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



 
    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2008

                              ----------                              

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

                       NONDEPARTMENTAL WITNESSES

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

                      DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army

                       Corps of Engineers--Civil

        Prepared Statement of the Fifth Louisiana Levee District
    The Board of Commissioners for the Fifth Louisiana Levee District 
respectfully requests that construction funding for Mississippi River 
Levees be increased from the $28,767,000 contained in the proposed 
budget for fiscal year 2008, to the U.S. Army Corp of Engineers' 
capability of $98,352,000, and the Mississippi River Levee maintenance 
allocation be increased from the proposed $10,726,000 to $34,538,000.
    Reduced funding, combined with the inability to let construction 
contracts under a continuing contract clause, has left thousands in 
Louisiana vulnerable to the adverse effects of a deficient levee 
system. Construction of levee enlargements is essential if the levee is 
to contain high river stages that are sure to come eventually.
    The effect of fully funded contracts for levee construction, now 
required under Public Law 109-103, (Sec. 106 and 108), adopted by the 
109th Congress in 2005, as opposed to the previous system of continuing 
contract clauses, has virtually halted enlargement of the Mississippi 
River Levee System in Louisiana. This comes at a time when the State of 
Louisiana is still reeling from the effects of devastation caused by 
serious lack of funding for levees in the past. Administration after 
administration has cut funding for levee systems and flood control, 
providing less and less with each new Federal budget. The current 
proposed budget is no exception, with only $260,000,000 allocated for 
the entire Mississippi River and Tributaries (MR&T) project. We request 
that be increased to the Corp's capabilities of $500,000,000.
    Less than $10 billion has been invested in the MR&T Project since 
its authorization following the great flood of 1927, a fraction of the 
billions that have been spent trying to restore the damage to lives and 
property created by levee failures following Hurricane Katrina. 
Billions spent that have made almost no impact.
    We urge Congress to increase funding to the Corps of Engineers in 
fiscal year 2008, to ensure that the Corps is not forced to halt of 
delay contracts for levee construction essential to the well-being of 
this Nation. It is vital that the MR&T project(s) be completed at the 
earliest possible date. This can only be accomplished through adequate 
funding and repeal of the mandate for contracts to be fully funded 
prior to the beginning construction. Prior to August 2005, the MR&T 
projects had a performance-to-cost ratio of 24-to-1 on work completed. 
Hurricane Katrina changed that ratio drastically. The economic 
justification for increased funds for levee construction in Louisiana 
cannot be questioned or disputed.
                                 ______
                                 
 Prepared Statement of the Clark County Regional Flood Control District
    Testimony for the United States Army Corps of Engineers Tropicana 
and Flamingo Washes Flood Control Project, Las Vegas, Nevada.--
$12,500,000 construction appropriations, which includes appropriations 
for work performed pursuant to Section 211 of the Water Resources 
Development Act of 1996.
    Presented herewith is testimony in support of $12,500,000 for the 
final construction appropriation necessary for the U.S. Army Corps of 
Engineers (Corps) to complete the Tropicana and Flamingo Washes flood 
control project (hereafter referred to as the Project) in Clark County, 
Nevada, and to reimburse the non-Federal sponsors, Clark County and the 
Clark County Regional Flood Control District, for work performed in 
advance of the Federal Project pursuant to Section 211 of the Water 
Resources Development Act (WRDA) of 1996.
    The President's fiscal year 2008 Civil Works budget request to 
Congress identifies no funding for this Project. It is imperative that 
we receive the requested Federal funding to protect residents of the 
rapidly growing Las Vegas Valley in Southern Nevada from devastating 
floods.
    Some history of previous funding requests and budgeting challenges 
associated with bringing this Project to a close need to be explained 
and outlined. On March 6, 2006, we learned that fiscal year 2004 and 
2005 appropriations for the Project were reprogrammed to other projects 
in the Los Angeles District in the amount of approximately $7,000,000. 
While a commitment was made to us by the Corps to reinstate these funds 
in fiscal year 2006, they were not made available to us due to language 
changes in the Conference Report that accompanies H.R. 2419. In order 
to see the construction of the Project continue, we asked and received 
permission to use the $3 million of Section 211 funds from fiscal year 
2006 appropriations to increase funding of Construction General. We 
also contributed an additional $1 million to the Project by advancing 
our 5 percent cash commitment earlier than originally anticipated. 
These steps were necessary to prevent the Project from shutting down in 
mid-construction. In fiscal year 2007, we submitted testimony 
requesting $22 million for Construction General and Section 211. We now 
learn that under current Continued Resolution Authority, the Project 
may receive Federal funding in fiscal year 2007 in the amount of only 
$12.4 million--the lesser of the two budgets authorized by the House 
and Senate. This is almost $10 million less than the original request. 
And to further muddy the waters, the President's fiscal year 2008 Civil 
Works budget request to Congress identifies no funding to complete this 
Project.
    Because the Corps' budget requests are made well in advance of the 
fiscal year 2008 budget being announced, the Corps may have assumed--
that if we had received the $22 million request in 2007--the Project 
would have been completed and no further funding for Section 211 or 
construction would have been requested or necessary. Clearly, now, 
that's not what occurred and another $12.5 million is necessary to 
bring the Project to a close and provide what is due under Section 211.
    The non-Federal sponsors are, therefore, requesting $12.5 million 
for both the final construction funding and reimbursement to the local 
sponsors of this Project. Funding at this level will allow the Federal 
commitments made in the past to be finally realized and completed in 
fiscal year 2008.
    The Feasibility Report for the Project was completed in October 
1991, and congressional authorization was included in the WRDA of 1992. 
The first Federal appropriation to initiate construction of the Project 
became available through the Energy and Water Resources Development 
Appropriations Bill signed into law by the President in October 1993. 
The Project Cooperation Agreement (PCA) was fully executed in February 
1995. Federal appropriations to date have totaled $281.7 million 
(allocations $239.1 million), allowing continued Project construction. 
The total cost of the flood control portion of the Project is currently 
estimated at $336.3 million, higher than originally anticipated 
primarily due to the delay in Federal appropriations which has resulted 
in increases in real estate and construction costs.
    In order to provide the required flood protection in a timely 
fashion, the non-Federal sponsors are implementing certain features in 
advance of the Federal Government pursuant to Section 211 of WRDA 1996. 
An amendment to the PCA was fully executed on December 17, 1999, that 
formalizes the provisions of Section 211 of WRDA 1996. Section 211(f) 
of WRDA 1996 recognized the Project as one of eight projects in the 
Nation to demonstrate the potential advantages and effectiveness of 
non-Federal implementation of Federal flood control projects. The work 
funded by the non-Federal sponsors and completed is substantial and 
includes features that were designed by the non-Federal sponsors and 
constructed by either the Federal Government or the non-Federal 
sponsors. The language contained in the fiscal year 2000 Energy and 
Water Development Bill, Senate Report 106-58, states in part, ``The 
Committee expects . . . every effort to even out reimbursement payments 
to lessen future budgetary impacts.'' To date, only $13.5 million has 
been reimbursed of the previously authorized $20.6 million.
    The local community had constructed certain elements of the Project 
prior to the execution of the PCA. These Project elements required 
modifications in order to fit into the Corps' plan and fulfill the need 
for a ``total fan approach'' to the flooding problems in the Las Vegas 
Valley. The work performed by the non-Federal sponsors, construction of 
Red Rock Detention Basin and Flamingo Detention Basin, has been 
accounted for in Section 104 credits and totals $9,906,000.
    We have already realized some benefits from construction of flood 
control features on the Project We have removed 18.7 square miles of 
flood zones from Federal Emergency Management Agency's (FEMA) Flood 
Insurance Rate Maps. This was accomplished through the completion of 
various project elements. We anticipate removal of additional flood 
zones when the Project is completed.
    In summary, the Project is an important public safety project 
designed to provide flood protection for one of the fastest growing 
urban areas in the Nation. We ask that the committee provide the 
Secretary of the Army with $12.5 million, in fiscal year 2008, in order 
to meet prior requests to complete the Project and to reimburse the 
non-Federal sponsors the Federal proportionate share of the work 
completed by the sponsors in advance of the Federal Government.
    The committee is aware that flood control measures are a necessary 
investment required preventing loss of life and damages to people's 
homes and businesses. Flood control is a wise investment that will pay 
for itself by preserving life and property and reducing the probability 
of repeatedly asking the Federal Government for disaster assistance. 
Therefore, when balancing the Federal budget, we believe a thorough 
analysis will show that there is substantial future Federal savings in 
disaster assistance that supports sufficient appropriations through the 
Civil Works Budget.
    las vegas growth, specific project benefits and flooding history
    The Las Vegas Valley continues to experience unprecedented growth. 
In the past 20+ years, people have moved into our area from all parts 
of the Nation to seek employment, provide necessary services, retire in 
the Sunbelt, and become part of this dynamic community. Approximately 
6,000 people relocate to the Las Vegas Valley every month of the year. 
Currently the population exceeds 1.9 million. The latest statistics 
show that more than 31,000 residential units are built annually. Once 
all of these factors are combined, the result is that the Las Vegas 
Valley continues to be one of the fastest-growing metropolitan areas in 
the Nation.
    The Project being constructed by the Corps is designed to collect 
flood flows from a 174-square-mile contributing drainage area. The 
Project includes three debris basins, five detention basins, 28 miles 
of primary channels, and a network of lateral collector channels. The 
debris basins collect flood flows from undeveloped Federal lands at the 
headwaters of the alluvial fans and trap large bedload debris before it 
enters the channels and causes erosion damage. The detention basins 
greatly reduce the magnitude of the flood flows so that the flows can 
be safely released and conveyed through the urbanized area at non-
damaging rates. A primary system of channels collects outflows from the 
debris and detention basins and conveys these floodwaters through our 
urban area. Lateral collector channels, which are funded locally, 
collect runoff from smaller developed watersheds and deliver it to the 
primary channels. Since flood flow over the alluvial fans, which ring 
the Las Vegas Valley, is so unpredictable in terms of the direction it 
will take during any given flood, all of the components of the Project 
are critical.
    In recent history, torrential rains deluged the Las Vegas Valley 
the morning of July 8, 1999, causing widespread drainage problems and 
major damages to public and private properties. Some of the greatest 
rainfall depths occurred over the southwest portions of the Las Vegas 
Valley resulting in significant flows in the Tropicana and Flamingo 
Washes. The runoff from this intense rainfall caused widespread street 
flooding and record high flows in normally dry washes and flood control 
facilities. The news media reported two deaths during this flood event, 
one of which was a drowning in the Flamingo Wash. Damages to public 
property caused by this storm were estimated at $20.5 million. The 
President declared Clark County a Federal Disaster Area on July 19, 
1999, recognizing the severity of damages to public and private 
properties. Significant damages could have been avoided if the Project 
had been fully implemented. However, those features of the Project that 
were completed did help to mitigate damages.
    On August 19, 2003 another flash flood hit the Las Vegas Valley and 
damaged hundreds of homes and businesses. Again in the winter of 2004-
2005, the area experienced heavier then normal rainfall amounts. That 
winter brought twice the area's average annual rainfall causing 
flooding along the Virgin and Muddy Rivers in Clark County, Nevada. 
Several areas in the Las Vegas Valley also experienced drainage 
problems. While the flood control features built as part of the Project 
helped to protect vast areas of our community, storms of this magnitude 
only reinforce the need to expeditiously build all flood control 
projects in the Las Vegas Valley.
                                 ______
                                 
          Prepared Statement of the City of Flagstaff, Arizona
                   rio de flag flood control project
    Chairman Dorgan, Ranking Member Domenici, and distinguished members 
of the subcommittee, thank you for allowing me to testify on behalf of 
the city of Flagstaff, Arizona in support of $8 million in the Army 
Corps of Engineers budget for the Rio de Flag flood control project in 
fiscal year 2008 and for an increased authorization, or 902(b) fix, for 
the project. The Rio de Flag flood control project is critically 
important to the city, to northern Arizona, and, ultimately, to the 
Nation.
    As you may know, Mr. Chairman, with this subcommittee's help over 
the last 3 fiscal years, Rio de Flag received more than $11 million to 
continue construction on this important project. We are extremely 
grateful that the subcommittee boosted this project well above the 
President's request both years, and we would appreciate your continued 
support for this project in fiscal year 2008.
    Like many other projects under the Army Corps's jurisdiction, Rio 
de Flag received no funding in the President's fiscal year 2008 budget, 
although the Corps has expressed a capability of $8 million to continue 
construction on the project. We are hopeful that the subcommittee will 
fund the Rio de Flag project at $8 million when drafting its bill in 
order to keep the project on an optimal schedule.
    Flooding along the Rio de Flag dates back as far as 1888. The Army 
Corps has identified a Federal interest in solving this long-standing 
flooding problem through the Rio de Flag, Flagstaff, Arizona--
Feasibility Report and Environmental Impact Study (EIS). The 
recommended plan contained in this feasibility report was developed 
based on the following opportunities: (1) flood control and flood 
damage reduction; (2) environmental mitigation and enhancement; (3) 
water resource management; (4) public recreation; and (5) redevelopment 
opportunities. This plan will result in benefits to not only the local 
community, but to the region and the Nation.
    The feasibility study by the Corps of Engineers has revealed that a 
500-year flood could cause serious economic hardship to the city. In 
fact, a devastating 500-year flood could damage or destroy 
approximately 1,500 structures valued at more than $450 million. 
Similarly, a 100-year flood would cause an estimated $100 million in 
damages. In the event of a catastrophic flood, over half of Flagstaff 
's population of more than 60,000 would be directly impacted or 
affected.
    In addition, a wide range of residential, commercial, downtown 
business and tourism, and industrial properties are at risk. Damages 
could also occur to numerous historic structures and historic Route 66. 
The Burlington Northern & Santa Fe Railway (BNSF), one of the primary 
east-west corridors for rail freight, could be destroyed, as well as 
U.S. Interstate 40, one of the country's most important east-west 
interstate links. Additionally, a significant portion of Northern 
Arizona University (NAU) could incur catastrophic physical damages, 
disruptions, and closings. Public infrastructure (e.g., streets, 
bridges, water, and sewer facilities), and franchised utilities (e.g., 
power and telecommunications) could be affected or destroyed. 
Transportation disruptions could make large areas of the city 
inaccessible for days.
    Madame Chairwoman, the intense wildfires that have devastated the 
West during the last several years have only exacerbated the flood 
potential and hazard in Flagstaff. An intense wildfire near Flagstaff 
could strip the soil of ground cover and vegetation, which could, in 
turn, increase runoff and pose an even greater threat of a catastrophic 
flood.
    In short, a large flood could cripple Flagstaff for years. This is 
why the city believes it is important to ensure that this project 
remains on schedule and that the Corps is able to utilize its expressed 
capability of $8 million in fiscal year 2008 for construction of this 
flood control project.
    In the city's discussions with the Corps, both the central office 
in Washington and its Los Angeles District Office also believe that the 
Rio de Flag project is of the utmost importance and both offices 
believe the project should be placed high on the subcommittee's 
priority list. We are hopeful that the subcommittee will consider this 
advice and also place the project high on its priority list and fully 
fund the project at $8 million for fiscal year 2008.
    It is important to note that the city has secured the necessary 
property rights to begin construction, and the city is prepared to 
assume the costs for the non-Federal portion of the cost-sharing 
agreement.
    Finally, I strongly support inclusion of a 902(b) fix that was 
included in the fiscal year 2007 Senate Energy and Water Development 
Appropriations bill (as Section 113), which will increase the 
authorization of the project from $35 to $54 million, but was not 
included in the final bill due to the passage of the continuing 
resolution for fiscal year 2007. Nevertheless, because of the Corps' 
commitment to this project, on November 9, 2006, the Corps announced 
that they had approved a waiver to their policy to allow the 
construction contract award of Clay Avenue Wash Detention Basin prior 
to reauthorization of the total project. The current estimate for 
construction of the basin is $4.6 million. Without this increased 
authorization for the project, it cannot move forward as planned. 
Therefore, it is critically important that this provision is inserted 
in the bill:

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

    As you may know, project construction and implementation of Rio de 
Flag was authorized in the Water Resources Development Act (WRDA) of 
2000. The total project cost is now estimated to be $54,100,000 in and 
above the reconnaissance study or the feasibility study. The non-
federal share is currently $24,000,000 and the Federal share is 
currently $30,000,000. Final project costs must be adjusted based on 
Value Engineering and final design features. It is important to note 
the City of Flagstaff has already committed more than $10,500,000 to 
this project, and an additional $2,000,000 in excess of its cost share 
agreement. This clearly demonstrates the city's commitment to 
completing this important project. Through this investment in the 
project, the city has entered into the Project Cooperation Agreement 
(PCA) with the Department of the Army.
    The city of Flagstaff, as the non-federal sponsor, is responsible 
for all costs related to required Lands, Easements, Rights-of-Way, 
Relocations, and Disposals (LERRD's). The city has already secured the 
necessary property rights to begin construction in 2004. Implementation 
of the city's Downtown and Southside Redevelopment Initiatives 
($100,000,000 in private funds) are entirely dependent on the 
successful completion of the Rio de Flag project. The Rio de Flag 
project will also provide a critical missing bike/pedestrian connection 
under Route 66 and the BNSF Railroad to replace the existing hazardous 
at grade crossings.
    Both design and construction are divided into two phases. Phase I 
construction commenced in 2004. Phase II of the project commenced in 
2005.
    Mr. Chairman, the Rio de Flag project is exactly the kind of 
project that was envisioned when the Corps was created because it will 
avert catastrophic floods, it will save lives and property, and it will 
promote economic growth. In short, this project is a win-win for the 
Federal Government, the city, and the surrounding communities.
    Furthermore, the amount of money invested in this project by the 
Federal Government--approximately $30 million--will be saved 
exponentially in costs to the Federal Government in the case of a large 
and catastrophic flood, which could be more than $450 million. It will 
also promote economic growth and redevelopment along areas that are 
currently underserved because of the flood potential.
    In conclusion, the Rio de Flag project should be considered a high 
priority for this subcommittee, and I encourage you to support full 
funding of $8 million for this project in the fiscal year 2008 Energy 
and Water Development Appropriations bill. I also strongly support the 
inclusion of an increased authorization, or 902(b) fix, for the project 
from $35 to $54 million. Thank you in advance for your consideration.
                                 ______
                                 
  Prepared Statement of the Arkansas River Basin Interstate Committee
    Mr. Chairman and members of the committee, I am Paul Latture II, 
Arkansas Chairman of the Arkansas River Basin Interstate Committee, 
from Little Rock, Arkansas.
    It is my privilege to present this statement on behalf of the 
Arkansas members of our committee in support of adequate funding for 
water resource development projects in our area of the Arkansas River 
Basin. Other members of the committee are: Mr. Jack Long, Little Rock; 
Mr. Jeff Pipkin, Russellville; Mr. Scott McGeorge, Pine Bluff; and Mr. 
Buck Shell, Van Buren.
    The public investment in the McClellan-Kerr has paid significant 
dividends over the life of the project. The most recent investment 
included the completion of the Montgomery Point Lock and Dam. Since the 
opening of Montgomery Point, there has been a 10 percent increase in 
total tonnage on the system. In 2005, there was an 8 percent increase 
in tonnage. This is a direct result of the increased reliability of the 
system. Without Montgomery Point Lock and Dam, the river system would 
have been closed 25 percent of the time, according to Corps of 
Engineers officials. We fully expect that tonnage will continue to 
increase. But maintaining the high reliability of the system depends on 
protecting the investment by funding projects such as the significant 
backlog of Operations and Maintenance that has built up over the years, 
by completing the Arkansas-White River Cut-off study and construction, 
and by fulfilling the wish of Congress in completing the 12-foot 
channel project.
    Mr. Chairman, Public Law 108-137 authorized a 12-foot channel on 
the McClellan-Kerr Arkansas River Navigation System. The Corps is now 
obligated to operate and maintain the system as a 12-foot channel. Over 
90 percent of the system currently is adequate for a 12-foot channel. 
Deepening the remainder of the channel to 12 feet will allow carriers 
to place 43 percent more cargo on barges, which will reduce the amount 
of fuel consumed and emissions released. Funds in the amount of $7.0 
million were allocated in fiscal year 2005. Those funds were used to 
complete the Feasibility Study and Environmental Impact Statement with 
the balance used on engineering, design, and construction activities. 
Environmental benefits include the creation of new aquatic habitat 
through new dike construction and the construction of Least Tern 
islands through beneficial use of dredged material. The Corps of 
Engineers has developed a comprehensive plan to execute the project in 
the States of Arkansas and Oklahoma to the best advantage of both 
States and the best use of the funds.
    Therefore, we request $40 million to maintain the authorized depth 
and execute the plan to its full capability in fiscal year 2008. This 
investment will increase the cost competitiveness of this low cost, 
environment-friendly transportation mode and help us combat the loss of 
industry and jobs to overseas.
    Arkansas-White Rivers Cutoff Study is to determine a permanent 
solution to prevent the developing cutoff from joining the Arkansas and 
White River near the confluence of the McClellan-Kerr Arkansas River 
Navigation System and the Mississippi Rivers. If not corrected this 
occurrence could have a dramatic adverse affect on the navigation 
system. Unless corrected, this will effectively drain the water from 
the navigation system and halt the movement of commerce on the system.
    We request an appropriation of $3.5 million of which $400,000 will 
complete the study and $3.1 million will be used for design and 
construction activities at Jim Smith Lake and along the banks of the 
Arkansas and White Rivers to support navigation.
    Maintenance of the Navigation System.--In preparation for the 
deepening of the navigation system from 9 to 12 feet, there is a 
backlog of maintenance items that has been deferred due to insufficient 
budgets to allow proper maintenance. These maintenance items are 
required even to support navigation at the 9-foot depth in order to not 
jeopardize the reliability of the system. Therefore, we request funding 
for the Little Rock District of the Corps of Engineers to be at least 
$26 million for the upcoming fiscal year for routine and deferred 
channel maintenance. These funds would be used for such things as 
repair of bank stabilization work, needed advance maintenance dredging, 
and other repairs needed on the system's components that have 
significantly deteriorated over the past three decades.
    Mr. Chairman, we respectfully request that the committee consider 
these requests as the most important to our transportation system at 
this time. We must maintain this country's transportation 
infrastructure or little else will matter in the future.
                                 ______
                                 
 Prepared Statement of the Board of Levee Commissioners for the Yazoo-
                           Mississippi Delta
    On behalf of the thousands of citizens in its 10-county district in 
Mississippi, the Yazoo-Mississippi Delta Levee Board respectfully urges 
Congress to fund the Mississippi River and Tributaries Project (MR&T) 
to the full U.S. Army Corps of Engineers' 2008 capability of $500 
million.
    While the totality of the Mississippi Valley Flood Control 
Association's requested fiscal year 2008 Civil Works Requested Budget 
(documentation for which is attached) represents badly needed work 
items throughout the Mississippi Valley, we shall speak specifically to 
those critically important flood control needs within our levee 
district in this space allotted us.
    The Mainline Mississippi River levee system is one of the great 
engineering successes in America. For 75 years it has protected lives 
and livelihoods within the shadow of the Father of All Waters, and it 
will continue to do so in the years ahead--but only if properly 
strengthened and maintained. We urge Congress to appropriate the needed 
$98.352 million to maintain our levees and keep our citizens safe and 
dry. Within that we will be able to do two seepage control projects at 
Farrell and Trotter's.
    It is only through a lack of required funding that one of the most 
successful and non-controversial flood control projects in the United 
States has come to a grinding halt in our district. The Upper Yazoo 
Project (UYP), which our board is proud to sponsor, is the prototypical 
example of what a flood control project should be--effective, 
environmentally sound, universally favored. While flood control efforts 
in other areas are threatened or stalled by lawsuits and citizen 
upheaval, the UYP has everyone's blessing, and is absent only the funds 
to complete it.
    Restoring the Yazoo/Coldwater/Tallahatchie river system to its flow 
capacity and stopping interbasin transfer of flood waters, the UYP is 
about two-thirds complete. The city of Greenwood, Mississippi, is 
already receiving its benefits. But upstream, such areas as Marks, 
Lambert, Moorhead, Mississippi Delta Community College, Tutwiler, 
Glendora, Sumner and Webb are not--and will not unless Congress 
dedicates the $22.5 million which the Corps of Engineers needs for 
scheduled work in 2008.
    We implore Congress to appropriate the needed $22.5 million for the 
UYP so that structures might be constructed, a bridge relocated, and 
another section of the river system restored to its proper capacity. 
Thousands of our citizens remain unprotected from flood waters; we turn 
to Congress to give them relief.
    Working hand-in-hand with the UYP in a common sense approach to 
flood control is the Mississippi Delta Headwater Project, through which 
waters and the stream-filling silts which they carry, are controlled. 
The UYP would clear out our waterways, the Delta Headwater Project 
would reduce the rate at which they would re-silt. We urge Congress to 
appropriate the needed $25 million for this effort to continue in 2008.
    Without proper mitigation practices, of course, all flood control 
projects would be threatened. Our levee district is very concerned that 
mitigation lands, once acquired, are not being rapidly enough turned 
over to Federal and State wildlife management agencies to ensure the 
desired public benefits. A lack of management monies is frequently 
blamed for that, so we are asking that adequate funds be appropriated 
and designated for proper management authority and practice on 
mitigation lands.
    Mississippi's four flood control reservoirs play a critical role in 
managing water from the hills and avoiding untimely releases into the 
low-lying Delta where they can wreak havoc. But as critical as these 
facilities are, they are aging and maintenance monies are deeply needed 
to ensure their integrity. Therefore we ask that respective maintenance 
funds be allocated for these reservoirs as follows:
  --Sardis Lake--$14.784 million.
  --Arkabutla Lake--$9.975 million.
  --Enid Lake--$10.927 million.
  --Grenada Lake--$11.299 million.
    Due to the nature of its alluvial soils, bank stabilization is a 
critical need in the Delta and within our district. In the past, the 
Corps had the authority to prioritize this pervasive problem and deal 
directly with those situations in which significant public importance 
was involved--hospitals, major thoroughfares, schools and the like. One 
example in our district is where bank failure threatens major 
transportation arteries near the Rising Sun community south of 
Greenwood. But the empowering language for such no longer exists. We 
urge that either this language be restored for such projects 
nationwide, or, in the alternative, we urge Congress to specifically 
allocate the needed $820,000 needed to address this problem which 
potentially affects thousands.
    The Big Sunflower River Maintenance Project is jointly sponsored by 
Mississippi's two levee boards. The Draft Supplemental Environmental 
Impact Statement for this project, which would restore flood control 
capacities to 130 miles of channels by removing sediment built up over 
the past 40 years, will be released later this year and we request that 
$2.5 million be appropriated to allow right-of-way acquisition to 
continue and to award the dredging contract.
    The Corps of Engineers has the capacity to Initiate Tributaries 
Reformulation on inland feeder streams, many of which lie in our 
district, and we urge that Congress appropriate the $2 million Corps 
2008 capacity for this needed work.
    In another issue specific to our district, funds are needed to 
initiate a study of Gunn Bayou, south of Belzoni. Poor drainage causes 
localized flooding in this area.
    There are, however, two policy issues which combine to potentially 
threaten not only these, but every flood control project in the 
country--the recently abandoned principles of Continuing Contracts and 
Reprogramming. Now absent these two longstanding practices, the Corps 
has lost the flexibility to continue works in progress and reallocate 
funds by priority. We urge Congress to restore the practices of 
Continuing Contracts and Reprogramming throughout the MR&T.
    Finally, through the implementation of revised Levee Certification 
guides and some unfortunate and ill-advised flood insurance zone 
language, the Federal Emergency Management Agency has created a 
situation in which both future investment in the Delta and homeowner 
finances are threatened. The new FEMA levee protection guide and 
subsequent flood zone rating appears to ignore the protection afforded 
by the levee system for 75 years and stands to send homeowner insurance 
costs skyrocketing, according to one estimate, anywhere from 500 to 
1,600 percent.
    We urge Congress to seriously review and address this issue.
                                 ______
                                 
  Prepared Statement of the Arkansas River Basin Interstate Committee
    Mr. Chairman and members of the committee, I am James M. Hewgley, 
Jr., Oklahoma Chairman of the Arkansas River Basin Interstate 
Committee, from Tulsa, Oklahoma.
    It is my privilege to present this statement on behalf of the 
Oklahoma members of our committee in support of adequate funding for 
water resource development projects in our area of the Arkansas River 
Basin. Other members of the committee are: Mr. Ted Coombes, Tulsa; Mr. 
A. Earnest Gilder, Muskogee; Mr. Terry McDonald, Tulsa; and Mr. Lew 
Meibergen, Enid, who also serves as Chairman of the combined Arkansas 
River Basin Interstate Committee representing the five States within 
the Arkansas River Basin.
    Mr. Chairman, Public Law 108-137 authorized a 12-foot channel on 
the McClellan-Kerr Arkansas River Navigation System. The Corps is now 
obligated to operate and maintain the system as a 12-foot channel. Over 
90 percent of the system currently is adequate for a 12-foot channel. 
Deepening the remainder of the channel to 12 feet will allow carriers 
to place 43 percent more cargo on barges, which will reduce the amount 
of fuel consumed and emissions released. Funds in the amount of $7.0 
million were allocated in fiscal year 2005. Those funds were used to 
complete the Feasibility Study and Environmental Impact Statement with 
the balance used on engineering, design, and construction activities. 
Environmental benefits include the creation of new aquatic habitat 
through new dike construction and the construction of Least Tern 
islands through beneficial use of dredged material. The Corps of 
Engineers has developed a comprehensive plan to execute the project in 
the States of Arkansas and Oklahoma to the best advantage of both 
States and the best use of the funds.
    Therefore, we request $40 million to maintain the authorized depth 
and execute the plan to it's full capability in fiscal year 2008. This 
investment will increase the cost competitiveness of this low cost, 
environment-friendly transportation mode and help us combat the loss of 
industry and jobs to overseas.
    Tow Haulage Equipment--Oklahoma.--We request funding of $6.5 
million to initiate the installation of tow haulage equipment on the 
locks located along the Arkansas River portion of the McClellan-Kerr 
Arkansas River Navigation System. Total cost for these three locks is 
$6.5 million. This project will involve installation of tow haulage 
equipment on W.D. Mayo Lock and Dam No. 14, Robert S. Kerr Lock and Dam 
No. 15, and Webbers Falls Lock and Dam No. 16, on the Oklahoma portion 
of the waterway. The tow haulage equipment is needed to make 
transportation of barges more efficient and economical by allowing less 
time for tows to pass through the various locks.
    Arkansas-White Rivers Cutoff Study is to determine a permanent 
solution to prevent the developing cutoff from joining the Arkansas and 
White River near the confluence of the McClellan-Kerr Arkansas River 
Navigation System and the Mississippi Rivers. If not corrected this 
occurrence could have a dramatic adverse affect on the navigation 
system. Unless corrected, this will effectively drain the water from 
the navigation system and halt the movement of commerce on the system.
    We request an appropriation of $3.5 million of which $400,000 will 
complete the study and $3.1 million will be used for design and 
construction of a permanent fix at Jim Smith Lake.
    Maintenance of the Navigation System.--In preparation for the 
deepening of the navigation system from 9 to 12 feet, there is a 
backlog of maintenance items that has been deferred due to insufficient 
budgets to allow proper maintenance. These maintenance items are 
required even to support navigation at the 9 foot depth in order to not 
jeopardize the reliability of the system. Therefore, we request 
additional funding in the amount of $1,549,000--plus the amount from 
Little Rock, over and above normal funding, for deferred channel 
maintenance. These funds would be used for such things as repair of 
bank stabilization work, needed advance maintenance dredging, and other 
repairs needed on the system's components that have deteriorated over 
the past three decades.
    In addition to the system-wide needed maintenance items mentioned 
above, the budget for the Corps of Engineers for the past several years 
has been insufficient to allow proper maintenance of the McClellan-Kerr 
Arkansas River Navigation System--Oklahoma portion. As a result, the 
backlog of maintenance items has continued to increase. If these 
important maintenance issues are not addressed soon, the reliability of 
the system will be jeopardized. The portion of the system in Oklahoma 
alone is responsible for returning $2.6 billion in annual benefits to 
the regional economy. The fiscal year 2006 O&M President's budget for 
Tulsa District was $8.2 million less (over 11 percent) than the fiscal 
year 2005 appropriation, which will result in no funding being 
available for critical infrastructure maintenance in fiscal year 2006. 
The fiscal year 2007 O&M President's budget is currently proposed at 
$72.4 million which is presently $10 million more than the fiscal year 
2006 budget. This $10 million increase is offset by higher energy, 
labor, and construction costs. We therefore request that $2.1 million 
be added to the budget to accomplish critical infrastructure 
maintenance items on the Oklahoma portion of the system as follows:
    McClellan-Kerr.--$600,000 to repair plate seals for the weirs;
    Robert S. Kerr.--$1,500,000 to repair erosion and construct 
emergency mooring wood dolphins.
    Mr. Chairman, we respectfully request that the committee consider 
these requests as the most important to our transportation system at 
this time. We must maintain this country's transportation 
infrastructure or little else will matter in the future.
                                 ______
                                 
  Prepared Statement of the Upper Mississippi River Basin Association 
                                (UMRBA)

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

    The Upper Mississippi River Basin Association (UMRBA) is the 
organization created in 1981 by the Governors of Illinois, Iowa, 
Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating 
river-related State programs and policies and for collaborating with 
Federal agencies on regional issues. As such, the UMRBA works closely 
with the Corps of Engineers on a variety of programs. Of particular 
interest to the basin States are the following:
         upper mississippi and illinois rivers navigation study
    It has been more than 2 years since the Corps completed its 14-year 
Upper Mississippi and Illinois Rivers Navigation Study, issuing the 
final feasibility report in September 2004 and the Chief's Report in 
December 2004. While Congress has not yet authorized the recommended 
integrated plan for navigation improvements and ecosystem restoration, 
it has provided preconstruction engineering and design (PED) funding to 
insure that necessary planning and design work can proceed, in 
anticipation of construction authorization. Congress appropriated $13.5 
million for PED in fiscal year 2005 and $10.0 million in fiscal year 
2006. A similar bridging strategy will be necessary in fiscal year 2008 
if authorization remains pending.
    PED.--The UMRBA supports $24.0 million for PED in fiscal year 2008, 
despite the fact that the administration has once again not included 
PED in its budget request. Many of the large scale projects, such as 
new locks or fish passage at dams, require 3 years or more of PED 
before they can move to construction. It is thus critical that PED work 
continue without pause and be sustained over time. In the past, PED 
funding has been directed to both navigation improvements and ecosystem 
restoration projects. This has not necessarily meant providing 
identical amounts to these two major components on an annual basis, but 
has involved attempting to ensure meaningful and substantial progress 
in planning for both navigation improvements and ecosystem restoration. 
If the Corps were to receive PED funding of $24.0 million in fiscal 
year 2008, it is anticipated that approximately $1.5 million would be 
directed to program management and completion of the economic 
reevaluation interim report, with the $22.5 million balance divided 
roughly evenly between navigation measures (including small scale 
measures and lock design at three sites) and ecosystem restoration plan 
formulation and evaluation. (Note.--The PED allocation for fiscal year 
2007 remains to be determined. It is imperative that the Office of 
Management and Budget permit the Corps to allocate reasonable and 
necessary funds to PED in fiscal year 2007. Approximately $18.0 million 
is needed for fully functional PED this year.)
    Construction.--If the integrated navigation and ecosystem 
restoration program is authorized for construction this year, 
construction could be initiated on several projects in fiscal year 
2008. In that event, UMRBA would recommend construction funding of 
$16.2 million. This funding would support mooring cells at 3 sites, 
switchboats, channel work upstream of Lock 22, fish passage at L&D 22, 
and several other ecosystem restoration projects, with approximately 
$7.6 million going to navigation improvements and $8.6 million going to 
ecosystem projects. This initial fiscal year 2008 construction 
increment would also enable the Corps to launch major construction 
activities, including work on large scale measures, in fiscal year 
2009, with full program implementation possibly beginning in fiscal 
year 2010.
         upper mississippi river restoration program (aka emp)
    In fiscal year 2007, the Upper Mississippi River Restoration 
Program, commonly known as the Environmental Management Program (EMP), 
marked 20 years as the premier program for restoring the river's 
habitat and monitoring the river's ecological health. Members of 
Congress, agency leaders, stakeholder groups, and members of the public 
all joined the Corps of Engineers in celebrating the EMP's many 
successes, including both significant contributions to river science 
and dramatic on-the-ground habitat improvements. Given this tremendous 
record of success, the UMRBA is pleased that the administration has 
again identified the EMP as one of six construction projects considered 
to be national priorities. Even with this emphasis, however, the 
administration has requested only $23.46 million for the EMP in fiscal 
year 2008. This would continue the trend of the past 10 years, in which 
the annual EMP appropriation has fallen short of the authorized funding 
level. The UMRBA strongly urges Congress to appropriate full funding of 
$33.52 million for the EMP in fiscal year 2008.
    The administration's proposed $23.46 million budget would support 
planning, engineering, design, and construction work on 23 habitat 
restoration projects. In addition, the fiscal year 2008 request would 
support modest expansion of targeted research and data acquisition and 
management efforts under the Long Term Resource Monitoring Program 
(LTRMP), which has suffered substantially from the funding shortfalls 
in recent years. However, to realize its full promise, the EMP requires 
funding at the full authorized amount of $33.52 million. This would 
support construction on three additional projects. It would also permit 
accelerated work on several other projects, thereby increasing overall 
program efficiency. Finally, funding at the full capability level would 
support LTRMP research on critical science questions and the 
acquisition of data needed for balanced river management, such as LIDAR 
terrain data. Therefore, the UMRBA urges Congress to fund the EMP at 
its full authorized amount of $33.52 million.
    UMRBA remains concerned about a 2006 directive from OMB that $3 
million of fiscal year 2007 EMP funding be devoted to development of a 
``10-year aquatic ecosystem restoration plan.'' Such a plan is 
unnecessary and would duplicate plans that the Corps completed as part 
of the 2004 Navigation Study. It is unclear whether OMB will renew this 
directive now that fiscal year 2007 funding allocations are being made, 
or attempt to apply it in fiscal year 2008. However, given the backlog 
of EMP habitat restoration projects awaiting construction, and the vast 
number of unmet needs under the LTRMP, it would be misguided to divert 
construction funds from this important work to develop a plan that is 
largely duplicative. Congress should direct the Corps to use EMP funds 
exclusively for construction of habitat restoration projects and long 
term monitoring, as authorized in the 1999 Water Resources Development 
Act.
    UMRBA recognizes that one of the biggest challenges facing future 
restoration efforts on the Upper Mississippi River (UMR) will be 
integrating the work that is currently done under EMP with the new 
ecosystem/navigation authority being proposed. Congress is currently 
considering authorization of a new dual-purpose authority for the 
Corps, as recommended in the navigation feasibility study. For now, 
however, the EMP remains the single most effective and long-standing 
UMR ecosystem restoration program. Moreover, the EMP's monitoring 
element is entirely unique and would not be replicated under some 
versions of the proposed new authority. Therefore, fully funding the 
EMP is as important today as it has ever been. The EMP must not 
languish as questions related to future program streamlining and 
coordination are being addressed.
              major rehabilitation of locks and dams (l&d)
    Most of the locks and dams on the Upper Mississippi River System 
are over 60 years old and many are in serious need of repair and 
rehabilitation. For more than 20 years, the Corps has been undertaking 
major rehabilitation of individual facilities throughout the navigation 
system in an effort to extend their useful life. This work is critical 
to ensuring navigation reliability and safety.
    The UMRBA supports the President's fiscal year 2008 budget request 
for major rehabilitation work at L&D 11 ($6.3 million) and supports 
increasing the President's request for rehabilitation work at L&D 19 
($1.47 million), L&D 24 ($0.49 million), and Locks 27 ($11.26 million). 
Funding at these levels will permit timely and efficient rehabilitation 
of these critical navigation structures. Major rehabilitation of L&D 11 
and L&D 19 could be completed in fiscal year 2008. The planned work 
spans a broad range, including gate repair/replacement, concrete work, 
and mechanical and electrical upgrades.
    The UMRBA also supports funding for a major rehabilitation project 
that is not included in the President's request: L&D 3 at $5.0 million. 
Navigation safety and embankment failure have been a concern for over 
20 years at L&D 3, and river pilots agree that this is the most 
dangerous stretch of the Upper Mississippi to navigate. Should there be 
an accident, the adjacent embankments, which have been severely 
weakened by age and past accidents, could be breached. In this event, 
commercial navigation would be curtailed and two large power plants 
would be forced to shut down.
    operation and maintenance (o&m) of the upper mississippi river 
                           navigation system
    The Corps is responsible for operating and maintaining the Upper 
Mississippi River System for navigation. This includes channel 
maintenance dredging, placement and repair of channel training 
structures, stream gaging and water level regulation, and routine care 
and operation of 29 locks and dams on the Mississippi River and 7 locks 
and dams on the Illinois River. The fiscal year 2008 budget request 
totals approximately $187.23 million for O&M of this river system. 
These funds are critical to the Corps' ability to maintain a safe and 
reliable commercial navigation system, while protecting and enhancing 
the river's environmental values.
    Unfortunately, the President's fiscal year 2008 budget represents a 
further widening of the gap between the amount requested and the amount 
required for adequate operation and maintenance of the navigation 
system. In fiscal year 2006, the gap between the President's request 
and the Corps' capability was $52.14 million. In fiscal year 2008, this 
shortfall has increased to $92.18 million. For segments of the Upper 
Mississippi System, this will mean multiple years during which 
resources have not supported even baseline operation and maintenance, 
resulting in an increasing backlog, elimination of important stream 
gages, and a growing risk of failures and service interruptions. 
Responses to these continued fiscal pressures may include reductions in 
lock operating hours and cancellations of ongoing contracts. Funding 
beyond the President's request is needed to restore basic service 
levels, coordinate major maintenance with major rehabilitation at L&D 
11 and 19, and undertake a variety of other critical O&M work.
    The UMRBA supports increased funding for O&M of the Upper 
Mississippi and Illinois River System to meet routine operation and 
maintenance needs, and to address the growing unfunded maintenance 
backlog. The Upper Mississippi River System is simply too valuable to 
invite disaster through chronic underfunding of basic O&M. For fiscal 
year 2008, O&M funding totaling $279.41 million is needed on the Upper 
Mississippi River System to address ongoing needs and critical backlog 
items.
                       inland waterways user fees
    In releasing the President's fiscal year 2008 budget request for 
the Corps of Engineers, Assistant Secretary of the Army John Woodley 
announced that the administration plans to propose a new inland 
waterways user fee. There are many important unknowns, including most 
notably the form and magnitude of this new fee and its relationship to 
the existing inland waterways fuel tax, authorized as part of the 1986 
Water Resources Development Act. Given the lack of specifics, the UMRBA 
has not taken a position, but would urge Congress to proceed with great 
care in response to any such proposal. The impacts on operators and 
shippers are potentially profound and issues such as economic 
disruption, equity among waterways beneficiaries, and implications for 
the Nation's intermodal system must be fully understood and evaluated. 
The UMRBA States would be very concerned with any proposal that would 
undermine the vitality and efficiency of the Upper Mississippi River 
System, which is so central to the region's economy.
                                 ______
                                 
 Prepared Statement of the Mississippi Valley Flood Control Association
    My name is M.V. Williams and I reside in Germantown, Tennessee. I 
am the president of the West Tennessee Tributaries Association. It is 
also my pleasure and a privilege afforded me by the other nine members 
of the executive committee, to serve as chairman of that committee that 
has the responsibility for the management and direction of the 
Mississippi Valley Flood Control Association in accordance with 
policies duly adopted by the association. This statement on behalf of 
the association presents their views on the fiscal year 2008 budget for 
the Mississippi River and Tributaries Project and their request for 
$500 million.
    Since there are new members on the subcommittee and to refresh the 
memory of those that have served previously, I will briefly discuss the 
Mississippi Valley Flood Control Association which is an agency 
composed almost entirely of public bodies having local responsibility 
for flood control, drainage, bank stabilization and navigation 
improvements in parts of Illinois, Kentucky, Tennessee, Missouri, 
Arkansas, Mississippi and Louisiana. Our members are public officials 
who for the most part are elected by the people. The Association 
represents practically all of the levee and drainage districts, 
municipalities, port and harbor commissions and other State agencies in 
the Mississippi River Valley. These organizations and agencies are 
political subdivisions of the various States in which they are 
organized and function. We provide an agency through which all the 
people of the Mississippi River Valley may speak and act jointly on all 
flood control, navigation, bank stabilization and major drainage 
problems. We have appeared before the subcommittee and served the 
people in the Mississippi River Valley for over 70 years.
    Our Association is comprised of a very large group of individuals 
who are businessmen, property owners, conservationists, farmers, 
attorneys, doctors, wildlife enthusiasts, engineers, accountants, 
environmentalists, civil servants and elected officials from all 
political parties. Since 1935, our president and two vice presidents 
have been members of the United States Congress, a fact of which we are 
extremely proud. Our president this year is that great public servant 
and one of the real heroes of the Vietnam conflict, the Congressman 
from the Third District of Iowa, the Honorable Leonard Boswell. Our two 
vice presidents are Congressmen Roger Wicker from Mississippi and 
Edward Whitfield from Kentucky.
    The value of flood control and economic reality of the need for 
waterborne commerce is well known by the Congress. Therefore I will not 
go into details but for the sake of confirming what is already known, 
let me tell you that since 1928 the Nation has invested $12 billion for 
the Mississippi River and Tributaries Project. For that investment the 
Nation has realized a return of $425.5 billion that includes savings on 
transportation costs and flood damages prevented. That's a return on 
investment of $35.50 for every $1 invested. What a wonderful investment 
of taxpayers' dollars.
    Today we find ourselves again faced with an inadequate budget from 
the executive department but fortunately for us and the other citizens 
of this great Nation, the Congress in its wisdom has always recognized 
the value of such an investment and has consequently, with only rare 
exceptions, appropriated more dollars for the Mississippi River and 
Tributaries Project than has been requested by the executive 
department. We hope that happens again this year.
    We are in Washington for our 72nd Annual Spring Meeting and as 
improbable as it may seem we find the U.S. Army Corps of Engineers 
under fire from within the executive branch and of course the so-called 
environmentalists. This is the same Corps of Engineers that has in 
peace time for over 225 years built the infrastructure that is the envy 
of the rest of the civilized world and that has also defended our 
Nation in times of conflict. My war of participation was World War II 
which as all of you know involved numerous amphibious landings. Leading 
each of those landings were the U.S. Army Amphibious Engineers who were 
competently led by General Daniel Noce who served as District Engineer 
in the Memphis District during the record flood of 1937. General Noce 
was well aware of the training and experience that both young army 
officers and civilians had gained while part of the Mississippi Valley 
Division and he recruited the cadre of the amphibious engineers from 
that group. In fact the Corps of Engineers has defended our Nation from 
the War for Independence to the war on terror, from Bunker Hill to 
Baghdad. I know of no justification for the attitude that some have 
taken concerning the Corps of Engineers. This attitude is having and 
will continue to have a detrimental impact on economic development in 
this country.
    I am well aware that the purpose of this statement is to discuss 
fiscal year 2008 appropriations for the Mississippi River and 
Tributaries Project but I believe it is appropriate to mention at this 
time new policies being implemented by the Federal Emergency Management 
Agency in their map modernization program. This program is a 5-year 
program that was initiated in 2004 and consists of updating the flood 
insurance rate maps. We've been told that 20 percent of all counties 
nationwide are scheduled for update.
    Of great concern to us and should be of concern to everyone is a 
new zone designation known as Zone X (shaded) which will be all the 
areas outside the 100-year flood zone protected by levees. In the case 
of the lower Mississippi River Valley, from approximately Cape 
Girardeau, Missouri to the Gulf of Mexico, this is an area of some 
35,000 square miles or 22,400,000 acres. A warning will be placed on 
the new flood insurance rate maps that will, among other things, state 
that within this area communities should issue evacuation plans and 
encourage property owners to purchase flood insurance.
    This large area that is protected not only by the Mississippi River 
and Tributaries Levees but also by the entire Comprehensive Flood 
Control System consisting of not only levees but bank revetments, river 
cut-offs, floodways, floodwalls, diversions, flood storage reservoirs, 
control structures and many other improvements that have made certain 
that no Mississippi River Main Line Levee has failed since 1928, the 
year that the Congress directed the Corps of Engineers to build the 
system. There have been a number of floods of record proportions since 
then but not one failure. The design flood for the Mississippi River 
and Tributaries Project is to protect against a flood predicted by the 
weather bureau as the ``maximum possible'' and provides for the 
disposal of all water predicted as possible.
    This unwarranted new Zone X on Flood Insurance Rate Maps will have 
a dramatic and costly burden on all the residents, businesses and 
industries along the lower Mississippi River and its tributaries and 
this economic disaster will be felt over this entire Nation. The 
language proposed will frighten lenders and companies looking for 
industrial sites, impact crop loans as well as causing millions of 
dollars to be spent for unnecessary flood insurance premiums. This is 
such a serious matter that we would suggest strongly that the 
appropriate congressional committees hold hearings on this matter to 
determine what if any engineering basis the Federal Emergency 
Management Agency used to develop this new policy.
    Again, this statement is in support of the Mississippi River and 
Tributaries Appropriations and our request is being made only after 
careful and thoughtful considerations of the amount necessary to 
prevent the cancellation of on going contracts and to do the minimum 
amount of required maintenance work. The Mississippi River and 
Tributaries Project is unique in the fact that the appropriations 
allocated are used not only for construction but also for maintenance 
and not only for flood control but also for navigation and includes all 
environmental considerations including mitigation and restoration as 
well as irrigation and water supply.
    It is our collective opinion that to meet the requirements outlined 
above, the appropriation for the Mississippi River and Tributaries 
Project for fiscal year 2008 should be $500 million. In order to 
preserve the integrity of our flood control and navigation systems that 
represents a large investment of national assets and to preserve and 
enhance the natural environment of the Mississippi River Valley and to 
continue the authorized work that is underway, the appropriation 
request is justified and should be considered as a wise investment in 
the future well-being of this great Nation.
    As we noted in our statement last year, of utmost importance to the 
overall success of the project is the completion of the work in both 
Louisiana and Mississippi to bring the deficient levees up to the 
required grade and section. Additional funds are needed here and 
because of the scope of the work the restrictions on reprogramming 
authorities and the elimination of the use of continuing contracts both 
need to be waived in order that this work to protect thousands of acres 
of valuable land and the lives of thousands of citizens can be 
completed as rapidly as possible. Because of these restrictions, 
contracts had to be shut down at considerable cost and the loss of 
valuable construction time. We ask the subcommittee for help in this 
important matter.
    With the help of the Congress over the years, we have made progress 
in the Mississippi River Valley and for that we are extremely grateful 
but there is much to be done before the job is completed and the people 
in the valley and the entire Nation may reap the benefits of what has 
been done.
    We have attached a sheet to this statement that reflects the 
Mississippi Valley Flood Control Association's request for 
Appropriations for the Mississippi River and Tributaries Project for 
fiscal year 2008.

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

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

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

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

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

    Please note that the needed additional funds to give the New 
Orleans Area that protection that is needed is not included in the 
above request. We believe it is proper that the funds for repairing and 
improving the existing hurricane protection systems continue to be 
provided through emergency supplemental appropriations so as not to 
detract from projects that must go through the normal appropriations 
process. We solicit your continued support in providing the 
supplemental funding necessary to complete the work.
                                 ______
                                 
        Prepared Statement of the Little River Drainage District
    My name is Dr. Sam M. Hunter, DVM of Sikeston, Missouri. I am a 
veterinarian, landowner, farmer and resident of Southeast Missouri.
    I am the President of the Little River Drainage District, the 
largest such entity in the Nation. Our District serves as an outlet 
drainage and flood control District to parts of seven counties in 
Southeast Missouri. We provide flood control protection to a sizable 
area of Northeast Arkansas as well. Our District is solely tax 
supported by more than 3,500 private landowners in Southeast Missouri.
    My remarks will be directed toward the President's budget for the 
Civil Works portion of the U.S. Army Corps of Engineers for fiscal year 
2008. The President's budget requests of $4.871 billion for Civil Works 
by the U.S. Army Corps of Engineers for the next fiscal year is totally 
inadequate and only represents 60 percent of the Corps capability. An 
amount of $8 billion is more realistic.
    Those funds when properly expended are INVESTMENTS yielding a 
return of substantial benefits to the American taxpayer throughout this 
Nation. They are used to prevent flooding to much of our valuable 
farmland, to industrial sites, and to upgrade our ever aging locks and 
dam system on our navigable streams which will prevent unscheduled lock 
closures, modernize our hydro-electric plants, and restore some of our 
environmental assets.
    Over 50 percent of our locks and dams are 50 to 60 years old. These 
facilities have exceeded their life expectancy by 10 to 20 years. In 10 
years that percentage will have grown to almost 60 percent unless 
improvements are made.
    We are witnessing unscheduled lock outages now and to continue as 
we are that number will continue to grow if we do not step forward with 
a specific plan to restore, rebuild and reconstruct lock and dams on 
our waterway systems. We already have leaking gates, crumbling lock 
walls and frequent unscheduled closures occurring which hurt and 
curtail economic growth to our Nation. Parts are actually having to be 
made for some repairs because manufactures no longer exist and such 
parts are not available.
    Today our fuel needs alone are 75 percent dependent upon foreign 
oil sources. Waterborne transportation is far more energy efficient 
than truck or rail modes. Our Nation, our consumers and our producers 
will all benefit from more use of our river navigation upgrades. Less 
fuel would be needed to move mass quantities of goods, lives would be 
saved due to the more safer means of transportation, the many miles of 
highways throughout our Nation would not be adversely impacted, our 
environment would be enhanced because of less exhaust emissions and our 
farmers, manufacturers and other producers could compete with the world 
markets.
    Further, to have a modern water transportation system would provide 
an excellent means to transport mass military equipment and troops 
throughout our Nation should such a need arise. How sad it would be to 
have an aging lock and dam system in place and fail during such a 
crisis. This Nation can construct modern infrastructure for others but 
seems to let its own taxpayers depend upon ancient features with no 
immediate plans to improve them. We can and we must set in order a 
program to modernize this valuable part of our infrastructure. It is 
past time to get this done.
    Our competing nations such as Brazil and China have committed much 
more for fiscal year 2008. China has committed more than $12 billion to 
their waterway infrastructure yet we are pleading for only two-thirds 
of that amount. We have a backlog within this part of our 
infrastructure of improvements that has grown from $200 million in 1998 
to more than $1 billion in fiscal year 2008 just for operations and 
maintenance. We appreciate very much Congress stepping forward as they 
did in 2006 and increasing the needed funds substantially. You should 
not be burdened with this task each year.
    We believe Congress needs to intervene and reverse the trend of 
OMB, and of past and present administrations. We have not seriously 
invested in our waterway infrastructure for decades but we must. Local 
economies will be affected positively by these investments. Local labor 
will be used as well as local businesses who will provide needed 
materials.
    We believe the improvement and modernization and the growth of our 
waterway infrastructure should be done, but we believe it needs to be 
done with a plan. We believe the Corps of Engineers has the capability 
and they should and must develop a plan for construction of any new 
projects. We also believe they need to complete projects that are 
already started before we begin new ones. We also believe the backlog 
of operations and maintenance of the existing system needs to be done 
before any new starts are authorized, however, there may be some 
emergency new starts which would be wise to commence provided the funds 
are available and provided a systematic modernization is ongoing. We 
must get away from ``knee jerk'' emergency type repairs and 
replacements.
    We must prioritize projects and eliminate projects that are not 
returning benefits back to this Nation. We must have our Federal 
Government live up to the commitments they have made to the citizens of 
this Nation. Private interest have made many investments based upon 
faith in the Federal Government following through on what it promised 
and what they had been told would be provided to them within a 
reasonable period of time. If a project is to be funded entirely by the 
Federal Government as directed by Congress then we must fulfill that 
obligation. If local interest is to provide a portion of the cost then 
local interest must meet that mandate as well. However, we do not need 
to hold any projects up because local interests are not financially 
able to meet their cost sharing needs provided that project returns a 
benefit back to this Nation. Let us move forward with a plan and let us 
work that plan and rebuild and bring our waterway infrastructure into 
the 21st Century properly.
    I will now turn my comments to one specific project which the U.S. 
Army Corps of Engineers has been authorized by Congress to administer, 
namely, the Mississippi River and Tributaries Project (MR&T) and one 
portion of that project which benefits the citizens of Southeast 
Missouri and Northeast Arkansas, namely, the St. Francis Basin Project.
    The Corps of Engineers has a stated capability of $500,000,000 for 
fiscal year 2008 in the MR&T Project. We ask you to give consideration 
to provide funding levels at $500,000,000. This will provide some 
limited but needed new construction and some major maintenance. The 
President's budget contains only $260,000,000 which is far from 
adequate.
    The Mississippi River and Tributaries Project was authorized 
following a record flood in 1927 that inundated more than 26,000 square 
miles of the Mississippi River Valley. Over 700,000 people were left 
homeless and many lives were lost. Most, if not all, East-West commerce 
was stopped and it adversely effected the economy and the environment 
of our Nation. After that devastating event Congress in its infinite 
wisdom passed a bill and established the Mississippi River and 
Tributaries Project (MR&T) and authorized the U.S. Army Corps of 
Engineers to develop a plan to prevent such a disaster in the future. 
This project currently is a separate line item in the budget. To remove 
it will destroy the continuity of this much needed project.
    To date the MR&T Project has prevented flood damages and provided 
other benefits resulting in acurrent benefit/cost ratio of $28 to $1. 
Truly this is a wise investment for our Nation. Likewise countless 
lives have been spared from the construction of this great project. 
Also our Nation receives nearly $1 billion of navigational benefits 
each year due to this project. It is readily seen this project had 
merit from the beginning and continues to reward the citizens not only 
of the valley itself but of the citizens of the entire Nation. It is a 
wise investment for this country and it is good for our economy. It 
will be a vital link to the defense of our Nation in the event of an 
attack by our enemies. This project must be targeted for swift 
completion and then properly maintained. What an investment for our 
great Nation this project has been! Find any other project of any 
nature which approaches this ratio.
    Further, we are very concerned and strongly opposed to the 
administration's recommendation in its fiscal year 2008 budget to use 
funds from the Inland Waterways Trust Fund to pay for part of the 
operation and maintenance cost of the inland waterways as well as some 
construction. The trust fund was established in 1978 and was to be made 
available for construction and rehabilitation for navigation on the 
inland and coastal waterways not for operations and maintenance. This 
is not what our Nation agreed to in 1978 and is not what was renewed 
under WRDA in 1986. We petition this Congress to stand up and have our 
Nation live up to the promises made to the contributors of that trust 
fund and abide by past agreements.
    Investing in our waterways is a great way to stimulate the economy 
and at the same time be building and making investments into a system 
for the future which will return back more dollars than expended. We 
petition you to give this vital industry of our Nation a strong 
endorsement and do all you can to ensure our waterways systems stay 
competitive with our foreign competitors.
    At a time when we need to stimulate our economy, at a time that 
safety from terrorist activities needs to be enhanced and at a time 
that many in our Nation are concerned about cleaner air, cleaner water, 
etc., we have a great opportunity to meet those needs. We must make 
sound investments into our infrastructure which will give back more 
monies to the taxpayers of this country than was invested while at the 
same time be increasing our defense capabilities should our Nation be 
attacked from an outside force.
    Our District, as well as other Drainage and Levee Districts in 
Missouri and Arkansas, is located within the St. Francis River Basin. 
This is a project item of the Mississippi River and Tributaries 
Project.
    The St. Francis Basin Project was authorized by Congress in 1928 
for improvements by the U.S. Army Corps of Engineers. The initial 
authorization was justified by a projected benefit-cost ratio of 2.4:1. 
Today this ratio is 3.6:1 and the project is still not completed. As 
you can see this also has been a wise investment of our Federal tax 
dollars. Few projects, such as this one, where funds are provided by 
the Federal Government return more than they cost. This one does and we 
need to complete it in a timely fashion.
    Local interests have done their part in providing rights of way, 
roads, utilities and the like. Our government now needs to fulfill 
their obligatory part of the project and bring it to completion as 
quickly as possible.
    The amount allocated for maintenance in the St. Francis Basin 
Project for fiscal year 2007 was $880,000,000. This is a funding level 
that permits adequate funding to maintain the features within that 
project on which the Corps of Engineers has made improvements and which 
it is the responsibility of the Federal Government to maintain. As a 
matter of information the Memphis District U.S. Army Corps of Engineers 
was able to execute 99 percent of the available funds for maintenance 
within that project for fiscal year 2006.
    The President's budget for fiscal year 2008 contains no monies for 
construction whereas the Corps of Engineers has the capability of $7 
million. We request $7 million for construction for this project.
    The President's budget has $4.725 million for maintenance for the 
St. Francis Project. The Corps of Engineers has a stated capability of 
$23.475 million.
    We believe the Corps could adequately use $15 million each year for 
maintenance within this basin. We realize there are budgetary 
restraints this year and respectively request Congress to approve 
funding for maintenance in the St. Francis Basin Project for fiscal 
year 2008 in the amount of $23.475 million. This should provide funds 
for adequate maintenance of the features within this basin which need 
attention annually.
    Many positive changes have occurred to and within our sector of our 
Nation because of this project. We who live there welcome these 
changes. We, local interest, in Southeast Missouri and Northeast 
Arkansas want this project brought to completion and adequately 
maintained. We have waited over 70 years and we believe it is time to 
complete this wise investment for our Nation.
    A question that could and should be asked is where will we get the 
money? True, our Nation is facing record deficits but surely some of 
the monies planned to be sent abroad to build, restore and improve 
other nations' infrastructure could be reduced substantially and be 
used for the benefit of our taxpayers and Nation. Please give this 
proposal some thought.
    I wish to thank you very much for your time and kind attention and 
for taking the time to review the above. We would be very appreciative 
of anything this committee can do to help us improve our environment, 
improve our livelihood, and improve the area in which we live and work 
which ultimately is good for America. We are also very appreciative of 
all this committee has done for us in the past. We trust you will hear 
our pleas once more and act accordingly.
                                 ______
                                 
          Prepared Statement of the City of San Marcos, Texas
             san marcos river ecosystem restoration project
    Mr. Chairman and members of the subcommittee: on behalf of the city 
of San Marcos, Texas, I am pleased to submit this statement in support 
of our request for an earmark of $439,000 for a U.S. Army Corps of 
Engineers Section 206 Ecosystem Restoration Project for the San Marcos 
River in the fiscal year 2008 bill.
    The city of San Marcos seeks this allocation for the development of 
the Detailed Project Report/Integrated Environmental Assessment (DPR/
EA) as the next step toward completing a $4,520,000 project with 
Federal and local match to restore degraded aquatic and terrestrial 
habitat in the upper San Marcos River.
    San Marcos is located in south central Texas in Hays County, 
approximately 30 miles southwest of Austin, Texas. The proposed 
restoration area is located within the city limits of San Marcos along 
and within the San Marcos River and its headwaters. The study area 
consists of an approximate 1.0-mile stretch of the San Marcos River and 
associated riparian corridor. The ecosystem restoration project will 
restore and enhance degraded aquatic and terrestrial habitat along and 
within the San Marcos River.
    The spring-fed San Marcos River offers one of rarest aquatic 
ecosystems found in the United States. The headwaters of the river 
originate from underground springs from the Edwards Aquifer, producing 
millions of gallons of crystal clear, constant temperature water daily. 
The river creates a unique ecosystem supporting five threatened or 
endangered species that live in the San Marcos River (San Marcos 
salamander, fountain darter, Texas wild rice, San Marcos gambusia, and 
Comal Springs riffle beetle).
    The San Marcos River has attracted humans to its banks for more 
than 12,000 years, making San Marcos one of the oldest continuously 
inhabited places in the United States. The city of San Marcos has 
strived for the past 40 years to protect the river by establishing 
parks along its banks and restricting intense development.
    Still, the constant use of the popular river over many decades has 
impacted the riparian and aquatic habitat of the river, requiring 
restoration of this valuable waterway. The San Marcos River and 
associated tributaries have experienced aquatic ecosystem degradation 
due to a variety of human factors. Impoundment of water upstream, in 
its tributaries, and within the study area has altered the normal flow 
regime of the San Marcos River. The native aquatic plant communities 
within the San Marcos River have been diminished by invasive exotic and 
generalist plant species.
    Increased nutrient and sediment loads from overland surface flow, 
tributary runoff, non-point sources and storm water drainage have 
reduced water quality and in-stream habitat values within the river. 
The majority of the bottomland plant community within the study area is 
highly disturbed and fragmented due primarily to urban encroachment, 
installation of hardpan surfaces, recreational disturbance and invasion 
of non-native plant species.
    This degradation has resulted in the loss of high quality in-stream 
and riparian habitat for plant and wildlife species within the study 
area. The proposed restoration plan will help restore aquatic and 
terrestrial habitat that has degraded due to human activity, including 
critical habitat for the federally-listed species.
    The city of San Marcos applied for U.S. Army Corps of Engineers 
Section 206 Aquatic Restoration Grant funds in 2002 to turn around the 
trend toward degradation in our river corridor. A Preliminary 
Restoration Plan (PRP) was developed by the U.S. Army Corps of 
Engineers and submitted in March 2003. The PRP was approved and moved 
forward to the next phase, the development of a Detailed Project Report 
(DPR).
    However, at this stage, Federal funding for this program was 
reduced, placing the city of San Marcos PRP on the backburner. Funding 
this project is essential to restore integrity to the San Marcos River, 
the central point of our community for tourism, recreation, and quality 
of life.
    This project will directly benefit the environment by increasing 
biodiversity, carrying capacity, stability and productivity of native 
plant and wildlife species endemic to the area. Additional benefits 
include improvement of existing recreational opportunities, enhancement 
of water quality, and improvement of natural aesthetics.
    Specifically, the project will restore and sustain approximately 
22.0 acres of riparian woodland habitat, 6.0 acre of tall grass prairie 
habitat, 4.0 acres of emergent wetland habitat and 16.0 acres of 
aquatic habitat within a highly urbanized area. The total project cost 
is estimated at $4,520,000, which will be cost-shared 65 percent 
Federal Government and 35 percent city of San Marcos. The Federal share 
is $2,938,000 with a local match of $1,582,000.
    The only COE Section 206 projects that will now receive funding are 
those that have congressional support.
    Therefore, we ask you to approve a special appropriation earmark 
for $439,000 for the San Marcos River Section 206 Project to fund the 
restoration. Thank you for your consideration of this project.
                                 ______
                                 
    Prepared Statement of the St. Francis Levee District of Arkansas
                           executive summary
    The Mississippi Valley Flood Control Association fiscal year 2008 
Civil Works budget, Mississippi River and Tributaries Appropriations--
Requesting Appropriations of $7 million for Construction and $23.475 
million for Maintenance and Operation in the St. Francis Basin Project 
and a total of $500 million for the Mississippi River and Tributaries 
Project. The reason for this seemingly large request is to be assured 
that the Corps of Engineers may fully fund on-going and future 
construction contracts as directed in the fiscal year 2006 
appropriations act. Our requests are detailed in the tables attached to 
this statement.
                         background information
    My name is Rob Rash, and my home is in Marion, Arkansas, located on 
the west side of the Mississippi River and in the St. Francis Basin. I 
am the CEO/Chief Engineer of the St. Francis Levee District of 
Arkansas. Our District is the local cooperation organization for the 
Mississippi River and Tributaries Project and the St. Francis Basin 
Project in Northeast Arkansas. Our District is responsible for the 
operation and maintenance of 160 miles of Mississippi River Levee and 
75 miles of St. Francis River Tributary Levee in Northeast Arkansas.
    The St. Francis Basin is comprised of an area of approximately 
7,550 square miles in Southeast Missouri and Northeast Arkansas. The 
basin extends from the foot of Commerce Hills near Cape Girardeau, 
Missouri to the mouth of the St. Francis River, 7 miles above Helena, 
Arkansas, a total distance of 235 miles. It is bordered on the east by 
the Mississippi River and on the west by the uplands of Bloomfield and 
Crowley's Ridge, having a maximum width of 53 miles.
    The Mississippi River and Tributaries Project and the St. Francis 
Basin Project provide critical flood protection to over 2,500 square 
miles in Northeast Arkansas alone. This basin's flood control system is 
the very lifeblood of our livelihood and prosperity. Our resources and 
infrastructure are allowing the St. Francis Basin and the Lower 
Mississippi Valley to develop into a major commercial and industrial 
area for this great Nation. The basin is quickly becoming a major steel 
and energy production area. The agriculture industry in Northeast 
Arkansas and the Lower Mississippi Valley continues to play an integral 
role in providing food and clothing for this Nation. This has all been 
made possible because Congress has long recognized that flood control 
in the Lower Mississippi Valley is a matter of national interest and 
security and has authorized the U.S. Army Corps of Engineers to 
implement a flood control system in the Lower Mississippi Valley that 
is the envy of the civilized world. With the support of Congress over 
the years, we have continued to develop our flood control system in the 
Lower Mississippi Valley through the Mississippi River and Tributaries 
Project and for that we are extremely grateful.
    Although, at the current level of project completion, there are 
areas in the Lower Mississippi Valley that are subject to major 
flooding on the Mississippi River. The level of funding that has been 
included in the President's Budget for the overall Mississippi River 
and Tributaries Project is not sufficient to adequately fund and 
maintain this project. The level of funding will require the citizens 
of the Lower Mississippi Valley to live needlessly in the threat of 
major flood devastation for the next 30 years. Timely project 
completion is of paramount importance to the citizens of the Lower 
Mississippi. Ten and Fifteen Mile Bayou improvements are just one of 
many construction projects necessary for flood relief in the St. 
Francis Basin. Ten and Fifteen Mile Bayou improvements were 
reauthorized by Congress through the Flood Control Act of 1928, as 
amended. Section 104 of the Consolidated Appropriation Act of 2001 
modified the St. Francis Basin to expand the project boundaries to 
include Ten and Fifteen Mile Bayous and shall not be considered 
separable elements. Total project length of 38 miles includes Ten and 
Fifteen Mile Bayou, Ditch No. 15 and the 10 Mile Diversion Ditch that 
provide flood control for West Memphis and Vicinity. Without additional 
funds, construction would be delayed and West Memphis and Vicinity will 
continue to experience record flooding as seen December 17, 2001. West 
Memphis and Vicinity would experience immediate flood relief when the 
first item of construction is completed.
    Next I feel that it is imperative that I mention at this time new 
policies being implemented by the Federal Emergency Management Agency 
in their Map Modernization Program. This is a 5-year program that was 
initiated in 2004 and consists of updating the Flood Insurance Rate 
Maps. We've been told that 20 percent of all counties nationwide are 
scheduled for update.
    Of great concern to us and should be of concern to everyone is a 
new Zone Designation known as Zone X (Shaded) which will be all the 
areas outside the 100-year flood zone protected by levees. In the case 
of the Lower Mississippi River Valley, from Cape Girardeau, Missouri to 
the Gulf of Mexico, this is an area of some 35,000 square miles or 
22,400,000 acres. A warning will be placed on the new Flood Insurance 
Rate Maps that will, among other things, state that within this area, 
communities should issue evacuation plans and encourage property owners 
to purchase flood insurance.
    This large area is protected by the Mississippi River and 
Tributaries Levees but also by the entire Comprehensive Flood Control 
System consisting of not only the well designed, well constructed, well 
maintained, massive levees but also bank revetments, river cut-offs, 
floodways, floodwalls, diversions, flood storage reservoirs, control 
structures and many other improvements that have made certain that no 
Mississippi River Main Line Levee has failed since 1928, the year that 
Congress directed the Corps of Engineers to build the system. There 
have been a number of floods of record proportions since 1928 but not 
one failure. The American Taxpayer has invested billions of dollars in 
this system and their money up to now has been well spent. The Federal 
Emergency Management Agency seems to think it has been wasted. Not so!
    The Design Flood for the Mississippi River and Tributaries Project 
is to protect against a flood predicted by the Weather Bureau as the 
``Maximum Possible'' and provides for the disposal of all water 
predicted as possible. This unwarranted new Zone X (Shaded) on Flood 
Insurance Rate Maps will have a dramatic and costly burden on all the 
residents, businesses and industries along the Lower Mississippi River 
and its Tributaries and this economic disaster will be felt over this 
entire Nation. The language proposed will frighten Lenders and 
Companies looking for Industrial Sites, impact Crop Loans as well as 
causing millions of dollars to be spent for unnecessary flood insurance 
premiums. This is such a serious matter that we would suggest strongly 
that the appropriate congressional committees hold hearings on this 
matter to determine what if any engineering basis the Federal Emergency 
Management Agency used to develop this new policy.
                            proposed funding
    We support the amount of $500 million requested by the Mississippi 
Valley Flood Control Association for use in the overall Mississippi 
River and Tributaries Project. This is the minimum amount that the 
Executive Committee of the Association feels is necessary to maintain a 
reasonable time line for completion of the overall Mississippi River 
and Tributaries Project. Also, the amounts that have been included in 
the President's budget for the St. Francis Basin Project; construction, 
operation and maintenance have not been sufficient to fund critical 
projects. These declined amounts have resulted in a significant backlog 
of work within the St. Francis Basin. Therefore, our District is 
requesting capabilities of $7 million for the St. Francis Basin Project 
construction funds and $23.475 million for the St. Francis Basin 
operation and maintenance funds. The amounts requested for the St. 
Francis Basin Project are a part of the total amounts requested for the 
Mississippi River and Tributary Appropriations of the Civil Works 
Budget.
                               summation
    With the tragedy that struck the Gulf Coast, we must now turn our 
attention to the future and attempt to make certain that at least the 
flooding does not take place again. We can prevent that; the Dutch, the 
English and the Italians have done it and so can we if we treat flood 
control as something that we must do. The citizens of this great Nation 
deserve it.
    There are four anomalies of nature that cause death and destruction 
to our Nation. They are: (1) earthquakes; (2) hurricanes; (3) 
tornadoes; and, (4) floods. The first three we can do very little if 
anything about except to prepare for the worst. We can build protection 
against floods, against the ``maximum probable flood,'' one that has an 
``improbable occurrence but nevertheless a remotely possible one.''
    In order to provide such protection we believe that three things 
must be done.
    First, the environmental laws, or at least the way they are 
interpreted for flood control projects, must be changed or we stand to 
lose more lives and have another absolute environmental catastrophe 
such as the one we have witnessed in New Orleans and along the Gulf 
Coast. Second, cancel all cost-sharing for flood control projects 
unless we do intend to only protect those that can afford it and ignore 
those that can not. Third, relax the requirements for the benefits-to-
cost ratio for flood control projects for one reason, it is impossible 
to assign a dollar value to a human life. It is our opinion that these 
things must be done, for without flood control, nothing else really 
matters.
    Again, we thank the Congress and this committee for all your help 
in the past and thank you in advance for your kind considerations of 
our requests for fiscal year 2008.

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

                                 ______
                                 
   Prepared Statement of the Board of Mississippi Levee Commissioners
    Mr. Chairman and members of the committee: This statement is 
prepared by Peter Nimrod, Chief Engineer for the Board of Mississippi 
Levee Commissioners, Greenville, Mississippi, and submitted on behalf 
of the Board and the citizens of the Mississippi Levee District. The 
Board of Mississippi Levee Commissioners is comprised of 7 elected 
commissioners representing the counties of Bolivar, Issaquena, Sharkey, 
Washington, and parts of Humphreys and Warren counties in the Lower 
Yazoo Basin in Mississippi. The Board of Mississippi Levee 
Commissioners is charged with the responsibility of providing 
protection to the Mississippi Delta from flooding of the Mississippi 
River and maintaining major drainage outlets for removing the flood 
waters from the area. These responsibilities are carried out by 
providing the local sponsor requirements for the congressionally 
authorized projects in the Mississippi Levee District. The Mississippi 
Levee Board and the Mississippi Valley Flood Control Association 
support an appropriation of $500 million for fiscal year 2008 for the 
Mississippi River & Tributaries Project. This is the minimum amount 
that we consider necessary to allow for an orderly completion of the 
remaining work in the Valley and to provide for the operation and 
maintenance, as required, to prevent further deterioration of the 
completed flood control and navigation work.
    It is apparent that the administration loses sight of the fact that 
the Mississippi River & Tributaries Project provides protection to the 
Lower Mississippi Valley from waters generated across 41 percent of the 
continental United States. These waters flow from 31 States and 2 
provinces of Canada and must pass through the Lower Mississippi Valley 
on its way to the Gulf of Mexico. We will remind you that the 
Mississippi River & Tributaries Project is one of, if not the most cost 
effective project ever undertaken by the United States Government. The 
foresight of the Congress in their authorization of the many features 
of this project is exemplary.
    The many projects that are part of the Mississippi River & 
Tributaries Project not only provide protection from flooding in the 
area, but the award of construction contracts throughout the Valley 
provides assistance to the overall economy of this area that is also 
encompassed by the Delta Regional Authority. The employment of the 
local workforce and purchases from local vendors by the contractors 
help stabilize the economy in one of the most impoverished areas of our 
country.
    Thanks to the additional funding provided by the Congress over the 
last several years over and above the administration's budget, work on 
the Mainline Mississippi River Levee Enlargement Project is continuing. 
Of the original 69 miles of deficient levees in the Mississippi Levee 
District, 12.7 miles of work has been completed, 19.3 miles are 
currently under contract, and another 7.9 miles will be awarded in 
fiscal year 2008. Right of way has been acquired and the bids for 3.4 
miles of work were opened in November 2005. With the combined crippling 
effect of the elimination of continuing contracts and the restrictions 
on reprogramming authorities, this item was terminated. Of the 19.3 
miles currently under contract, the Corps had to negotiate a work 
``slow-down'' because of a lack of sufficient funds for the contractor 
to work at full performance. This will push completion of these 
deficient areas out another year! We are requesting $98.35 million for 
construction on the Mainline Mississippi River Levees in the Lower 
Mississippi Valley Division which will allow the Vicksburg and Memphis 
districts to keep existing contracts on schedule and award contracts to 
avoid any future unnecessary delays in completing this vital project. 
We are all well aware that the Valley some day will have to endure a 
Project Flood, we just don't know when. We must be prepared.
    The President's fiscal year 2008 budget did not include funding for 
any construction projects within the Yazoo Basin. These are all 
projects authorized and funded so wisely by the Congress. This action 
is especially difficult to understand during a time when our Nation 
needs an economic boost. All of these projects are encompassed in the 
footprint of the Delta Regional Authority, an area recognized by the 
Congress as requiring special economic assistance to keep pace with the 
rest of our great Nation. We can not lose sight of the fact that all of 
these projects are required to return more than $1 in benefits for each 
$1 spent. No project authorized and funded by the Congress should be 
indiscriminately terminated without the benefit of having the 
opportunity to complete the study process and subsequent construction 
after complying with the Corps Policy and Guidelines.
    The Final Report for the Yazoo Backwater Project will be released 
this year. The Yazoo Backwater Project will provide economic and 
environmental benefits to parts of six counties in the south 
Mississippi Delta. This project will build a pump that will evacuate 
floodwater that is generated over 4,093 square miles in the Mississippi 
Delta. The pump will lower the 100 year flood event by 4.5 feet thereby 
reducing urban and rural structural damages, providing benefits to the 
remaining agricultural lands, and reducing the frequency and duration 
of floods. Reforestation easements will be purchased on up to 55,600 
acres of existing agricultural land which will provide benefits in 
every environmental category--wetlands, terrestrial, aquatics, and 
waterfowl resources as well as vastly improving water quality. The 
recommended plan for the Yazoo Backwater Project will balance economics 
with the environment. This is a model project that should be the 
standard for future public works projects in the United States. We are 
requesting this project be funded by the Congress in the amount of $15 
million. These funds will allow the Corps to begin acquisition of the 
reforestation easements and initiate the award of the pump supply 
contract.
    The Draft Supplemental Environmental Impact Statement for the Big 
Sunflower River Maintenance Project will be released later this year. 
This maintenance project will restore flood control capacities to 130 
miles of channels by removing sediment that has built up over the past 
40 years since the channels were originally improved. Our request for 
$2.196 million will allow right-of-way acquisition to continue and for 
the award of the first dredging contract. The residents in the 
Mississippi Delta continue to suffer damages from flooding while they 
wait for this maintenance project to reach their area.
    Work on the Delta Headwaters Project has proven effective in 
reducing sediments to downstream channels. To discontinue this project 
will only increase sediment in downstream channels diminishing water 
quality, reducing the level of protection to the citizens of the Delta 
and increasing required maintenance. We are requesting $25 million to 
continue this project.
    The Upper Yazoo Project is critical to the Delta. The Corps of 
Engineers operates 4 major flood control reservoirs on the bluff hills 
overlooking the Mississippi Delta. These reservoirs hold back heavy 
spring rains and must have adequate outlet channel capacity to pass 
this excess runoff during the summer and fall months. Without 
completion of the Upper Yazoo Project, the Corps is forced to hold 
flood water from the previous spring, thereby reducing the ability to 
provide protection from the current year's flood water. We urge the 
Congress to provide $22.5 million allowing construction to continue and 
the award of additional channel enlargement items. With this 
appropriation, work can be completed to Glendora which will provide 
relief to Marks, Mississippi.
    Maintenance of completed works cannot be overlooked. The four flood 
control reservoirs overlooking the Delta have been in place for 50 
years and have functioned as designed. Required maintenance must be 
performed to avoid any possibility of failure during a flood event. We 
are asking for $10.875 million for Arkabutla Lake, $15.042 million for 
Sardis Lake, $10.927 million for Enid Lake, and $11.38 million for 
Grenada Lake. Additional funding will be used to place rip rap, add 
needed infrastructure, and repair and upgrade existing infrastructure 
around all the lakes.
    We are requesting $34.5 million for Maintenance of the Mainline 
Mississippi River Levees in the Lower Mississippi Valley Division which 
will provide for repair of levee slides, slope repair, and repair of 
the gravel maintenance roadway which is so vital to access during high 
water.
    I have reviewed a great deal of information regarding the needs of 
providing flood protection to our area. Another major feature of the 
Mississippi River & Tributaries Project relates to navigation interests 
along the Mississippi River. Several of our ports have been informed 
that the President's budget does not include enough funding for 
Critical Harbor Dredging necessary to keep these harbors opened for 
navigation. Our port commissioners have been notified that lack of 
annual dredging will cause these ports to be a hazard to navigation and 
be shut down. This will impact the movement of over 4.5 million tons of 
cargo being shipped on our waterways annually from these ports. This 
equates to an additional 180,000 truck loads per year of products on 
our highways. It is imperative that funding be made available for 
Critical Harbor Dredging to allow continued operation of these 
facilities, which are key features to the economic growth of the 
region.
    The Conference Report for Energy & Water Development Appropriations 
Act, 2006 funded the MR&T Project with $400 million. Unfortunately, the 
Conference Report included detrimental language that has crippled the 
Corps ability to get the MR&T Project done in a timely, efficient, and 
economically feasible way. The Conference Report eliminated the 
Continuing Contracts Clause that allowed the Corps to bid projects 
without all the funding in place before the project starts. This will 
significantly slow down all of our Corps projects. There have been no 
new starts in fiscal year 2006 or fiscal year 2007 for our critical 
Levee Enlargement & Berms Project because of this elimination. The 
Corps has used Continuing Contracts since 1922! The Corps of Engineers 
must be able to utilize Continuing Contracts on the MR&T Project.
    The Conference Report also included Reprogramming Authorities 
restrictions which is limiting the Corps of Engineers ability to shift 
monies within the MR&T Project. Reprogramming Authorities allow money 
to move from one project that is behind schedule to another project 
that is ahead of schedule. The reprogramming authority is now very 
limited. Money is being wasted to ``slow-down'' and stop existing on-
going work because of the language! The Reprogramming Authority 
restrictions must be relaxed for the MR&T Project in order for the 
Corps of Engineers to make maximum use of appropriations that Congress 
provides.
    In conclusion, the Conference Report for 2006 was a record year for 
funding levels for the MR&T Project. The inclusion of the detrimental 
language of Reprogramming Authority restrictions and the elimination of 
Continuing Contracts Clause has crippled the Corps of Engineers ability 
to wisely spend that money that Congress has so wisely appropriated. We 
must remove this detrimental language in the fiscal year 2008 
appropriations. The President's fiscal year 2008 budget for the MR&T 
Project provides only $260 million which is terribly inadequate and 
will not allow the Corps to proceed in the most economical manner.
    On another note, new policies are being implemented by the Federal 
Emergency Management Agency (FEMA) in their Map Modernization Program. 
A new zone designation will show a shaded ``Zone X'' outside the 100 
year flood zone but protected by levees. The entire Mississippi Delta 
is protected by the levee! An attached ``Warning'' will be on new Flood 
Insurance Rate Maps (FIRM) stating that the levee could fail! This will 
have a dramatic & costly affect to residents, businesses & industries 
along the Lower Mississippi River. New businesses will be frightened to 
build in a ``flood zone.'' Flood insurance rates will increase. Our 
Mainline Mississippi River Levee system has not failed since the Corps 
built the current levee system in 1928! This is a needless and reckless 
act by FEMA as a result of failures on some hurricane protection levees 
in New Orleans in 2005 during Hurricane Katrina.
    As members of the Congress representing the citizens of our Nation 
who live with the Mississippi River everyday, you clearly understand 
both the benefits provided by this resource, and the destructive force 
that must be controlled during a flood. On behalf of the Mississippi 
Levee Board, I cannot express enough, our appreciation for your efforts 
in providing adequate funding over the last several years that has 
allowed construction to continue on our much needed projects and thank 
you in advance for your kind considerations of our requests for fiscal 
year 2008.
                                 ______
                                 
           Prepared Statement of the City of Arlington, Texas
    Mr. Chairman and members of the subcommittee: On behalf of the city 
of Arlington, Texas, I am pleased to submit this statement for the 
record in support of our request for funding in the amount of $9.75 
million in the fiscal year 2008 Appropriation Bill for Energy and Water 
Development to support the city's continued efforts to reduce flood 
damage, improve public safety, reduce erosion and sedimentation, and 
enhance wildlife habitat and passive recreation within the Johnson 
Creek corridor through Arlington, Texas.
                       project executive summary
    Johnson Creek, a tributary of the Trinity River, has been the topic 
of extensive study by the Corps of Engineers (Corps) and the city of 
Arlington, Texas (city) since the early 1980's due to a history of 
flooding, extensive erosion and sedimentation, recreational challenges 
and opportunities, and important wildlife habitat.
    In 1990, the Corps proposed to address flooding by planning and 
allocating funds to channel and line with concrete substantial 
stretches of Johnson Creek. The city rejected this plan on the grounds 
that it provided flood relief at the expense of recreational 
opportunities, wildlife habitat and economic development. The city 
adopted in 1997 a more holistic alternative called the Johnson Creek 
Corridor Plan that received wide community support but was not 
fundable. In 1999, the Corps prepared an Interim Feasibility Report and 
Integrated Environmental Assessment for Johnson Creek in Arlington. The 
document recommended a National Economic Development (NED) Plan for 
flood damage reduction that also addressed the city's desires for 
enhanced wildlife habitat and recreation in the Johnson Creek corridor. 
In 2000, the city adopted the Corps' 1999 plan to purchase homes within 
the floodplain of Johnson Creek, create linear parks with trails, and 
acquire and restore open space for wildlife habitat and recreation.
    In 2004, subsequent to the city's contract with the Corps, the city 
entered into a partnership with the Dallas Cowboys to build a new 
football stadium adjacent to the Texas Rangers' venue and land 
purchased and restored as part of the 1999 plan. In 2005, the Corps' 
1999 plan was amended to remove approximately 90 acres of city-owned 
land north of Union Pacific Railroad tracks.
    During ecological investigations associated with design and master 
plan development of the football stadium, a number of critical issues 
arose that the 1999 plan (as amended in 2005) only partially addressed. 
The city realized that a holistic, watershed approach, in conjunction 
with maximizing the use of on-site best management practices (BMPs), 
would be required to truly address flooding, water quality, and 
wildlife habitat/recreation issues at Johnson Creek. The challenge was 
that deviations from 1999 plan, which largely has been implemented, 
require explicit authorization from Congress.
    In March 2006, the city prepared a watershed conservation plan 
entitled Johnson Creek: A Vision of Conservation that modifies the 
1999/2005 authorized plan. The modified plan allows the city to: (1) 
implement and modify, if necessary, unfinished components of the 1999/
2005 plan; (2) design and construct new bank stabilization, flood 
control, recreation, and habitat restoration projects on public lands 
and easements along Johnson Creek; (3) acquire and/or receive 
reimbursement for an additional 90 acres of environmental lands within 
Trinity River and/or Rush/Village Creek floodplain; and (4) obtain 
reimbursement for new acquisitions, if desired, and for the use of city 
parks for funded Federal projects.
    Total project cost to implement the modified plan is estimated at 
$79,997,666, including contingency. This includes $30,000,000 in sunk 
costs for completed Johnson Creek projects.
                          project description
    The modified plan is divided into a minimum of two phases as 
summarized below:
    Phase 1 includes property between Sanford Street and Randol Mill 
Road, plus a tributary of Johnson Creek south of the Dallas Cowboys 
stadium project. Phase 1 was selected for a variety of reasons as 
follow: (1) the riparian corridor has high potential for restoration to 
improve wildlife habitat, water quality, and recreational 
opportunities; (2) the property is owned by the city; (3) a significant 
portion of existing environmental stresses, particularly erosion and 
sedimentation, occur within this area; (4) the city has identified this 
area as an entertainment district; and (5) this area includes the 
future Dallas Cowboys stadium, the existing Texas Rangers stadium, and 
a future Arlington, Texas town center called Glorypark. These 
developers have all agreed to provide matching money for the city to 
improve the green space within this corridor for environmental benefits 
listed above. Phase 1 work will provide the catalyst and inspiration 
for future work throughout the remainder of the watershed.
    Phase 1 work is all new work and includes constructing a detention/
sedimentation basin and overflow swale just west of the Stone Gate 
Mobile Park; bank stabilization and creek restoration including 
additional overflow swales; installing a pedestrian bridge across 
Johnson Creek; providing trails and other passive recreational 
amenities; and enhancing remaining green space for wildlife habitat. A 
regional detention/sedimentation basin proposed between Sanford Street 
and Division Street may be included in Phase 1 work if funding becomes 
available in time.
    Phase 2 includes all remaining work upstream of the Phase 1 site 
area between Sanford Street and Vandergriff Park, and 90 acres of 
environmental land within Trinity River and/or Rush/Village Creek 
floodplain. Within the Johnson Creek corridor, Phase 2 work will occur 
within three main areas. At Vandergriff, Meadowbrook, and Julia Burgen 
Parks, proposed activities include creating a detention/sedimentation 
basin; restoring eroded creek banks and creek restoration; enhancing 
passive recreational opportunities using trails and other amenities; 
and enhancing wildlife habitat. Possible acquisition of three homes 
between Collins Street and Park Row Avenue may also occur as part of 
Phase 2.
    The city has long recognized that the ecological health of Johnson 
Creek and its contributing watershed are inextricably tied to the 
quality of life of its residents. In this light, the city hopes to 
develop a stronger link between its residents and its natural 
surroundings by restoring the creek, and, in doing so, revitalizing the 
community. Immediate local benefits include flood damage protection, 
habitat restoration, improved water quality and public health, 
increased access to Johnson Creek for passive recreation, elevated 
community pride, and economic redevelopment. The project complements 
larger, regional efforts to improve water quality and maximize the 
function of floodplain communities in the Trinity River watershed. 
Nearly all local benefits also contribute to statewide water quality, 
stormwater management, flood control, and environmental planning 
efforts by the North Central Texas Council of Government, U.S. 
Environmental Protection Agency, U.S. Fish and Wildlife Service, Corps 
of Engineers, Texas Parks and Wildlife, and Texas Commission on 
Environmental Quality.
                             funding needs
    The modified plan, which includes completed components of the 1999/
2005 plan and new Johnson Creek projects as described above, has a 
total estimated cost of $79,997,666, of which 35 percent will be 
provided by the city.
    For fiscal year 2008, the city of Arlington, Texas is seeking $9.75 
million from the U.S. Army Corps of Engineers Programs account through 
your Energy and Water Development Appropriations Subcommittee.
    Thank you for your consideration of our request.
                                 ______
                                 
              Prepared Statement of the State of Illinois
    The State of Illinois supports the following projects in the 
administration's fiscal year 2008 budget proposal:

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

                       operation and maintenance
    Illinois supports the Corps' budget for continued satisfactory 
maintenance and operation of navigation, flood control and multipurpose 
projects, as well as adequate manpower for public service activities 
related to the water resources in and bordering the State. Although, 
the administration's budget request contains nearly $142.4 million for 
operation and maintenance for the Corps Districts in Illinois, the 
administration has modified the structure of the O&M account by 
shifting the funding for rehabilitation projects to this account. This 
skews the O&M account funds, and the disaggregated numbers form the 
administration's budget indicate the Corps' future viability and 
commitment to maintain the inland waterway system, water supply and 
recreational reservoirs, and to maintain an operational and forecast 
dependent streamgaging network, can severely be impacted. As an 
example, there is a need for an additional $14.7 million to satisfy 
dredging needs and the backlog of maintenance for the Illinois River 
Waterway. Backlog of maintenance items for the Mississippi River in 
Rock Island and St. Louis Corps Districts is an additional $27.5 
million.
    Illinois also supports the administration's funding to the Corps 
for Lake Michigan diversion accounting. However, we request an 
additional $350,000 for the Corps to ensure that they have adequate 
appropriations to reconvene the Technical Committee for the accounting 
system to fulfill their dual measurement and accounting 
responsibilities.
    Additionally, the contamination in the Inner Harbor area of 
Waukegan Harbor warrants designation of the harbor as an ``Area of 
Concern'' by the International Joint Commission. There is an ongoing 
USEPA Legacy Act project to identify an acceptable disposal site for a 
total clean up of the contaminants in the inner Harbor. The Corps of 
Engineers is a partner in that effort. One million dollars is the 
minimum needed to complete maintenance dredging of the contaminated 
outer harbor shoaling.
                     additional funding priorities
    The State of Illinois also recommends that additional funding be 
provided for the following projects, which are listed in the general 
priority order, in the fiscal year 2008 Corps of Engineers' budget:
Chicago Sanitary & Ship Canal Dispersal Barrier
    The State of Illinois has been working closely with the Chicago 
District and other Great Lakes agencies at both the Federal and State 
level to keep Asian Carp from reaching the Great Lakes through the 
Chicago Waterway system. We entered into a Project Cooperation 
Agreement with the Corps to construct a second, more effective and 
permanent electrical barrier in the Chicago Sanitary and Ship Canal 
using the Corps' section 1135 program, and have contributed $1.8 
million in State funds along with $475,000 from the other 7 Great Lakes 
States to match the Corps' contribution. Also, there has been unanimous 
agreement throughout the Great Lakes community that Congress needs to 
authorize and fund the U.S. Army Corps of Engineers to construct, 
operate and maintain a barrier control system. However, for the first 
time since Congress authorized the Corps to construct an aquatic 
nuisance species demonstration barrier in 1990 at 100 percent Federal 
cost, the President's proposed budget is asking the State of Illinois 
to contribute 25 percent of the total cost to make this barrier 
permanent. The President's proposed budget is also requiring the State 
of Illinois to contribute an additional $1,725,000 (this is in addition 
to the $1.8 million Illinois has already contributed along with 
$475,000 from the other 7 Great Lakes States) to allow the Corps to 
complete construction of Barrier II. Finally, this budget requires 
Illinois to fully fund the operation and maintenance of both barriers, 
which the Corps has estimated could run as high as $1.0 million per 
year. Therefore, the State of Illinois urges that the Corps receives 
$1.1 million to start construction on making the demonstration barrier 
permanent, and $6.9 million to complete Phase IIB of the Barrier II 
construction at full Federal expense, and an additional $1.0 million to 
carry out the operation and maintenance of both Dispersal Barrier 
projects annually.
The Chicago Harbor Lock Rehabilitation
    The Chicago River Lock Rehabilitation is an important project for 
the State of Illinois. It will reduce leakage of Lake Michigan water 
into the Chicago Sanitary and Ship Canal and thus will reduce Illinois' 
Lake Michigan diversion. Reducing leakage at the Chicago River Lock is 
specifically mentioned in the list of activities in the 1996 Memorandum 
of Understanding that Illinois, the other Great Lakes States and the 
U.S. Department of Justice signed to resolve the dispute over Illinois' 
alleged over diversion of Lake Michigan water. As part of the move to 
lakefront diversion accounting, improved control of Lake Michigan water 
used at the Chicago River Lock is essential. This project is also 
needed to ensure the safe operation of the lock itself. This lock is 
the second busiest lock in the country, and while almost all of the 
traffic is recreational, its value and importance to Chicago and the 
State is enormous. Currently, no funding is included in the fiscal year 
2008 budget for this purpose. To rehabilitate the lock in fiscal year 
2008, Illinois requests $7.0 million, which would primarily be used to 
fund the fabrication of two new gates for the west end of the lock.
Illinois River Basin Restoration
    Section 519 of Water Resources Development Act 2000 authorized the 
Illinois River Basin Restoration. The fiscal year 2008 budget request 
proposes $400,000 in General Investigations funds for a comprehensive 
plan. However, the State of Illinois requests that this be increased to 
$2.0 million in General Investigation funds to complete much of the 
comprehensive plan that has been developed under other authorizations. 
Additionally, the State of Illinois requests $8.5 million of 
Construction General funds to continue construction in fiscal year 2008 
of the projects that were authorized in section 519 as providing 
substantial restoration and environmental benefits through the 
comprehensive plan.
Des Plaines River--Phase One
    Section 101(b-10) of the Water Resources Development Act of 1999 
authorized Phase I of the Upper Des Plaines River Flood Control Project 
at a total cost of $68.3 million for the implementation of the six 
recommended projects. The Federal share is approximately $44.4 million 
(65 percent) and the estimated non-Federal cost is $23.9 million. While 
$6.6 million is designated to the levee 37 element of this project in 
this year's budget request, we are requesting an additional $3.0 
million in the fiscal year 2008 budget to continue work with the 
remaining elements of the project.
Upper Mississippi and Illinois Waterway System Navigation Project
    It has been more than 2 years since the Corps completed the 
feasibility phase of the Upper Mississippi and Illinois Waterway System 
Navigation Study, issuing the final feasibility report and Chief's 
Report in 2004. While Congress has not authorized construction yet, it 
has provided funding for Pre-construction, Engineering and Design 
(PED). Thus, Illinois is requesting an appropriation of $24.0 million 
for the Corps of Engineers to continue PED, and if authorized for 
construction, we recommend construction funding of $16.0 million. The 
proposed fiscal year 2008 budget contains no funding for this project.
Chouteau Island (Ecosystem Restoration)
    The Corps of Engineers, St. Louis District, is continuing the 
feasibility study for ecosystem restoration for the Chouteau Island, 
Illinois, project authorized under section 514 (Missouri and Middle 
Mississippi Rivers Enhancement Project) of the Water Resources 
Development Act of 1999 (Public Law 106-53). The project is focusing on 
ecosystem restoration on IDNR-owned land on Chouteau, Gabaret, and 
Mosenthein Islands in Madison County. Illinois requests an 
appropriation of $150,000 for the Corps of Engineers to complete the 
Feasibility Study and initiate Design for the Chouteau Island, 
Illinois, project. The fiscal year 2008 budget contains no specific 
funding for this project.
Peoria Riverfront Development
    We request the addition of $250,000 in General Investigations funds 
to finalize the design of the Lower Island of the Peoria Riverfront 
project. The fiscal year 2008 budget contains no funding for this 
purpose. The increase is needed to meet the design and construction 
schedule.
Des Plaines River Feasibility Study--Phase Two
    An expansion of the Phase I Upper Des Plaines River study was 
authorized in section 419 of the Water Resources Development Act of 
1999. The projected $25,000,000 in average annual damages, which will 
remain in the tributary floodplains of the Des Plaines River after the 
completion of Phase I project construction, is the basis for the 
expanded study of Phase II. State of Illinois, Lake County, Cook 
County, and Kenosha County all have appropriated funds under contract 
for cost sharing in the Phase II study effort. Currently, the fiscal 
year 2008 budget contains no funding to continue the Phase II study 
effort. Illinois requests an appropriation of $500,000 of General 
Investigation funds to continue the feasibility study in fiscal year 
2008.
East St. Louis & Vicinity (Ecosystem Restoration & Flood Damage 
        Protection)
    The Corps of Engineers, St. Louis District, is continuing design of 
the project for ecosystem restoration and flood damage reduction at 
East St. Louis and Vicinity, Illinois (East Side Levee and Sanitary 
District), authorized by section 204 of the Flood Control Act of 27 
October 1965 (Public Law 89-298). The project is focusing on ecosystem 
restoration within the American Bottoms area. The Water Resources 
Development Act of 2000 modified section 204 of the Flood Control Act 
of 1965, to make ecosystem restoration a project purpose. Accordingly, 
ecosystem restoration will be included with the flood control project. 
Illinois requests an appropriation of $700,000 for the Corps of 
Engineers to continue the Pre-Engineering and Design and documentation 
of the East St. Louis and Vicinity Project. Currently, the fiscal year 
2008 budget contains no funding for this purpose.
                          kankakee state line
    We urge you to include $300,000 to fund the design and 
implementation phase of the State Line Kankakee Aquatic Ecosystem 
Restoration Act Project that was authorized under section 206 of the 
Water Resources Development Act of 1996, as amended. We are concerned 
that the funding level for section 206 Continuing Authorities Projects 
requested in the President's budget for fiscal year 2008 is not 
adequate to insure continuation of this project.
Wood River Levee
    The Wood River Drainage and Levee District protects an urban and 
industrial area in the Mississippi River flood plain in Madison County, 
Illinois, upstream of the city of East St. Louis. Problems with the 
integrity of the flood protection system were documented during the 
1993 flood including unexpected seepage problems that had to be handled 
as an emergency. The proposed project addresses both design deficiency 
and reconstruction issues. The design deficiency portion of the project 
has been approved; the reconstruction portion requires new 
authorization. The recommended actions are required to maintain the 
system's authorized level of protection. Illinois requests an 
appropriation of $700,000 for the design deficiency portion of the 
project for the Corps of Engineers to execute a Project Cooperation 
Agreement, construct a portion of the relief wells, and continue relief 
well design. The fiscal year 2008 budget contains no funding for this 
project.
Melvin Price Lock and Dam
    The State of Illinois also requests $750,000 funding for the Corps 
to continue the cost-shared recreation facilities with the city of 
Alton and $2,400,000 to continue design and construction of punch list 
items. The fiscal year 2008 budget contains no funding for this 
project.
Upper Mississippi River Environmental Management Plan
    Section 509 of the Water Resources Development Act of 1999 
reauthorized the Upper Mississippi River System Environmental 
Management Program (EMP). In its 20 years of existence, the EMP has 
become the most significant effort to restore and protect the natural 
resource values of the Upper Mississippi River. While $23.64 million is 
in this year's budget request, we believe this level of funding is 
below the point that Corps can efficiently continue with the program. 
To pursue this program efficiently, we believe this program should be 
pursued at the reauthorized level of $33.25 million as described in 
section 509 of the Water Resources Development Act of 1999.
Upper Mississippi River Comprehensive Plan
    Section 459 of the Water Resources Development Act of 1999 
authorized the Upper Mississippi River Comprehensive Plan for the Corps 
to develop a 3-year study to address water resource and related land 
resource problems and opportunities in the Upper Mississippi and 
Illinois River Basins. We are requesting that $686,000 be provided in 
the Corps of Engineers General Investigations funding to advance the 
Upper Mississippi Comprehensive Plan to completion.
Sections 204, 206, and 1135 Enhancement Projects
    Section 204, 206, and 1135 programs offer a wide range of 
opportunities to address fish and wildlife habitat needs which exist 
due to past Corps projects and ongoing ecosystem and dredging 
activities. The section 206 program provides a proactive tool for 
Federal participation in aquatic ecosystem restoration initiatives 
where the need for the aquatic restoration activity does not have to 
directly relate to a prior Corps sponsored project. The State of 
Illinois strongly urges full funding of these continuing authorities.
                                 ______
                                 
Prepared Statement of the Salt River Pima-Maricopa Indian Community and 
                       the City of Mesa, Arizona
    Chairman Dorgan, Ranking Member Domenici, and distinguished members 
of the subcommittee, thank you for allowing us to testify on behalf of 
the Salt River Pima-Maricopa Indian Community (SRPMIC) and the city of 
Mesa in support of a fiscal year 2008 appropriation of $1.6 million for 
the Va Shly'ay Akimel, Arizona, project of the U.S. Army Corps of 
Engineers. This project will restore a degraded stretch of the Salt 
River in central Arizona, and it is critically important to the 
environmental ecosystem for the tribe, the city, and the region.
    Construction of dams on the Salt River has damaged vegetation and 
wetlands along the Salt River basin. The Va Shly'ay Akimel project will 
restore ecosystem functions and value to a 14-mile reach of the river, 
within the Indian Community and the City of Mesa. The restoration 
project will improve approximately 1,487 acres of habitat, including 
883 acres of cottonwood/willow community, 380 acres of mesquite bosque, 
200 acres of wetlands, and 24 acres of Sonoran Desert scrub shrub. 
Restoration of this resource is particularly significant within the 
urban setting because riparian areas in the Southwest represent only 1 
percent of the landscape, yet the survival of 75-90 percent of wildlife 
in the West is dependant on riparian areas. In Arizona, over 90 percent 
of riparian areas have been lost due to impacts from European 
settlement and urbanization.
    Mr. Chairman, because of this subcommittee's efforts, over $4 
million has been appropriated for the feasibility and preconstruction 
engineering and design phases of the Va Shly'ay Akimel project over the 
last 6 fiscal years. We are extremely grateful for the subcommittee's 
ongoing support of the project.
    As a result of this prior funding, substantial progress is being 
made and the work needs to be continued. A Feasibility Study and 
Environmental Impact Study were completed in January 2005, determining 
the preferred plan for environmental restoration. Further project 
accomplishments in fiscal year 2006 and fiscal year 2007 included 
initiation of the design phase, mapping, completion of a value 
engineering study, initiation of Geotech Investigations, and 
preliminary engineering.
    For fiscal year 2008, the Corps has a capability to utilize $1.6 
million for continued PED, but the President's budget proposal only 
includes $658,000 for the project. Therefore, we request that the 
subcommittee will provide this higher level of funding in order to 
contain long-term costs and maintain an optimal project schedule.
    As non-federal sponsors of this project, the SRPMIC and the city of 
Mesa fully recognize the importance of restoring the Salt River's 
environmental integrity as soon as possible. As a consequence, the 
tribe and city are committed to discharging the requisite cost-sharing 
obligations associated with the project at the higher funding level 
next year.
    We also note that, as far as we know, this project is the only one 
in the Nation featuring a joint cost-share agreement between an Indian 
tribe and a local community. This makes it a unique project of the 
Corps of Engineers. We believe that our example of municipal-tribal 
cooperation can serve as a model for future joint projects of tribal 
communities and local governments.
    In conclusion, given the progress thus far, scope, and 
environmental impacts, it is critically important that the Va Shly'ay 
Akimel project remain on an optimal schedule. Again, because the Corps 
has a maximum capability of fully utilizing $1.6 million for continued 
PED on this project in fiscal year 2008, we ask that the subcommittee 
fund that amount.
    Thank you for your favorable consideration.
                                 ______
                                 
   Prepared Statement of the Chambers County-Cedar Bayou Navigation 
                            District, Texas
    We express full support of the inclusion of the full capability of 
the USACE for fiscal year 2008 for construction of the project to 
deepen and widen Cedar Bayou, Texas.
    President's budget included $0.
    Funds needed in fiscal year 2008--$9,056,000 (Construction 
General).
                         history and background
    The Rivers and Harbor Act of 1890 originally authorized navigation 
improvements to Cedar Bayou. The project was reauthorized in 1930 to 
provide a 10-foot deep and 100-foot wide channel from the Houston Ship 
Channel to a point on Cedar Bayou 11 miles above the mouth of the 
bayou. In 1931, a portion of the channel was constructed from the 
Houston Ship Channel to a point about 0.8 miles above the mouth of 
Cedar Bayou, approximately 3.5 miles in length. A study of the project 
in 1971 determined that an extension of the channel to project Mile 3 
would have a favorable benefit-to-cost ratio. This portion of the 
channel was realigned from Mile 0.1 to Mile 0.8 and extended from Mile 
0.8 to Mile 3 in 1975. In October 1985, the portion of the original 
navigation project from project Mile 3 to 11 was deauthorized due to 
the lack of a local sponsor.
    In 1989, the Corps of Engineers, Galveston District completed a 
Reconnaissance Report dated June 1989, which recommended a study for an 
improvement to a 12-foot by 125-foot channel from the Houston Ship 
Channel Mile 3 to Cedar Bayou Mile 11 at the State Highway 146 Bridge. 
The Texas Legislature created the Chambers County-Cedar Bayou 
Navigation District in 1997 as an entity to improve the navigability of 
Cedar Bayou. The district was created to accomplish the purpose of 
Section 59, Article XVI, of the Texas Constitution and has all the 
rights, powers, privileges and authority applicable to Districts 
created under Chapters 60, 62, and 63 of the Water Code--Public Entity. 
The Chambers County-Cedar Bayou Navigation District then became the 
local sponsor for the Cedar Bayou Channel.
                project description and reauthorization
    Cedar Bayou is a small coastal stream, which originates in Liberty 
County, Texas, and meanders through the urban area near the eastern 
portion of the City of Baytown, Texas, before entering Galveston Bay. 
The bayou forms the boundary between Harris County on the west and 
Chambers County on the east. The project was authorized in Section 349 
of the Water Resources Development Act 2000, which authorized a 
navigation improvement of 12 feet deep by 125 feet wide from Mile 2.5 
to Mile 11 on Cedar Bayou. Corps studies have indicated that the 
preferred plan is to widen the channel to 100 feet and deepen it to 10 
feet which is the current plan of action.
                   justification and industry support
    First and foremost, the channel must be improved for safety. The 
channel is the home to a busy barge industry. The most cost-efficient 
and safe method of conveyance is barge transportation. Water 
transportation offers considerable cost savings compared to other 
freight modes (rail is nearly twice as costly and truck nearly 4 times 
higher). In addition, the movement of cargo by barge is environmentally 
friendly. Barges have enormous carrying capacity while consuming less 
energy, due to the fact that a large number of barges can move together 
in a single tow, controlled by only one power unit. The result takes a 
significant number of trucks off of Texas highways. The reduction of 
air emissions by the movement of cargo on barges is a significant 
factor as communities struggle with compliance with the Clean Air Act. 
Several navigation-dependent industries and commercial enterprises have 
been established along the commercially navigable portions of Cedar 
Bayou. Several industries have docks on at the mile markers that would 
be affected by this much-needed improvement. These industries include: 
Reliant Energy, Bayer Corporation, Koppel Steel, CEMEX, U.S. Filter, 
Recovery Services and Dorsett Brothers Concrete, to name a few.
                       project costs and benefits
    Congress appropriated $100,000 in fiscal year 2001 for the Corps of 
Engineers to conduct the feasibility study to determine the Federal 
interest in this improvement project. The study indicated a benefit to 
cost ratio of the project of 2.8 to 1. The estimated total cost of the 
project is $16.8 million with a Federal share estimated at $11.9 
million and the non-federal sponsor share of approximately $4.9 
million. Total annual benefits are estimated to be $4.8 million, with a 
net benefit of $3 million. Congress thus far has appropriated nearly 
$1.7 million for this project.
    It has also become an important project for the Port of Houston 
Authority--the Nation's busiest port in foreign tonnage. They hope to 
institute a container on barge facility as soon as this project is 
accomplished. We would appreciate the subcommittee's support of the 
required add of the $9,056,000 for construction of this important 
improvement project. The users of the channel deserve to have the 
benefits of a safer, most cost-effective Federal waterway.
                             current status
    In July 2006, the project feasibility report was accepted and 
approved by Asst. Secretary of the Army John P. Woodley. The PED will 
be completed early fall this calendar year. The project will then be 
ready for construction. The USACE capability of $9,056,000 for fiscal 
year 2008 represents the total Federal share of construction of the 
project.
                                 ______
                                 
  Prepared Statement of the Brazos River Harbor Navigation District, 
                            Freeport, Texas
    We express full support of the inclusion in the fiscal year 2008 
budget for the full capability of the USACE of $721,000--General 
Investigation; $11,738,000--O&M.
    President's budget included $721,000--General Investigation; 
$5,735,000 O&M.
    Additional funds needed for fiscal year 2008 $4,003,000--O&M.
                         history and background
    Port Freeport is an autonomous governmental entity authorized by an 
act of the Texas Legislature in 1925. It is a deep-draft port, located 
on Texas' central Gulf Coast, approximately 60 miles southwest of 
Houston, and is an important Brazos River Navigation District 
component. The port elevation is 3 to 12 feet above sea level. Port 
Freeport is governed by a board of six commissioners (soon to increase 
to seven) elected by the voters of the Navigation District of Brazoria 
County, which currently encompasses 85 percent of the county. Port 
Freeport land and operations currently include 186 acres of developed 
land and 7,723 acres of undeveloped land, 5 operating berths, a 45-foot 
deep Freeport Harbor Channel and a 70-foot deep sink hole. Future 
expansion includes building a 1,300-acre multi-modal facility, cruise 
terminal and container terminal.
    Port Freeport is conveniently accessible by rail, waterway and 
highway routes. There is direct access to the Gulf Intracoastal 
Waterway, Brazos River Diversion Channel, and, State Highways 36 and 
288. Located just 3 miles from deep water, Port Freeport is one of the 
most accessible ports on the Gulf Coast.
                          project description
    The fiscal year 2002 Energy and Water Appropriations signed into 
law included a $100,000 appropriation to allow the United States Army 
Corps of Engineers (USACE) to conduct a reconnaissance study to 
determine the Federal interest in an improvement project for Freeport 
Harbor, Texas. The USACE, in cooperation with the Brazos River Harbor 
Navigation District as the local sponsor, has completed that study. The 
report indicates that ``transportation savings in the form of National 
Economic Development Benefits (NED) appear to substantially exceed the 
cost of project implementation,'' thus confirming ``a strong federal 
interest in conducting the feasibility study of navigation improvements 
at Freeport Harbor.'' Congress has to date appropriated over $2.6 
million for this project.
    Port Freeport has the opportunity to solidify significant new 
business for Texas with this improvement project. In addition, the 
improvement to the environment by taking a huge number of trucks off of 
the road, transporting goods more economically and environmentally 
sensitive by waterborne commerce is infinitely important to the 
community, the State, and the Nation. Moreover, the enhanced safety of 
a wider channel cannot be overstated. The emergence of an LNG facility 
at Port Freeport--a joint venture of Conoco-Philips and Cheniere Energy 
further solidifies the importance of keeping this critical waterway at 
optimum depth and width.
                    economic impact of port freeport
    Port Freeport is 13th in foreign tonnage in the United States. It 
is responsible for augmenting the Nation's economy by over $7 billion 
annually and generating over nearly 24,000 jobs in Texas, over 7,000 
direct. It also augments the economy by providing annual State and 
local taxes of over $150,000 and an additional of over $300 million in 
Federal tax revenues. Its chief import commodities are bananas, fresh 
fruit and aggregate while top export commodities are rice and 
chemicals. The port's growth has been staggering in the past decade, 
becoming one of the fastest growing ports on the Gulf Coast. Port 
Freeport's economic impact and its future growth is justification for 
its budding partnership with the Federal Government in this critical 
improvement project.
                     defense support of our nation
    Port Freeport is a strategic port in times of National Defense of 
our Nation. It houses a critically important petroleum oil reserve--
Bryan Mound. Its close proximity to State Highways 36 and 288 make it a 
convenient deployment port for Fort Hood. In these unusual times, it is 
important to note the importance of our ports in the defense of our 
Nation and to address the need to keep our Federal waterways open to 
deep-draft navigation.
                     community and industry support
    This proposed improvement project has wide community and industry 
support. The safer transit and volume increase capability is an 
appealing and exciting prospect for the users of Freeport Harbor and 
Stauffer Channel. The anticipated positive benefit to cost ratio that 
was indicated from the Corps of Engineers reconnaissance study firmly 
solidified the Federal interest.
         what we need from the subcommittee in fiscal year 2008
    The administration's budget included the full Corps capability for 
the continuation of the feasibility study which will be conducted at a 
50/50 Federal Government/local sponsor share. This will keep this 
project on an optimal and most cost-efficient time frame for the 
Federal Government and the local sponsor. We respectfully request that 
the full amount in the administration's budget remain in the Senate 
mark-up. In addition, the Corps capability for maintenance dredging for 
fiscal year 2008 is $11.738 million. The administration budget included 
$5.735 million. We respectfully request the addition of $6,002,000 in 
O&M.
                                 ______
                                 
         Prepared Statement of the Red River Valley Association
    Mr. Chairman and members of the committee, I am Wayne Dowd, and 
pleased to represent the Red River Valley Association as its president. 
Our organization was founded in 1925 with the express purpose of 
uniting the citizens of Arkansas, Louisiana, Oklahoma and Texas to 
develop the land and water resources of the Red River Basin, Enclosure 
1.
    The resolutions contained herein were adopted by the Association 
during its 82nd Annual Meeting in Shreveport, Louisiana, on February 
22, 2007, and represent the combined concerns of the citizens of the 
Red River Basin area as they pertain to the goals of the Association. 
Enclosure 2 represents a summary of the projects and funding levels 
supported by the Association.
    The President's budget included $4.871 billion for the civil works 
programs. Even though it is $138 million more than fiscal year 2007 it 
is $458 million less than what Congress appropriated in fiscal year 
2007, $5.329 billion (9 percent reduction). The problem is also how the 
funds are distributed. A few projects received their full ``Corps 
Capability'' to the detriment of many projects that received no 
funding. The $4.871 billion level does not come close to the real needs 
of our Nation. A more realistic funding level to meet the requirements 
for continuing the existing needs of the civil works program is $8 
billion in fiscal year 2008. The traditional civil works programs 
remain at the low, unacceptable level as in past years. These projects 
are the backbone to our Nation's infrastructure for waterways, flood 
prevention, water supply and ecosystem restoration. We remind you that 
civil works projects are a true ``jobs program'' in that up to 85 
percent of project funding is contracted to the private sector; 100 
percent of the construction, as well as much of the architect and 
engineering work. Not only do these projects provide jobs, but provide 
economic development opportunities for our communities to grow and 
prosper, creating permanent jobs.
    There are several policy changes proposed by the administration 
that we have concerns with.
  --Major rehabilitation and endangered species projects were moved 
        from the CG account to the O&M account. When you take out these 
        major rehab projects the O&M proposed budget is actually less 
        than fiscal year 2007. They have ``disguised'' an actual 
        reduction in O&M project funding.
  --They also propose to continue using the Inland Waterway Trust Fund 
        (ITWF) to fund 50 percent of the major rehab projects that were 
        moved to O&M. The IWTF was authorized for CG projects, not O&M. 
        If this is allowed, it will then be easy to recommend that all 
        O&M funding be taken from the IWTF and this can never be 
        allowed to happen.
  --Another proposal allocates O&M funding by region and eliminates 
        funding by individual project. We do not accept this concept 
        since you will loose ownership and identity of each project; 
        therefore, losing grass root support. If this was done, due to 
        reprogramming constraints, then reprogramming should be 
        addressed. Major reprogramming issues are with CG projects, not 
        with O&M projects.
    We have great concerns over the issue of ``earmarks''. Civil Works 
projects are not earmarks! Civil Works projects go through a process; 
reconnaissance study, feasibility study, benefit-to-cost ratio test, 
EIS, peer review, review by agencies, public review and comment, final 
Chief of Engineer approval, authorization by all of Congress in a WRDA 
bill and signed by the President. Soon they may be subject to 
independent review. No other Federal program goes through such a 
rigorous approval process. Each justified project ``stands alone'', are 
proven to be of national interest and should be funded by project. For 
most projects there is local sponsor cost sharing during the 
feasibility study, construction and for O&M. Those who have 
contributed, in most cases--millions of dollars--to the process, must 
have the ability to have a say for their projects to get funded. That 
voice is through their congressional delegation. If Congress provides a 
lump sum appropriation, to the Corps, for GI, CG and O&M, who will 
decide what gets funded? The answer is OMB and the administration. 
Congress will have given up its responsibility to provide a national 
budget. We believe that earmarks are not in the national interest, but 
it does not pertain to the civil works program. For civil works it is 
an issue of priorities and who will determine that, OMB or Congress! We 
hope Congress keeps their responsibility to set civil works priorities.
    We want to express our concern for ``fully funded'' contracts. In 
our fiscal year 2007 testimony we addressed this concern stating: ``It 
is possible that the Corps will have a carryover that exceeds $1 
billion.'' In fact the Corps had a $1.4 billion carryover. Our fear 
became reality and will grow to $3 billion at the end of fiscal year 
2007 if this policy is not changed. Hundreds of projects are neglected 
that could be funded each year and will drastically increase in cost 
when actually done. This is a true waste of Federal funds and unfair to 
local sponsors who also share the increase in cost. Another serious 
consequence is that it neglects the workload distribution of Corps 
Districts. Are we prepared to consolidate and close down Districts that 
do not have the workload to support their current workforce?
    The inland waterway tributary rivers continue to face scrutiny on 
what determines a successful waterway. This has an impact on the 
operations and maintenance funding a waterway receives. Using criteria 
that only considers tons, actually moved on the waterway, neglects the 
main benefit that justified the original waterway project, 
transportation cost savings. Currently there is no criteria used to 
consider ``water compelled rates'' (competition with rail). We know 
that there are industries not using our waterway because rail rates 
were reduced, to match the waterborne rates, the same year our waterway 
became operational. If the operation of our waterway were terminated 
the rail rates would increase. Many industries have experienced great 
``national'' transportation savings without using the waterway, which 
is why the project was authorized.
    The main problem is that there is no ``post-project'' evaluation 
for navigation projects. We support the development of such an 
evaluation and volunteer the J. Bennett Johnston Waterway and our 
efforts to develop one. Such an evaluation could be made once every 5 
years to insure the waterway continues to meet the determined criteria. 
We also believe any evaluation adopted must have input from and be 
validated by the administration, Congress and industry. Too much money 
has been expended to use an evaluation that is unfair and disregards 
the true benefits realized from these waterway projects.
    I would now like to comment on some of our specific requests for 
the future economic well being of the citizens residing in the four 
State Red River Basin regions.
    Navigation.--The J. Bennett Johnston Waterway is living up to the 
expectations of the benefits projected. We are extremely proud of our 
public ports, municipalities and State agencies that have created this 
success. This upward ``trend'' in usage will continue as new industries 
commence operations. At the Port of Shreveport-Bossier ``Steelscape'' 
became operational in April 2006 processing steel, eventually employing 
250 people and moving 500,000 tons per year on the Waterway. A major 
power company, CLECO, is investing $1 billion in its Rodemacher Plant 
near Boyce, Louisiana, on the lower Red River and is expected to move 
over 3 million tons of Coal and ``petroleum coke'', by the Waterway, in 
2009. These projects are a reality and there are many more customers 
considering using our Waterway.
    You are reminded that the Waterway is not complete; 6 percent 
remains to be constructed, $121 million. We appreciate Congress's 
appropriation level in fiscal year 2006 of $13 million; however, the 
President's fiscal year 2007 budget drastically cuts that to $1.5 
million, which is unacceptable. There is a capability for $19.5 million 
of work, but we realistically request $12 million to keep the project 
moving toward completion.
    Now that the J. Bennett Johnston Waterway is reliable year round we 
must address efficiency. Presently a 9-foot draft is authorized for the 
J. Bennett Johnston Waterway. All waterways below Cairo, Illinois are 
authorized at 12-foot, to include the Mississippi River, Atchafalaya 
River, Arkansas River and Gulf Intracoastal Waterway. A 12-foot channel 
would allow an additional one-third capacity, per barge, which will 
greatly increase the efficiency of our Waterway and further reduce 
transportation rates. This one action would have the greatest, positive 
impact to reduce rates and increase competition, bringing more 
industries to use waterborne transportation. We request a 1-year 
reconnaissance study be funded to evaluate this proposal, at a cost of 
$100,000. Fact: approximately 95 percent is already at 12-foot year 
round.
    The feasibility study to continue navigation from Shreveport-
Bossier City, Louisiana, into the State of Arkansas will be completed 
in calendar year 2007. There is great optimism that the study will 
recommend a favorable project; however, the administration must 
consider the benefit analysis by modern day criteria, not by 25-year-
old standards. Benefit analysis is by administration policy and they 
can consider externality benefits that impact society today. This 
region of SW Arkansas and NE Texas continues to suffer major 
unemployment and this navigation project, although not the total 
solution will help revitalize the economy. We request funding of 
$400,000 to initiate planning, engineering and design, PED.
    Flood Prevention.--The recent events in New Orleans have 
demonstrated what will happen when we ignore our levee systems. We know 
the Red River levees in Arkansas do not meet Federal standards, which 
is why we have the authorized project, ``Red River Below Denison Dam, 
TX, AR & LA''. Now is the time to bring these levees up to standards, 
before a major flood event, which will occur.
    We continue to consider flood control a major objective and request 
you continue funding the levee rehabilitation projects ongoing in 
Arkansas. Five of 11 levee sections have been completed and brought to 
Federal standards. Appropriations of $5 million will construct one more 
levee section in Lafayette County, AR.
    The levees in Louisiana have been incorporated into the Federal 
system; however, they do not meet current safety standards. These 
levees do not have a gravel surface roadway, threatening their 
integrity during times of flooding. It is essential for personnel to 
traverse the levees during a flood to inspect them for problems. 
Without the gravel surface the vehicles will cause rutting, which can 
create conditions for the levees to fail. A gravel surface will insure 
inspection personnel can check the levees during the saturated 
conditions of a flood. Funding has been appropriated in the past and 
approximately 50 miles of levees in the Natchitoches Levee District 
were completed this year. We request $2 million to continue this 
important project in Louisiana.
    Bank Stabilization.--One of the most important, continuing 
programs, on the Red River is bank stabilization in Arkansas and North 
Louisiana. We must stop the loss of valuable farmland that erodes down 
the river and interferes with the navigation channel. In addition to 
the loss of farmland is the threat to public utilities such as roads, 
electric power lines and bridges; as well as increased dredging cost in 
the navigable waterway in Louisiana. These bank stabilization projects 
are compatible with subsequent navigation into Arkansas and we urge 
that they be continued in those locations designated by the Corps of 
Engineers to be the areas of highest priority. We appreciated the 
congressional funding in past fiscal years and request you fund this 
project at a level of $6 million in fiscal year 2008.
    Water Quality.--Nearly 3,500 tons of natural salts, primarily 
sodium chloride, enter the upper reaches of the Red River each day, 
rendering downstream waters unusable for most purposes. The Truscott 
Brine Lake project, which is located on the South Fork of the Wichita 
River in King and Knox Counties, Texas became operational in 1987. An 
independent panel of experts found that the project not only continues 
to perform beyond design expectations in providing cleaner water, but 
also has an exceptionally favorable benefit-to-cost ratio.
    The Assistant Secretary of the Army (Civil Works), in October 1998, 
agreed to support a re-evaluation of the Wichita River Basin tributary 
of the project. The re-evaluation report was completed and the Director 
of Civil Works signed the Environmental Record of Decision. The plan 
was found to be economically justified. This year the ASA (CW) directed 
that construction would not proceed until a local sponsor was found to 
assume 100 percent of the O&M for the project. This is based on a 
policy decision, although legal decisions state otherwise. We strongly 
disagree with this position, since the current local sponsor signed a 
cooperation agreement that did not include responsibility for O&M, no 
project documents require this and the project truly benefits four 
States, which makes it unreasonable to place the O&M burden on one 
local sponsor. Since 1987 the Federal Government has funded over $1.5 
million per year for O&M. Completion of this project will reclaim Lake 
Kemp as a usable water source for the City of Wichita Falls, Sheppard 
AFB and the region. This project will provide improved water quality 
throughout the four States of the Red River providing the opportunity 
to use surface water and reduce dependency on ground water. We request 
appropriations of $2,500,000 to continue the Wichita River features in 
Texas.
    Over the past year there has been a renewed interest by the Lugart-
Altus Irrigation District to evaluate construction of Area VI, of the 
Chloride Control Project, in Oklahoma. They have obtained the support 
of many State and Federal legislators, as well as a letter from the 
Oklahoma Governor in support of a re-evaluation report. We request an 
appropriation of $1,625,000 to continue with this effort. Total request 
for the Chloride Control Project.--$4,125,000.
    Water Supply.--Lake Kemp, just west of Wichita Falls, TX, is a 
major water supply for the needs of this region. Due to siltation the 
available storage of water has been impacted. A reallocation study is 
needed to determine water distribution needs and raising the 
conservation pool. Total O&M of $892,000 is requested for fiscal year 
2008 ($210,000 is required for the base annual O&M, $467,000 for the 
study and $215,000 for backlog grouting & dam repair).
    Operation & Maintenance.--Full O&M capability levels are not only 
important for our Waterway project but for all our Corps projects and 
flood control lakes. The backlog of critical maintenance only becomes 
worse and more expensive with time. We urge you to appropriate funding 
to address this serious issue at the expressed full Corps capability.
    We are sincerely grateful to you for the past support you have 
provided our projects. We hope that we can count on you again to fund 
our needs and complete the projects started that will help us diversify 
our economy and create the jobs so badly needed by our citizens. We 
have included a summary of our requests for easy reference, Enclosure 
2.
    Thank you for the opportunity to present this testimony and project 
details of the Red River Valley Association on behalf of the 
industries, organizations, municipalities and citizens we represent 
throughout the four State Red River Valley region. The Civil Works 
program directly relates to national security by investing in economic 
infrastructure. If waterways are closed companies will not relocate to 
other parts of the country--they will move over seas. If we do not 
invest now there will be a negative impact on our ability to compete in 
the world market threatening our national security.
               enclosure 1.--red river valley association
    The Red River Valley Association is a voluntary group of citizens 
bonded together to advance the economic development and future well 
being of the citizens of the four-State Red River Basin area in 
Arkansas, Louisiana, Oklahoma and Texas.
    For the past 81 years, the Association has done notable work in the 
support and advancement of programs to develop the land and water 
resources of the Valley to the beneficial use of all the people. To 
this end, the Red River Valley Association offers its full support and 
assistance to the various Port Authorities, Chambers of Commerce, Levee 
and Drainage Districts, Industry, Municipalities and other local 
governing entities in developing the area along the Red River.
    The Resolutions contained herein were adopted by the Association 
during its 82nd Annual Meeting in Shreveport, Louisiana on February 22, 
2007, and represent the combined concerns of the citizens of the Red 
River Basin area as they pertain to the goals of the Association, 
specifically:
  --Economic and Community Development;
  --Environmental Restoration;
  --Flood Control;
  --Bank Stabilization;
  --A Clean Water Supply for Municipal, Industrial and Agricultural 
        Uses;
  --Hydroelectric Power Generation;
  --Recreation; and,
  --Navigation.
    The Red River Valley Association is aware of the constraints on the 
Federal budget, and has kept those constraints in mind as these 
resolutions were adopted. Therefore, and because of the far-reaching 
regional and national benefits addressed by the various projects 
covered in the resolutions, we urge the members of Congress to review 
the materials contained herein and give serious consideration to 
funding the projects at the levels requested.

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

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

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

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

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

    BE IT FURTHER RESOLVED that the General Manager-Chief Engineer is 
directed to distribute certified copies of this resolution to the 
Secretary of the Army, Members of the House of Representatives 
Committee on Appropriations and Subcommittee on Energy and Water 
Development, the Senate Committee on Appropriations and Subcommittee on 
Energy and Water Development, and the District's Congressional 
Delegation--Senators Dianne Feinstein and Barbara Boxer, Congressmen 
Ken Calvert and Darrell Issa, and Congresswoman Mary Bono.
murrieta creek flood control, environmental restoration and recreation 
                                project
    Murrieta Creek poses a severe flood threat to the cities of 
Murrieta and Temecula. Overflow flooding from the undersized creek with 
a tributary watershed area of over 220 square miles has periodically 
wreaked havoc on the communities--most recently in 1993 when nearly $20 
million in damages was incurred by the public and private sectors. As 
the area continues to develop, the potential damages (direct and 
indirect) will only continue to increase. In 1997 the U.S. Army Corps 
of Engineers initiated studies on the Creek. The final outcome of this 
endeavor was congressional authorization in 2000 of the $90 million, 
multifaceted project known as the Murrieta Creek Flood Control, 
Environmental Restoration and Recreation Project.
    This project is being designed and will be constructed in four 
distinct phases. Phases 1 and 2 include channel improvements through 
the city of Temecula. Phase 3 involves the construction of a 250-acre 
detention basin, including 160 acres of new environmental habitat and 
over 50 acres of recreational facilities. Phase 4 will include channel 
improvements through the city of Murrieta. Equestrian, bicycle and 
hiking trails as well as a continuous vegetated habitat corridor for 
wildlife are components of the entire 7-mile long project.
    The Omnibus Appropriations Bill for fiscal year 2003 provided $1 
million for a new construction start for this critical public safety 
project and construction activities commenced in the fall of 2003 on 
Phase 1. Appropriations for fiscal year 2004 and additional funds 
allocated allowed the Corps to continue construction on Phase 1, which 
was completed in December 2004. Phase 2 traverses Old Town Temecula, 
one of the hardest hit areas during the flooding of 1993. The Corps 
anticipates having a Phase 2 construction contract ready to award in 
the winter of 2007. The District, therefore, respectfully requests the 
committee's support of a $13,000,000 appropriation in fiscal year 2008 
to allow the Corps to complete the Design Documentation Report, and 
initiate construction on Phase 2 of the long awaited Murrieta Creek 
Flood Control, Environmental Restoration and Recreation Project.
   heacock and cactus channels--protection of march air reserve base
    Heacock and Cactus Channels are undersized, earthen channels that 
border the eastern and northern boundary of the March Air Reserve Base 
(MARB). Substantial vegetation becomes established within both channels 
and impedes the conveyance of tributary storm flows to an existing 
outlet located downstream. Storm flows overtop the Cactus Channel and 
traverse MARB causing major disruption of the Base's operation, 
including the fueling of airplanes and transport of troops and 
supplies. The record rainfall of 2004/2005 also caused extensive 
erosion along Heacock Avenue jeopardizing existing utilities within the 
road right of way and cutting off access to approximately 700 
residences within the city of Moreno Valley.
    Under section 205 of the Continuing Authorities Program (CAP), the 
Corps received $100,000 in fiscal year 2005 and completed an Initial 
Appraisal Report which determined the feasibility of proceeding with a 
project to provide flood protection to this sensitive area. With the 
$546,000 received in fiscal year 2006 the Corps completed a Project 
Management Plan, executed a Feasibility Cost Sharing Agreement and is 
nearing completion of the Feasibility Study. However, this study found 
that MARB would receive approximately 85 percent of the benefits from 
constructing this project making the use of section 205 funds 
inappropriate. Therefore, the project will require Special 
Authorization under WRDA to approve and authorize the project and 
appropriate the $16,000,000 needed to provide flood protection to the 
base.
    The District requests support from the Committee for Special 
Authorization under WRDA approving the project and authorizing 
appropriations of $16,000,000 to complete the design and construct the 
project providing this critical military installation flood protection.
               certification of corps constructed levees
    As part of the Federal Emergency Management Agency's (FEMA) Map 
Modernization Program, the District, as well as all other agencies, 
cities and counties in the Nation are being required to provide 
certification of the reliability of all levee structures providing 
flood protection to our citizens. Many of these projects were 
constructed by the U.S. Army Corps of Engineers and in these cases, 
FEMA is requesting that the certification be provided by the Corps. 
Certification involves an extensive amount of geotechnical analysis, 
including field and lab material testing, slope stability and seepage 
checks, hydrologic and hydraulic verification and other costly and time 
consuming activities, as well as the review of operation and 
maintenance records. These projects have an established Federal 
interest. Therefore, a National Policy needs to be established 
addressing the need for these federally constructed projects to be 
certified by the Corps and authorizing the Corps to perform the 
required analysis. Furthermore, the Corps should also be authorized to 
provide Federal assistance for design and construction costs associated 
with any necessary rehabilitation, repair or reconstruction of projects 
that are found not to meet the CFR 65.10 FEMA criteria. Non-conforming 
levees put the public at risk and should be a Federal priority. Within 
our District, there are three Corps constructed levees requiring this 
Federal certification: Santa Ana River Levees constructed in 1958, 
Chino Canyon Levee constructed in 1972 and San Jacinto River Levee 
constructed in 1982.
    The District requests support from the committee for the 
establishment of a National Policy addressing this issue and the 
authorization and funding needed for the Corps to meet its obligations 
to the numerous local sponsors of federally constructed levees 
throughout the country. The Los Angeles District needs an appropriation 
of $3,000,000 for fiscal year 2008 under the Inspection of Completed 
Works--CA Operations and Maintenance Appropriation 3123 to accomplish 
the needed certification work.
                norco bluffs bank stabilization project
    The Norco Bluffs Bank Stabilization project consists of a soil 
cement toe protection structure constructed to the 100-year flood level 
at the base of the bluff, and a stable earthen buttress fill 
constructed to the top of the bluff along the Santa Ana River, in the 
city of Norco. The bluff stabilization work extends easterly from the 
Interstate 15 bridge to near Center Avenue. The estimated total cost of 
the project was approximately $14 million. The Corps received a total 
of $7.2 million in construction funds in the fiscal year 1998, fiscal 
year 1999 and fiscal year 2000 Federal budgets for the project. Since 
the available Federal funding fell short of that necessary to construct 
the entire project at once, the project was broken into two phases and 
Phase 1 was completed in May 2000. This included a soil cement toe 
protection structure along the entire length of the project, as well as 
construction of approximately 1,300 feet of buttress fill in the most 
critical reach of the bluffs, between Valley View and Corona Avenues. 
The Phase 2 contract involved the construction of the balance of the 
buttress fill and construction of most of Phase 2 was completed in 
December 2003, with the exception of hydroseeding the slopes, which was 
deferred until the appropriate season to ensure successful 
establishment of the native vegetation. Unfortunately, the record 
rainfall of the 2004/2005 season caused damages to the project that 
must be repaired in order to complete the project.
    The District requests support from the committee for a fiscal year 
2008 appropriation of $1,000,000 to complete the repairs, hydroseed the 
slopes and turn the project over to the District.
                       santa ana river--mainstem
    The Water Resources Development Act of 1986 (Public Law 99-662) 
authorized the Santa Ana River--All River project that includes 
improvements and various mitigation features as set forth in the Chief 
of Engineers' Report to the Secretary of the Army. The Boards of 
Supervisors of Orange, Riverside and San Bernardino Counties continue 
to support this critical project as stated in past resolutions to 
Congress.
    For fiscal year 2008, an appropriation of $67,840,000 is necessary 
to provide funding for the following activities: $20,000,000 for Reach 
9 of the Santa Ana River immediately downstream of Prado Dam, 
$2,840,000 for the Seven Oaks Dam project and $45,000,000 for Prado 
Dam.
    The District respectfully requests that the committee support an 
overall $67,840,000 appropriation of Federal funding for fiscal year 
2008 for the Santa Ana River Mainstem Project.
                                 ______
                                 
     Prepared Statement of the Sacramento Area Flood Control Agency
    Dear Mr. Chairman and members of the subcommittee: On behalf of the 
Sacramento Area Flood Control Agency (SAFCA), its member agencies and 
the millions of people that may be directly or indirectly impacted by 
floods in Sacramento, we extend our sincere appreciation to the 
committee for the past consideration and support extended to the 
ongoing local, State and Federal effort to reduce flood risk in the 
Capital of California.
    According to the U.S. Army Corps of Engineers (Corps), Sacramento's 
flood risk continues to be the highest of major urban areas in the 
country. Located at the confluence of the Sacramento and American 
Rivers, the Sacramento floodplain contains 165,000 homes, over 488,000 
residents, 1,300 government facilities including the State Capital, and 
businesses providing 200,000 jobs. It is the hub of a 6-county regional 
economy that provides 800,000 jobs for 1.5 million people. A major 
flood along the American River or the Sacramento River would cripple 
this economy, cause between $7.0 billion and $16.0 billion in direct 
property damages and likely result in significant loss of life.
    The devastating flood of February 1986 revealed that Sacramento's 
defenses provided less than 100-year flood protection, far less than 
previously thought. SAFCA was created in 1989 to work with the Corps 
and the State to improve the Sacramento region's flood protection as 
rapidly as possible. Much progress has been made since then, with a 
combined investment of over $428 million in levee improvements, 
reservoir operations, and floodplain restoration. Nevertheless, much 
remains to be done. In collaboration with the Corps and the State, 
SAFCA is pursuing completion of levee improvements needed to achieve 
the minimum 100-year level of flood protection, while advancing 
measures which will lead to better than 200-year flood protection over 
the next decade.
    SAFCA's Federal fiscal year 2008 Federal budget requests are shown 
in order of priority in Table 1. Consistent with previous years' 
requests, SAFCA top priority is achieving 100-year level flood 
protection for the Sacramento area. While this goal has now been 
achieved for most of the community, work along the tributaries of 
Morrison Creek needs to move forward at Corps capability to achieve 
this level of protection for about 6,000 residential properties (about 
16,000 people). Therefore the South Sacramento Streams Group Project 
remains the top priority.
    The American River Common Features Project needs to continue at 
capability as well, to complete project elements needed to safely 
convey 160,000 cfs in the Lower American River.
    The Folsom Dam Joint Federal Project relies on the authority of the 
Folsom Dam Modifications Project and Reclamation's Dam Safety Program 
for the construction of an auxiliary spillway on the south abutment of 
the dam. This is the cornerstone of Sacramento's 200-year flood 
program, for which planning and design need to proceed at Corps 
capability levels. SAFCA supports the continuing planning for up to a 
3.5 foot raise of Folsom Dam embankments, as well as construction of 
the Folsom Dam Bridge through fiscal year 2008.

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

    Updates on progress on each of the referenced projects is provided 
in the following paragraphs.
             south sacramento county streams group project
    This project will provide a minimum of 100-year flood protection 
from the Morrison Stream Group, including Morrison Creek, Florin Creek, 
Elder Creek, and Union House Creek when completed. This project 
protects the existing community, as well as helps facilitate the city's 
economic development goals for the South Sacramento region. SAFCA, the 
State, and the Corps are working together to expedite construction of 
this project. Levee improvements around the Regional Wastewater 
Treatment Plant were completed in 1996. The Morrison Creek north levee 
from the Sacramento River east to the Union Pacific Railroad, and north 
to Brookfield Drive were completed in 2005-2006. In 2007 levee 
improvements will be constructed on Morrison Creek and tributaries as 
far east as Franklin Boulevard. SAFCA's goal is to implement Phase 2 
levee improvements eastward to Highway 99 by 2012 to provide 100-year 
flood protection from Morrison Creek flooding.
                 american river common features project
American River Levees
    Construction of the Mayhew levee improvements has been a high 
priority and construction is planned for late summer 2007. Additional 
levee improvements to address gaps in the slurry walls along the 
American River levees on both sides of the river, and to provide levee 
height parity are expected to go to construction in 2008. This work 
will go a long way towards meeting the goal of safely conveying 160,000 
cubic feet per second through Sacramento, which will be required to 
provide 200-year flood protection on the American River.
Natomas General Re-evaluation Report (GRR)
    The Corps is studying alternatives for levee improvements needed to 
provide the Natomas basin with 200-year flood protection. The Corps 
study will proceed concurrently with SAFCA's construction of those 
improvements. The State Reclamation Board has requested section 104 
Credit for levee improvements constructed by SAFCA, with the goal of 
obtaining Federal reimbursement for State and SAFCA funding for 
construction of these improvements over the next several years. Funding 
for the Corps study effort is needed to keep the Corps study on 
schedule for completion of the GRR in 2009, thus paving the way for 
Congressional reimbursement for State and SAFCA expenditures in 2010 
and beyond.
Pocket General Re-Evaluation Report (GRR)
    SAFCA has initiated reconnaissance planning for measures which may 
be needed to provide 200-year flood protection for the Sacramento River 
East levee south of the American River. SAFCA will request that the 
Corps initiate a second GRR under the American River Common Features 
Authority, with the goal of expediting the alternative formulation 
process for any levee improvements which may be needed in this reach.
            folsom dam modifications: joint federal project
    This project will include construction of a new auxiliary spillway 
on the east abutment to Folsom Dam. This new spillway will both provide 
sufficient release capacity to allow Folsom Dam to control the 200-year 
flood, as well as to safely pass a Probable Maximum Flood without 
overtopping the dam. Since June of 2005 the Corps, Reclamation, the 
State of California, and SAFCA have rapidly advanced planning for this 
project, including a joint EIR/EIS, a Corps Post Authorization Change 
(PAC) Report by the Corps, and a Reclamation Dam Safety Modifications 
Report. All these reports will be completed by late Spring 2007, 
setting the stage for excavation to begin on the auxiliary spillway and 
related Reclamation dam safety work in October 2007. The project will 
be jointly constructed by the Corps and Reclamation, with the State and 
SAFCA serving as non-Federal cost sharing partners. The Corps will 
continue to design their portion of the JFP with construction starting 
in following years.
                        folsom dam raise project
    Based on current Corps design studies, a raise of up to 3.5 feet of 
the dikes and wingdams around Folsom Lake may be constructed under this 
project authority in conjunction with the Folsom Dam Modifications 
project. The Folsom Dam Bridge, an authorized part of this project, is 
currently under construction by the Corps, with a planned opening for 
traffic by the end of 2008. Ecosystem restoration is also an authorized 
component of this project, focusing on improving salmonid habitat in 
the Lower American River through improved temperature control for 
Folsom Dam releases.
                     natomas phase i reimbursement
    SAFCA is seeking reimbursement for work completed on Natomas levees 
under Federal authority. A total of $21 million in reimbursements have 
been authorized and appropriated, of which $16.5 million has been paid 
to SAFCA, leaving about $4.5 million which has been appropriated but 
not reimbursed to SAFCA. SAFCA needs the $4.5 million to help fund 
SAFCA's flood control improvement efforts.
                sacramento river bank protection project
    During the Construction season of 2006, an impressive amount of 
bank protection was completed along the Sacramento River including nine 
critical erosion sites along the Sacramento River east levee protecting 
Sacramento. The work has continued in 2007, during which another three 
sites were under construction. This program, executed by the Corps in 
close collaboration with the State, has been very effective in rapidly 
addressing serious erosion defects in levees protecting the Sacramento 
area and in other parts of the central valley. Additional funding, as 
well as new implementation authority, will be needed to continue 
repairs of critical erosion issues within the river system.
                                 ______
                                 
      Prepared Statement of the National Corn Growers Association
    The National Corn Growers Association (NCGA) appreciates the 
opportunity to share with the subcommittee our energy and water 
development appropriations priorities for fiscal year 2008. In general, 
our appropriations priorities include an overall increase in U.S. Army 
Corps of Engineers' funding to address the needs of our failing inland 
waterways system; $24 million for pre-construction engineering and 
design (PED) for the project entitled ``UMR-IWW System Navigation 
Study, IL, IA, MN, MO, & WI'' (Authority: section 216, Flood Control 
Act of 1970 (Public Law 91-612)); and continued support for the 
Department of Energy's Biomass Technologies Program.
    NCGA represents nearly 33,000 corn farmers from 46 States. NCGA 
also represents more than 300,000 farmers who contribute to corn check 
off programs and 26 affiliated State corn organizations across our 
country, working together to create new opportunities and markets for 
corn growers.
    America's corn producers continue to make a significant and 
important contribution to our Nation's economy. Over the last 5 years, 
the Nation's corn crop has averaged 10.3 billion bushels resulting in 
an annual average farm gate value of almost $22 billion. The relatively 
stable production over the past 10 years, made possible by innovation 
in production practices and technological advances, has helped to 
ensure ample supplies of corn for livestock, an expanding ethanol 
industry, new biobased products and a host of other uses in the corn 
industry.
    Key to our success is reliable, cost-effective and efficient 
transportation--whether by barge, truck or rail. Competition among 
these modes of transportation helps farmers receive their farm inputs, 
meet their customers' demand for timely delivery of products and 
successfully compete with foreign producers. Without a competitive 
transportation system, the promise of expanded trade and commercial 
growth is empty, job opportunities are lost, and we will be unprepared 
for the global challenges of this new century.
                      u.s. army corps of engineers
    Our country's inland navigation system plays a critical role in our 
Nation's economy, moving more than a billion tons of domestic commerce 
valued at more than $300 billion. Each year, more than 1 billion 
bushels of grain (over 60 percent of all grain exports) move to export 
markets via the inland waterways system. Inland waterways relieve 
congestion on our already over-crowded highways and railways that run 
through cities. One jumbo barge has the same capacity as 58 trucks or 
15 rail cars. A typical 15-barge tow on our Nation's rivers is 
equivalent to 870 trucks.
    Additionally, navigation offers transportation with unparalleled 
environmental benefits. Barges operate at 10 percent of the cost of 
trucks and 40 percent of the cost of trains, while releasing 20 times 
less nitrous oxide, 9 times less carbon monoxide, 7 times less 
hydrocarbons, and burning 10 times less high-price fuel.
    Unfortunately, investment in the inland waterways system has not 
kept pace with its needs and is deteriorating. Funding (in constant 
dollars) for operations and maintenance (O&M) on America's inland 
navigation system has remained flat for more than two decades. During 
this period, an increasing amount of routine maintenance on waterways 
infrastructure has been deferred. This deferred maintenance has become 
unfunded maintenance, and the aging waterways infrastructure, combined 
with the growing O&M backlog, has created today's average of 30 
unscheduled lock shutdowns per year.
    Over the past 5 years the U.S. Army Corps of Engineers reported 
more than 150 emergency lock closures on America's inland navigation 
system. Several high-profile closures have raised reliability concerns 
among shippers, carriers, the U.S. Army Corps of Engineers, and 
ultimately consumers who pay increased costs for expensive 
transportation delays.
    Tight O&M funding and the resultant ``fix-as-fail'' policy have led 
to a self-defeating cycle where routine maintenance dollars are now 
needed for emergency repairs. As critical maintenance needs grow, they 
become candidates for major rehabilitation--a trend that is not good 
for the waterways industry or for the Nation.
    NCGA is appreciative of the successful efforts made by this 
subcommittee in recent years to increase the budget for the U.S. Army 
Corps of Engineers. NCGA strongly supports continuing this trend with a 
significant increase over last year's funding levels to address the 
critically needed repairs and delayed construction schedules facing the 
Corps. It's important to get our inland waterways infrastructure back 
on track so we can meet the ever-increasing demands of the global 
marketplace.
                pre-construction engineering and design
    The Upper Mississippi River and Illinois Waterway's infrastructure 
was built in the 1930's with a life expectancy of 50 years. As a 
result, the infrastructure is approaching 80 years of age, is 
undersized for efficient passage of today's tows, and is deteriorating 
from a lack of investment in both operation and maintenance and 
necessary capital improvements to rehabilitate these antique 
structures. As with our highways and interchanges, the purpose of 
modernization on the Upper Mississippi and Illinois Rivers is to make 
the entire system more efficient.
    NCGA supports funding pre-construction engineering and design as a 
means to accelerate the precursor to construction of 7 new 1,200 foot 
locks on the Upper Mississippi River and Illinois Waterway in 
anticipation of authorization through the Water Resources Development 
Act. Specifically, NCGA requests $24 million in PED funding for Locks 
20, 21, 22, 24, and 25 on the Upper Mississippi and the LaGrange and 
Peoria locks on the Illinois Waterway (Project: ``UMR-IWW System 
Navigation Study, IL, IA, MN, MO, & WI'' Authority: section 216, Flood 
Control Act of 1970 (Public Law 91-612)).
    The PED program is overseen by the Navigation & Ecosystem 
Sustainability Program (NESP), formed with the conclusion of the 
navigation study. NESP continues the research and monitoring 
recommended under the dual purpose river plan outlined in the Corps of 
Engineers' November 2004 Chief 's Report.
    In previous years, PED funding was used for preparations of a re-
evaluation report and detailed planning and design activities including 
8 projects for navigation efficiency and 19 projects for ecosystem 
restoration. Projects included lock design, fish passage studies, 
detailed planning and design for mooring cells and switch boat 
implementation and detailed planning for ecosystem restoration projects 
including island building, backwater restoration, side channel 
restoration, wing dam alteration, island-shoreline protection and dam 
embankment lowering.
    We strongly encourage the committee to support continued PED 
funding as part of an initial process to modernize our aging and 
deteriorating infrastructure and for much needed ecosystem restoration 
for the Upper Mississippi and Illinois Rivers.
                      biomass technologies program
    The United States needs to displace imported petroleum with 
ethanol. Corn grain ethanol is the only economically viable solution 
over the next decade and is one of the leading ways to start weaning 
the United States from imported oil. Using starch from corn grain to 
produce ethanol provides farmers with higher profit margins even while 
fuel customers pay lower prices. Over the next decade, corn grain can 
meet all of the growth in ethanol demand and still meet growth in the 
livestock feed, human food and export sectors.
    The current Federal biomass technologies program is focused on 
long-term cellulose research. Cellulose research will not have any 
meaningful economic impact for a decade or more. A successful research 
and development (R&D) portfolio always balances near, mid and long-term 
goals, and biomass research should use a similar strategy.
    In the near term, R&D investments in corn grain ethanol production 
technology could have a strongly positive economic impact while 
immediately decreasing dependence on imported oil. Examples of R&D 
investment opportunities include improving production and utilization 
of animal feed (DDGS), co-production of biobased chemicals, utilization 
of corn kernel fiber, and decreasing natural gas use in ethanol plants. 
Sufficient supply of affordable ethanol will ensure the markets and 
infrastructure will be poised for the larger impacts coming in the mid 
to long-term.
    NCGA recommends the committee commit at least 25 percent of the 
fiscal year 2008 allocation for the biomass technologies program 
towards near-term research that enables corn grain.
    Thank you for the support and assistance you have provided to corn 
growers over the years.
                                 ______
                                 
 Prepared Statement of the Confederated Tribes of the Umatilla Indian 
                              Reservation
    We respectfully request fiscal year 2008 appropriation of funds for 
two priority watershed restoration and agricultural water supply 
protection projects in Oregon and Washington, the Umatilla Basin Water 
Supply Project (previously funded under the Umatilla Basin Project 
Phase III, OR) and the Walla Walla General Investigation Stream Flow 
Restoration Feasibility Study (previously funded under the Walla Walla 
River Watershed, OR & WA).
  --For the Umatilla Basin Water Supply Project, Oregon, we request an 
        appropriation of $1 million in the Bureau of Reclamation, 
        Pacific Northwest Region, Water and Related Resources budget. 
        This request will build upon the $450,000 committed by the 
        Bureau of Reclamation to the Project in fiscal year 2007.
  --For the Walla Walla River Watershed, Oregon and Washington, we 
        request an appropriation of $650,000 in the U.S. Army Corps of 
        Engineers, Portland Division, Walla Walla District, General 
        Investigations budget. This project is also known as Walla 
        Walla River Basin Feasibility Report/Environmental Impact 
        Statement.
    Both the Umatilla Basin Water Supply Project and the Walla Walla 
General Investigation Stream Flow Restoration Feasibility Study are 
ongoing projects and have had administration and/or congressional line 
item funding in past fiscal years.
           umatilla river basin, oregon water supply project
    By letter dated March 19, 2007, the Office of the Secretary of 
Interior responded favorably to the formal requests of the Washington 
and Oregon delegations and of the Confederated Umatilla Tribes, 
Westland Irrigation District and Governor Theodore Kulongoski to 
initiate Umatilla Basin water development projects and concurrent 
settlement of the Tribe's reserved water rights. Counselor to the 
Secretary, L. Michael Bogert, wrote ``I will ask the Secretary's Indian 
Water Rights Office to appoint an Assessment Team . . .'' and ``I will 
also ask the Bureau of Reclamation to move forward with a concurrent 
appraisal level study of water supply options, including a full Phase 
III exchange . . . to help resolve the Tribe's water rights claims.''
    The Bureau of Reclamation, subsequent to issuance of the March 19 
letter from Counselor Bogert, has committed $450,000 to fiscal year 
2007 work on the Umatilla Basin water supply appraisal study.
    The Umatilla Basin Water Supply Project is authorized by the 
Reclamation Feasibility Studies Act of 1966, 80 Stat. 707, Public Law 
89-561 (Sept. 7, 1966).
    The fiscal year 2008 request of $1 million to the U.S. Bureau of 
Reclamation will follow up the $450,000 fiscal year 2007 work and 
should complete the majority of the estimated 2-year appraisal level 
study. It is anticipated that the full appraisal study project will be 
completed in 2009 in order to inform the concurrent Interior Department 
Indian Water Rights Assessment Team's work products. In 2009, Interior 
should have a clear project or suite of projects necessary to satisfy 
water rights of the Confederated Umatilla Tribes on the Umatilla Indian 
Reservation and in the Umatilla River.
    This fiscal year 2008 request follows on the work of the Bureau of 
Reclamation, authorized by the Umatilla Basin Project Act of 1988 
(Public Law 100-557; 102 Stat. 2782 Title II), to construct and operate 
the Phase I Exchange with West Extension Irrigation District and the 
Phase II Exchange with Hermiston and Stanfield Irrigation Districts. 
Heralded as one of the most successful stream flow restoration and 
salmon recovery projects in the Columbia River Basin, the Umatilla 
Basin Project resulted in partially restored stream flows in the 
Umatilla River and successful reintroduction of spring Chinook, fall 
Chinook and Coho salmon. After nearly a century of dry river bed in 
summer months and extinction of all salmon stocks, there has been an 
Indian and non-Indian salmon fishery nearly every year in the Umatilla 
River since the project was completed in the mid-1990s.
    Completion of the Water Supply Study and the concurrent Tribal 
Water Rights Assessment is supported and endorsed by the Honorable 
Governor Ted Kulongoski and by local irrigation districts including 
specifically Westland Irrigation District, the Umatilla County 
Commission, and local municipalities including specifically the City of 
Irrigon.
     walla walla basin, oregon and washington, gi feasibility study
    In its sixth and final full year prior to completion, the U.S. Army 
Corps of Engineers' feasibility study will select the project necessary 
to restore stream flows in the Walla Walla River. Drained nearly dry 
during summer months by irrigation in Oregon and Washington, the Walla 
Walla River is within the aboriginal lands of the Confederated Umatilla 
Tribes and the complete loss of salmon violates the agreement by the 
United States in the Treaty of 1855 to protect these fish.
    Approximately $2.6 million of Federal funds have either been 
budgeted or appropriated through fiscal year 2007 (this includes an 
estimate $300,000 for fiscal year 2007 based upon continuing resolution 
uncertainties).
    The Feasibility Study Project is authorized by the Senate Committee 
on Public Works, July 27, 1962 (Columbia River and Tributaries), 87th 
Congress, House Document No. 403 and initiated as a result of a 
positive Reconnaissance Report for the Walla Walla River Watershed 
(1997) under a General Investigation study.
    The Confederated Tribes of the Umatilla Indian Reservation is the 
formal sponsor of the Corps of Engineers Feasibility Study and has 
provided over $3.1 million in in-kind contributions. Additionally, the 
State of Washington Department of Ecology has provided $400,000 to the 
Feasibility Study.
    Support for the completion of the Feasibility Study and moving to 
construction of the project is strong and diverse and includes the 
Honorable Governor of Washington Christine Gregoire, the Honorable 
Governor of Oregon Ted Kulongoski, the Walla Walla Watershed Alliance, 
the Walla Walla Basin Watershed Council, basin irrigation districts, 
local State legislators and many local and regional advocacy groups.
    In closing, the CTUIR appreciates the opportunity to provide this 
testimony in support of adding funds for the ongoing projects, Umatilla 
River Basin Water Supply Project, Bureau of Reclamation, and for the 
Army Corps of Engineers Walla Walla River Basin Watershed Restoration 
Feasibility Study. Both projects are critically important to protecting 
existing agricultural economies, completing future water supply 
development and concurrently restoring stream flows and recovering 
threatened salmon and other Columbia River Basin fish stocks.
    Thank you.
                                 ______
                                 
              Prepared Statement of The Nature Conservancy
    Mr. Chairman and members of the Subcommittee, I appreciate the 
opportunity to present The Nature Conservancy's recommendations for the 
Army Corps of Engineers' fiscal year 2008 appropriations. We understand 
that the Subcommittee's ability to fund programs within its 
jurisdiction is limited by the tight budget constraints but appreciate 
your consideration of these important programs.
    The Nature Conservancy is an international nonprofit organization 
dedicated to the conservation of biodiversity. Our mission is to 
preserve the plants, animals and natural communities that represent the 
diversity of life on Earth by protecting the lands and waters they need 
to survive. Our on-the-ground conservation work is carried out in all 
50 states and in 30 countries with the support of approximately one 
million members. To date, we have helped conserve more than 117 million 
acres and 5,000 river miles around the world. The Conservancy owns and 
manages approximately 1,400 preserves throughout the United States--the 
world's largest private system of nature sanctuaries. However, we 
recognize that our mission cannot be achieved by protected areas alone; 
thus, our projects increasingly seek to accommodate compatible human 
uses, especially in the developing world, to address sustained human 
well-being.
    The Conservancy has several concerns with the new starts/project 
advancement ban in the fiscal year 2006 Energy and Water Appropriations 
bill. As the largest nonfederal sponsor of ecosystem restoration 
projects (by number of projects, not total funding), this policy has 
significantly impacted the Conservancy's ecosystem restoration efforts. 
The ban has halted a number of restoration projects that are widely 
supported by local communities, that are important to biodiversity, and 
that have received significant prior investment of both federal and 
nonfederal resources. The Conservancy urges the Subcommittee not to 
renew the ban on new starts/project advancement.
    The Conservancy urges the Subcommittee to support the following 
appropriation levels in the fiscal year 2008 Energy and Water 
Development Appropriation bill:
Construction General Priorities
    Section 1135: Project Modification for the Improvement of the 
Environment.--The Section 1135 Program authorizes the Army Corps of 
Engineers (Corps) to restore areas damaged by existing Corps projects. 
This program continues to be in extremely high demand with needs far 
greater than the $30 million appropriated in fiscal year 2006. While we 
recognize that the fiscal year 2006 appropriations were in excess of 
the authorized levels, funding shortfalls continue to hold up many 
important projects. The Conservancy is the nonfederal cost share 
partner on five ecologically significant Section 1135 projects 
including Spunky Bottoms (IL), a floodplain restoration/reconnection 
project on the Illinois River that needs $150,000 to continue planning; 
Chain Bridge Flats (DC), a floodplain restoration on the Potomac River 
that needs $210,000 to initiate the reconnaissance phase; Jim Woodruff 
Lock and Dam Fish Passage (FL), a river habitat restoration on the 
Apalachicola River that needs $100,000 to initiate the reconnaissance 
phase; and Village of Oyster Ecosystem Restoration (VA), a restoration 
of intertidal wetlands and upland habitat that needs $99,000 to 
continue the feasibility study. In order to reduce the funding backlog, 
the Conservancy strongly encourages full funding of $25 million for 
Section 1135 in fiscal year 2008, an increase over the President's 
$11.2 million request.
    Section 206: Aquatic Ecosystem Restoration.--Section 206 is a newer 
program that authorizes the Corps to restore aquatic habitat regardless 
of past activities. This is another popular restoration program with 
demand far exceeding both the authorized level and the fiscal year 2006 
appropriation. The Conservancy is the nonfederal cost-share partner on 
four Section 206 projects that restore important habitats, including 
Camp Creek (OR), a headwaters stream restoration project that needs 
$525,000 to continue the feasibility study; Bootheel Creek (FL), a wet 
flatwood and depression marsh habitat restoration project that needs 
$85,000 to initiate the planning and design analysis phase; and Emiquon 
Preserve (IL), a floodplain reconnection and restoration project that 
needs $300,000 to continue planning. To reduce the funding backlog, the 
Conservancy strongly encourages $25 million for Section 206 in fiscal 
year 2008, an increase over the President's $11.3 million request.
    Upper Mississippi River System Environmental Management Program.--
The Environmental Management Program (EMP) is an important Corps 
program that restores habitat and conducts long-term resource 
monitoring of the Upper Mississippi and Illinois Rivers. EMP is a 
unique federal-state partnership involving five states (IL, IA, MN, MO 
and WI). EMP was reauthorized in WRDA 1999 with an increased 
authorization of $33.2 million. The Conservancy supports full funding 
of $33.2 million for fiscal year 2008, an increase over the President's 
$23.5 million request.
    Estuary Habitat Restoration Program.--The Estuary Restoration Act 
was approved by Congress in 2000 to recognize the importance of a 
national strategic plan and multi-level partnerships to address 
problems plaguing our nation's estuaries. With a goal of restoring a 
million acres of estuary habitat by 2010 through the Estuary Habitat 
Restoration Program, the Act encourages coordination among all levels 
of government, and engages the strengths of the public, nonprofit and 
private sectors. The Conservancy supports the President's $5.0 million 
request for the Estuary Habitat Restoration Program to promote 
restoration projects that benefit fish, shellfish and wildlife; improve 
surface and groundwater resources; provide flood control; and enhance 
recreational opportunities.
    Missouri River Fish and Wildlife Recovery.--The Missouri River 
contains more than 500 species of mussels, fish, amphibians, reptiles, 
birds and mammals, five of which are either listed or candidates for 
listing under the Endangered Species Act. The Corps has completed 30 
projects along the river in the lower four states (IA, KS, MO and NE) 
resulting in more than 40,000 acres of restored aquatic and floodplain 
habitat. This program enhances these restorations and complements 
protection and restoration efforts by many federal agencies. The 
Conservancy supports $85.0 million in fiscal year 2008 and pending 
passage of the Water Resources Development Act, supports using funding 
basin-wide, including $15 million for the Yellowstone River Intake 
project in Montana.
    South Florida Everglades Ecosystem Restoration Program.--The 
Everglades are home to a profusion of birds and wildlife with at least 
347 bird species recorded in Everglades National Park alone. For the 
last sixty years, the Corps has built projects that shunted water away 
from the Everglades. These flood control projects and agricultural and 
urban development have degraded the wetlands ecosystem. Restoration of 
this globally significant region is a priority for the Conservancy. The 
Conservancy requests $249.1 million in the South Florida Everglades 
Ecosystem Restoration Program in fiscal year 2008, an increase over the 
President's $162.4 million request. This request includes funds for 
five programs: Modified Water Deliveries to Everglades National Park 
($35 million), Critical Projects Construction ($8.3 million), Kissimmee 
River Restoration Construction ($50 million), Comprehensive Everglades 
Restoration Plan (CERP) Project Construction ($35 million), Central & 
Southern Florida Project ($120.8 million).
    Puget Sound and Adjacent Waters.--Assessments of Puget Sound's 
nearshore habitat indicate that the ecological health of the ecosystem 
is in steep decline. As urban areas continue to expand, an 
extraordinary heritage of native species and ecosystems is at risk. The 
Puget Sound and Adjacent Waters Program provides funding for early 
action projects to restore the Puget Sound and its watershed.. The 
Conservancy requests $5.0 million for Puget Sound and Adjacent Waters 
in fiscal year 2008. Identification of these early action projects is 
informed by the Puget Sound Nearshore Ecosystem Restoration General 
Investigation, for which the Conservancy requests $1.9 million in 
fiscal year 2008, an increase over the President's $400,000 request.
General Investigation Priorities
    Penobscot River Restoration.--This project involves the purchase 
and decommissioning of three dams on the Penobscot River, New England's 
second largest river. Two dams will be removed and a state-of-the-art 
fish bypass will be constructed around the third. Restoration of 
massive runs of migratory fish in the Penobscot River will expand 
recreational fishing opportunities and tourism resources, will provide 
culturally significant fishing resources to the Penobscot Indian 
Nation, and will greatly enhance recovery of Atlantic salmon and other 
ESA-listed species. The Conservancy supports $450,000 in fiscal year 
2008. This study is not included in the President's Budget.
    Hamilton City Flood Damage Reduction and Ecosystem Restoration.--
This project will increase flood protection for Hamilton City. CA and 
surrounding agricultural lands and restore over 1,500 acres of riparian 
habitat. Currently, the town is only marginally protected by a degraded 
private levee. The PED phase for this project is nearly complete. 
Pending fiscal year 2007 funding and passage of WRDA, the project will 
be ready to begin construction next year. The Conservancy supports $1.6 
million in fiscal year 2008 to complete PED and $7.5 million to begin 
construction. This study is not included in the President's Budget.
    Savannah Basin Comprehensive Water Resources Study--Phase II.--The 
Savanna River basin is experiencing tremendous growth, increasing 
demands on this limited water resource. Phase I of the study evaluated 
water management in the reservoirs based on current operations and 
indicated that future needs may not be met under current management 
practices. Phase II evaluates implementation of a new set of rules 
(e.g. hydropower contracts, recreation needs, ecological flows) that 
could meet future demands while protecting essential river habitat. 
Without Phase II, changes in dam operations are limited by outdated and 
unsustainable management rules. The Conservancy supports $250,000 in 
fiscal year 2008. This study is not included in the President's Budget.
    Willamette River Floodplain Study.--This project contributes to 
long-term restoration of floodplain habitat, an important step toward 
the recovery of several ESA-listed threatened fish species. The 
restoration goals include increasing floodplain connectivity and 
replanting riparian forests, which will contribute to the Corps' 
ability to reduce river temperatures and meet their obligations under 
the Clean Water Act. The Conservancy supports $436,000 in fiscal year 
2008. This study is not included in the President's Budget.
    Lower Mississippi River Resource Assessment.--This study will 
assess management, habitat and public access issues in the Lower 
Mississippi River Valley (LMV). Restoring and actively managing the 
natural resources of the LMV will contribute to the recovery of nine 
ESA-listed species without impacting navigation or flood control. 
Restored functionality of wetlands will also help attenuate floods and 
capture river sediment, reducing stress on the flood control system and 
the amount of nutrients transported down river to the Gulf of Mexico. 
The Conservancy supports $500,000 in fiscal year 2008. This study is 
not included in the President's Budget.
    Connecticut River Watershed Study.--This project will restore 410 
miles of river flow and thousands of acres of associated riparian, 
aquatic and floodplain natural communities in the Connecticut River 
Basin. The basin is a priority landscape for the Conservancy due to the 
high-quality tributary systems, unique natural communities and 
multitude of ESA-listed species. The study identifies dam management 
modifications for environmental benefits while maintaining beneficial 
human uses such as water supply, flood control and hydropower 
generation. The Conservancy supports $450,000 in fiscal year 2008. This 
study is not included in the President's Budget.
    Yellowstone River Corridor Comprehensive Study.--This study is 
assessing cumulative effects to the Yellowstone system and will develop 
conservation-based management practices for the river main stem. As the 
longest free-flowing river in the lower United States, the Yellowstone 
is a rare model of the structure and function of large western rivers. 
It supports a wide variety of fish, including the ESA-listed pallid 
sturgeon. The Conservancy supports $1 million in fiscal year 2008, an 
increase over the President's $200,000 request.
    Thames River Basin.--The Thames River Basin is the second largest 
freshwater contributor to Long Island Sound and provides critical 
connective habitat between freshwater and marine systems. This study 
will evaluate options to restore more natural flows and improve 
watershed management to reduce nutrient inputs, as well as options for 
ecological restoration throughout the Basin. The Conservancy supports 
$450,000 in fiscal year 2008. This study is not included in the 
President's Budget.
Operations and Maintenance Priority
    Bill Williams River--Alamo Dam.--Due to the historic loss of 
woodland habitat in the Southwest and limited restoration ability along 
other portions of the Colorado River, the Bill Williams River corridor 
provides critical opportunities for both conserving and restoring 
habitat. This plus-up request will provide additional baseline 
information about the geomorphology and sediment transport 
characteristics of the Bill Williams River and continue critical long-
term hydrologic and biological monitoring in order to construct a 
programmatic plan to support adaptive management of the river system. 
The Conservancy supports $250,000 plus-up over the President's 
Operations and Maintenance request of $1,783,000, for a total of 
$2,033,000 in fiscal year 2008.
    Thank you for the opportunity to present The Nature Conservancy's 
comments on the Energy and Water Appropriations bill. We recognize that 
you receive many worthy requests for funding each year and appreciate 
your consideration of these requests and the generous support you have 
shown for these and other conservation programs in the past. If you 
have any further questions, please do not hesitate to contact me or 
Jason Albritton, Policy Associate (703/841-4105).
                                 ______
                                 
      Prepared Statements of the Santa Clara Valley Water District
           statement of support--coyote creek watershed study
    Background.--Coyote Creek drains Santa Clara County's largest 
watershed, an area of more than 320 square miles encompassing most of 
the eastern foothills, the city of Milpitas, and portions of the cities 
of San Jose and Morgan Hill. It flows northward from Anderson Reservoir 
through more than 40 miles of rural and heavily urbanized areas and 
empties into south San Francisco Bay.
    Prior to construction of Coyote and Anderson Reservoirs, flooding 
occurred in 1903, 1906, 1909, 1911, 1917, 1922, 1923, 1926, 1927, 1930 
and 1931. Since 1950, the operation of the reservoirs has reduced the 
magnitude of flooding, although flooding is still a threat and did 
cause damages in 1982, 1983, 1986, 1995, and 1997. Significant areas of 
older homes in downtown San Jose and some major transportation 
corridors remain susceptible to extensive flooding. The federally-
supported lower Coyote Creek Project (San Francisco Bay to Montague 
Expressway), which was completed in 1996, protected homes and 
businesses from storms which generated record runoff in the northern 
parts of San Jose and Milpitas.
    The proposed Reconnaissance Study would evaluate the reaches 
upstream of the completed Federal flood protection works on lower 
Coyote Creek.
    Objective of Study.--The objectives of the Reconnaissance Study are 
to investigate flood damages within the Coyote Creek Watershed; to 
identify potential alternatives for alleviating those damages which 
also minimize impacts on fishery and wildlife resources, provide 
opportunities for ecosystem restoration, provide for recreational 
opportunities; and to determine whether there is a Federal interest to 
proceed into the Feasibility Study Phase.
    Study Authorization.--In May 2002, the House of Representatives 
Committee on Transportation and Infrastructure passed a resolution 
directing the Corps to ``. . . review the report of the Chief of 
Engineers on Coyote and Berryessa Creeks . . . and other pertinent 
reports, to determine whether modifications of the recommendations 
contained therein are advisable in the interest of flood damage 
reduction, environmental restoration and protection, water conservation 
and supply, recreation, and other allied purposes . . .''
    Fiscal Year 2006 Administration Budget Request and Funding.--The 
Coyote Watershed Study was one of only three ``new start'' studies 
proposed for funding nationwide in the administration's fiscal year 
2006 budget request. Congress did not include funding for the study in 
the final fiscal year 2006 appropriations bill.
    Fiscal Year 2007 Funding.--An appropriation add-on of $100,000 was 
requested in fiscal year 2007, and $100,000 was included in the Senate 
Appropriation bill. No funds were appropriated in the fiscal year 2007 
Corps Work Plan.
    Fiscal Year 2008 Funding Recommendation.--It is requested that the 
Congressional Committee support an appropriation add-on of $100,000 to 
initiate a multi-purpose Reconnaissance Study within the Coyote Creek 
Watershed.
 statement of support--coyote/berryessa creek project, berryessa creek 
                            project element
    Background.--The Berryessa Creek Watershed is located in northeast 
Santa Clara County, California, near the southern end of the San 
Francisco Bay. A major tributary of Coyote Creek, Berryessa Creek 
drains 22 square miles in the city of Milpitas and a portion of San 
Jose.
    On average, Berryessa Creek floods once every four years. The most 
recent flood in 1998 resulted in significant damage to homes and 
automobiles. The proposed project on Berryessa Creek, from Calaveras 
Boulevard to upstream of Old Piedmont Road, will protect portions of 
the cities of San Jose and Milpitas. The flood plain is largely 
urbanized with a mix of residential and commercial development. Based 
on the U.S. Army Corps of Engineers (Corps) 2005 report, a 1 percent or 
100-year flood could potentially result in damages exceeding $179 
million. Benefit-to-cost ratios for the 6 project alternatives being 
evaluated range from 2:1 to 7.3:1.
    Study Synopsis.--In January 1981, the Santa Clara Valley Water 
District (District) applied for Federal assistance for flood protection 
projects under section 205 of the 1948 Flood Control Act. The Water 
Resources Development Act of 1990 authorized construction on the 
Berryessa Creek Flood Protection Project as part of a combined Coyote/
Berryessa Creek Project to protect portions of the cities of Milpitas 
and San Jose.
    The Coyote Creek element of the project was completed in 1996. The 
Berryessa Creek Project element proposed in the Corps' 1987 feasibility 
report consisted primarily of a trapezoidal concrete lining. This was 
not acceptable to the local community. The Corps and the District are 
currently preparing a General Reevaluation Report which involves 
reformulating a project which is more acceptable to the local community 
and more environmentally sensitive. Project features will include 
setback levees and floodwalls to preserve sensitive areas (minimizing 
the use of concrete), appropriate aquatic and riparian habitat 
restoration and fish passage, and sediment control structures to limit 
turbidity and protect water quality. The project will also accommodate 
the city of Milpitas' adopted trail master plan. Estimated total costs 
of the General Reevaluation Report work are $5 million, and should be 
completed in the spring of 2007.
    Fiscal Year 2007 Funding.--$100,000 in the fiscal year 2007 Corps 
Work Plan for the Coyote/Berryessa Creek Flood Protection Project to 
continue the General Reevaluation Report and environmental documents 
update.
    Fiscal Year 2008 Funding Recommendation.-- Based on the continuing 
threat of significant flood damage from Berryessa Creek and the need to 
continue with the General Reevaluation Report, it is requested that the 
Congressional Committee support an appropriation add-on of $1.35 
million, in addition to the $950,000 in the Administration's fiscal 
year 2008 budget request, for a total of $2.3 million for the Berryessa 
Creek Flood Protection Project element of the Coyote/Berryessa Creek 
Project.
             statement of support--guadalupe river project
    Background.--The Guadalupe River is a major waterway flowing 
through a highly developed area of San Jose, in Santa Clara County, 
California. A major flood would damage homes and businesses in the 
heart of Silicon Valley. Historically, the river has flooded downtown 
San Jose and the community of Alviso. According to the U.S. Army Corps 
of Engineers (Corps) 2000 Final General Reevaluation & Environmental 
Report for Proposed Project Modifications, estimated damages from a 1 
percent flood in the urban center of San Jose are over $576 million. 
The Guadalupe River overflowed in February 1986, January 1995, and 
March 1995, damaging homes and businesses in the St. John and Pleasant 
Street areas of downtown San Jose. In March 1995, heavy rains resulted 
in breakouts along the river that flooded approximately 300 homes and 
business.
    Project Synopsis.--In 1971, the local community requested that the 
Corps reactivate its earlier study. Since 1972, substantial technical 
and financial assistance have been provided by the local community 
through the Santa Clara Valley Water District in an effort to 
accelerate the project's completion. To date, more than $85.8 million 
in local funds have been spent on planning, design, land purchases, and 
construction in the Corps' project reach.
    The Guadalupe River Project received authorization for construction 
under the Water Resources Development Act of 1986; the General Design 
Memorandum was completed in 1992, the local cooperative agreement was 
executed in March 1992, the General Design Memorandum was revised in 
1993, construction of the first phase of the project was completed in 
August 1994, construction of the second phase was completed in August 
1996. Project construction was temporarily halted due to environmental 
concerns.
    To achieve a successful, long-term resolution to the issues of 
flood protection, environmental mitigation, avoidance of environmental 
effects, and project monitoring and maintenance costs, a multi-agency 
``Guadalupe Flood Control Project Collaborative'' was created in 1997. 
A key outcome of the collaborative process was the signing of the 
Dispute Resolution Memorandum in 1998, which modified the project to 
resolve major mitigation issues and allowed the project to proceed. 
Energy and Water Development Appropriations Act of 2002 was signed into 
law on November 12, 2001. This authorized the modified Guadalupe River 
Project at a total cost of $226.8 million. Subsequent to the 
authorization, the project cost has been raised to $251 million. 
Construction of the last phase of flood protection was completed in 
December 2004 and a completion celebration held in January 2005. The 
remaining construction consists of railroad bridge replacements and 
mitigation plantings. The overall construction of the project including 
the river park and the recreation elements is scheduled for completion 
in 2006.
    Fiscal Year 2007 Funding.--$5.6 million in the fiscal year 2007 
Corps Work Plan to continue Guadalupe River Project construction.
    Fiscal Year 2008 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $8 million 
to continue construction of the final phase of the Guadalupe River 
Flood Protection Project.
               statement of support--llagas creek project
    Background.--The Llagas Creek Watershed is located in southern 
Santa Clara County, California, serving the communities of Gilroy, 
Morgan Hill and San Martin. Historically, Llagas Creek has flooded in 
1937, 1955, 1958, 1962, 1963, 1969, 1982, 1986, 1996, 1997, 1998, and 
2002. The 1997, 1998, and 2002 floods damaged many homes, businesses, 
and a recreational vehicle park located in areas of Morgan Hill and San 
Martin. These are areas where flood protection is proposed. Overall, 
the proposed project will protect the floodplain from a 1 percent flood 
affecting more than 1,100 residential buildings, 500 commercial 
buildings, and 1,300 acres of agricultural land.
    Project Synopsis.--Under authority of the Watershed Protection and 
Flood Prevention Act (Public Law 566), the Natural Resources 
Conservation Service completed an economic feasibility study in 1982 
for constructing flood damage reduction facilities on Llagas Creek. The 
Natural Resources Conservation Service completed construction of the 
last segment of the channel for Lower Llagas Creek in 1994, providing 
protection to the project area in Gilroy. The U.S. Army Corps of 
Engineers (Corps) is currently updating the 1982 environmental 
assessment work and the engineering design for the project areas in 
Morgan Hill and San Martin. The engineering design is being updated to 
protect and improve creek water quality and to preserve and enhance the 
creek's habitat, fish, and wildlife while satisfying current 
environmental and regulatory requirements. Significant issues include 
the presence of additional endangered species including the red-legged 
frog and steelhead, listing of the area as probable critical habitat 
for steelhead, and more extensive riparian habitat than were considered 
in 1982. Project economics are currently being updated as directed by 
Corps Headquarters to determine continued project economic viability.
    Until 1996, the Llagas Creek Project was funded through the 
traditional Public Law 566 Federal project funding agreement with the 
Natural Resources Conservation Service paying for channel improvements 
and the District paying local costs including utility relocation, 
bridge construction, and right of way acquisition. Due to the steady 
decrease in annual appropriations for the Public Law 566 construction 
program since 1990, the Llagas Creek Project had not received adequate 
funding to complete the Public Law 566 project. To remedy this 
situation, the District worked with congressional representatives to 
transfer the construction authority from the Department of Agriculture 
to the Corps under the Water Resources Development Act of 1999 (section 
501). Since the transfer of responsibility to the Corps, the District 
has been working with the Corps to complete the project. Efforts are 
underway to reauthorize the project at its current project cost in the 
recently introduced Water Resources Development Act of 2007.
    Fiscal Year 2007 Funding.--$250,000 in the fiscal year 2007 Corps 
Work Plan.
    Fiscal Year 2008 Funding Recommendation.--Based upon the high risk 
of flood damage from Llagas Creek, it is requested that the 
Congressional Committee support an appropriation add-on of $368,000 in 
fiscal year 2008 for planning, design, and environmental updates for 
the Llagas Creek Project.
statement of support--san francisquito creek flood damage reduction and 
                     ecosystem restoration project
    Background.--The San Francisquito Creek watershed comprises 45 
square miles and 70 miles of creek system. The creek mainstem flows 
through five cities and two counties, from Searsville Lake, belonging 
to Stanford University, to the San Francisco Bay at the boundary of 
East Palo Alto and Palo Alto. Here it forms the boundary between Santa 
Clara and San Mateo Counties, California and separates the cities of 
Palo Alto from East Palo Alto and Menlo Park. The upper watershed 
tributaries are within the boundaries of Portola Valley and Woodside 
townships. The creek flows through residential and commercial 
properties, a biological preserve, and Stanford University campus. It 
interfaces with regional and State transportation systems by flowing 
under two freeways and the regional commuter rail system. San 
Francisquito Creek is one of the last natural continuous riparian 
corridors on the San Francisco Peninsula and home to one of the last 
remaining viable steelhead trout runs. The riparian habitat and urban 
setting offer unique opportunities for a multi-objective flood 
protection and ecosystem restoration project.
    Flooding History.--The creeks mainstem has a flooding frequency of 
approximately once in 11 years. It is estimated that over $155 million 
in damages could occur in Santa Clara and San Mateo counties from a 1 
percent flood, affecting 4,850 homes and businesses. Significant areas 
of Palo Alto flooded in December 1955, inundating about 1,200 acres of 
commercial and residential property and about 70 acres of agricultural 
land. April 1958 storms caused a levee failure downstream of Highway 
101, flooding Palo Alto Airport, the city landfill, and the golf course 
up to 4-feet deep. Overflow in 1982 caused extensive damage to private 
and public property. The flood of record occurred on February 3, 1998, 
when overflow from numerous locations caused severe, record 
consequences with more than $28 million in damages. More than 1,100 
homes were flooded in Palo Alto, 500 people were evacuated in East Palo 
Alto, and the major commute and transportation artery, Highway 101, was 
closed.
    Status.--Active citizenry are anxious to avoid a repeat of the 
February 1998 flood. Numerous watershed based studies have been 
conducted by the Corps, the Santa Clara Valley Water District, Stanford 
University, and the San Mateo County Flood Control District. 
Grassroots, consensus based organization, called the San Francisquito 
Watershed Council, has united stakeholders including local and State 
agencies, citizens, flood victims, developers, and environmental 
activists for over 10 years. The San Francisquito Creek Joint Powers 
Authority was formed in 1999 to coordinate creek activities with five 
member agencies and two associate members. The Authority Board has 
agreed to be the local sponsor for a Corps project and received 
Congressional authorization for a Corps reconnaissance study in May 
2002. The Reconnaissance Study was completed in March 2005 and the 
Feasibility Study was initiated in November 2005.
    Fiscal Year 2007 Funding.--$300,000 in the fiscal year 2007 Corps 
Work Plan.
    Fiscal Year 2008 Funding Recommendation.--It is requested the 
congressional committee support an appropriation add-on of $700,000 to 
continue the Feasibility Study.
     statement of support--south san francisco bay shoreline study
    Background.--Congressional passage of the Water Resources 
Development Act of 1976, originally authorized the San Francisco Bay 
Shoreline Study, and Santa Clara Valley Water District (District) was 
one of the project sponsors. In 1990, the U.S. Army Corps of Engineers 
(Corps) concluded that levee failure potential was low because the 
existing non-Federal, non-engineered levees, which were routinely 
maintained by Leslie Salt Company (subsequently Cargill Salt) to 
protect their industrial interests, had historically withstood 
overtopping without failure. As a result, the project was suspended 
until adequate economic benefits could be demonstrated.
    Since the project's suspension in 1990, many changes have occurred 
in the South Bay. The State and Federal acquisition of approximately 
15,000 acres of South Bay salt ponds was completed in early March 2003. 
The proposed restoration of these ponds to tidal marsh will 
significantly alter the hydrologic regime and levee maintenance 
activities, which were assumed to be constant in the Corps' 1990 study. 
In addition to the proposed restoration project, considerable 
development has occurred in the project area. Many major corporations 
are now located within Silicon Valley's Golden Triangle, lying within 
and adjacent to the tidal flood zone. Damages from a 1 percent high 
tide are anticipated to far exceed the $34.5 million estimated in 1981, 
disrupting business operations, infrastructure, and residences. Also, 
historical land subsidence of up to 6 feet near Alviso, as well as the 
structural uncertainty of existing salt pond levees, increases the 
potential for tidal flooding in Santa Clara County.
    In July 2002, Congress authorized a review of the Final 1992 Letter 
Report for the San Francisco Bay Shoreline Study. The final fiscal year 
2004 appropriation for the Corps included funding for a new start 
Reconnaissance Study.
    Project Synopsis.--At present, large areas of Santa Clara, Alameda 
and San Mateo Counties would be impacted by flooding during a 1 percent 
high tide. The proposed restoration of the South San Francisco Bay salt 
ponds will result in the largest restored wetland on the West Coast of 
the United States, and also significantly alter the hydrologic regime 
adjacent to South Bay urban areas. The success of the proposed 
restoration is therefore dependent upon adequate tidal flood 
protection, and so this project provides an opportunity for multi-
objective watershed planning in partnership with the California Coastal 
Conservancy, the lead agency on the restoration project. Project 
objectives include: restoration and enhancement of a diverse array of 
habitats, especially several special status species; tidal flood 
protection; and provision of wildlife-oriented public access. A Corps 
Reconnaissance Study was completed in September 2004 and the 
Feasibility Study was initiated in September 2005.
    Fiscal Year 2007 Funding.--$1.3 million in the fiscal year 2007 
Corps Work Plan to continue the Feasibility Study.
    Fiscal Year 2008 Funding Request.--It is requested that the 
Congressional Committee support an appropriation add-on of $2.5 million 
to continue the Feasibility Study to evaluate integrated flood 
protection and environmental restoration.
          statement of support--upper guadalupe river project
    Background.--The Guadalupe River is one of two major waterways 
flowing through a highly urbanized area of Santa Clara County, 
California, the heart of Silicon Valley. Historically, the river has 
flooded the central district and southern areas of San Jose. According 
to U.S. Army Corps of Engineers (Corps) 1998 feasibility study, severe 
flooding would result from a 100-year flooding event and potentially 
cause $280 million in damages.
    The probability of a large flood occurring before implementation of 
flood prevention measures is high. The upper Guadalupe River overflowed 
in March 1982, January 1983, February 1986, January 1995, March 1995, 
and February 1998, causing damage to several residences and businesses 
in the Alma Avenue and Willow Street areas. The 1995 floods in January 
and March, as well as in February 1998, closed Highway 87 and the 
parallel light-rail line, a major commute artery.
    Project Synopsis.--In 1971, the Santa Clara Valley Water District 
(District) requested the Corps reactivate an earlier study of Guadalupe 
River. From 1971 to 1980, the Corps established the economic 
feasibility and Federal interest in the Guadalupe River only between 
Interstate 880 and Interstate 280. Following the 1982 and 1983 floods, 
the District requested that the Corps reopen its study of the upper 
Guadalupe River upstream of Interstate 280. The Corps completed a 
reconnaissance study in November 1989, which established an 
economically justifiable solution for flood protection in this reach. 
The report recommended proceeding to the feasibility study phase, which 
began in 1990. In January 1997, the Corps determined that the National 
Economic Development (NED) Plan would be a 2 percent or 50 year level 
of flood protection rather than the 1 percent or 100 year level. The 
Corps feasibility study determined the cost of the locally preferred 
100-year plan is $153 million and the Corps NED 50-year plan is $98 
million. The District requested that the costs of providing 50-year and 
100-year flood protection be analyzed during the preconstruction 
engineering design phase. The Corps is now proceeding with the 
preconstruction engineering design phase and has refined the NED Plan 
to address the District's comments and Endangered Species Act issues 
and has reevaluated the locally preferred plan for full Federal cost 
sharing. The findings were submitted to Corps Headquarters for approval 
in March 2004 in a Limited Reevaluation Report on the Proposed Project 
Modifications. This report contains an evaluation of the revised NED 
Plan project and the Locally Preferred Plan project, which costs $165 
million with a benefit-to-cost ratio of 1:1.42 and $212 million with a 
benefit-to-cost ratio of 1:1.24, respectively. The Report was approved 
by the Corps in October 2005. The report recommended full cost-sharing 
on the Locally Preferred Plan project. Current efforts are underway to 
reauthorize the project at its current project cost in the recently 
introduced Water Resources Development Act of 2007.
    Fiscal Year 2007 Funding.--No funds were appropriated in the fiscal 
year 2007 Corps Work Plan for the Upper Guadalupe River Project.
    Fiscal Year 2008 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $10.5 
million in fiscal year 2008 to complete final design and continue 
construction on the Upper Guadalupe River Flood Protection Project.
  statement of support--upper penitencia creek flood protection project
    Background.--The Upper Penitencia Creek Watershed is located in 
northeast Santa Clara County, California, near the southern end of the 
San Francisco Bay. In the last two decades, the creek has flooded in 
1980, 1982, 1983, 1986, 1995, and 1998. The January 1995 flood damaged 
a commercial nursery, a condominium complex, and a business park. The 
February 1998 flood also damaged many homes, businesses, and surface 
streets.
    The proposed project on Upper Penitencia Creek, from the Coyote 
Creek confluence to Dorel Drive, will protect portions of the cities of 
San Jose and Milpitas. The floodplain is completely urbanized; 
undeveloped land is limited to a few scattered agricultural parcels and 
a corridor along Upper Penitencia Creek. Based on an August 2004 U.S. 
Army Corps of Engineers' (Corps) Economics Analysis, over 5,000 homes 
and businesses in the cities of San Jose and Milpitas are located in 
the 1 percent or 100 year flood area. Flood damages were estimated at 
$455 million. Benefit to cost ratios for the 9 project alternatives 
range from 2:1 to 3.1:1.
    Study Synopsis.--Under authority of the Watershed Protection and 
Flood Prevention Act (Public Law 83-566), the Natural Resources 
Conservation Service (formerly the Soil Conservation Service) completed 
an economic feasibility study (watershed plan) for constructing flood 
damage reduction facilities on Upper Penitencia Creek. Following the 
1990 U.S. Department of Agriculture Farm bill, the Natural Resources 
Conservation Service watershed plan stalled due to the very high ratio 
of potential urban development flood damage compared to agricultural 
damage in the project area.
    In January 1993, the Santa Clara Valley Water District (District) 
requested the Corps proceed with a reconnaissance study in the 1994 
fiscal year while the Natural Resources Conservation Service plan was 
on hold. Funds were appropriated by Congress for fiscal year 1995 and 
the Corps started the reconnaissance study in October 1994. The 
reconnaissance report was completed in July 1995, with the 
recommendation to proceed with the feasibility study phase. The 
feasibility study, initiated in February 1998, is currently scheduled 
for completion in 2007.
    Advance Construction.--To accelerate project implementation, the 
District submitted a section 104 application to the Corps for approval 
to construct a portion of the project. The application was approved in 
December 2000. The advance construction is for a 2,600-foot long 
section of bypass channel between Coyote Creek and King Road. However, 
due to funding constraints at the District and concerns raised by 
regulatory agencies, the design was stopped and turned over to the 
Corps to complete.
    Fiscal Year 2007 Funding.--$319,000 in the fiscal year 2007 Corps 
Work Plan for continued project investigation.
    Fiscal Year 2008 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $109,000, in 
addition to the $191,000 in the administration's fiscal year 2008 
budget request, for a total of $300,000 for the Upper Penitencia Creek 
Flood Protection Project to continue the Feasibility Study.
                                 ______
                                 
       Prepared Statement of the Calaveras County Water District
    Calaveras County (County) is located in the central Sierra Nevada 
foothills about 25 miles east of the Sacramento-San Joaquin Delta 
(Delta). Ground elevations within the County increase from 200 feet 
above mean sea level near the northwest part of the County to 8,170 
feet near Alpine County. It is a predominately rural county with a 
relatively sparse but rapidly developing population and limited 
agricultural and industrial development. Calaveras County is located 
within the watersheds of the Mokelumne, Calaveras, and Stanislaus 
Rivers.
    All three of these rivers flow west, running through San Joaquin 
County into the Delta. Most of the County is underlain by the igneous 
and metamorphic rocks of the Sierra Nevada. Alluvial deposits of the 
Central Valley, which overlie the westward plunging Sierra Nevada, are 
present along an 80 square-mile area located along the western edge of 
the County and are part of the Eastern San Joaquin Groundwater Basin 
(ESJCGB).
    In the fall of 1946, the Calaveras County Water District (CCWD) was 
organized under the laws of the State of California as a public agency 
for the purpose of developing and administering the water resources in 
Calaveras County. Therefore, CCWD is a California Special District and 
is governed by the California Constitution and the California 
Government and Water Codes. CCWD is not a part of, or under the control 
of, the County of Calaveras. CCWD was formed to preserve and develop 
water resources and to provide water and wastewater service to the 
citizens of Calaveras County
    Under State law, CCWD, through its board of directors, has general 
powers over the use of water within its boundaries. These powers 
include, but are not limited to: the right of eminent domain, authority 
to acquire, control, distribute, store, spread, sink, treat, purify, 
reclaim, process and salvage any water for beneficial use, to provide 
sewer service, to sell treated or untreated water, to acquire or 
construct hydroelectric facilities and sell the power and energy 
produced to public agencies or public utilities engaged in the 
distribution of power, to contract with the United States, other 
political subdivisions, public utilities, or other persons, and subject 
to the California State Constitution, levy taxes and improvements.
                  cosgrove creek flood control project
    The Cosgrove Creek Flood Control Project will address flooding that 
occurs along the lower reaches of the creek, as well as flooding that 
occurs on Spring Creek. Flooding in these areas impacts over 400 people 
and 100 structures located in the 100-year floodplain. Within the 
context of the flood control effort, the project will also address 
options for the beneficial use of peak flows and address other local 
concerns such as the need for recreational opportunities in the area.
    The Calaveras County Water District respectfully requests $100,000 
for this project in fiscal year 2008 from the Corps of Engineers 
Construction General account.
  new hogan reservoir/calaveras county regional water and wastewater 
                             facility study
    This project will address regional water and wastewater facility 
needs for the region. New uses for recycled water, including wetlands 
creation, groundwater recharge and conjunctive use, are key elements of 
the project and will meet critical water use efficiency and 
environmental needs of the area. This project will also fund the New 
Hogan Lake Reoperation study to examine if operation of the project 
should be changed to more closely meet the contemporary needs of the 
area, including problems associated with downstream flooding and 
conjunctive use of water.
    The Calaveras County Water District respectfully requests 
$1,000,000 from the Corps of Engineers under section 205 in fiscal year 
2008, switching to section 219 depending on WRDA.
                                 ______
                                 
     Prepared Statement of the California State Coastal Conservancy
                                summary
    The following testimony is in support of the California State 
Coastal Conservancy's fiscal year 2008 Energy and Water Appropriations 
requests. The Conservancy respectfully requests needed funding for the 
following critical projects: $7.65 million for the Hamilton Bel-Marin 
Keys Wetland Restoration Project, Army Corps of Engineers, Construction 
General; $2.5 million for the South San Francisco Bay Shoreline Study, 
Army Corps of Engineers, General Investigations; $750,000 for the Napa 
River Salt Marsh Restoration Project, Army Corps of Engineers, General 
Investigations; $13.59 million for the Upper Newport Bay Ecosystem 
Restoration Project, Army Corps of Engineers, Construction General; 
$3,000,000 for the Matilija Dam Ecosystem Restoration Project, Army 
Corps of Engineers, General Investigations and $300,000 for the San 
Pablo Bay Watershed Restoration Program.
                         conservancy background
    The California Coastal Conservancy, established in 1976, is a State 
agency that uses entrepreneurial techniques to purchase, protect, 
restore, and enhance coastal resources, and to provide access to the 
shore. We work in partnership with local governments, other public 
agencies, nonprofit organizations, and private landowners.
    To date, the Conservancy has undertaken more than 950 projects 
along the 1,100 mile California coastline and around San Francisco Bay. 
Through such projects, the Conservancy: protects and improves coastal 
wetlands, streams, and watersheds; works with local communities to 
revitalize urban waterfronts; assists local communities in solving 
complex land-use problems and protects agricultural lands and supports 
coastal agriculture to list a few of our activities.
    Since its establishment in 1976, the Coastal Conservancy has: 
helped build more than 300 access ways and trails, thus opening more 
than 80 miles of coastal and bay lands for public use; assisted in the 
completion of over 100 urban waterfront projects; joined in partnership 
endeavors with more than 100 local land trusts and other nonprofit 
groups, making local community involvement an integral part of the 
Coastal Conservancy's work and completed projects in every coastal 
county and all 9 San Francisco Bay Area counties. In addition, we 
currently have over 300 active projects that are benefiting the 
citizens of California.
Hamilton Bel-Marin Keys Wetland Restoration Project
    In fiscal year 2008 the California Coastal Conservancy is seeking 
$7.65 million, consistent with Corps of Engineers' capability, for the 
continued construction of this project.
    This project is of critical importance as it will provide nearly 
700 acres of restored tidal and seasonal wetlands at a former Army 
base, in Marin County, California and provide much needed habitat for 
several threatened and endangered species; as well as, shorebirds and 
waterfowl migrating along the Pacific Flyway. In addition, this project 
beneficially uses dredged material from the San Francisco Bay which 
provides for increased navigation and maritime commerce for the Bay 
Area, a much needed economic stimulus for the region.
    The first phase of construction, which started last year, is taking 
place on the former Army Airfield. Miles of levees are currently under 
construction, after which the main runway and taxiways will be buried 
under millions of cubic yards of clean dredged sediment. Subsequently, 
the easterly levee will be breached allowing tidal waters to once again 
flood the site. Later in the project, the Corps will work on the 
adjacent Antenna field and Bel Marin Keys V property (subject to WRDA 
approval) resulting in a total project area of nearly 2,500 acres. This 
phased approach will be used to complete the design and construction 
tasks in conjunction with the availability of land and dredged 
material.
South San Francisco Bay Shoreline Study
    The Conservancy is seeking $2.5 million in funding in order to 
continue the Feasibility Study for this project. The study was 
initiated in fiscal year 2005 and has been ongoing, receiving $600,000 
in funds in fiscal year 2006.
    This project is of national significance as it will create the 
largest restored wetland on the West Coast of the United States and 
will provide extensive habitat for federally endangered species and 
migratory waterfowl. In addition, the project is also critical to the 
region as it will provide tidal and fluvial flood protection for the 
South San Francisco Bay Area protecting approximately 42,800 acres, 
7,400 homes and businesses, and significant urban infrastructure, to 
include major highways, hospitals and airport facilities.
    In order to continue to advance this important study it is 
imperative that local interests and the Federal Government work 
together to ensure a reliable funding stream for the project. In 
accordance, substantial cost-sharing has already begun among the land 
management agencies. The U.S. Fish and Wildlife Service contributed $8 
million toward the $100 million acquisition of the salt ponds. The 
State of California provided $72 million and the Hewlett Foundation, 
Packard Foundation, Moore Foundation, and Goldman Fund provided $20 
million. The foundations are providing an additional $15 million for 
restoration planning and $9 million for land management. The State of 
California is providing $8 million for planning and $6 million for land 
management.
Napa River Salt Marsh
    For fiscal year 2008, we are seeking $750,000 in Federal funds in 
order to complete preconstruction engineering and design (PED) for this 
project which will allow construction to commence as soon as the 
project is authorized by Congress. Last year, $125,000 was appropriated 
to the Corps of Engineers for PED activities.
    The funds requested would allow the Corps of Engineers to complete 
design of the Napa River Salt Marsh Project. Upon authorization of the 
project in WRDA, the Corps will be able to construct the project. 
Construction of the project will provide extensive benefits to the 
region, to include: providing extensive wetland habitat in San 
Francisco Bay; the beneficial use for recycled water in the North Bay; 
improve open space and recreational opportunities; and resolve urgent 
issues associated with deterioration of the site's levee, water control 
structures, and water quality.
    The 10,000 acre Napa River Salt Marsh was purchased by the State of 
California from Cargill in 1994 and is managed by the California 
Department of Fish and Game. The State Coastal Conservancy has been the 
non-Federal sponsor working with the Corps on the Feasibility Study. 
The Corps' Feasibility Study was completed and the Chief's Report was 
signed in December of 2004. Preconstruction engineering and design is 
currently taking place with construction commencing once the project is 
authorized in WRDA.
Upper Newport Bay Ecosystem Restoration
    In fiscal year 2008, we are seeking $13.59 million in funding to 
complete construction and avoid cost increases and project delays.
    Upper Newport Bay, one of the largest remaining tidal wetlands in 
Southern California, provides significant habitat for numerous 
federally endangered species, migratory waterfowl and shorebirds along 
the Pacific Flyway, and anadromous fish and other aquatic species. To 
ensure the long-term viability of this diverse salt marsh ecosystem as 
well as the stability of the region's ecosystem, the Army Corps of 
Engineers and the County of Orange developed the Upper Newport Bay 
Ecological Restoration Project, which was authorized in the Water 
Resources Development Act of 2000.
    The project will address the habitat conversion resulting from 
sedimentation in the upper bay, increase the quantity and quality of 
wetlands habitat, improve water quality by reducing sediment inflows 
and algal blooms and preserve both Federal and local navigational 
channels, which if unaddressed will require costly maintenance 
dredging.
    A construction contract was awarded in September 2005 and 
construction is underway. The available funds (Federal and non-Federal) 
will be expended by late summer 2006. The funding request of $18 
million for fiscal year 2007 will complete construction of this project 
and avoid cost increases from re-mobilizing equipment and inflation.
Matilija Dam Ecosystem Restoration Project
    In fiscal year 2008 we are seeking $3 million for the Army Corps of 
Engineers General Investigation account to complete the U.S. Army Corps 
of Engineers' engineering and Design work of the project.
    The Matilija Dam Ecosystem Restoration Project is a project of 
vital importance as the project seeks to remove the 200-foot tall 
Matilija Dam on a tributary to the Ventura River. This critical project 
is designed to reestablish runs of the endangered southern steelhead 
trout and to allow sand to flow to coastal beaches. This project is one 
of the largest dam removal projects in the Country and enjoys broad 
support from many local, State and Federal agencies.
    In order to remove the dam, 6 million cubic yards of sediments 
trapped behind the dam will be moved or recontoured. A high flow 
sediment bypass system will be constructed at a water diversion 
downstream. A silt removal system will be installed along the diversion 
canal. In addition, levees will be built in several places along the 
river channel to protect property from flooding due to the expected 
increases in stream channel elevation in the first years after removal 
of the dam. The project also involves removal of invasive plants and 
the installation of replacement water wells
San Pablo Bay Watershed Restoration Program
    We are seeking $300,000 in fiscal year 2008 appropriations for the 
U.S. Army Corps of Engineers General Investigations account.
    This critical program provides technical, planning and design 
assistance to local partners in one of the Nation's most treasured 
estuaries. Partnership collaboration and outreach guarantees that the 
program provides the services needed by local entities to improve 
habitat and flood protection throughout the watershed. By working with 
local entities, long-term water resources protection and restoration 
has increased.
    The support of the program would facilitate technical and planning 
assistance that will expand wetland habitat for numerous endangered 
species, migratory waterfowl and shorebirds, andramodous fish and other 
aquatic species. The project will also improve open space and 
recreation opportunities as well as resolve the following; issues 
surrounding levees on the Sears Point project, channel restoration on 
Gallinas Creek, water quality issues on the Black Point Antenna Field 
site as well as conduct environmental restoration and flood protection 
surveys on Wildcat Creek.
    We thank you for your consideration of these requests and look 
forward to working with you on these and other matters throughout the 
year.
                                 ______
                                 
          Prepared Statement of the American Chemical Society
    The American Chemical Society (ACS) would like to thank Chairman 
Byron Dorgan and Ranking Member Peter Domenici for the opportunity to 
submit testimony for the record on the Energy and Water Development 
Appropriations bill for fiscal year 2008. For fiscal year 2008, ACS 
requests the Department of Energy Office of Science be fully funded at 
the administration request of $4.398 billion.
    ACS is a non-profit scientific and educational organization, 
chartered by Congress, representing more than 160,000 individual 
chemical scientists and engineers. The world's largest scientific 
society, ACS advances the chemical enterprise, increases public 
understanding of chemistry, and brings its expertise to bear on State 
and national matters.
    As Congress and the administration seek to bolster the economy, 
economists agree that investments in basic research boost long-term 
economic growth more than other areas of Federal spending. Numerous 
recent reports cite the growing challenges American faces from global 
competitors, including the National Academies of Science report Rising 
Above the Gathering Storm.
    Basic physical science investments foster the new technologies and 
train the scientific workforce which drive the Nation's public health, 
defense, energy security, and environmental progress. Although industry 
funds the bulk of national R&D, the Federal Government provides 60 
percent of basic research funding and, remarkably, 40 percent of 
patents cite Federal research as their source. Yet Federal research in 
the physical sciences and engineering has been cut in half since 1970 
as a percentage of GDP. Fortunately, the President, top congressional 
leaders, and members of science and industry have all recognized the 
need to boost investment in physical sciences and engineering research. 
This investment has never been more important given its central role in 
advancing the Nation's economic, energy, and homeland security.
ACS Budget Recommendations
    Current Federal efforts to advance energy efficiency, production, 
and new energy sources while reducing air pollution and other 
environmental impacts will demand increased investment in long-term 
energy research. By supporting people, research, and world-class 
science and engineering facilities, the Department of Energy's Office 
of Science expands the frontiers of science in areas critical to DOE's 
energy, environment, and national security missions.
    The President's budget request represents leadership to ensure 
American competitiveness and innovation by providing the largest 
investment in DOE Office of Science in over 2 decades. Many in Congress 
have joined with the President in calling for expanded investment in 
basic physical science research. The President's request for $4.398 
billion is essential to ensuring the strength of our innovation 
economy.
    Increases in the Office of Science will help reverse the declining 
Federal support for physical science and encourage more students to 
pursue degrees in these fields. The Office of Science is the largest 
Federal supporter of research in the physical sciences, funding almost 
40 percent of research in these fields. The Office of Science fosters 
the new discoveries and technical talent that will continue to be 
essential to advances in coal, hydrogen, biomass, genomics, and many 
other technology areas. Additional funds should be directed to increase 
the number of grants, especially in core energy programs, and to 
improve research facilities. The Office is the primary source of 
Federal support in many research areas essential to our energy security 
and economy, such as catalysis, carbon cycle research, photovoltaics, 
combustion, and advanced computing. Increased investment is also 
important given the declining private support for long-term energy 
research.
Increase Grants in Core Programs
    ACS recommends that increases for the Office of Science be directed 
to advancing core energy research across disciplines, which enables DOE 
to respond rapidly to new challenges. For example, DOE capitalized on 
long-term atmospheric chemistry research, particularly in aerosols, and 
quickly developed a single anthrax-bacterium detector. DOE must 
strengthen its ability to attract scientists and train the next 
generation of scientists and engineers by increasing the number of 
grants in its core programs without reducing their size and duration. 
Current appropriations allow the DOE Office of Science to fund one 
third the proposals as the National Institutes of Health and the 
National Science Foundation. This rate is considerably lower than those 
of other agencies and amounts to lost opportunities for both 
significant discoveries and the education of the next generation of 
scientists and engineers.
    Within the Office of Science, ACS particularly supports the Basic 
Energy Sciences and Biological and Environmental Research programs. As 
the cornerstone of the Office, the Basic Energy Sciences (BES) program 
supports an array of long-term basic research to improve energy 
production and use and reduce the environmental impact of those 
activities. The BES program manages almost all of DOE's scientific 
user-facilities, and provides leading support for nanotechnology and 
advanced computing research--two priority research areas that will have 
important implications for energy efficiency and security. The 
Biological and Environmental Research (BER) program advances 
fundamental understanding in fields such as waste processing, 
bioremediation, and atmospheric chemistry to better understand 
potential long-term health and environmental effects of energy 
production and use and identify opportunities to prevent pollution. 
Progress in these fields is also needed to develop and advance new, 
effective, and efficient processes for the remediation and restoration 
of DOE weapons production sites. ACS supports a strong role for DOE in 
Federal efforts to advance pollution prevention and climate change 
research.
DOE and the Scientific Workforce
    As the largest supporter of research in the physical sciences, DOE 
can greatly affect the training and number of scientists in industry, 
government and academia. Inadequate investment in any research field 
constricts the supply of trained scientists and engineers who apply 
research and develop new technology. For instance, declining support 
for nuclear science and engineering will greatly affect the nuclear 
sector as a majority of today's nuclear scientists and engineers near 
retirement. Another example is the synergistic relationship between the 
need for radiochemists and NIH's ability to conduct clinical trials. 
Advances in diagnosis and treatment in nuclear medicine are dependent 
on the synthesis of highly specific radiopharmaceuticals that target 
biological processes in normal and diseased tissues. The Office of 
Science, through BER supported research, occupies a critical place in 
the field of radiopharmaceutical research. The NIH relies on the Office 
of Science's basic research to enable clinical trials.
    Another way for DOE to help attract students and retain talented 
scientists and engineers is to renew investments in scientific 
infrastructure. The Office of Science operates one of the most 
extensive and remarkable collection of scientific user facilities in 
the world, providing tools for research for more than 25,000 scientists 
funded by DOE, other Federal agencies, and industry. Many facilities 
are in poor condition or have outmoded instrumentation. Additional 
funding would allow for increased operating time, upgrades, 
instrumentation, and technical support. The proposed cuts could result 
in established facilities lying idle, allowing taxpayer investments to 
go unused.
    National laboratories also play an important role in providing 
research and training opportunities to enhance the university 
curriculum. ACS supports the initial plan by DOE to utilize its 
national laboratories to help mentor and train science teachers. 
Students at all levels clearly learn better when their teachers have a 
deep understanding of the subject, and the first-rate multidisciplinary 
research and scientific professionals at the national laboratories 
certainly could be a rich resource for science and math teachers. ACS 
urges stronger coordination among agencies with significant K-12 math 
and science programs in order to maximize the Federal investment in 
this area.
    ACS praises the work of Department of Energy leadership, and 
particularly Office of Science Director Ray Orbach, to establish a 
vision of America's scientific future with the 20 year facilities plan 
and a forward thinking departmental strategic plan. ACS views these 
documents, along with the Secretary of Energy's Advisory Board report 
``Critical Choices: Science, Energy, and Security'' as key elements of 
America's research and development portfolio. Growth in DOE Science 
funding is essential to realizing the goals in these documents, and ACS 
urges Congress to act to ensure this vision of a technologically 
advanced and safe America comes to fruition.
                                 ______
                                 
     Prepared Statement of the Napa County Flood Control and Water 
                         Conservation District
    On behalf of the Napa County Flood Control and Water Conservation 
District (District), I want to thank the subcommittee for this 
opportunity to present our priorities for fiscal year 2008 and, at the 
same time, express our appreciation for your support of the District's 
projects in the years past. The District is the local sponsor for the 
Corps of Engineers award-winning Napa River Flood Control project and 
we are requesting the subcommittee's full support of this project to 
ensure that it stays on schedule. Specifically, we request the 
subcommittee to support our request of $19 million from the Army Corps 
of Engineers Construction General account for the Napa River Flood 
Control Project. We are also seeking $3.615 million for the maintenance 
dredging of the Napa River from the Army Corps of Engineers (Operation 
and Maintenance, General account). The following text outlines these 
projects and the need for the requested funding.
                    napa river flood control project
Background
    In the last 50 years, 19 floods have struck the Valley region, 
exacting a heavy toll in loss of life and property.
    The most recent flooding event, the New Years flood of 2006, to hit 
our area is estimated to have caused some $70 million in damage within 
the city of Napa--with the vast majority of that damage in areas that 
will be protected by the Project that is currently under construction.
    The flood in 1986 killed three people and caused more than $100 
million in damage in 1986 dollars. Damages throughout Napa County 
totaled about $85 million from the January and March 1995 floods. The 
floods resulted in 27 businesses and 843 residences damaged countywide. 
Almost all of the damages from the 1986, 1995, and 1997 floods were 
within the Project area.
    Congress had authorized a flood control project in 1965, but due to 
expense, lack of public consensus on the design and concern about 
environment impacts, a project had never been realized. In mid-1995, 
Federal and State resource agencies reviewed the plan and gave notice 
to the Corps that this plan had significant regulatory hurdles to face.
    The project is located in the city and county of Napa, California. 
The population in the city of Napa, approximately, 67,000 in 1994, is 
expected to exceed 77,000 this year. Excluding public facilities, the 
present value of damageable property within the project flood plain is 
well over $500 million. The Napa River Basin, comprising 426 square 
miles, ranging from tidal marshes to mountainous terrain, is subject to 
severe winter storms and frequent flooding. In the lower reaches of the 
river, flood conditions are aggravated by local runoff. Floods in the 
Napa area have occurred in 1955, 1958, 1963, 1965, 1986 (flood of 
record), 1995, 1997 and 2005. In 1998, the river rose just above flood 
stage on three occasions, but subsided before major property damage 
occurred. In December of 2002, flooding occurred from the Napa Creek at 
the transition to the Napa River, resulting in damage to numerous 
residents and several businesses.
Approved Plan--Project Overview
    In an effort to identify a meaningful and successful plan, a new 
approach emerged that looked at flood control from a broader, more 
comprehensive perspective. Citizens for Napa River Flood Management was 
formed, bringing together a diverse group of local engineers, 
architects, aquatic ecologists, business and agricultural leaders, 
environmentalists, government officials, homeowners and renters and 
numerous community organizations.
    Through a series of public meetings and intensive debate over every 
aspect of Napa's flooding problems, the Citizens for Napa River Flood 
Management crafted a flood management plan offering a range of benefits 
for the entire Napa region. The Corps of Engineers served as a partner 
and a resource for the group, helping to evaluate their approach to 
flood management. The final plan produced by the Citizens for Napa 
River Flood Management was successfully evaluated through the research, 
experience and state-of-the-art simulation tools developed by the Corps 
and numerous international experts in the field of hydrology and other 
related disciplines. The success of this collaboration serves as a 
model for the Nation.
    Acknowledging the river's natural state, the project utilizes a set 
of living river strategies that minimize the disruption and alteration 
of the river habitat, and maximizes the opportunities for environmental 
restoration and enhancement throughout the watershed.
    The Corps has developed the revised plan, which provides 100-year 
protection, with the assistance of the community and its consultants 
into the Supplemental General Design Memorandum (SGDM) and its 
accompanying draft Environmental Impact Statement/Environmental Impact 
Report (SEIS/EIR). Construction of the project began 2 years ago. The 
coalition plan now memorialized in the Corps final documents includes 
the following engineered components: lowering of old dikes, marsh plain 
and flood plain terraces, oxbow dry bypass, Napa Creek flood plain 
terrace, upstream and downstream dry culverts along Napa Creek, new 
dikes, levees and flood walls, bank stabilization, pump stations and 
detention facilities, and bridge replacements. The benefits of the plan 
include reducing or elimination of loss of life, property damage, 
cleanup costs, community disruption due to unemployment and lost 
business revenue, and the need for flood insurance. In fact, the 
project has created an economic renaissance in Napa with new 
investment, schools and housing coming into a livable community on a 
living river. As a key feature, the plan will improve water quality, 
create urban wetlands and enhance wildlife habitats.
    The plan will protect over 7,000 people and over 3,000 residential/
commercial units from the 100-year flood event on the Napa River and 
its main tributary, the Napa Creek, and the project has a positive 
benefit-to-cost ratio under the Corps calculation. One billion dollars 
in damages will be saved over the useful life of the project. The Napa 
County Flood Control District is meeting its local cost-sharing 
responsibilities for the project. A countywide sales tax, along with a 
number of other funding options, was approved 4 years ago by a two-
thirds majority of the county's voters for the local share. Napa is 
California's highest repetitive loss community. This plan is 
demonstrative of the disaster resistant community initiative, as well, 
as the sustainable development initiatives of FEMA and EPA.
                      napa river dredging project
    The Napa River navigation project was authorized by the Rivers and 
Harbors Acts of 1888, 1935, and 1946.
    The Napa River is a shallow draft navigation channel which serves 
light commercial and recreational traffic. The project is normally 
dredged by the Corps of Engineers on a 6-year cycle, with the most 
recent dredging begin completed in 1998. This dredging is 2 years 
overdue and is causing not only impediment to commercial activity but 
posing major obstacles for construction of the project from the river. 
Maintenance dredging is required to restore depths required for 
existing traffic and in anticipation of the additional boat traffic 
resulting from replacement of Maxwell Bridge. The Napa County Flood 
Control and Water Conservation District is responsible for providing a 
suitable disposal site for the dredged material.
                                 ______
                                 
        Prepared Statement of the City of St. Helena, California
City Of St. Helena
    The city of St. Helena is located in the center of the wine growing 
Napa Valley, 65 miles north of San Francisco. The area was settled in 
1834 as part of General Vallejo's land grant. The city of St. Helena 
was incorporated as a city on March 24, 1876 and reincorporated on May 
14, 1889.
    The city of St. Helena is a General Law City and operates under the 
Council-City Manager form of government. St. Helena is a full service 
city and encompasses an area of 4 square miles. The City Council is the 
governing body and has the power to make and enforce all laws and set 
policy related to municipal affairs. The official population of the 
city of St. Helena as of January 1, 2003, is 6,041. Because of its size 
and its rural nature, St. Helena has serious infrastructure, as well 
as, flood protection and environmental needs that far exceed its 
financial capabilities.
    The city from its inception has served as a rural agricultural 
center. Over the years, with the growth and development of the wine 
industry, the city has become an important business and banking center 
for the wine industry. The city also receives many tourists as a result 
of the wine industry. While, the main goal of the city is to maintain a 
small-town atmosphere and to provide quality services to its citizens, 
this is becoming increasingly difficult. Regulatory, administrative and 
resource requirements placed on the city through the listing of 
threatened and endangered species under the Endangered Species Act on 
the Napa River, as well as significant Clean Water Act requirements 
require the city with a small population base to face significant 
financial costs.
    The Napa River flows along the east boundary of the city of St. 
Helena in northern Napa County. The overall Napa River Watershed 
historically supported a dense riparian forest and significant wetland 
habitat. Over the last 200 years, approximately 6,500 acres of valley 
floor wetlands have been filled in and 45,700 acres of overall 
watershed have been converted to urban and agricultural uses. This 
degradation of natural habitats has had a significant effect on water 
quality, vegetation and wildlife, and aquatic resources within the Napa 
River Watershed.
    Surface water quality of the Napa River is dependent upon time of 
year, runoff from York and Sulphur Creeks, and urban area discharges. 
During the winter months when stream flow is high, pollutants are 
diluted; however, sedimentation and turbidity is high as well. During 
the summer months when stream flow is low, pollutants are concentrated 
and oxygen levels are low, thereby decreasing water quality. 
Agricultural runoff adds pesticides, fertilizer residue, and sometimes 
sediment. Discharges from urban areas can include contaminated 
stormwater runoff and treated city wastewater. The Napa River has been 
placed on the Clean Water Act 303(d) list and TMDL Priority Schedule 
due to unacceptable levels of bacteria, sedimentation, and nutrients. 
It is against this backdrop that the city of St. Helena faces its 
biggest challenges.
St. Helena Comprehensive Flood Control Project
    The project site is in the City of St. Helena in Napa County, 
California (County), along the Napa River and adjacent areas. Within 
and adjacent to this reach of the River, the city proposes various 
flood control components, ranging from widening the floodplain and 
constructing new floodwalls and levee, to relocating homes. An 
additional component includes flood protection at the Wastewater 
Treatment Plant (WWTP) south of the city.
    With this project, the city of St. Helena seeks to develop and 
implement a plan that will reduce damage resulting from Napa River 
flooding in a manner that is economically feasible, acceptable from a 
public policy standpoint, and environmentally sensitive. In particular, 
the city wishes to reduce flooding in a manner that will result in 
overall improvement to the health of the ecosystem in the project 
reach.
    The project will re-connect the Napa River to its historic 
floodplain, thereby reducing water surface elevations through the area 
by several feet, avoiding large flood control structures and 
canalization, and would provide 100-year flood protection to the area. 
It will also restore habitat of the natural floodplain terraces, 
including riparian and aquatic habitat. Within and adjacent to this 
reach of the river, the city proposes various flood control components, 
ranging from widening the floodplain and constructing new floodwalls 
and levee, to relocating homes. The St. Helena Comprehensive Project 
will also restore native plant and tree communities through re-
vegetation efforts.
    The city of St. Helena respectfully requests the committee's 
support for $450,000 under the Corps of Engineers General 
Investigations Account.
Upper York Creek Dam Removal And Restoration Project
    The Upper York Creek Watershed originates at the western side of 
the Napa Valley watershed and the creek flows through a narrow canyon 
before joining the Napa River at a 225 foot elevation.
    This project will improve fish passage and ecological stream 
function for the York Creek, a key Napa River Tributary. The project 
will open an additional 2 miles of steelhead habitat upstream from the 
current dam location by removing an earthen dam and accumulated 
sediment necessary to restore fish passage to provide unimpeded 
upstream adult and downstream juvenile fish passage.
    Revegetation, as part of the project, will restore a self-
sustaining native plant community that will help exclude non-native 
invasive species.
    The city of St. Helena respectfully requests the committee's 
support for $1.371 million under the Corps of Engineers section 206 
Aquatic Ecosystem Restoration Program to design and initiate 
construction under a design build contract in fiscal year 2008.
St. Helena Napa River Restoration Project
    The Napa River and its riparian corridor are considered Critical 
Habitat for steelhead and salmon recovery. The steelhead is one of six 
federally-listed threatened and endangered species within the Napa 
River and its adjoining tributaries which requires attention. Current 
conditions are such that natural habitats and geomorphic processes of 
the Napa River are highly confined with sediment transport and 
geomorphic work occurring in a limited area of the streambed and 
channel banks. Napa River's habitat for the steelhead is limited in its 
ability to provide prime spawning habitat. Limitations include 
urbanization removing significant amounts of shading and cover 
vegetation within and adjacent to the river; and a detrimental lack of 
pool habitat.
    In an effort to address these Federal environmental issues, the St. 
Helena Napa River Restoration Project, a section 06 Aquatic Ecosystem 
Restoration Project, was identified in the Napa Valley Watershed 
Management Feasibility Study of April 2001 as a specific opportunity 
for restoration.
    This project will develop riparian planting regimes to maximize 
habitat values for species, in particular, steelhead, California 
freshwater shrimp and young salmon.
    This project will address the lack of shading and cover vegetation 
along the river which has impaired the river's ability to serve as a 
critical habitat for many different species of fish and wildlife. It is 
necessary to ensure and improve the viability of Federal and State 
listed species by providing rearing, resident and migratory habitat in 
the project's three-mile stream corridor. The project will also work to 
improve area habitat to benefit the migration of steelhead to high 
value fisheries habitat in upper watershed channel reaches.
    The city of St. Helena respectfully requests $300,000 in fiscal 
year 2008 funding from the Corps of Engineers section 206 Aquatic 
Ecosystem Restoration Program to complete the feasibility study. This 
study will recommend actions not only for maximizing habitat for 
species by removing obstacles and hard bank stabilization, but to 
implement improvements to in-stream habitat such as woody debris, 
boulders and establishment of pools.
                                 ______
                                 
 Prepared Statement of the Metropolitan Water Reclamation District of 
                            Greater Chicago
    On behalf of the Metropolitan Water Reclamation District of Greater 
Chicago (District), I want to thank the subcommittee for this 
opportunity to present our priority for fiscal year 2008 and, at the 
same time, express our appreciation for your support of the District's 
projects in the years past. The District is the local sponsor for the 
Corps of Engineers priority projects of the Chicagoland Underflow Plan: 
the O'Hare, McCook and Thornton Reservoirs. We are requesting the 
subcommittee's full support for McCook and Thornton Reservoirs, as the 
O'Hare Reservoir has been completed. Specifically, we request the 
subcommittee to support the President's fiscal year 2008 budget request 
of $33,500,000 from the Army Corps of Engineers Construction, General 
account in the fiscal year 2008 Energy and Water appropriations bill. 
The following text outlines these projects and the need for the 
requested funding.
The Chicagoland Underflow Plan
    The Chicagoland Underflow Plan (CUP) consists of three reservoirs: 
the O'Hare, McCook and Thornton Reservoirs. These reservoirs are a part 
of the Tunnel and Reservoir Plan (TARP). The O' Hare Reservoir Project 
was fully authorized for construction in the Water Resources 
Development Act of 1986 (Public Law 99-662) and completed by the Corps 
in fiscal year 1999. This reservoir is connected to the existing O'Hare 
segment of the TARP. Adopted in 1972, TARP was the result of a multi-
agency effort, which included officials of the State of Illinois, 
County of Cook, city of Chicago, and the District.
    TARP was designed to address the overwhelming water pollution and 
flooding problems of the Chicagoland combined sewer areas. These 
problems stem from the fact that the capacity of the area's waterways 
has been overburdened over the years and has become woefully inadequate 
in both hydraulic and assimilative capacities. These waterways are no 
longer able to carry away the combined sewer overflow (CSO) discharges 
nor are they able to assimilate the pollution associated with these 
discharges. Severe basement flooding and polluted waterways (including 
Lake Michigan, which is the source of drinking water for millions of 
people) is the inevitable result. We point with pride to the fact that 
TARP was found to be the most cost-effective and socially and 
environmentally acceptable way for reducing these flooding and water 
pollution problems. Experience to date has reinforced such findings 
with respect to economics and efficiency.
    The TARP plan calls for the construction of the new ``underground 
rivers'' beneath the area's waterways, connected to large CSO storage 
reservoirs. The ``underground rivers'' are tunnels up to 35 feet in 
diameter and 350 feet below the surface. All 109.4 miles of the tunnels 
have just recently been completed. The tunnels capture the majority of 
the pollution load by capturing all of the small storms and the first 
flush of the large storms.
    The completed O'Hare CUP Reservoir provides 350 million gallons of 
storage. This Reservoir has a service area of 11.2 square miles and 
provides flood relief to 21,535 homes in Arlington Heights, Des Plaines 
and Mount Prospect. The Thornton and McCook Reservoirs are currently 
under construction, but until and unless they are completed, 
significant areas will remain unprotected. Without these reservoirs as 
outlets, the local drainage has nowhere to go when large storms hit the 
area.
    Since its inception, TARP has not only abated flooding and 
pollution in the Chicagoland area, but has helped to preserve the 
integrity of Lake Michigan. In the years prior to TARP, a major storm 
in the area would cause local sewers and interceptors to surcharge 
resulting in CSO spills into the Chicagoland waterways and during major 
storms into Lake Michigan, the source of drinking water for the region. 
Since these waterways have a limited capacity, major storms have caused 
them to reach dangerously high levels resulting in massive sewer 
backups into basements and causing multi-million dollar damage to 
property.
    Since implementation of TARP, 823 billion gallons of CSOs have been 
captured by TARP, that otherwise would have reached waterways. Area 
waterways are once again abundant with many species of aquatic life and 
the riverfront has been reclaimed as a natural resource for recreation 
and development. Closure of Lake Michigan beaches due to pollution has 
become a rarity. After the completion of both phases of TARP, 99 
percent of the CSO pollution will be eliminated. The elimination of 
CSOs will reduce the quantity of discretionary dilution water needed to 
keep the area waterways fresh. This water can be used instead for 
increasing the drinking water allocation for communities in Cook, Lake, 
Will and DuPage counties that are now on a waiting list to receive such 
water. Already, these counties have received millions of gallons of 
additional Lake Michigan water per day, partially as a result of the 
reduction in the District's discretionary diversion since 1980. 
Additional allotments of Lake Michigan water will be made to these 
communities, as more water becomes available from reduced discretionary 
diversion.
    With new allocations of lake water, many communities that 
previously did not get lake water are in the process of building, or 
have already built, water mains to accommodate their new source of 
drinking water. The new source of drinking water will be a substitute 
for the poorer quality well water previously used by these communities. 
Partly due to TARP, it is estimated by IDOT that between 1981 and 2020, 
283 million gallons per day of Lake Michigan water would be added to 
domestic consumption. This translates into approximately 2 million 
additional people that would be able to enjoy Lake Michigan water. This 
new source of water supply will not only benefit its immediate 
receivers but will also result in an economic stimulus to the entire 
Chicagoland area by providing a reliable source of good quality water 
supply.
The McCook and Thornton Reservoirs
    The McCook and Thornton Reservoirs of the Chicagoland Underflow 
Plan (CUP) were fully authorized for construction in the Water 
Resources Development Act of 1988 (Public Law 100-676). These CUP 
reservoirs, as previously discussed, are a part of TARP, a flood 
protection plan that is designed to reduce basement flooding due to 
combined sewer back-ups and inadequate hydraulic capacity of the urban 
waterways.
    These reservoirs will provide annual benefits of $115 million. The 
total expected annual benefits of these projects are approximately 
twice as much as their total annual costs. The District, as the local 
sponsor, has acquired the land necessary for these projects, and will 
meet its cost sharing obligations under Public Law 99-662.
    These projects are a very sound investment with a high rate of 
return. The remaining benefit/cost ratio for these 2 reservoirs 
together is 3.0. They will enhance the quality of life, safety and the 
peace of mind of the residents of this region. The State of Illinois 
has endorsed these projects and has urged their implementation. In 
professional circles, these projects are hailed for their 
farsightedness, innovation, and benefits.
    Based on two successive Presidentially-declared flood disasters in 
our area in 1986 and again in 1987, and severe flooding in the last 
several years, we believe the probability of this type of flood 
emergency occurring before implementation of the critical flood 
prevention measure is quite high. As the public agency for the greater 
Chicagoland area responsible for water pollution control, and as our 
past sponsorship for flood control projects, we have an obligation to 
protect the health and safety of our citizens. We are asking your 
support in helping us achieve this necessary and important goal of 
construction completion.
    We have been very pleased that over the years the subcommittee has 
seen fit to include critical levels of funds for these important 
projects. It is important that we receive a total of $33,500,000 in 
construction funds in fiscal year 2008 to maintain the commitment and 
finish these projects. This funding is critical in order to construct 
the McCook Reservoir Stage 1 Grout Curtain, Stage 2 Slurry Wall, and 
Stage 1 Rock Wall Stabilization Contracts and to continue the 
engineering design of other McCook and Thornton Reservoir projects. The 
community has waited long enough for protection and we need these funds 
now to move the project in construction. We respectfully request your 
consideration of our request.
Summary
    To emphasize the areas plight, I would like to relate a flooding 
event that occurred when just under 4 inches of rain fell on the 
greater Chicagoland area. Due to the frozen ground, almost all of the 
rainfall entered our combined sewers, causing sewerage back-ups 
throughout the area. When the existing TARP tunnels filled with 
approximately 1.2 billion gallons of sewage and runoff, the only 
remaining outlets for the sewers were our waterways. Between 9:00 p.m. 
and 3:00 a.m., the Chicago and Calumet Rivers rose 6 feet. For the 
first time since 1981 we had to open the locks at all three of the 
waterway control points; these include Wilmette, downtown Chicago, and 
Calumet. Approximately 4.2 billion gallons of combined sewage and 
stormwater had to be released directly into Lake Michigan.
    Given our large regional jurisdiction and the severity and 
regularity of flooding in our area, the Corps was compelled to develop 
a plan that would complete the uniqueness of TARP and be large enough 
to accommodate the area we serve. With a combined sewer area of 375 
square miles, consisting of the city of Chicago and 51 contiguous 
suburbs, there are 1,443,000 structures within our jurisdiction, which 
are subject to flooding at any given time. The annual damages sustained 
exceed $150 million. With the TARP CUP Reservoirs in place, these 
damages could be eliminated. We must consider the safety and peace of 
mind of the 2 million people who are affected as well as the disaster 
relief funds that will be saved when these projects are in place. As 
the public agency in the greater Chicagoland area responsible for water 
pollution control, and as the regional sponsor for flood control, we 
have an obligation to protect the health and safety of our citizens. We 
are asking your support in helping us achieve this necessary and 
important goal. It is absolutely critical that the Corps' work, which 
has been proceeding for a number of years, now proceeds on schedule 
through construction.
    Therefore, we urgently request that a total of $33,500,000 in 
construction funds be made available in the fiscal year 2008 Energy and 
Water Development Appropriations Act to continue construction of the 
McCook and Thornton Reservoir Projects.
    Again, we thank the subcommittee for its support of this important 
project over the years, and we thank you in advance for your 
consideration of our request this year.
                                 ______
                                 
  Prepared Statement of the Western Coalition of Arid States (WESTCAS)
    My name is Larry Libeu, and I am President of the Western Coalition 
of Arid States. The Western Coalition of Arid States (WESTCAS) is 
submitting this testimony regarding the Presidents fiscal year 2008 
budget request for the United States Army Corp of Engineers.
    WESTCAS is a coalition of approximately 125 water and wastewater 
districts, cities and towns and professional organizations focused on 
water quality and water quantity issues in the States of Arizona, 
California, Colorado, Idaho, Nevada, New Mexico, Oregon and Texas. Our 
mission is to work with Federal, State and regional water quality and 
quantity agencies to promote scientifically-sound law, regulations, 
appropriations and policies that protect public health in the 
environment of the arid West.
    Providing adequate budget for the Army Corps of Engineers is 
crucial for the immediate and long term delivery of adequate water 
supplies, hydropower, flood control, and flood and coastal restoration 
within the arid west. As such WESTCAS supports the performance criteria 
established which will ensure projects are funded and completed within 
a timely fashion. We also believe the issue of reprogramming of funds 
out of projects needs to be addressed in a more thorough manner and 
have welcomed your interest in this area of the Corps program.
    We are greatly concerned that the Corps Construction budget is down 
38 percent, the General Investigations are down 45 percent and the O&M 
budget is ever increasing. The Corps infrastructure is one of the 
foundations of our Nation's economy--and the infrastructure is aging. 
When we look at the number of projects funded by Congress last year, it 
appears the Corps is only submitting a budget that funds one-quarter of 
that work. This is not a solution for success but a path way to 
cataclysmic failure which could have devastating consequences to the 
economy.
    The Army Corps of Engineers provides funding and oversight for many 
projects within the WESTCAS States including but not limited to the 
following:

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

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

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

                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

   Prepared Statement of the New Mexico Interstate Stream Commission
  colorado river basin salinity control program, title ii, bureau of 
                              reclamation
                                summary
    This statement is submitted in support of fiscal year 2008 
appropriations for the Colorado River Basin salinity control program of 
the Department of the Interior's Bureau of Reclamation. Congress 
designated the Bureau of Reclamation to be the lead agency for salinity 
control in the Colorado River Basin by the Colorado River Basin 
Salinity Control Act of 1974, and reconfirmed the Bureau of 
Reclamation's role by passage of Public Law 104-20. A total of $17.5 
million is requested for fiscal year 2008 to implement the authorized 
Colorado River salinity control program of the Bureau of Reclamation. 
The President's appropriation request of $7.85 million, falling again 
below previous appropriations for the program, is inadequate because 
studies have shown that the implementation of the salinity control 
program has fallen behind the pace needed to control damages from 
salinity. An appropriation of $17.5 million for Reclamation's salinity 
control program is necessary to protect water quality standards for 
salinity and to prevent unnecessary levels of economic damage from 
increased salinity levels in water delivered to the Lower Basin States 
of the Colorado River. In addition, funding for operation and 
maintenance of existing projects and sufficient general investigation 
funding is required to identify new salinity control opportunities.
                               statement
    The water quality standards for salinity of the Colorado River must 
be protected while the Basin States continue to develop their compact 
apportioned waters of the river. The salinity standards for the 
Colorado River have been adopted by the seven Basin States and approved 
by EPA. While currently the standards have not been exceeded, salinity 
control projects must be brought on-line in a timely and cost-effective 
manner to prevent future effects that could cause the numeric criteria 
to be exceeded, and would result in unnecessary damages from higher 
levels of salinity in the water delivered to Lower Basin States of the 
Colorado River.
    The Colorado River Basin Salinity Control Act was authorized by 
Congress and signed into law in 1974. The seven Colorado River Basin 
States, in response to the Clean Water Act of 1972, formed the Colorado 
River Basin Salinity Control Forum, a body comprised of gubernatorial 
representatives from the seven States. The Forum was created to provide 
for interstate cooperation in response to the Clean Water Act and to 
provide the States with information necessary to comply with Sections 
303(a) and (b) of the Act. The Forum has become the primary means for 
the Basin States to coordinate with Federal agencies and Congress to 
support the implementation of the salinity control program for the 
Colorado River Basin.
    Bureau of Reclamation studies show that quantified damages from the 
Colorado River to United States water users are about $330,000,000 per 
year. Unquantified damages are significantly greater. Damages are 
estimated at $75,000,000 per year for every additional increase of 30 
milligrams per liter in salinity of the Colorado River. Control of 
salinity is necessary for the States of the Colorado River Basin, 
including New Mexico, to continue to develop their compact-apportioned 
waters of the Colorado River.
    Timely appropriations for the funding of the salinity control 
program are essential to comply with the water quality standards for 
salinity, prevent unnecessary economic damages in the United States, 
and protect the quality of the water that the United States is 
obligated to deliver to Mexico. The Basin States and Federal agencies 
agree that increases in the salinity of the Colorado River will result 
in significant increases in damages to water users in the Lower 
Colorado River Basin. An appropriation of only the amount specified in 
the President's budget request is inadequate to protect the quality of 
water in the Colorado River and prevent unnecessary salinity damages in 
the States of the Lower Colorado River Basin. Although the United 
States has always met the water quality standard for salinity of water 
delivered to Mexico under Minute No. 242 of the International Boundary 
and Water Commission, the United States through the U.S. Section of 
IBWC is currently addressing a request by Mexico for better quality 
water. Thus, continued strong support and adequate funding of the 
salinity control program is required to control salinity-related 
damages in the United States and Mexico.
    Congress amended the Colorado River Basin Salinity Control Act in 
July 1995 (Public Law 104-20). The salinity control program authorized 
by Congress by the amendment has proven to be very cost-effective, and 
the Basin States are standing ready with up-front cost sharing. 
Proposals from public and private sector entities in response to the 
Bureau of Reclamation's advertisement have far exceeded available 
funding. Basin States cost sharing funds are available for the $17.5 
million appropriation request for fiscal year 2008. The Basin States 
cost sharing adds $0.43 for each Federal $1 appropriated.
    Public Law 106-459 gave the Bureau of Reclamation additional 
spending authority for the salinity control program. With the 
additional authority in place and significant cost sharing available 
from the Basin States, it is essential that the salinity control 
program be funded at the level requested by the Forum and Basin States 
to protect the water quality of the Colorado River. Some of the most 
cost-effective salinity control opportunities occur when Reclamation 
improves irrigation delivery systems concurrently with on-farm 
irrigation improvements undertaken by the U.S. Department of 
Agriculture's Environmental Quality Incentives Program (EQIP). The 
Basin States cost-share funding is available for both parts, on-farm 
and off-farm, and EQIP funding appears to be adequate to accomplish 
needed on-farm work. Adequate funding for Reclamation off-farm work is 
needed to maintain timely implementation and effectiveness of salinity 
control measures.
    Maintenance and operation of the Bureau of Reclamation's salinity 
control projects and general investigations to identify new cost-
effective salinity control projects are necessary for the continued 
success of the salinity control program. Investigation of new 
opportunities for salinity control are critical while the Basin States 
continue to develop and use their compact-apportioned waters of the 
Colorado River. The water quality standards for salinity and the United 
States water quality requirements pursuant to treaty obligations with 
Mexico are dependent on timely implementation of salinity control 
projects, adequate funding to maintain and operate existing projects, 
and sufficient general investigation funding to determine new cost-
effective opportunities for salinity control.
    Continued funding primarily through Reclamation's Facility 
Operation activity to support maintenance and operation the Paradox 
Valley Unit and the Grand Valley Unit is critically needed. General 
Investigation funding through Reclamation's Colorado River Water 
Quality Improvement Program has been lacking in the recent past, and 
needs to be restored to a level that supports the need for 
identification and study of new salinity control opportunities to 
maintain the levels of salinity control to meet water quality standards 
and control economic damages in the Lower Colorado River Basin.
    I urge the Congress to appropriate $17.5 million to the Bureau of 
Reclamation for the Colorado River Basin salinity control program, 
adequate funding for operation and maintenance of existing projects and 
adequate funding for general investigations to identify new salinity 
control opportunities. Also, I fully support testimony by the Forum's 
Executive Director, Jack Barnett, in request of this appropriation, and 
the recommendation of an appropriation of the same amount by the 
federally chartered Colorado River Basin Salinity Control Advisory 
Council.
                                 ______
                                 
           Prepared Statement of the Jicarilla Apache Nation
                              introduction
    On behalf of the Jicarilla Apache Nation in New Mexico, I am 
pleased to submit this statement regarding the fiscal year 2008 
proposed budget for the Bureau of Reclamation, Department of the 
Interior. The Jicarilla Apache Nation (``nation'') is a federally 
recognized Indian Tribe, and our Reservation is located in Northern New 
Mexico. We have over 3,500 members and 85 percent of the population 
lives on our Reservation in the town of Dulce, which serves as our 
tribal headquarters. For the last 8 years we have been working with the 
Federal Government to deal with a severe problem that has been plaguing 
us--the failing public drinking water and wastewater systems on our 
Reservation.
    As more described below, the Nation has worked tirelessly to take 
corrective action to address this public health crisis by committing 
significant funds and resources, and by successfully working with 
Congress to authorize a project to replace this dilapidated 
infrastructure. The nation has done everything possible to implement 
the statutory directive placed on the Secretary of the Interior to 
comply with the law and construct our project. Unfortunately, since 
Congress authorized the project which President Bush signed into law in 
December 2002, the Bush administration has repeatedly failed to include 
funding in its annual budget to Congress to develop and construct our 
project. Notably, ours is the only project Congress has authorized 
which is fully encompassed in an Indian reservation and which has 100 
percent Indian project beneficiaries. We also understand our project is 
the only one that acknowledges and mandates corrective action for the 
Federal Government's liability in establishing and creating a deficient 
and unsafe public drinking water system serving an Indian reservation 
population.
    The nation respectfully calls upon this committee to provide 
funding in fiscal year 2008 for our project and see that the 
administration is accountable for constructing it, as set forth in our 
project's authorizing statute.
                               background
    The problem with the condition of the current public water system 
and waste water infrastructure on the Jicarilla Apache Reservation 
stems from generations of neglect by the Bureau of Indian Affairs 
(BIA), which, as creator, owner and operator of the system, did not 
properly design, plan for, manage, repair and upgrade portions of the 
system over the last 90 years. The system diverts water from the Navajo 
River--a pristine water source, and its initial structures served the 
original BIA facilities on the Reservation. As the community of Dulce 
became the center of activity, members began moving there from other 
areas of the Reservation. In response to the growth, the BIA expanded 
the water line to allow members to access the water from common areas. 
As the area grew with housing and other facilities, water lines were 
extended, on an ad hoc basis, with no planning or recording. By the 
1990's the community's system had every type of water piping, including 
clay, asbestos lined, other metals, as even some wood piping has been 
unearthed.
    In October 1998, the system collapsed at the river and left the 
nation without water for 6 days. The home of one of our elders burned 
down, with no water to put out the fire. The National Guard brought in 
bottled water and portable restrooms. The nation funded emergency 
efforts to restore water delivery, and received no funding from the 
BIA.
    The BIA's neglect and failure to manage and maintain its public 
water system serving our people has caused many dire health threats and 
circumstances including degraded water quality in the lines, obsolete 
and non-compliant sewage lagoon ponds which were operating without 
properly permits because the ponds did not meet the Federal standards, 
pollution from unlined sewage ponds spilling into the community and 
into nearby arroyo which fed back into the Navajo River towards 
downstream users. The most disturbing circumstance, however, is that a 
large number of tribal members are experiencing serious intestinal and 
other internal diseases, more community members have been diagnosed and 
are dying from stomach and other forms of cancer. We suspect this can 
be attributed to unsafe drinking water.
                    statutory project authorization
    A combination of the water outage and the dire health related 
circumstances led the nation's leaders to go to Washington, DC to 
request assistance to repair the Federal Government's broken system. 
Our first step was to approach the BIA in Washington. They told us they 
had no funds to address the problem. The nation sought help from other 
Federal agencies, who were sympathetic but generally unable to assist 
because the BIA owned and operated the system. They also informed us 
that the enormity of the problems with the system required a 
significant investment of resources that they would not be able to 
accommodate.
    We then turned to our delegation from New Mexico for help. Working 
with them, the nation pursued the legislative route to authorize a 
project specifically to repair the system. The idea was not to turn to 
the BIA, which was not equipped to deal with a major water system 
infrastructure improvement project, either as a technical or funding 
matter. Based on our location in the Southwest and the work of the 
Bureau of Reclamation (BOR) working on significant projects in the 
region, we decided to work toward authorizing a project through the 
BOR. In 2000, Congress passed a bill which directed the Department of 
the Interior, through the BOR, to do a feasibility study on upgrading 
the system. See Public Law 106-243. The nation worked directly with the 
agency on the study which was completed in September of 2002.
    The study determined that $45 million would be needed to replace 
the existing water delivery and wastewater infrastructure. The report 
acknowledged the nation's efforts in taking on $15 million of debt to 
improve portions of the system including: replacement of the diversion 
structures and pipeline at the river and up to the water treatment 
plant; building a new water treatment plant and expanding its capacity; 
repairing and replacing old water towers; replacement of infrastructure 
on the expansion Mundo Ranch property.
    Based on this completed report, in 2001, our delegation introduced 
legislation to direct the Secretary of the Interior to repair and 
replace the infrastructure based on the recommendations in the 
feasibility report; the legislation also authorized the Department to 
expend funding to undertake this project. During this timeframe, with 
Senator Domenici's leadership, Congress appropriated $2.5 million in 
the fiscal year 2002 Energy and Water Development bill for the 
project's planning, design and other work needed to prepare for 
initiation of the project's construction.
    On December 13, 2002, President Bush signed into law Public Law 
107-331, which includes as Title VIII our legislation, the Jicarilla 
Apache Reservation Rural Water System Act, which directs the Secretary 
of the Interior to proceed with a project to replace the defunct 
infrastructure, as outlined and recommended in the feasibility report, 
and which authorizes the appropriations of funds ($45 million) for our 
project.
      inadequate federal funding and failure to implement the law
    Since the law's enactment, the nation has made repeated efforts to 
secure funding for the development of our project through the Bureau of 
Reclamation's account in the Energy and Water Development 
Appropriations bill and through the Executive budget process. In spite 
of our efforts, we were unable to secure funding in the fiscal year 
2003 through fiscal year 2005 appropriations cycles. Finally, in fiscal 
year 2006, Congress provided $250,000 for our project in the Energy and 
Water Development Appropriations bill. Last year, the House bill 
provided $500,000 for our project, but since Congress did not complete 
this and other appropriations bills, it remains unclear whether we will 
receive any funding this year.
    Our efforts have been further stymied by the Bush administration's 
failure to include any funds for our project in its annual budget 
submission to Congress. We have visited with the Office of Management 
and Budget, the Assistant Secretary for Water and Science and the BOR 
Commissioner urging them to implement the law and take action to help 
us address this serious pubic health crisis. Unfortunately, we have 
been told that the Bush administration is not willing to provide 
funding in its budget for ``new starts'' for water construction 
projects, and we were further informed by OMB that under their 
philosophy, local governments should bear the burden for public water 
system. Contrary to these ``views'', the law requires the Secretary to 
act, and the system at issue was federally owned and operated and its 
defunct condition was caused exclusively by Federal neglect so the 
nation should not be left with the burden of the Federal Government's 
liability. On top of these considerations, the United States has a 
trust responsibility to the nation, our citizens and our trust 
resources. These are all compelling reasons to include funding for this 
project in the budget process, and the administration must act to meet 
its obligations.
    With respect to section 104 of Public Law 109-451, we believe the 
committee should provide the Department with additional direction to 
make sure our project is funded on an expeditious and emergency basis. 
We have waited far too long and our people have suffered enormously 
while the administration refuses to address this on-going and shameful 
situation on our Reservation, which was created by the Federal 
Government itself.
    In fact, this new law explicitly recognizes that such factors as 
the ``urgent and compelling need'' for a rural water supply projects 
that are necessary to ``improve the health'' and/or ``meet applicable 
requirements established by law'' are factors for assessing the 
priority of such projects. Both of these factors apply to this project.
    On a regional level, the nation has been a good neighbor and 
steward of our resources. We have helped water users in both the Rio 
Grande and San Juan basins to resolve delicate water issues. We have a 
proven record of managing our lands and water. All we are asking is for 
support to ensure that, pursuant to statutory directives, the 
Department meets its obligations and provides the people on the 
Jicarilla Apache Reservation a safe and reliable source of drinking 
water for the betterment of our citizens.
                               conclusion
    Since the legislation's enactment in December 2002, the nation has 
been forced to borrow millions of additional dollars on the project 
because of the urgency and crisis facing our people. The nation used 
tax exempt bonds to pay for the repairs and has reached its debt 
capacity. It is time for the Federal Government to step up to the plate 
and meet its statutory and moral obligations owed to the nation. We are 
asking for your help today! Please hold the Department of the Interior 
accountable for constructing our project, as directed in the 2002 
statute, and for requesting the necessary funding from Congress to do 
so. We also respectfully ask that the committee grant the nation's 
fiscal year 2008 $3 million funding request for our project.
    Thank you for your time and consideration of our views, concerns 
and requests.
                                 ______
                                 
      Prepared Statement of the Colorado River Board of California
    This testimony is in support of fiscal year 2008 funding for the 
Department of the Interior for the Title II Colorado River Basin 
Salinity Control Program (Public Law 93-320). By statute, Congress 
designated the Department of the Interior, Bureau of Reclamation 
(Reclamation) to be the lead agency for salinity control in the 
Colorado River Basin. This successful and cost effective program is 
carried out pursuant to the Colorado River Basin Salinity Control Act 
and the Clean Water Act (Public Law 92-500). California's Colorado 
River water users are presently suffering economic damages in the 
hundreds of million of dollars per year due to the River's salinity.
    The Colorado River Board of California (Colorado River Board) is 
the State agency charged with protecting California's interests and 
rights in the water and power resources of the Colorado River system. 
In this capacity, California and the other six Basin States through the 
Colorado River Basin Salinity Control Forum (Forum), the interstate 
organization responsible for coordinating the Basin States' salinity 
control efforts, established numeric criteria in June 1975 for salinity 
concentrations in the River. These criteria were established to lessen 
the future damages in the Lower Basin States, as well as, assist the 
United States in delivering water of adequate quality to Mexico in 
accordance with Minute 242 of the International Boundary and Water 
Commission.
    To date, Reclamation has been successful in implementing projects 
for preventing salt from entering the River system; however, many more 
potential projects for salt reduction have been identified that could 
be implemented through Reclamation's Basin-wide Salinity Control 
Program. In the past, the Forum has presented testimony to Congress in 
which it has stated that the rate of implementation of the program 
beyond that which has been funded in the past is essential. This is 
still the case, and California urges the Congress to fully fund 
Reclamation's continuing implementation of this critical program.
    In 2000, Congress reviewed the salinity control program as 
authorized in 1995. Following hearings, and with the administration's 
support, the Congress passed legislation (Public Law 106-459) that 
increased the ceiling authorization for this program from $75 million 
to $175 million. Reclamation has received proposals to move the program 
ahead and the seven Basin States have agreed to up-front cost sharing 
on an annual basis, which adds 43 cents for every Federal dollar 
appropriated.
    In recent years, the President's requests have dropped to below $10 
million. In the judgment of the Forum, this amount is inappropriately 
low. Water quality commitments to downstream United States and Mexican 
water users must be honored while the Basin States continue to develop 
their Compact apportioned waters from the Colorado River. 
Concentrations of salts in the River cause about $330 million in 
quantified damage in the United States. However significant 
unquantified damages also, occur. For example, damages occur from:
  --A reduction in the yield of salt sensitive crops and increased 
        water use for leaching in the agricultural sector;
  --A reduction in the useful life of galvanized water pipe systems, 
        water heaters, faucets, garbage disposals, clothes washers, and 
        dishwashers, and increased use of bottled water and water 
        softeners in the household sector;
  --An increase in the use of water for cooling, and the cost of water 
        softening, and a decrease in equipment service life in the 
        commercial sector;
  --An increase in the use of water and the cost of water treatment, 
        and an increase in sewer fees in the industrial sector;
  --A decrease in the life of treatment facilities and pipelines in the 
        utility sector;
  --Difficulty in meeting wastewater discharge requirements to comply 
        with National Pollutant Discharge Elimination System permit 
        terms and conditions, an increase in desalination and brine 
        disposal costs due to accumulation of salts in groundwater 
        basins, and fewer opportunities for recycling and reuse of the 
        water due to groundwater quality deterioration; and
  --Increased use of imported water for leaching and the cost of 
        desalination and brine disposal for recycled water.
    For every 30 milligram per liter increase in salinity 
concentrations, there are $75 million in additional damages in the 
United States. The Forum, therefore, believes implementation of the 
program needs to be accelerated to a level beyond that requested by the 
administration.
    Some of the most cost-effective salinity control opportunities 
occur when Reclamation can improve irrigation delivery systems in a 
coordinated fashion with the activities of the U.S. Department of 
Agriculture's (USDA) program through working with landowners 
(irrigators) to improve on-farm irrigation systems. With the USDA's 
Environmental Quality Incentive Program, more on-farm funds are 
available and adequate funds for Reclamation are needed to maximize 
Reclamation's effectiveness in addressing water delivery system 
improvements. The Forum, at its meeting in October 2006, in Scottsdale, 
Arizona recommended a funding level of $17,500,000 for Reclamation's 
Basin-wide Salinity Control Program to continue implementation of 
needed projects and begin to reduce the ``backlog'' of projects.
    In addition, the Colorado River Board recognizes that the Federal 
Government has made significant commitments to the Republic of Mexico 
and to the seven Colorado River Basin States with regard to the 
delivery of quality water to Mexico. In order for those commitments to 
be honored, it is essential that in fiscal year 2008, and in future 
fiscal years, that Congress provide funds to the Bureau of Reclamation 
for the continued operation of completed projects.
    The Colorado River is, and will continue to be, a major and vital 
water resource to the 18 million residents of southern California, 
including municipal, industrial, and agricultural water users in 
Ventura, Los Angeles, San Bernardino, Orange, Riverside, San Diego, and 
Imperial counties. Preservation and improvement of Colorado River water 
quality through an effective salinity control program will avoid the 
additional economic damages to users in California and the other States 
that rely on the Colorado River.
                                 ______
                                 
 Prepared Statement of the Colorado River Basin Salinity Control Forum
    This testimony is in support of funding for the Title II Colorado 
River Basin Salinity Control Program. The Congress has designated the 
Department of the Interior, Bureau of Reclamation (Reclamation), to be 
the lead agency for salinity control in the Colorado River Basin. This 
role and the authorized program were refined and confirmed by the 
Congress when Public Law 104-20 was enacted. A total of $17,500,000 is 
requested for fiscal year 2008 to implement the needed and authorized 
program. Failure to appropriate these funds will result in significant 
economic damage in the United States and Mexico.
    In recent years, the President's requests have dropped to below $10 
million. In the judgment of the Colorado River Basin Salinity Control 
Forum (Forum), this amount is inappropriately low. Water quality 
commitments to downstream United States and Mexican water users must be 
honored while the Basin States continue to develop their Colorado River 
Compact-apportioned waters. Concentrations of salts in the river cause 
about $330 million in quantified damage in the United States with 
significantly greater unquantified damages. Damages occur from:
  --a reduction in the yield of salt sensitive crops and increased 
        water use for leaching in the agricultural sector,
  --a reduction in the useful life of galvanized water pipe systems, 
        water heaters, faucets, garbage disposals, clothes washers, and 
        dishwashers, and increased use of bottled water and water 
        softeners in the household sector,
  --an increase in the use of water for cooling, and the cost of water 
        softening, and a decrease in equipment service life in the 
        commercial sector,
  --an increase in the use of water and the cost of water treatment, 
        and an increase in sewer fees in the industrial sector,
  --a decrease in the life of treatment facilities and pipelines in the 
        utility sector,
  --difficulty in meeting wastewater discharge requirements to comply 
        with National Pollutant Discharge Elimination System permit 
        terms and conditions, and an increase in desalination and brine 
        disposal costs due to accumulation of salts in groundwater 
        basins,
  --increased use of imported water for leaching and the cost of 
        desalination and brine disposal for recycled water.
    For every 30 mg/l increase in salinity concentrations, there is $75 
million in additional damages in the United States. The Forum, 
therefore, believes implementation of the program needs to be 
accelerated to a level beyond that requested by the President.
    The program authorized by the Congress in 1995 has proven to be 
very successful and very cost effective. Proposals from the public and 
private sector to implement salinity control strategies have far 
exceeded the available funding and Reclamation has a backlog of 
proposals. Reclamation continues to select the best and most cost-
effective proposals. Funds are available for the Colorado River Basin 
States' cost sharing for the level of Federal funding requested by the 
Forum. Water quality improvements accomplished under Title II of the 
Colorado River Basin Salinity Control Act also benefit the quality of 
water delivered to Mexico. Although the United States has always met 
the commitments of the International Boundary & Water Commission's 
(Commission) Minute No. 242 to Mexico with respect to water quality, 
the United States Section of the Commission is currently addressing 
Mexico's request for better water quality at the International 
Boundary.
    Some of the most cost-effective salinity control opportunities 
occur when Reclamation can improve irrigation delivery systems at the 
same time that the U.S. Department of Agriculture's (USDA) program is 
working with landowners (irrigators) to improve the on-farm irrigation 
systems. Through the USDA Environmental Quality Incentives Program, 
adequate on-farm funds appear to be available and adequate Reclamation 
funds are needed to maximize the effectiveness of the effort. These 
salinity control efforts have secondary water conservation benefits at 
the point of use and downstream at the point of reuse.
                                overview
    In 2000, the Congress reviewed the program as authorized in 1995. 
Following hearings, and with administration support, the Congress 
passed legislation that increased the ceiling authorized for this 
program by $100 million. Reclamation has received cost-effective 
proposals to move the program ahead and the Basin States have funds 
available to cost-share up-front.
    The Colorado River Basin Salinity Control Program was originally 
authorized by the Congress in 1974. The Title I portion of the Colorado 
River Basin Salinity Control Act responded to commitments that the 
United States made, through Minute No. 242, to Mexico concerning the 
quality of water being delivered to Mexico below Imperial Dam. Title II 
of the Act established a program to respond to salinity control needs 
of Colorado River water users in the United States and to comply with 
the mandates of the then newly legislated Clean Water Act. Initially, 
the Secretary of the Interior and Reclamation were given the lead 
Federal role by the Congress. This testimony is in support of adequate 
funding for the Title II program.
    After a decade of investigative and implementation efforts, the 
Basin States concluded that the Salinity Control Act needed to be 
amended. The Congress revised the Act in 1984. That revision, while 
leaving implementation of the salinity control policy with the 
Secretary of the Interior, also gave new salinity control 
responsibilities to the USDA and to the Bureau of Land Management 
(BLM). The Congress has charged the administration with implementing 
the most cost-effective program practicable (measured in dollars per 
ton of salt removed). The Basin States are strongly supportive of that 
concept as the Basin States cost share 30 percent of Federal 
expenditures up-front for the salinity control program, in addition to 
proceeding to implement salinity control activities for which they are 
responsible in the Colorado River Basin.
    The Forum is composed of gubernatorial appointees from Arizona, 
California, Colorado, Nevada, New Mexico, Utah and Wyoming. The Forum 
has become the seven-State coordinating body for interfacing with 
Federal agencies and the Congress to support the implementation of the 
program necessary to control the salinity of the river system. In close 
cooperation with the Environmental Protection Agency (EPA) and pursuant 
to requirements of the Clean Water Act, every 3 years the Forum 
prepares a formal report analyzing the salinity of the Colorado River, 
anticipated future salinity, and the program elements necessary to keep 
the salinity at or below the concentrations in the river system in 1972 
at Imperial Dam, and below Parker and Hoover Dams.
    In setting water quality standards for the Colorado River system, 
the salinity concentrations at these three locations have been 
identified as the numeric criteria. The plan necessary for controlling 
salinity and reducing downstream damages has been captioned the ``Plan 
of Implementation.'' The 2005 Review of water quality standards 
includes an updated Plan of Implementation. The level of appropriation 
requested in this testimony is in keeping with the agreed upon plan. If 
adequate funds are not appropriated, significant damages from the 
higher salt concentrations in the water will be more widespread in the 
United States and Mexico.
                             justification
    The $17,500,000 requested by the Forum on behalf of the seven 
Colorado River Basin States is the level of funding necessary to 
proceed with Reclamation's portion of the Plan of Implementation. In 
July of 1995, the Congress amended the Colorado River Basin Salinity 
Control Act. The amended Act gives Reclamation new latitude and 
flexibility in seeking the most cost-effective salinity control 
opportunities, and it provides for utilization of proposals from 
project proponents, as well as more involvement from the private as 
well as the public sector. The result is that salt loading is being 
prevented at costs often less than half the cost under the previous 
program. The Congress recommitted its support for the revised program 
when it enacted Public Law 106-459. The Basin States' cost sharing up-
front adds 43 cents for every Federal dollar appropriated. The 
federally chartered Colorado River Basin Salinity Control Advisory 
Council, created by the Congress in the Salinity Control Act, has met 
and formally supports the requested level of funding. The Basin States 
urge the Energy and Water Development Subcommittee to support the 
funding as set forth in this testimony.
                     additional support of funding
    In addition to the funding identified above for the implementation 
of the most recently authorized program, the Forum urges the Congress 
to appropriate funds requested by the administration to continue to 
maintain and operate salinity control facilities as they are completed 
and placed into long-term operation. Reclamation has completed the 
Paradox Valley unit which involves the collection of brines in the 
Paradox Valley of Colorado and the injection of those brines into a 
deep aquifer through an injection well. The continued operation of this 
project and the Grand Valley Unit will be funded primarily through the 
Facility Operations activity.
    The Forum also supports funding to allow for continued general 
investigation of the Salinity Control Program as requested by the 
administration for the Colorado River Water Quality Improvement 
Program. It is important that Reclamation have planning staff in place, 
properly funded, so that the progress of the program can be analyzed, 
coordination between various Federal and State agencies can be 
accomplished, and future projects and opportunities to control salinity 
can be properly planned to maintain the water quality standards for 
salinity so that the Basin States can continue to develop their 
Colorado River Compact-apportioned waters.
                                 ______
                                 
       Prepared Statement of the San Diego County Water Authority
    Dear Chairman Dorgan: your support is needed to secure adequate 
funding for the Department of Interior for the Colorado River Basin 
Salinity Control Program (Program). To continue the essential work of 
the Program, the Water Authority urges funding of $17.5 million for 
fiscal year 2008. By statute, Congress designated the Department of 
Interior, Bureau of Reclamation (Reclamation) to be the lead agency for 
salinity control in the Colorado River Basin. The Program is carried 
out through the Colorado River Basin Salinity Control Act (1974) 
(Public Law 93-320) and the Clean Water Act.
    The salinity control projects through the Program benefit water 
users from seven States through more efficient water management and 
reduced salinity concentrations in Colorado River water. The Colorado 
River is the primary and single most important source of drinking water 
for more than 3 million people in San Diego County. Excess salinity 
causes economic damages in the San Diego region worth millions of 
dollars annually.
    Notably, concentrations of salts in the Colorado River annually 
cause about $330 million in quantified damages in the United States. 
For every 30 milligrams per liter increase in salinity concentrations 
there are $75 million in additional damages in the United States. 
Locally, impacts of excess salinity in the San Diego region include, 
but are not limited to, the following:
  --Reduced crop yields, impacting more than $1 billion of agricultural 
        products in the San Diego region.
  --Decreased useful life of commercial and residential water pipe 
        systems, water heaters, faucets, garbage disposals, clothes 
        washers, and dishwashers.
  --Increased household use of expensive bottled water and water 
        softeners.
  --Increased water treatment facility costs and a decrease in the life 
        of the treatment facilities.
  --Increased treatment to meet Federal and California wastewater 
        discharge requirements.
  --Fewer opportunities for water recycling due to excess salt in the 
        product water, which limits usefulness for commercial and 
        agricultural irrigation.
    To date, Reclamation has been successful in implementing projects 
for preventing salt from entering the River system; however, many 
potential projects for salt reduction have been identified that could 
be implemented through the Program. The rate of implementation of the 
Program beyond that which has been funded in the past is essential, and 
the Water Authority urges Congress to fully fund Reclamation's 
continuing implementation of this critical program.
    Some of the most cost-effective salinity control opportunities 
occur when Reclamation can improve irrigation delivery systems in a 
coordinated fashion with the activities of the U.S. Department of 
Agriculture's Environmental Quality Incentive Program through working 
with landowners (irrigators) to improve on-farm irrigation systems. 
Adequate funds from Reclamation are needed to maximize this coordinated 
effort and effectiveness in addressing water delivery system 
improvements.
    The Program has proven to be a very cost-effective approach to 
mitigate the impacts of increased salinity in the Colorado River, which 
is an investment that avoids millions of dollars in economic damages 
caused by excess salinity. In addition, the Program assists the 
delivery of quality water to Mexico in accordance with Minute 242 of 
the 1944 Water Treaty.
    The Colorado River Basin Salinity Control Forum (California and the 
other six Basin States) has recommended that a funding level of $17.5 
million for Reclamation's Basin-wide Salinity Control Program is 
necessary and appropriate to continue implementation of needed 
projects.
    The Water Authority supports the recommendation for funding and 
urges this subcommittee to support this level of funding for fiscal 
year 2008. The Water Authority appreciates your assistance in securing 
adequate funding for this vital water resource.
                                 ______
                                 

              Prepared Statement of the Mni Wiconi Project

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

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

Construction Funds
    Construction funds would be utilized as follows:

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

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

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

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

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

                                 ______
                                 

              Prepared Statement of the Mni Wiconi Project

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

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

    Employment and earnings among the Lakota people of the Project area 
are expected to positively impact the high costs of health-care borne 
by the United States and the Tribes. Our data suggest clear 
relationships between income levels and Federal costs for heart 
disease, cancer and diabetes. During the life of the Mni Wiconi 
Project, mortality rates among the Lakota people in the Project area 
for the three diseases mentioned will cost the United States and the 
Tribes more than $1 billion beyond the level incurred for these 
diseases among comparable populations in the non-Lakota community 
within the Project area.
    While this Project alone will not raise income levels to a point 
where the excessive rates of heart disease, cancer and diabetes are 
significantly diminished, the employment and earnings stemming from the 
Project will, nevertheless, reduce mortality rates and costs of these 
diseases. Please note that between 1990 and 2000 per capita income on 
Pine Ridge increased from $3,591 to $6,143, and median household income 
increased from $11,260 to $20,569, due in large part to this Project, 
albeit not sufficient to bring a larger percentage of families out of 
poverty (Table 1).
    Financial support for the Lakota membership has already been 
subjected to drastic cuts in funding programs through the Indian Health 
Service and the Bureau of Indian Affairs. This Project is a source of 
strong hope that helps off-set the loss of employment and income in 
other programs and provide for an improvement in health and welfare. 
Tribal leaders have seen that Welfare Reform legislation and other 
budget cuts nation-wide have created a crisis for tribal government 
because tribal members have moved back to the reservations in order to 
survive.
    The Mni Wiconi Project Act (Public Law 100-516, as amended) 
provides that the United States will work with us:
  --the United States has a trust responsibility to ensure that 
        adequate and safe water supplies are available to meet the 
        economic, environmental, water supply and public health needs 
        of the Pine Ridge, Rosebud and Lower Brule Indian Reservations 
        . . . 
    Lakota support for this project from the Oglala, Rosebud and Lower 
Brule Sioux Tribes has not come easily because the historical 
experience of broken commitments to the Lakota people by the Federal 
Government is difficult to overcome. The argument was that there is no 
reason to trust the Federal Government and that the respective Sioux 
Tribal Governments are being used to build the non-Lakota segments of 
the project and the Lakota segments would linger to completion. These 
arguments have been overcome by better planning, an amended 
authorization and hard fought agreements among the parties. The 
subcommittee is respectfully requested to take the steps necessary to 
complete the critical elements of the Project proposed for fiscal year 
2008.
                                 ______
                                 
     Prepared Statement of the Colorado River Commission of Nevada
    As a Nevada representative of the Colorado River Basin Salinity 
Control Forum, the Colorado River Commission of Nevada (CRC) supports 
funding the fiscal year 2008 budget request for $17,500,000 for the 
Bureau of Reclamation's Colorado River Basin Salinity Control Program. 
The CRC urges the Congress to appropriate funds requested by the 
Administration to continue to maintain and operate salinity control 
facilities as they are completed and placed into long-term operations. 
Reclamation has completed the Paradox Valley unit which involves the 
collection of brines in the Paradox Valley of Colorado and the 
injection of those brines into a deep aquifer through an injection 
well. The continued operation of this project and the Grand Valley Unit 
will be funded primarily through the Facility Operations activity. The 
CRC also supports funding to allow for continued general investigation 
of the Salinity Control Program as requested by the Administration for 
the Colorado River Water Quality Improvement Program.
    Salinity remains one of the major problems in the Colorado River. 
Congress has recognized the need to confront this problem with its 
passage of Public Law 93-320 and Public Law 98-569. Your support of the 
Forum's current funding recommendations in support of the Colorado 
River Basin Salinity Control Program is essential to move the program 
forward so that the congressionally directed salinity objectives 
embodied in Public Law 93-320 and Public Law 98-569 are achieved.
                                 ______
                                 
  Prepared Statement of the Western Coaltion of Arid States (WESTCAS)
    The Western Coalition of Arid States (WESTCAS) would like to submit 
the following statement concerning the fiscal year 2008 Budget Request 
for the Department of the Interior's Bureau of Reclamation. My name is 
Larry Libeu and I am the President of the organization.
    WESTCAS is a coalition of approximately 125 water and wastewater 
agencies, cities and towns, and professional associated focused on 
water quality and quantity issues in the States of Arizona, California, 
Colorado, Idaho, Nevada, New Mexico, Oregon and Texas.
    The Bureau's overall Budget for fiscal year 2008 is $958.4 million. 
The portion of the Budget that WESTCAS has interest in, the Water and 
Related Resources Account has $816.1 million dollars, which represents 
a decrease of $17,227,000 from fiscal year 2007. It is within this 
account that Water Reclamation/Reuse Title XVI is funded. The proposed 
funding level for fiscal year 2008 is $10.1 million. The Title XVI 
program was authorized by Public Law 102-575. This program provides a 
central focus for Reclamation's efforts and expertise in planning, 
environmental review and construction of new projects.
    The Title XVI water recycling program within the BOR provides a 
excellent cost-share mechanism for helping to drought proof the West. 
Projects developed by this program allow agencies to reduce their 
dependence on the scarce imported supplies from the Colorado River and 
other western watersheds. WESTCAS believes that increased funding for 
the program is needed to begin reducing the ever increasing backlog of 
authorized, but unfunded projects as well as assist in addressing the 
serious drought conditions throughout Reclamation states. We believe 
that funding this at least at the level of $50 million a year is 
necessary to clear the approximate backlog of $350 million for this 
program.
    We have two caveats in this regard. We believe the Committee should 
provide directive language to the Bureau of Reclamation to convene a 
meeting of all of the project sponsors for authorized projects in this 
program, ask them to bring their construction schedules and financing 
information so a 5 year schedule for completion can be worked out 
consistent with increased levels of funding for the program. We would 
be pleased to lend our expertise and experience to such a meeting. We 
further believe, and we are just as disappointed as the Committee, that 
the Bureau should have already produced an overall 5 year funding 
program consistent with the directive in last years Committee report.
    Our second caveat is for the Appropriations Committee to have a 
dialogue with the authorizing Committees regarding this program 
indicating that any new project for the Title 16 program will not be 
funded until after the backlog of all ready authorized projects is 
complete. Further, in order to receive funding, the priority should be 
set by those projects that are consistent with the individual State's 
Water Plan, and recommended and supported by that State's Governor and 
shall not have elements funded by other Federal agency programs. 
Priority shall be placed on cost effectiveness of the water and 
technology being developed and how the project fits into the 
comprehensive water plan for the area.
    Another program that WESTCAS would recommend increased funding is 
the Colorado River Salinity Control Program, Title II. Increased 
agricultural use and drainage as well as continued degradation caused 
by natural elements such as shale and return flows from urban centers 
are creating an increased salinity content to the waters of the 
Colorado River. WESTCAS firmly believes that this element of the 
Bureau's budget should be funded at the $26 million level. This would 
represent an increase of $13 million over the proposed fiscal year 2008 
budget amount.
    WESTCAS supports increased funding for the CAL-FED program. The 
fiscal year 2008 budget indicates a decrease from prior years. WESTCAS 
strongly recommends that this item in the Bureau's budget be increased 
to $40.52 million. The current proposed budget has funding set at 
$31.75 million. WESTCAS would recommend the following adjustments in 
the BOR CAL-FED funding proposal: Los Vaqueros Storage Study, +$3.27 
million, Lower San Joaquin River Fish Screen Projects, +$3.50 million, 
Refuge Water Supply Diversification, +$.50 million, Environmental Water 
Account +$3.0 million, and Administration -$1.50 million. With these 
adjustments the new budget amount would be $40.52 million.
    WESTCAS also would recommend increased funding for the Middle Rio 
Grande Project to $24 million and the Lower Colorado River Operations 
Program to $17 million.
    We would like to be able to support funding for the Bureau's Water 
2025 program, but absent authorization we withhold our support at this 
time. We do believe greater integrated resource planning and water 
resource planning is need for the West. We would hope the Committee 
would consider using the information that is being developed by the 
Western States Water Council report in this area as a tool for 
evaluation future budget requests.
    We also believe the Bureau of Reclamation should be doing more with 
regard to drought preparedness. The title XVI program is important in 
this regard, but it is not intended to be used throughout the West. 
Relying on an ``emergency'' approach to drought is not an effective way 
to address this issue. There are emergencies associated with drought, 
but better planning and an ongoing well funded program in each of the 
states is needed. We recommend at least $1 million per state to address 
this ongoing issue.
    We believe that overall a $150 million increase for the Bureau's 
Water and Related Resources Account would be helpful in addressing the 
water resource needs of the West before water quality and quantity 
issues become a greater crisis as the infrastructure ages, the 
population grows and environmental needs continue to be addressed.
                                 ______
                                 
   Prepared Statement of the Garrison Diversion Conservancy District
    Mr. Chairman, members of the committee: My name is Dave Koland; I 
serve as the general manager of the Garrison Diversion Conservancy 
District. The mission of Garrison Diversion is to provide a reliable, 
high quality and affordable water supply to the areas of need in North 
Dakota. Over 77 percent of our state residents live within the 
boundaries of the District. I would like to comment on the impact the 
President's fiscal year 2008 budget request for the Garrison Diversion 
Unit (GDU) has on the effort to provide reliable, high quality and 
affordable water supplies to the citizens of North Dakota.
    The President's fiscal year 2008 budget request was pitifully 
inadequate in meeting the commitments the Federal Government has made 
to North Dakota. In return for accepting a permanent flood on 500,000 
acres of prime North Dakota river valley the Federal Government 
promised the State and tribes that they would be compensated as the 
dams were built. The dams were completed over 50 years ago and still we 
wait for the promised compensation. At the rate of payment the 
President's budget proposes the Federal Government will not even be 
able to stay current with the indexing applied by law on their 
commitment to North Dakota.
    The Municipal Rural & Industrial (MR&I) program was started in 1986 
after the Garrison Diversion Unit (GDU) was reformulated from a 
million-acre irrigation project into a multipurpose project with 
emphasis on the development and delivery of municipal and rural water 
supplies. The statewide MR&I program has focused on providing grant 
funds for water systems that provide water service to previously 
unserved areas of the State. The State has followed a policy of 
developing a network of regional water systems throughout the State. 
Every rural water system that has been built in North Dakota is still 
operating. They are providing safe, clean water to their members, 
paying 100 percent of the operation and maintenance costs, reducing 
their debt, putting money in reserve, complying with every State and 
Federal regulation, and doing so with a stable, affordable rate 
structure.
North Dakota's Success Story
    Rural water systems are being constructed using a unique blend of 
local expertise, state financing, rural development loans, MR&I grant 
funds to provide an affordable rate structure, and the expertise of the 
Bureau of Reclamation (BOR) to deal with design and environmental 
issues. The projects are successful because they are driven by a local 
need to solve a water quantity or quality problem. The solution to the 
local problem is devised by the community being affected by the 
problem. The early, local buy-in helps propel the project through the 
tortuous pre-construction stages.
    The MR&I program has been so successful and so important to North 
Dakota that the North Dakota Legislature loaned the program $18 million 
to help deal with the severe lag time that has developed in the Federal 
appropriations process.
    The desperate need for clean, safe water is evidenced by the 
willingness of North Dakota's rural residents to pay water rates well 
above the rates EPA considers affordable. The EPA Economic Guidance 
Workbook states that rates greater than 1.5 percent of the median 
household income (MHI) are not only unaffordable, but also ``may be 
unreasonable.''
    The average monthly cost on a rural water system for 6,000 gallons 
of water is currently $48.97. The water rates in rural North Dakota 
would soar to astronomical levels without the 75 percent grant dollars 
provided by the MR&I program. For instance, current rates would have to 
average a truly unaffordable $134.19/month or a whopping 3.8 percent of 
the MHI. Rates would have ranged as high as $190.80/month or a 
prohibitive 5.3 percent of MHI without the assistance of the MR&I 
program.
    The people waiting for water in our rural communities are willing 
to pay far more than what many consider an affordable, or even 
reasonable, price for clean, safe water. But there is a limit to how 
much they should be expected to pay.
Budget Impacts On Garrison Diversion Unit
    Let me begin by reviewing the various elements within the current 
budget request and then discuss the impacts that the current level of 
funding will have on the program.
    The President's budget request for fiscal year 2008 is $20.22 
million. This year, Garrison Diversion Conservancy District is asking 
the Congress to appropriate a total of $65 million for the GDU. 
Attachment 1 is a breakdown of the elements in Garrison Diversion's 
request. To discuss this in more detail, I must first explain that the 
GDU budget consists of several different program items. For ease of 
discussion, I would like to simplify the breakdown into three major 
categories. The first I would call the base operations portion of the 
budget request. This amount is nominally $23 million annually when you 
include underfinancing. However, as more Indian MR&I projects are 
completed, the operation and maintenance costs for these projects will 
increase and create a need that will need to be addressed.
    The second element of the budget is the MR&I program. This consists 
of both Indian and non-Indian funding. The Dakota Water Resources Act 
contains an additional $200 million authorization for each of these 
programs. It is our intent that each program reaches the conclusion of 
the funding authorization at the same time. We believe this is only 
fair.
    The MR&I program consists of a number of projects that are 
independent of one another. They are generally in the $20 million 
category. Some are, of course, smaller and others somewhat larger, but 
one that is considerably larger is the Northwest Area Water Supply 
Project (NAWS). The first phase of that project is under construction. 
The optimum construction schedule for completion of the first phase has 
been determined to be 5 years. The total cost of the first phase is 
$125 million. At a 65 percent cost share, the Federal funding needed to 
support that project is $81 million. On the average, the annual funding 
needed for that project alone is over $16 million. Several other 
projects have been approved for future funding and numerous projects on 
the reservations are ready to begin construction. These requests will 
all compete with one another for funding. It will be a delicate 
challenge to balance these projects. Nevertheless, we believe that once 
a project is started, it needs to be pursued vigorously to completion. 
If it is not, we simply run the cost up and increase the risk of 
incompatibility among the working parts.
    An example of the former would be the certain impact of the 
increased cost of construction over time through inflation but also by 
protracting the engineering and administration costs.
    The third element of the budget is the Red River Valley Water 
Supply Project (RRVWSP) construction phase. The Dakota Water Resources 
Act authorized $200 million for the construction of facilities to meet 
the water quality and quantity needs of the Red River Valley 
communities. Over 42 percent of North Dakota's citizens rely on the 
drought-prone Red River of the North as their primary or sole source of 
water. It is my belief that the final plans and authorizations, if 
necessary, should be expected in approximately 3 years. This will 
create an immediate need for greater construction funding.
    This major project, once started, should also be pursued vigorously 
to completion. The reasons are the same as for the NAWS project and 
relate to good engineering and construction management. Although 
difficult to predict at this time, it is reasonable to plan that the 
RRVWSP features, once started, should be completed in approximately 3 
years. This creates the need for additional funding of $30 million/year 
starting in fiscal year 2009.
    Using these two projects as examples frames the argument for a 
steadily increasing budget. There is a need to accelerate the MR&I 
program now to assure the timely completion of the NAWS project and 
then to accommodate the need for additional construction funds when the 
RRVWSP construction is underway.
    It is simply good management to blend these needs to avoid drastic 
hills and valleys in the budget requests. By accelerating the 
construction of NAWS and other projects which are ready for 
construction during the next few years, some of the pressure will be 
off when the RRVWSP construction funding is needed. A smoother, more 
efficient construction funding program over time will be the result.
    Attachment 2 shows such a program. It begins with a $65 million 
budget this year and gradually builds over time to over $140 million 
when the RRVWSP construction could be in full swing (fiscal year 2010). 
Mr. Chairman, this is why we believe it is important that the budget 
resolution recognize that a robust increase in the budget allocation is 
needed for the Bureau of Reclamation. We hope this testimony will serve 
as at least one example of why we fully support the efforts to increase 
the overall allocation in the Bureau of Reclamation Water and Related 
Resources Account in fiscal year 2008 to a total of $1 billion.
    The Bureau of Reclamation, Rural Development, Garrison Diversion 
Conservancy District, North Dakota State Water Commission and local 
rural water districts have formed a formidable alliance to deal with 
the lack of a high quality, reliable water source throughout much of 
North Dakota. This cost-effective partnership of local control, state-
wide guidance and Federal support has provided safe, clean, potable 
water to hundreds of communities and thousands of homes across North 
Dakota.
   attachment 1--garrison diversion unit (gdu) justification for $65 
                 million appropriation fiscal year 2008
    North Dakota's Municipal, Rural and Industrial (MR&I) water supply 
program funds construction projects state-wide under the joint 
administration of the Garrison Diversion Conservancy District (GDCD) 
and the State Water Commission (SWC).
    Northwest Area Water Supply Project (NAWS) is under construction 
after 16 years of study and diplomatic delay. Construction costs 
(Federal) are estimated to be $81 million. Designs are based on a 5-
year construction period; thus, over $16 million is needed for NAWS 
alone.
    Indian MR&I programs on four reservations are also under 
construction. Tribal and State leaders have agreed to split the Indian 
and non-Indian MR&I allocation on a 50/50 basis.
    The SWC has advanced the MR&I program $18 million to allow 
construction to continue on several critical projects. One project is 
the $22 million Williston Water Treatment Plant upgrade.

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

                                                          
                                                          
                                 ______
                                 
      Prepared Statements of the Santa Clara Valley Water District
statement of support--san jose area water reclamation and reuse program 
                  (south bay water recycling program)
    Background.--The San Jose Area Water Reclamation and Reuse Program, 
also known as the South Bay Water Recycling Program, will allow the 
city of San Jose and its tributary agencies of the San Jose/Santa Clara 
Water Pollution Control Plant to protect endangered species habitat, 
meet receiving water quality standards, supplement Santa Clara County 
water supplies, and comply with a mandate from the U.S. Environmental 
Protection Agency and the California Water Resources Control Board to 
reduce wastewater discharges into San Francisco Bay.
    The Santa Clara Valley Water District (District) collaborated with 
the city of San Jose to build the first phase of the recycled water 
system by providing financial support and technical assistance, as well 
as coordination with local water retailers. The design, construction, 
construction administration, and inspection of the program's 
transmission pipeline and Milpitas 1A Pipeline was performed by the 
District under contract to the city of San Jose.
    Status.--The city of San Jose is the program sponsor for Phase 1, 
consisting of almost 60 miles of transmission and distribution 
pipelines, pump stations, and reservoirs. Completed at a cost of $140 
million, Phase 1 began partial operation in October 1997. Summertime 
2004 deliveries averaged 10.6 million gallons per day of recycled 
water. The system now serves over 517 active customers and delivers 
approximately 7,200 acre-feet of recycled water per year.
    Phase 2 is now underway. In June 2001, San Jose approved an $82.5 
million expansion of the program. The expansion includes additional 
pipeline extensions into the cities of Santa Clara and Milpitas, a 
major pipeline extension into Coyote Valley in south San Jose, and 
reliability improvements of added reservoirs and pump stations. The 
District and the city of San Jose executed an agreement in February 
2002 to cost share on the pipeline into Coyote Valley and discuss a 
long-term partnership agreement on the entire system. Phase 2's near-
term objective is to increase deliveries by the year 2010 to 15,000 
acre-feet per year.
    Funding.--In 1992, Public Law 102-575 authorized the Bureau of 
Reclamation to work with the city of San Jose and the District to plan, 
design, and build demonstration and permanent facilities for reclaiming 
and reusing water in the San Jose metropolitan service area. The city 
of San Jose reached an agreement with the Bureau of Reclamation to 
cover 25 percent of Phase 1's costs, or approximately $35 million; 
however, Federal appropriations have not reached the authorized amount. 
To date, the program has received $26.62 million of the $35 million 
authorization.
    Fiscal Year 2007 Funding.--No funds were appropriated in fiscal 
year 2007.
    Fiscal Year 2008 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $8.8 
million, in addition to the $200,000 in the administration's fiscal 
year 2008 budget request, for a total of $9 million to fund the 
Program's work.
 statement of support--san luis reservoir low point improvement project
    Background.--San Luis Reservoir is one of the largest reservoirs in 
California, and is the largest ``off-stream'' water storage facility in 
the world. The Reservoir has a water storage capacity of more than 2 
million acre-feet and is a key component of the water supply system 
serving the Federal Central Valley Project (CVP) and California's State 
Water Project. San Luis is used for seasonal storage of Sacramento-San 
Joaquin delta water that is delivered to the reservoir via the 
California Aqueduct and Delta-Mendota Canal. The San Luis Reservoir is 
jointly owned and operated by the U.S. Bureau of Reclamation and the 
California Department of Water Resources.
    The San Luis Reservoir provides the sole source of CVP water supply 
for the San Felipe Division contractors--Santa Clara Valley Water 
District (District), San Benito County Water District and, in the 
future, Pajaro Valley Water Management Agency. When water levels in San 
Luis Reservoir are drawn down in the spring and summer, high water 
temperatures result in algae blooms at the reservoir's water surface. 
This condition degrades water quality, making the water difficult or 
impractical to treat and can preclude deliveries of water from San Luis 
Reservoir to San Felipe Division contractors. In order to avoid the 
``low point'' problem, the reservoir has been operated to maintain 
water levels above the critical low elevation--the ``low point''--
resulting in approximately 200,000 acre-feet of undelivered water to 
south of the Delta State and Federal water users
    Project Goals and Status.--The goal of the project is to increase 
the operational flexibility of storage in San Luis Reservoir and ensure 
a high quality, reliable water supply for San Felipe Division 
contractors. The specific project objectives are to: (1) Avoid supply 
interruptions when water is needed by increasing the certainty of 
meeting the requested delivery schedule throughout the year to south of 
Delta contractors dependent on San Luis Reservoir; (2) Increase the 
reliability and quantity of yearly allocations to south of Delta 
contactors dependent on San Luis Reservoir; (3) Announce higher 
allocations earlier in the season to south of Delta contractors 
dependent on San Luis Reservoir without sacrificing accuracy of the 
allocation forecasts. In addition to the above objectives, identify 
opportunities to provide for ecosystem restoration.
    Preliminary studies by the District have identified six potential 
alternatives to solve the problem. More funding is needed to fully 
explore these alternatives.
    The passage of H.R. 2828 in 2004 reauthorized Federal participation 
in the CALFED Bay-Delta Program. The San Luis Reservoir Low Point 
Improvement Project was one of six new projects, studies or water 
management actions authorized in the bill to receive a share of up to 
$184 million authorized under the conveyance section of the bill.
    Fiscal Year 2007 Funding.--$1.485 million was appropriated in the 
fiscal year 2007 under the CALFED appropriation.
    Fiscal Year 2008 Funding Recommendation.--It is requested that the 
congressional committee support the administration's fiscal year 2008 
budget request of $1.4 million for the San Luis Reservoir Low Point 
Improvement Project. The San Luis request is included in the $50 
million CALFED Bay-Delta appropriation request.
             statement of support--calfed bay-delta program
    Background.--In an average year, half of Santa Clara County's water 
supply is imported from the San Francisco Bay/Sacramento-San Joaquin 
Delta estuary (Bay Delta) watersheds through three water projects: The 
State Water Project, the Federal Central Valley Project, and San 
Francisco's Hetch Hetchy Project. In conjunction with locally developed 
water, this water supply supports more than 1.7 million residents in 
Santa Clara County and the most important high-tech center in the 
world. In average to wet years, there is enough water to meet the 
county's long term needs. In dry years, however, the county could face 
a water supply shortage of as much as 100,000 acre feet per year, or 
roughly 20 percent of the expected demand. In addition to shortages due 
to hydrologic variations, the county's imported supplies have been 
reduced due to regulatory restrictions placed on the operation of the 
State and Federal water projects.
    There are also water quality problems associated with using Bay 
Delta water as a drinking water supply. Organic materials and 
pollutants discharged into the Delta, together with salt water mixing 
in from San Francisco Bay, have the potential to create disinfection by 
products that are carcinogenic and pose reproductive health concerns.
    Santa Clara County's imported supplies are also vulnerable to 
extended outages due to catastrophic failures such as major earthquakes 
and flooding.
    Project Synopsis.--The CALFED Bay Delta Program is an 
unprecedented, cooperative effort among Federal, State, and local 
agencies to restore the Bay Delta. With input from urban, agricultural, 
environmental, fishing, and business interests, and the general public, 
CALFED has developed a comprehensive, long term plan to address 
ecosystem and water management issues in the Bay Delta.
    Restoring the Bay Delta ecosystem is important not only because of 
its significance as an environmental resource, but also because failing 
to do so will stall efforts to improve water supply reliability and 
water quality for millions of Californians and the State's trillion 
dollar economy and job base.
    The passage of HR 2828 (Public Law 108-361) in 2004 reauthorized 
Federal participation in the CALFED Bay-Delta Program and provided $389 
million in new and expanded funding authority for selected projects, 
including the San Luis Reservoir Low Point Improvement Project. The San 
Luis Project is one of six new projects, studies or water management 
actions authorized to receive a share of up to $184 million under the 
conveyance section of the bill. It is critical that Federal funding be 
provided to implement the actions authorized in the bill in the coming 
years.
    Fiscal Year 2007 Funding.--$33.6 million was appropriated for 
CALFED activities in fiscal year 2007.
    Fiscal Year 2008 Funding Recommendation.--It is requested that the 
committee support an appropriation add-on of $18.2 million, in addition 
to the $31.8 million in the administration's fiscal year 2008 budget 
request, for a total of $50 million for California Bay-Delta 
Restoration.
                                 ______
                                 
 Prepared Statement of the Confederated Tribes of the Umatilla Indian 
                              Reservation
    Honorable Chairman Byron Dorgan and members of the committee: We 
respectfully request fiscal year 2008 appropriation of funds for two 
priority watershed restoration and agricultural water supply protection 
projects in Oregon and Washington, the Umatilla Basin Water Supply 
Project (previously funded under the Umatilla Basin Project Phase III, 
OR) and the Walla Walla General Investigation Stream Flow Restoration 
Feasibility Study (previously funded under the Walla Walla River 
Watershed, OR & WA).
  --For the Umatilla Basin Water Supply Project, Oregon, we request an 
        appropriation of $1 million in the Bureau of Reclamation, 
        Pacific Northwest Region, Water and Related Resources budget. 
        This request will build upon the $450,000 committed by the 
        Bureau of Reclamation to the Project in fiscal year 2007.
  --For the Walla Walla River Watershed, Oregon and Washington, we 
        request an appropriation of $100,000 in the U.S. Army Corps of 
        Engineers, Portland Division, Walla Walla District, General 
        Investigations budget--to initiate Pre-engineering and Design 
        (PED) phase after fiscal year 2008 completion of Feasibility 
        Study. This project is also known as Walla Walla River Basin 
        Feasibility Report/Environmental Impact Statement.
    Both the Umatilla Basin Water Supply Project and the Walla Walla 
General Investigation Stream Flow Restoration Feasibility Study are 
ongoing projects and have had administration and/or congressional line 
item funding in past fiscal years.
Umatilla River Basin, Oregon Water Supply Project
    By letter dated March 19, 2007, the Office of the Secretary of 
Interior responded favorably to the formal requests of the Washington 
and Oregon delegations and of the Confederated Umatilla Tribes, 
Westland Irrigation District and Governor Theodore Kulongoski to 
initiate Umatilla Basin water development projects and concurrent 
settlement of the Tribe's reserved water rights. Counselor to the 
Secretary, L. Michael Bogert, wrote ``I will ask the Secretary's Indian 
Water Rights Office to appoint an Assessment Team . . .'' and ``I will 
also ask the Bureau of Reclamation to move forward with a concurrent 
appraisal level study of water supply options, including a full Phase 
III exchange . . . to help resolve the Tribe's water rights claims.''
    The Bureau of Reclamation, subsequent to issuance of the March 19 
letter from Counselor Bogert, has committed $450,000 to fiscal year 
2007 work on the Umatilla Basin water supply appraisal study.
    The Umatilla Basin Water Supply Project is authorized by the 
Reclamation Feasibility Studies Act of 1966, 80 Stat. 707, Public Law 
89-561, (Sept. 7, 1966).
    The fiscal year 2008 request of $1 million to the U.S. Bureau of 
Reclamation will follow-up the $450,000 fiscal year 2007 work and 
should complete the majority of the estimated 2 year appraisal level 
study. It is anticipated that the full appraisal study project will be 
completed in 2009 in order to inform the concurrent Interior Department 
Indian Water Rights Assessment Team's work products. In 2009, Interior 
should have a clear project or suite of projects necessary to satisfy 
water rights of the Confederated Umatilla Tribes on the Umatilla Indian 
Reservation and in the Umatilla River.
    This fiscal year 2008 request follows on the work of the Bureau of 
Reclamation, authorized by the Umatilla Basin Project Act of 1988 (100 
Public Law 557; 102 Stat. 2782 Title II), to construct and operate the 
Phase I Exchange with West Extension Irrigation District and the Phase 
II Exchange with Hermiston and Stanfield Irrigation Districts. Heralded 
as one of the most successful stream flow restoration and salmon 
recovery projects in the Columbia River Basin, the Umatilla Basin 
Project resulted in partially restored stream flows in the Umatilla 
River and successful reintroduction of spring Chinook, fall Chinook and 
Coho salmon. After nearly a century of dry river bed in summer months 
and extinction of all salmon stocks, there has been an Indian and non-
Indian salmon fishery nearly every year in the Umatilla River since the 
project was completed in the mid-1990s.
    Completion of the Water Supply Study and the concurrent Tribal 
Water Rights Assessment is supported and endorsed by the Honorable 
Governor Ted Kulongoski and by local irrigation districts including 
specifically Westland Irrigation District, the Umatilla County 
Commission, and local municipalities including specifically the City of 
Irrigon.
Walla Walla Basin, Oregon and Washington, GI Feasibility Study
    In its sixth and final full year prior to completion, the U.S. Army 
Corps of Engineers' feasibility study will select the project necessary 
to restore stream flows in the Walla Walla River. Drained nearly dry 
during summer months by irrigation in Oregon and Washington, the Walla 
Walla River is within the aboriginal lands of the Confederated Umatilla 
Tribes and the complete loss of salmon violates the agreement by the 
United States in the Treaty of 1855 to protect these fish.
    Approximately $3 million of Federal funds have either been budgeted 
or appropriated through fiscal year 2007 (this includes a estimate of 
$797,000 for fiscal year 2007 based upon recent communication with 
Corps of Engineers). As a result of the allocation of $797,000 in 
fiscal year 2007, the Corps will finish the Feasibility Study in 2008 
without additional appropriations and CTUIR's request for $100,000 will 
enable the initiation of the next PED phase.
    The Feasibility Study Project is authorized by the Senate Committee 
on Public Works July 27, 1962 (Columbia River and Tributaries), 87th 
Congress, House Document #403 and initiated as a result of a positive 
Reconnaissance Report for the Walla Walla River Watershed (1997) under 
a General Investigation study.
    The Confederated Tribes of the Umatilla Indian Reservation is the 
formal sponsor of the Corps of Engineers Feasibility Study and has 
provided over $3.1 million in in-kind contributions. Additionally, the 
State of Washington Department of Ecology has provided $400,000 to the 
Feasibility Study.
    Support for the completion of the Feasibility Study and moving to 
construction of the project is strong and diverse and includes the 
Honorable Governor of Washington Christine Gregoire, the Honorable 
Governor of Oregon Ted Kulongoski, the Walla Walla Watershed Alliance, 
the Walla Walla Basin Watershed Council, basin irrigation districts, 
local State legislators and many local and regional advocacy groups.
    In closing, the CTUIR appreciates the opportunity to provide this 
testimony in support of adding funds for the ongoing projects Umatilla 
River Basin Water Supply Project, Bureau of Reclamation, and for the 
Army Corps of Engineers Walla Walla River Basin Watershed Restoration 
Feasibility Study. Both projects are critically important to protecting 
existing agricultural economies, completing future water supply 
development and concurrently restoring stream flows and recovering 
threatened salmon and other Columbia River Basin fish stocks.
                                 ______
                                 
       Prepared Statement of the Oregon Water Resources Congress
    I am Anita Winkler, Executive Director, Oregon Water Resources 
Congress. This testimony is submitted to the United States Senate 
Appropriations Committee, Energy and Water Development Subcommittee, 
regarding the fiscal year 2008 Budget for the Bureau of Reclamation and 
Oregon Projects. The Oregon Water Resources Congress (OWRC) was 
established in 1912 as a trade association to support member needs to 
protect water rights and encourage conservation and water management 
statewide. OWRC represents non-potable agriculture water suppliers in 
Oregon, primarily irrigation districts, as well as member ports, other 
special districts and local governments. The association represents the 
entities that operate water management systems, including water supply 
reservoirs, canals, pipeline and hydropower production.
                         bureau of reclamation
    OWRC continues to support an increase in funding for the Bureau of 
Reclamation's Water and Related Resources program above the 
administration's proposed fiscal year 2008 budget request for the 
Bureau of Reclamation's programs west-wide. The administration's 
current budget proposal is approximately $150 million less than what we 
in the water community feel is necessary to carryout an effective 21st 
Century water program for the West.
Water 2025
    As our membership works to meet water-related challenges, we have 
found the Water 2025 program of the Bureau beneficial in providing the 
extra financial assistance necessary for the proper planning and 
actions to help prevent future crisis.
    OWRC supports the $11 million fiscal year 2008 budget request for 
the Water 2025 program. Funding this program will support our member 
districts' efforts to improve water delivery systems, conserve water, 
and implement innovative projects to meet the water needs in our State.
    With many Western States confronting significant budget deficits, 
increased emphasis is being placed on targeted Federal aid. In 
addition, we continue to be confronted by looming shortages associated 
with the on going drought in the West. While we appreciate the 
administration's request for $11 million for the Water 2025 program, we 
believe this seriously under represents the need for this program and 
the financial assistance in provides Western States to address water 
supply needs. We support a larger appropriation for the program once it 
is reauthorized and will provide a recommended dollar amount at that 
time.
                              oregon needs
    We are concerned with the overall reduction in the fiscal year 2008 
request for Oregon projects in the Bureau of Reclamation's fiscal year 
2008 budget compared to the fiscal year 2007 request. With the 
exception of the Crooked River Project and the Savage Rapids Dam 
Removal, every project is down in requested dollars. Given the aging 
infrastructure, the surging population and environmental requirements 
we feel this is shortsighted given the needs in the State. We recognize 
that the Rural Water Supply Act passed in the last Congress instituting 
a new loan guarantee program for the Bureau of Reclamation. We believe 
this may prove to be an important new tool in the Reclamation Tool Box. 
However, it should not be viewed as a substitute for a robust Water And 
Related Resources Budget.
    We are disappointed that Reclamation has not come forward with 
their 5-year budgeting plan as requested by the committee, This 
absence, coupled with not having the spending plan for the fiscal year 
2007 funding provided make it difficult to provide more thorough 
judgments and recommendations on the fiscal year 2008 budget request
Conservation Implementation
    The largest need for funding for OWRC's members is to implement 
water conservation projects. Irrigation districts in Oregon continue to 
line and pipe open waterways to enhance both water supply and water 
quality. But the ability to continue this work depends on some public 
investment in return for the public benefits. Districts have conserved 
water and provided some of the saved or conserved water to benefit the 
fishery in-stream while also building reservoir supplies.
    While some of these districts will continue to benefit from the 
funding requested in the fiscal year 2008 Bureau budget request, others 
are going through a reauthorization process or new authorizations for 
projects in their districts that will continue this conservation ethic.
Rogue River Basin
    Medford Irrigation District
    Rogue River Valley Irrigation District
    Talent Irrigation District
    Grants Pass Irrigation District
    Three contiguous districts in the Rogue Project (Medford, Rogue 
River and Talent irrigation districts) are members of OWRC. We support 
their ongoing program request in this area.
    The Grants Pass Irrigation District (GPID) continues to address the 
eventual removal of the Savage Rapids Dam. The $15 million in the 
fiscal year 2008 budget is an important continuation of the effort to 
address the agreements made in this area. OWRC supports the GPID 
request.
Deschutes Basin
    Tumalo Irrigation District
    Deschutes Resource Conservancy
    Ochoco Irrigation District
    The Tumalo Irrigation District and the Deschutes Resource 
Conservancy are currently working on new program and project 
authorizations. We appreciated the committee efforts to add $1 million 
in last years appropriation bill for the DRC.
    The Ochoco Irrigation District (Prineville, Oregon) has worked with 
the Bureau of Reclamation, along with the North Unit Irrigation 
District (Madras, Oregon) for the better part of a decade to determine 
the use of unallocated water in the district's reservoir. It is 
important that this type of approach continues to address the needs in 
these areas.
Umatilla/Columbia Basins
    Stanfield Irrigation District
    Westland Irrigation District
    Hermiston Irrigation District
    West Extension Irrigation District
    East Valley Water District
    East Fork Irrigation District
    The Umatilla districts draw their water supply from the Umatilla 
and Columbia Rivers. The districts have been in the process of 
completing boundary changes and seeking supplemental contracts as part 
of the conclusion of the boundary process. This process has taken 
nearly a decade. The districts recognize the need to move forward with 
Phase III of the project and support the $374,000 in the fiscal year 
2008 Budget for project conservation assistance and water quality 
improvements.
Eastern Basins
    Burnt, Malheur, Owyhee and Powder River Basins Water Optimization 
Study.
     The irrigation districts in these basins continue to seek support 
for this optimization study to seek alternatives for more effective 
water management through conservation projects and enhancement of water 
supply. This project has been identified by the Bureau of Reclamation 
as a regional need.
    OWRC supports the fiscal year 2008 Oregon Investigations program 
request that contains $810,000 to continue studies for these basins as 
well as several other basins in the State.
    In addition, we support ongoing State of Oregon efforts on Water 
Supply Investigations in the State. As districts and the State continue 
their efforts at better planning, there is a fundamental need for 
better information. This would help with assessing existing and future 
water needs in Oregon, completing a comprehensive inventory of above 
and below ground storage and quantify surplus winter water.
Klamath Basin
    The Klamath Project districts continue to require support for the 
work in their area. We appreciate the $25 million request for the 
collaborative efforts of all involved and recommend continued scrutiny 
by the committee to make sure the needs and issues of the water 
community are met in this area. We continue to encourage the 
administration and in particular, the various Department of the 
Interior agencies, to work closely with the districts in the project 
area on the overall funding and planning necessary for ongoing 
solutions.
                               conclusion
    Thank you for the opportunity to provide testimony regarding the 
fiscal year 2008 Federal Bureau of Reclamation budget. While we support 
existing proposals, we feel that given the record-setting droughts we 
have suffered in the past few years and in anticipation of another 
drought this year, we need to support an increased budget to stabilize 
the Nation's water supply for the many needs it must meet. Providing a 
stable water supply feeds the economy locally and at the national 
level. The needs in this area should not have to rely on emergency 
approaches and funding to be addressed in a timely manner. There is a 
storing need for integrated water management and systems and watershed 
approaches. An emphasis on improved intergovernmental cooperation, 
working with State, regional and local organizations can make for 
better collaborative planning models for everyone to benefit. We would 
encourage the subcommittee to request a briefing from the Western 
States Water Council on the study they have underway in this policy 
area.
                                 ______
                                 
 Prepared Statement of the Fort Peck Assiniboine and Sioux Tribes and 
                        Dry Prairie Rural Water
                         bureau of reclamation
Fiscal Year 2008 Budget Request
    The Fort Peck Assiniboine and Sioux Tribes and Dry Prairie Rural 
Water respectfully request fiscal year 2008 appropriations in the 
amount of $36,851,000 for the Bureau of Reclamation from the 
Subcommittee on Energy and Water Development. Funds will be used to 
construct critical elements of the Fort Peck Reservation Rural Water 
System, Montana, (Public Law 106-382, October 27, 2000). The amount 
requested is based on need to build critical project elements and is 
well within capability to spend the requested funds as set out below:

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

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

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

    Note that cost indexing from last year due to inflation increased 
the cost of the project from $247 million to $259 million, an increase 
of $12 million. Increases in the level of appropriations are needed to 
outpace inflation.
Proposed Activities
    Public Law 106-382 (October 27, 2000) authorized this project, 
which includes all of the Fort Peck Indian Reservation in Montana and 
the Dry Prairie portion of the project outside the Reservation.
                      fort peck indian reservation
    On the Fort Peck Indian Reservation the Tribes have used 
appropriations from previous years to construct the Missouri River raw 
water intake, a critical feature of the regional water project. The raw 
water pump station has also been constructed, and the raw water 
pipeline between the Missouri River and the water treatment plant has 
been constructed to within 2 miles of the water treatment plant. The 
sludge lagoons at the water treatment plant are completed.
    The critical Missouri River water treatment plant will begin 
construction in spring 2007 and will use $15.3 million of funds on hand 
to build the first two phases of the facility. An additional $3.5 
million in fiscal year 2008 funds is needed to Complete Phase I and an 
additional $22.475 million is needed to complete the main water 
treatment plant process building in Phase II.
    This project was delayed a year due to the reduction in level of 
appropriations in fiscal year 2007 (from $16 million in fiscal year 
2006 to $6 million in fiscal year 2007) and the uncertainty of adequate 
funding to complete the project. The project was bid in fiscal year 
2006 as a complete unit, combining Phase I and Phase II, but bidders 
increased prices significantly to reflect the uncertainty of funding to 
complete the project. The project has now been separated into the two 
phases to accommodate the funding setback, but the separation into two 
phases has increased the total cost of the facility.
    The request for fiscal year 2008 does not provide for construction 
of essential pipelines from the water treatment plant to the 
communities of Poplar and Wolf Point. These are the principal core 
pipelines that extend east and west of the water treatment plant to 
serve the Fort Peck Indian Reservation and to eventually connect to Dry 
Prairie facilities on the east and west boundaries of the Reservation. 
The funds needed for the pipeline projects to Poplar and Wolf Point are 
$11.0 and $4.0 million, respectively, in addition to the fiscal year 
2008 funding request. These care critical elements of the work plan for 
fiscal year 2009.
    The pipeline project from the water treatment plant to Poplar will 
provide a replacement water supply for the community of Poplar and a 
rural section of the Fort Peck Indian Reservation contaminated by brine 
from oil drilling operations, which is the subject of EPA orders 
against the responsible oil company. There is urgency in completing the 
pipeline to Poplar before the advancing plume of contamination reaches 
existing community wells in Poplar. Projections of the date that 
contamination will reach the Poplar community wells are variable, but 
the anxiety of the Tribes' leadership and membership can be overcome by 
completing the water treatment plant and connecting the pipeline to 
Poplar in fiscal year 2009. This is a critical time frame for the 
Tribes. The staff and members of the subcommittee are urged to review 
this matter with the Tribes and Bureau of Reclamation to clarify the 
urgency of the completing necessary project facilities and alleviating 
the threat of contamination of the public water supply for the Tribes' 
headquarters community of Poplar.
    The Tribes will also use $765,000 for an administration, operation 
and maintenance building. The Bureau of Reclamation can confirm that 
the use of funds proposed for fiscal year 2008 is well within the 
project's capability to spend.
                              dry prairie
    Dry Prairie has used previous appropriations to construct core 
pipelines and a booster pump station from the community of Culbertson 
to serve the communities of Froid and Medicine Lake. This project 
represents a significant portion of the main core pipeline for the 
eastern half of the Dry Prairie Project. Pipelines were sized to serve 
the area north of the Missouri River, south of the Canadian border and 
between the Fort Peck Indian Reservation and the North Dakota border.
    The project relies on interim water supplies. The regional water 
treatment plant will provide finished water when pipelines are 
constructed to the interconnection point for Dry Prairie between Poplar 
and Culbertson, scheduled for completion in fiscal year 2012. The 
project between Culbertson, Froid and Medicine Lake is in full 
operation and serves the last two mentioned communities.
    In fiscal year 2006 in first quarter fiscal year 2007, Dry Prairie 
built branch pipelines and connected nearly 200 rural services to the 
Culbertson to Medicine Lake pipeline in the eastern half of the Dry 
Prairie Project. Bainville, McCabe and Dane Valley residents can be 
served with the existing system capacity that is now constructed and in 
operation.
    The request for fiscal year 2008 funds of $10,107,000, supplemented 
by a non-Federal cost share of $3,192,000, will be used to begin 
construction of pipelines to rural services on the west side of the Dry 
Prairie project between the communities of St. Marie and Nashua. An 
existing water treatment plant owned by the Boeing Co., at the former 
Glasgow Air Force Base will provide an interim water supply to serve 
the west side project until the regional water treatment plant of the 
Tribes is completed and pipelines from Wolf Point to Nashua can be 
completed as scheduled in fiscal year 2012. The facilities constructed 
on the west side of the project are the same facilities required after 
connection of the regional water treatment plant. Therefore, no 
duplication of facilities or increases in costs are associated with the 
interim project.
Master Plan
    The project master plan is provided for review as an attachment. 
The request for fiscal year 2008 is shown in relation to the project 
components that remain to be completed by 2012.
Administration's Support
    The Tribes and Dry Prairie worked extremely well and closely with 
the Bureau of Reclamation prior to and following the authorization of 
this project in fiscal year 2000. The Bureau of Reclamation has heavily 
reviewed and commented on the Final Engineering Report, and all 
comments were incorporated into the report and agreement was reached on 
final presentation. OMB reviewed the Final Engineering Report prior to 
its submission to Congress in the final step of the approval process. 
The Commissioner, Regional and Area Offices of the Bureau of 
Reclamation have been consistently in full agreement with the need, 
scope, total costs, and the ability to pay analysis that supported the 
Federal and non-Federal cost shares. There have been no areas of 
disagreement or controversy in the formulation of the project.
    The Bureau of Reclamation collaborated with the Tribes and Dry 
Prairie to conduct and complete value engineering investigations of the 
Final Engineering Report (planning), the Culbertson to Medicine Lake 
pipeline (design), the Poplar to Big Muddy River pipeline (design), the 
Missouri River intake (design) and on the regional water treatment 
plant (design). Each of these considerable efforts has been directed at 
ways to save construction and future operation, maintenance and 
replacement costs as planning and design proceeded. Agreement with 
Reclamation has been reached in all value engineering sessions on steps 
to take to save Federal and non-Federal costs in the project.
    The Bureau of Reclamation conducted independent review of the final 
plans and specifications for the Missouri River raw water intake, the 
regional water treatment plant and the Culbertson to Medicine Lake 
Project. The agency participated heavily during the construction phases 
of those projects and concurred in all aspects of construction from 
bidding through the completion of construction. (The regional water 
treatment plant has not yet been constructed).
    Cooperative agreements have been developed and executed from the 
beginning phases to date between the Bureau of Reclamation and the 
Tribes and between Bureau of Reclamation and Dry Prairie. Those 
cooperative agreements carefully set out goals, standards and 
responsibilities of the parties for planning, design and construction. 
All plans and specifications are subject to levels of review by the 
Bureau of Reclamation pursuant to the cooperative agreements. The 
sponsors do not have the power to undertake activities that are not 
subject to oversight and approval by the Bureau of Reclamation. Each 
year the Tribes and Dry Prairie, in accordance with the cooperative 
agreements, develop a work plan setting out the planning, design and 
construction activities and the allocation of funding to be utilized on 
each project feature.
    Clearly, the Fort Peck Reservation Rural Water System is well 
supported by the Bureau of Reclamation. Congress authorized the project 
with a plan formulated in full cooperation and collaboration with the 
Bureau of Reclamation, and major project features are under 
construction with considerable oversight by the agency.
                                 ______
                                 

                          DEPARTMENT OF ENERGY

      Prepared Statement of the State Teachers' Retirement System
Summary
    Acting pursuant to congressional mandate, and in order to maximize 
the revenues for the Federal taxpayer from the sale of the Elk Hills 
Naval Petroleum Reserve by removing the cloud of the State of 
California's claims, the Federal Government reached a settlement with 
the State in advance of the sale. The State waived its rights to the 
Reserve in exchange for fair compensation in installments stretched out 
over an extended period of time.
    The State respectfully requests an appropriation of at least $9.7 
million in the subcommittee's bill for fiscal year 2008, in order to 
meet the Federal Government's obligations to the State under the 
Settlement Agreement.
Background
    Upon admission to the Union, States beginning with Ohio and those 
westward were granted by Congress certain sections of public land 
located within the State's borders. This was done to compensate these 
States having large amounts of public lands within their borders for 
revenues lost from the inability to tax public lands as well as to 
support public education. Two of the tracts of State school lands 
granted by Congress to California at the time of its admission to the 
Union were located in what later became the Elk Hills Naval Petroleum 
Reserve.
    The State of California applies the revenues from its State school 
lands to assist retired teachers whose pensions have been most 
seriously eroded by inflation. California teachers are ineligible for 
Social Security and often must rely on this State pension as the 
principal source of retirement income. Typically the retirees receiving 
these State school lands revenues are single women more than 75 years 
old whose relatively modest pensions have lost as much as half or more 
of their original value to inflation.
State's Claims Settled, as Congress Had Directed
    In the National Defense Authorization Act for Fiscal Year 1996 
(Public Law 104-106) that mandated the sale of the Elk Hills Reserve to 
private industry, Congress reserved 9 percent of the net sales proceeds 
in an escrow fund to provide compensation to California for its claims 
to the State school lands located in the Reserve.
    In addition, in the Act Congress directed the Secretary of Energy 
on behalf of the Federal Government to ``offer to settle all claims of 
the State of California . . . in order to provide proper compensation 
for the State's claims.'' (Public Law 104-106,  3415). The Secretary 
was required by Congress to ``base the amount of the offered settlement 
payment from the contingent fund on the fair value for the State's 
claims, including the mineral estate, not to exceed the amount reserved 
in the contingent fund.'' (Id.)
    Over the year that followed enactment of the Defense Authorization 
Act mandating the sale of Elk Hills, the Federal Government and the 
State engaged in vigorous and extended negotiations over a possible 
settlement. Finally, on October 10, 1996 a settlement was reached, and 
a written Settlement Agreement was entered into between the United 
States and the State, signed by the Secretary of Energy and the 
Governor of California, under which the State would receive 9 percent 
of the sales proceeds in annual installments over an extended period.
    The Settlement Agreement is fair to both sides, providing proper 
compensation to the State and its teachers for their State school lands 
and enabling the Federal Government to maximize the sales revenues 
realized for the Federal taxpayer by removing the threat of the State's 
claims in advance of the sale.
Federal Revenues Maximized by Removing Cloud of State's Claim in 
        Advance of the Sale
    The State entered into a binding waiver of rights against the 
purchaser in advance of the bidding for Elk Hills by private 
purchasers, thereby removing the cloud over title being offered to the 
purchaser, prohibiting the State from enjoining or otherwise 
interfering with the sale, and removing the purchaser's exposure to 
treble damages for conversion under State law. In addition, the State 
waived equitable claims to revenues from production for periods prior 
to the sale. The Reserve thereafter was sold for a winning bid of $3.53 
billion in cash, a sales price that substantially exceeded earlier 
estimates.
The Money Is There to Pay the State
    The funds necessary to compensate the State have been collected 
from the sales proceeds remitted by the private purchaser of Elk Hills 
and are now being held in the Elk Hills School Lands Fund for the 
express purpose of compensating the State. Taking into account the 1 
percent government-wide rescission in the fiscal year 2006 Defense 
Appropriations Act, the Elk Hills School Lands Fund should have a 
positive balance of at least $18.18 million.
Congress Should Appropriate $9.7 Million for the Fiscal Year 2008 
        Installment of Elk Hills Compensation
    As noted above, the State's 9 percent share of the adjusted Elk 
Hills sales price of $3.53 billion is $317.70 million. To date, 
Congress has appropriated seven installments of $36 million and one 
installment of $48 million that was reduced to $47.52 million by the 1 
percent across-the-board rescission under the fiscal year 2006 Defense 
Appropriations Act, for total appropriations to date of $299.52 million 
of Elk Hills compensation owed to the State. Accordingly, the Elk Hills 
School Lands Fund should have a positive balance of at least $18.18 
million.
    We understand that Department of Energy personnel have proffered 3 
purported grounds for suspending further payments of Elk Hills 
compensation to the State. Each of these is a ``red herring.''
    Red Herring No. 1: Finalization of respective equity shares of 
Federal Government and ChevronTexaco as selling co-owners of Elk Hills 
oil field still not completed.--The President's fiscal year 2008 budget 
request says that ``the timing and levels of any future budget request 
[for Elk Hills compensation] are dependent on the schedule and results 
of the equity finalization process'' between the Federal Government and 
ChevronTexaco to determine the relative production over the years from 
their respective tracts in the Elk Hills field (Fiscal Year 2008 Budget 
Appendix, at p. 373). But DOE already has held back $67 million, 
including $6.03 million from the State's share, to protect the Federal 
Government's interests in a ``worst case scenario'' for this equity 
process, which is in its final stages after nearly a decade. The State 
has agreed to a ``hold-back'' of that amount to protect the Federal 
Government's interest. This reduces the available balance in the Elk 
Hills School Lands Fund to $12.15 million. Remaining uncertainty in the 
equity process thus provides no basis for withholding further payment 
of the State's Elk Hills compensation.
    Red Herring No. 2: No payment can be made to the State because of 
pending litigation between ChevronTexaco and DOE.--DOE has pointed to 
pending litigation brought by ChevronTexaco against DOE in the U.S. 
Court of Federal Claims (Docket No. 04-1365C) as a reason to suspend 
further payments to the State. This litigation alleges DOE personnel 
committed misconduct in the equity finalization process by having 
improper ex parte contacts and having the same DOE staff serve as both 
advocate for DOE's position and advisor preparing the decision 
documents for the decisionmaker. However, the California State Attorney 
General has analyzed this litigation and advised that this litigation 
is a claim for money damages for DOE staff misconduct that has no 
effect on the Federal Government's equity share, and so there is no 
effect on the State's share of compensation. (See Memorandum of the 
California State Attorney General, dated May 16, 2006). Indeed, under 
the governing agreement between DOE and Chevron, Chevron had waived any 
right to contest the final equity determination in court. Hence this 
litigation provides no basis for withholding the rest of the State's 
compensation.
    Red Herring No. 3: No payment can be made to the State because the 
State's share must be reduced by the equity finalization costs and 
environmental remediation costs and the final amount of such costs is 
not yet known.--The State's share of compensation is properly reduced 
by the ``direct costs of sale'' as required by Congress. Since the sale 
took place nearly a decade ago, those costs are fixed and known. The 
State has agreed to bear its share of these sales expenses. However, 
DOE is seeking to charge against the State's share two additional 
categories of costs--costs of determining the equity ownership and 
environmental remediation--that constitute ongoing costs of operating 
the oil field, not sales expenses. The California State Attorney 
General advises that these do not properly constitute sales expenses 
chargeable against the State's share.
    More specifically, the Settlement Agreement between the Federal 
Government and the State provides that the Federal Government shall pay 
the State ``nine percent of the proceeds from the sale of the Federal 
Elk Hills Interests that remain after deducting from the sales proceeds 
the costs incurred to conduct such sale.'' This reflects the 
congressional direction that, ``In exchange for relinquishing its 
claim, the State will receive seven [nine in the final legislation] 
percent of the gross sales proceeds from the sale of the Reserve that 
remain after the direct expenses of the sale are taken into account.'' 
(House Rept. No. 104-131, Defense Authorization Act for Fiscal Year 
1996, Public Law 104-106).
    The State agrees that the $27.13 million incurred for appraisals, 
accounting expenses, reserves report, and brokers' commission are 
appropriate sales expenses. (See Letter of the California Attorney 
General to DOE, dated February 10, 2005). Accordingly, the State's 9 
percent share of these proper sales expenses reduces the available 
balance of the Elk Hills School Lands Fund by $2.44 million to $9.7 
million.
    Costs of conducting the equity adjustment are properly viewed as 
ongoing costs incurred due to the joint operation of the Elk Hills oil 
field by the Federal Government and ChevronTexaco, since the equity 
adjustment already was required under their joint operating agreement 
and related to pre-sale production revenues. Similarly, costs of 
environmental remediation of the Elk Hills field was a cost 
attributable to the prior operation of the field, which created any 
environmental problems that exist. The ongoing operational nature of 
this cost is underscored by the fact that the Federal Government is 
currently engaged in the phased environmental remediation of a Naval 
Petroleum Reserve that it is not selling--NPR-3 (Teapot Dome), as 
evidenced by its fiscal year 2006 budget request.
Conclusion
    Therefore, of the current Elk Hills School Lands Fund balance of 
$18.18 million, taking into account the ``hold-back'' for worst case 
scenario under equity finalization and deducting the appropriate direct 
costs of conducting the sale, the State respectfully requests the 
appropriation of at least $9.7 million for Elk Hills compensation in 
the subcommittee's bill for the fiscal year 2008 installment of 
compensation, in order to meet the Federal Government's obligations to 
the State under the Settlement Agreement.
                                 ______
                                 
  Prepared Statement of the Consortium for Fossil Fuel Science (CFFS)
 production of transportation fuels from coal and biomass with reduced 
                        carbon dioxide emissions
    Chairman Dorgan and members of the subcommittee: We request $3 
million in funding for a congressionally directed project in the Fuels 
Program of the Office of Fossil Energy budget to initiate a program of 
research to produce transportation fuels from coal and biomass. The 
focus of this program will be to minimize the amount of carbon dioxide 
emitted by both the fuel conversion process and by fuel utilization to 
achieve overall emissions comparable to or less than emissions 
resulting from the production and utilization of similar transportation 
fuels from petroleum.
                                overview
    Traditional petroleum fuels and vehicles will remain our dominant 
transportation mode for at least the next 20 years. The United States 
imports over 10 million barrels of oil per day at a cost exceeding $220 
billion/year, most of it from unstable regions of the world. Expert 
testimony has been presented to the Congress showing that the true cost 
of imported petroleum goes far beyond the price of a barrel of crude 
oil, with some estimates reaching to $825 billion for 2006. Increasing 
global demand, coupled with an expected peaking in the world oil 
supply, will cause shortages and markedly increased prices in the 
future, which could lead to economic recessions due to ``oil shock.''
    It is essential that we produce transportation fuels from our own 
national resources, especially focusing on our most abundant energy 
resource, coal. It is equally essential, however, that we do so without 
harming the environment. The National Research Center for Coal and 
Energy (NRCCE, West Virginia University) and the Consortium for Fossil 
Fuel Science (CFFS, University of Kentucky) have formed an integrated 
team of fuels experts from five universities (West Virginia University, 
University of Kentucky, University of Pittsburgh, University of Utah, 
and Auburn University) to conduct a basic research program focused on 
producing Fischer-Tropsch fuels using mixtures of coal and biomass as 
the feedstock. We believe that costs can be reduced, a superior 
transportation fuel can be produced, and carbon emissions can be 
minimized through such research.
    The NRCCE and the CFFS have extensive experience and broad 
expertise in research on the conversion of coal into clean liquid 
transportation fuels and the conversion of coal into hydrogen. We have 
made significant breakthroughs in such areas as: (1) catalysis of coal 
conversion reactions; (2) C1 chemistry processes (including Fischer-
Tropsch (F-T) synthesis) to produce transportation fuels from coal-
derived syngas; (3) co-processing of coal with waste materials, 
including plastic, rubber, and cellulose (biomass); (4) development of 
novel processes to produce hydrogen from fossil fuels; and, (5) 
environmental research.
    We are now proposing a research program focused on development of 
processes that use biomass as a co-feed with coal for the production of 
clean transportation fuels with reduced carbon emissions.
    The motivations for this approach include: First, co-feeding coal 
with biomass will extend the lifetime of the Nation's coal resources; 
second, we can make use of biomass wastes that are not currently 
utilized; and, third, combined coal and biomass processes have the 
potential to yield a significant net reduction in carbon dioxide 
emissions compared to coal-only processes.
    Recent studies indicate that the total carbon dioxide emissions 
from a liquid fuel produced by F-T synthesis of syngas derived from 
mixtures of coal and biomass may be reduced by as much as 60-80 percent 
relative to those from the same fuel produced from coal alone.
                          goals of the program
    The primary goal of the NRCCE-CFFS research program is to develop 
technology that will enable the United States to produce clean liquid 
transportation fuel from its largest domestic energy resource, coal, in 
a manner that is both sustainable and environmentally friendly. 
Incorporating biomass into the feedstock can help to achieve these 
objectives. A short summary of more specific goals is given below.
  --Investigate the pyrolysis and gasification of coal-biomass mixtures 
        to determine the role that hydrogen from biomass can play in 
        the production of syngas with the optimum composition for the 
        production of liquid fuels (gasoline, diesel fuel, and jet 
        fuel). Improvements in the gasification step will have a great 
        impact on the ultimate cost of the liquid fuels produced from 
        syngas derived from coal-biomass mixtures, since gasification 
        costs are 60-70 percent of the total cost.
  --Develop catalysts and thermochemical processes that will yield 
        transportation fuel products from coal-biomass mixtures with 
        properties better than those produced from petroleum, while 
        reducing the total carbon dioxide emissions from both 
        production and use of the fuels.
  --Develop computational models to simulate catalytic chemical 
        reactions by quantum mechanics, thereby reducing the need for 
        experimental testing and decreasing the cost of the on-going 
        research program.
  --Utilize systems analysis modeling to simulate plant performance and 
        cost factors in order to determine whether or not processes 
        developed in the laboratory are commercially viable.
  --Produce hydrogen and synthetic natural gas from coal-biomass 
        mixtures while reducing the carbon dioxide footprint.
  --Establish a more active collaboration with scientists at the 
        National Energy Technology Laboratory (NETL) who are focused on 
        this and related areas of research. Develop an exchange program 
        in which professors and graduate students from the five 
        participating universities conduct research at NETL and NETL 
        scientists have access to facilities and expertise available at 
        the universities.
    Legislation introduced in both houses of the 110th Congress 
includes tax credits and loan guarantees to hasten the deployment of 
plants which produce alternative fuels from coal. Widespread deployment 
of such plants will require a large number of fuel scientists and 
engineers. An ancillary benefit of our program will include educating 
the U.S.-based human resource pool needed to meet personnel demands for 
a coal-to-liquids industry.
                                summary
    We request your support for $3 million in funding for this program 
to the National Research Center for Coal and Energy (West Virginia 
University) from the Fossil Energy budget for fiscal year 2008. The 
funding will be shared with the other four CFFS universities (Kentucky, 
Pittsburgh, Auburn, and Utah) to support the first year of a proposed 
three-year research program for producing liquid transportation fuels 
from coal and biomass. The NRCCE-CFFS consortium will provide $750,000 
in cost-sharing.
    Achievement of our program goals will accelerate the development of 
a domestic industry for the production of clean liquid transportation 
fuels using our own natural resources, thereby strengthening the energy 
and economic security of our Nation. An alternative fuels industry will 
also provide many new jobs in the mining industry, fuel synthesis 
plants, and biomass processing.
    Thank you for the opportunity to offer testimony to the 
subcommittee.
                                 ______
                                 
     Prepared Statement of the Coalition of Northeastern Governors
    The Coalition of Northeastern Governors (CONEG) is pleased to 
provide this testimony to the Senate Subcommittee on Energy and Water 
Development regarding fiscal year 2008 appropriations for the Energy 
Conservation and Renewable Energy programs of the U.S. Department of 
Energy (DOE). The Governors recognize the difficult funding decisions 
which confront the subcommittee this year. We appreciate the 
subcommittee's continued support for energy efficiency, energy 
conservation, and renewable energy programs--all of which promote sound 
energy management and improve the Nation's energy security. Consistent 
with this thinking, the CONEG Governors request that funding for the 
State Energy Program be increased to $74 million, and funding for the 
Weatherization Assistance Program be provided at a level of $300 
million in fiscal year 2008. The Governors support the President's 
request to fund the Northeast Home Heating Oil Reserve at $7 million 
and the Energy Information Administration at $105 million in fiscal 
year 2008. At this time of heightened interest in expanded use of 
indigenous renewable energy resources, we request that the subcommittee 
require the Department of Energy to again provide modest funding of 
$7.5 million to continue the critical networks and market development 
work of the National Biomass Partnership (previously known as the 
Regional Biomass Energy Program).
    These very successful energy programs take on new significance as 
the Nation strives to strengthen the security and reliability of 
domestic energy supplies and to reduce dependence on foreign sources of 
energy. Energy efficiency, conservation and renewable energy, which 
offer near-term opportunities and results, are important complements to 
longer-term Federal investments in domestic production and emerging 
technologies. Federal resources for research and program implementation 
must also emphasize programs that can bring alternative energy and 
energy saving technologies quickly to the marketplace. The State Energy 
Program, the Weatherization Assistance Program, and the Regional 
Biomass Partnership provide established networks and Federal-State-
local government and private sector partnerships which can achieve 
timely energy savings and encourage renewable energy development. 
Modest Federal investment in these programs provides substantial 
energy, economic and environmental returns to the Nation, leveraging 
additional State and private sector investment, and contributing to 
sound energy management. These resources are undisputed clear winners 
when compared to conventional energy technologies.
    State Energy Program (SEP).--The State Energy Program (SEP) is the 
major State-Federal partnership program addressing energy efficiency 
and conservation in all sectors of the economy. It assists States' work 
in support of the national goals of greater energy efficiency, reduced 
energy costs, and development of alternative and renewable energy 
resources. The State Energy Program also helps States improve the 
security of the energy infrastructure and prepare for natural 
disasters. SEP programs increase the awareness of the opportunities 
available in States to improve energy efficiency, reduce energy costs, 
create jobs, and diversify energy use. Their transformative effects in 
the market have been repeatedly demonstrated and proven.
    Working with DOE, States tailor their renewable energy and energy 
efficiency programs in a way that makes the most sense for their market 
opportunities, thus maximizing the effectiveness of the program's 
resources. For example, the Northeast States have used SEP supported 
projects to provide technical assistance and financial incentives that 
have spurred building designers and owners to adopt energy-efficient 
design features in the commercial, institutional, multifamily, and 
industrial sectors. Our States have also used SEP resources in programs 
that monitor and enhance the reliability of the energy supply and 
delivery infrastructures, support the timely updating of energy 
emergency preparedness plans, and promote the use of alternative fuels 
in the transportation sector and other initiatives that will lead to a 
lowering of fuel consumption and cleaner air.
    The modest Federal funds provided to the SEP are an efficient 
Federal investment, as they are leveraged by non-federal public and 
private sources. According to the most recent data from the Department 
of Energy, for every $1 of Federal investment, $3.58 is leveraged by 
State and local governments, and private companies and results in $7.23 
in reduced energy bills. In its evaluation of the program, Oak Ridge 
National Laboratory estimated that the program results in annual cost 
savings of $256 million while providing environmental and public health 
benefits through reduced energy use and emission reductions.
    Weatherization Assistance Program (WAP).--Weatherization is taking 
on an increased importance as an immediate, effective tool to manage 
energy use, particularly at a time of high energy prices. Through a 
network of more than 900 local weatherization service providers, the 
Weatherization Assistance Program (WAP) improves the energy efficiency 
of more than 100,000 low-income dwellings a year, thereby reducing the 
home energy bills of the Nation's most vulnerable citizens. Increased 
and consistent funding is key to the effectiveness of this program that 
invests in training weatherization personnel.
    While an average household pays roughly 2.7 percent of annual 
income on home energy, low income households pay more than four times 
that amount. Some elderly recipients who live on fixed incomes pay as 
much as 35 percent of their annual incomes for energy bills. WAP 
provides immediate and lasting benefits and reduces the energy burden 
of low-income families by improving energy efficiency and permanently 
reducing home energy bills.
    Weatherization can reduce, on average, heating bills by 31 percent 
and overall energy bills by $358 per year at current prices through 
energy efficiency measures that address a home's heating and cooling 
systems, its electrical system, and electricity consuming appliances. 
In terms of energy savings, weatherization clients save $1.83 for every 
$1 of DOE investment, according to recent DOE information. 
Weatherization services can also improve the safety of a home by 
identifying carbon monoxide hazards from old boilers, furnaces and 
water heaters, and fire hazards from outdated electrical equipment and 
wiring.
    The WAP also provides numerous non-energy benefits. Oak Ridge 
National Laboratory has concluded that for every $1 of DOE investment, 
there are non-energy benefits worth $1.88, and the WAP contributes to 
more than 8,000 jobs nationwide. In addition, the decreased energy use 
resulting from weatherization measures also provides environmental 
benefits through decreased carbon dioxide emissions.
    Renewable Energy and the National Biomass Partnership.--Renewable 
energy plays a vital role in meeting the Nation's goal of reduced 
reliance on imported fossil fuels, a more balanced, diverse energy 
resource mix, and reduction of greenhouse gases. Modest but timely 
support for research and commercialization opportunities for near-term 
bioenergy technologies is a vital component in meeting that goal. Using 
government funding to support private market development and technology 
commercialization for biofuels offers one of the most promising hopes 
for reducing the Nation's energy vulnerabilities. States contribute 
significant resources to support the development of biomass fuels, 
technology, and infrastructure. However, State funds are not available 
for coordination of these activities across the Nation.
    The National Biomass Partnership (formerly known as the Regional 
Biomass Energy Program) brings together varied networks of State, 
private, and Federal bioenergy activities, and is a critical link in 
the chain of research, resource production and technology 
commercialization. The Partnership has successfully contributed to the 
adoption of State policies supportive of bioenergy resource and 
technology development, public awareness of the benefits and uses of 
bioenergy, greater leveraging of Federal funding and State resources, 
and increased intensity of biomass use. For example, according to a 
DOE-directed program review, the Northeast Regional Biomass Partnership 
(NRBP) directly influenced $24 million in biomass investments--69 
percent of the overall biomass investment made in the region in 2003. 
It helped create biomass working groups in nine northeast States, which 
along with the NRBP personnel, provided bioenergy education and 
training to nearly 3,000 people in the region--and greater 
participation in State-developed bioenergy policies and programs.
    Northeast Home Heating Oil Reserve.--The Nation's heightened 
emphasis on energy security places renewed importance on the Northeast 
Home Heating Oil Reserve. The Northeast, with its reliance upon 
imported fuels for both residential and commercial heating, is 
particularly vulnerable to the effects of supply disruptions and price 
volatility. The Northeast region of the country is literally at the end 
of the energy product pipeline. Any disruption along the delivery 
infrastructure anywhere in the country negatively affects the 
Northeast. The Reserve provides an important buffer to ensure that the 
States will have prompt access to immediate supplies in the event of a 
supply emergency.
    Energy Information Administration (EIA).--EIA provides timely, 
reliable and credible information and analysis on the energy produced, 
imported and consumed in the United States. At this time of volatile 
global energy markets and renewed focus on the safety and security of 
the Nation's energy supply, the information provided by the Energy 
Information Administration (EIA) is a vital tool in keeping energy 
markets functioning efficiently. In addition, States rely on EIA data 
as the core of their information for energy emergency planning. 
Increased funding in fiscal year 2008 will help ensure that EIA can 
continue to collect, analyze and make available this vital data.
    In conclusion, the Coalition of Northeastern Governors request that 
you provide $74 million for the State Energy Program, $300 million for 
the Weatherization Assistance Program and $7.5 million for the National 
Biomass Partnership in fiscal year 2008. These programs promote sound 
energy management by encourage development of alternative energy 
resources and helping manage the Nation's energy use. The Governors 
also request $7 million for the Northeast Home Heating Oil Reserve and 
$105 million for the Energy Information Administration in fiscal year 
2008. CONEG welcomes the opportunity to continue a dialogue on these 
important matters as Congress and the administration consider budget 
and energy project and policy initiatives.
                                 ______
                                 
                  Prepared Statement of Cummins, Inc.
    Cummins Inc. is pleased to provide the following statement for the 
record regarding fiscal year 2008 funding for programs in the 
Department of Energy's Offices of Energy Efficiency and Renewable 
Energy; Electricity Delivery and Energy Reliability; and Fossil Energy. 
Cummins Inc., headquartered in Columbus, Indiana, is a corporation of 
complementary business units that design, manufacture, distribute and 
service engines and related technologies, including fuel systems, 
controls, air handling, filtration, emission solutions and electrical 
power generation systems. The funding requests outlined below are 
critically important to Cummins' research and development efforts and 
represent a sound Federal investment towards a cleaner environment and 
improved energy efficiency for our Nation. We request that the 
committee fund the programs as identified below.
            office of energy efficiency and renewable energy
Office of FreedomCAR and Vehicle Technologies/Vehicle Technologies
    Advanced Combustion Engine R&D.--Cummins recommends an increase in 
the administration's request of $34.55 million by $15.20 million to 
bring the program total to $49.75 million in fiscal year 2008. This 
program includes two important research areas--the Heavy Truck Engine 
and the Waste Heat Recovery programs. Both of these relate to heavy 
duty diesel engines and are significantly under-funded in the 
administration's fiscal year 2008 request. Formerly separate programs, 
these research areas were folded into the umbrella Advanced Combustion 
Engine R&D program in this year's request. The Heavy Truck Engine 
portion of the administration's request was reduced to $3.2 million for 
fiscal year 2008, down from $12.2 million in fiscal year 2007 and 
fiscal year 2006. The requested increase would allow for funding for 
heavy truck engine research of $15.4 million in fiscal year 2008. The 
Waste Heat Recovery program of the administration's request was reduced 
to zero, down from $4 million in fiscal year 2007 and fiscal year 2006. 
The requested increase would allow $3 million for waste heat recovery 
research in fiscal year 2008. These programs are critically important 
to the heavy duty diesel engine industry efforts to meet stringent 
emissions requirements through better understanding of combustion 
technologies. Heavy truck engines consume nearly 25 percent of all 
surface transportation fuels used in the United States, and the Heavy 
Truck Engine program is critical to engine manufacturers' efforts to 
increase on-highway fuel efficiency while meeting EPA's near zero 2010 
emissions regulations. Significant technology hurdles remain in the 
areas of engine efficiency improvements, co-fuels development, 
aftertreatment requirements and subsystem durability, on-board 
diagnostics and fuel penalty minimization due to the use of 
aftertreatment. Hybrid technologies are also becoming attractive for 
heavy duty engine applications, warranting additional research effort. 
The Waste Heat Recovery program is critical because over 50 percent of 
fuel energy is lost in diesel engines through wasted heat in exhaust, 
lubricants and coolants. This program is focused on identifying and 
developing innovative energy recovery technologies, such as 
thermoelectric, turbo-compounding and Rankine cycle technologies. It 
seeks to improve truck energy efficiency by 10 percent through better 
waste heat recovery technologies.
Office of FreedomCAR and Vehicle Technologies/Fuel Technologies
    Non-Petroleum Based Fuels and Lubricants.--Cummins recommends an 
increase in the administration's request of $6.9 million by $3.0 
million to bring the program total to $9.9 million in fiscal year 2008. 
This program funds research to better understand renewable (such as 
biodiesel and ethanol) and synthetic fuel properties and their effect 
on engine system performance when blended with petroleum fuels. While 
biodiesel fuel blends are becoming acceptable in the marketplace, their 
effect on various engine components, including fuel systems, lubricants 
and aftertreatment systems, is unknown. Current fuel filters are less 
effective for separating emulsified water in biodiesel blends and are 
likely to cause problems in the field. The increase in funding will 
help develop efficient techniques to remove water from biodiesel fuel 
blends, better understand biodiesel fuel effects on particulate 
filters, and evaluate biodiesel and lubricant interactions.
    Advanced Petroleum Based Fuels (APBF).--Cummins recommends an 
increase in the Administration's request of $6.5 million by $1.0 
million for a program total of $7.5 million for fiscal year 2008. This 
requested increase would allow additional study of fuel properties to 
enable heavy duty diesel engines to operate in the most efficient mode 
while meeting future emissions standards. Engine companies are required 
to prove emissions compliance for over 435,000 miles of useful engine 
life. The goal of this program is to study the impacts of fuel and lube 
oil sulfur content on durability and reliability of particulate 
aftertreatment systems.
Office of FreedomCAR and Vehicle Technologies/Materials Technologies
    Propulsion Materials Technology--Heavy Vehicle Propulsion Materials 
Program.--Cummins recommends an increase in the administration's 
request of $4.8 million by $1.0 million to bring the program total to 
$5.8 million in fiscal year 2008. This program supports research and 
development of next generation materials to enable diesel engine 
efficiency improvements, improved reliability and reduced 
aftertreatment system costs. Traditional engine materials may not be 
adequate for the next generation of advanced combustion concepts, such 
as low temperature combustion (LTC). High pressure injection fuel 
systems are needed to support these combustion technologies. Smaller 
hole size and clearance in emerging fuel systems requires new material 
capabilities to remove submicron particles from the fuel. Further 
research is also needed on advanced materials to mitigate cost issues 
relating to the use of precious metals required for advanced nitrogen 
oxides (NOX) reduction technologies. Increased funding for 
the program will support studies on a range of advanced materials 
technologies, including lightweight high strength materials for engine 
components, composites, catalysts and soot oxidation, filtration media 
modeling and nano-fiber filter technologies.
Office of Hydrogen, Fuel Cells and Infrastructure Program/Hydrogen 
        Technology
    Transportation Fuel Cell Systems.--Cummins requests that the 
committee support the administration's requested amount of $8.0 million 
for fiscal year 2008. As designed, the program provides support for R&D 
and system integration of energy efficient auxiliary power unit (APU) 
technologies for mobile or off-road applications. The goal of this 
effort is the demonstration of a solid oxide fuel cell (SOFC) based APU 
for Class 7/8 on-highway diesel trucks. Reduction of diesel fuel 
consumed in the idling of large diesel trucks is widely recognized as 
an important element in reducing exhaust emissions from heavy trucks. 
It would also reduce our Nation's overall dependence on foreign sources 
of oil. It is estimated that a potential reduction of up to 800 million 
gallons of diesel fuel is possible annually if SOFC systems can be used 
to provide the heating, cooling and electrical needs of truck fleets in 
lieu of idling. In 2005, Cummins Power Generation and our partner, 
International Truck and Engine Company, conducted analysis and design 
work to accurately define the requirements for such an APU, and we 
believe the goal is achievable. Increased funding in fiscal year 2008 
would allow the demonstration of a practical SOFC prototype that is 
integrated on a typical truck platform.
         office of electricity delivery and energy reliability
Research and Development/Distributed Energy Resources
    Distributed Generation Technology Development--Advanced 
Reciprocating Engine Systems (ARES).--Cummins recommends an increase in 
the administration's request of $0 million by $1.5 million to bring the 
program total to $1.5 million in fiscal year 2008. The objective of 
this program is to develop high efficiency, low emissions and cost 
effective technologies for stationary natural gas systems between 500-
6,500 kw by the year 2010. Natural gas-fueled reciprocating engine 
power plants are preferred for reliability, low operating costs and 
point of use power generation. Technologies sponsored by the ARES 
program have demonstrated 44 percent engine efficiency (an increase 
from the 32-37 percent baseline) and higher power densities than 
current products, with an expected reduction in life cycle costs and 
carbon dioxide (CO2) emissions. Improved combustion, air 
handling and controls developments have been successfully implemented 
in a field test engine and genset. Further technical challenges include 
combustion development for system efficiency, nitrogen oxides 
(NOX) reductions, advanced sensors and controls, hardware 
durability and lower life cycle costs. The development of distributed 
power generation supports national energy security needs, improves 
protection of critical infrastructure to address homeland security 
concerns, and decreases dependence on the national electrical grid 
system through point of use energy production.
                        office of fossil energy
Office of Clean Coal and Natural Gas Power Systems/Fuel Cell Research 
        and Development
    Innovative Concepts--Solid State Energy Conversion Alliance 
(SECA).--Cummins requests that the committee support the 
administration's request of $62.0 million for fiscal year 2008. The 
goal of the SECA project is the development of a commercially viable 3-
10 kw solid oxide fuel cell (SOFC) module that can be mass-produced in 
modular form for RV, commercial mobile and telecommunications markets. 
The modular nature of SOFCs makes them adaptable to a wide variety of 
stationary and mobile applications. SOFCs can play a key role in 
securing the Nation's energy future by providing efficient, 
environmentally sound electrical energy from fossil fuels or hydrogen. 
A Cummins prototype successfully completed Phase 1 of the SECA program, 
operating for approximately 2,000 hours at Cummins Power Generation in 
Minneapolis, and meeting (pending DOE confirmation) SECA targets for 
durability and cost. Phase 2 of the program will bring a critical 
transition from current fuels used with SOFC (LPG or natural gas) to 
diesel fuel for mobile applications including RV, marine and truck 
auxiliary power units (APUs). The program is moving forward toward 
development, leading to possible commercial production in 2013. This 
program combines the efforts of the DOE national laboratories, private 
industry and universities. Federal funding is critical to support the 
research needed to keep this technology moving from the laboratory to 
commercial viability.
    Thank you for this opportunity to present our views on these 
programs which we believe are of great importance to our Nation's 
energy and economic security as well as continued environmental 
progress. These programs are critical to needed advancements in the 
transportation and power generation sectors.
                                 ______
                                 
             Prepared Statement of The University of Tulsa
    Dear Respected Members, Senate Appropriations Subcommittee on 
Energy and Water: I respectfully ask for the continuation of the 
funding of the project titled ``Development of Next Generation 
Multiphase Flow Prediction Tools'' for the fiscal year of 2008. This 
project was selected in response to DOE's Oil Exploration and 
Production solicitation DE-PS26-02NT15375-02, Public Resources Invested 
in Management and Extraction (PRIME), July 15, 2002. The project 
started on June 1, 2003 and scheduled to be completed by August 31, 
2008. The anticipated DOE contribution for 2008 is $107,940. This 
funding is significantly leveraged by The University of Tulsa ($151,355 
(58 percent of total cost)). In the rest of my testimony I would like 
to emphasize the importance and results of the project.
    The ``easy'' oil and natural gas finds are becoming a rarity as we 
depleted them posing a significant problem of energy shortage. Oil and 
gas industry, academia and government are working to improve enabling 
technology to facilitate more production from existing resources and 
exploitation of ``difficult to produce resources including ultra deep 
water resources, heavy oils, and unconventional natural gases.''
    The developments of fields in deep and ultra-deep waters (5,000 ft 
and more) are becoming more common. It is inevitable that production 
systems will operate under multiphase flow conditions (simultaneous 
flow of gas-oil-and water possibly along with sand, hydrates (ice-like 
structures, and waxes)). Recovery of resources from deep waters poses 
special challenges and requires accurate multi-phase-flow predictive 
tools for several applications, including the design and diagnostics of 
the production systems, separation of phases in horizontal wells, and 
multiphase separation. The available tools cannot properly account for 
the three-phase flow. At best, they lump oil and water phases as a 
single liquid phase, assuming homogeneous liquid flow. Therefore, the 
development of revolutionary next-generation multiphase flow predictive 
tools is needed.
    Multiphase flow prediction is essential for every phase of 
hydrocarbon recovery, from design to operation. Recovery from deep 
waters poses special challenges and requires accurate multiphase-flow 
predictive tools for several applications, including the design and 
diagnostics of production systems, separation of phases in horizontal 
wells, and multiphase separation. The overall objective of the proposed 
work is to develop new technologies that will enable future 
exploitation of hydrocarbons from deep waters through the development 
of revolutionary next-generation predictive tools for the simultaneous 
flow of gas-oil-water in pipes.
    The novel software tool developed in this project help design 
proper production and transportation systems. There are many impacts of 
the new tool being developed. For the industry, it is imperative to 
have accurate predictive tools for the production and transportation of 
hydrocarbons and associated water. The lost production from a single 
offshore pipeline due to inadequate design can cost $500,000 or more 
per day. More importantly, the lack of technology can result in overly 
conservative designs that can render some projects cost-prohibitive. 
Any technological improvement towards increases in producible reserves 
and efficient production practices, such as the novel software 
developed in this project, will realize more hydrocarbon production and 
increase U.S. employment. Moreover, the new technologies may give U.S. 
companies a technological advantage to exploit similar fields or 
technical services in other countries, creating possibly more job 
opportunities for U.S. residents. For the public at large, the 
availability of additional domestic hydrocarbon reserves will reduce 
the dependency of the United States on hydrocarbon imports, bringing 
more stability to U.S. energy markets and the U.S. economy as a whole.
    Significant progress has been made in this project. The model, 
engine of the software, has already been developed for the prediction 
of flow behavior during production and transportation of gas, oil, and 
water through wellbores and pipelines. Closure relationships describing 
the distribution between the liquid phases--namely mixing and inversion 
are proposed. Significant improvements are observed over the 
predictions by the two-phase unified models that assume a fully mixed 
liquid phase. The three-phase unified model is currently being enhanced 
by improving the closure relationships. The model is being incorporated 
in various software packages by the software companies.
    In conclusion, DOE's contribution to this project has already been 
invaluable. The results and deliverables of the project are being 
incorporated in available design software for design engineers to use. 
Moreover, two graduate students funded through the project are employed 
in oil and gas by companies operating in the United States serving the 
public through working on oil and gas development projects in the 
United States. One more year of support is needed to fully complete the 
project. We ask that the funding for this project to be continued in 
fiscal year 2008.
                                 ______
                                 
           Prepared Statement of the Gas Technology Institute
    This submittal is intended for the Senate Subcommittee on Energy 
and Water. Comments are for consideration for establishing the fiscal 
year 2008 Fossil Energy Oil and Natural Gas Program budgets. Thank you 
for the opportunity to provide the subcommittee with information for 
use during deliberations.
    Recently, a new record was established! The technically recoverable 
gas resource base in North America hit a 30-year high based on the 
latest estimate by the National Petroleum Council in their 
comprehensive Year 2003 study. Our understanding of the gas resource 
base has resulted in a five-fold increase over the last 30 years (See 
Figure No. 1).



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

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



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

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



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

    The Department of Energy Oil and Gas program is the last remaining 
organized R&D effort with a focus on our remaining domestic oil and gas 
resource base. Important projects have been developed in several 
strategic areas including:
  --Unconventional gas resources such as tight gas sands, coalbed 
        methane and gas from shales.
  --Microhole drilling for remote exploration and minimum land impact.
  --Stripper or low production oil wells.
  --Environmental issues including water produced from oil and gas 
        operations.
  --Access to Federal lands with minimum impact.
  --Technology transfer for Independent producers.
    Just when the need is greatest and at a time when research efforts 
of this type should be significantly increased in size, the 
administration has recommended that the programs be eliminated.
    I strongly believe that meeting domestic oil and gas supply has 
value to the Nation on par with all other federally supported programs, 
and that congressional and administration program and funding 
priorities should reflect that importance.
                                 ______
                                 
  Prepared Statement of the Interstate Oil and Gas Compact Commission
    Mr. Chairman and members of the Subcommittee, on behalf of the 
Interstate Oil and Gas Compact Commission (IOGCC), I am submitting this 
testimony in support of fiscal year 2008 funding for a new U.S. 
Department of Energy program that would address a serious public safety 
and environmental problem that affects all the states that historically 
drilled for oil and gas. Specifically, IOGCC is supporting a $10 
million appropriation to permanently plug abandoned and ``orphaned'' 
oil and gas wells.
    The member states of the Interstate Oil and Gas Compact Commission 
account for more than 99 percent of the oil and natural gas produced 
onshore in the United States. Formed by Governors in 1935, the IOGCC is 
a congressionally-ratified interstate compact of 30 member states. The 
mission of the IOGCC is two-fold: to conserve our nation's oil and gas 
resources and to protect human health and the environment.
    The orphan oil and gas well plugging program for states was 
authorized in Section 349(g) and (h) of the Energy Policy Act of 2005. 
For lack of congressional appropriation, the U.S. Department of Energy 
has yet to establish the program, however, the section authorizes up to 
$20 million annually in federal matching funds to states for the 
purpose of plugging abandoned wells--some of which are over a century 
old. The program matches existing state funds to speed the plugging and 
clean-up of old wells for which there is no responsible party.
    No new orphan wells can be created, since today's state regulatory 
structures, which require adequate bonding or insurance coverage, 
ensure that the costs of plugging will be covered if the responsible 
party becomes unwilling or unable to perform the task. Plugging the 
remaining orphan wells by supplementing state programs will create no 
new bureaucracy and will provide a lasting solution to the problem.
    States have taken the lead in addressing the orphan well issue, and 
thousands of sites have been reclaimed and wells permanently plugged by 
the states. All oil and gas producing states have established plugging 
funds, but they are insufficient to address a timely cleanup and 
plugging of the remaining orphan wells. It is estimated that 
approximately 60,000 orphan wells remain that have the potential to 
cause public safety or environmental harm. The requested $10 million 
appropriation to match state oil and gas plugging funds will 
permanently plug the nation's remaining orphan wells over the next 5 
years.
    The potential for groundwater contamination is the primary 
environmental concern associated with orphan wells. Unplugged wells can 
potentially serve as a conduit for the migration of fluids into a 
ground water aquifer. In some cases, fluids could flow all the way to 
the surface, potentially contaminating surface soils surrounding the 
well.
    Public safety is also in jeopardy from unplugged wells. Escaping 
methane gas from undiscovered pre-Civil War era wells can migrate to 
the surface where unsuspecting homeowners and businesses may be 
required to evacuate until the danger can be ameliorated. Similarly, 
farm equipment and equipment operators can be seriously injured by the 
unearthing of unknown oil or gas wells buried under decades of soil on 
agricultural land. States have excellent programs to find and identify 
such public safety hazards, but plugging and cleaning up the sites is 
dependent on adequate funding.
    This program is not an earmark, but rather an authorized U.S. DOE 
program. Funding of the orphan well plugging program would set in place 
an efficient and simple program to direct funding to state plugging 
efforts. The appropriation would be directed to the U.S. Department of 
Energy, which in turn would utilize the IOGCC as the fund 
administrator, as directed by the authorizing statute. IOGCC would help 
ensure that federal dollars would be dedicated to dealing with the 
wells that pose the greatest danger to public safety and the 
environment. An IOGCC Task Force has developed a prioritization 
schedule to guide the well selection process. States would match the 
federal funding, and submit a completed plugging report to the IOGCC 
for reimbursement. The long-range goal is to plug every orphan well in 
the nation that poses a threat to the environment or public safety.
    Thank you for this opportunity to submit our testimony. We urge the 
Subcommittee's favorable consideration of this request. For questions 
or further information, please feel free to contact Diane S. Shea, 
IOGCC Washington Representative, at [email protected], or 301-913-
5243.
                                 ______
                                 
       Prepared Statement of the Nuclear Waste Strategy Coalition
    Mr. Chairman and distinguished members of the Committee, the 
Nuclear Waste Strategy Coalition (NWSC or Coalition) appreciates this 
opportunity to present a Statement for the Record regarding the status 
of the fiscal year 2008 Department of Energy (DOE) Budget Request.
                             about the nwsc
    The NWSC is an ad hoc group of state utility regulators, state 
attorneys general, electric utilities and associate members 
representing 46 member organizations in 26 states. The Coalition was 
formed in 1993 out of frustration at the lack of progress DOE had made 
in developing a permanent repository for spent nuclear fuel (SNF) and 
high-level radioactive waste (HLRW), as well as Congress's failure to 
sufficiently fund the nuclear waste disposal program (Program) since 
1982. The mission and purpose of the NWSC is to achieve:
  --Removal of commercial spent nuclear fuel and high-level radioactive 
        waste from temporary civilian and decommissioned storage sites 
        located in 33 states.
  --Authorization of a temporary, centralized commercial spent nuclear 
        fuel storage facility.
  --Appropriations from the Nuclear Waste Fund (NWF) sufficient to 
        enable the DOE to fulfill its statutory and contractual 
        obligations.
  --Augmentation of transportation planning and regulations to 
        facilitate transportation systems plan.
  --Capping of the NWF fee at the present one-tenth of a cent per 
        kilowatt-hour.
  --Operation of a permanent repository at Yucca Mountain that is 
        capable of receiving waste as soon as possible upon 
        authorization by the Nuclear Regulatory Commission (NRC).
                    fiscal year 2008 appropriations
    Fiscal year 2008 is a pivotal year for the Program, and the NWSC 
strongly supports the DOE's fiscal year 2008 budget request. Congress 
has the opportunity to determine the direction of the Program by 
appropriating the full $494.5 million as requested by the DOE in its 
fiscal year 2008 budget. As stated by Mr. Ward Sproat, Director, DOE/
Office of Civilian Radioactive Waste Management (OCRWM), during his 
March 7, 2007 testimony, it is absolutely vital for Congress to fully 
fund the Program in order for the DOE to carry out the latest projected 
Best-Achievable Schedule opening date of March 2017 for the permanent 
repository that includes the filing of the license application to the 
NRC in June 2008.
    Other DOE objectives in the fiscal year 2008 request include 
certifying the licensing support network, completing the supplemental 
Yucca Mountain Environmental Impact Statement, designing the standard 
canisters to be used by the industry, performing critical personnel 
safety upgrades at the Yucca Mountain site, analyzing and reporting to 
Congress on the need for a second repository, resolving comments and 
issuing the final EIS for the Nevada rail line that is required to 
transport SNF and HLRW to the permanent repository, and funding 
independent scientific studies by the State of Nevada, Nye County, Inyo 
County, the University of Nevada and affected units of local 
government.
                           nuclear waste fund
    There are adequate funds available in the NWF to implement the 
federal policy for permanent disposal of SNF and HLRW, provided 
Congress appropriates them. Since 1983, ratepayers from 41 states have 
paid more than $28 billion, including interest, into the NWF. The NWF 
was established by the U.S. Congress for safe, timely, and cost-
effective centralized storage and the development of a permanent 
repository. The nation's ratepayers who receive electricity from 
nuclear generating utilities pay over $750 million per year into the 
NWF, and with interest credits, this amount exceeds $1.2 billion 
annually. To date, approximately $10 billion has been spent to assure 
the national repository is developed in the most responsible manner to 
protect the health, safety, and security of every American, including 
those in Nevada, as well as each of the States with a nuclear power 
plant. The Fund now holds more than $18 billion, including interest.
    Regrettably, the NWF account balance has been used to support other 
programs and camouflage the federal deficit rather than to develop the 
permanent repository. Consequently, more than 55,000 metric tons of SNF 
and HLRW are presently stranded at more than 100 sites (commercial and 
defense) in 39 states. The NWSC asks that Congress codify the NWF 
annual receipts as offsetting collections to ensure that every cent 
collected from the ratepayers will be delivered to the Program, as 
intended by the 1982 Nuclear Waste Policy Act, as amended (NWPA).
                       nuclear waste fund reform
    NWSC members believe it is vitally important that Congress ensure 
the Program is funded in a manner that will allow the DOE to implement 
the federal Program in accordance with the NWPA. The Program is already 
in default of the NWPA requirement to begin waste acceptance by 1998, 
and continues to slip further behind schedule.
    For instance, the DOE's fiscal year 2007 budget request for the 
Program was $544.5 million. However, Congress appropriated $444.5 
million, a $100 million reduction. Consequently, three dozen workers at 
the Yucca Mountain project have already lost their jobs and several 
hundred others may face layoffs in the months ahead. Such cuts will 
likely result in further setbacks to the Program schedule.
    Additionally, in March 2007 the DOE submitted to Congress the 
``OCRWM Budget Projection fiscal year 2009-fiscal year 2023 Executive 
Summary,'' that projected annual budget expenditures of integrated 
Program needs through completion of the repository surface facilities. 
The projected budget is based on funding requirements for construction 
of the repository and the transportation infrastructure needed to meet 
the Best-Achievable Schedule opening date of March 2017, assuming 
enactment of the Administration's legislative proposal the Nuclear Fuel 
Management and Disposal Act.
    To help keep the Program on track and the Best-Achievable Schedule, 
the NWSC strongly supports the Administration's proposal for reforming 
the mechanism for funding the Program. In March 2007, the 
Administration submitted to Congress a legislative proposal that, among 
other things, would provide a stable source of funding for this Program 
by reclassifying mandatory NWF receipts as discretionary, in the amount 
equal to appropriations from the NWF for the disposal program. Funding 
for the Program would still have to be requested annually by the 
President and appropriated by the Congress from the NWF.
    While not calling for carte blanche funds for the DOE without 
Program oversight, the NWSC has been very supportive of the OCRWM 
program over the years and has worked to ensure that Congress 
appropriate sufficient funds for the nuclear waste transportation and 
disposal program. We continue those efforts today as we encourage 
Congress to introduce comprehensive legislation that reforms the NWPA, 
such as the ``Nuclear Fuel Management and Disposal Act,'' proposed by 
the Administration on March 6, 2007. Congress has an opportunity to 
enhance the management and disposal of SNF and HLRW, ensure protection 
of public health and safety and the territorial integrity and security 
of the permanent repository through legislative reform. Moreover, 
reforming the annual funding for the Program, assures the 41 states' 
ratepayers that their payments into the NWF are being used for their 
intended purpose--the removal of SNF and HLRW from commercial and 
decommissioned nuclear power plants.
    Continued under-funding will have dire consequences on the 
completion of the nation's permanent repository, the transportation 
infrastructure system plans and the transportation and disposal of 
canisters. As several members of Congress have commented in the past, 
``This Program has been starved for funding''--the 2010 deadlines for 
waste fuel acceptance at Yucca Mountain was, ``a pipe dream at existing 
funding levels.'' We hope that the 2017 deadline is not another ``pipe 
dream.''
                                lawsuits
    It has been more than ten years since the DOE defaulted on its 
obligations, as stated in the Nuclear Waste Policy Act of 1982, as 
amended, to remove SNF and HLRW from the nation's nuclear power plants. 
In its 1996 Indiana-Michigan decision, the U.S. Court of Appeals 
affirmed that the DOE was obligated to start moving waste on January 
31, 1998, ``without qualifications or condition.''
    More than 60 utilities have sued the federal government for damages 
associated with DOE's default to meet its 1998 obligations. The 11th 
Circuit Court of the U.S. Court of Appeals has ruled that these damage 
payments will not come from the Nuclear Waste Fund. Meanwhile, the U.S. 
Court of Claims has awarded more than $220 million to plaintiffs so 
far. As stated in Mr. Sproat's testimony, DOE has estimated that each 
year the repository's opening is delayed beyond 2017, the U.S. 
taxpayers' potential liability to contract holders will increase by 
approximately $500 million per year. The longer Congress withholds 
adequate annual funding from DOE and declines to reform the NWPA, the 
greater the potential liability will be to the nation's taxpayers.
    If the DOE fails to meet vital Program milestones such as 
submitting the license application to the NRC, the financial liability 
the DOE faces through lawsuits will continue to mount. As the DOE 
continues to delay honoring its contracts with utilities to remove 
spent fuel from plant sites, both the amount of SNF and HLRW stored, 
and the costs associated with storing it increase. NWSC members are 
concerned about the increased costs that ratepayers must bear as a 
result of these delays.
               transportation--rigorous safety standards
    The DOE has proven that it can safely transport SNF and HLRW from 
plant sites across the nation. Since the 1960s, more than 3,000 
shipments of spent nuclear fuel from nuclear power plants, government 
research facilities, universities and industrial facilities traveling 
over 1.6 million miles, ``without a single death or injury due to the 
radioactive nature of the cargo.'' \1\ This equates to more than 70,000 
metric tons of SNF, an amount equal to what the NWPA authorizes for 
Yucca Mountain. Shipments include 719 containers from the Naval Nuclear 
Propulsion program between 1957 and 1999, and 2,426 highway shipments 
and 301 railway shipments from the U.S. nuclear industry from 1964 to 
1997. In addition, since 1996, shipments of spent nuclear fuel have 
been safely transported to the United States from 41 countries to the 
DOE facilities; \2\ again, without a single death or injury--not one. 
If a repository is licensed at Yucca Mountain, the DOE projects 
approximately 4,300 shipments over a 24-year period, averaging 175 
shipments of spent nuclear fuel per year, a relatively small amount 
compared with the approximately 300 million annual shipments of 
hazardous materials (explosives, chemicals, flammable liquids, 
corrosive materials, and other types of radioactive materials) that are 
currently transported around the country every day.
---------------------------------------------------------------------------
    \1\ National Conference of State Legislatures' Report, January 
2000.
    \2\ U.S. Department of Energy Report to the Committees on 
Appropriations, January 2001.
---------------------------------------------------------------------------
    Furthermore, the DOE has safely and successfully made more than 
5,542 transuranic waste shipments at the Waste Isolation Pilot Plant 
(WIPP) in New Mexico as of March 12, 2007.\3\ The Western Governors' 
Association (WGA) signed an agreement with the DOE in April 1996 that 
affirmed regional planning processes for safe transportation of 
radioactive material. All regional high-level radioactive waste 
transportation committees also endorsed the WGA approach. The WIPP 
transportation planning system is setting the standard for safety and 
proving to be a critical step toward solving the nation's spent nuclear 
waste disposal transportation program.
---------------------------------------------------------------------------
    \3\ U.S.DOE/Waste Isolation Pilot Plant Shipment Figures, March 
2007.
---------------------------------------------------------------------------
    To ensure safety at on-site spent fuel storage facilities and 
during transportation, the material is stored in containers that meet 
the NRC's rigorous engineering and safety standards testing. To satisfy 
the NRC's rigorous standards for subsequent transportation approval, 
these containers have been dropped 30-feet onto an unyielding surface, 
dropped 40 inches onto a 6-inch vertical steel rod, exposed for 30 
minutes to a 1,475 F fire, submerged under 3 feet of water for eight 
hours, immersed in 50 feet of water for at least eight hours (performed 
in a separate cask), and immersed in 656 feet of water for at least one 
hour.\4\
---------------------------------------------------------------------------
    \4\ Nuclear Regulatory Commission Testing Requirements, 10 CFR 
Sections, 71.61, 71.71, and 71.73.
---------------------------------------------------------------------------
                               conclusion
    The federal government's failure to deliver extends back several 
decades and the U.S. Congress must immediately address the growing need 
of disposal of SNF and HLRW. Therefore, it is vitally important that 
the leadership in Congress fully fund the nuclear waste disposal 
program for fiscal year 2008 and pass legislation that reforms Program 
funding for the continued progress of the permanent repository. While 
the Program continues to face complex challenges, passage of 
legislation will allow the Program to remain viable and afford the 
opportunity for ultimate success.
    In contrast, the NWSC does not support competing legislation that 
would have the DOE take title of SNF at plant sites. This previously 
introduced bill proposes stranding fuel indefinitely throughout the 
nation while the nation's ratepayers continue to pay in perpetuity into 
the NWF, which is not an acceptable option.
    Based on DOE reports, the NWSC understands the Global Nuclear 
Energy Partnership (GNEP) program would reduce the volume, heat and 
toxicity of byproducts placed in the permanent repository. However, 
this program does not diminish in any way the need for, or the urgency 
of, a geologic permanent repository at Yucca Mountain, particularly 
because the Navy, research and legacy fuel are not candidates for the 
recycling program.
    The DOE fiscal year 2008 budget contains $2 million for a study 
ordered by Congress to determine whether a second repository should be 
built, and where, as required under Section 161(b) of the NWPA. The DOE 
has already stated that it would start its review with the two-dozen 
candidate sites that were under consideration prior to selection of the 
Yucca Mountain site. Therefore, it is clear that all states have a 
stake in following through with the nuclear waste disposal policy that 
Congress selected when it passed the NWPA and reinforced when it voted 
in 2002 to support the President's selection of Yucca Mountain as a 
site suitable for development of the national repository.
    The members of the NWSC urge Congress to take a long-term view of 
our nation's energy needs, national security interests, and fairness to 
both ratepayers and electric utilities by appropriating full funding 
for the Program for fiscal year 2008. The Coalition members believe 
receipt of requested annual funding will make it possible for DOE to 
meet its projected schedule and eventually bring the nuclear waste 
disposal program to fruition as promised and mandated by the 1982 
Nuclear Waste Policy Act, as amended.
                                 ______
                                 
   Prepared Statement of the University Corporation for Atmospheric 
                            Research (UCAR)
    On behalf of the University Corporation for Atmospheric Research 
(UCAR) and the university community involved in weather and climate 
research and related education, training and support activities, I 
submit this written testimony for the record of the Senate Committee on 
Appropriations, Subcommittee on Energy and Water Development.
    UCAR is a 70-university member consortium that manages and operates 
the National Center for Atmospheric Research (NCAR) and additional 
programs that support and extend the country's scientific research and 
education capabilities. In addition to its member research 
universities, UCAR has formal relationships with approximately 100 
additional undergraduate and graduate schools including several 
historically black and minority-serving institutions, and 40 
international universities and laboratories. UCAR's principal support 
is from the National Science Foundation with additional support from 
other federal agencies including the Department of Energy (DOE).
DOE Office of Science
    The atmospheric and related sciences community appreciates 
Congress' continued support for the Administration's American 
Competitiveness Initiative, and its goal to double the DOE Office of 
Science budget by fiscal year 2016. We are pleased that the fiscal year 
2008 request again makes the Office of Science a high priority. The 
needs of the country demand that DOE continue to produce a world-class 
program in science and energy security research. The Office of Science 
manages fundamental research programs in basic energy sciences, 
biological and environmental sciences, and computational science, and 
supports unique and vital parts of U.S. research in climate change, 
geophysics, genomics, life sciences, and science education. Continuing 
to implement the doubling of basic research funding within DOE will 
result in educating, training and sustaining thousands in the nation's 
workforce (28,000 in fiscal year 2008) in our laboratories and 
universities.
    I urge the Subcommittee to fund the DOE Office of Science at the 
level of the President's fiscal year 2008 budget request of $4.4 
billion, and to enable the agency to apply that entire amount toward 
planned agency research priorities. As Director of the Office of 
Science Raymond Orbach recently stated, ``These are extraordinary times 
for science.'' This investment in our country's scientific leadership 
will enable many researchers to make extraordinary progress in numerous 
areas of discovery.
Biological and Environmental Research (BER)
    Within the Office of Science, the Biological and Environmental 
Research (BER) program develops the knowledge necessary to identify, 
understand, and anticipate the potential health and environmental 
consequences of energy production and use. These are issues that are 
absolutely critical to our country's well being and security, and now 
more than ever, they are being scrutinized by Members of Congress and 
the media in light of the recent Intergovernmental Panel on Climate 
Change (IPCC) report that states that warming of the climate is 
``unequivocal.'' Peer-reviewed research programs at universities, 
national laboratories, and private institutions play a critical role in 
the BER program by involving the best researchers the nation has to 
offer, and by developing the next generation of researchers. 
Approximately 27 percent of BER basic research funding supports 
university-based activities directly and 40 percent supports basic 
research at national laboratories. All BER research projects, other 
than those that have been in the ``extra projects'' category, undergo 
regular peer review and evaluation.
    The President's BER Request for fiscal year 2008 is $531.9 million, 
a 15 percent increase over the fiscal year 2007 Joint Resolution. While 
this is a substantial increase, it should be seen in the context of 
past appropriations, the President's higher fiscal year 2007 request 
for BER, and the decline of BER funding that has taken place in the 
recent past. With the elimination of congressionally directed projects, 
BER received a three percent increase in the final fiscal year 2007 
Joint Resolution. The fiscal year 2008 request, therefore, makes up 
much lost ground. I urge the Subcommittee to fund Biological and 
Environmental Research at the level of the fiscal year 2008 Budget 
Request, $531.93 million, a 4.5 percent increase over the fiscal year 
2007 Request, and to enable BER to apply that entire amount toward 
planned agency research priorities that are peer-reviewed and that 
involve the best researchers to be found within the nation's university 
research community as well as the DOE labs.
BER's Climate Change Research Program
    The International Polar Year (IPY) 2007-2008 officially began March 
1, with over 200 scientific projects planned, involving thousands of 
scientists from over 60 nations examining a wide range of physical, 
biological and social research topics. The scientific need to focus on 
the remote areas of the Earth will provide better understanding of the 
current global climate.
    DOE's IPY activities are supported by the DOE Office of Science's 
Climate Change Research Program in which research is focused on 
understanding the basic chemical, physical, and biological processes of 
the Earth's atmosphere, land, and oceans and how these processes may be 
affected by energy production and use, primarily the emission of carbon 
dioxide from fossil fuel combustion. DOE's Climate Change Prediction 
Program's contribution to the IPY includes improving climate change 
projections using state-of-the-science coupled climate models in time 
scales of decades to centuries and space scales of regional to global.
    BER's Climate Change Research also contributes substantially to the 
nation's Climate Change Research Initiative (CCRI) goals of 
understanding and predicting climate change, including its causes, 
consequences, and potential for abrupt change. The long-term DOE goal 
is to deliver improved climate data and models for policy makers and to 
substantially reduce differences between observed temperature and model 
simulations at regional scales. This work is critical to the ability of 
policy makers and stakeholders to provide stewardship resulting in a 
healthy planet--and it is particularly important as signs of 
increasingly dramatic change in our climate and environment appear.
    The Climate Change Research Request of $138.1 million for fiscal 
year 2008 is a 2.4 percent increase over the fiscal year 2007 Request. 
I urge the Subcommittee to fund Climate Change Research at an fiscal 
year 2008 level that is consistent with the requested increase for BER 
stated above, a 4.5 percent increase over the fiscal year 2007 Request, 
for a total of $144.3 million, and to enable DOE to apply the entire 
amount toward planned national research priorities.
Advanced Scientific Computing Research (ASCR)
    Within DOE's Office of Science, Advanced Scientific Computing 
Research (ASCR) delivers leading edge computational and networking 
capabilities to scientists nationwide, enabling advances in computer 
science and the development of specialized software tools that are 
necessary to research the major scientific questions being addressed by 
the Office of Science. Development of this capacity is a key component 
of DOE's strategy to succeed in its science, energy, environmental 
quality, and national security missions.
    ASCR's continued progress is of particular importance to 
atmospheric scientists involved with complex climate model development, 
research that takes enormous amounts of computing power. By their very 
nature, problems dealing with the interaction of the earth's systems 
and global climate change cannot be solved by traditional laboratory 
approaches.
    Within ASCR, several programs are of particular importance to 
climate change computer modeling work. The Leadership Computing 
Facility (LCF) at Oak Ridge National Laboratory (ORNL) provides a high 
performance computing resource for the Climate Science End Station and, 
in 2008, will continue its development into a world class facility with 
over 80 percent of its resources being made available to unclassified 
scientific research. In addition, the National Energy Research 
Scientific Computing Center (NERSC) operated by Lawrence Berkeley 
National Laboratory, and the Energy Sciences Network (ESnet) are also 
important enablers for climate research. These computational and 
networking resources play a vital role in the progress of U.S. climate 
research.
    The high performance computing facilities for the Office of Science 
serve thousands of scientists throughout the country at laboratories, 
universities, and other Federal agencies. Computing time is awarded to 
research groups based on peer review of submitted proposals. Basic 
research accomplished at these facilities covers a wide range of 
disciplines including climate modeling. ESnet enables researchers at 
laboratories, universities and other institutions to communicate with 
each other using collaborative capabilities that are unparalleled. This 
high-speed network enables geographically distributed research teams to 
collaborate effectively on some of the world's most complex problems. 
Researchers from industry, academia and national labs, through this 
program, share access to unique DOE research facilities, support the 
frequent interactions needed to address complex problems, and speed up 
discovery and innovation.
    LCF, NERSC, and ESnet play complementary roles in advancing the 
complex and challenging science of climate change and other scientific 
areas of extreme importance to the security and quality of life of our 
citizens. I urge the Committee to support the President's fiscal year 
2008 request of $340.2 million for DOE Advanced Scientific Computing 
Research, a 6.8 percent increase over the fiscal year 2007 request, and 
to enable DOE to apply the entire amount toward planned national 
priorities.
Scientific Discovery Through Advance Computing (SciDAC)
    BER and ASCR partner to support SciDAC, a progressive, breakthrough 
program that includes the creation of a first-generation Earth System 
model based on the extremely successful Community Climate System Model. 
A major SciDAC goal is to understand basic chemical, physical, and 
biological processes of the Earth's atmosphere, land, and oceans and 
how these processes may be affected by energy production and use. Much 
of the research is designed to provide the data that will enable an 
objective assessment of the potential for, and consequences of, global 
warming. This work is becoming increasingly critical as evidence mounts 
that regions of Earth are warming at an alarming rate. SciDAC research 
activities are competed via a merit review process and carried out at 
universities, national laboratories, and private institutions.
    Fiscal year 2008 funding will provide support for SciDAC activities 
including Centers for Enabling Technologies (CETs) that provide the 
innovations in computational research and development for petascale 
computational and data management endeavors, including climate 
research.
    BER funding for SciDAC is requested at $7.7 million for fiscal year 
2008 with ACSR supporting SciDAC Computational Partnerships at $50.2 
million, $21 million of which will fund the CETs. I urge the Committee 
to support the President's fiscal year 2008 requests within BER and 
ASCR for overall SciDAC funding.
    DOE plays a vital role in sustaining U.S. scientific leadership and 
generating U.S. competitiveness in a time when other countries are 
investing heavily in scientific research and technology. On behalf of 
UCAR and the atmospheric sciences research community, I want to thank 
the Subcommittee in advance for your attention to the recommendations 
of our community concerning the fiscal year 2008 budget of the 
Department of Energy. We understand and appreciate that the nation is 
undergoing significant budget pressures at this time, and support 
absolutely the effort to enhance U.S. security and quality of life 
through the American Competitiveness Initiative, of which the DOE 
Office of Science is a critical component.
                                 ______
                                 
              Prepared Statement of FuelCell Energy, Inc.
    FuelCell Energy, Inc. appreciates the opportunity to submit this 
statement in support of the Department of Energy's Fossil Energy, Fuels 
and Power Systems, Fuel Cell Program. We urge the Subcommittee to 
continue to support this breakthrough program by appropriating $80 
million for development of this highly efficient, clean, and secure 
energy technology.
    DOE's Fossil Energy Fuel Cell Program, through the Solid State 
Energy Conversion Alliance (SECA) fuel cell activity, is developing 
technology to allow the generation of highly efficient, cost-effective, 
carbon-free electricity from domestic coal resources with near-zero 
atmospheric emissions in central station applications. The program 
directly supports the president's FutureGen project through the 
development of cost-effective, highly efficient, power blocks that 
facilitate sequestration in coal-based systems. The technology will 
also permit grid independent distributed generation applications by 
2010.
    SECA fuel cell systems operating on coal gas are building blocks 
for zero emissions power, the ultimate goal of the President's 
FutureGen Program. These systems are projected to be available at a 
cost of $400/kw. In addition, the technology developed in this program 
will produce electricity at up to 60 percent efficiency in coal-based 
systems, produce near-zero emissions, and be compatible with carbon 
sequestration.
    In all applications SECA fuel cells will be both low-cost, with the 
above-stated goals of $400/kw, as well as highly efficient. Integrated 
with coal gasification, such systems will approach 60 percent 
efficiency compared to the existing coal-based power generation fleet 
average of about 33 percent efficiency. In distributed generation 
applications even higher efficiencies may be reached, and cogeneration 
opportunities can further increase efficiency.
    Along with these attributes fuel cells are one of the cleanest 
technologies available in terms of atmospheric emissions, which 
enhances their attractiveness for urban applications or applications in 
areas of non-attainment for Clean Air Act emissions. They also provide 
24 hour, silent operation.
    Finally, coal-based fuel cell systems will increase energy security 
by using domestic resources. In distributed generation applications 
fuel cells can eliminate transmission and distribution system 
infrastructure concerns and issues by providing generation near the 
point of use and by being able to operate in a grid-independent mode.
    The SECA Program consists of six integrated industrial 
manufacturing teams designing fuel cell systems, developing the 
necessary materials, and ultimately responsible for deploying the 
technology. These teams are complemented by two to three dozen core 
technology performers providing generic problem-solving research needed 
to overcome barriers to low-cost, high performance technology as 
identified by DOE and the manufacturing teams. The core technology 
teams are universities, national laboratories, and other research 
oriented organizations. This unique structure assures that a variety of 
approaches to solving the problems associated with fuel cells will be 
undertaken in a manner that will increase the chances of success for 
this highly complex technology.
    Several of the manufacturing teams are developing systems for 
application to large central generation systems characterized by 
FutureGen. The remaining manufacturing teams are developing fuel cells 
for possible use in both these large systems as well as in distributed 
generation applications such as auxiliary power units, military power 
applications and remote or on-site power generation.
    The DOE budget request for this program for fiscal year 2008 is 
$62.0 million, approximately the same level anticipated for fiscal year 
2007 funding. This level of funding will continue to support the 
current program, which involves larger-scale Phase II development work 
on the part of manufacturing teams in the program and continued effort 
by the core technology performers. However, in order to deliver full 
scale fuel cell system hardware for the FutureGen project additional 
support is necessary to assist and accelerate the creation of 
manufacturing capability by the formation of teams between existing 
fuel cell stack developers and industry with the goal of delivering 
hardware by the scheduled date of 2011 and also to keep the base 
program on schedule.
    We believe that the SECA fuel cell program has achieved the 
progress to date as anticipated by the program managers, and will 
continue to display such progress given sufficient funding support by 
DOE and the Congress. Hybrid technology has been successfully 
integrated into the program and an emphasis on use with coal-based 
systems has been established. Industry partners in the program have 
continued and increased cost-sharing support. All major stack 
developers have met the initial goals of the program allowing 
continuance to more advanced stages of development. This technology is 
essential to meeting the efficiency and emissions goals of the 
President's FutureGen program and will also provide low-cost, low-
emissions alternatives for distributed generation applications. 
Therefore, we urge you to support our request for $80 million to 
execute the DOE Fossil Energy, Fuels and Power Systems, Fuel Cell 
Program in fiscal year 2008.
                                 ______
                                 
       Prepared Statement of the Ground Water Protection Council
    The following request by the Ground Water Protection Council (GWPC) 
is to restore Congressional appropriations of $64 million for the 
Department of Energy's (DOE) Office of Fossil Energy (FE) Research and 
Development (R&D) program. This appropriation will continue to fund the 
RBDMS system and electronic commerce applications at $1,500,000. These 
programs developed by the Ground Water Protection Council (GWPC) 
streamline data management for oil and gas permitting, enhance oil and 
gas production, and protect the environment. Restoring the funding for 
these programs is an urgent priority for the continued development of 
domestic oil and gas and sustained environmental protection.
    The GWPC is a respected national organization of state ground 
water, UIC, and oil and gas regulatory agencies with a successful track 
record of providing solutions to ground water protection related issues 
that are environmentally protective, scientifically based, cost 
effective and publicly accepted. Through the GWPC, states work together 
to strengthen their ability to protect ground water resources in more 
effective and cost efficient ways. We are the proud recipient of the 
Secretary of Energy's ``Energy 100 Award''--given to the top 100 most 
successful and publicly beneficial projects (RBDMS) in the last 30 
years of the USDOE.
    RBDMS/CERA Accomplishments.--Data utilities from the Risk Based 
Data Management System are used in 25 states and one Indian Nation. 
RBDMS streamlines state oil and gas permit and response times, enhances 
ground water protection, and provides improved public and industry 
joint access to data, saving money for state and federal agencies, 
increasing production for small independent domestic operators, and 
creating real time efficiencies in state and federal domestic oil and 
gas programs. Over the life of these successful programs, the states 
have matched federal funding with their own funds at a 3:1 ratio. 
RBDMS/CERA projects have resulted in:
  --Improved Environmental Protection.--State agencies have achieved 
        higher levels of environmental protection through information 
        management tools developed with DOE FE R&D funding. For 
        example, current RBDMS application development efforts are 
        making it possible to overlay oil and gas well and coal mining 
        location information on source water protection area maps to 
        assess areas of review and protect underground sources of 
        drinking water. These same technologies are allowing regulatory 
        agencies to track the quality and quantity of fresh and 
        produced waters and to make important policy decisions about 
        how these resources should be managed.
  --Increased Domestic Oil and Gas Production and Increased State 
        Revenues.--Regulatory agencies have documented that the 
        information access and technology research afforded by the DOE 
        FE R&D program has helped industry maximize the recovery of oil 
        and gas from marginal wells. Nationwide, many marginal wells 
        are being reworked and brought back online at a significant 
        cost savings. For example, in North Dakota, more than 250 wells 
        over the last 5 years have been re-entered and drilled 
        horizontally at a cost savings of at least $300,000. By keeping 
        these wells available, industry has saved in excess of 
        $75,000,000 in North Dakota alone. If such technology was not 
        made readily available through the DOE FE R&D program, many 
        wells with recoverable product would have been plugged or shut 
        in.
  --Increased Data Sharing.--Improved access to oil and gas agency data 
        gives exploration geologists the ability to develop prospects 
        remotely and to drill and operate their leases more 
        efficiently. The DOE FE R&D funding has given regulatory 
        agencies the opportunity to share data with small, independent 
        operators that would not otherwise have the ability to access 
        such accurate information, thus aiding exploration and 
        development efforts.
    Fiscal Year 2008 Funding for RBDMS/CERA.--DOE Fossil Energy 
Research and Development program funding is a sound investment in 
domestic energy production and environmental protection. The DOE FE R&D 
program funds research projects that are encouraging small- and medium-
sized industry operators to expand into previously cost-prohibitive 
areas increasing the industry's ability to make more knowledgeable 
decisions about resource deployment, exploration, and well management 
and is reducing overhead costs associated with regulatory compliance. 
Fiscal year 2008 funding would provide:
  -- E-Commerce.--The development of new RBDMS e-commerce applications 
        in fiscal year 2008 will increase environmental monitoring and 
        compliance and at the same time decrease both cost and time 
        allocation for small oil and gas producers. The result is money 
        saved by state governments and federal agencies and increased 
        domestic oil and gas production.
  --Cost Effective Regulatory Approaches.--Cost Effective Regulatory 
        Approach (CERA) projects are designed to facilitate the 
        development of petroleum resources in an efficient and 
        environmentally friendly manner. For example, we are currently 
        working on minimizing ground water impacts from oil shale 
        production. Projects such as these are critical to the 
        continued enhancement of oil shale production capacity in the 
        United States.
  --Energy-Water Nexus.--The USDOE has a goal of minimizing water 
        consumption by energy-producing industries. The GWPC will 
        develop software applications that will aid state agencies in 
        tracking water quality and quantity data related to oil and gas 
        production. Automated data will assist states in the analysis 
        of related water consumption.
  -- CO2 Geosequestration.--Capture and geologic storage 
        (geosequestration) of CO2 from power plants is one 
        important tool for decreasing the release of this greenhouse 
        gas to the atmosphere. However, geosequestration of 
        CO2 in underground formations presents a potential 
        threat to underground sources of drinking water. The GWPC will 
        facilitate the development of regulations to manage 
        CO2 geologic sequestration by:
    --Creating a stakeholders workgroup made up of state agencies, 
            environmental groups, energy resource companies and other 
            affected parties focused on regulatory needs.
    --Evaluating the legal basis for regulations development including 
            federal and state authorities and rules.
    --Working with the scientific and technical communities to 
            incorporate the best available information to assure the 
            process is environmentally sound.
    --Expanding the successful RBDMS system to track and monitor 
            CO2 Geosequestration wells.
    Many domestic oil and gas fields are no longer economical for the 
major oil and gas companies to operate but still hold vast resources. 
Without small independent operators, these resources would not be 
recoverable. By increasing its recoverable resources by only 5 percent, 
the United States would produce billions of barrels of additional 
domestic oil. Conversely, failure to use new technologies to fully 
recover these resources would result in the loss of billions of dollars 
of revenues that would instead be sent overseas for oil imports.
    About 5,000 domestic independent companies drill 90 percent of the 
nation's wells and produce 68 percent of our domestic oil and 82 
percent of the natural gas. While efficient in their operations, these 
companies lack the necessary research programs to fully develop our 
domestic resources. The partnerships created between these independent 
producers and universities through the DOE FE R&D program are the focus 
of 85 percent of the program's resources. The DOE FE R&D program 
increases environmental protection, access to adequate supplies of oil 
and gas, and tax revenues generated through oil and natural gas 
production. This funding allows states to help expand oil production 
while at the same time better protect the environment through increased 
data access and more efficient data sharing between state agencies and 
producers. RBDMS and CERA projects help further these benefits.
    The Ground Water Protection Council requests continued funding in 
the amount of $1,500,000 for RBDMS and CERA programs and encourages 
restoration of Congressional appropriations of $65 million for the 
Department of Energy's (DOE) Office of Fossil Energy (FE) Research and 
Development (R&D) program.
                                 ______
                                 
           Prepared Statement of Southern Company Generation
    Mr. Chairman and Members of the Committee: Southern Company 
operates the Power Systems Development Facility (PSDF) (http://
psdf.southernco.com) in Wilsonville, AL for the U.S. Department of 
Energy's (DOE's) National Energy Technology Laboratory (NETL) and 
several industrial participants.\1\ The PSDF was conceived as the 
premier advanced coal power generation research and development (R&D) 
facility in the world. It has fulfilled this expectation. I would like 
to thank the Senate for its past support of the PSDF and request the 
committee's continued support. This statement supports the 
Administration's budget request for DOE coal R&D which includes $25 
million for work at the PSDF. These funds are necessary to conduct the 
future test program agreed to with DOE which includes wide-ranging 
support of the DOE Clean Coal Technology Roadmap. A major highlight of 
the PSDF test program is carbon capture technology development for 
coal-based power generation (see details below). Also included is 
support for FutureGen--the integrated hydrogen and electric power 
production and carbon sequestration research initiative proposed by 
President Bush. DOE has identified the PSDF as one of the primary test 
centers to support FutureGen through sub-scale component testing of 
technologies under consideration for inclusion in the FutureGen full-
scale project.
---------------------------------------------------------------------------
    \1\ Current PSDF participants include Southern Company, the 
Electric Power Research Institute (EPRI), KBR, Siemens Power 
Generation, Inc. (Siemens), Peabody Energy, the Burlington Northern 
Santa Fe Railway Company, and the Lignite Energy Council. The Lignite 
Energy Council includes major producers of lignite (who together 
produce approximately 30 million tons of lignite annually); the 
nation's largest commercial coal gasification project; and investor-
owned utilities and rural electric cooperatives from a multi-state area 
that generate electricity from lignite, serving two million people in 
the Upper Midwest region. The Council also has over 250 contractor/
supplier members who provide products and services to the plants and 
mines. In addition to the Wilsonville plant site major work is planned 
for the PSDF, or components are being developed at the following 
locations: Grand Forks, ND (sub-scale gasifier testing), Houston, TX 
(gasifier development); Orlando, FL (gas turbine low-NOX 
burner), Pittsburgh, PA (filter fabrication), Deland, FL (filter 
fabrication), and Holly Springs, MS (gasifier fabrication).
---------------------------------------------------------------------------
    A key feature of the PSDF is its ability to test new coal-based 
power generation systems at an integrated, semi-commercial scale. 
Integrated operation allows the effects of system interactions, 
typically missed in un-integrated pilot-scale testing, to be 
understood. The semi-commercial scale allows the maintenance, safety, 
and reliability issues of a technology to be investigated at a cost 
that is far lower than the cost of commercial-scale testing. Capable of 
operating at pilot to near-demonstration scales, the PSDF is large 
enough to produce industrial scale data, yet small enough to be cost-
effective and adaptable to a variety of technology research needs.
    In addition to semi-commercial scale testing, the PSDF has slip-
stream testing capability for cost effective technology screening. 
Future test work at PSDF will include the scale-up and continued 
development of several CO2 capture technologies being 
developed either at DOE's NETL facility, at private R&D laboratories or 
at PSDF. These CO2 capture technologies are envisioned for 
integration with existing or future Integrated Gasification Combined 
Cycle (IGCC) plants to reduce the cost penalties associated with the 
removal of CO2 from syngas prior to combustion for power 
generation. As a part of the effort to capture CO2, 
substantial new technologies, such as improved catalysts for water gas 
shift technology are needed and will be tested at PSDF. Also included 
in the PSDF research plans are efforts to enhance the coal feeding 
systems to enable wider ranges of coal as well as biomass to be 
economically and reliably introduced into many different versions of 
IGCC technology under consideration commercially today. PSDF has 
already demonstrated proof-of-concept of this new DOE-funded fuel feed 
system and will continue technology development to commercial ready 
scale.
    A part of DOE's goals are to encourage the commercial deployment of 
technologies for which DOE has contributed R&D funding. Consistent with 
these goals, the PSDF will also provide process technology support to 
efforts to commercialize transport gasifier technology. DOE has 
partnered with Southern Company and the Orlando Utilities Commission 
(OUC) as part of a competitive solicitation under the Clean Coal Power 
Initiative (CCPI) to build an advanced 285-megawatt transport gasifier-
based coal gasification facility at OUC's Stanton Energy Center in 
central Florida. The facility will use sub-bituminous coal and include 
state-of-the-art emission controls to demonstrate the cleanest, most 
efficient coal-fired power plant technology in the world. In addition, 
the PSDF will also provide process support to a recently announced 
commercial deployment of the transport gasifier to be constructed in 
Mississippi. This project will showcase the first ever application of 
modern IGCC technology on Gulf Coast lignites. The PSDF will also 
support the deployment of other emerging commercial technologies for 
use on other IGCC systems, including coal feed and particulate control 
technologies.
    Southern Company also supports the goals of the Clean Coal 
Technology Roadmaps developed by DOE, EPRI, and the Coal Utilization 
Research Council (CURC). These Roadmaps identify the technical, 
economic, and environmental performance that advanced clean coal 
technologies can achieve over the next 20 years. Over this time period 
coal-fired power generation efficiency can be increased to over 50 
percent (compared to the current fleet average of 32 percent) while 
producing de minimis emissions and developing cost-effective 
technologies for carbon dioxide (CO2) management. EPRI 
estimated the value of advanced coal R&D using the modern financial 
technique called ``Real Options''. The major conclusion of this study 
\2\ is that the value to U.S. consumers of further coal R&D for the 
period 2007-2050 is at least $360 billion and could reach $1.38 
trillion. But, for these benefits to be realized the critically 
important R&D program outlined in the Clean Coal Technology Roadmap 
must be conducted.
---------------------------------------------------------------------------
    \2\ EPRI Report No. 1006954, ``Market-Based Valuation of Coal 
Generation and Coal R&D in the U.S. Electric Sector'', May 2002.
---------------------------------------------------------------------------
Summary
    The United States has historically been a leader in energy 
research. Adequate funding for fossil energy research and development 
programs, including environmental and climate change technologies will 
provide our country with secure and reliable energy from domestic 
resources while protecting our environment. Current DOE fossil energy 
research and development programs for coal, if adequately funded, will 
assure that a wide range of electric generation and hydrogen production 
options are available for future needs. Congress faces difficult 
choices when examining near-term effects on the Federal budget of 
funding energy research. However, continued support for advanced coal-
based energy research is essential to the long-term environmental and 
economic well being of the United States. Prior DOE clean coal 
technology research has already provided the basis for $100 billion in 
consumer benefits at a cost of less than $4 billion. Funding the 
Administration's budget request for DOE coal R&D and long-term support 
of the Clean Coal Technology Roadmap can lead to additional consumer 
benefits of between $360 billion and $1.38 trillion.
    One of the key national assets for achieving these benefits is the 
PSDF. The fiscal year 2008 funding for the PSDF needs to be $25 million 
to support construction of new technologies that are critical to the 
goals of the Clean Coal Technology Roadmap and to the success of the 
development of cost-effective climate change technologies, of the type 
that will be demonstrated in the FutureGen project. The major 
accomplishments at the PSDF to date and the future test program planned 
by DOE and the PSDF's industrial participants are summarized below.
PSDF Accomplishments
    The PSDF has developed testing and technology transfer 
relationships with over 50 vendors to ensure that test results and 
improvements developed at the PSDF are incorporated into future plants. 
Major subsystems tested and some highlights of the test program at the 
PSDF include:
    Transport Reactor.--The transport reactor has been operated 
successfully on sub-bituminous, bituminous, and lignite coals as a 
pressurized combustor and as a gasifier in both oxygen- and air-blown 
modes and has exceeded its primary purpose of generating gases for 
downstream testing. It is projected to be the lowest capital cost coal-
based power generation option, while providing the lowest cost of 
electricity and excellent environmental performance.
    Advanced Particulate Control.--Two advanced particulate removal 
devices and 28 different filter elements types have been tested to 
clean the product gases, and material property testing is routinely 
conducted to assess their suitability under long-term operation. The 
material requirements have been shared with vendors to aid their filter 
development programs.
    Filter Safe-Guard Device.--To enhance reliability and protect 
downstream components, ``safe-guard'' devices that reliably seal off 
failed filter elements have been successfully developed.
    Coal Feed and Fine Ash Removal Subsystems.--The key to successful 
pressurized gasifier operation is reliable operation of the coal feed 
system and the filter vessel's fine ash removal system. Modifications 
developed at the PSDF and shared with equipment suppliers allow current 
coal feed equipment to perform in a commercially acceptable manner. An 
innovative, continuous process has also been designed and successfully 
tested that reduces capital and maintenance costs and improves the 
reliability of fine ash removal.
    Syngas Cooler.--Syngas cooling is of considerable importance to the 
gasification industry. Devices to inhibit erosion, made from several 
different materials, were tested at the inlet of the gas cooler and one 
ceramic material has been shown to perform well in this application.
    Syngas Cleanup.--A syngas cleanup train was constructed and has 
proven capable of meeting stringent syngas decontamination 
requirements. This module that provides an ultra clean slip stream is 
now available for testing a wide variety of technologies.
    Sensors and Automation.--More than 20 instrumentation vendors have 
worked with the PSDF to develop and test their instruments under 
realistic conditions. Automatic temperature control of the Transport 
Reactor has been successfully implemented.
    Fuel Cell.--Two test campaigns were successfully completed on 0.5 
kW solid oxide fuel cells manufactured by Delphi on syngas from the 
transport gasifier marking the first time that a solid oxide fuel cell 
has been operated on coal-derived syngas.
PSDF Future Test Program
    Future testing at the PSDF is focused on supporting CO2 
capture technologies (of the type to be used by FutureGen) and the 
Technology Roadmaps. These programs aim to eliminate environmental 
issues that present barriers to the continued use of coal including 
major reductions in emissions of SO2, CO2, 
NOX, particulates, and trace elements (including mercury), 
as well as reductions in solid waste and water consumption. Since 
FutureGen will require testing evaluations and scale-up of emerging 
technologies, DOE has identified the PSDF as a key location for support 
testing of the new technologies prior to consideration for inclusion in 
FutureGen.
    With adequate funding, work at the PSDF will include:
    H2/CO2 Separation Technologies.--Integrate 
and test advanced and potentially lower cost H2/
CO2 separation technologies to assess their performance on 
coal-derived syngas.
    Water Gas Shift Enhancements.--A variety of water gas shift reactor 
configurations and sizes can be tested at the PSDF. Optimizing the 
operation of shift catalysts when exposed to syngas at the PSDF and 
evaluating their economics will provide valuable input for the 
FutureGen project.
    Advanced Syngas Cleanup.--Test new advanced syngas cleanup systems 
for reducing hydrogen sulfide, hydrochloric acid, ammonia, and mercury 
to near-zero levels.
    New Particulate Control Device Programs.--Evaluate alternative 
filter system internal designs, on-line detector of particle 
breakthrough, and improved resistance probes.
    Improved Fuel Feed Systems.--Evaluate alternatives that have been 
identified to conventional lock hopper feed systems and coal 
preparation methods.
    Biomass Co-Feed.--Evaluate co-feed options with biomass and coal. 
Design and run a test to gasify up to a 20 percent mixture of biomass 
with coal in the Transport Gasifier.
    Transport Gasifier.--Continue transport gasifier testing to expand 
useable feedstocks, including low- and high-sodium lignites and 
bituminous coals as well as biomass mixtures with these coals and 
provide syngas for testing of syngas clean-up and downstream systems.
    Syngas Cooler.--Test alternative designs that are less complex, 
have lower capital cost, and offer better control of the syngas exit 
temperature.
    High-Temperature Heat Exchangers.--Test high-temperature heat 
exchangers as they become available for use in both advanced combustion 
and gasification technologies.
    Fuel Cell.--Support NETL fuel cell development with slip-stream 
testing. Install and test a 5 to 10 MW hybrid fuel cell/gas turbine 
module.
    Sensors and Automation.--Evaluate automation enhancements that 
simulate commercial control strategies. Further development at 
gasification operating conditions is planned for measuring coal feed 
rate, temperature, gas analysis, dust at low levels, and hazardous air 
pollutants.
                                 ______
                                 
      Prepared Statement of the American Public Power Association
    The American Public Power Association (APPA) is the national 
service organization representing the interests of over 2,000 municipal 
and other state and locally owned utilities throughout the United 
States (all but Hawaii). Collectively, public power utilities deliver 
electricity to one of every seven electric consumers (approximately 44 
million people). We appreciate the opportunity to submit this statement 
outlining our fiscal year 2008 funding priorities within the Energy and 
Water Development Subcommittee's jurisdiction.
Federal Power Marketing Administrations (PMAs)
    Power Marketing Administration Interest Rate Proposal.--The 
Administration's fiscal year 2008 budget includes a recommendation that 
would raise electricity rates by changing the interest rate charged by 
the Southeastern Power Administration (SEPA), the Southwestern Power 
Administration (SWPA), and the Western Area Power Administration (WAPA) 
on all new investments in projects whose interest rates are not set by 
law. Specifically, the Department of Energy's (DOE) budget calls for 
the these three Power Marketing Administrations (PMAs) to set their 
interest rates at the level that government corporations pay to borrow 
funds from the federal government. To implement this proposal, DOE will 
amend the regulation that governs how the PMAs establish their rates 
and will do so administratively, without any consultation with or 
action from Congress.
    The Administration's budget proposes to increase the interest rate 
charged on all new investments in these hydroelectric facilities to a 
level that is charged to government corporations--the rate that 
reflects the interest cost for the federal government to provide loans 
to government corporations. SEPA, SWPA and WAPA are neither government 
corporations nor do they borrow funds from the U.S. Treasury. All rates 
are set to recover the dollars appropriated by Congress for the 
investment in the hydroelectric facilities and to cover the cost to 
operate these projects. If implemented, this proposal could increase 
rates considerably for customers served by most of the Power Marketing 
Administrations.
    This proposal creates a serious precedent and should be rejected, 
because: (1) the process for implementing the proposal can be done 
without congressional involvement or approval; (2) the proposal would 
arbitrarily raise revenue from electric customers for deficit 
reduction; and (3) the proposal reverses decades of rate making 
precedent and accepted cost recovery practices by administrative fiat. 
We urge the Subcommittee to block the implementation of this proposal.
    Bonneville Power Administration ``Net Secondary Revenue'' 
Proposal.--Also included in DOE's fiscal year 2008 budget is a proposed 
administrative action that would direct the Bonneville Power 
Administration (BPA) to use any net ``secondary market revenues'' in 
excess of $500 million per year towards accelerated federal debt 
repayment. Because the change would be made through the rulemaking 
process, congressional approval is not needed for the policy to go into 
effect. This proposal was strongly opposed by Congress in fiscal year 
2007, and was ultimately blocked by Congress for that year. The Office 
of Management and Budget (OMB) calculates that this plan would provide 
a total of $924 million from fiscal year 2007-2016 from these ``higher-
than-historical net secondary revenues.'' OMB believes that this 
measure is needed to free up BPA borrowing authority. However, experts 
in the Northwest have calculated that the proposal would result in a 10 
percent wholesale rate increase that BPA would be forced to pass on to 
ratepayers. The Congressional Budget Office has calculated that the 
effect of the Administration's proposal on the U.S. Treasury would be 
$300 million over 10 years beginning in 2008. We urge the Subcommittee 
to block the implementation of this proposal.
    ``Emergency'' Purchase Power and Wheeling.--This new Administration 
proposal for fiscal year 2008 would require that any funds used from 
the ``Continuing or Emergency Funds'' be paid back within a year of 
being used. Like the Agency rate and net secondary revenue proposals, 
this one can be implemented administratively. Currently, in most cases, 
the PMAs have 3-5 years to recoup those funds from the customers--paid 
back with interest. Emergency funds are available to the PMAs when an 
unforeseen emergency situation (such as a drought) causes them to go 
beyond their allotted ceiling for purchase power and wheeling 
expenditures in a given fiscal year. Similar to the Agency rate 
proposal, this change is unjustified from a practical standpoint and is 
also problematic from a precedent-setting perspective. We urge the 
Subcommittee to block implementation of this proposal.
    Purchase Power and Wheeling.--We urge the Subcommittee to authorize 
appropriate levels for use of receipts so that the Western Area Power 
Administration (WAPA), the Southeastern Power Administration (SEPA) and 
the Southwestern Power Administration (SWPA) can continue to purchase 
and wheel electric power to their municipal and rural electric 
cooperative customers. Although appropriations are no longer needed to 
initiate the purchase power and wheeling (PP&W) process, the 
Subcommittee continues to establish ceilings on the use of receipts for 
this important function. The PP&W arrangement is effective, has no 
impact on the federal budget, and is supported by the PMA customers who 
pay the costs. We agree with the Administration's budget requests for 
PP&W for fiscal year 2008, which are as follows: $425.2 million for 
Western Area Power Administration (WAPA); $62.2 million for 
Southeastern Power Administration (SEPA); and $45 million for 
Southwestern Power Administration (SWPA).
    Costs of Increased Security at Federal Multi-Purpose Projects.--
Following the attacks of September 11, 2001, the Bureau of Reclamation 
(Bureau) embarked upon an aggressive program to enhance the security of 
federal dams to protect the facilities against terrorist attacks. Based 
on historical precedent, the Bureau initially determined that the costs 
of increased security measures should remain a non-reimbursable 
obligation of the federal government. In fiscal year 2005, however, the 
Bureau reversed its position and asked for some of these costs to be 
reimbursed from power customers. That year, Congress disagreed with the 
Bureau's request that these expenses be reimbursable, but the following 
year, Congress directed that $10 million of the estimated $18 million 
for guards and patrols be provided by reimbursable funding. The bill 
also directed the Bureau to provide a report to Congress within 60 days 
that would delineate the planned reimbursable security costs by 
project. The report (issued in March 2006) was similar to the previous 
(May 2005) report, except that it also included ``facility 
fortification upgrades'' as a reimbursable cost. Previously, the Bureau 
had assured its stakeholders that only the costs of guards and patrols 
would be reimbursable. There has been some clarification on that 
position, but it is not entirely clear how replacement/upgrades would 
be treated. The Administration's fiscal year 2008 request for the 
Bureau's site security is $35.5 million, of which $18.9 million (for 
guards and patrols) would be designated reimbursable from water and 
power customers. This additional obligation in essence makes everything 
reimbursable at some point. Regardless of the details of the Bureau's 
report, APPA continues to believe in the validity of the historic 
rationale established in the 1942 and 1943 Interior Department 
Appropriation Acts for treating costs of increased security at multi-
purpose federal projects as non-reimbursable obligations of the federal 
government. We therefore urge Congress to add language to the Energy 
and Water Development Appropriations Act of 2008 to clarify that all 
costs of increased security at dams owned and operated by the Bureau be 
non-reimbursable.
    Renewable Energy Production Incentive (REPI) and Renewable Energy 
Programs.--The Department of Energy's REPI program was created in 
1992's Energy Policy Act (EPAct) as a counterpart to the renewable 
energy production tax credits made available to for-profit utilities, 
and was recently reauthorized through 2016 in the Energy Policy Act of 
2005 (EPAct05). EPAct05 authorizes DOE to make direct payments to not-
for-profit public power systems and rural electric cooperatives at the 
rate of 1.5 cents per kWh (1.9 cents when adjusted for inflation) from 
electricity generated from a variety of renewable projects. According 
to DOE sources, in order to fully fund all past and current REPI 
applicants, over $80 million would be needed for fiscal year 2008. 
Despite the demonstrated need, however, DOE has asked for only $4.96 
million for fiscal year 2008, citing budgetary constraints. We greatly 
appreciate the Subcommittee's interest in this small but important 
program as evidenced by its support of funding for the program either 
at or above the Administration's budget requests in the last few years 
despite the tight budgetary environment. We urge the Subcommittee to 
continue its support with an even greater increase.
    Storage for High-level Nuclear Waste.--We support the 
Administration's efforts to finalize the location of a permanent 
storage site at Yucca Mountain, Nevada. The Administration requested 
$494.5 million for fiscal year 2008, a decrease of $50 million from its 
fiscal year 2007 request, for the nuclear waste repository at Yucca 
Mountain. We encourage the Subcommittee to provide funding for the 
project at or above the Administration's request.
    Advanced Hydropower Turbine Program.--APPA is disappointed with the 
Administration's decision to phase out this important program to 
develop a hydroelectric turbine that will protect fish and other 
aquatic habitats while continuing to allow for the production of 
emissions-free hydroelectric power. We urge the Subcommittee to 
consider providing funding for this important initiative.
    Energy Conservation.--APPA appreciates the Subcommittee's interest 
in energy conservation and efficiency programs at DOE and we hope that 
the Subcommittee will once again allocate a funding level over and 
above the Administration's request for fiscal year 2008.
    Weatherization and Intergovernmental Activities.--APPA is 
disappointed with the Administration's request of $204.9 million for 
fiscal year 2008, a decrease of $20.1 million from its fiscal year 2007 
request, for helping to increase the efficiency of commercial and 
residential buildings, including weatherization assistance, and to 
support the state and community energy conservation programs.
    Clean Coal Power Initiative and FutureGen.--APPA supports the 
Administration's request of $73 million for fiscal year 2008 for the 
Clean Coal Power Initiative. This is consistent with the President's 
commitment to fund this program at $2 billion over 10 years. We also 
urge the Subcommittee to provide the $108 million in newly requested 
funding for fiscal year 2008 for the FutureGen program.
    Distributed Generation Fuel Cells.--APPA is disappointed with the 
Administration's request of $62.03 million for fiscal year 2007 for 
distributed generation fuel cell research and development, and urges 
the Subcommittee to allocate additional funding for this program.
    Hydrogen Fuel Initiative and Vehicle Technologies.--APPA supports 
the Administration's efforts to improve the feasibility of making 
available low-cost hydrogen fuel cells, and supports its request of 
$309 million for hydrogen research and development in fiscal year 2008. 
APPA also supports the Administration's fiscal year 2008 request for 
$176 million for vehicle technologies that would apply hydrogen fuel 
cell technology to vehicles as well as provide for research for hybrid 
and electric vehicle technologies to facilitate widespread deployment 
of these technologies.
    Navajo Electrification Demonstration Program.--APPA supports full 
funding for the Navajo Electrification Demonstration Program at its 
full authorized funding level. The purpose of the program is to provide 
electric power to the estimated 18,000 occupied structures in the 
Navajo Nation that lack electric power.
    National Climate Change Technology Initiative (NCCTI).--APPA 
supports the Administration's efforts to promote greenhouse gas 
reductions through voluntary programs and investments in new 
technologies. We encourage the Subcommittee to consider allocating 
additional funds for the policy office of the NCCTI.
    Federal Energy Regulatory Commission (FERC).--DOE has requested 
$255.4 million for the overall operations of the Federal Energy 
Regulatory Commission (FERC) for fiscal year 2008. APPA supports this 
request, which is an appropriate increase of $24.6 million over the 
fiscal year 2007 request given FERC's additional responsibilities under 
EPAct05.
                                 ______
                                 
             Prepared Statement of the University of Tulsa
Background and Issues
    September 11, 2001, confirmed that both Middle East oil dependence 
and fragile infrastructure threaten national security. Domestic energy 
systems aren't secure unless they're designed to make large-scale 
failures impossible and local failures benign. Today the opposite is 
true in the oil and gas sector: The United States' extraordinarily 
concentrated energy flows could allow a devastating attack. Production 
of oil and gas, especially in the United States are also dwindling with 
each passing year. So has the ability to process the oil into valuable 
products such as gasoline to drive our vehicles. The United States 
depends on oil to move people and goods. Ninety five percent of the 
energy for transportation in the United States comes from oil. 
Transportation's demand for oil drives the market. Transportation 
accounts for two-thirds of total U.S. petroleum use, and nearly all of 
the high value petroleum products, like gasoline and distillate fuel.
    In the past, dependence on oil has cost our economy dearly. Oil 
price shocks and price manipulation by the OPEC cartel from 1979 to 
2000 cost the U.S. economy about $7 trillion, almost as much as we 
spent on national defense over the same time period and more than the 
interest payments on the national debt. Each major price shock of the 
past three decades was followed by an economic recession in the United 
States. With growing U.S. imports and increasing world dependence on 
foreign oil, future price shocks are possible and would be costly to 
the U.S. economy.
    On the government side, money has dried up, or is drying up, for 
oil and gas research as well. The Gas Research Institute (GRI) at one 
time funded close to $200 million per year in gas-related research. 
GRI's support came from a Federal Energy Regulatory Commission-mandated 
surcharge on interstate gas sales. The surcharge was phased out; 
however, producing an estimated $70 million in 2001, $60 million in 
2002-2004. In July 2005, Subtitle J Ultra-Deepwater and Unconventional 
Natural Gas and Other Petroleum Resources were passed into law. The 
program under this subtitle addresses three areas: (1) Ultra-deepwater 
architecture and technology in the Outer Continental Shelf to depths 
greater than 15,000 feet, (2) unconventional natural gas and other 
petroleum resources, and (3) the technology challenges of small 
producers. The program guarantees to provide $50,000,000 per year with 
the potential of an additional $100,000,000 per year over the next 10 
years. These funds should provide some long term solutions, but it 
should be noted that only a small portion of these funds (7.5 percent) 
will be used on conventional oil and gas studies that benefit the small 
producers. Furthermore, with this passage, additional pressure will be 
applied to close the National Energy Technology Office in Tulsa 
(formerly the National Petroleum Technology Office which was 
consolidated into the NETL in December 2000). Ironically, the Energy 
Bill provides almost no support for domestic oil production which 
desperately needs new technologies for mature fields to continue to 
support the Nation's energy future.
    Research and Development (R&D) funding for major oil companies and 
service companies hit bottom around 2003 and increased significantly 
each year until at least 2005. The major oil companies during this 
period were increasing funding at around 20 percent year-over-year and 
the service companies were increasing funding at 10-15 percent. The 
real issue is what are the major companies researching. In general it 
is not things that benefit independent operations in the United States. 
Major integrated oil and gas producers have largely moved offshore or 
overseas. This has left onshore production increasingly in the hands of 
small independent producers who lack the resources to conduct R&D.
    TU has been one of the leaders in providing new technologies for 
the oil and gas industry for almost a half century. DOE funding of our 
programs over the past 10 years has been integral to our growth. This 
growth is now being threatened. So, where will the funds come from to 
support conventional oil and gas research?
                                solution
    Ultimately, the solution to the oil dependence problem lies in 
technological progress: developing technologies to find, process, and 
use energy more efficiently, and by creating new energy sources that 
can replace petroleum cleanly and inexpensively. However, if the 
science is not done now, the technology will not be available in the 
future when it is critically needed.
    Energy security requires a program that focuses on infrastructure 
security, energy diversification and energy efficiency while facing 
energies challenges. This must be accomplished with environmentally 
friendly technologies using global partnerships and collaboration 
efforts. The University of Tulsa has many components of such a system 
in place and is now working on a plan to include others. In the 
meantime, our federal government must focus more of its funds on 
conventional oil and gas upstream and downstream research while other 
alternatives are developed, such as those through Subtitle J. These 
technologies can't be abandoned because potential replacement 
technologies are years away. It is critical that congress increase its 
commitment to oil and gas research. According to House Rpt. 108-542 
Department of Interior and Related Agencies Appropriation Bill, 2005: 
``Oil and natural gas research is critical to improving current 
technology and ensuring the best use of our domestic oil and gas 
reserves. Despite the Committee's urging to the contrary, these 
research areas continue to be seriously under funded in annual budget 
requests.'' Unfortunately, trends in industry are working against this 
need of additional funds as well.
    The DOE allocates less than 0.3 percent of its budget to actual oil 
and gas research yet ninety five percent of the energy for 
transportation in the United States comes from oil. We urge you to 
reverse the trend and insure that funding is in proportion to the 
problems faced for the sake of our national security.
    Complicating this year's funding issues is the Administration's 
support for major hydrogen energy research at the expense of a 20 
percent reduction in energy efficiency and renewable energy efforts at 
DOE. The hydrogen fuel concept is not generating new energy, but merely 
using hydrogen as a carrier for natural gas or other energy sources 
without any infrastructure to support its wide deployment, whereas 
energy efficiency is the cheapest and quickest way to create more 
available energy for the Nation's future growth. Renewable energy is 
critically important for Oklahoma which possesses abundant wind and 
solar energy potential as well as a fledgling, but rapidly growing, 
biofuel industry. Biodiesel and cellulosic ethanol R&D are very 
important for the Nation while the corn ethanol boom actually diverts 
much needed fossil fuels to its production at very little gain in 
overall energy. Corn ethanol competes directly with beef and other 
livestock production which will adversely impact Oklahoma and other 
states. Further expanding its use at taxpayers' expense will not 
achieve desired energy goals and will create problems in other 
commodities.
    We urge you to reduce hydrogen fuel research and continue robust 
energy efficiency and renewable energy R&D at DOE as well as to 
reinstate a federally managed oil and gas program which complements the 
Energy Policy Act of 2005's consortium approach to natural gas R&D. 
This will have the additional benefit of supporting academic programs 
in petroleum, geosciences, and engineering which are shortchanged in 
the Administration's new approach.
    We thank you for the opportunity to submit this testimony and look 
forward to working with you to ensure that funding for conventional oil 
and gas research continues.
                                 ______
                                 
      Prepared Statement of the American Museum of Natural History
About the American Museum of Natural History
    The American Museum of Natural History [AMNH] is one of the 
nation's preeminent institutions for scientific research and public 
education. Since its founding in 1869, the Museum has pursued its 
mission to ``discover, interpret, and disseminate--through scientific 
research and education--knowledge about human cultures, the natural 
world, and the universe.'' It is renowned for its exhibitions and 
collections of more than 32 million specimens and cultural artifacts. 
With nearly four million annual visitors, its audience is one of the 
largest and most diverse of any museum in the country. Museum 
scientists conduct groundbreaking research in fields ranging from all 
branches of zoology, comparative genomics, and bioinformatics to earth, 
space, and environmental sciences and biodiversity conservation. Their 
work forms the basis for all the Museum's activities that seek to 
explain complex issues and help people to understand the events and 
processes that created and continue to shape the Earth, life and 
civilization on this planet, and the universe beyond.
Support for Department of Energy Science Mission and Goals
    The Department of Energy (DOE) is a leading science agency, 
committed to enhancing U.S. competitiveness by providing world-class 
scientific research capacity and by advancing scientific knowledge in 
physical sciences and areas of biological, medical, environmental, and 
computational sciences-including genomic science. The American Museum 
of Natural History, in turn, is home to one of the world's largest 
natural history collections and to a preeminent molecular research 
program, which aligns with key areas of DOE's mission areas and 
research priorities.
    Building on its strengths in genomic science, in 2001 the Museum 
launched the Institute for Comparative Genomics. The importance of 
comparative genomics cannot be overstated, as investigating genomics 
with a natural history perspective enlarges our understanding of the 
evolutionary relationships among organisms, including threat agents, 
and offers important applications for human health. The Institute's 
research programs leverage the Museum's unique expertise in 
evolutionary biology and draw on its unparalleled facilities, including 
a 700 CPU parallel computing cluster (the fastest, we believe, 
installed in an evolutionary biology laboratory and one of the fastest 
in a non-defense environment), high throughput sequencing capacity, and 
an ultra-cold tissue collection that stores specimens with preserved 
DNA, as well as expertise in using remote sensing and Geographical 
Information System (GIS) technologies to applied research questions.
    The Institute has already enjoyed significant research 
achievements, which include advancing understanding of bacterial 
genomics and the evolution of pathogenicity, developing computational 
techniques to analyze chromosomal sequence data, and winning grants to 
lead international teams in assembling the ``Tree of Life'' and for 
large-scale collaborative projects in the frontiers of integrative 
biology and in plant genomics. Other current projects include 
sequencing pathogens and, with NIH support, tracing the evolution of 
pathogenicity and transfer of disease-causing genes over time and 
between species-contributing to the advancement of national security 
research by increasing the knowledge base of current pathogen 
distribution and motility in the landscape. With this distinguished 
record, the Institute now seeks to advance its microbial genomics and 
computation research and training programs, including upgrading high 
throughput instrumentation, expanding the supercomputing cluster for 
biocomputation, supporting postdoctoral trainees to build the 
scientific workforce to sustain America's competitiveness, and 
expanding related public education and outreach in a teaching 
laboratory located in the new Hall of Human Origins.
    Recognizing its potential to support the Department of Energy in 
its goals to strengthen U.S. scientific discovery and economic 
competitiveness, advance the frontiers of knowledge in areas of 
biological and computational sciences, and provide the laboratory 
capabilities and infrastructure required for U.S. scientific primacy, 
the Museum seeks in fiscal year 2008 to draw on the unparalleled 
resources of its Institute of Comparative Genomics in a partnership 
with DOE to advance these shared goals.
                                 ______
                                 
       Prepared Statement of the American Wind Energy Association
   increased r&d investments are crucial for wind energy to become a 
 mainstream power source and help significantly reduce global warming 
                               pollution
    The American Wind Energy Association \1\ (AWEA) appreciates this 
opportunity to provide testimony for the record on the Department of 
Energy's fiscal year 2008 wind energy program budget before the Senate 
Appropriations Subcommittee on Energy and Water Development.
---------------------------------------------------------------------------
    \1\ The American Wind Energy Association or AWEA, was formed in 
1974. The organization represents virtually every facet of the wind 
industry, including turbine and component manufacturers, project 
developers, utilities, academicians, and interested individuals.
---------------------------------------------------------------------------
    For fiscal year 2008, the Bush Administration requested wind energy 
research and development (R&D) investments of only $40.1 million--a $4 
million cut below current spending. This funding request does not 
recognize the strong contribution that wind energy is making--and can 
make--to produce clean energy, new jobs, and significant reductions in 
global warming pollution.
Request for the Department of Energy Wind Program: $110 million
    AWEA requests a funding level of at least $110 million for the wind 
energy program at the Department of Energy (DOE) to support wind energy 
development at the national, state, and local levels. Working in 
conjunction with the U.S. wind industry, power producers, suppliers, 
industrial consumers and residential users, DOE provides important 
technical support, guidance, information, and limited cost-shared 
funding for efforts to explore and develop wind energy resources.
    AWEA would like to commend the DOE wind program for its efforts to 
involve the industry in its program planning process. As a whole, the 
department has solicited input from AWEA on the direction of its 
program and has been responsive to comments received from the industry.
            Overview
    Wind energy could ``supply up to 20 percent of our nation's 
electricity.''--President George W. Bush, February 20, 2006.
    Wind energy development in the United States is coming off a record 
year, with nearly 2,500 megawatts (MW) of new wind energy installed 
across 22 states. The industry expects to break that record in 2007. At 
the beginning of 2007, over 11,000 MW of wind energy facilities are 
operating in the United States, producing the equivalent amount of 
electricity needed to power about 3 million average American 
households.
    Wind energy works for the environment and the economy because it 
generates energy without fuel, while providing a reliable hedge against 
rising energy costs. In addition, wind lowers consumer energy prices by 
offsetting increased costs in fossil fuels, offers significant rural 
economic development opportunities for communities, strengthens the 
nation's security by lessening our reliance on foreign sources of 
energy, and provides clean, emission-free electricity.
    The industry believes that with smart investments today, wind can 
grow to supply fully 20 percent of America's electric power. During his 
2006 State of the Union speech, President Bush stated that wind could 
eventually supply 20 percent of our electric supply and proposed 
spending more on R&D. With these factors in mind, wind energy is on the 
verge of becoming a major player in energy supply for the nation. 
However, a number of obstacles must be eliminated in order for wind to 
reach its full potential and become fully cost competitive with 
traditional energy technologies.
    The work that takes place at DOE's wind program is a vital 
component in helping to eliminate those obstacles. AWEA appreciates the 
support the subcommittee has provided to the DOE wind program in recent 
years.
    For fiscal year 2008, the Administration requested only $40.1 
million, which is a $4 million cut below current spending of $44 
million. This funding request is not consistent with the President's 
call for more R&D in this area and does not recognize the strong 
contribution that wind energy is making--and can make--to produce clean 
energy, new jobs, and significant reductions in global warming 
pollution.
    We strongly believe that the funding provided by the subcommittee 
should reflect the important work conducted by the wind program and 
respectfully request that funding be significantly increased above the 
request level.
    The wind energy program at the Department of Energy has a strong 
history of success. Over the last twenty years, the cost of wind energy 
has dropped by more than 80 percent, to a level that is close to 
competitive with traditional energy technologies. The cost of wind 
energy is currently between 5.5 to 9.5 cents per kilowatt hour (kWh), 
not including the Production Tax Credit (PTC). Over the last 2 years, 
however, the cost of wind energy--and all other sources of producing 
electric power--has actually been going up due to increases in 
commodity prices and short-term extensions of the renewable energy PTC.
    Cost shared industry/government research and development activities 
at DOE and the National Renewable Energy Laboratory (NREL) have played 
an important role in this achievement. Programs such as Wind Powering 
America have been extremely effective in educating interested parties 
across the country on the benefits of wind power. We strongly support 
the continuation of the project.
Utility-Scale, Land-Based Turbine Technology: $50 million
    The requested funding for further development of utility-scale, 
land-based turbine technology is very important to the wind industry. 
The wind industry requests $50 million for this program in order to 
reduce capital cost, improve capacity, and provide a foundation for 
wind energy technologies.
    The primary focus of this program is to reduce costs and increase 
reliability of the technology. Federal investments are needed because 
there are fundamental technical issues that are not yet understood that 
are decreasing reliability and increasing costs. In addition, dramatic 
cost reductions will almost certainly require application of unproven, 
high risk concepts, such as those below:
            Component Development
    Rotor blades.--There are multiple opportunities for advanced 
materials and blade configurations to reduce the cost of energy from 
wind turbines. Promising areas for additional support are in developing 
turbine blades that can be easily assembled on-site and developing 
aeroelastically tailored blades, or blades that are able to change 
shape in response to the wind as a means of limiting stress.
    Controls Sensors.--Advanced sensors to monitor the loading and 
position of wind turbine blades and other components that can be cost-
effectively combined with modern control theories.
    Other Components.--Towers and drive train systems are other major 
components where innovation is needed to reduce the cost of energy. In 
particular, developing a tower system that addresses transportation and 
installation constraints currently preventing further cost savings in 
these areas is of crucial importance.
            Advanced Controls and Models Research
    The application of innovative turbine control strategies shows 
considerable promise in helping to reduce loads and thus reduce the 
cost of energy. Substantial work is needed to fully understand the 
complex relationship between atmospheric conditions and wind turbine 
dynamics and how to utilize controls to optimize performance and 
minimize costs.
            Resource Characterization
    For advanced control theory to optimally reduce loads, the 
characteristics of the atmosphere within which the turbines are 
operating must be better understood. Research dollars focused on 
achieving the best means of characterizing the variations in wind 
across the rotors depending on wind speeds and height of the turbines, 
tools to measure these characteristics, and models to represent the 
inflow for analytical purposes are all important efforts.
Market Acceptance/Transformation: $34 million
    We request $34 million for market acceptance/transformation 
activities at DOE. Increased funding in this area would be targeted 
toward better understanding the impact of wind turbines on wildlife as 
well as developing tools and educational materials for policy makers 
and regulators to assist them in better understanding the environmental 
impact of wind energy projects. Funds are used for cost-shared research 
programs with industry and wildlife organizations to address targeted 
issues with avian and bat species.
    States and permitting officials also seek technical assistance on 
project siting issues. DOE could serve as a clearinghouse for 
information and resources in these areas. Outreach to these audiences 
is also required so permitting authorities feel they are making 
informed choices. In addition, resources in this area would also be 
used to develop updated resource maps at an elevation of 100 meters 
above ground level. These maps have identified previously unknown wind 
resources in several states, spurring interest in the resource from 
state policy makers and regulators.
Reliability and Testing: $10 million
    We would like to see $10 million provided for reliability and 
testing. Increased funding in this area would be used for three primary 
purposes:
  --Support for a public/private partnership to build blade and 
        dynamometer test facilities;
  --Initiation of research that will increase the reliability of wind 
        project energy projections, and;
  --Expansion of research into the causes of premature failure of major 
        wind turbine components such as gearboxes and generators.
Advanced Applications: $10 million
    The Advanced Applications research will be targeted toward the 
integration of wind energy into generation of hydrogen, deep-water 
offshore technology research, resource characterization, loads and 
environment characterization and the environmental impacts of offshore 
applications. The wind industry requests $10 million to fund research 
in these areas. Such research is needed to identify the potential for 
wind energy in these areas as well as position the United States to 
play a leading role in the development of environmentally compatible 
wind energy applications.
    AWEA believes that offshore wind energy facilities can play an 
important role in meeting the long-term energy needs of the country. 
However, we also believe that the focus of the DOE program in the near 
future should be placed on R&D efforts for land-based turbines.
Distributed Wind Systems (100 kW and below): $6 million
    AWEA is encouraged by DOE's proposed increase for small wind R&D, 
but believes an even greater emphasis is needed for this technology 
(used to power an individual home, farm or small business). Distributed 
generation with small customer-sited power plants has great potential 
for reducing energy costs, promoting competition in the marketplace, 
and strengthening the nation's electrical supply network.
    This program has provided invaluable support for the development 
and testing of more reliable small turbines for homes and businesses. 
The development of computer simulation tools allows designers to 
understand the furling behavior (when a turbine turns itself out of the 
wind during periods of very high wind speeds) of the turbines. AWEA 
believes that a $6 million DOE small wind budget would ensure that 
additional support is provided for certification testing of small wind 
generators. $6 million would also adequately fund research into 
manufacturing techniques to produce high-volume, low-cost components, 
with aerospace material properties and performance. These are all areas 
where support is needed to reduce the cost of energy and increase the 
reliability of small turbines.
    The high up-front costs of small wind systems make it very 
difficult for this technology to gain wide acceptance in the domestic 
market. This would change if DOE had the resources to work with 
America's small wind manufacturers to achieve cost reductions similar 
to those achieved by the large, utility-scale wind industry. In some 
states that provide a rebate for purchasers, small wind turbine 
manufacturers have experienced a surge in sales, demonstrating the 
public support for cost-effective small wind turbines.
                   additional wind industry priority
Wind Energy Integration Efforts within DOE's Electricity Delivery and 
        Energy Reliability Office (This funding is not located in the 
        DOE Wind Account.)
    DOE has requested only $115 million--an 8 percent cut--for its 
Electric Delivery and Energy Reliability Office responsible for 
assisting in modernization of the electric grid, including transmission 
corridor designation and federal line permitting under the Energy 
Policy Act of 2005. This work is crucial to growing the wind industry 
because it holds the key to moving wind energy from generally rural 
areas where it is produced to population centers where it is needed.
    Resources would be focused on continuing the educational activities 
that allow utilities and policy makers to make informed decisions 
regarding the impact of wind on the electric transmission system. As 
the industry grows and the size of wind projects increases, additional 
case studies showing the impact of these large projects on the grid are 
needed. The industry has experienced considerable success in completing 
integration studies of major portions of the Midwestern grid. These 
studies have been well received by regulators and transmission 
providers and have helped to quantify the impact of wind on the 
transmission system. Similar studies of the western portion of the 
country and studies of higher wind penetration levels are needed. 
Additionally, educational materials for utility control room operators 
to help them understand the impact of wind power plants and how they 
can manage operational impacts with new forecasting tools would be 
helpful.
                               conclusion
    The President and the Congress have called for an increased 
commitment to the development of domestic renewable energy resources, 
particularly wind energy, to meet our nation's growing demand for 
electricity. Continued investments in wind energy R&D are delivering 
value for taxpayers by developing a domestic energy source that 
strengthens our national security, fosters rural economic development, 
creates new high-tech jobs, and helps protect the environment.
    While the wind industry continues adding new generation capacity, a 
number of challenges still exist. Continued support for the Department 
of Energy's wind program is vital to helping wind become a mainstream 
energy source that helps significantly reduce global warming pollution. 
We believe that the funds appropriated to the wind program need to be 
commensurate with the President's call for more renewable energy, and 
urge the subcommittee to approve a significant increase in funding for 
the wind program.
    AWEA appreciates the opportunity to provide this testimony to the 
Subcommittee. Thank you.
                                 ______
                                 
 Prepared Statement of the National Research Center for Coal and Energy
  programs in fossil energy, energy efficiency, and energy reliability
    Thank you for considering testimony from the National Research 
Center for Coal and Energy (NRCCE) on programs in Fossil Energy, Energy 
Efficiency, and Electricity Delivery. Comments and recommendations are 
provided in the following sections of our testimony.
Office of Fossil Energy
    Our focus is on the core Fossil Energy R&D program, for which the 
Administration has recommended insufficient funding for fiscal year 
2008.
Innovations for Existing Plants Program
    The United States currently has more than 300 GW of coal-fired 
capacity that supplies over 50 percent of the Nation's electricity. 
Twenty years from now, most of these plants will still be providing 
base-load power. The Innovations for Existing Plants Program addresses 
the continuing critical role these plants will play in the future. 
However, the Administration has chosen not to fund this program in 
fiscal year 2008. It is prudent to invest in improving the operation of 
our existing workhorse power generation fleet. Our nation will benefit 
from advanced technology's ability to reduce the environmental impact 
of energy generation. This program should be restored to its previous 
level of $25 million for fiscal year 2008.
  --Mercury Research.--Recent field tests on mercury control technology 
        have shown that more research is required to obtain sufficient 
        understanding of the chemistry of mercury for different coal 
        types and the effectiveness of capture processes. Of the 
        funding recommended, $10 million should be directed to the 
        control of mercury emissions.
  --Optimal Water use in Power Generation.--Power generation accounts 
        for 40 percent of all water withdrawals in the United States, 
        second only to agriculture, and competes with other industrial, 
        agricultural, and consumer needs. Water scarcity exists not 
        only in the arid Western States but also in the East where even 
        large rivers like the Potomac and Susquehanna are unable to 
        support additional power plants. Of the funding recommended, 
        $10 million should be directed toward optimizing the use of 
        water in power generation.
  --Use of Combustion By-Products.--The By-Products sub-element of the 
        Existing Plants Program keeps combustion by-products such as 
        coal ash and scrubber sludge out of waste streams from power 
        plants by developing environmentally friendly and economically 
        attractive alternative uses. Before this sub-program was 
        implemented, only 25 percent of combustion byproducts were 
        beneficially used. That number is now over 40 percent. Without 
        continued support, we expect increasing amounts of byproduct to 
        enter the Nation's landfills. Of the funding recommended, $3 
        million should be directed toward the combustion by-products 
        program.
Fuels Program
    NRCCE recommends adding $9 million to the Fuels Program to 
reinstate a national liquid fuels program as a major thrust area and $3 
million for the advanced separations research program.
  --Coal-to-Liquids.--The promise of coal-to-liquids (CTL) technology 
        for producing transportation fuels and chemicals has stimulated 
        expressions of interest from at least 10 governors, the U.S. 
        Department of Defense, and over 15 companies for constructing 
        plants to promote energy independence. Developers cite the need 
        for R&D to reduce plant costs, to improve conversion 
        efficiency, to reduce the environmental footprint of CTL 
        technologies, and to qualify CTL fuels for use in legacy and 
        future transportation vehicles.
    We need a national advanced core research program to ensure success 
of these new CTL plants, which in most cases will be first-of-a-kind 
commercial deployments in the United States. Funds should be directed 
toward computational research on process development and economic 
modeling, co-production with biomass and other technology advances to 
minimize CO2 emissions, and advanced research in catalysis, 
wax separation, and reactor design engineering. Ancillary benefits 
include educating the U.S.-based human resource pool needed to meet 
personnel demands created by deployment of CTL industries on a large 
scale. Of the amount recommended, $1 million should be directed to 
continue the work initiated under Annex II of the U.S.-China Protocol 
for Energy Research to obtain information about China's CTL technology 
and the environmental /economic impacts of CTL plants in Shanxi 
Province. This valuable information will be obtained at a small 
fraction of the cost of financing a similar program in the United 
States.
  --Advanced Separations Research.--The current emphasis on obtaining 
        clean gas streams in gasification plants and on reducing 
        mercury and other pollutant emissions from pulverized coal 
        plants warrants continued research in advanced separations. 
        This research will yield cleaner coals that combust more 
        efficiently, thereby reducing carbon emissions as well.
Carbon Sequestration
    The Zero Emissions Research and Technology (ZERT) Center is a 
consortium of five national labs and two universities that conducts 
coordinated research on geologic sequestration of carbon dioxide. The 
Center's fundamental research complements the Regional Carbon 
Sequestration Partnership and FutureGen programs and should be 
continued at $8 million in fiscal year 2008.
Oil and Natural Gas Programs
    The Fossil Energy program in oil and natural gas supports small and 
independent producers--companies which do not have the money and may 
not have the expertise to undertake advanced research to extract the 
harder-to-get resources from mature fields. The oil and natural gas 
programs are largely responsible for training our next generation of 
petroleum engineers and geologists. Projects funded by the oil and gas 
programs support more graduate student degrees in these areas than any 
other single source. The natural gas program is laying the groundwork 
for substantial future resource recovery, including production from 
methane hydrates (which represent a potential 100 years supply for the 
United States) and from deep reserves such as the three mile well 
recently completed in Texas. The enhanced oil recovery program has the 
potential to provide the United States with more than 89 billion 
barrels of domestic oil that is currently not recoverable while 
sequestering large quantities of CO2. Curtailment of these 
programs will severely restrict our ability to produce our oil and gas 
reserves. We recommend restoration of these programs to their previous 
historic levels.
  --Petroleum Technology Transfer Council.--We recommend continued 
        funding at a level of $2.8 million for the programs 
        administered by the Petroleum Technology Transfer Council 
        (PTTC). The PTTC, working regionally through 10 universities, 
        operates resource centers for oil and natural gas information, 
        training, and conferences, all directed to the needs of small 
        producers. PTTC programs play a critical role in providing 
        independent producers throughout the country access to the best 
        technology to explore for and to develop new and innovative 
        domestic energy opportunities while remaining competitive in a 
        global energy market. Federal support will be equally matched 
        with state and private dollars.
Advanced Research
    NRCCE recommends the addition of $5 million to the Advanced 
Research Program to support computational energy sciences and materials 
research.
  --Supercomputing Science Consortium.--One of the major components of 
        the Computational Energy Sciences program is support for 
        advanced computational research at universities and national 
        labs through time allocations at facilities such as the 
        Pittsburgh Supercomputing Center (PSC). This activity is 
        coordinated by the SuperComputing Science Consortium 
        (SC2), an organization consisting of the National 
        Energy Technology Laboratory (NETL), the PSC, and higher 
        education and advanced research organizations in the region 
        near NETL. The SC2 also conducts activities at the 
        K-12 educational level that stimulate students to undertake 
        science and engineering careers. Of the funds recommended, $2 
        million should be directed to the Computational Energy Sciences 
        budget to support the SC2 program.
  --Materials Research.--An expanded suite of advanced materials is 
        needed to improve the energy efficiency and environmental 
        performance of coal-based power systems. NRCCE recommends that 
        the Administration request for this program sub-element be 
        increased by $3 million to a level of $10.1 million for fiscal 
        year 2008. The additional funding should be directed toward the 
        development of specialty metals, new alloys, and surface 
        coatings that can function at substantially higher temperatures 
        and/or withstand highly corrosive environments in applications 
        such as sensors and controls, fuel cells, and harsh 
        environments in multiphase flow energy systems. Of the added 
        funding, $2 million should support initiatives at NETL-Albany 
        and universities, for which cost sharing from industry should 
        be required.
          office of freedom car and vehicle technologies/eere
    NRCCE recommends $3 million for two programs in vehicle 
technologies that promote reduced emissions and energy savings in the 
transportation sector.
  --Transportable Emissions Testing Laboratory.--U.S. DOE established a 
        specialized Transportable Emissions Testing Laboratory in 1989 
        for research on improving fuel economy, advancing alternative 
        fuels technology, and reducing exhaust emissions of heavy duty 
        vehicles. The Laboratory provides valuable data to government 
        agencies to establish reasonable emission level standards and 
        to assess the effectiveness of new technologies. Heavy-duty 
        engine emission standards established in 2007, and increasing 
        interest in biodiesel, ethanol, hydrogen, natural gas and coal-
        to-liquids fuel necessitate further advanced fleet performance 
        measurements. Of the funds recommended, the Transportable 
        Emissions Testing Laboratory program should be continued at $2 
        million in fiscal year 2008.
  --Lightweight Composite Materials.--Advanced composite materials 
        improve energy efficiency by reducing structural weight to 
        allow a higher fraction of payload for vehicles limited to the 
        80,000 pound maximum weight restrictions on national highways. 
        Results from this program enable the design and fabrication of 
        lighter-weight trailers, trucks, and buses. Significant fuel 
        savings and reduced emissions are obtained through improved 
        fuel efficiency associated with lighter vehicles and/or a 
        reduced number of trips to deliver multiple payloads. Of the 
        funds recommended, the Lightweight Composite Materials for 
        Heavy-Duty Vehicles Program should be continued at $1 million 
        for fiscal year 2008.
                 office of industrial technologies/eere
    Wasted energy is the single largest source of currently available 
energy in the United States. The Industrial Technologies Program (ITP) 
in EERE is the DOE's lead agency for improving industrial energy 
efficiency through high-value research, plant assessments, software 
tools, and training. Enhanced industrial energy efficiency is the most 
cost-effective strategy for improving U.S. industrial competitiveness 
while reducing greenhouse gas emissions from energy-intensive 
manufacturing plants. In addition, the U.S. trade deficit can be 
reduced through export of industrial energy efficiency technologies and 
equipment to developing countries such as China and India. The ITP 
budget should be restored to its 2005 level of $73 million.
         office of electricity delivery and energy reliability
    In fiscal year 2006, the Subcommittee appropriated funds for the 
Integrated Control of Next Generation Power Systems. This program 
enhances the reliability and security of the power grid through 
technology which is based on advanced communication, computer control, 
and electronics that enable real-time detection of system problems. The 
electrical circuits are then automatically reconfigured to minimize the 
potential impact of a natural disaster, human error, or a terrorist 
attack. This project will enable DOE to design system architectures to 
effectively control the intelligent, interoperable electric grids of 
the future. This program should be continued in fiscal year 2008 at $2 
million.
                                 ______
                                 
       Prepared Statement of the American Iron & Steel Institute
    The basis for this testimony is to urge Congress to restore funding 
of the Industrial Technologies Program (ITP) line item for Steel within 
the Energy Efficiency and Renewable Energy section at the Department of 
Energy [DOE] to the original level of $10 million.
    The stated goal of the ITP is to reduce the energy intensity of the 
U.S. industrial sector through coordinated research and development, 
validation, and dissemination of energy-efficiency technologies and 
operating practices. The Department of Energy and domestic steelmakers 
co-fund cutting-edge research that addresses the needs of the nation 
and our industry. The goal of these projects is to reduce energy 
consumption [thereby diminishing the nation's dependence on foreign 
sources of oil], lessen environmental impact [through emissions 
reductions] and increase the competitiveness of domestic manufacturers. 
Furthermore, what makes the ITP program so unique and appropriate is 
that only those projects with ``dual benefits'' [i.e., a public benefit 
such as reduced emissions or petroleum use, which justifies the DOE 
investment; and an industry benefit such as a more efficient 
steelmaking process, which justifies the industry investment] are 
initiated. It is important to note that federal funding does not go to 
steel companies, it is pooled with steel industry funds and awarded to 
qualified universities, national labs, and private research 
organizations through a competitive process.
    In 2003, Congress appropriated $10 million to fund the Steel 
component of ITP. Unfortunately, in recent years the program [and the 
projects it supported] suffered deep budget cuts. This is the case once 
again, as for fiscal year 2008, the administration requested 
approximately $1.6 million.
    It must be noted, that without restoring funding to fiscal year 
2003 levels, true breakthrough programs cannot be fully developed. 
Universities, research labs and steelmakers have reached the threshold 
of what can be accomplished [in energy-efficiency improvements and 
emissions reductions] under the current funding structure.
    The chart below is representative of the gains in energy efficiency 
made by materials manufacturers since 1990, i.e., during the time they 
have partnered with DOE. 


    This chart clearly shows that steelmakers have become very 
efficient for the processes they operate today. It is not coincidental 
these gains have occurred during the time the DOE ITP program for Steel 
was funded at $10 million annually. To make the type of gains in the 
future that have been seen since 1990, new process development is 
required and new process development requires funding be restored to 
historical levels. Some of the most promising new process development 
projects with the potential to reduce steelmaking CO2 
emissions by more than 70 percent are Ironmaking by Molten Oxide 
Electrolysis [now underway at the Massachusetts Institute of 
Technology] and Ironmaking by Flash Smelting using Hydrogen [University 
of Utah]. Both of these technologies show great promise and need fiscal 
year 2008 funding to proceed.
Summary
    The Industrial Technology Program-Steel selects projects that have 
both public and private benefits, justifying the investment of both DOE 
and industry. In addition, the research is conducted at the most 
qualified facilities in North America, with over 80 percent of funding 
supporting tasks at universities, national labs and technology 
developers, many of which are small businesses. ITP-Steel is a unique 
and successful program that is not only beneficial to the domestic 
steel industry; it is beneficial to the nation as we attempt to become 
more energy-efficient while significantly improving the environment.
    Please consider restoring ITP-Steel funding to the original level 
of $10 million so that its public and private benefits can reach even 
further into our economy. Thank you for your consideration.
                                 ______
                                 
    Prepared Statement of the Nuclear Engineering Department Heads 
 Organization (NEDHO) and the National Organization of Test, Research, 
                      and Training Reactors (TRTR)
    Chairman Dorgan, Ranking Member Domenici, members of the 
Subcommittee, we appreciate the opportunity to provide testimony to the 
Subcommittee regarding fiscal year 2008 Energy and Water Development 
Appropriations legislation. Together, NEDHO and TRTR provide 
representation for the entire U.S. academic nuclear engineering 
community on issues related to federal policy and funding.
    NEDHO and TRTR urge the Congress to provide funding for University-
based nuclear engineering programs and research reactor programs 
commensurate with the authorized levels of the Energy Policy Act of 
2005, which is $50.1 million for fiscal year 2008.
    The chart below provides a recommended breakdown of funding.

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

    As you well know, Nuclear Science and Engineering (NSE) plays a 
critical role in ensuring the U.S. energy supply, reduction of the 
global warming gases, and the national security. With regard to energy 
independence, nuclear reactors are currently generating about 20 
percent of the nation's electricity needs, and have contributed to the 
reduction of nearly 700 million tons of carbon dioxide and over one 
million tons of nitrogen oxide. These are equivalent to 96 percent of 
carbon dioxide and 41 percent of nitrogen oxide emissions from 
automobiles in the United States.
    In order to meet the anticipated increase in electricity demand, 
utilities are planning to build new nuclear reactors. There will be a 
corresponding increase in demand for scientists and engineers to 
design, license, operate, and maintain these new reactors. Nuclear 
utilities, nuclear vendors, and the Nuclear Regulatory Commission (NRC) 
need hundreds of well-trained nuclear engineers and scientists. 
Moreover, a large number of nuclear scientists and engineers are needed 
to work within the DOE complex in such programs as the NP2010, 
Generation IV, Nuclear Hydrogen Initiative, and the Global Nuclear 
Energy Partnership (GNEP).
    In its early years, nuclear science and engineering received 
significant federal funding that led to major developments such as 
nuclear submarines, research reactors, and commercial power reactors. 
However, the TMI accident, cheap fossil fuels, significant delays in 
construction of nuclear plants due to changing regulations, public 
interventions, and a surplus of electricity led to a perception that 
nuclear engineering was a field without a future and as a result, 
undergraduate enrollments decreased. Graduate enrollments also 
decreased but at a somewhat slower rate since they are not linked as 
strongly to the nuclear power industry. This situation was exacerbated 
by the reduction of federal support for NSE, including research 
support, fellowships, and scholarships.
    The downturn in enrollments and reduction in federal funding led to 
the demise of over half of the NSE programs and university nuclear 
reactors from 1980 to 2000, leading to a seven-fold reduction in the 
number of BSE graduates over this period of time. Efforts to reduce and 
reverse these alarming trends in enrollments, departments, and reactors 
led to the revitalization of the University Programs within the Nuclear 
Energy office of DOE including funding for fellowships/scholarships, 
Nuclear Engineering Education and Research (NEER), Nuclear Energy 
Research Initiative (NERI), University Reactor Sharing and University 
Reactor Instrumentation programs, revitalization of radiochemistry, 
DOE-Industry Matching grant, Innovations in Nuclear Infrastructure and 
Education (INIE), and more recently, the Young Faculty awards. These 
programs contributed mainly to the graduate education and training of 
engineers and scientists needed for national laboratories, but they 
also helped to improve departmental and reactor facility 
infrastructure.
    Historically, Congress has provided funding for the nuclear 
engineering discipline through a separate line item in the U.S. 
Department of Energy, Office of Nuclear Energy entitled ``University 
Reactor Infrastructure and Education Assistance.'' This program has 
received modest increases in funding since the end of the 1990s when it 
was nearly zeroed out. In the fiscal year 2007, both the U.S. House and 
Senate Energy and Water bills recommended funding of $27 million.
    The existing funds are not stable and flexible enough to meet the 
current and the anticipated demand for NSE graduates (BS, MS, and PhD) 
over the next decade. Therefore, we believe that the nation's policies 
on energy and national security require the significant expansion of 
the U.S. nuclear engineering education enterprise. Driving factors for 
this expansion include the anticipated Nuclear Power Renaissance, 
increased focus and interest in developing advanced fuel cycle 
technologies and reactor designs, and the expanding need for 
development and deployment of nuclear materials detection technologies 
for homeland security and monitoring and prevention of nuclear 
proliferation.
    The U.S. nuclear engineering education community stands ready to 
meet these approaching challenges. However, it will require increased 
resources from the federal government--beyond the levels enacted in 
previous fiscal years--and include funding for scholarships and 
fellowships, support of university-based reactor facilities, and basic 
and applied research.
    As such, NEDHO and TRTR believe the federal government should 
provide funding for University-based nuclear engineering programs 
commensurate with the authorized levels of the Energy Policy Act of 
2005, which is $50.1 million for fiscal year 2008.
    Also, as we are sure the committee is aware; the Administration has 
proposed the termination of funding for the University Reactor 
Infrastructure and Education Assistance account line in its fiscal year 
2007 and fiscal year 2008 budget requests. DOE NE has indicated that 
its preference is to fund academic nuclear engineering research efforts 
through its existing program lines. This means the funds for 
infrastructure and fellowships/scholarships are significantly reduced 
or completely eliminated! It is quite unfortunate and unusual that in 
this time of great need for new nuclear engineers and scientists, the 
federal government is not providing funding for nuclear engineering and 
education.
    NEDHO and TRTR are not in a position to make recommendations as to 
the specific budgetary mechanics of providing funding to university 
programs. However, our two organizations believe strongly that 
university funding must be increased, stabilized, and flexible to allow 
for the current and expected growth to support expanded research, as 
well as reinvestment in human, reactor infrastructure, and major 
research equipment.
    Finally, we recommend that the Subcommittee consider the recent 
report by the American Nuclear Society, entitled ``Nuclear's Human 
Element.'' NEDHO and TRTR endorse the principal findings and 
conclusions of this report, which lays out a framework for improving 
federal investments in nuclear science and engineering education in the 
longer term. We believe to maintain the nation's competitiveness, it is 
essential that Congress and the Executive Branch take the necessary 
steps in establishing a strong and effective platform for meeting the 
technological and human resources need in nuclear science and 
engineering.
    We look forward to working with you in formation and implementation 
of a progressive program for nuclear engineering research and 
education.
    Thank you.
                                 ______
                                 
    Prepared Statement of the North American Die Casting Association
    As President of the North American Die Casting Association (NADCA), 
I respectfully submit this testimony in support of the HyperCAST 
funding request for $1.5 million in the U.S. Department of Energy, 
Energy Efficiency and Renewable Energy, Vehicle Technologies Program 
filed with the Subcommittee by Senators Edward Kennedy and Ken Salazar.
    NADCA is the nation's leading not-for-profit technical organization 
representing all facets of the U.S. die casting industry. NADCA exists 
to support our domestic industry and to maintain our global competitive 
lead through the continued development of cutting edge technology.
    NADCA has decades of successful experience coordinating research 
and development activities between various U.S. funding agencies (DOE 
and DOD), government laboratories, universities, and metalcasting 
companies. The technology and processes developed through these 
programs is rapidly transferred by NADCA to small, medium and large 
casting companies nationwide. Past programs have earned strong bi-
partisan support from Congress.
                                overview
    Congress has long recognized the overwhelming need to dramatically 
curtail wasteful automotive and vehicle energy consumption in our 
nation. Maximizing energy efficiency in our domestic transportation 
system is a matter of economic security and environmental necessity.
    The North American Die Casting Association is collaborating with 
the U.S. Department of Energy, Vehicle Technologies Office in an effort 
to rapidly and dramatically advance these goals. This innovative and 
dynamic program is HyperCAST.
    The HyperCAST program goal is to support our nation's 
transportation energy efficiency goals by developing technology for 
high performance, light weight, cast metal components for energy 
savings in commercial and military vehicles and trucks.
    The HyperCAST program will deliver a variety of important benefits 
including:
  --Providing significant new energy savings in transportation 
        technology, commercial and military vehicles and trucks;
  --Developing new alloy and process development to maintain our 
        domestic casting industry as a technology leader in the world 
        market;
  --Conducting university based research at Ohio State University, Case 
        Western Reserve, the Colorado School of Mines, and Worchester 
        Polytechnic Institute;
  --Transfering new technology broadly to small and medium casting 
        shops across the United States . . . 80 percent of metalcasting 
        companies have fewer then 100 employees; and
  --Matching every federal dollar with contributions from industry.
    There is no doubt that enhanced fuel efficiency and alternative 
fuel vehicles contribute to our nation's energy security. High 
performance light weight components are necessary in making petroleum 
fueled cars and trucks more energy efficient. In addition, advanced 
high strength light weight materials and processes for the design of 
components offer the greatest opportunities for the development of new 
vehicles that do not require petroleum fuels.
    The HyperCAST research is targeted at the development of high 
performance light weight aluminum and magnesium castings for energy 
efficient components for transportation. More specifically, this 
project entails the development of materials and processes for cast 
light weight frame, body, chassis and powertrain components for fuel 
efficient passenger cars and both commercial and military trucks. 
Therefore, the project is cross-cutting as it serves to meet goals of 
the FreedomCAR and 21st Century Truck programs. The advanced materials 
and processes developed will have a focus on fuel efficiency and cost 
effectiveness.
    These important technological advancements will also enhance the 
U.S. metalcasting industry's ability to maintain a lead role in the 
world market. It is technology that enables this vital industry to 
compete globally and to keep jobs in the United States.
    The objective of HyperCAST is to develop materials and processes 
for high strength light weight cast components for vehicles that are 
affordable and offer the potential for 60 percent weight reduction and 
related improvement in energy efficiency. NADCA and university 
researchers are confident that these goals can be met without 
compromising vehicle performance, cost, safety or recyclability.
    The following examples are offered to describe the energy saving 
opportunities offered by the HyperCAST Program.
    Example 1: A cast aluminum engine block with cast iron sleeves 
currently weighs 85 pounds. Moving to a magnesium composite material 
would result in about the same productivity improvement but would yield 
a casting weight of 49 pounds--a savings of 36 pounds or 42 percent.
    Example 2: An aluminum transmission case casting currently weighs 
31 pounds. Casting this component with a new aluminum composite 
material and considering a 20 percent strength increase would yield a 
casting weight of 27 pounds. Produced as a magnesium composite 
material, the casting would weigh 22 pounds--a savings of 9 pounds or 
29 percent.
    The HyperCAST numbers show a dramatic potential for improvement in 
our nation's fuel efficiency and environmental impact. There is an 
average of 280 pounds of aluminum in a car. It is estimated that the 
HyperCAST technology can reduce that weight by 100 to 120 pounds 
without compromising strength, safety or performance. In addition, for 
every pound reduced automakers can cut two more pounds or 200 to 240 
more pounds, from the drive train. Finally, for every pound reduced in 
the car's weight, estimated at almost 360 pounds, an environmental 
benefit will be realized through an annual reduction in carbon monoxide 
of 2 pounds for every one reduced. That would be 720 pounds of carbon 
monoxide reduced annually for every car manufactured with the HyperCAST 
technology.
    This project will utilize researchers from the premier universities 
(Ohio State University, Case Western Reserve University, Colorado 
School of Mines, and Purdue University) and government laboratories 
with experience in cast materials and processes for the research 
activities, premier casting companies for demonstration of the research 
results, and the industry associations for coordination of efforts and 
technology transfer. The request is supported by the following:
  --Dr. Diran Apelian, Director of Metals Processing Institute at 
        Worcester Polytechnic Institute;
  --Dr. John Moore, Head of the Metallurgy Department at the Colorado 
        School of Mines;
  --Dr. David Schwam, Director of the Metal Casting Laboratory at Case 
        Western Reserve University;
  --Dr. Allen Miller, Professor in College of Engineering at Ohio State 
        University;
  --Tim Stewart, President and CEO of Yoder Industries in Dayton, OH;
  --Richard Rogel, President and CEO of Empire Die Casting., Inc in 
        Macedonia, OH;
  --Paul Head, Vice President of Operations at Empire Die Casting., 
        Inc.;
  --Robert Hopkins, Vice President of Administration at Empire Die 
        Casting., Inc.;
  --Robert Stuhldreher, Director of Casting Operations at Metaldyne in 
        Twinsburg, OH;
  --Scott A. Frens, Senior Sales & Tool Engineer at Fort Recovery 
        Industries in Fort Recovery, OH; and
  --Barry S. Houndshell, Director of Manufacturing at Fort Recovery 
        Industries.
    Finally, the technology developed will be distributed by NADCA 
solely to North American metalcasters in order to provide the North 
American industry with a globally competitive advantage and assist in 
maintaining the viability of metalcasting in North America.
    We hope we can depend on your support to fund this valuable and 
important program.
                                 ______
                                 
         Prepared Statement of the Fuel Cell Power Association
    The Fuel Cell Power Association appreciates the opportunity to 
submit this statement in support of the Department of Energy's Fossil 
Energy, Fuels and Power Systems, Fuel Cell Program. We urge the 
Subcommittee to continue to support this breakthrough program by 
appropriating $80 million for development of this highly efficient, 
clean, and secure energy technology.
    DOE's Fossil Energy Fuel Cell Program, through the Solid State 
Energy Conversion Alliance (SECA) fuel cell activity, is developing 
technology to allow the generation of highly efficient, cost-effective, 
carbon-free electricity from domestic coal resources with near-zero 
atmospheric emissions in central station applications. The program 
directly supports the president's FutureGen project through the 
development of cost-effective, highly efficient, power blocks that 
facilitate sequestration in coal-based systems. The technology will 
also permit grid independent distributed generation applications by 
2010.
    SECA fuel cell systems operating on coal gas are building blocks 
for zero emissions power, the ultimate goal of the President's 
FutureGen Program. These systems are projected to be available at a 
target cost of $400/kw. In addition the technology developed in this 
program will produce electricity at up to 60 percent efficiency in 
coal-based systems, produce near-zero emissions, and easily enables 
carbon sequestration.
    In all applications SECA fuel cells will be both low-cost, with the 
above-stated goals of $400/kw, as well as highly efficient. Integrated 
with coal gasification, the system's 60 percent efficiency compares 
very favorably to the existing coal-based power generation fleet 
average of about 33 percent efficiency. In distributed generation 
applications even higher efficiencies may be reached, and cogeneration 
opportunities can further increase efficiency.
    Along with these attributes fuel cells are one of the cleanest 
technologies available in terms of atmospheric emissions, which 
enhances their attractiveness for urban applications or applications in 
areas of non-attainment for Clean Air Act emissions. They have already 
achieved NOX and SOX emission levels of less than 
0.05 ppm compared to orders of magnitude higher for conventional 
technologies. They also provide 24 hour, silent operation.
    Finally, coal-based fuel cell systems will increase energy security 
by using domestic resources. In distributed generation applications 
fuel cells can eliminate transmission and distribution system 
infrastructure concerns and issues by providing generation near the 
point of use and by being able to operate in a grid-independent mode.
    The SECA Program consists of six integrated industrial 
manufacturing teams designing fuel cell systems, developing the 
necessary materials, and ultimately responsible for deploying the 
technology. These teams are complemented by up to three dozen core 
technology performers providing generic problem-solving research needed 
to overcome barriers to low-cost, high performance technology as 
identified by DOE and the manufacturing teams. The core technology 
teams are universities, national laboratories, and other research 
oriented organizations. This unique structure assures that a variety of 
approaches to solving the problems associated with fuel cells will be 
undertaken in a manner that will increase the chances of success for 
this highly complex technology.
    Several of the manufacturing teams are developing systems for 
application to large central generation systems characterized by 
FutureGen. The remaining manufacturing teams are developing fuel cells 
for possible use in both these large systems as well as in distributed 
generation applications such as auxiliary power units, military power 
applications and remote or on-site power generation.
    The DOE budget request for this program for fiscal year 2008 is 
$62.0 million, slightly below the fiscal year 2007 funding level of 
$63.4 million. Funding of $65 million will continue to support the 
current program, which involves larger-scale Phase II development work 
on the part of manufacturing teams in the program and continued effort 
by the core technology performers. However, in order to deliver full 
scale fuel cell system hardware for the FutureGen project additional 
support of $15 million is necessary to assist and accelerate the 
creation of manufacturing capability by the formation of teams between 
existing fuel cell stack developers and industry, with the goal of 
delivering hardware by the scheduled date of 2011, and also to keep the 
base program on schedule. A rapid advancement to large-scale 
manufacturing is critical to the successful use of fuel cells in the 
FutureGen project and subsequent use in Integrated Gasification 
Combined Cycle (IGCC) facilities on a commercial basis. Significant 
funding over the next several years will allow development of such 
capacity by 2010 so that fuel cell modules can be manufactured and 
delivered to the FutureGen project by 2011. These large-scale modules 
will lead to the higher efficiencies and cleaner performance necessary 
to assure the use of clean coal technologies in the long run.
    We believe that the SECA fuel cell program has achieved the 
progress to date as reported by the program managers, and has excellent 
prospects for achieving program objectives given sufficient funding 
support by DOE and the Congress. Hybrid technology has been 
successfully integrated into the program and an emphasis on use with 
coal-based systems has been established. Industry partners in the 
program have continued and increased cost-sharing support. All major 
stack developers have met the initial goals of the program allowing 
continuance to more advanced stages of development. This technology is 
essential to meeting the efficiency and emissions goals of the 
President's FutureGen program and will also provide low-cost, low-
emissions alternatives for distributed generation applications. 
Therefore, we urge you to support our request for $80 million to 
execute the DOE Fossil Energy, Fuels and Power Systems, Fuel Cell 
Program in fiscal year 2008.
                                 ______
                                 
  Prepared Statement of the Center for Plasma Science and Technology, 
 Florida A&M University, and the Department of Physics, West Virginia 
                               University
    Chairman Dorgan and Members of the Subcommittee: We request an 
appropriation of $5 million to the Fusion Energy Science Program, U.S. 
DOE Office of Science, for basic research on the control of turbulent 
hot plasma in fusion power reactors. This program contributes to the 
work of the International Thermonuclear Experimental Reactor (ITER) 
program, an international fusion effort to which the United States is 
committed as a full partner.
Introduction
    As global population increases and the standard of living of third 
world countries rises, the demand for energy will increase 
substantially over current levels. The report, Future of Coal, released 
March 14, 2007 by researchers at MIT, projects that fossil energy will 
be the dominant fuel source well into the future. Generating electric 
energy and powering our transportation sector with fossil fuels will 
substantially increase CO2 emissions, thereby exacerbating 
concerns about greenhouse gas emissions which can alter the global 
climate.
    Near term, we accept the reality that fossil fuels will power the 
global economy. Carbon sequestration offers the prospect of reducing 
the environmental impact of fossil fuel use. Even with such advances, 
however, we must recognize that fossil fuel resources are limited. 
Beginning in 2020, the total world demand for energy will exceed 
substantially all available energy from fossil, hydro and non-breeding 
nuclear fission reactors, exceeding by 10 percent the total energy 
available. The shortfall will grow to nearly 50 percent of the total 
energy available by 2060. Longer term, science and technology must find 
alternative sources of energy if we are to meet the needs of our global 
population.
    Since construction of a new power plant based on existing 
technology can take as much as ten years from concept to operation, we 
must act now to plan the orderly implementation of alternative sources 
of electricity. Experience has shown that the odyssey of a new 
technology from conception to commercial deployment can exceed 20 
years.
Potential of Fusion Energy
    Fusion energy is one of our global options for providing energy in 
the future. Fusion processes create energy from super-hot plasmas using 
magnetic confinement to avoid the problems of developing materials to 
withstand temperatures exceeding 50,000 degrees K. Fusion energy 
technology has emerged as a safe and reliable option with a large fuel 
reserve--we can generate energy from sea water.
    Among the many confinement options for fusion, a spheromak 
configuration enables the attainment of the necessary high temperatures 
without requiring massive magnets, extraordinary infrastructure 
complexity and the associated costs for fusion conditions to be 
achieved. The spheromak configuration, if successful, can provide 
electricity from fusion on a scale which can be built by traditional 
energy companies in the United States. However, much of the physics of 
this option is still uncertain.
Spheromak Turbulent Plasma Experiment (STPX)
    We request support from the Energy & Water Development Subcommittee 
for a program of research called the Spheromak Turbulent Plasma 
Experiment (STPX). This joint Florida A&M University (FAMU)-West 
Virginia University (WVU) project is focused on developing basic fusion 
science with tangible benefits to the nation.
    At FAMU Center for Plasma Science and Technology, a spheromak will 
be built by a team of faculty and students already significantly 
involved in fusion funded research. A full spectrum of traditional and 
innovative diagnostic techniques for the STPX will be developed at WVU 
and a host of other collaborating Universities and National 
Laboratories along with those developed at FAMU. Although similar in 
size and generic features to an existing spheromak, the STPX detailed 
design will be driven by the need to obtain the desired physics 
outcomes. Our design will be dramatically different in several 
important features from any existing fusion facility in the world.
    STPX will make important and unique contributions to the Department 
of Energy Fusion Science Mission through the development of a more 
compact containment technology. In addition, 20 Ph.D. plasma physicists 
from currently underrepresented groups will be produced in time to 
support the U.S. contributions to ITER. These new scientists will 
thereby be the next generation of the fusion scientific workforce, the 
first group to benefit from the advances obtained through the ITER 
project. More importantly, they will find employment in basic 
scientific research.
    The other benefits from our programs consist of contributions to 
technologies for materials fabrication and processing (e.g., computer 
chips), advanced lighting, and in transportation fuels synthesis.
Outcomes from Program
    This project will use the three approaches of theory, experiment, 
and simulation to quickly obtain information and develop the tools for 
full kinetic modeling of the spheromak plasma's makeup. This project 
will enable us to understand better how turbulent plasmas are heated, a 
key step towards progress in controlled thermonuclear fusion as well as 
towards understanding astrophysical systems. The relationships between 
ion heating in fusion plasmas, reconnection events, and microparticle 
transport will also be determined through this project in a manner 
enabling the manipulation and enhancement of core plasma heating.
Period of Support
    We seek a three-year commitment of support from the Subcommittee 
totaling $15 million for construction and the development of diagnostic 
tools and processes. FAMU will share the costs by providing renovated 
housing for the STPX, (estimated cost share of $3.7 million), and the 
infrastructure support normally associated with research projects. 
Construction and diagnostics research will be finished in three years 
with the expectation that we will generate our first plasma in May of 
2011. We expect annual operations (at roughly $500K/yr) to be funded 
after attaining first plasma through normal research funds from DOE, 
NSF, and other public and private entities to FAMU, WVU, and other 
participating institutions.
Summary of Request
    We request support of $5 million for fiscal year 2008 from the 
USDOE Office of Science, Fusion Energy Sciences Program, for the 
Spheromak Turbulent Plasma Experiment.
    Thank you for the opportunity to offer testimony to the 
Subcommittee.
                                 ______
                                 
           Prepared Statement of the Nuclear Energy Institute
    On behalf of the nuclear energy industry, the Nuclear Energy 
Institute (NEI)\1\ appreciates the opportunity to provide the 
subcommittee with its perspective on the nuclear-related programs under 
the subcommittee's jurisdiction, and on the President's proposed budget 
for those programs in fiscal year 2008.
---------------------------------------------------------------------------
    \1\ The Nuclear Energy Institute is responsible for developing 
policy for the U.S. nuclear energy industry. NEI's 297 corporate and 
other members represent a broad spectrum of interests, including every 
U.S. utility that operates a nuclear power plant. NEI's membership also 
includes nuclear fuel cycle companies, suppliers of equipment and 
services, engineering and consulting firms, national research 
laboratories, manufacturers of radiopharmaceuticals, universities, 
labor unions and law firms.
---------------------------------------------------------------------------
    NEI supports fiscal year 2008 funding for the following programs: 
Office for the Energy Loan Guarantee Program ($8.4 million), Nuclear 
Power 2010 ($183 million), Generation IV reactor programs ($100 
million), Nuclear Hydrogen Initiative ($35 million), University 
programs ($50.1 million), Office of Radioactive Waste Management 
($494.5 million), Advanced Fuel Cycle Initiative (increased funding 
over fiscal year 2007), and the Nuclear Regulatory Commission ($913 
million).
    The nuclear energy industry produces one-fifth of America's 
electricity, and is preparing to build advanced-design nuclear power 
plants to meet growing electricity demand. Nuclear energy is an 
essential component of a diverse energy portfolio, and NEI appreciates 
the leadership on nuclear energy's issues by members of this committee.
    NEI's statement for the record addresses the industry's highest 
priorities. In several cases, NEI believes America's energy security 
justifies increases in fiscal year 2008 funding above the President's 
request.
    Establishing an Effective Energy Loan Guarantee Program.--The 
energy loan guarantee program was created by the 2005 Energy Policy Act 
to support private sector investment in advanced energy technologies, 
including new nuclear power plants. The loan guarantee program is 
designed to be self-financing, with project sponsors responsible for 
underwriting the cost to the federal government of providing the credit 
support. Properly implemented, there will be no cost to the taxpayer.
    This program is essential for companies planning to invest billions 
of dollars in licensing and construction of new nuclear power plants in 
the United States. The electric industry faces major capital investment 
requirements ($750 billion-$1 trillion) over the next 15-20 years (in 
distribution, transmission, generation, and environmental control 
technology). The capital investment required will strain the electric 
sector's financing capability. The size of the capital investments (at 
least $3-4 billion for new nuclear plants in today's dollars) is very 
large relative to the size of the companies making the investments, and 
the loan guarantee program provides the credit support necessary to 
finance these new plants.
    The nuclear industry believes that the loan guarantee program 
requires disciplined management and rigorous project evaluation, with 
the cost of loan guarantees covering the government's potential 
exposure. NEI appreciates the subcommittee's leadership (in the fiscal 
year 2007 continuing resolution) in providing the funding and statutory 
language necessary to establish the Loan Guarantee Office at DOE. We 
endorse the Department of Energy's request for $8.4 million to cover 
the program's administrative costs in fiscal year 2008. The nuclear 
industry notes, however, that the President's fiscal year 2008 budget 
proposes a $9 billion loan volume limitation, with only $4 billion of 
the $9 billion allocated to large power projects like nuclear power 
plants. Given the cost of new energy infrastructure projects (including 
new nuclear plants, coal gasification plants and coal-to-liquids 
projects), a robust and viable loan guarantee program will require 
larger annual loan volumes in future fiscal years.
    Maintaining the Momentum in the Nuclear Power 2010 Program.--The 
Nuclear Power 2010 Program supports the design and engineering work 
necessary to bring two advanced reactor designs (the Westinghouse 
AP1000 and the General Electric ESBWR) to the level of design 
completion necessary for companies to develop firm cost estimates, and 
to file applications for licenses to build and operate these plants. 
Approximately two-thirds of the 33 new nuclear reactors announced 
publicly depend on successful, timely completion of the first-of-a-kind 
engineering on the two advanced reactor designs supported by the 
Nuclear Power 2010 program. Through its investment in the Nuclear Power 
2010 program, the federal government achieves enormous leverage on 
behalf of the American taxpayer: The $727 million total expected 
government investment in Nuclear Power 2010, matched by equal industry 
funding, will stimulate tens of billions of dollars of investment in 
new nuclear projects by 2015.
    The Department of Energy's proposed fiscal year 2008 budget 
proposes $114 million for Nuclear Power 2010. This level of funding 
will not maintain the program's momentum, and NEI recommends fiscal 
year 2008 funding of $183 million, to be matched equally by private 
sector funding.
    Ensuring Adequate Funding for the Nuclear Regulatory Commission and 
Oversight.--The industry supports NRC's fiscal year 2008 budget request 
of $913 million to provide effective oversight of operating nuclear 
plants, timely processing of applications for license renewal and 
requests for power uprates, and efficient review of applications for 
combined construction/operating licenses, early site permits and design 
certification. We believe this level of funding should also ensure NRC 
readiness to begin review of DOE's Yucca Mountain license application 
next year. The industry also encourages the subcommittee to support 
NRC's need for additional office space to fulfill its regulatory 
responsibilities.
    Given the increase in the NRC's budget--$200 million in the last 
two years and $425 million in seven years--NEI urges the subcommittee 
to require regular progress reports from the agency on the status of 
its licensing and other regulatory activities. Such reporting will 
allow the subcommittee to determine whether the agency is achieving the 
desired operational efficiency--by reducing the time required to 
process new plant license applications as it gains experience, for 
example. The industry also urges the subcommittee to require greater 
transparency in where NRC funds are being spent, by requiring full 
disclosure of planned staffing and resource needs in individual NRC 
divisions. This would demonstrate to Congress and the industry, which 
pays up to 90 percent of NRC's budget, that more of the requested 
budget is being allocated toward licensee-specific charges rather than 
general license fees.
    Developing An Integrated Used Fuel Management Program.--The nuclear 
industry appreciates the subcommittee's leadership in the area of used 
fuel management. In 2008, the federal government will be nine years 
behind on its commitment to start moving used nuclear fuel from nuclear 
power plants across the nation to a federal repository. The nuclear 
industry supports the Administration's proposed budget of $494.5 
million for fiscal year 2008 to enable the Office of Civilian 
Radioactive Waste Management to submit a license application for the 
Yucca Mountain project by June 2008.
    The Yucca Mountain project is a key component of a three-part 
integrated used fuel management strategy that includes: (1) interim 
storage until recycling or permanent disposal--or both--are available; 
(2) research, development and demonstration to close the nuclear fuel 
cycle and reduce the volume, heat and toxicity of byproducts placed in 
the repository; and (3) developing a permanent disposal facility. 
Continued, demonstrable progress on all three elements of this 
integrated used fuel management system is important to preserve 
confidence in nuclear energy, and to support licensing and construction 
of new nuclear plants.
    The nuclear industry has consistently supported research and 
development of the advanced fuel cycle technologies incorporated in the 
Advanced Fuel Cycle Initiative (AFCI). The industry recognizes that the 
Congress has important questions about the Administration's Global 
Nuclear Energy Partnership (GNEP). Nonetheless, the industry supports 
increased funding for the Advanced Fuel Cycle Initiative in fiscal year 
2008 to continue this technology research and development program, and 
to achieve better definition of the program, which is critical to a 
long-term integrated strategy for used fuel management.
    Preparing for the Next Generation of Nuclear Power Plants.--The 
large light water reactors operating today are well-suited for baseload 
electricity production, and the nuclear industry will continue to build 
and operate these reactor types well into the 21st century. It is 
clear, however, that the promise of nuclear energy technology extends 
beyond electricity production to include production of hydrogen and 
process heat. Next-generation high-temperature reactors, using advanced 
hydrogen production technologies, can produce hydrogen for 
transportation or for upgrading coal and heavy crude oils into usable 
products, thereby relieving pressure on natural gas supply (the source 
of most hydrogen produced today). High-temperature reactors can also 
generate process heat for desalination, to extract oil from tar sands, 
and for scores of other industrial applications.
    This enormous potential justifies continued federal investment. NEI 
urges the subcommittee's support for the next-generation nuclear plant 
at the Idaho National Laboratory, funded through the Generation IV 
Nuclear Energy Systems Initiative program. NEI recommends funding for 
this program of $100 million in fiscal year 2008, higher than the $36.1 
million proposed by DOE. NEI also recommends higher funding for the 
Nuclear Hydrogen Initiative--$35 million in fiscal year 2008, rather 
than the $22.6 million proposed by DOE.
    Investment in people is as important as investment in technology, 
and the nuclear industry urges the subcommittee to restore funding of 
$50.1 million in fiscal year 2008 for university programs managed by 
the Office of Nuclear Energy to support vital research and educational 
programs in nuclear science and health physics at the nation's colleges 
and universities. NEI also encourages the subcommittee to consider 
supporting a new program within the Office of Science for undergraduate 
and graduate programs in radiochemistry and other disciplines important 
to medical, energy and other applications of commercial nuclear 
technology.
    Conclusion: Closing the Energy R&D Gap.--NEI has recommended modest 
funding increases, above the Administration's request, in several 
strategic nuclear energy programs, including Nuclear Power 2010, the 
Next Generation Nuclear Plant, the Nuclear Hydrogen Initiative, support 
for university programs and others.
    NEI sees a growing body of evidence that increases in energy R&D 
will be necessary in the years ahead to create a sustainable energy 
supply infrastructure that meets national needs. In an analysis 
provided to the Congress in February, the Government Accountability 
Office found that DOE's budget authority for renewable, fossil and 
nuclear energy R&D declined by over 85 percent (in inflation-adjusted 
terms) from 1978 through 2005. The need for new technologies to address 
critical energy needs has not diminished over the same time period, 
however, nor have the energy and environmental imperatives facing the 
United States become any less urgent.
    Similarly, the Electric Power Research Institute is conducting a 
broad-based assessment of the electricity supply and demand-side 
technologies necessary to achieve meaningful reductions in electric 
sector greenhouse gas emissions in the United States. Although still in 
progress, EPRI's analysis demonstrates that a broad-based portfolio of 
technologies and techniques--including substantial improvements in 
efficiency, aggressive deployment of new nuclear and renewable 
generating capacity, improvements in coal-fired power plant efficiency, 
carbon capture and storage--will be required. EPRI's initial estimate 
suggests that successful development and deployment of this portfolio 
between now and 2030 will require additional R&D investment of 
approximately $2 billion per year. Although the federal government 
cannot be expected to finance all of that, there is clearly a need and 
a rationale for increased federal support for energy research, 
development, demonstration and deployment, in the nuclear energy area 
and across the portfolio.
                                 ______
                                 
                    Prepared Statement of GE Energy
    The following testimony is submitted on behalf of GE Energy (GE) 
for the consideration of the Committee during its deliberations 
regarding the fiscal year 2008 budget requests for the Department of 
Energy (DOE). Among GE's key recommendations are: (1) an additional $73 
million for the Nuclear Power 2010 program to develop new U.S. nuclear 
generation; (2) $40 million in added funding for the GNEP program to 
start the necessary activities for technology demonstration and to help 
industry provide DOE with the information necessary to support the 2008 
Secretarial Record of Decision; and (3) $18 million additional for the 
Advanced Turbines program, DOE's major research effort focusing on gas 
turbines for electricity production which also addresses key needs for 
hydrogen turbines. Investments in these and the other important 
programs discussed below will help to meet the challenges of assuring a 
diverse portfolio of domestic power generation resources for the 
future.
                        nuclear energy programs
    Nuclear Power 2010.--The NP2010 Program provides vital funding in 
three areas that are essential to the development of new nuclear 
generation capacity in this country. The program provides support for 
the (1) certification of new reactor designs, such as GE's advanced 
light water reactor technology (ESBWR); (2) advancement of detailed 
design and deployment planning to support new nuclear plant 
construction in fiscal year 2010; and (3) preparation, submittal and 
NRC approval of two Combined Construction and Operating Licenses (COL). 
These activities are currently advancing with co-funding support from 
GE and Toshiba Westinghouse. Adequate DOE funding in fiscal year 2008 
is necessary to maintain the schedules supporting certification, COL 
license approval and construction initiation in fiscal year 2010.
    The Administration has requested $110 million for fiscal year 2008 
to support the NP2010 Program. This request is insufficient to keep the 
program on schedule. This amount is below the amount that was 
determined to be necessary for fiscal year 2008 at the time the initial 
estimate of the total program development cost was provided by GE, 
Toshiba Westinghouse, NuStart and Dominion in 2005. Since that time, as 
new information has been developed, the Reactor Vendors and Industry 
have recognized the need to accelerate detailed design and the 
construction planning process to achieve enhanced certainty of cost and 
schedule risks. At the same time, regulatory costs have increased. As a 
result, the Reactor Vendors and Industry have determined that funding 
of $183 million in fiscal year 2008 is required, an increase of $73 
million above the Administration's budget request.
    The Advanced Fuel Cycle Initiative and the Global Nuclear Energy 
Partnership (GNEP).--The Global Nuclear Energy Partnership (GNEP), 
initiated in early 2006, benefits from the research and development 
work conducted under the Advanced Fuel Cycle Initiative (AFCI). GNEP 
seeks to expand the use of nuclear power in a proliferation-resistant 
manner, and to solve the nuclear waste issue by reducing the long-term 
radiotoxicity of spent nuclear fuel. The key emphases are on solutions 
for proliferation resistant fuel separations and long-term nuclear 
waste reduction.
    In January 2007, DOE released the updated GNEP Strategic Plan, 
which outlines an implementation strategy to ``enable a world-wide 
increase in the use of nuclear energy safely, without contributing to 
the spread of nuclear weapons capabilities, and in a manner that 
responsibly disposes of the waste products of nuclear power 
generation.'' The GNEP Strategic Plan outlines government's and 
industry's roles in the development of the technologies and facilities 
required to implement the U.S. commitment to GNEP. To achieve a 
commercial solution for GNEP, DOE recognized in the Strategic Plan the 
need for industry involvement and active participation.
    In support of the broad GNEP goals, and to help the DOE prepare for 
the 2008 Secretarial Record of Decision to proceed with a government-
industry partnership to build a nuclear fuel recycling center and a 
prototype advanced recycling reactor, DOE in January issued awards to 
11 commercial and public consortia. GE has expressed interest in 
designing, licensing, building and operating a demonstration nuclear 
fuel recycling facility and advanced recycling reactor, and was among 
those selected to conduct detailed siting studies for integrated spent 
fuel recycling facilities as part of GENP. Pursuant to this DOE award, 
GE is preparing a site characterization report for a site in Morris, 
IL. GE's technology solution, called the Advanced Recycling Center, is 
based on pyroprocessing and PRISM reactor technology developed during 
the Advanced Liquid Metal Reactor program. This technology is ready for 
commercial-scale development and could provide an economically viable 
technical solution to solving the nuclear waste issue. GE believes that 
the GNEP program would be advanced if the Office of Nuclear Energy 
updates the AFCI Comparison Report to Congress with qualitative and 
quantitative information on the proven PRISM reactor and pyroprocessing 
technologies.
    For fiscal year 2008, an additional $40 million above the 
Administration's budget request, for total GNEP funding of $435 
million, is needed. Such additional funding should be used to help 
industry conduct technology demonstration projects, such as the 
demonstration of: (1) key reactor components (e.g., reactor vessel), 
(2) electro-refiner based fuel separation, and (3) a reactor and fuel 
separation simulator, and to provide the technical, economic and 
business information to DOE necessary to support the 2008 Secretarial 
Record of Decision. GE further recommends that adequate funding be 
provided for pyroprocessing and the PRISM reactor in support of DOE's 
GNEP policy goals.
                         fossil energy programs
    Cleaner coal technology is the key to maintaining coal as a 
significant part of the U.S. energy mix into the future. DOE's Clean 
Coal Power Initiative, Integrated Gasification Combined Cycle, and 
Carbon Sequestration Programs all have important roles to play in 
advancing the solutions that allow coal to be used in the most 
economical and environmentally acceptable manner.
    Clean Coal Power Initiative.--GE supports the Administration's 
request to increase the funding level for the Clean Coal Power 
Initiative (CCPI) in fiscal year 2008. We encourage Congress to 
recognize that a commercial demonstration program for advanced coal 
power technologies provides a critical pathway for the technologies 
that will preserve coal's place in the U.S. energy portfolio. There is 
a continuing need for the CCPI to serve as the vehicle for the scale-
up, plant integration, and initial deployment of advanced IGCC 
technologies, which will help IGCC technology move down the experience/
cost curve. Another critically important role of the CCPI going forward 
will be in providing a means for the demonstration of carbon 
sequestration technologies.
    GE welcomes DOE's commitment to move forward with a third round of 
the CCPI in fiscal year 2008. Further multi-project solicitations for 
later rounds of projects targeting advanced technology systems for 
CO2 capture and sequestration also will be required as part 
of the overall response to the climate change challenges facing coal-
based generation.
    IGCC.--IGCC, with its capability for pre-combustion carbon capture, 
presents a significant advantage over combustion technology. Even with 
its current 20 percent to 25 percent cost premium over pulverized coal 
combustion, IGCC can provide a lower cost of electricity with carbon 
capture. Based on the incremental cost that carbon capture will add to 
all coal-based power generation, cost reduction must be pursued 
vigorously for IGCC to realize its potential in maintaining coal 
competitiveness in a carbon-constrained environment.
    While widespread deployment is key to bringing IGCC costs down, 
technology advancements also are needed to minimize the impact of 
carbon capture. This requires a pipeline of new technologies that are 
moving toward demonstration and deployment. While the development of 
several large-scale commercial IGCC plants is underway, candidate 
technology advancements have already been identified for the next 
generation of IGCC. These technologies can significantly lower cost and 
improve performance in key areas of carbon shift, CO2 
capture, overall process efficiency plus advancing IGCC's economics for 
application on subituminous coals. However, it will not be possible to 
even begin moving these technologies forward without increasing the 
fiscal year 2008 funding request for IGCC.
    DOE's goal of a 10 percent premium for carbon capture with IGCC is 
aggressive but appropriate to the magnitude of the economic benefit 
that would be gained. Achieving this goal will require increased 
funding for technology development. The Administration's proposal to 
reduce funding for the IGCC program to $50 million in fiscal year 2008 
is not sufficient to provide the resources that are needed. We 
therefore urge that fiscal year 2008 funding for IGCC be increased by 
$16 million.
    Carbon Sequestration.--GE endorses the requested increase in 
funding for carbon sequestration technologies. Carbon sequestration and 
storage is a critical and necessary component of a total solution for 
low carbon coal. A focus of the program activity needs to be on the 
development of requirements for CO2 quality necessary for 
long-term, secure and environmentally acceptable storage. These 
requirements are needed for carbon capture system design that is 
suitable for a wide variety of geological environments. The planning 
for large-scale field tests needs to identify candidate sources of 
large and reliable quantities of CO2.
    Advanced Turbines.--GE recommends that funding be increased by $18 
million to a total of $40 million for the Advanced Turbines program. 
This program represents the Department's primary research effort 
focusing on the development of enabling technologies for high 
efficiency hydrogen turbines for advanced gasification systems. Gas 
turbine R&D is focused on advanced combustion and high temperature 
turbine technology for syngas/hydrogen fuels that will result from IGCC 
and FutureGen type power plants. The program addresses those gas 
turbine elements where the technology required for the use of syngas/
hydrogen fuels differs from the requirements for natural gas fueled gas 
turbines. Unless the fiscal year 2008 budget for the Advanced Turbines 
program is increased, funding will be inadequate for this promising 
high priority work, and the progress and benefits of this research will 
be delayed accordingly.
    GE has experience with gas turbines operating on fuel blends 
containing hydrogen, and has performed laboratory demonstration tests 
on high hydrogen content fuel. This experience highlighted the need for 
development of advanced combustion technology in order to drive down 
NOX emissions and enable advanced hydrogen generation 
processes. In addition, current strategies for effective integration of 
all major subsystems need to be reviewed and redefined for use with 
hydrogen fuel.
    Continued funding of DOE's program is essential for FutureGen to 
meet its goal of substantial improvement in the cost of carbon capture. 
FutureGen is being structured to serve as a test bed for advanced 
technology that is needed to reduce the performance penalty and improve 
the economics of carbon capture. If it is to meet its goals, the 
FutureGen program will need to draw on advancements resulting from the 
Advanced Turbines program.
    GE recommends the Committee's attention to the testimony submitted 
by the Gas Turbine Association relative to the allocation of additional 
funding above the budget submission within the Advanced Turbines 
program budget. In particular, GE encourages the Committee to provide 
adequate funding to sustain the University Turbine Systems Research 
Program.
    Advanced Research.--To enable future technological advances, within 
the funds provided for Advanced Research, the emphasis should be placed 
on investments to foster better understanding of gasification 
fundamentals. An improved physics-based understanding of gasification 
processes will facilitate improved gasifier and systems designs that 
may achieve 45-50 percent efficiency with integrated CO2 
separation, capture, and sequestration with near-zero emissions with 
less than 10 percent increase in cost-of-electricity.
                       renewable energy programs
    Solar.--GE Energy fully supports the DOE budget request for the 
development of Solar technology. GE Energy is pleased to be able to 
work with the DOE on the recently awarded Solar America Initiative. 
This program involves a diverse team of industry, universities, and 
national labs working together to develop the technologies needed to 
drive down the cost of electricity to make solar competitive with other 
power generation technologies, leading to widespread application in the 
U.S.
                                 ______
                                 
 Prepared Statement of the Health Physics Society (HPS) and the Health 
             Physics Program Directors Organization (HPPDO)
    This written testimony for the record for fiscal year 2008 requests 
$500,000 for the Health Physics Fellowships and Scholarships program 
through the Department of Energy's Office of Nuclear Energy (DOE-NE) to 
help address the shortage of health physicists, which is an issue of 
extreme importance to the safety of our nation's workers, members of 
the public, and our environment.
    Health Physics is the profession that specializes in radiation 
safety, which is necessary for the safe and successful operation of the 
nation's energy, healthcare, homeland security, defense, and 
environmental protection programs. Although radiation safety is 
fundamental to each of these vital national programs, there is no 
single federal agency in the Executive Branch that serves as a home and 
champion for the health physics profession. This is due to the fact 
that health physics is a profession that cuts across all these sectors 
and is necessary for all these sectors to exist. However, it is a 
support profession for the principle disciplines in these programs, 
such as engineers, medical professionals, law enforcement 
professionals, military personnel, and environmental scientists, which 
are championed by corresponding federal agencies.
    As the nation's development and use of radioactive materials grew 
following the end of World War II, the nation's energy, defense, public 
health, and environmental protection needs for health physicists were 
supported through student fellowships and scholarships largely from the 
Atomic Energy Agency (energy and defense) and Public Health Service 
(public health and environmental protection). However, over the years 
agencies and their missions changed, the nuclear power industry 
faltered and the DOE nuclear weapons complex downsized following the 
end of the cold war. This resulted in the academic program support from 
federal agencies dwindling until the last remaining support from DOE 
was terminated in fiscal year 1999. This lack of academic support was 
despite the continued need for health physicists in the energy, 
defense, public health, and environmental protection programs and an 
exponential growth for need in the medical and academic community.
    As the health physics human capital crisis grew and loomed in the 
early years of the 21st century, a sector receiving increasing 
attention in the human capital shortage area was the nuclear energy 
industry, particularly with its ability to provide energy without 
producing ``greenhouse gases.'' Congress and the Department of Energy 
(DOE) took action to add support to the nuclear engineering academic 
programs through DOE programs in the Office of Nuclear Energy (NE) 
(previously the Office of Nuclear Energy, Science and Technology) and 
eventually agreed that this was an appropriate support mechanism for 
the health physics academic program. In fiscal year 2005, just 3 years 
ago, Congress appropriated money to DOE-NE for a health physics 
fellowship and scholarship program as part of the University Reactor 
Fuel Assistance and Support budget item. At that time, then Director of 
DOE-NE, William Magwood, agreed this support was needed as he testified 
to this Committee that the DOE recognized ``. . . a small but important 
element [of the University Support budget item was] to provide 
scholarships and graduate fellowships to students studying the vital 
and too-often overlooked discipline of health physics.'' Shortly 
thereafter, Congress reinforced its position that DOE needed to support 
the health physics academic programs in provisions of Section 954 of 
the Energy Policy Act of 2005. However, even though the need for 
increased numbers of health physics professionals continued to exist, 
after only two fiscal years of funding the NE Health Physics Fellowship 
and Scholarship programs at minimal levels, the DOE has requested to 
cease funding this Congressionally authorized program.
    In their fiscal year 2008 Budget Request, DOE states ``Enrollment 
target levels of the University Reactor Infrastructure and Education 
Assistance program have been met and the program is no longer 
considered essential to encourage students to enter into nuclear 
related disciplines'' (emphasis added). Similarly, in the Office of 
Management and Budget's (OMB) performance assessment of the University 
Nuclear Education Programs, they conclude ``Enrollments have tripled 
since the late 1990's, reaching upwards of 1,500 students. In addition, 
more universities are offering nuclear-related programs and there is a 
growing interest in nuclear energy'' and ``While enrollments have 
reached the program's target level of 1,500 students ten years ahead of 
schedule, the program is unable to demonstrate that it caused these 
results.''
    This DOE statement and the OMB assessment are patently wrong with 
regards to health physics programs. Since DOE has only funded health 
physics programs for 2 years, we do not believe they have ever 
established ``target levels'' for health physics program enrollments 
nor has there been time to assess the effect of those 2 years of 
funding on health physics program enrollments. The DOE-NE HP fellowship 
and scholarship program thus far has provided 3 graduate fellowships in 
fiscal year 2006 and 0 undergraduate scholarships. In 2004, the HPPDO 
developed a plan for revitalizing the academic programs to a level that 
could meet the projected shortfall of health physicists. The HPPDO plan 
calls for an initial target of 20 graduate fellowships and 20 
undergraduate scholarships, i.e., target levels well above the actual 
performance of the Nuclear Education Programs. In addition, the number 
of health physics programs graduating at least 5 students annually 
decreased from 20 programs in 1995 to less than half that number in 
2005.
    Although we consider it would take approximately $1,000,000 to get 
to the HPPDO plan of 20 fellowships and 20 scholarships, we consider it 
important to address immediately the HP Graduate Fellowship program so 
we have between 15 and 20 fellows in a two-year Masters Degree program 
and up to 10 undergraduate scholarships to start meeting our nation's 
workforce needs for radiation safety personnel. Funding of $500,000 
should allow for up to approximately 12 to 15 fellows and up to 10 
scholarships with allowance for overhead administration costs. 
Considering the DOE budgets for the HP Fellowship and Scholarship 
programs for fiscal year 2005 and fiscal year 2006 combined have 
totaled $500,000 and only produced 3 fellowships, we feel this request 
is very modest and we recognize it will not begin to provide the long 
term support that will eventually be required if we are to have enough 
safety professionals for our energy, healthcare, homeland security, 
defense, and environmental protection programs.
    The Committee's favorable consideration of this request will help 
meet our nation's radiation safety needs of the future.
                                 ______
                                 
        Prepared Statement of the University of Texas at Austin
    I draw the Subcommittee's attention to the importance of the 
National Methane Hydrates R&D Program in the National Energy Technology 
Laboratory of the Department of Energy. This is the premier federal 
program that deals with a unique geologic phenomenon. Though this 
program is housed in the Office of Fossil Energy, methane hydrates are 
more than a large potential resource--they are fundamental to the 
carbon cycle on our planet.
    Methane hydrates present a basic science challenge of the first 
order. The scientific community is only beginning to figure out where 
hydrates are, how they got there, what quantities really exist, and 
what would happen if the prevailing conditions of temperature, 
pressure, salinity, and microbial symbiosis were to change. But even 
from the little we know about hydrates so far, one important conclusion 
emerges. The amount of carbon currently locked up in hydrates easily 
exceeds the total carbon in all the oil, natural gas and coal on the 
planet. So trying to make sense of how the carbon cycle works without 
studying hydrates is like learning how to drive a car when you only 
have a key to the glove box.
    Methane is also a potent greenhouse gas, even more so than the 
widely discussed carbon dioxide. The behavior of methane hydrate 
deposits--when they form, when they dissociate, and how fast these 
processes take place--very likely holds some of the keys to 
understanding how Earth's climate has changed in the past. Fully 
understanding the past would have enormous impact on predictions of how 
our climate might change in the future. Considering the political, 
social and economic ramifications of climate predictions, investment in 
understanding the scientific basis for change is wise.
    Energy supply and climate change both fall within DOE's core 
mission. The National Methane Hydrates R&D Program in NETL is therefore 
ideally situated to drive our nation's effort to understand the science 
as well as the economics of these deposits. This is not news to this 
Subcommittee, for the previous session of Congress recommended steadily 
increasing support for the program over the next five years. I urge the 
Subcommittee to maintain its commitment to this uniquely important 
program.
                                 ______
                                 
                    Prepared Statement of NGVAmerica
Introduction
    NGVAmerica appreciates the opportunity to provide the subcommittee 
the following statement concerning the fiscal year 2008 appropriations 
for the U.S. Department of Energy (DOE). NGVAmerica is a national 
organization of over 100 member companies, including: vehicle 
manufacturers; natural gas vehicle (NGV) component manufacturers; 
natural gas distribution, transmission, and production companies; 
natural gas development organizations; environmental and non-profit 
advocacy organizations; state and local government agencies; and fleet 
operators. NGVAmerica is dedicated to developing markets for NGVs and 
building an NGV infrastructure, including the installation of fueling 
stations, the manufacture of NGVs, the development of industry 
standards, and the provision of training.
Summary of Appropriations Requests
    Fund the NGV RDD&D Program at $20 Million for fiscal year 2008
    Fund the Clean Cities Program at $20 million for fiscal year 2008
    Clarify that Biogas-to-Biomethane Production Projects Qualify Under 
Existing DOE-funded Programs
Statement in Support of Appropriations Request
    Increasing the use of natural gas vehicles (NGVs) can: (1) reduce 
America's dependence on foreign oil, (2) improve air quality in urban 
areas, (3) reduce the production of greenhouse gases, and (4) pave the 
way for the more rapid introduction of hydrogen transportation 
technologies. However, to achieve all these benefits, more NGV RDD&D is 
urgently needed.
    DOE funding has been instrumental in supporting the development and 
introduction of alternative fueled technologies. Over the years, DOE 
funding has supported the development and refinement of natural gas 
engines, fueling infrastructure, codes and standards, and fleet 
demonstration projects. DOE emission testing programs and fleet case 
studies also have been critical to demonstrating the real-world air 
quality and economic benefits of using natural gas vehicles. DOE has 
also been a key player in integrating new natural gas engines into new 
vehicle platforms. As such, DOE has been an instrumental partner with 
industry in developing new and better products. As a result of these 
efforts, natural gas use for transportation displaced over 200 million 
gallons of petroleum in 2006. Most of this fuel is consumed by high 
fuel-use fleets (e.g., transit, refuse, and short-haul trucking) 
located in major urban areas. NGVAmerica members have focused their 
marketing efforts mostly on heavy-duty truck and bus applications. 
Fleets operating these vehicles provide the best opportunity for 
increased petroleum displacement as well as reduced emissions of 
harmful pollutants.
    Some of the major successes to date for our industry include full-
commercialization of several of the cleanest internal combustion 
engines in the world, a growing share of the U.S. transit bus fleet, 
the use of hydrogen-blended fuels, installation of stations that 
simultaneously dispense CNG, LNG, hydrogen blends, and hydrogen, and 
the production and use of biomethane fuel produced from landfills. Many 
of our member companies also are experiencing a robust and growing 
export market for NGV products as a result of increasing interest in 
overseas markets. However, the U.S. market continues to represent a 
challenge, particularly due to the lack of long-term governmental 
support and a lack of vehicle product offerings.
    DOE's efforts have led to some impressive developments over the 
years. Many of the products developed or supported by DOE funding will 
continue to provide benefits for many years. The heavy-duty vehicles 
that DOE help demonstrate and deploy often continue in service for 10-
15, or more years. And because these applications mostly involve high 
fuel use fleets, the continued use of these vehicles will displace a 
large amount of petroleum. A single heavy-duty natural gas urban 
transit bus, for instance, over its lifetime will displace between 
175,000-200,000 gallons of petroleum. That is a far greater amount of 
petroleum than even the most fuel-efficient light duty vehicle will 
ever replace. The point is not to stop encouraging light duty fuel 
efficiency but rather to highlight the potential petroleum displacement 
of continuing to develop more heavy-duty natural gas applications.
    The tax incentives enacted as part of the Energy Policy Act of 2005 
and SAFETEA-LU are helping to support the market for NGVs and other 
alternative fuels. These incentives significantly improve the economics 
for users of alternative fuels. Unfortunately, a compelling economic 
case alone is not sufficient to commercialize new technologies, 
particularly not when developing new products costs millions of dollars 
and is fraught with risks. In transportation, this problem is 
particularly acute because of the economic problems facing U.S. 
manufacturers and the cost these manufacturers already must incur to 
ensure their petroleum fueled products meet increasingly stringent 
emission standards.
    The NGV industry's RDD&D efforts are directed at bringing to market 
advanced NGV technology that will extend NGV use into more applications 
and lower the cost of purchasing and operating NGVs in all markets. 
Significant NGV RDD&D is needed to (1) improve engine efficiency, (2) 
further reduce engine emissions, (3) reduce the cost and improve the 
reliability of fueling infrastructure and (4) demonstrate alternative 
fuel systems in new applications--including natural gas/hybrid electric 
applications. In order to achieve these objectives and deliver the 
benefits provided by NGVs, our industry needs DOE to be a ready and 
willing partner. Given the importance of this continued effort, we 
request funding for the following specific activities:
Fund the NGV RDD&D Program at $20 Million for fiscal year 2008
    At one time, the Department of Energy had a robust on-road NGV 
RDD&D program based on a joint public/private sector plan. Several 
years ago, DOE's Energy Efficiency and Renewable Energy programs 
shifted emphasis to long-term, high-risk R&D (e.g., hydrogen vehicles). 
Since then, the Administration has requested no funding for NGV RDD&D. 
That is unfortunate since such a program is even more necessary today. 
For NGVs to achieve their market potential, federally funded RDD&D is 
needed to expand product offerings of engines to meet a wider range of 
applications. In addition, the process of integrating those natural gas 
engines into additional medium- and heavy-duty vehicle platforms must 
be accelerated. Those platforms include school buses, transit buses, 
trash trucks, delivery trucks and over-the-road trucks. Natural gas 
hybrid-electric platforms must be expedited, too. In addition, the cost 
and weight of compressed and liquefied natural gas on-board storage 
systems must be reduced. Finally, work must continue on improving NGV 
and NGV fueling safety codes and standards. Given the current priority 
to move America away from reliance on foreign oil and the potential of 
NGVs to play a significant role, Congress should restore funding for an 
NGV RDD&D program.
Fund the Clean Cities Program at $20 million for fiscal year 2008
    The Clean Cities program, which includes 89 public-private 
partnerships operating in 39 states, is one of the most effective means 
available for (1) educating the public about non-petroleum alternative 
fuels, (2) accelerating the market penetration of those fuels and 
vehicles and (3) laying the groundwork for public acceptance of 
hydrogen-based transportation. Given the need to move America away from 
dependence on petroleum-based fuels, increased funding for the Clean 
Cities program is a prudent and necessary investment. The 
Administration's request of $9.593 million for Clean Cities in fiscal 
year 2008 is inadequate given the role that Clean Cities can play in 
reducing U.S. oil dependence, which is an Administration and 
Congressional priority. We recommend and support increasing the funding 
level to $20 million.
Clarify that Biogas-to-Biomethane Production Projects Qualify Under 
        Existing DOE-funded Programs
    Biomethane is a biofuel with huge potential to offset petroleum 
reliance and reduce greenhouse gas emissions. Analysis previously 
conducted for DOE estimated that a feasible annual production capacity 
in the United States is about 1.25 quadrillion Btu or 10 billion 
gasoline-gallon-equivalent from landfills, animal waste and sewage 
alone. However, biomethane use has been overshadowed by efforts to 
produce renewable electricity and the promotion of ethanol. These 
efforts should be viewed as complementary. Federal programs for the 
production of all biofuels should be fuel neutral. As noted above, a 
huge potential exists in the United States to produce biomethane from 
landfill gas, animal and crop waste and sewage--an even cellulosic 
energy crops. In Europe, biomethane from cellulosic crops is being 
pursued as a viable alternative transportation fuel. There are a number 
of new funding programs (demonstrations, production grants, loan 
guarantees) enacted as part of the Energy Policy Act of 2005. These 
programs in some cases have been narrowly tailored to exclude 
applications that do not involve the production of electricity or, in 
the case of transportation fuels, fuels that are not ethanol or 
biodiesel. Congress should continue to fund these programs but clarify 
that biomethane projects also qualify.
Conclusion
    Mr. Chairman, natural gas vehicles help reduce America's use of 
foreign oil, improve the air quality in our urban areas, reduce the 
production of greenhouse gases, and pave the way for the more rapid 
introduction of hydrogen transportation technologies. We greatly 
appreciate your past support and consideration of these proposals.
                                 ______
                                 
 Prepared Statement of the Independent Petroleum Association of America
    On behalf of the Independent Petroleum Association of America 
(IPAA), representing over 7,000 producers of domestic oil and natural 
gas, I would like to bring to your attention a matter of significant 
importance to America's independent oil and natural gas producers.
    For the third consecutive year, the Administration's Budget request 
for the Department of Energy (DOE) for fiscal year 2008 proposed to 
eliminate the existing oil and gas technologies (core) programs, and in 
addition, proposed to repeal the Sec. 999 or non-conventional onshore/
ultra-deep/small producer program authorized in the Energy Policy Act 
of 2005 (EPACT). In the ``guidance'' document provided to DOE by the 
Office of Management and Budget (OMB) for fiscal year 2007, and in 
accordance with the recent Continuing Resolution or ``CR,'' the core 
program is assumed to be transitioning toward a ``close-out'' or 
shutting down of most of it's current activities, allotting $2.7 
million to be applied for close-out purposes. Similarly, the OMB 
guidance document assumes that repeal of the Sec. 999 program is 
imminent. IPAA would urge the subcommittee to consider rectifying this 
``yo yo'' funding effect that serves to undermine the deliverability of 
these two programs. Both the ``core'' program and the Sec. 999 program 
are of vital importance to independent producers, who develop 90 
percent of all U.S. wells, producing 82 percent of American natural gas 
and 68 percent of all American oil. In fact, historically 85 percent of 
the focus of the existing or ``core'' program has been devoted to the 
exploration and production activities associated with the independent 
producer.
    Although the Sec. 999 program received $50 million in mandatory 
funding annually in EPACT, it is not structured to assume all of the 
functions of the core program, especially as they pertain to inherently 
governmental functions or providing grants to university researchers. 
The core program continues to house programmatic functions of equal 
importance to independent producers, such as gas hydrates, the Stripper 
Well Consortium, regulatory analysis, tech transfer and on-going 
university research and development projects. These efforts 
collectively represent important efforts related to development and 
deployment of technologies that assist in maintaining and increasing 
American oil and gas production. Therefore, IPAA requests that the core 
program be appropriated $29.9 million to continue ongoing research and 
development activities for fiscal year 2008. Regarding the Sec. 999 
program, IPAA requests that the program receive an additional $25 
million appropriation to apply to areas that are expected to be assumed 
by Sec. 999, such as enhanced oil recovery for small producers and the 
University Internship Program.
    IPAA believes that during these times of elevated concerns over our 
increasing reliance on foreign sources of oil, now is not the time to 
diminish our efforts in the area of American produced oil and natural 
gas. We thank you for your prompt attention to this matter.
                                 ______
                                 
                  Prepared Statement of Austin Energy
    This testimony supports funding for development and deployment of 
plug-in hybrid vehicles (PHEVs) within the Department of Energy's 
fiscal year 2008 budget request. Specifically, Austin Energy supports 
the $80.6 million for Hybrid Electric Systems within the Vehicle 
Technologies account of the Advanced Energy Initiative of the Energy 
Efficiency and Renewable Energy budget. Within the Hybrid Electric 
Systems sub-accounts, Austin Energy supports funding of: (1) $21 
million for Vehicle and System simulation and testing; (2) $41.8 
million for Energy Storage Research and Development; (3) $15.6 million 
for Advanced Power Electronics and Electric Motors Research and 
Development; and (4) $2.1 million for the SBIR/STTR program. Austin 
would request that the Committee consider these funding requests within 
the fiscal year 2008 budget request: (1) $10 million for Section 706 of 
the Energy Policy Act of 2005 (``EPACT'')--Joint Flexible Fuel/Hybrid 
Commercialization Initiative; (2) $15 million for Sections 711/911 of 
EPACT--Hybrid Vehicles for system and component development for plug-in 
hybrid vehicles; and (3) $2.5 million for Title 8 of EPACT--Advanced 
Vehicles for a fuel cell vehicle developed with a plug-in hybrid drive 
platform. Funding of $27.5 million within these three areas should be 
included within the Hybrid Electric Systems sub-accounts section of the 
Vehicle Technologies account of the Energy Efficiency and Renewable 
Energy budget.
    Austin Energy, the Nation's 10th largest community-owned electric 
utility, serves 360,000 customers within the City of Austin and Travis 
and Williamson Counties, Texas. Austin provides electricity to the 
capital city of Texas through a diverse generation mix of nuclear, 
coal, natural gas and renewable resources. Austin Energy has been 
nationally recognized for its Green Choice renewable electricity 
program. For the last four years Austin Energy has sold more renewable 
electricity, primarily wind, than any other utility in the country.
    Austin Energy has also been a national leader in energy efficiency. 
Austin's Green Building program for both commercial and residential 
buildings has been a national model in the use of sustainable building 
technologies.
    As the President has stated frequently in the last two years, the 
United States needs to break its addiction to imported supplies of 
petroleum. One of the principle uses of imported petroleum is to 
produce gasoline to power the transportation sector, particularly 
automobiles. Already popular hybrid vehicles demonstrate that there is 
now a technologically feasible way to power automobiles with both an 
internal combustion and an electric engine. The plug-in hybrid vehicle 
is a modification of current hybrids. Plug-in hybrids can be charged 
from the existing electrical grid by plugging the car into an ordinary 
wall socket while the internal combustion engine can be a flexible fuel 
engine that will run on domestically produced biofuels.
    PHEVs will run on a dedicated electric charge for a number of miles 
(20-60, depending on the size of the battery pack), then shift to 
liquid fuel. The General Motors concept car, the Volt, unveiled at the 
recent Detroit Auto Show in January of this year, is an example of this 
type of vehicle. It has an all electric range of 40 miles.
    PHEVs have the ability to significantly increase efficiency of fuel 
use over both conventional cars and existing hybrids. Instead of the 
constant switching between gasoline and electric power as is done in a 
hybrid today, the PHEV runs on electric power until the batteries are 
drained; only then does the fuel engine engage to power the car. If the 
driver's daily commute is within the electric range (20-60 miles), or 
if driving is within a small geographical area (city delivery trucks), 
then gasoline consumption is minimized, thus starting us down the road 
to reduced imports.
    Austin Energy is convinced that PHEVs will be a significant 
contributor to reducing our nation's reliance on imported oil. Unlike 
other transportation alternatives, PHEVs require neither new fueling 
infrastructure nor driver behavioral changes. The infrastructure for 
PHEVs, standard electric sockets, already exists and Americans have 
already become accustomed to plugging-in Blackberries, cell-phones and 
lap-top computers. In the event that one forgets or is unable to plug-
in the car, it will run as usual on gasoline or flexible fuel.
    The funding initiatives recommended by the President in the DOE 
fiscal year 2008 budget submission will speed the day when PHEVs are 
widely available to American citizens. DOE's research will help achieve 
the battery technology needed to move the PHEV from a concept car to 
automobile dealer showrooms. Other DOE programs support plug-in hybrid 
technology developed as part of flexible fueling operations for cars as 
well as integrated within the advanced fuel cell vehicle. PHEV 
technology will complement any existing automobile fueling system or 
one envisioned for the future. The DOE budget submission will provide 
for deployment of PHEVs in demonstration activities to allow for 
different commercial applications of the vehicles. PHEV technology is 
adaptable to all vehicle platforms--from large trucks to commuter cars.
    Austin Energy supports Congressional appropriations to increase the 
availability of PHEVs and demonstrate its capacity as a solution to our 
``oil addiction.'' Austin Energy is also willing to support the federal 
effort by overseeing a national grass-roots campaign to demonstrate the 
consumer market for PHEVs, a project underway for more than a year now.
    Austin Energy's ``Plug-In Partners'' is an initiative to 
demonstrate to the automobile manufacturers that a consumer market 
already exists for PHEVs. Utility rebates and incentives, state, county 
and municipal government endorsements, and citizen petitions are 
evidence of an expanding interest in PHEVs. A key aspect of the Plug-In 
Partners campaign is the ``soft'' fleet orders. Fleet owners, both 
private and governmental, sign a pledge to strongly consider purchasing 
a certain number of PHEVs when available from an original equipment 
manufacturer. While the fleet owner understands that the cars are not 
presently on line, the belief in the concept of a PHEV is sufficient 
for them to make the soft fleet order. This helps demonstrate a market 
to automakers. After one year of the Plug-In Partners campaign, over 
8,400 vehicles have been pledged by soft fleet orders.
    Austin Energy's Plug-In Partners campaign was founded nationally on 
January 24, 2006 at the National Press Club in Washington, DC. This 
past January, in the Russell Senate Office Building, Plug-In Partners 
celebrated its one year anniversary. Senator Orrin Hatch of Utah spoke 
at both events of the importance of PHEVs to ending our reliance on 
foreign oil. The Plug-In Partners campaign has been joined by more than 
500 partners in 41 states, including the cities of Austin, Albuquerque, 
Aspen, Baltimore, Boston, Boulder, Chicago, Cleveland, Colorado 
Springs, Dallas, Fort Worth, Denver, Des Moines, Honolulu, Las Vegas, 
Los Angeles, Kansas City, MO, Milwaukee, Minneapolis, Philadelphia, 
Phoenix, Portland, OR, Sacramento, Salt Lake City, San Antonio, San 
Francisco and Seattle. The New York State Energy & Research Development 
Authority (NYSERDA), American Corn Growers Association, Soybean 
Producers of America, Alliance To Save Energy, American Council on 
Renewable Energy, American Wind Energy Association, Consumer Federation 
of America, Energy Future Coalition, Environmental and Energy Study 
Institute and the South Shore Clean Cities of Northeast Indiana support 
the Plug-In Partners campaign. The Center for American Progress and Set 
America Free are among the many public interest groups that are members 
of the coalition. Finally, Plug-In Partners has been endorsed by the 
American Public Power Association and almost 200 of its members around 
the country as well as the Edison Electric Institute, National Rural 
Electric Cooperative Association and the Washington Public Utility 
District Association.
    Austin Energy has also committed $1 million for rebates to Austin 
Energy customers who purchase plug-in hybrids when they become 
available.
    The Congress, by funding DOE initiatives to develop and deploy 
PHEVs, will help speed the commercialization by auto manufacturers and 
will be a significant step in lessening American dependence on imported 
oil.
                                 ______
                                 
    Prepared Statement of the National Association of State Energy 
                               Officials
    Mr. Chairman and members of the Subcommittee, I am Peter Smith of 
New York and Chair of the National Association of State Energy 
Officials (NASEO). NASEO is submitting this testimony in support of 
funding for a variety of U.S. Department of Energy programs. 
Specifically, we are testifying in support of no less than $80 million 
for the State Energy Program (SEP). We wanted to take this opportunity 
to thank the Subcommittee for its support for an increase for this 
program in fiscal year 2007. We were also pleased that the Subcommittee 
added $300 million to the final fiscal year 2007 Continuing Resolution 
for energy efficiency and renewable energy programs. Recently, 30 
members of the Senate wrote to you to fund SEP at least at $74 million 
and Weatherization at a $275 million level in fiscal year 2008. SEP is 
the most successful program operated by DOE in this area. Within an $80 
million funding level for SEP we would support the Administration's 
proposed $10.5 million competitive program, but we do not support such 
an effort at the proposed funding level of $35 million for the core SEP 
activities. SEP is focused on direct energy project development, where 
most of the resources are expended. SEP has set a standard for state-
federal cooperation and matching funds to achieve critical federal and 
state energy goals. We also support $300 million for the Weatherization 
Assistance Program (WAP). These programs are successful and have a 
strong record of delivering savings to low-income Americans, 
homeowners, businesses, and industry. We also support the increase 
proposed in the President's budget for the Energy Information 
Administration (EIA) to $105 million, including an increase of $600,000 
for EIA's State Heating Oil and Propane Program, in order to cover the 
added costs of increasing the frequency of information collection (to 
weekly), the addition of natural gas, and increasing the number of 
state participants. EIA's new state-by-state data is very helpful. EIA 
funding is a critical piece of energy emergency preparedness and 
response. This funding will permit EIA to maintain key Forms 182, 856 
and 767 (involving crude oil and emissions). NASEO continues to support 
funding for a variety of critical deployment programs, including 
Building Codes Training and Assistance ($7.5 million), Rebuild America 
($3.8 million), Energy Star ($6.8 million) and Clean Cities ($9.6 
million). NASEO supports funding for the Office of Electricity Delivery 
and Energy Reliability, at least at the fiscal year 2006 request of 
$161.9 million, with specific funding for the Division of 
Infrastructure Security and Energy Restoration of $18 million, which 
funds critical energy assurance activities. We strongly support the R&D 
function, Operations and Analysis and Distributed Energy activities 
within this office. The industries program should be funded at a $74.8 
million level, equal to the fiscal year 2005 levels, to promote 
efficiency efforts and to maintain U.S. manufacturing jobs, especially 
in light of the loss of millions of these jobs in recent years. 
Proposed cuts in these programs are counter-productive and are 
detrimental to a balanced national energy policy. We remain concerned 
that a number of programs authorized in the Energy Policy Act of 2005 
(EPACT 2005) have received no funding. Of special interest are sections 
124, 125, 126, and 128 of EPACT 2005. We were pleased that funding has 
been provided for the pilot program under Section 140 of EPACT 2005.
    Over the past five years, both oil and natural gas prices have been 
rising in response to international events, increased domestic use and 
the result of the 2005 hurricanes. We expect $60 oil to continue for an 
extended period of time, with an expanded problem as summer approaches. 
Gasoline prices have been spiking recently. In addition, we now have 
quantifiable evidence of the success of the SEP program, which 
demonstrates the unparalleled savings and return on investment to the 
federal taxpayer of SEP. Every state gets an SEP grant and all states, 
the District of Columbia and territories support the program.
    In January 2003, Oak Ridge National Laboratory (ORNL) completed a 
study and concluded, ``The impressive savings and emissions reductions 
numbers, ratios of savings to funding, and payback periods .  .  . 
indicate that the State Energy Program is operating effectively and is 
having a substantial positive impact on the nation's energy 
situation.'' ORNL updated that study and found that $1 in SEP funding 
yields: (1) $7.22 in annual energy cost savings; (2) $10.71 in 
leveraged funding from the states and private sector in 18 types of 
project areas; (3) annual energy savings of 47,593,409 million source 
BTUs; and (4) annual cost savings of $333,623,619. The annual cost-
effective emissions reductions associated with the energy savings are 
equally significant: (1) Carbon--826,049 metric tons; (2) VOCs--135.8 
metric tons; (3) NOX -6,211 metric tons; (4) fine 
particulate matter (PM10)--160 metric tons; (5) 
SO2--8,491 metric tons; and (6) CO--1,000 metric tons. The 
report done by DOE's Inspector General in April 2006 criticized DOE 
monitoring of SEP but affirmed that state actions were consistent with 
the applicable law and regulation. State monitoring and verification 
has confirmed SEP's effectiveness.
    State Energy Program Special Projects and Other Deployment 
Programs.-- Through fiscal year 2005, SEP Special Projects provided 
matching grants to states to conduct innovative project development. It 
had been operated for ten years and has produced enormous results in 
every state in the United States. We could support funding of DOE's 
new, proposed SEP competitive program, but only within an $80 million 
SEP appropriation. The other deployment programs, including Rebuild 
America, Building Codes Training and Assistance, Clean Cities and 
Energy Star, should receive funding of $27.7 million in fiscal year 
2008.
    Industrial Energy Program.--A funding increase to a level of $74.8 
million for the Industrial Technologies Program (ITP) is warranted. 
This is a public-private partnership in which industry and the states 
work with the Department of Energy to jointly fund cutting-edge 
research in the energy area. The results have been reduced energy 
consumption, reduced environmental impacts and increased competitive 
advantage of manufacturers (which is more than one-third of U.S. energy 
use). The states play a major role working with industry and DOE in the 
program to ensure economic development in our states and to try to 
ensure that domestic jobs are preserved.
    Examples of Successful State Energy Program Activities.--The states 
have implemented thousands of projects. Here are a few representative 
examples.
    California.--The California Energy Commission has operated energy 
programs in virtually every sector of the economy. The state has 
upgraded residential and non-residential building codes, developed a 
school energy efficiency financing program, industrial partnerships in 
the food and waste industry, instituted a new replacement program for 
school buses utilizing the newest natural gas, advanced diesel and 
hybrid technologies. The buildings program has reduced consumption by 
enormous amounts over the past few years, through alternative financing 
programs and outreach. The state has worked closely with the western 
governors to implement a variety of new programs. California's 
greenhouse gas mitigation plans and a new solar initiative are moving 
forward.
    Colorado.--The state has initiated new energy legislation this year 
and is greatly expanding both renewable energy and ethanol/biofuels 
development. In addition, the state is working to assist new and 
existing building energy efficiency projects. Fifty new building 
projects have received assistance and the state has arranged $170 
million of investments in 80 performance contracting projects.
    Hawaii.--Three major pieces of energy legislation were passed in 
2006. The state energy office is working with state agencies to satisfy 
LEED Silver requirements and utilize Energy Star products. The state 
has been promoting ethanol and biodiesel development, developing a new 
Hawaii Energy Strategy in 2007, developing a major hydrogen energy 
program and implementing a large Renewable Portfolio Standard. The 
energy efficient buildings program has saved $10 million annually and 
the ``Green Business Program'' has saved $175 in water, energy and 
waste minimization for every $1 in SEP funds invested.
    Idaho.--In Idaho the state has rated homes utilizing the Energy 
Star tools and signed-up 93 new builders to participate in the program. 
An aggressive energy efficiency financing program has produced more 
than 2,500 loans, totaling over $16 million, resulting in significant 
energy savings. The agricultural energy program has focused on reducing 
irrigation costs and usage to improve agricultural productivity and 
costs. The state has initiated a new industrial program.
    Kentucky.--The programs supported by SEP have assisted in 
construction of high energy performance K-12 schools, developed $45 
million in energy savings performance contracts and funded energy 
efficiency and renewable energy projects at universities and local 
governments. The state is a leader in promoting Energy Star and they 
have an R&D grant program for energy efficiency and renewable energy.
    Louisiana.--The state energy office within the Department of 
Natural Resources is still heavily involved in post-Katrina relief. In 
addition, the state operates a cash rebate program of up to $2,000 for 
homeowner energy efficiency improvements. Thus far, almost 16,000 
rebates and loans have been issued totaling $21 million, and leveraging 
$199 million more in private funds. The state has also been expanding 
renewable energy development, working to enact stronger energy codes 
and promoting alternative transportation fuels.
    Mississippi.--The state operates an energy investment loan program 
targeted to schools, hospitals and manufacturers. They are focused on 
reducing energy consumption in state and school facilities and they 
have developed 50 energy management plans. Mississippi has been very 
active in the Energy Star program and has been attempting to conduct 
post-Katrina reconstruction in an energy efficient manner. They have 
also developed a rural business opportunity program.
    Missouri.--The energy office in Missouri has been operating a low-
interest energy efficiency loan program for school districts, colleges, 
universities and local governments. Thus far, public entities have 
saved more than $75 million each year, with more than 400 projects. The 
state energy office has also worked with the Public Utility Commission 
and the utilities within the State to get $20 million invested in 
residential and commercial energy efficiency programs. A new revolving 
loan for bio-diesel has also been initiated.
    New Jersey.--The state's Clean Energy Program has invested over 
$124 million thus far with resulting bill reductions to consumers 
projected to be almost $2 billion. 36 MW of solar has already been 
installed, and the state is implementing rebates, net metering, 
standardized interconnections and a Solar Renewable Energy Certificate 
trading program. The state also has an alternative fuel, bio-heat and 
bio-diesel rebate program.
    New Mexico.--With new state legislation, the state energy office is 
supporting and expanding renewable energy usage, tax incentives for 
hybrid vehicles, school energy efficiency programs, technical 
assistance to the wind and solar industries, and expansion of 
geothermal resources. The state has arranged approximately 40 energy 
performance contracts with annual energy savings in the millions. There 
has also been an expansion in the use of ethanol and bio-fuels.
    North Dakota.--As Kim Christianson testified before Chairman 
Dorgan's Subcommittee on Energy on February 12, 2007, the state energy 
office is supporting programs for wind, ethanol and bio-diesel 
promotion. 578 MW of wind projects have been developed, with nine 
ethanol and bio-diesel plants in various stages of development. 
Projects in 412 buildings has led to $24 million in energy efficiency 
improvements. The state has also funded energy efficiency programs for 
local builders, schools and for lower income households.
    Rhode Island.--The state has reorganized and elevated the energy 
agency, instituted new renewable energy and energy efficiency programs, 
joined with the neighboring states in expanded cooperative efforts and 
also focused on energy emergency preparedness.
    South Dakota.--The state has focused on supporting wind, ethanol 
and bio-diesel development. In addition, a matching energy efficiency 
grant program has been established for heating controls, lighting, etc. 
The state also operates an energy loan program for state-run facilities 
and a technical energy analysis program for those facilities.
    Texas.--The Texas Energy Office's Loan Star program has long 
produced great success by reducing building energy consumption and 
taxpayers' energy costs through efficient operation of public 
buildings. This saved taxpayers more than $200 million through energy 
efficiency projects. Over the next 20 years, Texas estimates that the 
program will save taxpayers over $500 million. In another example, the 
state promoted the use of ``sleep'' software for computers, which is 
now used on 136,000 school computers, saving 42 million kWh and 
reducing energy costs by $3 million annually. The state has initiated 
the Texas Emissions Reduction Plan/Texas Energy Partnership in 41 urban 
counties to reduce emissions through cost-effective energy efficiency 
projects.
    Utah.--SEP funds have been utilized to support solar and wind 
programs, as well as implementation of a stronger energy building code 
through training programs. The state has also supported local 
government energy efficiency and has developed a public building energy 
efficiency pilot.
    Washington.--The state energy agency works with the Northwest 
Energy Efficiency Alliance to target over $20 million in funding for 
energy efficiency and renewable energy projects. The state is also 
closely involved in energy emergency preparedness and response. The 
Resource Efficiency Managers Program, supported by SEP, conducts on-
site training for energy savings. For example, working with Ft. Lewis 
and Puget Sound naval facilities, the program has saved over $2.5 
million. A major focus on energy efficiency programs in buildings has 
been successful.
    West Virginia.--The energy office has focused on industrial energy 
programs savings, including identified savings of $3.7 million in 2006 
alone. Energy projects in the industrial sector have totaled $33 
million during the past 10 years. The state has also supported dramatic 
expansion of renewable energy programs and is projecting $3 million in 
school energy cost savings each year through energy efficiency 
programs. Other project areas include lighting demonstrations and 
energy audits, poultry house bio-filters, building energy use in 
conjunction with West Virginia University and innovative energy 
technology opportunities in conjunction with Marshall University.
                                 ______
                                 
          Prepared Statement of BP Exploration (Alaska), Inc.
  gas hydrate resource assessment on the north slope of alaska, april 
                                  2007
    The 2002 through present cooperative research between BP 
Exploration (Alaska), Inc. (BPXA) and the U.S. Department of Energy 
(DOE) in collaboration with the U.S. Geological Survey is helping to 
assess Alaska North Slope (ANS) methane hydrate resource potential. 
Since gas hydrate resource potential is unconventional and unproven, 
industry would not be able to perform this research without external 
support. Industry provides shallow 3D seismic and well data and access 
to infrastructure and DOE provides major research funding. This region 
is unique in that it combines known gas hydrate presence and existing 
production infrastructure. Continued full funding of the DOE Methane 
Hydrate program authorized by the Methane Hydrate Acts of 2000 and 2005 
is essential to the success of this research. Reservoir 
characterization, reservoir modeling, and associated studies culminated 
in the drilling of an approximately $4.3MM Stratigraphic Test well, 
MtElbert-01, in early 2007. This well successfully acquired critical 
gas hydrate-bearing formation and fluid data, which will help mitigate 
potential recoverable resource uncertainty. Future production testing 
is a key goal of the Federal Research and Development program and may 
follow, but this remains to be decided following Stratigraphic Test 
data analyses. Future studies, if approved, would acquire additional 
static data and would include production testing, likely from a gravel 
pad within production infrastructure.
    Methane hydrate may contain a significant portion of world gas 
resources within offshore and onshore arctic regions petroleum systems. 
In the United States, accumulations of gas hydrate occur within 
pressure-temperature stability regions in both offshore and also 
onshore near-permafrost regions. USGS probabilistic estimates indicate 
that clathrate hydrate may contain a mean of 590 TCF in-place ANS gas 
resources (Figure 1). Over 33 TCF in-place potential gas hydrate 
resources are interpreted within shallow sand reservoirs beneath ANS 
production infrastructure within the Eileen trend (Figure 2). Regional 
reservoir modeling studies indicate that from 0 to 12 TCF of this 33 
TCF in-place might potentially be recoverable, but future exploitation 
of gas hydrate would require developing feasible, safe, and 
environmentally-benign production technology, initially within areas of 
industry infrastructure. In the United States, the ANS onshore and Gulf 
of Mexico (GOM) offshore are currently known to favorably combine these 
factors. In addition to the clear benefits that would accrue to the 
State of Alaska through realization of gas hydrate as an energy 
resource, the information and technology being developed in this 
onshore ANS program will be an important component to assessing the 
possible productivity of the potentially much larger marine hydrate 
resource. The resource potential of gas hydrate remains unproven, but 
if proven, could lead to greater U.S. energy independence.
    Although up to 100 TCF in-place gas may be trapped within the gas 
hydrate-bearing formations beneath existing ANS infrastructure, it has 
been primarily known as a shallow gas drilling hazard to the hundreds 
of well penetrations targeting deeper oil-bearing formations and has 
drawn little resource attention due to no ANS gas export infrastructure 
and unknown potential productivity. There remain significant challenges 
in quantifying the fraction of these in-place resources that might 
eventually become a technically-feasible or possibly a commercial 
natural gas reserve.
    If gas can be technically produced from gas hydrate and if future 
studies help prove production capability at economically viable rates, 
then methane dissociated from ANS gas hydrate could help supplement 
fuel-gas, provide additional lean-gas for reservoir energy pressure 
support, sustain long-term production of portions of the 
geographically-coincident 20-25 billion barrels viscous oil resource, 
and/or potentially supplement conventional export-gas in the longer 
term. Continued government-industry collaborative support of this 
research is needed to help determine this future resource potential.


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


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

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


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



    In the years 1990-1996 the program consisted largely of ``industry 
funding'' and averaged $100 million annually. There were some ``cross-
cutting'' projects in this time, but they were a small percentage of 
the total. Even in the years 1999-2003, spending on industry projects 
[black] vs. crosscutting [white] was approximately 2:1.
    Beyond 2003, the ITP program was not only the target of drastic 
cuts but remaining funds were rebalanced to favor crosscutting vs. 
industry specific projects. As shown in Figure 1, the level of energy 
efficiency of materials industries dictates that new process 
development (``industry specific'' projects) are required vs. the 
crosscutting (incremental) projects.
    Our request entails two parts:
  --A return to a total program level of $125 million.
  --A re-structuring of the program so as to return to the structure 
        that was so successful from 1990-2003--a focus on new process 
        development via industry specific research with at least a 
        ratio of 2:1 of new process research to crosscutting 
        (incremental) investments.
    AMMEX members have identified their top new process development 
concepts (not in priority order) which would be pursued at the funding 
levels and structure defined above;
Aluminum
    Improved, energy-efficient burners and furnaces for aluminum 
melting.
    Improved energy efficiency and recovery rates for recycling 
technologies.
Chemicals
    Development of alternative feedstocks for the chemical industry to 
reduce dependence on petroleum and natural gas derived feedstocks.
    Nano-manufacturing scale-up methodologies for key unit operations: 
synthesis, separation, purification, stabilization, and assembly.
    Development of low-energy, low-capital membrane or hybrid 
separations technology.
Glass
    Submerged Combustion Melter.
    Waste Heat Recovery and Use as Electrical or Chemical Energy.
    Low Residence Time Glass Refining Technologies.
Forest Products
    Advanced water removal and high efficiency pulping.
    Gasification of Spent Pulping Liquors and Biomass Residuals.
Metal Casting
    Simulation of Dimensional Changes and Hot Tears.
    Engineered Coatings for Aluminum Pressure Dies.
    Developing a lightweight production cast aluminum metal matrix 
composite alloy.
Steel
    Ironmaking by Molten Oxide Electrolysis.
    Ironmaking by Flash Smelting using Hydrogen.
    Demonstration of the Paired Straight Hearth Furnace Process.
                       ammex member organizations
Kurtz Bros.
American Iron and Steel Institute
Glass Manufacturing Industry Council
Aluminum Association
Waupaca
American Foundry Society
Chemical Industry VISION 2020 Technology Partnership
American Forest and Paper Association
Hyatt Die Cast
North American Die Casting Association
National Association of State Energy Officials
Northeast Midwest Institute
Gibbs Die Casting
Intermet Corning Glass
Smith Foundry Co.
Anheuser Busch--Longhorn Glass
Glass Service, Inc.
Carteret Die Casting Corp
Leone Industries Glass Packaging
North Carolina Industries of the Future
Armstrong
North Carolina Industries of the Future
Diagnostic Instrumentation & Analysis Laboratory (Mississippi State 
Univ.)
Society for Glass Science and Practices
Praxair, Inc.
Siemens Energy and Automation, Inc.
Gas Technology Institute
Nucast
Varicast
Clinkenbeard
AVALON Precision Casting Company
Industries of the Future West Virginia
Visteon
Bremen Castings Incorporated
Savannah River Technology Center
Indiana Industries of the future
Bridesburg Foundry
Oshkosh
Federal Bronze, A Division of the One Source Casting Corporation
West Virginia Development Office
Weyerhaeuser
Columbia Steel Casting Co., Inc.
Cunningham Pattern & Engineering, Inc.
GSC Investment Castings, Machining & Assembly
Delvest, Inc.
Fan Steel
Weatherly Casting & Machine Co.
Citation Innovative Metal Components
Magma
Atchison Casting
Yankee Casting
Saint Clair Die Casting, LLC
Ahresty
The BOC Group
Saint Paul Metalcraft Inc.
Thakar Aluminum Corporation
Eclipse Inc./Combustion Tec
Briggs & Stratton
Johns Manville a Berkshire Hathaway Company
University Center for Glass Research
Owens Corning
CPI Cast Products Inc.
Pennsylvania Industries of the Future
Callen Manufacturing Corporation
CertainTeed
ABCO Diecasters Inc.
Energy Industries of Ohio
U.S. Silica Company
Borax
A&B Die Casting
PPG Industries
Brillcast, Inc.
Durametal
May Foundry & Machine
NEENAH Foundry Company
Citation Innovative Metal Components
SECAT
                                 ______
                                 
             Prepared Statement of IMPACT Technologies LLC
    Dear Honorable Senators: I am a citizen, tax payer, small business 
owner, engineer, inventor and developer of new technology covering 
several industries. I am also a small oil producer and investor in the 
oil and gas industry. I have worked for a very large (major) oil and 
gas company (Chevron) and smaller independent oil and gas producers. 
After establishing my own companies I have obtained bank financing, 
industry financing, angel financing, personal investments, state 
investment groups and directly with the U.S. Department of Energy (DOE) 
and other groups supported by DOE funding, including the Petroleum 
Technology Transfer Council (PTTC), Stripper Well Consortium (SWC) and 
several universities. In fact, I have invested my time by (previously) 
serving on the governing boards of the SWC and PTTC.
    The return on public investments (DOE, NASA, others) in properly 
vetted technologies is tremendous. I have found that industry will not 
support a new technology unless it is proven. For higher technologies 
that proving process is expensive and risky--too risky or requiring too 
long a time frame for all banks, most angel financing and too small for 
venture capital groups. I have invested significant personal monies in 
my own projects, but that will only go so far in developing significant 
technologies. That investment GAP must be filled (fully or partially) 
by public investment yielding tremendous returns in dollars and in 
public good.
    Industry wide, that tremendous return on public investment through 
DOE has included the coal bed methane resource development (measured in 
the trillion of cubic feet of natural gas) for the public benefit. 
Unconventional oil and gas shale development will only occur with DOE 
support of key technologies. The public investment of the DOE (directly 
and through SWC) has allowed technologies to be developed and tested so 
that private groups can then invest to take the products commercial. 
Most of these technologies would not become commercial if not for this 
public investment boost.
    Specifically and on a more direct and personal level, approximately 
$170,000 in DOE and SWC (cost share) funds has allowed Impact to design 
and prove of a new, patented pump technology that will gross an 
estimated $305 million over 10 years, generating taxes and jobs. This 
new pump technology will impact the oil and gas, construction, 
demolition, environmental and job shop industries. It will be licensed 
to existing pump manufacturers after the 5 years. That small, but 
significant, DOE and SWC investment will allow private angel investors 
to see proven technology and feel comfortable enough to invest and take 
the company to the next commercialization level. It will yield a direct 
return on investment of over 1,800:1 not counting the benefits it will 
generate for the impacted industries! It would not have occurred 
without DOE and SWC funding.
    A second technology now being commercialized by Impact is based on 
a $180,000 (cost share) investment from DOE and the SWC plus (funds 
used to leverage other state funds including) Oklahoma's OCAST 
investment group. With that public investment Impact has built a 
patented motor prototype and is now building on that success to 
commercialize these new motors for drilling. This new motor technology 
will impact the oil and gas, environmental, geothermal, resource 
mining, utilities and construction industries. That DOE and SWC 
investment will generate an estimated $228 million over 10 years, based 
on our conservative business plan forecasts. That is a return on public 
investment of over 1,300:1 not including the benefits to the impacted 
industries and the public through taxes, jobs and improved competition!
    A third technology Impact has developed with others is the SPI Gel 
Technology which is directly a result of the Department of Energy's 
investment in the Stripper Well Consortium. This is a new patent-
pending silicate based gel for reducing water production and pipe 
repairs. It is environmentally safe for fresh water applications. We 
are in the field test stage of this technology right now and will 
license it out later this year. The public investment of $203,000 (cost 
share) will return over a 1,000:1 return in gross sales and other 
benefits to society through jobs, taxes and continued resource 
production. This technology would not be developed without DOE and SWC 
funds.
    I have personally seen the investments of the DOE directly in and 
through the SWC and PTTC on small oil and gas producers. These new 
technologies are significant and will have a major impact on the public 
energy resources. These investments are small but have a extremely high 
return (over 1,000:1) and should be continued. These public funds fill 
the gap between concept and private funding to commercialize good 
ideas.
                                 ______
                                 
      Prepared Statement of the National Mining Association (NMA)
                          nma recommendations
Department Of Energy (DOE)
    $108 million for the FutureGen project; $257 million in previously 
appropriated funds should be designated for FutureGen; $300 million for 
base coal research and development programs; $273 million for the Clean 
Coal Power Initiative (CCPI); $8.4 million for the loan guarantee 
office and $9 billion cap on federal loan guarantee commitments; $15 
million for DOE's participation in the Asia-Pacific Partnership on 
Clean Development and Climate.
U.S. Army Corps Of Engineers
    Civil Works Program.--$180 million for the Regulatory Program. See 
the table below for NMA's list of priority lock and dam projects and 
recommendations for levels of funding required for their completion.
                               background
Office of Fossil Energy
    NMA strongly supports: the $108 million requested for the FutureGen 
project; as a zero cost action, the $257 million in unused Clean Coal 
Technology Program funds should be deferred to fiscal year 2009 for the 
FutureGen project (this action is essential to maintaining private 
sector cost-share and financing construction); and recommends at least 
$300 million be appropriated for base coal research and development 
programs.
    In addition, NMA recommends that CCPI be funded at a level of $273 
million, which would enable DOE to conduct a third solicitation 
targeting advanced technology systems that capture carbon dioxide for 
sequestration.
    The FutureGen public-private partnership will design and build, in 
the United States, the first-of-a-kind commercial-scale power plant 
that will provide the technological capability to: (1) capture and 
permanently store 90 percent or more of the plant's CO2 
emissions; (2) power about 150,000 American homes with the clean 
electricity it generates from coal; and (3) co-produce hydrogen and 
potentially other useful by-products from coal.
    The FutureGen Industrial Alliance, comprised of the largest coal 
producers and users in the world, has signed a cooperative agreement 
with the DOE to provide $250 million toward the cost of the project. 
The alliance members have extensive experience in building large-scale 
coal-fueled projects, while meeting budget and performance 
requirements. The alliance remains committed to moving the FutureGen 
project to its targeted completion in 2012, provided a multi-year 
funding scenario is secure, and its funding does not come at the 
expense of other coal research and demonstration programs.
    Technological advancements achieved in the base coal research and 
demonstration programs such as gasification, advanced turbines, and 
carbon sequestration, provide the component technologies that will 
ultimately be integrated into the FutureGen project. NMA believes these 
programs should be funded at a level of at least $300 million (which 
should include $109 for carbon sequestration--$30 million above the 
president's fiscal year 2008 budget request). In addition, the advanced 
turbine program should be funded at $40 million instead of the 
requested level of $22 million. The increase in funding for these and 
other programs will ensure the FutureGen project meets the intended 
goals.
    In addition, NMA recommends a $3 million level of funding for the 
Center for Advanced Separation Technology (CAST), which is led by a 
consortium of seven universities with mining research programs. The 
advanced separation program conducts high-risk fundamental research 
which will lead to revolutionary advances in separation processes for 
the coal industry and develop technologies that crosscut the full 
spectrum of mining and minerals industries.
Asia-Pacific Partnership on Clean Development and Climate (APP)
    NMA supports the administration's total request of $52 million for 
this partnership and specifically, the request of $15 million to fund 
the U.S. DOE's participation.
    The APP will spur development of cutting edge technologies and 
practices that support economic growth while reducing emissions, 
including greenhouse gas emissions. It will result in expansion of 
market opportunities for U.S. mining and equipment companies and other 
U.S. businesses.
    The APP, involving the United States, Australia, China, India, 
Japan and South Korea, is important for a number of reasons:
  --It will result in real emissions reductions. With the participation 
        by China and India, APP is the only international agreement 
        addressing rapid emissions growth in the developing world, 
        which is forecast to surpass emissions of industrialized 
        nations in 2010. APP is a voluntary, technology-based approach 
        to emissions reduction geared towards future economic growth 
        and energy security and will be more effective than unrealistic 
        mandates or treaties.
  --It builds on Methane-to-Markets and other successful programs that 
        reduce greenhouse gas emissions. The U.S. coal industry has 
        captured and re-used 308 billion cubic feet of coal mine 
        methane--the equivalent of removing 40 million automobiles per 
        year from the roads. APP, working with the EPA's Methane-to-
        Markets program will use U.S. experience and expertise to 
        accelerate large-scale capture and recycling of methane in 
        China and India.
  --It helps preserve coal as an important energy source. The United 
        States, China, India and Japan will be at the center of a 
        significant rise in population, economic activity and energy 
        use in the next 50 years. Coal is essential to sustaining 
        America's competitiveness and vitality in a changing world, as 
        it is in China and India. APP supports improvements in 
        efficiency in both coal mining and use through the acceleration 
        of clean coal technologies, industrial technology strategic 
        planning and energy efficiency best practices.
  --It creates new markets for U.S. companies in the emerging economies 
        of China and India.
U.S. Army Corps Of Engineers
    Regulatory Program.-- NMA supports the Administration's request of 
$180 million for administering the Corps' Clean Water Act (CWA), 
Section 404 permit program and for implementing the Memorandum of 
Understanding (MOU).
    The Corps' Regulatory Branch plays a key role in the U.S. economy 
since the Corps currently authorizes approximately $200 billion of 
economic activity through its regulatory program annually. The ability 
to plan and finance mining operations depends on the ability to obtain 
CWA Section 404 permits issued by the Corps within a predictable 
timeframe. In addition, NMA recommends that a portion of such 
regulatory program funding be used for implementing the MOU issued on 
February 10, 2005, by the Corps, the U.S. Office of Surface Mining, EPA 
and the U.S. Fish and Wildlife Service. The MOU encourages a 
coordinated review and processing of surface coal mining applications 
requiring CWA Section 404 permits.
    Below is a table indicating NMA's fiscal year 2008 Priority 
Navigation Projects.

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

                                 ______
                                 
           Prepared Statement of the American Nuclear Society
    Chairman Dorgan, Ranking Member Domenici, members of the 
subcommittee, on behalf of the more than 10,000 members of the American 
Nuclear Society, I am pleased to provide testimony on fiscal year 2008 
appropriations for the U.S. Department of Energy.
    First, as you know, ANS represents a diverse cadre of nuclear 
professionals. As such, our members' opinions on nuclear issues are 
often wide-ranging, and perhaps sometimes different from the 
subcommittee. However, the ANS truly appreciates the thoughtful and 
deliberate manner in which the subcommittee approaches issues related 
to nuclear energy, science, and technology.
    For fiscal year 2008, the ANS supports a strengthened portfolio of 
Federal investments in nuclear energy, science and technology. 
Specifically, the ANS recommends that the subcommittee fully fund the 
DOE Office of Nuclear Energy's fiscal year 2008 request, including the 
Advanced Fuel Cycle Initiative, the Nuclear Hydrogen Initiative, and 
the Generation IV reactor programs.
    The ANS also supports full funding for the Yucca Mountain 
repository program, so that DOE can proceed with its plans to submit a 
license application to the NRC by June 2008, and $913 million for the 
Nuclear Regulatory Commission.
    The ANS is aware that the Bush administration has proposed 
terminating funding for the University Reactor Infrastructure and 
Education Assistance program line in its fiscal year 2007 and 2008 
budget requests.
    In response, the ANS created the Special Committee on Federal 
Investment in Nuclear Education to review the issues and make 
recommendations on the issue. This report, entitled ``Nuclear's Human 
Element,'' focuses on longer term issues that need to be addressed by 
Congress and the executive branch in order to ensure the health and 
vitality of the U.S. nuclear science and engineering enterprise. It has 
generated a lot of positive discussion within the nuclear community, 
and we hope the subcommittee will use it to help guide the scope and 
structure of future Federal investments in this area.
    For fiscal year 2008, the ANS supports the request by the Nuclear 
Engineering Department Heads Organization (NEDHO) and the National 
Organization of Test, Research, and Training Reactors (TRTR) to provide 
$50.1 million in fiscal year 2008 in funding for university-based 
nuclear engineering programs, the level authorized by the Energy Policy 
Act of 2005.
    The ANS is aware that the DOE Office of Nuclear Energy has 
indicated its desire to continue funding university programs through 
its existing R&D programs and we recognize the debate over funding 
vehicles is more nuanced than ``line-item or nothing.'' However, we 
agree with NEDHO and TRTR that, regardless of the mechanism through 
which it is provided, DOE funding for university programs must be 
predictable, growth-oriented, and focused on longer-term scientific and 
workforce development milestones.
    Regarding the Global Nuclear Energy Partnership (GNEP), the ANS 
recognizes that there are concerns about the aggregate costs and 
technological pathways associated with implementation of the GNEP 
initiative. However, the Society supports the administration's proposed 
increase in fiscal year 2008 funding for the Advanced Fuel Cycle 
Initiative which will allow the pertinent cost and design questions to 
be explored at an expedient pace.
    Finally, the ANS supports an fiscal year 2008 funding level of $100 
million for the Next-Generation Nuclear Plant, funded through the 
Generation IV Nuclear Energy Systems Initiative account. The NGNP holds 
great promise to employ nuclear energy to meet U.S. hydrogen production 
and industrial process heat needs, and its development should be 
accelerated to meet the milestones set forth in the Energy Policy Act 
of 2005.
                                 ______
                                 
        Prepared Statement of the American Geological Institute
    To the chairman and members of the subcommittee: Thank you for this 
opportunity to provide the American Geological Institute's perspective 
on fiscal year 2008 appropriations for geoscience programs within the 
subcommittee's jurisdiction. The President's budget request for 
Department of Energy (DOE) research programs provides no funding for 
oil and gas research and development. Not only would the request 
terminate basic research for oil and gas, it would also repeal the 
ultradeep water and unconventional natural gas and other petroleum 
research funding proposed in the Energy Policy Act of 2005. Given the 
interest of the administration and Congress to reduce the Nation's 
foreign oil dependence and reduce prices on oil and natural gas, it 
seems like an inopportune time to eliminate programs that could help 
with these objectives. We are especially concerned about the reduction 
or outright termination of oil and gas research funding for 
universities. These programs not only support innovations in oil and 
gas exploration and extraction, but the teaching and training of the 
next generation of professionals and faculty in these vital areas. AGI 
applauds the requested 7 percent increase for the largest supporter of 
physical science research in the United States, DOE's Office of 
Science, and encourages the subcommittee's full support for this 
increase. We also support increased funding requests for clean energy 
research, which focuses spending on solar, biomass/biofuels, hydrogen 
fuel, FutureGen and nuclear power, however, spending for other clean 
energy alternatives, such as geothermal, could be included in 
appropriations while remaining consistent with national needs and 
objectives.
    AGI is a nonprofit federation of 44 geoscientific and professional 
associations that represent more than 100,000 geologists, 
geophysicists, and other earth scientists. The institute serves as a 
voice for shared interests in our profession, plays a major role in 
strengthening geoscience education, and strives to increase public 
awareness of the vital role that the geosciences play in society's use 
of resources and interaction with the environment.
               doe fossil energy research and development
    AGI urges you to take a critical look at the Department of Energy's 
Fossil Energy Research and Development (R&D) portfolio as you prepare 
to craft the fiscal year 2008 Energy and Water Development 
Appropriations bill. Over the past 7 years, Members of Congress have 
strongly emphasized the need for a responsible, diversified and 
comprehensive energy policy for the Nation. The growing global 
competition for fossil fuels has led to a repeated and concerted 
request by Congress to ensure the Nation's energy security. Energy 
Information Administrator Guy Caruso has noted the Nation's need for 
fossil fuels over the next 30 years and thus the critical need to 
continue R&D on fossil fuels and all other energy resources. The 
President's proposal, which provides no funding for oil and gas R&D, is 
short sighted and inconsistent with congressional concerns. No funding 
for oil and gas R&D will hinder our ability to achieve energy stability 
and security.
    The research dollars spent by Fossil Energy R&D go primarily to 
universities, State geological surveys and research consortia to 
address critical issues like enhanced recovery from known fields and 
unconventional sources that are the future of our natural gas supply. 
This money does not go into corporate coffers, but it helps American 
businesses remain competitive by giving them a technological edge over 
foreign companies. All major advances in oil and gas production can be 
tied to research and technology. AGI strongly encourages the 
subcommittee to ensure a balanced and diversified energy research 
portfolio that does not ignore the Nation's primary sources of energy, 
fossil fuels, for at least the next 30 years.
    Today's domestic industry has independent producers at its core. 
With fewer and fewer major producing companies and their concentration 
on adding more expensive reserves from outside of the contiguous United 
States, it is the smaller independent producers who are developing new 
technologies to extract our domestic resources efficiently and cleanly. 
However, without Federal contributions to basic research that drives 
innovation, small producers cannot develop new technologies as fast, or 
as well, as they do today. The DOE program has produced many key 
successes among the typical short-term (1 to 5 year) projects. And even 
failed projects have proven beneficial, because they've often resulted 
in redirection of effort toward more practical exploration and 
production solutions. Ideally, DOE and private sector participants 
share the programs R&D funding on a 50-50 basis, with the government 
contributing actual dollars and the company contributing dollars or 
``in kind'' products and services. To justify the use of public funds, 
new technology developed from such projects is made available to 
industry.
    In 2003, at the request of the House Interior Appropriations 
Subcommittee, the National Academies released a report entitled Energy 
Research at DOE: Was It Worth It? Energy Efficiency and Fossil Energy 
Research 1978 to 2000. This report found that Fossil Energy R&D was 
beneficial because the industry snapped up the new technologies created 
by the R&D program, developed other technologies that were waiting for 
market forces to bring about conditions favorable to commercializing 
them and otherwise made new discoveries. In real dollars from 1986-2000 
the government invested $4.5 billion into Fossil Energy R&D. During 
that time, realized economic benefits totaled $7.4 billion. This 
program is not only paying for itself, it has brought in $2.9 billion 
in revenue.
    Unfortunately, despite this success, the President's fiscal year 
2008 budget request continues the alarming reduction of energy R&D 
funding by eliminating all funding for our primary energy resources, 
oil and gas. There has been an 85 percent drop in renewable, fossil and 
nuclear energy R&D funding at DOE since 1978. Federal funding for 
renewable, fossil and nuclear R&D has decreased dramatically from $5.5 
billion in 1978 to $793 million in 2005 according to a Government 
Accountability Office (GAO) report entitled Key Challenges Remain for 
Developing and Deploying Advanced Energy Technologies to Meet Future 
Needs and released in December 2006. Such significant under-investment 
in energy R&D over many decades hinders progress on cost-effective and 
environmentally-sound exploration and extraction of raw energy 
resources and clean and efficient development, production and use of 
energy products.
    The Federal investment in energy R&D is particularly important when 
it comes to longer-range research with diversified benefits. In today's 
competitive markets, the private sector focuses dwindling research 
dollars on shorter-term results in highly applied areas such as 
technical services. In this context, DOE's support of fossil energy 
research, where the focus is truly on research, is very significant in 
magnitude and impact compared to that done in the private sector, where 
the focus is mainly on development. Without more emphasis on research, 
we risk losing our technological edge in the highly competitive global 
market place.
    As we pursue the goal of reducing America's dependence on unstable 
and expensive foreign sources of oil, we must continue to increase 
recovery efficiency in the development of existing domestic oilfields, 
conserving the remaining in-place resources. Since the 1980s, 80 
percent of new oil reserves in this country have come from additional 
discoveries in old fields, largely based on re-examination of 
previously collected geoscience data. These data will become even more 
important in the future with the development of new recovery 
technologies.
    Perhaps one of the most promising areas of R&D for domestic oil 
supplies are in the ultradeep waters where drilling is allowed in the 
Gulf of Mexico. The Energy Policy Act of 2005, set aside $50 million 
annually from collected offshore royalties for ultradeep water and 
other unconventional oil and gas R&D to support clean and efficient 
exploration and extraction in the Gulf. The President's budget request 
would repeal this program and provide no funding for ultradeep water 
and other unconventional oil and gas R&D. AGI asks that you consider 
R&D spending or other incentives to encourage the private sector to 
invest in clean and efficient technological advances to enhance our 
unconventional fossil fuel supply in offshore regions where drilling is 
allowed and significant infrastructure already exists.
    The research funded by DOE leads to new technologies that improve 
the efficiency and productivity of the domestic energy industry. 
Continued research on fossil energy is critical to America's future and 
should be a key component of any national energy strategy. The societal 
benefits of fossil energy R&D extend to such areas as economic and 
national security, job creation, capital investment, and reduction of 
the trade deficit. The Nation will remain dependent on petroleum as its 
principal transportation fuel for the foreseeable future and natural 
gas is growing in importance. It is critical that domestic production 
not be allowed to prematurely decline at a time when tremendous 
advances are being made in improving the technology with which these 
resources are extracted. The recent spike in oil and natural gas prices 
is a reminder of the need to retain a vibrant domestic industry in the 
face of uncertain sources overseas. Technological advances are 
necessary to maintaining our resource base and ensuring this country's 
future energy security.
                         doe office of science
    The DOE Office of Science is the single largest supporter of basic 
research in the physical sciences in the United States, providing more 
than 40 percent of total funding for this vital area of national 
importance. The Office of Science manages fundamental research programs 
in basic energy sciences, biological and environmental sciences, and 
computational science and, under the President's budget request, would 
grow by 7 percent from about $4.1 billion last year to $4.4 billion. 
AGI asks that you support this much needed increase.
    Within the Office of Science, the Basic Energy Sciences (BES) 
program supports fundamental research in focused areas of the natural 
sciences in order to expand the scientific foundations for new and 
improved energy technologies and for understanding and mitigating the 
environmental impacts of energy use. BES also discovers knowledge and 
develops tools to strengthen national security.
    The Basic Energy Sciences (BES) would remain the largest program in 
the office with an increase of 5.5 percent from $1.420 billion in 
fiscal year 2007 to $1.498 billion in fiscal year 2008 in the 
President's request. Within the BES, Chemical Sciences, Geosciences and 
Biosciences would receive a $15.4 million increase over their fiscal 
year 2007 budget. AGI strongly supports the requested increases for 
these programs.
               doe energy efficiency and renewable energy
    Within DOE Energy Efficiency and Renewable Energy, the President's 
fiscal year 2008 budget request would not support any R&D in geothermal 
technology. AGI asks that the subcommittee consider supporting 
geothermal R&D at the fiscal year 2006 level of $23 million.
                                 ______
                                 
           Prepared Statement of the Alliance to Save Energy
    The Alliance to Save Energy (the Alliance) is a bipartisan, 
nonprofit coalition of business, government, environmental, and 
consumer leaders committed to promoting energy efficiency worldwide to 
achieve a healthier economy, a cleaner environment, and greater energy 
security. The Alliance, founded in 1977 by Senators Charles Percy and 
Hubert Humphrey, currently enjoys the leadership of Senator Mark Pryor 
as chairman; Duke Energy President and CEO James E. Rogers is the co-
chairman; and Representatives Ralph Hall, Zach Wamp and Ed Markey and 
Senators Jeff Bingaman, Susan Collins, Larry Craig and Byron Dorgan as 
its vice-chairs. More than 120 companies and organizations support the 
Alliance as Associates. The Alliance recommends increases of $41.3 
million for several existing energy-efficiency deployment programs, and 
$55 million for new programs in fiscal year 2008.
                               background
    Energy Efficiency--Our Greatest Resource.--Gasoline, natural gas, 
and electricity prices have all reached all-time highs in the last 
couple of years. These price increases cost American families and 
businesses over $300 billion each year. The President recognized energy 
security as a major issue in the State of the Union message. And many 
of the world's top scientists recently reaffirmed the urgent need to 
address global warming in a timely manner. Energy efficiency is the 
quickest, cheapest, and cleanest way to address the linked issues of 
energy prices, energy security, air pollution, and global warming. 
Energy efficiency already is the Nation's greatest energy resource--we 
now save more energy each year due to actions since 1973 to increase 
energy efficiency than we get from any single energy source, including 
oil. But much more can and needs to be done.
    A Record of Success.--DOE programs play a key role in developing 
the energy-efficiency resource through the research and development 
(R&D) of new energy-efficient technologies, and by helping to deploy 
these technologies. A 2001 National Research Council report found that 
every dollar invested in 17 DOE energy-efficiency R&D programs returned 
nearly $20 to the U.S. economy in the form of new products, new jobs, 
and energy cost savings to American homes and businesses. Environmental 
benefits were estimated to be of a similar magnitude.
    Efficiency-Related Budget Authorizations and Studies.--Several 
reports and legislative authorizations have supported major increases 
in funding for DOE energy efficiency programs. The Energy Policy Act of 
2005 (EPAct 2005) authorized $865 million for energy efficiency R&D in 
fiscal year 2007, more than $1 billion for deployment programs, and 
additional funds for hydrogen and fuel cells and for electric energy 
R&D. This follows calls for expanding energy efficiency research by the 
National Commission on Energy Policy, the President's Committee of 
Advisors on Science and Technology, the Energy Future Coalition, and 
the President's National Energy Policy Development Group.
    Summary of the President's Energy Efficiency Fiscal Year 2008 
Budget Request.--The President's overall fiscal year 2008 budget 
request for energy-efficiency programs within DOE's Office of Energy 
Efficiency and Renewable Energy is $515 million, down nearly $117 
million (18 percent) from the fiscal year 2006 appropriated level. This 
large cut follows a gradual slide from the $695 million that was 
appropriated for these programs in fiscal year 2002. Funding for these 
programs has decreased by one-third (37 percent) since 2002, after 
adjusting for inflation. In addition, the request for electricity R&D 
programs, many of which focus on efficiency, is $86 million, a decrease 
of $50.3 million (37 percent) from the fiscal year 2006 appropriated 
level. Several deployment programs, along with industrial R&D, have 
experienced some of the biggest funding cuts.
                        alliance recommendations
    In order to address the critical energy problems facing our Nation, 
the Alliance recommends funding DOE energy-efficiency programs in line 
with the EPAct 2005 authorized levels. Some specific funding requests 
are outlined below:
    It is important to maintain a broad portfolio of programs. The 
impact of DOE energy-efficiency programs has been multiplied by the 
combination of research to develop new technologies, voluntary 
deployment and market transformation programs to move them into the 
marketplace, and standards and codes to set minimum thresholds for 
using cost-effective technologies. And while the combination of 
programs has had tremendous impact, the government has often not been 
successful at picking winning technologies.
    Thus, it is important that the increases proposed in the 
administration's budget and those proposed below not be paid for 
through cuts to other highly-effective efficiency programs, which also 
address critical national energy needs. While the fuel cell and 
alternative fuels programs are important, they do not take the place of 
core programs that can have broader, more certain, and more near-term 
energy savings impacts. In particular, the Alliance opposes repeated 
cuts that threaten the viability of Industrial Technologies research 
programs and the dramatic proposed cuts to the distributed energy R&D 
program and the Weatherization Assistance Program.
Key Existing Deployment Programs (Office of Energy Efficiency and 
        Renewable Energy)
    Building Energy Codes (Building Technologies).--While residential 
and commercial building codes are implemented at the State level, 
States rely on DOE for technical specifications, training, and 
implementation assistance. The Alliance estimates that building energy 
codes could save 7.2 quads of energy by 2025. The new 2006 IECC model 
residential code includes measures to simplify the code and ease 
implementation, and thus presents exciting opportunities to increase 
code adoption and compliance. Yet the administration has proposed 
cutting funding for building codes by one-third.
    EPAct 2005 (sec. 128) authorized $25 million per year for building 
codes, including $10 million for a new program to help States improve 
compliance with their codes. Several studies have found poor rates of 
compliance with building codes, causing unnecessary energy waste. This 
new program would assist states that have adopted up-to-date building 
codes to implement a plan to achieve 90 percent compliance through 
better training, enforcement, or other measures. Thus the Alliance 
recommends a $19.4 million increase above the fiscal year 2006 
appropriated level, for a total of $25 million.
    Federal Energy Management Program.--This program helped cut Federal 
building energy use by 24 percent from 1985-2001--a reduction that now 
saves Federal taxpayers roughly $1 billion each year in reduced energy 
costs. But funding has steadily decreased for this program, even though 
large savings remain untapped. EPAct 2005 and Executive Order 13423, in 
addition to setting aggressive new Federal energy saving targets, 
require DOE to implement rules, guidelines, and reports on the targets, 
Federal building standards, Federal procurement, and metering. A needed 
funding increase for this program will actually save taxpayers money in 
lower Federal energy bills. The Alliance recommends a $5 million 
increase above the fiscal year 2006 level, for a total funding level of 
$24 million.
    Equipment Standards and Analysis (Building Technologies).--
Appliance energy efficiency standards (e.g. for refrigerators) have 
already reduced U.S. electricity use by an estimated 2.5 percent and 
reduced peak power demand by the output of 70 power plants, at minimal 
cost to the Federal Government, and saving consumers billions of 
dollars in their energy bills. But the program is years behind on 
issuing standards for close to 20 products. EPAct 2005 requires 
additional rulemakings. DOE has issued an ambitious plan to catch up, 
and has requested a $3.5 million increase to do so. But a new GAO 
report says that is not enough to meet a 600 percent increase in 
workload, and some of the most important standards are not even in the 
plan. The Alliance recommends a $10 million increase over the fiscal 
year 2006 level for total funding of $20.2 million.
New Deployment Programs (see also Building Energy Codes above)
    Energy Efficiency Pilot Program (Office of Electricity Delivery and 
Energy Reliability).--State and utility energy-efficiency programs have 
been remarkably successful at reducing electricity demand, strain on 
the grid, and the need for costly new power plants. However, they have 
been starved for funds due to electric utility restructuring. A few 
states are experimenting with innovative performance-based policies to 
prioritize efficiency resources before increasing energy supplies. 
EPAct 2005 (sec. 140) authorized $5 million per year for a new program 
to provide funding to several States to assist in the design and 
implementation of energy-efficiency resource programs that will lower 
electricity and natural gas use by at least 0.75 percent a year. The 
Alliance recommends $5 million for this new program.
    Zero Energy Commercial Buildings Initiative (Building 
Technologies).--Buildings are a major part of the problem and solution 
of high natural gas and electricity use and climate change. The 
buildings sector in the United States accounts for about 40 percent of 
total energy consumption and 40 percent of carbon dioxide emissions, 
and about half of that is from commercial buildings. There is a growing 
consensus on the need and opportunity for aggressive action to 
dramatically improve building energy efficiency; the American Institute 
of Architects (AIA) has called for reducing fossil fuel use in new and 
renovated buildings by 50 percent by 2010 and eventually by 100 
percent. DOE has a zero energy homes program, but achieving this goal 
for the many kinds of commercial buildings is even more difficult and 
more complicated. A large concerted multi-year initiative is critical 
to achieve these deep savings throughout the commercial sector.
    The Alliance, along with the AIA, American Society of Heating 
Refrigerating and Air-conditioning Engineers, Lawrence Berkeley 
National Laboratory, U.S. Green Building Council, and World Business 
Council for Sustainable Development, are the founding sponsors of an 
initiative for zero-energy commercial buildings by 2030. This public-
private collaboration will combine better tracking of real energy 
performance, demonstrations of replicable solution packages for 
different building types, strategic research, and a market 
transformation plan. The Alliance recommends $20 million for this new 
program in fiscal year 2008, to add to and complement the existing 
funding request for commercial buildings R&D.
    Energy Efficiency Public Information Initiative (Program 
Support).--The quickest way to reduce energy demand and bring high 
energy prices down is through consumer education. EPAct 2005 (sec. 134) 
authorizes $90 million per year for a public education program to 
provide consumers the information and encouragement necessary to reduce 
energy use. Such programs have a proven track record of success, as in 
the 2001 ``Flex Your Power'' campaign in California, which 
significantly reduced consumer electricity demand and assisted in 
avoiding further blackouts. DOE has contributed small amounts of 
funding to effective education campaigns, but much more is needed. The 
Alliance recommends $30 million for this new program in fiscal year 
2008.
Additional Priorities
    Industrial Best Practices (Industrial Technologies--
Crosscutting).--One of the most effective DOE industrial programs 
conducts plant-wide energy assessments, develops diagnostic software, 
conducts training, develops technical references, and demonstrates 
success stories. Oak Ridge National Laboratory reports that DOE-ITP's 
Best Practices outreach saved 82 trillion Btu in 2002, worth $492 
million. The Alliance recommends a $3 million increase for Best 
Practices, for total funding of $10.9 million.
    Energy Star (Building Technologies).--Energy Star is the most 
successful voluntary, public-private deployment program at EPA and DOE, 
making it easy for consumers to find and buy numerous energy-efficient 
products. And it functions on a very small budget. Every Federal dollar 
spent on the Energy Star program results in an average savings of more 
than $75 in consumer energy bills and a reduction of about 3.7 tons of 
carbon dioxide emissions. With additional funding, the Energy Star 
program could update its criteria, expand the program to other areas 
and add more product categories. The Alliance recommends a $2 million 
increase over the fiscal year 2006 appropriated level for total funding 
of $7.9 million.
    Building Technologies R&D.--Of all the DOE energy-efficiency 
programs, Building Technologies continues to yield perhaps the greatest 
energy savings. The 2001 National Research Council study found that 
just three small R&D programs--in electronic ballasts for fluorescent 
lamps, refrigerator compressors, and ``low-e'' glass for windows--have 
already achieved cost savings totaling $30 billion, at a total Federal 
cost of only about $12 million. Buildings R&D should be a priority for 
funding increases, especially in the areas of Windows and Insulation 
and Materials R&D.
    Energy Information Administration (EIA) Energy Consumption 
Surveys.--EIA's Energy Consumption Surveys provide unique and 
invaluable data to policy makers, industry, and researchers. The 
Alliance recommends an increase of $1.9 million, for total funding of 
$5.5 million, in order to reinstate the residential transportation 
survey, last conducted in 1994, and to conduct the Residential, 
Manufacturing, and Commercial Buildings Energy Consumption Surveys 
(RECS, MECS, and CBECS) every 3 years, as required by the Energy Policy 
Act of 1992, instead of the current 4-year schedule.
                                 ______
                                 
        Prepared Statement of Western Michigan University (WMU)
    R&D activities administered through DOE's Fossil Energy programs 
play a vital role to discover, develop and produce a significant 
portion of the Nation's domestic natural energy needs.
    Western Michigan University (WMU) provides invaluable research to 
develop new technologies for improved exploration and production of 
hydrocarbons in an environmentally responsible manner. WMU also 
disseminates this information through workshops to Michigan's small 
independent oil companies that cannot develop such technologies on 
their own.
    Most of the oil companies in Michigan consist of a few employees, 
often referred to as ``Mom and Pop'' independent producers. In the 
Midwest, there are thousands of such companies that produce many tens 
of millions of barrels of oil and equivalent natural gas a year.
    Ten years ago, in a consortium with private industry, with funding 
by DOE, WMU developed and proved a new drilling technology to recover 
oil from abandoned fields. Subsequent application of this technology 
has produced more than 20 million barrels of oil and more than 500 
billion cubic feet of natural gas in Michigan. We are now studying the 
origins and evolution of some of Michigan's major oil and gas 
reservoirs and using newly developed computer-based 3D models for 
predicting their distribution. This will create the ability to produce 
energy more efficiently, in larger quantities, and with less drilling. 
WMU is one of a limited number of universities nationwide capable of 
this type of research.
    WMU has presented its research results and techniques to several 
thousand participants at interactive workshops for industry and 
government. And WMU has an increasing enrollment of undergraduate and 
graduate students who are being trained to meet an urgent need for 
geoscientists.
    WMU's website, which receives more than 6,000 hits per month, 
connects producers, the research community and support services 
industries that produce hydrocarbons.
    This program would not be possible without DOE funding.
    WMU is nearing the final year in our current multi-year research 
program. To cut off funding now, as we are just coming to fruition with 
new results and technologies would be such a loss of taxpayers' money 
already invested.
    There are those who ask why tax dollars should support oil and gas 
research and programs such as ours at WMU. My response is that these 
are vital to the Nation's security and to the domestic economy. This 
research can improve the domestic supply of oil and gas, which in turn 
will drive down the price. When constituents of each member of Congress 
ask what the government is doing about the current high price of oil, 
one logical response is to say that they support efforts that will 
improve the domestic supply through R&D funds.
    Eighty-five percent of DOE's R&D programs are tailored to the 
exploration and development activities of the independent producer. 
These small companies drill 90 percent of the Nation's oil wells and 
they produce 85 percent of the Nation's natural gas. For these 
companies, undertaking costly research activities is not a viable 
option. They must gain education and access to technology from outside 
their doors, a key function provided by WMU.
    There is another benefit to government-supported R&D that is rarely 
recognized--training urgently needed geoscientists. The research spawns 
Master's and Ph.D. students who will take critical roles in an industry 
that suffers from a shrinking population of professionals, particularly 
American professionals. Where will the domestic industry be in the 
future if skilled students do not enter the oil and gas industry? All 
aspects of these professional jobs require increasingly complex skills 
and abilities. Who will be the explorers and developers of oil and gas 
for the next generation?
    I urge you to reinstate full funding for the DOE Oil and Gas 
research program at WMU. This is desperately needed for the American 
economy and its security. We are increasingly dependent on foreign oil 
and gas to run our economy. When will our dependency on imports be too 
great? Sixty-five percent? We are there now! Seventy-five percent? 
Eighty-five percent? I think that such high levels make us very 
vulnerable to supply interruptions, huge price spikes, and an unstable 
economy.
                                 ______
                                 
     Prepared Statement of the American Forest & Paper Association
    The Agenda 2020 Technology Alliance, a Special Project of the 
American Forest & Paper Association (AF&PA) welcomes this opportunity 
to provide the committee with its views on our industry's key public-
private partnerships within the Office of Energy Efficiency and 
Renewable Energy (EERE) and to urge increased funding to adequately 
address industry's challenges in fiscal year 2008. The Industrial 
Technologies Program (ITP) and the Office of Biomass Programs (OBP) 
provide vital funding for research, development, and demonstration 
(RD&D) of technologies that dramatically reduce the forest products 
industry's energy intensity and transforms our industry into producers 
of carbon-neutral biofuels--thus addressing strategic national needs 
associated with energy efficiency, energy security, diversified energy 
supply, and environmental performance. We recommend industry specific 
funding of $6 million for forest products industry in ITP. We support 
the President's request for $179 million for Biomass and Biorefinery 
Systems R&D in OBP and ask that the Committee work to ensure 
eligibility of forest biorefineries in these programs and keep the 
appropriations unencumbered to allow for full funding of competitive 
biomass systems and biorefinery RD&D grants. Furthermore, we recommend 
that the Committee restore OBP Platforms Research and Development 
funding of $10 million for competitive R&D for black liquor 
gasification, a key enabling technology of the forest biorefinery.
    The Agenda 2020 Technology Alliance is an industry-led partnership 
with government and academia that holds the promise of reinventing the 
forest products industry through innovation in processes, materials and 
markets. The collaborative, pre-competitive research, development, and 
deployment supported through Agenda 2020 provide the foundation for new 
technology-driven business models that will enable our industry to meet 
competitive challenges, while also contributing solutions to strategic 
national needs. The technology solutions developed through Agenda 2020 
are aligned to provide solutions to the competitive challenges faced by 
the U.S. forest products industry, which accounts for approximately 6 
percent of the total U.S. manufacturing output, employs more than a 
million people, and ranks among the top 10 manufacturing employers in 
42 States with an estimated payroll exceeding $50 billion.
    As is the case with many U.S. manufacturing industries, we face 
serious domestic and international challenges. Since early 1997, 136 
pulp and paper mills have closed in the United States, contributing to 
a loss of 84,000 jobs, or 39 percent of our workforce. An additional 
60,000 jobs have been lost in the wood products industry since 1997. 
New capacity growth is now taking place in other countries, where 
forestry, labor, and environmental practices may not be as responsible 
as those in the United States. Several drivers have heightened the need 
to develop new energy efficiency technologies: the recent volatility of 
energy markets, especially for natural gas; renewed national focus on 
climate change and environmental performance; and aging process 
infrastructure. Global competition, coupled with massive industry 
restructuring due to financial performance pressures from Wall Street, 
continue to hinder the ability of U.S. companies to make new 
investments. Each year without new investments, new technologies and 
new revenue streams, we lose ground to our overseas competitors.
    Currently, energy is the third largest manufacturing cost for the 
forest and paper industry at 18 percent for pulp and paper mills--up 
from 12 percent just 3 years ago. For some of our mills, the cost of 
energy is about to eclipse employee compensation.
    Since 1994, the forest products industry has been one of DOE's 
``Industries of the Future,'' partnering with ITP through the Agenda 
2020 Technology Alliance in RD&D that has yielded successful advances 
towards our national energy and environmental goals. Agenda 2020 stands 
as an example of successful industry-government collaboration to 
develop technologies that hold the promise of reinventing industry, 
while providing real solutions for strategic national energy needs. 
Every Federal dollar spent on ITP saves $7.06 in annual energy costs 
and 1.3 million in annual source BTUs (2004 estimates). As recently as 
2003, the ITP/Agenda 2020 portfolio included a total shared DOE and 
industry investment of almost $48 million, with nearly 55 percent 
coming from direct project cost shares by industry.
    Today, after several years of continuous and substantial cuts, the 
ITP/Agenda 2020 budget has been reduced by over 83 percent since fiscal 
year 2002. This undermines our progress in achieving crucial energy 
efficiencies at a time when energy and response to climate change are 
major factors in the survival of the U.S. forest products industry. 
Projects rescoped or cut in recent years due to budget shortfalls 
resulted in a lost energy savings potential of 5 trillion BTUs/yr. 
Recent reductions make us unable to pursue projects in key priority 
areas such as advanced water removal and high efficiency pulping, which 
represents a lost savings potential of 100-200 trillion BTUs/yr. In 
fiscal year 2008, a further funding reduction is proposed and emphasis 
shifted from industry specific funding. Unfortunately, the type of 
technologies that cross all industries are not those from which we can 
achieve the maximum savings for energy and environmental emissions. 
Furthermore, the proposed funding of $1.752 million, is barely 
sufficient to fund ongoing projects, let alone address the high 
priority R&D needs specific to the forest products industry that have 
been jointly identified by industry with the DOE.
    This comes at a crucial time when the forest products industry, 
like many energy-intensive industries, is facing unprecedented 
pressures due to the rising costs of energy and potential climate 
change mandates. Although we are nearly 60 percent self-sufficient 
(using biomass), it is imperative that we seek solutions as diverse as 
fuel switching, finding new energy sources, and options for reducing 
energy consumption. Thus we are in greater need than ever for the 
technology-based energy efficiency solutions that could be provided 
through our Agenda 2020 partnership with ITP. AF&PA's recommended ITP 
funding for forest products research ($6 million) would help our 
industry partially recover its capacity to develop and deploy vital 
energy efficiency technologies. Restoring Agenda 2020 funding to pre-
fiscal year 2005 levels will not only help the competitive position of 
American industry, but will also serve national strategic goals for 
reduced dependence on foreign oil.
    The Integrated Forest Products Biorefinery (IFPB) is a key Agenda 
2020 technology platform and a top technical and economic priority for 
our industry. The objective is to develop and deploy core technologies 
that can be integrated into existing processing infrastructure, which 
would be transformed into geographically distributed production centers 
of renewable ``green'' bioenergy and bioproducts. This can be done 
while co-producing existing product lines, creating higher skilled and 
better paying jobs, strengthening rural communities, and opening new 
domestic and international markets for U.S. forest products companies.
    The IFBP technology has the potential to integrate agricultural 
wastes, agricultural producers, forest landowners, agricultural 
landowners, forest product producers, and the petrochemical industry to 
produce clean renewable bio-fuels to support our local economies and 
the Nation. Widespread application of this technology would not only 
reduce environmental impact of burning fossil fuels, it would also 
increase the viability of agricultural, forest products, and other 
industries that use waste heat. It will create new high paying jobs, 
both direct and indirect, increasing tax revenue. From an energy 
perspective, the IFPB has the benefit of making the forest products 
industry even more energy self-sufficient, serving the DOE strategic 
goal of reduced energy intensity in industry by reducing fossil energy 
consumption. In addition, the IFPB would permit the industry to become 
a producer of renewable, carbon-positive bioenergy and biofuels, 
contributing to DOE strategic goals to dramatically reduce dependence 
on foreign oil and to create new domestic bioindustry.
    AF&PA supports the President's announced $179 million budget 
initiative in fiscal year 2007 for biorefinery research and 
demonstration.--This initiative provides much needed funding to advance 
core enabling IFPB technologies, as well as providing major capital 
cost-share for commercial scale biorefinery demonstration. The forest 
products industry is an ideal partner to develop and commercialize 
integrated biorefineries. We have much of the infrastructure and 
expertise--wood harvesting, transportation and storage, manufacturing 
and conversion infrastructure, waste handling and recovery--needed to 
achieve the goals of integrated biorefineries. By and large, they are 
located in rural communities where they can help realize important 
synergies between agricultural and forest-based feedstocks. Recent 
estimates from Princeton University show significant potential for net 
environmental benefits of IFPBs, inclusive of offsetting other fossil 
fuel consumption in the mill. The industry-wide potential is to reduce 
nearly 100 million tons of carbon emissions annually from IFPBs. The 
study also estimates the cumulative value of savings due to reduced 
CO2, SO2, and NOX emissions is $6 
million to $40 billion.
    However, private/public investments in RD&D are critical to bring 
IFPB technologies into full commercial use. Co-investment for RD&D can 
help mitigate the technical risks (especially integration with capital-
intensive, legacy infrastructure) of early adopters of emerging IFPB 
technologies. Risk mitigation is an important factor in achieving the 
benefits of IFPBs, especially for integrating biorefinery technologies 
with existing manufacturing infrastructure. Federal support through 
research funding and other investments, such as loan guarantees and tax 
credits, is critical.
    In order to achieve the promise of IFPB technologies for the 
industry and for the Nation, we need greater stability and availability 
of funds provided through the OBP budget. We urge the committee to 
preserve the proposed $179 million funding of Biomass and Biorefinery 
Systems R&D, so that there will be sufficient appropriations to fund 
biorefinery demonstration and commercialization projects. We also urge 
the committee to ensure that forest-based materials are eligible for 
this and future biorefinery research and demonstration funding. Forest-
based materials can sustainably produce enough biofuels to displace up 
to 10 percent of the country's petroleum production. They are a vital 
feedstock for achieving reduced dependence on foreign oil and 
facilitating bioindustries domestically and should be included in 
programs for biomass and biorefinery RD&D.
    A core enabling technology for part of the IFPB is black liquor 
gasification (BLG), which converts the by-product of the chemical 
pulping process into a synthetic gas. The synthetic gas can 
subsequently be burned to directly produce clean, efficient energy, or 
converted to other fuels such as hydrogen, renewable transportation 
fuels, and/or other high value chemicals. If fully developed and 
commercialized, a biorefinery based on BLG can produce up to 10 billion 
gallons of other renewable transportation fuels, and as much as 20,000 
MW of biomass power.
    In fiscal year 2006, DOE eliminated funding for BLG and related 
research, despite recent technical progress to bring the technology to 
pre-commercial demonstration. BLG is a core enabling technology for the 
IFPB, and is identified as a priority technology area for biorefineries 
in technology roadmaps created by industry, as well as in research 
plans developed by OBP to accelerate biorefineries and development of 
national bioindustry. Critical research areas identified by OBP 
include: integrated biorefinery support for thermochemical 
biorefineries, products core R&D in chemicals and fuels from syngas; 
thermochemical platform core R&D in BLG and syngas cleanup. AF&PA is 
recommending that $10 million be restored in the OBP budget for 
competitive research in these critical areas and to complete BLG core 
research and projects that were eliminated in recent cuts. This funding 
will provide the groundwork needed for next vital steps leading to 
large-scale demonstration of biofuels and biochemicals production in 
association with the industry's dominant Kraft pulping process.
    We appreciate the committee's interest in ensuring sustained and 
adequate funding for RD&D partnerships and look forward to working with 
you to advance industry and national interests.
                                 ______
                                 
Prepared Statement of the Center for Advanced Separation Technologies, 
          Virginia Polytechnic Institute and State University
    Chairman Dorgan and Ranking Member Domenici of the subcommittee, I 
represent the Center for Advanced Separation Technologies (CAST), which 
is a consortium of seven leading U.S. mining schools. I appreciate the 
opportunity to submit this testimony requesting your committee to add 
$3 million to the 2008 Fossil Energy Research and Development budget, 
U.S. Department of Energy, for Advanced Separations research. Research 
in Advanced Separations Technology Development is authorized by the 
Energy Policy Act of 2005, title IX, subtitle F, section 962. I am 
joined in this statement by my colleagues from the consortium: Richard 
A. Bajura: West Virginia University; Peter H. Knudsen: Montana Tech of 
the University of Montana; Richard J. Sweigard: University of Kentucky; 
Jan D. Miller: University of Utah; Ibrahim H. Gundiler: New Mexico 
Tech; and Maurice C. Fuerstenau: University of Nevada-Reno.
    funding request for center for advanced separation technologies
    The Center for Advanced Separation Technologies (CAST) is a 
consortium of seven universities with expertise in separations science 
as applied to energy research. It was established in 2001 to develop 
advanced technologies that can be used to efficiently produce cleaner 
fuels in an environmentally acceptable manner and to study the basic 
sciences and engineering involved. The new technologies developed and 
the highly skilled personnel produced as a result of its research 
activities will help the United States develop its domestic energy 
resources and achieve energy independence.
    The United States faces an energy crisis created by an imbalance 
between domestic supply and demand. While the United States makes up 
only 4.6 percent of the world's population, it consumes 24 percent of 
the world's energy resources, 25 percent of oil, and 44 percent of 
motor gasoline, while its domestic energy production lags behind. As a 
result, the United States imported 30 percent of its energy needs in 
2005, which is expected to grow in the future. On the other hand, the 
United States has large amounts of untapped energy resources within its 
borders, which include 271 billion tons of recoverable coal, 2.6 
trillion barrels of oil in the form of oil shale, and 20 billion 
barrels of oil in oil sands. In addition, the United States has 200,000 
trillion cubic feet (Tcf) of methane (CH4) deposited in the form of 
hydrates in ocean floors and permafrost. The amount of energy deposited 
as methane hydrates alone far exceeds the amounts of all fossil energy 
resources combined. There is a dire need to exploit these untapped 
domestic energy resources by developing advanced separation 
technologies.
Organization
    The Center for Advanced Separation Technologies (CAST) was formed 
initially between Virginia Tech and West Virginia University with the 
objective of developing technologies that can help the U.S. coal 
industry produce cleaner solid fuels with maximum carbon recovery in 
environmentally acceptable ways. The scope of work was limited to 
studies on solid-solid and solid-liquid separation methods that are 
used in the coal industry. In 2002, five other universities listed 
above joined the consortium to develop crosscutting technologies that 
can also be used in a broader spectrum of the U.S. resources 
industries. Therefore, the scope of CAST research was expanded to 
include studies of chemical/biological separations and environmental 
control.
    By working together as a consortium, the center can take advantage 
of the diverse expertise available in its member universities and 
address the interests of different geographical regions of the country. 
Working together as a consortium is consistent with the recommendations 
of a recent National Research Council (NRC) report. It stated that 
``consortia are a preferred way of leveraging expertise and technical 
inputs to the mining sector,'' and recommended that DOE should support 
``academia, which helps to train technical people for the industry.''
Progress And Next Step
    At present, a total of 59 research projects are being carried out 
at the 7 CAST member universities. Of these, 20 projects are in solid-
solid separation, 5 in solid-liquid separation, 15 in chemical/
biological separation, 9 in modeling and control, and 10 in 
environmental control. These projects were selected by industry panels 
in accordance with the priorities set forth in the CAST Technology 
Roadmap, which was developed by an industry panel in 2002. Research 
results are presented at workshops to provide a forum to exchange 
ideas, create synergy, and interact with industry. The next workshop 
will be held during July 24-26, 2007, in Blacksburg, Virginia.
    Despite the high price of coal, many coal companies are losing 
significant amounts of their mined coal due to the lack of appropriate 
solid-solid and solid-liquid separation processes. In general, 
efficiencies of removing ash, sulfur and mercury from coal using these 
processes deteriorate sharply with decreasing particle size. As a 
result, many companies discard coal fines to impoundments. According to 
a National Research Council (NRC) report, the U.S. coal industry 
discards approximately 70 to 90 million tons of fine coal annually, 
which represents a significant loss of valuable national energy 
resource and at the same time creates serious environmental concerns. 
The NRC report was produced as a result of a congressionally directed 
investigation of a major impoundment failure that occurred on October 
11, 2000, in Martin County, Kentucky. The report recommended a study to 
identify technologies that can eliminate (or reduce) the need for 
slurry impoundments.
    There are more than 760 impoundments in the eastern United States, 
many of which are rated ``high risk.'' Companies have been recovering 
some of the fine coal from the waste impoundments by taking advantage 
of the section 29 Synfuels Tax Credit. However, this tax credit is due 
to expire in 2007; therefore, there is an impending need to develop 
advanced fine coal cleaning and dewatering technologies that can be 
used not only to recover the fine coal from impoundments without the 
benefit of a tax credit but also to eliminate the waste from the source 
so that there is no need to create future impoundments.
    For the reasons described above, CAST has been focusing on 
developing advanced fine coal cleaning and dewatering technologies. In 
one project, pilot-scale tests were conducted on the coal slurry from 
an impoundment (Pinnacle) in Pineville, West Virginia. Based on the 
successful test results obtained by CAST on the coal samples taken from 
the impoundment, Beard Technologies constructed a recovery plant in 
late 2006, and is currently in the process of shakedown testing. This 
is the first plant designed to recover practically all of the coal in a 
waste impoundment without the benefit of tax credit. If successful, the 
company plans to build additional plants using the advanced separation 
technologies developed by CAST. It is estimated that there are more 
than 2.5 billion tons of coal discarded in numerous impoundments in the 
United States.
    In another fine coal dewatering project, CAST is developing a 
hyperbaric centrifuge that can remove water from fine coal using a 
combination of air pressure and centrifugal force. Recently, a semi-
continuous bench-scale test unit has been designed and constructed. In 
a series of preliminary tests conducted on a coal sample finer than 
0.15 mm in size, moisture was reduced to less than 10 percent by 
weight, which is substantially lower than those obtainable using 
conventional methods. Decanter Machine Company in Johnson City, 
Tennessee, has acquired a license from CAST to market the new 
technology, and is planning to construct a large-scale prototype unit 
for onsite testing. There are several other dewatering research 
projects carried out at CAST, all of which are promising. These include 
a flocculant injection system, which is already in use in many coal 
cleaning plants, and a deep-cone thickener which is designed to 
increase the consistency of refuse materials (mainly clay) so that they 
can be disposed of without using impoundments.
    Traditionally, the western United States subbituminous coals are 
not cleaned before burning for power generation. However, depletion of 
higher quality reserves may soon force companies to remove impurities 
prior to shipping to eastern markets. Unfortunately, the water-based 
coal cleaning methods employed for cleaning eastern coal cannot be used 
for the western coal due to the lack of water. To address this problem, 
CAST researchers have been developing ways to clean western coal using 
a dry solid-solid separation method. A pilot-scale test conducted 
onsite showed that about one-quarter of the ash and one-third of the 
sulfur can be removed with high recoveries. Further, the dry cleaning 
process also removed more than 50 percent of the mercury originally 
present in the coal. It is anticipated that the technology will be 
commercialized in 2007.
    CAST has also developed metallic filters that can remove mercury 
from flue gas. The process has been tested successfully at an operating 
power plant in Colstrip, Montana, with over 90 percent removal 
efficiencies. The spent filter can be cleaned of the captured mercury 
and reused, while the mercury stripped off the filter can be stored 
permanently in stable forms.
    Many of the separation technologies developed by CAST can also be 
used to upgrade fertilizer minerals such as potash and phosphate. In 
2006, Mosaic Potash Carlsbad, Inc. implemented a new method of 
minimizing the harmful effect of clay in processing potash ores and 
increased recovery by 6 percent. An improvement such as this has 
allowed mining companies in New Mexico, which produce more than 70 
percent of potash in the United States, retain 600 high-paying jobs. At 
present, CAST is developing new methods of processing difficult potash 
ores. These new methods will make it possible to mine 50 million tons 
of langbeinite ores, which will greatly increase the life of the U.S. 
potash industry.
    The United States is the second largest copper producer in the 
world; however, much of the ores are of too low grade to be 
economically recovered using the conventional solid-solid separation 
methods such as flotation. Therefore, CAST has been developing an 
alternate method of extracting copper from low-grade ores using a 
chloride-based leaching, followed by direct electrowinning of dissolved 
copper. This could replace the traditional methods involving fine 
grinding, flotation, and smelting, which are energy intensive and, 
therefore, are not amenable for processing low-grade ores in western 
United States. The energy savings that can be realized by using this 
new method can be as high as 25 million Btu per metric ton of copper.
    In addition to the more practical projects described above, CAST 
has also conducted fundamental research. As an example, a mathematical 
model has been developed to describe froth flotation--the most widely 
used solid-solid separation process in both the coal and minerals 
industries. The model is based on first principles so that it has 
predictive and diagnostic capabilities. In another project, 
computational fluid dynamic (CFD) simulation techniques have been 
employed to design optimal flotation machines. This project is cost-
shared by Dorr-Oliver EIMCO, Salt Lake City, Utah, the world's largest 
coal and minerals processing equipment manufacturer. In still another 
project, the forces acting between two microscopic surfaces immersed in 
water have been measured using an atomic force microscope (AFM) and a 
surface force apparatus (SFA). The results showed that strong 
attractive forces are present between hydrophobic surfaces, the origin 
of which is not yet known. The new surface force, which is referred to 
as ``hydrophobic force'' plays an important role in processing energy 
minerals, such as coal, oil sands, oil shale, petroleum, and methane 
hydrates, that are naturally hydrophobic.
    Many of the separation processes being developed at CAST can be 
used for water clean up. For example, the flotation technique which was 
developed originally for separating one type of mineral from another is 
used to remove suspended solids from waste water streams. Furthermore, 
the basic scientific knowledge gained from the solid-liquid and 
biological separations research at CAST can be used to remove toxic 
elements present in waste water, mine effluents, and ground water. 
Water treatment research is of critical importance worldwide, 
particularly to the western United States which has been under drought 
conditions since 1999. A recent study showed that by 2050 untreated 
wastewater could reduce the supply of renewable water supply by one 
third.
                     funding request and rationale
    The United States is by far the largest mining country in the 
western world. In 2005, the industry produced $73.8 billion worth of 
raw materials, including $22.3 billion for coal, and $51.5 billion for 
minerals. Australia is a smaller mining country, but has five centers 
of excellence in advanced separations as applied to coal and minerals 
processing. In 2005, Australia established the Mineral Science Research 
Institute with a funding of $22.6 million for 5 years. In the United 
States, CAST is the only consortium serving the U.S. energy and 
minerals resources industry.
    CAST is developing a broad range of advanced separation 
technologies. Although it is a relatively new center, many of our 
research projects have yielded technologies that have already been 
deployed to industry. Many other promising projects are on-going and 
require financial support. Continued funding will allow CAST to develop 
advanced technologies that can be used to exploit the abundant national 
energy resources in a manner that is acceptable to the environment. For 
fiscal year 2008, CAST is requesting $3 million for its research 
activities.
                                 ______
                                 
    Prepared Statement of the Petroleum Technology Transfer Council
    Mr. Chairman and members of the subcommittee, on behalf of the 
Petroleum Technology Transfer Council (PTTC) and its partners 
throughout its domestic oil and natural gas industry network, I would 
like to express our concern if Federal funding for technology research 
and development is terminated.
    The administration has proposed to completely stop Department of 
Energy natural gas and oil R&D funding through the appropriations 
process and to rescind R&D funding previously authorized in the 2005 
Energy Policy Act (EPACT).
    PTTC strongly opposes this policy and believes it will be harmful 
over the near- and long-term. Among those that will be negatively 
impacted are:
  --The academic community where tomorrow's scientific professionals 
        gain valuable seasoning through participation in DOE-supported 
        projects in their graduate years;
  --The young and newly trained scientific professional which is 
        already entering the workforce at near low historic levels; and
  --The domestic petroleum supply, which is developed primarily by 
        independent producers that rely heavily on evolving 
        technologies to exploit mature and problematical petroleum 
        resources.
    The R&D Consortium created and funded through EPACT, which will be 
implemented by the Research Partnership to Secure Energy for America 
(RPSEA), enables focused research in areas critical to the U.S.'s 
energy future: deepwater offshore and unconventional resources. These 
needs should be addressed.
    Still, there are significant R&D gaps that the Consortium will not 
cover that must be supported through R&D funding through the 
appropriations process:
  --Enhanced oil recovery, particularly the interplay of CO2 
        flooding with carbon capture;
  --Field demonstration and technology transfer of newly developed 
        technologies in topic areas outside those addressed by EPACT; 
        and
  --Technology transfer for proven yet under-applied technologies.
    Rightly so, there is recognition that alternative energy sources 
are important to the U.S.'s energy future. It will take time for 
alternative energy R&D spending to lead to sound and significant 
sources of alternative fuels. The scientific professionals being 
seasoned in today's natural gas and oil R&D programs will more than 
likely be those participating in tomorrow's alternative energy 
research. The academic pipeline that provides those professionals 
cannot be stopped up by intermittent starts and stops of R&D funding. 
Our country deserves better.
  why the federal investment in research and development is important
    PTTC primarily serves the upstream domestic energy industry by 
facilitating the transfer of applied technology between technology 
developers and independent producers who are the driving forces in the 
domestic natural gas and oil exploration and production (E&P) industry. 
Independents drill 90 percent of the U.S.'s natural gas and oil wells, 
produce 82 percent of the natural gas and 68 percent of oil produced 
domestically. According to the Independent Petroleum Association of 
America (IPAA), independent producers have been recently investing 150 
percent of their domestic cash flow back into domestic oil and natural 
gas development. Much of that investment is for proven technology that 
is essential for developing the more difficult to recover 
unconventional resources that are a primary target of today's 
exploration effort.
    It's a reality that the ``easy'' natural gas and oil in the U.S. 
has already been developed. Those resources that remain--deep water, 
unconventional gas, enhanced oil recovery, even oil shale--are 
increasingly complex, requiring both more manpower and new 
technologies, not to mention a tremendous capital investment. Where 
will those new technologies come from?
    Major oil companies have scaled their R&D back, and what research 
they do fund is focused on larger international opportunities. The 
technology provider/service sector R&D dollars logically follow this 
high volume, high profit mark. Technologies that are developed have 
some application in mature U.S. producing basins, but they often need 
adaptation and resizing/simplification. And when they are developed, it 
is more costly for the service sector to connect with ``thousands'' of 
dispersed independents.
    Independents are the dominant players in the domestic industry and 
their human resources have reached critical low levels. The few who do 
have the capital and human resources--not already dedicated to drilling 
and production activities--typically do not have the technical 
experience or knowledge to effectively invest R&D dollars.
    Collaborative research, partially supported with Federal funding to 
keep it focused and broadly applicable, makes good economic sense. 
History is well documented to show that federally funded R&D has led to 
significant increases in domestic energy supplies. This research also 
seasons scientific professionals emerging from the academic pipeline, 
improving their productivity to successfully exploit natural gas and 
oil reserves and making America more competitive in global energy 
markets. This higher productivity leads to more natural gas and oil 
recovery, faster.
    In conclusion the Congress has a responsibility to the United 
States to take logical actions towards a secure energy future. One of 
those steps is continuing support for natural gas and oil R&D--to both, 
recover more domestic oil and natural gas and to feed the pipeline for 
future scientific professionals.
                                 ______
                                 
  Prepared Statement of the Interstate Oil and Gas Compact Commission
    Chairman Dorgan, Ranking Member Domenici and members of the 
subcommittee, thank you for the opportunity to submit testimony on the 
appropriation to the U.S. Department of Energy (DOE) and specifically 
the Office of Fossil Energy. My testimony represents the views of an 
organization of governors of 30 member States of the Interstate Oil and 
Gas Compact Commission (IOGCC). These States account for virtually all 
of the onshore domestic production of crude oil and natural gas.
    The States strongly and unequivocally support an appropriation to 
the Fossil Energy Research and Development ``Gas--Natural Gas 
Technologies'' and ``Petroleum--Oil Technology'' programs in an amount 
no less than that appropriated in fiscal year 2005 ($78.76 million), 
which was the budget year before the President's budget called for the 
complete elimination of funding for these vital functions. States 
strongly oppose the administration's fiscal year 2008 budget request 
that would terminate these programs, which would also effectively 
eliminate the DOE's Office of Oil and Natural Gas within the Office of 
Fossil Energy. This would be a colossal mistake for a variety of 
reasons, set out more fully below. Taxpayers are very supportive of 
Federal investments in energy security, and there is no better 
investment than in Research and Development (R&D).
    In spite of the fact that the country operates under a constant 
threat of another ``energy crisis,'' government is proposing to do less 
to ensure the Nation's resources are fully produced. The U.S. domestic 
oil industry today is the Nation's largest single supplier of crude 
oil, providing about 40 percent of the national demand for oil. The 
rest is imported--and the percentage of imports grows every year--
making us more and more vulnerable to international crises and foreign 
economic manipulation. Our dependence on others for our energy security 
has never been greater. However, domestic natural gas suppliers provide 
about 85 percent of all of the natural gas demand in the Nation, with 
most imports coming from Canada. The United States even exports natural 
gas and has an abundant supply.
    One thing we can count on, however, is that domestic supplies of 
crude oil and natural gas are our best hedge against this vulnerability 
and increasing import dependency. In addition to energy security, there 
are a myriad of other reasons why domestic production is preferable to 
imports:
  --Our domestic resources are produced under the world's most 
        effective environmental protections, which have been 
        established and are enforced primarily by the States.
  --Domestic resources create high-quality jobs here at home and 
        provide the energy that powers our standard of living. For 
        example, few realize that stripper oil wells (wells producing 
        less than 10 barrels per day) account for about one-quarter of 
        the lower 48 States' onshore domestic oil production and 
        stripper gas wells (wells producing 60 Mcf per day or less) 
        about 10 percent of onshore domestic gas production. This is a 
        critical natural resource and it should not be abandoned in 
        favor of imported energy.
  --Despite perceptions to the contrary, large quantities of oil and 
        natural gas remain onshore in the United States. These 
        resources represent the most stable and secure energy 
        available. These resources may exist in fields that have 
        already been discovered and await a new technology that results 
        in cost-effective recovery. Or they may lie in reservoirs yet 
        undiscovered due only to a lack of technology appropriate for 
        deeper horizons or greater geologic complexity. The bottom line 
        is vast reserves remain untapped. While recovery rates have 
        increased dramatically in the past 50 years and exciting new 
        tools have been developed for exploration, still more can be 
        done to reach the full production potential for reservoirs.
    The U.S. Department of Energy's Office of Oil and Natural Gas, 
which is funded by the programs set forth above, is the only place in 
the U.S. Government that is responsible exclusively for oil and natural 
gas policy. It is also the only place in the U.S. Government that fully 
understands and is thus able to represent within the administration the 
critical importance of domestic oil and natural gas to our country, our 
economy, and our national security. This resident expertise is a 
national asset--one that is especially important as other agencies 
embark on rulemaking and take other actions which impact our domestic 
oil and natural gas industry. Terminating this office and its programs, 
including its critical Research and Development programs, would be a 
tragic mistake. For these reasons the IOGCC and its member States 
strongly support the continued existence and viability of DOE's Fossil 
Energy Office of Oil and Natural Gas and an appropriation in fiscal 
year 2008 at least equal to the fiscal year 2005 appropriation.
    Turning to critical area of R&D specifically, many experts believe 
R&D is the most important factor in maximizing the availability and 
utilization of petroleum resources, especially domestic reserves.
    A recent report compiled by the IOGCC confirms the declining trend 
in R&D expenditures while the country is experiencing a corresponding 
increase in reliance on imports. Major oil companies once poured 
millions into research and development. Today, however, many large 
companies have shirted their focus overseas and offshore. Eighty five 
percent of the wells in the United States are drilled by independent 
oil and natural gas producers (producing roughly 40 percent of the 
domestic oil and 65 percent of the domestic natural gas). Such smaller 
independents lack both the resources and infrastructure for significant 
R&D and it is here where government--State and Federal--can fill an 
obvious void.
    The decline of Federal and private support for oil and gas research 
is well documented. The reasoning for cutting government support seems 
steeped in politics and a failure to understand the importance of 
Federal R&D to our domestic oil and gas industry and our energy 
security. However, this is a new era of uncertainty in our energy 
security that requires a fresh look at spending priorities.
    An IOGCC publication entitled ``Who Will Fund America's Energy 
Future?'' states that ``A strong domestic energy policy demands a 
strong R&D component. As the largest holder of domestic oil and gas 
resources, the Nation benefits from their production. Domestic 
production creates wealth for other royalty owners, contributes 
significantly to State, Federal and local economies and tax bases, 
offsets imports on a barrel-per-barrel basis, and cuts into trade 
deficits that are running at record levels.''
    If the United States is to maintain its ability to produce its 
domestic supplies of oil and natural gas, Federal expenditures on R&D 
must fill the leadership role left behind by private industry. Federal 
funding on oil and natural gas must increase if the United States is to 
maintain its ability to produce the domestic oil and natural gas 
resources our country so desperately needs. But instead the 
administration's budget for fiscal year 2008 eliminates oil and natural 
gas research.
    In fact, the proposed budget calls for cutting the petroleum 
technology R&D program at the very moment that our country could 
benefit the most from technology breakthroughs that can be applied to 
our own resources.
    Informed taxpayers support funding R&D to protect the environment 
and produce more energy--precisely the mission of DOE's oil and gas 
research program. Much promising work lies ahead including developing 
new methods of drilling that reduce impacts to the environment; 
inventing new materials that allow better, faster drilling; creating 
new chemicals and biological tools that increase production; 
identifying better uses of renewables in the production of fossil 
fuels; minimizing waste; and creating high quality jobs.
    There have been many success stories from the DOE oil and gas 
research program. One recent, striking example of how DOE makes a real 
contribution to advances in environmental protection, energy production 
and innovation comes from a DOE-IOGCC project in California. Under 
DOE's Preferred Upstream Management Practices (PUMP) program, the 
project is proving that unmarketable gas can be used on site to provide 
power to oil wells previously idle. At the same time, the project is 
meeting the strict air quality standards in the Los Angeles area. DOE 
funding for this project was matched 100 percent by other partners, 
which enabled the government to double its R&D investment. Every 
government program investment should be as effective.
    This is but one example of DOE helping provide leadership in 
demonstrating a technology that may have much broader implications for 
operators in 30 other oil and gas producing States who now won't have 
to reinvent the well in order to satisfy environmental restrictions and 
the urgent need for domestic energy.
    Through careful regulation, IOGCC member States have helped 
maximize production and minimize wasteful practices that can lead to 
the premature abandonment of reservoirs. States have also developed 
innovative approaches to deal with temporarily idled wells, created 
incentives that maximize production and supported R&D that improves 
recovery rates and lowers finding costs.
    Going forward, the IOGCC believes that a balanced and effective 
energy policy must encompass a number of fundamental principles, with 
R&D serving as a centerpiece in each. Other guiding principles include 
conservation of resources both in the producing and consuming sectors, 
encouraging domestic production to create economic growth and 
stability, increasing access to public lands for responsible 
development and prolonging production from wells at economic risk.
    We strongly encourage the subcommittee's support of funding oil and 
gas research and development as a positive step toward our national 
security today and our energy security in the future.
                                 ______
                                 
               Prepared Statement of Strand Energy, L.C.
    Dear Sirs or Madams: I am the project manager for a small DOE award 
(DE-FG26-00BC15254) granted to Strand Energy, L.C. (Strand) under the 
Technology Development with Independents program which is administered 
by the National Energy Technology Laboratory (NPTL). This $75,000 grant 
is for the optimization and implementation of an improved oil recovery 
project in a small oil field operated by Strand and located in 
southwest Arkansas, the St Mary Barker Sand Unit (SMWBSU).
    I am writing you to present testimony concerning the benefits of 
this award in fostering the development of technical skills for Strand 
Energy that are allowing us to add value to this domestic energy asset 
through local and regional job development and increased reserves that 
are benefiting the citizens of Arkansas through increased tax revenues 
and royalties. Specifically, the award has allowed Strand engineering 
and geological staff to develop a skill set in the science of reservoir 
modeling; computer characterization and simulation of reservoir 
processes. This is guiding Strand in our efforts to reduce development 
risk while increasing oil reserves for this property.
    Although less than $5,000 of the $75,000 award has been used to 
date it is expected the remainder of the award will be invested during 
2007 and early 2008 in new technologies for this active small domestic 
independent exploration, exploitation and production company operating 
in the southwestern U.S. and specifically in adding further value to 
the SMWBSU. Strand Energy and our Partners have invested to date in 
access of $600,000 in equipment and well workovers in the SMWBSU 
property to implement the improved oil recovery project.
    The DOE-NPTL grant program requires that technologies and practices 
developed as a result of the project award be published publicly to the 
domestic oil and gas independents community. This will further benefit 
development of our domestic energy resources through improved oil 
recovery projects implemented by other active operators as well as by 
Strand as we acquire additional mature oil properties for redevelopment 
through secondary and tertiary recovery processes and practices 
experienced successfully at the SMWBSU field.
    I hope, as well as do the professors and graduate students I have 
worked with on this project, that the DOE will be allowed to continue 
the administration and development of additional programs like the 
NPTL's Technology Development with Independents in the future.
                                 ______
                                 
      Prepared Statement of the Coal Utilization Research Council
    CURC submits this testimony in support of an increase of $288 
million in the fiscal year 2008 Department of Energy Fossil Energy 
budget request, as follows: $88 million for the Coal R&D program (for a 
total of $333.5 million); and $200 million for the CCPI program (for a 
total of $273 million). CURC supports the administration's request to 
fund FutureGen at $108 million. Details supporting these 
recommendations are discussed below.
                              introduction
    Coal is our country's most abundant, low cost source of fossil 
energy providing more than one-half of the electricity generated 
domestically and capable of supplying transportation fuels, chemical 
feedstocks, and pipeline quality synthetic natural gas. The challenge 
has been to sustain cost effective ways to use this abundant domestic 
energy resource in a manner that continues to provide low cost power 
and products for the American consumer while meeting environmental 
goals and national energy security needs. In large measure, technology 
is the means to these ends.
    More than three decades of experience has proven that any barriers 
to the use of coal can be overcome through the collaborative efforts of 
industry and government in jointly pursuing technology solutions. Now, 
global warming and concerns that the use of fossil fuels is an 
important factor in causing changes to the climate are a central focus 
of technology development. Equally important is the need for reliable, 
safe, and cost effective energy (and electricity) for the American 
consumer. These dual needs should be the focus of the Department of 
Energy's clean coal program.
    In light of the growing concerns over climate change and the need 
for reliable, domestically secure energy resources, it is vitally 
important that the DOE's technology research, development, 
demonstration and deployment programs, undertaken in partnership with 
the private sector, be robust and occupy a key spot on the national 
agenda. Unfortunately, even while there is acknowledgement over the 
importance of technology, there is not the corresponding commitment in 
dollars and focus. The DOE fiscal year 2008 budget request must be 
focused specifically upon the dual needs of energy security and 
achieving our Nation's environmental goals, and that budget must be 
dramatically increased if we are to succeed in developing technologies 
to address these needs.
                   the clean coal technology roadmap
    The CURC-EPRI Roadmap defines the steps necessary to achieve near 
zero emissions from coal use, including the cost effective capture and 
long-term storage of CO2. The Roadmap includes a technology 
development program for carbon management, defined as the capture and 
storage of carbon dioxide. The Roadmap targeted two approaches to 
carbon management: (1) higher efficiency; and (2) capture and storage 
of CO2 in geologic reservoirs. The goal of the Roadmap is to 
have, by 2025, new combustion and gasification based systems that can 
reduce emissions of traditional pollutants an order of magnitude beyond 
the performance of current technologies, capture and store 90 percent 
or more of the carbon in the coal, achieve improved efficiency over 
today's systems, and do all of these things while maintaining 
competitive low cost power generation. Our analysis suggests that the 
combined Federal and industry investment necessary to achieve the goals 
of the Roadmap is approximately $11 billion between now and 2025.
    When the Roadmap costs were first estimated, the cost of steel and 
other key power plant commodities had been relatively stable. In the 
last 2 years, these prices alone have risen by more than 50 percent and 
there is every likelihood that such prices will not lower. This means 
that the estimate of the Roadmap's projected cost to develop and 
demonstrate these improved technologies will likely increase 
dramatically as well. That analysis is underway, but was not completed 
in time for this written statement. At a minimum, demonstration 
programs will be most clearly impacted by these increased costs. 
Secondly, while much of technology development simply requires time to 
initiate and complete, it is also true that focusing efforts upon 
carbon capture and storage (CCS) technologies and augmenting funding in 
related areas will best insure the availability of such technologies in 
a timely fashion. Adequate funding for CCS technology development and 
demonstration is critical to addressing climate change; reduced funding 
levels that stretch out the time required to complete RD&D is not an 
option.
    The ``good news'' finding from the Roadmap is that there is a clear 
pathway to reach our technology performance goals for coal, and the 
ultimate technology products will be highly competitive if we conduct 
the needed RD&D. And industry stands ready to contribute its part, in 
money and intellectual resources, to the program of collaborative 
research. The ``bad news'' is that government funding, to date, has not 
been adequate and moreover, the fiscal year 2008 budget request is not 
sufficient. In sum, CURC believes that current funding for R&D is 
substantially inadequate, and funding for demonstrations is totally 
inadequate.
    Recognizing the fact that we are operating within a severely 
constrained budget, and Congress is intending to develop legislation to 
address global warming, CURC believes that funds provided for the 
entire DOE Clean Coal Program should focus primarily on those 
technology development programs that will enable both short- and long-
term CCS technology development and an extended near term program for 
mercury control technology. Activities that do not support these 
activities should be considered lower priority and only funded if 
additional funding is made available for those activities.
                            recommendations
    Using the roadmap as a tool to identify our Nation's coal research, 
development and development (RD&D) needs, CURC has examined the 
President's fiscal year 2008 budget request for coal and submits the 
following recommendations.
    Clean Coal Power Initiative (CCPI).--The funding proposed for the 
CCPI, $73 million in fiscal year 2008, is wholly inadequate to meet the 
needs that this program was created to address. This is DOE's only 
program that can support the demonstration of CO2 capture 
technologies that might be retrofitted to the existing fleet of coal 
fired power generation. Equally important, funding for this program 
will support demonstrations of CO2 capture and storage 
technologies integrated with advanced combustion and IGCC based 
systems. The CURC-EPRI Roadmap recommends approximately $5.6 billion in 
funding for these types of demonstrations through 2015. The President's 
request is clearly not enough to fund the scale and magnitude of the 
projects needed. CURC recommends that funding for CCPI in fiscal year 
2008 be increased by an additional $200 million. Combined with other 
resources currently available for the program, this should be 
sufficient to allow a 3rd CCPI solicitation for project proposals to be 
issued in calendar year 2007, with anticipated awards made in 2008. 
CURC also recommends that the next CCPI solicitation primarily focus on 
large scale, fully-integrated power generation and carbon capture and 
storage demonstrations.
    FutureGen.--The Roadmap recognizes the benefits to technology 
development that the FutureGen project can provide and CURC supports 
this important R&D program that can serve as a test bed for validating 
technologies developed out of the DOE's R&D program. To succeed as 
originally envisioned, basic R&D activities must continue to provide 
the technology components needed in FutureGen. The administration seeks 
to use previously appropriated funds to support FutureGen in fiscal 
year 2008, which CURC supports. The administration also seeks to 
rescind $149 million in prior year appropriations. CURC recommends that 
this $149 million be deferred for future use. The FutureGen Industrial 
Alliance has stated previously that FutureGen, CCPI and the coal R&D 
programs each must be adequately funded because all of these programs 
are necessary to support commercial deployment of advanced clean coal 
technologies. CURC also endorses this position.
    Coal R&D Program.--The coal R&D program should be focused on 
technology R&D designed to address efficiency improvements to reduce 
CO2 emissions and on alternative CO2 capture 
technologies that might provide long term technology options, one 
result of which would be to drive down the costs of carbon management. 
CURC has concluded that the basic R&D needs identified in the CURC-EPRI 
Roadmap cannot be met with the fiscal year 2008 budget request for the 
coal R&D programs. CURC recommends that funding in fiscal year 2008 be 
increased by $88 million, without funding for earmarks, and be directed 
to the coal R&D program as follows:
  --Innovations for Existing Plants (IEP).--Much progress has been made 
        in developing and deploying technologies to reduce emissions 
        from existing coal-fired power plants. However, there is a need 
        to focus additional attention on mercury emissions control. 
        Expert opinion concluded initially that controlling and 
        capturing mercury emitted from combusting bituminous coals 
        would be the least problematic, while the lower rank (western) 
        coals would be most challenging. With this focus, control 
        problems related to western coals have been solved, but 
        unexpected issues arose with bituminous coals and problems 
        remain in that area. It is imperative that funding for this 
        program be restored to $25 million in order to continue long-
        term (more than 30 day) mercury control field tests so that 
        industry can be equipped with the technologies necessary to 
        comply with the USEPA Clean Air Mercury Rule.
  --Carbon Sequestration.--CURC recommends an increase of $30 million 
        to support the front end of a multi-year carbon sequestration 
        RD&D program. CURC recommends that DOE expand the focus of the 
        program that is supporting novel approaches to capturing 
        CO2 from the existing fleet of coal plants as well 
        as pre- and post-combustion and oxy-coal combustion. CURC also 
        recommends that sufficient funds be made available to initiate 
        or complete the Phase II CO2 injection pilot-scale 
        tests in reservoirs other than oil/gas reservoirs, unless tests 
        in oil and gas reservoirs would add significant knowledge to 
        the monitoring, measurement and verification of injecting 
        CO2 into other reservoirs. It is very important that 
        these recommended additional funds support those projects that 
        advance the science of sequestration in reservoirs other than 
        oil/gas reservoirs, which is a commercial technology in use 
        today. Additionally, the DOE budget justification indicates 3 
        or 4 large scale CO2 injection demonstrations will 
        be initiated to validate carbon storage techniques through 
        Phase III of the regional partnerships. CURC supports the DOE 
        shift to Phase III, but recommends that DOE conduct numerous 
        large scale demonstrations in a variety of permanent storage 
        reservoirs other than applications for enhanced oil recovery, 
        which is a commercial activity. These demonstrations need to be 
        undertaken in multiple regions of the country with uniquely 
        different reservoir characteristics. Finally, every effort 
        should be made to couple Phase III demonstrations with coal-
        based energy projects that include CO2 capture (if 
        such CCS projects are undertaken then significantly more 
        funding for demonstrations will be required).
  --Advanced Turbines.--This program should be increased by $12 million 
        to insure that the development of the hydrogen turbine is not 
        delayed. The hydrogen turbine is an essential component of 
        FutureGen. It is also important that other advanced turbines 
        that will use synthesis gas derived from coal should be 
        supported, as well. In both instances, such turbines are 
        essential to increase plant efficiencies and reduce carbon 
        emissions. The primary objective of this program must be to 
        focus upon the development of large scale turbines needed to 
        support advanced generation coal power facilities. University 
        research programs to ensure long term technology development 
        are also important.
  --Advanced Research.--CURC recommends an additional $8 million for 
        ultra supercritical materials research activities. This 
        program, which has been under funded for the past 2 years, 
        supports the development of high temperature materials that 
        will enable boiler systems and steam turbines to become more 
        efficient, resulting in the reduction of power plant 
        CO2 emissions. Advanced materials derived from a 
        successful high temperature materials program will enable 
        efficiency gains which, in turn, will reduce CO2 
        emissions. Therefore, this program is very important for its 
        applicability to new ultra supercritical and IGCC systems.
  --IGCC.--CURC recommends an additional $5 million to continue 
        important ongoing R&D at the Power Systems Development Facility 
        and on alternative gasification based systems that are critical 
        to supporting both FutureGen and future gasification technology 
        needs.
  --Coal to Liquids.--CURC recommends an increase of $8 million to 
        focus on coal to liquids activities. Any funding increase 
        should be directed towards activities that will achieve the 
        dual goal of increased energy security and reduced 
        CO2 emissions from coal to liquids facilities.
    CURC is concerned that the practice of earmarking funds undermines 
the competitive nature and fundamental goals of the DOE clean coal 
program. Understanding that some earmarks may be consistent with the 
DOE program goals and those of the CURC-EPRI Roadmap, CURC believes 
that Congress and DOE should consider a set of principles to govern the 
earmark process. These principles would insure that the earmarks have 
been reviewed by Congress through hearings or through other measures to 
make certain they are consistent with the goals of the program and 
focus on the development of critical CCS technologies.
                               conclusion
    Continued long term use of coal, and realization of its benefits, 
will only occur if an extensive commitment to technology development 
allows coal to overcome environmental challenges. The fiscal year 2008 
budget request does not reflect such a commitment. Congress must 
support the development of FutureGen, and substantially increase 
funding for the R&D and CCPI programs with broad support for the 
development of both combustion- and gasification-based technologies, if 
we are to develop effective technology solutions to address climate 
change.
                                 ______
                                 
  Prepared Statement of the Electric Drive Transportation Association
    The Nation has come to understand that achieving real national 
security and addressing climate change will require a concerted effort 
to end America's oil dependence. The electric drive technologies being 
developed by the Department of Energy's Office of Energy Efficiency and 
Renewable Energy (EERE), in particular, the Vehicle Technologies and 
Hydrogen and Fuel Cell Technologies programs, are integral to the 
success of that effort. As you assemble the fiscal year 2008 Energy and 
Water Development budget, we respectfully request that you fund these 
programs at levels commensurate with their major contribution to ending 
our oil dependence.
    At the Electric Drive Transportation Association (EDTA), our 
mission is promotion of electric drive technologies, which reduce 
petroleum consumption and decrease emissions of greenhouse gases and of 
air pollutants. Using electricity, by itself or in conjunction with 
another fuel, electric drive technologies power the wheels of vehicles 
that are being used today throughout the transportation sector, 
including passenger vehicles, trucks, tractors, locomotives and ground 
support equipment. Electric drive also powers transportation 
infrastructure, such as truck refrigeration and truck stop 
electrification facilities, which allow idled trucks to power with 
clean, alternative electricity.
    Electric drive technologies also complement the national effort to 
increase the use of biofuels with their ability to use renewable fuels 
in hybrid applications and to use renewable power in exclusively 
electric operation.
    Multiple fuel and vehicle technologies, including hybrids, battery 
electric vehicles, fuel cell vehicles, and plug-in versions of these 
electric drive vehicles, need to be part of the national plan to end 
America's oil dependence. A substantial and consistent level of Federal 
support for research, development and deployment is essential to moving 
these technologies fully into the mainstream.
    EERE's Hydrogen and Fuel Cell Technologies Programs and the Vehicle 
Technologies Programs are the leading edge of the Federal effort to 
advance these technologies and to bring us closer to our energy goals. 
For instance, increased energy storage technologies, such as advanced 
batteries, are the foundation of the next wave of electric drive. They 
are the key to commercialization of plug-in electric drives and will 
accelerate advances in all electric drive vehicles. The 
administration's $41 million request for energy storage research and 
development is a step in the right direction. However, it is too small 
a step when considered against what is at stake and what can be 
achieved.
    For Fuel Cell and Hydrogen Technology Programs, the administration 
wisely maintains its overall commitment to hydrogen and fuel cell 
development, but the request falls short in two key areas. In the 
Technology Validation program, hydrogen infrastructure and fuel cell 
systems are certified under real world conditions. This work guides 
research agendas and helps establish the ``real world'' data collection 
necessary to develop fuel cell vehicles. However, DOE's allocation of 
fiscal year 2007 funds for this work is unclear at this time and the 
$30 million fiscal year 2008 program request is $3 million lower than 
the fiscal year 2006 appropriated level and nearly a third ($9.5 
million) lower than the 2007 request. We urge you to provide the 
appropriate guidance and ensure continuous and credible funding for the 
Technology Validation program's critical work.
    An additional tool in speeding commercialization of hydrogen fuel 
cells was created in the Title VII Federal procurement programs of 
EPAct05. The programs were designed to use the power of the Federal 
Government to promote increased overall fuel cell production and reduce 
costs by helping Federal agencies defray the incremental costs of 
purchasing hydrogen energy systems and fuel cell vehicles and 
equipment. Unfortunately, these market transition programs have not yet 
been funded and were not included in the administration's fiscal year 
2008 request.
    We ask you to implement the EPAct05 procurement programs with 
sufficient funds to maximize agencies' hydrogen and fuel cell purchases 
and leverage the Federal Government's purchasing power to increase and 
build the market for these clean, efficient energy systems.
    The Clean Cities program is another deployment program with a 
record of success. The Clean Cities program consists of voluntary local 
and regional coalitions working to build clean and efficient fleets, 
including schools, airports, and municipal buses, with advanced 
technology and alternative fuel vehicles. The program's ability to help 
more communities reduce petroleum consumption is limited only by lack 
of resources.
    The administration's $9.6 million request for the program is a 
welcome increase over the prior year's request, but still represents a 
missed opportunity for oil savings and clean technology deployment. We 
request that you provide technology- and fuel-neutral funds above the 
requested level to maximize the program's proven ability to reduce 
petroleum use and emissions while helping to commercialize new 
technologies, fuels and infrastructure.
    Other important demonstration and deployment efforts are advanced 
in the EPAct fleet programs. By requiring the use of alternative 
vehicles and fuels in Federal, State and utility fleets, the EPAct 
program requirements reduce petroleum consumption while helping to 
demonstrate and build markets for new technologies. Implementation of 
the EPAct05 alternative compliance waiver, which recognizes hybrid 
vehicles in compliance efforts for the first time, will also be part of 
the program's fiscal year 2008 responsibilities.
    The administration's request of $1.8 million will not support 
effective implementation of these key fleet programs. We request that 
you provide funding at a level that will allow the program to work as 
intended and to secure the oil savings, environmental benefits and new 
technology deployment that Congress intended.
    EDTA appreciates the committee's support for EERE's vehicle and 
hydrogen and fuel cell technology programs. We ask that you make the 
necessary investments to help transform the fuel consumption of the 
U.S. fleet with electric drive technologies and finally break our 
dependence on oil. Only then can we achieve real national security and 
a cleaner and more sustainable environment.
                                 ______
                                 
      Prepared Statement of the American Society for Microbiology
    The American Society for Microbiology (ASM) is pleased to submit 
the following testimony on the fiscal year 2008 appropriation for the 
Department of Energy (DOE) science programs. The ASM is the largest 
single life science organization with more than 42,000 members. The ASM 
mission is to enhance the science of microbiology, to gain a better 
understanding of life processes, and to promote the application of this 
knowledge for improved health and for economic and environmental well-
being.
    The DOE Office of Science supports research that drives discovery 
and innovation to create alternative energy sources, efficient energy 
production, and a sustainable environment. Increased resources for the 
DOE Office of Science are necessary to meet these challenges and the 
ASM supports the President's request of $4.398 billion for the DOE 
Office of Science, an increase of $602 million over the fiscal year 
2007 funding level.
    The requested increase is consistent with the American 
Competitiveness Initiative (ACI) and the Advanced Energy Initiative 
(AEI). DOE supported research on microbial biology is essential in 
meeting the goals of these initiatives. Microbial biology research is 
critical for advances in bioenergy. Microbial research contributions 
includes:
  --Novel bioenergy production methods, and improved biofuel production 
        by microbes. Different microbes produce a variety of energy 
        products such as ethanol, hydrogen, oils and even electrical 
        current. Discovery of new processes that use microbes and 
        microbes that enhance the efficiency of these processes, 
        genetic engineering microbes that achieve this goal and 
        learning to manage consortia of microbes to optimize biofuel 
        production are all needs that will enhance the economics of 
        bioenergy.
  --Discovery of novel plant cell wall decomposition enzymes. Microbes 
        have a tremendous diversity of undiscovered biochemical 
        capabilities, including enzymes that naturally recycle biomass. 
        Capturing this diversity for more efficient release of plant 
        carbon for conversion to energy is a central need for better 
        bioenergy processes.
  --Efficient, sustainable plant-soil systems for biofuel production. 
        Healthy, low-cost, and productive plant communities require a 
        supportive soil microbial community to recycle nutrients, 
        protect against root pathogens, produce plant growth factors, 
        fix nitrogen and aid soil structure. Furthermore, management of 
        these plant-soil systems must be done to minimize greenhouse 
        gas production.
    The ASM strongly encourages DOE to support a balanced research 
portfolio as it seeks to increase production of bioenergy sources. 
While the ASM recognizes that the AEI and ACI are critical for meeting 
the Nation's competitiveness and energy challenges, it also encourages 
the DOE to maintain support for other science and technology solutions 
to long-term environmental challenges, such as climate change and 
environmental remediation.
                 biological and environmental research
    Within the DOE Office of Science, the Biological and Environmental 
Research (BER) division uses peer-reviewed research at national 
laboratories, universities, and private institutions to build a 
science, technology, and knowledge base for understanding and 
harnessing the capabilities of microbial and plant systems that will 
lead to cost-effective, renewable energy production, greater energy 
security, clean-up of legacy wastes, and mitigation of increases in 
atmospheric carbon dioxide. The ASM supports the President's request to 
fund the BER at $510 million, an increase of $70 million over fiscal 
year 2007 for base BER programs, with $75 million directed to GTL 
Bioenergy Research Centers.
    BER research programs such as the Genomic: GTL program, 
Environmental Remediation Sciences Division (ERSD), the Joint Genome 
Institute (JGI), and Climate Change programs are instrumental for 
understanding microbial biology, how microorganisms interact with and 
respond to their environments, and how microorganisms can be harnessed 
to produce clean, efficient energy, remove excess carbon from the 
atmosphere, and help clean up the environment.
    The fiscal year 2008 request for BER would support about 1,500 
graduate students and post-doctoral investigators at universities and 
national laboratories. Fellowship programs are also supported by BER 
for undergraduate and graduate students through its Global Change 
Education Program. This support for undergraduate and graduate students 
and post-doctoral investigators is critical for the development of the 
next generation of scientists, engineers, and science educators.
                             genomics: gtl
    GTL research conducts explorations of microbes and plants at the 
molecular, cellular, and community levels. The goal is to gain insights 
about fundamental biological processes and, ultimately, a predictive 
understanding of how living systems operate. The resulting knowledge 
base--linked through DNA sequence and freely available--will catalyze 
the translation of science into new technologies for energy and 
environmental applications.
    Microbes make up the foundation of the biosphere and sustain all 
life on earth. DOE has sponsored the genome sequencing of key model 
plants and some 200 microbes relevant for generating clean energy, 
cleaning up toxic waste from nuclear weapons development, and cycling 
carbon from the atmosphere.
    In May 2006, the National Research Council of the National 
Academies of Science completed an independent review of the Genomics: 
GTL program that endorsed the systems biology approach of the program, 
applauded the research conducted by its grantees, and recommended the 
formation of interdisciplinary research centers focused on fundamental 
research addressing DOE mission needs, including bioenergy. The DOE 
embraced this recommendation, and is currently reviewing proposals for 
GTL Bioenergy Research Centers. The administration requested that $75 
million be provided in fiscal year 2008 for three of these centers. The 
ASM believes the GTL Bioenergy Research Centers are an important step 
forward to addressing national energy needs but they must be 
supplemented by a vigorous and well funded research effort. Funding for 
the GTL centers should not be at the expense of the core BER science 
programs.
              environmental remediation sciences division
    The Environmental Remediation Sciences Division (ERSD) sponsors and 
supports fundamental scientific research to understand the complex 
physical, chemical, and biological properties of contaminated sites for 
new solutions to environmental remediation. DOE is responsible for the 
largest, most complex, and diverse collection of environmental 
remediation challenges in the Nation.
    DOE's remediation challenges occur in the field where highly 
interactive natural processes, over a broad range of scales, control 
the fate and transport of contaminants. The ERSD goal is to help 
provide the basis for development of innovative remediation measures to 
support decision making critical to long-term stewardship. Of the 144 
sites where DOE has remediation, waste management, or nuclear materials 
and facility stabilization responsibilities, nearly 100 have soils, 
sediments, or groundwater contaminated with radionuclides, metals, or 
organic materials.
    The ASM is concerned with the steady decline in funding for the 
ERSD from fiscal year 2004 to fiscal year 2007. The ERSD research 
conducted on microbes is an essential component in developing 
effective, sustainable remediation technologies. ASM urges Congress to 
provide at least the President's fiscal year 2008 request of $97.4 
million for ERSD.
                         joint genome institute
    The DOE Joint Genome Institute (JGI) has completed the sequence of 
the 100 microbial genomes and released this information for the benefit 
of the global research community. The JGI is the primary source of 
genomic data for non-medical microbiology and immensely benefits the 
community.
    The JGI's Community Sequencing Program (CSP) devotes all of its 
sequencing capacity to the merit-reviewed sequencing needs of the 
broader non-medical scientific community, while addressing the DOE 
mission-relevant criteria of energy production, carbon sequestration, 
research and bioremediation research, and low dose radiation research. 
JGI is an integral component as the area of metagenomics for both 
energy and carbon sequestration grows.
    The ASM supports the President's fiscal year 2007 request of $62 
million for JGI, a $10.5 million increase over fiscal year 2006, and a 
$2 million increase over the President's fiscal year 2008 request.
                        climate change research
    The mission of the Climate Change Research subprogram is to provide 
the scientific base for making predictions and assessments of the 
potential effects of greenhouse gases and aerosol emissions on climate 
and the environment, such as abrupt climate change, understanding the 
global carbon cycle and the development of approaches for enhancing 
biological carbon sequestration in terrestrial ecosystems. The ASM 
supports the President's fiscal year 2008 request of $138 million for 
Climate Change Research.
    Research exploring the responses and behavior of microorganisms in 
ecosystems is necessary in understanding the changes in the expanded 
plant and animal systems. Greater collaboration with the Genomics: GTL 
program and climate change research would provide a stronger basis for 
understanding the core elements of the ecosystem and its responses. The 
ASM urges greater linkages between the GTL program and Climate Change 
Research, similar to the current collaborative relationship between GTL 
and the ERSD.
                         workforce development
    Cultivating a well-trained workforce of teachers and scientists is 
vital for maintaining our Nation's competitiveness, and meeting the 
challenges of the future. The ASM supports the President's request of 
$11 million for Workforce Development for Scientists and Engineers 
within the DOE Office of Science, through undergraduate research 
internships, graduate and faculty fellowships, and pre-college 
activities. These programs build links between the national 
laboratories and the science education community, provides mentor 
intensive research experiences at national laboratories for 
undergraduate and graduate students, and encourages middle and high 
school students in the fields of math and science.
                               conclusion
    The ASM supports the President's 16 percent increase for the DOE 
Office of Science in fiscal year 2008, and urges Congress to provide 
adequate funding for the BER, including ERSD, Genomics: GTL, JGI, and 
Climate Change Research programs, which are essential in meeting DOE's 
mission. The DOE Office of Science programs enhance U.S. 
competitiveness through fundamental research for advanced scientific 
breakthroughs that will revolutionize our approach to the Nation's 
energy and environment challenges.
    The ASM appreciates the opportunity to provide written testimony 
and would be pleased to assist the subcommittee as it considers the 
fiscal year 2008 appropriation for the DOE.
