[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
            THE FISCAL YEAR 2013 DEPARTMENT OF ENERGY BUDGET

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 8, 2012

                               __________

                           Serial No. 112-125




      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov



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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    HENRY A. WAXMAN, California
  Chairman Emeritus                    Ranking Member
CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina   GENE GREEN, Texas
  Vice Chairman                      DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma              LOIS CAPPS, California
TIM MURPHY, Pennsylvania             MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas            JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California         JAY INSLEE, Washington
CHARLES F. BASS, New Hampshire       TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia                MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana              Islands
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia

                                    _____

                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
JOHN SULLIVAN, Oklahoma              BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               JAY INSLEE, Washington
GREG WALDEN, Oregon                  KATHY CASTOR, Florida
LEE TERRY, Nebraska                  JOHN D. DINGELL, Michigan
MICHAEL C. BURGESS, Texas            EDWARD J. MARKEY, Massachusetts
BRIAN P. BILBRAY, California         ELIOT L. ENGEL, New York
STEVE SCALISE, Louisiana             GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington   LOIS CAPPS, California
PETE OLSON, Texas                    MICHAEL F. DOYLE, Pennsylvania
DAVID B. McKINLEY, West Virginia     CHARLES A. GONZALEZ, Texas
CORY GARDNER, Colorado               HENRY A. WAXMAN, California (ex 
MIKE POMPEO, Kansas                      officio)
H. MORGAN GRIFFITH, Virginia
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

                                  (ii)
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     1
    Prepared statement...........................................     3
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     5
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     6
    Prepared statement...........................................     8
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................    10
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................    10

                               Witnesses

Steven Chu, Secretary, Department of Energy......................    12
    Prepared statement...........................................    15
    Answers to submitted questions...............................    91

                           Submitted Material

Letter, dated March 6, 2012, from Lorinda Wichman, Chairman, Nye 
  County, Nevada, Board of County Commissioners, to Steven Chu, 
  Secretary, Department of Energy, submitted by Mr. Shimkus......    37
Findings from Nevada Statewide Survey conducted by Public Opinion 
  Strategies February 21-23, 2012, submitted by Mr. Whitfield....    86


            THE FISCAL YEAR 2013 DEPARTMENT OF ENERGY BUDGET

                              ----------                              


                        THURSDAY, MARCH 8, 2012

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:07 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Ed 
Whitfield (chairman of the subcommittee) presiding.
    Members present: Representatives Whitfield, Sullivan, 
Shimkus, Walden, Terry, Burgess, Bilbray, Scalise, Olson, 
McKinley, Gardner, Pompeo, Griffith, Barton, Upton (ex 
officio), Rush, Inslee, Dingell, Markey, Engel, Green, Doyle, 
and Waxman (ex officio).
    Staff present: Anita Bradley, Senior Policy Advisor to the 
Chairman Emeritus; Maryam Brown, Chief Counsel, Energy and 
Power; Allison Busbee, Legislative Clerk; Patrick Currier, 
Counsel, Energy and Power; Garrett Golding, Professional Staff 
Member, Energy and Power; Mike Gruber, Senior Policy Advisor; 
Cory Hicks, Policy Coordinator, Energy and Power; Heidi King, 
Chief Economist; Ben Lieberman, Counsel, Energy and Power; Dave 
McCarthy, Chief Counsel, Environment/Economy; Mary Neumayr, 
Senior Energy Counsel; Jeff Baran, Democratic Senior Counsel; 
Phil Barnett, Democratic Staff Director; Greg Dotson, 
Democratic Energy and Environment Staff Director; Caitlin 
Haberman, Democratic Policy Analyst; and Angela Kordyak, DOE 
Detailee.
    Mr. Whitfield. I will call this hearing to order, and the 
subject of today's hearing is ``The Fiscal Year 2013 DOE 
Budget.'' And we only have one witness today, and that is 
Secretary Chu. And we appreciate very much your being here with 
us this morning, Mr. Secretary. We certainly have a lot of 
questions, and we look forward to your comments as well.
    And at this time I would recognize myself for an opening 
statement.

  OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

    I would start off by simply saying that I think just about 
everyone agrees that America's air quality is among the best in 
the world, and there is no question that the Obama 
administration is totally focused on transforming the energy 
delivery system in America. And the reasons given for that are, 
number one, to make the air quality even cleaner; and number 
two, Ms. Jackson and others frequently talk about regulations 
create more jobs. And I might also say that I have never, ever 
seen an administration go after one industry the way this 
administration is going after the coal industry.
    President Obama, when he was campaigning, was in San 
Francisco and he said they can build coal plants but they will 
go bankrupt. And even you have made comments about how bad coal 
is and many other people in the administration and, you know, 
that is fine. That is you all's views and many of us disagree 
with that.
    And from looking at the budget that you have proposed, you 
are asking for an increase I guess of about $856 million, and 
in the scheme of things that is not that much money. But we 
have a $16 trillion Federal debt and any kind of increases are 
significant in today's atmosphere. And when I look at that 
budget, when I read that budget, it appears to me that America 
is moving as fast as it can to adopt the European model for 
energy production. And I recently have read a number of 
articles about the things that are going on in Europe. We know 
that in Spain they place great emphasis on wind energy. They 
have an unemployment rate of 22 percent. There was the study 
from Juan Carlos University that talked about for every green 
job created there was a loss of two jobs in traditional 
industries.
    And one of the things that I find most disturbing about 
this is it looks like EPA is setting the energy policy for 
America. Now, the most comprehensive regulation coming out of 
EPA relates to Utility MACT. And Mrs. Jackson has never been 
able to give us a total cost. In fact, no one has been able to 
give us a total cost outside experts who have testified that it 
would be up to $90 billion. But EPA said that they could expect 
to close maybe 14 gigawatts of coal plants and even NERC is 
saying that it will be more like 36 or 59 gigawatts. And NERC 
also, in a November report, indicated reliability was going to 
be a serious issue.
    And yet, whether it is in transportation or it is in 
electricity production, this administration is totally moving 
to, on the transportation side, provide all sorts of grants and 
loan guarantees to technologies, many of which have not proven 
to be able to deliver. Solyndra. We have got Fisker not going 
to open up the Delaware plant. We have got A123 Battery Systems 
that is reducing their employment.
    And my time is running out here, but I was just reading 
some of the headlines in Europe. ``EU Faces 20 Years of Rising 
Energy Bills,'' ``Wind and Solar Subsidies Drying Up in 
Europe,'' ``Wind Turbines in Europe do Nothing for Emission 
Reduction Goals,'' ``Germany's Rising Cost of Going Green,'' 
``Czech Electricity Grid Company Ready to Block German Wind 
Power.'' And so my whole point is that this administration is 
moving so fast and is so determined to transform the energy 
sector in America that I don't think they are giving adequate 
consideration to the consequences of that.
    So that is what I, as one individual representing 700,000 
people, am most concerned about.
    [The prepared statement of Mr. Whitfield follows:]
    [GRAPHIC] [TIFF OMITTED] 76890.001
    
    [GRAPHIC] [TIFF OMITTED] 76890.002
    
    And my time has expired, so at this time I would like to 
recognize Mr. Rush for his 5-minute opening statement.

 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. Thank you, Mr. Chairman.
    And thank you, Mr. Secretary, for being here. Mr. 
Secretary, it is always a pleasure to have you appear before 
this subcommittee. And I want to take a moment just to commend 
you for your knowledge, your expertise, and your leadership in 
directing this important agency at such a critical time in our 
Nation's history.
    As you know, high gasoline prices are on the minds of every 
American, my constituents and others. I am concerned about 
these high gas prices. And although we all understand that fuel 
prices are influenced by a variety of geopolitical factors, to 
hear my Republican colleagues tell it, it is the President and 
his energy policies that are contributing enormously to these 
sky-high prices. And of course, Mr. Secretary, you and I will 
agree that does not explain--the definition does not explain 
why gas prices skyrocketed from just over $1.50 a gallon in 
2001 when President Bush took office to just under $4.00 a 
gallon in spring of '08 before the Bush recession took our 
economy over the cliff. But that is an argument for another 
time. I don't want to belabor that at this moment.
    Mr. Secretary, as the person who heads the Energy 
Department, I would like to hear your thoughts on how the Obama 
administration's policies have helped the American consumers 
through fuel efficiency measures to promotional renewable 
sources of energy and other forward-thinking policies that are 
necessary to move America forward and to wean us off of 
imported oil. I would like also to get your comments on the 
record regarding the levels of fuel consumption, importation of 
foreign oil, and oil and gas production during the Obama 
administration. The research I have seen show that under 
President Obama we are importing less oil now than any other 
time in the last 13 years. Research also shows that we are 
producing more oil now domestically than we were at any time in 
the last 8 years. In fact, since President Obama opened up 
millions of new acres for oil and gas exploration, the U.S. now 
has more working oil and gas rigs than the rest of the world 
combined.
    Additionally, your agency recently reported that the 
average fuel demand has actually dropped 6.7 percent as 
compared to the same time last year. Yet, despite all of these 
effects, gas prices have continued to climb much faster and far 
earlier than in previous years. And of course, my friends on 
the other side, those who want to blame the President and those 
who have got a keen eye, a sharp eye toward these November 2012 
elections are using this as a way to make political hail 
against the administration's policies. As you will hear 
repeated time and time and time again, the constant refrain of 
those on the other side will be pointing the finger at the 
President and solely at the president.
    Mr. Secretary, again, I want to welcome you today and I 
look forward to your testimony. I look forward to you setting 
the record straight, finally I hope setting the record straight 
but I am not too confident that even though you are setting the 
record straight that it will remain set. Your comments in the 
past as they have been will be distorted, taken out of context, 
and used for political violence and political verbiage and used 
for political gain. But please inform the American people of 
the true benefits of having an energy policy that is forward-
looking, that will help us plan ahead for the future so the 
Congress will not have this same finger-pointing debate 10, 20, 
or 30 years down the road.
    Thank you, Mr. Secretary. And I yield back the balance of 
my time.
    Mr. Whitfield. Thank you.
    At this time, I recognize the chairman of the full 
committee, Mr. Upton of Michigan, for 5 minutes.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Well, thank you, Mr. Chairman.
    And Mr. Secretary, welcome. Today's hearing on the 
Department of Energy's fiscal year 2013 budget comes at a very 
critical time for energy policy in the country for sure.
    Gasoline prices continue their march toward and probably 
past $4.00 per gallon. We remain dependent on unstable foreign 
sources of oil despite abundant untapped domestic supplies, as 
well as Canadian supplies that this administration so far has 
blocked from coming into the U.S. And at the same time, 
residential electricity prices have been increasing every year 
over the last decade.
    Mr. Secretary, you have raised some eyebrows with your 
comments on gas prices early on and about the administration's 
overall energy policy. Many of us were stunned by your past 
suggestion sometime ago that, ``somehow we have to figure out 
how to boost the price of gasoline to the levels in Europe.'' 
And more recently, last week you were asked whether your 
overall goal was to lower gasoline prices, and your answer was, 
``no.'' You said the goal was to decrease dependency on oil--a 
long-term goal for sure--which means we are not necessarily 
focused on reducing prices for families and small businesses 
that are struggling today.
    Increased energy prices mean that energy households are 
spending a greater percentage of their income on energy costs, 
leaving them with less money for food, healthcare, education, 
other basic necessities. So what has the President done to help 
us? Well, he twice rejected the Keystone Pipeline project and 
the job creation and secure energy supplies that it would 
deliver. His solution to higher gas prices appears to certainly 
threaten our emergency oil supplies by tapping SPR rather than 
opening more Federal lands to domestic energy development.
    Instead of eliminating regulatory red tape, he has imposed 
costly new regs on our power sector that certainly are going to 
drive up the electricity prices. He recently did begin to brag 
about--that he supports an ``all-of-the-above'' energy policy, 
but these actions look more like a policy of ``nothing from 
below.'' Oil production opportunities remain blocked, layers of 
new Federal regs contemplated for natural gas development, 
costly rules designed to squeeze out coal, and the sad saga of 
Yucca Mountain, halting development of a long-term repository 
and raising questions about our long-term nuclear prospects.
    So the President's proposed fiscal year 2013 budget for the 
DOE is not ``all-of-the-above.'' Rather, it seeks to transform 
the energy portfolio based on unproven and more expensive 
alternatives. Certainly, his budget proposes to slash funding 
for proven energy resources such as coal, nuclear, hydro, while 
significantly increasing funding for high-cost, high-risk 
energy alternatives. And although many of us do support 
alternative energy sources--they are laudable goals--there is a 
place for research, for sure, but questions are placed as to 
whether or not they really produce a healthy overall economy
    So we welcome your testimony today. We look forward to your 
answers.
    [The prepared statement of Mr. Upton follows:]
    [GRAPHIC] [TIFF OMITTED] 76890.003
    
    [GRAPHIC] [TIFF OMITTED] 76890.004
    
    And I yield the balance of my time to Mr. Barton.

   OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Barton. Thank you, Mr. Chairman.
    And Secretary, it is always good to see you. We love to 
have you come before us and give us your views on the state of 
the Department of Energy.
    Today, we are going to talk about DOE's budget. We saw that 
the total budget request by the President was a little over $27 
billion and just coincidentally is saw that overall the Obama 
administration last year spent over $24 billion on alternative 
energy projects. It is obvious that some of that money hasn't 
been too well spent. I continue to be concerned about Solyndra. 
I continue to believe that that project has been mismanaged by 
your department. I am going to ask you some questions when I am 
allowed to what changes if any have been made in the management 
of the Loan Guarantee Program. It is obvious that mistakes have 
been made and I think some laws have been violated with regards 
to the subordination situation. But I would hope that you would 
be able to tell me that things are being corrected and those 
practices of the past won't happen again.
    But we are always glad to see you, sir, and we look forward 
to your answers. I would yield to whoever I am supposed to. If 
not, I yield back to the Chairman.
    Mr. Whitfield. The gentleman yields back.
    At this time, I would like to recognize the gentleman from 
California, Mr. Waxman, for a 5-minute opening statement.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you, Mr. Chairman.
    And Secretary Chu, we are pleased to see you again at our 
committee.
    There are a lot of energy challenges that we are facing, 
and you are going to be asked about them by members of our 
committee. But the American people are concerned about high 
gasoline prices, and I think, because of our dependence on oil, 
oil itself, that is leading us to our higher prices in 
gasoline.
    Oil is priced in a world market, and so even if we produce 
more oil in the United States, that is not going to lower the 
price of gasoline here because we have oil priced based on what 
the world price is. Canada, for example, should be the utopia 
the Republicans pray for. In Canada, they produce more oil than 
they consume, and yet their prices are just as high as ours. 
And their people are complaining about the high price of 
gasoline as well.
    So when we hear Republicans saying, ``Produce more oil,'' 
they are doing what the oil companies want, but it is not going 
to reduce the price of gasoline.
    Energy economists tell us the Republican plan is not even 
``remotely possible'' to reduce the price of gasoline. It will 
have zero effect on gasoline prices, so we need to face 
reality. And the reality is that oil prices are determined on a 
global market. And no matter how much we drill here, our 
gasoline prices are going to rise if there is a crisis in the 
Middle East, if there is a fear about disruption from Iran, if 
there is a labor unrest in Nigeria, if OPEC sees that there is 
too much oil and they decide to reduce the supply and the 
demand is increased in China and in India.
    So there is only one way we can protect ourselves from the 
impacts of rising oil prices, and that is if we reduce our 
demand for oil.
    That brings us to another energy challenge that we face. We 
have to invest in clean energy to diversify and reduce our 
energy use. We are locked in a competition with China and other 
countries in the future of clean energy. And if clean energy is 
our future and we are not investing in that as House 
Republicans call on us to strike those investments, we are 
going to lose out on jobs and the future.
    We have to also confront the enormous challenge of climate 
change, which threatens our economic strength, our national 
security, and the health of our citizens. Yet rather than 
confront this challenge, the Republicans deny the science and 
they vote to block all action on climate change.
    Democrats and Republicans in Congress seem to have two 
completely different visions of our future. The President says 
we need to listen to scientists and energy experts and become 
the world leaders in clean energy economy of the future. House 
Republicans deny the science, and they seem to want to obstruct 
the President every step of the way.
    In spite of these constant obstructions and attacks on 
commonsense policy, the administration has made significant 
advances. The President has acted to cut the emissions of cars 
and trucks, doubling the fuel efficiency of our fleet. As a 
result, our energy dependence on oil has declined.
    The Department of Energy has made significant investments 
in renewable energy and we are seeing the results. Even while 
our economy has struggled during the last 3 years, the solar 
industry doubled the number of American solar jobs from 46,000 
to more than 100,000. U.S. wind industry has added more than 35 
percent of all new generating capacity over the past 4 years, 
second only to natural gas. The percentage of those wind 
components manufactured in the U.S. has more than doubled.
    The Department of Energy is looking at a weatherization 
program to improve energy efficiency of more than 750,000 homes 
across the Nation. That is a savings for low-income families on 
average of $437 a year in heating and cooling costs alone.
    You won't hear much about these accomplishments from the 
Republicans. They are going to talk about Solyndra and 
Keystone. We will hear the President's budget didn't include 
enough money for fossil fuels or nuclear power. We are not 
going to hear about real solutions from the Republicans. They 
are playing politics with this issue. We need to get on with 
the job of making sure America is less dependent on oil, that 
we have a future in the clean energy sector, that our consumers 
can face lower gasoline prices as we move away from our 
dependence on oil.
    I yield back my time.
    Mr. Whitfield. Thank you, Mr. Waxman.
    That concludes the opening statements. And as I said 
earlier, we only have one witness today, and that is the 
Honorable Steven Chu, Secretary of Energy.
    And so, Mr. Secretary, you are recognized for 5 minutes for 
an opening statement.

    STATEMENT OF STEVEN CHU, SECRETARY, DEPARTMENT OF ENERGY

    Mr. Chu. Thank you. Chairman Whitfield, Ranking Member 
Rush, Chairman Upton, Ranking Member Waxman, and members of the 
committee, thank you for the opportunity to discuss the 
Department of Energy's fiscal year 2013 budget request.
    To promote economic growth and strengthen security, 
President Obama has called for an ``all-of-the-above strategy'' 
that develops every source of American energy. The President 
wants to fuel our economy with domestic energy resources while 
increasing our ability compete in the clean energy race. The 
Department's fiscal year 2013 budget request of $27.2 billion 
is guided by the President's----
    Mr. Whitfield. Mr. Secretary, excuse me for interrupting 
just a minute. Mr. Rush said that he cannot hear you. Is your 
microphone on?
    Mr. Chu. I am wondering actually--I have been having 
difficulty hearing you as well. If the person in charge of the 
audio-visual can crank it up a little bit? That seems to be 
better.
    Mr. Whitfield. All right, thank you.
    Mr. Chu. To promote economic growth and strengthen 
security, President Obama has called for an ``all-of-the-above 
strategy'' that develops every source of American energy. The 
President wants to fuel our economy with domestic energy 
resources while increasing our ability compete in the clean 
energy race.
    The Department's fiscal year 2013 budget request of $27.2 
billion is guided by the President's vision, our 2011 Strategic 
Plan and our inaugural Quadrennial Technology review. It 
supports leadership in clean energy technologies, science, and 
innovation, and nuclear security and environmental cleanup.
    Decades ago, the Energy Department's support helped to 
develop the technologies that have allowed us to tap into 
America's abundant shale gas--and I might add--oil resources. 
Today, our investments can help advance technologies that will 
unlock the promise of renewable energy and energy efficiency. 
The budget request invests approximately $4 billion in our 
energy programs. It advances progress in areas from solar to 
offshore wind to carbon-capture utilization and storage to 
smart grid technologies, and it helps develop next-generation 
biofuels, advanced batteries, and fuel efficient vehicle 
technologies to reduce our dependence on foreign oil, which 
every day places a crushing burden on families and on our 
economy.
    As the President and I have said, there is no silver 
bullet, but we can and must pursue a serious, long-term, all-
of-the-above approach that diversifies our transportation 
sector, protects consumers from the high gas prices, harnesses 
American resources, and creates jobs here and at home. That is 
exactly what this budget does.
    The budget request also invests $770 million in the Nuclear 
Energy Program to help develop the next generation of nuclear 
power technologies, including small modular reactors. It 
includes funding for continued nuclear waste R&D, which aligns 
with the recommendations of the Blue Ribbon Commission on 
America's Nuclear Future. As we move to a sustainable energy 
future, America's fossil fuel energy resources will continue to 
play an important role in our energy mix.
    The budget request includes $14 million as part of a $45 
million priority R&D initiative by the Departments of Energy, 
Interior, and EPA to understand and minimize potential 
environmental, health, and safety impacts of natural gas 
development through hydraulic fracking. The budget also 
promotes energy efficiency to help American's save money by 
saving energy and it sponsors R&D on industrial materials and 
processes to help U.S. manufacturers cut costs.
    To maximize our energy technology efforts in areas such as 
batteries, biofuels, electric grid technologies, we are 
coordinating research and development across our basic and 
applied research programs and ARPA-E. And to encourage the 
manufacturing and deployment of clean energy technologies, the 
President has called for extending proven tax incentives, 
including the Production Tax Credit, the 1603 program, and 
Advanced Energy Manufacturing Tax Credit.
    Competing in the new energy economy requires our country to 
harness all our resources, including American ingenuity. The 
budget request includes $5 billion for the Office of Science to 
support basic research that could lead to new discoveries and 
help solve energy challenges. It continues to support Energy 
Frontier Research Centers, which aim to solve specific 
scientific problems to unlock new clean energy development. It 
also supports the five existing Energy Innovation Hubs and 
proposes a new hub in electricity systems. Through the hubs, we 
are bringing together our Nation's top scientists and engineers 
to achieve game-changing energy goals.
    Additionally, the budget request includes $350 million for 
ARPA-E to support research projects that could fundamentally 
transform the ways we use and produce energy. Taken together, 
our research initiatives will help rev up America's great 
innovation machine to accelerate energy breakthroughs.
    In addition to strengthening our economy, the budget 
request also strengthens our security by providing $11.5 
billion for the National Nuclear Security Administration. 
Finally, the budget requests include $5.7 billion for the 
Office of Environmental Management to protect public health and 
the environment by cleaning up radioactive legacy waste from 
the Manhattan Project and the Cold War.
    This budget request builds on progress that has been made 
by the EM program. By the end of 2011, the program had reduced 
its geographic footprint by 66 percent, far exceeding its goal 
of 40 percent. The budget request makes strategic investments 
to promote our prosperity and security. At the same time, we 
recognize the country's fiscal challenges and are cutting back 
where we can. We are committed to performing our work 
efficiently and effectively.
    Countries around the world recognize the clean energy 
opportunity and are moving aggressively to lead. This is a race 
we can win but we must act with fierce urgency.
    Thank you, and I will be pleased to answer your questions.
    [The prepared statement of Mr. Chu follows:]
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    Mr. Whitfield. Thank you, Secretary Chu. And I recognize 
myself for 5 minutes of questions.
    I had mentioned in my opening statement about the Utility 
MACT, which is indeed one of the big regulations coming out of 
EPA. And the thing that bothers me the most about it is that it 
was basically explained that the reason we had to do this was 
primarily for mercury reductions and some acid gas reductions. 
And whenever Lisa Jackson talked about it or anyone else, they 
talked about this is the reason, because we are going to save x 
thousands of people, premature death and whatever and whatever 
and whatever. And yet, in their own documentation, it was very 
clear that mercury reduction had no significant benefit from 
Utility MACT; that any of the benefits came from double 
counting reductions of particulate matter. And I would just 
like to know, were you involved at all in formulating Utility 
MACT or discussing the implications of Utility MACT or the 
benefits of Utility MACT?
    Mr. Chu. We were involved to the extent that when asked to 
provide technical information on, for example, potential 
impacts having to do with the reliability of transmission 
distribution of energy, we provided that technical information 
to the EPA. I remember especially that was some of the concerns 
of the EPA, what power generating stations--was there any 
threat to the delivery system for the continued reliability for 
the system.
    Mr. Whitfield. Well, are you concerned that EPA had 
estimated that there would be a 14 gigawatt reduction in coal 
production of electricity and NERC is saying it would be more 
in the neighborhood of 36 to 58 gigawatt reduction? And NERC 
has also raised issues on reliability. As Secretary of Energy 
and responsible for reliability in a lot of these issues, does 
that concern you?
    Mr. Chu. Again, in discussions with NERC and EPA we looked 
at the mechanisms and felt that there were procedures and 
mechanisms in place so that the American public--that, you 
know, should something occur because it is not taking the 
average--the aggregate--for each particular sector that 
receives electricity, would the companies be able to supply 
electricity in a reliable manner? And so we certainly worked 
with those agencies to say that there were mechanisms in place 
to respond should something occur.
    Mr. Whitfield. So you don't----
    Mr. Chu. In the planning----
    Mr. Whitfield [continuing]. Have any concerns about the 
reliability issue from the information that you have?
    Mr. Chu. No. Of course we have concern about the 
reliability. That is one of the very important duties of the 
Department of Energy.
    Mr. Whitfield. I am disturbed that I think EPA misled the 
American people on Utility MACT because all they ever talked 
about--and even many of our friends on this side of the aisle, 
not all of them, but every time there is a public statement 
they talk about what the reduction of mercury emissions is 
going to be. And all of the analysis, all of the data indicates 
that there is insignificant benefit from mercury reduction. So 
if EPA is selling it based upon that benefit and that benefit 
is not there, then why would you be moving forward with such an 
expensive regulation that will potentially affect reliability, 
as well as increase electricity prices?
    Mr. Chu. Well, Mr. Chairman, I can't speak directly to the 
mercury standards that the EPA is talking about, and mainly 
because that is in the purview of the EPA to protect the air, 
to protect Americans' health. And our role is in determining 
power distribution reliability, our role is in developing 
technologies to make coal--so we can help industry reduce the 
price to continue to use coal but in a much cleaner way.
    Mr. Whitfield. Well, you know, I mean I just have a 
philosophical difference, I guess, with you also because we 
have this $16 trillion debt. ARPA-E, you are asking for a plus-
up of 27 percent on that. Basically, that is used for very 
speculative technology. You have asked for a 30 percent 
increase on energy efficiency and renewable energy grants. And 
I was reading a biography of Henry Ford, and when he started 
Ford Motor Company, he did it all with private investment. And 
just like on Fisker, you had Kleiner Perkins putting up venture 
capital there and I am just questioning, why should the Federal 
Government be putting up these millions of dollars when we are 
in the financial situation that we are in and it is very 
speculative? So what is your view?
    Mr. Chu. Well, I am very supportive of ARPA-E. There was a 
very recent ARPA-E third summit. It was at the end of February. 
There was great excitement and enthusiasm, leaders in American 
industry including Fred Smith of FedEx. I am going to 
paraphrase what he said when he gave a talk there and he said, 
you know, pound for pound, dollar for dollar, he felt that 
ARPA-E was the most effective use of government resources he 
has seen in a long time. That is a paraphrase that we can get 
you the exact quote, but strongly supportive of ARPA-E. Lee 
Scott similarly strongly supportive of ARPA-E. Many, many 
people thought that it was very important to help America get a 
leg up and increase our competitiveness and help our 
prosperity.
    Mr. Whitfield. Thank you, Secretary Chu.
    Mr. Rush, you are recognized for 5 minutes.
    Mr. Rush. Thank you, Mr. Chairman.
    Mr. Secretary, as I stated in my opening statements, I am 
eager for you to set the record straight in regards to the 
levels of oil and gas production importation and consumption 
during the time that President Obama has been in office. While 
my Republican colleagues may engage in a scorched-earth 
strategy and an endless and senseless blame game gamut and 
point to the administration's policies as the singular cause 
for rising gas prices, I believe that in fact it is your 
agency's programs and policies that will help America move past 
our dependence on foreign oil and fossil fuels in general so 
that we will not continue to have this debate every year as gas 
prices inevitably rise.
    So Mr. Secretary, can you talk about the levels of oil and 
gas reduction under President Obama's administration. Has 
production increased or decreased? And have new lands been 
opened up for drilling under this administration?
    Mr. Chu. Well, Mr. Rush, as you yourself pointed out, 
during the Obama administration, the production of petroleum 
liquids in the United States have increased. Now, I believe it 
is the highest it has been in over 8 years. Also, as you 
pointed out, the fraction of the oil we import has declined 
from 60 percent as a high. Now, it is down below 50 percent--48 
percent--and they are showing signs of further decline. This is 
very good because this means we are exporting fewer dollars 
abroad. And as we produce more oil here domestically, that is 
jobs in America, wealth creation in America. And so the 
administration is very supportive of this increase in gas and 
oil.
    Mr. Rush. Well, as it relates to the importation of oil, 
can you discuss the amount of oil that is being imported today 
as compared to before President Obama took office? Are we 
importing more or less oil from foreign countries under this 
administration?
    Mr. Chu. We are importing less. Again, roughly I believe 
less in the last 16 years as my memory serves to be correct.
    Mr. Rush. For the record, to straighten out the record, has 
American consumption of gas increased or decreased over the 
past year and if it has changed, what do you attribute to that 
change? Can you discuss some of the policies that have gone 
into effect under President Obama that are impacting consumer 
habits and lowering U.S. consumption of gas?
    Mr. Chu. Are you speaking of gas as in gasoline or as in 
natural gas?
    Mr. Rush. Gasoline. I am sorry.
    Mr. Chu. Well, our consumption of gasoline has decreased in 
part due to two reasons. First, there was a dramatic decrease, 
unfortunately, due to a very severe recession that we are very 
slowly climbing out of. But there is another very important 
part, and that is we want to climb out of this recession as 
quickly as we can. There is another important part and that is 
the efficiency. The use of gasoline is improving. And this goes 
directly to help every American family in reducing the amount 
they spend on gasoline every week. And so again, the Obama 
administration has been very supportive and helpful and leading 
the way in improving the efficiency of automobiles, trucks, and 
other vehicles.
    Mr. Rush. A part of your responsibility and a part of your 
concern I am sure is the weaning of the American consumer off 
of fossil fuel and our heavy dependence on fossil fuel and also 
foreign sources of energy. What policies do you have in place 
and give us a recipe for how you view these polices as being a 
top priority for the American people and for this Congress?
    Mr. Chu. Well, the policies the President has taken in 
terms of increasing our production of oil and natural gas 
include the making available for lease an increase in the 
Federal lands being made available for lease for oil and 
natural gas. And so that has continued to increase and will 
continue so that the American oil and gas companies have more 
access to Federal lands.
    Mr. Rush. My time is up.
    Mr. Whitfield. Thank you, Mr. Rush.
    At this time I recognize the gentleman from Michigan, Mr. 
Upton, for 5 minutes.
    Mr. Upton. Well, thank you, Mr. Chairman.
    Mr. Secretary, again, welcome. I learned literally in the 
last few minutes that apparently President Obama is personally 
weighing in on Members of the Senate to vote no on the Keystone 
Pipeline amendment, which is going to be an amendment as part 
of the highway bill. And I am not happy about that at all. I 
will say that for the record we passed that bill out of this 
committee a couple of times with bipartisan support. We saw the 
same thing on the House Floor. Are you weighing in at all with 
any Senators on this amendment vote today?
    Mr. Chu. No, I am not.
    Mr. Upton. I know it has been reported that oil production 
on Federal lands has dropped 14 percent since 2010. And in 
reading from the Greenwire last week--let me just read a couple 
things to you here--``domestic oil production may be at an all 
time high nationwide, but the increase is primarily occurring 
on State and private lands rather than on Federal land and 
waters where production appears to have dropped significantly 
in 2011. According to the most recent government data, 
production of natural gas on public lands and waters in fiscal 
year 2011 dropped 11 percent from the previous year,'' 
according to the Interior Department. Oil production dipped 
nearly 14 percent. The reduction in oil production was most 
significant in the Gulf of Mexico where it declined nearly 17 
percent to 514 million barrels from 618 million barrels the 
previous year. And in a chart on oil and gas production on 
Federal lands and waters, it appears it has declined in oil by 
100 million barrels from 2010 to 2011.
    Now, we agree that sadly, because of--our decline in our 
economy is the main reason why I think consumption has gone 
down. We didn't get the growth; we didn't have the jobs. I know 
in my State we had 38 consecutive months of double-digit 
unemployment. But as I look at your own EIA, if you look out 
the next couple of decades, your department says that we will 
be using the same amount of gasoline in 2030 as we are now. I 
presume that in large part that is because we are going to have 
more energy efficient vehicles, a whole number of different 
things that are there that of course we want. But demand can't 
be the only answer.
    And I guess my question is that with this oil production 
decline on Federal lands, people understanding supply and 
demand report that you all put out just 2 or 3 weeks ago, 
predicted that oil prices would hit $4.25 by Memorial Day. We 
are one penny away in my district from $4 gas, at least this 
last weekend, and some predict that we are going to hit $5 gas 
as early as perhaps the 4th of July. In large part it is 
because of declining production primarily on Federal land. 
Would you not disagree?
    Mr. Chu. Well, Chairman Upton, I first want to say that 
both I and the President and everyone in the administration 
wants very much to do what we can to lower the price of 
gasoline because it has a severe effect on the pocketbooks of 
Americans. It affects American businesses. In terms of the 
Federal lands production, what the government does, as you well 
know, is we lease land to oil companies and it is up to them to 
produce the oil. Currently, they----
    Mr. Upton. But right now, just to interrupt for a second, 
it is proposing a 5-year leasing plan that would delay sales in 
the Atlantic or Pacific through at least 2017. So it is looking 
for yet another moratorium for 5 more years. How does that help 
us?
    Mr. Chu. Well, it is not my understanding. My understanding 
is a bit different. This is a plan that will be, for example, 
in the Gulf of Mexico, the Federal jurisdiction being made 
available is 75 percent of the area in the Gulf of Mexico that 
is under Federal jurisdiction. And so it is a plan to increase 
the leasing. Now----
    Mr. Upton. I was in the Gulf last summer and I went out on 
a rig that was 120 miles off the coast of Louisiana. That day 
they pumped 110,000 barrels. And looking out a couple miles 
away there was another drilling ship that was there and they 
were waiting for the permits, just waiting. This was a Chevron 
rig. They were literally waiting for weeks and weeks paying 
millions of dollars every day so that that ship wouldn't un-
anchor and go off to Brazil where they would never see it 
again, in essence trying to tap the same vein that Tahiti drill 
rig was drilling that particular day.
    And the frustration from so many folks there is that the 
permits are not being approved, this new moratorium is there 
knowing that a third of our oil comes from that region. You 
have got Keystone literally could be a million barrels a day 
that otherwise will go to China. It just seems that we are 
turning our back on independence from the rest of the world 
that would clearly help our consumers as it relates to their 
own pocketbook.
    And I know my time is expired. I will yield back.
    Mr. Whitefield. Thank you, Mr. Upton.
    At this time I recognize the gentleman from Michigan, Mr. 
Dingell, for 5 minutes of questions.
    Mr. Dingell. Mr. Chairman, I thank you for your courtesy. 
Welcome, Mr. Secretary, delighted to see you here. I have a 
number of questions which I will ask that you respond to by yes 
or no.
    It has been a year since your Loan Program Office approved 
the loan from the Advanced Technology Vehicles Manufacturing 
Program. As you know, that program was created to provide the 
auto industry with incentives to build or expand manufacturing 
facilities here in the United States instead of taking those 
jobs overseas. Loan recipients such as Ford and Nissan have 
successfully built and expanded facilities in Michigan, 
Tennessee, Illinois, Kentucky, and other States. Question: Is 
the Loan Program Office working to streamline the approval 
process so that applicants can be assured they will not be 
waiting for years to find out if their application will be 
approved? Yes or no?
    Mr. Chu. The Loan Program is working to improve their 
processing in all aspects.
    Mr. Dingell. Mr. Secretary, I will ask that you submit 
something on this for the record. And I ask unanimous consent 
that my letter with those questions and your responses be 
inserted in the record.
    Next question: Has the Loan Program Office implemented any 
of the recommendations of the Allison Report to protect 
taxpayer dollars and to provide a uniform system for evaluating 
loan applications? Yes or no?
    Mr. Chu. We have actually begun to change over the past 
year and a half many of the things that the Allison Report 
discusses. So we internally have been doing that and we are 
reviewing all the things that the committee did. It is very 
valuable concentration and we continue to improve our loan 
program.
    Mr. Dingell. Now, Mr. Secretary, I am very much concerned 
about this. The lack of funding for the Facility for Rare 
Isotope Beams, or FRIB, within the Nuclear Physics Program, I 
am told that the funds allocated for that program in fiscal 
year 2013 budget are not enough for them to start construction 
in this year. As of now, the program and the project is on time 
and under budget. Furthermore, the facility will generate 5,000 
construction jobs, 400 permanent scientific positions and have 
a $1 billion economic impact.
    I noticed that in other programs within the Office of 
Science, the President is proposing to increase funding for 
scientific projects overseas. I believe that we should first 
ensure that we are meeting our project obligations here at home 
before sending our money and scientists abroad. Do you agree 
with that?
    Mr. Chu. We are very supportive of FRIB. We have asked for 
$22 million to continue this project going forward and we hope 
that Congress votes and appropriates that money. And so we want 
this project to continue going forward.
    With regard to this other project you spoke about, it is a 
different part of this--but the thing I do want to point out is 
it is an international collaboration, but 80 percent of the 
funds will be spent in the United States, both in national 
laboratories, universities, and in industries in the U.S.
    Mr. Dingell. Now, Mr. Secretary, your department has 
already invested $50 million in FRIB. I am concerned about the 
progress at FRIB. What is the commitment that the Department 
makes with regard to FRIB? Are we going to let it sort of 
strangle on the vine or are we going to see to it that it 
continues to be funded even though this year we have not given 
them enough to commence the construction?
    Mr. Chu. Well, sir, as I said, we think that FRIB is a 
worthy project. We have asked for continued funding and we hope 
that Congress allows us to have that funding that we can keep 
this project going forward.
    Mr. Dingell. Now, Mr. Secretary, you know I have great 
affection and respect for you, but you can't lay this one off 
on Congress. I am talking about what the budget does and not 
what the Congress might do.
    Now, Mr. Secretary, FRIB will have national security 
implications and applications such as studying the detection of 
a nuclear weapon or dirty bomb detonation. I do not believe 
that we can pursue these types of national security 
opportunities and applications at facilities overseas. Doesn't 
that tell us that we should put our money here locally rather 
than giving it to other countries to do this kind of critical 
research in programs that will have such a significant impact 
upon our national security?
    Mr. Chu. The funds, as I said, the lion's share of the 
funds for ITER, this International Fusion project, will be 
spent in the United States. But the Department of Energy agrees 
with the other ITER partners that this is a very important 
experiment that could perhaps unlock fusion energy for the 
future.
    Mr. Dingell. Again, Mr. Secretary, with great affection and 
respect, we are going to spend some money in the United States, 
we are going to build a facility abroad, and the work and the 
benefits that will be achieved from this will be spent abroad 
and will strengthen foreign scientific applications as opposed 
to Americans'. I find this distressing.
    I thank you for being here. I will follow this up with a 
letter indicating further distress to you, Mr. Secretary. Thank 
you for your presence.
    Mr. Whitfield. At this time I recognize the gentleman from 
Texas, Mr. Barton, for 5 minutes.
    Mr. Barton. Thank you, Mr. Chairman.
    Again, thank you, Mr. Secretary for being here.
    In my opening statement I referenced the alternative energy 
budget and specifically said concerns about the Loan Guarantee 
Program. As you know, we continue to have an ongoing 
investigation with regards to Solyndra. At the last hearing 
that you attended I believe where the focus was on Solyndra, 
you were very supportive of the way the Loan Guarantee Program 
had been managed, but I think you did indicate that there might 
be some changes forthcoming. Have there been changes in the way 
you and your department have managed the Loan Guarantee Program 
for alternative energy, and if so, could you tell us what those 
are?
    Mr. Chu. Yes, sir. There were changes. Let me give you a 
few examples. We know that sometimes the economics of a 
particular industry--for example, in the case of Solyndra solar 
photovoltaics--can change very rapidly. A 40 percent decline in 
the price of solar modules, essentially a commodity, in one 
year; 75, 80 percent decline in 3 years. And one of the things 
we now do on a weekly basis is we look very, very closely at 
changing market conditions. We established a Risk Committee 
that includes people both within in the Loan Program and 
outside the Loan Program, subject matter experts in the 
Department of Energy.
    Also, I now have a special advisor on financial matters 
that looks very closely at this, as, again, an independent set 
of eyes to make sure we monitor closely before future 
disbursements all the things that could affect the loan, 
including things outside the control of an individual company 
like this very rapid decline in prices.
    Mr. Barton. Concerning this independent advisor you just 
referenced, has he prepared--and if so, could you present to 
the committee for our review--a list of the additional loan 
guarantees and the status of those? And what if any of those 
might be in danger of following Solyndra in defaulting and 
going into bankruptcy?
    Mr. Chu. Well----
    Mr. Barton. I know at least one other has, since Solyndra, 
and I am told that there are a number of others that are on the 
problem list.
    Mr. Chu. Well, there are companies, again, as I said which 
we watch very closely because of a wide range of issues. We 
also have to respect the confidentiality of any of the people 
that we have made loans to or commitments to make loans to. 
So----
    Mr. Barton. How about how many loans are on the what I 
think you call the ``watch list?'' That shouldn't be 
proprietary.
    Mr. Chu. Well, I don't have the exact number but the----
    Mr. Barton. Is it a double-digit number? You know, is it 
between 1 and 10, 10 and 20?
    Mr. Chu. Well, I don't again recall the exact number. I am 
going to be briefed by my senior advisor, Richard Kauffman, on 
this matter, but again any company that we think has a chance 
of being subject to market change or market conditions, or 
other issues internal within the company, we do watch very 
closely.
    Mr. Barton. Well, do you think that the American taxpayer 
should have a reasonable expectation that all of these loans 
should be repaid as opposed to any loan that is made is just 
money down the tubes and it is not going to be repaid. I mean 
you have to admit that the history so far of the initial 
projects has not been good.
    Mr. Chu. First, I do say that the American taxpayer has 
every right to expect that there is a reasonable chance for 
repayment of the loans we give out. I would also say that many 
of the loans we have given out have been very good successes. 
It has already been mentioned, loans, for example, to Ford 
Motor Company, to Nissan----
    Mr. Barton. That wasn't an alternative energy loan.
    Mr. Chu. We have other loans that were----
    Mr. Barton. I don't think they came through your department 
either, Mr. Secretary, but----
    Mr. Chu. Sir, actually, the ATVM loans do. But in regard to 
alternative energies, there are a number of loans that we feel 
and the Allison Report also recognizes that are low-risk, have 
a very high probability of being paid back.
    Mr. Barton. Well, my time is expired but we will follow up 
in writing and we will ask that these problem loans on the 
watch list be provided to the committee so that our people can 
review them and hopefully work with your agency to take steps 
to protect the taxpayer money.
    Thank you.
    Mr. Whitfield. At this time, I recognize the gentleman from 
Massachusetts, Mr. Markey, for 5 minutes.
    Mr. Markey. Thank you, Mr. Chairman.
    Mr. Secretary, there are only two tools the President has 
to bring down gas prices right now--deploy the strategic 
petroleum reserve and get other countries in the world to use 
their Strategic Petroleum Reserves to help to put pressure on 
the marketplace; and two, curbing excess speculation in oil 
futures markets through the Commodities Futures Trading 
Commission. The SPR has proven effective in helping to bring 
down prices and we have plenty of oil in the SPR right now, 700 
million barrels. You have said, Mr. Secretary, deploying SPR is 
on the table as an option. Senator Geithner, Secretary Salazar 
have said the same thing, that you have got it on the table.
    Now, the oil companies and the Republicans, they oppose 
deploying the SPR but their oil-above-all policy doesn't help 
drivers right now. None of this oil they are talking about is 
coming online this year. And people are looking for relief at 
the pump right now. So Mr. Secretary, Senators Vitter, Hoeven, 
Lugar, Crapo, and Thune have introduced legislation that would 
prevent the President from deploying any oil from the Strategic 
Petroleum Reserve until he approves the Keystone XL Pipeline 
permit. Do you believe, Mr. Secretary, that the authority of 
the President to deploy the Strategic Petroleum Reserve should 
depend on the permitting of the Keystone Pipeline even if Iran 
cuts off the Strait of Hormuz and blocks 20 percent of the 
world's oil supply?
    Mr. Chu. No, I don't.
    Mr. Markey. Do you believe that it makes any sense to say 
to our young men and women that we export into the Middle East 
to protect this supply of oil that we are not going to use the 
weapon we have here in the United States--the Strategic 
Petroleum Reserve--in order to keep the price of oil low and 
not allow Iran to threaten us unnecessarily?
    Mr. Chu. Well, as you noted, the administration has said 
repeatedly that the Strategic Petroleum Reserve is on the table 
but it is a very complex issue.
    Mr. Markey. Right, but it would be a bad idea, would it 
not----
    Mr. Chu. Pardon?
    Mr. Markey [continuing]. To strip the President of his 
authority to use it unless it approved the Keystone Pipeline?
    Mr. Chu. I agree.
    Mr. Markey. Thank you. Now, on the CFTC, the Republicans 
have a bill that has come out of Agriculture Committee and come 
out of the Financial Services Committee that would stop all 
rulemakings to give the CFTC the authority on speculation, on 
margins, on position limits, on gauging, on protecting the 
public in the futures oil market where so much of this is just 
speculation being driven up, driving up the price of oil. Do 
you think it is a bad idea to strip the CFTC legislatively of 
their authority to be able to protect against gauging in the 
marketplace?
    Mr. Chu. Well, no one would be in favor of gauging.
    Mr. Markey. The Republicans believe you don't need the 
rulemakings at the CFTC. Are they right or wrong, Mr. 
Secretary?
    Mr. Chu. Everyone is very concerned----
    Mr. Markey. No, everyone is not concerned, Mr. Secretary. 
The Republicans want to strip out the authority of the CFTC to 
go against manipulation, to deal with these margin issues, to 
deal with the position limits. Is that a bad idea?
    Mr. Chu. Well, as I said, if you please let me finish, 
everyone is concerned about speculation unnecessarily driving 
the price of oil up. This is why the administration and one of 
the things that can counter speculation is more transparent 
information, and this is why the administration is very focused 
on that.
    Mr. Markey. So we need the SPR and we need the 
administration to have the authority to be able to crack down 
on the speculation, make sure there is more transparency and no 
game-playing.
    And I will also say that there is a proposal out there to 
create an international natural gas market. Right now, you 
know, Mr. Secretary, there is no natural gas market. The price 
of natural gas in China is six to seven times higher than in 
the United States. It is three times higher in Europe than it 
is in the United States. That is leading to a boom in 
manufacturing in our country. It is really leading to all new 
planning on natural gas vehicles because the price is so low 
and many utilities are really contemplating how fast to switch 
over from coal over to natural gas. There is an application for 
eight new licenses that are before you to export this natural 
gas, which your own agency says could raise the price upwards 
of 54 percent. I urge you to call a time-out, Mr. Secretary, to 
make sure that we get this right.
    You had an Assistant Secretary that made a statement last 
week that really disturbed me. I would urge you not to approve 
these licenses until we put together a plan for the United 
States on liquefied natural gas exported from our country.
    Mr. Whitfield. Gentleman's time is expired.
    At this time, I recognize the gentleman from Texas, Dr. 
Burgess, for 5 minutes.
    Mr. Burgess. I thank the chairman for the recognition.
    Yes, Secretary, way back here. Let me ask you because Mr. 
Barton was asking you some questions about the loan guarantees 
at Solyndra. When you came to us in November of last year it 
seemed to be news to you that there were postponement of 
layoffs that occurred at the company, those postponements to 
take the layoffs past election day before they were announced. 
And you seem to be surprised that that had in fact occurred. 
And I think if I recall correctly you said you were going to 
look into that, so can you share with us the results of your 
investigation, what information you have uncovered as to why 
those layoffs were postponed past the election day?
    Mr. Chu. We turned the matter over to the IG, the 
Department of Energy IG, and they are looking into the matter, 
and when they tell us what they find, we could share that with 
you.
    Mr. Burgess. And I pray that you do. But so far have you 
identified any of your staff, Department of Energy, that were 
involved in making that decision?
    Mr. Chu. No. As I said, we turned the matter over to the IG 
and so that is an independent look at what happened.
    Mr. Burgess. Have you yourself been interviewed by the 
Inspector General on this issue?
    Mr. Chu. No, I have not.
    Mr. Burgess. Have you been informed that that is likely to 
happen?
    Mr. Chu. No, I have not.
    Mr. Burgess. Are you willing to talk to the Inspector 
General about this?
    Mr. Chu. I have always cooperated with the IG.
    Mr. Burgess. Let me ask you a question about the Allison 
Report and Congressman Barton was asking about the watch list. 
Can I just ask you--and I respect the fact that you are 
concerned about some proprietary issues--but would you provide 
to the committee or committee staff this watch list, provide 
the copy of the list to the committee?
    Mr. Chu. Well, actually, I was slipped a note and I misread 
it. It appears as though this committee's staff will be getting 
a briefing from Richard Kauffman, my special advisor, next week 
on this, on the Loan Program and the Allison.
    Mr. Burgess. Is that the full committee staff or just the 
Democratic staff?
    Mr. Chu. I think it is the full committee staff.
    Mr. Burgess. May I ask as a member of the committee, then, 
that you would have your guys bring that list to that briefing?
    Mr. Chu. Well, we will do what we can but again we are 
going to give you a briefing----
    Mr. Burgess. We need your commitment, sir, that we will be 
able to see that list because it is important as far as 
congressional oversight on this process going forward.
    Mr. Chu. Well, as I said----
    Mr. Burgess. We can all be criticized about the way things 
have been handled so far. I would like to be able to stop the 
bleeding at some point. So let me just ask you for your 
commitment to make that list available to the staff.
    Mr. Chu. We have to look at--again, we don't want to 
violate the company confidentialities. The dynamics of what 
happens to these companies changes very rapidly and so it is, 
again, part of our loan----
    Mr. Burgess. If I may, sir, the taxpayer has taken a pretty 
bad hit on this, and while I want the companies to do well, I 
think at some point we may have to put the taxpayers' needs and 
wants ahead of those of the companies'. Again, I cannot see a 
reason why you could not bring that list and I for one as a 
committee member am going to be expecting you to bring that 
list.
    Let me ask you a question. You have had the chief financial 
officer of your department, the Department of Energy, had 
produced a report on uncosted balances in 2010 and just in the 
purpose and the background notes at the beginning of this 
report it said your approach was developed in '96. As a 
response to the GAO criticism, the Department did not have a 
standard effective approach for identifying excess carryover 
balances that might be available to reduce future budget 
requests to address this concern. You establish percentages 
thresholds. So where are we with that? Are you prepared to 
produce for this committee those numbers that met that 
percentage threshold that might be available to offset the 
numbers you are requesting in your budget?
    Mr. Chu. Yes. We have been working very aggressively at 
reducing these uncosted balances in the last several years.
    Mr. Burgess. Well, the GAO estimated that this current 
fiscal year it is in excess of $680 million from carryover 
programs. What is your justification for asking for funding 
increases in programs with significant carryover balances?
    Mr. Chu. I believe the lion's share of that amount has to 
do with a program, carbon-capture and sequestration, which 
means that, according to the statute, we need significant 
private sector investment matching funds of over half. And some 
of that has not materialized. We have an uncosted balance 
because if the private sector doesn't want to co-invest, there 
is not much we can do about that.
    Mr. Whitfield. The gentleman's time has expired.
    At this time I recognize the gentleman from California, Mr. 
Waxman, for 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman.
    Mr. Secretary, people are complaining about the high price 
of gasoline, understandably so, and we want to help. But do you 
see any short-term way to lower gasoline prices?
    Mr. Chu. As you said, everybody is concerned about the high 
price of gasoline and diesel fuel and we do want to help in any 
way we can. But as the President said, as I have said, there is 
no single magic bullet that can instantaneously do this. And so 
we work very hard and all the tools at our disposal--the most 
effective tool is that we want to improve the efficiency and to 
diversify the energy we use in transportation. The boon in 
natural gas we think is wonderful because we now see and are 
very supportive and are helping offload some of the demand for 
petroleum onto natural gas used in transportation. We see great 
movement in heavy trucking and in delivery trucks, things of 
that nature.
    Mr. Waxman. Well, the Republicans have said over and over 
again we just need more oil. If we had more oil, we wouldn't 
have this problem. And then, of course, they go on to say it is 
the President's fault we don't have more oil. Well, the reality 
is we are producing more oil in the United States than ever 
before and we are using less because of the greater efficiency 
in the automobiles. So if we had more oil and the oil is priced 
at the world price, would that lower the world price?
    Mr. Chu. Well, the price of oil is very, very complex. It 
is certainly driven by supply and demand. It is also affected 
by uncertainty in the Middle East and several----
    Mr. Waxman. Well, if we produced more oil and OPEC decides 
to produce less, that won't help us; that will hurt us. If we 
produce more oil and more oil is being demanded by China and 
India, the world is going to divert oil there as well. I 
mentioned in my comments earlier that Canada produces more oil 
than they use and yet they are paying the same price for 
gasoline that we are paying. So it seems to me--and you made 
this point--that we have got to look beyond just producing more 
oil. We have got to look at using less oil. And the way to use 
less oil would be to invest in clean energy to diversify and 
reduce our energy use. It is a tough challenge.
    The Congress should be helping you and the President 
accomplish that goal. Instead, Republicans in Congress attack 
every proposal you and the President make, every idea you 
offer, every initiative you take. For example, battery 
manufacturing is an industry that has been dominated by 
Southeast Asia for decades. The United States has essentially 
no capacity so the administration changed all that. And the way 
I understand you changed it is to use the Recovery Act to 
incentivize the development of a manufacturing supply chain for 
vehicle batteries.
    And here in the United States we have a domestic production 
of the Chevy Volt, innovative, award-winning, plug-in hybrid 
electric vehicles. But the Republicans seem to be rooting for 
failure. They are attacking GM on this groundbreaking product. 
Does it make sense for us to be rooting against American 
manufacturing at a time like this?
    Mr. Chu. No, of course not. We should all be rooting for 
very innovative products that could be sold worldwide. It would 
show industrial leadership and great wealth.
    Mr. Waxman. It makes just common sense. But this isn't the 
only example. The President proposed a clean energy standard to 
increase the amount of energy we get from renewable sources of 
energy, as well as from nuclear and advanced natural gas 
plants, similar to what Mr. Barton proposed from the last 
Congress. And it is really an all-of-the-above strategy. But 
the Republicans don't even want to discuss this idea.
    The President proposes to eliminate unnecessary subsidies 
for the oil industry. Last year, the top five oil companies 
made $137 billion in profits. The price of oil is over $100 a 
barrel. With oil at such a high price, do we need to be giving 
out $4 billion in tax breaks for oil companies each year to 
have an incentive for them to drill more oil? Can you explain 
that to me?
    Mr. Chu. I believe the oil industry is doing very well 
financially and they have a lot of incentive.
    Mr. Waxman. They have a lot of incentive now so we would be 
better off repealing those subsidies and using that money to 
develop sources of clean energy that reduce our dependence on 
oil and move us forward to a clean energy economy, and yet the 
Republicans oppose that as well. I think the President is on 
the right track. I appreciate what he has been doing. Even 
though Congress tries to frustrate him and I applaud his 
statements about how we need to move forward at this time.
    Mr. Whitfield. At this time I recognize the gentleman from 
Illinois, Mr. Shimkus, for 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman.
    Welcome, Secretary Chu. I love following my friend, Mr. 
Waxman, because for us to move in the clean energy world, we 
have to pay for that. Isn't it true, Secretary Chu, that you 
espouse European gas prices for the United States? I mean 
briefly. Yes or no? Have you been quoted saying that it would 
be good for us to have European gas prices?
    Mr. Chu. At no time when I was Secretary of Energy have I 
ever said----
    Mr. Shimkus. OK. Prior to?
    Mr. Chu. Prior to that I was----
    Mr. Shimkus. We all know the answer is yes. And obviously 
that is to move to a clean energy future based upon Americans 
paying more at the pump, which is the desire and the goal of 
this administration. I didn't want to go in that direction but 
my friend from California empowered me to go.
    Let me move to----
    Mr. Waxman. Mr. Shimkus----
    Mr. Shimkus. No, reclaiming my time. I have got to go to--
--
    Mr. Waxman [continuing]. Are you going to give him time to 
answer it?
    Mr. Shimkus. I would like to reclaim my time.
    Mr. Secretary, if the D.C. Circuit rules against the DOE in 
pending Yucca Mountain litigation, will the Department abide by 
that ruling?
    Mr. Chu. Yes, it will.
    Mr. Shimkus. If the Federal court orders you to pursue the 
Yucca application at NRC, do you have the staff to pursue it?
    Mr. Chu. If the Federal court orders us to do so, we will 
do so.
    Mr. Shimkus. Describe the funds that could be made 
available from the prior years to pursue the application.
    Mr. Chu. That I would have----
    Mr. Shimkus. This would include any carryover funds that 
were made available until expended, any unobligated balances 
from prior years' funds that may have been obligated but not 
spent and therefore subject to redirection.
    Mr. Chu. I would have to get back to you on the details.
    Mr. Shimkus. Would you do that for me, please? Thank you.
    As you hopefully know, this past Tuesday, the Board of 
County of Commissioners from Nye County, Nevada, unanimously 
sent you a letter notifying you of their consent to host a 
proposed repository at Yucca Mountain and requesting that you 
initiate the cooperative negotiations process recommended by 
the President's Blue Ribbon Commission. And I would like to 
submit that, Mr. Chairman, for the record.
    Mr. Whitfield. Without objection.
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    Mr. Shimkus. And will you meet with Nye County to initiate 
a cooperative negotiated process?
    Mr. Chu. Well, first, we are in the process now of 
reviewing the recommendations of the Blue Ribbon Commission. We 
would also like to work with Members of Congress in order to 
see because the Blue Ribbon Commission has said very clearly 
that they would like to see Congress look at a revision of the 
Nuclear Waste Act. And so----
    Mr. Shimkus. Well, yes----
    Mr. Chu [continuing]. These are very important steps----
    Mr. Shimkus [continuing]. We have got the Blue Ribbon 
Commission--we had great testimony here with the commissioners. 
On page 48 it says, ``the importance of the local 
communities,'' and so we have Nye County saying we are ready to 
go into direct negotiation with you and looking at what you can 
able afford to bring to the arena.
    On page 48 it says, ``this unwavering local support helped 
to sustain the project during periods when Federal and State 
agencies had to work through disagreements over the issue.'' So 
the Blue Ribbon Commission really highlights the importance of 
local communities in saying we will accept this nuclear waste. 
Let us get involved in negotiations. That is what your 
commission suggested. We have a local county that is taking you 
up on the offer of the Blue Ribbon Commission. I hope that you 
would then talk to the good folks of Nye County and get into 
negotiations as the Blue Ribbon Commission had suggested, which 
is the commission that you asked for.
    Mr. Chu. Well, we have to set up a process that can do 
this. Certainly, the Blue Ribbon Commission says that you need 
local support. I would also add I think the Blue Ribbon 
Commission said this as well--you also need State support. 
And----
    Mr. Shimkus. Well, let me quote from this. On page 48 it 
says, ``this unwavering local support helped to sustain the 
project during periods when Federal and State agencies had to 
work through disagreements over the issue.'' So the Blue Ribbon 
Commission said, you know, Norway, Finland, Spain, local 
communities very helpful in working through the disagreements 
from the States or the national government. I think that we 
have a local community that is fulfilling the intent as 
identified by the Blue Ribbon Commission. I would think that 
the Department of Energy would welcome that because the Blue 
Ribbon Commission said two things, right? It said that we are 
not disregarding Yucca. We have so much nuclear waste we need a 
second long-term geological repository.
    Mr. Chu. Right.
    Mr. Shimkus. That is what it said.
    Mr. Chu. They did say that and we welcome a local 
community's support.
    Mr. Shimkus. So you will welcome Nye County when they come 
visit with you?
    Mr. Chu. You are looking for a very big answer. Again, I 
think we need to set up a procedure so that we can deal with 
this thing as rapidly as possible.
    Mr. Shimkus. I would hope you would consider Nye County.
    Mr. Whitfield. The gentleman from Texas, Mr. Green, is 
recognized for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman. And I regret our 
ranking member from California on our side is not here because 
I know this is not Ways and Means Committee but, you know, I 
know California benefits from the high-tech industry and motion 
picture industry and they have been pretty financially 
successful. And I don't know if we are going to take away their 
incentives for producing their products in our country like I 
hear all the time on oil and gas. I would like to have those 
incentives continue.
    But let me ask you one specific question. For many years, 
the Texas Center of Superconductivity at the University of 
Houston has been doing great work in a field that shows 
promise. From 1993 to 2011, the Federal Government financially 
supported the need for continuing science and development 
demonstrations in this field to keep the technology leadership 
in the U.S. and laid the foundation for the growth of well 
paying research and manufacturing jobs. Unfortunately, the line 
item for superconductivity technology funding was eliminated 2 
years ago. What is the U.S. Government and the DOE doing to 
maintain that U.S. competitive advantage on superconductor 
technology that will have a major impact on energy generation, 
transmission, storage in light of the substantial overseas 
government investment to push technology in the commercial 
products? What is DOE doing with----
    Mr. Chu. In the Department of Energy we support research in 
superconducting technology primarily in the Office of Science. 
We continue to do this. Many of the discoveries made in 
superconductivity and the understanding is developed in the 
United States. We think this has great promise and we will 
continue to support that research.
    Mr. Green. OK. I will probably get a letter to you and ask 
you about that because having watched what happened with 
another Dr. Chu at University of Houston for many years and the 
success they have done both with State funding and with Federal 
funding. I appreciate it.
    The President's fiscal year 2013 budget includes an inner-
agency study that the DOE, EPA, and U.S. Geological Service are 
partnering on to examine environmental and health effects of 
hydraulic fracturing. Can you explain the purpose behind this 
study and how is different than what the EPA has been already 
doing? And then what is your Energy Advisory Board has already 
addressed, that combination of the inner agencies compared to 
what EPA has done and what Department of Energy has already 
done with their Energy Advisory Board?
    Mr. Chu. Well, the Subcommittee of the Secretary of Energy 
Advisory Board felt that the Department of Energy, in 
collaboration with other agencies--notably USGS--would be in a 
good position to help industry develop the natural gas and oil 
resources safely. We want to see those resources developed but 
we want to see them developed in an environmentally safe way. 
So we are requesting funding to help the companies extract 
those resources in an environmentally responsible way.
    Mr. Green. And believe me, in Texas we want to extract it 
safely. I know there are some things that we need to work on. 
The State law actually changed in Texas requiring posting of 
the ingredients. You know, I know companies already published 
them or had them available through OSHA requirements. But will 
there be peer review and stakeholder input incorporated into 
this study?
    Mr. Chu. Absolutely. We feel that this is using science to 
help develop new methodologies again so we can continue to 
extract natural gas, but as we both agree in an environmentally 
safe way. And so it is these very rapidly improving 
technologies that I think you and I both agree can be done.
    Mr. Green. Carbon capture and sequestration is constantly 
discussed in a context that can possibly be used as carbon 
control technology under the EPA rules for utilities and 
refiners. The problem is it is still too expensive to 
commercially be used. Can you describe current DOE carbon 
capture and sequestration activities?
    Mr. Chu. Yes, I can. But unfortunately there is 47 seconds. 
I could do it in probably 4 hours. But let me just briefly say 
that we are very committed and focused to reducing those costs, 
reducing them greatly so that one can continue using our fossil 
fuel resources.
    Mr. Green. OK. Mr. Chairman, I know I am out of time but 
CCS still is not commercially viable but hopefully we can get 
to that point sometime before you get mandates there that at 
least the technology needs to be there.
    Thank you, Mr. Chairman.
    Mr. Whitfield. Thank you very much.
    At this time I recognize the gentleman from California, Mr. 
Bilbray, for 5 minutes.
    Mr. Bilbray. Thank you, Mr. Chairman.
    Secretary, I am still very happy that you are where you are 
not just because you are a Californian but you have been brave 
enough to stand up on energy issues that were politically 
incorrect, pointing out the great shortfalls with ethanol and 
the great opportunity of nuclear power. And I am glad to hear 
you talk about the small reactors. Hopefully, the initiative 
with the United States Navy and Navy bases will look at that 
opportunity. In San Diego, we have 20 nuclear reactors within a 
mile of downtown San Diego being run by 20-something-year-old 
kids. But we can't power our streetlights with it yet.
    But let me just say this. I think there are a lot of 
partisan cheap shots always go back and forth across here, so 
let me try to bridge the gap and find a place where Democrats, 
Republicans, independents and Americans across the board can 
agree, and most importantly you. You agree that the crisis with 
finding a replacement for gasoline is a supply, how clean it 
is, and the infrastructure to be able to distribute it, major 
problem. I am a big ethanol guy, opposed to it, and the 
environmental issues and the supply issues and the 
infrastructure issues I have a real problem with. But algae, 
which I have supported strongly, is very clean but we don't 
have supply and won't have supply in a long time, and it is 
compatible with the infrastructure. But we have natural gas, 
which we have massive sources of, it is super clean--it is even 
cleaner than propane, which is permissible under Federal law to 
be used in interior spaces--and the thing we miss out is that 
85 percent of the urban homes in America are plumbed with 
natural gas. The infrastructure is there. The trouble is you 
have a 3-foot barrier between the water heater and the car 
parked in the garage and we have not bridged that gap.
    And all of the money we have spent and we are proposing to 
spend, are you looking at what we are doing for research and 
development of home dispensing to allow the American consumer 
not 20, 30 years from now but 10 years from now to be able to 
say I don't want to fill up with gasoline; I am going to plug 
in my car and fill up with natural gas over the night. What in 
your budget is committed to bridging that 3-foot gap between 
the automobile and energy independence in the next decade and 
the water heater that 85 percent of city dwellers use today?
    Mr. Chu. I am very glad you asked that question. The 
programs we have in our budget are in energy efficiency, 
renewable energy, and also in ARPA-E. Specifically, what we are 
doing about that--and I share your excitement that our abundant 
natural gas in the United States, which looks to remain at low 
prices for at least another decade or two--has a great 
opportunity to help with transportation costs, to reduce the 
transportation costs. And so what we are specifically doing in 
terms of the home use is that right now the barrier, beyond 
that wall, it is the cost of the natural gas tank. Honda sells 
a Honda Civic, natural gas, but that carbon tank is very 
expensive. So we are----
    Mr. Bilbray. You are talking about the tank in the vehicle.
    Mr. Chu. In the vehicle.
    Mr. Bilbray. I am not talking about the tank in the 
vehicle. I drove a natural gas with that tank in 1992. This 
isn't brain surgery. I am talking about the home dispensing 
pump that will be able within the nighttime, 6 hours, bring the 
pressure up from the home into the tank of the car. Is there 
anything in your budget that specifically is addressing an 
aggressive attitude towards that home dispensing pump so----
    Mr. Chu. Yes.
    Mr. Bilbray [continuing]. They can get it at their house 
every night?
    Mr. Chu. Yes, there is but I was taking too long to explain 
it. So the short answer is the commercially available pump has 
to be able to pump to 3,500 pounds per square inch, 4,000 
pounds per square inch. It is very, very expensive and after 
3,000 equivalent gasoline miles it has to be refurbished for 
another couple thousand dollars. So it is like $6,000 for the 
dispenser and then after a while you have got to send it back 
to the factory. The tank we are trying to develop is something 
that can allow compression at not 3,500 pounds per square inch 
but maybe several hundred pounds per square inch. We know that 
when you decrease the pressure to that and still have the 
range, then things become very inexpensive and accessible. And 
so that is what I was trying to get at.
    Mr. Bilbray. Isn't it true that if we had home dispensing 
the big advantage with this is flex fuel? You do not have to 
have twin systems in the car. The same system that would burn 
natural gas has the ability to burn regular gasoline with a 
flip of the switch?
    Mr. Chu. That is true. You just need two tanks, one for the 
natural gas----
    Mr. Bilbray. Right.
    Mr. Chu [continuing]. And one for the----
    Mr. Bilbray. But you don't have to have separate motors?
    Mr. Chu. Correct.
    Mr. Bilbray. Thank you.
    Mr. Whitfield. The gentleman's time is expired.
    The gentleman from Pennsylvania, Mr. Doyle, is recognized 
for 5 minutes.
    Mr. Doyle. Thank you, Mr. Chairman.
    Secretary Chu, thank you and thank you for being with us 
today.
    Mr. Secretary, the National Energy Technology lab in 
Pittsburgh is funded by your department's Office of Fossil 
Energy, and unfortunately, the President's fiscal year 2013 
budget request continues the very troubling trend of decreasing 
the Department's fossil energy budget. A large portion of the 
research at the NETL is in advanced coal technologies. In 
fiscal year 2010 the coal portion of the fossil energy budget 
was $404 million but the fiscal year 2013 request is only 240 
million, representing a 41 percent reduction in funding for 
advanced clean coal and R&D. Specifically, the President's 
fiscal year 2013 request zeroes out critical research in fuel 
cells and fuels programs and significantly reduces funding for 
carbon capture, carbon storage, and advanced energy systems and 
cross-cutting research. Some of these cuts appear to be 
especially poorly timed.
    Mr. Secretary, are you aware that the EPA is preparing to 
issue a proposed rule any day now setting emission limits for 
greenhouse gases from coal-fired power plants?
    Mr. Chu. I am not sure of the exact timing of the EPA's 
schedule.
    Mr. Doyle. But it is imminent? And to the best of your 
knowledge, Mr. Secretary, that rule will require coal-fired 
power plants to either capture their carbon emissions or 
utilize pre-combustion technology that allows them to emit less 
carbon to begin with. Yes or no?
    Mr. Chu. I think it is mostly--I would have to get back to 
you on the exact ruling that the EPA is contemplating and see.
    Mr. Doyle. Well, I guess what I am trying to say is we 
can't have it both ways here. I support EPA's effort to reduce 
greenhouse gases but if the administration is going to issue a 
regulation requiring carbon capture and sequestration from 
power plants this year, can you explain to us why the budget 
request for carbon capture and sequestration is the lowest this 
administration has ever requested?
    Mr. Chu. Well, we are very supportive and I am personally 
very supportive of carbon capture and sequestration, as you 
probably know. And we think this is still a very important part 
of what we do in the Department of Energy. We remain committed 
to developing the technologies to lower the cost so we can 
continue using our abundant fossil fuel.
    Mr. Doyle. Well, it just seems to me that if we are going 
to ask our power sector to reduce their greenhouse gas 
emissions, which I support, but at the same time we are nearly 
eliminating the research funding for the technologies that do 
this, I just think it is not fair or there is a lack of 
coordination going on between EPA and the Department of Energy.
    Mr. Secretary, let me ask you another question. This 
administration has championed regulations to reduce pollution 
for power plants and from idling trucks. One way to do this is 
using solid oxide fuel cell technology, which is being 
developed through the Solid State Energy Conversion Alliance in 
the Office of Fossil Energy. This program is developing and 
commercializing technology to produce highly efficient power 
from natural gas and eliminate idling emissions with auxiliary 
power units. Seeing as this technology could be used to meet 
regulations coming from the administration, can you explain to 
us why the funding for this program was eliminated in the 
President's fiscal year 2013 budget?
    Mr. Chu. Well, solid oxide fuel cells have made tremendous 
progress. We are very excited about this. There are both major 
and smaller companies that are heavily investing in this and we 
think it is evolving to the point where the private sector is 
taking this over rather well. And so we actually applaud the 
development. Most of the applications, by the way, of solid 
oxide fuel cells will be stationary applications, auxiliary 
power, other things. But we do like that.
    Mr. Doyle. Well, Mr. Secretary, you probably know South 
Korea has made solid oxide fuel cells a major part of their 
clean energy plan and we have just completed--not with my 
vote--a free trade agreement with South Korea resulting in 
lower tariffs and quotas and easing trade relations. Are you 
concerned that eliminating support for this technology here in 
the United States will drive that industry overseas to South 
Korea?
    Mr. Chu. I certainly hope not. But if I look to the United 
States and the manufacturers in the United States--for example, 
United Technologies, Rolls-Royce America, others--some very 
significant players in the development of this solid oxide fuel 
cell technology. And so we are very hopeful that the United 
States can manufacture these fuel cells and sell them not only 
in the United States but abroad as well.
    Mr. Doyle. I hope that is right. Mr. Secretary, thank you 
for your time. I appreciate you being here.
    I yield back.
    Mr. Whitfield. At this time, I recognize the gentleman from 
West Virginia, Mr. McKinley, for 5 minutes.
    Mr. McKinley. Thank you, Mr. Chairman. And with due respect 
for time I am a little concerned.
    When the Department of Energy was formed in 1977 under the 
Organizational Act of 1977, there were three paragraphs I found 
interesting with it. The first was it was set up because the 
increasing dependence on foreign energy supplies presents a 
serious threat to the national security of the United States, 
health, safety, and welfare of its citizens. It was also 
charged to provide for a mechanism to deal with short-, mid-, 
and long-term energy problems, OK, of the Nation. And I think 
we can see long-term we are going with renewable. Short-term I 
think we should be worried about coal. The third is to foster 
the continued good health of the Nation's small business firms, 
public utility districts, municipal utilities, private 
corporations, private cooperatives involved in energy 
production.
    Mr. Secretary, I think you have gone away from those 
principles. I think you have allowed what we heard earlier with 
some of the testimony about the use of the EPA, their 
predictions of their greenhouse gas closures of plants that 
were talked about here that were said that the EPA says only 
this level. So based on this level compared to all the other 
national organizations, EPA has been emboldened to continue to 
drive for greenhouse gas emissions when all the others are 
saying if you do that, you are going to see the closures that 
are occurring like this all across America, that this 
questioning--they are challenging the reliability of our energy 
across America based on that information. I am concerned that 
whether or not you have in fact a real interest in reining in a 
rogue agency that is allowing this kind of activity without 
based on science and agreeable comprehensive knowledge of how 
all the other people are looking at it across America.
    I go back to your remark that you made at the NETL in 
Pittsburgh and you said, ``I want all of the above.'' I applaud 
that. I just wish it were backed with action because I want to 
go back to your statement that you made back in '07 when you 
said, ``coal is my worst nightmare.'' ``Coal is my worst 
nightmare.'' And we have the comment here from Harry Reid. 
``Coal makes us sick; oil makes us sick. It is ruining our 
country. It is ruining our world.'' Coal and oil? Is that the 
mindset of why on the short-term goal you have abandoned that 
and cutting the research money as Mr. Doyle just said 41 
percent reduction in spending on R&D in coal? I am awed. I just 
can't comprehend where this administration and you and your 
leadership are with it, with all due respect.
    With all due respect, Mr. Secretary, I think the DOE and 
the EPA have become the worst nightmare for the working men and 
women in our coal fields across America. What you are doing is 
challenging them, causing them to not know whether tomorrow 
they are going to have a job. I really do hope you go back to 
the requirements of the DOE and look at the short-term 
requirements. And those short-term requirements looked at coal 
and taking care of the families for the life, safety, and 
welfare of the American public and our national security.
    Mr. Chu. Let me try to explain what I said. That was taken 
out of context, the quote. And what I said is that coal, as it 
is being used today, as it is being used today in China and 
India and everywhere around the world in terms of its 
pollutants, is a big worry of mine. And so that is why--even 
before I became Secretary but certainly after I became 
Secretary--I remain very committed to developing those 
technologies to bring the prices down so that we can continue 
to use resources----
    Mr. McKinley. OK. I just hope, Mr. Secretary, you will be 
able to get back to Mr. Doyle and others and be able to explain 
how we have a 41 percent reduction with National Energy 
Technology.
    Let me just in the 36 seconds, will you be able to get back 
to us as to what--we hear a lot of the folks on the other side 
talk about how fossil fuel, particularly coal, is subsidized. 
Will you be able to tell us how American coal companies are 
being subsidized?
    Mr. Chu. I will be glad to get back to you on that.
    Mr. McKinley. Thank you very much.
    I yield back my time.
    Mr. Whitfield. Thank you.
    At this time, I recognize the gentleman from New York, Mr. 
Engel, for 5 minutes.
    Mr. Engel. Thank you very much, Mr. Chairman.
    Mr. Secretary, let me first say that I am one person who 
has followed you and I think you are doing a fine job and I 
think your agency is doing a fine job and I think there have 
been a lot of political cheap shots at you, unfortunately, and 
the administration from the other side of the aisle and I just 
don't think that is reflective of the job that you are doing. 
So I wanted just to say that.
    I want to also spend the next minute talking to you about 
an issue that you and I have spoken about in the past and that 
is open fuel standard for cars. I believe--and I am doing a 
bill with Mr. Shimkus--that every car produced in America 
should be a flex fuel car. I believe if a car can run on 
ethanol, methanol, gasoline, natural gas, whatever, competition 
helps bring down prices and it would bring down prices. I have 
seen that happen in Brazil and I think it could happen here. 
And it would cost $100 or less per car to manufacture a car 
with flex fuel features. I know the President has issued an 
executive order to have the Federal fleet be flex fuel cars, 
and I would hope we can continue to move in that direction. So 
I would just like you to briefly comment on that if you could.
    Mr. Chu. Certainly. The ability to own a flex fuel vehicle, 
especially if the cost of the new car would be something--as 
you indicated, $100 or less, gives the American consumer more 
options. It makes them more in control of what they can do just 
in case the world oil price does increase. As we said, we are 
very concerned about the price of gasoline and one of the 
options that we have to bring relief to the American public is 
to allow them to have a diverse source of energy for 
transportation. And a flex fuel vehicle allows that.
    Natural gas, also very enthusiastic about. And so the 
ability to have this conversion, you can fill up with natural 
gas or fill it up with higher blends of ethanol is something 
that will help American businesses and consumers.
    Mr. Engel. Thank you very much. I couldn't agree more.
    Let me ask you about renewable energy investment. A survey 
of global climate policies by Deutsche Bank included that clean 
tech innovations are more likely to emerge and succeed in 
Brazil, China, India, Germany, and the U.K. than they are in 
the U.S. These countries have used a combination of investments 
and national energy standards, feed-in tariffs, efficiency 
standards, and a price on carbon. According to Ernst & Young, 
China now leads the world as both the largest source of and 
destination for clean energy investment. China attracted 54 
billion clean energy financing in 2010, which is a 39 percent 
increase over '09 and such financing in the U.S. stagnated last 
year at 34 billion, approximately equal to 2007 levels.
    Your budget proposes to invest in energy efficiency, 
renewable energy technologies, science, and clean energy 
research development and deployment and it eliminates 40 
billion over 10 years in tax subsidies to Big Oil, with which I 
agree. Big Oil is making record profits and they don't need the 
tax subsidies. However, some people have argued that if you 
eliminate subsidies for Big Oil it means the government is 
wrongly in the business of picking winners or losers. They 
say--I don't agree--but they say that if we remove these 
subsidies for Big Oil, then out of fairness, we should remove 
subsidies from every other specific industry or business, green 
technologies or whatever. How do you respond to this?
    Mr. Chu. Well, I think the government over the past 
decade--really over the past century--has always looked at 
subsidies and it is a part of Congress and the President to try 
to decide what will be appropriate subsidies, but also how 
long. The subsidies have been used in the past to encourage new 
industries to get started. And so the oil subsidies began 
roughly 100 years ago and for the express intent of actually 
helping this industry get started. But as you pointed out, they 
are doing very well on their own.
    Mr. Engel. Yes, they did make 137 billion last year.
    Mr. Chu. Right.
    Mr. Engel. I mean God bless them, but I don't think they 
need any help from the government anymore.
    Let me ask you this. About 2/3 of the Department of 
Energy's budget is directed at nuclear weapons or nuclear 
cleanup activities, and there are some who argue that those 
activities would be better handled by the Department of 
Defense, by DOD. How do you respond to that?
    Mr. Chu. Well, I respectfully don't agree with that. I 
think the nuclear weapons and the nuclear cleanup needs a very 
science-based approach to this, that we have felt since the 
Manhattan Project, a lot of expertise. I think that we should 
continue to have it within the NNSA and also within the 
Department of Energy, Environmental Management.
    Mr. Engel. Again, thank you. Thank you very much, Mr. 
Secretary, and again thank you for the good job that you are--
--
    Mr. Whitfield. Recognize the gentleman from Colorado, Mr. 
Gardner, for 5 minutes.
    Mr. Gardner. I thank the Chairman for his time. And thank 
you, Secretary Chu, for your time and testimony today.
    A couple of questions. We heard our colleague from 
Massachusetts refer to the impact the Strategic Petroleum 
Reserve had on the price of oil. When that was released, it 
reduced the price of gas at the pump?
    Mr. Chu. You are talking about the last----
    Mr. Gardner. Yes, in June of 2011 the price did drop.
    Mr. Chu. Yes.
    Mr. Gardner. OK, thank you. And is the President 
considering releasing--you said it before--he is considering 
releasing the SPR right now to respond to gas prices?
    Mr. Chu. As we said, that option remains on the table.
    Mr. Gardner. Is the SPR intended to be used only during 
times of severe supply disruptions and real emergencies?
    Mr. Chu. It is a little more complicated than that but that 
is the primary use. There also are----
    Mr. Gardner. Do those circumstances exist now?
    Mr. Chu. Let me just finish. Certainly, the primary use is 
for supply disruption. There are also issues for severe 
economic disruptions----
    Mr. Gardner. Due to a severe energy disruption, correct?
    Mr. Chu. Not--well, for example, we released SPR before 
when there was----
    Mr. Gardner. For Hurricane Katrina?
    Mr. Chu. Yes.
    Mr. Gardner. Do we have a hurricane that is taking 
refineries out now?
    Mr. Chu. No, we don't.
    Mr. Gardner. OK, thank you. The President said yesterday 
that the only solution to high gas prices is decreased demand. 
Last year, though, together with our allies, 60 million barrels 
of the world's strategic reserve was released. The price of oil 
dropped by $4 from $95, and even though it returned to $95 6 
days later, supply made a difference. Don't you agree?
    Mr. Chu. I think the supply did make a difference but----
    Mr. Gardner. On July 14, 2008, when President Bush lifted 
the moratorium, the price of oil dropped $9, more than two 
times the drop from the SPR release last year and it kept going 
down even though people knew that the increased supplies would 
not come online for years. The anticipation of supply made a 
difference, didn't it?
    Mr. Chu. That is true.
    Mr. Gardner. If long-term decreased demand has an effect on 
price, then don't the basic laws of supply and demand dictate 
that so will long-term increased supplies?
    Mr. Chu. I absolutely agree. Long-term----
    Mr. Gardner. So if you are going to pursue short-term 
policies such as using the SPR for market manipulation, 
shouldn't you at a minimum couple that with long-term supply 
solutions such as increased production?
    Mr. Chu. Well, as you yourself are pointing out, the 
primary uses of the SPR are to deal with supply interruptions 
and other economic emergencies.
    Mr. Gardner. So we would need a long-term supply solution 
because you have said that supply matters?
    Mr. Chu. We need a long-term supply solution----
    Mr. Gardner. And we need to increase supply at that point--
--
    Mr. Chu. The world----
    Mr. Gardner [continuing]. Is that correct?
    Mr. Chu [continuing]. Needs a long-term demand solution as 
well to----
    Mr. Gardner. If you----
    Mr. Chu [continuing]. Moderate our demand.
    Mr. Gardner [continuing]. Increase supply, it will decrease 
cost. That is what you have admitted to; that is what the SPR 
did. Is that correct?
    Mr. Chu. I agree that both supply and demand matter.
    Mr. Gardner. Thank you. And last year, when you drew down 
from the SPR, oil prices were $95. You haven't replaced those 
30 million barrels, have you?
    Mr. Chu. No, we didn't.
    Mr. Gardner. How do you plan to replace those barrels now 
that the price of oil is even higher?
    Mr. Chu. There is a plan put forward in our fiscal year 
2013 budget over a period of years to begin to buy back that 
oil.
    Mr. Gardner. So you are buying back that oil but not 
increasing production. What about the Royalty-In-Kind program 
Secretary Salazar's office was in charge of?
    Mr. Chu. I am not intimately aware of that.
    Mr. Gardner. You are not familiar with it? Will you meet 
with Secretary Salazar to reinstate the Royalty-In-Kind program 
so that these barrels of oil can be replaced before you draw 
down again?
    Mr. Chu. I will certainly get informed of the situation.
    Mr. Gardner. Would you please report to us about your 
conversation----
    Mr. Chu. Sure.
    Mr. Gardner [continuing]. With the Department of Interior? 
Based on what the President said yesterday and this morning at 
a press conference he called it phony to try to get down to $2 
in gasoline. Is it phony to want to reduce the price of 
gasoline?
    Mr. Chu. I think the President is very clear as I have been 
very clear. We do want the price of gasoline to go down.
    Mr. Gardner. And we need to do that by increasing supply, 
as you have said, by releasing the SPR or perhaps increasing 
domestic production?
    Mr. Chu. Well, as the President is pointing out, as many 
people in this session have pointed out, the United States' 
supply by itself is not going to--it will affect the world's 
demand----
    Mr. Gardner. Like the release of SPR?
    Mr. Chu. But it in itself doesn't control it. We 
certainly----
    Mr. Gardner. But you said that increased supply decreases 
price as exemplified by the SPR?
    Mr. Chu. But as you well know, the production of U.S. 
petroleum products, petroleum has increased over the last 8 
years and yet the price has----
    Mr. Gardner. So the SPR didn't then cause gas prices to go 
down like you just said it did. We know it did and you have 
said that supply causes prices to go down.
    Mr. Chu. SPR release caused a--there was a short-term--if 
you look at the historical record----
    Mr. Gardner. Because of a supply infusion into the market?
    Mr. Chu. No, I think it----
    Mr. Gardner. So it wasn't supply?
    Mr. Chu. If you would let me finish. So what happened----
    Mr. Whitfield. Sorry, the gentleman's time is expired.
    At this time I recognize the gentleman from Washington 
State, Mr. Inslee, for 5 minutes.
    Mr. Inslee. Mr. Secretary, if you would like to finish your 
answer. You weren't given an opportunity go ahead, if you would 
like to do that.
    Mr. Chu. Yes. Very quickly, during that release and an 
international, coordinated release and the IEA, the SPR was 
meant to deal with the temporary disruption in supply with 
Libya. And now Libya is coming back in petroleum reserves and 
the SPR release served its intended purpose.
    Mr. Inslee. And Mr. Secretary, I appreciate the work you 
are doing on advanced forms of energy. Bill Gates was at our 
Advanced Energy Research Consortium last week talking about the 
need for greater national investment. And I certainly echo 
that, and I appreciate you to the extent possible advancing 
that cause.
    I want to ask you specifically about biofuels. There is a 
potential bioreactor. We are looking at various bioreactors 
either commercial or pre-commercial. We are ready to go out 
into the Northwest. Could you comment? And obviously, I would 
like you to come out and take a look at our State opportunities 
in that regard. What should be in the near term for 
bioreactors?
    Mr. Chu. Sure. We think the idea of making transportation 
liquid fuel using biological sources has great promise. And the 
Department of Energy over the years has been supporting this. 
And we think that these technologies do have--you know, from 
algae, from grasses, from using residual agricultural waste, 
all these things have the potential again of having alternative 
supply of transportation fuel that would go further to our 
lesser dependency on oil and especially less dependency on 
foreign oil, because these things can be made in the United 
States.
    Mr. Inslee. So we like the idea of bio-refineries, a 
product designed by Targeted Growth, a company in Seattle was 
the first bio-fueler to partially fuel a jet, Boeing 747 flew 
across the Atlantic Ocean last summer, first ever in human 
history.
    So Washington State University and others are leading a 
consortium of Boeing and Alaska Airlines to work for a bio-
refinery out in the Northwest. What could you advise us to try 
to make sure the Department of Energy looks at the State of 
Washington as far as an opportunity there?
    Mr. Chu. We will certainly look at that particular project, 
but we will look at all the projects. And I have a real avid 
interest in this because I think it does have great potential 
for decreasing our dependency on oil. And we will need liquid 
transportation fuel in the coming decades, I would say in this 
century.
    Mr. Inslee. I think you will find out in Washington State 
probably about as an advanced consortium from the genetic 
designer to the grower to the aeronautics company ready to 
accept delivery. You are going to find a very welcome network 
that is pre-prepared for this adventure and I hope you will 
take a good look at Washington State.
    One more question about Washington State. We have some very 
good success out at the Hanford site. We are freeing some land 
now to be ready for development, and your agency is moving 
forward to allow about 1,600 acres to be allowed for commercial 
development. Very excited about that because we need to 
transition from the cleanup to new industries in the Tri-
Cities. We are told it could be a year and a half before we 
actually get that done. We hope that you can do anything you 
can to expedite that transfer because we have got some 
companies looking at good things in the old Hanford site. I 
hope you could take a look at that.
    Mr. Chu. I would.
    Mr. Inslee. Last, I just want to thank you. I haven't 
agreed with everything you are doing there. We have a 
disagreement on our Yucca issue. I won't bring that up today. 
But I just want to thank you. I have got a 1-month-old 
granddaughter and I want to thank you for your efforts giving 
her a shot to enjoy a world when she is my age of 61 that looks 
something like the one we have got here today. My friends 
across the aisle talked about something ruining the world and 
you are doing some work to make sure it is not ruined by the 
time she is 60.
    The work you are doing on solar energy is spectacular. You 
look at the ALTEC Company, the world's most durable solar cell 
made in Marysville, Washington, the silicon energy company; 
REC; Nanosys doing advanced nanotechnology for lithium ion 
battery storage; EnerG2 Company doing ultracapacitors. These 
are spectacular things you are doing. And because of your 
success, which I believe we are going to have, my granddaughter 
is going to have a shot of having a world that looks like the 
one we have got. And I know you are going to be catching a lot 
of arrows in your back for those who are naysayers and believe 
that a negative voice is the American one. I believe a positive 
voice is the American one and we are going to grow this economy 
and we are going to give my granddaughter a shot and everybody 
else's at a world that looks like ours.
    So I just want to thank you and keep it up.
    Mr. Chu. Thank you.
    Mr. Whitfield. The gentleman's time is expired.
    At this time, I recognize the gentleman from Kansas, Mr. 
Pompeo, for 5 minutes.
    Mr. Pompeo. Thank you, Mr. Chairman.
    Thank you, Secretary Chu, for being here today. I want the 
world to look great for my son as well, and to do that, I think 
we have to do things that work. And so I am going to ask you 
about some projects, places that your budget is intending to 
spend money and talk about whether they are working or not.
    In the President's budget--I assume your handiwork--it says 
that the goal is to have 1 million electric vehicles on the 
road by 2015. Is that correct?
    Mr. Chu. That is correct.
    Mr. Pompeo. How are we doing?
    Mr. Chu. Pardon?
    Mr. Pompeo. How are we doing? Are we on track to make that 
goal?
    Mr. Chu. Well, we are going to wait until 2015 but in terms 
of what is happening both technically I think things are 
developing and I remain hopeful.
    Mr. Pompeo. Are we going to make it? How many do we have 
today? How many electric vehicles on the road today?
    Mr. Chu. I don't know the exact number. I can get back to 
you.
    Mr. Pompeo. Less than a million by multiple orders of 
magnitude, is that right?
    Mr. Chu. It is certainly significantly less than a million.
    Mr. Pompeo. Would the administration support higher gas 
prices to achieve this goal of 1 million electric vehicles on 
the road by 2015?
    Mr. Chu. The administration wants lower gas prices.
    Mr. Pompeo. Your actions belie those words in my judgment, 
but I appreciate that you state that as your objective. The 
President said he would buy Chevy Volt. He said he would buy 
one 5 years from now when he is not the President anymore. I am 
not sure about the timeline but in any event, last week, Chevy 
announced that the Volt would be suspended from production 
because of demand, temporary layoff workers. How many taxpayer 
dollars have gone in support of the Chevy Volt?
    Mr. Chu. You know, I don't know. I know that the Chevy Volt 
is a great car. I think that there is, you know, a huge 
investment of GM and the leadership of GM to invest in this, 
and right now, I am still very hopeful that the Chevy Volt will 
be adopted.
    Mr. Pompeo. Well, I appreciate it if you would get back to 
us, let this committee know how much money has been extended so 
far on the Chevy Volt. Do you drive one?
    Mr. Chu. No. I don't own a car at the moment.
    Mr. Pompeo. Fair enough. Fisker Automotive received over 
$500 million in DOE loans in 2010. You cut off the funding last 
May because it had not met its sales target. At least that was 
one of the stated reasons for the cutoff of the loans if I 
understand it correctly. Do you think we are looking at another 
Solyndra?
    Mr. Chu. Well, it is much more complicated than what you 
said. We have milestones within our Loan Program, and as we 
disperse funds of any of our people that we give loans to, we 
work with the companies and do that. And so, you know, we are 
hoping Fisker can work through the things, temporary blips, and 
continue.
    Mr. Pompeo. I hope so, too. How much exposure does the 
United States taxpayer have to Fisker today?
    Mr. Chu. I can get back to you on the exact number.
    Mr. Pompeo. Great. I appreciate that.
    Just so you know, it was sometime before I was here, but we 
heard these same reassurances about Solyndra up and through 
times the DOE was still making loans and advancing money 
against those credits. We heard that you were monitoring, 
watching, taking good care that that money be repaid to the 
Treasury and that is not going to happen. So I hope that you 
are right about Fisker and that the taxpayer doesn't end up 
another $500 million short.
    Thank you, Mr. Secretary. I appreciate your time today.
    Mr. Chu. Thank you.
    Mr. Whitfield. Mr. Secretary, we appreciate your time. 
Unfortunately, we have four votes on the floor and we do have 
about four members that wanted to come back to finish asking 
questions. And I was wondering, would you be able to be back 
here at 15 to 1:00 for a little while or not?
    Mr. Chu. I have just heard from my staff that we have 
agreed to do it. I was worried of another appointment.
    Mr. Whitfield. No, I understand. And we appreciate it. And 
as you know, we have some of the finest restaurants here in the 
Rayburn Building, so if you want to get something to eat. But 
we will be back just as quickly as we possibly can. And we do 
thank you for your time. And there may or may not be four 
coming back, but thank you very much.
    Mr. Chu. Thank you, Mr. Chairman.
    [Recess.]
    Mr. Whitfield. I am not even going to wait for our friends 
on the other side of the aisle. I am going to recognize Mr. 
Griffith of Virginia for 5 minutes.
    Mr. Griffith. Thank you, Mr. Chairman.
    Thank you for coming back, Secretary Chu. Those of us at 
the end of the list appreciate it very much.
    As you know, the United States is blessed with huge coal 
reserves and I note with some interest that as technology has 
become available that coal to gas, coal liquification I think 
is becoming more affordable in the world marketplace. And in 
fact South Africa gets just about a third of its gasoline from 
coal to oil processes. And in fact the President, when he was a 
Senator, on two different occasions introduced legislation to 
do just that. So I guess my question is what do you see the 
Department of Energy doing to help get coal to liquids to play 
a vital and additional role in the supply of gasoline in the 
United States?
    Mr. Chu. Well, first, we agree that the United States is 
blessed with great fossil fuel resources, and we are looking at 
the potential for both coal-to-liquid and gas-to-liquid. And we 
want to support research that would enable--the issue is high 
capital cost. The plants are very, very complex, and when I 
talk to the oil companies, you know, Shell, ExxonMobil, they 
uniformly say that the very high capital cost is a problem. 
Now, having said that, we also of course want to do this in a 
way that not only--even without capturing the carbon, it is 
less than marginal and we would actually like to capture the 
carbon and helping enhance our recovery and other utilization, 
but ultimately, we also need to capture the carbon.
    Mr. Griffith. Absolutely. And in that regard, these bills 
that the President put in, particularly one in 2006 was 
actually a loan guarantee program and I am just wondering if 
any of the loan guarantees that you all did as part of the 
stimulus helped to defray any of the capital costs for any 
companies that might be looking to take coal and turn it into 
gas?
    Mr. Chu. I think the one I know of--there are a few still 
going forward. There are gasification and the use of the carbon 
dioxide enhanced oil recovery. I think Southern has a project 
that is going forward on that.
    Mr. Griffith. All right. And of course that brings me to 
Solyndra. And, you know, you all have indicated that what was 
happening in the Chinese market, both your administration and 
you have indicated what was happening in the Chinese market was 
not anticipated in 2009 when the loan guarantee was done. One 
of the questions I have always had, Secretary Chu, is that was 
known based on the way I heard your testimony over the course 
of the last year. That was actually known, though, by late 2010 
and certainly by February of 2011, and so that calls into 
question if you knew what was happening in the Chinese market 
and that the price was so low that Solyndra couldn't 
manufacture its product for the price that the Chinese were 
selling their product for, why the subordination?
    Mr. Chu. You are absolutely right. Certainly by 2011, late 
2010 we did know that Solyndra was in deep trouble, that there 
was--by then the price was----
    Mr. Griffith. But you also knew that the Chinese market had 
basically made them--you may not agree but it had made their 
products cheaper than Solyndra could produce their product. The 
Chinese could sell their product for less than Solyndra could 
produce their product for, isn't that correct?
    Mr. Chu. It is correct that we knew that Solyndra was in 
deep, deep trouble and there was a chance of bankruptcy. And 
when it came time to decide how to do this, it was a judgment 
call on whether the fact--the loan was for a----
    Mr. Griffith. And I know that you have said that before and 
I respect you, but that being said, isn't it a fact that in 
late 2010 and certainly by February of 2011 when the 
subordination was signed off on, when you look at the price of 
what the Chinese were able to sell their product at and the 
price of what Solyndra was able to produce their product at, 
the Chinese could sell cheaper than Solyndra could produce. 
Isn't that a fact?
    Mr. Chu. That is correct.
    Mr. Griffith. OK. Thank you. I appreciate that very much.
    And I would also ask you in that same vein, different aisle 
maybe of the church, but Chairman Upton and Stearns recently 
sent you a letter on the loan program for Prologis? I hope I am 
saying that right. And Solyndra was to be the supplier for the 
first phase of that project but then Solyndra went bankrupt. 
Knowing what they knew, why did DOE feel comfortable including 
Solyndra as the first-phase supplier for Prologis at a time 
when you knew they were about to fold or knew that they were in 
serious danger of folding even with the first subordination? 
But I know you were hoping that there would be the second 
August subordination from outside money coming in, but why did 
you go forward with Prologis and say, look, this ought to be 
your supplier?
    Mr. Chu. Well, first, we were uncomfortable with Solyndra 
being the supplier, quite frankly. And Prologis had a very 
small--the initial one was Solyndra but I was saying I believed 
the Prologis business model was a very good one. I was very 
supportive of that loan, but I was nervous if Solyndra went 
there that Prologis should line up a plan B.
    Mr. Griffith. All right. I thank you.
    And I yield back. Thank you, Mr. Chairman. Thank you, 
Secretary Chu.
    Mr. Whitfield. The gentleman's time has expired.
    At this time, I recognize Mr. Olson of Texas for 5 minutes.
    Mr. Olson. I thank the chair.
    And Dr. Chu, I would like to thank you for your testimony 
today and especially for waiting for us to come back after 
votes. It is appreciated.
    I would like to ask you a few questions related to the 
electric grid because, as you are surely aware, the potential 
for conflict between grid reliability needs and environmental 
rules is greater now than ever. And in the interest of time, I 
would appreciate it if you could simply answer yes or no to the 
following questions.
    Question number one, are you aware that under Section 202 
of the Federal Power Act, DOE can issue emergency orders to 
require a generator to run. Yes or no?
    Mr. Chu. Yes, I am aware of that.
    Mr. Olson. That is what I thought, sir. Thank you.
    Question number two, are you aware that a generator's 
compliance with an emergency order could result in a violation 
of environmental laws and subject generators to citizen 
lawsuits? Yes or no?
    Mr. Chu. I am aware of that.
    Mr. Olson. That is what I thought as well. Thank you.
    Question number three, do you believe it is fair to make 
generators choose between complying with a DOE emergency order 
or complying with environmental laws and regulations? Is that 
fair?
    Mr. Chu. In most instances, we believe that it doesn't have 
to be an either/or. And so as I said before, the Department of 
Energy's job is to help the private sector ensure that we have 
a reliable source of electricity for our businesses and for our 
citizens.
    Mr. Olson. I will count that as a leaning not fair.
    But question number four--not to put words in your mouth--
are you aware that this situation has arisen twice in recent 
years where a generator was forced to pay environmental fines 
and settle a citizen lawsuit because they complied with an 
emergency order from your department. Are you aware of that? 
Yes or no?
    Mr. Chu. I am not sure, candidly, but it may have occurred.
    Mr. Olson. It has occurred with a company called Mirant--
which is now GenOn--and two issues in particular with them, one 
out of San Francisco, California. I could get you some details 
but I am sure staff can do that as well.
    And my final question for you is would you be supportive of 
efforts to remedy this potential conflict between the Federal 
laws?
    Mr. Chu. I am very supportive that we don't want to order 
that a generator continue to be online to produce emergency 
backup power and face Federal fines from another branch. And we 
are very eager to work through those issues.
    Mr. Olson. That is fantastic because I look forward to your 
support when I introduce legislation to address this issue in 
upcoming weeks.
    Thank you again for your patience for coming back. I yield 
back the balance of my time.
    Mr. Whitfield. Thank you, Mr. Olson.
    Mr. Scalise, you are recognized for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
having the hearing.
    Secretary Chu, thank you for coming with us and for staying 
through the vote series. I appreciate that.
    I want to get into, you know, I guess the different 
definition of an all-of-the-above energy strategy because I 
think while we have been talking about and actually passing 
legislation out of the House to implement an all-of-the-above 
energy strategy so that we can not only create millions of 
American jobs but also lower prices of gas at the pump and 
eliminate our dependence on Middle Eastern oil, the President 
has recently started talking about an all-of-the-above energy 
strategy. But if you look at the actual things that he has 
done, his policies have actually hurt energy production in this 
country. And I want to start by asking you, you know, the 
President is out there boasting that, you know, energy 
production, oil production has never been higher as if he 
supports that, yet when you actually look at the facts from 
what we have seen, numbers we have seen show that actual 
production on Federal lands, which the President has control 
over through his Department of Interior, is down 11 percent. 
And in fact in the Gulf of Mexico it is down 17 percent. Have 
you seen any numbers similar to that to indicate just what is 
happening in areas where the Federal Government does have a 
jurisdiction?
    Mr. Chu. I have seen numbers that I glean from a recent 
Senate speech that were gleaned from what----
    Mr. Scalise. Well, the numbers that you have seen 
validating what I have seen, that there is an actual decline in 
production on Federal lands.
    Mr. Chu. If you start the clock when President Obama became 
President, the numbers I have seen show an increase in----
    Mr. Scalise. We have seen just from 2010 to 2011 an 11 
percent reduction in oil production on Federal lands. In the 
Gulf of Mexico exclusively we have seen a 17 percent reduction 
in oil production. Where the increase has come is on private 
lands, you know, North Dakota and the shale plays, which, by 
the way, the President is trying to shut down through the EPA. 
So it is a little bit disingenuous for the President to go out 
there and say he is for all of the above and oil production has 
never been higher when on Federal lands where he has got an 
influence, he has actually used his influence to reduce 
production. And on private lands where he doesn't directly have 
an influence, he is trying through the EPA to shut down the 
fracking process, which would mean there would be a reduction 
there, too, making us more dependent.
    And so, you know, I will go back to the comments that you 
have made in the past and the President have made in support of 
higher gas prices. And, you know, back in 2008, right after the 
President was elected you said--and let me make sure--``somehow 
we have to figure out how to boost the price of gasoline to the 
levels in Europe.'' Did you say that?
    Mr. Chu. I am not sure--as I said before----
    Mr. Scalise. You said it or you didn't. It has been 
attributed--I mean it is not the first time you have heard this 
because many people have asked you----
    Mr. Chu. Right.
    Mr. Scalise [continuing]. About it and I have heard you----
    Mr. Chu. No.
    Mr. Scalise [continuing]. Confirm that you said it.
    Mr. Chu. I said something very similar to that. I am not 
sure when the date----
    Mr. Scalise. OK. So the prices in Europe are what right 
now? I have seen over $8 a gallon.
    Mr. Chu. I am not sure when the date was but everything I 
have done when I became Secretary of Energy and was named 
Secretary of Energy was to help control, bring down the prices 
of gasoline.
    Mr. Scalise. That hasn't happened but if you look at 
President Obama's actual quote, President Obama said he would 
prefer a gradual adjustment to near-$4-a-gallon gasoline. 
President Obama said that. And unfortunately, the President has 
put policies in place that have gotten us now to $4 a gallon 
almost in gasoline prices. We have seen it. It was $1.83 when 
he started as President. It is over $3.70 now. So the President 
has gotten his wish and people are furious about it. It is 
killing the economy; it is killing jobs. And now that people 
are furious, the President is trying to blame somebody else.
    But let's look at the record. You know, if you look at what 
is happening in the Gulf of Mexico alone, we have lost about a 
dozen deepwater rigs, billion-dollar-plus assets that have left 
the Gulf of Mexico because they can't get permits because of 
the President's own policies. Now, they haven't left to go to 
other places in America; they have left the country. They have 
gone to places like Egypt. You know, imagine it is better to do 
business in Egypt than in America because of the President's 
policies. We saw what the President did on the Keystone XL 
Pipeline, saying no to that. You know, the President has 
implemented a policy that has actually reduced American energy 
production and supply.
    Now, of course, the President has been to Saudi Arabia. He 
has bowed down to their prince and, you know, he has begged 
them for more oil. I understand you have been to Saudi Arabia 
as well and had similar meetings. Is that accurate? Have you 
been to Saudi Arabia?
    Mr. Chu. I have been to Saudi Arabia.
    Mr. Scalise. Asking them to produce more oil? What did 
you----
    Mr. Chu. Well, certainly Saudi Arabia is one of the few 
countries----
    Mr. Scalise. But have you asked them to produce more oil?
    Mr. Chu. Well, it is----
    Mr. Scalise. Yes or no. I am almost out of time.
    Mr. Chu. Allow me to continue.
    Mr. Scalise. I don't have the time. It is a yes-or-no 
question. Did you ask them to increase production?
    Mr. Chu. We would like Saudi Arabia----
    Mr. Scalise. Mr. Secretary--and I am almost out of time; I 
apologize. I am sure you will have an opportunity to answer 
later but, you know, rather than going to Saudi Arabia, I have 
mapped out, it is only about a 5-minute walk from your office 
to the White House. I would suggest instead of going to Saudi 
Arabia and asking them to increase production, go to 1600 
Pennsylvania Avenue and ask the President to reverse his 
policies that have reduced production in America and made gas 
prices higher with the permitorium in the Gulf where there is 
still no consistent policy to get permits and it is killing 
production. We have lost a dozen rigs. They have left America. 
We have lost thousands of jobs because of that. Keystone 
Pipeline, we lost a million barrels from Canada that we now 
have to get from Middle Eastern countries who don't like us; 
this EPA attack on fracking, which is killing innovation. We 
talked to a company recently, an American energy company who 
left $3 billion on the table----
    Mr. Rush. Mr. Chairman, I am going to insist on regular 
order.
    Mr. Scalise. So I would just ask that you go and pursue the 
administration policies that are killing energy production and 
causing higher gas prices instead of going to Saudi Arabia.
    Yield back.
    Mr. Whitfield. Gentleman's time is expired.
    Mr. Scalise. Yield back.
    Mr. Whitfield. Now, Mr. Secretary, if you want to try to 
respond, feel free to do so.
    Mr. Chu. Very, very quickly. We are talking about immediate 
spare production, and Saudi Arabia is one of the few countries 
that has immediate spare production. To develop an oil field in 
the Gulf takes years, at least typically 5 years to actually 
explore, find, develop this. And so for immediate spare 
production we think that would have a way of moderating price 
spikes in the world oil market.
    Mr. Whitfield. Well, that concludes today's hearing. And 
once again, I want to thank you and your staff for your 
patience. And I do want to ask unanimous consent to enter into 
the record a recent survey made in Nevada regarding the 
public's views on Yucca Mountain. Without objection, that will 
be entered into the record.
    [The information follows:]
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    Mr. Whitfield. And then we will keep the record open for 10 
days for any additional materials that may be submitted.
    And once again, Mr. Secretary, thank you and we look 
forward to working with you as we move forward.
    Mr. Chu. All right. Thank you, Mr. Chairman.
    Mr. Whitfield. This hearing is adjourned.
    [Whereupon, at 1:08 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
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