[Senate Hearing 110-351]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-351
 
        BUDGET FOR FISCAL YEAR 2009 FOR THE DEPARTMENT OF ENERGY

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



                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                   TO

RECEIVE TESTIMONY ON THE U.S. DEPARTMENT OF ENERGY'S BUDGET FOR FISCAL 
                               YEAR 2009

                               __________

                            FEBRUARY 6, 2008


                       Printed for the use of the
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

DANIEL K. AKAKA, Hawaii              PETE V. DOMENICI, New Mexico
BYRON L. DORGAN, North Dakota        LARRY E. CRAIG, Idaho
RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            RICHARD BURR, North Carolina
MARY L. LANDRIEU, Louisiana          JIM DeMINT, South Carolina
MARIA CANTWELL, Washington           BOB CORKER, Tennessee
KEN SALAZAR, Colorado                JOHN BARRASSO, Wyoming
ROBERT MENENDEZ, New Jersey          JEFF SESSIONS, Alabama
BLANCHE L. LINCOLN, Arkansas         GORDON H. SMITH, Oregon
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
JON TESTER, Montana                  MEL MARTINEZ, Florida

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
              Frank Macchiarola, Republican Staff Director
             Judith K. Pensabene, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Bodman, Hon. Samuel W., Secretary, Department of Energy..........     6
Domenici, Hon. Pete V., U.S. Senator From New Mexico.............     3
Salazar, Hon. Ken, U.S. Senator From Colorado....................     2

                                APPENDIX

Responses to additional questions................................    57


        BUDGET FOR FISCAL YEAR 2009 FOR THE DEPARTMENT OF ENERGY

                              ----------                              


                      WEDNESDAY, FEBRUARY 6, 2008

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:04 a.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Jeff 
Bingaman, chairman, presiding.

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW 
                             MEXICO

    The Chairman. Ok. Why don't we get started here? Today's 
hearing will examine the President's budget proposal for the 
Department of Energy for fiscal year 2009.
    We welcome our witness Secretary Bodman to the committee 
this morning. The President's energy budget proposal has some 
very meritorious aspects as they relate to the Department of 
Energy budget and some problematic ones, at least in my view. 
On the positive side the overall budget of the Department is 
increasing. This is in a year which other Federal agencies, for 
example the Forest Service, are slated for steep and damaging 
cuts.
    Within the Department there are a number of well run 
programs that are proposed for strong increases. All of us 
here, I believe, would generally support the commitment that 
the budget shows to basic research in the Office of Science. We 
need that strong commitment to keep our Nation globally 
competitive in science and engineering as Congress called for 
in the America Competes Act and that the President signed last 
year.
    These programs did not fare well in the omnibus spending 
bill that Congress passed at the end of the last Congress, last 
session. I very much appreciate the impact analysis of these 
problems that you sent to my office earlier this week. We have 
an important job to do to try to enumerate these problems in 
this fiscal year.
    The budget proposal also gives strong support for biofuels, 
advanced hybrid batteries, solar and geothermal energy to 
diversify our energy portfolio. In the case of geothermal 
energy, I'm pleased that the Administration listened to and 
worked with Congress to define a new profile for that program 
in the recent energy bill and came through with a good funding 
proposal in this budget request.
    That said, the new budget proposal has several specific 
proposals for cuts that are difficult to square with sound 
energy policy. Let me mention three that I'll return to in the 
question and answer period. First, I'm concerned about the 
proposed 27 percent decline from the current funding levels for 
the Office of Energy Efficiency and Renewable Energy. I'd hoped 
that the Department would have taken the strong support by the 
Congress for this office to put forward an equally strong 
request. That does not appear to be the case.
    A big part of the budget decline in this office is due to 
the decision to eliminate the Department of Energy's 
Weatherization Assistance Program that looks to me to be wrong 
headed. The Weatherization Assistance Program is a valuable and 
successful program. The types of activities it funds are viewed 
by outside experts as being some of the most cost effective 
ways we have of improving national energy efficiency.
    Cutting funding for this important program is particularly 
hard to understand when heating oil prices have almost doubled 
since 2003. Propane is up 75 percent. Natural gas is up by more 
than 50 percent and electricity by more than 21 percent.
    Second I'm concerned with the cost of expanding the 
strategic petroleum reserve. I think that the proposal there 
outweighs the benefits. In this budget the Administration 
proposes to spend 584 million, to buy millions of barrels of 
crude oil and take them off the market. It seems odd to be 
spending a half billion dollars of taxpayer dollars on an 
activity that will help keep oil prices high.
    When Congress passed the Energy Policy Act of 2005 we 
included specific language that any filling of the SPR avoid 
excessive cost and minimize expense. I can't understand why the 
Administration would continue to take crude oil off the market 
when according to the Department of Energy's Energy Information 
Administration, crude oil prices over the next few years will 
be lower than they are today.
    Finally I'd like to hear more on the Department's rationale 
for changing the programmatic direction on Future Gen. We need 
to have a clear path forward for advanced coal technologies and 
carbon capture and storage associated with such plants. While 
the Future Gen project may certainly have its flaws, the 
question is whether we have something better that is proposed 
to take its place.
    Again Secretary, thanks for being here. Let me call on 
Senator Domenici for any comments he has.
    [The prepared statement of Senator Salazar follows:]
   Prepared Statement of Hon. Ken Salazar, U.S. Senator From Colorado
    Mr. Chairman, thank you for holding this hearing today on the 
Department of Energy's fiscal year 2009 budget. And, thank you Mr. 
Secretary for coming today. It is always a pleasure to see you and have 
the opportunity to discuss the absolutely essential work that your 
Department undertakes.
    Today I would like to highlight a few issues that stand out as I 
examine the Department's proposed budget for the next fiscal year. 
Secretary Bodman, you have been quite supportive of the National 
Renewable Energy Laboratory in Golden, Colorado, as well as Energy 
Efficiency and Renewable Energy programs in general.
    Once again, however, I see a lack of strong leadership by this 
Administration for supporting EERE programs, and in particular for 
NREL. I believe our strategic energy and environmental security needs 
demand a robust expansion of EERE programs. However, this year's budget 
request shows a 27% decrease in spending for EERE programs over FY2008 
spending levels. Even accounting the unwise proposed cancellation of 
the Weatherization Assistance program and the planned ramp-down of 
hydrogen technology spending, EERE faces a cut.
    While I applaud the proposed increase in biomass and biorefinery 
R&D funding, the proposed cut in solar energy research simply does not 
make sense. Juxtaposing the top-line EERE number to those for nuclear 
and fossil energy programs, I am left with no other conclusion than 
that the Administration does not believe developing renewable energy 
sources should be a major national priority.
    Toward that end, I am extremely concerned that NREL is essentially 
flat-funded. After major recent investments in new laboratory 
infrastructure, including the new Science and Technology Facility and 
the planned Energy Systems Integration Facility, it is disappointing 
that the Administration continually fails to acknowledge NREL's growth 
capacity from a programmatic standpoint. Instead of maintaining the 
status quo, we should be working together to put NREL on a path to 
double its budget--not because this is some arbitrary goal, but because 
NREL has the capacity to grow and provide even more new insights into 
our most pressing energy needs.
    Like several of my colleagues I am also disturbed by the proposed 
cancellation of EERE's Weatherization Assistance program: Thousands of 
low-income families have benefited from this program over the years. 
Many such families live in older rental properties; I imagine it is not 
uncommon for landlords to be disinterested in making a major investment 
in new windows or insulation for example when they are not the ones 
paying the utility bills.
    At a time when energy costs are soaring, it is unconscionable to 
consider pulling the rug out from under the families that need help 
most. Around 4,000 homes in Colorado are weatherized under the program 
every year, and I intend to fight for this program's survival. I am 
aware that DOE claims the program is outside EERE's core RD&D mission, 
but that is scarcely reason to do away with it altogether.
    Unfortunately, I was also disheartened to see a proposed cut in the 
budget of the Office of Electricity Delivery and Energy Reliability 
funding: Achieving better energy efficiency in our electric 
infrastructure--from demand-response to transmission and distribution--
should be a national priority. Instead of expanding this office's vital 
work this budget takes a step backward.
    I am pleased that the Administration proposes to expand the Clean 
Coal Power Initiative and Carbon Sequestration budgets. The success of 
these programs will go hand-in-hand in transforming the environmental 
footprint of our nation's coal industry. Achieving these goals is 
absolutely critical to our energy and environmental security, and to 
ensuring that the coal industry remains a workhorse of our economy well 
into the future.
    Finally, I am also pleased that the Administration is maintaining 
its commitment under the American Competitiveness Initiative to double 
the budget of the DOE Office of Science in the coming years. These 
programs are the bedrock of the Nation's energy science enterprise. I 
was disappointed with the very late decision of the appropriators to 
roll back the widely-supported increase for the Office of Science in 
the last fiscal year. I understand that some programs were cut 
significantly, and I am hopeful that that will be an aberration.
    Each year the formulation of a budget is a painstaking process. I 
have appreciated the Secretary's candor in the past, and I look forward 
to working with him to ensure that the American people get the most 
prudent investment in energy programs and research possible.
    Thank you, Mr. Chairman.

   STATEMENT OF HON. PETE V. DOMENICI, U.S. SENATOR FROM NEW 
                             MEXICO

    Senator Domenici. Mr. Secretary you have done an 
outstanding job in the time that you have been given the mantel 
of Secretary of Energy. But I don't believe the American people 
or any of us have been successful in attacking the problem of 
our energy insufficiency and the fact that we must import so 
much. I don't think we have attacked it with the sense of 
urgency that it's entitled to.
    I really don't think we know how bad the effect is on the 
United States of the billions of dollars that are sucked out of 
our economy every month to buy oil. It is making other 
countries rich. Therefore it seems logical to me that it is 
making us poorer. I can't get any economist to produce a study 
on this. I've checked and they all aren't sure. But I'm sure. 
We are becoming a weaker Nation by the day because of the 
tremendous amount of our own assets that are getting removed 
from us every day and shipped to other countries who can only 
grow and prosper because they're getting these high 
astronomical prices for oil.
    So I wish we had a bigger and stronger program, but we've 
all tried. I don't think there's much we're doing that carries 
with it an absolute state of urgency where we say we must do 
this. It's an American commitment to our own salvation.
    But we have done a lot of things and I do want to put in 
the record, Senator, Mr. Chairman, all of the things that we 
have produced in the past 3 years by way of energy bills 
starting with the Energy Policy Act of 2005 and then the Energy 
Independence and Security Act of 2007 and all the things that 
went with it. To the extent that we charged ourselves, we just 
about did everything we could and what we asked for in 
legislation. These two sheets of summary will show all of the 
things that have been accomplished, many of which are being run 
by the distinguished Secretary now. He knows there are many new 
things, some of which are truly marvelous and are achieving 
great things.
    Senator Domenici. First, I want to make a brief comment on 
National Laboratories funding. Overall this is a good budget 
for the National Laboratories. I hope we can avoid last year's 
devastating scenario when the House acted as they did. You are 
not asking them to do that so they will have to do it of 
themselves because there is nothing in the budget asking them 
to do that.
    At the same time I'm concerned about the insufficient 
funding and the pace of certain projects such as the LANSCE 
Facility. I believe the pace proposed in these budgets is too 
slow. I intend to address that during the appropriations 
process to see if we can move those programs ahead a little 
faster.
    I'm pleased with our investment in nonproliferation 
including the MOX program. I think you will probably chalk that 
one up as a very, very big accomplishment of the Department if 
we can continue on course and get it done. It's the one that 
President Carter decided to put away. He said if we don't do it 
the others will follow us and not do it. You recall we didn't 
do it, they all did.
    Now we didn't do it because we were afraid of proliferation 
and other things. Now we're the last one coming along with 
mixed oxide as a method for treating defense waste. Now I'd 
like to turn to a discussion of nuclear overall.
    I want to commend you for the considerable investment in 
nuclear energy. I believe that these nuclear power investments 
hold great promise for our efforts to produce greenhouse gas 
emissions. I remind the committee, and you, Mr. Secretary, that 
when we passed the 2005 Policy Act, we sent a message that the 
United States was serious again about nuclear power in this 
country. The message was heard around the world. Nuclear power 
is the largest source of carbon free energy on earth.
    I'm encouraged by the continued support of your Department 
of nuclear power. The Administration seeks to increase funding 
for nuclear energy science and technology by 37 percent to 1.42 
billion for the NP 2010 Initiative. That's increased by 80 
percent. That shows we are concerned and that investment is 
probably one of the few that is up to the problem. It shows 
that there is a serious problem we are going to resolve. So we 
seek to address global climate change. We must continue to 
invest even more in the promises of nuclear power which this 
budget request obviously acknowledges.
    Loan guarantees, Mr. Secretary. Now let me discuss the 
budget proposal on loan guarantees in title 17 of the Energy 
Policy Act of 2005. I'm very pleased that the budget request 
reflects the agreement reached in the 2008 Omnibus 
Appropriations Act.
    Your proposal to extend the date authorized to issue loan 
guarantees to 2010 for non-nuclear projects, in 2011 for 
nuclear projects, will help ensure that the 38.5 billion you 
made available will be fully utilized. I hope that you will 
even be successful in issuing a loan guarantee before this 
Administration ends. I don't know if that's possible, but I 
watch a few and see that you might indeed be able to do that.
    As you know we passed the important bipartisan America 
Competes Act incorporating the view of the Augustine Report. 
The President and the Republicans and Democrats alike in 
Congress all worked on that. Your budget proposed an increase 
of 750 million rounding it to the Office of Science for a total 
of 4.7 billion. This proposal keeps funding available. We 
double the Office of Science in 10 years. I applaud you for 
that. That was the commitment and that was done. There were 
more commitments. They weren't all done, but that one was.
    While I support this increase, I do plan on asking some 
questions about how your Department plans to integrate the 
America Competes Act with the budget. Not as easy as we thought 
when we were doing the work. Easy to draw one, hard to do the 
other.
    I share the same concerns on weatherization that my 
counterpart, the Chairman, does. It kind of looks to me, Mr. 
Chairman, that something happened. That they took it out here, 
but they planned it, expected it to show up somewhere else. I 
hate to ask the Secretary that, but that's what it looks like 
to me. They got it out here and didn't put it in where they 
expected. I haven't seen him give any clues to whether that 
statement is correct or not, but I'll ask him about it.
    I'm disappointed that the Future Gen project must take a 
different direction. The project had relevant, difficult, 
questions about the best way to advance clean coal with 
taxpayer's dollars. We may find that restructuring Future Gen 
might be the right decision.
    However, the Department will have to fully digest feedback 
on their request for information and we have questions on that 
topic for you. People just still don't know that we're spending 
a lot of money on carbon capture and sequestration. We're doing 
a lot of big science and big engineering.
    The 2009 budget marks a continuation of a dramatic funding 
increase for carbon capture and sequestration. Our effort to 
reduce greenhouse gases while sustaining an affordable energy 
supply hinges upon cost effective demonstrations is a huge sum. 
I want to say that the 648 million dollars for research and 
demonstration in that particular field seems to me to be 
another very positive reaction to a very serious problem in a 
way that makes sense.
    Mr. Secretary, I look forward to working with you in the 
limited time that we have this year which will be my last time, 
limited or otherwise, and we'll try to get some things done. 
Thank you very much.
    The Chairman. Thank you, sir. Mr. Secretary, why don't you 
go right ahead with your testimony and then after that we'll 
each have questions.

 STATEMENT OF HON. SAMUEL W. BODMAN, SECRETARY, DEPARTMENT OF 
                             ENERGY

    Secretary Bodman. Mr. Chairman, Senator Domenici, members 
of the committee, I want to thank you all for giving me the 
opportunity to appear here before you for what is now the 
fourth time in order to discuss our Department's budget 
request. I think it is safe to say that the goals of our fiscal 
2009 budget are largely unchanged from our budget goals in 
previous years. This budget request provides us, in my 
judgment, the resources needed to continue to move forward on 
our five central missions and those are: the promotion and 
enhancement of energy security, nuclear security, scientific 
discovery and innovation, environmental responsibility and 
management excellence.
    Since 2001, this Administration has invested more than 180 
billion dollars in the Department of Energy and its programs. 
These investments have been used to address the growing demand 
for affordable, clean and reliable energy. They have helped 
safeguard our national security and have enabled scientific 
research leading to significant improvements in our quality of 
life and the health of our people.
    The Department's fiscal year 2009 request in the amount of 
25 billion dollars was developed with the need to continue 
these activities in mind and to address the energy challenges 
that confront us everyday. An investment of this size allows us 
to fulfill our central missions as well as advance the goals of 
the President's Advanced Competitiveness Initiative and to 
ensure U.S. technological competitiveness and economic 
security. It also allows us to continue our progress toward the 
goals of the President's Advanced Energy Initiative 
accelerating the research, the development and the deployment 
of clean, alternative energy technologies.
    The Department of Energy is responsible for promoting 
America's energy security. We encourage the development of 
reliable, clean and affordable energy supplies and we 
strengthen U.S. competitiveness by leading in innovation and 
scientific discovery. At the same time we continue to ensure 
the security of the nuclear stockpile and we reclaim and 
restore the sites that are the Nation's environmental legacy 
from those efforts to develop the nuclear chemistry and physics 
that I've just referred to. All of this is done under a rubric 
of sound management consistent with the President's Management 
Agenda to improve performance and accountability.
    But this budget request also reflects our concerns about 
America's energy future. The projected growth in global energy 
demand is a major challenge for us all. It is a challenge that 
must be met with responsible action.
    Global demand will continue to grow. We cannot depend 
solely on hydrocarbons to meet it. This is a problem for all 
nations, energy producers and consumers alike. I believe, 
therefore, that it is vital that the United States pursue 
policies that enhance global energy security not just our own. 
We need new energy options, cleaner more efficient technologies 
and alternative fuels and we must support fully the research 
and innovation necessary for their development. We must 
diversify our energy supplies, diversify our energy suppliers 
and establish and secure additional energy supply routes.
    This budget document should also be viewed as a road map 
showing the future course of America's energy security. This 
course will not, in my judgment be an easy one, but I believe 
it is a necessary one. These efforts will require a sustained 
commitment on the part of government. It will require strong 
private sector investment and strategic collaborations between 
the government, the private sector and the research community 
including academia. Our goal is to foster continued economic 
growth and promote a sustainable energy future.
    Mr. Chairman, I believe the committee has a copy of my 
written statement which I now ask be included in the record so 
that in the interest of time we might move to any questions 
that you or members of the committee might have. Thank you very 
much.
    [The prepared statement of Secretary Bodman follows:]
        Prepared Statement of Hon. Samuel W. Bodman, Secretary, 
                          Department of Energy
    Mr. Chairman and members of the Committee, I am pleased to be 
before you today to present the President's fiscal year (FY) 2009 
budget proposal for the Department of Energy. The strength and 
prosperity of America's economy is built on the security of our nation 
and the reliability of energy sources. Since 2001, the Administration 
has committed $183 billion through the Department of Energy (DOE) to 
help drive America's economic growth, provide for our national 
security, and address the energy challenges that face our nation. The 
Department of Energy's FY 2009 budget request of $25 billion stays on 
course to address the growing demand for affordable, clean and reliable 
energy; preserve our national security; and enable scientific 
breakthroughs that could have significant impacts on our quality of 
life and the health of the American people. The FY 2009 budget was 
developed to continue to meet these goals.
    In FY 2009, the Department will advance the President's American 
Competitiveness Initiative aimed at ensuring U.S. technological 
competitiveness and economic security, and implement the Advanced 
Energy Initiative, to accelerate the research and development of clean 
energy technologies to diversify our nation's energy supply. These 
efforts, combined with investments to meet our commitment to protect 
the United States as stewards of our nation's nuclear weapons stockpile 
and to environmental cleanup, will foster continued economic growth and 
promote a sustainable energy future.
    This budget, while focused on delivering results to meet the 
nation's priorities, also serves as the roadmap for the future of 
America's energy security. The FY 2009 budget request translates into 
investments that will:

   Expand research, development, and demonstration of cost-
        effective carbon capture and storage,
   Accelerate technological breakthroughs outlined in the 
        Advanced Energy Initiative,
   Provide enhanced energy security through the expansion of 
        the Strategic Petroleum Reserve,
   Continues to foster scientific leadership with the American 
        Competitiveness Initiative,
   Advance environmental cleanup and nuclear waste management,
   Maintain the safety and reliability of the nuclear weapons 
        stockpile and continue transforming the weapons complex, and
   Work with other countries to prevent the spread of weapons 
        of mass destruction.

    To highlight, in FY 2009 the Department of Energy continues to meet 
this vision and strengthen the framework built over the last eight 
years to ensure our national energy security and reliability. The FY 
2009 budget request:

   Invests in Climate Change Technologies.--In support of the 
        Administration's initiatives that support climate change 
        technology and to implement the U.S. Climate Change Technology 
        Program's Strategic Plan, the FY 2009 budget emphasizes a two-
        pronged strategy for its climate change technology programs: 
        invest in carbon dioxide (CO22) mitigation 
        technologies for coal with carbon capture and storage (CCS) and 
        in nuclear power, and invest in near-term, CO22 
        mitigation technologies focused on improving energy efficiency. 
        The budget provides $407 million to research and $241 million 
        to demonstrate advanced coal technologies which includes cost-
        effective CCS for coal-fired power plants. The Department also 
        continues to help work with the Department of the Treasury to 
        administer $1.65 billion in investment tax credits from the 
        Energy Policy Act of 2005 that will accelerate commercial 
        deployment of technologies that are central to carbon capture 
        and storage.

    Through international collaboration, the United States strives to 
        maintain a leadership role in promoting and deploying clean 
        energy technology domestically and around the world. President 
        Bush believes that the greatest progress will be assured by 
        working together with other nations to advance the related 
        objectives of improving economic and energy security, 
        alleviating poverty, improving human health, reducing harmful 
        air pollution, and reducing the growth of greenhouse gases. The 
        United States, Australia, China, India, Japan, Canada, and 
        South Korea work to implement the objectives of the Asia-
        Pacific Partnership (APP) on Clean Development and Climate. 
        This Partnership is helping to advance the President's goal of 
        developing and accelerating the deployment of cleaner and more 
        efficient technologies and practices. It builds on existing 
        multilateral climate initiatives including the Carbon 
        Sequestration Leadership Forum, the International Partnership 
        for a Hydrogen Economy, and Methane to Markets. In FY 2009, the 
        Department is requesting $15.0 million, evenly divided between 
        the Fossil Energy Program and the Energy Efficiency and 
        Renewable Energy Program, to continue to support this important 
        initiative.

   Advances the American Competitiveness Initiative.--In 2007, 
        President Bush launched the American Competitiveness Initiative 
        (ACI) to encourage innovation throughout the economy and to 
        give America's children a firm foundation in math and science. 
        A request of $4.7 billion in FY 2009, $748.8 million above the 
        FY 2008 enacted level, will increase basic research in the 
        physical sciences that will have broad impacts on future energy 
        technologies and environmental solutions. ACI funding will 
        support the construction and operation of world-class 
        scientific facilities and will support literally thousands of 
        scientists and students--our current and future scientific and 
        technical workforce. Scientific and technological discovery and 
        innovation are the major engines of increasing productivity--
        indispensable to ensuring growth, job creation, and rising 
        incomes for American families in the technologically driven 
        twenty-first century. This investment is essential if the 
        United States is to maintain its worldclass, scientific 
        leadership and global competitiveness.

   Accelerates the Advanced Energy Initiative.--At a request of 
        $3.2 billion, $623 million above the FY 2008 enacted 
        appropriations of $2.5 billion, the President's Advanced Energy 
        Initiative (AEI) will continue to support clean energy 
        technology breakthroughs that will help improve our energy 
        security through diversification and help to reduce our 
        dependence on oil. The FY 2009 budget for AEI includes funding 
        to promote the licensing of new nuclear power plants and 
        research on an advanced nuclear fuel cycle. Also, AEI's diverse 
        energy portfolio includes investment in making solar power 
        cost-competitive with conventional sources of electricity by 
        2015 and supports a robust vehicle technology program that 
        includes developing lithiumion batteries, plug-in hybrids, and 
        drive-train electrification.

   Expands the Resurgence of Nuclear Energy.--Nuclear energy is 
        an important source of energy in the United States and is a key 
        component of the AEI portfolio. Nuclear energy is free of 
        greenhouse gas (GHG) emissions, safe, and reliable, and 
        currently supplies about 20 percent of the nation's 
        electricity. The Department is leading the Administration's 
        efforts to spur a nuclear renaissance in the United States to 
        meet energy and climate goals. We continue to work with 
        industry partners to promote the near term licensing and 
        deployment of the first new nuclear plants in over 30 years, as 
        well as to extend the life of current plants. Furthermore, the 
        Department is developing advanced, more proliferation-resistant 
        nuclear fuel technologies that will maximize energy from 
        nuclear fuel. These technologies will further support the 
        expansion of nuclear power as a safe, efficient, and cost-
        effective source of energy capable of supporting continued 
        economic growth in the 21st century. In FY 2009, a total of 
        $1.4 billion is requested for nuclear energy activities 
        including $487 million for the Mixed Oxide Fuel Fabrication 
        Facility.

    It is critical to note that the growth of nuclear power is only 
        possible if we continue to develop a responsible path for 
        disposing of spent nuclear fuel. Therefore, $494.7 million is 
        requested in FY 2009 for the continued development of the 
        geologic waste repository at Yucca Mountain, Nevada, and to 
        support the defense of the License Application that we will 
        submit in 2008 to the Nuclear Regulatory Commission for 
        authorization to construct the repository.

   Transforms Our Nuclear Weapons Complex.--The FY 2009 budget 
        reconfirms the Department of Energy's steadfast commitment to 
        the national security interests of the United States through 
        stewardship of a reliable and responsive nuclear weapons 
        stockpile and by advancing the goals of global non-
        proliferation. Through the National Nuclear Security 
        Administration (NNSA), the Department directs $6.6 billion in 
        this request for Weapons Activities, a $320.6 million increase 
        from the FY 2008 enacted appropriation, to meet the existing 
        requirements for stewardship of the nation's nuclear weapon 
        stockpile, technologies and facilities, as well as to continue 
        to transform the nuclear weapons complex with the goal of a 
        much smaller size by 2030. This transformation effort is 
        structured to achieve President Bush's vision to create a more 
        efficient and less expensive nuclear weapons complex of the 
        future that is able to respond to changing national and global 
        security challenges.

   Reduces the Risk of Weapons of Mass Destruction (WMD) 
        Worldwide.--The Department has provided $1.8 billion in this 
        request for detecting, securing, eliminating and disposing of 
        dangerous nuclear materials around the world. The amount 
        includes $1.2 billion within Defense Nuclear Nonproliferation, 
        $487 million within the Office of Nuclear Energy, and $117 
        million funded in Weapons Activities. The Mixed Oxide (MOX) 
        Fuel Fabrication Facility project remains a key activity of the 
        nation's nuclear nonproliferation efforts. The FY 2009 request 
        for MOX is $ 208.2 million more than the FY 2008 enacted 
        appropriation reflecting continued support for this project. 
        Further, the request provides significant out-year growth to 
        fulfill our international agreements and accelerate our work to 
        reduce the risk of (WMD) threats. Among many advances, the FY 
        2009 budget provides for the installation of radiation 
        detection equipment at an additional 49 foreign sites in 14 
        countries and at 9 additional Megaports; continues to implement 
        an aggressive, prioritized work schedule to complete all 
        shipments of Russian origin spent highly-enriched uranium (HEU) 
        fuel stored outside reactor cores by the end of 2010; and 
        maintains a schedule allowing completion of the construction of 
        the second of two fossil-fueled power plants located in 
        Zheleznogorsk, Russia, in 2010. The Seversk project is 
        scheduled for completion by the end of December 2008.

   Meets Our Commitments to Public Health and Safety and the 
        Environment.--During my first days at the Department of Energy, 
        I announced safety as my top priority and the number one 
        operating principle of the Department. To implement my vision, 
        I created a new Office of Health, Safety and Security. Ensuring 
        the safety of workers across the DOE complex is my top priority 
        and this new office will go a long way in strengthening our 
        safety and security organization. We must be world class not 
        only in how we carry out our mission, but in the safe, secure, 
        and environmentally responsible way in which we manage 
        operations at our facilities across the country. The 
        organization's FY 2009 budget request of $446.9 million, builds 
        on a number of actions the Department has taken over the past 
        two years to increase safety of DOE workers.

    The FY 2009 budget includes $5.5 billion for the Environmental 
        Management program to protect public health and safety by 
        cleaning up hazardous, radioactive legacy waste left over from 
        the Manhattan Project and the Cold War. This budget allows the 
        program to continue to make progress towards cleaning up and 
        closing sites and focuses on activities with the greatest risk 
        reduction. By the end of 2009, cleanup projects at Sandia 
        National Laboratory and Argonne National Laboratory will be 
        finished.

    As the Department continues to make progress in completing clean-
        up, the FY 2009 budget request of $186 million for Legacy 
        Management supports the Department's long-term stewardship 
        responsibilities and payment of pensions and benefits for our 
        former contractor workers after site closure.

    In light of the increased number of sophisticated cyber attacks 
directed at all facets of our communities, from military to civilian to 
private users, the Department is taking significant steps to secure the 
virtual pathways and mitigate the threat from cyber intrusions. 
Implementing these steps will be seamless and will not interrupt the 
availability of information systems resources while preserving the 
confidentiality and integrity of the information and their contents. A 
budget request of $157 million in FY 2009 supports the Department's 
efforts to defend against emerging, complex cyber attacks. Through 
these efforts, the Department will be in a better position to 
effectively manage and monitor cyber risk across the complex. In FY 
2009, DOE will increase support on a Department-wide basis to deploy 
new cyber security tools and cyber security management activities to 
detect, analyze, and reduce the threat across the complex.
   promoting america's energy security through reliable, clean, and 
                           affordable energy
    The FY 2009 request will deliver a balanced and diverse portfolio 
of solutions to strategically address the urgent energy and 
environmental challenges facing our country today. Our goal can be met 
by: 1) accelerating the development of clean and renewable energy 
technologies to dramatically increase the amount of clean energy 
produced in the United States; 2) advancing energy efficient 
technologies and practices that use less energy; and 3) providing 
information from research, development, and demonstration activities, 
which could help stimulate private sector choices that will drive 
change in our energy systems. DOE's applied energy programs are taking 
pro-active steps to catalyze the advancement of these important 
technologies through research and development, innovative partnerships, 
international cooperation through the Asia Pacific Partnership, and 
collaboration with states, industry leaders, and other stakeholders.
    The budget lays the groundwork for implementing key elements of the 
Energy Independence and Security Act of 2007 (EISA). It contains 
elements that are unprecedented in size, scope and timeframe for 
increasing our energy security, diversifying our energy system and 
making America's energy systems stronger, safer and cleaner for future 
generations. We can further advance the U.S. commitments made at the 
U.N. Climate Change Meeting in Bali and the Major Economies Meetings to 
employ clean energy technologies in the global effort to reduce 
greenhouse gas emissions.
    Consistent with the President's initiatives and the EISA, the FY 
2009 budget contributes to key elements of the American Competitiveness 
and Advanced Energy Initiative that will help reduce our dependence on 
foreign sources of energy, and change the way we power our homes, 
businesses, and automobiles.
    The proposed Office of Energy Efficiency and Renewable Energy 
(EERE) budget of $1.255 billion provides a diverse portfolio of 
solutions to our challenges, including:

   Fuels and Vehicle Solutions (Biomass, Vehicles, and Hydrogen 
        programs: $592.3 million)

    --Advancing essential R&D projects to achieve cost competitive, 
            commercial scale cellulosic ethanol production by 2012;
    --Conducting R&D on lithium-ion batteries, plug-in hybrids, and 
            drive-train electrification to diversify and make our 
            nation's vehicles more efficient to reduce petroleum 
            dependency;
    --Continuing to research and develop critical hydrogen technologies 
            that enable a commercialization decision in 2015; and
    --Supports fuel testing and validating codes and standards that 
            will help accelerate new fuel and vehicle solutions to the 
            market.

   Renewable Power Solutions (Wind, Solar, Geothermal, and 
        Water Power programs: $241.6 million)

    --Integrating renewable energy technologies with energy storage 
            technologies to resolve the intermittency challenge;
    --Supporting wind power R&D to enable wind turbines to produce an 
            increasing amount of the nation's electricity;
    --Investing in solar power to make photovoltaics widely available 
            nationwide and commercially cost-competitive with 
            conventional electricity by 2015;
    --Accelerating a refocused geothermal program that conducts 
            enhanced geothermal systems R&D and
    --Pursuing water power technologies as part of EERE's R&D 
            portfolio.

   Efficiency Solutions (Buildings and Industrial Technologies 
        programs: $185.9 million)

    --Reducing energy consumption and transforming the carbon footprint 
            of the built environment through the development of zero 
            energy buildings; and
    --Supporting the advancement of clean and efficient industrial 
            technologies and processes that will drive a 25 percent 
            increase in U.S. industrial energy productivity by 2017.

    Our energy portfolio also recognizes the abundance of coal as a 
domestic energy resource and remains committed to research and 
development to promote its clean and efficient use. Because coal in the 
U.S. accounts for 25 percent of the world's coal reserves, the FY 2009 
request focuses on carbon capture and storage.

   Integration of advanced Integrated Gasification Combined 
        Cycle (IGCC) coal technology with Carbon Capture and Storage 
        remains the foundation of the Department's clean coal research 
        program to establish the capability of producing electricity 
        from coal with near-zero atmospheric emissions. The 
        Administration remains strongly committed to FutureGen and is 
        requesting $156 million in FY 2009. An additional $407 million 
        is requested within the Coal program to support research and 
        development on technologies that support the concept.
   The Coal program continues to fund large-scale 
        demonstrations through the Clean Coal Power Initiative (CCPI) 
        with $85 million requested in FY 2009 to support a Round 3 
        solicitation which will focus on demonstrating carbon capture 
        and storage technologies.
   As part of the greenhouse gas mitigation strategy, the 
        Department continues the Carbon Sequestration program through 
        its large-scale field testing, and will inject carbon dioxide 
        into several types of geological formations. Within the $407 
        million requested for coal research and development activities, 
        the Department is requesting $149 million for continued work in 
        this area.

    Consistent with the FY 2006, 2007, and 2008 budget requests, the FY 
2009 budget request continues to shift resources away from oil and gas 
research and development programs, which have sufficient market 
incentives for private industry support, to other energy priorities. 
Federal staff, paid from the program direction account, will work 
toward an orderly termination of the program in FY 2009.
    To further assure against significant oil supply disruptions that 
could harm our economy, this budget also proposes $171.4 million for 
expanding the Strategic Petroleum Reserve (SPR) to an ultimate capacity 
of 1.5 billion barrels by 2029. In FY 2008, DOE will use available 
balances for the purchase of additional SPR oil and will continue to 
fill using federal royalty oil until 727 million barrels is achieved in 
FY 2009. Capacity expansion from 727 million barrels to 1.0 billion 
barrels will begin in FY 2008 with land acquisition activities. The 
request also funds National Environmental Policy Act (NEPA) activities 
associated with the further expansion of SPR capacity to 1.5 billion 
barrels.
    The EPACT 2005 included authorization for a new Loan Guarantee 
Program. The Department requests $19.9 million in funding in FY 2009 
for administrative expenses to operate the Office and support personnel 
and associated costs. This request will be offset by collections in the 
same amount, as authorized under EPACT 2005. In addition, during fiscal 
years 2008 through 2011, commitments to guarantee loans under Title 
XVII of the EPACT 2005 will total $38.5 billion. In the Energy and 
Water Development and Related Agencies Appropriations Act of 2008, 
Congress authorized the Department to issue loan guarantees under the 
Title XVII program until September 30, 2009. The FY 2009 budget now 
seeks to extend that authorization through FY 2010 and 2011 and 
specifies amounts and uses of loan guarantee authority for those 
periods consistent with Congressional guidance accompanying the FY 2008 
Appropriations Act. Of the total provided, $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 FY 2011 to support nuclear power facilities. The $38.5 billion 
provided in FY 2008 through 2011 will be in addition to the $4.0 
billion in authority provided in FY 2007 under P.L. 110-05 Section 
20320(a) for a total loan volume limitation of $42.5 billion.
    Reliable energy information plays a critical role in promoting 
efficient energy markets and informing the public and policy makers. 
This budget requests a total of $110.6 million for the Energy 
Information Administration to improve energy data and analysis 
programs, reflecting a 16 percent increase over the FY 2008 enacted 
level.
    The FY 2009 budget requests $301.5 million for the Advanced Fuel 
Cycle Initiative, the technology development element of the Global 
Nuclear Energy Partnership (GNEP). The request supports research and 
development activities focused on methods to reduce the volume and 
long-term toxicity of high-level waste from spent nuclear fuel, reduce 
the long-term proliferation threat posed by civilian inventories of 
plutonium in spent fuel, and provide for proliferation-resistant 
technologies to recover the energy content in spent nuclear fuel.
    Recognizing the potential of nuclear energy, the President 
announced GNEP in February 2006. GNEP seeks to bring about significant, 
wide-scale use of nuclear energy through the development of better, 
more efficient and proliferation-resistant nuclear fuel cycles while 
reducing the volume of nuclear waste requiring ultimate disposal.
    GNEP will build upon the Administration's commitment to develop 
nuclear energy technology and systems and enhance the work of the 
United States and our international partners to strengthen 
nonproliferation efforts. The GNEP strategy will accelerate efforts to:

   Provide abundant energy without generating carbon emissions 
        or greenhouse gases (GHG);
   Recycle spent nuclear fuel to minimize waste and reduce 
        proliferation concerns;
   Enable developing nations to safely and securely deploy 
        nuclear power to meet their energy needs;
   Increase energy recovery from spent nuclear fuel; and
   Reduce the number of required U.S. geologic waste 
        repositories to one for the remainder of this century.

    Through GNEP, the United States will work with key international 
partners to develop new recycling technologies. Improving the way spent 
nuclear fuel is managed will facilitate the expansion of civilian 
nuclear power in the United States and encourage civilian nuclear power 
internationally to evolve in a more proliferation-resistant manner. The 
United States and other countries having the established infrastructure 
could arrange to supply nuclear fuel to countries seeking the energy 
benefits of civilian nuclear power, and the spent nuclear fuel could be 
returned to supplier countries for eventual disposal in international 
repositories. In this way, foreign countries could obtain the benefits 
of nuclear energy without needing to design, build, and operate uranium 
enrichment or recycling technologies to process and store the waste.
    GNEP would also help resolve America's nuclear waste disposal 
challenges. By recycling spent nuclear fuel, the heat load and volume 
of waste requiring permanent geologic disposal would be significantly 
reduced, delaying the need for another repository in addition to the 
one at Yucca Mountain for the remainder of this century.
    Beginning in FY 2008 in accordance with the Consolidated 
Appropriations Act, 2008, the Office of Nuclear Energy is funding the 
MOX Fuel Fabrication Facility, which was previously funded by the 
National Nuclear Security Administration's (NNSA) Nuclear 
Nonproliferation program. In FY 2009, the Department funds the MOX Fuel 
Fabrication Facility program within the Office Nuclear Energy under the 
Other Defense activities account at a request of $487 million.
    To support the near-term domestic expansion of nuclear energy, the 
FY 2009 budget seeks $241.6 million for the Nuclear Power 2010 program 
to support cost-shared, near term technology development and licensing 
demonstration activities with industry that focus on enabling an 
industry decision by 2010 to build a new nuclear plant. 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 technology focus of the Nuclear Power 2010 program is on 
Generation III+ advanced light water reactor designs, which offer 
advancements in safety and economics over older designs. If successful, 
this 7-year, 50-50 industry cost-shared program could result in a new 
nuclear power plant order by 2010 and a new nuclear power plant 
constructed by the private sector and in operation by 2015. EPACT 2005 
authorizes DOE to enter into contracts with the first six sponsors that 
are issued a license and begin construction of new nuclear facilities 
and meet all contractual conditions to provide risk insurance for 
certain regulatory and litigation delays in the full power operation of 
their facility. Up to $500 million in coverage is available for the 
initial two licensed plants for which construction is started and up to 
$250 million is available for the next four plants. The program will 
allow DOE to offer standby support/risk insurance to protect sponsors 
of the first new nuclear power plants against the financial impact of 
certain delays that are beyond the sponsors' control. In FY 2009, the 
Department may issue conditional agreements for standby support to 
sponsors of new nuclear power plants.
    The FY 2000 budget request includes $70 million to continue the 
development of nextgeneration nuclear energy systems known as 
``Generation IV (GenIV).'' These nextgeneration technologies will 
enhance the safety, cost-effectiveness, and proliferationresistance of 
nuclear power, while harnessing its potential to generate hydrogen for 
use as a fuel. Gen IV's FY 2009 resources will be primarily focused on 
long-term research and development of a gas-cooled very-high 
temperature reactor, the reactor technology of choice for the Next 
Generation Nuclear Plant (NGNP) project.
strengthening u.s. scientific discovery, economic competitiveness, and 
improving quality of life through innovations in science and technology
    Today our nation's ability to sustain a growing economy and a 
rising standard of living for all Americans depends on continued 
advances in science and technology. Scientific and technological 
discovery and innovation are the major engines of increasing 
productivity and are indispensable to ensuring economic growth, job 
creation, and rising incomes for American families in the 
technologically driven 21st Century. Today it is especially vital that 
nations around the globe--not only the developed nations but also the 
largest developing ones--increase their strategic national investments 
in scientific research with an eye to global economic competition.
    The Science program at the Department of Energy delivers 
discoveries and scientific tools that transform our understanding of 
energy and matter and advance the national, economic, and energy 
security of the United States. Science is a primary sponsor of basic 
research in the United States, leading the nation to support the 
physical sciences in a broad array of research subjects in order to 
improve our energy security and address issues ancillary to energy, 
such as climate change, genomics, and life sciences. In FY 2009, the 
Department requests $4.7 billion, an increase of 18.8 percent over the 
enacted FY 2008 appropriation, to continue to invest in science 
research that supports the American Competitiveness Initiative.
    The High Energy Physics ($805.0 million) program conducts basic 
research on the nature of matter and energy at its most fundamental 
level, seeking to understand the universe by investigating the most 
basic constituents of matter and energy and exploring the nature of 
space and time, and probing the forces that bind them together. Support 
is provided for operation of the Tevatron and Neutrinos at the Main 
Injector (NuMI) beam line which are both located at Fermi National 
Accelerator Laboratory (Fermilab). In addition, the request supports 
the research of U.S. scientists at the Large Hadron Collider in 
Switzerland ($72.5 million) and the U.S. involvement in the global 
research and development effort for a potential International Linear 
Collider ($35 million). The program also funds non-accelerator physics 
to investigate dark energy and dark matter, supernovae, solar 
neutrinos, black holes, and other topics, including support for the 
Joint Dark Energy Mission (JDEM) in partnership with NASA.
    The Nuclear Physics ($510.1 million) program conducts research to 
understand the structure and interactions of atomic nuclei and the 
fundamental forces and particles of nature in nuclear matter in terms 
of their fundamental constituents. Support is provided for operation of 
the Relativistic Heavy Ion Collider ($161.00 million), which enables us 
to glimpse conditions of the very early universe, and the Continuous 
Electron Beam Accelerator Facility (CEBAF) ($106.4 million) which 
provides insight into the quark structure of matter.
    The Biological and Environmental Research (BER) ($568.5 million) 
program provides the environmental and biological knowledge that 
promotes national security through improved energy production and use, 
supports the President's National Energy Plan, and conducts research to 
protect our environment. This research is focused in two areas: 
Biological Research and Climate Change. BER supports the Genomics: GTL 
program supports the most advanced biotechnology tools and techniques 
to probe for biological and biologically inspired solutions to 
Department mission challenges in energy, carbon sequestration, and 
environmental remediation. The FY 2009 request includes $75 million for 
three innovative Bioenergy Research Centers that will bring together 
multidisciplinary teams of some of the nation's leading researchers in 
a mission-driven laboratory setting to probe plants and microbes at all 
levels (molecular, cellular, system) in an effort to crack nature's 
code and achieve the breakthroughs that will make biofuels production 
truly cost-effective on a national scale. Climate change research 
includes the study of the scientifically-based predictions and 
assessments of the potential effects of greenhouse gas on climate and 
the environment, and funds DOE participation in the nation's Climate 
Change Science Program ($145.9 million).
    The Basic Energy Sciences ($1.568.2 billion) program supports 
research and operates facilities to provide the foundation for new and 
improved energy technologies and for understanding and mitigating the 
environmental impacts of energy use. The FY 2009 request enhances 
support in high priority research areas addressing both grand challenge 
science and basic research needs for energy-related science. One 
implementation strategy will be new Energy Frontier Research Centers, 
which will bring together the skills and talents of multiple 
investigators to enable research of a scope and complexity that would 
not be possible with the standard individual investigator or small 
group award. The Materials Sciences and Engineering subprogram supports 
basic research to explore the scientific foundations for the 
development of materials that improve their efficiency, economy, 
environmental acceptability, and safety for energy generation, 
conservation, transmission, and use. Applications include lighter, 
stronger materials to increase fuel economy in automobiles, alloys and 
ceramics that improve the efficiency of combustion engines, and more 
efficient photovoltaic materials for solar energy conversion. Chemical 
Sciences, Geosciences, and Energy Biosciences support research crucial 
for improving combustion systems, solar photoconversion processes, and 
for applications to renewable fuel resources, environmental 
remediation, and photosynthesis. BES supports the Advanced Energy 
Initiative with solar conversion and biomass production research. A 
major part of the BES mission is to build and operate world-class user 
facilities including the Spallation Neutron Source at ORNL, the world's 
most powerful neutron scattering facility. All five of the Nanoscale 
Science Research Centers, part of the National Nanotechnology 
Initiative, will be fully operational in FY 2009 with a total request 
of $101.2 million.
    The Advanced Scientific Computing Research ($368.8 million) program 
delivers forefront computational and networking capabilities to 
scientists nationwide that enable them to extend the frontiers of 
science. Leadership in scientific computation is a cornerstone of the 
Department's strategy to ensure the security of the nation, and to 
succeed in its science, energy, environmental quality, and national 
security missions.
    Fusion is the energy source of stars, including our own sun. The 
Fusion Energy Sciences ($493.1 million) program is the national 
research effort to advance plasma science, fusion science, and fusion 
technology--the knowledge base required for an economically and 
environmentally friendly, carbon free energy. DOE is also one of seven 
international parties participating in the ITER project, an 
international burning plasma fusion experiment to be built in 
Cadarache, France. The FY 2009 request provides $214.5 million for the 
U.S. contribution to this international effort.
                  ensuring america's nuclear security
    The National Nuclear Security Administration (NNSA) continues 
significant efforts to meet Administration and secretarial priorities, 
leveraging science to promote national security. The FY 2009 
President's budget request is $9.1 billion, essentially level with the 
FY 2008 appropriation, to meet defense and homeland security-related 
objectives:

   Transforming the nuclear weapons stockpile and 
        infrastructure while meeting Department of Defense 
        requirements;
   Conducting innovative programs in the nations of the former 
        Soviet Union and other countries to address nonproliferation 
        priorities;
   Supporting naval nuclear propulsion requirements of the U.S. 
        Navy;
   Maintaining comprehensive physical and cyber security for 
        facilities, employees and information by implementing and 
        sustaining upgrades throughout the complex;
   Providing nuclear counter-terrorism and emergency response 
        assets in support of homeland security;
   Reducing the deferred maintenance backlog and achieving 
        facility footprint reduction goals; and
   Providing corporate management and oversight for NNSA 
        program operations.

    The United States continues a fundamental shift in national 
security strategy to address the realities of the 21st century. The FY 
2004-directed reductions to the U.S. nuclear weapons stockpile were 
completed in 2007, five years early. Today's nuclear weapons stockpile 
is now the size envisioned for 2012, and by 2012 it will be almost 15 
percent less than that--a total that is just 25 percent of what it was 
at the end of the Cold War. Consistent with the Administration's 
Nuclear Posture Review, the Department of Energy has created a vision 
for a revitalized nuclear weapons complex that is significantly more 
agile and responsive, and will allow further reductions in the nuclear 
stockpile by providing an industrial hedge against geopolitical or 
technical problems.
    In compliance with the National Environmental Policy Act, NNSA is 
preparing a Complex Transformation supplement to the 1996 Stockpile 
Stewardship and Management Programmatic Environmental Impact Statement. 
In January 2008, NNSA announced a preferred alternative for the future 
nuclear weapons complex infrastructure that identifies the proposed 
major facilities, and consolidations of missions, capabilities, and 
special nuclear materials. The FY 2009 budget includes funding to 
pursue a program consistent with the preferred alternative, with NNSA 
planning to promulgate a Record of Decision in 2008.
    The FY 2009 budget request of $6.6 billion for Weapons Activities 
includes programs to meet the immediate national security requirements 
of the stockpile, including stockpile surveillance, annual assessment, 
life extension programs, and warhead dismantlement. The campaigns are 
focused on long-term vitality in science and engineering, and on R&D 
supporting current and future stockpile stewardship and DoD 
requirements. Readiness in Technical Base and Facilities supports 
facilities and operations across the governmentowned, contractor-
operated nuclear weapons complex. A number of these NNSA programs and 
facilities also support scientific research users from other elements 
of the Department, federal government, and the academic and industrial 
communities.
    Growth areas in the Weapons Activities appropriation include Cyber 
Security and Nuclear Weapons Incident Response. The Cyber Security 
activities increase to support a major five-year effort focused on 
revitalization, certification, accreditation and training across the 
NNSA complex. The Nuclear Weapons Incident Response program increases 
due to functional transfers of emergency management and 
counterterrorism-related activities. Defense Nuclear Security 
activities focus on maintaining and implementing security upgrades 
needed to address the DOE Design Basis Threat. A new Transformation 
Disposition program is proposed at $77.4 million to begin to eliminate 
excess NNSA facilities in concert with transformation activities.
    The FY 2009 budget request for the Defense Nuclear Nonproliferation 
appropriation totals $1.2 billion. The appearance of a significant 
decrease is due to the final FY 2008 enacted appropriations that added 
about $480 million in funding above the President's request to programs 
in this account. In addition, the Consolidated Appropriations Act, 
2008, (P.L. 110-161) shifted the funding for the Mixed Oxide (MOX) Fuel 
Fabrication Facility to DOE's Office of Nuclear Energy and funding for 
the related Pit Disassembly and Conversion Facility/Waste 
Solidification Building (PDCF/WSB) project to the Weapons Account. This 
shift represents over $600 million in funding that would have been 
requested within the Defense Nuclear Nonproliferation appropriation in 
FY 2009. These shifts do not change or diminish in any way the 
importance of these projects to the nation's nuclear nonproliferation 
efforts, and in total, the funding commitment to DOE's nonproliferation 
activities is $1.8 billion in FY 2009. The budget describes a shift in 
emphasis from work completed under the Bratislava agreement to 
additional Second Line of Defense sites, including Megaports, and 
continued expansion of nuclear and radiological material removal under 
the Global Threat Reduction Initiative.
    In FY 2009, NNSA's nonproliferation programs will complete major 
activities in the Elimination of Weapons Grade Plutonium Production 
program, as well as complete upgrades associated with the agreement 
from the Bratislava Summit. Our focus shifts to sustainability support 
to Russian warhead and material sites with completed upgrades, and 
acceleration of projects to assist the Russian Federation and other 
partner countries in establishing the necessary infrastructure to 
sustain effective material control operations. The budget request also 
provides for the installation of radiation detection equipment at an 
additional 49 foreign sites in countries and at 9 additional Megaports, 
for a total of 32 ports completed.
    The FY 2009 request also supports research and development on 
detection technology, and a new Next Generation Safeguards Initiative 
(NGSI), which aims to strengthen international safeguards and 
revitalize the U.S. technical base. The budget request supports 
continued significant expansion of nuclear and radiological material 
removal under the Global Threat Reduction Initiative; and initiates 
support of disablement, dismantlement, and verification of nuclear 
programs in North Korea.
    NNSA continues to support the U.S. Navy's nuclear propulsion 
systems. The FY 2009 request for Naval Reactors of $828 million is an 
increase of about 6.9 percent over the FY 2008 appropriation. These 
programs ensure the safe and reliable operation of reactor plants in 
nuclear-powered submarines and aircraft carriers, and fulfill the 
Navy's requirements for new nuclear propulsion plants that meet future 
requirements.
 protecting the environment by providing responsible solutions to the 
           environmental legacy of nuclear weapons production
    The federal government has the dual responsibilities of addressing 
the nuclear weapons production legacy of our past and providing the 
necessary environmental infrastructure for today that will ensure a 
clean, safe and healthy environment for future generations. As such, 
the Department is committed to strategic acquisitions for long-term 
waste treatment projects and the implementation of sound project 
management principles to meet our long-term cleanup commitments. In FY 
2009, a total of $6.2 billion is dedicated to supporting three key 
pillars that set the framework for the Department to reach these goals. 
The first pillar is to continue the environmental cleanup ($5.5 
billion) of contaminated Cold War sites across the country. The second 
pillar is to continue to provide long-term stewardship and to carry out 
our responsibilities ($186 million) to our former contractor workforce. 
The third pillar completes the framework by working to construct a 
permanent nuclear waste repository at Yucca Mountain ($494.7 million) 
to address long-term nuclear waste disposal and to defend the License 
Application that we will submit in 2008 to the Nuclear Regulatory 
Commission for authorization to construct the repository. Secretary 
Bodman's core principle of safe operations throughout the Department 
will be dynamically applied within this framework.
    To deliver on the Department's obligations stemming from 50 years 
of nuclear research and weapons production during the Cold War, the 
Environmental Management program (EM) continues to focus its resources 
on those activities that will yield the greatest risk reductions, with 
safety as the utmost priority. To achieve a balance of risk reduction 
and environmental cleanup, the FY 2009 request of $5.5 billion supports 
the following activities, in priority order:

   Stabilizing radioactive tank waste in preparation for 
        treatment (about 34 percent of the FY 2009 request);
   Storing and safeguarding nuclear materials and spent nuclear 
        fuel (about 20 percent of the FY 2009 request);
   Disposing of transuranic, low-level and other solid wastes 
        (about 14 percent of the FY 2009 request); and
   Remediating major areas of our sites and decontaminating and 
        decommissioning excess facilities (about 23 percent of the FY 
        2009 request).

    The Administration recognizes that EM's FY 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 all of the environmental 
agreements that have been negotiated over many years with regulators. 
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 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 DOE.
    In FY 2009, EM is aggressively pursuing the consolidation and 
disposition of surplus plutonium and other special nuclear materials to 
enhance national security and to minimize the storage risks and costs 
associated with these materials. In addition, EM continues to make 
significant progress on the construction and operation of waste 
treatment and immobilization facilities across the complex. The budget 
continues shipments of remote-handled transuranic waste to the Waste 
Isolation Pilot Plant.
    The EM program has made great strides in achieving cleanup results. 
Since 2001, EM has cleaned up and closed 14 sites, including three 
former weapons production sites--Rocky Flats and Fernald, with Mound to 
be completed in FY 2008,--as part of its riskreduction cleanup 
strategy. In the fall of 2007, DOE transferred nearly 4,000 acres of 
its former Rocky Flats nuclear weapons production site to the 
Department of Interior's U.S. Fish and Wildlife Service for use as a 
National Wildlife Refuge. Additionally, the Rocky Flats Cleanup Team 
received the 2007 Service to America Medal for Science and Environment 
for completing the first successful cleanup of a former nuclear weapons 
facility. In 2007, DOE's Waste Isolation Pilot Plant in New Mexico 
celebrated its 6000th safely received shipment, reached a milestone for 
disposal of over 50,000 cubic meters of waste and began disposing of 
remote-handled transuranic waste. DOE's Closure Project at Fernald, a 
900-acre former uranium processing facility located in southwest Ohio--
was named the 2007 Project of the Year by the Project Management 
Institute.
    Recognizing that cleanup completion dates at the majority of EM 
sites extend beyond 2013, EM is working to improve project and program 
management in a number of areas. EM is strengthening its project 
baselines, verifying the reasonableness of scope, cost and schedule of 
all environmental projects. These baselines will provide the basis for 
conducting credible analyses to better assess existing priorities and 
identify opportunities to accelerate cleanup work. Working 
collaboratively with the sites, EM is also continuing to seek 
aggressive but achievable strategies for accelerating cleanup of 
discrete sites or segments of work. In addition, functional and cross-
site activities such as elimination of specific groundwater 
contaminants, waste or material processing campaigns, or achievement of 
interim or final end-states are being evaluated. Developing robust 
life-cycle planning capabilities, realistic near-term baselines, as 
well as a focused technology program, a best-in-class project 
management system, an acquisition strategy that promotes performance 
and efficiency, and a proactive human capital plan allows EM to build a 
reliable, high-performing organization that will continue to advance 
risk reduction and cleanup across all EM sites.
    After the Environmental Management program completes cleanup and 
closure of sites that no longer have an ongoing DOE mission, post 
closure stewardship activities are transferred to the Office of Legacy 
Management (LM). Post closure stewardship includes long-term 
surveillance and maintenance activities such as groundwater monitoring, 
disposal cell maintenance, records management, and management of 
natural resources at sites where active remediation has been completed. 
At some sites the program includes management and administration of 
pension and benefit continuity for contractor retirees.
    Over the last 50 years, our country has benefited greatly from 
nuclear energy and the power of the atom. We need to ensure a strong 
and diversified energy mix to fuel our nation's economy, and nuclear 
power is an important component of that mix. Currently more than 50,000 
metric tons of spent nuclear fuel is located at over 100 above-ground 
sites in 39 states, and every year reactors in the United States 
produce approximately 2,000 additional metric tons of additional spent 
fuel. In order to ensure the future viability of our nuclear generating 
capacity, we need a safe, permanent, geologic repository for spent 
nuclear fuel (SNF) and high-level nuclear waste (HLW) at Yucca 
Mountain. The FY 2009 budget of $494.7 million sets us on the path to 
meet that goal. The funding will support continued development of a 
repository including:

   Robustly defending the License Application (LA) that we plan 
        to submit to the Nuclear Regulatory Commission in 2008;
   Progression of preliminary designs for facilities required 
        for the receipt of SNF and HLW;
   Continuing essential interactions with state, local, and 
        tribal governments needed to support national transportation 
        planning;
   Completing the horizontal layout of the Right-of-Way 
        application for the Nevada Rail Line;
   Enhancing the design, staffing, and training of the OCRWM 
        organization so that it has the skills and culture to design, 
        license, and manage the construction and operation of the Yucca 
        Mountain Project with safety, quality, and cost effectiveness;
   Addressing the federal government's mounting liability 
        associated with unmet contractual obligations to move SNF from 
        commercial nuclear plant sites; and
   Planning a compliant and well-integrated safeguards and 
        security, safety, and emergency management program for the 
        disposal, transportation, and management of SNF and HLW.

    Designing, licensing and constructing a permanent geologic 
repository for spent nuclear fuel and high level waste will help 
resolve the challenge of safe disposal of these materials and make 
construction of new nuclear power plants more feasible, helping to 
expand our energy options and secure our economic future. In addition, 
a repository is necessary to support nuclear nonproliferation goals, 
contributing to national security objectives.
    In late 2006, the Department announced its ``best-achievable 
schedule'' to initiate repository operations was in 2017. The opening 
date of 2017 was predicated upon enactment of pending legislation and 
was developed without regard to budget constraints. Given the funding 
levels in FY 2007 and FY 2008, the ``best-achievable schedule'' of 2017 
for the initial operating capability date is no longer possible. There 
is an immediate and strong need to address the funding of the 
repository construction program now for FY 2009 and beyond. To ensure 
program success it is critical that the Administration's legislative 
proposal, the Nuclear Fuel Management and Disposal Act, be enacted to 
provide stability, clarity, and predictability to the Yucca Mountain 
repository project. Without funding reform, development of a credible 
schedule for the program is not possible.
             enabling the mission through sound management
    The Department of Energy is committed to continuing the 
transformation of its management culture and increasing its focus on 
results. The Department has continued its efforts to improve in key 
functional areas and is using its strategic plan as the roadmap to 
instill management excellence.
    The Department's human capital management efforts are focused on an 
integrated approach that ensures human capital programs and policies 
are linked to the Department's missions, strategies, and strategic 
goals, while providing for continuous improvement in efficiency and 
effectiveness. The Department has revised its human capital management 
strategic plan to address future organizational needs, workforce size, 
skill gaps, performance management systems and diversity. In FY 2009, 
the Department will implement key components of this strategic plan, 
especially critical efforts to ensure the Department's workforce has 
the necessary skills to carry out its critical mission. To accomplish 
this goal, the Department will continue to implement strategies to 
attract, motivate and retain a highly skilled and diverse workforce to 
meet the future needs of the nation in such vital areas as scientific 
discovery and innovation.
    To continue to improve the Department's stewardship of taxpayer 
dollars, the Department will continue to issue audited financial 
statements in an accelerated timeframe and provide assurance that the 
Department's financial management meets the highest standards of 
integrity. The Department's fiscal year 2007 financial statements were 
reviewed by independent auditors and received an unqualified ``clean'' 
opinion. This was made possible by implementing an aggressive plan to 
mitigate and remediate a number of financial management challenges that 
were identified by the Department and its independent auditors. The 
Department in FY 2009 will continue its effort to build and improve its 
integrated business management system, I-MANAGE, with the deployment of 
budget execution and formulation modules.
    The Department continues to make strides in improving performance. 
The Department and OMB have worked collaboratively to complete a 
Program Assessment Rating Tool (PART) review for 51 of the Department's 
56 programs (91 percent). Since 2002, the Department's average PART 
score has steadily improved from Adequate to Moderately Effective. The 
Department is also leading the government in the number of Effective 
and Moderately Effective programs.
    In FY 2007, the Department improved the quality of its performance 
measures. This was accomplished by evaluating 30 percent of the 
Department's FY 2008 performance measures against a standard set of 
criteria. This analysis identified a need for the Department to improve 
some of its performance measures to make them more outcome focused and 
trendable.
    In FY 2008, DOE will work with OMB to improve the quality of PART 
performance and efficiency goals. This initiative will support 
implementation of Executive Order 13450, Improving Government Program 
Performance. The quality review will result in improved goals, more 
consistency between performance information in the PART and the budget 
submission, and improved performance measures.
    To improve financial performance in project management, the 
Department enhanced the use of Earned Value Management (EVM) techniques 
that objectively track physical accomplishment of work and provide 
early warning of performance problems. A certification process was 
instituted for contractors' EVM systems to improve the definition of 
project scope, communicate objective progress to stakeholders and keep 
project teams focused on achieving progress. Currently, 70 percent of 
the Department's capital asset projects have certified EVM systems. In 
FY 2009, the Department will continue toward our goal of ensuring all 
projects have certified systems which will make projects far more 
likely to stay within planned cost and schedule.
    The Department continues to strengthen information technology 
management by consistent execution of robust IT Capital Planning and 
Investment Control oversight and reporting processes designed to ensure 
successful investment performance, including the use of EVM Systems as 
appropriate, and the remediation of poorly performing investments. 
Through the establishment and use of an Enterprise Architecture that 
aligns to the Federal Enterprise Architecture, DOE has ensured that all 
IT investments follow a comprehensive Modernization Roadmap.
    The Department continues to take significant actions to improve its 
cyber security posture by implementing its Cyber Security 
Revitalization Plan to address long-standing, systemic weaknesses in 
DOE's information and information systems. Specifically, the Department 
seeks to ensure that 100 percent of operational information technology 
systems are certified and accredited as secure and that the 
Department's Inspector General has rated the certification and 
accreditation process as ``satisfactory.'' Additional steps will be 
taken to ensure that electronic classified and personally identifiable 
information are secure.
    To manage the Department's large real property portfolio requires 
reliable data. The Department has improved its Facility Information 
Management System and satisfied the Federal Real Property Council's 
goal of 100 percent reporting of all data elements. Further, the 
Department implemented a statistical validation program to ensure the 
integrity of real property data and better support real property 
decision-making. To make continuous improvements, the Department will 
invest in its infrastructure to reduce overall facility square footage, 
improve energy efficiency and sustainability, and implement an active 
asset management plan to align resource needs with key Departmental 
goals.
                               conclusion
    I appreciate the opportunity to appear before you to present the FY 
2009 budget proposal for the Department of Energy. I will be happy to 
take any questions that members of the Committee may have.

    The Chairman. Thank you very much. Let me start with a 
couple of questions. This issue of funding on weatherization, I 
believe I'm correct that the Administration's budget that was 
submitted calls for zero funding for continuation of that 
program.
    We received a report that McKenzie and Company prepared in 
December which tried to look at what the concrete steps were 
that could be taken to reduce greenhouse gas emissions. They 
looked at 250 different opportunities to reduce or prevent 
greenhouse gas emissions and tried to list those in terms of 
which were the most cost effective, the least cost for the most 
benefit. Building insulation came out first on their chart of 
things that should be done to reduce greenhouse gas emissions 
and the only significant effort we've got at the Federal level 
to promote this building insulation or the, sort of, main 
effort is the Weatherization Program.
    In light of that, how is the Administration reaching the 
conclusion that we should eliminate the program?
    Secretary Bodman. Mr. Chairman, this program resides in the 
office that we call EERE, Energy Efficiency and Renewable 
Energy. We've looked very hard at the array of activities that 
they undertake, particularly looking hard at the questions 
related to building codes with respect to the construction of 
new and different kinds of buildings. That is something that we 
have taken steps on in our own case at the NREL Operation out 
in Colorado. But more importantly we have worked hard to 
establish tighter and more effective building codes throughout 
the country.
    When we look at the effectiveness of the various programs 
and simply the Weatherization Program does not, in my judgment, 
stack up with the other things that they do. That is why it was 
zeroed out. It was simply a matter in tight budgets of looking 
hard at the array of things that are done in this particular 
office and it is not something that made it.
    The Chairman. So your view is McKenzie and Company was 
wrong in identifying weatherization or building insulation as 
the highest payoff?
    Secretary Bodman. No, I saw this when I walked in this 
morning. So, I have not studied it. But I would tell you that 
the design and construction of buildings so that they can be 
insulated more effectively and utilize the sunshine that we 
have with reflecting glasses and so forth, all of that is, I 
think, what is included in building insulation. It would be 
inappropriate, I think, to describe the building insulation as 
something that the Weatherization Program does in its complete 
program.
    The Chairman. Let me ask on this issue of improved 
efficiency building codes. We had a provision that we enacted 
in the 2005 legislation that authorized the establishment of a 
grant program to help states adopt the latest energy efficiency 
building codes, to improve code compliance. I can't find 
anywhere in the budget where you're proposing to fund that. Am 
I missing it there somewhere?
    Secretary Bodman. No, I think we have small amounts that 
are in the EERE budget that are intended to help the states, 
but it's a few million dollars. It's not hundreds of millions 
of dollars.
    The Chairman. So there's no real grant program that's been 
established?
    Secretary Bodman. No, sir----
    The Chairman. What should Congress do since we've already 
authorized that. I guess we go through the appropriations 
process, if we want to see grants provided of that type we need 
to add funding to the appropriations.
    Secretary Bodman. I think that's right. I think it's fair 
to say that the Administration looked at that and concluded 
that it was not something that was worthy of and competed 
effectively in looking at solar energy, wind energy, biofuels, 
all the other things that go on in EERE's office.
    The Chairman. In the Office of Science one thing I would 
commend you on is I understand your proposal is to establish an 
applied hybrid vehicles program there and you're requesting 33 
million dollars for that in the Office of Science. I was told 3 
years ago that you were intending to initiate a similar Office 
of Science Program on applied solid State lighting. I can't 
find any evidence that that has been proposed for funding or 
has happened. Do you know what's been done there or what you're 
proposing to do there?
    Secretary Bodman. I think it's in there. We do have efforts 
that are underway. I don't recall. I'd be happy to get you the 
numbers for the record, sir, but I do believe that it's there.
    The Chairman. I would appreciate that.
    Secretary Bodman. All right.
    [The information referred to follows:]

    In the Spring of 2006, we held a workshop on basic research needs 
for solid state lighting. Had the FY 2008 appropriation supported the 
requested level, we would have been able to initiate solid state 
lighting research during FY 2008; however, it did not. The FY 2009 
budget request proposed Energy Frontier Research Centers which will 
bring together teams of investigators to address the grand challenges 
in basic research, asidentified in several grand challenges workshops, 
and could include both solid state lighting and electrical energy 
storage. These new activities will complement the core research 
programs in semiconductor physics, nanostructured materials synthesis 
and design, and fundamental light-matter interactions, which provide 
the underpinning knowledge base for a broad range of energy utilization 
and conversion applications.

    The Chairman. One other issue I wanted to ask about that's 
not directly in your budget, but we passed as part of the 2005 
legislation, various tax provisions to encourage development of 
alternative energy, to encourage more efficient use of energy 
and the production tax credit, section 45, the investment tax 
credit for solar energy. Those are scheduled to expire at the 
end of this year. There's nothing in the budget, the overall 
budget, that the Administration that proposes to extend those. 
They're all scheduled to expire before this Administration 
leaves office.
    I asked Secretary Paulson yesterday at our hearing in the 
Finance Committee if that was an indication that the 
Administration didn't want those tax provisions extended. He 
said that it was not, but that he was not an expert on energy 
and I should ask you as to what the Administration's position 
was on that subject. It struck me that those tax provisions 
were some of the most useful things we did in the 2005 bill to 
actually promote development of alternative energy. I think it 
would be unfortunate if we were to allow them to expire. But I 
would be interested in your view.
    Secretary Bodman. No, this is not meant to indicate, you 
know, either support or opposition to the extension of the tax 
credits. I think it's a question that I expected to be asked 
and we would be happy to work with you on that and to make a 
determination as to whether or not and if so, how long and how 
much the subsidies should be.
    The Chairman. Senator Domenici.
    Senator Domenici. Thank you very much, Senator Bingaman. 
Mr. Secretary, I think I indicated how happy I was after a 
couple of years of not being so happy when we finally got your 
office loan guarantees and you have experts there. It seems to 
me you're up and at `em and that you've--we've got 
authorization for you for a very substantial amount, 18 plus 
billion for nuclear. I don't remember the number for----
    Secretary Bodman. I think it's two for the enrichment of 
the non-utility part of it and then there is an extent to the 
total is some, but it's an additional 18 billion dollars or 18 
\1/2\ billion dollars for presumably largely renewable energy.
    Senator Domenici. Right. I guess I'm asking do you really 
anticipate that the insurance of a loan guarantee before the 
end of this year could happen?
    Secretary Bodman. Yes, sir.
    Senator Domenici. That's terrific.
    Secretary Bodman. I believe that it could. We have had 16 
of the over 100 applications that were deemed to be worthy of 
further study. We have now met and completed meeting with all 
16 companies and then we have asked them to deliver to us, 
which we expect to be here in the next couple of months, or 
that kind of timeframe, their formal applications. I would 
think that we would then go to work on them and I would expect 
that we would be in a position to issue loan guarantees, I 
hope, before the end of this year.
    Senator Domenici. Mr. Secretary, when we did this we were 
quite surprised to find the House with the interest that they 
had, but they wanted a very large amount of dollars for 
renewable, non-nuclear which we hadn't looked at the big, big 
dollars. But we now have big dollars available for the non-
nuclear renewables. What might that be as you see it?
    Secretary Bodman. First of all, the Energy Policy Act of 
2005 requires us to notify the appropriators of both the Senate 
and the House, I believe, of our intention to undertake a loan 
guarantee solicitation. I would expect that that notice would 
be made to you all sometime in the next couple of months. That 
means that this summer we would then there remains, I think, a 
45 day period after we notify Congress. After that then we are 
free to proceed with the solicitation.
    I would expect that we would probably refer to both nuclear 
as well as renewable energy and undertake them both at the same 
time. It may not be that we can process them. Renewable energy 
projects tend to be smaller. They tend to be less expensive and 
therefore the care with which we need to study it and look at 
it would be greater, I would believe. So it may be that the 
renewable ones would get done faster, but we would therefore 
still be undertaking and looking hard at the nuclear side.
    Senator Domenici. I have one last question and then I'll 
stick around and go a second round if the Chairman has one. 
Increasing the science investment in the NNSA Laboratories, I'd 
like to ask you, Mr. Secretary. You have spoken frequently 
about the need to support the investment in science to build 
science capabilities at Los Alamos.
    I believe it's critically important that we initiate the 
process including providing sufficient funding for the 
refurbishment of the Los Alamos linear accelerator. You're 
aware of what it would lead to?
    Secretary Bodman. Yes.
    Senator Domenici. It could lead to a completely new process 
ending up at Los Alamos. This facility is badly needed and in 
need of an upgrade to sustain the laboratory scientific 
capability into the future. Since a new management team has 
been in place I've endorsed the laboratory and encouraged them 
to develop a new science plan.
    It is a conclusion of the laboratory leadership and 
cooperation with the Department that the lab should focus on 
building upon their expertise and materials under extreme 
conditions. LANL can use the refurbished accelerator to 
demonstrate and expand this capability for both the defense 
mission as well as open scientific research, they have come up 
with a scientific facility known as MARIE, Matter-Radiation 
Interactions in Extremes. You've got to have MRIE because 
nobody could possibly use the others.
    The first step in this process of refurbishment is LANSCE. 
Get Lance up to speed. The President's budget seems to say we 
want to do this by MARIE, but then it provides a miniscule 
amount of money to support the study of the upgrade. What does 
that mean to you?
    Secretary Bodman. I think it means that there are other 
ways of funding it. Within the Science Office there is a new 
program. I think that we've asked for 100 million dollars for 
the program that would be run on a competitive basis, but I 
would think that might be a reasonable source of supply of 
funding for the work on MARIE.
    I don't think there is any question that we're serious 
about it. I'm pleased to be able to say that to you.
    Senator Domenici. Thank you very much. Thank you, Mr. 
Chairman.
    The Chairman. Senator Dorgan.
    Senator Dorgan. Mr. Chairman, thank you and Mr. Secretary, 
thank you for being here. I have a lot to ask you, but I won't 
have the time with 5 minutes. I want to talk with you at some 
point about Future Gen and where we're headed and the urgency 
of finding ways to continue to use coal without releasing 
CO22 into the atmosphere. If it's not 
Future Gen what is the timing and the urgency to get this done.
    So there are a lot of issues and I will with----
    Secretary Bodman. In a quick word, sir, it is carbon 
capture and sequestration, I believe. But that's the answer and 
that's what the re-management of Future Gen is intended to do, 
to do it in multiple sites and so that in a simple way that's 
the answer to your query.
    Senator Dorgan. On the appropriations side, Senator 
Domenici and I, Chair and Ranking Member, will, I assume, have 
the opportunity to ask at greater length on those issues.
    Secretary Bodman. Right.
    Senator Dorgan. Other appropriations issues. I want to talk 
to you about SPR. I'll be introducing today some bipartisan 
legislation that says let's take a time out in putting oil 
underground. Let me just describe my strong feelings about this 
issue and have you respond to it.
    SPR is almost 97 percent full. Our international 
requirements are 90 days of strategic stocks. Your own Web site 
says that there's 118 days of public and private stocks for 
import protection in this country. That's from your Web site.
    Now when oil is 90 and 100 dollars a barrel and the 
Department is taking 50,000 barrels a day and much of it sweet, 
light crude in royalty in kind payments and then sticking it 
underground. I just think it defies all common sense. You've 
got a half a billion dollars down at the Department from the 
exchange of oil from Katrina back in September and October. 
You're not using that half billion dollars. You could to go out 
and buy in the market to fill SPR, but you're not doing it.
    I understand why you're not doing it. Why would you do this 
when prices are bobbing around 90 and 100 dollars a barrel? Yet 
when you take in the royalty-in-kind oil from the Gulf what 
you're doing is just sticking that underground.
    Now this committee has testimony from Mr. Vergler who said 
this, let me just read it quickly. The rise in light, sweet 
crude prices to almost 100 dollars a barrel in November came 
about in part because the Department of Energy has been 
removing a significant share of the daily volume of this type 
of crude from the market for storage in SPR. The volumes have 
amounted to as much as three-tenths of a percent of the global 
supply of sweet, light crude available. The DOE's action may 
have added as much as 10 percent to light, sweet crude price 
given the low estimated price elasticity of that kind of oil.
    So my question is with prices 90, 100 dollars a barrel, why 
on earth would we reduce the supply of oil available in the 
marketplace which clearly has the effect of driving up prices. 
Your position seems to be let's top it off. My position is time 
out.
    Now I don't know which is going to prevail, but I'm going 
to introduce bipartisan legislation today to say stop it. 
There's an appropriate time to do this, but we have testimony 
before this committee saying your actions are driving up the 
price of gasoline. It's just intuitive to me that we ought not 
to be doing this when prices are at their record highs. So Mr. 
Secretary, respond please.
    Secretary Bodman. As I visited with you before the hearing 
started, sir, we are required to undertake a study before we 
initiate either the royalty in kind or the use of cash to 
purchase oil for the SPR. I would respectfully disagree with 
the testimony that you just cited. I'm an engineer and not an 
economist and that apparently this gentleman is an economist. 
But I would respectfully disagree with his conclusions. They 
certainly differ from the results of our work which is ongoing 
as we speak.
    We're re-running it. We do this on an annual basis looking 
hard at whether the royalty in kind acquisition of oil would 
affect the price in any meaningful way. The conclusion is that 
it does not.
    Senator Dorgan. It clearly affects the price. You're just 
saying it doesn't affect the price in a meaningful way.
    Secretary Bodman. It does not affect the price to any 
meaningful degree. It is less than one tenth of 1 percent of 
all of the oil that is used in the world everyday. We're now 
using about 70,000 barrels a day. We use about 85 million 
barrels a day of oil.
    So it is simply that. It is the work that is done. We have 
by our accounts 58 days. That does not count the privately 
owned inventories, but I believe that we are correct in being 
conservative and looking just at the government owned 
inventories. That's the reason that we do it.
    Senator Dorgan. Mr. Secretary----
    Secretary Bodman. There is room in my judgment for 
different opinions on this and that's our view.
    Senator Dorgan. Mr. Secretary it's not being conservative 
to go out and buy oil at the highest prices at this point. My 
only point is this. I used to teach some economics in college 
and I understand that you can make the point that there's not a 
meaningful increase, but you can't make the point that there's 
not an impact on the price if you reduce supply.
    My point is simply that the sweet, light crude which has 
been referenced to us as much more important and different 
market. You take that portion of sweet, light crude off the 
market, 50,000 barrels a day. The point is it does affect the 
price and you know, I mean, who's right?
    Why not be cautious on the side of helping customers and 
consumers at this point who are out there driving up to the 
pumps and wonder why the Department of Energy's taking 50,000 
barrels of oil and sticking it underground. You're not doing 
that with your own money that you got a half a billion dollars. 
I assume if you thought if it was a good idea to keep doing 
that you'd spend your half billion dollars, but you know it's 
not a good idea to take it off the market at a hundred dollars 
a barrel and stick it underground, so----
    Secretary Bodman. Senator, I just would say to you that the 
theory of your criticism and your comments are that these are 
very high prices. There is a reason that markets are and that 
people are buying oil at 88, 89 dollars a barrel. They think 
it's going higher and so that's what a market means.
    Senator Dorgan. Secretary, sure they do. We've got 
investment bankers and hedge funds buying. We have got, for the 
first time in history, investment bankers buying storage to 
keep oil off the market precisely because they believe they're 
going to make money. The fact is every bubble bursts and this 
bubble will burst as well.
    I've gone far off field here but I do hope we can have 
continued discussions about whether we'll end up with more oil 
on top.
    Secretary Bodman. I'd be happy to talk about it, sir. 
Anytime.
    The Chairman. Senator Barrasso.
    Senator Barrasso. Thank you, Mr. Chairman. I'd like to 
follow up a little bit on this one-tenth of 1 percent or less 
than one-tenth of 1 percent--maybe an insignificant or 
unmeaningful amount. I see that of this budget of 25 billion 
dollars less than one-tenth of 1 percent or 22 million is going 
to be expended in Wyoming, in my home State. To me that is an 
insignificant amount in a State where we are right at the top 
in terms of coal, in terms of oil, in terms of natural gas, 
uranium, renewables, wind power and plus your budget would 
recommend a 36 percent reduction in expenditures in Wyoming and 
that is very concerning to the people of Wyoming.
    Specifically in a State where we have enormous energy 
resources and enormous amounts of coal I believe that the 
Department is not moving as expeditiously as it should with 
respect to clean coal research. Now, I notice that Future Gen 
was brought up and perhaps some time for additional 
questioning. Last year you said the foundation of the 
Department's clean coal research program is the Future Gen 
project. Could you explain to me what has changed and if you're 
going to be submitting a reprogramming request for perhaps a 
restructured Future Gen?
    Secretary Bodman. Yes, I think we have attempted to do that 
Senator. I think the goal of the revised Future Gen project 
should be the carbon capture and sequestration program. Without 
that, the use of coal in at least the near term, for the next 
five to 10 years, is going to be in question.
    So we have got to demonstrate that and we've got to 
demonstrate it in a variety of ways. So we are working very 
hard, everything from the Office of Science to the Fossil Fuel 
Office which has a programming war. I've just been handed a 
note, so I'm now trying to read and talk at the same time.
    Senator Barrasso. Take your time, Mr. Secretary.
    Secretary Bodman. No, no. But our goal is to try to 
sequester the carbon dioxide and to undertake it in a variety 
of ways and so that we can do it in multiple sites. That's 
really what the goal is going to be. I am hopeful that we will 
be programming that.
    I have not, I guess--the note that was handed to me says 
that we have, that in terms of reprogramming, we have not 
decided whether a formal reprogramming is going to be required 
or not and so that we're not using that term as such. But I 
just wanted to say that I think that the heart and soul of 
using coal which we are great believers in, is going to be 
using carbon capture and sequestration and that's exactly what 
we're trying to accomplish.
    Senator Barrasso. I suggest that perhaps Montana, Colorado, 
North Dakota or Wyoming could be helpful to you as you look to 
develop some of those projects. Will you today commit to some 
progress being made during this Administration on this specific 
area which is so crucial to our future?
    Secretary Bodman. To?
    Senator Barrasso. Carbon capture and sequestration.
    Secretary Bodman. I will commit to you that we are very 
motivated to try to look very hard at this. We have now 
undertaken a request for information coming from the industry, 
from companies, largely utilities that may have an interest in 
an integrated gasification and combined cycle process. Then at 
the same time whereby we would then fund the establishment of, 
I think it's a million tons a year of carbon capture and 
sequestration for that unit. That would be our funding. So I 
can easily commit to you that we are heavily motivated and we 
will work very hard on it.
    Senator Barrasso. We certainly believe that clean coal 
research is going to be crucial to the future needs of our 
Nation and the world, and we need to be a leader in that, Mr. 
Secretary.
    Secretary Bodman. Yes, sir.
    Senator Barrasso. Thank you.
    Two other quick issues, one is the Western Research 
Institute which has a relationship with both the University of 
Wyoming and the University of North Dakota. That has been 
zeroed out in its appropriation line.
    I think these two locations have been a real success story 
in energy innovation in terms of research, in terms of 
leveraging private funds, and in terms of coming up with 
patents and technologies. I'm sort of curious why the 
Department of Energy would decide to walk away from this 
endeavor.
    Secretary Bodman. I can't really respond. I'd be happy to 
respond for the record. I've got books full of things that I've 
been informed about, but that isn't one of them.
    [The information referred to follows:]

    The Western Research Institute (WRI) located in Laramie, Wyoming is 
a de-federalized institution that has been part of the Cooperative R&D 
budget line in the Fossil Energy R&D Program since 1983. The Coopertive 
R&D Program supports activities of Federal, Industry and research 
institute endeavors and partnerships. A new solicitation was issued in 
FY 2007 and WRI was selected along with the University of North Dakota 
Energy and Environmental Research Center (UNDEERC) in December 2007 for 
the continuation of their cooperative agreement for the next five years 
with a requirement for private sector cost sharing of 20%.
    The Department did not request any funding for this program because 
we believe that WRI and UNDEERC can apply for funding on a competitive 
basis for awards from various programs in Fossil Energy and the rest of 
DOE. The centers perform valuable research; however, the taxpayers will 
benefit more if these institutions were selected for awards on a 
competitive basis.

    Senator Barrasso. The other is a testing site called the 
Rocky Mountain Oil Testing Site.
    Secretary Bodman. That one I know about.
    Senator Barrasso. There's a producing component as well as 
a testing component.
    Secretary Bodman. Right.
    Senator Barrasso. I toured there within the last month. 
They do remarkable work. They've been very significant from 
both a research as well as a production standpoint and I'd 
commend you for keeping that, at least at your level, and would 
recommend that you continue to support such a productive 
program.
    Secretary Bodman. Thank you.
    Senator Barrasso. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Tester.
    Senator Tester. Thank you, Mr. Chairman. I want to thank 
you for being here today, Sam.
    Secretary Bodman. Yes.
    Senator Tester. I want to step back a little bit just to 
clarify what you said that deals with the weatherization 
assistance grants. What I thought I heard you say to the 
chairman was that in the overall budget there wasn't the cost 
benefits to that program to even flat line the funding and 
that's why you took--that's why it was reduced by some 220 
million dollars.
    Secretary Bodman. That's correct, sir.
    Senator Tester. That's a bit confusing because I think this 
book is one that you guys put out, right?
    Secretary Bodman. I don't know.
    Senator Tester. I think it is. It's your energy budget 
request. It says in here that by 2030----
    Secretary Bodman. Oh, then we did put it out, yes.
    Senator Tester. So this is your language not mine. By 2030 
this program could provide cumulative consumer's savings of 2.5 
billion and roughly the same savings to electric power 
industry. Consumer savings would grow to more than 200 billion 
by mid century. Additionally if you want to talk about carbon 
sequestration and capture this will help eliminate that. Carbon 
savings could be 250 million metric tons more than 500 metric 
tons down the line.
    That tells me that you're justifying this program here in 
your language. Yet you're pulling the money out over here and--
--
    Secretary Bodman. All I can tell you is sir, I don't have 
that document in front of me, but I can tell you that when we 
looked at the effectiveness and the financial returns from the 
efforts to weatherize homes they did not match up with the 
cost. I think the return on it was between five and 10 percent. 
That was viewed on our terms as being less than we could 
accomplish by working on zoning, working on energy star 
appliances, working in a variety of ways that that office does.
    Senator Tester. Ok. I can just tell you that this is 
exactly the opposite of everything I've heard. The low hanging 
fruit in energy and energy security for this country, I've 
always read and I would frankly believe is conservation and 
efficiency.
    Secretary Bodman. I agree with that.
    Senator Tester. This tends--this seems to be pulling away 
from that heading in a different direction. But I think we've 
made the point. My only concern is I hope that this particular 
line item in the budget was put forth in good faith. I'm not 
assuming that. This is a good enough program with the 
legislature the Congress will put it back in.
    Secretary Bodman. Sir, it was done for the reasons that I 
mentioned.
    Senator Tester. Ok. Thank you. It is my understanding that 
the Department of Energy is committed to funding several 
regional carbon sequestration partnerships, phase three 
partnerships, and if you're not familiar with these let me 
know. I think there's seven.
    Secretary Bodman. That's correct.
    Senator Tester. That will be funded and I believe that's 
still the intent, correct?
    Secretary Bodman. That is correct. We have issued funding 
for four of the seven.
    Senator Tester. When will the other three be funded?
    Secretary Bodman. I don't know. I think it's going to be a 
question of and I'd be happy to give you more something more 
specific, but the question has been posed.
    Senator Tester. Ok.
    Secretary Bodman. How effective is going to be the 
scientific study of making sure that if you do put the carbon 
dioxide beneath the surface of the earth that it stays there? 
How do you instrument it? That's the question.
    Senator Tester. That absolutely is the question and I 
applaud the agency's investment in this technology. As Senator 
Barrasso pointed out, it's critically important if we're going 
to have coal in the future. I think most people we talk to 
think that coal is going to be part of the energy portfolio for 
quite a while to come.
    So if you could get back to me and tell me there's a 
project in Montana and Wyoming, Big Sky Sequestration Project 
and tell me when that will be funded.
    Secretary Bodman. I'd be happy to do that.
    Senator Tester. I would certainly appreciate it.
    Secretary Bodman. Sure.
    [The information referred to follows:]

    DOE has made awards to four of the Regional Carbon Sequestration 
Partnerships (RCSP) for Phase III Large Volume Sequestration Testing. 
The remaining three Phase III projects are in the process of being 
negotiated. The negotiation process requires finalizing the technical 
scope of the project along with undertaking an evaluation and cost 
analysis of the proposed costs to verify their appropriateness. 
Independent cost verification is being undertaken by DOE to ensure the 
project costs are adequate prior to award. Independent technical review 
will be conducted at the end of March 2008. This technical review, 
conducted by an internationally renowned group of experts, will ensure 
that science plans are adequate. DOE is conducting reviews concurrently 
with negotiations and plans to award the remaining RCSP Phase III 
Projects when completed. The estimated time-frame for the remaining 
awards, including the Big Sky Regional Partnership is the summer of FY 
2008.

    Senator Tester. Just a side--I know that I've only got 
about 30 seconds left--the Future Gen project is a little bit 
confusing to me. That is it was recently scrapped because, the 
information I got, it cost too much money.
    Secretary Bodman. That's right.
    Senator Tester. Now we're coming back with another program, 
another Future Gen program that has what, three or more. I 
think three facilities, right?
    Secretary Bodman. We don't know.
    Senator Tester. This is going to add money to the budget 
now for this and it looks to me like last week it cost too 
much. Next week it looks like a good project so we're shifting 
gears. That kind of bothers me because particularly in energy 
policy we ought to be looking out 3 to 5, 10, 20, 50 years from 
now. So I don't get that part.
    Secretary Bodman. Let me try to explain it to you. That 
project was originally 950 million dollars. That's what I was 
told when I came into this job. It was re-estimated at being a 
billion eight. That was last summer.
    It was at that point in time that I blew the whistle on the 
project and with the management of the companies that were 
involved here and said look, this meant that the government was 
going to have a billion three of funding that we were required 
to put up and they were going to have the remaining 500 or 400 
million dollars.
    Senator Tester. Who's they?
    Secretary Bodman. This is the called the Future Gen 
Alliance. It is a group of utilities, coal companies----
    Senator Tester. Ok.
    Secretary Bodman [continuing]. That operate. It's 
international.
    Senator Tester. It's the private sector.
    Secretary Bodman. It's the private sector and we asked 
them. I said look, we're going to live with this billion three. 
We'll do that and we will go to bat with OMB to try and get the 
money for it, but I want you to sign up for a different split. 
If the cost goes beyond the billion eight, I think the cost is 
going to go much higher.
    Senator Tester. What did they say?
    Secretary Bodman. Eventually they said they would do it, 
but they would fund it by being able to borrow against it and 
thereby increasing the risk of the, in my view, of the entire 
project. So, that is the reason that I felt, that it didn't 
make sense to go forward. That is the reason that we have 
focused on trying to identify those utilities that have an 
interest in building an IGCC plant and that we would then fund 
the carbon capture and sequestration.
    We hope it will be a multiple of units. That is to say it 
would be three or four units. I don't know that because I don't 
know how much it's going to cost.
    Senator Tester. Ok. Thank you, Mr. Chairman. Thank you.
    The Chairman. Senator Craig.
    Senator Craig. Thank you very much, Mr. Chairman. Mr. 
Secretary, again welcome to the committee. I know this is your 
last time presenting a budget before this committee.
    Secretary Bodman. Yes, sir.
    Senator Craig. So let me say at the onset how much I've 
appreciated working with you on a tremendous number of issues 
and I think the legacy that you've helped us establish through 
the Energy Policy Act of 2005 and the one we passed last year. 
The chairman, the ranking member and others that have 
participated in this is a positive one for our country.
    Secretary Bodman. Thank you, sir.
    Senator Craig. I think history will recognize the sense of 
urgency that we've developed in the last decade on a need for 
new energy technologies, independence, all of those kinds of 
things that lead us where we are headed.
    Let me turn parochial though in my last time before the 
committee. In working with you over the next many months to 
solve some problems and look and recognize the future of the 
National Lab in my State that is now the lead nuclear lab doing 
really some phenomenally positive things as many of our labs do 
for our country. I want to talk about our need to spend 
valuable dollars for revitalizing infrastructure, the R and D 
to support our Nation's nuclear renaissance that is so 
important and what I believe in part is a waste. A waste of 
money as it relates to waste.
    Do you know the status and if not can you get back to me 
within a week regarding the request I made that the Legacy 
Waste liabilities currently under the INL responsibility be 
transferred to the ENM program this year. That helps us sort 
out the money so that money can flow to infrastructure while 
keeping our clean up on track on program.
    Secretary Bodman. I don't see how that is going to help the 
problem. We've got issues in Idaho with enough funding. I admit 
that. But I don't know how moving money around within the 
Department. It's all one budget.
    Senator Craig. We divided the contract out there. We've 
redirected, as you know, during your tenure and others to 
reshape that. Let me work with you in that arena. There are 
many who disagree with your assumption as it relates to how 
best to spend the money.
    Secretary Bodman. I'd be happy to work with you, sir, under 
any circumstances.
    Senator Craig. The National Academy of Sciences report laid 
out a number of recommendations on how DOE working with the INL 
could fix the ailing infrastructure at the lab. How are these 
recommendations considered when compiling the FY2009 budget 
request? Were they used as a template of any kind?
    Secretary Bodman. This is with respect to the two buildings 
that were to be?
    Senator Craig. That is certainly a part of it.
    Secretary Bodman. That's a part of it? They were looked at 
by the NNSA and their recommendations to me and to the deputy 
who did the work on the budget were that it was very expensive. 
That it was going to be a very expensive undertaking. That we 
had better uses for the money in Idaho.
    Senator Craig. Buildings 651 and 691 are the ones we are 
talking about in part.
    Secretary Bodman. Right.
    Senator Craig. As it relates to upgrades needed for the 
special nuclear materials issues, the GNEP issues that are 
still on course, I think.
    Secretary Bodman. Right.
    Senator Craig. My staff requested a briefing with NNSA on 
these upgrades and we are still waiting for a response. Are you 
aware of DOE NNSA's intent at the time? Obviously you are by 
the recommendations that were made.
    Secretary Bodman. Yes.
    Senator Craig. Is there a need for clarification from 
Congress on this issue?
    Secretary Bodman. I think that we will apply for a 
reprogramming of the funds. I think there's some 14 million 
dollars that were put in the budget in fiscal year 2008 and we 
will be asking for a reprogramming of those funds because it 
was viewed that neither of the two buildings for which this 
money was intended made any sense, at least as we saw it. So, I 
would be happy to encourage you to encourage the NNSA to make 
sure that they meet with your staff.
    Senator Craig. Yes. Ok. I'd like to sit down with you on 
those at least to understand what you and your people are 
seeing that we're not.
    Secretary Bodman. All right, sir. I'd be happy to do it.
    Senator Craig. The Idaho Clean Up Project could well be the 
next Rocky Flats type success. We're just on the verge of that 
opportunity.
    Secretary Bodman. Yes.
    Senator Craig. What is the logic of reducing funding and 
delaying clean up when the end is in sight and the DOE can hang 
on their chalkboard another major clean up success? That's my 
next question.
    Secretary Bodman. We have within the Department, this has 
been a very--each year is a challenging budget year. We have a 
number of sites where we are not going to be able to meet 
milestones and legal agreements that we have signed on to 
because we simply don't have the funds as we have looked at it 
and Idaho is one of them. Because the view is that we have 
other sites where there is much greater danger to the 
environment and much greater, much more serious problems.
    Therefore we have reduced the funding for Idaho. We've 
reduced it at Oak Ridge. We've reduced a number of places in 
order to focus on Hanford and on Savannah River and other 
sites. We've reduced it in part at Oak Ridge and increased the 
funding elsewhere at Oak Ridge.
    Senator Craig. Mr. Chairman, I know I'm out of time. One 
very quick followup. By your answer are you telling me that 
you're going to miss milestones at Idaho this year by the 
reduced funding?
    Secretary Bodman. I don't know the answer to that.
    Senator Craig. Because if that's happening or if that's the 
intent of the budget process that you're laying before us.
    Secretary Bodman. Yes.
    Senator Craig. Then you'd better begin dialogs with the 
State in rapid succession.
    Secretary Bodman. I think that we are. We have begun 
dialogs with all of the State governments of which where we 
will be falling short in terms of milestones.
    Senator Craig. Thank you.
    The Chairman. Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman. I want to 
say good morning and hello to all here.
    Secretary Bodman. Yes, sir.
    Senator Akaka. I want to commend and thank Chairman 
Bingaman for all of his hard work throughout 2007 to ensure the 
passage of the Energy Independence and Security Act, and also 
thank Ranking Member Domenici for his efforts, as well. I want 
to welcome Secretary Bodman; and, thank you for the work you 
do----
    Secretary Bodman. Thank you, sir.
    Senator Akaka [continuing]. For our country. I'm happy to 
see that you have brought some good news to our meeting today 
and that there has been an overall growth in the Department of 
Energy budget. I'm pleased to see this overall increase as well 
as the increase in the budget for research and development of 
biofuels and geothermal technology. I'm so glad that you are 
focusing on global energy security in the future.
    Secretary, it is my understanding that you've increased the 
budget for biofuels R and D by 26.82 million dollars while 
reducing the budget for hydrogen fuel R and D by 64.84 million 
dollars. My question to you--is there a particular feedstock 
you're pursuing more than others? Specifically I'm serious and 
curious about your research in the use of algae as a feedstock 
and how much progress has been made in this regard?
    Secretary Bodman. With respect to algae, as it turns out, 
algae has the ability to manufacture a fuel that can be 
withdrawn from the algae merely by pressing it. That it is a 
diesel fuel. We are making, as you know, good progress on that.
    In addition, a lot of that is going on in the private 
sector. There is a lot of work going on both in what the 
government is working on as well as the private sector.
    Senator Akaka. Since you are cutting your hydrogen fuel 
research moneys, are you currently taking any action in the 
area of methane hydrate research and exploring its potential as 
a fuel source in the future?
    Secretary Bodman. No, we are not funding methane hydrates 
within the Department. That is being done in other parts of the 
government. NOAA being one I believe. So that it is something 
that, at least as we viewed it, methane and the production of 
natural gas with eight dollar natural gas which is today's 
price, we think it's difficult to warrant or to justify 
spending taxpayer money on the production of methane hydrate.
    Senator Akaka. Secretary, I'm pleased to see that you've 
increased your funding for geothermal technology----
    Secretary Bodman. Yes, sir.
    Senator Akaka.[continuing]. By 51.4 percent. As you know, 
we have a geothermal plant on the Big Island of Hawaii, which 
supplies about 20 percent of that island's total electricity 
needs. There are other countries, such as Iceland, that have 
not only become energy independent largely because of 
geothermal, but have also turned it into a successful economic 
venture. Do you have plans to work collaboratively with other 
countries that have taken the lead in geothermal energy? If so, 
what are they?
    Secretary Bodman. You know I don't know the answer to that 
question. I do know that the work that we are doing on 
geothermal energy is intended to be in a new research direction 
that actually came out of MIT. The faculty up there wrote a 
report and recommended that a substantial increase in 
geothermal energy could be accomplished by this government by 
the, what they call enhanced geothermal systems.
    That means breaking up the rock. What they used to call 
fracking in the oil business. Breaking up the rock beneath the 
surface of the earth and thereby producing more steam and more 
energy. So, I do know that. That's what motivated, I think it's 
an increase of substantial sum, the 30 million dollars of 
funding for that we've asked for in this budget.
    But in terms of what work we are doing with foreign 
governments, I don't know our foreign companies. But I'd be 
happy to get back to you on that.
    [The information referred to follows:]

    In 1997, the Department of Energy was an original signatory of the 
Geothermal Implementing Agreement, administered under the auspices of 
the International Energy Agency. Today, the Department is active in the 
Agreement, which includes 12 countries and 3 private companies working 
in cooperation to share information about geothermal energy development 
around the world. The opportunity identified by MIT, Enhanced 
Geothermal Systems (EGS), has spurred renewed interest in geothermal 
energy in many countries, and within the past few months the Department 
has been in discussions with officials from Iceland, Australia, and New 
Zealand about stronger collaborative ties. At this year's Washington 
International Renewable Energy Conference, we met withinterested 
parties from those countries and others to discuss how we might form a 
partnership to work more closely on EGS technology development.

    Senator Akaka. Thank you. I look forward to that. Let me 
finally say, regarding the decrease in funding for water 
power--you mentioned that current funds are sufficient. As this 
new program gets underway and a program road map is 
established, I just want you to know that I'm interested to 
know what type of road map you envision, as well as a timeline.
    Secretary Bodman. When you say water power what is it that 
you mean? Do you mean hydro power or do you mean tidal power?
    Senator Akaka. Tidal power.
    Secretary Bodman. Tidal power. Yes, that's something that I 
think the Congress put into the budget in fiscal year 2008 and 
we've added another three million dollars to it in order to get 
it got done late in the year. So we will not have spent the 
whole ten million dollars. So we will have 13 million dollars 
that we will make available to basically do a study of what's 
available. Where's the work that's going on and where might we 
be funding? What kind of research might we fund? That's the 
mission. That's the program.
    Senator Akaka. Thank you very much for your responses.
    Secretary Bodman. Yes, sir.
    The Chairman. Senator Corker.
    Senator Corker. Mr. Chairman, thank you. I'm certainly 
delighted to have the opportunity to talk with our great leader 
at the Department of Energy. I'm glad you brought up Oak Ridge 
and I notice there was a reduction in Environmental Management 
funding that we can talk with on the phone or in some other 
setting. I don't want to waste everybody's time on a parochial 
issue that I'm sure we'll talk about in due time.
    I appreciated Senator Tester's line of questioning in 
particular. But Senator Dorgan has talked to you a little bit 
about an issue today that I know we'll be taking a vote on at 
some time. He's an outstanding promoter of his ideas on the 
Senate floor and I just wondered what your response would be if 
his bill were to pass. Talk about the flip side of that, if in 
fact his bill passed.
    Secretary Bodman. This is the bill related to strategic 
petroleum reserves?
    Senator Corker. That's right.
    Secretary Bodman. Sure.
    Senator Corker. What impact would that have on our country 
strategically? What would you argue? I know you all mostly 
talked about economics.
    Secretary Bodman. Right.
    Senator Corker. But from the standpoint of our country's 
strategic interest what impact would that have?
    Secretary Bodman. The way I look at life we've got about 
57, 58 days of protection in, right now as of today. That if 
we're successful in getting the SPR filled to its 727 million 
barrel capacity as it now exists, we'll be at 60 days of 
protection. We really need to be higher than that.
    So that the idea would be by going to a billion barrels 
which is, as I see it, part of what the Congress has approved 
and that we've asked for funds in the budget that is before you 
for that. That would get us roughly to 75 days looking at an 
increase in the imports that is expected over the next seven or 
8 years, I believe it's by 2017. The President has proposed 
going to a billion and a half barrels. That would get us up to 
the 90 day level of protection by the year 2025. So those are 
the steps that we would expect there to be.
    Senator Corker. Now the President's proposal, is that based 
upon input from people looking at our strategic interest? Where 
did this designated goal, if you will, come from?
    Secretary Bodman. The 90 days came from the agreement that 
we have entered into as a part of our membership in the 
International Energy Agency, IEA, which is in Paris, France. 
It's part of the OECD and so that is a commitment that we have 
to have 90 days worth of protection.
    Senator Corker. The President in his State of the Union 
talked about a Clean Technology Fund. I know that's not part of 
your particular budget directly.
    Secretary Bodman. Right.
    Senator Corker. But I assume that that's something you were 
highly involved in creating.
    Secretary Bodman. Yes.
    Senator Corker. Could you expand a little bit on what in 
essence we're talking about there and what the objectives are?
    Secretary Bodman. The goal, I think it started off with a 
request in the Treasury. This is a program that has been run in 
the Treasury, I believe that Secretary Paulson is responsible 
for. I think the goal would be to have up to two billion 
dollars made available by the United States. I think in the 
budget for this, for fiscal year 2009, I think it's 400 million 
dollars. So the idea would be that over a 5-year period we 
would increase the commitment to it.
    I do know that he has been busy working with finance 
ministers around the world to encourage them to participate in 
it. So it would be a, I don't know, 5 to 10 billion dollar 
program. The idea would be that those would be funds that would 
be made available to the developing nations to use more 
efficient technology, more effective technology in the 
expansion and in dealing with their energy problems.
    Senator Corker. So the parameters really are not yet truly 
set. It's sort of being developed.
    Secretary Bodman. It's going to be a function of how much 
money we, you know, how effective Secretary Paulson is in 
getting contributions from other countries.
    Senator Corker. Mr. Chairman, I know my time is up. I would 
love at some point to, Mr. Secretary, talk about carbon 
sequestration. I know how important that is to the coal 
industry and to our country, actually, with all the reserves 
that we have.
    I guess we've had testimony regarding that. There still 
seems to be a lot of issues to be resolved, many, many issues. 
At some point I hope we can talk more about the actual, 
practical ability to be able to use that in a way that's going 
to make a difference with cap and trade bills that we're going 
to be talking about in the very near future.
    Mr. Chairman, thank you for the time.
    The Chairman. Thank you.
    Senator Salazar.
    Senator Salazar. Thank you very much, Senator Bingaman and 
Ranking Member Domenici. It has indeed been a pleasure to be a 
member of this committee now and hearing you, Secretary Bodman, 
for the fourth year in a row. It just reminds me of how fast 
time flies around here.
    Secretary Bodman. It does happen fast.
    Senator Salazar. It does happen fast. I very much want to 
get a copy of Senator Domenici's two pages of some of the work 
that we've done out of this committee over the last several 
years because I think it's important for the committee to 
remind itself of some of the work that we've been able to do 
with you.
    Let me also thank you, Secretary Bodman, for your interest 
and your support of the National Renewable Energy Lab. I think 
the scientists who work there in Golden, Colorado really do 
hold the keys to our clean energy future. The support that 
you've shown with your physical presence there and your 
financial support is something that we very much appreciate. I 
know a number of my colleagues have been a part of tours that 
we've had there on the site.
    I also want to just make a quick comment on the energy 
efficiency and renewable energy budget, the EERE. That is I 
appreciate what you're doing on geothermal. You know I think 
geothermal is one of those technologies, one of those 
realities. It's been around forever.
    I remember our potato cellars essentially used to take 
advantage of geothermal in order for them to be able to keep 
the potatoes through the winter. So it's been around forever. I 
think it is one of the essential components of how we deal with 
our energy future. So I appreciate the mark up significantly 
that you have for geothermal technology in your budget request.
    I would only note that I also think solar is a very 
important aspect of how we move forward with harnessing the 
power of the sun. You do have a 7.4 percent decline in that in 
your budget request. I'm hopeful as we work through the budget 
process we might be able to wrap up what we do with respect to 
solar. So I may have some more questions that I may ask of you 
later on if I get an opportunity on that part of the budget.
    I want to take off on what Senator Corker was speaking 
about and that's the Clean Coal Power Initiative. I appreciate 
you funding up that aspect of our programs here. Senator 
Bingaman and I worked very closely on getting the carbon 
sequestration program included in the last energy bill that was 
signed. So if you can take just a minute, minute and a half, 
and kind of describe for us as a committee where you see us 
going with respect to coal and carbon sequestration as we 
authorized in the 2007 bill.
    Secretary Bodman. If you will forgive me I've got a sheet 
here with the numbers on it. In terms of carbon sequestration 
and the Future Gen project we have requested 156 million 
dollars and that is going to be working on what they call pre-
combustion carbon capture and sequestration. This is in after 
you gasify the coal you then can remove the carbon dioxide from 
the stream and that will help.
    Second the CCPI which is the initiative that is intended 
for both pre and post combustion CCS in plants that already 
exist and so that that's 85 million dollars. The sequestration 
program is the partnerships. That's 149 million dollars.
    Senator Salazar. Let me just ask you this question.
    Secretary Bodman. Yes.
    Senator Salazar. With respect to all of those amounts 
relating to coal and carbon sequestration, do you think those 
are the amounts of money needed for us to be able to stand here 
a year from now saying that we're making some progress on 
carbon sequestration.
    Secretary Bodman. Yes, I think so. I do believe it, yes, 
because the total of all of this is 648 million dollars. That's 
a 25 percent increase. That's more money then it's been asked 
for and most of it, most of it, is headed toward carbon capture 
and sequestration one way or another.
    Senator Salazar. At some point I think it would be 
important, Senator Bingaman, for us to have a hearing that just 
focused in on what's happening with carbon sequestration. Maybe 
that's something that we can do as a committee.
    I have a question concerning the finance package that 
Senator Bingaman and I and others worked on this last year 
which didn't quite receive enough votes. The energy package 
that the President signed in December was a very good movement 
forward. But I think that one of the legs of that tripod that 
was missing was a finance committee component that would have 
moved forward with production tax credits and all the rest of 
the incentives that we need for the renewable energy economy.
    Just without taking up a political point of view on that 
finance package, is that something that would help us 
ultimately achieve the missions that you have laid out for the 
Department of Energy if we could get that passed through the 
United States Congress?
    Secretary Bodman. I think so. I think we'd be happy to work 
with the Congress on that. As I've said to the chairman earlier 
in the day, I'd be happy to work with you on that question.
    Senator Salazar. Thank you very much, Secretary Bodman.
    Secretary Bodman. Thank you.
    The Chairman. Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman and thank you, 
Secretary. I'm sorry that I was not able to hear most of your 
testimony. We had other committee hearings this morning, but I 
have had a chance to look through the Department of Energy 
budget.
    There are some good things, from my perspective, 
particularly the increases that we saw in funding for the 
applied sciences, the added funding for climate change research 
and for biofuels. I certainly support the proposals for nuclear 
energy development and the efforts to implement the Energy Loan 
Guarantee Program, some good things. The Senator from Colorado 
just mentioned the plus up, if you will in geothermal. That's 
something that as you know we have been pushing on and I am 
pleased to see that you have kind of backed out of zeroing out 
the Office of Geothermal and have proposed the increase.
    I would like you to consider, however, funding some 
additional research and some development money for the 
technology to further the traditional service--surface 
hydrothermal technology. I know the direction that the 
Department is going on. We certainly have a host of different 
projects throughout the State of Alaska that are, I guess you'd 
describe them as just more traditional in nature, that could 
truly benefit from some assistance from the Department.
    So I would hope that we would be able to have some 
discussions as to how we might consider some funding for these 
traditional technology advances. There's some exciting things 
that are happening out there, and we'd like to think that we 
could work with you on that.
    Secretary Bodman. Is this surface? Is this steam at the 
surface of the earth? Is that what it is?
    Senator Murkowski. Correct, as opposed to the hot rocks.
    Secretary Bodman. As opposed to below.
    Senator Murkowski. Below the surface, but not the hot rocks 
technology.
    Secretary Bodman. I see.
    Senator Murkowski. As you know we've got the project up in 
Chena Hot Springs.
    Secretary Bodman. Right.
    Senator Murkowski. That is utilizing the low temperature 
geothermal and we've seen great success there. We think we have 
potential for similar type projects out in Western Alaska, in 
South Central, but a different technology than perhaps you 
would see advancing in, for instance, the State of Colorado.
    Secretary Bodman. Ok.
    Senator Murkowski. I want to ask you about the Renewable 
Energy Deployment Fund. In the energy bill that we just passed 
we included a provision that would create the Renewable Energy 
Deployment Fund to provide for Federal grants to provide up to 
50 percent aid for the construction projects for these 
renewable energy projects in Alaska. Things are tough right now 
in the State.
    As you know, we've always had very high energy costs, but 
with the price of oil as it is we're seeing gas selling for 
seven bucks a gallon at Arctic Village. Home heating fuel is at 
about 4.99 a gallon in the village of Atka. We've had these 
conversations in my office, but electricity, as you know, 
ranges from anywhere from 40 cents a kilowatt hour to 91 cents 
per kilowatt hour in the community of Lime Village.
    If we can figure out how we can get renewable energy 
technologies out in these villages, we can make an absolutely 
incredible difference. So my question to you at this time is 
whether or not the Department is prepared to go to work in 
writing the regs so that we can breathe the life into this 
program that we authorized through the energy bill last year.
    Secretary Bodman. The question of grants from the Federal 
Government is an issue that I can't be very encouraging with 
you on. I'd be happy to talk to you about writing regulations 
and we'll get people to do that, but----
    Senator Murkowski. Right. We need to get that first step in 
place which is the regs written. We appreciate that we've got 
to get the appropriations on for the grants.
    Secretary Bodman. Yes.
    Senator Murkowski. But we need to know that in fact those 
regulations are in place so we can move forward with that step. 
We want to work with you on that.
    Secretary Bodman. We'd be happy to try to do that.
    Senator Murkowski. Then I understand that the issue of 
weatherization has been brought up by some of my other 
colleagues and the cut in the Department's budget on 
weatherization. But it goes back to my comments about what 
we're paying in whether it's Lime Village or Arctic Village or 
Atka. Those energy costs are incredibly high.
    We can continue to try to give them a little bit of 
financial help. Whether it's through the LIHEAP Program or the 
PCE which is our in State funding assistance for high energy 
costs, but if we haven't done anything to help them get to the 
core of the problem which is weatherization. If we can continue 
to do more, I think that allows us a little more bang for the 
buck.
    So I would just like to put in my two cents on that aspect 
of the budget, recognizing that it's not just an Alaska issue. 
It is certainly an issue throughout the entire country as we're 
trying to lower energy costs. Mr. Chairman, my time is out.
    I look forward, Secretary to working with you on a whole 
host of these issues as we move through the budget process. 
Very important. Some good news in the budget, some not so good 
news in the budget so I guess that's the status quo. Thank you, 
Mr. Chairman.
    Secretary Bodman. Thank you.
    The Chairman. Thank you very much.
    Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary for your testimony. I want to pick up where Senator 
Murkowski just left off. I heard you in response to one of our 
colleagues questioning say well this was a challenging year and 
we're always faced with challenging years.
    Secretary Bodman. That's right.
    Senator Menendez. It's a question of priorities and values.
    Secretary Bodman. Right.
    Senator Menendez. I think the budget that is before the 
committee in the Senate on some issues lacks its priorities and 
its values. Weatherization is one. It's not just a cut. It 
eliminates the Federal Weatherization Program.
    I'm not quite sure the time with oil is, you know, 90 
something plus a barrel when we're talking about climate 
change, fears of the economy. Why would we eliminate, 
eliminate, not cut, eliminate the Weatherization Program?
    Secretary Bodman. It's simply as I have stated before. It 
is simply looking at all of the things that are done in the 
Energy Efficiency and Renewable Energy Office, that's where the 
Weatherization Program resides. The returns that we get from 
the Weatherization Program do not compare with the returns that 
we get from building technologies or efforts on creating new 
kinds of building codes throughout the country as well as solar 
and wind and biofuel type technologies that they are also 
responsible.
    Senator Menendez. I'm glad you said that because first of 
all of those things are prospective. We're trying to deal with 
housing that exists and that obviously we're trying to maximize 
its energy efficiency. Your own Department in the study said 
that for every dollar spent by the Weatherization Program is a 
two dollar and seventy cents of lifetime energy and non-energy 
benefits.
    In your Web site it's listed as cost effective. Your own 
Department describes it as cost effective. Then if I add that 
to what you just said, not only do you seek to eliminate the 
Weatherization Program, but the President's budget also seeks 
to cut the Low Income Home Energy Assistance Program by 22 
percent.
    According to the National Energy Association's Director's 
Association the impact on low income households would be 
severe. You could cut 1.2 million from the assistance. In my 
own home State of New Jersey, 150,000 families would have to 
forego 17 million dollars in home heating assistance.
    We're going to be voting on an economic stimulus plan that 
includes a billion dollars for LIHEAP in order to jump start 
our economy. Another side benefit and very significant side 
benefit and why is that in there? Because studies show that 
LIHEAP is a proven dollar multiplier. Each LIHEAP dollar 
generates more than five dollars of economic activities and 
these funds have an effect quickly.
    So at a time in which and you know we find people in these 
set of circumstances. We eliminate the Weatherization Program. 
We have a 22 percent cut in the LIHEAP Program and finally you 
mentioned that other, more efficient opportunities of 
investment, solar.
    I'm all for solar. As a matter of fact, New Jersey happens 
to be second only to California in pursuit of that, but even 
under the solar aspect, the President I thought had recognized 
the importance of solar when he announced the establishment of 
The Solar American Initiative. Yet the President's 2009 budget 
proposal cuts 12 million dollars in funding for solar research 
programs at DOE. I have been informed by some sources that the 
cut is actually 21 million dollars because the Administration 
looks to siphon off nine million from the solar R and D program 
and use it at its National Renewable Energy Laboratory. So what 
gives?
    Secretary Bodman. First of all, on solar energy I think 
you'll find that the request that we made is greater than the 
request we made a year ago. What we have in the renewable 
energy situation is that Congress was very generous with adding 
additional funds and so there was more money appropriated last 
year than we asked for. So we are asking for, not all of that 
back, but some of it. So that and I don't know where you would 
get the information that you got on the additional whatever you 
said.
    Senator Menendez. The nine million to ENREL. That is 
irrelevant.
    Secretary Bodman. That's where solar energy is done.
    Senator Menendez. Is that going to be done to support solar 
programs or do you find----
    Secretary Bodman. I don't know. Senator, I don't. I did 
what----
    Senator Menendez. Could you get back to me?
    Secretary Bodman. I would be happy to get back to you.
    [The information referred to follows:]

    The Administration continues to recognize the importance of solar 
energy, consistent with the goals of the President's Solar America 
Initiative (SAI). The $12 million reduction in the FY 2009 request 
compared to the FY 2008 appropriation is based on the following 
factors:

   The $10 million decrease in concentrating solar power 
        research and development reflectsa down-selection of industry 
        projects in trough manufacturing and thermal 
        storagetechnologies, allowing only the most promising contracts 
        representing the best use of thetaxpayer dollar to move into 
        the second phase of funding in FY 2009.
   The remaining $2 million decrease in the Solar Heating and 
        Cooling Systems is the resultof a transfer of this activity 
        from the Solar Program to the Buildings Program. Under 
        theBuildings Program, funding for this activity is actually 
        increasing to $3.7 million.
   The actual funding decrease in the Solar Program FY 2009 
        request is only $12 million.The $9 million that was referenced 
        as part of the $21 million was not funding for solarR&D, but 
        rather for solar capital equipment purchases at NREL to 
        complete the build-outof equipment for the Science and 
        Technology Facility, which opened in July 2006. TheNational 
        Research Council and the U.S. solar power industry identified 
        the facility as acritical need for the nation, particularly to 
        achieve the goals of the SAI.

    Senator Menendez. Because I hear it's for new copy 
machines. So if it's for new copy machines and the bottom line 
is and you're asking for less than the Congress obviously had a 
reason why it plused up solar because it believes it is an 
important renewable energy source. You chose to not to seek 
that again even though the Congress had a clear direction last 
year.
    So in my mind you take that. You say that's where we want 
to go to renewable sources. That's where we get the better bang 
for our buck, yet you cut LIHEAP so significantly after you 
eliminate weatherization. So in my mind you leave people in the 
cold, those who are least capable of being able to be left out 
in the cold. I think you're wrong for----
    Secretary Bodman. LIHEAP is not my budget, sir. LIHEAP is 
in the Health and Human Services Department. It is not in the 
Energy Department.
    Senator Menendez. I'm putting it together because of all 
the facts at the same time.
    Secretary Bodman. I understand that, but I'm just pointing 
that out. I don't have any influence over or knowledge of 
LIHEAP.
    Senator Menendez. Thank you, Mr. Chair.
    The Chairman. Thank you.
    Senator Smith.
    Senator Smith. Thank you, Mr. Chairman. Secretary Bodman, 
welcome.
    Secretary Bodman. Thank you.
    Senator Smith. It's good to see you.
    Secretary Bodman. It's nice to see you as well.
    Senator Smith. It's my understanding that the reference in 
the budget documents to the proposal to have the Bonneville 
Power Administration use net secondary revenues in excess of 
500 million dollars to repay its Treasury debt was mistakenly 
left in the budget. Is that correct?
    Secretary Bodman. That is correct.
    Senator Smith. Ok. I apologize if you already answered 
that.
    Secretary Bodman. No, I didn't answer it. I'm happy to.
    Senator Smith. We don't have to have that fight again. So I 
thank you, sir.
    BPA, I'm told, is still on track to be able to sign new 
long-term contracts with all its customers, including investor-
owned utilities that receive benefits under the Residential 
Exchange Program. I'm told this is to be done before the end of 
the year. Is that your understanding?
    Secretary Bodman. I don't know, sir. I'd be happy to 
respond for the record with you personally, but I don't know.
    [The information referred to follows:]

    Bonneville's Regional Dialogue policy, which grew out of 
discussions with the region's utilities and other stakeholders over the 
past five years, defines Bonneville's electrical power supply role in 
the Pacific Northwest after 2011, when its current power sales 
contracts expire. The policy will be mplemented through new, long term 
contracts that will give BPA's regional customers the certainty they 
need about their responsibilities for meeting load growth beyond 2011. 
Although it is on an ambitious schedule, Bonneville is on track to meet 
its goal of signed contracts by year end and is planning to conduct the 
formal rate processes and offer the actual contracts as part of that 
effort.
    BPA also expects to offer interim payments to Northwest public and 
investor-owned utilities for FY 2008 while continuing to work with the 
region to reestablish a long-term Residential Exchange Program.

    Senator Smith. Senator Craig assures me that is correct.
    Secretary Bodman. Ok.
    Senator Smith. Mr. Secretary, I was one of the Senate 
sponsors of provisions in the Energy Independence and Security 
Act of the last year that directs the Department of Energy to 
establish at least one ocean energy research center at an 
institute of higher learning. Can you tell me the progress the 
Department's making on this directive? Where are we? Where will 
it be located?
    Secretary Bodman. First of all I don't have an answer on 
that. I can tell you that this is with respect to tidal energy. 
Is that right? That's the question?
    Senator Smith. Yes, basically it is about tidal and ocean 
renewable energy.
    Secretary Bodman. In addition, I think last year the 
Congress was generous and gave us ten million dollars which we 
got whenever the continuing resolution was finally enacted. We 
have then added three million dollars to that in the request 
this year. That's the budget that's before you.
    I am hopeful that the results of that will be the 
evaluation of all the different programs. It may well lead to 
the establishment of a university center. I just don't know 
where and when, but that is work that is underway at this time.
    Senator Smith. If I'm wrong let me know, but I understand 
the budget does cut the appropriated amount or the requested 
amount from 9.9 million to 3 million.
    Secretary Bodman. That's correct. No, that's all true.
    Senator Smith. Ok.
    Secretary Bodman. But we haven't spent the 9.9 is my point.
    Senator Smith. Ok. Alright. I got it.
    Secretary Bodman. So that the 3 and the 10 are going to add 
up to 13 million dollars that we'll spend over the next 18 
months working on this matter.
    Senator Smith. What do you see in terms of tidal energy? Do 
you like it? Does it have some prospect? Can it be 
commercialized?
    Secretary Bodman. I think it has some commercial aspects, 
sure. I know less about it frankly.
    Senator Smith. Who are the opponents?
    Secretary Bodman. I don't think anybody is an opponent. I 
think the question gets to be how serious are we about it? Is 
it--will the oceans, which are pretty hospitable places, or 
pretty inhospitable places for human beings to function. Will 
the oceans accommodate this kind of program? But I don't know 
of anybody or any organization that's against it of which I'm 
aware.
    Senator Smith. I've seen these devices, specifically at 
Oregon State University. I mean they've actually quite simple 
mechanisms that simply bob up and down and produce unending 
amounts of energy that emit no CO22. It 
just seems to me to be a renewable source of energy that we 
ought to be putting the accelerator to. If we're going to meet 
the energy demands of the future, we're going to have to find 
some new sources. If all the old coal burning facilities are 
off limits, I just think there needs to be a real focus on 
ocean energy.
    Secretary Bodman. I would generally agree with you, sir.
    Senator Smith. Oregon is a State where about half the land 
is owned by the Federal Government. Now the developers of 
renewable energy, particularly wind and biomass, have ongoing 
frustration with the actions of the Forest Service. The Forest 
Service has been very slow to develop policies to provide the 
materials off forest lands that could supply biomass generation 
and reduce fire hazards on those lands.
    I know this isn't your Department, but it does effect your 
Department.
    Secretary Bodman. Sure.
    Senator Smith. Now that the Forest Service seems poised to 
enact regulations that are going to discourage the development 
of wind facilities on Federal lands, can the Department of 
Energy work with the Forest Service to ensure that our national 
goals on the development of renewable energy can be met in an 
environmentally sound manner?
    Secretary Bodman. Sure.
    Senator Smith. That's the answer. I mean when it comes to 
siting energy sources, it's always not in my backyard and I 
understand that. But if we're serious about wind and the 
Federal land, which is half of Oregon, is taken off the map, 
then that is a problem. Maybe the Forest Service can work with 
your Department to get some of the biomass materials to clean 
up our forests and turn on some of these other types of 
facilities that provide a natural renewable source of energy.
    Secretary Bodman. We'd be happy to do that.
    Senator Smith. Thank you very much.
    Secretary Bodman. Thank you, sir.
    The Chairman. Senator Sanders.
    Senator Sanders. Thank you very much, Mr. Chairman. Mr. 
Secretary, thanks very much for being with us. I apologize for 
not being here earlier. I couldn't be in three places at the 
same time.
    I'm not going to say a whole lot about the budget or the 
elimination of the weatherization program. I'm a member of the 
budget committee. I happen to think that the overall budget is 
an absurd document that's not going to go anyplace.
    Giving tax breaks to billionaires and cutting back on the 
needs of low and moderate income people is beyond my 
comprehension. So I'm not going to talk about it a whole lot 
other than to say it's going to be completely rewritten. In 
Vermont and cold weather states is going to be, I hope, 
increased and certainly not eliminated.
    I wanted to ask you a question though. As you know in the 
energy bill that was recently passed, Senator Menendez and I 
and the chairman and many others worked on an Environmental 
Block Grant Program which authorizes two billion dollars a year 
to go to cities and towns and states in order to move us 
forward on energy efficiency and sustainable energy.
    Secretary Bodman. Right.
    Senator Sanders. Senator Menendez and I had written to you 
requesting strong, aggressive action on developing rules so 
that when that money is appropriated we can get that money out 
as quickly as possible. We have not yet gotten a response from 
your office. I would like very much the opportunity of perhaps 
sitting down with you and maybe lighting a fire on you right 
now to move forward on these rules. Is that ok?
    Secretary Bodman. I'd be happy to meet with you, sir.
    Senator Sanders. Ok. So the goal here is to have rules for 
the Environmental Block Grant Program so that when money gets 
appropriated we can be off and running. Is that--that will be 
the goal of the meeting. Is that all right?
    Secretary Bodman. That's--I understand what your goal is.
    Senator Sanders. Can I look forward to your cooperation of 
writing the rules that the U.S. Congress past and present have 
signed?
    Secretary Bodman. I don't have an answer to you, sir. I 
would be happy to meet with you. I would be happy to talk with 
you about that subject, but as to what position I will or won't 
take on it, I cannot respond.
    Senator Sanders. I look forward to meeting with you, but I 
hope that your agency will enforce the law of the land. I trust 
that it will.
    Secretary Bodman. We will certainly enforce the law of the 
land.
    Senator Sanders. That's legislation that's passed that 
needs rules.
    Secretary Bodman. But it has not been appropriated.
    Senator Sanders. That's right. It has not been appropriated 
and we want to make sure that the ground framework is there 
when it is.
    I wanted to ask you, I understand this issue came up 
earlier and I apologize for not having been here. As you know 
some of us think that passing tax credits for wind and solar 
are enormously important, not only to deal with global warming, 
but to create a whole lot of jobs, stimulate. How do you feel 
about that?
    Secretary Bodman. As I said before I'm happy to work with 
the chairman and other members of your committee if there is 
desire of multiple members toward that end. So----
    Senator Sanders. I'm sure that there is and we would like. 
You know we had, was it 57 votes last year? I think we're 
trying to get the 60 votes to do that.
    I wanted to ask you another question.
    Senator Domenici. What was that?
    Senator Sanders. That was for the tax credits for wind and 
solar.
    Senator Domenici. That's right.
    Senator Sanders. I wanted to ask you. I happen to think and 
tell me what you think that there is enormous potential for 
solar-thermal plants. My understanding is that in a couple of 
years specific gas and electric is going to be breaking ground 
in the Mohave Desert for a plant which would provide over 500 
megawatts of electricity. I am told that there is potential for 
large numbers of these plants which could provide up to 30 
percent of the electricity in the United States at a very, very 
cost effective rate. What do you think about that?
    Secretary Bodman. I am told by venture capitalists that 
what you say is true.
    Senator Sanders. That they're prepared to invest.
    Secretary Bodman. They are invested.
    Senator Sanders. They are investing?
    Secretary Bodman. Yes.
    Senator Sanders. But, I am told by utility people that the 
potential in the southwest in this country, California, Nevada 
and elsewhere is just huge. It's just a very good area for sun. 
So do you see potential for solar-thermal?
    Secretary Bodman. I see potential for solar-thermal. Sure.
    Senator Sanders. Ok. Mr. Chairman, thank you.
    The Chairman. Thank you very much. Now we have some 
questions on a second round. I'm informed Senator Domenici has 
some questions, go ahead.
    Senator Domenici. Are you running--are we keeping you over 
time?
    Secretary Bodman. No, no. That's alright. Whatever.
    Senator Domenici. Look, I lodged an informal complaint with 
the chairman about how he's treating me on my second round.
    [Laughter.]
    Senator Domenici. He has all these guys sneaking in, you 
know their staff tells them well you don't have to go right now 
and you won't waste any time like this fellow and this fellow.
    [Laughter.]
    Senator Domenici. I'm sitting here this whole time waiting 
for a second turn and I want to establish a rule that if they 
don't come for the whole hour and a half that they ought not 
get called on first. Those who've been here the hour and a half 
should get the second round. Mr. Chairman, I wanted to tell you 
I asked this guy, Smith and he said if you'd just suggested it, 
he'd have been glad to accept that as a working rule.
    [Laughter.]
    Senator Domenici. Then I would have been finished instead 
of having to stay around to listen to these guys who came 2 
hours late.
    [Laughter.]
    Senator Domenici. As much as I like this Senator, this new 
Senator.
    The Chairman. They all say they would have been glad to 
defer to you after the fact.
    [Laughter.]
    Senator Domenici. I know they defer to me for a lot of 
things, but it turns out that in this case I had a couple of 
questions and I'm going to just try real quick to ask them.
    First there's a New Mexico problem that I want to put on 
the record and get you to understand it. In your clean up 
budget it appears that there's insufficient money to meet the 
agreed upon milestone that the Department negotiated with the 
states including New Mexico, Los Alamos. Can you tell me 
whether or not you believe you can have the 164 million in this 
budget request? Will it provide sufficient funding to meet the 
negotiated clean up milestones for 2009 and beyond?
    Secretary Bodman. We will miss a number of milestones.
    Senator Domenici. Alright.
    Secretary Bodman. We will have some layoffs, two.
    Senator Domenici. Alright.
    Secretary Bodman. It's as a general matter. I mean applied 
to all the States as to the specific. Specifically, Los Alamos, 
I simply don't know, but I----
    Senator Domenici. Alright. Can you find out and submit it 
for the record?
    Secretary Bodman. Sure.
    [The information referred to follows:]

    There can be a number of reasons why compliance obligations are in 
jeopardy, including unanticipated or especially complex technical 
challenges. In addition, compliance agreements negotiated several years 
ago may in some cases contain near-term milestones that do not entirely 
reflect the highest environmental priorities. Consequently, some 
milestones may be at risk not simply because of a shortage of funding, 
but because theDepartment has decided to shift available funding to 
higher priority work that will contribute more to the protection of 
human health and environment. At Los Alamos, we currently anticipate 
that three milestones are at risk in Fiscal Year 2009 based on complex-
wide priorities, however, Los Alamos is currently talking with its 
regulators to mutually resolve these potential issues.

    Senator Domenici. Alright. You're going to have to explain 
them, the milestone misses. You know in our State they have a 
kind of a habitual cure to these problems by fining us you 
know. They have----
    Secretary Bodman. No, no. I know.
    Senator Domenici. Somebody up there fines us all the time. 
I hope you'll be tough when they fine you a million dollars for 
little things. We have pretty tight budgets for them to be 
sticking you that way. So I hope you're tough with them. I've 
already told the Governor. Kind of unreasonable, some of the 
fines. But anyway the milestones will be something you'll have 
to work hard on.
    Secretary Bodman. That's right.
    Senator Domenici. Now WIPP down there in Carlsbad. You know 
WIPP has a great history.
    Secretary Bodman. Yes, sir.
    Senator Domenici. It's the committee--community has put 
together and performed as a support group for WIPP. They are 
recognized in the country as probably the best informed and 
prepared and active group that produces a support group that 
ends up getting the right facts to the right citizens. It turns 
out that reality is faced instead of what people throw around 
as things that are just untrue.
    So we've got an underground storage facility, the only one 
in the world and it's in sand that will never move. You know 
the facts. It's something like 240 million years without 
moving. So it's probably the best place we could ever pick.
    Now this year we've got a 23 million dollar cut on this 
project to these people that I just described in terms of what 
they do. I think they're going to be hard pushed and hard 
pressed and I don't know exactly why that cut is there. If you 
don't know, we'll just ask you to put it in the record and just 
note that I----
    Secretary Bodman. I'd be happy to get to respond for the 
record, sir. I don't know about that.
    [The information referred to follows:]

    The Department must achieve a balance that allows the Office of 
Environmental Management (EM) to continue to achieve risk reduction and 
pursue its cleanup goals.The Department's priorities for risk reduction 
and regulatory activities are stabilizing radioactive tank waste in 
preparation for treatment, and storing and stabilizing, and 
safeguarding nuclear materials and spent nuclear fuel, followed by 
disposing of transuranic waste.
    Funding for WIPP will continue to support receipt of up to 21 
contact-handled and 5 remote-handled transuranic waste shipments per 
week. The $23 M decrease reflects adeferral of some groundwater well 
drilling and plugging activities, and deferral of site equipment 
replacements and maintenance/reliability projects. While these 
activities are important, they are not needed for immediate risk 
reduction.
    Let me assure you that disposal of contact- and remote-handled 
transuranic waste remains a high priority within the Department, and we 
appreciate the support we receive from the WIPP community and the 
elected leadership from New Mexico.

    Senator Domenici. I want to know it and want you to know 
that I object and think that it isn't right. The problem is 
the, way we do the budgeting around here. If I'm deemed right 
by the appropriators I got to take it out of something else.
    Secretary Bodman. No, no. I understand.
    Senator Domenici. Because nobody adds to the budget. They 
just say yes, yes, you won. Now you find the money.
    This year I'm going to try to convince them that things we 
add they've got to increase the budget by that amount. I don't 
know that I'll succeed. But I used to do some increases when I 
was chairman, when I could get a feel that you couldn't expect 
them to do that much cutting. But we haven't been doing that of 
late.
    Now I'm going to jump over to something that's been 
considered a little bit already and that's Future Gen. I want 
to tell you about Future Gen and restructuring that. DOE has 
gone for a single R and D facility to a larger number of cost 
share demonstrations. That's one thing.
    I'm not questioning the propriety. I am suggesting that 
after waiting so long and working hard and getting a lot of 
promotional pluses, the concern that's generated when it's 
canceled is truly powerful. All kinds of things begin to worry 
people about the Department and have they given up on this kind 
of ultimate accomplishments of this project. Are they really 
important?
    A large portion of the fiscal year 2009 clean coal funding 
is derived from appropriated funds previously funded. 149 
million of the 156 requested for restructuring Future Gen is 
not new money as you--well if you don't know I can tell you. 
That money is available because projects have faltered. Future 
Gen is another and more troubling example of this trend.
    People wonder when are we going to get something done. So 
am I. So I want you to know that I really think there's a job 
of telling the people. Not you, but you've got a lot of people 
working for you, that what you're doing is going to accomplish 
the end you intended better than Future Gen when you stopped 
it. Is that not correct?
    Secretary Bodman. That's correct.
    Senator Domenici. You think you're going to get better 
results?
    Secretary Bodman. We certainly intend to get better 
results.
    Senator Domenici. You're not going to be so far off the 
mark?
    Secretary Bodman. That's correct.
    Senator Domenici. What we really worry about when you have 
a big project is that the Departments never come in anywhere 
near the mark. This one was coming in 80 percent overruns. 
That's the kind of thing you hope you don't get when you piece 
it out.
    Secretary Bodman. What I was worried about was that this 
might become a sort of super collider type problem.
    Senator Domenici. Right.
    Secretary Bodman. You know, that it might escalate so high 
in cost that Congress just would turn its back on it 3 years 
from now. That's my concern.
    Senator Domenici. Ok. The renewable biomass. I'm going to 
jump to that fuel standard. I'm pleased that the biomass and 
the bio-refinery R and D is increased by 13 percent. Clearly 
this is important.
    This is the follow on to ethanol and then the next one and 
we have this and we need it. So will the increased program 
allow the Department to expand work on alternative feedstocks 
available in different regions of the Nation? I'm particularly 
interested in knowing if greater research will be allocated to 
develop algae based biofuels. I've read about it recently. I'm 
sure you could not have missed your eye in your training.
    Secretary Bodman. Yes.
    Senator Domenici. It's important stuff. It's got great, 
great potential. Would that be part of this research?
    Secretary Bodman. I don't know, but I'd be happy to get you 
the answer.
    [The information referred to follows:]

    DOE is committed to targeting its R&D as effectively as possible to 
develop cost effective, clean renewable fuels. To that end, we are 
investigating the potential of a wide range of feedstocks, including 
algae, to synthesize alternatives to petroleum-based fuels. The 
Department is preparing a report for Congress, as required under the 
Energy Independence and Security Act of 2007, to assess the use of 
algae as a renewable (biofuels) feedstock. In preparing the report, the 
Department has discussed ongoing algae research with other Federal 
Agencies, including the Environmental Protection Agency, and the 
Departments of Defense and Agriculture.
    The objective would be to demonstrate that algae can be grown for 
their lipid (and therefore hydrocarbon) content and used in diesel 
engines. Oilseed crops such assoybean are similar to algae in that they 
are also lipid producers that can be used in diesel fuel applications. 
Currently, biodiesel produced from oilseed crops such as soybeans is 
commercially produced on arable land, while algae is still in the 
research and development stage. Because of their potential high yields, 
small land requirements and their ability to utilize CO22 
(in co-production with coal-fired plants, for example), algaemay 
warrant further investigation even though they will not contribute to 
our fuel mix in the short-term.

    Senator Domenici. It's important and I suggest to you that 
we should. Now I want to tell you another one that has occurred 
in appropriations that--I'm not telling you how to do your work 
but I would really be upset if I were you, at the Interior 
Appropriation bill. Not your jurisdiction you would say, but 
they chose in that bill to put a 1-year moratorium on oil shale 
rule writing.
    Now the oil shale, you know there are people that just 
don't want us to produce oil in this country. When we are being 
sucked dry by the money we have to pay to other countries to 
buy their oil. In fact we don't know how badly we are being 
hurt because there's no economic consequences model for how 
many times for how many years you can pay this much money and 
not be hurt.
    It looks to me like we're getting poorer when we pay that 
many billions out for oil. That's at least one fact you can 
write down. We surely are not getting richer, right?
    Secretary Bodman. That is correct.
    Senator Domenici. It looks to me like if you're not, you're 
getting poorer and I begin to think we're going to begin seeing 
the poor mess in America visibly if this goes on for 10 or 12 
years at 80 or 90 dollars a barrel. I really do. That's why oil 
shale ought to be looked at.
    It really does upset me that at the Appropriations 
Committee that nobody who understands is working on Interior, 
and puts a moratorium on oil shale when we worked very hard on 
the bill that Senator Bingaman and I put together. It was the 
first one in 17 years. It provided to move ahead, not quickly, 
but very slowly, but dedicated, with oil shale. Here's one 
major American company ready to spend four billion dollars on 
it set to experiment.
    Secretary Bodman. This is Shell.
    Senator Domenici. Shell.
    Secretary Bodman. Yes.
    Senator Domenici. Big project. How do you think their board 
feels? They get a report that they're in for 500 million into 
the project or whatever and along comes a subcommittee and puts 
a moratorium on regulation. Nobody knows what it means.
    Secretary Bodman. I didn't know it existed until I walked 
in here, so.
    Senator Domenici. You didn't, so that's another one. 
Somebody should know that from your Department and give it to 
you. You should probably be telling somebody that this is truly 
your business. You know it is funded in that committee but it 
is your business. If ever we're going to get out of this we've 
got to act like Canada at least with reference to getting 
production that's totally appropriate within the law, if that's 
what we had.
    Secretary Bodman. Right.
    Senator Domenici. I'm just dumbfounded that we would take a 
company that's willing to spend four billion dollars to show us 
how they can do that and slow them up instead of doing whatever 
we can to give them an opportunity to proceed? Do you agree 
with me?
    Secretary Bodman. Yes.
    Senator Domenici. Isn't it true that there is a chance that 
shale will work?
    Secretary Bodman. Yes.
    Senator Domenici. A version of shale and its inset too or 
something like that.
    Secretary Bodman. That's why Shell is spending half a 
billion dollars on it.
    Senator Domenici. Because they too----
    Secretary Bodman. They think that it's got a good shot. You 
know, it's far from clear that it's going to work, but it's----
    Senator Domenici. They've got four billion committed.
    Secretary Bodman. Oh, I understand.
    Senator Domenici. That's a pretty big commitment.
    Secretary Bodman. Yes, it is.
    Senator Domenici. You know we can throw it around up here, 
but you don't have very many big companies doing that. My last 
observation and I'm sure my friend on my left knows a lot about 
it and he's probably going to add in, chime in. But I want to 
talk a minute for the record and to you about Mid Atlantic.
    Senator Craig. Mid America.
    Senator Domenici. Mid America, which we're in the early 
stages of developing a plan for a nuclear power plant. 
Indicated to the world that they the board had pulled back and 
said they weren't going to proceed. Some people thought that--
--
    Secretary Bodman. That who had? That the board had?
    Senator Domenici. The Board of Directors said we're not 
going on with the project.
    Secretary Bodman. Right. Ok.
    Senator Domenici. You should know that. That now I'm 
telling you if you don't.
    Secretary Bodman. I didn't know.
    Senator Domenici. It's not one that was moving ahead 
rapidly. They were just starting. But I tell you what we get as 
the principle reason. They're looking around to see how they're 
going to get the material, the people and engineering services 
and the like that are needed to build and design a nuclear 
power plant.
    They find there is total instability in that part of the 
market. You can't get bids. You can't get timely commitments. 
You can't find the workers. They're not going to expect to 
build within any limits that are reasonable so that they're not 
going to get in and play ball in that field. They're not poor. 
They wouldn't need your loan guarantee I wouldn't think.
    You and I and Senator Bingaman and Senator Craig and others 
have been saying this is a mess and we don't know that there's 
going to be enough workers, enough commitments to build these 
plants, right?
    Secretary Bodman. Right. That's right.
    Senator Domenici. Now we have one company that very early 
on says we can get out of this game. Now we still have some 
that are steeped in it and they're going ahead.
    Secretary Bodman. That's right.
    Senator Domenici. From what we know there may be jitters, 
but that's because this is very, very long term, organized 
chaos to get one of these bills. Do you see us overcoming this 
problem and getting some of these major projects built?
    Secretary Bodman. I do. That's what we're about. That's, 
you know, whether it's the nuclear power 2010 where, on all 
fronts, there is a big push on getting all this done. I believe 
it. I don't know how much more I can say other than that.
    Senator Domenici. Yes, sir.
    Secretary Bodman. That we've asked for a big increase in 
the GNEP funding which will spread this internationally. So I'm 
a believer in it.
    Senator Domenici. I would say a number of people including 
these two Senators, the chairman and I have gone down to a 
little town, Eunice. That where it is? In New Mexico, near 
Hobbs, where they're building a two billion dollar modern 
uranium enrichment plant.
    Secretary Bodman. This is the LES?
    Senator Domenici. LES.
    Secretary Bodman. LES, good.
    Senator Domenici. Coming up out of the desert is this 
fantastic project. They are--be interesting for you at some 
point to sit down in your office and talk to you about how they 
go about finding the workers they need, the supplies they need.
    Secretary Bodman. That's a good idea.
    Senator Domenici. I think you'd learn from them.
    Secretary Bodman. I'm sure I would.
    Senator Domenici. It's very, very interesting. There--
because they have committed to get it done. They spare nothing. 
They fly people in from far places and they put them down there 
and this is where you're going to live because we need you on 
this job for 6 years.
    People are building houses and that's what's changing 
lifestyles. Things are happening. It's begun to think there 
might be a second one that might come to that area too. Could 
be good, that wouldn't be bad.
    I thank you. Senator Bingaman, thank you.
    The Chairman. Thank you very much. Senator Craig, how long 
did you want to go on here? I was wondering if we should take a 
short break and then come back for your questions.
    Senator Craig. A couple of minutes at the most, probably, a 
couple of questions.
    The Chairman. Ok. Why don't you go ahead and do your 
questions then.
    Senator Craig. Mr. Secretary let me pick up where Senator 
Domenici has left off because in Idaho last week Mid America 
announced that it was terminating its effort to site and build 
a new nuclear reactor. They'd acquired the land. They'd 
acquired the water and they entered this looking at the future, 
looking at the stability of supply of fuel, of looking at the 
efficiency of operation, after build and all of those kinds of 
things.
    As you know Mid America is 80 percent owned by Berkshire 
Hathaway so they've got very deep pockets.
    Secretary Bodman. Yes.
    Senator Craig. They've just acquired Pacific Corp which has 
owned Utah Power and Light, Pacific Power and Light. So they 
have a footprint in our State and across the Midwest. So they 
were attempting to site a reactor that wouldn't just be a 
merchant reactor, but a supplier to their system.
    They certainly did their due diligence. Their CEO came into 
to see me yesterday. I asked simply out of the curiosity of our 
involvement in this issue what went wrong there. Why did they 
pull back?
    He gave me a long litany of very thoughtful reasons why 
they did. Senator Domenici has mentioned some of them. The 
market of talent, the market of supply, the market of 
engineering is saturated at this moment. They really did not 
believe that they could bring it to production on a timely 
basis with any guarantees for a much longer period of time than 
they thought when they entered it.
    I will not speak for the environmental community but the 
environmental community was kind of standing back. As we know 
those who once were anti-nuclear are now at least, neutral and 
are recognizing the need to bring base load on line. They could 
not get a supplier to guarantee anything to speak of in any 
timeline that fit them or fit their needs. The costs were 
constantly escalating at a very, very rapid rate. So they 
withdrew.
    They're going to hold the land. They're going to hold the 
water. Sometime in the future they may get there, but it was an 
interesting reality check for me, someone who's been deeply 
involved with these two Senators in crafting the policies 
within EPACT 2005 to get us to where we thought we were going 
to get.
    Then we passed the America Competes Act. I offered an 
amendment that Senator Bingaman and Senator Domenici supported 
that allowed provisions for nuclear science at our 
universities. That's all part of what Mid America ran into, a 
lack of talent and a lack of supply and a lack of capability.
    We understand that. That's why we put that language in 
there and I'm looking at it now. I'm looking at this budget 
hoping we would find some money in 2009 for it. It isn't there. 
It appears that those areas that the President liked he had a 
little funding for or you put some money in. But in the area of 
nuclear science and new technologies within that area, it 
appears to be dry.
    I'm only saying that in passing. But that's a reality check 
for our country because we're now, as you know better than 
anybody else, Mr. Secretary. We're not competing with ourselves 
to build nuclear facilities. We're competing with the world 
market.
    Secretary Bodman. No, no. That's right.
    Senator Craig. Our companies are in the world market, but 
Mr. Chairman, the CEO of Mid America also said something else 
that I think was very, very significant. He said there are 
about three models or about three designs of white water 
reactors currently being built in the market. He said we can't 
understand why it takes the NRC 5 to 6 years to license. He 
said why don't we license these models and have them ready on 
the shelf for utilities who want to come along and pick one off 
the shelf and build it?
    Of course taking to diligence and siting and all that's 
necessary to do that outside the actual model itself because 
that 5-year window is phenomenally costly, we all know that. I 
thought, hmm, interesting suggestion that we ought to be 
looking at. He said when we deal with FERC in siting anything 
else major, we don't have to wait 5 years.
    I suggested that that might be a cautious legacy of the 
past. I don't know that to be the case, but I think it probably 
is. Foot dragging a decade ago on nuclear was the name of the 
game. If your foot drug long enough you cost them their 
business. They never came.
    I don't know those things today because I don't think that 
mentality exists. But the legacy of the past just might in some 
of our bureaucratic processes around here. Anyway----
    Secretary Bodman. Could I just respond?
    Senator Craig. Please do. I'm at the end of my 
dissertation. It's a bit frustrating.
    Secretary Bodman. Yes, yes, I'm sure.
    Senator Craig. In a world that you and I and the chairman 
and others are attempting to advance.
    Secretary Bodman. Right.
    Senator Craig. Yet we see these holes in it at which major 
developments might be falling through.
    Secretary Bodman. Yes. I don't have a quick answer for you, 
but I can tell you that the NRC is trying to license a unit 
that is going to be replicable and therefore it will be able to 
be certified. If the utilities buy that unit, the problem has 
been in the past, every utility has wanted their own thing. 
We've got 105 nuclear reactors in this country and they're all 
different.
    Senator Craig. I know.
    Secretary Bodman. It's just absurd. As opposed to having 
one, why it takes them 5 years, I don't pretend to know. I mean 
that's not my----
    Senator Craig. Question we'll all be asking.
    Secretary Bodman. It's a fair question I think.
    Senator Craig. Yes.
    Secretary Bodman. But I do believe that they're going to 
speed it up. That is to say the second one will be a lot faster 
than the first one assuming that they are the same and that's 
the issue.
    Senator Craig. Yes. Mr. Chairman, I'll stop here because 
you're obviously thinking about the time limit. We've got to 
get out of here.
    I think that is the question and the thing that is 
important it probably needs to be more than one because if 
you're designing or licensing only one you're probably showing 
preference toward a certain company.
    Secretary Bodman. No, you'd need more than one.
    Senator Craig. Yes, you do.
    Secretary Bodman. Each time that they're going to need 
three, probably three, if not four, but the idea is that they 
would be the same.
    Senator Craig. Oh, no. I hear you each one would be the 
same. I thought it was important and I thought I might suggest 
to you that you had a similar conversation like I had. It was 
most enlightening.
    Secretary Bodman. Yes.
    Senator Craig. Because these folks did their homework. They 
spent a lot of time and a lot of money trying to find a way 
into this market and finally backed away. Thank you.
    Secretary Bodman. Thank you, sir.
    The Chairman. Mr. Secretary, thank you very much. You've 
been very generous with your time and we appreciate it.
    Secretary Bodman. Thank you very much, Mr. Chairman.
    [Whereupon, at 12:12 p.m. the hearing was adjourned.]

                                ------                                

    [The following statement was received for the record.]

                                      Department of Energy,
                                  Washington, DC, February 4, 2008.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, United States 
        Senate, Washington, DC.
    Dear Mr. Chairman: Thank you for your December 20, 2007, letter 
regarding the fiscal year (FY) 2008 appropriations for the Department 
of Energy's (DOE) research and development missions. I am concerned 
about the funding levels provided to support DOE'S scientific research 
missions, and I am particularly concerned about the levels provided to 
the Office of Science. The cuts made to the Administration's FY 2007 
and FY 2008 funding requests will have real consequences at many of our 
National Laboratories; some of those consequences are outlined in the 
points below. In addition, the diminished opportunity for research 
funding will be felt at more than 300 public and private research 
universities supported by the Office of Science across the country.
    As you are aware, in 2006 President Bush proposed the American 
Competitiveness Initiative and in 2007 the Congress passed and the 
President signed into law the America COMPETES Act. The goal of both is 
to double funding for basic research in the physical sciences over the 
next decade, and both have enjoyed substantial bipartisan support. I 
would like to thank you for your active and effective partnership with 
the Department to help secure our country's scientific future.
    To meet our national objectives for scientific leadership for 
energy, environment, and economic competitiveness, annual 
appropriations for basic research in the physical sciences would have 
to increase roughly an average of seven percent per year, with more 
substantial increases at the fiont-end and more modest increases in the 
later years. Both the House and Senate Appropriations Committees passed 
initial FY 2007 and FY 2008 funding measures that would have provided 
substantial funding increases; however, in both years those critical 
increases did not materialize in the final enacted appropriations.
    Nearly flat appropriations levels mean that we must forego 
important new and upgraded facilities and hold back on promising 
avenues of research; appropriations growth below the rate of inflation 
will mean a reduction in the number of scientists and amount of basic 
research the Department can support. Science is a very competitive and 
dynamic enterprise--lost funding means lost opportunities for 
breakthroughs and discoveries that would give the U.S. a competitive 
advantage in the global economy and perhaps bring us greater energy 
security.
    The current levels of funding will mean scaling back efforts across 
the spectrum of use-inspired basic energy sciences; ceding to Europe 
our global leadership in high energy physics; hindering the 
Department's ability to meet our international commitment to Japan, 
China, South Korea, India, Russia, and the European Union to cooperate 
in a large-scale fusion experiment known as the International 
Thermonuclear Experimental Reactor (ITER); directly eliminating 
hundreds of research jobs at National Laboratories in 2008; and 
reducing research opportunities for the best and brightest at 
universities across this Nation.
    Below is a summary of the direct and immediate effects that we 
expect to see in basic research at the major laboratories.

                                overall
    The Department estimates that about 625 existing scientist, 
student, and technical staff positions will be negatively impacted in 
various labs and disciplines across the country. Approximately 100 
reductions are planned to take place in FY 2008 with the remaining 525 
as a result of the reduction to the FY 2008 enacted appropriation. 
Layoffs will occur in areas funded by the Basic Energy Sciences, High 
Energy Physics, and Nuclear Physics programs in the Office of Science 
(SC). The total decrease in employment will be less than this, because 
there will be increases in employment in other areas, such as in those 
supported by the Office of Science's Biological and Environmental 
Research and Advanced Scientific Computing Research programs. SC-wide, 
the net impact to overall scientific employment levels under the FY 
2008 appropriation is a reduction of about 224 positions. Please see 
the attached table for an overview of where the layoffs described below 
are projected to take place. The effect is most pronounced in the 
following programs, in which existing researchers will be laid off and 
planned opportunities for new researchers will be terminated:

   Fusion Energy Sciences.--Fusion occurs when forms of the 
        lightest atom, hydrogen, combine to make helium in a very hot 
        (100 million degree centigrade) ionized gas, or plasma. A small 
        amount of matter involved in the reaction is converted to a 
        large amount of energy. When developed, fusion will provide a 
        virtually inexhaustible, safe, environmentally benign, and 
        affordable energy source. In FY 2008:

    --No funding was provided for ITER construction; the U.S. will lose 
            credibility as a partner in large-scale international 
            research projects.
    --The U.S. ITER project has been forced into a survival mode, using 
            existing prior year funds to maintain a minimal core team.

   Basic Energy Sciences.--Fundamental chemical and materials 
        research may lead to methods to split water with sunlight for 
        hydrogen production; technologies for harvesting solar energy 
        with greater power efficiency and lower costs; super-strong 
        lightweight materials to improve efficiency of vehicles; 
        ``smart materials'' that respond dynamically to their 
        environment; and low-cost fuel cells, batteries, 
        supercapacitors, and thermoelectronics. In FY 2008:

    --Approximately 50 existing, permanent PhDs, 30 postdoctoral 
            fellows, 20 students, and 10 operations, support and other 
            personnel will be lost from on-going research programs in 
            basic energy sciences, whereas, at the FY 2008 request 
            level funding in this program would have allowed 
            substantial hiring, including about 400 new permanent PhDs, 
            120 additional postdoctoral fellows, and 240 more students.
    --Of the basic energy sciences facilities not terminated entirely, 
            BES facilities will be operated at only 80 percent of 
            maximum available hours. By comparison, these facilities 
            were able to deliver 95 percent of their maximum available 
            hours in FY 2007.
    --No funding was provided for any new basic energy sciences 
            research initiatives in the use-inspired energy research 
            areas such as advanced materials for solar power, hydrogen 
            storage, carbon sequestration, or electrical energy storage 
            underpinning the scalability of renewable sources of energy 
            such as wind and solar. More than 700 proposals from 
            laboratories and universities across the country, already 
            peer reviewed, have been cancelled.

   High Energy Physics and Nuclear Physics.--The Department 
        coordinates these programs that seek to develop the far-
        reaching physical theories that explain the behavior of matter 
        and the nature of the universe. Deeper understanding of nuclear 
        matter and its interactions will continue to be invaluable to 
        research in energy, nuclear medicine, materials science, and 
        national security. In FY 2008:

    --In High Energy Physics (HEP), cuts will result in the loss of 
            existing support for 340 Engineering, Technical, and 
            Administrative positions, 100 permanent PhDs, 10 
            postdoctoral fellows, and 10 graduate students for a total 
            reduction of 460. Of this total, approximately 100 
            reductions were planned to take place in FY 2008, with the 
            remaining 360 resulting from appropriations at a level 12 
            percent below the President's FY 2008 request.
    --In Nuclear Physics, loss of support across the program will 
            result in reductions of 14 to 20 permanent PhDs and 
            postdoctoral fellows; 10 to 12 students; and, approximately 
            30 operations, support, and other personnel.

    The impacts listed above will likely have the following geographic 
distribution:

   Argonne National Laboratory (ANL), Argonne, Illinois

    --The Intense Pulsed Neutron Source at ANL will be closed 
            immediately and permanently, resulting in approximately 50 
            layoffs.
    --The Building Electrical Services Upgrade project at ANL will be 
            cancelled.

   Brookhaven National Laboratory (BNL), Upton, New York

    --Construction funding for the National Synchrotron Light Source-I1 
            at BNL was cut by 33 percent, which will cause significant 
            project delays and escalate total project cost, possibly 
            exacerbating budget shortfalls in future years.
    --Relativistic Heavy Ion Collider (RHIC) operations at BNL will be 
            reduced from a planned 30 weeks to 19 weeks.
    --Funding for the PHENIX Forward Vertex Detector and the PHENIX 
            Nose Cone Calorimeter at RHIC will be reduced and the 
            schedules will be delayed by one year.

   Fermi National Accelerator Laboratory (FNAL), Batavia, 
        Illinois

    --About 200 layoffs of existing science employees are expected at 
            FNAL. Additionally, the laboratory will be forced to 
            institute a ``rolling furlough'' of two days each month of 
            leave without pay for all remaining FNAL employees.
    --There will be major, indeterminate delays in construction of the 
            NOVA research project at FNAL.
    --The U.S. will lose its leadership role in the global design 
            effort for the next major international HEP project, 
            putting the selection of FNAL as a potential site for the 
            International Linear Collider in jeopardy.

   Lawrence Berkeley National Laboratory (LBNL), Berkeley, 
        California

    --Delivery of the Advanced Light Source User Support Building at 
            LBNL will be delayed by more than one year because funding 
            was reduced by 70 percent below the President's FY 2008 
            Request.
    --Funding for the Gamma Ray Energy Tracking In-Beam Nuclear Array 
            Major Item(s) of Equipment (ME) is reduced in FY 2008, 
            causing increases in project risks and delays in schedule; 
            impacts to project cost are being evaluated.

   Oak Ridge National Laboratory (ORNL), Oak Ridge, Tennessee

    --Basic energy sciences instrument projects for the Spallation 
            Neutron Source at ORNL will be reduced, delaying 
            completions by at least one year.
    --Funding for the joint DOENSF neutron Electric Dipole Moment 
            Experiment MIE is reduced in FY 2008, causing increases in 
            project risks and delays in schedule; impacts to project 
            cost are being evaluated.
    --The U.S. ITER Project Office will be reduced to a minimum level. 
            Up to 40 staff may be reassigned.

   Stanford Linear Accelerator Center (SLAC), Menlo Park, 
        California

    --There will be about 225 layoffs and negotiated early retirements 
            of existing employees at SLAC (100 were planned to take 
            place in FY 2008 and 125 resulting from appropriations made 
            at a level below the President's FY 2008 request).
    --B-factory research operations at SLAC will be reduced by 75 
            percent compared to the 5,720 hours planned in the FY 2008 
            request.
    --Instrument projects for the Linac Coherent Light Source Ultrafast 
            Science at SLAC were reduced 40 percent below FY 2008 
            President's Request, delaying completions by at least one 
            year.

   Thomas Jefferson National Accelerator Facility (TJNAF), 
        Newport News, Virginia

    --Operations of the Continuous Electron Beam Accelerator Facility 
            at TJNAF will be reduced from a planned 34 weeks to 24 
            weeks.

    As described above, most of the Department's basic research 
portfolio will qot receive the funding we believe that it needs in FY 
2008. Nevertheless, I want to thank Congress for its strong support for 
Biological and Environmental Research and Advanced Scientific Computing 
Research at DOE. I look forward to working with Congress to ensure that 
we keep America competitive through strong support for science that 
will provide transformational solutions for our most pressing national 
needs.
            Sincerely,
                                          Samuel W. Bodman,
                                                         Secretary.


                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

                    Questions From Senator Bingaman
                             weatherization
    We hear a lot of talk about energy efficiency being the low hanging 
fruit for climate change mitigation. I have a graph that has been 
passed out to all the members and Secretary Bodman that illustrates the 
importance of programs like weatherization.
    This chart shows a global cost curve for greenhouse gas abatement 
measures beyond ``business as usual''.
    (The McKinsey Quarterly, 2007 Number 1, ``A cost curve for 
greenhouse gas reduction'', Per-Anders Enkvist, Tomas Naucler and 
Jerker Rosander, Exhibit 1).
    The Consulting firm McKinsey & Co., released a report in December 
titled ``Reducing US Greenhouse Gas Emissions: How much at what cost?'' 
This report is based on a Greenhouse Gas Abatement Mapping Initiative 
undertaken by McKinsey in collaboration with leading U.S. companies and 
environmental NGOs.
    McKinsey analyzed resource costs and abatement potential for more 
than 250 opportunities to reduce or prevent GHG emissions. They found 
that almost 40 percent of abatement could be achieved at ``negative'' 
marginal costs--meaning that investing in these options would generate 
positive economic returns over their life cycle. Building insulation is 
the first item on the chart--with a positive return of 150 Euros per 
ton of CO22 abated--lighting systems, air conditioning and 
water heating and standby power (all related to building energy use) 
also have significant positive returns. This analysis shows we can take 
cost effective measures to abate climate change, and that programs like 
weatherization are a part of the solution.
    Your budget materials say that the Department is terminating the 
Weatherization program to focus EERE on its core R&D mission which is 
expected to provide ``greater benefits''. The committee has requested a 
copy of the analysis supporting this statement.
    Question 1. Rather than eliminating the weatherization program, it 
seems to me that the DOE should be expanding and revitalizing the 
program?
    Answer. The program is not completely aligned with DOE's core 
mission. Weatherization Assistance is an important goal, but is an 
anomaly because it addresses social welfare goals in addition to energy 
efficiency improvement. Prudent portfolio management requires DOE to 
focus available resources on its core areas of expertise and mission 
consistent with the DOE Strategic Plan.
    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.\1\ 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.\2\
---------------------------------------------------------------------------
    \1\ ``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, three of 17--activities assessed (p. 29).
    \2\ 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.
---------------------------------------------------------------------------
    Question 2. According to Oak Ridge National Labs, the most recent 
national evaluation of the Weatherization program was conducted in the 
early 1990's. The DOE budget justification states that the 
Weatherization program has a benefit /cost ratio of 1.53.
    What study is the basis of this benefit /cost ratio and how was it 
calculated?
    Answer. The energy savings benefit/cost ratio for the 
Weatherization Assistance Program of 1.53 to 1 is from a 2007 
assessment by Oak Ridge National Laboratory (ORNL). The calculation is 
based on five factors: average annual Mbtu energy savings per home, 
projected energy prices, average weatherization retrofit cost per home, 
a discount rate, and an estimate of the useful life of the 
weatherization measures. The methodology is described in ``Estimating 
the National Effects of the U.S. Department of Energy's Weatherization 
Assistance Program with State-Level Data: A Metaevaluation Using 
Studies From 1993 to 2005,'' ORNL-493.
    Question 3. The weatherization program is not an R&D program. What 
is the rationale for comparing the weatherization program to R&D?
    Answer. The program is not completely aligned with DOE's core 
mission. Weatherization Assistance is an important goal, but is an 
anomaly because it addresses social welfare goals in addition to energy 
efficiency improvement. Prudent portfolio management requires DOE to 
focus available resources on its core areas of expertise and mission 
consistent with the DOE Strategic Plan.
    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.\3\ 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.\4\
---------------------------------------------------------------------------
    \3\ ``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, three of 17--activities assessed (p. 29).
    \4\ 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.
---------------------------------------------------------------------------
    Question 4. It is our understanding that from FY2005 to FY2007 
funds were requested and appropriated for a national evaluation of the 
Weatherization program and a contractor was selected. Why was the 
evaluation cancelled in 2007?
    Answer. The Weatherization evaluation was not cancelled. At this 
time, it has been delayed pending the results of a more strategic 
analysis of ways of improving the delivery of the program to make it 
more cost-effective. Once the results of the analysis are obtained, it 
may inform a revised approach to evaluating the program.
                          appliance standards
    EPAct 2005 required the Department to address a significant backlog 
in appliance efficiency standards and the issue is currently under the 
supervision of a federal court. EISA 2007 added some additional work in 
the area. However, your budget request is lower this year.
    Question 5. Where do you stand on addressing the backlog of 
efficiency standards and do you have sufficient resources to meet your 
deadlines and new assignments? (Request DOE to provide for the record.)
    Answer. The President's budget adequately funds DOE's commitment to 
existing appliance standards requirements. In January 2006, the 
Department released its plan to eliminate a 30-year backlog on 
appliance standards by issuing one new or amended standard for each of 
the 18 products in the backlog over the next five years. Since 
committing to this schedule for the standards program, the Department 
has met 100 percent of its targets, a new trend we intend to maintain. 
In less than two years, DOE has completed four energy efficiency 
standards, six test procedure rulemakings, and begun eight standard-
setting rulemakings. Additionally, while addressing the products in the 
backlog, the Department's multi-year schedule addresses the first cycle 
of standards that DOE must develop to comply with EPACT 2005.
    The Energy Independence and Security Act of 2007 (EISA 2007) 
amended the Energy Policy and Conservation Act of 1975 to give DOE 
authority to allow the Department to accelerate the rulemaking process 
where consensus among stakeholders and industry already exists; this 
would eliminate approximately ten months from the timeline for each 
consensus rule, usually a three-year process. In addition, EISA 2007 
added new test procedure, standards and reporting requirements for 
certain appliances and equipment. DOE is currently evaluating the 
impacts of EISA 2007 to determine the additions and deletions from our 
list of required rulemakings, and DOE is developing plans for 
implementing the new requirements, all of which we expect to complete 
in a timely manner.
                           lighting standards
    I am particularly interested in the new efficiency standards for 
general service incandescent lamps. EISA authorized a $10 million 
national campaign to improve the labeling on the light bulbs and to 
educate consumers on the transition to more efficient bulbs in 2012.
    Question 6. Is the Department requesting any funds to begin the 
implementation of this campaign? What does the Department plan to do to 
ensure a smooth transition for consumers in 2012 through 2014?
    I look forward to an ongoing dialogue with your research teams to 
discern the technologies that will be commercially available when DOE 
conducts its rulemaking on second tier standards for lighting.
    Answer. The Department regularly conducts and funds education and 
outreach campaigns for consumers that are expected to assist in the 
transition to more efficient bulbs. These activities are included in 
the FY 2009 budget request and are consistent with the goal of the EISA 
legislation. The Department will work closely with the Federal Trade 
Commission as they update labeling requirements for lighting products. 
The Department has already undertaken a variety of consumer education 
outreach efforts related to lighting, including partnerships with 
18seconds.org and Disney's Ratatouille. In addition, the Department is 
currently working with the Ad Council on a national energy efficiency 
campaign, consistent with Energy Policy Act of 2005 (EPACT) and EISA 
direction. Section 134 of EPACT requires the Department to carry out a 
comprehensive national public information initiative, including 
advertising and media awareness, to inform consumers about practical, 
cost-effective measures that consumers can take to reduce consumption 
of electricity, including purchasing energy efficient products such as 
compact fluorescent lamps (CFLs). Likewise, Section 321 of the EISA 
requires DOE to carry out a proactive national program of consumer 
awareness, information, and education that broadly uses the media and 
other effective communication techniques to help consumers understand 
lamp labels and make energy-efficient lighting choices.
    Activities beyond 2009 will be determined through annual budget 
development processes. If determined to be cost-effective, efficient, 
and in line with established goals and priorities, activities could 
include web campaigns; direct mail through utilities; work with major 
home improvement stores and homebuilders and remodelers; or the 
development of computer tools.
    The determination to consider whether to amend the energy 
conservation standards for general service lighting is scheduled to 
begin by January 1, 2014, and be completed by January 1, 2017.
         incentives for state energy efficiency building codes
    EPAct 2005 authorized a grant program to help states adopt the 
latest energy efficiency building codes and to improve code compliance.
    Question 7. Is that program funded in your budget? What are your 
plans in this area?
    Answer. EPACT Section 128 authorized additional funding to States 
for implementation of a plan to achieve and document at least a 90 
percent rate of compliance with residential and commercial building 
energy efficiency codes, based on energy performance. To date, Congress 
has not appropriated funding for implementation of this Section, but 
DOE is supporting States' building code efforts through its State 
Energy Program. The Department did not request FY 2009 funding for the 
implementation of EPACT 2005 Section 128. However, DOE operates 
successful programs that provide technical assistance to the States in 
the form of a variety of tools, materials, and training to support 
implementation and documentation of their code adoption and enforcement 
plans.
    Question 8. I commend you for requesting increased funding for 
building energy codes programs this year.
    Will DOE work with the voluntary codes organizations to meet the 
goal of increasing energy efficiency in the residential building code 
by 30% in 2008? If the voluntary codes organizations fail to adopt a 
30% enhancement, will DOE develop a separate specification? What 
resources will you devote to providing technical assistance to the 
states for updating and implementing the model codes? Will the EPAct 
2005 grant program be funded from this increase?
    Answer. In FY 2009, DOE will complete analyses and support for the 
upgrading of ASHRAE 90.1-2010 that will have code stringency effects of 
approximately 30 percent compared to ASHRAE 90.1-2004. DOE will also 
conduct the R&D needed to support an increased code stringency of 30 
percent in the next residential model building energy code (the 2010 
International Energy Conservation Code (IECC)). This year, DOE is 
actively involved in developing and supporting code proposals for 
consideration by the International Code Council.
    DOE will continue to provide technical assistance to the States in 
the form of a variety of tools, materials, and training to support 
updating and implementation of model codes. States have the discretion 
to apply State Energy Program formula and special project grants to 
implement their plans to achieve and document at least a 90 percent 
rate of compliance with residential and commercial building energy 
efficiency codes, based on energy performance.
                 incentives for energy star appliances
    Another EPAct program that you have not funded is a rebate program 
for consumers who purchase Energy Star appliances. Like 
weatherization--this program would improve the efficiency of existing 
(and new) buildings. Page 312 of your budget justification (regarding 
strategic goals for the building technologies program) states ``in the 
near term, widespread areas of energy use--space heating, lighting, 
water heating and air conditioning.'' On page 324, the budget 
justification goes on to say that DOE might not meet its strategic 
goals for buildings due to ``external factors'' i.e., that consumers 
are typically reluctant to pay for higher cost equipment, even when 
they will save money in the long run.
    Congress included a rebate program in EPAct 2005 to specifically 
address this ``external factor''. The program is modeled on a 
successful initiative in New York state.
    Question 9. How does DOE plan to incent consumers to upgrade their 
inefficient appliances?
    Answer. Through the joint DOE-EPA ENERGY STAR Program, significant 
utility and State-based rebate programs have been and will be made 
available to consumers. The ENERGY STAR Program has a significant and 
productive partnership with the Consortium for Energy Efficiency (CEE), 
whose members are major utilities across the nation. CEE relies upon 
ENERGY STAR specifications and criteria to help establish performance 
thresholds for utility efficiency rebate programs for major appliances, 
residential lighting fixtures, and many more products. NonCEE member 
utilities also have provided rebates to consumers for various Energy 
Star products.
    Based on preliminary reports by utilities, utility residential 
efficiency spending for 2006 is estimated at over $560 million.\5\ The 
Department believes the established infrastructure of utility rebate 
programs, while providing individual consumer benefits, are paid for 
through system-wide benefits accruing to utilities and all ratepayers; 
and represent an economically efficient and effective means for 
providing incentives for both utilities and consumers. This balance 
allows DOE to properly prioritize investments into technology research, 
development, and deployment that brings down the cost and increases the 
availability of energy efficient technologies, benefiting all 
consumers.
---------------------------------------------------------------------------
    \5\ This is from a 2006 Report by the Consortium for Energy 
Efficiency called ``U.S. Energy Efficiency Programs: a $2.6 Billion 
Industry,'' p. 6. (www.cee1.org/ee-pe/cee--budget--report.pdf).
---------------------------------------------------------------------------
    Question 10. Another EPAct program that you have not funded is a 
rebate program for consumers who purchase Energy Star appliances. Like 
weatherization--this program would improve the efficiency of existing 
(and new) buildings. Page 312 of your budget justification (regarding 
strategic goals for the building technologies program) states ``in the 
near term, widespread areas of energy use--space heating, lighting, 
water heating and air conditioning.'' On page 324, the budget 
justification goes on to say that DOE might not meet its strategic 
goals for buildings due to ``external factors'' i.e., that consumers 
are typically reluctant to pay for higher cost equipment, even when 
they will save money in the long run.
    Congress included a rebate program in EPAct 2005 to specifically 
address this ``external factor''. The program is modeled on a 
successful initiative in New York state.
    How does DOE plan to incent consumers to upgrade their inefficient 
appliances?
    Answer. Through the joint DOE-EPA ENERGY STAR Program, significant 
utility and State-based rebate programs have been and will be made 
available to consumers. The ENERGY STAR Program has a significant and 
productive partnership with the Consortium for Energy Efficiency (CEE), 
whose members are major utilities across the nation. CEE relies upon 
ENERGY STAR specifications and criteria to help establish performance 
thresholds for utility efficiency rebate programs for major appliances, 
residential lighting fixtures, and many more products. NonCEE member 
utilities also have provided rebates to consumers for various Energy 
Star products.
    Based on preliminary reports by utilities, utility residential 
efficiency spending for 2006 is estimated at over $560 million.\6\ The 
Department believes the established infrastructure of utility rebate 
programs, while providing individual consumer benefits, are paid for 
through system-wide benefits accruing to utilities and all ratepayers; 
and represent an economically efficient and effective means for 
providing incentives for both utilities and consumers. This balance 
allows DOE to properly prioritize investments into technology research, 
development, and deployment that brings down the cost and increases the 
availability of energy efficient technologies, benefiting all 
consumers.
---------------------------------------------------------------------------
    \6\ This is from a 2006 Report by the Consortium for Energy 
Efficiency called ``U.S. Energy Efficiency Programs: a $2.6 Billion 
Industry,'' p. 6. (www.cee1.org/ee-pe/cee--budget--report.pdf).
---------------------------------------------------------------------------
    Question 11. What is your timeline for establishing the Commercial 
Green Buildings office, as required by the Energy Independence and 
Security Act (EISA)?
    Answer. The Department's Office of Energy Efficiency and Renewable 
Energy, through the existing Building Technologies Program, is 
accountable for the functions described in Sections 421 and 422 of 
EISA.
    Activities in the FY 2009 budget request consistent with these 
sections of EISA include research and development of cost-effective 
technologies, integrated design strategies, and operating procedures 
for commercial buildings such that they produce as much energy as they 
use on an annual basis; as well as public-private partnership work with 
the retail, office, and school building segments of the commercial 
building market.
                    commercial buildings initiative
    EISA authorized funding for a Zero Net Energy Commercial Building 
Initiative (CBI) within the Department and also authorized the 
establishment of a private sector consortium to work with the 
Department on the Commercial Buildings Initiative and other related 
buildings programs.
    Question 12. When will the CBI be established and what funding will 
be allocated to the CBI in FY2009? When will the Consortium be 
selected?
    Answer. The Department has made significant progress in FY 2008 in 
establishing the procedures for competitively selecting a Consortium. 
For example, in FY 2008, the DOE Commercial Buildings Integration sub-
program has initiated plans to create three new Commercial Building 
Alliances that are designed to minimize the energy consumption and 
environmental impacts of commercial buildings. The Alliances focus on 
the following sectors: retail; commercial properties (leased space, 
office, shopping malls and hospitality); and institutions (including 
colleges and universities, hospitals and health care facilities). On 
February 21, 2008, DOE held an executive roundtable discussion as a 
first step in forming the Retailer Energy Alliance (REA), which 
promotes the use of energy-efficient technologies and management 
practices for retail operations. DOE provides technical support to help 
meet the goals of the different Alliances. The REA is the first of 
several initiatives and DOE's Building Technologies Program plans to 
launch similar initiatives for the other sectors identified above. 
Additionally, a majority of the $13 million requested in FY 2009 for 
the Commercial Buildings Integration sub-program will be focused on 
activities consistent with Section 422 of EISA.
    Question 13. In December 2006, Congress passed a pipeline safety 
reauthorization bill (Pub.L no. 109-468), a few months after BP had 
been forced to shut down some of its oil pipelines in the Prudhoe Bay 
area due to leaks.
    The Energy Committee held hearings on the BP pipeline issues. Many 
of us were concerned that a vital part of our oil transportation system 
had not been adequately regulated.
    We worked with the Senate Commerce Committee to mandate DOT and DOE 
to conduct periodic analyses of the adequacy of the nation's pipeline 
infrastructure and determine if the current level or regulation is 
sufficient to minimize the potential for unplanned losses of pipeline 
capacity.
    The report is due in June of this year. Are you on track to get 
this report to us?
    Answer. Yes, the referenced study is the ``Petroleum Transportation 
Capacity and Regulatory Adequacy Study,'' which is mandated in section 
8 of the Pipeline Safety Improvement Act of 2006 (P.L. 109-468). The 
Department of Energy's Office of Fossil Energy has a subordinate role 
in the preparation of this report by providing technical assistance and 
support to the Department of Transportation's Pipeline and Hazardous 
Materials Safety Administration (PHMSA). PHMSA is the Federal 
government entity responsible for the oversight of safety for pipelines 
that transport gas or hazardous liquids and provides grants to states 
for programs to ensure pipeline safety. PHMSA currently is in ongoing 
discussions with the Transportation Security Administration (TSA) about 
funding a comprehensive study. Meanwhile, PHMSA is conducting an in-
house analysis to provide a responsive scoping document. We anticipate 
that PHMSA will soon be sharing the scoping document with DOE and TSA 
for comment and concurrence with the intent to finalize it this spring.
                                biofuels
    Question 1. While cellulosic ethanol is being pursued aggressively 
by DOE and private industry, what are you doing to develop biobutanol 
and algal biocrude, either of which can be shipped in our existing 
pipeline infrastructure?
    Answer. There are a number of other advanced biofuels that have 
promising potential as gasoline and diesel substitutes. In recent 
years, DOE's Office of Energy Efficiency and Renewable Energy has 
focused almost exclusively on cellulosic ethanol primarily due to the 
relative volumetric substitution available and the fact that cellulosic 
ethanol demonstrates the greatest potential for significant near-term 
commercialization.
    However, DOE is increasing and broadening its efforts on next-
generation biofuels using a variety of feedstocks and conversion 
technologies. For instance, on January 29, 2008, DOE announced $114 
million in awards for small scale biorefineries that use next 
generation technologies.
    DOE is reviewing a wide range of potential alternative fuels beyond 
cellulosic ethanol, including algae and biobutanol.
    Biobutanol is a liquid alcohol fuel that can be used in today's 
gasoline-powered internal combustion engines. The properties of 
biobutanol make it highly amenable to blending with gasoline. For 
example, recently, DuPont and British Petroleum, among others, have 
begun investing in R&D to develop more cost-effective biobutanol 
production processes.
    Question 2. Does the Department plan to establish more Bioenergy 
Research Centers? The Department currently has three centers, and EISA 
requires at least four additional centers.
    Answer. The Department's Office of Science does not currently plan 
to issue a funding opportunity announcement requesting applications for 
additional Bioenergy Research Centers. As reflected in the GTL 
Bioenergy Research Center white paper (http://genomicsgtl.energy.gov/
centers/smGTLBRCWhitepaper.pdf, on page 17)), future GTL centers would 
be anticipated to address DOE environmental missions in environmental 
remediation and carbon cycling and sequestration. The Department does, 
however, intend to continue supporting fundamental and applied 
bioenergy research through standard merit-reviewed procurement 
processes. For example, the Department's Office of Science has issued a 
joint USDA-DOE program solicitation for research on plant feedstock 
genomics for bioenergy and is strongly encouraging proposals not only 
from individual investigators but also from interdisciplinary teams 
comprising a range of expertise. Pending the outcome of the merit 
review process, awards are expected to be made in FY 2008.
    Question 3. How does the Department plan to support localized 
production of biofuels in regions not currently associated with large 
volumes of biofuel production, such as the Northeast and Southwest?
    Answer. Biomass resources are distributed throughout the country 
and their variety necessitates research and collaboration in all parts 
of the nation. To take advantage of this geographically diverse 
resource, the Department of Energy (DOE), over the last two years, has 
co-funded with industry six commercial-scale biorefinery plants, seven 
10 percent-scale biorefinery plants, three Office of Science Bioenergy 
Research Centers, five university-based regional feedstock partnerships 
under the Sun Grant Initiative, and thirteen applied science projects. 
These projects span across twenty-one states and are focusing on 
multiple feedstocks and technologies that once proven will provide 
information useful to all regions of the nation. The five regional 
feedstock partnerships were established through the Sun Grant 
Initiative land-grant universities and involve other key stakeholders 
to identify the biomass resource potential in every region of the U.S., 
including the Northeast and Southwest. Last August, Oregon State 
University, the Western Sun Grant Center, in partnership with DOE, 
hosted a workshop to identify the best biomass resources for that 
region to produce liquid transportation fuels. Last November, a similar 
workshop was hosted by Cornell University, the Northeast Sun Grant 
Center, with comparable goals for that region. Workshop participants 
anticipate that agricultural and forest residues will be significant 
biomass resources in the Southwest and that forest resources will be 
dominant in the Northeast. In terms of potential energy crops, sorghum 
may be pursued under irrigated conditions in the Southwest and hybrid 
willow, a short rotation woody crop, will likely be developed in the 
Northeast.
    Question 4. How do you see the Energy Frontier Research Centers 
contributing to biofuels research and commercialization? What portion 
of the grants made through this program will be focused on biofuels?
    Answer. The Energy Frontier Research Centers (EFRCs) will cover a 
wide range of research areas, and may include biofuels research. EFRC 
proposals will be solicited through open, competitive Funding 
Opportunity Announcements (FOA), with the goal of reaching the broadest 
range of researchers and attracting the very best ideas to pursue the 
scientific breakthroughs needed to create truly transformational new 
energy technologies. No specific amounts of funding are set aside in 
the ERFC competition for biofuels or any other research area. Funding 
will go to the highest quality proposals, as determined by peer review. 
The EFRCs will not contribute directly to commercialization, but they 
could provide new understanding critical to commercial success--for 
example, advances in our understanding of how biological feedstocks are 
converted into portable fuels could one day lead to economic cellulosic 
biofuel production.
                             coal/futuregen
    Question 1. As I understand it, one of the chief benefits of the 
FutureGen approach was that it would demonstrate an integrated design, 
optimized to maximize CO22 capture overall plant efficiency. 
How are you going to insure we receive this same benefit from a 
substantially smaller federal investment in a commercial facility?
    Answer. The FutureGen program remains a vital component of the 
Administration's plan to make coal part of a cleaner, more secure 
energy future for America. The Administration is restructuring the 
FutureGen program to accelerate commercial use of carbon capture and 
storage technology and expand the program from one project to multiple 
demonstration projects.
    Rather than investing in the total cost of an experimental facility 
integrated with carbon capture and storage, the restructured FutureGen 
approach will invest in the carbon capture and storage portion of 
commercial power projects, capturing and sequestering at least double 
the amount compared to the FutureGen concept announced in 2003. This 
will also limit taxpayers' financial exposure to only a portion of the 
cost of 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 (not to mention in the Department's competitive proposal 
evaluation process), the underlying power plant projects will still 
need to be efficient, competitive, and environmentally sound.
    Question 2. I have heard estimates that including large-scale 
carbon capture and sequestration on a typical power plant will increase 
costs by roughly a third. What assurance do you have that the amounts 
you propose to distribute under this program will be sufficient 
incentives to lead to commercial-scale demonstration of the technology? 
Will other federal incentives be available to the applicants, and are 
more necessary?
    Answer. Approximately thirty commercial integrated gasification 
combined cycle (IGCC) projects are in various stages of planning, 
permitting, and design across the Nation, which is evidence that a 
commercially viable basis for IGCC technology already exists. Some are 
stalled because of uncertainty regarding CO22 emissions 
requirements. Federal funding under the restructured FutureGen program 
may help fund the carbon capture and storage part of some of these 
projects. Federal incentives, such as loan guarantees and tax credits, 
may also be available to some of these projects. This provides 
additional incentives for such projects. We have considered the need 
for further incentives, but believe that none are necessary at this 
time.
    Question 3. In recent months we have seen proposed commercial IGCC 
plants significantly delayed or cancelled. What assurance do you have 
that there will be sufficient commercial interest in building these 
plants to give us the demonstrations we need?
    Answer. At the present time, over 30 integrated gasification 
combined cycle (IGCC) power plants are in various proposal stages and 
major barriers to their deployment include the uncertainties regarding 
future CO22 emissions regulations and the actual costs of 
constructing and operating IGCC-carbon capture and storage (CCS) power 
plants. The restructured FutureGen program is designed to help 
understand, address, and solve technical, siting, permitting, 
regulatory, and financial aspects of CCS deployment. Through its 
Request for Information, DOE expects to identify power producers who 
would consider participating in the restructured FutureGen initiative.
    Question 4. The 4 phase-3 large-scale CO22 sequestration 
tests that have been awarded thus far are all expected to inject less 
than 1 million tons (approx 500,000) of CO22 per year--will 
there be an effort to increase those amounts so that we can have 
information more in line with that FutureGen would have produced?
    Answer. In addition to the four large-scale tests awarded to three 
of the Regional Carbon Sequestration Partnerships (RCSP) in October 
2007, a fifth test was awarded in December 2007 to a fourth RCSP. Three 
of the tests (in the Alberta Basin, Lower Tuscaloosa Formation, and 
Entrada Formation) individually are expected to inject at least 1 
million tons of CO22 per year for at least one year. Two 
other tests (in the Williston Basin and Mount Simon Sandstone 
Formation) will inject greater than 1 million tons in total, though at 
a rate of less than 1 million tons of CO22 per year. The 
injection rates will be at a scale that demonstrates the ability to 
inject and sequester several million metric tons for a large number of 
years. This operation at commercial-scale may be as significant as that 
of higher injections of 1 million metric tons per year. 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. It is our intention to confirm the 
soundness of the design of these injections, including the 
applicability of the injection scale proposed for the demonstrations to 
operations at commercial scale, as well as the duration of injections, 
and number and phasing of injections.
    Question 5. The competition for FutureGen between Texas and 
Illinois led both states to examine the policy framework that would be 
necessary for CO22 sequestration. How will the new program 
create similar incentives for states in which the projects will be 
located? What can we do here to accelerate this deployment?
    Answer. There are major technical and regulatory hurdles to 
overcome before coal with carbon capture and storage (CCS) can be 
commercially deployed; however, it is in the best interest of states to 
adopt a posture that would help enable ultra-low criteria pollutant 
emissions integrated gasification combined cycle (IGCC) plants with 
CCS, like FutureGen, to provide stable power supplies at affordable 
prices.
    FutureGen will provide early CCS demonstration experience in a 
commercial setting, which is aimed at accelerating deployment and 
advancing carbon capture policy. The restructured approach will 
sequester at least double the amount of CO22 of the previous 
approach and have the potential of demonstrating CCS in multiple 
states. FutureGen will help to establish commercial feasibility and a 
model that industry could use to deploy commercial-scale plants that 
each sequester at least one million metric tons of carbon dioxide 
annually.
    Question 6. Could you comment on whether you believe that future 
disruptions will be more about price spikes than physical shortage in 
the United States?
    Answer. Regarding crude oil, in the long-term, world oil prices are 
driven by market fundamentals, principally the balance between world 
oil supply and demand. In the next several months, EIA expects world 
oil markets to remain tight due to rising world oil demand and low 
surplus oil production capacity. EIA expects this situation to improve 
in the later part of this year, when growth in oil production from 
outside OPEC should exceed world oil demand growth, leading to world 
oil prices that are lower than current levels. At the same time, 
disruptions in oil markets, which often result in price spikes, can be 
triggered by a range of factors including political unrest and weather. 
Future disruptions in oil markets are very difficult to predict but can 
result in both physical shortages and price increases.
    Question 7. Could you clarify the Administration's policy on when 
the SPR will be used?
    Answer. The Administration is committed to complying with the 
requirements of the Energy Policy and Conservation Act (EPCA), the 
authorizing legislation for the SPR. Section 161 of EPCA requires that, 
before crude oil from the SPR can be drawn down and sold, the President 
must find that ``drawdown and sale are required by a severe energy 
supply interruption or by obligations of the United States under the 
international energy program.''
    EPCA defines ``severe energy supply interruption'' as a national 
energy supply shortage that: ``(A) is, or is likely to be, of 
significant scope and duration, and of an emergency nature; (B) may 
cause major adverse impact on national safety or the national economy; 
and (C) results, or is likely to result, from (i) an interruption in 
the supply of imported petroleum products, (ii) an interruption in the 
supply of domestic petroleum products, or (iii) sabotage or an act of 
God.''
    The Administration's policy is that the U.S. will only sell oil 
from the Reserve in the event of an emergency caused by a severe supply 
disruption. The Department of Energy monitors daily United States 
petroleum inventories, refinery utilization rates, and domestic and 
international production. We also follow very closely geopolitical 
events that may impact petroleum supplies and, if there is a disruption 
that causes, or is likely to cause, a significant supply disruption, 
the SPR stands ready to be used to help mitigate the impacts.
    The SPR can act quickly to fortify efforts by producers to offset 
any severe disruption in supplies of crude oil and, upon consultation 
with our International Energy Agency (IEA) partners, would coordinate 
the United States' response with actions taken by the IEA.
                                nuclear
    In the President's FY 09 budget request, the Nuclear Power 2010 
program has received $241.6 million, this is consistent with the 
recommendations of the National Academies from reviewing the Office of 
Nuclear Energy. This is just one aspect of the nuclear fuel cycle--
reactors.
    Question 1. Do you think it's important the department work to 
address the needs of enrichers and convertors?
    Answer. Several commercial enrichers have indicated that their 
decisions to build new plant construction are supported by current 
market conditions. The Department of Energy encourages the efforts by 
the private sector to build new uranium enrichment capacity to help 
maintain a viable, competitive, domestic nuclear fuel industry. DOE is 
working with all private enrichers to assist companies in understanding 
and complying with U.S. laws and regulations regarding the protection 
of proliferation-sensitive enrichment technology.
                         heu purchase agreement
    Question 2. In 1992 [correction: Agreement was signed in 1993] the 
U.S Government signed The Highly Enriched Uranium Purchase Agreement, 
or ``HEU deal,'' with Russia to blend down 500 tons of highly enriched 
uranium (HEU) to low enriched uranium (LEU). The Russian Federation has 
signaled that they have no interest in continuing this program post 
2013 when it is set to end. Do you consider it in the national security 
interests of the United States to continue blending down HEU to LEU for 
feedstock for commercial nuclear power plants beyond the 2013 time 
period?
    Answer. The 1993 HEU Purchase Agreement has been an extremely 
important and successful effort in our bilateral nonproliferation 
partnership with Russia. This joint effort prevents large amounts of 
weapons material from being at risk for theft or diversion. This 
Agreement ensures that 500 metric tons of HEU from dismantled Russian 
nuclear weapons (the material equivalent of 20,000 nuclear weapons) 
will be eliminated by the end of the Agreement. To date, the U.S. has 
monitored the elimination of 325 metric tons of Russian HEU 
(approximately 13,000 nuclear weapons-worth of material).
    Certainly it is in the U.S. national security interest that excess 
weapons material continue to be dispositioned in a transparent manner 
consistent with U.S. nonproliferation goals. The U.S. raised the 
possibility of extending the HEU Agreement for additional downblending 
on several occasions. However, Russia has been clear during these 
discussions that its intention is to transition to normal commercial 
activity, and therefore it has no interest in extending the 
Governmentto-Government HEU Agreement beyond 2013.
                           office of science
    Question 1. I commend you for initiating a program in the Office of 
Science on energy storage to support the applied hybrid vehicles 
program, I understand the request is $33M.
    I was told 3 years ago you were initiating a similar Office of 
Science program in lighting to support the applied solid state lighting 
program--where is it?
    Answer. In the Spring of 2006, we held a workshop on basic research 
needs for solid state lighting. Had the FY 2008 appropriation supported 
the requested level, we would have been able to initiate solid state 
lighting research during FY 2008; however, it did not. The FY 2009 
budget request proposed Energy Frontier Research Centers which will 
bring together teams of investigators to address the grand challenges 
in basic research, as identified in several grand challenges workshops, 
and could include both solid state lighting and electrical energy 
storage. These new activities will complement the core research 
programs in semiconductor physics, nanostructured materials synthesis 
and design, and fundamental light-matter interactions, which provide 
the underpinning knowledge base for a broad range of energy utilization 
and conversion applications.
                           office of science
    At the start of this administration, the Department initiated three 
large billion dollar ``game changing R&D programs'', hydrogen, 
FutureGen, and reprocessing with milestones in many cases out to 2020. 
Here we are at the last year and where as best as I can see all three 
programs will be left up to the next administration to sort out.
    Question 2. I'd like your opinion if you had to do it over again 
knowing what you do today--would you have initiated these programs?
    Answer. I am proud of our accomplishments during this 
administration and the many advances in research and development that 
we have funded. The Department's research and development programs have 
been managed in a manner that is fiscally sound, and accomplishes what 
we need to achieve on behalf of the Nation and, indeed, the world. In 
the case of FutureGen, the restructured approach to the program will 
offer an opportunity to focus on accelerating near-term technology 
deploying multiple projects integrated with carbon capture and storage 
technologies.
    Hydrogen has the potential to significantly reduce oil use, 
criteria pollutants, and greenhouse gas emissions. Through the Hydrogen 
Fuel Initiative, major progress has been made. Based on modeling, DOE 
estimates that projected high-volume cost of automotive fuel cells has 
been reduced from $275/kW to $94/kW. Similarly, DOE estimates that the 
cost of producing 5,000 psi hydrogen from natural gas has been reduced 
from $5.00 per gallon of gasoline equivalent (gge) to a projected $3.00 
per gge (untaxed) today, and progress has been made in reducing the 
cost of renewable hydrogen production pathways. Many new materials have 
been identified with the potential to achieve the hydrogen storage 
capacities required onboard a vehicle in order to have an acceptable 
driving range. Over 90 fuel cell vehicles and 15 hydrogen stations are 
operating in real-world environments and providing performance data to 
validate the technology. The Department has requested $266 million in 
the FY 2009 budget for its Hydrogen Fuel Initiative programs. This 
funding continues the R&D needed to reduce fuel cell cost to $30/kW to 
help enable fuel cell vehicles to compete with conventional vehicles, 
to reduce the cost of other domestic pathways for hydrogen production, 
including hydrogen from coal (with carbon sequestration), biomass, 
renewable and nuclear energy sources and to achieve the hydrogen 
storage technology targets.
    The nuclear fuel recycling program is part of the Global Nuclear 
Energy Partnership (GNEP)/Advanced Fuel Cycle Initiative. GNEP is an 
international effort to increase the use of nuclear energy throughout 
the world in support of economic development without increasing 
greenhouse gas emission or nuclear proliferation. Twenty countries have 
joined the U.S. in this important endeavor, including all fuel cycle 
nations who are participants in the Nuclear Non-Proliferation Treaty 
(NNPT). Under GNEP, fuel cycle nations would assist other countries 
through the provision of smaller, grid appropriate nuclear power 
reactors and fresh fuel and waste management services. The U. S. 
pioneered both fast reactors and reprocessing as critical features of 
advanced nuclear fuel cycles, and the Department seeks to maintain and 
build on this expertise in the United States in partnership with 
industry.
                    Questions From Senator Domenici
                           competes programs
    Question 1. The Office of Science budget (on page 454) refers to 
``implementation of several new initiatives in the outyears consistent 
with recommendations WDTS stakeholders and the ACI.'' It seems 
significant that the America COMPETES Act was not specifically 
referenced here as well. Does this signal the Administration is less 
committed to the DOE provisions of the COMPETES Act?
    Answer. The Department certainly supports many of the underlying 
goals of the America COMPETES Act. The Administration's view of the DOE 
provisions of the COMPETES Act was addressed in full in Office of 
Science and Technology Director Dr. Jack Marburger's statement prepared 
for his February 14, 2008, hearing before the House Committee on 
Science and Technology:
    Consistent with the Administration's approach to support the 
focused priorities of the ACI the DOE Office of Science analyzed the 
provisions of the COMPETES Act and determined that the Office is 
already supporting several programs which are consistent with the 
intent of the COMPETES Act. These include the DOE Academies for 
Creating Teacher Scientists (DOE ACTS) program which is comparable to 
the summer institutes authorized in the COMPETES Act; the Outstanding 
Junior Investigator award programs and the Office of Science Early 
Career Programs which are consistent with the early career award 
programs authorized; the Faculty and Students Teams Program which is 
consistent with the programs for minority students authorized; and such 
research centers as the DOE Bioenergy Research Centers and SciDAC 
Centers for Enabling Technologies at national laboratories which are 
consistent with the discover research centers authorized. These ongoing 
DOE programs are all supported in the FY 2009 budget request.
    In addition to the programs identified above, the Office of Science 
Office of Workforce Development for Teachers and Scientists, working 
with the other Office of Science Program Offices and the national 
laboratories, continues to build the Office of Science's efforts in 
increasing participation of historically underrepresented populations, 
and improving the laboratories' capacity to bring experiential learning 
opportunities to the educational institutions in their respective 
regions.
    Question 2. Do the ACTS and FaST programs encompass any of the 
specific programs authorized in COMPETES? If so, which ones, and how 
will the funding by allocated between these efforts?
    Answer. The Faculty and Student Teams (FaST) Program is consistent 
with the intent of Section 5003(d) of America COMPETES Act to provide 
experiential-based learning programs for minority students.
    The FaST program pairs college/university faculty and undergraduate 
students in teams with mentoring scientists at the DOE national 
laboratories for research intensive experiential-based learning 
opportunities. To qualify for the FaST program, an applicant's college/
university must be below the 50th percentile in receipt of federal 
research funding. The majority of participants in the FaST program come 
from under-represented colleges/universities. This is one of the key 
programs in the Department of Energy/National Science Foundation 
partnership and encourages underrepresented minority students to pursue 
careers in science, engineering, and mathematics. The Office of 
Workforce Development for Teachers and Scientists (WDTS) is currently 
developing a tracking and evaluation process for all of its programs, 
including the FaST program.
    The DOE Academies Creating Teacher Scientists (DOE ACTS) program, 
carried out at the DOE national laboratories, is consistent with the 
summer institutes authorized in Section 5003(d) of the COMPETES Act, 
which 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. FY 2008 is the fourth year the DOE ACTS 
program will bring K-12 teachers into the national laboratories for 
research intensive experiential-based opportunities to build their 
content knowledge in STEM fields--knowledge which 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.
    Funding allocated to the FaST and DOE ACTS programs is summarized 
in the following table: 


                   strategic petroleum reserve (spr)
    Question 1. The Department's FY 2009 budget requests $344 million, 
an 84.2% increase for SPR expansion. Please explain the current SPR 
status and purpose, and the reasons for an expansion of 727 million 
barrels to 1.5 billion barrels.
    Answer. The SPR currently holds approximately 701 million barrels 
of crude oil to carry out its mission to provide the United States 
energy security and to help meet the country's obligations under the 
International Energy Program (IEP). While the U.S. meets its IEP 
stockholding obligation through a combination of government-owned SPR 
oil and privately-held commercial stocks, the current SPR inventory 
alone provides about 58 days of net import protection. The SPR plans to 
increase its inventory to 727 million barrels in 2008 to provide about 
60 days of protection. The proposed expansion to 1.0 billion barrels 
will increase the import protection to 90 days in 10 years (i.e. 2019). 
The proposed expansion to 1.5 billion barrels will increase the import 
protection to 124 days.
    Question 2. What is the current vulnerability of the United States 
to petroleum supply disruptions? Is the current SPR inventory and 
import protection enough to sustain a major supply disruption? Please 
compare our import protection today with past decades.
    Answer. The current SPR inventory of 701 million barrels provides 
about 58 days of net import protection. However, it is unlikely that a 
supply disruption would result in a 100% cutoff of imports due to the 
continued supplies from historically stable sources in the Western 
hemisphere. In addition, through our membership in the International 
Energy Agency, we participate in coordinated response measures to 
severe global supply disruptions.
    The current sustained SPR drawdown capability rate of 4.4 million 
barrels per day would replace approximately 45% of crude oil imports 
for a 90-day period, and the entire Reserve can be drawn down in 180 
days in response to a very severe supply disruption. The drawdown can 
be sustained at lower rates for a much longer period.
    As the Nation's import volumes have increased, the days of the 
SPR's net import protection have ranged from a high of 118 days in 1985 
to a low of 52 days in 2000. The days of import protection provided by 
SPR oil will increase to 60 days when the SPR is filled to the current 
727 million barrel capacity, to 90 days with 1 billion barrels in 
storage, and to 124 days with expansion to 1.5 billion barrels.
    Question 3. What are the Department's current drawdown capabilities 
and what will be the drawdown capabilities as a result of the 
expansion?
    Answer. The Department has current drawdown capability of 4.4 
million barrels/day and expansion to 1 billion barrels will increase 
SPR drawdown capability to 5.9 million barrels/day. 


    Question 4. Will the United States' import protection increase as a 
result of the expansion? Or will our import protection decrease if we 
do not expand or stop filling the SPR?
    Answer. The SPR has been increasing its inventory in a moderate and 
transparent manner. During Spring 2008, its level of about 701 million 
barrels will provide 58 days of import protection. The SPR plans to 
increase its inventory to 727 million barrels, providing 63 days of 
protection in 2009.
    However, the proposed expansion to 1.0 billion barrels will 
increase the import protection to 90 days in 10 years (i.e. 2019). The 
proposed expansion to 1.5 billion barrels will increase the import 
protection to 124 days.
    Question 5. What are the Administration's acquisition procedures 
for the SPR and does the Administration evaluate the potential market 
impact of filling the SPR?
    Answer. The Energy Policy Act of 2005 (EPAct 2005) requires 
acquisition of petroleum to fill the Strategic Petroleum Reserve to its 
authorized one billion barrel capacity ``as expeditiously as practical 
without incurring excessive costs or appreciably affecting the price of 
petroleum products to consumers''; and directs the Secretary of Energy 
to promulgate procedures for the acquisition of petroleum for the 
Reserve.
    Section 301(c) of EPAct 2005 directs that the acquisition 
procedures:

          1. Maximize overall domestic supply of crude oil;
          2. Avoid incurring excessive cost or appreciably affecting 
        the price of petroleum products to consumers;
          3. Minimize the costs to the Department of the Interior and 
        the Department of Energy in acquiring such petroleum products;
          4. Protect national security;
          5. Avoid adversely affecting current and futures prices, 
        supplies, and inventories of oil; and,
          6. Address other factors the Secretary determines to be 
        appropriate.

    After consideration of public comments, the Department of Energy 
promulgated Procedures for the Acquisition of Petroleum for the 
Strategic Petroleum Reserve (10 CFR 626), effective December 8, 2006.
    The Procedures establish the rules and procedures for acquisition 
of SPR crude oil by direct purchase or royalty-in-kind (RIK) transfer. 
The Procedures also specifically address deferrals of contractually 
scheduled deliveries. Since their publication, the Procedures have been 
closely followed in all crude oil acquisition activities.
    The Procedures require a complete market analysis be performed 
prior to any oil fill activities to ensure that Strategic Petroleum 
Reserve acquisition activities will not unduly affect current market 
conditions adversely. Since the beginning of 2007, three separate 
market assessments have been performed prior to initiating activities 
to attempt acquisition by direct purchase and for the two RIK exchange 
cycles.
    Question 6. What is the United States' obligation as a Member 
Country of the International Energy Program? Is the United States 
currently meeting those obligations?
    Answer. Under the International Energy Program (IEP), the United 
States is obligated to hold emergency oil stocks equivalent to at least 
90 days of net oil imports and to release stocks, restrain demand, 
switch to other fuels, increase domestic production or share available 
oil, if necessary, in the event of a major supply disruption.
    The United States meets its IEP obligations through a combination 
of SPR and non-compulsory industry stocks. The SPR provides 58 days of 
import protection; the remaining portion is satisfied through industry 
stocks.
    Question 7. Please explain how filling the SPR at a rate of 45,000 
barrels day (.05% of world supply), or 15,000 barrels per day of light 
sweet crude (.075--.10% of world light sweet supply) would impact crude 
oil market prices when world oil consumption is reaching approximately 
90 million barrels per day.
    Answer. Oil received by the SPR represents a very small fractional 
amount of global demand. The Office of Petroleum Reserves conducted an 
analysis before the present round of Royalty-in-Kind acquisition 
activity commenced. This analysis found that market conditions were 
such that the acquisition of this small amount of oil would not 
appreciably impact oil market prices.
                              water power
    For the past three years, the Administration has requested zero 
funding for hydropower R&D as it sought to eliminate its conventional 
hydropower program. Due to promising ocean and tidal technology, DOE 
seeks $3 million in FY 2009. In FY 2008, Congress appropriated about 
$10 million for the water power program.
    Question 1. While $3 million is a start after three years of zero 
funding, it is still significantly less than the FY08 level of $10 
million. How does the Department propose to reestablish the hydro 
program? Along with new initiatives for ocean, tidal and in-stream 
hydrokinetic technologies, as authorized by last year's Energy bill, 
will R&D for conventional hydropower be continued?
    Answer. The Department no longer has a research and development 
program exclusively devoted to hydropower. However, the Office of 
Energy Efficiency and Renewable Energy has established a new Water 
Power Program, in accordance with the FY 2008 omnibus appropriations 
bill, to begin research on a variety of hydrokinetic technologies. 
Although conventional hydropower is not entirely excluded in FY 2008, 
the new Program's focus will be on new, innovative, and advanced 
hydrokinetic technologies.
    The FY 2009 Water Power program will initially focus on (1) 
resource assessments in order to identify the prime domestic resource 
areas and based on these results, (2) technology characterizations of 
the various water power energy conversion technologies, with the goal 
of determining cost, performance and reliability characteristics, and 
(3) industry partnerships to take advantage of early industry 
demonstration projects to assess the performance and cost of real 
projects in the ocean.
    Question 2. In the recently enacted Energy bill, Congress 
authorized the establishment of National Marine Renewable Energy 
Research, Development, and Demonstration Centers for the purposes of 
advancing commercial application of marine renewable energy.
    How does the Department intend to proceed with the establishment of 
these Centers? How many Centers do you anticipate and what timetable 
are you envisioning?
    Answer. With authority provided in the Energy Independence and 
Security Act of 2007 and earlier energy legislation, the Department of 
Energy has requested proposals for water power projects in three areas:

   Topic Area 1: Advanced Water Power Renewable Energy In-Water 
        Testing and Development Projects
   Topic Area 2: Marine and Hydrokinetic Renewable Energy 
        Market Acceleration Projects
   Topic Area 3: National Marine Renewable Energy Centers

    The National Marine Renewable Energy Research, Development, and 
Demonstration Centers would perform research on emerging marine and 
hydrokinetic technologies. The solicitation is seeking proposals for 
Centers that will be established and operated by university-led 
consortia, with an initial focus that includes characterizing water 
power technologies. DOE would provide up to $500,000 annually up to 
three years (with optional two year extension), subject to 
appropriations, with at least a 50 percent cost share from the chosen 
Center(s). The awards may be used for research and major equipment 
purchases, but not for infrastructure development (buildings, wave 
simulation facilities, etc.). DOE reserves the right to make one award, 
multiple awards, or no awards in any given topic area.
                               smart grid
    Question 1. Do you anticipate any problems or delays in your agency 
meeting its responsibilities in the area of encouraging infrastructure 
build out of smart grid?
    Answer. No. Our Fiscal Year 2009 budget contains a $5 million 
request for Smart Grid Development and Implementation activities. This 
will enable the Department to carry out its responsibilities without 
major problems or delays.
    Question 2. Have you made final decisions on the Smart Grid 
Advisory Committee and/or the task force?
    Answer. Establishment of the Smart Grid Task Force is another 
effort that OE is leading on the Department's behalf. Assistant 
Secretary Kolevar has appointed a Director for the Smart Grid Task 
Force and has invited participation from Department of Energy's Office 
of Energy Efficiency and Renewable Energy, as well as other Federal 
agencies, including, the Federal Energy Regulatory Commission, the 
National Institute of Standards and Technology, the U.S. Departments of 
Agriculture (Rural Utility Services), Homeland Security, and Defense, 
and the Environmental Protection Agency. The initial meeting of the 
Task Force is planned for March 2008.
                 power marketing administrations--wapa
    The FY 2009 budget request for the Western Area Power 
Administration assumes an unprecedented increase in advanced customer 
funding--over $116 million. In particular, the budget assumes $72.6 
million in advanced customer funding for WAPA's construction fund, 
while the Administration would fund only $1.8 million for construction.
    While Western's customers can and do provide some advanced funding, 
there is a limit to the amount they can fund. If customers cannot 
advance the funds, WAPA must curtail its construction program which, in 
turn, could impair the reliability of its power and transmission 
systems.
    Question 1. Why is the Administration assuming WAPA's customers can 
advance the necessary funding? What kind of analysis did OMB conduct to 
reach this conclusion?
    Answer. Based on our longstanding working relationships with our 
customers, the Western Area Power Administration believes that advance 
funding from our customers for construction and rehabilitation projects 
will allow for additional transmission system improvements to proceed, 
ultimately improving system reliability. In fact, many of Western's 
customers continue to be supportive of the advance funding concept for 
construction and rehabilitation (C&R) projects. Such funding allows the 
distribution of responsibility for project funding to those customers 
who directly benefit from Western's activities. Although Western's 
customers have not previously provided advanced funding at the levels 
assumed in the FY 2009 C&R budget, Western will continue to work with 
its customers during the year to achieve the level assumed in the 
budget request. Western will of course also continue to identify those 
C&R projects most critical to system reliability to allow for their 
completion on a priority and timely basis within the available amount 
of appropriations and customer advanced funding.
    Question 2. The FY 2009 budget request for the Western Area Power 
Administration assumes an unprecedented increase in advanced customer 
funding--over $116 million. In particular, the budget assumes $72.6 
million in advanced customer funding for WAPA's construction fund, 
while the Administration would fund only $1.8 million for construction.
    While Western's customers can and do provide some advanced funding, 
there is a limit to the amount they can fund. If customers cannot 
advance the funds, WAPA must curtail its construction program which, in 
turn, could impair the reliability of its power and transmission 
systems.
    Does Western need to have generic authority to borrow funds from 
either the Treasury, like BPA, or from private parties?
    Answer. Western does not have general authority to borrow from 
either the Treasury or private parties, and such borrowing authority is 
not needed. As discussed in the answer to the previous question, 
Western will continue to work with its customers to achieve $116 
million of customer advances assumed in the FY 2009 Budget request for 
its construction program and operating costs. However, the 
Administration supports an alternative approach to financing Western's 
operating costs that would reduce the need for a portion of customer 
advances. Included in the $116 million of assumed customer advances for 
FY 2009 are $44 million of customer advances for operating costs, 
including $12 million for purchase power and wheeling costs. The Budget 
also includes an appropriation request of $132 million for operating 
costs. However, A `net zero' appropriation for these annual operating 
costs would allow Western to meet its program requirements within its 
appropriation targets, with less reliance on customer advances for this 
purpose. Specifically, net zero appropriations would provide funding 
for Western's annual expenses and would be offset on a dollar-for-
dollar basis by receipts to result in an annual net appropriation of $0 
for Western's operating expenses. Western's other expenses, such as 
capital investments and the purchase power and wheeling program, would 
continue to be financed using current financing methods rather than net 
zero appropriations. Although the FY 2009 budget does not include a 
`net zero' proposal, the Administration continues to support this 
approach through the reclassification of receipts from mandatory to 
discretionary for Western's annual operating expenses--a necessary step 
to adopting net zero appropriations without adverse scoring 
implications for the appropriations bill. Reducing the need for 
customer advances for operating costs would provide customers with 
additional financial flexibility that could be helpful in funding 
customer advances for Western's construction costs.
             Energy Savings Performance Contracting (ESPC)
    Question 1. Has the Administration taken advantage of the permanent 
ESPC reauthorization in the Energy bill?
    Answer. Yes. DOE is promoting the use of ESPCs to implement energy 
management projects in Federal facilities government-wide as one way to 
help agencies meet energy efficiency goals set out in Executive Order 
and statute. The use of ESPCs, a form of performance-based contracting, 
is being tracked and encouraged by the Federal Energy Management 
Program (FEMP).
    FEMP's FY 2008 budget of $19.8 million includes $8.6 million to 
support Project Financing, which includes the following key ESPC-
related activities:

   ESPC Federal Financing Specialists and Federal Project 
        Facilitators to provide individual facility management and 
        procurement teams with ESPC, UESC, and other project 
        implementation guidance.
   Outreach and marketing programs to educate Federal agencies 
        on the costs and benefits of ESPCs and other third-party 
        financing tools.
   DOE's TEAM (Transformational Energy Action Management) 
        Initiative to ensure that all DOE facilities meet or exceed 
        EPACT, E.O. 13423, and EISA Federal energy management goals and 
        comply with EISA training requirements.
   DOE's efforts to franchise the TEAM initiative as a model 
        for other Federal agencies.

    In addition, DOE and DOD jointly chair the Interagency ESPC 
Steering Committee to identify and resolve issues inhibiting the 
implementation of ESPC-financed projects government wide.
    Question 2. What are your plans for engaging those agencies that 
are not currently using ESPCs to improve their energy performance?
    Answer. DOE's Federal Energy Management Program (FEMP) supports 
activities designed to encourage agencies to use ESPCs and Utility 
Energy Service Contracts (UESCs) to finance facility energy management 
projects to help achieve Executive Order and statutory energy 
efficiency goals.
    The Transformational Energy Action Management (TEAM) Initiative, 
established to implement the provisions of the Executive Order 13423 on 
an accelerated basis, is foremost among these efforts. DOE has 
formalized the TEAM Initiative planning, implementation, data 
collection, and analysis process within a Departmental order (Order 
430.2B) to institutionalize this effort. The Department is documenting 
an implementation model that can be adopted by other agencies and 
tailored to meet their facility and mission needs.
    Another important effort is the DOE Super ESPC contract, which 
promotes region and technology-specific energy service company (ESCO) 
contracts and is available for use by all Federal agencies. Agencies 
can take advantage of Super ESPC training provided by FEMP. Super ESPC 
workshops are taught in various DOE regions each year for agency 
acquisition teams embarking on energy improvement projects. Telecourses 
and FEMP-sponsored symposia are other ways that the Department informs 
Federal agencies about Super ESPCs.
    DOE is also using staff to assist other agencies. FEMP maintains a 
staff of four Federal Financing Specialists, and each is assigned to a 
region of the country to provide individual facilities and agency sites 
with guidance on the most appropriate financing tool to fund their 
energy management projects. FEMP also contracts Federal Project 
Facilitators who are experts in the field and guide agencies through 
the ESPC process. Project facilitators and others on FEMP's team 
provide consultation to agency customers on contracting and financing 
issues, measurement and verification, and technology and engineering 
issues.
    Question 3. As DOE moves forward with its ESPC solicitation, does 
the Department share the Defense Department's goal to include one or 
more small businesses as a prime contractors [sic]?
    Answer. DOE is very interested in small business participation in 
the Energy Savings Performance Contracting (ESPC) program and all of 
its other programs as well. The ESPC solicitation, issued on October 
11, 2007, contains language to promote small business plans and did not 
restrict any business from competing for an award of a contract. DOE 
will ensure that contractors are selected based upon the merits of 
their proposals (a process that is required by law and DOE policy). 
DOE's approach to this procurement is consistent with, and has been 
reviewed by, the United States Small Business Administration.
                   futuregen request for information
    In restructuring FutureGen, DOE has issued a Request for 
Information with draft project guidance, some of which appear to have 
not been very carefully developed. At the end of the 109th Congress and 
during the 110th, the President has signed into law two pieces of 
legislation to amend Section 1307 of EPACT 05 and Section 402 of EPACT 
05 so that sulfur removal criteria are based on a pounds per BTU 
measurement rather than a percentage.
    Question 4. Why does your Request for Information not account for 
this important change?
    Answer. The FutureGen Funding Opportunity Announcement, which will 
be released after comments to the RFI are addressed, will include a 
pounds per BTU measurement for the sulfur removal criteria.
                       carbon capture and storage
    In attempting to expedite demonstration of carbon sequestration's 
viability, DOE is poised to drill for and release naturally occurring 
CO2 in one place only to re-inject it at another location. 
We want to reduce man-made CO2 emissions, but our ability to 
do so hinges upon whether or not CO2 can in fact be 
economically captured at industrial facilities in the first place.
    Question 5. Why does the Department not wait until plants capable 
of capturing CO2 are successfully demonstrated before 
devoting resources to the injection of CO2?
    Answer. The Department has efforts underway to successfully 
demonstrate CO2 capture and to reduce its cost while 
simultaneously working to demonstrate storage of CO2 in deep 
geologic formations. Waiting for plants capable of economically 
capturing CO2 to be successfully demonstrated and not 
simultaneously focusing on CO2 storage will significantly 
delay the entire carbon capture and storage effort. Plants that can 
capture large volumes of CO2 will not be demonstrated for 
several years, which will delay critical near-term advancements in CCS 
to prove successful. Studies are being done to determine the extent to 
which CO2 moves within the geologic formation, and what 
physical and chemical changes occur to such formations when 
CO2 is injected. This information is key to developing 
technologies and processes that could ensure that sequestration will 
not impair the geologic integrity of an underground formation and that 
CO2 storage is secure and environmentally acceptable. 
Demonstrating that geologic storage of CO2 can be done 
safely and effectively will advance public acceptance of CCS technology 
for mitigating greenhouse gas emissions. Waiting for large volumes of 
CO2 to be available from commercial plants before working on 
the remaining research, development, and demonstration of storage 
technology will cause significant delays in the commercial deployment 
of CCS.
    Successfully demonstrating capture of CO2 without having 
the ability to store the significant volumes of CO2 that 
will be captured will not help in reducing CO2 emissions. 
Parallel paths of research and demonstration of CO2 capture 
along with that of research in geologic formations to understand the 
behavior of CO2, is the best course to advance CCS 
technologies.
                    biomass/renewable fuels standard
    I am pleased that Biomass and Biorefinery R&D is increased by 13.5 
percent ($26.8 million) to $225 million. The program includes feedstock 
resource assessment and infrastructure development, conversion R&D, 
commercial scale biorefinery demonstration projects, and addressing 
barriers to biofuels distribution and end use.
    Question 1. Will the increased program allow the department to 
expand work on alternative feedstocks available in different regions of 
the nation? I am particularly interested to know if greater research 
will be allocated to develop algae-based biofuels.
    Answer. DOE is committed to targeting its R&D as effectively as 
possible to develop cost effective, clean renewable fuels. To that end, 
we are investigating the potential of a wide range of feedstocks, 
including algae, to produce alternatives to petroleum-based fuels. The 
Department has discussed ongoing algae research with other Federal 
Agencies, including the Environmental Protection Agency, and the 
Departments of Defense and Agriculture.
    Currently, biodiesel produced from oilseed crops such as soybeans 
is commercially produced on arable land while algae are still in the 
research and development stage. Due to their potential high yields, 
small land requirements, and their ability to absorb vast amounts of 
CO2 (in co-production with coal-fired plants, for example, 
algae may warrant further investigation even though they will not 
contribute to our fuel mix in the short-term.
    Question 2. Will this increased funding support the establishment 
of additional bioenergy centers, as authorized in the Energy Policy Act 
of 2007?
    Answer. The increased funding for EERE's Biomass and Biorefinery 
R&D will not support the establishment of additional Bioenergy Research 
Centers in the Office of Science.
    Congress appropriated $75 million ($25 million per BRC) for the 
Office of Science in FY 2008 to operate these three Centers, and the 
President's FY 2009 Budget Request includes $75 million to support 
their continued operation. The Department's Office of Science does not 
plan to issue a FOA requesting applications for additional Bioenergy 
Research Centers, but the Department does intend to continue supporting 
fundamental and applied bioenergy research through standard merit-
reviewed procurement processes. For example, the Department's Office of 
Science has issued a joint USDA-DOE program solicitation for research 
on plant feedstock genomics for bioenergy and is strongly encouraging 
proposals not only from individual investigators but also from 
interdisciplinary teams comprising a range of expertise. Pending the 
outcome of the merit review process, awards are expected to be made in 
FY 2008.
    The additional funds requested for EERE's Biomass Program will be 
directed to the already announced pilot and commercial-scale 
biorefineries.
                              mox facility
    Question 1. Can you tell me how the program will be impacted as a 
result of the deep cuts imposed by the FY'08 bill and how this will 
impact the cost and schedule?
    Answer. The total project cost to design, construct, and complete 
cold start-up activities for the MOX Fuel Fabrication Facility is $4.8 
billion, including contingency and escalation. This estimate assumed 
Congressional appropriation of the President's FY2008 and outyear 
budget requests without significant reduction or restriction. The 
Department currently is evaluating the potential effects of the 
Consolidated Appropriations Act 2008, on the cost and schedule for the 
MOX facility, while continuing to explore ways to reduce delays. 
However, due to the funding reductions contained in the Consolidated 
Appropriations Act, 2008, we are revising the cost and schedule 
baseline for the MOX Fuel Fabrication Facility. Although DOE is 
committed to constructing and operating the MOX facility as 
expeditiously as possible and will use best efforts to mitigate any 
potential delays, we expect that the revised baseline, when completed 
and independently validated, may extend the MOX construction schedule 
and increase the total project cost.
    Question 2. Can you please explain the challenges and costs the 
Department is facing in transferring this activity from the Office of 
Nuclear Nonproliferation to the Office of Nuclear Energy?
    Answer. As a threshold matter, it does not appear that the 
Consolidated Appropriations Act, 2008, actually transferred the MOX 
program from NNSA to the Office of Nuclear Energy, and there is a 
significant question as to whether the Secretary has the legal ability 
to effectuate the transfer contemplated by the accompanying committee 
report. This circumstance is described more completely in the attached 
memorandum by the General Counsel dated February 22, 2008.
    Furthermore, dividing the responsibilities for and the funding of 
three inter-related projects (the MOX Fuel Fabrication Facility, the 
Pit Disassembly and Conversion Facility, and the Waste Solidification 
Building) complicates effective project management, and increases 
program risks, including cost and schedule risks. We believe that it is 
not an optimum way to fund or manage these projects.
      
    
    
    
    
    
    
                      nuclear waste/yucca mountain
    The 2009 Budget Request indicates that, despite a funding cut in 
2008, the Nuclear Waste program still plans to file a license 
application for the Yucca Mountain repository this summer. DOE 
estimates that between $1.5 and $2 billion per year will be required to 
open the repository by 2017.
    Question 3. However, if the funding for the program continues at 
the current level, what is the projected opening date for the 
repository?
    Answer. The Department is unable to project an opening date for the 
repository if the funding for the Program were to continue at the 2008 
funding level. The Administration has proposed funding reform 
legislation for the Program to facilitate more direct access to Nuclear 
Waste Fund annual receipts. Until funding reform is enacted, the 
Department will not be able to project a credible opening date for the 
repository.
    Question 1. The Federal Government is on the hook for paying for 
on-site storage costs for nuclear plants as a result of its failure to 
meet its contractual commitment to begin moving spent fuel in 1998. 
Previously, DOE estimated that the government's liability would be $7 
billion IF Yucca Mountain were to open in 2017 and $11 billion if it 
were to open in 2020. So, at that point, the liability is growing at 
$1.3 billion per year. This is money that is paid out directly from the 
judgment fund.
    Has DOE calculated the cost to the taxpayer if the Government 
doesn't move spent fuel by 2030, 2040, 2050, etc?
    Answer. No. The Department has not calculated these costs. The 
Department notes, however, that calculation of potential costs is a 
complex matter and that it cannot be assumed that liability will grow 
at $1.3 billion or more per year in the period after 2020. On average, 
the liability will grow by $500 million annually.
    Question 2. In the past, DOE has estimated that, if it starts 
moving spent fuel in 2020, it would take 20 years to work off the 
``backlog'' of spent fuel that it is contractually obligated to take. 
Have you done the calculations on how long it would take if spent fuel 
begins to move in 2030, 2040, 2050 etc. Is it possible that, if the 
government starts taking fuel late enough, that it may be virtually 
impossible to ever catch up?
    Answer. The Department is contractually obligated to accept all the 
spent nuclear fuel generated by the commercial nuclear power reactors 
covered by Standard Contracts for disposal of spent nuclear fuel. As of 
the end of 2007, the Department estimates that the inventory of spent 
nuclear fuel discharged from these reactors was approximately 58,000 
MTHM. The current fleet of reactors will continue to discharge about 
2,000 MTHM of spent nuclear fuel each year. If all the 104 operating 
reactors receive and utilize a 20 year license extension, the 
Department estimates that, at the end of operations, the current 
nuclear power reactor fleet will have discharged about 130,000 MTHM of 
spent nuclear fuel. When fully operational, the Yucca Mountain 
repository is expected to be able to receive about 3,000 MTHM annually. 
Accordingly, assuming the statutory limit of 70,000 MTHM is lifted, it 
would take about 40 years from the time it begins operation for the 
Yucca Mountain repository to receive the approximately 130,000 MTHM of 
spent nuclear fuel that will have been generated by the nuclear power 
reactors covered by the Standard Contract.
    Question 1. Current law imposes a 70,000 metric ton limit on spent 
fuel that can be placed in Yucca Mountain. Even if Yucca Mountain were 
to open, by 2010, there will be enough spent fuel in the U.S. to fill 
Yucca to its statutory capacity. Current law also requires DOE to start 
thinking about a second repository.
    Are you doing this, and are you considering the uses of recycling 
technologies to reduce the need for a second repository?
    Answer. The Department by statute (P.L. 102-486) is preparing the 
Second Repository Report that will assess the need for a second 
repository and make recommendations for action. The Department expects 
to issue this report to Congress this summer. The Department has stated 
that if the 70,000 MTHM statutory limit were lifted legislatively, a 
second repository would not be needed for a significant amount of time. 
The Department also supports the exploration of the recycling 
technologies which could reduce the volume and radiotoxicity of the 
amount of spent nuclear fuel destined for permanent disposal.
    Question 2. If Yucca Mountain doesn't open, what happens to the 
defense waste currently stored at Hanford, Savannah River and other DOE 
sites?
    Answer. If Yucca Mountain does not open, the defense waste 
currently stored at Hanford, Savannah River and other Department of 
Energy sites will remain at those sites until a final disposition path 
is determined.
    Question 3. Please explain your plan for deploying the $38.5 
billion in loan guarantees and how this can change our energy markets.
    Answer. The Department's authority for loan guarantees to be issued 
under Title XVII of the Energy Policy Act of 2005 (EPAct 2005) in 
FY2008 is established in the Consolidated Appropriations Act, 2008 
(Act). The Act itself does not set a dollar limit on the authority of 
DOE to issue loan guarantees. However, the Committee Report 
accompanying the Act indicated that a total of $38.5 billion of loan 
guarantees could be extended on or before the end of FY2009.
    The Act requires that before executing a new solicitation, DOE must 
submit to the Committees on Appropriations an implementation plan that 
defines the proposed award levels and eligible technologies, and wait 
at least 45 days. The Department plans to submit an implementation 
plan, pursuant to this requirement, as soon as possible.
    Consistent with the statutory purposes of Title XVII of EPAct 2005, 
the loan guarantees to be issued there under are intended to help 
change our energy markets by encouraging early commercialization in the 
United States of new or significantly improved technologies that avoid, 
reduce, or sequester air pollutants or anthropogenic emissions of 
greenhouse gases. The Department is moving forward in this regard with 
each of 16 projects invited to submit full loan guarantee applications 
in October 2007 in response to DOE's initial solicitation in 2006. The 
Department is working to ensure that the first loan guarantee 
agreements will be executed before the end of 2008.
                       energy storage device r&d
    I was pleased to see the request for the vehicle technologies 
program increases to $221.06 million for vehicle technologies R&D, an 
increase of $8.04 million from the FY 2008. The budget summary 
indicates this will focus core R&D activities to support accelerated 
development of plug-in hybrids, including development of lithium ion 
batteries.
    I am concerned that the Department is focusing so narrowly on 
lithium ion batteries. Recent advances in lead acid battery technology, 
for example, may make this chemistry a viable candidate for vehicle 
applications.
    Question 4. Does the Department have any plans to review progress 
in other battery chemistries, and possibly expand its research 
portfolio if appropriate?
    Answer. DOE routinely benchmarks state-of-the-art battery 
technology to gauge performance and maturity, and guide R&D planning. 
Benchmark testing of emerging technologies is important for remaining 
abreast of the latest industry developments. DOE regularly purchases 
advanced battery hardware (cells and modules) and independently tests 
these battery systems against the most applicable advanced vehicle 
battery performance targets. In addition, DOE provides funding support 
(through the Advanced Lead Acid Battery Consortium, ALABC) for support 
of advanced lead acid batteries technology development.
                            methane hydrates
    Question 5. Could you please clarify the remarks you made during 
the hearing regarding the Department's support for methane hydrate 
research?
    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 support 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 Interior; the 
National Oceanic and Atmospheric Administration (NOAA); the National 
Science Foundation; and the Naval Research Laboratory.
                      power plants--cooling towers
    There has been concern about how the federal government may deal 
with the potential retrofit of cooling towers at power plants that are 
currently equipped with once-through cooling technologies. As you may 
know, EPA is currently engaged in a rulemaking evaluating appropriate 
standards associated with cooling water intake structures at power 
plants.
    Question 6. Please provide an assessment of the reliability and 
cost impacts that could likely result from a requirement to install 
cooling towers or similar systems at all power plants.
    Answer. There are very significant potential impacts associated 
with retrofitting the 500-plus existing plants using once-through 
cooling facilities ranging from the capital cost of the retrofit to the 
lost power during the conversion to the permanent energy capacity 
reductions (``penalties''). The Department of Energy has not performed 
recent detailed studies on this issue; The estimates for capacity 
reductions (or ``penalties'') range from around 3 percent to 13 percent 
depending on site conditions and the cooling tower technology selected. 
Closed-cycle cooling tower technology can result in an energy penalty 
of 8.8 to 13.1 percent over once-through cooling since the cooling 
water is warmer, and pumps and fans associated with cooling towers 
require energy to operate. For wet cooling towers, the peak summer 
energy penalty ranges from 2.4% to 4.0% and wet cooling towers are not 
practical where water consumption is a concern.
    Older, less economical facilities, especially those used for 
supplying peak power demand, would likely not be able to bear the cost 
of retrofits and be forced to retire. There are also some facilities 
that it will not be possible to retrofit. These include facilities that 
simply do not have adequate space to install closed-cycle cooling 
systems or may not be able to obtain permits for such systems due to 
local laws and regulations.
                      Questions From Senator Akaka
                            dnn budget cuts
    I see that a number of important nuclear security programs have had 
their budgets cut. For example, The Defense Nuclear Nonproliferation 
appropriation has been reduced by $88.9 million as compared to FY 2008. 
However, many experts agree that the threat of nuclear and radiological 
terrorism continues to increase, not decrease. In fact, the Director of 
National Intelligence, Michael McConnell, stated earlier this week that 
``al-Qaida and other terrorist groups are attempting to acquire 
chemical, biological, radiological, and nuclear weapons and materials.
    Question 1. Given this looming threat, why are these programs being 
cut? Many of these programs have been funded for nearly seven years or 
more.
    Answer. The Department remains committed to deterring, detecting, 
and preventing the spread weapons of mass destruction (WMD) material 
and technology around the globe. The appearance of a large reduction in 
this program in 2009 results from two actions taken by the Congress in 
FY2008: the appropriation transferred funding of about $600 million in 
construction activities (the MOX project and the Pit Disassembly and 
Conversion Facility) out of Defense Nuclear Nonproliferation to other 
DOE programs, and the Congress added over $480 million in additional FY 
2008 funding to the remaining programs in the Defense Nuclear 
Nonproliferation account.
    The FY 2008 and FY 2009 programs will continue the Administration's 
acceleration of nonproliferation efforts as noted in four specific 
exampled. 1) We have accelerated our nuclear materials security work in 
Russia by two years, completing 85% of the Bratislava work with the 
balance of sites to be complete in calendar year 2008. 2) We have 
signed an agreement with Russia to accelerate the completion of all 
land border crossings by 6 years. 3) We are hopeful that we will be 
able to accelerate our Elimination of Weapons Grade Plutonium Producing 
Reactors work in Russia by one year. 4) We have accelerated our work to 
convert or shutdown research reactors using Highly Enriched Uranium. 
Moreover, our strong commitment to nonproliferation leads us to seek 
other ways to continue acceleration in these programs.
    Question 2. What kinds of benchmarks do you use to measure success 
in them? Can you do more with less, and, if so how?
    Answer. We use different benchmarks for each of our programs, 
because their missions vary widely. Our mission is to detect, secure 
and dispose of dangerous nuclear and radiological materials around the 
globe. Recognizing the global and evolving nature of the 
nonproliferation threat, we have expanded our work to over 100 
countries. This includes work to secure nuclear materials, such as in 
Russia, where we have secured 85% of nuclear weapons sites and concern, 
and across the globe where we have repatriated over 1,730 kgs of highly 
enriched uranium (enough for nearly 70 nuclear weapons). We have 
secured over 600 vulnerable radiological sites overseas. We worked to 
dismantle Libya's program, and are continuing to oversee the 
disablement of North Korea's nuclear program. We have trained over 
5,600 domestic and nearly 8,000 international officials on export 
controls and WMD identification, and trained over 1,000 foreign nuclear 
facility operators on nuclear safeguards. We have also worked to 
accelerate the shutdown of 3 Russian plutonium production reactors, 
which will prevent the production of about a ton and a half of weapons 
grade plutonium annually.
    To answer the second question, we also measure our success by how 
quickly and smartly we undertake our global mission to reduce and 
eliminate these dangerous nuclear and radiological materials. To that 
end, we will continue to accelerate our nonproliferation efforts, 
emphasize cost-sharing and sustainability of these efforts with 
international partners, and strengthen our project management.
                    Questions From Senator Barrasso
    The Cooperative Research and Development program within the Office 
of Fossil Energy supports activities of federal, industry, and research 
institute endeavors. It is a joint program with the Western Research 
Institute and the University of North Dakota. Your budget explanation 
suggests this program can compete for other grants. I, too, am 
confident that this program can, will, and has successfully competed 
for other grants. That fact does not take away from its core mission 
historically supported by Congress for many years. By all accounts, 
this is a success story in terms of research, in terms of leveraging 
private funds, and in terms of obtaining commercial patents and 
technologies.
    Question 1a. What Department metrics of success did DOE use to 
judge this program?
    Answer. Based on past successful performance, the Department 
anticipates that these centers would compete successfully for Fossil 
Energy funding through the competitive solicitation process.
    Question 1b. The Cooperative Research and Development program 
within the Office of Fossil Energy supports activities of federal, 
industry, and research institute endeavors. It is a joint program with 
the Western Research Institute and the University of North Dakota. Your 
budget explanation suggests this program can compete for other grants. 
I, too, am confident that this program can, will, and has successfully 
competed for other grants. That fact does not take away from its core 
mission historically supported by Congress for many years. By all 
accounts, this is a success story in terms of research, in terms of 
leveraging private funds, and in terms of obtaining commercial patents 
and technologies.
    On what assessment areas did the Cooperative Research and 
Development program fail to perform adequately against other Department 
of Energy funding priorities?
    Answer. The Cooperative R&D program did not fail to perform 
adequately against any DOE funding priorities. However, since this 
program does not compete for funding, it is not considered the best way 
to approach DOE's funding priorities.
    Question 1c. The Cooperative Research and Development program 
within the Office of Fossil Energy supports activities of federal, 
industry, and research institute endeavors. It is a joint program with 
the Western Research Institute and the University of North Dakota. Your 
budget explanation suggests this program can compete for other grants. 
I, too, am confident that this program can, will, and has successfully 
competed for other grants. That fact does not take away from its core 
mission historically supported by Congress for many years. By all 
accounts, this is a success story in terms of research, in terms of 
leveraging private funds, and in terms of obtaining commercial patents 
and technologies.
    What is the rationale for discontinuing this longstanding program?
    Answer. DOE has not requested funding for several years and this is 
strictly a matter of requiring these institutions to compete for any 
funding they receive in order to ensure that the best performers are 
selected. The Western Research Institute (WRI) and University of North 
Dakota Energy and Environment Research Center (UNDEERC) organizations 
are welcome to bid on all solicitations issued by DOE. Title 10 Section 
600.6 of the Code of Federal Regulations states that DOE shall use 
competition to the maximum amount feasible in its solicitations for 
financial assistance projects.
    Question 1d. The Cooperative Research and Development program 
within the Office of Fossil Energy supports activities of federal, 
industry, and research institute endeavors. It is a joint program with 
the Western Research Institute and the University of North Dakota. Your 
budget explanation suggests this program can compete for other grants. 
I, too, am confident that this program can, will, and has successfully 
competed for other grants. That fact does not take away from its core 
mission historically supported by Congress for many years. By all 
accounts, this is a success story in terms of research, in terms of 
leveraging private funds, and in terms of obtaining commercial patents 
and technologies.
    What program or programs did DOE select to fund in lieu of the 
Cooperative Research and Development program?
    Answer. DOE did not select to fund any programs in lieu of the 
Cooperative R&D program. All funding requested in our FY 2009 budget 
was based on programmatic priorities. The performers in these programs 
will be selected on a competitive basis. Should the Western Research 
Institute (WRI) and the University of North Dakota Energy and 
Environmental Research Center (UNDEERC) elect to submit proposals on 
any activities, then they will be judged fairly with all other 
performers.
    Question 2. Will DOE be submitting a reprogramming request to 
Congress for your restructured FutureGen Program?
    Answer. On June 9, 2008, the President forwarded to Congress a 
language amendment that would revise appropriation language to the 
Fossil Energy Research & Development appropriation, allowing the 
Department to revise the approach used to fund the restructured 
FutureGen program. Under this revised approach, the amendment would 
eliminate the requirement that projects funded in the FutureGen program 
have the Federal share of project funding appropriated in full at the 
time of selection. This provision would provide the Secretary of Energy 
with the discretion to fully fund FutureGen projects or to fund them 
incrementally. If the Department of Energy decides to fund them 
incrementally, the Department's program regulations and contracts will 
ensure that the Department does not incur obligations in excess of the 
appropriated amounts that are available to cover those obligations. In 
light of the budget amendment there would be no need to reprogram 
funds.
    Question 3. What is the content and timing of any and all pending 
DOE plans to support carbon sequestration research or demonstration 
projects in Montana or Wyoming? a. What is the time line for any plans 
identified in the above question?
    Answer. The Department of Energy has seven Regional Partnerships 
that are undertaking field tests for CO2 storage across the 
country. One of the Regional Partnerships, Big Sky, is managed by the 
Montana State University. The Big Sky Regional Partnership includes the 
states of Montana, Wyoming, Idaho, Washington, Oregon, and South Dakota 
and has over 60 partners. Big Sky has proposed an effort for a large-
scale sequestration test in its Partnership area.
    The Zero Emission Research and Technology Center, managed by the 
Montana State University and funded by the Department of Energy, is 
also conducting collaborative research in carbon sequestration. This 
research is focused on understanding the basic science of underground 
(geologic) carbon dioxide storage to mitigate greenhouse gasses from 
fossil fuel use and to develop technologies that can ensure the safety 
and reliability of that storage.
    Large-scale sequestration tests may be awarded in FY 2008, 
depending on the results of a scientific needs assessment being 
conducted in a March 2008 technical peer review and the ability of the 
project proposal to meet those needs.
    Question 4. The DOE budget proposal asks for an increase of funding 
for Yucca Mountain and an indication that DOE will be submitting a 
license to the Nuclear Regulatory Commission to construct a repository. 
What level of federal funds has been expended to date on this effort?
    Answer. Approximately $10 billion has been expended on the Program 
since its inception in 1983; $7 billion of the total was funded by the 
Nuclear Waste Fund and $3 billion by appropriations in the Defense 
Nuclear Waste Disposal account.
    Question 4a. The budget also indicates that given funding levels, a 
``development of a credible schedule for the program is not possible.'' 
Using the best available data, how long are Americans, consumers, and 
industry going to have to wait to obtain a resolution to the storage of 
nuclear waste?
    Answer. The Nuclear Waste Policy Act, as amended, authorizes the 
Department of Energy to develop a permanent repository for the disposal 
of the Nation's spent nuclear fuel and high-level radioactive waste. 
Last year the Department provided a schedule and supporting funding 
profile that would have had the repository at Yucca Mountain commence 
operations in 2017. Due to Congressional reductions in the funding for 
the Program in 2008, however, that schedule is no longer viable. Once 
Congressional action is taken on funding reform proposed by the 
Administration, which would provide consistent and sufficient funding 
for the Program, the Department would be able to provide a credible 
schedule to begin operations at Yucca Mountain.
    Question 5. What is DOE's long-term plan to extend the operation 
and production of the Rocky Mountain Oilfield Testing Center and ensure 
its continued success as a resource to small, independent oil and gas 
companies that cannot afford to conduct research larger companies can, 
particularly if its production budget continues to decline?
    Answer. DOE retains the Naval Petroleum Reserve No. 3 (NPR-3) in 
Wyoming (Teapot Dome field). The NPR-3 Program's primary focus has been 
to apply conventional oil field management and operations to produce 
the stripper field to its economic limit. The President must authorize 
continued production every three years, with production currently 
authorized through April 2009. Co-located with NPR-3, the Rocky 
Mountain Oilfield Testing Center (RMOTC) provides opportunities for 
field-testing and demonstration of upstream oil and gas technologies, 
environmental products, and energy efficient, geothermal, and other 
renewable technologies as they relate to oil and gas operations. 
Funding of the overall program has been relatively flat for the past 
three fiscal years and the FY 2009 request is in line with past 
appropriations.
                    Questions From Senator Cantwell
                               smart grid
    Question 1. Mr. Secretary, as you know, our nation's electricity 
grid is vital to our economy and way of life. However, it currently 
uses outmoded technology which cannot record and communicate valuable 
information on conditions of supply, consumer loads, or system 
performance. This means our grid is less reliable than it could be and 
requires greater generation resources than it should. Modern technology 
is available that could provide significant efficiency savings, reduce 
peak power demands, and save tens to hundreds of billions in outage 
costs and avoided generation investments. For example, new technologies 
could allow appliances to automatically avoid costly demand periods and 
consumers to schedule their power consumption around periods when the 
grid is stressed. In order to help facilitate the national transition 
toward development and use of smart grid technologies, I championed 
provisions in the Energy Independence and Security Act of 2007 that 
provide DOE authority and guidance for moving ahead in creating a more 
flexible, more reliable and responsive U.S. electricity grid. These 
included research, development and demonstration programs; studies and 
reports on implementation; and a grant program for smart grid 
technology investment.
    Although it appears the Office of Electricity Delivery and Energy 
Reliability has established goals to lead national efforts to modernize 
the electric grid, enhance security and reliability of the energy 
infrastructure, and facilitate recovery from disruptions to the energy 
supply, I am concerned that this FY09 budget request may hinder the DOE 
from accomplishing necessary work toward these important goals.
    Mr. Secretary, after review of the Fiscal Year 2009 budget it is 
not apparent which program will be managing the DOE's Smart Grid 
obligations under the Energy Independence and Security Act of 2007. It 
is also noted that the budget of the Office of Electricity Delivery and 
Energy Reliability (OE) has been reduced $4.6 million due mainly to 
zero funds requested to support congressionally directed activities. 
Can you please tell me how much it will cost OE to implement the smart 
grid provisions of the Energy Independence and Security Act of 2007, 
which program will have management oversight, and why this information 
was not included in the Department's FY09 budget request?
    Mr. Secretary, the President has only requested $5 million for 
Smart Grid projects in the FY 2009 budget to complete several smart 
grid initiatives such as implementation at the utility and state 
levels, development of a smart grid architecture and framework, and 
better integration of the smart grid and plug-in hybrid electric 
vehicles (PHEVs). Can you please discuss why the funding requests in 
this area have continued to decrease over past years? Has the 
Department completed and achieved its goals in this area? If not, what 
are the future priorities?
    Answer. The Office of Electricity Delivery and Energy Reliability 
(OE), under the leadership of Assistant Secretary Kolevar, has the 
responsibility to carry out the Smart Grid provisions (Title XIII) of 
the Energy Independence and Security Act of 2007.
    Our Fiscal Year 2008 appropriation and our Fiscal Year 2009 request 
do contain a variety of activities that are related to the development 
of Smart Grid systems which include sensors, control systems, and 
communications strategies that provide real-time information to grid 
operators. Therefore, OE provides far more funding in our Fiscal Year 
2009 request devoted to smart-grid related activities than is 
immediately apparent. For example, the Visualization and Controls 
subprogram contains several Smart Grid-related activities, including 
those aimed at wide area measurement, real-time data and analysis, and 
applications software for automatic grid protection and control.
    In addition, our Energy Storage and Power Electronics subprogram 
also contains Smart Grid-related technologies such as development and 
testing of power electronics devices, which are crucial for faster 
response times, and greater precision and control, which are essential 
for Smart Grid systems.
    Finally, there are other activities in our Renewable and 
Distributed Systems Integration subprogram that are relevant for the 
advancement of Smart Grid systems. For example, work to advance the 
integration of renewable electric systems, energy storage, energy 
efficiency, and demand response is planned to address issues in 
interoperability and the optimization of distributed systems, topics 
which are vital in advancing Smart Grid technologies, practices, and 
services.
    Question 2. Mr. Secretary, Section 1303 of the Energy Independence 
and Security Act of 2007, requires that the Department establish a 
Smart Grid Advisory Committee. Given the 90-day time frame stipulated 
in the energy bill, what progress has your office made in establishing 
both the Smart Grid Advisory Committee and the Smart Grid Task Force?
    Answer. The Energy Independence and Security Act of 2007 contains 
two provisions which call for the creation of advisory committees to 
guide our activities in electric power. As you point out, Section 1303 
calls for the creation of a Smart Grid Advisory Committee. In addition, 
Section 641 calls for the creation of an Energy Storage Advisory 
Council. Both are to operate under the provisions of the Federal 
Advisory Committee Act. The Office of Electricity Delivery and Energy 
Reliability (OE) is moving swiftly to meet both the Section 1303 and 
641 requirements. We have decided to combine the groups under an 
Electricity Advisory Committee (EAC), which will tackle the legislated 
duties of the Section 641 and 1303 groups, as well as take on other 
matters for which the Department needs advice from outside experts. The 
formal announcement of the EAC was made on February 20, 2008.
    Question 3. Mr. Secretary, how much communication has your office 
had with the Federal Energy Regulation Commission (FERC) regarding the 
establishment of the Smart Grid Regional Demonstration Initiative? Have 
there been any discussions, either internally or with other government/
industry entities as to where these demonstration projects would occur?
    Answer. Our communication with FERC to date has focused on 
assembling the Smart Grid Task Force. The 2009 Budget request doesn't 
include funds for this initiative, nor were any appropriated in the 
Fiscal Year 2008 budget, which we are currently in the process of 
carrying out.
    Nevertheless, the Office of Electricity Delivery and Energy 
Reliability has been actively engaged in the development of Smart Grid 
and related technologies, practices, and services for many years. The 
Department has supported the development of in-house expertise in Smart 
Grid systems, and also at the national laboratories, universities, and 
consulting firms. Informal discussions about strategies for advancing 
Smart Grid technologies, through research, development, demonstration, 
analytical, and technology transfer activities, have been occurring for 
several years.
    Question 4. Mr. Secretary, is your office aware of the National 
Institute of Standards and Technology (NIST) efforts to coordinate the 
development of a framework that includes protocols and model standards 
for information management to achieve interoperability of smart grid 
devices and systems?
    Answer. Yes, and the Office of Electricity Delivery and Energy 
Reliability has recently held several meetings with appropriate 
personnel at NIST to discuss how to coordinate our efforts. Section 
1303 of the Energy Independence and Security Act of 2007 calls for the 
establishment of a Federal Smart Grid Task Force. Assistant Secretary 
Kevin Kolevar has formally invited NIST and several other Federal 
Departments and agencies to participate on this task force. One of the 
top priorities of the task force is to coordinate activities across the 
Federal Government to assist NIST in the development of a framework 
that includes protocols and model standards for information management 
to achieve interoperability of Smart Grid devices and systems. The 
initial meeting of the Smart Grid Task Force is scheduled for March 
2008.
    Question 5. Mr. Secretary, would you please describe any progress 
made (or reasons why there has been no progress made) in establishing 
the Smart Grid Investment Matching Grant Program?
    Answer. Defining both the scope and the procedures necessary to 
implement the Smart Grid Investment Matching Grant Program will be one 
of the primary tasks that the Smart Grid Task Force will be charged 
with completing over the next several months. The Office of Electricity 
Delivery and Energy Reliability is moving swiftly to assemble this Task 
Force. Assistant Secretary Kolevar has appointed a Director for the 
Smart Grid Task Force, and the task force includes participation from 
DOE's Office of Energy Efficiency and Renewable Energy, as well as 
other Federal agencies, including the Federal Energy Regulatory 
Commission, the National Institute of Standards and Technology, the 
U.S. Departments of Agriculture (Rural Utility Services), Homeland 
Security, and Department of Defense, and the Environmental Protection 
Agency. The initial meeting of the Task Force is planned for March 
2008.
    No funds were requested in the 2009 Budget for the Smart Grid 
Investment Matching Grant Program. However the budget does include $5 
million for Smart Grid Development and Implementation which will focus 
on several activities, such as projects for Smart Grid Advancement, the 
development of Enabling Functions and Services, the development of 
Smart Grid Architecture and Standards, and System Simulation and 
Analysis efforts.
    Question 6. Mr. Secretary, DOE and the Pacific Northwest National 
Laboratory recently published results of a year-long study in the 
Seattle area regarding the benefits of smart grid technology. The study 
showed that consumers saved nearly 10% on their electricity bills by 
using internet-connected thermostats and other smart appliances. Are 
there any plans to build upon the success and the findings of this 
study? What kinds of funding and/or programs would be helpful to do 
this?
    Answer. We are very encouraged by the results of the Pacific 
Northwest National Laboratory study and will continue activities in 
this fiscal year. Additionally, in our Fiscal Year 2009 budget request, 
the Department included $5 million for Smart Grid Development and 
Implementation which will focus on several activities. One involves 
projects for Smart Grid Advancement, including development of a 
technology roadmap, and definition of performance metrics. A second 
involves Enabling Functions and Services which focuses on the Smart 
Grid needs of building the electric infrastructure to support plug-in 
hybrid electric vehicles. A third is furthering the development of 
Smart Grid Architecture and Standards, which will involve a variety of 
stakeholder outreach activities including an ``interoperability 
forum,'' which will provide an opportunity for developers to meet and 
share lessons learned about the relative merits of alternative smart 
grid technologies, practices, and services. And fourth is System 
Simulation and Analysis which includes analysis of life-cycle system 
costs and benefits and the development of simulation tools for modeling 
Smart Grid applications at the transmission, substation, and 
distribution feeder levels.
    Question 7. Mr. Secretary, in discussing the challenges posed by 
the implementation of a national ``Smart Grid,'' would you say that a 
critical first-order need is the development of new algorithms for grid 
management to replace the nearly 40-year old ones that are now the 
backbone of grid management and control? And would you concur that a 
modern grid physical infrastructure will be seriously handicapped in 
it's functioning without first designing and incorporating the software 
necessary to manage modern grid system capabilities and demands? And 
finally, does the Department have as a priority task the development of 
such software and control algorithms?
    Answer. As you may know, the Office of Electricity Delivery and 
Energy Reliability (OE) has been actively engaged in the development of 
Smart Grid and related technologies, practices, and services for many 
years. The Department has supported the development of in-house 
expertise in Smart Grid systems, and also at the National laboratories, 
universities, and consulting firms. In addition, the Department 
conducted technology development, analysis, and technology transfer 
activities related to smart grid systems. As a result of the 
preliminary work that we have conducted so far, we have determined that 
there are a number of ``first order'' needs involved in addressing the 
challenges posed by the implementation of a national ``Smart Grid.'' We 
agree with you that new algorithms for grid management is one of the 
top priority needs.
    Smart Grid systems can be applied to both electric transmission and 
distribution. Our Fiscal Year 2009 budget submission contains a $25.3 
million request for Visualization and Controls, which is a subprogram 
of the Office of Electricity Delivery and Energy Reliability, and is 
focused on the development of tools and algorithms to improve the 
response time of the transmission system to disturbances to reduce the 
number and spread of outages, reduce the operating margins by allowing 
the system to operate closer to its loading limits, and to harden the 
transmission system's digital control, communications, and computing 
systems. For the distribution system, our $5 million request under the 
Renewable and Distributed System Integration subprogram includes Smart 
Grid efforts focused on advanced simulation and modeling techniques. 
One of the primary objectives of this research is to explore advanced 
operational control strategies for more effective grid operations 
resulting in increased reliability and efficiency.
    All of these efforts aim to equip grid operators with better and 
more real time information to improve the reliability of electricity 
supply. Software, algorithms, tools, and techniques are among the 
products and services which the Visualization and Controls and the 
Renewable and Distributed Systems Integration subprograms will address.
    Question 8. Mr. Secretary, there is a great deal of support and 
appreciation in Congress for the need and promise of making our 
electricity grid more intelligent and we look forward to continuing to 
collaborate with the Department on this issue. Are there specific ways 
you believe that Congress can continue to be helpful to achieve these 
priorities?
    Answer. We appreciate the opportunity to ask Congress for further 
assistance. The helpful step that Congress can take to assist the 
Department in pursing Smart Grid technologies, practices, and services 
is to fully fund the Fiscal Year 2009 funding request for the Office of 
Electricity Delivery and Energy Reliability.
                                hanford
    Question 1. Mr. Secretary, I am pleased that the proposed Hanford 
cleanup budget adds funding for the adoption of a `risk-based' approach 
to cleanup priorities and groundwater contamination to better protect 
the Columbia River. With that said, this budget still falls far short. 
Your Department specifically acknowledges that this underfunded budget 
is non-compliant with the Tri-Party Agreement milestones.
    This non-compliant budget could logically result in legal action by 
any of the parties, and I urge DOE to take every possible step to 
reduce this risk. Completing the work at Hanford in a timely manner is 
extremely important. Hanford is the most contaminated site in the 
Western hemisphere and retrieval of buried waste is critical to 
protecting the groundwater that flows into the Columbia River and 
reducing the footprint of contamination at Hanford.
    In your budget request, the Department acknowledges that at least 
eight milestones will be missed due to budget reasons, including 
milestones for Single Shell Tank waste retrieval and ground waste 
retrieval. The budget for the Richland Operations Office, which 
oversees groundwater contamination and buried waste retrieval, faces 
$45 million in proposed cuts. The DOE has routinely acknowledged that 
its fiscal year 2009 budget request is not enough to meet previously 
agreed upon milestones associated with the Hanford Cleanup.
    Mr. Secretary, why is the Department proposing a budget that will 
delay milestones and risk further litigation?
    Answer. The Administration recognizes that EM's FY 2009 budget 
request 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 Tri-Party Agreement and 
other environmental agreements that have been negotiated over many 
years with regulators. 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 
Tri-Party Agreement and environmental compliance agreements at other 
sites.
    To achieve a balance that allowed EM to continue to achieve risk 
reduction and pursue its cleanup goals, the Department prioritized its 
risk reduction and regulatory activities. Environmental compliance 
activities have been given high priority, but cannot in all cases be 
fully implemented without jeopardizing other highly critical activities 
necessary to avoid unreasonable risk to human health and/or national 
security.
    Question 2. Mr. Secretary, I am pleased that the proposed Hanford 
cleanup budget adds funding for the adoption of a `risk-based' approach 
to cleanup priorities and groundwater contamination to better protect 
the Columbia River. With that said, this budget still falls far short. 
Your Department specifically acknowledges that this underfunded budget 
is non-compliant with the Tri-Party Agreement milestones.
    This non-compliant budget could logically result in legal action by 
any of the parties, and I urge DOE to take every possible step to 
reduce this risk. Completing the work at Hanford in a timely manner is 
extremely important. Hanford is the most contaminated site in the 
Western hemisphere and retrieval of buried waste is critical to 
protecting the groundwater that flows into the Columbia River and 
reducing the footprint of contamination at Hanford.
    In your budget request, the Department acknowledges that at least 
eight milestones will be missed due to budget reasons, including 
milestones for Single Shell Tank waste retrieval and ground waste 
retrieval. The budget for the Richland Operations Office, which 
oversees groundwater contamination and buried waste retrieval, faces 
$45 million in proposed cuts. The DOE has routinely acknowledged that 
its fiscal year 2009 budget request is not enough to meet previously 
agreed upon milestones associated with the Hanford Cleanup.
    Mr. Secretary, what is the DOE's plan for solving the technical 
hurdles that are causing the routine slippage of milestone dates?
    Answer. The Department's fiscal year (FY) 2009 budget increases the 
amount spent on Technology Development and Deployment (TDD). The 
overall goals of this program are to eliminate technical barriers to 
cleanup by reducing technical uncertainty, improving safety performance 
by applying improved or new technologies, increasing confidence in 
achieving long-term cleanup goals, addressing emerging issues, among 
other goals. Efforts with a particular focus on Hanford cleanup include 
work on several supplemental waste treatment options, improved glass 
waste loading, advanced melter designs and improved waste retrieval 
options-funded both through the TDD program and Office of River 
Protection.
    There is an increased emphasis on soil and groundwater remediation 
activities in the Department's Hanford FY 2009 budget, which will focus 
on technical solutions to cleanup problems. The increased activities in 
the Soil and Groundwater Remediation Project (increase of $65 million) 
are for installation and operation of several new innovative 
groundwater treatment systems, expansion of the monitoring well 
network, performance of in situ remediation activities, and 
characterization of soil contaminants. This additional funding 
increases the focus on improving groundwater remediation systems for 
key plumes adjacent to the Columbia River.
    These funding increases will support, in the long-term, compliance 
with Tri-Party Agreement milestones at the Hanford site.
    Question 3. I am very concerned about the continued clean-up of 
America's nuclear legacy at Hanford in my State. I believe the federal 
government has a moral and legal obligation to cleanup the site. I am 
disappointed that the Hanford budget proposed no increase for 
addressing waste remaining in single shelled tanks, and deeply 
concerned that your Department's budget acknowledges that tank waste 
retrieval milestones will be missed.
    This budget only supports retrieval of one tank per year. This is 
simply unacceptable. The Inspector General has found that the 
Department is missing deadlines because the Department relied on 
unrealistic cost and schedule assumptions. The reality is Single 
shelled tanks are beyond their design life, and double shelled tanks 
are nearly full.
    Given these facts, what is the Department's plan to advance single-
tank waste retrieval and build capacity for and treat that waste?
    Answer. The safe storage, retrieval and treatment of tank waste at 
Hanford continue to be one of the Department's highest priorities. The 
Department has removed the pumpable liquids from the single-shell tanks 
(SSTs), as confirmed by State of Washingtion regulators, and 
transferred the liquids to double-shell tanks (DSTs), significantly 
reducing the risk of waste leakage. The Department monitors the tanks 
for leaks on an ongoing basis and is evaluating SST structural 
integrity to ensure the safety of ongoing storage. To date, the 
Department has also completed the retrieval of waste from seven SSTs 
using a variety of technologies specifically developed and suited for 
the Hanford tanks.
    The rate at which waste can be removed from the SSTs will continue 
to be limited by DST space until the Waste Treatment and Immobilization 
Plant (WTP) begins operations. Design and construction of the WTP 
continues; by the end of fiscal year (FY) 2009, the plant will be more 
than 50 percent complete overall. At the same time, the Department 
continues to evaluate options for the potential early treatment of low-
activity waste retrieved from the tanks.
    The Department is continuing efforts to make additional space 
available in the existing DSTs through ongoing space savings 
initiatives, and to retrieve waste from SSTs in the most efficient 
manner.
    Question 4. Many of the aging, single shell tanks holding 
radioactive waste at Hanford are located a mere 7 to 10 miles from the 
Columbia River. The emptying of 149 leak-prone single shell tanks 
holding radioactive waste at a rate of about one a year is unacceptable 
and puts the groundwater that flows into the Columbia River 
unnecessarily at risk.
    When can we expect the Department to come clean, no pun intended, 
with the State of Washington on a tank cleanup deadline?
    Answer. The Tri-Party Agreement (TPA) establishes tank farm cleanup 
milestones at the Hanford Site. The Department has already met a number 
of milestones including the completion of interim stabilization of the 
single-shell tanks (SST), i.e., removing pumpable liquids from the SSTs 
and transferring those liquids to double-shell tanks (DSTs). The 
Department has also completed the retrieval of seven SSTs, and is 
currently retrieving waste from an additional three tanks.
    Question 5. Many of the aging, single shell tanks holding 
radioactive waste at Hanford are located a mere 7 to 10 miles from the 
Columbia River. The emptying of 149 leak-prone single shell tanks 
holding radioactive waste at a rate of about one a year is unacceptable 
and puts the groundwater that flows into the Columbia River 
unnecessarily at risk.
    What does your budget request do to continue, and accelerate, 
efforts to fund new technologies to mitigate groundwater contamination 
at Hanford?
    Answer. There is an increased emphasis on soil and groundwater 
remediation activities in the Department's Hanford Fiscal Year 2009 
budget. The increased activities in the Soil and Groundwater 
Remediation Project (increase of $65 million) are for installation and 
operation of several new innovative groundwater treatment systems, 
expansion of the monitoring well network, performance of in-situ 
remediation activities, and characterization of soil contaminants. This 
additional funding increases the focus on improving groundwater 
remediation systems for key plumes adjacent to the Columbia River. In 
addition, the budget request includes an increase of more than 50 
percent for the Technology Development and Deployment Program. This 
increase includes additional funding for advanced groundwater 
remediation research, development, and deployment.
    Question 6. For the third year in a row, there is no funding for 
bulk vitrification or any other supplemental technology in the budget. 
With the waste treatment plant not ready to start until 2019, there 
must be some type of supplemental technology used in order to continue 
moving waste out of the tanks. Otherwise, liquids will be left in tanks 
that are far past their lives and susceptible to failure and leakage.
    What are the Department's plans for proceeding with supplemental 
treatment technology to avoid the higher cost options, such as 
installing a second low-level waste melter?
    Answer. The Environmental Management's (EM) budget request for 
fiscal year (FY) 2009 supports the continued development of the 
demonstration bulk vitrification system as a candidate supplemental 
treatment. This will allow the Department to continue cold system 
testing to demonstrate readiness for deployment. In addition, the 
budget request includes funding for conceptual planning and technology 
development to evaluate an interim pre-treatment system that could 
supply low-activity waste to a supplemental treatment immobilization 
system or an ``early'' Waste Treatment Plant Low Activity Waste (LAW) 
Facility operation. In addition, EM continues to study the feasibility 
of adding a 3rd melter to the two melters to be installed in the LAW 
Facility which is under construction. All of these tests, studies, and 
planning efforts will allow the Department to finalize its business 
case on if, how, and when to proceed with pre-treatment and 
immobilization capability in addition to the Waste Treatment Plant. EM 
has recently initiated an independent study that will lead to 
identification of an optimized path forward in the June 2008 timeframe.
    Question 7. Three major contract procurements are currently 
underway at Hanford. The first in sequence to be awarded, the Mission 
Support contract, is behind schedule, and the other two, Tanks and 
Central Plateau, will presumably follow thereafter. With these delays, 
it appears that DOE may be pushing right up at against the fiscal year, 
which will cause transition problems at the site.
    What are DOE's plans to ensure a smooth process for the award of 
these contracts and transition to new contracting teams?
    Answer. The three awards were planned in an integrated manner to 
ensure smooth transition of services as current contracts end. As a 
result, there was early attention to avoiding transition problems. The 
Request for Proposals for each of the three procurements required that 
each of the offers being submitted include a transition strategy as 
part of the proposals for evaluation by the Government. The Government 
also is requiring that the two incumbent contractors submit detailed 
``phase out'' transition plans, and will require that each of the three 
contract awardees submit a detailed transition plan at the start of the 
90-day transition period between the old and new contracts. The 
contractor-prepared plans will be compared to the Government's 
Integrated Transition Plan for the three procurements to ensure that 
all the Government's transition requirements have been met. This 
detailed transition process and the 90-day transition process between 
the old and new contracts should ensure minimum disruption to the 
existing workforce and the work activities at the site.
    Each of these contracts is being pursued aggressively for award 
this fiscal year (4th quarter FY2008 as noted on DOE's public 
acquisition forecast website). Our internal schedules indicate a timely 
award for each of the Mission Support Contract, Plateau Remediation, 
and Tank Operations Contracts. Every major acquisition presents 
challenges. We have added resources where needed and the Assistant 
Secretary for Environmental Management personally reviews the progress 
of these procurement actions. The awards or post-award transition may 
occur near or at the end of this fiscal year, but each action is 
planned for orderly transition from the projected award date.
    Question 8. The budget request suggests a possible early start of 
the Low Activity Waste (LAW) Treatment facility at Hanford.
    What is the impact of the early start of LAW to construction costs 
of the Waste Treatment Plant as a whole?
    Answer. No increase to the total project costs for the Waste 
Treatment Plant is expected as a result of an early start-up of LAW.
    Question 9. This budget request points to reducing the size of 
Hanford from 586 square miles to some 75 square miles by 2015. This is 
a substantial amount of land to be transferred to a government agency 
or regional entity in the not too distant future.
    What are the planned steps/milestones for this land transfer?
    Answer. Completing cleanup of the Columbia River Corridor would 
enable us to shrink the active Hanford cleanup operations to the 75-
square-mile area near the center of the Hanford Site and to reduce 
overall site ``mortgage'' costs associated with infrastructure services 
(water, power, roads). There are no current plans for transferring the 
land to another government agency or regional entity at this time. 
However, about 235 square miles of the Hanford Site not affected by 
plutonium production operations, including the Arid Lands Ecology 
Reserve and the North Slope, are being managed in consultation with the 
U.S. Fish and Wildlife Service as part of the Hanford Reach National 
Monument.
                       weatherization assistance
    Mr. Secretary, I am deeply concerned that your FY09 budget 
terminates the Weatherization Assistance program. Not only is the DOE's 
weatherization assistance program essential to some of society's 
neediest citizens, but it also benefits our nation by reducing our 
energy dependency, improves the environment, and stimulates economic 
development in low-income communities. Providing weatherization 
services free of charge to approximately 100,000 low-income households 
every year, the Weatherization Assistance program is this country's 
longest running, largest and perhaps the most successful energy 
efficiency program, and is one of the few government activities that 
saves more money than it costs.
    During the last 30 years, the weatherization program has provided 
energy savings to more than 5.5 million low-income homes, reducing 
heating bills by 31% and overall energy bills by up to $358 per year. 
My own state of Washington will receive enough weatherization funds 
this year to assist 1,300 households. These energy savings have spurred 
low-income communities toward job growth and economic development, and 
these weatherization projects have created an energy efficiency 
industry for residential housing. Nationwide, weatherization supports 
8,000 technical jobs in low-income communities, which represents about 
52 jobs for every $1 million of DOE investment. In his FY2002 budget, 
President Bush proposed to increase DOE's Weatherization Assistance 
Program (WAP) funding by $1.4 billion over the next 10 years.
    Question 10. Why then have we seen flat and mostly decreasing 
weatherization requests since 2003, culminating in the program being 
zeroed out in the President's FY09 request?
    Answer. The program is not completely aligned with DOE's core 
mission. Weatherization Assistance is an important goal, but is an 
anomaly because it addresses social welfare goals in addition to energy 
efficiency improvement. Prudent portfolio management requires DOE to 
focus available resources on its core areas of expertise and mission 
consistent with the DOE Strategic Plan.
    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.\7\ 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.\8\
---------------------------------------------------------------------------
    \7\ ``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, three of 17--activities assessed (p. 29).
    \8\ 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.
---------------------------------------------------------------------------
    Question 11. Given that the DOE reports the Weatherization 
Assistance Program returns $3.71 for every dollar invested by tax 
payers, is there any other program managed by the DOE that has such 
positive investment returns for tax payers?
    Answer. The program is not completely aligned with DOE's core 
mission. Weatherization Assistance is an important goal, but is an 
anomaly because it addresses social welfare goals in addition to energy 
efficiency improvement. Prudent portfolio management requires DOE to 
focus available resources on its core areas of expertise and mission 
consistent with the DOE Strategic Plan.
    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.\9\ 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.\10\
---------------------------------------------------------------------------
    \9\ ``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, three of 17--activities assessed (p. 29).
    \10\ 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.
---------------------------------------------------------------------------
                      reliable replacement warhead
    Question 12. In the FY 2009 Budget Highlights, the DOE reports that 
work continues of the Reliable Replacement Warhead (RRW) in three 
areas: Directed Stockpile Work, Science Campaign and Enhanced Surety.
    Although $10 million is called out under the Directed Stockpile 
Work, how much money is specifically tied to RRW under the Science 
Campaign and Enhanced Surety?
    Answer. NNSA has requested $10 million for RRW Phase 2A study in FY 
2009. The funding in the Science Campaign/Advanced Certification and 
Enhanced Surety is not limited to the RRW application, but addresses 
issues concerning warhead certification without underground nuclear 
tests and the technology development for improved surety systems of the 
existing nuclear weapon systems as well.
    The RRW funding in Directed Stockpile Work is to advance the RRW 
Phase 2A design study definition so that questions on RRW certification 
raised by the JASON review can be answered. Specific activities will 
include: 1) refinement of the enhanced surety features within the 
design and identification and assessment of certification issues; 2) 
definition of potential fabrication and material selection effects on 
certification; and 3) more in-depth analysis to strengthen and refine 
the design definition through inter-laboratory peer review.
    To continue to address the issues associated with certification of 
warheads without underground nuclear tests, NNSA has requested funding 
for the Advanced Certification activity, created consistent by the 
Consolidated Appropriations Act , 2008. The goal is to provide the 
tools and methodology to support the certification and assessment of 
significant changes to the stockpile beyond ``as tested.'' Each weapon 
repair or refurbishment introduces change because legacy materials and 
some processes no longer exist. These changes require careful 
examination and analysis to ensure they do not degrade weapon 
performance. These changes could include component re-use, life 
extension programs, and future systems, especially where surety or 
safety features are added to the weapon design.
    Additionally, NNSA will continue to incorporate enhanced surety 
into warheads, a key aspect of the RRW program. The Enhanced Surety 
activity will develop multiple technologies as options for improved 
surety systems for future use in existing warheads through evolutionary 
modifications or for use in future systems.
                      brownfields to brightfields
    I understand that former Secretary Bill Richardson established a 
``Brownfields to Brightfields'' program that funded the establishment 
of solar power systems on Brownfields. Despite a successful application 
of this program in the Chicago area, it appears that the department did 
not continue this program and it may have been folded into the broader 
Brownfields program at the Environmental Protection Agency.
    Question 13. Since the Department of Energy has substantial surplus 
property, much of which qualifies as Brownfields, and the Department 
has a mission to promote solar power, I believe it may be time to 
consider reinvigorating the Brownfields to Brightfields program. What 
can the Department do to accomplish this, and what steps might be 
required by Congress?
    Answer. Under Executive Order 13423, released by President Bush in 
January 2007, Federal agencies must obtain at least half of their 
required renewable energy levels (7.5 percent by 2013) from new 
renewable sources. Reflective of the environmental leadership required 
by this Executive Order, DOE established the Transformational Energy 
Action Management (TEAM) Initiative in August 2007. The TEAM Initiative 
calls for all DOE facilities to examine their potential for use of on-
site renewable energy, including solar technologies. Through the TEAM 
initiative, and bound by the President's Executive Order, DOE will 
thoroughly examine the ``substantial surplus property'' that you 
mention as potential areas of clean, renewable power production.
                     Questions From Senator Dorgan
    Question 1. 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.'' Do you 
believe that removing oil from the market in today's environment, when 
prices are high and global supplies tightening, is not causing oil 
prices to increase? Can you provide a copy of your economic analysis 
that demonstrates how this is not having an impact on price or supply?
    Answer. As required by the SPR acquisition procedures, the Office 
of Petroleum Reserves conducts an economic analysis of the crude oil 
market before engaging in acquisition activity. Since the beginning of 
2007, two separate market assessments have been completed prior to 
initiating activities for the two RIK exchange cycles. These analyses 
found that market conditions were such that the small amount of oil 
being acquired (less than one-tenth of one percent of global demand) 
would not appreciably impact the price of oil.
    Question 2. You stated to me 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, this is only part of 
the story. The requirement to meet U.S. treaty obligations with other 
OECD countries is for 90 days, and your web site said that the U.S. has 
118 days of public and private strategic stocks for import protection. 
How does this square with the Bush Administration's rationale for 
continuing to fill the SPR through royalty-in-kind contracts or any 
other means?
    Answer. During the mid-1980s, the SPR inventory was sufficient to 
provide the required 90 days of import protection and more. However, 
since 1988, the U.S. has satisfied its IEA stockholding obligation 
through its reliance on a combination of SPR and commercial industry 
stocks. Congress discontinued funding for SPR oil acquisition in the 
early 1990s; however, U.S. petroleum consumption and corresponding 
import dependence have increased substantially since that time. Today 
the SPR's import protection level stands at approximately 58 days. U.S. 
industry stocks make up a significant portion (one-third) of the U.S.'s 
IEA emergency reserve stockholding obligation.
    The Administration's objectives for the SPR oil fill and energy 
security are to achieve an inventory of 727 million barrels in 2008--
providing approximately 60 days of import protection; expansion of the 
Reserve to 1.0 billion barrels in 2019--providing approximately 90 days 
of import protection; and additional expansion of the Reserve to 1.5 
billion barrels by 2029--providing approximately 124 days of import 
protection.
    Question 3. On December 11, 2007, in a joint Energy / Homeland-
Government Affairs Subcommittee hearing, we heard testimony from Dr. 
Philip Verleger that the Department of Energy has taken as much as 2.9 
million barrels highly valuable light sweet crude off the market in the 
last six months. He stated that removing even small supplies of this 
highly valuable crude oil could have raised the overall price of oil as 
much as $10 per barrel. As you know, refiners prefer this higher 
quality light sweet crude. Do you think that it's a good policy to for 
the U.S. Government to be competing with private industry for limited 
supplies of light sweet crude that if left on the market could increase 
supply and help lower prices?
    Answer. In January 2008, the Office of Petroleum Reserves presented 
its analysis of Dr. Verleger's claims to the staff of the Senate Energy 
and Natural Resource Committee. Dr. Verleger's assertion that DOE's 
recipt of such a small amount of oil (less than one-tenth of one 
percent of global demand) could increase the price of crude oil by as 
much as $10 is not supported by widely accepted market theories or 
transparent economic analysis.
    The Department of Energy strongly disagrees with these statements 
and finds fault with the analysis used to support them. There are many 
factors in oil markets that affect supply and demand balances by a much 
greater proportion than the SPR's RIK oil acquisition program. Dr. 
Verleger's testimony disregards these factors as inconsequential. The 
Office of Petroleum Reserves conducted an oil market analysis before 
initiating the RIK fill program and found that the small amount of oil 
being received in the reserves would not appreciably affect the price 
of oil.
    Question 4. Why is it that the Department is recommending zeroing 
out the Oil and Natural Gas R&D programs for the third year in a row? 
The Congress provided $24.7 million for these programs in FY 2008. 
Small and independent producers and academic institutions benefit from 
these programs, not the five largest integrated oil companies. Last 
year, I asked the GAO to look into this issue and they showed that 
there was value to these programs.
    Shouldn't the Department be supporting efforts to develop next 
generation oil and gas recovery technologies and programs that benefit 
our independent, domestic producers and thus reduce our dependence on 
imported energy?
    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.
    The November 6, 2007 GAO report entitled, ``Oil and Natural Gas 
Research and Development Activities'' found: ``Some industry economists 
and experts argue that a federal government role is needed because 
industry may underinvest in oil and natural gas R&D. However, the 
extent to which industry is underinvesting in this area is unclear 
because comparable data are not readily available and much of these 
data are proprietary.'' It also recommended certain factors to be 
considered in evaluating the federal role in oil and natural gas R&D. 
The Administration's proposal to make the R&D investment tax credit 
permanent and its environmental regulations address potential market 
failures identified in the GAO report.
      integration of coal and carbon capture and storage programs
    Question 5. The Department has a number of important clean coal and 
carbon capture and storage programs under way. This includes requests 
for FutureGen ($156 M), the Clean Coal Power Initiative ($85 M), and 
the Carbon Sequestration Regional Partnership program $149 M) for FY 
09. Also in FY 2008, the Appropriations Committee included $6 billion 
in budget authority for the DOE Loan Guarantee program for coal-based 
projects that included carbon capture and storage. With all of this 
money directed toward clean coal and carbon capture and storage 
activities, I want to know that it is well coordinated, and there is an 
integrated government/private sector plan in place to take these 
efforts from the laboratory to the commercial market.
    Can the Department explain what it is doing to develop and 
implement an integrated action plan?
    Answer. There are several elements of DOE's Sequestration Program 
for carbon capture and storage (CCS). They include the core research 
and development (R&D) programs, which fund applied and basic research 
for CCS technologies. The projects funded through these R&D programs 
are bench-top-scale research and represent innovative approaches that 
can significantly reduce the cost and demonstrate the safety and 
effectiveness of CCS. The second part of the program consists of large-
scale CO2 injection projects, which are designed to take the 
technologies developed in the core R&D programs and deploy them in the 
field through programs like the Regional Carbon Sequestration 
Partnerships. This part of the program is also responsible for 
developing the infrastructure technologies and information, such as CCS 
best practices that could help form a basis for regulations, for CCS 
deployment through the involvement of representatives from industry, 
non-governmental organizations (NGOs), universities, and Federal and 
state partners. The final piece of the DOE CCS Program will be 
implemented through the Clean Coal Demonstration Program (such as the 
Clean Coal Power Initiative and FutureGen), which will take the 
technologies developed from the core R&D and large-scale injection 
projects and implement them in full-scale power plants that include 
CCS. Early commercial deployment of plants with CCS can benefit from 
FutureGen and other deployment incentives. The Sequestration Program, 
which is managed by the Office of Fossil Energy, also coordinates with 
DOE's Office of Science to enhance the scientific learning and 
understanding in the field demonstration projects. The Regional 
Partnerships have over 350 distinct organizations as part of the effort 
thus making efficient technology transfer from the laboratory to the 
commercial market.
    All of the projects awarded through these DOE programs are based on 
cooperative agreements with industry and/or research institutions. 
Therefore, the success of these programs depends upon the success of 
our partners and DOE's continued efforts to promote technology 
transfer.
    DOE is also supporting working groups through other Federal 
agencies, NGOs, and industry that are working to develop regulations 
and liability frameworks, and to educate stakeholders about the 
benefits of CCS.
    Question 6. Despite extending a five-year contractual cooperative 
agreement with the Energy and Environmental Research Center in North 
Dakota and the Western Research Institute in Wyoming, the Department is 
not supporting funding for the cooperative agreement program.
    Can you explain why this program was not funded even though the 
Department signed an extension of the agreement last year?
    Answer. The Department has not requested funding for this program 
for several years. The Department signed an extension to the current 
cooperative agreement so that FY 2008 funding provided in the 
Consolidated Appropriations Act 2008 could be sent to WRI and UNDEERC. 
The Department believes that the competitive process for awarding 
competitive agreements provides better projects and better research 
results.
                         environmental cleanup
    Question 1. In FY 2005, the Environmental Cleanup programs had a 
budget of $7.9 billion. Only four fiscal years later we get a fiscal 
year 2009 budget request of only $5.9 billion for the same programs. 
That is a $2 billion reduction in a very short time frame. Over the 
last four years, the Department has completed cleanup at Rocky Flats, 
which could explain a reduction of $650 million from the budget, but 
not the entire $2 billion.
    Please explain the reason you are requesting so little funding for 
the Cleanup program in FY 2009, especially in light of the budget's 
admission that the request is insufficient to meet `` ...milestones and 
obligations contained in all of the environmental agreements ... '' 
made with regulators?
    Answer. The Environmental Cleanup program is one of many important 
national priorities to which the Administration must allocate 
resources. 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 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 DOE.
    Question 2. We all understand that some cleanup projects are behind 
due to technical issues that funding cannot solve, but a reduction in 
funding also contributes to delay. In October 2007, four short months 
ago, the Weapons Complex Monitor reported a statement made by an 
Environmental Cleanup program budget officer that the cleanup programs 
required nearly $8 billion to maintain regulatory compliance and 
cleanup schedules. Do you disagree that the environmental cleanup 
programs would need $8 billion per year to be in compliance?
    If so, what it is the basis for your disagreement?
    Answer. As you noted, there can be a number of reasons why 
compliance obligations are in jeopardy, including unanticipated or 
especially complex technical challenges. Until those challenges are 
solved, no amount of funding would guarantee that the Department can 
maintain compliance with all of its regulatory commitments. To achieve 
a balance that allowed EM to continue to achieve risk reduction and 
pursue its cleanup goals, the Department prioritized its risk reduction 
and regulatory activities. Environmental compliance activities have 
been given high priority, but cannot in all cases be fully implemented 
without jeopardizing other highly critical activities necessary to 
avoid unreasonable risk to human health and/or national security. Site 
managers will engage their regulators to discuss compliance issues and 
the available alternatives for achieving shared goals.
    Question 3. The Department's FY 2009 request for the National 
Nuclear Security Administration proposes new funding of $77 million to 
begin tearing down uncontaminated excess facilities across the weapons 
complex. At the same time, your budget proposes to reduce the 
Environmental Management's decontamination and decommissioning program, 
which tears down radioactively contaminated excess facilities that pose 
a threat to human health, safety, and the environment, by $184 million. 
Can you please explain why you have chosen to fund lower-risk cleanup 
activities under the NNSA while ignoring regulatory agreement to fund 
similar, but higher-risk cleanup activities within the Environmental 
Cleanup program?
    Answer. The National Nuclear Security Administration's (NNSA) 
Transformation Disposition (TD) program proposes to fund the TD Program 
from within the target request to eliminate a total of five million 
gross square feet of excess facilities across the weapons complex from 
FY2009--FY 2017. TD Program proposes to fund the disposition 
(demolition, sale, or transfer) of 430,000 gross square feet across the 
NNSA complex with the $77M request. The TD program directly supports 
NNSA's vision of a smaller, safer, more efficient, and more secure 
enterprise and NNSA's commitment to reduce the footprint from greater 
than 35 million to less than 26 million square feet by FY 2018. The TD 
program will follow the successful management construct of the Facility 
Disposition subprogram (from within the Facilities and Infrastructure 
Recapitalization Program) which will conclude in FY 2008 after 
eliminating three million gross square feet of excess facilities.
    The EM budget request funds ongoing environmental management 
activities focused on balancing risk reduction and regulatory 
requirements within the fiscal constraints, whereas, the proposed TD 
program budget will focus on aggressive and cost-effective footprint 
consolidation for a finite period of time in support of NNSA 
transformation. Both of these programs address projects selected on the 
basis of integrated priority lists to ensure that the highest priority 
projects are identified for funding across the DOE complex.
    Question 4. Over the past few years, the Environmental Cleanup 
program has made great strides in improving its project management. 
According to the FY 2009 Budget, most of the cleanup projects are now 
baselined under your Department's Project Management Qrder. This means 
that Cleanup projects have established firm scope, schedule and cost 
data to support the program's funding request. In spite of this good 
news, you have chosen to reduce the program $167 million from the FY 
2008 enacted level. Can you explain why you have reduced a program that 
appears ahead of other programs in the Department in terms of project 
management?
    Answer. The Environmental Cleanup program is one of many important 
national priorities to which the Administration must allocate 
resources. The goal is to fund those cleanup activities that present 
the greatest risks to the workers, the communities and the environment 
while maximizing compliance with regulatory agreements. The project 
management system established within the EM program assists in making 
decisions in consultation with its regulators and other stakeholders, 
that can then be effectively and efficiently implemented.
                        Questions From Menendez
                             weatherization
    Question 1. Secretary Bodman, this budget proposal would eliminate 
federal weatherization programs. In a time when oil is at $90 a barrel, 
when action on climate change is urgently needed, and there are growing 
fears about the health of the economy, why would you propose to 
eliminate this program?
    Answer. The program is not completely aligned with DOE's core 
mission. Weatherization Assistance is an important goal, but is an 
anomaly because it addresses social welfare goals in addition to energy 
efficiency improvement. Prudent portfolio management requires DOE to 
focus available resources on its core areas of expertise and mission 
consistent with the DOE Strategic Plan.
    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.\11\ 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.\12\
---------------------------------------------------------------------------
    \11\ 11 ``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, three of 17--activities assessed (p. 
29).
    \12\ 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.
---------------------------------------------------------------------------
    Question 2. In my home state, the New Jersey Department of 
Community Affairs estimates that federal weatherization programs allow 
for the weatherization of about 1400 units per year. Low income 
families, seniors, and those with disabilities depend on these funds to 
lower their energy payments. So please explain why this Administration 
wants to take money out of the pockets of low-income families, harm the 
environment and possibly further jeopardize our shaky economy by 
cutting this essential program.
    Answer. The program is not completely aligned with DOE's core 
mission. Weatherization Assistance is an important goal, but is an 
anomaly because it addresses social welfare goals in addition to energy 
efficiency improvement. Prudent portfolio management requires DOE to 
focus available resources on its core areas of expertise and mission 
consistent with the DOE Strategic Plan.
    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.\13\ 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.\14\
---------------------------------------------------------------------------
    \13\ 13 ``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, three of 17--activities assessed (p. 
29).
    \14\ 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.
---------------------------------------------------------------------------
    Question 3. In your response to questions at the hearing you 
indicated that it was being cut because it is less cost-effective than 
other programs in the Office of Energy Efficiency and Renewable Energy. 
But according to a comprehensive study commissioned by the Department 
of Energy in 2003, for every dollar spent by a weatherization program 
there are $2.70 of lifetime energy and non-energy benefits. (See Linda 
Berry & Martin Schweitzer, Metaevaluation of National Weatherization 
Assistance Program Based on State Studies, 1993-2002. February 2003. 
Prepared by Oak Ridge National Laboratory for the U.S. Department of 
Energy).
    In fact if you go to the DOE's website and look at how your 
department describes the Weatherization Assistance Program it states:

          In the Weatherization Assistance Program, weatherization 
        services are cost-effective energy efficiency measures for 
        existing residential and multifamily housing with low-income 
        residents.
                  (See http://www.eere.energy.gov/weatherization/what--
                is.html)

    Your own department touts the program as cost effective, but you 
now say the program should be cut because it is not cost effective. How 
do you explain these discrepancies?
    Answer. The program is not completely aligned with DOE's core 
mission. Weatherization Assistance is an important goal, but is an 
anomaly because it addresses social welfare goals in addition to energy 
efficiency improvement. Prudent portfolio management requires DOE to 
focus available resources on its core areas of expertise and mission 
consistent with the DOE Strategic Plan.
    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.\15\ 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.\16\
---------------------------------------------------------------------------
    \15\ ``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, three of 17--activities assessed (p. 29).
    \16\ 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.
---------------------------------------------------------------------------
                     solar research and development
    Support for research and development is crucial for achieving cost-
effective solar power, job creation, and, more broadly, increased 
renewable power production. Solar power aids our national energy 
security and reduces greenhouse gas emissions. Many are surprised to 
learn that my home state of New Jersey is a leader in solar energy 
second only to the state of California in the number of solar 
installations.
    In his 2006 State of the Union address, the President seemed to 
recognize the importance of solar when he announced the establishment 
of the Solar America Initiative and set forth the ambitious goal of 
making solar power cost competitive with other renewable fuels by 2015. 
Yet the President's FY09 budget proposes a $12 million cut in funding 
for solar research programs at DOE. I have been informed by sources 
within the DOE that the cut is actually $21 million because the 
Administration plans to siphon off $9 million from the solar R and D 
program and use it at the National Renewable Energy Laboratory (NREL).
    Question 4. My first question on solar energy research is whether 
this $9 million going to NREL is actually going to be used to support 
the solar program or whether it is just going to be used to [sic] in 
the lab's general account?
    Answer. Yes, the $9 million is for capital equipment purchases at 
NREL that fully support the goal of the Solar America Initiative. A 
list of the equipment to be purchased by the laboratory is presented 
below:

    Dynamic Secondary Ion Mass Spectroscopy (SIMS) System, $919,000; 
High-Resolution Electron Microscopy Sample Preparation Sputtering 
System, $154,000; Spectro-Radiometer for Pulsed Light Sources (covering 
300-2000 nm range), $80,000; Humidity Calibration System, $68,000; 
Precision Cell Area Measurement System, $84,000; 6-Source Component and 
Deposition System with In-Situ Diagnostics, $688,000; Combination PLD/
PED System with In-Situ Diagnostics, $606,000; Excimer Work Station for 
Laser Processing, $289,000; Single Crystal Diffractometer, $585,000; PV 
Materials Lamination/Water Vapor Permeation Test System $249,000; 3D 
Semiconductor Device Simulation Package, $135,000; Proximal Probe 
Workstation, $350,000; Electron Probe Microanalysis System (EPMA), 
$853,000; Far-Infrared FTIR Spectrometer $209,000; X-ray Photoelectron 
Spectrometer/Inverse Photoemission System $1,511,000; Silicon Wafer Wet 
Chemistry Station, $510,000; Surface Science Cluster Tool Component 
Replacements, $297,000; Semilab Scanning 6-inch Wafer Analyzer 
$423,000; Microwave Reflection Based Lifetime Scanner, $323,000; 
Tunable Pulsed Laser $208,000; FT-Raman Mapper $303,000; Large Area 
Mask Aligner; $156,000.
    Question 5. Given the President's personal commitment to the Solar 
America Initiative, how can you justify cutting more than $21 million 
in solar R&D funding this year? Are you concerned about the macro 
effects this funding cut may have on the economy? A study published 
this week by Navigant Consulting shows the value of solar-related jobs 
in manufacturing and construction--two industries hit hard in the 
current recession/economic slowdown. Is now really the time to be 
decreasing federal support for solar R&D programs?
    Answer. The Administration continues to recognize the importance of 
solar energy, consistent with the goals of the President's Solar 
America Initiative (SAI). The $12 million reduction in the FY 2009 
request compared to the FY 2008 appropriation is based on the following 
factors:

    The $10 million decrease in concentrating solar power research and 
development reflects a down-selection of industry projects in trough 
manufacturing and thermal storage technologies, allowing only the most 
promising contracts representing the best use of the taxpayer dollar to 
move into the second phase of funding in FY 2009.
    The remaining $2 million decrease in the Solar Heating and Cooling 
Systems is the result of a transfer of this activity from the Solar 
Program to the Buildings Program. Under the Buildings Program, funding 
for this activity is actually increasing to $3.7 million. The Solar 
Decathlon activity is also transferred to the Buildings Program, where 
it is more aligned with the mission of the Zero Energy Buildings effort 
within the program. Transferring the Solar Decathlon to the Buildings 
Program allows more funding to be dedicated to the Solar America 
Cities, Solar America Showcases, and Government Solar Installation 
Program activities within the Solar Program budget.
    The actual funding decrease in the Solar Program FY 2009 request is 
only $12 million. The $9 million that was referenced as part of the $21 
million was not funding for solar R&D, but rather for solar capital 
equipment purchases at NREL to replace aging equipment.

    Question 6. Why is the solar heating and cooling budget zeroed out? 
Will that level of funding continue as part of the Building 
Technologies Program? Given the extensive use of solar heating and 
cooling technologies on homes and businesses in Europe and elsewhere, 
is the Department planning to support the increased use of solar 
heating and cooling in the US?
    Answer. The Solar Heating and Cooling (SH&C) budget continues to be 
funded within the Department's Office of Energy Efficiency and 
Renewable Energy (EERE) under the Buildings Technologies Program at a 
request level of $3.7 million. Since SH&C technology has primary 
applications in residential and commercial buildings, management of 
this sub-program will be transferred from the Solar Technologies 
Program to the Building Technologies Program within EERE, beginning in 
FY 2009. This realignment is intended to provide a more direct and 
efficient coordination of RD&D activities by combining SH&C energy 
supply and energy efficiency load reduction technology options for 
building applications.
    DOE recognizes that the SH&C technology is an important contributor 
to the development of successful integrated pathways to Zero Energy 
Homes (ZEHs). In collaboration with the Building America (BA) Program 
partnerships, the goal is to achieve technically feasible and 
economically viable ZEHs by 2020. This goal cannot be accomplished 
without renewable energy supply technologies like SH&C.
    Question 7. Is the development and deployment of cost-effective 
solar water heating products a near-term goal for the Department?
    Answer. Yes. In collaboration with the building industry and 
stakeholders, DOE is supporting the research and development (R&D) of 
cost-effective Solar Heating and Cooling (SH&C) energy supply and 
energy efficient load reduction technology options for building 
applications, which includes R&D on cost-effective solar heating, solar 
cooling, and solar water heating (SWH) products for residential and 
commercial applications. SH&C is also expected to contribute to 
achieving technically feasible and economically viable Zero Energy 
Homes (ZEHs) by 2020. Successful pathways towards the ZEH goal cannot 
be accomplished without renewable energy supply technologies, including 
cost effective solar water heating products.
    Question 8. Will solar heating and cooling product rating and 
personnel certification be a priority for the Department?
    Answer. The Department's Solar Heating and Cooling Technology 
(SH&C) provides technical and financial support to the Solar Rating and 
Certification Corporation (SRCC) and the North American Board for 
Energy Practitioners (NABCEP). SRCC and NABCEP certification of the 
solar products and practitioners are considered critical to the 
widespread utilization and mainstreaming of these important renewable 
energy supply technologies. The successful development and 
implementation of effective certification procedures provide enhanced 
consumer confidence and assurances leading to an expanded market demand 
for residential and commercial building applications. These 
certifications are being adopted as requirements by Federal, State and 
local incentive programs and utility initiatives for solar heating and 
cooling technologies.
                            gipp and bushehr
    Question 9. Are these press reports [regarding GIPP and the Bushehr 
nuclear reactor] accurate? If so, why would the Department of Energy 
subsidize the building of a nuclear power plant I and many of my 
colleagues have worked so hard to prevent from being built? Why would 
the Department take these actions that run completely contrary to our 
nonproliferation goals? Finally, why now when our relations with Iran 
have been greatly strained would we be funding a program such as this?
    Answer. The Global Initiatives for Proliferation Prevention (GIPP) 
program funds individuals in an attempt to direct those with weapons of 
mass destruction expertise to approved projects for peaceful purposes. 
These individuals tend to work at Russian institutes that undertake a 
wide variety of work by the Russian nuclear complex.
    To ensure consistency with U.S. policy and regulations, GIPP vets 
each project proposal with U.S. agencies and the intelligence 
community. The purpose of this review is to eliminate from 
consideration institutes that are under U.S. sanctions or investigation 
for proliferation-related activities. Because the United States does 
not sanction Russian institutes that also support Bushehr, no U.S. 
agency raised an objection to GIPP projects involving such Russian 
institutes. Final decisions on these few projects will be made 
following consultation with U.S. agencies and others, a process we 
expect to complete in the near future. Consultations with Congress and 
other stakeholders are also anticipated before the Department 
implements more significant changes to GIPP.
    We have no information suggesting that Russian scientists receiving 
funds through GIPP were also working on nuclear projects in Iran. To 
reconfirm this, we have undertaken an exhaustive check of GIPP project 
records and intelligence information covering the program's 14 years of 
existence.
                      Questions From Senator Wyden
    The Administration has announced that it intends to expand the 
capacity of the Strategic Petroleum Reserve to 1.5 billion barrels, 
apparently with an increase to 1 billion barrels--project 09-FE-100, 
``SPR One Billion Barrel Expansion.'' Please provide the following and 
describe the method used for each calculation:

    Question 1a. Total estimated construction cost for the ``SPR One 
Billion Barrel Expansion.''
    Answer. The total estimated construction cost for the expansion of 
the SPR from its current capacity of 727 million barrels to one billion 
barrels, is estimated at $5.1 billion. This is based on conceptual 
design estimates which were prepared in 2006.

    Question 1b. The Administration has announced that it intends to 
expand the capacity of the Strategic Petroleum Reserve to 1.5 billion 
barrels, apparently with an increase to 1 billion barrels--project 09-
FE-100, ``SPR One Billion Barrel Expansion.'' Please provide the 
following and describe the method used for each calculation:

    Total estimated cost to the Federal Government of the additional 
oil which would be added in the ``SPR One Billion Barrel Expansion.''
    Answer. DOE anticipates the continuation of the current DOE/DOI 
program to use Federal Royalty oil from the Outer Continental Shelf for 
the fill of the SPR to one billion barrels. As such, there is no 
acquisition cost for this oil as the Federal Royalty oil is owned by 
the Government, although it does reduce receipts to the U.S. Treasury, 
thereby increasing the deficit. This oil would be transferred to DOE 
for SPR storage directly or exchanged for oil of equivalent value 
meeting SPR specifications prior to SPR storage. However, assuming a 
maximum Royalty oil fill rate of 100,000 barrels per day and 2009 
budget price projections for imported oil, the value of the oil that 
would be added to increase the SPR inventory from 700 million barrels 
to one billion barrels, is estimated at about $23 billion.

    Question 1c. The Administration has announced that it intends to 
expand the capacity of the Strategic Petroleum Reserve to 1.5 billion 
barrels, apparently with an increase to 1 billion barrels--project 09-
FE-100, ``SPR One Billion Barrel Expansion.'' Please provide the 
following and describe the method used for each calculation:

    The estimated additional annual maintenance and operations cost 
associated with the ``SPR One Billion Barrel Expansion'' (1) during the 
period the expansion is taking place, and (2) once it is complete.
    Answer. There would be no additional maintenance and operations 
cost associated with expansion during the period the site expansions 
are taking place. The expansion costs for each of the three sites 
include all maintenance and operations costs associated with the 
expansion efforts until the site's expansion has been completed. Once 
expansion has been completed, we project an increase of approximately 
$40 million per year based on costs at current sites. The increase 
includes $30 million associated with the maintenance and operations of 
the new 160 million barrel site and an incremental increase in costs of 
$5 million for each of the two existing site expansions.

    Question 1d. The Administration has announced that it intends to 
expand the capacity of the Strategic Petroleum Reserve to 1.5 billion 
barrels, apparently with an increase to 1 billion barrels--project 09-
FE-100, ``SPR One Billion Barrel Expansion.'' Please provide the 
following and describe the method used for each calculation:

    Total estimated construction cost for the additional expansion to 
1.5 billion barrels.
    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. The DOE has requested $13.5 million in FY 2009 to 
prepare its expansion plans and complete a NEPA environmental review. 
However, if two additional new salt dome storage sites of 250 million 
barrels each-that would be similar to the existing SPR sites-were 
developed in the Gulf Coast region, the total estimated construction 
cost for the expansion of the SPR from 1.0 billion to 1.5 billion 
barrels is about $6.5 billion based on the construction costs for 
existing SPR sites.

    Question 1e. The Administration has announced that it intends to 
expand the capacity of the Strategic Petroleum Reserve to 1.5 billion 
barrels, apparently with an increase to 1 billion barrels--project 09-
FE-100, ``SPR One Billion Barrel Expansion.'' Please provide the 
following and describe the method used for each calculation:

    Total estimated cost to the Federal Government of the additional 
500 million barrels of oil.
    Answer. DOE anticipates the continuation of the current DOE/DOI 
program to use Federal Royalty oil from the Outer Continental Shelf for 
the fill of the SPR to 1.5 billion barrels. As such, there is no 
acquisition cost for this oil as Federal royalty oil is owned by the 
Government, although it does reduce receipts to the Treasury, thereby 
increasing the deficit.. This oil would be transferred to DOE for SPR 
storage directly or exchanged for oil of equivalent value meeting SPR 
specifications prior to SPR storage. However, assuming a maximum 
royalty oil fill rate of 150,000 barrel per day and 2009 Budget oil 
price assumptions, the value of the oil that would be added to increase 
the SPR inventory from 1.0 billion to 1.5 billion, is estimated to be 
more than $40 billion.

    Question 1f. The Administration has announced that it intends to 
expand the capacity of the Strategic Petroleum Reserve to 1.5 billion 
barrels, apparently with an increase to 1 billion barrels--project 09-
FE-100, ``SPR One Billion Barrel Expansion.'' Please provide the 
following and describe the method used for each calculation:

    The estimated additional annual maintenance and operations cost 
associated with the additional expansion to 1.5 billion barrels (1) 
during development, and (2) once complete.
    Answer. There would be no additional maintenance and operations 
cost associated with expansion during the period the site expansions 
are taking place. The expansion cost includes all maintenance and 
operations costs associated with the expansion efforts until the site's 
expansion has been completed. Since the Department has not finalized 
its expansion plan, nor determined the number or locations of the sites 
to be developed for the expansion from 1.0 billion to 1.5 billion 
barrels, the additional annual maintenance and operations cost 
associated with the additional expansion to 1.5 billions barrels once 
complete, has not been estimated.



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