[Senate Hearing 112-]
[From the U.S. Government Publishing Office]



 
    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2012

                              ----------                              


                        WEDNESDAY, MAY 18, 2011

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:41 p.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Dianne Feinstein (chairman) 
presiding.
    Present: Senators Feinstein, Murray, Tim Johnson, Landrieu, 
Lautenberg, Alexander, Cochran, McConnell, Collins, Murkowski, 
and Graham.

                          DEPARTMENT OF ENERGY

                        Office of the Secretary

STATEMENT OF HON. STEVEN CHU, SECRETARY

             OPENING STATEMENT OF SENATOR DIANNE FEINSTEIN

    Senator Feinstein. Good afternoon, ladies and gentlemen, 
and welcome to the Energy and Water Subcommittee's budget 
hearing on the Department of Energy's (DOE) fiscal year 2012 
budget request.
    DOE has requested $30.5 billion for fiscal year 2012. That 
is an increase of $4.8 billion, or 19 percent, from fiscal year 
2011. About $1.1 billion of the $4.8 billion increase, or 25 
percent, is for the National Nuclear Security Administration's 
(NNSA) nuclear weapons for nonproliferation and Naval Reactor 
programs.
    This subcommittee has already explored NNSA's budget with 
Administrator D'Agostino 2 weeks ago. The rest of the increase 
is for energy efficiency and renewable energy projects, loan 
guarantees, and basic energy research.
    It is my understanding that DOE submitted this budget 
request before the Congress passed the 2011 continuing 
resolution, and so it does not reflect the new spending 
reality. So, it is clear that DOE and the Congress will have to 
make some joint, painful decisions and focus the limited 
resources that we have on the highest priorities. Therefore, I 
think knowing your highest priorities is of substantial 
importance to us, Secretary. I hope that you will highlight 
those. Do not feel shy.
    I would like to just highlight the three largest increases 
in this budget.
    The largest single increase would be for the Office of 
Energy Efficiency and Renewable Energy (EERE), which would see 
an increase of $1.4 billion or 76 percent. The only programs in 
this account that see a decrease are hydrogen and water power, 
and I know we want to discuss that.
    Given the across-the-board budget increases for all other 
programs, it is hard to determine which of these research and 
development (R&D) programs would have the biggest impact on 
energy use and the clean-energy economy.
    Second, the Office of Science would see an increase of $5.5 
million or 11 percent. So, those are the first two, EERE and 
Office of Science.
    Innovation clearly drives economic prosperity. The Office 
of Science has been one of the leaders in new scientific and 
technologies deliveries. For example, Argonne National Lab in 
Illinois spent 10 years researching cathode materials for a 
lithium ion battery that was small, energy efficient, and low 
in weight. General Motors used this technology to develop the 
battery it now uses in the Chevy Volt, the first mass produced 
plug in hybrid electric vehicle. So, that is significant.
    Despite these successes, the Office of Science must do a 
better job explaining how basic research can lead to new clean-
energy technologies, and how it can better leverage large 
scientific facilities to help American industry remain 
competitive. I mean, I would hazard a guess that that would be 
a substantial priority for all of us.
    Third, Advanced Research Projects Agency-Energy (ARPA-E) 
would see an increase of $370 million or 206 percent. ARPA-E, 
of course, holds a promise of advancing high-risk, high-reward 
technology.
    Even though ARPA-E is a new agency, I would like to ask 
that you apply ARPA-E program management to other DOE offices, 
such as the rigorous peer review process and contract or grant 
negotiations completed in just a few months. Streamlining 
contracting processes and assembling high-quality program 
management teams, I think, would benefit many DOE energy 
programs.
    My last observation is that outside of NNSA, DOE's budget 
does not provide a 5-year spending plan. Without this plan, it 
makes it difficult to buy into committing to programs that 
create large, out-year obligations.
    Joining us today is, of course, Dr. Steven Chu, the 
Secretary of Energy. In the full disclosure, I want to say that 
I have the greatest respect and fondness for Secretary Chu. I 
happened to meet him when he was head of Lawrence Berkley Labs, 
and his achievements are many, marked, and quite astounding. 
So, we all grant that you are a most brilliant secretary, 
Secretary Chu, and we are delighted to have you here.
    But let me turn to Senator Alexander for his remarks, if I 
might.

              OPENING STATEMENT OF SENATOR LAMAR ALEXANDER

    Senator Alexander. Thank you, Madam Chairman.
    When I was the Education Secretary and was in your shoes, I 
did not get that kind of compliment from the chairman of the 
subcommittee, so I am a little jealous.
    But, you know, I agree with her. I think, Dr. Chu, you are 
one of the President's best appointees, that you have been a 
terrific leader, and I am glad that you are spending this part 
of your life in this form of public service.
    I want to, in my remarks and then in the questions when my 
time comes, I want to focus on some of the things that Senator 
Feinstein talked about. And, for me, I would say it would be 
putting a priority on energy research for our country, 
something I know, Dr. Chu, you have long advocated.
    In 2008, I went to the Oak Ridge National Laboratory and 
gave a talk called ``A New Manhattan Project for Clean Energy 
Independence'', and suggested that we apply the same rigor and 
ambitious goals to energy research that we did to the Manhattan 
Project in World War II, and listed several objectives of such 
a new Manhattan Project, most of them taken from The 14 Grand 
Challenges of Engineering in the 21st Century that Chuck Vest 
and the National Academy of Engineering had said. But they 
included plug in electric cars, carbon capture, solar power and 
recycling, used nuclear fuel, advanced bio fuels, green 
buildings, and even fusion.
    Now, you were a part, Dr. Chu, of the National Academy's 
effort to say to the Congress what we should do to help our 
country be more competitive. We called it ``America Competes'' 
based upon your report. And you have moved to form hubs, you 
call them, in several areas, and in your request, you want to 
form more. So, I would like to indicate my broad agreement with 
that sort of strategy and work with you to find ways, even in 
this tight budget situation, to find--to prioritize spending 
and to find more money for clean-energy research.
    For example, my colleagues have wanted to talk this week 
about subsidies for energy for big oil. If we are going to do 
that, I think we should talk about all subsidies. I suggested 
on the floor this morning we might talk about big wind. The 
taxpayers are on the hook for $27 billion over the next 10 
years to subsidize windmills, which is more money than we would 
save if we cut out the tax breaks for the five big oil 
companies. That is just an example. And I am--that was based 
upon the production tax credit that was put into place 
temporarily in 1992.
    Now, my staff research indicates we only use about--spend 
about $6 billion on energy research in our Federal Government 
every year, and I would wonder whether some of these long-term 
subsidies for energy, whether big oil or big wind, might be 
better spent for energy research.
    There are other parts of the budget, even this budget, 
where I wonder whether the energy efficiency section, I wonder 
if energy efficiency money should go up at the level that it is 
mentioned here, or we should increase the research budget. 
There is $4 billion in unspent American Recovery and 
Reinvestment Act (ARRA) funding and weatherization and State 
energy grants. You're seeking $384 million more. Would that not 
be better spent to take the Federal research budget up closer 
to $7, $8, or $9 billion a year?
    I, too, like ARPA-E. I think that is a very promising area. 
We were only able to find $180 million for it this year, 
although it is authorized at $300 million, and it is now fully 
authorized.
    So, I would just--I would like to weigh in favor of energy 
research. I think many of my Republican colleagues see energy 
research as an appropriate role for the Federal Government. 
Long-term subsidies some of my Republican colleagues have 
problems with. I deal with long term. Short-term, I support 
jump starting electric cars, maybe natural gas trucks, jump 
starting the first new nuclear plants through loan guarantees. 
All these are things that you have suggested.
    But, so I will be looking to work with you on seeing if we 
can prioritize money from the current request, maybe look at 
these long-term subsidies, and apply more our dollars over the 
next 10 years to what you call hubs and I call a new Manhattan 
Project for clean-energy independence.
    Thank you, Madam Chairman.
    Senator Feinstein. And I thank you, Senator Alexander.
    We will proceed in 5-minute rounds and use the early bird 
rule straight as people come in to attend. And so, Secretary 
Chu, why do you not proceed with your remarks, and then we will 
go to questions.

                    SUMMARY STATEMENT OF STEVEN CHU

    Secretary Chu. Thank you, Chairman Feinstein, and thank 
you, Ranking Member Alexander, and the other members of the 
subcommittee, first, for your kind remarks, and--but also for 
giving me the opportunity to present and discuss the 
President's fiscal year 2012 budget request for DOE.
    President Obama has a plan for the United States to win the 
future by out-innovating, out-educating, and out-building the 
rest of the world, while at the same addressing the deficit. 
Many countries are moving aggressively to lead in clean energy. 
We must rev up the great American innovation machine to create 
jobs and win this clean-energy race.
    And to that end, President Obama has called for increased 
investments in clean-energy research, development, and 
deployment. In addition, he has proposed a bold, but 
achievable, goal of generating 80 percent of America's 
electricity from clean sources by 2035. DOE's fiscal year 2012 
budget request of $29.5 billion supports these goals and 
strengthens the Nation's economy and security.
    We recognize that families are feeling the effects of high 
gas prices right now, and while there are no silver bullets to 
this challenge, President Obama is committed to breaking our 
dependence on foreign oil and easing the burdens on families. 
This budget helps reduce our reliance on oil by developing the 
next generation of home grown bio fuels and by accelerating 
electric vehicle research, development, and deployment. And 
through energy efficiency programs, we will save money for 
consumers by saving energy.
    In addition, the budget supports the research, development, 
and deployment of renewable energy, the modernization of the 
electric grid, and advancement of carbon capture and 
sequestration technologies. The budget also supports loan 
guarantees for renewable and energy efficiency technologies. 
Nuclear energy has an important role to play in our energy 
portfolio, and that is why the budget requests additional loan 
guarantee authority and invests in the research and development 
of advanced nuclear technologies.
    To unleash innovation, the President's budget supports the 
groundbreaking research through DOE's Office of Science. For 
example, we are investing in basic energy sciences, advanced 
scientific computing, biological and environmental science, and 
all key areas for economic competitiveness. In addition, the 
Office of Science supports widely used facilities that provide 
unique analysis tools for materials, chemistry, and biology 
research.
    The budget invests $515 million in ARPA-E, and this will 
allow ARPA-E to continue to support research projects that aim 
to deliver game-changing clean-energy technologies. ARPA-E's 
projects are generating excitement in the private sector.
    For example, through a combined total of $24 million from 
ARPA-E, six companies have already been able to advance their 
research efforts and show the potential viability of their 
cutting-edge technologies. This early support enabled those 
companies to achieve R&D milestones that, in turn, have 
attracted more than $100 million in private sector funds to the 
projects. This is precisely the innovation leverage that is 
needed to win the future.
    Another key piece of our research effort is the energy 
innovation hubs. Through the hubs, we are bringing together top 
scientists and engineers to achieve similar game-changing 
energy goals, but where a concentrated effort over a longer 
time horizon is needed to establish innovation leadership. The 
budget requests $146 million to support the three existing hubs 
and to establish three new hubs in the areas of batteries and 
energy storage, smart grid technologies and systems, and 
critical materials.
    Finally, the budget supports the Energy Frontier Research 
Centers (EFRC), which are working to solve specific scientific 
problems that are blocking clean-energy development. To better 
integrate and maximize our research efforts, DOE is organizing 
along the lines of business. This will help us create a sum 
that is worth more than the parts.
    In any specific technological area, we are examining 
current business projections and looking across ARPA-E, the 
Office of Science, and our applied technology side to determine 
where we in DOE can add the most value to accelerate the pace 
of innovation.
    For example, we have instituted a SunShot Initiative with 
participation from ARPA-E, Office of Science, and EERE to make 
the solar energy cost competitive with any other form of energy 
before the end of this decade. And this would position the 
United States to lead in this growing industry.
    At a time when industry, the Congress, and the American 
people are making critical energy decisions, we need to make 
sure to adequately fund the Energy Information Administration 
(EIA), the Nation's premier source of independent statistical 
information about energy production and use. Even a modest 
increase to support the EIA will go a long way in providing the 
Congress and others with an unbiased data and analysis needed 
to make informed decisions.
    In addition to strengthening our economy, the budget also 
strengthens our security by providing $11.8 billion for DOE's 
NNSA. The request of $7.6 billion for weapons activities 
provides a strong basis for transitioning to a smaller, yet 
still safe, secure, and effective nuclear stockpile without 
additional nuclear testing.
    It also provides much needed resources to strengthen 
science, technology, and engineering capabilities, and to 
modernize the physical infrastructure of our nuclear security 
enterprise.
    To support the President's goal of securing all vulnerable 
nuclear material around the world in 4 years, the budget 
invests $2.5 billion in the Defense Nuclear Nonproliferation 
program. Through our investments, the Obama administration is 
laying the groundwork for the Nation's future prosperity and 
security. At the same time, we are mindful of our 
responsibility to the taxpayer. We are streamlining operations 
and cutting back in multiple areas, including eliminating 
unnecessary fossil fuel subsidies.

                           PREPARED STATEMENT

    The United States faces a choice: Will we lead in 
innovation or will we fall behind? To lead the world in clean 
energy, we must act now, and we cannot afford not to.
    Thank you and I am pleased to now answer your questions.
    [The statement follows:]
                    Prepared Statement of Steven Chu
    Chairman Feinstein, Ranking Member Alexander, and members of the 
subcommittee, thank you for the opportunity to appear before you today 
to discuss the President's fiscal year 2012 budget request for the 
Department of Energy (DOE).
    In his State of the Union Address, President Obama laid out a plan 
for the United States to win the future by out-innovating, out-
educating, and out-building the rest of the world, while at the same 
time addressing the deficit. The President's budget request invests in 
much-needed programs while cutting back where we can afford to.
    Many countries are moving aggressively to develop and deploy the 
clean-energy technologies that the world will demand in the coming 
years and decades. As the President said, this is our generation's 
``Sputnik moment''.
    We must rev up the great American innovation machine to win the 
clean-energy race and secure our future prosperity. To that end, 
President Obama has called for increased investments in clean-energy 
research, development, and deployment. In addition, he has proposed a 
bold, but achievable goal of generating 80 percent of America's 
electricity from clean sources by 2035.
    A clean-energy standard will provide a clear, long-term signal to 
industry to bring capital off the sidelines and into the clean-energy 
sector. It will grow the domestic market for clean sources of energy--
creating jobs, driving innovation, and enhancing national security. And 
by drawing on a wide range of energy sources including renewables, 
nuclear, clean coal and natural gas, it will give utilities the 
flexibility they need to meet our clean-energy goal while protecting 
consumers in every region of the country.
    DOE's fiscal year 2012 budget request of $29.5 billion supports 
these goals and strengthens the Nation's economy and security by 
investing in the following priorities:
  --Supporting groundbreaking basic science, research, and innovation 
        to solve our energy challenges and ensure that the United 
        States remains at the forefront of science and technology;
  --Leading in the development and deployment of clean and efficient 
        energy technologies to reduce our dependence on oil, accelerate 
        the transition to a clean-energy economy, and promote economic 
        competitiveness; and
  --Strengthening national security by reducing nuclear dangers, 
        maintaining a safe, secure and effective nuclear deterrent, and 
        cleaning up our cold war nuclear legacy.
    While we are investing in areas that are critical to our future, we 
are also rooting out programs that aren't needed and making hard 
choices to tighten our belt. Additionally, we are improving our 
management and operations so we function more efficiently and 
effectively.
               leading in the global clean-energy economy
    As the President said in his State of the Union Address, investing 
in clean-energy will strengthen our security, protect our planet, and 
create countless new jobs here at home. DOE's budget request invests 
$3.2 billion in energy efficiency and renewable energy programs.
    Through programs to make homes and buildings more energy efficient, 
including a new ``Better Buildings Initiative'' to make commercial 
buildings 20 percent more efficient over the next decade, we will save 
money for families and businesses by saving energy. That is money that 
can be re-invested back into the economy. In addition, the budget 
supports the research, development, and deployment (RD&D) of renewable 
sources of energy like wind, solar, and geothermal. It supports the 
modernization of the electric grid and the advancement of carbon 
capture and sequestration technologies. And it helps reduce our 
dependence on oil by developing the next generation of biofuels and 
accelerating electric vehicle research and deployment to support the 
President's goal of putting 1 million electric vehicles on the road by 
2015. This includes a $200 million competitive program to encourage 
communities to invest in electric vehicle infrastructure.
    We're also focused on moving clean-energy technologies from the lab 
to the marketplace. Over the past 2 years, DOE's loan programs have 
supported more than $30 billion in loans, loan guarantees, and 
conditional commitments to guarantee loans for 28 clean-energy and 
enhanced automotive fuel efficiency projects across the country, which 
the companies estimate will create or save more than 61,000 jobs. 
Building on this success, we are requesting new credit subsidy that 
will support approximately $1 to $2 billion in loan guarantees for 
innovative renewable energy and energy efficiency technologies. These 
deployment efforts build on the substantial investment made in the 
clean-energy sector by the American Recovery and Reinvestment Act 
(ARRA), and are supplemented by tax incentives that have also played an 
important role in bringing clean-energy projects to market, such as the 
48C manufacturing tax credits and the 1603 cash grants in lieu of 
investment tax credits, which the 2012 budget also expands. We are also 
requesting $100 million in credit subsidy for a new ``Better Buildings 
Pilot Loan Guarantee Initiative for Universities, Schools, and 
Hospitals'', which will guarantee up to $2 billion in loans to support 
energy efficient retrofits.
    Nuclear energy also has an important role to play in our energy 
portfolio. To jumpstart the domestic nuclear industry, the budget 
requests up to $36 billion in loan guarantee authority. It also invests 
in the research and development (R&D) of advanced nuclear technologies, 
including small modular reactors (SMR).
                   supporting groundbreaking science
    To spur innovation, the President's budget request invests in basic 
and applied research and keeps us on the path to doubling funding for 
key science agencies, including DOE's Office of Science. As Norm 
Augustine, former chairman of Lockheed Martin and former Under 
Secretary of the Army, has said, underfunding R&D in a time of 
austerity is like removing the engine of an aircraft to reduce its 
weight.
    That is why the budget request increases support for DOE's 
comprehensive research strategy to accelerate energy breakthroughs.
    Through $5.4 billion for the Office of Science, we're expanding our 
investment in basic energy sciences, advanced scientific computing, and 
biological and environmental sciences--all key areas for our future 
economic competitiveness.
    The budget invests $550 million in the Advanced Research Projects 
Agency-Energy, (ARPA-E). The administration also seeks an additional 
$100 million for ARPA-E from the Wireless Innovation Fund to support 
wireless clean-energy technologies. This investment will allow ARPA-E 
to continue the promising early stage research projects that aim to 
deliver game-changing clean-energy technologies. ARPA-E's projects are 
generating excitement both in DOE and in the private sector. For 
example, through a combined total of $24 million from ARPA-E, six 
companies have been able to advance their research efforts and show the 
potential viability of their cutting-edge technologies. This extremely 
valuable early support enabled those companies to achieve R&D 
milestones that, in turn, have attracted more than $100 million in 
private sector funds to the projects. This is precisely the innovation 
leverage that is needed to win the future.
    Another key piece of our research effort is the Energy Innovation 
Hubs. Through the Hubs, we are bringing together our Nation's top 
scientists and engineers to achieve similar game-changing energy goals, 
but where a concentrated effort over a longer time horizon is needed to 
establish innovation leadership. DOE has established three Energy 
Innovation Hubs in the areas of energy efficient buildings, modeling, 
and simulation for nuclear reactors, and fuels from sunlight. The 
budget requests $146 million to support the three existing Hubs and to 
establish three new Hubs in the areas of batteries and energy storage, 
smart grid technologies and systems, and critical materials. The Energy 
Innovation Hubs were modeled after DOE's BioEnergy Institutes, which 
have established an outstanding 3-year track record.
    Finally, the budget continues to support the Energy Frontier 
Research Centers (EFRCs), which are mostly university-led teams working 
to solve specific scientific problems that are blocking clean-energy 
development.
    The Energy Innovation Hubs, ARPA-E, and EFRCs represent three 
complementary approaches to advance groundbreaking discovery. When you 
think of the EFRCs, think about a collaborative team of scientists such 
as Watson and Crick unlocking the secrets of DNA. When you think of 
ARPA-E, think about visionary risk-takers launching new technologies 
and start-up companies out of their garages. When you think of the 
Hubs, think of large, mission-oriented research efforts such as the 
Manhattan Project, the development of radar at MIT's Radiation 
Laboratory during World War II and the research in America's great 
industrial laboratories in their heyday.
    We don't know where the big energy breakthroughs are going to come 
from. To reach our energy goals, we must take a portfolio approach to 
R&D: pursuing several research strategies that have proven to be 
successful in the past. But I want to be clear--this is not a ``kitchen 
sink'' approach. This work is being coordinated and prioritized, with a 
360-degree view of how these pieces fit together. Taken together, these 
initiatives will help America lead in science and technology 
innovation.
                      nuclear safety and security
    In addition to strengthening our economy, the budget request also 
strengthens our security by providing $11.8 billion for DOE's National 
Nuclear Security Administration (NNSA). The 5-year fiscal year 2012 to 
fiscal year 2016 request of nearly $65 billion for NNSA reflects the 
President's nuclear security priorities, as well as his commitment to 
modernize the U.S. nuclear weapons enterprise and sustain a strong 
nuclear deterrent for the duration of the New Strategic Arms Reduction 
Treaty (New START) and beyond.
    The request of $7.6 billion for weapons activities provides a 
strong basis for transitioning to a smaller yet still safe, secure and 
effective nuclear stockpile without additional nuclear testing. It also 
provides much-needed resources to strengthen science, technology, and 
engineering capabilities and to modernize the physical infrastructure 
of our nuclear security enterprise.
    The President has identified the danger of terrorists getting their 
hands on nuclear weapons or the material to build them as the greatest 
threat to global security. To support the President's goal of securing 
all vulnerable nuclear material around the world in 4 years, the budget 
invests $2.5 billion in the NNSA Defense Nuclear Nonproliferation 
program. This is part of a 5-year, $14.2 billion commitment for the 
program.
    The budget also requests $1.2 billion to support the Navy's nuclear 
powered submarines and aircraft carriers. And it provides $6.1 billion 
to protect public health and safety by cleaning up the Nation's cold 
war nuclear legacy.
                         fiscal responsibility
    Through our investments, we are laying the groundwork for the 
Nation's future prosperity and security. At the same time, we are 
mindful of our responsibility to the taxpayer.
    We are cutting back in multiple areas, including eliminating 
unnecessary fossil fuel subsidies, reducing funding for the fossil 
energy program and reducing funding for the hydrogen technology 
program. We're streamlining operations to reduce administrative costs. 
And we're making some painful cuts, including ending operation of the 
Tevatron accelerator and freezing salaries and bonuses for hard-working 
National Laboratory, site and facility management contractor employees.
    Finally, we continue to make progress on a management excellence 
agenda to improve our operations.
           highlights of the fiscal year 2012 budget request
    In his State of the Union Address, President Obama said that 
America faces ``our generation's Sputnik moment'' and that we need to 
out-innovate, out-educate, and out-build the rest of the world to 
capture the jobs of the 21st century. ``In America, innovation doesn't 
just change our lives. It's how we make our living.'' Through 
innovation in promising areas like clean energy, the United States will 
win the future and create new industries and new jobs. To lead in the 
global clean-energy economy, we must mobilize America's innovation 
machine in order to bring technologies from the laboratory to the 
marketplace. DOE is on the front lines of this effort. To succeed, DOE 
will pursue game-changing breakthroughs, invest in innovative 
technologies, and demonstrate commercially viable solutions.
    In addition to energy advances that spark economic growth, national 
security remains fundamental to the Department's mission. Through 
bipartisan ratification of the New START treaty with Russia, America, 
and its global partners are leading by example in implementing the 
focused expansion of domestic and international activities to reduce 
the threat of nuclear weapons, nuclear proliferation, and unsecured or 
excess weapons-usable materials. The NNSA supports the international 
effort to secure all vulnerable nuclear materials around the world 
within 4 years. The NNSA also fulfills the President's commitment to 
modernize the Nation's nuclear stockpile until a world without nuclear 
weapons can be realized.
    DOE's fiscal year 2012 budget request is $29.5 billion, an 11.8 
percent or $3.1 billion increase from fiscal year 2010 current 
appropriation levels. The fiscal year 2012 request supports the 
President's goals to increase America's competitiveness by making 
strategic investments in our Nation's clean-energy infrastructure and 
to strengthen our national security by reducing the global threat of 
nuclear materials. The President has called for advancing research on 
clean-energy technologies and manufacturing, doubling the share of 
electricity generated from clean-energy supplies by 2035, and putting 1 
million electric vehicles on the road by 2015. DOE's request prepares 
for a multi-year effort to address these interconnected objectives and 
prioritizes R&D of renewable energy technologies to expand sustainable 
energy options for the United States.
    The fiscal year 2012 budget builds on the intense planning, 
execution, and oversight of the $35.2 billion from ARRA. By the end of 
fiscal year 2010, DOE successfully obligated $32.7 billion of ARRA 
funds, including all funding that was set to expire. In developing the 
fiscal year 2012 budget request, the DOD has taken these investments 
into account and will oversee execution of these funds with value to 
the taxpayer in mind. ARRA investments are focused on:
  --energy conservation and renewable energy sources ($16.8 billion);
  --environmental cleanup ($6 billion);
  --loan guarantees for renewable energy and electric power 
        transmission projects ($2.4 billion);
  --grid modernization ($4.5 billion);
  --carbon capture and sequestration ($3.4 billion);
  --basic science research ($1.6 billion); and
  --the ARPA-E ($0.4 billion).
    DOE's ARRA activities are strengthening the economy by providing 
much-needed investment, saving or creating tens of thousands of jobs, 
cutting carbon pollution, and reducing U.S. dependence on oil.
    The President's fiscal year 2012 budget supports three strategic 
priorities:
      Transformational Energy.--Accelerate the transformation to a 
        clean-energy economy and secure U.S. leadership in clean-energy 
        technologies.
      Economic Prosperity.--Strengthen U.S. science and engineering 
        efforts to serve as a cornerstone of our economic prosperity 
        and lead through energy efficiency and secure forms of energy.
      Nuclear Security.--Enhance nuclear security through defense, 
        nonproliferation, naval reactors, and environmental clean-up 
        efforts.
    As the President has articulated, innovation is essential to 
America's economic competitiveness. To meet the challenge of ``our 
generation's Sputnik moment'', DOE supports a coordinated strategy for 
research and development across all of its programs. With every 
initiative DOE undertakes, sound science is at the core. In fiscal year 
2012, we will increasingly emphasize cross-cutting initiatives to link 
science throughout DOE, specifically with energy and national security 
programs in order to deliver results to the American taxpayer. In the 
Office of Science, the Department requests $5.4 billion, a 9.1 percent 
or $452 million increase more than the fiscal year 2010 current 
appropriation levels, to support an elevated focus on the advancement 
of the United States' leadership in fundamental research. ARPA-E is 
building on established gains since its initial funding in fiscal year 
2009 through the ARRA to perform transformational research and create 
game-changing breakthroughs for eventual market adoption. The fiscal 
year 2012 budget request includes $550 million for ARPA-E to sustain 
investment in new energy technologies.
    Energy Innovation Hubs play a key role in solving specific energy 
challenges by convening and focusing top scientific and engineering 
talent to focus on those problems. The Hubs bring together 
multidisciplinary teams of researchers in an effort to speed research 
and shorten the path from scientific discovery to technological 
development and commercial deployment of highly promising energy-
related technologies. DOE is proposing to double its commitment to this 
research approach by requesting three new Hubs to focus on batteries 
and energy storage, critical materials, and Smart Grid technologies and 
systems. DOE will continue funding the three Energy Innovation Hubs 
introduced in fiscal year 2010 to focus on developing fuels that can be 
produced directly from sunlight, improving energy efficient building 
systems design, and using modeling and simulation tools to create a 
virtual model of an operating advanced nuclear reactor. Complementing 
the Hubs, DOE plans in fiscal year 2012 to continue coordination with 
the Office of Science's EFRCs, which exemplify the pursuits of broad-
based science challenges for energy applications.
Energy Security--Promoting America's Energy Security Through Reliable, 
        Clean, and Affordable Energy
    In his State of the Union Address, the President outlined clearly 
to the American people his roadmap for transforming our Nation's energy 
economy to meet the demands of future generations. ``Instead of 
subsidizing yesterday's energy, let's invest in tomorrow's'', he said. 
To meet the President's challenge, DOE must recruit the sharpest 
research minds and build on its aggressive discovery agenda across all 
programs to achieve breakthroughs on the most-pressing energy 
challenges facing the United States.
    In his address, President Obama laid out a goal for clean-energy 
sources to account for 80 percent of America's electricity by 2035. In 
fiscal year 2012, DOE requests funds to help achieve this Presidential 
objective and address many of the energy delivery challenges facing 
American families and energy providers.
    Applied Research, Development, and Deployment.--Meeting the 
President's goal of making America the first country to have 1 million 
electric vehicles on the road by 2015, DOE will research cost-
competitive methods to develop electric vehicles, increase the 
adaptability and capacity of the grid to enable vehicle charging, 
incentivize communities to invest in electric vehicles and 
infrastructure and send these vehicles to the Nation's roadways. DOE 
will also launch competitive manufacturing research for breakthrough 
technologies in energy efficiency diagnostics and retrofits to help 
business owners around the country save money on energy costs.
    Loan Guarantees.--The Loan Programs Office (LPO) is a vital tool 
for promoting innovation in the energy sector across a broad portfolio 
of clean and efficient energy technologies. In fiscal year 2012, DOE is 
requesting credit subsidies to support approximately $1 to $2 billion 
in loan guarantees for renewable energy deployment and up to $36 
billion in additional authority to loan guarantees for nuclear power 
projects. DOE will also continue to streamline and prioritize the 
issuance of loan guarantees to leverage private sector investment in 
clean-energy and energy efficiency projects that will save and create 
jobs.
    Better Buildings Initiative.--Last year, commercial buildings 
consumed roughly 20 percent of all energy in the U.S. economy. 
Improving energy efficiency in our buildings can create jobs, save 
money, reduce our dependence on oil, and make our air cleaner. The 
President's Better Buildings Initiative will make commercial buildings 
20 percent more energy efficient over the next decade through 
initiatives that include:
  --re-designing the current tax deduction for commercial buildings and 
        upgrades to a credit that is more generous and that will 
        encourage building owners and real estate investment trusts 
        (REITs) to retrofit their properties;
  --improving financing opportunities for retrofits through programs 
        including a new Better Buildings Pilot Loan Guarantee 
        Initiative for Universities, Schools and Hospitals, for which 
        DOE requests $100 million in credit subsidy to guarantee up to 
        $2 billion in loans for energy efficiency retrofits for these 
        facilities;
  --creating a $100 million Race to Green competitive grant program for 
        State and municipal governments to implement innovative 
        approaches to building codes, performance standards, and 
        regulations so that commercial building efficiency will become 
        the norm in communities across the country; and
  --calling on CEOs and university presidents to join DOE and other 
        Federal partners in a Better Buildings Challenge to make their 
        organizations leaders in saving energy.
    The Better Buildings Initiative builds on our investments through 
ARRA and our continued commitment to passing ``HOMESTAR'' legislation 
to encourage American families to make energy saving upgrades in their 
homes.
    Electricity Reliability and Energy Management.--Reliable, 
affordable, efficient, and secure electric power is vital to expanding 
economic recovery, protecting critical infrastructures, and enabling 
the transition to renewable energy sources. The fiscal year 2012 
request invests $238 million to bring the next generation of grid 
modernization technologies closer to deployment and commercialization, 
to assist States and regional partners in grid modernization efforts, 
and to facilitate recovery from energy supply disruptions when they 
occur. The request includes a new Smart Grid Technology and Systems Hub 
that will address the total electricity system, covering applied 
science, technology, economic, and policy issues that affect our 
ability to modernize the grid. The fiscal year 2012 request also plans 
an expansion of the Home Energy Score program that provides homeowners 
with information on how their homes can be more energy efficient and 
guidance for saving on home energy costs. This is in addition to the 
President's support for passage of the HOMESTAR rebate program in 2011.
    Investing in energy efficiency, renewable energy generation, and 
grid modernization are fundamental steps necessary for creating a 
clean-energy economy. We must also invest in the improvement of 
existing sources of energy that will provide a bridge between current 
and future technologies. These technologies are already a major segment 
of the energy mix and will play a critical role in providing a solid 
foundation that will make possible the creation of a new energy 
economy.
    Leadership in Nuclear Energy.--Nuclear energy currently supplies 
approximately 20 percent of the Nation's electricity and 70 percent of 
the Nation's clean, noncarbon electricity. The request for the Office 
of Nuclear Energy includes $380 million for R&D, in addition to key 
investments in supportive infrastructure. In addition, DOE is engaging 
in cost-shared activities with industry that may help accelerate 
commercial deployment of SMRs. The request includes funding for cost-
shared design certification and licensing activities for SMRs, the 
deployment of which holds promise for vastly increasing the generation 
of clean energy on a cost competitive basis. DOE will also promote 
nuclear power through the Loan Guarantee program, which is requesting 
up to $36 billion in additional loan guarantee authority in fiscal year 
2012.
    Advanced Fossil Energy--Experience in Carbon Capture and Storage.--
The world will continue to rely on coal-fired electrical generation to 
meet energy demand. It is imperative that the United States develop the 
technology to ensure that base-load electricity generation is as clean 
and reliable as possible. The Office of Fossil Energy requests $452.9 
million for R&D of advanced coal-fueled power systems and carbon 
capture and storage technologies. The budget focuses resources within 
the fossil energy program on activities that can reduce carbon 
pollution and have potential benefits for both the existing fleet and 
new power plants--specifically, postcombustion capture R&D and geologic 
carbon storage R&D.
    Ending Tax Subsidies to Fossil Fuel Producers.--In accordance with 
the President's agreement at the G-20 Summit in Pittsburgh to phase out 
subsidies for fossil fuels so that we can transition to a 21st century 
energy economy, the administration proposes to repeal a number of tax 
preferences available for fossil fuels. Tax subsidies proposed for 
repeal include, but are not limited to:
  --the credit for oil and gas produced from marginal wells;
  --the deduction for costs paid or incurred for any tertiary injectant 
        used as part of a tertiary oil recovery method; the ability to 
        claim the domestic manufacturing deduction against income 
        derived from the production of oil and gas and coal; and
  --expensing the exploration and development costs for coal.
    Improving Energy Information.--Because of the central connection 
between energy and the U.S. economy, the Nation's leaders, energy 
markets, producers, manufacturers and consumers need reliable, timely, 
impartial, and transparent information, and analyses. Such information 
enhances the debate over energy utilization strategies, the development 
of alternative energy sources, and investment decisions, and is 
essential during times of energy ``shocks''. The EIA requests $124 
million to update its energy data collection and analysis programs to 
reflect the current industry composition and operation in order to 
continue to provide a comprehensive picture of energy markets and 
industry as a whole. The request places a special emphasis on providing 
better data on energy consumption in homes, commercial buildings, and 
manufacturing establishments to enable EIA to maintain the high-quality 
of the information needed to inform decisions by the private sector, by 
Government policymakers, and by households.
Economic Security--Sharpening America's Competitive Edge Through a 
        Clean-Energy Economy
    To meet ``our generation's Sputnik moment'' and promote economic 
competitiveness, the United States must demonstrate leadership in 
clean-energy technologies. ``We'll invest in biomedical research, 
information technology and especially clean-energy technology--an 
investment that will strengthen our security, protect our planet, and 
create countless new jobs for our people'', said President Obama before 
the Congress in the State of the Union Address. President Obama 
outlined his comprehensive vision to lead our Nation's clean-energy 
economy and provide economic security to Americans. As the 
administration seeks to reduce Federal Government spending, DOE 
recognizes its role and has tightened its expenditures in several areas 
such as oil and natural gas. The fiscal year 2012 budget request 
acknowledges DOE's missions to achieve these imperative goals while 
setting forth a clean-energy economy for entrepreneurs and 
manufacturers to reclaim their competitive edge in clean-energy 
innovation.
    DOE plans to promote economic security by building on the progress 
made through the more than $32 billion in grants and contracts under 
ARRA, which made historic investments in the Nation's economy and has 
put the country on target to double renewable energy generation by 
2012. ARRA helped create tens of thousands of jobs and, combined with 
the fiscal year 2012 request, will help DOE accelerate the transition 
of our Nation to a clean-energy economy.
    The President's fiscal year 2012 budget supports the plan to 
rebuild our economy through clean-energy research and development by:
      Expanding ARPA-E To Spur Innovation.--The President's request 
        proposes $550 million for the ARPA-E program, plus an 
        additional $100 million for the program from the Wireless 
        Innovation and Infrastructure initiative for a total of $650 
        million. ARPA-E performs transformational and cutting-edge 
        energy research with real-world applications in areas ranging 
        from grid technology and power electronics to batteries and 
        energy storage. The budget also supports programs with 
        significant promise to provide reliable, sustainable energy 
        across the country, such as the SunShot initiative aimed at 
        making solar energy cost competitive. With focused investment 
        in manufacturing innovation and industrial technical 
        efficiencies, the President's proposal will move private sector 
        capital off the shelves and into the marketplace.
      Targeting Investments for Future Economic Growth.--To secure a 
        competitive advantage in high-tech industries and maintain 
        international leadership in scientific computing, we will 
        invest in core research activities for energy technologies, the 
        development of general biological design principles and new 
        synthetic molecular toolkits to improve understanding of 
        natural systems, and core research activities to advance the 
        frontiers of high-performance computing. Underlying these 
        investments in research is the education and training of 
        thousands of scientists and engineers who contribute to the 
        skilled scientific workforce needed for a 21st century 
        innovation economy.
      Doubling the Number of Energy Innovation Hubs To Solve Key 
        Challenges.--Innovation breakthroughs occur when scientists 
        collaborate on focused problems. The fiscal year 2012 budget 
        request proposes three new Energy Innovation Hubs that will 
        bring top American scientists to work in teams on critical 
        energy challenges in areas such as critical materials, 
        batteries and energy storage, and Smart Grid technologies. 
        These will join three existing Hubs that focus on fuel 
        generation from sunlight, building efficiency, and nuclear 
        reactor modeling and simulation.
      Integrating Research and Development.--DOE has identified areas 
        where coordinated work by discovery-oriented science and 
        applied energy technology programs hold the greatest promise 
        for progress in achieving our energy goals. The Energy Systems 
        Simulation to increase the efficiency of the Internal 
        Combustion Engine (ICE) will produce a set of modern, validated 
        computer codes that could be used by design engineers to 
        optimize the next generation of cleaner, more efficient 
        combustion engines. An initiative on extreme environments will 
        close the gap between actual and ideal performance of materials 
        in nuclear environments. And DOE's Exascale Computing 
        initiative will allow DOE to take the lead in developing the 
        next generation of scientific tools and to advance scientific 
        discoveries in solving practical problems.
      Pursuing the Passage of HOMESTAR.--Enactment of this program will 
        create jobs by providing strong short-term incentives for 
        energy efficiency improvements in residential buildings. The 
        HOMESTAR program has the potential to accelerate our economic 
        recovery by boosting demand for energy efficiency products and 
        installation services. The program will provide rebates of 
        $1,000 to $3,000 per household to encourage immediate 
        investment in energy-efficient appliances, building mechanical 
        systems and insulation, and whole-home energy efficiency 
        retrofits. This program will help middle-class families save 
        hundreds of dollars a year in energy costs while improving the 
        comfort and value of their most important investment--their 
        homes. In addition, the program would help reduce our economy's 
        dependence on fossil fuels and support the development of an 
        energy efficiency services sector in our economy.
      Extending Access to Tax Credit and Tax Grant Programs.--Two 
        provisions of ARRA have been extraordinarily successful in 
        spurring the deployment of renewable energy projects and 
        building advanced manufacturing capabilities:
        --section 48C Advanced Energy Manufacturing Tax Credit program; 
        and
        --the section 1603 Energy Cash Assistance program.
      The administration is pursuing an additional $5 billion in 
        support for the section 48C program, which, by providing a 30 
        percent tax credit for energy manufacturing facilities, will 
        continue to help build a robust high-technology, U.S. 
        manufacturing capacity to supply clean-energy projects with 
        U.S.-made parts and equipment. The section 1603 tax grant 
        program has created tens of thousands of jobs in industries 
        such as wind and solar by providing upfront incentives to 
        thousands of projects. The administration is seeking a 1-year 
        extension of this program.
      Promoting Efficient Energy Use in Our Everyday Lives.--Currently, 
        weatherization of more than 300,000 homes of low-income 
        families has been achieved, providing energy cost savings and 
        financial relief to households. The fiscal year 2012 request of 
        $320 million continues residential weatherization, while 
        increasing the focus on new innovative approaches to 
        residential home weatherization.
National Security--Securing Nuclear and Radiological Materials, 
        Maintaining Nuclear Deterrence, and Advancing Responsible 
        Legacy Cleanup
    A pillar of President Obama's national security agenda for the 
United States is to eliminate the global threat posed by nuclear 
weapons and prevent weapons-usable nuclear material from falling into 
the hands of terrorists. As part of this agenda, the administration and 
the Congress worked tirelessly toward the December 2010 bipartisan 
ratification of New START with Russia, which cuts the number of 
strategic nuclear weapons each country can deploy to 1,550. After 
signing this agreement in April 2010, President Obama said, ``In many 
ways, nuclear weapons represent both the darkest days of the cold war, 
and the most troubling threats of our time. Today, we've taken another 
step forward . . . in leaving behind the legacy of the 20th century 
while building a more secure future for our children. We've turned 
words into action. We've made progress that is clear and concrete. And 
we've demonstrated the importance of American leadership--and American 
partnership--on behalf of our own security, and the world's.''
    DOE's NNSA, through work with global partners and efforts to secure 
vulnerable nuclear materials, achieved significant milestones during 
fiscal year 2010 and fiscal year 2011 to reduce the risk of 
proliferation and leverage science to maintain our Nation's nuclear 
deterrence. Additionally, the environmental management program made 
progress advancing responsible nuclear cleanup from the cold war. DOE's 
fiscal year 2012 request seeks to build upon these successes and 
advance the President's nuclear security agenda.
            Reduce the Risk of Proliferation
    In 2009, President Obama committed the United States to an 
international effort to secure vulnerable nuclear material worldwide in 
4 years. To solidify international support for this effort, and to 
address the threat of nuclear terrorism, the President convened leaders 
from 47 countries at the Washington nuclear security summit in April 
2010. The summit resulted in a communique which stated, ``Nuclear 
terrorism is one of the most challenging threats to international 
security, and strong nuclear security measures are the most effective 
means to prevent terrorists, criminals, or other unauthorized actors 
from acquiring nuclear materials.''
    The fiscal year 2012 budget for the NNSA Defense Nuclear 
Nonproliferation program will help advance further work that is needed 
to meet the goals of President Obama and the nuclear security summit, 
recognizing the urgency of the threat and making the full commitment to 
global cooperation on nonproliferation. The budget provides $2.5 
billion in fiscal year 2012, and $14.2 billion through fiscal year 2016 
to detect, secure, and dispose of dangerous nuclear and radiological 
material worldwide. This request is a decrease of 5 percent, or $138 
million, from the fiscal year 2011 request, which reflects completion 
of accelerated efforts to secure vulnerable nuclear materials within 
the President's stated timeframe. The decrease also reflects our 
decision to await agreement between the United States and Russia on 
detailed implementation milestones prior to requesting additional U.S. 
pledged funding to support Russian plutonium disposition. The fiscal 
year 2012 budget request follows through on securing vulnerable 
materials and supports efforts to design new technologies in support of 
treaty monitoring and verification, which will contribute to 
implementation of New START. The budget also broadens cooperative 
nonproliferation initiatives with foreign governments and international 
organizations in support of the President's objective of a world 
without nuclear weapons. The budget continues the provision of security 
upgrades at selected sites, both within the United States and in 
foreign countries, to address outsider and insider threats, and 
accelerates the pace of research reactor conversions from use of highly 
enriched uranium fuel to low-enriched uranium fuel.
            Leverage Science To Maintain Nuclear Deterrence
    The fiscal year 2012 budget request advances DOE's commitment to 
the national security interests of the United States through 
stewardship of a safe, secure and effective nuclear weapons stockpile 
without the use of underground nuclear testing. The 2010 Nuclear 
Posture Review Report calls for the United States to reduce nuclear 
force levels. As the United States begins the reduction required by New 
START, the science, technology, and engineering capabilities and 
intellectual capacity within the nuclear security enterprise become 
more critical to sustaining the U.S. nuclear deterrent. NNSA continues 
to emphasize these capabilities, including functioning as a national 
science, technology, and engineering resource to other agencies with 
national security responsibilities. Through the NNSA, DOE requests $7.6 
billion for the weapons activities appropriation, an 8.9 percent, or 
$621 million, increase from the President's fiscal year 2011 request. 
It also is an 18.9 percent, or $1.205 million increase from the fiscal 
year 2010 enacted appropriation. This increase reflects an investment 
strategy that provides a strong basis for transitioning to a smaller 
yet still safe, secure, and effective nuclear stockpile without 
additional nuclear testing, strengthening the science, technology and 
engineering base, modernizing the physical infrastructure, and 
streamlining the enterprise's physical and operational footprint. These 
investments will further enable the Nuclear Posture Review's 
comprehensive nuclear defense strategy, based on current and projected 
global threats that rely less on nuclear weapons, while strengthening 
the Nation's nuclear deterrent through completing major stockpile 
system life extensions, stabilizing the science, technology and 
engineering base, and modernizing the infrastructure.
    The Naval Reactors program ensures the safe and reliable operation 
of reactor plants in nuclear-powered submarines and aircraft carriers, 
constituting 45 percent of the U.S. Navy's combatants. The fiscal year 
2012 request for Naval Reactors of $1.2 billion, is an increase of 
$83.2 million or 7.8 percent more than the fiscal year 2011 request and 
$209 million or 18.1 percent above the fiscal year 2010 enacted 
appropriation. Funding for this program is ramping up for reactor 
design and development efforts for the Ohio Class replacement submarine 
($121 million), refueling of the Land-Based Prototype ($99.5 million), 
and recapitalization of the naval spent nuclear fuel infrastructure for 
the Spent Fuel Handling Recapitalization program ($53.8 million) at the 
Naval Reactors Facility located at the Idaho National Laboratory.
            Advance Responsible Environmental Cleanup
    The fiscal year 2012 budget includes $6.13 billion for the Office 
of Environmental Management (EM), to protect public health and safety 
by cleaning up hazardous, radioactive legacy waste from the Manhattan 
Project and the cold war. This funding will allow the program to 
continue to accelerate cleaning up and closing sites, focusing on 
activities with the greatest risk reduction. Acceleration of cleaning 
up sites where funding would have immediate impact was established as 
the overarching objective of the $6 billion in ARRA funding. EM will 
use the remaining $309 million of ARRA funding during fiscal year 2012 
as it completes footprint reduction and near-term completion clean-up 
activities.
    As DOE continues to make progress in completing environmental 
cleanup, the fiscal year 2012 budget request of $170 million for the 
Office of Legacy Management supports DOE's long-term stewardship 
responsibilities and payment of pensions and benefits for former 
contractor workers after site closure.
             doe fiscal year 2012 program office highlights
Office of Science--Invest in the Building Blocks of American Innovation
    DOE's Office of Science (SC) delivers scientific discoveries and 
major scientific tools to transform our understanding of energy and 
matter and advance the energy, economic, and national security of the 
United States. SC is the largest Federal sponsor of basic research in 
the physical sciences, supporting programs in areas such as physics, 
chemistry, biology, environmental sciences, applied mathematics, and 
computational sciences. In fiscal year 2012, DOE requests $5.4 billion, 
an increase of 9.1 percent more than the fiscal year 2010 current 
appropriation, to invest in basic research. The fiscal year 2012 
request supports the President's Strategy for American Innovation, and 
is consistent with the goal of doubling funding at key basic research 
agencies, including the SC. The fiscal year 2012 SC budget request 
supports the following objectives from the Strategy, including:
  --Unleash a clean-energy revolution;
  --Strengthen and broaden American leadership in fundamental research;
  --Develop an advanced information technology ecosystem; and
  --Educate the next generation with 21st century skills and create a 
        world-class workforce.
    In fiscal year 2012, SC continues to support fundamental research 
for scientific discovery, but today our country needs to move strongly 
to solve our energy problems. Therefore, the central theme of this 
year's budget in SC is research in new technologies for a clean-energy 
future that address competing demands on our environment. These 
efforts, coordinated with DOE applied technology programs and with 
input from the scientific community and industry, will emphasize 
research underpinning advances in noncarbon-emitting energy sources, 
carbon capture and sequestration, transportation and fuel switching, 
transmission and energy storage, efficiency, and critical materials for 
energy applications.
    In the area of advancing noncarbon energy sources, the fiscal year 
2012 budget request will provide for new investments in the science of 
interfaces and degradation relevant to solar photovoltaics, basic 
actinide chemistry research related to advanced nuclear fuel cycles, 
and research in materials under extreme environments relevant to 
extreme nuclear technology environments, and genomics-based research on 
biological design principles and synthetic biology tools to underpin 
bio-based energy solutions. Carbon capture and sequestration research 
will focus on novel molecular design for materials and multiscale 
dynamics of flow and plume migration, respectively. SC will initiate an 
energy systems simulation research effort focused on predictive 
modeling of combustion in an evolving fuel environment in support of 
DOE's efforts in transportation and alternative fuels. Also 
underpinning transportation and fuel switching, as well as energy 
storage, the fiscal year 2012 request will support an Energy Innovation 
Hub for Batteries and Energy Storage. The Fuels from Sunlight Hub, 
established in fiscal year 2010, as well as the EFRCs and DOE Bioenergy 
Research Centers also continue. Research in enabling materials sciences 
will support needs of future electricity transmission systems and novel 
building materials to improve building efficiencies.
    The fiscal year 2012 budget request also provides for foundational 
science in condensed matter and materials physics, chemistry, biology, 
climate and environmental sciences, applied mathematics, computational 
and computer science, high-energy physics, nuclear physics, plasma 
physics, and fusion energy sciences; and provides for research 
facilities and capabilities that keep U.S. researchers at the forefront 
of science. The fiscal year 2012 request supports targeted increases in 
areas such as computational materials and chemistry by design, 
nanoelectronics, and advanced scientific applications and integrated 
application hardware-software co-design for exascale, which position 
the United States to secure a competitive advantage in high-tech 
industries and maintain international leadership in scientific 
computing. Underlying these investments is the education and training 
of thousands of scientists and engineers who contribute to the skilled 
scientific workforce needed for the 21st century innovation economy.
    The SC supports investigators at about 300 academic institutions 
and from all of DOE laboratories. More than 26,000 researchers from 
universities, national laboratories, industry, and international 
partners are expected to use the SC scientific user facilities in 
fiscal year 2012.
ARPA-E--Transformational Research and Development
    The fiscal year 2012 budget request includes $550 million for the 
ARPA-E plus an additional $100 million for the program from the 
Wireless Innovation and Infrastructure Initiative for a total of $650 
million. ARPA-E was launched in fiscal year 2009 to sponsor specific 
high-risk and high-payoff transformational R&D projects that overcome 
the long-term technological barriers in the development of energy 
technologies to meet the Nation's energy challenges, but that industry 
will not support at such an early stage. An essential component of 
ARPA-E's culture is an overarching focus on accelerating science to 
market. Beyond simply funding transformational research creating 
revolutionary technologies, ARPA-E is dedicated to the market adoption 
of those new technologies that will fuel the economy, create new jobs, 
reduce energy imports, improve energy efficiency, reduce energy-related 
emissions, and ensure that the United States maintains a technological 
lead in developing and deploying advanced energy technologies.
Office of Energy Efficiency and Renewable Energy--Investing in 
        Breakthrough Technology and a Clean-Energy Future
    The Office of Energy Efficiency and Renewable Energy (EERE) 
supports research, development, demonstration, and deployment 
activities on technologies and practices essential for meeting national 
security goals by reducing dependence on oil, meeting environmental 
goals by minimizing the emissions associated with energy production and 
use, and stimulating economic growth and job creation by minimizing the 
cost of energy services. The EERE portfolio emphasizes work areas where 
the potential impact is largest, where Federal funds are most critical. 
It balances investments in high-risk research with partnerships with 
private firms that speed the translation of innovations into practical 
business opportunities. The diverse set of technologies supported helps 
ensure that the United States has many options for meeting its energy 
goals. Program management is designed to identify the best groups in 
the country to address these challenges and supports work in 
universities, companies, national laboratories, and consortia.
    The fiscal year 2012 budget request of $3.2 billion, the increase 
of 44.4 percent more than the fiscal year 2010 current appropriation, 
is aimed at accelerating innovation and change in the Nation's energy 
economy. The request includes programs associated with meeting the 
President's goals of investing in the next generation of clean-energy 
technologies, vehicles and fuels, and energy efficiency measures that 
reduce energy use in Federal agencies and the industrial and building 
sectors.
            Clean, Renewable Energy Generation
    The fiscal year 2012 budget request continues to work to transform 
the Nation's energy infrastructure by investing more than $1,164.9 
million in a variety of renewable programs including:
  --solar ($457 million);
  --wind ($126.9 million);
  --water ($38.5 million);
  --hydrogen ($100.5 million);
  --biomass ($340.5 million); and
  --geothermal ($101.5 million).
    Research, development, and deployment of these technologies will 
reduce the production of greenhouse gas emissions and revitalize an 
economy built on the next generation of domestic production. The 
request includes the solar SunShot program which will invest in 
transformative research focusing on achieving radical cost reductions 
in photovoltaic modules, balance of systems, and power electronics.
            Energy Efficiency
    DOE implements a number of efforts to increase energy efficiency in 
homes, transportation, and industry. The fiscal year 2012 budget 
requests $1,805.3 million to accelerate deployment of clean, cost-
effective, and rapidly deployable energy efficiency measures in order 
to reduce energy consumption in residential and commercial buildings, 
and the industrial and Federal sectors. DOE will invest $470.7 million 
in the Building Technologies program and $33 million for the Federal 
Energy Management program. Federal assistance for State-level programs 
such as:
  --State energy program ($63.8 million);
  --Tribal ($10 million); and
  --weatherization assistance program ($320 million) will continue to 
        help citizens implement energy efficiency measures, lower 
        energy costs and greenhouse gas emissions, and build a 
        technical workforce.
    For industry ($319.8 million), DOE will provide a balanced 
portfolio of advanced R&D and pursuit of near-term, low-cost 
opportunities with the objectives of increasing U.S. competitiveness, 
enhancing clean-energy manufacturing, and improving energy 
productivity. There will be a focus on next generation manufacturing 
processes and materials, activities for clean-energy manufacturing, and 
refocused efforts for Industrial Technical Assistance to achieve 
greater results with less funding through more effective leveraging of 
funding for deployment partnerships. A new Energy Innovation Hub on 
critical materials will be competed through the Industrial Technologies 
program. The fiscal year 2012 request also includes $588 million to 
accelerate research, development and deployment of advanced vehicle 
technologies, working in concert with biomass RD&D to reduce the use of 
petroleum and greenhouse gas emissions.
    Better Buildings Initiative for Commercial Energy Savings.--The 
President's Better Buildings Initiative is focused on achieving a 20 
percent improvement in commercial buildings' energy use by 2020. The 
initiative will include many new components to achieve this goal. The 
following are supported in DOE's fiscal year 2012 request: launch of 
the Race to Green competitive grant program for States and municipal 
governments to encourage higher standards for commercial energy 
efficiency, which is funded within the Buildings Technologies program; 
a new pilot loan guarantee program to support energy efficiency 
retrofits for buildings that serve as community assets; and increased 
R&D funding for building technologies. The Department intends to work 
with the business and academic communities to make their organizations 
leaders in saving energy.
Office of Electricity Delivery and Energy Reliability--Enabling a 
        Clean-Energy Economy
    The Office of Electricity Delivery and Energy Reliability (OE) is 
responsible for leading national efforts to modernize the electric 
grid, enhance the security of energy infrastructure, and facilitate 
recovery from disruptions to the energy supply. DOE's fiscal year 2012 
budget request for OE of $238 million, a 38 percent increase more than 
the fiscal year 2010 appropriation, represents a clear and determined 
effort to accelerate the transformation of one of the Nation's key 
enablers of a clean-energy economy--the electricity delivery system.
    The U.S. electricity delivery system was built on technology that 
was developed early in the 20th century and designed for the demands 
and challenges of that era. Today, this aging and often congested 
system is facing many new and complex challenges that require 
considerable improvements in the physical and technological components 
of the system. In order to alleviate the stress on the system from 
increasing demand for electricity and to enable greater use and 
integration of renewable and distributed resources, all while 
maintaining the reliability, security, and affordability of electric 
power, R&D breakthroughs and new energy management approaches are 
critical in the areas of transmission and distribution, energy storage, 
and cyber security.
    OE's fiscal year 2012 budget request provides $193 million for R&D 
in these critical areas to bring the next generation of grid 
technologies closer to deployment and commercialization. The increased 
investment reflects the President's vision and OE's role in competing 
in a worldwide technological race. As such, with $20 million in fiscal 
year 2012, OE will establish a new Energy Innovation Hub, or in the 
words of President Obama, one of ``the Apollo projects of our time''. 
The Smart Grid Technology and Systems Hub will bring together a 
diverse, multi-disciplinary group to develop an integrated approach to 
enhancing smart grid technologies and systems. OE will also expand its 
advanced modeling capabilities to include other system layers in order 
to provide a more in-depth system understanding. The energy storage 
program will expand to aggressively support the deployment of grid-
scale energy storage technologies with new demonstrations, and the 
cyber security program will continue to focus on the development and 
integration of secure control systems.
    The budget request continues to support Permitting, Siting, and 
Analysis (PSA) with $8 million to develop and improve policies, State 
laws, and programs that facilitate the development of electric 
infrastructure needed to bring new clean-energy projects to market, and 
to provide technical assistance to States and regions. It also supports 
Infrastructure Security and Energy Restoration (ISER) with $6.2 million 
to enhance the reliability and resiliency of critical energy 
infrastructure and to facilitate recovery from energy supply 
disruptions.
Office of Environmental Management--Meeting Commitments and Making 
        Progress
    The mission of EM is to complete the safe cleanup of the 
environmental legacy brought about from more than six decades of 
nuclear weapons development, production, and Government-sponsored 
nuclear energy research. This clean-up effort is the largest in the 
world, originally involving 2 million acres at 110 sites in 35 States, 
dealing with some of the most dangerous materials known to man.
    EM continues to pursue its clean-up objectives within the overall 
framework of achieving the greatest comparative risk reduction benefit 
and overlaying regulatory compliance commitments and best business 
practices to maximize cleanup progress. To support this approach, EM 
has prioritized its clean-up activities:
  --Activities to maintain a safe and secure posture in the EM complex;
  --Radioactive tank waste stabilization, treatment, and disposal;
  --Spent nuclear fuel storage, receipt, and disposition;
  --Special nuclear material consolidation, processing, and 
        disposition;
  --High-priority groundwater remediation;
  --Transuranic and mixed/low-level waste disposition;
  --Soil and groundwater remediation; and
  --Excess facilities deactivation and decommissioning.
    The fiscal year 2012 budget request for $6.13 billion will fund 
activities to maintain a safe and secure posture in the EM complex and 
make progress against program goals and compliance commitments by 
reducing the greatest risks to the environment and public health, using 
science and technology to reduce life-cycle costs, and reducing EM's 
geographic footprint by 90 percent by 2015. EM continues to move 
forward with the development of the capability for dispositioning tank 
waste, nuclear materials, and spent (used) nuclear fuel. The budget 
request includes the construction and operation of three unique and 
complex tank waste processing plants to treat approximately 88 million 
gallons of radioactive tank waste for ultimate disposal. It will also 
fund the solid waste disposal infrastructure needed to support disposal 
of transuranic and low-level wastes generated by high-risk activities 
and the footprint reduction activities.
    EM carries out its clean-up activities with the interests of 
stakeholders in mind. Most importantly, EM will continue to fulfill its 
responsibilities by conducting cleanup within a ``Safety First'' 
culture that integrates environment, safety, and health requirements 
and controls into all work activities to ensure protection to the 
workers, public, and the environment, and adheres to sound project and 
contract management principles. EM is also strengthening its project 
and planning analyses to better assess existing priorities and identify 
opportunities to accelerate clean-up work. Working collaboratively with 
the sites, EM continues to seek aggressive but achievable strategies 
for accelerating cleanup of discrete sites or segments of work. In 
addition, functional and cross-site activities such as elimination of 
specific groundwater contaminants, waste or material processing 
campaigns, or achievement of interim or final end-states are being 
evaluated.
    After the EM program completes cleanup and closure of sites that no 
longer have an ongoing DOE mission, postclosure stewardship activities 
are transferred to the Office of Legacy Management (LM). LM also 
receives sites remediated by the U.S. Army Corps of Engineers (Formerly 
Utilized Sites Remedial Action program) and private licensees (Uranium 
Mill Tailings Radiation Control Act, title II sites). Post closure 
stewardship includes long-term surveillance and maintenance activities 
such as groundwater monitoring, disposal cell maintenance, records 
management, and management of natural resources at sites where active 
remediation has been completed. At some sites the program includes 
management and administration of pension and post-retirement benefits 
for contractor retirees.
LPO--Helping Finance Clean-Energy Deployment
    Innovative Technology Loan Guarantee Program.--To encourage the 
early commercial deployment of new or significantly improved 
technologies in energy projects, DOE requests up to $36 billion in loan 
guarantee authority for nuclear power facilities and $200 million in 
appropriated credit subsidy to support an estimated $1 billion to $2 
billion in loans for renewable energy system and efficient end-use 
energy technology projects under section 1703 of the Energy Policy Act 
of 2005. The additional loan guarantee authority for nuclear power 
projects will promote deployment of new plants and support an 
increasing role for private sector financing. The additional credit 
subsidy will allow for investment in the innovative renewable and 
efficiency technologies that are critical to meeting the 
administration's goals for affordable, clean energy, technical 
leadership, and global competitiveness.
    The fiscal year 2012 budget also requests $38 million to evaluate 
applications received under the eight solicitations released to date 
and to ensure efficient and effective management of the Loan Guarantee 
program. This request is expected to be offset by collections from 
borrowers authorized under title XVII of the Energy Policy Act of 2005 
(Public Law 109-8).
    Advanced Technology Vehicle Manufacturing Program.--DOE requests $6 
million to support ongoing loan monitoring activities associated with 
the program mission of making loans to automobile and automobile part 
manufacturers for the cost of re-equipping, expanding, or establishing 
manufacturing facilities in the United States to produce advanced 
technology vehicles or qualified components, and for associated 
engineering integration costs.
    Better Buildings Pilot Loan Guarantee Initiative for Universities, 
Schools, and Hospitals.--To spur investment in energy efficiency 
retrofits for buildings which serve as assets to our communities, DOE 
requests $100 million for loan guarantee subsidy costs to support up to 
$2 billion in loan authority for universities, schools, and hospitals. 
This pilot program is one component of the President's Better Buildings 
Initiative and would fund cost-effective technologies and measures to 
assist universities, schools, and hospitals save on energy usage and 
associated energy costs. DOE also requests $5 million for 
administrative expenses to carry out the program. The request is 
subject to the enactment of legislation authorizing this program.
Office of Nuclear Energy--Investing in Energy Innovation and Technical 
        Leadership
    DOE is requesting $852.5 million for the Office of Nuclear Energy 
(NE) in fiscal year 2012--a decrease of 0.6 percent from the fiscal 
year 2010 current appropriation. NE's funding supports the advancement 
of nuclear power as a resource capable of meeting the Nation's energy, 
environmental, and national security needs by resolving technical, 
cost, safety, proliferation resistance, and security barriers through 
research, development, and demonstration as appropriate.
    Currently, nuclear energy supplies approximately 20 percent of the 
Nation's electricity and more than 70 percent of clean, noncarbon-
producing electricity. More than 100 nuclear power plants are offering 
reliable and affordable baseload electricity in the United States, and 
they are doing so without air pollution and greenhouse gas emissions. 
NE is working to develop innovative and transformative technologies to 
improve the competitiveness, safety and proliferation resistance of 
nuclear energy to support its continued use.
    The fiscal year 2012 budget supports a balanced set of RD&D 
activities. This program is built around exploring, through its R&D: 
technology and other solutions that can improve the reliability, 
sustain the safety, and extend the life of current reactors; 
improvements in the affordability of new reactors to enable nuclear 
energy to help meet the administration's energy security and climate 
change goals; development of sustainable nuclear fuel cycles; and 
minimization of risks of nuclear proliferation and terrorism.
    NE is requesting $125 million for Reactor Concepts Research, 
Development and Demonstration. This program seeks to develop new and 
advanced reactor designs and technologies. NE is also requesting $67 
million for the Light Weight Reactor SMR Licensing Technical Support 
program, which will support cost-shared design certification and 
licensing activities for two light water reactor-based designs. SMRs 
are a technology that DOE believes has the promise to help meet energy 
security goals. Work will continue on R&D for the Next Generation 
Nuclear Plant to support demonstration of gas-cooled reactor technology 
in the United States. The program also supports research on Generation 
IV and other advanced designs and efforts to extend the life of 
existing light water reactors.
    The fiscal year 2012 request includes $155 million for Fuel Cycle 
Research and Development to perform long-term, results-oriented 
science-based R&D to improve fuel cycle and waste management 
technologies to enable a safe, secure, and economic fuel cycle. The 
budget also requests $97.4 million to support the Nuclear Energy 
Enabling Technologies program, focused on the development of cross-
cutting and transformative technologies relevant to multiple reactor 
and fuel-cycle concepts. The Crosscutting Technology Development 
activity will focus on a variety of areas such as reactor materials, 
creative approaches to further reduce proliferation risks, and 
establishing advanced modeling and simulation capabilities to 
complement physical experimentation. The Transformative Nuclear 
Concepts R&D activity supports, via an open, competitive solicitation 
process, investigator-initiated projects that relate to any aspect of 
nuclear energy generation ensuring that good ideas have sufficient 
outlet for exploration. Modeling and Simulation Energy Innovation Hub, 
supported within this program, will apply existing modeling and 
simulation capabilities to create a ``virtual'' reactor user 
environment to simulate an operating reactor and is a prime example of 
the type of crosscutting, transformative activity that will enhance 
many research areas within NE. NE will also continue its commitments to 
investing in university research, international cooperation, and the 
Nation's nuclear research infrastructure--important foundations to 
support continued technical advancement.
Office of Fossil Energy--Sustaining American Energy Options Through 
        U.S. Ingenuity
    The fiscal year 2012 budget request of $521 million for the Office 
of Fossil Energy (FE) will help ensure that the United States can 
continue to rely on clean, affordable energy from traditional domestic 
fuel resources. The United States has 25 percent of the world's coal 
reserves, and fossil fuels currently supply more than 80 percent of the 
Nation's energy.
    DOE is committed to developing technologies and providing 
technology-based options having public benefits including enhanced 
economic, environmental and energy security impacts. In FER&D, the 
emphasis, in keeping with Presidential priorities, is in supporting 
long-term, high-risk initiatives targeted at carbon capture and storage 
as well as advanced energy systems and on cross-cutting research.
    In addition, $122 million of FE's $521 million request will be to 
provide for national energy security through the continued operations 
of the Strategic Petroleum Reserve (SPR). The budget proposes to sell 
$500 million of SPR oil in order to provide operational flexibility in 
managing the SPR.
NNSA--Leading Global Partners on Nonproliferation by Securing 
        Vulnerable Nuclear Materials; Reaffirming Commitment to 
        Stockpile Modernization
    NNSA continues significant efforts to meet administration and 
secretarial priorities, leveraging science to promote U.S. national 
security objectives. The fiscal year 2012 President's budget request 
for NNSA is $11.8 billion; an increase of 5.1 percent from the 
President's fiscal year 2011 request. The 5-year fiscal year 2012-2016 
President's request for NNSA reflects the President's global nuclear 
nonproliferation priorities and his commitment to modernize the U.S. 
nuclear weapons complex and sustain a strong nuclear deterrent, as 
described in the 2010 Nuclear Posture Review (NPR) Report, for the 
duration of the New START Treaty and beyond. NNSA's defense and 
homeland security-related objectives include:
  --ensuring that the U.S. nuclear deterrent remains safe, secure, and 
        effective while implementing changes called for by the 2010 NPR 
        and the New START Treaty;
  --broadening and strengthening the NNSA's science, technology, and 
        engineering mission to meet national security needs;
  --transforming the Nation's cold-war era weapons complex into a 21st 
        century national security enterprise;
  --working with global partners to secure all vulnerable nuclear 
        materials around the world and implement the President's 
        nuclear security agenda expressed in the May 2010 National 
        Security Strategy and the Nuclear Posture Review report; and
  --providing safe and effective nuclear propulsion for U.S. Navy 
        warships.
    The fiscal year 2012 budget request of $7.6 billion for the weapons 
activities appropriation provides funding for a wide range of programs. 
Requested activities include providing direct support for the nuclear 
weapon stockpile, including stockpile surveillance, annual assessments, 
life extension programs, and warhead dismantlement. science, 
technology, and engineering programs are focused on long-term vitality 
in science and engineering, and on performing R&D to sustain current 
and future stockpile stewardship capabilities without the need for 
underground nuclear testing. These programs also provide a base 
capability to support scientific research needed by other elements of 
DOE, the Federal Government national security community, and the 
academic and industrial communities. Infrastructure programs support 
facilities and operations at Government-owned, contractor-operated 
sites, including activities to maintain and steward the health of these 
sites for the long term and construct new facilities that will allow 
the United States to maintain a credible nuclear deterrent. The unique 
nuclear security expertise and resources maintained by NNSA are made 
available through the National Laboratories to other DOE offices, 
agencies and to the Nation for security and counterterrorism 
activities.
    The weapons activities request is an increase of 8.9 percent more 
than the President's fiscal year 2011 request. This level is sustained 
and increased in the later out-years. The multi-year increase is 
necessary to reflect the President's commitment to maintain the safety, 
security, and effectiveness of the nuclear deterrent without 
underground nuclear testing, consistent with the principles of the 
Report on the Plan for the Nuclear Weapons Stockpile, Nuclear Weapons 
Complex, and Delivery Platforms (known as the ``1251 Report'') and the 
Stockpile Management program as stipulated in sections 1251 and 
3113(a)(2) of the National Defense Authorization Act for Fiscal Year 
2010. Increases are provided for direct support of the nuclear weapon 
stockpile, for scientific, technical, and engineering activities 
related to maintenance assessment and certification capabilities, and 
for recapitalization of key nuclear facilities. The President's request 
provides funding necessary to protect the national resource of human 
capital at the national laboratories through a stockpile stewardship 
program that exercises and retains these capabilities.
    The fiscal year 2012 request for Defense Nuclear Nonproliferation 
(DNN) is $2.5 billion; a decrease of 5.1 percent from the President's 
fiscal year 2011 request. This decrease reflects completion of long-
lead procurements for the Mixed Oxide Fuel Fabrication Facility 
(MOX) and Waste Solidification Building (WSB). It also 
reflects our decision to await an agreement between the United States 
and Russia on detailed implementation milestones prior to requesting 
additional United States-pledged funding to support Russian plutonium 
disposition. The administration prioritizes U.S. leadership in global 
nonproliferation initiatives as directed through the National Security 
Strategy and has advanced this agenda through commitments from global 
partners during the 2010 nuclear security summit. In addition to the 
programs funded solely by the NNSA, DNN programs support interagency 
and international efforts to protect national security by preventing 
the spread of nuclear weapons and nuclear materials to terrorist 
organizations and rogue states. These efforts are implemented in part 
through the International Atomic Energy Agency, the G8 Global 
Partnership against the Spread of Weapons and Materials of Mass 
Destruction, and the Global Initiative to Combat Nuclear Terrorism.
    DNN supports the President's goal to secure vulnerable nuclear 
materials around the world within 4 years. The Global Threat Reduction 
Initiative's emphasis in fiscal year 2012 is to convert domestic and 
international nuclear reactors from weapons-usable highly enriched 
uranium fuel to low-enriched uranium fuel (LEU); while preserving our 
capability to produce the critically needed Molybdenum 99 isotope. The 
fiscal year 2012 President's request for International Nuclear 
Materials Protection and Cooperation reflects selective new security 
upgrades to buildings and sites in accordance with the President's goal 
to secure vulnerable nuclear materials around the world within 4 years, 
as well as enhancements and sustainability support for previous work. 
The Fissile Materials Disposition program continues domestic 
construction of the MOX Fuel Fabrication Facility scheduled 
to come online in 2016; and design for the pit disassembly and 
conversion capability to provide it with plutonium oxide feedstock.
    The President's request of $1.2 billion for Naval Reactors is an 
increase of 7.8 percent more than the President's fiscal year 2011 
request. The program supports the U.S. Navy's nuclear fleet, comprised 
of all of the Navy's 72 submarines and 11 aircraft carriers, which 
constitute 45 percent of the Navy's combatants. The United States 
relies on these ships every day, all over the world, to protect our 
national interests. The budget provides funding increases for the Ohio 
class replacement submarine to design and develop required submarine 
reactor plant technologies. R&D is underway now, and funding during 
this Future Years Nuclear Security program is critical to support the 
long manufacturing spans for procurement of reactor plant components in 
2017, and ship construction in 2019. Resources are also requested in 
fiscal year 2012 to support design work for the recapitalization of the 
spent nuclear fuel handling infrastructure and refueling of the Land-
based prototype.
    The Office of the Administrator appropriation provides for Federal 
program direction and support for NNSA's headquarters and field 
installations. The fiscal year 2012 request is $450.1 million; a 0.4 
percent increase more than the President's fiscal year 2011 request. 
This provides for well-managed, inclusive, responsive, and accountable 
organization through the strategic management of human capital, 
enhanced cost-effective utilization of information technology, and 
integration of budget and performance through transparent financial 
management practices. The increase reflects additional Federal 
oversight for construction of the Pit Disassembly and Conversion 
project, the Uranium Processing Facility, and the Chemistry and 
Metallurgy Research Replacement Facility.
                               conclusion
    The United States faces a choice today: will we lead in innovation 
and out-compete the rest of the world or will we fall behind? To lead 
the world in clean energy, we must act now. We can't afford not to.
    Thank you, and now I am pleased to answer any questions you may 
have.

                         HYDROGEN TECHNOLOGIES

    Senator Feinstein. Thank you very much, Secretary.
    I am going to try to get three quick questions in my first 
round. One is on hydrogen and one is on the SunShot Initiative, 
and the third on the loan guarantee program.
    You have proposed to cut hydrogen by $100 million in fiscal 
year 2012. That is a cut of $70 million from the 2010 level, 
and you zeroed out all funding for fuel cells in the fossil 
energy program. We gather your advisory committee was dismayed 
by that. But I think it is important that you tell us what your 
current view is on hydrogen technology and whether it can be 
successful or not.
    Secretary Chu. Sure. First, in terms of the fuel cells, we 
do have a research program in fuel cells for stationary fuel 
cells. There has been very good progress made in fuel cells and 
in the longevity in fuel cells and bringing down the costs.
    The idea of a hydrogen economy is something that is very 
helpful, but the fundamental issue is we need a source of 
hydrogen that will make good economic sense. Right now, our 
hydrogen comes from reforming natural gas. When you reform 
natural gas, you create hydrogen and carbon dioxide, so in 
terms of the carbon benefit, there is none unless you sequester 
the carbon dioxide.
    In order for that to happen, I think we have to develop 
more sources of natural gas that can allow you to do those 
things. So, the first priority is to develop sources of 
hydrogen that will make economic sense, and to sequester the 
excess carbon dioxide. There is a hydrogen storage issue in 
automobiles. Right now, we are going to continue the research 
in the area of high-pressure tanks. And so, there is the 
storage part, there is the source of hydrogen, which I think is 
the most fundamental issue. You know, it is a transformation of 
energy from one form to another. And the fuel cell part is 
actually going along well. The stationary fuel cells, because 
of the higher efficiency, are something we can see can be 
deployed quickly in the next 5 or 10 years. There are a number 
of commercial companies doing this, and so we will continue in 
research on developing better fuel cells for stationary 
sources. And we also are looking at how we can actually develop 
the source of hydrogen that will actually lead to a hydrogen 
economy.
    So, that is why we are----
    Senator Feinstein. Quickly, how realistic is all of that?
    Secretary Chu. I think the fundamental thing is the source 
of hydrogen. Right now it is natural gas, but natural gas will 
have to be significantly more abundant and less costly. We are 
going in the right direction, but it will have to be 
significantly more abundant. Or the gasification of coal, 
again, with carbon sequestration, but that is a technology 
issue to make it cost effective. But there has to be--it is 
turning a hydrocarbon into hydrogen and sequestering the 
carbon.

                   SOLAR TECHNOLOGY PRICES/SUBSIDIES

    Senator Feinstein. Okay. Now, the second question is on the 
SunShot Initiative, which seeks to reduce the cost of solar 
power to roughly $1 per watt and at that price. The goal is for 
solar power generation to become cost effective without 
subsidies with other forms of electricity generation.
    I am very pleased to see that the SunShot Initiative will 
include the photovoltaic manufacturing initiative. As you will 
recall, several years ago, you told me that photovoltaic was 
not cost effective, but you expected at that time that it would 
take 4 to 5 years to become cost effective. So, I would like to 
know what progress has been made there as well. Do we need to 
focus resources on the SunShot Initiative on domestic 
manufacturing?
    Secretary Chu. Well, first, the cost of photovoltaic--of 
solar energy has gone down by a factor, too. It has been 
decreased by 50 percent in the last 5 or 6 years worldwide. The 
full cost of 10 megawatt or above--large sale--not rooftop, but 
large scale. So it has come down by that much.
    In this decade, we have talked to business, not only in the 
United States, but abroad, and every manufacturer says that in 
their business plan, if the cost does not come down by another 
factor or two, we cannot produce them to be a factor or two 
less, then we will probably go out of business. So, they are 
actually banking on this.
    And then taking that as the starting point, we have started 
to engage in these companies and in ways to say, can we 
accelerate this? Can we do something with these companies and 
with research that can actually accelerate this progress? And 
so, our ambitious goal is to say, can you reduce the cost by 75 
percent instead of 50 percent by the end of this decade? That 
is a magical price because at that price, in many parts of the 
United States, then without subsidy, it is competitive with any 
other form of energy. So, that is a big deal.
    When you drop by 50 percent, there are certain areas of 
peak demand, I think it will be. And so, our goal in most of 
our energy endeavors is to devise a plan so we can get there 
without subsidy. You know, I, too, share the belief that you 
might need to subsidize for a little while, but you do not want 
to subsidize for 100 years. And is there a technology pathway 
that can develop these things without subsidies? And so, the 
SunShot Initiative is really to say this is within reach. And 
there has been remarkable progress.
    In terms of your question about manufacturing, 
manufacturing innovation is another key part of what we will 
need to do in order to be competitive with the rest of the 
world. And it is that manufacturing innovation that began with 
Henry Ford, that he was willing to invest 5 years of Ford's 
money in a beginning company to develop an assembly line. They 
started by making handmade cars, but it transformed the 
automobile industry.
    So, there are things that we are invested in that we are 
actually quite excited about--new approaches of either thin 
film or even silicone, a totally new approach to manufacturing 
sili-composed cells could actually transform the landscape. And 
so, we are hoping companies research and develop new 
manufacturing things that will give us a competitive edge in 
the decades to come. And that is an important part of what we 
are doing as well.
    Senator Feinstein. Thank you very much. My time is up.
    Senator Alexander.
    Senator Alexander. Madam Chairman, I see the Republican 
leader is here. I would be glad to defer to him and then go 
after him.
    Senator Feinstein. I was looking on the wrong side for you, 
Mitch. Sorry.
    Senator Alexander. We hope he is there.
    Senator Feinstein. I recognize the Republican leader.
    Senator McConnell. Thank you very much, Senator Alexander 
and Chairman Feinstein.

                   ENRICHED URANIUM TAILS AT PADUCAH

    Mr. Secretary, welcome. I am here to focus your attention 
on the Paducah Gaseous Diffusion Plant, which is, I believe, 
you know, has been enriching uranium for 60 years. It happens 
to be the economic engine of far western Kentucky. Many people 
think of Kentucky as a coal State, which we are, but we are 
also a nuclear State.
    The plant has 1,200 employees and it is in the process of 
closing down. There are, however, 40,000 cylinders of depleted 
uranium at Paducah, which are typically referred to in the 
business as tails. If they were re-enriched, it would be a 
profitable venture.
    These are Government-owned resources, highly valued, stored 
in a lot which could be sold to create revenue for the 
Government, and in the meantime, happily enough for western 
Kentuckians, keep 1,200 people from collecting unemployment. 
So, a revenue raiser for the Government and an avoidance of 
unemployment for 1,200 people, are you familiar with the tails 
issue at the uranium enrichment plant?
    Secretary Chu. Yes, I am.
    Senator McConnell. It is my understanding that DOE, at 
least at the moment, does not have a current plan for re-
enriching those tails at Paducah. Is that correct?
    Secretary Chu. That is correct.
    Senator McConnell. Kentucky's unemployment rate is right at 
10 percent. We cannot afford to lose 1 more job, let alone 
1,200. If there is the potential for DOE to save these jobs, 
would you not think that would be worth pursuing?
    Secretary Chu. We are certainly very concerned about any 
job impacts in actions we take, but there are other issues that 
I would be happy to talk to you about, having to do with 
another commitment for uranium in another uranium enrichment 
plant. We cannot release more than 10 percent of the uranium 
market because the uranium mining industry in the United States 
could be affected. And so, we are bound to only release 10 
percent or less of what is ever on the market. We have 
commitments in 2011 and 2012 for another uranium enrichment 
process going on. And so, we have made that commitment, and so 
we have to try to figure out what to do about the Paducah plant 
beyond that. But we are certainly very aware and very 
sympathetic to this plight.
    Senator McConnell. Well, let us assume we do not do that. 
Then the question is, do we have the funds in the 2012 budget 
to safely and secure idle the plant after it closes and returns 
to the control of the Government?
    Secretary Chu. Well, what we need to do is work with you on 
trying to figure out a path forward for these jobs. I have to 
be candid. The gaseous diffusion technology is one which is 
very energy intensive. And I would rather us invest in more 
forward-leaning technologies such as improved centrifuges. I do 
think the United States would like to have an in-house 
institute for a technology of our----
    Senator McConnell. But that is not the issue at Paducah, is 
it? That is going to happen in Portsmouth.
    Secretary Chu. No, it is going to happen in Portsmouth.
    Senator McConnell. So, in Paducah, the issue is, will we 
re-enrich the tails and actually make money for the Government, 
or if we are not going to do that, will the Government pay for 
a cleanup, because we have been getting the clean-up funding on 
an annual basis, but there is apparently no plan in your budget 
for cleanups after the operation ceased. So, under this 
scenario, it strikes me the Government loses an opportunity for 
revenue, we lose 1,200 jobs, and you are not funding the 
cleanup, which would cost you money, whereas re-enriching the 
tails would actually gain the Government money. Is that--am I 
correctly understanding that?
    Secretary Chu. Yes and no. I mean, certainly it will be our 
obligation to clean up if and when Paducah closes down. But 
that depleted uranium will be there. And, again, to go forward 
in the most cost effective way, if there is a technology that 
they can more effectively enrich those tails, we would be more 
biased to just doing that. But certainly we have an obligation 
to clean up that plant, once it is closed down.
    Senator McConnell. When are we going to see the plan?
    Secretary Chu. We will get back to you and your staff on 
that.
    Senator McConnell. Well, you know, we have got 1,200 
employees sitting there wondering if they are going to be 
without a job. And I understand it is a tough time for 
everyone. Unemployment is high in Kentucky. But here you have 
an opportunity to continue 1,200 people working, actually raise 
revenue for the Government by re-enriching these tails. And 
what I think I hear you saying is you have got no plan for 
either contingency at the moment. Is that correct?
    Secretary Chu. Right now, we have to make very, very hard 
decisions given the budget reality. As Chairman Feinstein said, 
we do not expect the Congress to give us our proposed budget. 
We need to work----
    Senator McConnell. How many of your tough decisions give 
you an opportunity to actually raise revenue?
    Secretary Chu. Well, we are actually raising revenue on, as 
you mentioned, on the United States Enrichment Corporation 
(USEC) side for the same reason. And so, it is raising revenue 
in the most cost-effective way. And we always like to raise 
revenue. But remember, we are at this limit of 10 percent.
    Senator McConnell. Well, it is not a very satisfying answer 
if you are an employee in western Kentucky. I think I correctly 
heard you that you have no plan to re-enrich the tails, and you 
have currently not intended to budget, at least according to 
our figures, by 2014, you are not even going to meet the annual 
cleanup needs that have been met on an annual basis at the 
plant, and have no current plan for addressing the shortfall.
    Secretary Chu. We can look at the cleanup issue, but, 
again, you know, the tails are still there. And it is not as 
though we are either going to move on it next year or the year 
after.
    Senator McConnell. No, I understand that. But you start re-
enriching them now; you still employ 1,200 people----
    Secretary Chu. Right.
    Senator McConnell [continuing]. And the Government makes 
money. You leave them sitting there and then you have got the 
clean-up obligation, which costs you money. I am curious as to 
why you think this makes sense.
    Secretary Chu. Because if we do this enrichment with this 
old and now it is a very energy-consuming technology that was 
developed during World War II, and there are better 
technologies that we would like to use and develop in house, in 
house meaning in the United States. And so, again, it is a 
decision with our limited budget.
    Senator McConnell. So, you would rather make the money 
later than make the money now.
    Secretary Chu. Well, I would go back to--we can enrich it 
now, but then we cannot make the money because we cannot 
release it on the market because of already what is being put 
in place with USEC.
    Senator McConnell. Well----
    Senator Feinstein. Senator----
    Senator McConnell. Thank you very much, Madam Chairman.
    Senator Feinstein. I have tried to be as liberal as 
possible.
    Senator McConnell. No, I appreciate it very much. Thank you 
so much.
    Senator Feinstein. Thank you very much. Senator Lautenberg, 
early bird, you are next.

                           GLOBAL ENERGY RACE

    Senator Lautenberg. Thank you, Madam Chairman, and thank 
you, Secretary Chu for the wonderful work you do for our 
country and for helping us now to try and solve problems that 
will directly affect how our economy recovers and how we 
protect ourselves from a lack of energy to fuel our needs.
    In 2009, China surpassed the United States in private 
sector clean-energy investment for the first time. In 2010, 
China began to pull away, attracting $54 billion in private 
investment. Now, they recently announced that its government 
would begin investing the equivalent of $75 billion in clean 
energy annually. Now, will your agency's roughly $30 billion 
budget invest enough for us to regain the lead in the global 
clean-energy race?
    Secretary Chu. You are quite right to be concerned about 
China's investment, but it is not only China. I would add it is 
Korea and it is the European Union, Germany, and Great Britain. 
Other countries are also looking at clean-energy development, 
both on the efficiency side and on the generation side. These 
are going to be the big business opportunities in the world 
market going forward in the coming decades. And so, what we 
need to do is position the United States so that we can be a 
leader in this. We have been a leader in other technologies. It 
is, quite frankly, ours to lose because we still have the best 
research institutions. We have a national lab system that is 
incomparable. And we need to develop the mechanisms to allow 
American industry to make the inventions and to manufacture in 
the United States.
    Now, in terms of what you specifically asked, what China 
and others are doing, they are helping companies with, for 
example, loans and--or loan guarantees. As you know, we have an 
oversubscribed loan program. I think Senator Feinstein was--we 
could not get to that part of it, and it is something that we 
feel it is a good, highly leveraged way of supporting industry 
investment and to--because when we see these companies 
beginning to build manufacturing facilities abroad, this is one 
of the factors that comes through loud and clear, that they are 
getting loan guarantees from countries like China. And I think 
so, looking forward, I would love to work with the Congress. 
You know, part of our loan guarantee program is dependent upon 
if ARRA falls through--it is highly leveraged, and it is a 
guarantee. So, those programs I think would be an important 
part going forward.
    Senator Lautenberg. Right, but does that, Secretary Chu, 
suggest that we are going to fall further behind this--back of 
these countries with the kind of budget that we are talking 
about at this moment?
    Secretary Chu. Well, I think, you know, that's why the 
President has chosen to increase the energy budget, when other 
agencies were going down. And the President said that this is a 
very--in order to preserve the future and to win the future, in 
order to actually go forward, that investments in the science 
and research and the development of these things is going to be 
crucial to our economic prosperity going forward. And this is 
why there were hard decisions made and why the energy budget 
saw the increase that it did.

                    ENVIRONMENTAL IMPACT OF FRACKING

    Senator Lautenberg. Earlier this month, you appointed a 
panel to study and make recommendations on the practice of 
fracking. Cornell University recently released a study that 
says the natural gas extracted using fracking as the technique 
to produce--can produce much more global warming pollution than 
coal. And given the administration's commitment to reduce 
greenhouse gasses, would your panel consider recommending that 
the industry capture some of these emissions--can they capture 
some of these emissions from natural gas?
    Secretary Chu. Well, this advisory board, is actually going 
to be meeting for the first time today and tomorrow. I am aware 
of that Cornell study. There was, in fact, another paper just 
published last week in the ``Proceedings of the National 
Academy of Sciences'', which I read very thoroughly. And it 
does raise some questions that will need to be answered 
regarding this.
    We are very concerned about the environmental impact, but 
we also see that if you can do this safely and you can extract 
the gas safely, and not have excess emissions or pollution of 
water tables, that it is a transition to a clean-energy future, 
and it is producing energy in the United States. And so, the 
administration wants to do this is an environmentally 
responsible way. We need to do it in an environmentally 
responsible way. There is no question about that. But there are 
these studies that we are very well aware of, and personally 
given the charge of the subcommittee, have spent a couple of 
weekends reading about this stuff, learning about this, and 
there are some concerns. But we want to get all the 
perspectives and find out what is really going on.
    Senator Lautenberg. We will be anxious to get the panel's 
report, and hope that we can establish the fact that this does 
not present other environmental problems----
    Secretary Chu. Right.
    Senator Lautenberg [continuing]. That it worsens the 
situation rather than improve it.
    Thank you very much, Mr. Secretary.
    Senator Feinstein. Thank you very much, Senator Lautenberg.
    Senator Alexander.

                     ENERGY RESEARCH AND SUBSIDIES

    Senator Alexander. Thank you, Madam Chairman.
    Mr. Secretary, Governor Haslam recently traveled to visit 
with you and Senator Cochran and me about environmental cleanup 
at Oak Ridge, urging a focus on the dangers of the mercury 
there. And factoring in the large population in the region, I 
would be remiss if I did not thank you for the meeting and 
underscore the importance of that.
    My questions, though, are along the lines of my comments in 
the opening statement about energy research. Does it sound 
about right that the Department has about $6 billion more or 
less for energy research?
    Secretary Chu. Roughly speaking, yes.
    Senator Alexander. Roughly $6 billion. What should it be? 
If you were Professor Chu and were not bound by the office of 
budget, I mean, what should--well, let me put it another way. 
You talk about hubs; I talk about Manhattan Projects. I think--
are we not both talking about accelerating energy research in a 
focused way?
    Secretary Chu. Yes, and, I am here in defense of the 
President's budget----
    Senator Alexander. Right.
    Secretary Chu [continuing]. But I would love to see 
increases. I think, as I said before, that this is research we 
do with a goal of getting the private sector to pick up this 
stuff and run with it and to give them, as Chairman Feinstein 
said, you know, the research center--Argonne National 
Laboratories, using a light source, a facility actually gave a 
leading edge and developed a series of patents that allow us to 
make better batteries.
    Senator Alexander. So, if I may interrupt, we are talking 
about 500-mile batteries and $1 a watt solar power and a better 
way to recycle, use nuclear fuel----
    Secretary Chu. Right, right.
    Senator Alexander [continuing]. And trying to lead the 
country in that. And even crusty, miserly Republicans often 
agree that research is an appropriate role of the Federal 
Government, while we might worry about some other things.
    Given the importance of that--I mean, and as we--given the 
budget problems we have with 40 cents of every $1 being 
borrowed and we all know that we are going to have a rough 2, 
3, or 4 years trying to make up a budget, should we not be 
looking hard at such things as long-term subsidies? I think 
particularly, you know, my colleagues talk about big oil all 
week, you know. I think we ought to talk about big wind. And I 
mentioned earlier that we are committed to spending $26 
billion--taxpayers are--over the next 10 years on wind 
subsidies in a production tax credit that was passed as a 
temporary measure in 1992.
    Now, you have got in your budget money for research on 
offshore wind. It seems to me that is appropriate. It seems to 
me that to continue to subsidize over a long term a mature 
technology is not appropriate--jump starting electric cars, 
jump starting natural gas, research for offshore wind. All 
those things might be appropriate, but if we looked at long-
term energy subsidies, whether they're big oil or big wind, it 
looks to me like we could find money to take a fairly modest 
energy research budget of $6 billion and make it $7, $8, $9, or 
$10 billion, and move us much more rapidly toward a low-cost, 
clean-energy future rather than a high-cost, clean-energy 
future. I mean, we have $1 solar power. That is cheaper. If we 
have 500-mile batteries, that is cheaper. That uses a lot less 
gas.
    So, why shouldn't we be developing a policy that takes 
money from these long-term subsidies and putting them into 
energy research?
    Secretary Chu. I would agree with you absolutely that what 
we need to do in designing any energy research program or any 
energy development--we are responsible for the entire 
innovation chain. And what we need to do is design things and 
have a program going forward where we do not want to start 
businesses that cannot survive indefinitely without a subsidy. 
That is just not the way to do things. So, I think we are in 
total agreement with that, whereas--and you spoke about this--
for example, offshore wind has great possibilities. We need to 
develop that to get it going. And the SunShot, if we see--it is 
going to be an international race, and it is. And batteries, it 
is an international race.
    Senator Alexander. Right.
    Secretary Chu. And, therefore--but it is going to be the 
research----
    Senator Alexander. But the amount of money to do the 
research is relatively modest. I mean, you asked for--in 
offshore wind it was $27 million maybe----
    Secretary Chu. Right.
    Senator Alexander [continuing]. For small nuclear reactors, 
$60 million, ARPA-E is $100 million and--well, you have asked 
for $500 million, but you got--I mean, you got $180 million.
    Secretary Chu. Right.
    Senator Alexander. And these big subsidies, whether it is 
big wind or big oil, you know. It seems like the money could be 
better spent, and that one of the things we might be able to 
help do is reduce the long-term subsidies and focus it more on 
energy research where I think there is probably a consensus 
about the appropriateness of Federal spending.
    Thank you, Madam Chairman.
    Senator Feinstein. Thank you, Senator.
    Senator Cochran.

                   NUCLEAR ENERGY AND ENERGY SECURITY

    Senator Cochran. Madam Chairman, thank you for chairing 
this hearing.
    Welcome, Mr. Secretary. We appreciate your being here to 
help us understand the administration's proposal for spending 
in your Department for the next fiscal year.
    I am pleased to notice that it is recommended that nuclear 
energy continue to have a place in the national strategy for 
energy independence and guarantee supplies of energy for our 
country. There is an increase in funding for the Office of 
Nuclear Energy we noticed in the budget request.
    I wonder, what do you think the priorities of that office 
should be in terms of reaching our goals and helping maintain 
our energy security as a Nation?
    Secretary Chu. Sure. I would love to answer that question. 
Again, the way we are approaching this is we are looking at 
what industry is going to be doing and then saying what can we 
do to add value to this? And it is on things like, for example, 
using high-performance computing, which is in a very sweet 
spot.
    Like what is done at Senator Alexander's laboratory in Oak 
Ridge. They are the leader of the fastest civilian--fastest. 
Actually now it is China that is pushing out ahead. But to use 
high-performance computing to design next-generation reactors 
and how to deal with these things so you can skip engineering 
steps, engineering design things that you can simulate in a 
much wider space. So, we think that we can do things of that 
nature.
    Senator Alexander spoke about how to develop fuel recycling 
that makes economical sense and that makes anti-proliferation 
sense, so that the amount of electricity you generate from the 
nuclear field could be 10, 20 times more than what we do today. 
And so, for the same amount, you can do a lot more. I think 
that is something that is very much part of what we want to do, 
you know.
    So, new recycling technologies, there is a long road home, 
but we have to continue these new advanced reactor 
technologies, things of that nature.

                   STRATEGIC PETROLEUM RESERVE (SPR)

    Senator Cochran. One decision that has been made by the 
Department relates to the SPR. In our State of Mississippi, 
that program is dead in the water, as I understand it. There is 
a decision that I am advised canceled the expansion of the SPR 
in our State. And we have submitted requests for information, 
explanation, what plans do you have for that program, and we 
have not received a response from DOE. I wish you could go back 
and see if you do have a response to that question. We would 
like to know about what your plans for the future are with 
respect to the SPR. You could ask for that now, if you would 
like.
    Secretary Chu. Well, we will get back to you on the 
details. But right now, the SPR, we are required to have a 90-
day supply in case of a disruption of supply, of which 75 days 
comes from the SPR and the rest from civilian stock. And right 
now, the--we are repairing one of our caves, but we are 
actually at very close to full capacity. And so, but we can get 
back to you on the details of what we have planned going 
forward.
    But the point is, we are at--we are very close to maximum 
capacity. We have a cavern or two that needs repair. I do not 
quite remember whether this was in Mississippi or not, and we 
have to tend to that.
    Senator Cochran. Well, we do know that we have been trying 
to get answers to questions about that for 2 years now, I'm 
told, and have not gotten a satisfactory response. So, I do not 
know that there is a response, but I think we are entitled to 
hear----
    Secretary Chu. Sure, you are right.
    Senator Cochran [continuing]. What your plans are.
    Last year after the President recommended cancelling that 
program, the Congress voted to rescind all the funds that we 
had worked for to provide the Department about $70 million for 
the expansion of the SPR. So, there is a breakdown in 
communication and about whether you need the money. And if you 
are not going to use the money, we may help you think up other 
ways to do it than what you are planning to do with the money.

                      YUCCA MOUNTAIN/NUCLEAR WASTE

    Well, there was a Blue Ribbon Commission chartered last 
year by President Obama to study nuclear waste disposal 
options. I wonder if you could give us any information about 
this program, whether or not you have a specific plan. We 
understand the recently cancelled Yucca Mountain program is in 
limbo, unclear about whether funds are going to be used for 
that program or not. It gives me the impression that we are 
having a hard time finding out what the Department is up to in 
some of these areas. Could you tell us about what your plans 
are for storage at Yucca Mountain?
    Secretary Chu. Sure. First, I believe that there is a first 
draft of an outline of some of the recommendations from this 
Blue Ribbon Commission. I think rather than comment here on 
these draft things that have been put out, I would rather them 
give an official report. Well, let me comment on one or two of 
them.
    What they have said is that, first, that there--one of the 
things they said again goes to Senator Alexander's point that 
while there is no immediate technology that we can use for 
reprocessing, you know, we still should continue to develop 
that technology. They have looked at other countries that have 
found siting for notably Sweden and Finland, where there was a 
process that seemed to have more acceptance of the local people 
in those regions of the country. And so, at least in this draft 
recommendation they are saying we should look at those 
processes. We have examples of low-level waste where things 
have gone very successfully, and there has not been opposition. 
And so, there are a number of other things.
    So, we need to go far in this. It is the responsibility of 
DOE. As you know, we are positive on nuclear power in the 
future. And whatever occurs is a DOE responsibility to deal 
with the waste.
    Senator Cochran. Madam Chairman, my time has expired.
    Senator Feinstein. I thank you very much, Senator Cochran.
    Senator Johnson.
    Senator Tim Johnson. Secretary Chu, welcome.

    DEEP UNDERGROUND SCIENCE AND ENGINEERING LABORATORY (DUSEL) AT 
                               HOMESTAKE

    I am pleased to see DOE is continuing support for DUSEL at 
Homestake Mine in Lead, South Dakota. I appreciate that your 
agency included $15 million for the project in your fiscal year 
2012 budget request.
    I understand DOE is nearing conclusion of an internal 
review of the project and am interested in its results. 
Specifically, could you talk about how DOE is prepared to work 
with the project team to ensure that your recommendations are 
known and included in future financial and construction 
planning?
    Secretary Chu. Well, first, I know we are undergoing this 
review, and I have not specifically spoken with Bill Brinkman 
about this yet. We are working, though, as you well know--the 
National Science Foundation (NSF), is having some second 
thoughts--this is very discouraging to us--about that, 
especially since they started it.
    But in any case, I think we are trying to figure out a path 
forward on the investments that have been made by South Dakota 
and DOE and NSF. So, in the interim we continue to get funds to 
pump the water, continue doing this. But if we lose on the long 
term this--you know, the support of what was supposed to be 
roughly a 50/50 partner, we are trying to understand how we can 
go forward in a perhaps reduced program or what our options 
are, especially in whatever funding we will be getting in 
fiscal year 2012 and going forward.
    And so, these, again, are going to be very difficult 
choices. There are a few requirements that we would like to 
have done, and we still remain committed. We need to get some 
of those experiments done. But as I said, I have not seen the 
report or--and so I will be waiting for that.
    Senator Tim Johnson. On a related note, as you know, a 
great deal of activity is already underway at Homestake, and we 
had previously hoped NSF would be, at this stage, be providing 
more support for these activities. In lieu of significant NSF 
construction funding, and in order to preserve the great 
progress and investment we have already made, what is DOE 
prepared to do to ensure that no jobs are lost while you 
evaluate your long-term plans for the project and for high-
energy physics in general?
    Secretary Chu. Yes. We are very aware of that and trying 
our best to keep the--there is a very dedicated scientific team 
that has been assembled on this. And while we try to put this 
path forward, again for 2011 and 2012, there is going to be 
continued funding, we do not want to lose and dissipate the 
scientific teams that have been developed, and just as we do 
not want the water to come back into the mine.
    And, again, I do not know exactly the timing of when or how 
the Office of Science will bring forward a recommendation to 
me, you know, and I am sorry. It is disappointing, but that is 
all I can say about it. And it is an unbiased--completely 
unbiased point of view, I have to say that my old laboratory 
was the lead laboratory in this, so I know personally how it is 
affecting a lot of people. But, you know, not that I am going 
to play favorites, but it is--I know personally--and I know 
personally. As you know, I visited the mine in South Dakota, 
and I know personally all the investments that South Dakota has 
made in this.

                       HIGH-PRIORITY EXPERIMENTS

    Senator Tim Johnson. You referenced high-priority 
experiments. Could you list a few?
    Secretary Chu. Sure. For high-energy physics, we are 
investing in what we call the high-intensity frontier. We are 
also investing in the highest-energy machine, CERN, the 
highest-energy machine there. So, right now because of what 
happened decades ago for the super connecting collider, the 
highest-frontier energy machine is turning on the large hadron 
collider at CERN. And they had a hiccup, but they have 
recovered well from that hiccup. And so, what we have done is 
we still want to deal with high-energy physics as a significant 
part of our program. We still wanted to go forward. And so, the 
good news is American scientists are actively participating in 
that machine, and, for the first time, an American scientist is 
now the lead in one of the major detectors.
    But we also want to make investments here in the United 
States. And so, we have going forward, and with the Fermilab 
Lab director, Piermaria Oddone, he made and we collectively 
made a decision that since the large hadron collider is going 
great guns, we need to invest in the future, which is the new 
sources for neutrino beams at Fermilab. So, we have every 
intention of continuing to invest in Fermilab in those--and, 
again, as you know, in one of the experiments in the Fermilab 
investments for the neutrinos is the use of the detector in 
South Dakota. So, that is why we are especially disappointed in 
the events that unfolded last year.
    Senator Tim Johnson. Thank you, Secretary Chu.
    Senator Feinstein. Thank you, Senator Johnson.
    Senator Landrieu.
    Senator Landrieu. Thank you, Madam Chair.

                        MISSISSIPPI RIVER LEVEL

    If the subcommittee will just give me 1 minute of latitude 
before we get into Energy, Madam Chair, I wanted to just call 
everyone's attention to the fact that the Mississippi River, as 
we meet here today, is flowing at an extraordinary historic 
level, and this subcommittee has jurisdiction over water and 
energy. And I just wanted to put into the record, Madam Chair, 
these statistics that are startling.
    The river is flowing at 172 billion cubic feet per week, 
7.2 billion cubic feet every hour. And as one article today 
described it, it said it is a snarling, powerful beast barging 
its way south. This subcommittee has jurisdiction, as you know, 
and has done, I might say, Madam Chair, a remarkable job in the 
course of the last decade with a lot of help to build this 
Mississippi River system. But it is going to be up to us to 
watch to see how it works in the coming days and weeks and be 
prepared to do what we need to do to make sure that people are 
protected should this ever happen again. So, I would like to 
submit that to the record without objection.
    Senator Feinstein. So ordered.
    I thank you for the comments, and I thank every member of 
this subcommittee. You know, I come from earthquake country, 
know what you have gone through constantly, and how hard it has 
been.
    Senator Landrieu. And it is not just Louisiana; it is 
Tennessee and Mississippi. And Senator Cochran full well knows 
what the people in north Mississippi are experiencing right now 
and the Senator from Tennessee. But this subcommittee has 
jurisdiction over that system.

          LOAN GUARANTEES FOR ADVANCED TECHNOLOGY AUTOMOBILES

    But three questions really quickly. One, Mr. Secretary, you 
and I have spoken several times about this, a project that is 
pending before your Department now. The Department's loan 
programs have supported more than $30 billion in loans, loan 
guarantees for about 28 clean energy and enhanced automotive 
efficiency projects. One of those projects is pending in 
Louisiana right now. And the reason I bring this to your 
attention is it is very timely. Our legislature is meeting as 
we speak. They have reserved basically $68 million to support 
this project.
    The application has pending before you and your Department 
for 2 years. Do you have any update for us at all on Next Auto 
Works, what the timeline looks like, when they might know yes 
or no, because this application we think is quite strong and 
quite competitive, it could create more than 1,000 jobs in this 
part of the country. But as importantly as that, it can produce 
vehicles that can achieve 40 miles per gallon, which I know the 
chair, who has been a leader on CAFE standards, would 
appreciate. This is new technology for the combustible engine, 
but a new technology that seems to us to meet the goals of what 
the President and what you are touting.
    Can you give us any update at all about where we would be 
with this application?
    Secretary Chu. Well, I do not think it would be appropriate 
in a Senate hearing. As you know, in policy, we really--the 
details of specific loan applications, we have to honor the 
relationship we have with the applicant.
    Senator Landrieu. I realize that, but generally--and I 
realize you cannot give the details. I am not asking. But 
generally, does this fit with your goals of creating new 
automobile companies that are pressing forward with new 
technologies to produce automobiles that can almost double our 
efficiency? Does that generally meet with the goals of your 
Department?
    Secretary Chu. Well, if you are asking--I think what you 
are asking is, are we in favor of the advanced technology 
automobile program that we have and its loan, and the answer is 
yes. We think it played a very important part in actually 
helping not only, you know, innovative companies, but also 
established companies, in developing a new line of automobiles 
with advanced technology that get better mileage and are at 
high efficiencies. That means that we can, again, take back a 
leadership role in automobiles. I mean to be candid, we had 
this for three-quarters of a century, but it is something, you 
know, that Europeans and Japanese and the Koreans are now 
wrestling with. And so, we are in favor of supporting 
innovative technologies like that.
    Senator Landrieu. Well, let me ask you because I do not 
want to lose my time, if you could give to my office some time 
by the end of the week just an update on this, because I have 
to tell our legislature something. I mean, they have been 
holding $68 million to support this in a public/private 
partnership, Federal/State partnership. And, you know, we have 
got budget constraints like everyone.

                                FRACKING

    My second question is, and Senator Lautenberg alluded to 
this, we have had a breakthrough, as you know, in this country 
in finding almost 100 years, I understand, of natural gas 
reserves. This is terrific. People want to go around saying we 
have no reserves of oil, which is not true. We have not looked 
for the oil. I think we have a lot more. But we know how much 
natural gas we have. The industry has surprised itself at what 
it is finding.
    So, my question is on this fracking issue, what is the 
Department doing and are you being aggressive to find some 
conclusions? We think, because we have done this for a while in 
Louisiana, that fracking is safe under certain circumstances. 
What are you doing to come to some final determination on this 
so we can take advantage of 100 years of supply of natural gas, 
which can reduce our greenhouse gases, I understand, by 40 to 
50 percent?
    Secretary Chu. Well----
    Senator Landrieu. If you could do it in 30 seconds or less.
    Secretary Chu. Thirty seconds or less. First, we have to 
establish what is really going on, and it could be different in 
different regions of the country. And so, that is why the 
President asked DOE to form this subcommittee. And so, we need 
to find out what is going on.
    Senator Landrieu. When do you expect some results or some 
conclusions from that?
    Secretary Chu. We are tasked that 90 days after the first, 
which is starting today, 90 days from now we will have a 
preliminary set of recommendations. And that committee--that 
subcommittee then goes--in that 90 days goes before the full 
advisory----
    Senator Landrieu. Madam Chair, let me just say I think that 
is a very important component of our work in this next year 
because natural gas is, you know, a 40 percent reduction in 
greenhouse gasses. We have a 100-year supply. The technology, I 
believe, is there. I think we are going to find that there is a 
safe path forward. So, if we could just take a focus on that. 
And then my time has run out, but I am going to submit a 
question in writing about exporting natural gas and the pending 
application you have for southwest Louisiana.
    Secretary Chu. All right. Thank you.
    Senator Feinstein. Thank you very much, Senator.
    Senator Collins.
    Senator Collins. Thank you.
    Madam Chairman, Senator Graham had to leave and asked that 
he be afforded the opportunity to submit questions for the 
record.
    Senator Feinstein. Absolutely.
    Senator Collins. Thank you.

                  DEEPWATER OFFSHORE WIND TECHNOLOGIES

    Secretary Chu, it is great to see you again. Let me begin 
by thanking you for visiting the University of Maine last June 
to see the very exciting research and development technology 
that is under way in the area of deep water offshore wind. I 
would say to my friend and colleague from Tennessee that deep 
water wind does not face the same challenges as land-based 
wind, because it can be located out of sight. And the winds are 
much stronger and more persistent offshore, so you have more 
energy produced. But there is the need for investment into the 
technologies, so that the challenges of siting wind turbines in 
deep water offshore can be met. And I am very excited about the 
work that is going on at the University of Maine.
    To bring the Secretary up to date, a key milestone was 
reached just this month in which three scale models of floating 
turbines were successfully tested. And that is providing key 
data to advance the technology.
    But one of my concerns is that our country should not lose 
the global race in developing deep water offshore wind 
technology. And if you look at this chart, and I believe the 
Secretary has it as well, we are losing the race right now. 
Consented means permitted, for those who are not into the lingo 
here. But as you can see, Europe is making considerable 
investments in deep water offshore wind, Asia is as well, while 
the United States really lags. And yet, this offers the 
potential of providing clean domestic energy to large 
population centers in close proximity to wind resources.





    I am pleased to see the investment that the DOE is making. 
And just for the record, to make sure that I understand the 
Department that you have submitted, it is my understanding that 
you just delivered the operating plan for the remainder of 2011 
to the Appropriations Committee this week. And it includes 
funding under the category of Advanced Technology Demonstration 
Project-Wind Energy. And just to clarify, it is the intention 
of the Department to do a competitive solicitation for deep 
water wind energy using some portion or all of that funding?
    Secretary Chu. If it is deep water, the answer is yes.
    Senator Collins. And that is the answer I was hoping to 
hear, so I am pleased that that is the case.
    Senator Alexander made a very important point, that we have 
these technologies that are not going to be able to move 
forward unless we have a partnership with the Federal 
Government, with State government, and with the private sector. 
And I believe that that investment of $26.3 million will help 
jump start the investment.
    I would note that the State of Maine has passed a bond 
issue and is providing millions of dollars for this as well. 
And we have also put together a consortium of private companies 
in Maine that are investing. And we are working with a company 
that is partially owned by the Netherlands that also is 
investing in this technology. But it really is very exciting.
    Can you give me some idea of what the time table for 
putting out the solicitation for that $26 million is?
    Secretary Chu. I would need to get back to you on the 
details of it, but we hope it is soon. Again--see? This is 
really good. You are on a roll--in a couple of weeks.
    Senator Collins. That is also great news because I think it 
is important that we move forward.
    Secretary Chu. I think the best news is Senator Alexander 
actually said a kind word for wind.
    Senator Collins. Believe me; that made my day. I sent him a 
little note.
    Secretary Chu. Because I read his book.
    Senator Collins. I mentioned that there is a consortium in 
Maine; it is called the Deep Sea Wind Consortium, which is led 
by the University of Maine. But it is a broad-base 
collaborative effort that involves 35 partners, including the 
State of Maine, academic institutions, nonprofits, utilities, 
and industry leaders. And what we have found is that kind of 
collaborative interdisciplinary approach is absolutely 
essential when you are trying to spur innovation further.
    When there are a lot of Federal agencies that are involved 
in the effort to jump start offshore wind, and I am hoping that 
we can see a similar collaboration among the Federal agencies 
and departments that are involved so that we can avoid 
duplication and maximize efficiency, and stretch those 
resources.
    Could you share with us how DOE is working, particularly 
with the Department of the Interior, which has some permitting 
responsibilities, but there are other Federal partners as well, 
like NSF, the Fish and Wildlife Services.
    Secretary Chu. Yes. I think because these are, you know, 
largely going to be in Federal waters that is the Department of 
the Interior's jurisdiction, that they are very supportive of 
this. But, of course, you know, you have to go through the 
necessary requirements because of exactly what you said there, 
you know. There could be environmental concerns, and you have 
to make sure that you examine them in a thoughtful about them.
    But I think there is a general acknowledgment. If you can 
get the technology to work and that is an if and so is the 
research. The opportunity for offshore wind and deep water wind 
is there. It is closer to population centers. It is steadier, 
and the siting problems are not as great as long as, you know, 
environmentally we make sure that that is okay. So, the 
opportunity is great, but it is one of reliability and 
technology.
    And again--and so that is why we chose to shift the 
research. We think onshore wind is a mature technology. And so, 
to focus on the more innovative aspects and that is why we 
repositioned the program.
    Senator Collins. Thank you, thank you for your efforts, and 
thank you, Madam Chairman.
    Senator Feinstein. Thank you very much, Senator Collins.
    Senator Collins. Thank you, Senator Alexander.
    Senator Feinstein. Senator Murkowski.
    Senator Murkowski. Thank you, Madam Chairman. And 
Secretary, welcome. Good to see you as always.
    I have a whole laundry list of questions, and many of them 
are questions that were asked of you at the hearing before the 
Energy Committee back in February--February 16. And I did not 
have an opportunity to ask all of the questions, and so we 
submitted them for the record to be received in writing. We 
have not yet----
    Secretary Chu. Really?
    Senator Murkowski [continuing]. Received those responses, 
so I wanted to alert you to that because some of the questions 
I am going to ask you now are hopefully ones that you have 
already asked and they are in the mail. But if I can just let 
you know that we are still awaiting some of those.
    Secretary Chu. I apologize for that. We were trying to get 
our system to be more responsive and quicker, but I will look 
into that.
    Senator Murkowski. Well, we will look forward to receiving 
them.

                           GEOTHERMAL FUNDING

    I wanted to ask you just a little bit about the budgets 
increase for geothermal. Your budget calls for an increase in 
funding. It is actually a tripling in funding from $101 
million--to $101 million from existing $43 million. Kind of 
pleasantly surprised me because I am a big advocate of 
geothermal and what we can do with that resource.
    But the question to you this morning or this afternoon is 
whether or not the Department will be able to spend this out in 
a timely way. We have, and you have been updated on this, but 
we have been dealing with a project in NecNec, Alaska, an 
enhanced geothermal project that we feel has great prospect, 
great hope, and we are really encouraged about it. It is 
exactly what the Department has supported in the past. But the 
sponsors have had just a nightmare of issues in dealing with 
your Golden Field Office.
    Now, some of the issues have come about because of things 
that the sponsor was involved with. But if you are able to 
secure money in the budget for the geothermal component, what 
assurances can you give us that the Department is able to get 
these dollars out into the field in a timely manner so that we 
can move these technologies?
    Secretary Chu. I think it was remarked already before, we 
use--we have an existence proof that within DOE and within the 
Federal Government, you can create a funding organization that 
is nimble, that is thorough, that has the high standards of 
review processes, and that is RP. And we are now focusing very 
quietly on getting that way of doing business out to the rest 
of DOE. There are pockets where it is very good, and there are 
pockets where it is less good. And so, we are very committed in 
order to get these processes moving in a much more efficient 
way. And, quite frankly, it would improve the way we do things.
    And so, I will look into this because what we are finding 
is sometimes we have a field office that is almost in 
competition with central headquarters, and then all of a 
sudden, the Freedom of Information Act, they start to debate 
what is going on.
    Senator Murkowski. Well, I am glad that you recognize that 
because that seems to be the sense that we have as we are 
working with constituents on this. So, if you can look into 
that. But again, from the bigger perspective, we want to make 
sure that if these dollars are directed this way that actually 
they are being translated out into the field.

                             YUCCA MOUNTAIN

    Let me ask you about nuclear and section 302 of the Nuclear 
Waste Policy Act that requires the establishment of the Nuclear 
Waste Fund, collecting fees from the utilities, and contained 
within that--the act, it expressly identifies Yucca Mountain as 
the sole permanent repository. And it further directs you as 
the Secretary to propose an adjustment to the fee that is 
collected from the utilities if the amount collected is 
insufficient or in excess of the amount that is needed to meet 
the costs of construction.
    So, given where we are with the attempted withdrawal of the 
Yucca Mountain license application, do you believe that the 
fees that are collected and deposited within the fund are in 
excess of the amount that is needed? Do you think an adjustment 
of the fee is in order? Where do we go with the collection of 
fees given the status right now in Yucca?
    Secretary Chu. Well, you are right. The status of Yucca is 
yet to be determined. It is in the Nuclear Regulatory 
Commission (NRC) and also in the courts. But regarding the fee, 
we still have a responsibility to deal with their spent fuel.
    And again, a draft recommendation from the Blue Ribbon 
Commission is we do see a need for--they have suggested--again, 
it is just a draft, but they have suggested both interim 
storage sites and also--but eventually as--again, it is going 
to be dependent on the technology going forward at interim 
storage sites, but there will be an eventual time if we develop 
the technologies--recycling--that after that there would need 
to be a permanent waste disposal site, and most likely 
underground.
    Senator Murkowski. Understanding all that, but insofar as 
what is happening right now with the collection of the fees----
    Secretary Chu. Right.
    Senator Murkowski [continuing]. Is the Department, are you 
as the Secretary, looking at whether or not an adjustment might 
be appropriate, given the fact that you have this withdrawal 
that is pending?
    Secretary Chu. Right. We have looked at it, and I think 
your question, if I would rephrase it is, okay, right now it is 
in limbo. That does not mean that going into the future we have 
this responsibility. We do have this responsibility.
    Senator Murkowski. We do, yes.
    Secretary Chu. And because of that, if we--I think it would 
be unwise to say, okay, for the next 5 or 10 years no fee until 
we have a plan going forward, have a slow steady--but we will 
need to--but it is, you know, it is a virtual bank, if you 
will, as you well know.
    Senator Murkowski. Well, and I think the frustration has 
been that, well, if there is a plan in place, I can understand 
why I should be depositing fees. But if there is no plan, you 
are just asking for a collection of fees that seemingly is not 
going to go anywhere. I understand and I think you and I both 
agree we have to deal with the repository issue. But I think 
you can also understand some of the frustration that the 
utilities have out there.
    I am over my time. I thank you, Mr. Secretary. Thank you, 
Madam Chairman.
    Senator Feinstein. Thank you very much, Senator Murkowski.
    Senator Murray.

   OFFICE OF ENVIRONMENTAL MANAGEMENT (EM) BUDGET AND NUCLEAR CLEANUP

    Senator Murray. Thank you very much, Madam Chairman. 
Secretary Chu, welcome to the subcommittee, and I am sure that 
you and everyone else in this room today knows what I am going 
to ask you about, obviously Hanford Nuclear Reservation in my 
home State of Washington.
    As you well know, Hanford is the largest Federal nuclear 
clean-up site in the country, and it is part of the larger 
complex that is run by the Department's Environmental 
Management program.
    When you go back through DOE's lineage, the Department 
actually was created to manage nuclear activities, and the 
Federal Government has a fundamental and legal responsibility 
to clean up the contamination that has been left behind by our 
Nation's nuclear weapons production activities.
    So, I am concerned that that this administration does not 
seem to take these legal obligations seriously because I look 
at the budgets and see that you continue to increase programs 
that do not have any legal obligations associated with them, 
but EM remains largely flat. And I do not think I am the only 
one of my colleagues on the subcommittee that is concerned 
about that.
    So, I wanted to ask you today, what is your plan to 
increase the EM budget to meet our legal commitments on 
cleanup?
    Secretary Chu. Well, first, because of ARRA, and as you 
well know, with your help and others the clean-up program 
received an additional $6 billion in ARRA. Thanks to this 
additional funding, we feel that we can meet our legal 
commitments in 2011-2012, not only in your State, but in 
Tennessee, in South Carolina, and in other States.
    Beyond 2011-2012, we will need to look at our budget 
requirements. With our current budget request we feel 
comfortable through 2012. What is going to happen to our 2012 
budget, which is what this hearing is about, is a real 
question. And, you know, we put in a request in 2011, and in 
2011 we did not get the full amount of that request in the 
continuing resolution. And so, we have to make adjustments.
    I think all the States that have nuclear waste concerns, 
are very concerned about this as well. I think you were not 
here, but Senator Alexander said that Tennessee has nuclear 
concerns. They have a higher density of population. There are 
not only nuclear concerns there are also mercury waste concerns 
there as well.
    So, what we need to do is try to make the best technical 
assessment of the things that have the highest risk and 
remediate the risk in the most efficient way possible. That is 
where we are.
    EM has done a very good job in a number of projects that 
are ahead of time and ahead of budget. However the waste 
treatment plant is at risk for going over budget, so we have 
diverted additional funds to the waste treatment plant so that 
we can----
    Senator Murray. Well, let me get into that for just a 
minute--in just a minute. But overall, the only legal 
obligations that your Department has are for nuclear weapons 
cleanup and waste storage. And it is disappointing that we have 
to fight the administration year after year after year to meet 
those legal obligations. I am sorry I missed your testimony; I 
had another obligation. But I did read it and it highlights 
significant increases in a lot of other program offices, 
including those without any legal obligations. And so, it is 
troubling to see the EM budget, which is the legal obligation, 
continue to struggle, and the Department is asking for funds 
for other programs. So, I will ask you about some specifics.
    I appreciate the work that the Department has done on the 
waste treatment plant and its use of independent reviews, like 
the construction project reviews. However, I have to tell you I 
am concerned about the singular focus on the waste treatment 
plant. I have been very clear with you and everyone in the 
Department and in the administration that if the administration 
intends to move forward with the proposed modified funding 
profile for the waste treatment plant, the only successful way 
to achieve that is for the administration to increase funding 
for the entire EM program to make sure that we meet the legal 
obligations across the complex. And to be very frank with you, 
I just do not see that happening in you keeping up your side of 
the obligation.
    The waste treatment plant is a priority, but we cannot 
increase funding for that and decrease funding for other legal 
obligations to meet that proposed funding level. So, that is my 
question to you, is how are we going to meet all of those legal 
obligations? The only way to do it is to increase the entire EM 
budget.
    Secretary Chu. Well, yes. As I said, because of ARRA 
investments, we will be meeting our legal obligations in the 
coming couple of years. After that, there is a concern and I 
will be honest with you there. But also, the President put in a 
large increase in the Energy budget in part because of the 
nuclear security issues, but also in large part because we 
think that the investments in the R&D and some deployment 
activities will position the United States for future 
prosperity. Yes, we do not have legal obligations there, but I 
think we have to make these calls as to what would be in the--
with whatever funds the Congress gives us, what would be the 
best----
    Senator Murray. But I do not see how you can say, well, we 
cannot meet our legal obligations, but we are going to increase 
funding elsewhere in DOE.
    Secretary Chu. Well, as I said, because of ARRA and the $6 
billion----
    Senator Murray. Well, and we are talking about fiscal year 
2012 and beyond.
    Secretary Chu. No, fiscal year 2012, I think we will be 
meeting our legal obligations. And then after that, it again 
depends on what the budgets are going to be. The legal 
obligations of our waste legacy, our cold war legacy, is 
something which is, quite frankly, the third-largest Government 
liability. This could be hundreds of billions of dollars. And 
we need to develop a plan going forward, not just for me, but 
my successors, on how do you meet these liabilities. And, 
again, this again goes back to how to best spend that money. 
And so, in order to meet these obligations in the limited 
budget scenario, there are ways that we can do our business 
better in EM.
    Senator Murray. Mr. Secretary, it has to start with the 
request from DOE stating this is our priority, we have to meet 
our legal obligation, and this is what I expect your Department 
to do, and that is why I am disappointed.
    But I have to say that it is a legal obligation. It is a 
moral obligation. It is a real obligation. We have waste at our 
nuclear facilities that is leaking toward the Columbia River, 
and we expect your Department to let the Congress know what the 
obligation is and how we meet it within your budget. And that 
is what I am requesting.
    Secretary Chu. All right.
    Senator Feinstein. Thank you very much, Senator Murray. And 
I am going to begin a second round, and you might just want to 
stay for this first question.

                       SPENT NUCLEAR FUEL STORAGE

    I have become very interested in the nuclear fuel cycle, 
particularly following Daiichi. We have 104 nuclear power 
plants in this country; California has 2. To my understanding, 
we have around two dozen plants that are of the same model as 
the boiling water reactors at Daiichi. Now, when others have 
said, we have better technology, Daiichi comes back and says, 
well, we upgraded ours to meet that as well.
    In looking at the two nuclear power plants in California, 
and particularly the spent fuel part of it, which is what 
Senator Murray is really referring to in a sense, the fact that 
these spent-fuel pools are really, to some extent, fallible. 
They are restacked. They can have large numbers of rods in 
them. In our State, they are kept there for as long as 24 
years. The ranking member and I had the head of the NRC, Mr. 
Jaczko, before us, and he said, well, this is good for 100 
years. Candidly, I do not know how anybody knows that this 
stuff is good for 100 years.
    What I also saw were the dry casts and the transference of 
the rods into the casts. When I asked questions, I was told, 
well, these casts were specially built for transfer to some 
form of repository.
    I have really come to my own conclusion that the way we 
best protect Americans is by having some regional facilities 
where the storage of nuclear waste can be done over the 
hundreds of years, supervised by the Government. Otherwise, who 
knows what Mother Nature will bring down? I mean, I never 
remember funnel clouds in the Pacific. I never remember the 
level of hurricanes that we have had. Now, last night, the 
television said a tornado may be on the ground in a part of 
Virginia, so who knows what might happen?
    I am very concerned that we really need to pay attention to 
spent fuel and what happens to it. I have caught you unaware, I 
am sure. But if you have any comments on this subject, I 
certainly would appreciate hearing them.
    Secretary Chu. Well, okay, I think regarding the spent 
fuels, certainly the accident at Fukushima Daiichi is something 
that we are paying and the NRC especially is paying a lot of 
attention on. Again, it is in NRC's jurisdiction, but there 
is--it is certainly true that when you have a pool of spent 
fuel with water that it is a higher risk than dry cast storage 
where you have just natural air circulation. You do not have to 
worry about something that could breach the pool and things of 
that nature. It is just very passive, and it is more robust.
    And so, certainly I will transition to that so-called dry 
cast storage is something that I anticipate will be happening. 
That is, I think, one of the recommendations--the preliminary 
draft recommendations of the Blue Ribbon Commission, you know. 
I do not want to second guess what the NRC is going to--going 
to be doing about this, but certainly it is something that they 
are saying, yes, that there will be a number of interim--
interim being these dry cast facilities in the United States, 
and I believe that is one of their recommendations, at least in 
draft.
    Senator Feinstein. Good. Good. I was very impressed with 
the testimony of a Dr. Moniz, M-o-n-i-z, from MIT--on the 
subject.

                LOAN GUARANTEE PROGRAM/CREDIT SUBSIDIES

    Let me go to one of my favorite issues, your renewable loan 
guarantee program. I believe you have just $200 million in the 
budget for that and that you have sent letters to 50 renewable 
energy developers who had applied for loan guarantees saying 
their applications were on hold because DOE believed these 
would have difficulty making the September 30 construction 
start requirement.
    I do not know how we developed wind and solar power without 
a very aggressive loan guarantee program. Really, I thought we 
had it, and putting these projects on hold with so little in 
your budget really concerns me because I do not know anybody 
that can do it without a loan guarantee.
    Secretary Chu. So, the reason we looked at this has to do 
with the fact that if you did not have it at a certain time--a 
conditional loan that goes through the approval process, that 
you have conditions that would have to be met, and then you 
would actually have to start on the project before September 
30.
    And so, we looked at the portfolio of our projects. We 
could, with these conditional loans, see that we could use the 
remaining funds. But we did not think it would be fair to those 
companies to continue investing in this knowing that as we 
approach this September 30 deadline where they still would have 
to do other things--they would have to secure the 20 percent 
funding, there would be other conditions, and each loan was 
different. So, we felt that it would not be fair to say, so it 
is put on hold until there is a path going forward and whether 
it is going to be continued funding.
    We have asked for continued funding. I know that Senators 
Bingaman and Murkowski are looking at other mechanisms for 
financing these things. And I am supportive of a capital loan 
program and want to work with the Congress on that.
    Senator Feinstein. Well, thank you very much. We will see 
what we might be able to do, and we will certainly consult you.
    So, I have to excuse myself. Senator, I am going to speak 
on the floor for the nominee that the vote is pending on at 
4:30 p.m., so may I turn it over to you, and you can go full 
bore.
    Senator Alexander. I will go for it.
    Senator Feinstein. Thank you.
    Senator Alexander [presiding]. I will just have a couple of 
questions. I was going to follow up on Senator Feinstein's 
about the loan guarantees. Since nuclear power produces 70 
percent of our carbon-free electricity, and renewable--and 
other renewables produce a few percent, why should nuclear 
power have to pay for its loan guarantee subsidy and wind and 
solar not be?
    Secretary Chu. Well, because there was a--somewhat before 
my time, but the reasoning was that nuclear power is a more 
mature technology. Also fossil fuel has to also, in the 1703 
program, have to pay for their credit subsidies, and that the 
nuclear loans actually should get lower credit subsidy scores. 
I mean, the first one, the one we did do with Southern and 
others had a, you know, a pretty modest grade subsidy. And so, 
but it was felt that because it was a more mature technology.
    Now, you know, things have changed, and so----
    Senator Alexander. Well, did you just testify that wind was 
a mature technology?
    Secretary Chu. Wind is a mature technology, and if we are 
going to fund--well, it is a mature technology in the sense 
that if we are going to fund and research and develop it, we 
would rather fund research and development it in offshore wind 
and, particularly, deep offshore wind.
    Senator Alexander. Well, I am all for offshore wind 
research and development, but I am just wondering if wind is a 
mature technology and it produces a puny amount of intermittent 
power, why you give it, in addition to paying for its loan 
guarantees, why you pay for its loan guarantees and not pay for 
nuclear power's loan guarantees.
    Secretary Chu. Again, well, first, you know, we are----
    Senator Alexander. It is not as if we are building a lot of 
nuclear plants right now. I mean----
    Secretary Chu. Right. So, we have put in a request for 
research in nuclear energy, which I am very pro for. And so, I 
think that to be--but regarding the loans, for example, again, 
if you look at the companies that before had been putting 
forward loan applications, they have the assets and things that 
one could actually say that they--and there is not as much of a 
structure for the deployment of wind. And as that goes forward, 
I think, you know, we----
    Senator Alexander. Well, Mr. Secretary, there is a 2.1 cent 
subsidy for all----
    Secretary Chu. Right, right.
    Senator Alexander [continuing]. The wind power produced in 
the country, which is costing taxpayers $26-plus-billion just 
over the next 10 years. And you do not have anything like that 
for nuclear power.
    Secretary Chu. Yes and no. I mean, I think there is no 
production tax credit, for example.
    Senator Alexander. Right.
    Secretary Chu. I agree with that completely. But, you know, 
the people who are against nuclear feel that there are other 
things that the U.S. Government does for nuclear. And so, gosh, 
I thought you were pro wind.

                      SMALL MODULAR REACTORS (SMR)

    Senator Alexander. I am pro research, including offshore--
the offshore wind. Let me ask you one last question, and then 
we will conclude. You have a request in your budget for 
research for the small modular----
    Secretary Chu. Right.
    Senator Alexander [continuing]. Reactor, which I know you--
is a priority of yours. My question--and it is of mine, and it 
is of many, many people. It looks like it could be an 
opportunity for the United States, given our experience with 
small reactors with the Navy that these could be reactors that 
we could build here, sell here, lead the world in building, and 
they would be cheaper. And so, there is a nice scenario ahead 
of us for SMRs perhaps.
    So, my question is, is the amount of money that you have 
requested for this year, what will that permit you to do, and, 
two, are you set up--are you organized to learn anything from 
the United States Navy and its experience since the 1950s with 
small reactors?
    Secretary Chu. Okay. So we preliminarily requested a large 
fraction of that would be to help firms complete their 
engineering designs for NRC approval so they can go forward. 
There is another fraction of, a smaller part, that would be for 
essentially research and development that could complement what 
is being done in the history books.
    We feel that if there are things that--you know, if 
industry can invest in the research and do it, you know, we 
would like them to do it, but if there are other things----
    Senator Alexander. Well, part of your money, if I 
understand it, goes to pay for things that the NRC would 
normally pay for. I mean, you are helping them pay for some of 
their work, is that right or wrong?
    Secretary Chu. No. It is actually to help the companies 
complete engineering design that NRC would require of them.
    Senator Alexander. Okay.
    Secretary Chu. Okay. So, it is really to help the companies 
complete engineering, just as we help with the AP1000 
engineering design. Now, we do have a lot of experience. The 
companies, like BMW and others, that have participated in the 
nuclear--Navy--certainly have experience in there, certainly 
one of the companies that want to go forward and try to get 
licensing from the NRC.
    It is a very different type of reactor. The Navy reactors 
are highly enriched uranium reactors. The newest generation 
will be designed so that they last the whole life of the summer 
in 40 years, a very high-performance reactor. As Admiral Donald 
said, when I first time boarded it at DOE, I asked him, you 
know, can we use your experience with nuclear reactors in the 
Navy, and particularly the summer E-fleet, because this is an 
SMR in the civilian fleet. And he kind of looked at me and 
said, you cannot afford my reactors. They are very high-
performance reactors.
    But there are things that do leak over, and some of the 
companies that build the Navy reactors are--want to go forward 
with the licensing. The most critical thing, again, is we are 
looking at what can we add value to to help industry move along 
in a path that we think is important. But as I think we both 
agree, that SMRs are a totally different model for how to drive 
up safety, drive up the effectiveness and drive down the costs 
and to recapture the nuclear lead. And so, that is why I have 
been out in front and pushing SMRs. I think it is an 
opportunity--very different because the economy of scale of 
building a very large one--you know, 1,000 to a 1,500 megawatt 
reactor, because of all of the fixed costs of siting and 
licensing and everything else.
    Now, you build an assembly line plant that you can ship not 
only anywhere in the United States, but anywhere in the world. 
And you can--and then you can right size the generation to the 
transmission infrastructure at that site. So, it is a very 
different model, but it means that you have to be able to 
essentially mass produce these reactors with that economy of 
number.
    You know, it is not proven that we can do this, but we 
think that there is an opportunity there, and we were also 
trying to engage with industry and the right economic models to 
do this so that--the utility companies--and it also, it is bite 
sized. If you have to spend $8 billion they think very hard 
about that because you are spending a large fraction of the 
company assets on this next project. If it were delayed a year 
or two, that would have financial consequences. When it is a 
factory-generated thing, a lot of those things go away, because 
you can stamp them out. And so, the uncertainties and delays in 
schedules, there is another real opportunity. It takes away a 
lot of the uncertainty people might have about the industry.

                 NUCLEAR FUEL RODS AND DRY CAST STORAGE

    Senator Alexander. Senator Feinstein mentioned before she 
left that the Chairman of the NRC has said that in their 
judgment, used nuclear fuel rods could be stored safely for up 
to 100 years. Do you have any reason to disagree with that?
    Secretary Chu. I think the fuel rods and dry cast storage 
is a determination the NRC has, and what I know about it, that 
appears to be correct. Different than spent fuels and wet 
storage because of things we saw in Fukushima. I do not think 
the NRC said that spent-fuel pools were, you know--you want to 
go to dry cast storage.
    Senator Alexander. No, I think he did.
    Secretary Chu. Oh, he really did?
    Senator Alexander. Yes. I mean, well, there is nothing 
inherently--I mean, the problem is, as long as you have 
electricity and water, your spent-fuel pool should be perfectly 
safe, should they not?
    Secretary Chu. Well, I do not want to contradict Chairman 
Jaczko.
    Senator Alexander. Well, I do not want to misrepresent him 
either, so maybe I----
    Secretary Chu. So, I will----
    Senator Alexander. Maybe I heard him wrong. But the--in the 
first place, you cannot put these rods in the dry cast storage 
immediately, is that correct?
    Secretary Chu. That is correct.
    Senator Alexander. It takes several years before they are 
cool enough to put into dry cast storage.
    Secretary Chu. That is correct. I think----
    Senator Alexander. During that time, you have no reason to 
think that they are in a----
    Secretary Chu. No.
    Senator Alexander [continuing]. In a dangerous condition 
when stored under NRC regulations on site.
    Secretary Chu. Right. No, I agree with Chairman Jaczko on 
that, that, first, you are absolutely right. For the first 5 or 
6 years, they are too hot to be air cooled. And the way, as I--
actually, the way these spent fuels--we have backup systems in 
case the main water supply is interrupted there. There is 
secondary piping and things of that nature.
    Senator Alexander. Well, there are second, third, fourth, 
and fifth redundancies. Well, I mean, I went to Watts Par with 
one of the commissioners recently, and I asked the question, I 
mean, if one--if the backup electricity system goes down, there 
is another electricity system, and then there is another one.
    Secretary Chu. Right.
    Senator Alexander. And then there is finally a way to get 
water in even if all of it goes down.
    Secretary Chu. I think that is absolutely what we need.
    Senator Alexander. So, there is enough water--if there is 
enough available water, the fuel rods would be safe, is that 
not right?
    Secretary Chu. Right, right. And so, you know, can I be 100 
percent guaranteed that nothing would--no, but I think there 
are these backup systems that I feel safe about, okay? And so, 
I would, but without trying to contradict NRC and Chairman 
Jaczko, I think dry cast storage, if you do not have water, you 
do not have that. It would be more robust, but that does not 
mean that the current storage system is endangering Americans.
    Senator Alexander. Okay. Well, thank you, Dr. Chu, for 
coming today.

                     ADDITIONAL COMMITTEE QUESTIONS

    At this time I would like to ask the subcommittee members 
to submit any additional questions they have for the Secretary.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
              Questions Submitted by Senator Patty Murray
                        environmental management
    Question. Mr. Secretary, in your oral testimony you mentioned the 
need to find ways to do business better when referring to Environmental 
Management. I've been pleased to hear about site wide management for 
infrastructure and support services at Hanford.
    Please tell me how this new approach is working and whether it 
would be beneficial at other sites across the Department of Energy 
(DOE) complex.
    Answer. The Department's purpose for the creating a Mission Support 
Contract (MSC) was three-fold:
  --to make it possible for multiple contractors (which is why the MSC 
        concept is particularly well-suited for the Hanford site) to 
        focus on performing their different short- and long-term 
        environmental clean-up mission;
  --to create a scalable infrastructure that can shed excess capacity 
        and its associated costs over time as the clean-up mission 
        progresses; and
  --to provide efficient and effective delivery of infrastructure and 
        site services in support of the clean-up mission.
    DOE developed an aggressive and comprehensive Performance 
Measurement Evaluation Plan (PEMP) that assigns all award fee to 
specific strategic outcomes of the contract. To date, MSC at Hanford is 
achieving the three objectives established for this acquisition. Since 
the start of the contract period in August 2009, the MSC has increased 
service responsiveness to the clean-up mission by implementing 
benchmarked service standards and a broad range of service performance 
measures that obtain feedback from the clean-up contracts regarding 
costs, effectiveness, and quality of services provided. Thus far in the 
contract period of performance, the MSC has greatly increased the 
scalability of the IT infrastructure and leads the DOE complex in 
innovation and efficiencies in this area. Currently, the MSC is 
increasing capacity where required to support the operation of the 
Waste Treatment Plant. Award fee was assigned to the development of an 
Infrastructure Services Alignment Plan to provide a comprehensive plan 
developed in cooperation with other Hanford Site contractors for the 
realignment of the existing infrastructure to meet the future needs of 
the clean-up mission.
    It was anticipated early in the development of the acquisition 
strategy that this approach, if successful, would be a strong candidate 
for implementation at other Environmental Management (EM) sites.
    The primary assumption that a mission support contract would enable 
more focus on the part of the site contractors tasked with the clean-up 
mission (since time of award in 2009) has been proven valid and it is 
felt that with the experience gained, the Department is in a prime 
position to leverage this strategy across the EM complex.
    Question. Secretary Chu, obviously both you and I would like the 
fiscal year 2012 budget request of $6.1 billion to advance through the 
appropriations process to ensure that the Department can meet its legal 
commitments.
    However, in the event that the Congress does not enact an Energy 
and Water Development appropriations bill by September 30, can you 
please tell me how the Department would determine interim funding 
levels for the EM program?
    Answer. We are hopeful that the Congress will complete work on the 
2012 appropriations bill by September 30, 2011, and do not want to 
speculate about hypothetical future scenarios.
    Question. If the Department uses the fiscal year 2011 final year-
long continuing resolution as a base number going into fiscal year 
2012, what will the impacts be at each site in the EM complex in terms 
of work scope, regulatory compliance milestones, and jobs?
    Answer. We are still analyzing the effects of the 2011 funding 
levels and do not want to speculate about hypothetical future 
scenarios.
                         loan guarantee program
    Question. Secretary Chu, I appreciate your leadership in getting 
the Loan Guarantee program up and running and commend you on efforts 
made thus far, including 28 conditional commitments for loan 
guarantees.
    I understand that last week, the Loan Programs Office sent letters 
to all pending section 1705 loan guarantee applicants, indicating that 
DOE was either putting projects ``on hold'' or moving them through the 
section 1705 process.
    I know that most of these companies have spent significant amounts 
of both time and money to prepare their applications and to comply with 
due diligence requirements, and I am very concerned that a large number 
of companies who have already spent a lot of money are facing a very 
uncertain path forward.
    Can you please tell me how many applicants were in each category--
``moving forward'' versus ``on hold''?
    Answer. The Department notified 17 applicants that their 
applications were moving forward and notified 42 applicants that their 
applications are on hold.
    Question. Of the applicants that were moved forward, did the 
Department include any companies, including affiliate companies, with 
more than one application pending in the section 1705 program?
    Answer. The projects we support are large and complex, and each one 
involves multiple parties, including developers, sponsors, EPC 
contractors, equity participants, advisors, and--in Financial 
Institution Partnership Program transactions--other lenders. Sometimes, 
on a given project, the same entity (or its affiliates) may play more 
than one of these roles. There are entities that are involved, in some 
capacity, in more than one of the projects that were moved forward 
under 1705.
    Question. If so, how many of those companies or their affiliates 
have one or more applications pending? How many applications for each 
of those companies are moving forward?
    Answer. As discussed above, given the many roles that exist in the 
context of each project, it is difficult to provide a precise number in 
response to this question.
    Question. Have any of the companies in the ``moving forward'' 
category already been approved for a loan guarantee under the section 
1705 program?
    Answer. There are entities involved in the ``moving forward'' 
category that are also involved in other projects that have already 
been approved for a loan guarantee under the section 1705 program.
    Question. What are the specific criteria the Department used to 
determine which letter--again, moving forward or ``on hold''--an 
applicant received?
    Answer. The Department based its decision on an application's 
readiness to proceed. Specifically, we identified those projects most 
likely to be in a position to reach financial close and commence 
construction by the 1705 program's congressionally mandated September 
30, 2011 expiration date. These projects received ``moving forward'' 
letters. All other 1705-eligible projects in our pipeline received the 
``on hold'' letter. It was important to notify these companies that we 
do not expect them to receive a loan guarantee under the 1705 program 
as soon as possible, so that they could avoid spending further time and 
resources unnecessarily.
    Question. What is the likelihood that one of the remaining section 
1705 applicants is not able to meet the program's equity requirements?
    Answer. As is always the case, there can be no guarantee that any 
given project will ultimately receive a conditional commitment or, if 
it does, that it will meet all conditions precedent to financial close 
in a timely manner. That said, DOE's decision to move forward with 
certain projects was based on our analysis of the project's ability to 
meet our programmatic requirements by the September 30, 2011 sunset 
date.
    Question. If such a situation occurs, what is the Department's plan 
to ensure those funds are made available to otherwise qualified 
applicants whose applications were put on hold?
    Answer. DOE determined that the projects placed on hold were 
unlikely to reach financial closing by the program's September 30, 2011 
expiration date.
    Question. How will the Department determine those pending 
applications (that have been put on hold in the section 1705 program) 
which will be eligible to access the $170 million in credit subsidies 
appropriated in the fiscal year 2011 year-long continuing resolution 
under the section 1703 program?
    Answer. We are currently working to develop a process for 
implementing this new provision.
    Question. What is the Department's plan to quickly and efficiently 
move those section 1705 applicants to the section 1703 pool?
    Answer. Pursuant to the fiscal year 2011 continuing resolution, 
some of the projects with active 1705 applications (including those put 
on hold) are eligible for the section 1703 program (most of these 
projects would have been eligible for 1703 in any event, provided they 
satisfy certain restrictions in the applicable budget authority). 
Projects eligible for 1703 will not need to submit a new application to 
be considered for a guarantee under that program.
    Question. Will this information be made available to the Congress 
and the applicants?
    Answer. The Department will continue to ensure that applicants and 
the Congress are appropriately informed of programmatic developments.
    Question. How many companies are currently in the application pool 
for the section 1703 program?
    Answer. DOE currently has approximately 20 active applications from 
projects that are eligible for the 1703 program, but not the 1705 
program.
    Question. How will the transfer of eligible applications from the 
section 1705 program affect the current section 1703 program?
    Answer. There will be significant competition among qualified 
applicants for the appropriated funds under 1703.
    Question. What criteria will the Department use to determine how 
the $170 million in credit subsidies will be distributed among the new 
pool of section 1703 applicants?
    Answer. We are currently working to develop a methodology for 
implementing the programmatic changes and appropriations included in 
the fiscal year 2011 continuing resolution.
    Question. What is the Department's commitment to the Loan Guarantee 
program for renewable energy projects going forward?
    Answer. The Department is committed to the Loan Guarantee program 
which aims to accelerate the domestic commercial deployment of 
innovative and advanced clean-energy technologies at scale. Under the 
1705 program, DOE has issued loan guarantees for 28 projects 
representing more than $16 billion in loan guarantees for projects that 
will create more than 16,000 direct jobs.
                          water power program
    Question. Secretary Chu, I like what you have said about hydropower 
being an ``incredible opportunity'', our ``lowest cost, clean energy 
option'' and your comments about adding this resource to our clean-
energy portfolio. And as you know, marine and hydrokinetic power is a 
promising source of renewable energy.
    Despite your positive comments, you are yet again proposing to cut 
the Water Power program, as you have every year. In fact, it is only 1 
of 2 programs to be cut in Energy Efficiency and Renewable Energy 
(EERE), which received an increase of $1.4 billion more than fiscal 
year 2011 enacted levels. I do understand that we are facing tough 
budget times, but I fail to understand the logic behind your cut of 20 
percent to the Water Power program when you have increased the budget 
for wind, solar and geothermal.
    Why isn't the Water Power program more of a priority for the 
Department?
    Answer. The Department remains optimistic about the opportunities 
to further develop the full range of water power technologies, 
including emerging marine and hydrokinetic (MHK) energy technologies. 
Given the current state of MHK development, we believe that the $38.5 
million requested for water power research in fiscal year 2012 is 
sufficient to continue the program's ongoing efforts to advance these 
water power technologies and accelerate their greater market adoption. 
We are currently completing a comprehensive set of resource 
assessments, and undertaking detailed techno-economic assessments of 
emerging technologies, which will help us to effectively determine the 
opportunities and costs associated with these technologies. These 
important analyses will help the Department determine what funding 
levels are necessary and appropriate to realize water power's 
potential.
    Regarding hydropower--as you know, hydropower accounts for about 7 
percent of our Nation's total electricity generation. And you and I 
have both applauded a recent National Hydropower Association study 
showing the potential to double existing hydro capacity and create 1.4 
million jobs. There's a lot going on in hydro--from low-impact hydro to 
small projects to increasing efficiency and output at existing 
projects. And while hydro is a more mature technology than some others, 
developing technology innovations is still important. As you know, we 
continuously work to develop innovations in other resources--from 
automobiles to other renewable energy resources like wind--and I 
believe we should be doing so with hydro as well.
    Question. Would you agree that doubling our hydro capacity is 
doable, and necessary? What is your plan to make this happen?
    Answer. DOE agrees that substantial increases in hydropower 
capacity, including pumped storage, from a baseline of about 100 GW in 
2009 are feasible by 2050. New hydropower development is possible 
across several different resource types, including:
  --capacity upgrades and efficiency improvements at existing 
        hydropower facilities;
  --adding power plants at existing, nonpowered dams;
  --installing new hydropower power capacity on constructed waterways; 
        and
  --new environmentally sustainable hydropower at natural streams.
    As most of the traditional concerns over environmental impacts 
typically associated with hydropower generation can be effectively 
mitigated through technology improvements and sustainable development 
practices, these opportunities present a low-cost, renewable energy 
resource that can help meet the administration's clean-energy economy 
goals.
    The Department has a multi-pronged approach to assist industry in 
increasing hydropower capacity. We are currently completing a set of 
resource assessments, undertaking detailed techno-economic assessments 
of existing hydropower plants, and engaging in research, development, 
and deployment of emerging technologies. The Department announced a 
Conventional Hydropower Funding Opportunity in 2011 that will help spur 
the development of conventional hydropower including pumped storage 
hydropower. Current Department-funded projects such as the Hydropower 
Advancement Project and water use optimization project will help the 
hydropower industry implement best practices to increase power 
production and assess their plants for capacity and efficiency 
upgrades. The Department has also funded an innovative ``fish-
friendly'' turbine project, a turbine design that allows fish to safely 
pass through the hydropower turbine. This will allow industry to 
install hydropower units at locations where water is otherwise spilled 
to allow for fish passage.
    Question. Regarding ocean and tidal energy, I believe you are aware 
that my home State of Washington has made a strategic decision to be an 
international leader in the commercialization of the emerging ocean 
renewable energy industry. As you know, the United States has 
significant ocean, marine, and tidal energy resources. Development of 
the technologies to capture these ocean energy resources can play a 
significant role in our Nation's economic recovery and expand our 
renewable energy portfolio.
    I strongly support the efforts underway in Washington and am proud 
of the work being done in my State to capture the jobs that will be 
created by the design, construction, and deployment of wave energy 
converters. For example, the University of Washington and Snohomish 
Public Utility District are working hard to support this new domestic 
clean electricity generation industry that has the potential to provide 
up to 10 percent of our Nation's power needs.
    Unfortunately, the United States is falling behind in the race to 
capture the rich energy potential of our oceans, and the jobs that will 
come with this new industry. Many countries, particularly in Europe, 
have already deployed viable, operating, electricity generating 
projects using the emission-free power of ocean waves, currents, and 
tidal forces. The Ocean Renewable Energy Coalition calculates that more 
than $370 million US has been spent by the UK Government on wave energy 
research and development (R&D) over the past several years. That total 
approaches $500 to $600 million US over the same period if you add in 
commitments to ocean energy R&D from France, Portugal, Spain, Norway, 
and Denmark.
    Given this competitive situation, I am particularly disappointed 
with the fiscal year 2012 budget request for the Water Power program
    While the Congress has provided increased funding for the Water 
Power program, I'm disappointed that the Department hasn't been more 
aggressive in its efforts to help commercialize this technology. We 
need the enthusiastic support of you and your senior leadership team to 
help speed the deployment of ocean energy technologies and secure U.S. 
leadership in this emerging clean-energy industry.
    What is your plan to stop the United States from losing these jobs 
to Europe?
    Answer. DOE's Water Power program is building a comprehensive 
understanding of emerging MHK technologies and facilitating innovation 
and technology development that leverages previous advancements, 
including those made in Europe. In order to promote the development of 
a competitive MHK industry in the United States, DOE's Water Power 
program is supporting the establishment of three national test centers. 
These centers are planning to build open-water testing infrastructure, 
which will allow the developers of MHK devices to efficiently test in a 
realistic marine environment.
    DOE's Water Power program is also developing state-of-the-art 
technology design tools that simulate the behavior and performance of 
MHK devices in complex marine environments (covering tidal/ocean 
current and wave resources). These models will identify key cost-of-
electricity drivers, facilitate rapid design optimization, and support 
detailed techno-economic assessment of MHK technologies as is required 
per congressional direction. Ultimately, the analytical results 
provided by these design tools will guide the Department's future 
investment decisions by identifying not only technology leaders but 
also the best opportunities to make these technologies cost competitive 
with other energy portfolio options.
    The program recently funded three full-scale MHK demonstration 
projects, including a $10 million grant to the Snohomish Public Utility 
District tidal energy project. In funding these advanced projects, the 
program seeks to demonstrate successful MHK operation and testing in 
U.S. waters and drive the development of future projects.
    Finally, the program is strategically working to remove barriers to 
deployment by engaging in research that answers questions regarding the 
potential environmental impacts of MHK technologies and by developing 
technologies to monitor and mitigate these potential impacts. 
Collectively, these efforts are strategically aimed at advancing a 
domestic MHK industry that can contribute to our Nation's clean-energy 
future.
    Given the early stage of MHK development, the Department is taking 
a very deliberate and comprehensive approach to our investments in MHK 
technologies. Future investments (Federal and private sector) will spur 
economic development only if the technologies can be proven to be 
competitive in the market place. Our efforts to spur such economic 
development are focused therefore on proving marketplace 
competitiveness of the technologies, and ultimately supporting the 
development of a competitive U.S.-based MHK industry that will create 
green jobs in the United States.
    Question. I am concerned that your budget request does not support 
development of a testing infrastructure in the United States, something 
that is vital to ensure this industry can move forward. For example, 
Europe currently has several wave and tidal energy test facilities, 
including its main facility in Scotland. We clearly have a need for 
this infrastructure here in the United States, and I know that the 
Northwest National Marine Renewable Energy Center (NMREC) has a strong 
desire to compete for funding to establish a testing center in the 
Pacific Northwest.
    Can you please comment on why your budget request does not support 
development of such testing infrastructure and can you tell me your 
plan to build it?
    Answer. The development of an MHK technology testing infrastructure 
in the United States is considered vital to helping ensure that the 
industry can continue to progress toward commercialization. To advance 
the MHK industry, the Department continues to invest in, and support, 
three NMRECs. The Northwest NMREC, the Hawaii NMREC, and the Southeast 
NMREC are important partners in the ongoing development of a viable MHK 
industry in the United States.
    The Department is currently undertaking quantitative assessments of 
the energy that can be extracted from wave, tidal and ocean current, 
and ocean thermal energy resources, and is preparing a comprehensive 
techno-economic assessment of MHK technologies and resources. This 
information will serve to identify the potential contribution that MHK 
resources can provide to our Nation's energy mix, and will also point 
to promising technologies that merit further investment. This 
information will inform the Department's future investment decisions, 
including testing facilities.
                  hydrogen and fuel cell technologies
    Question. I understand that the primary goal of the DOE Fuel Cell 
Technologies program is to advance fuel cells, including those that 
provide backup power, to be competitive in the marketplace. The market 
transformation program has been successful in meeting this goal by 
introducing fuel cells to larger markets and competing effectively in 
terms of life-cycle costs, performance, durability, reliability, and 
significantly reduced greenhouse gas emissions.
    Given the program's success, why does your budget request zero out 
the market transformation program, right when it's gaining traction?
    Answer. The Department's strategy is to sustain a balanced R&D 
portfolio, with an emphasis on nearer-term priorities, such as 
batteries, advanced vehicle technologies, and technologies for 
renewable power and energy efficiency. Fuel cell electric vehicles 
(FCEVs) are still part of the portfolio of options under development. 
In fact, DOE's increased funding for battery R&D will also be 
beneficial for FCEVs which rely on batteries in addition to fuel cells.
    The Department will continue its critical efforts in hydrogen and 
fuel cell R&D, which have already reduced the cost of fuel cells by 
more than 30 percent since 2008 and 80 percent since 2002.\1\ In fact, 
DOE's hydrogen and fuel cell program has been extremely successful, 
resulting in approximately 200 patents, 30 products being put on the 
market, and industry currently pursuing development of more than 50 
emerging technologies.\2\ The fiscal year 2012 budget sustains DOE's 
core R&D efforts which will continue to advance the technologies and 
improve the likelihood of a successful rollout by automobile 
manufacturers in the coming years.
---------------------------------------------------------------------------
    \1\ http://hydrogen.energy.gov/pdfs/10004_fuel_cell_cost.pdf.
    \2\ http://www1.eere.energy.gov/hydrogenandfuelcells/pdfs/
pathways.pdf.
---------------------------------------------------------------------------
                    solar energy technology program
    Question. Secretary Chu, your fiscal year 2012 budget request for 
the Solar Energy Technology program represents an increase of nearly 50 
percent more than the fiscal year 2011 budget request, and an increase 
of 87 percent more than the fiscal year 2010 enacted level. However, 
your budget request includes only $50 million for the Concentrated 
Solar Power (CSP) program, and as I understand it, you are proposing an 
approximately 8 to 1 ratio of funding in favor of Photovoltaics (PV) 
over CSP.
    Given that the United States still co-leads both technologically 
and commercially in the CSP field, do you believe that the Department 
should maintain a more balanced funding ratio between PV and CSP?
    Answer. The administration's 2011 budget request for CSP included 
$50 million for a Solar Demonstration Zone which would help validate 
cutting-edge CSP and other concentrating solar technologies. This was 
in addition to a base CSP R&D program of approximately $50 million. The 
administration did not seek additional funding for the Solar 
Demonstration Zone project in 2012 as it is unlikely that these funds 
could be fully utilized in 2012 if funds were also provided through the 
2011 budget. The request for base CSP R&D for 2012 is consistent with 
the request in 2011. As part of the 2012 budget request, the 
administration also announced its SunShot initiative which seeks to 
reduce the cost of electricity from solar technologies by 75 percent by 
the end of the decade to be competitive with conventional generation 
sources of electricity without subsidy. The administration believes 
this is an ambitious but achievable goal. For 2012, the 
administration's funding request for the SunShot initiative has been 
largely designated through the Photovoltaic Research and Development 
subprogram. We believe, however, that CSP technologies also have the 
potential to reach the SunShot Initiative goals and are assessing this 
potential as part of our future portfolio balance.
   advanced cable and conductors program (formerly high temperature 
                        superconducting program)
    Question. Mr. Secretary, your budget request proposes to zero out 
the High Temperature Superconducting program (recently renamed the 
Advanced Cable and Conductors program). I understand that your 
justification is that the program has met its technical milestones. 
However, as you may be aware, other countries--namely China, Japan, and 
Korea--are aggressively demonstrating and deploying high-temperature 
superconducting systems and the United States is not.
    Given this, I believe it doesn't make sense for the Department to 
eliminate this program prior to the demonstration and deployment of 
high-temperature superconducting (HTS) systems, including advanced 
cryogenic and cryocooler systems.
    Do you agree?
    Answer. HTS is an integral part of Smart Grid technologies that can 
provide for a more reliable, secured and efficient electricity delivery 
infrastructure. After investing more than $600 million over the past 20 
years, second-generation HTS wires in sufficient lengths with good 
performance can now be produced by U.S. manufacturers. These wires are 
beginning to be sold around the world, and are the primary components 
in many international demonstration projects.
    With the availability of these commercial wires, the Department's 
Office of Electricity Delivery and Energy Reliability (OE) believes 
that HTS wire research has reached a point that second-generation HTS 
wire technology can be successfully transitioned to the U.S. 
manufacturing base. While OE is winding down its involvement in HTS 
wire research, it continues to support several innovative HTS system 
demonstration projects funded through the American Recovery and 
Reinvestment Act. These power systems include a grid-scale HTS fault 
current limiter, HTS power cable, and HTS fault current limiting 
transformer.
    In addition, DOE's Advanced Research Projects Agency-Energy (ARPA-
E) is supporting a project to develop an advanced HTS superconducting 
magnetic energy storage system that will store significantly more 
energy than current designs at a fraction of the cost. Moreover, I am 
aware of HTS system demonstration projects that are being performed by 
other agencies. For example, the Department of Homeland Security is 
investigating the feasibility of a HTS fault current limiting power 
cable that can enable connectivity between electrical substations to 
share power in case of emergencies. And at the Department of Defense, 
the Navy is developing innovative HTS applications and advanced 
cryogenic systems for military usage.
    To summarize, while OE is winding down its second-generation HTS 
wire research activities, DOE and other agencies are continuing to 
support the development and deployment of innovative HTS system 
applications. By studying the fundamental science of superconductivity, 
engaging in HTS systems development, and keeping up-to-date on 
worldwide progress in HTS wires and systems research, DOE will be in a 
position to take advantage of any significant HTS discovery and 
innovation.
    Question. If the United States eliminates programs that will 
encourage the demonstration and deployment of high-temperature 
superconducting technologies, I am seriously concerned that this will 
be another example of our Nation inventing and developing a promising 
advanced energy technology, only to lose commercial leadership to other 
countries, as happened with wind turbines and photovoltaic systems.
    Given your focus, and the President's focus, on innovation, can you 
please tell me your plan to ensure this situation does not happen with 
high-temperature superconducting technologies?
    Answer. Superconductivity is a crosscutting technology that can 
benefit energy applications in many fields of use. For the past 20 
years, the Department has focused its wires research and applications 
development activities in power delivery systems. With the Department's 
support, second-generation HTS wires manufactured in the United States 
are now available commercially and prototype HTS power systems have 
been demonstrated.
    To maintain U.S. leadership in superconductivity, however, 
fundamental understanding of HTS needs to be obtained and more novel 
superconductors need to be discovered. In addition, HTS applications 
other than power delivery systems should be developed to broaden the 
market and sustain the U.S. manufacturing base. Moreover, a more 
strategic approach to developing advanced HTS materials and conductors 
and means to integrate them into a nonsuperconducting Smart Grid 
infrastructure need to be established.
    In the area of basic superconductivity research, DOE's Office of 
Science Energy Frontier Research Center for Emergent Superconductivity 
is performing work to discover new superconductors. Furthermore, the 
Office of Science supports basic research on synthesis, advanced 
characterization, and theory to understand fundamental phenomena 
related to superconductivity. To broaden the HTS market, a number of 
DOE offices are considering the benefits of various applications 
ranging from light weight superconducting generator for offshore wind 
turbines to very high field superconducting magnet systems suitable for 
scientific and medical applications. Moreover, the fiscal year 2012 
request for the Office of Electricity Delivery and Energy Reliability 
includes a Smart Grid Technology and Systems Hub, which can leverage 
crosscutting technologies and capabilities developed under the 
superconductivity program to impact this and other energy applications.
    The Department believes that the United States will maintain its 
leadership position in superconductivity by fully implementing the plan 
to understand and discover novel superconductors, demonstrate 
innovative and diverse HTS applications to broaden the market base, and 
develop advanced materials and systems that will integrate seamlessly 
into a reliable, secured, and efficient Smart Grid infrastructure.
                      clean renewable energy bonds
    Question. Secretary Chu, the fiscal year 2012 budget request 
proposes another 1-year extension of the 1603 Treasury grant program to 
incentivize renewable energy. As you know, 1603 only applies to private 
developers and utilities; it is not available to consumer-owned 
utilities like many of those in Washington State. The Clean Renewable 
Energy Bond (CREBs) program is available to those municipal and rural 
cooperative utilities to incentivize renewable resources.
    Given that increasing the CREBs bonding level would help the 
administration achieve its 80 percent clean-energy goal, would the 
administration support an increase in the CREBs program?
    Answer. The administration recognizes the instrumental role that 
CREBs have played in catalyzing investment in renewable energy by 
nontaxable entities as a complement to other incentives such as Federal 
tax credits. Raising the cap on CREBs is one among several policy 
measures that can encourage investment in renewable energy, which is 
consistent with administration policy objectives for a clean-energy 
economy.
                                 ______
                                 
               Questions Submitted by Senator Tim Johnson
    Question. I appreciate the administration's commitment to the 
research and development necessary to advance renewable energy. 
Cellulosic biomass has a promising future for both transportation fuel 
and power production, and it is important that we understand how much 
biomass can be produced sustainably and economically for bioenergy. To 
this end, the Department of Energy (DOE) has supported the development 
of the Regional Feedstock Partnership, a collaborative effort of 
Federal agencies, national laboratories, and universities that is now 
into its third and fourth year of field work.
    The DOE budget justification suggests that the United States 
Department of Agriculture (USDA) will take a lead in sustainable 
feedstock production beginning in fiscal year 2012. That may be a 
reasonable approach; however, I have several questions regarding the 
impacts to the Regional Feedstock Partnership and ongoing research 
within DOE Office of Biomass programs.
    My understanding is that the development of the Regional Feedstock 
Partnership was reviewed and approved by the Office of Management and 
Budget. The program has enjoyed bipartisan support and has been 
included in the administration budget requests for the last several 
years. In fiscal year 2012, however, the administration proposed to 
greatly reduce the Sustainable Feedstocks funding account that supports 
the Partnership.
    Is the reason for reducing the Sustainable Feedstocks account due 
to the intent to shift the lead on biomass feedstocks to USDA?
    Answer. On February 3, 2010, The White House issued Growing 
America's Fuels: An Innovative Approach to Achieving the President's 
Biofuels Target.\3\ This document established lead agency 
responsibility for each biofuel area supply chain segment. USDA was 
identified as the lead for both Feedstock Development and Feedstock 
Production Systems, and was directed to coordinate with DOE to enhance 
the work being conducted by the Regional Feedstock Partnership. In an 
effort to help align feedstock activities with each agency's expertise 
and minimize redundant focus areas, the emphasis for DOE feedstock-
related funding was shifted to focus primarily on feedstock logistics 
systems in the fiscal year 2012 budget request.
---------------------------------------------------------------------------
    \3\ Available at http://www.whitehouse.gov/sites/default/files/
rss_viewer/growing_
americas_fuels.PDF.
---------------------------------------------------------------------------
    Question. From your point of view, has the DOE Regional Feedstock 
Partnership been a success?
    Answer. The DOE Regional Feedstock Partnership has successfully 
established more than 100 biomass energy crop field trials in 39 States 
through the work of more than 96 university, USDA Agricultural Research 
Service, and industry scientists. DOE considers the information 
collected from the field trials to date, as well as the extensive 
relationships that have been established under the Partnership, to be 
highly valuable to the Nation's biomass feedstock production efforts. 
The March 2011 progress report ``Regional Biomass Feedstock Partnership 
Executive Summary'' details other Partnership successes to date.\4\
---------------------------------------------------------------------------
    \4\ Progress report available at http://www.sungrant.org/NR/
rdonlyres/F374DEB6-810C-4B05-9A21-26D6B0576E78/2834/
ExecutiveSummary33111.pdf.
---------------------------------------------------------------------------
    Question. After funding the Partnership for several years, is it an 
effective use of taxpayer dollars to terminate the program just as the 
field research results are beginning to come in?
    Answer. DOE plans to support the Regional Feedstock Partnership 
through fiscal year 2013. It was the original intention of DOE to 
support the Regional Feedstock Partnership for at least 6 years (fiscal 
years 2008-2013) in recognition of the need for longer-term studies 
associated with perennial biomass energy crops. These systems often 
take multiple years to establish, and the full potential of their 
productivity, as well as potential environmental services provided by 
perennial systems, cannot always be realized within just a few years. 
Conversely, field trials for annual biomass energy crops and residues, 
such as energy sorghum or corn stover, have provided valuable data from 
the first year they were established.
    Question. Would it not make more sense to complete the program for 
at least the remaining 2 years of this OMB-approved process, in order 
to get the benefit of the work that has already been done rather than 
start over and duplicate these efforts through another Department?
    Answer. USDA has been designated lead agency under Growing 
America's Fuels: An Innovative Approach to Achieving the President's 
Biofuels Target for Feedstock Development and Feedstock Production 
Systems. The difficult aspects of establishing this type of research 
program have already been addressed, including:
  --development of a nationwide network of more than 90 scientists to 
        participate in the Partnership;
  --development of comparable field management and data collection 
        protocols for nine different biomass energy feedstocks across 
        five different geographical regions; and
  --establishment of difficult and costly perennial energy-cropping 
        systems.
    These successes will be leveraged by USDA as it takes the lead on 
feedstock development and production systems.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg
    Question. The United States leads the world in fuel cell patents. 
Fuel cells can help reduce our dependence on oil and air pollution 
while at the same time creating jobs. In New Jersey, companies like 
BASF employ hundreds in their fuel cell divisions. How will the 
reductions in funding for fuel cell technology in this budget affect 
our ability to win the clean-energy race?
    Answer. The Department's strategy is to sustain a balanced research 
and development (R&D) portfolio, with an emphasis on nearer-term 
priorities, such as batteries, advanced vehicle technologies, and 
technologies for renewable power and energy efficiency. Fuel cell 
electric vehicles (FCEVs) are still part of the portfolio of options 
under development. In fact, the Department of Energy's (DOE) increased 
funding for battery R&D will also be beneficial for FCEVs which rely on 
batteries in addition to fuel cells.
    The Department will continue its critical efforts in hydrogen and 
fuel cell R&D, which have already reduced the cost of fuel cells by 
more than 30 percent since 2008 and 80 percent since 2002.\5\ In fact, 
DOE's hydrogen and fuel cell program has been extremely successful, 
resulting in approximately 200 patents, 30 products being put on the 
market, and industry currently pursuing development of more than 50 
emerging technologies.\6\ The fiscal year 2012 budget sustains DOE's 
core R&D efforts which will continue to advance the technologies and 
improve the likelihood of a successful rollout by automobile 
manufacturers in the coming years.
---------------------------------------------------------------------------
    \5\ http://hydrogen.energy.gov/pdfs/10004_fuel_cell_cost.pdf.
    \6\ http://www1.eere.energy.gov/hydrogenandfuelcells/pdfs/
pathways.pdf.
---------------------------------------------------------------------------
    Question. In response to high gas prices, some have suggested we 
need more offshore drilling with fewer safeguards. The Energy 
Information Administration found that opening all of the offshore areas 
in the lower 48 States would lower gas prices by just 3 cents per 
gallon--decades from now. How will the President's budget invest in 
real solutions to high gas prices?
    Answer. Even while committed to safe and responsible domestic oil 
and gas production, the administration has taken steps to improve 
efficiency across the entire transportation sector and to develop and 
expand alternative fuels, including advanced biofuels. Energy 
innovation will increase the potential for the replacement of 
petroleum. Therefore, the administration's budget provides increases 
for programs, such as the Advanced Research Projects Agency-Energy 
(ARPA-E), that support energy innovation. The budget helps advance the 
goal of 1 million electric vehicles on the road by 2015 including 
through a shift from the existing tax credit incentive to a rebate that 
would be available to consumers at the point of sale and a $588 million 
investment in research, development and deployment programs for 
advanced vehicle technologies. It also proposes $341 million for 
biofuels and biomass R&D within the Office of Energy Efficiency and 
Renewable Energy, including a new reverse auction to promote advanced 
biofuels across the country.
    Question. The Princeton Plasma Physics Laboratory in New Jersey 
carries out research that could lead to major innovations in energy 
technology and help make the United States a world leader in clean-
energy technology. One area of research is developing energy from 
fusion. A breakthrough in fusion energy could be the solution to the 
world's energy problems by providing the planet with a safe, clean, and 
limitless supply of energy.
    I support a significant increase in funding for the Plasma Physics 
Lab. Would an increase in funding help accelerate progress toward game-
changing clean-energy breakthroughs?
    Answer. DOE believes that the funding levels proposed for the 
Princeton Plasma Physics Laboratory are appropriate and in balance with 
other priorities within DOE and throughout the Federal Government.
                                 ______
                                 
               Questions Submitted by Senator Tom Harkin
                                biofuels
    Question. Secretary Chu, as you know, biofuels are a remarkable 
success. They displace close to 10 percent of our gasoline demand. 
While we can and should also be promoting other oil displacement 
alternatives, such as electric vehicles, continued expansion of 
biofuels seems to be the best option we have for displacing another 10 
percent of our gasoline demand. The Congress recognized that in passing 
the renewable fuel standard (RFS) in the 2007 Energy bill.
    Biofuels also face a major marketplace problem. Most biofuel usage 
today is in the form of E10, a 10 percent blend of ethanol with 
gasoline. As we continue to expand the contribution from biofuels, we 
need to remember that a large share of that will continue to be in the 
form of ethanol. Thus, we need to be able to use higher ethanol blends. 
We need filling stations that offer higher blends, and we need vehicles 
that can use those higher blends.
    What is the Department of Energy (DOE) doing to promote the 
availability and use of higher blends of ethanol, beyond E10 and E15? 
What more could the Department do, and what support from the Congress 
would be most useful to that end?
    Answer. In addition to sponsoring the E15 and E20 test program, 
DOE's Office of Energy Efficiency and Renewable Energy (EERE) supports 
several activities to promote higher ethanol blend usage. Specifically, 
the Energy Policy Act of 1992 requires that Federal, State, and utility 
fleets acquire alternative fuel vehicles (AFV) annually at determined 
percentages. These vehicles largely include flex-fuel vehicles that are 
capable of operating on E85 fuel. EERE's Vehicle Technologies Program 
(VTP) and Federal Energy Management program manage and monitor AFV 
acquisitions and alternative fuel usage in those fleets. Additionally, 
VTP and the Biomass Program are sponsoring fuel dispensing research 
with Original Equipment Manufacturers and Underwriter's Laboratory to 
develop and list E15 dispenser retrofit kits that can be installed in 
retail stations throughout the country. Through the State Energy 
program and the Energy Efficiency and Conservation Block Grant program, 
EERE has encouraged recipients to use money for installing renewable 
energy infrastructure. Last, DOE is actively working with Federal 
agencies to install alternative fuel pumps at fueling stations, in 
accordance with Energy Independence and Security Act of 2007 
requirements. DOE also supports ongoing research to ensure that fuel 
dispensed by blender pumps meets American Society for Testing and 
Materials (ASTM) specifications.
    Question. One program that could help expand markets for higher 
ethanol blends is the Clean Cities program. How much funding in the 
Clean Cities program will be devoted to expanding markets for E85 and 
other higher blends in fiscal year 2012, and what will that accomplish?
    Answer. The Department agrees that the Clean Cities initiative is 
an excellent way to expand alternative fuel markets. The President's 
fiscal year 2012 budget request for Vehicle Technologies Deployment 
includes $29 million for Clean Cities activities to facilitate the 
deployment of renewable and alternative fuels and advanced 
technologies, as well as the infrastructure to support their widespread 
use. Clean Cities funds would support competitively awarded vehicle 
infrastructure deployment projects, including E85 and other renewable 
biofuel vehicle projects; the funding opportunity would require a 
minimum 50 percent cost share. Clean Cities funds also would be used to 
provide technical assistance, tools, and consumer information related 
to renewable and alternative fuels and advanced technologies that 
reduce petroleum consumption. Examples include safety information 
related to renewable fuels for permitting officials and first 
responders, GPS data and mapping tools for locating renewable fuel 
stations (the current public database includes more than 3,000 sites 
for E85 and B20 biodiesel), and the Federal Fuel Economy Guide and 
FuelEconomy.gov, which include vehicle information on E85 flex-fuel 
vehicles available in the United States.
    Question. When we met with your Deputy Secretary Dan Poneman and 
with EPA Administrator Lisa Jackson last August, we learned that DOE 
was testing E20 in a fleet of autos in parallel with your testing of 
E15. What are the results of those tests, please? Would those tests 
support authorizing use of E20 in all vehicles of model year 2001 and 
newer?
    Answer. DOE is in the process of testing the final four vehicle 
models on E20 fuel. The test results are expected to be ready by 
December 2011. As you know the E15 testing was completed in December 
2010 and the waiver request was ruled upon by EPA in January 2011 
largely based on DOE data. The EPA determination allows up to E15 
blends to be used in all model year 2001 and newer vehicles. Any 
decision to allow E20 use for the same model year vehicles would have 
to be determined by EPA. DOE will continue to share the data with EPA 
as it becomes available.
    Question. We share a belief in the importance of accelerating the 
development and commercialization of advanced biofuels, and I am 
pleased that you are proposing to conduct a reverse auction for 
advanced biofuels in fiscal year 2012. I believe conducting an earlier 
reverse auction, in this fiscal year 2011, would be a good way to get 
some experience with this process for both DOE and the industry.
    Will you conduct an initial reverse auction for advanced biofuels 
in fiscal year 2011? Please tell me when the fiscal year 2012 auction 
will take place.
    Answer. The Department had originally planned to conduct an initial 
reverse auction in fiscal year 2011; however, because many of the 
companies planning to build biorefineries to produce cellulosic 
biofuels have been delayed due to economic conditions, it was decided 
to postpone the proposed auction until fiscal year 2012. It was felt 
that a larger auction would validate the concept and result in a more 
meaningful effect on the marketplace. The timing of the fiscal year 
2012 auction will depend on several factors including industry 
conditions and the budget process.
                        hydrogen and fuel cells
    Question. Secretary Chu, in the early 1990s, I was one of the first 
in the Congress to call for research and development (R&D) of hydrogen 
and fuel cell technologies in the DOE's energy programs. I was pleased 
when these technologies were given legitimate program status in the 
DOE's energy R&D portfolio along with reasonable funding within that 
portfolio. I'm told that this program has been quite successful in 
meeting its goals and milestones. However, your budget proposal for 
fiscal year 2012 proposes a very significant cut to this program area.
    Why are you proposing to cut the hydrogen and fuel cells program 
budget by 41 percent in fiscal year 2012 in the context of a proposal 
for an overall budget increase of 46 percent across all of the EERE 
programs?
    Answer. The Department of Energy's (DOE) strategy is to sustain a 
balanced R&D portfolio, with an emphasis on nearer-term priorities, 
such as batteries, advanced vehicle technologies, and technologies for 
renewable power and energy efficiency. Fuel cell electric vehicles 
(FCEVs) are still part of the portfolio of options under development. 
In fact, DOE's increased funding for battery R&D will also be 
beneficial for FCEVs which rely on batteries in addition to fuel cells.
    The Department will continue its critical efforts in hydrogen and 
fuel cell R&D, which have already reduced the cost of fuel cells by 
more than 30 percent since 2008 and 80 percent since 2002.\7\ In fact, 
DOE's hydrogen and fuel cell program has been extremely successful, 
resulting in approximately 200 patents, 30 products being put on the 
market, and industry currently pursuing development of more than 50 
emerging technologies.\8\ The fiscal year 2012 budget sustains DOE's 
core R&D efforts which will continue to advance the technologies and 
improve the likelihood of a successful rollout by automobile 
manufacturers in the coming years.
---------------------------------------------------------------------------
    \7\ http://hydrogen.energy.gov/pdfs/10004_fuel_cell_cost.pdf.
    \8\ http://www1.eere.energy.gov/hydrogenandfuelcells/pdfs/
pathways.pdf.
---------------------------------------------------------------------------
                            distributed wind
    Question. Secretary Chu, we're all aware of the benefits of large-
scale wind projects in the United States, and I'm especially proud of 
the leadership role Iowa is playing in windpower manufacturing and 
power generation. However, there also is great potential for smaller-
scale ``distributed wind'' projects. In fact, smaller wind turbine 
systems can often result in outsized benefits to rural communities, 
farmers, ranchers and other citizens. Small wind systems also offer a 
domestic manufacturing development opportunity given that 95 percent of 
the small wind systems installed in the United States in 2009 were 
manufactured domestically. Moreover, much of that manufacturing 
activity is occurring in economically challenged rural areas.
    In fiscal year 2010, DOE spent approximately $80 million on 
research, development, and demonstration (RD&D) for wind energy, but 
only about 2 percent of that total, about $1.6 million was for small- 
and medium-sized wind.
    Given the significant contributions that distributed wind can make 
to our rural economy and our clean-energy future, do you think that the 
Department ought to place more emphasis on this important renewable 
energy technology?
    Answer. In fiscal year 2010, roughly $5.9 million, approximately 
7.4 percent, of the total DOE budget for wind energy RD&D went to 
distributed wind energy technology, including small (greater than 1 
kilowatt and less than or equal to 100 kilowatts) and midsize (greater 
than 100 kilowatts and less than or equal to 1 megawatt) technologies. 
While distributed wind technology remains a part of the portfolio, the 
Department has recently increased its emphasis on less mature offshore 
wind technologies, as indicated by the President's fiscal year 2012 
budget request. DOE nevertheless plans to continue to support 
activities related to product testing, standards development, and the 
establishment of an accredited third-party certification body for small 
wind turbine technology. The Department also plans to fund the 
remaining $3.2 million of a $5.1 million funding opportunity to support 
midsize turbine prototype development by the close of fiscal year 2011.
    The Department plans to consider research and development efforts 
that build on this funding opportunity to ensure that a range of 
domestically manufactured midsize turbines is commercially available. 
Other planned future program activities include risk mitigation through 
demonstration projects, testing, and standards development to support 
the development of the midsize turbine technology. The Department also 
plans research and development on high-throughput manufacturing 
techniques for wind technologies in order to remain cost-competitive in 
the export market while supporting domestic jobs.
    Question. Will you agree to take a close look at DOE's wind power 
program very soon and take steps to increase DOE's focus and support 
for distributed wind power?
    Answer. The DOE Wind and Water Power program is supporting the 
development of a distributed wind industry roadmap to be completed in 
2012. This roadmap will be a reference document to help the wind 
industry prioritize strategic activities required to overcome barriers 
hindering widespread development and deployment of distributed wind 
technology. Currently, the program supports activities related to 
product testing, standards development, and the establishment of an 
accredited third-party certification body for small wind turbine 
technology. The program also plans to fund the remaining $3.2 million 
of a $5.1 million funding opportunity to support midsize turbine 
prototype development by the close of fiscal year 2011.
    The Department plans to consider research and development efforts 
that build on this funding opportunity to ensure that a range of 
domestically manufactured midsize turbines is commercially available. 
Other planned future program activities include risk mitigation through 
demonstration projects, testing, and standards development to support 
the development of the midsize turbine technology. The Department also 
plans R&D on high-throughput manufacturing techniques for wind 
technologies in order to remain cost-competitive in the export market 
while supporting domestic jobs.
                                 ______
                                 
               Questions Submitted by Senator Jon Tester
                               fuel cells
    Question. Fuel cells are manufactured in America from American raw 
materials, and produce clean energy that uses American resources 
efficiently. Montana is home to the only platinum mine in the country, 
which provides the catalysts for stationary and vehicle fuel cells. 
Montana also has the largest recoverable coal reserves in the United 
States and though fuel cells are viable now, they also offer a 
potential future for coal, as they are the most efficient way to use 
any fuel, including fossil fuels. I feel very good about the progress 
fuel cell manufacturers have made and will continue to make in reducing 
the amount of platinum used in these catalysts, to bend down the cost 
curve.
    The industry believes that the best way to continue those 
reductions is through commercialization, but that your fuel cell and 
hydrogen budget misplaces priorities with an over-emphasis on research 
and development R&D, while eliminating commercialization support for 
solid oxide fuel cells and fuel cell forklifts, just as they are 
beginning to achieve market success. Is the industry wrong?
    Answer. The Department's strategy is to sustain a balanced (R&D) 
portfolio, with an emphasis on nearer-term priorities, such as 
batteries, advanced vehicle technologies, and technologies for 
renewable power and energy efficiency. Fuel cell electric vehicles 
(FCEVs) are still part of the portfolio of options under development. 
In fact, DOE's increased funding for battery R&D will also be 
beneficial for FCEVs which rely on batteries in addition to fuel cells.
    The Department will continue its critical efforts in hydrogen and 
fuel cell R&D, which have already reduced the cost of fuel cells by 
more than 30 percent since 2008 and 80 percent since 2002.\9\ In fact, 
the Department of Energy's (DOE) hydrogen and fuel cell program has 
been extremely successful, resulting in approximately 200 patents, 30 
products being put on the market, and industry currently pursuing 
development of more than 50 emerging technologies.\10\ The fiscal year 
2012 budget sustains DOE's core R&D efforts which will continue to 
advance the technologies and improve the likelihood of a successful 
rollout by automobile manufacturers in the coming years.
---------------------------------------------------------------------------
    \9\ http://hydrogen.energy.gov/pdfs/10004_fuel_cell_cost.pdf.
    \10\ http://www1.eere.energy.gov/hydrogenandfuelcells/pdfs/
pathways.pdf.
---------------------------------------------------------------------------
    Question. Both fuel cell and hydrogen researchers and the industry 
believe that if your fiscal year 2012 budget is enacted, its structure 
and dollar amount will cause the United States to lose its competitive 
edge in fuel cells for stationary power and transportation 
applications. Is the industry wrong? If not, are you comfortable losing 
this industry to Germany, Japan, South Korea, China, and South Africa?
    Answer. To the contrary, the Department's basic R&D work is 
absolutely essential to ensuring American automakers have the best 
technology available to be competitive in the global marketplace.
                            distributed wind
    Question. Secretary Chu, while we're all aware of the myriad 
benefits of large, industrial-scale wind projects in the United States, 
there is great potential for smaller-scale ``distributed wind'' 
projects as well. In Montana, we have second-best wind potential in the 
United States. In fact, smaller wind turbines or projects can often 
result in outsized benefits to rural communities, farmers, ranchers and 
other citizens. And buy-in for smaller wind translates into social 
acceptance of larger-scale projects.
    It can also help to reinvigorate our Nation's manufacturing base 
given that 95 percent of the small wind systems installed in the United 
States in 2009 was manufactured domestically and much of that 
manufacturing activity occurred in economically challenged rural areas.
    In fiscal year 2010, DOE spent approximately $80 million on 
research, development and demonstration (RD&D) for wind energy, but 
only about 2 percent of that total, about $1.6 million was for small- 
and medium-sized wind. By contrast, your agency spent roughly $250 
million on solar RD&D in that same time period.
    Given the significant contributions that distributed wind can make 
to our rural economy and our clean-energy future; do you think that the 
Department ought to place more emphasis on this important renewable 
energy technology?
    Answer. In fiscal year 2010, roughly $5.9 million, approximately 
7.4 percent, of the total DOE budget for wind energy RD&D went to 
distributed wind energy technology, including small (greater than 1 
kilowatt and less than or equal to 100 kilowatts) and midsize (greater 
than 100 kilowatts and less than or equal to 1 megawatt) technologies. 
While distributed wind technology remains a priority for DOE, the 
Department has recently increased its emphasis on less mature offshore 
wind technologies, as indicated by the President's fiscal year 2012 
budget request. DOE nevertheless plans to continue to support 
activities related to product testing, standards development, and the 
establishment of an accredited third-party certification body for small 
wind turbine technology. The Department also plans to award the 
remaining $3.2 million of a $5.1 million funding opportunity to support 
midsize turbine prototype development by the close of fiscal year 2011.
    The Department plans to consider research and development efforts 
that build on this funding opportunity to ensure that a range of 
domestically manufactured midsize turbines is commercially available. 
Other planned future program activities include risk mitigation through 
demonstration projects, testing, and standards development to support 
the development of the midsize turbine technology. The Department also 
plans research and development on high-throughput manufacturing 
techniques for distributed wind technologies in order to remain cost-
competitive in the export market while supporting domestic jobs.
    Question. Will you agree to take a close look at DOE's wind power 
program very soon and assess steps to increase focus and support for 
distributed wind power?
    Answer. The DOE Wind and Water Power program is supporting the 
development of a distributed wind industry roadmap to be completed in 
2012. This roadmap will be a reference document to help the wind 
industry prioritize strategic activities required to overcome barriers 
hindering widespread development and deployment of distributed wind 
technology. Currently, the program supports activities related to 
product testing, standards development, and the establishment of an 
accredited third-party certification body for small wind turbine 
technology. The program also plans to fund the remaining $3.2 million 
of a $5.1 million funding opportunity to support midsize turbine 
prototype development by the close of fiscal year 2011.
         western area power administration (wapa) transmission
    Question. As you know, in February 2009 (in the American Recovery 
and Reinvestment Act [ARRA]), the Congress provided WAPA with ample and 
broad borrowing authority to plan, finance, build, study, and operate 
new and upgraded electric power transmission lines that deliver or 
facilitate the delivery of power generated by new renewable energy 
resources. Last year in this same hearing, we discussed how little of 
that $3.25 billion in borrowing authority had been exercised. 
Unfortunately, nothing has changed and still less than 5 percent of 
that money is obligated.
    The legislation is pretty clear. The Administrator of WAPA is 
supposed to use that borrowing authority to go forth and build. That's 
not completely autonomous authority, but the Congress intended WAPA to 
be fairly independent when using it. WAPA can't run a program like the 
Congress intended if they have to renegotiate each deal with each level 
of DOE then Office of Management and Budget (OMB). The developers will 
lose interest and quit. That's just a recipe for inaction laid on top 
of all the other permitting challenges for new transmission and 
renewable energy projects.
    Mr. Secretary, what's going on? Could you describe the review and 
approval process for this borrowing authority and who is the 
transmission expert in charge at the Department for guiding this 
important program?
    Answer. When a project proposal is presented to WAPA, WAPA reviews 
the proposal and works with the project developer to address any 
deficiencies. Once this is complete, WAPA begins an analysis of the 
project, including an in-depth review by subject matter experts and 
independent examiners such as Deloitte Corporate Finance, LLC. The 
proposal is evaluated against the criteria specified for the 
Transmission Infrastructure Program (TIP) in a Federal Register notice 
published on May 14, 2009. Specific terms and conditions may have to be 
negotiated with the project developer in order to ensure there is 
reasonable expectation the Treasury borrowing will be repaid.
    When WAPA is satisfied the project has merit and is appropriate for 
borrowing authority funding, WAPA presents the project to the DOE and 
the Office of Management and Budget for their approval.
    In June, 2011, Secretary Chu appointed Lauren Azar as the 
Secretary's Senior Policy Advisor for Transmission. Ms. Azar is an 
expert on electric power transmission, and played a critical role in 
the Department's review and approval of TIP projects since her arrival.
    Question. Could you, Director Lew and Secretary Geithner lay down 
some simple guidance for WAPA that will let them get to work?
    Answer. Yes. In April 2009, WAPA signed a Memorandum of 
Understanding (MOU) with the Treasury Department that established the 
terms and conditions for loans made by the U.S. Treasury to WAPA 
pursuant to borrowing authority provided WAPA in ARRA (Public Law 111-
5). This MOU has been reviewed and revised periodically, and the 
arrangement is working well.
    Question. Could you tell us, for the record, how many miles of new 
transmission lines have been built thus far under WAPA TIP)?
    Answer. To date, to WAPA's TIP has funded the construction of 33 
miles of new transmission line. This construction is for the Montana-
Alberta Tie Ltd. Transmission Project.
    Question. How many miles for Bonneville Power Administration (BPA)? 
And, what has BPA done with the increase in their already massive 
borrowing authority provided by ARRA?
    Answer. BPA finances its operations with a business-type budget and 
on the basis of self-financing authority. Authority to borrow from the 
U.S. Treasury is available to BPA on a permanent, indefinite basis. The 
amount of Treasury borrowing outstanding at any time cannot exceed $7.7 
billion and must be repaid at interest rates comparable to borrowings 
at open market rates for similar issues. BPA's Treasury borrowing 
authority is used to finance projects that sustain and enhance the 
Federal Columbia River Power System, including transmission, hydropower 
modernization, fish and wildlife mitigation, and conservation. 
Transmission investments and enhancement use the greatest amount of 
U.S. Treasury borrowing.
    BPA's transmission system now includes more than 15,000 circuit 
miles of line and 263 substations. The capital financing required to 
sustain this system and meet new demands is significant. Before 
receiving the additional $3.25 billion of borrowing authority as part 
of ARRA, BPA estimated it would reach its Treasury borrowing authority 
limit between 2013 and 2016. The new increment of borrowing authority 
gave BPA the certainty of sufficient access to capital to proceed with 
new-start projects and ensured that existing capital projects could 
proceed as planned. With this financing certainty, BPA commenced 
construction work on two major network reinforcement projects and 
another two are in planning and environmental review stages. If all 
four lines are constructed, these lines will add more than 220 miles of 
lines to the Northwest transmission grid, improve reliability, and 
allow BPA to provide transmission service to about 5,853 megawatts of 
requests for BPA transmission; including 4,891 megawatts of additional 
wind integration and green energy. BPA has completed construction on a 
total of 75 transmission towers and 58 miles of transmission on the 
McNary-John Day line, the first project that was ready to begin at the 
time the ARRA was enacted.
    Additional upgrades, additions and replacements also have 
modernized the transmission grid assets, more than 50 percent of which 
were built prior to 1960.
    In addition to investments in the TIP system, BPA's Treasury 
borrowing authority is used for investments in hydro modernization, 
fish and wildlife, and energy efficiency. For example, with the 
additional access to capital, BPA was able to fund a major 
rehabilitation of the Grand Coulee Third Powerhouse that will improve 
hydro efficiency and is critical to the Federal Columbia River Power 
System (FCRPS) for power production, water management, system 
stability, and ancillary services to the main transmission grid. 
Because of increased access to capital, BPA is investing $203 million 
through 2017 in upgrades and replacements at Federal dams. Also, the 
additional borrowing authority has enabled BPA to fund three major fish 
hatchery projects and will help BPA meet its portion of the aggressive 
targets for energy efficiency in the Northwest Power Planning and 
Conservation Council's Sixth Power Plan. Conservation is the region's 
resource of choice for meeting load growth for the next 5 years and 
beyond.
    While BPA's total borrowing authority, including the new increment, 
is one single funding authority, as of this time, BPA has identified up 
to $2 billion in major capital projects attributed to ARRA through 
2017. Of this total, $583 million has been expended to date. The 
capital projects attributed to ARRA include several of the 
transmission, hydropower modernization, fish and wildlife mitigation, 
and conservation projects mentioned earlier.
    The additional $3.25 billion in borrowing authority has been 
instrumental in providing BPA with assurance that it can proceed with 
essential investment in the region's aging infrastructure and meet the 
increasing demands of its entire capital program. Without available 
borrowing authority, BPA would have to defer or reduce valuable capital 
work needed to keep the FCRPS delivering the clean, renewable 
electricity that is the backbone of the region's economy. Even with the 
ARRA providing a sizable increase in BPA's authority to borrow from the 
Treasury, the agency will continue to face capital funding challenges 
as the pace of capital spending increases to meet the infrastructure 
and energy efficiency needs of the region. BPA continues to seek 
opportunities for alternative funding sources with third parties.
     coordination of power marketing administrations and doe policy
    Question. The Power Marketing Administrations and Tennessee Valley 
Authority are all somewhat different animals, due to their enabling 
legislation. But, presumably, they and their Senate-confirmed board 
members are all working together with you and the administration to 
further the goals of the President--energy efficiency, renewable and 
clean energy, a more reliable and smarter grid and so on. How does all 
that work, because it's not obvious from out here that it's all hanging 
together with any specific goals in mind?
    Specifically you released a proposal to promote development of Pump 
Storage Hydro, while at the same time one of the PMAs was turning away 
companies interested in working with the Agency to develop permitted 
projects in their service territory.
    Where does it all get knitted together at the Department?
    Answer. The DOE briefed Senator Tester's staff on this issue.
    Question. Do the heads of the PMAs meet regularly with you and your 
team?
    Answer. The DOE briefed Senator Tester's staff on this issue.
                          rural implementation
    Question. While DOE is certainly the premier Federal agency dealing 
with research, development, and demonstration for energy, many other 
agencies--the Department of Agriculture (USDA), the Department of 
Defense, the Environmental Protection Agency (EPA) and the Department 
of the Interior--also have authority and resources to support Energy 
development. Along those lines you've teamed up with the Department of 
Agriculture to work on the development of biofuels. That is a good 
first step.
    But how are you coordinating with these agencies to expand 
information about your solicitations, projects and commercialization 
opportunities, especially in rural America where they develop and 
harness this energy? How about with development of distributed 
technologies? Are you willing to commit to working with your sister 
agencies to identify opportunities to expand opportunities for 
distributed wind and other technologies?
    Answer. The Department is committed to regularly engaging with 
other agencies about program activities in order to maximize 
coordination and prevent interagency overlaps. For example, regarding 
biomass-related activities, DOE regularly coordinates through the 
Biomass Research and Development Board \11\, which is an interagency 
collaborative composed of senior decisionmakers from Federal agencies 
and the White House--including DOE and USDA (cochairs); the Departments 
of the Interior, Transportation, and Defense, EPA; the National Science 
Foundation; and the White House Office of Science and Technology 
Policy. The Board is charged with maximizing the benefits of Federal 
programs and bringing coherence to Federal strategic planning in 
biomass research and development, including minimizing unnecessary 
duplication of activities. Several other interagency formal and 
informal collaborations function to leverage existing expertise across 
agencies with similar missions and goals, such as Memoranda of 
Understanding (MOU), regular working group meetings, joint 
solicitations, and other mechanisms. Examples of MOUs signed over the 
last 2 years include one on hydrogen with the Army Corps of Engineers 
and the Interior Department, one on off-shore wind, marine and 
hydrokinetic devices with the Interior Department, and an updated MOU 
with EPA on Energy Star.
---------------------------------------------------------------------------
    \11\ The Board, as well as the Technical Advisory Committee and the 
annual solicitation, were established by the Biomass Research and 
Development Act of 2000, and later amended by section 9001 of the Food 
Conservation and Energy Act of 2008.
---------------------------------------------------------------------------
                     mechanical insulation program
    Question. Mr. Secretary, Montana was part of a very successful 
pilot program, the Mechanical Insulation Education and Awareness 
Campaign, which initially received $500,000 in fiscal year 2010 through 
the DOE's Industrial Technologies Program (ITP).
    Montana performed an energy assessment in partnership with DOE and 
the mechanical insulation industry. The program looked at 25 buildings 
in the capitol complex and found that installing or replacing 
mechanical insulation in those buildings would save 6 billion Btus per 
year, representing roughly 8 percent of the total natural gas 
consumption of the facilities analyzed, with an overall payback period 
of 4.1 years.
    This is such low-hanging fruit to replace damaged mechanical 
insulation puts people to work immediately and cuts our energy 
consumption.
    How to plan to expand and invest in this successful program, 
promoting it to other States and locations?
    Answer. Through the activities conducted under the Mechanical 
Insulation program, ITP has developed 5 calculation tools that allow 
users to find cost-effective insulation opportunities such as those 
identified in Montana and to calculate ROI and paybacks. These tools, 
once broadly distributed the summer of 2011, will carry forward the 
results of the Montana pilot program and encourage similar assessments 
in all States across the United States. In addition, the Campaign has 
developed 7 online training modules that will be completed by September 
2011 that educate industrial facilities, building owners, property 
managers, and the construction industry on how to find and implement 
energy efficiency opportunities through greater and more effective use 
of mechanical insulation. Because of these self-paced tools and 
training modules, ITP believes that thousands of users can be educated 
on the benefits of mechanical insulation at little additional cost to 
DOE and the taxpayer. Success stories will be developed on Mechanical 
Insulation and promoted on the ITP Web site and disseminated through 
organizations such as equipment suppliers, the National Association of 
State Energy Officials and the National Insulation Association.
    Question. How does your budget efficiently invest in more energy 
efficiency programs we can implement today?
    Answer. ITP is collaborating with approximately 100 companies, 
helping them measure and manage their energy usage so as to demonstrate 
that significant energy savings are possible. For example, after 
receiving three energy savings audits from ITP, an automotive 
manufacturer reduced its energy intensity 29 percent in 1 year at a 
U.S.-based facility.
    Now that ITP has demonstrated that significant energy intensity 
reductions are possible, the program is developing a set of standard 
tools and protocols to increase its leverage and reach. By investing in 
these standard tools and protocols that help private sector companies 
measure and manage their energy usage, ITP is fostering the energy 
management industry. ITP is also developing Professional Certification 
programs for energy management professionals and auditors who will be 
employed in the emerging energy management industry, as part of its 
development of a broader industrial energy efficiency certification 
program.
    ITP is also investing in the training of next-generation energy 
management engineers. Since 2002, 650 graduate and undergraduate 
students have been successfully trained in energy management through 
university-based Industrial Assessment Centers (IACs). ITP plans to 
continue to train additional students through these IACs over the 
coming years.
    All of these activities are being implemented in the near term, 
will result in energy efficiency gains, and will help create jobs and 
improve the competitiveness of U.S. companies.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
    Question. I wish to thank you and the Department for maintaining 
the Hawaii office to manage the energy programs and to coordinate with 
the military, the Department of Energy (DOE), and State endeavors. The 
office has been invaluable and continues to support the development and 
implementation of alternative energy policy including those important 
to State and local efforts, partnerships between military and civilian 
efforts in the field and new partnership opportunities involving other 
nations, including Japan. It is my sincere hope that this office will 
continue in fiscal year 2012 and beyond.
    Does the Department have any plans to make meaningful commercial 
investments in ocean thermal energy conversion (OTEC)? If so, how would 
the Department mitigate any environmental concerns? What would be the 
Department's timeframe for such investments?
    Answer. As part of the Department's investments in water power 
technologies, we are currently evaluating the life-cycle costs of OTEC 
power generation and undertaking a rigorous OTEC resource assessment. 
The results of these studies will provide important baseline 
information regarding the potential contribution that OTEC could make 
to our Nation's renewable energy portfolio, as well as the cost of 
energy from OTEC. These reports, which will be completed this fiscal 
year, will serve to inform the Department's investment strategy going 
forward, and allow us to make appropriate investments across all 
renewable energy technologies. While OTEC development and production 
costs are currently estimated to be significantly higher than some 
other energy technologies, the Department has been pursuing a small 
number of targeted technology development projects that aim to advance 
technology readiness, establish a baseline for cost estimates, and 
improve the cost-competitiveness of OTEC generation.
    The Department has been working closely with the National Oceanic 
Atmospheric Administration (NOAA) and the U.S. Navy in the assessment 
of OTEC technologies, with a particular focus on the environmental 
concerns associated with OTEC power generation. In partnership with 
NOAA, DOE is developing guidelines that consider the full realm of 
potential environmental impacts, while also considering potential 
mitigation strategies. This effort includes a series of workshops with 
technical, scientific, and environmental experts from within the 
Federal Government as well as key stakeholder groups. This information 
will serve to inform our future investment strategy so that any future 
commercial development is undertaken in an environmentally sustainable 
manner.
    In order to fully evaluate the technical, environmental, and 
economic performance of a fully integrated, open-ocean OTEC system, it 
is envisioned that a demonstration project in the range of 10 MW to 100 
MW would likely be required. Initial cost estimates for plants of this 
size are $350 million to $1.1 billion. Given the magnitude of such an 
investment and the early stage of OTEC technology development, the 
Department does not envision making any investments in OTEC at this 
scale in the near future.
    Question. Does the Department plan any follow-on competitions to 
follow-up on the successes from the stimulus investment?
    Answer. The DOE intends to continue supporting the Pacific Office 
established in 2010 in Honolulu, Hawaii, and we are pleased with your 
perception of our accomplishments and progress. In August 2011, the 
Office of Electricity Delivery and Energy Reliability, with financial 
support from the Department of Defense (DOD), will be stationing a 
staff member in the J-9 office of the U.S. Pacific Command (PACOM) to 
support Command interests in energy and security issues. That staff 
member and the DOE Pacific Office staff will coordinate efforts with 
DOD while continuing the 3 years of effort with the State of Hawaii and 
other U.S. Pacific activities.
    Regarding future competitive funding opportunities, the citizens 
and government of Hawaii will be informed of future announcements. It 
is our normal practice to competitively award research and deployment 
projects. We are aware that both the Governor's office and several 
Hawaii government agencies are routinely exploring and applying for new 
project grants from DOE.
                                 ______
                                 
             Questions Submitted by Senator Lamar Alexander
                           oak ridge cleanup
    Question. Department of Energy (DOE) is requesting about $400 
million in fiscal year 2012 for clean-up activities at the Oak Ridge 
Reservation (ORR). Can you assure me the highest-risk safety concerns 
are being addressed at Oak Ridge Reservation? DOE is bartering its 
uranium inventory to help pay for costs of cleanup at the Portsmouth 
gaseous diffusion plant. Oak Ridge (East Tennessee Technology Park) is 
home to 1 of the 3 original uranium gaseous diffusion plants. Why 
shouldn't this facility (K-25) be cleaned up with funds gained in 
barter of uranium?
    Answer. The highest-risk safety concerns are being addressed at the 
ORR. The K-25 Building at the East Tennessee Technology Park (ETTP) is 
the highest-risk safety concern on the Reservation due to its age and 
deterioration, as well as the presence of special nuclear material and 
radiological and hazardous contaminants. The $400 million in fiscal 
year 2012 addresses this highest risk. For some of the other high risks 
on the ORR, such as mercury at Y-12 and nuclear materials in the 
Central Campus at the Oak Ridge National Laboratory (ORNL) 
(specifically, legacy materials at two of the former isotope production 
facilities, Buildings 3026 and 3038; and those found in the Tank W-1A 
area soils, the most significant source of groundwater contamination in 
that area), funds from the American Recovery and Reinvestment Act 
(ARRA) are being used to address these risks. As for the use of 
bartering of the uranium inventory to provide additional funding, DOE 
has established priorities for the transfer of uranium through 2013. 
The total proposed Department transfers through calendar 2013, 
including scheduled transfers by National Nuclear Security 
Administration (NNSA), are approximately 2,000 metric tons of uranium 
per year, or about 10 percent of U.S. reactor demand, which is a level 
consistent with the principles and policies set forth in the 
Department's Excess Uranium Inventory Management Plan.
                blue ribbon commission on nuclear waste
    Question. Among the draft recommendations of the Blue Ribbon 
Commission is increased Federal investment to reduce nuclear waste with 
advanced materials. Please describe how your budget for nuclear energy 
would fund research in this area.
    Answer. The Reactor and Fuel Cycle Technology Subcommittee of the 
Blue Ribbon Commission on America's Nuclear Future (Commission) 
presented draft recommendations to the full Commission. These 
recommendations of the subcommittee are draft, and subject to further 
consideration by the full Commission. The Department will carefully 
consider the Commission's recommendations and advice contained in their 
final report--due in January 2012--and determine a path forward at that 
time.
                                  arra
    Question. The DOE has roughly $2 billion in unspent ARRA funds for 
weatherization grants, and another $2 billion from the State Energy 
Grant program. Why do these balances exist, and why are additional 
funds being requested for fiscal year 2012 given the unspent balances?
    Answer. The DOE set an aggressive 3-year performance period in the 
original grant contracts to maximize the timely job creation potential 
of the funds delivered to State and local communities under ARRA. This 
timeline has supported thousands of jobs, delivered energy-saving 
technologies that will save money for families, businesses, and State 
and local governments across the Nation for many years, and spurred 
American competitiveness in the global market for energy efficiency and 
renewable energy.
    As of December 19, 2011, grantees of the Weatherization Assistance 
Program (WAP) have spent $4 billion of their total $4.8 billion ARRA 
allocation. This leaves less than $850 million remaining to be spent in 
the final 4 months of the original grant period. It is anticipated that 
some grantees will have balances remaining on March 31, 2012 and will 
request performance period modifications so funds can continue to be 
used for their original purpose of weatherizing the homes of low-income 
families. WAP has already exceeded its original ARRA production goal of 
593,000 homes weatherized with 4 months remaining and could eclipse 
700,000 homes using the balances on existing grants.
    Grantees of the State Energy Program (SEP) have spent $2.1 billion, 
or more than two-thirds of their $3.1 billion ARRA allocation. DOE is 
working with each grantee to assess opportunities to responsibly deploy 
additional ARRA funds to fully use each grant and create jobs in their 
State and local communities. The vast majority--about 90 percent--of 
ARRA grant funds by DOE's SEP will be spent within the current 
performance period on projects that have supported thousands of jobs, 
saved energy, deployed clean-energy solutions, and strengthened the 
economic foundation of communities across the country. It is 
anticipated that some grantees will have relatively small balances 
remaining on April 30, 2012, and will request performance period 
modifications that will be considered on a case-by-case basis. SEP ARRA 
investments have supported energy-efficiency upgrades of more than 
60,000 buildings and building roofs, totaling approximately 361,000,000 
square feet, upgraded and repurposed more than 625,000 square feet of 
manufacturing space to produce clean-energy products, and contributed 
to the installation of 350,000 kW of renewable energy systems. These 
projects have supported high-paying jobs in the fields of construction 
and design/engineering, manufacturing and transportation while saving 
energy and money over the long term.
    Additional funds are included in the fiscal year 2012 budget 
request to support the efforts of WAP and SEP in their proven ability 
to drive economic development and job creation and to leverage Federal 
dollars using the lessons learned under ARRA. The majority of the 
Weatherization and Intergovernmental Programs (WIP) ARRA grants have a 
performance period ending in early 2012. Even with the performance-
period modifications, the majority of ARRA funds will be expended by 
then or shortly thereafter. The need for 2012 funding is vital to 
cushion the ramp down of production and employment in the 
weatherization network and to provide State and local governments with 
support in the continued administration of more than $530 million in 
revolving loan funds initiated in 35 States and 100 communities with 
ARRA funds. ARRA funding for WAP helped fund as high as 15,600 full-
time positions in the network and still is listed as seventh in the 
ARRA portfolio with 14,200 jobs supported last quarter. In addition, 
WAP has leveraged more than $800 million each year of ARRA in Federal 
and non-Federal funding to support the weatherization work at the local 
level. This leveraging has contributed significantly to the number of 
homes weatherized and jobs supported, and has assisted in expanding the 
array of services provided in each home. SEP will also continue to 
expand and replicate the many best practices developed with ARRA grant 
funds throughout the country, leveraged by the innovative financing 
programs they have started. These types of activities continue with any 
annual appropriations provided by the Congress.
                          contracts management
    Question. The DOE has been on Government Accountability Office's 
(GAO) high-risk list for potential fraud, waste, and abuse for 
contractor oversight since 1990. According to GAO, ``GAO designated 
DOE's contract management as a high-risk area in 1990 because of DOE's 
record of inadequate management and oversight of its contractors.'' 
While the Office of Science (SC) was removed from the ``high risk'' 
status, Environmental Management and NNSA remain. What steps is DOE 
taking to improve contracts management within the Office of 
Environmental Management (EM)?
    Answer. Over the last 2 years, EM has continued to implement 
corrective actions and been recognized by GAO as having met 3 of the 5 
criteria for removal from the high-risk list. EM leadership remains 
fully committed to continuing this improvement journey. GAO also 
acknowledged positive actions for the two criteria not yet achieved. 
These actions include the establishment of clear project and contract 
management policies and guidance, use of a certified earned value 
management system by our contractors as well as ensuring our Federal 
oversight staff was certified at the appropriate level. GAO has noted 
``the steps illustrate DOE's commitment to improving its contract and 
project management, but the results of these efforts must ultimately be 
demonstrated through improved project performance.'' Toward that end, 
the current project performance data show that EM will meet or exceed 
the success criteria of completing 90 percent of capital asset projects 
within 10 percent of original cost and schedule baselines.
    The two remaining criteria which GAO has judged EM as having not 
achieved are providing the capacity, both people and resources, to 
address problems, and independent validation that corrective measures 
are effective and sustainable.
    EM has taken the following actions to address capacity:
  --EM has assigned senior, experienced project managers as 
        Headquarters Project Sponsors for three large capital projects, 
        Sodium Bearing Waste Project in Idaho, Salt Waste Processing 
        Facility at Savannah River, and U-233 Facility at Oak Ridge.
  --EM has hired a Chief Scientist to serve as a direct advisor to the 
        Assistant Secretary of EM for complex technical and design 
        issues.
  --EM has arranged for high-caliber technical expertise through use of 
        a Technical Expert Group which has access to multiple DOE 
        national laboratories.
  --EM has continued review of project staffing adequacy during 
        recurring independent project reviews.
    EM has taken the following actions to address validation:
  --Conducting monthly project reviews incorporating lessons learned 
        from transparent reporting on ARRA projects.
  --Completing Independent Project Reviews, modeled after the SC 
        approach, on a semi-annual schedule for the larger capital 
        projects.
  --Actively participating in recent Department-wide initiatives for 
        improvement in contract and project management.
    EM is committed to continuous improvement in its performance of its 
mission and in the achievement of all the GAO criteria.
                              science labs
    Question. The SC is currently operating 10 DOE labs across the 
country. Can we afford to continue to operate all of these facilities? 
Should we start looking at reducing the number of national labs?
    Answer. We believe that continued operation of DOE's national 
laboratories, at the levels proposed in the fiscal year 2012 
President's budget, is a national priority. The 10 Office of Science 
laboratories play a critical role in the Nation's research and 
development (R&D) enterprise. The Department's national laboratories 
are home to the world's largest collection of scientific user 
facilities, supporting more than 26,000 unique users from universities, 
national labs, other Federal agencies and businesses large and small 
each year. Functioning as an interdependent system with an exceptional 
set of world-leading facilities and distinctive capabilities, they 
deliver clear benefits to the Nation's research community and help 
solve problems of national importance. They work in partnership with 
universities and industry, transfer the results of their R&D to the 
marketplace, and support the training of the future science and 
engineering workforce.
    It is increasingly clear that transformational science and 
breakthrough technologies will be needed to overcome the complex 
challenges that we face as a Nation in the 21st century:
  --increasing the availability of clean, reliable, and affordable 
        energy;
  --ensuring our national security in a changing world; and
  --enhancing U.S. competitiveness by encouraging innovation.
    DOE national laboratories are uniquely equipped and positioned to 
make substantial contributions to the U.S. research enterprise.
    More than 80 Nobel prizes have resulted from research affiliated 
with DOE, much of which was made possible by the unique instrumentation 
and equipment available to the scientific community through the 
national laboratories.
    Some recent results of research conducted by the laboratories 
operated by the SC include:
  --development of the world's smallest battery;
  --development of software that searches databases 10 to 100 times 
        faster than large commercial database software;
  --development of a technology to use complementary strands of 
        synthetic DNA to build functional materials from the smallest 
        building blocks--future applications include biosensors, 
        optical nano-devices, and new kinds of solar cells;
  --development of the first microbe that can produce an advanced 
        biofuel (an alternative to petroleum) directly from fatty acids 
        in biomass;
  --development of nanoscale catalysts and multifunctional membranes 
        that may greatly enhance the practicality of fuel-cell powered 
        vehicles; and
  --development of a technique to create thin diamond films that are 
        helping industry create energy-saving, ultra-low friction and 
        wear coatings for mechanical pump seals and tools.
    Each of these accomplishments was made possible by a consistent and 
sustained investment in DOE's national laboratories, which provide 
unique capabilities for maintaining U.S. leadership in science and 
technology. These national laboratories also contain the world's 
largest suite of synchrotron radiation light source facilities, neutron 
scattering facilities, electron-beam microcharacterization centers, and 
nanoscale science research centers, which provide open access to 
specialized instrumentation and expertise that enable scientific users 
from universities, national laboratories, and industry to carry out 
experiments and develop theories that could not be done at their home 
institutions.
    During these tough economic times, DOE recognizes the need to 
identify savings throughout its budget. In the fiscal year 2012 budget 
request to the Congress, SC funded its national laboratories at a level 
consistent with the needs of the Department and the scientific 
community. Savings will be realized in fiscal year 2012 with the 
termination of operations at the Holifield Radioactive Ion Beam 
Facility (HRIBF) national user facility at ORNL. In addition, by the 
end of fiscal year 2011, we are completing operation of the world's 
largest proton-antiproton collider, the Tevatron, at the Fermi National 
Accelerator Laboratory (FNAL). The planned closure of the Tevatron 
coincides with the full start of operations of the Large Hadron 
Collider in Europe.
    Question. Should we start looking at reducing the number of 
national labs?
    Answer. SC regularly reviews the status of the projects and 
programs underway at the laboratories to ensure that they are focused, 
unique, and producing the significant scientific results required and 
expected from the investment of taxpayer dollars. Science's 
laboratories are not static. SC actively engages its labs to assure 
continued relevance and renewed infrastructure. No lab demonstrates 
that better than SLAC National Accelerator Laboratory. A few years ago, 
it was single-purpose particle physics lab. Through prudent 
investments, such as the Linac Coherent Light Source, SLAC is now a 
vibrant, multi-program laboratory making significant contributions in 
photon science, astrophysics, particle physics, and accelerator 
research. ORNL in your home State has similarly been revitalized and 
renewed over the past decade. The programs and projects at the national 
laboratories are designed, executed, and monitored to leverage, not 
duplicate, the activities conducted by other participants in the global 
scientific and academic communities. It is critical to our national 
security, as well as our economic, technical, and scientific standing 
in the world that these national laboratories continue to foster the 
future technological innovations and scientific discoveries that will 
continue to lead the United States on a path of prosperity.
                             fossil energy
    Question. If one of the goals of this administration is to reduce 
emissions, then why reduce funding for fossil energy? If we want 
cleaner coal or carbon sequestration, how do you accomplish this 
without continued investment is fossil fuels research?
    Answer. The Fossil Energy (FE) fiscal year 2012 budget request 
upholds the President's goals to develop America's innovative 
competitive edge through strategic investments in our Nation's clean-
energy research, development, and demonstration (RD&D) activities. FE's 
budget request takes into consideration the need for budget restraint, 
which requires making tough choices across all DOE R&D program areas. 
We are investing in only the key enabling technologies that are on 
critical paths and that show the highest-potential impacts on achieving 
the program goals and benefits in the timeframe needed for deployment. 
In addition, ARRA funding provided substantial investments in carbon 
capture and storage R&D and demonstrations ($3.4 billion from ARRA 
funds).
                      strategic petroleum reserve
    Question. DOE proposes to sell some crude oil reserves to generate 
$500 million in budgetary savings. Please describe in detail the 
rationale for reducing the inventory? If the proposal is driven based 
on the need to free up space for inspection and maintenance purposes, 
why isn't DOE proposing a specific number of barrels, rather than a 
dollar amount? What type grade do you propose to sell (light, heavy, 
sweet or sour), and what is the basis for that plan?
    Answer. The sale is proposed to provide operational flexibility in 
managing the reserve. The Strategic Petroleum Reserve (SPR) seeks to 
reduce its inventory by 5-6 million barrels in order to alleviate 
unplanned overcapacity at some SPR caverns. The overfilling occurred 
due to the relocation of crude oil from Bayou Choctaw Cavern 20 to 
other caverns and the need to free up cavern space throughout the SPR 
complex. Spare capacity and operational flexibility is needed for 
example to perform casing inspections and workovers, to allow on-site 
oil movements that may be required from time to time, and to comply 
with a recent Texas Railroad Commission requirement for more stringent 
inspections. No decisions have been made about what grade of crude oil 
would be sold.
                                 ______
                                 
             Questions Submitted by Senator Mitch McConnell
    Question. Does the Department have a timeline for considering an 
unsolicited proposal on tails re-enrichment or releasing an updated 
uranium inventory management plan? Given that there are more than 1,200 
jobs on the line, is there no sense of urgency at the Department to 
accelerate the consideration of re-enriching uranium tails?
    Answer. Upon receipt of any unsolicited proposal, the Department of 
Energy (DOE) conducts a review consistent with applicable statutes, 
regulations, and guidelines. While there is no set period of time for 
review of an unsolicited proposal, the Department conducts its review 
as expeditiously as possible. The Department is currently working on 
updating its Excess Uranium Inventory Management Plan. The Department's 
2008 Excess Uranium Inventory Management Plan provided guidelines for 
the management of the Department's excess uranium inventory and 
described planned and future projects under consideration, as 
envisioned in 2008. The Plan was a 10-year estimate of future sales and 
transfers and it contained the caveat that situations could arise where 
DOE's actions could change in response to unforeseen developments. 
Depending on programmatic and policy goals and needs, the Department is 
evaluating the impacts of changes and decisions made since 2008 and 
will revise the Plan accordingly.
    Any decision by the Department regarding the possible enrichment of 
its higher assay tails would have to include careful consideration of 
several factors, among them an appropriate contracting approach, the 
economic benefits to the taxpayer, and the potential market impacts of 
processing and selling the higher assay tails. A decision should not be 
made prior to our full evaluation of all the factors.
    Question. A decade's worth of clean-up efforts have been ongoing at 
the Paducah Gaseous Diffusion Plant (PGDP), which have included the 
removal of 30,000 tons of scrap metal, stored hazardous waste, 
contaminated soil and facilities. The DOE annually submits a budget 
request to continue these clean-up efforts. However, there is the 
potential for a budget shortfall in the coming years. What is DOE's 
proposal to ensure that future budgets meet the needs of clean-up work 
at the PGDP?
    Answer. The Department believes meeting its compliance milestones 
is essential and continues to prioritize actions to stay on course to 
meet these enforceable agreements. The Department continues to work 
with its regulators to ensure projects are appropriately sequenced to 
optimize resources while utilizing a risk-based approach to cleanup.
    Question. If the Department does not anticipate issuing a plan, has 
the Department included funds in its fiscal year 2012 budget to safely 
and securely idle the plant once it returns to DOE control? How much 
does DOE estimate it needs to idle the plant each year?
    Answer. The timing of the return of the PGDP to the DOE is a 
business decision solely within United States Enrichment Corporation's 
(USEC) purview. There are provisions of the USEC lease that we would 
expect USEC to comply with, in the event USEC decides to cease 
operations at the Paducah plant. USEC has an obligation under the lease 
to provide DOE with a 2-year notification of USEC's intent to return 
the PGDP. The 2 years notice was intended to allow DOE to seek 
congressional appropriations as part of our annual budget process. DOE 
will develop estimates for decontamination and decommissioning 
activities after receiving the 2-year notice from USEC.
                                 ______
                                 
             Questions Submitted by Senator Lindsey Graham
                                h-canyon
    Question. H-Canyon is a remarkable asset that can play a key role 
in the future of the complex. It has the capability to handle some of 
the most complicated materials on Earth. It also has the ability to 
produce fuel for NASA's space missions and could be the place where the 
breakthroughs are made for the next generation of spent-fuel recycling. 
However, your budget does not allow for any of these activities. In 
fact, the Defense Nuclear Safety Board has warned that the canyon could 
be lost forever under current DOE plans. How do you justify this? How 
much would it cost to construct a new canyon? How long would that take? 
What is the future of H-Canyon?
    Answer. For approximately the past 3 years, H-Canyon has been 
operating to complete the blend down of enriched uranium recovered from 
the processing of surplus unirradiated highly enriched uranium (HEU) 
materials. The Department intends to complete the current HEU blend 
down work in 2011. The Department is planning to transition H-Canyon 
and HB-Line facilities to modified operations in fiscal year 2012. H-
Canyon will continue to receive sample returns from the Savannah River 
National Laboratory and F Area Laboratory and disposition the samples 
to the liquid waste system. H-Canyon will also remediate large boxes of 
legacy transuranic waste. The Department will retain critical staff and 
perform proficiency runs which maintain the operator qualifications and 
exercise the processing equipment.
    Much of the remaining material that could be processed in H-Canyon 
in the future is used nuclear fuel (UNF). The Secretary of Energy has 
determined that no processing of aluminum-clad UNF will occur until the 
recommendations of the President's Blue Ribbon Commission (BRC) on 
America's Nuclear Future are issued and evaluated by the Department. 
The proposed operational condition of H-Canyon will allow the 
flexibility to process aluminum-clad UNF or any other appropriate 
nuclear materials, in the future, should that decision be made.
    Question. The core mission of DOE's Environmental Management 
program is to reduce the amount of waste currently sitting in our 
weapons complex. As such, any decision that would result in the 
stranding of material should run counter to DOE's mission. This is why 
DOE's decision not to process 14 metric tons of aluminum clad defense 
spent nuclear fuel through H-Canyon is so problematic. Under DOE's 
current vision, this fuel has no disposition path. Will you work with 
me to ensure that this material does not remain in South Carolina if it 
is not to be processed through the canyon?
    Answer. The Department does not intend to indefinitely store used 
nuclear fuel (UNF) at the Savannah River Site. However, I have 
determined that no further processing of aluminum-clad UNF will occur 
until the recommendations of the President's BRC on America's Nuclear 
Future are issued and evaluated by the Department. This will allow the 
Department to make sure these recommendations are factored into 
decisions on how best to process and disposition this material. By 
retaining critical staff and performing proficiency runs to maintain 
operator qualifications and exercise processing equipment, the 
capability to process spent fuel in the future is being preserved. 
Should a decision be made to not use the H-Canyon to process the spent 
fuel, I will work with you to determine an alternative that ensure 
unprocessed UNF does not remain at the Site.
    Question. Trimming unnecessary costs is one way to get our overall 
budget house in order. Spending money to expand L-basin, where the 
aluminum clad fuel is stored, instead of processing it through the 
canyon makes little sense to me. Wouldn't it save DOE money over the 
long term to process the aluminum clad fuel and ultimately close L-
basin?
    Answer. Per my previous response, no processing of aluminum-clad 
UNF will occur until the recommendations of the President's BRC on 
America's Nuclear Future are issued and evaluated by the Department.
                                hydrogen
    Question. Just recently 13 of my colleagues sent you a letter about 
our support for the fuel cell and hydrogen energy technology programs 
in your portfolio. Do you share our concern that further cuts to these 
programs would inhibit the long-term diversification of our Nation's 
energy portfolio and stunt the development of American-engineered and 
domestically produced energy systems powered by hydrogen and fuel 
cells?
    Answer. The Department's strategy is to sustain a balanced research 
and development (R&D) portfolio, with an emphasis on nearer-term 
priorities, such as batteries, advanced vehicle technologies, and 
technologies for renewable power and energy efficiency. Fuel cell 
electric vehicles (FCEVs) are still part of the portfolio of options 
under development. In fact, DOE's increased funding for battery R&D 
will also be beneficial for FCEVs which rely on batteries in addition 
to fuel cells.
    The Department will continue its critical efforts in hydrogen and 
fuel cell R&D, which have already reduced the cost of fuel cells by 
more than 30 percent since 2008 and 80 percent since 2002.\12\ In fact, 
DOE's hydrogen and fuel cell program has been extremely successful, 
resulting in approximately 200 patents, 30 products being put on the 
market, and industry currently pursuing development of more than 50 
emerging technologies.\13\ The fiscal year 2012 budget sustains DOE's 
core R&D efforts which will continue to advance the technologies and 
improve the likelihood of a successful rollout by automobile 
manufacturers in the coming years.
---------------------------------------------------------------------------
    \12\ http://hydrogen.energy.gov/pdfs/10004_fuel_cell_cost.pdf.
    \13\ http://www1.eere.energy.gov/hydrogenandfuelcells/pdfs/
pathways.pdf.
---------------------------------------------------------------------------
    Question. I understand there are studies out there, including one 
done by the Savannah River National Laboratory in SC, that show that 
battery electric vehicles (BEVs) and plug in hybrid electric vehicles 
(PHEVs) are not going to be cheaper than FCEVs nor is their needed 
infrastructure going to be cheaper. Do you agree with this assessment?
    Answer. We are not aware of the Savannah River National Laboratory 
study you reference, so we cannot comment specifically on its 
assessment. In general, however, it is very difficult to compare 
vehicle and infrastructure costs across technologies. There are a 
number of variables affecting infrastructure cost--such as location and 
site preparation requirements, public accessibility (versus home-access 
only), production technology (for hydrogen), and size of station/volume 
of fuel required or type of electric charging. In addition, although 
R&D is needed to further reduce cost and improve performance of all 
advanced vehicle technologies, each is in a different stage of 
development with different early market requirements, cost-reduction 
targets, and timelines.
    A variety of vehicle technologies and fuels will be required to 
meet the Nation's short-term and longer-term goals of reducing 
petroleum use and greenhouse gas emissions. These technologies are 
developing along different timelines: PHEVs, for example, are 
commercially available today and do not necessarily require any 
additional infrastructure--drivers can charge at home using a standard 
outlet or fuel with gasoline at an existing station, if needed for 
traveling longer distances. BEVs are also commercially available today 
but have different infrastructure requirements. Drivers can charge at 
home overnight using equipment that ranges from $800 to $2,000 
installed; cost estimates for public electric charging equipment and 
installation can vary from $5,000 to $50,000 per charging point, 
depending on the type of charging (Level 2 vs. DC fast charging) and 
other factors (noted above). While FCEVs are not yet commercially 
available, a number of the world's major auto manufacturers have 
announced initial rollouts in the 2015 timeframe. FCEVs will have 
different infrastructure requirements than PHEVs and BEVs.
    Question. Two weeks ago, at your agency's Quadrennial Technology 
Review (QTR) Workshop in Knoxville, Tennessee, representatives from 
hydrogen, fuel cell vehicle, and stationary source fuel cell companies 
heard Under Secretary for Science Koonin say, in front of 100 people, 
that fuel cells and hydrogen were left out of the QTR Framing Document 
to ``see what the reaction would be.'' Do you agree with Under 
Secretary Koonin's approach to the QTR?
    Answer. Under Secretary Koonin has a proven track record of 
bringing diverse groups together and facilitating vigorous technical 
discussions, which is why I asked him to lead our first ever QTR.
    As you are aware, we released the QTR Framing Document in March, 
where we provided a first pass at those technologies that are likely to 
scale up in time to materially impact the President's energy security 
and environmental goals--and to do so affordably. In view of the 
multitude of technologies that could be developed and demonstrated, we 
must set clear priorities within the existing policy framework and 
establish principles that will enable us to coordinate our research, 
development, and demonstration (RD&D) efforts with those of the private 
sector to facilitate timely and material deployment of clean-energy 
technologies. Consequently, in the initial framing document we left out 
a number of technologies that are at the experimental stage or face 
significant technical or multiple infrastructure hurdles. Hydrogen and 
fuel cells were not the only technologies in that category.
    The QTR Framing Document was intended to stimulate discussion and 
facilitate stakeholder engagement as crucial elements of the QTR 
process. In response to comments submitted by representatives from 
hydrogen, fuel cell vehicle, and stationary source fuel cell companies, 
Dr. Koonin invited a number of them to the vehicle efficiency and 
electrification workshop in Knoxville, Tennessee on May 4, 2011 and to 
a clean electricity supply workshop held in Boulder, Colorado on June 
7, 2011. The discussion among technical experts across a spectrum of 
technologies has been invaluable in shaping the QTR team's thinking 
about the highest and best uses of fuel cells and hydrogen in the 
Nation's energy future.
    Fuel cells for distributed generation were already included as 1 of 
the 19 technology assessments that form the foundational analysis of 
the QTR, and hydrogen is considered in our vehicle electrification 
technology assessment. These technology assessments, which were not 
released as part of the Framing Document, are expected to be important 
components of the final report on the QTR.
                      savannah river site pensions
    Question. I have long been concerned about the cost of DOE 
pensions. The growing costs could very well impact programmatic work 
throughout the weapons complex. In fiscal year 2012, what is the 
projected pension obligation across the weapons complex?
    Answer. The table below includes the estimated fiscal year 2012 
contributions for each National Nuclear Security Administration (NNSA) 
contractor based on updated information submitted by the contractors 
during fiscal year 2011.

              [Updated estimates as of September 30, 2011]
------------------------------------------------------------------------
                                                             2012 NNSA
                                                              portion
------------------------------------------------------------------------
University of California Retirement Plan--Lawrence                   178
 Berkeley National Laboratory...........................
Pension Plan for Eligible Bettis Employees and Retirees           59,500
 \1\....................................................
Pension Plan for Pacific Northwest Laboratories,                  10,380
 Battelle Memorial Institute............................
BW Y-12 Pension Plan....................................          79,580
Idaho National Laboratory Employee Retirement Plan......           7,546
Salaried Employee Pension for KAPL Employees and                  65,000
 Retirees \1\...........................................
Pension Plan for KAPL Employees in Participating                   7,100
 Bargaining Units \1\...................................
Kansas City Division (Honeywell International, Inc.)               9,110
 Hourly Employees Pension Plan..........................
Honeywell Retirement Earnings Plan for Aerospace                  26,910
 Employees at the Kansas City Division..................
LANS Defined Benefit Pension Plan.......................          71,940
University of California Retirement Plan Livermore......         153,900
University of California Retirement Plan--Los Alamos....          70,100
National Security Technologies, LLC [NSTec] Employee              14,490
 Retirement Plan........................................
B&W Pantex Guards Union.................................           3,000
B&W Pantex Metal Trades Council.........................           8,800
B&W Pantex, Non Bargaining..............................          17,800
Sandia Corporation Retirement Income Plan...............         108,430
Savannah River Nuclear Solutions Multiple Employer Plan.          48,747
Pension Plan for Employees at ORNL......................           5,787
WSI Las Vegas...........................................           1,600
WSI Independent Guard Association of Nevada.............           1,332
WSI Pension Plan for Employees at Oak Ridge, Tennessee..           1,159
Battelle Memorial Institute SERP Non-Qualified Plan.....               2
Bechtel Marine Propulsion Non-Qualified Plan \1\........           1,138
KAPL Non-Qualified Plan \1\.............................             229
LANS 401(a)(17) Restoration Plan........................               4
LANS Restoration Plan...................................               2
LLNS 401(a)(17) Restoration Plan........................              41
LLNS Restoration Plan...................................              19
Sandia Corporation Non-Qualified Pension Plan...........             824
Savannah River Nuclear Solutions Non-Qualified Plan.....              95
                                                         ---------------
      Total.............................................         774,743
------------------------------------------------------------------------
\1\ NNSA pension contributions for the five Naval Reactors plans include
  contributions reimbursed by the Department of the Navy and work for
  others.

    Question. I previously proposed language in the Defense 
Authorization Act that would require DOE and NNSA to report their 
pension obligations as a line item in the budget. This would give the 
Congress a better sense of the cost of pensions on the complex. Do you 
support this effort? Why not?
    Answer. Increased visibility of pension liabilities is a goal the 
Department supports. However, reporting them as a line item in the 
budget is not viable due to budget formulation, execution, and 
accounting concerns. To enhance visibility of pension liabilities, the 
Department included a separate section on pensions in its congressional 
budget request for both fiscal year 2011 and fiscal year 2012. This 
section of the budget provides projected contractor defined-benefit 
(DB) pension plan contributions for fiscal year 2011 and fiscal year 
2012 by plan and by Program Office. For the NNSA, the projected 
contractor DB pension plan contributions are provided for fiscal year 
2010 through fiscal year 2016 by plan.
    At the time the Department's budget request is submitted, the 
Department provides the latest pension contribution estimates available 
from its contractors. However, the actual amount of the contractors' 
annual defined benefit pension contributions is not typically known 
until the third quarter of the year of budget execution. Projections of 
future pension contributions are highly sensitive to underlying data, 
economic conditions, and actuarial methods and assumptions. Thus, the 
final annual actuarial valuation likely will yield different 
contribution amounts than the amounts estimated at the time of budget 
submission. For instance, we are currently preparing the budget 
submission for fiscal year 2013. At the same time, the contractors are 
waiting on the actuaries to complete the various analyses to determine 
the actual payments required for calendar year 2012. Because the budget 
formulation cycle occurs so far in advance of the pension plan 
execution year, directly funding pension obligations through a line 
item is not desirable.
    Further, the current methodology of having the pension liabilities 
collected through indirect cost pools allows the Department to charge 
all customers doing business at a site for a portion of the pension 
liability. If pension liabilities were fully ``direct funded'', the 
Department would bear the full costs of the liabilities whereas with 
the current budget and accounting system permits the Department to 
recover pension costs through overall indirect costs charged to non-DOE 
customers.
    Another disadvantage of ``direct funding'' the pension liabilities 
would be a reduction in the contractors' and the Department's ability 
to quantify the true cost of the work at the site, inclusive of costs 
for contractor employees' pension benefits. The result would be the 
loss of a key self-policing aspect of the current approach to funding 
pensions. In particular, when the true indirect cost of work, including 
pension costs, is proportionally shared with each site customer, it 
creates an incentive for contractors to minimize their overall indirect 
costs insofar as the contractors must keep indirect costs low to 
attract work from other agencies or entities. If pensions were ``direct 
funded'', this market pressure would be largely absent because a large 
component of total indirect cost pool would be removed from the 
indirect costs.
    One area where the Department does submit a direct request for 
pension liabilities is for legacy pension benefits. NNSA has a 
continuing obligation to reimburse the University of California 
Retirement Plan to fund retirement benefits for University of 
California (UC) retirees from Los Alamos and Lawrence Livermore 
National Laboratories. NNSA is unable to recover the costs associated 
with the liability to the UC through indirect cost pools as NNSA does 
for pension costs associated with benefit plans sponsored by current 
NNSA contractors. The difference between the two payment methods is a 
critical and significant difference that requires the disparate 
treatment in the budget.

                         CONCLUSION OF HEARINGS

    Senator Alexander. The hearing is concluded.
    Secretary Chu. Thank you.
    [Whereupon, at 4:29 p.m., Wednesday, May 18, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]





              MATERIAL SUBMITTED SUBSEQUENT TO THE HEARING

    [Clerk's Note.--The following testimony was received by the 
Subcommittee on Energy and Water Development for inclusion in 
the record.]
     Prepared Statement of the Environmental Council of the States
 state environmental agency directors support fiscal year 2012 funding 
   appropriation for u.s. department of energy's nuclear cleanup work
    Dear Madam Chairwoman Feinstein and Ranking Member Alexander: We 
are writing to you on behalf of ECOS, the national nonprofit 
nonpartisan association of State environmental agency directors.
    As you consider appropriation levels for the fiscal year 2012 
Federal budget, we urge you to consider the U.S. Department of Energy's 
(DOE) nuclear clean-up work a funding priority.
    DOE has requested that $6.13 billion be appropriated to fund its 
Office of Environmental Management (EM) for fiscal year 2012 so the 
agency can remediate hazardous and radiological contamination at sites 
within the nuclear weapons complex. This figure represents the amount 
of funding DOE needs to successfully perform cleanup work to levels 
necessary for meeting its obligations to State governments outlined in 
cleanup agreements.
    On March 24, 2010, the State environmental agency directors passed 
a resolution urging the Congress to ``appropriate the levels of funding 
necessary to ensure EM annual budgets are fully funded and fully 
compliant'' noting that ``stable funding leads to greater efficiencies 
in cleanup cost and schedule'' (see addendum).
    Therefore we believe that the Congress should fully fund DOE's 
fiscal year 2012 budget request for the EM program. DOE has told States 
that if a lower level of funding is appropriated for fiscal year 2012, 
cleanup of contaminated soils and groundwater will be delayed.\1\
---------------------------------------------------------------------------
    \1\ Presentation to the National Governors Association from Ines R. 
Triay, Assistant Secretary for Environmental Management, U.S. 
Department of Energy. May 6, 2011.
---------------------------------------------------------------------------
    Cleanup of the nuclear weapons complex represents a large liability 
to the Federal Government, but this is a liability that continues to 
shrink as cleanup is achieved at various sites within the complex. As 
States, we understand what it is like to make tough funding decisions. 
For this one, we urge you to allow DOE to continue the cleanup work to 
its conclusion.
    Thank you for considering our position as you work toward passing a 
Federal budget. Please contact R. Steven Brown, executive director of 
ECOS if you have any questions about this letter.
            cleanup budgets for the nuclear weapons complex
    WHEREAS, the Nation's nuclear weapons production and research and 
development activities, conducted largely between the 1940s and 1980s, 
have left a legacy of hazardous, radiological, and mixed wastes 
scattered across sites widely referred to as the ``nuclear weapons 
complex'' (the ``complex''); and
    WHEREAS, proper cleanup of the complex is critical for protecting 
human health and to ensure that damages to natural resources are 
mitigated and/or compensated for; and
    WHEREAS, the complex consists of over 100 sites in 33 States, 
thereby comprising one of the largest environmental cleanup operations 
being undertaken in the United States; and
    WHEREAS, at least 14 States currently host active cleanup 
operations spearheaded by the U.S. Department of Energy (U.S. DOE) 
Office of Environmental Management (EM); and
    WHEREAS, State environmental agencies are regulators with U.S. EPA 
and U.S. DOE, and may oversee cleanup operations within the complex as 
established by Federal Facility Agreements (FFAs), permits, and consent 
orders under FFCA, CERCLA, RCRA, and other laws; and
    WHEREAS, some sites within the complex, including the Ohio Fernald 
and Colorado Rocky Flats sites, have benefited from accelerated 
cleanups that have generated cost savings from reduced future 
maintenance costs that were not redirected toward other site cleanups 
within the complex; and
    WHEREAS, the influx of funding from the American Recovery and 
Reinvestment Act of 2009 (ARRA) has provided for further acceleration 
of nuclear and hazardous waste cleanups as well as decontamination and 
demolition of obsolete facilities within the complex; and
    WHEREAS, recently completed cleanups have shrunk the footprint and 
overall size and presence of nuclear weapons complex sites within the 
States; and
    WHEREAS, notwithstanding these recent successes, continued cleanup 
of the complex remains a priority issue for the States; and
    WHEREAS, stable funding leads to greater efficiencies in cleanup 
cost and schedule for both U.S. DOE and the States.

NOW, THEREFORE, BE IT RESOLVED THAT:
    ECOS strongly supports continued environmental cleanup of the 
nuclear weapons complex.
    ECOS recommends that U.S. DOE continue cleaning up the nuclear 
weapons complex and maintain a strong forum for communication and 
planning with State oversight officials via ECOS.
    ECOS urges U.S. DOE officials to request fully funded, fully 
compliant annual budgets for the EM program to ensure enough funds are 
provided to all sites to achieve cleanup milestones on schedule as 
required by FFAs, permits, and consent orders.
    ECOS urges the U.S. Congress to appropriate the levels of funding 
necessary to ensure EM annual budgets are fully funded and fully 
compliant as just described.
    ECOS urges U.S. DOE to establish mechanisms whereby any cost 
savings that result from accelerated cleanups are recouped and 
redirected toward funding other site cleanups within the nuclear 
weapons complex, and
    This resolution will be transmitted to the U.S. Congress, the 
Secretary of Energy, the Assistant Secretary of Energy for 
Environmental Management, the National Governors Association, and other 
stakeholder groups.
