[Senate Hearing 110-1131]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 110-1131
 
                  NATIONAL NANOTECHNOLOGY INITIATIVE:
                CHARTING THE COURSE FOR REAUTHORIZATION

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



                                HEARING

                               before the

          SUBCOMMITTEE ON SCIENCE, TECHNOLOGY, AND INNOVATION

                                 OF THE

                         COMMITTEE ON COMMERCE,

                      SCIENCE, AND TRANSPORTATION

                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 24, 2008

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation





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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                   DANIEL K. INOUYE, Hawaii, Chairman
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska, Vice Chairman
    Virginia                         JOHN McCAIN, Arizona
JOHN F. KERRY, Massachusetts         KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California            GORDON H. SMITH, Oregon
BILL NELSON, Florida                 JOHN ENSIGN, Nevada
MARIA CANTWELL, Washington           JOHN E. SUNUNU, New Hampshire
FRANK R. LAUTENBERG, New Jersey      JIM DeMINT, South Carolina
MARK PRYOR, Arkansas                 DAVID VITTER, Louisiana
THOMAS R. CARPER, Delaware           JOHN THUNE, South Dakota
CLAIRE McCASKILL, Missouri           ROGER F. WICKER, Mississippi
AMY KLOBUCHAR, Minnesota
   Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
Lila Harper Helms, Democratic Deputy Staff Director and Policy Director
   Christine D. Kurth, Republican Staff Director and General Counsel
                  Paul Nagle, Republican Chief Counsel
                                 ------                                

          SUBCOMMITTEE ON SCIENCE, TECHNOLOGY, AND INNOVATION

JOHN F. KERRY, Massachusetts,        JOHN ENSIGN, Nevada, Ranking
    Chairman                         JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West         KAY BAILEY HUTCHISON, Texas
    Virginia                         GORDON H. SMITH, Oregon
BYRON L. DORGAN, North Dakota        JOHN E. SUNUNU, New Hampshire
BARBARA BOXER, California            JIM DeMINT, South Carolina
MARIA CANTWELL, Washington           JOHN THUNE, South Dakota
MARK PRYOR, Arkansas
CLAIRE McCASKILL, Missouri
AMY KLOBUCHAR, Minnesota


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 24, 2008...................................     1
Statement of Senator Kerry.......................................     1
Statement of Senator Stevens.....................................     2
Statement of Senator Thune.......................................    33

                               Witnesses

Ferguson, Ph.D., P. Lee, Assistant Professor, Department of 
  Chemistry and Biochemistry, University of South Carolina.......    62
    Prepared statement...........................................    63
Goel, M.D., Ph.D., Anita, Founder, Chairman, and Scientific 
  Director, Nanobiosym, Inc. and Founder, Chairman, and CEO, 
  Nanobiosym Diagnostics, Inc....................................    69
    Prepared statement...........................................    72
Heath, Jim, Elizabeth W. Gilloon Professor and Professor of 
  Chemistry; Director, NanoSystems Biology Cancer Center, 
  California Institute of Technology.............................    76
    Prepared statement...........................................    78
Nordan, Matthew M., President, Lux Research, Inc.................    38
    Prepared statement...........................................    39
Rejeski, David, Director, Project on Emerging Nanotechnologies, 
  Woodrow Wilson International Center for Scholars...............    47
    Prepared statement...........................................    50
Robinson, Robert A., Managing Director, Natural Resources and 
  Environment, U.S. Government Accountability Office.............    18
    Prepared statement...........................................    20
Russell, Ambassador Richard M., Associate Director and Deputy 
  Director for Technology, Office of Science and Technology 
  Policy, Executive Office of the President......................     3
    Prepared statement...........................................     5


                  NATIONAL NANOTECHNOLOGY INITIATIVE:



                CHARTING THE COURSE FOR REAUTHORIZATION

                              ----------                              


                        THURSDAY, APRIL 24, 2008

                               U.S. Senate,
          Subcommittee on Science, Technology, and 
                                        Innovation,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:49 p.m. in 
room 253, Russell Senate Office Building, Hon. John Kerry, 
Chairman of the Subcommittee, presiding.

           OPENING STATEMENT OF HON. JOHN F. KERRY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Kerry. This hearing will come to order. Thank you 
all very much. I apologize for being a little bit late. I was 
voting on the tail end there. We thank our witnesses for their 
patience. We're going to try to roll right along here.
    This issue couldn't be more timely as we look forward to 
the next generation of nanotechnology breakthroughs. In the 8 
years since President Clinton first created the National 
Nanotechnology Initiative, it's really become clear that our 
ability to manipulate, engineer, and manufacture nanoparticles 
provides an unlimited potential for innovation and growth 
throughout the economy.
    In 2006, an estimated $50 billion in products worldwide 
incorporated some form of nanotechnology and that figure has 
been projected by some to reach about 2.6 trillion over the 
next 8 years. Scientists are using this technology to create 
advanced materials and systems that will obviously improve our 
way of life and also revolutionize the very concepts of size 
and scale.
    The nanotechnology revolution is occurring across all 
sectors. In Massachusetts, my friend Dr. Robert Linares started 
a company in his garage after discovering a way to use 
nanotechnology to turn carbon powder into diamonds. I have 
visited one of Dr. Linares's facilities and actually watched 
the team that has worked to build a diamond atom by atom. His 
company, Apollo Diamond, is currently working with the Defense 
Department to develop related technologies that will reduce 
collateral damage, protect soldiers and citizens, and improve 
the capabilities of our military aircraft.
    We also know that there's extraordinary potential for 
nanotechnology and life sciences and we'll hear later this 
afternoon from Dr. Goel who is CEO of Nanobiosym Diagnostics. 
Dr. Goel's company is creating portable nanotechnology-enabled 
devices that can rapidly and accurately provide patients with 
real-time access to medical diagnostic information. Even 
better, she's working to perfect this technology in Medford, 
Massachusetts, a little parochialism.
    As visionaries and innovators, such as Dr. Linares and Dr. 
Goel, work to harness this potential, the Federal Government 
does have a critical role to play. As we look toward 
reauthorizing the National Nanotechnology Initiative at the end 
of this Fiscal Year, there are issues and questions that have 
to be addressed so we can stay out in front of our global 
competitors, most of whom are betting big on nanotechnology 
right now.
    We also have a responsibility to make sure we're dedicating 
sufficient resources toward researching the environmental 
health and safety impacts of these particles.
    The Chairman of the Committee asked for a GAO report to 
assess just how much of a priority is being placed on EHS 
research across the 25 agencies that administer the National 
Nanotechnology Initiative. GAO's response is troubling.
    In 2006, just 3 percent of the $1.3 billion designated for 
the National Nanotechnology Initiative was used to further EHS 
research. Even that statistic is a little misleading because, 
according to the Controller General, the agencies are using a 
faulty reporting structure and are not receiving appropriate 
guidance for how to apportion funding across multiple topics.
    Funding for EHS research will be a top priority as we move 
forward with this reauthorization process. We need to ensure a 
well-coordinated, well-funded governmentwide approach to 
performing the research that will tell us whether these 
particles are safe to work around, whether they're safe for the 
environment, and whether they're safe for consumers once they 
reach the shelves.
    It's obviously critical to do that research upfront so 
we're not asking what went wrong a hundred years from now.
    I look forward to discussion with these panels and working 
with my colleagues on the Subcommittee, including Senator 
Pryor, with whom I chair the High-Tech Task Force, to draft a 
reauthorization proposal. I hope our discussion today will be 
instructive with respect to that.
    Senator Stevens?

                STATEMENT OF HON. TED STEVENS, 
                    U.S. SENATOR FROM ALASKA

    Senator Stevens. Well, thank you very much, Mr. Chairman. 
I'm delighted you're holding this hearing today on 
nanotechnology and the reauthorization of the National 
Nanotechnology Initiative.
    Nanotechnology is fascinating and revolutionary in many 
ways and it has the potential to change and improve our lives. 
I do think we all think about it from the golf course to the 
emergency room. Nanoscience is developing novel materials and 
devices and systems that open up new avenues of science and 
engineering and controlling matter at the size of 1,000ths of 
the diameter of the human hair creates really an interest in 
the public and everyone concerned with it. I think it is such 
an amazing new area, that it is, as I said, just plain 
fascinating to me.
    As this nanotechnology evolves, safety becomes the topic of 
great interest and I think there appears to be very little 
evidence so far that nanotechnology is creating any serious 
dangers to our Nation or is unsafe. On the contrary, I'm told 
medicine has used nanoparticles for at least 25 years in 
therapeutic medicines. Magnetic resonance imaging tests already 
employ nanotechnology and they've not revealed any demonstrable 
negative impacts on human health.
    So in the absence of that, I hope that Congress and the 
Federal Government will not, as policymakers or administrators, 
overestimate our role and we will conduct ourselves in the way 
to support the research and avoid imposing additional 
regulatory regimes on this developing field of science, unless 
we're convinced that additional regulations is really 
warranted.
    Mr. President--Mr. Chairman, I have to leave----
    Senator Kerry. I like Mr. President. It's OK.
    [Laughter.]
    Senator Kerry. Even if it's very fleeting.
    Senator Stevens. I had the privilege of being President of 
the Senate for 4 years, so I understand what you're saying.
    Chairman of the Committee, Senator Inouye and I have an 
appointment, however, with the Chairman of the Foreign Affairs 
Committee of the National Peoples Congress in China, very 
important meeting, so I'll have to leave soon.
    I want to give my apologies to my great friend Jim Heath 
who's here and look forward to seeing Jim. I hope he'll stop by 
the office before he leaves today.
    Thank you very much.
    Senator Kerry. Thanks so much, Senator Stevens, and thank 
you for your interest in this. We know that you have a huge 
ability to help make the right things happen on this. this. So 
we really appreciate your interest in it and participation.
    So Mr. Russell, thank you, Director, for being here. We 
appreciate that, and Mr. Robinson, why don't you guys lead off? 
If you can summarize your statements in about 5 minutes, your 
full statements will be placed in the record as if read in 
full, so don't fear that anything will be left out of the 
record, and we'll have a little more chance to explore it with 
the panels.
    Thank you.

          STATEMENT OF AMBASSADOR RICHARD M. RUSSELL,

           ASSOCIATE DIRECTOR AND DEPUTY DIRECTOR FOR

          TECHNOLOGY, OFFICE OF SCIENCE AND TECHNOLOGY

           POLICY, EXECUTIVE OFFICE OF THE PRESIDENT

    Mr. Russell. Terrific. Thank you, Chairman Kerry and Vice 
Chairman Stevens, and when the rest of the members of the 
Subcommittee come, thank them as well.
    I'm very pleased to appear here before you to discuss the 
National Nanotechnology Initiative and issues associated with 
its upcoming reauthorization.
    First of all, I'd like to thank the Committee on behalf of 
the Administration and the NNI for its bipartisan support of 
nanotechnology research. NNI is truly an example of the 
successful bipartisan effort to promote one of the most 
important areas of science and technology currently being 
sponsored by the Federal Government.
    The NNI was first established during the last year of the 
Clinton Administration. With the support of Congress and the 
Bush Administration, the program has more than tripled in 
scale, a permanent coordinating office has been established and 
authorizing legislation passed and signed into law. The 
Committee deserves great credit for its longstanding support of 
the program.
    I have submitted detailed written testimony which I will 
summarize.
    NNI is built on the voluntary association of 25 Federal 
agencies that have activities and interests related to 
nanoscale science and technology. The Administration believes 
the organization, structure and management of the NNI is 
appropriate and effective and, accordingly, I urge Congress to 
proceed with caution in considering any fundamental changes to 
the structure.
    In Fiscal Year 2009, the Administration has requested $1.5 
billion for the program. The NNI now represents a cumulative 
investment of almost $10 billion. The NNI recently released an 
updated strategic plan that outlines the following four basic 
goals for the initiative.
    Goal 1. Advanced a world class nanotechnology research and 
development program.
    The NNI has funded thousands of individual R&D projects 
since its inception, contributing to U.S. world leadership in 
nanotechnology. While identifying meaningful metrics for 
evaluating U.S. global leadership in nanotechnology is 
challenging, by many of the measures that we do have available, 
the United States continues to lead in both basic and applied 
research, nanoscale science and technology. While the U.S. 
leads in many important statistics, the rest of the world is 
hard on our heels.
    In terms of both funding and research results, Europe, Asia 
and now Russia are matching and in some cases exceeding our 
nanofunding and are hoping to take over the leadership role.
    Goal 2. Foster the transfer of new technologies into 
products for commercial and public benefit.
    The NNI has put in place a number of efforts targeted to 
enhance the transfer of research results into practical 
applications and commercialization. For example, there are over 
60 interdisciplinary research centers and user facilities 
around the country which provide collaborative environments 
where researchers from academia and industry can interact, 
increasing the likelihood of technology transfer.
    Goal 3. Develop and sustain educational resources, a 
skilled work force, and support infrastructure and tools to 
advance nanotechnology.
    Education is among the chief objectives of the NNI-funded 
university research. In addition, there are numerous specific 
programs targeted at K through 12 education.
    Goal 4. Support responsible development of nanotechnology, 
something, Mr. Chairman, you were just alluding to. As 
potential environment, health and safety concerns about 
nanotechnology begin to emerge in the early years of the 
initiative, an interagency EHS working group was formed.
    In December 2004, the NNI released a strategic plan calling 
out EHS research for special attention. In September 2006, the 
EHS Research Needs Report was completed. It identified 75 
research needs within five general categories of EHS research. 
Most recently, in February 2008, a comprehensive EHS strategy 
was released. In addition, the National Research Council is now 
under contract to assess the EHS strategy.
    The Federal Government needs to ensure that nano-EHS 
research is adequately addressed. To this end, the NNI has 
systematically: (1) identified research needs, (2) prioritized 
those needs, (3) developed an associated inventory from which a 
gap analysis can be performed, and (4) developed a strategy for 
addressing and prioritizing the needs that are not currently 
being addressed.
    The Administration believes this systematic approach is the 
right way to address EHS research needs. This systematic 
approach has led to EHS funding being more than doubled since 
Fiscal Year 2005, from $35 million to $76 million in the Fiscal 
2009 request, a growth rate significantly faster than the 
overall growth than NNI.
    As GAO points out in its report on NNI's EHS research, and 
I quote, ``Some environmental and industry groups have 
advocated for a more top-down and directed approach for setting 
and funding Federal nanotechnology research priorities. 
However, such a structure and approach is generally 
inconsistent with the historical approaches used to set Federal 
research priorities and may be difficult to implement.''
    We agree, and the Administration does not support 
establishing an arbitrary top-down EHS set-aside.
    In conclusion, Mr. Chairman, the NNI has been and remains a 
highly successful enterprise, due in large part to the 
unparalleled interagency coordination and collaboration which 
in turn has been effective because of a voluntary bottom-up 
nature in which all the agencies that participate benefit.
    I look forward to working with the Committee as it 
considers how to improve upon the successful program.
    [The prepared statement of Mr. Russell follows:]

Prepared Statement of Ambassador Richard M. Russell, Associate Director 
 and Deputy Director for Technology, Office of Science and Technology 
               Policy, Executive Office of the President
I. Introduction
    Chairman Kerry, Ranking Member Ensign and members of the 
Subcommittee, I am pleased to appear before you to discuss the National 
Nanotechnology Initiative (NNI) and issues associated with its upcoming 
reauthorization. First of all, I would like to thank this Committee on 
behalf of the Administration and the NNI for its bipartisan support for 
nanotechnology research, as well as for the good working relationship 
the Committee has established with our office and the representatives 
of the NNI.
    In my testimony today, I would like to provide an overview of the 
NNI organization, activities, and funding, and communicate the 
Administration's policy priorities with respect to the upcoming 
reauthorization of the program, in the context of the NNI's newly 
updated strategic plan.\1\ I also want to go into particular detail on 
nanotechnology-related environmental, health, and safety (EHS) issues.
---------------------------------------------------------------------------
    \1\http://www.nano.gov/NNI_Strategic_Plan_2007.pdf.
---------------------------------------------------------------------------
    Established in 2000 to coordinate Federal nanotechnology research 
and development (R&D), the NNI is built on the voluntary association of 
25 Federal agencies that have activities and interests related to 
nanoscale science and technology. The management of the NNI is led by 
the Office of Science and Technology Policy (OSTP), which oversees the 
National Science and Technology Council (NSTC) and the National 
Nanotechnology Coordination Office (NNCO). The participating agencies 
of the NSTC's Subcommittee on Nanoscale Science, Engineering, and 
Technology (NSET) coordinates the NNCO. The NNCO provides technical and 
administrative support to the NSET Subcommittee, serves as a central 
point of contact for Federal nanotechnology R&D activities, and 
provides public outreach on behalf of the NNI. By providing a locus for 
communication, cooperation, and collaboration the NNI provides 
effective avenues for each individual agency to leverage the resources 
and expertise of all participating agencies.
    The NNI has become a successful model for interagency cooperation 
and coordination in science and technology. From the broader 
perspective of the U.S. Government as a whole, this cooperation and 
coordination creates synergy that makes the NNI greater than the sum of 
its parts. The coordination in addressing potential EHS implications of 
nanotechnology has been particularly strong, and successful: never 
before have regulatory and research agencies successfully communicated 
so effectively on a topic of common interest, and among such a large 
number of agencies. Through the NNI the member agencies have been 
working hard to understand--and to think strategically about--
nanotechnology-related EHS issues in a systematic, coordinated fashion.
    The NNI enterprise does come with some ``overhead'' expenses. As 
long as those expenses are relatively modest, the voluntary interagency 
cooperation that has been the hallmark of the NNI will continue. But in 
an era when so-called ``discretionary funding'' accounts in the Federal 
budget, including R&D funding, are under extreme pressure, we need to 
be particularly careful not to increase the overhead expenses unduly. 
These expenses include not just the budget for the NNCO, but also the 
personnel costs at each of the agencies associated with managing a 
complex interagency coordinated effort like this.
    The Administration believes the organization, structure, and 
management of the NNI is appropriate and effective, and accordingly I 
urge Congress to proceed with caution in considering any fundamental 
changes in this area.
II. Overview and Status of NNI Goals
    The NNI now represents a cumulative investment of almost $10 
billion since its inception in Fiscal Year 2001, including the 
President's requested NNI budget for Fiscal Year 2009. The requested 
investment for 2009 of $1.5 billion and the substantial growth in this 
investment since 2001 reflects a shared appreciation by both this 
Administration and Congress of the potential for nanoscale science and 
technology R&D. Managed under the auspices of the NNI, these 
investments will expand our fundamental knowledge of this field and 
make important contributions to national priorities such as economic 
competitiveness, homeland and national security, and public health. A 
summary of the FY 2009 NNI Budget request broken down by agency and 
program component area is attached in Appendix I.
    The NNI recently released an updated strategic plan that outlines 
the following four basic goals for the initiative:
    Goal 1: Advance a world-class nanotechnology research and 
development program.
    Toward this goal, the NNI has funded thousands of individual R&D 
projects since its inception, contributing to U.S. world leadership in 
nanotechnology. As indicated in the recently released President's 
Council of Advisors on Science and Technology (PCAST) review of the 
NNI,\2\ identifying meaningful metrics for evaluating U.S. global 
leadership in nanotechnology is challenging. But by many of the 
measures that we do have available, the United States continues to lead 
in both basic and applied research in nanoscale science and technology.
---------------------------------------------------------------------------
    \2\ http://ostp.gov/galleries/PCAST/
PCAST_NNAP_NNI_Assessment_2008.pdf
---------------------------------------------------------------------------
    As shown in the PCAST report, U.S.-based researchers dominate in 
publication of nanotechnology-related papers in three of the world's 
premier scientific journals, Science, Nature, and Proceedings of the 
National Academy of Sciences, rising from about 60 percent at the 
inception of the NNI in 2000 to over 70 percent in 2006. U.S. papers 
also are cited far more frequently in peer reviewed journal 
publications than are papers from any other country--another clear 
indicator of the ``world-class'' quality of U.S. nanotechnology 
research. This leadership in citations has also been sustained over the 
initial years of the NNI, even while other nations have also 
substantially increased their investments in nanotechnology R&D.
    Finally, and perhaps most significantly, U.S. inventors lead the 
world by far in nanotechnology-enabled patents, including patents filed 
in three or more international patent offices. This is a clear 
indicator of leadership in nanotechnology intellectual property, which 
we would expect to ultimately translate into leadership in 
commercialization of nanotechnology-based products.
    These are all strong indicators that the United States is indeed 
advancing a world-class nanotechnology research and development 
program, in large part under the auspices of the NNI. However, we must 
not be complacent in evaluating our international competitiveness in 
nanotechnology. Also as indicated in the new PCAST report, Europe as a 
whole leads the world in nanotechnology publications in the Science 
Citation Index (SCI) data base, and China and other Asian countries are 
rapidly gaining on the United States and Europe in SCI publications. 
Therefore we must continue to sustain and increase our strategic 
investments in this critical area of science and technology.
    Goal 2: Foster the transfer of new technologies into products for 
commercial and public benefit.
    The NNI has put in place a number of efforts targeted to enhance 
the transfer of research results into practical applications and 
commercialization. Examples of successful technology transfer efforts 
under the NNI are included in Appendix II. Specific NNI activities 
supporting this technology transfer/commercialization goal include the 
following:

   U.S. leadership in nanotechnology patenting, an essential 
        step in commercialization. The U.S. Patent and Trademark Office 
        (USPTO) is working hard to assure efficient and appropriate 
        processing of nanotechnology-related patents by creating a 
        nanotechnology patent cross reference collection, including 
        patents and patent applications spanning the wide range of 
        fields of science and engineering that now involve nanoscale 
        science and technology. USPTO is also conducting training 
        sessions for its examiners to improve their understanding of 
        nanotechnology.

   Agency-specific programs support application and use of 
        nanotechnology (DOD, NASA, NIH, etc.). For example, DOD has led 
        the way in development of electronics and sensing applications 
        of nanotechnology, as well as in development and deployment of 
        specialized coatings, e.g., to reduce wear and maintenance 
        costs on moving parts in the Navy fleet. NASA has led in the 
        development of nanotechnology-enabled sensors. NIH has led in 
        funding the development of numerous biomedical applications of 
        nanotechnology, including a number of promising novel 
        approaches for early detection and treatment of cancer.

   Industry liaison groups and public/private partnerships. 
        These groups assist in exchanging information on NNI research 
        activities and industry needs and in leveraging funds for 
        cooperative R&D. Industry liaison groups with the electronics, 
        forest products, and chemical industries, and with the 
        industrial research management community, are continuing, while 
        formation of comparable groups with other sectors (e.g., the 
        construction industry) is under consideration. One successful 
        example is the collaboration between NSF, NIST, and the 
        industry-led Nanoelectronics Research Initiative (NRI), where 
        industry and government representatives collaborate in setting 
        long-term research priorities for nanoelectronics, reviewing 
        proposals and supporting pre-competitive research. In another 
        example, NIH is formulating a ``NanoHealth Enterprise,'' which 
        is envisioned as a partnership with other Federal agencies, 
        private industry, and international partners to address 
        research needs for safe development of nanoscale materials and 
        devices.

   NNI support for the development of international standards 
        for nanotechnology. Such standards are critical to future 
        commercialization activities. NNCO Director Clayton Teague 
        chairs the U.S. Technical Advisory Group (TAG) to the 
        International Organization for Standardization (ISO) Technical 
        Committee on Nanotechnologies (ISO TC 229). NNI agencies have 
        provided initial financial support to the American National 
        Standards Institute's Nanotechnology Standards Panel (ANSI-NSP) 
        and the ANSI-accredited TAG that represents the United States 
        on ISO TC 229. The ANSI-NSP leads the ISO TC 229 working group 
        on EHS aspects of nanotechnology.

   Workshops facilitating technology transfer of NNI research 
        results. Two workshops have been held to bring together 
        representatives from state and regional nanotechnology 
        commercialization initiatives to learn best practices and 
        exchange information. Other workshops have been convened to 
        discuss opportunities and priorities for nanotechnology 
        research in specific sub-fields, where industry participants 
        are invited to provide input, but also where they can learn 
        about NNI-funded research that may be of interest to their 
        companies. In particular, the NNI agencies are now organizing a 
        series of workshops to address research priorities in specific 
        areas of nanotechnology-related EHS.

   Research on manufacturing at the nanoscale, or 
        ``nanomanufacturing.'' Nanomanufacturing will be key to the 
        large-scale application of nanotechnology innovations for 
        commercial and public benefit. The NNI places a special 
        emphasis on nanomanufacturing research, as one of its eight 
        program component areas (or PCAs). For example, NSF has 
        established a new program dedicated to nanomanufacturing 
        supporting individual projects and the National 
        Nanomanufacturing Network. Several workshops have been 
        conducted to help guide the NNI nanomanufacturing research 
        agenda and coordinate it with industry; several more are 
        planned for the near future.

   Industry participation in NNI research. Another way in which 
        technology transfer takes place is within the interdisciplinary 
        research centers and user facilities around the country. In 
        these collaborative environments, researchers from academia and 
        industry can interact, allowing for rapid diffusion of 
        knowledge and increasing the likelihood of innovation.

    Goal 3: Develop and sustain educational resources, a skilled work 
force, and the supporting infrastructure and tools to advance 
nanotechnology.
    One of the chief overarching achievements of the NNI is the 
successful development and deployment of a unique infrastructure of 
nanotechnology research centers and user facilities, one that is second 
to none in the world. Part of the original NNI plan, this extensive 
network of over 60 research centers, user facilities and other 
infrastructure for nanotechnology research (more than 80 if you count 
other related centers and affiliated institutions), is now largely 
established. This mature infrastructure serves to accelerate 
nanotechnology research and development and enables researchers from 
across various sectors to broadly leverage their interdisciplinary 
intellectual and technological capital.
    With respect to education and workforce development, education is 
among the chief objectives of NNI-funded university research. In 
addition, there are specific programs targeted at K-12 education, 
educating the public about nanotechnology, and improving nanotechnology 
curricula in our schools and universities. For example:

   Educational impact is among the key review criteria for NSF 
        proposals. As a result of the NNI, thousands of undergraduate 
        and graduate students have received training in nanoscale 
        science and technology, providing the pipeline for 
        nanotechnology workers and researchers that industry needs to 
        commercialize the results of basic research in nanoscale 
        science and technology. NSF annually supports education for 
        about 10,000 students and teachers in the field of 
        nanotechnology.

   The NNI has created strong incentive for interdisciplinary 
        research at our major research institutions, and a new cadre of 
        multi-disciplinary researchers, trained in multiple fields 
        previously considered ``diverse'' and highly distinct, such as 
        biology and solid state physics. While we retain a strong 
        appreciation for the importance of building a solid foundation 
        for our researchers of the future in the traditional 
        disciplines of science and engineering, it is this ``silo 
        busting'' new culture of interdisciplinary research, and the 
        new generation of multidisciplinary researchers emerging from 
        the NNI-funded centers, that I consider to be one of the 
        greatest achievements of the NNI. It is at the intersection of 
        the traditional disciplines where we are seeing some of the 
        most interesting and potentially beneficial applications of 
        nanotechnology emerge.

   In addition to the general educational impact of the NNI 
        discussed above, NNI agencies, particularly NSF, have also 
        engaged in a number of initiatives to improve nanotechnology 
        education, curricula, and workforce development specifically. 
        These include the Nanotechnology Center for Learning and 
        Teaching (NCLT) and the Nanoscale Informal Science Education 
        (NISE) Network. Details are available in the NNI Supplement to 
        the President's Budget for FY 2008.

   The NNI has recently engaged the Departments of Education 
        and Labor, and the research agencies are now working with staff 
        from those departments to develop additional initiatives aimed 
        at education and workforce development.

    Goal 4: Support responsible development of nanotechnology.
    The activities and issues associated with this goal have received a 
great deal of attention by the NNI. The original NNI implementation 
plan of July 2000 included a substantial section on ``Societal 
Implications of Nanotechnology,'' and requested significant resources 
for this activity. As potential EHS concerns about nanomaterials began 
to emerge in the early years of the initiative, the NNI also led the 
way, holding in August 2003 the first interagency meeting on this 
subject, which eventually led to the establishment of the formal 
Nanotechnology Environmental and Health Implications (NEHI) interagency 
working group.


    In December 2004, the NNI released a strategic plan calling out EHS 
research for special attention, as part of a Program Component Area 
(PCA) on Societal Dimensions of Nanotechnology. In early 2005, the NEHI 
Working Group began work on a cross-agency EHS research needs document, 
building on an earlier effort in 2004 to inventory existing EHS 
research funded under the NNI. In March of 2005, the NNI released its 
Supplement to the President's FY 2006 Budget,\3\ which for the first 
time reported EHS research investments separately. In the fall of 2005, 
NNI began preparation of a research needs document. The resulting 
document, Environmental, Health, and Safety Research Needs for 
Engineered Nanoscale Materials,\4\ released in September 2006, 
identified 75 research needs within five general categories of EHS 
research. It also set out a plan for ``next steps'' for the NNI to 
address this issue, including further prioritization of the research 
needs identified in the report, evaluation of the existing NNI EHS 
research portfolio, a gap analysis based on a comparison of the 
prioritized research needs and the existing research portfolio, 
coordination of the NNI agencies' research programs to address the 
priorities, and development of a process for periodic review and 
updating of research needs and priorities.
---------------------------------------------------------------------------
    \3\ http://www.nano.gov/NNI_06Budget.pdf
    \4\ http://www.nano.gov/NNI_EHS_research_needs.pdf
---------------------------------------------------------------------------
    The NEHI Working Group then proceeded to follow that ``next steps'' 
agenda. The research needs document was posted for public comment in 
the fall of 2006, followed by a public meeting to gather input on the 
document in January 2007. Based on this input, the NEHI Working Group 
in August 2007 released an interim document for public comment entitled 
Prioritization of Environmental, Health, and Safety Research Needs for 
Engineered Nanoscale Materials.\5\ That document narrowed the list of 
EHS research needs down to five in each of the categories, for a total 
of 25 high-priority research needs. Based on input on that interim 
document and extensive further analysis by the EOP and the agencies 
involved, in February 2008 the NEHI Working Group released its first 
comprehensive Strategy for Nanotechnology-Related Environmental, 
Health, and Safety Research.\6\
---------------------------------------------------------------------------
    \5\ http://www.nano.gov/
Prioritization_EHS_Research_Needs_Engineered_Nanoscale_
Materials.pdf
    \6\ http://www.nano.gov/NNI_EHS_Research_Strategy.pdf
---------------------------------------------------------------------------
    This strategy for the NNI's EHS research presents a path for 
coordinated interagency implementation of research to address the needs 
identified in earlier reports. It is based in part on a detailed 
analysis of the Federal Government's FY 2006 nanotechnology-related EHS 
research portfolio, a $68 million investment in 246 projects. Experts 
from the NEHI Working Group analyzed how these activities addressed the 
priority research needs and then proposed emphasis and sequencing for 
future research efforts. Agency-specific research and regulatory needs, 
public comments on the prior documents, and considerations of the state 
of EHS research in the national and international nanotechnology 
communities all played an important role in shaping the strategy. It 
reflects a strong commitment among the NNI member agencies to the roles 
they will assume, consistent with their respective missions and 
responsibilities, to move the Federal efforts in nanotechnology-related 
EHS research forward. The comprehensive detail in the document 
demonstrates that the NNI is working hard to understand--and to think 
strategically about--nano EHS issues in a systematic, coordinated 
fashion. As indicated in both the initial EHS research needs document 
and in this new strategy document, the strategy will be updated 
periodically. Furthermore, as indicated in the timeline above, the 
National Research Council (NRC) is now under contract from the NNCO to 
assess the EHS strategy. Once the NRC assessment is complete, their 
recommendations will be incorporated, as appropriate, into an updated 
strategy.
    I think the NNI has made tremendous progress toward the goal of 
supporting responsible development of nanotechnology. Funding for EHS 
research in particular has more than doubled since FY 2005, from $35 
million to $76 million in the FY 2009 request. This is only counting 
the narrowly defined ``primary purpose'' EHS R&D. Beyond just 
increasing the funding, the NNI agencies have come up with an excellent 
strategy that all the relevant agencies support, to carry forward these 
investments in the most effective way possible. The increasing emphasis 
on EHS is notable and important.
    I believe the Federal Government needs to ensure that nano-EHS 
research needs are adequately addressed. To this end, the NNI has 
systematically: (1) identified research needs, (2) prioritized those 
needs, (3) developed an associated inventory from which a gap analysis 
can be performed, and (4) developed a strategy for addressing the 
prioritized needs that are not currently being addressed. The 
Administration believes this systematic approach is the right way to 
address EHS research needs. The Administration therefore does not 
support establishing an arbitrary EHS set-aside.
IV. Summary and Conclusions
    The NNI has been and remains a highly successful enterprise, due in 
large part to the unparalleled interagency coordination and 
cooperation, which in turn has been effective because of the voluntary, 
``bottom up'' nature of that cooperation, in which all the agencies 
benefit. As demonstrated above and validated by external reviews, the 
NNI is effectively pursuing its goals of advancing world-class 
nanotechnology R&D fostering technology transfer; developing and 
sustaining educational resources, work force, and supporting 
infrastructure; and supporting responsible development of 
nanotechnology. The findings of the external reviews clearly indicate 
that the existing structure is working well, and I look forward to 
working with the Committee as it considers the future of this 
successful program.
                               Appendix I
National Nanotechnology Initiative FY 2009 Budget and Highlights
    The 2009 Budget provides $1.5 billion for the National 
Nanotechnology Initiative (NNI), reflecting steady growth in the NNI 
investment. This sustained major investment in nanotechnology research 
and development (R&D) across the Federal Government over the past nine 
Fiscal Years of the NNI reflects the broad support of the 
Administration and of Congress for this program, based on its potential 
to vastly improve our fundamental understanding and control of matter, 
ultimately leading to a revolution in technology and industry for the 
benefit of society. The NNI remains focused on fulfilling the Federal 
role of supporting basic research, infrastructure development, and 
technology transfer, in the expectation that the resulting advances and 
capabilities will make important contributions to national priorities, 
with applications across a wide range of industries including 
healthcare, electronics, aeronautics, and energy. Increasing 
investments by mission agencies in nanotechnology-related research 
since 2001 reflect a recognition of the potential for this research to 
support agency missions and responsibilities.
    Table 1 provides NNI investments in 2007-2009 for Federal agencies 
with budgets/investments for nanotechnology R&D. Tables 2-4 list the 
investments by agency and by program component area (PCA). Note that 
the program component areas shown in these tables are those outlined in 
the new NNI Strategic Plan released in December 2007,\7\ with 
nanotechnology-related environmental, health, and safety (EHS) research 
now reported for the first time in a separate PCA from education and 
other societal dimensions investments.
---------------------------------------------------------------------------
    \7\ http://www.nano.gov/NNI Strategic Plan 2007.pdf
---------------------------------------------------------------------------
    The 2009 NNI budget supports nanoscale science and engineering R&D 
at 13 agencies. Agencies with the greatest investments are the 
Department of Defense (DOD--investments addressing the defense 
mission); the National Science Foundation (NSF--fundamental research 
across all disciplines of science and engineering); the Department of 
Energy (DOE--research providing a basis for new and improved energy 
technologies); the National Institutes of Health (NIH, within the 
Department of Health and Human Services, DHHS--nanotechnology-based 
biomedical research at the intersection of biology and the physical 
sciences); and the National Institute of Standards and Technology 
(NIST--fundamental research and development of tools, analytical 
methodologies, and metrology for nanotechnology). Other agencies that 
are investing in mission-related research are the National Aeronautics 
and Space Administration (NASA), the National Institute for 
Occupational Safety and Health (NIOSH/DHHS), the Environmental 
Protection Agency (EPA), and the Departments of Agriculture (USDA--
Cooperative State Research, Education, and Extension Service, CSREES; 
and Forest Service, FS), Homeland Security (DHS), Justice (DOJ), and 
Transportation (DOT--Federal Highway Administration, FHWA).
Key Points about the 2009 NNI Investments
   The 2009 NNI budget provides increased support for research 
        on fundamental nanoscale phenomena and processes, from $481 
        million in 2007 to $551 million in 2009.

   Increases in nanotechnology R&D funding for DOE, NIST, and 
        NSF reflect the President's continuing commitment to 
        significantly increase funding for physical sciences and 
        engineering research as part of the American Competitiveness 
        Initiative.

   The proposed budget also reflects substantial ongoing growth 
        in funding for instrumentation research, metrology, and 
        standards (from $53 million in 2007 to $82 million in 2009) and 
        in nanomanufacturing research (from $48 million in 2007 to $62 
        million in 2009). NNI agencies are gathering input and feedback 
        from industry and the research community on these growing 
        investments through a series of workshops.

   EHS R&D funding in 2009 ($76 million) is over double the 
        level of actual funding in 2005 ($35 million)--the first year 
        this data was collected. The steady growth in EHS R&D spending 
        follows the NNI strategy of expanding the capacity to do high-
        quality research in this field. For tables in this document, 
        EHS R&D is defined as research whose primary purpose is to 
        understand and address potential risks to health and to the 
        environment posed by nanotechnology. Therefore the proposed $76 
        million for 2009 does not include substantial research reported 
        under other PCAs, e.g., on instrumentation and metrology and on 
        fundamental interactions between biosystems and engineered 
        nanoscale materials, both of which are important in the 
        performance and interpretation of toxicological research. An 
        indication of the level of funding for these broader categories 
        of nanotechnology-related EHS research may be deduced from the 
        detailed 2006 data collected and analyzed specifically for this 
        purpose. This data showed that the total funding for 
        nanotechnology-related EHS research in 2006 was about $68 
        million, 80 percent higher than that reported for ``primary 
        purpose research.''

   A more detailed Budget Supplement will be released when data 
        become available on funding for nanotechnology under the Small 
        Business Innovation Research (SBIR) and Small Business 
        Technology Transfer Research (STTR) programs.

                                         Table 1.--NNI Budget, 2007-2009
                                              [dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                         2008           2009
                                                                      2007 Actual     Estimate*       Proposed
----------------------------------------------------------------------------------------------------------------
DOD                                                                        450            487            431
NSF                                                                        389            389            397
DOE**                                                                      236            251            311
DHHS (NIH)                                                                 215            226            226
DOC (NIST)                                                                  88             89            110
NASA                                                                        20             18             19
EPA                                                                          8             10             15
DHHS (NIOSH)                                                                 7              6              6
USDA (FS)                                                                    3              5              5
USDA (CSREES)                                                                4              6              3
DOJ                                                                          2              2              2
DHS                                                                          2              1              1
DOT (FHWA)                                                                   1              1              1
----------------------------------------------------------------------------------------------------------------
    TOTAL                                                                1,425          1,491          1,527
----------------------------------------------------------------------------------------------------------------
* The 2008 DOD estimate exceeds the 2008 request by $112 million but includes many Congressional earmarks that
  are outside the NNI plan.
** Funding levels for DOE include the Offices of Science, Fossil Energy, and Energy Efficiency and Renewable
  Energy.


                                           Table 2.--Actual 2007 Agency Investments by Program Component Area
                                                                  [dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Instrument                     Major
                                 Fundamental                Nanoscale    Research,                     Research   Environment,   Education
                                   Phenomena     Nano-     Devices and   Metrology,       Nano-       Facilities     Health,        and       NNI Total
                                     and       materials     Systems        and       manufacturing   and Instr.   and Safety     Societal
                                  Processes                              Standards                   Acquisition                 Dimensions
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOD                                    210.1         86.0        120.0          4.3             7.5         22.3                                   450.2
NSF                                    145.2         58.4         52.4         14.9            26.6         30.0          26.9         34.4        388.8
DOE                                     52.6         68.5          9.7         11.3             0.5         92.9                        0.5        236.0
DHHS (NIH)                              45.7         25.4        125.7          5.9             0.8                        7.7          4.2        215.4
DOC (NIST)                              24.2          7.5         22.9         14.2            12.4          5.5           0.9                      87.6
NASA                                     0.8          9.9          9.1                                                                              19.8
EPA                                      0.2          0.2          0.1                                                     7.1                       7.6
DHHS (NIOSH)                                                                                                 1.7           5.6                       7.3
USDA (FS)                                0.4          1.3          0.7          0.3             0.2                                                  2.9
USDA (CSREES)                            0.5          1.0          2.1                          0.1                        0.1          0.1          3.9
DOJ                                                   0.1                       1.6                                                                  1.7
DHS                                                                2.0                                                                               2.0
DOT (FHWA)                               0.9                                                                                                         0.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
TOTAL                                  480.6        258.3        344.7         52.5            48.1        152.4          48.3         39.2      1,424.1
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                          Table 3.--Estimated 2008 Agency Investments by Program Component Area
                                                                  [dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Instrument                     Major
                                 Fundamental                Nanoscale    Research,                     Research   Environment,   Education
                                   Phenomena     Nano-     Devices and   Metrology,       Nano-       Facilities     Health,        and       NNI Total
                                     and       materials     Systems        and       manufacturing   and Instr.   and Safety     Societal
                                  Processes                              Standards                   Acquisition                 Dimensions
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOD                                    258.7         68.9        119.8          8.0             5.4         24.6           2.0                     487.4
NSF                                    138.8         62.1         50.3         16.0            26.9         31.6          29.2         33.8        388.7
DOE                                     51.4         77.5         13.0         12.0             2.0         92.0           3.0          0.5        251.4
DHHS (NIH)                              55.6         25.4        125.8          5.9             0.8                        7.7          4.6        225.8
DOC (NIST)                              22.5          7.4         21.7         16.1            14.4          5.8           0.8                      88.7
NASA                                     1.5          9.7          6.2                                       0.4           0.2                      18.0
EPA                                      0.2          0.2          0.2                                                     9.6                      10.2
DHHS (NIOSH)                                                                                                               6.0                       6.0
USDA (FS)                                1.3          1.9          1.2          0.4             0.2                                                  5.0
USDA (CSREES)                            0.7          1.6          3.1                          0.5                        0.1          0.1          6.1
DOJ                                                                             2.0                                                                  2.0
DHS                                                                1.0                                                                               1.0
DOT (FHWA)                               0.9                                                                                                         0.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
TOTAL                                  531.6        254.7        342.3         60.4            50.2        154.4          58.6         39.0     1,491.27
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                           Table 4.--Planned 2008 Agency Investments by Program Component Area
                                                                  [dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Instrument                     Major
                                 Fundamental                Nanoscale    Research,                     Research   Environment,   Education
                                   Phenomena     Nano-     Devices and   Metrology,       Nano-       Facilities     Health,        and       NNI Total
                                     and       materials     Systems        and       manufacturing   and Instr.   and Safety     Societal
                                  Processes                              Standards                   Acquisition                 Dimensions
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOD                                    227.8         55.2        107.7          3.6            12.8         22.1           1.8                     431.0
NSF                                    141.7         62.5         51.6         16.0            26.9         32.1          30.6         35.5        396.9
DOE                                     96.9         63.5          8.1         32.0             6.0        101.2           3.0          0.5        311.2
DHHS (NIH)                              55.5         25.4        125.8          5.9             0.8                        7.7          4.6        225.7
DOC (NIST)                              24.5          8.5         22.7         20.9            15.3          5.7          12.8                     110.4
NASA                                     1.2          9.8          7.7                                       0.2           0.1                      19.0
EPA                                      0.2          0.2          0.2                                                    14.3                      14.9
DHHS (NIOSH)                                                                                                               6.0                       6.0
USDA (FS)                                1.7          1.3          0.7          1.1             0.2                                                  5.0
USDA (CSREES)                            0.4          0.8          1.5                          0.1                        0.1          0.1          3.0
DOJ                                                                             2.0                                                                  2.0
DHS                                                                1.0                                                                               1.0
DOT (FHWA)                               0.9                                                                                                         0.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
TOTAL                                  550.8        227.2        327.0         81.5            62.1        161.3          76.4         40.7      1,527.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

Highlights of Ongoing and Planned Activities
   The extensive network of research centers, user facilities 
        and other infrastructure for nanotechnology research, 
        originally envisioned as a key element of the NNI strategy, is 
        now largely complete. This mature infrastructure serves to 
        accelerate nanotechnology research and development and enables 
        researchers from across various sectors to broadly leverage 
        their interdisciplinary intellectual and technological capital. 
        NNI agencies are encouraging industrial interaction with NNI-
        funded research centers, and are promoting broad access to the 
        NNI user facilities by all sectors, including small businesses. 
        While emphasis in the near future will be on maximizing the 
        utility and utilization of the substantial infrastructure 
        already in place, the agencies will also consider possible new 
        needs for the longer term.

   Industry liaison and technology transfer activities are 
        given a high priority in the new NNI Strategic Plan released in 
        December 2007. NNI agencies are working with industry 
        representatives to gather input on their nanotechnology-related 
        activities and are funding increasing numbers of 
        nanotechnology-related SBIR and STTR awards to promote 
        technology transfer to industry. Industry liaison groups with 
        the electronics, forest products, and chemical industries, and 
        with the industrial research management community, are 
        continuing, while formation of comparable groups with other 
        sectors (e.g., the construction industry) is under 
        consideration. One successful example is the collaboration 
        between NSF, NIST, and the industry-led Nanoelectronics 
        Research Initiative, where industry and government 
        representatives collaborate in reviewing proposals and in 
        supporting pre-competitive research. In another example, NIH is 
        formulating a ``NanoHealth Enterprise,'' which is envisioned as 
        a partnership with other Federal agencies, private industry, 
        and international partners to address research needs for safe 
        development of nanoscale materials and devices.

   EHS research planning is a major activity for the NNI. In 
        August 2007, the National Science and Technology Council's 
        Nanoscale Science, Engineering, and Technology (NSET) 
        Subcommittee published a draft report for public comment 
        prepared by its Nanotechnology Environmental and Health 
        Implications (NEHI) Working Group entitled Prioritization of 
        Environmental, Health, and Safety Research Needs for Engineered 
        Nanoscale Materials, and, in February 2008, completed a 
        comprehensive Strategy for Nanotechnology-Related 
        Environmental, Health, and Safety Research. This is the 
        culmination of 2 years of intensive work, including a detailed 
        review of individual EHS research projects funded by the NNI 
        agencies in 2006, as a guide to identification of gaps in the 
        research portfolio compared to the designated priority research 
        areas.

   As the NNI EHS research strategy evolves, ongoing activities 
        to address the breadth of EHS issues proceed at an accelerating 
        pace. A Food and Drug Administration (FDA) task force released 
        a report in 2007 addressing scientific questions related to the 
        application of its regulatory authorities to nanotechnology-
        enabled products. EPA issued a white paper on nanotechnology in 
        2007, and has initiated a Nanoscale Materials Stewardship 
        Program under the Toxic Substances Control Act (TSCA) to gather 
        and develop information from manufacturers, importers, 
        processors and users of engineered chemical nanoscale 
        materials. NIOSH continues to update its guidance document on 
        best practices for safe handling of nanomaterials in the 
        workplace, and has posted a draft document providing interim 
        guidance on medical screening of workers potentially exposed to 
        engineered nanoparticles. NNI agencies organized a workshop 
        hosted by NIST in September 2007 entitled ``Standards for 
        Environmental, Health, and Safety for Engineered Nanoscale 
        Materials.'' On the research front, two joint interagency 
        solicitations addressing potential environmental and health 
        implications of nanotechnology continue. One (led by EPA, with 
        NSF) addresses environmental implications, while another (led 
        by NIH, with EPA and NIOSH) focuses on human health 
        implications. NSF and EPA will fund a new Center for 
        Environmental Implications of Nanotechnology (CEIN) in 2008. 
        NSF plans to form a network around it in 2009 with 
        collaboration from EPA and other agencies.

   International collaborations in nanotechnology are 
        progressing, with strong NNI participation. The Organisation 
        for Economic Cooperation and Development (OECD) Working Party 
        on Manufactured Nanomaterials, chaired by the United States, 
        has begun its work addressing health and safety issues. A 
        second OECD working party formed under the Committee for 
        Scientific and Technological Policy is addressing broader 
        issues such as economic impact, education and training, and 
        public communication. With respect to standards development, 
        the National Nanotechnology Coordination Office and several 
        NSET member agencies represent the United States on the 
        International Organization for Standardization (ISO) Technical 
        Committee on Nanotechnologies (ISO TC 229), and the United 
        States leads the ISO TC 229 working group on EHS aspects of 
        nanotechnology.
                              Appendix II
      A Few Examples of NNI Supported Transfers of Nanotechnology
       Research Results from the Laboratory to Applications and 
                           Commercialization
    In addition to the examples given below, the 2007 NNI Strategic 
Plan \8\ includes several examples of early NNI successes in technology 
transfer (pp. 14-15), as well as a number of high-impact application 
opportunities that are now emerging from NNI-funded laboratories (pp. 
25-34). Further, the new PCAST/NNAP report includes more examples of 
technologies that are being transitioned from NNI-funded research into 
commercial applications.
---------------------------------------------------------------------------
    \8\ http://www.nano.gov/NNI Strategic Plan 2007.pdf

   One of the original motivations for the NNI was the need for 
        more basic research in nanotechnology-enabled electronics, 
        photonics, and magnetics research, to keep the semiconductor 
        industry on the ``Moore's Law'' curve of continuous improvement 
        in cost/performance of semiconductor devices that has been so 
        important to our economic prosperity in the past 50 years. 
        While semiconductor device design rules have been in the sub-
        100 nanometer range for several years now, at the time of the 
        NNI's inception, leaders in the industry were predicting that 
        future progress would soon be hitting a ``brick wall'' where 
        continued scaling of traditional CMOS devices would be 
        difficult or impossible due to current leakage, heat 
        dissipation problems, and interference by quantum effects that 
        begin to dominate device behavior in the nanoscale size range. 
        They called on the Government to conduct an intensified basic 
        research program under the auspices of the NNI to address these 
        problems, including the specific goal of developing a 
        completely new paradigm to replace the electronic ``switch'' 
        that is at the heart of both logic and memory devices. The 
        collaboration by NSF and NIST with industry in the 
        Nanoelectronics Research Initiative referred to above was one 
        of the NNI responses to this problem. As a result of this and 
        other NNI investments in nano-electronics, -magnetics, and -
        photonics research and infrastructure, progress in addressing 
        this problem has been faster than had been expected previously. 
        At a meeting of the President's Council of Advisors on Science 
        and Technology on January 8, 2008, George Scalise, President of 
        the Semiconductor Industry Association, stated that, for the 
        roadmaps the semiconductor industry has laid out, their 
        consensus is that they are 2 years ahead of where they thought 
        they would be just a few years ago, thanks in part to the NRI 
        and the NNI. Dr. Scalise also said that for the next generation 
        switch, most of the new ideas are coming from the United 
---------------------------------------------------------------------------
        States, not from abroad.

   Another major thrust of the NNI that has emerged in recent 
        years is the applications of nanotechnology related to human 
        health--i.e., to diagnosis and treatment of disease. The budget 
        for nanotechnology research at the National Institutes of 
        Health (NIH) has increased dramatically, from $40 million in 
        2001 to a proposed $226 million in 2009. With this NIH has 
        established 21 new research centers focused on nanomedicine and 
        cancer nanotechnology R&D. The range of biomedical applications 
        of nanotechnology under investigation is extremely broad, 
        spanning almost all of the NIH institutes. Widespread clinical 
        application of the results of this research is likely to take 
        many years, given the careful review and approval processes 
        needed for such applications. But we can cite a couple of 
        interesting examples that are nearing fruition in the cancer 
        and regenerative medicine arenas, as follows:

     Researchers at Northwestern University have developed 
            a diagnostic biobarcode assay based on nanotechnology that 
            is able to detect each of the three markers simultaneously 
            at concentrations multiple orders of magnitude below that 
            detectable by the standard immunoassay. The biobarcode 
            assay can simultaneously detect trace levels of multiple 
            biomarkers (including DNA and proteins) associated with 
            human cancers using oligonucleotide- and antibody-coated 
            gold nanoparticles. Nanoparticle-tagged oligonucleotide 
            biobarcodes have been developed to detect three cancer-
            related protein biomarkers: prostate specific antigen 
            (PSA); human chorionic gonadotrophin (HCG), a marker for 
            testicular cancer; and a-fetoprotein (AFP), a liver cancer 
            marker. The ability to detect low-levels of protein 
            biomarkers directly in serum in a multiplexed manner will 
            enable more powerful diagnostic methods to detect early-
            stage malignancy. The nanotechnology biobarcode assay is 
            being commercially developed now; so far the FDA has 
            cleared its use for two molecular diagnostic tests 
            associated with blood disorders.

     Another group at Northwestern has developed an 
            engineered nanomaterial that can be injected into damaged 
            spinal cords and could help prevent scars and encourage 
            damaged nerve fibers to grow. The liquid material contains 
            molecules that self-assemble into nanofibers, which act as 
            a scaffold on which nerve fibers grow. Researchers have 
            reported that treatment with the material restores function 
            to the hind legs of paralyzed mice. A spinoff company has 
            now been founded, with the objective of developing this 
            therapy for humans. Initial in vitro tests have shown no 
            apparent toxicity to human cells. The next step will be to 
            make a material that meets FDA standards for clinical 
            trials. This example is particularly interesting for 
            several reasons: (1) it represents a collaboration between 
            a materials scientist much of whose work was initially 
            funded by the National Science Foundation and a stem cell 
            biologist, working in a field with a strong history of NIH 
            funding. As such it is a sterling example of both 
            interdisciplinary collaboration and interagency 
            collaboration that has become a hallmark of the NNI. (2) We 
            have been hearing rumors of this work and seeing private 
            presentations on it for several years now. Only in the past 
            month were the results of this particular breakthrough 
            published in the open literature. As such, we think this 
            example is just the beginning of a flood of new biomedical 
            applications of nanotechnology that are likely to come to 
            light in coming years, as innovations make their way 
            through the long pipeline between initial conception, early 
            exploratory research, initial application experiments, in 
            vitro safety testing, in vivo animal model safety and 
            effectiveness testing, and finally to human clinical 
            trials. Given this long timeline and the large potential 
            payoffs of this type of research, it is understandable that 
            researchers are careful about when they publish results in 
            open literature.

   There are numerous examples of potential applications of 
        nanotechnology in energy production, conversion, storage, 
        transmission, and conservation. Just one of these examples 
        addressed in the recently released PCAST report concerns the 
        use of nanotechnology to enhance the efficiency and lower the 
        cost of converting energy in sunlight directly into 
        electricity, known as photovoltaics. Thin-film photovoltaic 
        technology has improved over the last decade to a point where 
        it can now convert sunlight to electricity as efficiently as 
        all but the most expensive silicon-based solar cells. New low-
        cost production methods could help make these thin-film cells 
        an important contributor to the Nation's energy needs. One 
        company that has received substantial funding from NNI 
        agencies, Nanosolar, Inc. is using printing presses instead of 
        vacuum deposition equipment to make solar panels based on a 
        semiconducting material called copper indium gallium diselenide 
        (CIGS). The presses deposit nanostructured ink, which is then 
        processed to create the light-absorbing nanoarchitecture at the 
        heart of the solar cell. Nanosolar has recently shipped its 
        first utility-scale panels.

    Senator Kerry. Thank you very much, Director Russell. We 
appreciate it.
    Director Robinson?

      STATEMENT OF ROBERT A. ROBINSON, MANAGING DIRECTOR,

               NATURAL RESOURCES AND ENVIRONMENT,

             U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Robinson. Thank you, Mr. Chairman, for this opportunity 
to briefly present GAO's work on this very important aspect of 
Federal nanotechnology research.
    I would like to note for the record that today I am sitting 
in for Anu Mittal, who directed the work on this project but is 
unable to be here today because she is undergoing treatment for 
a very serious illness.
    At the request of the full Committee and several other 
Members of the Congressional Nanotechnology Caucus, we examined 
how the NNI is addressing the potential environmental, health, 
and safety risks, so-called EHS risks, that may be associated 
with exposure to nanoscale materials.
    Nanotechnology has vast potential for truly 
transformational innovation in virtually every industry and 
hundreds of products common to consumers today and others that 
perhaps we can only dream of. Some of what seems to be possible 
can only be described by someone of my age as jaw-dropping.
    At the same time, the unique properties and microscale size 
of these materials raise questions about their risk to the 
human body and the environment whose answers are not fully 
known and where research is needed to fill the information 
gaps. In this context, the Committee asked us to examine: (a) 
the extent of Federal research on these risks in 2006 which was 
the latest year where data was available at the time of our 
review, (b) the reasonableness of Federal efforts to identify 
and prioritize research needs in this area, and (c) the 
effectiveness of Federal efforts to coordinate and collaborate 
on this research.
    As presented in the report that you have released today, 
here's what we found.
    First, in 2006, Federal agencies reported devoting about 3 
percent or about $38 million of the $1.3 billion in total 
Federal nanotechnology research funding to EHS risks.
    Our analysis, however, shows that this figure somewhat 
overstates the actual extent of EHS research. About 20 percent 
of the research that the agencies classified to us as being 
primarily focused on EHS actually dealt with using 
nanotechnology to address other kinds of environmental issues 
rather than on the risks associated with nanotechnology itself.
    This misclassification resulted mostly from agency 
confusion over how to characterize this kind of research in the 
existing reporting structure and how to apportion research 
funding that addressed multiple objectives at the same time.
    Given the relatively small size of research funding devoted 
to EHS issues and the differences of opinion about the 
appropriate percentage of nanotechnology funding that should be 
devoted to EHS risks, errors of this size are not 
inconsequential.
    Second, the process used by NNI and the Federal agencies to 
identify and prioritize EHS risks and the associated research 
needs appeared reasonable overall. The priorities were arrived 
at in a collaborative, iterative, and professional fashion, and 
the research actually conducted was generally consistent with 
agreed upon priorities.
    However, at the time of our review, the NNI had not yet 
completed its strategic EHS research plan. This plan, which has 
been released just a month or so ago, falls short of 
expectations on several levels.
    Third, coordination of EHS research, among the 25 agencies 
participating in NNI, has been generally effective. The 
agencies meet frequently to identify opportunities for 
collaboration, jointly sponsor research workshops, have 
detailed staff to each other, and share the sense that a common 
purpose, a stable group membership and mutual respect for each 
other's roles in an exciting mission has led to a satisfying 
and effective working relationship. relationship.
    While presenting a generally favorable picture of Federal 
nanotechnology research activities, we did make one 
recommendation to improve them. Specifically, we believe that 
to clearly understand the potential EHS risks and the gaps in 
ongoing research, it is essential to have consistent, accurate 
and complete information on the extent to which agency research 
is designed to address those risks.
    Transparency and credibility of the information presented 
is vitally important to ensure public confidence in the 
Government's efforts on this very important front.
    Right now, however, the inventory of projects identified as 
addressing these risks is not entirely accurate. To improve the 
accuracy of this inventory, we recommend that the guidance 
provided to agencies on how to report the focus of their 
research activities be improved.
    Mr. Chairman, let me close my prepared remarks here and 
we'd love to get into conversation.
    [The prepared statement of Mr. Robinson follows:]

 Prepared Statement of Robert A. Robinson, Managing Director, Natural 
    Resources and Environment, U.S. Government Accountability Office
    Mr. Chairman and Members of the Subcommittee:

    I am pleased to be here today to participate in your hearing on the 
future direction of the National Nanotechnology Initiative (NNI). As 
you know, the NNI was established in 2001 as a Federal, multiagency 
effort intended to accelerate the discovery, development, and 
deployment of nanoscale science, engineering, and technology to achieve 
economic benefits, enhance the quality of life, and promote national 
security. One of the key roles of the NNI is to coordinate the 
nanotechnology-related activities of 25 Federal agencies. These 
agencies include both those that fund nanoscale research as well as 
those that have a stake in the outcome of this research, such as 
agencies that regulate products containing nanomaterials. While the NNI 
is designed to facilitate intergovernmental cooperation and identify 
goals and priorities for nanotechnology research, it is not a research 
program. It has no funding or authority to dictate the nanotechnology 
research agenda for participating agencies or to ensure that adequate 
resources are available to achieve specific goals. Instead, 
participating agencies develop and fund their own nanotechnology 
research agendas, and in Fiscal Year 2006, 13 of the 25 agencies 
participating in the NNI allocated a total of about $1.3 billion from 
their appropriated budgets to nanotechnology research and development 
activities. Of this total in Fiscal Year 2006, the NNI reported that 
$37.7 million (or about 3 percent of the total) was used to fund 
research to study the potential environmental, health, and safety (EHS) 
risks that might result from exposure during the manufacture, use, and 
disposal or recycle of nanoscale materials. As you know, while the use 
of nanoscale materials holds much promise, the small size and unique 
properties of these materials raise questions about their potential EHS 
risks, and research is needed to fill current gaps in scientific 
information about their risks.
    At the request of the full committee and Members of the 
Congressional Nanotechnology Caucus, we just completed a report that is 
being released today on the NNI's and Federal agencies' efforts to 
study the potential environmental, health, and safety risks of 
nanotechnology.\1\ My testimony is based on the findings of this review 
and will cover the following three areas: (1) the extent to which 
selected research and regulatory agencies conducted research in Fiscal 
Year 2006 that primarily was focused on the potential EHS risks of 
nanotechnology; (2) the reasonableness of the processes that agencies 
and the NNI use to identify and prioritize Federal research on the 
potential EHS risks of nanotechnology; and (3) the effectiveness of the 
processes that agencies and the NNI use to coordinate their research. 
For our review, we collected data from five Federal agencies that 
provided 96 percent of Fiscal Year 2006 funding for EHS research--the 
Environmental Protection Agency (EPA), the National Institutes of 
Health (NIH), the National Institute for Occupational Safety and Health 
(NIOSH), the National Institute of Standards and Technology (NIST), and 
the National Science Foundation (NSF). We also contacted three 
regulatory agencies--the U.S. Consumer Product Safety Commission 
(CPSC), the Food and Drug Administration (FDA), and the Occupational 
Safety and Health Administration (OSHA)--that do not have specific 
research budgets to determine whether they conducted any research on 
their own relative to potential EHS risks. We conducted this 
performance audit from June 2007 to February 2008 in accordance with 
generally accepted government auditing standards. Those standards 
require that we plan and perform the audit to obtain sufficient, 
appropriate evidence to provide a reasonable basis for our finding and 
conclusions based on our audit objectives. We believe that the evidence 
obtained provides a reasonable basis for our findings and conclusions 
based on our audit objectives.
---------------------------------------------------------------------------
    \1\ GAO, Nanotechnology: Better Guidance Is Needed to Ensure 
Accurate Reporting of Federal Research Focused on Environmental, 
Health, and Safety Risks, GAO-08-402 (Washington, D.C.: Mar. 31, 2008).
---------------------------------------------------------------------------
    In summary we found the following:

   About 20 percent of the over $37 million in Fiscal Year 2006 
        research expenditures that the NNI reported as being primarily 
        focused on the EHS risks of nanotechnology cannot actually be 
        attributed to this purpose. We found that 22 of the 119 
        projects identified as EHS-related by EPA, NIH, NIOSH, NIST, 
        and NSF in Fiscal Year 2006 were not primarily related to 
        understanding the extent to which nanotechnology poses an EHS 
        risk. These 22 projects, funded by NSF and NIOSH, accounted for 
        about $7 million of the $37 million that the NNI reported as 
        being primarily focused on EHS risks. The focus of many of 
        these projects was to explore how nanotechnology could be used 
        to remediate environmental damage or to detect a variety of 
        hazards unrelated to nanotechnology. We determined that this 
        mischaracterization was the result of the current reporting 
        structure that does not allow these types of projects to be 
        easily categorized in another more appropriate category, and 
        also the lack of guidance for agencies on how to apportion 
        research funding across multiple topics, when appropriate. To 
        address this issue, we recommended that the Office of Science 
        and Technology Policy (OSTP), in consultation with the NNI and 
        the Office of Management and Budget (OMB), provide better 
        guidance to agencies regarding how to report research that is 
        primarily focused on understanding or addressing the EHS risks 
        of nanotechnology. In commenting on this report, OSTP asserted 
        that it already provides extensive guidance, but it agreed to 
        review the manner in which agencies respond to the current 
        guidance.

   In addition to the EHS funding totals reported by the NNI, 
        we found that Federal agencies conduct other EHS research that 
        is not captured in the NNI totals. This research was not 
        captured by the NNI because either the research was funded by 
        an agency not generally considered to be a research agency or 
        because the primary purpose of the research was not to study 
        EHS risks. Because the agencies that conduct this research do 
        not systematically track it as EHS-related research, we could 
        not establish the exact amount of Federal funding that is being 
        devoted to this additional EHS research.

   Federal agencies and the NNI were, at the time of our 
        review, in the process of identifying and prioritizing EHS risk 
        research needs; overall, we believe that the process they were 
        using was reasonable. For example, identification and 
        prioritization of EHS research needs was being done by the 
        agencies and the NNI collaboratively. The NNI was also engaged 
        in an iterative prioritization effort through its 
        Nanotechnology Environmental and Health Implications (NEHI) 
        working group. As a result of this effort, NEHI had identified 
        five general research categories that should be the focus of 
        Federal research efforts and five specific research priorities 
        under each general category. Our analysis of the 97 research 
        projects that were underway in Fiscal Year 2006 that were 
        primarily related to studying EHS risks found that the focus of 
        these projects was generally consistent with agency priorities 
        as well as NEHI's five general research categories. However, we 
        did find that, while agency funded research addressed each of 
        the five general research categories, it focused on the 
        priority needs within each category to varying degrees. As our 
        report was in production, NEHI released a new EHS research 
        strategy on February 13, 2008, which is intended to provide a 
        framework to help ensure that the highest priority EHS research 
        needs are met.

   Agency and NNI processes to coordinate activities related to 
        potential EHS risks of nanotechnology have been generally 
        effective. The NEHI working group has convened frequent 
        meetings that have helped agencies identify opportunities to 
        collaborate on EHS risk issues, such as joint sponsorship of 
        research and workshops to advance knowledge and facilitate 
        information-sharing among the agencies. These types of 
        exchanges, according to most agency officials we spoke with, 
        have helped advance knowledge and facilitated information-
        sharing among the agencies. In addition, NEHI has incorporated 
        several practices that we have previously identified as key to 
        enhancing and sustaining interagency collaborative efforts, 
        such as defining a common outcome and leveraging resources, but 
        it had not, at the time of our review, completed its 
        overarching strategy to help better align agencies' EHS 
        research efforts. Finally, all agency officials we spoke with 
        expressed satisfaction with the coordination and collaboration 
        on EHS risk research that has occurred through NEHI. They cited 
        several factors they believe contribute to the group's 
        effectiveness, including the stability of the working group 
        membership and the expertise and dedication of its members. 
        Furthermore, according to these officials, this stability, 
        combined with common research needs and general excitement 
        about the new science, has resulted in a collegial, productive 
        working environment.
Background
    Nanotechnology encompasses a wide range of innovations based on the 
understanding and control of matter at the scale of nanometers--the 
equivalent of one-billionth of a meter. To illustrate, a sheet of paper 
is about 100,000 nanometers thick and a human hair is about 80,000 
nanometers wide. At the nanoscale level, materials may exhibit 
electrical, biological, and other properties that differ significantly 
from the properties the same materials exhibit at a larger scale. 
Exploiting these differences in nanoscale materials has led to a range 
of commercial uses and holds the promise for innovations in virtually 
every industry from aerospace and energy to health care and 
agriculture. In 2006, an estimated $50 billion in products worldwide 
incorporated nanotechnology and this figure has been projected to grow 
to $2.6 trillion by 2014. One research institute estimates that over 
500 consumer products already available to consumers may contain 
nanoscale materials.
    The National Nanotechnology Initiative (NNI) was established in 
2001 as a Federal, multiagency effort intended to accelerate the 
discovery, development, and deployment of nanoscale science, 
engineering, and technology to achieve economic benefits, enhance the 
quality of life, and promote national security. Management of the NNI 
falls under the purview of the National Science and Technology Council 
(NSTC) that coordinates science and technology policy across the 
Federal Government. The NSTC is managed by the Director of the Office 
of Science and Technology Policy (OSTP), who also serves as the Science 
Advisor to the President. The NSTC's Committee on Technology 
established the Nanoscale Science, Engineering, and Technology (NSET) 
subcommittee to help coordinate, plan, and implement the NNI's 
activities across participating agencies. In 2003, the NSET 
subcommittee further established a Nanotechnology Environmental and 
Health Implications (NEHI) working group.\2\ The purpose of the NEHI 
working group, composed of representatives from 16 research and 
regulatory agencies, is to, among other things, coordinate agency 
efforts related to EHS risks of nanotechnology. Similar to the NNI, the 
NEHI working group has no authority to mandate research priorities or 
to ensure that agencies adequately fund particular research.
---------------------------------------------------------------------------
    \2\ As of December 2007, a total of four working groups exist 
within the NSET subcommittee: (1) Global Issues in Nanotechnology; (2) 
Nanotechnology Environmental and Health Implications; (3) 
Nanomanufacturing, Industry Liaison, and Innovation; and (4) 
Nanotechnology Public Engagement and Communications.
---------------------------------------------------------------------------
    In December 2003, Congress enacted legislation to establish a 
National Nanotechnology Program to coordinate Federal nanotechnology 
research and development.\3\ Among other things, the act directs the 
NSTC to establish goals and priorities for the program and to set up 
program component areas that reflect those goals and priorities. To 
implement these requirements, the NSTC has established a process to 
categorize research projects and activities undertaken by the various 
Federal agencies into seven areas. Six of the seven focus on the 
discovery, development, and deployment of nanotechnology, while the 
seventh relates to the societal dimensions of nanotechnology that 
include issues such as the EHS risks of nanotechnology.
---------------------------------------------------------------------------
    \3\ The 21st Century Nanotechnology Research and Development Act, 
Pub. L. 108-153 (2003).
---------------------------------------------------------------------------
    As part of the annual Federal budget process, agencies also report 
their research funding for each area to OMB. The NNI's annual 
Supplement to the President's Budget, prepared by the NSTC, includes 
EHS research figures from the agencies and a general description of the 
research conducted by the agencies in each of the areas. For reporting 
purposes, the NSET subcommittee has defined EHS research as efforts 
whose primary purpose is to understand and address potential risks to 
health and to the environment posed by nanotechnology. Eight of the 13 
agencies that funded nanotechnology research in Fiscal Year 2006 
reported having devoted some of those resources to research that had a 
primary focus on potential EHS risks.
    Under the NNI, each agency funds research and development projects 
that support its own mission as well as the NNI's goals. While agencies 
share information on their nanotechnology-related research goals with 
the NSET subcommittee and NEHI working group, each agency retains 
control over its decisions on the specific projects to fund. While the 
NNI was designed to facilitate intergovernmental cooperation and 
identify goals and priorities for nanotechnology research, it is not a 
research program. It has no funding or authority to dictate the 
nanotechnology research agenda for participating agencies.
    The NNI used its Fiscal Year 2000 strategic plan and its subsequent 
updates to delineate a strategy to support long-term nanoscale research 
and development, among other things. A key component of the 2000 plan 
was the identification of nine specific research and development 
areas--known as ``grand challenges''--that highlighted Federal research 
on applications of nanotechnology with the potential to realize 
significant economic, governmental, and societal benefits.
    In 2004, the NNI updated its strategic plan and described its goals 
as well as the investment strategy by which those goals were to be 
achieved. Consistent with the 21st Century Nanotechnology Research and 
Development Act, the NNI reorganized its major subject categories of 
research and development investment into program component areas (PCA) 
that cut across the interests and needs of the participating agencies. 
These seven areas replaced the nine grand challenges that the agencies 
had used to categorize their nanotechnology research. Six of the areas 
focus on the discovery, development, and deployment of nanotechnology. 
The seventh, societal dimensions, consists of two topics--research on 
environmental, health, and safety; and education and research on 
ethical, legal, and other societal aspects of nanotechnology.
    PCAs are intended to provide a means by which the NSET 
subcommittee, OSTP, OMB, Congress, and others may be informed of the 
relative Federal investment in these key areas. PCAs also provide a 
structure by which the agencies that fund research can better direct 
and coordinate their activities. In response to increased concerns 
about the potential EHS risks of nanotechnology, the NSET subcommittee 
and the agencies agreed in Fiscal Year 2005 to separately report their 
research funding for each of the two components of the societal 
dimensions PCA. The December 2007 update of the NNI's strategic plan 
reaffirmed the program's goals, identified steps to accomplish those 
goals, and formally divided the societal dimensions PCA into two PCAs--
''environment, health, and safety'' and ``education and societal 
dimensions.''
    Beginning with the development of the Fiscal Year 2005 Federal 
budget, agencies have worked with OMB to identify funding for nanoscale 
research that would be reflected in the NNI's annual Supplement to the 
President's Budget. OMB analysts reviewed aggregated, rather than 
project-level, data on research funding for each PCA to help ensure 
consistent reporting across the agencies. Agencies also relied on 
definitions of the PCAs developed by the NSET subcommittee to determine 
the appropriate area in which to report research funding. Neither NSET 
nor OMB provided guidance on whether or how to apportion funding for a 
single research project to more than one PCA, if appropriate. However, 
representatives from both NSET and OMB stressed that the agencies were 
not to report each research dollar more than once.
Almost One-Fifth of Reported EHS Research Projects Were Not Primarily 
        Focused on Studying the EHS Risks of Nanotechnology
    About 18 percent of the total research dollars reported by the 
agencies as being primarily focused on the study of nanotechnology-
related EHS risks in Fiscal Year 2006 cannot actually be attributed to 
this purpose. Specifically, we found that 22 of the 119 projects funded 
by five Federal agencies were not primarily related to studying EHS 
risks. These 22 projects accounted for about $7 million of the total 
that the NNI reported as supporting research primarily focused on EHS 
risks. Almost all of these projects--20 out of 22--were funded by NSF, 
with the two additional projects funded by NIOSH. We found that the 
primary purpose of many of these 22 projects was to explore ways to use 
nanotechnology to remediate environmental damage or to identify 
environmental, chemical, or biological hazards not related to 
nanotechnology. For example, some NSF-funded research explored the use 
of nanotechnology to improve water or gaseous filtration systems. Table 
1 shows our analysis of the nanotechnology research projects reported 
as being primarily focused on EHS risks.




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



 Table 1.--GAO Analysis of the Number and Dollar Value of Nanotechnology Research Projects Reported by Selected
        Agencies as Being Primarily Focused on Environmental, Health, and Safety Risks, Fiscal Year 2006
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Projects reported by agencies as being  primarily focused on EHS  Projects determined by  Projects determined by
                                                                    GAO to be primarily        GAO not to be
-----------------------------------------------------------------     focused on EHS       primarily  focused on
                                                                 ------------------------           EHS
                                                        Dollar                           -----------------------
                  Agency                     Number    Value a      Number      Dollar                  Dollar
                                                                                Value       Number      value
----------------------------------------------------------------------------------------------------------------
EPA                                              10         $3.6         10         $3.6          0           $0
----------------------------------------------------------------------------------------------------------------
NIH                                              18         $5.6         18         $5.6          0           $0
----------------------------------------------------------------------------------------------------------------
NIOSH                                            23         $4.3         21         $4.2          2         $0.1
----------------------------------------------------------------------------------------------------------------
NIST                                              2         $2.4          2         $2.4          0           $0
----------------------------------------------------------------------------------------------------------------
NSF                                              66        $21.1         46        $14.7         20         $6.4
----------------------------------------------------------------------------------------------------------------
Total                                           119          $37         97        $30.5         22         $6.5
----------------------------------------------------------------------------------------------------------------
Source: GAO analysis of agency obligations data.
a Figures differ slightly from those reported by the NNI in the Supplement to the President's FY2008 Budget due
  to rounding error or modifications made to the project-level data after they were reported by agencies to the
  NNI.

    We found that the miscategorization of these 22 projects resulted 
largely from a reporting structure for nanotechnology research that 
does not easily allow agencies to recognize projects that use 
nanotechnology to improve the environment or enhance the detection of 
environmental contaminants, and from the limited guidance available to 
the agencies on how to consistently report EHS research. From Fiscal 
Years 2001 to 2004, the NSET subcommittee categorized Federal research 
and development activities into nine categories, known as ``grand 
challenges,'' that included one focused on ``nanoscale processes for 
environmental improvement.'' Agencies initiated work on many of these 
22 projects under the grand challenges categorization scheme. Starting 
in Fiscal Year 2005, NSET adopted a new categorization scheme, based on 
PCAs, for agencies to report their nanotechnology research. The new 
scheme eliminated the research category of environmental improvement 
applications and asked agencies to report research designed to address 
or understand the risks associated with nanotechnology as part of the 
societal dimensions PCA.
    The new scheme shifted the focus from applications-oriented 
research to research focused on the EHS implications of nanotechnology. 
However, the new scheme had no way for agencies to categorize 
environmentally focused research that was underway. As a result, NSF 
and NIOSH characterized these projects as EHS focused for lack of a 
more closely related category to place them in, according to program 
managers. Furthermore, neither NSET nor OMB provided agencies guidance 
on how to apportion the dollars for a single project to more than one 
program component area, when appropriate. This is especially 
significant for broad, multiphase research projects, such as NSF's 
support to develop networks of research facilities. Of the five 
agencies we reviewed, only NSF apportioned funds for a single project 
to more than one PCA.
    In addition to research reported to the NNI as being primarily 
focused on the EHS risks of nanotechnology, some agencies conduct 
research that is not reflected in the EHS totals provided by the NNI 
either because they are not considered Federal research agencies or 
because the primary purpose of the research was not to study EHS risks. 
For example, some agencies conduct research that results in information 
highly relevant to EHS risks but that was not primarily directed at 
understanding or addressing those risks and therefore is not captured 
in the EHS total. This type of research provides information that is 
needed to understand and measure nanomaterials to ensure safe handling 
and protection against potential health or environmental hazards; 
however, such research is captured under other PCAs, such as 
instrumentation, metrology, and standards. Because the agencies that 
conduct this research do not systematically track it as EHS-related, we 
could not establish the exact amount of Federal funding that is being 
devoted to this additional EHS research.
Processes to Identify and Prioritize Needed EHS Research Appear 
        Reasonable and Are Ongoing but a Comprehensive Research 
        Strategy Has Not Yet Been Developed
    All eight agencies in our review have processes in place to 
identify and prioritize the research they need related to the potential 
EHS risks of nanotechnology. Most agencies have developed task forces 
or designated individuals to specifically consider nanotechnology 
issues and identify priorities, although the scope and exact purpose of 
these activities differ by agency. Once identified, agencies 
communicate their EHS research priorities to the public and to the 
research community in a variety of ways, including publication in 
agency documents that specifically address nanotechnology issues, 
agency strategic plans or budget documents, agency websites, and 
presentations at public conferences or workshops. We determined that 
each agency's nanotechnology research priorities generally reflected 
its mission. For example, the priorities identified by FDA and CPSC are 
largely focused on the detection and safety of nanoparticles in the 
commercial products they regulate. On the other hand, EHS research 
priorities identified by NSF reflect its broader mission to advance 
science in general, and include a more diverse range of priorities, 
such as the safety and transport of nanomaterials in the environment, 
and the safety of nanomaterials in the workplace.
    In addition to the efforts of individual agencies, the NSET 
subcommittee has engaged in an iterative prioritization process through 
its NEHI working group. Beginning in 2006, NEHI identified but did not 
prioritize five broad research categories and 75 more specific 
subcategories of needs where additional information was considered 
necessary to further evaluate the potential EHS risks of 
nanotechnology. NEHI obtained public input on its 2006 report and 
released another report in August 2007, in which it distilled the 
previous list of 75 unprioritized specific research needs into a set of 
five prioritized needs for each of the five general research 
categories. The NEHI working group has used these initial steps to 
identify the gaps between the needs and priorities it has identified 
and the research that agencies have underway. NEHI issued a report 
summarizing the results of this analysis in February 2008.
    Although a comprehensive research strategy for EHS research had not 
been finalized at the time of our review, the prioritization processes 
taking place within individual agencies and the NNI appeared to be 
reasonable. Numerous agency officials said their agency's EHS research 
priorities were generally reflected both in the NEHI working group's 
2006 research needs and 2007 research prioritization reports. Our 
comparison of agency nanotechnology priorities to the NNI's priorities 
corroborated these statements. Specifically, we found that all but one 
of the research priorities identified by individual agencies could be 
linked to one or more of the five general research categories. 
According to agency officials, the alignment of agency priorities with 
the general research categories is particularly beneficial to the 
regulatory agencies, such as CPSC and OSHA, which do not conduct their 
own research, but rely instead on research agencies for data to inform 
their regulatory decisions.
    In addition, we found that the primary purposes of agency projects 
underway in Fiscal Year 2006 were generally consistent with both agency 
priorities and the NEHI working group's research categories. Of these 
97 projects, 43 were focused on Nanomaterials and Human Health, 
including all 18 of the projects funded by NIH. EPA and NSF funded all 
25 projects related to Nanomaterials and the Environment. These two 
general research categories accounted for 70 percent of all projects 
focused on EHS risks.
    Furthermore, we determined that, while agency-funded research 
addressed each of the five general research categories, it focused on 
the priority needs within each category to varying degrees. 
Specifically, we found that the two highest-priority needs in each 
category were addressed only slightly more frequently than the two 
lowest-priority needs.
    Moreover, although the NEHI working group considered the five 
specific research priorities related to human health equally important, 
19 of the 43 projects focused on a single priority--''research to 
determine the mechanisms of interaction between nanomaterials and the 
body at the molecular, cellular, and tissular levels.'' Table 2 shows a 
summary of projects by agency and specific NEHI research priority.




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



 Table 2.--Research Primarily Focused on the Environmental, Health, and
  Safety Risks of Nanotechnology by Agency and Specific Nanotechnology
  Environmental and Health Implications Working Group Research Priority
------------------------------------------------------------------------
                                    EPA  NIH   NIOSH   NIST  NSF   Total
------------------------------------------------------------------------
Instrumentation, Metrology, and       0    0       1      2    8      11
 Analytical Methods
------------------------------------------------------------------------
1. Develop methods to detect                              1    7       8
 nanomaterials in biological
 matrices, the environment, and
 the workplace
------------------------------------------------------------------------
2. Understand how chemical and                                         0
 physical modifications affect the
 properties of nanomaterials
------------------------------------------------------------------------
3. Develop methods for                             1      1            2
 standardizing assessment of
 particle size, size distribution,
 shape, structure, and surface
 area
------------------------------------------------------------------------
4. Develop certified reference                                         0
 materials for chemical and
 physical characterization of
 nanomaterials
------------------------------------------------------------------------
5. Develop methods to characterize                             1       1
 a nanomaterial's spatio-chemical
 composition, purity, and
 heterogeneity
------------------------------------------------------------------------
Nanomaterials and Human Health        4   18      10      0   11      43
------------------------------------------------------------------------
1. Develop methods to quantify and    1    1       4           2       8
 characterize exposure to
 nanomaterials and characterize
 nanomaterials in biological
 matricesa
------------------------------------------------------------------------
2. Understand the absorption and      1    1                   2       4
 transport of nanomaterials
 throughout the human body a
------------------------------------------------------------------------
3. Establish the relationship              5       3           1       9
 between the properties of
 nanomaterials and uptake via the
 respiratory or digestive tracts
 or through the eyes or skin, and
 assess body burden a
------------------------------------------------------------------------
4. Determine the mechanisms of        1   10       3           5      19
 interaction between nanomaterials
 and the body at the molecular,
 cellular, and tissular levels a
------------------------------------------------------------------------
5. Identify or develop appropriate    1    1                   1       3
 in vitro and in vivo assays/
 models to predict in vivo human
 responses to nanomaterials
 exposure a
------------------------------------------------------------------------
Nanomaterials and the Environment     5    0       0      0   20      25
------------------------------------------------------------------------
1. Understand the effects of          1                        2       3
 engineered nanomaterials in
 individuals of a species and the
 applicability of testing schemes
 to measure effects
------------------------------------------------------------------------
2. Understand environmental                                    1       1
 exposures through identification
 of principle sources of exposure
 and exposure routes
------------------------------------------------------------------------
3. Evaluate abiotic and ecosystem-                             6       6
 wide effects
------------------------------------------------------------------------
4. Determine factors affecting the    2                        9      11
 environmental transport of
 nanomaterials
------------------------------------------------------------------------
5. Understand the transformation      2                        2       4
 of nanomaterials under different
 environmental conditions
------------------------------------------------------------------------
Health and Environmental Exposure     0    0       3      0    2       5
 Assessment
------------------------------------------------------------------------
1. Characterize exposures among                    2           1       3
 workers
------------------------------------------------------------------------
2. Identify population groups and                                      0
 environments exposed to
 engineered nanoscale materials
------------------------------------------------------------------------
3. Characterize exposure to the                                        0
 general population from
 industrial processes and
 industrial and consumer products
 containing nanomaterials
------------------------------------------------------------------------
4. Characterize health of exposed                                      0
 populations and environments
------------------------------------------------------------------------
5. Understand workplace processes                  1           1       2
 and factors that determine
 exposure to nanomaterials
------------------------------------------------------------------------
Risk Management Methods               1    0       7      0    5      13
------------------------------------------------------------------------
1. Understand and develop best                     4           2       6
 workplace practices, processes,
 and environmental exposure
 controls
------------------------------------------------------------------------
2. Examine product or material        1                        1       2
 life cycle to inform risk
 reduction decisions
------------------------------------------------------------------------
3. Develop risk characterization                   1           2       3
 information to determine and
 classify nanomaterials based on
 physical or chemical properties
------------------------------------------------------------------------
4. Develop nanomaterial-use and                                        0
 safety-incident trend information
 to help focus risk management
 efforts
------------------------------------------------------------------------
5. Develop specific risk                           2                   2
 communication approaches and
 materials
------------------------------------------------------------------------
Total                                10   18      21      2   46      97
------------------------------------------------------------------------
Source: GAO analysis of agency data.
a Priorities given equal weight.

Coordination Processes Have Fostered Interagency Collaboration and 
        Information-Sharing
    Agency and NNI processes to coordinate research and other 
activities related to the potential EHS risks of nanotechnology have 
been generally effective, and have resulted in numerous interagency 
collaborations. All eight agencies in our review have collaborated on 
multiple occasions with other NEHI-member agencies on activities 
related to the EHS risks of nanotechnology. These EHS-related 
activities are consistent with the expressed goals of the larger NNI--
to promote the integration of Federal efforts through communication, 
coordination, and collaboration. The NEHI working group is at the 
center of this effort.
    We found that regular NEHI working group meetings, augmented by 
informal discussions, have provided a venue for agencies to exchange 
information on a variety of topics associated with EHS risks, including 
their respective research needs and opportunities for collaborations. 
Interagency collaboration has taken many forms, including joint 
sponsorship of EHS-related research and workshops, the detailing of 
staff to other NEHI working group agencies, and various other general 
collaborations or memoranda of understanding.
    Furthermore, the NEHI working group has adopted a number of 
practices GAO has previously identified as essential to helping enhance 
and sustain collaboration among Federal agencies.\4\ For example, in 
2005 NEHI clearly defined its purpose and objectives and delineated 
roles and responsibilities for group members. Furthermore, 
collaboration through multiagency grant announcements and jointly 
sponsored workshops has served as a mechanism to leverage limited 
resources to achieve increased knowledge about potential EHS risks.
---------------------------------------------------------------------------
    \4\ GAO, Results-Oriented Government: Practices That Can Help 
Enhance and Sustain Collaboration among Federal Agencies, GAO-06-15 
(Washington, D.C.: Oct. 21, 2005).
---------------------------------------------------------------------------
    Finally, all agency officials we spoke with expressed satisfaction 
with their agency's participation in the NEHI working group, 
specifically, the coordination and collaboration on EHS risk research 
and other activities that have occurred as a result of their 
participation. Many officials described NEHI as unique among 
interagency efforts in terms of its effectiveness. Given limited 
resources, the development of ongoing relationships between agencies 
with different missions, but compatible nanotechnology research goals, 
is particularly important. NIH officials commented that their agency's 
collaboration with NIST to develop standard reference materials for 
nanoparticles may not have occurred as readily had it not been for 
regular NEHI meetings and workshops. In addition, NEHI has effectively 
brought together research and regulatory agencies, which has enhanced 
planning and coordination. Many officials noted that participation in 
NEHI has frequently given regulators the opportunity to become aware of 
and involved with research projects at a very early point in their 
development, which has resulted in research that better suits the needs 
of regulatory agencies.
    Many officials also cited the dedication of individual NEHI working 
group representatives, who participate in the working group in addition 
to their regular agency duties, as critical to the group's overall 
effectiveness. A number of the members have served on the body for 
several years, providing stability and continuity that contributes to a 
collegial and productive working atmosphere. In addition, because 
nanotechnology is relatively new with many unknowns, these officials 
said the agencies are excited about advancing knowledge about 
nanomaterials and contributing to the informational needs of both 
regulatory and research agencies. Furthermore, according to some 
officials, there is a shared sense among NEHI representatives of the 
need to apply lessons learned from the development of past 
technologies, such as genetically modified organisms, to help ensure 
the safe development and application of nanotechnology.
    In closing, Mr. Chairman, while nanotechnology is likely to affect 
many aspects of our daily lives in the future as novel drug delivery 
systems, improved energy storage capability, and stronger, lightweight 
materials are developed and made available, it is essential to consider 
the potential risks of this technology in concert with its potential 
benefits. Federal funding for studying the potential EHS risks of 
nanotechnology is critical to enhancing our understanding of these new 
materials, and we must have consistent, accurate, and complete 
information on the amount of agency funding that is being dedicated to 
this effort. However, this information is not currently available 
because the totals reported by the NNI include research that is more 
focused on uses for nanotechnology, rather than the risks it may pose. 
Furthermore, agencies currently have limited guidance on how to report 
projects with more than one research focus across program component 
areas, when appropriate. As a result, the inventory of projects 
designed to address these risks is inaccurate and cannot ensure that 
the highest-priority research needs are met.
    Mr. Chairman, this concludes my prepared statement. I would be 
happy to respond to any questions that you and other Members may have.

    Senator Kerry. Well, that's great. I'd like to pick up on 
it.
    Senator Stevens has to run in a few minutes. Do you want to 
ask or are you OK?
    Senator Stevens. I'm OK.
    Senator Kerry. OK. Thanks. Let me follow up on what you 
just said about the testimony. Maybe I can get you guys playing 
off each other a little bit.
    Director Robinson, you say that you found this process of 
prioritizing the research reasonable but you also found that it 
falls short of the expectations, and on your score, Director 
Russell, you say that the NNI Working Group has been 
comprehensive enough and we don't need something further. So 
there's a slight divergence here and we're trying to figure out 
where to go on that path.
    Can you elaborate, Director Robinson, on your views of the 
strategy document and why you don't think it provides 
sufficiently prioritized guidance, and then the second part of 
the question, how, because of the lack of sufficient guidance, 
that could have an impact on this discipline and on the future?
    Mr. Robinson. Yes, Senator. Again, the process itself, it's 
hard to argue with. I mean, the folks are working together 
quite well. They sat down. They hashed out priorities across 
their agencies. They arrived at a set of 25 needs. There 
doesn't seem to be a huge amount of contention that these 
encompass the most important research needs facing this 
subject.
    The document itself, I've got to tell you, the strategy 
paper itself is a little hard to follow. I mean, when you sit 
down to try to go through that, it's not easy to get through.
    But on one of the more important fronts, however, it 
doesn't lay out who's responsible for what, who's accountable 
for delivering what, and hold them responsible for delivering 
the research that they're supposed to do to add up to this 
collective whole. Secondarily, it lays out 25 or so priorities 
and essentially provides them equal weight.
    So it would be more helpful to know what is the most 
important of the most important in a true budget scarcity 
environment. Something has to be sacrificed.
    Senator Kerry. What's the impact of not knowing?
    Mr. Robinson. Well, at the end of the day, I don't think 
you can be absolutely certain or the public can be absolutely 
certain by looking at that document that the Federal Government 
has a full thorough systematic effort in place to ensure that 
nanotechnology risks are being fully and completely addressed 
and that----
    Senator Kerry. Can I stop you there? Let me stop you there.
    Director Russell, what do you say to that?
    Mr. Russell. So a couple of things.
    Senator Kerry. Can you pull the mike up a little?
    Mr. Russell. Sure. I've got to turn it on, too. A couple 
things. One is that there's no question that we can continue to 
improve the process by which we identify from a bottom-up 
approach which areas need to be researched and how much money 
we have to spend in each area.
    The strategic document, which I actually think is well put 
together, is fairly lengthy and quite specific, but it is not a 
roadmap, and I think that's maybe where there's a difference 
between what GAO is saying and what we're saying.
    The strategy is how we're going to move forward. I think 
what Director Robinson is suggesting is what they would love to 
see as an actual roadmap. That is something that we certainly 
can look at and try to figure out what makes the most sense 
going forward.
    One of the things that we have done is we've asked the 
National Research Council to actually review the strategic 
document and give us recommendations and so we're waiting for 
that review and----
    Senator Kerry. When will that be forthcoming?
    Mr. Russell. I don't know--March of next year is when we're 
going to get that.
    Senator Kerry. Not till next year?
    Mr. Russell. It takes the NRC awhile to actually--this was 
published--this document here, which we are discussing, was 
published in February of this year and then the NRC has a very 
specific series of reviews that it does which takes some time.
    Senator Kerry. Go ahead.
    Senator Stevens. I've got to go but I wanted to ask just 
two questions.
    Mr. Russell, I'm reminded of Norm Augustine's report that 
indicated that in India, they're producing 700,000 engineers 
and China 400,000 engineers and we're producing 70,000 
engineers.
    Now, do we have--how does the amount we're spending on 
nanotechnology compare to China and India?
    Mr. Russell. Well, we're spending more than both China and 
India on nanotechnology, although Asia, as a whole, is 
increasing and, roughly speaking, Asia's spending about the 
same amount now we are spending on nanotechnology. So Asia as a 
whole as opposed to those specific two countries.
    Senator Stevens. So our lack of educational activities for 
more people is not shorting us as far as our basic research in 
nanotechnology?
    Mr. Russell. Compared today to India and China, that's 
true. Now, I would assume, because China is spending more money 
generically on R&D and ramping up faster than we are over time 
on R&D, that at some point, they probably will end up spending 
more. So that's clearly something that we need to be cognizant 
of.
    Senator Stevens. I think you ought to give us annual 
reports on that.
    Mr. Robinson, let me ask you this. In terms of your report 
and this idea of transparency, do you believe that every one of 
these research projects ought to have a set-aside of money to 
go into the aspects of safety and health as related to the 
research project?
    Mr. Robinson. No, I wouldn't suggest that. My main point is 
that if we say we're spending X millions of dollars on EHS 
research, let's make sure that the money's actually going in 
that direction and that it will be transparent for what the 
actual purpose of the research is.
    Senator Stevens. Who is--are we supposed to have another 
agency look into the safety and health aspects of 
nanotechnology?
    Mr. Robinson. No, we don't call for that, Senator, no.
    Senator Stevens. You don't----
    Mr. Robinson. We didn't call for that. We didn't----
    Senator Stevens. Who's going to do it? That's what I'm 
saying.
    Mr. Robinson. Well, the NNI Program, I think, right now is 
doing a credible job of assembling the research needs and 
attacking most of them. I'm not sure----
    Senator Stevens. Including health and safety?
    Mr. Robinson. Short of saying how--whether the dollars are 
adequate, I would say the process that's used to arrive at and 
undertake the research that's to be undertaken certainly is not 
open to substantial challenge, I don't think.
    Senator Stevens. All right. Thank you.
    Senator Kerry. Yes, Mr. Russell?
    Mr. Russell. I was just going to jump in. I think the 
answer is that there are a number of different agencies that 
are all doing this research and when you put them all together 
as coordinated by the NNI, in the case of Fiscal Year 2009 
request, you get roughly $75 million.
    Senator Kerry. Why the resistance to doing what people 
would call a roadmap/comprehensive strategy? Thanks, Ted.
    Mr. Russell. I don't think there's--it's a matter of a 
resistance in terms of doing it.
    Senator Kerry. Why would there be the automatic instinct 
that everybody's got to know where to go here? I mean, this is 
the EHS concern is real.
    Mr. Russell. No, absolutely. Not only is it----
    Senator Kerry. Don't we want people in the public to have 
as much information and sense of where we're heading as 
possible?
    Mr. Russell. Yes, absolutely, and as I was saying, what has 
been done to date, every year the NNI has been putting out more 
detailed and more specific EHS reports and in this case just in 
February came up with a strategic plan.
    Creating a roadmap obviously is an additional step and an 
additional work activity and it's something that we can 
certainly look into doing. It is----
    Senator Kerry. Do you agree that it is the appropriate 
group to do it?
    Mr. Russell. The NNI? I think----
    Senator Kerry. Yes. NNI.
    Mr. Russell. So the NEHI, which is a subgroup of the 
Subcommittee that's responsible for dealing with the 
Nanotechnology Program is indeed the right working group to be 
working on these issues and has been very active in working on 
these issues. So absolutely.
    Senator Kerry. Fair enough. How effectively in your 
judgment, Mr. Russell, are we sharing and coordinating this 
effort with other countries?
    Mr. Russell. Actually, I think we're doing that well. As a 
matter of fact, I think we are doing more than almost all other 
countries, especially and specifically about EHS, but let me 
give you an example.
    Just this week, the OECD is holding a meeting on this 
specific issue. EPA is chairing that meeting. It's on 
Nanotechnology and specifically EHS Issues and so we're working 
very hard to coordinate with the rest of the world, not just on 
EHS, though, because EHS is just one issue with nano.
    Obviously one of the things we want to make sure is that we 
win the commercialization battle as well and there we're 
working very hard internationally on issues like standards 
where it's really critical that we end up with the world 
adopting standards that are beneficial to our companies just as 
much as they are good for the world in terms of new 
nanotechnology products.
    Senator Kerry. Now let me come to the structure of this 
thing. The Nanotechnology Research and Development Act 
originally called for a National Nanotechnology Advisory Panel 
to the President and to the whole NNI.
    President Bush fought for that authority to be put into the 
PCAST, the President's Council of Advisors on Science and 
Technology.
    My question to you is isn't their mandate so broad as a 
whole that it just doesn't have the kind of specific expertise 
and knowledge that you want with respect to the nanotechnology 
sector?
    Mr. Russell. Let me answer that in two ways. One is, one of 
the reasons the President very much wanted PCAST, which is the 
panel you just described, to advise him on nanotechnology is 
that he actually meets with PCAST on an ongoing basis.
    PCAST is made up of leading CEOs of tech companies and 
presidents of universities, very prestigious people. They 
actually have a group that advises them, what's called a TAG, 
an advisory group specific to nanotechnology. Those are 
nanotechnology scientists and so those nanotechnology 
scientists as a fairly large group of people are directly 
advising presidents of universities, the head of the National 
Academy of Engineers, for example, now soon to be our head of 
the Smithsonian, who is currently head of Georgia Tech, as well 
as venture capitalists and presidents of large corporations, 
who are on PCAST, and so really having PCAST review and speak 
to nano really helps in terms of its status within the 
policymaking process.
    So I think it's a very useful function to have PCAST doing 
that.
    Senator Kerry. Does it stifle it in any way? Does it cut it 
off?
    Mr. Russell. I don't think so. I think it has exactly the 
opposite effect.
    Senator Kerry. How would you say PCAST has guided and 
advised the NNI thus far?
    Mr. Russell. Well, it has actually very directly interacted 
with the NNI and directly given advice, written a report. It's 
done a very good report on the state of technology, 
nanotechnology, in terms of the U.S. and the rest of the world, 
which has been a very valuable document.
    Senator Kerry. The National Research Council's 2006 review 
suggested otherwise a little bit. Are you familiar with it?
    Mr. Russell. I am familiar with it. I haven't looked at 
that recently.
    Senator Kerry. They found that the NNI does not have the 
benefit of access to an independent standing technical advisory 
panel, even though there is. I'm quoting them, ``ongoing 
national need for such a body,'' and they recommended the 
establishment of an independent advisory panel with specific 
operational expertise in nanoscale science and engineering.
    Why wouldn't we want to follow that counsel?
    Mr. Russell. Because I think what you will lose by doing 
that--the way the system works now, and I really think it's 
been working very well, is you have that specific expertise, 
the expertise that the Academy is talking about which is part 
of what's called the TAG, which is the advisory council, that 
specific nanotechnology scientists, to PCAST.
    So you have a large number of nano experts talking directly 
to very well-respected people, like Norm Augustine, who are on 
PCAST. Having Norm Augustine and others like him talking to the 
President about nanotechnology really helps nano. I think we 
would lose a lot if we broke that chain.
    Senator Kerry. Mr. Robinson, do you want to comment?
    Mr. Robinson. Senator, this topic is a little bit beyond 
the scope of our initiative, so I wouldn't have any more to 
add.
    Senator Kerry. OK. That's fair. Let me ask either of you if 
you'd like to comment on this concept that has been suggested 
to the Committee that part of the problem with the way that the 
program is currently constituted is that the agencies don't 
have a clear sense of how to work together in order to maximize 
their budgets, maximize their resources, and make sure there's 
a clear cut government-wide strategy for forwarding 
nanotechnology research.
    Is there anything specific about the current structure that 
you think, as we think about the reauthorization, that ought to 
be changed? Either of you?
    Mr. Russell. I must say, and obviously I work with a lot of 
different types of interagency programs, and of the various 
programs that have many agencies involved and in this case we 
have 25 separate agencies, nano is one of the best coordinated 
programs that we have in the science arena, and I actually 
think the GAO report really echoes that and so I don't think--
you can always make improvements, no question, but I think we 
want to be really careful that we don't blow up what has really 
been a successful model and a long-term model.
    I mean, you know, we've now been with this model for 8 
years and under this model, we've seen a tripling of the 
budget. We've seen the establishment of a national coordinating 
office. We've seen the passage of legislation which this 
Committee put forward. So I think it's been a successful model.
    Mr. Robinson. One thing I would add to that is I would 
agree that, among my 35 years of doing this, this is one of the 
situations when we look at collaboration and where we'd have to 
say this is pretty good by Federal standards. Not the least of 
which, it is important to mention that research bodies and 
regulatory bodies are sort of working together, crossing normal 
sort of barriers and this is a real advantage to this 
particular operation.
    The thing that we would want to bring to the dance, 
however, is that at the end of the day, there's nobody ensuring 
that all the work that's supposed to be done is orchestrated in 
a systematic fashion to reach conclusion at the same point and 
address all the barriers and all the knowledge gaps that the 
public probably expects from its government; that it's going to 
protect itself from any potential unintended ``I Am Legend'' 
kind of consequences that I think some folks probably have in 
their minds.
    Senator Kerry. Thank you very much. Senator Thune?

                 STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    Senator Thune. Thank you, Mr. Chairman. I want to thank you 
for holding the hearing and thank both the panels that are 
testifying, one now and one later, for their testimony, and I 
think it's important that to keep our country competitive, we 
always push the boundaries of science in accordance with 
reasonable ethical standards and public safety measures.
    Nanotechnology is the frontier of the scientific community 
and the U.S. National Nanotechnology Initiative is an important 
part of fully actualizing the benefits of this very exciting 
technology, and as our witnesses, I think, are highlighting, 
nanotechnology is already playing a part, an important part in 
our everyday lives.
    Over the past 14 months, the number of nano-enabled 
consumer products has doubled. Consumers across the country are 
benefiting from this research, even if in many cases they're 
unaware of its origins.
    So thanks to the investment of public and private sector 
resources and the ingenuity of America's scientists, the 
influence and the benefits of nanotechnology are going to 
continue to lift the standard of living for Americans and for 
individuals around the world.
    As we move forward with reauthorizing the National 
Nanotechnology Initiative, I think we need to encourage greater 
focus on safety and greater transparency within the National 
Nanotechnology Initiative and I would also encourage my 
colleagues on the Committee to consider an increased role for 
renewable energy within the National Nanotechnology Initiative, 
and I again want to thank our witnesses for their testimony, 
and I look forward to working with my colleagues on the 
Committee as we strengthen this very important initiative.
    I guess I'd like to just ask a couple of questions, if I 
could, related to agricultural and energy issues. Agriculture 
is obviously very important in my state and advances in 
biotechnology have greatly increased the yields and efficiency 
of producing many of our crops, and I guess my question has to 
do with what advances do you see being made in nanotechnology 
in the agricultural field? How far off are these advances?
    Given the food shortages that are being caused by 
increasing demand for food abroad? Do you think we should be 
directing more funding toward the research of nanotechnology 
that will promote agriculture?
    Mr. Russell. I can talk to the energy field a little more 
easily than I can talk directly to agriculture. Clearly, there 
are benefits associated with nanotechnology, and I would think 
where you might see that particularly is in things like 
improved fertilizers and improved utilization of nano to create 
new types of crops.
    But let me give you an energy example that is real and that 
could make a huge difference for all of us and that's with 
lighting.
    Senator Thune. What's that?
    Mr. Russell. Lighting. Nano-enabled LEDs can be twice as 
efficient as fluorescent light bulbs and they have none of the 
real problems associated with them and if you look at overall 
energy consumption in this country, lighting is a massive piece 
of the puzzle and so there, you're really seeing where 
nanotechnology can make a truly significant difference.
    One of the problems with LEDs is getting white light and 
through nanotechnology, we can solve that problem and that 
would be a real increase in efficiency and a real decrease in 
our energy need for the country.
    Senator Thune. My assumption, based on the answer to that 
question, though, is there hasn't been a lot of thought given 
to how nanotechnology might impact crop production and 
biotechnology.
    Mr. Russell. I wouldn't actually say that. I'm just less 
familiar with that area, but I'm happy to get you examples for 
the record because there is work ongoing in that area as well.
    [The information referred to follows:]

    The NM supports extensive nanotechnology R&D in biotechnology and 
agriculture. For example, the USDA program on Nanoscale Science and 
Engineering for Agriculture and Food Systems aims to develop nanoscale 
detection and intervention technologies for enhancing food safety and 
agricultural biosecurity; effective delivery of micronutrients and 
bioactive ingredients in foods; and product identification, 
preservation, and tracking. The program also supports social science 
researches to address public perception and acceptance of 
nanotechnology applications in agriculture and food systems.
    The NMI is also supporting research using nano-fabricated surfaces 
to study how certain bacteria affect the water-transporting tissues in 
plants. The nanotechnology approach enables the study of the plants 
without destroying them, allowing collection of more and better data. 
Understanding how bacteria colonize these nano-structured vessels is 
leading to development of novel plant disease control strategies.

    Senator Thune. Coming back to your response about the 
energy issue, one of the greatest challenges, I think, that our 
country faces right now is this dangerous dependence that we 
have on foreign sources of energy and I also believe that 
ethanol made from crops and that sort of thing is an immediate 
solution to this problem and one that we need to continue to 
develop, and I think we have to commercialize cellulosic 
ethanol as soon as possible to meet that growing demand for 
fuel.
    There's a certain--there's a cap on what we can generate 
from corn. That varies. Most people think somewhere in the 15 
billion gallon range and we use about a 140 billion gallons of 
fuel in this country every year. So we're at about 7.5 billion 
gallons of production right now. So even if we max out what we 
can do in corn, we're still a long ways from having significant 
impact.
    On the other hand, when you start getting into the 
cellulosic field, which is advanced biofuels made from other 
types of biomass, switch grass, wood chips, those sorts of 
things, you can dramatically increase the amount of renewable 
energy that we can produce, and one of the technological 
obstacles to producing cellulosic ethanol is perfecting the 
enzymatic reactions that break down cellulose to usable sugars 
that can make ethanol.
    So I guess the question I have is, is there a role for 
nanotechnology in perfecting that process, and has the 
initiative focused on fuel production, in addition to some of 
the things that you referenced with regard to light?
    Mr. Russell. Again, Senator, I'm happy to get you for the 
record the specifics of what the Department of Energy is doing. 
The Department of Energy is one of the significant contributors 
to the Nano Initiative and there is absolutely no question that 
nanotechnology--one of the real breakthroughs by using nano is 
to reduce, for example, expensive catalysts associated with 
reactions and the reason for that is pretty clear.
    [The information referred to follows:]

    In order to convert cellulosic biomass (e.g., wood, switchgrass, 
corn stover, and wheat straw, and other agricultural and forest 
residues) into biofuels, complex enzymes must break down the cell walls 
of the feedstock plants. Optimization of these enzymes depends on a 
detailed understanding of how they interact with the plant cells at the 
nanoscale. As result, the three new DOE Bioenergy Research Centers are 
using many of the same tools used by nanoscience researchers for this 
aspect of their research, including a range of powerful new 
capabilities for imaging matter at the nanoscale. This nanoscale 
imaging is integrated into a systems approach that also utilizes a 
range of other tools, including rapid genomic sequencing and high-
throughput screening, metagenomics, and other techniques that are 
specific to genomics-based systems biology. Nanotechnology tools are 
helpful in investigating cell-wall physical and chemical properties, 
how they function, and how certain structural features inhibit or 
facilitate enzymatic interactions and subsequent conversion to sugar 
(for eventual conversion by microbes to ethanol as well as to 
hydrocarbons, including ``green'' gasoline, diesel, and even jet fuel). 
Specifically, researchers do not have a good understanding of the 
solution physics and thermodynamics that govern the protein-domain 
biological functions at the nanometer scale. The new tools of 
nanotechnology can help develop system-level descriptions of these 
processes, including the biomolecular mechanics that govern 
interactions at the cellulose surface. For example, DOE is using 
nanotechnology tools to help design enzymes (biocatalysts) that can 
more efficiently break down cellulosic feedstock into sugar, which can 
then be processed by microbes into ethanol and other fuels, including 
hydrocarbons. This research is being conducted by DOE's three Bioenergy 
Research Centers (http://genomicsgthenergy.govicenters/index.shtml), 
which are led by ORNL, LBNL, and Univ. of Wisconsin (in close 
collaboration with Michigan St.).

    Obviously when you can distribute chemicals at the 
nanoscale, you can dramatically reduce the amount of either the 
toxic or the expensive catalysts you need for individual 
reactions.
    So nanotechnology has generically proven very valuable in 
these kind of reactions in terms of making them cost effective, 
which obviously is a huge part of the equation when you're 
talking about cellulosic. It's not that we don't know how to do 
cellulosic, it's hard to do it at scale, it's hard to do it at 
a reasonable cost.
    Senator Thune. In your reference to--I know the DOE's real 
involved with this initiative which I think is a good thing 
because I think that the energy applications are very real and 
can be very meaningful.
    How would you rate the coordination among the Federal 
agencies that are involved with the effort? Are there things 
that can be done to improve that?
    Mr. Russell. Well, generically and this is largely because 
they've all bought into the effort itself, it's excellent. As I 
stated in my testimony, we have 25 agencies who are voluntarily 
participating and the reason that's important is they all think 
they're getting something out of it and since they think 
they're getting something out of it, they actually are actively 
participating in the program rather than simply being forced to 
participate.
    So for that very reason, actually the interaction is 
excellent and you don't see the kind of problems you see with 
coordination where agencies think that they're either being 
forced to do something or that another agency might be stealing 
their budget and so that's really a differentiator in this case 
and I think it's worked very well.
    Senator Thune. Thank you. Thank you, Mr. Chairman. Thank 
you for your testimony.
    Senator Kerry. Thank you very much, Senator Thune. Just a 
last question quickly. Tell America what you think. What are we 
looking at here? What do you see the future of nanotechnology 
conceivably providing? Are there areas where you see the most 
impact, perhaps the products and types of things that will be 
most exciting to Americans?
    Mr. Russell. Well, I think there will be a variety of areas 
and that's one of the wonderful things about nanotechnology 
because it really crosscuts almost all the areas you can 
imagine in terms of commercializable products.
    Clearly, today, biomedical is an amazing and a growing 
field. Just today in the Washington Post, in the Business 
section, they had a very interesting article about cancer 
fighting drugs that can be targeted through nanoparticles 
directly at just the cancer.
    You're seeing similar breakthroughs with replacing bones, 
making bone screws out of actual bone, and other advances in 
the biomedical field, and in other areas, like coatings, there 
is tremendous current work going on where you're seeing much 
stronger and better and longer-lasting coatings.
    Also in the environmental field, and this goes to GAO's 
point that about $7 million of pro-environment research was 
categorized as environmental impacts, nanotechnology, because 
it can reduce the waste stream, because we can use less of 
dangerous products, not just expensive products, in terms of 
how we manufacture things can make a real difference in terms 
of the amount of waste that's produced that's produced when we 
are producing things.
    So I think those are some of the many areas you're going to 
see breakthroughs. The other is in materials and having 
stronger, lighter materials which again saves energy and allows 
us to do all sorts of interesting things is clearly an area 
where nanotechnology has really taken off.
    Mr. Robinson. And I would agree, you know, beyond the 
biomedical front, obviously the energy potential, if you can 
develop these nano-based thin photovoltaics that essentially 
can be incorporated into windows, paints, roofs that make every 
house its own energy generator, I mean phenomenal potential 
there.
    But referencing back to Senator Thune's point, one of the 
things that we want to make sure in our work which was indeed 
concentrated on EHS issues, we want to make sure that we don't 
have a repeat similar to biotech crops where the public's 
confidence or at least other potential buyers' confidence was 
shaken and it damaged our ability to enter the marketplace and 
that is sort of at the root of this effort.
    We need to make sure that everything's aboveboard, 
transparent and, as best we can determine, all the risks are 
identified and attacked in the most systematic efficient way 
possible, and that's at the root of our testimony today.
    Senator Kerry. Well, I appreciate it. We appreciate your 
testimony today. I'm going to leave the record open for a 
couple of weeks in the event any other colleagues have any 
questions they want to submit in writing, but we thank you for 
coming today. Thank you for the analysis. Thank you, Director 
Russell, for your help in understanding this as we go forward.
    Mr. Russell. Thank you, Mr. Chairman.
    Senator Kerry. Could we ask for the second panel to come 
forward right away and we'll get started? Appreciate that.
    Mr. Matthew Nordan, the President of Lux Research, 
Incorporated; Mr. David Rejeski, Director, Foresight and 
Governance Project, Project on Emerging Nanotechnologies, 
Woodrow Wilson Center; Dr. P. Lee Ferguson, Assistant 
Professor, Department of Chemistry and Biochemistry, University 
of South Carolina; Dr. Anita Goel, Nanobiosym, Incorporated; 
and Dr. James Heath, Nanosystems Biology Cancer Center at the 
California Institute of Technology.
    We welcome you all. Thank you for being here. Why don't we 
just begin with you, Mr. Nordan? We'll run right down the line 
here and we welcome your testimonies. Again, all your 
testimonies will be placed in the record in full. If you could 
summarize in 5 minutes, that would be great.

          STATEMENT OF MATTHEW M. NORDAN, PRESIDENT, 
                       LUX RESEARCH, INC.

    Mr. Nordan. Good afternoon, Mr. Chairman. Lux Research 
advises corporations and investors on the unique perspective--
--
    Senator Kerry. Advises about the unique perspectives of 
nanotechnology?
    Mr. Nordan. Commercialization.
    Senator Kerry. Commercialization.
    Mr. Nordan. On the basic measure of scientific output, the 
NNI has been a great success. The $7.2 billion that it has 
channeled since launch has funded prodigious research in areas 
ranging from noninvasive cancer therapies to high-efficiency 
solar panels, but more than this, the NNI has catalyzed a 
virtuous cycle of innovation.
    The NNI has excited corporate interest in nanotech. It 
helped spark $2.4 billion in private R&D spending on the topic 
last year which exceeded government funding by 23 percent. 
Stimulated by the NNI, venture capitalists have opened their 
checkbooks. Last year, VC funding for U.S.-based nanotech 
startups totaled $632 million. That's four times the figure in 
the year before the NNI, and finally, NNI-funded initiatives 
have sparked new enthusiasm about the physical sciences broadly 
among students, from the postgraduate level down to high 
school.
    Nanotechnology is now having a significant commercial 
impact. Because nanotech is a toolkit that's being deployed 
behind the scenes in virtually every manufacturing industry, it 
can seem invisible. There's an all-too-commonly held 
misperception that all we have to show for our nanotech funding 
is stain-resistant pants but this view is dead wrong.
    From the billions of dollars in nano-enabled 
pharmaceuticals sold last year by the likes of Abbott to the 
nanocomposites in coatings, the chip in millions of vehicles 
from General Motors, nanotech is on track to exceed my firm's 
projection of enabling $2.6 trillion in goods sold by 2014, 
about 15 percent of manufacturing output.
    Nanotech is also creating new companies and new jobs. In my 
home state of Massachusetts, the Arsenal Complex in the City of 
Watertown was 750,000 square feet of empty crumbling space in 
the mid 1990s, but now its biggest tenant is A1-2-3 Systems 
which manufactures high-performance batteries with nano-
structured electrodes based on research by Yet Ming-Chiang at 
MIT, precisely the type of work that the NNI funds. In four 
short years, A1-2-3 has gone from a few dozen employees to more 
than 1,000 and it's helped to shift the center of battery 
innovation from East Asia to the U.S.
    Now my company conducts an annual assessment of 
international competitiveness in nanotech. We rank 19 nations 
worldwide. On an absolute basis, the U.S. remains the world 
leader, but the U.S. does not lead and not by a long stretch 
when the size of our economy is taken into account.
    For instance, when you look at government funding on an 
absolute basis, the U.S. topped the charts last year, but when 
the same figures are considered on a per capita basis at 
purchasing power parity, the U.S. takes eighth place with 
funding half that of Taiwan and behind Germany, Sweden and 
France.
    Other nations are gaining rapidly. Nanotech funding is 
growing in the EU at twice our rate. Russia recently funded a 
state nanotechnology corporation with $5 billion of public 
financing and the citation rate of nanotech journal articles in 
China, which is a measure of their quality, has doubled in the 
last decade.
    Now with these facts in mind, the NNI should certainly be 
reauthorized but as nanotech shifts from discovery to 
commercialization, change is required. Most of the changes that 
will help transition NNI-funded research to market really have 
nothing to do with nanotechnology in particular. They address 
broader issues. This should come as no surprise given 
nanotech's diversity and breadth. For example, rapidly growing 
companies need skilled human capital. This means major new 
investment in science and technology training for U.S. 
students, as Senator Stevens referred to, but it also requires 
easing the visa process for foreign nationals and expanding the 
H1V program.
    Recall A1-2-3 Systems. Had Yet Ming-Chiang returned to his 
native country, its 1,000 employees might well be in Taiwan. 
Start-ups that want to access public markets face immense 
administrative costs to comply with regulations like Sarbanes-
Oxley. Reducing these costs will unshackle them. We should note 
that of 14 nanotech startups that have gone public to date, 
most of them have done so on foreign exchanges where the cost 
of doing business is much lower.
    Finally, Congress can introduce financial mechanisms that 
help small companies collaborate with big ones. This is 
particularly important in nanotech by, for example, enabling 
small firms to transfer their net operating losses to corporate 
partners.
    There are, however, a number of smaller changes specific to 
nanotech that are also necessary. I'll focus on two. First, a 
reauthorized NNI should fund not just basic research but also 
precompetitive R&D into nanomaterials application development 
and manufacturing scale-up.
    The Department of Energy's Nano Manufacturing Initiative is 
a model case study for this.
    Second, a reauthorized NNI must address potential 
environmental health and safety risks as we've discussed much 
more aggressively, bringing regulatory clarity to companies 
that are begging for it and presenting a comprehensive 
interagency roadmap for EHS research.
    I appreciate your inviting me here to speak. I'm confident 
that with your informed decisions the next 7 years of the NNI 
will be even brighter than the first seven.
    I'm pleased to answer any questions.
    [The prepared statement of Mr. Nordan follows:]

 Prepared Statement of Matthew M. Nordan, President, Lux Research, Inc.
    The National Nanotechnology Initiative (NNI) is a great success; it 
has not only funded prodigious fundamental research, but has also 
catalyzed a virtuous cycle of innovation manifested in corporate R&D 
and venture capital. The landscape is different today than when the NNI 
commenced in 2001, however. Nanotech's discovery phase has given way to 
commercialization--tens of billions of dollars worth of products now 
incorporate nanotech--and other nations are eroding the U.S.'s dominant 
position. As the NNI is reauthorized, its focus should shift to 
application development and manufacturing scale-up--and its approach to 
environmental, health, and safety (EHS) issues must be overhauled.
The NNI Has Catalyzed a Virtuous Cycle of Innovation
    Nanotechnology is the purposeful engineering of matter at scales of 
less than 100 nanometers (nm) to achieve size-dependent properties and 
functions. Nanotech is not a new industry or market, but rather an 
enabling set of technologies that impact a wide variety of industries 
through a nanotech value chain. This value chain starts with 
nanomaterials like carbon nanotubes and dendrimers, which are 
incorporated into intermediate products like memory chips and drug 
delivery systems, which are in turn used to make enhanced final goods 
like mobile phones and cancer therapies (see Figure 1). Lux Research 
projects that new, emerging nanotechnology applications will affect 
nearly every type of manufactured product through the middle of the 
next decade, becoming incorporated into 15 percent of global 
manufacturing output totaling $2.6 trillion in 2014 (see Figures 2 and 
3).\1\
---------------------------------------------------------------------------
    \1\ Source: October 2004 Lux Research report ``Sizing 
Nanotechnology's Value Chain.''






    Introduced in 2001 and signed into law in 2003, the U.S. National 
Nanotechnology Initiative is the Federal Government's coordinating 
program for publicly-funded nanotechnology research, which has inspired 
similar efforts in countries worldwide from Germany to South Korea. By 
the core measure of scientific output, the NNI has been a great 
success--U.S. scientists have published 55,661 journal articles on 
nanoscale science and engineering since 2001, 27 percent of the world's 
total. But in addition to this, the very presence of the NNI has 
---------------------------------------------------------------------------
catalyzed a virtuous cycle of innovation, manifested in:

   Corporate R&D spending. Large U.S. corporations from GE to 
        Motorola spent $2.4 billion in nanotechnology R&D in 2007, up 
        22 percent from 2006 and 557 percent from 2000, the year before 
        the NNI's introduction. The 2007 figure was 23 percent higher 
        than U.S. Government nanotechnology funding at the Federal and 
        state level combined.\2\ These efforts include in-house 
        research like GE's Nanotechnology Advanced Technology Program, 
        broad collaborations like Cabot Corporation's Fine Particle 
        Network, and joint ventures like DA Nanomaterials, created by 
        DuPont and Air Products. Without the NNI as a widely-publicized 
        focusing mechanism for nanotechnology research, it's unlikely 
        that this intense corporate focus on nanoscale science and 
        engineering would have materialized.
---------------------------------------------------------------------------
    \2\ Source: 2007 Lux Research reference study ``The Nanotech 
Report, 5th Edition.''
---------------------------------------------------------------------------
   Venture capital (VC) funding. Venture capitalists are always 
        on the lookout for compelling investment themes, as well as 
        non-dilutive sources of financing that can help sustain the 
        companies they invest in through notoriously rocky early 
        stages. The NNI has provided both, serving as a validator that 
        has helped open VCs' wallets to materials science investments 
        in a fashion never before seen. In 2007 VC firms put $632 
        million into U.S.-based nanotech start-ups in 2007, more than 
        four times the figure in the year before the NNI was initiated 
        (see Figure 4).\3\
---------------------------------------------------------------------------
    \3\ Source: March 2008 Lux Research report ``How Venture 
Capitalists Are Misplaying Nanotech.''


   New companies and new jobs. Consider A123Systems, which uses 
        nanostructured lithium iron phosphate electrodes to make 
        advanced batteries now being evaluated for use in electric 
        vehicles like GM's Chevy Volt. In the mid-1990s, the Arsenal 
        complex in the City of Watertown, Massachusetts was 750,000 
        square feet of empty, crumbling space. Now, A123Systems is its 
        biggest tenant, commercializing battery devices based on 
        research by Yet-Ming Chiang at MIT--precisely the type of 
        research that the NNI funds. In just 4 years, A123 has gone 
        from a few dozen employees to more than 1,000--and helped to 
        shift the center of battery innovation from east Asia to the 
        United States.
The Nanotech Landscape Is Very Different Today than When the NNI 
        Launched
    When the NNI took shape in 2001, nanotechnology activity focused on 
early-stage laboratory research with little commercial impact, and the 
U.S. was alone in the world in having a nationwide coordinating program 
for nanotech. Today, both factors have changed. Nanotechnology has 
shifted from its discovery phase into its commercialization phase--and 
at the same time, the dominant competitive position of the United 
States has been eroded by other nations.
Nanotech Commercialization is Eclipsing Discovery
    In the last 7 years, emerging nanotechnology has increasingly 
become a fact of life and of business, as the technology has shifted 
from an era of discovery to one of commercialization. In this fashion, 
nanotechnology follows the example of other world-changing technologies 
like polymer science and biotechnology. For these emerging 
technologies, everything starts with the discovery phase--a period of 
basic research and application development--which has a characteristic 
time span, give or take a bit, of about 20 years. It's then that a 
tipping point gets reached, triggering the commercialization phase--
where the technology's long-term impact is manifested (see Figure 5).


    For instance, plastics' discovery phase started in the 1920s, when 
scientist Wallace Corrothers at DuPont began work on synthesizing 
nylon. In 1937, he was issued his patent on the material. Two years 
afterward--about 20 years after discovery began--American women bought 
64 million pairs of nylon stockings; once the commercialization 
threshold was reached, it took off fast. In biotechnology, James Watson 
and Francis Crick characterized DNA in 1953, and 20 years later, right 
on cue, Stanley Cohen and Robert Boyer applied genetic engineering 
techniques to synthesize insulin for the first time. Genentech, the 
first biotech start-up, was founded in 1976, and commercialization has 
since skyrocketed: In 2006, revenues of publicly-traded biotech 
companies topped $65 billion. In information technology, Vint Cerf and 
Robert Kahn proposed the Internet protocol in 1974. The number of 
Internet users grew gradually to the single-digit millions up through 
1993, but began to skyrocket in about 1994, the year Netscape's browser 
was released--reinventing communication and commerce in the process.
    Nanotech's discovery phase started in the mid-1980s with the 
invention of scanning probe microscopes that enabled scientists to 
visualize matter at the nanoscale for the first time. Innovations have 
reached the market in electronics, as A123Systems' nanostructured 
battery electrodes appeared on store shelves in Black & Decker's Dewalt 
line of power tools; in healthcare, as nanoparticulate drug 
reformulations like Abbott's cholesterol drug Tricor have found their 
way into doctors' repertoire; and in materials and manufacturing, as 
PPG's coatings have improved the performance of millions of 
automobiles. According to our research, approximately $88 billion in 
manufacturing output worldwide incorporated emerging nanotechnology in 
2007.
The Dominant Position of the U.S. Is Being Eroded
    Each year, Lux Research conducts an annual assessment of 
international competitiveness in nanotechnology, ranking 19 nations 
worldwide on their nanotechnology activity and technology 
commercialization strength. On an absolute basis, the U.S. remains the 
world leader in nanotech. Two factors, however, should give U.S. 
policymakers pause:

   The U.S. does not lead on a relative basis. Relative to our 
        population and the size of our economy, the U.S. pales in 
        comparison to other countries when it comes to nanotechnology 
        activity. For example, when government funding is considered on 
        an absolute basis, the U.S. topped the charts in 2007. However, 
        when the same figures are considered on a per capita basis at 
        purchasing power parity, the U.S. takes eighth place, with 
        funding half that of Taiwan, and behind Germany, Sweden, and 
        France (see Figure 6).\4\
---------------------------------------------------------------------------
    \4\ Source: December 2007 Lux Research report ``International 
Activity Drives Nanotechnology Forward.''


   Other countries are catching up. Since we began performing 
        our international competitiveness rankings in 2005, the 
        position of the U.S. has remained static while other countries 
        have vaulted upwards in their nanotechnology activity (see 
        Figure 7). For example, nanotech funding is growing in the EU 
        at twice the rate in the United States, putting the EU on track 
        to claim the mantle of nanotechnology leadership due to a 
        renewed focus on nanoscale science and engineering in the 7th 
        Framework Programme for research. Russia recently funded a 
        state nanotechnology corporation with $5 billion of public 
        financing. And scientists in China published nearly as many 
        scientific journal articles on nanoscale science and 
        engineering in 2007 as those in the U.S. did, at 7,282 to 7,528 
        (see Figure 8). While the quality of these publications has 
        been suspect in the past, the citation rate of nanotech journal 
        articles from China--a measure of their quality--has doubled in 
        the last decade.\5\
---------------------------------------------------------------------------
    \5\ Source: Science Citation Index as of December 10, 2007; search 
terms (country), (year), and (quantum dot OR nanostruc* OR nanopartic* 
OR nanotub* OR fulleren* OR nanomaterial* OR nanofib* OR nanotech* OR 
nanocryst* OR nanocomposit* OR nanohorn* OR nanowir* OR nanobel* OR 
nanopor* OR dendrimer* OR nanolith* OR nanoimp* OR nano-imp* OR dip-
pen).




A Commercially-Dominated Landscape Requires Change to Unlock the NNI's 
        Value
    Clearly, the NNI should be reauthorized. But in the context of 
growing nanotech commercialization and increased international 
competitiveness, the onus is on Congress to eliminate roadblocks to 
market introduction for nanotechnology applications. Most of these 
changes are not specific to nanotech, although a few key ones are.
Nanotech's Pervasiveness Means that Most Required Changes are General
    Many of the changes that will help transition NNI-funded research 
to market have nothing to do with nanotechnology specifically, but 
address broader issues in technology commercialization. Given 
nanotechnology's diversity, and the breadth of product categories that 
it touches, this is to be expected: As goes technology in general, so 
goes nanotech. These changes include:

   Attracting U.S. students to science and engineering, and 
        retaining foreign ones. Funding for nanotechnology R&D will 
        amount to nothing without a steady stream of trained scientists 
        and engineers entering the work force. The U.S. should 
        strengthen programs designed to inspire students with wonder 
        for the physical sciences in K-12 and undergraduate education 
        to nurture homegrown talent. But it should also reconsider the 
        effect of visa tightening on the inflow of foreign science and 
        technology graduate students, and expands H1-B visa programs to 
        allow students that have earned advanced degrees in science and 
        engineering in the U.S. to remain here--rather than 
        repatriating taking with them the skills they acquired in the 
        U.S. The lesson of A123Systems is instructive: Had Yet Ming-
        Chiang returned to his native country, its 1,000 employees 
        would likely be in Taiwan.

   Reducing the cost of doing business for start-ups seeking 
        public markets. Start-up companies looking to make initial 
        public offerings (IPOs) on the public markets face immense 
        administrative costs to comply with regulations such as 
        Sarbanes-Oxley. Easing these burdens will unshackle them. It's 
        important to note that of the 14 nanotech start-ups that have 
        gone public, most have done so on foreign exchanges where the 
        cost of doing business is lower.

   Introducing financial mechanisms to encourage collaboration 
        between small and large firms. Nanotechnology commercialization 
        has followed a pattern similar to biotech, in which small, 
        innovative companies develop breakthrough technologies that 
        incumbent corporations bring to market: Silver nanoparticle 
        antimicrobial company Nucryst Pharmaceuticals relied on wound 
        care dressing maker Smith & Nephew to get to market, while 
        A123Systems found its partner in Black & Decker. Congress can 
        grease the wheels of nanotechnology commercialization by 
        creating financial mechanisms that help small firms to 
        collaborate effectively with large ones. One example of such a 
        measure would be enabling small companies to transfer their net 
        operating losses to their corporate partners--allowing those 
        partners to reap the tax benefits of research investments, 
        which the loss-making smaller companies can't claim.
A Few Nanotech-Specific Changes Are Necessary
    In addition to these general reforms, a smaller number of changes 
specific to nanotech are also required. There are two specific actions 
we think Congress should take now:

   Shift some of NNI's focus to application development and 
        manufacturing scale-up. A reauthorized NNI should focus on not 
        just on basic research, but also on precompetitive R&D into 
        nanomaterials application development and manufacturing scale-
        up. Currently the technical challenges that are limiting 
        nanotech commercialization are not as much in synthesizing 
        nanomaterials or understanding their fundamental properties as 
        in learning how to integrate them into products and 
        manufacturing them economically in large volumes. The 
        Department of Energy's Nanomanufacturing initiative, run out of 
        its Industrial Technology Program, is a model case study--it 
        aims to introduce shared Nanomanufacturing centers as pilot 
        facilities on the model of the NNI's existing user centers for 
        nanoscale analytical equipment.

   Take a completely different approach to environmental, 
        health, and safety (EHS) issues. In our work with companies 
        looking to take advantage of nanotech innovation, the single 
        concern that comes up more than any other is potential EHS 
        risks of nanomaterials. While it's of course incumbent on 
        companies developing nano-enabled products to test their own 
        products to ensure safety, there's an important role for 
        government to play in resolving these concerns--by funding 
        basic research on nanomaterials EHS risk that no individual 
        firm can afford, and by establishing clear regulatory 
        guidelines for companies working with nanomaterials.

    On the first point, the NNI should be generously funding basic 
        research on the EHS risks of nanomaterials--just as NNI-funded 
        research on nanoscience has supported deployment of real-world 
        nanotech applications, the results of NNI-funded EHS work would 
        help companies complete their own EHS evaluations. 
        Unfortunately, funding levels remain too low to have the 
        desired impact, and, even more critically, the NNI has never 
        effectively addressed EHS issues surrounding nanotech with a 
        comprehensive, interagency plan for required EHS research. The 
        Nanotechnology Environmental and Health Implications (NEHI) 
        Working Group report on EHS issues has not filled this gap--it 
        fails to prioritize specific materials and applications for 
        research, avoiding the tradeoffs that are inherent in any 
        meaningful strategy--and the EPA's internal review of its own 
        nanomaterials EHS activities, by definition, does not cross 
        agencies. This lack of coordination is hampering development, 
        and must change. The best way to move forward on this front 
        would be to execute the nanomaterials EHS strategy by the 
        National Academies' Board on Environmental Studies and 
        Toxicology--Congress has already appropriated funds for this 
        study, but the work has not yet been started.

    Second, ambiguity surrounding how nanomaterials will be regulated 
        must be dispelled. It's still often not clear how current 
        regulations apply to nanoparticles or whether and when agencies 
        will issue new ones--leaving firms that work with nanomaterials 
        confused about how to plan for regulatory rulings. The 
        companies we speak with are actually eager for appropriate 
        regulatory guidance about nanomaterials, to ensure a level 
        playing field and to help them guarantee the safety of workers, 
        consumers, and the environment. While companies are generally 
        pleased about how the EPA, for example, has communicated with 
        them so far, they're also frustrated by how slow those agencies 
        have been to set specific guidance, as witnessed by the glacial 
        pace of the EPA's voluntary Nanoscale Materials Stewardship 
        Program. Seven years after the NNI's launch, it's still unclear 
        to most commercial entities when and how the materials they 
        work with will be treated under the EPA's Toxic Substances 
        Control Act--forming a real commercialization gating factor.

    At Lux Research, we applaud the efforts that have taken place so 
far under the National Nanotechnology Initiative, which have made the 
U.S. a world leader in nanotechnology and are bringing real economic 
benefits to our Nation. We're confident that a renewed NNI, with 
adjustments like those outlined above, will increase these benefits--
and enable nanotechnology to help address the challenges the country 
faces in combating disease, moving toward energy independence, and 
sustaining economic growth.

    Senator Kerry. Thank you very much, Mr. Nordan. Very 
helpful.
    Mr. Rejeski?

        STATEMENT OF DAVID REJESKI, DIRECTOR, PROJECT ON

           EMERGING NANOTECHNOLOGIES, WOODROW WILSON

               INTERNATIONAL CENTER FOR SCHOLARS

    Mr. Rejeski. Chairman Kerry, I'd like to thank you for the 
invitation to talk directly to you and also to the Committee.
    I appeared before this Committee about 2 years ago and 
today what I would like to do is address what's changed since 
that time I appeared here, what hasn't and what I believe must 
if nanotechnology commercialization is going to be successful 
in the future.
    Let me begin by providing an update on the state of 
commercialization of nano-based products. Two years ago, we had 
230 manufacturer-identified nano-enabled consumer products in 
our inventory. The number is now exceeding 600. It's doubled in 
the last 14 months with products from essentially 320 companies 
and 20 countries.
    The main nano-engineered material in these products is now 
silver which is used in over a 140 products, such as this nano-
silver toothpaste, which is from Korea and we bought in 
Gaithersburg. I would not use this because I don't really know 
what the risks are and I'll guarantee you nobody in our 
Government knows.
    The other thing that's happened is the----
    Senator Kerry. What kind of toothpaste?
    Mr. Rejeski. --nano-silver.
    Senator Kerry. What is nano-silver?
    Mr. Rejeski. Essentially the toothpaste has been--there's 
nano-silver in this and it's nanoscale that's introduced as an 
antimicrobial. So it's designed to have significant 
antimicrobial powers once it's put in your mouth. It obviously 
raises issues about what does it do when you swallow it. If I 
have periodontal disease, you know, is it going to into the 
bloodstream, et. cetera?
    Senator Kerry. Does it say on the tube what it is?
    Mr. Rejeski. Well, it's in Korean.
    Senator Kerry. It's in Korean?
    Mr. Rejeski. Yes. That presents a problem.
    Senator Kerry. You bought it where?
    Mr. Rejeski. Gaithersburg. And, you know, we've got--right 
now, there are nine toothpastes that contain nano-engineered 
materials in the U.S. marketplace.
    Senator Kerry. What are they, just out of interest? Do you 
know?
    Mr. Rejeski. It's largely antimicrobial silvers and also 
whitening calcium peroxide, but again, you know, the issue is 
obviously who's tested this, you know, what are some of the 
risks. It's out there. Consumers can buy it.
    Senator Kerry. Well, that applies to about 75,000 chemicals 
that are in the marketplace.
    Mr. Rejeski. Right. Yes. We're just adding nano to the long 
list of other chemicals that we know very little about.
    Senator Kerry. Would that fall under TOSCA?
    Mr. Rejeski. This probably would fall partially under FDA 
regulation, though the actual chemical inputs would fall under 
TOSCA.
    Senator Kerry. It's an interesting question as to where 
that liability lies, but we'll look at that. Go ahead.
    Mr. Rejeski. Let me just continue with some other 
observations.
    I'd say that the area where the largest market penetration 
is are also areas where we have the weakest----
    Senator Kerry. Your smile is radiating, I want you to know.
    Mr. Rejeski. Well, we can pass this around.
    Senator Kerry. Geiger counter.
    Mr. Rejeski. So a lot of the products are penetrating in 
areas where we really don't have significant oversight, such as 
the Consumer Product Safety Commission, which spent about 
$20,000 last year doing a literature research on nanotech. 
That's out of our $1.5 billion NNI.
    I think the other thing I want to talk about is the fact 
that the American consumer learned a painful lesson last year 
and that's that the oversight system in this country is 
failing. The public's had to deal with lead in toys that was 
banned 30 years ago, rat poison in pet food, antifreeze 
additives in toothpaste, E.coli in meat. These are not novel 
toxins. So consumers are nervous, our surveys show it, and so 
are other people that are going to be, I think, critical to 
nanotech commercialization.
    The financial community is taking another look at nanotech. 
A number of insurance companies have now placed nanotechnology 
in their top category of emerging risks. I talked last month to 
people at Lloyd's of London and they basically said there are 
two things that are critical to reducing risks with nanotech: 
transparency and oversight and regulation. We have none of 
those.
    State and local governments are moving to provide their own 
guidance to nanotech firms. We've seen that in Berkeley, 
California. We're going to see it shortly in Cambridge, 
Massachusetts, and the State of Wisconsin is doing some work.
    I think NGO positions are hardening. A recent report by 
Friends of The Earth called for a total moratorium on the use 
of nano in all foods and food packaging. I think if there was 
ever a honeymoon with the NGO's, it is over, and I think that's 
something that the Government has squandered over the past 2 
years.
    Finally, the actual firms, especially small firms, are 
nervous because they lack clear guidance from the Government. 
One senior safety manager at a Massachusetts corporation told 
us, ``At this time, we don't understand what regulatory 
requirements may be uniquely applicable to nanotech.''
    These problems do not bode well for nanotech 
commercialization. So let me talk a little bit about what 
hasn't changed and I think what needs to be done as the 
Congress turns their attention to the reauthorization of what I 
hope they will call the 21st Century Nanotechnology R&D and 
Commercialization Act because that's what it's all about now.
    The three areas are critical. The first, the GAO mentioned, 
is transparency. The reauthorization bill must make the NNI 
fully transparent and accountable in terms of investments to 
address the risks. Public confidence in nanotech can't be built 
on hidden agendas or exaggerated numbers and we believe a 
separate external advisory board needs to be essentially 
established to provide guidance and oversight for the NNI.
    Strategy. We need a comprehensive strategy, Congress has 
been waiting few years for this, that addresses existing and 
emerging risks, sets governmentwide priorities, ties funding 
levels to priorities and ensures that the right that the right 
risks are being addressed by the right agencies at the right 
time in the R&D commercialization cycle.
    The strategy also needs a minimum funding level for nano-
related EHS research, order of magnitude increases for EHS 
funding at our key regulatory agencies. That includes EPA, FDA, 
USDA, and the Consumer Product Safety Commission.
    We need to provide public-private partnerships and we need 
funding and a strategy for clean and green nanotech.
    The final area is engagement. Public awareness of nanotech 
is stuck at a low level. We haven't moved the awareness meter 
or nanometer in the past few years compared to basically where 
we started.
    The Federal Government has no strategy to engage the public 
at a wider level and fill the knowledge gaps about nanotech and 
I think that's going to have serious implications essentially 
for long-term success. This needs to be remedied----
    Senator Kerry. What do you think is the most responsible 
entity for that?
    Mr. Rejeski. I think it's government-wide, but I think the 
coordination again has to come from the top level. I think the 
Government needs to think about potentially bringing in an 
external entity that really knows how to do this.
    Let me conclude with sort of one following recommendation. 
I think the greatest challenge we're facing is basically how do 
we develop effective governance systems for 21 Century 
technology, one that's going to work with nanotech and all the 
technologies beyond, such as things like synthetic biology?
    So I think it's time to actually do a high-level 
commission, something that could be set up by the National 
Academies of Science and Public Administration, to establish 
them and actually have them undertake this larger task so that 
we aren't sitting here in another 3 years having the same 
discussion with the next technology, and I think there's simply 
too much at stake here.
    I'd like to thank the Committee for giving me an 
opportunity to address you.
    [The prepared statement of Mr. Rejeski follows:]

  Prepared Statement of David Rejeski, Director, Project on Emerging 
   Nanotechnologies, Woodrow Wilson International Center for Scholars
    I would like to thank Chairman Kerry, Ranking Member Ensign, and 
the Members of the Senate Committee on Commerce, Science, and 
Transportation's Subcommittee on Science, Technology, and Innovation 
for holding this hearing on the ``National Nanotechnology Initiative: 
Charting the Course for Reauthorization.''
    My name is David Rejeski, and I direct the Project on Emerging 
Nanotechnologies (PEN), an initiative of the Woodrow Wilson 
International Center for Scholars and The Pew Charitable Trusts. It is 
dedicated to helping business, government, and the public anticipate 
and manage the possible health and environmental implications of 
nanotechnology. As part of the Wilson Center, the Project is a non-
partisan, independent policy research organization that works with 
researchers, government, industry, non-governmental organizations 
(NGO's), and others to find the best possible solutions to developing 
responsible, beneficial, and acceptable nanotechnologies. The opinions 
expressed in this testimony are my own and do not necessarily reflect 
views of the Wilson Center or The Pew Charitable Trusts.
    Our goal is to take a long-term look at nanotechnologies, to 
identify gaps in nanotechnology information, data, and oversight 
processes and to develop practical strategies and approaches for 
closing those gaps and ensuring that the extraordinary potential 
benefits of nanotechnologies will be realized. We aim to provide 
independent, objective information and analysis, which can help inform 
critical decisions affecting the development, use, and 
commercialization of nanotechnologies across the globe. All research 
results, reports, and the outcomes of our meetings and programs are 
made widely available through publications and our website: http://
www.nanotech
project.org.
    In short, both the Wilson Center and The Pew Charitable Trusts 
believe there is tremendous opportunity with nanotechnology to ``get it 
right.'' Societies have missed this chance with other new technologies 
and, by doing so, forfeited significant social, economic, and 
environmental benefits.
    When I last appeared before the Senate Commerce Committee in May 
2006, I illustrated the rapid commercialization of nanotechnology by 
providing analysis from the Project's then newly released inventory of 
nanotechnology consumer products. I also identified a number of key 
challenges and factors hindering nanotechnology commercialization, 
including lack of public engagement, lack of effective oversight and 
governance mechanisms, and lack of coordinated risk research 
strategies. Today, I would like to address what has changed since that 
time, what has not, and what must change if nanotechnology 
commercialization is to be successful in the future.
What Has Changed
    I would like to begin by providing an update on the state of 
commercialization of nano-based consumer products and then share some 
observations. These products are important because consumer products 
will be most of the public's first experience with nanotechnology.

   The number of nano-enabled consumer products has increased 
        rapidly. Two years ago, we had 212 manufacturer-identified, 
        nano-enabled consumer products in our Consumer Products 
        Inventory. The number now exceeds 600, a number that has 
        doubled within the last 14 months alone.\1\ Since our inventory 
        includes only manufacturer-identified nanotechnology products, 
        there likely are hundreds of more products on the market that 
        are not identified as such. This number also does not take into 
        account the hundreds of commercial and industrial current uses 
        of nanotechnology and nanomaterials.
---------------------------------------------------------------------------
    \1\ Nanotechnology Consumer Product Inventory, Washington, D.C.: 
Project on Emerging Nanotechnologies, Woodrow Wilson International 
Center for Scholars, 2005. Available at http://www.nanotechproject.org/
consumerproducts, accessed April 16, 2008.

   Production and distribution of nanotechnology products is 
        increasingly global. The products in our inventory come from 
        321 companies in 20 countries. All of these products are 
        available in shopping malls or over the Internet, and we have 
        purchased many of them on-line. Thanks to business-to-business 
        (B2B) and business-to-consumer (B2C) e-commerce, nanotechnology 
        products easily flow across international borders, raising 
---------------------------------------------------------------------------
        control, trade, and oversight issues.

   Silver has become the most commonly used nano-engineered 
        material in consumer products. The type of nano-engineered 
        substances in these products has shifted dramatically from 
        materials like carbon to silver, which is now used in over 140 
        products, primarily as an antimicrobial. However, with 
        production costs of carbon nanotubes dropping rapidly, this mix 
        could shift again.\2\
---------------------------------------------------------------------------
    \2\ ``Over the past 2 years, scale up of multi-wall carbon nanotube 
production has led to a dramatic price decrease down to $150/kg for 
semi-industrial applications. According to [NanoSEE 2008: Nanomaterials 
Industrial Status and Expected Evolution], the run for industrial CNT 
production plants has started in order to achieve a sustainable 
business with the commercialization of these high-tech materials with a 
mid-term price target of $45/kg.'' ``Nanotechnology Industry is Moving 
from Research to Production with over 500 Consumer Nano-Products 
Already Available,'' NanoVIP.com. Available at http://www.nanovip.com/
node/6020, accessed April 17, 2008.

   The number of children's products is on the rise. Within the 
        past year, an increasing number of products on sale are 
        targeted at children, including: pacifiers, toothbrushes, baby 
        bottle brushes, and stuffed animals. These products originate 
        from the U.S., Australia, China, Germany, and Korea. This 
        remains a category to watch as nanotechnology's 
        commercialization proceeds, especially since young children and 
        babies generally have a greater vulnerability to chemicals and 
---------------------------------------------------------------------------
        other toxins.

   Products are penetrating the market in areas where oversight 
        regimes are weak. For instance, as shown in Figure 1, about a 
        half of the products in our inventory would fall under the 
        purview of the Consumer Products Safety Commission (CPSC), an 
        agency which, last year, according to CPSC Commissioner Thomas 
        Moore, spent only a total of $20,000 to do a literature review 
        on nanotechnology.\3\ Other areas of high growth where 
        oversight is weak include cosmetics and dietary supplements, 
        both areas where the Food and Drug Administration (FDA) has 
        very limited regulatory authority.\4\
---------------------------------------------------------------------------
    \3\ Testifying before a Senate Subcommittee in 2007, CPSC 
Commissioner Thomas H. Moore, who has served at the agency since 1995, 
summed up the situation: ``I do not pretend to understand 
nanotechnology and our agency does not pretend to have a grasp on this 
complicated subject either. For Fiscal Year 2007, we were only able to 
devote $20,000 in funds to do a literature review on nanotechnology.'' 
Available at: http://www.cpsc.gov/pr/moore2007.pdf, accessed April 17, 
2008.
    \4\ Taylor, Michael. Regulating the Products of Nanotechnology: 
Does FDA Have the Tools It Needs?, Washington, DC: Project on Emerging 
Nanotechnologies, Woodrow Wilson International Center for Scholars, 
2007. Available at http://www.nanotechproject.org/file_download/files/
PEN5_FDA.pdf, accessed April 18, 2008.


    Figure 1. Growth in the number of manufacturer-identified, 
nanotechnology-enabled products on the market from 2005 to 2007 (in 
---------------------------------------------------------------------------
red) showing products under possible CPSC jurisdiction (in blue).

    This suite of already-commercialized products tells us something 
about the emerging face of the nanotechnology industry and the 
challenges we face as we begin to introduce nanotechnology into the 
marketplace. These changes are signs that a set of issues related to 
consumer safety and health are emerging that were not as apparent when 
our inventory was first released. In addition, the current state of 
oversight regimes should raise serious concerns for policymakers tasked 
with the challenge of spurring nanotechnology innovation in a 
responsible and sustainable manner.
    It is important to keep in mind that the willingness of the public 
to ``buy nano'' will be affected by changes that impact the overall 
climate in the commercial marketplace and influence consumer trust and 
confidence. Let me explore some of these changes.
    Over the past year, American consumers have painfully learned that 
the Federal oversight system is failing. The public has had to deal 
with lead in toys (a use that was banned 30 years ago by the CPSC), rat 
poison in pet food, antifreeze in toothpaste, and E. coli in meat. Most 
recently, over 100 deaths were tied directly to a compromised blood 
thinner.\5\
---------------------------------------------------------------------------
    \5\ ``FDA Links More Deaths to Blood Thinner,'' Associated Press, 
April 8, 2008. Available at: http://ap.google.com/article/
ALeqM5iT7Y6m5N3h8XK-CDe9bU7wuYNCcQD8VTUN6O0, accessed April 18, 2008.
---------------------------------------------------------------------------
    These were equal opportunity failures involving multiple government 
agencies: the FDA, U.S. Department of Agriculture (USDA), and CPSC. In 
most cases, the agencies were not dealing with exotic toxins but ones 
with long histories of pernicious effects. One logical question 
consumers will have is: ``If the government can't protect my children 
from lead, how will they deal with nanotechnology?''
    Not surprisingly, our latest polls on public awareness of 
nanotechnology show declining trust in the government's ability to 
manage risks with emerging technologies. National surveys conducted on 
behalf of the Project by Peter D. Hart Research Associates in August 
2006 and August 2007 indicate declining levels of confidence in the 
USDA and FDA, as well as businesses and companies, to maximize the 
benefits and minimize the risks of scientific and technological 
advancements (Figure 2). Considering the events of the past year, it 
would not be surprising to see an even greater drop in the levels of 
confidence in government regulatory agencies when we repeat our 
national survey this summer.
    Public trust is the ``dark horse'' in nanotechnology's future. If 
government and industry do not work to build public confidence in 
nanotechnology, consumers may reach for the ``No-Nano'' label in the 
future. Public perceptions can have large economic impacts. The 
European Union's (EU) de facto moratorium on the approval of new 
genetically modified food products, driven largely by public concerns, 
is costing American farmers an estimated $300 million per year in lost 
sales.\6\
---------------------------------------------------------------------------
    \6\ Estimate according to Biotechnology Industry Organization. 
Available at: http://www.bio.org/foodag/background/eumoratorium.asp, 
accessed April 18, 2008.


    Figure 2. Percentage of respondents with ``Great deal/fair amount 
of confidence'' in each to maximize benefits and minimize risks of 
scientific/technological advancements. Results are from surveys 
conducted in August 2006 and August 2007. Each survey had 1,014 
---------------------------------------------------------------------------
respondents and margin of error of 3.1 percentage points.

    Consumer confidence will be further undermined if companies 
continue to make claims about nanotechnology in their products that 
cannot be supported. Last month, the Environmental Protection Agency 
(EPA) fined a California company $208,000 for making unsubstantiated 
claims involving the anti-bacterial benefits of a nano-silver coating 
for computer mice and keyboards. Since that time, the claim about the 
use of nanomaterials has been removed from the manufacturer's website, 
though the product appears to have remained unchanged. This phenomenon 
is one that has been seen with other products, including food storage 
containers and stuffed animals.
    In addition to disappearing product labels, the nanotechnology 
commercial landscape is awash with hyperbolic product claims so obtuse 
that no consumer could possibly unravel their meaning. Companies are 
creating a literal nanotechnology ``Tower of Babel.'' Here are a few 
examples from our Consumer Products Inventory:
NanO Bio-Sim
    ``This product is essential for one's optimum health. The 
elimination of Candida, parasites, worms, yeast, fungi, and amoebas 
from the body is the fundamental base of any cure that will return 
health to the body . . . Once Bio-Sim is absorbed by the body, the 
sugar and the vinegar begin attracting the parasites, fungi, Candida, 
worms, and amoebas from their hiding places. Then, the NanO silica act 
as cutting knives on the intruders. Fortunately, this action only 
affects the pathogens and leaves the healthy body intact because of the 
perfect sizing of the diatomaceous earth.'' \7\
---------------------------------------------------------------------------
    \7\ Additional claims can be found on product website. Available at 
http://www.fulvic.org/html/nano_bio-sim.html, accessed April 22, 2008.


Eczemel Nano-Cream
    ``Due to their specific composition, nanoparticles have a very high 
affinity to the horny layer of the skin and are used as transport 
systems which help the different active agents to penetrate the skin 
more readily. The capsules of nanoparticles consist of monolayers of 
phosphatidylcholine, a naturally occurring substance that nature uses 
for the basic structure of the membranes of each cell. Nanoparticles 
contain within their nucleus the active substances, which are gradually 
released in the skin.'' \8\
---------------------------------------------------------------------------
    \8\ This and other claims are available in the Project's Consumer 
Products Inventory. Available at http://www.nanotechproject.org/
consumerproducts, accessed April 16, 2008.


MesoPlatinum
    ``Promotes increased mental focus and concentration. Promotes 
enhanced mental acuity. Supports healthy tissue regeneration of the 
heart tissue, thymus and the entire endocrine system. Promotes 
increased creativity. Promotes very vivid dreams. Promotes improved 
memory. Supports DNA repair. Promotes increased libido in both males 
and females.'' \9\
---------------------------------------------------------------------------
    \9\ Ibid.
    
    
    Discussions about nanotechnology should not be just about the 
risks, but also about benefits. Most nano-enabled products carry a 
price premium over their non-nano counterparts. What, exactly, are 
consumers getting for their money, and who can help sort this out?
    The developments I have outlined do not bode well for 
nanotechnology commercialization. American consumers are nervous--so 
are other people who matter to the long-term success of nanotechnology, 
including insurers and investors, state and local governments, NGO's, 
other countries, and nanotechnology companies. Let me summarize some of 
these concerns.
    Insurers and Investors: The financial community is taking another 
look at nanotechnology. The Lloyd's of London Emerging Risks Team just 
issued a report on nanotechnology that noted that ``due to the 
potential impact to the insurance industry if something were to go 
wrong, nanotechnology features very highly in Lloyd's top emerging 
risks.'' \10\ When I talked recently to staff at Lloyd's, they said 
that two things are critical to the insurance sector in terms of 
reducing risks: transparency and regulation. We have neither at the 
moment and the Federal Government is doing little to remedy this 
problem. Similar to Lloyd's, Zurich Insurance's Canadian office ranked 
nanotechnology in the top tier of emerging global risks (along with 
climate change and deteriorating infrastructure).\11\ A recent UK 
exercise involving 35 representatives from government, NGO's, and 
academia also identified nanotechnology as the top risk to ecosystems 
(above climate change and the possible impact of novel pathogens).\12\
---------------------------------------------------------------------------
    \10\ Lloyd's Emerging Risks Team. Nanotechnology: Recent 
Developments, Risks and Opportunities, 2007. Available at http://
www.lloyds.com/Lloyds Market/Tools and reference/Exposure Management/
Emerging risks.htm, accessed April 17, 2008.
    \11\ Zurich's view was covered in the following article: 
``Nanotechnology, climate change, infrastructure among top risks,'' 
Canadian Underwriter, November 22, 2007. Available at http://
www.canadianunderwriter.ca/issues/
ISArticle.asp?id=76768&issue=11222007, accessed April 17, 2008.
    \12\ ``Scanning the risk horizon for emerging threats,'' Lloyd's. 
com, 8 April 2008. Available at http://www.lloyds.com/News_Centre/
Features_from_Lloyds/Scanning_the_risk_horizon_
for_emerging_threats0904 08.htm, accessed April 17, 2008.
---------------------------------------------------------------------------
    One reason insurers and investors are nervous is the fear that some 
companies are not being transparent. Last week, the Investor 
Environmental Health Network, in collaboration with investment 
managers, who have more than $41 billion in combined assets, released a 
report raising concerns that companies are not apprising investors of 
potential nanotechnology risks. The report notes that, ``. . . 
companies dealing with nanomaterials . . . are not disclosing the 
evidence of health risks of nanotechnology products, nor the lack of 
adequate product testing prior to their sales.'' \13\
---------------------------------------------------------------------------
    \13\ Lewis, Esq., Sanford, Richard Liroff, Ph.D., Margaret Byrne, 
M.S., Mary S. Booth, Ph.D., and Bill Baue. ``Toxic Stock Syndrome: How 
Corporate Financial Reports Fail to Apprise Investors of the Risks of 
Product Recalls and Toxic Liabilities,'' IEHN, April 2008. Available 
at: http://www.iehn.org/publications.reports.toxicstock.php, accessed 
April 18, 2008.
---------------------------------------------------------------------------
    State and Local Governments: Tired of waiting for Federal action, 
municipal governments are moving to provide specific guidance to 
nanotechnology firms in places like Berkeley, CA, and, soon, in 
Cambridge, MA. Interestingly, when Cambridge passed the world's first 
biotechnology ordinance in the mid-1970s, companies did not flee. The 
city provided a unique location where the rules of the road were known 
and the public was comfortable with established safety precautions. It 
is now home to 55 biotechnology firms.\14\ Last year, the state of 
Massachusetts established an Interagency Nanotech Council to discuss 
nanotechnology issues \15\ and, most recently, a state lawmaker in 
Wisconsin has sought answers from state officials about potential 
reporting requirements for firms involved with nanotechnology. Also, a 
recent analysis by our Project indicates that five states with 
significant nanotechnology activities (CA, MA, NY, NJ, MI) could take a 
more proactive approach to nanotechnology oversight based on legal 
authorities that go beyond those of the Federal Government.\16\ This is 
not an optimal solution (since it could disaggregate markets), but 
history has shown that state action is often a prerequisite for Federal 
movement on emerging environmental and public health issues. As Justice 
Brandeis once noted, the states are the ``laboratories of democracy,'' 
and they often drive public policy innovation.
---------------------------------------------------------------------------
    \14\ Lipson, Sam 2004. ``The Cambridge Model of Biotech 
Oversight,'' at: http://www.genewatch.org/genewatch/articles/16-
5lipson.html
    \15\ The group recently issued its first workshop report with a 
second now being planned. The report is available at: http://
www.mass.gov/dep/toxics/sourcest.htm#ec, accessed April 22, 2008.
    \16\ Keiner, Suellen. ``Room at the Bottom? Potential State and 
Local Strategies for Managing the Risks and Benefits of 
Nanotechnology.'' Washington, DC: Project on Emerging Nanotechnologies, 
Woodrow Wilson International Center for Scholars, 2007. Available at 
http://www.nanotechproject.org/publications/archive/room_at_bottom/.
---------------------------------------------------------------------------
    NGO's: During the last year, the positions taken by NGO's have 
hardened. A recent report by Friends of the Earth called for a complete 
moratorium on the use of nanotechnology in all foods and food packaging 
until more is known about the risks to humans and the environment.\17\ 
In early April, the Silicon Valley Toxics Coalition called for ``new 
comprehensive state and Federal regulatory policies that adequately 
address the potential hazards posed by nanotechnology.'' \18\ 
Increasingly, NGO's are growing impatient with a lack of transparency 
by government and slow action on oversight. If there ever was a 
honeymoon with the NGO community, it is over.
---------------------------------------------------------------------------
    \17\ ``Nanotech Exposed in Grocery Store Aisles,'' Friends of the 
Earth, March 11, 2008. Available at: http://www.foe.org/nanotech-
exposed-grocery-store-aisles.
    \18\ ``SVTC Nanotech Report: Regulating Emerging Technologies in 
Silicon Valley and Beyond,'' Silicon Valley Toxics Coalition. Available 
at: http://www.etoxics.org/site/PageServer?page
name=svtc_nanotech, accessed April 21, 2008.
---------------------------------------------------------------------------
    Other Countries: Countries are responding to this evolving 
commercialization climate differently, which generates its own set of 
issues. Internationally, the EU is clearly moving in the direction of a 
more precautionary approach to nanotechnology oversight raising the 
potential of a three-tiered governance system at a global level--
reflecting diverging approaches by the EU, the U. S., and countries 
like China. Large disparities in nanotechnology oversight systems at a 
global level would be highly counterproductive and create an uneven 
playing field for U.S. companies who want to operate in the global 
marketplace. Variations in oversight also open the door to potentially 
dangerous products flowing across our borders, as we have seen in the 
case of substandard products from China.
    Firms: Increasingly, nanotechnology firms, especially small firms, 
are nervous because government has failed to provide a clear and 
predictable path to compliance. A new report by Ernst & Young on 
strategic business risks identified regulatory and compliance risk as 
the number one risk companies face today and will likely face in the 
future.\19\ Recently, our Project released the results of a New England 
focused survey, conducted by researchers at University of 
Massachusetts-Lowell, that investigated how nanotechnology firms 
(especially small- and medium-size firms) are dealing with 
environmental, health and safety (EHS) management and what information 
they need to address risks proactively.\20\ The survey produced two key 
findings. The first is that most nanotechnology firms recognize the 
existence of potential risks. The second, however, is that the firms 
(especially small firms) feel that they lack: (a) information on the 
health and environmental risks of nanomaterials and (b) the necessary 
guidance from suppliers, industry, governmental regulatory bodies, and 
others to manage risks associated with these materials and processes. 
As one senior safety manager in a Massachusetts corporation said, ``At 
this time, we don't understand what regulatory requirements may be 
uniquely applicable to nanotechnology and nanoparticles.'' Compliance 
is hard if the compliance criteria are unknown.
---------------------------------------------------------------------------
    \19\ This report identified regulatory and compliance risk as its 
number one risk. Obviously, this has high relevance to any industry 
using nanotechnology. Source: Ernst & Young (in collaboration with 
Oxford Analytica). Strategic Business Risk 2008--The Top 10 Risks for 
Business, 2008.
    \20\ John E. Lindberg and Margaret M. Quinn. A Survey of 
Environmental, Health and Safety Risk Management Information Needs and 
Practices among Nanotechnology Firms in the Massachusetts Region. 
Washington, DC: Project on Emerging Nanotechnologies, Woodrow Wilson 
International Center for Scholars, 2007. Available at http://
www.nanotechproject.org/process/assets/files/5921/file.pdf.
---------------------------------------------------------------------------
    Interestingly, the one entity that thinks things are fine is our 
Federal Government--specifically, the National Nanotechnology 
Initiative (NNI)--which has provided continued public reassurances that 
risk research is more than sufficient and existing oversight systems 
adequate for nanotech. As Congress approaches the reauthorization of 
the 21st Century Nanotechnology Research and Development Act, they need 
to carefully weigh the evidence for and against the Federal 
Government's position and the ultimate cost of a miscalculation.
What Has Not Changed and What Needs to Change
    Let me now talk about what has not changed over the past 2 years 
and what needs to be remedied as the Congress turns its attention to 
the reauthorization of the 21st Century Nanotechnology Research and 
Development Act and looks beyond. Three issues must be addressed by the 
Act: transparency, strategy, and engagement.
    1. Transparency: The Reauthorization Bill must make the NNI fully 
transparent and accountable in terms of its investments and strategy to 
address the risks of nanotechnologies.
    During a three-year period, our Project has spent between $50,000 
and $60,000 in staff time analyzing and making public Federal 
Government expenditures that address nano-related risks to workers, 
consumers, and the environment. It has not been an easy task, but, more 
importantly, it should never have been necessary. The Federal 
Government's data on risk research, including spending levels, detailed 
project descriptions, and all assumptions driving the analysis, should 
have been on-line and transparent from the very beginning of the NNI.
    Unfortunately, the recent study by the Government Accountability 
Office (GAO) has failed to remedy this problem since the detailed data 
that the GAO collected for their analysis is also not being made 
publicly available.\21\ The existing lack of transparency undermines 
public trust, undercuts our ability to build workable public-private 
partnerships, raises suspicions among NGO's, and weakens the basis for 
international collaboration on risk research. It also makes any form of 
accountability to the Congress, for instance, virtually impossible. 
Finally, a strong risk strategy cannot be built on a weak quantitative 
foundation that cannot be validated by external stakeholders. Secrecy 
about the data underlying the government's approach to risk compromises 
our national investments in nanotechnology. As the late Senator Patrick 
Moynihan was fond of saying: ``Secrecy is for losers.'' \22\
---------------------------------------------------------------------------
    \21\ We have compared the GAO findings with both the NNI numbers 
and our Project's inventory and included that analysis in the Appendix 
to this testimony.
    \22\ Moynihan, D.P. 1998. Secrecy: The American Experience, New 
Haven, CT: Yale University Press.
---------------------------------------------------------------------------
    Our analyses consistently show that the Federal Government is 
inflating investments in risk analysis and management by orders of 
magnitude and, by doing so, distorting the perceptual environment where 
nanotechnology investment and commercialization takes place. These 
assurances of large investments in risk research (combined with 
statements of adequate oversight) provide a false sense of confidence 
and actually shift risks onto consumers, workers, investors, and, 
ultimately, onto insurers and re-insurers.
    The Act must require that a comprehensive, public, on-line EHS 
research database be created and also mandate annual updates. This 
should be done within 6 months following the passage of the Act. 
Collaboration with international organizations, such as the OECD, 
should be supported to expand the collection and on-line publication of 
EHS research data internationally. Finally, the collection, analysis, 
and publication of other data key to understanding nanotechnology 
commercialization should be undertaken by the Department of Commerce, 
such as data on industry structure, venture capital investments, job 
creation, and domestic and international market growth.
    Increased transparency must be combined with increased oversight. 
The existing reviews of the NNI through the President's Council of 
Advisors on Science and Technology (PCAST) are inadequate. PCAST is 
already stretched too thin and lacks the depth and breadth of knowledge 
necessary to review the critical EHS component of the NNI along with 
other areas crucial to the successful commercialization of 
nanotechnology.
    Given the size of our investments in the NNI and its implications 
for economic growth, a separate external advisory board (independent of 
PCAST) should be created that has broad representation from the 
nanotechnology community, including universities, NGO's, investors, and 
a range of businesses, especially small businesses, which often lack a 
voice in our policy deliberations. Finally, the NNI should fully 
support the external review of the EH&S risk research strategy by the 
National Academies' Board on Environmental Studies and Toxicology 
(BEST). This review has received broad support from a variety of 
stakeholders including the American Chemistry Council, Dupont, Evonik 
(formerly Degussa), the NanoBusiness Alliance, and the Environmental 
Defense Fund. Given the existing lack of transparency regarding the 
government's risk related research, reviews by independent entities are 
critical to maintaining accountability.
    2. Strategy: After 4 years of waiting, the Congress has still not 
received a comprehensive, top-down strategy to address existing and 
emerging nanotechnology risks.
    Though the NNI strategy for addressing risks has improved, it still 
lacks a clear set of government-wide priorities tied directly to 
funding levels, which would ensure that the right agencies are focused 
on the right risks at the right time in the research and development 
and commercialization cycle. The recent GAO report praised the level of 
collaboration between agencies involved in the NNI, but collaboration 
between agencies is an insufficient condition for success. Like soccer, 
moving the ball down the field as a team does not necessarily result in 
a goal--for that you need strategy and leadership. In short, what the 
NNI currently calls a strategy is really a collection of what 
individual agencies ``can'' do and not what they ``should'' do.
    Any risk strategy also needs appropriate funding to work. I support 
a 10 percent floor for EHS funding because PEN's extensive analyses 
indicate that funding for highly-relevant risk research has been 
exaggerated for at least the past 3 years, and this underinvestment 
needs to be corrected, especially as more nanotechnology products flow 
into the marketplace and raise questions about public safety and 
challenges for government regulators. A PEN analysis of current 
research projects listed in the NNI's ``Strategy for Nanotechnology-
Related Environmental, Health, and Safety Research'' found that only 62 
of the 246 projects listed were highly relevant to addressing EHS risks 
of nanotechnology.\23\ These 62 projects accounted for an estimated $13 
million in research and development funding for 2006--far lower than 
the $68 million cited by the NNI document as being focused on EHS 
research.\24\ In fact, our analysis now shows that the EU is spending 
almost twice the U.S. investment in highly-relevant EHS risk 
research.\25\
---------------------------------------------------------------------------
    \23\ Project specific data underpinning this analysis can be found 
in the Project on Emerging Nanotechnologies Environment, Health and 
Safety Research Inventory. This inventory is in the process of being 
adopted and updated by the Organization for Economic Cooperation and 
Development, Working Party on Manufactured Nanomaterials. Available at: 
http://www.nano
techproject.org/inventories/ehs/, accessed April 15, 2008.
    \24\ Further independent assessment of research funded in 2006 
reveals funding for highly-relevant risk research was closer to $20 
million. The discrepancy appears to be due to relevant research that 
that the NNI missed in their analysis--another indicator that the 
government is not on top of what research is being funded, and lacks 
sufficient transparency for effective accountability. Available at: 
http://www.nanotechproject.org/inventories/ehs/, accessed April 8, 
2008.
    \25\ Press release and additional information on analysis is 
available at: http://www.nano
techproject.org/news/archive/ehs-update/, accessed April 21, 2008.
---------------------------------------------------------------------------
    Research programs like the NNI do not automatically guarantee an 
optimal allocation of public money. Sometimes, key constituents or 
topics are left unfunded or under addressed. Recognizing this problem, 
the government has set minimal funding requirements. The Federal 
Government does this with small businesses in our set-asides for Small 
Business Innovation Research grants and with the Human Genome Project 
by dedicating 5 percent of all Project research spending to examine 
ethical, legal, and social implications that the policy community knew 
would accompany the development and application of genomics. The 
reauthorization proposal to set aside 10 percent of the total NNI 
budget for nanotechnology EHS research has received support from a wide 
range of stakeholders including the NanoBusiness Alliance, American 
Chemistry Council, and NGO's, including the Environmental Defense Fund. 
As Sean Murdock, director of the NanoBusiness Alliance, said in his 
recent testimony before the House Science and Technology Committee, ``. 
. . we believe that 10 percent of the total funding for nanotechnology 
research and development is a reasonable estimate of the resources that 
will be required to execute the strategic plan . . .'' \26\
---------------------------------------------------------------------------
    \26\ Full quote from testimony reads, ``While we believe that 10 
percent of the total funding for nanotechnology research and 
development is a reasonable estimate of the resources that will be 
required to execute the strategic plan, we also believe that actual 
resource levels should be driven by the strategic plan as they will 
vary significantly across agencies.'' From testimony for hearing on 
``The National Nanotechnology Initiative Amendments Act of 2008,'' 
April 16, 2008.
---------------------------------------------------------------------------
    The strategy must also increase, by orders of magnitude, the 
funding available for risk research at agencies with oversight missions 
such as the EPA, FDA, USDA, and CPSC. Our analysis has found that only 
$4.5 million for 36 projects at the EPA, $5.1 million for 45 projects 
at the National Institute for Occupational Safety and Health, and 
$56,501 for 9 projects at the USDA is dedicated to projects focusing on 
the risks of nanotechnology for FY2006.
    Government oversight based on weak science is not acceptable. In 
some of these agencies, there may also be a lack of human resources and 
the scientific expertise needed to assess nanotechnology risks. 
Consequently, the Federal risk research strategy must involve a human 
resources component, including an analysis of expertise gaps and plans 
on how they will be funded and filled. The recent assessment of the 
FDA's scientific capacity by their own science board uncovered a number 
of limitations that are directly relevant to nanotechnology:

   The development of medical products based on ``new science'' 
        cannot be adequately regulated by the FDA.

   There is insufficient capacity in modeling, risk assessment, 
        and analysis.

   The FDA science agenda lacks a coherent structure and 
        vision, as well as effective coordination and 
        prioritization.\27\
---------------------------------------------------------------------------
    \27\ FDA Science and Mission at Risk: Subcommittee on Science and 
Technology, November 2007. Available at: http://www.fda.gov/ohrms/
dockets/ac/07/briefing/2007-4329b_02_01_
FDA%20Report%20on%20science%20and%20Technology.pdf, accessed April 21, 
2008.

    The strategy should support specific mechanisms to facilitate 
public-private partnerships focused on closing knowledge gaps in 
nanotechnology risk assessment and management and leveraging scarce 
funds across sectors. The NNI should evaluate a number of models for 
---------------------------------------------------------------------------
public-private partnerships using the following criteria:

   Independence. The selection, direction, and evaluation of 
        funded research would have to be science-based and fully 
        independent of the business and views of partners in the 
        organization.

   Transparency. The research, reviews, and operations of the 
        organization should be fully open to public scrutiny.

   Review. Research supported by the organization should be 
        independently and transparently reviewed.

   Communication. Research results should be made publicly 
        accessible and fully and effectively communicated to all 
        relevant parties.

   Relevance. Funded research should have broad relevance to 
        managing the potential risks of nanotechnologies through 
        regulation, product stewardship, and other mechanisms.\28\
---------------------------------------------------------------------------
    \28\ See Dr. Andrew Maynard's testimony for hearing on ``The 
National Nanotechnology Initiative Amendments Act of 2008,'' April 16, 
2008. Available at: http://www.nanotechproject.org/process/assets/
files/6689/maynard_written_april08.pdf, accessed April 21, 2008.

    Two models should be adapted, funded, and evaluated over the next 3 
years.
    Finally, there is still not enough attention being paid to 
engineering the risks out of nanotechnology manufacturing and products. 
Recent research at the Massachusetts Institute of Technology (MIT) has 
shown that carbon nanotubes may contain high concentrations of toxic 
impurities like chromium and lead--if we continue down this path, the 
nanotechnology revolution risks being a dirty one, not a green one. We 
have the ability to enable ``green'' nanotechnology production and 
products--reducing toxic inputs, energy use, emissions, end-oflife 
impacts, and ultimately financial liabilities--but presently we lack a 
coherent strategy and the resources to do this. University of Oregon 
researcher Jim Hutchinson has been able to create gold nanomaterials 
through ``green'' synthesis that is not only safer and faster than 
traditional means but also much less expensive.\29\ The longer the 
government and industry delay investments in ``greening'' the 
nanotechnology production infrastructure, the more we may have to 
invest to manage risks after the fact. Based on PEN analysis, I 
recommend dedicating $20-30 million annually to establish at least one 
major university center on ``green'' nanotechnologies and a prestigious 
and highly-visible award to spur green nanotechnology innovation.\30\ 
The goal should be to make the U.S. the world's leader in ``green'' 
nanotechnology.
---------------------------------------------------------------------------
    \29\ Jim Hutchison's technique is able to create a gram of gold 
nanoparticles for $500, down from the $300,000 per gram cost for 
traditional methods. Schmidt, Karen. Green Nanotechnology: It's Easier 
Than You Think, Washington, D.C.: Project on Emerging Nanotechnologies, 
Woodrow Wilson International Center for Scholars, 2007. Available at: 
http://www.nanotech
project.org/publications/archive/green_nanotechnology_its_easier_than/, 
accessed April 18, 2008.
    \30\ Rejeski, David. ``How About An X-Prize for Green 
Nanotechnology?'' Nanotechnology Now, 2007. Available at: http://
www.nanotech-now.com/columns/?article=134.
---------------------------------------------------------------------------
    3. Engagement: Public awareness of nanotechnology is stuck at a low 
level. The same surveys mentioned earlier have actually shown a 
decrease in the number of Americans who have ``heard a lot'' about 
nanotechnology from August 2006 to August 2007. Despite an annual U.S. 
public and private sector investment of over $4 billion in 
nanotechnology research and development, 80-90 percent of Americans 
have heard ``very little'' or ``nothing'' about nanotechnology. The 
original 21st Century Nanotechnology Research and Development Act 
specified that the government provide:

        ``. . . through the National Nanotechnology Coordination Office 
        . . . for public input and outreach to be integrated into the 
        Program by the convening of regular and ongoing public 
        discussions, through mechanisms such as citizens' panels, 
        consensus conferences, and educational events, as appropriate; 
        . . .''

    Unfortunately, this mandate came with no funding, and the National 
Nanotechnology Coordination Office has not fulfilled this mission.
    At this critical juncture, the Federal Government has no strategy 
to engage the public and fill the knowledge gap about nanotechnology, 
which could have serious implications for nanotechnology's long-term 
success. Significant resources and ingenuity need to be committed to 
this area. An essential element missing from previous efforts has been 
genuine citizen engagement. We are still talking to the American public 
about nanotechnology through TV shows, websites, and museum exhibits--
this is not public engagement. Some experiments on engagement have been 
run by various National Science Foundation-funded nanotechnology 
centers, but there is no effort being made to scale these up to reach 
significant numbers of people nationwide (we need to engage thousands, 
not dozens).
    As the commercialization of nano-based products accelerates, how 
the public learns about nanotechnology, from whom, and with what 
message will be critical to assuring public confidence in the 
applications and support for further government funding. We need large-
scale education and citizen deliberation on how to balance the 
opportunities and risks presented by nanotechnology that engages the 
diverse perspectives of the American public, helps identify a 
collective public agenda, generates buy-in from stakeholders, and 
raises awareness about the issues. For nanotechnology to succeed, the 
strategy for public engagement will be as critical as the strategy for 
risk assessment and management and will require adequate funding and 
top-level attention. It cannot be approached piecemeal or as an 
afterthought. The NNI should bring in an outside entity with proven 
capabilities in running large multi-stakeholder dialogues on key 
national policy issues and provide adequate funding to run a one-year, 
national dialogue on nanotechnology.
Conclusions
    Let me close by putting forth a greater challenge to the Committee 
and our government. For the commercial success of any emerging 
technology, we need a better approach to governance that can support 
strategic risk research, provide adequate oversight, and engage the 
broader public in our technological future. With nanotechnology, 
industry and government are struggling to balance science, innovation, 
and the pressures for rapid commercialization with a need to address 
risks and public concerns early and proactively. This situation does 
not surprise people who were part of the debates around agricultural 
biotechnology in the 1990s or watched the tortuous path of nuclear 
power through the 1950s and 60s. The recurrence of issues around risk 
assessment, oversight, and public dialogue--irrespective of the 
technology involved--indicates that these challenges have deeper 
origins that will not respond to quick fixes. The government is not 
organized for the tasks at hand, and the challenges we face will only 
grow more complex as nanotechnology and biotechnology increasingly 
converge and new scientific fields, such as synthetic biology, emerge.
    We need to bring together the best minds in the Nation to develop a 
governance system for 21st century technologies, a system that will 
work with nanotechnology and the technologies beyond. A high-level 
commission (organized by the national academies of Science and Public 
Administration) should be established to undertake this task.
    Finally, let me say that I applaud the Committee for focusing our 
attention on issues affecting the successful commercialization of 
nanotechnology. Nanotechnology is no longer just a large government 
research project. Products are moving out of the lab into the market 
and onto store shelves. This is success, but it is not guaranteed 
forever. The next two to 3 years will be critical to ensuring that our 
investments pay off, and the structure and functions of the NNI will 
play an important role in making sure we can maximize the benefits of 
nanotechnology while minimizing the risks.
                                Appendix
      Comparison of Nanotechnology Risk-Research Funding for 2006
Definitions of risk-relevant research used in funding assessments:
NNI
    In the context of this comparison, the given NNI definition of EHS-
relevant research is ``research whose primary purpose is to understand 
and address potential risks to health and the environment posed by this 
technology.'' \31\
---------------------------------------------------------------------------
    \31\ ``Environmental, health and safety research needs for 
engineered nanoscale materials,'' The National Nanotechnology 
Initiative, September 2006. Available at: http://www.nano.gov/
NNI_EHS_research_needs.pdf, accessed April 22, 2008.
---------------------------------------------------------------------------
GAO
    From the GAO assessment of EHS-relevant research, it appears that 
the same definition of relevance was used as established by the NNI 
(see above). From the GAO report:

        ``To assess whether or not the primary purpose of the research 
        conducted by these agencies addressed the EHS risks of 
        nanotechnology, we reviewed qualitative data on all projects 
        funded by EPA, NIH, NIOSH, NIST, and NSF in Fiscal Year 2006. 
        To minimize bias and to ensure the consistency of our 
        evaluation, the team independently conducted project reviews by 
        using publicly available and agency documentation, such as 
        project abstracts or grant applications, to make our 
        determinations. For categorization of projects that appeared 
        questionable to us, we discussed the categorization with agency 
        officials and modified our determination as appropriate given 
        the additional support provided by the agency.'' \32\
---------------------------------------------------------------------------
    \32\ ``Nanotechnology. Better guidance is needed to ensure accurate 
reporting of Federal research focused on environmental, health and 
safety risks,'' U.S. Government Accountability Office, 2008. Acronyms--
NIH: National Institutes of Health; NIOSH: National Institute for 
Occupational Safety and Health; NIST: National Institute of Standards 
and Technology.

PEN
    PEN defines highly relevant research as:

        ``Research that is specifically and explicitly focused on the 
        health, environmental and/or safety implications of 
        nanotechnology. Also included in this category are projects and 
        programs where the majority of the research undertaken is 
        specifically and explicitly focused on the health, 
        environmental and/or safety implications of nanotechnology. 
        Examples of research in this category would include research to 
        understand the toxicity of specific nanomaterials, research 
        into exposure monitoring and characterization to further 
        understand potential impact, research into biological 
        interactions and mechanisms that is focused on answering 
        specific questions associated with potential risk. Examples of 
        research that would not be included in this category would 
        include exploratory research into biological mechanisms outside 
        the context of understanding impact, general instrument 
        development, and research into therapeutics applications which 
        also incorporate an element of evaluating impact.'' \33\
---------------------------------------------------------------------------
    \33\ Maynard, Andrew. Testimony for U.S. House of Representatives 
Committee on Science and Technology Hearing on: The National 
Nanotechnology Initiative Amendments Act of 2008, April 16 2008. 
Available at http://www.nanotechproject.org/process/assets/files/6689/
maynard_
writteng_april08.pdf, accessed April 21, 2008.
    \34\ Acronyms--DOD: Department of Defense; DOE: Department of 
Energy.
    \35\ ``Nanotechnology. Better Guidance Is Needed to Ensure Accurate 
Reporting of Federal Research Focused on Environmental, Health and 
Safety Risks,'' U.S. Government Accountability Office, 2008.
    \36\ Numbers in parentheses represent the number of projects where 
finding information is available. This assessment was carried out on 
projects listed in the document ``Strategy for nanotechnology-related 
environmental, health and safety research,'' The National 
Nanotechnology Initiative, 2008. Available at: http://www.nano.gov/NNI 
EHS Research Strategy.pdf, accessed April 22, 2008.
    \37\ Number in parentheses represents estimated annual funding, 
accounting for missing budget data.

  Assessment of Projects Primarily Focused on Addressing Nanotechnology
                            ESH Implications
                     Number of Active Projects, 2006
------------------------------------------------------------------------
                                                       PEN-assessment of
                 NNI-assessment of  GAO-assessment of   highly relevant
  Agency \34\       EHS-relevant       EHS-relevant       EHS projects
                   projects \35\      projects \35\    listed by the NNI
                                                              \36\
------------------------------------------------------------------------
EPA              10                 10                 10 (10)
NIH              18                 18                 11 (5)
NIOSH            23                 21                 21 (21)
NIST             2                  2                  4 (0)
NSF              66                 46                 10 (10)
DOD              --                 --                 7 (2)
DOE              --                 --                 0
USDA             --                 --                 2 (1)
Total            119                97                 65
------------------------------------------------------------------------


  Assessment of Projects Primarily Focused on Addressing Nanotechnology
                            ESH Implications
               Estimated Funding of Active Projects, 2006
------------------------------------------------------------------------
                                                       PEN-assessment of
               NNI-assessment of   GAO-assessment of    highly relevant
   Agency        EHS-relevant        EHS-relevant        EHS projects
                 projects \35\       projects \35\     listed by the NNI
------------------------------------------------------------------------
EPA           3.6                 3.6                 1.3A
NIH           5.6                 5.6                 0.8 B
NIOSH         4.3                 4.2                 4.9
NIST          2.4                 2.4                 NA
NSF           21.1                14.7                1.4 C
DOD           --                  --                  1.4
DOE           --                  --                  0
USDA          --                  --                  0.1
Total         $37 million         $30.5 million       $9.9 million ($13
                                                       million) \37\
------------------------------------------------------------------------
A EPA funding reported by NNI and GAO represents funding for a 3-year
  period. PEN figures are an estimate of annual funding for 2006.
B The PEN assessment found many National Institutes of Health (NIH)
  research projects to have some relevance to addressing nanotechnology
  risks, but the majority of these projects were not primarily focused
  in risk-related research.
C Many of the NSF projects were found to have a degree of relevance to
  nanotechnology risk, but few were specifically focused on addressing
  environment, health and safety issues.


    Senator Kerry. We're delighted. Thank you. Very helpful.
    Dr. Ferguson?

         STATEMENT OF P. LEE FERGUSON, Ph.D., ASSISTANT

             PROFESSOR, DEPARTMENT OF CHEMISTRY AND

           BIOCHEMISTRY, UNIVERSITY OF SOUTH CAROLINA

    Dr. Ferguson. Good afternoon. I wish to thank you, Senator 
Kerry and the other members of the Subcommittee, for inviting 
me to testify today.
    I'm Lee Ferguson, an Assistant Professor at the University 
of South Carolina.
    Since 2003, I have led a team of researchers investigating 
the fate and effects of nanomaterials in the environment. I 
feel strongly about the need to continue and to expand this 
research and I'm happy to talk with you today about it.
    My primary point is that development and commercialization 
of nanotechnology may present unforeseen hazards to 
environmental and human health. It is therefore essential that 
scientific research be continued to address this issue.
    Since the initial authorization of the National 
Nanotechnology Initiative, the Federal Government has supported 
scientific research into the environmental and health impacts 
of nanotechnology. There now exists a growing body of work 
addressing the risks associated with nanomaterials. However, it 
is clear that we have much to learn.
    The current state of the science with respect to 
environmental health and safety issues of nanotechnology can be 
summarized briefly. We have learned that nanomaterials are very 
difficult to measure accurately in environmental and biological 
systems. It has become clear that existing analytical methods 
are simply inappropriate or insufficient to make these 
measurements.
    We've also learned that nanomaterials may be transported in 
the environment in ways that are not necessarily predictable 
from existing scientific models and that nanomaterials may 
interact directly with pollutants of concern, such as PCBs and 
heavy metals.
    Finally, there are indications of risks associated with 
exposure of humans and ecosystems to nanomaterials. These risks 
include direct toxicity and uptake of nanomaterials into 
biological tissues.
    Through the NNI, the Federal Government has developed a 
strategy aimed at prioritizing research needs with respect to 
environmental health and safety issues of nanotechnology. This 
prioritization is essential so that an organized effort can be 
made to address environmental and health impacts of 
nanotechnology as this technology is developed. This last point 
is critical. We cannot afford to wait until nanotechnology is 
fully developed to begin assessing its risks and hazards to 
human health and the environment.
    I wish to highlight specific areas of research that I 
believe deserve particular attention. Without methods for 
detecting and characterizing nanomaterials in the environment 
and in human tissues, nanomaterial exposure assessment is 
impossible.
    Research into analytical methods and metrology of 
nanomaterials is a top priority and support for this work 
should be accelerated within the NNI.
    With respect to research on environmental and human health 
effects of nanomaterials, I stress the need to develop 
standardized testing methods that are appropriate to assessing 
toxicity and biological uptake of nanomaterials and their 
manufacturing byproducts.
    There's a critical need to assess the human and ecological 
exposure after release of nanomaterials into the ambient 
environment. We still have very limited knowledge of the 
treatability of nanotechnology waste as well as the routes by 
which nanomaterials may enter and move within our air and 
water.
    Finally, our ability to assess and predict risk of emerging 
nanotechnologies to human and environmental health depends on 
understanding the mechanisms by which nanomaterials act on 
biological systems. This understanding represents a grand 
scientific challenge and will require a will require a 
significant and well-supported effort.
    During reauthorization of the NNI, I ask you to consider 
the resources that are needed now and in the future for 
addressing these concerns. As you've heard, between 2005 and 
2009, expenditures within the NNI on EHS research have 
increased from 3 percent to approximately 5 percent of the 
total NNI budget.
    A significant increase in our scientific understanding of 
the environmental and health impacts of nanotechnology will 
require a more substantial investment. A realistic target in 
the very near term should be to increase the level of funding 
for EHS research on nanotechnology to exceed 10 percent of the 
NNI budget.
    I wish to close by saying that we have a unique opportunity 
now. Through the NNI, we have begun to address the EHS risks of 
nanotechnology simultaneously with the development of this 
technology. We have only to look at the lessons learned from 
PCBs and other legacy chemical contaminants to realize the 
dangers of waiting until new technologies mature to assess 
their environmental and health risks.
    I urge this Committee to consider these concerns during the 
reauthorization of NNI.
    Thank you for considering my testimony.
    [The prepared statement of Dr. Ferguson follows:]

  Prepared Statement of P. Lee Ferguson, Ph.D., Assistant Professor, 
 Department of Chemistry and Biochemistry, University of South Carolina
Oral Testimony
    Good afternoon. I wish to thank Senator Kerry and the other members 
of the Subcommittee for inviting me to testify today. I am Lee 
Ferguson, an assistant professor at the University of South Carolina. 
Since 2003, I have led a team of researchers investigating the fate and 
effects of nanomaterials in the environment. I feel strongly about the 
need to continue and expand this research, and I'm happy to talk with 
you about it.
    Primary point: Development and commercialization of nanotechnology 
may present unforeseen hazards to environmental and human health--it is 
essential that scientific research be continued to address this issue.
    Since the initial authorization of the National Nanotechnology 
Initiative in 2003, the Federal Government has supported scientific 
research into the environmental and health impacts of 
nanotechnology.\1\ There exists now a growing body of work addressing 
the risks associated with nanomaterials; however, it is clear that we 
still have much to learn.
---------------------------------------------------------------------------
    \1\ For example, since 2003 the U.S. EPA National Center for 
Environmental Research has coordinated extramural funding efforts among 
EPA, NSF, DOE, NIOSH, and NIEHS to address environmental and health 
effects of nanomaterials (http://es.epa.gov/ncer/nano/index.html).
---------------------------------------------------------------------------
    What we know: The current state of the science with respect to 
environmental, health, and safety issues of nanotechnology can be 
summarized briefly.

   We have learned that nanomaterials are very difficult to 
        measure accurately in environmental and biological systems. It 
        has become clear that existing analytical methods are simply 
        inappropriate or insufficient to make these measurements.

   We also have learned that nanomaterials may be transported 
        in the environment in ways that are not necessarily predictable 
        from existing scientific models and that nanomaterials may 
        interact directly with pollutants-of-concern such as PCBs and 
        heavy metals.

   Finally, there are indications of risks associated with 
        exposure of humans and ecosystems to nanomaterials. These risks 
        include direct toxicity and uptake of nanomaterials into 
        biological tissues.

    Federal prioritization: Through the NNI, the Federal Government has 
developed a roadmap aimed at prioritizing research needs with respect 
to environmental, health, and safety issues of nanotechnology.\2\ This 
prioritization is essential so that an organized effort can be made to 
address environmental and health impacts of nanotechnology as this 
technology is developed. This last point is critical--we cannot afford 
to wait until nanotechnology is fully developed to begin assessing its 
risks and hazards to human health and the environment.
---------------------------------------------------------------------------
    \2\ The five primary research categories identified for priority 
research consideration are: (1) Instrumentation, Metrology, and 
Analytical Methods; (2) Nanomaterials and Human Health; (3) 
Nanomaterials and the Environment; (4) Human and Environmental Exposure 
Assessment; and (5) Risk Management Methods. These categories and the 
associated research strategies are outlined in three documents: 
National Science and Technology Council 2006, The National 
Nanotechnology Initiative: Environmental, Health, and Safety Research 
Needs for Engineered Nanoscale Materials, http://www.nano.gov/
NNI_EHS_research_needs.pdf; National Science and Technology Council 
2007, Prioritization of Environmental, Health, and Safety Research 
Needs for Engineered Nanoscale Materials, http://www.nano.gov/
Prioritization_EHS_
Research_Needs_Engineered_Nanoscale_Materials.pdf; and National Science 
and Technology Council 2008, The National Nanotechnology Initiative: 
Strategy for Nanotechnology-Related Environmental, Health, and Safety 
Research, http://www.nano.gov/NNI_EHS_Research_
Strategy.pdf.
---------------------------------------------------------------------------
    Future research needs: I wish to highlight specific areas of 
research that I believe deserve particular attention:

   Without methods for detecting and characterizing 
        nanomaterials in the environment and in human tissues, 
        nanomaterial exposure assessment is impossible. Research into 
        analytical methods and metrology of nanomaterials is a top 
        priority and support for this work should be accelerated within 
        the NNI.

   With respect to research on environmental and human health 
        effects of nanomaterials, I stress the need to develop 
        standardized testing methods that are appropriate to assessing 
        toxicity and biological uptake of nanomaterials and their 
        manufacturing byproducts.

   There is a critical need to assess routes of human and 
        ecological exposure after release of nanomaterials into the 
        ambient environment. We still have very limited knowledge of 
        the treatability of nanotechnology wastes as well as the routes 
        by which nanomaterials may enter and move within our air and 
        water.

   Finally, our ability to assess and predict risk of emerging 
        nanotechnologies to human and environmental health depends on 
        understanding the mechanisms by which nanomaterials act on 
        biological systems. This understanding represents a grand 
        scientific challenge and will require significant and well-
        supported effort.

    During reauthorization of the NNI, I ask you to consider the 
resources that are needed now and in the future for addressing these 
concerns. Between 2005 and 2009, expenditures within the NNI on EHS 
research have increased from 3 percent to approximately 5 percent of 
the total NNI budget. A significant increase in our scientific 
understanding of the environmental and health impacts of nanotechnology 
will require a more substantial investment. A realistic target in the 
very near term should be to increase the level of funding for EHS 
research on nanotechnology to exceed 10 percent of the NNI budget.
    I wish to close by saying that we have a unique opportunity now--
through the NNI we have begun to address the EHS risks of 
nanotechnology simultaneously with the development of this technology. 
We have only to look at the lessons learned from PCBs and other legacy 
chemical contaminants to realize the dangers of waiting until new 
technologies are mature to assess their environmental and health risks. 
I urge this Committee to consider these concerns during the 
reauthorization of the NNI. Thank you for considering my testimony.
Written Statement
    I wish to thank Senator Kerry and the other members of the 
Subcommittee for inviting me to testify about the current status and 
future needs of research into the environmental, health, and safety 
issues of nanotechnology. I am Lee Ferguson, an assistant professor of 
chemistry and biochemistry at the University of South Carolina. Since 
2003, I have led a team of researchers at USC, funded by the U.S. EPA 
Science to Achieve Results (STAR) program \3\ and organized within the 
USC NanoCenter investigating the fate and health effects of 
nanomaterials in the environment. Our overall goal is to elucidate the 
potential for manufactured nanomaterials to be transported within the 
aquatic environment and the associated hazards of such transport to 
both aquatic and human life. I feel strongly about the need to continue 
and expand this research, and I'm happy to talk with you about it.
---------------------------------------------------------------------------
    \3\ U.S. EPA STAR Program: Chemical and biological behavior of 
carbon nanotubes in estuarine sedimentary systems. Award # RD-83171601 
P. Lee Ferguson, PI.; G. Thomas Chandler; and Walter A. Scrivens, 
University of South Carolina, Columbia, SC.
---------------------------------------------------------------------------
    Primary point: Development and commercialization of nanotechnology 
may present unforeseen hazards to environmental and human health--it is 
therefore essential that scientific research be conducted to address 
this issue.
    Since the initial authorization of the National Nanotechnology 
Initiative in 2003, the Federal Government has continuously supported 
intramural and extramural scientific research into the environmental 
and health impacts of nanotechnology.\4\ As a consequence, there exists 
now a growing body of work addressing the risks associated with 
nanomaterials; however, it is clear that we still have much to learn.
---------------------------------------------------------------------------
    \4\ For example, since 2003 the U.S. EPA National Center for 
Environmental Research has coordinated extramural funding efforts among 
EPA, NSF, DOE, NIOSH, and NIEHS to address environmental and health 
effects of nanomaterials (http://es.epa.gov/ncer/nano/index.html).
---------------------------------------------------------------------------
    What we know: The emergence of nanotechnology is an exciting 
opportunity that could result in significant contributions to the 
treatment of disease, development of more effective polymer composites, 
fuel cells and capacitors, and clean-up of polluted groundwater. 
Although the use of nanoparticles may allow for significant advances in 
science and technology, assessment of potential negative health and 
environmental impacts on humans, non-human biota, and ecosystems is 
imperative before their widespread production and use. The same 
properties that make these particles desirable, may also contribute to 
their toxic potential and extensive studies to address both the acute 
and chronic effects of nanoparticles are necessary to determine if 
negative health and environmental impacts outweigh the potential 
benefits. In humans, a concerning route of exposure is via direct 
inhalation, both in the workplace where these particles are 
manufactured and used, and from the innate environment contaminated 
with particles released from anthropogenic and natural 
sources.\5\,\6\ Other routes of exposure that are currently 
a concern include dermal and dietary. The current state of the science 
with respect to environmental, health, and safety issues of 
nanotechnology can be summarized briefly.
---------------------------------------------------------------------------
    \5\ Maynard AD, Baron PA, Foley M, Shvedova AA, Kisin ER, 
Castranova V. Exposure to carbon nanotube material: aerosol release 
during the handling of unrefined single-walled carbon nanotube 
material. J Toxicol Environ Health A 2004; 67: 87-107.
    \6\ Nel A, Xia T, Madler L, Li N. Toxic potential of materials at 
the nanolevel. Science 2006; 311: 622-627.

   We have learned that nanomaterials are very difficult to 
        measure accurately in environmental and biological systems--
        this greatly complicates assessment of occupational and 
        environmental exposure as well as occurrence and fate of these 
        materials in the environment. It has become clear that existing 
        analytical methods (e.g., those designed for detecting and 
        quantifying chemical contaminants) are simply inappropriate or 
        insufficient to make these measurements.\7\
---------------------------------------------------------------------------
    \7\ U.S. Environmental Protection Agency. 2007. Nanotechnology 
White Paper. Washington, D.C. EPA/100/B-07/001. p. 40-41.

   We also have learned that nanomaterials may be transported 
        in the environment in ways that are not necessarily predictable 
        from existing models for more conventional contaminants, and 
        that nanomaterials may interact directly with pollutants-of-
        concern such as PCBs and heavy metals, potentially leading to 
        mobilization and enhanced toxicity.\8\
---------------------------------------------------------------------------
    \8\ Ferguson PL, Chandler GT, Templeton RC, DeMarco A, Scrivens, 
WA, Englehart, B. Influence of sediment-amendment with single-walled 
carbon nanotubes and diesel soot on bioaccumulation of hydrophobic 
organic contaminants by benthic invertebrates. Environ. Sci. Technol. 
2008; in press.

   Finally, there are clear indications of risks associated 
        with exposure of humans and ecosystems to nanomaterials. These 
        risks include direct toxicity and uptake of nanomaterials into 
        biological tissues.\9\,\10\ However, the mechanisms 
        by which nanomaterials exert biological effects are poorly 
        known and there is a clear need for basic research directed at 
        new methods for assessing ``nanotoxicology''.
---------------------------------------------------------------------------
    \9\ Lam CW, James JT, McCluskey R, Hunter RL. Pulmonary toxicity of 
single-wall carbon nanotubes in mice 7 and 90 days after intratracheal 
instillation. Toxicol Sci 2004; 77: 126-134.
    \10\ Templeton RC, Ferguson, PL, Washburn, KM, Scrivens, WA, 
Chandler, GT. Life-cycle effects of single-walled carbon nanotubes 
(SWNTs) on an estuarine meiobenthic copepod. Environ. Sci. Technol. 
2006; 40: 7387-7393.

    Federal prioritization: Through the NNI, the Federal Government has 
developed and refined a roadmap aimed at identifying and prioritizing 
research needs with respect to environmental, health, and safety issues 
of nanotechnology.\11\ The five primary research categories identified 
are: (1) Instrumentation, Metrology, and Analytical Methods; (2) 
Nanomaterials and Human Health; (3) Nanomaterials and the Environment; 
(4) Human and Environmental Exposure Assessment; and (5) Risk 
Management Methods.
---------------------------------------------------------------------------
    \11\ This strategy is outlined in three documents: National Science 
and Technology Council 2006, The National Nanotechnology Initiative: 
Environmental, Health, and Safety Research Needs for Engineered 
Nanoscale Materials, http://www.nano.gov/NNI_EHS_research_
needs.pdf; National Science and Technology Council 2007, Prioritization 
of Environmental, Health, and Safety Research Needs for Engineered 
Nanoscale Materials, http://www.nano.gov/
Prioritization_EHS_Research_Needs_Engineered_Nanoscale_Materials.pdf; 
and National Science and Technology Council 2008, The National 
Nanotechnology Initiative: Strategy for Nanotechnology-Related 
Environmental, Health, and Safety Research, http://www.nano.gov/
NNI_EHS_Research_Strategy.pdf.

    The Nanoscale Science, Engineering, and Technology (NSET) 
subcommittee of the National Science and Technology Council (NSTC) has 
done a commendable job of focusing the disparate interests of the 
Federal agencies party to the NNI such that an organized effort can be 
made to address environmental and health impacts of nanotechnology as 
this technology is developed. This last point is critical--we cannot 
afford to wait until nanotechnology is fully integrated within our 
commercial enterprises to begin assessing its risks and hazards to 
human health and the environment.
    Future research needs and challenges: Nanomaterials have not been 
well characterized in terms of their environmental occurrence, 
behavior, and toxic potential even though they may contribute to 
occupational and general air/water pollution through manufacturing and 
waste disposal as well as through inclusion in drug delivery and 
therapeutic applications. Large data gaps exist with regard to our 
basic understanding of the potential for manufactured nanoparticles to 
cause deleterious effects on human as well as ecological systems.
    In assessing possible health and environmental effects of 
manufactured nanomaterials, it is important to study their impact in 
relevant model systems and in chemical forms reflective of 
occupational/environmental exposures. There are many different types of 
nanoparticles/nanomaterials and each of these will have a behavior (for 
example toxicity or transport) dictated by chemical and physical 
factors unique to the material. Below, I comment on specific areas of 
research within the framework outlined by the NSET subcommittee that I 
believe deserve particular attention:

   Without methods for detecting and characterizing 
        nanomaterials in the environment and in human tissues, exposure 
        assessment and environmental occurrence and fate studies are 
        impossible. I wholeheartedly agree with the NSET subcommittee 
        that research into analytical methods and metrology of 
        nanomaterials is a top priority and support for this work 
        should be accelerated within the NNI.

   With respect to research on environmental and human health 
        effects of nanomaterials, I stress the need to develop 
        standardized testing methods that are appropriate to assessing 
        toxicity and biological uptake of nanomaterials.

   It is clear from my own work as well as that of others that 
        we must consider not only the health and environmental risks of 
        manufactured nanomaterials but also that of byproducts 
        generated during manufacturing. This is a relatively unexplored 
        area of research and should be considered.

   There is a critical need to assess routes of human and 
        ecological exposure after release of nanomaterials into the 
        ambient environment. We still have a very limited knowledge 
        base regarding the treatability of nanotechnology wastes as 
        well as the routes by which nanomaterials may enter and move 
        within our air and water. This should be a top priority for EHS 
        research within the NNI.

   Finally, our ability to accurately assess and predict risk 
        of emerging nanotechnologies to human and environmental health 
        is critically dependent on our understanding of the mechanisms 
        by which nanomaterials act on biological systems at the 
        cellular and molecular level. This understanding represents a 
        grand scientific challenge and will require significant and 
        well-supported effort.

    As you look to reauthorization of the NNI, I ask you to consider 
the resources that are critically needed now and in the future for 
addressing these emerging concerns. In 2005, expenditures through the 
NNI budget on nanotechnology-related EHS research totaled approximately 
$35 million or 3 percent of the total NNI budget. As of today, the NNI 
budget request for 2009 allocates $76 million or approximately 5 
percent of the total request to research on EHS issues of 
nanotechnology. It is very clear that a significant increase in our 
collective scientific understanding of the environmental and health 
impacts of nanotechnology will require a more substantial investment. A 
realistic target in the very near term should be to increase the level 
of funding for EHS research on nanotechnology to meet or exceed 10 
percent of the NNI budget.
    I wish to close by saying that we have a unique opportunity now--
through the efforts of the NNI we have begun the process of addressing 
EHS risks of nanotechnology simultaneously with the development of this 
technology. We have only to look back at the lessons learned from PCBs 
and other legacy chemical contaminants to realize the dangers of 
waiting until new technologies are mature to assess their environmental 
and health risks. I urge this Committee to consider these concerns 
during the reauthorization of the NNI. Thank you for considering my 
testimony. In the Appendix below I have included a summary of the 
research currently being conducted at the University of South Carolina 
on environmental and human health issues in nanotechnology.
Appendix: Ongoing Research at the University of South Carolina on the 
        Environmental Fate and Health Effects of Manufactured 
        Nanomaterials
    Research Team: Dr. Lee Ferguson, Dr. Tara Sabo-Attwood, Dr. G. 
Thomas Chandler, Dr. John Ferry, Dr. Tom Vogt, Dr. Gene Feigley, Dr. 
Alan Decho, Dr. Sean Norman, Dr. Lee Newman, and Dr. Shosaku Kashiwada
    Although the use of nanomaterials may allow for significant 
advances in science and technology, assessment of potential negative 
health and environmental impacts on humans, non-human biota, and 
ecosystems is imperative. The same properties that make these particles 
desirable, may also contribute to their toxic potential. Our research 
team at USC is studying the potential toxic effects that various 
nanoparticles have on humans, microbial communities, and aquatic 
ecosystems. This is an interdisciplinary effort which involves 
cooperation among chemists, physicists, biologists, toxicologists, and 
microbial ecologists, among others. The focus of our research efforts 
are described below. For more information, please visit http://www.nano
.sc.edu/thrust--nanoenvir.asp.
Subproject #1: Pulmonary Toxicity of Nanomaterials
Project leaders: Tara Sabo-Attwood and Gene Feigley
    In humans, the dominant route of exposure is suspected to occur via 
direct inhalation, both in the workplace where these particles are 
manufactured and used, and from the environment contaminated with 
particles released from anthropogenic and natural sources. Health-
effects studies of air exposure to nanomaterials will require design of 
novel inhalation toxicology facilities and filtration technologies not 
available presently in the United States. Our group is uniquely 
qualified to design, build and test a small-scale prototype facility to 
assess aerosol generation, fate and transport. Construction of this 
prototype will lead to the development of inhalation exposure protocols 
for relevant animal models to assess the toxicological impacts of 
nanoparticles. In addition, we have already established complimentary 
in vitro studies that reveal toxic effects of single-walled carbon 
nanotube (SWNT) in human lung cells, and are currently exploring the 
molecular mechanisms responsible for this toxicity.
Subproject #2: Environmental Fate, Transport and Toxicity of Carbon 
        Nanomaterials in Aqueous Systems
Project leaders: Tom Chandler, Lee Ferguson, Shosaku Kashiwada
Project Focus:
Synthesis of unique radioisotope-labeled nanomaterials for 
        toxicological, fate and environmental transformation studies
    Single-walled carbon nanotube (SWNT) fate in aquatic/sedimentary 
systems is still largely under-explored. The USEPA has supported 
research by our team at USC aimed at elucidating the toxic effects and 
environmental fate and transport behavior of SWNT in estuarine 
environments. Our results have shown that manufacturing byproducts of 
SWNT are toxic to estuarine meiobenthic copepods and that copepods 
ingest but do not bioaccumulate SWNT from sediments. In addition, we 
have shown that SWNT are highly sorptive to hydrophobic organic 
contaminants such as PCBs and PAHs, and that organisms ingesting SWNTs 
with associated organic contaminants can bioaccumulate the associated 
organics in their tissues. Studies on environmental fate of SWNT under 
simulated estuarine conditions reveal that SWNT materials aggregate 
strongly and agglomerate to natural particles (e.g., clay and sand) in 
the presence of high ionic strength solutions (e.g., seawater), but 
that this behavior is inhibited by the presence of high concentrations 
of dissolved organic matter.
    As part of our EPA-funded research, we have been developing a 
repository of pure, radio-labeled carbonaceous nanomaterials for 
national environmental toxicology and chemistry uses. With our 
collaborator Research Triangle Institute, Inc. we have custom 
synthesized single-walled carbon nanotubes. We are using these 
materials to perform experiments aimed at uptake/bioaccumulation and 
linked acute/chronic toxicity of SWNTs in at least two model 
invertebrate systems, fish and marine invertebrates (copepods). The 
14C-SWNT materials are also being used to study particulate sorption, 
aggregation, transport in porous media, and bio/phototransformation in 
a laboratory setting.
Subproject #3: Microbial Applications and Degradation of Nanomaterials
Project leaders: Alan Decho, Sean Norman, John Ferry
    Biofilms consist of bacteria cells attached to a surface that 
produce a large network of extracellular polymeric secretions (EPS). In 
doing so, bacterial cells are able to protect themselves against 
antimicrobial agents, and manipulate their local environment. Biofilms 
commonly occur in natural and engineered environments. However, their 
presence often incurs multibilllion dollar costs for hospitals (e.g., 
most hospital-acquired infections are biofilms), industry (e.g., cause 
metal corrosion and biofouling, reduce heat transfer efficiency), 
potable water system maintenance (i.e., protect pathogenic bacteria 
against chlorination), as well as being important in natural 
environments. Our research focuses on using nannoparticles to detect 
and monitor biofilms, study how the nanoparticles are captured and 
sequestered, and determine if the bacteria degrade these particles in 
various settings.

   Biofilm Nanosensors: Understanding biofilm processes, and 
        controlling their costly effects is important has important 
        economic, health, and environmental implications. The 
        development of specific Nanosensors for monitoring bacterial 
        processes within biofilms is an important step in the in-situ 
        detection and monitoring of biofilm processes. Our studies aim 
        to develop specific sensors that can be `captured' by a 
        biofilm, then provide important physical/chemical/metabolic 
        information regarding processes occurring within the biofilm.

   Capture and Sequestration of NanoParticles by Biofilms. 
        Bacterial biofilm are an efficient filter for particulates, 
        colloids and dissolved molecules. They are likely important in 
        the capture and concentration of nanoparticles under different 
        Environmental conditions. We strive to: (1) understand how 
        biofilms sequester nanoparticulates, and (2) manipulate 
        biofilms to enhance capture efficiency.

   Biofilm Test Systems: This phase involves the development of 
        biofilm culture systems that accurately mimic natural biofilm 
        populations. Such systems will be coupled to CSLM, Raman/CSLM, 
        and other analysis instrumentation for precise testing of 
        antimicrobial approaches on living and engineered nanosurfaces.
Microbial Interactions and Degradation
    This project is directed at determining the influence of 
nanomaterials on environmental microbial activity. Nanomaterials have 
unique antimicrobial properties that may be exploited in environmental 
disinfection and/or infection control. There are also therapeutic 
applications for this research relative to artificial implants, 
prostheses, etc.
    Specific Goals: Particular attention will be paid to questions such 
as: Do the materials in question support or inhibit the formation of 
biofilm communities? Are microbial communities capable of affecting the 
structure of associated nanomaterials (i.e., metabolically transforming 
them)? Do nanomaterials exert selective population pressure on 
microbial communities (i.e., selectively targeting one particular type 
of microbe vs another in mixtures)?
    We will develop `nanoprobes' (fluor-, SERS-based) for biofilm 
investigations in environmental studies. We will also develop/build 
biofilm flow-through cells and bioreactors for live culturing, and 
observation, of biofilms in the presence/absence of nanomaterials using 
our new confocal (CSLM) and Raman-confocal systems in ENHS.
Subproject #4: Photocatalysis of Reactions Mediated by Nanomaterials
Project leaders: John Ferry, Tom Vogt
Project Focus:
    Development of nanostructured materials with applications for 
environmental modification or remediation is the focus of this project. 
We are primarily interested in developing mixed metal oxide visible 
light activated photocatalysts for effecting sunlight activated 
oxidation in the aqueous phase. The materials focus will be active 
catalysts (nanoparticulate metal oxides) that engage in direct electron 
transfer with substrates and passive materials that may exhibit 
catalytic properties by promoting close association (such as various 
nanocarbons). We will monitor the degradation of catalytically active 
nanomaterials in environmental matrices, using microscopic and 
molecular techniques. We will assay the catalytic activity of the 
material during degradation, which is an exploratory evaluation of the 
structure activity relationship. We will assay the physico-chemical 
behavior of the material upon exposure to environmental conditions 
(e.g., aggregation, adsorption of ``poisons'' that affect catalyst 
activity, etc). We will explore application venues for materials that 
are effective photoactivated oxidants (drinking water and surface 
disinfection, biomedical applications, etc).
Subproject #5: Plant Interactions with Nanoparticles
Project leaders; Lee Newman, Tara Sabo-Attwood, Jason Unrine, Cathy 
        Murphy
Project Focus:
    Plant uptake and response to nanoparticles will have significance 
on many levels. First and foremost is to understand the parameters of 
plant uptake of the particles; what types (i.e., chemical composition) 
of particles are taken up, is there a size limit or shape preference, 
do the chemicals used to cap the particles impact uptake? Could plant 
compounds affect the bioavailability of particles in a natural system? 
In independent studies, we have already exposed the model plant, 
Nictoianna xanthi, to several different sized gold nanosphere, gold 
nanosheres with different capping chemicals, and silver nanospheres. 
Through simple light microscopy we have identified spheres of 3-5nm 
within the vascular tissue of the roots of the plants, and aggregation 
of larger spheres on the outside of the roots. We have observed 
enhanced precipitation of the particles when exposed to root exudates. 
We have also had a plants analyzed by one the using the beam lines at 
Brookhaven National Laboratory's Synchrotron Light Source, and had 
XANES collected for selected areas of the plants analyzed. We found 
that the particles were retained as gold, and not gold salts within the 
plant, and that the pattern of accumulation differed within the plant 
tissues.

    Senator Kerry. Thank you, Dr. Ferguson.
    Dr. Goel?

         STATEMENT OF ANITA GOEL, M.D., Ph.D., FOUNDER,

      CHAIRMAN, AND SCIENTIFIC DIRECTOR, NANOBIOSYM, INC.

                AND FOUNDER, CHAIRMAN, AND CEO,

                  NANOBIOSYM DIAGNOSTICS, INC.

    Dr. Goel. Thank you, Chairman Kerry and members of the 
Subcommittee, for inviting me to share this testimony with you.
    My name is Dr. Anita Goel. I'm the Chairman and CEO of 
Nanobiosym, Inc., and Nanobiosym Diagnostics. Nanobiosym 
focuses on creating innovation at the nexus of physics, 
medicine and nanotechnology. Nanobiosym Diagnostics is focused 
single-mindedly on commercializing a chip technology we've 
developed out of that nexus which will enable a future cell 
phone-like device in which you could put a drop of blood or 
saliva on a chip, stick it into the device and within a few 
minutes be able to diagnose what kind of infectious disease a 
person has.
    This has, of course, many markets in the developed world, 
but we're also looking at commercializing this in the 
developing world. I want to share with the Committee a few 
aspects of our experience in doing that.
    Taking the ability of diagnosing disease out of a pathology 
lab and the basement of a hospital and putting it into people's 
own hands will have a transformative effect on healthcare 
globally, because it will bring the ability to diagnose disease 
into doctors' offices, patients' bedsides, people's homes, or 
even into rural remote villages around the world.
    My own background for the past 5 years I've been a 
nanotechnology entrepreneur and over 15 years have been a 
scientist in the field of nanotechnology, originally beginning 
at Stanford before the word ``nanotechnology'' became a 
buzzword and then at Harvard and MIT where I did my Ph.D. in 
Physics and an M.D. in medicine, two fields which traditionally 
haven't talked to each other but in my own mind come together 
at the nanoscale.
    The National Nanotechnology Initiative has been critical to 
my company. It has not only helped us in terms of direct 
funding but it has been instrumental in creating the landscape 
and the infrastructure for innovation and that's been important 
in creating the environment that was needed for what we did.
    I believe that the next 5 years could be even more profound 
if we make the right decisions, because as a Nation, we're 
really poised at the juxtaposition or a junction between basic 
R&D and commercialization. At Nanobiosym, we are not only 
commercializing our research by translating these basic 
insights into products, but also seeking to maximize the impact 
these insights can have on global challenges.
    From our experience in bridging the gamut from basic R&D 
innovation to establishing proof of concept to commercializing 
products and also penetrating into emerging global markets, I 
believe there are four key lessons that we have learned that I 
would like to suggest to this Committee to consider as they 
build the roadmap for the NNI reauthorization.
    Number (1) Let's talk about education. Obviously we need a 
qualified work force, but more than that, we need to think 
about the kind of people we are creating. We need to look at 
transcending conventional boundaries in our educational system, 
the boundaries between different academic disciplines, the 
boundaries between academia and corporate training programs, 
and even between the United States and international training 
programs.
    Just like other countries send their students and people to 
train in our country, I think we need to send our people 
worldwide not only to train about nanotechnology but also to 
learn about the broader global context.
    Number (2) Bridging the gap between fundamental research 
and products and commercialization. There are programs like the 
SBIR and the TIP Program which are very instrumental in 
bridging that valley of death, if you will, but, you know, 
there are other countries that are investing very heavily into 
very concentrated areas as a strategy, economic development 
strategy, if you will, to leapfrog themselves into a major 
player in the nanotechnology economy.
    I think an analogy can be drawn with the automobile 
industry where, as you know, many countries can focus on 
building the best bumper or the best headlight. As Americans, 
however, we're uniquely positioned to create an entire 
nanotechnology economy. Just as we created the automobile 
economy that enabled us to capitalize on its mobility and 
create a whole system of jobs and infrastructure.
    I think we need to focus on how nanotechnology works at the 
systems level, not only in basic research but also bridging 
into commercial products and solving global problems.
    Number (3) The third key lesson is the broader impact 
nanotechnology can have on global challenges, whether it be the 
energy crisis, the environmental problem or healthcare.
    Because it's such an interdisciplinary field where many 
fields come together in one melting pot and it has impact 
across various sectors, it really provides unique fresh 
approach to create, if you will, disruptive solutions to 
existing global challenges.
    In my company, for example, not only are we looking at 
taking our technology to impact the way healthcare is practiced 
here and around the world but we are seeing that the same 
platform technology has impact on food testing, water safety 
testing, environmental testing, even crop pathogen testing.
    So the same platforms can have many different kinds of 
applications. We need to think more broadly and more 
holistically in terms of how we leverage what we have. There's 
a lot of concern these days about the potential negative 
impacts on safety or on the environment of nanotechnology. I 
think that nanotechnology can help be part of the solution, not 
the problem, if we broaden our view.
    Number (4) Fourth, I think there's a historically unique 
opportunity right now to bring emerging technologies into 
emerging global markets. I think that fields like 
nanotechnology are going to force us to think and even act 
globally.
    In our company, for example, we follow the precedent of the 
cell phone industry. In the telecom field, you saw a paradigm 
shift when communications and computing devices became 
portable. You saw even poor villagers and beggars in developing 
world countries starting to use cell phones once the cost came 
down. Part of it is they didn't have the land line 
infrastructure to displace.
    We envision driving a similar paradigm shift in the 
healthcare industry where the ability to diagnose disease can 
be taken out of a hospital and put into people's own hands and 
even transported to remote areas of the world. I believe the 
key to doing that is cutting the cost, making it affordable, 
but also forming global partnerships.
    Part of our strategy as a company has been, and I would 
propose the Committee consider this as part of their roadmap, 
is that we as Americans should engage other global partners in 
addressing global challenges and adopting some of the 
developing world problems as part of our own because part of 
those problems help stimulate new solutions.
    Finally, I would like to thank you, Chairman Kerry, as well 
as the members of the Committee. Let me end by saying I believe 
we are uniquely poised to harness nanotechnology to fuel and 
revitalize our own economy if we think about it in a more 
global fashion.
    Thank you very much.
    [The prepared statement of Dr. Goel follows:]

 Prepared Statement of Anita Goel, M.D., Ph.D., Founder, Chairman, and 
 Scientific Director, Nanobiosym, Inc. and Founder, Chairman, and CEO, 
                      Nanobiosym Diagnostics, Inc.
    Chairman Kerry, Ranking Member Ensign, and members of the 
Subcommittee, I would like to thank you for the opportunity to testify 
on the reauthorization of the National Nanotechnology Initiative.
    My name is Dr. Anita Goel, and I am the Founder, Chairman, and 
Scientific Director of Nanobiosym, Inc. and the Founder, Chairman, and 
CEO of Nanobiosym Diagnostics, Inc. Nanobiosym was founded as an idea 
lab and research institute to innovate at the convergence of physics, 
medicine and nanotechnology. Nanobiosym, and its commercial partner 
Nanobiosym Diagnostics, have been privately developing Gene-RADAR, a 
portable nanotechnology-enabled platform that can rapidly and 
accurately detect genetic fingerprints from any biological organism. 
The company's vision is to give patients worldwide real-time access to 
their own diagnostic information via low-cost handheld devices. We are 
based in Medford, Massachusetts.
    I first began working as a scientist in the field of nanotechnology 
over fifteen years ago at Stanford University--well before the term 
``nanotechnology'' had become a buzz word. I simultaneously trained as 
both a physicist and physician, with my PhD in Physics from Harvard 
University and my MD from the Harvard-MIT Joint Division of Health 
Sciences and Technology (HST). For almost 5 years now, I have been a 
nanotechnology entrepreneur as the Founder, Chairman, and CEO of 
Nanobiosym and Nanobiosym Diagnostics. We are developing commercial 
products targeted for global markets--in both the developed and 
developing worlds.
What is Nanotechnology?
    Nanotechnology to me is the ability to probe and control matter and 
systems on increasingly finer scales, at the nanoscale 
(10caret-9 m) and smaller. This is important because it 
gives us a new level of control over matter. Nanotechnology is a 
platform science which combines several traditional fields such as 
physics, chemistry, biology, and medicine. The applications that stem 
from these capabilities likewise cut across several different sectors 
from medicine and energy to the environment and materials science. For 
example, the ability to control the assembly and arrangement of atoms 
and molecules in a nanomaterial could give it the durability of steel 
and the weight of plastic.
    Nanotechnology provides a platform for innovation across 
conventional boundaries of science, technology, and commerce. 
Furthermore, by its intrinsic multidisciplinary nature, it fosters 
collaboration across conventional political and economic boundaries.
Nanobiosym and the National Nanotechnology Initiative
    Nanobiosym has been the direct beneficiary of the National 
Nanotechnology Initiative. Without the resources that the Initiative 
brought to bear--not only funding, but also coordination and a sense of 
national priority--Nanobiosym would not be where it is today. We have 
been fortunate to work with several of the agencies participating in 
the Initiative, and have received multiple rounds of competitive 
funding grants from DARPA, AFOSR, Phase I and Phase II SBIR funding 
from DOE, and now more recently were awarded a defense contract from 
DTRA as some of our technology platforms transitioned from the pure R&D 
stage to the more applied or prototyping stage.
    As the Subcommittee considers how best to update and improve the 
Initiative, I hope that our experience as an emerging nanotechnology 
company (in moving across the gamut from science and technology 
innovation, to proof of concept development and developing commercial 
products for global markets) will help identify what has worked well 
and what could be improved to encourage other companies like us.
The Need for Reauthorization
    As Congress begins to consider reauthorizing the National 
Nanotechnology Initiative, it is important to understand that because 
the original authorization was so successful, the Nation's 
nanotechnology landscape dramatically changed in the last 5 years. The 
21st Century Nanotechnology Research and Development Act focused 
primarily on basic research. This led to dynamic growth in America's 
nanotechnology research infrastructure primarily in academic settings, 
and sowed the seeds of nanotechnology commercialization throughout the 
country.
    Today, 5 years later, we are beginning to see the results of this 
initial investment, as nanotechnology-enabled products start to enter 
the marketplace across the spectrum of industry sectors, from water 
purification to materials engineering to healthcare. While the success 
of the first 5 years gives us great hope, however, I cannot impress 
upon the Subcommittee enough that the growth of the next 5 years could 
be exponential. Building on the success of the National Nanotechnology 
Initiative's first 5 years, the United States has a historic 
opportunity to drive nanotechnology to maximize its impact on global 
challenges, including health, environment, energy, and even building 
the new global economy.
    The reauthorization of the National Nanotechnology Initiative 
should focus on four new areas in addition to basic research:

        1. improving nanotechnology education, which will supply a 
        qualified workforce for the American and global nanotechnology 
        economy;

        2. bridging the gap between research and commercialization, 
        which will help America drive the global nanotechnology 
        revolution;

        3. addressing environmental, health, safety, and other global 
        challenges, which will ensure that we can enjoy the many 
        benefits of nanotechnology while addressing any risks that may 
        arise; and

        4. bringing emerging technologies into emerging global markets.

    Each of these four areas has a direct impact on my company. 
Progress in each will enable Nanobiosym to bring its lifesaving 
products to market faster, to expand and provide quality jobs for more 
people, and to market our products to global markets in both the 
developed and developing world.
A Roadmap for Harnessing Nanotechnology to Drive the New Global 
        Economy
1. Nanotechnology Education
    If America is going to compete effectively in the global 
nanotechnology revolution, we need a highly skilled and qualified work 
force. We need scientists, engineers, and technicians who have a vision 
for nanotechnology, seek to innovate with it, and are capable of 
working at the nanoscale. We need professors and teachers who can 
educate about the nano world and we need business professionals who can 
turn the scientists' work into useful products. It is already difficult 
to meet the demand for PhDs with nanotechnology backgrounds, and that 
demand will only increase in the coming years.
    We need to spark interest in nanoscience, starting in grade school. 
We need to build a nanotech pipeline in education which will allow for 
a steady stream of qualified personnel to supply our labs and 
companies.
    Nanotechnology education, like nanotechnology research, is 
necessarily multidisciplinary. Because nanotechnology spans physics, 
materials science, chemistry, and biology, it needs to be taught 
throughout the science curriculum. And like other subjects, 
nanotechnology is best learned by doing. Programs that improve access 
to basic nanotechnology tools will help inspire a new generation of 
students to pursue careers in science because they will be able to see 
firsthand nanotechnology's potential.
    Our education system must start transcending conventional 
boundaries between academic disciplines, between academic and corporate 
training programs, and between U.S. and international training 
experiences. I would suggest the creation of more international 
exchange programs. Just as other countries send their students here, we 
should start sending our people around the world to be trained not only 
in nanotechnology but its broader international context.
    The reauthorization bill will be an excellent investment in 
America's future if it promotes nanotechnology education from grade 
school through graduate school. If it does not, we will continue to 
rely in the short term on foreign science students who will often end 
up returning to their home countries to compete against us after 
completing their studies.
2. Bridging the Gap Between Nanotechnology Research and 
        Commercialization
    As the Members of this Subcommittee know, America's competitiveness 
in the global market is being tested in the field of nanotechnology, 
where Russia, China, Japan, the European Union, and other nations are 
making major investments in translating basic research into marketable 
nanotechnology products. Often, foreign governments are pursuing a 
strategy of letting American researchers do the basic science, then 
using their resources to commercialize that research and gain the 
economic benefit. Having invested in the early days of nanotechnology 
research and innovation, we should not miss the opportunity to fully 
commercialize our own research.
    Programs such as Small Business Innovation Research, Small Business 
Technology Transfer, and the new Technology Innovation Program are 
vital mechanisms for bringing technology out of the lab and into the 
marketplace. They provide needed resources and expertise to emerging 
small businesses, and they help bring new technology and new jobs into 
existence. They bridge the ``valley of death'' that lies between basic 
research funding and late-stage commercial funding--a valley that would 
otherwise swallow many more promising companies. As the Subcommittee 
drafts the reauthorization legislation, I urge you to ensure that these 
programs play a major part in the bill.
    In my own experience, programs like SBIR have enabled companies 
like ours to stay focused on more disruptive innovations even when they 
are not the lowest hanging fruit in terms of revenue generation. In 
practice, such programs keep American innovation at the cutting edge as 
we continue to meet real-time market needs.
    Rapid commercialization is important, but goal-oriented research 
also will help accelerate the path to market for nanotech companies. 
Many emerging countries are focusing on this strategy to leapfrog 
themselves into significant roles in the global economy. For example, 
countries like Taiwan have determined that, although they may not be 
able to challenge the United States across the board, they can compete 
effectively if they concentrate their resources. By conducting goal-
oriented research in a key area such as electronics or display 
technologies, they can achieve a strong position in those markets.
    We can do the same thing. Already, we have had tremendous success 
with goal-oriented research in cancer treatment and other health-
related areas. Identifying and pursuing other key goals, such as 
nanomedicine, energy, electronics, or water purification, will help 
ensure that we are getting the most for our research money.
    As someone who practically embodies the concept of 
``multidisciplinary research,'' I would encourage the Subcommittee to 
see to it that goal-oriented research centers cross traditional 
scientific and agency boundaries. The National Science Foundation and 
the Department of Energy should be working together; NIST should be 
working with EPA; and so forth. I have seen the beginnings of such 
multidisciplinary research under the current National Nanotechnology 
Initiative, and the results are indeed encouraging. I see this in my 
own company every day, and I know it works.
    Goal-oriented work and cooperation will go far to expedite 
commercialization and provide a more efficient path to market for many 
businesses and products. I caution the Committee, however, not to get 
trapped by lesser goals while losing sight of the bigger picture. It is 
one thing to make products based on nanotechnology research; it is 
another to build a nanotechnology economy. The goal-oriented nanotech 
research of competing economies is understandable given their 
resources. But it is one thing to be simply the supplier of a bumper, 
or a headlight, or a mechanical part for an automobile; it is another 
thing to build an economy based on the mobility the automobile enabled, 
which spawned multiple new industries and employed millions. So it 
could be with nanotechnology.
    It is true that goal-specific research will be important, as will 
support for commercialization and collaboration between agencies. It 
will be this understanding of the nano-based economy that will 
differentiate us from our competitors and allow us to make the best 
decisions about where to invest our resources. This understanding will 
also enable us to take a fresh approach to American leadership in the 
new global economy.
3. The Broader Impact of Nanotechnology on Environmental, Health, 
        Safety and other Global Challenges
    A comprehensive, strategic approach to understanding the 
environmental, health, and safety effects of nanotechnology is a 
necessary component of any Federal plan at this point. With 
nanotechnology products entering the commercial market, it is important 
that we know how nanoparticles behave in the body and in the 
environment. Just as important is the need to communicate with 
consumers so that they understand the efforts that are underway to 
determine and address any risks that may exist. The last thing that any 
nanotechnology company wants is for a lack of safety data to scare 
consumers into staying away. The field has learned the lessons of the 
genetically-modified food debacle.
    That said, however, Nanobiosym's experience represents a different 
part of the issue. Amid the concern about potential negative 
environmental, health, and safety impacts, it is easy to forget that 
nanotechnology can be much more of an environmental, health, and safety 
solution than a problem. For example, Nanobiosym's products will 
improve health both here and in the developing world by rapidly 
diagnosing infectious disease. Soon, we plan to expand into water and 
food testing. When it hits its stride, my company will be an 
environmental, health and safety solution, not a problem.
    Although I am proud of our technology and the contribution it will 
make, many other nanotechnology companies are making similar 
contributions to environmental, health, and safety issues. From fuel 
cells to LED lights, from cancer treatments to antibacterial surfaces, 
and from strong composite materials to aircraft metal fatigue sensors, 
nanotechnology products are beginning to clean up the environment, cure 
people and keep them healthy, and save lives by preventing accidents. 
These trends will only accelerate as nanotechnology becomes more 
widespread.
4. Bringing Emerging Technologies into Emerging Global Markets
    I envision that the new global economy will take shape as the 
economies of major nations become more interdependent and intertwined 
via science, technology, and commerce. Nanotechnology by its very 
multidisciplinary and international nature is thus likely to play a 
major role in driving the new global economy.
    Nanotechnology will spur American entrepreneurs to think and act 
even more globally. As Americans, we should take a bold step toward 
global leadership in the nanotechnology revolution by engaging other 
players around the world and also by embracing global challenges (such 
as the energy crisis, global health, and the environment) as our own 
including those of the developing world. Together we should focus on 
using our best scientific and technological tools to solve real-world 
problems.
    For example, at Nanobiosym we have developed a technology platform 
that has both biodefense applications and clinical diagnostic markets 
here in the U.S. as well as in the developing world. The very nature of 
the way innovation and commercialization is proceeding in nanotech 
enables us to reach out to a global market. For example our product, 
because of its portability and small size, has a large potential in the 
developing world. Similar to the cell phone industry which has made a 
disruptive impact on telecommunications in emerging markets, there are 
six billion people on Earth and everybody gets infected at some point 
in their life. If we can make our products cheap enough we can improve 
global healthcare as well as cater to the needs of a growing 
multibillion-dollar market.
Conclusion
    I would like to thank you, Chairman Kerry, Ranking Member Ensign, 
and the members of the Subcommittee once again for the invitation to 
testify today, and for your leadership in working to ensure that 
America can harness the nanotechnology revolution to not only 
revitalize its economy but also drive and help shape the new global 
economy. Building on the success of the National Nanotechnology 
Initiative's first 5 years, the United States has a historic 
opportunity to drive nanotechnology to maximize its impact on global 
challenges. The economic and humanitarian benefits of driving this 
nanotechnology revolution will be tremendous, and the reauthorization 
of the National Nanotechnology Initiative will go a long way toward 
putting America at the forefront of this global revolution.
    As the CEO of an emerging nanotechnology business with global 
aspirations, I am certainly grateful for the support.

    Senator Kerry. Thank you very much, Dr. Goel.
    Dr. Heath?

          STATEMENT OF JIM HEATH, ELIZABETH W. GILLOON

        PROFESSOR AND PROFESSOR OF CHEMISTRY; DIRECTOR,

         NANOSYSTEMS BIOLOGY CANCER CENTER, CALIFORNIA

                    INSTITUTE OF TECHNOLOGY

    Dr. Heath. Senator Kerry and colleagues, about a decade 
ago, the late Rick Smalley sat before this very same Senate 
Committee when it was considering the National Nanotechnology 
Initiative. Rick won the 1996 Nobel Prize in Chemistry for his 
discovery of C60, known as Buckminsterfullerenes and 
the class of all carbon molecules known as the fullerenes--
molecules which in many ways have become the poster children of 
nanotechnology.
    I also had a part in that discovery. It was my dissertation 
work and Rick was my Ph.D. advisor and thus it's a special 
honor to be here today.
    Senator Kerry. Can you pull the microphone closer to you?
    Dr. Heath. How's that?
    Senator Kerry. Thanks.
    Dr. Heath. Anyway, thus it's a special honor to be here 
today and I want to recall a little bit of Rick's testimony 
from a decade ago.
    He said, and I quote, ``I sit before you here today with 
very little hair on my head.'' That's obviously a quote. ``As a 
result of chemotherapy. I'm not complaining. Twenty years ago, 
I would already be dead, but 20 years from now, we will no 
longer have to use this blunt tool. Nanotechnology will have 
given us engineered drugs which are nanoscale cancer-seeking 
missiles, a molecular technology that specifically targets just 
the cancer cells and leaves everything else blissfully alone. I 
may not live to see it but I am confident it will happen.''
    Well, Rick was prophetic on both accounts. He didn't live 
to see it but it's happening now and it's happening faster than 
he envisioned it happening.
    One example comes from my colleague at Caltech, Mark Davis. 
Mark is a member of the Cancer Center I direct. It was one of 
the few nanotechnology-based cancer centers the NCI founded a 
few years ago. Mark developed a nanotherapeutic that begins to 
mimic Rick's cancer-seeking nanotech missiles. He put this into 
a Phase I trial and a patient came into this Phase I trial that 
had late-stage metastatic pancreatic cancer.
    I know there's a lot of--probably a number of folks in this 
room that have had cancer but if you had had late-stage 
metastatic pancreatic cancer, you probably wouldn't be here 
today. The survival rate for that disease is almost zero.
    In these Phase I trials, the patients that come in are ones 
that have failed every other type of therapy. They're on their 
last hope basically, and this patient had two to 3 months left 
to live. Well, as of today, and this is 2 years later, this 
patient is still living, is cancer free, and went to through 
the entire trial without even hair loss. That's a stunning 
result.
    Now the chemotherapy was actually a typical 
chemotherapeutic drug. It was one that would lead to side 
effects, such as hair loss or cardiac arrest, but the 
nanotherapeutic, which was the delivery system that delivered 
that drug, basically permitted the dose to be lowered twenty-
fold and therefore lowering the toxicity. It also directed more 
effective delivery of the drug to the cancer.
    The scientific foundation for that drug is what the 
National Nanotechnology Initiative has delivered. Each of the 
nanoparticles, for example, is designed to look friendly to the 
immune system, to stay in the blood for days until it finds the 
tumor, and not to release their drug payload until the 
nanotherapeutic is actually inside the cancer cells. None of 
this is by accident.
    In fact, a lot of the research that went into making that 
happen we might think of as Environmental Health and Safety 
kind of research but it would never be classified as such 
because you actually have to do it to make the stuff work. This 
I would argue that in many ways we're vastly underestimating 
the amount of money that's going into EH&S-type work because it 
accompanies a lot of this type of research.
    We are faced with some staggering scientific and 
technological problems today, ranging from energy and 
healthcare and the environment, and nanotech solutions are 
virtually at the forefront of every single one of these 
problems. For example, in my own lab, we have developed a 
technology that goes from a finger prick of blood to 50 protein 
diagnostic measurements, all within the time scale that's 
actually faster than the blood clotting.
    Now that we're beginning to harness that technology for use 
in our soldiers in Afghanistan and Iraq but we're also using it 
within our cancer center. In Afghanistan and Iraq, there's many 
instances where this technology can be utilized to help 
dramatically shorten the time between diagnosis and treatment 
after trauma. The therapy can help save lives. This is an 
emerging and really interesting issue. I hope someone asks me 
about it.
    Now is not the time to further regulate this field. The 
therapeutics and the diagnostic devices that I've just talked 
about go through very demanding procedures, the same FDA 
approval procedures that anything else goes through, and these 
procedures are the gold standard. They work.
    The NSF and the NIH have both taken very seriously the 
aspects of the health impact of nanotech and they've launched 
major initiatives in these areas. However, the example of a 
nano drug vastly reducing side effects, not increasing them, 
has been the story when the foresight and the resources are 
available to ensure that the science is done correctly. Right 
now that part is working.
    I want to conclude with what I think is probably a looming 
crisis. In fact, I know it's a looming crisis. I was recently 
at a meeting where a bunch of experts were bemoaning the fact 
that drug trials, clinical trials of drugs are now becoming an 
offshore endeavor.
    Well, I'm here to tell you that every aspect of that 
process, from the basic science to the engineering to the 
product testing to the manufacturing is becoming an offshore 
endeavor. This is not just for drugs, but for many fields.
    We are in serious danger of losing our competitive 
advantage in a number of high-tech arenas. We achieve world 
scientific and technological leadership by taking on high-risk, 
high pay-off goals and sticking with those goals. However, our 
scientific enterprise, I believe, is becoming risk-averse.
    Other countries see this chink in our armor and are 
challenging us. The National Nanotechnology Initiative 
constitutes one of our high-risk, high-yield investments and 
it's working, but in other areas, we are losing our edge.
    I think our great country has a history of achieving its 
goals by combining bold scientific visions, strong political 
leadership, effective public education and significant and 
sustained investment in our scientific foundation. Through 
that, we have maintained our global technological and economic 
leadership. I think finding ways to sustain that mix rather 
than finding ways to regulate an emerging and fragile field 
should be the focus of this debate.
    Thank you.
    [The prepared statement of Dr. Heath follows:]

    Prepared Statement of Jim Heath, Elizabeth W. Gilloon Professor 
   and Professor of Chemistry; Director, NanoSystems Biology Cancer 
               Center, California Institute of Technology
    Senator Kerry, Members of the Committee, and Colleagues:

    Nearly a decade ago the late Rick Smalley sat before a Senate 
committee that was considering the National Nanotechnology Initiative. 
Rick won the 1996 Nobel Prize in Chemistry for his part in the 
discovery of C60 and the fullerenes. I also had a part in 
that--it was my dissertation work, and Rick was my Ph.D. advisor. Thus, 
it is a special honor to be testifying here today, and I want to recall 
a bit of Rick's testimony from a decade ago.

        ``I sit before you today with very little hair on my head . . . 
        a result of chemotherapy . . . I'm not complaining. Twenty 
        years ago . . . I would already be dead. But twenty years from 
        now . . . we will no longer have to use this blunt tool. . . . 
        Nanotechnology will have given us . . . engineered drugs which 
        are nanoscale cancer-seeking missiles, a molecular technology 
        that specifically targets just the . . . cancer cells . . ., 
        and leaves everything else blissfully alone . . . I may not 
        live to see it, but . . . I am confident it will happen.'' \1\
---------------------------------------------------------------------------
    \1\ Richard E. Smalley testimony before the Senate Committee on 
Commerce, Science and Transportation, May 12, 1999.

    Rick was prophetic on both accounts. He didn't live to see such 
advances, but they are happening now. One example comes from my Caltech 
colleague, Mark Davis. Mark is a member of a cancer center that I 
direct. It is one of a few innovative cancer centers that the NCI 
funded a few years ago to develop nanotechnology tools for battling 
cancer.\2\ Mark's lab developed a nanotherapeutic that begins to mimic 
Rick's nanoscale cancer-seeking missiles.\3\ I'll begin with a story 
about a patient from a Phase I clinical trial of this drug. Phase I 
trials are a last recourse for those who have failed everything else, 
and this patient came to Mark's trial with late-stage, metastatic 
pancreatic cancer, and a prognosis of 2-3 months left to live. There 
are several cancer survivors in this room. However, if any of you had 
had metastatic pancreatic cancer, it is unlikely you would be here 
today. The survival rate for this terrible disease is almost zero. That 
patient entered the trial almost 2 years ago, and is still alive, 
cancer free, and went through the entire trial without even hair loss. 
That is a stunning result--the drug itself was a typical 
chemotherapeutic with toxic side effects that range in severity from 
hair loss to cardiac arrest. However, the delivery agent, which was a 
nanotechnology, permitted the dose to be lowered 20-fold, and directed 
more effective drug delivery to the cancer.
---------------------------------------------------------------------------
    \2\ The NanoSystems Biology Cancer Center is one of a few Cancer 
Centers for Nanotechnology Excellence (CCNEs) that the National Cancer 
Institute funded starting in late 2005.
    \3\ M. E. Davis and M. E. Brewster, ``Cyclodextrin-based 
pharmaceutics: Past, present, future,'' Nat. Rev. Drug. Disc., 3, 1023 
(2004).
---------------------------------------------------------------------------
    The scientific foundation for this drug is what the national 
nanotechnology initiative has delivered. Each of Mark's nanoparticles 
is designed to look friendly to the immune system, to stay in the blood 
for days until they find the tumor, and to not release their drug 
payload until they are inside a cancer cell.
    This is just the beginning.
    We are faced with some staggering scientific challenges today--
ranging from energy to health care to the environment. For virtually 
all of these problems, nanotechnology-enabled solutions are at the 
forefront of the scientific search for answers.
    In my lab we have developed a nanotechnology-enabled chip that 
carries out almost 50 diagnostic measurements from a fingerprick of 
blood--all before the blood even clots.\4\ This chip has applications 
for our soldiers in Iraq and Afghanistan where shortening the time 
between injury, diagnosis, and treatment can save lives. It also has 
applications to routine health care.
---------------------------------------------------------------------------
    \4\ Rong Fan, Ophir Vermesh, Alok Srivastava, Brian K.H. Yen, 
Lidong Qin, Habib Ahmad, Gabriel A. Kwong, Chao-Chao Liu, Juliane 
Gould, Leroy Hood, and James R. Heath. ``Integrated Blood Barcode 
Chips,'' under review to Nature Biotechnology 4/08.
---------------------------------------------------------------------------
    Now is not the time to further regulate this field. Mark's 
therapeutics and our diagnostic devices go through the same demanding 
FDA approval processes as standard drugs and health care technologies--
that process sets the global standard, and it works.
    The NSF and the NIH are taking seriously the tasks of understanding 
the environmental and health impacts of nanotechnologies--both agencies 
have established significant programs to understand those risks.
    However--the example of a nanodrug vastly reducing toxic side 
effects--not increasing them, has been the story when the foresight and 
resources are available to ensure that the science is done correctly. 
Right now, that part is working.
    Finally, I want to turn to a looming crisis. I was recently at a 
meeting where various experts were bemoaning the fact that clinical 
drug trials are increasingly offshore endeavors. In fact, the entire 
process, from the basic science of discovery, to engineering, product 
testing, and manufacturing, is moving off shore--and not just for drug 
discovery. We are in serious danger of losing our competitive advantage 
in a number of high tech arenas. We achieve world scientific & 
technological leadership by taking on high risk, high payoff goals, and 
sticking with those goals. However, our scientific enterprise is 
becoming risk averse. Other countries see this chink in our armor, and 
are challenging us. The National Nanotechnology Initiative constitutes 
one of our high risk/high yield investments. It is clearly working, 
although it is a serious struggle to stay ahead of the curve. In other 
areas, we are losing our edge.
    Our great country has a history of achieving goals by combining 
bold scientific vision, strong political leadership, effective public 
education, and significant and sustained investment in our scientific 
foundation. That is how we have maintained our global technological and 
economic leadership. Finding ways to sustain that mix, rather than 
finding ways to regulate an emerging and fragile field, should be the 
focus of this debate.
    Thank you.

    Senator Kerry. Thank you very much, Doctor. That was a very 
interesting, provocative, and thoughtful testimony.
    Let me ask you. When you suggest, as you did, that we 
should not, I think you used the word ``interfere,'' am I 
correct, and therefore not interrupt this chain of important 
research which you're doing and it is important and I 
understand that, how do you respond to the other testimony and 
to others who are suggesting that we don't know what some of 
the impacts of these nanoparticles are and some of the uses 
that are out there? How do you balance this non-interference 
and obvious need to be competitive and move down the road with 
need of the rights, the public's right to know, and adequate 
protection for the public against the product like that where 
you may be brushing your teeth with something that you learn in 
10 years actually does you great harm?
    Dr. Heath. Well, I would argue that the vast amount of 
nanotechnology that's investigated today is done on a very 
small scale in the lab where we've never gone in and interfered 
with the science and it's probably not appropriate to do so 
because that's not a place where it's going to have an impact.
    Whenever any of these technologies actually make it out 
into the commercial arena, the very nature of that process 
mandates that these things are investigated very thoroughly. 
thoroughly. I can tell you mostly from the healthcare arena 
that it's a demanding process. I was a meeting where a bunch of 
people doing nanotech are staggered by these regulations.
    Senator Kerry. Staggered by?
    Dr. Heath. By the regulations of trying to--it's what every 
drug has to do to go through FDA or----
    Senator Kerry. You're talking about a drug and drugs indeed 
have a certain protocol and a higher standard. What about other 
products that come into the market? I mean obviously this 
toothpaste doesn't.
    Dr. Heath. Right.
    Senator Kerry. There are countless other products. My wife 
and I just wrote a book, she wrote the chapter on toxins and, 
you've got these extraordinary numbers of toxins that are in 
products that people aren't even aware of. Whether it's 
phthalates in plastic that we now know is carcinogenic, 
bisphenol, or other things that kids suck on and are in toys or 
elsewhere, and people really don't know the consequences.
    Dr. Heath. Well, I think that we have some issues in terms 
of products that get released that we don't have very much 
oversight on. I don't think that's a nanotechnology problem. I 
think if you compared what happens in the cosmetic industry 
where people are applying all kinds of things to the body,----
    Senator Kerry. That's crazy.
    Dr. Heath.--you don't have near the amount of oversight 
over that industry. Nanotech is----
    Senator Kerry. We actually have none.
    Dr. Heath. Yes. That's right. If we single out nanotech, 
right now it's a very fragile field. It's young. I know we 
talked about these major things going into products.
    Senator Kerry. Well, wouldn't you say----
    Dr. Heath. It's small potatoes.
    Senator Kerry. When you say single it out, I'm not sure 
we're singling it out, but given its potential to be in so many 
different products and the extraordinary power within the 
marketplace that it may well have, doesn't it behoove us to try 
to get this right upfront?
    Dr. Heath. Absolutely, and I would say just like--you know, 
several years ago, when the AIDS crisis hit, our knowledge of 
the human immune system went up dramatically because of that 
crisis.
    At the moment, because of National Nanotechnology 
Initiative, we know a tremendous amount of what nanotechnology 
matters and materials and et. cetera do inside the human body 
and the environment that we never would have known otherwise.
    I think we're learning this and we haven't had a uniform 
way to maybe categorize it, although I believe there are some 
agencies that are beginning to do that, but if we made a 
regulation now, it'd be based upon ignorance, I believe. But I 
do believe it's a good time to try to begin categorizing it in 
a rational way.
    Senator Kerry. I mean what if the regulation is a reaction 
to ignorance in a sense in that it is requiring a certain 
protocol to be followed before X, Y or Z product is placed out 
there? Is that so onerous?
    Dr. Heath. No. In fact, I think that's done now.
    Senator Kerry. Should we demand a transparent protocol by 
which something is coming to the market?
    Dr. Heath. At least in all the commercial endeavors I've 
been involved in, that is exactly what happens now because of 
the current standards and practices.
    Senator Kerry. Except for those 75,000. I think we only 
have 6,000 FDA-approved chemicals that are out in the 
marketplace out of some 82,000 that I know are ``out in the 
marketplace,'' some of them to a lesser or greater degree than 
others, obviously. Cosmetics is an example where estrogenic 
substances have been used in some of these products which wind 
up in fact potentially giving people cancer.
    Hair straighteners, for instance, have been shown to be 
particularly malicious among African American young women who 
wind up with a greater incidence of breast cancer and other 
things. Nobody has done a complete linkage, but there's a lot 
of evidence now about endocrine disruptors and other impacts 
out there. Books are being written by researchers, oncologists, 
and others that are all looking at this.
    It seems to me the warning signs are flashing and we ought 
to just be careful. That's all. Nobody wants to interfere.
    Anybody else want to respond to this? Yes, Dr. Goel?
    Dr. Goel. Yes. I would like to add that I think that it's 
not a matter of whether to apply regulations or not, it's about 
where to apply the regulations and when to apply them.
    I think what Dr. Heath said at the level of the basic 
science innovation, that's probably not the best place to apply 
the restrictions.
    Senator Kerry. Are we trying to? Is anybody trying to apply 
it there?
    Dr. Goel. I think that the hype that gets created about the 
negative aspects of nanotechnology may tend to discourage 
certain kinds of funding to basic science nanotechnology which 
could have an adverse effect.
    Senator Kerry. So we should be wary of that and wary of 
interfering at the basic level, correct?
    Dr. Goel. In terms of a mentality. I think the other thing 
is one must be clear that not all kinds of nanotechnology are 
this general--the same kind of bad consequence. Maybe you're 
referring to nanomaterials or nanochemicals. Nanotechnology is 
broader than that.
    Senator Kerry. Agreed.
    Dr. Goel. And what it defines and refers to is much broader 
than that and so I think it's a very narrow projection of what 
nanotechnology is.
    Senator Kerry. How would you define it?
    Dr. Goel. Nanotechnology?
    Senator Kerry. Yes.
    Dr. Goel. I love to define it.
    Senator Kerry. What?
    Dr. Goel. In my mind, it really is the ability to probe and 
control matter at increasingly finer scales, 10 to the minus 9 
meters and beyond and smaller, and why that's important is 
because when we can learn to control and manipulate matter and 
probe matter on that level, we can effect the properties of 
systems and nanomaterials is one example.
    In our example, we control the molecules which improves the 
precision and accuracy with which we can read out information.
    Senator Kerry. Where are you in that process? Do you 
actually have an ability to----
    Dr. Goel. We have a prototype.
    Senator Kerry. A prototype?
    Dr. Goel. Yes.
    Senator Kerry. Which is bigger than what you're holding in 
your hand?
    Dr. Goel. No, this is the chip.
    Senator Kerry. That's the prototype chip?
    Dr. Goel. Yes.
    Senator Kerry. What's the read-out?
    Dr. Goel. The read-out is bigger than our Blackberry I show 
here.
    Senator Kerry. So that is yet to come?
    Dr. Goel. Yes, exactly.
    Senator Kerry. Dr. Ferguson.
    Dr. Ferguson. Yes, I would comment----
    Senator Kerry. Let me just give you all a heads up. I have 
a meeting I've got to run to before too long. So I may have to 
truncate this a bit but we'll try to keep going.
    Dr. Ferguson. Senator Kerry, I would say that the examples 
that Dr. Heath highlighted about biomedically relevant 
nanoparticles certainly would be well understood by the time 
they get to the point they'd be used in biomedicine from lots 
of study by the FDA and the developers, but I would say that 
your example of, for example, at Tuskalis with 75,000 compounds 
that are out there in our environment is a great example of why 
we should be spending the effort upfront right now to study and 
understand at the scientific level the behavior in both 
environmental systems as well as biological systems of as broad 
a range of nanomaterials as possible.
    The big problem here is that for nanotechnology, we're 
really talking about a very, very broad scientific field that 
encompasses lots of different materials with different 
chemistries and different surface properties and so it's very 
difficult to say whether nanotechnology, nanomaterials in 
general are dangerous, are not dangerous, are safe or not safe.
    Senator Kerry. Well, let's come back to the panel's 
original discussion then. Does that say something about what 
ought to be required in terms of a strategy or roadmap? Where 
do you all come out on that?
    Dr. Ferguson. I think that's essential. I think that there 
should be some rational prioritization of the types of 
nanomaterials and the types of nanotechnologies that are 
assessed in terms of environmental and human health safety and 
so I think of this as a chemist and the ideal would be to come 
up with models that we can fit new nanomaterials into as they 
become available where we have some applicable--some idea of 
how these new materials will behave with reference to materials 
we've studied in the past.
    That's the best way, I think, to leverage our scientific 
knowledge.
    Senator Kerry. Mr. Rejeski.
    Mr. Rejeski. I think one of the most important things we 
can actually do is provide adequate resources to some of these 
agencies that provide oversight. I mean the FDA an incredibly 
powerful brand for people that are trying to bring products 
into the market.
    The FDA's own science board just did a fairly extensive 
examination of their capacities and one of the things they said 
was the development of new medical products based on what they 
said was new science, which would include genomics nanotech, 
cannot be adequately regulated by the FDA at this moment.
    I mean, basically, we've just witnessed over a hundred 
deaths on an FDA-approved product, a blood thinner. So I think, 
you know, one of the things that we're looking at, and it's a 
much wider area, is just making sure that these agencies, such 
as the FDA, the Consumer Product Safety Commission, EPA, have 
the resources. They are totally starved under the NNI because 
60 percent of the environmental health and safety research is 
going to the NSF.
    NSF is a phenomenal agency but NSF will not answer any of 
the questions that we're going to have to answer around this 
product. Meanwhile, all the agencies that really are required 
to provide oversight and the science that's behind oversight 
because we don't want oversight built on inadequate science are 
starved, and I think that's part of the strategy that we 
haven't gotten right yet and it's critical now as we move more 
of these products, whether they're medical applications, 
whether they're cosmetic, whatever it is, into the commercial 
realm.
    So I think part of it is actually doing something that we 
need to do generally in the government and obviously the 
Congress has been holding hearings about consumer product 
safety, about the EPA, but I think a strong FDA helps in the 
long run because the entire world cares about the FDA's 
clinical trial process.
    Senator Kerry. I'm going to come to you, Mr. Nordan, in 
just a minute, but who was it, Dr. Ferguson or Dr. Goel, who 
mentioned the negative hype? That's what I thought, Dr. Goel.
    It seems to me the only way to push back against the 
negative hype is going to be to do the scientific research and 
develop a kind of transparent accountable understanding of the 
American people of what they're dealing with, isn't it?
    Dr. Goel. I agree, yes. I think that----
    Senator Kerry. Can you do that adequately without running 
into the problem that I think Dr. Heath appropriately raises, 
which is, scaring everybody away and creating such an albatross 
of a process that you reduce innovation?
    Dr. Goel. I think absolutely.
    Senator Kerry. What's the key to that?
    Dr. Goel. The key to that is letting the research happen, 
remove the shackles around the creative research process, let 
that happen.
    Senator Kerry. Right.
    Dr. Goel. Once the research tries to, as he said, get out 
of the lab and go into the marketplace and starts to cross the 
gamut, then bring in the regulatory thresholds that you would 
apply to any other product.
    Senator Kerry. Does that work for you, Dr. Heath?
    Dr. Heath. I think if those regulatory bars you have to 
jump over are carefully thought out, absolutely.
    Senator Kerry. But if they come after the initial research 
steps----
    Dr. Heath. It's kind of nice to know what's down the road 
so that you, you know, focus your efforts in----
    Senator Kerry. Was that any different from where you are 
now?
    Dr. Heath. No, I would say for the drugs--so let me be very 
clear. I believe for anything that's nanotherapeutic or drug-
related, we have a great process. We do not need to step into 
new regulations.
    Senator Kerry. Right.
    Dr. Heath. For other stuff that may not be certain things 
you ingest, it could be a chemical, could be a face powder, 
could be a solar cell, we may need to have a certain level of 
standards that we establish.
    Senator Kerry. Good line to draw. I accept that. Mr. 
Nordan.
    Mr. Nordan. To give some insight from how the business 
community views this, we work with a large number of 
corporations across a large number of industries, from 
electronics through to chemicals and also in life sciences.
    I would tell you that we should not conflate in this 
discussion laboratory research and regulation of manufactured 
goods that are manufactured to large scale. I don't think there 
is anyone who is calling for or deeply focused on setting 
limits, as we've seen, for example, with stem cell research, on 
what scientists can and cannot do in the nanoscale regime in 
the laboratory.
    It's a very different issue when you come to manufactured 
goods, and I think what's unique in nanotechnology is that you 
have both large companies, like Dupont, as well as small ones, 
like Alta Nanotechnologies, that are asking for regulatory 
clarity.
    Normally you think of this as trying to duck regulations 
and duck red tape and in this case, you have folks at large 
chemical companies, electronics firms, medical products 
companies who are simply asking not for new regulations but for 
regulatory clarity on what currently applies.
    A client of ours that I spent some time with recently, a 
CTO of a billion dollar, multibillion dollar chemicals, 
multinational chemicals company on the East Coast, and sat down 
with him, went through some nanotechnology research. We were 
batting some questions back and forth. He said, ``You know 
what, Matthew? It's amazing to me that 7 years after the 
introduction of the National Nanotechnology Initiative, I don't 
know whether TOSCA applies to my products or not.''
    You would not suit up and go into a football game if you 
didn't know what the rules were and when someone could tackle 
you and businesses are very concerned about bringing products 
to market, that in some cases their rivals in Europe and in 
East Asia are doing that well ahead of them, not because 
they're concerned about the consequences of regulation but 
because they don't know what the rules of the game are.
    Senator Kerry. Fair enough. That's very important. That's a 
very important view obviously for us to factor in as we think 
about this.
    How about the foreign competition piece? Will this work if 
we have a fairly commonsensical but nevertheless accountable 
and transparent system but the Chinese don't?
    Mr. Nordan. Well, if I could take a shot at that, I think 
that there are places in the world where there are 
straightforward commonsense mechanisms that might be considered 
more onerous than the United States where there is actually 
much more active nanotechnology research and development, at 
least on behalf of large corporations.
    We normally think of Europe as being a generally more 
cautious and more precautionary group of societies when it 
comes to new chemicals, new materials. Regulations like REACH, 
for example, is a very broad-ranging chemical regulation in the 
EU or an example of that. Yet when you compare the Dows and 
Duponts and GE Plastics of the world with their rivals in 
Europe, companies like Salve and BASF and DSM, you actually 
find that the European companies have been much more aggressive 
in conducting research on nanoparticles and being very 
straightforward and transparent with the public on how they're 
being used and launching products that are actively pitched for 
their nanobenefits, nanobenefits, and I think that comes down 
to regulatory clarity.
    I don't think there is an incompatibility between 
straightforward common sense application of regulatory regimes 
and aggressive commercial activity in nanotech. I think the 
European example argues that they can come together.
    Senator Kerry. Well, folks, regrettably, I've got to be 
over in the Capitol for a briefing on Syria and North Korea and 
what's going on. I apologize for breaking up, but as I said, 
I'll leave the record open.
    I appreciate all of you coming here. This is really very, 
very helpful. We obviously want to get this thing reauthorized 
and do this well and if you have further thoughts you would 
like to share with the Committee, the record is open. We 
welcome your further comments based on what you've heard today 
or if you think you'd like to extrapolate a little bit, we'd 
welcome that.
    It's an interesting topic. I regret more people weren't 
able to be here, but Thursday afternoon, having just had our 
last vote sort of affects what happens here a little bit, I 
apologize for that. Everybody has pretty intensive schedules.
    But this is a topic everybody is intrigued by and learning 
more about. We've clearly learned around here to try as hard as 
we can not to get in the way and I think we're getting better 
at that, not to overreach but to come up with something that's 
really thoughtful and workable. We'll do our best here to be 
able to try to do that because we want this sector to flourish.
    I'm convinced that this, together with a few other things, 
like artificial intelligence, robotics and communications and 
so forth, are the future for us in terms of high value-added 
jobs and technology advances and so forth, life sciences 
obviously, bio, but this is a big deal for us.
    So we want to try to get it right and I hope you'll help us 
do that. You certainly have to a great degree today.
    So all the way from California and elsewhere, thanks so 
much for coming in. We really appreciate it.
    We stand adjourned.
    [Whereupon, at 4:25 p.m., the hearing was adjourned.]

                                  
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