[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                      ENERGY AND WATER DEVELOPMENT

                        APPROPRIATIONS FOR 2011

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                             SECOND SESSION
                                ________
              SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT
                  PETER J. VISCLOSKY, Indiana, Chairman
 CHET EDWARDS, Texas                RODNEY P. FRELINGHUYSEN, New 
 ED PASTOR, Arizona                 Jersey
 MARION BERRY, Arkansas             ZACH WAMP, Tennessee
 CHAKA FATTAH, Pennsylvania         MICHAEL K. SIMPSON, Idaho
 STEVE ISRAEL, New York             DENNIS R. REHBERG, Montana
 JOHN W. OLVER, Massachusetts       KEN CALVERT, California
 LINCOLN DAVIS, Tennessee           RODNEY ALEXANDER, Louisiana  
 JOHN T. SALAZAR, Colorado          
 PATRICK J. MURPHY, Pennsylvania      
                                    

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
               Taunja Berquam, Joseph Levin, James Windle,
            Tyler Kruzich, and Casey Pearce, Staff Assistants

                                ________

                                 PART 6
                          DEPARTMENT OF ENERGY
                                                                   Page
 Environmental Management and Legacy
   Management.....................................................    1
 Energy Efficiency and Renewable Energy, Fossil Energy, and 
Electricity Delivery and Energy Reliability.......................  143
 Science and ARPA-E...............................................  353

                                ________

         Printed for the use of the Committee on Appropriations
      PART 6--ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR 2011
                                                                      ?

                      ENERGY AND WATER DEVELOPMENT

                        APPROPRIATIONS FOR 2011

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                             SECOND SESSION
                                ________
              SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT
                  PETER J. VISCLOSKY, Indiana, Chairman
 CHET EDWARDS, Texas                RODNEY P. FRELINGHUYSEN, New 
 ED PASTOR, Arizona                 Jersey
 MARION BERRY, Arkansas             ZACH WAMP, Tennessee
 CHAKA FATTAH, Pennsylvania         MICHAEL K. SIMPSON, Idaho
 STEVE ISRAEL, New York             DENNIS R. REHBERG, Montana
 JOHN W. OLVER, Massachusetts       KEN CALVERT, California
 LINCOLN DAVIS, Tennessee           RODNEY ALEXANDER, Louisiana  
 JOHN T. SALAZAR, Colorado          
 PATRICK J. MURPHY, Pennsylvania      
                                    
 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
               Taunja Berquam, Joseph Levin, James Windle,
            Tyler Kruzich, and Casey Pearce, Staff Assistants

                                ________

                                 PART 6
                          DEPARTMENT OF ENERGY
                                                                   Page
 Environmental Management and Legacy
   Management.....................................................    1
 Energy Efficiency and Renewable Energy, Fossil Energy, and 
Electricity Delivery and Energy Reliability.......................  143
 Science and ARPA-E...............................................  353

                                ________

         Printed for the use of the Committee on Appropriations

                                ________
                     U.S. GOVERNMENT PRINTING OFFICE
 61-762                     WASHINGTON : 2010
                                                                      ?

                                  COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman
 
 NORMAN D. DICKS, Washington        JERRY LEWIS, California
 ALAN B. MOLLOHAN, West Virginia    C. W. BILL YOUNG, Florida
 MARCY KAPTUR, Ohio                 HAROLD ROGERS, Kentucky
 PETER J. VISCLOSKY, Indiana        FRANK R. WOLF, Virginia
 NITA M. LOWEY, New York            JACK KINGSTON, Georgia
 JOSE E. SERRANO, New York          RODNEY P. FRELINGHUYSEN, New 
 ROSA L. DeLAURO, Connecticut       Jersey
 JAMES P. MORAN, Virginia           TODD TIAHRT, Kansas
 JOHN W. OLVER, Massachusetts       ZACH WAMP, Tennessee
 ED PASTOR, Arizona                 TOM LATHAM, Iowa
 DAVID E. PRICE, North Carolina     ROBERT B. ADERHOLT, Alabama
 CHET EDWARDS, Texas                JO ANN EMERSON, Missouri
 PATRICK J. KENNEDY, Rhode Island   KAY GRANGER, Texas
 MAURICE D. HINCHEY, New York       MICHAEL K. SIMPSON, Idaho
 LUCILLE ROYBAL-ALLARD, California  JOHN ABNEY CULBERSON, Texas
 SAM FARR, California               MARK STEVEN KIRK, Illinois
 JESSE L. JACKSON, Jr., Illinois    ANDER CRENSHAW, Florida
 CAROLYN C. KILPATRICK, Michigan    DENNIS R. REHBERG, Montana
 ALLEN BOYD, Florida                JOHN R. CARTER, Texas
 CHAKA FATTAH, Pennsylvania         RODNEY ALEXANDER, Louisiana
 STEVEN R. ROTHMAN, New Jersey      KEN CALVERT, California
 SANFORD D. BISHOP, Jr., Georgia    JO BONNER, Alabama
 MARION BERRY, Arkansas             STEVEN C. LaTOURETTE, Ohio
 BARBARA LEE, California            TOM COLE, Oklahoma           
 ADAM SCHIFF, California            
 MICHAEL HONDA, California          
 BETTY McCOLLUM, Minnesota          
 STEVE ISRAEL, New York             
 TIM RYAN, Ohio                     
 C.A. ``DUTCH'' RUPPERSBERGER,      
Maryland                            
 BEN CHANDLER, Kentucky             
 DEBBIE WASSERMAN SCHULTZ, Florida  
 CIRO RODRIGUEZ, Texas              
 LINCOLN DAVIS, Tennessee           
 JOHN T. SALAZAR, Colorado          
 PATRICK J. MURPHY, Pennsylvania    

                 Beverly Pheto, Clerk and Staff Director

                                  (ii)


          ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR 2011

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

                                           Tuesday, March 16, 2010.

  DEPARTMENT OF ENERGY: ENVIRONMENTAL MANAGEMENT, LEGACY MANAGEMENT, 
                             FY2011 BUDGET

                               WITNESSES

INES TRIAY, ASSISTANT SECRETARY FOR ENVIRONMENTAL MANAGEMENT
DAVID GEISER, ACTING DIRECTOR, OFFICE OF LEGACY MANAGEMENT
    Mr. Pastor [presiding]. The committee will come to order. 
Good afternoon.
    We have before us today Dr. Ines Triay, assistant secretary 
for environmental management, and she is accompanied by Mr. 
David Geiser, acting director of the Office of Legacy 
Management. They will be presenting and defending--I added 
that--presenting and defending the president's fiscal year 2011 
budget request for the Office of Environmental Management and 
Legacy Management.
    The environmental management program has operated since 
1989. It has a difficult mission of cleaning up the legacy of 
the nation's nuclear weapons complex and other nuclear research 
activities. Fiscal year 2011 request for environmental 
management is $6.3 billion, $118 million less than fiscal year 
2010.
    This work includes defense and non-defense clean-up work, 
as well as clean-up at the nation's uranium enrichment 
facilities. The legacy management budget request is $189 
million, nearly the same as last year, to take over the 
management of the sites as they cross the clean-up finish line.
    Dr. Triay, I know and appreciate your aggressive efforts to 
improve the way you do business, but we have to do better in 
terms of project management. And as I read your testimony, I 
think you have dealt with that.
    With billions of dollars invested every year, we need to 
see results. We are very interested in hearing your progress 
and plans.
    Mr. Geiser, you will inherit these sites when the clean-up 
has been completed, and we look forward to your view on your 
mission and the challenges you are facing in the future.
    I also ask that, if members have additional questions, that 
they would submit them for the record, that they please do so 
to the subcommittee by 5 p.m. tomorrow. I imagine that we will 
forward some of these questions to you. We have a time for 
response of 4 weeks, if you could do that for us.
    With these opening comments, I would like to yield to our 
ranking member for any opening comments that he would like to 
make.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Good afternoon, Madam Secretary. Welcome.
    Mr. Geiser, thank you both for your first appearance before 
our committee.
    The administration's budget, as the chairman has said, for 
environmental management and legacy management is $6.6 billion, 
roughly 1 percent more than last year's appropriations. My 
constituents are increasingly alarmed by the growing deficit 
and the growing government bureaucracy, so I am gratified to 
see that the growth in your program is being kept under 
control.
    However, your fiscal year 2011 budget will be in addition 
to the $6 billion your program received in the stimulus act, 
AKA Recovery Act, nearly a full year's regular appropriation.
    I think it is fair to say that Congress expects to see 
significant progress with the funding already provided to it, 
and I am sure you will run over those figures pretty 
comprehensively this afternoon.
    Madam Secretary, while we all like to see--we all like to 
see our environmental clean-up programs move ever more quickly, 
you made great progress in implementing your stimulus act 
funding. Much of the progress made is directly due to your 
leadership. And I must say, I am encouraged--and I am sure as 
all members are--to have such a great career professional in 
your position.
    Too many of your predecessors have run their programs--if 
you will pardon the expression--like science projects, 
bypassing the sure for the innovative. Environmental 
Management's mandate is to clean up the environmental legacy of 
our nation's nuclear weapons programs and, in doing so, use 
taxpayer's money efficiently and effectively, and I am sure you 
are doing just that.
    Mr. Geiser, when addressing clean-up, the reputation of the 
department often rests on the good relations it has with its 
neighbors. The work of you and your people to maintain our 
sites once they are cleaned are critical to that reputation. 
You help provide the secretary with the clarity of mission we 
are counting on to get the job done.
    So all of us are looking forward to your testimony, and I 
thank you, Mr. Chairman.
    Mr. Pastor. Thank you.
    Assistant Secretary.
    Ms. Triay. Good afternoon, Mr. Chairman and Ranking Member, 
and Members of the Subcommittee.
    I am pleased to be here today and to address your questions 
regarding the Office of Environmental Management's fiscal year 
2011 budget request. The Office of Environmental Management's 
mission is to complete the legacy environmental clean-up left 
by the Cold War in a safe, secure and compliant manner.
    I am very pleased that we are able to present to Congress a 
budget, that positions the program to be fully compliant with 
our regulatory commitments and support reducing the risks 
associated with one of our highest environmental risk 
activities, tank waste, as well as achieve footprint reduction 
across the legacy clean-up complex.
    My goal remains to complete quality clean-up work safety, 
on schedule, and within cost, in order to deliver demonstrated 
value to the American taxpayer. Environmental Management clean-
up objectives will continue to be advanced in fiscal year 2011 
by the infusion of $6 billion from the American Recovery and 
Reinvestment Act of 2009.
    Through January 2010, the Office of Environmental 
Management has obligated $5.7 billion and spent $1.1 billion. 
Today, we are at $1.55 billion, leading to thousands of jobs 
created and/or saved at our sites. In fiscal year 2011, we 
estimate that $2.4 billion in Recovery Act funding will be 
spent to support the Office of Environmental Management clean-
up objective, and our objective is to have spent $3.5 billion 
of Recovery Act funding by August of this calendar year.
    In fiscal year 2011, the Office of Environmental Management 
will continue to draw on the $6 billion of Recovery Act funds 
to advance key clean-up goals. Recovery Act funds allow the 
Office of Environmental Management to meet all of our 
regulatory compliance requirements in fiscal year 2011.
    This funding has also allowed the Office of Environmental 
Management to leverage base program dollars, enabling the 
reduction of our operating footprint from 900 square miles to 
approximately 540 square miles by the end of fiscal year 2011. 
This is a 40 percent reduction which will position the program 
to advance forward the ultimate goal of 90 percent reduction by 
the end of fiscal year 2015.
    We are also able to accelerate the legacy clean-up at 
Brookhaven National Laboratory, the Separations Process 
Research Unit in New York, and Stanford Linear Accelerator 
Center in California into fiscal year 2011 with the Recovery 
Act funding.
    This budget request strikes a balance between maintaining 
support for the Office of Environmental Management's core 
commitments and programs, while strengthening investments in 
activities needed to ensure the long-term success of our clean-
up mission. This budget request significantly increases the 
Office of Environmental Management's investment in science and 
technology areas that are critical to our long-term success.
    Specifically, this request targets $60 million in funding 
the Hanford Office of River Protection for use in developing 
and deploying new technologies for treating tank waste. This 
funding is needed to address near-term technical risks that 
have been identified, but is also needed to leverage and bring 
forward new technologies that could help us mitigate the life 
cycle clean-up of this waste.
    The Office of Environmental Management will also continue 
to strengthen and deploy groundwater decontamination and 
decommissioning clean-up technologies. Specifically, we will 
continue the development of an integrated high-performance 
computer modeling capability for waste degradation and 
contaminant release.
    This state-of-the-art scientific tool would enable robust 
and standardized assessments of performance and risk for clean-
up and closure activities. This tool will also help us better 
estimate clean-up time and costs, and reduce uncertainties.
    The request also provides an additional $50 million to 
accelerate the Waste Treatment and Immobilization Plant at 
Hanford, boosting the budget for the plant to $740 million in 
fiscal year 2010. The additional funding will be used to 
accelerate completion of the design for the Waste Treatment and 
Immobilization Plant.
    Prior to design completion, it is critical that technical 
issues are addressed and incorporated in a timely manner. Our 
intent is to mitigate these risks early and get the design 
matured to 90 or 100 percent.
    The fiscal year 2011 request makes a significant investment 
in the decontamination and the decommissioning of the 
Portsmouth Gaseous Diffusion Plant located in Ohio. This 
investment enables the Office of Environmental Management to 
accelerate the clean-up of the Portsmouth site by 15 to 20 
years, leading to a significant reduction in the duration and 
the cost of the clean-up.
    Now that I have given an overview of our fiscal year budget 
request, I would like to take a few moments to discuss some of 
the areas I will be focusing on as the program moves forward.
    The Office of Environmental Management continues to adhere 
to a safety first culture that integrates environment, safety 
and health requirements and controls into all work activities. 
Our first priority continues to be the health and safety of our 
employees and the communities surrounding our clean-up sites. 
It is my duty to ensure that our workers go home as healthy and 
fit as they came to work.
    Under my leadership, the program has embarked upon a 
``journey to excellence.'' We have developed a new Business 
Model which provides us a solid management base for the Office 
of Environmental Management to become an excellent high-
performing organization. This implementation is key to 
performing our clean-up mission effectively and efficiently.
    A key component in this process is the alignment and 
understanding of headquarters and field operational roles and 
responsibilities. Toward that end, we will continue to focus on 
improving project management, performance, aligning project and 
contract management, streamlining the acquisition process, and 
continue on our very strong performance in awarding clean-up 
work to small businesses.
    We will continue to conduct construction project reviews. 
These reviews examine all aspects of our construction projects, 
including project management, technology, and engineering. 
These reviews assess the progress of each of our major projects 
and determine the overall health and ability to meet cost and 
schedule goals.
    These reviews are scheduled approximately every 6 to 9 
months and are conducted to provide the Office of Environmental 
Management the ability to proactively reduce project risks so 
that issues and solutions can be identified early, rather than 
react, once problems are realized.
    With these improvements, we are confident that the 
Environmental Management Program can succeed in its mission.
    Mr. Chairman, Ranking Member, and Members of the 
Subcommittee, I look forward to addressing your questions.
    [The information follows:]

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    Mr. Geiser. Good morning, Mr. Chairman, Ranking Member 
Frelinghuysen, and distinguished members of the committee.
    The department created Legacy Management 7 years ago to 
provide a long-term, sustainable solution to the legacy of the 
Cold War. Congress supported the creation of this office in 
fiscal year 2004, recommended merging the Office of Worker and 
Community Transition and the legacy components of the Office of 
Environmental Management.
    With Legacy Management having the lead for post-closure 
responsibilities, the department is better positioned to focus 
its major programs and personnel on continuing missions. Legacy 
Management's mission is to manage the department's post-closure 
responsibilities and ensure the future protection of human 
health and the environment.
    Fiscal year 2011 budget request is $189 million. The 
request is tied directly toward achieving our core mission and 
goals. Our primary goals are to protect human health and the 
environment through effective and efficient long-term 
surveillance and maintenance, preserve, protect, and make 
accessible legacy records and information, to assure contractor 
worker pension and medical benefits, and to manage legacy lands 
and assets, emphasizing protective, real and personal property 
reuse and disposition of property.
    We are requesting $36 million to protect human health and 
the environment at and near our legacy sites. An essential 
component of our mission is to ensure that environmental 
remedies are effective and that we are in compliance with 
environmental regulations.
    At the end of fiscal year 2009, Legacy Management was 
responsible for 85 sites that had played a role in the nation's 
nuclear weapons production effort. Our site responsibility is 
current distributed across 28 states, and ranges from the 
Aleutian Islands to Puerto Rico.
    In conducting this mission, Legacy Management has developed 
a strong reputation for working closely and effectively with 
our stakeholders, regulators, representatives from local and 
state governments, and tribal nations.
    We are requesting $11 million to manage legacy records. 
Integral to the clean-up and closure of sites is the 
preservation, protection and public access to records and 
electronic information. Our office now manages more than 
100,000 cubic feet of physical records and a large amount of 
electronic information.
    We expect to process over 2,000 requests for information 
under the Privacy Act, Freedom of Information Act, Energy 
Employees Occupational Illness Compensation Program Act, and 
other inquiries.
    We are requesting $122 million to support post-closure 
contractor responsibilities. Specifically, the Legacy 
Management request provides for continuity of either pensions 
or post-retirement benefits or both for over 14,000 former 
contractor workers. Those workers are associated with the 
following sites: Rocky Flats, Fernald, Mound, Penellis, Grand 
Junction, Portsmouth, and Paducah.
    Under Legacy Management oversight, the contractor pension 
plan assets have increased, and the volatility has been reduced 
through a more conservative investment approach.
    We are requesting $6 million for property management and 
beneficial reuse. One of our goals is to enable beneficial 
reuse of our sites while still ensuring the protection of human 
health and the environment. Where possible, we may make land 
and facilities available for government, public or private use. 
Currently, Legacy Management has almost 4,000 of our 13,000 
acres in reuse. Types of reuse include conservation, industrial 
activity, community infrastructure, grazing, and forestry.
    In closing, the secretary is committed to ensuring that the 
department meets our post-closure responsibilities. This 
includes the protection of human health and the environment, 
access to records and information, meeting our commitments to 
former contractor workers, and maximizing the beneficial reuse 
of properties no longer needed for departmental missions.
    Thank you for the opportunity to be here today to provide 
testimony on this important program.
    [The information follows:]

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    Mr. Pastor. Assistant Secretary, first of all, I want to 
commend you for your safety first orientation. Because I think 
sometimes we forget the mission is protecting not only the 
public, but our own employees and our own contractors. So they 
get to have a good quality of life and get to go home safe and 
healthy. So I commend you for that.
    There has probably been--and you mentioned it yourself--a 
goal to get at cost on time. I know that the agency has had an 
unwanted reputation of having many cost overruns and schedule 
delays. I know that that has been a concern with some of the 
subcommittee members, as well as the public.
    And on page two of your testimony, you talk about the new 
initiative that you are going forward with, the business model 
approach. Could you go into a little bit of detail, how this 
model differs from what you have done in the past, so we can 
get a sense of how we are going to deal with the cost overruns 
and schedule delays?
    I guess I would like for you to answer that.
    Ms. Triay. Absolutely. I would be glad to, Mr. Chairman. 
Thank you.
    The one initiative that I mentioned in my testimony dealt 
with adopting the practice of the Office of Science of 
performing construction project reviews in order to identify 
issues and deal with them before we then have to react to the 
problems.
    I can assure you that the construction project reviews that 
have already been conducted in the Environmental Management 
Office are very thorough reviews in all aspects of the work, 
the technical aspects of the work, the management structure of 
the projects, dealing with specific recommendations that allow 
us to proactively deal with the risks associated with the 
projects.
    Mr. Pastor. Let me interrupt for a minute; in your 
testimony, you say that, in fiscal year 2009, that you reviewed 
five major construction projects. What were they? And how did 
you come up with the ratings?
    Ms. Triay. We reviewed the Waste Treatment Plant, Sodium 
Bearing Waste Facility in Idaho, the Depleted Uranium 
Hexafluoride conversion facilities in Portsmouth and Paducah. 
We also reviewed the Salt Waste Processing Facility at the 
Savannah River site, and the Uranium 233 Down Blending and 
Disposition Project in Oak Ridge.
    With respect to how they come out for the sodium bearing 
waste facility in Idaho, it is a matter of contractor 
performance for construction, so that we can keep the 
contingency that we have assigned to the project, and carry it 
into the start-up of the facility.
    We think that the project is going well. It is challenging, 
no doubt, but the project is going well, and that is what the 
construction project review delineates.
    Mr. Pastor. You describe this as going well, but is it on 
time, on schedule?
    Ms. Triay. Remember that----
    Mr. Pastor. Under budget?
    Ms. Triay. The sodium bearing waste project was baselined 
about a year or so ago. Partly because we wanted to keep some 
of the decontamination and decommission in parts of the clean-
up stabilized and partly because of issues with the design and 
the construction of the project.
    With a new baseline that has been put in place that 
essentially coincides with the focus of the Department to say 
we are going to get off of the GAO high-risk list, we are going 
to be coming in on time and on cost on that revised baseline 
for cost, schedule and work scope.
    Mr. Pastor. For the sodium facility?
    Ms. Triay. For the Sodium Bearing Waste Facility. The 
project that deals with the Depleted Uranium Hexafluoride 
Conversion Facility plant, we are running ahead of the revised 
baseline that was put in place, as well as under cost.
    Again, this is compared to the revised baseline for cost 
scope and schedule that was put in place as a result of our 
efforts to try to make sure that we had good cost estimating 
and that we were not just being optimistic with respect to how 
much the projects were going to cost.
    So with the current baseline, we think that we can deliver 
the operation at both the Depleted Uranium Hexafluoride 
Conversion Projects without further cost increases or schedule 
delays.
    The Salt Waste Processing Facility also has a revised 
baseline that has substantial amounts of contingency. And the 
construction project review also found that we could deliver 
the cost and schedule of that baseline.
    What we do need to do in the Salt Waste Processing Facility 
is align the project and the contract. You know, we are in the 
process of dealing with requests for equitable adjustment from 
the contractor, and our priority there is that alignment, 
because it allows for more effective project management.
    With respect to the Uranium 233, the decision that I have 
made, in concurrence with my line management in the Department 
of Energy, is to not repeat the mistakes of the past and stop 
designing and constructing at the same time. The design build 
approach that we have used for major facilities such as the 
Waste Treatment Plant.
    So what we have done is utilize all the resources that we 
have to complete the design first. And that was in concert with 
the construction project review's finding.
    So that is what we are doing in that project. We are not 
going to establish a revised baseline for cost, scope and 
schedule until we finish the design. And we are not going to 
start construction until we complete the design.
    We realize that the Uranium 233 is a high risk for the Oak 
Ridge facility. But we believe that we will lose more if we 
start trying to accelerate by using the design build approach 
that we have used in this project, as well as other projects. 
However, at the end of the day that cost more money and it 
takes longer.
    Part of the discipline and the recommendations that the 
Government Accountability Office has provided deal with the 
completion of the design before construction begins, and that 
is what we intend to do in this particular project.
    For the Waste Treatment Plant, that is a highly complex 
project. What came out of the construction project review is 
that we needed to, number one, close on all of the remaining 
technical issues. That then allows for the acceleration of 
design.
    As I testified, the increased $50 million over the flat 
funding that we normally request for the Waste Treatment Plant 
is specifically to accelerate the completion of the design so 
that when the project is started in this designed build 
approach, we minimize the risk to the project.
    In addition the construction review team discussed areas 
like management structure and other things that could be 
improved in the project. We have followed the lion's share of 
those recommendations.
    I believe that there are two things that absolutely need to 
happen in the Waste Treatment Plant. We are poised to address 
all of the technical issues that remain, and in addition 
accelerate the completion of the design.
    Without that completion of design, the project continues to 
be at risk as we move forward. Right now, it is our commitment 
to finish the project for the current cost of $412 million and 
by 2019. We have made that commitment to the state of 
Washington, as well as the Congress.
    Mr. Pastor. Thank you.
    Rodney.
    Mr. Frelinghuysen. On page three of your testimony, you 
list Environmental Management's clean-up priorities, and you 
state that they have not changed and you remain committed to. 
And then it goes over activities to maintain safe, secure 
compliance operations, a radioactive tank waste stabilization, 
which you have referred to, special nuclear materials, storage, 
high-priority groundwater remediation, high-priority TRU waste, 
soil and groundwater remediation, excess facilities, and 
decontamination.
    My question sort of gets to the whole issue of how you 
prioritize. In other words, you are doing all these things. I 
am sure you are doing them well. You enter into agreements with 
a lot of states. I would assume, and in some cases I know, 
there are federal courts that are involved in some of these 
situations.
    How do you actually prioritize, whatever you call consent 
decrees or memorandums of understanding? I am sure there is a 
DOE terminology.
    How do you do it and not become straitjacketed by what your 
predecessors have done?
    Ms. Triay. When we enter into agreements, we make every 
attempt to keep these priorities in mind. It so happens that 
every state has the same priorities overall.
    In other words, if you were to go to the state of 
Washington and ask whether the priorities are appropriate 
within that state or the state of Idaho within that state, what 
are the priorities within that clean-up, I think that overall, 
the priorities are going to be the same as has been delineated 
here.
    Mr. Frelinghuysen. Yes, the priorities are going to be the 
same. I have been to Hanford. It has been a while. And I think 
some remarkable things have happened up there. But obviously, 
some of these sites you could use a lot more money, maybe. You 
are going to tell us maybe how the stimulus money has been 
spent.
    I just wonder to what extent--despite your well-known 
reputation for no-nonsense and leadership--how you prioritize.
    Ms. Triay. The commitment that I have made to the 
regulators and the states is that we are going to have complete 
transparency with what we call the life cycle costs of the 
program.
    So we have a life cycle cost that goes through the balance 
of the clean up, for every single clean-up that we are involved 
in for the legacy portfolio of the Environmental Management 
program.
    So the first step is to have the discussion so that they 
understand the budget associated with the different parts of 
the clean-up. And then the second step----
    Mr. Frelinghuysen. ``They'' being?
    Ms. Triay. The state, the regulators, the stakeholders, and 
our colleagues in the environmental activist communities. They 
all have tremendous interest in understanding what we call the 
baseline, cost, schedule, work scope.
    Mr. Frelinghuysen. So they have interest and anticipation, 
right, and expectations?
    Ms. Triay. Yes, and the reason for it is that--if you are a 
regulator, you are not going to acknowledge that because of 
lack of funding, it is okay to miss a milestone. Of course not.
    But on the other hand, in establishing milestones, the 
milestones that get chosen to have penalties against them, as 
an example----
    Mr. Frelinghuysen. So, just so I understand----
    Ms. Triay [continuing]. Could very well be priorities. Yes.
    Mr. Frelinghuysen [continuing]. The milestones where there 
is a penalty associated with it? I assume all your programs 
have milestones, goals and objectives. But if there is some 
penalty involved, that obviously--this is the issue of 
priorities.
    Ms. Triay. Right. And that is why I think that dialogue 
with the states and the regulators, as well as our colleagues 
in the environmental activist community that have a lot of 
interest in the clean-up, is essential. It is those 
conversations that then allow us to fine-tune these high-level 
priorities. The items that you have delineated here from my 
testimony are high-level priorities.
    Mr. Frelinghuysen. Respectfully, when there is a potential 
fine involved--does that raise the ante, in terms of your 
responsibility to address the issue?
    Ms. Triay. I would like to think that it is almost the 
other way around. When we are establishing milestones together 
with regulators, it is a collaborative process. They propose, 
we propose, and an agreement is made.
    We would both like for those milestones that have penalties 
associated with them to be the highest priorities from health, 
safety and protection of the environment. So with----
    Mr. Frelinghuysen. And are they?
    Ms. Triay. Yes. With a good dialogue with the regulators, 
the communities, the states, and the colleagues in the 
environmental activist communities, that is possible.
    Mr. Frelinghuysen. You have got everybody. You got 
Washington State. You got Savannah. You have got, obviously, 
Oak Ridge. You have got Idaho. I mean, I would never forget 
Idaho.
    Ms. Triay. I believe that if you actually look at the 
clean-up agreement, the one that everybody has heard about, the 
tri-party agreement at Washington State, or perhaps the Idaho 
Settlement Agreement. Those are agreements that go to the core 
of the clean-up. The tri-party agreement, the consent decree 
that we have been discussing, the consent decrees about tank 
waste.
    Mr. Frelinghuysen. So do all of those agreements which have 
milestones--in some cases, financial penalties that the 
taxpayers would pick up--how do they jibe with your list of 
eight here? In other words, some of these obviously do not have 
equal value with others.
    Ms. Triay. As I was saying, these are high-level----
    Mr. Frelinghuysen. This is not a trick question. I would 
just sort of like to know. You have eight priorities and----
    Ms. Triay. We established priorities at a high level, which 
then establishes the funding outlay against the total $6 
billion. But within the site, say that a site gets on the order 
of $450 million per year or $500 million per year. For that 
general outlay of the funding, there is a negotiation for 
prioritizing the actual work, the actual milestones that are 
going to have penalties----
    Mr. Frelinghuysen. And on that site there are obviously 
milestones and priorities. I am not just wondering about the 
overall----
    Ms. Triay. The overall framework defines the funding outlay 
that we have delineated for the particular sites. For the past 
5 years, the funding for the sites has not dramatically 
changed.
    Mr. Frelinghuysen. And is it mirrored in your spending of 
the stimulus money?
    Ms. Triay. In the stimulus funding, it is----
    Mr. Frelinghuysen. I think I know the answer.
    Ms. Triay. But the reason for that is, the stimulus funding 
objective was of course to make progress, but also to create 
jobs. So we chose specifically for the Recovery Act portfolio 
types of work where there were proven technologies, where the 
regulatory framework had been established, where we had a 
demonstrated track record of performance, where we could 
actually hire individuals and train them in the nuclear field 
and be able to have them work to make progress in an 
expeditious manner.
    Therefore, we selected on purpose transuranic waste, 
loadable waste, soil and groundwater remediation, and 
decontamination and decommissioning for the Recovery Act 
portfolio.
    And the base program goes to the highest priorities based 
on per unit volume, tank waste, spent nuclear fuel, and excess 
nuclear materials. It is almost the reverse. But it is because 
the Recovery Act has two objectives: making progress, but also 
creating jobs. And in order to create those jobs, we 
specifically showed projects that have a proven track record of 
excellent performance.
    Mr. Frelinghuysen. Okay, thank you, Madam Secretary.
    Thank you, Mr. Chairman.
    Mr. Pastor. In order to accommodate you and also going back 
and forth, I will start with Simpson, Berry, Rehberg, Davis, 
and Alexander. We will go in that order.
    So, Simpson.
    Mr. Simpson. Thank you, Mr. Chairman. I have to leave at 3 
o'clock to start a National Park hearing down at Interior.
    So thank you for being here today. And let me also publicly 
thank you for the work you did with OMB in making sure that the 
E.M. clean-up budget accommodated the needs all around the 
complex. I know that that was kind of a fight with OMB, as it 
always is, to try to make sure that those resources are there.
    The advanced mixed waste treatment plant in Idaho has had 
nine extensions of their contract. That creates an unsettling--
you know, it is like monthly extensions. It creates an 
unsettling position for the employees, for the contractor, 
other things.
    What is holding up the contract? And when can we expect 
that decision to be made?
    Ms. Triay. We have published on our Web site acquisitions 
for which we are going to make the award between January and 
March, and for which we are going to make the award by the end 
of this month. So we are well on our way to making the award by 
the end of March.
    Mr. Simpson. Okay, I appreciate that. Let me talk about 
another subject for a minute, the implications of Yucca 
Mountain on the E.M. budget. I do not want to get in the pros 
and cons of the decision on Yucca Mountain or anything, but 
what does it mean for the vitrified high-level waste at Hanford 
and Savannah River? What does it mean for the high-level waste 
that is currently stored in Idaho, the defense waste, and other 
things?
    Since the termination of Yucca Mountain, have you consulted 
with the major stakeholders about the implications for their 
inventories of spent nuclear weapons? How will this impact the 
current agreements that you mentioned, the tri-party agreement, 
the Idaho governors agreement, and so forth? Will we meet the 
milestones on there or are we looking at penalties down the 
road? Or do we not know yet?
    Ms. Triay. We are committed to meeting the requirements of 
those agreements. As the Secretary has said, he is relying on 
the Blue Ribbon Commission to come up with a robust path 
forward for high-level waste and used nuclear fuel. So we are 
committed to those agreements.
    I would like to just point out that a decision with respect 
to a federal geologic repository is really not on the critical 
path for any of the clean-ups that you mentioned, not at 
Savannah River Site, not at the Washington State, and not in 
Idaho.
    The Energy Community Alliance approached me about having a 
thorough workshop with the stakeholders, to make sure that we 
are completely understanding of the issues that they have and 
that we can answer the questions that they have.
    As you know, in Idaho, we are very close to being able to 
finish all of the tank waste work. And, the final disposal is 
not on the critical path to putting that waste in a very stable 
and protective waste form. The same thing goes for Savannah 
River and Washington State.
    Mr. Simpson. Of course, Washington and South Carolina are 
currently filing a lawsuit against the Department of Energy.
    Ms. Triay. But to be fair----
    Mr. Simpson. I do not know whether they have a case----
    Ms. Triay. On the path forward that we have for the clean-
up, the ultimate decision of where the waste is going to be 
disposed of is not on the critical path of that clean-up fast 
forward.
    And both Washington State and the Savannah River site, the 
regulators, the state, the community leaders have worked 
closely, with the Department of Energy on the path forward for 
the clean-up that ultimately puts the radioactive waste into 
stable waste forms.
    Mr. Simpson. Yes. Well, I would encourage the department to 
work with the various states. The state of Idaho has not joined 
the lawsuit as of yet. I am trying to encourage them not to, 
quite frankly. I do not know that there is actually a suit that 
they have out there. Because the DOE really has not violated 
anything until 2035, when they are supposed to have the waste 
out of there. And we have not seen what the path forward is yet 
from the Blue Ribbon Commission and so forth.
    So I would encourage you to start working--or at least be 
out and talking to the states, the DOE, about what is going on 
and what the implications are for the various clean-up sites 
and so forth.
    A question for you, Mr. Geiser. I understand that this 
committee with the ARRA funds, we hired a number of employees 
to accelerate clean-up at Idaho and stuff. They are now looking 
at plans to lay off those employees, once the clean-up is done. 
It is going to be--you are going to lay those off once the ARRA 
funds have been spent and so forth.
    I understand that this committee provided, many years ago, 
$5 million for worker transition at the INL at that time and 
that there is still $1.5 million in remaining funds. Will those 
funds be used to help those workers that transition out of 
employment, you know?
    Mr. Geiser. Sir. Sorry, prior to fiscal year 2005, there 
was $1.5 million set aside, I think, in a supplemental bill to 
provide for workforce retraining for employees at the Idaho 
National Laboratory. And of that $1.5 million, I believe there 
is approximately $1 million left.
    That money is available or historically has been available 
for activities like tuition reimbursement, worker retraining, 
resume writing, placement services. So that money is available 
with Idaho.
    And I did have a discussion with the Idaho Falls mayor and 
a representative from the eastern Idaho Chamber of Commerce a 
week ago or so. They were going to pursue that with the Idaho 
Operations Office. I am not sure where that discussion is, but 
their proposal seemed viable at the time.
    Mr. Simpson. Okay. Because there will be some layoffs that 
come from that. I mean, you know, there was an acceleration of 
employment and clean-up, and there will be some layoffs.
    One last question. Your pensions issue--for example, your 
budget says that the projected pensions liability for 
environmental management will drop from $567 million to $153 
million. Could you tell me about the pensions issue, how you 
are going to address that across the complex, either one of 
you?
    Mr. Geiser. I can speak to Legacy Management pensions.
    Mr. Simpson. Okay.
    Mr. Geiser. At this point, the contractor pension plans 
that we are responsible for funding are at the 90 percent 
funding level or higher; so we actually were able to reduce our 
request for fiscal year 2011 for pension payments. Largely, 
that is attributed to the fact that when the sites close, the 
workers are in what we would call a closed population pension 
plan.
    The timing was fortunate that we received the major sites 
from Environmental Management in 2007. And so the contractor 
went from a very aggressive stock-based pension plan portfolio 
in 2007 to a very conservative bond approach. And we actually 
made money over the last 2 years, so our pension----
    Mr. Simpson. You are the only ones.
    Mr. Geiser. All right, so it was not necessarily brilliant 
financial management. It just happened to be good timing. So we 
were fortunate in that we had this closed population and that 
the contractor went to a more conservative investment 
portfolio. So we still have a request in the fiscal year 2011 
budget to meet the ERISA minimum payment, but it is down from 
fiscal year 2010.
    Mr. Simpson. Okay. Well, let me just say, I need to move 
on, but I appreciate the work that you are doing in Idaho. You 
are doing a great job cleaning the place up. And we appreciate 
it very much. I know that some people have said, ``Boy, Idaho 
really took it in the shorts in the president's request,'' if 
you compare last year's budget to this year's budget. But you 
have got to realize that in there is the completion of the 
sodium bearing waste facility. So you would expect, once that 
is completed, that that budget would go down.
    So I appreciate the work you have done on that, and look 
forward to working with you to make sure that we meet our 
obligations.
    Ms. Triay. Thank you.
    Mr. Pastor. Well, that is a point of confidence, that the 
congressman is happy with the president's request for Idaho. 
Yes, but I think it is on the record, so we are going to frame 
that and send it to----
    Mr. Simpson. It is a lot better----
    Mr. Pastor. Well, in response to Mike, I have members from 
Washington state, as well as South Carolina, who are very 
concerned about the Blue Ribbon Commission continuing to look 
at the deep geological deposit.
    But I heard you to say--and I just want to make sure I am 
correct--that the clean-up at these sites--and you named three 
of them--can continue--it is not on a critical pathway.
    Ms. Triay. Mr. Chairman, you are absolutely correct. That 
is what I said.
    The decision as to what is the ultimate disposal of the 
high-level waste or the used nuclear fuel at the three sites 
that I mentioned--Washington, Savannah River Site, Idaho--is 
not on the critical path. In other words--we are moving forward 
with the clean-up that we have delineated.
    That is why you see that, if anything, the president's 
budget increases some of those areas, like the Waste Treatment 
Plant that we were just discussing. I believe that we have come 
up with a path forward in collaboration with the states, in 
terms of the protective waste forms that are going to be 
produced as a result of all of these capabilities that we are 
building.
    Three of the construction projects that you and I discussed 
at the beginning of the hearing are for dealing with tank 
waste, the Salt Waste Processing Facility, the Waste Treatment 
Plant, and the Sodium Bearing Waste Facility in Idaho.
    You are absolutely correct that progress on the clean-up, 
in other words, the removal of the waste from the underground 
tanks, followed by the processing of that waste, followed by 
the treatment of that waste, followed by the generation of very 
protective waste forms for human health and the environment, 
such as glass, does not necessitate the final decision 
regarding the geologic repository.
    Mr. Pastor. Marion.
    Mr. Berry. Thank you, Mr. Chairman.
    I have not been on this committee all that long, and 
everybody on the committee knows I am not a nuclear physicist. 
Did I understand you to just told Mr. Simpson from Idaho that 
you all had finished something? [Laughter.]
    Ms. Triay. At Idaho, sir, we actually have had a tremendous 
amount of success stories. For instance, transuranic waste. The 
agreement that Congressman Simpson was talking about that 
requires a particular amount of waste be in this position and 
the Waste Isolation Pilot Plant in New Mexico from Idaho; we 
are ahead of all of the environmental compliance milestones in 
that agreement.
    The transuranic waste disposal at Idaho is done as a matter 
of routine at the Idaho operation. In addition to that, in 
2010, we are going to finish moving all of the wet used nuclear 
fuel to dry at the Idaho facility.
    In addition to that, we are going to finish the Sodium 
Bearing Waste Facility. We are going to treat that waste, and 
we are going to meet the environmental compliance commitments 
that we have to produce a protective waste form from those that 
highly radioactive underground tanks.
    The Idaho operation routinely performs above expectations. 
We have something that is called a cost performance index and a 
scheduled performance index.
    Today, we have the decontamination and demolition 
activities at Idaho, that for every dollar spent, you get $2.60 
worth of work. And I believe that Congressman Simpson agrees, 
that the performance of the Idaho clean-up contractors and the 
federal staff has been exceptional.
    Mr. Berry. If I had known you were going to say all those 
nice things about Idaho, I probably would not have asked the 
question. [Laughter.]
    You got the Chamber of Commerce. In these three sites where 
you have tank waste, you use three different techniques. Is 
there a particular reason for that? Or would it not save any 
more to use the same technique every place?
    Ms. Triay. The reason for the different approach at Idaho, 
versus Savannah River and Hanford, which are very similar 
approaches, is that Idaho started the work that led to this 
highly radioactive waste in underground tanks later than 
Hanford and Savannah River sites.
    So Idaho was wise in how they laid out how they were going 
to produce this waste. They produced this waste in an acidic 
form rather than in a form that, like the Hanford and Savannah 
River sites, where you have a lot of precipitates, or a lot of 
solids associated with the waste.
    So if you actually look at the tanks after clean-up at 
Idaho, you can see the bottom of those tanks, and the clean-up 
is done in an extremely effective manner. Even the material 
that the tanks were built with, is a material that actually 
allows us to perform these extremely robust clean-ups.
    So the reason that Idaho is different from Savannah River 
and Washington state--is because in the nuclear weapons 
production, they came to do similar work much later into the 
cycle, and we were smarter with respect to environmental 
protection.
    In Washington, and Savannah River, we have very similar 
approaches. We have a vitrification plant to produce glass logs 
that have a fraction of the highly radioactive waste from in 
the underground tanks.
    We have a low-activity waste path forward, where the low-
activity waste is going to stay in the state of South Carolina 
or in the state of Washington. And we have a treatment step 
that separates the bulk of the volume with a very small amount 
of radioactivity, from a smaller portion of the volume with a 
vast majority of the radioactivity, over 99 percent.
    The reason the treatment step is somewhat different between 
the two sites is because in South Carolina, at the Savannah 
River site, they used one process predominantly, which is the 
PUREX process. At Hanford, they were doing research and trying 
to do different testing, different processes, and therefore, 
they have a lot more chemicals in that tank waste.
    Savannah River has twice the amount of radioactivity than 
the Hanford tanks, but the Hanford tanks have thousands of more 
chemicals than the Savannah River.
    Mr. Berry. Thank you very much. That is the first time I 
had ever heard anybody in this committee mention finishing 
something, and I am glad to know that it does happen.
    Mr. Pastor. Rehberg.
    Mr. Rehberg. Thank you, Multihazard Mitigation Council. As 
you can imagine, I do not get a lot of questions about this 
budget in Montana as I travel around, but I do get a lot of 
questions about the stimulus bill and the money that was spent.
    And as I understand in looking at some of the numbers that 
you initially alluded to in your opening statement about jobs 
saved and jobs created, you have 18 sites that are currently 
being cleaned up. No new sites were added as a result of the 
stimulus. So it was a continuation or an expansion of existing 
clean-up.
    Could you explain to me then, as I understand--and I defend 
parts of the stimulus, even though I voted against it. You 
build a highway; economic development can be created. It is an 
asset. You rebuild a bridge; it is an asset.
    Just exactly what is the asset of the sites that you are 
cleaning up that ultimately would make permanent jobs as a 
result of a temporary expenditure?
    Ms. Triay. I thank you for that question and for the 
opportunity to address that. The Environmental Management 
clean-up is one of the biggest liabilities of the federal 
government. So our intent in the selection of the activities 
that we have in the portfolio is what we call site footprint 
reduction.
    What that means is, get rid of the waste, disposition of 
the waste, deal with the contaminated soil and groundwater, 
demolish and clean up excess facilities in the complex.
    All of that leads then to being able to free up vast tracts 
of land with two geochemical characterizations. Where the 
resources surrounding those sites in the complex are composed 
of very technically sophisticated communities that could help 
in the energy future.
    Mr. Rehberg. Are you able then to define the difference 
between private opportunities, privately held properties 
deeded, as opposed to federal properties? Or are you mostly 
talking about cleaning up on federal properties, that then the 
federal government can, cannot or will not sell, or trade?
    Ms. Triay. The federal government routinely--for instance, 
at Oak Ridge, transfers land from our portfolio into the 
portfolio of the community that has----
    Mr. Rehberg. Government to government?
    Ms. Triay [continuing]. So that they can----
    Mr. Rehberg. Can you name any situation where it was 
transferred to government and sold on the free market for 
economic expansion or development?
    Ms. Triay. I cannot give you an example of that.
    Mr. Geiser. I can give some.
    Ms. Triay. Go ahead.
    Mr. Geiser. Just, sir, last fall, we actually 
dispositioned--that is the term we use--a four-and-a-half acre 
site in New Brunswick, New Jersey, to a private entity. That 
was a site that had been cleaned up under the FUSRAP program.
    Mr. Rehberg. You sold it?
    Mr. Geiser. We sold it through the General Services 
Administration.
    Mr. Rehberg. I am looking at the numbers, you have filed a 
claim on your Web site: jobs saved or created, and it seems to 
be the total of 7,718. If you do not come in for exactly the 
same amount of funding, those are all temporary jobs, correct?
    Ms. Triay. Yes, those individuals, they have been hired for 
the entire Recovery Act period. We have an internal goal 
through the end of 2011, because we wanted to accelerate and 
maximize the job creation.
    Mr. Rehberg. Okay.
    Ms. Triay. I just wanted to make sure that I tell you that 
many of the communities surrounding our sites are very 
interested in coming up with a vision that allows them to use 
these vast tracts of land for a beneficial reuse. And that is 
something that has already been a very good, proven concept for 
Legacy Management. The Mound site, and many other sites, that 
we have been able to transfer.
    We are looking at different models, the model that you 
asked about, and also leasing land, for specific private 
ventures to come into those cleaned-up footprint areas in our 
different facilities, and as well of transfer of land----
    Mr. Rehberg. Just one more question, Mr. Chairman--were you 
responsible for the clean-up down in Denver where the new 
airport site is? If you remember, that was strictly military?
    Ms. Triay. I think the Department of Defense, yes.
    Mr. Rehberg. Okay, because that seems to be a success story 
in my mind of economic development was built upon, or that 
replaced a dirty site that was cleaned up. If you have got 
other examples, I would sure like to have them.
    The construction is about the only thing I can defend in 
the bill as something that was somewhat stimulative. It is not 
that I am against things like food stamps and Head Start. I am 
certainly for them, but it would seem like those would have 
been traditional appropriations requests and through the normal 
appropriations process, as opposed to rolling them into a 
stimulus package. But today's not the day to argue that.
    But I can see where, in your expenditures--an asset is 
created by the cleaning up. All you have really done is speed 
up the amount of time. And I appreciate you doing that. It is 
going to have to eventually be cleaned up anyhow. I am just 
sorry it was using borrowed money.
    Mr. Pastor. Mr. Geiser, I think you were going to respond 
also to the congressman about--I saw where somebody came to 
give you some information. I do not know if you want to share 
it or we will go to the next member.
    Mr. Geiser. Well, yes, that was not a member of my staff. 
It was something that the department did about 15 years ago 
that I remember happening, but I do not have any details on it.
    Mr. Pastor. Okay.
    Ms. Triay. But if I may--I would like to take this question 
for the record and give you the information on the land 
transfers. We have a private industry that has come in to 
establish businesses on the lands that we freed up as a result 
of the clean-up. So we would like to give you a comprehensive 
list, if we could.
    Mr. Rehberg. Thank you.
    Mr. Pastor. Davis.
    Mr. Davis. Madam Secretary, thanks for being here today. I 
want to thank you for the ease of working with you and your 
office on issues that certainly are important to the area that 
I represent and others in Tennessee. You have been someone who 
has had an open ear and as suggestions are made, you are very 
willing to sit down and discuss issues that are important.
    In an answer to my friend from Wyoming, USEC in Oak Ridge 
is on the old K-25 facility. It is a private-owned company. And 
as a result of the clean-up, this company now, they are in 
autocross in Ohio and other places, employ somewhere around 
2,500 folks. They could not be in Oak Ridge today in the old 
facility of K-25 unless this clean-up had actually happened.
    So it is more than just, has it been transferred to a 
private entity? Is a private entity working in those 
facilities, doing something that is great for America? I 
believe that the centrifuges process that we see there is 
something that is going to turn out to be great for this 
country. That facility is run by a private company, with 
private investors. As a result of the clean-up, they were able 
to locate there, as well as other sites that we have.
    Second thing I want to point at, a lot of folks call it the 
stimulus package. It was the American Recovery and Reinvestment 
Act. They say it had nothing to do with long term down the 
road.
    From the last quarter of 2008 and the first quarter of 
2009, we lost over 4 million jobs. Had we not lost those, we 
would be at about 6.5 percent unemployment today. So when we 
talk about this, it is not a stimulus bill. It is investing in 
America and investing in America's future.
    And as we invest those dollars, the 1,500 folks who will be 
working at the integrated facilities in Oak Ridge, for 
instance, up through a 2-year period of time, will have a good 
job. As I look at this list, we have only $90 some billion, and 
we say we may need as much as $250 billion to clean up the E.M. 
sites that we have actually designated?
    The process at Y-12, should we have an accident there, 
would shut down the programs that we have today. The ongoing 
progress that we have. So it is more than just saying how we 
transferred this to some private entity.
    If we have an accident in some of those integrated 
facilities all across our nation. Especially there where I have 
a partial representation of Oak Ridge--if that shuts down, it 
shuts down highly enriched uranium processing. It could shut 
down SNS. It could shut down our supercomputers. We could be 
denied for weeks, days, months or even years of going back, if 
we have an accident there.
    So as we talk about--the quicker we get it cleaned up, 
whether or not it is economic recovery and reinvestment money 
or whether it is dollars that we appropriate from year to year, 
the better off we are. It is time we start investing in 
America's infrastructure instead of whatever we have been doing 
the last 30 years that has done nothing for us. Just look at 
the legacy buildings that we have had there and the cost of 
maintenance. In Oak Ridge alone, $200 million a year, just to 
ventilate those buildings, to go through them, run them out 
through a flume, and then recycle the air over and over again.
    So what we have done with the American Recovery and 
Reinvestment Act has stimulated the economy. So you can call it 
a stimulus from that standpoint, because it is working 
currently.
    I am pleased that at least you are in this position. Would 
you speak to many of us who have deep concerns about some of 
the legacy sites that we have, continuing to be a dangerous 
situation for America's defense, America's security, and 
America's future, if we do not clean these buildings up.
    So as far as I am concerned, if you were to suggest that we 
had a $200 billion E.M. economic recovery or stimulus package, 
I am willing to support that. I just want to get it done so we 
can move on. We have invested in our infrastructure through the 
1950s, 1960s, 1930s, 1940s, 1970s, and 1980s, and then we quit 
about somewhere along the early 1980s. We quit investing in 
infrastructure, and it has been deteriorating and falling down 
as a result of it. So what we have been doing, I support it.
    In Oak Ridge, we have got 12,000 people; 400 work for the 
federal government; 11,600 work for a private contractor, an 
entrepreneur, in the free enterprise system. It just happens to 
be that taxpayer dollars are used to hire these folks to do 
work that we need.
    But as we do the clean-up on the E.M.-designated areas, I 
hope that we continue to have an independent third party to 
actually verify what is going on there for several reasons. I 
think that if we have that, at least employees will feel safer. 
We will know that the sites are cleaned up. At least we will 
have third-party verification of that.
    So it is my hope that you can continue to do that. And I am 
asking you if that is part of the plans.
    Ms. Triay. It is. I mean, we have a clear policy in the 
Environmental Management program to use entities like Oak Ridge 
Institute for Science and Education, which I know that you are 
very familiar with, to come in and verify the clean-up.
    So we are going to continue with that policy. We think that 
it is extremely useful to make sure that we have the 
credibility and the clean-up that we need to have.
    I just wanted to make a comment on your previous comments 
on the Recovery Act. The Environmental Management program is 
estimating that we will award up to $2 billion to small 
businesses, contracts utilizing the Recovery Act funds, 
especially in Oak Ridge. We have had a tremendous amount of 
outreach, to get small businesses into this important area of 
nuclear work.
    And you are absolutely correct that the environmental 
liability grows as the facilities that we need to deal with are 
still being maintained, rather than essentially completely 
cleaned up.
    Mr. Davis. And the quicker we reduce that footprint in all 
of our national labs and in areas such as Y-12 and NNSA. The 
quicker we reduce that, the quicker we start saving.
    As we talk about Y-12, for instance, I understand it is 
$200 million a year that it takes just to keep the buildings 
from freezing. So they continue to heat water and run steam 
through it. The steam leaks, you can hear the hot water leaking 
throughout the building, almost two or three stories up or down 
from where the leak is.
    When they go in to start trying to repair it; it may break 
and shut down the whole operation in some place like Y-12, 
where our nuclear fleet depends on them. And the other work 
that we do, it is extremely imperative.
    So the more we can do to reduce that footprint of the 
legacy buildings that are there, the buildings that helped save 
the world in the early 1940s, the better. At that time, we had 
never built this type of facility before, so we were not 
totally aware of what might ultimately happen.
    We know today. And we have a responsibility not to just 
those communities, but to America and to the world. We know 
that we have to clean this up and get it done.
    So as we talk about spending borrowed money, borrowed 
money; we spent $10 trillion since 1981 on no infrastructure in 
this country. As we hear some debate now about spending 
borrowed money, these folks must be backsliders. You know, we 
get religion, then we backslide when we get out of the church 
house.
    So I wonder where these folks were, on the front row and in 
the front pew, when we added $10 trillion in debt that last 28 
years. But thank you for being here.
    Mr. Pastor. Since we are about 6 months into fiscal year 
2010, in your testimony, page two, you mention that you will do 
10 reviews. I am just curious where we are at on those 10 
reviews, and what have we found. Have we met the scope and 
schedule? Have there been any early warnings?
    Mr. Pastor. What are the 10?
    Ms. Triay. The same five construction project reviews get 
reviewed every 6 months, sometimes sooner, depending on the 
magnitude of the project. For instance, at the waste treatment 
plant, we had the first review in August. We had our second 
review in November.
    We have also utilized this approach of thorough reviews 
with peers that come to the table to try to figure out exactly 
what we could improve. We have also used that approach for some 
of the clean-up projects, that we have. In addition, to the 
five construction projects that reoccur every 6 months.
    And I would just like to give you some of the things that 
we have found. In going through the Uranium 233 project at Oak 
Ridge, one of the things that these reviews found, was for E.M. 
to make absolutely certain that we understood the amount of 
transuranic elements that were associated with the final 
disposal form.
    And we did exactly that. As a result we have changed some 
of the design, because a lot of the waste that will be produced 
will be low-level waste. This is beneficial, because it can be 
dispositioned in a less expensive manner than if it were 
transuranic waste.
    We have thoroughly reviewed the East Tennessee Technology 
Park clean-up Project. That is one of the decontamination and 
decommissioning projects where we have experienced cost growth 
as well as schedule delays. Normally, our decontamination and 
decommissioning projects actually perform ahead of schedule and 
under cost.
    This particular one has an issue because some of the 
technician deposits that need to be cleaned out of our K-25 
building in this complex have turned out to be more 
technologically challenging than we anticipated. We used that 
review to look through some of the options that we could 
utilize to address that issue.
    In the area of tank waste, we clearly were able to identify 
the aspects of the tank waste clean-up that could result in 
reductions in life cycle costs and a shorter period of 
execution. In particular, we are able to treat the waste at 
tank or near tank, which accelerates the process. We can start 
treating waste ahead of the Waste Treatment Plant and ahead of 
the salt waste processing facility at Hanford and Savannah 
River, respectively.
    Our reviews clearly delineated, that that is something that 
we could do to shorten the period of execution, as well as 
reduce the life cycle costs of the program.
    We also, as a result of these reviews, have identified how 
well our treatment schemes are going to work. And that has 
allowed us to concentrate on whether or not we could come up 
with aspects of the treatment technology that could also reduce 
the life cycle costs and the period of execution.
    Ultimately, the main objective of the tank waste clean-up 
is to be able to load more radioactivity into the final waste 
form. It reduces the period of execution and also reduces the 
amount of waste that we generate at the back end, so those 
reviews have been very helpful in focusing our technology 
development needs so that we can delineate a robust technology 
development program and present it to the Congress.
    Mr. Pastor. Any early warnings could you highlight that the 
reviews provided?
    Ms. Triay. The best example that we have of that is 
probably the Uranium 233 Project. Had we gone on to design, the 
treatment of the Uranium 233 the way that we had intended it 
was going to produce transuranic waste.
    In reality, it became evident that we were going to produce 
a lot of low-level waste, and that really allowed us to 
incorporate those thoughts into a design.
    Mr. Pastor. Rodney.
    Mr. Frelinghuysen. I just want to get a little clarity 
here. I know Congressman Simpson lifted up the edge of the tent 
on Yucca, and I just want to make sure I understand. We tend in 
the community, quite honestly to be, shall we say, Yucca-
centric here. I think there is a sort of a uniform feeling we 
are somewhat disturbed that this option was taken off the 
table.
    I understand you do incredible work and that whatever you 
do can be kept on site for the foreseeable future in using the 
various technologies that you and your good people and 
contractors bring to bear. But in the overall scheme of things, 
nuclear waste is going to continue to be reduced. It is not the 
type of waste that you deal with, but it does add a degree of 
complexity and adds to the tension of future decision-makers.
    Could you comment a little bit on that?
    Ms. Triay. Well, what we do in the Environmental Management 
program is emplace the already existing waste----
    Mr. Frelinghuysen. Yes.
    Ms. Triay [continuing]. A highly radioactive waste in 
underground tanks into a more protective waste form for human 
health and the environment. So we in the Environmental 
Management program----
    Mr. Frelinghuysen. And, of course, you have a number of 
sites or a number of sites around the country. And that 
obviously means that we have to continue to do the things that 
protect not only workers, but protect the constituencies that 
surround these sites.
    Ms. Triay. That is absolutely correct. And my point was 
that we already have the waste. In other words, we have the 
mission of the legacy clean-up. The waste has already been 
produced. And now the question is, what are we going to do to 
ensure that we clean up the legacy of the cold war?
    And for that reason, our chartering of the Environmental 
Management program is to produce waste forms that would be 
robust enough for almost any option that gets considered.
    Mr. Frelinghuysen. Yes, the different waste forms you have 
described.
    Ms. Triay. Glass?
    Mr. Frelinghuysen. Yes, expurgation, also.
    Ms. Triay. Mineralized forms, ceramics. But the program 
right now for high-level waste is concentrating on borosilicate 
glass, which is an extremely protective glass that is the 
standard of the rest of the world.
    Mr. Frelinghuysen. Could you comment on what is classified 
as unassigned clean-up legacy? I think this committee urged the 
department to assign disposition responsibilities for remaining 
spent fuel, special nuclear fuel. What is the status of that 
effort? That was a transfer of liabilities from the nuclear 
side to the environmental side.
    Ms. Triay. Right.
    Mr. Frelinghuysen. And is that across the complex?
    Ms. Triay. Across the complex in 2008, we had a data call 
so that all of the sites in the Department of Energy that had 
excess facilities and excess materials, waste that needed to be 
dispositioned, would come forward and provide us with that 
information.
    From that, we wrote a report to Congress, and essentially 
we said that, based on level funding, the Environmental 
Management program could not tackle that challenge until about 
the year of 2017.
    The Recovery Act changed that. We have been able, as a 
result of the Recovery Act, to start tackling many of those 
excess facilities that were declared by the different programs, 
NNSA, the science program, and the nuclear energy program, 
early due to the Recovery Act funds.
    We have done that at Oak Ridge. We have done that at Idaho. 
We have done that at some of the science sites--like the Oak 
Ridge National Laboratory, as well as some of the NNSA 
facilities, such as Y-12.
    Mr. Frelinghuysen. So what remains to be done? You got a 
start under stimulus funds.
    Ms. Triay. The portfolio of excess facilities that was not 
already in the legacy portfolio of the Environmental Management 
program is substantial. I believe that the Department reported 
to Congress that it was going to be total project costs on the 
order of $9 billion.
    Mr. Frelinghuysen. Monumental.
    Ms. Triay. Yes. So the Recovery Act has been able to 
address some of those issues. But at the level funding we 
receive as we move forward, we do not have the flexibility to 
continue with those excess facilities that are not already in 
the legacy portfolio of the Environmental Management program.
    That is our general policy. If a particular site has one of 
those excess facilities, it creates a hazard for that site, for 
the ongoing mission. We are always willing to reprioritize. We 
review the decontamination and decommissioning portfolio to see 
whether we can actually tackle the highest risks for that site.
    Mr. Frelinghuysen. In your testimony, you made reference--
and maybe you want to enhance or add to that discussion--to 
your headquarter's reorganization. The whole environmental 
operation has been sort of reorganized, has not it? The sites 
now report directly to you?
    Ms. Triay. That is correct. We were trying to streamline 
the reporting chain between the sites and headquarters in order 
to align our vision, mission priorities. We feel that, as we 
move forward and we hold ourselves accountable for flawless 
performance, this program has come of age. It is time for us to 
be able to estimate the cost of a clean-up, estimate the time 
that it is going to take, and deliver on cost and schedule for 
all of the activities that we are involved in.
    Mr. Frelinghuysen. So the reorganization has actually taken 
place?
    Ms. Triay. The reorganization has taken place. The sites 
report directly to my principal deputy as the direct 
supervisor, with me as the second-level supervisor. In addition 
to that, we have instituted two officers, one for business and 
one for technical. We now have very clear roles and 
responsibilities where the senior leadership team of the 
Environmental Management program can speak with one voice, and 
try to make absolutely certain that we stay focused on the 
performance of the Environmental Management program.
    Mr. Frelinghuysen. So the specific problems that led to 
this reorganization have been addressed. One of those 
problems--the whole issue of cultural change and things of that 
nature has been changed in your operation here?
    Ms. Triay. We believe that the oversight of the different 
sites and clean-up projects should be commensurate with their 
performance. The way that the model works is the headquarters 
oversees the field sites. The field sites oversee the 
performance of the contractor.
    And the bottom line is that when there are performance 
issues, our role is not only to assist the sites in 
headquarters and for the site to assist the contractor, but 
also to hold accountability throughout the system.
    The degree of oversight should be commensurate to how well 
the site is performing. The degree of oversight from the field 
to the contractor also needs to depend on the performance that 
the contractor is delivering. We cannot be satisfied with 
anything other than delivering quality product on time and on 
cost.
    And when the weaknesses in performance are identified, we 
increase the degree of oversight from headquarters to the field 
or from the field to the contractor. There are always 
tensions----
    Mr. Frelinghuysen. Well, you have made some progress. Are 
there some areas where people have been basically out of 
compliance with whatever you set up as a new structure?
    Ms. Triay. Clearly, we have had growing pains as we have 
tried to make sure that we implement this new business model 
that depends on strong oversight in order to make sure that we 
deliver a quality product on time and on cost.
    Mr. Frelinghuysen. Well, I know there are technical 
difficulties. I just wondered whether they are on the issue of 
what you call the missed milestones, are there--some that are--
--
    Ms. Triay. We have an excellent record of environmental 
compliance in the Environmental Management program. Last year, 
we had 137 compliance milestones, and we met 95 percent of 
them. And in 2010, our goal is 100 percent compliance. And for 
2011, it is 100 percent compliance, as well.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Mr. Pastor. Because you brought the issue up of cost 
estimating, GAO, in their 2010 report, basically said that DOE 
has not had a policy to establish the standards for cost 
estimating for over a decade. Its (DOE) guidance is outdated 
and incomplete, making it difficult for the department to 
oversee development of high-quality cost estimates by its 
contractors. They are not naming you specifically, but DOE in 
general.
    And in the past, we have had to redefine baselines, as you 
well know, and we have. So my question is, what have you done 
to improve your cost estimates so that we just do not keep 
redefining the baseline? Because that just keeps pushing it 
forward, but it is over budget and not on time.
    Ms. Triay. Absolutely. And that is not acceptable, Mr. 
Chairman. So the Office of Cost Analysis in the Department of 
Energy has the overall corporate responsibility for addressing 
the recommendations that were made by the Government 
Accountability Office (GAO) in the recent GAO report on the 
subject, just like you were mentioning.
    And the deputy secretary response to these Government 
Accountability Office recommendations deal with the Office of 
Cost Analysis and the Office of Engineering and Construction 
Management issuing a cost-estimating policy and directive, 
standardizing the way in which we do independent cost 
estimates, and in making sure that those cost estimates are 
performed at critical decision points along the project.
    DOE will centralize its cost-estimating functions and 
consider the organizational structure adopted by the Department 
of Defense. We in the Environmental Management Program have a 
Consolidated Business Center. In that Consolidated Business 
Center, we have team of cost estimators, headed by one of the 
most respected cost estimators in the complex, Terry Brennan. 
We believe that we are well poised to implement the corporate 
policies that are being developed in this area.
    The Office of Cost Analysis will have the responsibility to 
address the this time recommendations of the Government 
Accountability Office, and we will plan and coordinate the 
schedule for those independent cost estimates.
    The Environmental Management program also has made great 
strides in coming up with a database of all of the costs 
associated with performance that we have delivered in projects 
like Rocky Flats, Fernald, and other projects that we actually 
cleaned up ahead of schedule and under cost.
    So I believe that in your question, what you focus on is 
something that we in the department are very committed to 
turning around. We agree that the old programs should be able 
to estimate the cost, estimate the schedule of a project, and 
deliver within the estimates.
    Mr. Davis. Very briefly, as I look at the estimated cost of 
Environmental Management and the third paragraph from your 
testimony today, it says we still have between $193 billion and 
$247 billion to complete. Can you give me a projection of how 
many years that is going to take and what you will be 
recommending over the next 5 years, for instance, to help 
expedite this clean-up?
    Ms. Triay. Our clean-up completion goes through the tank 
farm clean-up of Washington state. In other words, to finish 
the program, we have to finish that clean-up. And right now, we 
are looking on the order of decades.
    Mr. Davis. Decades?
    Ms. Triay. 2040s, essentially, to 2050 for the completion 
of that clean-up. The Secretary of the Department of Energy 
feels strongly. That is why he has promoted and in the 
president's request, we have a request for technology 
development, for investments in the tank farm clean-up that can 
actually reduce the life cycle costs and that period of 
execution.
    About 35 percent of the life cycle costs of the 
Environmental Management program is due to the tank waste 
clean-up. We feel that if we could invest in enhancing the 
strategies that we have in place to deal with tank waste clean-
up, we could reduce the life cycle cost and reduce the period 
of execution.
    So as we move forward, we are going to concentrate on doing 
research and development, or developing technologies with the 
purpose of reducing the life cycle costs and the period of 
execution of the program.
    Mr. Frelinghuysen. Would the gentleman yield?
    Mr. Davis. Yes, I will yield.
    Mr. Frelinghuysen. What technologies do you see out there? 
It comes to mind pump and treat and this and that, but I just 
sort of wondered what you see out there that might be exciting?
    Ms. Triay. Sure. Specifically, in the tank waste clean-up 
area, we will be investing in being able to use techniques such 
as ion exchange or solvent extraction at tank or near tank, in 
order to accelerate the clean-up of the waste ahead of the 
start of facilities like the Salt Waste Processing Facility or 
the Waste Treatment Plant.
    In addition to that, we are going to be investing in making 
sure that we understand the characteristics, the performance of 
waste forms. In addition to borosilicate glass, waste forms 
that also are glass, but can withstand more waste. Waste with 
more chemicals, like the Hanford chemicals, being encapsulated 
in the final waste form. This reduces the life cycle costs and 
reduces the amount of waste that needs to be ultimately 
dispositioned.
    We want to also look into next-generation melters that also 
will allow us to load more waste, more radioactivity into the 
final waste form. We want to look into ways in which we could 
demonstrate that technologies that produce minerals in 
mineralized waste forms at lower temperatures, are just as 
protective of human health and the environment as the standard 
borosilicate glass.
    All of this research and all of these technologies are with 
the express purpose of dealing with the life cycle costs and 
the period of execution. With respect to the groundwater, we 
believe that mercury at Oak Ridge necessitates advanced 
technologies. Some of them not only for the mercury, but for 
other radionuclides, dealing with bioremediation, and with 
electrochemical treatments.
    We think that the ability to predict where the contaminants 
are, so that we can stop them from entering the accessible 
environment, is of the essence. That is why we are also 
investing in an advanced simulation capability for the 
Environmental Management program that works exactly from the 
platform that we have used for defense programs and should be 
done in a very cost-effective manner.
    Mr. Davis. Thanks. So as I listened to that explanation, 
are we waiting on technology to do some of the clean-up areas, 
like mercury in Oak Ridge, or technology to advance to the 
point to where we can adequately do that?
    Ms. Triay. There are times--and mercury is one of those 
examples--where in addition to trying to prevent the mercury 
from further migrating, and in addition to dealing with the 
source of the mercury; we also need technologies to deal with 
the ultimate problem. The areas of contamination are spread 
throughout different environments. There are times in those 
situations where we absolutely need better technologies than 
the ones that we have.
    Mr. Davis. Thanks. I yield back, Mr. Chairman.
    Mr. Pastor. Well, that concludes the hearing. But before I 
close it, the University of Miami is not only known for its 
chemistry department and students that it produces, the 
doctorates, but they are well known for baseball, basketball, 
and football.
    And as I fill out the teams for March Madness, I have a 
problem, because coming from the west, the only question I have 
is to Mr. Geiser is, where does he have Cornell?
    Mr. Geiser. Sir, Cornell is going to go all the way this 
year. [Laughter.]
    That is what my pool says.
    Ms. Triay. I doubt it.
    Mr. Pastor. That concludes the hearing. Thank you very 
much.

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                         Wednesday, March 17, 2010.

 DEPARTMENT OF ENERGY: ENERGY EFFICIENCY AND RENEWABLE ENERGY, FOSSIL 
   ENERGY, ELECTRICITY DELIVERY AND ENERGY RELIABILITY, FY2011 BUDGET

                               WITNESSES

KRISTINA JOHNSON, UNDER SECRETARY OF ENERGY
CATHY ZOI, ASSISTANT SECRETARY FOR ENERGY, RENEWABLE ENERGY
JAMES MARKOWSKY, ASSISTANT SECRETARY FOR FOSSIL ENERGY
PATRICIA A. HOFFMAN, DIRECTOR, ELECTRICITY DELIVERY AND ENERGY 
    RELIABILITY
    Mr. Pastor [presiding]. The hearing will come to order.
    Good morning. The Subcommittee on Energy and Water 
Development meets today to hear testimony on the fiscal year 
2011 budget request for the Department of Energy's applied 
research and development programs in the area of energy 
efficiency, renewable energy, fossil energy, and electricity 
delivery systems.
    America faces persistent challenges to its energy sector 
that continue to threaten our economy, national security, and 
environment. Our economy, from our citizens' cars to our 
military's planes, relies heavily on petroleum fuels, much of 
which is imported from overseas. Power prices have been rising 
for years, and our electricity supplies depend on energy 
sources that give off harmful emissions and are delivered on a 
congested and aging electric power grid.
    Today we consider the budget requests for the applied 
research and development activities at the Department of Energy 
aimed at addressing these difficult challenges.
    We have before us the Under Secretary of Energy, Dr. 
Kristina Johnson, who oversees the Department's applied 
research and development offices. We especially look forward to 
her account of the measures she has taken to break down the 
stovepipe mentality at the Department so that we may have 
better cooperation across the offices and programs.
    We also have before us Assistant Secretary Cathy Zoi, to 
discuss the administration's fiscal 2011 request for energy 
efficiency and renewable energy. Assistant Secretary Zoi will 
discuss the administration's work on technologies that will 
reduce our energy consumption, decrease our dependence on 
petroleum fuels, and provide clean domestic renewable energy. 
Currently, most of our electricity comes from fossil energy 
sources.
    And James Markowsky, Assistant Secretary for Fossil Energy, 
is here to discuss the Department's work on technologies that 
will provide cleaner, low-carbon electricity generation using 
our vast domestic resources of coal and natural gas.
    Finally, Ms. Patricia Hoffman, Acting Secretary of 
Electricity Delivery and Energy Reliability, will address the 
Department's budget request for research and development 
activities that will squeeze more out of our existing resources 
and allow the expansion of clean energy generation by 
modernizing and securing the Nation's electricity transmission 
and distribution system.
    Good morning, and welcome to all of you. I would ask you to 
keep your testimony today to no more than 5 minutes. We have 
your written testimony, and it is entered in the record. After 
the hearing, we may have some questions for you to answer for 
the record.
    And, Secretary Johnson, we ask that you ensure that 
responses and any supporting information requested by the 
subcommittee are delivered in final form no later than 4 weeks 
from today. If members have additional questions, we ask them 
to submit to the subcommittee by 5 p.m. tomorrow.
    With these opening comments, I would like to yield time to 
our Ranking Member for any opening comments that he would like 
to make.
    Mr. Frelinghuysen. Thank you, Mr. Chairman. I also would 
like to welcome all of our panelists here this morning.
    Considering the energy needs in this country today and the 
expected rapid growth in demand, you each hold positions vital 
to meeting these challenges.
    I can't help but recall that during the summer of 2008 when 
we watched the average price of gasoline peak at nearly $4.20, 
for most vehicles back then, large vehicles, it cost over $75 
to fill at the pump. Household and Federal budgets exploded. At 
that time, I hoped we had been shocked enough to now be on a 
sustained path towards energy independence.
    Today, gas prices average about $2.80 per gallon. In my 
view, any suggestion that these prices have normalized would be 
indicative of the larger problem that we must be sure to avoid, 
and that is complacency. I believe we are at a defining moment: 
A comprehensive, strategic approach towards increasing energy 
independence must remain a top national priority.
    Whether it is wind, solar or hydropower, energy-efficient 
retrofits for homes, businesses and buildings, plug-in electric 
vehicles, innovative carbon capture technologies, nuclear 
energy, or transmission reliability, we must embrace all of the 
inclusive solutions. Energy independence is not only 
fundamental to a healthy economy, it also truly is a national 
security issue. The Department of Energy should be, as they 
say, at the tip of the spear. I am sure we would all agree with 
that, but we can't neglect the fact that we are slowly 
recovering from a near economic collapse.
    Mr. Chairman, I don't question the government's role 
investing these important programs, but I must express my 
desire to see this administration exercise some level of fiscal 
restraint.
    We simply cannot discount what was provided as emergency 
spending in the stimulus, Mr. Chairman. That historic piece of 
legislation provided the Department of Energy approximately $37 
billion, 28 percent more than what is being requested by this 
budget for the entire Department.
    For the three programs before us today, the stimulus 
provided $25 billion; yet nearly 96 percent of these funds have 
not been spent since the act was signed over 13 months ago. 
Additionally, the $3.1 billion request before us would increase 
these programs by nearly $500 million since the start of this 
administration.
    I do recognize changing priorities, Mr. Chairman, but no 
matter how you look at it, this is an enormous sum of money to 
pump into these programs in a span of just 2 years, and, I may 
say, a good portion of that being borrowed.
    As we consider this request, we must be mindful that just 
as energy security is a matter of national security, so too are 
exploding budget deficits and an insurmountable national debt. 
If we don't address that issue, we can have some pretty 
catastrophic financial consequences.
    With that said, Mr. Chairman, I am very pleased to have a 
very well-educated panel before us. I didn't look over the 
resumes. I am sure that they will serve the administration 
well--and have been, and will serve the Nation well. And so 
welcome. Thank you.
    Mr. Pastor. Secretary Johnson.
    Ms. Johnson. Thank you very much.
    Mr. Chairman, Ranking Member Frelinghuysen, members of the 
committee, thank you for the opportunity for us to appear 
before you today to discuss the President's fiscal year 2011 
budget request.
    Secretary Chu calls the clean energy economy the industrial 
revolution of our time. And while reducing our dependence on 
imported oil, jump-starting our economy, and reducing 
greenhouse gas emissions present enormous challenges, we see 
these challenges as opportunities; the opportunity to help get 
America back to work, the opportunity to rebuild our 
manufacturing base, and the opportunity to leave our children 
the legacy of a robust economy, a clean environment, and a 
secure energy future.
    As an engineer, I believe that solutions to problems 
require elegant design under constraint, and we recognize the 
constraints that we are dealing with. We face constraints in 
time, scale, and cost. The threats to our security, economy, 
and global climate are real, and we must act now. We have 
finite resources, we recognize that, and we must scale the 
benefits of energy savings in a clean energy economy to 
everyone in our country.
    Under these constraints, I am pleased to report how DOE is 
responding to our energy challenge. We are more focused, we are 
more strategic, and we are more innovative in the way we are 
planning our R&D programs.
    In the interest of time, I am going to describe one area 
that illustrates the new DOE, the one that is breaking down the 
silos that have traditionally existed in the Department. And 
then I will briefly highlight the President's 2011 energy 
budget request.
    DOE is focusing resources on use-inspired research and 
development; that is, R&D inspired by big, real-world problems 
that are not amenable to business-as-usual solutions. We are 
coordinating and cooperating across the Department in ways we 
have never done before, and that helps us plan our research to 
minimize duplication and maximize success.
    Let me give you an example. One of the barriers to growing 
a clean energy economy is the integration of renewable energy, 
such as solar and wind power, onto the Nation's grid. This is a 
multifaceted problem. So you might ask, what is the problem? 
Well, the problem is the sun doesn't shine all the time and the 
wind doesn't blow all the time. This intermittency means we 
need to store energy, to use it when we need it, not when we 
have it, which is the situation today.
    The problem is also multiscale. Utilities need energy 
storage at large scales to power cities, and consumers need 
energy on small scales to power cars. We have taken care to 
strategically plan what kind of research is strategic and 
appropriate at each scale. That is why we fund energy storage 
in our core programs in the Office of Science, OE and EERE, and 
in new innovative programs, such as the Energy Frontier 
Research Centers, the Advanced Research Projects Agency for 
Energy and Energy Hubs. Each uses use-inspired research at 
different scales, with different objectives.
    Specifically, the Energy Frontier Centers involve small 
groups of researchers at universities studying fundamental 
properties and structure of energy storage. In the interest of 
time, I won't go through them, but if you would like, I would 
be glad to talk about them during the Q&A.
    Without this understanding, we can't make cheaper, more 
energy-intensive batteries to drive our vehicles 300 miles 
without recharging. So Energy Frontier Centers are about 
fundamental science at universities.
    ARPA-E funds small groups of researchers, mainly in 
industry, working on technology breakthroughs. For example, we 
funded a company that is developing an all-liquid metal battery 
using domestically available materials, which has the 
opportunity to reduce the cost and increase the energy 
intensity by a factor of ten, which allows us to afford 
electric vehicles that go further on a single charge. It is 
game-changing technology that we are after.
    EFRCs are fundamental science, ARPA-E is fundamental 
breakthroughs in technology. Both were funded under the 
Recovery Act, and we are requesting funding in the 2011 budget 
to sustain the momentum created by these two innovative 
programs.
    The third innovative strategy is the Energy Innovation 
Hubs. It is called a hub because it integrates like spokes on a 
wheel the work we are doing in each of the core program offices 
as well as the work in ARPA-E and the Energy Research Centers.
    Hubs are about scale. They involve large, 
multidisciplinary, and highly collaborative teams of scientists 
and engineers working together, from universities, government, 
and industry under one roof. They are looking at fundamental 
science and technology at the scale needed to meet our energy 
challenges.
    The proposed Energy Storage Hub will investigate the 
ultimate limit in storage materials and demonstrate their 
applications: large scale for utilities, and small-scale 
batteries for applications in electric vehicles. This is being 
coordinated across all of DOE by the Energy Storage Working 
Group led by Acting Assistant Secretary Patricia Hoffman.
    Now to the budget highlights. The Office of the Under 
Secretary of Energy includes six major program offices--Energy 
Efficiency and Renewable Energy, Fossil Energy, the Office of 
Electricity Delivery and Energy Reliability, Nuclear Energy, 
Environmental Management and Legacy Management. Each of the 
Assistant Secretaries here will go into detail in those 
programs.
    In the interest of time, I would just like to conclude by 
talking about one crosscutting example in the education space. 
Our country is facing a perfect storm in education. At exactly 
the time that 40 percent of our energy workforce will be of 
retirement age in the next decade, less than 16 percent of our 
high school students can pass a science and math competency 
test, and less than 1 percent excels. Less than 4.4 percent of 
our students entering college go into engineering, and not all 
of them graduate engineering.
    This is exactly the time we need to invest in a program 
like RE-ENERGYSE, or REgaining our ENERGY and Scientific Edge. 
It is this kind of program that I would like to have the 
opportunity at some other time to talk about in more detail. 
But it is critically important to fund the next generation of 
bachelors, masters, doctoral students, as well as curriculum at 
the community college level to train workers for this new clean 
energy economy.
    So let me conclude by saying thank you for the opportunity 
to speak in front of this committee today. I look forward to 
answering any question that you or other members of the 
committee may have.
    Thank you.
    Mr. Pastor. Thank you.
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    Mr. Pastor. Secretary Zoi.
    Ms. Zoi. Good morning, Mr. Chairman, Ranking Member 
Frelinghuysen, and distinguished members of the subcommittee. 
Thank you for the opportunity to appear before you today. I 
will share brief remarks this morning, and I have submitted a 
longer statement for the record.
    I am excited about the clean energy future DOE and Congress 
have worked to create. As you know, vast renewable energy 
deployment and more efficient homes and businesses are 
essential to reaching that future. To that end, our focus in 
EERE is to combine high-impact innovation with the ingenuity 
and skill of the American workforce to tackle our economic, 
environmental, and energy security challenges. Each of these 
challenges is also an opportunity, and we are committed to 
creating clean energy jobs, reducing our reliance on foreign 
sources of energy, and combating climate change.
    The President's fiscal year 2011 budget request of $2.355 
billion for EERE will move the U.S. forward on these fronts. 
Our budget request is approximately $113 million more than our 
fiscal year 2010 appropriation, a 5 percent increase. These 
funds will help us leverage and build upon the $16.8 billion in 
investments EERE has made through the Recovery Act.
    Through this budget, we will continue to demonstrate large-
scale, replicable, renewable generation facilities, including 
concentrated solar power, offshore wind, and biopower projects. 
We will continue to transform the landscape of the Nation's 
transportation systems with new vehicles and new fuels. Our 
vehicles program is assisting manufacturers to ramp-up plug-in 
hybrid battery production to a capacity of a half million units 
per year by 2015.
    We will continue to save taxpayers money and reduce 
greenhouse gas emissions by greening the Federal Government. 
Last October, the President issued an executive order leading 
to a 28 percent reduction target for Federal greenhouse gas 
emissions. EERE will lead collaboration across agencies to 
achieve that target by 2020.
    We will endeavor to make America's manufacturing, 
construction, and other industries the most innovative and 
productive in the world, and we will facilitate building 
retrofits to dramatically reduce energy consumption. A more 
efficient America is a more competitive America. As Dr. Johnson 
mentioned, RE-ENERGYSE will support education and training for 
Americans to develop the skills needed by employers in the 
clean energy economy.
    With the support of this subcommittee and this Congress, we 
can accomplish all of these goals and more. In order to meet 
those goals, though, we need a larger EERE team. Simply put, 
EERE staffing has not kept pace with our budget. From fiscal 
year 2006 to fiscal year 2010, EERE experienced a 93 percent 
budget increase, from $1.2 billion to $2.2 billion, while 
staffing only increased by 19 percent.
    Increased funding for program direction is critical to 
effectively carrying out our mission on behalf of the 
taxpayers. As you know, our annual appropriations are only a 
part of the story. Tax credits, loan guarantees, rebates, and 
other mechanisms play a large role in the growth of clean 
energy production and smart energy use.
    Mr. Chairman, and Members of Congress, I appreciate your 
leadership in providing the resources we need to accomplish our 
shared goal of a clean energy economy, and I would be pleased 
to respond to questions.
    Mr. Pastor. Thank you very much.
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    Mr. Pastor. Dr. Markowsky.
    Mr. Markowsky. Mr. Chairman and members of the committee, 
it is my pleasure to appear before you today to present the 
Office of Fossil Energy's proposed budget for fiscal year 2011.
    The Office of Fossil Energy's primary objective is to 
ensure that we can continue to rely on clean, affordable, and 
reliable energy from our traditional fuel sources.
    Fossil fuels are anticipated to play an important role in 
meeting our national energy needs in the future. FE is also 
involved in America's readiness to respond to short-term crude 
oil supply disruptions. The fiscal year 2011 budget request of 
$760.4 million for fossil energy programs will allow us to meet 
those objectives. This is a reduction of about $191 million. It 
breaks down to $586.6 million for fossil research and 
development, $138.9 million for Strategic Petroleum Reserve, 
$11.3 million for the Northeast Home Heating Oil Reserve, and 
$23.6 million for the Naval Petroleum Reserve.
    The central component of our R &D program is our coal 
program. In fiscal year 2011 we are requesting $403.9 million, 
which is essentially equal to the fiscal year 2010. Also, we 
have $3.4 billion for CCS through the Recovery Act, in addition 
to $600 million that we have carried over from our Clean Coal 
Power Initiative.
    In our coal program we have four key objectives: develop 
technologies for globally competitive CO2 capture 
for power plants and industrial sources; establish the basis 
for long-term geological storage and CO2 reuse; 
improve efficiency of both existing and new power-generation 
facilities; and implement computer modeling and simulation to 
accelerate the RD&D pathway from discovery to commercialization 
and cost maturity. Our goal: to develop a spectrum of 
technologies to evolve coal into a low-carbon energy source 
that is economical and competitive in 2020 and beyond.
    We are mainly focusing on coal now--which provides about 
half of all electricity generation, but natural gas is the 
second largest source--it will play an increasing role as a 
backup for intermittent renewables like wind, and also for fuel 
switching. So CCS will be required initially on coal-fired 
facilities and eventually on gas-fired systems as we meet our 
goals of 80 percent CO2 reduction by 2050.
    Required to do this is a range of technologies for 
capturing and storing CO2 in a variety of geological 
formations that also benefit reuse such as enhanced oil 
recovery.
    We are currently pursuing large-scale demonstration of 
first-generation CCS technologies for coal power generation and 
industrial sources. These include postcombustion capture and 
precombustion capture. We envision having eight to ten large-
scale CCS demonstration plants in operation between 2014 and 
2016, but the cost of these first-generation technologies are 
high. To drive down the cost of CCS, we are pursuing R&D to 
increase both the power plant efficiency and develop advanced 
second-generation technology, envisioning a new round of 
advanced CCS demonstrations later in this decade with 
deployment of advanced technologies in a post-2020 time frame. 
These are the second-generation integrated gasification 
combined cycle, which will result in about 5 percentage points 
efficiency advantage over what the current IGCC would capture. 
This will result in about one-third of the cost penalty that we 
currently exhibit in first-generation technologies.
    Also super-critical steam cycle for polarized coal-fired 
plants, an advantage of about 3 percentage points, with a cost 
penalty of only a third of that of the first-generation super-
critical plants.
    Oxycombustion, a new technology having a cost penalty 
approximately a third to a quarter of those of conventional 
polarized coal plants with postcombustion capture.
    Supporting these activities will be advanced computer 
modeling and simulation of energy systems that will reduce the 
time of bench skills to commercialization.
    On the storage side, pursuing carbon sequestration programs 
to establish a sound, scientific, and technical basis for safe, 
long-term geological storage; establish best practices for 
injection and monitoring; help establish technical basis for 
regulatory framework for carbon storage, and thereby help 
ensure public acceptance, which is the critical aspect.
    For fiscal year 2011, we are requesting $143 million, a 
reduction of about $11 million in these activities, but it does 
not affect our storage activities.
    This is an industry-government partnership. We are working 
with our seven regional carbon sequestration partners to 
address the technical hurdles for carbon storage. It is about a 
40 percent cost share by industry.
    Our regional partnerships are now involved in nine 
CO2 injection sites across the country. For fiscal 
year 2011, several sites will be injecting CO2 for 
large-volume geological storage tests, upwards of a million 
tons per year. Our Cranfield site in Mississippi currently has 
achieved 1.5 million tons injection to date.
    In the end, the net effect of our CCS activities will allow 
for coal to continue to be a competitive part of our Nation's 
diversified low-carbon energy portfolio.
    Changing now to the Strategic Petroleum Reserve which 
provides a stockpile of petroleum to protect the U.S. against 
disruptions of our critical oil supply. In fiscal year 2011, we 
are requesting $138.9 million, which is a decrease of $105 
million. This decrease assumes a one-time reprogramming of $71 
million for cancellation of a 1 million barrel expansion of the 
facility. So that $138.9 and the $71 will fund the $209.9 
million required for the operation and maintenance of our SPR 
facilities. The other $34 million reduction is due to the 
cavern that we are purchasing this year for refurbishment in 
the coming year.
    SPR is currently filled to capacity; 727 million barrels 
currently providing 75 days of U.S. petroleum for protection. 
Also in 2011, we are pursuing the cavern replacement project at 
Bayou Choctaw.
    Changing now to the Northeast Home Heating Oil Reserve. In 
fiscal year 2011, we are requesting $11.3 for that. And also in 
our Natural Gas Program, we are requesting no funding. On 
methane hydrates we will be continuing to cooperate with the 
Office of Science.
    In conclusion, Mr. Chairman, we look forward to working 
with this committee on trying to achieve our objectives here. I 
would be happy to answer any questions you have. Thank you.
    Mr. Pastor. Thank you very much.
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    Mr. Pastor. Secretary Hoffman.
    Ms. Hoffman. Thank you, Mr. Chairman and members of the 
committee. Thank you for the opportunity to appear before you 
today to discuss the President's fiscal year 2011 budget 
request for the Office of Electricity Delivery and Energy 
Reliability, a core component to achieving our goal of building 
a low-carbon economy and securing the Nation's energy future. 
As was noted, we also had to squeeze more out of the system 
that we have today in enabling that future.
    The Recovery Act provided $4.5 billion in the Office of 
Electricity to support strategic investments in a stronger, 
smarter, more efficient electric infrastructure. The Recovery 
Act has provided an unprecedented infusion of funds that will 
enable us to jump-start the modernization of our Nation's 
electrical grid through increased deployment of smart grid 
technologies.
    Our fiscal year 2011 request continues these modernization 
efforts by supporting development of next-generation 
technologies. The President's 2011 request is $185.9 million, 
which is an 8 percent increase from the 2010 request, and 
reflects a commitment in energy research and development, 
transitioning to a clean energy economy.
    Specifically, $144.3 million will fund research and 
development activities, while $6.4 million will continue to 
support permitting, siting and analysis work that is critical 
to advancing the development of a modern grid, and $6.2 million 
will allow us to enhance the reliability, resiliency, and 
security of our Nation's critical infrastructure and facilitate 
recovery from energy supply disruptions. The remaining $29 
million will provide the Executive Management Program oversight 
and information required for the effective implementation of 
these activities.
    Highlights of our 2011 request include $40 million for 
energy storage, which represents a $26 million increase from 
fiscal year 2010. This increase will support expanded efforts 
to enable successful integration of renewables into the grid. 
Large-scale megawatt-level energy storage systems or multiple 
smaller-scale distributed storage systems have the potential to 
significantly reduce transmission system congestion, manage 
peak loads, increasing the overall reliability of the electric 
grid.
    The 2011 request also highlights $10 million for advanced 
grid modeling research which will enable the Department to 
partner with universities and industry, focusing on applying 
new scientific insights into the electric system--for 
improvements in grid operations--including modeling of resource 
generation, energy markets and electricity flow.
    Ten million dollars is also included to support power 
electronics that play a pivotal role in improving the 
reliability, security, and flexibility of the grid. Research 
efforts will include the development of advanced semiconductive 
materials and devices for faster switching and power conversion 
in order to reduce energy disruptions and decrease power costs. 
This work will focus on wideband semiconductors, advancing 
promising new materials towards commercialization, working with 
new universities, material producers, and device manufacturers.
    Enhanced cybersecurity to protect against the exploitation 
of high-risk vulnerabilities in the electrical system is 
critical to the development of a reliable, resilient, and 
secure monitoring grid. The fiscal year 2011 request allocates 
$30 million for cybersecurity to continue initiatives that 
reduce potential disruptions by cyber attacks.
    This concludes my statement, Mr. Chairman. I look forward 
to answering any questions that you may have.
    Mr. Pastor. Thank you very much.
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    Mr. Pastor. Due to the four people on the panel and the 
interest we have with the attendance, we will adhere to the 5 
minutes--that is in asking the question and getting the 
response--so we can have everybody participate. There are many 
questions to be asked and answered, so I will start very 
quickly.
    Recovery Act. Since your programs received a large amount 
of money as compared to your usual annual budget, there is 
concern in two areas that I would like for you to highlight.
    One is oversight. What have you done to ensure oversight, 
that these programs are being used as they should be, and to 
minimize fraud, abuse, et cetera?
    And then, second, the benefit of these projects in terms 
of, to date, what jobs have been created? And then what do you 
see happening in the future as we transform our economy?
    Ms. Johnson. Thank you, Mr. Chairman.
    I would like to respond and then turn it over to the 
Assistant Secretaries to add further information as required or 
requested by the committee.
    Let me just start out by saying our budget for fiscal year 
2011 request is $10.45 billion, a 1.7% decrease over the $10.6 
billion from FY 2010. To put that into context, the Recovery 
Act, as you noted earlier, is $36.7 billion. Of that, we have 
obligated $25.9 billion, we have contracted nearly $10 billion, 
and we have reimbursed $2.8 billion. So the government doesn't 
pay until the work gets done, completed, and we get billed.
    So let me take the benefit first. In terms of jobs, the 
Federal Reporting Government Web site shows 16,000 jobs for the 
quarter ending December 2009; another 4,000 jobs reported by 
contractors; and 12,633 self-reported jobs from the 1603 Grants 
in lieu of Tax Credits. So at the moment we have about 32,000 
jobs created just in the quarter ending with December of 2009.
    Many more benefits I could go into, but I am mindful of the 
time. Let me get to the oversight because I understand that 
that is a concern, and I would like to address that.
    We recognize that this was a huge budget increase, and 
therefore we brought in the inspector general earlier. They put 
out a document in March 2009. We are looking at doing 
preventive audits early in order to highlight areas where we 
are vulnerable.
    So with regard to waste, fraud and abuse, we have visited 
16 of the high-risk States before deploying funds. For each 
program in the weatherization, SEP and the EECBG, we have 
account officers that are providing oversight. They are 
executing site visits on a quarterly basis as opposed to every 
2 years, which was done in the past.
    On the competitive grant side, the Assistant Secretaries, 
Matt Rogers who is head of the Recovery Act, and myself, 
reviewed the credentials of every single reviewer that helped 
us make decisions on those grants, and we received a full and 
detailed briefing on every single selection.
    The oversight, I believe, has been unprecedented and we are 
going to continue and follow up to limit the fraud, abuse and 
waste in the program.
    Mr. Pastor. Secretary Zoi.
    Ms. Zoi. If I might, just because I think it is a good 
scene setter for other questions, I can give you a stock take 
or an update on what is happening with the Weatherization 
Assistance Program, which is a $5 billion program, and the 
State Energy Program, because I think it is illustrative.
    The Recovery Act didn't double the weatherization program 
or triple it. It increased twenty-five times, so this is an of 
exercise of enormous scale. And we also had Davis-Bacon 
provisions to deal with.
    What we have been able to do in the last quarter of last 
year was triple the number of homes weatherized. In order to 
get to the Administration's target of 600,000 low-income 
people's homes being weatherized, we have to get to a rate of 
about 20,000 to 30,000 a month, depending on the dollars spent 
per home. In February, we estimate we were somewhere between 
16,000 and 18,000. So we think that we have turned a corner. 
Every single State and every single community action agency has 
known production targets for how many low-income people's homes 
they need to get in there and retrofit, and we have made 
enormous progress.
    The months in the summer and the fall were spent training 
new people, hiring new people, building new infrastructure, and 
acquiring new infrastructure. We are now out in the field 
delivering the benefits that the program was designed to 
deliver. So that is actually a very good story now.
    The State Energy Program is a $3.2 billion formula grant 
program where every State and territory is getting financial 
assistance to create clean energy initiatives. We are now at a 
point where 30 percent of that money is under contract at the 
State level. It has all been obligated to the States. The 
process is the States then do competitions and solicitations on 
their own to identify how that money can be spent well and 
wisely. Thirty percent of it is now under contract.
    What you don't see in the costing numbers is that--the 
money won't show up in costed accounts unless those invoices 
come into the State level, and then the States then ask us to 
pay them back. So inherently there is going to be a lag time 
with the amount of money that is spent, but jobs have already 
been created and they are out there in the marketplace.
    Mr. Pastor. Thank you.
    Mr. Frelinghuysen.
    Mr. Frelinghuysen. Well, let's talk about the jobs. What 
kind of jobs are they? How many are private sector jobs and how 
many of them are government jobs? I guess most of the State 
energy money is out there, it has been obligated, but very 
little of it has been spent; is that right?
    Ms. Zoi. Right. But a third of it now, roughly, is under 
contract, which means that there are private sector entities 
that are doing work retrofitting libraries or public buildings, 
and so that work is underway. So that is probably going to be a 
combination. It is probably going to be mostly private sector 
companies that are doing these jobs.
    Mr. Frelinghuysen. So how many people are the States hiring 
to run these programs?
    Ms. Zoi. For the programs in EERE, about 10,500 jobs have 
been created so far.
    Mr. Frelinghuysen. I would like to get the distinction 
between private sector jobs and government jobs. I mean, I know 
there was a goal in the overall stimulus bill for 600,000 
public sector jobs. I don't want to beat up on the public 
sector, but in reality most of our constituents are interested, 
actually, in what the stimulus is doing to sort of promote 
private sector jobs.
    Ms. Johnson. Understood. Let me comment on that.
    Mr. Frelinghuysen. Having served in the State legislature, 
at least in my State, I am not against hiring a whole pile of 
people in New Jersey. But in reality, I think most people would 
like to sort of get a piece of the action in the private 
sector.
    And I have to say that, just from personal experience, the 
people who do the type of work in my State, I mean, it is a 
little above mom and pop. Many of these groups have no track 
record at all with dealing with these types of financial 
obligations, for which a lot of money has been put out there. 
Even your IG has raised some prospects about--I hate that term 
``waste, fraud and abuse,'' but some of what we are talking 
about here is overwhelming amounts of money being given to, 
shall we say, community groups that have a pretty miserable 
track record. So how would you judge where this money is going 
and how many private sector jobs are connected to it?
    Ms. Johnson. Let me address the private versus public. And 
we also will get back to you for the record if our response is 
not complete for your satisfaction, and then I will turn it 
back over to Assistant Secretary Zoi for addressing the 
community action agencies.
    So of the 16,300 FTEs that are reported on the Federal 
Reporting.gov, the large majority of those are private sector. 
Four thousand created are subcontracts, definitely private 
sector. And the 12,633 self-reporting from the 1603 Grants in 
Lieu of Tax Credits for the clean energy economy, are private 
sector.
    And of those, if I may just clarify, that is approximately 
30,000 new jobs or jobs saved for the quarter. We will see more 
jobs created as we finish the obligation of the grants in the 
fossil areas, as well as the smart grid investment grant. And 
we anticipate being able to fulfill our commitment to 600,000 
jobs generated with the $36.7 billion that we have been given 
responsibility for.
    Mr. Frelinghuysen. Part of our concern--at least I will 
voice my concern--is that we gin up all these operations, give 
them a considerable amount of money and responsibility--and I 
am sure that you will make sure that they will account for 
every damn penny that they get. Then when the stimulus money 
runs out--and at the rate it has been obligated in terms of 
outlays, at some point in time a lot of what you have ginned up 
is going to have to--what is going to happen after that? What 
is plan B?
    Ms. Johnson. So in response to that, a couple of things. We 
have invested $4.5 billion in small businesses. As you know, in 
the last 20 years, 94 percent of the new jobs in this country 
have been created by small businesses. Some of those small 
businesses have the opportunity and have demonstrated the 
potential to do what I call job amplification. Let me give you 
an example. A123 Batteries in Massachusetts, they started out 
in 2001 with an SBIR grant of $150,000.
    Mr. Frelinghuysen. Are these fuel cell?
    Ms. Johnson. Electric batteries. They grew to 1,700 
employees, went public, brought off the sidelines a half a 
billion dollars in private investment. These are the kind of 
opportunities that we are investing in.
    Mr. Frelinghuysen. I know we are part of the overall 
financial equation, but when we withdraw this largesse, there 
is obviously going to be some economic reaction.
    Ms. Johnson. You bet. And in response to that, I will turn 
it over to Assistant Secretary Cathy Zoi to talk about why 
there is an increase in our weatherization base program of 
fiscal year 2011, because we recognize what you are saying. We 
want to keep the momentum going and continue to accelerate the 
opportunities for the community action agencies that have had 
to scale up.
    I have visited North Carolina, I have visited Texas, I have 
gone to Seattle and Indianapolis. I have talked to people in 
the areas where we are training and monitoring, and working to 
develop the capability in the community action agencies at the 
State level, in order to accelerate our ability to retrofit and 
weatherize homes. But Cathy, maybe you would like to add 
something to that.
    Mr. Pastor. I will let you take 1 minute.
    Ms. Zoi. Just going back to the President's and the 
administration's objectives, what we are trying to do is 
catalyze a clean energy transformation and invest in the 
economy in ways that we can receive a great deal of leverage 
and stand up whole sectors. So, for example, in the 
weatherization front, the same workers that are being hired to 
weatherize low-income homes have now been trained to be able to 
retrofit a middle-class home. It is not that different from a 
retrofit for a low-income home. It may not be grand and 
glorious. It is insulation, it is weather stripping, it is 
caulking, it is fixing the furnace.
    To the extent to which those are community action agencies 
versus contractors, some of the specialization of fixing 
furnaces is a private sector contractor that comes in through 
those CAAs. So we are quite mindful of investing in a sector, 
being able to stand it up, and then being able to transform so 
that over the next 5, 10 years, virtually every home in America 
gets a tune-up. And we will have the workforce that has now 
been trained to be able to do that.
    Mr. Pastor. Okay. Mr. Israel.
    Mr. Israel. Thank you, Mr. Chairman.
    Secretary Zoi, I appreciated what you said about catalyzing 
a clean energy transformation, and I very much enjoy the 
partnership that I have with you and your colleagues to that 
end.
    Thirty years ago, Jimmy Carter wrapped himself in a 
cardigan sweater and declared the moral equivalent of war on 
our dependence on foreign oil. And in the 30 years since then 
we have done two things: We have doubled our imports of oil 
from the Middle East, and we have slashed Federal investments 
in research and development for renewable technologies and 
energy efficiency by 87 percent. And there is a correlation 
between those two things.
    I was in Silicon Valley at the end of January on a clean 
tech tour. And on the front page of the New York Times was a 
story: China Now Ahead of the U.S. in Clean Technology. So this 
is not just a matter of national security and environmentalism, 
it is a matter of our competitiveness in a global economy.
    I think we are getting it right on a top-down investment. 
We have gone from slashing investments in research and 
development for renewable and energy efficiency, to going on 
the upswing sizably, and that is great. But where I still think 
we need work is the bottom-to-top investment, is making it 
easier for a homeowner or a commercial property owner to get a 
return on investment. Those are the three words that have been 
missing from this equation, ``return on investment.''
    You are doing several things, the Department of Energy is 
doing several things in order to accelerate the return on 
investment so somebody can afford to put solar panels on a roof 
or swap-out energy-inefficient windows. One of the things that 
I have been clamoring for is PACE bonds, Property Assessed 
Clean Energy bonds, where anybody could have their local 
government finance those improvements, pay it back through a 
marginal increase in property taxes, and experience an 
immediate reduction.
    I am concerned, however, that the Department doesn't seem 
to be embracing the notion that you should be using your loan 
guarantee authority to guarantee the local government bondings 
of energy efficiency financing.
    I would like you to comment on that. Why shouldn't the 
Department of Energy immediately use its loan guarantee 
authority to help create this financing? I think that would be 
catalytic.
    Two other quick questions.
    The Vice President's Office announced a $454 million Energy 
Efficiency Conservation Block Grant that would in fact create 
demonstration projects for local financing of retrofits. I am 
curious as to when that is actually going to be announced.
    And finally, what other plans do you have to catalyze, 
incentivize retrofits, and otherwise empower homeowners and 
large commercial property owners to engage in the kinds of 
retrofits that will transform the energy markets?
    Ms. Johnson. There are some great programs that we have 
envisioned, including the retrofit. I am going to turn it over 
to Assistant Secretary Zoi to comment on those.
    Ms. Zoi. Thank you, Congressman Israel. You referenced what 
I call retrofit ramp-up, the competitive EECBG program. That is 
the $454 million program that the Vice President announced. The 
solicitations are under final review, and we should be able to 
make announcements on those projects very shortly.
    The great thing about that particular process is that we 
explicitly asked for leveraging. So what we got in a variety of 
proposals was very, very creative financing so that the sector 
would be able to stand up after the initial capital injection 
of money, and so that homeowners would be able to do either 
PACE loans or utility loans for the financing. There are a 
variety of measures that basically eliminate that first-cost 
disease and give consumers greater savings and allow them to 
access the retrofits.
    We are also, as you may be aware----
    Mr. Pastor. So very shortly, meaning into the month, into 
the quarter, into the year? Can you just give us a sense?
    Ms. Zoi. Weeks, not months; but it could be like more than 
4 weeks.
    Mr. Israel. Is it safe to say a month?
    Ms. Zoi. Yes. But making those precise decisions is above 
my pay grade. They are going to be a bunch of really exciting 
projects. Again, the design is to have them be replicable and 
have the whole Nation be able to access this.
    In addition, as a complementary opportunity, the President 
has gotten behind the Home Star program, which would be a 
national point of sale rebate program so that every householder 
in America could go to the hardware store and essentially get a 
nice rebate for energy efficiency products that are going to 
save them money in their homes.
    The design of the program, the structure, is to basically 
take advantage of the private sector players who know how to do 
this, and who have been doing it for a long time; to take 
advantage of the fact that there are a couple million 
unemployed construction workers who would like to pivot and be 
able to put insulation in people's attics; and to take 
advantage of the fact that 80 percent of Americans have either 
uninsulated or under-insulated homes. We have a win-win-win 
opportunity. But to stand up a permanent retrofit sector so 
that over the next decade or so, everybody in America gets a 
retrofit is worth pursuing.
    Mr. Israel. And what do we need to do in order to engage 
the Department in a serious discussion of using your loan 
guarantee authority to guarantee local financing?
    Ms. Johnson. That is a great question. Let me just say the 
1703 and the 1705 loan guarantee program has been focused on 
creating jobs at scale in the clean energy sector, either 
through manufacturing or producing clean energy. So we are 
asking in the fiscal year 2011 budget for a $500 million 
increase, additional funding for credit subsidies for 1703 to 
get them going. We have been focusing on job generation with 
the Recovery Act. I would be glad to take that back to our loan 
guarantee folks for consideration.
    Mr. Israel. Thank you. Thank you, Mr. Chairman.
    Mr. Pastor. Mr. Rehberg.
    Mr. Rehberg. You guys are smart, but please, please, 
please, be sensitive, with all of your intelligence, to a one-
size-fits-all that does not work. Let me give you an example.
    Under the new clean Congress, we are now told what we can 
lease as far as a car. The car I am now required to lease--I 
used to have a Chevy Tahoe, it was safe. My district, is of 
course bigger than Mr. Frelinghuysen's district. I have 147,000 
square miles. It is the distance of Washington, D.C. to 
Chicago. I am allowed to drive the same car as Charlie Rangel 
in downtown New York City. So I am now in an unsafe car that 
actually gets worse gas mileage than the Chevy Tahoe I used to 
drive, but it is on the list that I am allowed to drive, 
because we have this one-size-fits-all attitude in Washington, 
D.C.
    Some of my best friends are engineers, but I would never 
hire them. I do business with them, but I wouldn't employ them, 
because my one friend who has a doctorate in space physics, 
would lose his business within the first week because he 
doesn't have a business attitude. And I just caution you all, 
as you develop these one-size-fits-all proposals or policies, 
that they may not be applicable or appropriate to all of 
America. Please be flexible.
    As I look at the budget, what I am particularly interested 
in is fossil fuels. Because that is Montana, it is our jobs. 
And this administration and, frankly, much of this Congress is 
kind of dumping on clean coal technology, oil and gas 
technologies, some of the new and exciting stuff that is out 
there. And it is not Exxon and it is not Shell that is doing 
it, it is the small, independent producers that are just 
struggling to take advantage of things like the new Bakken 
Formation, which is incredible.
    But without the Department of Energy continuing to 
recognize the place of fossil fuels, until such time as we can 
move into the alternatives, we really are going to hamstring 
America's opportunity for economic recovery.
    And so as I look at this budget, it angers me, the 
reprioritization under the new administration away from the 
traditional fossil fuels which, again, we are going to need a 
bridge; you are going to create a huge chasm if we turn our 
back and expect energy independence in America anytime soon 
using alternatives. And again, I am all for wind and solar and 
geothermal. Montana has a plethora of all of that. We have 
everything but nuclear and offshore drilling.
    So I clearly get the geothermal and solar and wind--we have 
windmills as well in Montana--but we can't place all of our 
attention towards the alternatives at this time. And I 
recognize Mr. Israel's points. We have turned our back--I am 
glad he brought up Jimmy Carter because Jimmy Carter is the one 
who gave us the 55-mile-an-hour speed limit. For God sakes, it 
would take me forever to go anywhere in the District at 55 
miles an hour. It became a joke out there.
    So all I ask of you is a caution about one-size-fits-all 
thinking. And please don't entirely turn our back on the 
traditional fossil fuels, especially the clean coal 
technologies and some of the exciting things that can be done 
with zero emissions research technology and sequestration and 
such.
    And I see Mr. Markowsky would like to comment. We don't 
even need you anymore as an Assistant Secretary because you 
have been zeroed. How do you like it?
    Mr. Markowsky. I think when you take a look at the budget, 
down $191 million, it can be misleading. When you look at the 
coal programs, which is the key thing, that has been 
essentially constant. And then with the advent of the $4 
billion in the ARRA and carryover, we have a tremendous clean 
coal program to demonstrate carbon capture and sequestration.
    Mr. Rehberg. Could I ask you, what percentage are you 
striving for? What do you think would be a success in carbon 
capture? What percent?
    Mr. Markowsky. In terms of renewable?
    Mr. Rehberg. Yes.
    Mr. Markowsky. We are going for 90 percent, sir.
    Mr. Rehberg. I know you are going for 90, but what do you 
think is doable, especially in the short term, because it has 
to be commercially viable, as Mr. Israel said. And if it is 
not, that is why we have a zero emission project going on at 
Montana State.
    Mr. Markowsky. That is exactly right. And the thing right 
now is we are demonstrating first-generation technologies 
because you have got to get those into both the power sector 
and the industrial sector, so those people are aware of what 
kind of technologies they are going to be up against. So they 
are going to have experience with that. However, the first-
generation technologies are going to be a little too costly. 
That is why we are going with what we call second-generation 
technologies that will significantly reduce our costs.
    Now, 90 percent is doable. In first-generation, that is 
what we are doing in most of those facilities. Some of them are 
down just below 90, but the cost is the issue. So, really, what 
we are driving in our program, both the current program and 
what we are envisioning going forward, is to get 90 or more 
percent CO2 capture and make it cost-competitive. 
The way I see cost-competitive is, it has to be cost-
competitive in 2020. And that is going to be natural gas 
combined cycle. The next one will be nuclear and wind. So that 
is how we are targeting our performance. We are looking at 
dispatch curves throughout the country, and we are targeting 
the cost performance based on those. So we are going to be 
there, sir.
    Mr. Pastor. Thank you.
    Mr. Salazar.
    Mr. Salazar. Thank you, Mr. Chairman. And I just want the 
previous speaker to know that I support what he is saying.
    Under Secretary Zoi, I just want to thank you for the 
funding that we got for the final construction funding at 
National Renewable Energy Lab, very important for the State of 
Colorado, very important for the country.
    Secretary Johnson, Congress provided $3.2 billion for the 
Energy Efficiency Conservation Block program in the stimulus. 
Of that, I hear that only 3 percent has actually been spent; 
yet I hear that proponents for this program are pushing for 
billions more. Is the Department considering further funding of 
this program?
    Ms. Johnson. So there is about $11 billion for energy 
efficiency between the weatherization, the State energy 
programs, and the Energy Efficiency Conservation Block Grants. 
Nearly 100 percent has been obligated, and a good percentage 
has been contracted. As Assistant Secretary Zoi said, we are 
maybe somewhere between a third, moving up towards a goal of 75 
percent contracted by the end of this month.
    The amount spent--we don't count as spent until we have 
actually written a check. So the work has got to be contracted, 
completed, and billed to us. And so we expect that that will 
accelerate in the future, of course, since we have so much 
under contract and being obligated.
    So we fully anticipate that the spending or the rate at 
which we are writing checks will increase. That doesn't mean 
that we aren't creating jobs now, that we aren't getting the 
work done now. And as Assistant Secretary Zoi said, we have 
almost tripled the rate at which we are weatherizing homes from 
December until today. And maybe Assistant Secretary Zoi would 
like to further comment.
    Ms. Zoi. Yes. The EECBG that Congressman Salazar refers to 
is a brand new program, and there are 2,300 grantees with whom 
we have been partnering. The projects that are coming in at the 
local level are really exciting. I mean, there are libraries 
that are finally going to become energy-efficient public 
buildings at a local level. LED traffic lights are going to be 
nearly omnipresent at the end of this, which actually saves 
jurisdictions money.
    With respect to having another EECBG, the work will 
actually be ongoing throughout fiscal year 2011. Hence, the 
President has not proposed that we have a new dedicated EECBG 
program in fiscal year 2011, to answer your question.
    Mr. Salazar. Thank you. Under Secretary Johnson, how close 
are we to making a reliable, affordable electric car that can 
be utilized in the cities?
    Ms. Johnson. Due to the opportunities presented to us by 
the Recovery Act, we have invested $2.4 billion in advance 
battery manufacturing for electric vehicles and plug-in hybrid 
vehicles. We have also invested in loan guarantees. We have 
made nine conditional guarantees; we have closed three. And 
those three are with Ford, Tesla and Fisker. Some of those are 
electrical vehicles and plug-in hybrid vehicles we expect to be 
on the road this fall.
    And affordability I think is somewhat of an ambiguous term, 
perhaps; for some people it will be affordable. But we are 
driving through our ARPA-E grants, as I mentioned before, the 
all-liquid metal battery, which will tremendously decrease by 
an order of magnitude one of the biggest costs, which is the 
battery.
    So if I could give you a time frame, I probably should quit 
my job and go invest in those companies, but I think that it is 
coming soon to a dealership near you.
    Thank you for the support and for the opportunity to build 
that industry in this country.
    Mr. Salazar. So do you think we will be able to build a 
$50,000, $40,000 car within the next couple years?
    Ms. Johnson. I think we will see cars in that time frame on 
the market, yes.
    Mr. Salazar. Thank you. Thank you, Mr. Chairman.
    Mr. Pastor. I just want to remind Congressman Salazar that 
it was through your effort that, in the creation of the three 
hubs, we insisted that the lab in Colorado be provided recovery 
money so we could improve the infrastructure. So thank you for 
your insistence on that.
    Mr. Salazar. Thank you, sir.
    Mr. Pastor. Mr. Alexander.
    Mr. Alexander. Thank you, Mr. Chairman.
    Good morning. As I was listening to Congressman Rehberg 
deliver his sermon on one size doesn't fit all, I was thinking 
that there is not another individual that has more authority to 
speak on that subject matter, because since he broke his foot 
last year in a boating accident, he wears two different sized 
boots. And that is a true story.
    Dr. Johnson, President Obama has talked about jobs numerous 
times. During the time of 2002 to 2008, I understand that the 
job growth rate was 9 percent in the natural gas industry. In 
Louisiana alone, according to the Census report, 26 percent job 
increase in that field. So looking at the tax proposals that 
the President is sending out now, how would that help natural 
gas producers? Can you name one of those tax proposals that is 
going to help natural gas production if we are depending so 
much on that, today?
    Ms. Johnson. I will turn this over to Assistant Secretary 
Markowsky for a comment.
    Mr. Markowsky. In natural gas, we are looking at 
exploration to increase that availability. In the past, we 
looked at shale gas and we have researched that. Now we have 
the horizontal fracking that has significantly increased the 
availability of that. We also developed methane from coal bed 
seams. So we did a lot of research. Now we are turning over and 
looking at methane hydrates, which is right off of Louisiana 
there in the Gulf, and we are going to be studying that with 
the Office of Science, because that is tremendous potential. 
What we are going to be exploring is the recovery potential of 
that gas from those hydrates.
    So that is an area that I think is going to be very good in 
terms of developing the economy, jobs, and also a stronger 
energy future.
    Mr. Alexander. Is the President aware that there have been 
several significant finds in natural gas domestically?
    Mr. Markowsky. I can't speak for the President, but I am 
sure he is aware of it, because our production domestically has 
increased, as you recall. In 2004 and 2005, it was going down. 
And once we got into the horizontal drilling in the tight sands 
and also shale, it reversed that.
    Mr. Alexander. So when we talk about clean energy, natural 
gas is going to play a role, you think?
    Mr. Markowsky. I think natural gas has to play a role. When 
you take a look at natural gas, I mean, we are going to have 
energy storage for renewables, but you are going to need 
natural gas to back it up.
    And also the industry, the coal-fired industry, is going to 
be looking somewhat towards natural gas, possibly, to do some 
retrofitting, repowering stations with it. Natural gas has 
expanded in the power generation sector. IC is going to expand 
it in the future. We are even looking at how we can capture 
carbon from natural gas, because we see it is going to be 
prevalent in the future and we need to be able to capture it to 
get the 80 percent reduction that we are striving for in 2050. 
Natural gas is going to play an important role.
    Mr. Alexander. In Louisiana, I know what fracking is, I 
can't tell you exactly how it works, it is a mystery to me. But 
I know we have several environmental groups that are down there 
now. I am beginning to stir a lot of trouble or controversy 
about the fracking process and what it might be doing to our 
groundwater or the environment overall.
    Do we see a lot of concern out there? Are we going to put 
the brakes on with natural gas production because of EPA 
concerns or environmental group concerns?
    Mr. Markowsky. I think we have to get a lot more 
information. It is like anything else, something new. And there 
is a concern about groundwater. It is still not really 
thoroughly developed.
    When you take a look at how much shale gas we are getting, 
it is a small percentage of our total gas right now, but the 
potential is great. So we need to explore that. I don't have an 
opinion on what the impact will be or what the potential 
environmental regulations will be, but we will be researching 
that very carefully so we can maintain that potential for the 
Nation.
    Mr. Alexander. Thank you.
    Mr. Pastor. We have been called and we will have three 
votes. What we are going to try to do is go down the list, 
Ryan, Fattah, Davis and Berry, and give you 5 minutes and then 
we will go vote and conclude the hearing if that is okay with 
you.
    Mr. Ryan. I will try to be brief, Mr. Chairman. Thank you.
    I have a few things I want to mention. One is Mr. 
Markowsky, if you can talk about this a little bit. We have a 
project on the Ohio River, Baard Energy, coal to liquid, loan 
guarantee issues, caught up in lawsuits, and I have got a great 
environmental record, but I get concerned sometimes that some 
frivolous lawsuits just to hold up development of these plants. 
It's about a 3 or $4 billion project on the Ohio River. 
Governor Strickland has been extremely involved in this.
    Ohio EPA has done a great job, but now we are getting it 
held up because of some lawsuits. 3,000 construction jobs, I 
mean, just a boon for a region of the country that really could 
use a shot in the arm. So whether you can answer this now or we 
can talk off-line on it, it is something that Congressman 
Wilson and I are pushing a great deal because of the regional 
impact it would have.
    So I wanted to just mention that to you and see if we can 
get some help from you guys on this issue. And let's talk off-
line because I want to be mindful of the other guys that are 
here.
    The second thing is to kind of answer what Congressman 
Alexander was saying. We used $20 million in stimulus money to 
help do some site prep work that landed the $650 million 
investment from a French company that does the oil and gas 
tubing because we are right on the Marcellus shale formation 
just in eastern Ohio; so the stimulus money is working in so 
many different ways because they could now access this natural 
gas shale and allow us to develop it.
    So the stimulus was development money, but it was used to 
help, I think, the future of clean technologies. So one more 
comment and then a question.
    We have got some old GE light factories in Ohio, and I 
don't know what the environmentals are on the sites because it 
is--they have been there for a long time. And I was wondering 
are there any incentives for companies like GE who are really 
doing the whole spectrum? They did the old technology. They are 
moving into the new technology. So are we creating or have we 
created any incentives for companies like General Electric who 
are running the gamut here to reinvest back into those old 
facilities that are, again, manufacturing, industrial Midwest, 
all the things we are trying to do with the green revolution? 
Are there any incentives there for companies like that?
    Ms. Johnson. Absolutely. The Department of Energy through 
the Recovery Act has been asked to work with Treasury to award 
grants in lieu of tax contracts for exactly that kind of 
opportunity in 1603 and 48C. So we have probably put forth--I 
think we have already given about $4 billion in those kinds of 
grants out already so exactly.
    Mr. Ryan. Do we develop sites?
    Ms. Johnson. That is part of it, yes. And also for our loan 
guarantee, we did a project where we took a factory in Delaware 
and reinvigorated it for plug-in hybrid electric vehicles.
    Ms. Zoi. If I could just add, in addition to 48C, which is 
the advanced energy manufacturing tax credit that Kristina 
referred to, some of the States are providing assistance under 
the State energy programs. I know Michigan is taking old 
factories and transforming them into clean energy facilities as 
well; so they are providing State assistance. So there are a 
number of different vehicles that can be used to get to that 
really noble objective.
    Mr. Ryan. Terrific.
    Lastly, we went to Israel a few years ago. Israel has a 
tremendous incubator system. They had--when the Wall fell, they 
had a lot of Russian Jews who were very, very skilled, talented 
engineers and very creative people. They didn't know what to do 
with them; so they started this incubator system in the mid 
'90s and it is a great public-private partnership. Mr. Israel 
mentioned pace and a lot of things but he was talking about top 
down. I think with the energy revolution, this incubator system 
would be prime for the Department of Energy, probably the 
Department of Defense too. But the Department of Energy, could 
to set up a national incubator system, focused in economically 
distressed areas where we can have all of these folks who are 
in the garage thinking of the next best thing, whether it is 
how to sequester and the equipment needed, or whatever the case 
may be.
    So are there any plans to stand up some kind of national 
energy incubator system that I think could really unleash all 
of the talent that we have in the United States, not just 
locked in the ivory tower?
    Ms. Johnson. You bet. It is a great idea and one of the 
things that we are with looking at and working with the 
Assistant Secretaries that are here, we took the 2.8 percent 
SBIR amount of the Recovery Act research, and we decided let's 
focus on trying to generate jobs in a clean energy economy by 
increasing the criteria for commercialization and job creation 
50 percent for awarding these grants, and it was a special SBIR 
phase one ARRA grant, small business innovative research.
    So we had 970 proposals; we funded 125. Sixty of those will 
go to phase two. In fact, if phase one is $150,000, phase two 
can go up to a million. Now, there is opportunity for a phase 
three grant, which can look at these companies that have one or 
two employees when they start you out, and within 2 years, go 
up to 50 and this amplification I am really excited about this 
opportunity. I would like to talk to you off-line, if I may.
    Mr. Ryan. That would be great. Thank you. Let's hook up.
    Mr. Fattah. I do have a couple questions, but I'd be glad 
to yield to my senior colleague here.
    Mr. Berry. I would like to talk to you about the research 
money and how it is being spent and the absence of it in the 
lower Mississippi Valley, where we have more biomass production 
than the mind can imagine. But the only efforts that are being 
made there, we, in my opinion, have been dissed by the 
Department of Energy, but we have significant efforts, are all 
privately funded or funded by State moneys. And I would love to 
have a discussion with you about that.
    And then I don't know what the situation is with refueling 
stations for natural gas and the production of natural gas 
burning internal combustion engines that we need to be 
replacing some of these diesel engines with, and I would love 
to know about that. You can respond for the record later. I 
know the time is short.
    Ms. Johnson. That would be great. We would be delighted to 
do that on both of those accounts. Thank you, sir.
    Mr. Berry. Thank you.
    Mr. Pastor. Mr. Fattah.
    Mr. Fattah. Thank you, Mr. Chairman.
    And if you would retire, we could probably get some 
research dollars over in that neck of the woods.
    Mr. Pastor. Guess who moves up.
    Mr. Fattah. I wanted to wait my turn. He doesn't have to 
leave on my account.
    Let me get to a couple issues. One is there are two 
programs that I am principally interested in. The energy 
community block grant, you said we got some 2,300 community 
entities, cities, counties that are eligible and they have all 
gotten their allocations. And I am very interested in making 
sure that we expedite as efficiently as possible the outlays of 
those. I have met with a group of mayors on this subject at the 
Speaker's request.
    So we can talk about that, but they are some very exciting 
projects. I think the more we get to get the spotlight on them, 
I think the more energy will be around, and increase the whole 
notion of how to localize this energy revolution.
    The other program that I have been a major proponent of, is 
the nuclear loan guarantee program. I am very happy that the 
administration and the President have moved forward for the 
first time in some 30 years on new nuclear plants. So there are 
a lot of great things going on in the Department. I am very 
pleased with the testimony we have heard today. But I would 
like to know as we go forward on the loan guarantee program on 
the renewable side. You said there were some deal I believe. I 
think you said nine?
    Ms. Johnson. Nine.
    Mr. Berry. Right. I met with a group of smaller 
entrepreneurs who thought that the size of the guarantees were 
too large for them--it really didn't fit their needs. And I 
want to know whether you have experienced that problem and 
whether or not the Department is looking at it or whether we 
need to as a committee look at how--whether we need to 
segregate a portion of the renewable loan guarantee for smaller 
entrepreneurs like some of the people who might be in a 
national incubator. So if you could respond to that.
    Ms. Johnson. Right. I think that it would be great to 
continue some of the activities that we have that have reached 
out to the smaller business owners and the smaller loan 
recipients, more so in the 1603 and 48C manufacturing than, as 
you said, with the larger loans from 1703 and 1705.
    So I think it is a matter of where you draw the line 
between small and large. I would be glad to follow up with you 
off-line and to really understand what the constituents' needs 
are; so that we can go back and make sure we are addressing 
those needs. So I would be delighted for us to follow up with 
you.
    Mr. Fattah. Two other points, then. The ranking member, who 
is my great friend from New Jersey, kind of walked us through 
the extremes here. At first the notion was that the Recovery 
Act wasn't going to accomplish anything. And now we are at the 
point of where it has been doing all this good, what are we go 
going to do when it stops? It shows that the Department has 
moved a great distance in this effort, and it is because of the 
tremendous leadership as demonstrated at the witness table 
today.
    I am also interested in the question of diversity. We had 
the President's National Science Adviser before one of our 
committees and we were talking about the dearth of educational 
efforts by American students of any stripe pursuing terminal 
degrees. And he said that a lot of scientists' efforts are 
developed based on their experiences and if we don't get young 
people from all different kinds of backgrounds pursuing 
terminal degrees, we are going to miss out one on what they 
have to offer. So there's more that we need to do there.
    Mr. Pastor. Answer as quick as possible.
    Ms. Johnson. That is exactly what RE-ENERGYSE is focusing 
on, using energy because everyone is so excited about energy; 
to get the continuum pipeline all the way through our 
elementary, junior high, high schools, all the way into the 
terminal degrees. So I would be glad to talk to you more about 
RE-ENERGYSE offline.
    Mr. Fattah. Thank you.
    Mr. Pastor. Mr. Davis.
    Mr. Davis. First of all, let me say thank you for being 
here today. Obviously when you look at the Department of Energy 
and see the very positive impact on American lives that you 
have it is something that's significant. In the district that I 
represent, the Department of Energy certainly has an impact in 
the research that is going on, in the eastern part that I 
represent, Oakridge, Tennessee; so it has been a delight 
working with this department, obviously when it comes to the 
Oakridge National Lab as well as the facility at Y-12 NSA.
    In 1977, I bought an automobile that got 50 miles to the 
gallon. It was a stick shift. It was a small diesel engine. I 
had three young daughters sitting in the back seat, buckle up, 
and my wife and I would drive that. I traded that to the '81 
model that got less than half that amount. I traded it to a K 
car, which was one of Lee Iacocca's, and it was also four 
speed; the other one was a five speed. We have had the 
technology, I believe, but I am not sure we have had the 
desire, nor have we had the wherewithal in our minds to make 
things happen.
    When I listened that we are going to spend $2 billion on 
battery-operated automobiles, I hope that that is a success, 
but here are a couple of things I want to ask you: I got a 
request--we have Democrat caucuses. T. Boone Pickens, some of 
you folks have heard of him. Back in the 2004 election, many of 
us Democrats didn't care too much for the Swift Boat Veterans 
for Truth being funded by this guy. I am not being harsh about 
it, but he came to speak at our caucus. And I thought I want to 
go to that because when I was a youngster growing up, there was 
this song about that talked about a lady that picked up a snake 
that was cold--you remember that song.
    Mr. Pastor. She is too young.
    Mr. Davis. She's too young. It warms up, it bites her, and 
she dies from it. And she's saying, How could you do this? I 
saved your life. And he said, You knew I was a snake when you 
brought me in here.
    So I wanted to go listen to make sure we weren't going to 
get bit by this guy. The fact is what he presented that day was 
moving closer and closer and farther away from crude oil to the 
use of natural gas for our transportation needs. You are 
spending two point something billion dollars for battery-
operated automobiles. How much are we spending to look at 
research and development for combustion engines run by natural 
gas? Because today I see this basically in warehouses where 
they are using natural gas or propane gas. How much are we 
spending on that?
    And the second thing I want to ask you, in 1975 to 1985, 
this country made a commitment, and much of it in Federal loan 
guarantees to the nuclear industry to build about a hundred 
nuclear reactors. And then Three Mile Island occurred and we 
all assumed that it was Chernobyl. So we just basically backed 
off.
    And many other occurrences happened during that time. But 
we could build 300 nuclear reactors in this country that would 
produce us about another 60 percent of our energy. Including 
the 20 that we have, would be 80 percent, for about $1.2 
trillion. That's a lot of money. We just gave a $700 billion 
bailout to the banks and we just authorized a $788 billion 
American Recovery and Reinvestment Act. It is not a stimulus 
package. It may stimulate the economy, but it is actually a 
Recovery and Reinvestment Act. So I don't like to hear the word 
``stimulus.'' That's not really what it was. $288 billion of 
that was in tax cuts.
    So the question I am asking you is how many dollars are we 
spending on converting as a bridge source to the next 
generation of energy for natural gas--how much are we looking 
at for--as Carter said, coal liquefaction and gasification 
being a part of the mix. Are we spending an equal or a greater 
amount on the known quantities of energy we have today? For 
instance, from 1850 to 1900, there were 6 million windmills 
purchased in this country. In 1880, there were only 9 million 
households, but they were using those specifically for a 
purpose that would not provide continuity and so would not 
produce the economic engine we needed. In the early 1900s, we 
switched to turbines--hydroturbines from steam produced by 
coal. I don't want us to lose sight of what we have today and 
make that cleaner; instead of trying to go to one source or a 
solar source that we need, but produces only a small portion 
and we drive our economy into the ground.
    And then the fourth question if I have got time----
    Mr. Pastor. You don't because we are running out of time. 
We have given you 5 minutes, but maybe you can respond quickly 
and then for the record.
    Ms. Johnson. I will follow up for the record.
    We are looking at a portfolio; so we are investing in 
internal combustion engines. We are looking at more efficient 
internal combustion engines. We believe we can get 25 percent 
more that from that design. We are investing $57 million. We 
are investing half of our 300 million clean cities grants in 
natural gas-propelled vehicles.
    With regard to nuclear energy, we are asking in our fiscal 
year 2011 budget for 36 billion more in loan guarantees. That 
is because we have challenges in the supply chain. We have 
challenges in large-pressure vessels being manufactured in this 
country. We have challenges in our workforce. Which is why $5 
million of RE-ENERGYSE is in nuclear energy.
    So at each level of this particular issue, we are investing 
very strategically. I would be glad to get back to you for the 
record in a very complete summary, but we are pretty excited.
    Mr. Davis. Thanks. And with all the money you have left 
over for the projects that were not shovel ready, can we look 
at some of those as possibly using those?
    Mr. Pastor. Secretary Johnson, I want to thank you and your 
colleagues. And this concludes the hearing. There will be 
questions on the record.
    Ms. Johnson. Thank you, sir.

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                                          Thursday, March 18, 2010.

           DEPARTMENT OF ENERGY--SCIENCE, ARPA-E 2011 BUDGET

                               WITNESSES

STEVEN KOONIN, UNDER SECRETARY FOR SCIENCE, UNITED STATES DEPARTMENT OF 
    ENERGY
WILLIAM BRINKMAN, DIRECTOR, OFFICE OF SCIENCE, UNITED STATES DEPARTMENT 
    OF ENERGY
ARUN MAJUMDAR, DIRECTOR, ADVANCED RESEARCH PROJECTS AGENCY-ENERGY, 
    (ARPA-E) UNITED STATES DEPARTMENT OF ENERGY
    Mr. Pastor. Hearing will be in order. Good morning, today 
we are going to hear from the Office of Science and ARPA-E 
within the Department of Energy. We have before us today Dr. 
Steven Koonin, Under Secretary for Science; Dr. William 
Brinkman, good morning, Director of the Office of Science and 
Dr. Arun Majumdar, Director of ARPA-E.
    The budget request for science is $5.1 billion, a 4.4 
percent increase from the present appropriation of $4.9 
billion. While America's science arguably continues to be the 
best in the world, our margin of leadership is neither as wide 
nor as clear-cut as it has been in the past. The Secretary of 
Energy, Dr. Chu, has said he regards his two principal 
challenges to be energy independence and climate change. In the 
long term, the answer to both these questions starts with the 
Office of Science.
    While this committee has been supportive of the Office of 
Science and ARPA-E, we continue to have concerns regarding the 
redundancy and interaction of several recent organizational 
initiatives, the energy innovation hubs, ARPA-E and the Energy 
Frontier Research Centers. While ARPA-E has received early and 
positive reviews, the justification in part was that these 
models were necessary because of the administration's 
perception that the Department's existing programs were not 
sufficiently effective agents of transformational or disruptive 
technological advances. We therefore turn our attention not 
only to ARPA-E's performance, but to tuning the performance of 
the existing science programs and labs.
    We also support strengthening America's leadership in 
science and advancing energy innovations. However in doing so 
we must ensure that we eliminate redundancy in order to 
maximize the scientific and technological advances within these 
tight fiscal constraints. We are interested particularly in the 
timing of each of the major group programs to ensure that we 
are proceeding in deliberate and thoughtful manners.
    The three of you, I ask you to ensure that the hearing 
record, questions for the record and any supporting information 
requested by the subcommittee are delivered in final form to 
the subcommittee no later than 4 weeks from the time you 
receive them. Members who have additional questions for the 
record, we will have until the close of business tomorrow and 
please provide them to the subcommittee office.
    Your testimony is in the record.
    With those opening comments, I would like to yield to my 
ranking member.
    Mr. Frelinghuysen. Good morning, gentlemen, thank you for 
being with us. I guess this is your first appearance before our 
committee, and I join the chairman in welcoming you here.
    The administration's budget request for sciences is $5.1 
billion, a 4.4 increase over last year. For ARPA-E, the 
administration is including its first request for regular 
appropriations. To date, this program has only been funded 
through the Stimulus Act. Mr. Majumdar, I hope you will be able 
to tell us today what successes you have had and why we should 
consider this program for scarce appropriated dollars.
    Gentlemen, I made it repeatedly clear that I and my 
constituents are alarmed by the growing deficit and the ongoing 
economic problems. I don't feel that simply expanding the 
government bureaucracy is going to spend us out of our 
situation, and your programs received nearly $2 billion in 
Stimulus Act funds.
    It looks as if this may be our only opportunity this year 
to consider the expenditure of Stimulus Act funds in an open 
forum. I hope you will be able to explain to us why your 
programs were of good use, of those funds given by Congress and 
how they indeed stimulated job creation.
    Mr. Brinkman, I think you know, while I haven't made 
acquaintance with you, I understand you are a former New Jersey 
resident, so I suspect that at some time I may have represented 
you. I have been a strong supporter of basic science programs. 
And in my backyard, not immediate backyard, is the Princeton 
Plasma Physics Laboratory, and they do some remarkable work 
there and that is matched by other DOE labs around the country. 
So I look forward to forging a good strong relationship with 
you in particular.
    However, the administration has put us into a bind again 
this year by cutting its request for critical water programs. 
That is the other part of this committee's agenda, the Army 
Corps budget. I have been hearing all week from my 
constituents, who have been hard hit by the recent flooding. So 
to put a more human face on it, we have sort of a battle for 
pretty precious resources here and some natural disasters, of 
course, can change that equation overnight.
    One of the greatest challenges your program had and will 
likely continue to have is to clearly articulate to us and to 
the American people why it is important that we spend billions 
of dollars on your programs. I think we who serve on this 
committee, we know that, but I think sometimes the general 
population is unaware of what you do, and I think part of the 
job, our job and your job is to sort of explain what we are 
doing, why these investments are important and ala the front 
page of The New York Times today, why in a very competitive 
world environment we need to match, at least match, what our 
foreign competitors are doing.
    You will need to show us why we should pay for basic 
research that will often not show results for decades when that 
money could be easily used to help protect our communities 
against flooding and other disasters or dredge our harbors or 
repair our roads. I am not saying this as a criticism, but as a 
reminder that budget pressures are very strong and we will need 
to find ways to communicate with those who may not understand 
all of what you do.
    As a committee, we are also looking forward to learning 
more about our, I guess, the DOE's equivalent of DARPA, ARPA-E 
and we look forward to hearing your testimony.
    Obviously, the administration's request is a strong vote of 
confidence in your program. I hope you will be able to show us 
how it is warranted.
    Again, Mr. Chairman, thank you very much for the time, and 
we welcome our guests.
    Mr. Pastor. Mr. Under Secretary.
    Mr. Koonin. Mr. Chairman, Mr. Frelinghuysen and members of 
the committee, thank you for asking me to provide an overview 
of the President's fiscal 2011 budget request for the 
Department of Energy's Office of Science. The DOE today is 
called upon to help address many of the greatest challenges 
facing our Nation, transitioning to an efficient, clean and 
reliable energy system, ensuring nuclear security even as we 
reduce our stockpile and enhancing economic competitiveness in 
an increasingly complicated world.
    Let me assure you that the Department's formidable assets 
are being focused on these goals, and I will give you a good 
example in a moment. But as we work on these pressing societal 
problems, it is also important to sustain the Department's 
discovery activities and the wonder that they engender. Even 
with all we know about the world, there are so many unanswered 
questions.
    What of the dark matter in energy that make up 95 percent 
of the universe? How do complex molecules work together to make 
life, and what amazing materials remain to be discovered or 
designed? Questions like these inspire our young people to 
become tomorrow's scientists and engineers, and the 
technologies developed to answer such questions, as well as the 
answers themselves, better equip us to deal with worldly 
challenges. Such spin-offs from discovery research have 
happened regularly for centuries, and there is every reason to 
expect that they will continue, if not accelerate, in the 
future.
    Before I turn to budget specifics, I would like to spend a 
moment on my role in the Department. I am the first full-time 
Under Secretary for Science, a position with two aspects. The 
broader one is to act as a Department-wide chief research 
officer, identifying synergies and gaps in our research 
programs, looking after the health of our national laboratory 
activities, and ensuring that sound science and technology 
underpin everything the Department does.
    The more focused aspect of my role is to take the directory 
port of Dr. Brinkman and backstop him in managing the Office of 
Science, setting its strategic directions, helping resolve some 
of the more difficult operational problems and ensuring its 
connectivity within and outside the Department.
    Director Brinkman and I, with Secretary Chu's support and 
encouragement, are bringing Office of Science activities to 
bear more effectively on societal challenges, enhancing the 
impact and the relevance of our science even as we preserve our 
discovery base.
    Much, but not all of our work must be inspired, if not 
informed, by opportunities for application. And conversely, 
DOE's energy technology programs must better capitalize on what 
science can offer.
    We are therefore working together with Under Secretary 
Johnson to better couple programs and basic energy sciences, 
biological and environmental research and advanced scientific 
computing research with technology efforts, for workshops and 
joint programs.
    Among the broader community, we are bringing together new 
and traditionally disjointed players through mechanisms like 
the Energy Research Frontier Centers, the hubs and ARPA-E.
    DOE's NNSA also is a part of this effort. Working with 
Administrator D'Agostino, we are bringing the best of open 
science, content and practices, to nuclear security matters and 
conversely bringing some exciting NNSA capabilities to the open 
programs.
    A variety of new or newly emphasized activities across the 
Department realized this strategy of unification and focus. I 
would like to highlight some of the more applied efforts 
contained within the Office of Science budget request. Dr. 
Brinkman's remarks will describe some of our office discovery 
activities.
    The first of these is energy system simulation. Fifteen 
years of work in NNSA stockpile stewardship program has created 
an unprecedented and unique capability to integrate high 
performance computing, laboratory experiments and integral test 
data to better understand the nuclear stockpile.
    At the same time, the Office of Science's ASCR program has 
advanced scientific hardware and software for more than a 
decade, and it is now time to apply these methods and 
experience to understand and optimize energy systems, improving 
designs and compressing the design cycle.
    Creating such applications in partnership with industry and 
bringing them to commercial relevance can differentiate 
American manufacturing capabilities and enhance competitiveness 
while greatly improving energy technologies.
    Our $20 million proposed internal combustion engine 
initiative in basic energy sciences builds upon basic 
combustion research and simulation experience as a first 
instance of such a program.
    Needless to say, there are a number of other energy system 
applications amenable to this approach, including the 
electrical grid, carbon capture and sequestration and fission 
reactors.
    A second area to highlight is inertial fusion energy. With 
the National Ignition Facility now operating well and ignition 
possible, if not likely, within the next 2 years, it is now 
timely to plan a serious push toward an inertial fusion energy 
demonstration within the next 15 to 20 years. Post-ignition 
experiments on the NIF will be needed to inform a coordinated 
R&D effort in which high rep-rate candidate drivers are 
developed, targets design optimized for gain and ease of 
fabrication and the balance of the system defined.
    The $31 million request for high energy density laboratory 
plasmas in the Office of Fusion Energy Science budget request 
lays the groundwork for such a program. Inertial fusion energy 
could be truly one of the transformative energy technologies in 
the Department's portfolio.
    A third area of interest is materials in extreme 
environments. Understanding and improving the behavior of 
materials in radiation environments is critically important to 
extending the life of the current fleet of fission reactors, 
developing new reactor fuels and designing fusion or fission 
facilities. It is also important to nuclear security 
applications.
    The growing capabilities to synthesize, characterize and 
simulate materials in radiation environments can, therefore, 
fruitfully be applied across the Department. Indeed, some of 
the new Energy Frontier Research Centers we would like to 
establish or have are their focus.
    Finally, I note that the Department is proposing to 
continue its efforts advancing the state of the art of high 
performance computing. The energy simulations I have mentioned, 
as well as an enormous body of other applied and basic work, 
build upon almost two decades of DOE leadership in creating 
high performance computing capabilities.
    Our proposed budget for ASCR enhances support for hardware 
operating system and algorithm development and also promotes 
greater competitive access to our capabilities and capacity 
computing facilities.
    With that, I thank you for your attention and would be 
pleased to answer any questions you might have.
    Mr. Pastor. Thank you very much.
    [The information follows:]

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    Mr. Brinkman. Thank you. Thank you, Chairman Pastor, 
Ranking Member Frelinghuysen, and members of the committee. I 
am grateful for this opportunity to discuss the President's 
fiscal year 2011 budget request for science in the Department 
of Energy.
    In his National Academy of Science address last April 
President Obama stated, ``Science is more essential for our 
prosperity, our security, our health, our environment, and our 
quality of life than it has ever been before.'' These words 
continue to resonate. Today our Nation faces formidable 
challenges in energy and climate and national security and in 
maintaining America's competitive edge in an increasingly 
competitive world. Maybe that is an illustration of The New 
York Times.
    As the President has emphasized, it will be impossible for 
our Nation to meet these challenges without the 
transformational power of science to provide us with the needed 
discoveries and tools. The President's plan for science and 
innovation envisions a 10-year doubling of funding at key 
Federal agencies, including the Office of Science.
    It is a strategic investment in the future of our nation. 
Under the President's plan, the fiscal year 2011 budget funds 
the DOE Office of Science at $5.12 billion, an increase of 4.4 
percent over the Fiscal Year 2010 and an important step towards 
the fulfillment of the President's historic commitment to 
doubling.
    This budget will support path-breaking fundamental research 
in energy, helping to lay the foundation for our new 21st 
century energy economy. It will deepen our insight into 
challenging the phenomena of climate change. It will provide 
support for foundational discoveries about the physical world 
that are the wellspring and indispensable foundation of 
technological progress. It will sustain and expand our 
infrastructure of major scientific facilities, particle 
accelerators and colliders, the international ITER fusion 
facility, the world's most advanced suite of synchrotron light 
sources, the world's fastest super computers and state-of-the-
art tools for genomics and systems biology. All of this is a 
critical backbone of American leadership in physical sciences.
    The budget will also support the program direction account 
a specialized and highly skilled Federal oversight of the 
science investment, including program management, safety at our 
sites and a rigorous peer review system, which are very 
important to us. The budget will support researchers at all 17 
DOE national laboratories. It is a collective scientific 
capability that is unmatched anywhere in the world. It will 
help maintain and build our scientific workforce and nurture 
and train the next generation of American scientists.
    Some 27,000 investigators at more than 300 universities and 
other institutions across the Nation will be supported. In 
addition, some 26,000 researchers from across the country will 
rely on our major facilities. Indeed, research performed at 
four of our synchroton light sources figured in last year's 
chemistry Nobel Prize. Priorities of this budget request are 
closely aligned with those of our Nation. The request provides 
for the establishment of additional energy innovation hubs in 
the crucial area of battery and energy storage.
    It provides enhanced support of climate modeling and 
observation. It expands on the successful Energy Frontier 
Research Centers Program by adding EFRCs in individual and 
small research investigator support in critical complementary 
areas to what we have today.
    It continues to upgrade our leadership computing 
facilities, which now include the world's fastest computer, the 
Cray Jaguar at Oak Ridge National Laboratory. The request 
supports a new initiative in multiscale modeling of combustion 
and advanced engine systems. It builds out and upgrades our 
facility infrastructure.
    Finally, it expands two important workforce development 
programs begun under the Recovery Act, providing 170 new awards 
under our graduate fellowship program and 60 new Early Career 
Research Program awards.
    At a time when nations across the globe are investing 
heavily in R&D, and the world as a whole faces enormous 
challenges in energy and climate that ultimately only science 
can solve, the President's fiscal year 2011 budget request for 
the Office of Science is a critical investment in the future 
strength, prosperity and security of our Nation. Thank you.
    Mr. Pastor. Thank you, Doctor.
    [The information follows:]

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    Mr. Majumdar. Mr. Chairman, Ranking Member Frelinghuysen, 
and distinguished members of the subcommittee. I am delighted 
to appear before you today and testify as the first director of 
the Advanced Research Projects Agency-Energy or ARPA-E. I want 
to thank Congress for authorizing ARPA-E in the America 
COMPETES Act and appropriating $400 million for the Recovery 
Act of 2009. ARPA-E is about 1 year old. I will now provide a 
report of how we have done so far, an overview of the 
President's fiscal year 2011 budget request for $300 million 
and explain how we plan to operate in the future.
    ARPA-E is a small, agile, risk tolerant and goal-oriented 
organization of highly motivated and talented individuals with 
a singular mission, to integrate science and engineering and 
rapidly innovate to create new disruptive energy technologies.
    We invest in high risk, high reward research projects that 
the private sector finds too risky to invest in with the 
knowledge that if one or a few of these technologies are 
successful, they would create large new business opportunities 
that would ensure U.S. technological lead, economic health and 
energy security while reducing greenhouse gas emissions.
    The first round of funding opportunity announcement 
received an overwhelming response from the technical community, 
3,700 concept papers, proposal papers, 340 full proposals and 
after a total review process, 37 proposals selected for award 
at an average of $4 million each over 3 years. These projects 
were selected based on the impact of our mission, innovative 
technical approaches, superb teams, opportunities for the U.S. 
to gain leadership and to pursue technologies that are 
underserved by other parts of DOE and the private sector.
    The $151 million of ARPA-E investment in this round 
catalyzed an additional $33 million in investments in 2 months, 
mostly from the private sector. Equally important, ARPA-E 
negotiated all 37 awards in less than 2 months, which includes 
three technology investment agreements based on other 
transactions' authority.
    While the first round received a very high level of 
interest, the large oversubscription meant there were many 
innovative ideas that we could not support with funding. We are 
bringing many of those teams back to ARPA-E through workshops 
and new programs. The second round, with an allocation of $100 
million, drew on lessons learned from these workshops and are 
focusing on advanced batteries for transportation, new 
materials and processes for carbon capture and new ways of 
generating transportation fuels from hydrogen, carbon dioxide 
and electricity.
    The third round, with an allocation of $100 million, was 
announced March 3 and will focus on grid level electricity 
storage, new efficient cooling technologies for buildings and a 
whole new power electronics platform for enabling renewable 
electricity generation, LED lighting, vehicle electrification 
and the electricity distribution system. The goal of these 
rounds is either to identify technologies that will be 
disruptive for today's approaches or to create technologies 
where none currently exist.
    ARP-E planned and organized in a span of 2 months the first 
energy innovation summit held in Washington D.C. from March 1 
to 3. The response was overwhelming. We had almost 1,700 
participants, spanning all stakeholder communities, many of 
which do not often come together. These include scientists and 
engineers, entrepreneurs, small and large business CEOs and 
CTOs, technology investors from the venture community, as well 
as investment banks, policy researchers and NGOs.
    We invited not only the technologies that is ARPA-E funded 
in the first round, but also those that we could not fund and 
gave them the opportunity to showcase their technologies to 
other investors. We have been told that many financial deals 
were actually made. ARPA-E will continue to act as a catalyst 
for this innovation ecosystem, and we hope you will join us in 
next year's event.
    I have three priorities, for next year, A, recruit the best 
people; B, provide top leadership to create new programs and 
invest in the best ideas and teams; and, C, engage with the 
private industry in ARPA-E technologies. I am happy to report 
that we have hired and are continuing to hire some of the best 
talent in the technical community, a rare breed who are the 
best-in-class active researchers with one foot in science and 
engineering and the other in technology development and 
business. These individuals will spend 3 years in ARPA-E and 
then leave. This rotation will allow us to keep bringing in new 
talent and a freshness of ideas in ARPA-E.
    We plan to issue 10 to 12 funding announcements in fiscal 
year 2011. The final topics will be based on several workshops 
that we plan to gather input from the technical community about 
the state-of-the-art, the key technical barriers and what may 
be possible if we innovate. The program topic areas are 
outlined in my written statement and span topics such as solar 
electricity generation at three to four times lower cost than 
today, waste heat utilization and reduced energy consumption in 
industrial processes like steel, cement, paper, glass and 
aluminum manufacturing. I have described the process of how 
these programs will be created and executed.
    ARPA-E has an innovative organizational model that promotes 
internal debate and collaboration between technology pushers 
and pullers, with one foot in the world of science and the 
other in energy markets.
    This model naturally allows us to partner both with the 
Office of Science as well as the applied energy offices.
    Furthermore, I have created a panel of senior technical 
advisers for ARPA-E, which consists of technical leaders from 
DOE from all these offices. Our goal is to closely coordinate, 
create feedback loops and leverage each other to form a 
coherent and smooth innovation pipeline for the DOE.
    From what I have seen so far, I am very optimistic about 
our Nation's ability to innovate the future. I am honored to 
have the opportunity to serve the Nation with a very talented, 
dedicated and fearless team at ARPA-E, and I once again thank 
you for your support.
    Mr. Pastor. Thank you very much for your testimony.
    [The information follows:]

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    Mr. Pastor. As I start my round of questions, I want to 
tell you that first of all, I believe that America needs to 
keep its edge, and I stated in my statement that that edge is 
probably now decreasing, but we need to maintain the edge.
    Obviously last year's budget supported this administration 
and Secretary Chu. So that was proven by our budget, and it was 
passed last fall and many of the initiatives that he wanted 
were funded, and so we are here today, and the bill became law, 
what, about 6 months ago, more or less. So we have about 6 
months under our belt, and we are now talking about the next 
fiscal year of 2011.
    And it is my understanding that one of the hubs, and I 
think the one for which you have some direct responsibility, is 
fuels from sunlight. Now we are 6 months into the 
implementation of that.
    So I am asking these questions because I am concerned, as 
we stated last year, that we didn't want redundancy and we are 
following the President's lead that we are in times of fiscal 
constraint, so we are following that, and so we want to make 
sure that this subcommittee, in looking at your budget, makes 
sure that the money is well invested and it meets the needs of 
our country and at the same time keeps the edge that we have in 
science. The questions I want to ask you are under that 
premise.
    I am going to start with the hub. As I recall, when we were 
told about the hub, the hub was a model that was going to be 
taken from the lab, the Bell Labs, wasn't it, where you had one 
site and you had all these scientists, engineers, 
mathematicians, all the intelligence. We are then going to go 
from basic science to continued research and then the final 
implementation other than all this work in the lab. People 
would be able to look at what was being done in basic research, 
and if it couldn't be implemented you say time out, no, no, 
hey, start all over.
    One of the criticisms that we heard was sometimes we have 
these labs on a particular project. And even though they may 
not work at the end, they continue to fund them because you 
give people jobs and the scientists who were working on it, you 
know, need to continue working. We give grants to universities 
and the person making the research will continue to say we are 
about to get to where we want to be, but fund me one more time 
and we are getting there. And so we said, well, this is an idea 
that is probably ripe and so here we are.
    So I am going to start, basically, with the hub, and then I 
am going to ask you how grants that are being given this year 
and in the past, the ARPA-E money, where it has gone, the 
frontier, where the national labs has fallen.
    So I will start with the fuels for sunlight hub. What is 
the objective of that hub? And if you could keep your answer 
down to five minutes, I would appreciate it.
    Mr. Brinkman. Either us of us can answer that.
    Mr. Koonin. Energy comes in several different forms. We 
have got sunlight, which is good for warming things up.
    Mr. Pastor. I am personally from Arizona, I know all the 
benefits, I know about sunlight. Look at this tan.
    Mr. Koonin. I spent most of my time in London, so I didn't 
see the sun.
    Mr. Pastor. I know about sunlight. I understand.
    Mr. Koonin. And we can turn sunlight into electricity 
pretty easily.
    Mr. Pastor. Well, not that easy but we can.
    Mr. Koonin. We hope to do it better.
    Mr. Pastor. Not as cheap. Okay.
    Mr. Koonin. However, at the moment. Electricity is not the 
best way to power transportation, and chemical energy is, for 
the next several decades, probably the best way to power 
transportation. And so it would be wonderful if we have a 
direct way of turning solar energy directly into chemicals.
    Plants, of course, do that, but then we have to go through 
another step, fermentation and so on, if we can get the essence 
of photosynthesis and do it artificially, more rapidly than 
nature does it, that is the goal of the hub, to turn solar 
energy into chemical----
    Mr. Pastor. So solar energy will come out to some sort of 
fuel that you could use to run a car, run a truck, run a plane, 
whatever it might be?
    Mr. Koonin. Exactly.
    Mr. Pastor. Okay. So that is the objective, what is the 
status of it?
    Mr. Brinkman. Let's see, the status is that we are in the 
process of collecting proposals of everyone in the next couple 
of weeks, we are closing that out, we will then go through an 
extensive review process of the possible proposals, and we 
should have that all done by June and announce a first award, 
the B award of the--that is the schedule we are on. We are 
getting a lot of proposals, frankly.
    Mr. Pastor. Sure, I hope so, that was the intent. For 25 
million we would hope you would get a lot of proposals.
    Mr. Brinkman. Yes we are getting a lot of proposals.
    Mr. Pastor. So June you would have the award to whatever 
consortium is elected.
    Mr. Brinkman. That is right.
    Mr. Pastor. Okay. We have given ARPA money or ARPA-E money, 
we have been funding frontiers, I guess, since 2009. And then 
we funded how many last year?
    Mr. Brinkman. We funded a total of 46 Energy Frontier 
Research Centers. They were funded from the ARA money.
    Mr. Pastor. We have the national labs.
    Mr. Brinkman. Well, let's see, I think 30 some of those--
    Mr. Pastor. Well, but we also do research at national labs.
    Mr. Brinkman. Yes, yes.
    Mr. Pastor. And then we have other grants that probably do 
not fall under these categories.
    Mr. Brinkman. Right.
    Mr. Pastor. So what I would like you to explain to me, and 
you can go, I heard that the ARPA-E, that some of the awardees 
received money and may be a private sector and a combination of 
public-private that would transform CO2 to fuels. I 
thought I heard that testimony.
    Mr. Majumdar. That is right.
    Mr. Pastor. And since CO2 is one of the 
products, you know, it is part of photosynthesis--so the 
question is this, was this grant given in relationship to this 
hub? Is this going to be working with the hub, what are the 
inner links to the hub or are these guys going to be lone 
warriors out there doing their own thing and hopefully it will 
work itself into the hub?
    Mr. Majumdar. The idea of the ARPA-E is to take the science 
that our Office of Science is developing and discoveries and 
see how you can mix and match and address a market need.
    Mr. Pastor. Okay. Well, in this case the market need is to 
get fuels from sunlight.
    Mr. Majumdar. That is right, but it need not--so our 
program on electrofuels, I think maybe that is what you are 
referring to.
    Mr. Pastor. You said transportation fuels from 
CO2. Wouldn't this fall within the hub?
    Mr. Majumdar. No.
    Mr. Pastor. Why not?
    Mr. Majumdar. It need not be sunlight.
    Mr. Pastor. Oh, okay.
    Mr. Majumdar. So it is different. So you have electricity 
coming out of wind. And the question is can wind energy be 
converted to fuels, so that is electricity, carbon dioxide and 
hydrogen, and you have got a lot of hydrogen, for example, in 
natural gas. It is very hard to store hydrogen.
    Mr. Pastor. No, I understand. That is why you want your 
battery hub.
    Mr. Majumdar. But to store hydrogen, the best way to store 
hydrogen is hydrocarbon, which is gasoline.
    Mr. Pastor. Right, but let me ask the question this way 
because I don't want to take too much of your time. What grants 
do you anticipate after June and in the fiscal year 2011 from 
ARPA-E that will directly affect or be involved or integrated 
to this hub of fuels from sunlight?
    Mr. Majumdar. Right, so one of the things, let me just make 
it very clear.
    Mr. Pastor. Okay. Thank you for making it very clear. It 
has been very unclear up to this point.
    Mr. Majumdar. If the hub is doing a particular R&D area, 
okay, we will complement that. That is, the hub is ideally 
located, supposed to be located in one location and under one 
roof.
    So if they come across a barrier, let's say they are going 
along research and they come across a technical barrier that 
that team cannot address, because they don't have the teams, 
ARPA-E can engage the rest of the Nation in small teams to 
address that barrier and get the hub moving. So that is one 
approach.
    Mr. Pastor. But wasn't the intent, maybe I was wrong, but I 
heard that the hub was going to have the team that was going to 
be able to go from here to here to here to here and working 
together so that they would be in one site.
    Mr. Majumdar. One site, that is right.
    Mr. Pastor. And so now you have monies going out to an 
independent agent out here.
    So tell me where their redundancy is out there.
    Mr. Brinkman. Can I say something.
    Mr. Pastor. Well, let him finish. I am asking him.
    Mr. Majumdar. There are two ways, one is obvious, let's say 
in Arizona, for example, a state program.
    Mr. Frelinghuysen. Good choice.
    Mr. Pastor. We will see you in June.
    Mr. Majumdar. That is where I started my academic career is 
Arizona State.
    Mr. Pastor. Congratulations.
    Mr. Majumdar. So let's say the hub is one location and that 
is where the scientists and engineers are working together. But 
they come across a barrier that requires talent from the rest 
of the Nation. ARPA-E can provide, look at the barrier and 
provide teams from Pennsylvania, from New Jersey, et cetera. 
They say, okay, let's focus on this problem and address that 
problem. That is one.
    The other way is if the hub makes a discovery that is going 
towards, you know, sunlight to fuels, but that discovery has 
implication of other things, we could look at that and say this 
is very interesting, this could have a market impact on some 
other field and ARPA-E could leverage that and address the 
market need. So those are the two ways that we can synergize 
and leverage earmark other and create some feedback.
    Mr. Brinkman. Could I add something?
    Mr. Pastor. Sure.
    Mr. Brinkman. You have to understand something like fuels 
from the sun support a very broad subject area.
    Mr. Pastor. Oh, I understand.
    Mr. Brinkman. And we have, you know, the biofuels centers 
and they are very much like hubs. There are actually three of 
them, and these three have taken very different tactics or 
directions in trying to understand how to make biofuels from 
plant matter, cellulosic ethanol, et cetera. But they are very 
different if you go look at the three of them.
    So the idea that having created a hub will have created 
something that covers the field is not something that is going 
to happen. It is a field that there are too many other things. 
The hub will undoubtedly find something that it will focus on 
and the whole idea is to get it focused and move quickly. You 
know, the bio comparison is you usually give a block grant to a 
university and the university faculty get together to divvy up 
the money, and then you hear back from them at the end of the 
whole, of the grant fund period.
    Mr. Pastor. That is what we wanted to avoid.
    Mr. Brinkman. Yes, that is exactly what we are trying to 
avoid here. We are trying to create a dynamic situation in 
which people just, they are a research program as you go and 
that is I think a very exciting thing to do.
    Mr. Pastor. Well, it is very exciting, but at least this 
one person you are going to have to convince that--let me ask 
the question again, you have the frontier centers. Well, here 
is the question.
    Mr. Brinkman. Yes.
    Mr. Pastor. What frontier centers will be supporting this 
hub or what frontier centers in their research, because they 
get money too, will add to or cooperate?
    Mr. Brinkman. But there is only one or two that are related 
to the specific subject of the hub, you know, and they are 
small, much, much smaller, of course.
    Mr. Pastor. I understand, but that is money going out.
    Mr. Brinkman. That is some money going out, that is right. 
The question is how much you are willing to spend on this 
particular field of science, and we are saying we are willing 
to spend a lot, because it is important.
    Mr. Pastor. See, that is a question we all have to answer 
here.
    Mr. Brinkman. That is what we are trying to do. We are 
trying--I think in this case we have said hey, look, energy is 
our most important issue here today and we are trying to direct 
our scientific program to focus more on that subject. You know, 
we have--we are not focusing as hard on----
    Mr. Pastor. Why isn't it possible to bring some of these 
researchers that you have, to include them in the hub?
    Mr. Brinkman. Oh, they will.
    Mr. Pastor. Show me how. How many do we have?
    Mr. Brinkman. Well, the proposal will come in and it will 
certainly include some of these--the various proposals will 
include some of these researchers.
    Mr. Pastor. Well, let me ask the question this way, in 
2011, you are going to have further frontier centers funded.
    Mr. Brinkman. A few.
    Mr. Pastor. How many will be related to or involved in this 
hub or other hubs?
    Mr. Brinkman. None.
    Mr. Pastor. Why not?
    Mr. Brinkman. Because the new hubs the new EFRCs that we 
want to create are in subject areas that we do not currently 
fund, and we have kind of been selective. There have been 
things like materials growth, which is an area in which this 
country is falling badly behind, very much a research area.
    Mr. Pastor. Materials growth in what sense?
    Mr. Brinkman. In the sense of growing single crystals and 
new single types of crystals and materials.
    Mr. Pastor. But don't you have some of that work going on 
in labs also?
    Mr. Brinkman. Not so much. It is very interesting. We could 
have a very long discussion of this. This used to be a Bell 
Labs thing.
    Mr. Pastor. Don't you have some of this research being done 
in some of the labs?
    Mr. Brinkman. Sure, we have some of it going and EFRCs are 
also funded--funds things at the laboratory, right, not just 
the universities. So they are a mix of labs and universities. I 
think 31 out of 46 is headed by universities and the rest are 
headed by national laboratories.
    Mr. Koonin. Mr. Chairman.
    Mr. Pastor. Yes.
    Mr. Koonin. Maybe if I could take a crack at trying to draw 
the distinctions between these different funding modalities.
    Mr. Pastor. Sure.
    Mr. Koonin. The hubs are really meant to be a large scale 
sustained push on a strategic area that is deemed ripe for 
advancement and ultimately commercialization.
    You mentioned several qualities of them, quite accurately. 
I would add two more that are important, the Secretary has 
discussed. One is significant sustained funding in order to 
allow a large coherent research program and to attract the very 
best people and putting the tactical management of the program 
in the hands of working scientists who are very close to what 
is going on and can initiate or terminate lines of inquiry in 
order to get to a large-scale strategic goal.
    ARPA-E is a very different beast. As Dr. Majumdar 
mentioned, it is much more tactical, the grants are short-term, 
there will be many of them, and one will sow many seeds in the 
hope that a few will come up, largely through the private 
sector.
    The EFRCs Dr. Brinkman mentioned are somewhat in the 
middle, smaller scale, much more focused than the hubs are on 
particular technical problems at the head end of the technology 
chain.
    These are the differences between the modalities, we can 
see a need for each one of them as we look at how we go about 
trying to do energy innovation.
    Mr. Pastor. Well, I go back to my beginning, that we 
support this administration in its attempt to continue the 
leadership in science and do research. We also support the 
administration in saying we, at these times, have to make sure 
that the monies are spent wisely. And I would, I guess, get to 
the working knowledge and have a clearer understanding if there 
is a priority with this administration and how these different 
funding sources that you are asking us to increase, are going 
to be complementary to the goals--I know there are things that 
need continued research.
    I am a person that believes in basic research, but 
obviously, we have to make choices and you have made some 
choices already last year, and I am just trying to see how, in 
the choices you have made, how we can go forward and ensure 
that the dollars we are investing in science, which we want to 
do and are doing, give the biggest return.
    I think crystal research is very important, but in terms of 
the priorities that you have now given us, you know, where does 
it fall in the whole scheme of things.
    Mr. Frelinghuysen. You will probably be speaking on my 
time, Dr. Brinkman, and I will be happy to recognize you. I am 
glad Secretary Koonin sort of invoked the private sector here. 
I mean, virtually every academic institution around the Nation 
and all the good people at our DOE labs, no matter what the 
focus of that laboratory is, I talked off the record before the 
hearing, you know, the diaspora of Bell Laboratory people, you 
know, there may be some minuses for what happened to Bell labs 
but in reality, the world has benefited, hopefully not China 
and India, but the issue here, I think people tend to forget, 
is that Bell labs is no more.
    And I sort of would like to know where the private sector 
is in this overall equation. It is not DOE, Inc., and maybe we 
cannot create Bell laboratories and Secretary Chu came out of 
that culture as did you, Dr. Brinkman, and a lot of people did.
    And I am sort of wondering how, where the private sector 
here is. Are we doing things? DARPA is a model--or ARPA is 
after the military model, DARPA. Could you provide some clarity 
here.
    Mr. Koonin. Let me try and then I will turn it over to my 
colleague.
    Mr. Frelinghuysen. I don't mind, I understand you have got 
tens of thousands of people working at DOE labs doing 
remarkable research, but I am sort of wondering where the 
private sector is here.
    Mr. Koonin. Let me give you a personal anecdotal first, and 
then I will turn to the more general. I spent 5 years in BP 
before I came to the DOE as chief scientist and before that, I 
had spent 30 years in academia understanding very well the 
national lab system in this country.
    When I came to BP, I understood that the right way to 
accelerate takeup in their sector, what they were doing, was to 
effectively establish a large-scale academic research 
operation, which we call the Energy Biosciences Institute, $35 
million a year, looking very much like a hub.
    Mr. Frelinghuysen. It is under the BP umbrella.
    Mr. Koonin. BP is a private corporation.
    Mr. Frelinghuysen. Well, I had Exxon for a number of years 
in my neck of the woods.
    Mr. Koonin. We sited that at the University of California, 
Berkeley and the University of Illinois because that is where 
we could engage the very best academic researchers in a team 
focused, in that case, on biofuels. We need to be doing the 
same thing as we stand up the hubs, embracing private industry 
early on, but private industry is the only way that we will get 
things deployed in this country. That is how we do it after 
all.
    And so unless they are in there on the research at the 
beginning, in the hubs, and in other efforts that we stand up, 
it is just not going to get a transition.
    Mr. Frelinghuysen. So give us some assurance that they are 
actually in there now. Dr. Brinkman.
    Mr. Brinkman. You know, I am just thinking--did.
    Mr. Frelinghuysen. We want to know everything here. We hope 
that there is a private sector that is just as innovative.
    Mr. Brinkman. I just came across this yesterday, an example 
in which our simulation techniques have been used to simulate 
trailer trucks, long, haul trailer trucks and to do the 
aerodynamic around the trailer truck to try to reduce----
    Mr. Frelinghuysen. When we say ``we''----
    Mr. Brinkman. We worked with a small company, and this 
company has worked with us, we have used our super computers to 
simulate their trucks. And we have actually been able to make a 
roughly 50 percent improvement in gas mileage.
    Mr. Frelinghuysen. Which is a nice way of saying, and I 
have visited a lot of your labs, and we had some recent pleas 
from labs for even greater capacity for super computers. So how 
would you continue?
    Mr. Brinkman. Well, I mean, I think this is a very good 
example of us having some specialized capabilities, super 
computers, that had we worked with companies, this is actually 
a fairly small company, and that makes use of our talent and 
our capabilities to solve a real-world problem. It will have a 
big impact on that company.
    And so we do need--in my opinion, we could do more on this, 
but this is a very important way of doing things, and we have a 
lot of examples in the computer, the simulation area, where we 
work with companies.
    Mr. Frelinghuysen. But is it fair to say, in a world of 
super computers, which last time I checked was, you know, it is 
either Cray or IBM; that you have the critical mass.
    Mr. Koonin. Oh, yes.
    Mr. Frelinghuysen. And to some extent whether we like it or 
not, those capabilities are not in private hands, although 
obviously a hell of a lot of innovation, ingenuity is in those 
hands.
    Mr. Brinkman. We should say we run two different programs 
that allows anyone in the country to put in a proposal, for--
one for our really big super computers called Insight, the 
other is Cynec which uses some of our not quite-so-big 
computers. And an enormous breadth of things are proposed and 
put into, run by those machines, from private industry from all 
kinds of places.
    Mr. Frelinghuysen. And they have time on those computers. 
That is the way it is done, sort of time sharing. I just want 
to make sure in the overall scheme of things that the private 
sector is, indeed, what we are trying to buttress here. I have 
got all this stimulus, and my question was to be how we have 
spent the stimulus money. I know we have got a lot of capital 
renovation on aging facilities.
    Mr. Koonin. Sure.
    Mr. Majumdar. Let me take a shot at that, just to give you 
a little bit of background about myself, before I joined DOE 4-
1/2 months ago, I was a professor at UC Berkeley and associate 
lab director at Lawrence Livermore Lab, but given the fact that 
I was in Silicon Valley, I was an adviser to a couple of 
venture capital funds and on the board of advisers for startup 
companies, so that mix of private industry, as well as 
academia, national lab. So that is the experience I came out 
from.
    I should say that in the first round of ARPA-E dollars that 
went out, 45 percent of that went to small business, and that 
is a testament to the fact that we are looking at private 
industry. So let me give you an example of how ARPA-E will 
operate. So right now we have----
    Mr. Frelinghuysen. As long as you don't get too big. One. 
The issues here----
    Mr. Majumdar. That is exactly right. So if I may, one of 
the calls for proposals that we have right now is in advanced 
batteries, okay, so we have set a target of, you know, leap-
frogging over today's approaches in terms of energy density, 
cost, et cetera. And cost is in everything.
    So what we find is that if you are going, and we are 
getting the proposals right now, there may be five or six 
different ways of getting to those targets, and those are very 
risk approaches where it is hard to get private investment like 
venture capital money to come in.
    Mr. Frelinghuysen. It is hard to get private investment and 
venture capital to come in this climate period.
    Mr. Majumdar. Exactly. So this is where ARPA-E can play a 
very important role in looking and taking the risk, reducing 
the technological risk and supporting four or five different 
competitive approaches, and maybe one of them could be business 
ready, we don't know which one right now. And then once after 3 
years or 4 years, we find that once they are business ready, 
let the private sector take it up and invest in and scale it.
    And we are very close to a commercialization team to keep 
in touch with not only the venture community, but as well as 
for, you know, large businesses as well as for government 
procurement. We are mapping out what is the commercialization 
strategy. I should also say that we have now recruited a tech 
transfer person in all of DOE, and we are working very closely 
with them.
    Mr. Frelinghuysen. Well, I think my time is up. But, if, as 
you answer other members, if there is a way to sort of give us 
an accounting as to where the recovery and reinvestment money 
has gone, I think that committee would benefit from some of 
that.
    Mr. Majumdar. We will certainly get back to you.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Mr. Pastor. Mr. Davis.
    Mr. Davis. Mr. Chairman, thank you and for the three 
individuals who are here today, thank you for being here and 
the testimony you have given. It is always an opportunity for 
someone who lives in rural Tennessee to engage with the 
scientific minds of the world. Growing up in small rural 
Fentress County, my mother would often take a hands full of 
beans, we called them Patrick's head beans that had been passed 
down for generations. It is a not hybrid and grows some of the 
best-tasting green beans. It was just a small amount when they 
plant those and had huge harvests.
    So science today is like an agricultural garden, what we 
invest and what we plant will eventually produce great results 
for us. So I am pleased you are here today discussing. I kind 
of have a way of making things more simple than the huge 
complex questions that we deal with.
    But in Oak Ridge, in the eastern part of my district, and 
at Arnold Air Force Base in the central part of the district, 
at Arnold Air Force Base, we have an EDC and we actually do 
research and we do testing for every plane that is flown in our 
military arsenal today.
    So as I look at those, go in those tunnels and look at what 
we are doing, I realize that through experimentation, we make 
things safer; through research and through development, we make 
our life safer, and we certainly make transportation safer.
    I realize that in this country, we have always been on the 
cutting edge. We have been the ones who sent the person to the 
Moon and brought them back. There is just so much that in this 
Nation, we are always the first to do, and then we find 
ourselves behind Japan with the Earth simulator, and all of a 
sudden they were able to go at the level of about 40 Teraflops, 
whatever that means, so we realized we were behind again as we 
did and saw Sputnik and we became frightened with that, and so 
we took a new challenge.
    We now have the ability for a Petaflop, I am not sure what 
that is, but we are looking forward perhaps even going to an 
Exascale, and they tell me that is as fast as greased 
lightning, I mean, that just moves really quickly for us. The 
area of the unknown for us, we can reach that possibly with the 
computers that we have.
    So I am excited about the future. I know that when we look 
at these computers, it would give us probably solutions to a 
new energy simulation systems, and it is unbelievable what we 
are doing in science, the S&S project there that we have, we 
have one target almost completed, and I will talk about that, a 
second target, because most of that target is now pretty much 
is taken up by the world in experimentation.
    So the question I have to you is that as we look at this 
great asset we have in Oak Ridge, and looking ahead into the 
next decade, how do you plan to keep the U.S. lead, and 
specifically DOE's plans for energy system simulation with what 
we currently have in this Nation, and especially at Oak Ridge?
    Mr. Koonin. So, as I mentioned in my opening remarks, we 
see a great potential in applying what we currently have in 
computation and skills and experiment to try to bring it to 
energy systems. And right now the internal combustion engine 
looks particularly attractive to us as a first application. If 
we can make engines that are 30 to 50 percent more efficient 
than they are currently by using simulation as a tool to 
improve the design, we obviously need to engage private 
industry as we go about this, we are building a design tool for 
them after all.
    But the national laboratories are so far ahead in what they 
can do in terms of computing, validating them, that we need to 
marry that expertise with the private sector demand and we hope 
to be doing that in the next year or two.
    Mr. Brinkman. Well, this is the same thing, I just gave you 
an example a minute ago of a situation where we worked with a 
private small company to ensure that we use our computing too 
as far as we can.
    We are working hard at the same time, as you say, trying to 
get to Exascale, trying to understand how to go there, it is 
not easy, and it is going to require some really innovative 
science and architectural computers and things like that. And 
so it is very exciting for us from a scientific point of view 
to think about how to do that.
    But from a practical point of view it seems to me we are 
getting to the point where we can simulate bigger and bigger 
things, right, more complex things, and that is changing the 
world, you know, there are just areas which previously you 
couldn't predict, but now you can, and, you know, the plasma 
physics that goes into fusion is now predictable, whereas it 
wasn't 15 years ago.
    So these things are very, very important, and I think that 
we really want to push on the whole simulation business and 
getting coupled into industry as a function of time.
    Mr. Davis. As Members of Congress, we often get drummed 
between our constituencies so at the Arnold Engineering Center 
or at the Arnold Air Force Base, obviously where they do the 
testing they will actually put in a either a model or a part of 
it and they will actually do testing on that to see how it will 
operate with the speeds that we will be flying our planes. So 
their concern was that in this super computer in Oak Ridge may 
replace the Wind Tones, and we lose the 2,500 employees.
    And so I am working for both sides and feeling like a 
rubber band being flipped between. Then my understanding is 
that we will really never, ever be void of actual hands on, of 
verifying what that computer tells us is going to happen.
    Mr. Brinkman. That is right.
    Mr. Davis. And that is why I think it is imperative that, 
using that as an example, I think that is why it is imperative 
that we realize that as we look at these new energy sources we 
are talking about, whether it is energy from the sun, we know 
that solar is a part of it, we know that biomass is. But if we 
put all of our eggs in one basket--and that is something Mother 
told me not to do either, carry two baskets because we may not 
have eggs in the morning if you drop one basket and break them 
all.
    If we put all of eggs in one basket, as we seem to be doing 
in this Congress, instead of looking at, I am just saying some 
of us, instead of looking at all the sources of energy that we 
have that provides probably 90-some percent plus of our energy 
today, much of that being fossil fuels and carbon fuels, we 
need to be looking at cleaning those up some.
    So my hope is that all this new science we have, that we 
can start using that to at least bridge us to the future when 
energy will come from solar perhaps or wind, enough to supply 
the industries of this Nation.
    I think my time is about run out. I will yield back, Mr. 
Chairman, thank you.
    Mr. Pastor. Michael.
    Mr. Simpson. Thank you, Mr. Chairman. And thank you all for 
being here today. I was originally going to ask you about 
spallation neutron sources, linac coherent light sources, 
attosecond research and gas hydrates, but I think the answer 
might take too long, and I probably wouldn't understand it, so 
we will submit those in writing.
    I actually want to follow up on what the Chairman and 
ranking member were talking about. You know, originally when 
Dr. Chu came in, I heard from many people that brilliant 
individual, the concern was science guy, and that the labs and 
so forth would be so concerned with science that we would 
forget about, at some point in time, you have to apply science 
to actual reality and what you can do in the real world.
    I am happy to say that the reports I get from the 
researchers at the INL and so forth, they are very excited 
about what is happening in the cooperation between the Office 
of Science and the National Labs and what is going on there and 
the potentials for research that they are looking at and stuff. 
But I wonder, and I have asked this question before in 
different settings, we are essentially taking over a lot of the 
research that used to be done by the private sector; Bell Labs 
and so forth, we are now doing it with the government.
    There is one fundamental difference. And that is that Bell 
Labs and the private sector research had a bottom line. There 
was a reason they were doing something, and that they had to 
show a profit in the long run. Not necessarily true with 
government. And we have created--and my concern is we have 
created what has been called the valley of death between 
research and using something out in the field that eventually 
you have got to have a product that industry wants, can use and 
can sell.
    What exactly, and I am not just saying with the Office of 
Science, but within DOE in general, what coordination do we 
have with the private sector to have their input into what they 
think is necessary, what they need in their field? I am 
thinking specifically in the nuclear area where we are talking 
about NGNP, modular reactors, these types of things; what is 
there within DOE that includes the end users, the people who 
are going to be producing the electricity, the people who are 
going to be using it, high energy heat and all that kind of 
stuff?
    And I was glad to see that each of you mentioned during the 
hearing your background. Just to repeat them, Dr. Koonin you 
were Professor at the California Institute of Technology, and 
you were with BP for a number of years as the lead chief 
scientist there.
    And Dr. Brinkman, you were a Research Physicist at the 
Physics Department of Princeton University. You worked at Bell 
Laboratories for a number of years, and also were at Sandia 
National Lab for a period of time.
    And Dr. Majumdar, you were Associate Laboratory Director of 
Energy at Lawrence Livermore, and you were also in the private 
sector advising small start-up companies in Silicon Valley, 
right.
    Mr. Majumdar. Right.
    Mr. Simpson. Where is the private sector in all of this? 
And how do we get them involved? And what should we establish 
so that we have a relationship between scientists, the DOE and 
the private sector?
    Mr. Majumdar. If I may just answer that. When we create 
programs, ARPA-E's goal is to look at science, see what is 
interesting out there and address a market need. So the 
interaction with the private sector is something that we take 
very, very seriously.
    Mr. Simpson. Is there a formal organization to do that?
    Mr. Majumdar. We have a commercialization team, 
commercialization and adoption team.
    Mr. Simpson. Who does that include?
    Mr. Majumdar. People from the venture capital community 
that we have brought in to ARPA-E who can look at the portfolio 
of technologies and see what can be business-ready and interact 
with the business world and see how they could be adopted over 
there.
    So when we create programs, we actually have a workshop. We 
bring the community in. And that community includes the private 
sector. I mean, half of the people that show up are people from 
the private sector, people from buyers, procurement people.
    So we had a workshop on buildings that we jointly did with 
the Energy Efficiency and Renewable Energy Office with people 
from GSA, people from the military, so who are procurement 
people, and people from the private industry like United 
Technologies, Honeywell, et cetera, to see where the state-of-
the-art in their field is and what can be done to enable 
business and then scale it. Because I think one of the things 
that we are taking very seriously is that if we can get 
technologies to the level that the private sector can pick it 
up and scale, that is the best way we can scale.
    Mr. Simpson. I think your model has probably come closer to 
involving the private sector than most models that I have seen 
or most things that have been done.
    I look at, and this is probably a question for NE under 
secretary more than anyone else, but we are focused on small 
modular reactors in this budget. Is that something industry 
wants? Is that something industry will use. What is going to be 
the government's responsibility in developing these and the 
cost that the government can incur? What can we expect to have 
to appropriate as a committee? What can we expect industry to 
contribute to this overall effort?
    The same with NGNP. I mean, that is the debate that is 
going on. For 8 years that I have sat on this committee, it is 
a chicken and egg; well, we want the industry to make a 
commitment and do this, or well, we want the government to do 
this. And nobody is talking. And that has been a concern of 
mine. And I don't say this as a criticism. I say this as a hump 
we have got to overcome.
    Mr. Koonin. So let me address the NA issue specifically 
first. There is an advisory committee NIAC, which consists of 
members of industry and academia who provide program advice to 
the NE management, and so there is an industry voice there. A 
good deal of the NE program is focused on the light water 
reactors right now, you know life extension. There is a hub 
that is being stood up associated with modeling simulation, 
particularly for light water reactors. So to say that it is 
only focused on SMRs or NGNP.
    Mr. Simpson. Not only.
    Mr. Koonin. But we need to be looking a head or two of 
course also.
    More generally, I would note that, yes, we need to have the 
voice of industry. But my experience in industry taught me that 
industry is a wonderful optimizer given the policy playing 
field. And if we want to have industry accelerate innovation, 
we need a stable and sensible policy environment so that they 
can make the investments on the decadal time scale that we 
need.
    Mr. Simpson. I would agree with that fully. And that is one 
of the big problems we have got, is that we have 4-year 
administrations, a Secretary of Interior, or Energy, that lasts 
sometimes 2 years, sometimes even shorter than that. And every 
time somebody new comes in, the policy changes. And we are 
talking about technology that is meant to last 30 years or so, 
or develop over a 30-year period. And that is the biggest 
problem we have got.
    Mr. Koonin. If we get the policies right and consistent, 
everything else will follow.
    Mr. Simpson. We had a policy that we were going to open 
Yucca Mountain, and all of a sudden, we decided we weren't 
going to open Yucca Mountain.
    I mean, we just change policies every time we get a new 
administration, and I don't know what to do about it. I am not 
saying that a new administration doesn't have the right to put 
their footprint down on what they want to do. They absolutely 
have the right to do that. But how do we establish in the 
political environment that we currently have, where things turn 
over every couple of years, 4 years, or whatever, how do we 
establish research programs that are meant to last 30 years? 
That is a problem that we need to solve somehow, because if I 
am industry out there, there is no way I am going to invest in 
something when I think it is going to change in 3 years.
    Mr. Brinkman. You want to be a little careful here, because 
it seems to me that, on the research side of things within the 
Department, we have had very long-term and in many ways 
consistent funding. I don't care, you can cite your favorite 
example. There are lots of them that have really existed for 
long term. I think the problem has more been going on the 
technology, and driving technology is where I think you would 
argue.
    Mr. Koonin. The take-up.
    Mr. Brinkman. The take-up is where the politics keeps 
coming in and more so than in science. Now, science goes up and 
down in its funding to some extent, but I think it has not ever 
gone down so bad that it is really not so critical or anything 
like that.
    Mr. Simpson. Well, my time is running out, but in closing, 
let me just say, we need to get the Department of Energy, 
industry, Members of Congress, together and talk about this. 
How are we going to solve this? What kind of framework are we 
going to put together that we can solve this?
    Mr. Pastor. Thank you.
    Before I go to Congressman Israel, I guess I had some of 
the same frustration as some of us who have been on this 
committee. If you take Yucca Mountain for an example, we have 
been dealing with Yucca Mountain; I have been here for almost 
15 years, and Yucca Mountain this and that. And then from one 
day to the next, a Blue Ribbon committee, okay, all right. What 
happens to all that money we spent to get there?
    I can remember when, all of a sudden, the hydrogen fuel 
cell became the mantra. Hydrogen fuel cell, and all of a sudden 
here we are talking about millions of dollars here to this lab 
and this university and Israel's district. And here we come, a 
new administration, zero. And so we are looking at each other, 
and to his credit, obviously money had been invested. People 
had gotten involved. The private sector, I had a conversation 
with 3M. 3M had started a small division to start dealing with 
the hydrogen fuel cell. All of a sudden, guess what? You had a 
number of scientists, and what is next?
    And I think that some of the questioning today is, you 
know, because we have hubs and all these new initiatives. And I 
agree that the basic science is basic science, and you need to 
do it, but again, we need to spend the money wisely. I am 
taking his time, so let me go ahead. And then you can respond 
when I get back.
    Mr. Brinkman. Respond on his time.
    Mr. Pastor. No, you can respond to me.
    Mr. Brinkman. I see. Okay.
    Mr. Pastor. Go ahead.
    Mr. Israel. For the record, the only hydrogen I have in my 
district is the Long Island Sound and the Atlantic Ocean.
    Look, I can barely operate a TiVo, so I would never believe 
that I as a Member of Congress should be the one to decide what 
science works and what technology is the next great solution. I 
believe our job is to incentivize all the sciences, to be 
agnostic, to let the sciences compete against one another, to 
commercialize those sciences where it is viable and then have 
the marketplace compete and decide who the winners are and who 
the losers are.
    One of the things that I am concerned about is, I view 
research and development as a tool to retain our global 
competitiveness. We are frustrated, all of us on this panel, 
when we read stories about how China is now ahead of us in 
clean technology, how we are losing to Germany and Spain on 
solar, how we are losing to Brazil on biofuels, how we are now 
losing to Israel on electric vehicles. They are going to make 
gas stations obsolete. They are going to make the internal 
combustion engine obsolete by deploying a whole new fleet of 
electric vehicles. But the response to that, the good news, I 
think, is in most of the 37,000 applications that you got in 
your first solicitation----
    Mr. Majumdar. 3,700.
    Mr. Israel. I am sorry, 3,700. Was it 3,700 that you 
received on your first solicitation?
    Mr. Majumdar. That is right.
    Mr. Israel. Okay, 3,700. Now, some of them defied the laws 
of physics and defied the laws of gravity, but most of them, 
most of them tell you that there are entrepreneurs in this 
country who are ready to lead us to the next generation of 
solutions.
    My colleague Mr. Davis talked about landing men on the moon 
in a decade. It started in a garage that was owned by Leroy 
Grumman on Long Island. That is where that technology began, 
not in NASA, not in the government, but in the private sector 
in somebody's garage, in a small mom-and-pop operation that 
didn't have enough capital to rent office space, so they ran it 
out of their garage.
    One of the things that I think that you did very well, for 
those companies that you couldn't fund, you responded to Bart 
Gordon's suggestion that you find ways to showcase them. You 
were only able to fund 30-plus of the 3,700. But as Chairman 
Gordon pointed out to you, there are some applications that 
really deserve funding; you couldn't fund them. You don't want 
to just close the door on them. You need to showcase them, and 
you need to accelerate those technologies. And so you did your 
ARPA-E Energy Innovation Summit.
    And Dr. Majumdar, you talk about the fact that you invited 
not only the technologies that ARPA-E funded in the first FOA 
round, but also those that you could not fund and gave those 
applicants the opportunity to showcase their technologies to 
other investors, and we have been told that many financial 
deals were made. And so my question is, are you going to do 
future showcases? Do you have plans for additional innovation 
summits? And how are you going to proceed on that?
    Mr. Majumdar. Absolutely. I think, from all the feedback 
that we have gotten, these are anecdotal. Everyone felt that 
there was a new sense of energy in this ecosystem that is 
coming together. And I ended the conference by saying that what 
DOE and what ARPA-E, with its modest budget and people, what we 
can do is act as a catalyst and to bring people together and 
have them interact in ways that we cannot predict. And what we 
saw happen were financial deals were made, experienced CEOs 
educating the inexperienced CEOs what to do and what not to do. 
And that I believe, and the technology showcase, where we 
showcased all of the things that we could not fund, where all 
kinds of cross interactions were happening, which I think is a 
wonderful thing, and some people call it the Woodstock of 
energy innovation. And that is what we saw.
    Mr. Israel. Without Jimi Hendrix. Dr. Chu instead of Jimi 
Hendrix. A big difference.
    Mr. Majumdar. So I believe this is a good start. We have to 
keep it up; 1,700 people showed up on 2 months notice. And I 
think if you give longer lead time, a lot more will come, and 
the word will spread.
    Mr. Israel. Will you do additional summits?
    Mr. Majumdar. Absolutely. We are going to do summits every 
year.
    Mr. Israel. One every year?
    Mr. Majumdar. Yeah.
    Mr. Israel. And will you always do it in Washington, or 
will you consider plans to have the summits in different areas 
of the country where you have a technological capital?
    Mr. Majumdar. Well, I think that is a great idea. As of 
now, we have planned to do it in Washington, but we are 
flexible.
    Mr. Israel. Well, I would suggest that, given the fact that 
you had 3,700 applications and not everybody can afford to fly 
to Washington and take a hotel here, I think it would be very 
empowering for those companies, for you to bring those summits 
to them, to those communities, do one in Silicon Valley and New 
York. Make sure you do one in Pastor's district, very 
important.
    Mr. Majumdar. Thank you. Thank you for the suggestion. 
Great idea.
    Mr. Pastor. Well, since you were in Arizona, you know that 
the resort rates right now, because of the economy, you can get 
quite a deal, so then they will criticize you for going to a 
resort. That is the other side.
    You wanted to say something, Dr. Brinkman. I didn't mean to 
cut you off.
    Mr. Brinkman. I was going to say a couple of things about 
the private sector. And one of the things I should remind 
people, when they talk about the success of the laboratories, 
Bell Laboratories was unique for a reason which people tend to 
forget. And that is, AT&T was guaranteed a 12 percent return on 
its money. And that was the base of its expenses, so we were an 
expense. And so there was a steadiness of the funding that was 
a remarkable thing for many, many years. And that is what to me 
is one of the important things, is the fact that it was such a 
steady funding base, and it makes a huge difference having 
that.
    Mr. Frelinghuysen. If you would yield, it was actually the 
repeal of the Communications Act of 1934 that sort of broke the 
back of one of the greatest, world's greatest assets.
    Mr. Pastor. I was going to say, more competition, lesser 
rates. Are we down to about three hardline companies and 
cellular got invented?
    Again, and so I thought I heard you say that ARPA-E is 
going out for a bid on storage, the storage capacity or new 
storage containers, et cetera.
    Mr. Majumdar. Batteries.
    Mr. Pastor. Batteries. So that is currently under way.
    Mr. Majumdar. Yes. We are receiving proposals right now, 
and that is batteries.
    Mr. Pastor. And I don't know what the investment is going 
to be. But again, getting back to where we are in the scheme of 
things, the office of electricity is also asking for money in 
their budget on this. And I am positive that you will have some 
frontier centers that are going to, again, ask for money for 
this, and so here you go again. There is the request for a new 
hub.
    Hopefully, this bill will get done, hopefully this bill may 
get done in October, this fall. But you would have given out 
that RFP. Research would have started. Possibly some of these 
frontiers would have already started their research, and at 
best, this hub would be a year from now, at best, and that is 
at best. And that is still probably the RFP going out, and so, 
again, I would ask the question, because is it better now to 
wait until the results of your efforts, and then see whether or 
not we need to spend an additional $25 million on another 
effort. That is the question that we have.
    And again, because we know money is scarce, we know that 
you need to fund various programs because they are equally as 
important, and so that is where we come up here and say, you 
are going on with this effort and you are going to be almost a 
year to 6 months ahead, where are we going to want to spend the 
other $25 million? And so this is a dilemma that I guess at 
least this person faces up here, and your clarification would 
be very helpful.
    Mr. Koonin. So let me try. You know, when you think about a 
battery, whether for grid storage or transportation storage, it 
is actually a pretty complicated physical system. You got the 
electrolyte in the middle. You got electrodes, and the 
interfaces between these materials are where all the action is 
really. We have developed great capabilities to measure such 
interfaces, perhaps even construct them, I mean, basic science. 
And those capabilities are really in the labs and the 
universities and not at all in the small start-ups or the 
private sector. So the hub, at least initially, my guess is, I 
don't know what the proposals will look like, but will be 
focused on that really fundamental problem. And that is there 
and will be there for a decade.
    Mr. Pastor. Could I just interrupt? I am sorry. But that 
has been what we have been doing in funding, and you will be 
doing in your funding. So what I am saying is, we are funding 
now to that question; how do we increase the capacity of a 
battery, whether it be for a car, a truck for transportation, 
or whether it be to store the wind energy that is being 
produced by wind energy? In stimulus money, I can tell you 
because I know, almost $85 million was given to a company in 
downtown Phoenix, and that is the private sector. And so I am 
saying, a year from now, we are talking about a hub, and we 
have in the past, been moving ahead. I know most of the 
technology and research is in Korea and Japan, so we have to 
catch up on that. Our battery business has pretty much gone 
overseas. So I understand all of this, but help me in seeing 
how the coordination and integration is involved.
    Mr. Koonin. There is a whole chain here, right? There is 
the basic research. There is the development, the packaging and 
then ultimately the deployment. Our batteries right now are 
frankly not good enough either, for transportation to be 
economical. We are a factor of five away in cost from what 
would make a battery electric vehicle general purpose useful. 
We are probably about a factor or two away in cost from what a 
plug-in hybrid would require. So there is a lot of research and 
development to do if we are going to make those applications 
possible.
    The grid storage right now, large-scale grid storage, 
batteries are much, much too expensive, and we need to get 
down. Right now the cheapest way to store electricity is to 
pump water, pump it up, pump it down, by factors of 10 to 15. 
If we ever want batteries to be a player in that game, we need 
a lot of basic research and then applied development.
    Mr. Brinkman. One other comment I might make, and that is, 
if you really look at our total effort in batteries, even 
including the hub, if we include that, we are not spending 
nearly as much as the Chinese, for instance. We think they are 
spending about $100 million a year. We are probably spending, 
when you add the hub in, $75 million, $80 million a year. So 
even though you might think we are doing an enormous amount, 
relatively it is not all that big or out of line.
    Mr. Majumdar. May I take a shot at that.
    If you look at a lithium ion battery today, we have 1 
percent of the world market share, 1 percent, and it was 
invented in the United States.
    Last year, 2009, the Fermi award, which is the highest DOE 
award, was given to the gentleman who invented it. And so it is 
ironic that we are in this state.
    So when you look at, how do we approach this problem, think 
of a pipeline. On one end is basic research, and these are 
discoveries, understanding of how these electrochemical 
reactions actually work, and why it does not work. And what we 
are trying to do in ARPA-E is to take that understanding and 
leapfrog over today to really go over and make it disruptive. 
Because if you try to create today's lithium ion batteries, we 
may be facing a losing battle. So the question is, can we go 
over, and it need not be lithium ion in the future.
    Mr. Pastor. Well, then, I will argue this point. If that is 
the case, why don't I take the--or why doesn't the subcommittee 
take more money from the hub and invest it in you?
    Mr. Majumdar. But we need the basic science. Let me 
explain. There is a reason why we need the hub, is because most 
of the people who are trying to put together, so what ARPA-E is 
investing in is people who are hands-on, putting things 
together and making the next-generation battery. Most of them 
will not work.
    Mr. Frelinghuysen. Will the gentleman yield?
    So you are saying that we produce in this country 1 percent 
of lithium batteries. I happen to have a producer in my 
congressional district that does some very interesting things 
with lithium batteries for NASA. And hell, what we are doing to 
undercut NASA ought to worry every one of us here in terms of 
national security, much less other issues. You are almost 
conceding that we have lost that battle, and we are going to go 
on to some other type of battery.
    Mr. Majumdar. I think we need a portfolio, if I may 
suggest.
    Mr. Frelinghuysen. But you have to concede we have already 
lost that marketplace. It is pretty difficult to regain it if 
indeed lithium batteries have some minuses to them as well, 
environmental minuses.
    Mr. Majumdar. Right.
    Mr. Frelinghuysen. So you would concede that that is pretty 
difficult to get that back here?
    Mr. Majumdar. I think getting the manufacturing of that 
back--I mean, 1 percent was pre-Recovery Act. I think a post-
Recovery Act is anywhere about 15 percent of the market share. 
But coming back to the challenge, these teams are trying to go 
aggressively in the high-risk approach in trying to get the 
next-generation battery. You know, we hope a few of them are 
successful, but many of them may fail. But they have to try, 
because we don't know whether it is going to fail or not. But 
when they fail, they will need to go back to basic research to 
understand why they failed, learn quickly from that, and 
innovate again. So that feedback loop is extremely important. 
And that is where you need the basic research.
    And what we try to do in ARPA-E is develop technology so 
that it becomes market-ready, and that coordination is what I 
was talking about. That coordination is extremely important, 
and that is what we plan to do, and we coordinate very closely.
    Mr. Koonin. Even a leaping frog needs a good platform to 
take off.
    Mr. Frelinghuysen. Okay. That may be the quote for the day.
    Mr. Pastor. Well, we are working on yours.
    You wanted to say something, Dr. Brinkman. Go ahead.
    Mr. Brinkman. I was just going to try to reiterate. 
Batteries are, they are a fairly mature technology, but there 
are still many things that can happen.
    And one of the things you should understand is, in the last 
10, 15 years, the simple capacitors have changed enormously. 
All of a sudden, you have a thing called an ultra capacitor 
which is a factor of 1,000 more energy being stored in the same 
volume. And so you really have to be careful. And science does 
change things and changes the dynamics of things. And what we 
have today may not be the thing we have tomorrow. We have got 
to work on that. If you punt and say, hey, we are satisfied 
with where we are, things won't happen, right?
    Mr. Frelinghuysen. I serve on the Defense Subcommittee on 
Appropriations, and I often ask the four-stars that come in to 
see us, what keeps you awake at night? You know, we have cyber 
issues, systems being attacked right and left. I alluded to 
some of the things why it is important to support some of the 
good things NASA does. We need the ability to still launch 
things for space asset purposes.
    We commented earlier a little bit on the New York Times 
headline this morning, ``China Drawing High Tech Research From 
U.S.'' You could well substitute India. But there seems to be a 
dynamic here somewhat explained in that article, which seems to 
be a little more disturbing than some of the other articles. 
This isn't just a question of outsourcing. This is actually a 
move of some of, I assume, highly-qualified scientists to China 
and setting up laboratories, which given the fairly robust 
Chinese economy, the quality of their workforce, the quality of 
their educational system, their dedication to going to school 6 
and a half days a week, the number of scientists that they are 
graduating compared to us, the number of scientific papers, the 
number of patents. Hell, from what I hear from people we talked 
about before the meeting, hell, we are way, just on the patent 
submissions, we are way behind what is happening abroad. I just 
wonder what would be your message here? We need a wake-up call. 
Give it to us today.
    Mr. Pastor. Just a request, you need to turn on the mike, 
so we can get it for the recording, and people can hear you. 
Thank you.
    Mr. Koonin. You know, since I left my theoretical physics 
roots probably two decades ago, I have been increasingly co-
student of socioeconomic technical trends. And what I have 
learned is it is hard to predict in detail, but there are some 
broad facts that really will likely determine the next several 
decades.
    And I will just note one for you that causes me great 
concern. This country is 4.5 percent of the world's people and 
are about 23 percent of the world's GDP right now. So we are 
five times better off than the average citizen on the globe. 
And we have enjoyed that kind of out-of-whackness for two 
centuries, and we have benefited from it in many different 
ways. This country is wonderful and great and continues to 
attract great talent and do wonderful things.
    But as you look forward, that 5-to-1 number is almost 
certainly going to change. And coming to grips with that, 
realizing the severity and likelihood of that problem and 
understanding what it means for the country's economy, 
technical lead, geopolitical heft and so on is something that 
we have not devoted enough time to, let alone figuring out what 
to do about it. That is what worries me most.
    Mr. Frelinghuysen. This is like Norm Augustine in ``The 
Gathering Storm.'' That is exactly right. That is an aspect.
    Mr. Majumdar. We had an ARPA-E hearing in the end of 
January this year. And in my oral statement, I actually said, 
if there is any concern of mine, it is not the innovation. I 
think there are lots of innovators out here, brilliant people. 
The ideas that I am seeing, I am absolutely confident that we 
have the best ideas.
    What keeps me awake at night is, how do we keep those ideas 
in scale in the United States? And actually I have a suggestion 
to make. And I don't know exactly how to go about doing it, but 
I would like to get your help in this. Is that the reason 
people are going to China, there are many reasons for it, but 
one big reason is there is a demand out there. There is 
infrastructure being created. Well, the government is the 
biggest purchaser of energy. So could we potentially use that 
to keep some of the innovations out here to use that to 
leapfrog, to pick those technologies which are the future and 
bring them into the market and stabilize it. And that is 
something that, you know, I am just proposing and just 
suggesting, but I would love to get your thoughts about that.
    Mr. Frelinghuysen. Well, it is interesting, and my time is 
up, there was an article, another article either in the Journal 
or New York Times the other day, about obviously the power of 
government contracting. And I don't mean to be political here, 
but there are some who suggest that the only people that will 
be allowed to step up to the plate would be those with 
unionized work forces. I mean, it is disturbing to me. I mean, 
if we want to recognize the history of our country, 
entrepreneurship, risk-taking, a lot of that comes from, as was 
described earlier, small innovators, mom-and-pop people working 
in their garage, former Westinghouse scholars in high school. 
We are on a trajectory here. If we use the power of our 
government contracting and define who is able and who is not 
able to participate, we are going to have some catastrophic 
results.
    I am not asking you. It would probably be impolitic for you 
to react to my comment, but I find it disturbing that the power 
of that, the power of that ought to be focused somewhat, as you 
suggested, encouraging everybody, whatever their background and 
means, union and nonunion, to step up to the plate.
    Mr. Pastor. Mr. Davis.
    Mr. Davis. As we discuss the concepts and ideas and the 
hope for new energy sources, including the storage battery, I 
think maybe we may be looking, we also ought to be looking at 
what uses that power source. For 2 and a half years, I have had 
a triple-A battery in this. Now, it is because the light bulb 
itself doesn't use much energy. I have an old pick-up truck. It 
is a 40-something model. And when I hit the starter on the 
floor, the battery has enough energy to crank that energy up, 
and then the engine is a combustion engine.
    I wonder if we are doing enough work on what will be 
producing the power from that storage energy, the engine 
itself. Are we looking at that as being also an answer to this. 
When I look at the energy being produced by TVA, at our home, 
we cut the cost because we put in a 13-plus SEER electric heat 
pump. We put in fluorescent lights, and we have reduced 
dramatically because we are using appliances that will use less 
energy but still give us the same efficiency and actually keep 
the house as comfortable or refrigerator keep--I only heard 
about the battery itself, but are we not doing research on what 
will be using that to provide the power we need?
    Mr. Koonin. So the energy system really has two sides: The 
supply side, which is what you mention; and the demand side, 
how efficiently we use energy.
    The Department has great programs and great leverage in 
controlling demand. We help set appliance standards, and we 
have been much more aggressive in promoting efficient 
appliances. We are looking at pricing mechanisms that would 
encourage more efficient use of energy. We are looking at 
technology development, as I mentioned, in automobile engines 
to make them more efficient at the same cost.
    And then finally there are behavioral issues. If you just 
make the price of energy use evident to people. Without 
changing it, but just making it evident. So, for example, when 
you paid for gasoline at the pump, you also paid for your 
insurance and your road taxes, depreciation on your vehicle all 
rolled in together. That will start to change people's 
behavior. And so there are a number of mechanisms whereby you 
can think about reducing demand working on that side as well as 
of course working on the supply side as we have talked about.
    Mr. Davis. See, I am concerned we are not doing enough in 
that area, because the gas tank of an automobile will be the 
new battery you are saying. But the engine up here, we have 4 
cylinders and 8 cylinders. I mean, we reduce consumption by 
what will actually produce the power to pull that vehicle. I am 
concerned that we aren't doing them, because all I hear about 
is the battery.
    Mr. Brinkman. Well, it is certainly not the only thing we 
are working on. I mean, earlier, I cited the fact that we 
worked with a small company doing simulations of the 
aerodynamic flow around trailer trucks. And that is a large 
part of the resistance to its motion. And we have actually been 
able to greatly increase the gas mileage of these kind of 
trucks. They have figured out how to break the turbulence off 
in the back of the truck and that kind of stuff.
    Mr. Davis. That will work all over Tennessee and some 
Kentucky and some in Alabama as a general contractor. And I had 
a friend who is a mayor of a small town that, during the Carter 
administration, actually got a grant to look at maybe using, 
making synthetic gas from byproducts of wood. And they had a 
jet engine they were trying to fuel up. He grinned 1 day and 
said, we got it going one time. And they spent over $1 million 
doing that. Now, that has been 20-some years, and I think the 
grant has finally run out. Wherever it went, it went somewhere.
    But that didn't work, at least not efficiently and at least 
not cost wise. And so I travel through my district, just 
outside of Marion County outside of Chattanooga, there is a 
huge it looks like almost space station out there. It is an old 
ethanol plant that never, ever produced. And there is a lot of 
money that is tied up in that. A lot of it was Federal dollars 
that was tied up in that. And what I don't want us to do, and I 
am all for science technology, but proven science is something 
I am for. But if we are just firing in the dark on some of 
these things, I have some problems with it.
    Mr. Koonin. So as you look at, as we look at energy 
technologies, whether demand side or supply side, I always use 
three metrics, three dimensions I try to think about them: One 
is scale. Can I imagine this getting big enough to have a 
significant impact? The second is cost. How does it compare to 
alternatives? And the third is timeliness. Do I have to wait 30 
years for this thing, or is it ready pretty much now? And it is 
very interesting to rank energy technologies in those 
dimensions. You come to some pretty simple and compelling 
conclusions.
    Mr. Davis. And I know we are doing that. I just want to 
say, as someone who is kind of a commonsense person, I get 
alarmed sometimes when I see success not occur when they 
should.
    And I have another question, then you can answer both of 
those. At the SNS project, obviously in the mid-1990s, we 
decided that the Super Collider was not the best way to spend 
our dollars, so we went to the SNS project. We put that at the 
National Labs. Fortunately it is in Oak Ridge, and we are glad 
that it is there. We have the initial target pretty well 
finished. We are halfway through. Right now, almost all of 
those slots are pretty well taken up. I notice there is not any 
funding to start the second target. I hope we can do that soon, 
and what are the plans for that?
    Mr. Brinkman. It is true, we have not started the second 
target station. It is really basically on our list, but it is, 
right now, not our highest priority thing. We are trying to 
finish NSLS II. We are trying to finish the 12 GeV machine in 
the Jefferson Lab. So we have a bunch of things in the pipeline 
right now that we have to get finished before we can attack 
that problem. We would love to do it but, hey, finite 
resources.
    Mr. Davis. I look forward to working with you as we 
navigate through that.
    Mr. Chairman, thank you. I think I used my time up. I yield 
back.
    Mr. Pastor. Mr. Simpson. 
    Mr. Simpson. Thank you. I will be brief.
    Everybody here said they support sciences. I kind of agree 
with Mark Twain, progress is okay once, but it has gone on far 
too long.
    I am just kidding. Sorry, Rodney.
    I need to ask a quick question. Under Secretary Koonin, the 
fiscal year 2010 Defense Authorization Bill reduced the general 
plant project limit to $5 million for NNSA labs for 2011. This 
subcommittee has supported a $10 million GPP limit for labs to 
give them greater flexibility in construction of small 
buildings. Would you support us keeping the GPP limit at $10 
million for nonNNSA labs?
    Mr. Koonin. I only know the science labs well. I think $10 
million is about the right number as a limit. I can't speak for 
the NNSA side of the House, but for science, I would encourage 
you to look at $10 million.
    Mr. Simpson. I appreciate that. Let me just say, in 
conclusion, about what I was talking about earlier, one of the 
prime examples that I use is that the last administration came 
in, and they had this proposal GNEP. The committee here didn't 
quite know what to do with this. There were aspects of it that 
we agreed with, there were aspects of it that industry agreed 
with. I mean you know they didn't agree with all of it because 
nonproliferation is not their issue and there were 
nonproliferation aspects of GNEP and stuff. And so we never 
really fully funded it or anything like that.
    Then we have a new administration that comes in. They want 
to refocus all that, do hubs. The committee kind of looks at it 
like now. What is going to be the proposal 3 years from now? We 
don't know. And that is why you see kind of reluctance on this 
when they came in with eight hubs proposed originally and 
stuff, and we said, let's do a little bit and see how it works 
out. And that is kind of where we are right now. And that is 
why we want to see how these hubs are working and exactly what 
we are doing with them.
    When I read your bios and stuff, I didn't want you to get 
the impression that I was trying to say you weren't qualified 
or anything. I think you are. That is something that you all 
have every right to be very proud of. And we are very lucky to 
have you working in the government. And I thank you for the 
work that you are doing and look forward to working with you to 
address these concerns that we have so that we move forward 
together. Thank you.
    Mr. Frelinghuysen. Echo Mr. Simpson's comments. I am sure 
the Chair does as well.
    Secretary Koonin, I found in your opening statement, you 
made comments in I think support for inertial fusion energy. 
But looking at your budget request, the budget request is not 
commiserate with that. And I sort of just wonder, are you 
considering some sort of a shift here from supporting magnetic 
confinement?
    Mr. Koonin. No intention of a shift at all, but inertial 
fusion----
    Mr. Frelinghuysen. We have been pretty supportive here of 
obviously domestic fusion and ITER. And while there have been 
some problems along the road here, is there some sort of a 
shift going on here?
    Mr. Koonin. No. But there is a new player on the scene, if 
you like. You know, inertial fusion energy has been, or 
inertial fusion generally has been pursued by the NNSA for 20 
years. And I have been actually glad to have helped out with 
that just about over that same course. We are now on the verge 
of passing a milestone where we may actually be able to get 
more energy out than we put in through ignition. We will know 
that, I think, within the next several years.
    Mr. Frelinghuysen. This is at the NIF.
    Mr. Koonin. This is at the NIF, that is correct. They are 
just about to start an ignition campaign later this year. If 
they are successful, that opens up a new route to fusion energy 
that we have not had before. That does not mean that we should 
deemphasize at all our commitment to magnetic or to ITER, but 
it does mean that we would be remiss if we didn't capitalize on 
that achievement and seriously look at and do a technology 
assessment for inertial fusion energy. It is another case 
where, if we don't, the Europeans are moving rapidly on this 
already, and they will. And so you could have a repeat of 
lithium ion batteries or solar cells and so on.
    Mr. Frelinghuysen. Thanks for providing that clarity. That 
is important. Again, thank you, for your appearance.
    Thank you, Mr. Chairman.
    Mr. Pastor. Thank you very much for being with us this 
morning. You have your role to play in government. We have 
ours. But in the end, we are here for one purpose, and that is 
to serve the American public, so we are one team.
    And we look forward to working with you, and we will submit 
some questions for the record. And if you could return the 
answers, we would greatly appreciate it. But I know that we 
will continue to work with you to get a budget that ensures 
that America keeps its lead in science and that the taxpayers 
are rewarded by your efforts. And we thank you very much. And 
we wish you a great day and thank you very much.
    The hearing is concluded.

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                           W I T N E S S E S

                              ----------                              
                                                                   Page
Brinkman, William................................................   353
Geiser, David....................................................     1
Hoffman, P. A....................................................   143
Johnson, Kristina................................................   143
Koonin, Steven...................................................   353
Majumdar, Arun...................................................   353
Markowsky, James.................................................   143
Triay, Ines......................................................     1
Zoi, Cathy.......................................................   143

                                  
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