[Senate Hearing 111-385]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-385

                 CLEAN ENERGY RESEARCH AND DEVELOPMENT

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                                   TO

    RECEIVE TESTIMONY ON THE RESEARCH, DEVELOPMENT, PRIORITIES, AND 
    IMPERATIVES NEEDED TO MEET THE MEDIUM- AND LONG-TERM CHALLENGES 
                     ASSOCIATED WITH CLIMATE CHANGE

                               __________

                            JANUARY 21, 2010


                       Printed for the use of the
               Committee on Energy and Natural Resources





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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

BYRON L. DORGAN, North Dakota        LISA MURKOWSKI, Alaska
RON WYDEN, Oregon                    RICHARD BURR, North Carolina
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana          SAM BROWNBACK, Kansas
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
ROBERT MENENDEZ, New Jersey          JOHN McCAIN, Arizona
BLANCHE L. LINCOLN, Arkansas         ROBERT F. BENNETT, Utah
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
EVAN BAYH, Indiana                   JEFF SESSIONS, Alabama
DEBBIE STABENOW, Michigan            BOB CORKER, Tennessee
MARK UDALL, Colorado
JEANNE SHAHEEN, New Hampshire

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel










                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Chu, Hon. Steven, Secretary, Department of Energy................     3
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     3

                                APPENDIX

Responses to additional questions................................    53

 
                 CLEAN ENERGY RESEARCH AND DEVELOPMENT

                              ----------                              


                       THURSDAY, JANUARY 21, 2010

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:01 a.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Jeff 
Bingaman, chairman, presiding.

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

    The Chairman. OK, why don't we get started.
    Today's hearing will examine the role of research and 
development in meeting the medium- and long-term goals 
associated with our energy challenges and with climate change.
    The discovery of new science and the invention of new 
technologies is the major engine of economic growth in our 
time. Our investments in new energy technologies, and the 
science underlying those technologies, has been surprisingly 
deficient over the last 20 years.
    We can measure this deficiency in a couple of ways. One 
traditional way of looking at research and development 
investment in a given industrial sector is to compare them to 
the overall sales of products in that sector. If we use this 
measure, our national research and development investments in 
medicine and biotechnology, as a percentage of sales, are about 
40 times greater than our research and development investments 
in energy.
    Another way to see the deficiency in energy related 
research is to look at Federal expenditures. We have a chart 
here. Let me have someone--Rose can hold that up. This is 
Federal research and development budget authority, by budget 
function. You can see the dotted line--or maybe you can't from 
where people are sitting--but the dotted line that goes down at 
the bottom is the one that relates to energy. This chart is 
part of a report just released by the National Science 
Foundation, shows how Federal investments in energy have 
compared to other areas of research and development. You can 
see energy technology funding and energy-related basic science 
are the 2 lines at the bottom of the chart.
    The need for an adequate funding policy for energy science 
and technology is a very important topic. Secretary Chu is here 
to talk about this issue with us today. I want to thank him for 
appearing before the committee to focus our attention on this.
    The disparity, between the importance of this funding and 
what we actually have been investing, is highlighted by the 
issue of climate change. Various legislative proposals before 
Congress require domestic greenhouse gas emission reductions of 
up to 20 percent below 2005 levels in 2020, and the figure of 
8-percent cuts below 2005 levels in 2050.
    In this fiscal year 2010 budget blueprint and during the 
2008 Presidential campaign, President Obama addressed the need 
to stimulate new technology across a variety of sectors by 
proposing that we spend 15 billion annually for each of the 
next 10 years in the area of research and development to meet 
these reduction targets.
    The President's belief that we need a strong technology 
development effort over the long haul matches up with a recent 
report that the National Academy of Sciences, the National 
Academy of Engineering issued entitled ``America's Energy 
Future.'' The Academies concluded that meeting long-term goals 
to reduce greenhouse gas emissions will require a 
transformation in the way we produce and transmit and consume 
energy. They found that the needed transformation will only 
come about through sustained research and funding.
    The need for a whole suite of new energy technologies is 
also being taken seriously by our international competitors, 
such as Japan. Here is a chart that I've shown before in the 
committee. This is one the Japanese have prepared, called 
Japan's Cool Earth 50 Program, which is a coordinated effort 
between government and industry to develop a global lead in the 
export of energy technologies that minimize carbon dioxide 
emissions. Japanese see these technologies as being essential 
to their future economic well-being and to job creation in 
their country.
    With all this as background, it is troubling that some of 
the current legislative proposals before Congress to address 
climate change give relatively low emphasis to providing 
funding for this needed science and technology. The purpose of 
our hearing today is to highlight the need to deal with this 
issue.
    Secretary Chu is ideally qualified, both technically and 
with his policy expertise, on these important issues. We look 
forward to having him discuss his vision of the research and 
development efforts that'll be needed over the longer term to 
meet the challenges associated with climate change.
    I recognize that the Secretary has a great many issues that 
he's responsible for in the Department of Energy. In addition 
to his responsibilities for research and innovation, we will be 
having Secretary Chu back before our committee in 2 weeks, on 
February 4, to testify on the Department's budget request for 
fiscal year 2011 and to answer questions on the full range of 
issues under DOE's purview. We are also planning a hearing for 
February 9 on the status of the Department of Energy's Loan 
Guarantee Program.
    Given these other oversight opportunities that we have here 
in the committee, I hope we can maintain a focus this morning 
on an--on the important issue of energy science and technology 
and its role in responding to the challenges of climate change 
and our energy challenges.
    Let me defer to Senator Murkowski for her comments.

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman.
    I appreciate the opportunity this morning to look at the 
medium- and the long-term prospects for technology to address 
our climate change issues.
    I welcome you, Secretary Chu, back to the committee. I 
appreciate the time that you're giving us and the focus that 
you have placed on so many important issues.
    As we look to reduce our greenhouse gas emissions and 
develop cleaner energy technologies, I've been consistently 
saying that we need to look at all the technologies that are 
available, not just a select few. We recognize that a great 
deal of focus has been on our renewable energy sources, a great 
deal of attention from the government funding, and the stimulus 
bill certainly attests to that. But, the sources which we 
actually use for 85 percent of our energy should not be 
ignored: oil, coal, natural gas. These will continue to be 
primary sources of energy in our Nation for years to come.
    I look forward to hearing from Mr. Secretary regarding what 
the Department is doing to advance the efficiency and the 
technology. I'm very pleased this morning to actually be 
reading, in the Energy Daily, an article that indicates that 
you are looking to support additional funding for fossil energy 
projects. You're quoted as stating that, ``We're also asking 
again for additional loan authority for fossil energy projects 
in order to provide that critical balance.'' It is clear to me 
that there is an appreciation for all of our sources within the 
energy portfolio.
    I'm also interested in learning more about the medium- and 
long-term prospects for nuclear energy, which, as we know, 
doesn't produce any greenhouse gas emissions. What is the 
status in resolving what to do with our spent nuclear fuel? 
What progress have we made in the past year on this issue? I 
think we recognize that these are very important pieces of the 
puzzle as we work to reduce our emissions.
    I look forward to hearing from you this morning, Mr. 
Secretary, on these topics and other ways that we can address 
climate change through technology, research, and development.
    The Chairman. Secretary Chu, we're glad to have you here. 
Please, go right ahead.

 STATEMENT OF HON. STEVEN CHU, SECRETARY, DEPARTMENT OF ENERGY

    Secretary Chu. Thank you, Chairman Bingaman, Ranking Member 
Murkowski, members of the committee. Thank you, for the 
opportunity to testify today.
    For the past several months, Congress has considered 
various bills--energy bills, including comprehensive--energy 
bills, including comprehensive energy and climate legislation. 
As part of that process, industries and groups have spoken up 
to promote and defend their interests. I'm concerned, however, 
that an important part of this discussion has been missing and 
that we've not adequately focused on the importance of research 
and development of new energy technologies. Today, I'm here to 
speak up for clean energy R&D.
    Investment in energy R&D will drive innovation across the 
economy and maintain America's competitiveness. It will create 
jobs and entire new industries. It's vital for meeting the 
energy and climate challenge.
    We have many technologies in hand today to begin a 
transition to a low-carbon economy, and we're accelerating that 
work through the Recovery Act. We also need breakthroughs and 
better technologies to make the steep reductions in greenhouse 
gas emissions that we need.
    Economics of R&D investments have been well studied, 
beginning with the Nobel-prizewinning work of Robert Solow. Dr. 
Solow showed that increases in productivity were ultimately due 
to technology development, and that this development occurs 
through the acquisition and application of knowledge.
    Several years ago, I was a member of the committee that 
produced the National Academies' report, ``Rising Above the 
Gathering Storm.'' As our report stated, ``Since Solow's 
pioneering work, the economic value of investing in science and 
technology has been thoroughly investigated. Published 
estimates of the return on investment for publicly funded R&D 
range from 20 to 67 percent.''
    Let me stress that we are talking about an annual rate of 
return on investment. I personally would be delighted to get 5 
and 8 percent return per year, but never mind.
    What has been the return on investments in the DOE in the 
past? There's a 2001 study by National Academy of Sciences 
entitled, ``Energy Research of DOE: Was It Worth It?'' The 
study looked at the impact of 22 billion in investments on 
energy efficiency and fossil energy research from 1978 to 2000 
by investigating in detail impacts of a few specific 
technologies supported by these investments. It found that most 
of the cases studied did not yield significant benefits within 
the timeframe of this study. This is what you'd expect from an 
R&D program, since the full benefits are often realized over 
decades. But, a few of the investments in energy efficiency 
were stunningly effective. In particular, an investment of only 
$12 million in a few key energy-efficiency technologies--
advanced refrigerators, compact fluorescent light bulbs, heat 
reflecting glass--helped lead to $30 billion in benefits for 
the American people.
    Let me give you another recent example of the benefits of 
DOE research. The Department was an early funder of the 
A123Systems battery company. In 2001 and 2003, A123 received 
small business innovation research grants totaling $850,000 to 
test and refine its cutting-edge lithium ion battery 
technology. Since then, A123 has raised more than $100 million 
in private capital, and its customers now include several 
automakers working on hybrid and electric vehicles.
    Today, 98 percent of the batteries that power American's 
hybrid cars are made in Asia. But, thanks in part to the 
Recovery Act, A123 is now building a new plant in Michigan that 
will increase the company's battery manufacturing capability to 
a level that can supply 24,000 plug-in hybrid electric vehicles 
with 15-kilowatt-hour battery systems per year. This will 
create or save roughly 5,400 jobs nationwide while giving the 
United States a foothold in a key growth industry.
    The administration understands the urgent need for more 
scientific research, and plans to double the Federal investment 
in key R&D agencies. With our precious research dollars, the 
Department of Energy is seeking breakthroughs such as the 
following: gasoline and diesel-like biofuels generated from 
lumber waste, crop waste, solid waste, and nonfood crops; 
automobile batteries with 3 times today's energy density, that 
can survive 15 years of deep discharges; photovoltaic solar 
power with fully installed costs, four times cheaper than 
today's technology; computer design tools for commercial and 
residential buildings that will enable dramatic reductions in 
energy consumption, with investments that will pay for 
themselves in less than 10 years; large-scale energy storage 
systems so that variable renewable energy sources, such as wind 
and solar power, can become baseload generators.
    In addition to our base programs, the Department has 
launched a broad research strategy that begins by drawing upon 
the credible resources of our National Laboratories and 
universities. With the help of Congress and this committee, the 
Department is also pursuing 3 new complementary approaches to 
marshal the Nation's brightest minds to accelerate energy 
breakthroughs.
    The first approach is the Energy Frontier Research Centers, 
which are multiyear, multi-investigator scientific 
collaborations focused on overcoming known hurdles in basic 
science.
    The second approach is the Advanced Research Projects 
Agency-Energy, or ARPA-E. ARPA-E uses highly entrepreneurial 
funding model to explore potentially transformative 
technologies that are too risky for industry to fund. We've 
already funded several extremely exciting projects, including a 
liquid metal battery that could offer grid-scale energy 
storage; a new wind turbine that can achieve higher 
efficiencies with smaller size; and a new approach to carbon 
capture, inspired by an enzyme used in the human body.
    The third novel funding approach, Energy Innovation Hubs, 
will establish larger, highly integrated teams working to solve 
priority technology challenges. This work spans from basic 
research to engineering development so that the ideas can be 
quickly commercialized. With this approach, we are taking a 
page from America's great industrial laboratories in their 
heyday. Their achievements, from the transistor to information 
theory that makes modern telecommunications possible, are 
evidence that we can build creative, highly integrative 
research teams that accomplish more faster than researchers 
working separately. The Hubs are expected to begin work in 
2010, and will be fully operational by 2011.
    Today, the Department of Energy has assembled, and 
continues to recruit, a team of extraordinary talented 
individuals with technical depth and breadth. The shared 
camaraderie of this team is also beginning to break down 
decades of stovepipe thinking.
    We're changing the way we do business at the DOE. As an 
example, in order to identify the best possible reviewers for 
the first round of ARPA-E proposals, I wrote a letter to many 
of the presidents of our research universities, asking for the 
names of their best scientists and engineers. We then called 
upon those people to help review the proposals, arguing that 
they should help us as part of their patriotic duty. We were 
able to review 3,700 applications, conducting over 4.2 person-
years of work in a few short weeks. That fact, the fact that we 
could only fund 1 percent of the applications, speaks volumes 
that additional research support would be money well spent.
    To achieve our energy and climate goals, we need strong and 
sustained commitment to research and development. I can assure 
you that I will do everything in my power to ensure that the 
Department of Energy will use these resources wisely.
    I urge this committee and the Senate to look closely at 
this issue in the coming months, and I look forward to working 
with you on it. I'm pleased to take any questions at this time.
    [The prepared statement of Secretary Chu follows:]
 Prepared Statement of Hon. Steven Chu, Secretary, Department of Energy
    Chairman Bingaman, Ranking Member Murkowski, Members of the 
Committee, thank you for the opportunity to testify today.
    For the past several months, Congress has considered various energy 
bills, including comprehensive energy and climate legislation. As part 
of that process, industries and groups have spoken up to promote and 
defend their interests. I am concerned, however, that an important part 
of this discussion has been missing. I am concerned that we have not 
adequately focused on the importance of research and development of new 
energy technologies. Today, I am here to speak up for clean energy R&D.
    Investment in energy R&D will drive innovation across the economy 
and maintain American competitiveness. It will create jobs and entire 
new industries. And it is vital for meeting the energy and climate 
challenge. We have many technologies in hand today to begin a 
transition to a low-carbon economy, and we are accelerating that work 
through the Recovery Act. But, over the long-term, we will need 
breakthroughs and better technologies to make the steep reductions in 
greenhouse gas emissions we need.
    The economics of R&D investments have been well-studied, beginning 
with the Nobel Prize-winning work of Robert Solow. Dr. Solow showed 
that increases in productivity were ultimately due to technology 
development and that this development occurs through the acquisition 
and application of knowledge.
    Several years ago, I was a member of the committee that produced 
the National Academies Report ``Rising Above the Gathering Storm.'' As 
our report stated: ``Since Solow's pioneering work, the economic value 
of investing in science and technology has been thoroughly 
investigated. Published estimates of return on investment for 
publically funded R&D range from 20 to 67%.'' Let me stress that we 
were talking about an annual rate of return on investments.
    What has been the return on investments in the DOE been in the 
past? There was a 2001 study by the National Academies of Science 
entitled ``Energy Research at DOE: Was It Worth It?'' The study looked 
at the impact of $22.3 billion in investments in energy efficiency and 
fossil energy research from 1978 to 2000 by investigating in detail the 
impacts of few specific technologies supported by these investments. It 
found that, while most of the cases studied did not yield significant 
benefits within the timeframe of the study, a few of the investments in 
energy efficiency were stunningly effective--just what you would expect 
from an R&D program. In particular, an investment of $12 million in a 
few key energy efficiency technologies--advanced refrigerator and 
freezer compressors, electronic ballasts for fluorescent lamps, and 
low-emissivity glass--helped lead to $30 billion in benefits for the 
American people.
    Let me give you another recent example of the benefits of DOE's 
research efforts. The Department was an early funder of the A123Systems 
battery company. In 2001 and 2003, A123 received Small Business 
Innovation Research grants totaling $850,000 to test and refine its 
cutting-edge lithium-ion battery technology. Since then, A123 has 
raised more than $100 million in private capital, and its customers now 
include several automakers working on hybrid and electric vehicles. In 
2009, A123 went public in the biggest IPO of the year.
    And this success story does not end there. Today, 98 percent of the 
batteries that power America's hybrid cars are made in Asia. But, 
thanks in part to a Recovery Act grant, A123 is now building a new 
plant in Michigan that will increase the company's battery 
manufacturing capacity to a level that can supply 24,000 plug-in hybrid 
electric vehicles with 15kwh battery systems per year. This will create 
or save roughly 5,400 jobs nationwide, while giving the U.S. a foothold 
in a key growth industry.
    It is imperative that government provide R&D funding, especially at 
the front end when private investments would not recoup the full value 
of the shared social good or when a new technology would displace an 
embedded way of doing business. As the National Economic Council 
recently stated: ``certain fundamental investments and regulations are 
necessary to promote the social good. This is particularly true in the 
case of investments for research and development, where knowledge 
spillovers and other externalities ensure that the private sector will 
under-invest--especially in the most basic of research.'' Federal R&D 
investment also builds the human, physical, and technological capital 
needed to perform breakthrough research and to transfer those 
innovations to the market.
    The Administration understands the urgent need for more scientific 
research and plans to double the federal investment in key R&D 
agencies. Additionally, the Recovery Act gave the Department of Energy 
significant new research funding.
    With our precious research dollars, the Department of Energy is 
seeking breakthroughs such as the following:

   Gasoline and diesel-like biofuels generated from lumber 
        waste, crop wastes, solid waste, and non-food crops;
   Automobile batteries with three times today's energy density 
        that can survive 15 years of deep discharges;
   Photovoltaic solar power with a fully installed cost four 
        times cheaper than today's technology;
   Computer design tools for commercial and residential 
        buildings that enable reductions in energy consumption of up to 
        80 percent with investments that will pay for themselves in 
        less than 10 years; and
   Large scale energy storage systems so that variable 
        renewable energy sources such as wind or solar power can become 
        base-load power generators.

    In addition to our base programs, the Department has launched a 
broad research strategy that begins by drawing upon the incredible 
resources of our National Laboratories. With the help of Congress and 
this Committee, the Department is also pursuing three new, 
complementary approaches to marshal the nation's brightest minds to 
accelerate energy breakthroughs.
    The first approach is the Energy Frontier Research Centers, which 
are multi-year, multi-investigator scientific collaborations focused on 
overcoming known hurdles in basic science.
    The second approach is the Advanced Research Projects Agency-Energy 
(ARPA-E). ARPA-E uses a highly entrepreneurial funding model to explore 
potentially transformative technologies that are too risky for industry 
to fund. We have already funded several extremely exciting projects, 
including a liquid metal battery that could provide grid-scale energy 
storage, a new wind turbine that can achieve higher efficiencies with a 
smaller size, and a new approach to carbon capture inspired by an 
enzyme used by the human body to capture and transport carbon dioxide 
generated in our cells during metabolism to the lungs where it is 
exhaled.
    The third novel funding approach, Energy Innovation Hubs, will 
establish larger, highly integrated teams working to solve priority 
technology challenges. This work spans from basic research to 
engineering development so that the ideas can be quickly 
commercialized. With this more proactive approach to managing research, 
we are taking a page from America's great industrial laboratories in 
their heyday. Their achievements--from the transistor to the 
information theory that makes modern telecommunications possible--are 
evidence that we can build creative, highly-integrated research teams 
that can accomplish more, faster, than researchers working separately.
    The Hubs will tackle three of the most important energy challenges 
we face: How can we derive fuels directly from sunlight in an efficient 
and economical way? How can we design, construct and retrofit 
commercial and residential buildings that are vastly more energy 
efficient than today's buildings? How can we use modeling and 
simulation technologies to make significant leaps forward in nuclear 
reactor design and engineering? The Hubs are expected to begin work in 
2010 and will be fully operational by 2011.
    I am extremely excited about these programs, as well as the 
Department's other research and development efforts. Today, the 
Department of Energy has assembled, and continues to recruit, a team of 
extraordinary talented individuals with technical depth and breadth. 
The shared camaraderie of this team is also beginning to break down 
decades of stove-piped thinking.
    We are changing the way we do business at the DOE to improve 
customer responsiveness and the quality of our selection of competitive 
grants. As an example, in order to identify the best possible reviewers 
for the first round of ARPA-E proposals, I wrote a letter to many of 
the Presidents of our research universities to ask for the names of 
their best scientists and engineers. We then called upon those people 
to help review the proposals, arguing that they should help us as part 
of their patriotic duty. The technical community responded heroically 
and we were able to review 3,700 applications, conducting over 4.2 
person years of work, in a few short weeks. That fact that we could 
only fund 1 percent of the applications speaks volumes that additional 
research support would be money well spent.
    To achieve our energy and climate goals, we need a strong and 
sustained commitment to research and development. These investments are 
needed for our country's future economic prosperity, energy security, 
and environmental sustainability. I can assure you that I will do 
everything in my power to ensure that the Department of Energy will use 
these resources wisely.
    I urge this committee and the Senate to look closely at this issue 
in the coming months, and I look forward to working with you on it. I'm 
pleased to take any questions at this time.

    The Chairman. Thank you very much, Mr. Secretary.
    Let me start with a few questions. One obvious issue--I 
think those of us who've tried to understand some of these 
climate change proposals--one issue that's become clear to me 
is that the cap-and-trade proposals that have been put out 
there would have much more impact on certain sectors in 
reducing emissions than they would on other sectors. For 
example, although a third of our emissions, approximately, come 
from the transportation sector, most experts I've heard from 
indicate that putting a price on carbon is not going to 
substantially affect action in the transportation sector to 
reduce those emissions. Or at least it's not going to affect it 
to near the extent that it will affect action in the electric 
power sector, for example.
    It has struck me that if this is the case, then we are back 
to trying to find other policy initiatives to deal with the 
emissions from the transportation sector. That's where work 
through the Department of Energy, through research grants, 
might be particularly focused. Does that make sense, as a way 
to think about where the resources should be focused, where the 
efforts should be focused, as it relates to reduction of 
greenhouse gas emissions?
    Secretary Chu. Yes, I agree with you. Let me just say that 
any price that we can conceivably think of putting on carbon in 
the foreseeable future, in the coming decades, would not be 
enough of a price signal. The transportation sector is the most 
difficult. So, it has to be multipronged.
    No. 1, we should continue to improve the efficiency of our 
automobiles--not only our personal-vehicle automobiles, but 
heavier trucks--and, in fact, all in the transportation 
sector--trains, as well. For that reason, we are starting 
programs, very aggressive programs. We think we can, for 
example, in long-haul trucking, reduce the energy consumption 
by 30 percent. That would be a very big deal. Automobiles, we 
can continue to improve the mileage standards.
    The other thing is the electrification of short-range 
personal vehicles. People who live in cities and suburbs, 
surveys show that quite often they don't drive more the 50 
miles a day. That means that plug-in hybrids become an 
acceptable means--or you can carry your conventional fuel tank 
for longer trips. So, the key thing there is the battery, and 
we are investing heavily on developing the battery technology. 
As I said in my testimony, we think we can make batteries that 
are 2, 3 times higher energy density and that can last the 
lifetime of the car.
    The other thing is, How do you transition away from 
traditional fuels made from oil? That's a research program. I 
think there are many exciting things that have just come out, 
in the last 5 or 10 years, both in using agricultural waste or 
growing energy crops and converting them into, not only 
ethanol, but fuels that could be direct substitutes for 
gasoline, diesel fuel, and jet fuel.
    We are also looking at ways, in gasifying material that can 
even be blended with carbon resources, where you capture the 
excess carbon dioxide from these processes, sequester it, and 
there's a estimate that says if 40 percent of the feedstock 
would be biofuels, it becomes a net sync of carbon. You take 
the plants that have grabbed the carbon dioxide out of the air, 
you turn them into a biofuel, you loose that with coal--you can 
think of coal as being the energy source--take all the excess 
carbon dioxide in the refining process, put it underground, and 
now you've got a fuel that's at zero carbon.
    So, there are many ways. But, you are right, the 
transportation sector is the most difficult one, and it 
requires more research and development.
    The Chairman. Let me stop with that.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Secretary, I would like to focus my questions this morning 
on nuclear and the potential that it has as we look to reduce 
our emissions.
    It's been reported that the White House has sought to 
restrict what type of research that DOE can conduct on future 
nuclear reactors, whether it's the fast reactor or activities 
associated with the smaller reactors. I'd like you to comment 
on this. If it is accurate, how does this impact the role of 
nuclear as we attempt to meet our energy needs and as we reduce 
our emissions?
    Secretary Chu. I think the White House--I don't ``think''--
the White House is supportive of nuclear. We see this as part 
of the solution. Right now, 20 percent of our electricity is 
generated by nuclear. We would, as a minimum, like to maintain 
that, possibly grow that. For that reason, we are working 
aggressively to help restart the American nuclear industry with 
loan guarantees, with research in the out years that could lead 
to more advanced, safer nuclear power.
    So, you know, I think there may be--well, let me just say, 
that is the policy of the administration. The details are still 
being worked out as to how one advances it.
    Senator Murkowski. It is possible, to have some limitation 
or a directive that says, ``Don't go down the path of the 
smaller modular''and I'm just using that as an example. I'm 
trying to understand whether it is endorsement of all nuclear 
as a broader policy or whether, within the administration, 
we're trying to pick winners and losers within the nuclear 
portfolio.
    Secretary Chu. What we in the Department of Energy are 
trying to do is make our best technical assessment--and it's a 
bit of crystal-ball-looking--but the best technical assessment 
of what could be productive. But, because it's research, you do 
not want to down-select. So, you're, I think, referring to a 
snippet in a time of discussion where things have not been 
finalized. So, this is a work in progress.
    Senator Murkowski. You went into some detail about the 
ARPA-E projects. I understand that the initial recipients for 
the ARPA-E funding represented a wide variety of energy 
technologies, but nuclear energy was not part of that. Did the 
Department receive any proposals for advanced nuclear energy 
technologies?
    Secretary Chu. You know, in all honesty, I don't know 
whether we did or not. I'm just, kind of, mentally thinking 
back on it. It was--if we did, it was a very, very small 
fraction.
    Senator Murkowski. Would you support them if they were to 
come in?
    Secretary Chu. It depends on what they were. I think, you 
know, when we support only 1 percent of the proposals, it's a 
very deep cut. But, there is a slight difference. I could say--
what we are looking for in ARPA-E is something where the 
funding cycle is very short--2, 3 years. Then, after 2 or 3 
years, either you get funding from a different part of an 
agency--a different part of the DOE or some other agency, or 
you get private-sector support. So, many of the things that are 
nuclear really will take a 10-, 20-year funding-cycle 
stability. So, if there are things which are wild, crazy ideas 
that you could say, ``OK, this could lead to sustained support 
from the Nuclear Energy Program of the DOE,'' we would look at 
it.
    Senator Murkowski. OK. Let me ask about how we deal with 
the whole issue of waste. We recognize that decades ago, the 
National Academy of Sciences concluded that some form of 
geologic repositories is going to be necessary for the ultimate 
disposal, whether it's the direct disposal of the used nuclear 
fuel or whether it's the reprocessing.
    Does the administration agree that ultimately we're going 
to have some form of geologic repository?
    Secretary Chu. Yes.
    Senator Murkowski. Then, more specific to this Blue Ribbon 
Commission, when is the administration intending to convene the 
panel to figure out what the path forward is going to be on 
disposition?
    Secretary Chu. Unfortunately, I've been saying for several 
months, ``soon,'' sometimes ``very soon.'' I still go back to 
saying ``very soon.'' These things are complicated issues, 
there are a lot of stakeholders, and--but----
    Senator Murkowski. At this point in time, there's no 
immediate plan to convene?
    Secretary Chu. All I can say is, stay tuned. We, in the 
Department of Energy and the administration, are working hard 
to push this thing forward as fast as possible, to convene the 
committee within a reasonably short timescale. So, you know, 
there are vetting issues. There are all sorts of things that--
but we're in the final stages of that.
    Senator Murkowski. I think it is one of those issues that 
we look at what the administration has declared as, ``This is 
how we're going to define this path forward.'' I think there 
has been some frustration. I appreciate that it takes a while 
to get a panel in place. However, we would all like to see that 
convene sooner.
    Secretary Chu. I agree with you.
    Senator Murkowski. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Senator Dorgan.
    Senator Dorgan. Mr. Chairman, thank you very much.
    Dr. Chu, thank you for all of your work. I know that you 
and Matt Rogers and your entire agency are hard at work trying 
to evaluate how to best invest the $36 billion that came your 
way from the Economic Recovery Act. I want to ask you about 
that in just a moment.
    First, let me ask you about this issue--50 percent of our 
electricity comes from coal, and we're not going to transition 
away from that 50 percent quickly, if ever. The question is, 
How do we fund the research now that's necessary over the 
longer period to find ways to decarbonize the use of coal?
    There are a lot of estimates about what that will cost. I'm 
pretty convinced that we can do that, and actually find ways to 
use carbon. You can create fuel from carbon and find beneficial 
uses of carbon. But, there are suggestions about direct 
appropriations, loan guarantees, tax credits, and wires 
charges. What's your assessment of how we accumulate the 
funding and how much funding is necessary in the next 10 20, 
and 25 years to be able to effectively be able to use the most 
abundant resource and decarbonize its use?
    Secretary Chu. I think all those things are necessary. They 
would help. As you know, the Department of Energy funds not 
only the research that will look into improving technologies 
that we have--improving the amine process, improving cold 
ammonia, looking to improve the gasification process--but we 
are also looking, further down the road, at things that really 
upend it and replace those.
    You spoke about using coal for transportation fuel. Is 
there a way we can do that, that actually decreases the net 
carbon footprint significantly below that of using oil for 
gasoline? I think the answer is, ``We can do that.'' So, if 
it's possible to do that, that would be great. So, we would 
have a significant reduction in our production and use of 
transportation fuel, as coal's a resource. Is this is a 
possibility? There are many things like that.
    I've said quite often, and believe deeply, that the United 
States has an opportunity to show leadership in this area. If 
we do develop the leadership in this area, this is something 
that we can actually export, as well.
    Now, let me say that there is one thing--we need a long-
term signal. Some of these investments--we--the Federal 
Government can give a lot in R&D and technical research 
incentives and things like that, but, on the flip side, the 
industry has to get a long-term signal that says, ``There's 
going to be,'' for example, ``a limitation of carbon that will 
ratchet down,'' so that they, too, can get serious about it. 
So, it's not a little slipstream experiment; it's, ``We're 
going to have to make it work, let's begin to think about our 
long-term investments.''
    Right now, from utility companies on, there's a lot of 
money sitting on the sidelines, wanting to know, ``When is this 
going to happen?'' It's more, ``When is it going to happen?'' 
not ``if it's going to happen.'' But, it's money sitting on the 
sidelines. Since it's money sitting on the sidelines, that's 
money not invested, which means jobs not created.
    Senator Dorgan. If there are those in the industry that are 
not yet serious, they are making a very big mistake.
    Secretary Chu. I agree.
    Senator Dorgan. So, I think almost everybody understands 
where we're headed. We're headed toward a lower carbon future.
    Secretary Chu. Right.
    Senator Dorgan. We need to find ways to achieve that.
    You described several things that you've done in ARPA-E, I 
think, selecting 1 percent of the proposals. Could you have 
someone, in plain English, send us something that's 
understandable about the areas of inquiry? I'm very interested 
in them, but I know they are complex and interesting and 
fascinating. Would you be willing to send us a little white 
paper about what you're funding and why you're funding----
    Secretary Chu. Sure.
    Senator Dorgan [continuing]. These specific areas, just so 
we get a sense of what ARPA-E is going to provide us?
    [Information referred to follows:]

      
    
    

    Senator Dorgan. I'm very excited about that.
    Finally, regarding the $36 billion in programmatic and loan 
guarantee funding that you got through the recovery program. I 
see 2 issues in front of us with energy. One is energy 
security, with 70 percent of our oil coming from other 
countries--we have a need for greater energy security. The 
second is the need to address climate change in a thoughtful 
and appropriate way.
    How are you using this $36 billion with respect to those 2 
goals? How do you see those 2 goals, with respect to your 
opportunity to invest a great deal of money, more than any 
Energy Secretary in the history of America, in pursuit of those 
2 goals?
    Secretary Chu. In terms of energy security, we are looking, 
as I said, at this multipronged attack at driving the 
efficiency up in the automobile sector, which will also help 
the automobile industry take a leadership role in the most 
efficient, highest-technology vehicles in the world. That's a 
very important part; and the biofuels aspect of it, to start to 
partially substitute our fuel with agricultural wastes. 
Electrification.
    I think the other thing that we're also trying to do is--as 
you know, we have a large loan guarantee program; and, because 
of the still-frozen credits, this is a big stimulus in order to 
get some of the things that will help the United States take a 
leadership position in this new energy economy. We are 
aggressively standing up that program.
    Part of the issue is, we started with very few people at 
the beginning of this year, 16 employees, now we have 50. We 
went from zero loans to--if you include the automobile 
manufacturing loans and the others, nine conditional loans; and 
we've got a few dozen more in the pipeline. We just hired a 
person, this last fall, Jonathan Silver, a very, very good 
person. We're looking hard at streamlining all those processes.
    We constantly talk about this opportunity and this--not 
only opportunity, but this responsibility. If you look at what 
the Department of Energy has today, and what its charge is, we 
see ourselves as a major innovator in the United States, not 
only for energy, but largely, in the future, for a lot of our 
economic prosperity--from the loans, from the basic fundamental 
research that will help us solve the energy problems, to the 
applied research, to helping pilot and deploy, to loans. This 
is all within the Department of Energy, and this is, I think, a 
key. If we do this right--and we are very determined to do this 
right--this will be a key to American prosperity.
    The Chairman. Senator Corker.
    Senator Corker. I know that Senator Bunning was here prior 
to me, so----
    The Chairman. Oh----
    Senator Corker [continuing]. I'm going to----
    The Chairman [continuing]. Were you here before? I was 
given a list.
    Senator Bunning. You were busy.
    The Chairman. No, I was given a----
    Senator Corker. Yes.
    The Chairman [continuing]. List that had Senator Corker 
first, but if you're--you were here first, go right ahead.
    Senator Corker. No, no, no. Go ahead, Senator.
    Senator Bunning. Thank you.
    I would like to get back to what Senator Murkowski was 
pursuing on nuclear. Is it my understanding, what you said 
about nuclear, that we would like to maintain our 20-percent 
production of electricity from nuclear power, and try to expand 
on it?
    Secretary Chu. Yes.
    Senator Bunning. Do you know how long the nuclear power 
industry has been on the sidelines?
    Secretary Chu. I think the last powerplant that was 
completed and put online--was started sometime in the early/
middle 1970s.
    Senator Bunning. OK. Just so I'm starting from the same 
point. I want to be--make sure that you and I are on the same 
starting line.
    Isn't it time--not only that this administration and other 
administrations have just failed to pursue nuclear power as an 
alternative--when we, in fact, are--if we want a green energy 
production of electricity, particularly electricity, that that 
is the prime source of doing it?
    Secretary Chu. I would agree with you, that it is a very 
important part of the energy portfolio we will need in the 
coming century in order to decrease our carbon footprint. I 
agree with that.
    Senator Bunning. OK. If you agree with that, then why do we 
drag our feet in licensing, assisting with the moneys 
available, in pursuing a technology, not only that exists, but 
that will exist in the future, on nuclear energy?
    Secretary Chu. I wouldn't characterize as dragging of feet. 
For example--first, the licensing is an NRC responsibility, but 
the Nuclear Regulatory Commission is working toward 
streamlining the licensing procedures. In the----
    Senator Bunning. Do you know how long----
    Secretary Chu. Are----
    Senator Bunning. I've been on the Energy Committee for 12 
years, and I've heard that same story from everybody who's sat 
in your seat.
    Secretary Chu. All I can say is, what I know is that before 
they were--in the 1970s and before, they were licensing each 
reactor as a entirely new separate project.
    Senator Bunning. But, we know, since 1970, the nuclear 
power energy improvements have been vast and varied. If a 
country like France, who I don't think--consider a very 
progressive country, can produce 80 percent of their power from 
nuclear energy, and can--and we are stuck at 20, there's a gap 
there that we ought to be able to make up considerable time in 
a short period rather than delay and delay, through licensing 
and roadblocks to nuclear power. If we're going to have a 
greener America, nuclear power has got to be at the top of the 
list.
    Secretary Chu. I don't think we have a disagreement here. 
I--as you well know, I'm very supportive of nuclear power. We 
are working very hard, in the Department of Energy, to get out 
these loans. They're big, complicated instruments, but that has 
occupied a lot of my time personally, and time of the top 
people.
    Senator Bunning. One other statement you made, ``I just 
want to confirm the administration's commitment to research and 
development for carbon capture and storage.'' Was I accurate 
when I heard your statement?
    Secretary Chu. Yes, that----
    Senator Bunning. So, the----
    Secretary Chu [continuing]. That we are----
    Senator Bunning [continuing]. Administration----
    Secretary Chu [continuing]. Committed----
    Senator Bunning [continuing]. Is continuing to do that.
    Secretary Chu. Yes.
    Senator Bunning. Is going to continue to do it.
    Secretary Chu. That is correct.
    Senator Bunning. OK. Thank you.
    The Chairman. Senator Sanders.
    Senator Sanders. Mostly, I want to know why Jim Bunning 
doesn't like France.
    [Laughter.]
    Senator Sanders. But, on another subject.
    Mr. Secretary, first of all, congratulations on the work 
that you are doing. I agree with what the President has said, 
and I think you have said, that we are in a transformational 
moment. It is, to me, basically insane that we are importing, 
every single year, $350 billion worth of oil from abroad, when 
we are sitting on technologies that can make us energy 
independent and substantially cut back on greenhouse gas 
emissions. I think that is the goal that you are trying to 
achieve. Is that not right?
    Secretary Chu. That's--that is correct.
    Senator Sanders. What it is so important about that is, not 
only from a political--geopolitical point of view, but we 
create, over a period of years, millions of jobs, making our 
country energy independent and moving to energy efficiency and 
sustainable energies.
    I am--just a brief word on nuclear--my impression is, No. 
1, that this country has put more money into nuclear than any 
other form of energy.
    No. 2, that if you want new energy, you know what the most 
expensive way of getting is? Go nuclear. That's the most 
expensive way.
    No. 3, I would love to see volunteers tell us--maybe 
Kentucky, maybe other States--where we're going to put all of 
this waste. I usually don't see hands going up and saying, 
``Hey. We want all that waste.'' Nevada apparently doesn't want 
it, and maybe other volunteers can go forward.
    But, I think that the evidence is pretty strong--and I want 
the Secretary to talk about this--that if you really want to 
make this country energy independent, probably the most cost-
effective way is--going forward, is energy efficiency.
    I can tell you, Vermont is leading the country on that, and 
we have barely scratched the surface. If the whole country did 
what Vermont did--and again, I'm not here saying that we've 
done all that much--we could prevent the construction of over 
300 new coal-burning plants, with all of the greenhouse gas 
emissions.
    Now, I noticed in your paper, Mr. Secretary, you talk about 
research that would cut energy consumption of up to 80 percent 
in buildings. We have some of those in Vermont right now, but I 
see tremendous potential there. In cold-weather States like 
mine, that is just a huge savings of energy. Could you say a 
word about, in general, energy conservation?
    Let me also tell you that the stimulus package is playing a 
really good role in Vermont, putting people to work, doing just 
that.
    But, say a word on energy conservation, if you could.
    Secretary Chu. I think energy efficiency and energy 
conservation is very low-hanging fruit. A lot of it--well, is 
more than low-hanging fruit; it will actually save money. We 
are working very hard. We have put out a call for proposals in 
part of our EECBG grants, the Energy Conservation Block Grants, 
to look at how one can develop self-sustaining programs--not 
using tax dollars, but to get a mechanism in place where 
homeowners, for example, can have the confidence that they can 
say, ``If I borrow this amount of money, I will actually save 
more money''----
    Senator Sanders. Right.
    Secretary Chu.--``on my energy bills than the interest I 
have to pay on the loan. I have the confidence this will 
occur.'' That if we can start to pilot and mass produce these 
programs, it will have a life of its own.
    Senator Sanders. All right, we--I hope everyone understands 
what the Secretary is saying. Because one of the problems that 
we have, is people understand--for example, they're living in a 
home which is not energy efficient. They don't have the capital 
to make the investment. Can we work out a way, for example, 
with municipalities, with the help of the Federal Government, 
by which, by paying off, maybe, a little bit higher property 
taxes every single year, they can get an initial investment to 
make their homes more energy efficient? They are saving money, 
and, over a period of years, they're paying it back, either 
through their electric bill or through their property tax. Is 
that what you're talking about?
    Secretary Chu. That's one of the mechanisms. Another 
mechanism--we're working very closely with HUD. Secretary 
Donovan and I have signed a memo of understanding, when 
property changes hands, we're going to make energy-efficient 
mortgages part of the original mortgage, so it's a low interest 
rate. When you sell the property, the additional payments on 
the mortgage, we say, will be less than the savings of your 
energy bill. So, the homeowner should have no out-of-pocket 
expense and will immediately begin to save money and energy.
    The banks--what's in it for the banks? They can loan more 
money and have a higher rate of return.
    Senator Sanders. This is clearly a win-win situation.
    Secretary Chu. Right.
    Senator Sanders. In the brief time I have, say a word on 
what you see the potential of solar--both solar thermal and 
photovoltaics. The cost of photovoltaic has gone down fairly 
substantially recently, hasn't it?
    Secretary Chu. Yes, that's right. The photovoltaic costs, 
over the last 20 years, have gone down by more than a factor of 
10. In the last couple of years, the module itself is now less 
than $2 a watt. We're expecting, by the end of 2010 it will be 
pushing on a dollar a watt.
    Now, the fully installed costs of a module, if you put it 
on a big box top like a--you know, Kmart, Costco, one of 
those--is still about $4 a watt, installed--the full cost, the 
installation, and everything else.
    So, the module itself is now going to be a small fraction. 
We've been talking to a lot of people. about what are called 
the balance-of-cost systems--a lot of effort now is being paid 
to the converters and the inverters to make them a micro-
integrated part of the module themselves. Those things actually 
don't last as long as the module. If you do that, then there 
will be a dramatic quantum decrease in the cost and the 
reliability. So, there are things like that, which I see great 
promise.
    So, if I had to predict, in the next 3 or 4 or 5 years, I 
would expect another factor-of-2 decrease.
    Senator Sanders. Wow. Very good.
    Secretary Chu. Yes.
    Senator Sanders. Thank you very much, Mr. Secretary.
    Thank you, Mr. Chairman.
    The Chairman. Senator Corker.
    Senator Corker. Mr. Chairman, thank you.
    I appreciate my friend's comments from Vermont. I do think 
that, you know, there's probably 35-percent energy consumption 
out there that could be reduced through efficiencies. I do hope 
that we will look heavily at programs like that. I know, in the 
Tennessee Valley, TVA has said those same kinds of things. I 
hope that we can figure out ways of leveraging efficiencies.
    I also want to thank the Secretary regarding his comments 
about battery-powered vehicles. I know, in Tennessee, we're 
building a new plant there to make those batteries. Nissan just 
came out with a Nissan LEAF. I know, in Detroit, where Deb 
Stabenow's from, the Chevy Volt is getting ready to come 
online. To me, the whole vision of using baseload power, that's 
underutilized in the evenings, to charge vehicles is something 
that I hope all of us will engage in. I thank you for referring 
to that.
    I guess I will say, on the other hand, I--Mr. Secretary--
and I know Ranking Member Murkowski went down this line 
regarding the Blue Ribbon Commission--you talk about changing 
the way that the Energy Department is doing business, and 4.2 
years' worth of person-hours was put in place in a very short 
amount of time. Yet, we don't have this Blue Ribbon Commission. 
It does seem to me that, in much of our energy debate, we go 
around the world to get from A to B, when, in essence, there is 
a clean baseload energy--nuclear energy--that a Blue Ribbon 
Commission to deal with some of the issues--my friend, Bernie 
Sanders, was referring--hasn't even been appointed. It seems--
it does sort of feel, to us, that you're slow-walking the 
things that many of the folks in the White House may think are 
bad policies, and yet we've asked you to take steps to go 
forward with, and yet you're trying to go around the world to 
get to other technologies that--when, in essence, we've got a 
carbon-free, clean technology that we could do a lot with to--
reprocessingwise and others--to reduce the waste.
    I guess it makes me--I've just got to be candid--less 
trustful of the Department as it relates to that. I just don't 
understand it. I mean, it seems like, on every count, this--and 
whether--I'm going--I know the Chairman--and I appreciate--sort 
of, preempted me on loan guarantees, and I'll wait until a 
hearing to talk about that. But, nothing's really happening 
there. No Blue Ribbon Commission which is appointing people. 
We--I talked to you last week about some other issues relating 
to nuclear energy. It does feel like--that, candidly, you're 
slow-walking things that are proven, and wanting to spend lots 
of money on things that are unproven. Yet, we have an 
opportunity to really link up battery-powered vehicles with 
nuclear and do some efficiency operations that really could be 
tremendous for our country. But, instead, we're up here talking 
about $15 billion in additional research and development, 
which--by the way, I like research and development--and we 
ought to prioritize it, and maybe take it from some other area, 
if it's something that's high priority, and not add to.
    But, I wish you'd respond to that, because, as I listened 
to your testimony, your answers are not clear. You say these 
issues are difficult, but--we talk about rocket scientists; you 
know, you're kind of one of those people; you're pretty smart, 
got a lot of gray matter there. I find it difficult that you 
guys haven't figured out how to put together a Blue Ribbon 
Commission on nuclear waste.
    Secretary Chu. Senator, I can assure you that--well, for--
let me just start by saying, you know, I'm not a politician. My 
biggest asset, when I came here to Washington, was my 
credibility as a scientist. I am determined to leave Washington 
as someone who will always speak the truth and I can assure you 
that I am not slow-walking this. I am pushing as hard as I can.
    Senator Corker. When you say you're not a politician, are 
you saying that you're being interfered with by politicians 
from the White House on the----
    Secretary Chu. No.
    Senator Corker [continuing]. With the commission?
    Secretary Chu. No, no----
    Senator Corker. What are you----
    Secretary Chu [continuing]. No----
    Senator Corker. I don't----
    Secretary Chu [continuing]. No.
    Senator Corker [continuing]. Understand----
    Secretary Chu. No, no.
    Senator Corker [continuing]. The point.
    Secretary Chu. No, no. Look, these are complicated issues. 
I'm not--there are a lot of stakeholders, and there is a 
process that we have to go through----
    Senator Corker. What is complicated about putting together 
some really smart people to try to solve this problem? Are we 
lacking smart people in----
    Secretary Chu. No, we----
    Senator Corker [continuing]. Our country?
    Secretary Chu [continuing]. We are not lacking smart 
people. It's sort of like the loans, in the sense that--I 
actually read the--a very recent loan that I had to sign off 
on. You know, I actually looked at all the pages. Once you 
start to look at the details of some of these things, they 
become more complicated.
    I don't want to go into the details of why it has taken so 
long. I would say, yes, I've been frustrated that it's taking 
as long as it has, but it's about to happen. I am not doing a 
doubletalk by saying ``I am slow-walking this.''
    Senator Corker. I know my time's up, Mr. Chairman. I thank 
you for the hearing.
    I thank you for your service, and I'm thankful that you 
want to leave here with your integrity intact as a scientist. I 
would say that it seems to me that much of life is finding 
simple, elegant ways to get from A to B.
    Secretary Chu. I agree.
    Senator Corker. I feel like, listening to your testimony 
today, that's not what's happening today. I don't know what the 
outside interferences may be to keep that from occurring.
    But, I'll just close by saying this. I--you know, the--you 
and I had a great conversation the other day about climate, and 
I appreciate that conversation. I think, to the degree that 
climate enthusiasts can figure out a way of focusing on climate 
without it being a net-plus extraction from our citizens' 
pockets into your pockets or our pockets, that would be a good 
thing. It seems to me that there were a number of things said 
today that would help us move along without that occurring. 
Especially when look at transportation really not being 
affected by a price on carbon--I think everybody kind of 
understands that--and knowing that nuclear could produce a--and 
other things--could produce a lot of carbon-free energy, there 
are lots of ways we can take huge steps down that road. I'm 
glad someone as intelligent as you are helping us do that. I 
hope we'll speed it up a little bit, but I thank you for your 
testimony.
    The Chairman. Senator Stabenow.
    Senator Stabenow. Thank you very much, Mr. Chairman.
    Welcome, Secretary, it's wonderful to have you in front of 
the committee again.
    I guess, I--we all view things sort of from our 
perspectives and our States and so on, but I have to say that, 
from my perspective, I have a different view than my friend 
from Tennessee, just in terms of how fast things are moving. We 
all want things to go faster, but I remember great frustration 
that, after we passed the energy bill in 2005, no loan 
guarantees were given out. So, you were handed a program, 
coming in, where you had to literally go and figure out how to 
do that, as well as the provisions that we worked on with 
section 136 for retooling loans, as well as the other programs 
that we put in place.
    So, I'm sure you share the same feeling, that we would love 
things to--always to move more quickly. But, I want to thank 
you for moving things as quickly as you have, because we are 
seeing real results.
    When you mentioned A123 batteries, this is a wonderful 
example of a company that was in Asia and came back. That's 
what we want to have happening more. It came back because of 
the partnership with the Federal Government.
    Our companies have been competing against countries for way 
too long. As the Chairman's chart showed, with the investments 
in China and so on, every other country is out there racing to 
be the leaders in these technologies.
    So, I want to thank you. Also, having come from the North 
American Auto Show, a week ago, and seeing, actually, the 
fruits of your labors, our labors, in terms of the new 
technologies and new partnerships, it's pretty exciting to see. 
I don't know if you're coming to the Washington Auto Show next 
week, but I would certainly invite you to do that, because 
there are very exciting things that, frankly, would not be 
happening if it was not for the partnerships that we now have 
with DOE and with the Federal Government and with the 
innovators, our manufacturers, our--and so on.
    I wonder if you might comment--because, from my 
perspective, when we talk about these issues, it is about 
energy independence, certainly it is about global warming, but 
it's about jobs. I see everything through jobs, and this is 
about jobs. How do we create clean-energy manufacturing jobs, 
not just in the end product, but in the processes? I mean, you 
spoke about that. I mean, the way, in a maturing solar panel 
industry, or as we--on wind, the way we continue to, not only 
bring prices down, but create jobs, is through investing in 
processes--manufacturing processes that do that. I know that 
the Industrial Technology Program has been a huge success that 
you have put into place for improving manufacturing 
technologies to reduce energy, improve competitiveness. Many, 
many more companies coming forward wanting to partner.
    I know that, in section 48C, our Manufacturing Tax Credit 
we put in the Recovery Act that the Chairman and I both pushed 
very, very hard for, we have seen 3 times as many requests come 
forward.
    So, I wondered--and I appreciate that you have said, the 
President has said, the Vice President has said, that you want 
to expand this credit to be able to take advantage of that. 
But, could you speak about the potential out there of these 
things, and a little bit more about what this means in terms of 
jobs right now, and the fact that we do have folks ready to go, 
as I understand it, if we were putting the dollars into these 
areas, to be able to get things moving more quickly?
    Secretary Chu. The potential's enormous. I think this whole 
business of transitioning to a clean-energy economy is 
something that will generate, now and next week and in the 
coming decades, meaningful jobs. It will generate and give real 
life to recapturing, and making sure we never lose, the high-
technology manufacturing. This is something we should not say, 
``Oh, manufacturing's not important.'' It is vitally important 
to the United States, high-technology manufacturing especially.
    So, all of the programs you've talked about are ways of 
keeping the manufacturing here in our borders. We have 
companies that set up plants overseas, in part because there's 
a market overseas. A lot of the programs we're doing, a strong 
clean energy--or renewable energy portfolio standard will mean 
there will be a demand here in the United States. Then, when 
there is a demand in the United States, then all of the sudden 
you see manufacturing of wind turbines in the United States. 
When there were ways to supporting wind and solar in Europe, 
you saw the manufacturing migrate to Europe.
    So, there are many policy instruments. We have to look at 
all of them, both to get it so that when a company says, 
``Well, can I manufacture here? Can I manufacture in China? 
Should I manufacture in Mexico?''--``No, you want to 
manufacture here.''
    The manufacturing of windows, the manufacturing of wind 
turbines, the manufacturing of all of these things should be 
done here in the United States. You need a market demand for 
it. You need long-term signals that tell people we're serious 
about this. You need all these things. You need the tax 
credits, the 48C tax credits for manufacturing, the 1603 tax 
credits for installing these things, that they can turn right 
around and--many of those companies have taken that tax-credit 
money, which normally would have been parsed out over 10 
years--they take the money and invest in a new renewable energy 
project. We need a loan guarantee for the nuclear.
    Now, after six, eight nuclear power plants, do I think the 
Federal Government says, ``OK. Look, this is good enough. The--
you know, it's got to stand on its 2 feet, but in order to 
start something that had stopped for 30 years, you need a 
little help.''
    All--quite frankly, I want to see--we have a lot of hydro 
in the United States. If you replace an old turbine, with a new 
turbine that's more efficient--and it's actually better for the 
fish, OK, and there's no environmental impact except on the 
positive side--should people get credit for that renewable 
source? Yes. OK, it's improving. You go from, let's say, 60 
percent to 80 percent efficiency, and you save more fish. This 
is a good thing. OK? If it makes economic sense, it's a good 
thing.
    So all of these avenues, we should be looking at to----
    Senator Stabenow. Thank you. I know my time is up, but I 
would just want to add that the--I've introduced legislation, 
along with Congressman Peters in the House, for Advanced 
Technology Vehicle Program, to expand upon that, and 
particularly to focus on light-duty trucks, commercial 
vehicles, and so on, where, I agree with you, there's 
tremendous potential for energy savings and real opportunities 
for us in new technologies.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Barrasso. Thank you very much, Mr. Chairman.
    Mr. Secretary, thank you for being here.
    I enjoyed your comments, fascinated with this new approach 
to carbon capture, using enzymes that are part of the 
respiratory process, and I want to learn a little more about 
that. It's--I think there are a lot of opportunities out there 
to use different ways of approaching things.
    Wanted to follow up with Senator Dorgan, and his comments 
that--he had mentioned the fact that still half of the 
electricity in the United States comes from coal. Coal 
continues to be the most available, abundant, reliable, secure 
source of energy. We have lots of it in the United States, and 
a lot of it is being used worldwide. So, it seems to me the 
best use of some of our research dollars and technology, along 
the lines that you and I have spoken of in the past, are along 
those lines that could then help develop the technology to use 
here in the United States, but also to use globally to work 
with carbon dioxide.
    In some of our work as a committee, I just wanted to ask 
what your recommendations would be--because you had said, over 
the next 8 to 10 years we really have to be deploying carbon-
capture technology, the--and what we need to be doing now with, 
say, things like pore space ownership and long-term liability 
with carbon capture, to make that a reality, and any 
suggestions there.
    Secretary Chu. Yes. First, the Department of Energy is now 
engaged in, I think it's, 6 or 7 experiments, in various places 
in the United States, to test different storage sites. This is 
in regard to the legal liability issue. I mean, we have to make 
sure that, when we pump this carbon dioxide into the ground, 
that it will stay there for a long time, it will not leak out, 
certainly not leak out suddenly, because there are real issues 
there.
    When I was director of Lawrence Berkeley Lab, we had a very 
good earth science department. I was talking those people up 
and became convinced that--and also some of my colleagues at 
Stanford--became convinced that, yes, you could do this. You 
can store and sequester it safely, and give people the 
confidence, where you can underwrite that this will not leak 
out. So, we are doing that now. You still have to prove it.
    So, we're doing that, as well as the capture part.
    Senator Barrasso. Thank you.
    Just last month, Mr. Secretary, Secretary Clinton pledged 
to raise about $100 billion in climate aid for developing 
countries. You know, I was--I'm concerned that that--how--
where--how that money's going to be spent--deployed, and if 
we'd not be better off trying to use that money to develop 
technology to share globally or sell globally if you really 
want to get a handle on some of the issues of carbon capture 
sequestration, dealing with a technology, and how that $100 
billion would best be used. We have huge budget deficits in the 
United States. I think we need to reprioritize and reduce 
government spending. Should we be investing in American energy 
innovation instead of handing out $100 billion to climate aid 
to foreign governments? What's the best use of that money?
    Secretary Chu. I'm not sure what you're referring to, in 
terms of the $100 billion, because--but, let me comment on what 
the Department of Energy is doing.
    We are entering into bilateral agreements with countries. 
For example, in China we have agreed to invest equally in 3 
areas. One is building efficiency. The other is using coal in a 
clean way, including carbon capture and storage. The other is 
electrification, cleaning up our vehicles, making them more 
efficient, and electrification. Seventy-five-million dollars 
over 5 years from each country in these 3 areas, so we will 
codevelop.
    You know, we believe we still have a technological edge. 
China has incredible markets. If we codevelop these things, 
then we think we can mutually help each other. Personally, I 
think it speaks volumes that China is willing to invest money 
now in carbon capture and storage.
    So, we are discussing, with other countries, like India, 
similar sorts of things.
    Senator Barrasso. What I was referring to is, Secretary 
Clinton had made a decision--or an announcement that the--and 
along with the President--that we'd invest 100--where we'd find 
and collect and give to other countries $100 billion. This is a 
result of the Copenhagen conference, and came--it came out of 
that.
    Want to just move to one last question, in my final minute 
here, Mr. Secretary. The Department of Energy has always 
maintained very high standards, the highest standards of 
quality in the production of information given members of the 
public. I have concerns about what's happening now with what's 
been called ``Climategate,'' emails that have been leaked. The 
work of those scientists really provided a substantial portion 
of the data that compromises--that comprises the United Nations 
Intergovernmental Panel on Climate Change reports. I just 
wonder if you believe that the Department of Energy, at this 
point, and other Federal agencies, should continue to rely on 
the U.N.'s work, if the process used to develop its reports 
would really violate the Department of Energy's own research 
standards and principles. Because there is no way, right now, 
that we can even get the raw data and other research material 
that have been used for what we now know of these leaked 
reports, and question about the integrity of some of this 
research.
    Secretary Chu. The short answer to your question of, Do we 
believe that we should continue to rely on the IPCC, in terms 
of climate information? The answer is, yes.
    With regard to ``Climategate,'' there are mountains of 
evidence that suggest what is happening--not ``suggest,'' but 
actually show, in my mind, what is happening. The 
``Climategate'' thing that you're talking about is--there were 
3 different groups using tree rings as a proxy for the amount 
of carbon dioxide. One of those groups found that the tree ring 
says that the carbon dioxide in the atmosphere wasn't 
increasing the way direct measurements were indicating. So, 
what they did is, they just said, ``Well, I don't understand 
this,'' they threw the data out.
    Now, that is being investigated. When scientists throw data 
out, you should throw the whole dataset out.
    There are 2 other groups that didn't see this anomaly. If 
you look back in the history of that group, they actually went 
anomalous couple of other times.
    So--but, that's a little snippet of all the things that 
have been showing that the climate is changing. It is changing 
radically. So, as you well know, there are all these little 
warts and bumps as science marches on. OK? But, when you have 
tens of thousands of things going in one direction, there's 
going to be 2 or 3 things that say, ``Uh.'' So, it doesn't 
really impact the overall conclusions, in my mind, at all.
    Now I know what--suspect that that's what you're asking 
about--I believe what Secretary Clinton was saying is that the 
world, not the United States, will--which includes the private 
sector would work toward building it up--if the developing and 
developed countries could come to an agreement, then you could 
see about developing a fund of up to a $100 billion a year of 
both private and public money--and, you know, --this is not 
United States--and then investing it in the poorest economies. 
But, that was based on if a lot of things happen.
    Senator Barrasso. Thank you.
    Thank you, Mr. Chairman.
    Just because you had--earlier you had said something about 
``money sitting on the sidelines,'' and I'd like to see that 
money used in some of the technology. Then we could share in 
that, internationally. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman.
    Secretary, thank you for your service. I--couple areas I 
want to talk to you about.
    One is, you know, I believe that energy efficiency is one 
of our keys to reaching both our climate goals and to reducing 
our energy dependence and to creating millions of new green 
jobs.
    I also believe energy efficiency, like job creation, is 
best done from the bottom up. A lot of that is through local 
efforts. That's why I, along with Senator Sanders, championed 
the Energy Efficiency and Conservation Block Grant Program, 
which is currently distributing a little over $3 billion to 
cities and counties around the country to help them use energy 
more efficiently, create new jobs, and also reduce costs for 
taxpayers. Could you tell the committee how much of the money 
in the program has been awarded thus far?
    I also wanted to know if you agree that it's essential we 
continue to fund this program beyond the Recovery Act so we can 
continue to make our communities greener, create more jobs, and 
reduce their energy costs?
    Secretary Chu. OK. So, as of this week--I happen to have 
the numbers here--89 percent of the grantees have received some 
or all of their funding. So, in terms of dollars, it's $2.265 
billion, out of a total of 2.7 billion, have been obligated. 
Now, significantly less has been costed--actually spent. But, 
the commitments--the obligations are going to the cities, the 
towns, the localities. Again, there are these issues. The first 
tranches you apply, you get money to develop a plan, you submit 
the plan; as soon as the plan is approved, then you get more 
money, and so on. So, we are working through the processes. 
It's uneven. Sometimes plans are good, boom, it's good to go. 
There are other approval processes that need--you know, in the 
statutes--that need to be approved, both at the State level and 
at the Federal level. We are working as hard as we can to 
streamline any way and--any way we can help, in the Department 
of Energy, to help the mayors, for example, who are receiving 
these block grants, to get it going.
    Senator Menendez. What do you expect to be the time between 
obligation and distribution?
    Secretary Chu. It's a partnership between the local 
governments that we give the money to and how well they can get 
the--remember, we have another obligation, and this is taxpayer 
dollars. The Vice President has said, ``We want the money spent 
quickly, but we want it to be spent wisely.''
    Senator Menendez. Of course. My point is, if you've 
obligated it, it's because you've reviewed their plans and you 
have made a decision that their plans are worthy----
    Secretary Chu. That's correct.
    Senator Menendez [continuing]. Of being funded. So, now we 
have $2.6 billion obligated. I'm just wondering how much time 
before you actually have the delivery and expenditure of those.
    Secretary Chu. Yes. That--again, it depends on the--at the 
local level, because they have to satisfy certain 
requirements----
    Senator Menendez. What do you think about moving forward on 
this program?
    Secretary Chu. We are trying to move--help the local 
governments move----
    Senator Menendez. I'm talking about----
    Secretary Chu [continuing]. This forward.
    Senator Menendez [continuing]. Beyond----
    Secretary Chu. Oh.
    Senator Menendez [continuing]. This tranche of money from 
the stimulus.
    Secretary Chu. I think the idea of investing in energy 
efficiency is a very big idea. Now--but, the way to do it--
that's why we are looking very hard at trying to look at ways 
in which private-sector money--or, if it's public-sector money, 
where it's heavily leveraged. OK?
    So, if you just pay for everything, that will get some good 
things done, but we can't continue this. So, we're looking at 
programs--and that's why we're piloting these programs with the 
EECBG money, so that--if energy efficiency does really save 
money, and I believe it does, then the private sector would be 
able to make money on this. But--and they say, ``Well, why 
haven't they, so far?'' There are hurdles. There's inertia, 
there's inconvenience, there's a lack of information, there's a 
lack of trust about whether the work you contract will actually 
be good. So, we are looking to overcome all these hurdles. So, 
it becomes a very commonplace thing that people come and say, 
``When I invest $5,000 in weatherization, I'm going to get 
return on my money.'' So, to the extent that we can leverage 
any Federal taxpayer dollars to make this possible, that's OK. 
But, it--again, we're focusing on leveraging it.
    Senator Menendez. I'm all for leveraging. But, clearly, 
when you go directly to a taxpayer, at a municipal level or a 
county level, and you are getting energy savings, you're 
creating jobs, in the first instance, putting people to work, 
which we desperately need to do in this economy, and at the 
same time achieving long-term energy savings, which means a 
reduction in the cost to taxpayers, that's a multiplicity that 
I'm not quite sure that the private sector will always 
generate, as it relates to counties and municipalities. They'd 
have to pay a private contractor to do it. So, if it's going to 
go--if the incentive is going to go that way--so, I just want 
to urge your attention to the difference, you know, more for 
leveraging money, and maybe even getting municipal buy-in, to 
some degree, if you're going to get a leverage. But, I'm simply 
saying that, at the end of the day, there are--there was a 
ripple here of savings that's important.
    Let me just turn to one other issue. I very much pursue 
solar energy here on the committee. You know, I believe that--
you know, I've authored bills, like this Grid Access Act, which 
would create national standards, to allow people to easily 
connect their solar systems to the grid and sell excess power 
back to their utility. My home State of New Jersey has the 
second highest solar power capacity in the country. It's No. 1 
in solar installed per square mile. So, this is incredibly 
important.
    You know, solar photovoltaic panels have plummeted in price 
recently. They're increasingly an attractive option for 
consumers. One, what policies do you think are most critical to 
continuing to lower the price of solar power? What are the 
major market barriers to its continued growth?
    Finally, Senator Stabenow and I have written the Solar 
Manufacturing Jobs Creation Act that would allow equipment used 
to manufacture solar powers to be added to the list of property 
that qualifies for the 30-percent solar investment tax credit. 
Do you think that that is an incentive worthy to be considered 
of?
    Secretary Chu. I think tax credits are very helpful. I 
think development of lighter-weight modules that don't 
penetrate roofs is very helpful. I think we want to be able to 
get it--solar--in a position where, when you install it, you 
don't need a city inspector and a license to put it on your 
roof, but add--because that adds inconvenience and cost. This 
is part of the balance-of-cost systems that--you know, we want 
to do it, so it's like buying a water heater. All right?
    So, we're--well, I've talked before about the reliability 
of the inverters and converters. This is a very focused target 
now. How do we get--one of the sad things is that the brilliant 
electrical engineers that were building us better and better 
chips haven't been really paying attention to what I call 
``power electronics.'' So, we want to get, in the pipeline, 
gifted people who are going to work on power electronics, 
because this is going to be a very important technological 
market in the future. It's, again, going to our--prosperity. 
So, we are looking at all those things and how we can do this. 
That's--so.
    Senator Menendez. We'll--I won't delay, Mr. Chairman--but, 
we'd love to talk to you about----
    Secretary Chu. Sure.
    Senator Menendez [continuing]. Some of the greater aspects 
of this question. How do we continue to lower that price? How 
do we deal with major market barriers? How do we look at 
connections to the--we'd like to talk to you about all of that. 
But, I won't----
    Secretary Chu. OK.
    Senator Menendez [continuing]. Delay before the committee.
    Secretary Chu. If I can indulge the Chairman, just--
regarding your other question, the EECBG, the weatherization, 
the CEP, those are all Recovery Act things. We are working as 
hard as we possibly can to get that money out to stimulate the 
economy, to put the people who are unemployed back to work and 
so that is very important. That ripple effect--I totally agree 
with you, that was the philosophy behind Congress and the 
administration getting behind the Recovery Act. It has made the 
recession much less worse than it could have been. I think that 
it has been a success story.
    But, then, going forward, we can't just simply do the same 
ad infinitum, because you know, it's a big deficit. So, that's 
why, you know, when the Recovery Act funds do end, we have to 
look at those things that can keep the momentum going. That's 
what I was really talking about regarding----
    Senator Menendez. No, I understand that we can't continue 
to spend, but you're going to have a budget. You're going to 
ask us to spend----
    Secretary Chu. Right.
    Senator Menendez [continuing]. On certain things.
    Secretary Chu. Right.
    Senator Menendez. I'm just looking, in the context of your 
spending that you're going to ask for, you know, justify to me 
why--one, what you're going to spend; and 2, where is this 
program, in terms of its prioritization, as it relates to that 
spending? So----
    Thank you Mr.----
    Secretary Chu. OK.
    Senator Menendez [continuing]. Chairman.
    The Chairman. Senator Wyden.
    Senator Cantwell. Thank you, Mr. Chairman.
    Welcome, Mr. Secretary. Good to see you again.
    In addition to my duties here, I chair the International 
Trade Subcommittee, as well, at the Senate Finance Committee. I 
want to talk to you particularly about the export market in 
clean technologies. This is something you've talked about in 
the past, and it seems to me good clean technology policy is a 
twofer. We come up with clean technologies in our country that 
are going to help us tackle climate change, and we've got a 
very lucrative market for our exports, which means we're right 
in the grill of a field that's going to allow us to come up 
with more high-skill, high-wage employment.
    You said--and I thought you really put your finger on it, 
I'm just going to quote you here, briefly, and see if we can 
get in a little discussion--you said, ``The only question is 
which countries will invent, manufacture, and export clean 
technologies and which countries will become dependent on 
foreign products.'' That was your comment, and I think it 
really, frankly, captures the challenge of our time here, you 
know, linking, particularly, clean tech to something that we 
can export around the world. Now, we did an analysis of this, 
and we found that, in some key areas, particularly wind 
turbines and solar panels, we're actually falling behind 
foreign competitors, in terms of our competitiveness in global 
markets. We saw that 80 percent of clean energy investments are 
going to take place outside of the United States even though 
global trade and environmental goods has doubled just in the 
last few years.
    So, you all aren't the lead, in terms of export policy, but 
you do play a very key role, particularly with the Commerce 
Department. Tell me, if you would, specifically what you think 
can be done between the Department of Energy and the Commerce 
Department to get us back in this position of leading in the 
field of export of clean technology.
    Secretary Chu. Senator, you're quite right that Commerce is 
the lead agency, in terms of the import/export. But, the 
Department of Energy is lead agency, in terms of generating the 
innovation, generating first the inventions, and then the 
innovation that leads to new products.
    It is true that, over the past decade or 2, the amount of 
solar--manufacturers for solar photovoltaics has been declining 
in the United States. I think that's turning around. There are 
a number of very innovative companies that are thin-film solar 
companies, for example, or even polycrystalline solar companies 
that have higher efficiencies. One of our first loan 
guarantees, Cylindra, has a very, very good product and is 
manufacturing here in the United States.
    So, I hope that this will be turned around. It requires a 
number of policies that will help support the building of 
factories here in the United States. If we have the superior 
stuff, we would like to manufacture in the United States.
    This goes back to my comment about high-technology 
manufacturing. You know, these companies--I know one company 
reasonably well, because it was in the Bay area, called Applied 
Materials; they are masters at automating things and turning 
manufacturing--very complex manufacturing processes into high-
tech very efficient manufacturing. There was a time, over the 
last year, where they sold 14 turnkey factories. They sell 
turnkey high-tech factories. All 14 were abroad. So----
    Senator Wyden. Here's----
    Secretary Chu [continuing]. This is a----
    Senator Wyden. Here----
    Secretary Chu [continuing]. Combination of tax----
    Senator Wyden. Here's what----
    Secretary Chu [continuing]. Policies, fiscal policies----
    Senator Wyden. Here's what I need to know, Mr. Secretary. 
The U.S. is now losing market share in overseas markets on 
environmental goods. That's what we found in this report. I'll 
ship it over to you. We just did it. The trade deficit in these 
goods is growing substantially. What mechanism is there between 
the Department of Energy and the Commerce Department so that we 
can figure out how to tap the export potential of clean-tech 
before we lose more ground? What mechanism actually exists 
between your agency and the Department of Commerce to tap 
export potential?
    Secretary Chu. I think you need, first, a local demand 
here, to encourage the manufacturing of these products here. 
Then, given that, if you're manufacturing here, then that could 
be part of the export. If there's no local demand here, and 
it's all abroad, they will build a factory abroad. I think this 
is part of it. This, again, to the long-term strategy that the 
United States must have, in terms of where the world will be. I 
think we will live in a carbon-constrained world. So, why not 
take the leadership?
    Let me give you an example. I visited Cummings diesel. 
Cummings makes diesel engines. A very high ranking official 
there was telling me that because of the regulations on 
particulate matter, NOX, in diesels, that were 
demanded of our diesel manufacturers, they had to develop 
cleaner diesels. They thought, initially, that it was a 
disaster to the industry; it wasn't adding customer value, 
because it would increase the cost of the diesels; and decrease 
the efficiency somewhat. But, in the end, they figured out how 
to do it, and now they're the leader in clean diesel 
manufacturing in the world. This person--I don't know what his 
exact title was, but he said, ``Cummings might not be here as a 
standalone company had not we been required to develop clean 
diesels. But, now that we have clean diesels, we're the leader 
in the world in clean diesels for trucks.''
    Senator Wyden. My time's expired. I'm going to want to ask 
you some more questions, specifically, Mr. Secretary, about the 
relationship with you all and the Commerce Department.
    Secretary Chu. OK.
    Senator Wyden. Because I still am not clear on what the 
strategy is to tap the full potential here, and I'd like to 
talk to you about it some more.
    Thank----
    Secretary Chu. I----
    Senator Wyden [continuing]. You, Mr. Chairman.
    Secretary Chu. I would be glad to talk with you about that.
    The Chairman. Senator Cantwell.
    Senator Cantwell. Thank you, Mr. Chairman.
    Good to see you, Secretary.
    I think I'll follow on my colleague, because we know that 
the Pacific Northwest is looked on by several industries as an 
epicenter for clean energy jobs and manufacturing. If we get 
the manufacturing credit, and we get some of these programs 
moving more rapidly, we think that we could capitalize on that. 
I'm not sure all the reasons why the Northwest has been already 
a focal point but----
    I saw an anecdote, last week in the New York Times, that 
Bill Gross, who runs eSolar, which is a solar thermal startup 
in California, announced that they are going to build the 
biggest solar thermal deal ever in China, a 2-gigawatt, $5-
billion plant using their technology. But, eSolar said they 
applied for an Energy Department loan for a 92-megawatt project 
in New Mexico, but in the time that it took for them to do 
that, they decided to go ahead with the Chinese project 
instead.
    So, obviously we're glad they're using the technology, but 
how do we move faster, given that China seems to be surpassing 
the U.S. in the wind market? China is now building six wind 
farms with the capacity of 10,000 to 20,000 megawatts apiece. 
In the solar world, they are dominating the panel 
manufacturing. So, how do we make sure that we get this 
manufacturing credit implemented and these jobs and leadership 
of the United States in this key technology?
    Secretary Chu. The way you do it is, you look at why it 
takes the delays it takes in order to get these projects going. 
We have different ways of doing business than in China. You 
know, they can--with one stroke of the pen or wave of the hand, 
they can go and do these. We have processes that are 
established to do many, many things, including protecting the 
environment, that one has to go through its steps. So, the loan 
guarantees--again, we--you know, we're mandated by Congress to 
try to negotiate with any applicant so that we can get the best 
value for the taxpayer dollars.
    I think that if we're allowed to leave a little bit of 
change on the table, it might make things go faster, but there 
are statutes written into the laws that demand that we do 
certain things. There are statutes written into the laws which 
are--I think, you know, on balance, good. You know, I think 
it's good we have environmental protection standards. It--we 
just want to do those things in a timely manner. But, so China 
has not caught up to us on those environmental protection 
standards, and so they can do things at a faster pace.
    Senator Cantwell. I think we definitely need to figure out 
how to further streamline this process and obviously make the 
manufacturing credit more robust.
    I wanted to ask you, because I know the Chairman asked you 
about the price signals, and I'm a big fan of whatever we can 
do in moving faster, from the government. But, I also want your 
thoughts on this, of whether it's really going to be the 
private-sector investment level that really decarbonizes our 
economy, and what it's going to take to get a predictable 
economywide price signal on carbon.
    So, if you could tell me your thoughts on that, and whether 
you think that a predictable carbon price is the only way to 
ensure a significant number of nuclear power plants are built, 
as well.
    Secretary Chu. I think it is very important to have a long-
term signal that we will be living in a carbon-constrained 
environment, in a carbon-constrained world. If I were a utility 
company and thinking of investing anywhere from a billion to 
$10 billion in a new power--depending on what the plant was, 
whether it's a coal plant or a nuclear plant--that would be 
operational for 60, maybe 80 years, it will be very important 
to me as to what the long-term signal is going to be. That's 
why I think--and this is what I hear from industry--why the 
money is on the sidelines.
    You can't make those investments--the financial 
institutions, the banks are holding back, saying, ``Well, I'm 
not sure we can make these loans, because we don't know what 
the lay of the land is today.'' The rate commissions also need 
those signals.
    So, things are semi on hold because of that.
    Senator Cantwell. I wasn't in the room, but I'm gathering, 
from your answer to Senator Bingaman, that the price signal 
that is happening in the marketplace right now isn't enough?
    Secretary Chu. No, it's----
    Senator Cantwell. It's----
    Secretary Chu [continuing]. Not. I mean, there----
    Senator Cantwell [continuing]. Not predictable. It's not--
--
    Secretary Chu. It----
    Senator Cantwell [continuing]. Long-term.
    Secretary Chu. A price signal, in many sectors, would not 
be enough. We just talked about transportation, a price on 
carbon. The price signal that would end up on the gasoline 
would not be enough, based on CBO estimates of what it would 
do--let's say, Waxman-Markey would do to the price of gasoline.
    So, you'll have to get it through other things. I think 
some of the things have to be regulatory, as in a standard. The 
price of--the efficiency of your--if you have a satellite TV 
box or cable TV, you know, that thing draws 10, 20 watts. 
There's no price signal that will actually make that draw 1 
watt; whereas, the engineers can make it draw 1 watt. It might 
increase the cost of manufacturing of that little box by just a 
little bit. So, there you just have to say--you've got to 
regulate that, just as we do refrigerators.
    So, you look at all the sectors. Some of them, there will 
be price signals; some of them, there will be, ``This is where 
we have to be by 2050 and 2040 and 2030.'' There are all of 
these things.
    Pure price signal, alone, can't get us there. That's why 
we're looking at renewable portfolio centers. That's an 
artificial market drawn to make sure that you will have--if 
American manufacturers get into this business, that they will 
have a product to sell.
    Senator Cantwell. My time's up, but I just wanted to make--
you do support a long-term price signal as a----
    Secretary Chu. I----
    Senator Cantwell [continuing]. Way----
    Secretary Chu. I----
    Senator Cantwell [continuing]. Not a short-term or near-
term price signal. But, you're saying, if you had something 
that was 30 years of policy----
    Secretary Chu. Right.
    Senator Cantwell [continuing]. Predictability----
    Secretary Chu. Right. That's----
    Senator Cantwell [continuing]. That----
    Secretary Chu [continuing]. Right.
    Senator Cantwell [continuing]. That predictability would 
unleash----
    Secretary Chu. That----
    Senator Cantwell [continuing]. The private----
    Secretary Chu. That would----
    Senator Cantwell [continuing]. Sector----
    Secretary Chu [continuing]. Unleash private investment. I 
agree with that.
    Senator Cantwell. Thank you. Thank you, Mr. Secretary.
    The Chairman. Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    Mr. Secretary, thank you for being here. I apologize for 
being late and for missing so much of your testimony, because I 
do appreciate all of the work that you and the Department are 
doing to address our energy future.
    I missed Senator Menendez's question, but my staff told me 
that I--he addressed one of the concerns that I wanted to raise 
with you this morning, and that is that our energy office in 
New Hampshire is concerned about the increasing reporting 
requirements for many of the programs that DOE is 
administering, and that they are changing, they're becoming 
increasingly strict. I know, that all of us are very concerned 
about accountability and making sure that we get the best job 
that we can for the money that we're spending, but their 
concern is that they're going to have to hire additional staff, 
so take funding away from the program part to put on staff to 
deal with reporting requirements.
    Are there additional ways that we can balance the need for 
accountability and the effort in States to get these programs 
working in a way that's effective?
    Secretary Chu. I hope so. I will certainly personally look 
into this. I've been told, that many of these requirements 
are--have been essentially mandated.
    Again, it's, you know, spend quickly but spend wisely. When 
you're spending that kind of money, especially that new money, 
it is ripe for abuse. So, for that reason, you know, our IG 
offices are trying to help us design programs simply to prevent 
them before they occur.
    Now, having said that, it is possible to go too far. So, we 
are always looking at ways to streamline processes. I certainly 
have heard that additional reporting, which was required in 
much of the Recovery Act, seems like a lot.
    Senator Shaheen. Thank you. I appreciate that. If we can be 
helpful as you're taking a look at that, I would certainly be 
happy to help in any way that we can.
    Secretary Chu. OK.
    Senator Shaheen. I think this other issue may have been 
raised by others, as well, but we have a number of small- to 
medium-sized businesses in New Hampshire that are doing very 
innovative things when it comes to new energy technologies, 
companies like Warner Power. One of the things that we're 
hearing from too many of those businesses, I think, is that 
they're having trouble accessing assistance from DOE, 
particularly funding. Obviously these businesses are the kind 
that we want to grow. So, what more can we do to help 
businesses like Warner Power and some of the other small- and 
medium-sized businesses to commercialize those technologies 
that they're working on? What, specifically, is the Department 
doing to help with that?
    Secretary Chu. There are, again, mechanisms. We give 
grants, with matching money. We also give loan guarantees. The 
only trouble is that the way, for example, the loan guarantees 
currently are set up, and what we're required to do----
    Senator Shaheen. Right.
    Secretary Chu [continuing]. Doesn't make the processing of 
a small loan worth it.
    Senator Shaheen. Right.
    Secretary Chu. Again, it's the hoops that we, in the 
Department, have to jump through. We are constantly looking at, 
Do--you know, what are the requirements we put on ourselves? 
What are the requirements that we think are necessary? What are 
the requirements that are statutes?
    I would be glad to talk to you and work with you, because I 
agree with you that a lot of these--a lot of the real 
innovation in the United States comes out of these small 
entrepreneurial garages. How do you actually get them started, 
especially in this era of very tight credit? So, I will admit, 
it is not a solved problem. OK?
    Senator Shaheen. Thank you. I'd appreciate that.
    Secretary Chu. OK.
    Senator Shaheen. Willing to do it. I remember, our first 
conversation, this is an issue that you raised, and something 
you felt the Department needed to work on.
    Finally, one of the things that is a big issue in New 
Hampshire, because we have a higher-than-usual percentage of 
individual dwellings, both homes and commercial buildings--and 
so, our energy costs are very high, because we need to do a lot 
more work when it comes to energy efficiency and--with 
buildings. We're seeing a growing number of communities embrace 
the PACE concept, the Property Assessed Clean Energy financing. 
What is the Department of Energy doing to help encourage those 
PACE programs? Is there more that we ought to be doing?
    Secretary Chu. It is a local issue, but we are trying to 
spread the word that this is a good thing. But, what we are 
doing is making it so that one can more efficiently and 
effectively assess what are the needs, where the money would be 
spent the wisest, to get the most return on investment for a 
homeowner. We are developing an energy audit tool that could be 
put onto a BlackBerry or iPhone and things like that.
    Senator Shaheen. OK.
    Secretary Chu. We are looking at how we can, essentially, 
give license or some way of approving that these contractors 
are trustworthy, you know, kind of a Good Housekeeping----
    Senator Shaheen. Yes.
    Secretary Chu [continuing]. Seal--DOE seal of approval. We 
are looking at ways in which neighborhoods can, if they sign 
up--a bunch of them, en mass, can sign up--that they can go to 
a provider for energy efficiency work and get a huge quantity 
discount, so the truck can go from house to house to house to 
do the energy audit, another truck can go to house to house to 
house to blow in the installation or seal the leaky ducts. So, 
it's a--kind of a mass production of energy efficiency, with 
contractors who are trustworthy.
    So, we are designing programs like that. We're going to be 
piloting them. If they work, we will aggressively say that this 
is the way you actually get more value. So, it's--in addition 
to the funding, it's actually to give the homeowners the 
assurance that, when they borrow money or spend their own 
money, that they will really recoup that.
    Senator Shaheen. Thank you. My time is up.
    The Chairman. Senator Risch.
    Senator Risch. Thank you, Mr. Chairman.
    Thank you, Secretary Chu, for coming here today.
    Actually I'm going to reserve my questions. I know we're 
going to have a hearing in 2 weeks on the loan programs. As the 
Secretary knows, because we've had a number of discussions 
about the importance of the loan guarantee programs to the 
nuclear industry, to move the renaissance forward, I'm going to 
have a lot of questions in that regard.
    So, thank you very much. Thank you for coming. We'll have a 
little chat about that in a couple weeks.
    Thank you.
    The Chairman. Senator Murkowski, do you have some 
additional questions?
    Senator Murkowski. Mr. Chairman, I have some additional 
questions, but I'll submit them for the record, because we're 
running short of time.
    I want to make a comment. This follows on the heels of the 
conversation that you had with Senator Corker about the 
impatience on commissioning the Blue Ribbon Commission.
    Secretary, I want to assure you that I believe you have the 
support of many here in the Senate. You've come before this 
paneland strongly stated your support for whether it's areas of 
nuclear or to Senator Bunning's question about how we advance 
clean coal, how we move toward the renewables and the 
efficiencies. I think you believe in the balanced energy 
portfolio that is imperative for this country.
    I find it a little disturbing that the questions that I 
presented to you, specifically asking whether or not the White 
House was barring any research into particular areas of 
nuclear, and then in my opening comments I made reference again 
to this Energy Daily article that apparently goes back to a 
letter between you and those within the administration on 
perhaps some differences in approach. We understand that you're 
not going to have everybody lineup, you will have your budget 
guys coming at it from one perspective and the policy folks 
coming at it from another.
    But, I would like to encourage you to hold tight to these 
principles. You have stated you want to exit this job with your 
integrity as a scientist intact. I hate to take things out of 
context or say that whatever the press writes is what we 
believe but there is wording here that says, ``It reinforces 
the suggestions by some industry officials that the Obama White 
House is overstuffing energy efficiency and renewable energy at 
the expense of more traditional generation sources like coal 
and nuclear,'' and then it goes on to say how you have ``made 
the case for these other energy areas,'' whether it's in 
nuclear, or the fossil fuels.
    I would just remind you that there are many of us looking 
to support all that is available within this balanced energy 
portfolio. I think we know that we have technological 
opportunities we need to allow time to bear out. We need to be 
a little more aggressive and more risktaking in some of these 
other areas.
    Like Senator Dorgan, I look forward to the list of what you 
might put out in this white paper on what ARPA-E is doing. I 
would ask you to hold tough and keep pushing for the balance in 
the energy technology portfolio, because I really do believe 
that's how we're going to get to meaningful reductions in our 
emissions.
    I have a particular question that I want to pose to you 
about how we're doing with ocean energy and its potential, but 
I'll look forward to those comments in writing.
    Secretary Chu. OK.
    The Chairman. Do you have any final message for us, Mr. 
Secretary? We appreciate all of your time this morning.
    Secretary Chu. Just reiterate how important this is to--the 
whole energy issue is--how important it is to America's 
economic prosperity. I see it as very--tied, because energy 
reaches into everything. If one recognizes that, you know, we 
don't know what the price of oil's going to be a year from now, 
but probably, 10 and 20 years from now, there's a pretty good 
bet it's going to be higher than it is today.
    I, again, assert, given the sea change that I've seen 
developing countries like China, that we will be living in a 
carbon-constrained environment worldwide. There's an 
opportunity to lead in this transition, technically, that we 
can then use for both internal consumption and for export.
    There are a lot of smart people who are very concerned 
about this. Not everybody agrees with everyone else. But, we 
try to work through these--and on a science base--evidence-
based decisionmaking processing, and try to get to the best 
solution that will be the best for America's economic 
prosperity and for our environment for security, and energy 
security, as well.
    You know, I have certain opinions, and not everybody always 
agrees with everything I say, and so I just see that as an 
opportunity for me to try once again.
    The Chairman. Thank you again for all your time.
    That will conclude our hearing.
    [Whereupon, at 11:48 a.m., the hearing was adjourned.]
                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

  Responses of the Hon. Steven Chu to Questions From Senator Bingaman
    Question 1. The President's budget for fiscal year 2010 proposes 
$15 billion allocated over 10 years for energy R&D starting in fiscal 
year 2012.

          a. Given the magnitude of research that must be accomplished 
        in such areas a carbon sequestration, biofuels and nuclear 
        energy--do you think this level of funding is adequate to meet 
        long-term climate goals?

    Answer. In October 2009 President Obama noted that ``nations 
everywhere are racing to develop new ways to produce and use energy, 
and the nation that wins this competition will be the nation that leads 
the global economy.'' The Department's FY 2011 budget request for 
energy research and development invests in those new ways to produce 
and use energy--in such areas as carbon sequestration, biofuels, and 
nuclear energy, where we have strong programs which this budget 
continues to support. The Department's FY 2011 research and development 
budget request fully supports the Administration's commitment to create 
jobs through development of a clean energy economy, invest in advanced 
science, research and innovation, and improve energy efficiency to help 
curb greenhouse gas emissions which contribute to climate change.
    Question 2. Many of the models of climate legislation indicate that 
the price increase imposed on transportation fuels from cap and trade 
is too small to change driving behavior. This means that, even though 
the transportation sector is responsible for 1/3 of our emission, 
market forces alone are unlikely to reduce emissions from vehicles. 
Does this make research and development investments in the 
transportation sector more important than in other sectors that will 
receive stronger price signals? What are the technologies that you view 
as having the most potential in this area?
    Answer. Meeting the President's goals of combating climate change 
and reducing our dependence on oil will require significant investments 
in advanced technologies across all sectors. The existing cap and trade 
legislative proposals are unlikely to significantly reduce the 
transportation sector's greenhouse gas (GHG) emissions alone in the 
near future. This sector's emissions will be regulated under existing 
Clean Air Act (CAA) authority as has been proposed for light-duty 
vehicles by the EPA in 2009. Furthermore, technologies developed for 
one sector (such as low-carbon power from renewable sources) may be 
used in the transportation sector. The American Recovery and 
Reinvestment Act included $90 billion in clean energy investments, 
including those for improvements to the Nation's power grid to 
facilitate a smarter grid, and grants for the next generation of 
advanced batteries. In addition, the Department maintains a portfolio 
of Research Development and Demonstration projects to further the goals 
of energy security, environmental quality, and economic growth. The 
proposed FY 2011 budget includes $220 million for biofuels and biomass 
R&D and $325 million for advanced vehicle technologies.
    The Vehicle Technology Programs include many programs to reduce of 
the transportation sector on petroleum. Technologies that may be 
deployed in the near future include efficiency improvements to internal 
combustion engines, hybrid-electric power trains, and other efficiency 
improvements such as weight reduction and aerodynamic improvements that 
reduce drag. The Department is active in advancing energy storage, 
especially batteries, necessary for commercializing Plug-in Hybrid 
Electric Vehicles (PHEVs) and Battery Electric Vehicles (BEVs). 
Finally, one of the goals of the DOE's Biomass program is to transform 
domestic biomass resources into cost competitive low carbon biofuels. 
In the longer-term, an entirely new propulsion and fuel distribution 
system relying on more efficient low-or zero-carbon fuels (such as 
hydrogen fuel cells) may be developed.
    Question 3. Many of the technologies we will need to meet the long-
term goals of climate change are expected to have long development 
times. This would seem to argue strongly for front-loading the research 
and development investment dollars towards the beginning of any climate 
program, rather than having them increase over time. Would you agree 
with this investment structure?
    Answer. No, not necessarily. The urgency of our climate change 
goals, indeed, calls for rapid development and deployment of advanced 
climate change technologies, This, in turn, implies intensive early-
stage efforts and, given the uncertainty of research and outcomes, the 
pursuit of multiple paths toward a desired end. Both can add to costs 
compared to a more deliberate approach. This might imply front-loading. 
This model also comports with the principle of government's role of 
underwriting the early and higher risk phases of a technology's 
development. On the other hand, the more expensive phases of research 
occur in the prototype development, testing, evaluation, scaling-up, 
and large-scale demonstration phases of a technology's development. 
Even when the government's share of the later-stage costs is defrayed 
by industry cost-sharing, its costs alone may be substantial and far 
overshadow those of the early-stage work. Each technology is likely to 
be different. It is best not to generalize.
    Question 4. The Department has a very wide portfolio of research 
spanning basic to applied. If these funds were to become available, 
where do you think the greatest need and payoff is?
    Answer. As my testimony outlined, the Department's strategic 
priorities are three. First, the Department must lead the nation's 
efforts to transition to a low-carbon economy by developing and 
deploying clean and efficient energy technologies, increasing 
generation capacity and improving our transmission capabilities. 
Second, we must invest in scientific discovery and innovation to find 
solutions to pressing energy challenges and maintain American economic 
competitiveness. Third, we must enhance national security by ensuring 
the safety, security and effectiveness of the nuclear stockpile without 
testing and; reducing the threat posed by the proliferation of nuclear 
weapons and material; and providing safe and effective nuclear 
propulsion for the U.S. Navy. Supporting these priorities, the 
Department has requested in FY 2011 a set of activities that are 
believed to be necessary to ensure deliberate progress and ultimate 
success. Collectively, the activities and their requested amounts form 
an efficient and cost-effective portfolio. We would not encourage 
further adjustments.
    Question 5. You were on the National Academies Panel that resulted 
in the report ``America's Energy Future.'' This report has two 
principal findings on base load power (1) demonstrate Carbon Capture 
and Storage on 15-20 new and retrofit plants with a variety of 
feedstocks and geologies before 2020 and (2) demonstrate whether 
evolutionary nuclear technologies are viable in constructing 5 plants 
within the next decade.

          a. Do you agree with these findings?

    Answer. One finding of the National Academies report states that 
``achieving substantial reductions in CO2 emissions from the 
electricity sector is likely to require a portfolio approach involving 
the accelerated deployment of multiple technologies: energy efficiency; 
renewables; coal and natural gas with CCS; and nuclear.'' In general, 
we agree with this finding and the President's FY 2011 Budget request 
supports such a portfolio by building upon the investments made in FY 
2009, FY 2010, and the American Reinvestment and Recovery Act of 2009 
which lay the foundation of our transition to a clean energy economy. 
Specifically, the report recommends that we ``assess the viability of 
CCS for sequestering CO2 from coal- and natural-gas-fired 
electricity generation.'' Furthermore, the report notes that ``building 
large quantities of new generation of any technology requires learning, 
licensing, permitting, and public acceptance. The urgency of getting 
started on these demonstrations to clarify future deployment options 
cannot be overstated.'' Through execution of Recovery Act projects and 
Fossil Energy R&D base programs, the Department is well positioned to 
begin to demonstrate a suite of CCS technologies covering multiple 
stationary sources and geologic reservoirs at the scale necessary to 
assess the commercial viability of CCS. Various regulatory and legal 
barriers, including the issue of long-term liability for CCS must be 
resolved prior to widespread adoption and deployment of this 
technology. In addition, the President acknowledged the need for 
comprehensive action by creating an interagency CCS task force to 
identify the barriers to commercial deployment of CCS technologies and 
assess the viability of CCS as a future deployment option. The 
interagency CCS task force is examining the adequacy of currently 
planned demonstration programs as part of this effort.
    However, it is important to note that our investments in CCS 
support a broader portfolio approach to addressing our climate and 
energy challenges. The findings are also consistent with the 
President's call for new nuclear construction in his latest budget 
request increasing the Department of Energy's FY2011 Federal loan 
guarantee authority to $54,5 billion for companies planning to build 
nuclear power plants.
    Question 6. As you are aware other nations have viewed their 
investment in energy R&D as a way to develop new markets and hence 
create job. Can you explain where you think the United States is 
relative to other Asian nations such as China and Japan?
    Answer. Asian countries such as Japan and China are actively 
investing in clean energy technologies. Japan, for instance, has a 
stated goal of accelerating the introduction of renewable energy 
technologies to address both their energy security needs and to promote 
the development of green industries. The Ministry of Economy, Trade, 
and Industry has established a team to identify the appropriate mix of 
regulatory measures, public support and private sector voluntary 
efforts to encourage deployment of energy technologies. As an example 
of Japanese policy for photovoltaic generation--an area where 
government can play a significant role in technology development and 
where the Japanese anticipate significant development--a buyback 
program of surplus electricity was established in November 2009. The 
Japanese government is strongly supporting Smart Grid demonstration 
projects as one way to build market share.
    In the case of China they vaulted past Denmark, Germany, Spain and 
the United States last year to become the world's largest maker of wind 
turbines. China has also leapfrogged the West in the last two years to 
emerge as the world's largest manufacturer of solar panels. And the 
country is pushing equally hard to build nuclear reactors and the most 
efficient types of coal power plants. Renewable energy industries in 
China have seen rapid expansion recently, with employment reaching 1.12 
million in 2008 and climbing by 100,000 a year, according to the 
government-backed Chinese Renewable Energy Industries Association. 
China intends for wind, solar and biomass energy to represent 8 percent 
of its rapidly growing electricity generation capacity by 2020. That 
compares with less than 4 percent now in China. The National 
Development and Reform Commission is drafting a plan to accelerate the 
development of strategic emerging industries including the new energy 
industry.
    While Japan, China and other Asian nations are moving aggressively 
toward clean energy applications, the United States has a very robust 
energy R&D investment environment of its own due to both public and 
private sector involvement. In addition to R&D investments by leading 
energy companies and innovative start-ups, the Recovery Act provides 
crucial Federal investments in basic and applied energy R&D. The Obama 
administration is committed to building upon these investments, 
particularly through research, development, demonstration, and 
deployment of clean energy technologies that can help transition the 
United States to a low-carbon economy. Moreover, while much of the 
manufacturing of clean energy goods occurs in China, significant 
innovations in clean energy are still taking place within the United 
States due to the ingenuity and entrepreneurship of the American 
workforce.
    Question 7. The department has made a concentrated effort on 
accelerating the breakthroughs in basic research into applied research 
and commercialization. There is some confusion up here on all the 
efforts underway, let me list them (1) Genomes-to-Life Centers, (2) 
Energy Frontier Centers, (3) Energy Innovation Hubs and (4) ARPA-E. Can 
you briefly update the committee how all of these efforts reinforce 
each other?
    Answer. How R&D is managed can impact the pace of innovation. Taken 
together, DOE's new and ongoing programs in energy R&D and technology 
demonstration and deployment--the recently launched Energy Frontier 
Research Centers, ARPA-E, and the Energy Innovation Hubs--comprise a 
robust portfolio of unique energy R&D modalities that complement each 
other and that maximize the Nation's ability to achieve energy 
breakthroughs as quickly as possible.
    Each of the programs you mentioned has unique characteristics and 
distinct purposes.
    DOE established three Bioenergy Research Centers (BRCs) in 
September 2007 under the Office of Science's Biological and 
Environmental Research (BER) program as part of its Genomic Sciences 
program (formerly called ``Genomes to Life''). Each BRC is funded at 
$25 million per year. The DOE BioEnergy Science Center is led by Oak 
Ridge National Laboratory; the DOE Great Lakes Bioenergy Research 
Center is led by the University of Wisconsin-Madison in partnership 
with Michigan State University; and the Joint BioEnergy Institute is 
led by Lawrence Berkeley National Laboratory. Chosen through a 
competitive merit review process, the BRCs are designed to accelerate 
fundamental scientific breakthroughs needed to make production of 
cellulosic biofuels (biofuels from nonfood plant fiber) cost-effective 
on a national scale. The BRC model is inherently multidimensional and 
multidisciplinary, using a large, highly integrated research team to 
achieve rapid scientific breakthroughs and solutions. In just two 
years, the BRCs have had notable success in integrating research and 
accelerating its pace, as reflected in the volume of peer-reviewed 
publications and patent disclosures and applications produced by the 
BRCs.
    Energy Frontier Research Centers (EFRCs) advance a broad range of 
fundamental science relevant to real-world energy systems. Each focuses 
on the long term basic research needed to overcome roadblocks to 
revolutionary energy technologies in a particular area. They are mostly 
multi-institutional centers composed of a self-assembled group of 
investigators, often spanning several science and engineering 
disciplines. This research is both ``grand challenge'' and ``use 
inspired'' fundamental science motivated by the need to solve a 
specific problem, such as energy storage, photoconversion, and 
CO2 sequestration. The choice of topics was at the 
discretion of the applicants in response to a funding opportunity 
announcement that solicited broadly across grand challenge and use 
inspired science with a funding range of $2-5 million per year per 
project. We expect that the EFRCs will contribute key breakthroughs 
with deep and lasting impact on a range of future energy technologies; 
in exceptional cases breakthroughs in the EFRCs could be picked up in 
the near term by ARPA-E, the Department's technology programs, or the 
private sector.
    The Energy Innovation Hubs are explicitly modeled on the BRCs. The 
Hubs will assemble a large group of investigators spanning science, 
engineering, and policy disciplines who will focus on solutions to a 
single critical national need identified by the Department. Top talent 
drawn from the full spectrum of R&D performers--universities, private 
industry, non-profits, and government laboratories--will drive each Hub 
to become a world-leading R&D center in its topical area. Each Hub's 
management structure must empower scientist-managers to act decisively 
to direct and redirect the course of research to maximize the rate of 
progress. Initial awards will be competed among R&D performers. Funding 
for the initial year for each of the first three Hubs is $22 million, 
with an expectation of $243 million annually in the subsequent four 
years, for a maximum of $119.2 million per Hub over the five-year term, 
subject to Congressional appropriations. In FY 2011, DOE is requesting 
$34 million for an additional Hub, including one-time funding of $10 
million for start-up needs, excluding new construction. We expect each 
Hub to accelerate significantly the pace of scientific and 
technological innovation in its area of concentration.
    ARPA-E supports research of potentially high commercial impact that 
the private sector deems too risky for investment. ARPA-E follows 
DARPA's highly entrepreneurial approach to mission-oriented R&D by 
funding scientists and engineers to move transformational energy 
technology rapidly beyond the risk barriers that prevent its 
translation from bench scale to the marketplace. Hence, ARPA-E does not 
fund discovery science nor does it support incremental improvements to 
current technologies. ARPA-E invests in advanced technologies that 
address U.S. technological gaps which if successful, will leapfrog over 
current approaches. ARPA-E program directors take a hands-on approach 
to managing their R&D activities. Funding is dependent on the needs of 
the project, and may range from $500,000 to as much as $10 million. 
Projects are selected on the basis of their potential to move rapidly 
towards commercialization; they will be evaluated at the 2-3 year mark, 
and will not be extended without demonstrable progress.
    The Hubs and BRCs, the EFRCs, and ARPA-E are complementary and 
together constitute a robust R&D strategy for accelerating energy 
technology innovation. The EFRCs focus on expanding the fund of 
knowledge at the beginning of the energy innovation pipeline; they 
represent a long term investment in the basic scientific research that 
will uncover new ground for future energy technologies. Discoveries in 
EFRCs should propagate to the Hubs and BRCs, ARPA-E and across the 
Department's applied R&D programs. ARPA-E focuses on overcoming risk 
bottlenecks and inefficiencies at the back end of the energy innovation 
pipeline that frustrate commercialization of promising, but risky, 
energy technologies. The larger investments of Hubs and BRCs are 
reserved for the most critical strategic R&D areas. The Hubs and BRCs 
integrate all facets of the energy innovation pipeline into a 
centrally-managed R&D activity; this investment level and management 
model ensures the fastest possible pace of scientific discovery and 
technological innovation.
    Question 8. Where do you see the focus of the ``Fossil Energy'' 
division of the DOE going into the future? Presently there is a great 
deal of carbon capture and sequestration R&D occurring at the DOE that 
is linked to coal. Is there any intention on the part of the 
Administration to broaden the scope of the existing CCS program to 
include other industrial applications, such as retrofits to refineries, 
cement manufacturing plants, steel mills, and so forth?
    Answer. The Office of Fossil Energy has done extensive work in 
carbon capture and storage (CCS) related to fossil energy facilities. 
Since over half of the Nation's electricity is produced by coal-fired 
power plants and coal has a greater emission of CO2 per unit 
of electricity produced than oil and natural gas, the emphasis on 
capturing carbon dioxide from this sector is essential. Electricity 
generation using carbon based fuels is responsible for over a third of 
the CO2 emissions in the U.S. and globally.
    Although the amount of CO2 from other industrial sources 
is smaller than coal, since the storage of CO2 is generally 
indifferent to the source of CO2, obtaining CO2 
from industrial sources is also an important pathway to pursue. 
Therefore, DOE recently released a Funding Opportunity Announcement for 
Industrial Carbon Capture and Storage from ARRA funding that will 
provide over $1.32B for large-scale industrial CCS projects from 
industrial sources (cement plants, chemical plants, refineries, steel 
and aluminum plants, and manufacturing facilities). Many of the carbon 
capture technologies being developed are applicable to both the utility 
and industrial sectors.
    Question 9. As new gas plays are set to begin production in the 
near future--is there any research that you feel could be conducted at 
the DOE to encourage the safe, efficient production of these 
unconventional resources?
    Answer. The United States' technically recoverable natural gas 
resource is estimated at more than 1,800 trillion cubic feet (TCF) 
according to the Annual Energy Outlook 2010 Early Release. This would 
be equivalent to almost a hundred years of natural gas supply at 
current U.S. usage rates. Shale gas production is one of the most 
rapidly expanding trends in onshore domestic oil and gas exploration 
and production today. State and local governments set the permitting 
requirements and monitor compliance of hydraulic fracturing 
activities.. The Department of Energy does not have a regulatory role 
concerning hydraulic fracturing. However, the EPA has initiated a study 
to explore environmental concerns on water resources related to broad 
application of hydraulic fracturing and the Department of Energy is 
participating in the study.
    Question 10. Given that we need to start rapidly deploying clean 
energy technologies today and in the near future if we are going to 
meet our energy and climate goals, how is DOE balancing its research, 
development, and deployment portfolio between longer term, breakthrough 
research and more near term applied development and deployment 
activities? I am thinking in particular of the grid scale energy 
storage program, where some technologies are nearly ready for the 
demonstration phase, but significant R&D is still needed for 
significant improvements.
    Answer. The Department takes a systems approach to its research 
investments and works to ensure that the offices engaged in basic and 
applied research integrate their efforts. With regard to energy 
storage, the Office of Electricity Delivery and Energy Reliability has 
the lead within the Department for applied energy storage research, 
development, analysis, and demonstrations associated with the electric 
grid. The program works closely with the Office of Science which 
conducts basic research in energy storage materials and the fundamental 
mechanisms that underpin electricity storage. The Office of Science 
recently selected six Energy Frontier Research Centers to support 
energy storage research. In addition, the Advanced Research Projects 
Agency-Energy (ARPA-E) focuses on developing leapfrog solutions for 
high capacity, utility-scale energy storage applications. ARPA-E 
recently selected several innovative energy storage projects for 
funding as a result of its first solicitation for breakthrough 
technologies. Also, the Office of Energy Efficiency and Renewable 
Energy evaluates where energy storage systems can support the 
application of renewable technologies it develops and sponsors 
demonstrations of on-site energy storage technologies to support 
renewables deployment.
  Responses of the Hon. Steven Chu to Questions From Senator Murkowski
    Question 1a. In a time of significant budget constraints, long-
range technologies such as fusion ene gy can often become easy targets 
for cuts. The U.S. has committed over $1B to provide components, 
personnel and direct funding for the construction of the ITER project 
in France. This scientific facility intends to demonstrate the 
scientific and technological feasibility of fusion energy; yet, it is 
just one of the steps required to eventually development a fusion power 
plant.
    In your opinion, should the U.S. continue to invest in long-range 
technologies such as fusion?
    Answer. Fusion research is a high-risk, high-payoff endeavor. The 
promise of fusion is an energy system whose fuel would be obtained from 
seawater and from plentiful supplies of lithium in the earth and whose 
resulting radioactivity is modest compared to fission; and it would 
emit no greenhouse gases into the atmosphere. But, the scientific risks 
are admittedly substantial, and overcoming them will require sustained 
levels of investment over many years.
    We believe the U.S. should continue such investment in fusion 
energy research, however, because of its unmatched potential to 
radically transform global energy usage in the long term. Failing to 
invest could leave the U.S. at a serious competitive disadvantage to 
countries which continue their substantial and sustained investments in 
fusion energy research.
    Question 1b. Is the U.S. domestic fusion program sufficiently 
robust to fully utilize the potential discoveries from the ITER 
experiments and have the next set of facilities and research priorities 
been sufficiently established to move fusion from a science project to 
an energy project?
    Answer. Today, the domestic fusion community is engaged in a robust 
program of research at major U.S. facilities which furthers the 
science, trains the next generation of fusion researchers, and sustains 
U.S. leadership in many aspects of the fusion sciences. The U.S. 
research program has been particularly effective in improving the ITER 
design. For example, the ``dynamic range'' of the plasmas that ITER 
will be capable of creating has been significantly increased in large 
part through U.S. intellectual leadership, and that leadership is 
expected to continue to make major contributions as the ITER program 
advances.
    Question 2. Many coastal communities across the nation, including a 
number of isolated villages in Alaska that rely on diesel generators, 
have ready access to clean wave, tidal, and ocean energy resources if 
the technology can be advanced. What is the Department doing to support 
bringing these new technologies on-line and can more be done sooner to 
hasten the development of this industry?
    Answer. The following means and strategies will serve to identify 
and focus the needs of the emerging water power industry, and enable 
prioritization of RDD&D requirements and quantification of the 
potential barriers of this emerging industry. Ultimately, reducing the 
industry's barriers to deployment may result in significant cost 
savings and reductions in GHG emissions, reliance on carbon emitting 
power generation, and fuel imports.
    Strategies for marine and hydrokinetic (MHK) technology development 
and testing include:

   Facilitate in-water device testing for higher maturity 
        technologies
   Support rigorous device testing process for developing 
        technologies
   Support R&D to identify technology improvement opportunities
   Collect and disseminate validated cost and performance data 
        for technologies and projects

    Strategies for MHK market development, project siting and resource 
assessments include:

   Study and validate estimates of extractable energy by 
        resource and technology type
   Support the generation of site-specific environmental data
   Improve the prediction, monitoring, and evaluation of 
        environmental impacts
   Collect, synthesize, evaluate and disseminate existing 
        impact information
   Build consensus among stakeholders on a framework to 
        minimize and mitigate potential impacts
   Develop and disseminate information that directly affects 
        the MHK industry
   Engage in strategic partnerships with wave, tidal, and ocean 
        thermal technology developers and industry to develop a roadmap 
        for technology development and deployment to accelerate water 
        power industry growth and the creation of workforce needs in 
        shipyards, port facilities, and related maritime industries.

    Question 3. Your Department has worked hard to expand federal aid 
for geothermal development. I appreciate the speed in which you 
allotted the roughly $400 million provided in last February's stimulus 
package to reinvigorate the geothermal program at DOE--a program that 
had been on life support as recently as three years ago. I also 
appreciate that you are providing aid to both conventional geothermal 
vent projects and for research and demonstration efforts on enhanced 
geothermal systems. I am curious where you see the program now heading 
and whether you would support efforts to more fully implement Section 
625 of Energy Independence and Security Act of 2007 that crafted a 
federal grant program to help build geothermal projects, especially in 
areas where electricity is costing more than 150% of the national 
average?
    Answer. The Department's Geothermal Technologies Program (GTP) 
recognizes the importance of addressing the ``high-cost regions,'' 
through the development of geothermal projects, as directed in Section 
625 of the Energy Independence and Security Act of 2007. Specifically, 
GTP included ``projects in high electricity cost regions'' as a program 
policy factor in the selection process in three of its Recovery Act 
Funding Opportunity Announcements (FOAs):

   Recovery Act--Geothermal Technologies Program: Ground Source 
        Heat Pumps (DE-F0A-0000116);
   Enhanced Geothermal Systems Research, Development, and 
        Demonstration (DEPS36-08G098008); and
   Recovery Act: Geothermal Technologies Program (DE-FOA-
        0000109).

    At least seven of the awards from GTP's recent Recovery Act FOAs 
were made to projects in high cost regions. GTP's plans to continue 
considering high cost regions as a program policy factor during the 
project selection process.
    Question 4. Section 803 of the 2007 Energy Independence and 
Security Act authorized a grant program to provide grants of up to 50% 
of the cost of building renewable energy projects--all types of 
renewable energy projects--in Alaska. So far the Department has never 
proposed any funding to implement the act, even though the cost of 
energy in Alaska, especially in rural Alaska, is averaging about nine 
times more than in the Lower 48 states. Would you support some funding 
to begin to implement the program to help get more wind, solar, 
geothermal, small hydro and ocean energy projects underway in Alaska?
    Answer. To date the Department of Energy (DOE) has not requested 
any funds to implement section 803 of EISA. The Department uses 
appropriated resources to support competitive and formula-based grants 
for renewable development. Some examples of renewable investments made 
through Recovery Act allocations in Alaska include:

          1. Naknek Electric, geothermal project--$12.4 million;
          2. University of Alaska Fairbanks-Alaska Center for Energy 
        and Power, geothermal for Pilgrim Hot Springs--$4.6 million;
          3. Fort Yukon/Council of Athabascan Tribal Governments, 
        biomass development--$1.2 million;
          4. Haida Corporation, Reynolds Creek Hydroelectric--$1.1 
        million;
          5. Kootznoowoo Inc, Thayer Lake Hydroelectric--$1.1 million;
          6. Chaninik Wind Group, Village energy smart grid and wind-
        diesel hybrid systems--$750,000;
          7. Cook Inlet Tribal Council, weatherization apprenticeships 
        and building feasibility study--$253,000;
          8. Native Village of Eyak, wind energy resource assessment--
        $248,000;
          9. Chickaloon Village, renewable energy feasibility study--
        $244,000; and
          10. Central Council of Tlingit and Haida Indians, 
        weatherization $200,000.

    Through the National Renewable Energy Laboratory's (NREL) 
Transforming Energy in Alaska (TEA) effort, DOE is currently supporting 
the Cold Climate Housing Research Center's Sustainable Northern Shelter 
near net zero residential building program; the Alaska Center for 
Energy and Power's monitoring program for wind-solar-diesel hybrid 
power systems; and the Renewable Energy Alaska Project's Alaska 
Efficiency Challenge. In addition, NREL has provided technical 
assistance to the state, numerous village utilities, private industry 
tidal and in-stream hydrokinetic developers, Native corporations, and 
others. Other TEA initiatives under NREL include publication of a 
document on Renewable Energy and Energy Efficiency Opportunities and 
Challenges in Alaska, a research paper on workforce development, and 
encouraging private industry to invest in renewable energy in Alaska to 
foster local job creation. TEA has recently begun drafting a village 
biomass development handbook that will be valuable for accelerating 
biomass projects in rural Alaska.
    Direct funding under the Recovery Act has also supported the State 
Energy Program ($28 million), Weatherization Assistance Program ($18.5 
million), and Energy Efficiency and Conservation Block Grants ($12 
million to tribes and $16.5 million to the state of Alaska) in Alaska. 
The ten examples listed above are all part of these programs.
    Another DOE-led initiative that is being implemented by both NREL 
and the National Energy Technology Laboratory (NETL) is the conversion 
of U.S. Coast Guard facilities heating from diesel fuel to biomass 
where available. The current focus within Alaska has been on the USCG 
Kodiak base, the largest in the country, as well as bases in Sitka, 
Juneau, Ketchikan, and Cordova. This effort, when fully implemented, 
may provide enough demand to establish wood pellet markets in southeast 
and south central Alaska from local suppliers.
    Question 5. I wanted to thank you for your comments last week 
regarding the practice of hydraulic fracturing and that it can be 
conducted safely. In the DOE's plans for R&D, do you foresee any 
opportunity to help provide certainty to natural gas consumers that 
we'll continue to see a stable supply as long as these drilling 
techniques continue safely?
    Answer. The United States' technically recoverable natural gas 
resource is estimated at more than 1,800 trillion cubic feet (TCF) 
according to the Annual Energy Outlook 2010 Early Release. This would 
be equivalent to almost a hundred years of natural gas supply at 
current U.S. usage rates. Shale gas production is one of the most 
rapidly expanding trends in onshore domestic oil and gas exploration 
and production today. Consistent with the President's FY 2011 budget 
request to repeal the Ultra-Deepwater and Unconventional Natural Gas 
mandatory program and to request no funding for Fossil Energy's Oil and 
Natural Gas programs, hydraulic fracturing R&D will not be continued in 
2011.
    Hydraulic fracturing involves the pumping of a fracturing fluid 
under high pressure into a formation, such as shale, to generate 
fractures or cracks in the target rock formation. This allows the 
natural gas to flow out of the formation and into a production well. 
Ground water is protected during the fracturing process by a 
combination of the casing and cement that is installed when the well is 
drilled. State and local governments set the permitting requirements 
and monitor compliance of hydraulic fracturing activities. The 
Department of Energy does not have a regulatory role concerning 
hydraulic fracturing. However, the EPA has initiated a study to explore 
environmental concerns on water resources related to broad application 
of hydraulic fracturing and the Department of Energy is participating 
in the study.
    Question 6. Since you began as Energy Secretary, you've stayed 
above the fray on some of the more controversial issues surrounding 
fossil fuels. Between your travels and your efforts at running the 
numbers of what we use, as well as our infrastructural capacities, has 
your outlook for the role of natural gas in a cleaner energy economy 
been augmented at all?
    Answer. Natural gas will continue to play a large role in 
diversifying our energy supply and increasing our energy security. 
Natural gas will also help enable renewable energy technologies 
expansion in the market.
    Question 7. According to a Department of Energy report entitled 
Energy Demands on Water Resources, Report to Congress on the 
Interdependency a/Energy and Water, the amount of water consumed per 
MWh of electricity produced from a Concentrating Solar Power (CSP) 
plant with wet cooling is approximately twice as much as fossil fuel 
facilities and is generally higher than a nuclear plant with the same 
type of cooling technology. Given the significant amount of water used 
by CSP and the prolonged drought plaguing the southwest, how will the 
Department of Energy ensure that solar energy development does not 
deplete scarce western water resources?
    Answer. Nuclear and coal power plants are typically water-cooled 
and consume between 400 and 750 gallons of water per megawatt-hour 
(MWh) of electricity produced. A recent study done by the engineering 
firm Worley-Parsons for the National Renewable Energy Laboratory 
compared an air-cooled parabolic trough solar power plant to a water-
cooled one.\1\ This study found that a water-cooled trough plant 
consumes about 950 gallons of water per MWh, whereas an air-cooled 
solar plant consumes only 70 gallons per MWh--93 percent less water use 
than wet cooling and up to 90 percent less water than a typical nuclear 
or coal power plant. Air cooling is not as efficient as water cooling 
and so adds an estimated five percent to the levelized cost of 
electricity. Solar power plants can also use hybrid dry/wet cooling 
systems, which are air-cooled throughout the year but use some cooling 
water on the hottest days. Such systems would have a water usage and an 
electricity cost somewhere between the values for air-cooled and water-
cooled plants depending on the ratio of air to water cooling.
    Question 8. According to National Renewable Energy Lab, the 
voluntary renewable energy market is responsible for half of all green 
power in the United States. At a conference this past fall, I 
understand that you committed to looking into how a Federal Renewable 
Electricity Standard and/or a Cap-and-Trade program may inadvertently 
impact the voluntary energy market. For example, the state of Oregon's 
Attorney General has stated that double counting renewable energy 
credits may violate consumer protection standards. What is the result 
of your examination?
    Answer. There are a few issues that arise with respect to how a 
federal renewable electricity standard (RES) may interact with 
voluntary renewable energy markets, including issues of double counting 
and treatment of existing contracts. Regarding carbon cap and trade 
legislation, the primary issue is whether voluntary renewable energy 
purchasers will affect overall greenhouse gas emissions (i.e., whether 
their purchases result in true environmental benefits), These issues 
are important and will continue to be examined.
    Question 9. With all the attention that has been given to the back-
end of the fuel cycle as we look to expand the use of nuclear power to 
reduce our greenhouse gas emissions, it is easy to forget the front-end 
of the fuel-cycle. Does the Department of Energy have a policy to 
increase domestic supplies of uranium?
    Answer. The Department of Energy agrees that the nation must have 
access to an adequate supply of uranium fuel to support the 
Administration's view that nuclear energy should be an important part 
of our country's energy mix going forward. However, the Department does 
not have a specific policy on uranium mining, as this does not come 
within the Department's jurisdiction. With regard to the construction 
of new front-end fuel cycle facilities in the United States, the 
Department is authorized to make available $2 billion in loan 
guarantees to qualified applicants, and applications for loan 
guarantees for two proposed enrichment facilities are presently being 
evaluated by the Department's Loan Guarantee Program Office.
    Responses of the Hon. Steven Chu to Questions From Senator Wyden
    Question 1a. As we discussed in the hearing, I believe it is 
important to make sure that the technology that is developed in the 
U.S. is also manufactured in the U.S. This production can supply the 
domestic market and foreign ones, creating and sustaining good American 
jobs. The Department of Energy (DOE) plays a major role in 
technological research, development and demonstration, and is also 
playing a growing part implementing domestic production incentives, 
like those found in section 48C of the Internal Revenue Code. What 
practices or procedures does the DOE have in place to consider the 
export potential of U.S. technology that is financed and produced in 
response to federal initiatives? Is there any coordination or 
consultation with the other relevant federal agencies or other 
stakeholders? What coordination measures does DOE intend to put in 
place in order to maximize the assets of DOE and other relevant 
agencies like the U.S. Department of Commerce?
    Answer. When making investments in clean energy technologies, DOE 
does consider the potential global benefit of a given technology. DOE 
also participates in several interagency groups that address deployment 
and export of clean energy technology. The most prominent of the 
working groups is the Trade Promotion Coordinating Committee (TPCC) 
Working Group on Alternative Energy. The TPCC was established by 
Executive Order 12870 and includes representatives of more than 20 
agencies involved in trade, exports and clean energy. DOE is working 
with the Department of Commerce and other agencies to invigorate the 
TPCC clean energy export efforts to provide greater opportunities for 
U.S clean energy technology companies.
    Question 1b. What additional coordination measures do you intend to 
put in place with the Commerce Department to address export clean 
energy technology opportunities and foreign competition?
    Answer. DOE and Commerce are working together, directly through the 
TPCC Working Group on Alternative Energy to identify and implement 
effective clean energy export initiatives. The Working Group is seeking 
to leverage all of the relevant USG programs on export promotion in a 
coordinated effort that provides the most value to U.S. clean 
technology companies and enhances their ability to compete effectively 
in global markets. This effort by the Working Group will include, but 
is not limited to, examining the best potential export markets for 
specific technology deployment, addressing export financing needs of 
U.S. companies, and ensuring that U.S. companies have a level playing 
field to fairly compete in overseas markets.
    Question 2. Europe has invested roughly a $100 million dollars in 
its wave energy research center in Scotland, while here at home DOE has 
invested just a few million dollars on our wave energy centers in 
Hawaii and Oregon. How are you factoring the research activities of 
other countries into your own Energy Department research funding 
priorities?
    Answer. The Office of Energy Efficiency and Renewable Energy's 
(EERE) marine and hydrokinetic (MHK) technologies program (including 
ocean wave research) provides U.S. input into the development of 
international standards for MHK technologies, partners with the global 
community and Federal regulatory agencies, coordinates in international 
partnerships, and facilitates DOE's leadership role in investigating 
the potential environmental impacts of ocean energy systems. The FY 
2011 budget request for Water Power is about $40 million, of which MHK 
and Conventional Hydro (CH) each receive about half.
    Question 3. What criteria and procedures does the Department use to 
measure the trade and sensitivity of clean energy technologies in 
establishing its research, development, and commercialization funding 
priorities?
    Answer. Central to the Department's R&D mission is spurring 
development of clean energy technologies, the results of which are 
intended to drive innovation across the economy and enhance American 
competitiveness. Finding innovative and affordable ways to transition 
our economy to a low carbon future is one of our top three strategic 
priorities. When setting investment priorities, DOE does weigh the 
potential benefits of a technology's application globally, such as 
technologies that permit the low-carbon use of coal. The Department 
also considers employment and trade impacts of clean energy 
technologies, selectively, on a case-by-case basis in establishing 
priorities for investments in technology development and deployment.
   Response of the Hon. Steven Chu to Question From Senator Brownback
    Secretary Chu, I appreciate your willingness to appear before our 
committee and talk about the research and development needs of your 
agency regarding medium and long-term climate concerns. I am hoping you 
are also considering the needs of private companies that are also 
working to develop new technologies that will help DOE and this country 
meet the medium and long-term challenges of climate change. I agree 
that research and development is the key to better understanding our 
impact on our surrounding world.
    As you know, I am a strong supporter of the cellulosic ethanol 
industry. I believe that technology can go a long ways towards energy 
independence. Cellulosic ethanol is being produced in the laboratory 
for less than $2.25 a gallon. We need DOE to help take the R and D to 
the next level by helping commercialize that industry. Congress has 
provided DOE with the authority necessary to implement a robust loan 
guarantee program. Yet, the cellulosic industry is struggling to build 
it first plant, despite having a shovel ready plant waiting for 
financing in Kansas.
    Question 1. Mr. Secretary, I would like to ask you to discuss with 
the committee your plans for commercializing the cellulosic industry.
    Answer. The Departments' Biomass Program and Loan Guarantee Program 
work in conjunction to support the development of cellulosic ethanol 
from research and development, demonstration and piloting, and finally, 
full commercial scale-up. In 2009, the Department's Biomass Program 
utilized over $610 million dollars in Recovery Act funds to increase 
investments in integrated biorefineries at the pilot and demonstration 
scale as well as for biofuels infrastructure activities. This Recovery 
Act funding is in addition to the over half of a billion dollars of DOE 
investments in integrated biorefinery projects from Fiscal Years 2007 
through 2010. The purpose of DOE's investments in pilot, demonstration, 
and small commercial scale biorefineries is to generate techno-economic 
data from their operations in order to validate full commercial-scale 
readiness. Once a technology has been proven in the pilot and 
demonstration phase, it may be eligible for a DOE loan guarantee to 
support the project's full commercial scale up.
  Responses of the Hon. Steven Chu to Questions From Senator Menendez
    Question 1. Secretary Chu, it has been almost a year since the 
Recovery Act became law and, although selections have been announced, 
the $4 billion in Smart Grid Demonstration and Investment Grants have 
not actually been delivered to recipients. Can you tell us when this 
money will actually go out the door and explain why the long delay?
    Answer. The Smart Grid Investment Grant (SGIG) and the Smart Grid 
Demonstration (SGD) programs are managed by the Office of Electricity 
Delivery and Energy Reliability (OE). SGIG project selections were 
announced on October 27, 2009. SOD project selections were announced on 
November 24, 2009. Since the selections were made the Department has 
been in discussions with selectees for thel 00 SGIG and 32 SGD projects 
that were selected for grants.
    While it generally takes a month or more after selection until 
grants are awarded, several factors have complicated finalization of 
awards. First, many of the selected organizations have never received 
grants from the Federal Government before and are not familiar with 
policies, processes, and procedures associated with government grants. 
Second, the scope and technical complexity of the projects involve more 
than typical levels of collaboration between the Department and the 
selected organization on topics such as cost-benefit analysis, 
interoperability, cyber security, and Recovery Act-required provisions 
and reporting requirements.
    The Department obligated more than $2 billion of the $3.4 billion 
for SGIG and more than $500 million of $620 million for SGD grants in 
December 2009. However, the selected organizations have raised a number 
of significant but similar crosscutting issues that have to be 
addressed, so discussions with all selectees are ongoing. Issues 
include Buy American provisions in the Recovery Act, the applicability 
of the Davis-Bacon Act, property ownership rights for equipment 
purchases, and potential problems with obtaining approvals from local 
regulatory or oversight agencies such as Public Utility Commissions. 
These issues are being addressed, and several organizations have 
recently expressed willingness to move on to award.
    The remaining issue of significant importance to many of the 
organizations is the tax treatment of grant receipts. Because DOE has 
no jurisdictional authority on tax related issues, DOE is working with 
the Department of Treasury and Internal Revenue Service and is 
providing requested information to them in order to, facilitate any 
guidance that may be issued.
    The Department is working expeditiously to address remaining issues 
so that grants can be awarded as soon as possible.
    Question 2. Secretary Chu, I applaud the Department's work to 
improve wind technology and increase the use of wind energy in the 
United States. Today's utility wind programs focus on land-based, low 
altitude wind--that is wind turbines 300 feet and below. Offshore wind 
and wind at higher altitudes, between 1,500 and 3,000 ft are much 
stronger and more consistent. Can you tell us what steps the DOE is 
taking, or investments it maybe making, to help harness offshore wind 
and high altitude wind and its vast energy resource? Has the 
Department's Advanced Research Projects Agency-Energy (ARPA-E) funded 
any of these projects?
    Answer. Offshore wind energy can contribute substantial amounts of 
clean, domestic, renewable electricity to the nation's energy supply. 
The National Renewable Energy Laboratory estimates that U.S. offshore 
wind resources, including the Great Lakes, technically may have the 
potential to produce in excess of 2500 Gigawatts of electric power. The 
Department's 20% Wind Energy by 2030 report concludes that at least 54 
Gigawatts of this potential could realistically be developed by 2030. 
The commercialization and deployment of offshore wind energy, however, 
faces many challenges that require targeted research and development 
(R&D) efforts.
    The Department is investing in R&D projects that will address the 
barriers to offshore wind energy deployment and facilitate the growth 
of a sustainable, domestic offshore wind industry. In Fiscal Years 2009 
and 2010, the Department has funded projects totaling over $95 million, 
including $77 million through the American Recovery and Reinvestment 
Act of 2009, to address the technical, environmental, and siting 
challenges to offshore wind energy deployment. In addition, the 
Department's Fiscal Year 2011 budget request proposes a significant 
allocation of funds to support offshore wind deployment.
    Department of Energy leaders have met with several companies 
developing high-altitude wind energy technologies to discuss the 
potential of this resource, as well as the barriers to successful 
deployment. Although the Department will continue to monitor high 
altitude energy concepts, it is not currently funding any research in 
this area.
    The Advanced Research Projects Agency--Energy (ARPA-E) funded two 
wind programs, PAX Streamline and FloDesign Wind, during its initial 
funding opportunity announcement. While neither are considered high 
altitude wind or offshore wind technologies, both are viewed as non-
traditional technologies that are transformational. PAX Streamline uses 
``blown wind'' technology that creates a virtual airfoil by jetting 
compressed air out of orifices along a wing and has the potential to 
introduce a radical simplification to the manufacture and operation of 
wind turbines. FloDesign is a shrouded, axial-flow wind turbine capable 
of delivering significantly more energy per unit swept area with 
greatly reduced rotor loading as compared to existing horizontal axis 
wind turbines and current duct augmented wind turbines.
   Response of the Hon. Steven Chu to Question From Senator Sessions
    Nuclear power is clearly a clean source of domestic energy that the 
American people support. And it has a role to play in reducing our 
dependence on foreign oil and reducing air pollutants. Nuclear power 
plants will provide long term economic benefits. It creates jobs, and 
the direct and indirect spending will strengthen local communities. 
Nuclear generated electricity is the serious solution for a clean 
energy future.
    Congress authorized $18.5 billion for nuclear loan guarantees in 
the 2005 Energy bill, hoping to revive development of the carbon-free 
source of energy. It has been five years and we are still waiting for 
the first loan guarantee to be issued. You have stated it is 
complicated but the Department plans to issue its first loan soon.
    Question 1a. In what time frame do you ultimately foresee the 
Federal Government issuing the first loan guarantee?
    Answer. The Loan Programs continue to be a priority at the 
Department of Energy and are getting the attention, departmental 
resources and oversight they need. In September 2009, the Department of 
Energy issued its first loan guarantee to Solyndra, a photovoltaic 
solar company based in Fremont, California for $535 million. In the 
same month, the Department also issued a loan to Ford Motor Company for 
$5.9 billion. After loan authority was first provided for nuclear power 
facilities in 2008, the 2008 Nuclear Power Facilities solicitation 
received 15 applications seeking $93.2 billion in loan guarantee 
authority. In April 2009, the Department selected four applications for 
final due diligence and underwriting, including outside legal, 
engineering, environmental, and market analysis. Each loan guarantee is 
a unique, complex financial instrument involving extensive negotiations 
with the applicant. Long development lead times are necessary for 
completing all of the steps preceding the issuance of loan guarantees 
for major energy projects.
    Question 1b. Why has it taken so long for the Department to make a 
decision?
    Answer. The projects seeking loan guarantees use innovative energy 
technologies and complex, tailored financial structures, requiring both 
in-depth due diligence (on the technical, financial, and legal aspects 
of each transaction) and extended negotiations to protect taxpayer 
dollars. That said, since the Program was first funded in 2007, the 
Department has made good progress. We have worked aggressively to 
assemble a staff of highly qualified project finance experts with 
significant private sector and government experience. The program has 
issued eight separate solicitations and reviewed hundreds of 
applications. In addition to the two projects brought to financial 
close, the Loan Programs have issued seven conditional commitments, 
some of which are expected to proceed to closing in the coming months. 
In October 2009, The Loan Guarantee Program initiated the Financial 
Institution Partnership Program, a streamlined set of standards 
designed to expedite DOE's loan guarantee underwriting process and 
leverage private sector expertise and capital for the efficient and 
prudent funding of eligible projects.
    At the beginning of 2009, the Loan Guarantee Program had only 
sixteen MI time federal employees. Currently, we have fifty-three 
federal employees supported by more than thirty contractors. These 
increased resources combined with diligent adherence to our principles 
of thorough review, detailed analysis and firm deal negotiation will 
result in substantially increased deal flow while maintaining our 
commitment to protecting the interests of the American taxpayer.
    Question 1c. What does the Department need to move forward?
    Answer. The Loan Programs face various challenges in meeting your 
mandates and goals. We have begun to address a number of the internal 
challenges and continue to improve and refine our processes. For 
example, we have already re-designed and streamlined the organization 
and simplified the application and review process. We shortened our 
intake and screening procedures, created sector-specific deal teams, 
and are now in the process of standardizing the application submission 
process. As a result, program underwriting capacity and efficiency are 
increasing.
    Question 2. President Obama has said that he supports nuclear 
energy if we can solve the waste problem. However, Yucca Mountain is 
``off the table'' and any questions from Congress are deflected by 
pointing to the Blue Ribbon Commission but the Department of Energy 
(DOE) has not announced the members of the panel. In fact, in an 
article titled, ``Chu Sidesteps 'Family' Nuke Dispute; Backs 
Responsible Gas Frocking,'' you were asked when DOE would announce the 
Commission members and you responded that ``only that the initiative 
was moving ahead.''

   Would you please elaborate on that statement?
   Where exactly is the Department in the decision-making 
        process?
   When will the ``promised'' Blue Ribbon Commission on nuclear 
        waste be established? Can we get a firm date?

    Answer. The members of the Blue Ribbon Commission on America's 
Nuclear Future (Commission) were announced in a press release 
(www.energy.gov/news/print/8584.htm) issued by the Department on 
January 29, 2010. The charter for the Commission was approved and filed 
with the appropriate Congressional offices on March 1, 2010, and has 
been published in the Federal Register (http://www.energy.govinews/
documents/BRC_Charter.pdf ). The Commission was directed to produce an 
interim report within 18 months and a final report within 24 months of 
its inception. The first meeting of the Commission will be held in 
Washington, D.C., on March 25-26, 2010.
    Question 3. If the Commission's options are being limited before 
the panel is even formed by not allowing Yucca Mountain to be an 
option, will the panel propose alternative locations or recommend a 
site selection process?
    Answer. The Blue Ribbon Commission is not a body that would 
recommend potential waste disposal sites or a process for selecting 
them. Rather, pursuant to Section 3 of its charter, the Commission's 
purpose is ``to conduct a comprehensive review of policies for managing 
the back end of the nuclear fuel cycle.'' The Commission is also to 
provide advice, evaluate alternatives, and make recommendations for a 
new plan to address these issues. The Department awaits the 
Commission's advice, evaluation and recommendations.
    Question 4. If Yucca Mountain is not an option, when do you 
anticipate ceasing payments from the Nuclear Waste Fund to the State of 
Nevada?
    Answer. The FY 2011 budget did not request any funds for malcing 
payments from the Nuclear Waste Fund to the State of Nevada in FY 2011.
    Question 5. The OMB has proposed barring DOE research on fast 
reactor recycling of nuclear waste and technical support for licensing 
of small, modular light-water reactors.

   Do you agree with the policy direction proposed by OMB 
        concerning allowable nuclear energy research and development 
        activities?
   What would be the effects of this type of proposal?

    Answer. The Budget provides the Department fairly broad latitude in 
determining which reactor technologies to research, including small 
modular and certain fast reactor designs. Depending on the ultimate 
waste management path chosen, fast reactors may be part of a long-term 
method of addressing the nuclear waste question and in that context, 
some continued R&D is appropriate. The Department has historically 
pursued fast reactor R&D in the context of spent fuel recycling. DOE 
works with partners in the Generation IV International Forum on certain 
fast reactor technologies and this work continues to be supported in 
the 2011 Budget.
    Regarding small modular reactors (SMRs), the Department requested 
$38.9 million in its FY 2011 budget proposal to conduct cost-shared 
nuclear technology R&D and development of advanced computer modeling 
and simulation tools that demonstrate and validate new design 
capabilities of innovative SMR designs, solicit and consider, through a 
competitive process, up to two SMR designs for financial cost-share 
assistance, support codes and standards development, and fund R&D 
activities for advanced non-light water reactor small modular designs, 
including high-temperature designs and ones and that utilize fast 
spectrum neutrons and associated fuel and reactor technologies, which 
offer added functionality and affordability. These funds will help 
illustrate the potential of the nascent SMR technology. The Department 
believes that there is a need and a market in the United States for 
SMRs.
    Question 6. In your opinion, do you believe that hydraulic 
fracturing can be extracted safely without threatening water supplies?
    Answer. Hydraulic fracturing involves the pumping of a fracturing 
fluid under high pressure into a formation, such as shale, to generate 
fractures or cracks in the target rock formation. This allows the 
natural gas to flow out of the formation and into a production well. 
Ground water is protected during the fracturing process by a 
combination of the casing and cement that is installed when the well is 
drilled. The water that is produced along with the gas after drilling 
and fracturing of the well must be managed through a variety of 
mechanisms, including underground injection, treat' ent and discharge, 
and recycling in a way that protects surface and ground water 
resources. State and local governments set the permitting requirements 
and monitor compliance of hydraulic fracturing activities. Please note 
that hydraulic fracturing when using diesel fuel is regulated under the 
Safe Drinking Water Act's Underground Injection Control program. The 
Department of Energy does not have a regulatory role concerning 
hydraulic fracturing. However, the EPA has initiated a study to explore 
environmental concerns on water resources related to broad application 
of hydraulic fracturing and the Department of Energy is participating 
in the study.

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