[Senate Hearing 111-]
[From the U.S. Government Publishing Office]
ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2010
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TUESDAY, MAY 19, 2009
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:22 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Byron L. Dorgan (chairman)
presiding.
Present: Senators Dorgan, Murray, Feinstein, Reed, Tester,
Bennett, Cochran, and Alexander.
DEPARTMENT OF ENERGY
STATEMENT OF HON. STEVEN CHU, SECRETARY
opening statement of senator byron l. dorgan
Senator Dorgan. I'm going to call the hearing to order.
This is a hearing of the Energy and Water Subcommittee of the
Appropriations Committee. Dr. Chu, we welcome you to the
subcommittee this morning. I'm sorry for the inconvenience.
We're starting a few minutes late. I think probably all three
of us were on the floor of the Senate, waiting for a 10 or
10:15 vote to occur, and we were just informed it won't occur
now, but will occur sometime in the future, either in the short
term or the longer term, any moment, or perhaps sometime today.
So that's the reason I was a bit delayed.
We have asked Secretary Chu from the Department of Energy
to come and present and discuss the 2010 budget. My expectation
is that we will be truncated a bit and probably be interrupted
with a short recess for a cloture vote. I want to note that we
will have Administrator D'Agostino before the subcommittee on
June 2, to discuss the National Nuclear Security
Administration's budget request. We're free to discuss any of
that today as well, but I simply want to remind members that
there will be further opportunity to discuss that in 2 weeks'
time.
This year's budget of $27.1 billion for the Department is
basically flat compared to 2009 appropriation numbers. A
substantial sum of money, a great deal of money, was provided--
$38.7 billion as a part of the American Recovery and
Reinvestment Act. Those numbers, of course, were not intended
to be a substitute for the regular budget. They were intended
for the purpose of moving money around the country, getting
people to work, getting contractors working and building
projects and doing things that are of substantial value, and
creating assets for the future.
I was a bit surprised when I received the President's
budget. Because I felt that with the economy recovery funds, a
very substantial amount of money, $38.7 billion, to the
Department, that we might see a very different approach in
trying to deal with the priorities in the Department. And I'm
going to talk to you today about some of the strengths that I
see in the budget request and some of the concerns that I have.
I think there are some good stories in the funding increase
proposals. I think we have to maximize the capability of
renewable energy in our country. In order to do that, we not
only have to say, ``Here's where the country's headed,'' and
plot a map to get there, but we have to create the capability
to have an interstate transmission capability that connects all
of America. That's not easy, that's very difficult to do.
The science budget is robust. There's also a proposal for
eight new Energy Innovation Hubs, which I view as a means of
helping the Department of Energy address what normally people
call the Valley of Death, the dilemma of getting technology
transferred from basic science to applied research and then out
into the marketplace, so that it accomplishes what we intend to
accomplish in the field of energy for our country's future.
I'm going to just truncate my statement. I will, during the
questioning, have an opportunity to go through a wide range of
subjects with you, Secretary Chu. I think what I'd like to do,
with the permission of our colleagues, is call on Senator
Bennett for a brief opening statement, call on the Secretary to
make a presentation. Perhaps about that time, we'll have to go
over for the cloture vote. And then come back and have
substantial opportunity this morning to ask questions of the
Secretary.
If that is all right with my colleagues, let me call on the
ranking member, Senator Bennett.
OPENING STATEMENT OF SENATOR ROBERT F. BENNETT
Senator Bennett. Thank you very much, Mr. Chairman. I will
abbreviate my opening statement. Mr. Secretary, welcome to the
subcommittee. We're glad to have you here in your first
experience in defending your budget. And having served in the
executive branch myself, I know that this isn't entirely your
budget, that the OMB has had a few suggestions, shall we say.
And you may or may not be pleased with those, but I won't call
on you to defend or comment on those.
Just a few highlights, you apply additional resources to
programs that appear to already enjoy some surpluses, but fail
to address chronic pension shortfalls that have been created by
the poor market performance. Now, I understand that these could
not be foreseen, but I don't think it's acceptable to ignore
the estimated $500 to $600 million shortfall spread across the
Department and the impact that that will have in undercutting
scientific and cleanup missions.
I continue my interest in NNSA and the labs, and would be
interested in talking to you about that and some of the
comments that you've made there. The Office of Science and
Renewable Energy has received nearly 50 percent of the stimulus
funding, and it seems unlikely that this will be spent before
the 2010 deadline. So we could talk about how that could be
shifted, it's not a matter of I don't favor this kind of thing,
but you can only shovel so much money out the door in certain
circumstances, and that's one thing that I would look at.
Funding for environmental cleanup is down $161 million.
There are two other factors that significantly increase the
deficit of this program. It fails to fully fund the pension
shortfalls that will reduce environmental cleanup by an
estimated $400 million in fiscal year 2010, and I've included
an amendment to the budget resolution to mitigate the impacts
that budgets will have on the cleanup. And I'm grateful, Mr.
Chairman, for your support in that effort.
The budget includes a $200 million tax on uranium fuel to
be paid by utilities, offsetting this to our overall budget
authority. If we don't do this--and it's frankly a little bit
of a budget gimmick--it creates a $200 million shortfall in our
bill. And this revenue isn't necessary, as there is $4.5
billion in existing balances. Those kinds of details, we would
talk through.
So with that, Mr. Chairman, I will leave it there and do
the best we can to move the hearing forward.
Senator Dorgan. Senator Bennett, thank you very much. Mr.
Secretary, I know that you personally worked hard on the budget
that was presented to us, but you did so with very limited time
and also with very limited staff. I regret that a good number
of your nominations are all being held up. I have spoken to the
Senator that has the hold. It's a hold that's very Byzantine,
as far as I'm concerned, because that Senator has been promised
a hearing date, which is what he wanted. So I hope that you get
those nominations through so that you can have a full
complement of staff.
But having done what you have done, please tell us the
justification for the administration's budget proposals for the
Department of Energy. Mr. Secretary, thank you for being here.
STATEMENT OF HON. STEVEN CHU
Secretary Chu. Okay, thank you. Chairman Dorgan, Ranking
Member Bennett, members of the subcommittee, I am pleased to be
before you today to present President Obama's fiscal year 2010
budget request for the Department of Energy.
The President's 2010 budget seeks to usher in a new era of
responsibility, an era in which we invest to create new jobs
and lift our economy out of recession, while laying a new
foundation for our long-term growth and prosperity.
President Obama's 2010 budget invests in clean, renewable
sources of energy, so we can reduce our dependence on oil,
address the threat of a changing climate, and become the world
leader in new, clean energy economy.
The 2010 budget request for the Department of Energy is
$26.4 billion, essentially flat compared to fiscal year 2009,
and it complements the significant energy investments in the
American Recovery and Reinvestment Act. This budget request
emphasizes science, discovery, and innovation to support the
key missions of the Department.
My written testimony includes an extensive breakdown of
this budget, and I'd like to use this time briefly to highlight
a few numbers and areas of particular importance. To promote
nuclear security in the President's ambitious non-proliferation
goals, the budget requests $9.9 billion for the National
Nuclear Security Administration.
To continue to accelerate legacy cleanup of our Nation's
nuclear weapons production, the budget requests $5.8 billion
for the Office of Environmental Management. To bolster the
Department's commitment to scientific discovery, the budget
requests $4.9 billion for the Office of Science. And fostering
the revolution in energy supply and demand while positioning
the United States to lead on a global climate change policy,
the budget includes requests for a range of energy investments,
including $882 million for the Office of Fossil Energy, $845
million for the Office of Nuclear Energy, and $2.3 billion for
the Office of Energy Efficiency and Renewable Energy.
That clean energy funding includes several notable
strategic investments, even as this budget holds the line on
spending overall. Solar power will receive $320 million, an
increase of 82 percent. Wind energy is funded at $75 million,
an increase of 36 percent. Funding for clean vehicle programs
is up 22 percent to $333 million, and funding for building
technologies is increased by 69 percent to $238 million.
Another significant increase is in the Office of
Electricity Delivery and Energy Reliability, which received
$208 million, 52 percent more than in fiscal year 2009, as it
works to develop a new smart electric grid. The request also
includes funding to implement the Loan Guarantee Program and
Advanced Technology Vehicle Manufacturing Loan Program.
With that brief overview, I want to turn to one of my top
priorities in the budget as Secretary, amplifying the Office of
Science's fundamental research with innovative approaches to
solving the Nation's energy problems. Specifically, this budget
request includes three initiatives designed to cover a spectrum
of basic to applied science to maximize our chances of energy
breakthroughs. The fiscal year 2010 budget will launch eight
Energy Innovation Hubs, while the Energy Frontier Research
Centers and the ARPA-E were launched last month.
Let me briefly explain the differences among these
initiatives and why I believe launching these hubs is so
important. The EFRCs are small-scale collaborations,
predominately universities, that focus on overcoming known
hurdles in basic science that block energy breakthroughs, not
on developing energy technologies themselves.
ARPA-E is a highly entrepreneurial funding model that
explores potentially revolutionary technologies that are too
risky for industry to fund. The proposed Energy Innovation Hubs
will take a very different approach. They will be multi-
disciplinary, highly collaborative teams, ideally working under
one roof to solve priority technology challenges, such as
artificial photosynthesis, or creating fuels from sunlight.
A few years ago, I changed the course of my scientific work
to focus on solving our energy and climate challenges because
of the urgency of this issue and because I remain optimistic
that science can offer better solutions than we can imagine
today. But those solutions will only come if we harness the
creativity and ingenuity and intellectual horsepower of our
best scientists in the right way.
I'm convinced that launching Energy Innovation Hubs is a
critical next step in this effort. Bringing together the best
scientists from different disciplines in a collaborative effort
is our best hope of achieving priority goals, such as making
solar energy cost competitive with fossil fuels, or developing
new building designs that use dramatically less energy, or
developing an economical battery that will take your car 300
miles without recharging.
These are the breakthroughs we need, and the Energy
Innovation Hubs will help us achieve them. I saw the power of
truly collaborative science like this firsthand during my time
at Bell Laboratories. I believe that to solve the energy
problem, the Department of Energy must strive to be the modern
version of Bell Laboratories in energy research, and this is
what these hubs will do. These investments will pay for
themselves many times over and enhance America's
competitiveness on the green energy jobs of tomorrow.
A final initiative in the fiscal year 2010 budget is a
comprehensive K-20+ science and engineering effort called RE-
ENERGYSE, standing for REgaining our ENERGY Science and
Engineering Edge, funded at $115 million. Through RE-ENERGYSE,
the Department will partner with the National Science
Foundation to educate thousands of students at all levels in
the fields that contribute to our fundamental understanding of
energy science and engineering systems.
PREPARED STATEMENT
It is my firm belief that the short-term impact of the
Recovery Act, combined with the long-term vision in President
Obama's fiscal year 2010 budget, will lay the necessary
groundwork for a clean economy. Both President Obama and I look
forward to working with the 111th Congress to make this vision
a reality. I appreciate this opportunity to appear before you,
and I'm happy to take questions at this time.
[The statement follows:]
Prepared Statement of Hon. Steven Chu
Chairman Dorgan, Ranking Member Bennett, members of the
subcommittee, I am pleased to be before you today to present President
Obama's fiscal year 2010 budget request for the Department of Energy.
The President's 2010 budget seeks to usher in a new era of
responsibility--an era in which we invest to create new jobs and lift
our economy out of recession, while laying a new foundation for our
long-term growth and prosperity.
The fiscal year 2010 budget request of $26.4 billion provides the
next critical investment in a multi-year effort to address the
interconnected challenges of economic uncertainty, U.S. dependence on
oil, and the threat of a changing climate by transforming the way our
Nation produces and consumes energy. Meeting these challenges will
require both swift action in the near-term and a sustained commitment
for the long term to build a new economy powered by clean, reliable,
affordable and secure energy. We will also train the next generation of
a technical workforce and the scientific researchers needed to maintain
the United States' preeminent position in science and technology. At
its core, this budget request emphasizes science, discovery, and
innovation to support the key missions of the Department.
I want to note at the outset that in developing the fiscal year
2010 request the Department considered that the $38.7 billion of
American Recovery and Reinvestment Act of 2009 (Recovery Act) funding
received by the Department allows for the acceleration of a number of
important commitments. The Recovery Act makes investments in energy
conservation and renewable energy sources ($16.8 billion),
environmental management ($6 billion), loan guarantees for renewable
energy and electric power transmission projects ($6 billion), grid
modernization ($4.5 billion), carbon capture and sequestration ($3.4
billion), basic scientific research ($1.6 billion), and the
establishment of the Advanced Research Projects Agency-Energy (ARPA-E)
($400 million). These investments will help jumpstart the economy, save
and create jobs, and serve as a down payment on addressing fundamental
energy challenges, while reducing carbon emissions and U.S. dependence
on oil.
INVESTING IN SCIENCE TO ACHIEVE TRANSFORMATIONAL DISCOVERIES
The fiscal year 2010 budget request supports our strategic
framework by:
--Investing in science to achieve transformational discoveries;
--Fostering the revolution in energy supply and demand while
positioning the United States to lead on global climate change
policy;
--Increasing American economic competitiveness;
--Maintaining the nuclear deterrent, reducing the risk of nuclear
proliferation, and advancing nuclear legacy cleanup; and
--Improving the management of the Department.
The President has committed to doubling Federal investment in basic
research over 10 years. The Department will support this commitment by
investing in basic and applied research, creating new incentives for
private innovation, and promoting breakthroughs in energy. Our Nation's
ability to sustain a growing economy and a rising standard of living
for all Americans depends on continued advances in science and
technology. Scientific and technological discovery and innovation are
the major engines of increasing productivity and are indispensable to
ensuring economic growth, job creation, and rising incomes for American
families in the technologically-driven 21st century.
As Secretary, one of my top priorities is to amplify the
fundamental research undertaken by the Office of Science with novel
approaches to solving the Nation's energy problems. While the
Department has made important contributions over the years, despite
almost three decades of effort, we are still confronted by the
fundamental problems of energy security and environmental degradation
from our energy use. That is why I am proposing new approaches to
solving the energy question. Specifically, this budget request includes
three initiatives designed to cover the spectrum of basic to applied
science to maximize our chances of energy breakthroughs. The fiscal
year 2010 budget will launch eight Energy Innovation Hubs, while the
Energy Frontier Research Centers (EFRCs) and ARPA-E were launched last
month.
Let me briefly explain the differences and why I believe launching
these Hubs is so important.
EFRCs are small-scale collaborations (predominantly at
universities) that focus on overcoming known hurdles in basic science
that block energy breakthroughs--not on developing energy technologies
themselves.
ARPA-E is a highly entrepreneurial funding model that explores
potentially revolutionary technologies that are too risky for industry
to fund.
The proposed Energy Innovation Hubs will take a very different
approach--they will be multi-disciplinary, highly collaborative teams
ideally working under one roof to solve priority technology challenges,
such as artificial photosynthesis (creating fuels from sunlight).
A few years ago, I changed the course of my scientific work to
focus on solving our energy and climate challenges. I did so because of
the great national and global urgency of this issue--but also because,
as a scientist, I remain optimistic that science can offer us better
solutions than we can imagine today. But those solutions won't come
easily; they will only come if we harness the creativity and ingenuity
and intellectual horsepower of our best scientists in the right way.
Having dedicated the last several years of my work to solving the
energy challenge, I'm convinced that launching Energy Innovation Hubs
is a critical next step in this effort. Bringing together the best
scientists from different disciplines in collaborative efforts is our
best hope of achieving priority goals such as making solar energy cost
competitive with fossil fuels, or developing new building designs that
use dramatically less energy, or developing an economical battery that
will take your car 300 miles without recharging.
These are the breakthroughs we need--and the Energy Innovation Hubs
will help us achieve them. I saw the power of truly collaborative
science like this firsthand during my time at Bell Laboratories. I
believe that to solve the energy problem, the Department of Energy must
strive to be the modern version of Bell Labs in energy research, and
that is what these Hubs will do.
The scientific collaboration the Hubs will foster will be unique
and indispensable, and must be backed by a meaningful and sustained
investment. These investments will pay for themselves many times over,
ensuring American leadership and American competitiveness when it comes
to the green energy jobs of tomorrow.
The following is additional information about the three
initiatives:
--Energy Innovation Hubs.--In fiscal year 2010 the Department
proposes to fund eight multi-disciplinary Energy Innovation
Hubs, at a total of $280 million. Modeled after the
Department's Bioenergy Research Centers, the work of the Hubs
will span from basic research to engineering development to
commercialization and a hand-off to industry. Each Hub will be
funded at $25 million per year, with one-time additional start-
up funding of $10 million in the first year for renovation,
equipment and instrumentation.
The Hubs will support cross-disciplinary research and development
focused on the barriers to transforming energy technologies
into commercially deployable materials, devices, and systems.
They will advance highly promising areas of energy science and
technology from their early stages of research to the point
that the risk level will be low enough for industry to deploy
them into the marketplace. While the intent is to provide a
funding stream that is more dependable than the standard
funding mechanisms, renewal after 5 years will not be
automatic. To receive renewed funding, Hubs will be expected to
be delivering exceptional scientific progress.
The research Hubs will explore the following topics: Solar
Electricity; Fuels from Sunlight; Batteries and Energy Storage;
Carbon Capture and Storage; Grid Materials, Devices, and
Systems; Energy Efficient Building Systems Design; Extreme
Materials; and Modeling and Simulation.
--Energy Frontier Research Centers.--In fiscal year 2010 the
Department of Energy will continue to support Energy Frontier
Research Centers (EFRC). Currently there are 46 EFRCs, funded
at $2 to $5 million per year. These centers enlist the talents
and skills of the very best scientists and engineers to address
current fundamental scientific roadblocks to clean energy and
energy security. Roughly one-third of the centers are supported
by Recovery Act funding. These centers, involving almost 1,800
researchers and students from universities, national labs,
industry, and non-profit organizations from 36 States and the
District of Columbia, address the full range of energy research
challenges in renewable and low-carbon energy, energy
efficiency, energy storage, and cross-cutting science. EFRC
researchers take advantage of new capabilities in
nanotechnology, light sources that are a million times brighter
than the sun, supercomputers, and other advanced
instrumentation, much of it developed in collaboration with the
Department of Energy's Office of Science.
--Advanced Research Projects Agency-Energy (ARPA-E).--ARPA-E is a new
Department of Energy organization modeled after the Defense
Advanced Research Projects Agency, created during the
Eisenhower administration in response to Sputnik. The Recovery
Act provided $400 million and the fiscal year 2010 budget
requests $10 million for ARPA-E. The purpose of ARPA-E is to
advance high-risk, high-reward energy research projects that
can yield revolutionary changes in how we produce, distribute,
and use energy. It will ensure that the United States maintains
a technological lead in developing and deploying advanced
energy technologies.
ARPA-E seeks out the best ideas and assembles teams that can move
quickly to help bring the idea to market, and funds this work
through grants that range between $500,000 and $10 million.
Most projects will be funded with seed money that sunsets after
3 years. Research teams are expected to either make
exceptionally rapid progress or bring their technology to the
point the private sector can pick it up within that time.
These initiatives will be augmented with a broad educational effort
that cuts across DOE program offices to inspire students and workers to
pursue careers in science, engineering, and entrepreneurship
specifically related to clean energy. This education effort will help
to develop the scientific and technical expertise to sustain the new
energy economy and increase American competitiveness.
--RE-ENERGYSE (REgaining our ENERGY Science and Engineering Edge).--
As part of President Obama's recent address before the National
Academy of Sciences on reinvigorating scientific research and
innovation in the United States, the President announced a
joint education initiative between the National Science
Foundation and the Department of Energy to ``inspire tens of
thousands American students to pursue careers in science,
engineering and entrepreneurship related to clean energy.''
As part of this initiative, the Department will launch a
comprehensive K-20+ science and engineering initiative, funded
at $115 million in fiscal year 2010, to educate thousands of
students at all levels in the fields contributing to the
fundamental understanding of energy science and engineering
systems. This initiative, which complements the Department's
other education efforts, will provide graduate research
fellowships in scientific and technical fields that advance the
Department's energy mission; provide training grants to
universities that establish multidisciplinary research and
education programs related to clean energy; support
universities that dramatically expand energy-related research
opportunities for undergraduates; build partnerships between
community colleges and different segments of the clean tech
industry to develop customized curriculum for ``green collar''
jobs; and increase public awareness, particularly among young
people, about the role that science and technology can play in
responsible environmental stewardship.
Office of Science
The fiscal year 2010 budget requests $4.9 billion for the Office of
Science, a $184 million increase over fiscal year 2009. In general, the
2010 request will focus on breakthrough science while developing and
nurturing science and engineering talent. It will also increase funding
for climate science and continue America's role in international
science and energy experiments. The budget also invests in the next
generation of America's scientists by expanding graduate fellowship
programs in critical energy-related fields. This funding builds upon
the $1.6 billion provided in the Recovery Act for basic science
programs at the Department of Energy.
The Office of Science supports investigators from more than 300
academic institutions and from all of the DOE laboratories. The fiscal
year 2010 budget request will support about 25,000 Ph.D.s, graduate
students, undergraduates, engineers, and technicians. Approximately
24,000 researchers from universities, national laboratories, industry,
and international partners are expected to use the Office of Science's
scientific user facilities. The fiscal year 2010 request supports the
President's plan to increase Federal investment in the sciences and
train students and researchers in critical fields, to invest in areas
critical to our clean energy future, and to make the United States a
leader on climate change.
Two of the Department's eight Energy Innovation Hubs are requested
in the Office of Science in fiscal year 2010 ($70 million). These Hubs
will bring together teams of experts from multiple disciplines to focus
on two grand challenges in energy: the creation of fuels directly from
sunlight without the use of plants or microbes and advanced methods of
electrical energy storage.
The Office of Science supports a diverse number of research
programs including:
--High-Energy Physics ($819 million)
--Nuclear Physics ($552 million)
--Biological and Environmental Research ($604 million)
--Basic Energy Sciences ($1.7 billion)
--Advanced Scientific Computing Research ($409 million)
--Fusion Energy Sciences ($421 million)
fostering the revolution in energy supply and demand while positioning
the united states to lead on global climate change policy
U.S. dependence on oil is a national security challenge.
Furthermore, the United States has a responsibility to curb carbon
emissions to mitigate the effects of global climate change. The fiscal
year 2010 budget request will expand the use of low-carbon and
renewable energy sources and efficiency, and support the Smart Grid.
Deploying these technologies will position the United States to lead on
global climate change policy.
Energy Efficiency and Renewables
Achieving these goals requires changes to both the demand and
supply of energy. DOE is addressing both by improving the Nation's
energy efficiency to reduce energy demand and by investing in
technologies and approaches to transform energy supply and
transmission. The fiscal year 2010 budget request of $2.3 billion for
the Office of Energy Efficiency and Renewable Energy (EERE) will
transform the Nation's energy infrastructure by investing in a variety
of renewable sources of electricity generation and deploying
technologies to reduce our dependence on oil and decrease energy use in
homes, transportation, and industry. These sources of energy will
reduce the production of GHG emissions and usher in a revitalized
economy built on the next generation of domestic production.
Investments in efficiency R&D, grants to States and weatherization
assistance will have immediately tangible benefits by reducing energy
use, lowering energy bills, and reducing GHG emissions and helping to
create jobs across the country.
This budget request for EERE provides a diverse portfolio of
solutions to our energy and environmental challenges. This starts with
improving energy efficiency, which can be one of the cheapest, cleanest
means of reducing greenhouse gas emissions. The budget includes
significant increases in several programs in support of the President's
efforts to promote energy efficiency, including these increases:
--Building Technology Program $238 million (+$98 million or 69
percent)
--Vehicle Technology Program $333 million (+$60 million or 22
percent); and
The budget continues the shift to clean and renewable energy,
including these increases:
--Solar Energy Program $320 million (+$145 million, or 82 percent);
--Wind Energy Program $75 million (+$20 million, or 36 percent); and
--Geothermal Program $50 million (+$6 million or 14 percent.)
The budget also has funding for:
--Fuel Cells Technology ($68.2 million)
--Biomass and Biorefinery Systems R&D ($235 million)
--Water Power ($30 million)
--Industrial Technologies ($100 million)
--FEMP ($32.3 million)
--Weatherization ($220 million)
--State Energy Program Grants ($75 million)
Electricity Transmission and Reliability
The Nation's ability to meet the growing demand for reliable
electricity is challenged by an aging electricity transmission and
distribution system and by vulnerabilities in the U.S. energy supply
chain. Despite increasing demand, the United States has experienced a
long period of underinvestment in power transmission and infrastructure
maintenance. The majority of the power delivery system was built on
technology developed in the 1960s, 1970s and 1980s and is limited by
the speed with which it can respond to disturbances. This limitation
increases the vulnerability of the power system to outages that can
spread quickly and have regional effects. Deploying the next generation
of clean energy sources will require modernization of U.S. energy
infrastructure which will rely on digital network controls and
transmission, distribution and storage breakthroughs.
The proposed fiscal year 2010 Office of Electricity Delivery and
Energy Reliability budget provides $208 million, an increase of 52
percent over fiscal year 2009, and builds on the ``smart grid''
investments and other activities to modernize and secure the electric
grid provided by $4.5 billion of Recovery Act funds, supporting the
following areas:
--Clean energy transmission and reliability ($42 million)
--Smart grid research and development ($67 million)
--Energy storage ($15 million)
--Cyber security for energy delivery systems ($50 million)
--Permitting, siting and analysis ($6.4 million)
--Infrastructure security and energy restoration ($6.2 million)
Fossil Energy
The fiscal year 2010 budget request of $882 million for the Office
of Fossil Energy (FE) will help ensure that the United States can
utilize traditional domestic energy resources in a clean and affordable
manner. The United States has 25 percent of the world's coal reserves,
and fossil fuels currently supply 86 percent of the Nation's energy.
Low-carbon emissions coal plants and production of methane (natural
gas) from gas hydrates will help allow fossil fuels to be used as
abundant and low-carbon emitting energy resources. In direct support of
the Department of Energy's Energy Security mission, $229 million of the
$882 million has been requested to provide operations, maintenance and
repair funding for a Strategic Petroleum Reserve program that is
environmentally responsible and fully responsive to the needs of the
Nation and the public, protecting against potential disruptions in
foreign and domestic petroleum supplies.
The Department is committed to advancing Carbon Capture and Storage
(CCS) technologies in order to promote cleaner and efficient use of
fossil fuels. The $3.4 billion in Recovery Act funds, combined with
$222 million requested in fiscal year 2010 for CCS research and
development, is the keystone of the Department's clean coal research
program which seeks to establish the capability of producing
electricity from coal with dramatically reduced atmospheric emissions
of carbon dioxide.
In fiscal year 2010, the Energy Innovation Hub for CCS will focus
on enabling fundamental advances and discovery of novel and
revolutionary capture/separation approaches to dramatically reduce the
energy penalty and cost associated with CO2 capture.
The fiscal year 2010 budget request for FE funds the following
areas:
--Coal ($403.9 million) including $179.9 million for carbon
sequestration
--Fossil energy research and development ($617.6 million)
--Naval Petroleum and Oil Shale Reserves ($23.6 million)
--Strategic Petroleum Reserve ($229.1 million)
--Northeast Home Heating Oil Reserve ($11.3 million)
Nuclear Energy
The $845 million budget request for the Office of Nuclear Energy
(NE) recognizes that nuclear energy is a fundamental component of the
energy mix which currently supplies approximately 20 percent of the
Nation's electricity and over 70 percent of low carbon emitting
electricity.
In order to research and develop nuclear energy technologies that
could help meet non-proliferation and climate goals, and to maintain
the national nuclear technology infrastructure, the fiscal year 2010
budget request for NE funds the following areas:
--Nuclear Power 2010 ($20 million)
--Generation IV ($191 million)
--Fuel Cycle Research and Development Program ($192 million)
--Radiological Facilities Management ($77 million)
--Idaho Facilities Management ($203 million)
Loan Guarantee Program
In fiscal year 2010, the DOE will continue to accelerate the
availability of loans for innovative technologies through the Loan
Guarantee Program, while ensuring taxpayer interests are protected. The
Department requests $43.0 million in funding in fiscal year 2010 to
operate the Office and support personnel and associated costs. This
request will be offset by collections authorized under title XVII of
the Energy Policy Act of 2005 (EPACT 2005). Additionally, the fiscal
year 2010 budget provides $20 million for administrative costs to help
enable the Advanced Technology Vehicle Manufacturing Loan Program to
support up to $25 billion in loans to automobile and automobile part
manufacturers for re-equipping, expanding, or establishing
manufacturing facilities to produce advanced technology vehicles or
qualified components.
MAINTAINING THE NUCLEAR DETERRENT, REDUCING THE RISK OF NUCLEAR
PROLIFERATION, AND ADVANCING NUCLEAR LEGACY CLEAN-UP
Nuclear Security
The National Nuclear Security Administration (NNSA) continues
significant efforts to meet administration and secretarial priorities,
leveraging science to promote national security. The fiscal year 2010
President's budget request is $9.9 billion, which is $815 million more
than the fiscal year 2009 request, to meet defense and homeland
security-related objectives.
The United States continues a fundamental shift in national
security strategy to address the realities of the 21st century. The
fiscal year 2004 directed reductions to the U.S. nuclear weapons
stockpile were completed in 2007, 5 years early. Today's nuclear
weapons stockpile is now the size envisioned for 2012, and by 2012 it
will be almost 15 percent less than that--a total that is just 25
percent of what it was at the end of the cold war. Consistent with the
administration's Nuclear Posture Review, the Department of Energy has
created a vision for a revitalized nuclear weapons complex that is
significantly more agile and responsive, and will allow further
reductions in the nuclear stockpile by providing an industrial hedge
against geopolitical or technical problems.
The fiscal year 2010 budget request for NNSA funds the following
areas:
--Weapons Activities ($6.4 billion)
--Defense Nuclear Nonproliferation ($2.14 billion)
--Naval Reactors ($1.0 billion): $175 million increase from fiscal
year 2009
--Office of the Administrator ($420.8 million)
Environmental Management
The Federal Government has the dual responsibilities of addressing
the nuclear weapons production legacy of our past and providing the
necessary environmental infrastructure for today that will ensure a
clean, safe and healthy environment for future generations. To deliver
on the Department's obligations stemming from 50 years of nuclear
research and weapons production during the cold war, the Office of
Environmental Management (EM) continues to focus its resources on those
activities that will yield the greatest risk reductions, with safety as
the utmost priority. To achieve a balance of risk reduction and
environmental cleanup, the fiscal year 2010 request of $5.8 billion, a
decrease of 3 percent from fiscal year 2009, builds upon the $6 billion
in Recovery Act funding. These investments are already having an
impact. Fifty skilled new workers recently reported to work at the
Savannah River Site.
This request supports the following activities, in priority order:
--Essential activities to maintain a safe and secure posture in the
EM complex
--Radioactive tank waste stabilization, treatment, and disposal
--Spent nuclear fuel storage, receipt and disposition
--Special nuclear material consolidation, processing, and disposition
--High priority groundwater remediation
--Transuranic and mixed/low level waste disposition
--Soil and groundwater remediation
--Excess facilities deactivation & decommissioning
In developing the fiscal year 2010 budget for its environmental
cleanup efforts, the Department will focus on achieving the greatest
risk reduction, while also incorporating regulatory compliance
commitments and best business practices, to maximize cleanup progress.
In fiscal year 2010, EM is aggressively pursuing the consolidation and
disposition of surplus plutonium and other special nuclear materials to
enhance national security and to minimize the storage risks and costs
associated with these materials. In addition, EM continues to make
significant progress on the construction and operation of waste
treatment and immobilization facilities across the complex. The budget
continues shipments of remote-handled transuranic waste to the Waste
Isolation Pilot Plant.
The fiscal year 2010 budget request for EM funds the following
activities:
--Non-Defense Environmental Management ($238 million)
--Defense Environmental Management ($5.5 billion)
--UED&D Fund ($559 million)
Yucca Mountain
The fiscal year 2010 budget request of $197 million for OCRWM
implements the administration's decision to terminate the Yucca
Mountain program while developing nuclear waste disposal alternatives.
All funding for development of the Yucca Mountain facility would be
eliminated, such as further land acquisition, transportation access,
and additional engineering. The budget request includes the minimal
funding needed to explore alternatives for nuclear waste disposal
through OCRWM and to continue participation in the Nuclear Regulatory
Commission (NRC) license application process, consistent with the
provisions of the Nuclear Waste Policy Act. The administration intends
to convene a ``blue-ribbon'' panel of experts to evaluate alternative
approaches for meeting the Federal responsibility to manage and
ultimately dispose of spent nuclear fuel and high-level radioactive
waste from both commercial and defense activities. The panel will
provide the opportunity for a meaningful dialogue on how best to
address this challenging issue and will provide recommendations for
managing and disposing of spent nuclear fuel and high-level radioactive
waste.
IMPROVING THE MANAGEMENT OF THE DEPARTMENT
As Secretary, I am making a concerted effort to improve management
throughout the Department. The Department is committed to strengthening
its management to implement the $26.4 billion fiscal year 2010 request
and $38.7 billion of Recovery Act funds. The Department has developed
strong oversight strategies for Recovery Act implementation, including
upfront risk assessments and building specific risk management plans,
upgrading process controls, establishing personal risk assurance
accountabilities, and expanding outreach, training, and coordination
between Headquarters and field offices. The Recovery Act, however, is
only one aspect of a much larger effort to improve the Department's
management.
As part of President Obama's commitment to fiscal discipline, DOE
will focus on using its resources responsibly, transparently, and
effectively by identifying potential savings throughout the agency. The
fiscal year 2010 budget request of $182.3 million for Departmental
Administration, along with resources in individual program offices,
will continue the improvement in key functional areas such as human,
financial, project, and information technology management. These
efforts will instill management excellence and encourage the most
efficient use of the Department's resources.
The Office of the Chief Information Officer (CIO) will receive
$104.5 million, $33.4 million of which will go to cybersecurity and
secure communications, $9.4 million to the corporate management
information program, and $23.6 million for energy information
technology services.
The Office of the Chief Financial Officer will continue its effort
in fiscal year 2010 to build and improve its integrated business
management system, iMANAGE, with the deployment of budget execution and
formulation modules such as iBUDGET. To accomplish this and other
goals, the CFO's office will receive $66 million in the fiscal year
2010 budget. A significant portion of the increase is to assume costs
previously carried by the CIO for accounting systems operations.
The Office of Management ($88.4 million) and the Office of Human
Capital Management ($29.5 million) will help ensure effective and
efficient management principles permeate from top to bottom at the
Department of Energy. The Department has been making steady progress in
improving project management and developed an action plan with concrete
steps and scheduled milestones to successfully address the root causes
of the major challenges to planning and managing Department projects.
The action plan identifies eight measures that, when fulfilled, will
result in significant, measurable, and sustainable improvements in the
Department's contract and project management performance and culture.
Primary actions include: strengthened front-end planning, optimized
staffing, improved risk management, better alignment of funding
profiles and cost baselines, strengthened cost estimating capability,
improved acquisition strategies and plans, improved oversight, and
stricter adherence to project management requirements.
The Department's human capital management efforts are focused on an
integrated approach that ensures human capital programs and policies
are linked to the Department's missions, strategies, and strategic
goals, while providing for continuous improvement in efficiency and
effectiveness. The Department is revising its human capital management
strategic plan to address future organizational needs, workforce size,
skill gaps, performance management systems and diversity. To accomplish
this goal, the Department will continue to implement strategies to
attract, motivate and retain a highly skilled and diverse workforce to
meet the future needs of the Nation in such vital areas as scientific
discovery and innovation.
CONCLUSION
It is my firm belief that the short-term impact of the Recovery Act
combined with the new approaches and long-term vision in President
Obama's fiscal year 2010 budget, will lay the groundwork necessary for
creating the new green economy. Both President Obama and I look forward
to working with the 111th Congress to make this vision a reality.
I appreciate the opportunity to appear before you to present the
fiscal year 2010 budget proposal for the Department of Energy. I will
be happy to take any questions that the chairman and members of the
subcommittee may have at this time.
FUNDING ALLOCATIONS
Senator Dorgan. Mr. Secretary, thank you very much for your
testimony. I have a good many questions, so I will begin with
the first few questions, and then my colleagues will ask
questions, and I will be able to stay and ask remaining
questions.
Let me ask you about coal. I asked during, I believe it was
your confirmation hearing, about the statement, ``Coal is my
worst nightmare,'' that you made, and you described the context
of that statement, and I understand it.
This budget essentially flat funds coal research and
development. The fact is, coal is our most abundant resource by
far, not even close. If it's our most abundant resource--and I
and many others believe and I would hope you believe that we
can continue to use coal, because we can use science, research,
and technology to decarbonize coal--then how do we get there if
we flat fund research and development with respect to coal?
So can you give me a little bit of the philosophy that led
to a flat funding for that account? Given what the President
said about the substantial front-end investments for these
kinds of things, I would have expected a very substantial
recommended increase, in order for us to use coal in our
future, because it's our most abundant resource.
Secretary Chu. Well, Mr. Chairman, I agree with you, and I
have to say that this budget reflects that because it has
folded in the fact that we have received $3.4 billion,
substantial funds, in the American Recovery and Reinvestment
Act. Many of the pilot programs for that money, $3.4 billion
that might have been funded in this section now have gone over
to that.
So in a certain sense, that incredibly large amount of
funding for these pilot programs and the investigations are
then, say, ``well, we will continue this current budget'',
certainly if it were not for the Recovery Act funds, you would
have seen a different budget.
So even though I know the philosophy of the Recovery Act
was to be seen as strictly supplemental, in the context of that
addition, I think it's reasonable.
Senator Dorgan. Well, that was the philosophy, actually.
But I think most of the stimulus funding is considered to be
demonstration projects rather than R&D. In the area of solar,
which I support, and some other areas, even though there was
substantial money in the stimulus, there's also substantial
money in R&D, but coal is flat funded.
Quickly, do you believe that we will have to continue to
use coal in our future and need to find ways to decarbonize
coal?
Secretary Chu. Yes.
HYDROGEN
Senator Dorgan. Okay. Well, we'll talk more about that. Let
me ask you about hydrogen. You have essentially zeroed out the
hydrogen program. You've moved a portion of it into a different
direction, but there are about 190 ongoing hydrogen projects
that are unfunded.
We've got about 500 jobs, 140 at universities, 150 at
national laboratories, 235 in industry, that have been working
on hydrogen. And I agree that hydrogen is not near term. But I
also agree if someone is going to look at things that are not
near term, but are essential in the longer term, who but the
Department of Energy should do that?
I'm stunned that the budget essentially just moves away
from hydrogen fuel cell research and stops projects in the
middle of these projects. I don't understand just deciding to
take projects that are half completed and say, ``You know what?
We've decided that we're not going to do those projects
anymore.'' I'm a big fan of hydrogen in fuel cells, and I
believe that they are going to be part of our future. I agree
it's not near term, but I agree also that the Energy Department
has a significant role in continuing this research, your
response?
Secretary Chu. Well, this was a tough call. I think it was
centered mostly on saying that hydrogen for vehicles is not
near term, and that we wanted to prioritize to be investing
more in things like advanced batteries, something that I could
see in the next 10, 15 years could actually be adopted on a
significant mass-deployment scale.
Hydrogen stationary fuel cells I think we will continue
funding. There are real issues that I have with transportation
vehicles. The most problematic, in my opinion, is we still have
not figured out how to store hydrogen in a compact form. So
while we can be funding more basic research and looking for
ways to do that, that is something of real significance.
The other is the infrastructure. We would have to create a
totally new infrastructure in order to have the hydrogen
vehicles be fueled. Not insignificant is the fact that the
hydrogen, if we were to deploy this within the next 10 years,
would come out of reforming natural gas, and it's a
questionable call as to whether we want to be using the
reforming of natural gas.
And so there are many issues. At a more basic research
level, I think there have been advances in fuel cells, and we
want to push on more radical approaches to these things. But I
think stationary hydrogen is going to be, in my opinion, the
first application.
Senator Dorgan. Well, in North Dakota, we're actually using
wind power to produce hydrogen from water, separating hydrogen
from--well, at any rate, my point is that I think the
Department's made a significant mistake here. And I, for one,
am not interested in shutting down these research projects, and
I'm going to do everything we can to continue them.
We're only looking at near term, the next 5 to 15 years,
but when you come around talking about cap and trade and
climate change, you're going to talk about 2040 and 2060, 2070.
So I really think this is an important area of research.
President Bush, Senator Bennett, myself, so many others
have been very involved in this, and to see these contracts
shut down in the middle of the contract on very important
research, I think is not a smart thing to do. So we'll have
more to discuss about that.
BLUE RIBBON COMMISSION
Quickly, what is the status of the development of the
Nuclear Waste Blue Ribbon Commission? You recommend shutting
down Yucca Mountain as a storage site. So the question is
what's the development of the Commission, the status? What's
your evaluation of what the Energy Committee is doing? In the
energy authorizing committee, we have proposed something of
that sort. Are you considering recycling spent nuclear fuel to
reduce the volume? So give us your thoughts about what is
behind shutting down Yucca Mountain.
Secretary Chu. There's a first draft of names that are
beginning to be circulated among the White House personnel
people. We will be circulating them among Congress also for
comment. The authorization committees, Chairman Bingaman and
his committee, is I think--we're essentially in sync, in terms
of trying to develop a very measured, intelligent, deep group
of people that can actually step back and say that there are
options available to us today, and looking down in our crystal
ball and tea leaves 50 years from now, 20, 50 years from now,
we can see other options.
So now is a good opportunity to say--to charge the
committee. There are options. I personally feel that if we do
it right, we can develop ways of processing nuclear fuel to
recover much more of the inherent energy value of that stuff,
perhaps--through recycling, but we need to develop processes
that are economically viable and proliferation resistant.
So if that's true, and I think there's a reasonably good
chance we can do this in the coming decades, then we would want
to have two different types of storage--an interim type of
storage, where you can then either get back the access,
reprocess the fuel. We also want to be investing in types of
reactors that can help burn down this fuel, and especially
the--waste, so we can greatly reduce the waste.
Now, having--after you've done all that, then there comes a
point where you say you might not want to have access to, after
you've burned down a considerable amount of the energy value.
So then a permanent disposition might be called for. But these
are things that the Blue Ribbon Panel should be discussing. And
it's the hope that with their advice to both the administration
and the Congress, we can formulate a path forward that I think
could be much better than the one we're currently on.
Senator Dorgan. I'm going to reserve the remainder of my
questions until the end. Senator Bennett?
NUCLEAR POWER
Senator Bennett. Thank you, Mr. Chairman. Mr. Secretary,
let's continue this conversation about nuclear power. You've
testified several times, and again today, in your support of
nuclear power. And I'm delighted with that, because I'm a
strong proponent myself. The budget fails to demonstrate any
urgency, in my view, particularly deploying state-of-the-art
reactor technology. And the rest of the world is investing in
new reactors. Russia, France, India, all beginning to line up
countries to sell their reactor technologies.
Now, the United States is clearly the leader in terms of
safety. There have never been lives lost. There's never been a
problem with the American reactors. So that raises the question
of why we are not the export leader in this business, but these
other countries are.
So would you be willing to support additional funding for
the NP2010 program if it improved U.S. export competitiveness
and accelerated the deployment of new reactors domestically?
That would, I believe, create thousands of new jobs in the
United States. Is that something that you could be supportive
of, if this subcommittee moved in that direction?
Secretary Chu. Well, in terms of NP2010, there were two
reactors that we initially were supporting, the AP1000, the
Westinghouse reactor, and the GE reactor. It is my
understanding that the orders for the GE reactor have shifted,
and it's not clear. And so while that reactor is still going
forward in a much different pace--and so a decision was made
until we get strong signs from General Electric that they were
going to go ahead and push this because of the recession,
because of a shifting of orders, for example, from the GE
reactor to the Westinghouse reactor, the support of the
licensing of that reactor didn't seem to be as high a priority.
So I do want very much to restart the nuclear industry.
We're in a final review of a number of proposals for the loan
guarantees. And so that's something that has a very high
priority with me. This specific reactor, the GE reactor, and
the extension of 2010 will really depend, in large part, on
what General Electric--how aggressively they want to move
forward on it as well.
LOAN GUARANTEES
Senator Bennett. I see. Let's talk about the loan
guarantees for a minute. In the bill that left the Senate,
there was a very hefty increase in loan guarantees. It did not
survive with the conversations in the conference. Those of us--
well, I won't say those--I was subjected to some fairly heavy
criticism on the part of people who said, ``Well, the loan
guarantees should not include nuclear. The loan guarantees
should be entirely for wind and solar and that sort of thing,
and you shouldn't include nuclear in there.''
The Department's issued five solicitations under the Loan
Guarantee Program, and in four of the five, demand vastly
exceeded the available supply. Now, would you be open to having
the Congress change the law so that you could shift from one
pattern to the other, if there's one that's undersubscribed,
and make that money available to others? And do you still
support the idea that under the loan guarantees, nuclear has to
be included as renewable, in the sense that we are defining as
renewable something that is not emitting carbon?
Secretary Chu. I absolutely support the idea that within
the loan guarantees, restarting the nuclear industry should be
supported. Right now, the $18.5 billion can probably help start
three of their four applications. We're looking as to whether
there can be some cost-sharing with non-Federal loan guarantees
from abroad in order to fund four. I think that's a start. I
personally would like to see a bigger start.
Senator Bennett. Well, the request for $93 billion for the
$18.5, so there's obviously a great deal of interest in it. And
my concern is that if you have other areas under loan
guarantees where the requests are below the amount available,
that you be given the authority to shift money from that and
make it available to nuclear. Is that something you would be
supportive of?
Secretary Chu. I think in general, philosophically,
absolutely yes. But I think to balance that, there is a fear,
because the cost of nuclear is so high, that there is a fear
that if you were allowed to shift the money, that it could
easily gobble up a lot of the things of the lower cost
renewable energy projects. So there should be a balance there,
but having the flexibility to make those decisions, I would
welcome.
Senator Bennett. Okay, one last question. We've talked
about the stimulus package and the amount of money that's
available. Can you give us a path as to how quickly some of
this money can be moved out? It has not moved as rapidly as
many people thought that it should. And are those people just--
their expectations are too high, and you're moving the best you
can? Or have you run into problems? Or is there a holdup where
we can be helpful? Can you give us the timeline? Just give us
an overall view of what's happening with all of the money that
got appropriated to----
Secretary Chu. I think the progress in the loan guarantees
has been actually very good since when the new administration
took over. When I took over initially, I was told that the
first loan, which was authorized by----
Senator Bennett. Not just loan guarantees, but generally,
the President--you have $38.7 billion appropriated, and you
spent 1 percent of that.
Secretary Chu. Okay. That's right. So in many of the
programs we're doing, we're on target. We have a schedule that
we want to have allocated 70 percent of that Recovery Act money
by Labor Day. There's an issue here because in many of the
things that we do, we request for proposals. We have to review
the proposals, and then we have to make decisions.
So in order to do this, there's going to be a massive
review this summer of many of those programs. So we've gotten
clearance from OMB, apportionment of many of these things. And
so the allocations, we hope a lot of them can be made by this
Labor Day. So, so far, there has been $4 billion obligated to
date, about 10 percent.
Senator Bennett. About 10 percent. Okay. So, Labor Day is
an updated timeline when you will have, what, 70 percent of it
spent?
Secretary Chu. Well, by spent, what we're saying----
Senator Bennett. Or obligated?
Secretary Chu. Yes, we're trying to get to that obligation
period by that time. That's correct.
Senator Bennett. By Labor Day. And are there any accounts
that you see that might, in fact, lower the amount you'll have
to spend in fiscal year 2010 as a result of the normal
appropriations?
Secretary Chu. Sorry, I didn't quite get the question.
Senator Bennett. If you have the backup of stimulus funds
that you've been unable to spend and then those get spent
during fiscal year 2010, does that mean there is any fiscal
year 2010 money that can, in fact, be delayed until fiscal year
2011 because you simply can't physically spend it?
Secretary Chu. Right. Well, we're going to be trying to do
our best to satisfy the statutes of that Economic Recovery,
which is really to have it essentially obligated--100 percent
of it obligated by 2010, and a large fraction of it spent. But
as you know, there--in some of these things that we're doing,
in order to lay the foundation for a new energy economy, it's
not as though it's money instantly into supplemental check----
RECOVERY FUNDS
Senator Bennett. Oh, I understand that. But you understand
the angst that is out there among our constituents about the
amount of money in total the Federal Government is spending and
the concern that it may not be spent wisely. And if, as you
move forward in your pattern to say, ``Okay, this is the proper
timetable and the proper method of spending stimulus funds,''
and you discover that in doing that, it means that you do not
need as much of the 2010, in terms of--speaking in business
terms now--actual cash flow. I'm not talking about changing
your plans or changing your research programs or your targets
or something.
But there becomes a physical question of pushing the money
out the door. And in terms of actual cash flow in 2010, you
can't prudently do it----
Secretary Chu. Right.
Senator Bennett. Would you share with the subcommittee
those funds that might be pushed onto 2011?
Secretary Chu. Yes, I could share those concerns. But we
are looking at novel ways of addressing this. It is a--you're
quite right to say that this is a Herculean task. It more than
effectively doubles our budget. And so, for example, I have
sent a letter out to all the presidents of the major research
universities, the relevant deans, the presidents, and the
executive chairs of all the relevant professional societies, to
say that we're going to have essentially a review-fest over a
period of one week in Washington, asking them to nominate for
this summer their best people to help us review these
proposals. We cannot do this alone with our current staff. And
so we're looking at things like that in order to get this
moving.
Senator Bennett. Okay. Thank you very much.
Senator Dorgan. Senator Bennett, thank you very much. I
have just been called by Senator Reed, the majority leader, to
go to the floor to negotiate an amendment that they're trying
to clear before they do final on this, in the bill that's now
pending. So I've asked Senator Murray to chair while I'm gone.
And let me call on Senator Alexander. We're recognizing
Senators in order of appearance at the hearing.
INNOVATION HUBS
Senator Alexander. Thank you very much, Mr. Chairman. Mr.
Secretary, welcome. On May 9, 2008, I made an address at Oak
Ridge Laboratory about a new Manhattan project for clean energy
independence, seven grand challenges for the next 5 years:
plug-in cars and trucks, carbon capture, solar power, nuclear
waste, advanced biofuels, green buildings, and fusion. So I
like your hubs. I think that's exactly the way to go about
these grand challenges.
I have a question about a relatively small item. In the
America Competes Act, which you had a role in developing the
recommendations for, there is a provision for distinguished
scientists who would have one foot at a university and one foot
at a national laboratory. It's worked well at Oak Ridge, for
example, with the University of Tennessee over the last 20
years.
There's authorization for up to 100, was the idea, to be
phased in over a period of time, and there's the authorization
for $30 million of spending, none of which is funded yet in
this budget. I just want to call that to your attention in case
it does get funded to suggest that moving ahead with those at
the rate of four or five a year might be one way to advance
these hubs, as you're looking to attract very talented people
to focus their attention on those. Have you noticed this?
Secretary Chu. Actually, first, let me just say I support
the idea. I think having intimate collaborations from
universities and national labs is something I'm very supportive
of. I would be encouraging--although one doesn't see it
specifically in a line item of a budget, one is beginning to
see this in the national labs, and I would be encouraging the
national labs to grow much stronger relationships with
surrounding universities. It serves both the university and the
national labs very well. It brings in a lot of young blood. It
creates a churn and intellectual excitement.
So while it doesn't have to necessarily show up in a line
item, I will be encouraging all the national labs to do just
that within their programs.
Senator Alexander. And this authority isn't earmarked to a
particular university; it's for the Secretary to compete and do
it in whatever way is right. I would like to explore the
questions that Senator Dorgan and Senator Bennett raised about
nuclear power.
The President, in his inaugural address, talked about power
from the earth, the wind, and the sun, and that's captured the
imagination of a lot of people. But it's less than 1\1/2\
percent of our electricity today, and if we double it or triple
it, we still don't have much. And even if we reach the 15 or 20
percent that some people think we might of renewable power,
that's probably it, and that still leaves a need for 80 or 85
baseload power.
I thought the President's rumored proposal today of capping
greenhouse gases from tailpipes by a low-carbon fuel standard
was a good idea. I think that it makes sense because that will
encourage switching to an existing technology, such as electric
cars. We have enough--we could plug in, Brookings says, half
our cars and trucks, without building one new power plant, if
we do it at night, we have so much unused capacity.
If we look back at the beginning of the cap-and-trade
program in 1990 and 1991, we had an existing technology then
for dealing with the acid rain. We had scrubbers that would
take care of that. Where I'm going is, as we move along in the
greenhouse gas discussion, we probably get next to coal plants,
which are 40 percent of the carbon. And we don't have an
existing technology to deal with that, except nuclear power,
and with a limited amount of experience with burying carbon
underground.
So why wouldn't we be as aggressive about expanding nuclear
power and doubling or tripling research in Manhattan project to
find a way to get rid of the carbon in existing coal plants as
we are with wind and solar and other so-called renewable
powers? They're not baseload powers. And isn't it true we have
to have some new source of clean baseload power? Why not just
put a plan in to build 100 new nuclear powerplants in the next
20 years as a start toward that and double or triple research
to take carbon from existing coal plants?
Secretary Chu. Well, as enthusiastic as I am about nuclear
power, that number, 100, would be a lot. It would be a huge
challenge to our nuclear industry. I think I've repeatedly gone
on record as saying, as you well know, that this
administration, this Department, the hopefully soon-to-be
confirmed members of my team are all enthusiastic about it.
They say it is a necessary part of our baseload power.
I agree with you, if you're going to go above 15, 20, 25
percent renewables, there are real issues having to do with the
transmission and distribution system, having to do with
storage. The storage problem is especially an unsolved problem,
but there are options, and so we'll be looking at, for example,
pumped hydro, where it's appropriate in certain regions.
But I reiterate the fact that we're blessed with a lot of
coal, and although we do not have today the technologies that
would make capture and sequestration of coal economically
competitive, I think there's a good chance that we can get
there. And so I'd prefer to take a different stand and say
let's push all of these things as hard as we can.
The nuclear industry, if you look at the capacity of their
ability to build reactors, it's not there today, and so while
we want to move aggressively ahead on that, I think we still
have to try to move aggressively as we can on developing the
technologies for capture and sequestration.
Senator Murray [presiding]. Thank you, Senator Alexander.
Senator Alexander. Thank you, Madam Chairman.
Senator Murray. We'll move to Senator Tester.
LOAN GUARANTEE PROGRAM
Senator Tester. Yes, thank you, Madam Chair, and thank you
for being here, Secretary Chu. A couple of things, going back
to some previous questions, I certainly appreciate the
situation you're in and that there is a sizable sum of money
available to you to send out. But I also appreciate the fact
that you're taking the time to make sure we get the results
from this. It's just not money spent for the sake of spending
money. And I think there's a real urgency in generation and
transmission in this country, as the questions before me have
pointed out.
I want to go back a little bit to the Loan Guarantee
Program. You talked about a massive review--I don't know if it
was of that program or not. But just can you tell me where we
are as far as the decisionmaking process of that Loan Guarantee
Program, and what is the timeframe for getting some of the loan
guarantees out the door?
Secretary Chu. Okay, so we've made a provisional grant to
one company. That means that they have to find funding for the
current statute for the 20 percent. This is middle May. I think
by the end of this month, we'll be announcing a number of
others. We've greatly accelerated all the review processes and
how we do it, and we're doing many things in parallel now,
something that the Department is not used to.
And so the loan guarantees essentially are being
accelerated by about a factor of 5, maybe closer to 10. So this
is a very significant focus on making sure that these things
are reviewed, reviewed adequately, but very quickly.
Senator Tester. Okay. So you're anticipating some
announcements--because we are in the middle of May----
Secretary Chu. Right.
Senator Tester [continuing]. Any day?
Secretary Chu. Certainly within the next couple weeks to a
month, yes.
WIND ENERGY
Senator Tester. Okay, all right. We have great wind
resources, particularly in the eastern part of Montana. And
what has traditionally happened over the last 4 or 5 years is
they've built a lot of towers in a fairly small area for
purposes of maintenance and construction, cranes, all that
stuff. It looks to me like the best benefit you can get out of
wind is if you decentralize it, if you move it around for
intermittency purposes. The wind's blowing somewhere in eastern
Montana every day, all the time, and the issue is the grid.
Do you ever put forth policies or put forth direction to
electrical generation companies to encourage them, or is there
anything we can do to encourage that, or is that even a good
idea? I'm talking about decentralization of wind to reduce
intermittency and reduce the need for--go ahead.
Secretary Chu. No, that is a very good idea. In fact, a
number of Cabinet-level people have been meeting on an every-
other-week basis. The principals--meet--this is Interior, Ag,
Energy, CEQ, a number of stakeholders--to try to develop a
coherent plan where the energy resources, both solar and wind,
where are the places where it would not be--we have to be very
sensitive to environmental concern and danger species, things
like that, and trying to now develop this--FERC is also, of
course, part of this. And we're trying to then develop this and
start to work with the private sector.
Senator Tester. So you have the ability to give some
direction?
Secretary Chu. Well, we're----
Senator Tester. Or we need to do it at this level?
Secretary Chu. Well, we are trying to develop some plan
that gets buy-in from the private sector.
Senator Tester. Okay. That's the best.
Secretary Chu. The meetings have been going on for several
months.
CO2 SEQUESTRATION
Senator Tester. A few weeks ago, this subcommittee had a
hearing on beneficial use of CO2. We heard some
pretty encouraging things about algae. One that was
particularly encouraging to me was cement, making cement, not
having to separate the flue gas. It sounded to me like it was
tricked out and ready to go.
Two questions, No. 1, is that kind of specialty use of
CO2 something that you see as viable and is it
something that can happen? And then the follow-up question is,
is the beneficial reuse of CO2, is it being limited
by our study of carbon sequestration and storage?
Secretary Chu. We are certainly looking into those things--
the algae converted CO2 into lipids that can be used
for transportation fuel and cement. The verdict is not in
whether these processes work but if they could go to a scale
necessary to be significant, and so we're looking very hard
into this. I do know other countries also are looking into--for
example, I just had a discussion with some representatives of
China. They're keen on seeing whether this can actually work.
But again, we're in the process of trying to study whether
it can really go to scale or whether it will be a small, more
boutique type of thing. Cement especially is something that
goes in several stages. There are various grades of cement and
long before you can actually get into a structural cement there
are many issues having to do with structural integrity. The
economic viability is something--it's--but these are fairly new
ideas, and so we are very interested in looking and seeing if
they can really work.
Senator Tester. Do you think the budget's adequate enough
to deal with the CO2 issue, generally speaking, both
as beneficial use and as storage? Is this an adequate budget to
deal with that?
Secretary Chu. I believe it is. I think we're upping,
actually, the funding in algae, and cement, there are a couple
of companies looking at this, in terms of supporting that with
loan guarantees.
Senator Murray. Thank you, Senator Tester. Senator
Feinstein.
DESERT PROTECTION
Senator Feinstein. Thank you very much, Madam Chairman.
Good morning, Secretary. It's good to see you here. I've tried
to obtain an appointment with you. So far, I've not been able,
so I'm going to take this opportunity to express a concern
publicly that I would have expressed privately, had I had the
opportunity.
You may not know this, but I authored the Desert Protection
Act in southern California. We created two new national parks,
Joshua Tree and Death Valley, and the Mojave Preserve. Since
that time, for about the past 7 years, we've been trying to buy
railroad inholdings to put them into conservation and have in
effect bought about 700,000 acres in a very unique public-
private partnership. The private sectors contributed $40
million, and we, about $17 million, to be able to do that.
So it was much to my consternation that I was suddenly told
that a lot of large solar facilities were going on the land
that we had just purchased with a lot of private money to
conserve. So I went down to the desert and brought the
companies involved and took a look.
And here's what I found, that I saw seven projects. They
totaled nearly 60 square miles, 60 square miles. One was 9.3
square miles. One was 7.03 square miles. One, 15 miles square,
that's BrightSource, Iberdrola, 3.09, the second Iberdrola,
another 3.09, PG&E, 6.56, and Solal, 6.25, and many of them in
this land that is due for conservation and that had been
purchased for the purpose of conservation.
Then I began to look, and I talked to Southern California
Edison, ``What's your largest solar project?'' 50 megawatts.
And I see here, we've got 914, 815 megawatts, 500, 500, 500,
800, 600, huge projects. And I asked how was this done? Well,
the national topography of the land is leveled out. The sand is
removed. A gravel surface is put in. The solar troughs are
centered. You need a large steam plant, and you need very large
transmission lines.
The question comes, for me, having tried very hard over 16
years to protect this area of the desert, now to see it all in
the main going for a huge number--now, I'm only talking about 7
out of 65 projects for the area. Those were the only ones I
saw. But the ones I saw were 60 square miles' worth of solar
troughs, huge steam plants and fences that will go around it.
Right in the middle of a desert where the desert tortoise has
some habitat, where there are other problems--bighorn sheep,
Indian petroglyphs, and so on--and we've been able to clean up
this desert over time.
The question I have is should we not cap the size of these
things? The largest that I know of is in Kramer Junction. Two
projects, one 160 megawatts and one 150. Each one is about 2
square miles. Those are the largest I know of anywhere in the
United States. And now we're talking about one of 15 square
miles. Should we not cap the size of these?
Secretary Chu. Well, I certainly would be willing to--
first, I'm a little bit surprised if you asked to see me and my
staff said no.
Senator Feinstein. Well, we just haven't gotten a response.
That's sort of the way it's done. You just don't hear.
Secretary Chu. Oh.
Senator Feinstein. But anyway.
Secretary Chu. I'm still surprised. You actually have my
private number.
Senator Feinstein. Well, I should call you at home, then.
Secretary Chu. But I'd certainly be willing to talk to you
about this. These are sensitive issues and we have to think
hard about them. I don't know--I was actually just informed
only a few days ago about this concern and I'd certainly be
willing to look into it.
I think this is one of those very delicate issues, as I was
saying to Senator Tester, as we are developing a plan moving
forward in conjunction with the other Secretaries, one of the
issues is the sensitivity to habitats of endangered species
that we're looking at, and we're trying to make sure that we
fold all those concerns into where there would be good sites
for solar and wind.
Senator Feinstein. My time is up. Let me say one more
thing. In my State, I have 47,000 abandoned mines. People came
in, they mined, they took the stuff they wanted and they walked
away from the mines. Solar technology is going to change. In
Daggett, I've looked at some photovoltaics and solar troughs.
They walked away from them. They left the steam engine there,
steam plant there. This has to be considered as well.
Everything right now is how you can do it the cheapest
possible way you can. Huge is better. But I've got to tell you,
I'm going to fight for this land to be protected. And I think
that size is a factor, and you just can't come in and build 15
miles square facilities with huge steam plants. We're willing
to do our share. I am. I understand the desert is a good place
for it. But the sky's not the limit, Mr. Secretary, and that's
what I want to say. Thank you, Madam Chairman.
WASTE CLEANUP
Senator Murray. Thank you, Senator Feinstein. Mr.
Secretary, thank you. You and I have spoken on several
occasions about the legal and moral obligation for the Federal
Government to clean up the waste that was left behind from
World War II and the cold war. We've talked about it prior to
your confirmation, at the Budget Committee hearing, and again
after the release of the 2010 budget proposal.
My position is really clear, and the administration is
going to have to expect it to remain consistent, because that's
what I want for these budgets. I want budgets that clearly meet
the obligations we have to the Nation and the States and the
communities that are home to those cleanup sites. And I want
budgets that consistently make progress toward the goal of
cleaning up that waste.
The funding highs and lows that we see just don't get us
there, and unfortunately, that's what I see in the EM budget
we've been presented with. Let me talk about the highs. In the
Office of River Protection, it's good to see an increase for
the work at the tank farm. We have seen years and years of
pushing off those infrastructure needs, and there's a lot of
work that needs to be done there. You're putting your focus
back on that work, and I do appreciate that. I expect that we
can remain consistent, and we'll look forward to that as the
new base level of funding for those tanks. That's really
important.
However, the same effort isn't evident with Richland
Operations, where there's a reduction in funding below the
fiscal year 2009 and fiscal year 2008 appropriated amounts.
That reduction does not represent a consistent effort for
stable and compliant budgets. We all have to remember that the
economic recovery funds were meant to make up for lost time and
to create good-paying jobs, not to make amends for this year.
The River Corridor Closure Project is up; however, the
Central Plateau is down. Reducing the active cleanup footprint
at the site is a really large task that requires consistent
budgets to fund the effort. So I encourage you to keep that in
mind when you're planning for next year's budget so we don't
get ourselves back into this position again.
As you know, Hanford is not going to be cleaned up in 5 or
10 years. It's a large project, massive in size, and we need to
manage it thoughtfully and consistently with that long-term
mission in mind. And that's why I am always saying we need
stable and consistent budget, so we can get the job done
safely, No. 1, and successfully.
I also wanted to just quickly mention to you the Hammer
Facility that is on site at Hanford. The Hammer Facility offers
incredibly wonderful training for people who take on the very,
very dangerous work of cleanup. And I'm hopeful that when you
do come out to visit the Hanford site, that you'll get the
opportunity to stop by and see Hammer, see what they're doing,
to help promote a safe working environment at a very, very
challenging place.
I'm still looking forward to your visit at some point in
the near future, where you can see progress on the site, but
also, some of the worker safety training going on at Hammer and
at PNNL and how everything works together towards cleanup.
I do have a number of detailed questions for you on support
for Hammer and the B reactor. I'll submit those for the record.
But I do have a question for you while you're here, Mr.
Secretary. I do want to say that I'm pleased at the overall
increase for energy efficiency and renewable energy. We've got
to move forward on a clean energy economy. And I think that
does help us keep on the path.
Now that you have spent some time at the Department, I'm
looking forward to hearing an update on the Water Power
Program. As you know, that program got $40 million in 2009, and
the President is now requesting a 25 percent reduction, which I
am very concerned about. I think we have to have a very strong
continued investment in existing hydro facilities that will
allow us to use those to supplement the more unpredictable
sources, like wind or solar. And I think we have to increase
our work to develop new marine and hydrokinetic technologies,
as well, that you and I have talked about before.
WATER POWER
So with my less than a minute left could you talk to me a
little bit about your vision for the Water Power Program.
Secretary Chu. I think, first, very briefly, I am very
committed to continuing the cleanup as aggressively as we can
and looking for better ways of doing that. It's not only the
money, but it's also the way it's invested and funded. And so a
lot of time is now being spent in reviewing how we deal with
the contractors, making sure that they do the job in a timely
manner.
In terms of the water projects, it's too late to start this
in 2010, but in the 2011 budget, I'm a big advocate for looking
at ways of being, let me just say friendly to the fish, but
allow us to continue hydropower, but also to look at the
possibility of actually having some pumped hydro, small amounts
of sources, so that we can actually couple the renewable energy
better. And so we're going to be looking very hard at that.
Senator Murray. Okay. I look forward to working with you on
that. I think it's extremely important. And I appreciate your
response. Senator Cochran.
STRATEGIC PETROLEUM RESERVE
Senator Cochran. Mr. Secretary, welcome to the
subcommittee. We thank you for your cooperation and your
service as Secretary, a very important position. In the budget
request for the Strategic Petroleum Reserve, roughly $50
million is included and proposed for the purchase of a new
cavern to replace an existing storage cavern that was said to
pose an extreme environmental risk. And this is for storage of
strategic petroleum reserve.
There are salt domes in my State of Mississippi which some
think are ideal sites for the storage of the petroleum reserve.
Your Assistant Secretary recently testified about legislation
to increase storage capacity, specifically for the strategic
petroleum reserve.
I'm curious to know what your thoughts are about choosing
caverns that some say are not environmentally appropriate for
storage, rather than looking into the possibility of salt domes
that are coincidentally located in southern Mississippi. I'm
just curious to know if this has reached your level for
attention and consideration.
Secretary Chu. Well, my understanding is that one cavern,
which I believe is the salt cavern--it wasn't understood that
the thickness of the salt was, in one section of it, thin
enough that it could open up the possibility of a breach and
can actually--the petroleum could leak into the environment.
And so that was discovered, in my understanding, last year,
year and a half. And so once it was discovered, it was decided
that that posed an environmental risk and we should go out and
purchase some property to put it in a place where the envelope,
if you will, would be less likely to be breached. And so that's
what we're in the process of doing, but salt caverns are
actually used for that, as you well know.
Senator Cochran. Right. Well, I was just curious to know
whether that reached your level for your personal attention. I
don't have any fixed views about which caverns are the best or
not the best, but we certainly want to be sure that they are
safe in terms of environmental consequences, and certainly in
respect to possible damage to people who live in the area.
Funding, incidentally for the strategic petroleum reserve
included $35 million for a site near Richton, Mississippi,
contingent on a report issued by the Department within 45 days.
My staff has contacted the Department about the report, and
we're just curious to know what the status of that report is,
if you know.
Secretary Chu. I don't know. I could get back to you on
that and give you the details.
Senator Cochran. We would appreciate that, and we would
like to be kept in the loop, as long as you have active
consideration of Mississippi sites. Or I know in Louisiana,
they have some salt caverns there as well. But it's of
importance. We want to be a positive contributor to the solving
of our energy problems, and we think that there are some
caverns that possibly could be suitable, and we'd like to
know--there was a report, I think, contemplated at one time to
describe and define this, so the general public would have some
better ideas of what's going on. Rumors get started, and I
would like to know what the facts are so I can pass that on to
my constituents. If you could look into that, I would
appreciate it very much.
Secretary Chu. Sure, I'd be delighted to.
Senator Cochran. Thank you. Thank you, Madam Chairman.
Sorry, Mr. Chairman.
GEOTHERMAL
Senator Tester. Oh, that's entirely all right. I'll ask a
few questions here, waiting for Senator Reed to go here. Real
quick, do you think that there's any future as far as
geothermal goes in relation to baseload power, or is it
economically not going to happen?
Secretary Chu. I think there is a real potential,
especially enhanced geothermal. But we're looking--geothermal
right now is on .3 percent of our electricity generation
capacity in the United States.
Senator Tester. But we have incredible resource.
Secretary Chu. We have incredible resource. It's mostly--my
understanding, it's mostly in the ability to do enhanced
geothermal, meaning that you pump in water or carbon dioxide
that uses the heat transfer fluid. We know how to fracture rock
much better than we did before, and so this is a possibility.
We are going to be investing in research to see whether
enhanced geothermal can actually be viable. If it is viable,
there is a very large resource.
Senator Tester. How many years out do you think it is,
before the first viability?
Secretary Chu. I'm trying to think of the briefing, but
these things are issues where you're going to--it's, again,
there's--it takes time to drill. It takes time to test it. Ten
years. I don't know.
Senator Tester. Okay. Senator Reed.
WIND AND GRID INVESTMENTS
Senator Reed. Thank you very much. Mr. Secretary, thank you
for joining us today. I know you are aware that my State of
Rhode Island is aggressively trying to deploy wind-powered
facilities off its coast in State waters near Block Island and
in Federal waters further out. This is not only going to
provide us with, we hope, renewable energy resources, but also
provide a stimulus to our manufacturing sector, producing the
blades to turbines and other equipment.
One of the concerns we have is that the investments that
you are leading in terms of the grid might focus the attention
away from these projects along the east coast and more toward
the center of the country. And I would just ask you to sort of
ask us how these grid improvements can help and not hinder the
development of these wind projects. And it's not just Rhode
Island. It's Delaware. It's all up and down the--Virginia, all
up and down the coast, this sector.
Secretary Chu. Well, you're raising a very important point.
The Atlantic Coast has a lot of wind resources, very close to
population centers. And we are--certainly this is part of us,
as we get out feet wet, so to speak, in finding out how to
develop the wind resources.
I think it's important to actually develop them in both
places. The more diverse the set of wind resources, not only in
Montana, but all over the United States, the better we have of
actually becoming more base load. So to have wind resources off
the shallow Atlantic Coast and having it in the Northern
Midwest, they're very important.
So in talking to power distribution companies, utility
companies, it's not clear to them what the best economic
investment is either. So we're trying to work through this. The
issue with offshore is that for shallow offshore, it's about a
factor of two more expensive initial investment. Even more so--
perhaps a factor of three or more--in the maintenance, and so
far, the maintenance is higher than expected in the European
experience. And so we are trying to work through all of these
things. Hopefully within several years, we can get the wind
turbines so that the gear boxes, the blades, are much more
robust.
But so these are all issues. Going offshore actually
complicates that.
Senator Reed. Yes, indeed. I think, though, that--and I
don't want to suggest a response, but it seems that there
should be a very explicit recognition of these offshore efforts
and coordination as you invest in the grid. It would help
either inadvertently or directly see huge investments, which
make it even more difficult to bring this power----
Secretary Chu. No, I agree with you. I think it should be a
balanced view, and how to develop the renewable resources at
large in the United States in the most balanced way. And in our
little group of secretaries and other administrators, this is
very much on the table, the balance between Atlantic offshore
and Midwest, for example.
Senator Reed. And principally FERC and the Department of
the Interior will have the principal roles of the siting, et
cetera. But I presume the Department of Energy will be an
active participant, from your comments.
Secretary Chu. Yes. But you said it correctly FERC and
Interior will have the major roles in deciding.
WEATHERIZATION
Senator Reed. Let me--I have at this time, one final topic.
And that is thanks to the efforts of Chairman Dorgan
particularly, there's been an unprecedented investment in
weatherization in the Recovery Act. And then the 2009
appropriations bill has $450 million to complement the roughly
$5 billion in the Recovery Act. But the 2010 budget has only
$220 million for weatherization. Now, I understand some of that
is because of a big spike up, and you're coming down. But there
is a concern that we're ramping up this capacity of
weatherization. We're getting people out there, particularly in
the context of recovery, those are good jobs, and then we're
going to see the funding streams diminish rapidly, leaving us
with capacity and people, but--and still with demand.
So I wonder if you could just give us the notion of what's
your long-term strategy for weatherization, Dr. Chu.
Secretary Chu. Yes, Senator, you were actually raising a
very good point. Because in the weatherization, roughly $10
billion is, in the Recovery Act, spread around several
agencies. Part of that is actually building a workforce that
can weatherize, and after 2 years or 2\1/2\ years, what do you
do with this workforce?
So I think what we are very concerned about, in trying to
design self-sustained programs beyond that. Let me give you one
example. Secretary Donovan and I are looking for ways in which,
when properties change hands, when you buy a home, that you can
have financing, additional financing, say an extra $10,000,
$15,000 that's part of your mortgage that, if done right, that
financing could actually decrease the cost of running your
house, because the money you save in lower utility bills will
be more than compensative for the additional little bit of
mortgage.
Now, when you sell your property, it's--okay, the
investments are there. And so that helps overcome the initial
hurdle of capital that is very important. This weatherization
could cost $10,000, $15,000 for middle-class homes. It also
gets the middle class into this.
We're also looking at programs where banks could be
encouraged to again for the affordability of the house, ask
that, in addition to a termite inspection, they ask for the
utility bills from the gas and heat. And in that section of the
country, this is the spread of utility bills per square foot
for average house. So just like a refrigerator label, this is
the spread--the home you're thinking of buying is here or here.
This does--first, no taxpayer money. Very little
transaction cost, but it motivates several things. You get a
more informed consumer. You actually give incentive to the
current homeowner to weatherize, to increase the resale value
of the home. And you actually--then there's an incentive. It
also helps the new home builders who are reluctant to put in
energy efficiency. One can predict the energy efficiency of
those new homes, and they look much better. And so you
stimulate in many ways, just by the simple transaction that
seems to me logical, in the sense that what a bank really cares
about is the affordability of the home. It includes the taxes.
It includes the mortgage rate. It includes the utility bills.
So there are things like that we're looking to do--and
revolving funds yet another one, so that we actually get this,
1 million or 2 million homes is just the beginning. We need to
get this self sustaining in a very deep way. So these are some
of the programs we're thinking of piloting and testing.
Senator Reed. Thanks very much, Mr. Secretary. Thank you,
Mr. Chairman.
Senator Tester. Thank you.
HYDROGEN FUEL CELLS
Senator Dorgan [presiding]. Senator Reed, thank you very
much. Mr. Secretary, again, I regret that I was called over to
the Capitol, but I appreciate your answering the questions of
my colleagues. Let me go back to the issue of hydrogen. I want
to ask a number of questions then we will let you be on your
way.
The hydrogen fuel cell issue has been a part of the
Department of Energy's portfolio for well over a decade now. In
2006, the Department of Energy developed and released the
hydrogen posture plan. It laid out a 15-year strategy for
hydrogen and fuel cell research, development, demonstration,
and deployment.
Since about 2001, roughly $1.5 billion has been invested by
the Federal Government in hydrogen and fuel cells, and industry
and the States are estimated to have spent somewhere in excess
of $4 billion. My understanding, from the experts who know, is
that these programs have met their cost and their technical
goals. Research has kept pace with key milestones established
in the hydrogen posture plan.
So, again, I don't understand. Let me be more specific. Do
you come to us saying you want to shut down these research
projects in the middle of the research? Is that what the budget
is asking us to do?
Secretary Chu. Well, it is a shifting of priorities. I
would be very happy to talk to you about this and discuss this.
But certainly it was more the intent of the 2000--the concern
in the 2010 budget was focused more on the transportation
sector and whether hydrogen cars could become a reality in
let's say 20 years, and whether--or do we see it further out,
and whether we should be investing these resources in, for
example, much more efficient internal combustion engines,
especially, from my point of view, diesels, since the new
advances in diesels allow diesels to now meet California EPA
standards. They're very clean diesels, and also the plug-in
vehicles.
And so in terms of offsetting our imports of foreign oils,
getting some more oil independence, really getting these things
in the marketplace, I see those as more likely solutions in the
next 20 to 30 years.
Senator Dorgan. I don't disagree with that at all, but do
you think 50 years from now, that your hope is more efficient
internal combustion engines, more diesel engines on the road?
Or is it your hope that perhaps we do things that are
transformative? For example, continuing to work on hydrogen
fuel cells that are longer term? And if not the Department of
Energy to work on this, who?
And then finally, you didn't quite answer the question. Do
you really want us to shut down about I think 190 research
projects that are in the middle of the project? And we just
say, ``You know what? That was yesterday's money, yesterday's
Secretary, yesterday's idea. Shut them all down.'' And you
really want us to do that?
Secretary Chu. Well, I'd be happy to work with you and look
at the details of where the programs are and things of that
nature. And we can work out----
Senator Dorgan. I'm hoping to help you with the funding for
these projects, by the way, because I think--well, we may not
be around in the long term, in the long term, we're all dead.
But the fact is the near term is not the only thing that's
important to us. If we're going to be transformative, I think
you look out beyond 5, 10, and 20 years.
WIND DYNAMOMETER
Let me ask you, Mr. Secretary, about an issue, wind
dynamometer that is at NREL. My understanding is that we've
spent a lot of money to test commercial wind turbines at NREL.
I've been there. I've seen this, big investment in hardware.
I'm told that the DOE is now pursuing competitive solicitation
in the private sector for a dynamometer, rather than
capitalizing on the investment made at NREL. Are we moving away
from NREL as a center of expertise in this area, and if so,
why?
Secretary Chu. Well, actually, I'll confess I don't know
that part of it. I do know that we have this wind test facility
at NREL and there's a dynamometer. Getting the private sector
involved is something I think the Department of Energy is very
interested in. So I don't know the exact details of that.
Senator Dorgan. Would you look at that?
Secretary Chu. Sure.
Senator Dorgan. And my understanding is, there's some
interest in the Department of Energy to duplicate that
investment in the private sector up in the Northeast, and I'd
be very concerned about that. I mean, I would hope that we
would continue having NREL as the center of that research.
Secretary Chu. Oh, well, there's something else--maybe it's
this, but we are making investments in Boston, but that's a
wind test facility. That's not----
PENSIONS
Senator Dorgan. That's not what I'm thinking of. And also--
I'm going to say really nice things about you in a moment, but
I do want to ask these questions. It appears to me there's
about a $500 million to $1 billion shortfall on the pension
side.
Secretary Chu. Yes.
Senator Dorgan. And I think my colleague from Utah
mentioned that, and I didn't hear, but maybe you've answered it
since I----
Secretary Chu. No, I actually didn't get to that. This is
of great concern to us. We did scramble around for a lot of the
money. This is a serious concern. We have a lot of employees
and former employees, and we have an obligation to them. And so
there was some last-minute scrambling to find some emergency
funds. It's not completely covered yet. In the long term, this
is an obligation the Department of Energy has in the sense that
we have a liability. I don't think any other agency has this
liability. We have to figure out a way, for example, of having
our contractors move toward defined contributions rather than
defined benefits. Of course, we grandfather in all the people
that we've had obligation to. We're not talking about that. But
this overhanging liability is something serious, and because of
the stock market decrease and because of the new act that says
it has 80 percent funded, we all of the sudden got these
shortfalls.
We're aware of the problem. The long-term fix will probably
have to be something like evolving toward--as we get in new
contracts, toward defined contributions.
Senator Dorgan. Right. So we might have some unfinished
business on the budget side. I mean, it appears to us it's a
$500 million to $1 billion that's a shortfall. We'll have to
continue to work with you on that.
RECYCLING SPENT FUEL
Let me ask if you could just describe again, so that I
understand, in shorthand under what conditions would you
consider recycling spent nuclear fuel?
Secretary Chu. If we could develop proliferation
resistance, something that would be unlikely that terrorists,
if they got hold of this material, could actually work with it
as an example, if it has some soft protection, so it doesn't
create a stream of separate plutonium or something that's
easily shielded.
There's also the economic viability of the processes in
general. We want to see industry saying there's a path forward
which that we can really invest in these recycling plans. And
finally, we need to develop generation IV reactors, high-energy
neutron spectrum reactors that can burn down this waste.
I think actually all these things are solvable. It could
take decades, but I'm certainly interested in looking at it,
looking at the work. There's--if we extract a lot of the worth
of the nuclear fuel, this is a clean source of energy, baseload
energy, and I think the waste problem is solvable, and I think
there's a likelihood if we do it right and get a bunch of very
smart people on it, that we can develop these recycling
methods.
Senator Dorgan. And I would say, as you look out there,
decades out on the horizon exist not just this issue, but
hydrogen as well, in the longer term. You come from a science
laboratory, are a Nobel Prize winner, a very distinguished
person and I feel very strongly that the administration has
solicited the service of someone who's extraordinary. So I'm
very pleased you're there.
But I also know where you are. You're in the Department of
Energy, and that's a great place. You've got some great people
there. But it's also an area filled with superglue in some
areas. You just slow everything down then get it all stopped.
On the issue of loan guarantees and the things that you've come
to in this agency, an agency that in some areas, it just is
almost impossible to move. You can observe more movement in a
glacier than in the Department of Energy on some issues.
ACCELERATING LOAN GUARANTEES
So tell me about what you have discovered and what your
experience is with respect to getting some of these Loan
Guarantee Programs moving that were just dead stopped.
Secretary Chu. Well, we discovered first, that they could
be increased by a factor of 5, maybe even 10. The only way we
discovered this is actually, for example, we hired Matt Rogers,
an outstanding person from McKinsey, and by literally first
looking at other agencies in the Government, seeing how they do
their loan programs, and then looking at how we do it, but then
looking step by step at everything and how you actually go
about the business in terms of little horror stories here and
there. They said that the amount of paper required was such
that they were concerned of any loans below several hundred
million dollars. They couldn't know how people could afford to
do this because of the paperwork required, the amount of
paperwork, 500 to 1,000 pages. We're working very hard to
reduce that. The target is 50 pages. If you can't get your idea
out in 50 pages, there's something wrong with it.
In terms of vetting, many of the times, if you have a dual
vetting process, if there's a substantial financial investment
and a bank does some of the things, we can then cooperate and
do that. The idea that in helping the customers, the potential
customers, there was a strong sense that you couldn't help any
particular customer because it would be unfair, it was giving a
particular advantage to that particular applicant. And so we're
turning that around and saying there's another way to be fair--
help everyone. It's a novel thought, but we're moving ahead on
that.
And so what it really took after the first couple weeks to
say, okay. The people there need a little help in seeing that
you can actually move this considerably faster. The idea that
you go in serially and then you get to the next point and you
go again, it's like a long relay race. Every time you pass the
baton, the baton's dropped.
In actual fact, in industrial project management, in good
project managements in the Federal Government, that's not done
that way. You can start many things nearly in parallel. So we
essentially are looking at every nook and cranny and finding
that we can actually increase this considerably. And so, again,
we went from getting the first loan out in 1\1/2\ years to
getting the first loan out in 58 days from the time I took
office. And so we are very anxious to see this continue.
You made a reference to the fact that it is--the friction
in the Department of Energy is considerable. Our committee is
more that Newton was right--the body set in motion tends to
stop the next day, unless you continue to apply pressure.
But I think the good news is as we work through this and
actually give people the tools and the ideas of how to do this,
there is now beginning to be genuine excitement in the career
people.
Senator Dorgan. Senator Tester, did you have other
questions?
Senator Tester. Yes, I just had one, if I might.
Senator Dorgan. Let me just--if you might, let me finish
with my one question, then I'll recognize you for whatever you
wish.
DECARBONIZING COAL
People are coming to my office with really interesting
ideas. I had a person in some while ago who has a couple
hundred scientists working on developing synthetic microbes to
chew the coal. That's a scientific term, chew the coal, I
guess. Actually, the synthetic microbes would consume the coal,
and through the consumption of coal by these microbes, you
would produce methane, and probably even be able to do that in
situ, underground.
I have no idea whether that's just harebrained or
unbelievably interesting in the next 5 years, 25, or 50 years.
Someone comes to me with a patent that says, ``I have the
silver bullet with respect to decarbonizing coal.'' In fact, we
had a hearing on it, and the guy that comes to the hearing is
the recognized expert in the country from Stanford on cement
and concrete. And he takes all of the flue gas from a coal
plant, and through mineralization, or whatever, produces a
product that is, he says, harder than concrete and more
valuable and contains all of the CO2.
A company comes to me and says, ``We have a process by
which we separate CO2 with the flue gas, and we get
nitrogen, hydrogen, and baking soda, and baking soda contains
all the CO2.'' Those are just three, but there are
lots of them, lots of people out there doing interesting
things.
Give me your assessment. And the reason I'm asking this is
because I believe, again, we're going to continue to use coal
in the future. The question is, how effectively and at what
cost do we decarbonize coal?
Give me your assessment of those kinds of things and ideas,
and are you running into them, and do you believe they
represent great promise for the future?
Secretary Chu. I'm running into them. I think many of them
are very interesting, and we are looking at them very hard. I
think one of the things that you're seeing and the things I'm
also seeing is there's an unleashing of incredible ingenuity
and imagination. Not all these things will work. Most of them
will probably not work, but yet out of that, I think there's a
great possibility that there would be some really very good
ideas.
I'm a big fan of, at least in these early stages, where it
costs very little to explore these ideas, to explore as many of
them as possible. Now, this is actually one of the joys of
being in the job I have. We can look at these wonderful new
ideas and say, ``Is there going to be merit in this 5, 10, even
15 years out,'' of all those things, the concrete, the
conversion of coal, so most of the pollutants and the really
bad stuff is just left deep underground, and you just sip out
the natural gas.
These are potentially very good ideas. What's especially
nice about some of these ideas, especially the one on the bio
part, is that's occurring in an area where the science is
advancing very rapidly. And so the chance of a dramatic
breakthrough--because we now know how to reprogram these
microbes in completely new ways, offer real hope.
Whenever you see the science advancing most rapidly,
there's more likelihood of getting really big breakthroughs.
Senator Dorgan. Senator Tester?
RENEWABLE PORTFOLIO STANDARD
Senator Tester. Thank you, Mr. Chairman. I just--there are
two policies that we're wrestling with right now. One of them
is putting a value on carbon, and the other one is a renewable
portfolio standard. Assuming we put a value on carbon, is there
really a need for a renewable portfolio standard?
Secretary Chu. I think there is. Because of the way you are
going to be capping and bringing down the cap in a gradual way,
that it--and the type of legislation that is being discussed
actually has to allow the United States to make this transition
over a period of time. I mean, that's realistic. We just have
to do that.
And what our renewable portfolio standard does is it gives
you a guaranteed market, and so it can tell investors, we need
to get to let's say 15 or 20 percent. The price signal, if you
will, from the cap and trade and the decrease in the carbon
emissions is one way, but that has to be, by its very nature,
in order for the country to make a transition, a slow gradual
process, and a renewable electricity or renewable clean energy
standard, you say, now I've created a market, and so it's a
draw, so that the investment community can say, ``Yes, I can
put in my wind turbines or my photovoltaics.'' So they actually
complemented each other.
Senator Tester. Okay. Thank you very much.
ADDITIONAL COMMITTEE QUESTIONS
Senator Dorgan. Well, Mr. Secretary, you are the first
Cabinet Secretary to use the term joy in describing your work
in all the years I have served here, but I expect that joy
reflects your background as someone who ran a science lab, and
having access to all of the interesting things that are going
on in these laboratories.
At this time I would ask the subcommittee members to please
submit any additional questions they have for the record.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Byron L. Dorgan
Question. The DOE currently has approximately 190 multi-year
contracts for hydrogen related research that would be terminated under
the fiscal year 2010 DOE budget request. How many of these contracts go
through fiscal year 2010? What is the amount of funding that would be
required in fiscal year 2010 to honor these existing contracts?
Answer. The refocused Fuel Cell Technologies program allows the
Department to prioritize technologies that will have a more immediate
energy impact and bring consumers advanced transportation choices
sooner. Certain projects in the areas of hydrogen production and
delivery, hydrogen storage, technology validation, systems analysis,
manufacturing, safety and codes and standards, education, and market
transformation would not be funded at the 2010 request level. If the
Department continued on the previous schedule, the 190 projects would
require approximately $105 million in fiscal year 2010. However,
project performers know that funding is subject to annual appropriation
and changing priorities.
Question. Congress set up the Hydrogen Technical Advisory Committee
(HTAC) to provide detailed analysis of the hydrogen and fuel cell
vehicle program to the Secretary. Did you consult with the HTAC before
making the decision to terminate the hydrogen and fuel cell vehicle
programs?
Answer. The Secretary considered all available information before
making the decision to re-focus research, development and demonstration
activities on fuel cell system technologies. While the HTAC
periodically submits reports, letters and other information to the
Secretary for consideration, the HTAC primarily provides valuable
technical progress information, which is only one of multiple entities
supporting DOE funding allocation decisions.
Question. The 2006 Hydrogen Posture Plan established key technical
milestones and timelines. Would you agree that the hydrogen program has
been meeting and exceeding these milestones? If this is the case, how
would the fiscal year 2010 budget request not be short-circuiting the
progress being made by this program?
Answer. The Department agrees that the program has been meeting a
number of the milestones. However, given the Nation's economic climate
and the urgency in addressing climate change and petroleum reduction,
the Department is balancing the advanced transportation technology
portfolio to fast-track lower-risk energy technologies and to bring
consumers near-term, advanced transportation choices. Technologies such
as biofuels and plug-in electric drive vehicles will achieve benefits
sooner, at less cost, and with less technology risk than hydrogen fuel
cells.
In addition, the Recovery Act provides approximately $41.9 million
for near-term benefits such as commercialization and deployment of fuel
cells and job creation in fuel cell manufacturing, installation,
maintenance, and support services that will help develop a supply base
that could eventually support automotive applications. The Department
also plans to spend up to approximately $50 million in fiscal year 2010
through the Office of Science for relevant cross-cutting basic research
(e.g. catalysis, membranes and biological/photoelectrochemical
approaches) to enable breakthroughs in hydrogen technologies and $16.4
million through the Office of Fossil Energy to continue work on
hydrogen production from coal, with carbon sequestration, due to the
importance of zero carbon approaches.
______
Questions Submitted by Senator Patty Murray
Question. Secretary Chu, I am pleased to see an overall increase
for Energy Efficiency and Renewable Energy. We've got to move forward
toward a clean energy economy and this will help keep us on that path.
And now that you have spent some time at the Department, I'm
looking forward to hearing an update on the Water Power Program. As you
know, the Program received $40 million in fiscal year 2009 and the
President is requesting a 25 percent reduction in funding, which I am
very concerned about. We must continue investment in our existing hydro
facilities to allow us to use those flexible resources to firm up
intermittent renewable resources like wind and solar. And we must also
increase our work to develop new marine and hydrokinetic technologies
that may also be able to act as base load resources in the future.
What are your priorities for the Water Power program, specifically
with regard to both marine and hydrokinetic technologies and also with
regard to conventional hydropower?
Answer. DOE is excited about the potential to develop both emerging
marine and hydrokinetic technologies as well as untapped hydropower
resources, including efficiency or capacity upgrades at existing
facilities, the construction of hydropower plants at existing non-
powered dams, and the possible construction off small or ``low-impact''
hydropower and pumped storage facilities.
The $40 million appropriated for water power in fiscal year 2009
allowed DOE to initiate aggressive action to address both marine and
hydrokinetics and conventional hydropower, and the Department is
working diligently to ensure this new increased level of funding is
spent carefully and wisely. The Department's current priorities for
marine and hydrokinetic technologies (i.e. wave, tidal, in-stream,
ocean current, and ocean thermal) are to evaluate the cost and
performance of the various technology types, to determine how much
energy is available and extractable from each resource, to support the
industry in designing and testing innovative energy conversion devices,
and to predict and evaluate the possible environmental impacts of water
power technologies. As the size of these resources and the ability of
emerging technologies to capture those resources becomes clearer, the
Department will be better able to determine if higher funding levels
are necessary.
DOE also recognizes that incremental conventional hydropower
generation requires a careful second look, and is particularly
enthusiastic about its potential to provide on-demand, dispatchable
power to support grid stability and further integrate variable
generation. The Department's priorities for hydropower are to address
barriers to the development of incremental hydropower generation
(including efficiency and capacity upgrades at existing facilities and
the construction of facilities at existing non-powered dams) and to
address the development of pumped storage. DOE is undertaking a
comprehensive effort to understand existing hydropower assets and
resources, to identify undeveloped incremental hydro resources and
costs, to quantify and maximize the value of the existing hydro fleet
to support the grid, and to improve the environmental performance of
hydropower generation in the United States.
Question. Mr. Secretary, I've already reiterated my invite for you
to come out to Washington and see the DOE footprint in my State. And I
also want to encourage you--again--to visit the Marine Sciences
Laboratory in Sequim, Washington. Not only is it located on the
beautiful Olympic Peninsula, it is also the Department's only marine
sciences lab. I encourage you to use the Water Power Program to expand
the work at the lab, and utilize the expertise and knowledge there.
I am not reassured that this administration sees the value of this
potential clean energy source. Can you tell me how you plan to
integrate the Marine Sciences Laboratory into the Water Power Program?
Answer. The Department is funding a number of activities in the
Pacific Northwest, including PNNL's Marine Sciences Lab. Researchers at
the Marine Sciences Laboratory work closely with the DOE-funded
Northwest National Marine Renewable Energy Center, a partnership among
DOE, the University of Washington, and Oregon State University. The Lab
also supports environmental assessments at two tidal energy projects in
the Puget Sound led by 2008 DOE grant recipients, Verdant Power and
Snohomish County Public Utility District, so that it can thoroughly
test and develop marine energy technology designs and launch
demonstration projects. In addition, two DOE solicitations (FOAs No.
DEFOA0000069 and 0000070) for water power projects closed on June 4,
which included environmental studies for marine energy, and for which
PNNL was eligible to apply.
Question. Secretary Chu, hydropower is an important clean energy
resource in the Pacific Northwest. Work is needed to assess potential
resources and environmental impacts, technical upgrades, integration
with renewable, and the potential of pumped storage. How do you plan to
support these conventional hydropower needs within the Water Power
program?
Answer. The Department recognizes the strong role that conventional
hydropower plays in our Nation's renewable energy portfolio and is
enthusiastic about exploring further the untapped potential of
incremental conventional hydropower. We are addressing its needs in our
Water Power Program through four strategic objectives: understanding
assets and resources, increasing incremental power generation,
improving environmental performance, and maximizing hydropower values
to the grid. A key first step is a project the Department is calling
the National Hydropower Asset Assessment. This effort will build and
analyze a unique and comprehensive database of existing Federal and
non-Federal projects, their generation outputs, and water availability
at the projects. This assessment will also provide a basis for
evaluating current technology needs and opportunities that will help
hydropower maintain its important position among renewable energy in
the United States.
The Department is also soliciting new, industry-led projects to
assess undeveloped hydropower resources at existing dams in the United
States. This opportunity is encompassed within the Advanced Water Power
Funding Opportunity Announcement (DE-FOA-0000069), which will be
announced this summer. DOE laboratories are also engaged in providing
new engineering and environmental R&D to support the hydropower
industry.
Question. Mr. Secretary, what incentives can we put in place to
facilitate the development of new pumped storage resources and the
continued investment in our existing hydro facilities, to allow us to
use those flexible resources to firm up intermittent renewable
resources like wind and solar?
Answer. Development of new pumped storage projects in the United
States faces major challenges in two areas: financing very large
capital construction costs, and surviving a long, costly, and uncertain
regulatory process that is as complex as that associated with nuclear
power. If new pumped storage projects used renewable energy in their
pump cycle, these projects could also get consideration for inclusion
in renewable energy standards, which would provide an additional
financial incentive for development. Other policy initiatives that
would help this type of development include streamlining the regulatory
process and designing energy markets that return more reliable, long-
term benefits to developers of generation units that provide valuable
services to the Nation's electricity grid.
DOE recently issued a Notice of Intent on the $3.3 billion Smart
Grid Investment Grant Program and a draft Funding Opportunity
Announcement (FOA) for an additional $615 million for Smart Grid
Demonstrations funded by the Recovery Act. Energy storage technology
and specifically smart grid applications, including integration of
pumped hydro storage with renewable resources like wind and solar, are
within the scope of these two Recovery Act projects. The Department is
in the process of reviewing all comments received during the public
commenting period for incorporation into the final FOAs, both of which
are expected to be released in June 2009 through the FedConnect portal
at www.fedconnect.net.
Question. As DOE builds toward President Obama's clean energy
economy, how will DOE evaluate a resource's contribution to and
potential to meet these important, ambitious energy and environmental
goals? What role does DOE anticipate for hydropower in helping to meet
these objectives, especially as Congress moves to address global
warming?
Answer. DOE is actively investigating the potential role of water
power technologies, including both emerging marine and hydrokinetic
technologies as well as conventional hydropower, in meeting the
President's clean energy goals.
The Department is working to better understand the role for the
full suite of marine and hydrokinetic technologies, including wave,
tidal, ocean current, river in-stream, and ocean thermal energy, by
evaluating the cost and performance of the various technology types,
determining how much energy is available and extractable from each
resource, supporting the industry in designing and testing innovative
energy conversion devices, and predicting and evaluating the possible
environmental impacts of water power technologies. As the size of these
resources and the ability of emerging technologies to capture them
becomes clearer, the Department will better be able to assess their
true potential in contributing substantially to the national
electricity generation portfolio.
In addition, DOE is enthusiastic about the potential development of
certain untapped hydropower resources, including efficiency or capacity
upgrades at existing facilities, the construction of hydropower plants
at existing non-powered dams, and possibly the construction off small
or ``low-impact'' hydropower and pumped storage facilities. As a large-
scale, and quickly dispatchable generation source, incremental
hydropower may be able not only to provide a clean and renewable source
of electricity but also facilitate the further integration of
intermittent renewable resources.
Question. As you know, transportation emissions are a significant
source of greenhouse gas emissions. This administration is investing
considerably in alternative fuels for energy security and environmental
reasons; however, most of those are focused on personal vehicles. As
you know, air transportation is solely dependent on jet fuels at this
time. What thought has DOE given to advancing jet biofuels, including
research and development, feedstock development, technology and
infrastructure?
Answer. Traditionally, DOE has focused on ground transportation
fuels, while most air transportation work has been conducted by the
Department of Defense, the Department of Transportation and the
National Aeronautics and Space Administration. However, DOE has begun
to focus on the production of heavy duty fuels including, ``green'' and
renewable diesels, and aviation fuels.
For example, the Joint BioEnergy Institute led by Lawrence Berkeley
National Laboratory is re-engineering microbes to produce hydrocarbon
fuels like green gasoline, diesel, and jet fuel. A subset of recently
selected DOE Energy Frontiers Research Centers will focus on
fundamental research related to producing advanced biofuels, such as
bio-oils from microalgae, which are promising intermediates for the
production of advanced biofuels, including green jet fuel. The National
Renewable Energy Laboratory, Sandia National Laboratory, and other
laboratories are also launching research into algal biofuels for the
Defense Advanced Research Projects Agency and Air Force Office of
Scientific Research. Algae-based fuels will also be eligible for both
Advanced Research Projects Agency-Energy and DOE Loan Guarantee funding
opportunities.
Additionally, DOE will use Recovery Act funding to support a
competitive solicitation for two research consortia aimed at
accelerating the development of cost competitive advanced fungible
biofuels, which include hydrocarbon fuels, diesel and jet fuel, and
algae based biofuels which also include jet fuel. The solicitation is
expected to be released in the summer of 2009. In order to capture
relevant technologies that are ready for deployment, a current
competitive solicitation closing on June 30, 2009 allows for pilot- and
demonstration-scale biorefineries that include jet fuel from biomass.
DOE's Office of Fossil Energy announced $70.6 million of Recovery Act
funding will be spent to facilitate the existing algae-based carbon
mitigation project at Cholla Power Plant in Holbrook, Arizona to expand
testing with a coal-based gasification system. The goal is to produce
fuels from domestic resources while reducing atmospheric CO2
emissions. DOE's Office of Fossil Energy and the National Energy
Technology Laboratory issued a Recovery Act funding opportunity on June
8 that allows conversion of to CO2 biomass (algae, for
example) and subsequent biofuels production as a mechanism of
CO2 sequestration and use.
Question. Secretary Chu, I want to ask about a section of the
hydrogen fuel cell budget, the Market Transformation program. This
subcommittee has in the past supported the Market Transformation, which
helps support fuel cell deployment in early commercial applications,
because we share your view that we ought to do now what we can do now
on fuel cells. I understand that you allocated a small part of the
stimulus dollars to fuel cell deployment this year. Can you tell me why
the President's budget proposes no funding for Market Transportation
program?
Answer. The President's budget proposes no additional funds for
market transformation activities in fiscal year 2010 because the $41.9
million of Recovery Act funding dedicated to fuel cell market
transformation activities will support 13 projects over fiscal year
2009 and fiscal year 2010. These projects will deploy more than 1,000
fuel cells and will help create jobs in fuel cell manufacturing,
installation, maintenance and support service sectors. Together with
$72.4 million of industry cost-share, the total 2-year funding for
these projects is $114.3 million.
______
Questions Submitted by Senator Robert F. Bennett
LOAN GUARANTEES--LOAN PROGRAM--3.5 YEARS AND NO REWARDS
Question. Mr. Secretary, the Department has taken over 3.5 years to
establish the loan guarantee program and it still has not granted a
single loan guarantee. I believe this program has tremendous potential,
but worry that it is not being implemented in a timely and effective
manner. For example:
GAO recently notified the subcommittee staff that the current
subsidy model used to establish the risk premiums paid by applicants
was suspended in February by OMB.
Finally, I understand you have also proposed several changes to the
operations of the loan guarantee program, but many of these reforms
have yet to be implemented.
How soon, will you be implementing your reforms and will any of
these changes require legislation?
Answer. The Department is continuously implementing changes in its
procedures that facilitate the loan guarantee process. The Department
of Energy has not identified any needed legislative changes.
Question. When do you expect to make final awards in light of OMB
suspending the use of the credit subsidy model?
Answer. To clarify, OMB did not suspend the credit subsidy model.
In implementing the model, the Department identified a technical issue
related to certain types of projects and OMB and DOE have resolved the
issue. The Department issued a conditional commitment for its first
loan guarantee in March and issued two additional conditional
commitments in July.
Question. Is there anything Congress can do to help?
Answer. The Department appreciates Congress's support for this
important program.
INDUSTRY LETTER
Question. I have attached a copy of the letter sent to the
President regarding specific reforms to the Loan Guarantee program.
Can you please review each of the specific recommendations and
provide a written response to the subcommittee as to your position of
each of the policy recommendations and possible impact to the program.
Answer. The Department is currently reviewing the letter.
not all science funding is equal--especially at the weapons labs
Question. Mr. Secretary, I am troubled by the disparity in funding
for applied and fundamental scientific research provided to DOE labs
verses the NNSA labs. Clearly, the cancellation of the Los Alamos
Neutron Science Center (LANSCE) Refurbishment is the most glaring
example of the selectiveness of the research funding in this budget.
The LANSCE facility is the scientific corner stone of Los Alamos,
serving both classified and unclassified work and with over 500 users
annually.
How do you explain the failure in the budget to link the DOE and
NNSA science?
Answer. Budgeting is, in the end, an exercise in priorities and
choices with limited resources. While there is certainly good science
that could be done with a refurbished LANSCE, other investments in both
NNSA and Science facilities will yield a greater and more immediate
benefit. A refurbishment could be considered in the next budget cycle.
Question. The OMB Web site lists LANSCE refurbishment as a
terminated program and specifically states one reason being that
Nuclear Energy Office doesn't support isotope production any longer.
Last year the isotope program was shifted to the Office of Science
program. Will LANSCE continue to have a roll [sic] in the Science
program?
Answer. The Isotope Production Facility (IPF) at LANSCE uses a
portion of the H+ beam extracted at 100 MeV from the
accelerator; this facility produces a variety of radioisotopes used in
medical diagnosis and treatment and for scientific research. Together
with DOE's Brookhaven and Oak Ridge National Laboratories, the IPF
provides the national supply of radioisotopes not available
commercially for both research and applications. In addition to regular
fiscal year 2009 appropriations and an fiscal year 2010 request within
the Office of Science, the IPF is currently receiving Recovery Act
funds from the Office of Science for enhanced isotope production
capabilities and R&D. The LANSCE accelerator also supplies protons to
the Lujan Center, a pulsed spallation neutron source that is used by
researchers supported by the Office of Science, NNSA, and other
agencies.
THE NEED FOR SCIENTIFIC LEADERSHIP WITHIN THE NNSA
Question. Mr. Secretary, in light of your budget, which fails to
adequately invest in building the science missions at the NNSA labs, I
believe we need to establish a new position within the NNSA to steward
and cultivate scientific research using the existing NNSA facilities. I
believe this position should report to Secretary, Deputy Secretary and
the NNSA Administrator. This might help raise awareness of both the
weapons science, and non-weapons science that goes on at our NNSA labs.
Certainly the grand challenge of energy security and climate change
science are of such complexity that this work can and should be shared
with all the labs.
I am considering a modification to the NNSA Act to create a new
position within the NNSA reporting directly to you to lead the NNSA
science program and to work with the rest of the Department to
integrate the national security capabilities with those in basic and
applied programs within DOE. What do you think about that?
Answer. I share your concern about sustaining science and
engineering vitality at the NNSA's laboratories at Los Alamos,
Livermore and Sandia. We are considering how to best broaden and
sustain our science underpinning of nuclear security and how to do that
appropriately for the related interests of other agencies that use
these laboratory capabilities for science and national security
missions. It is possible that a new position as you describe could be
appropriate and useful in sustaining and advancing the science and
engineering the Nation needs. At present we are focusing on basis and
needs for our nuclear security science and engineering considering both
the Department's missions and the related interests such as those in
the intelligence community, the Department of Defense and the
Department of Homeland Security. Within a few months, when I have a
clearer picture of the basis and needs for these science and
engineering skills, we will be in a better position to discuss the
change you propose.
FOSSIL ENERGY--FUTUREGEN
Question. The FutureGen project was halted due to cost escalations,
but it is my understanding that the administration is considering
resuming this project, using $1 billion in Recovery Act Funds to do so.
Can you share with us your thoughts on resuming this project?
Answer. DOE officials have been meeting with officials of the
FutureGen Industrial Alliance, Inc., and on June 12, Secretary Chu
announced that an agreement was established with the Alliance to move
forward with the FutureGen project pending a joint decision based on a
detailed cost estimate and fundraising activities, thereby limiting the
risk of cost increases while accomplishing the goals of the program.
Question. There is roughly $1.5 billion available for the Clean
Coal Power Initiative (CCPI) round three solicitation. This far exceeds
the initial requested amount for this solicitation, and in large part
is due to project defaults from previous rounds. This research also
mirrors the demonstration goals of building a zero-emission coal plant
as proposed by FutureGen.
Will you please explain to us why you are considering restarting
the FutureGen project, when that same type of research is available for
the CCPI round three solicitation?
Answer. The FutureGen project has already completed conceptual
design, project siting, approximately 1 year of preliminary design
activities, an extensive Environmental Impact Statement (EIS), and an
associated risk assessment. With those activities already completed, if
the project was reinstated in the near future, the FutureGen Alliance
conceptually could complete preliminary and detailed design and, if a
decision were made to proceed, potentially could start the construction
phase in 2010. Conversely, commercial demonstration projects resulting
from the CCPI round three solicitation are at the proposal or project
definition stage of development. Accordingly, it may take those
projects considerable time to commence construction, compared to
FutureGen. Given the time-sensitive nature of both climate change and
economic recovery, the FutureGen project (if it is restarted) could
provide a demonstration of technology that could accelerate follow-on
activities such as CCPI projects (where relevant.) Also, CCPI
demonstration projects may involve different technologies and site
locations than FutureGen. We believe it is prudent to develop a
portfolio of power plant and carbon capture technologies, as well as to
compile operational experience on different regional sequestration
geologies throughout the United States.
The FutureGen Project will provide for the design, construction and
operation of a coal-fueled, integrated gasification combined cycle
(IGCC) with pre-combustion subsystems for the capture of carbon dioxide
and geologic sequestration into a saline formation. In comparison,
CCPI-3 will provide commercial demonstration projects that may include
post-combustion capture systems or an oxy-fueled combustion process.
CCPI-3 will provide one or more sequestration options, including
beneficial reuse in enhanced oil recovery or enhanced coal bed methane
recovery options as well as the possibility of basalt formations or
stacked storage. The different approaches provided by these programs
will support an expanded portfolio providing the DOE the ability to
make progress toward capture and sequestration goals.
SCIENCE
Question. This budget includes over $300 million in new Secretarial
priority initiatives, while funding for Nuclear Energy, Fossil Energy
and NNSA Science have all been reduced.
How do you reconcile this investment?
Answer. Under the Secretary's proposed initiatives the Department's
overall investment in Nuclear Energy, Fossil Energy, and NNSA will
actually increase, with new funding going into areas with the biggest
potential pay-off for the Nation. In Nuclear Energy, the Secretary is
proposing two new Energy Innovation Hubs, one to support ``Extreme
Materials'' with the goal of achieving higher reactor efficiencies and
one to support advanced computer modeling and simulations of nuclear
processes and systems. For Fossil Energy, a Hub is envisioned to
advance Carbon Capture and Sequestration technology. And, within the
NNSA, funding shifts from construction to the transition of the
National Ignition Facility to a fully capable experimental facility in
pursuit of the first ignition campaign.
In addition, the RE-ENERGYSE program (Regaining our ENERGY Science
and Engineering Edge) is a $115 million new initiative designed to
attract and train the next generation workforce for the 21st century
energy economy. RE-ENERGYSE will support education and R&D initiatives
in all energy programs.
ARPA-E
Question. In light of the new Energy Hubs, large untapped potential
in the loan guarantee program, and substantial funding increases for
EERE and Science, I am trying to figure out the role ARPA-E at the
Department of Energy, except as another layer of bureaucracy.
Can you please provide a specific example or technology that will
benefit from ARPA-E and how is it different from the loan guarantee
program, office of science or renewable energy efforts?
Answer. ARPA-E is a highly entrepreneurial program that will fund
``creative, out-of-the-box, transformational'' energy research not
currently funded by other programs. ARPA-E seeks to accelerate
transformational advances in areas which address national energy
priorities and are too risky for industry to invest in without public
support. Transformational R&D is about creating new ways of doing
things and leading to the next generation of technology that will allow
the United States to be competitive in the global market.
ARPA-E will seek out the best ideas and move quickly to bring
selected immature energy technologies with exceptional potential beyond
the risk barriers that prevent their translation from the laboratory
bench to the marketplace. Essential aspects of this nimble and flexible
approach include:
--Technology Focus Flexibility.--ARPA-E will look for the best
opportunities to improve energy security and curb climate
change by making significant programmatic investments lasting 2
to 5 years. ARPA-E will fund transformational, high risk
technologies with the potential for 2-3 improvements in
technology performance and/or cost when compared to current
technologies. ARPA-E will then move on to the next big ideas,
shifting into and out of areas depending on the most promising
opportunities for transformational change.
--Programmatic Flexibility.--ARPA-E will have the flexibility to
forge and nurture optimized partnerships that combine unique
talents and insight from different fields. The programs can use
DOE's ``Other Transactions'' authority (Technology Investment
Agreements) to help attract organizations that traditionally do
not participate in Government RD&D programs. Also, ARPAE will
promote results-oriented programs through the use of
challenging program milestones and the discipline to end
programs that fail to perform.
--Organizational Flexibility.--ARPA-E is a lean, flat organization
that reports directly to the Secretary of Energy. ARPA-E has
very broad hiring authority to attract program managers from
universities, industry, the venture capital community and
elsewhere. Program managers will be part of the organization
for 3 year terms--not for their entire career. After having
made a successful technology impact, they will move on to other
opportunities in industry, academia, and elsewhere. ARPA-E's
structure will promote technical and programmatic agility by
ensuring that the organization has the right resources to
address the goal of enhancing the United State's economic and
energy security.
These essential aspects of ARPA-E's approach will allow scientists
and technologists to rapidly bring transformational ideas to a level of
maturity sufficient for industry to take over development and bring the
resultant technologies to market. ARPA-E's mission is to enhance the
economic and energy security of the United States by developing new
energy technologies that offer the potential for making significant
progress toward reducing imported energy; reducing energy-related
emissions, including greenhouse gases; and improving energy efficiency.
Each of the other existing DOE organizations has a unique role that
ARPA-E complements.
--The Office of Science (SC) is charged with discovery and knowledge
generation. SC is focused on the fundamentals of energy-related
science, generating new discoveries and a base of knowledge
which are used to create future energy technologies and improve
existing ones.
--The Office of Energy Efficiency and Renewable Energy (EERE) and the
other Applied Programs at DOE are focused on applied R&D as
well as demonstration and deployment activities in specific,
targeted, program areas which address national energy
priorities and in collaboration with industry. Both EERE and
ARPA-E focus on high pay-off technology development. However,
EERE supports a more focused suite of technologies through a
longer gestation period. Such longer-term support may include
commercial viability demonstration projects which are often
necessary before market acceptance of capital-intensive energy
technologies as well as activities which address other
information, market, and regulatory barriers to technology
adoption. The commercial demonstration projects involve large
scale engineering and process integration work and require
specialized management and oversight.
--The Energy Innovation Hubs, modeled on the Department's successful
Bioenergy Research Centers, will focus significant R&D
resources within SC, EERE and other Applied Programs on a
sustained development approach to basic and applied R&D on our
most critical energy science and technology challenges. This is
to be contrasted with the opportunistic style of ARPA-E, which
is designed to push an area rapidly forward and then move on to
another priority. Each Hub will be comprised of a highly
collaborative team spanning many disciplines and drawn from the
full spectrum of R&D practitioners--including universities,
private industry, non-profits, and national laboratories--and
each Hub is expected to become a world leader for R&D in its
topical area. The Hubs will support cross-disciplinary R&D
focused on the barriers to transforming energy technologies
into commercially deployable materials, devices, and systems.
Each Hub has proposed funding at $25 million per year, for a 5-
year term, with additional start-up funding of $10 million in
the first year for renovation (but not ``bricks and mortar''),
equipment, and instrumentation.
--The Loan Guarantee Program is for a later stage of technology
development, guaranteeing loans to support early commercial use
of advanced technologies (and for a limited time commercial
technologies under the Recovery Act). The Loan Guarantee
Program is targeted at early commercial use, not energy
research, development, and demonstration programs.
Each of the organizations has a unique contribution for creating,
developing, and deploying the energy technologies this Nation needs.
ARPA-E was formed this spring and has released its first solicitation,
but has not yet selected nor funded any projects. ARPA-E is organized
to manage high risk R&D projects proactively. Many years of experience
in scientific research and technology development have shown that
different stages of the science and technology enterprise need
different management styles and organization. ARPA-E complements the
existing DOE organizations by adding one specifically organized and
focused on high-risk transformational technologies.
NUCLEAR ENERGY
Question. Will the United States continue to play a role in the
Global Nuclear Energy Partnership international discussions and
contribute actively to these meetings and support international
research and best practices regarding nuclear safety, security and
nonproliferation? Will the Department of Energy continue to send staff
to participate in these meetings?
Answer. Yes, the United States continues to support the objectives
of the international component of GNEP and the use of civil nuclear
energy in ways that advance safety, security and nonproliferation. The
Department continues to participate in the GNEP international meetings
while the subject of how best to achieve GNEP-international objectives
is undergoing an interagency review. We believe that proliferation
issues should be a top priority in any discussions about the expanded
use of civil nuclear energy and, in particular, in discussions that
relate to development, deployment and operation of fuel cycle
technologies. Thus, it is important for the Department to remain
engaged in international meetings and activities that are developing
strategies to ensure reliable nuclear fuel services and to provide
management options for spent fuel in a manner that minimizes
proliferation concerns.
YUCCA MOUNTAIN
Question. Nuclear power will be critical to reaching our energy
independence and reducing our reliance on fossil fuels. Yet, with the
termination of Yucca Mountain in this budget, we still have no clear
strategy on how to deal with nuclear waste.
Exactly what is the Department's strategy to deal with spent fuel?
Answer. The administration intends to convene a ``blue-ribbon''
panel of experts to evaluate alternative approaches for meeting the
Federal responsibility to manage and ultimately dispose of spent
nuclear fuel and high-level radioactive waste from both commercial and
defense activities.
Question. Why should the ratepayers, who have paid $20 billion in
fees, be forced to continue to store on site and not be entitled to a
refund of these fees?
Answer. We remain committed to meeting our obligations for managing
and ultimately disposing of spent nuclear fuel and high-level
radioactive waste. The administration intends to convene a ``blue-
ribbon'' panel of experts to evaluate alternative approaches for
meeting the Federal responsibility to manage and ultimately dispose of
spent nuclear fuel and high-level radioactive waste from both
commercial and defense activities. The administration looks forward to
ongoing dialogue with members of Congress, interested stakeholders, and
others as we review these alternative approaches in the months ahead.
Question. You have announced that you intend to appoint a Blue
Ribbon Commission to consider all the options for addressing our spent
fuel needs.
When do you intend to appoint this commission and what will they
specifically be asked to consider?
Answer. The ``blue-ribbon'' panel will provide the opportunity for
a full public dialogue on how best to address this challenging issue
and will provide recommendations that may form the basis for working
with Congress to revise the statutory framework for managing and
disposing of spent nuclear fuel and high-level radioactive waste. As we
go forward with convening the panel, I will keep Congress informed of
our progress.
IDAHO NATIONAL LAB--NEXT GENERATION NUCLEAR PLANT (NGNP)
Question. Mr. Secretary, the Idaho laboratory has aggressively
pursued the Next Generation Nuclear Plant (NGNP) project. The Energy
Policy Act of 2005 authorized the construction of this reactor at the
Idaho National Lab.
The fiscal year 2010 budget documents make no mention of this
plant. In fact, rather than prioritizing research on two advanced
technology reactors which were down selected last year, this budget
proposes to expand research back to 6 types of advanced reactors.
Can you please explain the justification for expanding the
Department's research priorities? Where is this program headed and what
does it mean for the NGNP reactor at Idaho?
Answer. The fiscal year 2010 budget request of $191 million
represents a firm commitment to move forward with needed long term
research and development on underlying technologies supporting
Generation IV reactor concepts, including high temperature gas reactors
under consideration for the Next Generation Nuclear Plant (NGNP). The
request also includes $35 million for a modeling and simulation Energy
Innovation Hub. The Department is currently evaluating its long-term
plans for the NGNP project, which would rely on the private sector
entering into a cost-sharing partnership with the Department. This
budget request reflects the Department's commitment to be a strong
partner in support of gas reactor technology.
PENSIONS
Question. Understanding that the pension funding shortfalls
continue to shift on a daily basis; will the Department please provide
written quarterly updates regarding the estimated pension shortfalls
and programmatic impacts?
I think every member of this subcommittee would classify
Environmental Cleanup as a priority, and you can see this in the
funding provided in the Recovery Act. However, your request decreases
the funding from fiscal year 2009 based on funding in the Recovery Act.
EERE and Science also received large sums of money in the Recovery Act,
but both of those programs are increased in your budget request.
How can you justify cutting cleanup because of Recovery Act funds,
when you have a $400 million pension shortfall in this program?
Answer. The Department closely monitors the funding obligations
associated with DOE contractor sponsored defined-benefit (DB) pension
plans. Each contractor that sponsors a DB pension plan collects
information to determine a plan's funded status as of the end of each
pension plan year (that for most plans is December 31) that is then
certified by a plan's actuary as of April 1. This funded status is the
basis for determining what level of funding the contractor must
contribute to a DB pension plan to ensure that as of the end of a plan
year the plan is funded in accordance with applicable law (e.g., the
Employee Retirement Income Security Act) and Departmental direction.
Evaluations of a plan's funded status at interim points during the
pension plan year would not change the level of funding required for
that pension plan year or provide any certainty about what level of
funding will be needed for the next pension plan year. Therefore,
quarterly updates on the funded status of a plan would not provide
information that would be useful in determining the amount of funds
that will be needed to meet annual funding requirements. However, the
Department is prepared to brief your staff on this issue at any time.
The fiscal year 2010 budget request for the Environmental
Management program supports the Department's mission and allows
contractors to make all required pension payments to their DB pension
plans.
Question. Do you foresee any layoffs at any of the cleanup sites as
a result of unfunded pension obligations?
Answer. The Department closely monitors the funding obligations
associated with DOE contractor sponsored defined-benefit (DB) pension
plans. Each contractor that sponsors a DB pension plan collects
information to determine a plan's funded status as of the end of each
pension plan year (that for most plans is December 31) that is then
certified by a plan's actuary as of April 1. This funded status is the
basis for determining what level of funding the contractor must
contribute to a DB pension plan to ensure that as of the end of a plan
year the plan is funded in accordance with applicable law (e.g., the
Employee Retirement Income Security Act) and Departmental direction.
Evaluations of a plan's funded status at interim points during the
pension plan year would not change the level of funding required for
that pension plan year or provide any certainty about what level of
funding will be needed for the next pension plan year. Therefore,
quarterly updates on the funded status of a plan would not provide
information that would be useful in determining the amount of funds
that will be needed to meet annual funding requirements. However, the
Department is prepared to brief your staff on this issue at any time.
The Department does not anticipate impacts to the EM contractor
workforce during fiscal year 2010 due to contractor funding of DB
pension plans.
ENERGY INNOVATION HUBS
Question. Mr. Secretary, this budget provides $280 million to
establish eight energy hubs, a personal priority of yours. These eight
centers of excellence will attack energy related problems in a
collaborative manner.
Why did the budget recommend establishing a hub for extreme
materials research within the Office of Nuclear Energy and at the same
time cancel the refurbishment of the Los Alamos Neutron Science Center,
which supports a similar mission and also has computing capabilities?
Answer. The Energy Innovation Hub for Extreme Materials will be
competitively chosen. Its mission will be to support cross-disciplinary
research and development focused on the barriers to transforming energy
technologies into commercially deployable materials, devices and
systems. Since the location and specific work scope of the Energy
Innovation Hub for Extreme Materials will be decided through a
competitive procurement process, it must be independent of the
refurbishment of the Los Alamos Neutron Science Center.
While there is certainly good science that could be done with a
refurbished LANSCE, DOE believes that other investments in other
facilities will yield a greater and more immediate benefit.
The eight Energy Innovation Hubs will advance highly promising
areas of energy science and technology from their early research
concept stage to the point where the risk level is low enough for
industry to deploy them into the marketplace. The work of the Hubs will
encompass the full span from basic research to engineering development
to commercialization and hand-off to industry.
Question. Did the Department give any thought to establishing a hub
to focus on environmental cleanup? What about a hub to defeat the cyber
security threat?
Answer. The Department deliberated at length on the optimum number
and topics for the Energy Innovation Hubs. The goal for the Hubs is to
make significant progress in overcoming current barriers to the United
States' becoming a global leader in new energy technologies. The focus
of the Hubs is on development and commercialization of clean, economic,
sustainable energy technologies.
Neither the Environmental Management program nor Cyber Security
efforts in the Department fall within this ``energy technologies''
focus of the Hubs. And, in fact, each of these efforts is already well
defined and supported. That said, the concept of establishing a Hub for
either Environmental Management or Cyber Security could be considered
in the future if such an idea seemed advisable.
WEATHERIZATION
Question. The weatherization assistance program has over $5 billion
available from the ARRA, Continuing Resolution, and fiscal year 2009. I
am told that the Department will be spending that money over the next 3
years.
How can you justify another $220 million request when you cannot
spend it this fiscal year?
Answer. To achieve the increases in the numbers of homes
weatherized, State and local agencies are in the process of hiring and
training thousands of workers. In addition to increased hiring, State
and local agencies will be making a substantial capital investment in
procuring vehicles and equipment to outfit these new weatherization
crews. However, the ``ramp-up'' in the number of weatherized homes per
month enabled by Recovery Act funds will not be fully realized until
the hiring, training, and acquisition process is completed. DOE expects
that the weatherization network should be close to its target rate of
22,000 homes weatherized per month by the end of the year. As a result,
DOE expects that weatherization activities enabled by the Recovery Act
should continue into 2011.
Additional funds in fiscal year 2010 are required to maintain the
pace of hiring, training and expansion enabled by the Recovery Act in
order to build the capacity needed to realize the President's goal of
weatherizing 1 million homes annually. Without this continued
investment, new hires could be lost at the end of 3 years and local
agencies could be saddled with excess vehicles, equipment, and costs
associated with lay-offs of their work forces.
CYBER SECURITY
Question. Mr. Secretary, the largest increase in the budget of the
Office of Electricity Delivery and Reliability is for cyber security.
No doubt, this is in response to the press reports that foreign hackers
can gain access to our electrical grid.
However, NNSA cyber security staff has briefed the subcommittee
regarding a large and sustained increase in cyber attacks against
Department systems this year. Unfortunately, the budget for NNSA cyber
security fails to provide any increase to combat these cyber attacks on
our national security infrastructure.
How do you rationalize an increase in the Office of Electricity,
but no increase for the NNSA?
Answer. NNSA's cyber security budget was not increased because NNSA
has sufficient resources to address the threats.
Question. Do you believe you have the threats to the NNSA
classified and national security information contained?
Answer. The threats to the national security information and
classified system within the NNSA computing environment are constantly
changing and represent risks to our operations. However, with the
technology enhancement (i.e. EnCase Enterprise) and process
improvements (NNSA Policy (NAP)) NNSA has invested in over the past 2
years, I believe that we have minimized the threats to the classified
environment and national security information and are operating at an
acceptable level of risk. The Department and NNSA senior leadership
will continue to monitor the threats to our classified information
technology assets along with the accompanying risks in order to make
necessary changes and provide an appropriate level of protection.
URANIUM TAXES
Question. Mr. Secretary, your budget proposes a $200 million/year
tax on nuclear power utilities to be applied to the Uranium Enrichment
Decommission and Decontamination Fund. This account currently enjoys a
surplus of $4.7 billion and can sustain the ongoing cleanup for 7 years
at current spending rates. Since these funds are not needed immediately
and haven't been reauthorized by Congress I have to assume this is
nothing more than a gimmick used to offset deficit spending or meet
budget shortfalls.
Mr. Secretary, the GAO did a study last year and found that the
Department had a very valuable amount of unrecovered uranium sitting in
storage at the very sites you want to cleanup. The value of these
depleted uranium tails easily exceed the revenue raised by the tax and
cleanup an existing liability on the Department's books.
Will you consider the sale of the depleted uranium tails stored in
Kentucky and Ohio as an alternative to raising taxes on utilities who
use nuclear power and have already paid $1.5 billion in taxes already?
Answer. The Department continues to monitor the uranium market as
it manages various inventories of uranium declared excess to the
Nation's national security needs. Any proceeds from any sale of the
Department's uranium inventory will be deposited in the U.S. Treasury
as required by the Miscellaneous Receipts Act (31 U.S.C. 3302);
therefore, the proceeds cannot be applied toward cleanup of the gaseous
diffusion plants.
CLEAN UP FUNDING
Question. Mr. Secretary, your budget tells two distinctly different
stories regarding the stimulus funds. When it comes to environmental
cleanup, you justify a reduction in the fiscal year 2010 budget request
due available stimulus funds. [sic] However, when it comes to renewable
energy projects you have provided additional increases despite that
program enjoying $17 billion in additional Stimulus funding.
Can you please explain why this budget tells two completely
different stories regarding the impact of stimulus funding on the
budget?
Answer. The total funding requests provided in the fiscal year 2010
budget, in conjunction with Recovery Act funds, were carefully
considered so as to make the biggest impact, given the status of the
science and technology in each area.
The fiscal year 2010 budget was formulated in light of the
significant funding provided in the Recovery Act. Recovery funding
enabled the Department to accelerate a number of important commitments
in the areas of renewable energy, environmental management, grid
modernization, carbon capture and sequestration (CCS) and basic science
research.
In building the fiscal year 2010 request, the administration
adopted a thoughtful approach that considered not only whether a
program had received Recovery Act funding, but also how those funds fit
within our overall policy goals and priorities.
In some cases, the Recovery Act investments are so significant that
they amount to several years of base funding. This allowed the
Department to make prudent use of our resources to address other high
priorities. In other instances, like Environmental Management, the
Recovery funding is being used on projects that meet the objectives of
economic stimulus, but which may not ordinarily compete well against
projects aimed at addressing the clean up of higher-risk sites. Our
fiscal year 2010 request for EM continues to focus on high risk sites.
______
Questions Submitted by Senator Thad Cochran
Question. Mr. Secretary, in your budget for the Strategic Petroleum
Reserve, you propose roughly $50 million for the purchase of a new
cavern to replace an existing storage cavern that was said to pose ``an
extreme environmental risk.'' My staff was informed that the Department
purchased this cavern instead of taking advantage of salt domes already
owned by the Department of Energy for Strategic Petroleum Reserve
Expansion. Why?
Answer. The Department has not purchased any new caverns for the
Strategic Petroleum Reserve. The cavern that has been identified for
decommissioning, Cavern 20, is located at the Bayou Choctaw site and is
in very close proximity to the edge of the salt dome. After use during
Hurricane Katrina in 2005, Cavern 20 experienced preferential leaching
towards the edge of the salt dome. Continued use of the cavern presents
a risk of major environmental danger. The fiscal year 2010 request
proposes funding for the purchase of an existing commercial storage
cavern that is located adjacent to the Bayou Choctaw site to replace
the unsound cavern. It is vital for the Department to maintain its
current inventory level and drawdown response capabilities at the Bayou
Choctaw site because this site is the only Strategic Petroleum Reserve
site that directly serves the refiners on the lower Mississippi River
and refiners in the Midwest served by the Capline Distribution System.
Crude oil releases from this site were instrumental in keeping the
Capline system refiners supplied after the hurricanes in 2005 and 2008.
Question. Your acting assistant Secretary for the Strategic
Petroleum Reserve testified before the Environment and Public Works
Committee recently about legislation sponsored by Senator Bingaman to
create new storage for refined oil in the Strategic Petroleum Reserve.
As you know, salt domes in my State of Mississippi were identified by
the last administration as a possible location for the expansion of the
Strategic Petroleum Reserve. Although funds were not included for
expansion activities in your budget, your staff expressed interest in
the idea of new refined oil storage capacity. The Department of Energy
owns salt caverns in Mississippi, which could hold both refined and
crude oil. Will Mississippi be considered as the site for this plan,
likely to be included in the Energy package Senator Bingaman is
planning to move through the Senate this summer?
Answer. Although the Department has identified land for site
development for 1 billion barrel expansion of the SPR at Richton,
Mississippi, the Department has not acquired the land. Rather, DOE has
completed prerequisite activities to include salt dome seismic
analyses, site environmental surveys, and title work in preparation for
the site acquisition. DOE has recently concluded studies for
preparation of a Supplemental Environmental Impact Statement (SEIS) to
find more environmentally suitable locations for the water intake
system, the offshore brine disposal and the marine terminal in
Pascagoula.
The Department is currently evaluating the situation involving the
land acquisition and the additional $31.5 million appropriated in
fiscal year 2009 for new site expansion activities, beyond land
acquisition.
Question. Funding for fiscal year 2009 for the Strategic Petroleum
Reserve included $35 million for the Richton, Mississippi site,
contingent on a report issued by the Department within 45 days. My
staff has contacted yours about the report. What is the status of this
report?
Answer. Pursuant to the fiscal year 2009 Omnibus Appropriations Act
(Public Law 111-8), a draft report assessing the effects of expansion
of the Reserve on the domestic petroleum market is undergoing internal
review. We will publish and submit the final report to Congress as soon
as the review process has been completed.
______
Questions Submitted by Senator George V. Voinovich
Question. Over the last several years, the Department of Energy has
greatly increased its oversight of the contractors responsible for
managing and operating (M&O) the national laboratories under M&O
contracts through prescriptive directives and requirements administered
by overlapping and often redundant oversight organizations. Currently,
the DOE's oversight organizations employ thousands of Federal staff
with annual budgets of $500 million. Given that no other agency expends
this amount of resources to oversee contractors who were supposedly
engaged to apply best private-sector practices to operations, do you
think the level of regulatory oversight at the Department's national
laboratories has gotten out of control and hampers their ability to
provide solutions to our Nation's pressing energy needs?
Answer. As Secretary of Energy, I am firmly committed to improving
efficiency at our Laboratories. There is much that the Department can
and will do to enhance our laboratories' ability to deliver on the DOE
missions. Significant improvement can be made with a concerted effort.
Further, we will also review the use of independent certifications (ISO
9000 and 14000, DOE Voluntary Protection Programs, etc.) as part of our
expectations and our strategy for overseeing our contractors' business
and operations systems and processes. Finally, we will consider the
circumstances under which external regulation may be appropriate.
Question. The Government-owned, contractor-operated (GOCO) model
for laboratory management was originally designed to bring the best
possible scientific and management talent to the laboratories and to
allow them to apply the best private-sector business practices, thus
maximizing their flexibility and efficiency. However, as laboratory
resources are increasingly being redirected from performing R&D to
demonstrating compliance with extremely prescriptive DOE work
requirements, the argument for rethinking DOE's GOCO model is
strengthened. What is your vision of the GOCO management relationship
between DOE and its contractors?
Answer. In my view, the proper relationship between the Department
and its M&O contractors is one that focuses on clear definitions of
performance expectations and outcomes and on holding our contractors
accountable for achieving those outcomes.
The success of the relationship between DOE and its M&O contractors
depends on a clear and consistently-applied understanding of the roles
and responsibilities of each party. The Department should specify what
goals and requirements the contractors must meet and then hold the
contractors accountable for meeting these goals. The contractors should
determine how to meet those contract goals and requirements and apply
best business practices.
Question. How do you explain the current role of the local DOE
site/field offices, and do you see this role changing over time?
Answer. The current role of the local DOE site/field offices is to
provide contractual support and oversight of the Department's national
laboratories and other facilities that are Government-owned and
contractor operated (GOCO). As you know, I am committed to improving
the overall management of the Department, to make it more efficient,
responsive, and economic in meeting our missions and better serving the
American people. Toward this end I have already begun the process of
reviewing the Department's current management structures, processes,
and procedures, and would expect this to continue for some time.
Question. In terms of execution of civilian R&D programs, how would
you categorize the differences between the DOE Office of Science,
National Science Foundation, and National Institute of Health?
Answer. DOE is a mission agency with responsibilities in energy,
environment, national security, and discovery science. The DOE Office
of Science supports scientific research within this mission at over 300
universities and the national laboratories. The Office of Science also
plans, builds, and operates scientific user facilities for the
scientific community. These facilities are a significant pillar of the
U.S. scientific enterprise. The DOE Office of Science is the steward
for 10 national laboratories, and it is the primary Federal supporter
of basic research in service of the energy mission. The programs of the
Office of Science are carefully planned and focused in areas of
importance to advance the DOE mission.
NIH is the primary Federal agency for conducting and supporting
medical research. It is part of the Department of Health and Human
Services, the principal agency for protecting the health of all
Americans and providing essential human services. NIH employs
intramural researchers and also funds extramural researchers. The DOE
Office of Science generally does not directly fund medical science and
does not have Federal intramural researchers.
The National Science Foundation (NSF) aims ``to promote the
progress of science; to advance the national health, prosperity, and
welfare; to secure the national defense. . . .'' The NSF supports all
fields of fundamental science and engineering, except for medical
sciences, and also supports the social sciences.
NSF is proposal-driven and funds science independent of the field
or application of that science; in contrast the DOE Office of Science
is mission-driven, supporting science serving the DOE missions of
energy, environment, and national security.
A cornerstone of Office of Science funding is a rigorous peer
review process, much like NIH and NSF.
Question. Although our national laboratory system includes what may
be the largest and most impressive collection of scientific facilities
and talent in the world, the American tax payer does not receive the
maximum benefit from these investments because current DOE policy
prevents labs from partnering with private companies on research
proposals from Federal agencies. Would you support a change in current
DOE policy to authorize national laboratories, on a non-exclusive
basis, to partner with private industry on research request for
proposals (RFPs)?
Answer. Senator Voinovich, you raise an interesting issue as to how
to best utilize our national laboratories, which for the most part are
Government-owned contractor-operated and are Federally Funded Research
and Development Centers (FFRDCs). Our national laboratories partner
extensively with private industry through, for example, the Work for
Others program, Cooperative Research and Development Agreements,
licensing arrangements and user agreements. With respect to responding
to RFPs, however, the Federal Acquisition Regulation, which applies on
a Government-wide basis, requires that agencies sponsoring FFRDCs
include in the sponsoring agreement a prohibition against the FFRDC's
competing with any non-FFRDC concern in response to a Federal agency
RFP. DOE's implementation of that requirement is set out in DOE Order
481.1C stating that FFRDCs may not respond to RFPs that involve head-
to-head competition. This preclusion is based partly on the sanctioned
special access to Government information that FFRDCs have that could
put commercial competitors at a disadvantage. The Order goes on to
permit, under certain circumstances, FFRDCs to respond to Broad Agency
Announcements, financial assistance solicitations, Program Research and
Development Announcements, and similar solicitations which do not
result in head-to-head competition. I believe that the DOE should look
carefully at improving opportunities for private industry to partner
with DOE national laboratories.
Question. Has the Department of Energy determined which energy
sources will provide the most electricity with the lowest carbon-
emissions and smallest lifecycle footprint on the environment as a
whole, including raw materials and land usage? Has the DOE done a
comprehensive study to determine the effectiveness of U.S. energy
subsidies, and if not, has the DOE determined which energy subsidies,
if any, would result in the best return on investment for tax payers
while meeting the President's GHG emissions targets?
Answer. No, but the Department of Energy is continuing to develop
and evaluate a portfolio of technologies with the lowest life-cycle
costs and carbon footprint to meet the Nation's growing electricity
demand.
Numerous Federal programs operate today to help accelerate the
deployment of greenhouse gas intensity-reducing technologies by
providing various financial incentives, including direct subsidies.
While these financial incentives are expected to reduce GHG emissions,
they also incur costs to the U.S. Government. DOE is evaluating the
economic and environmental effectiveness of energy subsidies. The
Energy Information Administration did recently complete a study,
``Federal Financial Interventions and Subsidies in Energy Markets,''
but this study does not calculate the return on investment in terms of
GHG emissions reduction. The executive summary is available at: http://
www.eia.doe.gov/oiaf/servicerpt/subsidy2/pdf/execsum.pdf.
Question. What is the Department of Energy doing to help expand the
number of nuclear power plants we have in the United States and reduce
our dependence on foreign energy sources? Will additional loan
guarantee authority be given to allow industry to move forward?
Answer. The Nuclear Power 2010 (NP2010) program was established to
address the issues limiting deployment of new nuclear plants in the
United States. The primary goal of the NP2010 program was to
demonstrate the streamlined Federal regulatory processes governing the
siting and construction of new, standardized nuclear plant designs. The
NP2010 program has successfully met its objectives, and we await
industry decisions to build the first new nuclear plants in more than
30 years. The NP2010 program is requesting $20.0 million in fiscal year
2010 to complete support of the NuStart New Nuclear Plant Licensing
Demonstration project. This industry cost-shared project includes
interactions with the Nuclear Regulatory Commission (NRC) to obtain the
NuStart Construction and Operating License for the AP1000 advanced
light water reactor design including meetings with the Advisory
Committee on Reactor Safety, issuance of Final Safety Evaluation
Reports and Final Environmental Impact Statements and initiation of
hearings by the Advisory Committee on Reactor Safeguards.
Taken together, the NP2010 program and loan guarantees for nuclear
power projects are designed to address the technical, regulatory and
financial risks associated with deploying new nuclear plants. DOE is
not seeking additional loan guarantee authority or additional
appropriations for credit subsidy costs in fiscal year 2010.
Question. What initiatives and programs is the Department of Energy
planning to ensure we have the technical workforce required to
maintain, build and service our Nation's nuclear power plants in a safe
and efficient manner?
Answer. The Office of Nuclear Energy will provide $2.9 million in
undergraduate scholarships and graduate fellowships to high-quality
undergraduate and graduate students going into nuclear science and
engineering disciplines at universities and colleges located in the
United States. The Office of Nuclear Energy also has recommended that
29 universities and colleges receive a total of $6 million in grants
for new equipment and instrumentation for their existing research
reactors, for other specialized nuclear science and engineering
facilities, and to establish classrooms and laboratories. These grants
are designed to enhance the universities' and colleges' nuclear energy
research and development capabilities to educate the next generation of
nuclear engineers and scientists.
Working with industry, the Office of Nuclear Energy will soon begin
activities to more thoroughly analyze total workforce needs to support
continued safe and reliable operation of the existing nuclear fleet and
construction and operation of the next generation of nuclear power
plants in the United States. Finally, the Department will continue to
look for partnership opportunities with industry groups, academia, and
other Government agencies to ensure an adequate, highly skilled
workforce is available to ensure continued safe and reliable nuclear
power operations.
SUBCOMMITTEE RECESS
Senator Dorgan. Thank you for being with us this morning.
Our subcommittee will want to work closely with you and with
your staff in the Department of Energy as we work through the
markup of an appropriations bill going forward in the coming
fiscal year. This hearing is recessed.
[Whereupon, at 11:54 a.m., Tuesday, May 19, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]