actually ratify the Comprehensive Test Ban Treaty.
    Senator Dorgan. Dr. Bunn?
    Dr. Bunn. Well, I completely agree that it is in our 
Nation's interest to move forward with the comprehensive test 
ban. I think that as we look toward trying to strengthen the 
nonproliferation regime and get other countries to accept 
stronger safeguards, more export controls, tougher enforcement, 
and more restraints on fuel cycle facilities, that we will not 
be able to get that unless we are seen to be living up to our 
obligations under article VI of the Nonproliferation Treaty. 
And the most important single thing that the non-nuclear 
weapons states see as central to that is the Comprehensive Test 
Ban. And so that is a political factor, in addition to the 
technical factors that Dr. Hecker was mentioning.
    On the technical side, I should also mention--I am sure Sig 
would agree--that the investments that we have made in the 
experimental facilities at the DOE facilities, the NNSA 
facilities, and the supercomputing and simulation capabilities 
have dramatically improved our understanding of the processes 
that take place in nuclear explosions compared to what they 
were before. There is a lot more that we know and there is a 
lot more that we know on the verification front as well. 
Seismology has moved forward very significantly since the 
Senate voted some years ago.
    As you know, under General Shalikashvili, the National 
Academy of Sciences produced a report that looked at all of the 
technical issues that were raised in the Senate debate on the 
Comprehensive Test Ban and argued that all of them could be 
successfully addressed.
    So I believe it is very important that the next President, 
first of all, recommit the United States to the Comprehensive 
Test Ban and then begin the process that will be necessary to 
build support over time in the Senate because the last thing we 
want to do is bring it to the floor again in the Senate and 
have it voted down again. That would be, I think, a major 
mistake.
    Senator Dorgan. It is sort of counter-intuitive when we 
talk about nuclear weapons and risks. I was just thinking, Dr. 
Hecker, you described the risk of them not working, but we have 
always built nuclear weapons with the understanding we are 
building them so that they can never be used. And the risk is 
not so much that they would not work. The risk is that they 
would be used and would work. So it is sort of counter-
intuitive even to discuss a weapon that, in my judgment, can 
never again be used on this planet because we have got tens of 
thousands of nuclear weapons.
    I am going to submit questions on RRW and some other issues 
because I have taken more time than I wished.
    Dr. Hecker. Mr. Chairman, if I may just say, I respectfully 
disagree with that, and that is, that yes, indeed, we expect 
and hope those weapons will never be used. However, if we have 
them in the stockpile, first of all, we must assure that they 
are safe--that is a huge, huge job--and that if our Nation's 
defense rests on that, that they do work, to both assure our 
own leaders and also to assure our allies. So I think it is no 
good to have a deterrent in the stockpile that is deteriorating 
that we lose confidence in. We must have confidence in spite of 
the fact that we hope to never use it.
    Senator Dorgan. Yes. Our Nation's defense, in my judgment, 
rests on the notion that they can never be used because there 
is no defense that provides any assurance for any life in this 
country if we have exchanges of nuclear weapons on this planet.
    The point you make is a scientific point and an 
understandable point to me, that as long as weapons exist, you 
want some assurance that they will detonate if used. I think 
any potential adversary on this planet would be just nuts to 
believe that our nuclear stockpile somehow is something that 
does not work.
    Having said all that, we have nuclear weapons. First, we 
have to protect them to make sure they are not in the wrong 
hands, and when I speak this way about nuclear weapons, people 
call.
    But at any rate, I think both of you have an unbelievable 
amount of information to provide the Congress and have done so 
over the years, and I deeply appreciate the work and your 
testimony today.
    I am going to submit questions, as I said on RRW, on and a 
couple of other things, if you would be kind enough to respond 
to them.
    Senator Dorgan. Let me call on my colleague, Senator 
Domenici.
    Senator Domenici. Thank you very much.
    Let me just say I am not a scientist like Dr. Hecker. I do 
not think his answer disagrees with you, it was a scientific 
answer. But without a lot of words, I want to say that I would 
put my marbles on your side of the argument, Dr. Hecker. I 
appreciate your being here to give us your expertise.
    Let me talk with you a minute about North Korea, Dr. 
Hecker. I was privileged a number of years ago, maybe seven. 
Five Senators and their wives were permitted to land the first 
American airplane in North Korea at their capital city. We 
stayed there 2 days. They have an encampment for visitors that 
is much like Russia had when they had a communist state. It was 
off on the side and it is beautifully built, and you would 
never know that poverty abides everywhere because it is a very 
nice, beautiful looking place. But the visit truly pointed out 
what an abominable place it was to live.
    I assume in your trips you have been permitted to see more 
of North Korea than just the place where we put guests. You 
have visited some cities. You have seen something of their 
infrastructure and how they live. Is that a fair statement?
    Dr. Hecker. Yes. I have been able to see more of North 
Korea than, let us say, just the inside of the ministry of 
foreign affairs and Yongbyon. However, everything that they 
show us, of course, is heavily scripted. But, nevertheless, on 
the drive out to Yongbyon you see a lot of the countryside, and 
I had occasion in August 2007 to be going out there when they 
had the heavy floods that caused the enormous damages. I got a 
chance personally to view what their infrastructure is like, 
and quite frankly, for the most part, they have a difficult 
time getting things together. But when you get into the nuclear 
complex, they have clearly put their capabilities there.
    But the place is changing. Over the five trips that I have 
taken, I have seen Pyongyang change. I would say, in spite of 
everything we think, the place is not about to fall apart.
    Senator Domenici. So you think the government is truly in 
control.
    Dr. Hecker. Yes. You mean the nuclear weapons and the 
nuclear materials?
    Senator Domenici. The nuclear weapons and the nuclear 
materials are in very good shape and controlled adequately by 
the government. Is that correct?
    Dr. Hecker. Right. And I have had that discussion directly 
with the people at Yongbyon to express our concern, your 
general concern, about nuclear material security, and what they 
say, of course, is not to worry. We know how to protect our 
materials. My assessment in North Korea is that, yes, the 
government controls those materials. What you have to worry 
about is making sure that the government itself does not export 
those materials.
    Senator Domenici. I think what I am going to do, Dr. Bunn--
I have a number of questions. I think I am just going to submit 
them, but I would just end this conversation with you with a 
little discussion of Iran. In fact, both of you are free to 
discuss with me what you like on Iran.
    We happen to be talking about two of the most difficult 
situations when we speak of North Korea and Iran. Could I ask 
both of you to talk about your concerns with reference to where 
Iran is today and where you think they are going to go? And are 
we handling the situation correctly in terms of trying to 
inhibit them from getting a nuclear weapon at this point? Let 
us start with you, Dr. Hecker.
    Dr. Hecker. My view is that Iran is putting in place all 
the pieces for what I call the nuclear weapons option, and it 
is not only the highly publicized facilities at Natanz for 
uranium enrichment which is one path to the bomb, that is, to 
enrich uranium to bomb-grade. They are clearly doing that under 
the umbrella of saying they are doing this for nuclear energy, 
and it turns out that is legitimate. But, of course, the 
concern is if they keep going, they can make bomb-grade 
material. That is what worries us, and we have no assurance at 
this point that they will not keep going.
    But they also have a program that is much less publicized 
and that is, they are building a small reactor. And it is the 
type of reactor that would make good bomb-grade plutonium the 
same way that North Korea is making bomb-grade plutonium. It is 
a little different design, but it makes just as good bomb-grade 
plutonium. And they are continuing with that project although 
at a reasonably slow pace, but they are continuing. And 
associated with that, they have developed a heavy water plant 
that supplies that reactor which is necessary for eventually 
making bomb-grade plutonium.
    The fact that they have all those pieces in place worries 
me significantly. And yet, as to whether they have made the 
decision to go to nuclear weapons, I cannot tell that, but the 
capabilities are such that they could do so in the future.
    In terms of what we are doing currently, I guess much like 
in North Korea, I feel in the end that you are best off if you 
have an in-country presence, if you have a dialogue regardless 
as to how distasteful you might find that dialogue. I think we 
missed a significant opportunity in 2003 with Iran, as we 
missed a significant opportunity in late 2002 with North Korea. 
Now it is more difficult to get back in the game.
    I still favor the dialogue, but somehow we still also need 
to look at plan B, what if all of this fails. The most 
important way that I could see at this point to get Iran to 
take a somewhat different tack is you have to enlist China and 
Russia to put a serious squeeze on Iran to make sure that they 
understand that developing that complete nuclear weapon option 
cannot be done for free.
    Senator Domenici. Dr. Bunn?
    Dr. Bunn. I think, unfortunately, that our--I agree 
completely with Sig that we missed a major opportunity in 2003 
and also some other opportunities with Iran. I think that our 
policy of refusing to talk, while the Iranians kept building, 
essentially just gave the Iranians the opportunity to keep 
building. And so now we are where we are today with more than 
3,000 centrifuges in place in Natanz, and unfortunately, we 
have to cope with that reality.
    I think that the next President is going to have to engage 
if we are going to get any kind of restraint on the Iranian 
program, and we are going to have to put together a package of 
carrots and sticks that is big enough and credible enough. And 
I think it has to have some significant carrots and not just 
the sticks to convince the Iranian Government that it is in 
their interest to reach an agreement that deals with at least 
some of our security concerns, and if we are going to convince 
them of that, it has to be something that the advocates of 
compromise in Tehran can go to the Supreme Leader Khamenei and 
make the case and win the debate with the hawks in Tehran. And 
that means we are going to have to address some of the Iranian 
concerns if we want them to address some of our concerns, and 
it is going to be a difficult discussion. It is going to 
involve some hard choices.
    I had the opportunity--a couple of years ago, we had in our 
research group at Harvard a former deputy foreign minister of 
Iran, and shortly after his arrival, he had said to us that, 
while he would come, he would not actually write about nuclear 
matters while he was in the United States because it was too 
sensitive back home. A week after he arrived, he sat down in my 
office and said let us write a joint proposal for how to solve 
the Iranian nuclear problem. I said, surely, you must be 
kidding. There is no way that you and I could possibly come to 
an agreement on what ought to be done with Iran's nuclear 
program. And in the course of a day, we actually did and then 
published a piece that was a joint proposal on how to address 
the Iranian nuclear problem.
    So the experience that there are people who remain well 
placed within the Iranian regime who are willing to compromise 
made me at least a little more optimistic, but it is going to 
be a hard problem.
    Senator Domenici. Thank you very much.
    Senator Dorgan. Senator Feinstein?
    Senator Feinstein. Thank you very much.
    You both are very respected, and it is a very fine thing 
for us to be able to listen to your views.
    Dr. Bunn, I have been reading your statement, and I want to 
ask you about one part of it in a moment. But could you please 
send the committee your recommendations as they relate to the 
numbers, the dollars, for each of the areas in writing? We 
would appreciate that very much.
    But I wanted to express my concern, Mr. Chairman, because I 
very much agree with your views on this issue, the fact that we 
have cut out the money for new nuclear programs.
    And I do want to raise an issue of the labs. I am very 
concerned because I am really not sure where this is going. All 
of the labs are taking cutbacks. I know in some detail about 
Lawrence Livermore. I do not know about the other two.
    However, at Lawrence Livermore, there is a $280 million 
shortfall. They are terminating 750 people, 250 voluntarily, 
500 not voluntarily. Pink slips will go out in May. Three 
hundred and fifty of them are senior scientists and engineers. 
That should be a real national security danger point. I have 
had two discussions with Mr. D'Agostino, whom I respect 
greatly, who has pointed out to me that the labs now need to 
become more competitive and they are going into 
nonproliferation areas. I do not know what this means with 
specificity. I am very concerned about it.
    I am also very concerned about when you add up the cutbacks 
at Los Alamos, Sandia, and Lawrence you are going to have many, 
many senior scientists and engineers without employment. I 
think this is a national security danger point.
    I also think that we ought to know exactly where these labs 
are going. As they have associated themselves with a private 
contractor, they lose their exempt status. They become LLC's. 
They have to pay taxes, and there is a fee associated with them 
which, in the case of Lawrence Livermore, is $44 million this 
year for Bechtel. So where are these labs going to go long-term 
now? And what are they going to sell? To whom are they going to 
sell it? I think we ought to begin to take a good look at that.
    Senator Domenici. I am with her.
    Senator Feinstein. Now, let me go, Dr. Bunn, to your 
statement, particularly on the limited role of radiation 
detection. You point out that neither the detectors being put 
in place nor the advanced spectroscopic portals planned for the 
future would have much chance of detecting and identifying 
uranium metal with modest shielding, although they might be 
effective in detecting plutonium or strong gamma-emitters used 
in a so-called dirty bomb.
    This is a big area of concern for many of us. You say that 
it is worth making some investment in radiation detection but 
not putting undue reliance on this line of defense. The NNSA's 
second line of defense has been successful in cooperating with 
many countries to put radiation detection in place at key ports 
and border crossings. You go on then to describe a modified 
approach to cargo scanning.
    Could you please verbally share this with this 
subcommittee? This is one of our big concerns. I can speak as 
somebody on the Intelligence Committee, a big concern about a 
dirty bomb coming into this country in some way. What do you 
believe is the most effective way we have of detection?
    Dr. Bunn. Well, I think, first of all, that we really need 
to look at it from a systems point of view and not just does 
this detector at this particular border crossing work. You have 
to think about, okay, if I am the bad guy, am I going to see 
that that detector is in place and go around that border 
crossing and go somewhere else. So you need to look at it from 
the point of view of the effectiveness of the total system, not 
just the effectiveness of a particular detector at a particular 
point.
    Now, I think the detectors we are putting in place now will 
work very well in detecting the kinds of things that would 
typically be used in a dirty bomb except in the case of alpha-
emitters, like americium 241 that would be hard for them to 
detect because alphas are not very penetrating. But I think 
overall the dirty bomb threats are bigger from the big gamma-
emitters like cesium and cobalt and things of that kind.
    Now, I do believe that in my view Congress made a mistake 
in insisting on scanning of 100 percent of the containers 
coming to the United States. I think that is going to be very 
expensive. I think it is probably not going to be doable 
because in some cases, for example, a container gets shipped 
out of one port, heading for another point, and then it gets 
shifted from one boat to another without ever getting to the 
other port, and then comes to the United States when you did 
not know it was headed for the United States when it left the 
first port. That is just some of the realities of global 
shipping today.
    So I believe what we need to focus on is what would we need 
to do to deter the terrorists from using those containers, and 
that means we need to make sure that the terrorists think there 
is a big risk that that container will be scanned, think that 
there is some significant risk that what they have put in it 
will be found if it is scanned, and think that we will take 
some significant action if it is scanned.
    The way the law is written now, there are no standards for 
how good those scans should be, what actions should be taken if 
something is found, and I think it creates an incentive to put 
in a lot of shoddy scanning, frankly. You know, a country 
claims, oh, yes, I scanned that, but there is no good scanning.
    Again, you have to look at the total system. What if you 
scan a container and then you put a seal on it, but it is a 
crappy seal and anybody could open the thing after you have 
scanned it and put something in there and put the seal back on, 
and nobody would be the wiser? So you have to look at the whole 
system to understand how effective it is going to be and where 
the vulnerabilities are because, frankly, the bad guys we are 
dealing with are intelligent folks, and they are going to be 
watching what we are doing and trying to figure out what the 
weaknesses are, just as they noticed that we were not looking 
for box cutters on airplanes before 9/11.
    Senator Feinstein. Thank you very much. I think my time is 
up. So let me stop now. Thank you.
    Senator Dorgan. Senator Allard?
    Senator Allard. Thank you. I just have one area that I 
wanted to inquire about and that is the additional dollars to 
put into the International Atomic Energy Commission. I think 
the request for $5 million to $10 million. What is the basis 
for this specific request, and how did you arrive at that 
particular amount?
    Dr. Bunn. Well, this is specifically for the IAEA Office of 
Nuclear Security. This is something that existed in sort of 
embryonic form before 9/11, but it really grew substantially 
after 9/11.
    They spend about $20 million a year today. They provide, I 
think, critical services in providing international peer 
reviews of nuclear security arrangements, not only physical 
protection but also control of radiological sources, border 
radiation detection, and the like, development of international 
recommendations of standards for different aspects of nuclear 
security, and also tracking of nuclear smuggling for the entire 
world community, not just for the U.S. Government. A lot of 
these things are things that we cannot do as well ourselves 
because the IAEA has the sort of international legitimacy of 
being an unbiased international institution.
    Another $5 million or so would allow them to significantly 
increase the pace at which they can meet member state demands 
for peer reviews of nuclear security and other nuclear security 
assistance. I think it would make a significant difference in 
the effectiveness of that operation. This goes into what is now 
called the nuclear security fund, which is almost entirely 
voluntary contributions by states. I think ultimately we need 
to move security into the regular budget of the IAEA so that 
states do not have to keep coughing up these voluntary 
contributions.
    Senator Allard. How would you evaluate their job? Do you 
think that they have strengthened nuclear security worldwide?
    Dr. Bunn. I think they have contributed significantly. I 
think there are weaknesses. Some of the weaknesses are their 
fault. Some of the weaknesses are imposed on them. For example, 
they are constantly struggling with not having enough money and 
almost all the money they do get is earmarked by the various 
donor states that provide the money. And so they frequently 
come up--you know, they send a team out somewhere and they come 
up with some urgent priority that needs doing and they have not 
got any money to do it.
    Now, as I mentioned, I think they do have a tendency to be 
a tad on the bureaucratic side and to focus perhaps more on the 
legal niceties than on getting the job done in some cases. But 
I think overall they are doing as well as we can generally 
expect these international institutions to do, and I think that 
money would be well spent and well invested.
    Senator Allard. And you are confident that--the $5 million 
to $10 million that we would put in there--does it go with 
strings attached, or is it flexible money?
    Dr. Bunn. It depends on what Congress tells the NNSA to do. 
I am sure that if Congress simply said it needs to go to the 
IAEA and let NNSA decide how, that NNSA would attach strings. 
There is no doubt in my mind about that. So I think that is up 
to Congress to say either give it as money that they can spend 
on their own priorities or allow NNSA to make sure that they 
spend it on NNSA priorities.
    I personally would prefer that at least a significant 
portion be available to the office without strings so that when 
they do encounter these unexpected opportunities to reduce 
risk, that they will have some money available to do that.
    Senator Allard. Thank you, Mr. Chairman.
    Senator Dorgan. Thank you very much, Senator Allard.
    Senator Domenici, did you have any additional inquiry?
    Senator Domenici. Thank you, Mr. Chairman. If you do not 
mind, just a couple, I will not take long.
    Maybe I could ask Sig this question regarding North Korea. 
What do you make of the current reports of North Korea's 
nuclear cooperation with Syria? And then Israel bombed the 
major facilities. I have been briefed and seen what I am 
permitted to see that I cannot bring here, but I know Israel 
did wipe out a major facility that was shown before its being 
bombed and the evidence indicating that it was a nuclear bomb 
facility.
    What do we do about and what is your thinking about North 
Korea doing these kinds of things while we are working with 
them? Would it be credible that they would negotiate something 
honestly while they are doing this kind of thing with Syria?
    Dr. Hecker. My opinion is that the CIA in its revelations a 
week ago made a very credible case that the facility in Syria 
was a nuclear reactor. They made a credible case that most 
likely North Korea built that reactor with Syria. So I 
personally believe there was a very strong connection between 
North Korea and Syria. It is a collaboration that had been 
ongoing at least for the last half a dozen years or so and 
perhaps planned for the last dozen years or so. And it went on 
at least until the time that Israel bombed it.
    In terms of the immediate risk, of course, it turns out 
Israel took care of the immediate risk because Syria itself 
does not appear to have the capabilities to have done much with 
that, and that is why it, in essence, needed the turnkey 
operation.
    This to me, in terms of our relationship with North Korea, 
is the most troubling. And my own sense with North Korea has 
been sort of a two-pronged approach, all of it based on making 
certain that the actions we take with North Korea actually 
reduce the risks to us. And that is, first, make sure that they 
make no more plutonium, and that is where disabling and 
dismantling the Yongbyon facilities come in. And that has to 
remain first priority. No Yongbyon, no more plutonium, no more 
bombs, and no better bombs. That is key.
    The second is no export. The key thing is the export of the 
plutonium. There cannot be export of plutonium. I personally 
believe that there was not because North Korea had so little. 
Again, if they make no more, the chance of exporting plutonium 
goes down.
    However, then the next risk is exporting the nuclear 
technologies such as building the reactor. And quite frankly, 
to me what is of much greater concern is that export occurred 
to Iran rather than Syria. Syria in the end cannot do much with 
it, but Iran could do much with it.
    And so that has to be the next point to press with North 
Korea in our negotiations. I do not believe that all of that is 
going to be forthcoming right now in the declaration. I think 
it is more important to go ahead and eliminate Yongbyon and 
then make certain that we walk down the path because what Syria 
has demonstrated is that in spite of the fact that we have been 
watching so closely--we think our technical national means are 
so good--they built a whole reactor under both ours and the 
Israelis' watchful eyes. How did they do it? What does that 
mean in terms of international proliferation rings? These are 
very serious issues to all of the questions that you have put 
on the table. North Korea could actually now help us unravel 
that, and that is the place where we have to press them. But 
let us shut down Yongbyon first. That is my view.
    Dr. Bunn. Let me just add that in one respect the Bush 
administration has done a better job than Will Tobey admitted 
in that the October 3, agreed statement does, in fact, commit 
the North Koreans not to export any nuclear technology or 
materials. Now, our ability to verify that, of course, is 
another question, but there is the commitment in place signed 
by the North Koreans. And the North Koreans have repeatedly 
reiterated that commitment, including in Sig's most recent 
trip. So I think that is very critical. The North Koreans have 
heard the message that that is a red line for us and they have 
committed not to cross that red line.
    Senator Domenici. What is going on that makes North Korea, 
in your opinion, willing to make any agreements with our world 
versus theirs? Why do you think they would do this?
    Dr. Hecker. I am sorry, Senator.
    Senator Domenici. Why will they enter into agreements and 
carry them out with the United States and others? Are we giving 
them something that they need? Are we going to help them feed 
their people? Why would they do this?
    Dr. Hecker. I am best at evaluating their capabilities, not 
necessarily their intent. But having been there a number of 
times, I actually believe that they recognize that their 
economy is in serious trouble. They have to do something to 
feed their people. They actually do view, in my opinion, the 
United States as the key to that. The United States holds the 
key to international commerce, and even though the Chinese and 
the South Koreans are helping to feed the North Koreans now, in 
the end, the North Koreans recognize unless they strike some 
sort of a deal with the United States, they are not going to be 
able to get out of the economic hole that they are in. I 
personally believe that is why they are trying to make the deal 
with the United States.
    Senator Domenici. Well, let us hope we remain economically 
strong enough for their belief in us to be a reality. I am not 
sure of that.
    Senator Feinstein, since you talked about something a 
moment ago, might I say that on the Los Alamos layoffs, there 
is a very different flow of those people leaving and what were 
the people leaving doing--it is much different than Lawrence 
Livermore. Nonetheless, it is a serious problem, and I would 
say your willingness to try to do something about it--I will 
join you. I have talked to the chairman enough about it. I 
think he would.
    The problem is we do not have anyone that understands this 
problem that is in the business of allocating the money that 
goes to the various subcommittees. If somebody allocating knew 
that we cannot take care of the laboratories and the water 
programs, the Corps of Engineers programs on the money that is 
being given to us--we have to trade off water programs for the 
laboratories. God only knows, nobody would ever have thought we 
would be doing that, but that is the budget we have got. The 
big, giant Corps of Engineers--and everybody wants that, and 
that is to be matched up with the most vital science part of 
the national budget that there is, the national laboratories. 
It is kind of a crazy thing.
    I managed to get by for about 12 years doing it, but it is 
coming to a head as the squeeze is put on the discretionary 
domestic programs. We get knocked in the head on that on our 
side. So do you. So I do not know how to solve it, but I am 
willing to try with the chairman who knows our allocation must 
go up or we will have the same problem again.
    Senator Dorgan. Well, if I might say, our allocation is a 
serious problem. As you know, last year we went through--this 
is very destructive, this process that we are in, where we do 
not even get appropriations out until December or perhaps 
January because then you are 4 months into a fiscal year 
running a laboratory without any notion of what kind of 
resources are going to come your way.
    But the fact is--there is lots of responsibility on all 
sides for this. We get an executive budget that cuts to the 
bone domestic discretionary, and our subcommittee cuts $1 
billion out of water projects in the Corps and the Bureau in 
this year. We are not going to do that, but that is what the 
executive budget does.
    Then the President says I want $196 billion in this fiscal 
year as an emergency for Iraq and Afghanistan, and then we add 
in the appropriations process for this fiscal year $21 billion 
on domestic discretionary. The President says I am going to 
veto all those bills. So we are at a standoff.
    Now, Senator Domenici is correct that within the confines 
of the resources we have available, trying to negotiate with a 
President that last year said I do not intend to negotiate, it 
is going to be my way on domestic discretionary--within the 
construct of that, as Senator Domenici is talking about, what 
kind of allocation do we get in this subcommittee versus other 
subcommittees? But frankly, the whole system is broken at this 
point.
    And I just want to make a point that I think that if we 
continue down this road, we are going to dramatically weaken 
and injure all of our national laboratories, and I have said 
before these are national treasures. These are repositories of 
investment--they are investments in the future, repositories of 
vast amount of knowledge and talent. And if we lose that, we 
will lose a lot more than just a few layoffs or even thousands 
of layoffs, as the Senator from California indicated. We need 
to find a way, even outside of the discussion about should 
there or should there not be an RRW, even outside of those 
issues, to stabilize the employment levels at our national 
laboratories so that they can continue to attract our best and 
brightest and continue to do the work that gives us the 
innovation for the future. We are going to try to do that.
    But boy, I am telling you, I think the entire system is 
broken. It starts at the White House and continues on through 
here. I think the President and the Congress have to understand 
what we are going to lose if we continue down this road.
    Senator Feinstein. If I may, Mr. Chairman. I agree with 
what both of you said, what Senator Domenici said. After 
listening to Mr. Anastasio talking to the head of the nuclear 
agency, what they are doing is accommodating the people to the 
budget, which is dropping dramatically. That also changes the 
mission.
    What we do not know is how the mission of the labs is going 
to be changed by this, and I think we ought to know it. Now 
that there is competition and privatization in these labs, how 
exactly is that mission going to change? I do not want to get 5 
years down the pike and find out that something dreadful is 
really happening at the labs that we did not know about, and 
this worries me greatly. So I would hope that we can get the 
actual figures. We can talk with people who know.
    Mr. D'Agostino tells me, well, they are going more into 
nonproliferation. What exactly does that mean? What do they do? 
Are they selling? What are they selling? So I think we need to 
know the answers to these questions, and I look forward to 
working with you.
    Senator Dorgan. Let me just say that I consider this a 
priority, and I think our staffs will work with us to try to 
determine, within the confines of the rather broken system we 
are working in at the moment--we need to find a way to 
strengthen and try to provide some stability for our national 
laboratories. So that will be a priority for this subcommittee.
    As you know, we probably will mark up sometime in late May 
or early June in a subcommittee, and then go to a full 
committee markup. And I guess the question this year is going 
to be will there be negotiations with the White House--if so, 
when--on domestic discretionary. But we have taken a pretty 
good whack on the domestic discretionary recommendations in the 
President's budget. Last year he did the same and said I am not 
going to negotiate from that point really. Again, there is lots 
of responsibility on all sides for this. We have to try to get 
this right.
    Dr. Hecker, you wanted to comment?
    Dr. Hecker. Yes, Mr. Chairman, Senator Domenici, Senator 
Feinstein. Senator Feinstein, you raise a question that is very 
near and dear to my heart. For 34 years, I worried precisely 
about that and especially the 12 years as director at Los 
Alamos.
    Just to briefly comment. To me it takes three things that 
we need to sort out. One you have mentioned is the mission. 
Quite frankly, as Senator Domenici knows, in 1992 when the 
Soviet Union collapsed, we had to struggle with that, but we 
found a mission. We decided what the laboratories needed to do 
from a national interest. I think the mission can also be 
redefined, but obviously, somebody has to do it. The mission is 
still there. So, first, mission.
    Second, budget and you have mentioned that. Clearly, the 
budget is important. I will not need to elaborate on that.
    But third no one has mentioned, and it is actually in my 
opinion the most important, and that is the environment at 
these laboratories. When we went the direction of 
contractorization, we made a grievous error of pushing these 
laboratories in a direction that simply is not right for this 
country, and we have suffered from that. The whole environment 
at these laboratories has changed.
    Second, over the last, I would say, now 16 years, the 
regulatory environment at these laboratories has become so 
risk-averse that we essentially cannot get work done anymore. 
In 1965, I came to Los Alamos as a young student because it was 
the best place to go work. Unfortunately, these laboratories 
today are not the best places to go work anymore, and we need 
to make them such. And just more money does not do the trick. 
We have to change the working environment to allow people to 
get their work done. These places nowadays look more like 
prisons than they look like university campuses or something in 
between, which is what we tried to make them. Attract the best, 
protect the most important. We have lost the sense of all of 
that. That is one of the reasons why these laboratories are 
suffering today.
    So, Mr. Chairman, when you say the system is broken, it is 
broken in many different ways, and we should fix. I agree.
    Senator Domenici. What did you say? When we moved toward 
what? Privatization you said?
    Dr. Hecker. I am sorry.
    Dr. Bunn. He said contractorization.
    Dr. Hecker. Oh, I am sorry. The contractorization to 
actually move the system, as Senator Feinstein has pointed out, 
to limited liability corporations, companies that are for-
profit companies where we are paying enormous amounts to have 
these laboratories run. These laboratories used to be run as a 
public service for the United States of America. They should 
not be run for profit. What we do in essence is a semi-
government function.
    Senator Feinstein. The University of California did this as 
a public service to the country.
    Dr. Hecker. Correct.
    Senator Feinstein. And now essentially they are replaced by 
private companies that charge substantial fees.
    Senator Dorgan. At a recent hearing, we developed that 
point, that there is a substantial increase in costs as well. 
And I think there is a difference in culture I think is what 
you are referring to.

                         CONCLUSION OF HEARING

    Let me thank both of you for being here and contributing to 
the subcommittee.
    This hearing is recessed.
    [Whereupon, at 11:39 a.m., Wednesday, April 30, the subcom
mittee was recessed, to reconvene subject to the call of the 
Chair.]









    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2009

                              ----------                              

                                       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 2009 
Energy and Water Development Appropriations Act.]

                      DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army

                       Corps of Engineers--Civil

   Prepared Statement of the National Corn Growers Association (NCGA)
    The National Corn Growers Association (NCGA) appreciates the 
opportunity to share with the subcommittee our Energy and Water 
Development Appropriations priorities for fiscal year 2009. 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; securing $50 million in the Fiscal Year 2009 Energy 
and Water Development Appropriations bill for the Upper Mississippi 
River System (UMRS)--Navigation Ecosystem Sustainability Program (NESP) 
authorized by H.R. 1495, the Water Resources Development Act 2007, 
title VIII, secs. 8001-8005; and continued support for the Department 
of Energy's Biomass Technologies Program.
    NCGA's mission is to create and increase opportunities for corn 
growers. NCGA represents more than 33,000 members and 48 affiliated 
State organizations and hundreds of thousands of growers who contribute 
to State checkoff programs.
                      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. In 2006, more than half 
of the 240 operational Corps-funded lock chambers in the United 
States--which handle over 625 million tons of freight each year--are 
over 50 years old and have exceeded their economic design lives. Many 
locks currently in use are too small for today's larger tows, 
susceptible to closures and long delays for repairs and unable to 
effectively deal with lines and wait times that result from their 
obsolescence. In recent years, 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.
    Funding (in constant dollars) for Operations and Maintenance (O&M) 
on America's inland navigation system has remained flat for more than 2 
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.
    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.
           navigation ecosystem sustainability program (nesp)
    The Upper Mississippi River System (UMRS) includes the Upper 
Mississippi River and Illinois Waterway and tributary rivers, with 38 
lock and dam sites stretching from Minneapolis, Minnesota, and Chicago, 
Illinois, to just south of St. Louis, Missouri. The Upper Mississippi 
has 29 locks and 858 miles of commercially navigable waterway, and the 
Illinois Waterway has 8 locks and is navigable for 291 miles. Also part 
of the UMRS is the Missouri River, which has no locks along its 735 
navigable miles from Sioux City, Iowa, to St. Louis. There is one lock 
along the 26 navigable miles of the Kaskaskia River in southern 
Illinois.
    In 1986, Congress declared the UMRS ``a nationally significant 
ecosystem and a nationally significant commercial navigation system.'' 
The same waters that transport more than 60 percent of America's corn 
and soybeans are home to 25 percent of North America's fish species and 
are globally important as a flyway for 60 percent of North America's 
bird species. However, both the river transportation system and the 
river ecosystem are deteriorating. The locks that help tows to navigate 
the river are antiquated--increasing cost, safety risks and lost market 
opportunities. And from an ecological perspective, the floodplain is 
degraded, islands eroded, backwaters filled in and the river's natural 
flows disrupted.
    With enactment of the Water Resources Development Act 2007, 
Congress created a historic opportunity for the UMRS. Congress 
recognized the economic and ecological importance of what truly is 
America's River by giving the U.S. Army Corps of Engineers a new, dual-
purpose authority to integrate management of the river's habitats and 
navigation system in an unprecedented way. Corn growers are asking 
Congress to invest in the future of the UMRS by funding implementation 
of this new program.
    We request your support in securing $50 million in the Fiscal Year 
2009 Energy and Water Development Appropriations bill for the Upper 
Mississippi River System (UMRS)--Navigation Ecosystem Sustainability 
Program (NESP). Now is the time to build on the promise of the new 
authority for NESP by including funding for the program in the Corps' 
fiscal year 2009 construction general account. Congress has authorized 
NESP at $2.2 billion for navigation improvements; half of which is 
funded by the Inland Waterway Trust Fund, and $1.72 billion for 
ecosystem restoration, with an additional $10 million per year for 
monitoring. This will permit the Corps to begin implementing specific 
projects. NESP is a long-term vision, with the current authority 
providing for the first increment of that vision.
    Over approximately the next 15 years, NESP will improve navigation 
efficiency by constructing new 1,200-foot locks at Locks & Dams 20, 21, 
22, 24, and 25 on the Upper Mississippi River, and at LaGrange and 
Peoria on the Illinois Waterway. The plan also includes small-scale 
measures such as mooring facilities and switchboats and mitigation for 
the environmental effects of the lock construction and increased river 
traffic.
    Concurrently, NESP will also work to restore and preserve more than 
100,000 acres of habitat in a manner that is entirely compatible with 
current navigation practices. Restoration projects will range in size 
and complexity but will focus on restoring system-wide natural 
processes vital to the river's health. Examples include mimicking 
natural flow regimes by drawing down pools in the summer and restoring 
floodplain habitat in cooperation with willing landowners. Because the 
UMRS is a vast and ecologically complex system, NESP includes an 
adaptive management strategy, in which sound science, learning and 
monitoring guide the most efficient and effective allocation of 
resources.
    We appreciate this subcommittee's help in securing Pre-Construction 
Engineering and Design in years passed prior to authorization in the 
2007 Water Resources Development Act. Congress has provided for $13.5 
million in fiscal year 2005, $10 million in fiscal year 2006, $10 
million in fiscal year 2007 and $8.85 million in fiscal year 2008. 
Capability levels for PED were identified as $24 million for each 
fiscal year to achieve a 3-4 year pre-construction engineering and 
design phase.
    For continued success, U.S. farmers need efficient transportation 
networks, which is why we have been long-time advocates for 
improvements to our inland waterway system. Meeting future 
international demand for corn, soybean, and other grains will be 
impossible without a modernized river infrastructure.
    You have an opportunity to impact economic growth in our Nation. 
Your help in securing funds for NESP will allow the Nation to achieve 
the benefits of river infrastructure and ecosystem improvements as soon 
as possible.
                      biomass technologies program
    The United States needs to displace imported petroleum with 
domestically produced ethanol. Grain ethanol is the only economically 
viable solution today to reduce our reliance on foreign sources of 
energy. In order to achieve energy independence, the United States must 
capitalize on an abundance of domestic resources. Using starch from 
corn grain to produce ethanol is a proven, efficient way to reduce oil 
imports. Ethanol reduces green house gases, continues to spur economic 
development in rural communities, provides for a high-value co-product 
and stabilizes farm income. In 2007, strong commodity prices reduced 
Government spending by $6 billion. Over the next decade, corn grain 
will continue to meet the growing demands from livestock feed, human 
food, export sectors, and ethanol fuel.
    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, repowering ethanol facilities with biomass, water 
utilization, and decreasing natural gas use in ethanol plants. A 
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 subcommittee commit at least 25 percent of the 
fiscal year 2009 allocation for the biomass technologies program 
towards near-term research of corn grain. A strong corn ethanol 
industry is the foundation for an expanding renewable fuels market. 
Agricultural residues, cobs, and fiber will serve as the bridge 
technologies to a second generation of renewable fuels.
    Thank you for the support and assistance you have provided to corn 
growers over the years.
                                 ______
                                 
  Prepared Statement of the Riverside County Flood Control and Water 
                         Conservation District

------------------------------------------------------------------------
                          PROJECT                              REQUEST
------------------------------------------------------------------------
MURRIETA CREEK FLOOD CONTROL PROJECT: Construction General.  $13,000,000
HEACOCK AND CACTUS CHANNELS: Special Authorization under      28,400,000
 WRDA......................................................
FUNDING FOR CERTIFICATION OF CORPS LEVEES: Inspection of       3,000,000
 Completed Works...........................................
SAN JACINTO & UPPER SANTA MARGARITA RIVER WATERSHEDS             355,000
 SPECIAL AREA MANAGEMENT PLAN (SAMP): General
 Investigations............................................
SANTA ANA RIVER--MAINSTEM: Construction General............  108,600,000
------------------------------------------------------------------------

murrieta creek flood control, environmental restoration and recreation 
                                project
    Murrieta Creek continues to pose 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 
continues to periodically wreak havoc on the communities. The winter 
storms in 1993 cost nearly $20 million in damages to the public and 
private sectors. Almost on a yearly basis, small to moderate storms 
cause localized damages at numerous locations requiring ongoing 
repairs. As the area continues to develop, the potential for damages 
(direct and indirect) continues 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, multi faceted 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 the establishment 
of about 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 7.5 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 2008. The District, therefore, respectfully requests the 
subcommittee's support of a $13 million appropriation in fiscal year 
2009 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) located adjacent to the city of Moreno Valley, Riverside County, 
California. Substantial vegetation becomes established within both 
channels and impedes the conveyance of tributary storm flows to the 
existing ultimate outlet located downstream. Storm flows overtop Cactus 
Channel and traverse MARB causing major disruption of the Base's 
operation, including the fueling of airplanes and the 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 about 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 75 percent of the benefits from 
constructing this project making the use of section 205 funds 
inappropriate. Therefore, the project will require Special Authorizing 
Language to approve and an appropriation of $28.4 million to provide 
flood protection to MARB.
    The District requests support from the subcommittee for Special 
Authorization approving the project and authorizing appropriations of 
$28.4 million 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 and/or Risk and 
Uncertainty analysis 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 subcommittee 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 $3.0 million for fiscal year 2009 under the Inspection of Completed 
Works--CA Operations and Maintenance Appropriation 3123 to accomplish 
the needed certification work.
  san jacinto and upper santa margarita river watersheds special area 
                            management plan
    In 2001 the Corps began development of a Special Area Management 
Plan (SAMP) for both the San Jacinto and Upper Santa Margarita 
Watersheds to address regional conservation and develop plans that 
protect the environment while allowing for compatible economic 
development. The final product of the SAMP will be the establishment of 
an abbreviated or expedited regulatory permitting process by the Corps 
under section 404 of the Clean Water Act to assist Federal, State and 
local agencies with their decisionmaking and permitting authority to 
protect, restore and enhance aquatic resources, while accommodating 
various types of development activities. This process will increase 
regulatory efficiency and promote predictability to the regulated 
public. The plan will also build on the protection of high value 
resource areas, as envisioned in the MSHCP. The District requests 
support from the subcommittee for a fiscal year 2009 appropriation of 
$355,000 to complete the work on the Nation's largest SAMP for the San 
Jacinto and Upper Santa Margarita Watersheds.
                       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 and San Bernardino Counties as well as the Board 
for the Riverside County Flood Control and Water Conservation District 
continue to support this critical project as stated in past resolutions 
to Congress.
    For fiscal year 2009, an appropriation of $108.6 million, is 
necessary to provide funding for Reach 9 of the Santa Ana River 
immediately downstream of Prado Dam, continue the construction of Prado 
Dam features and provide mitigation for the construction of Seven Oaks 
Dam. The District respectfully requests that the subcommittee support 
an overall $108.6 million appropriation of Federal funding for fiscal 
year 2009 for the Santa Ana River Mainstem Project.
                                 ______
                                 
      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 fiscal year 2006 
budget request. Congress did not include funding for the study in the 
final fiscal year 2006 appropriations bill.
    Fiscal Year 2008 Funding.--Congress did not appropriate any funding 
to the project in fiscal year 2008.
    Fiscal Year 2009 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--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 nine 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 2009.
    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 2008 Funding.--Congress appropriated $229,000 to the 
project in fiscal year 2008.
    Fiscal Year 2009 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $171,000, in 
addition to the $191,000 in the administration's fiscal year 2009 
budget request, for a total of $362,000 for the Upper Penitencia Creek 
Flood Protection Project to continue the Feasibility Study.
statement of support--san francisquito creek flood damage reduction and 
                     ecosystem restoration project
    Background.--The San Francisquito Creek watershed comprises 45 
square miles and 70 miles of creek system. The creek mainstem flows 
through five cities and two counties, from Searsville Lake, belonging 
to Stanford University, to the San Francisco Bay at the boundary of 
East Palo Alto and Palo Alto. Here it forms the boundary between Santa 
Clara and San Mateo counties, California and separates the cities of 
Palo Alto from East Palo Alto and Menlo Park. The upper watershed 
tributaries are within the boundaries of Portola Valley and Woodside 
townships. The creek flows through residential and commercial 
properties, a biological preserve, and Stanford University campus. It 
interfaces with regional and State transportation systems by flowing 
under two freeways and the regional commuter rail system. San 
Francisquito Creek is one of the last natural continuous riparian 
corridors on the San Francisco Peninsula and home to one of the last 
remaining viable steelhead trout runs. The riparian habitat and urban 
setting offer unique opportunities for a multi objective flood 
protection and ecosystem restoration project.
    Flooding History.--The creeks mainstem has a flooding frequency of 
approximately once in 11 years. It is estimated that over $155 million 
in damages could occur in Santa Clara and San Mateo counties from a 1-
percent flood, affecting 4,850 home and businesses. Significant areas 
of Palo Alto flooded in December 1955, inundating about 1,200 acres of 
commercial and residential property and about 70 acres of agricultural 
land. April 1958 storms caused a levee failure downstream of Highway 
101, flooding Palo Alto Airport, the city landfill, and the golf course 
up to 4 feet deep. Overflow in 1982 caused extensive damage to private 
and public property. The flood of record occurred on February 3, 1998, 
when overflow from numerous locations caused severe, record 
consequences with more than $28 million in damages. More than 1,100 
homes were flooded in Palo Alto, 500 people were evacuated in East Palo 
Alto, and the major commute and transportation artery, Highway 101, was 
closed.
    Status.--Active citizenry are anxious to avoid a repeat of February 
1998 flood. Numerous watershed based studies have been conducted by the 
Corps, the Santa Clara Valley Water District, Stanford University, and 
the San Mateo County Flood Control District. A 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 2008 Funding.--Congress did not appropriate any funding 
to the project in fiscal year 2008.
    Fiscal Year 2009 Funding Recommendation.--It is requested the 
congressional committee support an appropriation add-on of $700,000 to 
continue the Feasibility Study.
 statement of support--coyote/berryessa creek project, berryessa creek 
                            project element
    Background.--The Berryessa Creek Watershed is located in northeast 
Santa Clara County, California, near the southern end of the San 
Francisco Bay. A major tributary of Coyote Creek, Berryessa Creek 
drains 22 square miles in the city of Milpitas and a portion of San 
Jose.
    On average, Berryessa Creek floods once every 4 years. The most 
recent flood in 1998 resulted in significant damage to homes and 
automobiles. The proposed project on Berryessa Creek, from Calaveras 
Boulevard to upstream of Old Piedmont Road, will protect portions of 
the cities of San Jose and Milpitas. The flood plain is largely 
urbanized with a mix of residential and commercial development. Based 
on the U.S. Army Corps of Engineers (Corps) 2005 report, a 1-percent or 
100-year flood could potentially result in damages exceeding $179 
million. Benefit-to-cost ratios for the six 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 $6.5 million, and should be 
completed in 2009.
    Fiscal Year 2008 Funding.--Congress appropriated $1.147 million to 
the project in fiscal year 2008.
    Fiscal Year 2009 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 $650,000, in 
addition to the $950,000 in the administration's fiscal year 2009 
budget request, for a total of $1.6 million for the Berryessa Creek 
Flood Protection Project element of the Coyote/Berryessa Creek Project.
     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 2008 Funding.--Congress appropriated $785,000 to the 
project in fiscal year 2008.
    Fiscal Year 2009 Funding Request.--It is requested that the 
congressional committee support an appropriation add-on of $2.8 million 
to continue the Feasibility Study to evaluate integrated flood 
protection and environmental restoration.
               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, 2002, 
and 2008. The 1997, 1998, and 2002 floods damaged many homes, 
businesses, and a recreational vehicle park located in areas of Morgan 
Hill and San Martin. These are areas where flood protection is 
proposed. Overall, the proposed project will protect the floodplain 
from a 1 percent flood affecting more than 1,100 residential buildings, 
500 commercial buildings, and 1,300 acres of agricultural land.
    Project Synopsis.--Under authority of the Watershed Protection and 
Flood Prevention Act (Public Law 566), the Natural Resources 
Conservation Service completed an economic feasibility study in 1982 
for constructing flood damage reduction facilities on Llagas Creek. The 
Natural Resources Conservation Service completed construction of the 
last segment of the channel for Lower Llagas Creek in 1994, providing 
protection to the project area in Gilroy. The U.S. Army Corps of 
Engineers (Corps) is currently updating the 1982 environmental 
assessment work and the engineering design for the project areas in 
Morgan Hill and San Martin. The engineering design is being updated to 
protect and improve creek water quality and to preserve and enhance the 
creek's habitat, fish, and wildlife while satisfying current 
environmental and regulatory requirement. Significant issues include 
the presence of additional endangered species including 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.
    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. In November 
2007, Congress passed the Water Resources Development Act of 2007 
(Public Law 110-114, section 3022) revising the estimated total project 
cost for the remaining reaches of the project to $105 million with a 
Federal share of $65 million and a local share of $40 million. The bill 
language also directs the Corps to complete the construction of the 
project.
    Fiscal Year 2008 Funding.--Congress did not appropriate any funding 
to the project in fiscal year 2008.
    Fiscal Year 2009 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 $1.8 million 
in fiscal year 2009 for planning, design, and environmental updates for 
the Llagas 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. The 
Energy and Water Development Appropriations Act of 2002 was signed into 
law on November 12, 2001. This authorized the modified Guadalupe River 
Project at a total cost of $226.8 million. Subsequent to the 
authorization, the project cost has been raised to $251 million. 
Construction of the last phase of flood protection was completed 
December 2004 and a completion celebration held in January 2005. The 
remaining construction consists of railroad bridge replacements and 
mitigation plantings. The overall construction of the project including 
the river park and the recreation elements is scheduled for completion 
in 2008.
    Fiscal Year 2008 Funding.--Congress appropriated $1.783 million for 
the project in fiscal year 2008.
    Fiscal Year 2009 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $10 million 
to continue construction of the final phase of the Guadalupe River 
Flood Protection Project.
          statement of support--upper guadalupe river project
    Background.--The Guadalupe River is one of two major waterways 
flowing through a highly urbanized area of Santa Clara County, 
California, the heart of Silicon Valley. Historically, the river has 
flooded the central district and southern areas of San Jose. According 
to the 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 the 
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 and was completed in 1998. Preconstruction Engineering 
and Design commenced in 1999 and currently several reaches are ready 
for construction.
    The Upper Guadalupe River Flood Protection Project was first 
authorized for Federal construction in the Water Resources Development 
Act of 1999 (section 101). This authorization was for a project cost of 
$140 million with an unfavorable cost-sharing formula. In November 
2007, Congress passed the Water Resources Development Act of 2007 
(Public Law 110-114, section 3037) for an estimated revised project 
cost of $256 million with a Federal share of $136.7 million and local 
share of $119.3 million.
    The project cooperation agreement was signed on July 21, 2007, and 
construction is planned to commence in July 2008.
    Fiscal Year 2008 Funding.--Congress appropriated $439,000 to the 
project in the fiscal year 2008.
    Fiscal Year 2009 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $12.5 
million in fiscal year 2009 to continue construction on the Upper 
Guadalupe River Flood Protection Project.
                                 ______
                                 
     Prepared Statement of the City of Los Angeles Board of Harbor 
                             Commissioners
    Chairman Dorgan and members of the subcommittee, thank you for the 
opportunity to submit testimony in support of full funding of the 
Channel Deepening Project at the Port of Los Angeles/Los Angeles 
Harbor, the largest and busiest container seaport in the United States 
and tenth largest in the world. Our testimony speaks in support of an 
fiscal year 2009 appropriation of $1.33 million for the final Federal 
share that will complete construction of the Channel Deepening Project. 
Proposed funding for the Channel Deepening Project was not included in 
the President's fiscal year 2009 budget. Construction of our Federal 
deep-draft navigation channels and ship berths is approximately 85 
percent complete. Your full appropriation of the requested $1.33 
million will enable the Army Corps of Engineers to finish construction 
of the remainder of the Project; the Corps has stated that it has the 
capability to fully obligate and spend this amount in fiscal year 2009. 
Dredging for the project began in early 2003 with construction 
originally scheduled for completion in 2006.
    The Port of Los Angeles is America's busiest seaport with record 
volumes of cargo moving through the 7,500-acre harbor. Its strong 
performance is attributed to a solid U.S. economy and the recovering 
Asian economies with a renewed manufacturing demand for American 
exports. The Port itself is a major reason for the remarkable cargo 
volumes. Its world-class facilities and infrastructure maximize the 
``one-stop shopping'' concept of cargo transportation and delivery 
favored by most shipping lines. Ocean carriers can send the majority of 
their west coast-bound cargo to Los Angeles with full confidence in the 
Port's modern cargo terminals and efficient train/truck intermodal 
network. The Channel Deepening Project is a critical Federal navigation 
improvement project, and is the underpinning of the ongoing confidence 
that shipping lines have in the Port of Los Angeles.
    In the fiscal year 2006 Energy and Water Development Appropriations 
Act, Congress authorized an increase in the total project cost to $222 
million from $194 million, representing a Federal share of $60.7 
million and a local share of $161.3 million in accordance with the Army 
Corps of Engineers' revision. This revision accounts for credits for 
in-kind services provided by the Port and other required project 
modifications, including adjustments for construction contract changes, 
adjustments to the disposal costs for the dredged material, and project 
administration costs. The cost-share amounts for the Channel Deepening 
Project is currently under review, as well as a Supplemental EIS/EIR 
that will evaluate and determine the best alternative for increased 
disposal capacity. Under consideration for placement of the remaining 
dredge material are the formation of additional lands for future Port 
development and environmental enhancements through the creation of 
improved submerged marine habitats. Upon completion of both reviews, 
the new cost-sharing amounts and the additional costs for disposal at 
the recommended site(s) will be established. The need for a 
Supplemental EIS/EIR has moved project completion to fiscal year 2009.
                        port navigation demands
    The evolving international shipping industry prompted a 
collaborative effort by the Port of Los Angeles and the Corps of 
Engineers to implement the Channel Deepening Project in the early 
1980s. With this project, the Port will deepen its main Federal channel 
and tributary channels by 8 feet, from -45 to -53 feet Mean Lower Low 
Water (MLLW), to accommodate the industry's shift to larger container 
vessels. The first of these deeper-draft ships began calling at the 
Port of Los Angeles in August of 2004, carrying 8,000 20-foot 
equivalent units of containers (TEUs) and drafting at -50 feet. 
Carriers are continuing to order these larger, post-Panamax vessels 
that range in size from 7,500 TEUs to 10,000 TEUs. These vessels are 
now in service in the international shipping trade and will continue to 
be delivered to shipping lines at a steady pace for the foreseeable 
future, which means that ports unable to accommodate the bigger ships 
will be left out of the surge in trade if they are unable to 
accommodate these vessels.
    As we have testified before, cargo throughput for the San Pedro Bay 
port complex, comprising the Ports of Los Angels and Long Beach--and 
the Port of Los Angeles in particular--has a tremendous impact on the 
U.S. economy. We at the Port of Los Angeles cannot overemphasize this 
fact. The ability of the Port to meet the spiraling demands of the 
steady growth in international trade is dependent upon the speedy 
construction of sufficiently deep navigation channels to accommodate 
the new containerships. These new ships provide greater efficiencies in 
cargo transportation, carrying one-third more cargo than most of the 
current fleet, and making more product inventory of imported goods 
available to American consumers at lower prices. In addition, exports 
from the United States have become more competitive in foreign markets. 
However, for American seaports to keep up, they must immediately make 
the necessary infrastructure improvements that will enable them to 
participate in this rapidly changing global trading arena.
    Mr. Chairman, as we have said before, these state-of-the-art 
container ships represent the new competitive requirements for 
international container shipping efficiencies in the 21st century, as 
evidenced by the increased volume of international commerce. As such, 
we ask your subcommittee to fully appropriate the $1.33 million for 
fiscal year 2009 that will enable the Army Corps of Engineers to 
complete construction of the Channel Deepening Project in fiscal year 
2009.
                           economic benefits
    The Port of Los Angeles is one of the world's largest trade 
gateways, and the scope of its economic contributions to the Southern 
California regional economy--and to the U.S. economy--is critically 
important. Currently, nearly 45 percent of containerized cargo entering 
the United States is handled at the San Pedro Bay port complex with the 
Port of Los Angeles, alone, handling a record 8.5 million TEUs just 
last year. This represents significant continued growth for any 
American seaport. The national economics of trade through the Port of 
Los Angeles is significant, touching every Congressional district in 
the country. Some 190 million metric revenue tons of cargo, valued at 
more than $238 billion, were handled at the Port in 2007, with $223 
billion in trade benefiting the national economy based on the $5.1 
billion it generated in State and local tax revenues.
    Locally, the Port is connected, directly or indirectly, with tens 
of billions of dollars in industry sales each year in Southern 
California. Those sales translate into hundreds of thousands of local 
jobs representing billions in wages, salaries, and tax revenues. 
Regional benefits from Port of Los Angeles trade include:
  --1.1 million jobs in California;
  --3.3 million permanent, well-paying jobs in the United States;
  --$89.2 billion in California trade value;
  --$223 billion in U.S. trade value;
  --$5.1 billion in State tax revenue; and
  --$21.5 billion in Federal tax revenue.
    This economic impact is a direct result of international waterborne 
trade flowing through the Port of Los Angeles. Clearly, the Channel 
Deepening Project is a commercial, Federal navigation project of 
tremendous national economic significance, and one that will yield 
exponential economic and environmental returns to the United States 
annually. Furthermore, the U.S. Customs Service reports that more than 
$12 million a day in customs duties are taken from the Port. The Los 
Angeles Customs District leads the Nation in total duties collected for 
maritime activities, collecting more than $6 billion in 2005 alone. The 
return on the Federal investment at the Port of Los Angeles is real and 
quantifiable, and we expect it to continue to surpass the cost-benefit 
ratio--as determined by the Army Corps of Engineers' project 
Feasibility Study--many times over.
    In closing, Federal investment in the Channel Deepening Project 
will ensure that the Port of Los Angeles, the Nation's busiest 
container seaport, remains at the forefront of the new international 
trade network well into this century. The Channel Deepening Project 
marks the second phase of the 2020 Infrastructure Development Plan that 
began with the Pier 400 Deep-Draft Navigation and Landfill Project. The 
Port of Los Angeles is moving forward with the 2020 Plan designed to 
meet the extraordinary infrastructure demands placed on it in the face 
of the continued high volume of international trade.
    Chairman Dorgan, the Port of Los Angeles respectfully urges your 
subcommittee to appropriate the full $1.33 million request for fiscal 
year 2009 that will enable the Army Corps of Engineers to complete 
construction of the Channel Deepening Project in fiscal year 2009.
    Thank you, Mr. Chairman, for the opportunity to submit this 
testimony for continued Congressional support of the Channel Deepening 
Project at the Port of Los Angeles. The Port has long valued the 
support of your subcommittee and its appreciation of the role the Port 
of Los Angeles plays in this country's economic strength and vitality.



                                 ______
                                 

                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

   Prepared Statement of the Garrison Diversion Conservancy District
    Mr. Chairman, members of the subcommittee, my name is Dave Koland; 
I serve as the general manager of the Garrison Diversion Conservancy 
District. This is a request for a $102 million appropriation for the 
Pick-Sloan Missouri Basin Program/Garrison Diversion Unit, Bureau of 
Reclamation, Water and Related Resources, Department of the Interior. 
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.
    The President's fiscal year 2009 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 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.
                      north dakota's success story
    Rural water systems are being constructed using a unique blend of 
local expertise, State financing, rural development loans and 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 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 bill on a rural water system for 6,000 gallons 
of water is currently $59.21. 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.
               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 2009 is $22.11 
million. This year, Garrison Diversion Conservancy District is asking 
Congress to appropriate a total of $102 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 $18 million annually. 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 category of the budget is the MR&I program. This 
consists of both Indian and non-Indian funding. The Dakota Water 
Resources Act of 2000 authorized an additional $200 million for each of 
these MR&I 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 and have worked with the tribes toward this goal.
    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; one 
that is considerably larger at $150 million is the Northwest Area Water 
Supply Project (NAWS). The first phase of that project is under 
construction. 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.
    The third category of the budget is the Red River Valley Water 
Supply Project (RRVWSP) construction phase. The Dakota Water Resources 
Act of 2000 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 could be 
expected in approximately 2 to 3 years. This will create a 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 2011.
    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 tribal 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.
    It began with a $67 million budget in fiscal year 2008 and needs to 
gradually build to about $200 million when the RRVWSP construction 
could be in full swing (fiscal year 2011). Mr. Chairman, this is why we 
have supported a budget resolution that recognizes that a robust 
increase in the budget allocation is needed for the Bureau of 
Reclamation, Water and Related Resources Account in fiscal year 2009.
    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 $102 million appropriation fiscal year 2009
    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 18 years of study and diplomatic delay. Construction costs are 
estimated to be $150 million.
    Indian MR&I programs on four reservations are also under 
construction. Tribal and State leaders have agreed to split the MR&I 
allocation on a 50/50 basis.
    The SWC has advanced the MR&I program $21 million to allow 
construction to continue on several critical projects. One project is 
the $85 million South Central Regional Water District system currently 
under construction.

                        [In millions of dollars]
------------------------------------------------------------------------
                                                                  Amount
------------------------------------------------------------------------
OPERATION AND MAINTENANCE OF INDIAN MR&I SYSTEMS AND JAMESTOWN      5.61
 DAM (Provides for the O&M of the Tribal water systems and the
 Jamestown Dam.)...............................................
BREAKDOWN OF $96.39 MILLION CONSTRUCTION REQUEST:
    Operation and Maintenance of existing GDU system (Provides      5.24
     for the O&M of the Snake Creek Pumping Plant, McClusky and
     New Rockford Canals.).....................................
    Wildlife Mitigation & Natural Resources Trust (Provides for     3.96
     O&M of Arrowwood, Audubon, Kraft Slough, Lonetree and
     Canalside Lands.).........................................
    Red River Valley Water Supply (Provides for the work on the     0.22
     RRVWSP.)..................................................
    Indian and non-Indian MR&I (Provides funding for the State     84.00
     and tribal MR&I programs. Funding is split  50/50 between
     the two programs.)........................................
    Oakes Test Area and Miscellaneous (Provides for the O&M of      1.09
     the Oakes Test Area, Recreation Facilities, work for 28K
     unidentified acres.)......................................
    Standing Rock Irrigation (Provides for development on           1.88
     Standing Rock Reservation.)...............................
                                                                --------
      Total for Construction...................................    96.39
          Grand Total..........................................   102.00
------------------------------------------------------------------------

                                 ______
                                 
     Prepared Statement of the Irrigation and Electrical Districts 
                         Association of Arizona
    The Irrigation and Electrical Districts Association of Arizona 
(IEDA) is pleased to present written testimony regarding the fiscal 
year 2009 proposed budgets for the Bureau of Reclamation (Reclamation) 
and the Western Area Power Administration (Western).
    IEDA is an Arizona nonprofit association whose 25 members and 
associate members receive water from the Colorado River directly or 
through the facilities of the Central Arizona Project (CAP) and 
purchase hydropower from Federal facilities on the Colorado River 
either directly from Western or, in the case of the Boulder Canyon 
Project, from the Arizona Power Authority, the State agency that 
markets Arizona's share of power from Hoover Dam. IEDA was founded in 
1962 and continues to represent water and power interests of Arizona 
political subdivisions and their consumers.
                         bureau of reclamation
    IEDA has reviewed the testimony submitted by Susan Bitter Smith, 
the President of the Board of Directors of the Central Arizona Water 
Conservation District (CAWCD), the Arizona three-county special 
district charged with operation of the CAP. We support that testimony 
and urge the subcommittee to actively consider the suggestions made by 
President Smith. We are especially mindful that the Yuma Desalting 
Plant continues to remain underfunded and therefore not able to conduct 
the water conservation, water quality and water supply mission for 
which it was designed. The Yuma Desalting Plant is an integral element 
of the problem solving mechanisms being put in place for the Colorado 
River and especially the Lower Colorado River. Problem solving on the 
Lower Colorado River will be substantially impaired as long as the 
plant remains idle.
    We also wish to call to the subcommittee's attention the issue 
concerning increased security costs at Reclamation facilities post-9/
11. Legislation is pending before Congress addressing that issue and a 
budget approved for Reclamation for fiscal year 2009 should reflect the 
possibility that this legislation will become law and affect 
Reclamation operations in the next fiscal year.
                   western area power administration
    IEDA has reviewed the testimony submitted by Western's 
administrator, Tim Meeks. We note that both this subcommittee and the 
Senate Energy and Natural Resources Committee Water and Power 
Subcommittee have a concern, as did Administrator Meeks, over the $74 
million shortfall in construction funding proposed for fiscal year 
2009. We believe this shortfall is irresponsible. Western has over 
15,000 miles of transmission line for which it is responsible. It has 
on the order of 14,000 megawatts of generation being considered for 
construction that would depend on that Federal network. The existing 
transmission facilities cannot handle all of these proposals yet the 
region is projected, by all utilities operating in the region, to be 
short of available generation in the 10-year planning window utilities, 
including Western, use.
    Moreover, the $1,881,000 proposed for appropriation in this 
category cannot come even close to keeping existing transmission 
construction going. Repairs and replacements will have to be postponed 
and, considerable hardships to local utilities that depend on the 
Federal network are bound to occur. In Western's Desert Southwest 
Region, our region, over $20 million in work necessary just to maintain 
system reliability will have to be postponed.
    We would be the first to support additional customer financing of 
Federal facilities and expenses through the Contributed Funds Act 
authority under Reclamation law that is available to Western. However, 
programs utilizing non-Federal capital formation require years to 
develop. One such program being proposed by the Arizona Power Authority 
in a partnership with Western has been stuck in bureaucratic red tape 
at the Department of Energy for over 2 years. There is no way that 
Western customers can develop contracts, have them reviewed, gain 
approval of these contracts from Western and their governing bodies, 
find financing on Wall Street and have monies available for the next 
fiscal year. It is just impossible.
    There are impediments to using existing Federal laws in 
facilitating non-Federal financing of Federal facilities and repairs to 
Federal facilities and Congress should examine them. But dropping this 
bomb on us 9 months before the beginning of the fiscal year, when there 
just is not the time necessary to develop alternative capital 
formation, is bad public policy and should not be countenanced. We urge 
the subcommittee to restore a reasonable amount of construction funding 
to Western so it can continue to do its job in keeping its transmission 
systems functioning and completing the tasks that it has in the 
pipeline that are critical to its customers throughout the West.
                               conclusion
    Thank you for the opportunity to submit this written testimony. If 
we can provide any additional information or be of any other service to 
the subcommittee, please do not hesitate to get in touch with us.
                                 ______
                                 
Prepared Statement of the Oglala Sioux Rural Water Supply System, West 
 River/Lyman Jones Rural Water System, Rosebud Rural Water System, and 
                   the Lower Brule Rural Water System
                           mni wiconi project
Fiscal Year 2009 Request
    The Mni Wiconi Project beneficiaries respectfully request 
appropriations of $38.378 million for construction ($28.196 million) 
and operation and maintenance (OMR) activities ($10.182 million) for 
fiscal year 2009:

                        [In millions of dollars]
------------------------------------------------------------------------
                                                            Fiscal Year
                                                           2009 Request
------------------------------------------------------------------------
Construction............................................          28.196
OMR.....................................................          10.182
                                                         ---------------
      Total.............................................          38.378
------------------------------------------------------------------------

Construction Funds
    Construction funds would be utilized as follows:

------------------------------------------------------------------------
                      Project Area                            Amount
------------------------------------------------------------------------
Oglala Sioux Rural Water Supply System:
    Core................................................      $1,115,000
    Distribution........................................      14,775,000
West River/Lyman-Jones RWS..............................       5,133,000
Rosebud RWS.............................................       7,173,000
                                                         ---------------
      Total.............................................      28,196,000
------------------------------------------------------------------------

    As shown in the table below, the project will be 81 percent 
complete at the end of fiscal year 2008. Construction funds remaining 
to be spent after fiscal year 2008 will total $87.691 million within 
the current authorization (in October 2007 dollars). Extension of the 
project authorization from fiscal year 2008 through fiscal year 2013 
was accomplished by Public Law 110-161. Additional administrative and 
overhead costs of extending the project, additional construction costs, 
and accelerated inflation over the next 5 years are expected to 
increase project costs to $137.167 million after fiscal year 2008.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total Federal Construction Funding (Oct. 2007 dollars)..    $451,707,000
Estimated Federal Spent Through Fiscal Year 2008........    $364,016,000
Percent Spent through Fiscal Year 2008..................           80.59
Amount Remaining After 2008:
    Total Authorized (Oct. 2007 dollars)................     $87,691,000
    Overhead Adjustment for Extension to Fiscal Year        $109,851,000
     2013 and Other.....................................
    Adjustment for Annual Inflation.....................    $137,167,000
Completion Fiscal Year (Statutory Fiscal Year 2013;                 2013
 Public Law 110-161)....................................
Years to Complete.......................................               5
Average Annual Required for Finish......................     $27,433,000
------------------------------------------------------------------------

    Cost indexing over the last 5 years has averaged 7.89 percent for 
pipelines. Pipelines are the principal components yet to be completed 
(see chart below). Assuming an average 7.89 percent inflation in 
construction costs in the remaining 5 years to complete the project, 
average funding of $27.433 million is required. The President's budget 
of $16.24 million is grossly inadequate, departs significantly from 
recent budgets and threatens an undetermined delay in completing the 
project by 2013, the new date established by Congress in Public Law 
110-161 last year.



Oglala Sioux Rural Water Supply System (OSRWSS)
            Core System
    The funding request will provide $1,115,000 for the OSRWSS core 
system. These funds will complete the project's transmission system 
that serves all sub-projects managed by separate entities, including 
the Pine Ridge Indian Reservation, Rosebud Indian Reservation, Lower 
Brule Indian Reservation and the 8-county service area of West River/
Lyman-Jones. Funds will be used to connect the northern portion with 
the southern portion of the transmission system and permit water 
delivery in either direction to accommodate a shutdown in the western 
part of the water transmission system.
    The completion of the OSRWSS core system is an historic milestone 
and permits greater focus in the remaining years of the project 
authorization on completion of the distribution systems.
            Distribution System
    The Pine Ridge Indian Reservation has not received water from the 
OSRWSS core system prior to fiscal year 2008. Over 40 percent of the 
project's population resides on the Pine Ridge Indian Reservation. The 
Reservation public has awaited delivery of project water from the 
Missouri River since 1994. Project funds in fiscal year 2009 will 
permit the completion of the on-Reservation transmission system between 
the connection with the OSRWSS core system (see discussion above) and 
the community of Kyle in the central portion of the Pine Ridge Indian 
Reservation. Delivery of Missouri River water at this location will 
allow distribution to OSRWSS project pipelines built earlier that serve 
the communities of Kyle, Sharps Corner, Rocky Ford, Red Shirt, 
Manderson, Evergreen and Porcupine and the large number of rural homes 
between the communities along these pipelines.
    The fiscal year 2009 request also funds additional on-Reservation 
transmission system that will advance the delivery of Missouri River 
water toward the largest community on the Reservation, Pine Ridge 
Village. Connection to Pine Ridge Village is scheduled in fiscal year 
2010. The request will connect the transmission system from Porcupine 
Butte to the community of Wounded Knee and serve rural homes south of 
Manderson. The request will fund an additional transmission system 
beyond Pine Ridge Village toward the community of Oglala and will 
connect with OSRWSS pipelines built in the early years of the project.
    As set forth above, the focus on the Pine Ridge Indian Reservation 
in fiscal year 2009 is to construct the transmission system that serves 
as the ``backbone'' of the project on the Reservation. This 
distribution system is now reliant upon groundwater exclusively. 
Groundwater will be retained where adequate and safe. Missouri River 
water will serve as a backup to groundwater supplies and as the sole 
supply in areas where groundwater is deficient.
    The Oglala Sioux Tribe is supportive of the funding request of 
other sponsors.
West River/Lyman-Jones Rural Water System
    Priority projects for the WR/LJ system include the Powell Area 
Project, service to new members within the system and distribution 
system storage. The Powell area, from Midland to Philip and from the 
Bad River to the Elbon service area, continues to be impacted by 
drought conditions that have persisted since 2001. Powell area users 
have patiently waited as the OSRWSS North Core pipeline was constructed 
through their area. With its completion their project area has a supply 
source from which distribution lines can be constructed.
    Projects in the Reliance area and Eastern Mellette County were 
constructed with emphasis on pipeline. Needed storage structures were 
deferred until additional funds were made available. Water use has 
increased each year since completion of these projects. Providing 
storage within those service areas increases system capability to meet 
peak demands and improves system reliability.
    The WR/LJ system receives new requests for service in completed 
project areas as stock ponds and wells go dry and as people move into 
those areas. Further additions are required as existing members request 
added connections to serve livestock in other locations. These 
additions are a demonstration of the need for this important project.
Rosebud Rural Water System (Sicangu Mni Wiconi)
    In fiscal year 2009 the Rosebud Sioux Tribe will complete the 
necessary infrastructure to supply surface water to portions of Todd 
County, which will reduce the need for summertime water restrictions 
that have resulted from overextending the interim groundwater supply. 
Work began on this series of projects in the summer of 2007 and the 
primary pipeline and pump stations will be completed in the summer of 
2008. The receiving reservoir at the end of this pipeline is partially 
funded with fiscal year 2008 funds as is the large diameter pipeline 
that will connect the town of Mission and eastern Todd County to the 
surface water supply. However, both of these projects require fiscal 
year 2009 funding for completion.
    Two additional projects are also scheduled for 2009. Phase I of the 
Old Rosebud project will replace corroded iron pipelines in the older 
portion of the Rosebud community with modern plastic pipe. This project 
is designed and ready to bid; however, to reduce costs and improve 
effectiveness, it is being bid and managed in conjunction with a Bureau 
of Indian Affairs street replacement project and an Indian Health 
Service sewer replacement project. Rural Development is also assisting 
with funding for the sewer work. By completing water, sewer and street 
improvements at the same time, the cost of excavation and reclamation 
for the water portion of the work is significantly reduced. Upgrading 
water and sewer lines concurrently with the paving project also 
prolongs the useful life of the new streets because the new pavement 
will not need to be disturbed (and then patched) to repair water main 
breaks.
    The other major project scheduled for 2009 will serve the rapidly 
growing Sicangu Village area. The existing wells and aquifer in this 
area are not capable of supplying the growing demands. A pipeline will 
connect the community to the existing well field several miles south of 
the town of Mission. Adequate capacity will be available in that well 
field after the Mission area is connected to the surface water supply.
    Other projects include a new well for the well field near St. 
Francis and the ongoing service line and connections installed by the 
tribal construction crew. The new well near St. Francis is needed 
because two of the existing wells currently run 24 hours a day during 
periods of peak demand in summer months. The third existing well does 
not have sufficient capacity to allow either of the two primary wells 
to recover. The St. Francis well field also supplies the Spring Creek 
and Grass Mountain areas.
Operation, Maintenance and Replacement Budget
    The sponsors have and will continue to work with Reclamation to 
ensure that their budgets are adequate to properly operate, maintain 
and replace (OMR) respective portions of the core and distribution 
systems. The sponsors will also continue to manage OMR expenses in a 
manner ensuring that the limited funds can best be balanced between 
construction and OMR. 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 administration's 
request for fiscal year 2009 is $9.374 million less than the 
administration's fiscal year 2008 request of $9.526 million despite the 
acknowledged increasing need for OMR funds.
    The supporting documentation for the Great Plains Region budget 
request prioritizes the OMR of the Tribal features of Mni Wiconi. 
However, it should be noted that the tribal features of Mni Wiconi do 
not participate in Reclamation's Replacement, Additions and 
Extraordinary (RAX) program for which $9.8 million has been requested 
by Reclamation for their non-tribal projects in the Great Plains 
Region. The tribal systems also have RAX needs.
    The Mni Wiconi Project tribal beneficiaries (as listed below) 
respectfully request appropriations for OMR in fiscal year 2009 in the 
amount of $10,182,000:

------------------------------------------------------------------------
                      Project Area                          OMR Amount
------------------------------------------------------------------------
Oglala Sioux Rural Water Supply System:
    Core................................................      $2,376,000
    Distribution........................................       2,808,000
Lower Brule.............................................       1,485,000
Rosebud RWS.............................................       2,121,000
Reclamation.............................................       1,392,000
                                                         ---------------
      Total.............................................      10,182,000
------------------------------------------------------------------------

                                 ______
                                 

                          DEPARTMENT OF ENERGY

    Prepared Statement of the National Congress of American Indians
    On behalf of the National Congress of American Indians, we are 
pleased to present testimony on the administration's fiscal year 2009 
budget request for transportation energy and water development 
programs. We look forward to working with this subcommittee to ensure 
that the critical programs and initiatives are funded at levels that 
will ensure their long term effectiveness.
                  tribal energy access and production
    The lack of access to energy resources and to participation in the 
energy market is still a persistent problem among Indian communities. 
According to the U.S. Census Bureau, 14.2 percent of reservation homes 
lack access to electricity, compared to the national average of less 
than 2 percent.\1\ When provided with innovative energy solutions, 
tribes are embracing them. For example, 350 Navajo Nation members 
recently began renting renewable energy units, which provide them with 
energy for the first time. Using wind technologies, members can power 
their televisions and a few lights. These improvements, while humble, 
can drastically improve the quality of life for Indian people.
---------------------------------------------------------------------------
    \1\ Energy Information Administration, Energy Use and Renewable 
Energy Development Potential on Indian Lands, 2000.
---------------------------------------------------------------------------
                     tribal water access and rights
    Water resources are, perhaps, the single most important natural 
resource that is at risk for tribes. Climate change and population 
growth forecasts place a large burden on rivers and reservoirs, 
especially in the west, and tribes play a key role in future management 
of these bodies of water. Tribes usually have priority water rights, 
but typically have not exercised their full rights. As water demands 
grow, more tribes will need to exercise their rights and work on 
developing water infrastructure for their communities. The current 
posture of requiring offsets in other Department of Interior programs 
to fund water settlements and projects is potentially harmful to tribal 
programs, and other sources must be utilized.
Specific Tribal Appropriations Requests; Energy & Water--Department of 
        Energy
    Title V--Indian Tribal Energy Development and Self-Determination 
Act Grants.--The Energy Policy Act of 2005 (Public Law 109-058) 
included Title V--Indian Tribal Energy Development and Self-
Determination Act of 2005, which authorized a competitive grant in the 
amount of $20 million from fiscal year 2006 to 2016 to assist Indian 
tribes in energy education, research and development, planning and 
management needs; and to provide a loan guarantee program to any Indian 
tribes for energy development. These initiatives have yet to be funded 
and again are not included in the President's request budget for the 
Department of Energy's fiscal year 2009.
  --NCAI recommends that the title V grants to Indian tribes be fully 
        funded in the amount of $20 million.
    Weatherization Assistance Programs.--The President proposed a 
significant decrease in funding for Indian programs in the Department 
of Energy. The administration proposes the elimination of the 
Weatherization Assistance Programs that provides weatherization 
assistance grants to Indian tribes for low-income and rural homes, and 
the training and technical assistance.
  --NCAI recommends that $22.7 million be made available in fiscal year 
        2009 for the Weatherization Assistance Programs, the same 
        amount appropriated for fiscal year 2008.
    Office of Indian Energy Policy and Programs.--The President 
requested a substantial decrease for tribal energy activities for 
fiscal year 2009, which would be funded at $1 million compared with 
$5.9 million in fiscal year 2008. The President also proposes no 
resources for the Office of Indian Energy Policy and Programs, which 
was authorized under the Energy Policy Act of 2005 but has never been 
funded. The Energy Policy Act of 2005 authorized this office to 
implement tribal energy initiatives and funding opportunities for 
Indian energy development and tribes have been fighting for even the 
most basic funding each year.
  --NCAI recommends that level funding of $5.9 million be made 
        available for fiscal year 2009 for the Office of Indian Energy 
        Policy and Programs (OIEPP).
    Renewable Energy Production Incentives.--Another program proposed 
for termination in the fiscal year 2009 President's budget is the 
Renewable Energy Production Incentive (REPI), which provides financial 
incentive payments to publicly owned utilities, not-for-profit electric 
cooperatives, and tribal governments and native corporations that own 
and operate qualifying facilities generating renewable energy. The 
justification for the elimination of REPI by the administration is the 
importance of this program has diminished over time due to reduced cost 
and competitiveness of renewable energy technology.
  --NCAI recommends that $8.5 million be made available for the 
        renewable energy and conservation programs and activities for 
        fiscal year 2009.
Bureau of Reclamation (Department of Interior)
    General--Tribal Water Projects and Settlements.--The Bureau of 
Reclamation (BOR) has a significant role in shaping the future of 
tribal water resources. Water rights settlements are often funded 
through BOR, as well as negotiated and implemented. However, the 
process is cumbersome and very tenuous as funding is often difficult to 
obtain. There are nearly 25 settlements nearing implementation that 
will need funding, and the current position of pushing it further down 
the timeline only increases the price. The budget committee needs to 
raise the ceiling.
  --NCAI recommends that the Bureau of Reclamation prioritize funds for 
        Indian water projects and water rights settlements.
    Reclamation Fund.--Tribes passed a resolution at the 2007 Annual 
NCAI Conference (No. DEN 07-069) that identifies the Reclamation Fund 
(Fund) as an appropriate vehicle for funding tribal water rights 
settlements. The Fund could be utilized as the primary source for 
funding settlements, which is desperately needed. The Fund was 
established in 1902 to fund water projects in the 17 western States, 
including on tribal lands. The Fund continues to have a growing 
balance, over $7 billion estimated in fiscal year 2007, with mineral 
development providing most of the increase.
  --NCAI recommends that the BOR Reclamation Fund be utilized as a 
        substantial source for tribal water projects and settlements.
Army Corps of Engineers (Department of Defense)
    Army Corps of Engineer projects can provide substantial 
opportunities for water infrastructure development in Indian Country. 
Specifically, the Water Resources Development Act authorizes municipal 
water supply and wastewater treatment projects. These projects are 
crucial for tribes, and funding needs to be increased to tribal 
projects. In the earlier part of this century when Congress invested 
heavily in Corps projects and WPA projects, Indian Country was often 
overlooked. Therefore, our infrastructure, particularly water 
infrastructure has usually never had even the most basic investment.
  --NCAI recommends a minimum of 10 percent of the civil works projects 
        that provide environmental infrastructure be set aside for 
        tribal specific projects.
                                 ______
                                 
  Prepared Statement of the Consortium for Fossil Fuel Science (CFFS)
production of transportation fuels from coal plus biomass with reduced 
                        carbon dioxide emissions
    Chairman Dorgan and members of the subcommittee, we request 
$2,000,000 in funding for a congressionally directed project in the 
budget of the Department of Energy in the Fuels Program of the Office 
of Fossil Energy, to continue a program of research to produce 
transportation fuels from coal plus biomass. This program, which was 
recently initiated with a $750,000 contract from the U.S. Department of 
Energy in fiscal year 2008, will focus on the conversion of coal plus 
waste biomass into ultra-clean transportation fuels by gasification and 
Fischer-Tropsch synthesis. This approach has the potential to minimize 
the amount of carbon dioxide emitted by the fuel conversion process to 
less than that produced by the production of similar transportation 
fuels from petroleum. Additionally, combustion of the biomass component 
of the carbon during fuel utilization in vehicles or planes will be 
carbon dioxide neutral.
Overview
    Traditional petroleum-derived fuels will continue to dominate 
transportation by vehicles and planes for at least the next 20 years. 
The United States currently imports over 10 million barrels of oil per 
day at a cost exceeding $470 billion/year, most of it from unstable 
regions of the world. Not only is this the biggest item in the U.S. 
trade deficit, it is also a serious threat to our national security. 
Increasing global demand, coupled with an expected peaking in the world 
oil supply, will undoubtedly cause shortages and markedly increased 
prices, possibly deepening the current economic recession and leading 
to more severe recessions in the future.
    It is therefore essential that we begin to produce transportation 
fuels from our own national resources, particularly our most abundant 
energy resource, coal. It is equally essential, however, that we do so 
without harming the environment. The Consortium for Fossil Fuel Science 
(CFFS), a research center of the University of Kentucky, has formed an 
integrated team of fossil fuel scientists from five universities 
(University of Kentucky, West Virginia University, Auburn University, 
University of Utah, and University of Pittsburgh) 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 dioxide emissions can be minimized through such research.
    The CFFS has 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:
  --Catalysis of coal conversion reactions.
  --C1 chemistry processes, including Fischer-Tropsch (F-T) synthesis, 
        to produce transportation fuels from coal-derived syngas.
  --Conversion of coal and waste materials, including plastic, rubber, 
        and cellulose (biomass) into high value oil products.
  --Development of novel processes to produce hydrogen from fossil 
        fuels.
  --Environmental research focused on a number of pollutants derived 
        from coal (fine particulate matter (PM), toxic trace metals 
        (arsenic, chromium, mercury, etc.) and SOX).
    We are now focusing on a research program to develop processes that 
use biomass as a co-feed with coal for the production of clean 
transportation fuels with reduced carbon emissions. In this program, 
lignocellulosic waste materials will be used because they are not food 
feedstocks. Wood wastes and agricultural wastes (sawdust, bark, corn 
stover, etc.) will be emphasized because they reflect the lumber, 
paper, and farming industries in the CFFS States.
Goals
    Some of the research goals of the CFFS coal + biomass program are 
summarized below.
  --A pilot scale (3-30 lbs/hr) gasifier is under construction that 
        will be used to gasify coal + biomass feeds. It will be coupled 
        with a supercritical fluid (SCF) F-T synthesis reactor.
  --Biomass feedstocks (lignin, cellulose, hemicellulose, etc.) will be 
        reformed in supercritical water (SCW) to produce hydrogen for 
        F-T synthesis and fuel upgrading with no net carbon dioxide 
        emissions.
  --Iron-alloy nanoparticle catalysts will be used to dehydrogenate 
        gaseous alkanes produced by F-T synthesis, yielding pure 
        hydrogen to recycle to the coal + biomass syngas stream, 
        raising its hydrogen content to avoid carbon dioxide emissions 
        from the water-gas shift reaction.
  --A laboratory-scale fluid-bed gasifier will be designed and built to 
        convert coal + biomass into syngas with an adjustable 
        composition. Potassium and calcium will be tested as catalysts.
  --Novel catalysts (dual function catalysts, metallic nanoparticles on 
        carbon nanotube supports, xerogels, etc.) will be developed for 
        F-T synthesis using syngas typical of coal + biomass.
  --Systems engineering modeling will be used to optimize fuels 
        production from coal + biomass with regard to both economics 
        and carbon dioxide emissions.
Summary
    We request your support for $2,000,000 in funding for this program 
from the Fossil Energy budget for fiscal year 2009. This funding will 
be shared between the CFFS universities to support the second year of a 
3-year research program for the production of liquid transportation 
fuels from coal and biomass. The CFFS will provide $500,000 in cost-
sharing to support this important research on a topic that is critical 
to both our States and our Nation.
                                 ______
                                 
Prepared Statement of the National Research Center for Coal and Energy, 
                        West Virginia University
            fossil energy research and development programs
Summary
    The National Research Center for Coal and Energy submits this 
testimony in support of the Fossil Energy program and recommends the 
following modifications to the administration's budget request:
  --Carbon Capture and Storage (+$6 million for the Focus Area for 
        Carbon Sequestration Science)
  --Fuels Program (+$20 million for continuation of the coal, synthetic 
        natural gas, and coal-biomass liquid fuels programs)
  --Advanced Research (+$10 million to initiate a Focus Area for 
        Materials Science and +$5 million for the Focus Area for 
        Computational Energy Science)
  --Innovations for Existing Plants (+$10 million for criteria 
        pollutants and water programs)
  --Oil and Natural Gas Programs (+$30 million to restore programs for 
        small producers)
    We recommend a dual program strategy to Congress which includes 
supporting fundamental research for developing new concepts and also 
supporting larger scale projects to prove out and hasten the deployment 
of advanced technologies. A robust coal, oil, and natural gas research 
program is necessary if we are to meet our national energy needs.
Introduction
    Coal will continue to play a leading role in electrical power 
generation in the United States well into the future. Transforming coal 
into liquid fuels, synthetic natural gas, and/or chemicals can help to 
reduce petroleum imports, bring associated positive effects on our 
international balance of payments, and preserve jobs in this country. 
Concerns about the effect of greenhouse gases on global climate will 
require reducing emissions of CO2 from all fossil fuel use. 
The successful deployment of cost-effective carbon capture and storage 
(CCS) technologies will ensure that America can continue to use its 
abundant domestic fossil fuel resources into the future. Given the 
projected global use of coal and other fossil fuels, leadership by the 
United States to implement low carbon emission technologies will set a 
positive example for the rest of the world. Deployment of U.S. owned 
low-carbon technologies would be an economic stimulus for developing 
new products that can be sold in global markets.
    Advanced low carbon fossil energy technologies will enable the 
world community to meet pressing environmental challenges driven by 
growing economies as both established and emerging nations are faced 
with diminishing resources. We recommend strong congressional support 
for fossil energy research, development, and technology deployment. We 
also call the subcommittee's attention to the critical shortage of 
energy technologists at all levels. We urge your support in particular 
for basic research in fossil energy that supports academic programs 
under which we can both develop breakthrough discoveries and also 
educate our future workforce of scientists and engineers to meet the 
challenges which face the energy sector.
Carbon Capture and Storage
    We recommend strong support for carbon storage research for 
injecting CO2 into geologic formations. Given the variety of 
potential sinks, multiple projects are needed to prove out technologies 
such as injection into saline aquifers, depleted oil and natural gas 
reservoirs, and coal seams. States like West Virginia offer 
possibilities for demonstrating and deploying capture and storage 
technologies while offering opportunities for our State's coal 
resources to help meet electrical demands of the East Coast. We 
recommend congressional support for a diverse portfolio of investments 
in the National Energy Technology Laboratory (NETL) as the national 
center for carbon management research. NETL should also expand its 
programs on developing pre-and post-combustion CO2 capture 
technology. Continued support for the collaborative research program 
with NETL and the Zero Emissions Technology Center is also recommended. 
Another promising area of research is to explore ways to utilize 
CO2 in processes which do not require storage but result in 
useful products. In addition to supporting the base administration 
request, we recommend restoring the Focus Area for Carbon Sequestration 
Science to its fiscal year 2007 level of $13 million (+$6 million to 
administration request).
Fuels Program
    The administration request for fuels research includes only $10 
million for the development of hydrogen from coal. This program 
contributes to developing a national hydrogen economy. However, the 
administration program should also support projects which address the 
deployment of hydrogen technologies and the associated critical 
infrastructure issues. We need to demonstrate to the general public 
that hydrogen (from coal) is both economically viable and safe.
    We are also concerned that little attention is paid to developing 
transportation fuels, synthetic natural gas, and/or chemicals from 
alternative energy sources such as coal and coal-biomass blends. We 
recommend adding $20 million for continuation of the fuels programs 
added by Congress in fiscal year 2008. These funds would permit 
investments in fuels research to support programs such as the 
Consortium for Fossil Fuel Science and the Center for Advanced 
Separation Technology. These fundamental research programs educate coal 
chemistry and coal materials technologists who will be needed in the 
energy industry of the future as our aging scientists and engineers 
from the Synfuels Corporation era complete their careers. Other 
worthwhile investments which should be supported from these funds 
include the program conducted by the United States and China under 
Annex II of the Fossil Energy Collaborative Research Protocol to study 
the development of large scale coal liquefaction/carbon sequestration 
plants in China. Of the increased funding recommended, $1 million 
should be designated to continue the China program. Modest investments 
in the China program pay back big dividends in access to commercial-
scale results at a fraction of the cost of building such plants in the 
United States.
    We support the position that CCS must be integrated with the fuel 
production aspects of coal conversion technologies. Fundamental 
programs of research conducted with the additional funds recommended 
would develop new technologies that are cost effective with respect to 
both fuels production and CO2 capture. Computational 
modeling, especially for polygeneration systems, should be an integral 
part of the work conducted under these programs.
Advanced Research
    Materials Research.--Advanced materials are needed in a variety of 
applications such as ultra supercritical power plants, high temperature 
gas-fired and hydrogen-fired turbines, sensor technology, catalysts for 
fuel conversion, high temperature materials for fuel cells, and new 
processes for carbon capture. We recommend the addition of $10 million 
to the Advanced Research account for the creation of a Focus Area for 
Materials Research at NETL to develop advanced materials for energy 
applications.
    Focus Area for Computational Energy Sciences.--Advanced computing 
capability enabled by newer, high speed computers and developments in 
computing science permit modeling of energy systems in scale ranges 
from molecular interactions to integrated operation of complex power 
plants. Given the high cost of testing and building large scale energy 
systems, computational modeling offers inexpensive advantages to design 
energy systems which will/must be deployed in the future. We are 
disappointed that the administration has again neglected this important 
area of research and recommend additional funding of $5 million for 
this account for fiscal year 2009.
Innovations for Existing Plants Program
    We support the request of the administration to provide increased 
funding to the Innovations for Existing Plants (IEP) program for CCS 
technologies. We are concerned however, that the administration request 
neglects other important areas such as particulate control, air toxics, 
combustion byproduct utilization, and research in technologies which 
minimize the use of water in energy systems. Continued research is 
needed in these areas in view of the new CAMR ruling calling for more 
stringent studies on mercury emissions. National concerns have arisen 
about the scarcity of water in many regions where electric power 
demands are increasing. We recommend an additional $10 million for the 
IEP program for these applications.
Oil and Natural Gas Programs
    The administration request zeros out funding for both the Oil and 
Natural Gas programs again this year. The core oil and natural gas 
programs under Fossil Energy are specifically authorized in Public Law 
109-58 (EPAct 2005). This authorization includes programs such as the 
Stripper Well Consortium, the Petroleum Technology Transfer Council, 
and the Enhanced Oil Recovery in Marginal Fields programs. All three of 
these programs are of major interest to areas such as Appalachia where 
small producers do not have sufficient funding or expertise to conduct 
research to recover the valuable resources remaining in the ground. 
These programs also support research which educates our geologists and 
petroleum engineers needed in the future to produce our existing 
resources and to manage our carbon storage programs for CO2. 
We recommend restoration of the Oil and Natural Gas program at NETL to 
a level of $30 million, which is considerably less than Congress 
provided in earlier times when we were not facing national economic 
challenges such as $118 per barrel oil and $4 dollar per gallon 
gasoline.
    Thank you for considering our testimony.
    Note.--Specific recommendations for the Consortium for Fossil Fuel 
Science ($2 million) were made in testimony submitted by Gerald 
Huffman. Roe-Hoan Yoon submitted testimony requesting support for the 
Center for Advanced Separations Technology ($3 million).
                                 ______
                                 
  Prepared Statement of the American Council for an Energy-Efficient 
                            Economy (ACEEE)
    The American Council for an Energy-Efficient Economy is an 
independent, non-profit organization dedicated to advancing energy 
efficiency to increase economic prosperity, enhance national security, 
and improve environmental quality. Founded in 1980, we are a leading 
source of unbiased information and policy analysis on energy 
efficiency.
    DOE's fiscal year 2009 budget request reflects a continuing decline 
in support for important energy efficiency programs at a time when 
expanded support for energy efficiency is needed more than ever to 
protect national energy security, save American jobs, control rising 
consumer bills, and stem air pollution and greenhouse gas emissions. 
For fiscal year 2009, the administration proposes to cut $204 million 
(29 percent) relative to the fiscal year 2008 appropriation. In order 
to better address many of America's energy needs, we recommend that the 
subcommittee increase funding for 11 especially high-priority programs 
for a total of $302 million above the administration's request but only 
$71 million above the fiscal year 2008 appropriation. These programs 
include several of DOE's most successful programs as well as a few new 
programs authorized in the Energy Independence and Security Act of 2007 
(EISA). Specific recommendations are described in the sections below.
                         buildings technologies
    Commercial Building Initiative.--CBI is a major new initiative 
established in EISA. The goal of the initiative is for all new 
commercial buildings to use zero energy on net by 2030 (i.e. they 
produce as much energy as they use) and all existing buildings to meet 
the same goal by 2050. These are very large savings that can have many 
positive impacts on the U.S. economy and environment. CBI combines 
research, development, and deployment, and will be run by DOE with 
input from an industry consortium. We recommend that funding of at 
least $20 million be appropriated for this important new program, an 
increase of $7 million relative to the Commercial Buildings Integration 
budget in DOE's request.
    Lighting and Appliance Standards.--DOE standards produce the 
greatest energy savings of any DOE program. DOE's analysis estimates 
that 12 standards to date have saved consumers about $25 billion, from 
a Federal investment of less than $10 million a year. DOE is under 
court order to complete many rulemakings that are years behind 
schedule, and also needs additional funding to address requirements 
added by EISA. The DOE request does not appear to address the new EISA 
requirements which include several new rulemakings, as well as new 
mandates to review and update existing test procedures and standards 
every 6 to 8 years. In order to address both old and new requirements, 
we recommend funding of $24 million for the standards program, an 
increase of $4 million relative to the fiscal year 2009 budget request 
but an increase of only $2 million relative to the fiscal year 2008 
appropriation. DOE should be permitted to spend a portion of this 
increase on staffing, as more DOE staff are needed to supervise 
increased contractor budgets made possible by the fiscal year 2008 
budget.
    Building Codes, Energy Star, and Residential Building 
Integration.--These are three of the most important programs at DOE and 
all three received significant funding increases in the fiscal year 
2009 request. We support these increases.
  --Many States are interested in revising their building codes as part 
        of efforts to save energy and address climate change. The DOE 
        codes program is an important source of funding for these 
        efforts. DOE is also supporting efforts by ASHRAE to reduce 
        permitted energy use in its model commercial building code by 
        30 percent.
  --The Energy Star program is probably the administration's most 
        effective climate change response program. Increased funding 
        will allow DOE to update existing specifications, expand the 
        program to several new products, and actively promote these 
        specifications in regions without significant State or utility 
        programs.
  --The Residential Building Integration program is the home of the 
        Building America program, a successful partnership with private 
        firms that is developing and promoting cost-effective design 
        approaches for reducing energy use of new homes by 40 percent 
        or more.
                        industrial technologies
    The 2009 request would cut the Industrial Technologies Program by 
$2.3 million, relative to fiscal year 2008, but much larger cuts in 
several very important programs are hidden in the budget details as is 
discussed below. The overall program activities are divided into two 
broad groupings: industry specific and cross cutting. We have 
identified several priorities in each of these areas.
    Industrial Assessment Centers.--The IAC is part of the cross-
cutting program budget. The IAC program helps small and medium 
industries identify and implement energy saving measures, while also 
helping to train the next generation of industrial energy engineers. 
The program operates centers at 31 universities nationwide and produces 
several hundred trained engineers annually while helping to reduce 
industrial energy use in small- and medium-sized facilities. This is 
one of DOE's most effective programs, and is presently saving more than 
$1 billion per year (including measures implemented in earlier years). 
The program should be substantially expanded in order to meet future 
needs for trained energy engineers--there is presently a shortage of 
skilled energy efficiency engineers. We recommend that the program be 
restored to fiscal year 2006 funding levels of $6.435 million in fiscal 
year 2009.
    Industries of the Future (Specific).--This program does cost-shared 
research with industry at major research institutions. The program 
focuses on key, energy-intensive manufacturing industries such as 
steel, aluminum, wood products, glass and metal casting. The most 
recent National Academy review found this to be among the most 
successful of Federal R&D efforts.\1\ In spite of this success, the 
program has seen its budget drop from $63 million in fiscal year 2002 
to $11 million in fiscal year 2008. DOE is proposing $11.4 million in 
fiscal year 2009, which may appear to be level funding, but in reality 
represents a further cut since most of the research funding is multi-
year, and funding from earlier years is now no longer being replaced 
and the pipeline is running dry. In EISA, Congress authorized an 
expanded Energy-Intensive Industries program (sec. 452), with an 
emphasis on industry-specific research in energy-intensive industries. 
This provision specifically authorized the successful industry-focused 
program format that has proven effective because it responds to the 
targeted needs of individual industries rather than to the more general 
and less focused topics covered under the cross-cutting program. To 
start implementing this new provision, we recommend fiscal year 2009 
funding of at least $24.2 million (which was the appropriation in 
fiscal year 2006), an increase of $12.8 million relative to the budget 
request.
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    \1\ In 2005 the National Research Council reviewed DOE's Industrial 
Technology Program in their report Decreasing Energy Intensity in 
Manufacturing. The study characterized the program (at that point) as 
being ``well-managed and effective.'' In particular they indicated that 
the ``program's scope and depth of analysis and reporting are 
impressive. The ITP significantly leverages its resources through a 
large and growing number of partnerships with industry, industry 
associations, and academic institutions.'' Unfortunately, funding has 
been dramatically reduced since this evaluation, and a subsequent 
National Research Council report on DOE R&D, Prospective Evaluation of 
Applied Energy Research and Development at DOE (Phase Two) (2007), 
noted with respect to Chemical Industry research activities ``the 
budget decreased to $9 million in fiscal year 2005 and $7 million in 
fiscal year 2006. There is a clearly apparent contradiction between the 
ambitious goals of the program and the dwindling resources available to 
pursue them.''
---------------------------------------------------------------------------
    Distributed Energy (DE).--Over the past decade these efforts have 
played a key role in the development of high-efficiency clean 
technologies like combined heat and power (CHP) and technologies to 
recycle waste energy. Over the past few years these efforts have been 
shuffled between EERE and the Office of Electricity, and the program 
has received no funding for the past year. For fiscal year 2008, 
Congress provided $14.5 million, but DOE's fiscal year 2009 request is 
for only $1.5 million. The program is now part of the cross-cutting 
effort in the Industry program. We recommend the DE activities be 
funded at an overall level of no less than $20 million, an increase of 
$5.5 million relative to the fiscal year 2008 appropriation.
    Industries of the Future (Cross-Cutting).--The remainder of the 
industrial program budget request falls within the category of cross-
cutting programs. This includes the Industrial Assessment Centers and 
the Distributed Generation program discussed above. In addition, this 
program includes Best Practices and cross-cutting R&D, each of which we 
discus below.
  --Best Practices.--The OMB request proposes to increase the best 
        practices area from $8.8 to $15.5 million, though this 
        represents only a partial restoration of funding that was $19.8 
        million in fiscal year 2007. This increased funding will allow 
        the expansion of the successful Save Energy Now program, one of 
        the most successful energy savings programs undertaken at the 
        Federal level (e.g. savings underway of approximately $288 
        million since program inception in 2006). We recommend that the 
        program be funded at the requested level of $15.5 million.
  --Cross Cutting RD&D.--These activities are primarily for R&D on 
        technologies that benefit many industrial sectors, such as work 
        on sensors and controls. In addition, DOE is now proposing a 
        number of new efforts in energy-intensive process R&D, feed 
        stock flexibility and nanomanufacturing, and expanding the 
        industry focus to include datacenters and food processing. 
        While these are potentially worthy areas of efforts, DOE is 
        essentially proposing to fund these efforts by further cuts to 
        the successful industry-specific IOF efforts. In addition, EPA 
        has already been running a datacenter program for several 
        years, and a new DOE effort is potentially duplicative. If 
        budgets are tight, funding for these cross-cutting RD&D can be 
        reduced to fiscal year 2008 levels in order to free up funds 
        for our higher priorities discussed above.
                          vehicle technologies
    Despite the nominal increase of $8 million in the Vehicle 
Technologies Program budget, proposed funding for this work has 
actually declined because elements of the Hydrogen Technology budget 
have been moved into Vehicle Technologies. In fiscal year 2008, Vehicle 
and Hydrogen Technologies together received $424.1 million. The fiscal 
year 2009 request cuts these combined budgets by $56.7 million. The 
proposed transferal, elimination or postponement of certain activities 
in the Hydrogen Technology Program appears reasonable in many cases, 
and in particular begins to rectify disproportionate allocations in 
prior years to hydrogen and fuel cells relative to other vehicle and 
fuel technologies. However, given the great opportunities and needs at 
present in the area of vehicle efficiency and greenhouse gas reduction, 
it is imprudent to simply eliminate funds from this program, rather 
than transferring some of the funds to underfunded areas in Vehicle 
Technologies. In the fiscal year 2009, DOE proposes to cut a variety of 
important vehicle programs: Hybrid Electric Systems declines by $5.8 
million (6 percent, net of the Technology Validation activity 
transferred from the Hydrogen Technology Program), Technology 
Integration by $2.2 million (13 percent), Advanced Combustion loses $11 
million (25 percent), Materials Technology loses $2.7 million (7 
percent), and Fuels Technology loses $1.7 million (10 percent), 
relative to fiscal year 2008 appropriations. Also, funding for the 21st 
Century Truck Partnership declines in the budget proposal, for a total 
40 percent reduction since fiscal year 2007. We recommend that some of 
these cuts be restored by adding $37 million to the fiscal year 2009 
request, which is still a cut of about $20 million relative to the 
combined fiscal year 2008 Vehicle and Hydrogen budgets.
    Hybrid Electric Systems.--The proposed reduction in the Vehicle and 
Systems Simulation and Testing activity relates in part to heavy 
vehicle systems optimization R&D, which warrants greater attention. We 
recommend that $7.1 million be restored to Vehicle and Systems 
Simulation and Testing, bringing funding for this activity back to 
$28.2 million. Furthermore, energy storage efforts need to be 
accelerated. We recommend that the Energy Storage R&D activity be 
funded at $59.5 million, an increase of $10 million above the proposed 
budget.
    Advanced Combustion Engine R&D.--The explanation offered for the 
proposed cut, namely that resources should go to ``R&D that has a 
higher potential for oil savings'' is not persuasive given the 
considerable remaining opportunities in this area for both light- and 
heavy-duty engines. We recommend that Combustion and Emissions Control 
be funded at $38.8 million, restoring $10 million to this activity.
    Materials Technology.--Reaching DOE's stated goal of a 50 percent 
reduction in the weight of body and chassis for a passenger vehicle 
will require a sustained effort, including continued exploration of 
``high-risk concepts'', as referenced in DOE's budget explanation. We 
recommend funding of $30 million for Lightweight Materials Technology, 
which restores $2.9 million cut in the budget and adds a further $7.7 
million.
                            other priorities
    Weatherization Assistance Program.--This program has steadily 
improved, and according to the last nationwide evaluation of the 
program, is reducing energy use in participating homes by about 20 
percent. DOE has proposed to eliminate this program, in order to save 
money. With the economy heading into a recession, this is a 
particularly bad time to cut our country's safety net. We recommend 
funding this program at least at the fiscal year 2008 level of $227 
million.
    Energy Information Administration Energy Consumption Surveys.--
EIA's Energy Consumption surveys are an important resource for energy 
analysis and energy program planning. These three surveys (residential, 
commercial and manufacturing) are widely used and provide important 
information for accurate forecasting and planning. Unfortunately, due 
to declining funding, sample sizes are smaller (making regional data 
less precise) and the surveys are now every 4 years, instead of the 
every 3 years called for in the Energy Policy Act of 1992. In fiscal 
year 2008, the consumption surveys have a $3.6 million budget. We 
recommend that $2 million be added to the EIA request in order to 
return to the every 3 year schedule, increase sample sizes and speed up 
processing of surveys so they can be released more quickly.
                                 ______
                                 
 Prepared Statement of the Next Generation Nuclear Plant Working Group
    The United States must successfully compete in today's global 
marketplace to provide opportunities for all of its citizens and future 
generations. Two of the major issues affecting our competitiveness are 
the lack of energy security and our major contributions to the global 
greenhouse gas (GHG) inventory. The first issue is economic and costs 
the U.S. taxpayers several billion USD daily. Additionally, innumerable 
jobs in industries that depend on reasonably priced and abundant fossil 
feedstock continue to move offshore. The second is more subtle. Our GHG 
emissions cost us in terms of international reputation and accelerate 
the adverse effects of global climate change. We must become much more 
efficient in our use of energy, but this step is not sufficient to 
address the critical issues to keep our economy strong. We must 
aggressively pursue technological solutions that provide energy for all 
sectors of our economy in an environmentally responsible manner. One of 
the technologies that can address both of these critical issues 
utilizes a proven energy source, nuclear fission, for a broad range of 
applications beyond its traditional role of generating electricity.
    The Next Generation Nuclear Plant (NGNP) Project provides the basis 
for the commercialization of this technology in the form of a new 
generation of advanced, passively safe, modular nuclear plants that use 
High Temperature Gas-Cooled Reactor (HTGR) technology. This technology 
offers enhanced safety plus improved reliability, higher efficiency 
(requiring less fuel and cooling water), proliferation resistance, 
security and waste management capabilities. Further, at current and 
projected natural gas prices and costs for CO2 management, 
the HTGR will be competitive for a broad range of applications, 
including:
  --High efficiency electricity generation for small to medium markets, 
        particularly if suitable for cogeneration with water 
        desalination or dry cooling;
  --High quality steam for use in heavy oil recovery, including tar 
        sands, or the broad range of process steam/cogeneration based 
        industries;
  --High temperature process heat for industrial chemical and 
        petrochemical facilities, preserving natural gas for feedstock; 
        and
  --High temperature process heat for hydrogen production and 
        cogeneration for the petrochemical and refinery industries plus 
        the clean conversion of coal to liquid and gaseous fuels or the 
        direct use of hydrogen transportation fuel in the future.
    Advanced HTGR plants can help improve U.S. industrial 
competitiveness, promote the utilization of indigenous coal and 
uranium, and eventually, our oil shale resources. Their use will extend 
domestic oil and gas resources and preserve them for feedstock for 
products that would otherwise be unattainable, thereby reducing costs 
and risks associated with imported oil and natural gas.
    The NGNP Project is essential to demonstrate the commercial 
potential of the HTGR and support timely NRC Design Certification and 
commercialization. An industry based Consortium is being created to 
support the public/private partnership with the Department of Energy to 
focus the development and deployment of the NGNP and help provide the 
infrastructure for follow-on commercialization. A cost/risk sharing 
model between the U.S. Government and industry will assure a new 
commercialization phase for nuclear energy for production of process 
heat and cogeneration without carbon emissions--at the lowest costs and 
risks for the U.S. taxpayers.
    With a balanced approach to risk management and timeliness to 
attract end-user support, the recommended NGNP Project schedule targets 
startup of the demonstration plant in the 2018-2019 timeframe. Near-
term priorities in support of this date follow:
  --Establish reference design and baseline costs
  --Advance licensing strategy and pre-application program with the NRC
  --Advance critical-path enabling technology development and testing
  --Establish Public-Private Partnership and costs/risks sharing 
        concept
  --Establish Project plan, vendor team and international cooperation 
        frameworks
    During the past year significant technical progress and milestones 
have been achieved in the following key areas of the NGNP Project: 
preliminary design evaluations for the competing concepts, including 
trade-off studies to resolve critical issues and establish technology 
development needs; licensing strategy development, technology 
development including fuel manufacturing process development and 
testing; and, bounding cost estimates.
    For fiscal year 2009, the NGNP Alliance recommends a NGNP Project 
budget of $210 million (versus the DOE budget of $59.5 million) plus a 
$28 million budget for the related Nuclear Hydrogen Initiative (versus 
the DOE budget of $16 million). The working group also recommends a 
budget of $10 million for NRC licensing and required R&D activities 
related to the NGNP Project. A licensing framework and a process 
appropriate for the enhanced safety features of the HTGR is essential 
and is a critical path to the deployment of the NGNP Project.
                                 ______
                                 
     Prepared Statement of the New York State Energy Research and 
 Development Authority and the New York State Division of Housing and 
                           Community Renewal
    The New York State Energy Research and Development Authority 
(NYSERDA) and the New York State Division of Housing and Community 
Renewal (NYSDHCR) welcome the opportunity to present this testimony to 
the Subcommittee on Energy and Water Development, and look forward to 
working with the subcommittee to ensure the most appropriate and 
effective Federal funding of essential programs and operations. This 
testimony will address proposed funding of two Department of Energy 
programs which are issues of concern to NYSERDA, namely funding for the 
West Valley Demonstration Project (West Valley, Project), identified 
for funding from the Non-Defense Environmental Cleanup Program at $57 
million, and the State Energy Program (SEP), identified for funding at 
$59 million. In addition, this testimony addresses one program of 
particular importance to NYSDHCR, the Weatherization Assistance Program 
(WAP), funding for which was cut completely in the President's proposed 
fiscal year 2009 budget proposal. NYSDHCR asks that funding for this 
program be restored to at least fiscal year 2008 levels of $243 
million.
                              west valley
    The State of New York and NYSERDA are extremely concerned about the 
proposed cut in Federal funding to the West Valley Demonstration 
Project, a radioactive waste cleanup project located near Buffalo, New 
York. The President's budget for fiscal year 2009 would provide only 
$57 million for activities of the Department of Energy at West Valley. 
The State strongly urges full funding of the West Valley Demonstration 
Project at the level of $95 million.
    Federal funding had been more than $100 million as recently as 
2004, but had been reduced to $75 million in recent years. The proposed 
cuts will result in lengthening the term of the cleanup and ultimately 
only increase the total project costs. Moreover, as will be discussed 
below, important risk reduction work that has been agreed upon between 
the State and Federal governments will not be funded in 2009 and as 
many as 50 trained workers will have to be laid off.
    The Federal funding responsibility for this project was established 
in 1980, when Congress passed the West Valley Demonstration Project 
Act, Public Law 96-368. The West Valley Demonstration Project Act 
directed the U.S. Department of Energy to carry out a high-level 
radioactive waste (HLW) management demonstration project at the Western 
New York Nuclear Service Center in West Valley, New York. The WVDP Act 
directs the Department of Energy to:
  --Solidify the 600,000+ gallons of liquid high-level radioactive 
        waste.
  --Develop containers for permanent disposal of the solidified HLW.
  --Transport the solidified HLW to a Federal repository for permanent 
        disposal.
  --Decontaminate and decommission:
    --the tanks and other facilities in which the HLW were stored,
    --the facilities used in carrying out solidification, and
    --the material and hardware used in connection with the Project.
  --Dispose of the low-level radioactive waste and transuranic waste 
        produced in conducting the Project.
    The West Valley Demonstration Project Act requires the Secretary of 
Energy to enter into an agreement with New York State for carrying out 
the Project. Under the requirements of the act, New York State pays 10 
percent of the Project costs and the Federal Government pays 90 
percent, making New York the only State that has contributed to the 
cleanup of HLW. New York State has provided approximately $242 million 
toward completion of the Project to date.
    Decontamination and decommissioning of the West Valley site is 
necessary to protect public health and safety. The Department of Energy 
has solidified the bulk of the liquid high-level nuclear waste that was 
stored in underground tanks. A total of 275 HLW glass-filled canisters 
are in storage at West Valley awaiting disposal at the Federal 
repository. However, much cleanup work remains to be done on the site's 
contaminated facilities and property, including the decommissioning of 
the four underground HLW storage tanks, the Main Plant Process 
Building, an unlined lagoon system, a radioactive groundwater 
contamination plume, and a radioactive waste disposal area. The 
Department of Energy must also dispose of the low-level waste, the 
transuranic waste, and the vitrified High-Level Waste.
    Until recently, progress on significant aspects of the West Valley 
cleanup had stalled. The Department of Energy ceased efforts to contain 
a radioactive groundwater plume and refused to take steps to halt the 
spread of liquids leaking from a radioactive waste disposal area under 
its control. The Environmental Impact Statement that is essential for 
decisions on the future of the cleanup was also stalled. In the past 
year, there have been some substantial and encouraging changes at West 
Valley. Agreements have been reached on steps to control the 
groundwater plume and disposal area leaks, and the involved Federal and 
State agencies have agreed on an approach to complete the Environmental 
Impact Statement.
    Unfortunately, this progress is threatened by the lack of adequate 
funding. For fiscal year 2009, Federal funding at about $95 million is 
necessary to continue decontamination work on the highly radioactive 
Main Plant Process Building, remove liquid from the underground high-
level radioactive waste tanks, mitigate radioactive groundwater 
contamination that is spreading toward the Project boundary, and ship 
waste for offsite disposal. In the absence of this level of funding, 
important work to reduce risk from radioactive materials at the site 
will not get done this year and up to 50 members of the highly trained 
workforce at the site will have to be laid off. For each year that work 
is delayed, the time until completion and the total cost of the Project 
are increased.
    For the reasons stated above, New York State and NYSERDA request a 
restoration of funding for West Valley to $95 million to permit the 
important work at the Project to continue at an optimal pace.
                          state energy program
    The State of New York and NYSERDA are concerned about the proposed 
level of Federal funding for the State Energy Program, at $59 million, 
and request that a funding level of $75 million for fiscal year 2009 is 
provided to support this essential program. This funding level request 
is made in support of the request of the Coalition of Northeastern 
Governors (CONEG), which is also submitted to the subcommittee. The $75 
million level will help to restore a funding level for SEP which has 
experienced significant cuts in program budgets in the past. As noted 
in both the CONEG testimony, and by the Department of Energy itself, 
every Federal dollar invested by the SEP returns $7.23 in energy cost 
savings. In addition, every Federal dollar invested by the SEP also 
leverages $10.71 in State, local and private resources, providing 
significant additional economic benefit.
    In New York, SEP program dollars are used by NYSERDA to support the 
deployment of various energy efficiency programs and services. NYSERDA 
leverages SEP funds with the State ratepayer-supported System Benefits 
Charge and other private sector funds. Most importantly, SEP provides 
essential funding for programs which reach across the spectrum of fuel 
sectors, helps to fill program gaps, and expands the reach of critical 
energy efficiency activities to customer sectors which may otherwise be 
limited from full program participation. In addition to reducing 
overall energy use in New York, the SEP supports activities that 
improve productivity, stimulate private investment, retain and create 
jobs, displace petroleum use, reduce electric peak load, and improve 
air quality, among other benefits.
    Activities supported by SEP dollars include:
  --NYSERDA's award-winning Flexible Technical Assistance Program, 
        which provides onsite energy engineering services through 
        competitively retained energy service providers.
  --Multifamily Residential energy efficiency program which provides 
        energy audits, evaluations and access to loan fund dollars 
        which reduces the cost to building owners to implement energy 
        efficient technologies.
  --Agricultural Initiatives.
  --Green Building Projects.
  --Alternative Fuel Vehicles and Alternative Fuel Infrastructure.
  --Industrial Improvements.
  --Expansion of the Home Energy Assistance Program heating oil 
        purchasing program, providing participating low-income energy 
        consumers with discounts on heating oil purchases.
    Obtaining an optimal level of SEP funding will help to ensure the 
continuation of these critical program activities.
    For the reasons stated above, New York State and NYSERDA request a 
restoration of funding for SEP to $75 million to permit the important 
energy efficiency programs in New York to continue and expand at a pace 
needed to meet energy consumer needs.
                   weatherization assistance program
    The Weatherization Assistance Program (WAP) improves the energy 
efficiency of low-income homes every year, helping to reduce the home 
energy bills of the Nation's most vulnerable citizens by 25 percent or 
more. The New York State Division of Housing and Community Renewal 
(NYSDHCR) is very concerned about President Bush's decision to 
eliminate funding for the program for fiscal year 2009. If the 
President's cut is sustained, the State program will lose $21.8 
million. The State of New York relies on this funding to help assist 
its low-income families. With oil prices at record levels, and cuts to 
LIHEAP proposed, these cuts would be devastating to low-income families 
and seniors in New York. Currently, we have waiting lists for this 
assistance in excess of 18 months. NYSDHCR asks that Congress work 
toward funding this program at its fully authorized level.
    In conclusion, and as stated herein, NYSERDA and NYSDHCR 
respectfully requests that the Senate provide, for fiscal year 2009, 
$95 million for West Valley, $75 million for SEP, and at least $243 
million for WAP. NYSERDA and NYSDHCR look forward to working with the 
subcommittee to ensure that these program funding levels are provided 
to ensure that essential energy projects are maintained.
                                 ______
                                 
     Prepared Statement of the Biomass Energy Research Association
                                summary
    This testimony pertains to the fiscal year 2009 appropriations for 
biomass energy research, development, and demonstration (RD&D) 
conducted by the Department of Energy's (DOE) Office of Energy 
Efficiency and Renewable Energy (EERE), Biomass Program. This RD&D is 
funded by the Energy and Water Development bill and performed under the 
heading of Energy Supply and Conservation, Energy Efficiency and 
Renewable Energy.
    BERA recommends a total appropriation of $275 million in fiscal 
year 2009 under Biomass and Biorefinery Systems R&D (Energy Supply and 
Energy Conservation), exclusive of earmarks. This is an increase of 
about $50 million over the Department of Energy request for fiscal year 
2009 for this programmatic area.
    We feel this increase is necessary to meet goals for production of 
fuels from cellulosic biomass as stipulated under the Energy 
Independence and Security Act (EISA) of 2007. While the proposed DOE 
Bioenergy budget is an increase of $27 million over the 
administration's fiscal year 2008 proposed budget, it reflects a 
decrease of $49 million from the DOE Biomass Program's authorized level 
of (sec. 932) $274 million, and reducing funds available for important 
Integrated Biorefinery Demonstration Projects (sec. 932(d)). Technology 
demonstrations reduce technical and economic risk and accelerate the 
potential for private investment. They are critical for reaching goals 
for biofuels production for 2022 and beyond.
    Specific lines items for the DOE biomass RD&D budget are as 
follows:
  --$20 million for Feedstock Infrastructure development (regional 
        partnerships, harvesting and storage technology)
  --$35 million for Biochemical Conversion Platform Technology 
        (conversion of agricultural residues, wood, forest residues and 
        perennial crops to various fuels)
  --$35 million for Thermochemical Conversion Platform Technology 
        (conversion of plants, oil crops, energy crops, wood and forest 
        resources to oils, long chain hydrocarbons, or other fuels/
        intermediates)
  --$175 million for Integrated Biorefinery Technologies demonstrations
  --$10 million for Utilization of Platform Outputs: Bioproducts 
        (chemicals and materials as co-products)
                               background
    On behalf of BERA's members, we would like to thank you, Mr. 
Chairman, for the opportunity to present the recommendations of BERA's 
Board of Directors for the high-priority programs that we strongly urge 
be continued or started. BERA is a non-profit association based in the 
Washington, DC area. It was founded in 1982 by researchers and private 
organizations conducting biomass research. Our objectives are to 
promote education and research on the economic production of energy and 
fuels from freshly harvested and waste biomass, and to serve as a 
source of information on biomass RD&D policies and programs. BERA does 
not solicit or accept Federal funding.
    There is a growing realization in our country that we need to 
diversify our energy supply, develop technologies to utilize indigenous 
and renewable resources, reduce reliance on imported oil, and mitigate 
the impacts of energy on climate. Economic growth is fueling increasing 
energy demand worldwide and placing considerable pressure on already 
burdened energy supplies and the environment. The import of oil and 
other fuels into the United States is growing steadily and shows no 
sign of abating. Industry and consumers alike are faced with rapidly 
rising and volatile costs for fossil fuels, especially petroleum and 
natural gas. A diversified, sustainable energy supply is critical to 
meeting our energy challenges and maintaining a healthy economy with a 
competitive edge in global markets.
    Biomass is the single renewable resource with the ability to 
directly replace liquid transportation fuels. It can also be used as a 
feedstock to supplement the production of chemicals, plastics, and 
other materials that are now produced from crude oil. In addition, 
gasification of biomass produces a syngas that can be utilized to 
supplement the natural gas supply and electricity from fossil fuels. 
Production of power from biomass co-products for use in biorefinery 
processes greatly reduces the life cycle carbon footprint of biofuels. 
Fuels, chemicals, and power are already being produced from biomass, 
but on a small scale compared to the potential markets. While biomass 
will not solve all our energy challenges, it can certainly contribute 
to the diversity of our supply, and do so in a sustainable way, while 
minimizing impacts to the environment or climate.
    The Energy Policy Act of 2005 created various incentives for 
diversifying our energy supply via the use of biofuels. In addition, 
the Energy Independence and Security Act (EISA) of 2007 put forth a 
mandate to increase use of alternative fuels for transportation, with a 
substantial portion to come from cellulosic biomass. To meet the 
ambitious goals of EISA will require aggressive support for RD&D to 
move technology forward and reduce technical and economic risk. 
Incentives are also needed to accelerate commercialization and 
deployment.
             bera recommendations for u.s. doe biomass rd&d
    BERA's recommendations support a balanced program of RD&D, 
including projects to develop and demonstrate advanced biochemical and 
thermochemical biomass conversion processes, a diverse slate of liquid 
transportation fuels, and co-production of fuels, chemicals, and power 
in integrated biorefineries. Our overarching recommendations are to:
  --Invest in demonstration of technology (as progress is made) to 
        reduce risk (e.g., through loan guarantees, cost-shared 
        projects, other mechanisms) and encourage private sector 
        investment and commercialization.
  --Explore a variety of fuels beyond ethanol, including green diesel, 
        green gasoline, jet fuels, algae diesel, pyrolysis oils, mixed 
        alcohols, and others. Include fuels that can be easily 
        integrated into existing infrastructure, and revolutionary 
        fuels or feedstocks (algae). This will diversify options for 
        different transport markets that depend heavily on petroleum.
  --Fund a variety of conversion technologies, both biochemical and 
        thermochemical.
  --Integrate sustainability throughout RD&D to promote the use of 
        biomass technologies that improve environmental performance and 
        minimize impacts to land, water and air.
    BERA's recommendations for funding for DOE biomass RD&D are shown 
in Table 1 and outlined below. Note that recommended budgets for 
demonstration projects do not include industry cost-share, which should 
be 50 percent or more.

                  TABLE 1.--BIOMASS/BIOREFINERY SYSTEMS R&D, ENERGY SUPPLY & CONSERVATION, EERE
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
               Program Area                     Description of RD&D          R&D      Demonstration     Total
----------------------------------------------------------------------------------------------------------------
Feedstock Infrastructure.................  Regional feedstock                   15.0           5.0          20.0
                                            partnerships, joint
                                            development of storage and
                                            harvesting technology.
Biochemical Conversion Platform R&D......  Conversion of cellulosic             20.0          15.0          35.0
                                            biomass--agricultural
                                            residues, wood/forest
                                            residues, perennial grasses.
Thermochemical Conversion Platform R&D...  Conversion of wood/forest            20.0          15.0          35.0
                                            residues to pyrolysis oils
                                            or syngas.
Platform Outputs: Integrated               Developing/validating                10.0         165.0         175.0
 Biorefineries.                             biochemical and
                                            thermochemical conversion
                                            technologies in integrated
                                            biorefineries (e.g., 932
                                            projects) and small scale
                                            biorefineries.
Platform Outputs: Bioprod- ucts..........  Co-production of chemicals            5.0           5.0          10.0
                                            and other products from
                                            biochemical and
                                            thermochemical output
                                            streams.
                                                                        ----------------------------------------
      TOTAL..............................  ............................         70.0         205.0         275.0
----------------------------------------------------------------------------------------------------------------

    Feedstock Infrastructure.--Continue support for regional feedstock 
partnerships to ensure the optimal and sustainable production of 
feedstocks to meet demand on a regional basis. The Departments of 
Energy and Agriculture, in partnership with the Sun Grant Initiative 
universities and the members of the National Biomass State and Regional 
Partnership, established the Regional Biomass Energy Feedstock 
Partnership. Funding should be continued for these important 
partnerships, as they will help ensure that cost competitive biomass 
feedstocks are widely available in sufficient quantity and at an 
acceptable market cost. Increase funding for cost-shared activities 
with USDA on critical harvesting, storage and transport technologies to 
ensure a feedstock delivery infrastructure is available to meet the 
larger demand.
    Platform Outputs: Support Development/Demonstration of Integrated 
Biorefineries.--Activities should address promising biochemical and 
thermochemical processes in integrated biorefineries producing fuels, 
high-value products where possible, and potentially heat and power to 
meet processing demands. A diversity of technologies and feedstocks 
should be considered, as well as new fuel options (green diesel, jet 
fuel, algae, etc.). The object is to improve process efficiency and 
reduce cost, taking into consideration design, financing, permitting, 
environmental controls, waste processing, and sustained operations; 
feedstock acquisition, transport, storage, and delivery; and storage 
and delivery of products to market.
    Conversion: Fund Both Biochemical and Thermochemical Conversion 
Platforms as Foundations for Integrated Biorefineries.--The biochemical 
and thermochemical platforms are both important and could provide 
viable technologies for production of fuels and chemicals. BERA urges 
that both be funded to accelerate the development and demonstration of 
large-scale, synergistic integrated biorefinery systems. BERA urges 
that biochemical conversion research be funded at the amounts shown in 
Table 1, and that thermochemical conversion R&D for biomass 
gasification, pyrolysis, and synthesis of alternate liquid fuels be 
given equal priority. Both should focus on the use of cellulosic 
biomass, waste biomass, or novel concepts for feedstocks.
    Platform Outputs: Invest in R&D to Develop Bioproducts That Enhance 
the Economic Viability of the Integrated Biorefinery.--BERA urges that 
funding be provided for R&D to enable economic production of commodity 
organic and high value chemicals as co-products in biorefineries. 
Biomass-derived fuels and chemicals combined would increase the product 
slate and provide greater opportunity for reducing fossil fuels 
consumption, while increasing the economic viability of the 
biorefinery. BERA urges that this effort include research on sugar 
intermediates, but that it be expanded to include direct conversion of 
other intermediates (such as those derived from gasification and 
pyrolysis) to fuels and commodity organic chemicals.
    Reduce or Eliminate Earmarks.--The level of earmarks in the last 
few years has limited new initiatives and led to premature reductions 
of scheduled programs by EERE. BERA respectfully asks the subcommittee 
to carefully consider the impacts of all earmarks on EERE's biomass 
energy RD&D.
                                 ______
                                 
 Prepared Statement of the Center for Advanced Separation Technologies
    Chairman Dorgan and Ranking Member Domenici, and members of the 
subcommittee, I represent the Center for Advanced Separation 
Technologies (CAST), which is a consortium of seven universities. I 
appreciate the opportunity to submit this testimony requesting that 
your subcommittee add $3 million to the 2008 Fuels Program budget, 
Fossil Energy Research and Development, 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, sec. 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; Rick Q. Honaker, 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
    CAST was formed initially as a partnership between Virginia Tech 
and West Virginia University in 2001 to address the needs of the U.S. 
coal industry. In 2002, five other universities (University of 
Kentucky, Montana Tech, University of Utah, University of Nevada-Reno, 
and New Mexico Tech) joined to form a consortium, with Virginia Tech as 
the lead institution. The objective of the consortium is to develop 
Advanced Separation Technologies that can be used to produce cleaner 
fuels from domestic resources with minimal environmental impact.
                             proposed work
    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 the oil, and 44 percent of 
the motor gasoline, while its domestic energy production lags behind. 
As a result, the United States imported 30 percent of its energy needs 
in 2006, a number expected to grow in the future. On the other hand, 
the United States is fortunate to have 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 deposited in 
the form of hydrates in ocean floors and permafrost. The amount of 
energy deposited as methane hydrates far exceeds the amounts of all 
fossil energy resources combined. The advanced separation technologies 
developed by CAST will be useful for developing these resources in an 
environmentally acceptable manner and help the United States achieve 
its energy independence.
    A major concern in developing these domestic resources is the 
greenhouse gases (GHG) emitted from the utilization of fossil energies, 
which account for 85 percent of the total energy consumed in the United 
States. Therefore, the country is seeking to increase energy 
efficiencies and develop renewable energies. However, the renewable 
energies account for only 7 percent of the total, including 
hydroelectric power (2.9 percent), bio-fuels (0.8 percent) and others. 
Recognizing that the crux of the energy crisis lies in the shortages of 
transportation fuel liquids, the country is striving to increase the 
production of bio-fuels. In 2005, the United States produced about 4 
billion gallons; however, the United States consumed 180 billion 
gallons of gasoline and diesel fuel combined in the same year. Thus, 
ethanol accounts for only a small percentage of the transportation fuel 
need. According to a publication by the National Academies, the energy 
from biomass will likely increase by 60 percent, and those from wind, 
solar and other renewable resources are likely to nearly triple by 
2030. But the net effect of all these activities will probably raise 
the total renewables from 7 percent of the total energy consumed in the 
United States to about 8 percent in 2030. Thus, the United States will 
have to rely on fossil energy resources for the foreseeable future.
    On the other hand, the scientific debate on global warming seems to 
be over, and the country is prepared to reduce CO2 emissions 
by legislation. But Congress recognizes that the United States cannot 
stop global warming single-handedly. Developing countries, such as 
China and India, should also participate in limiting their own 
CO2 emissions. If the United States reduced the emissions 
unilaterally, the cost of producing American goods would increase 
relative to those manufactured in countries without emission limits, 
resulting in the relocation of U.S. industry and manufacturing jobs.
    It is projected that developing countries will account for more 
than three-quarters of the increase in global CO2 emissions 
between 2005 and 2030, and these countries' overall shares in world 
emissions are expected to rise from 40 percent in 2005 to nearly 55 
percent by 2030. In 2006, China and India alone produced 3.1 billion 
tons of coal, representing 46.2 percent of the world production, while 
the United States produced 1.16 billion tons of coal accounting for 
19.3 percent of the world production. In the near term, the major focus 
of these countries is on economic development and reducing poverty. 
Therefore, it would be desirable for the United States to develop 
affordable clean coal technologies (CCT) that can be used in these 
countries.
    A serious problem in China and India is that much of the coal is 
burned as mined without cleaning, causing low thermal efficiencies. The 
thermal efficiencies for power generation are 29 percent in these two 
countries as compared to 38 percent in the United States. By improving 
the quality of coal used for power generation, China can increase the 
efficiency to 33 percent and reduce CO2 emissions by 20 
percent. Currently, only 12 percent of the coal burned in China for 
electricity generation is cleaned coal. Thus, increased use of advanced 
coal cleaning technologies, representing the most affordable CCTs, 
should help China reduce CO2 emissions substantially. 
According to a recent IEA report, India could reduce CO2 
emissions by 55 percent using state-of-the-art technologies relating to 
coal quality, boiler/generator design, instrumentation and control, and 
high voltage distribution systems. Unfortunately, much of the coals 
burned in India for power generation are of low quality, assaying 35-42 
percent ash.
    It is, therefore, an objective of CAST research to develop advanced 
technologies that can be used to separate various impurities such as 
ash, sulfur, and mercury from coal so that they can be burned more 
cleanly and efficiently. The Chinese Government considers pre-
combustion coal cleaning an important element in their strategy to 
increase energy supply and improve energy transportation systems, as 
stressed in their plan to implement CCTs. Recently, India passed a law 
requiring coals to be cleaned if they are to be transported more than 
1,000 km.
                       summary of accomplishment
    Thanks to your support, CAST has become the world leader in 
developing advanced separation technologies for the coal industry. Many 
of the solid-solid and solid-liquid separation technologies developed 
by CAST are marketed commercially worldwide under license agreements. 
For example, the Microcel flotation technology is used to remove ash, 
sulfur, mercury, and other impurities from coal in the United States, 
Australia, and China. In addition, an advanced fine coal dewatering 
technology has been tested successfully in full-scale tests, and is 
marketed commercially. More recently, another fine coal dewatering 
technology has been tested successfully at pilot-scale and is expected 
to be commercialized before the end of this year. With the 
commercialization of these advanced separation technologies, the U.S. 
coal industry will no longer have to discard fine coal due to the lack 
of appropriate separation technologies. These new technologies will 
help coal companies produce cleaner solid fuels without causing 
environment damage.
    The advanced separation technologies developed at CAST will soon be 
implemented in India. As part of the Asia-Pacific Partnership on Clean 
Development and Climate (APP) program, the U.S. Department of State 
(DoS) provided major funding for CAST through a competitive 
solicitation process to implement advanced separation technologies in 
India. Also, CAST has submitted a proposal to Coal India Limited (CIL), 
which produces 86 percent of the coal in the country, to implement the 
advanced fine coal beneficiation technologies developed by CAST in a 
demonstration plant.
    Some of the advanced separation technologies developed for cleaning 
coal have cross-cutting applications. For example, the methods of 
separating fine particles are used for producing potash (KCl) from 
previously unminable resources in New Mexico. For another, methods of 
separating coarse particles are used for producing phosphate 
fertilizers in Florida.
                            new intitiatives
    Coal is the most abundant energy resource the United States has, 
and it is difficult to displace it with renewable energy resources in a 
relatively short timeframe. Therefore, it is imperative to develop 
methods of utilizing coal with minimal CO2 emissions. To 
meet this objective, it is proposed to develop advanced gas-gas 
separation methods which will have crosscutting applications for many 
ongoing programs such as Carbon Capture and Sequestration (CCS), 
Innovation of Existing Plants, Gasification, and Hydrogen from Coal.
    During the course of studying the basic sciences involved in a 
solid-solid separation process (i.e., froth flotation), CAST has 
developed a new understanding of the behavior of hydrophobic species in 
water. Based on both experimental and theoretical studies, it has been 
found that hydrophobic surfaces attract each other via hydrophobic 
force, which originates from the tendency for water molecules to 
reorganize themselves around hydrophobic entities. These studies have 
lead to an improved understanding of how ice (or hydrate) is formed 
around hydrophobic molecules (e.g., methane on ocean floors), and why 
different gases (e.g., CO2, nitrogen, and hydrogen) form 
hydrates under different conditions, which in turn provide a basis for 
separating one type of gas from another.
    It is, therefore, proposed to separate different types of gases 
from each other by forming hydrates selectively. At present, cryogenic 
distillation is the only commercially viable method of separating 
oxygen and nitrogen, and this new method can potentially reduce the 
cost of producing oxygen substantially. The same method can also be 
used to separate other gases. For example, CO2 and nitrogen 
present in combustion gases can be readily separated from each other as 
shown by thermodynamic calculations and in experiment. It is also found 
that the kinetics of hydrate formation and, hence, the separation 
process can be improved in the presence of appropriate additives. The 
gas-gas separation process based on selective hydrate formation can 
have higher capacity and lower cost than the methods of using 
membranes. The new gas-gas separation method can also be used for 
producing ultra-pure hydrogen for fuel cell applications, which is a 
major objective of the Fuels Program.
    The proposed research can also lead to the development of efficient 
methods of extracting hydrates from permafrost and ocean floors, while, 
at the same time, allowing CO2 to be sequestered in place. 
The Blake Ridge deposit off the Carolina shores alone has 1,300 Tcf of 
methane, which is about six-times larger than the amount of the 
conventional natural gas resource in the United States. Thus, the 
proposed work offers a new approach for separating gases for CCS and 
for the production of clean fuels such as methane and hydrogen from 
coal.
                            funding request
    It is requested that $3 million of research funding for CAST be 
added to the fiscal year 2009 Fuels Program budget, Fossil Energy R&D, 
the U.S. Department of Energy. Continued funding will allow CAST to 
develop advanced technologies that can be used to exploit domestic 
energy resources and help developing countries reduce their 
CO2 emissions. In addition, the new gas-gas separations 
technologies to be developed at CAST will have crosscutting 
applications for a wide spectrum of the Fossil Energy R&D programs.
                                 ______
                                 
      Prepared Statement of the National Mining Association (NMA)
                          nma recommendations
Department of Energy (DOE)
    $156 million for the FutureGen project at Mattoon, Illinois; $382.7 
million for base coal research and development programs; $200 million 
for the Clean Coal Power Initiative (CCPI); $38.5 billion for the loan 
guarantee office to support deployment of advanced coal technologies; 
and $7.5 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. 
NMA opposes the Corps' proposed concept of a new inland waterways 
``lockage fee/tax'' to fund improvements to the Nation's inland 
waterways system.
                               background
Office of Fossil Energy
    NMA strongly supports: $156 million for the FutureGen project at 
Mattoon, Illinois and opposes the administration's proposal to cancel 
the project and use the funding for smaller carbon, capture and 
sequestration projects. In addition, NMA supports the $382.7 million in 
the administration's budget request for base coal research and 
development programs. However, NMA recommends that CCPI be funded at a 
level of $200 million, which would enable DOE to conduct a third 
solicitation targeting advanced technology systems that capture carbon 
dioxide for sequestration.
    While the NMA applauds the administration's commitment to 
accelerating research, development and deployment of technologies that 
will allow the management of carbon emissions at coal-fueled power 
plants, the NMA questions the efficacy of DOE's proposal to cancel the 
FutureGen project as originally configured. Tremendous progress has 
been made since the FutureGen project was announced in 2003 and the NMA 
urges the subcommittee to reject the administration's proposal and to 
fund the FutureGen project as originally configured with the $156 
million requested.
    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 as currently 
configured. NMA believes these programs should be funded at a level of 
at least the President's request of $382.7 million. In addition, the 
advanced turbine program should be funded at $55 million instead of the 
requested level of $28 million. The increase in funding for these and 
other programs will ensure the FutureGen project meets the intended 
goals outlined in the DOE's 2004 report to Congress, ``FutureGen, 
Integrated Sequestration and Hydrogen Research Intiative--Energy 
Independence through Carbon Sequestration and Hydrogen from Coal.''
    The Coal Utilization Research Council and the Electric Power 
Research Institute estimate that by 2025, combustion and gasification-
based power generation options can be available commercially--with the 
ability to capture and sequester CO2--at a cost of 
electricity comparable to the cost of new power generation (with 
CO2 capture) today. This includes the current work on 
FutureGen. In order to achieve this goal, a Federal investment of $10 
billion through 2025 is necessary while the industry investment is 
expected to be $7 billion over that same time.
    In addition, NMA recommends $3 million of funding for the Center 
for Advanced Separation Technologies (CAST), which is a consortium of 
seven universities lead by Virginia Tech. CAST has developed many 
advanced technologies that are used in industry to produce cleaner 
fuels in an environmentally acceptable manner, while some of them have 
crosscutting applications in the minerals industry. Further development 
of advanced separation technologies will help encourage developing 
countries, such as China and India, to deploy affordable clean coal 
technologies (ACCT) and reduce CO2 emissions. Research in 
Advanced Separations is mandated by the 2005 Energy Policy Act, section 
962.
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 $7.5 million to fund 
the 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, Canada, 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. NMA 
recommends that a portion of the Corps' regulatory program funding be 
used for implementing the MOU issued on February 10, 2005, by the 
Corps, the U.S. Office of Surface Mining (OSM), 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.
    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 this regard, the NMA appreciates the 
subcommittee including language in the fiscal year 2008 Omnibus 
appropriations bill directing the Corps to work with OSM to develop a 
more efficient process for expediting permit decisions associated with 
surface coal mining operations; in addition to directing the Corps to 
dedicate sufficient personnel and financial resources needed to support 
an efficient permit review process.
    Civil Works Programs.--The NMA understands the Corps intends to 
provide Congress with a legislative proposal to replace the diesel fuel 
tax that has been in place since 1986, with a ``lockage fee/tax'' that 
would more than double the taxes paid by the towing industry. The coal 
industry ships approximately 185 million short tons of coal annually on 
the inland waterways systems. Therefore, the increase in this tax will 
ultimately be borne by the consumers of coal-fired electricity. NMA 
opposes such a tax increase and urges Congress to reject this proposal 
and instead maintain the current diesel fuel tax and change the Inland 
Waterways Trust Fund cost-sharing formula from 50/50 to 75/25 (Federal/
non-Federal) to ensure predictable, consistent, and adequate funding 
for key inland waterways infrastructure projects. Below is a table 
indicating NMA's fiscal year 2009 priority navigation projects.

                                NMA FISCAL YEAR 2009 PRIORITY NAVIGATION PROJECTS
----------------------------------------------------------------------------------------------------------------
                                                                   Fiscal Year     Fiscal Year         NMA
                          Construction                            2008 Enacted    2009 Request   Recommendations
----------------------------------------------------------------------------------------------------------------
Robert C. Byrd Lock and Dams Ohio River, OH/WV.................        $905,000      $1,000,000       $1,000,000
Kentucky River Lock Addition, Tennessee River, KY..............      51,168,000      22,330,000       34,500,000
Marmet Lock and Dam, Kanawha River, WV.........................      29,520,000       9,000,000        9,000,000
McAlpine Locks and Dams, Ohio River, IN/KY.....................      44,280,000       6,270,000        6,270,000
Locks and Dams 2, 3, 4, Monongahela River, PA..................      69,175,000      40,806,000       40,806,000
J.T. Myers Locks and Dams, Ohio River, IN/KY...................         984,000  ..............       14,624,000
Olmsted Locks and Dams, Ohio River, IL/KY......................     102,336,000     114,000,000      114,000,000
Emsworth Dam, Ohio River, PA...................................      42,312,000      25,800,000       25,800,000
Greenup Lock and Dam, Ohio River, KY/OH........................  ..............  ..............       12,100,000
----------------------------------------------------------------------------------------------------------------

    The National Mining Association (NMA) represents producers of over 
80 percent of the coal mined in the United States. Coal continues to be 
the most reliable and affordable domestic fuel used to generate over 50 
percent of the Nation's electricity. NMA members also include producers 
of uranium--the basis for 20 percent of U.S. electricity supply. NMA 
represents producers of metals and minerals that are critical to a 
modern economy and our national security. Finally, NMA includes 
manufacturers of processing equipment, mining machinery and supplies, 
transporters, and engineering, consulting, and financial institutions 
serving the mining industry.
                                 ______
                                 
           Prepared Statement of the Gas Technology Institute
increase the combustion budget to $4.2 million in the fiscal year 2009 
           energy and water appropriations bill for doe, eere
    Dear Chairman Dorgan and Senator Domenici, we write today because 
we are concerned about the Department of Energy budget request for the 
Industrial Technologies Program within the Energy Efficiency and 
Renewable Energy budget. In particular, we are disappointed to see the 
essential elimination of the Combustion program within the Crosscutting 
Industries of the Future area.
    The combustion focus at the Department has been on development of 
next generation boiler technology, applicable to a variety of 
industrial processes, that is both much more efficient and 
environmentally friendly than existing technology. The Gas Technology 
Institute, Cleaver Brooks, a boiler manufacturer, and a number of gas 
utilities have been working with the DOE, California Air Resources 
Board, California Energy Commission, South Coast Air Quality Management 
District, and others to develop next generation ``Super Boiler'' 
technology.
    Developing a clean, efficient natural gas steam boiler will be a 
boon to the U.S. economy. Increasing energy costs and stringent local 
emissions standards are two reasons why America's industrial facilities 
are re-locating overseas. With 31 percent of industrial energy used for 
steam generation, widespread adoption of Super Boiler technology can 
significantly reduce costs and emissions.
    The Super Boiler system is 94 percent efficient compared to current 
technologies which are around 80 percent efficient. This increase in 
efficiency will provide a 15-20 percent fuel savings, corresponding to 
a 15-20 percent reduction in greenhouse gas emissions, and a 90 percent 
reduction in NOX emissions. Technological development 
efforts for the coming year include fuel flexibility and the use of 
alternative fuels for the boiler, scale up, extensive testing and 
improvements to the heat recovery system that will both further boost 
efficiency and reduce emissions.
    We urge you to fund the DOE Combustion budget at $4.2 million in 
the fiscal year 2009 Energy and Water Appropriations bill for the 
Department of Energy, Energy Efficiency and Renewable Energy 
(Industrial Technologies Program, Industries of the Future 
Crosscutting) for continued development and deployment on Super Boiler 
technology.
    Thank you for considering this request.
                                 ______
                                 
    Prepared Statement of the Alliance for Materials Manufacturing 
                           Excellence (AMMEX)
    The Alliance for Materials Manufacturing Excellence (AMMEX) 
welcomes this opportunity to provide its input to the subcommittee on 
the proposed budget for fiscal year 2009 for the Industrial 
Technologies Program (ITP) at the Department of Energy. 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 ITP to the level of $125 million and to restore the 
structure of the program to one that emphasizes new process development 
in all six materials industries as opposed to cross-cutting research.
    This request would align the program with the authorized funding 
levels and intent of both section 452 (Energy Intensive Industries 
Program) of the Energy Independence and Security Act of 2007, which was 
signed into law on December 19, 2007, as well as the Energy Efficiency 
and Renewable Energy Act of 2007, which passed the House unanimously on 
October 22, 2007.
    U.S. materials manufacturing continues to face challenges resulting 
from increased cost and decreased availability of traditional energy 
supply resources. These challenges have stimulated innovation in the 
materials manufacturing sector in order to create significant energy 
improvements and to diversify the energy supplies. While the 
innovations of the past have brought the materials manufacturing sector 
a long way, the sector cannot go further without new innovations. In 
order to do this, the materials manufacturing processes must be 
transformed, i.e. new processes and new innovations must be developed 
which will use much less energy and which will be able to utilize 
diverse forms of energy.
    The member organizations of AMMEX have been partners with the 
Department of Energy's Industrial Technology Program since its 
inception. 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, increasing competitive advantage of U.S. materials 
manufacturers, and enhancing our national security. The program is 
unique because we select only projects with ``dual benefits''--a public 
benefit such as reduced emissions or petroleum use, justifying the 
Federal funding; and an industry benefit such as a more efficient 
process, justifying the industrial funding. Substantial energy 
reductions have occurred as shown below.



  Figure 1.--Materials Manufacturers have greatly reduced energy use 
           since 1990 because of their co-investment with DOE

    To accomplish these goals, the Federal Government and industry will 
need to embark upon a co-funded effort to broaden and accelerate 
inherently high-risk research, development, and deployment of new 
materials manufacturing processes that utilize diverse energy sources. 
This effort will also allow the materials manufacturing sector to 
lessen dependence on natural gas and oil resources and conventional 
electricity sources--thus benefiting consumers through contribution to 
a stable energy market.
    Furthermore, it is critical to recognize the important 
contributions of ITP to efforts to combat climate change. The 
development of new technology is an extremely important facet to 
dealing with climate change. Most, if not all AMMEX industries have 
voluntarily reduced energy intensity by 25 percent since 1990 in 
partnerships with DOE and only very small gains in energy use are still 
possible for today's processes [red area in above chart].
    Most of the legislative options being considered to reduce 
CO2 and other greenhouse gases employ a target of at least a 
50 percent reduction in CO2 emissions by 2050 over a 2000 
baseline. It is important to acknowledge that achieving such a goal 
with today's manufacturing processes will be very challenging. Thus, we 
are confronted with the ideal opportunity for ITP and AMMEX 
industries--collaboration to accelerate the development and deployment 
of new, transformational technologies to help our country reach its 
CO2 mitigation goals. We would argue there is not a more 
appropriate public-private partnership than one focused on our 
environment. It is the method of choice employed by our competitors in 
Europe and Asia.
    The infrastructure already exists to create such a program--only a 
slight re-focusing of the ITP program and a return to historical budget 
levels is all that is needed for the Federal Government and materials 
industries to embark upon a co-funded effort to broaden and accelerate 
inherently high-risk research, development, and deployment of new 
materials manufacturing processes that utilize diverse energy sources.
    Consequently, our request for funding in fiscal year 2009 for ITP 
entails two parts:
  --A return to a total program level of $125 million, bringing the 
        funding amount closer to the level authorized in the Energy 
        Independence and Security Act of 2007.
  --A re-structuring of the program so as to return to the structure 
        that was so successful from 1990-2003--a balanced portfolio of 
        industry-specific research from the point of view of research 
        impact, i.e., that 50 percent or more of the funding go to 
        industry specific new process development [where the energy 
        savings potential in industry is highest].
    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
  --Complete development and deployment to multiple industries of 
        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
    The United States also faces serious shortages in the science and 
engineering manpower that is needed to keep America's competitive edge 
in world markets through technology innovation and timely application. 
From the President's recent State of the Union Addresses to recent 
legislation passed by Congress, the Nation is awakening to the need for 
a re-energizing of our commitment to technology education. Our proposal 
to the subcommittee is an effort to both rebuild America's materials 
manufacturing industries and meet shared national energy and 
environmental goals.
    On behalf of the AMMEX coalition, we thank you for the opportunity 
to submit this statement. We look forward to continuing to work with 
the subcommittee as you move forward on the fiscal year 2009 
appropriations legislation for the Department of Energy.
                                 ______
                                 
    Prepared Statement of the American Forest and Paper Association
                    agenda 2020 technology alliance
    The Agenda 2020 Technology Alliance, a Special Project of the 
American Forest & Paper Association (AF&PA) welcomes this opportunity 
to provide the subcommittee with our views on the 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 2009. The EERE Industrial 
Technologies Program (ITP) and 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 increasing the industry 
specific funding for the forest products industry in ITP to $6 million. 
We support the President's request for $225 million for Biomass and 
Biorefinery Systems R&D in OBP and ask that the subcommittee work to 
maintain 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.
    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 
address market demands for materials from renewable sources, while also 
contributing solutions to strategic national needs including energy 
reduction and sustainability. The technology approaches 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, more 
than 145 pulp and paper mills have closed in the United States, 
contributing to a loss of 86,000 jobs, or 40 percent of our workforce. 
An additional 80,000 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 several 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 $1 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 80 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 2009, a further funding reduction is proposed and emphasis 
shifted from industry specific funding. Unfortunately, the types 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 $1.448 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.
    Second, 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 IFPB 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 the 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 a new domestic bioindustry.
    In light of these realities, AF&PA and Agenda 2020 also support the 
administration's announced $225 million budget initiative in fiscal 
year 2009 for biorefinery research and demonstration in OBP. 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 industrywide 
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. 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.
    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 subcommittee to 
preserve the proposed $225 million funding of the Biomass and 
Biorefinery Systems R&D program, so that there will be sufficient 
appropriations to fund biorefinery demonstration and commercialization 
projects. We also urge the subcommittee 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.
    The Agenda 2020 Technology Alliance appreciate the subcommittee'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 Vision2020 Technology Partnership, Glass 
   Manufacturing Industrial Council, Copper Development Association, 
  International Copper Association, Hydraulic Institute, Pump Systems 
      Matter, and the Vanadium Producers & Reclaimers Association
    Mr. Chairman, we respectfully request that the subcommittee grant 
restoration of appropriations funding in the fiscal year 2009 
Department of Energy Appropriations bill to match the $190 million 
authorized for the Industrial Technology Program (ITP) within the 
Energy Efficiency and Renewable Energy Act of 2007.
    The submitting coalition represents a broad range of energy 
intensive sectors including chemical and chemical allied industries, 
the copper industry including mining, producer and fabricating 
companies, organizations focused on hydraulic and pump system 
technology, the domestic glass industry sectors including flat, 
container, fiber and specialty glass and the domestic vanadium 
producers and reclaiming companies. We believe that the Industrial 
Technologies Program is critical to boost Federal and corporate R&D 
investments into novel applications that will help move our industries 
towards higher energy efficiency.
    Environmental quality, economic vitality and national security are 
all at risk due to the inability of the United States to effectively 
conserve energy as the country continues to grow and expand the 
national standard of living. Energy conservation is now a national 
goal. While renewable energy processes are one part of the solution, 
undertaking energy efficiency is as necessary as ever before. Both 
President Bush and the Congress have recognized that technology is the 
key to both energy efficiency and renewable energy.
    In the United States, industry accounts for over one-third of all 
energy consumption. Of that, the majority is consumed by several heavy 
industries including chemical, glass and metals production, aluminum, 
mining, petroleum refining, forest and paper products, and supporting 
industries. These groups all consume high amounts of energy per unit of 
production, making them a prime target for energy efficiency efforts. 
In addition, the rising cost of energy has the potential to put these 
industries at a competitive disadvantage with other nations.
    While the President and Congress have continually supported 
industrial energy efficiency efforts, the funding provided has not 
matched the problem. Funding has dropped from $175 million in fiscal 
year 2000 to $57 million in fiscal year 2007. The House Committee on 
Science and Technology noted on September 25, 2007 that ``these funding 
levels reflect a dramatic shift in priorities away from industrial 
efficiency R&D.'' Fortunately, Congress recognizes the need to increase 
funding levels through its own authorization of $190 million in fiscal 
year 2008 for the Industrial Technology Program.
    The Industrial Technology Program (ITP) is a competitive, public-
private partnership program which works to utilize research and 
development in cutting edge, high-value cost sharing methods to improve 
the energy efficiency of America's industrial sector. The ITP operates 
through coordinated research and development, validation, and 
dissemination of energy-efficiency technologies and operating 
practices. ITP projects have already won dozens of ``R&D 100 Awards'' 
and have generated over 150 patents on exciting new technologies. Dual 
use benefits for both public and industrial uses are required by the 
ITP. Nearly 200 technologies have reached the commercial market 
assisting over 13,000 U.S. manufacturing plants and leading to $23 
billion worth of energy savings.
    All programs which are awarded competitive funding must meet the 
shared goal of reducing energy consumption, reducing environmental 
impacts and increasing the competitive advantage of U.S. material 
manufacturers. In addition, while cross-cutting technologies are 
valuable, the application of ITP technologies to individual industries 
is critical and needs to be strengthened with additional funding. It is 
in this application at the factory level where the vast majority of the 
actual energy savings and environmental protection will be recognized.
    In order to fully recognize the potential benefits of the ITP, it 
is imperative that Congress fully fund the ITP at the level of $190 
million. This is the level seen as necessary by the authorizing 
committees with jurisdiction and rightly so, given the environmental 
benefits, national security needs for energy independence, and economic 
productivity gains which can be realized in energy efficiency efforts 
aimed at the U.S. industrial sector. A national imperative focused on 
the ITP will help get us there.
                                 ______
                                 
        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 2009 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 (R&D), eliminates mandated direct 
spending of $50 million for unconventional onshore and ultra deep water 
offshore natural gas R&D, includes a decimating cut to hydropower R&D 
and does not fulfill some of the geothermal and carbon sequestration 
R&D funding authorized in the Energy Independence and Security Act of 
2007.
    Given the interest of the administration and Congress to reduce the 
Nation's foreign oil dependence, reduce prices on fossil fuels and 
mitigate carbon emissions from fossil fuels, it seems like an 
inopportune time to eliminate or under fund programs that could help 
with these objectives. We hope that Congress will support wise 
investments for all energy resource programs and carbon sequestration 
R&D. AGI applauds the requested 18 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 applaud the request of $30 million for geothermal R&D 
and an increase of about $35 million for carbon sequestration R&D, both 
of which partially fulfill the Energy Act of 2007. We ask for the 
subcommittee's continued support for oil and gas, unconventional 
natural gas, geothermal, hydropower and carbon sequestration R&D so the 
Nation can develop a diverse portfolio of energy resources while 
enhancing carbon mitigation strategies to secure clean, affordable and 
secure energy supplies for now and the future.
    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 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 about 15 percent from about $3.9 billion last year to $4.7 
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 24 percent from $1.27 billion in fiscal 
year 2008 to $1.57 billion in fiscal year 2009 in the President's 
request. Within the BES, Chemical Sciences, Geosciences and Biosciences 
would receive a $75 million increase over their fiscal year 2008 budget 
for a total of $297 million. The Geoscience program provides peer-
reviewed grants to universities and DOE national laboratories for 
fundamental Earth science research in geochemistry, hydrology, rock 
mechanics, and geophysical imaging. The $7.5 million increase 
specifically for the Geoscience research program is focused on solid 
earth geophysics and geochemistry to understand the stability and 
transformation of deep carbon sequestration, nanoscale geochemistry, 
chemical imaging, experimental and theoretical studies of complex 
subsurface fluids and mid-scale instrumentation.
    The President's request for the Office of Science only partially 
fulfills the carbon sequestration R&D and large-scale demonstration 
project, which was authorized to receive $240 million in fiscal year 
2009 and the carbon sequestration university-based R&D which was 
authorized to receive $10 million in fiscal year 2009. An additional 
$30 million is requested for carbon sequestration R&D and demonstration 
within the Office of Fossil Energy to partially satisfy the wise 
investments called for in the Energy Act of 2007. AGI requests that 
funding for carbon sequestration R&D in the Office of Science and the 
Office of Fossil Energy be increased to fulfill the intent of the 
Energy Act of 2007.
               doe energy efficiency and renewable energy
    Within DOE Energy Efficiency and Renewable Energy, the President's 
fiscal year 2009 budget request would cut funding by 27 percent or $467 
million. We are concerned about the cuts to alternative energy R&D 
programs, in particular the reduction of more than 70 percent (a cut of 
almost $7 million) for hydropower R&D which would decimate the program. 
A balanced portfolio of R&D across many promising energy resources 
should be maintained with steady funding to help ensure energy supplies 
in a changing world.
    AGI applauds the $30 million requested for geothermal R&D and 
greatly appreciates previous support from Congress for this key 
alternative energy resource. The geothermal research program within the 
Renewable Energy account, which funds Earth science research in 
materials, geofluids, geochemistry, geophysics, rock properties, 
reservoir modeling, and seismic mapping, would receive an increase of 
51 percent from fiscal year 2008 enacted levels only one year after the 
administration slated the program for termination. The new funds for 
geothermal satisfy in part an authorization in the Energy Independence 
and Security Act of 2007, which calls for $90 million for geothermal 
R&D in fiscal year 2009.
               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 2009 Energy and Water Development 
Appropriations bill. Over the past 8 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. On February 
28, 2007 this subcommittee held a hearing on the ``10-Year Energy 
Research and Development Outlook'' in which the Energy Information 
Administrator Guy Caruso noted the Nation's need for fossil fuels over 
the next 30 years and the other expert witnesses noted 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 and 
expert testimony presented to your subcommittee. 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 developing new 
technologies concentrated on our domestic resources. 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 program has produced many key successes among the typical 
short-term (1 to 5 years) projects usually chosen by the DOE. And even 
failed projects have proven beneficial, because they've often resulted 
in redirection of effort toward more practical exploration and 
production solutions.
    In 2003, at the request of the 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 
2009 budget request continues the alarming reduction of energy R&D 
funding by eliminating all funding for our primary energy resources, 
oil and gas. 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. 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.
    Perhaps one of the most promising areas of R&D for domestic oil 
supplies are in the ultra deep 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 ultra deep 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 ultra deep 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.
    Thank you for the opportunity to present this testimony to the 
subcommittee.
                                 ______
                                 
 Prepared Statement of the American Society of Agronomy, Crop Science 
      Society of America, and the Soil Science Society of America
    Dear Chairman Dorgan, Ranking Member Domenici and members of the 
subcommittee, the American Society of Agronomy, Crop Science Society of 
America, and Soil Science Society of America (ASA-CSSA-SSSA) are 
pleased to submit the following funding recommendations for the 
Department of Energy for fiscal year 2009. For the Office of Science, 
ASA-CSSA-SSSA recommend a funding level of $4.722 billion, an 18 
percent increase over fiscal year 2008 ($3.973 billion). For the Office 
of Energy Efficiency and Renewable Energy, we recommend a funding level 
of $1.843 billion, a 7 percent increase over fiscal year 2008. We 
recommend a funding level of $6.094 billion, a 7 percent increase, for 
the Office of Environmental Management. Specifics for each of these and 
other budget areas follow below.
    With more than 25,000 members and practicing professionals, ASA-
CSSA-SSSA are the largest life science professional societies in the 
United States dedicated to the agronomic, crop and soil sciences. ASA-
CSSA-SSSA play a major role in promoting progress in these sciences 
through the publication of quality journals and books, convening 
meetings and workshops, developing educational, training, and public 
information programs, providing scientific advice to inform public 
policy, and promoting ethical conduct among practitioners of agronomy 
and crop and soil sciences.
                 department of energy office of science
    The American Society of Agronomy, Crop Science Society of America, 
and Soil Science Society of America (ASA-CSSA-SSSA) understand the 
challenges the House Energy and Water Appropriations Subcommittee faces 
with the tight budget for fiscal year 2009. We also recognize that the 
Energy and Water Appropriations bill has many valuable and necessary 
components, and we applaud the subcommittee for funding the DOE Office 
of Science in the fiscal year 2008 Omnibus Appropriations bill at 
$3.973 billion. Under the Energy Policy Act of 2005 (Public Law 109-
58), the Office of Science is authorized to receive $5.2 billion in 
fiscal year 2009. Congress approved the America COMPETES Act of 2007 
(Public Law 110-69), recognizing that an investment in basic 
(discovery) scientific research is essential to providing America the 
brainpower necessary to maintain a competitive advantage in the global 
economy and keep U.S. jobs from being shipped overseas. The President's 
request of $4.722 billion is consistent with the America COMPETES Act, 
which authorizes the doubling of the Office of Science's budget over a 
7-year period. Such an investment is needed to keep U.S. science and 
engineering at the forefront of global research and development in the 
biological sciences and geosciences, computing and many other critical 
scientific fields. The Office of Science supports graduate students and 
postdoctoral researchers early in their careers. Nearly one-third of 
its research funding goes to support research at more than 300 colleges 
and universities nationwide. Moreover, approximately half the users at 
Office of Science user facilities are from colleges and universities, 
providing further support to their researchers. The Office of Science 
also reaches out to America's youth in grades K-12 and their teachers 
to help improve students' knowledge of science and mathematics and 
their understanding of global energy and environmental challenges. This 
recommended funding level of $4.722 billion is critical to ensuring our 
future energy self-sufficiency and as a means to address major 
environmental challenges including global climate change. Finally, a 
funding level of $4.722 billion will allow the Office of Science to: 
maintain and strengthen DOE's core research programs at both the DOE 
national laboratories and at universities; provide support for 1,000 of 
PhD's, postdoctoral associates, and graduate students in fiscal year 
2009; ensure maximum utilization of DOE research facilities; allow the 
Office of Science to develop and construct the next-generation 
facilities necessary to maintain U.S. preeminence in scientific 
research; and enable DOE to continue to pursue the tremendous 
scientific opportunities outlined in the Office of Science Strategic 
Plan and in its 20 Year Scientific Facilities Plan.
                         basic energy sciences
    Within the Office of Science, the Basic Energy Sciences (BES) 
Program is a multipurpose, scientific research effort that fosters and 
supports fundamental research to expand the scientific foundations for 
new and improved energy technologies and for understanding and 
mitigating the environmental impacts of energy use. ASA-CSSA-SSSA 
support the President's fiscal year 2009 request of $1.568 billion, a 
23 percent increase over fiscal year 2008, for BES. The portfolio of 
programs at BES supports research in the natural sciences by focusing 
basic (discovery) research on, among other disciplines, biosciences, 
chemistry and geosciences. Practically every element of energy 
resources, production, conversion and waste mitigation is addressed in 
basic research supported by BES programs. Research in chemistry has 
lead to the development of new solar photoconversion processes and new 
tools for environmental remediation and waste management. Research in 
geosciences leads to advanced monitoring and measurement techniques for 
reservoir definition. Research in the molecular and biochemical nature 
of photosynthesis aids the development of solar photo-energy 
conversion.
    Within the Basic Energy Sciences Program, the Chemical Sciences, 
Geosciences, and Energy Biosciences subprogram supports fundamental 
research in geochemistry, geophysics and biosciences. The Geosciences 
Research Program supports research focused at developing an 
understanding of fundamental Earth processes that can be used as a 
foundation for efficient, effective, and environmentally sound use of 
energy resources, and provide an improved scientific basis for advanced 
energy and environmental technologies. The Biosciences Research Program 
supports basic research in molecular-level studies on solar energy 
capture through natural photosynthesis; the mechanisms and regulation 
of carbon fixation and carbon energy storage; the synthesis, 
degradation, and molecular interconversions of complex hydrocarbons and 
carbohydrates; and the study of novel biosystems and their potential 
for materials synthesis, chemical catalysis, and materials synthesized 
at the nanoscale.
                 biological and environmental research
    Within the Office of Science, the Biological and Environmental 
Research (BER) Program, for more than five decades, has advanced 
environmental and biological knowledge that supports national security 
through improved energy production, development, and use; international 
scientific leadership that underpins our Nation's technological 
advances; and research that improves the quality of life for all 
Americans. BER supports these vital national missions through 
competitive and peer-reviewed research at national laboratories, 
universities, and private institutions. In addition, BER develops and 
delivers the knowledge needed to support the President's National 
Energy Plan. ASA-CSSA-SSSA support a 7 percent increase for BER which 
would bring the funding level to $582,504,790 for fiscal year 2009. 
ASA-CSSA-SSSA support a variety of programs within BER including the 
Life Sciences subprogram which supports Carbon Sequestration Research 
(we recommend a 7 percent increase, bringing the funding level to 
$7,625,890), and the Genomes to Life (GTL) program (we also recommend a 
7 percent increase to bring funding to $163,422,170). Within Genomes to 
Life (GTL) are programs supportive of bioenergy development including 
GTL Foundation Research, GTL Sequencing, GTL Bioethanol Research, and 
GTL Bioenergy Research Centers, all playing an important role in 
achieving energy independence for America. Also within BER is the 
Environmental Remediation subprogram and its Environmental Remediation 
Sciences Research program, both critical programs to advancing tools 
needed to clean up contaminated sites. ASA-CSSA-SSSA support the 
President's budget request for the Climate Change Research subprogram 
in BER which calls for a 13 percent increase bringing the funding level 
to $154,927,000. This subprogram supports many important areas of 
climate change research including: Climate Forcing which supports the 
Terrestrial Carbon Processes program and supports the Ameriflux network 
of research sites (which should receive a 7 percent increase, bringing 
funding to $14,379,730), as understanding the role that terrestrial 
ecosystems play in capturing and storing carbon is essential to 
developing strategies to mitigate global climate change. An additional 
program of high importance within the Climate Change Research 
subprogram is the Climate Change Response and its associated programs--
Ecosystem Function and Response, and Education. Finally, also under the 
Climate Change Research subprogram is the Climate Change Mitigation 
program, part of BER's support to the Climate Change Technology 
Program, which will continue to focus only on terrestrial carbon 
sequestration.
 department of energy office of energy efficiency and renewable energy
    Biomass is currently the only clean, renewable energy source that 
can help to significantly diversify transportation fuels in the U.S. 
DOE's Energy Efficiency and Renewable Energy Biomass Program is helping 
transform the Nation's renewable and abundant biomass resources into 
cost competitive, high performance biofuels, bioproducts, and biopower. 
The Office of Energy Efficiency and Renewable Energy (EERE) manages 
America's investment in the research and development (RD&D) of DOE's 
diverse energy efficiency and renewable energy applied science 
portfolio. For the Office of Energy Efficiency and Renewable Energy, we 
recommend a funding level of $1.843 billion, a 7 percent increase over 
fiscal year 2008. The fiscal year 2009 EERE budget maintains focus on 
key components of the AEI and Twenty in Ten including the Biofuels 
Initiative to develop affordable, bio-based transportation fuels from a 
wider variety of feedstocks and agricultural waste products.
    Note: ASA-CSSA-SSSA strongly oppose the use by the Department of 
the term ``agricultural wastes''. Crop residues, e.g., corn stover, 
play a very important role in nutrient cycling, erosion control and 
organic matter development. Recent studies have shown that excessive 
removal of crop residues from agricultural lands can lead to a decline 
in soil quality. By no means should they ever be referred to as 
``wastes''.
                    biomass and biorefinery systems
    Within EERE, the Biomass and Biorefinery Systems plays an important 
role providing support for Regional Biomass Feedstock Development 
Partnerships and Infrastructure Core R&D programs, both within 
Feedstock Infrastructure. Activities included within this program are 
resource assessment, education, sustainable agronomic systems 
development, and biomass crop development. The mission of the Biomass 
Program is to develop and transform our domestic, renewable, and 
abundant biomass resources into cost-competitive, high performance 
biofuels, bioproducts and biopower through targeted RD&D leveraged by 
public and private partnerships. ASA-CSSA-SSSA support the President's 
request for a 25 percent increase for the Feedstock Infrastructure 
program which would bring the funding level to $15,500,000.
        department of energy office of environmental management
    ASA-CSSA-SSSA urge the subcommittee to provide the Office of 
Environmental Management (EM) a 7 percent increase for fiscal year 2009 
which would bring total funding for EM to $6.094 billion. EM supports 
high-priority soil and ground water remediation and excess D&D at 
Portsmouth, Paducah, Los Alamos, Savannah River, Oak Ridge, Idaho, 
Hanford, and other sites. Technology Development and Deployment 
supports tank waste, soil and groundwater, and facility D&D.
                        climate change research
    ASA-CSSA-SSSA urge the subcommittee to continue to provide strong 
support for Climate Change Research to the following programs as 
follows: Climate Change Science Program (CCSP), $145,940,000; Climate 
Change Research Initiative (CCRI), $23,672,000; and Climate Change 
Technology Program (CCTP), $833,301,000. These three programs together 
will increase our understanding of the impacts of global climate change 
and also develop tools and technologies to mitigate these impacts.
                   basic and applied r&d coordination
    The Office of Science continues to coordinate basic research 
efforts in many areas with the Department's applied technology offices. 
Within this area is Carbon Dioxide Capture and Storage R&D (we 
recommend a 7 percent increase, bringing total funding to $18,055,000). 
The BER research includes understanding, modeling, and predicting the 
processes that control the fate of carbon dioxide injected into 
geologic formations, subsurface carbon storage, and the role of 
microbes and plants in carbon sequestration in both marine and 
terrestrial environments.
                         national laboratories
    The Office of Science manages 10 world-class laboratories, which 
often are called the ``crown jewels'' of our national research 
infrastructure. The national laboratory system, created over a half-
century ago, is the most comprehensive research system of its kind in 
the world. Five are multi-program facilities including the Oak Ridge 
National Laboratory. In the 2007 fiscal year, these facilities were 
used by more than 21,000 researchers from universities, national 
laboratories, private industry, and other Federal science agencies.
              national energy technology laboratory (netl)
    NETL's Carbon Sequestration Program is helping to develop 
technologies to capture, purify, and store carbon dioxide 
(CO2) in order to reduce greenhouse gas emissions without 
adversely influencing energy use or hindering economic growth. 
Terrestrial sequestration requires the development of technologies to 
quantify with a high degree of precision and reliability the amount of 
carbon stored in a given ecosystem. Program efforts in this area are 
focused on increasing carbon uptake on mined lands and evaluation of 
no-till agriculture, reforestation, rangeland improvement, wetlands 
recovery, and riparian restoration. ASA-CSSA-SSSA urge the subcommittee 
to direct the Department to increase funding for its terrestrial carbon 
sequestration program, specifically The Regional Carbon Sequestration 
Partnerships, which are collaborations between Government, industry, 
universities, and international organizations funded by DOE to 
determine the most suitable technologies, regulations, and 
infrastructure needs for carbon capture and sequestration.
                  oak ridge national laboratory (ornl)
    ORNL is one of the world's premier centers for R&D on energy 
production, distribution, and use and on the effects of energy 
technologies and decisions on society. Clean, efficient, safe 
production and use of energy have long been our goals in research and 
development. At ORNL, unique facilities for energy-related R&D are used 
both for technology development and for fundamental investigations in 
the basic energy sciences that underpin the technology work.
    Thank you for your thoughtful consideration of our requests.
                                 ______
                                 
  Prepared Statement of the Friends Committee on National Legislation 
                               (Quakers)
    The Friends Committee on National Legislation (Quakers) makes the 
following recommendations on budget request of the National Nuclear 
Security Administration for fiscal year 2009 (fiscal year 2009):
  --Reliable Replacement Warhead.--Under the Weapons Activities/
        Directed Stockpile Work program, delete all funding from the 
        $10 million requested. Include in the committee report the same 
        language that was in the Consolidated Appropriations Act, 2008: 
        ``No funding is provided for the Reliable Replacement 
        Warhead.''
  --International Nuclear Materials Protection and Cooperation.--Under 
        the Defense Nuclear Nonproliferation program, increase funding 
        by $195 million, from the requested $430 million to $625 
        million for fiscal year 2009. This would be the same amount as 
        was appropriated for fiscal year 2008.
  --Nonproliferation and Verification R&D.--Under the Defense Nuclear 
        Nonproliferation program, we oppose the administration's 
        proposed budget cut of $112 million and support a funding level 
        closer to the fiscal year 2008 level of $387 million, but make 
        no specific suggestion.
  --Global Threat Reduction Initiative.--Under the Defense Nuclear 
        Nonproliferation program, we strongly support the 
        administration's proposed increase of $26 million for fiscal 
        year 2009, to $220 million.
    Reliable Replacement Warhead.--Congress wisely rejected the 
administration's request for the Reliable Replacement Warhead for 
fiscal year 2008. The arguments have not changed since last year.
    The Joint Explanatory Statement to the Consolidated Appropriations 
Act for fiscal year 2008 explains:

    ``As stated in both the House and Senate reports, Congress believes 
a new strategic nuclear deterrent mission assessment for the 21st 
century is required to define the associated stockpile requirements and 
determine the scope of the weapons complex modernization plans. The 
NNSA is directed to develop a long-term scientific capability roadmap 
for the national laboratories to be submitted to the Committee on 
Appropriations.''

    FCNL agrees. The United States still has no 21st century nuclear 
weapons policy in place. Until the reports mandated by the fiscal year 
2008 defense authorization bill are completed, there is no framework to 
base long-term nuclear stockpile decisions on.
    The nuclear stockpile continues to be annually certified as safe 
and reliable by the Secretaries of Defense and Energy. There remains no 
need to rush to replace the plutonium pits in warheads, which have been 
found to have lifetimes of a century or more.
    Additionally, further development of RRW could have serious adverse 
international security consequences. Proceeding with RRW would send the 
wrong message to would-be proliferators, and undermine ongoing efforts 
to curb the nuclear programs of Iran and North Korea. Development of a 
new U.S. warhead would also provide nuclear weapons advocates in Russia 
with effective material to lobby for more aggressive Russian nuclear 
weapons modernization programs. Senator Sam Nunn's 2007 testimony 
before your House Subcommittee counterpart remains as relevant today:

    ``[I]f Congress gives a green light to this [RRW] program in our 
current world environment, I believe that this will be: misunderstood 
by our allies; exploited by our adversaries; and complicate our work to 
prevent the spread and use of nuclear weapons.''

    Finally, FCNL rejects the Energy Department (DOE) assertion that 
pursuing the RRW program is the only way to elicit the data needed to 
address stockpile certification concerns raised by the September 7, 
2007 review of RRW by the JASON Defense Advisory Group.
    We believe DOE can address the stockpile certification concerns 
raised by the JASONs review without developing RRW. The Joint 
Explanatory Statement to the Consolidated Appropriations Act for fiscal 
year 2008 also reaches this conclusion. By creating the Advanced 
Certification campaign to address these certification issues and 
simultaneously zeroing out the RRW program, the subcommittee (in 
conjunction with your House counterpart) determined that these issues 
could be pursued without advancement of the RRW program.
    Nuclear Nonproliferation Programs.--Hundreds of tons of nuclear 
weapons materials are stored at inadequately secured facilities in 
Russia and perhaps 20 other countries. One hundred and ten pounds of 
highly enriched uranium could be fashioned into a crude nuclear weapon 
by a committed group of violent extremists. Such a weapon would destroy 
downtown New York, killing more than half-a-million people from the 
immediate effects of the explosion. The cost would be well over $1 
trillion from the staggering economic disruption. A nuclear detonation 
in any U.S. city would cause devastation that would make the 9/11 
attack and the Katrina hurricane pale in comparison.
    These programs continue to enjoy strong support across the 
political spectrum, as evidenced by these statements from the past few 
months (emphasis added):

    ``. . . the Department of Defense's Cooperative Threat Reduction 
program and the Department of Energy's nuclear nonproliferation 
programs . . . address perhaps the single biggest threat to the U.S. 
homeland, the threat of nuclear terrorism and other weapons of mass 
destruction.'' Rep. Ike Skelton, Chairman, House Armed Service 
Committee, press release, December 7, 2007.

    ``Nuclear nonproliferation programs such as the NNSA's Global 
Threat Reduction Initiative, GTRI, are some of the most important tools 
we have to curb the threat of nuclear material being acquired by those 
who wish to do us harm.'' Sen. Pete V. Domenici, Ranking Member, Senate 
Appropriations Subcommittee on Energy and Water Development, 
Congressional Record, December 12, 2007, p. S15228.

    ``The proliferation of weapons of mass destruction remains the 
number one national security threat facing the United States and the 
international community.'' Sen. Richard G. Lugar, Ranking Member, 
Senate Foreign Relations Committee, ``Remarks at the Defense in Depth 
against WMD CPC Conference,'' Chantilly, VA, January 30, 2008.

    The House Budget Resolution for fiscal year 2009 also reaches the 
same conclusions:

    ``It is the policy of this resolution that . . . implementing the 
recommendation of the National Commission on Terrorist Attacks Upon the 
United States (commonly referred to as the 9/11 Commission) to 
adequately fund cooperative threat reduction and nuclear 
nonproliferation programs (securing `loose nukes') is a high priority 
and should receive far greater emphasis than the President's budget 
provides;'' H. Con. Res. 312, sec. 502, March 7, 2008 (emphasis added).

    Even the administration's budget request agrees:

    ``The convergence of heightened terrorist activities and the ease 
of moving materials, technology and information across borders have 
made the potential for terrorism involving weapons of mass destruction 
(WMD) the most serious threat facing the Nation. Preventing WMD from 
falling into the hands of terrorists is the top national security 
priority of this administration.'' Department of Energy, Fiscal Year 
2009 Congressional Budget Request, vol. 1, p. 453, February 2009 
(emphasis added).

    However, the administration's budget request does not match its 
rhetoric. We ask the subcommittee to increase the nuclear 
nonproliferation programs to at least last year's levels.
    We greatly appreciate the termination of the Reliable Replacement 
Warhead program in the Consolidated Appropriations Act for Fiscal Year 
2008. We also appreciate the additional funds the subcommittee provided 
for nuclear nonproliferation programs in the Continuing Resolution, the 
Supplemental Appropriations Act, and the Consolidated Appropriations 
Act. We believe the country is more secure because of your actions. We 
urge you again to apply those priorities to your fiscal year 2009 bill.
    Thank you for your consideration.
                                 ______
                                 
             Prepared Statement of the US Fuel Cell Council
    Chairman Dorgan, Ranking Member Domenici, and distinguished members 
of the subcommittee, on behalf of the 110 organizations of the US Fuel 
Cell Council (USFCC), I want to thank this subcommittee for supporting 
fuel cell funding over the years. We are writing to urge strong support 
for fuel cell and hydrogen programs managed by the Department of 
Energy. Specifically, we request the subcommittee to consider the 
following:
  --Provide $20 million to establish a Market Transformation program.
  --Restore $39 million to continue Hydrogen Production and Delivery 
        R&D.
  --Add $15 million to Technology Validation (managed by Vehicle 
        Technologies--Hybrid Electric Systems).
  --Add $5 million to restore EERE Manufacturing R&D.
  --Add $10 million to Fossil Energy's SECA program.
  --Add $4 million to Safety Codes and Standards, and maintain current 
        jurisdiction.
  --Maintain Education jurisdiction under the Hydrogen Technology 
        Program and fund at $4 million.
  --Restore $2 million to continue Fuel Processor R&D.
    Fuel cells are a family of technologies that are being developed 
for portable, stationary and transportation applications.
    These technologies offer a unique combination of benefits. And 
while our industry has invested billions to develop fuel cells for 
portable, stationary and transportation applications, we view our 
partnership with the Federal Government as vital. Funding for other 
worthwhile technologies must not come at the expense of the hydrogen 
program, as we feel this would impede efforts to become more energy 
independent.
    Establishing a Market Transformation program is a top priority for 
industry. Last year the Senate Energy and Water Appropriations 
Subcommittee provided funding for this endeavor; however, the measure 
was not included in the final appropriations bill. The program, when 
funded, will fulfill congressional intent as outlined in sections 782 
and 783 of the Energy Policy Act of 2005.
    The Market Transformation program will allow the Department of 
Energy to assist other agencies to purchase portable, stationary and 
transportation fuel cell systems. The program, which is voluntary, is 
seen by industry as a key component to commercialization as it would 
also help fuel cell manufacturers increase output, thereby reducing 
costs and creating economies of scale. It would also allow more Federal 
agencies to comply with new energy efficiency guidelines as directed by 
Executive Order.
    Unfortunately, the President's fiscal year 2009 request cuts or 
changes a number of critical path programs, including Hydrogen 
Production and Delivery R&D Fuel Processor R&D and Manufacturing R&D. 
These programs are designed to maximize availability of fuel cells and 
hydrogen at an affordable price.
    With regard to Hydrogen Production R&D and Delivery, the 
administration justifies the elimination of the program by stating that 
the ``core technology readiness goals established for 2015 can be met 
with the technologies for producing hydrogen from natural gas that were 
developed in prior years, so . . . near-term hydrogen production is no 
longer a critical-path barrier.'' We disagree. Cost-effective and 
environmentally benign methods of reforming hydrocarbons are still not 
commercially feasible. Several technical challenges remain, including 
low cost desulfurization methods. Current refining methods often 
produce flammable and/or hazardous waste. While alternative 
desulfurization materials can avoid these problems, they are 
prohibitively expensive--as much as 10 times the current cost. If 
reinstated by Congress, the Department should be instructed to fund 
improvements in removing sulfur-containing odorants from natural gas 
and liquefied petroleum gas. In addition, a coordinated, nationwide (or 
even international) effort to replace sulfur-containing odorants with 
non-sulfur-containing odorants should be initiated.
    In the transportation arena, there is growing support for ethanol 
and other biofuels, and for hybrid vehicles as responses to our energy 
challenge. These programs would not, by themselves, solve our problem. 
They would, however buy us time to make the transition to hydrogen. 
Automakers still view hydrogen as the ultimate transportation fuel as 
it allows long range driving, short fueling time with little to zero-
emissions. The public/private partnership in fuel cells is working, and 
more development and demonstration is needed.
    Work performed by the Technology Validation program is designed to 
demonstrate the performance of hydrogen infrastructure and fuel cell 
systems under real world operating conditions. If development work were 
to stop due to lack of funding it could take years or even decades to 
revive the effort. By restoring funding to fiscal year 2008 levels, the 
Department and private industry will continue to collect necessary data 
to continue development of fuel cells for vehicles
    Manufacturing R&D was also eliminated in the fiscal year 2009 
request. Last year, the administration put significant focus on this 
program as it was critical to ``cultivate a robust domestic 
manufacturing capability in evolving hydrogen infrastructure and fuel 
cell technologies, vital to establishing U.S. economic leadership in 
emerging hydrogen and fuel cell industries.'' After 1 year and a single 
round of solicitations awarded, the administration now feels the 
program is not a critical-path barrier to achieving the programs core 
technology readiness goals for 2015.
    Once again, we disagree with the President's plan. The Department, 
in cooperation with private industry, has made great strides in 
reducing the high-volume cost of fuel cells. Eliminating this program 
in its infancy will only delay efforts to bring the cost of fuel cells 
down.
    With regard to the Fossil Energy (FE) activities, we request $70 
million for fuel cell activities, which includes funding for the Solid 
State Energy Conversion Alliance (SECA). The SECA program is designed 
to develop high-efficiency fuel cells that are capable of utilizing a 
variety of domestically available fuel, including coal gas, ethanol and 
other biofuels.
    Proposed program cuts aside, we feel that most of the program 
reorganizations suggested are unnecessary. For example, a proposal to 
move hydrogen Education and Codes and Standards staff from the hydrogen 
program to the vehicle technologies program, in the name of 
consolidation, is misguided. Department leadership describes these as 
``complementary'' activities, however we strongly disagree.
    If altered, we fear the Department will not be able to accomplish 
its stated mission to educate the public, code and safety officials, 
and support DOE Market Transformation activities. Given the 
transformational nature of hydrogen, we believe these positions 
properly should remain within the hydrogen program for maximum 
effectiveness, and in any event reorganization ought to be left to the 
next administration.
    Supporting the remainder of the Presidents fiscal year 2009 plan--
Hydrogen Storage R&D, Fuel Cell Stack Component R&D, and Distributed 
Energy Fuel Cells Systems--will maintain the integrity of the 
competitively awarded projects administered by the Department of Energy 
and continue our public/private partnership designed to fully 
commercialize fuel cell and hydrogen technologies.
    Over the past 4 years, shortfalls in fuel cell and hydrogen core 
program funds have slowed and in some cases stopped high-priority 
research and development. Full funding can restore program momentum, 
and give the country some hope that we can break the cycle of energy 
dependence. Competition for energy supply and security of supply are 
both urgent concerns, and the Nation's investment, we believe, ought to 
match that urgency.
    Thank you for considering our requests.
                                 ______
                                 
    Prepared Statement of the National Association of State Energy 
                               Officials
    Mr. Chairman and members of the subcommittee, I am Dub Taylor of 
Texas 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 $75 million for the State Energy 
Program (SEP). SEP is the most successful program operated by DOE in 
this area. Within a $75 million funding level for SEP we would support 
the administration's proposed $10 million competitive program, but we 
do not support such an effort at the proposed funding level of $25 
million for the core SEP activities and $25 million for the competitive 
program. 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 an increase in 
the budget for the Energy Information Administration (EIA) to $120 
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. NASEO continues to support 
funding for a variety of critical deployment programs, including 
Building Codes Training and Assistance ($10 million), Rebuild America 
($5 million), Energy Star ($10 million) and Clean Cities (Vehicle 
Technologies Deployment) ($12.5 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 also 
strongly support the R&D function and Operations and Analysis function. 
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. The Energy Independence and Security Act of 2007 (EISA) 
also has a number of exemplary provisions which should also receive 
funding, including the new commercial buildings initiative. EISA also 
reauthorized SEP (section 531) and Weatherization (section 411) through 
fiscal year 2012. We remain concerned that a number of programs 
authorized in the Energy Policy Act of 2005 (EPACT 2005) have received 
no direct funding. Of special interest are sections 124, 125, 126, 128 
and 140 of EPACT 2005.
    Over the past 7 years, both oil and natural gas prices have been 
rising in response to expanded Chinese and Indian use, other 
international events, increased domestic use, the falling dollar and 
the result of the 2005 hurricanes. We expect $100+ oil to continue for 
an extended period of time, with an expanded problem as summer 
approaches. Gasoline prices may spike to $4/gallon. Diesel prices are 
already over $4/gallon. 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 energy cost savings is 
much higher today, in light of higher prices. 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 10 years and has produced significant results in 
every State in the United States. We support funding of DOE's new, 
proposed SEP competitive program, but only above a minimum $55 million 
SEP appropriation for the base SEP program. The States with lower 
populations are disadvantaged by this program.
    EISA authorized a new Energy Efficiency and Conservation Block 
Grants program (section 541-548). We look forward to working with 
Congress and the administration to make this program a reality. We hope 
start-up funding can be provided in fiscal year 2009. However, we 
remain concerned that a structure that requires DOE to review and 
process thousands of local government grant applications each year will 
be unworkable. With the elimination of the DOE/EERE Regional Offices, 
DOE contracting processes have become slower. There is now a more 
attenuated connection between State and local governments with DOE. We 
look forward to working with Congress, local governments and DOE to 
correct this situation. Joint planning needs to occur immediately. 
State energy offices have partnered with local governments for decades. 
This program should allow us to supplement and enhance those 
activities.
    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 DOE 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. State energy offices are working effectively with DOE on the 
``Save Energy Now'' campaign. Funding for distributed generation should 
be included above these amounts.
    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 (including 
major 2008 upgrades), developed a school energy efficiency financing 
program (including $100 million for high performance schools), and 
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. 
California's greenhouse gas mitigation plans and a new solar initiative 
are moving forward.
    Colorado.--The State is conducting training to implement the new 
statewide energy code. The energy office is pushing hard to promote the 
use of biofuels and create infrastructure for the dispensing of the 
fuel. The Colorado Carbon Fund has been developed to help individuals 
and businesses develop and purchase offsets. In addition, the State is 
working promoting community-based small wind projects, geothermal 
energy, commercial buildings energy efficiency and a variety of solar 
energy programs.
    Hawaii.--After enacting significant legislation (``Energy for 
Tomorrow''), the State is focused on implementing a plan to diversify 
the energy sources utilized in the State. Distributed generation and 
utility scale solar projects are being installed. An aggressive 
hydrogen promotion program is ongoing. The State has a variety of 
energy performance contracting projects. They have upgraded their 
tropical energy building code. Extensive utilization of bioenergy and 
biofuels is a priority and has been expanded.
    Kentucky.--The energy office has been working on Energy Star 
promotion activities and high performance energy programs for schools. 
They are working to promote energy efficiency programs in the 
agricultural sector as well, including the Kentucky Rural Energy 
Consortium activities. They have been executing energy performance 
contracts for a variety of State facilities.
    Louisiana.--The State recently upgraded building energy codes. Now 
they are embarked on an extensive training program to ensure that the 
code will be followed and understood. In the alternative fuels area the 
State has instituted projects including CNG fueling, hybrid electric 
buses and bio-diesel promotions. Significant attention has been paid to 
energy efficient reconstruction after Hurricane Katrina.
    Mississippi.--The energy office has been working on an extensive 
energy education program, ranging from school children to higher 
education initiatives. The State has also been active in promoting 
alternative motor fuels, rural business opportunities with the 
agricultural sector, energy efficiency in State buildings and Energy 
Star product promotions.
    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 $93 million, 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, with a 
significant incremental increase to $20 million in investments in 2008 
alone. A new revolving loan for biodiesel has also been initiated. The 
energy office and the air agency have developed a program to set-aside 
NOX allowances for energy efficiency and renewable energy.
    New Jersey.--The State's Clean Energy Program expended 
approximately $171 million in 2006 alone, with the expected electricity 
and natural gas bill reductions for the life of these projects expected 
to be over $2.3 billion. New Jersey has an extremely aggressive solar 
energy program. Recent innovative projects have included a pilot 
photovoltaics power systems program in Phillipsburg, a wireless energy 
management demonstration project, an alternative fuel vehicle and a 
bio-diesel vehicle rebate program, etc.
    New Mexico.--After adoption of new energy legislation in 2007, the 
State is pushing for new renewable energy transmission projects, the 
implementation of the Renewable Portfolio Standard, expanded promotion 
of the sustainable buildings tax credits, use of energy bonds, 
promotion of ``solar roofs,'' and encouraging manufacturers to utilize 
the alternative energy product tax credit. They have been training 
green building professionals and promoting clean fuels and efficient 
transportation options.
    North Dakota.--The energy office in North Dakota has focused on 
promotion of alternative fuels, wind energy projects (including a wind-
to-hydrogen demonstration), biomass gasification (with the EERC Center 
for Renewable Energy in Grand Forks), energy efficiency for schools and 
local governments and deployment of renewable technology.
    South Dakota.--The energy office has instituted a energy efficient 
grants program for higher education projects, including a 50 percent 
match. Recent projects have included lighting, energy recovery and 
heating and controls upgrades. The energy conservation loan program is 
focused on State agencies and recent projects have included a biomass 
boiler conversion. These projects have been instituted throughout the 
State.
    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 $224 million through energy 
efficiency projects. 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. This is part of a broader energy efficiency program 
that has helped 3,500 schools and local governments thus far. 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.--The State has recently upgraded their building codes and 
they have been pushing to train builders, local code officials, 
architects and engineers. They also developed a zero-interest loan 
program for school districts. A State renewable energy tax credit has 
been utilized for large projects. The Governor has instituted a new 
renewable energy initiative.
    Washington.--The energy agency has been working on promoting energy 
efficiency and renewable energy tax incentives, net metering and 
biofuels development. The State is also working on promoting Energy 
Star products and they are working regionally on building energy 
efficiency activities. They have also instituted a regional energy 
planning process.
    West Virginia.--The Energy Division is focused on promotion of 
energy efficiency in the industries of West Virginia, including work in 
the steel, aluminum, chemical/polymer, glass, metal-casting, wood 
products and mining industries. They are also promoting Energy Star 
products, especially in the residential sector. The recently developed 
State energy plan is being utilized to promote a diverse energy future 
for the State.
                                 ______
                                 
     Prepared Statement of the American Society of Plant Biologists
    The American Society of Plant Biologists (ASPB) urges the 
subcommittee to approve the Department of Energy (DOE) fiscal year 2009 
budget request for the Office of Science of $4.7 billion. Please 
support the Office of Basic Energy Sciences request for $1.568 billion. 
Included with the Department's budget request for Basic Energy Sciences 
is $297,113,000 for leading research in the Chemical Sciences, 
Geosciences and Energy Biosciences Division. We urge you to support the 
Department's budget request for the division, including $35.6 million 
for Energy Biosciences research. ASPB supports the DOE budget request 
of $568.5 million for the Office of Biological and Environmental 
Research.
    Research the subcommittee supported within the Energy Biosciences 
program has led to many breakthroughs including increased understanding 
of the composition of the cell wall. These findings help allow 
scientists and the Department to project further research advances 
leading to cost-competitive production of cellulosic ethanol. Many 
years of basic research supported in Energy Biosciences led to these 
cell wall findings. The highly regarded Energy Biosciences program also 
funded basic research leading to the landmark discovery of an enzyme 
that can convert cellulose into sugar for facile ethanol production.
    Sunlight is the ultimate energy source for the earth. Harnessing 
even a fraction of this sunlight would provide us sufficient energy for 
years to come. Plants do this naturally through photosynthesis, also an 
area of research that has garnered continuous support from the DOE 
Energy Biosciences program. The burning of fossil fuels releases stored 
carbon dioxide into the atmosphere, contributing to global warming. 
Photosynthesis has the ability to recapture carbon dioxide, making 
plants a carbon neutral contribution to our energy needs.
    We credit the subcommittee, the Office of Basic Energy Sciences 
Director and Under Secretary for the Office of Science for maintaining 
each year standards for peer-review selection based on the highest 
merit of science proposals submitted to the Energy Biosciences program 
and other programs within the Office.
    These findings on the cell wall and enzymes are being built upon in 
a mission-related basic research effort by the Office of Biological and 
Environmental Research aimed at achieving advances that make possible 
cost-competitive production of cellulosic ethanol and other biofuels. 
The three Bioenergy Research Centers awarded by BER will increase 
understanding of cell wall and enzyme modifications needed to more 
cost-effectively capture sugars in the cellulose and hemicellulose in 
plant cell walls. We urge continued support for the three Bioenergy 
Research Centers. The Centers will also make possible advances in 
converting sugars to ethanol, biobutanol and other biofuels for the 
Nation's motorists. Cellulose is the most abundant biological material 
on earth. What was once only a dream of capturing and converting this 
abundant, renewable and sustainable resource into transportation fuels 
will become a reality thanks to continuing advances in plant and 
microbial science that the subcommittee is making possible. Advances in 
the fundamental understanding of oil crops such as soybean will 
contribute to increased biodiesel fuel production.
    We urge support for the $100 million initiative in Energy Frontier 
Research Centers (EFRCs). Under this initiative, universities, national 
laboratories, nonprofit organizations, and for-profit firms will be 
invited to compete, singly or in partnerships, to establish an EFRC. 
Centers will be selected by scientific peer review and funded at $2-5 
million per year over a 5-year period. These integrated, multi-
investigator Centers will conduct fundamental research focusing on one 
of more of several ``grand challenges'' recently identified in major 
strategic planning efforts by the scientific community. The purpose of 
these centers will be to integrate the talents and expertise of leading 
scientists in a setting designed to accelerate research toward meeting 
our critical energy challenges.
    One of our most pressing energy challenges is in transportation 
fuels. I wrote a letter to the editor on the exciting next generation 
of biofuels that was published in The Washington Times on March 6, 
2008. Following is the commentary:

               [From The Washington Times, Mar. 6, 2008]

                    the next generation of biofuels
    Oil closed at $100 a barrel February 19, for the first time. The 
Washington Times reported on February 20, (``Oil tops $100 on refinery, 
OPEC,'' Business) that fears that the Organization of the Petroleum 
Exporting Countries may cut production contributed to the price 
increase.
    Some analysts see this $100 mark as just a stop on the way to $200-
per-barrel oil, possibly by the end of this decade. The reason cited is 
similar to newspaper reports on the bump to $100 per barrel--OPEC's 
control of supply.
    In addition to the economic and political challenges imposed by our 
reliance on foreign oil, we also need to be concerned that greenhouse 
gas (GHG) emissions associated with the use of fossil fuel contribute 
significantly to global warming, evident from observed increases in 
global air and ocean temperatures, widespread melting of snow and ice 
and a rising global average sea level. Is there a large-volume 
alternative to the use of increasingly costly oil with its high GHG 
emissions? There will be.
    We are at the early stages of research on the next generation of 
biofuels using plant cellulose. Plant stems, stalks and leaves will 
become low-cost feedstocks for biofuels. A 2005 report from the U.S. 
Department of Agriculture and the U.S. Department of Energy projects 
that there will be enough biomass (cellulose) to meet more than one-
third of the current U.S. demand in transportation fuels.
    At the same time, next-generation biofuels will greatly lower 
emissions of stored carbon compared to gasoline. Biofuels will be 
better for Americans' pocketbooks and the environment.
    The President and Congress are to be commended for initiating 
needed investments in new-generation biofuels research. Additional 
investment is needed in all phases of plant research. This will help 
hasten the day when biofuels make up 33 percent instead of 3 percent of 
the transportation fuels used in the United States.

                                      C. Robertson McClung,
       President, American Society of Plant Biologists, Professor, 
                                                 Dartmouth College.

    Understanding plant growth and development at a systems level feeds 
into increasing biomass, as does understanding basic mechanisms of 
abiotic and biotic stress tolerance. Understanding how cell walls are 
synthesized and their composition determined is not only fundamental to 
our knowledge of basic plant biology, but also is a central issue in 
biomass production and conversion. The same can be said of 
understanding how plants synthesize and regulate the production of 
lipids and oils as well as many other plant constituents and processes.
    Please support increases in fiscal year 2009 for the Office of 
Biological and Environmental Research Program for Ecosystem Research 
(PER). PER sponsors experimental research to develop a better 
scientific understanding of potential effects of climatic change on 
U.S. terrestrial ecosystems and their component organisms. Field or 
laboratory studies are directed at understanding cause-and-effect 
relationships between temperature change and the abundance or 
geographic distribution of terrestrial vascular plants or animals in 
the United States. During the last decade there have been significant 
advances in the mechanistic understanding of how the component elements 
of terrestrial ecosystems are responding to elements of global change. 
These include changes in: atmospheric carbon dioxide levels, 
precipitation amount and seasonal distribution, and in daily and 
seasonal temperature cycles. As the primary producers of terrestrial 
ecosystems, the response of plants to multiple and interactive effects 
of global change drive the overall ecosystem response. This mechanistic 
research involving state-of-the-art physiological, biochemical, 
molecular, and genomic approaches has been almost exclusively conducted 
on individual plants exposed to global change scenarios under 
controlled environment conditions. Over the same period of time there 
have been tremendous strides made in the phenomenological 
characterization of the response of terrestrial ecosystems to 
interactive effects of global change. Again this research effort has 
centered on plants as the drivers of the central ecosystem processes of 
carbon, nitrogen, and water cycling. Plants also support the major 
biotic and trophic interactions within ecosystems and there has been 
intense interest to characterize the response of these interactions to 
global change.
    The emergent research frontier where breakthroughs are most needed 
is in bridging mechanism and phenomenology to understand the systems 
biology of a functioning ecosystem under realistic global change 
treatments.
    ASPB is a non-profit society of 5,000 scientists based primarily at 
universities. ASPB publishes the most frequently cited plant science 
journal in the world, Plant Physiology and the plant science journal 
with the highest impact factor, The Plant Cell. Thank you again for the 
opportunity to submit these comments to the subcommittee. Please let us 
know if we could provide any additional information.
                                 ______
                                 
  Prepared Statement of the Electric Drive Transportation Association
    In the Nation's two newest comprehensive energy laws, the Energy 
Independence and Security Act of 2007 (EISA), and the Energy Policy Act 
of 2005 (EPAct05), Congress recognized the need to invest in 
technologies and policies that will result in greater energy 
independence. Those bills authorize research and development, 
demonstration and deployment and manufacturing innovation programs to 
promote electric drive technologies, which use electricity to displace 
oil.
    The Electric Drive Transportation Association (EDTA) applauds the 
Senate's support for 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 
in use today and numerous others in development. These vehicles can be 
passenger vehicles, trucks, tractors, locomotives or ground support 
equipment. Electric drive also powers transportation infrastructure, 
such as truck auxiliary power units and truck stop electrification 
facilities, which allow idled trucks to power with clean, alternative 
electricity.
    Multiple fuel and vehicle technologies, including hybrids, battery 
electric vehicles, fuel cell vehicles, and plug-in versions of these 
electric drive vehicles, will be needed to end our unsustainable 
dependence on oil. The Department of Energy's Office of Energy 
Efficiency and Renewable Energy programs to accelerate development of 
electric drive vehicle technologies are pivotal to the effort to reduce 
oil consumption.
    The Senate's budget resolution provides $2 billion over the 
President's request for these programs. As you allocate fiscal year 
2009 funding for the important programs in the Office of Renewable 
Energy and Energy Efficiency, we respectfully request that you provide 
the resources necessary to realize the electric drive advances outlined 
in EISA and EPAct05.
                energy storage research and development
    Specifically, we support expanded funding for energy storage 
research and development at the Department of Energy's Office of Energy 
Efficiency and Renewable Energy (EERE), in particular, in the Vehicle 
Technologies program.
    Advanced batteries and other energy storage innovations are the key 
to commercialization of plug-in electric drive and will accelerate 
advances in all electric drive vehicles. The administration's request 
for the existing DOE program is essentially level with fiscal year 2008 
funding and does not reflect the intent of Congress as detailed in 
EISA.
    Fiscal year 2009 funding in the Hybrid Electric Systems account 
should be expanded to include resources for the EISA section 641 energy 
storage competitiveness program. This program, which is authorized at 
$295 million, includes basic and applied research, development and 
demonstration programs to support U.S. competitiveness in energy 
storage for electric drive vehicles and stationary applications.
                         fuel cell technologies
    We also urge you to ensure that the national effort to develop 
hydrogen fuel cell options is able to advance toward its goals. The 
fiscal year 2009 request for the Hydrogen and Fuel Cell Technologies 
program is $33 million, a reduction from fiscal year 2008 levels. The 
Department's proposed program realignment should not undermine the 
ongoing work that is yielding technology breakthroughs and will 
ultimately yield necessary longer term transportation options.
    For instance, the request for the Technology Validation program 
cuts funding to $15 million, half of the fiscal year 2008 level. In 
this 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. Consequently, we believe this 
program should be funded at least at the fiscal year 2008 level of $30 
million.
    Other programs necessary to the push toward commercialization are 
also cut or unfunded entirely, including a $3.5 million reduction in 
Safety Codes and Standards and a complete elimination of funding for 
Manufacturing R&D (which received $5 million in fiscal year 2008).
    Section 782 of EPAct05 authorizes Federal and State Procurement 
program funding to help government fleets acquire fuel cells vehicles. 
The program is designed to reduce the initial market barriers for 
advanced technology vehicles by covering the cost premium of the early 
Federal and State fleets of fuel cell vehicles. Congress should provide 
the $25 million authorized by EPAct05.
    The Department of Energy should not abandon its hydrogen production 
and delivery activities, as the administration requests, and funding 
for the Transportation Fuel Cell Systems Account should be restored to 
at least the fiscal year 2008 level of $8 million.
                      deployment and demonstration
    Other new and existing demonstration and deployment programs have 
the potential to accelerate commercial deployment of electric drive 
technologies, with the appropriate resources.
    Specifically, the EISA section 131 Transportation Electrification 
(b) Plug in Electric Drive Vehicle Program and (c) Near Term 
Transportation Electrification Program can help industry partners to 
work together to put on-road and non-road electric drive vehicles in 
use, enabling manufacturers and consumers to identify real world 
performance and establish initial market opportunities. The programs 
are authorized at a total of $185 million. We ask that you provide 
substantial funding to allow rapid ramp-up of these programs in their 
initial year.
    The Clean Cities program is another example of a successful, 
ongoing effort to deploy advanced vehicle technologies. The Clean 
Cities program consists of voluntary local and regional coalitions 
working to build clean and efficient private and municipal fleets, with 
advanced technology and alternative fuel vehicles. We appreciate the 
Congress' history of support for the program and request that you 
provide the technology- and fuel-neutral fund at the fiscal year 2008 
enacted level, $12.5 million.
    Another important activity at DOE in fiscal year 2009 will be the 
rulemaking that will be required to implement new EPAct fleet 
requirements. EISA's section 508 amends the existing fleet requirements 
to finally, explicitly include electric drive (fuel cell, hybrid, plug-
in hybrid, medium and heavy duty hybrid electric vehicles and 
neighborhood electric vehicles) and investments in alternative fuel 
infrastructure. The $1.8 million in the request is insufficient to 
ensure an expeditious and effective rule making process, and will delay 
the ability of covered fleets to comply with hybrid and other electric 
drive vehicles.
                        manufacturing innovation
    We also support building domestic capacity for advanced batteries 
and vehicles as envisioned by EISA 2007. The Senate Budget resolution 
also endorses the effort, explicitly providing an additional $2.7 
billion for green jobs initiatives, including ``loan guarantee and 
grant programs'' for ``. . . production of fuel efficient vehicles.''
    We respectfully ask that you direct the maximum available funds 
toward programs authorized in the EISA that will help new and existing 
manufacturers to produce advanced batteries and vehicles in the United 
States and expand employment in these fields.
    Specifically, we are referring to the section 136 Advanced 
Technology Vehicle Manufacturing Incentive Program, which provides 
grants for up to 30 percent of the cost of re-equipping or establishing 
advanced vehicle and component manufacturing facilities, equipment 
investment and engineering integration, and section 132: Domestic 
Manufacturing Conversion, which authorizes grants to manufacturers of 
fuel efficient vehicles and component suppliers to modernize production 
facilities.
    In addition, we recommend that additional funds be allocated to the 
existing Loan Guarantee Program to include the battery and component 
manufacturing guarantees activities authorized in EISA's section 134 
Loan Guarantees for Fuel Efficient Automobile Parts Manufacturers and 
section 135 Advanced Battery Loan Guarantee Programs. The 
administration request includes $10 billion of $38.5 billion for 
advanced and innovative energy; that amount should be increased with 
funds directed to the EISA-authorized manufacturing activities.
    EDTA appreciates the subcommittee's support for electric drive and 
for EERE's Vehicle and Hydrogen and Fuel Cell Technology programs. We 
respectfully ask that the subcommittee use the funds available in the 
fiscal year 2009 budget resolution to build on that support and 
establish the electric drive programs authorized in energy legislation 
and to ensure the continuing advancement of electric drive technology.
                                 ______
                                 
                    Prepared Statement of GE Energy
    The following testimony is submitted on behalf of GE Energy (GE) 
for the consideration of the subcommittee during its deliberations 
regarding the fiscal year 2009 budget requests for the Department of 
Energy (DOE). Among GE's key recommendations are: (1) support for the 
$241.6 million funding request for the Nuclear Power 2010 program to 
develop new U.S. nuclear generation; (2) $40 million in added funding 
for the GNEP program, for total funding of $341 million, 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) $27 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
    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: 
(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; 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-Hitachi Nuclear 
Energy (GEH) and Westinghouse. Adequate DOE funding in fiscal year 2009 
is necessary to maintain the schedules supporting certification, COL 
license approval and construction initiation.
    The administration has requested $241.6 million for fiscal year 
2009 to support the NP2010 Program. GEH supports this funding level, 
which reflects the additional funding needed above initial estimates to 
facilitate continued ESBWR detailed design and deployment activities at 
levels that support industry expectations.
    Among other things, funding is needed to support critical detailed 
design activities including piping and instrumentation diagrams 
development, process flow diagrams, system design spec development, 3D 
pipe routing and pipe stress calculations and the development of 
procurement specifications for long lead and highly engineered 
equipment. These detailed design activities are required for advanced 
module design, simulation assisted engineering, and critical path 
construction activities. Moreover, these detailed engineering 
activities are critical to the refinement of the ESBWR capital cost 
estimate. Deployment planning activities include the development of 
site utilization plans, crane lift plans, construction execution plans, 
procurement strategies, warehousing strategies and craft labor 
planning. These are required to allow the ESBWR to be successfully 
deployed in the desired timeframe well within the next decade.
    The costs to complete these activities have escalated due to a 
number of contributing factors that have changed versus baseline 
assumptions made in 2005. These factors include, but are not limited 
to, NRC rate increases, large volume of additional NRC RAI's (Request 
for Additional Information), recent changes in regulatory position 
related to aircraft impact and Human Factors Engineering design 
process, customer expectations of increased design and COL 
standardization, and performance of COL compliance reviews. 
Additionally, higher resource demands from increased industry activity 
as well as the FOAKE nature of the effort have placed a substantial 
cost burden on the project. These and other factors have led to 
significant additional program cost above baseline assumptions. The 
fiscal year 2009 funding requested by the administration will help 
offset some of these cost escalations.
    The Advanced Fuel Cycle Initiative and the Global Nuclear Energy 
Partnership (GNEP).--The Global Nuclear Energy Partnership (GNEP), 
initiated in early 2006, benefits from DOE's research and development 
work currently conducted under the Advanced Fuel Cycle Initiative 
(AFCI) and previously conducted in the Advanced Liquid Metal Reactor 
program (circa 1985 to 1995). GNEP seeks to expand the use of nuclear 
power in a proliferation-resistant manner, and to use nuclear waste 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 support of the broad GNEP goals and to help the DOE prepare for 
the 2008 Secretarial Record of Decision, DOE in October 2007 issued 
awards to four commercial teams, including the team led by GEH, for 
technical and conceptual design studies to provide information on 
commercial methods that are available to close the fuel cycle. The GEH 
team has explored the technical and business parameters that could 
support a viable system in a four-part submittal. The submittal 
included drafts of a Business Plan, a Technology Development Roadmap, a 
Conceptual Design and a Communication Plan. The Business Plan explored 
the current market, examined the financial viability of the Advanced 
Recycling Center and proposed policy direction for solutions to spent 
nuclear fuel. The cost and schedule report, a part of the Conceptual 
Design, served as the bridge between the technical details from the 
conceptual design and provided key financial input to the Business 
Plan. The Conceptual Design submittal (approximately 4,000 pages long) 
demonstrated in-depth knowledge developed during the Advanced Liquid 
Metal Reactor program, GE-funded programs and our current experience. 
The Technology Development Roadmap recommended direction on a future 
research and development program that could be started in fiscal year 
2009 to engage U.S. universities and national laboratories that would 
allow the United States to lead within the GNEP policy framework as 
well as have better collaborations with foreign governments. Finally, 
the Communication Plan provided guidance on how the DOE may communicate 
scientific, technical and practical information related to closing the 
nuclear fuel cycle.
    For fiscal year 2009, an additional $40 million above the 
administration's budget request, for total GNEP funding of $341 
million, is needed. The recommended additional funding should be used 
to help industry conduct technology demonstration projects, such as the 
manufacture and demonstration of: (1) key reactor components (e.g., 
reactor vessel); (2) electrometallurgical based fuel separation; and 
(3) a reactor and fuel separation simulator. GEH further recommends 
that adequate funding through the GNEP program be provided to both the 
U.S. industry and the laboratories for electrometallurgical separations 
and the PRISM reactor in support of the GNEP policy goals.
                             fossil energy
    Coal is facing a challenging landscape. In anticipation of carbon 
constraints, coal will require carbon capture and sequestration (CCS) 
if it is to continue serving as a major national energy resource. It is 
therefore necessary that the viability and efficacy of CCS be proven at 
large scale, for multiple projects and over a range of geologic 
settings. Only a major initiative and investment will provide the 
necessary confidence for the commercial and public acceptance of CCS. 
Meeting this challenge will require the combined resources of industry 
and government at all levels working in partnership.
    Financial incentives alone will not be sufficient to achieve the 
goal of validated and commercially robust CCS. Reducing the risk and 
time required to identify and characterize potential storage sites, to 
obtain Federal, State and local government commitments related to long-
term liability issues, to conduct the necessary reviews and to complete 
permitting will also require a substantial effort by all levels of 
government. The DOE must acknowledge this challenge in all programs 
related to CCS and provide specific assistance in addressing these 
issues. For this reason, the commitment of government to assume long-
term liability for monitoring and safety of the stored CO2 
should be sought in forthcoming solicitations for CCS development. 
Without such assurances it is not likely that industry participation 
will be forthcoming.
    FutureGen.--DOE's decision to restructure the FutureGen program 
correctly targets the deployment of CCS technology at a commercial 
scale. The proposed restructuring recognizes that carbon capture ready 
IGCC can be commercially supplied today; GE's commercial 630 MW IGCC 
plant already is carbon capture ready. To be successful, FutureGen's 
restructuring must address two overarching needs: (1) validation of 
CO2 sequestration at a large scale; (2) in multiple 
geological settings and (3) demonstration that utility powerplants with 
carbon capture can be successfully integrated with sequestration. DOE's 
proposed restructuring can provide the platform to satisfy these needs 
and thus be a major step forward toward assuring a strong future for 
coal-based power generation. As the Department further develops the 
restructured FutureGen program, care must be taken, however, to avoid 
burdening large-scale CCS projects with unneeded additional complexity 
and cost. Nothing in the program's new structure should be allowed to 
divert attention from the central objective of proving that the most 
challenging goal can be met: that large-scale sequestration is viable 
and safe.
    Clean Coal Power Initiative.--GE supports CCPI and its role in 
validating and testing advanced technology. With the potential 
refocusing of FutureGen, that program's function as a platform for 
introduction and validation of advanced IGCC carbon capture 
technologies will not be available. CCPI must be ready to serve a 
larger role in the validation and deployment of those technology 
advancements that are needed to meet DOE's goal of no more than 10 
percent additional cost for CCS. However, mounting multiple projects 
within the overall anticipated funding of $250 million for Round 3 of 
CCPI will be challenging. Front-end-engineering and detailed site 
characterization for a CCS project alone could account for $40-$50 
million. After capital expenses for carbon capture equipment and 
sequestration pipeline and site development, there will be little if 
any funding remaining for the additional costs of CCS operation needed 
to validate sequestration capacity. For example, for a single 300 MW 
IGCC train equipped with carbon capture, the minimum 50 percent capture 
requirement of CCPI will result in over 1 million tons/year of captured 
CO2 with potential annual incremental operating costs as 
high as $40-$50 million. In recognition of these cost challenges, the 
expectation for multiple project awards within the available CCPI 
funding needs to be reassessed.
    IGCC.--With its pre-combustion carbon capture, IGCC provides a 
significant advantage over combustion technology. Despite its current 
20 percent cost premium over pulverized coal combustion, IGCC can 
provide a lower cost of electricity with carbon capture. However, it 
should be recognized that IGCC is still in an early phase of commercial 
deployment and at the very beginning of a steep cost learning curve. 
Investment in technology development promises to have a high return.
    DOE's goal of a maximum 10 percent premium in cost of electricity 
for IGCC with carbon capture will not be met with current technology. 
It will require technology advancements. Key technology areas that can 
significantly lower cost and improve performance are advanced carbon 
shift, CO2 capture and separations, overall process 
efficiency plus advancing IGCC's capability for subituminous coals. 
Therefore we strongly endorse the administration's request to increase 
fiscal year 2009 funding for IGCC by $15.5 million over the fiscal year 
2008 level to $69 million.
    In addition, cost reduction must be pursued vigorously for IGCC to 
realize its potential in maintaining coal competitiveness in a carbon-
constrained environment. From this perspective, the clearest and 
quickest path to reducing the cost of carbon capture is the accelerated 
deployment of IGCC and elimination of its cost premium. In order to 
achieve this, we recommend a continuation and broadening of the 
investment tax credits under the Energy Policy Act of 2005 from 6 to 12 
IGCC projects and covering a scope that helps to offset both the cost 
premium of IGCC as well as the incremental cost of carbon capture.
    Carbon Sequestration.--GE also endorses the administration's 
requested technology funding increase of $30 million from fiscal year 
2008 levels to $149 million for carbon sequestration. Research in 
sequestration needs to move forward as rapidly as possible. A primary 
focus needs to be the development of science-based requirements for 
site characterization, monitoring and CO2 quality. 
Advancements in these areas are necessary to guide commercial-scale 
sequestration. The DOE also needs to quickly move forward with the 
demonstration programs authorized under section 702 of the Energy 
Independence and Security Act of 2007 in order to apply and gain 
experience with modeling, monitoring and rapid sequestration site 
characterization.
    Advanced Turbines.--GE recommends that funding be increased by $27 
million to a total of $55 million for the Advanced Turbines Program. 
This program represents the Department's high priority 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 carbon capture 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. Development of these technologies will help offset some of 
the efficiency and output penalties associated with CO2 
capture. Unless the fiscal year 2009 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.
                                 ______
                                 
    Prepared Statement of the Energy Committee of ASME's Technical 
                              Communities
    Mr. Chairman and members of the subcommittee, the ASME Energy 
Committee is pleased to provide this testimony on the fiscal year 2009 
budget request for research and development programs in the Department 
of Energy (DOE).
           introduction to asme and the asme energy committee
    The 127,000-member ASME is a nonprofit, worldwide professional, 
educational and technical Society. The Energy Committee of ASME's 
Technical Communities comprises 30 members from 17 divisions of ASME, 
representing approximately 40,000 of ASME's members.
    ASME has long advocated a balanced energy supply mix to meet the 
Nation's energy needs, including advanced coal, petroleum, nuclear, 
natural gas, biomass, solar, wind, hydroelectric power, and energy 
efficient building and transportation technologies. Sustained growth 
will also require stability in licensing and permitting processes not 
only for power stations but also for transmission and transportation 
systems.
    Over the past few years, concerns have been growing among 
policymakers and the general public about adverse security and 
environmental impacts resulting from America's dependence on foreign 
sources of oil and gas. As a result, the current administration and 
Members of Congress have made calls to diversify our energy supply and 
increase R&D on advanced energy technologies. The Energy Committee 
fully supports their efforts.
    A forward-looking energy policy will require enhanced, sustained 
levels of funding for R&D as well as Government policies that encourage 
deployment and commercialization. The Energy Committee supports much of 
the fiscal year 2009 budget request, especially the increases in funds 
for fundamental scientific research. We wish to emphasize that 
increased funding in all areas is essential to meeting our national 
energy needs.
                            critical issues
    The Energy Committee would like to point out some critical energy 
issues:
  --There is a critical worldwide shortage of trained persons in the 
        work force at all levels. This includes persons in the building 
        trades, persons in the manufacturing industry, persons who will 
        be available to operate and maintain the energy systems, and 
        engineers and scientists at all levels who will perform the R&D 
        and design functions for all energy systems.
  --International programs in energy are growing and will continue to 
        do so in order to make use of shared resources. The 
        International Thermonuclear Experimental Reactor (ITER) and the 
        Global Nuclear Energy Partnership (GNEP) programs are examples 
        of this. The ITER program includes seven international partners 
        and the GNEP program now includes 21 countries. Consistent and 
        sustained funding is required to demonstrate that the United 
        States is a reliable partner in these efforts.
  --Investment guarantees for construction of new renewable and nuclear 
        facilities were enacted in previous energy legislation. These 
        guarantees will enable lower financing costs for a variety of 
        energy technologies leading to lower energy costs for the 
        American public. Extending these programs further into the 
        future will allow a reasoned rate of increase in construction 
        and application of these technologies for electric generation.
                             fossil energy
    The fiscal year 2009 budget request of $754 million for fossil 
energy represents an increase of $11 million over the fiscal year 2008 
appropriation. The Energy Committee supports the increase in coal 
research programs to $624 million. The effective use of coal in today's 
environment demands an increase in efficiency and a decrease in release 
of environmentally harmful emissions. The Energy Committee agrees with 
the DOE in its efforts to build IGCC plants by providing funding for 
the addition of CCS technology to multiple plants that will be 
operational by 2015. This approach builds on technological R&D 
advancements in IGCC and CCS technology achieved over the past 5 years.
    The use of advanced integrated gasification combined cycle 
technology and carbon sequestration may allow the United States to 
utilize its coal resources in a more environmentally sound and cost 
effective manner. We encourage strong and consistent funding for these 
programs now and in future years.
                        advanced fuels research
    The Energy Committee agrees that the advanced fuels research should 
be aimed at fuels used in the transportation system. We believe that 
the development of transportation fuel systems that are not petroleum 
based is a critical part of our future national energy policy. The 
fiscal year 2009 budget for biomass and bio-refinery systems R&D is 
increased by $27 million to $225 million. The Energy Committee 
encourages Congress to ensure that these research programs continue to 
receive adequate funding. We are also pleased to see the increase to 
$221 million in the effort related to vehicle technologies with a 
program emphasis on plug-in hybrid electric vehicles.
                             nuclear energy
    The Energy Committee is encouraged to see the increase in the DOE 
Nuclear Energy budget to $1.4 billion in fiscal year 2009. Nuclear 
power, as a non-greenhouse gas-emitting resource, is a critical 
component of a diverse U.S. power generation mix and should play a 
larger role in the Nation's base power supply.
    Proposed increases in the Nuclear Energy Budget are most evident in 
the Nuclear Power 2010 program with an increase of $108 million and the 
Advanced Fuel Cycle Initiative with an increase of $122 million over 
the fiscal year 2008 Appropriation. The Energy Committee believes that 
nuclear generated electricity is important to the Nation, especially in 
a more carbon conscious environment. Therefore continued R&D looking at 
advanced nuclear systems is critical.
    The GNEP program is vital to the international future of nuclear 
energy. Agreements are already in place to establish cooperative 
efforts. The U.S. based R&D elements of this program are now part of 
the Advanced Fuel Cycle Initiative. The Energy Committee concurs with 
the DOE goal to establish a full scale demonstration of the required 
facilities, including a burner reactor and fuel recycle plant that will 
not produce a pure plutonium product stream. The successful 
implementation of the GNEP initiative will lead to a minimization of 
high level nuclear waste, enhance the safeguarding of nuclear materials 
by keeping them in the reactor fuel cycle, lead to an effective and 
efficient use of all the potential energy contained in uranium and 
allow cost effective generation of electricity.
    The university reactor assistance and education assistance program 
has been successfully integrated into other programs within the Nuclear 
Energy budget. The Energy Committee supports the continuation of this 
change.
                 energy efficiency and renewable energy
    The Office of Energy Efficiency and Renewable Energy (EERE) manages 
America's investment in research, development and deployment of the 
Department of Energy's (DOE) diverse energy efficiency and renewable 
energy applied science portfolio. The fiscal year 2009 request of $1.25 
billion provides a balanced and diverse portfolio of solutions to 
address the urgent energy and environmental challenges currently facing 
our Nation. Most of the key EERE programs, including Biomass, Building 
Technologies, Geothermal Energy, Vehicle Technologies, and Wind Energy, 
have received increases in funding to support the growth of renewable 
energy that the United States needs. The potential to meet the growing 
need for domestically produced energy justifies sustained and increased 
support for these programs.
    The Hydrogen Program is reduced $65 million; however, $32 million 
has been added to hydrogen related activities and funding in the 
Vehicle Technologies Program. The Energy Committee encourages fully 
funding the Hydrogen Program as requested and recommends restoring a 
minimum level of $2 million in funding to the Hydrogen Production and 
Delivery R&D activity to coordinate efforts with other Hydrogen 
Production R&D activities in other DOE offices.
    The funding to the Water Power Program reflects increasing interest 
in ocean energy resource characterizations but it neglects the need for 
sustained support for conventional hydropower R&D. Hydropower is our 
Nation's largest renewable energy source. This includes pumped storage 
hydro and repowering existing hydropower facilities with advanced, 
environmentally benign equipment. The Energy Committee recommends 
increasing the fiscal year 2009 funding level of the Water Power 
Program to $10 million to continue supporting development and 
deployment of advanced conventional hydropower and ocean energy 
technologies.
    The integration of renewable electric generating systems into the 
operation of the electricity distribution system is critical to 
economic operation of these systems. The Energy Committee believes that 
R&D related to the integration of the electric grid and its control as 
a national system is imperative to the growth of renewable energy 
generating technologies and we encourage full funding for such 
research.
             science and advanced energy research programs
    The Energy Committee is pleased by the increased request for the 
Office of Science (OS), $4.72 billion or $749 million over the fiscal 
year 2008 appropriated amount, which attempts to restore the funding 
trajectory mandated in the America Competes Act of 2007 (Public Law 
110-69). OS programs in high energy physics, nuclear physics, 
biological and environmental research, basic energy sciences, and 
advanced scientific computing, serves every student in the country. 
These funds support research at the DOE Laboratories and at a large 
number of universities and colleges. We believe that basic energy 
research will also improve U.S. energy security over the long term, 
through its support for R&D on cellulosic ethanol, advanced battery 
systems, and fusion.
    Of the fiscal year 2009 requested increase, $214 million is for the 
ITER fusion energy international agreement taking place in Cadarache, 
France. This program did not receive funding in fiscal year 2008. The 
Energy Committee is encouraged by this cooperative agreement and the 
enormous potential it holds.
    The Energy Committee would like to impress upon the members of this 
subcommittee and their colleagues that high energy physics and nuclear 
physics programs are very important to all branches of engineering. The 
information gathered allows the development of data related to material 
formation and failure which guides the selection of materials for many 
day to day applications.
                           other doe programs
    DOE is also very active in areas outside of R&D. The environmental 
remediation program that funds the decommissioning and decontamination 
of old DOE facilities is one such program. The Energy Committee 
questions the advisability of the budget decreases in this program. 
Congress should appropriate the budget to ensure that this work is 
accomplished in an expeditious manner.
                               conclusion
    Members of the Energy Committee consider the issues related to 
energy to be one of the most important issues facing our Nation. The 
need for a strong and coherent energy policy is apparent. We applaud 
the administration and Congress for their understanding of the 
important role that scientific and engineering breakthroughs will play 
in meeting our energy challenges. In order to promote such innovation, 
strong support for energy research will be necessary across a broad 
portfolio of technology options. DOE research can play a critical role 
in allowing the United States to use our current resources more 
effectively and to create more advanced energy technologies.
    Thank you for the opportunity to offer testimony regarding both the 
R&D and other parts of the proposed budget for the DOE. The ASME Energy 
Committee is pleased to respond to additional requests for additional 
information or perspectives on other aspects of our Nation's energy 
programs.
                                 ______
                                 
    Prepared Statement of the State of Alaska Department of Natural 
                               Resources
    Dear Chairman Dorgan and Subcommittee on Energy and Water 
Development, I appreciate this opportunity to provide testimony 
outlining the urgent need for energy-related research and resource 
assessment in Alaska. Specifically, scientific work performed and 
funded in Alaska through the U.S. Department of Energy provides an 
invaluable service to the Nation by helping address energy security and 
development of technologies for the challenges unique to the Arctic. 
Alaska is one of the few places in the United States where the 
scientific unknowns are so ubiquitous, and the task so daunting, that 
Federal and State agencies seldom compete for the most high profile 
projects; there are too many to go around. In fact, we compliment each 
other's efforts in an attempt to tackle the many challenges that face 
us all. The Office of Fossil Energy, National Energy Technology 
Laboratory (NETL) Arctic Energy Office, plays a critical role in this 
collaborative effort.
    Federal land-management responsibility in Alaska is significant. 
Although final conveyances are not complete, the current Federal land 
allotment stands at 243 million acres, or about 64 percent of the total 
Alaska land surface. The State of Alaska manages about 24 percent, or 
90 million acres, and the Native corporations about 10 percent. 
Additionally, the energy potential in offshore Alaska Federal waters 
dwarfs nearly all other areas in North America. Those regions are now 
becoming the next global exploration frontiers of major international 
oil and gas companies. For example, the most recent lease sale, in the 
Chukchi Sea, astounded even the most optimistic of explorationists by 
the bonus bids that were recorded ($2.6 billion). Many of the geologic 
attributes that were targeted by the bidding extend onshore to the east 
into the National Petroleum Reserve Alaska (NPRA). Additionally, the 
formidable challenges that will be faced to safely bring any discovered 
commodities to market will require the collaboration of many entities.
    Arguably, Alaska has the greatest potential for undiscovered 
conventional resources of any area in the United States. Current mean-
case technically recoverable resource estimates (calculated by the U.S. 
Geological Survey for on-shore basins and Minerals Management Service 
for offshore Alaska basins) stand at 200 trillion cubic feet of natural 
gas potential, and 46 billion barrels of oil. These probabilistic 
estimates are for undiscovered conventional resources only, and do not 
include the vast amount of natural gas in unconventional reservoirs 
such as gas hydrates, coalbed methane, shale-bed gas, and low 
permeability reservoirs. Additionally, Alaska contains the largest 
reserves of coal in all of the United States. Given that fossil energy 
will realistically play a key role in the energy portfolio of America 
for the foreseeable future, it is imperative that ``all hands remain on 
deck'' and agencies like the NETL Arctic Energy Office remain in full 
functional operation. The alternative will only put us farther behind 
and even more dependent on the volatilities of the global energy 
market.
    The many important projects being managed from the NETL Arctic 
Energy Office attest to the critical role they play. Programs that 
collaborate with other agencies and address key aspects of national 
energy supply, Arctic engineering, environmentally sensitive 
exploration and development technologies, and rural energy supply will 
not be fully realized without committed and long-term participation by 
the Federal Government. The State of Alaska is rightfully spending 
hundreds of millions of dollars on these efforts, but we cannot do it 
alone.
    Many changes are needed in the national energy policy, including a 
focus on and facilitation of dramatic conservation efforts, development 
of non-fossil energy sources that make environmental and economic 
sense, technological development for better use of fossil fuels, and 
continued pursuit of new conventional and unconventional reserves. 
Nevertheless, whether or not we stand ready, energy demand in the 
United States is forecast to increase by 19 percent by the year 2030. 
Even more alarming, global demand for energy is forecast to increase by 
57 percent in that same time period. We shall either prepare for the 
inevitability of dwindling resources, shrinking supply and shortfall, 
and increasing dependence on foreign energy resources, or pray this 
calamity is not upon us and continue to cut budgets and hope that a 
miracle is ``just around the corner.'' I believe we should spend the 
capital to prepare now.
    Thank you for your consideration of this important issue.
                                 ______
                                 
  Prepared Statement of the Association of State Energy Research and 
               Technology Transfer Institutions (ASERTTI)
    Mr. Chairman and members of the subcommittee, I am David Terry, 
Executive Director of the Association of State Energy Research and 
Technology Transfer Institutions (ASERTTI). ASERTTI is submitting this 
testimony in support of funding for a variety of U.S. Department of 
Energy programs. State and local governments host a wide range of 
public interest energy organizations, including State research and 
technology transfer institutions, municipal energy organizations, land 
grant colleges, universities, and others. The members of ASERTTI focus 
on State- and local-level public interest, applied clean energy 
research and technology transfer. Our work aims to develop and improve 
clean energy technologies, rapidly transfer those technologies to the 
private sector, and aid in the transformation of markets. ASERTTI 
promotes and facilitates communication and collaboration in the above-
mentioned areas among its State and local members, as well as with 
other organizations, such as the U.S. Department of Energy (DOE) 
National Laboratories. Each year, our members invest hundreds of 
millions of dollars in State and local energy funds. We believe 
improved collaboration with our Federal partners would significantly 
leverage our efforts and State funds--improving our Nation's energy 
future. In this regard, ASERTTI wishes to highlight a number of funding 
priorities, as follow, within DOE's Office of Energy Efficiency and 
Renewable Energy (EERE) programs for the Industrial, Building, and 
Vehicle Efficiency Technologies, as well as for the Biomass, Solar, and 
Weatherization Assistance Programs.
                        industrial technologies
    The administration's fiscal year 2009 budget request would cut the 
Industrial Technologies Program by $2.3 million, compared with fiscal 
year 2008, and contains cuts in several very important programs. 
Following are ASERTTI's priorities within the Industrial Technologies 
Program.
    Industrial Assessment Centers (IAC).--The IACs are part of the 
industrial program's crosscutting budget. The IAC program is unique in 
that it trains university engineering students in conducting energy 
audits of small- and medium-sized facilities and, in so doing, helps 
the facilities identify and implement energy saving measures. We 
recommend that the program be restored to fiscal year 2006 funding 
levels of $6.4 million in fiscal year 2009, with additional increases 
in funding and in the number of centers in future years. This is $2.4 
million above the fiscal year 2008 funding level.
    Distributed Generation (DG/Distributed Energy).--Over the past 
decade, this program area has played a key role in the development of 
high-efficiency clean technologies like combined heat and power (CHP). 
These activities were moved around within DOE between EERE and the 
Office of Electricity. For fiscal year 2008, Congress appropriated 
$14.5 million for these activities. However, the administration's 
fiscal year 2009 request is only $1.5 million. The program is now part 
of the crosscutting piece of the Industrial Technologies Program. 
ASERTTI recommends a robust funding increase over the fiscal year 2008 
appropriated level for Industrial DG.
    Within this DG (or DE) program, it is especially important to 
restore critical Centers that have become the cornerstone for regional 
DG activities, providing technical assistance and becoming involved in 
State and local interconnection and emissions issues--greatly 
leveraging Federal, State, and private resources. Section 451 of the 
recently enacted Energy Independence and Security Act of 2007 expands 
these Clean Energy Application Centers (formerly Regional Application 
Centers) and authorizes $10 million for fiscal year 2009. ASERTTI 
strongly supports this authorization level. These Centers also would 
support market transformation activities to facilitate deployment and 
help reduce regulatory and institutional barriers. The Centers also 
would encourage public private partnerships to achieve these goals. 
Efficiency can be as high as 85 percent in CHP applications when 
compared to central station power generation efficiencies of 30-55 
percent. These activities are estimated to contribute as much as 11 
trillion BTUs of displaced energy and 0.2 MMTCE in carbon savings in 
2020.
    Industrial Best Practices.--This is one of DOE's most effective 
industrial energy programs. ASERTTI urges strong support for this 
program and recommends funding it at the administration's fiscal year 
2009 request level of $15.5 million.
    Industries of the Future (specific).--This valued program enables 
cost-shared research with industry at major State and local research 
institutions. The program focuses on energy-intensive industries such 
as steel, aluminum, glass and metal casting. This program was reduced 
from $63 million in fiscal year 2002 to $11 million in fiscal year 
2008. The administration's fiscal year 2009 request of $11.4 million 
represents a cut over the previous year, since most research funding is 
multi-year, and funding from earlier years is not being replaced. 
Moreover the glass portion of the program has been eliminated. Congress 
authorized an expanded Energy-Intensive Industries program under the 
Energy Independence and Security Act focused on industry-specific 
research. This program authorized a focused approach that responds to 
the needs of individual industries and requires their long-term 
commitment. To begin implementing this approach, ASERTTI recommends 
fiscal year 2009 funding of $24.2 million--$12.8 million above the 
administration's $11.4 million request.
                         building technologies
    Zero Energy Commercial Buildings Initiative.--The buildings sector 
in the U.S. accounts for about 40 percent of total energy consumption 
and 40 percent of carbon dioxide emissions, and nearly half of those 
emissions and of that consumption comes from commercial buildings. A 
large multi-year initiative is critical to achieve deep savings 
throughout the commercial buildings sector. This public-private 
collaboration will combine RDD&D, as well as better tracking of real 
energy performance, strategic research, and a market transformation 
plan. This newly-authorized program will be run by DOE with input from 
an industry consortium and is a priority for ASERTTI. Thus, ASERTTI 
recommends $20 million in fiscal year 2009 to fund this new Initiative, 
in addition to the administration's request of $13 million for the 
existing Commercial Buildings Integration program, for a total of $33 
million for these activities.
    Building Application Centers.--It is critical to ensure that 
technologies developed under various building research programs make it 
into the marketplace. This important initiative within Building 
Technologies consists of a regional approach to transferring 
technologies to the marketplace by providing hands-on, cost-shared 
technical assistance to builders, communities, and others. This 
approach has substantial State, local, and private support and is 
delivering results. To date, only two regions have been provided 
funding to move emerging technologies from the laboratory into the 
marketplace. ASERTTI urges the subcommittee to encourage DOE to expand 
and support these Centers in each region of the Nation.
                          vehicle technologies
    In the fiscal year 2009 budget request, the administration has 
proposed a variety of cuts to important vehicle programs--relative to 
fiscal year 2008 levels for the combined Vehicle and Hydrogen budgets--
that would help save energy at a time of record-high gasoline prices 
and would help reduce greenhouse gas emissions. ASERTTI's priorities 
are as follows:
    Hybrid Electric Systems.--The Vehicle and Systems Simulation and 
Testing activity relates in part to heavy vehicle systems optimization 
R&D, which warrants greater attention. The administration's proposed 
reduction in funding for this activity is a concern. ASERTTI recommends 
that $7.1 million be restored to Vehicle and Systems Simulation and 
Testing, which would restore funding for this effort to $28.2 million. 
Furthermore--and quite critically--energy storage efforts must be 
accelerated. ASERTTI therefore recommends that the Energy Storage R&D 
activity be funded at $59.5 million, an increase of $10 million above 
the administration's request for R&D efforts focused on electric, 
hybrid, and plug-in hybrid vehicle battery storage capabilities.
    Following on from these activities, State and local energy 
institutions together with DOE created the Nation's first demonstration 
fleet of plug-in hybrid electric school buses. More than one dozen of 
these buses are now transporting students to and from schools around 
the Nation. ASERTTI urges the subcommittee to provide plug-in hybrid 
deployment funds for heavy duty vehicles to both expand the early 
adoption of these breakthrough vehicles and to support ongoing 
incremental improvements that will create a self-sustaining market for 
these ``lead by example'' buses. The market for plug-in hybrid school 
buses offers a means to reduce harmful air and greenhouse gas 
emissions, and the opportunity to create niche markets in the public 
sector that can grow into commercial opportunities that transform the 
market. These heavy duty plug-in hybrid applications are critical to 
meeting the Nation's energy and climate goals.
                            biomass program
    ASERTTI Supports the Administration's Fiscal Year 2009 Request of 
$225 Million.--To this end, ASERTTI urges the subcommittee to support 
funding that targets regional coordination of biomass research, 
demonstration, and technology transfer programs that emphasize the 
alignment of State and Federal resources. Currently, little attention 
or funding is provided to achieve joint State-Federal coordination in 
this critical research area. We believe the Nation could reach the goal 
of cost-competitive cellulosic-derived biofuels more rapidly if State 
and Federal research and demonstration resources were better aligned. 
ASERTTI also encourages Congress to fund analysis and communication 
activities that better inform the public about the value of biofuels. 
ASERTTI urges DOE to substantially increase the RDD&D under this 
program area for stationary applications, including the development of 
bio-based products and renewable, pipeline-quality biogas. Energy 
innovations resulting from ongoing cellulosic RD&D should be leveraged 
to address stationary application challenges, such as the need to 
increase yield from anaerobic digesters, improve thermochemical 
gasifiers, refine renewable gas cleanup for use in both power 
generation and direct use applications. These stationary applications 
also have the ability to improve the economics, and further reduce the 
carbon footprint, of biofuels production.
                          solar energy program
    The solar thermal research program is dominated by water-intensive 
technologies for cooling. It is critical, particularly as water 
resources are already scarce in some areas, and becoming more so 
throughout the United States, to focus additional RDD&D efforts on dry 
cooling systems. ASERTTI urges Congress to restore the Solar Energy 
Program to at least the fiscal year 2008 appropriated level of $168.5 
million, which is $12.4 million above the administration's fiscal year 
2009 request of $156.1 million. ASERTTI also strongly recommends that 
there be a particular emphasis going forward on dry cooling systems.
                   weatherization assistance program
    ASERTTI supports the Weatherization Assistance Program (WAP), as it 
helps low-income households, the elderly, and the disabled by improving 
the energy efficiency of low-income housing. Each year the program has 
exceeded its target and has weatherized approximately 100,000 homes. 
The program also is reducing energy consumption in participating homes 
by about 20 percent. Increased funding would allow WAP to expand 
quickly to reduce energy usage by approximately 25 percent in each 
assisted home. This represents savings that families can use to pay for 
other critical needs, while reducing the Nation's energy demand by the 
equivalent of 18 million barrels of oil every year. The 
administration's request to eliminate funding for the program should be 
rejected, and ASERTTI urges the subcommittee to fund WAP at no less 
than $300 million.
                                 ______
                                 
   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. We urge 
you to fund the DOE Office of Science at the requested level of $4.7 
billion or higher as authorized by the America COMPETES Act.
    UCAR is a 71-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 over 50 
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 is concerned about 
the final outcome for basic research in many areas of the fiscal year 
2008 Consolidated Appropriations Act, including the DOE Office of 
Science. We do understand that appropriators were faced with extremely 
difficult funding choices, but the negative consequences of not 
investing now in science that contributes to our economy, standard of 
living, and safety and security, will only multiply in the future as 
this country's global competitors invest on a broader scale than ever 
before. We appreciate your support for last year's America COMPETES Act 
and urge you to reinstate the doubling track for the Office of Science 
with the fiscal year 2009 budget, and/or with a supplement to the 
fiscal year 2008 budget.
    There will surely be immense budget pressures facing you again in 
your deliberations this year, but we ask that you focus on science as a 
national priority. We urge you to fund the DOE Office of Science at the 
requested level of $4.7 billion or higher as authorized by the America 
COMPETES Act, ask that you make the Office a national priority when 
difficult choices have to be made at the end of the budget process, and 
that you enable the agency to apply the entire appropriation toward 
planned agency research priorities.
Biological and Environmental Research (BER)
    Within the Office of Science, the Biological and Environmental 
Research (BER) program has as a key goal, the development of knowledge 
necessary to identify, understand, and anticipate the potential health 
and environmental consequences of energy production and use. These are 
goals that are essential to our country's well being and security. 
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. All BER research 
projects, other than those that have been in the ``extra projects'' 
category, undergo regular peer review and evaluation.
    I urge the subcommittee to fund Biological and Environmental 
Research at the level of the fiscal year 2009 budget request, $568.9, a 
4 percent increase over the fiscal year 2008 level, 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
    Within BER, the Climate Change Research subprogram addresses some 
of the most critical research priorities facing the world today 
including developing the ability to predict climate change and its 
impacts on global and regional scales, exploring the impacts of high 
levels of CO2 on the Earth system, and providing the 
scientific foundation necessary to help mitigate those impacts.
    One example of the compelling work being done is a BER contribution 
to the International Polar Year (IPY) utilizing the Community Climate 
System Model to simulate eight future emission scenarios. The results 
projected a decline in sea ice, with one scenario showing the Arctic 
becoming ice-free in summer at the end of this century--an occurrence 
that could change sea level, economies, world trade, and political 
stability. Such advanced modeling activities supported by the BER 
Climate Change Research are obviously critical to our understanding of 
the current global climate and areas that are being transformed by 
rapid change, but they are also critical to our understanding of what a 
changed world may look like in the very near future.
    In 2009, Climate Change Research funded work will continue to focus 
on resolving the role of clouds and aerosols in climate change and 
their interaction with solar radiation. While great progress has been 
made in recent years, this remains one of the greatest scientific 
uncertainties in climate change prediction. As we learn more about 
climate change and the anthropogenic influences that are forcing change 
at an unnatural rate, those results must be made accessible to 
researchers working to understand the regional and local impacts that 
climate change will produce. A new Climate Change Research effort is 
strengthening the connections between the climate modeling research 
communities and those that address integrated assessment of impacts in 
addition to exploring adaptation methods. To be of use at regional 
scales (where details make tremendous differences at local ecosystem 
levels where we all live), models must be resolved at ever higher 
resolutions to project local impacts with any reasonable certainly. 
Running models at these resolutions presents complex problems of data 
retrieval, archiving, analysis, and dissemination for which BER is 
developing the tools and capabilities necessary.
    The Climate Change Research goal to deliver improved regional 
climate data and models 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 continue to appear.
    The Climate Change Research Request of $154.9 million for fiscal 
year 2009 is a 13.2 percent increase over fiscal year 2008 which will 
make up some of the ground lost in previous years. Within this amount, 
Climate Change Modeling receives $45.4 million--a critical 46 percent 
increase over fiscal year 2008. These additional resources are 
absolutely necessary for the work that must be accelerated at the 
regional level. I urge the subcommittee to fund Climate Change Research 
at the fiscal year 2009 requested level of $154.9 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 to address the 
interaction of the earth's systems and global climate change. ASCR is 
one of the most important resources supporting climate work in this 
country.
    Within ASCR, several programs are of particular importance to 
climate change computer modeling work, particularly through the 
development of complex software. The Leadership Computing Facility 
(LCF) at Oak Ridge National Laboratory (ORNL) provides a high 
performance computing resource and, in 2009, will continue the 
development of its 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, as is Argonne National Laboratory (ALCF) which is 
strengthening its infrastructure to prepare for future computing 
capacity. 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 subcommittee to support the President's fiscal 
year 2009 request of $368.82 million for DOE Advanced Scientific 
Computing Research, a 5 percent increase over fiscal year 2008, and to 
enable DOE to apply the entire amount toward planned national 
priorities.
Scientific Discovery Through Advanced Computing (SciDAC)
    BER and ASCR (through its Computational Partnerships program) 
partner to support Scientific Discovery Through Advanced Computing 
(SciDAC), a progressive program that provides the innovations in 
computational research and development for petascale computational and 
data management endeavors, including climate research. Along with very 
broad scientific applications, a current SciDAC goal is to break 
through the uncertainty still challenging researchers concerning the 
role of clouds and aerosols in climate change. Additional SciDAC 
investments address the role of land-ice in the climate system, 
improved representation of ice sheets in global circulation models, and 
understanding of climate extremes in a changing climate. Much of the 
research is designed to provide global community access to the data for 
impact studies as well as national and international assessments (e.g., 
the Intergovernmental Panel on Climate Change) concerning the 
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 through a merit 
review process and carried out via a synthesis of talent drawn from 
universities, national laboratories, and private institutions.
    BER funding for SciDAC is requested at $7.7 million for fiscal year 
2009 with ACSR supporting SciDAC Computational Partnerships at $52.0 
million. I urge the subcommittee to support the President's fiscal year 
2008 requests within BER and ASCR for overall SciDAC funding.
                                 ______
                                 
                Prepared Statement of RTI International
    I am writing in support of the following subprogram in the fiscal 
year 2009 Energy and Water appropriations measure: Department of 
Energy--Fossil Energy Research and Development: Coal, Fuels and Power 
Systems, Advanced Integrated Gasification Combined Cycle.
    I respectfully request that the President's $69 million request for 
the Advanced Integrated Gasification Combined Cycle subprogram be fully 
funded.
    Congress and the administration have highlighted energy as critical 
to America's economic future and national security. It is all too clear 
that the United States requires cost-effective technologies for clean 
use of coal to generate electricity and fuel vehicles, to save jobs, 
and enable domestic growth in critical industries such as chemicals, 
fertilizer, pulp and paper, metals, and glass.
    Funded by Congress, the Advanced Integrated Gasification Combined 
Cycle subprogram has a historic opportunity to enable such benefits to 
be achieved in a manner that is environmentally responsible.
    DOE's plans for 2009 include scaling up a new technology that 
greatly reduces the cost and improves the performance of a crucial step 
in any clean use of coal: cleaning the synthetic gas--``syngas''--that 
is made from coal. In every opportunity for clean use of coal, the 
first steps are to make and then clean the syngas. The new technology, 
called ``warm-gas clean-up,'' has lower capital and operating costs 
than existing technologies, and does a better job of removing 
pollutants. This technology meets or exceeds requirements in the Energy 
Policy Act of 2005 for reduced sulfur and mercury emissions, 
contributes to meeting the EPACT's requirements for efficiency, and 
enhances the opportunity for carbon capture. Furthermore, this 
technology provides 10 percent greater efficiency compared with current 
technologies for generating electricity from coal, which causes a 10 
percent reduction in carbon dioxide emissions without additional costs 
or equipment.
    The administration has included sufficient funds for DOE's plans to 
scale up this syngas-cleaning technology. DOE's plans are well-timed, 
because there is substantial industry interest in scaling up the 
technology.
    Time is of the essence to lower the costs of gasification. 
Worldwide, electric utilities, chemical companies, and other industries 
are making decisions today about how they will use coal in the near 
future. Better technology at lower costs will enable expanded use of 
gasification, with all of its environmental benefits, instead of 
conventional approaches. For example, gasification for generating 
electricity emits less carbon dioxide than conventional power plants. 
Warm-gas clean-up prevents acid-forming pollutants without the solid 
waste and carbon dioxide problems that come with scrubbing sulfur from 
power plants' emissions. Further, warm-gas clean-up enables a cleaner 
syngas, which means cleaner exhaust gas from the electric generating 
turbine at greater thermal efficiency. That in turn yields benefits 
such as significantly reduced cost to capture carbon (and the EPA 
already notes that carbon capture will be much less costly with 
gasification than with conventional power plants).
    To realize the environmental and economic benefits of gasification, 
DOE must have sufficient funds to implement the bipartisan intent of 
Congress expressed in the Energy Policy Act of 2005.
    I recognize the constraints by which the subcommittee is bound. I 
appreciate your consideration of my request that the Advanced 
Integrated Gasification Combined Cycle subprogram in DOE's Fossil 
Energy Research and Development be funded at or above the President's 
$69 million request for fiscal year 2009.
    If you have any questions or require additional information, please 
feel free to contact me. I look forward to working with you as the 
fiscal year 2009 Energy and Water appropriations bill takes shape.
                                 ______
                                 
             Prepared Statement of Florida State University
    Florida State University is seeking $4,000,000 from the U.S. 
Department of Energy (Electricity Transmission and Distribution) for 
our Electric Power Infrastructure, Security R&D Program.
    Mr. Chairman, I would like to thank you and the members of the 
subcommittee for this opportunity to present testimony before this 
subcommittee. I would like to take a moment to briefly acquaint you 
with Florida State University.
    Located in Tallahassee, Florida's capitol, FSU is a comprehensive 
Research university with a rapidly growing research base. The 
University serves as a center for advanced graduate and professional 
studies, exemplary research, and top-quality undergraduate programs. 
Faculty members at FSU maintain a strong commitment to quality in 
teaching, to performance of research and creative activities, and have 
a strong commitment to public service. Among the current or former 
faculty are numerous recipients of national and international honors 
including Nobel laureates, Pulitzer Prize winners, and several members 
of the National Academy of Science. Our scientists and engineers do 
excellent research, have strong interdisciplinary interests, and often 
work closely with industrial partners in the commercialization of the 
results of their research. Florida State University had over $190 
million this past year in sponsored research awards.
    Florida State University attracts students from every State in the 
Nation and more than 100 foreign countries. The University is committed 
to high admission standards that ensure quality in its student body, 
which currently includes National Merit and National Achievement 
Scholars, as well as students with superior creative talent. Since 
2005, FSU students have won more than 30 nationally competitive 
scholarships and fellowships including 2 Rhodes Scholarships, 2 Truman 
Scholarships, Goldwater, Jack Kent Cooke and 18 Fulbright Fellowships.
    At Florida State University, we are very proud of our successes as 
well as our emerging reputation as one of the Nation's top public 
research universities.
    Mr. Chairman, let me summarize our primary interest today.
    The electric power system is critical as a fundamental enabling 
infrastructure for every aspect of the economy, national security, and 
defense. Large-scale failures in the electrical grid systems of North 
America and Europe have made us aware of the critical nature of our 
dependence on the availability of electrical power. A contributing 
factor to these failures was a lack of detailed understanding of the 
system response to an initial minor disturbance. Lack of investment in 
power systems grids over the last 20-30 years has eroded the redundancy 
traditionally built into the system. Over time, this lack of investment 
in R&D resulted in the loss of many power engineering educational 
programs. The Nation is now facing an acute shortage of power 
engineers.
    This multi-university project will build on existing expertise at 
FSU, other Florida universities, and several of DOE's National 
Laboratories. The research conduced will focus on critical issues 
associated with modernizing the U.S. electric grid to improve 
reliability, security, and efficiency and to support new technologies. 
Much of the research will include industrial partners, thereby ensuring 
rapid technology transfer from research-to-practice. These activities 
include:
  --Employing the real time digital simulator capability at FSU to 
        simulate real-time behavior of regional and local power systems 
        and interconnections and to examine areas of vulnerability to 
        major outages and cascading failures. We plan that this will 
        become a national user facility with remote access capability 
        over high-speed connections.
  --Use of the real-time digital simulator through comparisons of 
        concurrent real time modeling and an actual system to assess 
        new technologies.
  --Investigation into technology needs for enabling wide area 
        measurement, communications, and control advances for improved 
        coordination over large areas.
  --Advanced materials R&D for superconductivity applications in power 
        systems.
    Through coordinated efforts across multiple universities, FSU will 
lead the initiative to address future needs to assure reliable energy. 
We are seeking $4,000,000 in fiscal year 2009 for this important 
project.
                                 ______
                                 
       Prepared Statement of the Ground Water Protection Council
    Honorable Chairman Dorgan and members of the subcommittee, the 
following request by the Ground Water Protection Council (GWPC) is for 
continued funding in fiscal year 2009, of the U.S. Dept of Energy's Oil 
Technologies-Effective Environmental Protection: Risked Based Data 
Management (RBDMS) and Cost Effective Regulatory Approaches (CERA) 
programs. The request for fiscal year 2009 is at the fiscal year 2008 
enacted level of $1.2 million (RBDMS) and $500,000 (Energy Efficiency).
  --RBDMS ACCOMPLISHMENTS.--Data utilities from the Risk Based Data 
        Management System are installed and under use in 25 States and 
        1 Indian Nation. The use of RBDMS streamlines State oil and gas 
        permit and response times, enhances ground water protection, 
        provides improved public and industry joint access to data and 
        records, saves money for State and Federal agencies, reduces 
        paper reporting, increases production for small independent 
        domestic operators, and creates real time efficiencies in State 
        and Federal domestic oil and gas programs. Over the life of 
        this successful program, the States have matched Federal 
        funding with their own funds at a 3:1 ratio. If state in-kind 
        contributions are added, the State-to-Federal participation 
        ratio increases substantially. This has been, and continues to 
        be, a sound investment of Federal funds.
    Fiscal year 2009 funding would provide:
    E-Commerce.--The development of new RBDMS e-commerce applications 
in fiscal year 2009 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, Federal agencies and increased domestic oil and gas 
production.
  --Cost Effective Regulatory Approaches.--The GWPC will focus on three 
        cost effective priorities: (1) reducing the costs of 
        information exchange between the oil and gas and mining 
        industries and regulatory agencies, (2) eliminating duplicative 
        reporting requirements across State and Federal jurisdictions, 
        while (3) providing the reference data needed to make informed 
        decisions about environmental protection and resource 
        development.
  --Energy-Water Sustainability.--The USDOE has a goal of minimizing 
        water consumption by energy producing industries. The GWPC will 
        develop applications that will aid State agencies in tracking 
        water quality and quantity data related to oil and gas 
        production. This will assist States in the analysis of related 
        water consumption. Public education efforts through our Ground 
        Water Report to the Nation series will emphasize ground water 
        availability facts and realistic short and long term 
        conservation efforts that can be made locally.
  --CO2 Geo-Sequestration.--Capture of CO2 from 
        power plants is one potential tool for decreasing the release 
        of this gas to the atmosphere. However, storage or 
        sequestration of its liquid form in geologic formations must be 
        done with protection of underground sources of drinking water 
        in mind. The GWPC will continue to work in cooperation with 
        State and Federal agencies to apply sound science in the 
        development of effective regulations, policy and technical 
        guidance, with a focus on protecting the Nation's invaluable 
        ground water resources. With additional funds we would be able 
        to develop a geo-sequestration volume information tracking 
        system.
    THE GWPC.--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. 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 USDOE. We hope the subcommittee will 
continue to support these efforts in fiscal year 2009 at the fiscal 
year 2008 level of $1.2 million (RBDMS) and $500,000 (Energy 
Efficiency).
    We are grateful for your past support and would like to also 
request that the subcommittee continue to support the USDOE Office of 
Fossil Energy, and the National Energy Technology Lab (NETL). Without 
their national presence not only our successes, but those of many 
others would not have been accomplished. The programs they administer 
serve a valuable purpose and are important to the long term efficiency 
of the front line State and Federal agencies and the small domestic 
operators who would not otherwise have been able to extend the life of 
domestic reservoirs and increase environmental and ground water 
protection at the same time.
                                 ______
                                 
       Prepared Statement of the National Hydropower Association
    The National Hydropower Association (NHA) \1\ appreciates the 
opportunity to submit this statement regarding hydropower funding 
priorities for the fiscal year 2009 appropriations budget cycle. NHA 
requests $54 million in fiscal year 2009 Energy & Water Appropriations 
for the Department of Energy's Waterpower Program.
---------------------------------------------------------------------------
    \1\ NHA is a non-profit, national trade association dedicated to 
promoting the Nation's largest renewable resource and advancing the 
interests of the hydropower and new ocean, tidal and instream 
hydrokinetic industries and the consumers they serve.
---------------------------------------------------------------------------
hydropower's current and future potential as the nation's most robust, 
                       renewable energy resource
    Congress is currently examining the implications of climate change 
on the environment, economy, and energy security of the United States. 
Crucial to the climate debate is the need for policymakers to work 
together to promote the development, deployment and expanded use of 
existing renewable resources, as well as innovative new technologies, 
that can play a significant role in addressing climate issues while 
maintaining a reliable and affordable electricity supply system. 
Hydropower of today and new water power technologies of tomorrow can 
provide significant benefits to these national energy and environmental 
goals.
    Currently, hydropower provides sizeable benefits. As the leading 
renewable energy resource in the country, it accounts for 7 percent of 
all of the Nation's electricity in terms of actual generation and 
approximately 9 percent in terms of actual capacity. Overall, 
hydropower accounts for 77 percent of actual renewable electricity 
generation and 83 percent of the Nation's renewable energy capacity.
    As an important source of electricity, hydropower offers advantages 
over other generation options. Importantly, hydroelectric units are 
able to start, stop, and change output quickly, which provides 
important grid stability and reliability benefits. As such, hydro has 
the ability to firm intermittent resources such as wind and solar, a 
benefit which becomes all the more important as the Nation moves to 
incorporate more renewables in its energy portfolio. Finally, 
hydropower's non-power benefits include water supply, flood control, 
irrigation, navigation and recreation.
    Hydropower's potential contribution is notable--from efficiency 
improvements and capacity upgrades at existing projects, to new 
development at existing non-powered dams, to significant new capacity 
gains from emerging waterpower technologies, such as ocean, tidal and 
instream hydrokinetic projects. According to a March 2007 Electric 
Power Research Institute (EPRI) report titled, ``Assessment of 
Waterpower Potential and Development Needs,'' the potential for 
increases in capacity, mostly without the need to build dams, is 
conservatively estimated at 23,000 MW by 2025, with an overall estimate 
of 85,000 to 95,000 MWs with appropriate public policy support. This 
includes:
  --2,300 MW capacity gains at existing conventional hydropower 
        facilities;
  --5,000 MW of new conventional hydropower at existing non-powered 
        dams;
  --2,700 MW of new small and low head power conventional hydropower 
        (<30 MW installed capacity);
  --10,000 MW from ocean wave energy technologies; and
  --3,000 MW from hydrokinetic technologies (river-based).
    Realization of these capacity gains will require continued and 
increased research, development, demonstration and deployment (RDD&D) 
support and other economic incentives as well as planning, testing and 
impact evaluation assistance. As stipulated in EPAct 2005, the 
Secretary of Energy is required to conduct R&D for conventional and new 
waterpower technologies.\2\
---------------------------------------------------------------------------
    \2\ EPAct 2005, title IX, sec. 931--``Conduct a program of 
research, development, demonstration and commercial application for 
cost competitive technologies that enable the development of new and 
incremental hydropower capacity, adding diversity of the energy supply 
of the United States, including: (i) Fish-friendly large turbines. (ii) 
Advanced technologies to enhance environmental performance and yield 
greater energy efficiencies. (. . .) The Secretary shall conduct 
research, development, demonstration, and commercial application 
programs for--(i) ocean energy, including wave energy (. . .) and (iv) 
kinetic hydro turbines.''
---------------------------------------------------------------------------
   nha's statement requests full funding of the suite of initiatives 
  identified in the epri report under the department of energy's new 
    waterpower r&d program at a level of $54 million per fiscal year
Waterpower Technology Development Needs
    Through direct contact with NHA members, which include hydropower 
owners and operators, ocean, tidal and instream hydrokinetic technology 
developers, and the analysts and experts cited in the EPRI report, NHA 
analyzed the report's suite of development recommendations and 
concluded that the EPRI report provides a useful model, a roadmap from 
which to guide activities under the DOE Waterpower R&D program. As 
such, this statement highlights and summarizes the various R&D 
initiatives outlined in the report. These directives are intended to 
address the needs left unfunded by the previous RDD&D program for 
hydropower and would expand the Department's efforts.
    Waterpower Realization Committee.--To provide the initial guidance 
and future oversight to benchmark results of the RDD&D program in terms 
of real waterpower capacity and generation gains. This committee, made 
up of representatives from industry, government resource agencies and 
non-governmental organizations would guide RDD&D efforts and monitor 
progress to ensure the realization of the capacity gains. The committee 
would measure on an annual basis the capacity gains from the various 
initiatives and make recommendations for refinement of the program, as 
necessary.
    Waterpower Performance Initiatives.--The suite of activities and 
programs available to meet the goals of the program are outlined below.
Advanced Water Energy Science
    Statement of Need.--The industry has identified the need for 
advanced scientific techniques to support the following activities:
  --Advance Water Energy Science
    --Work that would support the industry's need to better predict 
            flow measurement. Accurate flow values are needed for a 
            variety of operation and environmental performance topics.
    --Modeling work to improve hydraulic modeling techniques.
    --Turbine research in order to develop better materials resistant 
            to cavitation and erosion damage.
    --Generator research in order to discover materials suitable for 
            use as stator core; build one prototype stator core; and 
            study it over a period of time.
  --Meteorological Forecasting and Optimal Dispatch of Energy/Water 
        Systems.--Work in this area will examine and determine the 
        benefits of integrating wind and other intermittent renewable 
        energy resources with hydropower and pumped storage resources. 
        Specific work could include:
    --Near-term forecasting of meteorological conditions will help 
            identify needs for improving meteorological data and 
            instrumentation.
    --Long-term projections of global climate change and effects of 
            other cycles and other factors on regional meteorological 
            conditions and future regional electricity and water 
            demand, energy and electricity supply mix, and fuel costs.
    --Research into the integration of meteorological information and 
            load, energy price, and other forecasts with energy and 
            water system operations.
  --Integration and Control of Renewable Energy Technologies.--Greater 
        opportunities to adopt renewable energy technologies and their 
        integration with water resources can be realized if research is 
        provided to develop advanced integration and control 
        mechanisms. Funding could be directed to the development and 
        demonstration of hybrid control systems to include real time 
        pricing, resource optimization and optimal economic value 
        methodologies.
Hydropower Environmental Performance
    Statement of Need.--The following objectives will improve 
hydropower performance by maximizing hydroelectric generation and 
protecting fisheries resources.
  --Complete RDD&D for Fish-Friendly Turbines.--Continued work on fish-
        friendly turbine development offers the opportunity to address 
        energy and environmental impacts and needs. Activities under 
        this category include:
    --Continue prototype Alden/Concepts NREC turbine development in 
            preparation for commercialization. Additional fish survival 
            testing.
    --Continue testing of the advanced turbines at Wanapum dam.
    --Perform power efficiency testing, and
    --Deploy and evaluate the Alden/Concepts NREC design at School 
            Street Project, NY or other location.
  --Bioengineering for Fish Passage and Entrainment Mitigation.--
        Technologies are needed to solve the problem of fish mortality 
        involving hydropower structures. Continued work activities 
        include:
    --Basic research on the effect of hydraulic process on fish 
            movement.
    --Utilize biocriteria in the development of new turbine and fish 
            passage designs.
    --Conduct demonstrations of new technology to determine 
            effectiveness in real-world applications.
  --Water Quality Mitigation Technology.--New and more cost-effective 
        and less water intensive solutions are needed to address 
        dissolved oxygen and water temperature issues involving water 
        quality. Research is needed to:
    --Review state of the art techniques for addressing these issues.
    --Develop new technologies and target test sites for testing.
    --Conduct cost-shared demonstrations of new technologies.
  --Advanced Weirs for Flow Re-regulation and Aeration.--More work is 
        needed to optimize the design of weirs and demonstrate how they 
        can be used to improve the efficiency of existing projects. 
        Research activities could include hydraulic design studies, 
        coupled with model tests and prototype demonstrations.
Hydropower Operational Performance
    Statement of Need.--Improved forecast models and the implementation 
of advanced technologies can play a crucial role in enhancing the 
operational performance of hydropower facilities. The following 
objectives will improve operations at facilities.
  --Hydropower Operation Decision Support Analysis.--Need to understand 
        various hydropower generation sensitivities to various 
        processes. Research activities could include:
    --Determination of sources of hydropower generating variability 
            across spatial and temporal scales.
    --Develop improved climate/meteorological stream flow forecast 
            models.
    --Incorporate understanding and forecast models into optimization 
            and decision support models.
    --Demonstrate benefits of using improved decisions support models.
  --Demonstration Testing of the Advanced Hydropower Turbine System 
        (AHTS) to Increase Use of Efficient Designs.--Demonstration 
        activities will help potential users understand and overcome 
        potential risks of using new technologies.
  --Advanced Electrical Equipment for Renewable Integration.--More 
        research into these technologies would increase efficiency and 
        reliability by providing ancillary services to the electric 
        grid.
    Waterpower Technology Development.--This part of the program would 
use funds to advance hydrokinetic and ocean energy technology in four 
program areas:
Hydrokinetic Resource Assessment
    Statement of Need.--New generation technologies are on the 
threshold of implementation, but require additional site assessment and 
a mapping program to outline the criteria for development. A complete 
resource assessment and criteria protocol for hydrokinetic sites in the 
United States is required and should be available to potential 
developers, similar to the resource assessment for small hydropower 
completed by DOE.
Hydrokinetic Environmental Profiling
    Statement of Need.--Advanced technologies on the threshold of 
implementation often are stalled because prospective users cannot 
justify implementation risks and lack of knowledge among developers 
regarding the environmental and institutional barriers. Research to 
develop minimum time environmental data collection and analysis 
techniques for use in site evaluation of hydrokinetic machines is 
needed. This research would standardize monitoring techniques for 
evaluating the environmental impacts of hydrokinetic technologies and 
help expedite the deployment of these technologies.
Hydrokinetic Technology Improvement
    Statement of Need.--Instream kinetic, tidal/wave energy and kinetic 
hydropower and pressure systems for manmade conduit systems all require 
test support and demonstration funding to support development, 
deployment and realization of their potential. Research is needed to 
determine proof of concepts with single prototype units and demonstrate 
operational viability and environmental effects with pre-commercial 
multiple unit projects. Support is also needed to identify 
universities, labs, and other entities where proof of concepts and 
operational tests can be conducted and environmental effects assessed.
Advanced Ocean Energy
    Statement of Need.--Federal funding of ocean energy RDD&D and 
required regulatory activities would enable the United States to 
develop new domestic energy supplies, create jobs and capture an 
emerging global export market. Research is needed to develop an ocean 
wave energy technology industry to commercial deployment level 
including research into marine resources and converters; energy 
conversion, delivery and storage; environmental and cost monitoring; 
and field deployment.
                               conclusion
    Hydropower is already a major source of energy for the Nation. The 
nascent ocean, tidal and instream hydrokinetic technologies are at the 
beginning stages of commercial deployment. Yet both technologies have a 
tremendous growth potential that could be realized through sustained 
Federal RDD&D support. These renewable resources are clean, climate-
friendly technologies that can provide significant base load power to 
the United States at a time when our demand for electricity continues 
to increase dramatically. By expanding the funding for the DOE 
Waterpower R&D program, the Nation could soon realize the tremendous 
energy and environmental benefits of maximizing existing hydropower 
projects and infrastructure as well as the suite of emerging waterpower 
technologies.
                                 ______
                                 
            Prepared Statement of the Health Physics Society
    This written testimony for the record for fiscal year 2009 requests 
reinstatement of funding for the Nuclear Education program appropriated 
to the Nuclear Regulatory Commission (NRC) in fiscal year 2008 to 
include at least $1.5 million for support of health physics programs, 
students, and faculty. This support is necessary to 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. As explained below, justification by the Office of 
Management and Budget (OMB) to rescind the NRC Nuclear Education 
program is not applicable to the health physics academic programs.
    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 that serves as a home and champion for the health 
physics profession as this profession cuts across all these sectors. 
However, health physics is necessary for all these sectors to exist as 
it supports the principle disciplines in these programs that are 
championed by multiple Federal agencies, such as engineers, medical 
professionals, law enforcement professionals, military personnel, and 
environmental scientists.
    As the Nation's development and use of radioactive materials grew 
following the end of World War II, the Nation's demand for health 
physicists increased in the areas of energy, defense, public health, 
and environmental protection. This need was mainly supported by student 
fellowships and scholarships 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 Department of 
Energy (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. With this dwindling support, the supply 
of new health physicists declined and the age of the existing health 
physics workforce increased despite the continued need for health 
physicists in energy, defense, public health, and environmental 
protection programs as well as an exponential growth in the medical and 
academic community. Due to these circumstances a human capital crisis 
was created in health physics.
    As the health physics human capital crisis grew and loomed in the 
early years of the 21st century, Congress and the DOE took action to 
add support to the nuclear engineering academic programs through DOE 
programs in the Office of Nuclear Energy (NE) and eventually agreed 
that this was an appropriate support mechanism for the health physics 
academic program. In fiscal year 2005, just 4 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. 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. 
Despite the fact that the need for an increased supply of health 
physics professionals continued to exist, the DOE ceased funding the 
Congressionally authorized DOE-NE health physics fellowship and 
scholarship program after only 2 fiscal years of funding the programs 
at minimal levels.
    In fiscal year 2008, Congress transferred appropriations for a 
Nuclear Education program, including health physics programs, to the 
NRC. The Health Physics Society (HPS) applauds this insightful action. 
The NRC does have a vested interest in the radiation safety associated 
with most of the sectors covered by the health physics profession. 
Although the NRC quickly addressed the demands of starting a new 
education support program by opening two grant opportunities for 
student and faculty support, the administration has not included 
continuation of the program in their budget for fiscal year 2009.
    The OMB has provided a justification for rescission of the Nuclear 
Education program. This OMB assessment is patently wrong with regards 
to health physics programs.
    The OMB states ``. . . target levels for the undergraduate 
enrollment have been met . . .'' and ``Since the 1990s, enrollment 
levels in nuclear education programs have tripled . . .''
    Specific to ``target levels,'' since DOE has only funded health 
physics programs for 2 years, they have never 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 three graduate fellowships in fiscal year 2006 
and zero 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 Health Physics 
Program Directors Organization (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 HPS does not feel that undergraduate levels are an 
appropriate metric to measure the success of an academic program. 
Undergraduate levels are not viewed significant by university Deans 
looking to justify graduate programs at the Masters and Doctorate 
level. Furthermore, university administrators will not commit to 
replacing an increasingly large number of retiring health physics 
faculty unless the Federal Government demonstrates its commitment to 
investing in the research and academic health physics infrastructure 
necessary to support new faculty hires in this vital profession.
    The OMB justification also states ``. . . and the number of 
universities offering nuclear-related programs also has increased.'' 
Actually, 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, which belies the OMB statement.
    We find the OMB justification ignores the value of Federal long-
term investment in academic infrastructure and ignores the value of 
professional radiation safety professionals to the successful 
protection of workers, members of the public, and the environment while 
benefiting from the use of nuclear technologies.
    We consider it would take approximately $1,000,000 to get to the 
HPPDO plan of 20 fellowships and 20 scholarships in health physics. In 
addition, funding of $500,000 should allow for up to two young faculty 
members in health physics academic programs to receive grant support at 
the level offered by the NRC fiscal year 2008 grant opportunities. 
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 while 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. However, it will go a 
long way to help building the student and faculty infrastructure needed 
to reach this goal.
    The subcommittee's favorable consideration of this request will 
help meet our Nation's radiation safety needs of the future.
                                 ______
                                 
           Prepared Statement of the Gas Turbine Association
    The Gas Turbine Association (GTA) appreciates the opportunity to 
provide the United States Senate Committee on Appropriations 
Subcommittee on Energy and Water Development with our industry's 
statement regarding fiscal year 2009 Department of Energy (DOE) Office 
of Fossil Energy (FE) Advanced Turbines R&D at $55 million and Energy 
Efficiency and Renewable Energy (EERE) Industrial Technologies Program 
(ITP) Distributed Energy at $60 million funding levels.
    From Connecticut to California, States are working to put in place 
regulations to dramatically reduce greenhouse gas emissions. At the 
same time, our economy will be demanding more electric power to 
maintain its growth. Without new technology, the power generation 
industry will be hard pressed to produce additional electric capacity, 
while at the same time meet the strict greenhouse gas emissions 
standards being set by States and the Federal Government.
    Federal investment in research and technology development for 
advanced gas turbines that are more versatile, cleaner, and have the 
ability to burn hydrogen-bearing reduced carbon synthetic fuels and 
carbon-neutral alternative fuels is needed to ensure the reliable 
supply of electricity in the next several decades. Domestic coal based 
Integrated Gasification Combined Cycle (IGCC) with carbon capture and 
sequestration is one such approach that would significantly supplement 
available supplies of domestic natural gas to guarantee an adequate 
supply of clean and affordable electric power. Alternative fuel choices 
range from imported LNG, coal bed methane, and coal-derived synthetic 
or process gas to biogas, waste-derived gases and hydrogen. Research is 
needed to improve the efficiency, reduce capital and operating costs, 
and reduce emissions.

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

                $55 million for doe fe advanced turbines
            $60 million for doe eere itp distributed energy
    Supporting these programs provides the following benefits:
  --Efficient and reliable turbine technologies for alternative fuel, 
        near-zero-emission power plants
  --Energy security by utilizing domestic energy sources to reduce the 
        demand for foreign energy imports
  --Globally competitive electricity prices for U.S. industries, 
        businesses and homes, with reduced greenhouse gas emissions 
        from power plants

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

    Because policy makers have begun implementing rigid CO2 
regulatory mandates, failure to invest now will translate into stifled 
economic growth and the loss of our global competitiveness later. The 
Advanced Turbines program needs $55 million and the Distributed Energy 
budget needs to be restored to $60 million in fiscal year 2009 to 
ensure a smooth transition into a low-carbon economy.
              gas turbines reduce greenhouse gas emissions
    The gas turbine industry's R&D partnership with the Federal 
Government has steadily increased power plant efficiency to the point 
where natural gas fired turbines can reach combined cycle efficiencies 
of 60 percent, and quick-start simple cycle peaking units can reach 46 
percent. The gas turbine's clean exhaust can be used to create hot 
water, steam, or even chilled water. In such combined heat and power 
applications, overall system efficiency levels can reach 60 to 85 
percent LHV. This compares to 40-45 percent for even the most advanced 
thermal steam cycles (most of which are coal fired).




    Gas turbines already play a very significant role in minimizing 
greenhouse gas emissions worldwide. Gas turbines are both more 
efficient and typically burn lower carbon fuels compared to other types 
of combustion-based power generation and mechanical drive applications. 
The Nation needs to reinvigorate the gas turbine/government partnership 
in order to develop new, low carbon power plant solutions without 
increasing our reliance on natural gas. This can be done by funding 
research to make gas turbines more capable to utilize hydrogen and 
synthetic fuels as well as increasing the efficiency, durability and 
emissions capability of natural gas fired turbines. If Congress 
provides adequate funding to DOE's turbine R&D efforts, technology 
development and deployment will be accelerated to a pace that will 
allow the United States to achieve its emissions and energy security 
goals.
technologies for advanced igcc/h2 gas turbine--reducing the 
                   penalty for co2 capture
    The turbines and related technologies being developed under the DOE 
FE Advanced Turbines program will directly advance the performance and 
capabilities of future power generation with CO2 capture and 
sequestration. Advances are needed to offset part of the power plant 
efficiency and output reductions associated with CO2 
capture. Program funding is required to cost-share in the technology 
development of advanced hydrogen/syngas combustors and other components 
to realize the DOE goals.
    Several GTA member companies are working cost-share programs with 
the DOE to develop technologies for advanced gas turbine power plants 
with carbon capture. These technologies will: (1) increase plant 
efficiency; (2) increase outputs; and (3) allow further reductions in 
combustion emissions of hydrogen rich fuels associated with 
CO2 capture and sequestration. This will help offset some of 
the efficiency and output penalties associated with CO2 
capture. These programs are funding technology advancement at a much 
more rapid rate than industry can do on their own.
    The need for increased levels of Federal cost-share funding is 
immediate. The fiscal year 2009 funding request for the Advanced 
Turbines program is inadequate to meet DOE's 2010 Advanced Power System 
goal of an IGCC power system with high efficiency (45-50 percent HHV), 
near-zero emissions and competitive capital cost. To meet this 2010 
goal, the researchers must demonstrate a 2 to 3 percentage point 
improvement in combined cycle efficiency above current state-of-the-art 
Combined Cycle turbines in IGCC applications.
    The plan for the IGCC-based FutureGen-type application is to 
develop the flexibility in this same machine with modifications to 
operate on pure hydrogen as the primary energy source while maintaining 
the same levels of performance in terms efficiency and emissions. The 
goal is to develop the fundamental technologies needed for advanced 
hydrogen turbines and to integrate this technology with CO2 
separation, capture, and sequestration into a near-zero emission 
configuration that can provide electricity with less than a 10 percent 
increase in cost over conventional plants by 2012.
    The Advanced Turbines program is also developing oxygen-fired (oxy-
fuel) turbines and combustors that are expected to achieve efficiencies 
in the 44-46 percent range, with near-100 percent CO2 
capture and near-zero NOX emissions. The development and 
integrated testing of a new combustor, turbine components, advanced 
cooling technology, and materials in oxy-fuel combustors and turbines 
is needed to make these systems commercially viable.
    The knowledge and confidence that generating equipment will operate 
reliably and efficiently on varying fuels is essential for the 
deployment of new technology. Years of continued under funding of the 
Advanced Turbines program has already delayed the completion dates for 
turbine R&D necessary for advanced IGCC, as well as timing for a 
FutureGen-type plant validation.
                      mega-watt scale turbine r&d
    In the 2005 Enabling Turbine Technologies for High-Hydrogen Fuels 
solicitation, the Office of Fossil Energy included a topic area 
entitled ``Development of Highly Efficient Zero Emission Hydrogen 
Combustion Technology for Mega-Watt Scale Turbines''. Turbine 
manufacturers and combustion system developers responded favorably to 
this topic, but DOE funding constraints did not allow any contract 
awards. The turbine industry recommends a follow-up to this 
solicitation topic that would allow the developed combustion technology 
to be tested in machines at full scale conditions and allow for 
additional combustion technology and combustor development for high-
hydrogen fuels.
    The turbine industry believes that this technology is highly 
relevant to industrial coal gasification applications: (1) site-
hardened black-start capability for integrated gasification combined 
cycle applications (the ability to restart an IGCC power plant when the 
electric grid has collapsed); (2) supplying plant electric load fueled 
on syngas or hydrogen; (3) increasing plant steam cycle capacity on hot 
days when large amounts of additional power are needed; and (4) in gas 
turbines for compression of high-hydrogen fuels for pipeline 
transportation. The development of MW-scale turbines (1-100 MW) fueled 
with high-hydrogen fuels will promote the sustainable use of coal. In 
addition, highly efficient aeroderivative megawatt scale engines 
operate under different conditions than their larger counterparts and 
are installed for peaking or distributed generation applications. LNG, 
syngas and hydrogen combustion are issues for new sites and the legacy 
fleet. Funding is required to design efficient and low emissions 
combustors that accommodate the new fuels.
         high-efficiency, alternative-fueled distributed energy
    The administration's budget request recognizes the need for the 
development of alternate and dual fueled combined heat and power gas 
turbines systems. The budget document states ``ITP would also pursue 
the growth opportunity in traditional industry CHP applications below 
20 MW, including medium-sized plants that require both power and 
process heat. Specific activities would include the development of 
alternative/dual fuel capability for turbines that meet the most 
stringent NOX and CO regulations (e.g., those in southern 
California)''.
    However, there are insufficient funds allocated in the request to 
do any work in this area. The administration's justification contends 
``full consideration of the new DG/CHP activity within the context of 
the fiscal year 2009 request was not possible''. If the United States 
is serious about transitioning to a low-carbon economy, we must restore 
the Distributed Energy budget to $60 million in fiscal year 2009 to 
allow DOE to fund partnerships to develop ultra-high efficiency 
alternative and dual fuel CHP systems.
           university turbine systems research (utsr) program
    Under the UTSR program, a consortium of 111 U.S. universities 
located across 42 States conducts fundamental and applied research to 
resolve critical knowledge gaps identified by the 17 industrial 
partners that sit on the UTSR program's Industrial Review Board and by 
the DOE in support of the IGCC/FutureGen program. The UTSR program has 
been described as a model for university/government/industry 
collaboration that is tightly focused on the research needed to support 
widespread use of syngas and hydrogen fueled gas turbines for power 
production.
    This DOE/industry/university partnership is needed to help power 
producers cleanly and efficiently produce electric power from gasified 
coal, biomass and hydrogen, as well as natural gas. The UTSR program is 
the only federally-funded university-based program in the gas turbine 
area. The UTSR program's critical research efforts is needed to meet 
the Advanced Turbine program goals of preparing low-cost, high-
efficiency, high-reliability, low-emission gas turbines for electricity 
production using IGCC-derived fuels. The UTSR program provides critical 
gas turbine research expertise in the United States and graduates with 
knowledge and training. Without adequate DOE funding, universities will 
de-emphasize this area in their own research investments and 
curriculums and the United States will lose its competitive advantage 
in this critical industry.
    The Advanced Turbines program needs $55 million and the Distributed 
Energy budget needs to be restored to $60 Million in fiscal year 2009 
to keep pace with the rapidly approaching Climate Change emissions 
mandates.
                                 ______
                                 
   Prepared Statement of SNM--Advancing Molecular Imaging and Therapy
    SNM, formerly known as the Society of Nuclear Medicine, appreciates 
the opportunity to submit written comments for the record regarding 
funding in fiscal year 2009 at the Department of Energy (DOE). SNM is 
an international scientific and professional organization of over 
16,000 members dedicated to promoting the science, technology, and 
practical applications of molecular imaging and therapy.
    In fiscal year 2008, Congress restored funding for nuclear medicine 
research, after the Federal Government abandoned its over 50-year 
commitment to funding vital nuclear medicine research by eliminating 
funding in fiscal year 2006 for the research at the Department of 
Energy (DOE) and making no accommodation to transition nuclear medicine 
programs to other Government organizations. In past years, nuclear 
researchers have used Federal funding within DOE to make major 
accomplishments benefiting millions of patients with heart, cancer, and 
brain diseases. The loss of Federal funding for nuclear research 
adversely impacted future innovation in the field. With the restoration 
of funding last year and the continuation of funding in fiscal year 
2009 we will be able to get this research back on track. For that 
reason, SNM advocates the continuation of funding for fiscal year 2009 
at the level of $17.5 million for the nuclear medicine research program 
now housed under the Office of Science's Biological Research Life 
Science Radiochemistry and Instrumentation program \1\ in the fiscal 
year 2009 Energy and Water Appropriations bill.
---------------------------------------------------------------------------
    \1\ Previously nuclear medicine research was funded under the DOE's 
Office of Science, Biological and Environmental Research (BER) 
program's Medical Applications and Measurement Science. The BER program 
has been restructured, as directed by Congress, into two separate sub 
programs--Biological Research and Climate Change Research. Biological 
Research included activities in Life Sciences which is where this 
research is now housed. They also renamed it to Radiochemistry and 
Instrumentation.
---------------------------------------------------------------------------
                       what is nuclear medicine?
    Nuclear medicine is an established specialty that performs non-
invasive molecular imaging procedures to diagnose and treat diseases 
and to determine the effectiveness of therapeutic treatments--whether 
surgical, chemical, or radiation. It contributes extensively to the 
management of patients with cancers of the brain, breast, blood, bone, 
bone marrow, liver, lungs, pancreas, thyroid, ovaries, and prostate, 
and serious disorders of the heart, brain, and kidneys, to name a few. 
In fact, recent advances in the diagnosis of Alzheimer's disease can be 
attributed to nuclear medicine imaging procedures.
    Annually, more than 20 million men, women, and children need 
noninvasive molecular/nuclear medicine procedures. These safe, cost-
effective procedures include positron emission tomography (PET) scans 
to diagnose and monitor treatment in cancer, cardiac stress tests to 
analyze heart function, bone scans for orthopedic injuries, and lung 
scans for blood clots. Patients undergo procedures to diagnose liver 
and gall bladder functional abnormalities and to diagnose and treat 
hyperthyroidism and thyroid cancer.
          lack of federal funding threatens future innovations
    The goal of the DOE's nuclear medicine research program is to 
deliver relevant scientific knowledge that will lead to innovative 
diagnostic and treatment technologies for human health. The modern era 
of nuclear medicine is an outgrowth of the original charge of the 
Atomic Energy Commission (AEC) to exploit nuclear energy to promote 
human health. This program supports directed nuclear medicine research 
through radiopharmaceutical development and molecular nuclear medicine 
activities to study uses of radionuclides for non-invasive diagnosis 
and targeted, internal molecular radiotherapy.
    Over the years, the DOE nuclear medicine research program has 
generated advances in the field of molecular/nuclear medicine. For 
example, DOE funding provided the resources necessary for molecular/
nuclear medicine professionals to develop PET scanners to diagnose and 
monitor treatment in cancer. PET scans offer significant advantages 
over CT and MRI scans in diagnosing disease and are more effective in 
identifying whether cancer is present or not, if it has spread, if it 
is responding to treatment, and if a person is cancer free after 
treatment. In fact, the DOE has stated that this program supports 
``research in universities and in the National Laboratories, occupies a 
critical and unique niche in the field of radiopharmaceutical research. 
The NIH relies on our basic research to enable them to initiate 
clinical trials.''
    The majority of the advances in molecular/nuclear medicine have 
been sponsored by the DOE, including:
  --Smaller, More Versatile PET Scanners.--Brookhaven National 
        Laboratory (BNL) has completed a prototype mobile PET scanner, 
        which will record images in the awake animal. The mobile PET 
        will be able to acquire positron-generated images in the 
        absence of anesthesia-induced coma and correct for motion of 
        the animal. The long-term goal is to develop PET 
        instrumentation able to diagnose neuro-psychiatric disorders in 
        children.
  --Highest Resolution PET Scanner Developed.--Scientists at the 
        Lawrence Berkeley National Laboratory (LBNL) have developed the 
        world's most sensitive PET scanner. The instrument is 10-times 
        more sensitive than a conventional PET scanner and became 
        operational in 2005.
  --Imaging Gene Expression in Cancer Cells.--Images of tumors in whole 
        animals that detect the expression of three cancer genes were 
        accomplished for the first time by investigators at Thomas 
        Jefferson University and the University of Massachusetts 
        Medical Center. This advanced imaging technology will lead to 
        the detection of cancer in humans using cancer cell genetic 
        profiling.
  --Modeling Radiation Damage to the Lung.--Treatment of thyroid 
        disease and lymphomas using radioisotopes can cause disabling 
        lung disease. Investigators at Johns Hopkins University have 
        developed a Monte Carlo model that can be used to determine the 
        probability of lung toxicity and be incorporated into a 
        therapeutic regimen. This model will optimize the dose of 
        radioactivity delivered to cancer cells and avoid untoward 
        effects on the lung.
  --New Radiopharmaceuticals with Important Clinical Applications.--The 
        DOE radiopharmaceutical science program has developed a number 
        of innovative radiotracers at the University of California at 
        Irvine for the early diagnosis of neuro-psychiatric illnesses, 
        including Alzheimer's disease, schizophrenia, depression, and 
        anxiety disorders.
  --Rapid Preparation of Radiopharmaceuticals for Clinical Use.--The 
        DOE-sponsored program at the University of Tennessee has 
        developed a new method for preparing radiopharmaceuticals by 
        placing a boron-based salt at the position that will be 
        occupied by the radiohalogen. The method has been used to 
        prepare a variety of cancer-imaging agents.
    With continued DOE funding, essential molecular/nuclear medicine 
research will continue at universities, research institutions, national 
laboratories, and small businesses. Moreover, research with 
radiochemistry, genomic sciences, and structural biology will be able 
to usher in a new era of mapping the human brain and using specific 
radiotracers and instruments, to more precisely diagnose neuro-
psychiatric illnesses and cancer.
    In addition, to gain the full benefits of nuclear medicine, it is 
important to ensure that nuclear medicine researchers have a steady 
supply of radionuclides. One way to accomplish this goal would be to 
create a National Radionuclide Enhancement Production program at the 
DOE that would meet the Nation's medical and homeland security needs.
 nas study recommends enhanced federal commitment to nuclear medicine 
                                research
    On September 20, 2007, the National Academy of Sciences (NAS) 
released a report sponsored by the Department of Energy (DOE) and 
National Institutes of Health (NIH), entitled Advancing Nuclear 
Medicine Through Innovation. The charge of the NAS study was to provide 
findings and recommendations on the state of the science in nuclear 
medicine.
    As one of the important findings, the report highlighted the 
detrimental loss of Federal commitment to nuclear medicine research, as 
evidenced by the large cuts in funding for the basic sciences related 
to nuclear medicine in the DOE Office of Science Office of Biological 
and Environmental Research (OBER) Medical Applications and Measurement 
Science (MAMS) program in fiscal years 2006 and 2007.
    As a result, says the report, ``there is now no short- or long-term 
programmatic commitment by any agency to funding chemistry, physics, 
engineering research and associated high-technology infrastructure 
(accelerators, instrumentation, and imaging physics), which are at the 
heart of nuclear medicine technology research and development.''
    There are countless new innovations on the horizon in this area 
that promise to improve patient care through new therapeutic isotopes 
to cure disease, earlier diagnosis of Alzheimer's disease and cancer, 
detection of the effectiveness of cancer therapies, development of the 
next generation of imaging technologies, and more. However, without 
ongoing funding for basic nuclear medicine research at DOE Office of 
Science, these breakthroughs may never materialize.
    To enhance Federal commitment, the NAS report recommended that 
``reinstating support for the DOE-OBER nuclear medicine research 
program should be considered.'' Additionally, the report recommends ``a 
national nuclear medicine research program should be coordinated by the 
DOE and the National Institutes of Health with the former emphasizing 
the general development of technology and the latter disease-specific 
applications.''
    The report also states, ``Although the scientific opportunities 
have never been greater or more exciting, the infrastructure on which 
future innovations in nuclear medicine depend hangs in the balance. If 
the promise of the field is to be fulfilled, a federally supported 
infrastructure for basic and translational research in nuclear medicine 
should be considered.''
    We are at a critical juncture in nuclear medicine. In order to 
capitalize on groundbreaking research that will improve and save lives, 
Federal support for basic nuclear medicine research at DOE Office of 
Science must continue. Therefore, SNM calls on Congress to support the 
DOE Office of Science's Radiochemistry and Instrumentations programs 
with $17.5 million in funding for nuclear medicine research for fiscal 
year 2009.
                               conclusion
    By continuing funding for the DOE's Radiochemistry and 
Instrumentation nuclear medicine research program at the DOE, policy 
makers will keep our Nation at the forefront of nuclear medicine 
research and innovation. We thank you for the opportunity to present 
our views on funding for these initiatives at the DOE and would be 
pleased to answer any questions you may have.









       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page

Allard, Senator Wayne, U.S. Senator From Colorado:
    Prepared Statement of........................................    35
    Questions Submitted by.......................................    51
    Statement of.................................................    57
Alliance for Materials Manufacturing Excellence (AMMEX), Prepared 
  Statement of the...............................................   436
American Council for an Energy-efficient Economy (ACEEE), 
  Prepared Statement of the......................................   421
American Forest and Paper Association, Prepared Statement of the.   438
American Geological Institute, Prepared Statement of the.........   442
American Society of Agronomy, Prepared Statement of the..........   444
American Society of Plant Biologists, Prepared Statement of the..   454
Anastasio, Dr. Michael R., Director, Los Alamos National 
  Laboratory, Los Alamos, New Mexico.............................   269
    Prepared Statement of........................................   272
Association of State Energy Research and Technology Transfer 
  Institutions (ASERTTI), Prepared Statement of the..............   464

Bennett, Senator Robert F., U.S. Senator From Utah, Statements 127, 167
Biomass Energy Research Association, Prepared Statement of the...   428
Bond, Senator Christopher S., U.S. Senator From Missouri, 
  Statements of..................................................4, 165
Bunn, Dr. Matthew, Belfer Center for Science and International 
  Affairs, John F. Kennedy School of Government, Harvard 
  University.....................................................   365
    Prepared Statement of........................................   368

Center for Advanced Separation Technologies, Prepared Statement 
  of the.........................................................   430
City of Los Angeles Board of Harbor Commissioners, Prepared 
  Statement of the...............................................   407
Cochran, Senator Thad, U.S. Senator From Mississippi:
    Prepared Statements of....................................... 8, 77
    Questions Submitted by.......................................    51
    Statement of.................................................    77
Consortium for Fossil Fuel Science (CFFS), Prepared Statement of 
  the............................................................   418
Copper Development Association, Prepared Statement of the........   441
Craig, Senator Larry, U.S. Senator From Idaho, Statements of.7, 55, 259
Crop Science Society of America, Prepared Statement of the.......   444

D'Agostino, Hon. Thomas P., Administrator, National Nuclear 
  Security Administration, Department of Energy..................   233
    Prepared Statement of........................................   241
    Questions Submitted to.......................................   315
    Statement of.................................................   238
Domenici, Senator Pete V., U.S. Senator From New Mexico:
    Opening Statements of.....................3, 54, 125, 162, 236, 333
    Questions Submitted by..........39, 45, 50, 155, 157, 214, 218, 315
Donald, Admiral Kirk, Deputy Administrator for Naval Reactors, 
  National Nuclear Security Administration, Department of Energy.   233
Dorgan, Senator Byron L., U.S. Senator From North Dakota:
    Opening Statements of.....................1, 53, 123, 161, 233, 331
    Questions Submitted by.........45, 46, 102, 115, 120, 216, 221, 325

Electric Drive Transportation Association, Prepared Statement of 
  the............................................................   456
Energy Committee of ASME's Technical Communities, Prepared 
  Statement of the...............................................   461

Feinstein, Senator Dianne, U.S. Senator From California:
    Questions Submitted by.....................................109, 118
    Statement of.................................................   265
Florida State University, Prepared Statement of..................   470
Frantz, David G., Director, Loan Guarantee Program Office, Office 
  of the Chief Financial Officer, Department of Energy...........    73
    Prepared Statement of........................................    74
    Questions Submitted to.......................................   120
Friends Committee on National Legislation (Quakers), Prepared 
  Statement of the...............................................   447

Garrison Diversion Conservancy District, Prepared Statement of 
  the............................................................   410
Gas Technology Institute, Prepared Statement of the..............   435
Gas Turbine Association, Prepared Statement of the...............   477
GE Energy, Prepared Statement of.................................   458
Glass Manufacturing Industrial Council, Prepared Statement of the   441
Ground Water Protection Council, Prepared Statement of the.......   471

Health Physics Society, Prepared Statement of the................   475
Hecker, Dr. Siegfried S., Co-director, Center for International 
  Security and Cooperation, Stanford University..................   357
    Prepared Statement of........................................   359
Hunter, Dr. Thomas O., President and Director, Sandia National 
  Laboratory, Albuquerque, New Mexico............................   291
    Prepared Statement of........................................   292
    Questions Submitted to.......................................   325
Hydraulic Institute, Prepared Statement of the...................   441

International Copper Association, Prepared Statement of the......   441
Irrigation and Electrical Districts Association of Arizona, 
  Prepared Statement of the......................................   412

Johnson, Robert W., Commissioner, Bureau of Reclamation, 
  Department of the Interior.....................................   184
    Prepared Statement of........................................   192
    Questions Submitted to.......................................   221
    Statement of.................................................   190
Johnson, Senator Tim, U.S. Senator From South Dakota, Statement 
  of.............................................................   166

Karsner, Hon. Alexander, Assistant Secretary for Energy 
  Efficiency and Renewable Energy, Department of Energy..........    65
    Prepared Statement of........................................    66
    Questions Submitted to.......................................   115
Kolevar, Hon. Kevin M., Assistant Secretary for Electricity 
  Delivery and Energy Reliability, Department of Energy..........    14
    Prepared Statement of........................................    15
    Questions Submitted to.......................................    45

Lower Brule Rural Water System, Prepared Statement of the........   413

Miller, Dr. George H., Director, Lawrence Livermore National 
  Laboratory, Livermore, California..............................   280
    Prepared Statement of........................................   282
Murray, Reed, Director, Central Utah Project Completion Act 
  Office, Bureau of Reclamation, Department of the Interior......   184
Murray, Senator Patty, U.S. Senator From Washington:
    Questions Submitted by.....................................154, 231
    Statement of.................................................   163

National Association of State Energy Officials, Prepared 
  Statement of the...............................................   451
National Congress of American Indians, Prepared Statement of the.   416
National Corn Growers Association (NCGA), Prepared Statement of 
  the............................................................   397
National Hydropower Association, Prepared Statement of the.......   472
National Mining Association (NMA), Prepared Statement of the.....   433
National Research Center for Coal and Energy, West Virginia 
  University, Prepared Statement of the..........................   419
New York State Division of Housing and Community Renewal, 
  Prepared Statement of the......................................   426
New York State Energy Research and Development Authority, 
  Prepared Statement of the......................................   426
Next Generation Nuclear Plant Working Group, Prepared Statement 
  of the.........................................................   424

Oglala Sioux Rural Water Supply System, Prepared Statement of the   413
Onley, Kameran, Acting Assistant Secretary for Water and Science, 
  Bureau of Reclamation, Department of the Interior..............   184
    Prepared Statement of........................................   186
Orbach, Hon. Raymond L., Under Secretary for Science, Department 
  of Energy......................................................    53
    Prepared Statement of........................................    59
    Questions Submitted to.......................................   102
    Statement of.................................................    57

Pump Systems Matter, Prepared Statement of.......................   441

Reed, Senator Jack, U.S. Senator From Rhode Island, Statement of.   167
Rispoli, Hon. James A., Assistant Secretary for Environmental 
  Management, Department of Energy...............................   123
    Prepared Statement of........................................   133
    Questions Submitted to.......................................   154
    Statement of.................................................   128
Riverside County Flood Control and Water Conservation District, 
  Prepared Statement of the......................................   399
Rosebud Rural Water System, Prepared Statement of the............   413
RTI International, Prepared Statement of.........................   469

Santa Clara Valley Water District, Prepared Statements of the....   401
Slutz, James, Acting Principal Deputy Assistant Secretary for 
  Fossil Energy, Department of Energy............................    18
    Prepared Statement of........................................    21
    Questions Submitted to.......................................    46
Smolen, Major General Bob, Deputy Administrator for Defense 
  Programs, National Nuclear Security Administration, Department 
  of Energy......................................................   233
SNM--Advancing Molecular Imaging and Therapy, Prepared Statement 
  of.............................................................   480
Soil Science Society of America, Prepared Statement of the.......   444
Sproat, Hon. Edward F., III, Director, Office of Civilian 
  Radioactive Waste Management, Department of Energy.............   139
    Prepared Statement of........................................   141
    Questions Submitted to.......................................   157
Spurgeon, Hon. Dennis R., Assistant Secretary for Nuclear Energy, 
  Department of Energy...........................................     1
    Prepared Statement of........................................    10
    Questions Submitted to.......................................    39
    Statement of.................................................     8
State of Alaska Department of Natural Resources, Prepared 
  Statement of the...............................................   463

Tobey, William H., Deputy Administrator for Defense Nuclear 
  Nonproliferation, National Nuclear Security Administration, 
  Department of Energy...........................................   331
    Prepared Statement of........................................   337
    Statement of.................................................   334

University Corporation for Atmospheric Research (UCAR), Prepared 
  Statement of the...............................................   467
US Fuel Cell Council, Prepared Statement of the..................   449

Van Antwerp, Lieutenant General Robert, Chief of Engineers, Corps 
  of Engineers--Civil, Department of the Army, Department of 
  Defense--Civil.................................................   180
    Prepared Statement of........................................   180
    Questions Submitted to.......................................   216
Vanadium Producers & Reclaimers Association, Prepared Statement 
  of the.........................................................   441
Vision2020 Technology Partnership, Prepared Statement of the.....   441

West River/Lyman Jones Rural Water System, Prepared Statement of 
  the............................................................   413
Wolf, Robert W., Director, Program and Budget, Bureau of 
  Reclamation, Department of the Interior........................   184
Woodley, Hon. John Paul, Jr., Assistant Secretary of the Army for 
  Civil Works, Corps of Engineers--Civil, Department of the Army, 
  Department of Defense--Civil...................................   161
    Prepard Statement of.........................................   169
    Questions Submitted to.......................................   214
    Statement of.................................................   167









                             SUBJECT INDEX

                              ----------                              

                      DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army

                       Corps of Engineers--Civil

                                                                   Page

Additional Committee Questions...................................   213
Budget Request...................................................   215
Civil Works Program..............................................   218
Collective Bargaining Rights.....................................   216
Construction Program.............................................   181
Contracting Out..................................................   217
Cost Engineering Improvements....................................   182
Earmarks.........................................................   215
Highlights:
    Program Areas................................................   171
    Water Resources Development Accounts.........................   170
HPO Structure....................................................   218
Inland Waterway Trust Fund.......................................   214
Negotiating Over Appropriate Arrangements and Procedures.........   217
Other Budget Highlights..........................................   175
Performance-based Budgeting......................................   169
President's Management Agenda....................................   176
Protection of the Metropolitan New Orleans Area..................   175
Summary of Fiscal Year 2009 Program Budget.......................   180
Terms of Employment..............................................   218
Value of the Civil Works Program to the Nation's Economy and 
  Defense........................................................   182
Water Resources Development Act of 2007..........................   175
Workforce........................................................   217

                          DEPARTMENT OF ENERGY

Additional Committee Questions.................................102, 154
Algae Research...................................................    98
America Competes Act.............................................    82
Basic and Applied Research and Development Coordination..........    62
Biomass:
    And Biorefinery Systems R&D..................................    66
    Ethanol Mandate..............................................   115
Budgeting for Our Priorities.....................................   135
Building Technologies............................................   118
    Program......................................................    70
Cellulosic Ethanol...............................................    90
Climate Change...................................................   105
    Models.......................................................    96
Competes.........................................................   102
Concentrating Solar Power........................................   117
Credit Subsidy Model.............................................   120
Current Investment Climate.......................................   121
Electric Energy Storage..........................................    89
Energy:
    Frontier Research Centers....................................    83
    Transmission.................................................    88
Environmental Management (EM):
    Budget Shortfalls............................................   143
    Fiscal Year 2009 Budget:
         Priorities..............................................   152
        Request..................................................   150
    Molecular Sciences Laboratory................................    86
Ethanol Technology and Production................................    83
Facilities and Infrastructure....................................    72
Federal:
    Energy Management Program....................................    71
    Loan Guarantee Applications..................................   101
    Procurement Regulations......................................94, 98
Fiscal Year:
    2008 and Fiscal Year 2009 Solicitation Implementation Plan...    76
    2009 Budget Request.........................................75, 136
        And Key Activities.......................................   142
Geothermal Technology Program....................................    69
Hydrogen Technology:
    Funding......................................................    79
    Program......................................................    67
Idaho National Laboratory........................................    92
Impact of Tax Credits for Renewable Energy and Energy Efficiency.   119
Implementation of E&W Direction to Consolidate Spent Fuel........   157
Implications of Non-Access to the Nuclear Waste Fund.............   143
Industrial Technologies Program..................................    71
ITER Project.....................................................    91
Joint Dark Energy Mission........................................   107
LANSCE Refurbishment.............................................   104
License Application..............................................   157
Loan Guarantee:
    Potential....................................................   120
    Program Applicants...........................................    73
Loan Guarantees..................................................    80
    Budget.......................................................    73
Long-Term Investment Funding.....................................   101
Los Alamos:
    National Laboratory (LANL):
        Cleanup..................................................   155
        National Academy Study on Groundwater Protection.........   156
    Neutron Scattering Center (LANSCE)...........................    83
Managing Our Priorities..........................................   134
Mesa Del Sol Solar Project.......................................   117
Missed:
    Compliance Agreements Milestones Fines.......................   147
    Milestones Nationwide........................................   155
Nanoscale Science Research.......................................    97
Nanotechnology...................................................   105
New Nuclear Plants...............................................   159
Physical Sciences Facility.......................................    85
Plug in Hybrid Technology........................................   117
Radiation R&D....................................................   106
Renegotiate LANL Consent Order...................................   155
Renewable Energy Funding.........................................    77
Sandia--Advanced Computing.......................................   104
Science and Technology...........................................   156
Sciences Laboratories Infrastructure.............................    86
Solar Energy:
    Program......................................................    68
    Research.....................................................   102
    Technology...................................................    96
Solicitation Implementation Plan.................................    74
Spent Fuel Disposal..............................................   145
Staffing of Loan Guarantee:
    Office.......................................................   121
    Program......................................................    73
Superconductivity................................................    88
Three Hanford Procurements.......................................   154
Timetable........................................................   120
Vehicle Technologies Program.....................................    67
Water Power Program..............................................    69
Weatherization...................................................   116
    And Intergovernmental Activities Program.....................    71
    Grants.......................................................    79
    Program......................................................   100
Wind Energy......................................................    93
    Program......................................................    69
WIPP.............................................................   156
Yucca Mountain:
    License Application..........................................   144
    Next Steps...................................................   158

                National Nuclear Security Administration

Addendum--Issues of Concern......................................   300
Additional Committee Questions...................................   315
Advanced Computing.............................................315, 325
Appropriation and Program Summary Tables--Out-year Appropriation 
  Summary Tables--Fiscal Year 2009 Budget Tables...............250, 343
Beyond Nuclear Security..........................................   372
Budget Increases for MPC&A and GTRI..............................   369
Bush Administration--Weapons Policy..............................   317
Challenges Facing the NNSA Weapons Complex and LLNL..............   282
Changing Partnership With Russia.................................   360
Chemistry and Metallurgy Research Replacement (CMR-R) Project....   318
Complex Transformation Preferred Alternative.....................   253
Coping With North Korea and Iran.................................   373
Critical Crossroads for the National Stockpile Stewardship 
  Program........................................................   279
Cyber-Security...................................................   264
Defense Nuclear Nonproliferation.................................   337
Development of the Stockpile Stewardship Program.................   272
Economics of the Proposed Uranium Process Facility...............   318
Elimination of Weapons Grade Plutonium Production................   342
Energy Security..................................................   298
Enhanced Surety..................................................   319
Expanding Cooperative Threat Reduction Beyond Russia.............   361
Fiscal Year 2009 Budget Request Programmatic Detail............244, 340
Fissile Materials Disposition....................................   342
Funding:
    And Personnel................................................   303
    Oversight....................................................   260
Future of the NNSA Laboratories in National Security.............   299
Global Threat Reduction Initiative...............................   341
Increasing Risks to the Future Success of the Stockpile 
  Stewardship Pro- gram..........................................   276
Intelligence and Analysis to Support Policy......................   377
International Material Protection and Cooperation................   341
Laboratory Capabilities..........................................   296
LANL Performance--On the Right Track.............................   320
Lawrence Livermore Financial Issues..............................   265
Limiting Proliferation of Nuclear, Chemical, and Biological 
  Expertise......................................................   377
Los Alamos Neutron Science Center (LANSCE).......................   320
Managing the Health of the Stockpile.............................   287
Materials:
    Consolidation--MOX...........................................   321
    Missions, and Manpower.......................................   256
National:
    Ignition Facility............................................   306
    Laboratory Funding...........................................   309
Naval Reactors:
    Overview.....................................................   244
    Program......................................................   255
New Stockpile Stewardship Tools and Their Application............   284
NNSA Science Strategy............................................   322
Nonproliferation and:
    International Security.......................................   342
    Verification Research and Development........................   343
        Fiscal Year 2008--$133 Million Plus-up Spend Plan........   354
Other Needed Nuclear Security Steps..............................   370
Preventing Nuclear Terrorism.....................................   369
Programs for the Office of Science...............................   298
Public Law Authorization.........................................   344
Reducing:
    Demand for Nuclear Weapons...................................   374
    Plutonium and HEU Stockpiles.................................   378
    The Proliferation Risks of Nuclear Energy....................   375
Reliable Replacement Warhead..............................261, 267, 322
Sandia Funding Diversity.........................................   326
Science and Technology Funding Trends............................   312
Stopping Black-market Nuclear Networks...........................   375
Strengthening:
    Safeguards...................................................   376
    The Nonproliferation Regime and Expanding Nuclear Power......   363
    U.S. Technical Capabilities to Combat Proliferation and 
      Nuclear Terrorism..........................................   364
Subterranean Nuclear Tests.......................................   263
Support of Defense Nuclear Nonproliferation Programs.............   289
The Budget and Adequacy of the Defense Nonproliferation Programs.   360
The Global Nuclear Future........................................   295
The Stockpile Stewardship Program Has Been a Success.............   273
The U.S. Nuclear Deterrent.......................................   293
Tough Challenges Ahead--Los Alamos National Laboratory...........   277
University Robotics Program......................................   323
Weapons Activities Overview......................................   242
Z Machine......................................................323, 327
    And National Ignition Facility...............................   324

         Office of Electricity Delivery and Energy Reliability

Additional Committee Questions...................................    39
Infrastructure Security and Energy Restoration...................    17
Natural Gas and Coal Resources...................................    28
Permitting, Siting, and Analysis.................................    17
Power Outage in Florida..........................................    24
Research and Development.........................................    16

                        Office of Fossil Energy

Additional Committee Questions...................................    39
Carbon Sequestration.............................................    26
    Continues....................................................    27
Clean Coal:
    Funding......................................................    27
    Power Initiative.............................................    22
    Research.....................................................    37
Fossil:
    Budget Priorities............................................    25
    Energy Research and Development..............................    21
Fuel Cells.......................................................    22
FutureGen........................................................21, 29
Gasification Technology..........................................    22
Hydrogen.........................................................    22
Meeting the Nation's Critical Energy Needs.......................    23
Naval Petroleum and Oil Shale Reserves...........................    23
Northeast Home Heating Oil Reserve...............................    23
Oil and Natural Gas Technology...................................    22
Outer Continental Shelf Resources................................    34
Sequestration....................................................    22
Strategic Petroleum Reserve......................................23, 24

                        Office of Nuclear Energy

Additional Committee Questions...................................    39
Advanced:
    Fuel Cycle Initiative and GNEP...............................    12
    Test Reactor.................................................    33
Environmental Management.........................................    33
Generation IV....................................................    12
Hydrogen Initiative..............................................    12
Nuclear:
    Energy.......................................................    30
    Facilities...................................................    13
    Power 2010...................................................    11
Other Defense Activities.........................................    13
Spent Fuel Recycling.............................................31, 36
University Funding...............................................    13

                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

Additional Committee Questions...................................   213
Animas-La Plata..................................................   229
California Bay-Delta Restoration Fund (CALFED)...................   196
Central Valley Project Restoration Fund..........................   195
Columbia Basin Project, Potholes Supplemental Feed Route.........   231
Desalination.....................................................   228
Drought..........................................................   221
Energy and Water Act.............................................   221
Executive Order..................................................   229
Fiscal Year 2009 Planned Activities..............................   196
Interior's Accomplishments.......................................   187
Legislative Proposals............................................   190
Loan Guarantee...................................................   230
Managing for Excellence..........................................   196
Middle Rio Grande................................................   228
Odessa Subarea Special Study.....................................   231
Ongoing Rural Water Projects.....................................   195
Other Budget Priorities..........................................   189
Overview of the 2009 Budget......................................   186
Policy and Administration........................................   195
Research and Development.........................................   227
Rural Water......................................................   225
San Joaquin:
    River Restoration Fund Proposed Legislation..................   195
    Valley.......................................................   226
Supporting the Department's Mission..............................   189
The Challenges Ahead.............................................   187
Title XVI......................................................195, 227
Water:
    And Related Resources........................................   192
    For America................................................188, 226
Yuma Desalting Plant.............................................   230

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