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



 
    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2013

                              ----------                              


                       WEDNESDAY, MARCH 14, 2012

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:31 p.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Dianne Feinstein (chairman) 
presiding.
    Present: Senators Feinstein, Murray, Johnson, Reed, Tester, 
Alexander, Cochran, Collins, Murkowski, and Graham.

                          DEPARTMENT OF ENERGY

STATEMENT OF HON. STEVEN CHU, SECRETARY


             opening statement of senator dianne feinstein


    Senator Feinstein. Good afternoon, ladies and gentlemen.
    Mr. Secretary, welcome to the Energy and Water 
Subcommittee's budget hearing on the Department of Energy's 
(DOE) fiscal year 2013 budget request.
    DOE has requested $27.2 billion for fiscal year 2013. That 
is an increase of $1.5 billion, or 5.7 percent, from fiscal 
year 2012.
    Approximately $535 million--that is about one-third--of the 
$1.5 billion increase is for the National Nuclear Security 
Administration's (NNSA) nuclear weapons nonproliferation and 
naval reactor programs. This is a 5-percent increase. The 
subcommittee will explore NNSA's budget request with 
Administrator D'Agostino next week.
    The rest of the Department's proposed increase is largely, 
as we understand it, for the Office of Energy Efficiency and 
Renewable Energy (EERE) projects, Advanced Research Projects 
Agency-Energy (ARPA-E), and basic energy research.
    The budget request clearly prioritizes some programs while 
making difficult choices to cut funding to other programs. This 
is where we have a lot of questions. The Congress must now 
determine whether or not we can agree on those priorities.
    Mr. Secretary, I hope you will highlight the 
administration's priorities today and make the case for the 
choices that you have made.
    I would like to highlight the three largest increases in 
the budget.
    First, the single largest increase would be for EERE which 
would see an increase of $512 million, or 28 percent. A 
significant portion of this increase would be used for the new 
advanced manufacturing program.
    The second, ARPA-E, would see an increase of $75 million, 
or 27 percent. As the Secretary says, ARPA-E holds the promise 
of advancing high-risk, high-reward technology. An early 
indicator of success has been that 11 projects, which received 
$40 million from ARPA-E, have now secured more than $200 
million in outside private capital investment to further 
develop these technologies, and that is good news. So we would 
like to encourage the Department to continue tracking these 
projects and demonstrate how Federal investments have developed 
more energy-efficient technologies and potentially new 
industries.
    Third, the Office of Science would see an increase of $118 
million, or 2.4 percent. The science budget has clearly 
prioritized the subprograms exploring materials research, 
advanced computing, and biological research. So the Department 
is making its priorities clear there.
    However, in the non-priority subprograms, it is more 
difficult to understand the administration's position because 
the Department has failed to prioritize activities within the 
very limited funding.
    One example is fusion energy science. The overall budget 
for fusion energy science is not large enough to accommodate 
our commitment to the International Thermonuclear Experimental 
Reactor (ITER) project in France while at the same time 
maintaining our domestic program. The difficult decision was 
apparently made to cut funding to the fusion facility at 
Massachusetts Institute of Technology (MIT). The budget, 
though, fails to fully fund the commitment to ITER. This will 
likely increase our total contribution to ITER in the future 
and delay the project. I understand the decision not to 
prioritize fusion energy sciences in a tight budget 
environment, but if we are making that decision, then we need 
to follow through and make the tough decisions within the 
program itself and not leave them floundering around. It now 
appears that we are simply going to cripple both our domestic 
and international efforts.
    While renewable energy, ARPA-E, and the Office of Science 
saw increases in the budget, there are two energy programs that 
were cut. The proposed budget for the Office of Fossil Energy 
(FE) is $428 million. That is a decrease of 20 percent, or $106 
million. The single largest cut in fossil energy comes from 
zeroing out the fuel cells subprogram, and we would like to 
know the reason.
    The proposed budget for the Office of Nuclear Energy is 
$675 million, excluding security costs. This is a cut of $93 
million, or 12 percent. The major cuts in nuclear energy come 
from the advanced reactor program, which is largely focused on 
fast reactors and high-temperature reactors.
    Today, I am sure we will hear various opinions about the 
decisions made in the administration's budget request for 
energy, but this is an important first step. I know the choices 
are difficult for you, Mr. Secretary. Before welcoming you and 
having your presentation, I would like to ask for the remarks 
of the ranking member.


                  statement of senator lamar alexander


    Senator Alexander. Thank you, Madam Chairman.
    Mr. Secretary, welcome. It is a pleasure to work with the 
Senator from California always, and it is a pleasure to work 
with you, Mr. Secretary. We appreciate your service to the 
country. It is a long way to go home for you, I know. So we 
appreciate that. You have attracted some very good people to 
work with you.
    There are a great many areas of the President's proposal, 
your budget, that I support. In a recent visit to Sandia, the 
science director told me that it would be hard to think of any 
major advance in the biological and physical sciences in our 
country that had not had some Government research support and 
most of it through our 17, I guess is the number, laboratories 
and our great research universities, which are in my view our 
secret weapons in a very competitive world economically where 
we are a country that has only 4 or 5 percent of the population 
but regularly produce 23-24 percent of the wealth. That is 
going to be harder and harder to do to keep our standard of 
living, and those will help us do that.
    And your Office of Science is identified as an important 
part of our America Creating Opportunities to Meaningfully 
Promote Excellence in Technology, Education, and Science Act 
(America COMPETES) initiative which our Congress has passed in 
a bipartisan way and reauthorized in a bipartisan way and 
funded to a great extent over the last several years. And I am 
glad to see a priority there.
    I applaud your energy hubs. We have talked about that many 
times before, but I was calling them mini-Manhattan projects 
and you are calling them hubs. I think it is a very good way to 
manage and to organize around priority areas. The idea of 
installed solar at a kilowatt hour with clear metrics about 
each of these areas--and I would be interested to hear from 
you, as we go along, what your metrics are for each of your 
hubs. In other words, how will we know when we succeed? And as 
my experience in Government teaches me, that is a pretty good 
way to take a big, complex program like you have and establish 
some clear priorities. So I would like to talk more about the 
hubs.
    I am a strong supporter of ARPA-E, a major recommendation 
of the America COMPETES legislation, and we do not know if 
ARPA-E will be successful, but it would not have to be nearly 
as successful as the Defense Advanced Research Projects Agency 
(DARPA) to be a great success. It does not have the same kind 
of customer that DARPA has at the Defense Department. But the 
early signs are promising, very talented people there. And I 
hope we continue to support it.
    I am increasingly of the view that--I support the idea and 
made an address last week saying that we should double over the 
next several years Federal support for clean-energy research. I 
know that is a priority of yours. The question quickly comes 
up, well, then how would you pay for it. I think the way we pay 
for it is get rid of long-term subsidies for energy such as 
those for big oil and I would add to that big wind. We had $14 
billion of Federal subsidies for wind programs over a 5-year 
period which we are in the midst of. More than $6 billion are 
the production tax credit. I think we should let that credit 
expire and take $2 of the savings and reduce the debt and $1 of 
the savings and add it to the energy research budget and do the 
same for the oil subsidies that oil companies have that other 
companies do not have. Sometimes we get a little clumsy when we 
talk about oil subsidies because they have manufacturing tax 
credits. Well, so do many other manufacturers have 
manufacturing tax credits. So I would like to talk about that 
too. Clean-energy research, yes. Long-term subsidies, no. And 
in between what are those technologies that we seek to jump 
start for a limited period of time? The small modular reactors 
might be one. The electric car incentives that we are now in 
the midst of might be one. ARPA-E might be one. But they should 
be specific and limited.
    You have recommended funding for the Blue Ribbon Commission 
(BRC) on Nuclear Waste. That is a concern that Senator 
Feinstein and I share equally. My passion for it does not equal 
hers because I do not think anyone's does, but it is right up 
there with hers. And it is something that we are working on 
with Senators Bingaman and Murkowski, and we appreciate your 
cooperation on that. We intend to make some progress on it.
    Finally, in our State, if I may make an additional point, 
Madam Chairman, we are concerned about environmental cleanup. 
Over the last year, the Government has made a lot of progress 
in cleaning up radiological waste in Oak Ridge that is left 
over from the hot war and World War II and the cold war ever 
since. And you have begun to remove the waste and get it out of 
Oak Ridge and the cleanup is scheduled to be completed in 5 
years. And it is very expensive. It is hundreds of millions of 
dollars. And once it is gone, it will reduce the cost of 
operating the facilities in Oak Ridge and reduce the risks.
    But we now need to go to work on mercury, and we have 
talked about that. To date, there are more than 2 million 
pounds of mercury unaccounted for and the continued releases of 
mercury in Poplar Creek that run through the town. This is a 
dangerous substance. It is going to take a long time to do an 
appropriate job of cleaning it up, but we need to get started. 
And I would like include in the record, Madam Chairman, an 
article by Frank Munger from the Knoxville News Sentinel today 
entitled ``Mercury's Priority is Rising, but Cleanup is Years 
Away.''
    So I thank you for what we are doing on radiological waste. 
I look forward to working with you to getting started on 
cleaning up the mercury.
    And I thank the chairman for her generous allocation of 
time.
    Senator Feinstein. I thank you very much, Senator 
Alexander.
    It is now my pleasure to introduce the Secretary. He hails 
from my home State. I think it is fair to say he is brilliant. 
I do not think you win a Nobel unless you can have that 
appellation attached to your name. He is from Lawrence Berkeley 
Lab, and it is with a great deal of pleasure, because there 
will be a lot of hard questions, that I boost your ego a little 
bit before we begin.
    I know it has been hard to adjust to life here, but we want 
to warmly welcome you, Mr. Secretary. Please proceed with your 
remarks.


                  summary statement of hon. steven chu


    Secretary Chu. Well, thank you, Madam Chairman, and also 
Ranking Member Alexander. I should say my reputation for 
intelligence has taken a downturn since I have accepted this 
job.
    But in any case, I am happy to be here today and be given 
the opportunity to discuss the President's fiscal year 2013 
budget request for DOE.
    To promote economic growth and strengthen national 
security, President Obama has called for an all-of-the-above 
strategy that develops every source of American energy. The 
President wants to fuel our economy with domestic energy 
resources while increasing our ability to compete in the clean-
energy race.
    The Department's fiscal year 2013 budget request for $27.2 
billion is guided by the President's vision, our 2011 strategic 
plan, and our inaugural quadrennial technology review. It 
supports leadership in clean-energy technologies, science and 
innovation, nuclear security, and environmental cleanup.
    Decades ago, the Energy Department's support helped develop 
technologies that have allowed us to tap into America's 
abundant shale gas resources. Today, our investments can help 
unlock the promise of renewable energy and energy efficiency. 
The budget request invests approximately $4 billion in energy 
programs to advance progress in areas from solar to offshore 
wind to carbon capture utilization and storage to smart grid 
technologies. It develops next-generation biofuels, advanced 
batteries, and fuel-efficient vehicle technologies to help 
reduce our dependence on foreign oil.
    As the President and I have said, there is no silver 
bullet. We can and must pursue a long-term, all-of-the-above 
approach that diversifies our transportation sector, protects 
consumers from high gas prices, harnesses American resources, 
and creates jobs here at home. That is exactly what this budget 
does.
    The budget also invests $770 million to help develop the 
next generation of nuclear power technologies, including small 
modular reactors. It includes funding for continuing nuclear 
waste research and development (R&D) which aligns with the 
recommendations of the Blue Ribbon Commission (BRC) on 
America's Nuclear Future.
    America's fossil fuel energy resources continue to play an 
important role in our energy mix. The budget request includes 
$12 million as part of a $45 million research and development 
initiative by the Departments of Energy, Interior, and 
Environmental Protection Agency (EPA) to understand and 
minimize the potential environmental, health, and safety 
impacts of natural gas development through hydraulic 
fracturing.
    The budget also promotes energy efficiency to help 
Americans save money by saving energy, and it sponsors R&D on 
industrial materials and processes to help U.S. manufacturers 
cut costs.
    To maximize our energy technology efforts in areas such as 
batteries, biofuels, and electric grid technologies, we are 
coordinating research and development across our basic and 
applied research programs and ARPA-E.
    And to encourage manufacturing and deployment of clean-
energy technologies, the President has called for extending 
proven tax incentives, including the production tax credit, the 
1603 program, and advanced energy manufacturing tax credit.
    As industry, the Congress, and the American people make 
critical energy decisions, it is also important that we 
adequately fund the Energy Information Administration.
    Competing in the new energy economy will require our 
country to harness all our resources, including American 
ingenuity. The budget includes $5 billion for the Office of 
Science to support basic research that could lead to new 
discoveries and help solve energy challenges. These funds 
support progress in materials science, basic energy science, 
advanced computing, and more.
    The budget request continues to support the Energy Frontier 
Research Centers which aim to solve specific scientific 
problems to unlock new clean-energy development. It supports 
the five existing Energy Innovation Hubs and proposes a new hub 
in electricity systems. Through the hubs, we are bringing 
together our Nation's top scientists and engineers to achieve 
game-changing energy goals.
    Additionally, the budget request includes $350 million for 
ARPA-E to support research projects that could fundamentally 
transform the way we use and produce energy. ARPA-E invests in 
high-risk, high-reward research projects that if successful 
could create the foundation for entirely new industries.
    In addition to strengthening our economy, the budget 
request strengthens our security by providing $11.5 billion for 
the NNSA. As the United States begins the nuclear arms 
reduction required by the New Strategic Arms Reduction Treaty 
(New START), the science, technology, and engineering 
capabilities within the nuclear security enterprise will become 
even more important to sustain the U.S. nuclear deterrent. That 
is why the budget request includes $7.6 billion for weapons 
activities. It also includes $1.1 billion for the naval reactor 
program. Additionally, it supports NNSA's work to prevent 
nuclear terrorism, one of President Obama's top priorities. It 
includes $2.5 billion to implement key nuclear security, 
nonproliferation, and arms control activities.
    Finally, the budget request includes $5.7 billion for the 
Office of Environmental Management to clean up radioactive 
legacy waste from the Manhattan Project and the cold war. This 
budget request builds on the program's progress. By the end of 
2011, the program has reduced its geographic footprint by 66 
percent.


                           prepared statement


    The budget request made strategic investments to promote 
prosperity and security. At the same time, we recognize the 
country's fiscal challenges and are cutting back where we can. 
We are committed to performing our work efficiently and 
effectively. Countries in Europe, Asia, and throughout the 
Western Hemisphere recognize that energy opportunity and are 
moving aggressively to lead. This is a race we can win, but we 
must act with fierce urgency.
    So thank you. And I now welcome your questions.
    [The statement follows:]
                    Prepared Statement of Steven Chu
                              introduction
    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 2013 budget request for the 
Department of Energy (DOE).
    To promote economic growth and strengthen national security, 
President Obama has called for ``an all-out, all-in, all-of-the-above 
strategy that develops every source of American energy--a strategy that 
is cleaner and cheaper and full of new jobs.'' The President wants to 
fuel our economy with domestic energy resources while increasing our 
ability to compete in the global clean-energy race.
    Although the United States has reclaimed the title of world leader 
in clean-energy investments, we are at risk of falling behind again 
unless we make a sustained Federal commitment to supporting our 
domestic clean-energy economy. To compete globally, America has to do 
more than invent technologies, we also have to produce and sell them. 
Our country faces a stark choice:
  --we can create jobs making and exporting the energy technologies of 
        tomorrow; or
  --we can cede leadership to other countries that are investing in 
        these industries.
    As President Obama reiterated in his State of the Union Address, 
passing a clean-energy standard is a vital step that the Congress can 
take to broaden our clean-energy market and promote U.S. leadership.
    Making the most of America's energy resources is a pillar of the 
President's economic blueprint to build an economy that lasts. The 
Energy Department also supports other key elements of the President's 
agenda including leading in innovation, reducing our dependence on oil, 
cutting costs for families, businesses, and manufacturers through 
energy efficiency, and reducing nuclear dangers worldwide.
    Guided by the President's vision, the Department's 2011 Strategic 
Plan and our inaugural Quadrennial Technology Review, our fiscal year 
2013 budget request of $27.2 billion invests in the following 
priorities:
  --Accelerating the transformation of America's energy system, and 
        securing U.S. leadership in clean-energy technologies;
  --Investing in science and innovation to promote our Nation's 
        economic prosperity; and
  --Keeping Americans safe by enhancing nuclear security through 
        defense, nonproliferation, and environmental cleanup.
    These priorities will be enabled through a continuing commitment to 
fiscal responsibility and management excellence.
         leading in the energy technologies of the 21st century
    Last year, a record $260 billion was invested globally in clean 
energy, and trillions of dollars will be invested in the coming 
decades. To seize this market and job-creation opportunity, the 
President's budget request invests in programs that advance research, 
development, manufacturing, and deployment of the energy technologies 
of the future.
    Decades ago, support from the Energy Department helped to develop 
the technologies that have allowed us to tap into America's abundant 
shale gas resources. Today, our investments can help us advance 
technologies that will unlock the promise of renewable energy and 
energy efficiency.
    The budget request invests approximately $4 billion in our energy 
programs. It supports the Department's SunShot initiative to make solar 
energy cost-competitive with any other form of electrical energy, 
without subsidy, by the end of the decade. It advances technological 
progress in areas ranging from offshore wind to carbon capture, 
utilization, and storage to smart grid and energy storage. And it helps 
reduce our dependence on oil by developing the next generation of 
biofuels and accelerating research in advanced batteries and fuel-
efficient vehicle technologies. Families, again, are feeling the pinch 
of high gas prices. As the President and I have said, there is no 
silver bullet to this challenge, but we can and must pursue a serious, 
long-term, ``all-of-the-above'' approach that diversifies our 
transportation sector, protects consumers from high gas prices, 
harnesses American resources, and creates jobs here at home. That's 
exactly what this budget does.
    Leadership in nuclear energy technologies is also essential to our 
ability to compete globally. The budget request invests $770 million in 
the nuclear energy program to help develop the next-generation of 
nuclear power technologies, including small modular reactors. It also 
includes funding for continued research and development (R&D) on the 
storage, transportation and disposal of nuclear waste, which also 
aligns with the recommendations of the Blue Ribbon Commission on 
America's Nuclear Future.
    As we move to a sustainable energy future, America's fossil energy 
resources will continue to play an important role in our energy mix. 
President Obama is committed to developing our oil and gas resources in 
a safe and sustainable manner. Last year, our oil import dependence was 
at its lowest level in 16 years, oil production reached its highest 
level in 8 years and natural gas production set a new record. Building 
on this progress, the Energy Department's budget request includes $12 
million as part of a $45 million priority research and development 
initiative by the DOE, the Department of the Interior, and the 
Environmental Protection Agency to understand and minimize the 
potential environmental, health, and safety impacts of natural gas 
development through hydraulic fracturing (fracking).
    The budget request also promotes energy efficiency to create jobs 
and to help Americans save money by saving energy. It supports home 
weatherization and calls for passage of the HOME STAR program to 
provide incentives to homeowners to make energy-efficiency upgrades. It 
also invests in research and development to improve building efficiency 
and supports the President's ``Better Buildings'' initiative to 
catalyze private sector investment in commercial building efficiency. 
Finally, the budget request sponsors R&D on industrial materials and 
processes to help U.S. manufacturers cut costs and improve their global 
competitiveness.
    To maximize our energy technology efforts, the Department is 
breaking down silos and coordinating R&D across our program offices. 
Modeled after our SunShot initiative, we're bringing together our basic 
and applied research programs and Advanced Research Projects Agency-
Energy (ARPA-E) to harmonize their work in areas including batteries, 
biofuels, and electric grid technologies.
    And to encourage manufacturing and deployment of clean-energy 
technologies, the President has called for renewing and extending 
proven tax incentives including the Production Tax Credit, the 1603 
cash payment in lieu of tax credit program, and the Advanced Energy 
Manufacturing Tax Credit (48C).
    As industry, the Congress and the American people make critical 
energy decisions and require greater understanding of domestic and 
international energy markets, it's important that we adequately fund 
the Energy Information Administration (EIA), the Nation's premier 
source of independent statistical information about energy production 
and use. That is why the budget request includes $116 million for EIA.
   unleashing u.s. innovation to create jobs and lead in the global 
                                economy
    Competing in the new energy economy will require our country to 
harness all of our resources, including as the President said, the 
``one critical, renewable resource that the rest of the world can't 
match: American ingenuity.'' A key part of our country's success has 
been our leadership in science and technology, but we can't take that 
leadership for granted. According to the National Science Foundation's 
``2010 Science and Engineering Indicators'' report, from 1996 to 2007, 
the average annual growth of R&D expenditures in the United States was 
about 5 to 6 percent compared to more than 20 percent in China.
    To help keep the United States at the forefront of science and 
technology, the budget request invests in cutting-edge research that 
could spur new jobs and industries. This includes $5 billion for the 
Office of Science to support basic research that could lead to new 
discoveries and help solve our energy challenges. These funds support 
progress in materials science, basic energy science, advanced 
computing, and more. They also provide America's researchers and 
industries with state-of-the-art tools to help take their work to the 
next level.
    The budget request continues to support Energy Frontier Research 
Centers (EFRCs). The EFRCs are working to solve specific scientific 
problems to unlock new clean-energy development. So far, the EFRCs have 
published more than 1,000 peer-reviewed papers and filed more than 90 
patent applications or patent/invention disclosures. Researchers are 
reporting multiple breakthroughs in areas ranging from advanced battery 
technology and solar energy to solid-state lighting and nuclear power.
    The budget request also supports the five existing Energy 
Innovation Hubs and proposes a new Hub in electricity systems. Through 
the Hubs, we are bringing together our Nation's top scientists and 
engineers to achieve game-changing energy goals. The Hubs continue to 
make progress. For example, the Modeling and Simulation for Nuclear 
Reactors Hub has released the first versions of its software that, upon 
completion, will simulate a virtual model of an operating physical 
reactor. The Fuels from Sunlight Hub has filed multiple invention 
disclosures and published scientific papers. And the Energy Efficient 
Building Systems Hub is developing advanced building modeling tools and 
has built one of the country's first 3-D building design labs.
    Additionally, the budget request includes $350 million for the 
ARPA-E to support research projects that could fundamentally transform 
the ways we use and produce energy. ARPA-E has invested in roughly 180 
high-risk, high-reward research projects that, if successful, could 
create the foundation for entirely new industries. These companies and 
research teams are working toward a prototype of a battery that has 
double the energy density and one-third the cost of batteries in 2010, 
bacteria that use carbon dioxide and electricity to make fuel for cars, 
grid-scale electricity storage, and other potentially game-changing 
breakthroughs. Eleven projects that received $40 million from ARPA-E 
over the last 2 years have done such promising work that they have now 
received more than $200 million in combined private sector funding.
    Taken together, our research initiatives will help rev up America's 
great innovation machine to accelerate energy breakthroughs.
                      nuclear safety and security
    In addition to strengthening our economy, the budget request also 
strengthens our security by providing $11.5 billion for the 
Department's National Nuclear Security Administration (NNSA). NNSA 
plays a key role in achieving President Obama's nuclear security 
objectives.
    As the United States begins the nuclear arms reduction required by 
the New Strategic Arms Reduction Treaty (New START), the science, 
technology, and engineering capabilities within the nuclear security 
enterprise will become even more important to sustaining the U.S. 
nuclear deterrent. The budget request includes $7.6 billion for weapons 
activities, a 5-percent increase more than the fiscal year 2012 enacted 
levels. This increase provides a strong basis for transitioning to a 
smaller yet still safe, secure, and effective nuclear stockpile. It 
also strengthens the science, technology, and engineering base of our 
enterprise.
    The budget request also includes $1.1 billion for the naval 
reactors program to ensure the safe and reliable operation of reactors 
in nuclear-powered submarines and aircraft carriers and to fulfill the 
Navy's requirements for new nuclear propulsion plants that meet current 
and future national defense requirements.
    Additionally, the budget request supports NNSA's critical work to 
prevent nuclear terrorism--one of the most immediate and extreme 
threats to global security and of one President Obama's top priorities. 
It includes $2.5 billion to implement key nuclear security, 
nonproliferation, and arms-control activities. It supports efforts to 
detect, secure, and dispose of dangerous nuclear and radiological 
material around the world. And it will help the Department to fulfill 
its role in accomplishing the President's goal of securing all 
vulnerable nuclear materials worldwide in 4 years.
    Finally, the budget request includes $5.7 billion for the Office of 
Environmental Management to protect public health and the environment 
by cleaning up hazardous, radioactive legacy waste from the Manhattan 
Project and the cold war. This funding allows the program to continue 
to clean up and close sites and positions it to meet its fiscal year 
2013 enforceable agreement milestones. This budget request builds on 
the significant progress that has been made by the program. By the end 
of 2011, the program had reduced its geographic footprint by 66 
percent--far exceeding its goal of 40 percent.
            fiscal responsibility and management excellence
    DOE's fiscal year 2013 budget request makes strategic investments 
to promote our country's future prosperity and security. At the same 
time, we recognize the country's fiscal challenges and our 
responsibility to invest in much-needed programs while cutting back 
where we can. That is why the President's budget request eliminates $4 
billion in inefficient and unnecessary fossil fuel subsidies.
    Given the urgency of the challenges we face, the Department is 
committed to performing our work efficiently and effectively. We are 
streamlining our organization to improve performance and save taxpayer 
money. For example, the Department achieved approximately $330 million 
in strategic procurement savings in fiscal year 2011. We are taking 
several other steps such as reducing the size of our vehicle fleet, 
cutting back travel costs, and consolidating Web sites.
    We are also breaking down barriers to make it easier for businesses 
to move technologies from our national labs to the marketplace, which 
can help the United States seize technological leadership and create 
jobs. For example, we've started a program which makes it easier, 
quicker, and less costly for start-up companies to sign option 
agreements to license national lab technologies. And to make it easier 
to work with the labs, we've reduced the advanced payment requirement 
and streamlined the Cooperative Research and Development Agreement 
contract and approval process.
    Throughout American history, the Federal Government has played a 
critical role in supporting industries that are important to our 
prosperity and security, from aviation and agriculture to 
biotechnologies and computer technologies. We should continue to do so 
today to lead in the new clean-energy economy. Countries in Europe, 
Asia, and throughout the Western Hemisphere recognize the energy 
opportunity and are moving aggressively to lead. This is a race we can 
win, but we must act with fierce urgency.
    Thank you, and now I am pleased to answer your questions.

                               MESOSCALE

    Senator Feinstein. Thank you very much, Mr. Secretary.
    I will begin with, hopefully, three rather short questions.
    The largest increase in the Office of Science is for a 
program called mesoscale science. It is not defined. I do not 
know what it is. I do not know why it is a priority, and I do 
not know why we need to start a new $42 million program called 
mesoscale science. Can you explain that?
    Secretary Chu. Sure. First, some definitions.
    You understand what is the atomic, molecular, and so-called 
nanoscience. This is of the scale of maybe a few hundred 
nanometers and below. It is largely at a molecular scale.
    Then you have another branch, the macroscopic size. If you 
think of a hunk of silicon that has certain electronic 
properties and things of that nature, you go smaller and 
smaller and smaller. There is this intermediate scale, not 
quite nano scale, but bigger than that at the thousand 
nanometer to sub-millimeter scale, microns scale, which we see 
popping up in very many things, from the properties of 
semiconductors to the new advanced materials, for example, 
high-strength steel. To understand this whole gradation of 
sizes is very important.
    So I would not say it is a new area so much as a 
recognition that while we have made great progress in the nano 
scale and we know what bulk materials are, there is this middle 
gap where many of the properties of materials seem to lie.
    Senator Feinstein. Why is it necessary now?
    Secretary Chu. We always knew that there are these size 
scales and that different things affect these different size 
scales. As we understand more about advanced materials and as 
we develop these diagnostics and see what are the material 
properties and what is the size scale that they are due to, we 
are finding out that the mesoscale is an important part of 
that.
    Senator Feinstein. We are going to have to talk more about 
it later.
    Secretary Chu. I would love to brief you.

        FUSION--INTERNATIONAL THERMONUCLEAR EXPERIMENTAL REACTOR

    Senator Feinstein. Let us go to fusion and ITER and the 
$150 million this year with the United States contribution to 
ITER subject to grow to $300 million. Now, this is going to 
take money away from domestic fusion programs--they are already 
concerned about it at National Ignition Facility (NIF)--and 
also other scientific priorities such as materials and biology 
research.
    Here is the question: Should the United States consider 
withdrawing from ITER or at least reducing the United States' 
contribution? If we do continue to fund it, where will the $300 
million come from?
    Secretary Chu. Well, Senator, you are asking a very 
important question that we have asked ourselves. But first, let 
me assure you that the program at NIF is not actually competing 
with ITER. NIF is supported by the NNSA budget, and we want to 
make sure that that NIF program goes forward.
    Now, ITER is an international science collaboration. In the 
view of the fusion community, it represents the most advanced, 
best chance we have of trying to control plasmas in a way that 
can potentially bring about controlled fusion for power 
generation. And it is an international cooperation. We want 
this to go forward. We want to be seen as reliable 
international partners, but we are also very cognizant of the 
spending profiles and we are working with the fusion community 
in the United States, as well as internationally, to see if we 
can satisfy both the needs of the fusion community in the U.S. 
and this ITER commitment. In these tight budget times, it is 
tough.
    Senator Feinstein. Yes. At a later time, I want to know 
where the $300 million is going to come from. If we keep 
continuing and do not know where we are going to get the money 
next year, that is a serious concern.

                      WASTE ISOLATION PILOT PLANT

    The last question: Waste Isolation Pilot Plant (WIPP), New 
Mexico, currently operates to dispose of transuranic waste from 
DOE cleanup sites. We provided $215 million for WIPP 
operations. With this total amount of funding, the Department 
decided to put $37 million of it toward characterization 
activities. The fiscal year 2013 request for WIPP is $198 
million, with $23 million allocated for characterization.
    I have met with members of the Carlsbad community and force 
who are concerned that this total level of funding is not 
adequate. Can you speak to that? Is it in fact adequate?
    Secretary Chu. Well, again, it is a very tight budget 
situation, but we believe it is. We enjoy the support of the 
Carlsbad community, and a lot of what we are doing there is 
very important not only for the disposal of the transuranic 
waste, the low-level waste, but potentially that type of 
geological strata could be useful.
    Senator Feinstein. Yes. I think Senator Murkowski has been 
working on this, as have Senator Alexander and myself. I think 
we would agree with that, and WIPP is really the only thing 
that we have at this time, it seems to me. So what I want to be 
sure of is that it is adequately funded. Can you say 
categorically that it is?
    Secretary Chu. Well, we believe it is, but we understand 
your concerns with that. Again, it is one of several types of 
geological sites that we would be very interested in exploring 
vis-a-vis the BRC report.
    But again, I am going to make it very clear. We have not 
even set up a process for actually doing sites, but just the 
research of salt and the research in the ability of salt to 
contain high-level waste is something we are looking at very 
seriously and following the recommendation of the BRC.
    Senator Feinstein. Senator Alexander.

                  NUCLEAR PROJECTS AND WASTE CLEAN UP

    Senator Alexander. Thanks, Madam Chairman.
    Two nuclear questions, Mr. Secretary, quickly if I may.
    You have a decrease of 12 percent for nuclear energy, and 
most of it comes from reactor concepts which focuses on 
advanced reactors like fast reactors. Are those not essential 
if we are going to deal with the question of nuclear waste?
    Secretary Chu. Well, we are going to have to deal with the 
question of nuclear waste. Period.
    Senator Alexander. But in the end, we will have to have a 
fast reactor. Will we not?
    Secretary Chu. We may and may not. The verdict is not in. 
We do want to look at research, the idea that the fast reactors 
use high-energy neutrons that help burn down transuranic waste 
and greatly reduce the amount of eventual waste as compared to 
the electricity generated.
    Senator Alexander. Yes. And my second is you have $65 
million for the small modular reactor, and I appreciate the 
chairman's willingness to support this while we take seriously 
the waste problem at the same time. But this is $30 million 
short of what we described last year. How does that meet the 
needs of the 5-year $452 million program that you outlined last 
year?
    Secretary Chu. Well, again within our budgets, we are 
trying to move forward on this. We believe the money we asked 
for in fiscal year 2013 will help with the engineering design 
of two of these reactors. There are a number of companies that 
are gearing up. They see this as an opportunity for them, and 
so we are going to have to make some tough decisions.
    If I may, I just want to go briefly back to the advanced 
reactor concepts.
    Senator Alexander. I have two or three more questions I 
want to ask you. So if I may, I just want to highlight these 
areas during the time allotted to me.
    I mentioned in my opening remarks you have made good 
progress on cleaning up the radiological waste in Oak Ridge, 
but to date there are more than 2 million pounds of mercury 
unaccounted for and the continued releases of mercury in Poplar 
Creek run through the town. Do you have a plan for addressing 
mercury and its cleanup in Oak Ridge? And what steps should we 
begin to take to keep it from getting into the water?
    Secretary Chu. First, you are quite right to be concerned 
about this. We have already taken some steps in the sense that 
when there are rains, we have a holding pond for the storm 
water so that the solids get deposited before it is returned to 
the river, and we know that this is mitigating this problem. 
But we eventually have to address this problem. It is a very 
important problem, and it is very much on our radar screen.
    Senator Alexander. Well, I appreciate your making it a 
priority. And Governor Haslam of our State and I and you--we 
have met on this, talked about it.
    As we finish the cleanup job on radiological waste in Oak 
Ridge, I want to make it an increasing priority to develop a 
plan to clean up the mercury. And I look forward to working 
with you on that. Because you visited there, you know this very 
well. This is not a remote site way out in the desert 
somewhere. This is a very highly metropolitan area which makes 
mercury in the water even more of an issue.

    ENERGY EFFICIENCY AND RENEWABLE ENERGY INCREASE--WIND TECHNOLOGY

    One other question: This is a time for priority setting. A 
29-percent increase in energy efficiency seems to me to be not 
something we are likely be able to do this year, especially 
given the other important priorities in your budget.
    But I want to ask you one other question. You said that you 
recommend extending the production tax credit and the 1603 cash 
grants which go primarily to wind developers who do not want to 
take the production tax credit. The Treasury Department says 
that over the 5 years between 2009 and 2013, that that cost 
taxpayers--those two things together cost $14 billion. The 
Joint Tax Committee says the production tax credit is $6 
billion and the cash grants are $8 billion. Now, that is about 
$3 billion a year and we only spend a little more than $5 
billion a year on energy research in our Government. I would 
like to get that energy research number up to $10 billion.
    You have testified that wind is a mature technology. If it 
is and if we are in a time of priorities and if we need to 
double our funding for energy research, why would it not be a 
good idea to phase out these long-term subsidies. The 
production tax credit started as a temporary tax credit in 
1992. Why would we not phase those out and use it for research, 
for your hubs, for solar, for carbon recapture, for offshore 
wind, but not to subsidize a mature technology?
    Secretary Chu. I think there is not that much disagreement 
between you and the wind industry in the sense of allowing a 
phase-out period. But the wind industry has made great 
progress. It is becoming a mature technology, as they note. The 
good news is that their costs are becoming comparable to any 
new form of energy. They are still more expensive than new 
natural gas, but they are within striking distance. To actually 
begin to think of a way to phase this out is something that 
even the representatives of the wind industry acknowledge 
should happen.
    Senator Alexander. Well, that is an encouraging comment. My 
reading of history suggests that long-term subsidies--and 20 
years is long-term--tend to cause costs to stay high instead of 
introduce the competition that cause costs to go lower.
    But I have used all my time, Madam Chairman. Thank you.
    Senator Feinstein. Well, thank you very much, Senator 
Alexander.
    Senator Johnson and then Senator Murray, Cochran, 
Murkowski, and Collins.
    Senator Johnson. Secretary Chu, welcome and thank you for 
being here today.
    As you know, over the past year, operations of South 
Dakota's Homestake mine have been moving forward and tremendous 
progress has been made on the development of the Sanford 
underground research facility. Given major scientific 
discoveries recently announced in the field of high-energy 
physics, it is more important than ever that the U.S. invest in 
a domestic underground research facility in which we can 
provide global leadership in science and technology.
    Unfortunately, it is my understanding that the Department's 
request would reduce funds for sustaining operations by about 
one-third below the fiscal year 2012 level. This reduction 
would likely result in layoffs at the lab and undermine 
confidence of our longstanding State, international, and 
private partners that have dedicated significant funding to 
this project.
    How does the Department plan to sustain this critical U.S. 
underground research facility to continue to attract 
international interest and keep dedicated private and State 
partners together given the current budget request?
    Secretary Chu. Well, Senator, we want very much to have 
this underground laboratory continue. We recognize the 
leadership of your State, actually of Mr. Sanford as well. We 
are completing plans for exactly what type of detector we are 
going to be putting in there for this long baseline experiment. 
There has been a shift. There have been new technology 
developments, and the Office of Science tells me that they 
think that a liquid argon detector might be the best detector. 
So what we have done is we have said, ``All right, let us 
continue studying this liquid argon detector.''
    We do want to move forward on this type of work and this 
experiment. Despite all of the strains in our budget, we do 
believe that you cannot really tell where basic research will 
give us new insights and new opportunities. And high-energy 
physics, nuclear physics, cosmology, these are areas that are 
essentially flat, but we still treasure them and want to 
continue them.
    Senator Johnson. The administration has been focusing on a 
broad energy policy to address high-energy costs which includes 
expanded domestic oil and gas production, alternative fuels, 
and energy efficiency. I do agree that oil and gas production 
can and should be increased in a safe and responsible way where 
we can.
    But as you know, the United States has about 2 percent of 
the world's oil reserves and we account for about 21 percent of 
the world's petroleum consumption. Our current level of 
dependence on oil, no matter where it is from, subjects us to 
the price volatility of world oil markets and the shocks that 
come from both real and threatened supply disruptions. 
Accordingly, I would like to focus on the importance of 
diversity on our energy mix and specifically advances in 
biofuels that can be developed in rural America.

                                BIOFUELS

    Could you elaborate on efforts in the budget both within 
DOE and across agencies, for example, with the Department of 
Defense (DOD) and United States Department of Agriculture 
(USDA), to drive development and commercialization of advanced 
biofuels?
    Secretary Chu. Well, Senator, we share your enthusiasm for 
advanced biofuels. We think that research, development, and 
demonstration of those advanced biofuels is something very much 
in the interest of the United States so that we can diversify 
our supply of transportation energy. Liquid transportation 
energy will be with us in this century, and there is a great 
deal of pain that our citizens businesses feel if oil is the 
only source.
    Now, the good news is that there has been remarkable 
research in transforming, biowaste feedstocks, feedstocks that 
do not necessarily compete with prime agricultural land for 
food. We are very bullish on this because this is one of the 
most rapidly advancing areas in science and technology.
    We have these bio-energy centers that were started in the 
previous administration under Sam Bachman's leadership that are 
going great. As a measure of how well they are going, just this 
last year agreements with about 23 companies to share 
technology, now totaling about 50. In this ramp-up period over 
3\1/2\ years, you just see it ramping up, but lots of people in 
the private sector have gotten very interested and are taking 
this technology. So that is a very good sign. That is a measure 
of success.
    But we want to actually diversify not only for the biofuels 
but also so that electrification can take some of the load. 
Natural gas can take some of the load, that will also bring 
relief to Americans.
    Senator Johnson. Thank you, Dr. Chu.
    Senator Feinstein. And thank you very much, Senator 
Johnson.
    Senator Murray.
    Senator Murray. Thank you very much, Madam Chairman.
    And, Secretary Chu, welcome. Thank you.
    You probably think all I care about is Hanford and the 
Waste Treatment Plant (WTP) because every time you are in front 
of us and we talk, I bring that up. And there is actually a 
real reason for that. It is one of the most difficult projects 
that DOE has ever undertaken, and the Federal Government, as 
you well know, signed a consent decree legally obligating 
itself to complete the cleanup of the Hanford site with very 
specific milestones.
    It has been very frustrating over the past couple years. 
The funding needs that were identified by DOE have changed, and 
those milestones have not changed. And you can expect that the 
Congress does not like to be surprised. So it has been 
challenging. And over time, it has become even more difficult 
to understand how much annual funding you believed we were 
actually going to receive as you wrote that agreement, but it 
is pretty clear now that the Congress does not have ever-
increasing funding to apply to one project.

                         WASTE TREATMENT PLANT

    So as you draft a responsible spending profile as you again 
re-baseline the WTPs, I really caution you to be mindful of 
that and to work with all of us and consult with the Hill as 
you work on that.
    But I did want to ask you, as you do work to re-baseline 
this funding profile, how will you make sure that your agency 
meets its obligations that were set forth in that consent 
decree and under the Tri-Party Agreement? And actually, what 
will happen if DOE fails to meet those?
    Secretary Chu. Well, Senator, as you know, this has taken a 
lot of my personal attention, the attention of the Deputy 
Secretary, and the attention of the Under Secretary. We have 
made some changes in the program. I think we have brought in 
some very good people, and we are balancing the tank farm and 
the WTP project as much as we can. We are certainly working 
very hard and recognize our obligations. We feel in fiscal year 
2013 our obligations are going to be met. But you are quite 
right to be concerned, and we will work with you going forward.
    Senator Murray. Well, what happens if the DOE does not meet 
the consent decree requirements?
    Secretary Chu. First, we do not know for sure, but it 
really depends a lot on the budgets we do get from the Congress 
and what we can do with those----
    Senator Murray. And what budgets the administration sends 
to us, I would add.
    Secretary Chu. Right. Yes, it is a combination of both of 
those.
    Senator Murray. Well, we need to be consulted as that moves 
forward. It is extremely important.
    But, you know, the WTP has been under construction now for 
over a decade and has progressed to nearly complete design and 
more than 60 percent of the construction work is finished. Yet, 
here we are, well into this project, and there have been 
several significant technical issues raised about the WTP. 
These issues have been raised by people working on the site, by 
outside interests, and even the Department itself. Now, we all 
know the WTP is a one-of-a-kind construction project and some 
twists in the road are expected, but it is time to move here 
and inside those black cells, there is no room for error. And I 
wanted to ask you how confident you are that you have 
identified all of the major technical issues and that those can 
be resolved.
    Secretary Chu. Well, the technical issues that have added 
to the budget demands are issues that were known several years 
ago, I think even known before I became Secretary. We are 
trying to resolve those issues with the Defense Board, with our 
people. We agree with you that once that goes hot, you want to 
make sure it is going to work. So that is why we, for the sake 
of prudence, agreed that we should do additional testing, for 
example, with the pulse jet mixers so that we have some 
confidence that there would be no unforeseen event that could 
occur that would mean we would have to go in once it is hot. 
There are several other issues, and we worked through those 
issues.
    Senator Murray. What is your level of confidence?
    Secretary Chu. I think with the pulse jet mixing, there are 
many ways of doing it. So we can buy additional insurance. It 
has to do with the solid waste and the suspension of the solid 
waste in the tank farms, and there are different ways of doing 
that. We could essentially pre-filter so that not all the solid 
waste goes in. So there are things like that just to give us 
added confidence.
    In the meantime, we have a very rigorous way of testing 
whether it is going to work or not. So it is a program that we 
are going to be doing. Until we actually go through and then do 
the testing, I cannot really say.

 FEDERAL ENERGY REGULATORY COMMISSION--BONNEVILLE POWER ADMINISTRATION

    Senator Murray. Okay. Well, my time is almost out, and I 
did want to mention that you know that the Northwest is really 
struggling last spring with too much hydro and wind generation. 
And Federal Energy Regulatory Commission's (FERC) December 
ruling caused more uncertainty. I am concerned about 
suggestions that FERC-mandated regulations are the best way to 
resolve renewable integration issues, and I expect to be 
consulted if at any point you or your staff are considering any 
policies that would increase FERC jurisdiction in the 
Northwest, directly impact our Northwest ratepayers, or affect 
our Bonneville Power Administration (BPA) rates. So I just 
wanted to make sure you knew that.
    Secretary Chu. Absolutely. We will consult with you.
    Senator Murray. Thank you very much.
    Thank you, Madam Chairman.
    Senator Feinstein. Thank you very much, Senator Murray.
    Senator Cochran.
    Senator Cochran. Madam Chairman, we appreciate the 
Secretary's presence before our subcommittee today and thank 
you for your cooperation with us since your confirmation as 
Secretary of the Department of Energy.
    I do not know of any hotter seat in the country right now 
than yours, looking at the gasoline prices at the pumps up and 
down the roads and streets and trying to imagine the challenges 
being faced by people who depend upon using their vehicles in 
business or for whatever purpose they have to use that vehicle. 
They have no other options. No mass transit in some cities and 
towns. People have to rely on that as their primary source of 
mobility. And once you start thinking about the consequences of 
ever-increasing costs of energy, including gasoline, in the 
operation of vehicles, we are going to be in really serious 
trouble. A lot of people individually are suffering terribly 
right now, losses of income and downturns in economic 
activities. Some businesses are becoming obsolete because they 
cannot function as they used to on gasoline that was more 
reasonably priced.

                               OIL PRICES

    What is your outlook right now? What should we be doing as 
the Congress and you as the Secretary of Energy to turn this 
thing around?
    Secretary Chu. Well, Senator, first I feel the pain of the 
American public, the personal stresses, as you very clearly 
described. There are many situations where you are in a certain 
situation. You have no other choice and you have to pay for 
that increasing gasoline bill. As the President has made it 
very clear, we are looking at every tool we have in order to 
try to bring down those prices.
    In the tools that I have personally, we are all looking at, 
short- and mid-term, but they are rather limited. We are going 
to look at all those tools, but in the longer term the first 
thing is to help U.S. auto manufacturers build more efficient 
cars so that people can have those vehicles and have their 
mobility but not have to spend as much at the gasoline station.
    We are very much trying to offload some of the things where 
we can offload. Natural gas--liquid natural gas vehicles for 
long-haul trucks already makes good commercial sense. So we at 
the Department of Energy (DOE) are encouraging this. Private 
enterprise is willing to fund a concern we know of, more than 
$300 million in liquefied natural gas stations because long-
haul trucks that use diesel and go 100,000 miles consume 20 
percent of our petroleum energy for transportation in the U.S. 
So you can make a significant dent in that because of the fact 
that you do not need a service station at every corner. You 
need key service stations on interstates.
    We are just announcing that we intend to--we are asking for 
comment right now, and we are going to put out a FAR on the 
street so that we can get compressed natural gas down in cost. 
The biggest cost is the storage tank in a delivery van vehicle 
or in a personal vehicle. So we are going to be looking at ways 
to reduce the cost of that storage tank, either better 
materials for the high-pressure tanks and research that allows 
us to use adsorbates in the tank so that you are going to have 
the same range with the same volume. If we can get that to 
occur, then we can offer to the public at large, not only the 
American public but the world a different kind of flex fuel. 
You can fill it up with natural gas or you can have gasoline or 
diesel. The same engine will burn both. So depending which cost 
of fuel is less, you have that opportunity.
    We are doing anything we can do--we talked about biofuels. 
Batteries. Batteries are very expensive, but the research we 
have supported have done a great deal. Very recently one of our 
grantees has announced that they have just doubled the world 
record of energy storage in a lithium-ion battery where we 
think that the cost of manufacturing will be no greater. So we 
have just literally halved the cost of the battery. That 
company thinks they can halve it again. At that point, electric 
vehicles that have the same range as today's electric vehicles 
or plug-in hybrids become the low $20,000 range, and that would 
be fantastic because the costs of ownership would then be 
competitive and be even better than competitive with internal 
combustion engines.
    So we are working very hard. We are very focused on this 
problem.
    Senator Cochran. Well, I cannot think of another higher 
priority on our list of challenges that we face in the domestic 
economy than the cost of gasoline in operating vehicles, 
private family vehicles, those that are used in work and 
business. It is very disturbing, and I think we need to come 
together, the Congress and the executive branch, with a 
strategy that produces some results. You made an impressive 
list off the top of your head of things that are being done by 
the DOE, and I would just urge you to do more. Let us get on 
with it.
    Senator Feinstein. Thank you, Senator.
    Secretary Chu. Can we just----
    Senator Feinstein. Go ahead.
    Secretary Chu. We just had a quadrennial technology review, 
a very thoughtful report led by Steve Koonin, the Under 
Secretary of Energy. We made it quite clear in that report we 
have to reapportion the amount of money we are spending. We 
were spending far too little on transportation energy, and it 
was very clearly stated in that report that we have to refocus.
    Senator Cochran. Thank you.
    Senator Feinstein. Thank you.
    Senator Murkowski.
    Senator Murkowski. Thank you, Madam Chairman.
    And following on the discussion here, I think we recognize 
that there is no one silver bullet. We recognize that there is 
a--it takes a long time to translate what you have been talking 
about into a difference in the market, the price to the 
consumer. They say that recognizing that it takes decades for a 
tree to grow to maturity, the best time to plant a tree is now.
    We have faced the argument for decades now that, well, if 
you bring on additional oil out of Alaska's North Slope, 
particularly Arctic National Wildlife Refuge (ANWR), it is 
going to take too long to impact the price of oil or the price 
at the pump. And again, I am just reminded that it does take a 
long time to make it happen. So we should have started decades 
ago. That is my little pitch.

                           HYDRAULIC FRACKING

    I am now going to talk about hydraulic fracking, if I may. 
And this is in regards to a comment that came from one of the 
members of the advisory board, your advisory board, Mr. 
Secretary, that looked at hydraulic fracturing. And we had had 
a presentation before the Energy Committee by the board. I 
thought it was a very informative report, and I was pleased to 
learn of their outcomes.
    But one of the members, Mr. Zorbach from Stanford, said--
his words, ``We think the mystery surrounding hydraulic 
fracturing has actually been exacerbated and people have been 
paranoid really for no reason.''
    There is a lot of discussion right now going on about 
hydraulic fracturing and for lots of good reasons. We are 
seeing an incredible boon across the country in the Marcellus 
and the Barnett, and it is all because of the technologies that 
are out there.
    I came from a hearing this morning where we had the head of 
the Bureau of Land Management (BLM), Mr. Abbey, speaking to 
what United States Geological Survey (USGS) is doing with their 
hydraulic fracking study, the rule that they will be 
promulgating sometime in April I believe. EPA is also doing a 
study.
    The question that I would have to you--I understand in your 
budget, you are asking for $17 million to again review the 
process. You have clearly spent money to do this review, and 
the board has considered that. So I guess the question is: Do 
we need to spend an additional $17 million within the DOE 
budget when we have got other agencies that are also looking at 
it when you have already done it, and at least when one of your 
members has said there's really no reason for this mystery and 
the paranoia. So are we overlapping here?
    Secretary Chu. Well, I sincerely hope not. The whole intent 
of having several agencies, Interior, EPA, and DOE to work 
together is so we do not overlap.
    Senator Murkowski. Are you working together I guess is the 
question that I am asking.
    Secretary Chu. We have begun this process.
    But as far as DOE's role, we with USGS, within the 
Department of the Interior, are pretty knowledgeable about how 
fluids move around in rock. We have gotten a lot more 
knowledgeable about oil and gas since the events of two summers 
ago. And our focus is let us help industry develop; let me also 
say they are making great leaps and improvements in their 
technology. So to continue to help industry improve their best 
practices so we can develop this very important natural 
resource in an environmentally responsible way. So we see 
ourselves as technologists that can help understand when you 
frack, exactly what is happening, help control so that you do 
not over-frack.
    Senator Murkowski. Let me ask then on that because the 
process has been around for decades. It has been around for 
about 40 years. So what are you looking at within DOE in terms 
of the technologies that you are finding is new or unusual or 
can be enhanced or what have you?
    Secretary Chu. Let me give you a couple of examples. 
Seismic sensitivity has been increasing over the last decade. 
So you know exactly how much to frack, when to stop. We think 
we can help with using potentially different fluids if there is 
a source of carbon dioxide. Carbon dioxide as a fracking fluid 
might be a good substitute for water if there is a readily 
available source; there may be in many regions because carbon 
dioxide is produced with oil and natural gas, things of that 
nature.
    I think actually that is well under hand because industry 
has taken a leadership there already. You need antimicrobials. 
Some of the older antimicrobials could have a worse 
environmental impact. So industry, again, has gone in the right 
direction.
    The subcommittee you spoke about talked about helping 
assemble data so that the industry can use it and know because 
best practices improve year by year. Those are some of the 
things we are thinking of.
    Senator Murkowski. Well, it is something I think--it is 
important for those of us that are looking at this from 
different agencies to understand that there is a different 
perspective that is ongoing because otherwise there is a lot of 
studies out there on a technology that, again, has been around 
for a long period of time, and we want to make sure that you 
are talking from agency to agency to understand what the 
purpose and the goal of your reports are.
    Senator Feinstein. Thank you, Senator.
    Senator Collins.
    Senator Collins. Thank you, Madam Chairman.
    Secretary Chu, welcome to the subcommittee.
    As you might suspect, I do want to talk to you today about 
deep water offshore wind and the demonstration project. But I 
want to begin my questioning today talking to you about the 
weatherization assistance program.

                        WEATHERIZATION PROGRAMS

    There are four factors that make weatherization programs 
particularly important for the State of Maine. First, we have 
the oldest housing stock in the Nation. Second, some 80 percent 
of our homes use home heating oil, and with the price of oil 
going sky high, that places a real burden. Third, we are a low-
income State with a lot of elderly individuals. And fourth--and 
I know my colleague from Alaska also has been concerned about 
this--has been the harmful reduction in the Low-Income Heating 
Assistance Program (LIHEAP). So the weatherization effort 
becomes even more important.
    What we have found in Maine is that if you weatherize one 
of these older homes, the homeowner can save approximately $500 
annually in heating costs, and that is real money that we are 
talking about. I know the Department's estimate is heating 
bills could be reduced by about 32 percent. Thanks in part to a 
grant from DOE, there are three new weatherization training 
programs at our community colleges and a technology center. And 
that is important because we need to train people who know how 
to do the weatherization effectively.
    My question to you is: How committed is the Department to 
ensuring an adequate level of funding for weatherization. It 
has sort of gone up and down over the years. There was a big 
increase in the American Recovery and Reinvestment Act (ARRA). 
Then in 2011, it was $171 million. It dropped substantially 
last year, and now you are requesting about $136 million, which 
is way better than last year's final number, which was cut by 
the House, but it is still substantially below the fiscal year 
2011 number.
    Secretary Chu. Well, Senator, this is a very important 
issue. In fact, not only in your State, but in the entire 
Northeast, there is a lot of homes on home heating oil. I see 
several thousands of dollars worth of heating bills when you 
are on home heating oil, which is very, very scary.
    So what are we doing? Well, within our budgets, we are 
trying our best. But there is something else I think we can do 
within our limited budget, and that is to look at ways to 
stimulate investments. Many of these people do not have the 
cash on hand, and yet, if they could get moderate cost loans, 
their out-of-pocket expenses would be zero, but their monthly 
expenses in the savings from the heating bills could be less--
those savings could be greater than the payment of the interest 
and the principal. So if done right, we believe that is 
possible.
    So what would be the structures in order to do this? Some 
States already have them. The utility companies could be a 
supplier of the capital, as long as the utility companies are 
allowed to make a return on that investment to help their 
customers. Home heating oil is not actually attached to utility 
companies, but utility companies do have access to capital. 
There may be other businesses that have access to low-cost 
capital.
    We are also looking at Maine. It is already a brisk 
business, and we are looking at how can we help in the wood 
chip/wood pellet because there, if done right, you are using 
your forests in a recycled way. So your net carbon is zero in 
terms of that. It is much less expensive right now than home 
heating oil. We are also doing research on taking biomatter in 
what is called a pyrolysis. It does not convert it into diesel 
or gasoline, but that is a technical issue that we have to 
stabilize that, but it could be a direct subsidy for home 
heating oil.
    So, we are looking at it in a number of ways to bring 
relief to much of the Northeast. Even with this expansion of 
natural gas, we look very hard into is it possible to run 
natural gas lines. In many places we find it is not. They are 
either too remote, the ground is too rocky--there are many, 
many reasons why you cannot do that. So we are looking at all 
the ways to bring relief to Americans with respect to heating.
    Going back to efficiency, it is really getting a financial 
mechanism in place where people who do not have the $5,000 or 
$10,000 can they get something where the repayment of that debt 
is less than the savings that they make on a yearly basis. We 
all recognize that we will not have the ability to invest the 
way we did during the ARRA days. This is some of our thinking.
    Senator Collins. Thank you. I will wait for the next round 
for the next question.
    Senator Feinstein. Thank you very much, Senator Collins.
    Senator Tester.
    Senator Tester. Yes, thank you, Madam Chair.
    Real quickly, Dr. Chu. You are a smart guy, a researcher. 
From what you know about fracking right now--because I get 
different input from different folks, I do not know if either 
one of them knows exactly what they are talking about. But from 
what you know about fracking right now, is it having negative 
impacts on our water?
    Secretary Chu. Well, I would say from what I know about 
fracking, you can develop it in an environmentally responsible 
way.
    Senator Tester. Is it being done that way now?
    Secretary Chu. Well, I cannot guarantee that everyone who 
is fracking is doing it that way, but certainly what appears to 
be is that a lion's share of the people are doing it 
responsibly.

                             TECH TRANSFER

    Senator Tester. I am interested in developing and expanding 
tech transfer from research agencies throughout Government to 
the private sector. I think it is important. In recent years, 
DOE has done a great job, probably the best of any agency. In 
2009, your agency had 15 times the number of active licenses as 
the Defense Department.
    With those successes that you have had in tech transfer, 
have you been able to recommend to other agencies a way to 
implement--to repeat your success as far as tech transfer goes 
in other agencies?
    Secretary Chu. We are always talking to other agencies, as 
we are also trying to improve the way we transfer technology 
even within the DOE. Thank you for that praise, but we can 
actually do better ourselves and are very focused on that 
because, as I think Senator Alexander said, our research 
universities and our national labs are an incredible asset.
    Senator Tester. And I appreciate that. I think you do a 
good job. I think you probably just admitted you can even do a 
better job. I would just encourage you to share any sort of 
information that you have to other agencies so that they can do 
as good a job as you.

                               FUEL CELLS

    In the 2012 State of the Union Address, President Obama 
exhorted the Congress to not let other countries win a race to 
the future, saying that he would not cede the wind, solar, or 
battery industry to China or Germany because we refused to make 
the same commitment here. Given that Germany, Japan, and South 
Korea's commitments, among other countries, to fuel cell 
electric vehicles and hydrogen infrastructure, are we ceding to 
other countries?
    Secretary Chu. Well, this goes, I think, back to the 
statement of Senator Alexander again. There was a question 
about our FE budget and our solid state fuel cells. We still 
want to continue the support of fuel cells for transportation. 
We think solid state fuel cells are in a stronger position. 
Industry is investing pretty heavily in it--United Technologies 
Corporation (UTC), Rolls, others. And so again, with a tough 
decision, we think solid state fuel cells are actually getting 
to the point where they, especially for backup power and a 
substitute for emergency diesel, look increasingly promising. 
So we do not want to cede fuel cells.
    I would also say that through DOE investments, there has 
been remarkable progress in fuel cells themselves in reducing 
the costs and increasing the longevity. It is not completely 
there yet, but there has been remarkable progress there.
    The bigger issues have to do with the storage of hydrogen, 
something that we still want to work on because it is 
compressed hydrogen. We now have an additional incentive, as I 
said before, about the adsorbate natural gas storage. So we see 
those as real opportunities.
    Senator Tester. So you are still moving forward on your 
commitment to fuel-cell technology.
    Secretary Chu. Yes. But the solid state ones are in a 
better technological place, a more mature place.
    Senator Tester. Have you had the opportunity to meet with 
industry to ask them whether the policies that you have are 
adequate to keep the industry here?
    Secretary Chu. Several times. They are very concerned, and 
they have convinced me that we want to keep this program going.

         BONNEVILLE POWER ADMINISTRATION--PUMPED STORAGE HYDRO

    Senator Tester. Real quickly because I am about out of 
time. I want to talk about pumped storage hydro, and I will not 
go through all this. But 2 weeks ago, you testified in front of 
the Senate Energy and Natural Resources Committee that you are 
pushing BPA to do more pumped storage hydro. I am sure you know 
the background on this. Does this mean that you will reconsider 
the project awaiting investment which will push aside last 
year's by BPA in Montana?
    Secretary Chu. Well, that is trickier. You are absolutely 
right. I am pushing BPA to begin. They have within their series 
of dam within their jurisdiction, they can pump from one dam to 
another. And the first pass, they have looked at it, and they 
said there were other ways of solving this problem. But they 
are looking at pumped hydro. It does get trickier once you are 
pumping from someplace in Montana. Legally they are permitted 
to do it. That is my understanding, but I have to get back to 
you on that.
    We are also very much committed to very inexpensive forms 
of utility-scale storage at the cost of compressed air or 
pumped hydro, but anywhere in the world is something that would 
be very important for the development of our grid system.
    Senator Tester. Thank you, Madam Chair.
    Thank you, Dr. Chu.
    Senator Feinstein. Thank you, Senator Tester.
    Senator Graham, welcome.
    Senator Graham. Thank you, Madam Chairman.
    Are you having fun, Secretary Chu?
    Secretary Chu. Oh, sometimes and sometimes not. Sometimes 
they are more fun than others. Thank you for asking.
    Senator Graham. Thanks for being willing to serve. I know 
it is tough at times.

                             YUCCA MOUNTAIN

    I want to talk to you about a couple things very quickly. 
Yucca Mountain. Do you envision President Obama being able to 
certify that Yucca Mountain will be the central repository for 
spent fuel?
    Secretary Chu. Do I envision that? Well, I think----
    Senator Graham. Probably not?
    Secretary Chu. Probably not.
    Senator Graham. Okay. Well, that is an honest answer, and I 
agree with you. I disagree with his conclusion, but I think 
that is probably where he will be.
    So I have legislation. There are $35 billion sitting in a 
trust fund that is being collected from ratepayers all over the 
country to deal with the spent fuel issue, and we got a big 
hole in the ground and nobody is going to use it at least for 
spent fuel. So I have got legislation that says that 75 percent 
of the $35 billion will be rebated back to the consumer through 
the utilities so people can get a reduction in their power bill 
for the money they have already paid, and the other 25 percent 
will be used to upgrade on-site storage facilities in a manner 
to make sure they are safe. If we do not have a central 
repository, we are going to have to use existing facilities at 
least for a while.
    Does that make sense to you?
    Secretary Chu. Well, Senator, I am going to side with the 
BRC on this one. I think that we have a spent fuel problem, and 
the BRC has recommended, we are collecting a lot of money 
directly from the people who generate that power. We would like 
that money to go directly to this issue so that we actually 
begin to solve this.
    Senator Graham. How much did Yucca Mountain cost thus far? 
How much have we spent on Yucca Mountain?
    Secretary Chu. Certainly billions, but I do not know 
exactly. We can get the number back, but I think you have it.
    Senator Graham. Well, I do and I will not share it with 
you. I will tell you later. It is not $35 billion. I guess my 
point is that I do not see any system costing $35 billion. So 
we would like to work with you to get some of this money out of 
the trust fund back to the ratepayers and in all seriousness 
improve on-site storage because there is not going to be 
anything new in the next 5-10 years.
    Senator Feinstein. Oh. We will talk.
    Senator Graham. Okay. She is going to fix it.
    Assuming that Senator Feinstein does not fix it in the next 
5 years, I think we need to improve on-site storage. So I would 
like to talk with you about how to do that with existing funds.

                         NUCLEAR REACTOR LOANS

    The loan guarantee program. I am very impressed with the 
administration's embracing the nuclear power. Quite frankly, I 
think you have been very pro nuclear as Secretary of Energy. Do 
you still support the loan guarantee program for nuclear power 
reactors?
    Secretary Chu. I do.
    Senator Graham. And the couple that are being built now in 
South Carolina and Georgia--you would urge the country to stay 
behind that program, building these two reactors?
    Secretary Chu. Yes. I think it is important, with the good 
Senator from California here as well, I think it is important 
that we have a diversity of energy sources. I think the power 
countries themselves do not want to be----
    Senator Graham. I do not want to speak for her, but I think 
her concern is what do you do with the spent fuel because if 
you build more reactors, you got more spent fuel. So if we can 
solve that problem, we kind of help her.
    So I appreciate you supporting the loan guarantee program. 
I think as a temporary program, if we can get a handful of 
these things up and built, the private sector will have more 
confidence in building reactors.
    So the other issue is the Savannah River site has--you have 
got $15 billion underfunded pension plans. We are going to 
transition in January 2013 to a new healthcare retiree benefit 
plan, and we are working with your office about how to do that 
gradually and fair to people on fixed incomes. So I am going to 
personally visit with you on this to make sure that we can 
transition to a new healthcare benefit without putting people 
who have won the cold war in unnecessary jeopardy.
    Secretary Chu. I would be glad to.
    Senator Graham. Will you please tell the people at the 
Savannah River site we are talking?
    Secretary Chu. Yes.
    Senator Graham. Okay, good because I hope they believe me, 
but we are. We are really working hard on that.

                                OIL/GAS

    Now, let us talk quickly about gas. You are for small 
modular reactor research? That could be the future?
    Secretary Chu. I think it is going to be a very important 
part of our energy option.
    Senator Graham. Okay. I could not agree with you more.
    Now, how many barrels of oil do we use a day in America?
    Secretary Chu. Barrels of oil we use a day. I have to work 
backwards. We are producing about----
    Senator Graham. What if I said 20 million?
    Secretary Chu. That is about right.
    Senator Graham. So how many do we produce here at home?
    Secretary Chu. Petroleum liquids generalized.
    Senator Graham. Oil.
    Secretary Chu. Oil includes petroleum liquids as long as it 
goes into a refinery. About 12, almost 11.5 million barrels if 
you include just the petroleum liquids.
    Senator Graham. I was told 7 million.
    Secretary Chu. That is why I was so careful.
    Senator Graham. Well, the bottom line is I know what 
Senator Murkowski said was true about planting a tree, but I am 
of the opinion if we announced tomorrow that we would embrace 
responsible extraction in ANWR, reopen the eastern Gulf in a 
robust way, and signed the Keystone Pipeline agreement with 
Canada and made it a reality, that the market would respond 
positively to that because that would create 3 million barrels 
of domestically produced oil or bought from Canada, one of our 
best friends. Do you think those three announcements would have 
a positive effect on oil prices in our efforts to be energy 
dependent?
    Secretary Chu. As we announce more tracts of offshore oil 
and Federal lands open for exploration and bids, that directly 
does not seem to have as big an effect as one might think.
    Senator Graham. I do not want to take time away from 
Senator Reed. He has waited patiently.
    I just cannot believe that it would be a positive. I do not 
think it would be a negative thing. I just cannot believe that 
you cannot say yes because clearly, if we opened up more 
domestic production and bought oil from Canada and created 3 
billion barrels that we do not have today, people would see 
that as a positive sign. I just encourage you to look at those 
three things.
    Thank you for your service.
    Senator Feinstein. Thank you very much, Senator.
    Senator Reed.
    Senator Reed. Thank you, Madam Chairman.
    Thank you, Mr. Secretary, for being here.
    I want to associate myself with the comments that the 
Senator from Maine made about weatherization. I thought she was 
particularly eloquent and precise about the importance of the 
program. And I appreciate your response which is, you know, we 
are trying to compensate for the fact that we will not see this 
money go up again. We all understand, as Senator Collins 
pointed out, there was a big burst of funding under the 
Recovery Act. It took a while to get out.

                             WEATHERIZATION

    But I think there is an important point to be made. The 
studies I have seen suggest that for every $1 we invest, we get 
$2.51 back in terms of demand reduction, in terms of avoided 
costs. We have also put, as you certified last December--we met 
the Recovery Act goal of 600,000 homes weatherized; 14,000 jobs 
were supported. Up our way, this is not just an issue of demand 
reduction and compensating for the LIHEAP. This is good work 
for people who are really out--you know, they are carpenters 
and they are tradesmen and women, et cetera.
    So I appreciate your very thoughtful ways of trying to get 
around a lack of funding, but I think the point that I would 
make--and I hope you would agree--is that this is a program 
that can be justified based upon its cost benefits, its job 
creation, its demand reduction. And I do not think either she 
or I or Senator Murkowski--I will just speak for myself--are 
going to just simply sit back and say, well, that is not worth 
pursuing. I think we have got to pursue this weatherization 
more aggressively. And so your comments.
    Secretary Chu. As we rebuild the infrastructure, 
weatherization, and energy efficiency in buildings I see as 
something we could be doing for the next 30, 40, 50 years 
creating jobs at home and helping American families and 
businesses save money. It is one of the big opportunities we 
have to grow our economy, to grow our jobs, to help us save 
money. That money goes directly back into the economy. So it is 
a very big deal, and we will be looking at spending a lot of 
time on programs such as the Better Buildings program, programs 
that we can actually get off the ground because it can be 
leveraged. I see a leverage of 100 to 1, a much bigger 
leverage, and I see the opportunity for decades of growth.
    Senator Reed. Well, I do too, and I think that is why we--I 
will speak again for myself--we are going to push very hard to 
get more resources for weatherization.
    The other irony is it took such a long time to get these 
programs up and running. If we let them atrophy, which this 
budget will, we will be right back where we started from in 
2009 which is the States were not prepared to spend the money. 
We did not have the certified weatherization people. Now we are 
ready to move. I mean, you demonstrated that when you concluded 
we finally met the Recovery Act goal and we have supported 
those jobs.
    So I think we are just going to ask you, in your internal 
counsels, be aggressive about not just alternatives to 
weatherization but weatherization.

                    RESEARCH AND DEVELOPMENT EFFORTS

    Let me ask you another question, Mr. Secretary, just as a 
general comparison. I cannot think of anyone more superbly 
qualified to lead our research efforts when it comes to R&D in 
sophisticated energy technologies. How is your budget and how 
are we doing relative to other countries? And is that a source 
of concern to you or confidence?
    Secretary Chu. No. It is a concern to me. If I look at 
other countries and how they are borrowing from our playbook--
we have a long history of funding our research and development 
through our national labs, through our universities, and even 
in some companies. They see this as a great way to speed up 
their development, their competitiveness.
    If I look at, for example, a random country, China--not 
quite random--the Chinese Academy of Sciences have been 
increasing their efforts, it is not an honorific society there. 
It is a funding agency. Their budget, 20 percent per year over 
the last decade. They are thinking of going to 30 percent per 
year. When you are compounding at 20 and 30 percent per year, 
this is remarkable. The number of undergraduates who graduate 
with degrees in engineering, in the physical sciences has gone 
up fourfold, fivefold. Ours is roughly flat. These are 
disturbing trends.
    Senator Reed. Just a final point. It sort of reminds me of 
the United States in the 1950s and 1960s where we were, through 
NASA, through the National Science Foundation, spending, 
relative to the rest of the world, huge amounts of money, and 
we were benefitting from it for the last 20-30 years, and now 
the wheel is turning, I think, the wrong way.
    But thank you very much, Mr. Secretary.
    And thank you, Madam Chair.
    Senator Feinstein. Thank you very much, Senator Reed.

                                OIL/GAS

    Now, one question on gas. I have been reading articles that 
say there is ample supply to meet the demand in America today, 
and in fact, companies are selling oil from America abroad. Are 
both of those statements correct?
    Secretary Chu. Well, if you look at the net import of----
    Senator Feinstein. I do not want to waste a lot of time. 
Can you say yes or no?
    Secretary Chu. Right now, the net export/import of refined 
products has tipped a little bit towards export. We refine a 
lot of diesel that we do not use here we ship to, for example, 
Europe and we import gasoline.
    The net import of petroleum and petroleum products--we are 
still importing 48 percent roughly.
    Senator Feinstein. So it is not fair to say that we have 
ample supply for current demand.
    Secretary Chu. We do not have ample domestic supplies of 
oil or petroleum products today. That is correct.
    Senator Feinstein. Thank you very much.

                             NUCLEAR SAFETY

    Now, let us go to the nuclear stuff. When all the reactors 
except for two went off line in Fukushima, it really caused me 
to think. One of the things that I have learned is that you 
cannot out-guess Mother Nature, and therefore going beyond 
design specification in these reactors is important.
    We started last year trying to help you by including money 
to work with industry to improve fuel cladding, and you had 
mentioned fuel cladding and the small modular reactors and 
accident-tolerant fuel. We did this because experts believed 
zirconium fuel cladding played a role in Fukushima, and that 
when the ability to pump water into the reactor was lost at 
Fukushima, the zirconium cladding failed and then likely 
released the uranium pellets. Once the rods reached more than 
1,200 degrees Celsius, the zirconium is believed to have 
interacted with the steam to produce hydrogen which accumulated 
and then exploded. Is that a fair statement?
    Secretary Chu. That is certainly what we suspect. First, 
lots of things will melt at very high temperatures, but 
zirconium is known to interact at very high temperatures with 
water to create hydrogen. And there were hydrogen explosions.
    Senator Feinstein. So I think Senator Alexander mentioned 
that we had that meeting. I remember it well on December 14 
with you and the two chairs of the BRC, and the four of us 
resolved that we would work together, the authorizers and the 
appropriators. We will shortly have another meeting and try to 
move from there.
    This is disjointed, but the other day, the chief executive 
officer (CEO) of Pacific Gas and Electric Company (PG&E) walked 
in and said that they are ready to move nuclear waste now. I 
mentioned that to staff. They said so are others. Senator 
Murkowski's State has had big quakes. Oregon has had big 
quakes. We in California have had big quakes. We have two huge 
reactors right on the coast. I am where I am and we have to do 
something about it, and it is so hard to move this.
    I am very frustrated by it because we know what we have to 
do. I think Senator Alexander, at least, and I will likely be 
in strong agreement that we have to move it, and we have to 
enable people to move their waste. Everybody talks about 
nuclear. It is 20 percent of what we have, and it is 70 percent 
of the clean energy. But if it is not safe and if we cannot do 
anything with the fuel other than store it next to a reactor, 
count me out. I mean, I do not want to be there. I now know 
that a 30-foot tsunami hit, and people say, ``Well, do not 
worry. It is not going to happen on the California coast.'' I 
do not know that and you do not know that. And getting rid of 
the waste--securing the waste, to me, is all important.
    So if there is anything that you need in this budget to do 
it quicker, faster, to make the decisions quicker, faster, at 
least I want to advocate for it.
    So here is my question. Do you have what you need to get a 
new nuclear waste policy and find a repository and/or storage 
to move all of this burgeoning waste?
    Secretary Chu. We would need your help and support, the 
help and support of this subcommittee, because as the BRC 
noted, in order to move forward in an expeditious way and an 
effective way, would require a modification of the Nuclear 
Waste Act. Meanwhile, we share your sense of urgency, that is 
why when I spoke with both of you we were taking steps to begin 
the standards and get licensed not only on the dry cast storage 
but the container that you can use to ship it and get the 
Nuclear Regulatory Commission (NRC) to license several of these 
things, we are on our way to doing that. There are a few 
standardized designs. The spent fuel in your sites is in very 
large casks not suitable----
    Senator Feinstein. All I know is what the CEO told me----
    Secretary Chu. Right.
    Senator Feinstein [continuing]. That they are ready to 
transfer.
    Secretary Chu. In addition, the BRC pointed out that there 
are sites where you no longer have operating nuclear reactors 
and yet we are spending a lot of money to guard that material. 
They said you can begin to consolidate those sites, which means 
you have to begin to work towards getting NRC-licensed 
containers for the dry cask storage. There are several vendors 
who have these designs. We are, within the Department, working 
towards that. So we can begin to consolidate. We have 104 
operating sites, and there is probably half a dozen that are no 
longer in operation. It is a terrible burden to be having 
guards and guns for those sites.
    Senator Feinstein. We have a no earmarks policy. I feel 
passionately about this. I want to find a way to get you what 
you need. Can you put on a piece of paper what you need? We are 
to have a meeting. The chairman of the authorizing committee 
has already taken some action and done a lot of work, and we 
will be meeting and talking with him and with Senator Murkowski 
about that. I would like to bring to the meeting what, if we 
took an aggressive position, could be done from the Department.
    Secretary Chu. I would love to do that. As we talked about 
before, there are things that we can do now this year and next 
year, but we would also like to get moving on things that we 
can do to set up this public/private that we also talked about 
and how to get that going as well and begin to have access to 
the yearly take of the money that we are charging ultimately 
the ratepayers so that one has direct access to that. But we 
agree in the first year or so, it would need DOE action and 
what can we do to get it started. In the longer term, I think 
the recommendation of the BRC should be taken very seriously 
about this.
    Senator Feinstein. And we do.
    Secretary Chu. You know, private partner organization.
    Senator Feinstein. I think we are both in agreement. Are 
we?
    Senator Alexander. Well, yes, sure. We are agreed on taking 
it seriously. Absolutely.
    Senator Feinstein. Well, that is what he said.
    Secretary Chu. I mean, the exact design we do not really 
know, but all of us should be considering that very seriously.
    Senator Feinstein. Well, if WIPP can be used for a 
repository, if the State wants to do that, it seems to me that 
there may be other places too. But you have got to go on a 
search. We have got to look and I think move relatively 
quickly.
    Secretary Chu. The good news is there are other States who 
are beginning to show interest.
    Senator Feinstein. Well, that is good. Then we need that 
process. So if you would do that----
    Secretary Chu. Right.
    Senator Feinstein. That is a commitment.
    Secretary Chu. Right, it is a commitment.
    Senator Feinstein. Thank you.
    Senator Alexander.
    Senator Alexander. Well, I appreciate the chairman's 
comment. There is a scientific principle that I have forgotten 
which basically--I think it starts with an S which says that 
when you can, you try to do something the simplest way 
possible, not the hardest. Maybe if you want a loaf of bread, 
you do not go to San Francisco and then to Alaska and then down 
to the corner grocery store. You walk straight to the grocery 
store and come back.
    And I think one of the things that we need to do--and I am 
absolutely committed to work with----
    Senator Feinstein. I know you are.

                   NUCLEAR WASTE STORAGE AND DISPOSAL

    Senator Alexander [continuing]. The Senator from California 
on this--is we need to be really creative and think of what is 
the simplest way to do this right, not what is the most 
complicated way to do it right, and look at a variety of 
options.
    I mean, we have a really ridiculous situation here. I mean, 
the $35 billion just in a pile that we cannot spend. We are 
collecting $750 million a year, some number, that we cannot 
spend, and we should not be collecting it if we are not going 
to spend it. And the practical thing would be to probably do 
this in some stages because there are some closed sites where 
it is very expensive to have all the security just to guard 
some used fuel. There are some other sites, such as the two 
reactors in California, where they would like to get rid of 
their used fuel probably more rapidly than some other sites. 
And we ought to be able to figure out a simple way to 
accommodate that.
    So I am looking forward to this. I am thinking of this 
particularly since I have such a strong ally here--I am a 
strong ally of hers. I think we can figure this out, and I am 
determined to set in motion a process that begins to deal with 
this problem. And I appreciate the help you have given us so 
far.
    I want to switch gears a little bit. I have two questions I 
want to ask.

                           ADVANCED COMPUTING

    One is about advanced computing. Is it your goal that the 
Office of Science have the world's most powerful supercomputer?
    Secretary Chu. It is our goal that we not only have the 
most powerful supercomputer but that it is put to the maximal 
use. The ability to now simulate things that we could never 
have dreamed of simulating 10 years ago and 5 years ago are 
helping industry immensely. Our first hub--you call them mini 
Manhattan Projects, I wanted to call them Bell Lablettes----
    Senator Alexander. That would be good.
    Secretary Chu. Because it was a mixture of the Manhattan 
Project and the radar lab at MIT and what I saw at Bell 
Laboratories.
    Our very first hub was computer simulation for nuclear 
because anything you do in nuclear takes a long time, very 
expensive, NRC approval. For example, simulation so we can make 
safer fuel rods to the Senator's point.
    Senator Alexander. Well, we agree, Dr. Chu, that we ought 
to have the most powerful computer if we are going to maintain 
our competitive position in the world. When I first got here, 
Senator Bingaman encouraged me to go to Japan and see their 
simulator. At that point, Japan had the most powerful computer, 
and thanks to Senator Bingaman--and I was involved--we 
introduced legislation and pretty soon the United States had 
taken over the lead, and we held it for a while. Now China has 
the most powerful computer.
    Secretary Chu. We are third.
    Senator Alexander. And we are third. Japan first, China.
    Secretary Chu. We are third. We have five of the top 10----
    Senator Alexander. Well, the point I am getting to is there 
was a reduction of $11 million for the leadership computing 
facilities, and I am concerned about that. I would like to look 
for other parts of this budget and fill that back up because I 
am afraid that might interfere with our goal of having the 
world's most powerful supercomputer for all these goals that we 
share I think.
    Secretary Chu. Well, we will certainly work with you and 
the Congress.
    You may not know. We just had a workshop to help improve 
the transfer of technology of the national labs with industry. 
There was one on materials and there was one on high-
performance computing. I attended both of them and gave talks 
at both of them.
    Senator Alexander. Good.
    Secretary Chu. I outlined during my, I think, 35-minute 
talk some of the incredible achievements that we have been able 
to do with high-performance computing in industry to give us 
technological advantage.
    Senator Alexander. I am agreeing that they are very 
important. I just want to make sure that we upgrade the new 
leadership class of supercomputers so we can maintain that 
lead.
    I have one question I would like to ask and that will be it 
for me.

                         EFFICIENT AUTOMOBILES

    I had an interesting visit not long ago with the chief 
executive officer of a major automobile company who produces 
electric vehicles. And I said to him, well, I guess you have 
told your engineers that you want a 500-mile battery. He said, 
no, I have told them I want a $20,000 car because people who 
drive--and I am one who does--electric cars now on the average 
drive it 30 or 40 or 50 miles a day. Until we satiate that 
market, it is more important to me commercially to have a 
$20,000 car rather than a 500-mile battery.
    What would your comment be on that?
    Secretary Chu. I absolutely agree with you. It could go up 
a little bit to $23,000. When you are in that range, guess 
what. It is cheaper to own that car and operate it than it 
would be to own a $16,000 gasoline car. That is what will 
generate real excitement.
    Senator Alexander. Cheaper to own it than a what?
    Secretary Chu. Than an internal combustion car. If you 
drive 10,000 miles and let us suppose that your internal 
combustion car has reasonably good mileage, combined city and 
highway of, let us say, 30 miles to a gallon, in today's prices 
you are paying $1,400 a year in gasoline. If you take a Nissan 
LEAF--and how much are you paying for electricity? Well, it 
depends, but if it is 10 cents a kilowatt hour, you are paying 
$300.
    Senator Alexander. I have a LEAF and I plug it in in my 
apartment at night.
    And I think back--if Senator Collins will excuse me for 
telling a story on her time, but we never know what the 
marketplace will tell us. I remember when Federal Express first 
saw a fax coming in in the 1980s, they wondered how it would 
affect their business. And so Fred Smith, who is almost always 
right, came up with the idea of putting a FedEx fax machine on 
every corner, and you would walk down to the corner and send 
your fax and get your fax. Of course, that was not the way it 
worked. People got them at their homes and their offices.
    And I wonder about the charging stations. I do not mean to 
get you in a long discussion about it. But I just plug my LEAF 
into the wall at night on 110-volt battery and that turns out 
to be plenty for me. I do not have a charging station which is 
recommended by most people. My guess is that it is likely that 
instead of a lot of charging stations everywhere, which I have 
supported in the past, that we will get the battery up to a 
certain level, the people will just plug it in at home and at 
work, and that will be it for 95 percent of the plug-ins.
    Secretary Chu. I am with you. I think if you get a 100-150 
mile range, that is going to make it work, there are people in 
rural areas who need more range, of course. But once you get a 
cheap battery, then the plug-in hybrid also becomes very 
inexpensive.
    Senator Alexander. Yes, that is true. That may be the way 
the market goes.
    Thank you.
    Secretary Chu. Well, either way, we are very pro that.
    Senator Feinstein. Thank you very much, Senator Alexander.
    Senator Collins.
    Senator Collins. Thank you, Madam Chairman.
    And, Senator Alexander, that was a very interesting 
discussion, and I think that you raise a good point.
    I am looking to generate that electricity for your LEAF 
through the production coming from deep water offshore wind 
energy to help provide the electricity to charge your LEAF and 
other electric cars.
    Secretary Chu, I want to thank you again for coming to the 
University of Maine and seeing the consortium of public/private 
partnership that we have there that truly has the potential to 
position America as the global leader in the field of clean-
energy development, as well as creating a lot of jobs in the 
manufacture of composite wind turbines.

                             OFFSHORE WIND

    And it has been a very long road, as you know, to get to 
this point, but I am very pleased that the Department has made 
good on its commitment to dedicate $20 million for offshore 
wind demonstration for this fiscal year. I really do not want 
to see other countries in the world, which are making 
investments in offshore wind energy, beat the United States 
because we did not make sufficient investments to spur the kind 
of private investment that is going to be needed.
    With the funding opportunity announcement for offshore wind 
advanced technology demonstration projects, we have an 
opportunity to really position our country well. And I know 
that the commitment is for $160 million over the next 5 years. 
To reach what I understand is the ultimate goal of the $20 
million for this fiscal year, $160 million over the next 5, of 
$180 million over 6 years, what portion of the fiscal year 2013 
EERE budget request do you plan to devote to offshore wind 
demonstration projects?
    Secretary Chu. Well, Senator, my trusty staff just gave me 
the numbers.
    Senator Collins. You have good staff.
    Secretary Chu. Yes, I do.
    So offshore wind funding in the fiscal year 2013 request is 
$36.2 million; fiscal year 2012 enacted, $37.2 million. It is 
essentially flat.
    We do want to concentrate on offshore wind. In fact, we 
shifted it completely to offshore wind, as you well know, 
because as the good Senator from Tennessee knows, it is a 
mature technology.
    Senator Collins. For onshore wind.
    Secretary Chu. But he can probably get his offshore wind 
from the Great Lakes. But in any case, we remain committed to 
developing this technology.
    Senator Collins. I do think it is very important and that 
it is going to require a sustained, clear Federal investment in 
order to secure the matching private investment and bring this 
to fruition.
    I have learned that many other countries such as the United 
Kingdom, Canada, Germany, and Portugal have established test 
sites for ocean energy, and they are funding the environmental 
permitting. They are providing the electrical infrastructure, 
including the undersea cabling and the grid interconnection for 
these test sites. And then private industry comes in and has 
these ready sites to build on and to test the advanced offshore 
wind turbines.
    Do you see the Department as developing plans that would be 
similar to other countries and, in particular, to help them 
develop these offshore sites that have the grid 
interconnection?
    Secretary Chu. I think certainly you are correct, and many 
of the countries in Europe which have very limited land and the 
ability to construct large wind farms on their land look to 
offshore for the same reasons we look to offshore. If you can 
bring the cost down, it is certainly, in terms of the impact on 
people, a lot less.
    We would have to look at that. There was for a while--I 
think it is still alive--a consortium that was looking at, 
along the Atlantic coast, having a direct DC line in part 
because by constructing a DC line from--I think it is--
Virginia, someplace around that, up to the mid-Atlantic States, 
that could be actually funded by just the ability to transmit 
electricity and then when people can put their turbines. So we 
would certainly consider looking at these partnerships to do 
something like that.
    Senator Collins. I very much hope you will since that 
infrastructure does not exist now as you go further north, and 
when you look at where the population centers are, there really 
is great potential for tapping the offshore winds which are so 
strong off the coast of Maine.
    Madam Chairman, I would like to, since my time has expired, 
submit for the record some questions that I have on modernizing 
nuclear weapons, a whole different issue. I was a supporter of 
the New START treaty. I was one of the Republicans who did vote 
for the treaty. And my decision was influenced in part by the 
administration's commitment to modernize the U.S. nuclear 
weapons complex, and I am concerned about the dollar levels in 
this budget not matching the commitment that I thought we 
received. So that is a complicated issue and rather than trying 
to get into it today, if I could, with your permission, submit 
those questions for the record.
    Senator Feinstein. Absolutely.
    Both Senator Alexander and I were aware of what was 
involved in that. The problem is our allocation. Our allocation 
does not allow it because there is the security part of the 
budget, and there are the other portions, energy, Army Corps of 
Engineers. The security part is always expanding and it is 
pushing out the other part of the budget. So it is complicated 
and difficult.
    But thank you.
    Senator Collins. Thank you, Madam Chairman.
    Thank you, Mr. Secretary.
    Secretary Chu. You are welcome.

                 BLUE RIBBON COMMISSION RECOMMENDATIONS

    Senator Feinstein. Before we let you off the hot seat, I 
think you are aware that the fiscal year 2012 bill directs you 
to develop a strategy for the management of spent nuclear fuel 
6 months after publication of the BRC report. So I want to 
politely, respectfully, and in awe remind you that the clock is 
ticking.
    I understand you have set up a task force within the agency 
to develop that strategy. Could you tell us a little bit about 
the progress you have made so far?
    Secretary Chu. Well, we have stood it up. This is also, as 
you might guess, an interagency issue as well, and there must 
be lots of discussions with the other relevant parts of our 
Government to move forward on this. I think both of you know 
where I stand on it. We do want to move forward on this issue. 
It is a solvable problem, and I would agree with Senator 
Murkowski. The full quote that I remember is it takes 20 to 30 
years to grow a tree, so you better plant it today.
    Senator Feinstein. Right. We also provided funds to jump 
start the BRC recommendations----
    Secretary Chu. Right.
    Senator Feinstein [continuing]. To study management models, 
to begin characterizing potential geologic media for a 
repository, and to develop new transportation aging and 
disposal casks. Are you using that money, and if so, for what?
    Secretary Chu. We have contracted Research and Development 
Corporation (RAND) to look into the details of any design of 
what organization might be. So we have contracted RAND.
    We are in discussions with the University of Chicago to 
look at what would be a good business model. There are serious 
questions having to do with Government-liability issues. You 
cannot have an organization not have the liability and the 
Government have the liability and they go off and do something. 
They have to have the liability. But ultimately it is the 
Federal Government, DOE's responsibility, but you have got to 
design it right. Otherwise you can get into a very perverse 
situation where you have an organization doing something. Oh, 
by the way, they do not have the liability. So we have done 
things like that.
    As I said before, we are looking at how to proceed with at 
least consolidating the storage sites. As Senator Alexander 
said, there are sites that are motivated to move it off their 
site. There are other sites, if properly compensated, would not 
mind. So that is part of the simple walk to the grocery store.
    Senator Feinstein. Have you spent the 2012 money?
    Secretary Chu. I cannot say how much of it we have spent, 
but we have not been idle. We can give you a detail of some 
things we have done.
    Senator Feinstein. I think somebody behind you knows.
    Secretary Chu. Pardon?
    Senator Feinstein. I think somebody behind you knows.
    Secretary Chu. All he said is we have the base financial 
report. We will give it to you.
    Senator Feinstein. Yes. I really want to know. Do you need 
continuation of the funding in 2013 or do you have enough 
funds?
    Secretary Chu. We can supply you with all that information.
    But within our jurisdiction now, we are not sitting idly 
by. And the things that we hope the Congress will allow us to 
act on--we are moving forward on these things because many of 
the recommendations we believe are sound recommendations. The 
details need to be spelled out.
    Senator Feinstein. Well, could we receive in writing how 
these monies have been used this past year----
    Secretary Chu. Sure.
    Senator Feinstein [continuing]. And what the plan is for 
2013?
    Secretary Chu. Yes.
    Senator Feinstein. Thank you very much.
    Senator Alexander.
    Senator Alexander. It is the law of parsimony which is 
succinctness or economy. The simplest answer is the best. It is 
the idea of walking to the grocery store instead of going 
through San Francisco and coming back. That is what Spencer 
Wells--I first saw that in the work he--he is a National 
Geographic explorer who has done all the work about DNA 
archaeology, and he talks about the law of parsimony. I think 
we should apply that to what we are doing and use the creative 
talent of our Nobel Prize winning Energy Secretary to say, now, 
just forget about all the hoops we have to jump through, you 
know, the Congressional Budget Office.
    All those things can theoretically be changed by law. So if 
we did not have to think about all the problems that we have, 
as we jump through this, what would be the common sense, simple 
way to accelerate finding a safe, adequate place, maybe step by 
step, to put used nuclear fuel? And then what steps would we 
need to take as Members of Congress to get it done? And I bet 
if we thought about it that way, that we might surprise 
ourselves with a simpler answer.
    So I am going to try to apply the law of parsimony to the 
problem of used nuclear fuel.
    Senator Feinstein. I agree with you on the law of 
parsimony. I also know this is an election year, and this is 
controversial. We want to make progress, so it is very 
frustrating. I think what Senator Alexander is referring to is 
just tell us what you think, disregard everything else. Tell us 
what you think straight on.

                     ADDITIONAL COMMITTEE QUESTIONS

    Secretary Chu. I think we had a great session in your 
office, and I would love to continue that because we were 
exploring our ideas in that session.
    Senator Feinstein. Okay.
    No other questions?
    [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
                      health, safety, and security
    Question. Secretary Chu, you are proposing to eliminate the Illness 
and Injury Surveillance Program (IISP), the only active surveillance 
program across the Department of Energy (DOE) and National Nuclear 
Security Administration (NNSA) that allows for an immediate evaluation 
and monitoring of potential health effects of working at these nuclear 
sites. This program benefits active works--both Federal and contractor 
employees--who put their lives on the line on a daily basis working 
with nuclear material. The IISP currently monitors the health of 
approximately 79,000 current Federal and contract workers at 13 DOE/
NNSA sites across the country, but this budget proposes to shift the 
funding for this important program to the National Institute for 
Occupational Safety and Health (NIOSH) for unrelated health studies, 
which would not actively monitor and survey workers.
    Can you please explain the reasoning behind your proposal to 
eliminate this program and shift work to NIOSH?
    Answer. The reference to the Department of Health and Human 
Services (HHS) in the Office of Health Safety and Security (HSS) fiscal 
year 2013 budget request is specifically associated with the public 
health studies activity. That funding supports the conduct of public 
health studies and other activities performed by HHS on behalf of DOE 
through NIOSH, the National Center for Environmental Health, and the 
Agency for Toxic Substances and Disease Registry to provide third-party 
objectivity regarding the effect of DOE operations on communities 
surrounding DOE sites. The public health studies activity is not 
associated with the epidemiological studies or IISP.
    DOE Office of Health Safety and Security (HSS) has re-examined 
every aspect of its budget to identify opportunities to reduce 
spending. Programs are assessed to determine:
  --overall value to the health, safety, and security posture of the 
        Department;
  --if HSS is the proper organization for funding responsibility versus 
        the DOE Program offices, other staff offices, the sites, or 
        another department or agency; and
  --overall priority among activities for which HSS has funding 
        responsibilities.
    Upon examination of the IISP, HSS determined that the program is:
  --redundant of other mandatory corporate injury and accident data 
        collection systems, such as the Occurrence Reporting Program 
        System (ORPS) and the Computerized Accident/Incident Reporting 
        System (CAIRS);
  --better conducted and paid for by the site organization(s) since it 
        is voluntary; and
  --of a lower priority than other programs for which HSS has sole or 
        primary responsibility, such as nuclear safety and cyber 
        security oversight.
                    bonneville power administration
    Question. Secretary Chu, as you know, 19 out of 21 bipartisan 
members from the Pacific Northwest recently sent you a letter 
describing our view that the Bonneville Power Administration (BPA) 
environmental redispatch policy issues should be resolved in the 
region, where we have a long tradition of working together to resolve 
difficult challenges. The Northwest delegation has a long history of 
working together across State and party lines to support the work our 
region does. Let me reiterate to you that I fully expect you to consult 
me should you or your staff consider any proposal that would increase 
Federal Energy Regulatory Commission (FERC) jurisdiction in the 
Northwest, impact Northwest ratepayers, or affect BPA's rates.
    As I told you, I am concerned about suggestions that FERC-mandated 
regulations are the best way to resolve this issue and other renewables 
integration issues. As you know, the Northwest suffered as a result of 
out-of-control energy markets during the West Coast energy crisis. And, 
our region has thrived without this additional layer of Federal 
regulation--for example, my understanding is that there is now more 
than 4,000 MW of wind connected to BPA's system.
    Do you support regional solutions to renewables integration issues?
    Answer. Yes, I have supported BPA's collaborative working 
relationships with its customers and stakeholders to seek regional and 
legally sustainable solutions to the environmental redispatch policy 
issues and other regional issues. My understanding is that BPA also is 
working collaboratively with its customers and stakeholders to develop 
open access transmission tariff provisions that address renewables 
integration issues in a manner that recognizes the diversity of 
interests involved and seeks to develop a regionally acceptable balance 
of them.
    Let me assure you we are very supportive of maintaining the 
excellent and effective cooperation that Bonneville has developed with 
regional stakeholders, including the Northwest Congressional 
delegation. You and the rest of the Northwest delegation will continue 
to be consulted on these issues to ensure that the concerns of your 
constituents are understood and appreciated.
    Question. Some potential solutions are short-term and others long-
term. Are you aware of all of the short-term solutions BPA has taken 
the initiative to implement to deal with these new operational 
challenges?
    Answer. Yes. My staff and I are familiar with many of BPA's 
activities, starting with reconvening the Wind Integration Forum 
Steering Committee to analyze solutions and their costs and benefits. 
My understanding is that BPA and regional stakeholders have developed a 
significant number of new operating tools and business practices over 
the past 24 months. These include:
  --regulation sharing;
  --intra-hour transmission scheduling;
  --a new electronic bulletin board for intra-hour transactions;
  --new scheduling protocols for wind generators;
  --improved wind forecasting;
  --flexible bilateral contracts; and
  --a new dynamic scheduling system.
    There have also been initiatives developed to explore ways to 
leverage diversity in variable energy resources between balancing 
authorities. These tools will be evaluated in various combinations as a 
further extension of the region's bilateral markets. The region has 
also looked at potentially reconditioning the Keys Pump Generating 
Plant.
    Question. What additional short-term actions have not been explored 
in your view?
    Answer. I have confidence that BPA and the many regional 
stakeholders involved have scoped all viable options and that all of 
the short-term actions have been or are currently being explored.
    Question. Do you agree that long-term solutions need to make sense 
operationally and economically?
    Answer. As with all significant infrastructure, longer-term 
solutions, such as new storage, additional transmission, and better 
utilization of the grid, can be expensive and could affect grid 
reliability and safety. Before deciding which long-term solutions are 
appropriate, I agree that BPA and the region must determine how they 
might affect current system operations, whether they are cost-effective 
and, if so, how to fairly allocate those costs consistent with law.
    Question. Mr. Secretary, I have seen statements from you and your 
senior staff that there is a general need for more transmission. This 
Committee supports our Nation's energy infrastructure and wants to 
assure it is clean, adequate, reliable, and safe. I am concerned, 
however, about views that transmission isn't being built in my part of 
the West.
    The Northwest has a long history of building transmission when it's 
necessary and economically sound to do so. I am aware of transmission 
projects that are being built or are in environmental review by various 
entities, including BPA. In fact, BPA recently completed the 75-mile 
McNary-John Day transmission project, and is looking at more 
transmission in the region based on need.
    If there was a market for more transmission, wouldn't those 
additional projects already be reflected in what currently is being 
studied?
    Answer. I have been very appreciative that utilities in the Pacific 
Northwest, including BPA, have been very active in planning, siting, 
financing, and constructing new transmission lines, and we are very 
pleased with BPA's completion of the McNary-John Day line under budget 
and ahead of schedule. I know that BPA also pioneered the Network Open 
Season model to determine the market demand and business case for 
transmission system expansion, and BPA is working with regional 
customers to continue to refine that model. I also want to challenge 
BPA and other utilities to maximize the capability of existing 
transmission infrastructure to gain efficiencies. We are committed to 
overcoming any significant barriers to construction and financing of 
additional transmission capacity in those cases where there is a 
legitimate business need for transmission.
    Question. The Northwest, including British Columbia, has a long 
history of mutual cooperation to operate one of the largest clean power 
systems in the United States. I'm hearing from my constituents that you 
may have a differing view.
    What specifically would make you conclude that there isn't 
operational cooperation?
    Answer. I understand that there is a long history of cooperation 
among utilities within the Pacific Northwest. At the same time, the 
generation landscape in the Northwest and the rest of the United States 
has evolved to the point where non-utility developers play a very 
significant role in the wholesale power market. I am interested in 
challenging all utility and non-utility participants within a regional 
grid to work together to maximize opportunities to gain efficiencies 
and otherwise promote the public interest.
    I believe there is significant operational cooperation between the 
utilities, wind developers and advocates, policy makers, and regulators 
in the Pacific Northwest, but there is always room for improvement. The 
Nation can look to the Pacific Northwest as a model for such 
cooperation and improvement. We want to promote parties' interests in 
pursuing even greater cooperation to enhance their own systems as well 
as building on the legacy of operational coordination that has been 
going on for decades.
    If there are efficiencies to be captured from operational 
improvements in the West, what specifically do you believe they are, 
and who do you see as the financial beneficiaries of any savings?
    Answer. Efficiencies may be achieved by a more reliable and cost-
effective system with lower costs of managing system variability with 
more efficient use of available assets. However, issues and 
efficiencies will vary by region and should be worked out by an 
inclusive regional committee. I believe the efficiencies will bring 
broad benefits, but decisions must be informed by rigorous cost-benefit 
analyses involving all relevant stakeholders in the region.
                     fuel cell and hydrogen program
    Question. Secretary Chu, this committee expressed its support last 
year for ``stable and consistent funding, now and in the future,'' for 
fuel cell and hydrogen energy technologies.
    Why was the budget for these programs cut by more than 40 percent 
overall? Why was the budget for these programs in Energy Efficiency and 
Renewable Energy (EERE) cut by 20 percent while EERE overall was 
increased by more than 25 percent?
    Answer. The budget request for hydrogen and fuel cells has been 
reduced as part of rebalancing the Department's portfolio of advanced 
technologies. However, hydrogen and fuel cells remain an integral part 
of that portfolio. The budget request for fiscal year 2013 allows the 
Department to focus on hydrogen and fuel cell activities that will 
yield technology advancements in key areas--including ongoing 
reductions in the cost and improvement in the durability of fuel cells, 
reductions in the cost of renewably produced hydrogen, and improvements 
in systems for storing hydrogen. Within EERE, funding has been reduced 
for aspects of the program with less impact on research and development 
(R&D) progress, such as technology validation, codes and standards, and 
market transformation. Rebalancing the portfolio will allow the 
Department to focus on nearer-term transportation technologies while 
maintaining a robust longer-term effort in hydrogen and fuel cells to 
address fuel cell vehicles in the 2015 timeframe and beyond.
    Question. The Obama administration has championed regulations to 
reduce pollution from power plants and from idling trucks. The Solid 
State Energy Conversion Alliance (SECA), the solid oxide fuel cell 
(SOFC) program in the Office of Fossil Energy, is developing and 
commercializing technology to address these issues that will result in 
highly efficient power from gasified coal and natural gas, and 
eliminate idling emissions with auxiliary power units
    Why did the budget request propose elimination of SECA, which meets 
this important goal?
    Answer. The Clean Coal Research Program has prioritized development 
of near-term carbon capture utilization and storage (CCUS) 
technologies, to be available for demonstration in the 2015 timeframe. 
As a result, fiscal year 2013 funding for longer-term fuel cell 
technologies has not been requested. Some SECA Core Technology R&D will 
continue in 2013 using prior year funding. Industry team work on fuel 
cell stack technology to enable low cost, 50 percent-plus efficiency, 
99 percent carbon capture power generation systems will also continue--
at reduced scale. Work will focus on improving fuel cell stack 
reliability and endurance and on preparing for the manufacturing of a 
250 kilowatt (kW) SOFC system module. Demonstration and testing of this 
system module, which represents a building block of future multi-
megawatt coal-based power plants, will be delayed from 2013 to 2015. 
Development and demonstration of commercial-scale fuel cell systems, as 
a CCUS transformational technology, can still remain on schedule for 
2020, dependent upon future program funding.
    As you may be aware, South Korea has made SOFCs a major part of 
their clean-energy plan. Additionally, the United States recently 
negotiated a free-trade agreement with South Korea.
    Question. As I am sure you are aware, South Korea has made SOFCs a 
major part of their clean-energy plan. We just completed a free-trade 
agreement with South Korea last year.
    Are you concerned that eliminating support for this technology will 
drive the industry overseas?
    Answer. Although support for SOFC technology has been deferred to 
allow funding for higher priority CCUS technologies, both Core 
Technology and Industry Programs will continue to be supported in 
fiscal year 2013 using prior year funding. Industry teams have 
communicated their commitment and domestic investment in R&D to make 
progress towards improving fuel cell stack reliability and endurance.
         office of electricity delivery and energy reliability
    Question. Mr. Secretary, you have called attention to the Nation's 
chronic underinvestment in R&D supporting the modernization of the 
electric power grid. I am referring specifically to grid-scale energy 
storage technologies and other control technologies that will enable 
the integration of larger shares of renewable energy, give operators 
better tools to manage the grid in real time, and make it more reliable 
and efficient.
    Moreover, DOE's Quadrennial Technology Review (QTR) emphasized grid 
modernization and related R&D as critical to many of the strategic 
areas highlighted in the Review. So, I am concerned and puzzled by the 
substantial cuts to the Office of Electricity Delivery and Energy 
Reliability's (OE) R&D budgets in your budget request. For example, the 
Smart Grid R&D budget request for fiscal year 2013 is 40 percent lower 
than the fiscal year 2012 budget, and the request for energy storage 
R&D is 24 percent lower than last year.
    It appears that some $20 million is carved out from existing OE R&D 
programs for an Electricity Systems Innovation Hub. I strongly support 
the inclusion of the Innovation Hub, but I am not comfortable with the 
proposal to fund it by reducing other OE R&D programs that are 
strategically critical to achieving many of our national energy policy 
goals, that have been--by the Department's own acknowledgement--
historically underfunded, and that are already being reduced in the 
fiscal year 2013 budget request.
    Could you explain your strategy for the Office of Energy Delivery, 
as it is reflected in the budget request?
    Answer. The fiscal year 2013 budget request of $143 million for the 
OE supports the President's commitment to an ``all-of-the-above'' 
energy strategy that includes critical investments in innovative 
technologies, tools and techniques that will enhance the capabilities 
of a modern power grid. As such, strategic decisions were made to 
prioritize activities providing a balanced portfolio of projects and 
activities that increase electricity reliability and security 
nationwide by taking a systems-level approach to grid modernization, 
developing the computational capabilities to improve system planning 
and operations, and emphasizing cybersecurity. Fiscal year 2013 also 
reflects our ongoing efforts to continue to leverage funding throughout 
the Department, with other Federal agencies and the industry to 
maximize cost effectiveness.
    Question. How is this request consistent with DOE's emphasis in the 
QTR and elsewhere, in which grid modernization has been identified as a 
key priority for DOE and the Nation?
    Answer. The fiscal year 2013 request factors in grid-related R&D 
investments across the Department such as storage, power electronics, 
and control architectures that are being explored within Advanced 
Research Projects Agency-Energy (ARPA-E) programs. Strategic priorities 
and tradeoffs were made to maximize resources and results while at the 
same time minimizing programmatic impacts. Investing in the Electricity 
Systems Hub will allow us to focus on the seam between transmission and 
distribution--a pinch point of grid modernization where power flows, 
information flows, policies, and markets intersect--to tackle the 
critical issues and barriers associated with integrating, coordinating, 
and facilitating the numerous changes that are happening system-wide. 
The Hub activities will accelerate adoption of new technologies within 
a policy and regulatory framework that allows efficient utilization of 
assets and capital investment, including minimizing consumer costs for 
grid modernization.
    Question. What steps will the Department take to ensure that any 
Electricity Systems Hub funding does not come at the expense of key 
ongoing OE R&D priorities, including energy storage, advanced modeling, 
and smart grid analytics?
    Answer. The Grid Tech Team, with DOE-wide representation, has been 
established through the Office of the Undersecretary of Energy to focus 
on improving communication and coordination across the Department on 
grid-related R&D. This diverse group is tasked with developing an 
internal strategy and identifying priorities for grid R&D. The 
Electricity Systems Hub is one of many topics that are under the 
purview of this group and efforts will be made to balance strategic 
priorities and limited resources. The Electricity Systems Hub will 
serve as a platform that can support ongoing OE R&D priorities, 
including energy storage, advanced modeling, smart grid analytics, 
cybersecurity, as well as the ARPA-E investments in power electronics 
and control architectures.
    Question. Mr. Secretary, I am likewise concerned that DOE is 
proposing to fund multiple Electricity Systems Innovation Hub with a 
$20 million budget, while each of DOE's previous innovation hubs has 
been funded at $20-$24 million each. In the Pacific Northwest, we are 
keenly aware that ``one-size-fits-all'' solutions to electric grid 
issues don't work--there are simply too many key differences between 
regional systems.
    But at the same time, the Northwest and its institutions have a 
history of pioneering technologies and grid management paradigms (such 
as Phasor Measurement Unit deployment and some of the earliest real-
world experiments in demand response) that have been subsequently and 
successfully exported to regions across the country and other nations 
across the globe. Moreover, the stated purpose of the hub concept is to 
accelerate innovations that can deliver national outcomes, such as 
enhanced energy security, and to enable new markets and technologies 
that will bolster U.S. leadership in global energy markets.
    Please describe the steps the Department will take to ensure that 
the effectiveness of any Electricity Systems Innovation Hub(s) will not 
be diluted by the proposed budget number, coupled with the concept of 
multiple hubs. If the Congress chooses to fund the hub(s) as proposed, 
will the Department seriously consider limiting the number of hubs to a 
manageable, non-dilutive number?
    Answer. Ideally, the Electricity Systems Hub will be comprised of 
two to three regional hubs that will communicate, coordinate, and 
collaborate on a regular basis. Linking activities and comparing 
results from the different regional hubs will help identify solutions 
that can be applied across the Nation while simultaneously addressing 
unique regional challenges. The decision to pursue one, two, or three 
regional hubs will ultimately depend on the cost-share generated to 
leverage the Federal investment and the quality of the applicants.
    Question. Likewise, will DOE consider a mechanism that allows for 
linkages or participation in multiple hubs, in order to maximize 
learning, innovations, and commensurate benefits for consumers?
    Answer. Regional hubs are expected to routinely communicate, 
coordinate, and collaborate in order to identify innovative solutions 
that are broadly applicable. The Electricity Systems Hub will produce 
valuable information that will be disseminated to various stakeholders 
to ensure shared learning.
    Question. DOE's proposed 3-to-1 industry-to-Government cost share 
for the Electricity Systems Innovation Hub sets a potentially high 
hurdle and, by some accounts, will be prohibitive to the assembly of 
successful public-private partnerships given the patchwork of 
regulatory requirements under which electric infrastructure owner/
operators including utilities currently operate. Please explain the 
Department's rationale in requiring such a high private sector cost 
share: can the Department cite successful precedents?
    Answer. DOE recognizes that a 3-to-1 cost share is an ambitious 
target, but the ratio has been proposed to ensure stakeholder 
commitment to the regional hubs. Teams are expected to apply with 
representation from industry, academia, national labs, utilities, 
States, and other relevant stakeholders. DOE believes there will be 
sufficient interest in the Electricity Systems Hub to generate 
significant cost-share which includes direct funds and contributions 
in-kind. However, we understand your concern about this significant a 
cost-share requirement, and DOE will evaluate this factor as it 
develops the solicitation.
                          water power program
    Question. Secretary Chu, as you well know, my State of Washington 
relies on hydropower for the majority of its electricity supply. Hydro 
is the main reason the Northwest as a whole has a lower air emissions 
profile and enjoys some of the lowest electricity rates. Northwest 
projects are at the forefront of innovation, employing new 
technologies, operating regimes, and environmental enhancements--some 
of which resulted from the DOE waterpower program.
    You have indicated your support for the potential of hydropower as 
an ``incredible opportunity'' that our ``lowest cost, clean energy 
option,'' and the thousands of jobs it can create across our country.
    The Water Power Program also supports R&D on emerging technologies 
in the marine and hydrokinetics arena. Washington State has tremendous 
potential for this technology, and if we can get this off the ground, 
this work could provide the basis for a base load source of clean 
energy--a consistently stated priority of yours and the President.
    But despite these factors, your budget yet again proposes to cut 
the program--this year by 66 percent from fiscal year 2012 levels.
    Why isn't the Water Power Program more of a priority for the 
Department?
    Answer. A robust $59 million budget in fiscal year 2012, a nearly 
70 percent increase over fiscal year 2011, has allowed the Department 
to continue and complete a number of important water power technology 
R&D projects. The $20 million requested in fiscal year 2013 would allow 
the Department's Water Power Program to complete the majority of its 
ongoing research efforts to advance water power technologies and 
accelerate their market adoption. This funding level would allow DOE to 
support a number of water power technologies for both conventional 
hydropower and the emerging marine and hydrokinetic (MHK) energy 
technologies. For hydropower specifically, DOE selected 16 new 
innovative hydropower technology development projects for funding in 
fiscal year 2011, and that work will continue into fiscal year 2012 and 
fiscal year 2013. Additionally, DOE expects to continue its efforts to 
analytically quantify the benefits that conventional and pumped-storage 
hydropower provide to the electric grid, which can also support the 
integration of variable renewable resources like wind and solar. For 
MHK technologies, fiscal year 2013 activities will focus on developing 
and demonstrating a suite of technologies that harness the energy from 
wave, tidal, and current resources. Specifically, MHK research is 
expected to focus on development and maintenance of advanced open water 
test infrastructure for MHK devices (including at the Northwest 
National Marine Renewable Energy Center) and research into the costs 
and performance of innovative, early-stage MHK systems and components. 
Finally, the Department anticipates completing resource assessments in 
fiscal year 2012 and fiscal year 2013 to accurately characterize all 
opportunities for water power development. DOE intends to use data from 
ongoing techno-economic MHK assessments to establish baseline levelized 
energy costs for these new devices, which DOE will use along with 
resource assessments to evaluate the opportunities for further 
innovative water power R&D. The identification of potential future 
water power research needs for beyond fiscal year 2013 will consider 
available opportunities and the progress of ongoing research efforts.
    Question. You recently characterized the Department's intention to 
continue to support the development of hydrokinetic renewable energy as 
distinct from run-of-river hydropower and new hydro at existing dams, 
which you described as ``very mature technologies.''
    However, there are no currently active solicitations under the 
Department's Water Power Program, for hydrokinetic or any other 
technologies.
    Can you clarify when the Department intends to issue new funding 
opportunities for hydrokinetic technologies, and what aspects of 
hydrokinetic development will be supported by these solicitations?
    Answer. DOE is pursuing an aggressive research, development, and 
demonstration effort to determine the technical and economic viability 
of a wide range of MHK technologies. We seek to advance the technology 
readiness of MHK systems through cost-shared industry research and 
demonstration projects. DOE is currently supporting more than two dozen 
such projects and has recently notified two applicants whom had been 
selected as alternates for previous funding opportunities that they 
will now receive funding. The Department is currently evaluating 
options for future funding opportunities for MHK technologies and will 
notify interested parties via a Notice of Intent or Funding Opportunity 
Announcement when more information becomes available.
    The Department also intends to complete a comprehensive techno-
economic assessment in 2013 that will assess the viability of MHK 
systems and identify strategic opportunities to develop and deploy 
these systems in the near term. DOE is also addressing environmental 
and permitting issues in order to proactively address environmental 
performance issues and lower these costs to developers. Finally, the 
Department has also established three National Marine Renewable Energy 
Centers that are centers of excellence for ocean energy, and these 
Centers will cost-effectively support industry demonstration and 
performance monitoring (technical and environmental) efforts. In fiscal 
year 2012, we are investing heavily in testing infrastructure for these 
Centers as directed by the Congress, and the Northwest National Marine 
Renewable Energy Center recently began its first rounds of in-water 
testing.
                                 ______
                                 
            Questions Submitted by Senator Mary L. Landrieu
                      strategic petroleum reserve
    Question. Mr. Secretary, I see that in your budget you propose 
using the $2.4 billion remaining in budget authority related to the 
2011 Strategic Petroleum Reserve (SPR) selldown to purchase 27 million 
barrels of oil to replenish the reserve. I am very interested in the 
management of the SPR, not only because of its great importance to 
national security, but also because it is located on the gulf coast and 
largely stocked with oil produced on the gulf coast. I will point out 
that this purchase of 27 million barrels--which will not even refill 
the reserve--is coming at a time when oil prices are relatively high. 
Given that I opposed the initial sale of oil from the SPR, I am 
concerned about your plans to both manage and refill it, particularly 
in light of continued threats of unrest in the Middle East.
    Will this remaining balance of $2.5 billion be adequate to 
replenish the emergency supplies of oil we so quickly sold off last 
summer, given that $2.4 billion will purchase roughly 24 million 
barrels of oil, which is short of the 27 million you intend to buy and 
the 31 which were actually sold out of the SPR?
    Answer. The SPR will develop an oil acquisition plan to repurchase, 
over a 5-year period beginning in 2013, 27 million barrels of the 31 
million barrels sold using funds available in the SPR Petroleum 
Account, which will provide the Nation with sufficient import 
protection.
    Question. With the threat of further unrest in the Middle East, 
will the Department of Energy be recommending a further selldown of the 
SPR, and if so will it propose a timely replenishment of the stocks 
sold off?
    Answer. The United States and the International Energy Agency are 
monitoring the global markets and are in daily communication on supply 
and distribution issues. The SPR has not been directed to sell 
additional stocks and we cannot speculate about the replenishment of 
supplies.
    Question. Mr. Secretary, I also see that funding for both Research 
and Development activities--activities like developing both new reactor 
technologies and ways to extend the life of our existing fleet--are 
being cut by 35.9 percent. With this funding being used to develop the 
next generation of reactor technologies, including Small Modular 
Reactors and the Next Generation Nuclear Plant (NGNP), and extend the 
life of existing reactors, I am concerned about the effect this cut 
will have on nuclear technology into the future.
    Where does this reduction in funding leave our efforts to develop 
new reactor technologies?
    Answer. The Advanced Reactor Concepts research and development 
program remains an important program for the Department. Reflecting 
difficult resource allocation choices, R&D activities associated with 
lead/lead-bismuth and fluoride high temperature reactors will be 
significantly reduced. The energy conversion R&D, which includes 
supercritical CO2 turbomachinery and related heat 
exchangers, will be consolidated under the Small Modular Reactor 
Advanced Concepts R&D Program in fiscal year 2013. Impacts to sodium-
cooled fast reactor R&D will be minimized as much as possible given 
this concept's potential role in addressing fuel cycle issues, and in 
order to sustain collaborations conducted under international programs 
such as the Generation IV International Forum and various bilateral 
international agreements. Fuel development efforts that support sodium-
cooled fast reactor technology also continue under the Fuel Cycle R&D 
budget. The funding request for the Next Generation Nuclear Plant 
Demonstration Project is sufficient to fund the research activities in 
fuels and graphites, including essential irradiation and post-
irradiation examination.
    Question. What effect will this have on our existing reactor fleet, 
given that these funds are also used to extend the life and improve the 
performance of existing reactors?
    Answer. The Light Water Reactor Sustainability (LWRS) program is 
extremely valuable for addressing both the safety and economic issues 
that could affect how long our existing fleet of nuclear power plants 
operates. Under an austere budget, we made some very difficult 
prioritization decisions. To reduce costs, we are maximizing 
opportunities for cost-share with industry by working very closely with 
the Electric Power Research Institute (EPRI). DOE believes the budget 
request maintains the necessary research on the most critical issues to 
support the continued operation of our existing nuclear fleet.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg
    Question. The fiscal year 2013 budget dramatically cuts funding for 
the Princeton Plasma Physics Laboratory (PPPL) and general fusion 
research. In response to these cuts, DOE's Fusion Energy Sciences 
Advisory Committee (FESAC) sent a statement to the Office of Science 
stating that ``real damage'' would be done to U.S. fusion research. In 
addition, the committee said the proposed funding levels would not 
support a viable fusion research program and that U.S. scientific 
leadership would be jeopardized.
    How do you respond to the concerns of the scientists on the FESAC?
    Answer. The fiscal year 2013 budget proposal was developed with a 
long-term vision for the U.S. fusion energy sciences program. When 
viewed within the context of competing national priorities for energy 
research, the fiscal year 2013 budget addresses the highest priorities 
in the realm of fusion energy research.
    With the fiscal year 2013 budget request, the U.S. continues to 
have a strong investment in fusion research. The United States is a 
partner in the International Thermonuclear Experimental Reactor (ITER) 
Project, which is designed to be the first magnetic fusion facility to 
achieve self-sustaining (``burning'') plasmas and, thereby, open a new 
era in fusion energy science. The proposed budget will sustain a viable 
U.S. program that will continue to make significant contributions to 
resolving vital issues in fusion research and, thereby, contribute to 
building the scientific foundation needed to develop a future fusion 
energy source.
    The fiscal year 2013 budget positions the fusion program to 
maximize the scientific return on our investment in ITER; address gaps 
in materials science, required for harnessing fusion energy; continue 
to steward the broader plasma sciences, taking advantage of cross-
agency synergies and provide opportunities for U.S. scientists to 
conduct research on a $1 billion-class of new international 
superconducting facilities. Although the proposed budget will present 
challenges, it will allow the U.S. to continue to have a dynamic 
domestic fusion program.
    Question. DOE administers the Weatherization Assistance Program 
(WAP), which creates jobs and helps reduce energy costs for low-income 
families. Due to reductions for the program in fiscal year 2012 
appropriations, you chose to allocate funds for project year (PY) 2012 
based on remaining funding from the American Recovery and Reinvestment 
Act (ARRA). Unfortunately, since the Christie Administration was slow 
to spend the ARRA funding, New Jersey received zero funding under the 
WAP for project year 2012. Last month, I sent you a letter asking you 
to reconsider DOE's decision to eliminate weatherization assistance 
funding for New Jersey for project year 2012.
    Have you decided whether to adjust the funding formula for project 
year 2012 to ensure that New Jersey and other States will receive at 
least some weatherization funding this year?
    Answer. The 2012 Consolidated Appropriations Act provided $65 
million to WAP for allocation of formula grants to grantees for the 
2012 fiscal year--a funding level that is less than one-third of the 
amount provided in the 2011 Appropriations for the WAP. The Congress 
also provided the Secretary of Energy with the authority and a strong 
recommendation in House Report language to use an alternate methodology 
other than the formula established in regulation to distribute the 
available funding--taking into consideration unspent ARRA balances and 
other resources available to grantees in 2012 from the U.S. DOE.
    The Secretary exercised this authority and allocated program year 
2012 funds to ensure two major outcomes:
  --grantees that spent their ARRA funds on time have adequate DOE 
        funds to maintain their operations at post Recovery Act levels; 
        and
  --all grantees have adequate funds to operate throughout program year 
        2012, given the fund balances that are already allocated but 
        remain unspent.
The allocations were based on the following criteria:
  --Use of an appropriation amount of $210 million as the base ``PY12 
        Target Allocation'' for establishing funding for each grantee. 
        This is the amount that would have been awarded to grantees 
        through the funding formula as established in the regulations 
        based on a $210 million Appropriation by Congress in 2010.
  --Whether a significant portion of the ``PY12 Target Allocation'' was 
        available in ARRA balances for at least one-half of the program 
        year 2012. Program year 2012 ``Target Allocations'' were 
        adjusted downward for grantees with significant ARRA balances.
    The DOE contacted the New Jersey Department of Community Affairs 
explaining the alternate formula and DOE's determination to allocate 
zero funds to the State of New Jersey, which has a total of $26.2 
million in unspent WAP funds as of August 2012.
                                 ______
                                 
               Questions Submitted by Senator Jon Tester
                          fuel cells follow up
    Question. You stated that you have met with members of the fuel 
cell and hydrogen energy industry ``several times'' to discuss the 
industry and if you are taking adequate measures to keep it from moving 
overseas.
    Please provide the dates of the occasions that you have met 
personally with members of the fuel cell and hydrogen energy industry 
to discuss these issue, and a list of attendees at those meetings.
    Answer. The Secretary met with members of the fuel cell and 
hydrogen energy industry on the following occasions:
    September 29, 2009: Tour and meetings at Rolls-Royce Fuel Cell 
Systems in North Canton, Ohio;
    March 3, 2010: Meetings at United Technologies Research Center 
included meetings on Fuel Cells;
    April 13, 2010: Met with Jadoo Power, as part of a constituent 
event with Rep. Doris Matsui;
    August 22, 2011: Met with the South Carolina Hydrogen and Fuel Cell 
Alliance;
    January 9, 2012: Meetings on Fuel Cell Technology with 
manufacturers at the Detroit Auto Show;
    March 5, 2012: Visited the Fuel Cell Research Lab at Indiana 
University-Purdue University, Indianapolis; and
    May 10, 2012: Meetings and panel discussion with the Hydrogen and 
Fuel Cell Technical Advisory Committee.
    Question. In your answer to my question regarding our commitment to 
this technology compared to that of Japan, Germany, and South Korea, 
you spoke only about stationary fuel cells.
    What are you doing to support the introduction of fuel cell 
electric vehicles and hydrogen infrastructure, does industry believe it 
is sufficient, and if not, are you prepared to cede this industry to 
overseas competitors?
    Answer. The Department includes hydrogen and fuel cells as an 
integral part of its advanced transportation technologies portfolio, 
maintaining the necessary pace of advancement in anticipation of fuel 
cell electric vehicle (FCEV) commercialization in the 2015 timeframe 
and beyond. To support the introduction of FCEVs and hydrogen 
infrastructure, the Department is focusing on critical research and 
development (R&D) to address the key barriers of hydrogen production 
and delivery, as well as key analyses to determine technology gaps and 
focus areas. For example, the Department actively monitors the efforts 
and plans of Japan, Germany, and South Korea along with other 
countries, through the International Partnership on Hydrogen and Fuel 
Cells in the Economy, which is comprised of 17 nations and the European 
Union, as they relate to deployment of FCEVs and hydrogen 
infrastructure. Domestically, the Department coordinates closely with 
similar FCEV and hydrogen infrastructure planning efforts and State 
initiatives including in Hawaii, California, and New York. The 
Department also provides critical analysis of issues related to FCEV 
deployment and hydrogen infrastructure and continues to support data 
collection from FCEVs and key refueling infrastructure technologies 
($2.4 million for five projects announced on July 18, 2012). In 
addition, the Department plans to continue analyses and workshops to 
leverage synergies with natural gas infrastructure.
                          hydraulic fracturing
    Question. Mr. Secretary, both your Advisory Board Shale Gas 
Production Subcommittee and the National Petroleum Council have 
released reports about Hydraulic Fracturing and domestic production of 
oil and gas. These reports provides suggested steps Government, 
industry, and researchers need to take to assure that we have a 
balanced regulatory regime to protect development and citizens. If 
there isn't public trust that this technology can be used safely, that 
will inhibit future development. I believe the industry is starting to 
recognize it.
    With this new input on from these independent panels, what is your 
agency doing to implement the recommendations?
    Answer. The Department of Energy (DOE) is working with the 
Environmental Protection Agency (EPA) and United States Geological 
Survey (USGS) to identify research priorities and collaborate on 
research associated with development of our Nation's abundant 
unconventional natural gas and oil resources. Each agency has a 
different combination of experiences, research strengths, personnel, 
resources and mission mandates, leading to complementary research core 
competencies. The three agencies fiscal year 2013 budget request to 
support this work is $45 million, with DOE requesting $12 million. In 
addition, the Appalachian Shale Recommended Practices Group (ASRPG), a 
consortium of 11 of the Appalachian Basin's largest natural gas and oil 
producers, have announced the creation of the Recommended Standards and 
Practices for Exploration and Production of Natural Gas and Oil from 
Appalachian Shale. The ASRPG Recommended Standards and Practices are 
consistent with the key recommendations of both the U.S. Secretary of 
Energy Advisory Board's (SEAB) final report issued in November 2011, 
and the National Petroleum Council's (NPC) Prudent Development report 
issued in September 2011.
    Question. What do you still need to do?
    Answer. The administration created a new Interagency Working Group 
to Support Safe and Responsible Development of Unconventional Domestic 
Natural Gas Resources. This new partnership will help coordinate 
current and future research and scientific studies, better positioning 
the Obama administration to ensure that continued expansion of natural 
gas and oil production happens safely and responsibly as part of an 
all-of-the-above approach to American energy.
    Question. Do you believe that States and companies are taking the 
proper steps to fulfill these recommendations as well?
    Answer. I do believe States and companies are addressing 
environmentally prudent methods for shale gas development. Fundamental 
to ensuring public safety and community health is the commitment to 
excellent environmental performance and continuous improvement that 
must be maintained by industry and Government. Shale gas development is 
subject to multiple Federal and State regulations. The States 
understand the local geology and hydrology. They are regulating 
hydraulic fracturing effectively and continue to get better by working 
with public and private agencies. State oil and gas commissions and 
many operators are collaborating on the development of a public Web 
site to report chemicals used in their hydraulic fracturing process 
based on the Interstate Oil and Gas Compact Commission and Ground Water 
Protection Council chemical disclosure submission. The industry is 
educating operators on industry best practices. It supports the 
disclosure program created by the Ground Water Protection Council for 
listing chemicals in fracturing fluids on the Web site registry called 
FracFocus, which already includes data for 16,000 wells from more than 
200 companies. Five States have adopted FracFocus in their rules. Also, 
the State Review of Oil and Natural Gas Environmental Regulations 
(STRONGER) is a nonprofit, multistakeholder organization whose purpose 
is to assist States in documenting the environmental regulations 
associated with the exploration, development, and production of crude 
oil and natural gas. Since its initiation, the state review process has 
completed the reviews of 21 State programs responsible for the 
regulation of more than 90 percent of the domestic onshore production 
of oil and natural gas. In addition, the industry is establishing 
regionally focused councils of excellence in effective environmental, 
health, and safety practices.
    Question. Much of these reports, in particular the DOE Advisory 
board's two 90-day reports focus on fracking being used for shale gas.
    Do you believe the same suggestions apply to fracking for oil, like 
in the Bakken?
    Answer. Safety and environmental sustainability underpin our 
Nation's energy security concerning both oil and natural gas. Some of 
the results from ongoing research by the DOE, EPA, and USGS may have 
application to the use of hydraulic fracturing of both oil and gas 
shale formations.
    Question. Your budget includes only a small increase of $2 million 
for the natural gas technology R&D program.
    Do you think your budget request is sufficient to address the 
recommendations of the previously mentioned committees and continue the 
needed research to better understand fracking?
    Answer. DOE's fiscal year 2013 Natural Gas budget request for shale 
gas will focus on the research recommendations received from the 
Subcommittee of the Secretary of Energy Advisory Board, including the 
study of methane migration, chemical interactions between fracturing 
fluids and different shale rocks, induced seismicity triggered by 
hydraulic fracturing and injection well disposal, development of green 
fracturing techniques, and improved casing and cementing integrity.
  office of inspector general report on the department of energy lab 
                           contracting costs
    Question. Mr. Secretary, the Office of Inspector General (OIG) 
cited in their Special Report of Management challenges at the 
Department of Energy that a $1 billion is spent annually to employ 
4,000 staff to protect sensitive sites and labs around the country. 
These protective services are provided by 25 different contracts that 
Government Accountability Office (GAO) labeled (in a separate process), 
``. . . not uniformly managed, organized, staffed, trained, or 
compensated.'' Not only do questions like these raise concerns about 
the security of these sites they also raise questions about the use of 
Federal funds.
    OIG suggested three options to help reduce costs: A master 
contract, consolidating by region and/or federalizing the protective 
force.
    Understanding that not all these options are acceptable to DOE, 
what actions are you taking to implement the recommendations of the OIG 
report and reduce the contracting costs?
    Answer. As the OIG report contends, there are nearly 4,000 
protective force staff involved in providing security for DOE physical, 
nuclear, and information security assets throughout the complex. 
Approximately one-half of those work under the purview of the National 
Nuclear Security Administration (NNSA). DOE/NNSA has taken the lead in 
implementation of graded protection and risk-informed decisions that 
will yield significant efficiencies in the use of Federal funds that 
are necessary for ensuring the maintenance and security of our 
indispensable national nuclear security deterrent. Similarly, DOE's 
Office of Science (SC) has developed a Baseline Level of Protection, 
based on national standards and rigorous peer reviews, which provides a 
common starting point for SC in ensuring adequate physical controls, 
development of the site-specific security posture of each of the SC 
laboratories, and streamlined budget formulation and execution 
processes that minimize the burden on the sites while providing 
sufficient information to advocate for security program resources and 
maintain the flexibility to allocate resources.
    DOE/NNSA agrees with IG-858 and previous GAO reports with respect 
to the lack of uniformity and consistency regarding the contracting of 
protective force services at DOE/NNSA sites. The Office of Defense 
Nuclear Security (DNS) recently completed a detailed analysis of the 
various contracting models currently in place throughout the nuclear 
security enterprise and confirmed that, while the type of contract has 
no bearing on the effectiveness of security, separate prime contracts; 
i.e., those that are procured separately from the management and 
operating contractor, are generally more cost-effective for procuring 
contractor protective force services.
    Informed by that analysis, NNSA initiated the procurement of a 
consolidated protective force contract for security services at the 
Pantex Plant and Y-12 National Security Complex in November 2011. This 
procurement is running largely in parallel with the consolidated 
management and operating contract procurement at the same sites, and is 
expected to yield proportionally similar cost savings and efficiencies. 
With respect to the overall protective force contracting approach, DNS 
is working with the NNSA Office of Acquisition and Project Management 
to implement a more consistent contracting approach for future 
protective force contracts throughout the nuclear security enterprise. 
The pros and cons associated with regional contracts or the creation of 
a ``master'' contract for all sites remain under consideration. 
Important factors that must be weighed include the distinction between 
nuclear and non-nuclear sites, and the need to balance consolidation 
and cost-efficiency efforts with aggressive Departmental small business 
goals.
    There remains no evidence of cost-benefit or performance-related 
enhancements associated with federalizing fixed site protective forces. 
Rather than suggesting a fresh look at the situation as suggested by 
the OIG report, the current budget environment affirms the Departmental 
decision to minimize long-term governmental obligations by maintaining 
the current fixed site contractor guard force arrangement. The 
``potential benefits'' of federalization cited by the OIG report are 
being successfully addressed under current contracting models through 
the implementation of Enterprise-wide Mission Essential Task List 
(EMETL)-based training, standardized uniforms and equipment procurement 
initiatives, and renegotiation of collective bargaining agreements that 
are coming due in 2012. Through the ``Implementation Plan for the 29 
Recommendations of the Protective Force Career Options Study Group'' 
dated January 2011, DOE/NNSA has taken decisive action toward achieving 
its goals of fulfilling the needs of the Government in terms of 
effectively and efficiently contracting for protective force services 
at its fixed nuclear security sites, while simultaneously addressing 
the critically important needs of the contractor employees who perform 
these essential tasks.
    IG-858 recommended the engagement of external public sector 
security experts to review the issue of protective force configuration 
with a view toward reigning in the Department's cost structure. DOE and 
NNSA have been actively engaged in a nuclear security collaboration 
effort to ``harmonize'' the manner in which nuclear security operations 
are implemented throughout the Government. Although the Department of 
Defense and DOE/NNSA have significantly different challenges in terms 
of their respective physical security work forces, the similarity of 
tasks has helped to inform the manner in which NNSA approaches its 
tactical, budgetary and contractual approaches toward accomplishing the 
nuclear security mission. As existing contracts come up for renewal, 
DOE and NNSA are invoking more consistent and cost-efficient 
strategies. In addition to the ongoing Pantex/Y-12 procurement, work 
has begun to initiate a review of the acquisition strategy for 
protective force services at the Sandia National Laboratories, Lawrence 
Livermore National Laboratory and Los Alamos National Laboratory. SC 
has also conducted a separate independent benchmarking study comparing 
SC laboratory security to security at research institutions operated by 
other Federal agencies and the private sector. The result of these 
efforts was the SC Baseline Level of Protection, a streamlined budget 
formulation and execution process, and program management approach to 
implement technologies where possible and reduce recurring contractor 
costs.
                        geothermal energy budget
    Question. Secretary Chu, I firmly believe geothermal power has the 
potential to be a significant part of our base load energy portfolio in 
the future. Senator Murkowski and I have a bill which would greatly 
expand our understanding of geothermal potential, expand use of 
enhanced geothermal systems and allow to co-leasing of geothermal and 
oil wells, helping to secure our energy future.
    Massachusetts Institute of Technology (MIT) estimates, ``. . . that 
with a reasonable investment in R&D Enhanced Geothermal Systems could 
provide 100 GW of cost-competitive generating capacity in the next 50 
years.'' That is why I am excited to see a 72-percent increase in 
Geothermal funding in the department's requested budget and an expanded 
area of study.
    Could you talk in detail about the new focus and long-term plan for 
the geothermal office?
    Answer. In 2011, the Program convened a Blue Ribbon Panel comprised 
of renowned geothermal experts from industry, academia, and the 
national laboratories. The panel recommended that the Program continue 
to invest in the promising potential of Enhanced Geothermal Systems 
(EGS) but to also fund critical research needed to increase exploration 
success for hydrothermal resources.
    Consistent with these recommendations, the Program's technology 
portfolio focuses on two closely-related areas, which balance a near-
and long-term investment strategy: hydrothermal and EGS. Innovative 
exploration technologies and tools support risk reduction for both 
near-term hydrothermal systems and long-term EGS. Additional ongoing 
investments in economic and systems analysis will help identify ways to 
reduce nontechnical costs associated with these efforts.
    The Program budget request for fiscal year 2013 reflects confidence 
that EGS can be a viable and significant-scale baseload energy 
resource: in fiscal year 2012, the first of several EGS demonstration 
projects funded by DOE has clearly shown the potential to produce 5 MW 
from an engineered reservoir in a deep, impermeable, and unproductive 
rock body, with far greater additional potential at this site. This 
partially achieves a critical program goal 8 years ahead of the 
original forecast. Therefore, the program will pursue the development 
of innovative technology solutions through closely managed strategic 
R&D, industry-run EGS demonstration projects, and a Government-led EGS 
test site(s) focused on EGS optimization and validation. 
Simultaneously, the program will advance technologies needed to 
reliably identify new hydrothermal resources, thus developing a lower 
and more predictable risk profile for the industry to accelerate 
deployment in the near and long term. Concurrently, the program has 
initiated a first-ever project to build broad-scale geothermal resource 
maps that can be used by industry to lower the risk of finding new 
prospects.
    At the same time, the Program maintains a complementary effort on 
low-temperature and co-produced geothermal resources, and will commence 
a field project in fiscal year 2013 to actively collect operating data 
from a new coproduction site to better frame this broad area of 
potential.
    Question. Could you also discuss your plans for increasing 
investment in this technology?
    Answer. To bring more clean energy online in the near-term, the 
detection and imaging of subsurface geothermal reservoirs needs to be 
reliable and cost-effective. Upfront risks related to unsuccessful 
exploration activities are also a major barrier to increased 
development of geothermal resources in the United States. Accordingly, 
a major objective of the Program is to increase the probability of 
success of finding geothermal resources, and to lower the attendant 
cost. Lowered risks and costs and greater certainty of outcomes has a 
profound impact on the sector's ability to secure attractive financing 
and backing for renewable energy projects.
    Some of the most promising technologies include innovative 
geophysical and geochemical exploration technologies, which will allow 
the prediction or location of hidden hydrothermal resources. These 
technologies will allow more reliable and predictable subsurface 
temperature, physical rock properties, and permeability.
    The program is particularly interested in faster and less costly 
drilling technologies (spallation or laser drilling), zonal isolation 
or diverter technology development, and monitoring tools. These and 
other technologies are currently funded through our EGS program. The 
ability to develop sizeable and scalable fracture networks through 
which fluid can circulate and pick up heat is integral to EGS reservoir 
sustainability.
    Another example of promising work that has the potential to benefit 
a variety of other sectors is geothermal mineral extraction technology. 
Strategic minerals, such as lithium used in advanced car batteries, are 
often dissolved in the geothermal fluids that are pumped to the surface 
to produce power. This technology extracts lithium from the geothermal 
brine, combined with electricity generation, before the brine is re-
injected into the subsurface.
    In addition, the Program is pursuing development of a Government-
led EGS test site (Site) focused on EGS optimization and validation. 
The goals of the Site include testing new technologies, and 
demonstrating the ability to drill and complete the first-ever 
horizontal well in a geothermal reservoir. The Site is a critical step 
towards creating a commercial pathway to EGS, as it will promote 
transformative and high-risk science and engineering that the private 
sector is not financially or operationally equipped to undertake. This 
investment is in fact similar in scope and potential impact to the 
ground-breaking DOE investments in shale gas from 1978 through 1991, 
which led to the shale gas revolution.
                              hydro budget
    Question. Mr. Secretary, in March of 2010, you signed a memorandum 
of understanding (MOU) with the Army Corps and the Department of 
Interior to identify existing Federal dams with the potential to 
sustainably install or retrofit them with hydropower. In evaluating 530 
sites in this process, 191 sites were identified as having some 
hydropower potential and 70 have economic potential for retrofitting or 
installing to create 225 MW of power.
    This MOU also agreed to continue research in traditional hydro to 
create more fish-friendly and efficient turbines to update our 
infrastructure (since many of these improvements only take a few years 
to pay themselves back).
    Yet this year's budget cuts the Water power budget by two-thirds, 
shifting almost entirely towards marine and hydrokinetic power.
    My question is does this budget request support your commitments 
made in the 2010 MOU for developing advanced hydropower technologies?
    Answer. A robust $59 million budget in fiscal year 2012, a nearly 
70-percent increase over fiscal year 2011, has allowed the Department 
to continue and complete a number of important water power technology 
research and development projects, including a nationwide assessment of 
energy opportunities at nonpowered dams across the United States. The 
$20 million requested in fiscal year 2013 will allow the Department's 
Water Power Program to continue and complete a number of its ongoing 
projects to advance water power technologies and accelerate their 
market adoption, including several efforts that have been coordinated 
and conducted jointly with the Bureau of Reclamation and the Army Corps 
of Engineers. These efforts include demonstrations of new, innovative 
hydropower technologies including the Alden Fish-Friendly Turbine as 
well as low-head small hydropower technologies at Bureau of Reclamation 
facilities, the Water Use Optimization Toolset and various water 
quality modeling efforts to aid in the prediction and improvement of 
water quality at Federal hydropower facilities, and new and refined 
assessments of opportunities to develop new hydropower facilities. 
Based upon the results and evaluation of ongoing efforts, especially 
the identification of new hydropower development opportunities and the 
potential for hydropower and pumped storage technologies to help 
integrate other sources of renewable energy into the electric grid, the 
Department will determine the needs and opportunities for future water 
power research beyond fiscal year 2013.
                         geothermal heat pumps
    Question. Mr. Secretary, it's my understanding that buildings 
dominate our Nation's energy use, consuming more than one-half of our 
electricity and natural gas. Buildings also account for more than 40 
percent of carbon emissions in the United States. With that being the 
case, I think the Department of Energy ought to be doing more to focus 
on the steps we can take to reduce the energy we use to heat and cool 
our buildings and homes, including promoting proven technology like 
geothermal heat pumps.
    What steps does the Department plan on taking to address the market 
barriers that prevent commercial building managers and homeowners from 
investing in energy efficient technologies like geothermal heat pumps 
(GHP)?
    Answer. Key barriers to market penetration of energy-efficient 
technologies like GHPs include high first costs, limited design and 
installation infrastructure, and lack of awareness among consumers, 
policymakers, and regulators about technology benefits. The Department 
is supporting initiatives that seek to overcome these barriers through 
technology development and demonstration, education and training, and 
policy analysis. Through the Recovery Act, the Department is currently 
funding 26 GHP demonstration and analysis projects and 30 Energy 
Efficiency and Conservation Block Grant projects that involve GHPs. 
These projects, as well as input from industry experts and 
stakeholders, will inform future efforts, which will be described in a 
report to the Congress that is in the final stages of preparation. The 
report describes the Department's GHP research, development, and 
demonstration activities and plans, as well as plans to promote the use 
of GHP technologies; analyze policies that affect consumers and 
manufacturers of GHPs; and collect, analyze, and disseminate publicly 
available data and information about these products.
                            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 
U.S. 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 U.S. 
in 2009 was manufactured domestically and much of that manufacturing 
activity occurred in economically challenged rural areas.
    In fiscal year 2010, the 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. While the Department has recently increased its emphasis on 
less mature wind technologies such as those used in offshore 
applications, it should be noted that wind technology innovations and 
improvements supported by the DOE Wind Program are likely to benefit a 
variety of sizes and applications across the wind industry, and small- 
and medium-sized wind remain priorities for the Program. The Department 
plans to continue ongoing efforts to support small- and medium-sized 
wind, and has also identified several market barrier removal, 
deployment, and technology optimization activities as areas for 
investment to accelerate the deployment of wind technologies used in 
distributed applications and to increase the speed of technology 
transfer from low-wind speed utility-scale technology to distributed 
systems.
    The recent growth and maturation of the U.S. small wind industry 
has seen a large number of new products enter the market without a 
framework for verifying manufacturer claims about turbine performance, 
reliability, noise, and safety. Product certification is essential for 
providing consumers, utilities, policy makers, and lenders with 
transparent, third-party-verified small wind turbine performance, 
durability and safety information, and DOE views certification as a way 
to provide manufacturers with the parameters for communicating 
transparent and credible information to stakeholders. To address these 
concerns, DOE supported the development of a technical standard that 
can now be used voluntarily to test small wind systems to performance 
and safety criteria. DOE has also supported the establishment of four 
small wind turbine regional test centers and the Small Wind 
Certification Council, which provides accredited third-party 
verification of test results in accordance with internationally adopted 
technical standards for testing. DOE plans to continue to support 
activities related to achieving its small wind technology goal, which 
is to increase the number of small wind turbine models certified to 
performance and safety standards from a 2010 baseline of 0 to 40 by 
2020. The fiscal year 2012 milestone of five models certified has been 
achieved, and State renewable energy programs are establishing lists of 
qualified small wind turbines for incentive programs based on the 
process for certification developed with support from DOE.
    The Department is also currently supporting research, analysis, and 
modeling to establish near-term cost of energy targets for midsize 
turbine technology and utility scale technology used in distributed 
applications, with the goal of being competitive with national average 
retail electricity rates. Work activities related to achieving this 
goal include economic analysis, next generation midsize turbine R&D, 
standards development, and technology transfer support. Future 
activities in support of this goal might include research to reduce the 
balance of station costs, studies of distribution grid integration, and 
the development and verification of site assessment tools.
    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 Program has identified several market barrier 
removal, deployment, and technology optimization activities (outlined 
below) as areas for investment to accelerate the deployment of wind 
technologies used in distributed applications and to increase the speed 
of technology transfer from low wind speed utility-scale technology to 
distributed systems.
      Resource Characterization.--Research and develop predictive 
        modeling/site assessment and resource characterization tools to 
        reduce project performance uncertainty. Reducing uncertainty 
        will improve access to lenders and help mitigate system 
        underperformance. Distributed wind resource characterization 
        work might include developing and verifying site analysis 
        tools, developing best practices for cost-effective distributed 
        wind resource characterization, and developing predictive 
        economic modeling tools based on these site analyses and 
        resource characterization tools using certified turbine models.
      Grid Integration.--Research and assess distributed wind 
        penetration on distribution grids. Increasing interconnection 
        access to distribution grids operated by publicly owned 
        utilities will increase installed capacity of distributed wind. 
        Distribution grid integration work might include updating the 
        distributed generation toolbox, reporting on how wind 
        installations impact regional distribution grids, assessing the 
        potential to penetrate distribution grids with distributed wind 
        and other variable generation, and quantifying available 
        capacity on the distribution grid.
      Market Acceleration and Deployment.--Provide tools and unbiased 
        information on distributed wind energy impacts, benefits, and 
        project development processes to help stakeholders (homeowners, 
        communities, utilities, and local/State governments) decide if 
        wind energy is right for them, and to reduce upfront time and 
        costs for those pursuing projects. Information provided would 
        vary regionally based on that region's needs and might include:
      --model zoning ordinances or permitting requirements;
      --guidelines for navigating the permitting process;
      --lists of certified turbines and installers;
      --policy comparisons tools;
      --reports on turbine noise, wildlife, or grid impacts;
      --interconnection guidelines and tools;
      --site analysis and resource characterization tools;
      --turbine siting guidelines;
      --case studies; and
      --predictive economic modeling tools for project assessment.
      Technology Performance Optimization.--R&D to improve small and 
        midsize turbine performance, reliability, safety while reducing 
        capital costs is critical for market growth. Small wind 
        technology R&D activities might include a competitiveness 
        improvement project with funding awarded for certification 
        testing, noise-mitigating technology, component improvement and 
        sub-system optimization, system performance optimization, and 
        innovative manufacturing. Midsize wind technology R&D 
        activities might include developing standards, establishing a 
        certification framework, developing and testing prototypes, and 
        testing for certification.
    Question. Often times DOE is focused on large deployments or 
breakthroughs of significant scale, and less on deployment of small 
scale or distributed technologies.
    What are you doing to continue to focus on distributed energy and 
expanding deployment at the small scale?
    Answer. While the Department has recently increased its emphasis on 
less mature wind technologies such as those used in offshore 
applications, it should be noted that wind technology innovations and 
improvements supported by the DOE Wind Program are likely to benefit a 
variety of sizes and applications across the wind industry, and 
distributed energy remains a priority for the Department.
    The recent growth and maturation of the U.S. small wind industry 
has seen a large number of new products enter the market without a 
framework for verifying manufacturer claims about turbine performance, 
reliability, noise, and safety. Product certification is essential for 
providing consumers, utilities, policy makers, and lenders with 
transparent, third-party-verified small wind turbine performance, 
durability and safety information, and DOE views certification as a way 
to provide manufacturers with the parameters for communicating 
transparent and credible information to stakeholders. To address these 
concerns, DOE supported the development of a technical standard that 
can now be used voluntarily to test small wind systems to performance 
and safety criteria. DOE has also supported the establishment of four 
small wind turbine regional test centers and the Small Wind 
Certification Council, which provides accredited third-party 
verification of test results in accordance with internationally adopted 
technical standards for testing. DOE plans to continue to support 
activities related to achieving its small wind technology goal, which 
is to increase the number of small wind turbine models certified to 
performance and safety standards from a 2010 baseline of 0 to 40 by 
2020. The fiscal year 2012 milestone of five models certified has been 
achieved, and State renewable energy programs are establishing lists of 
qualified small wind turbines for incentive programs based on the 
process for certification developed with support from DOE.
    The Department is also currently supporting research, analysis, and 
modeling to establish near-term cost of energy targets for midsize 
turbine technology and utility scale technology used in distributed 
applications, with the goal of being competitive with national average 
retail electricity rates. Work activities related to achieving this 
goal include economic analysis, next generation midsize turbine R&D, 
standards development, and technology transfer support. Future 
activities in support of this goal might include research to reduce the 
balance of station costs, studies of distribution grid integration, and 
the development and verification of site assessment tools.
    Question. Are you willing to commit to working with your sister 
agencies to identify opportunities to expand opportunities for 
distributed technologies?
    Answer. The U.S. Department of Energy would be willing to work with 
other interested agencies to identify opportunities for distributed 
technologies, including Federal and State agencies.
                    coordination with other agencies
    Question. While DOE is certainly the premier Federal agency for 
energy research, development, demonstration, and deployment, many other 
agencies--the Department of Agriculture, the Department of Defense, the 
Environmental Protection Agency, and the Department of Interior--also 
have authority and resources to support energy development and 
deployment. Along those lines you've teamed up with the Department of 
Agriculture to work on the development of biofuels and you have an MOU 
with interior on retrofitting existing hydro assets. That's a good 
first step.
    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?
    Answer. We have a number of formal and informal avenues for 
coordination with other Government agencies. For example, the Advanced 
Research Project Agency--Energy has partnered with the Department of 
Defense to develop innovative technologies for energy storage that can 
be used on ships as well as at naval installations. In addition, the 
Department, through the Office of Energy Efficiency and Renewable 
Energy, has been a co-lead with the Department of Agriculture on the 
inter-agency biofuels group that sets priorities for and oversees 
Federal investments biofuels development. There are many of examples of 
such collaboration. In both of these cases, we are working hand-in-hand 
on solicitations and commercialization opportunities, casting as broad 
a net as possible to harness the best ideas in science and technology. 
As we do so, companies, universities, and research institutions in 
rural America, who are often closest to these challenges, will be 
critical participants and we are actively working to include them in 
our efforts.
    Question. How are you working to assure that rural businesses and 
researchers are participating and winning solicitations from DOE?
    Answer. As you know, the Department of Energy, like other agencies, 
does significant work in rural America by virtue of the locations of 
its key facilities like National Renewable Energy Laboratory in 
Colorado and the Idaho National Laboratory in Idaho. Our laboratories 
become geographic centers for engineering, scientific, and economic 
activity as a matter of our ongoing operations. In addition, we reach 
out to local small businesses, community colleges, and other entities 
to help develop technical expertise and human capital to support not 
only the labs themselves, but also the new industries that the labs 
create.
   pump storage hydro and power marketing administration coordination
    Question. The Power Marketing Administrations and Tennessee Valley 
Authority (TVA) 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?
    Answer. The Power Marketing Administrations (PMAs) are separate and 
distinct wholesale electric utilities within the Department of Energy. 
Each PMA is headed by an administrator who is a career employee of the 
Senior Executive Service. The administrator positions are not Senate 
confirmed. The PMAs do not have boards of directors. Each of the PMAs 
has its own organic statutes governing its Federal power marketing 
mission in the regions that it serves. While the missions of the PMAs 
are similar, their statutory responsibilities vary. For example, while 
BPA has a statutory responsibility to promote energy efficiency in the 
Pacific Northwest, the other PMAs do not have a similar statutory 
responsibility. While the PMAs are operating utilities, they do 
coordinate with the Department of Energy and other administration 
officials on Federal energy policy as is appropriate and consistent 
with their governing Federal statutes.
    The Tennessee Valley Authority, a corporation owned by the U.S. 
Government, provides electricity for 9 million people in parts of seven 
southeastern States at prices below the national average. TVA, which 
receives no taxpayer money and makes no profits, also provides flood 
control, navigation, and land management for the Tennessee River system 
and assists utilities and State and local governments with economic 
development.
    TVA's Board of Directors are appointed by the President and are 
Senate confirmed. The Board guides TVA in achieving the objectives and 
missions established by the TVA Act for the benefit of the people of 
the Valley.
    As provided by the TVA Act and the TVA Bylaws, the principal 
responsibilities of the Board are to establish the broad strategies, 
goals, and objectives, long-range plans and policies of TVA and to 
ensure that those are achieved by the TVA staff led by the Chief 
Executive Officer. Each Director takes an oath to faithfully and 
impartially perform the duties of office. Directors serve part-time.
    The PMAs coordinate with TVA from time to time as they do with 
other electric utilities on energy policy and electric energy 
regulatory matters. The Bonneville Power Administration (BPA) and TVA 
also coordinate from time to time on Federal budget related matters and 
other Federal administrative issues related to self-financed entities.
    Like other electric utilities, the PMAs strive continuously to 
operate reliable power and transmission systems. The PMAs routinely 
maintain their systems and invest in capital upgrades to maintain high 
reliability and efficiency. Their customer utilities understand the 
value of highly reliable power system and pay the costs of those 
investments either through rates or direct customer investments. These 
investments also are at no cost to taxpayers. My understanding of TVA 
is that their operations and maintenance approach is similar.
    Question. Specifically you released a proposal last year 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. This project 
is located in a county with higher than the State average of 
unemployment and a construction project of this size would bring 
significant benefit to the BPA system and to the community.
    Again just 2 weeks ago when you testified in front of the Senate 
Energy and Natural Resources Committee you are pushing BPA to do more 
pump storage hydro.
    Does this mean you'll reconsider the permitted project awaiting 
investment which was push aside last year by BPA in Montana?
    Answer. BPA's primary statutory mission is to market and transmit 
electric power to serve the load requirements of its preference 
customers. BPA also is an open access transmission provider. BPA's only 
authority to acquire the output of generating resources is for those 
customers' load service needs. To my knowledge, the only pumped storage 
project BPA has investigated to date is a rehab of the existing John 
Keys III Pumping Project. BPA has not received any formal request to 
partner with any private developer of pumped storage projects, and 
consequently, has not turned down a pumped storage project development.
                       renewable energy standard
    Question. Secretary Chu, there are a lot of proposals out there to 
increase the market share of Renewable Energy Standard (RES). For 
example, I carried and passed Montana's Renewable Portfolio Standard 
(RPS) while in the State Senate. That effort brought more than $1 
billion of investment to Montana to develop renewable energy. There are 
economic, social, and environmental benefits to this kind of 
investment, but RPS or RES isn't the only option.
    Other members are promoting a Clean Energy Standard which requires 
that 80 percent of domestic energy come from clean sources by 2035. 
Still experts extol the benefits that tax credits and loan guarantee 
programs to expanding development. A recent Congressional Budget Office 
(CBO) report stated that imposing a carbon tax would be the strongest 
market signal.
    With all these proposals on the table, what do you believe is the 
best option to help strengthen the deployment of Renewable Energy?
    Answer. Many of the policy mechanisms mentioned represent viable 
approaches to strengthen the deployment of renewable energy and have 
been tested in various situations in the United States and around the 
world. With the support of current State and Federal policies (such as 
Montana's renewable portfolio standard), the President's goal of 
doubling renewable electricity generation was met in January of this 
year.\1\ In addition, the President has proposed a Clean Energy 
Standard to meet the goal of doubling the share of clean electricity 
including renewables by 2035.
---------------------------------------------------------------------------
    \1\ Goal is relative to end of 2008. 143,425 GWh in the 12-month 
period ending in January 2012 compared to 71,067 for the 12-month 
period ending in December 2008. Data from Energy Information 
Administration (EIA) annual energy review early release: http://
www.eia.gov/electricity/data/eia860/index.html.
---------------------------------------------------------------------------
    One important factor in selecting policy mechanisms to advance the 
deployment of renewable energy is to provide long-term market 
certainty. Providing market certainty will also allow a strong and 
viable renewable energy industry to grow in the United States, with the 
potential to export into the growing global renewable energy market.
    In keeping with the President's ``all of the above'' energy 
strategy, a portfolio of policies may be an effective approach to 
strengthen the deployment of renewable energy.
                                 ______
                                 
            Questions Submitted by Senator Richard J. Durbin
                    fermilab and high energy physics
    Question. Prior to the shutdown of the historic Tevatron facility 
last year, scientists at Fermi National Laboratory may have detected 
the Higgs Boson particle, a long-sought-after particle that is critical 
to explaining the fundamentals of our universe. The lab is now focused 
on probing new scientific frontiers with the Long Baseline Neutrino 
Experiment (LBNE).
    Despite this landmark discovery and other promising results, 
funding for Fermilab was cut $30 million (an 8-percent cut). This cut 
would result in 140 lay-offs. This is in addition to the 90 layoffs 
that occurred this year due to previous budget cuts. These decisions 
only further encourage our best scientists and research facilities to 
leave the United States for European facilities, crippling our future 
in particle physics.
    Given this, what is the Department of Energy (DOE) prepared to do 
to ensure a robust future for U.S. leadership in high-energy physics 
and discovery science research?
    Answer. The Office of High Energy Physics (HEP) believes the P5 
framework of three frontiers of particle physics represents a 
compelling vision for U.S. particle physics. The U.S. will participate 
in the Large Hadron Collider (LHC) program at CERN for the Energy 
Frontier. HEP will support research on dark energy and dark matter on 
the cosmic frontier and HEP plans to center a world-class Intensity 
Frontier program at Fermilab. The Intensity Frontier program will 
utilize the Fermilab accelerator complex to produce neutrino, muon, and 
kaon beams for studies of neutrino oscillations, Charge Parity (CP) 
violation, and provide rare decays that test fundamental symmetries of 
nature. This program can start with the current complex at Fermi, but 
the complex would need to be upgraded in the future.
    LBNE has been part of the roadmap for the particle physics field 
for the last 4 years.
    Question. After extensive review, the National Academies of Science 
and National Research Council urged the U.S. to have a domestic 
underground research facility. What is the Administration's plan for 
the Long Baseline Neutrino Experiment?
    Answer. LBNE has been a key part of the HEP strategy since the 2008 
High Energy Physics Advisory Panel report, ``US Particle Physics: 
Scientific Opportunities A Strategic Plan for the Next Ten Years.'' 
Since 2010, when the National Science Board withdrew National Science 
Foundation (NSF) support for Deep Underground Science and Engineering 
Laboratory (DUSEL), HEP has been seeking a cost-effective solution to 
pursuing the physics discoveries that could be produced by the LBNE. 
The most recent conceptual design presented to the Office of Science in 
January was deemed to take too long to build and had unsupportable peak 
costs. The Office of Science has charged Fermilab to develop phased 
alternatives to deliver science sooner with lower-peak costs. 
Fermilab's response will be submitted to the Office of Science by July 
1, 2012.
                       argonne and supercomputing
    Question. High-performance computing is a key capability of 
America's national laboratories. The Leadership Computing Facility at 
Argonne National Laboratory houses one of the world's fastest 
supercomputers and provides world-class computational capabilities. 
This enables breakthrough scientific research in fuel efficiencies, 
aerodynamics, drug discovery, nuclear energy, and climate change.
    Funding for the Leadership Computing Facilities, like the one at 
Argonne, are critical for continuing our path towards exascale 
computers, which would be 1,000 times more powerful than today's best 
computers. In the past 2 years we have seen significant investments by 
China, Japan, and the European Union in their computing capabilities.
    Can you describe how the DOE will invest to regain and maintain 
U.S. leadership in supercomputing in the future?
    Answer. To address critical missions in Science, Energy and 
National Security, the Department of Energy (DOE) in its 2011 Strategic 
Plan has set a goal to maintain ``leadership in computational sciences 
and high-performance computing.'' The targeted outcome is to continue 
to develop and deploy high-performance computing hardware and software 
systems through exascale platforms. To accomplish this ambitious goal, 
DOE will draw upon proven successful programmatic and technical 
strategies that have established the Department as the premier leader 
in innovative high-performance computing systems over the past half-
century. These strategies consist of three thrusts:
  --research, development, and engineering (RD&E) to ensure timely 
        availability of hardware, software, and mathematical 
        technologies including improved cybersecurity;
  --more reliable science and engineering simulations that will ensure 
        U.S. economic competitive leadership; and
  --acquisition, deployment, and operation of the most capable 
        computing systems on a predictable cadence and budget.
    Some of the exascale relevant research was anticipated by DOE and 
has been underway for a few years. These investments include core 
computer research efforts, uncertainty quantification research and the 
start of three co-design centers to ensure scientific computing 
challenges are informing architecture designs while critical DOE 
applications also stay informed with regard to hardware developments. 
These long lead-time efforts have hinted at some options and tradeoffs, 
but much work remains to be done. Advanced Scientific Computing 
Research (ASCR) supports several significant steps toward exascale in 
fiscal year 2012, including the start of investments in critical 
technologies and the installation of our first hybrid computing system 
at the Oak Ridge Leadership Computing Facility and the Blue Gene Q at 
Argonne National Laboratory. These computers will be critical for our 
researchers working on exascale technologies. In fiscal year 2013, we 
will complete upgrades to both of the Leadership Computing Facilities 
to take each facility to at least 10 petaflops. Both machines will 
provide new capabilities to the research community, including industry, 
to deliver new science and engineering insights. Upgrading the 
Leadership Computing Facilities will enable DOE to continue to lead in 
a number of areas of science and engineering, including materials, 
chemistry, earth science, nuclear physics, and engineering.
                             futuregen 2.0
    Question. With coal providing 50 percent of U.S. electricity 
generation and close to 80 percent of the electricity in China, it 
seems to me that we can't fight climate change without cutting 
greenhouse gas emissions from coal.
    As you are aware, DOE selected Morgan County, Illinois, to site the 
FutureGen 2.0 project. The project's goal is to develop a near-zero 
emission coal-fired power plant--reducing greenhouse gas emissions and 
generating tremendous economic opportunity at the same time.
    How is FutureGen 2.0 progressing and how does it fit into the 
larger strategy of the DOE's Office of Fossil Energy?
    Answer. The FutureGen 2.0 project consists of two cooperative 
agreements:
  --repowering an existing electric generating unit in Meredosia, 
        Illinois, owned by Ameren Energy Resources (Ameren) with a 
        purpose-built oxy-combustion and carbon capture technologies; 
        and
  --constructing a pipeline and injection system that would sequester 
        the carbon dioxide captured from the unit in a deep geologic 
        formation beneath Morgan County, Illinois.
    The second project is managed by the FutureGen Alliance (Alliance); 
the first project is currently managed by Ameren, but it has decided 
not to pursue its project beyond Phase 1 (preliminary design).
    Phase 1 of both cooperative agreements is almost complete. The 
analyses undertaken during this phase resulted in an increased estimate 
of total program cost from $1.3 to $1.65 billion. This increase is 
attributable to identification of an additional $365 million in costs 
for Ameren's project scope. DOE understands that Ameren's decision not 
to proceed beyond Phase 1 was based in part on these cost increases.
    The Alliance informed DOE that it intends to ask the Department to 
transfer the Ameren cooperative agreement to the Alliance and to 
authorize the Alliance to take both cooperative agreements into Phase 
2. DOE's decision on these requests depends on the Alliance's ability 
to demonstrate that it has the technical, managerial, financial, and 
other capabilities needed to pursue all requirements of both 
cooperative agreements. The Alliance's demonstration will be contained 
in ``decision point applications'' that it intends to submit to DOE in 
June 2012.
    FutureGen 2.0 is an important part of the Office of Fossil Energy's 
research and development program aimed at enabling more efficient 
capture processes and ultimately bringing down the cost of carbon 
capture, utilization, and storage (CCUS). The cost of CCUS and coal-
fired electricity is ultimately a function of significant market 
factors, well outside the control of the Department. However, the 
Department does conduct research and development on advanced clean coal 
technologies that will bring costs down over time. As part of this 
effort, the Department conducts large scale research and demonstration 
projects, such as the FutureGen project, that allow first-of-a-kind 
clean coal technologies to be utilized on a commercial scale. These 
activities have been shown to reduce costs over the long run, and allow 
for more efficient, cleaner, and more affordable technologies to be 
used in the marketplace.
                                 ______
                                 
             Questions Submitted by Senator Lamar Alexander
                             hub questions
    Question. The President's budget request includes $19.4 million for 
a new Electricity Systems Hub and there are plans for 3 additional Hubs 
to begin in future years. Based on budget constraints, do you still 
believe it makes sense to grow the hubs to a total of 9 over the next 
couple of years?
    Answer. The current Hubs have helped demonstrate the value of 
integrating the work of multiple researchers across various disciplines 
in tackling significant grand challenge problems. The Hub approach 
ensures that research efforts are coordinated at the most direct 
possible level, by ensuring that the relevant researchers are directly 
collaborating on a single, coherent team.
    Question. Do you believe the hub concept has been successful?
    Answer. The three existing Hubs have made robust progress in 
creating a critical mass of multidisciplinary research in their 
respective areas, enabling new approaches to challenging, high-priority 
technical barriers. In accordance with language in House Report 112-331 
to H.R. 2055 (the Consolidated Appropriations Act of 2012), the 
Department of Energy (DOE) will soon be providing a report to the 
Congress detailing milestones and performance goals for the Hubs.
    Question. Where will the funds come from assuming a flat-lined 
budget?
    Answer. The Department's mission of addressing America's energy 
challenges through transformative science and technology solutions 
requires careful analysis and deliberation to develop a balanced 
portfolio of basic science and research, development, demonstration, 
and deployment. To ensure the right funding profile, DOE uses strategic 
analysis to identify and prioritize the most appropriate portfolio, as 
identified in the fiscal year 2013 budget request.
    Question. Do you have plans for additional Hubs beyond the 9 that 
have been proposed?
    Answer. In general, the Hub model is appropriate for addressing 
focus areas where:
  --the problem represents a significant grand challenge, where major 
        advances would be likely to have a material impact on energy 
        production or consumption and on reducing greenhouse gases; and
  --a coordinated, large-scale, multidisciplinary, systems-level 
        approach is needed to accelerate the pace of innovation.
To determine which problems meet both these criteria and would thus be 
appropriate for the focus of a Hub, DOE draws on extensive technical 
and strategic discussions with industry, academia, other Federal 
agencies, and the technical expertise within the National Laboratories.
    Question. How did you (DOE) decide the Electricity Grid hub was the 
most important hub to start next year, rather than solar, carbon 
sequestration, or extreme materials?
    Answer. The Congress provided funding for a Critical Materials Hub 
in fiscal year 2012, and a funding opportunity announcement was 
released in May 2012. The goal of the Critical Materials Hub will be to 
reduce U.S. dependence on critical materials and ensure that the 
deployment of domestic energy technologies is not hindered by future 
materials supply shortages.
    Solar and carbon capture use and storage (CCS) continue to be high 
priorities at DOE, as indicated by the Sunshot Initiative and the 
continued commitment to the deployment of 5-10 large scale CCS 
demonstration projects by 2016.
                        nuclear waste questions
    Question. Can you describe what the Department is doing to address 
the waste problem, and how it complements the Blue Ribbon Commission's 
recommendations?
    Answer. If we are going to ensure that the United States remains at 
the forefront of nuclear safety and security, nonproliferation, and 
nuclear energy technology, we must develop an effective strategy and 
workable plan for the safe and secure management and disposal of used 
nuclear fuel and nuclear waste. That is why I asked General Brent 
Scowcroft and Representative Lee Hamilton to draw on their decades of 
public service and expertise to lead the distinguished Blue Ribbon 
Commission (Commission) to conduct a comprehensive review of policies 
for managing the back end of the nuclear fuel cycle.
    The Commission's recommendations outline a sensible and practical 
approach to solving the challenges associated with the management and 
disposition of commercial and defense nuclear materials. The consensus 
report they produced is a critical step toward finding a sustainable 
approach to disposing used nuclear fuel and nuclear waste. The 
Commission made it clear that, in its judgment, any workable and 
lasting solution for the final disposition of used fuel and defense 
high-level nuclear materials must secure and sustain the consent of the 
communities, States, and/or tribal nation governing officials and the 
public they represent.
    Following the completion of the Commission's report, I asked the 
Assistant Secretary of Nuclear Energy to lead a departmental review of 
its recommendations and develop a strategy that builds on the 
Commission's excellent work. Those efforts are well underway. A 
strategy and action plan that accounts for the Commission's 
recommendations will be conveyed to the Congress by the end of July of 
this year.
    Finally, the President's fiscal year 2013 budget calls for a $60 
million program to support used nuclear fuel disposition. This program 
will build on the fiscal year 2012 $60 million efforts and both are in 
alignment with the near-term activities recommended by the Commission 
during the interim period leading to a renewed national policy and 
strategy.
    Question. Are all of these activities consistent with your 
authority in the Nuclear Waste Policy Act?
    Answer. Yes, these activities being conducted and proposed for 
nuclear fuel disposition in fiscal year 2012 and 2013 are consistent 
with my authority under the Nuclear Waste Policy Act.
          nuclear energy and small modular reactors questions
    Question. Is $65 million of small modular reactors (SMR) licensing 
support enough to continue on the 5-year schedule with two reactors, or 
will the schedule slip or are you now only allowing for one reactor 
design?
    Answer. Yes, the Department believes that $65 million is an 
adequate budget for fiscal year 2013, and does not expect the schedule 
to slip for two reactor projects based on this amount. Because the 
program was not authorized to start until the end of calendar year 
2011, and is currently executing a complex and lengthy financial 
assistance process, the Office of Nuclear Energy (NE) anticipates 
having to carry over most of the fiscal year 2012 funding into fiscal 
year 2013. At that point, approximately $130 million will be available 
to invest in SMR certification and licensing efforts through fiscal 
year 2013. NE believes that this budget can sustain the program through 
fiscal year 2013, but we will need to increase the budget requests in 
the outyears in order to meet the program goals of accelerating the 
completion of the certification and licensing for the awarded projects. 
If additional funding were to be provided in the fiscal year 2013 
budget, there may be opportunities to accelerate the SMR licensing 
schedules.
    Question. Why isn't SMR licensing support just another subsidy, and 
how you plan to leverage the financial resources from private 
industries?
    Answer. The partnerships with industry will be executed as 
financial assistance cooperative agreements that will require our 
selected awardees to contribute 50 percent of the costs involved in the 
design, engineering, and licensing efforts conducted under the project 
scope. The Government contribution is expected to help our industry 
partners accelerate their timelines toward licensing and deployment of 
these SMR reactors. This cost-shared funding arrangement ensures that 
industry is fully sharing the investment risk, and the Department will 
track the projects closely to ensure that our partners are executing 
the work scope and meeting the milestones outlined in the cooperative 
agreements. If the Department finds evidence that the partners are not 
meeting their project commitments, DOE has the option to discontinue 
funding under the agreement.
    Question. Do you believe the United States will benefit from this 
SMR partnership not only domestically but also internationally?
    Answer. Yes, DOE believes that the development of a domestic SMR 
industry can create an economic ripple-effect as SMR units are 
certified and licensed for deployment. Large-scale, fleet level 
deployment of SMRs can act as an engine for domestic economic growth. 
The development of SMRs may be critical as replacements for dozens of 
old coal plants that are expected to be decommissioned within the 
decade. The manufacturing, on-site fabrication, and operation of these 
SMRs can create thousands of mid- to long-term, high-paying jobs. All 
of the domestic SMR designs can be manufactured using existing U.S. 
infrastructure and capability, something that cannot be said of the 
large light water reactor (LWR) designs. The U.S. currently does not 
have the ability to fabricate the large reactor pressure vessel and 
some steam generator forgings. Growth of a domestic SMR technology and 
manufacturing capability may also create an opportunity to increase 
U.S. presence in the nuclear technology export market as U.S.-designed 
and built SMRs are sold overseas.
    Question. Can you discuss what impact of the 50-percent cut to the 
advanced reactor concepts program would be, and how that could impact 
us in the international arena?
    Answer. The Advanced Reactor Concepts R&D program remains an 
important program for the Department. Impacts to sodium-cooled fast 
reactor research and development will be minimized as much as possible 
given this concept's potential role in addressing fuel cycle issues, 
and in order to sustain collaborations conducted under international 
programs such as the Generation IV International Forum and various 
bilateral international agreements. Fuel development efforts that 
support sodium-cooled fast reactor technology also continue under the 
Fuel Cycle R&D budget. We consider it a priority to maintain these 
advanced reactor research international relationships so that we can 
leverage our efforts by sharing the research of our international 
partners. Reflecting difficult resource allocation choices, R&D 
activities associated with lead/lead-bismuth and fluoride high 
temperature reactors will be significantly reduced. The energy 
conversion R&D, which includes supercritical CO2 
turbomachinery and related heat exchangers, will be consolidated under 
the Small Modular Reactor Advanced Concepts R&D Program in fiscal year 
2013.
                      office of science questions
    Question. Why should we continue to fund International 
Thermonuclear Experimental Reactor (ITER) if we can't afford it?
    Answer. We entered the ITER project to take the next step toward 
development of a practical and virtually inexhaustible energy source. 
We understood that no one nation had the financial, technical, and 
scientific resources to build this project on its own. The only 
practical solution was to negotiate and implement an international 
cooperative approach for fusion, which is the ITER Project. The 
conditions that convinced us to join ITER are still valid today.
    The United States has worked with the other country members and 
with the ITER Organization to maintain schedule and cost of the ITER 
Project. DOE has faced and overcome some challenges with ITER, and we 
are confident that the project has the management team in place to 
carry us efficiently through construction. The key to keeping ITER 
affordable is proper management that helps us achieve cost control and 
keep to the schedule. DOE will continue to maintain a close watch on 
the project, both at the ITER Organization and domestically, to ensure 
that we get the maximum value for the taxpayer's money, while working 
to achieve our goal of practical fusion energy.
    Question. In a time of limited resources and the knowledge that our 
budgets won't realistically grow much over the next few years, why are 
you proposing such a big new project in Facility for Rare Isotope Beams 
(FRIB) for something that is such a low priority?
    Answer. FRIB was identified as the highest priority for new 
construction in the 2007 Nuclear Science Advisory Committee Long Range 
Plan and is also one of two targeted outcomes in the DOE 2011 Strategic 
Plan. The DOE strategic outcome is to ``Complete construction of 
nuclear physics facilities by the end of the decade at Jefferson 
Laboratory and Michigan State University to test quantum 
chromodynamics, the theory of nuclear forces, and produce exotic nuclei 
of relevance in astrophysical processes.''
    A total of $51 million has been appropriated for the design and 
construction of FRIB from fiscal years 2009 through fiscal year 2012. 
FRIB will provide an important new capability for nuclear physics 
research in the United States. FRIB will provide intense beams of rare 
isotopes, i.e., short-lived nuclei not normally found on Earth. This 
will enable scientists to make discoveries about the properties of 
these rare isotopes in order to better understand the physics of 
nuclei, nuclear astrophysics, fundamental interactions, and 
applications for the United States. FRIB will increase the number of 
isotopes with known properties from about 2,000 observed over the last 
century to about 5,000 and will provide world-leading research 
capabilities. The fields of nuclear structure and astrophysics will be 
studied at FRIB to provide the link between our understanding of the 
fundamental constituents of nature and the understanding of the matter 
of which we, the Earth, and stars are made. FRIB is essential for 
maintaining a U.S. core competency in nuclear structure and 
astrophysics, which is at the heart of the national nuclear physics 
program. Expertise in these areas is also central to applied fields 
such as energy, security, and medicine.
               streamlining and reducing costs questions
    Question. Is there a better way to centralize the way the 
individual labs buy goods and services that would better leverage DOE's 
buying power?
    Answer. The Office of Management and Budget (OMB) by memorandum 
dated May 20, 2005, mandated the use of strategic sourcing on a Federal 
Governmentwide basis. This directive required all Federal Government 
agencies to implement the concepts of strategic sourcing; ``a 
collaborative and structured process of critically analyzing an 
organization's spending and using this information to make business 
decisions about acquiring commodities and services more effectively and 
efficiently, to the maximum extent practicable.''
    In 1997, prior to issuance of the aforementioned OMB guidance, DOE 
recognized a majority of its procurement dollars flowed through its 
laboratory contracts and subsequently through subcontracts. To better 
leverage DOE's buying power, the Department established the Integrated 
Contractor Purchasing Team (ICPT), comprised of DOE management and 
operating contractors collaborating to produce acquisition ordering 
instruments for common products and services used across DOE. This 
complex-wide, contractor-led strategic sourcing program has achieved 
tens of millions of dollars in savings over the years. DOE has 
continued to emphasize use of the established ICPT commodity 
agreements, which contain pre-established favorable pricing, and are 
available for all DOE sites to purchase commercially available 
supplies. The National Nuclear Security Administration (NNSA) also 
determined it needed an enterprise-wide organization to address the 
needs of its unique supply chain. Consequently, in 2006 it established 
a contractor-led, strategic sourcing organization called the Supply 
Chain Management Center (SCMC). The SCMC's mission is to implement the 
NNSA strategic sourcing strategy of operating as an integrated nuclear 
complex. The SCMC has improved efficiencies and economies across the 
complex and is saving considerable amounts of money through the use of 
commercial best practices, shared software solutions, and leveraging 
NNSA's purchasing power.
    In 2010, Deputy Secretary Poneman issued a memorandum to all Heads 
of Departmental Elements, directing them to adopt a corporate approach 
to purchasing that necessitates close collaboration between the DOE 
programs and the contractor community. It noted the successful 
implementation of NNSA's Supply Chain Management strategies and 
discussed the potential benefits of expanding the initiative across the 
Department. Coordinating commodity management across the complex would 
help to achieve better pricing from suppliers, ensuring uniform prices 
for comparable goods and services, and streamlining and reducing the 
total cost of acquisition. The structured process of analyzing spending 
patterns across the entire department and utilizing this information to 
acquire commodities and services more efficiently could ultimately 
result in even greater cost savings.
    In 2012, the Office of Environmental Management (EM) determined it 
would be advantageous to utilize the SCMC to integrate its supply chain 
to achieve similar results. Although early in the implementation 
process, success is already being realized at EM sites. EM also avoided 
duplication of costs by utilizing the existing SCMC capabilities and 
infrastructure rather than developing and deploying a separate 
comparable program.
    Question. You have had success using the Supply Chain Management 
Center for NNSA, why can't this model be applied to all the national 
labs?
    Answer. Office of Management and Budget (OMB) memorandum dated July 
29, 2009, mandated that Federal agencies improve Government acquisition 
by developing more strategic acquisition approaches to leverage buying 
power and achieve best value for the taxpayer. Specifically, it 
directed agencies to; ``increase their participation in government-wide 
strategic acquisition initiatives, including strategic sourcing 
initiatives that reduce costs for all agencies by leveraging the 
Government's buying power and, where appropriate, expand their use of 
enterprise-wide strategic acquisition initiatives that offer 
significant savings opportunities from both business process 
improvements and access to lower product and service costs.''
    DOE might improve upon its success by applying the SCMC model to 
the remaining national labs, but it is not known to what extent it is 
feasible to do so. As discussed in the response to question 28-2, EM 
has determined it would be advantageous to utilize the SCMC to 
integrate its supply chain in an attempt to achieve similar results. 
Although early in the implementation process, success is already being 
realized at EM sites. The Office of Science (SC) has made a 
determination that its labs already have a sufficient Strategic 
Sourcing Program in place and it would not be cost effective to 
implement the SCMC model at its sites. In a study completed by the 
Office of Science, it determined that; ``given the evolved state of 
supply chain activities at many SC labs, combined with available 
commercial resources, a parallel structure tuned to the differing SC 
mission is a better alternative than wholesale participation in SCMC.'' 
The report concludes that through the strategic efforts of its labs, 
``SC successfully generates equal or better savings on commodities, as 
compared to the SCMC eStore.'' It also concludes that the ``SC labs 
obtain competitive and negotiated cost savings on par with the results 
of the SCMC eSourcing tools,'' although they concede ``they may benefit 
from selected use of a reverse auction tool.'' Essentially, SC has 
determined that by utilizing the existing Integrated Contractor 
Purchasing Team (ICPT) commodity agreements and the labs' own internal 
site specific sourcing capabilities, it is as effective as the SCMC at 
leveraging the SC buying power and ultimately generating sufficient 
cost savings.
    Coordinating commodity management across the complex would help to 
achieve better pricing from suppliers, ensuring uniform prices for 
comparable goods and services, and streamlining and reducing the total 
cost of acquisition. The current process includes cross-representation 
between the ICPT and the SCMC to ensure an enterprise look at spend 
data. The structured process of analyzing spending patterns across the 
entire department and utilizing this information to acquire commodities 
and services more efficiently could ultimately result in even greater 
cost savings.
                                 ______
                                 
               Question Submitted by Senator Thad Cochran
    Question. The Department is targeting a significant amount for 
investment into high-risk, high-reward renewable energy alternatives, 
perhaps at the expense of research at the national labs and in 
partnership with institutions of higher education. In the biofuels 
arena, many of these technologies require significant developments and 
investment in feedstock supply infrastructure. Mississippi, for 
example, has a surplus of southern yellow pine that remains readily 
available and proven commercial viability.
    Might it be more prudent to invest in alternatives that have the 
necessary components for economic viability in the near-term while 
using the research sector and National Lab system to further refine and 
advance technologies until they are much closer to commercialization?
    Answer. The Department of Energy invests in research, development, 
and deployment across a wide variety of technologies at many stages of 
development. The Office of Science is the lead Federal entity 
supporting fundamental scientific research for energy and the Nation's 
largest supporter of basic research in the physical sciences. Advanced 
Research Projects Agency-Energy (ARPA-E) focuses exclusively on high-
risk, high-payoff concepts, filling a former gap in the Department's 
portfolio. For applied energy technologies, the Office of Fossil 
Energy, Office of Nuclear Energy, Office of Energy Efficiency and 
Renewable Energy, and the Office of Electricity Delivery and Energy 
Reliability carry out targeted, use-inspired research and development, 
as well as a variety of deployment projects for energy sources that 
have strong potential for economic viability in the near-term. In each 
case, the blend of activities is selected through careful program 
management and regularly re-evaluated for effectiveness. These programs 
also work with a variety of university, National Lab, and private 
company partners based on the maturity and characteristics of the 
technology or system.
    Biomass resources are available in every county in the United 
States, making them one of the most universal opportunities. However, 
as with the yellow pine in Mississippi, many specific geographic and 
technical issues need to be explored for different location. The Office 
of Biomass Program works on feedstock logistics issues in partnership 
with local universities and companies. Some example projects are 
described in this fact sheet: http://www1.eere.energy.gov/biomass/pdfs/
feedstocks_four_pager.pdf.
                                 ______
                                 
              Question Submitted by Senator Susan Collins
    Question. Secretary Chu, my support for New Strategic Arms 
Reduction Treaty (New START) was influenced in part by the 
administration's commitment to modernize the U.S. nuclear weapons 
complex. During Senate consideration of the treaty in November 2010, 
the President announced his commitment to increase funding for nuclear 
modernization activities by $4.1 billion during the next 5 years.
    However, the budget request for fiscal year 2013 for Weapons 
Activities is $372 million less than was projected in the President's 
Section 1251 Plan as delivered in November 2010. If we fund Nuclear 
Weapons Activities at the amounts proposed in the President's budget 
request for the next 5 years, the total investment to the nuclear 
complex will be $4.3 billion less than the President committed to 
Senators during the debate on New START. This is where we were before 
New START.
    As you can imagine, this change of course in the investment in the 
safety, security, and reliability of our nuclear stockpile raises 
doubts and concerns about the administration's commitments.
    Secretary Chu, how would you respond to the concern many of us have 
on this issue?
    Answer. The administration, including the Department of Energy 
(DOE)/National Nuclear Security Administration (NNSA) leadership, 
remains committed to programs and capabilities outlined in the 1251 
report and fiscal year 2012 Stockpile Stewardship and Management Plan.
    If approved by the Congress, the President's budget for fiscal year 
2013 will be the third consecutive increase in Weapons Activities, 
resulting in an 18.6 percent increase for Weapons Activities since the 
fiscal year 2010 budget. While this is less than projected in last 
year's budget submission and the 1251 report, the request reflects a 
new fiscal climate in Washington, embraced by both the Congress and the 
administration.
    Last year, the Congress passed the Budget Control Act (BCA), which 
limits discretionary spending for the next decade, and caps national 
security spending in fiscal year 2012 and 2013. In fiscal year 2012, 
the Congress also reduced NNSA's request for Weapons Activities by $416 
million below the President's request, or 5.4 percent.
    NNSA must adjust to this new reality. But the agency and the 
administration remain committed to necessary investments in nuclear 
capabilities and the nuclear complex.
                                 ______
                                 
             Questions Submitted by Senator Lisa Murkowski
    Question. As you are aware, the authorization in Public Law 106-392 
to use power revenues to fund the Upper Colorado Recovery 
Implementation Plan expired at the end of fiscal year 2011. Currently, 
the Congress is working on legislation to address the reauthorization 
of this Program. However, the administration's fiscal year 2013 budget 
addresses this funding, saying ``In the absence of legislation to 
extend this specific authority, Reclamation may rely on existing 
authority to continue the use of Center for Revolutionary Solar 
Photoconversion (CRSP) hydropower revenues or use appropriated funds to 
ensure full base funding.''
    Is it the intent of the administration to continue to use power 
revenues without an authorization?
    Answer. This question should be redirected to the Department of the 
Interior for a response. The referenced administration language comes 
from the U.S. Bureau of Reclamation's fiscal year 2013 budget 
submission and they would be the most appropriate agency to address 
questions related to that request.
    Question. If so, please describe what ``existing authority'' is 
being referred to in your budget request.
    Answer. This question should be redirected to the Department of the 
Interior for a response. The referenced administration language comes 
from the U.S. Bureau of Reclamation's fiscal year 2013 budget 
submission and they would be the most appropriate agency to address 
questions related to that request.

                          SUBCOMMITTEE RECESS

    Senator Feinstein. Thank you very much, Mr. Secretary.
    The hearing is adjourned.
    [Whereupon, at 4:26 p.m., Wednesday, March 14, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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