[Senate Hearing 112-]
[From the U.S. Government Publishing Office]
ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2013
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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.]