    [Senate Hearing 112-440]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 112-440

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2012

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

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                          ONE HUNDRED TWELFTH CONGRESS

                                 FIRST SESSION

                                       ON

                                   H.R. 2354

     AN ACT MAKING APPROPRIATIONS FOR ENERGY AND WATER DEVELOPMENT FOR THE
         FISCAL YEAR ENDING SEPTEMBER 30, 2012, AND FOR OTHER PURPOSES

                                   __________

                          Department of Defense--Civil
                              Department of Energy
                           Department of the Interior
                           Nondepartmental Witnesses

                                   __________

             Printed for the use of the Committee on Appropriations

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                                   __________

                          COMMITTEE ON APPROPRIATIONS

                       DANIEL K. INOUYE, Hawaii, Chairman
    PATRICK J. LEAHY, Vermont            THAD COCHRAN, Mississippi, Ranking
    TOM HARKIN, Iowa                     MITCH McCONNELL, Kentucky
    BARBARA A. MIKULSKI, Maryland        RICHARD C. SHELBY, Alabama
    HERB KOHL, Wisconsin                 KAY BAILEY HUTCHISON, Texas
    PATTY MURRAY, Washington             LAMAR ALEXANDER, Tennessee
    DIANNE FEINSTEIN, California         SUSAN COLLINS, Maine
    RICHARD J. DURBIN, Illinois          LISA MURKOWSKI, Alaska
    TIM JOHNSON, South Dakota            LINDSEY GRAHAM, South Carolina
    MARY L. LANDRIEU, Louisiana          MARK KIRK, Illinois
    JACK REED, Rhode Island              DANIEL COATS, Indiana
    FRANK R. LAUTENBERG, New Jersey      ROY BLUNT, Missouri
    BEN NELSON, Nebraska                 JERRY MORAN, Kansas
    MARK PRYOR, Arkansas                 JOHN HOEVEN, North Dakota
    JON TESTER, Montana                  RON JOHNSON, Wisconsin
    SHERROD BROWN, Ohio

                        Charles J. Houy, Staff Director
                      Bruce Evans, Minority Staff Director
                                     ------

                  Subcommittee on Energy and Water Development

                     DIANNE FEINSTEIN, California, Chairman
    PATTY MURRAY, Washington             LAMAR ALEXANDER, Tennessee
    TIM JOHNSON, South Dakota            THAD COCHRAN, Mississippi
    MARY L. LANDRIEU, Louisiana          MITCH McCONNELL, Kentucky
    JACK REED, Rhode Island              KAY BAILEY HUTCHISON, Texas
    FRANK R. LAUTENBERG, New Jersey      RICHARD C. SHELBY, Alabama
    TOM HARKIN, Iowa                     SUSAN COLLINS, Maine
    JON TESTER, Montana                  LISA MURKOWSKI, Alaska
    RICHARD J. DURBIN, Illinois          LINDSEY GRAHAM, South Carolina
    DANIEL K. INOUYE, Hawaii (ex         DANIEL COATS, Indiana
        officio)

                               Professional Staff

                                   Doug Clapp
                                 Roger Cockrell
                             Franz Wuerfmannsdobler
                        Carolyn E. Apostolou (Minority)
                             Tyler Owens (Minority)
                           LaShawnda Smith (Minority)

                             Administrative Support

                              Molly Barackman-Eder

                                C O N T E N T S

                                  ----------

                           Wednesday, April 13, 2011

                                                                       Page

    Department of Defense--Civil: Department of the Army: Corps of
      Engineers--Civil...............................................     1
    Department of the Interior: Bureau of Reclamation................    18

                             Wednesday, May 4, 2011

    Deparment of Energy: National Nuclear Security Administration....    91

                            Wednesday, May 18, 2011

    Department of Energy.............................................   125
    Material Submitted Subsequent to the Hearing.....................   199

                           Nondepartmental Witnesses

    Department of Defense--Civil: Department of the Army: Corps of
      Engineers--Civil...............................................   201
    Department of Energy.............................................   224
    Department of the Interior: Bureau of Reclamation................   308

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2012

                                  ----------

                           WEDNESDAY, APRIL 13, 2011

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:10 p.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Dianne Feinstein (chairman)
    presiding.
        Present: Senators Feinstein, Johnson (SD), Landrieu, Reed,
    Lautenberg, Harkin, Tester, Alexander, Cochran, Collins,
    Murkowski, and Graham.

                          DEPARTMENT OF DEFENSE--CIVIL

                             Department of the Army

                           Corps of Engineers--Civil

    STATEMENT OF HON. JO-ELLEN DARCY, ASSISTANT SECRETARY
                OF THE ARMY (CIVIL WORKS)

                 opening statement of senator dianne feinstein

        Senator Feinstein. The hearing will come to order.
        I would like to apologize for being late. I thought I would
    tune in to the President's address, that there would be some
    specifics and after a while I thought uh-oh, I better go to the
    hearing. So here I am, and I want to thank everybody here for
    being patient.
        I want to welcome our witnesses. I happen to be a big fan
    of the Army Corps of Engineers (COE), and particularly all the
    dredging, the levee protection, the river protection,
    everything that you do in California to enable us to exist is
    critical.
        Mike Connor, who is the Commissioner of the Bureau of
    Reclamation (BOR) has done excellent work. I am a big fan in
    what is a tough area in California. No adage has ever been
    truer than ``whiskey is for drinking and water is for
    fighting'', and California puts that into action every year. So
    I thank you for being a problem-solver rather than a problem-
    maker.
        We all recognize, I think, the difficult fiscal environment
    we are in. However, we also realize that our economy is
    fragile, still recovering, and could turn the wrong way, so we
    want to do our very best to see that those agencies that
    stimulate economic and job growth and protect the safety of our
    communities are themselves protected.
        COE and BOR are the agencies we depend on to build the
    water infrastructure that moves our Nation's cargo, protects
    our cities from flooding, provides irrigation water and
    hydropower, and facilitates much needed environmental
    restoration. Not only does the work of these agencies provide
    jobs now, the infrastructure that is constructed continues to
    benefit the economy for decades. It is amazing.
        Unfortunately, the budget request reflects the consistent
    underfunding that we have seen in prior years, and I must say I
    am very disappointed in our part of the continuing resolution
    which takes another whack at COE.
        The President's fiscal year 2012 budget for COE is $4.6
    billion. That is 15 percent below the 2010 enacted amount. Two
    major project accounts for the Department of the Interior under
    the jurisdiction of this subcommittee are proposed at $1.05
    billion, which is 7 percent below the fiscal year 2010 enacted
    amount. That is a lot. So this is a tough budget for both
    agencies.
        For COE, the top six construction projects account for $737
    million of the $1.48 billion requested for construction work.
    That is 51.8 percent of the total. The other 79 construction
    projects--79--compete for the remaining 48 percent of funds.
        In the general investigation account, 75 percent of the
    funding is directed to national programs and two individual
    studies. The other 63 studies proposed will have to compete for
    25 percent of the funds.
        In BOR's budget, I am pleased to see the administration
    propose a new account for the San Joaquin River restoration.
    The $9 million in discretionary funding, along with the
    mandatory funding under the joint settlement agreement between
    the Federal Government, the State, and the water contractors
    will assure that water impacts are reduced or avoided while
    maintaining the San Joaquin River ecosystem.
        Rural water projects are funded in both the water and
    related resources account and the proposed new Indian water
    rights account for fiscal year 2012. There are seven ongoing
    rural water projects proposed at $35.5 million from the water
    and related resources account for 2012. All of these benefit
    various tribes. The new Indian water rights account proposes
    $51.5 million for four similar new projects. One has to wonder
    whether these funds can be effectively used for these new rural
    water systems in fiscal year 2012. That will be something for
    us to look into.
        So I want to welcome Jo-Ellen Darcy, the Assistant
    Secretary of the Army (Civil Works), Lieutenant General Robert
    L. Van Antwerp, the Chief of Engineers for the United States
    Corps of Engineers. And from the Department of the Interior, we
    will hear from Anne Castle, the Assistant Secretary for Water
    and Science, and the wonderful Mike Connor, Commissioner of the
    Bureau of Reclamation.
        Now before formally introducing you, I would like to
    indicate my great pleasure in introducing my ranking member for
    this. We worked together on the Interior Committee and it was
    very easy to do. We were able to work out any issue, and you
    are really a gentleman, Lamar, and in this arena that is doubly
    appreciated. You get double points. So I thank you for being
    you, and I am delighted to recognize you for your remarks.

                      STATEMENT OF SENATOR LAMAR ALEXANDER

        Senator Alexander. Thank you, Madam Chairman. It is a treat
    to work with you. Thank you for the compliment. What I
    especially like about Senator Feinstein is she was a mayor. She
    can make decisions and she speaks with precision. So it is easy
    to work with her. And we have many of the same values and
    judgments about the future of our country.
        Senator Feinstein said that whiskey is for drinking and
    water is for fighting in the West, and all across our country,
    I think all of us are here today because we know that inland
    waterways and locks are for creating private sector jobs. And
    that is really the number one goal we have got in this country
    no matter where we are from.
        I want to thank the chair for holding this hearing and
    thank all the distinguished leaders of the Departments for
    coming. COE has been around since the Revolutionary War. It
    touches the lives of every American, keeps our inland waterways
    open and running, manages our drinking water, provides
    emission-free electricity, looks after recreational waters, and
    as Tennesseans found out last year during our flood, helps us
    manage river levels during serious flooding. It does many
    things well, but we want to be in a position to help COE do
    things even better and jobs are a good place to start.
        The Nation's inland waterways do not get on the front pages
    as much, but they keep trucks off our highways. They result in
    lower fuel costs at a time when fuel is going up. They reduce
    the cost of repairing roads. Barges can carry a ton of freight
    576 miles on a gallon of fuel compared to the 150 miles per
    gallon a truck can carry a ton of freight. And one barge of dry
    cargo can displace as many as 70 trucks, putting that freight
    on our waterway and taking it off our crowded interstate.
        We think of the Chickamauga Lock in the Chattanooga area of
    Tennessee. If it were to close, which it has a real risk of
    doing if it is not replaced, it would put 100,000 big trucks on
    I-75. If COE is committed to mothball projects, it would expand
    the amount of freight on our waterways. In fact, the only
    inland waterways project COE has prioritized is years past its
    planned completion date, hundreds of millions of dollars over
    budget, with still no end in sight. We have to find a solution
    that expands our current locks and gets new ones built.
        One of the things that I want to talk about today when my
    question time comes is that industry, commercial users, came to
    COE in good faith in 2008, attempted to find a solution to put
    more money in the Inland Waterways Trust Fund, only to have COE
    appear to walk away from the documented help draft and condemn
    the report's findings. I would like to have some answers about
    why that happened. What could have been a great example about
    how industry and Government could work together turned out to
    be a cautionary tale about a fickle Government dealing with an
    industry.
        So the questions, Madam Chair, that I will be asking are
    how do we fix the trust fund and make sure that projects like
    Chickamauga Lock get built. Are we doing all we can to utilize
    our ports and harbors? We need to examine how we are managing
    the Harbor Maintenance Trust Fund. The President said his goal
    in the State of the Union Address was to double exports. It is
    going to be hard to do unless we provide adequate funding for
    dredging our ports and harbors. And then what are the specific
    factors driving decisionmaking on COE projects? We need to ask
    for detailed examinations and explanations of how decisions are
    made and the process by which certain projects are deemed
    priorities.
        This is an important hearing. I am glad to be a part of it.
    And I look forward to hearing from the witnesses.
        Thank you, Madam Chair.
        Senator Feinstein. And I thank you, Senator.
        From the Department of the Interior, we will hear from Anne
    Castle, the Assistant Secretary for Water and Science.
         General Antwerp, it is my understanding that this is going
    to be your last appearance before the subcommittee as you will
    be retiring next month. So you can give us the true,
    unvarnished truth, as you see it.
        We will expect nothing less. I want to thank you for your
    many years of service to our Nation. I look forward to working
    with your successor, General Bostick, once he is confirmed.
        I want to remind the witnesses that your full statements
    will be in the record, and I hope you will just provide a brief
    summary of what you are saying. And then we will go the early
    bird rule, and I will alternate sides in recognizing Senators.
        Senator Cochran. Madam Chairman, could I ask unanimous
    consent that a statement appear at this point in the record?
        Senator Feinstein. You certainly may, and all statements
    will be put in the record.
        [The statement follows:]

                   Prepared Statement of Senator Thad Cochran

        Madam Chairman, thank you for convening this hearing to review the
    administration's fiscal year 2012 budget request for the Army Corps of
    Engineers (COE) and Bureau of Reclamation. I am pleased to join you in
    welcoming the panel for attending today's hearing.
        My State is fortunate to border such prominent bodies of water as
    the Mississippi River and the Gulf of Mexico, which are both vital to
    our domestic economy for shipping and travel. Our relationship with the
    Corps of Engineers has enabled Mississippi and its neighboring States
    to benefit from access to these waters while also benefiting from COE-
    built levees, dams, and locks which safeguard against floods. COE has
    also been very helpful over the years in helping Mississippi address
    many of its aging wastewater infrastructure issues throughout our
    State. Flood control, port dredging, and environmental infrastructure
    projects are very important to our State, and we appreciate your
    responding to these needs.
        The fiscal year 2012 proposal for the Mississippi River and its
    tributaries has caused concern among commodity exporters who worry
    about COE's ability to maintain the Mississippi River channel at
    authorized depths. The Mississippi River System enables more than $100
    billion in exports to traverse its waters annually. Thousands of jobs
    rely on a fully functioning river system, and I hope COE will continue
    to respond to these national and local interests.
        I look forward to your testimony, and to working with you during
    the coming year.

        Senator Feinstein. Secretary Darcy, would you begin please?

                      SUMMARY STATEMENT OF JO-ELLEN DARCY

        Ms. Darcy. Madam Chairman and distinguished members of the
    subcommittee, thank you for the opportunity to present the
    President's fiscal year 2012 budget for the civil works program
    of COE.
        The budget requires new appropriations of $4.631 billion.
    In keeping with the administration's program to put the Nation
    on a sustainable fiscal path, this is $836 million, or about 15
    percent, below the 2010 enacted amount of $5.445 billion. It is
    about a 6 percent reduction from the 2011 budget for the civil
    works program.
        The budget concentrates funding primarily in the three
    civil works program areas: commercial navigation, flood and
    coastal storm damage reduction, and aquatic ecosystem
    restoration.
        The 2012 budget continues the Army's commitment to a
    performance-based approach to budgeting in order to provide the
    best overall return from available funds in achieving economic,
    environmental, and public safety objectives.
        The budget provides $50 million for a comprehensive levee
    safety initiative to help ensure that Federal levees are safe
    and to assist non-Federal entities as they address safety
    issues with their own levees.
        The operation and maintenance program also includes a new
    environmental and energy sustainability program to reduce
    energy consumption at COE projects and buildings.
        The 2012 budget places priority on collaboration with other
    Federal agencies in the development of funding allocations for
    aquatic ecosystem restoration. For 2012, this collaboration is
    reflected in five major ecosystems:
      --the California Bay-Delta;
      --Chesapeake Bay;
      --the Everglades;
      --the Great Lakes; and
      --the gulf coast.
        The budget provides for use of $758 million from the Harbor
    Maintenance Trust Fund to maintain coastal commercial
    navigation channels and harbors.
        The administration plans to develop legislation to expand
    the authorized uses of the Harbor Maintenance Trust Fund so
    that its receipts are available to finance the Federal share of
    other efforts in support of commercial navigation through our
    Nation's ports. No decisions have been made yet on what
    additional costs would be proposed to be paid from this Harbor
    Maintenance Trust Fund.
        Inland waterways capital investments are funded in the
    budget at $166 million, of which $77 million is financed from
    the Inland Waterways Trust Fund. This is the total amount that
    is affordable in 2012 with the current level of revenue coming
    into the trust fund. The administration will work with the
    Congress and stakeholders to authorize a new mechanism to
    increase the revenue paid by commercial navigation users of the
    inland waterways.
        The administration also plans to work with the Congress and
    stakeholders to explore ways to support broader
    recapitalization of COE's aging infrastructure, modification of
    its operations, or deauthorization as appropriate, consistent
    with our modern day water resources principles and priorities.
        Last year, President Obama established the America's Great
    Outdoors initiative to promote innovative community-level
    efforts to conserve outdoor spaces and to reconnect Americans
    to the outdoors. The Civil Works recreation program is closely
    aligned with the goals of the America's Great Outdoors
    initiative and includes a variety of activities to reconnect
    Americans, especially our young people, with the Nation's
    outdoor resources.
        We continue to strengthen COE's planning expertise,
    including through greater support for our planning centers of
    expertise and continued support for the development of revised
    water project planning principles and guidelines.
        A number of lower-priority programs and activities receive
    reduced or no funding in our 2012 budget. For example, funding
    for maintenance of navigation harbors and waterway segments
    that support little or no commercial use is reduced by about
    one-half. Also, no funding is provided for small projects in
    several of the continuing authorities programs. The budget
    proposes to reprogram $25 million of prior year funds from
    these lower-priority programs to finance ongoing phases of
    projects in higher-priority continuing authorities programs.
        In summary, the President's budget for 2012 for the Army
    Civil Works program is a performance-based budget. It supports
    water resources investments that will yield long-term returns
    for the Nation.
        Madam Chairman and members of the subcommittee, I look
    forward to working with you in support of the President's
    budget.

                               PREPARED STATEMENT

        And if you would indulge me for about 30 seconds, I would
    like to personally thank General Van Antwerp for his years of
    service. I came into this job a year and a half ago and I could
    not have asked for a better partner and a better leader for
    COE, and he will be sorely missed. So thank you.
        [The statement follows:]

                      Prepared Statement of Jo-Ellen Darcy

        Madam Chairman and distinguished members of the subcommittee, thank
    you for the opportunity to present the President's budget for the Civil
    Works program of the Army Corps of Engineers (COE) for fiscal year
    2012.

                           coe deg.OVERVIEW

        The fiscal year 2012 budget for the Civil Works program reflects
    the administration's priorities through targeted investments in the
    Nation's infrastructure that help restore the environment and
    revitalize the economy, while also reflecting the need to put the
    country on a fiscally sustainable path. With those tenets in mind, the
    primary objectives of the budget are as follows:
      --Focus funding on water resources infrastructure projects that
            produce high economic and environmental returns to the Nation
            and those that address public safety needs.
      --Restore high-priority ecosystems such as the California Bay-Delta,
            Chesapeake Bay, the Everglades, the Great Lakes, and the gulf
            coast.
      --Support a comprehensive levee safety initiative to help ensure that
            Federal levees are safe and to enhance efforts to assist non-
            Federal parties to address safety issues with their levee
            systems.
      --Provide priority funding to the maintenance of high-performing
            projects.
      --Propose changes in the way Federal activities in support of
            commercial navigation through the Nation's ports are funded,
            and support increases in inland waterways receipts.
      --Improve the way in which COE addresses the Nation's most pressing
            water resources challenges.
      --Increase the organizational efficiency and improve the management,
            oversight, and performance of ongoing programs.
        The budget concentrates funding for development and restoration of
    the Nation's water and related resources within the three main Civil
    Works program areas:
      --commercial navigation;
      --flood and coastal storm damage reduction; and
      --aquatic ecosystem restoration.
        Additionally, the budget supports hydropower, recreation,
    environmental stewardship, and water supply services at existing water
    resources projects owned or operated by COE. Finally, the budget
    provides for protection of the Nation's regulated waters and wetlands;
    cleanup of sites contaminated as a result of the Nation's early efforts
    to develop atomic weapons; and emergency preparedness. The budget does
    not fund work that should be the responsibility of non-Federal
    interests or other Federal agencies, such as water and wastewater
    treatment projects.

         coe deg.FISCAL YEAR 2012 DISCRETIONARY FUNDING LEVEL

        The budget provides gross new discretionary funding of $4.631
    billion, which will keep the Civil Works program moving forward to help
    revitalize the economy, and provide for restoration and stewardship of
    the environment. The budget also proposes cancellation of the $57
    million in unobligated funding previously provided in the Mississippi
    River and Tributaries account for construction of the Yazoo Backwater
    Pumps, Mississippi project. This cancellation would achieve $57 million
    in real savings for the American taxpayer. Of the amount proposed to be
    cancelled, $22 million is an offset to fiscal year 2012 gross
    appropriations, for a net request of $4.609 million. (The Congress
    appropriated the remaining $35 million to ``restore'' funds that COE
    had ``borrowed'' under the Stafford Act while responding to a natural
    disaster at another project. Because the Congress restored these funds
    in an emergency supplemental appropriation, their cancellation does not
    ``score'' as an offset to our discretionary funding request.)
        In keeping with the administration's program to put the Nation on a
    sustainable fiscal path, the funding for Civil Works in the 2012 budget
    is $836 million, or about 15 percent, below the enacted amount of
    $5.445 billion in fiscal year 2010. It is about 6 percent below the
    fiscal year 2011 budget level. The fiscal year 2012 funding level
    reflects a considered, practical, effective, and sound use of available
    resources, focusing on those investments that are in the best interest
    of the Nation.
        Within the $4.631 billion recommended gross appropriations, $1.48
    billion is for projects in the Construction account, and $2.314 billion
    is for activities funded in the Operation and Maintenance (O&M)
    account. The budget also includes $104 million for Investigations; $210
    million for Mississippi River and Tributaries; $27 million for Flood
    Control and Coastal Emergencies; $196 million for the Regulatory
    Program; $109 million for the Formerly Utilized Sites Remedial Action
    Program; $185 million for the Expenses account; and $6 million for the
    Office of the Assistant Secretary of the Army (Civil Works). Attachment
    1 shows this funding by account and by program area.

                                            ATTACHMENT 1.--FISCAL YEAR 2012 BUDGET--BUSINESS LINE/ACCOUNT CROSS-WALK
                                                                    [In millions of dollars]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Funding Categories
                                        --------------------------------------------------------------------------------------------------------------------
                                                                                   MR&T
               Business Lines                                      ------------------------------------                                       OASA
                                            I        C       O&M                                TOTAL    FUSRAP    FCCE     REG       E       (CW)    TOTAL
                                                                       I        C       O&M      MRT
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Flood and Coastal Storm Damage            48      721      523        1       63       91      155  .......  .......  .......  .......  .......    1,447
     Reduction.........................
        Coastal........................        7       23        8  .......  .......        3        3  .......  .......  .......  .......  .......       41
        Inland.........................       41      698      515        1       63       88      152  .......  .......  .......  .......  .......    1,406
    Hydropower.........................  .......        6      176  .......  .......  .......  .......  .......  .......  .......  .......  .......      182
    Navigation.........................       18      283    1,237  .......       13       24       37  .......  .......  .......  .......  .......    1,575
        Coastal........................        7      117      706  .......  .......        2        2  .......  .......  .......  .......  .......      832
        Inland.........................       11      166      531  .......       13       22       35  .......  .......  .......  .......  .......      743
    Environment:
        Aquatic Ecosystem Restoration..       38      470       23  .......        2  .......        2  .......  .......  .......  .......  .......      533
        Stewardship....................  .......  .......       96  .......  .......        4        4  .......  .......  .......  .......  .......      100
        FUSRAP.........................  .......  .......  .......  .......  .......  .......  .......      109  .......  .......  .......  .......      109
    Regulatory.........................  .......  .......  .......  .......  .......  .......  .......  .......  .......      196  .......  .......      196
    Recreation.........................  .......  .......      247  .......  .......       12       12  .......  .......  .......  .......  .......      259
    Emergency Management (incl. NEPP)..  .......  .......        7  .......  .......  .......  .......  .......       27  .......  .......  .......       34
    Water Supply.......................  .......  .......        5  .......  .......  .......  .......  .......  .......  .......  .......  .......        5
    Expenses...........................  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......      185  .......      185
    OASA(CW)...........................  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......        6        6
                                        --------------------------------------------------------------------------------------------------------------------
          TOTAL........................      104    1,480    2,314        1       78      131      210      109       27      196      185        6    4,631
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    I=Investigations; C=Construction; O&M=Operation and Maintenance; MR&T=Flood Control, Mississippi River and Tributaries; FUSRAP=Formerly Utilized Sites
      Remedial Action Program; FCCE=Flood Control and Coastal Emergencies; REG=Regulatory Program; NEPP=National Emergency Preparedness Program; E=Expenses;
      OASA (CW)=Office of the Assistant Secretary of the Army (Civil Works).

        The fiscal year 2012 budget continues the Army's commitment to a
    performance-based approach to budgeting to provide the best overall
    return from available funds from a national perspective in achieving
    economic, environmental, and public safety objectives. Competing
    investment opportunities for studies, design, construction, and
    operation and maintenance were evaluated using multiple metrics, and
    objective performance criteria guided the allocation of funds.
        The fiscal year 2012 budget supports investments in flood and storm
    damage reduction, commercial navigation, environmental restoration, and
    other programs. The distribution of funding among these programs is
    similar to the distribution in the fiscal year 2011 budget, except that
    environmental restoration received a slightly lower proportion of
    overall funding. Of the total in the fiscal year 2012 budget, 31
    percent is allocated to flood and storm damage reduction; 34 percent is
    allocated to commercial navigation; 18 percent is allocated to
    environmental restoration and protection; and 17 percent is allocated
    among other program areas.

              coe deg.NEW INVESTMENTS IN FISCAL YEAR 2012

        The Civil Works budget includes funding for two construction new
    starts and several other new initiatives, as described below.
        In the Construction account, the budget includes $8 million for a
    new start for the Hamilton City project in California, which provides
    environmental restoration and flood damage reduction benefits. The
    budget also includes $3 million to initiate a storm damage reduction
    project along the New Jersey coast between Raritan Bay and Sandy Hook
    Bay in the Port Monmouth area.
        There are four new study starts in the Investigations account: Fish
    Passage at Englebright and Daguerre Point Dams on the Yuba River in
    California for $100,000; environmental restoration and flood damage
    reduction at Cano Martin Pena in Puerto Rico for $100,000; the
    Chesapeake Bay Comprehensive Plan for $250,000; and the Louisiana
    Coastal Area Comprehensive Plan for $100,000.
        The O&M program includes $12.3 million for a new environmental and
    energy sustainability program. This will involve developing tools to
    enable COE to meet Federal sustainability goals and implementing
    energy-saving measures at COE projects and buildings. The 38 Civil
    Works COE districts will compete for these funds by proposing specific
    measures to conserve energy. Lessons learned from this competition will
    inform future investments to increase environmental and energy
    sustainability of the Civil Works program.
        The budget provides $50 million for a comprehensive levee safety
    initiative. This initiative includes $46 million in the O&M account to
    continue and expand activities to help ensure that Federal levees are
    safe and to assist non-Federal entities to address safety issues with
    their levees. The levee safety initiative also includes $4 million in
    the Flood Control and Coastal Emergencies account. These funds will be
    used for COE participation in the expansion of interagency teams, known
    as Silver Jackets, to include every State, and to provide unified
    Federal assistance in implementing flood risk management solutions.

                 coe deg.AQUATIC ECOSYSTEM RESTORATION

        The fiscal year 2012 budget places priority on collaboration with
    other Federal agencies in the development of funding allocations for
    aquatic ecosystem restoration. Attachment 2 provides a list of the
    ecosystems and funding amounts budgeted on this basis.

                  FISCAL YEAR 2012 PRIORITY ECOSYSTEMS FUNDING
                            [In millions of dollars]
    ------------------------------------------------------------------------
     Ecosystem
      account               Projects and studies                  Amount
    ------------------------------------------------------------------------
               California Bay Delta:
         I \1\     Yuba River Fish Passage (new recon)                0.10
             I     San Pablo Bay Watershed Study                      0.50
         C \2\     Hamilton City (new start)                          8.00
       I/C/O&M     Additional studies and projects in                49.00
                    Navigation and Flood Damage Reduction
                    Pro-  grams
                                                           -----------------
                       Total, California Bay Delta                   58.00
                                                           =================
               Chesapeake Bay:
             I     Chesapeake Bay Comprehensive Study (new            0.25
                    recon)
             C     Poplar Island                                     12.00
             C     Chesapeake Bay Oysters                             5.00
                                                           -----------------
                     Total, Chesapeake Bay                           17.00
                                                           =================
               Everglades:
             C     Continuing projects and activities               163.00
       O&M \3\     Continuing projects and activities                 5.00
                                                           -----------------
                     Total, Everglades                              168.00
                                                           =================
               Great Lakes:
             I     Interbasin control--(Great Lakes-Ms R              3.00
                    Nuisance Species)
             C     Chicago sanitary and ship canal                   13.50
           O&M     Chicago sanitary and ship canal                   10.50
                                                           -----------------
                     Total, Great Lakes                              27.00
                                                           =================
               Gulf coast:
            GI     Louisiana coast comprehensive study                0.10
                    (new recon)
            GI     LCA studies                                       16.00
            CG     LCA projects                                      10.60
                                                           -----------------
                     Total, Gulf coast                               27.00
    ------------------------------------------------------------------------
               \1\ I=Investigation
               \2\ C=Construction
               \3\ O&M=Operation and Maintenance.

        In connection with this effort, the budget provides $168 million
    for COE for the ongoing South Florida Everglades Restoration Program,
    consisting of $163 million for Construction and $5 million for O&M. The
    budget supports the continued construction of five ongoing aquatic
    ecosystem restoration projects in south Florida:
      --Picayune Strand;
      --Site One Impoundment;
      --Indian River Lagoon South;
      --Kissimmee River; and
      --the C-111 (South Dade) project.
        The budget also supports work on other major ecosystem-wide
    initiatives, such as $58 million for studies and projects in the
    California Bay-Delta, including an important new reconnaissance study
    for fish passage at Englebright and Daguerre Point Dams on the Yuba
    River; an ongoing feasibility study for the Sacramento-San Joaquin
    Delta Islands and Levees; an ongoing comprehensive feasibility study
    for the Sacramento-San Joaquin River Basins; and a new construction
    project at Hamilton City for ecosystem restoration and flood damage
    reduction.
        The budget includes $128 million for the Columbia River Fish
    Mitigation program, an ongoing effort to reduce the adverse impacts of
    a series of COE dams on migrating salmon. Funds will be used to
    construct juvenile fish bypass facilities, improve adult fish ladders
    and conduct other activities that support salmon habitat. The budget
    also provides $73 million for ongoing work under the Missouri River
    fish and wildlife recovery program to construct shallow water habitat
    and undertake other activities to recover and protect federally listed
    species, such as the pallid sturgeon.

                coe deg.INFRASTRUCTURE RECAPITALIZATION

        The administration plans to work with the Congress and stakeholders
    to explore ways to support recapitalization of aging COE
    infrastructure, modification of its operations, or de-authorization,
    consistent with modern-day water resources principles and today's and
    tomorrow's water resources priorities. Under these principles, direct
    beneficiaries would be asked to pay a significant share of the costs to
    rehabilitate, expand or replace projects, as they would for a new
    project, commensurate with the benefits they receive. Options such as
    direct financing will be considered as part of this effort, where
    appropriate.
        The aging of infrastructure affects all of our activities. For
    example, with regard to the production of hydropower, the fiscal year
    2012 budget provides $176 million to operate and maintain COE
    hydropower facilities. In order to decide how best to use the available
    funding, COE has been working under its Hydropower Modernization
    Initiative (HMI) to develop a long-term capital investment strategy.
    One significant feature of the HMI is the Asset Investment Planning
    Tool, which was designed to:
      --analyze the condition of critical components and the consequences
            of failure;
      --determine the value of additional hydropower and its cost;
      --quantify risk exposure for capital investments; and
      --create 20-year funding scenarios to allow for timely and cost-
            effective rehabilitation or replacement of hydropower
            facilities and their components.
        To assist the Federal Government in rehabilitating aging equipment,
    COE also is pursuing increased use of non-Federal funds.

                 coe deg.HARBOR MAINTENANCE TRUST FUND

        The budget provides for use of $758 million from the Harbor
    Maintenance Trust Fund to maintain coastal channels and harbors.
    Despite an overall Civil Works reduction of 15 percent below the
    enacted fiscal year 2010 level, the amount recommended in the fiscal
    year 2012 budget for harbor maintenance and related work is essentially
    unchanged from the 2 prior years. The administration also plans to
    develop legislation to expand the authorized uses of the Trust Fund, so
    that its receipts are available to finance the Federal share of other
    efforts in support of commercial navigation through the Nation's ports.
    No decisions have been made yet on what additional costs would be
    proposed to be paid from receipts into the Harbor Maintenance Trust
    Fund. Development of proposed legislation will proceed in the coming
    months.

                  coe deg.INLAND WATERWAYS TRUST FUND

        Inland waterways capital investments are funded in the budget at
    $166 million, of which $77 million is financed from the Inland
    Waterways Trust Fund. This is the total amount that is affordable in
    fiscal year 2012 with the current level of revenue coming into the
    Trust Fund. The administration will work with the Congress and
    stakeholders to revise the laws that govern the Trust Fund, to include
    increasing the revenue paid by commercial navigation users of the
    inland waterways to meet their share of the costs of activities
    financed from this trust fund.

     coe deg.AMERICA'S GREAT OUTDOORS INITIATIVE AND CIVIL WORKS
                                   RECREATION

        On April 16, 2010 President Obama signed a Presidential Memorandum
    establishing the America's Great Outdoors (AGO) Initiative to promote
    and support innovative community-level efforts to conserve outdoor
    spaces and to reconnect Americans to the outdoors. This initiative was
    celebrated at several events around the country, including a public
    ``listening'' event the Secretary of the Interior and I held in August
    2010 at a Civil Works project near St. Louis, Missouri.
        COE has been actively involved with the AGO initiative, working in
    concert with its partners to leverage financial and human resources so
    the public can continue to enjoy water-based recreation opportunities
    at COE lakes. The Civil Works recreation program and activities are
    closely aligned with the goals of the initiative and include a variety
    of measures to reconnect Americans, especially young people, with the
    Nation's outdoor resources.
        COE manages 12 million acres of lands and waters supporting water-
    based recreation and environmental stewardship. The Civil Works program
    is particularly well-suited to support the AGO initiative, given that
    90 percent of COE projects are within 50 miles of metropolitan areas.
    Camping, hiking, swimming, boating, and other water-oriented recreation
    opportunities attract 370 million visits a year to 422 COE projects. In
    addition, COE has active programs to conserve and protect lands and
    waters for wildlife, fisheries, endangered species and open space.

                     coe deg.PLANNING IMPROVEMENTS

        Working through the Chief of Engineers, the Army continues to
    strengthen and improve the planning expertise of COE, including greater
    support for planning Centers of Expertise, better integration of
    project purposes, greater reliability of cost estimates and schedules
    in planning and programming, and continued support for the development
    of revised water project planning Principles and Guidelines. Also, the
    Army has initiated a pilot program to identify means of enabling
    studies to reach decisions more efficiently.

                   coe deg.VETERANS CURATION PROJECT

        The fiscal year 2012 budget includes $2 million to continue the
    Veterans Curation Project, which provides vocational rehabilitation and
    innovative training for wounded and disabled veterans, while achieving
    historical preservation responsibilities for archaeological collections
    administered by COE. The project supports work by veterans at curation
    laboratories located in Augusta, Georgia; St. Louis, Missouri; and
    Washington, DC.

                    coe deg.LOWER-PRIORITY PROGRAMS

        Funding of $76 million is provided in the fiscal year 2012 budget
    for maintenance of navigation harbors and waterway segments that
    support low commercial use. This is a reduction of $64 million from the
    fiscal year 2011 budget. The Estuary Restoration Program is funded at
    $2 million, compared to $5 million in the fiscal year 2011 budget.
        No funding is provided for small projects in 4 of the 9 Continuing
    Authorities Programs (CAPs):
      --section 14 (emergency streambank and shoreline protection);
      --section 103 (shore protection);
      --section 107 (navigation); and
      --section 208 (snagging and clearing).
        The budget proposes to reprogram $23 million of CAP funds carried
    over from prior years from these four CAPs to finance ongoing phases of
    projects in 4 of the remaining 5 CAPs:
      --section 111 (mitigation of shoreline damages caused by navigation
            projects);
      --section 204 (beneficial use of dredged material);
      --section 206 (aquatic ecosystem restoration); and
      --section 1135 (modification of completed projects for the benefit of
            the environment).
        Section 205 (flood damage reduction) also is supported, and has
    sufficient carryover within it to finance the fiscal year 2012 program
    without a reprogramming.
        No funding is provided for the Aquatic Plant Control program, nor
    is specific line item funding provided for coordination activities
    associated with the National Estuary Program and the North American
    Waterfowl Management Program. Coordination activities will take place,
    as appropriate, in connection with separately funded programs and
    projects.
        Funding under the Formerly Utilized Sites Remedial Action Program
    (FUSRAP) is reduced by $21 million, from $130 million in the fiscal
    year 2011 budget to $109 million in the fiscal year 2012 budget.

            coe deg.AMERICAN RECOVERY AND REINVESTMENT ACT

        COE continues the work funded in American Recovery and Reinvestment
    Act (ARRA). The act provided $4.6 billion for the Civil Works program.
    That amount includes $2 billion for Construction; $2.075 billion for
    O&M; $375 million for Mississippi River and Tributaries; $25 million
    for Investigations; $25 million for the Regulatory Program; and $100
    million for the Formerly Utilized Sites Remedial Action Program. The
    ARRA funds were allocated to more than 800 projects in 49 States, the
    District of Columbia, and Puerto Rico, and 400 of those projects have
    been completed.
        Nearly all of the $4.6 billion of these funds have been obligated,
    leaving only a small amount, as authorized, for contract supervision
    and administration, as well as known contract claims and modifications.
    As of last month, more than $3.1 billion of the total had been
    expended, primarily payments to contractors for work already completed.
    Of the more than 2,100 recipients of the COE ARRA funds, 99.8 percent
    submitted a report last quarter as required under the act and
    provisions of ARRA contracts.
        The projects funded by ARRA provide important support to the
    Nation's small businesses in their economic recovery. Of the total ARRA
    funds, small business awards account for about 51 percent of the ARRA
    funds obligated and about 72 percent of the total contract actions.
        COE achievements to date with ARRA funds include improvement of 28
    important commercial navigation harbors and channels; repair or
    improvement of dozens of hydropower projects; accelerated completion of
    site cleanup at 9 FUSRAP sites; completion of 822 periodic inspections
    of federally constructed levee systems, including both systems
    maintained by COE and those maintained by local sponsors; and
    completion of important work to restore 57 aquatic ecosystems.

                                   CONCLUSION

        In summary, the President's fiscal year 2012 budget for the Army
    Civil Works program is a performance-based budget that supports water
    resources investments that will yield long-term returns for the Nation.
        Madam Chairman and members of the subcommittee, I look forward to
    working with this subcommittee in support of the President's budget.
    Thank you.

        Senator Feinstein. Thank you very much for those words.
        General Van Antwerp, would you like to make some comments?

    STATEMENT OF LIEUTENANT GENERAL ROBERT L. VAN ANTWERP,
                CHIEF OF ENGINEERS
        General Van Antwerp. Madam Chairman and distinguished
    members of the subcommittee, the budget this year funds 92
    construction projects, 55 in the flood-storm-damage reduction.
    Three are budgeted for completion. We have 16 commercial
    navigation projects in this budget and 19 aquatic ecosystem
    projects. Two of these are scheduled as new starts.
        The budget supports our continued stewardship of water-
    related infrastructure. The operation and maintenance program
    for the fiscal year 2012 budget includes $2.314 billion and an
    additional $131 million under the Mississippi River and
    Tributaries program.
        COE teammates continue to respond wherever and whenever
    needed to help during major floods and other national
    emergencies. As you can imagine, we are gearing up right now.
    The budget provides $27 million for the preparation for floods,
    hurricanes, and other natural disasters, to include $4 million
    to support the levee safety initiatives in States known as
    ``silver jackets.''
        I would like to just provide a quick update on preparations
    as we look forward--not really look forward to, but as we
    anticipate potential spring flood events. We are working with
    the Federal Emergency Management Agency (FEMA) and the National
    Weather Service to monitor the high probability of spring
    flooding in the north central United States, a lot of which is
    already happening out there, specifically the Red River and the
    upper Mississippi River and the Minnesota River. Based on our
    projections, our Commanders have requested the advance planning
    and advance measures funding needed to flood fight. We are out
    there on the ground right now. And I guess in three words I
    would say we are ready.
        On the international front, although not covered
    specifically by this subcommittee, I am proud to tell you a
    little bit about our work in Iraq and Afghanistan, if you will
    indulge me that. We have 1,168 COE members, largely civilians,
    right now deployed overseas. Every day they put on their battle
    armor and they work on the projects that we have asked them to
    do. They have completed more than 6,000 infrastructure and
    water-related projects. We have a lot of our Civil Works
    members that work in COE over there deployed on this military
    mission.
        Last month, Ms. Darcy and I traveled to Afghanistan with my
    counterparts from the other services and witnessed this amazing
    work and had a chance to praise them for their efforts and
    thank them.
        On the 21st and 22d of March, we traveled down to New
    Orleans. We wanted to visit all the major projects in our
    Hurricane Storm Damage Risk Reduction System and make sure that
    the system was ready to defend against the 100-year event by
    June 1 and I am proud to say and happy to say that we are
    ready. It has just been amazing what work has been done down
    there.

                               PREPARED STATEMENT

        Finally, I would like to just say that we are committed to
    staying on the leading edge of service to our Nation in these
    water-related issues, and I look forward to your questions.
    Thank you.
        [The statement follows:]
         Prepared Statement of Lieutenant General Robert L. Van Antwerp

        Chairman Feinstein and distinguished members of the subcommittee: I
    am honored to be testifying before your subcommittee today, along with
    the Assistant Secretary of the Army (Civil Works), the Honorable Jo-
    Ellen Darcy, on the President's fiscal year 2012 budget for the Civil
    Works Program of the United States Army Corps of Engineers (COE).
        My statement covers the following 12 topics:
      --Summary of fiscal year 2012 program budget;
      --Direct program;
      --Investigations program;
      --Construction program;
      --Operation and maintenance program;
      --Reimbursable program;
      --Proposed legislation;
      --Planning program modernization;
      --Efficiency and effectiveness of COE operations;
      --Value of the Civil Works Program to the Nation's economy and
            defense;
      --Research and development; and
      --National defense.

          coe deg.SUMMARY OF FISCAL YEAR 2012 PROGRAM BUDGET

        COE is fully committed to supporting the President's priorities to
    reduce the deficit, revitalize the economy and restore and protect the
    environment. The fiscal year 2012 Civil Works budget is a performance-
    based budget that reflects a focus on the projects and activities that
    provide the highest net economic and environmental returns on the
    Nation's investment or address significant risks to human safety. The
    budget also proposes cancellation of the unobligated balance of funding
    in the Mississippi River and Tributaries account that was previously
    provided for construction of the Yazoo Backwater Pumps, Mississippi
    project. The reimbursable Interagency and International Services
    Program is projected to involve an additional $1.6 billion.

                        coe deg.DIRECT PROGRAM

        The budget includes $4.6 billion, including funding for the
    operation and maintenance of more than 600 flood and storm damage
    reduction projects, 143 commercial coastal navigation projects, and 51
    commercial navigation projects on the inland waterways. It also funds
    continuing construction of 90 construction projects and 2 new
    construction starts. The budget includes funds for 58 studies already
    underway and 4 new study starts. It will enable COE to process
    approximately 70,000 permit requests and to operate 75 hydropower
    plants with 350 generating units that produce about 24,000 megawatts
    per year. The budget will enable about 370 million outdoor recreational
    visits to COE projects and will provide water supply storage for about
    14 percent of the Nation's municipal water needs. The budget will
    sustain COE's preparedness to respond to natural disasters that we may
    experience. Finally, the budget also proposes to reduce Federal costs
    through a reduction in funding in lower-priority programs.

                    coe deg.INVESTIGATIONS PROGRAM

        The budget for the Investigations program will enable COE to
    evaluate and design future projects that are most likely to be
    highperforming within COE three main mission areas:
      --commercial navigation;
      --flood and storm damage reduction; and
      --aquatic ecosystem restoration.
        The budget includes $104 million for these and related activities
    in the Investigations account and $1 million in the Mississippi River
    and Tributaries account. It funds 58 continuing studies (1
    reconnaissance and 57 feasibility) and 4 new studies:
      --Englebright and Daguerre Point Dams (Yuba River) Fish Passage,
            California;
      --Cano Martin Pena, Puerto Rico;
      --the Chesapeake Bay Comprehensive Plan; and
      --the Louisiana Coastal Area Comprehensive Study.
        Funding is also included for the Water Resources Priorities Study,
    a high-priority evaluation of the Nation's vulnerability to inland and
    coastal flooding, as well as the effectiveness, efficiency, and
    accountability of existing water resource programs and strategies.

                     coe deg.CONSTRUCTION PROGRAM

        The goal of the construction program is to deliver as high a value
    as possible to the Nation from the overall available funding through
    the construction of new water resources projects and the replacement,
    rehabilitation, and expansion of existing water resources projects in
    the three main Civil Works missions (flood and storm damage reduction,
    aquatic ecosystem restoration, and commercial navigation) and related
    projects (principally hydropower). The fiscal year 2012 budget includes
    $1.48 billion in the Construction account and $78 million in the
    Mississippi River and Tributaries account to further this objective.
    Consistent with this goal, the budget also gives priority to projects
    that address a significant risk to human safety.
        The budget funds 92 construction projects, including:
      --55 Flood and storm damage reduction projects (3 budgeted for
            completion);
      --16 Commercial navigation projects (including 5 continuing
            mitigation items and 4 dredged material placement areas);
      --19 Aquatic ecosystem restoration projects (including 3 projects to
            meet biological opinions); and
      --mitigation associated with 2 Hydropower projects.
        Two of these construction projects are new starts. In the
    construction program, the aquatic ecosystem restoration mission also
    includes significant environmental mitigation work in the Columbia
    River Basin and the Missouri River Basin needed to support the
    continued operation of COE multi-purpose projects, which improves
    habitat and migration pathways for endangered and threatened species.
        Performance measures, which COE uses to establish priorities among
    projects, include the benefit-to-cost ratios for projects with economic
    outputs and the most cost-effective restorations of significant aquatic
    ecosystems. The selection process also gives priority to dam safety
    assurance, seepage control, static instability correction work, and to
    projects that address a significant risk to human safety. These
    performance measures maximize benefits to the Nation from the Civil
    Works construction program by focusing on the projects that will
    provide the best net returns for each dollar invested.

               coe deg.OPERATION AND MAINTENANCE PROGRAM

        The facilities owned and operated by, or on behalf of, COE of
    Engineers are aging. As stewards of this infrastructure, we are working
    to ensure that its key features continue to provide an appropriate
    level of service to the Nation. Sustaining such service poses a
    technical challenge in some cases, and proper maintenance is becoming
    more expensive at many of our projects as infrastructure ages.
        The Operation and Maintenance (O&M) program for the fiscal year
    2012 budget includes $2.314 billion and an additional $131 million
    under the Mississippi River and Tributaries program with a focus on the
    maintenance of key commercial navigation, flood and storm damage
    reduction, hydropower, and other facilities. Specifically, the O&M
    program supports completed works owned or operated by the Corps of
    Engineers, including administrative buildings and laboratories. Work to
    be accomplished includes:
      --operation of the locks and dams of the inland waterways;
      --dredging of inland and coastal Federal commercial navigation
            channels;
      --operating multiple purpose dams and reservoirs for flood damage
            reduction, aquatic ecosystem restoration, hydropower,
            recreation, and other related purposes;
      --maintenance and repair of these facilities;
      --monitoring of completed storm damage reduction projects along our
            coasts; and
      --general management of facilities and the lands associated with
            these purposes.

                     coe deg.REIMBURSABLE PROGRAM

        Through the Interagency and Intergovernmental Services Program, we
    help non-DOD Federal agencies, State, local and tribal governments, and
    other countries with timely, cost-effective implementation of their
    programs. Rather than develop their own internal workforce to oversee
    design and construction of projects, these agencies can turn to COE ,
    which has these capabilities. Such intergovernmental cooperation is
    effective for agencies and the taxpayer by using the skills and talents
    that we bring to our Civil Works and Military Program missions. The
    work is principally technical oversight and management of engineering,
    environmental, and construction contracts performed by private sector
    firms, and is totally financed by the agencies we serve. We only accept
    agency requests that we can execute without impacting our Civil Works
    or Military Programs missions, are consistent with our core technical
    expertise, and are in the national interest.
        Currently, we provide reimbursable support for about 70 other
    Federal agencies and several State and local governments. Total
    reimbursement for such work in fiscal year 2012 is projected to be $1.6
    billion, reflecting completion of most ARRA work and a general
    reduction in budget capability for most of our other agency customers.
    The exact amount will depend on requests from the agencies.

                     coe deg.PROPOSED LEGISLATION

        The budget includes several legislative proposals that will improve
    operations or enable execution of important national programs. The
    budget proposes to extend the authority to implement measures to
    prevent the migration of invasive aquatic species into the Great Lakes,
    to transfer funds between accounts to enable completion of the New
    Orleans perimeter protection by June 2017, to purchase the property
    that houses the Cold Regions Research Engineering Laboratory in
    Hanover, New Hampshire, and to make a minor modification to existing
    law that will enable us to serve in an official capacity in meetings of
    the Permanent International Association of Navigation Congresses. As
    included in the testimony of Assistant Secretary of the Army (Civil
    Works) Jo-Ellen Darcy, the budget also discusses two other important
    legislative initiatives, concerning the way in which Federal navigation
    activities are funded.

                coe deg.PLANNING PROGRAM MODERNIZATION

        COE will continue to implement actions to improve its Civil Works
    Planning Program performance through a planning modernization effort.
    This effort focuses on how best to organize, manage, operate, and
    oversee the planning program to more effectively address 21st century
    water resources challenges, including:
      --improved project delivery that yields smarter outcomes;
      --improved technical capability of our planners;
      --enhanced collaboration with Federal, State, local, and
            nongovernmental partners;
      --evaluating and enhancing Corps Planning Centers of Expertise
            production capability and staffing; and
      --strengthening the objectivity and accountability of our planning
            efforts.
        Our improved planning performance will include:
      --updated planning guidance and policy;
      --streamlined, adaptable planning processes to improve effectiveness,
            efficiency, accuracy, and responsiveness; and
      --enhanced technical capabilities.
        In fiscal year 2011, COE launched a 2-year National Planning Pilot
    Program to test the concepts of this approach within our current policy
    and to develop and refine methodologies and processes for planning
    studies across all business lines in a manner that is sustainable and
    replicable and that will inform future Civil Works guidance. We expect
    to conduct approximately 7 to 9 pilot studies over the course of the
    National Planning Pilot Program.

    coe deg.EFFICIENCY AND EFFECTIVENESS OF THE CORPS OF ENGINEERS
                                   OPERATIONS

        COE always strives to continually improve the efficiency and
    effectiveness of its investigations, construction, and operation and
    maintenance programs. In fiscal year 2012, COE will further expand the
    implementation of a modern asset management program; increase its focus
    on the most important maintenance work; implement an energy
    sustainability program; pursue major efficiencies in the acquisition
    and operations of its information technology assets; and complete the
    ongoing reorganization of its acquisition workforce.

                      coe deg.EMERGENCY RESPONSE

        From across the Nation, the people who work for COE continue to
    respond whenever needed to the call to help during major floods and
    other national emergencies. The critical work they are doing reduces
    the risk of damage to people and communities. The budget provides $27
    million for preparedness for floods, hurricanes, and other natural
    disasters, including $4 million in support of the levee safety
    initiative for COE participation in the expansion of interagency teams
    known as Silver Jackets, to include every State, and provide unified
    Federal assistance in implementing flood and storm damage reduction
    solutions.

                   coe deg.RESEARCH AND DEVELOPMENT

        Civil Works Program research and development provides the Nation
    with innovative engineering products, some of which can have
    applications in both civil and military infrastructure spheres. By
    creating products that improve the efficiency and competitiveness of
    the Nation's engineering and construction industry and by providing
    more cost-effective ways to operate and maintain infrastructure, Civil
    Works program research and development contributes to the national
    economy.

                       coe deg.NATIONAL DEFENSE

        Internationally, COE continues to support the mission to help Iraq
    and Afghanistan build foundations for democracy, freedom, and
    prosperity.
        We are proud to serve this great Nation and our fellow citizens,
    and we are proud of the work COE does to support America's foreign
    policy, particularly with our ongoing missions in Afghanistan and Iraq.
    Men and women from across the COE--all volunteers and many of whom have
    served on multiple deployments--continue to provide critical support to
    our military missions there and humanitarian support to the citizens of
    those nations. Currently, 1,168 COE employees (civilian and military)
    are deployed in Iraq and Afghanistan, where they have completed a total
    of more than 6,000 infrastructure and water resources projects.
        Ms. Darcy and I traveled to Afghanistan last month. As with every
    opportunity that I've had to travel to that theater, I continue to be
    amazed--but not surprised--by the progress being made. It was truly a
    privilege to visit with the outstanding COE men and women who are
    making this happen, and to see their dedication and commitment.
        In Afghanistan, the COE is spearheading a comprehensive
    infrastructure program for the Afghan national army, and is also aiding
    in critical public infrastructure projects.

                                   CONCLUSION

        COE is committed to staying at the leading edge of service to the
    Nation. We are committed to change that ensures an open, transparent,
    and performance-based Civil Works Program.
        Thank you, Chairman Feinstein and members of the subcommittee. This
    concludes my statement.

        Senator Feinstein. Thank you very much, General.
        Secretary Castle, would you like to begin?

                           DEPARTMENT OF THE INTERIOR

                             Bureau of Reclamation

    STATEMENT OF HON. ANNE CASTLE, ASSISTANT SECRETARY FOR
                WATER AND SCIENCE
    ACCOMPANIED BY REED MURRAY, PROGRAM DIRECTOR, CENTRAL UTAH PROJECT
                COMPLETION ACT OFFICE
        Ms. Castle. Yes. Thank you, Madam Chair, Senator Alexander,
    and members of the subcommittee. Thank you for inviting me here
    to discuss the President's 2012 budget request with you today.
    You have noted Commissioner Connor's presence. With me also is
    Reed Murray who is the Director of the Central Utah Project
    Completion Act (CUPCA) should you have any specific questions
    about that program.
        Interior's mission is essential to our American way of
    life. We protect our natural resources and our cultural
    heritage. We honor our Nation's trust responsibilities to
    American Indians and Alaska Natives. We supply water to lands
    and people throughout the West. We provide energy to power our
    future. Our Interior Department people and programs touch
    virtually every single American.
        The Interior 2012 budget funds our primary mission areas,
    and we have done that by eliminating and reducing lower-
    priority programs, by streamlining and gaining efficiencies,
    and by deferring some projects.
        The 2012 combined budget request for BOR and the CUPCA
    program is $1.1 billion. As you said, Madam Chair, that is a
    $78.3 million reduction, 7 percent, from the 2010 enacted
    level.
        One of the highest priorities that we have in the
    Department of the Interior is to address water challenges by
    providing Federal leadership on the path to a sustainable water
    future. We are doing that through our WaterSMART initiative,
    and we are trying to address the 21st century pressures on our
    Nation's water supplies. The 2012 budget request by Interior
    for the WaterSMART initiative is $70 million. That is
    distributed between BOR and the U.S. Geological Survey (USGS).
        Of that request, $59 million is for BOR programs. That
    includes three ongoing BOR programs, the title 16 Water
    Recycling and Reuse Grant Program, the Basin Studies Program,
    and the WaterSMART cost share grant funding.
        Two additional programs are being added to the WaterSMART
    initiative this year. One already existed within BOR. That is
    the Water Conservation Field Services program. The other is the
    Cooperative Watershed Management program which is a new program
    authorized under the Secure Water Act, and we have seed money
    in the BOR budget for that in 2012.
        USGS has requested funding to undertake a multiyear
    nationwide water availability and use assessment that was also
    authorized by the Secure Water Act, and that is what its
    funding is in the WaterSMART program.
        I want to briefly highlight just a few of BOR's other
    significant efforts. BOR just released its hydropower resource
    assessment that takes a look at the potential to add hydropower
    capacity to existing BOR facilities. The next phase of that
    assessment will look at adding hydropower capacity to canals
    and conduits. So we are trying to assess the potential for
    additional renewable energy at existing facilities.
        We are currently in a dialogue with Mexico on the
    management of the Colorado River, and we have ongoing efforts
    to improve our water operations on the Colorado River--from
    looking at renewable energy projects in the headwaters all the
    way down to desalination efforts near the Mexican border.
        We are actively pursuing solutions to the ongoing water
    challenges in the California Bay-Delta. Our efforts there are
    focused on co-leading with the Council on Environmental Quality
    (CEQ) an interagency effort to implement the December 2009
    Interim Federal Action Plan.
        Our 2012 budget includes funding for the initial
    implementation of four Indian water rights settlements that
    were authorized in the Claims Resolution Act at the end of last
    year. And in addition to those four settlements, BOR's budget
    includes funding for the Navajo-Gallup Water Supply Project, an
    ongoing project.
        With respect to CUPCA, the 2012 budget request is for $33
    million. That includes $28.5 million to design, construct and
    provide land acquisition for the Utah lake system, which is the
    last remaining component of the Central Utah Project. That
    amount includes full funding for the construction of the Provo
    River Canal Enclosure Project, which will provide 8,000 acre-
    feet of saved water to benefit endangered species and 30,000
    acre-feet, when completed, to municipalities in Salt Lake and
    Utah Counties in Utah.
        This budget was constructed, as has been said, in the
    context of very difficult economic times. We took a hard look
    at our existing programs. We made some very, very tough calls,
    and we made some reductions in order to shoulder our share of
    responsibility to reduce the deficit. We think we have done
    that in a way that adequately protects water and power
    deliveries, protects the ecosystems that are affected by those
    delivery systems so that we can ensure reliability of supplies
    in the future, and makes appropriate investments in our
    infrastructure.

                               PREPARED STATEMENT

        I look forward to your questions. I appreciate and thank
    you for your support, and this subcommittee's support of the
    missions within the Department of the Interior. I look forward
    to discussing this budget with you.
        [The statement follows:]

                       Prepared Statement of Anne Castle

        Madam Chair, Senator Alexander, and members of this subcommittee, I
    am pleased to appear before you today to discuss the President's fiscal
    year 2012 budget for the Department of the Interior. I would also like
    to thank the members of this subcommittee for your ongoing support for
    our initiatives over the last 2 years.
        The 2012 budget builds on that strong foundation with $12.2 billion
    requested for the Department of the Interior. The budget demonstrates
    that we can responsibly cut the deficit, while investing to win the
    future and sustain the national recovery. Our budget promotes the
    actions and programs that America told us are important in 50 listening
    sessions across the country. In response, we developed a new 21st
    century conservation vision--America's Great Outdoors. The budget
    continues to advance efforts that you have facilitated in renewable
    energy and sustainable water conservation, cooperative landscape
    conservation, youth in the outdoors, and reforms in our conventional
    energy programs.
        I will also discuss the President's fiscal year 2012 budget request
    for implementation of the Central Utah Project Completion Act, and I
    thank the subcommittee for your continued support of the Central Utah
    Project Completion Act Program as well.

                                  INTRODUCTION

        Interior's mission--to protect America's natural resources and
    cultural heritage and honor the Nation's trust responsibilities to
    American Indians and Alaska Natives--is profound. Interior's people and
    programs impact all Americans.
        The Department is the steward of 20 percent of the Nation's lands
    including national parks, national wildlife refuges, and the public
    lands. Interior manages public lands and the Outer Continental Shelf,
    providing access for renewable and conventional energy development and
    overseeing the protection and restoration of surface-mined lands.
    Through the Bureau of Reclamation (BOR), Interior is the largest
    supplier and manager of water in the 17 Western States and provides
    hydropower resources used to power much of the country. The Department
    supports cutting edge research in the earth sciences--geology,
    hydrology, and biology--to inform resource management decisions at
    Interior and improve scientific understanding worldwide. The Department
    of the Interior also fulfills the Nation's unique trust
    responsibilities to American Indians and Alaska Natives, and provides
    financial and technical assistance for the insular areas.
        The Department of the Interior makes significant contributions to
    the Nation's economy. It supports more than 1.3 million jobs and more
    than $370 billion in economic activity each year. Parks, refuges, and
    monuments generate more than $24 billion in economic activity from
    recreation and tourism. Conventional and renewable energy produced on
    Interior lands and waters results in about $295 billion in economic
    benefits and the water managed by Interior supports more than $25
    billion in agriculture. The American outdoor industry estimates 6.5
    million jobs are created every year from outdoor activities.

                     bor deg.2010 ACCOMPLISHMENTS

        At the start of the administration, Interior set on a course to
    create a comprehensive strategy to advance a new energy frontier;
    tackle the impacts of a changing landscape; improve the sustainable use
    of water; engage youth in the outdoors; and improve the safety of
    Indian communities. These priority goals integrate the strengths of the
    Department's diverse bureaus and offices to address key challenges of
    importance to the American public. Interior has been making progress in
    these areas, including:
        Approving 12 renewable energy projects on public lands that when
    built, will produce almost 4,000 megawatts of energy, enough energy to
    power close to 1 million American homes, and create thousands of
    construction and operational jobs.
        Designating more than 5,000 miles of transmission corridors on
    public lands to facilitate siting and permitting of transmission lines
    and processing more than 30 applications for major transmission
    corridor rights-of-way.
        Establishing 3 of 8 planned regional Climate Science Centers and 9
    of 21 Landscape Conservation Cooperatives.
        Issuing grants to water districts and other water delivery
    authorities resulting in the conservation of 150,000 acre-feet of
    water.
        Increasing the number of youth employed in conservation through
    Interior or its partners by 45 percent more than 2009 levels.
        Reducing overall crime in four Indian communities as a result of a
    concerted effort to increase law enforcement officers, conduct training
    in community policing techniques, and engage the communities in law
    enforcement efforts.
        The Department advanced key priorities and strategic goals that
    will improve the conservation and management of natural and cultural
    resources into the future.
        Interior, along with the Department of Agriculture, the
    Environmental Protection Agency, and the Council on Environmental
    Quality, participated in the White House Conference on America's Great
    Outdoors and held 50 public listening sessions across the Country that
    have helped shape a conservation vision and strategy for the 21st
    century. We have released a report, America's Great Outdoors: A Promise
    to Future Generations that lays out a partnership agenda for 21st
    century conservation and recreation.
        In the spirit of America's Great Outdoors, we welcomed new national
    wildlife refuges in Kansas and Colorado and proposed a new conservation
    area in Florida at the headwaters to the Everglades. These refuges mark
    a new era of conservation for the Department, one that is community-
    driven, science-based, and takes into account entire ecosystems and
    working landscapes.
        The Department worked with others to develop an action plan to help
    address water supply and environmental challenges in the California
    Bay-Delta area, invested more than $500 million in major water projects
    over the past 2 years, and moved forward on long-standing water
    availability issues in the Colorado River Basin.
        In December, the Secretary issued a recommendation to the Congress
    to undertake an additional 5.5 miles of bridging on the Tamiami Trail
    in the Everglades above and beyond the 1-mile bridge now under
    construction. When combined with other planned work in the Everglades
    Agricultural Area and water conservation areas, this project should
    restore 100 percent of historic water quantity and flow to Everglades
    National Park.
        With the help of the Congress, we brought about resolution of the
    Cobell v. Salazar settlement and resolved four Indian water rights
    issues through enactment of the Claims Resolution Act of 2010. We also
    completed negotiation of a new Compact of Free Association with the
    island of Palau which awaits congressional approval.
        In December of last year, the President hosted the second White
    House Tribal Nations Conference bringing together tribal leaders from
    across the United States; we are improving the Nation-to-nation
    relationship with 565 tribes.

                     bor deg.FISCAL RESPONSIBILITY

        Interior's 2012 budget must be viewed in the context of the
    difficult fiscal times facing the Nation and the President's freeze on
    discretionary funding. The 2012 budget reflects many difficult budget
    choices, cutting worthy programs and advancing efforts to shrink
    Federal spending. The budget contains reductions totaling $1.1 billion
    or 8.9 percent of the 2010 enacted level. Staffing reductions are
    anticipated in some program areas, which will be achieved through
    attrition, outplacement, and buy-outs to minimize the need to conduct
    reductions in force to the greatest extent possible. These reductions
    are a necessary component of maintaining overall fiscal restraint while
    allowing us to invest additional resources in core agency priorities.
        This budget is responsible. Interior's $12.2 billion budget funds
    important investments by eliminating and reducing lower-priority
    programs, deferring projects, reducing redundancy, streamlining
    management, and capturing administrative and efficiency savings. It
    maintains funding levels for core functions that are vital to uphold
    stewardship responsibilities and sustain key initiatives. The 2012
    request includes $11.2 billion for programs funded by the Interior,
    environment, and related agencies appropriation. The 2012 request for
    BOR and the Central Utah Project Completion Act, funded in the Energy
    and Water Development Appropriations Act, is $1.1 billion in current
    appropriations, $78.3 million or 7 percent below the 2010 enacted
    level.

                    bor deg.INVESTING IN THE FUTURE

        America's Great Outdoors.--Last year, the administration initiated
    a national dialogue at the White House Conference on America's Great
    Outdoors. In 50 listening sessions held across the Country, the public
    communicated their conservation and recreation priorities, and the
    result is a report to the President, ``America's Great Outdoors: A
    Promise to Future Generations''. The report outlines how the Federal
    Government can support a renewed and refreshed conservation vision by
    working in collaboration with communities, farmers and ranchers,
    businesses, conservationists, youth, and others who are working to
    protect the places that matter to them and by engaging people across
    the country in conservation and recreation.
        The 2012 America's Great Outdoors initiative focuses on investments
    that will lead to healthy lands, waters and resources while stimulating
    the economy--goals that are complementary. Through strategic
    partnerships, Interior will support and protect historic uses of lands,
    restore lands and resources, protect and interpret historic and
    cultural resources, and expand outdoor recreation opportunities. All of
    these activities have significant economic benefits in rural and urban
    communities.
        Youth.--Furthering the youth and conservation goals of the
    America's Great Outdoors initiative, the 2012 budget proposes to
    continue engaging youth by employing and educating young people from
    all backgrounds.
        Interior is uniquely qualified to engage and educate young people
    in the outdoors and has programs that establish connections for youth
    ages 18 to 25 with natural and cultural resource conservation. These
    programs help address unemployment in young adults and address health
    issues by encouraging exercise and outdoor activities. For example,
    Interior is taking part in the First Lady's Let's Move initiative to
    combat the problem of childhood obesity. Interior has long-standing
    partnerships with organizations such as the 4-H, the Boy Scouts, the
    Girl Scouts, the Youth Conservation Corps, and the Student Conservation
    Association. These programs leverage Federal investments to put young
    people to work and build a conservation ethic.
        Cooperative Landscape Conservation.--Interior's 2012 budget
    realigns programs and funding to better equip land and resource
    managers with the tools they need to effectively conserve resources in
    a rapidly changing environment. Significant changes in water
    availability, longer and more intense fire seasons, invasive species
    and disease outbreaks are creating challenges for resource managers and
    impacting the sustainability of resources on public lands. These
    changes result in bark beetle infestations, deteriorated range
    conditions, and water shortages that negatively impact grazing,
    forestry, farming, as well as the status of wildlife and the condition
    of their habitats. Many of these problems are caused by or exacerbated
    by climate change.
        Interior's 2012 budget includes $175.0 million for cooperative
    landscape conservation, an increase of $43.8 million. The budget funds
    the completion of the Climate Science Centers and Landscape
    Conservation Cooperatives, the organizing framework for the
    Department's efforts to work collaboratively with others to understand
    and manage these changes. These efforts will allow the Department to
    meet its priority goal to identify resources vulnerable to climate
    change and implement coordinated adaptation response actions for 50
    percent of the Nation by the end of 2012.
        Water Challenges.--Interior is working to address the 21st century
    pressures on the Nation's water supplies. Population growth, aging
    water infrastructure, changing climate, rising energy demands, impaired
    water quality and environmental needs are among the challenges. Water
    shortage and water use conflicts have become more commonplace in many
    areas of the United States, even in normal water years. As competition
    for water resources grows, the need for information and tools to aid
    water resource managers also grows. Water issues and challenges are
    increasing across the Nation, but particularly in the West and
    Southeast due to more prolonged droughts than we have experienced
    historically. Traditional water management approaches no longer meet
    today's needs.
        BOR proposes to fund the rebased WaterSMART at $58.9 million, $11
    million below 2011 levels. The three ongoing WaterSMART programs
    include:
      --the WaterSMART Grant program funded at $18.5 million;
      --Basin Studies funded at $6 million; and
      --the title XVI Water Reclamation and Reuse program funded at $29
            million.
        The rebasing adds the existing Water Conservation Field Services
    program, funded at $5.1 million, and participation by BOR in the
    Cooperative Watershed Management program, funded at $250,000.
    WaterSMART is a joint effort with USGS. USGS will use $10.9 million, an
    increase of $9 million, for a multi-year, nationwide water availability
    and use assessment program.
        Other significant programs and highlights specific to BORinclude:
        In 2010, the Secretary issued a Secretarial Order establishing the
    WaterSMART program which embodies a new water sustainability strategy.
    WaterSMART coordinates Interior's water sustainability efforts, creates
    a clearinghouse for water conservation best practices and implements a
    department-wide water footprint reduction program to reduce consumption
    of potable water by 26 percent by 2020.
        We are in dialogue with Mexico on the management of the Colorado
    River. We have ongoing efforts to improve our management of resources
    on the Colorado River, from renewable hydropower development near the
    headwaters to a pilot program of desalination near the Mexican border.
        We are actively pursuing workable solutions to regional issues such
    as in the California Bay-Delta. The Bay-Delta is a source of drinking
    water for 25 million Californians and sustains about $400 billion in
    annual economic activity, including a $28 billion agricultural industry
    and up until recently supported a thriving commercial and recreational
    fishing industry. Our efforts in the Bay-Delta are focused on co-
    leading an inter-agency effort with the Council on Environmental
    Quality (CEQ) to implement the December 2009 Interim Federal Action
    Plan for the California Bay-Delta Conservation Plan. In coordination
    with five other Federal agencies, we are leveraging our activities to
    address California water issues, promote water efficiency and
    conservation, expand voluntary water transfers in the Central Valley,
    fund drought relief projects, and make investments in water
    infrastructure. Over the past 2 years, we have invested more than $500
    million in water projects in California. We have also, in close
    coordination with NOAA and the State of California, worked on the
    California Bay-Delta Conservation Plan, a long-term plan aimed at
    restoring both reliable water supplies and a healthy Bay-Delta
    ecosystem.
        On March 22 we announced an update to the Water Supply Allocation
    for Central Valley Project (CVP) water users for 2011. This updated
    allocation reflects improved precipitation and snowpack in the Sierra
    Nevada Mountains in the last month. We are pleased to report that the
    current allocation for most CVP contractors is 100 percent of their
    contract supply. Agricultural water service contractors South-of-Delta
    allocations have been increased from 50 percent to 65 percent and
    municipal and industrial contracts from 75 percent to 90 percent. These
    allocations represent good news given recent years, but many challenges
    remain. We will continue to work with our Federal, State, and local
    partners to improve water supply reliability while addressing
    significant ecological issues. BOR is continuing to update the forecast
    to provide the most current information to its stakeholders.

                          bor deg.HYDROPOWER

        Hydropower is a very clean and efficient way to produce energy and
    is a renewable resource. Each kilowatt-hour of hydroelectricity is
    produced at an efficiency of more than twice that of any other energy
    source. Further, hydropower is very flexible and reliable when compared
    to other forms of generation. BOR has nearly 500 dams and 10,000 miles
    of canals and owns 58 hydropower plants, 53 of which are operated and
    maintained by BOR. On an annual basis, these plants produce an average
    of 40 million megawatt (MW) hours of electricity, enough to meet the
    entire electricity needs of more than 9 million people on average.
        BOR and the Federal Energy Regulatory Commission (FERC) have an
    existing MOU, signed in 1992, that addresses the establishment of
    processes for early resolution of issues related to the timely
    development of non-Federal hydroelectric power at BOR facilities. BOR
    and FERC recently met to discuss how to improve the timeliness of the
    processes developed in that MOU and resolution of authority issues.
        BOR is assessing the potential for developing low-head
    hydroelectric generating capacity on federally owned canals and
    conduits.
        Overall, the Department shares the subcommittee's view that
    interagency coordination can leverage Federal and private sector
    investment in additional hydropower development. This consideration was
    foremost in the Department's signing a Memorandum of Understanding with
    the Department of Energy and COE on March 24, 2010 to increase
    communication between Federal agencies and strengthen the long-term
    relationship among them to prioritize the generation and development of
    sustainable hydropower. This administration is committed to increasing
    the generation of environmentally sustainable, affordable hydropower
    for our national electricity supplies in as efficient a manner as
    possible.
        Indian Land and Water Settlements.--Interior's 2012 budget includes
    $84.3 million in BOR and Bureau of Indian Affairs (BIA) to implement
    land and water settlements.
        BOR's budget includes $51.5 million for the initial implementation
    of four settlements authorized in the Claims Resolution Act of 2010.
    The legislation included water settlements for the Taos Pueblo of New
    Mexico and Pueblos of New Mexico named in the Aamodt case, the Crow
    Tribe of Montana, and the White Mountain Apache Tribe of Arizona. BOR's
    contribution to the Navajo-San Juan settlement is also included in the
    account.
        The Claims Resolution Act of 2010 establishes trust funds for
    tribes to manage water systems and settlement funds to develop
    infrastructure. The primary responsibility for constructing these water
    systems was given to BOR, while BIA is responsible for the majority of
    the trust funds, which includes $207.2 million in mandatory funding in
    2011.
        These settlements will deliver clean water to the Taos Pueblo and
    the Pueblos of Nambe, Pojoaque, San Ildefonso, and Tesuque in New
    Mexico, the Crow Tribe of Montana, and the White Mountain Apache Tribe
    of Arizona. In addition to funding for the initial implementation of
    these four settlements, BOR's budget includes $24.8 million for the
    Navajo-Gallup Water Supply project. In the 2012 budget, BORis
    establishing an Indian Water Rights Settlements account to assure
    continuity in the construction of the authorized projects and to
    highlight and enhance transparency. Both BOR and BIA are working
    cooperatively to implement the settlements.

              bor deg.CENTRAL UTAH PROJECT COMPLETION ACT

        I am pleased to provide the following information about the
    President's fiscal year 2012 budget request for implementation of
    Central Utah Project Completion Act (CUPCA).
        CUPCA, titles II-VI of Public Law 102-575, provides for completion
    of the Central Utah Project (CUP) by the Central Utah Water Conservancy
    District. The act also authorizes funding for fish, wildlife, and
    recreation mitigation and conservation; establishes an account in the
    Treasury for deposit of these funds and other contributions;
    establishes the Utah Reclamation Mitigation and Conservation Commission
    to coordinate mitigation and conservation activities; and provides for
    the Ute Indian Rights Settlement.
        The 2012 request for the Central Utah Project Completion Account
    provides $33 million for use by the District, the Mitigation
    Commission, and the Department to implement titles II-IV of the act,
    which is $9 million less than the 2010 enacted level. The decrease in
    funding for the 2012 budget is due in part to accelerated funding
    provided in 2009 through the American Recovery and Reinvestment Act and
    in part to the administration's effort to reduce the deficit.
        The request for the District includes $28.5 million to fund the
    designs, specifications, land acquisition, and construction of the Utah
    Lake System ($18.5 million). This includes full funding ($10 million)
    for construction of the Provo River Canal Enclosure Project, which when
    completed will provide 8,000 acre-feet of conserved water for
    endangered fish and convey 30,000 acre-feet of CUP water.
        The request includes $2 million for the Mitigation Commission to
    implement the fish, wildlife, and recreation mitigation and
    conservation projects authorized in title III ($1.8 million) and to
    complete mitigation measures committed to in pre-1992 BOR planning
    documents ($200,000), all of which are necessary to allow CUP
    operations.
        Finally, the request includes $2.5 million for the program office
    for endangered species recovery and operation and maintenance costs
    associated with instream flows and fish hatchery facilities ($954,000)
    and for program administration ($1.6 million).

                                   CONCLUSION

        Thank you for the opportunity to testify on behalf of the
    President's fiscal year 2012 budget request for the Department of the
    Interior. I want to reiterate my appreciation for the long-standing
    support of this subcommittee. This budget has fiscal discipline and
    restraint, but it also includes forward looking investments. We have a
    tremendous opportunity to improve the future for all generations with
    wise investments in healthy lands, clean waters and expanded energy
    options.
        I look forward to working with you to implement this budget. This
    concludes my overview of the fiscal year 2012 budget request for the
    Department of the Interior. I am happy to answer any questions that you
    may have.

        Senator Feinstein. Thank you very, very much.
        General, I would like to begin with the Harbor Maintenance
    Trust Fund if I might. It is my understanding that this fund
    has a significant surplus and that the budget request states
    that the administration will be making a proposal concerning
    the fund. As I understand it, this proposal will allow other
    agencies that are conducting port-related activities to charge
    those activities to the trust fund. Is that correct? Could you
    explain this proposal?
        General Van Antwerp. Senator, I will take a stab at that
    and then turn to my policy partner here to address the other
    part.
        First of all, you are absolutely correct that there is a
    large amount in the fund, probably estimated at around $6
    billion.
        Senator Feinstein. Excuse me.
        General Van Antwerp. Yes, ma'am.
        Senator Feinstein. I left out Commissioner Connor, and it
    was truly an oversight. Why do you not finish with that, if it
    is agreeable? Then, Commissioner Connor, I really apologize.
        General Van Antwerp. We were smiling at each other. I
    thought you let him off the hook. We want to hear from him. I
    will just conclude this one part about the Harbor Maintenance
    Trust Fund.
        Generally in a given year, we get about $1.4 billion in
    receipts, and we have budgeted this year along the lines of
    $750 million from the trust fund.
        And I will let Ms. Darcy take the policy part of this, if
    that is okay.
        Senator Feinstein. Okay, fine.
        Ms. Darcy. Would you like me to finish now, Senator?
        Senator Feinstein. Well, where I am going is whether or not
    this rapidly depletes the trust fund.
        Ms. Darcy. Well, the trust fund, as the General said, gets
    about $1.4 billion annually; those funds currently are in the
    Treasury even though all of the funds that come in must be
    appropriated. And for COE, we get about $783 million
    appropriated from that annual revenue stream in our annual
    appropriations. So the balance is in the Treasury and the rest
    of its use is determined by the administration and by the
    Congress.
        Senator Feinstein. It is my understanding that the budget
    proposal does not provide for full authorized widths and depths
    to be maintained at any harbor handled by COE. Maybe you would
    like to come back to this, but my concern is that you will eat
    up the trust fund with other activities. The dredging gets done
    partially and we have some real impediment to trade and
    commerce in our country. So we will come back to that.
        Commissioner Connor.

    STATEMENT OF HON. MICHAEL L. CONNOR, COMMISSIONER
        Mr. Connor. Thank you, Madam Chair. I took no offense. If I
    have learned nothing else in this job, it is sometimes the less
    said the better.
        So I thank you for your kind words and I thank you and the
    members of the subcommittee for your support of BOR, and I
    appreciate the opportunity to discuss the President's 2012
    request.
        Overall, BOR's budget reflects a comprehensive set of
    actions and initiatives that support BOR's mission. The budget
    continues to emphasize working smarter to address the water
    needs of a growing population. Certainty and sustainability are
    primary goals with respect to the use of water resources that
    require BOR to take action on many fronts, and our budget
    proposal was developed with that principle in mind.
        I should note that our efforts to work smarter include an
    array of partnerships with COE, from the Joint Dam Safety and
    Flood Protection Project at Folsom Dam to our sustainable
    hydropower initiative. In these tight budget times, combining
    our resources with those of COE will help bring value to the
    American taxpayer.
        The fiscal year 2012 budget request for BOR focuses on six
    priorities which I want to touch briefly on in my remaining
    time, and I will avoid those areas already discussed.
        Number 1, infrastructure. Overall, our budget continues to
    support the need to maintain infrastructure in a safe operating
    condition while addressing the myriad of challenges facing
    water users in the West. Approximately 51 percent of our water
    and related resources budget, or $407 million, is dedicated to
    operation, maintenance, and rehabilitation activity. These
    activities include the dam safety program, site security
    program, and RAX, which is shorthand for replacements,
    additions, and extraordinary maintenance.
        As already noted, a second priority is the WaterSMART
    program. A specific aspect that I want to highlight is that we
    have established a priority goal for approving and funding
    actions to increase the available water supply for
    agricultural, municipal, industrial, and environmental uses in
    the Western United States by 490,000 acre-feet by the end of
    2012. WaterSMART concentrates on expanding and stretching
    limited water supplies in the West to reduce conflict,
    facilitate solutions to complex water issues, and meet the
    needs of expanding municipalities, the environment, and
    agriculture. Conservation and efficient management are central
    to the creative solutions needed in the arid West.
        Ecosystem restoration is the third priority area. In order
    to meet BOR's mission goals of sustainably producing power and
    delivering water, we must continue to focus on the protection
    and restoration of the aquatic and riparian ecosystems affected
    by our operations. Ecosystem restoration involves a large
    number of activities, including our Endangered Species Recovery
    programs.
        Twenty to 25 percent of BOR's 2012 budget is allocated to
    activities in support of ecosystem restoration. This amount
    includes the request for operating, managing, and improving
    California's Central Valley Project, or CVP. CVP-related
    funding will support completion of the Red Bluff pumping plant
    and fish screen project on the Sacramento River, the Trinity
    River, and the San Joaquin River restoration programs, and
    other actions to protect and enhance California's Bay-Delta
    region.
        Our budget request also supports ongoing implementation of
    the Lower Colorado River Multi-species Program, the Platte
    River Endangered Species Recovery Program, the Upper Colorado
    and San Juan River Endangered Fish Programs.
        In addition, funding requested for the Columbia and Snake
    River Salmon Recovery Program will implement required
    biological opinion actions associated with the Federal Columbia
    River power system.
        Finally, funding is also sought for the Klamath, Middle Rio
    Grande, and Yakima projects to support extensive initiatives to
    address the competing demands in those basins.
        Cooperative landscape conservation and renewable energy
    production, a fourth area of focus, are departmental
    initiatives in which BORis actively engaged. As a threshold
    matter, we are developing and implementing approaches to
    understand and effectively adapt to the risks and impacts of
    climate change on western water. As you know, Madam Chair,
    better than anybody, the future protections of decreasing flows
    in the Colorado River and reduced snowpack in the Sierra Nevada
    Mountains have already caused Californians to actively begin
    implementing local and regional solutions to the threats to
    their water supplies and the environment. Other areas of the
    country are starting to follow suit.
        Through our Basin Studies program and implementation of the
    Secure Water Act, BOR is aggressively trying to assist in
    acquiring the data and improving the science related to future
    projections of water supplies so that effective adaptation
    strategies can be developed and implemented. In 2012, the Basin
    Studies program will continue west-wide risk assessments
    focusing on the threats to water supplies from climate change
    and other sources and will coordinate responsive actions with
    the Department's Landscape Conservation Cooperatives.
        BOR's science and technology program will also continue
    research that targets improved capability for managing water
    resources in the face of climate change, invasive species
    issues, as well as integrating renewable energy and energy-
    efficiency activities into our water operations.
        A fifth initiative is very important to the administration
    and that is our longstanding commitment to the Secretary's goal
    to strengthen tribal nations. Assistant Secretary Castle has
    already mentioned our support for the Indian water rights
    programs. BOR is going to begin a number of implementation
    activities this year in support of the recently enacted four
    settlements, as well as continuing activities with respect to
    other Indian water rights settlements.
        I should note that we have requested $36 million for rural
    water projects which also support a number of tribal nations.

                               PREPARED STATEMENT

        Madam Chair, in conclusion, we appreciate again your
    support for BOR and the support of the subcommittee, and I will
    answer questions at the appropriate time.
        [The statement follows:]

                    Prepared Statement of Michael L. Connor

        Thank you Madam Chair, Senator Alexander, and members of this
    subcommittee for the opportunity to discuss with you the President's
    fiscal year 2012 budget request for the Bureau of Reclamation (BOR).
    With me today is Bob Wolf, Director of Program and Budget.
        I appreciate the time and consideration this subcommittee gives to
    reviewing and understanding BOR's budget and its support for the
    program. BOR works hard to prioritize and define our program in a
    manner that serves the best interest of the public.
        Our fiscal year 2012 request continues support for activities that,
    both now and in the future, will deliver water and generate hydropower,
    consistent with applicable State and Federal law, in an environmentally
    responsible and cost-effective manner. Overall, our goal is to promote
    certainty, sustainability, and resiliency for those who use and rely on
    water resources in the West. Success in this approach will help ensure
    that BOR is doing its part to support the basic needs of communities,
    as well as providing for economic growth in the agricultural,
    industrial, and recreational sectors of the economy. In keeping with
    the President's pledge to freeze spending and focus on deficit
    reduction, this budget reflects reductions and savings where possible.
    Although the 2012 budget request allows BOR to fulfill its core
    mission, essential functions have been trimmed and economized wherever
    possible.
        The budget continues to emphasize working smarter to address the
    water needs of a growing population and assisting States, tribes, and
    local entities in solving contemporary water resource challenges. It
    also emphasizes the operation and maintenance of BOR facilities in a
    safe, efficient, economic, and reliable manner; assuring systems and
    safety measures are in place to protect the public and BOR facilities.
    Funding for each program area down to the individual projects within
    BOR's request is based upon adherence to administration, departmental,
    and BOR priorities. BOR is responsible for the oversight, operation,
    and maintenance of major Federal infrastructure that is valued at $87.7
    billion in current dollars. Key areas of focus for fiscal year 2012
    include Water Conservation, Landscape Conservation Cooperatives and
    Renewable Energy, Ecosystem Restoration, Youth Employment, supporting
    tribal nations and maintaining infrastructure. Recognizing the budget
    challenges facing the Federal Government as a whole, BOR will continue
    its efforts to partner with other Federal agencies such as the U.S.
    Army Corps of Engineers (COE), Department of Energy (DOE), and the
    Natural Resources Conservation Service, to maximize the efficiency by
    which we implement our programs.
        BOR's 2012 budget request is $1 billion, which includes $53.1
    million for the Central Valley Project Restoration Fund (CVPRF). This
    request is offset by discretionary receipts in the CVPRF, estimated to
    be $52.8 million. The request for permanent appropriations in 2012
    totals $194.5 million. Overall, BOR's 2012 budget is a responsible one
    and consistent with the administration's goal of fiscal sustainability.
    BOR will still be making strategic investments that provide a strong
    foundation to meet water resources challenges across the West.

                  bor deg.WATER AND RELATED RESOURCES

        The 2012 budget request for Water and Related Resources, BOR's
    principal operating account, is $805.2 million, a decrease of $108.4
    million from the 2011 request.
        The request includes a total of $398.5 million for water and
    energy, land, and fish and wildlife resource management and development
    activities. Funding in these activities provides for planning,
    construction, water conservation activities, management of BOR lands
    including recreation, and actions to address the impacts of BOR
    projects on fish and wildlife.
        The request also provides a total of $406.7 million for water and
    power facility operations, maintenance, and rehabilitation activities.
    BOR emphasizes safe, efficient, economic and reliable operation of
    facilities, ensuring systems and safety measures are in place to
    protect the facilities and the public. Providing the funding needed to
    achieve these objectives continues to be one of BOR's highest
    priorities.

     bor deg.HIGHLIGHTS OF THE FISCAL YEAR 2012 REQUEST FOR WATER
                             AND RELATED RESOURCES

        I would like to share with the subcommittee several highlights of
    the BOR budget including an update on the WaterSMART (Sustain and
    Manage America's Resources for Tomorrow) Program and Interior's
    establishment of a Priority Goal target to enable capability to
    increase available water supply for agricultural, municipal,
    industrial, and environmental uses in the Western United States by
    490,000 acre-feet by the end of 2012.
        WaterSMART Program.--The request focuses resources on the
    Department of the Interior's WaterSMART program. The program
    concentrates on expanding and stretching limited water supplies in the
    West to reduce conflict, facilitate solutions to complex water issues,
    and to meet the growing needs of expanding municipalities, the
    environment, and agriculture.
        BOR proposes to fund the rebased WaterSMART program at $58.9
    million, $11 million below 2011 levels. The three ongoing WaterSMART
    programs include:
      --the WaterSMART Grant program funded at $18.5 million;
      --Basin Studies funded at $6 million; and
      --the title XVI Water Reclamation and Reuse program funded at $29
            million.
        The rebased program adds the existing Water Conservation Field
    Services program, funded at $5.1 million, and participation by BOR in
    the Cooperative Watershed Management program, funded at $250,000. This
    is a joint effort with the USGS.
        Other significant programs and highlights include:
          Ecosystem Restoration.--In order to meet BOR's mission goals of
            securing America's energy resources and managing water in a
            sustainable manner for the 21st century, a part of its programs
            must focus on the protection and restoration of the aquatic and
            riparian environments affected by its operations. Ecosystem
            restoration involves a large number of activities, including
            BOR's Endangered Species Act recovery programs, which are
            required in order to continue project operations and directly
            address the environmental aspects of the BOR mission.
        The 2012 request provides $154.6 million for operating, managing
    and improving California's Central Valley Project (CVP). This amount
    supports Ecosystem Restoration including $34.8 million for the Red
    Bluff Pumping Plant and Fish Screen within the CVP, Sacramento River
    Division, which will be constructed to facilitate passage for
    threatened fish species, as well as providing water deliveries. The
    funding for the CVP also includes $10.5 million for the Trinity River
    Restoration program and $3 million from the CVP Restoration Fund which
    includes development of a comprehensive monitoring and adaptive
    management program for fishery restoration and construction of channel
    rehabilitation projects at various sites along the Trinity River.
        The request includes $26 million for Lower Colorado River
    Operations to fulfill the role of the Secretary as water master for the
    Lower Colorado River and implementation of the Lower Colorado River
    Multi-Species Conservation (MSCP) program which provides long-term
    Endangered Species Act compliance for the operations. Of this amount,
    $18.3 million for the MSCP program will provide quality habitat to
    conserve populations of 26 species.
        The budget requests $20 million for other Endangered Species Act
    Recovery Implementation programs, including $11 million in the Great
    Plains Region to implement the Platte River Endangered Species Recovery
    Implementation program. It also includes $6.2 million for the Upper
    Colorado and San Juan River Endangered Fish Recovery programs. This
    funding will continue construction of a system that automates canal
    operations to conserve water by matching river diversions with actual
    consumptive use demands and redirecting the conserved water to improve
    instream flows. Additionally, the Columbia/Snake River Salmon Recovery
    program funding of $17.8 million will be used for implementation of
    required Biological Opinion actions including extensive hydro actions,
    plus tributary habitat and hatchery initiatives.
        The fiscal year 2012 budget includes $18.6 million for the Klamath
    project, which supports studies and initiatives to improve water
    supplies to meet the competing demands of agricultural, tribal,
    wildlife refuge, and environmental needs in the Klamath River Basin.
        No funding is requested for the Klamath Dam Removal and
    Sedimentation Studies. These studies are being completed with funds
    previously appropriated and will be used to inform a Secretarial
    Determination in 2012 as to whether removing PacifiCorp's four dams on
    the Lower Klamath River is in the public interest and advances
    restoration of the Klamath River fisheries. The studies and Secretarial
    Determination are being carried out pursuant to an agreement with
    PacifiCorp and the States of California and Oregon.
        The fiscal year 2012 budget includes $23.6 million for the Middle
    Rio Grande project. Funds support the acquisition of supplemental non-
    Federal water for Endangered Species Act efforts and low flow
    conveyance channel pumping into the Rio Grande during the irrigation
    season. Further, funding is used for recurring life-cycle river
    maintenance necessary to ensure uninterrupted, efficient water delivery
    to Elephant Butte Reservoir, reduced risk of flooding, as well as
    delivery obligations to Mexico.
        The Yakima River Basin Water Enhancement Project request is $8.9
    million, which will continue funding grants to the Benton and Roza
    Irrigation Districts and Sunnyside Division Board of Control, to
    implement conservation measures and monitor the effects of those
    measures on the river diversions.
        Cooperative Landscape Conservation and Renewable Energy.--BOR is
    actively engaged in developing and implementing approaches to
    understand, and effectively adapt to, the risks and impacts of climate
    change on western water management. The Basin Studies Program is part
    of Interior's integrated strategy to respond to climate change impacts
    on the resources managed by the Department, and is a key component of
    the WaterSMART Program. In 2012, the Basin Studies Program will
    continue West-wide risk assessments focusing on the threats to water
    supplies from climate change and other factors and will be coordinated
    through the Department's Landscape Conservation Cooperatives (LCCs).
    BOR will take the lead responsibility for establishing and coordinating
    work at the Desert and Southern Rockies LCCs. Included within BOR's
    Science and Technology program is water resources research targeting
    improved capability for managing water resources under multiple drivers
    affecting water availability, including climate change. This research
    agenda will be collaborated and leveraged with capabilities of the
    Interior Climate Science Centers.
        BOR is also working in partnership with DOE and COE in identifying
    opportunities to address the President's clean-energy goals through the
    development of new sustainable hydropower capacity as well as
    integrating renewable energy in our operations. The partnership with
    DOE and its Power Marketing Administrations will also assess climate
    change impacts on hydropower generation.
        Supporting Tribal Nations.--BOR has a long-standing commitment to
    realizing the Secretary's goal to strengthen tribal nations. Fiscal
    year 2012 continues support through a number of BOR projects ranging
    from endangered species restoration to rural water and implementation
    of water rights settlement actions.
        The request includes $12.8 million for the Animas-La Plata project
    to continue constructing components of the Navajo Nation Municipal
    Pipeline and filling Lake Nighthorse as the project nears completion.
        The fiscal year 2012 BOR budget requests $35.5 million for on-going
    authorized rural water projects. The projects that benefit tribal
    nations include Mni Wiconi, the rural water component of the Garrison
    Diversion Unit, Fort Peck Reservation/Dry Prairie, Jicarilla Apache
    Reservation, and Rocky Boys/North Central Montana. One other rural
    water project that does not directly affect tribes is the Lewis and
    Clark Project. Funding for the Perkins County Project is complete. The
    first priority for funding rural water projects is the required O&M
    component, which is $15.3 million for fiscal year 2012. For the
    construction component, BOR allocated funding based on objective
    criteria that gave priority to projects nearest to completion and
    projects that serve on-reservation needs.
        The request includes $7 million for the Native American Affairs
    program to provide technical support for Indian water rights
    settlements and to assist tribal governments to develop, manage and
    protect their water and related resources. The Columbia/Snake River
    Salmon Recovery, Klamath, Central Valley Project Trinity River
    Restoration, Yakima and Yakima River Basin Water Enhancement Projects
    mentioned above under Ecosystem Restoration benefit tribal nations.
    Also, the newly established Indian Water Rights Settlement Account
    discussed below supports tribal nations.
        Youth Employment.--To meet the Secretary's challenge to achieve the
    Priority Goal for youth employment, BOR is working hard to engage,
    educate, and employ our Nation's youth in order to help develop the
    future stewards of our lands. Secretary Salazar challenged the Interior
    Bureaus to increase employment of youth between the ages of 15 and 25
    in natural and cultural resource positions. Last year, BOR began
    working with youth conservation corps to hire youth and expose them to
    the great work that it does. We continue to use all hiring authorities
    available to bring young people in through internships, crew work, and
    full time positions.
        Aging Infrastructure.--Through BOR's continued emphasis on
    preventive maintenance and regular condition assessments (field
    inspections and reviews), the service life of many BOR assets and
    facilities have been extended, thereby delaying the need for
    significant replacements and rehabilitation efforts, including the
    related funding needs. Although BOR and its project beneficiaries have
    benefited greatly from this preventive maintenance, we recognize that
    as assets and facilities age, they require an increased amount of
    maintenance. Sometimes this requires more frequent preventive
    maintenance, and, in other situations, significant extraordinary
    maintenance, rehabilitations, or replacements may be required.
        It is important to note that much of the Operation and Maintenance
    (O&M) funding responsibilities of BOR's assets lies with our project
    beneficiaries and those operating entities that operate and maintain
    federally owned transferred works. For some operating entities and
    project beneficiaries, rehabilitation and replacement needs may exceed
    available resources. In particular, many smaller irrigation or water
    conservancy districts are unable to fund these needs in the year
    incurred absent long-term financing assistance. To address this issue,
    the administration is currently exploring strategies for helping these
    entities to rehabilitate these facilities. We are also exploring
    potential utilization of the authority provided under Public Law 111-11
    that would allow extended repayment of extraordinary (nonroutine)
    maintenance costs on project facilities. Water users are currently
    required by Federal reclamation law to pay these costs, which are often
    substantial, in advance.
        BOR's fiscal year 2012 proposed budget is $40.8 million in
    appropriations for various projects for Replacements, Additions, and
    Extraordinary Maintenance (RAX) activities where BOR is directly
    responsible for daily O&M. This request is central to mission
    objectives of operating and maintaining projects to ensure delivery of
    water and power benefits. BOR's RAX request is part of its overall
    Asset Management Strategy that relies on condition assessments,
    condition/performance metrics, technological research and deployment,
    and strategic collaboration to continue to improve the management of
    its assets and deal with its aging infrastructure challenges. This
    amount represents only the fiscal year 2012 request for discretionary
    appropriations. Additional RAX items are directly funded by revenues,
    customers, or other Federal agencies.
        The Bonneville Power Administration will continue to provide up-
    front financing of power operation and maintenance and for major
    replacements and additions for the power plants at the Boise, Columbia
    Basin, Hungry Horse, Minidoka, Rogue River, and Yakima projects. In the
    Great Plains (GP) Region, BOR, Western Area Power Administration, and
    COE have entered into an agreement which enables the customers to
    voluntarily direct fund power RAX items. A long-term funding agreement
    with the customers for the Parker-Davis Project on the Colorado River
    was executed in fiscal year 1999. Fiscal year 2012 costs of operation,
    maintenance and replacement for this project will be 100 percent up-
    front funded by the customers. To date, the Central Valley Project
    power O&M program is funded 100 percent by the customers, in addition
    to funding selected RAX items. BOR will continue to explore ways to
    reduce the Federal cost of its projects and programs.
        A total of $83.7 million is requested for BOR's Safety of Dams
    program, which includes $63.6 million directed to dam safety corrective
    actions; of that, $27.5 million is for work at Folsom Dam. Funding also
    includes $18.5 million for safety evaluations of existing dams and $1.6
    million to oversee the Interior Department's Safety of Dams program.
        BOR's request for Site Security is $25.9 million to ensure the
    safety and security of the public, BOR's employees, and key facilities.
    This funding includes $6.9 million for physical security upgrades at
    high-risk critical assets and $19.1 million to continue all aspects of
    bureauwide security efforts including law enforcement, risk and threat
    analysis, personnel security, information security, risk assessments
    and security-related studies, and guards and patrols.
        BOR continues efforts to reach agreements with non-Federal and
    Federal partners to share in the cost of water resource management and
    development. Cost-sharing of 50 percent for construction and
    rehabilitation of recreation facilities at various BOR reservoirs will
    continue. Additionally, BOR's current planning program seeks 50 percent
    cost-sharing on most studies. This reflects BOR's emphasis on
    partnerships for water management initiatives.

                bor deg.INDIAN WATER RIGHTS SETTLEMENTS

        On December 8, 2010 the President signed the Claims Resolution Act
    of 2010 that included four water settlements. These settlements resolve
    longstanding and disruptive water disputes, provide for the
    quantification and protection of tribal rights, and will deliver clean
    water to the Pueblos of Taos, Nambe, Pojoaque, San Ildefonso, and
    Tesuque in New Mexico, the Crow Tribe of Montana, and the White
    Mountain Apache Tribe of Arizona. In order to accomplish this, the act
    provides various mechanisms and funding structures designed for both
    construction and for the tribes to use to manage water systems
    following construction. The primary responsibility for developing water
    infrastructure under these settlements was given to BOR. Mandatory
    funding was provided to both BIA and BOR in 2011 for a portion of the
    funds established under the act. We anticipate that BOR will begin
    expending some of this mandatory funding to work with all parties to
    begin implementing these settlements.
        The four Indian water rights settlements will provide water
    supplies and offer economic security for the tribes and pueblos
    described above. The agreements will build and improve reservation
    water systems, rehabilitate irrigation projects, construct a regional
    multi-pueblo water system, and codify water-sharing arrangements
    between Indian and neighboring communities. Construction will take
    place over time and annual funding requirements will vary from year to
    year. Notwithstanding the availability of some level of mandatory
    funding, discretionary appropriations will still be necessary. BOR is
    requesting $26.7 million in 2012 for the initial implementation of
    these four settlements.
        BOR is establishing the Indian Water Rights Settlements account to
    assure continuity in the construction of the authorized projects and to
    highlight and enhance transparency in handling these funds. In
    establishing this account, BOR will also request $24.8 million for the
    Navajo-Gallup Water Supply project (title X of Public Law 111-11) in
    order to have major current funding for BOR's Indian Water Rights
    Settlements treated in the Claims Resolution Act in a single account.
        The Navajo-Gallup Water Supply Project will provide reliable and
    sustainable municipal, industrial, and domestic water supplies from the
    San Juan River to the Navajo Nation including:
      --the Window Rock, Arizona area;
      --the city of Gallup, New Mexico; the Navajo Agricultural Products
            Industry; and
      --the southwest portion of the Jicarilla Apache Nation Reservation.
        The total request for BOR for Indian Water Rights Settlements in
    2012 is $51.5 million in discretionary funding and $60 million in
    permanent funds.

                   bor deg.POLICY AND ADMINISTRATION

        The 2012 budget request for the Policy and Administration
    appropriation account, the account that finances BOR's central
    management functions, is $60 million or 6 percent of the total request,
    a reduction of $1.2 million from the 2011 request. This reduction
    reflects the impact of the pay freeze and the Administrative Cost
    Savings discussed below.

          bor deg.ADMINISTRATIVE COST SAVINGS AND MANAGEMENT
                                  EFFICIENCIES

        The 2012 budget request includes reductions that reflect the
    Accountable Government Initiative to curb nonessential administrative
    spending in support of the President's commitment on fiscal discipline
    and spending restraint. In accordance with this initiative, BOR's
    budget includes $5.8 million in savings in 2012 against actual 2010
    expenditures in the following activities: travel and transportation of
    persons, transportation of things, printing and reproduction, and
    supplies and materials. Actions to address the Accountable Government
    Initiative and reduce these expenses build upon management efficiency
    efforts proposed in 2011 totaling $3.9 million in travel and
    relocation, Information Technology, and strategic sourcing and bureau-
    specific efficiencies totaling $1.3 million.

            bor deg.CENTRAL VALLEY PROJECT RESTORATION FUND

        The 2012 budget includes a request of $53.1 million for the CVPRF.
    This budget request is offset by collections estimated at $52.8 million
    from mitigation and restoration charges authorized by the Central
    Valley Project Improvement Act. The request considers the effects of
    the San Joaquin River Restoration Settlement Act (Public Law 111-11,
    March 30, 2009) which (beginning in 2010) redirects certain fees,
    estimated at $5.6 million in fiscal year 2012, collected from the
    Friant Division water users to the San Joaquin River Restoration Fund.

              bor deg.SAN JOAQUIN RIVER RESTORATION FUND

        The fiscal year 2012 budget also reflects the settlement of Natural
    Resources Defense Council v. Rodgers. BOR proposes $9 million in
    discretionary funds into this account, which was established by the San
    Joaquin River Restoration Settlement Act. Under the Settlement, the
    legislation also provides for approximately $2 million in annual
    appropriations for the Central Valley Project Restoration Fund for this
    purpose, as well as mandatory funds. The Fund seeks to provide a
    variety of physical improvements within and near the San Joaquin River
    within the service area of the Friant Division long term contractors to
    achieve the restoration and water management goals. These funds are
    important for BOR to meet various terms of the settlement that brought
    water contractors, fishery advocates, and other stakeholders together
    to bring to an end 18 years of contentious litigation.

             bor deg.CALIFORNIA BAY-DELTA RESTORATION FUND

        The 2012 budget requests $39.7 million for CALFED, pursuant to the
    CALFED Bay-Delta Authorization Act. The request focuses on the Bay-
    Delta Conservation Plan and interagency science efforts to address
    short- and long-term water resource issues. Other activities include a
    renewed Federal/State partnership, Smarter Water Supply and Use, and
    addressing the degraded Bay-Delta Ecosystem actions which include
    Federal participation in the Bay Delta Conservation Plan and
    interagency science efforts to address short- and long-term water
    resource issues based on the Interim Federal Action Plan. The CALFED
    Bay-Delta Program was established in May 1995 to develop a
    comprehensive long-term plan to address the complex and interrelated
    problems in the Delta region, tributary watersheds, and delivery areas.
    The Program's focus is on conserving and restoring the health of the
    ecosystem and improving water management, including Federal
    participation in the Bay Delta conservation Plan.

              bor deg.FISCAL YEAR 2012 PLANNED ACTIVITIES

        BOR's fiscal year 2012 goals are directly related to fulfilling
    contractual requests to deliver water and power. Our goals also address
    a range of other water supply needs in the West, playing a significant
    role in restoring and protecting freshwater ecosystems consistent with
    applicable State and Federal law, enhancing management of our water
    infrastructure while mitigating for any harmful environmental effects,
    and understanding and responding to the changing nature of the West's
    limited water resources. It should be emphasized that in order to meet
    BOR's mission goals of securing America's energy resources and managing
    water in a sustainable manner for the 21st century, a part of BOR's
    programs must focus on the protection and restoration of freshwater
    ecosystems.
        By the end of fiscal year 2012, BOR will enable capability to
    increase available water supply for agricultural, municipal,
    industrial, and environmental uses in the Western United States by
    490,000 acre feet through its conservation-related programs, such as
    water reuse and recycling (title XVI), and WaterSMART grants. BOR will
    maintain dams and associated facilities in good condition to ensure the
    reliable delivery of water. It will maximize the percent of time that
    its hydroelectric generating units are available to the inter-connected
    western electrical system during daily peak demand periods.
        Moreover, the fiscal year 2012 budget request demonstrates BOR's
    commitment to meeting the water and power needs of the West in a
    fiscally responsible manner. This budget continues BOR's emphasis on
    managing those valuable public resources. BOR is committed to working
    with its customers, States, tribes, and other stakeholders to find ways
    to balance and provide for the mix of water resource needs in 2012 and
    beyond.

                                   CONCLUSION

        Madam Chair, please allow me to express my sincere appreciation for
    the continued support that this subcommittee has provided BOR. This
    completes my statement. I would be happy to answer any questions that
    you may have at this time.

        Senator Feinstein. Thank you very much.

                 COE deg.HARBOR MAINTENANCE TRUST FUND

        I want to go back to the Harbor Maintenance Trust Fund
    because it seems to me that there is a catch 22, and that is
    that the trust fund is going to be used for other things and
    that there are no authorized widths or depths for dredging.
    Therefore, ports will be haphazardly dredged. I am sorry
    Senator Graham is not here because he was interested in the
    Port of Charleston. I do not know how you will select those
    ports that get dredging versus those that do not because there
    are no earmarks, and I think that is going to make it very
    difficult in the COE budget to know what you do and what you do
    not do. And so I am particularly disturbed by what I see coming
    to really handcuff the Harbor Maintenance Trust Fund.
        Could you respond to that?
        General Van Antwerp. First of all, Senator, I would like to
    say that the way that we prioritize our dredging is we look for
    a number of factors. We put them through a sieve of
    prioritization. What is the shoaling that happens in there?
    What is the commercial nature of that port or harbor?
        As kind of an overview, we have 59 ports and harbors that
    carry about 90 percent of the waterborne cargo of this country.
    It is about $1.4 trillion through our ports and harbors. So
    there are some that are what we call very high-commercial-use
    harbors.
        We take the navigation or the dredging dollars and spread
    them as well as possible over those with the highest traffic
    that we can. It is not haphazard in the sense that it does not
    have a prioritization scheme to it. It absolutely does. We do
    high use, medium use, and low use.
        Senator Feinstein. Right. You have 59 ports. You have a lot
    of work to do. Why would you want to have other activities take
    money from this trust fund, and what would those other
    activities be?
        Ms. Darcy. Senator, the proposal that is being developed
    within the administration is looking at a number of things. It
    has not been developed yet. Some examples of things that might
    be looked at to receive some of this funding would be increased
    security needs at ports. We are trying to look at the Nation's
    ports as a whole system and what commercial navigation needs
    there are and what can be provided through the Trust Fund.
        Also, the Trust Fund balance--as you noted, about $1.4
    billion comes in annually, and then that is appropriated. So if
    you were concerned about the depletion of the balance that can
    be managed by the appropriations process.
        Senator Feinstein. Well, let me just say I hope so. You
    know, we have the largest port in the Nation. Forty-five
    percent of the container traffic comes in and out of the Port
    of LA--Long Beach. If you are not dredging that port to its
    fullest, if you scrimp on that, the whole thing shuts down. And
    so I do not understand using this money for security dollars.
    It seems to me keeping these ports viable is really an
    important mission, and it in itself absorbs all the money.
        Ms. Darcy. When developing the proposal, all of those
    things will be considered. As I said, the proposal is still
    under development within the administration, and we will be
    considering these and many other factors.
        Also, whatever proposal we develop will have to be
    developed with all of you because it would require legislative
    changes. So the Finance Committee would have to be involved, as
    well as the authorizing and appropriations committees.
        Senator Feinstein. How much surplus is in the trust fund?
        Ms. Darcy. I think the current estimate is about $5.8
    billion.
        Senator Feinstein. Five point eight billion dollars. And
    how much will be used on port dredging this year?
        Ms. Darcy. The President's request is for $758 million.
        Senator Feinstein. That is all.
        Ms. Darcy. Yes.
        Senator Feinstein. I am glad Senator Graham just came back
    because what we just learned was that there are $7 billion in
    the port trust fund for dredging, but only $700 million-plus is
    being put forward by the administration for dredging.
        I guess what I am telling you as chairman--I do not know if
    others would agree with it--but that is not the right thing to
    do. You have to keep these ports viable. So if you have a
    response to that, I would appreciate it. If you do not, that is
    okay too.
        Ms. Darcy. The proposal that is being developed is looking
    at the commercial ports from all of the needs, including
    navigation and including keeping them dredged at a viable
    depth.
        Senator Graham. Madam Chairman, could I just----
        Senator Feinstein. Yes, please. Go ahead, Senator.
        Senator Graham. As I understand it, there is a difference
    between maintaining a port, dredging, and actually a new start
    where you would deepen the harbor. Is that correct?
        Ms. Darcy. Yes, Sir.
        Senator Graham. So I think I understand a little bit about
    their dilemma. Once you get a harbor at a certain depth, there
    is a trust fund to keep it dredged at that depth. What we are
    talking about in Charleston and Savannah and other places is
    actually going lower than the approved level, which would
    probably be a different exercise financially, is that correct
    General.
        General Van Antwerp. That is correct.
        Senator Graham. I have learned more about this than I ever
    wanted to learn.
        General Van Antwerp. You know a lot about this, Senator.
        Senator Graham. Yes, the hard way. I just want 40,000
    bucks, $40,000. I am really cheap.
        General Van Antwerp. To go deeper in a port, it is largely
    based on the benefit-cost ratio, its commercial use, and its
    national economic benefit. This year, in new starts we are at
    2.5 benefit-to-cost ratio for inclusion in the budget.
        Senator Feinstein. Trust me. He will want more than
    $40,000. The $40,000 is just a study.
        All right, I think I have consumed enough time.
        Senator Alexander.
        Senator Alexander. Thank you, Madam Chair.
        I have actually learned a good bit about the Charleston
    Port as well over the last few days. And I know you have. We
    all feel very well educated about it. But it does not have a
    finer advocate than Senator Graham anywhere in the United
    States.

                       COE deg.CHICKAMAUGA LOCK

        Secretary Darcy, have you ever visited the Chickamauga
    Lock?
        Ms. Darcy. I have not, Senator.
        Senator Alexander. Are you aware of its current condition?
        Ms. Darcy. I have been briefed about its current condition.
    I know that the Chief and the Commanding General from the Great
    Lakes and Ohio River Division have been there, however.
        Senator Alexander. What are your projections about how long
    it can be reliably operated and maintained?
        Ms. Darcy. I am not sure that we have those. Do we,
    General?
        General Van Antwerp. Well, first of all, we think there is
    a low probability of failure right now, but we are watching it
    closely. We have gauges. We are watching that to give pre-
    notification if there is going to be a failure. There is no
    question we are watching the maintenance curve on this and it
    grows and grows every year, and at some point it goes to the
    point that you have got to make the improvements and you must
    fix it.
        Senator Alexander. Well, is it not true that it is in
    danger of a catastrophic failure?
        General Van Antwerp. We feel the probability right now is
    low to moderate.
        Senator Alexander. How much maintenance funding will be
    needed to keep it open over the next 5 or 10 years?
        General Van Antwerp. I would say about $2 million to $3
    million every year. But I could see somewhere in the near term
    that it's going to be about $15 million per year because there
    are some things that are going to have to be done. That is if
    we just stay on the maintenance track, but $2 million to $3
    million probably for the next 5 years each year.
        Senator Alexander. Have you considered asking the Tennessee
    Valley Authority to contribute funds to the replacement of the
    lock?
        General Van Antwerp. Senator, I am not sure if we have had
    the discussion on whether they would want to provide funds for
    that.
        Senator Alexander. Finally, when is work scheduled to
    resume on the project?
        General Van Antwerp. Well, right now we are in the process
    of building the cofferdam. In the fiscal year 2012 budget there
    is zero funding for it. At some point the project would cease
    and we would button it up and then wait for future funding to
    continue.

                  COE deg.INLAND WATERWAY TRUST FUND

        Senator Alexander. Secretary Darcy, we talked a moment ago
    about the Inland Waterway Trust Fund. It is in a little
    different shape, is it not? It does not have much money in it.
        Ms. Darcy. No, it does not.
        Senator Alexander. What does it have?
        Ms. Darcy. I think the current balance that we have in our
    budget request for 2012 coming from the Trust Fund is $77
    million.
        Senator Alexander. Is it true that that is about enough for
    one project this year?
        Ms. Darcy. It is about enough for maybe three.
        Senator Alexander. Maybe three.
        There was a plan that the commercial users of the Inland
    Waterway Trust Fund worked on and I believe worked on with the
    administration in which they basically worked out a proposal to
    increase the fuel tax on themselves on their own fuel in order
    to put more money into the Inland Waterway Trust Fund so that
    locks like the Chickamauga Dam and other needed projects could
    be done. But it is my understanding that you wrote a letter to
    Congressman Oberstar disagreeing with the plan last year.
        Does the administration have its own plan to enhance the
    revenues in the Inland Waterway Trust fund? And when will we
    see the plan if there is such one planned?
        Ms. Darcy. Senator, we are working with the Inland Waterway
    Users Board and the industry to develop a plan to increase the
    funding in the trust fund, as well as looking at ways to
    equitably charge the users in the future.
        Senator Alexander. Well, what was wrong with the plan that
    was rejected last year?
        Ms. Darcy. There were many recommendations and some of them
    shifted the cost share burden to the general Federal taxpayer
    and took it away from the user. So that was one of the major
    objections.
        Senator Alexander. Excuse me. I was talking and I did not
    hear your entire answer.
        Ms. Darcy. There were cost share changes developed that
    would shift a lot of the burden back to the general Federal
    taxpayer as opposed to the direct user.
        Senator Alexander. And when will your proposal be ready for
    us to see?
        Ms. Darcy. I do not know, Senator, hopefully soon.
        Senator Alexander. Well, does ``soon'' mean a matter of a
    few months or a few years or what?
        Ms. Darcy. I think it is in between. It is less than a few
    years and more than a few months.
        Senator Alexander. Well, there is a certain urgency to this
    when you have the users of the waterways, who are agreeable to
    contributing extra dollars to create projects that all of us
    believe are important for new jobs. I think the sooner, the
    better. So I would like to urge you to make it a priority and
    let us see it as soon as possible.
        Ms. Darcy. Yes, Senator.
        Senator Alexander. Thank you.
        Senator Feinstein. Thank you very much, Senator.
        I will read the list. It is Johnson, Landrieu, Cochran,
    Tester, Graham, Collins, Reed, Lautenberg and Murkowski, so
    Senator Johnson.
        Senator Johnson. Thank you, Madam Chairman.
        Commissioner Connor, I am extraordinarily concerned about
    inadequate funding request for ongoing congressionally
    authorized rural water projects. Two of these projects, Mni
    Wiconi and the Lewis and Clark regional water system, are vital
    infrastructure projects in South Dakota. In your budget
    request, the seven authorized drinking water projects would
    receive a total of just $35 million, with $15 million of that
    for operations and maintenance. That leaves about $20 million
    for construction for the projects. My understanding is that
    past BOR analysis shows that it would take $58 million per year
    in construction dollars just to keep up with inflation. The
    math here just does not work.
        Especially for Lewis and Clark, the States of South Dakota,
    Iowa, and Minnesota, as well as the 20 member-cities and rural
    water systems, have prepaid $153.5 million which represents
    99.7 percent of their cost share. They have prepaid their share
    in some cases a decade or more before they will receive water.
    The Federal Government has nearly one-half of its cost sharing
    remaining. The proposed fiscal year 2012 budget only includes
    $493,000 for Lewis and Clark which would not allow for any new
    construction.
        Can you assure these cities and rural water systems that
    the Federal Government is, indeed, committed to finishing this
    important water project in a reasonable time? What is the plan
    for funding authorized water projects beyond this budget,
    because this request takes us and the taxpayers backwards on
    our investment, could you respond to that?
        Mr. Connor. Yes, Sir, Senator Johnson.
        Without a doubt, the rural water program is the program in
    our budget that has taken the biggest decrease in funding this
    year.
        As to your specific question about whether the Federal
    Government is committed to these projects, we are, but it is
    going to be very tough in these tight fiscal times. I say we
    are because we invested more than $950 million in Recovery Act
    funds. We invested $200 million initially in these rural water
    projects, and then recognizing that they were a good
    investment, given ARRA parameters, we allocated another $32
    million toward, I think, five of those projects near the end of
    last year. So we were trying to use those resources as best as
    possible to continue to move those projects out and serve
    additional communities. But in the priority order that we look
    at our budget and the resources we have available this year--
    they are good programs and good projects, but are just running
    short on the funds available.
        We are going to go back and take a look pursuant to the
    2006 Rural Water Act. We owe the Congress a report on the
    status of these projects and how we can look forward toward
    trying to complete them. We are going to get that done this
    summer. We will look at some additional criteria that we may
    want to add, and we will see what we can do as far as looking
    at the resources to try and make more progress in addition to
    the progress that we already made with ARRA funds.
        Senator Johnson. Do you have any suggestions for what the
    20 communities and rural water systems that exist and are using
    99.7 percent of the cost share will do in the future?
        Mr. Connor. Well, we will work with those communities and
    see how in these tight budget times we can make strategic
    investments and phase in incrementally those aspects of the
    project and serve additional people. I recognize that the Lewis
    and Clark project is having significant problems. Our primary
    focus, beyond once we address the operation and maintenance
    obligations that we have, is to try and complete projects, and
    we did complete the Perkins County project in South Dakota and
    we are trying to ensure we can complete the Mni Wiconi project
    in 2013.
        Senator Johnson. Mr. Commissioner, I too am eager to see
    this important project completed, the Mni Wiconi project, and I
    appreciate that BOR has placed a high priority on the project.
    Unfortunately, construction funds are still falling short of
    what is needed to keep the project on pace and overhead and
    contract costs have hindered construction. It is my
    understanding that reduced funding will have an impact on the
    ability to complete this and other projects within their
    statutory timeframes. Will you review the project authorization
    and recent funding levels and work with the Congress to ensure
    that this project is completed as envisioned?
        Mr. Connor. We will certainly work with you. With respect,
    the vast majority of our construction funds proposed for 2012
    are for Mni Wiconi, but we still think that puts us in the area
    of being able to complete our obligations by 2013. But we will
    review that and we will definitely work with you, Sir.
        Senator Johnson. My time has expired. Thank you.
        Senator Feinstein. Thank you very much, Senator Johnson.
        Senator Landrieu.
        Senator Landrieu. Thank you very much.
        Let me begin, Senator Feinstein and Senator Alexander, to
    tell you how much I look forward to working with you on this
    subcommittee. It is a very important subcommittee for our
    Nation and particularly for the State that I represent. In
    Louisiana, we have the opposite challenges of some of the West
    Coast States. We have too much water, not too little water, and
    we are struggling to manage that.
        Let me also add, General Van Antwerp, thank you for your
    leadership and for your guidance as we have designed and built
    some of the most sophisticated levee and flood control systems
    ever constructed in this Nation in the aftermath of the
    catastrophe, the biblical flood that we had when the Federal
    levee system collapsed 5\1/2\ years ago in and around the city
    of New Orleans, and we are on the back end of some of that.
        And for the subcommittee, I want to thank all of you who
    were on the subcommittee before and will continue to serve
    because the $2 billion surge barrier, which is the largest
    surge barrier ever constructed in this Nation's history, is now
    up and operational. And I think we are going to be down there
    celebrating this milestone sometime in June. And I am pleased
    that we took several trips to the Netherlands to see the model
    of some of this technology. And I am pleased to share with the
    subcommittee, that having walked over the surge barrier and
    seen the construction of it in a detailed brief, that you can
    be very proud of the engineering that has gone in.
        Having said all those good things, let me say that there
    are still extraordinary challenges that are reflected in this
    budget. And I know that you are dealing with very limited
    resources. But I want to add my concern. And I have a question
    about this interior waterway trust fund.
        Senator Levin and Senator Hutchison and myself and a few
    others have introduced a bill to attempt, Senator Feinstein and
    others, Senator Alexander, to capture the money coming into
    this trust fund so that it actually can be used for the
    processes in which it was intended, which is dredging and
    maintenance of these ports. I think the chairman is absolutely
    correct that for trade and for jobs, it is just critical.
        So, number one, are you aware of the legislation, Madam
    Secretary? Number 2, is the administration going to support the
    basically capturing of these revenues to maintain these very
    important ports and channels?
        Ms. Darcy. Senator, I am aware of the legislation to keep
    what is coming into the Trust Fund for the navigation purposes
    that it was intended. In our budget, the administration has
    proposed using some of those funds, as you know, for the
    continued maintenance of the navigation channels. However, we
    are looking at using that funding for some other----
        Senator Landrieu. Well, I just want to lay a warning that
    there is a growing number of Senators on both sides of the
    aisle that want the taxes paid by this industry to be used for
    the purposes in which they thought they were being taxed, which
    is the dredging and keeping open of these ports.

                 COE deg.ALLOCATIONS WITHOUT EARMARKS

        I want to ask a question and also make a point that while
    90 percent of the cargo--and the question following up the
    chairman--how will you allocate now that there are no earmarks
    or directives from this subcommittee allowed? And you said we
    will go by a formula. The big cargo ports will get, you know,
    based on how much cargo comes in and out. I just want to remind
    everybody on the subcommittee for the record there are ports
    that are important to the Nation that are not cargo ports. We
    would call them ``energy ports.'' And if they do not stay open,
    nobody gets electricity, oil, gas, natural gas that comes into
    the ports along the gulf coast. The chairman might want to know
    we are not even included in the formula to begin with because
    unless you are a cargo port, you do not even get considered.
        I tried to change that legislatively. You can imagine with
    natural gas coming into the country that port cannot get
    dredging because it is light. It is not heavy and it is not
    cargo. It is gas. It is liquid gas that comes in.
        So this is a very interesting subject, and I just want to
    go on record. Senator Cochran knows some of this because, of
    course, he represents the State of Mississippi which has very
    similar concerns to the State of Louisiana. But that is one
    question.
        And on the second, when we have, General Van Antwerp--my
    last question--a 100-year flood protection which we are trying
    to achieve--the Netherlands protects their people 1 out of
    every 10,000 years. We are protecting our people 1 out of every
    100. So we on the international scale have a ways to go. And I
    know you cannot compare apples to apples there.
        But when we raise the levees to 100 years, my final
    question is, do you have money budgeted to maintain them at
    that, or what happens when there is settlement in those levees,
    because this is going to happen not just in south Louisiana
    along the gulf coast, but around the country. Is any of that
    budgeted in this budget to maintain those levees at the 100-
    year protection?
        General Van Antwerp. Senator, for all the project features,
    once the ribbon is cut, it goes to local responsibility for the
    operation and maintenance of those levees and project features.
        We are considering subsidence and sea level rise over time.
    In fact, we know probably in the next 50 years, many of those
    levees will have to be raised, some due to sea level rise, some
    due to subsidence. So that is in the plan. Of course, that is
    not budgeted 25 years out. For that, we will have to cross that
    bridge when we come to it because of the way we do the
    budgeting. But it is planned for.
        And when we could, we purchased the real estate for, for
    instance, a wider base so that you could add to the height of
    that levee without having to get more real estate. If we could
    do that under the current funding, we did that. We are as ready
    as we can be, but we know we are going to have future
    maintenance of those facilities.
        Senator Landrieu. Thank you.
        Senator Feinstein. Thank you very much, Senator Landrieu.
        Senator Cochran.
        Senator Cochran. Madam Chairman, I am pleased to join you
    in welcoming the panel to our hearing to review the President's
    budget request for the subjects that we are discussing.
        I cannot help but wonder about how we reconcile the
    economic requirements of being a robust exporter of goods and
    services and commodities in the international marketplace with
    reducing the capacity to handle cargo on the Mississippi River
    in its ports and in other transportation modes which would get
    our goods and services to those who are buying what we are
    selling and what we are growing in terms of agriculture
    production in the lower Mississippi River Valley and way
    beyond.
        We have up-to-date information about the fact that $100
    billion in exports is traversing the Mississippi River
    annually. Industries in more than 30 States--we are not talking
    about just Mississippi and Louisiana. We have great interest in
    this subject. But industries in more than 30 States rely on COE
    to help maintain the river at authorized levels and depths.
    Insufficient dredging and an inadequacy of funding for these
    activities would inevitably result in restrictions on ship
    traffic and cargo travel. To put it in perspective, some
    shippers estimate that a 1-foot reduction in depth means a ship
    must reduce its cargo by 1,500 tons.

           COE deg.MISSISSIPPI RIVER AND TRIBUTARIES PROJECT

        The objective of the Mississippi River and Tributaries
    project was to uphold, maintain, and improve the Mississippi
    River system and its levees that contain it. And in face of
    those national interests, the President's budget request for
    the Mississippi River and Tributaries project is $210 million.
    That is $130 million below the fiscal year 2010 discretionary
    budget authority.
        How are you going to cope with that reality? May I ask the
    panel if anybody has any suggestion about what you are going to
    do?
        General Van Antwerp. Well, first of all, Senator, your
    observations are correct. We have 12,000 miles of inland
    waterways that are maintained by COE and it touches really 41
    States in our Union and is so incredibly important. We
    understand that.
        I think what you will see when we have to prioritize is we
    try and keep the depth. What normally happens is that you
    reduce the width first. It means that you cannot have ships
    passing and you have to stage them.
        The other part is to keep the locks open. We have 241 locks
    on our waterways. They are 58.3 years old on average. So the
    maintenance requirements are increasing. We prioritize those by
    the greatest risk. We do treat our waterways as a system. We
    have to keep the whole system open. If we have one lock go
    down, it can impact the whole waterway.
        Senator Cochran. May I also ask another question about the
    Mississippi Yazoo back water project. This is an issue that has
    been around since 1941. The Congress has authorized and funded
    these activities that are connected to this project in the
    lower Mississippi River delta. And we had a recent decision in
    Federal court that canceled a project, in effect, or a decision
    was made not to proceed with the project because of a decision
    made by a Federal court judge in Mississippi.
        This still remains a very troublesome issue to resolve, and
    I bring it up simply because I hope COE and others who are
    interested in this will work with the supporters of the project
    to try to reconcile differences and to come up with an
    alternative that would be satisfactory with COE . I do not have
    any magic solution to suggest. We would be glad to work and
    cooperate with the administration and with others in the
    Congress who are interested in this, but I raise the question
    so we have it as the beginning of another effort.
        Thank you.
        Senator Feinstein. Thank you very much, Senator Cochran.
        Senator Tester, you are next.
        Senator Tester. Yes, thank you, Madam Chair.
        First of all, I want to express my appreciation for you all
    folks being here today. Water is our most valuable resource and
    the management of it is critically important.
        As the questions and the comments have been expressed here
    today, I have got to tell you; you guys are in a tough
    position. I mean, since this Congress started, we have been
    talking about deficit and debt, and we are giving you hell
    because you are not spending enough money. And I think that
    there has to be an awakening here, if we are going to invest in
    infrastructure, that investment means spending money. And I
    will tell you that water, whether it is where it flows into the
    ocean or whether it is at the headwaters in a State like mine,
    is very, very important, and if we do not have the
    infrastructure to manage it, we will not manage it and the
    country will be poorer for it.
        Secretary Darcy, we have visited in the past about the
    great city of Great Falls in Cascade County and a couple levees
    that they have there that were built in 1975. COE has certified
    those levees up until 2009, and the Corps decided not to
    certify any more levees.
        When you were last before the Senate, you told my
    colleague--the senior Senator from Montana--Max Baucus, that
    you would immediately look into the policy whether it should be
    changed, and that is whether FEMA either could certify or COE
    could certify to FEMA standards, one or the other. What have
    you found out?

                      COE deg.LEVEE CERTIFICATION

        Ms. Darcy. You are correct, Senator. I did tell Senator
    Baucus we would look into the policy and we have begun doing
    that. In the past, as you said, we certified levees and used
    Federal funds for that, and since 2008 we have not budgeted for
    that certification. We are looking at whether that is a
    possibility for us in the future.
        Senator Tester. And I will tell you that FEMA gives out the
    Provisionally Accredited Levee agreement. Okay, and they told
    Great Falls here about a month--you either got to sign it or
    forget it. COE has inspected in the past. Is there any
    potential you could harmonize your criteria? Have you done any
    work on that at all?
        Ms. Darcy. We have done some work on it, but to be quite
    honest, it is not harmonized at this point.
        Senator Tester. I mean you fully understand the issue. You
    fully understand that there is not an engineering firm around
    that has an errors and omissions policy big enough that they
    will certify it. I mean, that is really what they have found
    out. And you know what? I think there are a lot of Great Falls,
    Montana up and down the different drainages in this country.
    And I will tell you that for that reason, Senator Baucus and I
    are dropping in legislation that gives COE not only the
    authority but the responsibility to certify those.
        Once again, it may or may not cost money. You may be able
    to do it within your budget. You may need additional funds, but
    the fact is it has got to be done or folks are going to be put
    in flood plains. Businesses are not going to be able to be
    allowed to grow, some of the same things we heard earlier, only
    it just applies to this levee thing.
        The intake dam, for either one of you, General Van Antwerp
    or Secretary Darcy, the work has begun rebuilding intake, and
    it is a rock ramp. I do not know if you are familiar with it or
    not. If you are familiar with it, I will not mess around
    anymore. But since you were here last year, the cost estimate
    jumped more than $100 million. The thing is never going to be
    built if it is $100 million, I will just tell you. Something is
    going to have to happen.
        Can you give me your thoughts on why we had such a jump in
    cost on a project like intake?

               COE deg.YELLOWSTONE INTAKE DIVERSION DAM

        General Van Antwerp. Well, I guess in a few words, it is
    very complicated. I will give you a couple of those
    complications, Senator.
        First of all, the rock ramp at the depth and velocity that
    the pallid sturgeon needed was not working as we thought it
    would. We have had to make modifications. The modeling
    indicated a need for a much flatter side slope than the
    preliminary design. So that is, in a nutshell, the biggest
    piece of this.
        Senator Tester. The word I heard is they are bringing in
    rock from somewhere else.
        General Van Antwerp. Well, the contractor has to bring in
    the rock to do it. Where he purchases it from is up to the
    contractor.
        Senator Tester. And so it is an open-ended contract. I
    mean, if he wants to bring in rock from Maine, we pay for it?
        General Van Antwerp. Well, he has to meet the design
    criteria with the rock he brings in. He has to do it under the
    bid that he proposed. I do not believe this is a cost-plus
    contract.
        Senator Tester. Okay, but what I am saying is we started
    out this project was going to cost--and I cannot remember--$15
    million and now it is up more than $100 million.
        Senator Feinstein. Would you permit me?
        Senator Tester. Yes.
        Senator Feinstein. Why can you not have Montana rock?
        General Van Antwerp. You could if it meets the
    specifications. I think our contractors certainly would go out
    and get it at the best place they could get it for the right
    price. They are on the clock also.
        Senator Tester. I appreciate that, Madam Chairman, because
    that is exactly the question. And I do not know if this is
    factual or not. I am told by the locals that they are bringing
    rock from outside the area when there is rock there that will
    do the job.
        My time has run out, and I am going to check it off to
    people who have been here.
        But the fact is that there has got to be oversight and
    there also has to be some common sense put to the analysis.
    Look, I am all about paddlefish. I love them, but are we saving
    one paddlefish? Are we saving 50 percent of the paddlefish that
    go up the river? What are we getting for that $80 million or
    $90 million or more in additional spending? That is really kind
    of important.
        Before I go, thank you, General, for your service, I very
    much appreciate it. We are going to miss you. Thank you.
        Senator Feinstein. Thank you very much, Senator Tester.
        Senator Collins.
        Senator Collins. Thank you, Madam Chairman. I am very
    pleased that I am next because I feel I need to clarify that
    rock from Maine is not responsible for cost growth from $15
    million to $100 million. We do have outstanding rock in Maine.
        Senator Tester. I hear it is some of the best in the world.
        Senator Collins. It is Great granite, which we would be
    happy to share with your State. But I am positive that is not
    the cause of the problem.
        I do have two Maine-specific issues that I want to discuss
    with our witnesses today.

                        COE deg.KENNEBEC RIVER

        Secretary Darcy, as I am sure you recall, I wrote to you
    last month about a problem with the Kennebec River. And this is
    a very serious problem. I am hearing a lot of serious problems
    today.
        Earlier this year, COE conducted a sweep survey of the
    Kennebec River that concluded that the controlling depth is now
    an alarming 19.7 feet, significantly less than the authorized
    27 feet.
        Now, let me explain to my colleagues why this matters. Bath
    Iron Works, which builds naval destroyers, uses the Kennebec
    River as the avenue for getting the ships to sea. And in
    October, the USS Spruance naval destroyer is scheduled to
    depart Bath Iron Works for its home port in Virginia. The Navy
    is very concerned that the insufficient depth of the Kennebec
    River could cause that destroyer to run aground, and the Navy
    has said that the condition of the river constitutes an
    emergency and that it must be addressed in order to meet the
    scheduled delivery of this military asset. So this is truly a
    real challenge that is worrying to Bath Iron Works and to its
    customer, the Navy.
        I understand that the cost estimate to complete the
    dredging is $1.6 million.
        Complicating the issue, the timing of the dredging is very
    important to the lobster and clamming industries in Maine whose
    peak season is during the summer months, in the month of
    August.
        In fiscal year 2006, it is my understanding that $630,000
    was allocated for dredging activities on the Kennebec, but that
    that money, to my knowledge, has not yet been used for that
    purpose. Obviously, the ability of ships to enter and depart
    Bath Iron Works is of vital importance to our national
    security.
        So I have two questions for you. One, do you expect a
    resolution of this issue in time for the scheduled departure of
    the Navy destroyer that is slated to depart in October? And
    second, is COE working with the local lobster men and clammers
    to minimize the impact on their livelihoods?
        Ms. Darcy. Senator, yesterday I spoke with the Assistant
    Secretary of the Navy on this very issue, and we realize it is
    of vital importance not only to the Navy, but to our national
    security in order to have that ship delivered on time to
    Norfolk. I believe its schedule is September 1 of this year. We
    committed, along with the Assistant Secretary, to work together
    to find the money to get the dredging completed.
        That said, in order to meet the September 1 deadline, we
    have a couple of challenges which you mentioned which include
    the clamming and the lobstering which the peak season is
    August, and it is in August when we would have to dredge. Our
    normal dredging schedule up there is usually between November
    and March. So we are sort of in a bind here.
        We would have to get permits and work with the fishermen
    and lobstermen in order to get a schedule that works for them.
        Senator Collins. I hope that you will work very closely
    with all of the parties, BIW, the Navy, the lobstermen, the
    clammers. It is too bad this was not done this past winter when
    there would not be the impact on the fishing industry and the
    lobstermen and clammers. We also need to accommodate Bath Iron
    Works.
        I know my time has expired. Let me just very quickly say
    that COE met in Maine yesterday concerning the jetty at Camp
    Ellis in Saco, Maine. This is more than 100 years old. It was
    built by COE before there was an understanding of the erosion
    impact of having this jetty. That is another issue that has
    been going on for a long time. Each year I visit and see more
    and more danger to the homes along the shoreline, and I hope we
    can continue to work on that as well. We provided funding and
    there has been some progress, but we have got a long ways to
    go.
        Senator Feinstein. Thank you, Senator Collins.
        Senator Collins. Thank you.
        Senator Feinstein. Senator Graham, you missed your time,
    but I know you are lively and a little spirit every now and
    then would not hurt.
        Senator Collins. And I am boring.
        Senator Graham. No, you are not boring. You are just from
    Maine.
        Senator Graham. You are polite and kind.
        Senator Collins. I will leave it at that then.
        Senator Graham. Yes.
        I was over nominating a judge for the Fourth Circuit, and I
    may be the only guy in the history of the Senate to nominate a
    judge and put a hold on him all at the same time. So it has
    been a strange weekend.
        Secretary Darcy, the Panama Canal is going to be deepened
    in 2014. Is that correct?
        Ms. Darcy. That is the plan, yes, Sir.
        Senator Graham. The plan is to deepen the Panama Canal so
    that super cargo ships can pass through the canal. Is that
    correct?
        Ms. Darcy. Yes.
        Senator Graham. These are ships a lot bigger than we have
    today.
        Ms. Darcy. Many of them will be, yes, Sir.
        Senator Graham. It is going to change shipping as we know
    it.
        Ms. Darcy. I anticipate that.

                   COE deg.FUNDING HARBOR DEEPENING

        Senator Graham. So there are certain ports that are in
    existence today that are going to have to adjust their depth to
    accept these ships. Is that correct?
        Ms. Darcy. Yes.
        Senator Graham. One of them is Charleston.
        Ms. Darcy. Yes.
        Senator Graham. I think everybody realizes that. But it is
    just not Charleston. And if shipping is going to change and we
    are going to meet President Obama's goal of doubling exports in
    5 years, which is a great goal, we better have the
    infrastructure to make that a reality.
        So, Madam Chairman, you, your staff, Senator Alexander have
    been absolutely terrific and helpful. We have got a dilemma. In
    the 2011 budget, there was no money set aside by the
    administration to conduct a study, and as I understand the way
    you deepen a port, there are three phases: the study phase, the
    design phase, and the construction phase. Is that correct?
        Ms. Darcy. Yes.
        Senator Graham. And the Congress has to authorize these
    studies for you to move forward. You just cannot do this on
    your own. Is that correct?
        Ms. Darcy. Yes.
        Senator Graham. So what we have tried to do is find a way
    to allow the study in 2011 to go forward. And it is a 3-year
    process where the study goes on for 3 years, and after the
    study is done, the design phase kicks in. That is about $25
    million to $30 million, and the construction to deepen the
    harbor to 50 feet, what we anticipate would be the depth to
    receive these ships, is several years, about $350 million. And
    there is a cost-sharing agreement between ports and the Federal
    Government. Is that correct?
        Ms. Darcy. Yes.
        Senator Graham. So my dilemma is that I have no vehicle to
    allow the study in 2011 to go forward. It is a scoping study.
    It is about $40,000 on the Federal side. The port in South
    Carolina is willing to pay the Federal Government's share, but
    we literally cannot. So everybody on this subcommittee has been
    helping me, and I am talking to the administration about a way
    forward.
        But beyond Charleston, do we have a vision as a Nation as
    to what ports should be deepened to accept these ships? And is
    there a financing plan in place?
        Ms. Darcy. No, Senator, we have not done a nationwide study
    to evaluate which ports should be deeper.
        Senator Graham. I would like to recommend to this
    subcommittee this would be a good use of our time to look as a
    Nation what does it mean for these ships to come through the
    Panama Canal, what does it mean to traffic on the Mississippi
    River, and try to make a good business decision.
        I am willing, Madam Chairman, to allow COE to decide
    whether or not to spend money on Charleston's deepening if it
    makes sense from a national perspective. But since that system
    is not in place, I have to protect Charleston. And as you
    mentioned, there is a lot of money not being utilized. So we
    need to look at that account.
        But, Secretary Darcy, could you propose to this
    subcommittee a plan, General, that would allow you to make an
    assessment of what ports need to be deepened based on the
    Panama Canal situation? Have you all done anything along those
    lines? Would you be willing to submit a plan to us if I ask
    you?
        Ms. Darcy. We would have to be directed and funded to do
    so, Senator.
        Senator Graham. That funding problem.
        I would just ask the subcommittee to look into this
    situation because as a Nation we do not have the infrastructure
    to basically accept ships that are going to be the standard for
    the future, and if President Obama's goal of doubling export is
    to be achieved, as Senator Alexander said, shipping is the key
    way to get goods throughout the world.
        In South Carolina, BMW makes cars. We call it ``Bubba Makes
    Wheels.'' But there is a BMW plant in Greenville/Spartanburg,
    South Carolina where we have shipped more than $4 billion worth
    of cars made in South Carolina throughout the world. And the
    port in Charleston is responsible for 1 in 5 jobs in South
    Carolina. I bet you that is true in places in California. I
    know it is true in Mississippi and Alabama.
        So let us look at what we should be doing as a Nation,
    General, and make a business decision. I am willing to let
    merit take over if we are all in the same boat together. So I
    will end this discussion with the idea of please, for God's
    sakes, help me find a way to do the scoping study in 2011, and
    we will look at a system-wide approach beyond that.
        General, do you have anything to say?
        General Van Antwerp. Yes, Sir, if I could just respond
    quickly.
        We have six ports that are moving to the 50-foot depth.
    That is what you will need to come fully loaded through the new
    Panama Canal. We also have seven studies of deep water ports,
    which Charleston is if we get the feasibility dollars to do it,
    that have potential. With Charleston being 45 feet now, what
    would it take to go to 50? What is the benefit-cost ratio? We
    do have a lot of knowledge of how the ports are intertwined
    because you may not have to come in full from the Panama Canal
    if you have already offloaded some to go to the next port, the
    next port. So it is a system, and we can take that on if funded
    to do so.
        Senator Feinstein. Thank you.
        Let me say this because I spoke to Senator Alexander. We
    will put report language in our bill to indicate very strongly
    our view which is that we do not believe money should be taken
    from this trust fund for other use. All anyone has to do is go
    to the Port of Hong Kong, go to any other major port to see how
    out-of-date our ports are. If we are going to compete
    internationally, we have to have a modern infrastructure, and
    the ports have to be consistently dredged.
        So I think we will have some very strong language in our
    bill, and I want to say to the administration I will do
    everything I can to prevent that trust fund from being eroded
    with other activities.
        Next is Senator Reed.
        Senator Reed. Thank you very much, Madam Chairman.
        I want to welcome all the witnesses. I particularly want to
    welcome General Van Antwerp, Bob, thank you for your
    extraordinary service--you and your family--to the Army and to
    the Nation. Although the General looks much younger than I, we
    were contemporaries at West Point. So it is good to see you.
    Clearly his talent was recognized early on at West Point. I am
    in another line of business and that speaks for itself.
        Now, let me continue. I want to thank you, both Secretary
    Darcy and General Van Antwerp, for the extraordinary response
    of COE of Engineers to the floods last year in Rhode Island.
    Your New England district personnel were incredibly active,
    hands-on, great initiative. They were particularly helpful in
    prioritizing dredging at the Patuxent Cove which would now
    allow for freer access of water from our systems into
    Narragansett Bay. And they have conducted reconnaissance
    studies. They have taken really this issue on. So can you
    accept my compliments and pass them on to those extraordinary
    public servants? Thank you.

                COE deg.CONTINUING AUTHORITIES PROGRAM

        Let me focus on a series of issues, Secretary Darcy, the
    continuing authorities programs. I found them to be very
    useful, particularly the 205 Continuing Authorities Program
    (CAP), one of the programs that deal with flood control. And I
    have noticed that in the President's budget, there is the
    proposed elimination of four existing CAP's, and then the
    reliance on transferring funds to fulfill the obligations of
    some other CAP's.
        Can you comment on the CAP activities, the proposed
    changes, and how would it affect flood control?
        Ms. Darcy. Senator, you are correct. We did make a proposal
    in this budget to use some of the existing funds in the
    carryover programs from one CAP program to another. I think it
    is $23 million. We are going to use that carryover money for
    other programs. And in looking at tough budget decisions and
    directions from the Office of Management and Budget, we had to
    make some choices, and we looked at the CAP programs.
        The 205 program is one that is going to continue to be
    funded with carryover funds in this budget. CAP programs are
    smaller projects that do not need individual authorization or
    Chief's Reports, and there are certain thresholds as to how
    much Federal funding can be spent on those. They have been very
    effective especially in small States like Rhode Island. We will
    continue to fund those in this President's budget, but some of
    the others, like the small harbors money, are going to be cut.
    We are going to continue to fund those programs and they are
    prioritized within the region.
        Senator Reed. Well, I appreciate that with respect to the
    205 program.
        One of the other programs is the 103 CAP which does a lot
    with respect to coastal erosion, and we just had a recent
    report that 68 percent of the beaches in New England and the
    mid-Atlantic, basically the whole northeast coast, are eroding
    on an average of 1.6 feet a year. And in towns in Rhode
    Island--and this reminds me of a great story. Senator Theodore
    Francis Green was asked the size of Rhode Island. He said it
    depends, on what, and he responded, high tide or low tide.
        So 1.6 feet a year is an important metric to us, and that
    103 program I believe is one that is scheduled for elimination.
    So it begs the question how do we deal with this multi-State
    erosion problem along our beaches.
        Ms. Darcy. I think it needs to be looked at as a system, as
    you said, with each of the beaches. We have money in the budget
    for beach renourishment projects. It is something that we are
    carefully considering when we make the budget proposals.
        Senator Reed. Thank you very much.
        Madam Chairman, thank you.
        And once again, thank you for your great assistance in our
    flooding. Thank you.
        Senator Feinstein. Thank you very much, Senator Reed.
        Senator Lautenberg.
        Senator Lautenberg. Thanks very much, Madam Chairman.
        I listened with interest to your response to questions. I
    must say you are staying up-to-date and I wish that you had
    more money to stay up-to-date more with. But the fact of the
    matter is that we in New Jersey have lots of respect, but also
    need, if I might say, from COE.

                      COE deg.PASSAIC RIVER BASIN

        By the way, General Van Antwerp, I spent part of my
    military career in Antwerp, Belgium during the war, and I
    always had a good feeling about that city and we have about you
    as well.
        Last month, I toured the Passaic River basin in New Jersey
    following a severe storm and saw the devastation firsthand.
    There is a dispute here between the communities. Local
    communities in that area believe that flood gates at the
    Pompton Lakes Dam have led to increased flooding in downstream
    communities. And an independent consultant has been brought in
    and is investigating the matter. I was there during the heavy
    stage of the flood, and the communities downstream were deeply
    in trouble because of the flooding.
        What has COE done to address this issue? Will it take in
    local concerns as the study moves forward?
        General Van Antwerp. Absolutely, Senator, we will take
    those local concerns into account. We want total visibility on
    this. We welcome the other review of this also.
        Senator Lautenberg. I hope so because something does not
    work, as is visible, when it is heavy weather.
        Secretary Darcy, I am encouraged by the close cooperation
    between COE and the New Jersey Department of Environmental
    Protection to try to work toward a comprehensive plan for the
    Passaic River basin. However, the re-evaluation study is
    expected to cost COE $7.5 million over the next 3 to 5 years.
    Is COE committed to requesting funding for this project in the
    future years?
        Ms. Darcy. Senator, we have not included money for it in
    the fiscal year 2012 budget.
        Senator Lautenberg. Well, we are going to need your support
    in getting this study done. The Passaic River has been a place
    with constant flooding and problems that result from that.
        I was pleased to see that your budget request included
    funding for the Port Monmouth beach project in New Jersey. In
    the past, coastal projects have typically been added as
    earmarks during the appropriations process rather than being in
    the budget request. Well, with earmarks on their way--they are
    at a moratorium now--how does COE plan to address the need for
    coastal storm damage reduction projects as it writes a work
    plan for the rest of this year and looks ahead to future
    requests? How do we get it done?
        Ms. Darcy. As far as the work plan that we will be required
    to write for the rest of this year, we will look to fund
    projects that are currently in the budget and then, with any
    remaining funds, look to prioritize other ongoing work.
        Senator Lautenberg. I have a couple of other questions that
    I want to submit for the record.
        But I want to ask you this. When I look at the budget that
    is requested for 2011, I see that there has been less money
    requested for fiscal year 2012 than we actually had with fiscal
    year 2011. I do not want to put you on the spot, but I do not
    think that is because there is less need. I do not know whether
    you are at liberty to say whether or not more is needed than we
    have presently allocated for the projects that you have
    requested or are underway.
        Ms. Darcy. Senator, we are operating within the fiscal
    climate that we are in, and this budget is what the President
    believes will allow us to sustain our missions.
        Senator Lautenberg. Thank you very much.
        Senator Feinstein. Thank you very much, Senator Lautenberg.
        Senator Murkowski.
        Senator Murkowski. Thank you, Madam Chair.
        And thank you to those who are appearing before us today,
    for your testimony, for your work. We appreciate it.

                       COE deg.FUNDING DECISIONS

        Clearly a great deal of interest in this, Madam Chairman,
    ranking member. I think it is not just because you are such
    wonderful leaders here on this subcommittee, but I think it
    speaks to the issue of what we are dealing with and the
    significance of not only ports and harbors, but our reality
    that in this new world of no earmarks, how we are able to help
    advance those projects, whether it is as Senator Graham has
    indicated, whether it is as Senator Lautenberg has indicated,
    or whether it is as it relates to the small harbors issues, as
    I will bring up. These are very critical issues for us, and I
    think we recognize the investments to our communities that are
    made when COE does the job that we ask them to do.
        Secretary Darcy, the question that I have for you--a series
    of questions here. We know that in recent years at least, we
    have seen the Congress increase the amount of funding for the
    construction of ports and harbors above the President's
    request. That was true in fiscal year 2010. In total, the
    Congress funded 350 studies and projects. The President had
    budgeted for 153. Now in fiscal year 2012, COE is budgeted for
    149 projects, and as I mentioned, we are operating under this
    earmark moratoria.
        The question that begs here is under this budget what
    happens to the 350-some-odd projects that were earmarked by the
    Congress in fiscal year 2010, and then going beyond there, what
    are the consequences for the local sponsors who have provided
    the matching funds from the municipal bonds or from the State
    funds? Where are we at this point in time with these projects
    that the Congress had said these are important, we need you to
    advance? Where are we now?
        Ms. Darcy. Senator, in making our budget priorities, we
    look at the benefits to the Nation of all of these projects,
    and that is how they compete and that is how we will budget for
    them.
        Senator Murkowski. Well, I appreciate benefits to the
    Nation. We think that in Alaska we have a lot of benefits to
    the Nation. I know that Senator Collins feels that her ports
    and harbors have a lot of benefit to the Nation as well. But
    you are going to have 26 States, including Alaska, that are
    budgeted for O&M money, operation and maintenance money, in
    fiscal year 2012, but who will receive no funding for general
    construction because of these low cost-benefit ratios. And as
    you go around the dais here and look to the States that we
    represent--Alaska, Alabama, Mississippi, Hawaii, South Dakota,
    Iowa, Montana, Kentucky, Maine, and South Carolina--would not
    receive any construction funding.
        So what do we say, that these 26 States are not significant
    or important to the national interest? We have had
    conversations about how the smaller harbors may be a lower
    priority from a national perspective, but in terms of what they
    contribute to a regional economy, they are extraordinarily
    important. So we have got a system where we have a cost-benefit
    ratio system that will never allow many of these States to ever
    get into the funding stream when it comes to general
    construction.
        So if we do not have earmarks, what can the Congress do to
    ensure that these States that are not budgeted for construction
    can somehow or other continue to get funding? Because I will
    not accept the conclusion that 26 States, including Alaska,
    will just not see general construction money. That is not
    right.
        Ms. Darcy. Senator, we do not do our budgeting on a State-
    by-State basis.
        Senator Murkowski. I understand that.
        Ms. Darcy. We do it on a project-by-project basis. That is
    where the prioritization and the value come in.
        As far as what can be done in the nonearmark era, there are
    any number of ways to look at a budget, whether it is a
    systems-based budget or a line item-based budget. That is
    something that the Congress may need to look at.
        Senator Murkowski. I think the Congress needs to look at
    it. I think we need to work with COE because I think this has
    led us to a result that whether you are from Alaska and trying
    to get a small harbor going or Senator Graham from South
    Carolina that is trying to get Charleston advancing--we have
    got ourselves in a bit of a mess here. And I am looking for
    your suggestions as to how we resolve it because just going to
    old rhetoric, which we operate off of this cost-benefit ratio
    and that is the standard and that is the way it is, is not
    acceptable.
        General, do you have comment you would like to make?
        General Van Antwerp. Yes, Senator. First of all, we would
    love to work with you on the priorities. I think if there are
    no earmarks, then we go back to the priority scheme. So we
    could work together on how the priorities are set, and maybe it
    is different than we do right now. Right now it is very heavily
    weighted to the National Economic Development benefits, and so
    that is your benefit to cost ratio that you have been speaking
    of. I think there are ways to look at the priorities of the
    whole system where portions of it could be reallocated based on
    a certain set of priorities that were set.
        Senator Murkowski. Well, I appreciate that. I think that is
    something that we need to do and look forward to working with
    you as well as those of us here in the Congress.
        I do have a series of questions regarding CD-5 and the
    failure by COE to be able to proceed with the bridge over the
    Colville River. I recognize that I am over my limit, though,
    but I would like to pose a series of questions to you for a
    response.
        Thank you, Madam Chair.
        Senator Feinstein. Thank you very much, Senator Murkowski.
        Senator Harkin.
        Senator Harkin. Thank you, Madam Chair. Thank you very
    much, Ranking Member Alexander.

                      COE deg.LEVEE CERTIFICATION

        Secretary Darcy, across the country, a number of cities are
    facing decertification of their levees as a result of higher
    estimated water flows, one of those cities being the capital
    city of Iowa, Des Moines. In the Des Moines case, the loss from
    a 100-year flood is very likely to be well more than $1
    billion. And that does not count the considerable loss of new
    construction and economic development that will occur with
    decertification. In other words, if they decertify the levees,
    there are big areas that are now being opened up with new
    expressways and areas for economic development. That will
    probably come to a screeching, grinding halt if these levees
    are decertified.
        Now, the city of Des Moines and other cities I am aware of
    across the country cannot afford to wait over a decade for
    studies and remediation. In Des Moines' case, the possible
    solutions are complex, including possible modification of COE
    dams, the raising of bridges, the widening of streams, the
    raising of levees. Each year of delay is a significant loss in
    economic development and jobs, higher flood insurance costs and
    again also possible flood damage. We really need COE to move
    forward with these complicated studies in Des Moines which I am
    told and understand is within your existing authorities.
        COE has unique and needed capabilities. That should include
    allowing the local sponsor, for example, to contribute funding
    up front with the understanding that if a project develops,
    those advances would be appropriately counted as a match.
    Again, so we do not lose crucial time, we are trying to get up-
    front money which the city of Des Moines is willing to do in
    order to collapse that timeframe, but again those monies then
    would count as part of their match so they do not lose this
    whole timeframe.
        So I hope that you will support having these studies move
    forward as efficiently and quickly as possible and, as we wait
    for regular funding, that you do all you can to approve the use
    of city-advanced funds, which I was just talking about, with
    the agreement that those local funds would count as a match
    against approved activities that would come on later on.
        Can you respond to that statement, because I have been
    meeting with the people in Des Moines. They are at a critical
    juncture right now. If we do not get something done within the
    next about 18 months, we are facing some real economic problems
    in the city of Des Moines. So, again, my question is, in your
    jurisdiction could we get the city of Des Moines to advance
    those funds, get those studies collapsed, do it in a hurry,
    while we wait for regular funding?
        Ms. Darcy. Senator, if we have a written agreement with the
    local sponsor and COE, it is my understanding that we can
    accept up-front money and provide further credit.
        Senator Harkin. You could if there is an agreed plan.
        Ms. Darcy. Yes, at the beginning.
        Senator Harkin. With the city of Des Moines.
        Ms. Darcy. Yes, with the local sponsor.
        Senator Harkin. If the city of Des Moines comes up with
    that, how long do you think it would take to get that approved?
    I mean is this something we could look at in a very short
    timeframe?
        Ms. Darcy. I believe so, Senator.

                      COE deg.CEDAR RAPIDS, IOWA

        Senator Harkin. Okay, that is good. That is very good.
        Well, okay, we have one other city in Iowa that is on a
    river and it gets flooded. It is called Cedar Rapids. You know
    that very well. And first of all, I commend COE for its rapid
    movement of the Chief's report on Cedar Rapids. It has been
    very good, General. But as you know, the findings propose a
    project based on traditional criteria. I know you are probably
    aware of this. It is one side of the river. General, you know
    that very well. The other side of the river, more than 3,000
    homes, and would you not know it, these are families with lower
    incomes than those that are on the side to be protected. So it
    is always those with lower incomes--they do not get any help.
        I think the philosophy of the December 2009 proposed
    national objectives, principles, and standards for related
    resources should be followed in a case like this. The Cedar
    Rapids waiver request will soon come to you to provide
    protection on both sides of the river. I urge you to grant it.
    That is the correct position on an equity and environmental
    justice basis. Cedar Rapids is a major engine for the economy
    of all of eastern Iowa, and it will be severely damaged with
    the lack of investments without a project on both sides of the
    river.
        I also hope that you will support allowing Cedar Rapids to
    count all of a sponsor's traditional costs that it incurred
    since the date of the flood.
        So that waiver request will be coming to you soon.

              COE deg.UPPER MISSISSIPPI RIVER NAVIGATION

        Last, Madam Secretary and General, I want to talk a little
    bit about the upper Mississippi navigation. We spent and I
    spent 20 years working to get this final plan approved for the
    upgrading of the locks and dams on the upper Mississippi. We
    finally got it done. And now I am worried about the ability to
    move ahead, both to maintain and move forward on the
    improvements in that navigation system.
        Of course, I was disappointed with the level of support in
    the fiscal year 2012 budget proposal from the White House, and
    I think it is clear that the budget agreement that we are
    probably going to agree on is going to put some real strains on
    the ability of COE to move forward. Madam Chair, I will be
    submitting some questions for the record in this regard.
        My point is this. I think that there is a need to increase
    funding available the Inland Waterways Trust Fund. I was
    pleased with the National User Board's proposal which
    recognized that need but also called for both more efficient
    processes regarding navigation construction and the reworking
    of the definitions of what is considered navigation. I can tell
    you that behind every dam--well, I cannot say ``every''. I have
    not visited them all. Behind most of them are great
    recreational areas, a lot of fishing. Even in some of the
    places down the Mississippi, you would be amazed how many
    people go out there just to bird watch and watch the bald
    eagles.
        Have you watched that Web site, the Decorah Eagles, by any
    chance? No. There is a Web site. It is called Decorah, D-e-c-o-
    r-a-h. You have been there a lot of times, but it is called
    Decorah Eagles. What they did, Madam Chair, someone--not
    someone--an entity, an environmental group, set up a web camera
    in a tree focusing on an eagle's nest.
        Senator Feinstein. I saw it. It was wonderful.
        Senator Harkin. Is that not wonderful?
        Senator Feinstein. Yes, and the baby.
        Senator Harkin. And the little baby is being hatched and
    all that and everything.
        Senator Feinstein. It is great.
        Senator Harkin. Hundreds of thousands of people around the
    world watching it.
        Well, along the Mississippi River, people are doing that.
    They are going out watching birds. There is a lot of recreation
    taking place.
        It seems to me that it should not all be counted as
    navigation. It should be counted both as recreation and as
    navigation.
        And we ought to allow for an increase in the taxes that
    even the barge people say they want to do but they want to make
    sure that it is used for navigation and to make sure that the
    recreational uses behind those dams and stuff are funded as
    recreational uses and not as navigational uses.
        So I just wanted to say that. Like I said, rather than
    getting into it here, I will submit for the record a number of
    questions.
        But I just want to thank you very much, Madam Secretary,
    and General, thank you so much for all you have done. Cedar
    Rapids--you have been great in response and helping us out
    there. Believe me I know the constrictions on that other side
    of the river. I understand that. I am just trying to see what
    is equitable and what could possibly be done to help a
    situation that cries out for some kind of justice here. So
    however we can work that out, I would sure appreciate it. Thank
    you both very much.
        Thank you, Madam Chair.
        Senator Feinstein. Thank you very much, Senator Harkin.
        To our witnesses, you have had 10 percent of the Senate
    here today, 10 people. That is very unusual for a subcommittee
    meeting, and I hope you interpret it as compliment and I hope
    you interpret it as the interest with which we hold your areas
    of expertise.

                          COE deg.DAM SAFETY

        I have a couple more questions. One is on dam safety,
    before I turn to BOR who has been sitting there so quietly, I
    want to say a couple of things.
        There is a 90 percent chance in California that within the
    next 30 years, we have a major earthquake. It is not a chance.
    It is a probability. We are in the Ring of Fire. We have seen
    the Ring of Fire with huge earthquakes in South America, Banda
    Aceh, Christ Church, New Zealand, and all the way up. So there
    is a lot of reason to be concerned.
        We have in California three dams--I do not know, but the
    words I have been given are ``most at-risk'' category, whatever
    that means. One, Lake Isabella, has been under study for 6
    years.
        Now, the first question is what qualifies a dam for the
    ``most at-risk'' category, General.
        General Van Antwerp. Senator, we look at a number of
    factors. Probably the most damaging factor would be whether
    there is material coming through the foundation of that dam. We
    call that piping in the engineer world. And most of the DSAC-1
    dams, which is the category you were mentioning, where it is
    urgent and compelling that we fix them now, have that problem.
    They are bringing material through the foundation. So we know
    there is erosion taking place. That is the most critical
    factor.
        We have a number of those under rehabilitation right now as
    we speak.
        Senator Feinstein. Well, how long do you have to study
    them, 6 years for Lake Isabella?
        General Van Antwerp. Lake Isabella--we have looked very
    closely at that. As we look at it, we think we are going to be
    fine with that if we stay on the schedule we are on.
        Senator Feinstein. Which is what?
        General Van Antwerp. The schedule right now is that we are
    going to fund that at $7 million in fiscal year 2012, which is
    the capability. We have a wedge of funding that is not totally
    visible to you all for dam safety. We are funding that project
    to continue on the schedule and we will make the repairs
    necessary when they come. We have $7 million in fiscal year
    2012 for that.
        Senator Feinstein. How about the other two most at-risk
    dams?
        General Van Antwerp. The Success Dam is budgeted with $18
    million in fiscal year 2012, so that one is also on schedule.
    What we are going to do there is acquire properties and we are
    on track with the $18 million. I think on both of those dams,
    we definitely have our eye on them and we are aware of their
    condition.
        Senator Feinstein. And the third one?
        General Van Antwerp. The third one. Which one is that?
        Senator Feinstein. I am trying to remember which one it is
    and I cannot remember.
        General Van Antwerp. Martis Creek. We have our eyes on that
    too. This is Mr. Steve Stockton who is our Director of Civil
    Works. He knows these in and out.
        Senator Feinstein. And so, on that one?
        General Van Antwerp. I am not exactly sure. I do not have
    the notes on where we are.
        Senator Feinstein. Would you let me know, please, because,
    obviously, I am vitally concerned.
        General Van Antwerp. Right.
        Senator Feinstein. Now, let me turn to BOR.
        You have proposed a new account for Indian water rights
    settlements. The question is how much mandatory funding
    accompanies the $51.5 million discretionary funding you have
    proposed for fiscal year 2012?
        Mr. Connor. The $51.5 million was basically designed to
    meet the capabilities that we have for 2012 with respect to the
    four new settlements. And what we are trying to do there,
    although there is a significant amount of mandatory funds being
    made available for those four new settlements, they also
    include a substantial amount of associated appropriations
    needs. I think to the tune of about $700 million was provided
    in mandatory funding, but with respect to BOR, we will still,
    for these four new settlements, about $250 million in
    discretionary appropriations is needed. So what we have tried
    do is to try and get the appropriations process going to cover
    that need.
        With respect to the new account, we have also incorporated
    the Navajo-Gallup pipeline project in New Mexico, the Navajo
    settlement in the San Juan River basin. There are about $25
    million in that account, I think we are going to ramp up to a
    capability in 2012 on the Navajo project to something around
    $70 million to $80 million. So there is a substantial ramp-up
    that is going on in that project itself, and so it will be a
    combination of those appropriated dollars, the $25 million, in
    the new account, plus we have been provided mandatory funds of
    $60 million in the Claims Resolution Act of 2010.
        Senator Feinstein. Do these settlement agreements require
    funding annually?
        Mr. Connor. They do not necessarily require specific
    funding annually. Some of them do. For instance, the Crow
    settlement contemplates an immediate distribution of $4 million
    I believe.
        Senator Feinstein. Are they all water systems?
        Mr. Connor. They are a combination of trust funds, which
    will come out of BIA accounts and infrastructure which are
    primarily designated for BOR. So we have municipal and
    industrial (M&I) systems, drinking water systems, but we also
    have some rehabilitation of existing irrigation systems that
    are part of the projects.
        Senator Feinstein. So you believe they can be funded
    without taking the money from anywhere else.
        Mr. Connor. Right now, through the new account, plus the
    combination of mandatory funds that we have, for the next few
    years we think we can manage that situation. But once again,
    overall, we are still looking at $250 million plus another $500
    million for Navajo. We are looking at, through appropriated
    dollars over the next decade, about $750 million worth of
    appropriated dollars that we have got to find somewhere.
        Senator Feinstein. I want to thank you for your sensitivity
    to the South-of-Delta water issues. I was very pleased to learn
    that BOR has increased the allocation for farmers from 65
    percent to 75 percent last week. I know these followed two
    previous rounds of increases. However, as you know well, there
    is still a lot of consternation in the central valley when most
    other projects are receiving 100 percent, and we have got a
    bumper crop of water and it is still the South-of-Delta that
    does not have 100 percent.
        In your judgment, how close to 100 percent can this region
    get with all the water that is now available?
        Mr. Connor. Well, there is still a chance to get up to that
    100 percent level. I would like to provide some perspective,
    though. Since 1990, we have only hit that 100 percent level
    South-of-Delta three times. The average over that 20-year
    period is 62 percent to South-of-Delta allocation for
    agriculture.
        Senator Feinstein. I actually got out the contracts and
    read them, and it is interesting because they are contracts
    with all kinds of hedges in them because generally when
    somebody signs a contract, you expect to be bound by the terms
    of the contract. In this case, the Government is not really
    bound by 100 percent water allocation under the contract. I do
    not know that people know that, and I think it is very hard.
    And I think when farmers look around and they see other water
    districts with 100 percent, it becomes even harder. And I
    understand there are special exigencies for the South-of-Delta,
    but try and sell that. It is unsalable, and I think you know
    that.
        Mr. Connor. Yes, absolutely. There are priorities. There
    are water rights conditions and the new environmental
    obligations that we have. All of those factors have affected
    that South-of-Delta allocation. But you are right. The
    expectations are there because of the contract quantities, and
    notwithstanding the fact those 20 years of experience show us
    that there is not enough water to consistently meet that 100
    percent need, there is still an expectation out there,
    particularly this year when the snowpack and precipitation is
    160 percent of average statewide.
        Senator Feinstein. Well, I know you are sensitive, and you
    have been just great and it is very much appreciated. I know
    how tough it is. Whatever we do, it is not enough, but at least
    we are trying. So thank you.
        Perhaps the biggest effort in California is the Bay-Delta
    conservation plan and what might come from it in the 10- to 15-
    year build period after. Can you provide an update on BOR's
    efforts to develop a programmatic EIS for the Bay-Delta
    conservation plan?
        Mr. Connor. Yes, Senator. Over the last 4 or 5 months,
    there has been a very concerted effort by BOR, in concert with
    the other Federal regulatory agencies, Fish and Wildlife
    Service and NOAA Fisheries, working with the California Fish
    and Game and the Department of Water Resources. We are calling
    it the ``five agency process''. And we have been led in that
    effort by Deputy Secretary David Hayes. And I think we have
    made a remarkable amount of progress in dealing with six major
    issues that are key to working through so that the State of
    California, which is going to be the permittee under the Bay-
    Delta Conservation Plan process, can go in and submit their
    plan with a reasonable expectation that we can work through
    those issues and get to a final permit. It is not pre-
    decisional. The regulatory agencies have made that very clear.
    But we are trying to get enough in the area so that there is a
    reasonable expectation of success.
        We have resolved, I think, four of the six issues. We are
    working very hard over the next couple of months to resolve the
    last two, and hopefully beginning mid-summer, the State will be
    in a position to submit its plan which will kick off the
    Environmental Impact Statement/Environmental Impact Report
    process. A lot of the analysis is already being done waiting
    for the final plan to come in. I think there is still hope that
    within a year's time period, that there will be a draft on the
    street.
        Senator Feinstein. Another problem. Since 2007, quagga
    mussels have been inundating the Colorado River system. They
    were found within Lake Mead, and since then, everybody has been
    working to prevent them. I met with the metropolitan water
    district the other day. They were telling me how they had spent
    millions of dollars and these things are just in gobs along
    their lines. Each quagga reproduces a million mussels a year.
    You cannot kill them with cold water. They have to go in and
    scrape feet of quagga mussels piled up. And if it infiltrates
    the water system, we have really got a problem.
        How much activity within BOR is going on to really try to
    combat this mussel issue, because it is a huge one? The Met
    just e-mailed the staff. They spent $28 million total scraping
    these things off the pipes.
        Mr. Connor. Yes. It is quite a problem and unfortunately,
    it is one that is spreading. And that is where our initial
    actions are right now. Our initial actions are to work very
    closely with the State agencies in trying to educate the public
    about the potential for transferring quagga mussels between
    bodies. Right now, we used, I think, around $5 million of our
    Recovery Act money just to do a broad survey west-wide of our
    various facilities to try and get a grasp on the scope of the
    problem, trying to educate people so that the problem does not
    increase.
        With respect to actually dealing with them in the
    facilities that they are in, most of our activity has been
    related to research and development activity. We are trying to
    kill them through various means. We are trying to develop
    coatings that will maybe keep them off the infrastructure.
        Senator Feinstein. You mean by getting them high, Codeine?
        Mr. Connor. No, coating--C-O-A-T.
        Senator Feinstein. Oh, I thought you said codeine.
        Mr. Connor. It took me a second. I think that is good that
    I did not immediately react, coating.
        Senator Feinstein. Got it.
        Mr. Connor. That will hopefully inform us about how we can
    keep them off of some of the infrastructure. But they are
    already there, and as Metropolitan Water District (of Southern
    California) well knows, they are investing a lot of their
    operation and maintenance funds right now just to try and
    control the problem.
        Senator Feinstein. Well, thanks to Senator Alexander and
    our work on Interior, Lake Tahoe, which we are trying to do
    some work on and save, which is one of two last remaining clear
    water lakes, huge lakes, is beginning to be infiltrated. So
    there is a boat boycott, and every boat prior to going into
    Lake Tahoe has to be specially inspected and washed.
        So I do not know if you can come up with any of the things
    that can be done. They have to get in somewhere, and we have
    got to prevent them from getting in. I mean, with a lake that
    is relatively isolated, if these are carried like from Lake
    Mead on the bottom of a boat to Lake Tahoe, you can clean the
    boat. But we really need some help and Federal suggestions of
    what can be done because they are really going to destroy not
    only the Colorado water supply system, but also our Great
    Lakes.
        Mr. Connor. Right. I agree. I think the inspection
    stations, the education process, everything we are
    participating in with our State partners in that effort, but it
    is a growing problem that we need to pay more attention to.
        Senator Feinstein. Thank you very much.
        Senator Alexander.
        Senator Alexander. No thank you, Madam Chair.
        Senator Feinstein. No, thank you, you said, all right.
        Well, let me thank everybody. Let me particularly thank our
    witnesses. I think this was a very useful hearing. As Senator
    Alexander whispered to me, I am glad I am up here, not down
    there.
        At this time I would like to ask the subcommittee members
    to please submit any questions that they have for the record.

        COE deg.BOR deg.ADDITIONAL COMMITTEE QUESTIONS

        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                     Questions Submitted to Jo-Ellen Darcy
                   Question Submitted by Senator Patty Murray

        Question. Assistant Secretary Darcy, I appreciate all you have done
    in your time with the Corps of Engineers (COE) and the good work of the
    districts that serve my home State of Washington. We are obviously
    facing very difficult budget times and unfortunately, the President's
    budget request reflects that for COE. Yet even as we face these hard
    times, COE has ongoing General Investigations that are routinely not
    included in the President's budget request, like the Elliott Bay
    Seawall GI or the Skagit River GI. Can you tell me how you plan to
    continue these important projects?
        Answer. All projects and studies are evaluated and considered for
    funding. However, only the highest-priority studies from a national
    perspective are proposed for funding. The Army has undertaken a broad
    effort to review the scope of active studies to ensure resources are
    appropriately aligned to complete those studies most likely to result
    in a high-performing project. For example, as part of this effort, the
    Skagit River study will be reviewed this year.
        The Army is working to finalize implementation guidance for section
    4096 of the Water Resources Development Act of 2007, which includes the
    determination of the feasibility of reducing future damage to the
    Elliott Bay Seawall from seismic activity. A Feasibility Scoping
    Meeting is scheduled for the project this fiscal year.
                                     ______

                Questions Submitted by Senator Mary L. Landrieu

      coe deg.COMPLETION OF THE LEVEE SYSTEM FOR THE GREATER NEW
                                  ORLEANS AREA

        Question. On June 1, the city of New Orleans and the State of
    Louisiana will mark an historic and long-awaited milestone. The city
    that has given so much to this Nation--that is strategically located at
    the entrance to one of the world's largest river systems--will be
    protected against the ravages of a 100-year storm and flood event. The
    Corps of Engineers (COE) is to be commended for its work in completing
    this herculean task, but there are many questions left unanswered.
    Since the American people have invested nearly $15 billion in this
    effort, we have a serious responsibility to make sure this money is not
    wasted and that it will sustain a 100-year level of protection over the
    long term. I have a couple of questions on this point:
        Ms. Darcy, there is clear precedent in law and regulation for COE
    to assume operation and maintenance of navigation structures in
    federally navigable waterways. If COE does not have the legislative
    authority to operate the newly constructed structures along the Gulf
    Intracoastal Waterway, will the administration support legislation to
    give COE this authority?
        Answer. The hurricane risk reduction system in the Greater New
    Orleans area includes numerous floodgates, many of which cross roads,
    interstate highways, and navigation channels. The hurricane risk
    reduction floodgates crossing navigation channels are designed to have
    minimal interference upon navigation, unless there is a tropical event
    which requires their operation. Under current law, the Coastal
    Protection and Restoration Authority of Louisiana (LA-CPRA) is
    responsible for operating and maintaining all of the hurricane risk
    reduction system, including the floodgates. Two of the largest
    floodgates for the hurricane risk reduction system cross the Gulf
    Intracoastal Waterway (GIWW). Although these two surge gates are
    located across a Federal navigation channel, their purpose is to reduce
    the risk from storm surge and not for navigation. Requiring the State
    to be responsible for the costs of operation and maintenance is in
    keeping with requirements of Public Law 99-662, Public Law 109-234 and
    Public Law 110-252, all as amended.
        Furthermore, in keeping with the above legislative requirements,
    LA-CPRA has entered into Project Partnership Agreements and has agreed
    to be 100 percent responsible for the Operation and Maintenance of the
    hurricane risk reduction system project features. This applies to all
    features, including the pumping station and these two floodgates which
    cross the GIWW.
        Question. I understand from local levee officials that in order to
    maintain the 100-year level of protection, future ``lifts'' to increase
    the height of the levees will be needed in certain areas of the system.
    This will be caused by the settling of the material used to construct
    the levee and could be needed as early as next year. Will the
    administration budget for these critical needs and if so, why not?
        Answer. Public Law 109-234 and Public Law 110-252 authorized and
    funded COE to raise levee heights where necessary and otherwise enhance
    the existing Lake Pontchartrain and Vicinity project and the existing
    West Bank and Vicinity project to provide the level of protection
    necessary at the time of construction to achieve the certification
    required for participation in the National Flood Insurance Program
    (NFIP). Additional authority and funding would be required for the
    Federal Government to construct future levee lifts.
        Question. What do you estimate these needs to be, and how will it
    affect the certification of the overall levee system in New Orleans?
        Answer. The Greater New Orleans--Hurricane Storm Damage and Risk
    Reduction System will initially be accredited by the Federal Emergency
    Management Agency (FEMA) for a 10-year period. Current regulations
    require that FEMA to be notified if any part of the system fails to
    meet the certification requirements during the 10-year period.
        Additional authority and funding would be required to pursue
    construction of the future levee lifts and other additional measures on
    the Lake Pontchartrain and Vicinity project and the West Bank and
    Vicinity project to sustain FEMA system accreditation and participation
    in the NFIP in the future.
        The estimated cost for future levee lifts and other measures to
    sustain elevations necessary for system accreditation are not known at
    this time.
        Question. The Harbor Maintenance Trust Fund is authorized under the
    Harbor Maintenance Revenue Act of 1986 (Public Law 99-662, title XIV),
    as amended. Revenue is derived from a 0.125 percent ad valorem tax
    imposed upon commercial users of specified U.S. ports and investment
    interest. These funds are intended for the operation and maintenance of
    our ports and harbors--critical dredging that keeps these centers of
    navigation and commerce open for business. More than $1 billion is
    collected each year, and the total estimated balance in the fund this
    year is more than $7 billion. We have all of these funds, yet our ports
    and harbors are in desperate need of dredging. Why does the Harbor
    Maintenance Trust Fund carry billions in surplus when our critical
    ports and harbors are in desperate need of dredging funds?
        Answer. The balance in this trust fund, which has grown over a
    period of many years, reflects multiple factors, principally the value
    of goods subject to the harbor maintenance tax, the tax rate, the
    enacted spending levels, and the limitation in current law on the
    authorized uses of these receipts. In our view, the overall funding
    level that the Federal Government provides for maintenance dredging and
    related purposes should be determined independent of the level of the
    Harbor Maintenance Tax receipts. More specifically, the allocation of
    these funds should reflect consideration for the economic and safety
    return, as well as a comparison with other potential uses of the
    available funds.
        Our investments in coastal port maintenance are directed primarily
    at providing operational capabilities and efficiencies. To make the
    best use of these funds, COE evaluates and establishes priorities using
    objective criteria. These criteria include transportation cost-savings,
    risk reduction, and improved reliability--all relative to the cost.
    Consequently, maintenance work generally is focused more on the most
    heavily used commercial channels, which together carry about 90 percent
    of the total commercial cargo traveling through our coastal ports.
    However, many ports will experience draft limitations on vessels due to
    channel conditions, at least during parts of the year.
        While COE could spend more on harbor maintenance and related work,
    the amount proposed in the budget for this purpose, which is financed
    from this trust fund, is an appropriate level, considering the other
    responsibilities of COE for inland navigation, flood risk management,
    aquatic environmental restoration, hydropower, and the other Civil
    Works program areas. COE continues to develop analytical tools to help
    determine whether additional spending from this trust fund is warranted
    based on the economic and safety return, as well as a comparison with
    other potential uses of the available funds. Dredging costs continue to
    rise due to increases in fuel, steel, labor, and changes in methods of
    dredged material placement. We recognize that this presents challenges
    in maintaining commercial navigation projects.

    coe deg.COASTAL RESTORATION AND PROTECTION--LOUISIANA COASTAL
                                      AREA

        Question. I am very encouraged that the President requested
    construction funding for coastal restoration in Louisiana in his fiscal
    year 2011 budget. After decades of study and planning, we will finally
    be turning dirt to restore and protect our fragile coast. I understand
    that this represents 1 of only 2 new starts recommended by the
    President, but I want to emphasis how critical it is that we use these
    funds wisely and efficiently. Ms. Darcy, I understand that this is a
    programmatic funding request.
        How does COE intend to capitalize on the fiscal year 2012 budget
    request and ensure that multiple projects have received the appropriate
    executive branch approval?
        Answer. The President's fiscal year 2012 budget includes $10.6
    million to begin construction under the Louisiana Coastal Area (LCA)
    ecosystem restoration program. The COE district office is working on
    several reports, and my staff is working with them to expedite the
    appropriate approval process.
        Question. Also, which specific LCA projects will receive funding
    this year and the coming fiscal years?
        Answer. Fiscal year 2012 funds will be used to continue
    construction of authorized restoration projects underway in fiscal year
    2011 with reports that have favorably completed executive branch
    review, to initiate one new construction phase, and to continue
    monitoring and other restoration-related activities. Potential
    construction in fiscal year 2013 could include project(s) from the LCA
    6 portfolio, Beneficial Use of Dredged Material Program (BUDMAT), and
    the Demonstration Program. The specific project(s) selected for fiscal
    year 2013 construction will be based upon funding available, approval
    of individual reports by the executive branch and execution of the
    necessary agreements with the State of Louisiana.
        In fiscal year 2014 and beyond, we foresee continuation of
    construction for projects within the LCA 6, BUDMAT, and Demonstration
    Program with the addition of projects from the LCA 4 and LCA 5
    portfolios.

               coe deg.DREDGING NEEDS ON THE MISSISSIPPI

        Question. I have heard from a number of very concerned ports,
    businesses, and citizens about the navigability along the lower
    Mississippi River due to high water. The Mississippi is the central
    artery for navigation for nearly the entire Nation. As you know, 40
    percent of the entire continent is drained by the Mississippi River
    Delta. This drainage basin (approximately 1,234,700 square miles)
    covers about 40 percent of the United States and ranks as the fifth
    largest in the world. The inland waterways of the United States include
    more than 25,000 miles (40,000 km) of navigable waters. Much of the
    commercially important waterways of the United States consist of the
    Mississippi River system--the Mississippi River and connecting
    waterways.
        Do you have the funds you need to ensure that the Mississippi River
    remains open for business at the maximum authorized depths?
        Answer. The Army is committed to maintaining coastal navigation
    between the gulf and the ports of the New Orleans and Baton Rouge area.
    Funds to do so are included in the budget. The dredging needs on this
    part of the lower Mississippi River are difficult to predict, as they
    depend on flow conditions, sediment loads, and a variety of other
    factors, which vary each year as well as over the course of the year.
    COE continually monitors conditions on the river to ensure the most
    efficient use of available funds to minimize the need for any depth,
    speed or night-time restrictions.
        Question. How are you balancing this critical need with the needs
    that other essential waterways are facing across the State of Louisiana
    and the Nation?
        Answer. COE has a large inventory of navigation projects to
    maintain and seeks to provide levels of service that reliably and
    safely support freight movements in a way that provides the most
    overall value to the Nation from the available funds. Navigation
    projects were categorized as high, moderate, and low commercial
    navigation use based on tonnage. COE's approach involves a focus on the
    high and moderate commercial use navigation projects, which together
    move 99 percent of the Nation's waterborne commercial cargo. Generally,
    before providing more funding to a project, we consider whether we
    could achieve a greater return by applying those funds elsewhere. The
    low-use projects funded in the fiscal year 2012 budget were selected
    with the intent to optimize use of the available funding across a range
    of uses, with emphasis on harbors of refuge, subsistence harbors,
    projects with Coast Guard Search and Rescue stations, energy delivery
    projects where marine transportation is the only means to make the
    deliveries, and commercial navigation projects with less than 1 million
    tons of commercial cargo.

                  coe deg.INLAND WATERWAY TRUST FUND

        Question. The Inland Waterways Trust Fund is used to pay one-half
    of the costs associated with the construction, replacement,
    rehabilitation, and expansion of Federal inland waterways projects.
    There are dozens and dozens of critical locks and dams that are in a
    dramatic state of disrepair--including 1 in New Orleans that has been
    waiting for replacement for more than 50 years. I am strongly opposed
    to the administration's proposal of a new funding mechanism, which
    would replace the existing fuel tax.
        However, I am most interested in knowing how COE plans to address
    the massive backlog of projects on the inland waterway system. Ms.
    Darcy, how is your agency addressing this critical need?
        Answer. Neither the administration nor the inland navigation
    community is content with current funding levels. In the short-term,
    the administration has been budgeting for the capital costs of inland
    waterways projects based on the level of anticipated revenues from the
    current excise tax on inland waterways diesel fuel.
        Question. Do you believe changing the funding mechanism is the best
    way to address the problem in this economy?
        Answer. The administration is open to discussions on revisions to
    the existing funding mechanism as well as new funding mechanisms.
                                     ______

                 Questions Submitted by Senator Mitch McConnell

        Question. What funding levels are needed for fiscal year 2012 and
    fiscal year 2013 in order to maintain the Kentucky Lock project on its
    critical construction path?
        Answer. Two features of the Kentucky Lock and Dam project currently
    are underway: the superstructure feature (highway/railroad), which we
    expect to complete in December 2011, and the upstream lock monolith,
    for which we allocated funding under the American Recovery and
    Reinvestment Act of 2009. However, the Corps of Engineers (COE) does
    not plan to move forward with further work on Kentucky Lock and Dam
    project at this time due to the low level of the receipts to the Inland
    Waterways Trust Fund, as well as to the relative priority of these
    projects among the potential inland waterways capital investments. For
    example, the priorities of the Inland Waterways Users Board, which will
    be given due consideration in the formulation of future budgets, placed
    a higher priority for early construction on several other inland
    waterways projects and deferred completion of Kentucky Lock and Dam, as
    well as other projects. When the project is ready to resume, COE will
    develop a proposed schedule, after assessing the critical path toward
    completion at that time.
        Question. The inland waterway system has a number of lock and dam
    modernization projects whose construction completion dates have been
    significantly delayed and whose project construction costs have risen
    far beyond the levels originally authorized by the Congress for those
    projects. What do you believe the consequences will be of failing to
    adopt a workable, reasonable long-term capitalization plan to address
    this situation? Specifically, please speak to the specific long-term
    impacts to Olmsted Lock and Dam, Kentucky Lock, Wolf Creek Dam, and
    Greenup Lock and Dam projects without a capitalization plan.
        Answer. COE's program today is focused on the operation,
    maintenance, repair, rehabilitation, and replacement of major flood
    control and commercial navigation infrastructure systems, and the
    repair of aquatic ecosystems that COE projects have affected. The
    overall budget for the program is primarily devoted to maintaining
    these systems so that they can continue to provide economic,
    environmental and social benefits to the Nation.
        For example, an increasing proportion of our funding in recent
    years has been devoted to the maintenance and rehabilitation of
    existing infrastructure, primarily for flood risk management, but also
    for inland navigation projects. Similarly, the budget for the
    construction program gives priority to dam safety assurance, seepage
    control, and static instability control work (about $450-$500 million
    per year) to repair unsafe dam structures.
        The administration will be considering options for a comprehensive
    recapitalization policy for the Civil Works Program, but still is in
    the early stages of this effort, which will include an examination of
    current asset management tools and review of existing policies and
    authorities. It is anticipated that new authorities will be needed to
    ensure that the infrastructure continues to address the water resources
    priorities of the Nation.
        The projects you mention, and their costs, are not affected by the
    absence of a capitalization plan. The Olmsted Locks and Dam and the
    Wolf Creek Dam projects have received a priority for funding for many
    years. Their schedules and costs have changed principally due to a
    variety of other factors specific to those projects. For the Kentucky
    Lock and Dam project, we expect to complete the superstructure feature
    (highway/railroad) in December 2011. We also provided funding under the
    American Recovery and Reinvestment Act of 2009 for work on the upstream
    lock monolith. However, COE does not plan to move forward with further
    work on Kentucky Lock and Dam project or on the Greenup Locks and Dam
    project at this time due to the low level of the receipts to the Inland
    Waterways Trust Fund, as well as to the relative priority of these
    projects among the potential inland waterways capital investments.
        Question. Please provide an updated (to fiscal year 2011)
    ``Benefits Foregone'' account of the economic cost to our Nation's
    economy due to lock and dam modernization projects that were not built
    using an efficient construction schedule (previous COE analysis
    attached).
        Answer. We no longer compile this information. It was inaccurate
    and misleading, as well as based on an unrealistic premise. However, we
    would be glad to provide it for any specific project, with appropriate
    qualifications.
        Question. What action is COE taking to be better stewards of
    taxpayer dollars?
        Answer. The budget focuses on the highest-performing projects and
    programs within the three main water resources missions of COE:
      --commercial navigation;
      --flood and storm damage reduction; and
      --aquatic ecosystem restoration.
        For example, the budget includes $51.78 million, more than a $40
    million increase, for a comprehensive levee safety initiative to help
    ensure that Federal levees are safe and to assist non-Federal parties
    to address safety issues with their levees. The budget also proposes to
    create savings and efficiencies through elimination of duplicative and
    lower-priority programs.
        Question. What is the estimated level of benefits not recoverable
    for the Olmsted project?
        Answer. The budget continues to place a high priority on the
    completion of this project. The primary benefits resulting from
    construction of the Olmsted Locks and Dam project (which also includes
    demolition of Locks and Dams 52 and 53) are vastly improved navigation
    transit at a key point on the Ohio River; coupled with significant
    decreases in current operation and maintenance costs due to the age and
    advanced deteriorated condition of Locks and Dams 52 and 53.
        COE, in its feasibility report, estimated that the construction of
    Olmsted Locks and Dam would reduce vessel transit costs and net Federal
    operation, maintenance, and repair costs by around $69 million per
    year. Operation and maintenance costs at Locks and Dams 52 and 53
    continue to increase. A failure event at either of these projects could
    close a key transit point on the river to navigation, with broad
    effects on commerce. This ongoing risk will increase until COE
    completes Olmsted Dam and the new locks are operational.
                                     ______

                 Questions Submitted by Senator Lisa Murkowski

        Question. My understanding is the Pacific Division of the Corps of
    Engineers (COE) found deficiencies on appeal with the Alaska District's
    rejection of Conoco's section 404 application to construct a bridge to
    access the National Petroleum Reserve. As you know, the Native Village
    of Nuiqsut and really all of the local stakeholders supported the
    collaborative process that led up to this modified proposal. On remand,
    is COE looking closely at the record for what the local subsistence
    community prefers?
        Answer. The district considered local support for Conoco's
    preferred alternative as part of its public interest review in the
    original decision. All relevant public interest factors were carefully
    evaluated and balanced. The decision whether to authorize a proposal,
    and under what conditions, is determined by the outcome of this general
    balancing process, subject to other legal requirements. The district
    determined that the district's record of decision did not clearly
    document their decisionmaking process with respect to the public
    interest determination. Therefore, while Pacific Ocean division did not
    remand to Alaska district for the single issue of local support, the
    remand did instruct the district to clearly document the balancing
    process.
        Further, local support for a project does not obviate the section
    404(b)(1) guidelines requirement that only the least environmentally
    damaging practicable alternative (LEDPA) may be permitted, so long as
    that alternative does not have other adverse environmental
    consequences. Based on the information provided to the district,
    Conoco's proposal was not determined to be the LEDPA.
        Question. Prior to the COE's rejection of Conoco's permit on
    February 5, 2010, the Environmental Protection Agency (EPA) had
    designated the Colville River Delta ``an aquatic resource of national
    importance.''--an aquatic resource of national importance (ARNI). Ms.
    Darcy, what is your definition of ``national importance?''
        Answer. The term ``ARNI'' is used in the process established under
    an ``inter-agency dispute resolution memorandum of agreement'' (MOA)
    developed under section 404(q) of the Clean Water Act. The current
    404(q) MOA was signed by the EPA, Department of the Interior (DOI),
    Department of Commerce (DOC), and my office in 1992. The MOA provides
    procedures and timeframes for resolving inter-agency disputes regarding
    permit applications, in an effort to make timely permit decisions. An
    ARNI is a resource-based threshold used to determine which individual
    permit cases can be elevated under the 404(q) procedures. Factors used
    in past elevations to identify an ARNI include diverse high-quality
    ecosystems, rarity and uniqueness, and economic importance for fish and
    wildlife species. In other words, the underlying concept is simply that
    impacts to particularly important aquatic resources should be carefully
    evaluated.
        Question. Has the EPA ever designated an ARNI in consultation with
    COE or any other agency, or the public? Is there any transparency to
    the designation?
        Answer. The term ARNI is only used on the context of a Clean Water
    Act (CWA) section 404(q) elevation under the 1992 MOA between EPA, DOI,
    and DOC, to identify those individual permit cases that may be elevated
    to my office for review. EPA does not ``designate'' an aquatic resource
    as an ARNI. Rather, it concludes that the aquatic resources and
    proposed impacts are significant enough to request review by my office
    as provided in the MOA.
        Question. If COE disagrees with the EPA's designation of an ARNI,
    does COE have any means of reversing or modifying the designation?
        Answer. The conclusion that the aquatic resources and proposed
    impacts are significant enough to request review by my office is not an
    official designation or decision that requires reversal or
    modification. The term ARNI refers to a criterion used by the resource
    agencies (EPA, DOC, DOI) to determine if an individual permit may be
    elevated under the CWA section 404(q) elevation procedures.
        A District Commander may not reject a resource agency's substantive
    conclusion regarding its determination that the aquatic resource
    impacted by the proposed project is an ARNI and that the impact will
    result in an unacceptable impact on ARNIs. The 404(q) MOA is intended
    to allow agencies to elevate certain applications to my office, after
    following the specified procedures and timeframes described in the MOA.
        Once my office receives the request for review of the individual
    permit application from a headquarters office of the agency (e.g., the
    EPA Assistant Administrator for Water), the permit decision is held in
    abeyance.
        My office does have the ability and authority to agree or disagree
    with the designation of an ARNI and with the determination that the
    project will result in substantial and unacceptable impacts to ARNIs
    after thorough review of the permit and the decision document, and in
    many instances after an on-site meeting.
        I understand that there are several examples where my office has in
    fact disagreed with the resource agency designation and/or the
    determination of substantial and unacceptable adverse effects to ARNIs.
    If this occurs, my office will inform the headquarters office of the
    agency that sought headquarters review of the permit application of my
    decision. The permit is not finalized during a period of 10 days
    following my decision so that EPA if it desires may initiate a review
    under its 404(c) authority.
        Question. If COE moves forward with granting section 404 clearance
    to proceed with a fill project even after EPA has designated an area an
    ARNI, would COE consider it likely that EPA would use its section 404
    authority to veto the project?
        Answer. Not necessarily. Since 1972, when the Congress enacted
    section 404, the EPA has only prohibited a proposed action, as provided
    in section 404(c), about 14 times. The decision to initiate a 404(c)
    action rests solely with the EPA, and is not tied to the concept of an
    ARNI.
        Question. With CD-5, COE had worked with Conoco, the State of
    Alaska, and the local community stakeholders since 2004 toward an
    agreement on accessing CD-5, only to ultimately deny the permit in
    2010. How can we in the Congress justify spending on such a process if
    we ultimately don't have a project?
        Answer. CWA requires the chemical, physical, and biological
    integrity of the Nation's waters be restored and maintained. In
    accordance with this statutory requirement, the regulatory program
    decisionmaking process involves an evaluation conducted pursuant to the
    CWA section 404(b)(1) guidelines and a public interest review. These
    requirements are intended to ensure that proposed discharges into
    waters of the United States are not contrary to the public interest and
    do not result in unacceptable adverse impacts to the aquatic
    environment. The regulatory process is informed by the applicant as
    well as information provided by State and Federal regulatory and
    resources agencies, the local community and other interested
    stakeholders.
        In the case of CD-5, COE worked with Conoco Phillips Alaska Inc.
    (CPAI), the State of Alaska, and the local community stakeholders since
    2004 toward identifying a proposal that could potentially be approved
    for a permit. During those years, CPAI requested the application review
    process be suspended on occasion, as they made changes to their
    proposed project; and so they could continue to work with the local
    community stakeholders to come to a local agreement about access to the
    CD-5 area without impacts to subsistence use and local jobs, and to
    provide mitigation/compensation for social impacts to those
    communities, to name a few. COE worked diligently with CPAI to find a
    way to avoid and minimize impacts to jurisdictional waters. In
    addition, COE made numerous requests for information that would allow
    them to evaluate portions of the CD-5 project. It is the applicant's
    responsibility to supply all required and necessary information and to
    clearly demonstrate that their proposal is the least environmentally
    damaging practicable alternative. CPAI did not provide the information
    required to rebut the presumption that another alternative with less
    environmental impacts on aquatic resources did not exist.
        It is the responsibility of the regulatory program to take an
    unbiased look at each and every project, weigh the detriments and
    benefits and make a decision based on the law and regulations, public
    interest factors, and the purpose and need for a project. The
    decisionmaking process ends in one of several ways:
      --permit issuance;
      --permit issuance with conditions;
      --the applicants' withdrawal of their application; or
      --permit denial.
        COE works with applicants and the agencies to protect aquatic
    resources by ensuring that project proposals avoid and minimize
    unnecessary impacts and mitigate for unavoidable impacts. This process
    enables the agency to make favorable decisions on 99 percent of the
    applications received, and works as the Congress intended.
        Question. Is it possible to build a bridge, perhaps one of higher
    elevation or with better placed supports, through an area with an ARNI
    designation?
        Answer. ARNI designation does not prohibit an activity or a
    discharge in these aquatic resources, including building a bridge
    through an area identified as an ARNI. COE recognizes that if the
    resource agencies identify an area as an ARNI, that this term implies
    that the resource may be high quality, rare, unique, or have economic
    importance for fish and wildlife species, and that proposed impacts to
    these important aquatic resources should be carefully evaluated.
        Section 404(b)(1) of the CWA requires that only the LEDPA may be
    permitted, so long as that alternative does not have other adverse
    environmental consequences. COE denied the permit because it determined
    based on information provided by the applicant, input from the public
    and Federal resource agencies that a roadless alternative with
    horizontal directional drilling (HDD) would be the LEDPA.
                                     ______

        Questions Submitted to Lieutenant General Robert L. Van Antwerp
                Questions Submitted by Senator Dianne Feinstein

                 coe deg.HARBOR MAINTENANCE TRUST FUND

        Question. It is my understanding that the Harbor Maintenance Trust
    Fund has a significant surplus. The budget request states the
    administration will be making a proposal concerning the Harbor
    Maintenance Trust Fund to the Congress. As I understand it, this
    proposal will allow other agencies that are conducting port related
    activities to charge those activities to the Trust Fund.
        Could you explain this proposal a little further?
        Answer. Several Federal programs support commercial coastal
    navigation (primarily Corps of Engineers [COE], Coast Guard, Federal
    Emergency Management Agency [FEMA], Customs, National Oceanic and
    Atmospheric Administration, and Department of Transportation), in a
    variety of ways. The fiscal year 2012 budget proposes to expand the
    authorized uses of the Harbor Maintenance Trust Fund (Trust Fund)
    receipts, so that they are available both for harbor maintenance and to
    finance the Federal share of other Federal activities that support
    commercial navigation through our ports. Spending would continue to be
    subject to annual appropriations decisions, just financed from the
    Trust Fund instead of the General Fund. The proposal would not limit
    the amount of annual spending for any specific purpose or program, such
    as harbor maintenance.
        Question. How does this proposal improve our Nation's harbors? It
    sounds like the same things will be accomplished but accounting for the
    costs will be different. Am I missing something?
        Answer. The proposal would support investments that contribute to
    the strength of the American economy. It would facilitate the
    development of a comprehensive investment strategy, improve the
    allocation of resources to and among multiple agencies, and provide
    transparency on the extent of the Federal support.
        Question. Won't this rapidly deplete the Trust Fund balance?
        Answer. The proposal is still under development. We expect the
    Trust Fund to retain a workable balance. We would work with the
    Congress to decide which other Federal coastal navigation efforts are
    covered. The extent of the long-term effect on the size of the Trust
    Fund balance would depend upon which other Federal activities are
    included.
        Question. When the trust fund is depleted by these new activities,
    how will we maintain the harbors and waterways that are currently
    funded through the Trust Fund?
        Answer. We expect the trust fund to retain a workable balance.
    However, if it were to be depleted at some future date, the Congress
    would then decide how to fund the Federal coastal navigation efforts,
    including those of COE.
        Question. Assuming these other activities will continue to be
    funded from the Trust Fund, will maintenance of these waterways be
    further restricted due to lack of funding in the Trust Fund?
        Answer. That is not our intent or expectation. In fact, there could
    be more dredging under the proposal. In our view, the overall funding
    level that the Federal Government provides to COE for maintenance
    dredging and related purposes should be determined independent of the
    level of the Harbor Maintenance Tax receipts. More specifically, the
    allocation of these funds should reflect consideration for the economic
    and safety return, as well as a comparison with other potential uses of
    the available funds.
        Question. The budget request states a number of times that you are
    addressing the highest-priority needs. It is also my understanding that
    the budget proposal does not provide for full authorized widths and
    depths to be maintained at any harbor maintained by COE. Has there been
    any calculation of the economic impacts by not fully dredging all of
    Nation's ports?
        Answer. There has been no calculation of the economic impacts of
    not fully dredging all of the Nation's ports. Maintenance of existing
    navigation channels to fully authorized dimensions would reduce the
    cost of some ship movements, but would not necessarily increase the
    total throughput capacity of the ports. The fiscal year 2012 budget for
    COE includes $758 million from the Trust Fund to support the
    maintenance of coastal harbors and their channels and related work. To
    make the best use of these funds, COE evaluates and establishes
    priorities using objective criteria. These criteria include
    transportation cost-savings, risk reduction, and improved reliability--
    all relative to the cost. Our objective is to provide operational
    capabilities and efficiencies, with a focus on the most heavily used
    commercial channels (carrying more than 10 million tons of cargo/year),
    which together carry about 90 percent of the total commercial cargo
    traveling through our coastal ports.
        Question. It would seem that if the administration goal is to
    double exports, that fully dredging our ports and waterways would be an
    essential step in making this goal a reality. Am I missing something?
        Answer. Maintenance of existing navigation channels to fully
    authorized dimensions would reduce the cost of some ship movements, but
    would not necessarily increase the total throughput capacity of the
    ports. The fiscal year 2012 budget for COE gives priority to the
    maintenance of the Nation's large deep-draft harbors. The budget also
    includes $65 million for the ongoing deepening of the port of New York/
    New Jersey; $42 million for construction/expansion of dredged material
    placement facilities at the ports of Norfolk, Virginia; Savannah,
    Georgia; and Jacksonville and Tampa, Florida in order to continue
    maintenance of the deep draft channels serving these ports; $600,000
    for preconstruction engineering design of Savannah Harbor expansion,
    Georgia; and $726,000 for a channel improvement study at Brazos Island
    Harbor (Brownsville), Texas.

                          coe deg.DAM SAFETY

        Question. Dam safety is of critical importance to our Nation and
    particularly California. Currently there are three dams in California
    in the most at-risk category.
        Could you explain COE's criteria on how projects are ranked related
    to risk?
        Answer. COE uses a dam safety portfolio management process that
    continually monitors and assesses the condition and risk associated
    with all COE dams and assigns a Dam Safety Action Classification
    (DSAC). The priority for funding is focused on addressing the highest-
    risk dams with the most cost-effective risk reduction alternatives for
    all DSAC I, II, and III projects. DSAC I dams have been determined to
    have a confirmed urgent and compelling issue that requires taking
    immediate and expedited actions to reduce and manage the risk.
    Therefore, DSAC I dams with life safety consequences are given first
    priority. For prioritization within DSAC II and III projects,
    significant weight is given to the quantitative tolerable risk
    guidelines, but other nonquantitative considerations, including As Low
    as Reasonably Practical (ALARP), are also used for a more complete
    basis. The greater the estimated annual probability of failure and the
    further the estimated life risk is above the tolerable risk limit, then
    the greater the urgency to act. Further detail on ranking criteria is
    available in Draft ER1110-2-1156, Chapter 6.3. Draft version of ER
    1110-2-1156 has been released as interim guidance to the field. The
    regulation is available for download at http://www.usace.army.mil/CECW/
    Documents/cecwe/er1100_21156_1nov10.pdf.
        Question. Can you explain what risks these dams and the people
    below them are facing and what actions are taken to reduce risks while
    studies are undertaken and corrective plans formulated?
        Answer. COE executes its project purposes guided by its commitment
    and responsibility to public safety. It is after public safety
    tolerable risk guidelines are met that other purposes and objectives
    are considered. COE dams are geographically widely spread across the
    Nation and exhibit varying degrees of deficiency and life-safety risk.
    Interim Risk Reduction Measure Plans (IRRMP) are the key documents that
    frame operational decisionmaking for high-risk dams (DSAC I, II, and
    III). Structural and nonstructural alternatives for the interim risk
    reduction measures are evaluated for effectiveness to reduce the
    probability of failure and/or consequences associated with the failure
    modes. Reservoir pool restrictions, modification of reservoir
    regulation plan, and updating of Emergency Action Plans (EAPs) are
    always evaluated as options. The IRRMPs establish the specific
    threshold events, decision points, and actions required. COE discusses
    issues consistently and openly with affected stakeholders upstream and
    downstream of our structures.
        Question. These studies seem to take an inordinately long time,
    particularly for high-risk dams. For instance, Lake Isabella in my home
    State has been under study for the last 6 years. Isn't there a way to
    accelerate these studies so the remediation work can get started?
        Answer. The risk-informed approach that COE is implementing will
    allow focus on our most critical deficiencies. This focus will provide
    a more expedited repair to our worst issues. Given the multiple
    purposes of most COE dams and the long-term benefits provided, the
    projects will still require thorough analysis of any modification to
    assure public safety by modification to the dam. Dam analysis and
    designs are complex technical efforts. Risk assessments must be
    performed to understand the extent of a problem and to evaluate options
    to fix the dams. In many cases, COE dams have multiple deficiencies
    which increase the complexity of repair.
        Question. Your budget proposes $436.7 million for repairs to 10
    projects and an additional $37.2 million to continues studies on other
    dams that have various risk ratings. Repairs on some of these projects
    are multi-year and, in many cases, extremely expensive--with the
    repairs often costing more than the original dams. Does COE have
    additional capability for dam safety work in fiscal year 2012?
        Answer. All DSAC I projects that are ready for construction, and
    some DSAC II projects, are funded at the maximum rate that COE can
    efficiently and effectively use funds. Decisions on the funding for
    other dam safety projects (other DSAC II projects and all DSAC III
    projects) include consideration of budgetary and technical resources as
    well as other factors.
        Question. Your budget proposes $27.6 million for evaluation studies
    and lists 100 different dams where these studies would be conducted.
    That works out to about $275,000 per study. That seems very low. Can
    you explain this better?
        Answer. The fiscal year 2012 budget will progress study efforts at
    73 projects with levels of effort ranging from $50,000 to $800,000. The
    prioritization and funding amount is re-evaluated quarterly to adjust
    to incidents, study progress, successful performance during flood
    events, and other relevant information.
        Question. Is this a list of potential studies that will be
    undertaken or will all 100 be underway in fiscal year 2012?
        Is it also fair to assume that when these projects were formulated
    prior to authorization and construction, that the 50-year maintenance
    costs were factored into the benefit cost ratio that led to their
    authorization and construction?
        Answer. An estimate of the 50-year maintenance costs has been
    factored into the benefit-cost ratios for projects proposed by COE
    under the 1983 Principles and Guidelines and prior planning guidance.
        Question. Further, the budget request proposed $9.5 million to
    undertake post-evaluation work. However, there is no description of
    what this post evaluation work is or which projects it would be
    undertaken on. Can you provide some more information?
        Answer. Dam Safety Modification reports for Addicks and Barker Dams
    (DSAC Is) are scheduled to be approved in fiscal year 2012 and Pre-
    Construction Engineering & Design (PED) for these dams will be
    initiated in fiscal year 2012. COE is initiating PED and some limited
    site preparation construction on Bolivar and East Branch Dams (DSAC
    IIs) that have approved Dam Safety Modification reports, but that will
    not be funded for construction until fiscal year 2013.
        Question. With the number of dams that are considered high risk and
    the decline of your budget request over the last 3 years, how are your
    future budgets going to be able to accommodate these increasing costs?
        Answer. The Army manages risks across a broad portfolio of
    structures, with the objective of reducing the overall portfolio risk.
    The decision on priorities in project queues is risk informed and
    performed from a national perspective. Over much a longer period than
    just the past 3 years, the budget has consistently funded all DSAC I
    projects and some DSAC II projects at the maximum rate that COE can
    efficiently and effectively use funds.
        There are 10 continuing DSAC I and II dam safety projects funded in
    the fiscal year 2012 budget for a total of $436.7 million. This funding
    is allocated within the construction appropriation. As additional high-
    risk dams are identified we will work to address them as well. We
    expect to continue funding all DSAC I projects that are ready for
    construction, and some DSAC II projects, at the maximum rate that COE
    can efficiently and effectively use funds.

                          coe deg.SMALL PORTS

        Question. Your budget request cuts funding to many small ports and
    harbors across the country. Can you tell us a little about the criteria
    used to determine those cuts?
        Answer. Navigation projects were categorized as high, moderate, and
    low commercial navigation use based on commercial tonnage. Funding is
    focused on high and moderate navigation projects (coastal projects
    carrying at least 1 million tons of cargo and inland waterways with at
    least 1 billion ton-miles of traffic), which move 99 percent of the
    Nation's waterborne commercial cargo. The low-use projects funded in
    the fiscal year 2012 budget were selected with the intent to optimize
    use of the available funds for such projects across a range of uses
    including critical harbors of refuge, subsistence harbors, projects
    with Coast Guard Search and Rescue stations, energy-delivery projects
    such as home heating oil where marine transportation is the only means
    to make the deliveries and navigation projects with significant, albeit
    less than 1 million tons of commercial cargo.
        Question. Was the criteria that you used for determining your
    budgetary priorities for fiscal year 2012 contemplated when these
    projects were originally formulated, authorized and constructed?
        Answer. No. The prioritization criteria for the Operation and
    Maintenance program consider the current use of a project and a variety
    of other factors, in order to assess how the return on a further
    investment to the Nation in maintenance compares with other potential
    uses of those funds.
        Question. Was it safe to assume that if the project was
    economically justified, that the administration would budget for
    maintenance of the project as appropriate?
        Answer. No. However, if the construction of the project was found
    by the executive branch to be economically justified at that time, the
    administration generally will consider the project for funding.
        Question. Can we, for argument's sake, assume that nearly all the
    projects that were not budgeted in fiscal year 2012 were economically
    justified, when construction was completed?
        Answer. No. Many projects were authorized without an approved COE
    report. Others are not being funded due to policy concerns that arose
    prior to their construction.
        Question. This would mean that all of these unbudgeted projects
    were determined to accrue benefits to the national, as well as, the
    regional and local economies, am I correct?
        Answer. Many, but not all, of the projects would have a COE report
    that estimates that the project would accrue net benefits. However, key
    assumptions in these reports may be open to question. For example,
    benefit estimates for a proposed navigation project generally rely on a
    speculative projection of future traffic levels.
        Question. Was there any analysis to determine if the ports were
    moving the tonnage projected in the documents that led to authorization
    and construction of the projects?
        Answer. COE has not conducted such an analysis as this would be a
    large undertaking for an inventory of more than 1,000 navigation
    projects.
        Question. It would seem to me that if a port was meeting its
    tonnage projections, that it would most likely be meeting the economic
    projections from the original analysis conducted prior to
    authorization. Is it safe to assume that some of these small ports
    would have had small tonnage amounts projected, but yet were still
    considered economically justified?
        Answer. Some of these ports would have been justified based on
    tonnage projections. However, even where the tonnage is on track with
    projections, dredging costs have increased dramatically since many
    projects were authorized. Also, the economic analysis in these reports
    generally does not account for the effects of funding limitations.
        Question. Then how can you not budget for a port that is meeting
    tonnage projections?
        Answer. The fiscal year 2012 budget seeks to allocate the available
    Federal funds to the activities that will have the highest return on
    investment to the Nation.
        Question. Was there any analysis of the impacts to the national,
    regional, and local economies of not funding these ports and harbors in
    your budget?
        Answer. No, this would be a large undertaking with an inventory of
    more than 1,000 projects.
        Question. It appears that your criteria being based solely on
    tonnage would put many ports at a disadvantage to even be considered
    for funding. How do you justify this criteria?
        Answer. While most economists agree tonnage is not a direct measure
    of the economic benefit, it is a good first-order approximation and
    there is little agreement on an alternative.
        Question. Wouldn't some type of economic analysis be in order to
    determine the value of these ports to the national, State, and local
    economies rather than basing your decision solely on tonnage?
        Answer. We are working to allocate the funds as best as possible.
    There is also a cost associated with more analysis. However, COE
    continues to develop analytical tools to help determine whether
    additional spending for harbor maintenance and related activities is
    warranted based on the economic and safety return, as well as a
    comparison with other potential uses of the available funds.
        Question. Wouldn't the economic value of these ports be a better
    indicator of where maintenance funding should be concentrated?
        Answer. We are open to considering other factors. However, in
    allocating maintenance funds, we are mostly trying to find the best use
    of an incremental investment above or below the amounts that we are, or
    are not, already providing.

                          coe deg.NEW STARTS

        Question. For fiscal year 2011 you proposed two new construction
    starts for a total of $29 million. These two starts, if they are
    started, require outyear funding in excess of nearly $2 billion. For
    fiscal year 2012, you have proposed two more new construction starts
    that will require outyear funding in excess of $120 million. With the
    declines in your budget requests that have been recommended in the last
    3 years, how do you expect these projects to be funded in future years?
        Answer. In the out-years, they would continue to compete for
    funding, as they did successfully in the development of the fiscal year
    2011 and fiscal year 2012 budgets. Also, the $2 billion total for the
    two fiscal year 2011 new construction starts mostly reflects the cost
    of authorized work under the Louisiana Coastal Area ecosystem
    restoration program to address the effects of large and continuing
    wetland losses on the ecosystem. Each year of delay could complicate
    the long-term restoration effort.
        Question. How were the two ``new starts'' in the President's budget
    selected? What criteria were used?
        Answer. Raritan to Sandy Hook (Port Monmouth), New Jersey,
    qualifies as a ``Risk to Life'' new start. This project addresses a
    significant risk to human safety and damage to property resulting from
    increased flood exposure, shoreline erosion, and increased exposure of
    the shore and inland areas to tidal inundation and wave attack damages.
    This increased exposure, combined with runoff from coastal creeks,
    results in increased danger of high flood depths and water velocities
    with little warning time.
        Hamilton City, California qualifies as an ecosystem restoration new
    start predominantly because it connects four other restored
    environmental areas, thereby providing a larger continual habitat
    corridor. This project will also provide ancillary flood risk
    management benefits to Hamilton City and nearby agricultural lands.
        Question. The new study starts that you have proposed are all
    ecosystem restoration studies. Are there no new flood control or
    navigation studies that warrant the administration's support?
        Answer. While there are many potential flood control and navigation
    new study starts, the four new study starts proposed for the budget
    were considered to be a higher priority.
        Question. What did the administration hope to demonstrate through
    selection of these particular projects?
        Answer. The four new studies (in addition to those proposed in
    fiscal year 2011) include:
      --Englebright and Daguerre Point Dams (Yuba River) Fish Passage,
            California;
      --Cano Martin Pena, Puerto Rico;
      --the Chesapeake Bay Comprehensive Plan; and
      --the Louisiana Coastal Area Comprehensive Study.
        Three of these studies were proposed as new starts because they
    will examine ways to contribute to restoration and increased
    sustainability of ecosystems that were part of last year's interagency
    collaborative planning initiative. The study of Cano Martin Pena,
    Puerto Rico will examine ways to provide critical estuarine habitat
    restoration and move people out of a floodway.
        Question. It is my understanding that more than half of the Chief
    of Engineers reports expected to be submitted to the Congress this year
    are ecosystem restoration studies. Doesn't this indicate an unbalanced
    program if the majority of studies being produced are for ecosystem
    restoration rather than the more traditional COE's missions of flood
    control and navigation?
        Answer. The distribution of Chief's reports among mission areas
    will vary year to year. The number of reports in any one year is not an
    appropriate indicator of the makeup of the construction program. Also,
    the budget funds studies and preconstruction engineering and design
    work for many proposed flood control and navigation projects.

                       coe deg.LEVEE VEGETATION

        Question. COE is developing new national policies for the allowance
    and/or removal of trees and other vegetation from levee projects.
    Meanwhile, COE has participated in a collaborative effort with the
    State of California to develop vegetation-removal guidelines for the
    Central Valley. This collaborative effort holds promise for reaching a
    reasonable and balanced program for assuring levee integrity and, at
    the same time, taking into consideration unique circumstances and
    resources found in many areas in the Central Valley, and COE's past
    involvement with the region's levees. What is the proposed timing on a
    revised draft vegetation variance process and when does COE plan to
    have a final policy?
        Answer. COE's goal is to work with resource agencies, such as the
    National Marine Fisheries Service, U.S. Fish and Wildlife Service, and
    the Environmental Protection Agency, and levee owners to transition
    noncompliant levees to COE standards, including vegetation standards.
    Achieving this goal will allow us to jointly maintain public safety,
    ensure eligibility under Public Law 84-99 for assistance in making
    repairs after a flood, and comply with Federal environmental laws.
        Noncompliant levee vegetation may affect the safety, structural
    integrity and function of the levees, could obstruct visibility for
    inspections, impede access for maintenance, and could block emergency
    flood fighting operations. Clear vegetation policies, standards, and
    practices are critical to an effective life-cycle flood risk management
    program.
        The vegetation variance policy referenced in the question was
    originally issued in 1997 to implement section 202(g) of the Water
    Resources Development Act of 1996. The policy recognizes that there may
    be some instances where vegetation may preserve, protect or enhance
    natural resources and/or protect the rights of Native Americans. This
    variance process is designed to accommodate those special cases when it
    is possible to do so while still maintaining the safety, structural
    integrity and function of the levees, and allowing access for
    inspection and flood fighting. In August 2009, COE began revising this
    vegetation variance request process to reflect current organizational
    changes and levee safety program principles such as utilizing agency
    technical reviews, applying a systems approach, and ensuring COE levee
    safety technical leads are part of the process.
        Due to strong interest from sponsors in how changes to this
    vegetation variance request process may impact them, COE solicited
    comments on the proposed revisions through the Federal Register, with a
    notice and comment period from February 9, 2010 to April 26, 2010. COE
    received more than 500 comments from more than 100 separate
    organizations and individuals. As a next step, COE is considering
    whether to post, for the second time, a revised draft vegetation
    variance request policy for public comment.
        Question. Out of the hundreds or thousands of levee failures over
    the years, how many (and what percent) were caused by vegetation on a
    levee?
        Answer. It is very difficult to determine after the fact whether
    one factor, such as vegetation, can be attributed to the cause of a
    levee breach, unless it was observed, documented, and studied during
    the actual failure. Because direct impacts of vegetation on levees
    cannot be quantified, potential impacts are based on field
    observations. COE is aware of instances in which vegetation has been a
    hindrance to inspections, monitoring, and flood fighting during a flood
    event. Moreover, vegetation can obstruct the ability to detect
    indicators for a potential levee breach, such as seepage.
        Question. As part of the vegetation variance process, is COE
    willing to consider regional variances which address vegetation
    management within the context of unique geographic settings such as
    exist in California?
        Answer. COE recognizes that just as no two regions are the same
    ecologically, no two levee systems are the same from an engineering
    perspective. The current draft policies allow for the consideration of
    the unique engineering and environmental context of particular levee
    systems to develop vegetation management solutions that address both
    levee safety and natural resource requirements. The ultimate goal is to
    work with resource agencies and levee owners to transition noncompliant
    levees to COE's standards, which may include obtaining vegetation
    variances or identification of other solutions to fit the specific
    regional conditions. For example, since 2008, COE and California have
    been engaged in the California Levee Roundtable, a collaborative
    partnership of Federal, State, and local organizations that facilitates
    the consideration of the local environmental and engineering context to
    develop systemwide levee solutions throughout the region. COE hopes to
    be able to continue this collaborative process with willing State
    participants.
        Question. Is COE willing to consider regional variances which
    prioritize vegetation management with respect to all risk factors,
    without inhibiting or delaying the remediation of higher-priority risk
    factors?
        Answer. COE supports prioritizing how and when levee deficiencies
    are addressed based on risk. This approach has been integrated into the
    COE systemwide improvement framework policy. This policy provides an
    opportunity for local levee authorities to use an interagency approach
    to identify solutions that optimize resources, and to sequence
    improvements and corrective actions based on risk. This approach is
    available to the Central Valley levees through the California Levee
    Roundtable.
        Question. Is COE willing to consider regional variances which
    provide clear guidance on the level of detail needed for a variance,
    how that detail will be evaluated, and an appeal procedure should COE
    and the local sponsor disagree on the outcome of the process?
        Answer. The most recent revisions to the draft vegetation variance
    process are designed as a collaborative approach through which there
    will be early determination on the most viable approach to meeting COE
    policies and standards while complying with applicable laws,
    regulations, and treaties. The intent is that any conflicts or issues
    should be raised and resolved during the collaborative process as
    opposed to having a formal appeal process. As such, it is likely that a
    decision to pursue a vegetation variance could be identified early in
    the process, diminishing the need for extensive environmental and
    engineering analysis. For situations in which the levee sponsor would
    like to pursue a vegetation variance request, more detail has been
    added to the technical requirements in the draft policy so the levee
    sponsor can better estimate the cost requirements. Though the review
    and approval process remains the same, COE believes these steps are
    necessary to make a well-informed decision about a levee system that is
    providing economic and safety benefits to the public living behind the
    levee.
        Question. How does COE intend to evaluate, disclose, and address
    the impacts of this process on the environment and endangered species
    impacts?
        Answer. COE recognizes that in carrying out its responsibility to
    promote safety and reduce the risk of damage to property through
    structurally sound levees, the agency must address environmental and
    natural resource needs through compliance with all applicable laws,
    regulations, and treaties. COE will comply with all applicable
    environmental requirements in implementing the policy for requesting a
    variance from COE vegetation management standards for levees and
    floodwalls.
        COE believes that the best approach is to review the environmental
    impacts of the application of specific standards as they are applied to
    site-specific circumstances. With this approach, COE recognizes that
    each levee is a unique flood risk reduction system that operates within
    the broader and equally unique local ecosystem. This approach also
    recognizes that the analysis of potential environmental impacts is
    dependent upon future, undetermined actions and decisions of the levee
    sponsors who operate and maintain the levee systems.
        When environmental requirements are triggered as COE makes
    decisions on the inspection standards applied to specific levee
    systems, the COE will work closely with the levee sponsors, appropriate
    resource agencies and tribes, as well as other interested parties to
    complete the required environmental compliance.
        Question. Many encroachments that do not comply to new policies,
    including but not limited to trees, in California's levee systems were
    either installed, permitted, or required by COE. In other cases the
    encroachments existed at the time the completed Federal project was
    turned over to non-Federal sponsors for operation and maintenance.
    Under COE's new policies (or new implementation of old policies) how
    will the COE's share responsibility for addressing the construction and
    environmental costs of compliance?
        Answer. ``Encroachments'' are features such as fences and utility
    lines requested by the non-Federal sponsor to be added within the levee
    system project real-estate easement after project completion.
    Encroachments and vegetation are handled differently under COE
    policies. COE has a well-defined encroachment permit process.
    Unpermitted encroachments will be the responsibility of the non-Federal
    sponsor to correct, including construction costs and environmental
    compliance. For vegetation, related policies are still under review and
    not yet final. However, in the final policy COE intends to clearly
    identify responsibilities of the non-Federal sponsor and COE, including
    situations when COE will be responsible for addressing the cost of the
    vegetation (both corrective actions and environmental compliance).
        Question. California's Department of Water Resources (DWR)
    developed a rough cost estimate that compliance with COE's vegetation
    guidance would cost about $7 billion for 1,600 miles of Federal levees
    in the Central Valley. If that is correct, would you think that
    compliance is a good investment?
        Answer. The California DWR also has said that given the overall
    condition of the levees in the Central Valley, higher-risk deficiencies
    such as underseepage, structural instability, and erosion should be
    addressed first. In general, COE agrees with this assessment. COE
    supports DWR's goal to leverage resources by prioritizing levee
    remediation in order to maximize improving safety. COE is currently
    working with DWR to incorporate such prioritization as part of the
    State's long-term strategy for levee improvements that will be outlined
    in the California Central Valley Flood Protection Plan.
        Question. Does COE have its own cost estimates for compliance with
    its vegetation guidance?
        Answer. No, meeting COE vegetation management standards is an
    operation and maintenance responsibility typically implemented by a
    local levee sponsor.
        Question. Will section 104 credit and section 408 approval be
    available for projects that do not meet the Levee Vegetation ETL, as
    long as non-Federal partners are addressing higher-risk factors. How
    will this be manifested in COE processes?
        Answer. COE supports modifications that will improve the levee
    system and recognizes it may not be possible for a local levee sponsor
    to address all deficiencies at one time. The determination for credit
    (now considered under section 2003 of WRDA 2007, not section 104) or
    section 408 approval for levees that do not meet COE standards for
    vegetation will be evaluated on a case-by-case basis. Further, the
    vegetation variance request process and the section 408 approval
    process can be combined where appropriate.

                      coe deg.LEVEE CERTIFICATION

        Question. It is my understanding that you have or are planning to
    implement an engineering circular entitled ``USACE Process for the
    National Flood Insurance Program Levee System Evaluation''. This EC for
    the first time establishes a 10-year time limit for levee
    certification.
        Can you tell us how you arrived at this 10-year limit, whether
    stakeholders were involved in that process?
        Answer. Currently there is no FEMA requirement for periodic review
    of levee certifications. Until FEMA policy is established, it is
    recommended that, for every certification issued by COE after 10 years,
    the certification should be reviewed or verified. Flood risk and levee
    conditions can change over time and it is important to ensure that a
    levee still meets expected requirements. The 10 years is to serve as a
    maximum timeframe between certification determinations. A certification
    can be reviewed any time before the 10 years, if it is of professional
    opinion there are indications that the project may no longer meet levee
    certification requirements. Throughout development of this EC,
    stakeholders were provided opportunities to provide input.
        Question. What do you see as the process going forward for those
    levees whose certification is older than 10 years, and can you give us
    a sense of how this decertification effort will impact COE's civil
    works budget?
        Answer. It is a local community's responsibility to provide FEMA
    documentation that a levee meets NFIP criteria for flood mapping
    purposes. COE does not anticipate any impacts from this effort on the
    Civil Works budget because we do not budget for levee certification.

                 coe deg.CALIFORNIA-SPECIFIC QUESTIONS

        Question. The U.S. Geological Survey (USGS) has told my office that
    there is a high probability that a moderate to severe earthquake could
    lead to the failure of more than one-half of the levees in the
    Sacramento Delta. According to the 2009 Delta Risk Management Strategy
    developed by the California DWR using USGS data: ``an earthquake of
    magnitude 6.7 or greater has a 62 percent probability of occurring in
    the San Francisco Bay Area between 2003 and 2032. Such an earthquake is
    capable of causing multiple levee failures in the Delta region which
    could result in fatalities, extensive property damage and the
    interruption of water exports from the Delta for an extended period of
    time.''
        What actions has COE taken to reduce the risk of major, multiple
    levee failures in the Sacramento Delta?
        Answer. COE is partnering with the State of California and the
    Bureau of Reclamation (BOR) as described below on the following
    initiatives related to improving the levee system in the Sacramento-San
    Joaquin Bay-Delta:
          Geographic Information System (GIS) Contingency Mapping and
            Emergency Response Planning.--A Memorandum of Agreement (MOA)
            was signed between COE and the California Department of Water
            Resources (DWR), allowing COE and DWR to initiate phase 1 of
            GIS Flood Contingency Mapping and Emergency Response Planning
            for the Delta region. The team met with Delta counties in
            August 2010 to gather input on concepts for the GIS products,
            response report, and related data. The second round of meetings
            were held in November 2010 to present the 35 percent complete
            product, validate data collected thus far, and gather
            additional information from county and RD representatives.
            During July 2011, the PDT met with State and local
            representatives to review the 65 percent product. The 100
            percent product is expected in fall 2011. This will constitute
            the end of our phase I of GIS Flood Contingency Mapping and
            Emergency Response Planning for the Delta region. The products
            will be immediately useful for emergency response planning and
            will include:
        --Standardized GIS database of Emergency Management data;
        --Flood Contingency Map Books and large-scale wall maps of the
                Delta region; and
        --An accompanying report documenting the existing framework,
                existing data, and any potential data gaps.
          In May 2011, COE, along with other State, Federal, and local
            agencies, participated in the California Emergency Management
            Agency-led 2011 Golden Guardian Exercise. This year included a
            3-day Full Scale Exercise based on a major flood in
            California's Inland Region (Delta).
          Delta Islands and Levees Feasibility Study.--The Delta Islands
            and Levees Feasibility Study (Delta Study) is a cost-shared
            study to explore potential solutions to address ecosystem
            restoration needs, flood risk management problems, and related
            water resources issues in the Delta and Suisun Marsh area. The
            President's fiscal year 2012 budget includes $1.015 million for
            this feasibility study. A Feasibility Cost Share Agreement
            (FCSA) was executed in May 2006 with the California DWR, the
            non-Federal sponsor. The COE-DWR study team meets regularly to
            move the study forward and holds periodic Agency Coordination
            Meetings with associated Federal, State and local agencies,
            including BOR.
          On August 11, 2011, COE will participate in an interagency
            meeting to discuss preliminary Sacramento--San Joaquin Delta
            Modeling. The objective of this modeling is ``to develop
            representative hydrodynamic, sediment transport, water quality,
            and ecosystem models that enable COE's Sacramento District to,
            with solid scientific support, understand the system-wide
            impact of natural and purposeful changes to the Delta and allow
            it to proactively manage these vital water resources.'' We
            expect the basic model to be completed by December 2011. This
            will be a useful tool to aid project planning and emergency
            response planning in the Delta.
          The feasibility study will culminate in a feasibility report that
            will make recommendations on possible solutions and next steps.
          Interagency Federal Action Plan.--On a broader level, COE
            supports the Interagency Interim Federal Action Plan for the
            Bay-Delta (December 2009) and its Update (November 2010). The
            Action Plan consists of studies, programs, and actions that
            address essential Bay-Delta issues including helping to ensure
            integrated flood risk management. The Bay Delta Conservation
            Plan (BDCP) has been identified as a priority effort by the
            State and in the Interim Federal Action Plan. COE's Regulatory,
            Operations, and Planning Programs regularly participate in
            coordination related to the BDCP. Regulatory and operations
            have proactively engaged the State, BOR, and others to ensure
            that they understand Clean Water Act section 404 and section 10
            and section 14 of the River and Harbors Act permitting
            requirements and processes that may be required for the BDCP.
            COE also participates in interagency (State-Federal) groups
            focused on advancing science to inform management decisions,
            including those related to levees, in the Bay-Delta.
        Question. How does COE prioritize which levees it repairs?
        Answer. In coordination with local and State partners, mainly the
    California DWR, COE prioritized levee improvements in the 2006 ``Report
    to Congress'' based on risk associated with levee failure (protection
    of life, property, infrastructure, etc.). Ongoing project
    prioritization is based on how well each project met environmental,
    economic, and other implementation criteria including availability of a
    local cost-share partner. The Delta Islands and Levees Feasibility
    Study will make recommendations to address flood risk management for
    the Delta as a system.
        Question. When prioritizing levee repairs, has COE taken into
    account which levees are most likely to allow salt water to enter the
    fresh water supply for 20 million Californians should the delta levees
    fail?
        Answer. System-wide assessments and recommendations, including
    impact of delta levee failure on the freshwater supply, will be
    evaluated under the Delta Islands and Levees Feasibility Study. The
    2006 ``Report to Congress'' considered risk to water supply.
        Question. Does COE have an estimate of the overall damage,
    including loss of the fresh water supply, and cost to repair the levees
    should a serious earthquake strike northern California?
        Answer. COE does not have a current estimate of the overall damage,
    including loss of the fresh water supply, and cost to repair the
    levees. This will be evaluated under the Delta Islands and Levees
    Feasibility Study. The California DWR published a report that does
    provide an estimate. This effort is the State's in-kind cost-share for
    the Delta Islands and Levees Feasibility Study.
        Question. Does COE have an estimate of how much it would cost to
    reduce the risk of massive levee failure from ``high'' to ``moderate''
    or ``low''?
        Answer. No. This will be evaluated under the Delta Islands and
    Levees Feasibility Study.
        Question. The maritime industry in California carries more than 40
    percent of the Nation's waterborne international cargo. Recent studies
    by COE show that there is more than $400 million worth of cargo
    disrupted for every foot of reduced depth of channel. However, while
    dredging costs on a per-yard basis have increased 160 percent
    nationally over the past decade, ports across California and the Nation
    have not been provided adequate funding to maintain their
    congressionally authorized dredge depths. Why is it that numerous
    Federal channels in California are not at their congressionally
    authorized depth and width?
        Answer. Navigation channels rarely have full depth and width
    available. At present, only 2 of the top 10 navigation projects in COE
    inventory have full depth and width available. These two projects (both
    are in the State of California) are, in large part, naturally deep and
    do not require significant maintenance dredging.
        Question. How does the President's budget request for fiscal year
    2012 achieve the goals of maintaining the channels in California to
    their authorized depth and width as well as meeting the President's
    National Export Initiative?
        Answer. The President's fiscal year 2012 budget includes $8.75
    million in the operation and maintenance account for the Oakland
    Harbor, and $8.15 million for the Richmond Harbor; as well as $350,000
    in the construction account to continue work associated with the
    construction of the Oakland Harbor 50 feet deepening. These efforts
    support commercial use of deep draft navigation projects (1million tons
    of commercial cargo or more per year) as follows: the Oakland Harbor
    has 17 million tons of commercial cargo per year and the Richmond
    Harbor has 25 million tons of cargo per year.
        In addition, the President's fiscal year 2012 budget includes $65
    million for the ongoing deepening of the port of New York/New Jersey;
    $42 million for construction/expansion of dredged material placement
    facilities at the ports of Norfolk, Virginia; Savannah, Georgia; and
    Jacksonville and Tampa, Florida in order to continue maintenance of the
    deep draft channels serving these ports; $600,000 for preconstruction
    engineering design of Savannah Harbor expansion, Georgia; and $726,000
    for a channel improvement study at Brazos Island Harbor (Brownsville),
    Texas. The budget also includes $580 million in the Operation and
    Maintenance appropriation to maintain our high and moderate commercial
    use deep draft navigation projects that support 1 million tons of
    commercial cargo or more per year.
                                     ______

                   Question Submitted by Senator Tim Johnson

        Question. The Cheyenne River Sioux Reservation in my State faces
    acute water needs. For years, the only intake for a land mass the size
    of Connecticut was in the Cheyenne River. That location had many
    problems, including the intake coming precariously close to taking in
    air when the Corps of Engineers (COE) would draw down the Oahe
    Reservoir. There were also silt problems exacerbated by drawn down and
    heavy metals in the river. To its credit, COE took the lead in building
    a new intake in the main stem of the Missouri in deeper water without
    silt. A number of agencies also contributed to that project.
    Unfortunately, the reservation still faces an extremely undersized
    water treatment plant and pipelines. The present day needs on this
    large reservation are about 8 million gallons a day and future needs
    are estimated at 12 million gallons a day. Their present water
    treatment plant and pipelines can only handle 1.2 million gallons a
    day. As a result, there is a moratorium on the construction of any new
    homes. This is a reservation where there are often two or three
    families living under one roof. When they have a fire on the
    reservation the water system is depleted immediately. In the short
    term, we must rebuild the core of the system--an untreated water line,
    a water treatment plant, and a treated water line. This is an important
    issue for public health, safety, and the economic needs of the
    reservation. There was an authorization in the last Water Resources
    Development Act bill of $65 million under the COE's Environmental
    Infrastructure program, but it has not been funded. Recently, USDA
    Rural Development awarded a large grant/loan package to the tribe to
    start this project, but Rural Development doesn't have enough money to
    complete the entire project. In the same way that we had a multi-agency
    approach with the intake, I want to ask if you will consider
    participating on a multi-agency approach in the future. Rural
    Development has taken the lead but I wish to see COE and other agencies
    also play a role. Will you do so?
        Answer. At my request, the Omaha District Tribal Liaison will
    contact you to ensure that we remain current on the status of your
    efforts to address these concerns. However, COE has three main
    missions:
      --flood and storm damage reduction;
      --commercial navigation; and
      --aquatic ecosystem restoration.
        Because environmental infrastructure projects fall outside of these
    missions, they do not compete well for COE funding given the many other
    needs across the country that are within the COE's primary mission
    areas.
                                     ______

                Questions Submitted by Senator Mary L. Landrieu

                      coe deg.LEVEE CERTIFICATION

        Question. There is no question that my State understands the
    critical need for sound levees that are reliable and provide the best
    protection possible for our community. In many ways, what we
    experienced in Katrina and Rita was a preview for the rest of the
    Nation of just how vulnerable we are. Approximately 700 counties across
    the country are home to thousands of miles of levees. Most of these
    levees were built a generation ago and were designed and engineered at
    a time when the satellites and GPS were just a dream. After decades of
    relying on older technology, U.S. Army Corps of Engineers (COE) and
    Federal Emergency Management Agency (FEMA) have arrived in
    communities--large and small--with new a standard for levee
    certification. These communities are very concerned with the
    significant consequences of having to meet the standards. For some
    communities it presents a stark choice: find the money to repair and
    update these levees or drive up the insurance rates to unsustainable
    levels.
        General Van Antwerp, what information and technology is COE using
    to certify these levees?
        Answer. Participation in the National Flood Insurance (NFIP) is a
    decision of the local community. It is a local community's
    responsibility to provide FEMA documentation that a levee meets NFIP
    criteria for flood mapping purposes. There are three cases in which COE
    may perform a NFIP levee system evaluation:
      --If the levee is operated and maintained by COE;
      --If it is part of an ongoing COE project; or
      --If funding was provided by another Federal agency or by a local
            sponsor and it has been demonstrated that COE is uniquely
            equipped to perform the work and that such services are not
            reasonably and quickly available through ordinary business
            channels.
        For situations in which COE is performing a NFIP levee system
    evaluation, it will follow procedures in Engineer Circular (EC) 1110-2-
    6067, ``USACE Process for NFIP Levee System Evaluation''. The processes
    in this EC only apply to COE when performing levee evaluations for NFIP
    purposes. Other entities may still follow the requirements in title 44
    of the Code of Federal Regulations, section 65.10 (44 CFR 65.10),
    Mapping Areas Protected by Levee Systems; however, the EC is consistent
    with and founded on the principles of 44 CFR 65.10 while updating
    methods and references to current COE practices and criteria.
        Question. Does this take into account the assessments and
    evaluation made by the local sponsors?
        Answer. Yes, all best-available information will be considered
    during the analysis.
        Question. What resources, if any, are available to assist local
    communities in meeting these standards?
        Answer. COE and FEMA work closely together with the local
    communities to ensure the most accurate and current levee information
    is available to them and to identify how this information informs the
    NFIP mapping process.
                                     ______

                    Questions Submitted by Senator Jack Reed

                         coe deg.PANAMA CANAL

        Question. As you know, the expansion of the Panama Canal expansion
    is due to be completed in 2014. Several east coast ports are vying for
    Federal funding to deepen their channels or make other improvements in
    order to handle larger Post-Panamax vessels, which require 48 feet of
    depth and higher air drafts.
        What are the economic opportunities that will come from the
    expansion of the Panama Canal?
        Answer. It is difficult to say what overall effect this 2014 lock
    opening will have on the U.S. economy, or what opportunities it may
    provide.
        Question. Do these opportunities warrant the deepening of all east
    coast ports that currently serve Panamax vessels so that they can
    accommodate Post-Panamax ships?
        Answer. Probably not, at least not at this time. The ports make the
    initial business decision to pursue large capital investments necessary
    to take advantage of the post-Panamax shipping opportunities. The Corps
    of Engineers (COE) evaluates requests to deepen, widen, or lengthen
    channels to estimate the costs and benefits to the Nation of the
    proposal.
        Question. How is COE choosing to make its investments in port
    projects related to the Panama Canal expansion?
        Answer. Most of the funding in COE coastal navigation program is
    not related to the opening of the Panama Canal lock. However, on the
    Atlantic and gulf coasts, several ports are working with COE on
    proposals to deepen and widen their channels to accommodate the largest
    of the post-Panamax vessels, which will be able to reach them more
    directly after the new locks on the Panama Canal open in 2014. On the
    Atlantic coast, the United States now has two ports with channels deep
    enough to receive these ships when they are fully loaded (Norfolk and
    Baltimore) and will have a third (New York/New Jersey) by 2014 based on
    the current COE construction schedule. The United States also has
    several other ports with depths of 45 feet on the Atlantic and gulf
    coasts, which these vessels can use when less than fully loaded.
        The President's fiscal year 2012 budget includes $65 million for
    the ongoing deepening of the port of New York/New Jersey; $42 million
    for construction/expansion of dredged material placement facilities at
    the ports of Norfolk, Virginia; Savannah, Georgia; and both
    Jacksonville and Tampa, Florida, in order to continue maintenance of
    the deep draft channels serving these ports; $600,000 for
    preconstruction engineering and design of Savannah's harbor expansion,
    Georgia; and $726,000 for a channel improvement study at Brazos Island
    Harbor (Brownsville), Texas.
        Question. Is there any coordination with the Department of
    Transportation (DOT), the Department of Commerce, and other Federal
    agencies in selecting the ports that should be deepened or in making
    related infrastructure investments (highways, rail, etc.) that support
    deepening projects?
        Answer. Yes. For example, COE is working with the DOT to improve
    decisionmaking on Federal investment in coastal navigation
    infrastructure through better coordination. DOT is providing
    information on previous years' selected TIGER Grant recipients to COE,
    which we will be considering as part of the Civil Works budget
    preparation. Similarly, the DOT has invited COE technical experts to
    advise it during the upcoming review process for next year's TIGER
    Grant selections. Our staffs are also working on common metrics for
    comparing potential investments that support coastal navigation, and
    for evaluating the performance of those investments.
        Question. If it is found that significant new private sector
    revenue will be generated from the taxpayer investment in port
    deepening projects related to the Panama Canal's expansion, would it
    make sense, in these tight fiscal times, to finance these projects
    through a Federal loan or loan guarantee program (perhaps through an
    infrastructure bank)?
        Answer. There may be advantages to such an approach, as an option
    in lieu of the traditional cost-sharing. Many ports can borrow or raise
    funds on their own. A Federal program like an infrastructure bank, in
    which proposed investments, at ports and elsewhere, compete with each
    other for support based on their return to the Nation, could be used
    where needed to catalyze public and private sector investment.
                                     ______

                    Questions Submitted to Michael L. Connor
                Questions Submitted by Senator Dianne Feinstein

                bor deg.INDIAN WATER RIGHTS SETTLEMENT

        Question. You have proposed a new account for these Indian Water
    Rights Settlements. How much mandatory funding accompanies the $51.5
    million in discretionary funding you have proposed for fiscal year
    2012?
        Answer. Title VII of the Claims Resolution Act of 2010 (Public Law
    111-291) (CRA) provides $60 million in mandatory funding for each of
    fiscal years 2012-2014 for the Reclamation Water Settlements Fund,
    which was established in the Public Land Management Act of 2009 (Public
    Law 111-11). Mandatory funding for the Navajo-Gallup Water Supply
    Project in the amount of $60 million described above is included in the
    Indian Water Rights Settlement Account in the President's fiscal year
    2012 budget.
        CRA also provided mandatory funding in fiscal year 2011 for four
    other Indian water settlements. The Bureau of Reclamation (BOR) is in
    discussions with the tribes in the four new settlements to develop
    contract and engineering plans for the use of the mandatory funds. Once
    the contracts have been agreed to and engineering plans have been
    developed, BOR will be able to develop a construction timetable and
    thereby develop proposals for the use of the funds.
        Question. Where is the funding coming from within your program for
    the Indian Water Rights Settlements?
        Answer. CRA provides $444.9 million in mandatory funding and
    authorizes $244.4 million in discretionary funding to BOR in the four
    Indian water rights settlements within CRA. As well, for each of the
    fiscal years from 2012-2014 CRA also provides $180 million in mandatory
    funding, or $60 million each year, for the Navajo-Gallup Water Supply
    Project to accompany the authorization of appropriations of $870
    million in title X of Public Law 111-11.
        Specifically, for BOR, title III--the White Mountain Apache Tribe
    Water Rights Quantification appropriates $152.7 million in mandatory
    funding and authorizes $11 million in discretionary funding; title IV--
    Crow Tribe Water Rights Settlement appropriates $219.8 million in
    mandatory funding and authorizes $158.4 million in discretionary
    funding; title V--Taos Pueblo Indian Water Rights appropriates $16
    million in mandatory funding and authorizes $20 million in
    discretionary funding; and title VI--Aamodt Litigation Settlement
    appropriates $56.4 million in mandatory funding and authorizes $55
    million in discretionary funding.
        Question. Do the Water Rights Settlements require specific funding
    amounts annually?
        Answer. There are no specific dollar amounts that are required for
    each year in the legislation but there are timeframes which are
    specified for settlement implementation. The amounts requested are
    based on capability as determined by the scope of the work that is
    expected to be performed within CRA.
        Question. What is the nature of the projects that these funds will
    be used for? Aren't they rural water systems?
        Answer. Each of the four settlements in CRA authorizes the
    construction of various projects, principally water construction
    projects. CRA requires BOR to:
      --Construct a Rural Water System for the White Mountain Apache Tribe;
      --Rehabilitate the Crow Irrigation Project and to construct a
            Municipal, Rural and Industrial Water System for the Crow Tribe
            Water Rights Settlement;
      --Provide financial assistance in the form of grants on a
            nonreimbursable basis to eligible non-Pueblo entities for the
            construction of Mutual Benefit projects, primarily groundwater
            projects for the Taos Pueblo Indian Water Rights Settlement;
            and
      --Construct a Regional Water System for the Aamodt Litigation
            Settlement.
        Question. How do these projects differ from the seven on-going
    rural water projects funded in the water and related resources account?
        Answer. CRA authorized the Secretary to enter into Settlement
    Agreements with specific tribes and to undertake the specific actions
    included in those Settlements. One key difference is that the projects
    authorized under CRA settle claims against the United States through
    negotiated settlements. If project and financial timelines are not met,
    the negotiated settlements may be terminated. Not only are the
    significant investments of time and funding associated with negotiating
    the settlements at risk, but underlying these settlements is the
    quantification of tribal water rights. If the settlements fail, the
    tribal water rights are not quantified and the communities affected
    would revert to the prior state of uncertainty with respect to the
    quantification and the effect of Federal tribal rights on State-based
    rights. The rural water projects also address water supply needs and
    provide regional drinking water systems. However, the United States
    does not face the same legal burden in meeting those future needs as it
    does with respect to meeting the obligations associated with the
    settlements authorized under CRA.
        Question. Can these new projects proposed for funding in fiscal
    year 2012 utilize all of the discretionary funding recommended in
    fiscal year 2012?
        Answer. BOR expects to use all of the discretionary funds that are
    being requested as well as some of the mandatory funding that is made
    available within the CRA. In fiscal year 2012, BOR is requesting $51.5
    million in discretionary funding in the Indian Water Rights Settlement
    account, of which $24.8 million is directed to the Navajo-Gallup Water
    Supply Project. The balance of the discretionary request, or $26.7
    million, is for the remaining four new settlements.
        Question. Why did the seven ongoing projects compete so poorly in
    the fiscal year 2012 budget compared to these four new projects?
        Answer. The seven ongoing rural water projects did not compete for
    funding with the tribal settlements that are funded within the CRA.
    These projects have separate authorizations and are at widely varying
    points in their completion schedules. BOR prioritizes funding for its
    ongoing (authorized) rural water projects based on established
    criteria. The first priority for funding rural water projects is the
    required operation and maintenance (O&M) component. For the
    construction component, BOR gives priority to projects nearing
    completion and projects that serve on-reservation needs. For BOR, CRA
    authorized and appropriated $444.9 million in mandatory funding for
    five specific tribal water settlements. The Congress also authorized
    $249.3 million in discretionary funding within the CRA.
        CRA settlements require numerous conditions that have to be
    fulfilled by the Secretary within specified dates in order to satisfy
    the terms of the agreements. If the conditions are not met, the
    settlements may fail and the parties to the settlements will likely
    return to the courts for the resolution of their grievances. The
    funding BOR requested for CRA projects is required to fulfill the terms
    of the CRA.

                          bor deg.RURAL WATER

        Question. Four of these ongoing rural water projects received
    roughly $500,000 each. Can anything constructive be done with $500,000
    for these ongoing projects? What do you anticipate to be accomplished
    with this small amount of funding?
        Answer. Funding amounts for the four rural water projects only
    reflect Federal funding and does take into account the contributed non-
    Federal funding. Funds requested by BOR for fiscal year 2012 and the
    planned use of the funds are shown below:
          Fort Peck Reservation/Dry Prairie Rural Water System (Montana).--
            Funding in fiscal year 2012 will enable the tribes and the non-
            Federal sponsor, Dry Prairie, to perform a minimal level of
            administrative business for the project; no design or
            construction would be performed.
          Lewis & Clark Rural Water System (South Dakota, Minnesota,
            Iowa).--Funding in fiscal year 2012 will enable the project
            sponsor to perform a minimal level of administrative business
            for the project; no design or construction would be performed.
          Rocky Boys/North Central Montana Rural Water System (Montana).--
            Funding in fiscal year 2012 will enable the tribe and the non-
            Federal sponsor, North Central Authority, to perform a minimal
            level of administrative business for the project; no design or
            construction would be performed.
          Jicarilla Apache Rural Water System (New Mexico).--Funding in
            fiscal year 2012 continues design and construction of existing
            water and wastewater facilities.
        Non-Federal funding for Fort Peck and Rocky Boy's has not been
    totally contributed. Non-Federal funding for Lewis & Clark will be
    fully contributed in fiscal year 2011 and non-Federal funding for
    Jicarilla has been totally contributed and exceeded.

                          bor deg.MNI WICONI

        Question. The authorization for Mni Wiconi, one of the rural water
    projects, sunsets in 2013. Will this project be completed by that date
    based on the budget request, or will the project require an
    authorization change?
        Answer. It is anticipated that the Mni Wiconi Project will be
    completed by the sunset date of 2013 if funding is provided at the
    current budget request level.

                       bor deg.NEEDS ASSESSMENT

        Question. Has BOR undertaken a needs assessment for the next 25
    years?
        Answer. BOR has multiple activities within the WaterSMART Basin
    Studies Program that are in the process of assessing future needs for
    water in the Western United States. The Basin Studies are 50/50 cost
    shared activities with non-Federal entities to assess future water
    supply and demand imbalances including the impacts of climate change.
    As part of these activities future water demand will reflect changes to
    water needs from population changes, irrigation, and changes to
    evapotranspiration from climate change as well as any other stresses on
    the system. If current or future imbalances between supply and demand
    are identified, the Basin Studies will develop adaptation and
    mitigation strategies including structural and non-structural
    opportunities within the basin.
        Through the Basin Studies Program beginning in fiscal year 2012,
    BOR will offer the opportunity to conduct feasibility studies as
    authorized by the Omnibus Public Lands Management Act (Public Law 111-
    11) of 2009 with respect to adaptation and mitigation strategies
    identified through the Basin Studies or other similar appraisal level
    studies including the impacts of climate change. Also within the Basin
    Studies Program, BOR began the West Wide Climate Risk Assessments
    (WWCRAs) in fiscal year 2010. Beginning in fiscal year 2011, BOR is
    identifying changes to agricultural demands in a changing climate as
    part of the WWCRAs. In future years, the WWCRAs will explore other
    changes to water demands and needs by working with stakeholders within
    the eight major BOR river basins identified within Public Law 111-11.
        With respect to the needs of BOR's infrastructure, although a small
    number of BOR offices assess and project their individual needs 10 or
    more years into the future, there has been no comprehensive BOR-wide
    assessment covering the next 25 years. Most of BOR's assets are not
    considered ``replaceable units of property'' and, therefore, do not
    have well-defined service lives, nor are there good predictive
    estimates for such future needs. However, in September 2009, BOR
    updated its Major Rehabilitation and Replacement (MR&R) needs for a
    defined 5-year timeframe related to aging infrastructure. These needs
    have been broadly characterized as potential costs associated with
    BOR's ``aging infrastructure''.
        BOR also has planning activities underway with its rural
    communities who are pursuing rural water projects at specific locations
    throughout the West. These activities are undertaken pursuant to
    competitive criteria developed under Public Law 109-451.
        Finally, in the area of dam safety, BOR maintains an active program
    to monitor existing dams and initiate corrective actions where
    appropriate. This program helps ensure the safety and reliability of
    BOR dams to protect the downstream public and property.

                   bor deg.OPERATION AND MAINTENANCE

        Question. How do you propose to address BOR's aging infrastructure
    given the decreasing Operation and Maintenance (O&M) budget?
        Answer. To address the requirements of aging infrastructure on
    projects where BOR is directly responsible for daily O&M, BOR continues
    to assess the condition of its assets and prioritizes funding to
    address requirements of greatest importance, given the current budget
    environment. The prioritization of requirements is based largely on a
    risk-based approach, evaluating not only the significance of the
    deficiency involved, but also the potential consequences should the
    activity not be undertaken.
        Through BOR's continued support of a past and current philosophy
    and emphasis on preventive maintenance and regular condition
    assessments (field inspections and reviews), many of the service lives
    on BOR assets and facilities have been extended, thereby delaying the
    need for significant replacements and rehabilitation efforts (including
    the related funding needs). Although BOR and its beneficiaries have
    benefited greatly from this preventive maintenance philosophy, BOR
    recognizes that as assets and facilities age, they require an increased
    amount of maintenance. Sometimes this requires more frequent preventive
    maintenance, and, in other situations, significant extraordinary
    maintenance, rehabilitation, or replacement may be required.
        BOR's fiscal year 2012 proposed budget is $40.8 million for various
    projects for Replacements, Additions, and Extraordinary Maintenance
    (RAX) activities across BOR. This compares to the fiscal year 2011
    enacted budget of $45.8 million. This request is central to mission
    objectives for operating and maintaining projects ensuring delivery of
    water and power benefits. BOR's RAX request is part of its overall
    Asset Management Strategy that relies on condition assessments,
    condition/performance metrics, technological research and deployment,
    and strategic collaboration to continue to improve the management of
    its assets and deal with its aging infrastructure challenges. This
    amount represents only the fiscal year 2012 request for discretionary
    appropriations. Additional RAX items are directly funded by revenues,
    customers, or other Federal agencies.

                     bor deg.AGING INFRASTRUCTURE

        Question. Public Law 111-11 provided you with authority to address
    aging infrastructure. Do you plan to budget for these projects?
        Answer. BOR is currently developing its policy to implement the
    authority provided under Public Law 111-11 to allow extended repayment
    of extraordinary (nonroutine) and emergency extraordinary maintenance
    costs on project facilities. Water users are currently required by
    Federal law to pay these costs, often substantial, in advance.
        It is important to note that much of the operation and maintenance
    (O&M) funding responsibilities for BOR's assets is the responsibility
    of our project beneficiaries and those operating entities that operate
    and maintain our transferred works facilities. For some operating
    entities and project beneficiaries, rehabilitation and replacement
    funding needs may exceed their available resources and ability to
    provide the funds in advance. In particular, many smaller irrigation or
    water conservancy districts are unable to fund these needs in the year
    incurred absent financing assistance. BOR expects to consider funding
    such projects in the future based on the policy and funding priorities
    and water user financial capability, as appropriate.

                   bor deg.PRINCIPLES AND GUIDELINES

        Question. Please explain how the revised Principles and Guidelines,
    to be called the Principles and Requirements, will impact BOR's
    construction and other programs.
        Answer. The Principles and Requirements are not yet finalized and
    it is anticipated that agencies will have some level of flexibility in
    developing agency-specific guidance to allow for the achievement of
    their specific missions and authorities. Two essential differences
    between the proposed Principles and Requirements and the 1983
    Principles and Guidelines will affect BOR's planning and evaluation
    process.
        First, under the 1983 Principles and Guidelines, agencies relied
    solely on economic benefit-cost analysis to recommend a particular
    alternative for implementation. When evaluating, comparing, and
    recommending a specific alternative for implementation under the
    proposed Principles and Requirements, agencies are to fully consider
    the social, economic, and environmental effects of proposed
    alternatives before selecting the one to be recommended for
    implementation.
        Second, the proposed Principles and Requirements may apply to a
    broader scope of Federal water resource activities than the 1983
    Principles and Guidelines. This means that certain BOR programs and
    activities not previously subject to the 1983 Principles and Guidelines
    may be subject to the Principles and Requirements.

                        bor deg.CLIMATE CHANGE

        Question. What is BOR doing to address Climate Change in the West?
        Answer. BOR is addressing the stressors of climate change through a
    comprehensive set of activities, including participating in Landscape
    Conservation Cooperatives (LCCs) and Climate Science Centers (CSCs),
    providing West-Wide Climate Risk Assessments, and conducting research
    and development of climate analysis tools through the WaterSMART Grant
    and Science and Technology Programs. BOR is also supporting the
    Department of the Interior's Priority Goal for Climate through these
    activities to support the LCCs, conduct vulnerability assessments, and
    implement adaptation actions. LCCs and CSCs are an important part of
    the framework established by Secretary Salazar in Secretarial Order
    3289 to address climate change by bringing science capability to
    resource managers. BOR is conducting research through the Science and
    Technology program, which includes collaboration with the Department of
    the Interior (Department) Climate Science Centers. BOR's Science and
    Technology program also established the Climate Change and Water
    Working Group (C-CAWWG) in 2008 to partner with other Federal agencies
    to address the needs of water managers as they manage the Nation's
    water and hydropower resources under a changing climate.
        Through the Basin Study Program, which includes the Basin Studies,
    West-Wide Climate Risk Assessments, and the LCCs, BOR is conducting
    vulnerability assessments to identify the impacts of climate change to
    water resources in each of the major river basins in the West, as
    authorized under section 9503 of the SECURE Water Act (subtitle F of
    title IX of the Omnibus Public Land Management Act of 2009, Public Law
    111-11, 42 U.S.C. 10364). In April 2011, BOR submitted its first report
    under section 9503 of the SECURE Water Act regarding risks to future
    water supplies from climate change. The report, entitled ``SECURE Water
    Act Section 9503(c)--Reclamation Climate Change and Water 2011'', is
    available at http://www.usbr.gov/climate/ and identifies current
    uncertainties regarding projections of climate change risks and
    impacts, while highlighting likely significant impacts associated with
    the projected rise in temperature, changes to precipitation, reduced
    April 1 snowpack levels, and changes to both the timing and quantity of
    streamflow throughout the Western United States. The vulnerability
    assessments conducted under the Basin Study Program will contribute to
    the Department's Priority Goal for Climate Change. Additionally, in
    fiscal year 2011, BOR identified a number of adaptation actions (e.g.,
    WaterSMART Water and Energy Efficiency Grants, Bay Delta Conservation
    Plan, retrofitting of Hoover Dam to wide-head turbines, and Pilot Run
    of the Yuma Desalting Plant) being conducted to adapt to stressors
    within the Western United States, including those from climate change.
    These adaptation actions will also contribute to the priority goal and
    span a wide array of BOR's mission responsibilities from water supply
    planning efforts, retrofitting of hydropower turbines, to the
    restoration of rivers and ecosystems.

                         bor deg.SECURE WATER

        Question. What guidance documents exist for implementing the
    Cooperative Watershed Program and the SECURE Water Act?
        Answer. The Cooperative Watershed Management Act, subtitle A of
    title VI of the Omnibus Public Land Management Act (Act) of 2009
    (Public Law 111-11), authorized the Department of the Interior
    (Department) to provide financial assistance to establish and expand
    collaborative watershed groups. The act authorizes direct financial
    support for the operations of a collaborative watershed group, as well
    as watershed project funding, including restoration projects. The act
    calls for the Department to establish an application process for the
    program and prioritization and eligibility criteria for considering
    applications, in consultation with the States.
        In the summer of 2010, the Department received input from the
    States regarding the program processes and criteria in response to a
    questionnaire. The fiscal year 2012 President's budget requests
    $250,000 to implement the CWMP through a funding opportunity. The
    funding opportunity announcement will describe the proposal selection
    process and criteria, taking into consideration the early feedback
    received from the States. BOR expects to post the draft funding
    opportunity announcement in the Federal Register later this year in
    order to solicit additional public comments on the proposed selection
    process and criteria. The funding opportunity announcement will then be
    revised, as needed, based on comments received and will be posted on
    www.grants.gov before the end of 2012. The funding opportunity
    announcement will be the first document describing program processes
    and procedures. Additional guidance will be developed as program
    implementation begins.
        Section 9503 of the SECURE Water Act (subtitle F of title IX of the
    Omnibus Public Land Management Act of 2009), authorizes BOR to assess
    the risks and impacts of climate change to water resources, identify
    adaptation strategies, and provide financial assistance for feasibility
    studies. BOR implements section 9503 through complementary activities
    within the WaterSMART Basin Study Program and Science and Technology
    program. This comprehensive approach allows BOR to incorporate the
    best-available science--through coordination with science agencies--
    into climate change adaptation planning with stakeholders. The Basin
    Study Program activities include the West-Wide Climate Risk
    Assessments, the Basin Studies, and the Landscape Conservation
    Cooperatives. Guidance related to each of these activities is available
    through program specific links on BOR's Basin Study Program Web site at
    www.usbr.gov/WaterSMART/basinprogram. A document entitled ``Basin Study
    Program Framework'', available at the aforementioned Web site, provides
    an overview of the Basin Study Program and specifically describes the
    process for conducting a Basin Study. Additionally, in April 2011, BOR
    submitted its first report to the Congress under section 9503 of the
    SECURE Water Act, identifying the risks to future water supplies as
    well as potential changes in demands and impacts on BOR's mission
    responsibilities from climate change. The report, entitled ``SECURE
    Water Act Section 9503(c)--Reclamation Climate Change and Water 2011,''
    is available at http://www.usbr.gov/climate/and provides a
    comprehensive explanation of BOR's activities (including primarily the
    West-Wide Climate Risk Assessments) that contributed to the report.

                  bor deg.BAY-DELTA INTERAGENCY PLAN

        Question. Are there remaining interim Federal Bay-Delta Interagency
    action plan items that are unfunded and if so, how will they be funded?
        Answer. Implementation of the four elements of the Interim Federal
    Action Plan (IFAP) is a multi-year process. Multiple Federal agencies
    are strategically aligning resources to implement the IFAP. To date,
    BOR has funded programs and projects to support those elements of the
    IFAP that are within BOR's purview. Funding in the future is subject to
    appropriations. Budget requests will be submitted as appropriate and
    will continue to be a priority for BOR in the future. Potential funding
    sources include, but may not be limited to Water and Related Resources,
    California Bay-Delta Restoration, and Central Valley Project
    Restoration Fund.

                       bor deg.TITLE XVI PROGRAM

        Question. These projects are critical to providing additional water
    sources to many western communities, including many communities in
    California. Is there more that BOR can do to assist in these programs?
        Answer. Water reuse projects are a critical aspect of water supply
    sustainability in the West. By improving efficiency through reuse,
    title XVI projects provide flexibility during water shortages and help
    to diversify the water supply. On May 23, 2011, BOR selected eight
    congressionally authorized projects to receive approximately $11.3
    million in fiscal year 2011 title XVI construction funding. In
    addition, recently BOR invited sponsors of potential new water
    recycling projects to apply for cost-shared funding to develop new
    title XVI feasibility studies. On May 9, 2011, after applying program
    criteria to funding applications submitted by non-Federal sponsors, BOR
    selected eight entities who will leverage $1.1 million in Federal
    funding to complete $4.9 million in studies of new water reuse
    projects.
        Question. What is the backlog of unfunded projects?
        Answer. For previously authorized title XVI projects, the remaining
    authorized Federal cost-share totals approximately $595 million once
    fiscal year 2011 funding has been applied. BOR is currently working to
    gather information from project sponsors to determine whether any
    projects have smaller costs than expected, in which case Federal cost-
    share may require adjustment, and to refine estimates of each project
    sponsor's construction plans over the next few years. Once additional
    communications with sponsors have been completed, BOR will have an
    updated estimate of the remaining Federal cost-share for authorized
    projects.
        Question. How many separate projects are authorized, and of these
    does BOR have an opinion on the viability of the individual projects?
        Answer. There are currently 53 authorized title XVI projects. We
    are developing a list of authorized projects that sponsors are not
    planning to pursue with new or additional construction at this time.
        Question. Why don't these projects compete well within the
    administration budget?
        Answer. Water reuse through the title XVI program is a key aspect
    of the Department's WaterSMART program. The President's fiscal year
    2012 budget, which includes $29 million for such projects, points to
    the crucial role of water reuse in efforts to address water supply
    sustainability and represents a significant increase over funding
    levels for the program in recent years.
        Question. Has placing these projects under the WaterSMART Program
    given them more or less visibility within the BOR budget?
        Answer. By incorporating the title XVI program into WaterSMART, the
    Department has been able to articulate the role of water reuse in
    efforts to stretch the limited water supplies in the West. The fiscal
    year 2012 budget request builds on lessons learned in other programs
    such as WaterSMART Grants, including the use of funding opportunities
    that incorporate prioritization criteria to identify projects that most
    closely match program goals. Through the use of such funding
    opportunities, project sponsors have a chance to communicate to BOR the
    expected benefits of each project--how each project can be expected to
    contribute to water supply sustainability, benefits to the environment
    and water quality, and any contributions to increased energy efficiency
    in the delivery of water, among others.
        The Department's coordinated approach to addressing water supply
    sustainability issues in ways that maximize the benefits of Federal
    funding extends beyond title XVI and existing WaterSMART Grants. This
    year as part of WaterSMART, for example, BOR and USDA's Natural
    Resources Conservation Service (NRCS) worked together on an innovative
    funding opportunity to leverage funding for water delivery agencies and
    agricultural producers in California's Central Valley. BOR announced
    its selection of five Bay-Delta Agricultural Water Conservation and
    Efficiency Projects for funding, totaling $4.2 million, on May 18,
    2011. The selected projects will increase district-level efficiencies
    through BOR funding and also facilitate water conservation and/or water
    use efficiency on farms. NRCS will provide up to an additional $5
    million in funding and technical assistance to growers in the selected
    districts for eligible on-farm conservation practices.
        Title XVI projects, along with WaterSMART Grant projects, are also
    included as part of the Department's Priority Goal for Water
    Conservation, which provides additional visibility.

               bor deg.SOUTH OF DELTA WATER ALLOCATIONS

        Question. As you know, I and many others have been closely
    following the BOR's water allocation for south-of-Delta water users in
    California's Central Valley. I was pleased to learn of BOR's decision
    last week to increase the allocation for farmers from 65 percent to 75
    percent of their service contract. This followed two previous rounds of
    increases in recent weeks. However, there remains a great deal of
    frustration and consternation in California as to why BOR is unable to
    provide 100 percent of the allocation given the historic level of snow
    and rainfall we have experienced this year. Do you expect to increase
    the allocation of water supplies to south-of-Delta users again this
    year? If so, do you believe that you will ultimately be able to
    announce a 100 percent allocation?
        Answer. On April 8, 2011, BOR increased the allocations for the
    south-of-Delta agricultural project water users from 65 percent to 75
    percent, and on April 25, from 75 percent to 80 percent.
        The most probable runoff forecast for this water year shows that we
    will be in the upper quartile of the historical annual volumes. We are
    currently analyzing the runoff forecast and are preparing our forecast
    of CVP operations. Our studies should be completed later this summer
    and a determination will be made about further increases to the
    allocation. With the current operational constraints, it may not be
    possible to achieve 100 percent allocation this contract year. Factors
    affecting BOR's ability to declare a 100 percent allocation for the
    south of Delta agricultural water users include the actions required by
    the biological opinions to avoid jeopardizing listed species and
    project operations.
        BOR has been able to utilize flood flows that have reached Mendota
    Pool to supplement the water supply to the extent that the flood flows
    can be forecasted. We have also been able to augment the allocated
    water supply with water that the districts rescheduled from contract
    year 2010 and supplemental water exported from the Delta between March
    1 and May 8. With these additional water supplies, the total delivery
    to the south-of-Delta agricultural water users will exceed the volume
    of an 80 percent allocation.

            bor deg.CENTRAL VALLEY PROJECT RESTORATION FUND

        Question. After nearly 20 years what is the status of the Central
    Valley Project Restoration Fund in addressing the goals of the Central
    Valley Project Improvement Act?
        Answer. The Central Valley Project Improvement Act (CVPIA) Activity
    Report (CPAR), dated August 25, 2009, and made public in December 2009,
    provides a detailed report on the status of restoration activities. In
    general the report identifies a number of activities that have been
    completed under the CVPIA and remaining activities which are yet to be
    completed. The fiscal year 2010 ``Annual Accomplishment Report to
    Congress'' will provide an update on the status of all CVPIA program
    activities and will be available to the Congress and the public before
    the end of 2011.
        Question. How much funding has been expended to date for these
    purposes?
        Answer. From fiscal year 1993 through fiscal year 2009 the Program
    has expended just more than $972 million for program implementation:
      --$599.5 million--Restoration funds;
      --$290.9 million--Water and related resources;
      --$76.2 million--State of California cost share;
      --$5.3 million--California Bay Delta Restoration; and
      --$29,000--American Recovery and Reinvestment Act.
        Question. Do you have an estimate as to when this program would be
    complete?
        Answer. The CVPIA fish and wildlife restoration program is
    comprised of two broad types of activities: those with endpoints (e.g.,
    structural fish restoration actions and fish screens); and those that
    are annual ongoing (e.g., instream flow management, gravel
    replenishment, scientific monitoring and wildlife refuge incremental
    level 4 water acquisition and conveyance. The annual ongoing activities
    are expected to occur in perpetuity and thus completion dates do not
    apply. The activities with endpoints will attain completion however
    those dates have not been established since their implementation is in
    some cases beyond the long-range planning timeframe of the next 10
    years. Therefore, no date has been set for the reduction in Restoration
    Fund collections from water and power contractors since the reduction
    is contingent upon completion of activities with endpoints. See the
    CVPIA Program Activity Review Report (CPAR, 2009) for more information
    on program performance measures and completion criteria.
        Question. Is there a better way to allocate the collection of fees
    among the users?
        Answer. BOR is required per CVPIA section 3407(c)(2) to collect $50
    million per year for the Restoration Fund (indexed to about $76 million
    in current dollars). Because other CVPIA revenues have not been as high
    as anticipated, BOR has been required to assess the maximum mitigation
    assessment required by CVPIA. This assessment is paid by water and
    power contractors and is capped at $30 million annually (indexed to
    about $46 million in current dollars).
        Although BOR cannot require its water contractors to pay additional
    annual payments in excess of the CVPIA designated amounts of $6 and
    $12, respectively, per acre-foot (October 1992 dollars) for agriculture
    and municipal and industrial water users, respectively, there is no
    comparable limitation on the amount paid by power contractors.
    Consequently, when BOR must collect $30 million (October 1992 dollars)
    in charges, it has no discretion but to collect the balance from its
    CVP power contractors.
        CVPIA did not authorize BOR to collect less than $50 million per
    year (unless activities are completed) or to collect more from water
    contractors. Through fiscal year 2009 (based on a 10-year rolling
    average), power contractors have paid about 32.7 percent of all
    collections into the Restoration Fund with the balance paid by water
    users.
        Question. Are there other ways to improve fee collections into the
    fund?
        Answer. These financial obligations, issues, and impacts are being
    examined in detail in an ongoing comprehensive evaluation that BOR is
    preparing in collaboration with Western Area Power Administration that
    is addressing the following areas:
      --Identification of the activities and projects that have met
            prerequisites for completing the remaining requirements, and
            the impact on future water and power contractor collections.
            (CVPIA allows reducing collections from contractors once
            activities are complete.)
      --An evaluation of BOR's discretion and flexibility regarding
            financial obligations and funding under the law.
      --An evaluation of the CVPIA reimbursability requirements and BOR's
            discretion related to repayment requirements.
      --An assessment of the extent to which CVPIA's financial collection
            mechanisms have resulted in anticipated Restoration Fund
            revenues, along with any problematic consequences.
      --An assessment of options for assessing and collecting funds for
            reimbursable activities if and when the costs exceed
            contractors' credits.
        BOR recognizes that the financial viability of the CVP hinges on
    the availability and marketability of a reliable and competitive source
    of power plans to complete the above-mentioned evaluation by December
    2011. BOR staff has met with representatives of the Northern California
    Power Association and the Central Valley Project Water Association to
    ensure their concerns are addressed as part of the evaluation. BOR is
    committed to working with our stakeholders to address concerns about
    CVPIA.

                            bor deg.CALFED

        Question. As you know, the Bay Delta Conservation Plan is a joint
    effort of Federal and State water agencies, environmental organizations
    and other water users to plan and implement an environmental permitting
    process that will restore habitat for Delta fisheries and insure
    reliable water deliveries to 25 million Californians. The goal of the
    Bay Delta Conservation Plan is to devise a 50-year plan of water system
    and ecosystem improvements, and environmental law compliance through
    adaptive management. It will still likely take 10 to 15 years to
    complete the projects necessary to increase water deliveries south of
    the Delta. Until the plan is fully implemented, I fear that farmers
    will continue to struggle to receive enough water.
        Can you please provide me with an update on BOR's efforts to help
    develop a Programmatic Environmental Impact Statement for the Bay Delta
    Conservation Plan?
        Answer. Federal agencies are fully engaged in developing the Bay
    Delta Conservation Plan (BDCP). The three lead agencies, Department of
    the Interior, through BOR and the U.S. Fish and Wildlife Service (FWS)
    and the Department of Commerce, through the National Oceanic and
    Atmospheric Administration's National Marine Fisheries Service (NMFS)
    together with COE and the U.S. Geological Survey have significantly
    enhanced Federal engagement on the BDCP. BOR has and will continue to
    provide expertise throughout the BDCP process to ensure Central Valley
    Project (CVP) operations and water deliveries are considered,
    evaluated, and addressed. BOR will evaluate the BDCP in consideration
    of CVP statutory and contractual obligations. BOR expects to pursue
    section 7 consultation with NMFS and FWS for CVP operations as part of
    the BDCP process.
        BOR serves as a Federal co-lead agency in preparation of the BDCP
    Environmental Impact Report/Environmental Impact Statement (EIR/EIS).
    The BDCP EIR/EIS will include both programmatic and project-specific
    analyses in compliance with National Environmental Policy Act (NEPA)
    and California Environmental Quality Act (CEQA) requirements.
    Preparation of the EIR/EIS has slowed since the beginning of 2011 to
    allow further formulation and development of the BDCP including
    identification of the BDCP proposed Project. Federal lead agencies are
    coordinating with the new State administration and a revised schedule
    for completion of both the BDCP and the associated EIR/EIS is currently
    under development. The BDCP EIR/EIS will identify and analyze potential
    environmental impacts of permitting and implementing the BDCP Proposed
    Project as well as alternatives to the Proposed Project. Therefore, the
    EIR/EIS schedule must track with identification of the BDCP Proposed
    Project.
        Question. What are the greatest challenges you (anticipate) in
    completing the Programmatic Environmental Impact Statement and
    implementing the Plan?
        Answer. Challenges to complete the EIR/EIS for the BDCP include
    finalizing the identification of a proposed Project for the BDCP;
    gaining multi-agency support for the effects analysis methodology;
    gaining agreement on an array of alternatives to be analyzed in the
    EIR/EIS; determining future governance strategies; determining short-
    term construction and long-term financing strategies.
        Question. Are there small projects, statutory changes or
    administrative actions that can be taken in the 10- to 15-year interim
    period before the Plan is fully implemented that will allow for
    increased water deliveries to south-of-Delta users?
        Answer. Actions that could be implemented in the next 10-15 years
    will be addressed in a near-term plan, which is being discussed as part
    of the development of the BDCP.

                 bor deg.SAN JOAQUIN RIVER RESTORATION

        Question. As the author of the San Joaquin River Restoration
    Settlement Act, I have a keen interest in BOR's implementation of
    various programs the legislation authorized. I know that the Settlement
    is also an important priority for BOR, but the administration has never
    requested the level of new appropriations in the early years needed to
    ensure full implementation. Full funding benefits all parties:
      --the Friant Water Users;
      --the third-party landowners; and
      --numerous interests seeking full restoration of the river.
        When do you expect to release the San Joaquin River Restoration
    Programmatic Environmental Impact Statement?
        Answer. BOR released the Draft Program Environmental Impact
    Statement/Report (Draft PEIS/R) for the San Joaquin River Restoration
    Program (Restoration Program) for public review on April 22, 2011. The
    60-day public comment period ended on June 21, 2011. The Draft PEIS/R
    analyzes and discloses the direct, indirect, and cumulative impacts of
    implementing the Stipulation of Settlement in NRDC, et al., v. Rodgers,
    et al., (Settlement) consistent with the requirements of NEPA and the
    State equivalent to NEPA-CEQA. BOR is the NEPA lead agency and the
    California DWR is the CEQA lead agency for the document. BOR
    anticipates completing the Final PEIS/R in early fiscal year 2012 and
    signing a Record of Decision shortly thereafter.
        Question. What is your plan to ensure sufficient funding to meet
    the timeline for completing San Joaquin River restoration projects that
    are called for in the settlement and the Programmatic EIS?
        Answer. We recognize that some actions required by the Settlement
    are unavoidably behind schedule. This includes certain channel and
    structural improvement projects that may be beneficial for successful
    reintroduction of salmon. We are initiating consultation with the
    parties to the Settlement to develop a new schedule based upon the
    recently released Draft PEIS/R. This new schedule will assure
    implementation of the Restoration Program in a manner that addresses
    the requirements of the Settlement for expeditious action while meeting
    the requirements of the legislation to minimize impacts on third-party
    interests. A revised funding schedule will be formulated once a new
    settlement schedule has been developed. Funding for the Restoration
    Program will remain a priority as we proceed with the program's
    implementation. The fiscal year 2012 budget requested $9 million for
    this program.
        Question. The Settlement Act required BOR to establish a
    ``Recovered Water Account'' to allow Friant contractors to obtain
    additional water for storage during wet years. I understand that BOR
    has recently made a decision regarding the ``Recovered Water Account''
    that may help provide some additional supplies to Central Valley
    farmers this year. Can you please explain?
        Answer. On October 23, 2006, the U.S. Eastern District Court of
    California approved the Stipulation of Settlement in NRDC et al. v.
    Kirk Rogers, et al. Under paragraph 16(b), the Settlement requires BOR
    to develop a Recovered Water Account to monitor and record reductions
    in water deliveries occurring as a result of the Settlement and make
    water available at a total cost of $10 per acre-foot to contractors who
    experience a reduction in water deliveries as reflected in their
    Recovered Water Account. Recovered Water Account water is to be made
    available during wet hydrologic conditions, when water is not otherwise
    required to meet other obligations of the Secretary of the Interior.
        In 2010, the Friant Division long-term contractors did not
    experience substantial reductions in water deliveries as a result of
    the Settlement and thus, had relatively low balances in their Recovered
    Water Accounts. Since early 2011, the San Joaquin Basin has been
    experiencing wet hydrologic conditions and water is available in
    Millerton Lake that is not otherwise needed to meet other obligations
    of the Secretary of the Interior. In response to this condition, in
    early April, BOR credited an additional 460,000 acre-feet to the Friant
    Division long-term contractors Recovered Water Accounts. The 460,000
    acre-feet of credits were based on a projected average water supply
    impact for 2012 to 2015. The credits were allocated to Class 1 and
    Class 2 contractors in proportion to anticipated impacts and contract
    amounts. With the allocation of 460,000 acre-feet of credits, BOR also
    made Recovered Water Account water available to each contractor
    accordingly.
        Consistent with the Settlement, the Recovered Water Account water
    is made available at a total cost of $10 per acre-foot. This relatively
    low-cost water provides a source of water for groundwater banking and
    other activities that will assist the Friant Division long-term
    contractors in avoiding future impacts of the Settlement. With the
    allocation of 460,000 acre-feet of credits and making this Recovered
    Water Account water available, BOR has worked to avoid some of the
    future water supply impacts that may occur with the implementation of
    the Settlement.

                     bor deg.LAKE POWELL/LAKE MEAD

        Question. I understand that yesterday, BOR announced that it will
    release an additional 3.33 million acre-feet of water from Lake Powell
    to Lake Mead based on significant snowpack in the Upper Basin of the
    Colorado River. Combined with previous releases totaling 8.23 million
    acre-feet, that will bring the total to 11.56 million acre-feet this
    year. Unfortunately though, because of the prolonged drought we have
    experienced, I suspect we have a long way to go before we refill Lake
    Mead. Can you tell me about how much water we will now have in Lake
    Mead and how far does this get us in terms of recovering from the many
    years of drought?
        Answer. Glen Canyon Dam is projected to release approximately 12.46
    million acre-feet (MAF) from Lake Powell to Lake Mead, which represents
    an additional 4.23 MAF of water this water year (October 1-September
    30) for Lake Mead. At the end of the water year BOR projects that Lake
    Mead will have approximately 12.87 MAF of water in storage
    (approximately 50 percent full). Projected releases from Glen Canyon
    Dam are updated monthly throughout the year to reflect changing
    hydrology.
        In terms of drought recovery, it is challenging to quantify because
    it is largely dependent on future hydrology; it is not uncommon to have
    short periods of high annual runoff from the Rocky Mountains during
    extended drought periods.
        Due to this year's higher inflow, BOR projects the first occurrence
    of shortage in the lower Colorado River Basin could be in 2015, at a 5-
    percent probability. At this time last year, BOR had projected an 8-
    percent chance of shortage as early as 2012.
        Question. How much storage capacity remains in Lake Mead?
        Answer. Discounting exclusive flood control space (approximately
    1.5 MAF), Lake Mead has an available capacity of 25.877 MAF. By
    December 31, 2011, BOR projects that Lake Mead will have 13.973 MAF of
    water in storage, which will take up 54 percent of its available
    storage capacity. At this level the remaining unused storage capacity
    at Lake Mead will be 11.904 MAF (46 percent of Lake Mead's total
    available capacity).

          bor deg.IMPERIAL, COACHELLA, AND METROPOLITAN WATER

        Question. What do these additional waters mean in terms of
    deliveries to lower Colorado River users, particularly those in
    California:
      --the Palo Verde Irrigation District;
      --Imperial Irrigation District;
      --Coachella Valley Water District; and
      --the Metropolitan Water District of Southern California.
        Answer. The amount of water available to be delivered to water
    contractors in the Lower Basin, including California contractors, is
    dependent on the condition determined for the operation of Lake Mead
    under the 2007 Record of Decision for Colorado River Interim Guidelines
    for Lower Basin Shortages and the Coordinated Operations for Lake
    Powell and Lake Mead (Interim Guidelines). The operating condition is
    determined based on reservoir elevations projected for January 1 of the
    upcoming year. In 2011, the Secretary has determined that the operating
    condition is Intentionally Created Surplus (ICS). This determination
    will not change due to the increased flow into Lake Mead. Current
    projections for 2012 and 2013 indicate that the most probable operating
    condition will once again be in the Normal--ICS Surplus range, with up
    to a 30 percent chance of a Surplus Condition in 2013.
        The Secretary has the discretion to declare either a Normal or
    Surplus Condition when Lake Mead elevations are between 1,075 feet mean
    sea level (MSL) and 1,145 feet MSL. During a Normal Condition, water
    contractors are allowed to take delivery of their full entitlement. In
    an ICS Surplus Condition, water contractors may take delivery of their
    full entitlement plus delivery of Intentionally Created Surplus water,
    up to the limits allowed under the Interim Guidelines. If over the next
    few years the elevation of Lake Mead were to increase above 1,145 feet
    MSL, this would trigger a Surplus Condition. Those contractors with a
    surplus entitlement would be allowed to take delivery of their surplus
    entitlement up to limits established in the Interim Guidelines in
    addition to a full entitlement.

                         bor deg.QUAGGA MUSSEL

        Question. In January 2007, quagga mussels were detected in Lakes
    Mead and Mohave within the Lake Mead National Recreation Area. Since
    then, Federal, State, and local agencies have been working to prevent
    the spread of this environmentally and economically damaging non-native
    aquatic invasive species. Despite their best efforts, quagga mussels
    continue to impact water users along the Colorado River system--
    clogging filters, pipes, and pumps. Most traditional methods of control
    are not compatible with drinking water and environmental regulations.
    Given that 25 million people down river rely on the Colorado River as a
    key element of their water supply, resolving, or at least managing the
    quagga problem may be a priority for BOR. Can you please explain what
    BOR has done to address the problem and what does it propose to do in
    the future?
        Answer. As a high-priority component of BOR's Science & Technology
    (S&T) Program since 2008, BOR has focused invasive mussel research
    activities on improving early detection methods; identifying,
    developing, demonstrating, and implementing facilities protection
    technologies and strategies; and assessing ecological impacts.
    Researchers are engaged in a number of mussel-related activities
    including monitoring of more than 350 water bodies throughout the
    Western United States for the presence of mussels, coatings testing to
    prevent or reduce settlement on critical infrastructure, development of
    a promising treatment product called ZequanoxTM (based on
    the common bacteria Psuedomonas florescens), and field evaluation of
    filtration and UV treatment technologies to exclude mussels from raw
    water systems. The potential of several other technologies is also
    being explored for removal or settlement prevention on intake
    structures and within pipelines including elevated pH control
    strategies; pulsed pressure devices; turbulence generating devices;
    carbon dioxide injection; dissolved oxygen reduction; potential for the
    use of certain registered herbicides; retrofit of trashrack raking
    systems; fish predation; and alternative fish screening technologies.
    Many of these activities involve collaboration with other Federal and
    State agencies, BOR's managing partners, and private industry and are
    expected to evolve as future research needs and new technologies are
    identified. BOR is also continuing to assess the long-term ecological
    impacts related to mussel infestations in western water bodies.
        BOR has also developed an Equipment Inspection and Cleaning Manual
    in cooperation with COE. This manual provides recommendations for
    inspection and cleaning of vehicles and equipment as a prevention tool
    to limit the spread of mussels and other invasive species carried to
    new sites by contaminated equipment. Since release of this manual, many
    other agencies and organizations have adopted its mussel prevention
    protocols. BOR also hosted the 17th International Conference on Aquatic
    Invasive Species in San Diego last year to help attract attention of
    the global scientific community to the importance of these mussels in
    the western watersheds of the United States.
        Question. How much has BOR spent to address the quagga mussel
    problem?
        Answer. It is estimated that BOR will have spent more than $12.5
    million through fiscal year 2010 and includes appropriations, power
    revenues and other funding from customers.
        Question. What are those funds being used for?
        Answer. Since 2008, BOR funding has supported mussel-related
    activities including prevention, early detection and rapid response,
    control and management, research and development, and education and
    outreach.
        Question. How has the quagga mussel impacted water quality and
    habitat in the Colorado River both above and below Lake Mead?
        Answer. Quagga mussels appear to be impacting water quality and
    habitat in the Colorado River above and below Lake Mead. Water clarity
    is increasing and, as a result, the production of aquatic weeds is
    increasing and becoming a problem at pumping plants intakes. The extent
    to which this change is caused by mussels versus other factors has not
    been quantified. Quagga mussels are also expected to affect nutrient
    dynamics and therefore have a detrimental impact on fisheries. BOR is
    continuing to assess the long-term ecological impacts related to mussel
    infestations including changes in water quality, interactions with
    other benthic organisms, and the potential for cyanobacteria-producing
    toxins in western water bodies.
        Question. What else could we do to address the problem, to protect
    habitat and wildlife, and to preserve water and irrigation district
    infrastructure?
        Answer. BOR continues to address evolving issues through
    monitoring, research, outreach, and education activities. Further
    knowledge is continually being gained through research that improves
    our understanding of mussel-related ecological and infrastructure
    impacts in the West and supports our strategies to mitigate impacts to
    water and hydropower facilities. Prevention of mussel movement to new
    water bodies is a very important activity, but it falls primarily to
    agencies that manage recreation at lakes and reservoirs and have
    authority to control the movement of watercraft and invasive species.
        As a high-priority component of BOR's S&T program since 2008, BOR
    has focused invasive mussel research activities on improving early
    detection methods; identifying, developing, demonstrating, and
    implementing facilities protection technologies and strategies; and
    assessing ecological impacts. Researchers are engaged in a number of
    mussel-related activities including monitoring of more than 350 water
    bodies throughout the Western United States for the presence of
    mussels, coatings testing to prevent or reduce settlement on critical
    infrastructure, development of a promising treatment product called
    ZequanoxTM (based on the common bacteria Psuedomonas
    florescens), and field evaluation of filtration and UV treatment
    technologies to exclude mussels from raw water systems. The potential
    of several other technologies is also being explored for removal or
    settlement prevention on intake structures and within pipelines
    including elevated pH control strategies; pulsed pressure devices;
    turbulence generating devices; carbon dioxide injection; dissolved
    oxygen reduction; potential for the use of certain registered
    herbicides; retrofit of trashrack raking systems; fish predation; and
    alternative fish screening technologies. Many of these activities
    involve collaboration with other Federal and State agencies, BOR's
    managing partners, and private industry and are expected to evolve as
    future research needs and new technologies are identified. BOR is also
    continuing to assess the long-term ecological impacts related to mussel
    infestations in western water bodies.
        BOR has also developed an Equipment Inspection and Cleaning Manual
    in cooperation with COE. This manual provides recommendations for
    inspection and cleaning of vehicles and equipment as a prevention tool
    to limit the spread of mussels and other invasive species carried to
    new sites by contaminated equipment. Since release of this manual, many
    other agencies and organizations have adopted its mussel prevention
    protocols. BOR also hosted the 17th International Conference on Aquatic
    Invasive Species in San Diego last year to help attract attention of
    the global scientific community to the importance of these mussels in
    the western watersheds of the United States.
                                     ______

                   Question Submitted by Senator Patty Murray

                 bor deg.ODESSA SUBAREA SPECIAL STUDY

        Question. Commissioner Connor, as you know I have worked closely
    with the Bureau of Reclamation (BOR) over several years on the Odessa
    Subarea Special Study to look at surface options for irrigation to
    reduce the impact to the aquifer. Clearly, agriculture is vital to
    Washington State's economy and the Central Washington area is a huge
    part of the industry. We are so close to finishing the Study to
    determine the best path forward, but I am hearing that the BOR doesn't
    plan to fund the remainder. Can you please tell me your plan to ensure
    the completion of the study?
        Answer. BOR recognizes the importance and understands the
    significance of the Columbia Basin water issues, and specifically the
    Odessa Subarea Special Study (Study). In this regard, BOR has partnered
    with the State of Washington (State) to investigate the possibility of
    continued development of the Columbia Basin Project to deliver project
    surface water to replace the current ground water use in the Odessa
    Subarea. The Study is near completion; however, faced with considerable
    competing demands for aging infrastructure, satisfying Endangered
    Species Act regulatory requirements on operating projects, and other
    high-priority water issues throughout the 17 Western States, it was not
    possible for BOR to provide funding for the study in the fiscal year
    2012 President's budget. BOR will continue to work with the State to
    bring the Study to completion as soon as possible. BOR and State of
    Washington Department of Ecology have jointly prepared a draft
    environmental impact statement (EIS) to meet the National Environmental
    Policy Act and State Environmental Policy Act requirements. The draft
    EIS was released to the public from October 26, 2010 through January
    31, 2011, with more than 210 comment letters received. The final EIS is
    anticipated to be completed by late 2011.
                                     ______

                   Questions Submitted by Senator Tim Johnson

                          bor deg.RURAL WATER

        Question. Given increases in prices over time and the necessary
    noncontract and overhead costs associated with construction projects,
    it follows that the longer a project takes to complete, the more
    expensive it will be. Has the extension of the completion of Bureau of
    Reclamation's (BOR) Rural Water Supply Projects increased overhead
    costs at the expense of construction?
        Answer. Yes. As annual appropriations are less than what is
    necessary to support full project construction, we believe some Rural
    Water Supply Projects are incurring increased overhead costs at the
    expense of construction.
        Question. If so, by how much?
        Answer. BOR does not have any way of quantifying such an increase
    and does not have specific data to determine the actual extent to which
    increased overhead may impact the total cost of completing projects.
        Question. How does BOR propose to restore the funds which had to be
    used to cover overhead costs so that construction can be completed?
        Answer. Historically, cost indexing authorized for each of the
    current rural water projects has kept pace with inflation, and coupled
    with a favorable construction climate, projects appear to be
    progressing within original cost estimates. The funds requested by BOR
    for rural water construction are formulated to account for projected
    construction capabilities and other mission critical work.
                                     ______

                              SUBCOMMITTEE RECESS

        Senator Feinstein. So thank you for taking it all with good
    humor. Thank you very much.
        And the hearing is recessed.
        [Whereupon, at 4:12 p.m., Wednesday, April 13, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2012

                                  ----------

                             WEDNESDAY, MAY 4, 2011

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:21 p.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Dianne Feinstein (chairman)
    presiding.
        Present: Senators Feinstein and Alexander.

                              DEPARTMENT OF ENERGY

                    National Nuclear Security Administration

    STATEMENT OF HON. THOMAS P. D'AGOSTINO, UNDER SECRETARY
                FOR NUCLEAR SECURITY AND ADMINISTRATION
    ACCOMPANIED BY:
            ANNE HARRINGTON, DEPUTY ADMINISTRATOR FOR DEFENSE NUCLEAR
                NONPROLIFERATION
            ADMIRAL KIRKLAND DONALD, DEPUTY ADMINISTRATOR FOR NAVAL
                REACTORS
            DR. DONALD COOK, DEPUTY ADMINISTRATOR FOR DEFENSE PROGRAMS

                 OPENING STATEMENT OF SENATOR DIANNE FEINSTEIN

        Senator Feinstein. Good afternoon, ladies and gentlemen,
    and welcome to the Energy and Water Development Subcommittee's
    oversight hearing on the National Nuclear Security
    Administration's (NNSA) fiscal year 2012 budget request.
        NNSA has requested $11.8 billion for fiscal year 2012. It
    is an increase of $1.1 billion, or 10.2 percent, more than the
    fiscal year 2011 level. I think in a sense, they are an
    endangered species because they are probably the only one,
    Senator Alexander, that is going to get this kind of a raise. I
    noted all of the smiles on their faces when they came into the
    room. This is, in fact, the largest increase to NNSA since it
    was established 11 years ago.
        This increase also follows another record-breaking increase
    of $813 million, or 8.2 percent, in fiscal year 2011. Based on
    the 2012 budget request, NNSA's budget would grow by about $2
    billion over 2 years.
        The budget increase presents a number of opportunities
    including:
      --accelerating efforts to secure all vulnerable nuclear
            materials by the end of fiscal year 2013 to reduce the
            threat of nuclear terrorism;
      --extending the life of nuclear weapons currently in the
            stockpile;
      --replacing or upgrading aging infrastructure needed to
            ensure the safety, security, or reliability of nuclear
            weapons; and
      --designing nuclear reactors that will operate for 40 years
            without refueling for Ohio Class ballistic missile
            submarines.
        Now, with these opportunities also come some challenges.
    Regarding nonproliferation, the goal announced in April 2009 to
    secure all vulnerable nuclear materials in 4 years has
    accelerated nuclear security efforts.
        I would like to highlight a few recent achievements over
    the last 2 years. NNSA has removed 960 kilograms of highly
    enriched uranium, enough nuclear material for 38 nuclear
    weapons. NNSA has removed all highly enriched uranium from six
    countries. One of these countries was Libya. Given the recent
    unrest in Libya, the presence of this dangerous nuclear
    material in an unstable part of the world would have increased
    the risk of nuclear terrorism. Removing highly enriched uranium
    from six countries in 2 years is much faster than one country a
    year that NNSA has averaged in the last 13 years. NNSA has also
    completed security upgrades at 32 buildings in Russia
    containing weapons usable materials.
        Now, despite this progress, stockpiles of nuclear weapon
    materials around the world are still vulnerable to theft. In
    particular, all of the publicly known cases of theft of weapons
    usable nuclear material were perpetrated by insiders.
    Corruption and insider threats are endemic in many parts of the
    world, including Russia. That places unsecured weapons usable
    nuclear weapons in great jeopardy.
        I would like to discuss how NNSA has addressed this threat
    for a moment. Regarding nuclear weapons activities, I am
    concerned about your ability to develop reliable costs and
    schedule estimates for complex nuclear infrastructure projects.
    You plan to build three new facilities that will each exceed $3
    billion in costs, and in some cases may exceed $6 billion--the
    Chemistry and Metallurgy Research Facility at Los Alamos, the
    uranium processing facility at Y-12, and the pit disassembly
    and conversion facility at Savannah River. NNSA plans to spend
    $682 million on these three projects alone in fiscal year 2012,
    and will reach a peak of $1.1 billion by fiscal year 2014. New
    cost estimates for these facilities are three times more than
    the original estimates. So, we need to discuss this.
        NNSA has a long history of underestimating budget needs and
    increasing cost projections because of design schedule, design
    changes, and schedule delays. If the costs for these facilities
    increase further, I am concerned that it could harm higher-
    priority missions, such as life-extension programs and
    increased weapon surveillance. NNSA must demonstrate to the
    Congress that it can effectively manage these complex projects
    and complete them on time and on budget.
        Modernizing our infrastructure on time and on budget,
    however, is not enough. NNSA must clearly demonstrate how this
    new infrastructure will not only enhance the safety, security,
    and reliability of our nuclear weapons, but also help reduce
    the size of the stockpile.
        The new START Treaty was a step in the right direction by
    reducing the size of our actively deployed nuclear weapons to
    1,550. However, we still maintain 5,100 nuclear weapons. A
    major justification for investing in new infrastructure is to
    reduce the hedge; that is, the weapons we hold in reserve in
    case an unforeseen problem occurs with their reliability and
    performance.
        NNSA must do a better job explaining how these multi-
    billion dollar facilities and major investments in experimental
    facilities, such as the National Ignition Facility, will help
    us draw down the stockpile further.
        As you know, Mr. D'Agostino, this is important to me. You
    are asking for a lot of money, so the performance has to be
    there to back up this additional money in reduction of nuclear
    weapons.
        Joining us today to explore these important national
    security issues is Thomas P. D'Agostino, the Administrator of
    the National Nuclear Security Administration. Senator
    Alexander, I want you to know I have the highest respect for
    him. We had substantial classified briefings on the prior
    effort on the Reliable replacement Warhead program and, before
    that, on the proposal for increased nuclear weapons, plutonium
    pits, advanced weapons concepts, and on and on. He has always
    been an absolute straight shooter, and I really, really prize
    that. So, I know what you say is the truth, and I very much
    appreciate that.
        Joining Mr. D'Agostino is Dr. Donald Cook, the Deputy
    Administrator for Weapons Activities; Anne Harrington, the
    Deputy Administrator for Nuclear Nonproliferation; and Admiral
    Kirkland Donald, Deputy Administrator for Naval Reactors. So,
    thank you all for taking time to be here today, and let me turn
    to Senator Alexander for his comments.

                      STATEMENT OF SENATOR LAMAR ALEXANDER

        Senator Alexander. Thank you, Senator Feinstein. As always,
    it is good to work with you and to see you. And thank you for
    our very accomplished witnesses for being here. I look forward
    to your testimony.
        I have three or four points I would like to make.
        Number one, if Senator Inouye and Senator Cochran were
    here, I would say--and if they come I will say--that most of
    NNSA's responsibility are in support of the U.S. military, and
    this appropriation ought to be treated in part like Defense
    spending. And that will become increasingly important as we
    make budgets over the next several years because when we have a
    Government that is collecting $2.2 trillion and spending $3.7
    trillion, we have a lot of tough decisions to make. And we
    have, as the Senator said--the Chair said--we have a
    significant increase in a--in nuclear modernization, for
    example. We agreed on that. The President agreed with that in
    connection with the vote of the new START Treaty, which I
    supported. I think it was a wise treaty. But at the same time,
    we do not want our nuclear weapons to begin to resemble a
    collection of wet matches, and they will not, given the plan
    that is laid out here.
        So, that is my first point, Madam Chairman, that I think as
    we talk with Senators Inouye and Cochran, that when allocations
    are made, that this spending should be defense spending and not
    be competing with National Labs, other environmental clean-up,
    et cetera.
        Number two, I would like to follow up on Senator
    Feinstein's point about management of projects. Probably the
    area where we in the Senate have not done as well as we should
    have is in the area of oversight. That really is a true
    function of the Congress, especially of the appropriations
    subcommittees. I mean, it is our job really to understand
    issues. We work hard on that, but we get pulled in many
    different ways and do not have a chance to do that as much as
    we should.
        And that should be particularly true with the Department of
    Energy (DOE) and with this part of DOE because it is just full
    of multi-billion dollar projects. I just left a meeting with
    Secretary Chu. We were talking about environmental management
    projects, which are a different part of DOE. But there, he has
    got massive projects, and when we are spending too much, there
    are difficult decisions. We have got to clean up radiation. We
    have got to clean up mercury. But if we can save $1 billion
    here or $1 billion there, that money can go to National
    Laboratories. It can go to research for energy. It can go to
    environmental clean-up. It can go to a whole variety of areas.
        So, I hope that I can support the chairman and that we can
    vigorously assist you in taking a fresh look at project
    management as we go through this period of reduced spending. In
    fact, we are going to have to if we are going to have the money
    to do what we need to do.
        Third, I have a list of about $20 billion of your major
    NNSA projects. And it would be nice to talk about ways to
    figure out what is it really going to cost, and then can it
    stay that way? I remember while I was running for Governor, a
    group in Knoxville wanted a road built. And I asked the
    chairman of the Chamber of Commerce, well, how do you propose I
    do that if I am elected? He said, well, I would get the best
    possible person to run it, to agree on a plan and meet with him
    once a month, and see if you are following the plan. Well, I
    was elected. I got that person to come be the transportation
    commissioner. We met once a month. The road got built. So,
    maybe we need to make sure that we get designs that we agree
    with, cost amounts that we agree on, and have monthly report
    sessions to make sure that we are on schedule or not on
    schedule. Maybe we can be of assistance in that way.
        Fourth, that leads me to some questions I will be asking
    during my question time about whether it is a good idea, Mr.
    D'Agostino, to spend time consolidating a contract at Oak Ridge
    and Pantex, or Y-12 and Pantex, whether you could really save
    more money and more of your management energy doing that and
    causing the contractor to work on that, or whether you would be
    better off working on all these big projects I was just talking
    about. So, we will get into that.
        Finally, I am delighted to see--delighted to talk a little
    bit about naval reactors. It has always puzzled me, Senator
    Feinstein, about why we seem to do so well with the naval
    reactors and we cannot build a nuclear power plant in the
    United States. In fact, one of my proposals, and I was only
    partly in jest, that the way to have clean electricity in the
    United States, the largest amount of it, is just to build seven
    nuclear-powered destroyers and plug them in around the country
    where the population centers are, and have, you know, add
    15,000 or 20,000 megawatts of clean electricity. We could
    probably get that done in a short period of time. We are able
    to--I mean, both have been safe. We have never had a fatality
    either in connection with a naval reactor or with a civilian
    reactor. But I think we have a lot to learn from naval reactors
    that we might transfer to our civilian reactor program. So, I
    will look forward, Admiral, to talking about that and what you
    think we might learn from that as well as supporting your
    efforts.
        So, Madam Chair, this is--and ought to be--a fascinating
    hearing. I look forward to the testimony and thank you for your
    time.
        Senator Feinstein. Thank you very much, Senator, and I look
    forward to working with you. We did so on Interior, and we will
    do so on this subcommittee as well.
        Let me turn to you now, Mr. D'Agostino. Will you be making
    the comments for everybody at the table?
        Mr. D'Agostino. Yes, Madam Chairman.
        Senator Feinstein. Okay. Please proceed.

                   SUMMARY STATEMENT OF THOMAS P. D'AGOSTINO

        Mr. D'Agostino. Thank you. Madam Chairwoman, Ranking Member
    Alexander, thank you for the opportunity to address this
    subcommittee today. But more importantly, thank you for your
    continued support of the NNSA and the 35,000 men and women
    working across our enterprise to keep our country safe, protect
    our allies, and enhance global security. We could not do this
    work without strong bipartisan support and engaged leadership
    from the Congress.
        As I come before you today, the capability NNSA offers to
    the Nation, and indeed the world, are on display in real time.
    Just last week, I had the opportunity to travel to Nevada to
    visit the Remote Sensing Laboratory. For 7 weeks, the talented
    and dedicated men and women at the Remote Sensing Laboratory
    had been working with their colleagues from across the
    enterprise to support the response to the devastating
    earthquake and tsunami that struck Japan on March 11, 2011.
    They had been providing critical information to our interagency
    colleagues and to our partners in Japan. Of course, our
    thoughts and prayers are with the Japanese people during this
    very difficult time, but I was honored to have the opportunity
    to thank our men and women personally and directly last week
    for their outstanding work.
        Our ability to respond to this crisis is the latest example
    of the vital and diverse role we play in implementing the
    President's nuclear security agenda and of the need to invest
    in the future of our enterprise. This budget request seeks the
    funds required to make these investments.
        As I see it, the budget request can be broken down into
    three key themes. First, we're investing in the future.
    President Obama has requested $7.6 billion for our weapons
    activities account to support our effort to leverage the best
    science and technology in the world to maintain our nuclear
    deterrent. This will enable us to enhance our surveillance of
    the stockpile, continue to design modern facilities that we
    need to maintain our Nation's expertise in uranium and
    plutonium processing and research, and proceed with key life
    extension programs for our weapon systems.
        A critical part of that is the life extension program for
    the W78 warhead. Consistent with the policies in the
    President's Nuclear Posture Review, we have submitted a request
    to this subcommittee and the House Energy and Water Development
    Subcommittee to begin studying the requirements for the W78
    life extension, including the option for interoperability of
    the nuclear explosive package with the Navy's W88 warhead. I
    strongly encourage this subcommittee to approve this request.
        Investing in a modern enterprise is critical to our
    stewardship program, but it also supports the full range of
    NNSA's nuclear security missions, which brings me to the second
    key theme that this budget request shows, and that is
    implementing the President's nuclear security agenda. As
    President Obama has said in his speech in Prague in April 2009,
    the threat of a terrorist acquiring and using a nuclear weapon
    is the most immediate and extreme threat we face. Preventing
    the spread of nuclear weapons and keeping dangerous materials
    out of the hands of terrorists is a vital national security
    priority.
        To address that threat, we are requesting $2.5 billion in
    2012 and more than $14.2 billion over the next 5 years for our
    nuclear nonproliferation programs. This will provide the
    resources required to meet the commitment secured during the
    2010 Nuclear Security Summit.
        To power the nuclear Navy, President Obama has requested
    $1.1 billion for NNSA's naval reactors program. This will allow
    us to continue the design work on the propulsion unit for the
    Ohio Class Replacement Submarine in order to meet the Navy's
    required procurement date of 2019. It includes critical
    investments in a modern and sustainable spent fuel, spent
    nuclear fuel infrastructure at the naval reactor site in Idaho
    National Laboratory. And finally it seeks the resources to
    refuel the land based prototype in upstate New York.
        Madam Chairwoman, I realize that this subcommittee has many
    competing requirements and that this request comes at a time of
    acute financial stress for our entire country. But I believe
    nothing is more important than ensuring our Nation's security.
    It is my responsibility to assure you that we can manage these
    increases wisely.
        That brings me to the third key theme outlined in this
    budget request, and that is our commitment to improve the way
    we do business and manage our resources.
        For us, improving our project management is part of the
    implementing, achieving our mission, and implementing the
    President's nuclear security agenda. To better ensure that we
    bring these major projects to completion on time and on budget,
    we will ensure that we have qualified project managers leading
    our major projects. We will set costs and schedule baselines on
    construction projects when design work is 90 percent complete,
    and we will subject these estimates to rigorous independent
    reviews.
        We are partnering with our Management and Operations (M&O)
    partners to streamline our governance model to devote more
    resources to critical mission work while maximizing safety and
    security at our sites. We are making sure that we have the
    right contracting strategy in place. We are continuing to find
    innovative ways to save money across the enterprise. For
    example, since 2007, our Supply Chain Management Center has
    used new technologies and pool purchasing power to drive
    efficiencies across our sites. The result has been more than
    $213 million in auditable cost savings.

                               PREPARED STATEMENT

        All of this is part of our effort to create one NNSA, a
    true partnership between all of our programs and all of our
    partners to fulfill a common mission. Taken together, these
    steps will ensure that we have a modern, 21st century nuclear
    security enterprise that is safer, more secure, more efficient,
    and organized to succeed. That is the vision outlined in this
    budget request. It supports the full range of NNSA missions,
    and, more importantly, it represents a critical investment in
    the infrastructure, the people, the science, technology, and
    engineering required to fulfill our missions. I look forward to
    working with the members of this subcommittee to help make that
    vision a reality.
        With that, we would be happy to take any questions you may
    have.
        [The statement follows:]

                   Prepared Statement of Thomas P. D'Agostino

        Thank you for the opportunity to present the fiscal year 2012
    President's budget request for the National Nuclear Security
    Administration (NNSA). This budget request will allow the NNSA to meet
    its commitments to the American people and our international partners
    to provide for nuclear deterrence, to reduce nuclear dangers around the
    world, and to provide the capabilities to address the broader national
    security challenges of the 21st century.
        The vision of NNSA is to make the world a safer place. NNSA's
    mission is to enhance global security through nuclear deterrence,
    nonproliferation, counterterrorism, naval nuclear propulsion, and to
    support national leadership in science and technology.
        Recognizing the economic challenges facing our Nation and the
    budget pressures being felt throughout the Federal Government, the
    President demonstrates through this fiscal year 2012 budget request his
    strong commitment to the nuclear security of our country and our allies
    by proposing an unprecedented investment in NNSA's mission. This
    investment is a commitment to recapitalize the nuclear security
    enterprise and do it in a way that makes sense.
        The fiscal year 2012 President's budget request provides $11.78
    billion to invest in a modern, 21st century nuclear security
    enterprise, implement the President's nuclear security agenda, and
    improve the way the NNSA does business and manages its resources.
        The fiscal year 2012 request represents an increase of 5.1 percent
    more than the $11.2 billion requested for fiscal year 2011, reflecting
    a commitment to investing in a modern enterprise that can support the
    full range of nuclear security missions. The request highlights the
    vital role NNSA plays in implementing the President's nuclear security
    agenda and the broad, bipartisan consensus that has developed over the
    last 2 years regarding the role NNSA plays in enhancing our Nation's
    security and the resources needed to get the job done.

                            INVESTING IN THE FUTURE

        Secretary of Energy Chu and I work closely with Secretary of
    Defense Gates and other Defense Department (DOD) officials to ensure
    that NNSA remains focused on a strong interagency partnership that
    meets our national security requirements and promotes NNSA's
    sustainability. As a result, the President's request includes $7.6
    billion for the weapons activities appropriation, an 8.9 percent
    increase more than the President's fiscal year 2011 request and a 19.5
    percent increase over the fiscal year 2010 appropriation to invest in
    the future of the nuclear security enterprise. These resources will
    support, among other things, the operation and construction of the
    modern research facilities needed to do cutting-edge science and
    attract the next generation of nuclear security experts. It continues
    implementation of the President's commitment to invest $85 billion over
    the next decade to sustain the nuclear deterrent and to modernize the
    infrastructure that supports it, as well as to implement the agenda
    outlined in the Nuclear Posture Review, the Stockpile Stewardship and
    Management Plan and the updated section 1251 report submitted to the
    Congress.
        NNSA's budget request also includes associated out-year projections
    in the Future-Years Nuclear Security Program (FYNSP) that identifies
    resources needed to meet the continuing requirements for significant
    long-term investments in the deliverables, capabilities and
    infrastructure of the enterprise.
        These resources will help us invest in a modern, 21st century
    Nuclear Security Enterprise that can sustain the stockpile and support
    our full range of nuclear security missions. With these investments,
    NNSA will be able to continue to move toward an enterprise that is
    safer, smaller, more secure, more efficient, more sustainable, and more
    adaptable.
        The request includes an increase of 3.1 percent more than the
    fiscal year 2011 level to protect and advance the scientific
    capabilities at the U.S. national security laboratories and a 21
    percent increase for infrastructure improvements, including continuing
    work on the Uranium Processing Facility at the Y-12 National Security
    Complex and the Chemistry and Metallurgy Research Replacement facility
    (CMRR) at Los Alamos National Laboratory. These capital projects are
    key for ensuring safe, secure, and reliable uranium and plutonium
    capabilities for nuclear security and other important missions.
        To power the nuclear navy, the budget request includes $1.2 billion
    for the NNSA's Naval Reactors program, an increase of 7.8 percent more
    than the fiscal year 2011 President's request. The programs in this
    appropriation support the U.S. Navy's nuclear fleet. Specifically, the
    request supports the administration's decision to recapitalize the sea-
    based strategic deterrent. The Ohio Class ballistic submarines, the
    most survivable leg of the Nation's strategic deterrent, are reaching
    the end of their operational life. The request will enable Naval
    Reactors to continue reactor plant design and development efforts begun
    in 2010 for procurement of long-lead reactor plant components in 2017,
    in support of Navy procurement of the first Ohio Class submarine
    replacement in 2019. Providing the Ohio Class replacement a life-of-
    the-ship reactor core will require substantial advances in
    manufacturing technology to provide a new cladding and a new fuel
    system. The request also supports the refueling of a land based
    prototype reactor, providing a cost-effective test platform for these
    new technologies.
        Increased funding is also requested for the Spent Fuel Handling
    Recapitalization Project, which will replace the more than 50-year old
    Expended Core Facility as the location for naval spent nuclear fuel
    receipt, inspection, dissection, packaging, and secure dry storage.
    Fiscal year 2012 funding continues the conceptual design for the
    facility, equipment, and related systems, as well as continues meeting
    the National Environmental Policy Act's requirements and project
    oversight (e.g., engineering procurement and construction management).
    Detailed project engineering and design work will commence in fiscal
    year 2013 and construction will commence in fiscal year 2015.
        These vital projects will replace facilities that date back to the
    dawn of the cold war with modern facilities that can support the full
    range of nuclear security missions--including maintaining the nuclear
    deterrent, preventing proliferation, securing vulnerable nuclear
    material, powering the nuclear Navy and providing the Nation with the
    best emergency response and counterterrorism capabilities possible.
    They will also ensure that NNSA can continue to work with the
    Department of Defense and other interagency partners to keep the Nation
    safe.

              IMPLEMENTING THE PRESIDENT'S NUCLEAR SECURITY AGENDA

        The fiscal year 2012 budget request also provides the resources
    required to continue to work toward the President's commitment to
    secure vulnerable nuclear material around the world within 4 years, a
    key national security goal. The budget request includes $2.5 billion
    for Defense Nuclear Nonproliferation in fiscal year 2012 and $14.2
    billion over the next 5 years to reduce the global nuclear threat by
    detecting, securing, safeguarding, disposing and controlling nuclear
    and radiological material worldwide, as well as promoting the
    responsible application of nuclear technology and science.
        This request reflects the significant accomplishments of NNSA's
    nuclear nonproliferation programs in the past year, and seeks the
    resources needed to complete the President's goals. This budget request
    provides the resources required to meet commitments secured from
    international partners during the 2010 Nuclear Security Summit to
    remove all remaining highly enriched uranium (HEU) from Belarus,
    Ukraine, Mexico, and other countries by April 2012 and to work with the
    Defense Department to improve international nuclear security
    cooperation.
        The request of $2.5 billion is a decrease of 5.1 percent from the
    fiscal year 2011 President's request, but an increase of 19.6 percent
    more than the fiscal year 2010 appropriation. This 5.1 percent or $138
    million decline flows logically from the fiscal year 2011 request which
    was ``front loaded'' to accelerate the effort to secure vulnerable
    nuclear materials within the President's stated timeframe. Even with
    this decrease, the NNSA's budget request remains consistent with our
    overall strategy to ensure that programs supporting the President's
    commitment to lead an international effort to secure all vulnerable
    nuclear materials around the world in 4 years are fully funded in the
    request. The Global Threat Reduction Initiative efforts related to
    radiological material, as well as the International Nuclear Material
    Protection and Cooperation program's activities to enhance the ability
    of our foreign partners to detect nuclear smuggling at border crossings
    and in megaports have been prioritized to accommodate accelerated
    nuclear material lockdown efforts. The decrease in the request for
    Fissile Materials Disposition reflects the completion of long-lead
    procurements for the MOX and Waste Solidification projects,
    as well as the decision to wait to request additional funds associated
    with the $400 million United States pledge for the Russian program
    until agreement is reached on milestones for the program.

        IMPROVING THE WAY NATIONAL NUCLEAR SECURITY ADMINISTRATION DOES
                                    BUSINESS

        Consistent with the President's commitment to deliver on critical
    national nuclear security missions at the best value to the American
    taxpayer, the fiscal year 2012 budget request will enable NNSA to
    continue to improve the way it does business and manages resources. The
    President's budget request for Federal oversight and staff included in
    the Office of the Administrator appropriation is $450.1 million, an
    increase of 0.4 percent more than the fiscal year 2011 request and an
    increase of 7 percent more than the fiscal year 2010 appropriation.
        NNSA recognizes that the fiscal year 2012 budgetary investments
    come at time of severe economic challenge for our country and a renewed
    commitment to reduce the deficit. To maintain bipartisan support for
    the NNSA programs, the enterprise has a responsibility to work together
    as ``One NNSA'', a fully integrated enterprise that operates
    efficiently, is organized to succeed, that performs its work
    seamlessly, and speaks with one voice. This ``One NNSA'' needs to be a
    true partnership among Headquarters, the Site Offices and our
    Management and Operations (M&O) partners.
        Changing the way NNSA does business is an important part of the
    effort to transform a cold war nuclear weapons complex into a 21st
    Century Nuclear Security Enterprise. NNSA simply cannot expect the
    Congress to support major investments in its programs and its
    facilities unless the enterprise can demonstrate that the Department of
    Energy is a responsible steward of the taxpayer's money.
        NNSA needs to do better, which is why the Federal sector leadership
    is working with its M&O partners to streamline the enterprise
    governance model in order to devote more resources to critical mission
    work and maximize NNSA's ability to complete its mission safely and
    securely.
        NNSA is making sure that it has the right contracting strategy in
    place. The agency is improving its project management by, for example,
    ensuring that NNSA no longer sets cost and schedule performance
    baselines on construction projects until design work is 90 percent
    complete, ensuring it has the right leadership teams in place, and
    performing independent cost reviews. NNSA has also created a new policy
    and oversight office for managing major projects. The new office
    reports directly to the Administrator. This will help ensure that
    project management gets the high-level focus it requires.
        We are already beginning to see results. NNSA is increasingly
    recognized for its efforts to be an effective steward of tax dollars.
    For example, since 2007, NNSA's Supply Chain Management Center has
    saved $213 million by using pooled purchasing power to drive
    efficiencies across the enterprise. In the last year NNSA's Kansas City
    Plant won the prestigious Malcolm Baldrige Award, America's highest
    honor for innovation and performance excellence. Two other NNSA
    programs were recognized with Project Management Institute (PMI)
    awards. In 2010, the Global Threat Reduction Initiative became the
    first Federal project to receive PMI's Distinguished Project Award,
    while the National Ignition Facility at Lawrence Livermore National
    Laboratory received PMI's project of the year.

                                   CONCLUSION

        The Nation has carefully evaluated its security needs in an
    international landscape that remains challenging and uncertain. NNSA
    has charted a path forward that shows our unwavering commitment to the
    Nation's security and enhances our formidable capabilities to address
    broader security challenges.
        The NNSA is a technically based organization with a strong nuclear
    heritage that serves as the base for our contribution to a wide range
    of national security solutions. NNSA is rooted in the management of our
    Nation's nuclear weapons stockpile and the application of nuclear
    energy for naval propulsion. Additionally, NNSA capabilities support a
    broad range of U.S. and international activities that address existing
    dangers, identify and prepare for future challenges, and advise the
    U.S. Government and our international partners on nuclear security
    matters.
        This budget request takes the NNSA into the next decade and
    strengthens the capabilities that are themselves integral elements of
    our nuclear deterrent. The challenge is to retain the capabilities that
    continue to be essential, and to identify and develop those needed for
    the future.

        Senator Feinstein. Thank you very much. I appreciate that.
        Data provided by DOE and your entity shows that there are
    more full-time equivalent (FTE) staff working at the three
    nuclear weapons labs--Los Alamos, Livermore, and Sandia--than
    at the height of the cold war. In 1987, there were 12,160 FTEs
    when the United States had 23,575 nuclear weapons. In 2009, the
    labs had 13,977 FTEs when the United States had one-third the
    number of nuclear weapons, namely 5,113.
        So, you have had 15 percent more FTEs to maintain a nuclear
    stockpile that is 78 percent smaller. Could you please tell us
    why?
        Mr. D'Agostino. Yes, ma'am. I think it's due to a couple of
    reasons, and I--if it is possible, I would like for my
    colleagues to also answer--follow on with me behind me.
        I think one of the main reasons is we have an inherently
    different program now than we had during the height of the cold
    war. During the height of the cold war, we were in the process
    of constantly cycling and training and designing, develop,
    test, deploy, and take out systems, so there was a constant
    flow in production. And that type of a process allows a very
    efficient design through production through finishing off a
    life-cycle process, if you will, in our weapon systems. And we
    are obviously doing underground nuclear tests.
        Now, we are relying on science a lot more, if you will, to
    ensure that we can take care of these--the stockpile without
    underground testing. That is a completely new era that we have
    had to, in fact, invent, if you will, with our laboratories to
    develop the tools, deploy the tools. Tools in this case I am
    talking about are computers, are large, experimental
    facilities, like the dual access radiographic hydro test
    facility at Los Alamos, the National Ignition Facility at
    Lawrence Livermore, the Z machine at Sandia--develop these
    tools in order to do a lot more subcritical experiments and
    basic science and material experiments and use the codes to do
    this. And this requires a tremendous amount more, in my view,
    of scientists and engineers in order to achieve that
    capability.
        So, the job, I think, in many respects is a harder job, and
    is not directly attributable one-to-one to the size and number
    of the stockpiles.
        I think the second major reason is we have, in my view,
    particularly as we look at the data, an increase in the
    recognition of how these laboratories contribute to a much
    broader range of national security and nuclear security work
    than they did 20, 30 years ago. We are obviously--in many
    cases, our response, the DOE's response, to the Macondo oil
    spill--the BP oil spill is what it has been called--much of
    that technology came from three national security laboratories
    themselves. I would ask Don to add.
        Dr. Cook. I think it is a good question. Madam Chairman, if
    I could add to what the administrator has said, I would
    emphasize that we do have a broader range of work for multiple
    agencies. The national weapons labs especially are very
    important capabilities. They are accessed routinely these days
    by the Departments of Defense, Homeland Security, and Director
    of National Intelligence, in addition to DOE.
        With regard to the stockpile, it is true that we have the
    oldest stockpile we have ever had.
        Senator Feinstein. Well, that is going to continue.
        Dr. Cook. Yes. Yes.
        Senator Feinstein. I mean you are just going to build the
    stockpile.
        Dr. Cook. I think that is a clear statement. It is going to
    continue. It is also currently the smallest stockpile we have
    had since the days of the Eisenhower administration. The fact
    that it is the oldest and smallest means now that as we go
    forward, while we may continue to reduce warhead numbers, we
    must modernize, at the same time, the deterrent warheads and
    the infrastructure. And those are key contributors to the size
    of the workforce that we have.
        Senator Feinstein. Just as an aside to my colleague, you
    know when I was mayor of San Francisco--it has been that long
    ago--we computerized the city. I had the computer companies in
    and talked to them because it was a big contract. We thought
    oh, it would save the city money. I think it was a substantial
    number of employees, in the thousands; I cannot remember what.
    So, we did it. Do you think it reduced employments? No. It
    increased employments. So, you know, I think there is that
    factor that technology does not necessarily reduce employees
    qualified to handle the technology.
        But since it is just the two of us, and I will give the
    ranking member as much time as he wants, I want to just ask one
    other question right now.
        Senator Alexander. Please go ahead.
        Senator Feinstein. I expressed some concern about the risk
    of insiders stealing or helping to steal nuclear materials, and
    I think the large number of sites around the world magnifies
    that threat. For example, Russia and countries in the former
    Soviet Union alone have more than 230 buildings at more than
    130 sites that store weapons usable nuclear materials.
        So, the question is, what is NNSA doing to consolidate
    nuclear materials to a much smaller and easier to protect
    number of sites and buildings, especially in Russia?
        Mr. D'Agostino. If I could start and then ask Anne
    Harrington to follow on.
        Senator Feinstein. Please.
        Mr. D'Agostino. But we have a very active program with the
    Russians to not just secure material at their sites, but we
    have a sustainability component with the Ministry of Defense in
    Russia. We have essentially completed the security work there,
    and they have agreed and are following up on making sure that
    those security upgrades are maintained and to have them out
    into the future.
        With Rosatom, which is what--a little bit more on the
    civilian side or a little bit more equivalent to the NNSA, we
    have an active program of upgrading their sites there, and we
    have more of a cost-share arrangement to do on the work there.
        There is more work that has to be done in Russia, and
    Anne's team is working actively to partner with our colleagues
    there to make this happen.
        Senator Feinstein. Let me just stop you. Does it need 230
    buildings at 130 sites?
        Mr. D'Agostino. In fact, this is one of the concerns that
    we, together with the Russians, acknowledge that the more
    material that you have and more sites there is, the harder it
    is to protect. In this country, we have undertaken our own
    efforts for material consolidation because in the long run it
    is cheaper to protect material at fewer sites.
        Senator Feinstein. How many sites do we have in comparison?
        Mr. D'Agostino. Well, the 230 sites are--we have our 7 main
    sites, but within those 7 sites we are looking to move material
    out of the Lawrence Livermore Laboratory to reduce the security
    footprint and move some of that material into some of our other
    sites because we think it is not just safer to protect, but it
    is also cheaper. We hope to be saving some security dollars as
    a result of that.
        Senator Feinstein. We will mark that down.
        Mr. D'Agostino. Anne, do you want to add anything, please?
        Ms. Harrington. I would just add that it is a matter of our
    program policy that any country in which we work, we do
    encourage the consolidation of materials. And, in fact, that is
    what the 4-year effort is really aimed at, is not just
    consolidating materials, but consolidating and then removing
    the materials permanently, and then providing physical security
    upgrades in that interim period between when we negotiate the
    agreement and physically remove the material.
        Senator Feinstein. Ma'am, let me just interrupt you again.
    I understand that April 2010 was the halfway mark of the goal
    of securing all vulnerable nuclear materials in 4 years. Are
    you on track to secure it all in 4 years?
        Ms. Harrington. Well, April 2010 would have been 1 year, so
    approximately now would be 2 years from April, yes.
        Senator Feinstein. Well, now it is 2 years.
        Ms. Harrington. Yes, correct. We are about halfway at this
    point.
        Senator Feinstein. So, you have 2 more years.
        Ms. Harrington. Correct. I have to admit the continuing
    resolution situation that we have been in up until recently
    this year has presented some real challenges in terms of
    maintaining our schedule. We have deferred some other
    activities in order to keep these removals on schedule. We will
    have perhaps a little slippage, but not out of calendar years.
    We certainly are on track right now with Ukraine, Mexico, and
    Belarus to meet those high-level nuclear security summits
    commitments to remove all materials by the time we hit the 2012
    summit. So, we feel confident right now that we can make up----
        Senator Feinstein. You could make that 2-year goal.
        Ms. Harrington. We are on schedule to do that right now.
        Senator Feinstein. One quick question, are you prioritizing
    the sites?
        Ms. Harrington. Absolutely.
        Senator Feinstein. So, there is a list of priorities?
        Ms. Harrington. Correct.
        Senator Feinstein. Could we see that list please?
        Ms. Harrington. We can get that to you, yes.
        Senator Feinstein. Okay. Thank you very much.
        Mr. Vice Chairman? You go ahead, and then we will go back
    and forth.
        Senator Alexander. Okay. Thanks, Madam Chairman.
        Mr. D'Agostino, I would like to have just a little
    conversation with you about big projects and bringing them in
    on time and on budget. I mean, you have got a former mayor here
    and a former Governor here, so we are frustrated by the lack of
    executive opportunities we have in the U.S. Senate. So, this is
    a chance for us to weigh in.
        But you have got some really big things going on. I mean,
    the Uranium Processing Facility (UPF) is estimated to cost $4.2
    to $6.5 billion. That is a pretty big range. I mean, and a few
    years ago it was $1 billion, and then it was $2 billion, then
    it was $3 billion, and it is still going up. The Chemistry and
    Metallurgical Research Facility at Los Alamos, the range for it
    is $3.7 to $5.8 billion, and that is a massive range. And then
    we can go down the list of other big projects. Mixed oxide
    fuel, which is nearly $5 billion. The Life Extension Projects
    that is part of our nuclear modernization, those are $3 billion
    and $4 billion. So, these are big, big projects. And I remember
    the excitement that happened in Oak Ridge when the Spallation
    Neutron Source came in on time under budget, although it was a
    massive physics project.
        So, what can we do to be helpful to administrators, such as
    yourself, to set up a process by which we can take these big--I
    mean, I can add up at least $20 billion of projects over the
    next few years just in your area, and come up with a goal and a
    design, and then together we will see if we can stick to that
    goal and design and see if we can do it in a way that does what
    we need to do, but at the least possible cost.
        I know that is your objective, but sometimes that is hard
    to do in Government. What can we do to help you achieve that?
        Mr. D'Agostino. Senator Alexander, first of all thank you.
    I appreciate the opportunity to talk to executives in this
    fashion and get your insight as well.
        I think one of the main things as a subcommittee that you
    can do is give us the time to interact in sessions such as this
    and in other sessions where we can talk about, on a fairly
    regular basis, our progress, our plans, and our steps on
    meeting our, essentially, our collective objectives of
    providing the Nation the capability. The objective is not to
    spend all that money; that is not the objective. The objective
    is to get the capability for the Nation, as you said, in a
    fashion that gets it on time, on budget, and what the country
    needs to move forward. So, time with you, Sir, with the
    subcommittee as a whole, with you and your staff, and
    reporting, you know, on the appropriate basis is very helpful
    to us.
        Senator Alexander. But would not the first thing to do to
    be--to get a design and a cost estimate that you can live with?
    Would that be the first thing? How do we get to that point?
        Mr. D'Agostino. I basically see three broad steps that we
    are in the process of taking and either have completed or need
    to finish off on. One is getting our policy--project management
    policies correct. We have in the Department, most recently
    within the last year, and now are implementing in our projects,
    whether they are small dollar projects or billion dollar
    projects, a couple of key principles. And that is, we do not go
    off and declare what something is going to cost until we
    actually know what it is we are building and we have that
    design largely completed. Once that baseline is set, then it
    sticks. That would be one thing.
        The second thing is annual detailed independent peer review
    analysis. One of the things that we have learned from the
    Office of Science, which talked about the spatial neutron----
        Senator Alexander. Analysis of what, of the construction?
        Mr. D'Agostino. Of the construction project--of the project
    itself, independent peer reviews on an annual basis of the
    projects themselves, so this is something we are committed to
    doing. And, in fact, for two of these large facilities that we
    were just talking about, that is actually under way. My
    principal deputy, Neile Miller, sitting behind me, has started
    this type of an interaction and dialogue with the Defense
    Department, people outside of the NNSA and even outside of DOE,
    to bring project experts and other experts that independently
    check our work on a regular basis. That is another important
    policy element that we have in place.
        The next important thing is bringing the right people to
    bear on the problem. One of the great things that Neile Miller
    has brought to the table is looking at and recognizing that
    over the next 10 years, project management is our--has to be
    our key focus in this organization because that will define,
    first of all, can we----
        Senator Alexander. Well, let me not be rude and interrupt.
        Mr. D'Agostino. Yes.
        Senator Alexander. Let me go--get you to slim that answer
    down a little bit. I mean, what are the three steps you need to
    take? Do you not first need to design--you first you need a
    policy.
        Mr. D'Agostino. We have to get the policy right.
        Senator Alexander. Right.
        Mr. D'Agostino. We have to get a design----
        Senator Alexander. Then you have to get a design.
        Mr. D'Agostino [continuing]. That we have actually checked
    on, that has been independently checked to be true and been
    validated--independently checked and validated.
        Senator Alexander. Then you need a cost estimate, is that
    fair?
        Mr. D'Agostino. That cost estimate and the design will go
    together.
        Senator Alexander. So, those come together.
        Mr. D'Agostino. We have a schedule.
        Senator Alexander. So, once you have a policy and a cost
    estimate design, then you are ready to go, is that----
        Mr. D'Agostino. Then we are ready to go----
        Senator Alexander. Right.
        Mr. D'Agostino [continuing]. And then we will come back
    and----
        Senator Alexander. And then it is the regular review of
    your progress toward a goal.
        Mr. D'Agostino. Right.
        Senator Alexander. And our involvement in that--well, lets
    just--take these two examples of the UPF--I mean, there you
    have got $4.2 billion to $6.5 billion in the Chemistry and
    Metallurgical Building at Los Alamos, $3.7 to $5.8 billion. How
    soon before we get--is the policy set on those two projects?
        Mr. D'Agostino. Yes, it is, to get 90 percent design on
    those projects, yes, Sir.
        Senator Alexander. Okay. When we do we get 90 percent
    design on those two projects?
        Mr. D'Agostino. October 2012, is that right, Don?
        Dr. Cook. Yes. It is the end the end of fiscal year 2012.
        Senator Alexander. Yes, the end of next year----
        Mr. D'Agostino. Yes.
        Senator Alexander [continuing]. We will have our policy and
    our cost-estimate design at some number.
        Dr. Cook. That is correct. We are now just a bit beyond 50
    percent full engineering design on each of the two projects,
    chemistry and metallurgy research, UPF. Another step we have
    taken is to require actually the parent companies to integrate
    the design teams, look for common buys, gloves boxes we will
    use in both facilities, develop a plan of phasing that allows
    us to build--these are, after all, new nuclear builds. They are
    the hardest categories to replace capabilities really that have
    exceeded 60 years of age.
        Senator Alexander. Right. So by the end of next year there
    is a design and a cost estimate. But between now and then, what
    do we need to know about what you are doing to help you get a
    cost estimate you can live with? I mean, what do we need to be
    doing?
        Mr. D'Agostino. Well, Sir, you need--one of the things you
    will need to know is that we are not just resting on input we
    are getting from our M&O contractors. We are having these
    independently checked on one case, and we are probably going to
    have two independent checks because these are such large
    facilities. The one that we are doing with our colleagues in
    the Defense Department, and we will commission another
    independent check ourselves separately from that because one of
    the things I want to get us in the habit is under promising and
    over delivering, and when we make a commitment we deliver on
    that commitment.
        Senator Alexander. Well, we can continue this discussion
    another time. But to me, this boils down to a pretty simple
    thing, from our point of view, a very complex operation from
    yours. But it is to define the points where we get a real cost
    estimate and a real design and we say okay, that is it, you
    know. And we are then going to probably embark on a 3-, 5-, 6-,
    or 7-year period, right, of construction.
        Mr. D'Agostino. Yes, Sir.
        Senator Alexander. And so, during that period of time we
    should be having quarterly discussions about are you on
    schedule? If you are not, why not, so that we do not wind up
    and find that a $4 billion cost estimate ends up being a $7
    billion----
        Mr. D'Agostino. We would be happy to come up quarterly
    during the period of time as we get into construction in order
    to let you know the progress. We will be getting ourselves
    monthly updates on earned value as well. So, I think rolling it
    out on a regular basis so you have confidence that we are on
    track is----
        Senator Alexander. Madam Chairman, that sounds awfully
    primitive for me to suggest, but it is almost a matter of being
    that simple from our--I mean, if every 3 months all they have
    to report is we are under budget and we are on schedule, then
    the meeting might last 10 minutes. If it is not, why, it might
    take a longer period than that.
        Senator Feinstein. I understand that, right.
        Senator Alexander. So, I have some other questions, but I
    think I will stop now. Thank you for your courtesy.
        Senator Feinstein. Okay, all right. Let me just put my
    philosophy on the table, which I think you already know. I am
    not for new nuclear weapons. I will do everything I can to
    prevent the development of a new nuclear weapon. I want to see
    them gone all over the world, and I will support any program to
    get that done, and I think I have been fairly consistent. We
    have had this discussion before, and you know where I stand.
        Okay. As you know, the JASONs have found that most
    plutonium pits have a lifetime of at least 100 years. It is my
    understanding that once again you are planning to manufacture
    new plutonium pits for weapons undergoing life extensions. The
    question is why.
        Mr. D'Agostino. I will start and then I will pass to Dr.
    Cook to add to that with some details.
        The JASONs did validate the analysis that we have performed
    at our laboratories that pit aging is not the issue that we
    once thought it was 8--7, 8 years ago or so. And that is
    actually a great thing because had it been the case where
    plutonium aging was one of the things that we would have to
    more aggressively go after, we would be looking in--at a
    situation--looking at a different type of a problem on the need
    to have a higher pit production capacity.
        The plutonium production pit sustainment effort itself that
    Don's program runs has a large part, in my view, couple of
    components to it. One is bringing back and maintaining a
    capability, maintaining a very small set of expertise in order
    to--for the Nation to be able to respond to unknown technical
    changes as a result of dealing with this very unique material
    that is a manmade material that we have a fairly limited data
    set of knowledge on. It has been around for 60 plus years or
    so, and that is about all the information we have on it. So----
        Senator Feinstein. Let me cut to it. If the pits are all
    good, why do you want to manufacture new pits?
        Mr. D'Agostino. Don.
        Dr. Cook. Again, I think it was a very good question. Let
    me try to give a quick technical answer.
        JASON determined that the lifetime of the plutonium parts
    in pits are good for 100 years or 80 was their conclusion. Due
    to plutonium decay, which is by alpha--that is helium--that
    interstitially causes a potential problem.
        The actual problems that we have go well beyond that. We
    have the plutonium pits in the midst of the chemistry of high
    explosives with binders that decompose just like plastics in
    cars exposed to the sun. The plutonium is radioactive; the
    decay goes on. That degrades all of the plastics, all of the
    cushions, all of the things that are around the pit. And it
    also causes corrosion in the pit.
        So, on the one hand, JASON is absolutely correct about what
    they said, but the difficulty is that as weapons get older,
    much of the chemistry in a radiolitic environment starts to
    take over. And that has been the problem.
        Senator Feinstein. Yes.
        Dr. Cook. And we have invested many of the people and time
    in surveillance to actually pin down in which weapon systems we
    are seeing those kinds of problems, and we can predict how long
    they are good for. Those are not good for 100 years.
        Senator Feinstein. Well, I think I would like to have a
    discussion with the JASONs, and particularly SIDREL. I have
    discussed this in the past, and I would like to do it again,
    and I would like to do it with both of you present----
        Dr. Cook. I absolutely support that.
        Senator Feinstein [continuing]. And Senator Alexander,
    because I hear different things. It is fair to say that you all
    wanted to develop new nuclear weapons. That's what RRW
    essentially did. It was killed because of it, and I do not want
    to see, you know, RRW in disguise right now.
        Mr. D'Agostino. We would be glad to come up and talk to
    you, Senator, in a session. The key here are no new pit nuclear
    component designs and we are very consistent with that. I think
    Sid and I will be on the same page with this, but we would like
    to be able to show you personally.
        Senator Feinstein. Because what you have always led me to
    believe is that modernization is really for the protection of
    the workers who work around some of the chemicals that are
    extraordinarily dangerous and may be deteriorating. But I was
    under the express belief, based on some of our discussions,
    that all of these new pits that were requested some years ago
    were really forming the foundation of a new nuclear weapon, not
    just a modernized nuclear weapon.
        Mr. D'Agostino. Senator, I want to make sure I am clear on
    what our plan is on plutonium sustainment so there is no
    question about it.
        What we are planning on doing is manufacturing a pit design
    that we currently have in the stockpile of a particular warhead
    and wanting to--because those we have very few of. And we
    believe that in order to reduce the size of the stockpile, that
    particular pit design, which already exists--it is not a new
    pit--is going to be the pit design that will allow us to
    potentially consolidate the number of different types of
    warheads and allow us to reduce the overall number of warheads.
        Senator Feinstein. Okay.
        Mr. D'Agostino. That is the key.
        Senator Feinstein. So, how many pits are you talking about?
        Mr. D'Agostino. On the plutonium sustainment? Don, what--
    are there 20 per year?
        Dr. Cook. The answer in terms of our capability----
        Mr. D'Agostino. Yes.
        Senator Feinstein. No, amount total to manufacture under
    this proposal.
        Dr. Cook. Let us see. We have been required by the
    Department of Defense, by U.S. Strategic Command, and by the
    requirements that we have laid to have a capability that is not
    less than 50 pits per year nor more than 80 for the----
        Senator Feinstein. So, are you saying to produce 50 to 80
    new pits a year?
        Dr. Cook. That to have not less than 50 and not more than
    80 is the----
        Senator Feinstein. Produced each year?
        Dr. Cook. That capability requires, yes, that is correct.
        Senator Feinstein. For a total of how many new pits?
        Dr. Cook. That is the number per year, and so if one
    calculates the number of years you would get that. It is
    consistent with the----
        Senator Feinstein. Calculated how many years?
        Dr. Cook. It is consistent----
        Senator Feinstein. Somebody must know how many pits you
    plan to make.
        Dr. Cook. Yes. It supports a stockpile of 3,000 to 3,500
    weapons in aggregate, the total as the Nuclear Posture Review
    and the national policy has laid out. Not that many will be on
    active alert, but that is the requirement for the total number
    including those----
        Senator Feinstein. So, what you are telling me is that the
    administration's design, or the Government's design, is that
    there are essentially 3,500. Well, I will not use the word new
    nuclear weapons, but with new pits essentially within what
    period of time?
        Dr. Cook. I--you know, I do not want to say that every one
    of those is a new pit. The capability that we are putting in
    place has that capability to manufacture that number of pits
    per atom--per annum, and the comparable number of secondaries
    in UPF at Y-12, if required. Overall, the capabilities support
    the stockpile as envisioned in the Nuclear Posture Review, the
    new START requirement. And the plan to continue to reduce the
    number of nuclear weapons----
        Senator Feinstein. To what?
        Dr. Cook. All together.
        Senator Feinstein. If you had these pits, how much would
    you reduce the stockpile by? I mean, this is important.
        Mr. D'Agostino. Yes, it is very important. We have a report
    called the Stockpile Stewardship Management Report. There is a
    section in it that is classified which goes system by system,
    and it talks about taking--there are two numbers there. One is
    obviously bigger than the other one. I would say just quick
    math off the top of my head, there is about, if you will, once
    the capability is in place, maybe a 40 percent reduction in the
    size of the stockpile.
        Senator Feinstein. I do not want you to do it off the top
    of your head as much as I think you are terrific.
        Mr. D'Agostino. Yes.
        Senator Feinstein. This is a big thing for me.
        Mr. D'Agostino. Sure.
        Senator Feinstein. I mean, it is one of the reasons why I
    am sitting right here--why I run for this office, because I
    want my grandchildren and their children to grow up in a
    nuclear-free world. I am going to do everything I can to be
    helpful to get there. So, this is not something that I am just
    going to fluff off and forget about.
        Mr. D'Agostino. Madam Chairman, I would say we have the
    details that we would like to share with you in the report that
    we provided, and we will go over that in great detail with you,
    with our Defense Department colleagues to show about the types
    of changes that we are--that we collectively are planning on
    making in our proposal, if you will, which this budget is a
    part of. It is--budget----
        Senator Feinstein. Because the way you have always sold
    your program to me is that if we do this, we can reduce the
    stockpile by more.
        Mr. D'Agostino. Yes, ma'am, that is the case.
        Senator Feinstein. You gave me some numbers before, but I
    did not think they were very sufficient. So, I want to know
    with this proposal and all this money you are getting, by how
    much will the nuclear stockpile be reduced?
        Mr. D'Agostino. We will be glad to go over that with you
    precisely by--with actual numbers and warheads.
        Senator Feinstein. Okay. Thank you.
        Senator Alexander.
        Senator Alexander. I have three questions, and they do not
    necessarily require long answers. But I would like to ask all
    three questions----
        Senator Feinstein. Go ahead.
        Senator Alexander. Mr. Administrator, I am a little puzzled
    by your single-mindedness on consolidating the contracts that--
    at Y-12 and Pantex. I mean, they do not have overlapping
    missions. They both seem to be operating efficiently right now.
    You have got all these big projects to supervise and try to do
    as efficiently as possible. GAO has been studying the
    consolidation proposal, and a preliminary report suggests it is
    not a great opportunity for savings.
        Would it not be better to defer any decision about
    consolidation until we get the GAO report in July, and instead
    focus more of your time on working with the existing contractor
    to find savings and on other big projects where you might find
    savings?
        Mr. D'Agostino. Senator Alexander, we are committed to
    working with the existing contractor, and have worked with the
    existing contractor to identify savings, and have gotten--
    received some input from the existing contractor, who is doing
    a very good job.
        We have been looking at ways to make sure that we run our
    enterprise in the most efficient and integrated fashion as
    possible. One of our views is that we are looking to have an
    enterprise, if you will, not eight independent sites make
    maximizing their capability at their sites. And, in fact, I
    have studied this for about 3 years. We did not just study it
    ourselves. We asked an external consultant known as Navigant
    Consulting, to take a look at what opportunities there are
    specifically at each of these sites, and what could the Federal
    Government realize from the standpoint of efficiency
    improvements, couched in dollar terms, of course, but our goal,
    of course, is to drive those resources into mission critical
    work and have the workforce realigned from that standpoint.
        So, we have done a study ourselves. We, in fact--we
    commissioned a completely independent study, which showed many
    hundreds of millions of dollars per year as an opportunity over
    the next 10 years that could be saved--many hundreds of
    millions of dollars.
        I have not seen the GAO study. I recognize that there was a
    press report I think that just came out recently. But what I
    will say is--and I am anxious to see it frankly because it is
    important for us, and this is why we are proceeding
    methodically to make sure we get input from the contractor
    community before we make a final decision. A decision will rest
    essentially with the--the Secretary and I will go through and
    we are going to conduct our external checks to make sure that
    things are done in an appropriate manner.
        This is probably, you know, one of the more important
    decisions we will be making this year, and I am committed to
    making sure that we have all the data. If the GAO has uncovered
    new information, I want to make sure that gets factored into
    our analysis and the like.
        I do believe in discussions that are very sensitive to the
    particular point on disruption of potential contract
    competition might have on very important work that is ongoing.
    And we have looked ahead at when we expect to be at the 90
    percent design points and what it will take to independently
    check those. And, as Dr. Cook mentioned, the end of next year
    is roughly a period of time that--where that comes to play. And
    it is clear we probably would not want to have any changes
    prior to that point because as--because of the disruption
    piece.
        But we have managed contract changes in the past, and we
    know it can be done in a way that does not impact the workforce
    and does not disrupt, more importantly, the workflow that
    happens there as well.
        Dr. Cook, if you have any other insights on this.
        Dr. Cook. I would just say we are paying particular
    attention to making sure that we are not doing anything to
    destabilize the UPF team or any of the M&O teams. They continue
    to do very high-quality work.
        With regard to the cost savings, it is not our objective to
    reduce the employment levels. It absolutely is our objective to
    increase productivity, not just through consolidation if
    appropriate of contracts, but the linking of the deliverables
    through all that we do. And we are studying that fairly
    intensely as you might normally expect.
        Senator Alexander. Thank you. The new mixed oxide fuel that
    will be produced at Savannah River--do you have any concerns
    about its safety if it is used in Tennessee Valley Authority
    reactors? And should it be less expensive fuel for the
    reactors, thus saving the Tennessee Valley Authority (TVA) rate
    payers money?
        Mr. D'Agostino. I will start, and then I will ask Dr.
    Harrington to follow.
        We have done, and there have been done a number of studies
    with respect to mixed oxide fuel. It is the material--fuel
    material that has been around for a while and has been in many
    tens of reactors worldwide and operating for more than 20
    years. So, I think the safety aspect of this is well
    established.
        We, of course, will continue to study this with potential
    buyers at TVA, for example, to make sure that they have
    complete and full access to any information they need to make
    sure that they are confident in that.
        Senator Alexander. My question simply is, is it safe to use
    it, and will it be cheaper----
        Mr. D'Agostino. Yes.
        Senator Alexander [continuing]. To use it?
        Senator Alexander. The answer is, yes, it is safe to use.
        Ms. Harrington. Yes, it is. And I think on the question of
    cost, obviously this is a nonproliferation program; it is not a
    commercial fuel program, so there is that difference. And the
    cost will be no more than and perhaps less than other
    commercially available fuel.
        Senator Alexander. Thank you. Madam Chairman, I have one
    other question, but I will defer to you for----
        Senator Feinstein. No, please. I think I have satisfied my
    questions, and I am going to follow up on the items of interest
    to me.
        Senator Alexander. I have got an idea you were going to do
    that.
        But my question is simply for the Admiral, and it goes back
    to what I said. The Navy operates small reactors, and it has
    about the same number of small reactors that we have civilian
    reactors around the country, all of which are large. In the
    civilian area, we speculate--I know Dr. Chu has talked about
    this--that a small reactor might be a useful way for the United
    States to move ahead with nuclear power, maybe 125, 150
    megawatt reactors. What can the Navy's experience with small
    reactors teach us about how we might move ahead in the civilian
    side with small reactors?
        Admiral Donald. Yes, Sir. Thank you for the opportunity to
    be here today.
        Senator Feinstein. Could you qualify small reactors?
        Senator Alexander. Well, a small reactor--a typical one
    like the new one, Watts Bar reactor being built at--by TVA is
    1,180 megawatts. A small reactor, such as the one that B&W
    proposes to build would be about 125 megawatts. And 125
    megawatts, Dr. Chu has talked about a small reactor of that
    size would be a lot cheaper to build, and it would be about
    enough power to operate the entire Oak Ridge complex, for
    example. The city, the laboratory, and the Y-12 facility might
    all operate with that one small reactor. The argument for it is
    it could be made in the United States, shipped to Oak Ridge or
    Alaska, wherever they want to use them. And if they needed two,
    they could put two side by side or three side by side. That is
    the argument for it.
        But with the Navy having all this experience since the
    1950s, so successful with small reactors, I wonder--if we are
    taking advantage of your experience or if this is one silo over
    here and this is another over here.
        Admiral Donald. Well, Sir, I think you really have to go
    back to the very beginning of the commercial nuclear power
    program. Where it started was with naval reactors. Amarico, we
    are building the shipping port plant in Pennsylvania. Really
    that design stemmed from what he had learned from building the
    Nautilus and subsequent submarine plants and the technology--
    basic pressurized water reactor technology, which is one of the
    options for small modular reactors. That really was founded in
    the Naval Reactors Program and has been developed through the
    Naval Reactors Program with collaboration in commercial
    industry either directly or indirectly. We have had engagement
    with commercial industry over our history in design work and
    things of that sort. Indirectly there are a significant number
    of employees working in commercial nuclear who started in the
    Navy nuclear program. So, many of the standards and
    technologies and things that they learned in our program, they
    have transitioned into the commercial sector.
        With specific focus on the small modular reactors that are
    being discussed today, in fact Babcock and Wilcox, B&W, who
    is--has one of the options for a small modular reactor in
    power, I believe it is called, it just so happens that they
    also are one of our major suppliers, and they do much of our
    work. In fact, about 70 percent of our industrial base is
    really B&W type work that is done. So, there is some leveraging
    there of lessons that they have taken from building our plants,
    obviously with protecting our security, our classified
    information, but translating that into what could be a viable
    small modular reactor. So, I think that is a good synergy there
    if that is to be made to happen.
        I think there are those who--some have considered should we
    just transition naval reactors directly into small modular
    reactors, and the fact of that is that is probably not a good
    idea. Because of the standards that we build them to, we have
    to have shock standards that are significantly above what a
    commercial reactor would have to operate at.
        Our operating profile is very different from a commercial
    plant, so we design them for different ends, and they actually
    would likely not be cost effective for a commercial
    application. But again, the application and the synergy between
    the industrial base in the commercial world and the industrial
    base in the naval world I think provides opportunity for them
    to learn from what we have learned and provide opportunities in
    small modular reactors, if the commercial industry sees them as
    being feasible.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Alexander. Thank you, Madam. Thank you, Admiral.
    Thank you, Madam Chairman.
        [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 Dianne Feinstein

        Question. The National Ignition Facility (NIF) was supposed to
    demonstrate ignition by September 2010. However, the goal of achieving
    ignition has been postponed by more than 1\1/2\ years because of
    unexpected scientific and technical challenges.
        How confident are you that the NIF will achieve ignition by June
    2012? If this goal is not achieved by then, what does it mean for the
    future of the ignition program?
        Answer. Pending any unforeseen major technical challenges, I am
    confident in NIF's ability to achieve ignition by fiscal year 2012. NIF
    is currently operating on a schedule where as by the end of fiscal year
    2011, all of the experiments and capabilities required for the NIF to
    begin ignition experiments will be complete, and the goal is to
    demonstrate ignition, or ``gain equal to one'', by fiscal year 2012.
    ``Gain equals one'' means the capsule will produce more energy than the
    amount of energy delivered to the target, also called the hohlraum.
        An National Nuclear Security Administration (NNSA) panel chaired by
    the Under Secretary for Science, Dr. Steve Koonin, has been formed to
    advise on technical progress, and the most recent review showed that
    the National Ignition Campaign (NIC) is making excellent technical
    progress. The principal focus is to ensure that a rapid, yet
    reasonable, amount of progress is being made on completing the
    scheduled ignition efforts. The NNSA's major concern is to ensure that
    further delays do not occur, except as a result of presently unknown
    technical issues that might have to be resolved. Ignition is a major
    technical challenge and the present NIF work is a culmination of
    decades of research. Should any unforeseen major technical issues arise
    that could potentially impact the goal of achieving ignition by fiscal
    year 2012, NNSA will re-evaluate and adjust the goals of the NIC
    accordingly.
        Question. NNSA owns 43 million square feet of physical
    infrastructure.
        What plans does NNSA have in place to reduce the footprint of the
    labs and production facilities and reduce maintenance costs?
        Answer. NNSA is continuing its footprint reduction efforts within
    available funding. The fiscal year 2012 Stockpile Stewardship and
    Management Plan conveys NNSA's strategy to consolidate and modernize
    the Nuclear Security Enterprise.
        NNSA has actively been working to comply with the Energy and Water
    Development Subcommittee fiscal year 2002 conference report 107-258 for
    reduction of footprint. For the period 2002 through 2009 NNSA
    constructed 1,447,865 gross square footage and eliminated 3,700,620
    gross square feet of facility footprint. The net result of these
    efforts is elimination of approximately 2,252,755 gross square feet of
    the NNSA footprint. NNSA will continue working to meet this requirement
    by reducing excess facilities as funds allow and by using footprint
    reductions to ensure the offset requirement is met.
        Question. NNSA has been criticized over the last several years for
    failing to maintain an adequate surveillance program, which is
    essential for determining the health of the nuclear weapons stockpile.
        To what extent has NNSA improved its surveillance program and
    addressed the concerns of the JASONs, lab directors, and the Department
    of Defense (DOD).
        Answer. Surveillance activities are essential to enabling continued
    certification of the reliability of the stockpile without nuclear
    testing. Surveillance involves withdrawing weapons from deployment and
    subjecting them to laboratory tests, as well as joint flight tests with
    the DOD to assess their reliability. These activities allow detection
    of possible manufacturing and design defects as well as material
    degradation over time. NNSA continues to implement a surveillance
    program that builds on those core activities, which allows us to
    support the current state of the stockpile, detect in advance potential
    problems, and take remedial actions.
        NNSA has reviewed the stockpile surveillance program and its
    funding profile. Since fiscal year 2009, the surveillance budget has
    increased by 50 percent, from $158 million to $239 million. In the
    fiscal year 2012 budget, the President seeks to sustain this increase
    and a more robust surveillance program throughout the fiscal year NSP.
        With this increased funding, many improvements have been made on
    surveillance. NNSA increased the number of planned laboratory and
    flight tests from 48 in fiscal year 2010 to 74 in fiscal year 2011. The
    total number of planned major surveillance activities (including pit,
    canned subassembly, gas transfer systems, detonator cable assembly
    tests and disassembly and inspection) also increased from 276 in fiscal
    year 2010 to 432 in fiscal year 2011. In addition, surveillance
    activities supported the development of diagnostic capabilities at Y-12
    for critical components of the nuclear explosive package. These
    capabilities will aid the current W76-1 production and surveillance of
    other warheads in the stockpile. This increased testing rate and
    improved diagnostics continue to be supported in the fiscal year 2012
    budget request. Furthermore, NNSA has taken action to hire a
    Surveillance Senior Technical Advisor, supported by an appropriate
    staff through a newly developed Surveillance Governance structure to
    assure a cohesive program, enables a cost-effective program, and
    integrates surveillance activities across the nuclear weapons
    enterprise. Together, the increased funding, additional focus, and
    hiring of a senior surveillance engineer should address the concerns
    expressed by the JASONs, laboratory directors, and DOD.
        Question. The JASONs found that most plutonium pits in nuclear
    weapons have a lifetime of at least 100 years. However, NNSA is
    planning to manufacture new plutonium pits for weapons undergoing life
    extensions.
        Why does NNSA have plans to manufacture new pits? What are the
    advantages and disadvantages?
        Answer. The Nuclear Posture Review (NPR) found that in order to
    sustain a safe, secure, and effective U.S. nuclear stockpile, for as
    long as nuclear weapons exist, the United States must possess a modern
    physical infrastructure and a highly capable workforce with the
    specialized skills needed to sustain the deterrent and support the
    President's nuclear security agenda.
        In 2006, the Los Alamos National Laboratory and Lawrence Livermore
    National Laboratory reported that the majority of pits in the stockpile
    can have estimated ``lifetimes'' in excess of 85 years or more based on
    the best estimates of plutonium changes with aging. All nuclear weapons
    generally and primaries specifically have other components with much
    shorter shelf lives that have to be maintained or replaced on a more
    frequent basis. Finally, as recognized by the JASONs and NNSA, the
    science of plutonium aging is not complete. The uncertainties in these
    estimates are large and contain significant variables which may affect
    plutonium and pit lifetime that are not yet fully understood. As the
    weapons age, they must be maintained in order to assure their
    reliability and extend their lives. Throughout this maintenance or life
    extension process, NNSA is directed by National Security Presidential
    Directive 28 to look for opportunities to enhance the safety and
    security aspects of the weapon (while still meeting the military
    requirements originally established for the weapon). One of the ways to
    enhance both safety and security is to move toward a stockpile that is
    based on insensitive high explosives (IHE) instead of conventional high
    explosives (CHE). IHE-based weapons are safer in almost every
    environment across the Stockpile-to-Target Sequence. Should NNSA
    receive authorization to proceed toward a totally IHE-based stockpile,
    we will need the ability to either manufacture these previously
    designed and tested pits or perform rework on existing pits.
        The current facility that NNSA manages for producing plutonium pits
    requires modernization to continue maintaining a ``safe, secure, and
    effective'' stockpile in the future. The manufacturing capacity will
    need to be increased to meet the anticipated requirement of 50-80 pits
    per year by 2022. The aging infrastructure is being addressed through
    TA-55 reinvestment. Additional programmatic investments will be
    required to develop and sustain the workforce required to execute the
    program at TA-55 in the coming years. What we are doing now is an
    effort to create a sustainable plutonium pit manufacturing capacity at
    the PF-4 facility that will be able to support the body of work
    addressed in the fiscal year 2012 Stockpile Stewardship and Management
    Plan. Moreover, the PF-4 facility is an important component of the
    administration's effort to provide a sustainable Nuclear Security
    Enterprise. Such a facility is one of the enablers for the United
    States to shift away from retaining large numbers of nondeployed
    warheads as a hedge against technical failure or geopolitical surprise.
        The pit manufacturing capability being pursued for PF-4 will
    provide NNSA the ability to produce a limited number of new pits, up to
    80 per year, or to perform rework on existing pits--this does not mean
    that each year we will exercise the full capacity of the facility. PF-4
    will provide NNSA with the minimum capacity to support the President's
    plan to life extend the stockpile. Per the NPR, each life extension
    program will be conducted on a case-by-case basis and we will study
    options for ensuring the safety, security, and reliability of each
    nuclear warhead. Our scientists, engineers, and technicians will study
    the full range of life extension approaches, to include refurbishment
    of existing warheads, reuse of nuclear components from different
    warheads, and replacement of nuclear components. In any decision to
    proceed to engineering and development, strong preference will be given
    to the refurbishment and reuse approaches. However, we may not be able
    to meet some critical Stockpile Stewardship and Management Plan goals,
    such as increased safety, security, and reliability, using those two
    approaches. In such cases, replacement of nuclear components will be
    pursued, but only when specifically authorized by the President and
    approved by the Congress.
        Possessing the ability to manufacture plutonium pits provides many
    advantages to the Nation and to NNSA. We are able to exercise and
    retain the highly skilled workforce of scientists, engineers, and
    technicians central to a responsive manufacturing capability. Further,
    we retain the agility necessary to respond to technical or geopolitical
    issues in a timely manner, allowing us to retain a smaller hedge. The
    pit manufacturing and rework capability presents opportunities to take
    advantage of safety and security advancements to make the stockpile
    safe, secure, and reliable.

                                FOUR-YEAR EFFORT

        Question. April 2011 was the half way mark of the goal of securing
    all vulnerable nuclear materials in 4 years.
        Is NNSA still on track to achieve this goal in 4 years?
        Answer. NNSA is currently on track to complete the objectives
    outlined in its 4-year effort. NNSA's progress to secure and eliminate
    nuclear material is described in more detail in the classified ``Report
    to Congress on Securing Vulnerable Nuclear Material'' submitted jointly
    in April 2011 by NNSA and DOD. Although the focused 4-year effort ends
    in 2013, nuclear security is an enduring responsibility as long as any
    material exists, and NNSA programs will continue to be guided by the
    evolving threat environment.
        NNSA plays a major role in the international effort to secure the
    most vulnerable nuclear material around the world in 4 years, working
    in coordination with DOD, the Department of State, the Nuclear
    Regulatory Commission (NRC), other elements of the U.S. Government, and
    international partners. NNSA programs have made significant progress
    toward achieving key programmatic goals for securing and eliminating
    weapons-usable nuclear material. NNSA's accomplishments include the
    following:
      --Removed approximately 3,085 kilograms of weapons-usable highly
            enriched uranium (HEU) and plutonium from countries around the
            world, including 960 kilograms--enough material for 38 nuclear
            weapons--since April 2009.
      --Completed security upgrades at 32 buildings containing weapons-
            usable material in Russia and initiated new insider threat
            upgrades at 15 facilities in Russia since April 2009.
      --Completed shipments of spent fuel from Kazakhstan's BN-350
            plutonium production reactor to a secure facility in eastern
            Kazakhstan in 2010. The spent fuel contains enough HEU and
            weapons-grade plutonium for 775 nuclear weapons.
      --Advanced efforts to establish Centers of Excellence (COE) for
            nuclear security with China, India, Japan and the Republic of
            Korea, working in coordination with DOD, NRC, and Department of
            State. The COEs will provide national, regional, and
            international training and workshops on nuclear security best
            practices; demonstration of available and effective nuclear
            security technologies; nuclear security research and
            development; legal and regulatory frameworks; and bilateral
            and/or regional nuclear security initiatives.
        Question. What specifically does NNSA hope to achieve at the end of
    those 4 years?
        Answer. NNSA has a number of programmatic goals in support of the
    broader international 4-year effort, including the following:
      --Complete the removal of approximately 3,615 kilograms of weapons-
            usable nuclear material cumulatively from sites around the
            world by the end of 2013.
      --Complete Material Protection Control and Accounting (MPC&A)
            upgrades at a cumulative total of 229 buildings with Category I
            nuclear material by the end of fiscal year 2013. However,
            security upgrades at additional buildings after 2013 may be
            needed, as U.S. programs are guided by the evolving threat
            environment.
      --Continue working with DOD, NRC, and the State Department to support
            the establishment of Centers of Excellence for nuclear security
            with key international partners.
      --Contribute to key global initiatives, including the Nuclear
            Security Summit in 2012, the Global Initiative to Combat
            Nuclear Terrorism, the implementation of United Nations
            Security Council Resolution 1540, and the G-8 Global
            Partnership.
      --Lead efforts to implement the fifth revision of the nuclear
            security recommendations document INFCIRC/225, ``The Physical
            Protection of Nuclear Material and Nuclear Facilities'', which
            will ensure strengthened physical protection of nuclear
            material and facilities worldwide.
        Question. How does NNSA prioritize to determine which nuclear
    materials in which countries are the most vulnerable and need to be
    secured first?
        Answer. NNSA prioritizes its efforts to secure and eliminate
    vulnerable nuclear material based on a number of factors, including
    nuclear material attractiveness (amount and form of the material), the
    existing site security conditions, the assessed country threat
    environment, and political opportunity.
        Question. What are the most significant challenges in securing the
    highest-risk materials?
        Answer. NNSA works with other countries to minimize the civilian
    use of HEU, eliminate unneeded weapons-usable nuclear material, and
    improve security of nuclear material by providing equipment and
    training. In many cases, getting direct access to facilities to carry
    out such work can be a challenging process. Sometimes, direct access to
    facilities is not possible or appropriate, and NNSA works with other
    elements of the U.S. Government on alternative approaches to improve
    security of nuclear material such as regional centers of excellence for
    nuclear security and support for global initiatives.
        In addition, these NNSA programs are voluntary in nature, so each
    country must first agree that it would like to cooperate with NNSA on
    nonproliferation activities. In some isolated instances, a country has
    decided that it does not wish to participate. In these instances, NNSA
    looks to other organizations such as the International Atomic Energy
    Agency to help facilitate nonproliferation efforts in that country.

                             MATERIAL CONSOLIDATION

        Question. What is NNSA doing to consolidate nuclear materials to a
    much smaller and easier-to-protect number of sites and buildings,
    especially in Russia?
        Answer. Under the International Nuclear Materials Protection and
    Cooperation Program (INMP&C), NNSA is continuously promoting the
    benefits of nuclear material consolidation with its partner countries
    and especially within the Russian nuclear complex. In May 2010, INMP&C
    held a Nuclear Material Consolidation Best Practices workshop, with
    presenters from the NNSA complex and the Rosatom complex to exchange
    lessons learned regarding the consolidation of nuclear materials. The
    NNSA, through INMP&C, has also hosted Russian officials, including the
    head of Rosatom, Sergei Kiriyenko, to tour the Highly Enriched Uranium
    Materials Facility at Y-12 and discuss the cost savings that will be
    achieved by conducting this major consolidation effort.
        It is standard operating procedure to evaluate intra-site
    consolidation at every Russian site participating in INMP&C cooperation
    and to support such consolidation when the sides can identify and agree
    to an effective approach. INMP&C has supported the removal of all HEU
    from one Russian site and has significantly reduced the number of
    buildings requiring protection by supporting the consolidation of
    nuclear material within sites in Russia. Moreover, INMP&C is currently
    supporting a large intra-site consolidation activity at one Russian
    site, and such activities are under consideration with several other
    Russian sites. In addition, U.S. project teams from INMP&C look for
    opportunities to transfer excess, nonweapons HEU out of facilities,
    thereby decreasing the amount of material requiring protection.
        The excess HEU transferred from sites is usually downblended into
    low-enriched uranium (LEU) under INMP&C's Material Consolidation and
    Conversion (MCC) Project. To date, that project has supported the
    downblending of almost 14 metric tons of nonweapons HEU to LEU. On a
    cost-sharing basis with Russia, the MCC Project is also supporting the
    creation of additional downblending capacity at one Russian site in
    order to increase the amount of excess nuclear material that can be
    consolidated and then downblended into LEU. For this activity, Rosatom
    will fund the additional downblending line, and the MCC Project will
    support the associated security requirements. This additional capacity
    is expected to become operational at the end of calendar year 2012. In
    addition, the MCC Project continues to support the downblending of
    returned Russian-origin fuel that has been consolidated from the FSU
    and other countries. The MPC&A management is currently discussing with
    Rosatom the potential to include additional excess material under the
    MCC Project, which would remove significant quantities of such material
    from four sites.

                             TECHNOLOGICAL SURPRISE

        Question. A national security concern is always technological
    surprise. In particular, the United States needs the best information
    possible on the nuclear weapons activities of foreign countries.
        What has NNSA done to increase our capabilities to monitor the
    nuclear weapons capabilities of other countries, such as Iran?
        Answer. NNSA has a long-standing research and development (R&D)
    program focused on improving U.S. nuclear security through the
    development of novel technologies to detect foreign nuclear weapons
    proliferation/detonation and verification of foreign commitments to
    treaties and agreements.
        Using the unique facilities and scientific skills of the NNSA
    Nuclear Security Enterprise as well as other DOE National Laboratories,
    in partnership with industry and academia, the program sponsors R&D to
    support U.S. nuclear nonproliferation policies and programs by closing
    technology gaps identified through close interaction with NNSA and
    other U.S. Government agencies and programs.
        Specifically, NNSA provides technical expertise and leadership
    toward the development of next-generation nuclear detection
    technologies and methods to detect foreign nuclear materials and
    weapons production. Through the development of new tools, technologies,
    and techniques designed for the detection, location, and analysis of
    global proliferation of nuclear weapons technology with special
    emphasis on verification technology and transparency measures, NNSA
    provides the Nation--both unilaterally and multilaterally--with the
    technical means to monitor foreign nuclear weapons programs.
        Question. How confident are you that the United States has the
    means to detect a nuclear weapons test in another country?
        Answer. NNSA, and its predecessor agencies, have more than 50 years
    of history in developing the leading technologies used by the United
    States to monitor and verify foreign nuclear testing. Working
    intimately with the Department of Defense and other U.S. Government
    agencies, NNSA develops and builds all space-based nuclear detection
    equipment. This equipment, which continuously monitors the globe, is
    operated by the U.S. Air Force for the Nation.
        Further, NNSA develops other leading-edge technologies, such as
    seismic sensors and radionuclide and particle collection systems for
    the detection of a foreign nuclear test. Like the space-based sensors,
    these ground-based systems are operated by the U.S. Air Force.
        Where applicable, and in keeping with the President's nuclear
    security agenda, NNSA transfers some of these technologies to
    international nuclear monitoring organizations, such as the
    International Atomic Energy Agency and Comprehensive Test Ban Treaty
    Organization.
                                     ______

                   Questions Submitted by Senator Jon Tester

        Question. Administrator D'Agostino, it's my understanding that the
    National Nuclear Security Administration (NNSA) shares jurisdiction
    over fusion energy research with the Department of Energy's Office of
    Fusion Energy Sciences (OFES). In Montana, the Plasma Physics Group at
    the University of Montana is currently conducting research with an
    emphasis on magnetic fusion. The University of Montana Plasma Physics
    Group and other university programs are researching fusion energy in
    conjunction with many of our National Laboratories including the
    Princeton Plasma Physics Laboratory, the Lawrence Livermore National
    Lab and the National Ignition Facility (NIF). I, and many others, are
    eagerly awaiting the results of the NIF full ignition tests this year.
        In 1980, the Congress passed an authorization bill that envisioned
    a demonstration fusion power plant by the year 2000. That clearly did
    not happen. Today, China, South Korea, and many European nations are
    investing in and advancing fusion energy research, with the hopes of
    commercialization. Commercialization of fusion energy could assist our
    Nation in achieving energy independence, and would undoubtedly lead to
    job creation in whichever nation accomplishes it.
        What are the resources in fiscal year 2011 that NNSA is currently
    providing for the advancement of fusion energy?
        Answer. Thermonuclear fusion is pursued at the Department of Energy
    and NNSA for two important and different purposes. OFES, in the Office
    of Science, is pursuing fusion science for eventual energy
    applications.
        NNSA pursues Inertial Confinement Fusion (ICF) in support of
    Stockpile Stewardship. Thermonuclear fusion is the essential process of
    all U.S. nuclear weapons. Much of SSP inertial confinement fusion
    research can provide information relevant to inertial fusion energy, so
    it can be thought of as dual use. NNSA built and operates its large
    high-energy density facilities to support the stockpile. If successful,
    ignition on the NIF will demonstrate that ICF in the laboratory is
    feasible and, as a side-benefit, will be an important advance for
    fusion energy. Other areas of the ICF program may help develop the
    fundamental science of inertial fusion energy, including research on
    direct drive and pulsed power fusion.
        NNSA requested $481.5 million in fiscal year 2011 for the ICF
    Ignition and High Yield Campaign. The ICF fiscal year 2011 budget is
    $477.6 million. We have requested $476.3 million for fiscal year 2012.
        This year NIF is focusing on experimentally optimizing the laser
    and target conditions as part of the National Ignition Campaign (NIC)
    and has made significant progress. We expect to perform full ignition
    tests in the fiscal year 2012 to 2014 window. NIF is also focusing on
    material properties under extreme conditions and on finishing up work
    to validate codes devoted to the energy balance problem.
        Question. How much additional funding would NIF require for full
    commercialization within the current framework?
        Answer. When NIF achieves ignition, it will establish the
    scientific basis for inertial confinement fusion, but will not have the
    performance required for the energy mission. The NIF was not designed
    to be converted to a prototype commercial reactor. Significant
    technical development, independent economical studies, and licensing
    processes will be required beyond the demonstration of ignition on the
    NIF for inertial fusion energy. In addition, the demonstration of
    ignition at NIF does not guarantee that this would be commercially
    viable.
        This year NIF is focusing on experimentally optimizing the laser
    and target conditions as part of the National Ignition Campaign (NIC)
    and has made significant progress. We expect to perform full ignition
    tests in the fiscal year 2012 to 2014 window. NIF is also focusing on
    material properties under extreme conditions and on finishing up work
    to validate codes devoted to the energy balance problem.
        Several approaches to achieving thermonuclear fusion are being
    pursued. In NNSA, we are pursuing indirect drive for the first
    demonstration of ignition on the NIF and polar direct drive as an
    alternate approach led by the University of Rochester. The Naval
    Research Laboratory is engaged in direct drive research with an
    alternate laser driver using a Krypton Flouride laser, and pulsed power
    fusion research is conducted at Sandia National Laboratories. In the
    Office of Science, heavy ion fusion, fast ignition, and other
    approaches are being pursued.
        DOE has asked the National Academy of Sciences (NAS) to conduct a
    review on inertial fusion energy and to make recommendations on how
    best to pursue inertial fusion energy as a long-range energy option
    after the demonstration of NIF Ignition. NAS will assess the prospects
    for generating power using inertial confinement fusion, and will
    identify scientific and engineering challenges and cost targets. We
    look forward to receiving the panel's interim report, expected in
    September 2011.
        Question. What are NNSA's goals for fusion energy in fiscal year
    2012 and beyond?
        Answer. NNSA's goal for the National Ignition Campaign (NIC) is to
    demonstrate ignition on the NIF. In fiscal year 2012 and beyond, NNSA
    will work to improve ignition performance and develop advanced ignition
    concepts and platforms that further its Stockpile Stewardship mission.
    NNSA will continue to provide peer-reviewed access to it major
    facilities (NIF, Omega, and Z), which includes work in support of
    inertial fusion energy as well as basic science. The Department will
    review the report from NAS on ICF, and use the report's findings to
    inform our decision on how to proceed with a program in inertial fusion
    energy.
        This year NIF is focusing on experimentally optimizing the laser
    and target conditions as part of the NIC and has made significant
    progress. We expect to perform full ignition tests in the fiscal year
    2012 to 2014 window. NIF is also focusing on material properties under
    extreme conditions and on finishing up work to validate codes devoted
    to the energy balance problem.
        Question. Can you detail the collaboration between NNSA and OFES?
        Answer. The main mechanism for collaboration between the OFES and
    NNSA's Inertial Confinement Fusion (ICF) program is the Joint Program
    in High Energy Density Laboratory Plasmas. High-energy-density
    laboratory plasma physics is the study of matter at extremely high
    density and temperature; it is a broad and rapidly growing area of
    research that includes ICF, laboratory astrophysics, materials
    properties under extreme conditions, and warm dense matter. Through the
    joint program, OFES and the ICF programs conduct peer-reviewed
    solicitations for basic high-energy density research and organize
    scientific workshops. In fiscal year 2011, the joint program provided
    support for 50 research awards in more than 30 institutions.
        This year NIF is focusing on experimentally optimizing the laser
    and target conditions as part of the NIC and has made significant
    progress. We expect to perform full ignition tests in the fiscal year
    2012 to 2014 window. NIF is also focusing on material properties under
    extreme conditions and on finishing up work to validate codes devoted
    to the energy balance problem.
        Question. What is the current backlog of fusion energy related
    experiments and what can be done to advance them?
        Answer. In the near term, NNSA's ICF program will concentrate on
    achieving ignition in the NIF. This is an essential step for stockpile
    stewardship, and will also contribute to developing fusion energy.
    Achieving ignition will be a great technical accomplishment and will
    establish the scientific feasibility of inertial fusion energy. The
    development of inertial fusion energy is not part of NNSA's mission
    and, as such, no backlog of experiments exists.
        This year NIF is focusing on experimentally optimizing the laser
    and target conditions as part of the NIC and has made significant
    progress. We expect to perform full ignition tests in the fiscal year
    2012 to 2014 window. NIF is also focusing on material properties under
    extreme conditions and on finishing up work to validate codes devoted
    to the energy balance problem.
        Fusion energy has proven to be a daunting and elusive goal. In
    support of this goal, however, recently NAS' Committee on Inertial
    Fusion Energy (IFE) has been asked to:
      --Assess the prospects for generating power using inertial
            confinement fusion;
      --Identify scientific and engineering challenges, cost targets, and
            R&D objectives associated with developing an IFE demonstration
            plant; and
      --Advise DOE on its development of an R&D roadmap aimed at creating a
            conceptual design for an inertial fusion energy demonstration
            plant.
        The Department will evaluate the recommendations from the
    subcommittee before deciding how to proceed.
        Question. Where does our domestic fusion energy research stand in
    comparison to China, South Korea, and other nations?
        Answer. NNSA is the world leader in inertial confinement fusion
    research, which we primarily conduct to support Stockpile Stewardship.
    France and the United Kingdom also have strong programs in inertial
    confinement fusion to support their nuclear weapons stockpiles. France
    is building a NIF-scale laser facility named Laser Mega Joule (LMJ).
    The UK has built a smaller laser facility named Orion. The Japanese
    conduct research in inertial fusion for energy applications and have a
    modest-size laser named FIREX I. Germany conducts research in heavy ion
    fusion. The European Community has proposed the HiPER project to build
    an inertial fusion energy research program. China is active in high-
    energy density physics and is building a new large laser system at a
    Government laboratory. This laser will be smaller than NIF and is not
    likely to achieve ignition. A number of countries have modest z-pinch
    pulse power programs for fusion. We are not aware of any substantial
    ICF program in Korea. Many of the countries mentioned also have
    significant magnetic energy fusion programs, and the OFES could provide
    a detailed comparison for those technologies.
        This year NIF is focusing on experimentally optimizing the laser
    and target conditions as part of the NIC and has made significant
    progress. We expect to perform full ignition tests in the fiscal year
    2012 to 2014 window. NIF is also focusing on material properties under
    extreme conditions and on finishing up work to validate codes devoted
    to the energy balance problem.
                                     ______

                 Questions Submitted by Senator Lamar Alexander

                           EXPORT CONTROL REGULATIONS

        Question. National Nuclear Security Administration (NNSA) is
    responsible for implementation of export control regulations under 10
    CFR 810 which authorizes transfer of peaceful nuclear technology. The
    number of specific authorizations issued by Department of Energy under
    10 CFR 810 has roughly tripled over the past 5 years and industry has
    recently noted that the amount of time required for issuing these
    authorizations has increased significantly as well. These delays have a
    negative impact on the ability for U.S. firms to compete in the global
    nuclear marketplace currently estimated to exceed $50 billion per year.
        While industry has remarked on the professionalism and dedication
    of NNSA staff, is the agency sufficiently staffed to respond the
    increasing number inquiries and authorizations requested?
        Answer. Pursuant to section 57b of the Atomic Energy Act, the
    Secretary of Energy must authorize all U.S. persons who wish to engage
    directly or indirectly in the production of special nuclear material
    outside the United States, provided that the assistance is not inimical
    to the interests of the United States. The Secretary of Energy's
    authority is nondelegable. The implementing regulation for section 57b
    of 10 CFR part 810 also requires DOE to address eight specific
    questions to determine whether proposed assistance raises proliferation
    concerns. Besides the analysis of the eight specific questions in the
    regulation, the Department also requests via the State Department,
    foreign government assurances from the recipient's government that
    state that the assistance will be for peaceful, nonmilitary purposes,
    will not be retransferred without U.S. consent, and that the resulting
    nuclear material will be under IAEA safeguards. These assurances are
    consistent with the requirements of section 123 of the Atomic Energy
    Act and the nuclear suppliers group.
        Over the past few years, as the global nuclear industry has seen
    resurgence in business opportunities, the number of part 810
    applications has increased accordingly. In 2007, the Department
    authorized 1 specific authorization; in 2010, the Department authorized
    15. In addition to an increase in the number of applications, the
    complexity of the applications has also increased as nuclear commerce
    has become more globalized. Each specific authorization requires
    approval by the Secretary and must include an in-depth technical and
    policy analysis addressing the eight questions in the regulation.
    However, a vast amount of nuclear commerce that takes place with our
    close trading and nonproliferation partners takes place under general
    authorization provisions of 10 CFR part 810 and does not require the
    same intensive analysis by the Department's staff. The Department has
    recognized the increase in part 810-related activities by U.S. industry
    and has brought on qualified and experienced staff to help adjudicate
    these applications. The Department believes that it has the staff in
    place to address the 810 applications that it currently receives and
    has plans for streamlining its review processes to enable timelier
    responses to industry's applications.
        Question. If so, why are these delays increasing and what plan does
    DOE have in place to make the 810 process more efficient?
        Answer. One significant reason for the delays has been the lack of
    prompt government assurances from our foreign partners. Some of the
    assurances, especially from China and India, have taken more than 18
    months to obtain. Without these assurances the Secretary would have
    been unable to make the legally required noninimicality finding, and
    the United States would not have been acting in accordance with the
    nuclear suppliers group guidelines. We are working with the State
    Department and applicants at the beginning of the part 810 process to
    identify where potentially long delays may arise. We are also working
    to structure applications in such a way that will enable us to
    efficiently and effectively authorize the assistance within the bounds
    of U.S. law and policy. We have also instituted new policies, such as
    the ``deemed export'' process through which we have been able to find
    ways to satisfy the requirements of the Atomic Energy Act for companies
    that wish to employ foreign nationals in the United States, thus
    alleviating one class of applications, which we had been unable to
    process at all in the past.
        Question. If not, what process improvements does DOE plan to put in
    place to make the 810 process more efficient?
        Answer. The Department is also looking at how the nuclear industry
    does business in a globalized world and is reviewing potential
    amendments to the part 810 regulation to reflect today's realities. The
    part 810 regulation has remained essentially the same for more than 25
    years. It was designed and implemented at a time in the U.S. nuclear
    industry's history that is vastly different from how industry works
    today or will work in the future. We recognize that the part 810
    regulations need to be more user-friendly and consistent with current
    U.S. nonproliferation policies.

               NAVAL REACTORS FACILITY, IDAHO NATIONAL LABORATORY

        Question. The Naval Reactors Facility (NRF), located at the Idaho
    National Laboratory (INL), is responsible for fuels and materials
    research and development, and processing, analyzing, and storing
    reactor cores that are removed from aircraft carriers or submarines at
    refueling and decommissioning. NRF's location within the laboratory
    boundaries enables the Navy to utilize the laboratory's capabilities,
    such as the Advanced Test Reactor and the Idaho Nuclear Technology and
    Engineering Center to fulfill mission requirements.
        Please describe:
      --which non-NNSA facilities at INL are used by the Naval Reactors
            Program;
      --the type of work performed for the program at each facility, and
            whether it is performed by the Navy or others;
      --a comparison of the work at each facility performed by or for the
            Navy to the work performed by all other users in the aggregate,
            expressed as a percentage for each facility; and
      --whether each facility is essential to the mission of the program.
        Answer. Naval reactors uses the following facilities at INL:
    Advanced Test Reactor
        Naval reactors utilizes Advanced Test Reactor (ATR) for materials
    research and fuel system development. Naval Reactors Facility (NRF) at
    INL prepares ``test trains'' that contain materials destined for
    irradiation. The NRF ships those test trains to ATR. The ATR personnel
    receive the test trains, insert them into the reactor, operate the
    reactor, remove the test trains from the reactor, and ship the test
    trains back to NRF. The data generated at ATR is needed to support the
    operational fleet, support reactors currently being designed, and
    develop fuel and poison systems for future reactors. For example,
    testing currently underway to support the newly designed, reduced-cost
    VIRGINIA forward fit (VAFF) core procurement will provide data needed
    to develop operational limits, casualty procedures, refueling limits,
    and shipping requirements that ensure safe and efficient operation of
    our nuclear plants at sea.
        In fiscal year 2012, the Naval Nuclear Propulsion Program (NNPP)
    will provide $64 million to ATR, representing approximately 62 percent
    of ATR operations.
        ATR is essential to the NNPP mission.
    Idaho Nuclear Technology and Engineering Center
        Some naval spent nuclear fuel is currently stored at Idaho Nuclear
    Technology and Engineering Center (INTEC). The INTEC personnel are
    currently preparing that fuel for dry storage, loading it into uniquely
    designed baskets, loading those baskets into shipping containers, and
    shipping those containers back to NRF. INTEC is also preparing and
    shipping naval transuranic waste for disposal at the Waste Isolation
    Pilot Plant. The INTEC facility is needed to support NNPP commitments
    to the State of Idaho in the 1995 Settlement Agreement and the 2008
    Settlement Addendum. Failure to meet these commitments will potentially
    prevent NNPP from receiving fuel at NRF, which would prevent NNPP from
    refueling and defueling nuclear powered warships.
        In fiscal year 2012, NNPP will provide $22.3 million of INTEC
    funding, which represents approximately 21 percent of INTEC operations.
        INTEC is essential to the NNPP mission.
    Radioactive Waste Management Complex
        NNPP disposes of remote-handled low-level radioactive waste (RH-
    LLW) at Radioactive Waste Management Complex (RWMC). Operations at NRF
    will continue to produce these wastes indefinitely. NNPP generates
    approximately one-half of the RH-LLW that is disposed at RWMC. RWMC,
    and the planned replacement, are essential to the NNPP mission. The
    RWMC is the only cost-effective disposal path for this waste. Without a
    disposal path, waste will collect within the ECF water pool and
    eventually preclude spent-fuel processing operations. Spent-fuel
    processing is essential to unload shipping containers that support
    refueling and defueling nuclear warships and meeting NNPP commitments
    to the State of Idaho in the 1995 Settlement Agreement and the 2008
    Settlement Addendum. If RWMC suspended operations, Naval Reactors would
    be forced to dispose of low-level radioactive waste off-site, at a
    significantly higher cost.
        NNPP will contribute to the construction costs for a planned
    replacement facility.
        The work done at RWMC and the work that will be done at RMWC's
    replacement is essential to NNPP mission.
    Materials and Fuels Complex
        NNPP occasionally contracts examination of expended core and ATR
    test specimens to Materials and Fuels Complex (MFC) when detailed
    analytical chemistry services are required to obtain the needed data.
    These examinations require use of the MFC hot cell facilities and
    analytical chemistry laboratories. These examinations are essential to
    the NNPP mission. There are other analytical chemistry laboratories
    (e.g., ORNL) that could perform these examinations; however, shipment
    costs would be significantly higher. NNPP plans to ship specimens to
    MFC for analytical chemistry evaluations in 2015. In the future, the
    NNPP plans to make use of MFC capabilities (currently in development)
    to perform focused ion beam machining, transmission electron
    microscopy, and atom probe evaluations of irradiated material. Using
    MFC capabilities eliminates the need for NNPP to develop these
    capabilities at NRF or ship the materials for examination offsite.
        The percentage of MFC's work that supports naval work varies from
    year to year.
        The work done at MFC is essential to the NNPP mission.
        NNPP also subcontracts many site services (e.g., fire department
    and emergency services) to INL contractors that require use of various
    INL facilities. The total value of these services is $17 million in
    fiscal year 2011. In addition to this, in fiscal year 2011, NNPP
    initiated a permanent annual budget transfer of $1.5 million for
    security and safeguards at INL. These services are essential to support
    operations at NRF. If INL were not able to provide these services, the
    NNPP would need to develop and fund these capabilities independently.
        Question. Please describe the effect that suspending operations at
    the facilities described in question one would have on NRF and the
    Navy's ability to perform mission work.
        Answer. Suspending operations at each of the facilities would have
    the following impacts:
          Advanced Test Reactor.--If ATR suspended operations, Naval
            reactors would be unable to attain the information required to
            resolve problems as they arise in the operating fleet, unable
            to develop or improve future fuel systems and materials
            applications, and unable to develop the life-of-ship core
            required for the Ohio Replacement SSBN.
          Idaho Nuclear Technology and Engineering Center.--If INTEC
            suspended operations, Naval reactors would be unable to meet
            the terms of its agreements with the State of Idaho, placing in
            jeopardy the ability to refuel and defuel nuclear powered
            warships.
          Radioactive Waste Management Complex.--If RWMC suspended
            operations, Naval reactors would be forced to dispose of low-
            level radioactive waste offsite, at a significantly higher
            cost.
          Materials and Fuels Complex.--If MFC suspended operations, Naval
            reactors would be forced to contract for equivalent
            examinations offsite at significantly higher costs.
        Question. Please describe in detail the amounts and sources (e.g.
    DOD or DOE) of funding the program contributes for the use of the
    facilities described in question 1, including any funding or transfers
    provided for INL's safeguards and security program.
        Answer.

                              [Dollars in millions]
    ------------------------------------------------------------------------
                                                               Fiscal year
                            Facility                           2012 funding
    ------------------------------------------------------------------------
    ATR....................................................         \1\ 64.0
    INTEC..................................................         \2\ 22.0
    RWMC...................................................          \1\ 0.8
    MFC....................................................  ...............
    Site services (e.g. mail, EMS, fire)...................         \3\ 17.0
    Safeguards and security................................          \4\ 1.5
    ------------------------------------------------------------------------
    \1\ DOE.
    \2\ Navy.
    \3\ DOE fiscal year 2011.
    \4\ Permanent annual budget transfer.

                         SMALL MODULAR REACTORS PROGRAM

        Question. The Navy has a unique expertise in designing, building,
    and maintaining modular reactors or use on their vessels, in addition
    to an impeccable safety record.
        Given this expertise, could you describe what role, if any, the
    Naval Reactors program will (or could) play in DOE's planned Small
    Modular Reactor program?
        Answer. Since 1955, the Naval Nuclear Propulsion Program (NNPP) has
    provided militarily effective nuclear propulsion plants and ensured
    their safe, reliable, and long-lived operation. NNPP's reactors are
    designed to meet requirements associated with their military-unique
    application, and are not suitable for commercial use. However, there
    are areas for cooperation and possible technology transfer between
    NNPP, other Government agencies, and industry. NNPP and the Office of
    Nuclear Energy will continue to seek opportunities to collaborate and
    share information with each other and other appropriate parties to the
    mutual benefit of all organizations.
        One example of interagency collaboration occurred in 2009 when NNPP
    supported the Nuclear Regulatory Commission's (NRC) ``Report on
    Internal Safety Culture''. The exchange provided NRC with potential
    initiatives to increase awareness of and improve the agency's internal
    safety culture and to identify best practices currently used across the
    nuclear industry. Specifically, NRC benchmarked NNPP to gather
    information about practices, programs, and processes that could be
    considered as best practices. As part of this process, NNPP offered
    valuable insights and perspective from its extensive knowledge and
    experience in this crucial area. Similar collaboration with the Small
    Modular Reactor program may be possible.
        As the Small Modular Reactor program moves forward, NNPP and the
    Office of Nuclear Energy will continue to seek areas to cooperate to
    the mutual benefit of each organization and taxpayers, while protecting
    sensitive military technology.
                                     ______

                 Question Submitted by Senator Mitch McConnell

                              URANIUM DOWNBLENDING

        Question. What is the most current estimate for the amount of down-
    blended uranium that NNSA plans to down blend in 2012? Are future
    years' estimates similar in size? What percent of the 10 percent cap
    does that consume?
        Answer. In fiscal year 2012, NNSA's contractors will down blend
    approximately 8 metric tons of highly enriched uranium (HEU). Because a
    majority of the resulting low-enriched uranium (LEU) will be retained
    in two LEU inventories, only the fraction of the material that will be
    used to compensate the down-blending contractors will enter the market
    in fiscal year 2012. The estimated net quantity of LEU that will enter
    the market is equivalent to 281 metric tons of natural uranium, or 1.4
    percent of domestic demand for natural uranium (14 percent of the 10
    percent guideline). Quantities comparable to those above are expected
    to prevail for the next couple of years.

                              SUBCOMMITTEE RECESS

        Senator Feinstein. Thank you very much. Mr. D'Agostino, Ms.
    Harrington, Dr. Cook, and Admiral Donald, thank you very much
    for your testimony today. I will be talking with you, Mr.
    D'Agostino. Thank you very much.
        This hearing is recessed.
        Mr. D'Agostino. Thank you.
        Dr. Cook. Thank you very much.
        [Whereupon, at 3:35 p.m., Wednesday, May 4, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2012

                                  ----------

                            WEDNESDAY, MAY 18, 2011

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

                              DEPARTMENT OF ENERGY

                            Office of the Secretary

    STATEMENT OF HON. STEVEN CHU, SECRETARY

                 OPENING STATEMENT OF SENATOR DIANNE FEINSTEIN

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

                  OPENING STATEMENT OF SENATOR LAMAR ALEXANDER

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

                        SUMMARY STATEMENT OF STEVEN CHU

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

                               PREPARED STATEMENT

        The United States faces a choice: Will we lead in
    innovation or will we fall behind? To lead the world in clean
    energy, we must act now, and we cannot afford not to.
        Thank you and I am pleased to now answer your questions.
        [The statement follows:]

                        Prepared Statement of Steven Chu

        Chairman Feinstein, Ranking Member Alexander, and members of the
    subcommittee, thank you for the opportunity to appear before you today
    to discuss the President's fiscal year 2012 budget request for the
    Department of Energy (DOE).
        In his State of the Union Address, President Obama laid out a plan
    for the United States to win the future by out-innovating, out-
    educating, and out-building the rest of the world, while at the same
    time addressing the deficit. The President's budget request invests in
    much-needed programs while cutting back where we can afford to.
        Many countries are moving aggressively to develop and deploy the
    clean-energy technologies that the world will demand in the coming
    years and decades. As the President said, this is our generation's
    ``Sputnik moment''.
        We must rev up the great American innovation machine to win the
    clean-energy race and secure our future prosperity. To that end,
    President Obama has called for increased investments in clean-energy
    research, development, and deployment. In addition, he has proposed a
    bold, but achievable goal of generating 80 percent of America's
    electricity from clean sources by 2035.
        A clean-energy standard will provide a clear, long-term signal to
    industry to bring capital off the sidelines and into the clean-energy
    sector. It will grow the domestic market for clean sources of energy--
    creating jobs, driving innovation, and enhancing national security. And
    by drawing on a wide range of energy sources including renewables,
    nuclear, clean coal and natural gas, it will give utilities the
    flexibility they need to meet our clean-energy goal while protecting
    consumers in every region of the country.
        DOE's fiscal year 2012 budget request of $29.5 billion supports
    these goals and strengthens the Nation's economy and security by
    investing in the following priorities:
      --Supporting groundbreaking basic science, research, and innovation
            to solve our energy challenges and ensure that the United
            States remains at the forefront of science and technology;
      --Leading in the development and deployment of clean and efficient
            energy technologies to reduce our dependence on oil, accelerate
            the transition to a clean-energy economy, and promote economic
            competitiveness; and
      --Strengthening national security by reducing nuclear dangers,
            maintaining a safe, secure and effective nuclear deterrent, and
            cleaning up our cold war nuclear legacy.
        While we are investing in areas that are critical to our future, we
    are also rooting out programs that aren't needed and making hard
    choices to tighten our belt. Additionally, we are improving our
    management and operations so we function more efficiently and
    effectively.

                   LEADING IN THE GLOBAL CLEAN-ENERGY ECONOMY

        As the President said in his State of the Union Address, investing
    in clean-energy will strengthen our security, protect our planet, and
    create countless new jobs here at home. DOE's budget request invests
    $3.2 billion in energy efficiency and renewable energy programs.
        Through programs to make homes and buildings more energy efficient,
    including a new ``Better Buildings Initiative'' to make commercial
    buildings 20 percent more efficient over the next decade, we will save
    money for families and businesses by saving energy. That is money that
    can be re-invested back into the economy. In addition, the budget
    supports the research, development, and deployment (RD&D) of renewable
    sources of energy like wind, solar, and geothermal. It supports the
    modernization of the electric grid and the advancement of carbon
    capture and sequestration technologies. And it helps reduce our
    dependence on oil by developing the next generation of biofuels and
    accelerating electric vehicle research and deployment to support the
    President's goal of putting 1 million electric vehicles on the road by
    2015. This includes a $200 million competitive program to encourage
    communities to invest in electric vehicle infrastructure.
        We're also focused on moving clean-energy technologies from the lab
    to the marketplace. Over the past 2 years, DOE's loan programs have
    supported more than $30 billion in loans, loan guarantees, and
    conditional commitments to guarantee loans for 28 clean-energy and
    enhanced automotive fuel efficiency projects across the country, which
    the companies estimate will create or save more than 61,000 jobs.
    Building on this success, we are requesting new credit subsidy that
    will support approximately $1 to $2 billion in loan guarantees for
    innovative renewable energy and energy efficiency technologies. These
    deployment efforts build on the substantial investment made in the
    clean-energy sector by the American Recovery and Reinvestment Act
    (ARRA), and are supplemented by tax incentives that have also played an
    important role in bringing clean-energy projects to market, such as the
    48C manufacturing tax credits and the 1603 cash grants in lieu of
    investment tax credits, which the 2012 budget also expands. We are also
    requesting $100 million in credit subsidy for a new ``Better Buildings
    Pilot Loan Guarantee Initiative for Universities, Schools, and
    Hospitals'', which will guarantee up to $2 billion in loans to support
    energy efficient retrofits.
        Nuclear energy also has an important role to play in our energy
    portfolio. To jumpstart the domestic nuclear industry, the budget
    requests up to $36 billion in loan guarantee authority. It also invests
    in the research and development (R&D) of advanced nuclear technologies,
    including small modular reactors (SMR).

                       SUPPORTING GROUNDBREAKING SCIENCE

        To spur innovation, the President's budget request invests in basic
    and applied research and keeps us on the path to doubling funding for
    key science agencies, including DOE's Office of Science. As Norm
    Augustine, former chairman of Lockheed Martin and former Under
    Secretary of the Army, has said, underfunding R&D in a time of
    austerity is like removing the engine of an aircraft to reduce its
    weight.
        That is why the budget request increases support for DOE's
    comprehensive research strategy to accelerate energy breakthroughs.
        Through $5.4 billion for the Office of Science, we're expanding our
    investment in basic energy sciences, advanced scientific computing, and
    biological and environmental sciences--all key areas for our future
    economic competitiveness.
        The budget invests $550 million in the Advanced Research Projects
    Agency-Energy, (ARPA-E). The administration also seeks an additional
    $100 million for ARPA-E from the Wireless Innovation Fund to support
    wireless clean-energy technologies. This investment will allow ARPA-E
    to continue the promising early stage research projects that aim to
    deliver game-changing clean-energy technologies. ARPA-E's projects are
    generating excitement both in DOE and in the private sector. For
    example, through a combined total of $24 million from ARPA-E, six
    companies have been able to advance their research efforts and show the
    potential viability of their cutting-edge technologies. This extremely
    valuable early support enabled those companies to achieve R&D
    milestones that, in turn, have attracted more than $100 million in
    private sector funds to the projects. This is precisely the innovation
    leverage that is needed to win the future.
        Another key piece of our research effort is the Energy Innovation
    Hubs. Through the Hubs, we are bringing together our Nation's top
    scientists and engineers to achieve similar game-changing energy goals,
    but where a concentrated effort over a longer time horizon is needed to
    establish innovation leadership. DOE has established three Energy
    Innovation Hubs in the areas of energy efficient buildings, modeling,
    and simulation for nuclear reactors, and fuels from sunlight. The
    budget requests $146 million to support the three existing Hubs and to
    establish three new Hubs in the areas of batteries and energy storage,
    smart grid technologies and systems, and critical materials. The Energy
    Innovation Hubs were modeled after DOE's BioEnergy Institutes, which
    have established an outstanding 3-year track record.
        Finally, the budget continues to support the Energy Frontier
    Research Centers (EFRCs), which are mostly university-led teams working
    to solve specific scientific problems that are blocking clean-energy
    development.
        The Energy Innovation Hubs, ARPA-E, and EFRCs represent three
    complementary approaches to advance groundbreaking discovery. When you
    think of the EFRCs, think about a collaborative team of scientists such
    as Watson and Crick unlocking the secrets of DNA. When you think of
    ARPA-E, think about visionary risk-takers launching new technologies
    and start-up companies out of their garages. When you think of the
    Hubs, think of large, mission-oriented research efforts such as the
    Manhattan Project, the development of radar at MIT's Radiation
    Laboratory during World War II and the research in America's great
    industrial laboratories in their heyday.
        We don't know where the big energy breakthroughs are going to come
    from. To reach our energy goals, we must take a portfolio approach to
    R&D: pursuing several research strategies that have proven to be
    successful in the past. But I want to be clear--this is not a ``kitchen
    sink'' approach. This work is being coordinated and prioritized, with a
    360-degree view of how these pieces fit together. Taken together, these
    initiatives will help America lead in science and technology
    innovation.

                          NUCLEAR SAFETY AND SECURITY

        In addition to strengthening our economy, the budget request also
    strengthens our security by providing $11.8 billion for DOE's National
    Nuclear Security Administration (NNSA). The 5-year fiscal year 2012 to
    fiscal year 2016 request of nearly $65 billion for NNSA reflects the
    President's nuclear security priorities, as well as his commitment to
    modernize the U.S. nuclear weapons enterprise and sustain a strong
    nuclear deterrent for the duration of the New Strategic Arms Reduction
    Treaty (New START) and beyond.
        The request of $7.6 billion for weapons activities provides a
    strong basis for transitioning to a smaller yet still safe, secure and
    effective nuclear stockpile without additional nuclear testing. It also
    provides much-needed resources to strengthen science, technology, and
    engineering capabilities and to modernize the physical infrastructure
    of our nuclear security enterprise.
        The President has identified the danger of terrorists getting their
    hands on nuclear weapons or the material to build them as the greatest
    threat to global security. To support the President's goal of securing
    all vulnerable nuclear material around the world in 4 years, the budget
    invests $2.5 billion in the NNSA Defense Nuclear Nonproliferation
    program. This is part of a 5-year, $14.2 billion commitment for the
    program.
        The budget also requests $1.2 billion to support the Navy's nuclear
    powered submarines and aircraft carriers. And it provides $6.1 billion
    to protect public health and safety by cleaning up the Nation's cold
    war nuclear legacy.

                             FISCAL RESPONSIBILITY

        Through our investments, we are laying the groundwork for the
    Nation's future prosperity and security. At the same time, we are
    mindful of our responsibility to the taxpayer.
        We are cutting back in multiple areas, including eliminating
    unnecessary fossil fuel subsidies, reducing funding for the fossil
    energy program and reducing funding for the hydrogen technology
    program. We're streamlining operations to reduce administrative costs.
    And we're making some painful cuts, including ending operation of the
    Tevatron accelerator and freezing salaries and bonuses for hard-working
    National Laboratory, site and facility management contractor employees.
        Finally, we continue to make progress on a management excellence
    agenda to improve our operations.

               HIGHLIGHTS OF THE FISCAL YEAR 2012 BUDGET REQUEST

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

                                   CONCLUSION

        The United States faces a choice today: will we lead in innovation
    and out-compete the rest of the world or will we fall behind? To lead
    the world in clean energy, we must act now. We can't afford not to.
        Thank you, and now I am pleased to answer any questions you may
    have.

                             HYDROGEN TECHNOLOGIES

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

                       SOLAR TECHNOLOGY PRICES/SUBSIDIES

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

                       ENRICHED URANIUM TAILS AT PADUCAH

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

                               GLOBAL ENERGY RACE

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

                        ENVIRONMENTAL IMPACT OF FRACKING

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

                         ENERGY RESEARCH AND SUBSIDIES

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

                       NUCLEAR ENERGY AND ENERGY SECURITY

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

                          STRATEGIC PETROLEUM RESERVE

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

                          YUCCA MOUNTAIN/NUCLEAR WASTE

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

        DEEP UNDERGROUND SCIENCE AND ENGINEERING LABORATORY AT HOMESTAKE

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

                           HIGH-PRIORITY EXPERIMENTS

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

                            MISSISSIPPI RIVER LEVEL

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

              LOAN GUARANTEES FOR ADVANCED TECHNOLOGY AUTOMOBILES

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

                                    FRACKING

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

                      DEEPWATER OFFSHORE WIND TECHNOLOGIES

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

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

                               GEOTHERMAL FUNDING

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

                                 YUCCA MOUNTAIN

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

         OFFICE OF ENVIRONMENTAL MANAGEMENT BUDGET AND NUCLEAR CLEANUP

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

                           SPENT NUCLEAR FUEL STORAGE

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

                    LOAN GUARANTEE PROGRAM/CREDIT SUBSIDIES

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

                             SMALL MODULAR REACTORS

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

                     NUCLEAR FUEL RODS AND DRY CAST STORAGE

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

                         ADDITIONAL COMMITTEE QUESTIONS

        At this time I would like to ask the subcommittee members
    to submit any additional questions they have for the Secretary.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                  Questions Submitted by Senator Patty Murray

                            ENVIRONMENTAL MANAGEMENT

        Question. Mr. Secretary, in your oral testimony you mentioned the
    need to find ways to do business better when referring to Environmental
    Management. I've been pleased to hear about site wide management for
    infrastructure and support services at Hanford.
        Please tell me how this new approach is working and whether it
    would be beneficial at other sites across the Department of Energy
    (DOE) complex.
        Answer. The Department's purpose for the creating a Mission Support
    Contract (MSC) was three-fold:
      --to make it possible for multiple contractors (which is why the MSC
            concept is particularly well-suited for the Hanford site) to
            focus on performing their different short- and long-term
            environmental clean-up mission;
      --to create a scalable infrastructure that can shed excess capacity
            and its associated costs over time as the clean-up mission
            progresses; and
      --to provide efficient and effective delivery of infrastructure and
            site services in support of the clean-up mission.
        DOE developed an aggressive and comprehensive Performance
    Measurement Evaluation Plan (PEMP) that assigns all award fee to
    specific strategic outcomes of the contract. To date, MSC at Hanford is
    achieving the three objectives established for this acquisition. Since
    the start of the contract period in August 2009, the MSC has increased
    service responsiveness to the clean-up mission by implementing
    benchmarked service standards and a broad range of service performance
    measures that obtain feedback from the clean-up contracts regarding
    costs, effectiveness, and quality of services provided. Thus far in the
    contract period of performance, the MSC has greatly increased the
    scalability of the IT infrastructure and leads the DOE complex in
    innovation and efficiencies in this area. Currently, the MSC is
    increasing capacity where required to support the operation of the
    Waste Treatment Plant. Award fee was assigned to the development of an
    Infrastructure Services Alignment Plan to provide a comprehensive plan
    developed in cooperation with other Hanford Site contractors for the
    realignment of the existing infrastructure to meet the future needs of
    the clean-up mission.
        It was anticipated early in the development of the acquisition
    strategy that this approach, if successful, would be a strong candidate
    for implementation at other Environmental Management (EM) sites.
        The primary assumption that a mission support contract would enable
    more focus on the part of the site contractors tasked with the clean-up
    mission (since time of award in 2009) has been proven valid and it is
    felt that with the experience gained, the Department is in a prime
    position to leverage this strategy across the EM complex.
        Question. Secretary Chu, obviously both you and I would like the
    fiscal year 2012 budget request of $6.1 billion to advance through the
    appropriations process to ensure that the Department can meet its legal
    commitments.
        However, in the event that the Congress does not enact an Energy
    and Water Development appropriations bill by September 30, can you
    please tell me how the Department would determine interim funding
    levels for the EM program?
        Answer. We are hopeful that the Congress will complete work on the
    2012 appropriations bill by September 30, 2011, and do not want to
    speculate about hypothetical future scenarios.
        Question. If the Department uses the fiscal year 2011 final year-
    long continuing resolution as a base number going into fiscal year
    2012, what will the impacts be at each site in the EM complex in terms
    of work scope, regulatory compliance milestones, and jobs?
        Answer. We are still analyzing the effects of the 2011 funding
    levels and do not want to speculate about hypothetical future
    scenarios.

                             LOAN GUARANTEE PROGRAM

        Question. Secretary Chu, I appreciate your leadership in getting
    the Loan Guarantee program up and running and commend you on efforts
    made thus far, including 28 conditional commitments for loan
    guarantees.
        I understand that last week, the Loan Programs Office sent letters
    to all pending section 1705 loan guarantee applicants, indicating that
    DOE was either putting projects ``on hold'' or moving them through the
    section 1705 process.
        I know that most of these companies have spent significant amounts
    of both time and money to prepare their applications and to comply with
    due diligence requirements, and I am very concerned that a large number
    of companies who have already spent a lot of money are facing a very
    uncertain path forward.
        Can you please tell me how many applicants were in each category--
    ``moving forward'' versus ``on hold''?
        Answer. The Department notified 17 applicants that their
    applications were moving forward and notified 42 applicants that their
    applications are on hold.
        Question. Of the applicants that were moved forward, did the
    Department include any companies, including affiliate companies, with
    more than one application pending in the section 1705 program?
        Answer. The projects we support are large and complex, and each one
    involves multiple parties, including developers, sponsors, EPC
    contractors, equity participants, advisors, and--in Financial
    Institution Partnership Program transactions--other lenders. Sometimes,
    on a given project, the same entity (or its affiliates) may play more
    than one of these roles. There are entities that are involved, in some
    capacity, in more than one of the projects that were moved forward
    under 1705.
        Question. If so, how many of those companies or their affiliates
    have one or more applications pending? How many applications for each
    of those companies are moving forward?
        Answer. As discussed above, given the many roles that exist in the
    context of each project, it is difficult to provide a precise number in
    response to this question.
        Question. Have any of the companies in the ``moving forward''
    category already been approved for a loan guarantee under the section
    1705 program?
        Answer. There are entities involved in the ``moving forward''
    category that are also involved in other projects that have already
    been approved for a loan guarantee under the section 1705 program.
        Question. What are the specific criteria the Department used to
    determine which letter--again, moving forward or ``on hold''--an
    applicant received?
        Answer. The Department based its decision on an application's
    readiness to proceed. Specifically, we identified those projects most
    likely to be in a position to reach financial close and commence
    construction by the 1705 program's congressionally mandated September
    30, 2011 expiration date. These projects received ``moving forward''
    letters. All other 1705-eligible projects in our pipeline received the
    ``on hold'' letter. It was important to notify these companies that we
    do not expect them to receive a loan guarantee under the 1705 program
    as soon as possible, so that they could avoid spending further time and
    resources unnecessarily.
        Question. What is the likelihood that one of the remaining section
    1705 applicants is not able to meet the program's equity requirements?
        Answer. As is always the case, there can be no guarantee that any
    given project will ultimately receive a conditional commitment or, if
    it does, that it will meet all conditions precedent to financial close
    in a timely manner. That said, DOE's decision to move forward with
    certain projects was based on our analysis of the project's ability to
    meet our programmatic requirements by the September 30, 2011 sunset
    date.
        Question. If such a situation occurs, what is the Department's plan
    to ensure those funds are made available to otherwise qualified
    applicants whose applications were put on hold?
        Answer. DOE determined that the projects placed on hold were
    unlikely to reach financial closing by the program's September 30, 2011
    expiration date.
        Question. How will the Department determine those pending
    applications (that have been put on hold in the section 1705 program)
    which will be eligible to access the $170 million in credit subsidies
    appropriated in the fiscal year 2011 year-long continuing resolution
    under the section 1703 program?
        Answer. We are currently working to develop a process for
    implementing this new provision.
        Question. What is the Department's plan to quickly and efficiently
    move those section 1705 applicants to the section 1703 pool?
        Answer. Pursuant to the fiscal year 2011 continuing resolution,
    some of the projects with active 1705 applications (including those put
    on hold) are eligible for the section 1703 program (most of these
    projects would have been eligible for 1703 in any event, provided they
    satisfy certain restrictions in the applicable budget authority).
    Projects eligible for 1703 will not need to submit a new application to
    be considered for a guarantee under that program.
        Question. Will this information be made available to the Congress
    and the applicants?
        Answer. The Department will continue to ensure that applicants and
    the Congress are appropriately informed of programmatic developments.
        Question. How many companies are currently in the application pool
    for the section 1703 program?
        Answer. DOE currently has approximately 20 active applications from
    projects that are eligible for the 1703 program, but not the 1705
    program.
        Question. How will the transfer of eligible applications from the
    section 1705 program affect the current section 1703 program?
        Answer. There will be significant competition among qualified
    applicants for the appropriated funds under 1703.
        Question. What criteria will the Department use to determine how
    the $170 million in credit subsidies will be distributed among the new
    pool of section 1703 applicants?
        Answer. We are currently working to develop a methodology for
    implementing the programmatic changes and appropriations included in
    the fiscal year 2011 continuing resolution.
        Question. What is the Department's commitment to the Loan Guarantee
    program for renewable energy projects going forward?
        Answer. The Department is committed to the Loan Guarantee program
    which aims to accelerate the domestic commercial deployment of
    innovative and advanced clean-energy technologies at scale. Under the
    1705 program, DOE has issued loan guarantees for 28 projects
    representing more than $16 billion in loan guarantees for projects that
    will create more than 16,000 direct jobs.

                              WATER POWER PROGRAM

        Question. Secretary Chu, I like what you have said about hydropower
    being an ``incredible opportunity'', our ``lowest cost, clean energy
    option'' and your comments about adding this resource to our clean-
    energy portfolio. And as you know, marine and hydrokinetic power is a
    promising source of renewable energy.
        Despite your positive comments, you are yet again proposing to cut
    the Water Power program, as you have every year. In fact, it is only 1
    of 2 programs to be cut in Energy Efficiency and Renewable Energy
    (EERE), which received an increase of $1.4 billion more than fiscal
    year 2011 enacted levels. I do understand that we are facing tough
    budget times, but I fail to understand the logic behind your cut of 20
    percent to the Water Power program when you have increased the budget
    for wind, solar and geothermal.
        Why isn't the Water Power program more of a priority for the
    Department?
        Answer. The Department remains optimistic about the opportunities
    to further develop the full range of water power technologies,
    including emerging marine and hydrokinetic (MHK) energy technologies.
    Given the current state of MHK development, we believe that the $38.5
    million requested for water power research in fiscal year 2012 is
    sufficient to continue the program's ongoing efforts to advance these
    water power technologies and accelerate their greater market adoption.
    We are currently completing a comprehensive set of resource
    assessments, and undertaking detailed techno-economic assessments of
    emerging technologies, which will help us to effectively determine the
    opportunities and costs associated with these technologies. These
    important analyses will help the Department determine what funding
    levels are necessary and appropriate to realize water power's
    potential.
        Regarding hydropower--as you know, hydropower accounts for about 7
    percent of our Nation's total electricity generation. And you and I
    have both applauded a recent National Hydropower Association study
    showing the potential to double existing hydro capacity and create 1.4
    million jobs. There's a lot going on in hydro--from low-impact hydro to
    small projects to increasing efficiency and output at existing
    projects. And while hydro is a more mature technology than some others,
    developing technology innovations is still important. As you know, we
    continuously work to develop innovations in other resources--from
    automobiles to other renewable energy resources like wind--and I
    believe we should be doing so with hydro as well.
        Question. Would you agree that doubling our hydro capacity is
    doable, and necessary? What is your plan to make this happen?
        Answer. DOE agrees that substantial increases in hydropower
    capacity, including pumped storage, from a baseline of about 100 GW in
    2009 are feasible by 2050. New hydropower development is possible
    across several different resource types, including:
      --capacity upgrades and efficiency improvements at existing
            hydropower facilities;
      --adding power plants at existing, nonpowered dams;
      --installing new hydropower power capacity on constructed waterways;
            and
      --new environmentally sustainable hydropower at natural streams.
        As most of the traditional concerns over environmental impacts
    typically associated with hydropower generation can be effectively
    mitigated through technology improvements and sustainable development
    practices, these opportunities present a low-cost, renewable energy
    resource that can help meet the administration's clean-energy economy
    goals.
        The Department has a multi-pronged approach to assist industry in
    increasing hydropower capacity. We are currently completing a set of
    resource assessments, undertaking detailed techno-economic assessments
    of existing hydropower plants, and engaging in research, development,
    and deployment of emerging technologies. The Department announced a
    Conventional Hydropower Funding Opportunity in 2011 that will help spur
    the development of conventional hydropower including pumped storage
    hydropower. Current Department-funded projects such as the Hydropower
    Advancement Project and water use optimization project will help the
    hydropower industry implement best practices to increase power
    production and assess their plants for capacity and efficiency
    upgrades. The Department has also funded an innovative ``fish-
    friendly'' turbine project, a turbine design that allows fish to safely
    pass through the hydropower turbine. This will allow industry to
    install hydropower units at locations where water is otherwise spilled
    to allow for fish passage.
        Question. Regarding ocean and tidal energy, I believe you are aware
    that my home State of Washington has made a strategic decision to be an
    international leader in the commercialization of the emerging ocean
    renewable energy industry. As you know, the United States has
    significant ocean, marine, and tidal energy resources. Development of
    the technologies to capture these ocean energy resources can play a
    significant role in our Nation's economic recovery and expand our
    renewable energy portfolio.
        I strongly support the efforts underway in Washington and am proud
    of the work being done in my State to capture the jobs that will be
    created by the design, construction, and deployment of wave energy
    converters. For example, the University of Washington and Snohomish
    Public Utility District are working hard to support this new domestic
    clean electricity generation industry that has the potential to provide
    up to 10 percent of our Nation's power needs.
        Unfortunately, the United States is falling behind in the race to
    capture the rich energy potential of our oceans, and the jobs that will
    come with this new industry. Many countries, particularly in Europe,
    have already deployed viable, operating, electricity generating
    projects using the emission-free power of ocean waves, currents, and
    tidal forces. The Ocean Renewable Energy Coalition calculates that more
    than $370 million US has been spent by the UK Government on wave energy
    research and development (R&D) over the past several years. That total
    approaches $500 to $600 million US over the same period if you add in
    commitments to ocean energy R&D from France, Portugal, Spain, Norway,
    and Denmark.
        Given this competitive situation, I am particularly disappointed
    with the fiscal year 2012 budget request for the Water Power program
        While the Congress has provided increased funding for the Water
    Power program, I'm disappointed that the Department hasn't been more
    aggressive in its efforts to help commercialize this technology. We
    need the enthusiastic support of you and your senior leadership team to
    help speed the deployment of ocean energy technologies and secure U.S.
    leadership in this emerging clean-energy industry.
        What is your plan to stop the United States from losing these jobs
    to Europe?
        Answer. DOE's Water Power program is building a comprehensive
    understanding of emerging MHK technologies and facilitating innovation
    and technology development that leverages previous advancements,
    including those made in Europe. In order to promote the development of
    a competitive MHK industry in the United States, DOE's Water Power
    program is supporting the establishment of three national test centers.
    These centers are planning to build open-water testing infrastructure,
    which will allow the developers of MHK devices to efficiently test in a
    realistic marine environment.
        DOE's Water Power program is also developing state-of-the-art
    technology design tools that simulate the behavior and performance of
    MHK devices in complex marine environments (covering tidal/ocean
    current and wave resources). These models will identify key cost-of-
    electricity drivers, facilitate rapid design optimization, and support
    detailed techno-economic assessment of MHK technologies as is required
    per congressional direction. Ultimately, the analytical results
    provided by these design tools will guide the Department's future
    investment decisions by identifying not only technology leaders but
    also the best opportunities to make these technologies cost competitive
    with other energy portfolio options.
        The program recently funded three full-scale MHK demonstration
    projects, including a $10 million grant to the Snohomish Public Utility
    District tidal energy project. In funding these advanced projects, the
    program seeks to demonstrate successful MHK operation and testing in
    U.S. waters and drive the development of future projects.
        Finally, the program is strategically working to remove barriers to
    deployment by engaging in research that answers questions regarding the
    potential environmental impacts of MHK technologies and by developing
    technologies to monitor and mitigate these potential impacts.
    Collectively, these efforts are strategically aimed at advancing a
    domestic MHK industry that can contribute to our Nation's clean-energy
    future.
        Given the early stage of MHK development, the Department is taking
    a very deliberate and comprehensive approach to our investments in MHK
    technologies. Future investments (Federal and private sector) will spur
    economic development only if the technologies can be proven to be
    competitive in the market place. Our efforts to spur such economic
    development are focused therefore on proving marketplace
    competitiveness of the technologies, and ultimately supporting the
    development of a competitive U.S.-based MHK industry that will create
    green jobs in the United States.
        Question. I am concerned that your budget request does not support
    development of a testing infrastructure in the United States, something
    that is vital to ensure this industry can move forward. For example,
    Europe currently has several wave and tidal energy test facilities,
    including its main facility in Scotland. We clearly have a need for
    this infrastructure here in the United States, and I know that the
    Northwest National Marine Renewable Energy Center (NMREC) has a strong
    desire to compete for funding to establish a testing center in the
    Pacific Northwest.
        Can you please comment on why your budget request does not support
    development of such testing infrastructure and can you tell me your
    plan to build it?
        Answer. The development of an MHK technology testing infrastructure
    in the United States is considered vital to helping ensure that the
    industry can continue to progress toward commercialization. To advance
    the MHK industry, the Department continues to invest in, and support,
    three NMRECs. The Northwest NMREC, the Hawaii NMREC, and the Southeast
    NMREC are important partners in the ongoing development of a viable MHK
    industry in the United States.
        The Department is currently undertaking quantitative assessments of
    the energy that can be extracted from wave, tidal and ocean current,
    and ocean thermal energy resources, and is preparing a comprehensive
    techno-economic assessment of MHK technologies and resources. This
    information will serve to identify the potential contribution that MHK
    resources can provide to our Nation's energy mix, and will also point
    to promising technologies that merit further investment. This
    information will inform the Department's future investment decisions,
    including testing facilities.

                      HYDROGEN AND FUEL CELL TECHNOLOGIES

        Question. I understand that the primary goal of the DOE Fuel Cell
    Technologies program is to advance fuel cells, including those that
    provide backup power, to be competitive in the marketplace. The market
    transformation program has been successful in meeting this goal by
    introducing fuel cells to larger markets and competing effectively in
    terms of life-cycle costs, performance, durability, reliability, and
    significantly reduced greenhouse gas emissions.
        Given the program's success, why does your budget request zero out
    the market transformation program, right when it's gaining traction?
        Answer. The Department's strategy is to sustain a balanced R&D
    portfolio, with an emphasis on nearer-term priorities, such as
    batteries, advanced vehicle technologies, and technologies for
    renewable power and energy efficiency. Fuel cell electric vehicles
    (FCEVs) are still part of the portfolio of options under development.
    In fact, DOE's increased funding for battery R&D will also be
    beneficial for FCEVs which rely on batteries in addition to fuel cells.
        The Department will continue its critical efforts in hydrogen and
    fuel cell R&D, which have already reduced the cost of fuel cells by
    more than 30 percent since 2008 and 80 percent since 2002.\1\ In fact,
    DOE's hydrogen and fuel cell program has been extremely successful,
    resulting in approximately 200 patents, 30 products being put on the
    market, and industry currently pursuing development of more than 50
    emerging technologies.\2\ The fiscal year 2012 budget sustains DOE's
    core R&D efforts which will continue to advance the technologies and
    improve the likelihood of a successful rollout by automobile
    manufacturers in the coming years.
    ---------------------------------------------------------------------------
        \1\ http://hydrogen.energy.gov/pdfs/10004_fuel_cell_cost.pdf.
        \2\ http://www1.eere.energy.gov/hydrogenandfuelcells/pdfs/
    pathways.pdf.
    ---------------------------------------------------------------------------
                        SOLAR ENERGY TECHNOLOGY PROGRAM

        Question. Secretary Chu, your fiscal year 2012 budget request for
    the Solar Energy Technology program represents an increase of nearly 50
    percent more than the fiscal year 2011 budget request, and an increase
    of 87 percent more than the fiscal year 2010 enacted level. However,
    your budget request includes only $50 million for the Concentrated
    Solar Power (CSP) program, and as I understand it, you are proposing an
    approximately 8 to 1 ratio of funding in favor of Photovoltaics (PV)
    over CSP.
        Given that the United States still co-leads both technologically
    and commercially in the CSP field, do you believe that the Department
    should maintain a more balanced funding ratio between PV and CSP?
        Answer. The administration's 2011 budget request for CSP included
    $50 million for a Solar Demonstration Zone which would help validate
    cutting-edge CSP and other concentrating solar technologies. This was
    in addition to a base CSP R&D program of approximately $50 million. The
    administration did not seek additional funding for the Solar
    Demonstration Zone project in 2012 as it is unlikely that these funds
    could be fully utilized in 2012 if funds were also provided through the
    2011 budget. The request for base CSP R&D for 2012 is consistent with
    the request in 2011. As part of the 2012 budget request, the
    administration also announced its SunShot initiative which seeks to
    reduce the cost of electricity from solar technologies by 75 percent by
    the end of the decade to be competitive with conventional generation
    sources of electricity without subsidy. The administration believes
    this is an ambitious but achievable goal. For 2012, the
    administration's funding request for the SunShot initiative has been
    largely designated through the Photovoltaic Research and Development
    subprogram. We believe, however, that CSP technologies also have the
    potential to reach the SunShot Initiative goals and are assessing this
    potential as part of our future portfolio balance.

       ADVANCED CABLE AND CONDUCTORS PROGRAM (FORMERLY HIGH TEMPERATURE
                            SUPERCONDUCTING PROGRAM)

        Question. Mr. Secretary, your budget request proposes to zero out
    the High Temperature Superconducting program (recently renamed the
    Advanced Cable and Conductors program). I understand that your
    justification is that the program has met its technical milestones.
    However, as you may be aware, other countries--namely China, Japan, and
    Korea--are aggressively demonstrating and deploying high-temperature
    superconducting systems and the United States is not.
        Given this, I believe it doesn't make sense for the Department to
    eliminate this program prior to the demonstration and deployment of
    high-temperature superconducting (HTS) systems, including advanced
    cryogenic and cryocooler systems.
        Do you agree?
        Answer. HTS is an integral part of Smart Grid technologies that can
    provide for a more reliable, secured and efficient electricity delivery
    infrastructure. After investing more than $600 million over the past 20
    years, second-generation HTS wires in sufficient lengths with good
    performance can now be produced by U.S. manufacturers. These wires are
    beginning to be sold around the world, and are the primary components
    in many international demonstration projects.
        With the availability of these commercial wires, the Department's
    Office of Electricity Delivery and Energy Reliability (OE) believes
    that HTS wire research has reached a point that second-generation HTS
    wire technology can be successfully transitioned to the U.S.
    manufacturing base. While OE is winding down its involvement in HTS
    wire research, it continues to support several innovative HTS system
    demonstration projects funded through the American Recovery and
    Reinvestment Act. These power systems include a grid-scale HTS fault
    current limiter, HTS power cable, and HTS fault current limiting
    transformer.
        In addition, DOE's Advanced Research Projects Agency-Energy (ARPA-
    E) is supporting a project to develop an advanced HTS superconducting
    magnetic energy storage system that will store significantly more
    energy than current designs at a fraction of the cost. Moreover, I am
    aware of HTS system demonstration projects that are being performed by
    other agencies. For example, the Department of Homeland Security is
    investigating the feasibility of a HTS fault current limiting power
    cable that can enable connectivity between electrical substations to
    share power in case of emergencies. And at the Department of Defense,
    the Navy is developing innovative HTS applications and advanced
    cryogenic systems for military usage.
        To summarize, while OE is winding down its second-generation HTS
    wire research activities, DOE and other agencies are continuing to
    support the development and deployment of innovative HTS system
    applications. By studying the fundamental science of superconductivity,
    engaging in HTS systems development, and keeping up-to-date on
    worldwide progress in HTS wires and systems research, DOE will be in a
    position to take advantage of any significant HTS discovery and
    innovation.
        Question. If the United States eliminates programs that will
    encourage the demonstration and deployment of high-temperature
    superconducting technologies, I am seriously concerned that this will
    be another example of our Nation inventing and developing a promising
    advanced energy technology, only to lose commercial leadership to other
    countries, as happened with wind turbines and photovoltaic systems.
        Given your focus, and the President's focus, on innovation, can you
    please tell me your plan to ensure this situation does not happen with
    high-temperature superconducting technologies?
        Answer. Superconductivity is a crosscutting technology that can
    benefit energy applications in many fields of use. For the past 20
    years, the Department has focused its wires research and applications
    development activities in power delivery systems. With the Department's
    support, second-generation HTS wires manufactured in the United States
    are now available commercially and prototype HTS power systems have
    been demonstrated.
        To maintain U.S. leadership in superconductivity, however,
    fundamental understanding of HTS needs to be obtained and more novel
    superconductors need to be discovered. In addition, HTS applications
    other than power delivery systems should be developed to broaden the
    market and sustain the U.S. manufacturing base. Moreover, a more
    strategic approach to developing advanced HTS materials and conductors
    and means to integrate them into a nonsuperconducting Smart Grid
    infrastructure need to be established.
        In the area of basic superconductivity research, DOE's Office of
    Science Energy Frontier Research Center for Emergent Superconductivity
    is performing work to discover new superconductors. Furthermore, the
    Office of Science supports basic research on synthesis, advanced
    characterization, and theory to understand fundamental phenomena
    related to superconductivity. To broaden the HTS market, a number of
    DOE offices are considering the benefits of various applications
    ranging from light weight superconducting generator for offshore wind
    turbines to very high field superconducting magnet systems suitable for
    scientific and medical applications. Moreover, the fiscal year 2012
    request for the Office of Electricity Delivery and Energy Reliability
    includes a Smart Grid Technology and Systems Hub, which can leverage
    crosscutting technologies and capabilities developed under the
    superconductivity program to impact this and other energy applications.
        The Department believes that the United States will maintain its
    leadership position in superconductivity by fully implementing the plan
    to understand and discover novel superconductors, demonstrate
    innovative and diverse HTS applications to broaden the market base, and
    develop advanced materials and systems that will integrate seamlessly
    into a reliable, secured, and efficient Smart Grid infrastructure.

                          CLEAN RENEWABLE ENERGY BONDS

        Question. Secretary Chu, the fiscal year 2012 budget request
    proposes another 1-year extension of the 1603 Treasury grant program to
    incentivize renewable energy. As you know, 1603 only applies to private
    developers and utilities; it is not available to consumer-owned
    utilities like many of those in Washington State. The Clean Renewable
    Energy Bond (CREBs) program is available to those municipal and rural
    cooperative utilities to incentivize renewable resources.
        Given that increasing the CREBs bonding level would help the
    administration achieve its 80 percent clean-energy goal, would the
    administration support an increase in the CREBs program?
        Answer. The administration recognizes the instrumental role that
    CREBs have played in catalyzing investment in renewable energy by
    nontaxable entities as a complement to other incentives such as Federal
    tax credits. Raising the cap on CREBs is one among several policy
    measures that can encourage investment in renewable energy, which is
    consistent with administration policy objectives for a clean-energy
    economy.
                                     ______

                   Questions Submitted by Senator Tim Johnson

        Question. I appreciate the administration's commitment to the
    research and development necessary to advance renewable energy.
    Cellulosic biomass has a promising future for both transportation fuel
    and power production, and it is important that we understand how much
    biomass can be produced sustainably and economically for bioenergy. To
    this end, the Department of Energy (DOE) has supported the development
    of the Regional Feedstock Partnership, a collaborative effort of
    Federal agencies, national laboratories, and universities that is now
    into its third and fourth year of field work.
        The DOE budget justification suggests that the United States
    Department of Agriculture (USDA) will take a lead in sustainable
    feedstock production beginning in fiscal year 2012. That may be a
    reasonable approach; however, I have several questions regarding the
    impacts to the Regional Feedstock Partnership and ongoing research
    within DOE Office of Biomass programs.
        My understanding is that the development of the Regional Feedstock
    Partnership was reviewed and approved by the Office of Management and
    Budget. The program has enjoyed bipartisan support and has been
    included in the administration budget requests for the last several
    years. In fiscal year 2012, however, the administration proposed to
    greatly reduce the Sustainable Feedstocks funding account that supports
    the Partnership.
        Is the reason for reducing the Sustainable Feedstocks account due
    to the intent to shift the lead on biomass feedstocks to USDA?
        Answer. On February 3, 2010, The White House issued Growing
    America's Fuels: An Innovative Approach to Achieving the President's
    Biofuels Target.\3\ This document established lead agency
    responsibility for each biofuel area supply chain segment. USDA was
    identified as the lead for both Feedstock Development and Feedstock
    Production Systems, and was directed to coordinate with DOE to enhance
    the work being conducted by the Regional Feedstock Partnership. In an
    effort to help align feedstock activities with each agency's expertise
    and minimize redundant focus areas, the emphasis for DOE feedstock-
    related funding was shifted to focus primarily on feedstock logistics
    systems in the fiscal year 2012 budget request.
    ---------------------------------------------------------------------------
        \3\ Available at http://www.whitehouse.gov/sites/default/files/
    rss_viewer/growing_americas_ fuels.PDF.
    ---------------------------------------------------------------------------
        Question. From your point of view, has the DOE Regional Feedstock
    Partnership been a success?
        Answer. The DOE Regional Feedstock Partnership has successfully
    established more than 100 biomass energy crop field trials in 39 States
    through the work of more than 96 university, USDA Agricultural Research
    Service, and industry scientists. DOE considers the information
    collected from the field trials to date, as well as the extensive
    relationships that have been established under the Partnership, to be
    highly valuable to the Nation's biomass feedstock production efforts.
    The March 2011 progress report ``Regional Biomass Feedstock Partnership
    Executive Summary'' details other Partnership successes to date.\4\
    ---------------------------------------------------------------------------
        \4\ Progress report available at http://www.sungrant.org/NR/
    rdonlyres/F374DEB6-810C-4B05-9A21-2 6D6B0576E78/2834/
    ExecutiveSummary33111.pdf.
    ---------------------------------------------------------------------------
        Question. After funding the Partnership for several years, is it an
    effective use of taxpayer dollars to terminate the program just as the
    field research results are beginning to come in?
        Answer. DOE plans to support the Regional Feedstock Partnership
    through fiscal year 2013. It was the original intention of DOE to
    support the Regional Feedstock Partnership for at least 6 years (fiscal
    years 2008-2013) in recognition of the need for longer-term studies
    associated with perennial biomass energy crops. These systems often
    take multiple years to establish, and the full potential of their
    productivity, as well as potential environmental services provided by
    perennial systems, cannot always be realized within just a few years.
    Conversely, field trials for annual biomass energy crops and residues,
    such as energy sorghum or corn stover, have provided valuable data from
    the first year they were established.
        Question. Would it not make more sense to complete the program for
    at least the remaining 2 years of this OMB-approved process, in order
    to get the benefit of the work that has already been done rather than
    start over and duplicate these efforts through another Department?
        Answer. USDA has been designated lead agency under Growing
    America's Fuels: An Innovative Approach to Achieving the President's
    Biofuels Target for Feedstock Development and Feedstock Production
    Systems. The difficult aspects of establishing this type of research
    program have already been addressed, including:
      --development of a nationwide network of more than 90 scientists to
            participate in the Partnership;
      --development of comparable field management and data collection
            protocols for nine different biomass energy feedstocks across
            five different geographical regions; and
      --establishment of difficult and costly perennial energy-cropping
            systems.
        These successes will be leveraged by USDA as it takes the lead on
    feedstock development and production systems.
                                     ______

               Questions Submitted by Senator Frank R. Lautenberg

        Question. The United States leads the world in fuel cell patents.
    Fuel cells can help reduce our dependence on oil and air pollution
    while at the same time creating jobs. In New Jersey, companies like
    BASF employ hundreds in their fuel cell divisions. How will the
    reductions in funding for fuel cell technology in this budget affect
    our ability to win the clean-energy race?
        Answer. The Department's strategy is to sustain a balanced research
    and development (R&D) portfolio, with an emphasis on nearer-term
    priorities, such as batteries, advanced vehicle technologies, and
    technologies for renewable power and energy efficiency. Fuel cell
    electric vehicles (FCEVs) are still part of the portfolio of options
    under development. In fact, the Department of Energy's (DOE) increased
    funding for battery R&D will also be beneficial for FCEVs which rely on
    batteries in addition to fuel cells.
        The Department will continue its critical efforts in hydrogen and
    fuel cell R&D, which have already reduced the cost of fuel cells by
    more than 30 percent since 2008 and 80 percent since 2002.\5\ In fact,
    DOE's hydrogen and fuel cell program has been extremely successful,
    resulting in approximately 200 patents, 30 products being put on the
    market, and industry currently pursuing development of more than 50
    emerging technologies.\6\ The fiscal year 2012 budget sustains DOE's
    core R&D efforts which will continue to advance the technologies and
    improve the likelihood of a successful rollout by automobile
    manufacturers in the coming years.
    ---------------------------------------------------------------------------
        \5\ http://hydrogen.energy.gov/pdfs/10004_fuel_cell_cost.pdf.
        \6\ http://www1.eere.energy.gov/hydrogenandfuelcells/pdfs/
    pathways.pdf.
    ---------------------------------------------------------------------------
        Question. In response to high gas prices, some have suggested we
    need more offshore drilling with fewer safeguards. The Energy
    Information Administration found that opening all of the offshore areas
    in the lower 48 States would lower gas prices by just 3 cents per
    gallon--decades from now. How will the President's budget invest in
    real solutions to high gas prices?
        Answer. Even while committed to safe and responsible domestic oil
    and gas production, the administration has taken steps to improve
    efficiency across the entire transportation sector and to develop and
    expand alternative fuels, including advanced biofuels. Energy
    innovation will increase the potential for the replacement of
    petroleum. Therefore, the administration's budget provides increases
    for programs, such as the Advanced Research Projects Agency-Energy
    (ARPA-E), that support energy innovation. The budget helps advance the
    goal of 1 million electric vehicles on the road by 2015 including
    through a shift from the existing tax credit incentive to a rebate that
    would be available to consumers at the point of sale and a $588 million
    investment in research, development and deployment programs for
    advanced vehicle technologies. It also proposes $341 million for
    biofuels and biomass R&D within the Office of Energy Efficiency and
    Renewable Energy, including a new reverse auction to promote advanced
    biofuels across the country.
        Question. The Princeton Plasma Physics Laboratory in New Jersey
    carries out research that could lead to major innovations in energy
    technology and help make the United States a world leader in clean-
    energy technology. One area of research is developing energy from
    fusion. A breakthrough in fusion energy could be the solution to the
    world's energy problems by providing the planet with a safe, clean, and
    limitless supply of energy.
        I support a significant increase in funding for the Plasma Physics
    Lab. Would an increase in funding help accelerate progress toward game-
    changing clean-energy breakthroughs?
        Answer. DOE believes that the funding levels proposed for the
    Princeton Plasma Physics Laboratory are appropriate and in balance with
    other priorities within DOE and throughout the Federal Government.
                                     ______

                   Questions Submitted by Senator Tom Harkin

                                    BIOFUELS

        Question. Secretary Chu, as you know, biofuels are a remarkable
    success. They displace close to 10 percent of our gasoline demand.
    While we can and should also be promoting other oil displacement
    alternatives, such as electric vehicles, continued expansion of
    biofuels seems to be the best option we have for displacing another 10
    percent of our gasoline demand. The Congress recognized that in passing
    the renewable fuel standard (RFS) in the 2007 Energy bill.
        Biofuels also face a major marketplace problem. Most biofuel usage
    today is in the form of E10, a 10 percent blend of ethanol with
    gasoline. As we continue to expand the contribution from biofuels, we
    need to remember that a large share of that will continue to be in the
    form of ethanol. Thus, we need to be able to use higher ethanol blends.
    We need filling stations that offer higher blends, and we need vehicles
    that can use those higher blends.
        What is the Department of Energy (DOE) doing to promote the
    availability and use of higher blends of ethanol, beyond E10 and E15?
    What more could the Department do, and what support from the Congress
    would be most useful to that end?
        Answer. In addition to sponsoring the E15 and E20 test program,
    DOE's Office of Energy Efficiency and Renewable Energy (EERE) supports
    several activities to promote higher ethanol blend usage. Specifically,
    the Energy Policy Act of 1992 requires that Federal, State, and utility
    fleets acquire alternative fuel vehicles (AFV) annually at determined
    percentages. These vehicles largely include flex-fuel vehicles that are
    capable of operating on E85 fuel. EERE's Vehicle Technologies Program
    (VTP) and Federal Energy Management program manage and monitor AFV
    acquisitions and alternative fuel usage in those fleets. Additionally,
    VTP and the Biomass Program are sponsoring fuel dispensing research
    with Original Equipment Manufacturers and Underwriter's Laboratory to
    develop and list E15 dispenser retrofit kits that can be installed in
    retail stations throughout the country. Through the State Energy
    program and the Energy Efficiency and Conservation Block Grant program,
    EERE has encouraged recipients to use money for installing renewable
    energy infrastructure. Last, DOE is actively working with Federal
    agencies to install alternative fuel pumps at fueling stations, in
    accordance with Energy Independence and Security Act of 2007
    requirements. DOE also supports ongoing research to ensure that fuel
    dispensed by blender pumps meets American Society for Testing and
    Materials (ASTM) specifications.
        Question. One program that could help expand markets for higher
    ethanol blends is the Clean Cities program. How much funding in the
    Clean Cities program will be devoted to expanding markets for E85 and
    other higher blends in fiscal year 2012, and what will that accomplish?
        Answer. The Department agrees that the Clean Cities initiative is
    an excellent way to expand alternative fuel markets. The President's
    fiscal year 2012 budget request for Vehicle Technologies Deployment
    includes $29 million for Clean Cities activities to facilitate the
    deployment of renewable and alternative fuels and advanced
    technologies, as well as the infrastructure to support their widespread
    use. Clean Cities funds would support competitively awarded vehicle
    infrastructure deployment projects, including E85 and other renewable
    biofuel vehicle projects; the funding opportunity would require a
    minimum 50 percent cost share. Clean Cities funds also would be used to
    provide technical assistance, tools, and consumer information related
    to renewable and alternative fuels and advanced technologies that
    reduce petroleum consumption. Examples include safety information
    related to renewable fuels for permitting officials and first
    responders, GPS data and mapping tools for locating renewable fuel
    stations (the current public database includes more than 3,000 sites
    for E85 and B20 biodiesel), and the Federal Fuel Economy Guide and
    FuelEconomy.gov, which include vehicle information on E85 flex-fuel
    vehicles available in the United States.
        Question. When we met with your Deputy Secretary Dan Poneman and
    with EPA Administrator Lisa Jackson last August, we learned that DOE
    was testing E20 in a fleet of autos in parallel with your testing of
    E15. What are the results of those tests, please? Would those tests
    support authorizing use of E20 in all vehicles of model year 2001 and
    newer?
        Answer. DOE is in the process of testing the final four vehicle
    models on E20 fuel. The test results are expected to be ready by
    December 2011. As you know the E15 testing was completed in December
    2010 and the waiver request was ruled upon by EPA in January 2011
    largely based on DOE data. The EPA determination allows up to E15
    blends to be used in all model year 2001 and newer vehicles. Any
    decision to allow E20 use for the same model year vehicles would have
    to be determined by EPA. DOE will continue to share the data with EPA
    as it becomes available.
        Question. We share a belief in the importance of accelerating the
    development and commercialization of advanced biofuels, and I am
    pleased that you are proposing to conduct a reverse auction for
    advanced biofuels in fiscal year 2012. I believe conducting an earlier
    reverse auction, in this fiscal year 2011, would be a good way to get
    some experience with this process for both DOE and the industry.
        Will you conduct an initial reverse auction for advanced biofuels
    in fiscal year 2011? Please tell me when the fiscal year 2012 auction
    will take place.
        Answer. The Department had originally planned to conduct an initial
    reverse auction in fiscal year 2011; however, because many of the
    companies planning to build biorefineries to produce cellulosic
    biofuels have been delayed due to economic conditions, it was decided
    to postpone the proposed auction until fiscal year 2012. It was felt
    that a larger auction would validate the concept and result in a more
    meaningful effect on the marketplace. The timing of the fiscal year
    2012 auction will depend on several factors including industry
    conditions and the budget process.

                            HYDROGEN AND FUEL CELLS

        Question. Secretary Chu, in the early 1990s, I was one of the first
    in the Congress to call for research and development (R&D) of hydrogen
    and fuel cell technologies in the DOE's energy programs. I was pleased
    when these technologies were given legitimate program status in the
    DOE's energy R&D portfolio along with reasonable funding within that
    portfolio. I'm told that this program has been quite successful in
    meeting its goals and milestones. However, your budget proposal for
    fiscal year 2012 proposes a very significant cut to this program area.
        Why are you proposing to cut the hydrogen and fuel cells program
    budget by 41 percent in fiscal year 2012 in the context of a proposal
    for an overall budget increase of 46 percent across all of the EERE
    programs?
        Answer. The Department of Energy's (DOE) strategy is to sustain a
    balanced R&D portfolio, with an emphasis on nearer-term priorities,
    such as batteries, advanced vehicle technologies, and technologies for
    renewable power and energy efficiency. Fuel cell electric vehicles
    (FCEVs) are still part of the portfolio of options under development.
    In fact, DOE's increased funding for battery R&D will also be
    beneficial for FCEVs which rely on batteries in addition to fuel cells.
        The Department will continue its critical efforts in hydrogen and
    fuel cell R&D, which have already reduced the cost of fuel cells by
    more than 30 percent since 2008 and 80 percent since 2002.\7\ In fact,
    DOE's hydrogen and fuel cell program has been extremely successful,
    resulting in approximately 200 patents, 30 products being put on the
    market, and industry currently pursuing development of more than 50
    emerging technologies.\8\ The fiscal year 2012 budget sustains DOE's
    core R&D efforts which will continue to advance the technologies and
    improve the likelihood of a successful rollout by automobile
    manufacturers in the coming years.
    ---------------------------------------------------------------------------
        \7\ http://hydrogen.energy.gov/pdfs/10004_fuel _cell_cost.pdf.
        \8\ http://www1.eere.energy.gov/hydrogenandfuelcells/pdfs/
    pathways.pdf.
    ---------------------------------------------------------------------------
                                DISTRIBUTED WIND

        Question. Secretary Chu, we're all aware of the benefits of large-
    scale wind projects in the United States, and I'm especially proud of
    the leadership role Iowa is playing in windpower manufacturing and
    power generation. However, there also is great potential for smaller-
    scale ``distributed wind'' projects. In fact, smaller wind turbine
    systems can often result in outsized benefits to rural communities,
    farmers, ranchers and other citizens. Small wind systems also offer a
    domestic manufacturing development opportunity given that 95 percent of
    the small wind systems installed in the United States in 2009 were
    manufactured domestically. Moreover, much of that manufacturing
    activity is occurring in economically challenged rural areas.
        In fiscal year 2010, DOE spent approximately $80 million on
    research, development, and demonstration (RD&D) for wind energy, but
    only about 2 percent of that total, about $1.6 million was for small-
    and medium-sized wind.
        Given the significant contributions that distributed wind can make
    to our rural economy and our clean-energy future, do you think that the
    Department ought to place more emphasis on this important renewable
    energy technology?
        Answer. In fiscal year 2010, roughly $5.9 million, approximately
    7.4 percent, of the total DOE budget for wind energy RD&D went to
    distributed wind energy technology, including small (greater than 1
    kilowatt and less than or equal to 100 kilowatts) and midsize (greater
    than 100 kilowatts and less than or equal to 1 megawatt) technologies.
    While distributed wind technology remains a part of the portfolio, the
    Department has recently increased its emphasis on less mature offshore
    wind technologies, as indicated by the President's fiscal year 2012
    budget request. DOE nevertheless plans to continue to support
    activities related to product testing, standards development, and the
    establishment of an accredited third-party certification body for small
    wind turbine technology. The Department also plans to fund the
    remaining $3.2 million of a $5.1 million funding opportunity to support
    midsize turbine prototype development by the close of fiscal year 2011.
        The Department plans to consider research and development efforts
    that build on this funding opportunity to ensure that a range of
    domestically manufactured midsize turbines is commercially available.
    Other planned future program activities include risk mitigation through
    demonstration projects, testing, and standards development to support
    the development of the midsize turbine technology. The Department also
    plans research and development on high-throughput manufacturing
    techniques for wind technologies in order to remain cost-competitive in
    the export market while supporting domestic jobs.
        Question. Will you agree to take a close look at DOE's wind power
    program very soon and take steps to increase DOE's focus and support
    for distributed wind power?
        Answer. The DOE Wind and Water Power program is supporting the
    development of a distributed wind industry roadmap to be completed in
    2012. This roadmap will be a reference document to help the wind
    industry prioritize strategic activities required to overcome barriers
    hindering widespread development and deployment of distributed wind
    technology. Currently, the program supports activities related to
    product testing, standards development, and the establishment of an
    accredited third-party certification body for small wind turbine
    technology. The program also plans to fund the remaining $3.2 million
    of a $5.1 million funding opportunity to support midsize turbine
    prototype development by the close of fiscal year 2011.
        The Department plans to consider research and development efforts
    that build on this funding opportunity to ensure that a range of
    domestically manufactured midsize turbines is commercially available.
    Other planned future program activities include risk mitigation through
    demonstration projects, testing, and standards development to support
    the development of the midsize turbine technology. The Department also
    plans R&D on high-throughput manufacturing techniques for wind
    technologies in order to remain cost-competitive in the export market
    while supporting domestic jobs.
                                     ______

                   Questions Submitted by Senator Jon Tester

                                   FUEL CELLS

        Question. Fuel cells are manufactured in America from American raw
    materials, and produce clean energy that uses American resources
    efficiently. Montana is home to the only platinum mine in the country,
    which provides the catalysts for stationary and vehicle fuel cells.
    Montana also has the largest recoverable coal reserves in the United
    States and though fuel cells are viable now, they also offer a
    potential future for coal, as they are the most efficient way to use
    any fuel, including fossil fuels. I feel very good about the progress
    fuel cell manufacturers have made and will continue to make in reducing
    the amount of platinum used in these catalysts, to bend down the cost
    curve.
        The industry believes that the best way to continue those
    reductions is through commercialization, but that your fuel cell and
    hydrogen budget misplaces priorities with an over-emphasis on research
    and development R&D, while eliminating commercialization support for
    solid oxide fuel cells and fuel cell forklifts, just as they are
    beginning to achieve market success. Is the industry wrong?
        Answer. The Department's strategy is to sustain a balanced (R&D)
    portfolio, with an emphasis on nearer-term priorities, such as
    batteries, advanced vehicle technologies, and technologies for
    renewable power and energy efficiency. Fuel cell electric vehicles
    (FCEVs) are still part of the portfolio of options under development.
    In fact, DOE's increased funding for battery R&D will also be
    beneficial for FCEVs which rely on batteries in addition to fuel cells.
        The Department will continue its critical efforts in hydrogen and
    fuel cell R&D, which have already reduced the cost of fuel cells by
    more than 30 percent since 2008 and 80 percent since 2002.\9\ In fact,
    the Department of Energy's (DOE) hydrogen and fuel cell program has
    been extremely successful, resulting in approximately 200 patents, 30
    products being put on the market, and industry currently pursuing
    development of more than 50 emerging technologies.\10\ The fiscal year
    2012 budget sustains DOE's core R&D efforts which will continue to
    advance the technologies and improve the likelihood of a successful
    rollout by automobile manufacturers in the coming years.
    ---------------------------------------------------------------------------
        \9\ http://hydrogen.energy.gov/pdfs/10004_fuel _cell_cost.pdf.
        \10\ http://www1.eere.energy.gov/hydrogenandfuelcells/ pdfs/
    pathways.pdf.
    ---------------------------------------------------------------------------
        Question. Both fuel cell and hydrogen researchers and the industry
    believe that if your fiscal year 2012 budget is enacted, its structure
    and dollar amount will cause the United States to lose its competitive
    edge in fuel cells for stationary power and transportation
    applications. Is the industry wrong? If not, are you comfortable losing
    this industry to Germany, Japan, South Korea, China, and South Africa?
        Answer. To the contrary, the Department's basic R&D work is
    absolutely essential to ensuring American automakers have the best
    technology available to be competitive in the global marketplace.

                                DISTRIBUTED WIND

        Question. Secretary Chu, while we're all aware of the myriad
    benefits of large, industrial-scale wind projects in the United States,
    there is great potential for smaller-scale ``distributed wind''
    projects as well. In Montana, we have second-best wind potential in the
    United States. In fact, smaller wind turbines or projects can often
    result in outsized benefits to rural communities, farmers, ranchers and
    other citizens. And buy-in for smaller wind translates into social
    acceptance of larger-scale projects.
        It can also help to reinvigorate our Nation's manufacturing base
    given that 95 percent of the small wind systems installed in the United
    States in 2009 was manufactured domestically and much of that
    manufacturing activity occurred in economically challenged rural areas.
        In fiscal year 2010, DOE spent approximately $80 million on
    research, development and demonstration (RD&D) for wind energy, but
    only about 2 percent of that total, about $1.6 million was for small-
    and medium-sized wind. By contrast, your agency spent roughly $250
    million on solar RD&D in that same time period.
        Given the significant contributions that distributed wind can make
    to our rural economy and our clean-energy future; do you think that the
    Department ought to place more emphasis on this important renewable
    energy technology?
        Answer. In fiscal year 2010, roughly $5.9 million, approximately
    7.4 percent, of the total DOE budget for wind energy RD&D went to
    distributed wind energy technology, including small (greater than 1
    kilowatt and less than or equal to 100 kilowatts) and midsize (greater
    than 100 kilowatts and less than or equal to 1 megawatt) technologies.
    While distributed wind technology remains a priority for DOE, the
    Department has recently increased its emphasis on less mature offshore
    wind technologies, as indicated by the President's fiscal year 2012
    budget request. DOE nevertheless plans to continue to support
    activities related to product testing, standards development, and the
    establishment of an accredited third-party certification body for small
    wind turbine technology. The Department also plans to award the
    remaining $3.2 million of a $5.1 million funding opportunity to support
    midsize turbine prototype development by the close of fiscal year 2011.
        The Department plans to consider research and development efforts
    that build on this funding opportunity to ensure that a range of
    domestically manufactured midsize turbines is commercially available.
    Other planned future program activities include risk mitigation through
    demonstration projects, testing, and standards development to support
    the development of the midsize turbine technology. The Department also
    plans research and development on high-throughput manufacturing
    techniques for distributed wind technologies in order to remain cost-
    competitive in the export market while supporting domestic jobs.
        Question. Will you agree to take a close look at DOE's wind power
    program very soon and assess steps to increase focus and support for
    distributed wind power?
        Answer. The DOE Wind and Water Power program is supporting the
    development of a distributed wind industry roadmap to be completed in
    2012. This roadmap will be a reference document to help the wind
    industry prioritize strategic activities required to overcome barriers
    hindering widespread development and deployment of distributed wind
    technology. Currently, the program supports activities related to
    product testing, standards development, and the establishment of an
    accredited third-party certification body for small wind turbine
    technology. The program also plans to fund the remaining $3.2 million
    of a $5.1 million funding opportunity to support midsize turbine
    prototype development by the close of fiscal year 2011.

                 WESTERN AREA POWER ADMINISTRATION TRANSMISSION

        Question. As you know, in February 2009 (in the American Recovery
    and Reinvestment Act [ARRA]), the Congress provided Western Area Power
    Administration (WAPA) with ample and broad borrowing authority to plan,
    finance, build, study, and operate new and upgraded electric power
    transmission lines that deliver or facilitate the delivery of power
    generated by new renewable energy resources. Last year in this same
    hearing, we discussed how little of that $3.25 billion in borrowing
    authority had been exercised. Unfortunately, nothing has changed and
    still less than 5 percent of that money is obligated.
        The legislation is pretty clear. The Administrator of WAPA is
    supposed to use that borrowing authority to go forth and build. That's
    not completely autonomous authority, but the Congress intended WAPA to
    be fairly independent when using it. WAPA can't run a program like the
    Congress intended if they have to renegotiate each deal with each level
    of DOE then Office of Management and Budget (OMB). The developers will
    lose interest and quit. That's just a recipe for inaction laid on top
    of all the other permitting challenges for new transmission and
    renewable energy projects.
        Mr. Secretary, what's going on? Could you describe the review and
    approval process for this borrowing authority and who is the
    transmission expert in charge at the Department for guiding this
    important program?
        Answer. When a project proposal is presented to WAPA, WAPA reviews
    the proposal and works with the project developer to address any
    deficiencies. Once this is complete, WAPA begins an analysis of the
    project, including an in-depth review by subject matter experts and
    independent examiners such as Deloitte Corporate Finance, LLC. The
    proposal is evaluated against the criteria specified for the
    Transmission Infrastructure Program (TIP) in a Federal Register notice
    published on May 14, 2009. Specific terms and conditions may have to be
    negotiated with the project developer in order to ensure there is
    reasonable expectation the Treasury borrowing will be repaid.
        When WAPA is satisfied the project has merit and is appropriate for
    borrowing authority funding, WAPA presents the project to the DOE and
    the Office of Management and Budget for their approval.
        In June, 2011, Secretary Chu appointed Lauren Azar as the
    Secretary's Senior Policy Advisor for Transmission. Ms. Azar is an
    expert on electric power transmission, and played a critical role in
    the Department's review and approval of TIP projects since her arrival.
        Question. Could you, Director Lew and Secretary Geithner lay down
    some simple guidance for WAPA that will let them get to work?
        Answer. Yes. In April 2009, WAPA signed a Memorandum of
    Understanding (MOU) with the Treasury Department that established the
    terms and conditions for loans made by the U.S. Treasury to WAPA
    pursuant to borrowing authority provided WAPA in ARRA (Public Law 111-
    5). This MOU has been reviewed and revised periodically, and the
    arrangement is working well.
        Question. Could you tell us, for the record, how many miles of new
    transmission lines have been built thus far under WAPA TIP)?
        Answer. To date, to WAPA's TIP has funded the construction of 33
    miles of new transmission line. This construction is for the Montana-
    Alberta Tie Ltd. Transmission Project.
        Question. How many miles for Bonneville Power Administration (BPA)?
    And, what has BPA done with the increase in their already massive
    borrowing authority provided by ARRA?
        Answer. BPA finances its operations with a business-type budget and
    on the basis of self-financing authority. Authority to borrow from the
    U.S. Treasury is available to BPA on a permanent, indefinite basis. The
    amount of Treasury borrowing outstanding at any time cannot exceed $7.7
    billion and must be repaid at interest rates comparable to borrowings
    at open market rates for similar issues. BPA's Treasury borrowing
    authority is used to finance projects that sustain and enhance the
    Federal Columbia River Power System, including transmission, hydropower
    modernization, fish and wildlife mitigation, and conservation.
    Transmission investments and enhancement use the greatest amount of
    U.S. Treasury borrowing.
        BPA's transmission system now includes more than 15,000 circuit
    miles of line and 263 substations. The capital financing required to
    sustain this system and meet new demands is significant. Before
    receiving the additional $3.25 billion of borrowing authority as part
    of ARRA, BPA estimated it would reach its Treasury borrowing authority
    limit between 2013 and 2016. The new increment of borrowing authority
    gave BPA the certainty of sufficient access to capital to proceed with
    new-start projects and ensured that existing capital projects could
    proceed as planned. With this financing certainty, BPA commenced
    construction work on two major network reinforcement projects and
    another two are in planning and environmental review stages. If all
    four lines are constructed, these lines will add more than 220 miles of
    lines to the Northwest transmission grid, improve reliability, and
    allow BPA to provide transmission service to about 5,853 megawatts of
    requests for BPA transmission; including 4,891 megawatts of additional
    wind integration and green energy. BPA has completed construction on a
    total of 75 transmission towers and 58 miles of transmission on the
    McNary-John Day line, the first project that was ready to begin at the
    time the ARRA was enacted.
        Additional upgrades, additions and replacements also have
    modernized the transmission grid assets, more than 50 percent of which
    were built prior to 1960.
        In addition to investments in the TIP system, BPA's Treasury
    borrowing authority is used for investments in hydro modernization,
    fish and wildlife, and energy efficiency. For example, with the
    additional access to capital, BPA was able to fund a major
    rehabilitation of the Grand Coulee Third Powerhouse that will improve
    hydro efficiency and is critical to the Federal Columbia River Power
    System (FCRPS) for power production, water management, system
    stability, and ancillary services to the main transmission grid.
    Because of increased access to capital, BPA is investing $203 million
    through 2017 in upgrades and replacements at Federal dams. Also, the
    additional borrowing authority has enabled BPA to fund three major fish
    hatchery projects and will help BPA meet its portion of the aggressive
    targets for energy efficiency in the Northwest Power Planning and
    Conservation Council's Sixth Power Plan. Conservation is the region's
    resource of choice for meeting load growth for the next 5 years and
    beyond.
        While BPA's total borrowing authority, including the new increment,
    is one single funding authority, as of this time, BPA has identified up
    to $2 billion in major capital projects attributed to ARRA through
    2017. Of this total, $583 million has been expended to date. The
    capital projects attributed to ARRA include several of the
    transmission, hydropower modernization, fish and wildlife mitigation,
    and conservation projects mentioned earlier.
        The additional $3.25 billion in borrowing authority has been
    instrumental in providing BPA with assurance that it can proceed with
    essential investment in the region's aging infrastructure and meet the
    increasing demands of its entire capital program. Without available
    borrowing authority, BPA would have to defer or reduce valuable capital
    work needed to keep the FCRPS delivering the clean, renewable
    electricity that is the backbone of the region's economy. Even with the
    ARRA providing a sizable increase in BPA's authority to borrow from the
    Treasury, the agency will continue to face capital funding challenges
    as the pace of capital spending increases to meet the infrastructure
    and energy efficiency needs of the region. BPA continues to seek
    opportunities for alternative funding sources with third parties.

     COORDINATION OF POWER MARKETING ADMINISTRATIONS AND THE DEPARTMENT OF
                                 ENERGY POLICY

        Question. The Power Marketing Administrations and Tennessee Valley
    Authority are all somewhat different animals, due to their enabling
    legislation. But, presumably, they and their Senate-confirmed board
    members are all working together with you and the administration to
    further the goals of the President--energy efficiency, renewable and
    clean energy, a more reliable and smarter grid and so on. How does all
    that work, because it's not obvious from out here that it's all hanging
    together with any specific goals in mind?
        Specifically you released a proposal to promote development of Pump
    Storage Hydro, while at the same time one of the Power Marketing
    Administrations was turning away companies interested in working with
    the Agency to develop permitted projects in their service territory.
        Where does it all get knitted together at the Department?
        Answer. DOE briefed Senator Tester's staff on this issue.
        Question. Do the heads of the PMAs meet regularly with you and your
    team?
        Answer. DOE briefed Senator Tester's staff on this issue.

                              RURAL IMPLEMENTATION

        Question. While DOE is certainly the premier Federal agency dealing
    with research, development, and demonstration for energy, many other
    agencies--the Department of Agriculture (USDA), the Department of
    Defense, the Environmental Protection Agency (EPA) and the Department
    of the Interior--also have authority and resources to support Energy
    development. Along those lines you've teamed up with USDA to work on
    the development of biofuels. That is a good first step.
        But how are you coordinating with these agencies to expand
    information about your solicitations, projects and commercialization
    opportunities, especially in rural America where they develop and
    harness this energy? How about with development of distributed
    technologies? Are you willing to commit to working with your sister
    agencies to identify opportunities to expand opportunities for
    distributed wind and other technologies?
        Answer. The Department is committed to regularly engaging with
    other agencies about program activities in order to maximize
    coordination and prevent interagency overlaps. For example, regarding
    biomass-related activities, DOE regularly coordinates through the
    Biomass Research and Development Board,\11\ which is an interagency
    collaborative composed of senior decisionmakers from Federal agencies
    and the White House--including DOE and USDA (cochairs); the Departments
    of the Interior, Transportation, and Defense, EPA; the National Science
    Foundation; and the White House Office of Science and Technology
    Policy. The Board is charged with maximizing the benefits of Federal
    programs and bringing coherence to Federal strategic planning in
    biomass research and development, including minimizing unnecessary
    duplication of activities. Several other interagency formal and
    informal collaborations function to leverage existing expertise across
    agencies with similar missions and goals, such as Memoranda of
    Understanding (MOU), regular working group meetings, joint
    solicitations, and other mechanisms. Examples of MOUs signed over the
    last 2 years include one on hydrogen with the Army Corps of Engineers
    and the Interior Department, one on off-shore wind, marine and
    hydrokinetic devices with the Interior Department, and an updated MOU
    with EPA on ENERGY STAR.
    ---------------------------------------------------------------------------
        \11\ The Board, as well as the Technical Advisory Committee and the
    annual solicitation, were established by the Biomass Research and
    Development Act of 2000, and later amended by section 9001 of the Food
    Conservation and Energy Act of 2008.
    ---------------------------------------------------------------------------
                         MECHANICAL INSULATION PROGRAM

        Question. Mr. Secretary, Montana was part of a very successful
    pilot program, the Mechanical Insulation Education and Awareness
    Campaign, which initially received $500,000 in fiscal year 2010 through
    the DOE's Industrial Technologies Program (ITP).
        Montana performed an energy assessment in partnership with DOE and
    the mechanical insulation industry. The program looked at 25 buildings
    in the capitol complex and found that installing or replacing
    mechanical insulation in those buildings would save 6 billion Btus per
    year, representing roughly 8 percent of the total natural gas
    consumption of the facilities analyzed, with an overall payback period
    of 4.1 years.
        This is such low-hanging fruit to replace damaged mechanical
    insulation puts people to work immediately and cuts our energy
    consumption.
        How to plan to expand and invest in this successful program,
    promoting it to other States and locations?
        Answer. Through the activities conducted under the Mechanical
    Insulation program, ITP has developed five calculation tools that allow
    users to find cost-effective insulation opportunities such as those
    identified in Montana and to calculate ROI and paybacks. These tools,
    once broadly distributed the summer of 2011, will carry forward the
    results of the Montana pilot program and encourage similar assessments
    in all States across the United States. In addition, the Campaign has
    developed seven online training modules that will be completed by
    September 2011 that educate industrial facilities, building owners,
    property managers, and the construction industry on how to find and
    implement energy efficiency opportunities through greater and more
    effective use of mechanical insulation. Because of these self-paced
    tools and training modules, ITP believes that thousands of users can be
    educated on the benefits of mechanical insulation at little additional
    cost to DOE and the taxpayer. Success stories will be developed on
    Mechanical Insulation and promoted on the ITP Web site and disseminated
    through organizations such as equipment suppliers, the National
    Association of State Energy Officials and the National Insulation
    Association.
        Question. How does your budget efficiently invest in more energy
    efficiency programs we can implement today?
        Answer. ITP is collaborating with approximately 100 companies,
    helping them measure and manage their energy usage so as to demonstrate
    that significant energy savings are possible. For example, after
    receiving three energy savings audits from ITP, an automotive
    manufacturer reduced its energy intensity 29 percent in 1 year at a
    U.S.-based facility.
        Now that ITP has demonstrated that significant energy intensity
    reductions are possible, the program is developing a set of standard
    tools and protocols to increase its leverage and reach. By investing in
    these standard tools and protocols that help private sector companies
    measure and manage their energy usage, ITP is fostering the energy
    management industry. ITP is also developing Professional Certification
    programs for energy management professionals and auditors who will be
    employed in the emerging energy management industry, as part of its
    development of a broader industrial energy efficiency certification
    program.
        ITP is also investing in the training of next-generation energy
    management engineers. Since 2002, 650 graduate and undergraduate
    students have been successfully trained in energy management through
    university-based Industrial Assessment Centers (IACs). ITP plans to
    continue to train additional students through these IACs over the
    coming years.
        All of these activities are being implemented in the near term,
    will result in energy efficiency gains, and will help create jobs and
    improve the competitiveness of U.S. companies.
                                     ______

                 Questions Submitted by Senator Lamar Alexander

                               OAK RIDGE CLEANUP

        Question. Department of Energy (DOE) is requesting about $400
    million in fiscal year 2012 for clean-up activities at the Oak Ridge
    Reservation (ORR). Can you assure me the highest-risk safety concerns
    are being addressed at Oak Ridge Reservation? DOE is bartering its
    uranium inventory to help pay for costs of cleanup at the Portsmouth
    gaseous diffusion plant. Oak Ridge (East Tennessee Technology Park) is
    home to 1 of the 3 original uranium gaseous diffusion plants. Why
    shouldn't this facility (K-25) be cleaned up with funds gained in
    barter of uranium?
        Answer. The highest-risk safety concerns are being addressed at the
    ORR. The K-25 Building at the East Tennessee Technology Park (ETTP) is
    the highest-risk safety concern on the Reservation due to its age and
    deterioration, as well as the presence of special nuclear material and
    radiological and hazardous contaminants. The $400 million in fiscal
    year 2012 addresses this highest risk. For some of the other high risks
    on the ORR, such as mercury at Y-12 and nuclear materials in the
    Central Campus at the Oak Ridge National Laboratory (ORNL)
    (specifically, legacy materials at two of the former isotope production
    facilities, Buildings 3026 and 3038; and those found in the Tank W-1A
    area soils, the most significant source of groundwater contamination in
    that area), funds from the American Recovery and Reinvestment Act
    (ARRA) are being used to address these risks. As for the use of
    bartering of the uranium inventory to provide additional funding, DOE
    has established priorities for the transfer of uranium through 2013.
    The total proposed Department transfers through calendar 2013,
    including scheduled transfers by National Nuclear Security
    Administration (NNSA), are approximately 2,000 metric tons of uranium
    per year, or about 10 percent of U.S. reactor demand, which is a level
    consistent with the principles and policies set forth in the
    Department's Excess Uranium Inventory Management Plan.

                    BLUE RIBBON COMMISSION ON NUCLEAR WASTE

        Question. Among the draft recommendations of the Blue Ribbon
    Commission is increased Federal investment to reduce nuclear waste with
    advanced materials. Please describe how your budget for nuclear energy
    would fund research in this area.
        Answer. The Reactor and Fuel Cycle Technology Subcommittee of the
    Blue Ribbon Commission on America's Nuclear Future (Commission)
    presented draft recommendations to the full Commission. These
    recommendations of the subcommittee are draft, and subject to further
    consideration by the full Commission. The Department will carefully
    consider the Commission's recommendations and advice contained in their
    final report--due in January 2012--and determine a path forward at that
    time.

                     AMERICAN RECOVERY AND REINVESTMENT ACT

        Question. DOE has roughly $2 billion in unspent American Recovery
    and Reinvestment Act (ARRA) funds for weatherization grants, and
    another $2 billion from the State Energy Grant program. Why do these
    balances exist, and why are additional funds being requested for fiscal
    year 2012 given the unspent balances?
        Answer. DOE set an aggressive 3-year performance period in the
    original grant contracts to maximize the timely job creation potential
    of the funds delivered to State and local communities under ARRA. This
    timeline has supported thousands of jobs, delivered energy-saving
    technologies that will save money for families, businesses, and State
    and local governments across the Nation for many years, and spurred
    American competitiveness in the global market for energy efficiency and
    renewable energy.
        As of December 19, 2011, grantees of the Weatherization Assistance
    Program (WAP) have spent $4 billion of their total $4.8 billion ARRA
    allocation. This leaves less than $850 million remaining to be spent in
    the final 4 months of the original grant period. It is anticipated that
    some grantees will have balances remaining on March 31, 2012 and will
    request performance period modifications so funds can continue to be
    used for their original purpose of weatherizing the homes of low-income
    families. WAP has already exceeded its original ARRA production goal of
    593,000 homes weatherized with 4 months remaining and could eclipse
    700,000 homes using the balances on existing grants.
        Grantees of the State Energy Program (SEP) have spent $2.1 billion,
    or more than two-thirds of their $3.1 billion ARRA allocation. DOE is
    working with each grantee to assess opportunities to responsibly deploy
    additional ARRA funds to fully use each grant and create jobs in their
    State and local communities. The vast majority--about 90 percent--of
    ARRA grant funds by DOE's SEP will be spent within the current
    performance period on projects that have supported thousands of jobs,
    saved energy, deployed clean-energy solutions, and strengthened the
    economic foundation of communities across the country. It is
    anticipated that some grantees will have relatively small balances
    remaining on April 30, 2012, and will request performance period
    modifications that will be considered on a case-by-case basis. SEP ARRA
    investments have supported energy-efficiency upgrades of more than
    60,000 buildings and building roofs, totaling approximately 361,000,000
    square feet, upgraded and repurposed more than 625,000 square feet of
    manufacturing space to produce clean-energy products, and contributed
    to the installation of 350,000 kW of renewable energy systems. These
    projects have supported high-paying jobs in the fields of construction
    and design/engineering, manufacturing and transportation while saving
    energy and money over the long term.
        Additional funds are included in the fiscal year 2012 budget
    request to support the efforts of WAP and SEP in their proven ability
    to drive economic development and job creation and to leverage Federal
    dollars using the lessons learned under ARRA. The majority of the
    Weatherization and Intergovernmental Programs (WIP) ARRA grants have a
    performance period ending in early 2012. Even with the performance-
    period modifications, the majority of ARRA funds will be expended by
    then or shortly thereafter. The need for 2012 funding is vital to
    cushion the ramp down of production and employment in the
    weatherization network and to provide State and local governments with
    support in the continued administration of more than $530 million in
    revolving loan funds initiated in 35 States and 100 communities with
    ARRA funds. ARRA funding for WAP helped fund as high as 15,600 full-
    time positions in the network and still is listed as seventh in the
    ARRA portfolio with 14,200 jobs supported last quarter. In addition,
    WAP has leveraged more than $800 million each year of ARRA in Federal
    and non-Federal funding to support the weatherization work at the local
    level. This leveraging has contributed significantly to the number of
    homes weatherized and jobs supported, and has assisted in expanding the
    array of services provided in each home. SEP will also continue to
    expand and replicate the many best practices developed with ARRA grant
    funds throughout the country, leveraged by the innovative financing
    programs they have started. These types of activities continue with any
    annual appropriations provided by the Congress.

                              CONTRACTS MANAGEMENT

        Question. DOE has been on Government Accountability Office's (GAO)
    high-risk list for potential fraud, waste, and abuse for contractor
    oversight since 1990. According to GAO, ``GAO designated DOE's contract
    management as a high-risk area in 1990 because of DOE's record of
    inadequate management and oversight of its contractors.'' While the
    Office of Science (SC) was removed from the ``high risk'' status,
    Environmental Management and NNSA remain. What steps is DOE taking to
    improve contracts management within the Office of Environmental
    Management (EM)?
        Answer. Over the last 2 years, EM has continued to implement
    corrective actions and been recognized by GAO as having met 3 of the 5
    criteria for removal from the high-risk list. EM leadership remains
    fully committed to continuing this improvement journey. GAO also
    acknowledged positive actions for the two criteria not yet achieved.
    These actions include the establishment of clear project and contract
    management policies and guidance, use of a certified earned value
    management system by our contractors as well as ensuring our Federal
    oversight staff was certified at the appropriate level. GAO has noted
    ``the steps illustrate DOE's commitment to improving its contract and
    project management, but the results of these efforts must ultimately be
    demonstrated through improved project performance.'' Toward that end,
    the current project performance data show that EM will meet or exceed
    the success criteria of completing 90 percent of capital asset projects
    within 10 percent of original cost and schedule baselines.
        The two remaining criteria which GAO has judged EM as having not
    achieved are providing the capacity, both people and resources, to
    address problems, and independent validation that corrective measures
    are effective and sustainable.
        EM has taken the following actions to address capacity:
      --EM has assigned senior, experienced project managers as
            Headquarters Project Sponsors for three large capital projects,
            Sodium Bearing Waste Project in Idaho, Salt Waste Processing
            Facility at Savannah River, and U-233 Facility at Oak Ridge.
      --EM has hired a Chief Scientist to serve as a direct advisor to the
            Assistant Secretary of EM for complex technical and design
            issues.
      --EM has arranged for high-caliber technical expertise through use of
            a Technical Expert Group which has access to multiple DOE
            national laboratories.
      --EM has continued review of project staffing adequacy during
            recurring independent project reviews.
        EM has taken the following actions to address validation:
      --Conducting monthly project reviews incorporating lessons learned
            from transparent reporting on ARRA projects.
      --Completing Independent Project Reviews, modeled after the SC
            approach, on a semi-annual schedule for the larger capital
            projects.
      --Actively participating in recent Department-wide initiatives for
            improvement in contract and project management.
        EM is committed to continuous improvement in its performance of its
    mission and in the achievement of all the GAO criteria.

                                  SCIENCE LABS

        Question. SC is currently operating 10 DOE labs across the country.
    Can we afford to continue to operate all of these facilities? Should we
    start looking at reducing the number of national labs?
        Answer. We believe that continued operation of DOE's national
    laboratories, at the levels proposed in the fiscal year 2012
    President's budget, is a national priority. The 10 Office of Science
    laboratories play a critical role in the Nation's research and
    development (R&D) enterprise. The Department's national laboratories
    are home to the world's largest collection of scientific user
    facilities, supporting more than 26,000 unique users from universities,
    national labs, other Federal agencies and businesses large and small
    each year. Functioning as an interdependent system with an exceptional
    set of world-leading facilities and distinctive capabilities, they
    deliver clear benefits to the Nation's research community and help
    solve problems of national importance. They work in partnership with
    universities and industry, transfer the results of their R&D to the
    marketplace, and support the training of the future science and
    engineering workforce.
        It is increasingly clear that transformational science and
    breakthrough technologies will be needed to overcome the complex
    challenges that we face as a Nation in the 21st century:
      --increasing the availability of clean, reliable, and affordable
            energy;
      --ensuring our national security in a changing world; and
      --enhancing U.S. competitiveness by encouraging innovation.
        DOE national laboratories are uniquely equipped and positioned to
    make substantial contributions to the U.S. research enterprise.
        More than 80 Nobel prizes have resulted from research affiliated
    with DOE, much of which was made possible by the unique instrumentation
    and equipment available to the scientific community through the
    national laboratories.
        Some recent results of research conducted by the laboratories
    operated by the SC include:
      --development of the world's smallest battery;
      --development of software that searches databases 10 to 100 times
            faster than large commercial database software;
      --development of a technology to use complementary strands of
            synthetic DNA to build functional materials from the smallest
            building blocks--future applications include biosensors,
            optical nano-devices, and new kinds of solar cells;
      --development of the first microbe that can produce an advanced
            biofuel (an alternative to petroleum) directly from fatty acids
            in biomass;
      --development of nanoscale catalysts and multifunctional membranes
            that may greatly enhance the practicality of fuel-cell powered
            vehicles; and
      --development of a technique to create thin diamond films that are
            helping industry create energy-saving, ultra-low friction and
            wear coatings for mechanical pump seals and tools.
        Each of these accomplishments was made possible by a consistent and
    sustained investment in DOE's national laboratories, which provide
    unique capabilities for maintaining U.S. leadership in science and
    technology. These national laboratories also contain the world's
    largest suite of synchrotron radiation light source facilities, neutron
    scattering facilities, electron-beam microcharacterization centers, and
    nanoscale science research centers, which provide open access to
    specialized instrumentation and expertise that enable scientific users
    from universities, national laboratories, and industry to carry out
    experiments and develop theories that could not be done at their home
    institutions.
        During these tough economic times, DOE recognizes the need to
    identify savings throughout its budget. In the fiscal year 2012 budget
    request to the Congress, SC funded its national laboratories at a level
    consistent with the needs of the Department and the scientific
    community. Savings will be realized in fiscal year 2012 with the
    termination of operations at the Holifield Radioactive Ion Beam
    Facility national user facility at ORNL. In addition, by the end of
    fiscal year 2011, we are completing operation of the world's largest
    proton-antiproton collider, the Tevatron, at the Fermi National
    Accelerator Laboratory. The planned closure of the Tevatron coincides
    with the full start of operations of the Large Hadron Collider in
    Europe.
        Question. Should we start looking at reducing the number of
    national labs?
        Answer. SC regularly reviews the status of the projects and
    programs underway at the laboratories to ensure that they are focused,
    unique, and producing the significant scientific results required and
    expected from the investment of taxpayer dollars. Science's
    laboratories are not static. SC actively engages its labs to assure
    continued relevance and renewed infrastructure. No lab demonstrates
    that better than SLAC National Accelerator Laboratory. A few years ago,
    it was single-purpose particle physics lab. Through prudent
    investments, such as the Linac Coherent Light Source, SLAC is now a
    vibrant, multi-program laboratory making significant contributions in
    photon science, astrophysics, particle physics, and accelerator
    research. ORNL in your home State has similarly been revitalized and
    renewed over the past decade. The programs and projects at the national
    laboratories are designed, executed, and monitored to leverage, not
    duplicate, the activities conducted by other participants in the global
    scientific and academic communities. It is critical to our national
    security, as well as our economic, technical, and scientific standing
    in the world that these national laboratories continue to foster the
    future technological innovations and scientific discoveries that will
    continue to lead the United States on a path of prosperity.

                                 FOSSIL ENERGY

        Question. If one of the goals of this administration is to reduce
    emissions, then why reduce funding for fossil energy? If we want
    cleaner coal or carbon sequestration, how do you accomplish this
    without continued investment is fossil fuels research?
        Answer. The Fossil Energy (FE) fiscal year 2012 budget request
    upholds the President's goals to develop America's innovative
    competitive edge through strategic investments in our Nation's clean-
    energy research, development, and demonstration (RD&D) activities. FE's
    budget request takes into consideration the need for budget restraint,
    which requires making tough choices across all DOE R&D program areas.
    We are investing in only the key enabling technologies that are on
    critical paths and that show the highest-potential impacts on achieving
    the program goals and benefits in the timeframe needed for deployment.
    In addition, ARRA funding provided substantial investments in carbon
    capture and storage R&D and demonstrations ($3.4 billion from ARRA
    funds).

                          STRATEGIC PETROLEUM RESERVE

        Question. DOE proposes to sell some crude oil reserves to generate
    $500 million in budgetary savings. Please describe in detail the
    rationale for reducing the inventory? If the proposal is driven based
    on the need to free up space for inspection and maintenance purposes,
    why isn't DOE proposing a specific number of barrels, rather than a
    dollar amount? What type grade do you propose to sell (light, heavy,
    sweet or sour), and what is the basis for that plan?
        Answer. The sale is proposed to provide operational flexibility in
    managing the reserve. The Strategic Petroleum Reserve seeks to reduce
    its inventory by 5-6 million barrels in order to alleviate unplanned
    overcapacity at some SPR caverns. The overfilling occurred due to the
    relocation of crude oil from Bayou Choctaw Cavern 20 to other caverns
    and the need to free up cavern space throughout the SPR complex. Spare
    capacity and operational flexibility is needed for example to perform
    casing inspections and workovers, to allow on-site oil movements that
    may be required from time to time, and to comply with a recent Texas
    Railroad Commission requirement for more stringent inspections. No
    decisions have been made about what grade of crude oil would be sold.
                                     ______

                 Questions Submitted by Senator Mitch McConnell

        Question. Does the Department have a timeline for considering an
    unsolicited proposal on tails re-enrichment or releasing an updated
    uranium inventory management plan? Given that there are more than 1,200
    jobs on the line, is there no sense of urgency at the Department to
    accelerate the consideration of re-enriching uranium tails?
        Answer. Upon receipt of any unsolicited proposal, the Department of
    Energy (DOE) conducts a review consistent with applicable statutes,
    regulations, and guidelines. While there is no set period of time for
    review of an unsolicited proposal, the Department conducts its review
    as expeditiously as possible. The Department is currently working on
    updating its Excess Uranium Inventory Management Plan. The Department's
    2008 Excess Uranium Inventory Management Plan provided guidelines for
    the management of the Department's excess uranium inventory and
    described planned and future projects under consideration, as
    envisioned in 2008. The Plan was a 10-year estimate of future sales and
    transfers and it contained the caveat that situations could arise where
    DOE's actions could change in response to unforeseen developments.
    Depending on programmatic and policy goals and needs, the Department is
    evaluating the impacts of changes and decisions made since 2008 and
    will revise the Plan accordingly.
        Any decision by the Department regarding the possible enrichment of
    its higher assay tails would have to include careful consideration of
    several factors, among them an appropriate contracting approach, the
    economic benefits to the taxpayer, and the potential market impacts of
    processing and selling the higher assay tails. A decision should not be
    made prior to our full evaluation of all the factors.
        Question. A decade's worth of clean-up efforts have been ongoing at
    the Paducah Gaseous Diffusion Plant (PGDP), which have included the
    removal of 30,000 tons of scrap metal, stored hazardous waste,
    contaminated soil, and facilities. DOE annually submits a budget
    request to continue these clean-up efforts. However, there is the
    potential for a budget shortfall in the coming years. What is DOE's
    proposal to ensure that future budgets meet the needs of clean-up work
    at the PGDP?
        Answer. The Department believes meeting its compliance milestones
    is essential and continues to prioritize actions to stay on course to
    meet these enforceable agreements. The Department continues to work
    with its regulators to ensure projects are appropriately sequenced to
    optimize resources while utilizing a risk-based approach to cleanup.
        Question. If the Department does not anticipate issuing a plan, has
    the Department included funds in its fiscal year 2012 budget to safely
    and securely idle the plant once it returns to DOE control? How much
    does DOE estimate it needs to idle the plant each year?
        Answer. The timing of the return of the PGDP to DOE is a business
    decision solely within United States Enrichment Corporation's (USEC)
    purview. There are provisions of the USEC lease that we would expect
    USEC to comply with, in the event USEC decides to cease operations at
    the Paducah plant. USEC has an obligation under the lease to provide
    DOE with a 2-year notification of USEC's intent to return the PGDP. The
    2 years notice was intended to allow DOE to seek congressional
    appropriations as part of our annual budget process. DOE will develop
    estimates for decontamination and decommissioning activities after
    receiving the 2-year notice from USEC.
                                     ______

                 Questions Submitted by Senator Lindsey Graham

                                    H-CANYON

        Question. H-Canyon is a remarkable asset that can play a key role
    in the future of the complex. It has the capability to handle some of
    the most complicated materials on Earth. It also has the ability to
    produce fuel for NASA's space missions and could be the place where the
    breakthroughs are made for the next generation of spent-fuel recycling.
    However, your budget does not allow for any of these activities. In
    fact, the Defense Nuclear Safety Board has warned that the canyon could
    be lost forever under current Department of Energy (DOE) plans. How do
    you justify this? How much would it cost to construct a new canyon? How
    long would that take? What is the future of H-Canyon?
        Answer. For approximately the past 3 years, H-Canyon has been
    operating to complete the blend down of enriched uranium recovered from
    the processing of surplus unirradiated highly enriched uranium (HEU)
    materials. The Department intends to complete the current HEU blend
    down work in 2011. The Department is planning to transition H-Canyon
    and HB-Line facilities to modified operations in fiscal year 2012. H-
    Canyon will continue to receive sample returns from the Savannah River
    National Laboratory and F Area Laboratory and disposition the samples
    to the liquid waste system. H-Canyon will also remediate large boxes of
    legacy transuranic waste. The Department will retain critical staff and
    perform proficiency runs which maintain the operator qualifications and
    exercise the processing equipment.
        Much of the remaining material that could be processed in H-Canyon
    in the future is used nuclear fuel (UNF). The Secretary of Energy has
    determined that no processing of aluminum-clad UNF will occur until the
    recommendations of the President's Blue Ribbon Commission (BRC) on
    America's Nuclear Future are issued and evaluated by the Department.
    The proposed operational condition of H-Canyon will allow the
    flexibility to process aluminum-clad UNF or any other appropriate
    nuclear materials, in the future, should that decision be made.
        Question. The core mission of DOE's Environmental Management
    program is to reduce the amount of waste currently sitting in our
    weapons complex. As such, any decision that would result in the
    stranding of material should run counter to DOE's mission. This is why
    DOE's decision not to process 14 metric tons of aluminum clad defense
    spent nuclear fuel through H-Canyon is so problematic. Under DOE's
    current vision, this fuel has no disposition path. Will you work with
    me to ensure that this material does not remain in South Carolina if it
    is not to be processed through the canyon?
        Answer. The Department does not intend to indefinitely store used
    nuclear fuel (UNF) at the Savannah River Site. However, I have
    determined that no further processing of aluminum-clad UNF will occur
    until the recommendations of the President's BRC on America's Nuclear
    Future are issued and evaluated by the Department. This will allow the
    Department to make sure these recommendations are factored into
    decisions on how best to process and disposition this material. By
    retaining critical staff and performing proficiency runs to maintain
    operator qualifications and exercise processing equipment, the
    capability to process spent fuel in the future is being preserved.
    Should a decision be made to not use the H-Canyon to process the spent
    fuel, I will work with you to determine an alternative that ensure
    unprocessed UNF does not remain at the Site.
        Question. Trimming unnecessary costs is one way to get our overall
    budget house in order. Spending money to expand L-basin, where the
    aluminum clad fuel is stored, instead of processing it through the
    canyon makes little sense to me. Wouldn't it save DOE money over the
    long term to process the aluminum clad fuel and ultimately close L-
    basin?
        Answer. Per my previous response, no processing of aluminum-clad
    UNF will occur until the recommendations of the President's BRC on
    America's Nuclear Future are issued and evaluated by the Department.

                                    HYDROGEN

        Question. Just recently 13 of my colleagues sent you a letter about
    our support for the fuel cell and hydrogen energy technology programs
    in your portfolio. Do you share our concern that further cuts to these
    programs would inhibit the long-term diversification of our Nation's
    energy portfolio and stunt the development of American-engineered and
    domestically produced energy systems powered by hydrogen and fuel
    cells?
        Answer. The Department's strategy is to sustain a balanced research
    and development (R&D) portfolio, with an emphasis on nearer-term
    priorities, such as batteries, advanced vehicle technologies, and
    technologies for renewable power and energy efficiency. Fuel cell
    electric vehicles (FCEVs) are still part of the portfolio of options
    under development. In fact, DOE's increased funding for battery R&D
    will also be beneficial for FCEVs which rely on batteries in addition
    to fuel cells.
        The Department will continue its critical efforts in hydrogen and
    fuel cell R&D, which have already reduced the cost of fuel cells by
    more than 30 percent since 2008 and 80 percent since 2002.\12\ In fact,
    DOE's hydrogen and fuel cell program has been extremely successful,
    resulting in approximately 200 patents, 30 products being put on the
    market, and industry currently pursuing development of more than 50
    emerging technologies.\13\ The fiscal year 2012 budget sustains DOE's
    core R&D efforts which will continue to advance the technologies and
    improve the likelihood of a successful rollout by automobile
    manufacturers in the coming years.
    ---------------------------------------------------------------------------
        \12\ http://hydrogen.energy.gov/pdfs/10004_fuel _cell_cost.pdf.
        \13\ http://www1.eere.energy.gov/hydrogenandfuelcells/ pdfs/
    pathways.pdf.
    ---------------------------------------------------------------------------
        Question. I understand there are studies out there, including one
    done by the Savannah River National Laboratory in SC, that show that
    battery electric vehicles (BEVs) and plug in hybrid electric vehicles
    (PHEVs) are not going to be cheaper than FCEVs nor is their needed
    infrastructure going to be cheaper. Do you agree with this assessment?
        Answer. We are not aware of the Savannah River National Laboratory
    study you reference, so we cannot comment specifically on its
    assessment. In general, however, it is very difficult to compare
    vehicle and infrastructure costs across technologies. There are a
    number of variables affecting infrastructure cost--such as location and
    site preparation requirements, public accessibility (versus home-access
    only), production technology (for hydrogen), and size of station/volume
    of fuel required or type of electric charging. In addition, although
    R&D is needed to further reduce cost and improve performance of all
    advanced vehicle technologies, each is in a different stage of
    development with different early market requirements, cost-reduction
    targets, and timelines.
        A variety of vehicle technologies and fuels will be required to
    meet the Nation's short-term and longer-term goals of reducing
    petroleum use and greenhouse gas emissions. These technologies are
    developing along different timelines: PHEVs, for example, are
    commercially available today and do not necessarily require any
    additional infrastructure--drivers can charge at home using a standard
    outlet or fuel with gasoline at an existing station, if needed for
    traveling longer distances. BEVs are also commercially available today
    but have different infrastructure requirements. Drivers can charge at
    home overnight using equipment that ranges from $800 to $2,000
    installed; cost estimates for public electric charging equipment and
    installation can vary from $5,000 to $50,000 per charging point,
    depending on the type of charging (Level 2 vs. DC fast charging) and
    other factors (noted above). While FCEVs are not yet commercially
    available, a number of the world's major auto manufacturers have
    announced initial rollouts in the 2015 timeframe. FCEVs will have
    different infrastructure requirements than PHEVs and BEVs.
        Question. Two weeks ago, at your agency's Quadrennial Technology
    Review (QTR) Workshop in Knoxville, Tennessee, representatives from
    hydrogen, fuel cell vehicle, and stationary source fuel cell companies
    heard Under Secretary for Science Koonin say, in front of 100 people,
    that fuel cells and hydrogen were left out of the QTR Framing Document
    to ``see what the reaction would be.'' Do you agree with Under
    Secretary Koonin's approach to the QTR?
        Answer. Under Secretary Koonin has a proven track record of
    bringing diverse groups together and facilitating vigorous technical
    discussions, which is why I asked him to lead our first ever QTR.
        As you are aware, we released the QTR Framing Document in March,
    where we provided a first pass at those technologies that are likely to
    scale up in time to materially impact the President's energy security
    and environmental goals--and to do so affordably. In view of the
    multitude of technologies that could be developed and demonstrated, we
    must set clear priorities within the existing policy framework and
    establish principles that will enable us to coordinate our research,
    development, and demonstration (RD&D) efforts with those of the private
    sector to facilitate timely and material deployment of clean-energy
    technologies. Consequently, in the initial framing document we left out
    a number of technologies that are at the experimental stage or face
    significant technical or multiple infrastructure hurdles. Hydrogen and
    fuel cells were not the only technologies in that category.
        The QTR Framing Document was intended to stimulate discussion and
    facilitate stakeholder engagement as crucial elements of the QTR
    process. In response to comments submitted by representatives from
    hydrogen, fuel cell vehicle, and stationary source fuel cell companies,
    Dr. Koonin invited a number of them to the vehicle efficiency and
    electrification workshop in Knoxville, Tennessee on May 4, 2011 and to
    a clean electricity supply workshop held in Boulder, Colorado on June
    7, 2011. The discussion among technical experts across a spectrum of
    technologies has been invaluable in shaping the QTR team's thinking
    about the highest and best uses of fuel cells and hydrogen in the
    Nation's energy future.
        Fuel cells for distributed generation were already included as 1 of
    the 19 technology assessments that form the foundational analysis of
    the QTR, and hydrogen is considered in our vehicle electrification
    technology assessment. These technology assessments, which were not
    released as part of the Framing Document, are expected to be important
    components of the final report on the QTR.

                          SAVANNAH RIVER SITE PENSIONS

        Question. I have long been concerned about the cost of DOE
    pensions. The growing costs could very well impact programmatic work
    throughout the weapons complex. In fiscal year 2012, what is the
    projected pension obligation across the weapons complex?
        Answer. The table below includes the estimated fiscal year 2012
    contributions for each National Nuclear Security Administration (NNSA)
    contractor based on updated information submitted by the contractors
    during fiscal year 2011.

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

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

                Questions Submitted by Senator Daniel K. Inouye

        Question. I wish to thank you and the Department for maintaining
    the Hawaii office to manage the energy programs and to coordinate with
    the military, the Department of Energy (DOE), and State endeavors. The
    office has been invaluable and continues to support the development and
    implementation of alternative energy policy including those important
    to State and local efforts, partnerships between military and civilian
    efforts in the field and new partnership opportunities involving other
    nations, including Japan. It is my sincere hope that this office will
    continue in fiscal year 2012 and beyond.
        Does the Department have any plans to make meaningful commercial
    investments in ocean thermal energy conversion (OTEC)? If so, how would
    the Department mitigate any environmental concerns? What would be the
    Department's timeframe for such investments?
        Answer. As part of the Department's investments in water power
    technologies, we are currently evaluating the life-cycle costs of OTEC
    power generation and undertaking a rigorous OTEC resource assessment.
    The results of these studies will provide important baseline
    information regarding the potential contribution that OTEC could make
    to our Nation's renewable energy portfolio, as well as the cost of
    energy from OTEC. These reports, which will be completed this fiscal
    year, will serve to inform the Department's investment strategy going
    forward, and allow us to make appropriate investments across all
    renewable energy technologies. While OTEC development and production
    costs are currently estimated to be significantly higher than some
    other energy technologies, the Department has been pursuing a small
    number of targeted technology development projects that aim to advance
    technology readiness, establish a baseline for cost estimates, and
    improve the cost-competitiveness of OTEC generation.
        The Department has been working closely with the National Oceanic
    Atmospheric Administration (NOAA) and the U.S. Navy in the assessment
    of OTEC technologies, with a particular focus on the environmental
    concerns associated with OTEC power generation. In partnership with
    NOAA, DOE is developing guidelines that consider the full realm of
    potential environmental impacts, while also considering potential
    mitigation strategies. This effort includes a series of workshops with
    technical, scientific, and environmental experts from within the
    Federal Government as well as key stakeholder groups. This information
    will serve to inform our future investment strategy so that any future
    commercial development is undertaken in an environmentally sustainable
    manner.
        In order to fully evaluate the technical, environmental, and
    economic performance of a fully integrated, open-ocean OTEC system, it
    is envisioned that a demonstration project in the range of 10 MW to 100
    MW would likely be required. Initial cost estimates for plants of this
    size are $350 million to $1.1 billion. Given the magnitude of such an
    investment and the early stage of OTEC technology development, the
    Department does not envision making any investments in OTEC at this
    scale in the near future.
        Question. Does the Department plan any follow-on competitions to
    follow-up on the successes from the stimulus investment?
        Answer. DOE intends to continue supporting the Pacific Office
    established in 2010 in Honolulu, Hawaii, and we are pleased with your
    perception of our accomplishments and progress. In August 2011, the
    Office of Electricity Delivery and Energy Reliability, with financial
    support from the Department of Defense (DOD), will be stationing a
    staff member in the J-9 office of the U.S. Pacific Command (PACOM) to
    support Command interests in energy and security issues. That staff
    member and the DOE Pacific Office staff will coordinate efforts with
    DOD while continuing the 3 years of effort with the State of Hawaii and
    other U.S. Pacific activities.
        Regarding future competitive funding opportunities, the citizens
    and government of Hawaii will be informed of future announcements. It
    is our normal practice to competitively award research and deployment
    projects. We are aware that both the Governor's office and several
    Hawaii government agencies are routinely exploring and applying for new
    project grants from DOE.

                             CONCLUSION OF HEARINGS

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

                  MATERIAL SUBMITTED SUBSEQUENT TO THE HEARING

        [Clerk's Note.--The following testimony was received by the
    Subcommittee on Energy and Water Development for inclusion in
    the record.]
         Prepared Statement of the Environmental Council of the States
     state environmental agency directors support fiscal year 2012 funding
       appropriation for u.s. department of energy's nuclear cleanup work
        Dear Madam Chairwoman Feinstein and Ranking Member Alexander: We
    are writing to you on behalf of ECOS, the national nonprofit
    nonpartisan association of State environmental agency directors.
        As you consider appropriation levels for the fiscal year 2012
    Federal budget, we urge you to consider the U.S. Department of Energy's
    (DOE) nuclear clean-up work a funding priority.
        DOE has requested that $6.13 billion be appropriated to fund its
    Office of Environmental Management (EM) for fiscal year 2012 so the
    agency can remediate hazardous and radiological contamination at sites
    within the nuclear weapons complex. This figure represents the amount
    of funding DOE needs to successfully perform cleanup work to levels
    necessary for meeting its obligations to State governments outlined in
    cleanup agreements.
        On March 24, 2010, the State environmental agency directors passed
    a resolution urging the Congress to ``appropriate the levels of funding
    necessary to ensure EM annual budgets are fully funded and fully
    compliant'' noting that ``stable funding leads to greater efficiencies
    in cleanup cost and schedule'' (see addendum).
        Therefore we believe that the Congress should fully fund DOE's
    fiscal year 2012 budget request for the EM program. DOE has told States
    that if a lower level of funding is appropriated for fiscal year 2012,
    cleanup of contaminated soils and groundwater will be delayed.\1\
    ---------------------------------------------------------------------------
        \1\ Presentation to the National Governors Association from Ines R.
    Triay, Assistant Secretary for Environmental Management, U.S.
    Department of Energy. May 6, 2011.
    ---------------------------------------------------------------------------
        Cleanup of the nuclear weapons complex represents a large liability
    to the Federal Government, but this is a liability that continues to
    shrink as cleanup is achieved at various sites within the complex. As
    States, we understand what it is like to make tough funding decisions.
    For this one, we urge you to allow DOE to continue the cleanup work to
    its conclusion.
        Thank you for considering our position as you work toward passing a
    Federal budget. Please contact R. Steven Brown, executive director of
    ECOS if you have any questions about this letter.

                CLEANUP BUDGETS FOR THE NUCLEAR WEAPONS COMPLEX

        WHEREAS, the Nation's nuclear weapons production and research and
    development activities, conducted largely between the 1940s and 1980s,
    have left a legacy of hazardous, radiological, and mixed wastes
    scattered across sites widely referred to as the ``nuclear weapons
    complex'' (the ``complex''); and
        WHEREAS, proper cleanup of the complex is critical for protecting
    human health and to ensure that damages to natural resources are
    mitigated and/or compensated for; and
        WHEREAS, the complex consists of over 100 sites in 33 States,
    thereby comprising one of the largest environmental cleanup operations
    being undertaken in the United States; and
        WHEREAS, at least 14 States currently host active cleanup
    operations spearheaded by the U.S. Department of Energy (U.S. DOE)
    Office of Environmental Management (EM); and
        WHEREAS, State environmental agencies are regulators with U.S. EPA
    and U.S. DOE, and may oversee cleanup operations within the complex as
    established by Federal Facility Agreements (FFAs), permits, and consent
    orders under FFCA, CERCLA, RCRA, and other laws; and
        WHEREAS, some sites within the complex, including the Ohio Fernald
    and Colorado Rocky Flats sites, have benefited from accelerated
    cleanups that have generated cost savings from reduced future
    maintenance costs that were not redirected toward other site cleanups
    within the complex; and
        WHEREAS, the influx of funding from the American Recovery and
    Reinvestment Act of 2009 (ARRA) has provided for further acceleration
    of nuclear and hazardous waste cleanups as well as decontamination and
    demolition of obsolete facilities within the complex; and
        WHEREAS, recently completed cleanups have shrunk the footprint and
    overall size and presence of nuclear weapons complex sites within the
    States; and
        WHEREAS, notwithstanding these recent successes, continued cleanup
    of the complex remains a priority issue for the States; and
        WHEREAS, stable funding leads to greater efficiencies in cleanup
    cost and schedule for both U.S. DOE and the States.

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

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2012

                                  ----------

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.

                           NONDEPARTMENTAL WITNESSES

        [Clerk's note.--The subcommittee was unable to hold
    hearings on nondepartmental witnesses. The statements and
    letters of those submitting written testimony are as follows:]

                          DEPARTMENT OF DEFENSE--CIVIL

                             Department of the Army

                           Corps of Engineers--Civil

    Prepared Statement of the Board of Commissioners, Fifth Louisiana Levee
                                    District

        The Board of Commissioners for the Fifth Louisiana Levee District
    respectfully requests that construction funding for Mississippi River
    levees be increased from the $24,180,000 contained in the proposed
    budget for fiscal year 2012, to the U.S. Army Corp of Engineers' (COE)
    capability of $59,980,000.
        Reduced funding, combined with the inability to let construction
    contracts under a continuing contract clause, has left thousands of
    people in Louisiana vulnerable to the adverse effects of a deficient
    levee system. Construction of levee enlargements is essential if the
    levee is to contain the ``Project Flood'' which is estimated to be 20
    percent greater than the record Flood of 1927.
        The effect of fully funded contracts for levee construction, now
    required under Public Law 109-103, (sections 106 and 108), adopted by
    the 109th Congress in 2005, as opposed to the previous system of
    continuing contract clauses, has virtually halted enlargement of the
    Mississippi River levee system in Louisiana. Year after year, as the
    cost of projects and maintenance has increased, funding for levee
    systems and flood control has been reduced. The current proposed budget
    is no exception, with only $210 million allocated for the entire
    Mississippi River and Tributaries (MR&T) project. We request that be
    increased to COE's capabilities of $335 million.
        Since the MR&T project was established, less than $11 billion has
    been invested. This investment provides benefits far beyond their
    actual cost to the taxpayer by offering protection to the 4 million
    citizens, 1.5 million homes, 33,000 farms, and countless vital
    transportation routes from destructive floods.
        With the help of the Congress, great progress has been made in the
    Mississippi River Valley over the years, but there is still much to be
    done, and because of that, we urge the Congress to increase funding to
    COE in fiscal year 2012, to ensure that COE is not forced to halt or
    delay contracts for levee construction essential to the well-being of
    this Nation. It is vital that the MR&T project(s) be completed at the
    earliest possible date. This can only be accomplished through adequate
    funding and repeal of the mandate for contracts to be fully funded
    prior to the beginning of construction.
                                     ______

     Prepared Statement of the Board of Levee Commissioners for the Yazoo-
                               Mississippi Delta

        Is this Nation's heartland worth preserving? Will the richest and
    most fertile farmland in the world be allowed to simply wash away? Are
    the lives and livelihoods of America's bread basket somehow now less
    important?
        These are the questions we must ask ourselves even in this time of
    great economic uncertainty, with opinions and counter-opinions churning
    and Americans seemingly divided as surely as this continent's greatest
    river bisects it.
        And after asking them, then we must remember that some truths
    really are self-evident.
        As we move forward with what we realize necessarily must be a new
    approach to flood control and its funding in the years ahead, we urge
    you not to lose sight of what has been the enormous success of the
    Mississippi River and Tributaries (MR&T) project, a project which has
    made life as we know it in middle America possible. The land in and
    around the Mississippi River Valley has proved to be the most bountiful
    on Earth. Not only is it home to the salt-of-the-Earth men and women
    who populate it, but it is also the producer of an increasingly
    important slice of the U.S. export pie--the food and fiber that clothe
    this country and the rest of the world.
        We understand the political and economic reality which dictates
    that now, more than perhaps ever before, every Federal dollar is
    critical and every expenditure must be prioritized. But then what
    priority of government is more critical than the protection of its
    people and the wealth that they produce?
        The administration proposes fiscal year 2012 funding for the MR&T
    project, one of our great continuing successes, with an almost
    unprecedented benefit-to-cost ratio, at $210 million, once again less
    than the Congress appropriated last year and substantially less than
    the Corps of Engineers' (COE) capability. But in such matters the
    founding fathers saw fit to give the Congress the last word, and so we
    urge you to fund the MR&T umbrella of needed public works at COE's
    capability level of $335 million.
        Honorable Members of Congress, there is a simple truth in our
    region of this country: The Mainline Mississippi River Levee makes life
    and development possible within the Mississippi Delta. Therefore it is
    nothing less than our duty to ask you to fund Mississippi River levees
    construction at $77.73 million and their maintenance at $15.781
    million. A paramount priority to our levee board is the Upper Yazoo
    Projects which we sponsor, not only a much needed endeavor, but a rare
    one, as well, in that it faces no environmental opposition. We urge you
    to advance its completion in the amount of $14.2 million.
        Mississippi's four flood control reservoirs have marked another
    MR&T project success, but it concerns us that they are aging, and we
    request the appropriation of $34.759 million for their continued
    maintenance.
        Also critical to us is the Delta Headwater Project, which helps to
    prevent our Delta streams from filling with eroded soils from the
    hills. We ask that it be funded at $23.2 million.
        We would also request that these other pieces of the flood control
    puzzle in our area be funded as follows:
          Channel Improvements.--$73.270 million;
          Big Sunflower River.--$2.5 million;
          Main Stem.--$25,000;
          Yazoo Basin Reformulation.--$1.2 million;
          Channel Maintenance.--$89.936 million;
          Channel Improvement Dredging.--$18.029 million;
          Channel Improvement Dredging--Memphis.--$12.430 million;
          Channel Improvement Dredging--Vicksburg.--$5.023 million;
          Revetments and Dikes.--$71.907 million;
          Big Sunflower Maintenance.--$985,000;
          Main Stem Maintenance.--$6.248 million;
          Tributaries.--$1.286 million; and
          Whittington Auxiliary Channel.--$494,000.
        And finally, Members of Congress, we have all been shocked and
    sickened by the death and devastation resultant from the recent
    earthquake in Japan. And so we would remind that the strongest recorded
    earthquake on the North American continent, occurred exactly 200 years
    ago--not in California, but along the New Madrid Fault in Missouri. Any
    such event today would make the amount of this needed funding request
    look like child's play, so we urge you to also allocate necessary
    attention and funding to earthquake research and preparedness.
                                     ______

       Prepared Statement of the Board of Mississippi Levee Commissioners

        Mr. Chairman and members of the subcommittee: This statement is
    prepared by Peter Nimrod, Chief Engineer for the Board of Mississippi
    Levee Commissioners, Greenville, Mississippi, and submitted on behalf
    of the Board and the citizens of the Mississippi Levee District. The
    Board of Mississippi Levee Commissioners is comprised of seven elected
    commissioners representing the counties of Bolivar, Issaquena, Sharkey,
    Washington, and parts of Humphreys and Warren counties in the Lower
    Yazoo Basin in Mississippi. The Board of Mississippi Levee
    Commissioners is charged with the responsibility of providing
    protection to the Mississippi Delta from flooding of the Mississippi
    River and maintaining major drainage outlets for removing the flood
    waters from the area. These responsibilities are carried out by
    providing the local sponsor requirements for the congressionally
    authorized projects in the Mississippi Levee District. The Mississippi
    Levee Board and the Mississippi Valley Flood Control Association
    support an appropriation of $335 million for fiscal year 2012 for the
    Mississippi River and Tributaries (MR&T) project. This is the minimum
    amount that we consider necessary to allow for an orderly completion of
    the remaining work in the Valley and to provide for the operation and
    maintenance, as required, to prevent further deterioration of the
    completed flood control and navigation work.
        It is apparent that the administration loses sight of the fact that
    the MR&T project provides protection to the lower Mississippi valley
    from waters generated across 41 percent of the continental United
    States. These waters flow from 31 States and 2 provinces of Canada and
    must pass through the Lower Mississippi Valley on its way to the Gulf
    of Mexico. We will remind you that the MR&T project is one of, if not
    the most cost-effective project ever undertaken by the U.S. Government.
    The foresight of the Congress in their authorization of the many
    features of this project is exemplary.
        The many projects that are part of the MR&T project not only
    provide protection from flooding in the area, but the award of
    construction contracts throughout the Valley provides assistance to the
    overall economy of this area. The employment of the local workforce and
    purchases from local vendors by the contractors help stabilize the
    economy in one of the most impoverished areas of our country.
        We are concerned about the ``earmark moratorium'' that the Congress
    has adopted for the next 2 years. Basically the Congress has
    essentially given up their right to appropriate money. They have
    relinquished this right to the Office of Management and Budget (OMB).
    OMB always provides a budget that undercuts our projects in the MR&T
    project because they know that the Congress will provide
    ``congressional adds''. Unfortunately people think that the
    ``congressional adds'' for the MR&T project are ``earmarks''.
    ``Earmarks'' account for less than 1 percent of the entire Federal
    budget, but it is these ``earmarks'' that provide money for much-needed
    and essential projects and provide jobs for the economy. The stimulus
    money spent the past 2 years created jobs, built projects and
    stimulated the economy. This ban on ``earmarks'' will cause many
    projects to be stopped, jobs will be lost and the economy will fall
    right back into a recession. The Congress needs to define what an
    ``earmark'' is and they need to be able to do ``congressional adds''
    for our projects.
        Thanks to the additional funding provided by the Congress over the
    last several years over and above the administration's budget, work on
    the Mainline Mississippi River Levee Enlargement Project is continuing.
    Of the original 69 miles of deficient levees in the Mississippi Levee
    District, 32 miles of work have been completed and 8.1 miles are
    currently under contract. We are requesting $77.73 million for
    construction on the mainline Mississippi river levees in the Lower
    Mississippi Valley Division which will allow the Vicksburg and Memphis
    districts to keep existing contracts on schedule and award contracts to
    avoid any future unnecessary delays in completing this vital project.
    We are all well aware that the Valley some day will have to endure a
    Project Flood, we just don't know when. We must be prepared.
        The President's fiscal year 2011 budget did not include funding for
    any construction projects within the Yazoo Basin. This action is
    especially difficult to understand during a time when our Nation needs
    an economic boost. These are all projects authorized and funded so
    wisely by the Congress. All of these projects are encompassed in the
    footprint of the Delta Regional Authority, an area recognized by the
    Congress as requiring special economic assistance to keep pace with the
    rest of our great Nation. We can not lose sight of the fact that all of
    these projects are required to return more than a $1 in benefits for
    each $1 spent.
        The recommended plan for the Yazoo Backwater Project includes a
    pump that will lower the 100-year-flood event by 4.5 feet thereby
    reducing urban and rural structural damages, providing benefits to the
    remaining agricultural lands, and reducing the frequency and duration
    of floods. The plan also includes reforestation easements to be
    purchased on up to 55,600 of existing agricultural land which will
    provide benefits in every environmental category--wetlands,
    terrestrial, aquatics, and waterfowl resources as well as vastly
    improving water quality. This is a model project that should be the
    standard for future public works projects in the United States. On
    August 31, 2008, the Environmental Protection Agency (EPA) wrongly used
    its authority under section 404(c) of the Clean Water Act (CWA) to veto
    the Yazoo Backwater Project even though it is exempt by section 404(r)
    of the CWA. The Mississippi Levee Board is currently engaged in a
    lawsuit against EPA asking the Federal court to determine if this
    project is indeed exempt from an EPA 404(c) veto by the exemption in
    section 404(r) of the CWA. The administration has ordered the
    cancellation of $57 million in reserves for the Yazoo Backwater
    Project. If we lose this money, we will have to start from scratch with
    the appropriations cycle. Please do everything you can to keep the $57
    million for the Yazoo Backwater Project and prevent this cancellation
    from happening. These funds will allow COE to begin acquisition of the
    reforestation easements and initiate the award of the pump supply
    contract. These funds were appropriated to solve flooding in the South
    Mississippi Delta, therefore, they should be used to alleviate flooding
    in the Mississippi South Delta.
        We are requesting $4.575 million for the Yazoo Backwater less Rocky
    Bayou Project. This money will be used to start the Environmental
    Impact Statement for the Yazoo Backwater Levee Enlargement Project.
    This levee is designed to overtop during a project design flood, but it
    needs to be raised 7 feet to get to the required elevation. Today, this
    levee will not be sufficient if we get a flood on the Mississippi River
    greater than the 100-year event.
        Work on the Big Sunflower (Upper Steele Bayou) Project has proved
    to be very beneficial. The Steele Bayou Sedimentation Reduction Project
    has installed drop-pipe structures at headcut locations all along
    Steele Bayou. These control structures stop the movement of sediment
    into Steele Bayou. Sediment is bad for flood control and water quality.
    We are requesting $2.5 million to keep this project moving forward.
        Work on the Delta Headwaters Project has proven effective in
    reducing sediments to downstream channels. To discontinue this project
    will only diminish water quality by increasing sediment, reducing the
    level of flood protection to the citizens of the Delta and increasing
    required maintenance. We are requesting $23.2 million to continue this
    project.
        Maintenance of completed works can not be overlooked. The four
    flood control reservoirs overlooking the Delta have been in place for
    50 years and have functioned as designed. Required maintenance must be
    performed to avoid any possibility of failure during a flood event. We
    are asking for $6.841 million for Arkabutla Lake; $7.174 million for
    Enid Lake; $8.051 million for Grenada Lake; and $12.693 million for
    Sardis Lake.
        We are requesting $15.781 million for maintenance of the mainline
    Mississippi river levees in the Lower Mississippi Valley Division which
    will provide for repair of levee slides, slope repair, and repair of
    the gravel maintenance roadway which is so vital to access during high
    water.
        The Mississippi River and our ports and harbors need money for
    maintenance dredging. The Mississippi River carries tons of sediment
    every second. This sediment falls out in slack water areas such as
    entrances to our ports and harbors. The Greenville Port needs $1
    million and the Vicksburg Port needs $750,000 to perform annual
    maintenance dredging. This dredging is vital to keep these ports open
    during the low-water season when much of the farm harvest is ready to
    be transported.
        We are requesting $3.03 million for the Lower Mississippi Valley
    Division for Collection of basic data under general investigations.
    This money is used to monitor and collect water-quality samples at
    gaging stations located throughout the Mississippi Delta. With the
    emphasis on water quality, water quantity, and Total Maximum Daily
    Loads (TMDLs), we must be able to continue to collect good data on
    water quality so we can get a baseline established to be able to
    monitor and improve water quality in the Mississippi Delta.
    Improvements in water quality in the Mississippi Delta will translate
    into improved water quality in the Gulf of Mexico and help the gulf
    hypoxia issue.
        EPA has been given too much power under section 404(c) of the CWA
    which allows EPA to veto congressionally authorized projects. During
    the early 1990s, due to abuse of the 404(c) power by EPA, the Congress
    considered removing this authority from EPA. EPA has again invoked this
    veto power on the Yazoo Backwater Project. EPA is saying that you
    cannot lower the water level with a flood control project. By killing
    this project with 404(c) veto authority, EPA is drawing a line in the
    sand over the future of flood control in our great Nation. EPA has
    vetoed the Yazoo Backwater Project even though it was approved,
    authorized and funded by the Congress and exempt from a 404(c) veto by
    404(r). It is now time to again take up this issue and remove the
    404(c) veto power from EPA before they kill another flood control
    project that has been authorized by the Congress.
        The Council of Environmental Quality draft proposal of changes to
    the Principals and Guidelines for Federal agencies fails to establish a
    clear, concise, and workable framework to guide development of water
    resources projects. It is incoherent and inconsistent--and thus not
    implementable in a practical sense. It substantially fails to comply
    with the explicit directions in section 2031 of WRDA of 2007 as well as
    the large body of previous law and policy related to water resources.
    It is written so as to not require or even encourage use of proven
    analytical tools to distinguish among alternatives. It elevates
    environment considerations over economic benefits, social well-being
    and public safety. Because of these critical and extensive failings, we
    recommend that this effort be put aside and restarted from the
    beginning.
        As Members of Congress representing the citizens of our Nation who
    live with the Mississippi River everyday, you clearly understand both
    the benefits provided by this resource and the destructive force that
    must be controlled during a flood. On behalf of the Mississippi Levee
    Board, I can not express enough, our appreciation for your efforts in
    providing adequate funding over the last several years that has allowed
    construction to continue on our much needed projects and thank you in
    advance for your kind consideration of our requests for fiscal year
    2012.
                                     ______

            Prepared Statement of the City of Morro Bay, California

        The city of Morro Bay is providing testimony to the Senate
    Subcommittee on Energy and Water Development to respectfully request
    that funding of $2.5 million be included in the fiscal year 2012 budget
    for the Army Corps of Engineers (COE) to dredge the Entrance/Transition
    channels in Morro Bay Harbor and to fund a condition survey of the
    North Breakwater.
        During World War II COE designed and constructed a new harbor
    entrance at Morro Bay with two rock breakwaters. Since the initial
    construction, more than 60 years ago, the Federal Government has
    maintained the harbor entrance, breakwaters, and navigational channels.
    In fiscal year 1995, COE completed the Morro Bay Harbor Entrance
    Improvement Project to improve safety for commercial fishing and
    coastal navigation. The city of Morro Bay contributed almost $1 million
    in local cost share to this project.
        Since 1995 the Federal Government has funded maintenance dredging
    of Morro Bay Harbor entrance area every year and schedules a larger
    project to maintain the Morro and Navy Navigation channels every 3 to 5
    years, as those channels accumulate sediment at a slower rate than the
    entrance area.
        Below is a summary of dredging history for the federally designated
    navigation channels in Morro Bay.

    ------------------------------------------------------------------------
                   Date                     Area dredged       Cubic yardage
    ------------------------------------------------------------------------
    1997..............................  Outer entrance......          63,009
    1998..............................  Entrance, main,              695,080
                                         Navy, Morro, and
                                         sand trap.
    1999..............................  Entrance and                 134,234
                                         transitional
                                         channel.
    2000..............................  Entrance and                 236,883
                                         transitional
                                         channel.
    2001..............................  Entrance and                 180,467
                                         transitional
                                         channel.
    2002..............................  Entrance, Navy,              868,483
                                         Morro, and sand
                                         trap.
    2003..............................  Entrance and                 170,817
                                         transitional
                                         channel.
    2004..............................  Entrance and                 155,708
                                         transitional
                                         channel.
    2005..............................  Entrance and                 133,989
                                         transitional
                                         channel.
    2006..............................  Entrance and                 196,237
                                         transitional
                                         channel.
    2007..............................  Entrance and                 150,581
                                         transitional
                                         channel.
    2008..............................  Entrance and                 140,789
                                         transitional
                                         channel.
    2009..............................  Entrance and                 151,067
                                         transitional
                                         channel.
    2010..............................  Entrance, main,              823,749
                                         Navy, Morro, and
                                         sand trap.
    ------------------------------------------------------------------------

        A condition survey of the North Breakwater has not been completed
    since 1986. Since that time Morro Bay Harbor was subject to effects
    from the San Simeon Earthquake of 2003, the Chilean Tsunami of 2010,
    and the recent Japanese Tsunami of 2011. In March 2011, the Morro Bay
    Harbor saw 9-foot surges and large waves at the entrance area during
    the Tsunami generated by a 9.0 earthquake centered in Japan. Due to the
    long period of time since the last condition survey and to the unusual
    stresses the breakwater has been subject to, we feel it is critical to
    complete this condition survey of the North Breakwater in fiscal year
    2012.
        Morro Bay Harbor is the only all-weather harbor of refuge between
    Santa Barbara and Monterey along the rough waters of California's
    central coast. Our Harbor directly supports almost 250 home-ported
    fishing vessels and marine dependent businesses. We provide critical
    maritime facilities for both recreational and commercial interests.
    Businesses that depend on the harbor generate $50,000,000 annually and
    employ more than 700 people. In addition to the home-ported commercial
    fishing vessels, Morro Bay Harbor serves as port for 15-25 additional
    fishing vessels either transiting the coast, or here to fish during
    certain seasons. More than 400 recreational vessels come through Morro
    Bay Harbor while transiting the California coast.
        The United States Coast Guard (USCG) maintains a 27-person National
    Security Base and Search and Rescue Station at Morro Bay Harbor, which
    provides Coast Guard services for the entire central California coast,
    including port safety coverage for the Diablo Canyon Nuclear Power
    Plant and Vandenberg Air Force Base.
        The California State Department of Fish and Game home ports their
    65-foot enforcement vessel Blue Fin in Morro Bay. The Blue Fin enforces
    Federal and State Fish and Game regulations from Monterey to the
    Channel Islands and out 200 miles. The Fish and Game Department has an
    agreement with USCG to assist them with homeland security within this
    area as well. The Blue Fin is also made available through mutual aid
    agreements to all other law enforcement agencies, for enforcement
    assistance and search and rescue operations. It is vital that these
    vessels be able to safely transit the Morro Bay Harbor entrance and
    navigate within the Harbor to perform their missions.
        The Morro Bay Harbor Patrol provides routine and emergency response
    to boaters within Morro Bay Harbor and responds to incidents as far as
    Montana de Oro to the south and Cambria to the north. The Morro Bay
    Harbor Patrol provides assistance to USCG, the Morro Bay National
    Estuary Program, the California Department of Fish and Game, the
    California Department of Parks and Recreation and San Luis Obispo
    County.
        In 2000 the California legislature designated Morro Bay and several
    other small ports along the California coast as ``Harbors of Safe
    Refuge''. This legislation recognizes the critical role many small
    harbors play in affording a safety zone for commercial and recreational
    vessels transiting the California coast.
        Morro Bay Harbor's configuration exposes the entrance to the open
    ocean and strong winter storms, creating swells and currents that
    constantly carry sand and sediment into the navigation channels. The
    Morro Bay National Estuary Program recognizes the need to maintain the
    navigational channels in the harbor not only for the safe access of
    emergency and fishing vessels, but also to maintain adequate tidal
    exchange for the health of the Morro Bay Estuary.
        Morro Bay is a city of 10,000 people, with a total annual operating
    budget of approximately $25 million. We are almost entirely reliant on
    tourism and a small fishing fleet for our revenue. The city simply
    cannot afford to maintain the harbor without continued Federal
    assistance. If the channels are not dredged, all of the past local and
    Federal investment will be lost. It is imperative that the federally
    constructed navigation channels, entrance area, and protective jetties
    be maintained on a consistent schedule.
        COE has the capability to execute $2.5 million in maintenance
    dredging operations and a North Breakwater condition survey for fiscal
    year 2012. We respectfully request that your distinguished subcommittee
    include $2.5 million in funds for Morro Bay to keep our harbor open and
    safe in all conditions, to provide a safe base of operations for USCG,
    California Department of Fish and Game, and the Morro Bay Harbor
    Patrol, and to protect the health of the Morro Bay National Estuary.
        Thank you for your actions and support, and for the opportunity to
    present these requests to your subcommittee on behalf of the citizens
    of the city of Morro Bay.
                                     ______

                   Prepared Statement of EnviroScience, Inc.

        To the honorable members of the Senate Subcommittee on Energy and
    Water Development: I am writing in support of continued, and indeed,
    expanded appropriations for the Corps of Engineers (COE) Aquatic Plant
    Control and Research Program (APCRP). My company EnviroScience, Inc. is
    a small environmental consulting firm engaged in the practical control
    of aquatic invasive plant species throughout the United States. For
    more than a decade, EnviroScience, its clients and the entire aquatic
    plant industry has benefitted from the research and technology transfer
    functions carried out by this COE program.
        Although I understand you are faced with complex and difficult
    decisions with regard to our Nation's budget, continued funding of this
    program and the research activities of the APCRP is critical to the
    fight against aquatic invasive species which I believe is one of the
    most important environmental issues our country faces over the next
    several decades. I see first-hand the tremendous impact these aquatic
    invasive plants have on recreational, public health, and property
    values. Every day I deal with lake communities whose property has been
    devalued by aquatic invasive plants like Eurasian watermilfoil, an
    invasive nuisance species that now infests countless thousands of
    waterbodies in every continental State.
        Exotic invasive aquatic plants like water chestnut, Eurasian
    watermilfoil, and hydrilla, are continuing to expand their ranges
    virtually unchecked. There is a critical need for more and better
    information on these species and appropriate control methods. In my
    opinion, the APCRP has been the best single source of this information
    over the years. APCRP also plays a critically important role in
    researching basic ecology, biological control, and native plant
    restoration. Unlike herbicide research, these are research areas that
    won't be supported by private industry, but are nonetheless very
    important in the ongoing struggle to understand and control these
    species.
        In all honesty, we haven't done a very good job of keeping these
    species out of our Nation's waterways, nor are State or Federal
    agencies able to fund the actual control of these species. At the very
    least, I believe the Federal Government should be a repository for
    current information on these invasive pests, and continue to sponsor
    and conduct research into environmentally sound control methods.
        In conclusion, I urge you to support funding for the APCRP program
    at a minimum level of $4 million per year and thereby help ensure that
    COE remains a frontline defense in our Nation's fight against these
    unwanted invaders.
                                     ______

            Prepared Statement of the Izaak Walton League of America

        The Izaak Walton League of America appreciates the opportunity to
    submit testimony concerning appropriations for fiscal year 2012 for
    programs under the jurisdiction of the subcommittee. The League is a
    national, nonprofit organization founded in 1922. We have approximately
    38,000 members and more than 250 local chapters nationwide. Our members
    are committed to advancing common sense policies that safeguard
    wildlife and habitat, support community-based conservation, and address
    pressing environmental issues. The following pertains to programs
    administered by the U.S. Army Corps of Engineers (COE).

      U.S. ARMY CORPS OF ENGINEERS, OPERATIONS AND MAINTENANCE, MISSOURI
                                     RIVER

        The League joins the Missouri River Association of States and
    Tribes (MoRAST), among other groups, in urging the subcommittee to
    appropriate $72.89 million in fiscal year 2012, as requested by the
    President, for the Missouri River Recovery Program. With this funding,
    COE, U.S. Fish and Wildlife Service (FWS), States, and other partners
    can continue important ecosystem restoration efforts that are producing
    long-term ecological and economic benefits.
        The Missouri River basin encompasses land in 10 States covering
    one-sixth of the continental United States. The Missouri, America's
    longest river, is one of the most altered ecosystems on Earth. Although
    recovery and restoration efforts are on-going, much more needs to be
    done. League members, especially those in Iowa, Nebraska, and South
    Dakota, want to see the recovery efforts continue and expand.
        COE, FWS, and many State agencies have been working to restore
    habitat for fish and wildlife along the river. This work is critical
    for the Interior Least Tern and Pallid Sturgeon, listed as endangered,
    and the Piping Plover, listed as threatened, under the Endangered
    Species Act. The restoration efforts also benefit many other species of
    fish and wildlife throughout the region.
        Studies conducted by the FWS show that over twice as many fish
    species are utilizing the created shallow water habitat areas compared
    with the section of the river with a dredged channel. COE's study also
    shows that the emergent sandbar habitat projects have had tremendous
    response from nesting terns and plovers. These habitat restoration
    projects are working with the river--not against it.
        These projects also generate additional economic activity in
    communities along the river. Anglers, hunters, boaters, birdwatchers,
    and others have been using these areas proving the old adage ``if you
    build it, they will come.'' In a recent report, the Missouri Department
    of Conservation and the Nebraska Game and Parks Commission found
    recreational spending provides $68 million in annual economic impact to
    communities along the Missouri River from Yankton, South Dakota to St.
    Louis, Missouri. A South Dakota Game, Fish, and Parks study shows that
    recreational benefits from angling on the Missouri River account for
    more than $107 million in annual economic activity in the Dakotas and
    Montana. These projects are bringing more people to the river
    throughout the Missouri basin.
        In addition to the economic boost from tourism, restoration
    projects, including building sandbars, support job creation throughout
    the entire region. To perform this work, COE contracts with local
    construction companies, creating or maintaining jobs, and injecting
    dollars into local economies through purchases of materials, fuel,
    food, and lodging. With the funding requested, COE could readily
    implement more of these important economic and river restoration
    projects.
        Missouri River Authorized Purposes Study.--The League also urges
    the subcommittee to continue to provide $5 million for the Missouri
    River Authorized Purposes Study (MRAPS), and to oppose extraneous
    policy ``riders'' that would curtail or cancel this critical
    assessment. The MRAPS will, for the first time, review the eight
    authorized Missouri River project purposes established by the Flood
    Control Act (FCA) of 1944. This study will analyze the purposes in
    terms of what is best for the American taxpayer, the people within the
    entire basin, fish and wildlife, and today's economic values and
    priorities, rather than those of nearly 70 years ago.
        COE is working collaboratively with tribes, Federal and State
    agencies, and other stakeholders within the Missouri River Basin and
    along the Mississippi River on this historic study--this has never
    happened before.
        The eight authorized purposes--flood control, hydropower,
    recreation, fish and wildlife, irrigation, water supply, water quality,
    and navigation--have not been reviewed since the Congress passed the
    FCA in 1944. In essence, the Missouri is operating on a 67-year-old
    business plan. This review is urgently needed and long overdue for the
    American taxpayer.
        The Missouri River basin is very different today than what was
    envisioned in 1944. Some of the authorized purposes meet or greatly
    surpass expectations from decades ago. Currently, recreational uses of
    the river dramatically exceed original expectations while other
    purposes, particularly navigation, have fallen far short. In spite of
    these changes, river management mostly favors navigation. This outdated
    and unbalanced approach is especially in need of review when one
    considers that navigation is being maintained largely to accommodate
    one commodity. According to the General Accounting Office (GAO), sand
    and gravel accounted for 84 percent of total tonnage shipped by barge
    on the Missouri between 1994 and 2006. Moreover, GAO found that 54
    percent of all sand and gravel was transported for 1 mile or less.
    Today, in part because the purposes in the 1944 Flood Control Act have
    not been modernized, the river is being managed to move sand less than
    a mile rather than for more diverse and beneficial purposes.
        Continued full funding of MRAPS is a smart investment. A
    comprehensive review and accompanying changes will streamline future
    COE operational expenses. This will save tax dollars and bring Missouri
    River management into the 21st century.

        U.S. ARMY CORPS OF ENGINEERS, OPERATIONS AND MAINTENANCE, UPPER
                               MISSISSIPPI RIVER

        The League is an active and long-time proponent of restoring the
    Upper Mississippi River (UMR) ecosystem. We have supported the
    Environmental Management Program (EMP) since its inception and continue
    to support this vital restoration program. We urge the subcommittee to
    provide $33.2 million for EMP in fiscal year 2012 as authorized by the
    Water Resources Development Act (WRDA). Although we are encouraged by
    the President's request for fiscal year 2012, pressing restoration
    needs on-the-ground require at least the full amount authorized for
    EMP.
        The League has also strongly expressed its opinion that the large-
    scale navigation modifications included in the recommended plan for the
    Upper Mississippi Navigation and Ecosystem Sustainability Program
    (NESP), as authorized by the WRDA of 2007, have not been justified by
    COE and should not be pursued. Previous reviews by the National Academy
    of Sciences and the Assistant Secretary of the Army, Civil Works found
    that the navigation construction component of NESP was not economically
    justifiable. A report released last year by the Nicollet Island
    Coalition, of which the League is a member, provides additional
    evidence that proposed locks and dams in this region are not a good
    investment for American taxpayers. With this in mind, the League
    supports the administration's decision not to request funding for NESP
    in fiscal year 2012.
        The League has strong roots in the Upper Mississippi River region.
    Protecting the basin has been a key issue for our members since we led
    the fight to create the Upper Mississippi River Fish and Wildlife
    Refuge in 1924. The League has spearheaded efforts to reform the lock
    and dam navigation system to ensure that flows and habitat remain as
    natural as possible. We also work to promote sustainable agriculture
    practices and implement farm conservation programs to reduce polluted
    runoff. Our testimony reflects many decades of experience on the Upper
    Mississippi River and our direct 15-year involvement with the Upper
    Mississippi River--Illinois Waterway (UMR-IWW) navigation study.
        The Upper Mississippi River is one of the most complex ecosystems
    on Earth. It provides habitat for 50 species of mammals, 45 species of
    reptiles and amphibians, 37 species of mussels, and 241 species of
    fish. The need for ecosystem restoration is unquestionable. As COE
    correctly stated in its study of navigation expansion, this ecosystem
    is ``significantly altered, is currently degraded, and is expected to
    get worse.'' Researchers from the National Academy of Sciences have
    determined that river habitat is disappearing faster than it can be
    replaced through existing programs such as EMP, which was authorized at
    $33.2 million annually by the Congress in 1999, but has never received
    full appropriations. As habitat vanishes, scientists warn that many
    species will decline and some will disappear.
        Our Nation relies on a healthy Mississippi River for commerce,
    recreation, drinking water, food, and power. More than 12 million
    people annually recreate on and along the Upper Mississippi River
    spending $1.2 billion and supporting 18,000 jobs. More people recreate
    on the Upper Mississippi than visit Yellowstone National Park. Notably,
    barge traffic has remained static on the river for more than two
    decades with real declines in recent years.
        In assembling the UMR-IWW navigation study, COE recognized the
    critical need for ecosystem restoration and encouraged the Congress to
    invest approximately $130 million annually in Upper Mississippi River
    habitat restoration efforts. With this demonstrated need in mind, the
    League strongly encourages the subcommittee to prioritize investment in
    ecosystem restoration by appropriating $33.2 million for the EMP in
    fiscal year 2012. Appropriating additional funding for restoration will
    support economic development and job creation in communities along the
    UMR and provide long-term conservation and economic benefits for the
    region and the Nation.
        We appreciate the opportunity to submit this testimony and look
    forward to working with the subcommittee to strengthen the investment
    in ecosystem restoration and recovery along the Upper Mississippi and
    Missouri Rivers.
                                     ______

     Prepared Statement of the Mississippi Valley Flood Control Association

        The Mississippi Valley Flood Control Association respectfully
    requests that the sum of $335 million be appropriated in fiscal year
    2012 for the Mississippi River and Tributaries Project.
        The Flood Control Association was first organized in 1922 by a
    group of interested citizens from the States of Arkansas, Mississippi,
    and Louisiana. From that first meeting, held in Memphis, Tennessee, a
    delegation was selected to come to Washington in an attempt to convince
    both the Congress and the executive branch that the prevention of
    catastrophic floods in the lower Mississippi River valley was beyond
    the capabilities of the local people and was in fact too large for any
    group other than the Federal Government. This group of dedicated
    citizens was without success until the record flooding of 1927 swept
    through the Mississippi River valley with a fury of devastation not
    seen before. An unknown number of people perished, along with thousands
    of head of livestock and large numbers of many species of wildlife.
    Some 7 percent of all the productive land on this planet was under
    water for a period of almost 6 months. The Congress, after extensive
    hearings, passed the Flood Control Act of May 15, 1928, which was then
    signed into law by President Calvin Coolidge.
        The Flood Control Association then disbanded, acting under the
    erroneous assumption that the United States Government would provide
    whatever was needed to prevent flooding in the valley. In 1935 it
    became apparent that additional legislation was required and the
    Association, under the leadership of Senator John Overton from
    Louisiana, was reorganized. It has been in continuous and active
    existence since, some 76 years.
        We have been fortunate since 1935 to have as our president and two
    vice presidents Members of the United States Congress with Congressman
    Mike Ross from the State of Arkansas serving as our president and
    Senator Roger Wicker from Mississippi and Congressman Blaine
    Luetkemeyer from Missouri serving as our vice presidents.
        We are a nonprofit agency made up of levee boards, drainage
    districts, harbor and port commissions, States, cities and towns,
    including many other agencies and individuals that have an interest in
    the protection and betterment of the people and property in the
    Mississippi River Watershed, the third largest in the world. But we
    feel it is the greatest, because of its size coupled with its essential
    usefulness to the well-being of our Nation. In a few words we are an
    agency through which the local people may speak and act jointly on all
    flood control, bank stabilization, navigation, and major drainage
    problems.
        Never before have we seen our Nation faced with such huge public
    debts and budget deficits as we do today. In our daily life we are made
    aware of the gut-wrenching sadness of seeing homes foreclosed and jobs
    disappear. We know all those things but we also know that the country
    that is and has been for generations the bright light of freedom and
    prosperity, must not and cannot let its infrastructure deteriorate and
    fall into ruin; neither can we allow one of our vital forms of
    transportation to become underutilized or useless due to the lack of
    proper and necessary maintenance.
        Unfortunately today, as usual, you are considering a budget request
    from the executive department that has insufficient funding to prevent
    either of the cases just outlined. The only recourse we have is to
    request the Congress do as you have always done, add the necessary
    supplemental funds to protect the lives, property, and livelihoods of
    the citizens of this great river basin.
        Earlier in this statement it was said that the Mississippi River
    Watershed that provides drainage for 41 percent of the Nation, moves
    almost 1 billion tons of commodities--60 percent of our grain, 25
    percent of our petroleum products and 20 percent of the coal to fire
    our powerplants, was the greatest watershed on the planet because of
    its size coupled with its usefulness. Useful because the river has been
    controlled and improved beginning with the first levee for flood
    protection built in New Orleans, Louisiana, in 1717. Levees came early
    because ``Without flood control, nothing else matters.'' Over the years
    the Congress, the Corps of Engineers and the local people have worked
    together to make the Mississippi River Watershed, stretching from New
    York in the east to Montana in the west and from the Canadian border to
    the Gulf of Mexico, the greatest and the envy of the developed world.
        Our great country has always been a maritime nation, almost totally
    dependent during the earliest years on the oceans and unimproved
    waterways to move our commerce including, at that time in history, our
    people. Westward expansion used the rivers whenever possible, and many
    of the earliest construction projects in the new country were the
    building of canals connecting commercial waterways. Our national
    security and economic well-being has always, now more than ever,
    depended on the seas, lakes, and inland waterways that give us
    accessibility to every corner of our great Nation.
        All improvements, great or small, sooner or later require
    maintenance. We have been too lax in this great country with
    maintaining and improving our basic forms of transportation. We have
    not built new airports to keep up with the demand of our growing
    population nor have we improved and properly maintained those that we
    have. Our system of railroads is in such bad shape that we no longer
    even attempt to move human cargo by train except for a very few small,
    densely populated areas of the country. The interstate highway system
    that we constructed more than 50 years ago was a great source of pride,
    but we failed again to properly maintain it, and now we are paying a
    tremendous price to keep it functioning. A great majority of our
    waterway improvements, including our locks and dams and flood control
    facilities, are well past their design life. Soon we will find
    ourselves in emergency mode, repairing and replacing failures. This
    will be very expensive and an economic disaster. Farmers will be
    especially hard hit, with no efficient and economical way to transport
    their crops to international markets.
        Our principal, but certainly not our only concern, is with the
    funding of the Mississippi River and Tributaries (MR&T) project. This
    is a very unique project that was conceived and developed with
    consideration for the functional relation between all its parts and the
    whole. It is a project that covers all aspects of development in the
    Mississippi River valley below the vicinity of Cape Girardeau,
    Missouri, from flood control to navigation to environmental protection
    and enhancement. The MR&T project was well-planned, well-organized,
    well-engineered, well-constructed and, until recently, well-maintained.
    Unfortunately it is not yet completed, and adequate funding from the
    Congress is imperative if it is to be completed and properly
    maintained. If, because of inadequate funding and uncalled for delays
    due to countless and repetitive studies and misguided lawsuits by the
    misnamed and misled environmentalists, the lower reaches of the
    Mississippi River are not usable by commercial boats and barges and
    sea-going ships, then no amount of improvement on the upper reaches of
    the Mississippi River can have any favorable effect. ``Without flood
    control nothing else matters.''
        One of the major opportunities that we have to increase the wealth
    of our Nation is to continue the improvement and development of our
    major river systems. As noted, the major system is the Mississippi
    River Watershed. For that reason we are here today to request that the
    Congress do what it has done since 1928. That is, to appropriate
    sufficient supplemental funds, allowing COE to continue what the
    Congress has directed them to do. We are not talking about ``earmarks''
    or pork barrel politics. We are talking about funds to keep our
    navigation channels open and to provide necessary dredging in order
    that our smaller but no less critical ports may continue to function;
    funds to continue the ongoing work to bring miles of levee sections
    that are deficient in either grade or section up to the design required
    to protect our citizens against the ``greatest possible flood''; and
    funds to bring our bank stabilization program to completion in the most
    efficient manner, both economically and environmentally.
        The Executive Committee of the Mississippi Valley Flood Control
    Association has carefully studied the President's budget request for
    fiscal year 2012. We have arrived at the unanimous conclusion that the
    required appropriation for the MR&T project is $335 million, just to be
    reasonably assured that the goals of navigation, flood control, levee
    improvement and bank stabilization are met; nothing more, nothing less.
        In a special message to the Congress on flood control in the
    Mississippi Basin, dated July 16, 1947, President Harry S Truman began
    with the following in his opening sentence, ``the major opportunity of
    our generation to increase the wealth of the Nation lies in the
    development of our great river systems.'' Later on in his message
    President Truman used these words, ``we must never forget that the
    conservation of our natural resources and their wise use are essential
    to our very existence as a Nation. The choice is ours. We can sit idly
    by--or almost as bad, resort to the false economy of feeble and
    inadequate measures--while these precious assets waste away. On the
    other hand, we can, if we act in time, put into effect a realistic and
    practical plan which will preserve these basic essentials of our
    national economy and make this a better and a richer land.'' President
    Truman was speaking about the MR&T project in this last quote. And
    these words are still true today. On July 31, 1947, President Truman
    approved appropriations bills, including supplemental provisions for
    flood control on the MR&T project in fiscal year 1948 of $250 million.
    And that was in 1948 dollars.
        We have attached a detailed breakdown of the requested funds of
    $355 million for the MR&T project for fiscal year 2012.

       MISSISSIPPI VALLEY FLOOD CONTROL ASSOCIATION FISCAL YEAR 2012 CIVIL
     WORKS REQUESTED BUDGET MISSISSIPPI RIVER AND TRIBUTARIES APPROPRIATONS
                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                Fiscal year
                          Project/study                        2012 request:
                                                               $335 million
    ------------------------------------------------------------------------

                       MR&T INVESTIGATIONS

    Collection and study of basic data......................             500
    Memphis Metro Storm Water Management, TN [FEAS].........             100
                                                             ---------------
          TOTAL INVESTIGATIONS..............................             600
                                                             ===============
                        MR&T CONSTRUCTION

    Atchafalaya Basin, LA...................................           6,300
    Atchafalaya Basin Floodway System, LA...................           1,900
    Channel Improvement, AR, IL, KY, LA, MS, MO, AND TN.....         111,570
    Mississippi River Levees, AR, IL, KY, LA, MS, MO, AND TN          58,980
    Yazoo Basin, Upper Yazoo Projects.......................           5,000
                                                             ---------------
          TOTAL CONSTRUCTION................................         183,750
                                                             ===============
                        MR&T MAINTENANCE

    Atchafalaya Basin, LA...................................           1,468
    Atchafalaya Basin Floodway System, LA...................              42
    Baton Rouge Harbor, Devils Swamp, LA....................              48
    Bayou Cocodrie & Tributaries, LA........................           2,145
    Bonnet Carre, LA........................................          61,230
    Channel improvement, AR, IL, KY, LA, MS, MO, AND TN--             32,032
     TOTAL..................................................
    Channel Improvement--Dredging...........................          21,141
    Channel Improvement--Revetments and Dikes...............          48,398
    Greenville Harbor, MS...................................              18
    Helena Harbor, AR.......................................             122
    Inspection of completed works...........................           1,350
    Lower Arkansas River, North Bank, AR....................             223
    Lower Arkansas River, South Bank, AR....................             150
    Lower Red River--South Bank Levees......................             377
    Mapping.................................................           1,202
    Memphis Harbor McKellar Lake, TN........................           1,394
    Mississippi Delta Region--Caernarvon, LA................             438
    Mississippi River Levees, AR, IL, KY, LA, MS, MO, AND TN           7,951
    Old River control structure, LA.........................           6,954
    Red-Ouachita Basin Levees, AR and LA....................  ..............
    St. Francis River and Tributaries, AR AND OR............           4,174
    Tensas Basin, Boeuf and Tensas Rivers, AR AND LA........           1,884
    Tensas Basin, Red River Backwater, LA...................           2,473
    Vicksburg Harbor, MS....................................              32
    Wappapello Lake, MO.....................................           4,167
    White River Backwater, AR...............................             896
    Yazoo Basin, Arkabutla Lake, MS.........................           4,606
    Yazoo Basin, Big Sunflower (Bogue Phalia), MS...........             185
    Yazoo Basin, Enid Lake, MS..............................           4,386
    Yazoo Basin, Greenwood, MS..............................             807
    Yazoo Basin, Grenada Lake, MOS..........................           4,511
    Yazoo Basin, Main Stem, MO..............................           1,019
    Yazoo Basin, Sardis Lake, MS............................           5,687
    Yazoo Basin, Tributaries, MS............................             967
    Yazoo Basin, Will M. Whittington Auxiliary Channel, MS..             378
    Yazoo Basin, Yazoo Backwater, MS........................             517
    Yazoo Basin, Yazoo City, MS.............................             731
                                                             ---------------
          TOTAL, MAINTENANCE................................         150,650
                                                             ===============
          TOTAL, MR&T.......................................         335,000
    ------------------------------------------------------------------------

                                     ______

      Prepared Statement of the Missouri River Association of States and
                                     Tribes

        We are requesting your support for three items in the fiscal year
    2012 budget for the U.S. Army Corps of Engineers (COE), related to the
    Missouri River Basin. These include:
      --$5 million to continue funding for the Missouri River Authorized
            Purposes Study;
      --$72.888 million to continue implementation of the Missouri River
            Recovery Program; and
      --$7 million to increase the operations and maintenance budget for
            the Northwestern Division, Omaha District, for protection of
            cultural and historical sites impacted by the operation of the
            Missouri River Mainstem Reservoir System.
        The Missouri River Association of States and Tribes (MoRAST) is an
    association of representatives of the Governors of the States of
    Wyoming, Montana, North Dakota, South Dakota, Nebraska, Iowa, and
    Kansas and many of the American Indian tribes in the Missouri River
    Basin. MoRAST is interested in the proper management and protection of
    natural resources, including water resources, fish and wildlife, and
    other related issues of interest to the States and tribes in the basin,
    including cultural resources. The programs and operations of COE are
    very important to our members, especially due to the legal
    responsibilities of the States and tribes related to water and the fish
    and wildlife resources in the basin, as well as the trust
    responsibilities of COE to the tribes. The following paragraphs provide
    detailed information regarding the bases for our support of the three
    items referred to above for fiscal year 2012 budget of COE, as outlined
    below:
          Funding for the Missouri River Authorized Purposes Study
            (MRAPS).--MoRAST strongly supports the appropriation of $5
            million to continue funding for MRAPS in fiscal year 2012.\1\
            The Congress appropriated $4.483 million in fiscal year 2010.
            MRAPS was authorized to study the Missouri River Projects under
            the 1944 Flood Control Act (FCA) to determine whether changes
            to the purposes and existing Federal infrastructure may be
            warranted. The study was authorized for a total cost of $25
            million at Federal expense. This study does not duplicate any
            previous study.
    ---------------------------------------------------------------------------
        \1\ The State of Iowa does not support the continued funding of the
    MRAPS study.
    ---------------------------------------------------------------------------
          The Missouri River Basin Project (Pick-Sloan Program) envisioned
            a comprehensive system of projects and facilities in the
            Missouri River basin constructed by both the Bureau of
            Reclamation (BOR) and COE. The plan was only partially
            completed and there continue to be water needs and related
            issues in the basin, many of which are different than they were
            in 1944. This study is important for many reasons. It has been
            more than 66 years since the 1944 FCA was enacted and many
            changes have occurred. The Missouri River Mainstem Reservoir
            System continues to be operated in accordance with the 1944 FCA
            for various authorized purposes including flood control, water
            supply, water quality, irrigation, hydropower, navigation,
            recreation, and fish and wildlife. However, while the
            construction of the reservoir system and other works have
            resulted in large project benefits from some of the authorized
            purposes and much less for others, it has also created
            substantial negative impacts on the economies and resources of
            Indian tribes and others, as well as large environmental
            losses, such as wetlands and habitat for a number of native
            species, including three that are threatened or endangered.
          In summary, there have been many changes in the physical,
            economic and environmental conditions that affect the Missouri
            River and Tributaries (MR&T) projects and the basin since 1944.
            COE needs $5 million for the study in fiscal year 2012.
            However, COE has made significant progress with the
            implementation of the study with the assistance of BOR and
            other Federal agencies, as well as extensive input from States,
            tribes, stakeholders, and the general public. COE held more
            than 40 public meetings and tribal focus events throughout the
            Basin and other areas to engage the public and collect
            information. It has recently released a draft scoping summary
            report and is currently holding feedback meetings to receive
            comments on the draft report until April 30. Additional work is
            needed to complete this process and the additional data
            collection, analysis, and public engagement needed to complete
            the study. Funds should be provided so the study can
            objectively determine whether changes are needed to the 1944
            FCA in order to best meet the contemporary needs of the
            Missouri River Basin. Once the study is complete, the Congress
            can decide whether or not the law should be amended, additional
            project purposes added, and/or other changes made.
          Funding for Missouri River Recovery Program.--We strongly support
            the $72.888 million recommended in the President's budget. It
            is the minimum necessary for current year compliance with the
            Biological Opinion (BiOP). The Missouri River Recovery Program
            (MRRP) was established by COE as a collaborative program to
            protect, recover and restore the Missouri River ecosystem and
            its native species, including the endangered pallid sturgeon,
            least tern, and piping plover. This program is authorized by
            sections 3109, 3176, and 5018 of the Water Resources
            Development Act (WRDA) 2007. Support for this program is
            critical to ensure at least enough funding is available for
            compliance with the BiOP, as amended in 2003. Compliance with
            the BiOP also protects economic uses as failure to comply with
            the BiOP could require changes to reservoir operations and
            negatively impact other purposes.
          COE, various tribal, State, and Federal Cooperating Agencies and
            the Missouri River Recovery Implementation Committee (MRRIC),
            that includes these entities and various stakeholders, are in
            the process of developing a collaborative study and plan known
            as the Missouri River Ecosystem Restoration Plan (MRERP) to
            identify and guide long-term actions required to restore
            ecosystem functions, mitigate habitat losses, and recover
            native fish and wildlife on the Missouri River, while seeking
            to balance social, economic, and cultural values for future
            generations.
          In addition to recovery and mitigation projects on the Missouri
            River Mainstem, a project to provide for fish passage through a
            diversion dam on the Yellowstone River near Intake, Montana, is
            especially important to the recovery of the endangered Pallid
            Sturgeon, as it will open up a large segment of free-flowing
            river for the pallid to spawn in. Work on this important
            tributary project is underway and is being implemented through
            a cooperative effort of BOR, COE, U.S. Fish and Wildlife
            Service (FWS), and the State of Montana.
          On a related matter, we also support removal of the prohibition
            on Federal reimbursement of travel expenses for non-Federal
            members of the MRRIC to attend its meetings. No new funds are
            required for this action as it can be funded through the MRRP,
            but this action is needed to improve the functionality and
            chances for success of the MRRIC. The basin covers one-sixth of
            the continental United States and travel to meetings in various
            parts of the basin is expensive.
          Section 5018 of WRDA 2007 authorized the creation of MRRIC, but
            prohibited Federal reimbursement of travel expenses for non-
            Federal members of the committee. The same section of WRDA 2007
            also authorized the development of a MRERP, which is a part of
            the MRRP. The failure to reimburse travel expenses hinders
            participation, prevents balanced representation by tribal,
            State, and nongovernmental members on the committee and is a
            hardship for some MRRIC members. Lack of travel reimbursement
            also makes participation by States and tribes difficult as
            cooperating agencies for the MRERP study, especially during
            these trying economic times and budget shortfalls for States,
            tribes, and others.
          This issue could be resolved by either the inclusion of a
            provision in the fiscal year 2012 budget bill to allow travel
            reimbursement for attendance at MRRIC meetings or by amending
            section 5018 of WRDA 2007 in a new WRDA bill to remove the
            prohibition on Federal travel reimbursement. In any event, this
            issue needs to be resolved soon so that all members can
            participate, receive the background information, interact with
            other participants, and provide meaningful recommendations to
            COE and other agencies regarding MRRP as may be appropriate
            through the MRRIC process.
          COE has a unique trust responsibility to the 28 Missouri River
            Basin tribes and their participation in both MRRIC and MRERP
            activities is vital to the success of efforts to restore the
            ecosystem of the Missouri River consistent with the social,
            cultural and economic needs in the Basin. The failure to fund
            travel for the tribes to attend these meetings will not save
            money and may result in delay or the need for more extensive
            government-to-Government consultations if the tribes are not
            able to participate adequately during the course of efforts by
            MRRIC to make recommendations to COE regarding recovery
            programs and the development MRERP.
          In summary, funding MRRP at a minimum of $72.888 million for
            fiscal year 2012 is essential to ensure compliance with the
            amended BiOP on the Missouri River and to implement the project
            on the Yellowstone River near Intake, Montana, both of which
            are of critical importance to the recovery of endangered
            species and the restoration of the ecosystem. We also support
            removal of the prohibition on Federal reimbursement of travel
            for members of MRRIC to meetings of the committee to allow for
            full participation of tribal, State and stakeholder members to
            the committee.
          Funding To Protect Tribal Cultural Resources.--It is requested
            that the Congress appropriate an additional $7 million for
            fiscal year 2012 for the Omaha District, Northwestern Division,
            COE for the stabilization of cultural and historic sites that
            continue to be negatively impacted by the operation of the
            Missouri River Mainstem Reservoir System. Funding for the
            protection of cultural and historic sites within the Omaha
            District has remained at $3 million for the past several years.
            Past funding through COE operation and maintenance budget has
            been woefully inadequate to address the ongoing damage to sites
            from operation of the Missouri River Mainstem Reservoir System.
          COE has identified more than 400 historic and cultural sites
            protected by Federal law that will be potentially damaged by
            the current Annual Operating Plan, and the tribal nations in
            the Missouri River Basin have identified many more sites that
            could be impacted. However, there have only been funds to
            mitigate damage to a few sites each year. COE has a unique
            trust responsibility to the 28 Missouri River Basin Tribes
            arising from the government-to-Government relationship between
            the tribes and the U.S. Government, as well as an obligation
            under section 106 of the National Historic Preservation Act,
            applicable Executive orders, and other Federal laws, which
            require COE to either halt any Federal undertaking that will
            damage or destroy sites protected, or to mitigate the potential
            damage.

                                    SUMMARY

          We believe each of these programs is essential to the success of
            efforts to properly manage and protect the natural resources of
            the Missouri River Basin, satisfy COE trust responsibilities to
            the Indian Nations in the basin and operate its projects in
            accordance with applicable Federal law. We would appreciate
            your help in providing adequate funding for these important
            programs and projects. Please let David Pope, MoRAST executive
            director, or Chairman Sando know if you have questions.
                                     ______

       Prepared Statement of the Moss Landing Harbor District, California

        Mr. Chairman and members of the subcommittee: Thank you for the
    opportunity for me, Linda McIntyre, as harbormaster and general manager
    of the Moss Landing Harbor District in California to submit prepared
    remarks to you for the record in support of the fiscal year 2012 Energy
    and Water Development Subcommittee regular appropriations measure. I
    appear on behalf of the board of harbor commissioners, the fishermen,
    oceanographers and scientists, and the citizens and marine dependent
    businesses of the Monterey community which we represent.
        We respectively request an additional $3.2 million for the U.S.
    Army Corps of Engineers (COE) operations and maintenance general
    account for scheduled authorized Federal channel maintenance as
    unanimously recommended by the California Marine Affairs and Navigation
    Conference.
        The board of harbor commissioners recognizes and expresses its
    gratitude to the Honorable Dianne Feinstein, a member of this
    subcommittee, and the Honorable Barbara Boxer, chairman of the
    Committee on Public Works and Transportation, and the other members of
    this subcommittee and staff, for their past efforts in funding
    operations and maintenance of the Moss Landing Harbor Navigation
    Project for more than 60 years. This authorized project is of
    significant national economic benefit and critical economic importance
    to the commercial fishing industry, university and private
    oceanographic research fleet, and Monterey County in the central coast
    region of the State of California.
        We are equally grateful to the chairman and the other members of
    this subcommittee and staff, for their continuing efforts in funding
    critically needed operations and maintenance funding of all our
    Nation's ports both large and small without discrimination.
        Moss Landing Harbor is perhaps best known as the gateway to the
    unique Monterey Bay with its Submarine Canyon and National Marine
    Sanctuary and the homeport for its oceanographic research tenants,
    including California State University Marine Consortium, Stanford
    University Hopkins Marine Institute (well-known to John Steinbeck fans
    of Cannery Row) and the Monterey Bay Aquarium Research Institute
    (MBARI) an affiliate of the Monterey Bay Aquarium--America's most
    visited cultural and educational site.
        Without continued maintenance dredging of the Federal channel at
    roughly 3-year intervals, none of these scientific, educational,
    environmental research, and vital commercial fishing activities could
    continue uninterrupted. The year 2012 represents the next required
    scheduled triennial dredging event. For this purpose we are requesting
    the addition of $3.2 million to the President's budget. We are advised
    COE's San Francisco District has the capability to execute this
    maintenance dredging cycle.
        For those who are unfamiliar with the geography of Monterey Bay and
    surrounding region, we invite you to come visit. Moss Landing is
    strategically situated approximately mid-point between Santa Cruz and
    Monterey Harbors on Monterey Bay. It shares a common entrance with
    Elkhorn Slough, a critical estuary of national significance.
        Construction of the project for navigation, Moss Landing, Monterey
    Bay, California was authorized in the Rivers and Harbors Act of March
    2, 1945, at an authorized depth of 15 feet. The congressional findings
    reflected the national security and postwar economic development
    interest in maintaining and increasing commercial fish production. In
    the lexicon of national economic development. The same is true today.
        In order to help harmonize the authorization and appropriations
    processes in the future and introduce an element of long-term planning
    and budgeting stability at COE's district level, we are seeking
    completion of a long-term dredged material management plan that would
    benefit both us and the Federal Government, and save everyone,
    especially the beleaguered U.S. taxpayer, money.
        That plan would also continue our use of several grandfathered
    dredged material disposal sites as the same land and seaward geographic
    factors that make us an indispensable element of the Monterey Bay
    ecosystem also limit our options for disposal with few if any landside
    alternatives.
        In the final analysis we are just a small harbor with a big problem
    not of our creation in search of a comprehensive solution. The first
    step is funding the long overdue maintenance. We cannot wait another
    year.
        We look forward to appearing before this subcommittee on future
    occasions to provide progress reports concerning our uphill and
    upstream efforts to both preserve navigation and improve the
    environment in Moss Landing Harbor, California.
        I am prepared to supplement my prepared remarks for the record in
    response to any questions that the chair, subcommittee members, or
    staff may wish to have me answer.
        Thank you Mr. Chairman and members of the subcommittee.
                                     ______

             Prepared Statement of the Ohio Lake Management Society

        To the honorable members of the Senate Subcommittee on Energy and
    Water Development: I am writing in support of continued and expanded
    appropriations for the United States Army Corps of Engineers (COE)
    Aquatic Plant Control and Research Program (APCRP). I write on behalf
    of the membership of the Ohio Lake Management Society, a citizen based
    nonprofit organization, founded in 1986, with mission to promote
    research and comprehensive management of lakes and reservoirs in Ohio.
        For the past three decades the Ohio Environmental Protection Agency
    has repeatedly reported to the Congress, in their Clean Water Act
    section 305(b) and section 314 documents, that the condition of Ohio's
    public lakes is being negatively impacted by nuisance growths of
    aquatic weeds, many of which are exotic species not native to the
    State. In 1996, the last year such data are available, the Ohio EPA
    reported in their Ohio Water Resource Inventory that recreation
    opportunities in 32 percent of 222 accessed public lakes in Ohio were
    threatened by nuisance growths of aquatic weeds. These data indicate
    that there exists a significant and widespread problem with aquatic
    weeds currently not addressed by Clean Water Act regulations passed by
    the Congress in 1972.
        Public lakes in Ohio are used by millions of citizens each year for
    recreation, thus the impact of excessive growths of aquatic weeds on
    recreational opportunities is significant. The Ohio Department of
    Natural Resources, in their 2008 Statewide Comprehensive Outdoor
    Recreation Plan, reported that 33 percent of households representing
    more than 11 million Ohio citizens enjoy recreational boating, an
    activity that demands proper control and management of aquatic weeds.
        The extensive problems with aquatic weeds that are being faced in
    Ohio are expected to be present in lakes nationwide, thus impacting
    recreation for millions of Americans who enjoy boating, fishing, and
    swimming. Given this situation, it is inappropriate that the Congress
    would eliminate funding for COE's Aquatic Weed Research program, which
    provides useful scientific information that affects so many citizens of
    the Nation, for so few per capita dollars spent.
        It is imperative that the United States Senate continue to fund the
    APCRP program so that scientific research from multiple perspectives
    (chemical, biological, mechanical, etc.) is conducted to determine the
    most cost effective ways to control the multitude of aquatic weed
    species, many exotic species, that now overpopulate the Nation's
    recreational lakes. The information gained from COE research is
    important to those that manage lake water quality to help them select
    the best aquatic weed control option for their specific lake situation.
    The data from the APCRP program are not only of value to State and
    local government agencies that manage public lakes, but also to the
    nationwide network of consulting firms that provide lake management
    services to citizens that own private lakes, many of which have
    problems with too many aquatic weeds.
        In conclusion, on behalf of the millions of citizens in Ohio that
    enjoy recreational activities on lakes and reservoirs, I urge you to
    support continued and expanded funding for the APCRP program to conduct
    research on the control of aquatic weeds at a minimum level of $4
    million per year. This action by the United States Senate will help
    ensure that COE will continue to provide vital scientific data to those
    that manage and control nuisance growths of plants in our Nation's
    waterways.
                                     ______

          Prepared Statement of the Stockton Port District, California

        We wish to thank you for this opportunity to provide congressional
    testimony by the Port of Stockton, California on behalf of its
    appropriations requests. The Stockton Port District is a California
    public agency created by the California State Legislature. The port is
    approaching its 80th year of operations.
        The port is located in the city of Stockton, California, which has
    an unemployment rate more than 21 percent, and nearly 18 percent for
    San Joaquin County (Source.--February 2011 data, California Employment
    Department). The port is the economic portal for the San Joaquin Valley
    and beyond. It is considered by many to be the economic engine that
    generates jobs and income for the Central Valley and the region.
        The port suffered significantly during the economic downturn but it
    is recovering rapidly with strong growth and jobs creation. We have
    more than 1,200 acres available for development, which is almost unique
    among California ports. In calendar year 2010, the Port achieved a
    throughput of 3.83 million tons. With the introduction of iron ore
    exports in January 2011, we expect total throughput to double in the
    very near future and expect export tonnages to surpass import tonnages
    within 2 years. We are expanding our rail capacity right now and during
    the next fiscal year, starting on July 1, 2011, we will spend another
    $1 million as well with a goal of being able to increase the throughput
    capacity of iron ore and coal unit trains from two per week to seven
    per week. This would equate to more than 3 million tons per year and
    provide for an export gateway to Asia that is only available at few
    ports situated on the west coast. For our bulk commodities, the
    availability of a year-round authorized channel depth of 35 feet or
    deeper is a very critical factor. Currently our iron ore ships have to
    top off downstream in deeper channels before export to Asia. It is
    inefficient. Nevertheless, we are rapidly fulfilling the President's
    National Export Initiative.
        The port and its waterway are of national significance as a
    ``Marine Highway'' (M-580), a recent designation by the Department of
    Transportation (DOT). This is 1 of 18 marine highway corridors
    nationally. Additionally we are officially designated a ``strategic
    corridor of the future'' by DOT. The port is also designated as a
    reserve facility by the Department of Defense in time of need.
        Logistically, the port has direct access to two transcontinental
    rail lines. Direct rail-to-ship facilities exist at the port which is
    nearly unique for California ports. We are within 1 mile of Interstate
    5, which serves the entire west coast, north to south.
        We are highlighting and updating the three priority projects in our
    appropriations requests for your consideration.
      --The San Joaquin--Stockton Project is under the operations and
            maintenance budget of the U.S. Army Corps of Engineers (COE).
            It is our most urgent and highest-priority request. For the
            past several years, COE has not been able to maintain the John
            F. Baldwin and Stockton Ship Channels to the federally
            authorized depth of 35 feet on a year-round basis. We have been
            restricted to 31-33 foot channel depths for many months and
            have been unable to do any dredging. This consistent problem
            stems from insufficient funding, unpredictable shoaling
            locations, and a very short dredging window. Unfortunately, our
            only dredging window closes just before the winter when storm
            flows create shoaling at unpredictable locations in the
            channels. This has impaired the efficient movement of commerce
            and sustained employment for the port, its tenants, and the
            region.
        We have requested the COE for maintenance dredging to 37 feet plus
    1-foot overdraft to insure a year-round controlling depth of 35 feet.
    We believe COE supports our case through its expressed budget
    capabilities to the Congress. The port is requesting $12.5 million for
    fiscal year 2012. The President's fiscal year 2012 budget contains only
    $3.7 million for this project, which is not enough to assure a year-
    round authorized depth. Bulk commodities vessels are very sensitive to
    any loss of authorized depth; shippers would incur several hundred
    thousand dollars of losses per vessel for each foot of channel depth
    blocked by shoaling.
      --The San Francisco Bay to Stockton Channel Deepening Project is in
            the Construction General Budget of COE. This project would
            deepen the John F. Baldwin Channel to 45 feet and the Stockton
            Ship Channel to 40 feet. Our fiscal year 2012 request is for
            $2.5 million to keep pace with a State of California
            construction award of $17.5 million toward the non-Federal
            share of the project. This State construction grant expires in
            calendar year 2013 if construction is not started. No funds are
            shown in the President's budget for fiscal year 2012. This
            deepen marine highway project would significantly increase
            goods movement efficiencies, especially iron ore and other bulk
            exports, increase employment in an area where unemployment
            rates are more than twice the national rate, and keep thousands
            of trucks off of congested roadways, especially I-880, I-80, I-
            580, and I-205. One ship utilizing the ship channel can take
            approximately 1,300 trucks off of congested highways between
            the Central Valley and the San Francisco Bay Area. The economic
            and environmental benefits, especially in air quality, are very
            robust.
        A preliminary economic analysis by COE show a conservative National
    Economic Development (NED) average annual benefits of $73.5 million for
    this project. Not all the commodity movements, especially calendar year
    2011 iron ore exports, are included in this preliminary analysis. A
    very robust and positive benefit--cost ratio is expected once the NED
    costs are prepared. The Stockton Ship Channel is the primary access
    route for waterborne shipping from and into the Central Valley and
    beyond.
      --The Rough and Ready Island Storm Water Project would be in the
            Construction General Budget of COE. This project would replace
            an obsolete storm water system and include drainage detention
            and lift facility on Rough and Ready Island. The project would
            also reduce environmental problems, increase flood protection,
            and create more usable land for development on the island.
            Rough and Ready Island is one of the State's last remaining
            large parcels of industrial property available for immediate
            development. The amount of $3 million is requested and is
            authorized pursuant to the Water Resources Development Act of
            2007, Public Law 110-114. The project can be constructed within
            a short time period and benefit employment in the immediate
            area experiencing a very high rate of unemployment.
        We thank you for your consideration for the Port of Stockton
    requests.
                                     ______

            Prepared Statement of The Little River Drainage District

        Dear Senator Feinstein: My name is Dr. Sam M. Hunter, DVM of
    Sikeston, Missouri. I am a veterinarian, landowner, farmer, and
    resident of southeast Missouri.
        I am the president of The Little River Drainage District, the
    largest such entity in the Nation. Our District serves as an outlet
    drainage and flood control District to parts of seven counties in
    southeast Missouri. We provide flood control protection to a sizable
    area of northeast Arkansas as well. Our District is solely tax
    supported by more than 3,500 private landowners in southeast Missouri.
        My remarks will be directed toward the Mississippi River and
    Tributaries (MR&T) project and the St. Francis River Basin portion of
    the MR&T. Those funds when properly expended are investments yielding a
    return of substantial benefits to the American taxpayer throughout this
    Nation. They are used to prevent flooding to much of our valuable
    farmland, to industrial sites, and to upgrade our ever aging locks and
    dam system on our navigable streams which will prevent unscheduled lock
    closures, modernize our hydro-electric plants, and restore some of our
    environmental assets. MR&T authorized by the Congress in 1928 and still
    not completed is returning back to our Nation more than $25 for every
    $1 expended. This can be a job creating project for our Nation each
    year.
        We are fully aware of the financial situation of our Nation and we
    must all learn to do more with less and strive to reduce out national
    debt, balance the budget, and create more jobs for our citizens. There
    are projects and programs which are funded 100 percent or cost shared
    by our national treasury which need to be eliminated or at least
    reduced in scope. However, the MR&T project is not one of them. I will
    point out for you the reasons why.
      --This project has paid back to our Treasury more than $25 for every
            $1 invested for damages prevented and benefits derived.
      --The project was authorized by the Congress almost 90 years ago. Our
            Nation made a commitment to our citizens to improve a very
            valuable resource of our Nation and then maintain it. We must
            keep that commitment.
      --Investing and making funds available for the MR&T project will
            create jobs, and it will bring additional funds into our
            treasury.
      --It is the most environmental friendly form of transportation in our
            Nation.
      --It is the most fuel-efficient means of moving commodities. For
            instance consider 1 gallon of fuel moves 155 tons of freight by
            truck; 413 tons by rail; and 576 tons by water.
      --It serves more than 75 percent of the population of this Nation and
            touches 36 States.
      --It provides a means for our commodity producers and manufacturers
            to compete fairly in a global market.
      --It provides protection from flooding to the many people who live
            along the Mississippi River and its tributaries.
      --It provides much needed energy from hydropower and provides many of
            our cities with drinking water.
      --It is used extensively each year for recreational purposes such as
            boating, camping, fishing, sightseeing, and the like.
        The above is a short list of the benefits of the MR&T project which
    is a line item in the budget. This administration and administrations
    for the past 30 years each year submit budgetary amounts which are not
    sufficient to adequately maintain the channel as well as the locks and
    dams of which some are more than 75 years old. We must invest and we
    must improve this vital part of our infrastructure. One lock failure
    upstream can have a devastating effect downstream for each and every
    port and other users of this system.
        We currently spend less than $6 billion annually for maintenance
    and construction on our major waterways system whereas China and Brazil
    are spending $15 and $30 billion annually to modernize and expand
    theirs respectively. We must close that discrepancy so we can compete
    on the open markets.
        There is $210 million in the President's budget for fiscal year
    2012 for this project. This is totally unacceptable. This amount might
    pay the salaries of current employees without layoffs. We ask you to
    support funding of $335 million for fiscal year 2012 which will provide
    some funds for maintenance and a small amount for new construction. The
    Corps of Engineers (COE) capability is $550 million. The overall COE
    budget is less than $5 billion yet it is estimated we need $110-$200
    billion over the next 20 years just to modernize and keep our waterway
    system functional.
        Further, I would be remiss to not mention the hardships and lengthy
    delays due to the restrictive nature of policies and regulations being
    implemented by the Environmental Protection Agency (EPA) and other such
    agencies. EPA needs to be reduced in authority and the powers they have
    been asserting the past few years. Some of the policies and
    restrictions they are implementing are detrimental to the progress our
    Nation needs to be making. The delays, lengthy reviews, and unnecessary
    requirements are costly and causes many worthwhile projects from being
    completed.
        Also we ask you to review the mission and purposes of Federal
    Emergency Management Agency. The nationwide re-mapping of flood plains
    and zones is costly and having an adverse impact on those who live
    within our delta areas and who are protected by a well maintained levee
    system. Recent concessions made by Director Fugate will help but much
    more is needed.
        I wish to thank you very much for your time and kind attention and
    for taking the time to review the above. We would be very appreciative
    of anything this subcommittee can do to help us improve our
    environment, improve our livelihood, and improve the area in which we
    live and work which ultimately is good for America. We are also very
    appreciative of all this subcommittee has done for us in the past. We
    trust you will hear our pleas once more and act accordingly.
                                     ______

                  Prepared Statement of The Nature Conservancy

        Mr. Chairman and members of the subcommittee: Thank you for the
    opportunity to present The Nature Conservancy's testimony on the fiscal
    year 2012 appropriations for the U.S. Army Corps of Engineers (COE) and
    Bureau of Reclamation. The Nature Conservancy is a nonprofit
    organization dedicated to the conservation of biological diversity. Our
    on-the-ground conservation work is carried out in all 50 States and in
    30 foreign countries and is supported by approximately 1 million
    individual members.
        We recognize the challenges of working in a constrained fiscal
    environment and that the Congress is making appropriation decisions
    differently than in years past. We also recognize the continued
    importance of our water resources and the benefits those resources
    provide to people, our economy, our environment, and the quality of
    life in our communities. Our focus is on the programs and investments
    needed to ensure those benefits are enhanced today and made sustainable
    for tomorrow.
        The Nature Conservancy supports the overall approach of building
    sustainability into the development and management of our Nation's
    water infrastructure, including the ecosystem restoration projects
    essential to ensuring that sustainability. These ecosystem restoration
    projects pay dividends through higher-quality water, natural flood
    control, sustaining commercial fisheries, and supporting economically
    important outdoor recreation; with impacts stretching out for decades
    to come, the projects and proposals that follow represent a very high
    return on investment.

                           SUSTAINABLE RIVERS PROJECT

        Sustainable Rivers Project (SRP) is an initiative launched by COE
    in partnership with the Conservancy to update decades-old water
    management practices to meet society's needs today and in the coming
    decades. The SRP is developing and demonstrating innovative approaches
    to provide for, and improve, water supply and flood risk management
    while restoring critical ecosystems. The President's budget includes
    two specific initiatives that support these efforts:
          Global Change Sustainability.--This project will allow COE to
            advance a variety of new practices through several initiatives,
            including SRP, working with State and other Federal agencies to
            develop a national strategy to update drought contingency plans
            and other initiatives to ensure a sustainable water supply and
            adapt to projected changes in precipitation patterns and other
            outyear conditions impacting the Nation's water supplies. The
            Conservancy supports the $10 million in the President's budget
            for this program.
          National Portfolio Assessment for Reallocations.--Launched in
            fiscal year 2008, this assessment is a national effort to learn
            from past water management techniques and then apply the
            lessons learned more broadly. Part of this effort will develop
            new methods and tools that can be transferred to COE projects
            nationwide. The Conservancy supports the $571,000 included for
            this program.

                         CORPS CONSTRUCTION PRIORITIES

        Hamilton City Flood Damage Reduction and Ecosystem Restoration.--We
    were pleased to see Hamilton City selected as 1 of 2 new construction
    starts in COE's fiscal year 2012 proposed budget. This project,
    developed with substantial assistance by the Conservancy, will increase
    flood protection for Hamilton City, California, while restoring
    approximately 1,500 acres of riparian habitat. Appropriations for the
    first phase will initiate construction of approximately 2 miles of
    levee, removal of one-half of the existing levee, and roughly one-third
    of the habitat restoration. The Conservancy strongly supports the $8
    million proposed in fiscal year 2012 to complete the first phase of
    construction.
        South Florida Ecosystem Restoration Program.--COE flood control
    projects, coupled with agricultural and urban development, have
    degraded the Everglades, one of the most diverse and ecologically rich
    wetlands ecosystems in the world. Water Resources Development Act
    (WRDA) 2007 authorized construction of the first projects under the
    Comprehensive Everglades Restoration Plan,and we encourage funding the
    Indian River Lagoon South, Picayune Strand, and the Site 1 Impoundment
    projects. The Conservancy supports the $162,724,000 proposed for the
    South Florida Ecosystem Restoration Program in fiscal year 2012.
        Upper Mississippi River Environmental Management Program.--
    Authorized in 1986, this program supports coordinated habitat
    rehabilitation and enhancement projects in the Upper Mississippi River
    system. Over the 25 years of the program, COE has completed more than
    54 projects, benefiting more than 94,000 acres of aquatic and
    floodplain habitat. Currently, 22 projects in the program are in
    planning, design, or under construction. Completion of these projects
    will benefit an additional 70,000 acres of aquatic and floodplain
    habitat. The Conservancy supports the $18,150,000 proposed for the
    Environmental Management Program (EMP) in fiscal year 2012.
        Missouri River Fish and Wildlife Recovery Program.--Under this
    program, COE has completed 30 projects in the lower Missouri basin
    States to assist in the recovery of three listed species, restoring
    more than 40,000 acres of habitat. New authority was provided in WRDA
    2007 for the expenditure of funds in the upper basin States and for the
    Intake Dam project on the Yellowstone River in Montana. Construction of
    fish passage and screens at Intake Dam is a priority for the recovery
    of the endangered pallid sturgeon and other warm-water fish. The
    Conservancy supports the $72,888,000 proposed for the Missouri River
    Fish and Wildlife Recovery Program (MRRP) in fiscal year 2012,
    including funding to continue progress on the design and construction
    of fish passage and screens at Intake Dam.
        Chesapeake Bay Oyster Recovery.--Eastern oyster populations in the
    Chesapeake Bay have been decimated from historical levels by a century
    of overfishing, disease, and pollution. This project will help move the
    oyster population toward sustainable levels. The $5 million proposed
    for the fiscal year 2012 budget will create more than 60 acres of
    additional oyster habitat.
        Great Lakes Aquatic Nuisance Species Dispersal Barrier.--Invasive
    fish, plants, and invertebrates have had severe economic impacts to
    human uses and to freshwater biodiversity of the Great Lakes.
    Preventing further invasions through the waterway system is the most
    cost-effective way to protect the plethora of Federal lands and
    infrastructures threatened. The Nature Conservancy supports the budget
    request of $13.5 million in the construction account; $10,565,000 from
    operations and maintenance; and no less than $3 million in the
    Investigations account to expedite the Great Lakes and Mississippi
    River Interbasin Study.

                         CONTINUING AUTHORITIES PROGRAM

        We urge the subcommittee to continue its strong support of the
    section 1135: Project Modifications for Improvement of the Environment
    and section 206: Aquatic Ecosystem Restoration programs. Demand for
    these valuable programs continues to outstrip funding. The Conservancy
    supports adequate funding for these programs in the fiscal year 2012
    budget.
        Adequate funding will ensure support for two section 1135 projects,
    Spunky Bottoms (Illinois) and the Lower Cache River (Alaska). The
    Spunky Bottoms project is a model floodplain restoration and
    reconnection effort on the Illinois River that needs $750,000 to
    complete the Plans and Specifications phase and initiate construction.
    The Lower Cache River project seeks to restore natural meanders to the
    lower 7 miles of the river, improving bottomland hardwood forests, and
    expanding habitat for a variety of sportfish and mussels.
        The Conservancy also supports the request for $4,001,000 to
    complete design and initiate construction for a section 206 project for
    Emiquon East (Illinois), a floodplain restoration and reconnection
    project.

             U.S. ARMY CORPS OF ENGINEERS INVESTIGATION PRIORITIES

        Illinois River Basin Restoration Program.--This Federal-State
    partnership sustains the health of the entire Illinois River Basin
    through projects that restore habitats, species, and the natural
    processes that sustain them. It complements other Federal programs such
    as the Illinois Conservation Reserve Enhancement Program and
    Environmental Management Program of the Upper Mississippi, yet is
    unique in its basin-wide approach to restoration. The Conservancy
    supports the $400,000 funding proposed for this program in fiscal year
    2012.
        Puget Sound Nearshore Marine Habitat Restoration.--This study, when
    completed, will identify restoration and protection needs and
    opportunities in the nearshore regions of Puget Sound. The Sound
    supports the second-largest U.S. port (combined Ports of Seattle and
    Tacoma) for container traffic that has accounted for more than $70
    billion in foreign trade; it is an economic priority to ensure that
    Puget Sound maintains the ecological resiliency to sustain vital
    services for both people and nature. The Conservancy supports the
    proposed $400,000 in fiscal year 2012 to carry out this investigation.
        Willamette River Floodplain Restoration Study.--COE and the
    Conservancy are working together to identify ecological flow
    requirements downstream of Corps dams on the Willamette River and
    incorporate those flows into dam operations to improve fish and
    wildlife habitat and community flood protection. Additionally, this
    study will assess the potential for floodplain restoration in the
    Middle Fork and Coast Fork tributaries of the Willamette River to
    reduce flood damage while restoring natural wetlands and promoting
    ecosystem restoration. The Conservancy supports the $213,000 proposed
    in fiscal year 2012 to continue this study.
        Yellowstone River Corridor Comprehensive Study.--Funding these
    ongoing economic, fisheries, and wetlands studies will help ensure that
    the longest free-flowing river in the lower 48 States maintains its
    natural functions while supporting irrigation and other uses of its
    waters. The study will help determine the significance of the
    cumulative effects of water use on aquatic species and riparian
    hardwood forests, while guiding the establishment of beneficial
    management practices. The Conservancy supports the proposed $200,000
    for fiscal year 2012.

                             BUREAU OF RECLAMATION

        Upper Colorado River Endangered Fish Recovery and San Juan River
    Basin Recovery Programs.--These programs take a balanced approach to
    restore four endangered fish species--the pikeminnow, humpback chub,
    razorback sucker, and bonytail--that adhere to existing and State-
    specific water law while facilitating each State's development of their
    Colorado River Compact allocation. These programs implement a range of
    basin-wide strategies, including improved management of Federal dams,
    river and floodplain habitat improvement, stocking of endangered fish,
    and management of non-native fish species. The Conservancy supports the
    proposed $6.2 million in fiscal year 2012 for the two programs.
        Platte River Recovery Implementation Program.--The program helps
    restore the four endangered or threatened species in the basin--
    whooping crane, interior least tern, piping plover, and pallid
    sturgeon--while enabling existing water projects in the basin to
    continue operations. Specifically, the program is working to increase
    stream flows in the central Platte River at ecologically and
    economically important times; enhance, restore ,and protect lands for
    target bird species; and offset post-1997 depletions. The Conservancy
    supports the proposed $11,037,000 for this recovery effort in fiscal
    year 2012.
        Basin Studies and WaterSMART.--We support the request for the basin
    study programs and WaterSMART grant programs. These programs support
    sustainable water use and management by focusing on water conservation,
    reuse and recycling, and on environmental protection and restoration.
    We also support the proposed funding for the Bureau's environmental
    restoration work, including the programs in the California Bay Delta
    and Colorado River.

                           POTENTIAL ADDITIONAL FUNDS

        We recognize that previous year's appropriations for COE, including
    2010 and 2008 appropriations, have been higher than the President's
    fiscal year 2012 request. Should the subcommittee decide to appropriate
    more than the amount requested by the President, we would work with COE
    and partners to promote use of additional funds for other priority
    projects, including:
          Upper Mississippi and Illinois Navigation and Ecosystem
            Sustainability Program.--This project would begin construction
            on 11 ecosystem restoration and 5 navigation projects while
            continuing planning and design work for lock expansion on the
            Illinois and Mississippi Rivers.
          Cartersville Diversion Dam Fish Passage.--This project would
            construct a fish passage at Cartersville Dam, allowing fish,
            including the federally listed endangered pallid sturgeon, to
            reach the upstream portions of the Yellowstone River.
          Connecticut River Watershed Study.--This project will restore 410
            miles of river flow and thousands of acres of natural habitat
            in the Connecticut River Basin. The study identifies dam
            management modifications for environmental benefits while
            maintaining beneficial human uses.
          White River Basin-Wide Comprehensive Study.--This project will
            evaluate the impact of Federal impoundments, navigation, and
            water withdrawals for agriculture, power generation,
            modifications and a variety of other uses on the White River
            basin and help determine ecological and human needs.
          Big Cypress Basin Watershed Study.--This project will restore the
            natural river flow of Big Cypress Bayou to enhance the health
            of Caddo Lake and the downstream wetlands, wetlands recognized
            as globally significant by the Ramsar Convention.
          Long Island Sound Oyster Restoration.--This project will develop
            a comprehensive plan for restoring oysters and other shellfish
            in Long Island Sound to support the ecological and economic
            well-being provided by a sustainable oyster fishery.
          Lower Mississippi River Resource Assessment.--Flood control and
            drainage systems have accelerated erosion and habitat loss
            along the Lower Mississippi River and its tributaries. Working
            with the Department of Interior, the Corps will evaluate river
            management, habitat, and public access to recommend actions for
            addressing current and future needs.
          West Pearl River Navigation Study.--The aquatic communities of
            the Pearl, West Pearl, and Bogue Chitto Rivers are severely
            disrupted by old and disused navigation structures. This study
            will examine the feasibility of removing them or repurposing
            the structures to improve environmental and recreational
            conditions.
          Thames River Basin Watershed Study.--This study for the Thames
            River Basin ecosystem, including its tributaries to Long Island
            Sound, will determine the research and management measures
            necessary to improve the management of water control structures
            in the basin.
          Middle Potomac River Watershed Comprehensive Study.--This study
            will develop a comprehensive, multi-jurisdictional sustainable
            watershed management plan for the Middle Potomac River
            watershed, balancing the ecological functions and services
            provided by the river with the human demands upon it.
        We appreciate the opportunity to present our comments on the Energy
    and Water Development appropriations bill.
                                     ______

       Prepared Statement of the Ventura Harbor, Ventura Port District--
                                   California

        The President's fiscal year 2012 budget request for Ventura Harbor
    reflects a request of $2,805,000 for operation and maintenance for
    annual dredging activities within and around the Federal channel area
    of Ventura Harbor. Unfortunately, funding at that level does not
    accomplish the task.
        In fiscal year 2011, the Corps of Engineers (COE) was only able to
    complete the dredging of 300,000 cubic yards of material, leaving
    500,000 cubic yards of material not dredged, and remaining in place to
    be addressed next year. It is anticipated that more than 1 million
    cubic yards will need to be dredged in fiscal year 2012. Informal
    communications with COE suggest that fiscal year 2012 funding of
    $4,500,000 is required to meet the Ventura Port District's dredging
    requirements for the next fiscal year.
        The authorizing legislation for this request is Public Law 90-483,
    section 101. The appropriations history is:
          Fiscal Year 2004.--$2.9 million (Public Law 108-137);
          Fiscal Year 2005.--$2.9 million (Public Law 108-447);
          Fiscal Year 2006.--$2.6 million (Public Law 109-103);
          Fiscal Year 2007.--$2.6 million (Public Law 110-5);
          Fiscal Year 2008.--$3.4 million (Public Law 110-161);
          Fiscal Year 2008.--Emergency funding $5 million (Public Law 110-
            252) breakwater repairs;
          Fiscal Year 2009.--$2.8 million (Public Law 111-8);
          Fiscal Year 2010.--$6.1 million (Public Law 111-85) included
            additional funds to complete breakwater repairs; and
          Fiscal Year 2011.--$2.8 million.
        It is noted that employment associated with the commercial fishing
    industry in the Port of Ventura area is directly related to the
    dredging activities of COE. In 2010, it is estimated that 71 million
    pounds of seafood product were unloaded at facilities associated with
    the Port of Ventura, accounting for significant employment in the area.

                              DEPARTMENT OF ENERGY

                  Prepared Statement of the Altira Group, LLC

        Gentlemen: I am writing this letter in support of the Department of
    Energy Oil and Gas Research and Development Program and against the
    President's fiscal year 2012 budget request to zero out this program.
        Oil and gas is an essential part of our energy needs now and for
    the foreseeable future. As a Nation we should be supportive of efforts
    to extract and utilize our natural resources as cheaply and cleanly as
    possible. These efforts require the research and development (R&D) to
    identify new technologies and methodologies that are being actively
    supported by the Research Partnership to Secure Energy for America
    (RPSEA) program.
        The RPSEA program that administers these research dollars is
    supported with matched funding of 50 percent or more from industry and
    the technical support and liaison of thousands of scientists and
    engineers. It is an archetype for an efficient public private
    partnership and serves a unique place in fostering research at a pre-
    commercial stage in the development of technologies that are not
    supported by venture capital or industrial research programs.
        The oil and gas industry is a technologically driven industry.
    However, oil and gas companies produce oil and gas as their end
    products, not technology, and they rely heavily on outside service
    companies. (This is particularly true for the U.S. Independents who
    develop most of our reserves.) Service companies, while good at
    deploying new technologies, are not adequately addressing our need for
    technological development. In addition, universities have not coped
    well with the boom bust industry patterns and are struggling to provide
    students adequate research opportunities. RPSEA has done a nice job of
    pulling these three constituencies together for relatively low cost and
    building a forward-looking R&D structure for the country.
        Ultimately the R&D supported by RPSEA will lead to additional oil
    and gas development (and royalties to government), jobs to many of the
    providers of these technologies and ultimately greater energy security
    at a lower price.
        Please note, I am a venture capitalist (former oil and gas
    geophysicist) and a former Board Member of RPSEA. Our firm focuses on
    energy technology. Altira's portfolio companies have not received money
    from this program.
                                     ______

     Prepared Statement of the American Association of Petroleum Geologists

        To the chairman and members of the subcommittee: Thank you for this
    opportunity to provide testimony on the importance and need for strong
    Federal research and development (R&D) activity in the areas of oil and
    natural gas, coal, and geothermal technologies. These activities reside
    in the Department of Energy's (DOE) fossil energy program (oil, natural
    gas, coal, etc.) and energy efficiency and renewable energy program
    (geothermal). They are an essential investment in this Nation's energy
    security.
        The American Association of Petroleum Geologists (AAPG) is the
    world's largest scientific and professional geological association. The
    purpose of AAPG is to advance the science of geology, foster scientific
    research, and promote technology. AAPG has nearly 34,000 members around
    the world, with roughly two-thirds living and working in the United
    States. These are the professional geoscientists in industry,
    government, and academia who practice, regulate, and teach the science
    and process of finding and producing energy resources from the Earth.
        AAPG strives to increase public awareness of the crucial role that
    geosciences, and particularly petroleum geology plays in our Nation's
    economic and social fabric.
        It is widely accepted that U.S. energy supplies will come from
    increasingly diverse sources over coming decades. New and alternative
    energy sources will supplement conventional energy sources to meet the
    Nation's growing energy needs at affordable prices. Diversity in energy
    supplies enhances U.S. energy security by reducing our reliance on any
    single energy source.
        Scientific and technological advances are necessary to ensure that
    this energy diversification occurs without economically damaging
    disruptions. This is very much in the public interest and a compelling
    reason why Federal R&D investment is needed.
        What is often misunderstood, however, is that this R&D investment
    cannot be solely focused on new and alternative energy sources.
    Ensuring the uninterrupted availability of conventional energy, which
    provides the bulk of the Nation's energy today, also requires new
    scientific insights and technological breakthroughs.
        In fact, our Nation is not facing a choice between conventional and
    alternative energy sources--a choice between yesterday's energy and
    tomorrow's energy--although that is how the debate is often framed.
        Oil, natural gas, and coal currently supply 83 percent of the
    Nation's energy. These resources are the foundation of our energy
    future. Upon this foundation we are now developing and deploying new
    and alternative energy sources.
        Our Nation's R&D choices must recognize the need to keep this
    foundation strong while also developing new energy sources for the
    future. Both of these tasks require sustained R&D investment.

                    OIL AND NATURAL GAS TECHNOLOGIES PROGRAM

        AAPG strongly urges continued funding of the DOE oil and natural
    gas technologies programs, which the President has proposed for
    termination.
        Oil and natural gas supply 62 percent of our Nation's energy. Oil
    is the source of virtually all transportation fuels. Natural gas heats
    homes and businesses, generates electricity, is a chemical feedstock,
    and has potential for transportation systems. Supplying the oil and
    natural gas consumed today and in the future requires significant
    technological advancements.
        Several commonly overlooked trends in the oil and natural gas
    sectors support a Federal role in oil and natural gas technologies R&D:
      --The independent oil and gas producer is responsible for finding and
            producing most U.S. oil and natural gas resources. According to
            the Independent Petroleum Association of America (IPAA), a
            trade association, independent producers produce 68 percent of
            the Nation's oil, 85 percent of the Nation's natural gas, and
            drill 90 percent of the Nation's oil and natural gas wells. The
            median-sized independent producer is the epitome of American
            small business.
      --Independents typically work on projects that are too small for
            vertically integrated ``major'' oil and gas companies to
            develop commercially. Technology is vitally important for
            locating these resources underground, but these producers do
            not have the capacity to conduct independent research.
      --Increasingly domestic oil and natural gas production is coming from
            nontraditional (unconventional) resources, such as the Barnett
            Shale of Texas or the Bakken formation of the Willison Basin.
            These resources play a vital role in building our Nation's
            energy future, and their development requires significant R&D
            investment.
      --Federal R&D has historically provided support for the Nation's
            universities and colleges, which have proven to be a rich
            source of technological innovation. But as Federal support for
            oil and natural gas technology development has waned, so has
            the ability to conduct this type of research and train the next
            generation of U.S. scientists and engineers. There is a serious
            workforce shortage both in industry and government, and is the
            subject of a new study by the National Research Council.
        The goal of a robust Federal R&D program in oil and natural gas
    technologies is to enable and encourage the environmentally responsible
    development of the Nation's petroleum resources on behalf of the
    American people. This includes conventional oil and natural gas,
    nontraditional resources, and emerging resources, such as methane from
    methane hydrates, which according to a recent study by the National
    Research Council ``could help to provide greater energy security for
    the United States and to help address future energy needs globally.''
        We request the Subcommittee on Energy and Water Development
    appropriate $100 million for oil and natural gas technology programs to
    be administered by DOE's Office of Fossil Energy to support research
    projects that target increased production of domestic oil and natural
    gas resources.

                                  COAL PROGRAM

        The Nation's coal resources are essential to U.S. energy security.
    AAPG supports research and development funding for coal, including
    clean-coal technologies such as carbon capture and sequestration. AAPG
    urges the Congress to reject the President's proposed cuts to this
    program and provide funding of $393 million, equal to fiscal year 2010
    appropriations, for these activities.
        Again, these investments must be balanced. In evaluating the DOE
    coal program, I urge you to review the findings of the National
    Academy's report entitled ``Coal: Research and Development to Support
    National Energy Policy'', released in June 2007. The study finds that
    while there are significant uncertainties in U.S. coal reserve and
    resource estimates, there is sufficient coal at current consumption to
    last for more than 100 years.
        However, there is a real need for more ``upstream'' coal research
    to increase our understanding of the Nation's resource base. The study
    group observed that presently more than 90 percent of Federal R&D
    spending for coal is on the ``downstream'' side, focused on
    utilization, carbon capture and sequestration, and transport and
    transmission. Only 10 percent goes to resource and reserve assessment,
    mining and processing, environment/reclamation, and safety and health.

                     GEOTHERMAL ENERGY TECHNOLOGIES PROGRAM

        Geothermal energy is an important alternative energy resource that
    provides baseload power to the Nation's electrical grid. Significant
    expansion of geothermal power production may be possible through the
    development of enhanced or engineered geothermal systems, as well as
    mining heat from low-temperature, co-produced, and fluids in permeable
    sedimentary resources.
        AAPG supports the President's $101.5 million request for the DOE
    geothermal program.

                                    SUMMARY

        Our Nation has the resources and capacity for a bright energy
    future. Realizing this future requires prudent R&D investment to supply
    the conventional energy sources we will rely on in coming decades, and
    the breakthroughs in new and alternative energy sources that will power
    the future. Thank you for the opportunity to submit this testimony.
                                     ______

               Prepared Statement of the American Gas Association

                               EXECUTIVE SUMMARY

        Natural gas is America's clean, secure, efficient, and abundant
    fossil fuel.
        The Department of Energy (DOE) should include in its research,
    development, and demonstration (RD&D) portfolio energy efficiency of
    natural gas equipment in commercial, residential, and industrial
    markets.
        DOE's Building Technologies Program should spend at least $12
    million of its budget on natural gas RD&D.
        DOE's Industrial Technologies Program should spend at least $30
    million of its budget on combined-heat-and-power (CHP) RD&D (request is
    $25 million) with activities in small- (below 20 KW), medium- and
    large-scale systems.
        DOE's Transportation Technologies Program should spend at least $30
    million on natural gas vehicle RD&D.

                                  INTRODUCTION

        The American Gas Association (AGA), founded in 1918, represents 199
    local energy companies that deliver clean natural gas throughout the
    United States. There are more than 70 million residential, commercial,
    and industrial natural gas customers in the United States, of which 91
    percent--more than 64 million customers--receive their gas from AGA
    members. AGA is an advocate for natural gas utility companies and their
    customers and provides a broad range of programs and services for
    member natural gas pipelines, marketers, gatherers, international
    natural gas companies, and industry associates. Today, natural gas
    meets almost one-fourth of the United States' energy needs.
        On behalf of AGA, I urge you to support increased RD&D funding by
    the DOE on the natural gas end-use technologies, which are powered by
    an energy source that is domestically abundant, affordable, stable,
    highly efficient, and clean.
        To that end, we request a modest natural gas efficiency investment
    of $12 million in the Building Technologies Program, $30 million in the
    Transportation Program and $10 million for small-scale CHP, as well as
    supporting sufficient funding in the overall Industrial Program.
        At a time when there is growing instability in oil-producing
    regions such as North Africa and the Middle East, which has resulted in
    $100 per barrel--and rising--oil prices that threaten to derail our
    economic recovery, we believe that DOE needs to reassess its research
    and development (R&D) funding priorities. The DOE should join with us
    to develop highly efficient natural gas based appliances and systems.
    The natural gas industry, manufacturers and R&D partners will identify
    and capture financial support for this effort with 20 to 40 percent co-
    funding expected, depending on the type of R&D performed.
        Currently, DOE spends hundreds of millions of dollars yearly on
    energy efficiency research, yet very little of this is directed toward
    energy efficient natural gas products. In particular, over the past
    several years there has been almost no Federal investment in natural
    gas technologies for residential and commercial buildings, the CHP
    Program in the Industrial Technologies Program has been dramatically
    reduced, and the R&D program for natural gas vehicles was totally
    eliminated in fiscal year 2006 through 2009. At a time when the value
    of natural gas for reducing carbon emissions is being recognized as
    never before, this is misguided.
        We feel that it is way past time for the office of EERE, whose
    mandate is furthering America's energy efficiency, to re-engage in
    developing energy efficient natural gas-based technologies. Combining
    our cleanest and most-efficient fuel with new, highly efficient end-use
    technologies is the best way to ensure our economic viability in an
    increasingly carbon-constrained environment.
        Such RD&D funding support must focus on highly efficient, superior
    performance technologies in which natural gas is used directly in the
    residential, commercial, industrial and transportation markets. Using
    natural gas directly in traditional end-use applications such as home
    heating, water heating and cooking, as well as increasingly in highly
    promising new applications such as natural gas vehicles and
    distributed--on-site--power generation, can save consumers millions of
    dollars, significantly reduce carbon emissions, and, given natural
    gas's domestic abundance, enhance our Nation's energy security.
        In particular, we urge a small fraction of the funding in the
    Building Technologies Program at DOE's Energy Efficiency and Renewable
    Energy Office be dedicated to natural gas based efficiency
    technologies. A $12 million level would equate to approximately 5
    percent of the appropriations for that office in 2010 and approximately
    2 percent of the President's 2012 buildings budget request.
        Specific Building program initiatives include:
    Space Conditioning and Water Heating Efficiency and Operational
            Improvements--$2.9 Million
        This effort will focus on laboratory testing, component and
    technology development and field testing of new gas space conditioning
    technologies and systems. The water heating R&D effort will improve
    performance and cost of components and assembly/installation of
    currently available or soon-to-be available systems for domestic or
    commercial water heating.
        These efforts will be in conjunction with gas utilities working
    closely with component and equipment manufacturers. In the commercial
    sector, the space conditioning effort will focus on developing new and
    improving current gas-based thermally activated (e.g., absorption)
    systems appropriate for space cooling and humidity/indoor air quality
    control in commercial buildings, while helping alleviate peak electric
    demand constraints. Combined space/water heating systems will also be
    developed and tested through laboratory and field testing.
      --Advance energy efficient technologies and systems for space and
            water heating in existing single and multi-family residential
            buildings and the light-commercial sector.
      --Improve efficiency and reduce cost of highly efficient condensing
            gas furnaces and boilers that are poised for wider market
            adoption.
      --Optimize strategies and technologies for the control of humidity
            and indoor air quality in conjunction with gas-based space
            heating and cooling systems.
      --Reduce first costs of emerging tankless and storage type water
            heaters by at least 20 percent, while achieving efficiencies of
            more than 80 percent for noncondensing and 90 percent for
            condensing type units.
      --Develop a combination space/water heating system with improved
            efficiency and reduced first cost to be used in residential,
            multi-unit, and commercial buildings.
    Solar/Natural Gas Hybrid Systems--$2.8 Million
        This effort will include technology development and laboratory and
    field testing, working with manufacturers of solar thermal or other
    renewable-resource systems. Particular attention will be given to
    integration/control and system sizing issues as well as safety and
    reliability (all of which will strongly impact commercial viability).
      --Develop solar thermal-natural gas hybrid technology and products
            that cost-effectively generate heat, hot water, and steam, and
            thermally driven cooling--reducing carbon emissions and the use
            of fossil fuels.
      --Improve storage and integration of lower temperature thermal heat
            (solar) with higher-temperature natural gas heat system.
      --Integrate concentrated solar with natural gas energy systems.
    Breakthrough Technology Development--$2.1 Million
        This initiative will focus on developing and testing more advanced
    technologies and systems that will not be available for the market
    place for 3 to 7 years and will make extensive use of longer-term
    laboratory research. The main drivers for this research will be carbon
    emission reductions and improved efficiency thus producing the next
    wave of efficient and clean gas technologies for residential and
    commercial use. As promising technologies, components and systems
    emerge, appropriate lab and field testing will be conducted.
      --Develop catalytic and other approaches for carbon management (e.g.,
            formation, reduction, capture, conversion storage) of specific
            combustion byproducts like carbon dioxide or carbon monoxide.
      --Support basic combustion research to improve efficiency, reduce
            pollutant formation, increase heat transfer to improve the
            operation of gas-based energy systems.
      --Perform hydrogen enrichment mixtures to reduce carbon emissions
            from gas equipment--(a carbon mitigating approach may be to
            provide a percentage of hydrogen through the natural gas
            pipeline system).
    Building Systems and Community Energy System Technologies--$2.6 Million
        Parallel attention will be given to both residential and selected
    commercial buildings. Different RD&D programs will be developed for
    selected building types (e.g., residential single-family homes
    retrofit, new-construction homes, multifamily dwellings, retail
    building, and institutional building) and regions (e.g., Northeast,
    Southwest). RD&D will include laboratory research but will also
    comprise extensive testing in instrumented buildings that will serve as
    field test facilities. R&D will be coordinated with architects and
    builders as well as developers and manufacturers of emerging energy
    systems and associated components and controls.
      --Develop approaches for optimized integration of gas systems with
            the evolving Smart Energy Grid providing consumers new option
            for energy management, comfort control and communication with
            energy providers.
      --Perform advanced energy efficiency and carbon emission analysis
            utilizing full fuel cycle protocol, develop new scientific data
            and tools to support lowering overall energy use and carbon
            emissions in homes and buildings.
      --Improve the efficiency and flexibility of operation of gas-based
            equipment when used in combination with emerging building
            technologies, new communications systems and other energy
            systems.
    Development of Higher-Efficiency and ENERGY STAR-rated Commercial Food
            Service Equipment $1.6 Million
        This effort will include laboratory development and field testing,
    working with manufacturers and food service preparers. It will develop
    improved components that will increase energy efficiency, reduce
    emissions, and improve the productivity of ranges, ovens, grills,
    griddles, fryers, and other food preparation products.
      --Develop new cooking equipment designed to improve the currently
            very low efficiency for natural gas cooking equipment.
      --Reduce combustion related emissions from gas-fueled residential and
            commercial cooking equipment.
      --Improve the performance and reduce the cost of critical heat
            transfer components in residential and commercial cooking
            equipment.
        In the industrial Program in DOE's Energy Efficiency and Renewable
    Energy Office, we encourage overall funding that accommodates a total
    of $30 million for CHP (the budget request level and the fiscal year
    2010 appropriations are both $25 million). At least $8 million of these
    funds should be dedicated to small-scale systems below 20 kW. We also
    support a budget that directs at least $25 million to the Industries of
    the Future (Specific) Program, which would be in line with appropriated
    levels for the past several years and would be used to develop the
    technologies used in our Nation's heavy industries to manage their
    energy expenditures.
        Specific CHP initiatives include:
    Small-Scale CHP Research and Development--$8 Million
          Micro Combined Heat and Power Products (10kW or less).--Develop,
            using existing technological breakthroughs, a system which
            would provide on-site electric power and domestic hot water and
            heating for homes and small businesses utilizing either propane
            or natural gas. This will include development of ``dark start''
            technology for use in communities where there is an inability
            to deliver reliable electricity via traditional central power
            station and transmission/distribution systems.
          Gas Heat Pump Technology (7.5-15- tons).--Continue previous DOE
            efforts in gas-fired heat pumps (80-percent reduction in
            electric peak demand in cooling and 150-percent efficiency in
            heating mode). Necessary work:
        --fuel management and control development;
        --heat recovery to provide domestic hot water and space heating;
                and
        --power generation.
          Further enhancements of the heat exchangers, engine, and
            compressors will result in improved efficiency and lower first
            costs. This will include development of auxiliary power
            capability for plug-in hybrid fueling or other potential
            critical power loads.
          Emissions and Carbon Footprint Reductions Reasearch and
            Development.--Continue ongoing activity. Although the GHP and
            Micro-CHP products meet the current air-quality requirements,
            further emission reductions are being anticipated. This program
            would take a pro-active stewardship toward reducing product
            carbon footprints for small engine technology that requires
            particular attention.
        Thank you for the opportunity to submit testimony.
                                     ______

            Prepared Statement of the American Geological Institute

        To the chairman and members of the subcommittee: Thank you for this
    opportunity to provide the American Geological Institute's (AGI)
    perspective on fiscal year 2012 appropriations for geoscience programs
    within the subcommittee's jurisdiction. The President's budget request
    for the Department of Energy (DOE) research programs provides important
    and modest investments in research and development (R&D) that will help
    support economic growth, job creation and energy independence,
    diversification and sustainable management. AGI strongly supports the
    wise and increased investments in the Office of Science ($5.4 billion)
    and Energy Efficiency and Renewable Energy ($3.2 billion) (particularly
    the increase for geothermal R&D within EERE). AGI strongly supports
    investments in geoscience education, training, and workforce
    development through the Office of Science's Workforce Development for
    Teachers and Scientists ($35 million).
        AGI is concerned about the termination of limited investments in
    oil and natural gas R&D within the Office of Fossil Energy. Oil and
    natural gas supply 62 percent of our Nation's energy and will continue
    to play a major role in the future. These investments will drive
    innovation to support and improve safe and effective domestic
    development of clean fossil fuels. The bulk of DOE's oil and gas R&D
    investments go to institutions of higher education for training and
    research. The United States has a substantial workforce and significant
    investments in oil and natural gas research, development, exploration,
    and production. Steady, but modest Federal investments in fossil energy
    R&D with a longer-term strategic plan would benefit the academic,
    private, and public sectors.
        The Office of Fossil Energy suffers from an unbalanced portfolio
    that focuses primarily on coal, faces uncertainty about direction and
    investments, and receives inconsistent funding. We ask for the
    subcommittee's support for oil and gas, unconventional natural gas,
    geothermal, hydropower, methane hydrates and carbon sequestration R&D
    so the Nation can develop a diverse portfolio of energy resources while
    enhancing carbon mitigation strategies to secure clean, affordable, and
    secure energy supplies for now and the future.
        AGI is a nonprofit federation of 49 geoscientific and professional
    associations that represents more than 120,000 geologists,
    geophysicists, and other earth scientists. The institute serves as a
    voice for shared interests in our profession, plays a major role in
    strengthening geoscience education, and strives to increase public
    awareness of the vital role that the geosciences play in society's use
    of resources and interaction with the environment.

                    DEPARTMENT OF ENERGY'S OFFICE OF SCIENCE

        The DOE Office of Science is the single largest supporter of basic
    research in the physical sciences in the United States, providing more
    than 40 percent of total funding for this vital area of national
    importance. The Office of Science manages fundamental research programs
    in basic energy sciences, biological and environmental sciences, and
    computational science and, under the budget request, would grow by
    about 9 percent from about $4.9 billion in 2010 to $5.4 billion in
    fiscal year 2012. AGI asks that you support this much needed increase.
        The President's request would provide $35 million for Workforce
    Development for Teachers and Scientists, a program aimed at ensuring
    that DOE and the Nation have a sustained pipeline of highly skilled and
    diverse science, technology, engineering, and mathematics (STEM)
    workers. AGI strongly supports investments in geoscience education,
    training, and workforce development within DOE and other Federal
    agencies.

         DEPARTMENT OF ENERGY'S ENERGY EFFICIENCY AND RENEWABLE ENERGY

        Within Energy Efficiency and Renewable Energy, the President's
    fiscal year 2012 budget request would increase investments for R&D for
    many renewable energy resources. AGI applauds the $102 million
    requested for geothermal R&D and greatly appreciates previous support
    from the Congress for this key alternative energy resource. The
    geothermal research program within the renewable energy account, which
    funds Earth science research in materials, geofluids, geochemistry,
    geophysics, rock properties, reservoir modeling, and seismic mapping
    will provide the Nation with the best research to build a successful
    and competitive geothermal industry. AGI also supports an Energy
    Innovation Hub focused on critical materials and hope this hub will
    consider ways to improve exploration, extraction, and processing of
    necessary raw materials as well as replacement materials.

         DEPARTMENT OF ENERGY'S FOSSIL ENERGY RESEARCH AND DEVELOPMENT

        AGI urges you to look critically at the Fossil Energy Research and
    Development portfolio as you prepare to craft the fiscal year 2012
    Energy and Water Development appropriations bill. Many Members of
    Congress have strongly emphasized the need for a responsible,
    diversified, and comprehensive energy policy for the Nation. The
    growing global competition for fossil fuels has led to a repeated and
    concerted request by the Congress to ensure the Nation's energy
    security. The President's proposal, which provides no funding for oil
    and gas R&D, is short sighted and inconsistent with congressional and
    public concerns. No funding for oil and gas R&D will hinder our ability
    to achieve energy stability and security.
        The research dollars invested in oil and gas R&D go primarily to
    universities, State geological surveys, and research consortia to
    address critical issues like enhanced recovery from known fields and
    unconventional sources that are the future of our natural gas supply.
    This money does not go into corporate coffers, but it helps American
    businesses remain competitive by giving them a technological edge over
    foreign companies. All major advances in oil and gas production can be
    tied to research and technology. AGI strongly encourages the
    subcommittee to ensure a balanced and diversified energy research
    portfolio that does not ignore the Nation's primary sources of energy
    for the near future, fossil fuels.
        Thank you for the opportunity to present this testimony to the
    subcommittee.
                                     ______

          Prepared Statement of the American Public Power Association

        The American Public Power Association (APPA) respectfully requests
    funding for the Renewable Energy Production Incentive, Power Marketing
    Administrations, storage for high-level nuclear waste, the Nuclear Loan
    Guarantee Program, the Department of Energy Water Power Program, energy
    conservation, weatherization, clean coal, fuel cells, fuel and powering
    systems, the Navajo Electrification and Demonstration Program and the
    Federal Energy Regulatory Commission (FERC).
        APPA is the national service organization representing the
    interests of more than 2,000 municipal and other State and locally
    owned electric utilities in 49 States (all but Hawaii). Collectively,
    public power utilities deliver electricity to 1 of every 7 electric
    consumers (approximately 46 million people), serving some of the
    Nation's largest cities. However, the vast majority of APPA's members
    serve communities with populations of 10,000 people or less.
        We understand that the Congress is operating in a tight fiscal
    environment. APPA's priority is to support programmatic requests that
    bring down costs, conserve resources, or benefit our public power
    customers in other ways. We appreciate the opportunity to submit this
    statement outlining our fiscal year 2012 funding priorities within the
    jurisdiction of the Energy and Water Development Subcommittee.
        Renewable Energy Production Incentive (REPI).--APPA is disappointed
    that the administration and the Congress have decided to stop funding
    the REPI. REPI was the first attempt by the Congress to provide
    comparable renewable incentives to the nonprofit electric utility
    industry and we continue to seek comparability to this day. The
    elimination of funding for the REPI program was a step backward in this
    process. Defunding not only decreases incentives for new production,
    but utilities who had been receiving the funding are stranded mid-
    program. Five million dollars would restore funding to the program for
    fiscal year 2012, but any funding would help restore payments to those
    already approved for the incentive.

                        POWER MARKETING ADMINISTRATIONS

        Power Marketing Administrations Proposals.--The President's
    National Commission on Fiscal Responsibility and Reform proposed a
    measure for all four Power Marketing Administrations (PMA) that would
    have had the effect of raising the rates for PMA customers. We
    appreciate that the fiscal year 2012 request did not include this type
    of proposal.
        Purchase Power and Wheeling.--We urge the subcommittee to authorize
    appropriate levels for use of receipts so that the Western Area Power
    Administration (WAPA), the Southeastern Power Administration (SEPA) and
    the Southwestern Power Administration (SWPA) can continue to purchase
    and wheel electric power to their municipal and rural electric
    cooperative customers. Although appropriations are no longer needed to
    initiate the purchase power and wheeling (PP&W) process, the
    subcommittee continues to establish ceilings on the use of receipts for
    this important function. The PP&W arrangement is effective, has no
    impact on the Federal budget, and is supported by the PMA customers who
    pay the costs. We support an increase over the funding levels of the
    administration's budget for fiscal year 2012, which are as follows:
      --$307 million for WAPA;
      --$100 million for SEPA; and
      --$40 million for SWPA.
        Construction.--We urge the subcommittee to authorize appropriate
    levels of funding for the construction budgets of WAPA, SEPA, and
    SWAPA. These budgets have continued to decrease over the years however,
    this funding remains critical to the operation and maintenance of the
    PMAs.
        Storage for High-Level Nuclear Waste.--APPA is disappointed that
    the administration closed the Yucca Mountain Project and the Office of
    Civilian Radioactive Waste Management in fiscal year 2010. We support
    the work of the Blue Ribbon Commission on America's Nuclear Future and
    look forward to hearing the Commission's recommendations on how the
    Nation should manage nuclear waste.
        Nuclear Loan Guarantees.--APPA is pleased with the administration's
    request for DOE Loan Guarantee authority up to $36 billion for new
    nuclear facilities and encourages the subcommittee to maintain this
    level of funding.
        DOE Water Power Program.--APPA was extremely disappointed that
    funding for water power was decreased by 20 percent while all other
    renewable resources were increased in the administration's fiscal year
    2012 request. APPA believes there should be parity among renewable
    resource funding. APPA requests $100 million for fiscal year 2012 for
    the DOE's Water Power Program. At a time when utilities around our
    country must focus on finding carbon-free sources of energy because of
    pending State and Environmental Protection Agency regulations, the
    importance of hydropower research and development is more important
    than ever before. Not only is hydropower a renewable resource, but it
    can be used as baseload generation to back up more intermittent
    renewables such as wind and solar power.
        Energy Conservation.--APPA appreciates the funding increases for
    energy efficiency programs provided in the President's budget. The
    budget funding levels for fiscal year 2012 are as follows:
      --Building technologies--$470 million;
      --Industrial technologies--$319 million;
      --Federal Energy Management Program--$33 million; and
      --Vehicle technologies--$588 million.
        We urge the subcommittee to maintain these funding levels.
        Weatherization and Intergovernmental Activities.--We are pleased
    that the administration has requested $394 million for the
    weatherization program in fiscal year 2012, a significant increase from
    fiscal year 2010, and we encourage the subcommittee to maintain that
    level of funding.
        Clean Coal Power Initiative and FutureGen.--APPA is disappointed
    that the budget did not include funding for large-scale commercial
    applications of carbon capture and sequestration technology. We
    encourage the subcommittee to include funding for Clean Coal Power
    Initiative (CCPI) and FutureGen. APPA strongly believes as the need for
    clean-energy increases, the FutureGen project, or something similar,
    will be critical in nearing us to the goal of the world's first near-
    zero-emissions coal fired plant. We urge the subcommittee and the
    Congress to work with the administration on finding an appropriate role
    and funding level for the FutureGen project and CCPI.
        Fuel Cells.--APPA was disappointed that the administration
    requested zero funding for fuel cell related research and development.
    We urge the subcommittee to allocate additional funding for this
    program for fiscal year 2012.
        Fuels and Power Systems.--We recommend these funding levels for the
    following programs:
          Innovations for Existing Plants.--$84 million;
          Advanced Integrated Gasification Combined Cycle.--$80 million;
          Turbines.--$45 million;
          Carbon Sequestration.--$150 million;
          Fuels.--$25 million; and
          Advanced Research.--$48 million.
        Navajo Electrification Demonstration Program.--APPA supports full
    funding for the Navajo Electrification Demonstration Program at its
    full authorized funding level of $15 million. The purpose of the
    program is to provide electric power to the estimated 18,000 occupied
    structures in the Navajo Nation that lack electric power. This program
    has been consistently underfunded.
        FERC.--The fiscal year 2012 budget requests $305 million for FERC,
    an increase more than fiscal year 2010 levels. APPA supports this
    increase.
                                     ______

          Prepared Statement of the American Society for Microbiology

        The American Society for Microbiology (ASM) is pleased to submit
    the following testimony on the fiscal year 2012 appropriation for
    science programs at the Department of Energy (DOE). The ASM is the
    largest single life science organization in the world with more than
    38,000 members. The ASM mission is to enhance the science of
    microbiology, to gain a better understanding of life processes, and to
    promote the application of this knowledge for improved health and
    environmental well-being.
        ASM supports the administration's proposed fiscal year 2012 budget
    of $5.4 billion for the DOE's Office of Science, a 9.1-percent increase
    more than the fiscal year 2010 appropriation level. The proposed fiscal
    year 2012 budget will enable the Office of Science to continue its
    leadership in critical areas including:
      --renewable energy;
      --environmental cleanup;
      --carbon capture and sequestration;
      --climate change; and
      --basic research across the physical and biological sciences.
        DOE investments in science and technology create new industries and
    jobs, and strengthen United States basic research capabilities. The
    Office of Science funds research in academic institutions, DOE
    laboratories and technology centers that employ more than 30,000
    scientists and engineers. In fiscal year 2012, more than 26,000
    researchers from universities, national laboratories, industry and
    international groups are expected to use DOE's world-renowned research
    facilities.
        The Office of Science is the largest Federal sponsor of basic
    research in the physical sciences as well as the largest Federal funder
    of materials and chemical sciences. The 10 national laboratories
    directly overseen by the Office of Science are world leaders in basic
    and applied research, generating breakthroughs in multiple disciplines.
    DOE provides scientific expertise to address challenges including
    events in postearthquake Japan, the search for clean energy, and many
    environmental challenges.
        ASM has a specific interest in microbiological research overseen by
    the Biological and Environmental Research (BER) program. Microorganisms
    are essential to research areas like biofuels and environment
    remediation. ASM recommends congressional approval of the proposed
    budget increase for the BER program to $718 million, about 22 percent
    more than the fiscal year 2010 level.

      DEPARTMENT OF ENERGY'S INVESTMENTS IN BIOLOGICAL AND ENVIRONMENTAL
                      RESEARCH YIELD INNOVATIVE SOLUTIONS

        The Biological and Environmental Research program cuts across
    scientific and engineering disciplines to understand complicated
    biological, climatic, and environmental systems. BER-funded research
    has advanced scientific knowledge providing the foundational research
    to support biofuels development, monitor subsurface contaminants and
    expose the effects of greenhouse gas emissions. BER funding is also
    responsible for new research tools that help investigators explore the
    interface of biological and physical sciences.
        The BER research portfolio has transformed science and technology
    in the United States. An example is the Human Genome Project initiated
    by BER in 1986, a catalyst for the biotechnology industry and the
    emerging field of systems biology. BER-sponsored activities have helped
    shape modern climate science with powerful climate modeling
    capabilities. BER's computing experts and facilities have guided new
    disciplines dependent upon high-end computer resources, such as
    computational biology and bioinformatics. DOE funding has influenced
    scientific discovery. Recent examples include:
      --Use of a newly patented group of naturally occurring microbes to
            detoxify chlorinated solvents that contaminate a former DOE
            reactor site, improving groundwater quality;
      --Genetic mapping of plant digesting microbes from the cow rumen,
            generating 270 billion letters of the DNA code in a massive
            data-collecting effort to understand how to efficiently degrade
            plant biomass for biofuels production; and
      --Atomic-scale xray crystallography studies that identified microbial
            proteins possibly key to formation of drug-resistant biofilms,
            suggesting new antibiotic targets.
        The fiscal year 2012 budget proposes increases for the areas of
    genomic science and computational biosciences, as well as for BER's
    Joint Genome Institute, Structural Biology Infrastructure and programs.
        BER's major scientific goals for fiscal year 2012 include advances
    in genomic science, radiological sciences, climate research, and
    subsurface biogeochemistry. Relevant research will be distributed
    between BER's two subprograms, Biological Systems Science Division
    (BSSD) and Climate and Environmental Sciences Division (CESD). The
    former focuses on fundamental principles related to function and
    structure of living systems from microbes to mammals, while the latter
    examines environmental impacts of energy production and use. Both rely
    heavily on microbiological systems and techniques.
        The fiscal year 2012 request for BSSD is $376 million, an increase
    from the fiscal year 2010 level of $310 million. In fiscal year 2012,
    CESD would receive nearly $342 million compared to $278 million in
    fiscal year 2010. Within CESD, Environmental System Science activities
    increase by 22 percent. BER budgets also include support for world
    class facilities and research consortia. The BSSD subprogram manages
    the Joint Genome Institute, the Bioenergy Science Center, the Joint
    Bioenergy Institute, and three DOE Bioenergy Research Centers. The CSSD
    oversees two scientific user facilities, the Atmospheric Radiation
    Measurement Climate Research Facility and the Environmental Molecular
    Sciences Laboratory (EMSL). The Joint Genome Institute is now
    sequencing more than 4 trillion genome base pairs annually (more than
    130 times that of 5 years ago), while EMSL with its powerful
    instrumentation and computing housed at DOE's Pacific Northwest
    National Laboratory, leads worldwide efforts in the field of
    proteomics. Results reported from BER-funded research in the past year
    include:
      --Scientists at Massachusetts Institute of Technology concluded that
            various microbial species cooperate in marine environments
            during their cycling of organic matter, important to the global
            carbon cycle (BSSD-funded).
      --Bioenergy Science Center studies described a new method to
            genetically modify the cellulose-degrading bacterium
            Clostridium thermocellum, with potential to expedite critical
            degradation steps in biofuels production. DOE scientists at
            Princeton University developed the first-ever quantitative
            model for metabolic processes in another Clostridium species
            that produces butanol, ethanol, and hydrogen during biomass
            fermentation and is already used by industry--a step toward
            engineering the microbe for biofuels synthesis.
      --Another collaborative CESD study determined that different
            microorganisms convert soluble uranium to different forms of
            reduced uranium, pertinent to controlling contaminants at
            nuclear sites. Other researchers used microbial fuel cell
            techniques and electrodes inserted into soil to monitor
            microbial activity as related to the progress of uranium
            bioremediation, a technique also applicable to other microbial
            processes in the environment.

        DEPARTMENT OF ENERGY'S RESEARCH BUILDS RESEARCH AND DEVELOPMENT
                           INFRASTRUCTURE, WORKFORCE

        DOE science programs have evolved and expanded into an R&D
    infrastructure unparalleled in specific areas of science, technology,
    engineering, and mathematics. DOE laboratories operate sophisticated
    equipment often not available elsewhere, and large numbers of non-DOE
    researchers from the United States and other countries regularly use
    DOE facilities to conduct studies that would otherwise be impossible.
        The DOE Office of Science has built extraordinary research
    capabilities, including particle accelerator centers, advanced
    computational centers, and atmospheric monitoring facilities. As an
    example, EMSL offers users a supercomputer and more than 60 major
    instruments to support environmental sciences, serving more than 700
    users annually. In the past year, an international team of more than 80
    researchers from 21 institutions used the world's first hard xray free-
    electron laser, the Linac Coherent Light Source at DOE's Stanford
    Linear Accelerator Center National Accelerator Laboratory, to produce
    the first single-shot images of intact viruses, expected to lead to
    eventual videos of molecules, viruses and live microbes in action.
        Innovative research tools developed at the national labs or other
    DOE-funded institutions regularly stimulate multiple scientific fields,
    often transferring to the technology marketplace as valuable commercial
    products. The DOE toolkit includes research protocols, monitoring and
    measuring equipment, computer models and databases, and considerably
    more. One commercialized example is the PhyloChip developed by DOE
    scientists that can detect up to 50,000 species of bacteria and archaea
    in a single environmental sample, which was deployed at last year's
    gulf oil spill. The innovation has already spawned a start-up company
    and is expected to have broad applications in monitoring. At BER's
    Joint Bioenergy Institute, scientists developed a mass spectrometry-
    based detection technique called multiple-reaction monitoring, to more
    efficiently and accurately identify microbial proteins that convert
    cellulosic sugars to biofuels. Last year, BER-sponsored university
    scientists introduced an optimization method that delineates all
    possible metabolic pathways in an organism like biofuels-related
    bacteria, then suggests which genetic changes could trick the microbe
    into overproducing a desired product like ethanol.
        The Office of Science also supports the Workforce Development for
    Teachers and Scientists (WDTS) program, at $35.6 million, a substantial
    72-percent increase more than fiscal year 2010. The WDTS program
    continues DOE's long history of training scientists, mathematicians,
    and engineers as U.S. technical workforce, principally through research
    grants and contracts at universities, the private sector, and DOE's own
    laboratories. The program also reaches out to all academic levels. Each
    year, participants in training and education programs at DOE
    laboratories include--
      --more than 250,000 K-12 students;
      --22,000 K-12 educators;
      --4,000 undergraduate interns;
      --3,000 graduate students; and
      --1,600 postdoctoral employees.
        In 2010, a new graduate fellowship program selected its first
    cohort of 150 students, beginning an initiative to attract more
    students to careers in physics, chemistry, biology, mathematics,
    engineering, environmental sciences, or computer sciences.
    department of energy's partnerships elevate u.s. science and technology
        The BER program collaborates with other Federal agencies including
    the National Science Foundation, the Department of Agriculture (USDA),
    the National Institutes of Health, and the Department of Defense, to
    optimize complementary research. DOE and USDA, for example, share
    similar goals in finding new bioenergy sources while DOE's climate
    change studies integrate closely with those in multiple Federal
    agencies. DOE collaborations extend to academia, industry, nonprofits,
    and international partners. The Office of Science funds more than 7,000
    individual research projects at universities, national laboratories,
    U.S. industry, and the nonprofit sector. In fiscal year 2012, the BER
    budget would support approximately 2,400 researchers and graduate
    students in more than 200 U.S. Federal, academic, and private
    institutions. DOE personnel also advise non-DOE scientists and
    policymakers; about 40 DOE experts have travelled to Japan with more
    than 17,000 pounds of equipment to help monitor radiation released by
    the recent earthquake.
        Extramural DOE funding contributes significantly to science and
    technology achievements. More than 110 Nobel laureates have received
    DOE support, as did two recipients of the 2011 Franklin Institute
    Medal. Last year, 39 DOE-funded projects garnered R&D 100 Awards which
    recognize the world's most promising new products, processes,
    materials, or software that had entered the market the previous year.
    DOE funding has supported the basic research for 800 R&D 100 winners
    since 1962.

                                   CONCLUSION

        ASM recommends that the Congress approve the proposed fiscal year
    2012 budget for the DOE science programs that support diverse often
    large-scale research, uniquely important to the U.S. economy, national
    security, a healthy environment and the future status of U.S. science
    and technology.
                                     ______

     Prepared Statement of the American Society of Agronomy; Crop Science
          Society of America; and the Soil Science Society of America

        The American Society of Agronomy (ASA), Crop Science Society of
    America (CSSA), and Soil Science Society of America (SSSA) are pleased
    to submit the following funding recommendations for the Department of
    Energy (DOE) for fiscal year 2012. For the Office of Science, ASA,
    CSSA, and SSSA recommend a funding level of $5.4 billion.
        With more than 25,000 members and practicing professionals, ASA,
    CSSA, and SSSA are the largest life science professional societies in
    the United States dedicated to the agronomic, crop and soil sciences.
    ASA, CSSA, and SSSA play a major role in promoting progress in these
    sciences through the publication of quality journals and books,
    convening meetings and workshops, developing educational, training, and
    public information programs, providing scientific advice to inform
    public policy, and promoting ethical conduct among practitioners of
    agronomy and crop and soil sciences.

                     DEPARTMENT OF ENERGY OFFICE OF SCIENCE

        ASA, CSSA, and SSSA understand the challenges the Senate Energy and
    Water Development Appropriations Subcommittee faces with the tight
    budget for fiscal year 2012. We also recognize that the Energy and
    Water Development Appropriations bill has many valuable and necessary
    components, and we applaud the subcommittee for the support provided to
    the Department of Energy (DOE) Office of Science. For fiscal year 2012,
    ASA, CSSA, and SSSA recommend a funding level of $5.4 billion.
        The Congress approved the America COMPETES Reauthorization Act of
    2010 (Public Law 111-358), recognizing that an investment in basic
    (discovery) scientific research is essential to providing America the
    brainpower necessary to maintain a competitive advantage in the global
    economy and keep U.S. jobs from moving overseas. Such an investment is
    needed to keep U.S. science and engineering at the forefront of global
    research and development in the biological sciences and geosciences,
    computing and many other critical scientific fields. The Office of
    Science supports graduate students and postdoctoral researchers early
    in their careers. However, because of the uncertainty of the Federal
    budget, the Office of Science was not able to provide the essential
    support needed in fiscal year 2011. As a result, it is important that
    increase emphasis is placed on these programs in fiscal year 2012.
    Nearly one-third of its research funding goes to support research at
    more than 300 colleges and universities nationwide. The Office of
    Science also reaches out to America's youth in grades K-12 and their
    teachers to help improve students' knowledge of science and mathematics
    and their understanding of global energy and environmental challenges.
    This recommended funding level of $5.4 billion is critical to ensuring
    our future energy self-sufficiency and as a means to address major
    environmental challenges including global climate change. Finally, a
    funding level of $5.4 billion will allow the Office of Science to:
      --maintain and strengthen DOE's core research programs at both the
            DOE national laboratories and at universities;
      --provide support for Ph.D.s, postdoctoral associates, and graduate
            students;
      --ensure maximum utilization of DOE research facilities; and
      --allow the Office of Science to develop and construct the next-
            generation facilities necessary to maintain U.S. pre-eminence
            in scientific research.
    Basic Energy Sciences
        Within the Office of Science, the Basic Energy Sciences (BES)
    program is a multipurpose, scientific research effort that fosters and
    supports fundamental research to expand the scientific foundations for
    new and improved energy technologies and for understanding and
    mitigating the environmental impacts of energy use. The research
    disciplines that the BES program supports include condensed matter and
    materials physics, chemistry, soil, mineralogical, and geosciences,
    influencing virtually every aspect of energy resources, production,
    conversion, transmission, storage, efficiency, and waste mitigation.
    Research in geosciences leads to advanced monitoring and measurement
    techniques for reservoir definition. The BES program is one of the
    Nation's largest sponsors of research in the natural sciences. In
    fiscal year 2010, the program funded research in more than 170 academic
    institutions located in 50 States and in 14 DOE laboratories located in
    12 States. Thus, approximately 40 percent of the BES program's research
    activities are sited at academic institutions.
        Within the BES program, the chemical sciences, geosciences, and
    energy biosciences subprogram supports fundamental research in soil,
    biogeochemistry, geophysics, and biosciences. We support funding this
    subprogram at $394.7 million in fiscal year 2012.
        Within BES there exists several critical pieces of equipment
    essential for elucidating the soil's potential to provide essential
    services--carbon sequestration, nutrient cycling, water purification,
    waste treatment, provisioning of industrial and pharmaceutical goods,
    and a mitigating sink for chemical and biological agents--that enhance
    the resilience of managed and natural systems.
        As such, the Societies support the increases included in the
    President's budget for the major items of equipment projects, including
    the Linac Coherent Light Source (LCLS) at SLAC National Accelerator
    Laboratory, the world's first hard xray free electron laser (FEL),
    which produces ultrafast pulses of xrays millions of times brighter
    than even the most powerful synchrotron light sources. The LCLS
    provides scientists with a unique tool for studying the arrangement and
    motion of atoms and electrons in metals, semiconductors, ceramics,
    polymers, catalysts, plastics, and biological molecules with the
    potential to significantly impact advanced energy research and other
    fields. The societies support the requested increase for the LCLS
    included in the President's fiscal year 2012 budget (+$30,000,000 more
    than fiscal year 2010) to extend the xray spectral range at the LCLS.
        Our soil scientists also are users of the National Synchrotron
    Light Source (NSLS-II) built to enable the study of material properties
    and functions, particularly materials at the nanoscale, at a level of
    detail and precision never before possible. We support the increase
    requested in fiscal year 2012 (+$12,000,000 more than fiscal year 2010)
    to initiate the fabrication of approximately 5 to 6 additional
    instruments.
        The Geosciences Research Program supports research focused at
    developing an understanding of fundamental Earth processes that can be
    used as a foundation for efficient, effective, and environmentally
    sound use of energy resources, and provide an improved scientific basis
    for advanced energy and environmental technologies. We support the
    $19.3 million increase proposed by the President to the Geosciences
    program, specifically for the purposes of continuing to expand research
    on geochemical studies and computational analysis of complex subsurface
    fluids and solids.
    Biological and Environmental Research
        Within the Office of Science, the Biological and Environmental
    Research (BER) program, for more than five decades, has advanced
    environmental and biological knowledge that supports national security
    through improved energy production, development, and use; international
    scientific leadership that underpins our Nation's technological
    advances; and research that improves the quality of life for all
    Americans. BER supports these vital national missions through
    competitive and peer-reviewed research at national laboratories,
    universities, and private institutions. ASA, CSSA, and SSSA support the
    funding of the BES at the President's requested level for fiscal year
    2012 of $717.9 million. A variety of programs within BER are essential
    to continued fundamental research about biological systems science,
    geochemical observations, and determining environmental sustainability
    of our energy production systems. Among other items, the DOE Bioenergy
    Research Centers, the Joint Genome Institute, the Environmental
    Molecular Science Laboratory, and biological sequencing science are
    essential for overcoming the challenges of ensuring our Nation's energy
    security and environmental health.
        The Climate and Environmental Sciences subprogram, Environmental
    Systems Science will support essential subsurface biogeochemical
    research and basic research on the fate and transport of contaminants
    in the subsurface. The ASA, CSSA, and SSSA support funding for
    Environmental Systems Science at $104.2 million for fiscal year 2012, a
    level which would retain funding for the Terrestrial Carbon
    Sequestration Research, while also investing in research on contaminant
    transport to ensure minimal risk to exposure. This research addresses
    unique physical, chemical, and biological processes controlling the
    flux of contaminants across and within the root zone of soils and the
    flux of contaminants to surface water bodies. Processes in these
    critical zones influence fluxes of carbon and key nutrients between the
    atmosphere and terrestrial biosphere.

                         IDENTIFYING ESSENTIAL RESEARCH

        Our members participated in the community-based workshop in March
    2010 that developed the workshop report, ``Complex Systems Science for
    Subsurface Fate and Transport.'' The report emphasized the need to
    understand the role that subsurface biogeochemical processes play in
    determining the fate and transport of contaminants including heavy
    metals and radionuclides. Participants concluded that computational
    models of coupled biological, geochemical, and hydrological processes
    are needed to predict the rates and kinetics of transformation and
    sequestration of these critical DOE contaminants.
        Within BER, we support the increase included in the President's
    budget for the Genomic Science Program, to bring the total level of
    funding to $241.5 million for fiscal year 2012. The Joint Genome
    Institute within the Genomic Program is an essential infrastructural
    component which uses tools from contemporary systems biology to
    understand and predict the energetic relationships between microbes and
    plants. The increase would support synthetic molecular toolkits that
    predict, design, construct, and test new biological systems for clean-
    energy solutions.

                             NATIONAL LABORATORIES

        The Office of Science manages 10 world-class laboratories, which
    often are called the ``crown jewels'' of our national research
    infrastructure.
    National Energy Technology Laboratory
        National Energy Technology Laboratory's Carbon Sequestration
    Program is helping to develop technologies to capture, purify, and
    store carbon dioxide (CO2) in order to reduce greenhouse gas
    emissions without adversely influencing energy use or hindering
    economic growth. Program efforts in this area are focused on increasing
    carbon uptake on mined lands and evaluation of no-till agriculture,
    reforestation, rangeland improvement, wetlands recovery, and riparian
    restoration.
    Oak Ridge National Laboratory
        Oak Ridge National Laboratory (ORNL) is one of the world's premier
    centers for research and development on energy production,
    distribution, and use and on the effects of energy technologies and
    decisions on society. Clean, efficient, safe production, and use of
    energy have long been our goals in research and development. At ORNL,
    unique facilities for energy-related R&D are used both for technology
    development and for fundamental investigations in the basic energy
    sciences that underpin the technology work.
        Thank you for your thoughtful consideration of our requests.
                                     ______

         Prepared Statement of the American Society of Plant Biologists

        On behalf of the American Society of Plant Biologists (ASPB), we
    submit this statement for the official record to support the requested
    level of $5.42 billion for the Department of Energy (DOE) Office of
    Science for fiscal year 2012. The testimony highlights the importance
    of biology--particularly plant biology--as the Nation seeks to address
    vital issues such as energy security.
        ASPB and its members recognize the difficult fiscal environment our
    Nation faces, but believe investments in scientific research will be a
    critical step toward economic recovery. We would also like to thank the
    subcommittee for its consideration of this testimony and for its
    support for the basic research mission of the DOE Office of Science.
        ASPB is an organization of approximately 5,000 professional plant
    biology researchers, educators, graduate students, and postdoctoral
    scientists with members in all 50 States and throughout the world. A
    strong voice for the global plant science community, our mission--
    achieved through work in the realms of research, education, and public
    policy--is to promote the growth and development of plant biology, to
    encourage and communicate research in plant biology, and to promote the
    interests and growth of plant scientists in general.

        FOOD, FUEL, ENVIRONMENT, AND HEALTH--PLANT BIOLOGY RESEARCH AND
                                AMERICA'S FUTURE

        Plants are vital to our very existence. They harvest sunlight,
    converting it to chemical energy for food and feed; they take up carbon
    dioxide and produce oxygen; and they are the primary producers on which
    all life depends. Indeed, plant biology research is making many
    fundamental contributions in the areas of domestic fuel security and
    environmental stewardship; the continued and sustainable development of
    better foods, fabrics, pharmaceuticals, and building materials; and in
    the understanding of basic biological principles that underpin
    improvements in the health and nutrition of all Americans. In fact, the
    2009 National Research Council (NRC) report ``A New Biology for the
    21st Century'' placed plant biology at the center of urgent priorities
    in energy, food, health, and the environment.
        In particular, plant biology is at the center of numerous
    scientific breakthroughs in the increasingly interdisciplinary world of
    alternative energy research. For example, interfaces among plant
    biology, engineering, chemistry, and physics represent critical
    frontiers in both basic biofuels research and bioenergy production.
    Similarly, with the increase in plant genome sequencing and functional
    genomics, the interface of plant biology and computer science is
    essential to our understanding of complex biological systems ranging
    from single cells to entire ecosystems.
        Despite the fact that plant biology research--the kind of research
    funded by DOE--underpins so many vital practical considerations for our
    country, the amount invested in understanding their basic function and
    mechanisms is relatively small when compared with broader impacts on
    areas including energy security and economic development.

                                RECOMMENDATIONS

        Because of our membership's extensive expertise, ASPB is in an
    excellent position to articulate the Nation's plant science priorities
    as they relate to bioenergy and, specifically, with regard to
    recommendations for bioenergy research funding through the DOE's Office
    of Science.
        Within the Office of Science, the programs in BER and BES are
    crucial to understanding how basic biological processes work. For this
    reason ASPB is supportive of the fiscal year 2012 request to fund BER
    at $717.9 million and BES at $1.985 billion. Sustained funding for
    these programs is vital as the discoveries made in these areas will
    ultimately be the foundation for the next fuels and technologies we use
    in our daily lives.
        In addition:
      --We commend the DOE Office of Science, through their programs in
            Basic Energy Sciences and Biological and Environmental Research
            for funding the Bioenergy Research Centers and the Energy
            Frontier Research Centers. These centers provide a model for
            collective science innovation that complements DOE's essential
            investment in individual investigator and small group science.
            ASPB strongly encourages funding for the DOE Office of Science
            that would be specifically targeted to the funding of
            individual or small group grants for bioenergy research.
      --Photosynthetic research is one clear example of an interface
            between the physical sciences and biology. Indeed, the
            importance of disciplinary integration is a central theme of
            several recent NRC reports including ``A New Biology for the
            21st Century, Research at the Intersection of the Physical and
            Life Sciences, and Inspired by Biology: From Molecules to
            Materials to Machines''. The DOE Office of Science has been the
            major source of funding for fundamental studies of
            photosynthesis, which is the primary source of chemical energy
            on the planet. However, the current funding available for
            photosynthetic research is not commensurate with the central
            role that photosynthesis plays in energy capture and carbon
            sequestration. Hence, ASPB calls for the Office of Science to
            expand its research portfolio in the area of photosynthesis and
            carbon capture.
      --Considerable research interest is now being paid to the use of
            plant biomass for energy production. If biomass crops are to be
            used to their full potential, however, considerable effort must
            be expended to improve our understanding of their basic biology
            and development, as well as their agronomic performance.
            Therefore, ASPB calls for DOE to support research targeted at
            efforts to increase the utility and agronomic performance of
            bioenergy crops and to enhance understanding of plant cell
            walls and the production of cellulosic biomass.
        Thank you for your consideration of our testimony on behalf of the
    American Society of Plant Biologists.
                                     ______

           Prepared Statement of the American Wind Energy Association

                                  INTRODUCTION

        After experiencing a record year of growth in 2009, the American
    wind industry installed just more than 5,000 megawatts (MW) of capacity
    last year. Two of the principal causes for the decrease were the
    reduced demand for electricity due to the economic slowdown and the low
    price of natural gas compared with historic levels. Wind systems are
    commercially deployable today and cost-competitive with virtually all
    other new electricity generation sources. In addition, polling
    consistently shows that a strong majority of Americans want more wind
    power. Just last year, 89 percent of American voters (84 percent of
    Republicans, 88 percent of Independents, and 93 percent of Democrats)
    agreed that increasing the amount of energy our Nation gets from wind
    energy is a good idea.\1\ However, keeping America's domestic wind
    industry competitive with other generation sources and the wind
    industry in other countries depends in part on increased research,
    development, and deployment (RD&D) funding to reduce costs and improve
    reliability.
    ---------------------------------------------------------------------------
        \1\ March 2010 survey by Neil Newhouse, Public Opinion Strategies;
    Anna Bennett, Bennett, Petts & Norrington.
    ---------------------------------------------------------------------------
        The American Wind Energy Association (AWEA) requests a funding
    level of $144.2 million for fiscal year 2012 for the Department of
    Energy's (DOE) Wind Energy Program, an increase of $17.3 million more
    than the President's congressional budget request. Of this amount, AWEA
    requests that an additional $10.1 million be designated for the
    integration of variable power sources. An additional $6.2 million
    should be provided for the R&D of advanced technology components, and
    an additional $1 million should be provided for the study of wind
    energy and wildlife interactions. While we recognize that DOE has
    proposed a $64 million increase in funding for needed offshore wind R&D
    and generally concur with the proposed research activities, we wish to
    re-emphasize the importance of expanded R&D for land-based
    installations as well.
        We appreciate the recognition of the important role wind energy
    will play in meeting America's future energy needs, which is reflected
    in the 60-percent increase in funding for the DOE Wind Energy Program
    that is included in the President's budget request. This funding
    increase is an important step in overcoming constraints to meeting the
    DOE's scenario of wind energy providing 20 percent of our Nation's
    electricity by 2030,\2\ but funding should be increased in the three
    critical areas mentioned above, and maintained for wind resource
    characterization.
    ---------------------------------------------------------------------------
        \2\ U.S. Department of Energy, ``20 Percent Wind Energy by 2030''
    (July 2008).
    ---------------------------------------------------------------------------
          importance of the department of energy's wind energy program
        For years, the DOE Wind Energy Program has provided important help
    to the wind industry by supporting technology advances and identifying
    and addressing other hurdles to wind energy development. The program
    provides needed technical support, guidance, information, and limited
    cost-shared funding for efforts to explore and develop wind energy
    resources. AWEA commends the DOE Wind Energy Program for successfully
    developing programs that are consistent with the wind industry's long-
    term needs. We have noticed a growing rigor in the program's
    organization and structure to address the needs of the growing wind
    industry.
        Past investments in wind have resulted in significant improvements
    over the past 30 years, such as increased output, improved reliability,
    and lower costs. In fact, the cost of wind, when adjusted for
    inflation, has dropped from more than $0.50/kWh in 1980 to between
    $0.05 and $0.06 today.\3\ Despite this dramatic decrease, there is
    still plenty of room for further reductions that will be critical for
    wind energy to compete in an environment of very low electricity costs.
    ---------------------------------------------------------------------------
        \3\ Black and Veatch, ``20 Percent Wind Energy Penetration in the
    United States'' (October 2007).
    ---------------------------------------------------------------------------
        Clearly, more work is necessary. Wind power is still constrained by
    difficulties in market acceptance and the need for improvements in
    cost, performance, and reliability. DOE's 20-percent wind energy by
    2030 report assumes that capital costs must be reduced by 10 percent
    and that turbine efficiency must increase by 15 percent to reach the
    goal of providing 20 percent of our Nation's electricity from wind by
    2030. The DOE report identifies a need for continued Federal investment
    in wind RD&D by stating, ``In a functional sense, wind turbines now
    stand roughly where the U.S. automotive fleet stood in 1940''.\4\ As
    our Nation turns to wind power to meet more of its energy needs, it is
    important for DOE to increase funding to improve wind turbine
    reliability and reduce costs.
    ---------------------------------------------------------------------------
        \4\ U.S. Department of Energy, ``20 Percent Wind Energy by 2030''
    (July 2008).
    ---------------------------------------------------------------------------
        Achieving 20 percent of U.S. electric power from wind, with the
    critical help of RD&D, would:
      --Create 500,000 jobs, generating more than $1 trillion in economic
            impact by 2030;
      --Reduce natural gas demand by approximately 7 billion cubic feet/
            day--nearly one-half of the current consumption in the electric
            sector;
      --Decrease natural gas prices by approximately 12 percent, saving
            consumers approximately $128 billion;
      --Avoid 825 million tons of carbon dioxide emissions in the electric
            sector in 2030, equivalent to 25 percent of expected electric
            sector emissions; and
      --Reduce cumulative water consumption in the electric sector by 17
            percent in 2030 (one-third of which would come from the arid
            West).
        The DOE Wind Energy Program currently receives approximately $79
    million annually. In comparison, the RD&D budgets for many other
    traditional and emerging energy sources are much higher. Non-defense
    nuclear RD&D energy programs receive $775 million, coal programs
    receive about $383 million, and solar and biomass energy receive $243
    million and $216 million, respectively. These are historic imbalances
    in funding that date back to the 1970s. A higher Federal funding level
    for wind energy RD&D will help ensure that wind energy remains
    competitive with other forms of energy.

                       SPECIFIC WIND INDUSTRY PRIORITIES

        Each year AWEA and its member companies identify the RD&D
    priorities that will most effectively help realize the vision of
    providing 20 percent of America's electricity from wind by 2030. The
    following four areas are the wind industry's top priorities in addition
    to the funding that has already been requested in the President's
    budget.
    Integration of Variable Power Resources
        The integration of variable power sources, such as wind power, into
    the electrical grid is a key area of focus for meeting the 20 percent
    by 2030 wind energy goal. The systems integration program area focuses
    on the operations issues of integrating variable, nondispatchable power
    sources into the power system. Numerous studies from the United States
    and Europe (with significant involvement from DOE-funded experts) have
    shown that even minor changes to power system operations can
    accommodate much greater amounts of wind.
        Unfortunately, the DOE budget request justification includes a
    reduction in funding for renewable systems interconnection from $14 to
    $3.9 million. The current funding level should be preserved.
    Advanced Technology Components
        Advanced technology components, from drive trains to blades to
    towers to controls and sensors, have enormous potential to drive down
    the cost and increase the reliability of all future wind turbine
    systems, not just those located offshore. Such advancements can be
    accelerated and stimulated by DOE, especially as industry deals with
    the current downturn in wind turbine installations. With continued and
    accelerated advancement, studies show that onshore wind turbine
    installations in the United States over the next decade can approach
    150 gigawatts (enough to generate roughly 10 percent of U.S.
    electricity). The reduction in the utility-scale R&D testing budget
    line item indicates a reduced emphasis on these important technologies,
    which instead should be receiving greater attention.
        Wind energy is now cost competitive with virtually every other
    energy source and technology advancements can drive the cost down even
    more. Already, these technology advances have enabled a typical modern
    wind turbine to produce 15 times more electricity than the typical
    turbine in 1990, but further improvements are needed to meet the 20-
    percent goal by 2030.
    Siting Issues
        The DOE 20-percent report also identified siting issues as a
    potential barrier to achieving that level of deployment. To address
    these issues, the wind energy industry invests millions of dollars
    every year in research related to the interactions between wind energy
    and wildlife, including through a variety of collaborative efforts
    involving Federal and State officials, as well as conservation
    organizations. However, given the importance of resolving siting
    issues, including wildlife-related concerns, to the future of the
    industry, it is necessary and appropriate for DOE to support such
    efforts as well. AWEA recommends devoting $1 million of the DOE R&D
    budget to supporting research on wind energy and wildlife interactions.
    Wind Resource Characterization
        Discrepancies between the projected and actual performance of wind
    facilities illustrate the urgent and continuing need for improved wind
    resource characterization methods (modeling and measurements). These
    methods include micrositing to reduce wind turbine wake losses and to
    optimize large wind farm array layouts. These key areas can be
    addressed in the short term to reduce the cost of energy. The DOE
    fiscal year 2012 budget justification includes an increase from $5.7 to
    $7.1 million for this area of research. AWEA endorses this funding
    increase.

                                   CONCLUSION

        The President and the Congress have called for a bolder commitment
    to the development of domestic energy resources to meet our Nation's
    growing energy demand. Continued investments in wind energy RD&D are
    delivering value for taxpayers by fostering the development of a
    domestic energy source that strengthens our national security, provides
    rural economic development, spurs new high-tech jobs, and protects the
    environment.
        While the wind industry continues adding new generation capacity,
    challenges still exist. Continued support for DOE's Wind Energy Program
    is vital to helping wind become a more prominent energy source, which
    will benefit the economy and environment. To ensure that funding levels
    are commensurate with our Nation's need for more domestic energy, AWEA
    urges the subcommittee to provide $144.2 million for the Wind Energy
    Program in fiscal year 2012. Along with other key Federal policies,
    both new and sustained, greater RD&D funding through DOE will help
    transform the 20-percent wind vision into a reality.
        AWEA appreciates this opportunity to provide testimony on DOE's
    fiscal year 2012 Wind Energy Program budget before the Senate
    Appropriations Subcommittee on Energy and Water Development. We thank
    the subcommittee for its time and attention to our request.
                                     ______

              Prepared Statement of Anadarko Petroleum Corporation

        The President's fiscal year 2012 budget includes the elimination of
    funding for the Oil and Gas Research and Development Program at the
    Department of Energy (DOE), as well as a request for legislation to
    repeal section 999 of the Energy Policy Act of 2005, which has created
    a valuable public/private partnership to maximize the value of domestic
    energy resources.
        At this time, when the security of foreign energy sources is
    questionable and the high price of imported energy is damaging the U.S.
    economy, responsible development of domestic resources is a winning
    proposition for the citizens of the United States. The United States
    has vast resources of clean natural gas locked in shale and other tight
    formations, as well as substantial gas and liquid reserves located
    offshore in waters too deep for economic production with current
    technology. Alternative (nonhydrocarbon) energy sources will not make a
    significant contribution to the Nation's energy supply for the next 10
    to 20 years, so our Nation's energy security depends on our ability to
    develop the natural gas resources in a safe and environmentally
    responsible fashion.
        The U.S. oil and gas industry is unparalleled in its ability to
    solve the tough engineering problems associated with oil and gas
    production in challenging environments around the world, but the
    economic development of domestic shale gas and other challenging
    resources requires the development of basic scientific knowledge and
    novel engineering concepts that are best accomplished in partnership
    between industry and the research establishment in the United States.
    The Oil and Gas Research and Development Program in DOE is a hallmark
    of such a partnership. For example, the program was crucial in bringing
    a resource such as coalbed methane from marginally economic status to
    the state of development where it makes a significant contribution to
    the Nation's gas supply, and attracts industry investment without
    Government subsidy.
        The Nation needs this type of research and development investment
    in today's marginally economic resources in order to develop the
    technology that will attract tomorrow's industry investment and ensure
    secure domestic sources for critical energy needs in the near future.
    Now is definitely not the time to eliminate funding for the Oil and Gas
    Research and Development Program at DOE.
                                     ______

             Prepared Statement of Bob Lawrence & Associates, Inc.

        Madam Chairman and members of the subcommittee: My name is Dr.
    Lloyd R. (Bob) Lawrence, Jr., and I am president of Bob Lawrence &
    Associates, Inc., a consulting firm in Alexandria, Virginia. I
    appreciate the opportunity to come before you today to discuss a key
    infrastructure problem facing our Nation, our electric grid; and a key
    solution, Advanced Conductor Technology. Specifically, I wish to
    discuss two key technological solutions for major grid problems, one
    solution being composite conductor technology, and the second solution
    being High Temperature Superconductor technology. During the past 7 or
    8 years, these two technologies, together, have been funded at an
    annual level of about $25 million. For reasons that are not clearly
    explained or understood, the fiscal year 2012 request suggests zeroing
    out the promising technology advances in these areas. I am here to
    request that the subcommittee restore Advanced Conductor Technology to
    a reduced but needed level of $20 million.
        As you are aware, the backbone of the grid consists of many
    thousands of miles of transmission lines, virtually all of which are
    based on steel core conductors, which are cables constructed with steel
    cores for strength, and wrapped with heavy, aluminum wires which carry
    the electric current. Much of the Nation's electric grid is 40 to 50
    years old, and is in need of modernization and/or expansion to meet the
    growing electrical needs of the country, and the modern need for ultra
    high reliability to service our computer fleet and modern manufacturing
    processes.
        The Congressional Budget Request for the Office of Electricity
    Delivery and Energy Reliability (OE) states that the request is ``OE's
    leadership in developing `next generation' electric grid technologies,
    tools, and techniques.'' Further, the request states that ``today's
    electric grid was designed and constructed in the last century before
    cell phones, personal computers, and the Internet.'' And ``society's
    changing needs have pushed an aging and sometimes congested grid to its
    operating limits.'' Finally, ``A modern electric grid is critical to
    meeting the Nation's energy, environmental, and security goals.''
        The request states, unequivocally, that; ``Without the development
    and deployment of `next generation' electric transmission,
    distribution, and customer technologies, the grid could become a
    barrier to the adoption of cleaner energy supplies and more efficient
    demand-side measures.''
        All that being said, the OE request is for $237,717,000, none of
    which is for research and development on advanced conductors, the basic
    structure of the grid.
        One solution which has shown extraordinary success, with additional
    promise, is the ``composite core'' technology. In this case, the steel
    core of conventional cable is replaced with a composite core providing
    for higher-temperature operation, with lower sag, and higher
    conductivity. The composite, itself, can be one of a number of
    different materials, individually chosen for its individual properties.
    The most successful to date, developed under a joint Department of
    Energy-Industry program is the Aluminum Matrix Technology composite
    core, also known as Aluminum Conductor Composite Reinforced. With a
    one-for-one replacement against conventional, steel core technology,
    the composite core has shown a doubling of electricity carrying
    capacity, with the same sized cable. This, then, allows for the
    doubling of capacity in critical transmission lines without needing any
    additional rights-of-way or additional tower structures. This provides
    huge environmental and permitting advantages, substantially lower cost
    of increased capacity, and a much shorter time from concept to
    operation. The producer of this modern grid option just celebrated the
    1,000th mile of commercial production and installation of ACCR. Due to
    the substantial ratepayer benefits demonstrated to date, further
    research in the composite conductor area is a productive and logical
    path to follow.
        A second solution, which will take additional time for broad entry
    into the electrical marketplace, is High Temperature Superconductivity,
    also known as HTS. Twenty years ago, laboratory scientists were
    ecstatic when a small, centimeter-squared wafer of HTS material could
    be shown to conduct electricity, without resistance, at the temperature
    of liquid helium. Today, according to the OE budget request, the
    technology has come to the point where HTS laboratories have
    ``Demonstrated consistent production of second generation, High
    Temperature Superconductivity wire (greater than 300 meters long), with
    70,000 ampere-meters critical current-length. Madam Chairman, I first
    worked on a Government grant in a University laboratory in the fall of
    1964, nearly 47 years ago. I have been involved in Research and
    Development all my life. When you see a technology move forward,
    continuously, such as the HTS technology continues to move, it is not
    logical to cut it off and end its forward motion, when it promises such
    substantial benefits. Worst of all, you will lose the experience,
    knowledge, and corporate memories of the researchers and engineers who
    work on the technology, because they will be on to something else. You
    need to provide the funds to keep the present teams together.
        HTS technology will have its first grid applications in high-
    capacity, underground transmission cables, Fault Current Limiters, and
    transformers. Additional benefits will come from the smaller
    ``footprint'' required to provide HTS substations. The first grid
    application is likely to be underneath our electrically congested
    cities, where HTS transmission and distribution cables can provide much
    higher electrical capacity in the same electrical conduits presently
    occupied by conventional technology.
        In short, it is in the strong public interest to continue the
    Advanced Cables and Conductors program, addressing both composite
    technologies and high temperature superconductors, at a reduced level
    of $20 million for fiscal year 2012.
        I thank you for your attention to this testimony.
                                     ______

     Prepared Statement of the Center for Advanced Separation Technologies

        Honorable Chairwoman Feinstein, Ranking Member Alexander, and
    members of the subcommittee, I appreciate the opportunity to submit
    this testimony to your subcommittee on behalf of the Center for
    Advanced Separation Technologies (CAST). The center is a consortium of
    five universities with strong programs in energy and minerals
    resources. I and the representatives of the member universities
    participating in the consortium as listed--Richard A. Bajura--West
    Virginia University; Rick Q. Honaker--University of Kentucky; Peter H.
    Knudsen--Montana Tech of the University of Montana; and Jan D. Miller--
    University of Utah--are writing this testimony to request that your
    subcommittee appropriate research funding for advanced separations as
    part of the Fuels Program, Fossil Energy Research and Development,
    Department of Energy (DOE). The advanced separations research is
    mandated by the Energy Policy Act of 2005, title IX, subtitle F,
    section 962.
        In 2010, the U.S. mining industry produced coal and mineral
    concentrates with a sales value of $107.5 billion at the mine mouth.
    These raw materials were used to produce approximately 50 percent of
    the Nation's electricity and various mineral materials worth $578
    billion. According to the 2011 Mineral Commodity Summary published by
    the U.S. Geological Survey (USGS), the value-added mineral materials
    contributed $2.1 billion to the Nation's economy, which accounted for
    14.4 percent of GDP. Further, some of the mineral materials produced by
    the U.S. mining industry are of strategic importance to the development
    of renewable energy resources and the defense industry. Despite the
    importance of the mining industry, there are no federally funded
    research and development (R&D) programs that help the industry to do
    better in meeting the environmental regulations and the national needs.
        I would like to address two major issues the U.S. mining industry
    is facing today. One concerns with the coal industry complying with the
    Clean Water Act, and the other is developing domestic mineral resources
    to supply the rare earth elements (REE) for the energy and defense
    industries.
        In 2009, the United States produced 1.07 billion tons of coal, with
    55 percent of which produced in the Western United States and 45
    percent in the East. The bulk of the mined coal in the East is washed
    in water to remove mineral matter impurities. Burning coal as mined
    incurs a high cost of shipping and produces large amounts of ash,
    SO2, mercury, and other undesirable elements. Most of the
    mineral matter is removed at mine sites, and the efficiency of cleaning
    coal is high for the coarse coal, which is larger than approximately
    0.15 mm in size. However, cleaning finer coal becomes more costly and
    difficult, causing some operators to discard the finer size fraction
    despite the fact that the fine coal refuse contains recoverable coal.
    Some companies recover part of the fine coal using the process known as
    flotation, while discarding ultrafine coal smaller than 0.044 mm in
    size. A recent congressionally directed study conducted by the National
    Research Council (NRC) showed that 70-90 million tons of fine refuse is
    being discarded to 713 active slurry and fresh water impoundments in
    the United States. Assuming that 30-40 million tons of the refuse is
    recoverable coal, the dollar value of the coal wasted in this manner is
    estimated to be $2-$2.6 billion per year.
        A study conducted by DOE in the 1980s showed that approximately 2-
    2.5 billion tons of fine coal has been discarded over the years to
    numerous impoundments. The total amounts may be close to 4 billion tons
    by now as the coal industry continued to discard the ultrafine coal
    since the DOE report was written, and the coal production has also been
    steadily increasing. Assuming that roughly one-third of this amount is
    recoverable, the dollar value of the coal discarded in the existing
    impoundments may exceed $100 billion.
        Some companies discard the fine coal slurry to underground mine
    workings, while others store it in large impoundments. There are
    several citizens groups in the Appalachian coal fields opposing to
    these practices by citing violation of the Clean Water Act. Some groups
    contend that the fine coal impoundments represent the worst form of
    valley-fill mining. To address these issues, the West Virginia
    legislature is debating legislation. If the legislature bans permits
    for new impoundments or mandates elimination of impoundments by law,
    the cost of producing coal would rise significantly and can adversely
    affect the Nation's economy.
        A better alternative would be a technological solution. CAST has
    been developing advanced technologies that can be used to help
    companies eliminate the problem at the source, i.e., stop discarding
    fine coal to impoundments or injecting it into old underground
    workings, and further to recover the coal from existing impoundments. A
    series of advanced technologies has already been developed, which
    include the MicrocelTM flotation column, dewatering aids,
    and hyperbaric centrifuge, all of which are marketed commercially under
    appropriate license agreements. The hyperbaric centrifuge was tested at
    pilot scale in 2009, and the successful test results have been reported
    in a DOE Fossil Energy Techline report on February 9, 2010. Encouraged
    by the test results, a first full-scale unit was tested successfully in
    February 2010, in Alabama, and the results have been reported in the
    Techline again on January 4, 2011. On the basis of the successful test
    results, the company has installed additional units for commercial use.
    It is believed that other companies will follow the suite.
        The hyperbaric centrifuge described above is an advanced dewatering
    technology. It is useful for separating spent water from clean coal;
    however it is not designed to remove mineral matter from ultrafine
    coal. Therefore, CAST has been developing a new technology that can
    remove both mineral matter and water simultaneously, so that it can be
    used to recover coal from the fine coal refuse that has been deposited
    in impoundments. Laboratory experiments conducted on ultrafine refuse
    samples consisting of particles that are finer than 0.044 mm showed
    that this new process can be used to reduce the ash contents to 3-4
    percent by weight and the moisture contents to 1-2 percent by weight,
    with 94-98-percent coal recoveries. An international patent application
    has been filed on the basis of the laboratory test results. It is
    necessary, however, that scale-up tests be conducted at 1-3 tons/hour
    capacity before the technology can be commercialized.
        With the remaining pages of this testimony, I would like to address
    the needs for R&D funding to develop advanced separation technologies
    that can be used to recover minerals containing REE from domestic
    resources. China produced 55,000 metric tons of the rare earth oxides
    (REO) in 2009, which accounted for 97 percent of the world production.
    Recently, the Chinese Government announced that it would impose
    production and export quotas for the REO. This new policy created
    serious concerns in the United States and many other countries that
    have been relying on the Chinese export of the rare earths. As shown in
    the CRS report for the Congress (R41744), REEs are critical elements
    for the manufacture of the world's strongest permanent magnets, which
    are essential components of various military weapons systems such as
    precision-guided missiles, smart bombs, aircrafts, etc.
        The United States used to be the world's largest producer of REE
    during 1960s and 1980s. Due to the high cost (mainly labor) of
    production, and the stringent environmental constraints, the production
    shifted gradually to China. However, the United States still has 13
    billion metric tons of reserves. The major rare earth minerals in the
    United States are basinasite ((Ce,La,Y)CO3F) and monazite
    ((Ce,La,Y,Th)PO4) that are recovered by flotation. In China,
    the ores containing these minerals are in the range of 4-7 percent,
    which are increased to 50 to 70 percent by flotation. The basinasite
    and monazite concentrates are then treated chemically to extract
    different REOs and rare earth metals.
        As is well known, REEs are not rare. In average, they are more
    abundant than copper and silver except that they do not occur in
    concentrated forms, making it difficult to mine economically. Further,
    the mineral grains are very small, usually smaller than 0.074 mm, which
    also contributes to the high costs of separation (or processing). In
    the United States, the mineable rare earth deposits are found in
    Mountain Pass, California; Bear Lodge, Wyoming; Diamond Creek, Idaho;
    Elk Creek, Nebraska; Lemhi Pass, Idaho-Montana; and also in South and
    North Carolina.
        The key technology that is currently used to separate rare earth
    minerals from associated gangue minerals is flotation, which is also
    used for the separating mineral matter from coal and for the separation
    of one mineral from another in the mining industry. The
    MicrocelTM flotation technology, which has been developed by
    CAST and is used commercially in the coal and base metals industries,
    can also be used for the separation of rare earth minerals. What is of
    critical importance in the flotation separation of these uncommon
    minerals is the control of surface chemistry of the minerals involved.
    If your subcommittee appropriates research and development funding for
    the fiscal year 2012, CAST can develop reagents that can facilitate the
    beneficiation of domestic rare earth mineral resources.
        CAST has also developed a mathematical model for flotation in
    general. Unlike other models developed to date, it is based on first
    principles. Therefore, it has predictive and diagnostic capabilities.
    If funding becomes available, a model-based computer simulator will be
    developed for applications to the separation of rare earth minerals.
        As noted above, CAST has developed a novel separation process for
    fine coal cleaning, in which both mineral matter and water can be
    separated simultaneously from coal. This process is more selective than
    flotation, particularly for the separation of fine particles. This
    process can be further developed to recover rare earth minerals.
        CAST is a premiere research center for developing advanced
    separation technologies for the minerals and coal industries. Many of
    the technologies developed at the center are commercially used in the
    industry. Some of the technologies developed more recently will be able
    to help the coal industry stop the practice of discarding fine coal to
    the environment and at the same time maximize the utilization of a
    valuable energy resource. Further, they can also be used to recover
    coal from the 4 billion tons of fine refuse that has been discarded in
    numerous impoundments and thereby create jobs. CAST also has acquired
    expertise to develop separation technologies that can be used to
    produce REE from domestic resources, so that the United States can
    continue developing renewable energy resources and secure the defense
    industry.
                                     ______

          Prepared Statement of the Coal Utilization Research Council

                                  INTRODUCTION

        This statement is submitted on behalf of the membership of the Coal
    Utilization Research Council (CURC), an organization of coal-using
    utilities, coal producers, equipment suppliers, universities and
    institutions of higher learning, and several State government entities
    interested and involved in the use of coal resources and the
    development of coal-based technologies.\1\ Members of CURC have
    developed, together with the Electric Power Research Institute (EPRI),
    a Technology Roadmap that defines a research, development, and
    demonstration (RD&D) program that focuses upon the rapid development of
    cost-effective advanced coal and carbon capture and sequestration (CCS)
    technologies (www.coal.org) and the recommendations discussed in this
    testimony are keyed off this program.
    ---------------------------------------------------------------------------
        \1\ Several members of CURC are not-for-profit organizations
    designated as such for Federal tax law purposes. Such organizations are
    prohibited in whole or in part from undertaking advocacy activities
    with respect to Federal Government appropriations. This written
    statement could be construed as such an activity. Membership
    contributions made to CURC by these organizations are not used for
    these advocacy purposes; rather such contributions are utilized to
    undertake analyses and other educational activities as provided by
    CURC.
    ---------------------------------------------------------------------------
     IMPORTANCE OF THE DEPARTMENT'S FOSSIL ENERGY RESEARCH AND DEVELOPMENT
                                    PROGRAM

        The President recently announced his intent to launch a program
    aimed at achieving domestic energy security by increasing the
    production of America's domestic energy resources, and by producing
    them in a manner consistent with responsible stewardship of the
    environment. In order to fuel our recovering economy and ensure jobs
    are created, coal must be a part of the President's program. In turn,
    the Department of Energy's (DOE) Fossil Energy RD&D program is
    fundamental to ensuring coal will play a vital role in our Nation's
    energy future.
        The Department's coal RD&D program seeks to develop more efficient
    and cleaner advanced coal technologies, including technologies to
    capture and store CO2 emissions from the use of coal. The
    Department's program has a proven track record of partnering with
    industry to overcome the challenges of using coal and controlling its
    emissions. The proof of this successful partnership is evidenced by the
    fact that since the inception of the Clean Air Act in 1970, the use of
    coal in this country has increased by more than 200 percent while the
    emissions of criteria pollutants has decreased by an average of 88
    percent. This success is largely attributable to our Nation's
    continuing investments in the RD&D of clean-coal technologies.
        Similarly, the actual tons of coal used in the United States are
    expected to increase over the next several decades. The challenge is to
    accompany these increases in coal use with the development of
    technologies to address environmental concerns at lower and lower
    overall costs. Successful technology investments will enable the Nation
    to continue to reap the economic and energy security benefits
    associated with use of our most abundant domestic fossil fuel resource
    in a manner that is respectful of the environment. It also means that
    the United States will retain technology leadership in the use of coal
    and this can mean exporting products, growing jobs, and assuring that
    developing economies that use coal will have access to technologies
    that assure a low carbon and overall environmental footprint.

     COMMENTS ON SIGNIFICANT ISSUES RELATED TO THE FISCAL YEAR 2012 BUDGET
                                    REQUEST

        The programs administered and supported through the Department's
    Fossil Energy office have been distinguished by efforts to foster
    partnerships with industry RD&D efforts, as well as a broad spectrum of
    university research organizations. These programs between industry,
    government, and the academic community have enabled participants to
    actively engage in each part of the technology development chain from
    basic research to applied research and development (R&D), and
    culminating in large-scale technology demonstrations and early
    commercial deployment. During the past several years, a principal focus
    of the DOE's coal R&D program has been the capture and storage of
    carbon dioxide. CURC members have participated in the DOE CCS related
    activity, and will continue to support that RD&D. However, the Nation
    faces additional energy and environmental challenges which would also
    be amenable to collaborative coal-related RD&D by Government and the
    private sector, and these challenges may be more immediate that the
    climate challenge. We recommend greater balance between support for
    CCS-related activities and other coal-related RD&D, as set forth below.

                            SPECIFIC RECOMMENDATIONS

        The Energy Information Administration (EIA) projects that coal will
    continue to provide more than 40 percent of our Nation's electricity in
    2035. And yet, despite the enormous contributions that the Department's
    Fossil Energy program has made to the development and successful
    commercialization of clean-coal technologies, the President's fiscal
    year 2012 budget recommends a 30-percent decrease in funding from
    fiscal year 2010 levels. Understanding the shared desire to constrain
    discretionary spending, we believe that it would be counterproductive
    to reduce Federal investment which results in lower-cost electricity
    and increased competitiveness of American goods. At a minimum, CURC
    recommends that the budget be maintained at the fiscal year 2010 level
    of $400 million for the coal R&D program, and that additional resources
    be appropriated to put us in a position to conduct second-generation
    technology demonstrations by 2016.
    Department of Energy Proposal To Restructure the Coal Research,
            Development, and Demonstration Program
        CURC believes that the proposed restructuring of the DOE coal RD&D
    program provides more transparency on the types of activities that are
    under the portfolio of each program area, and provides specific
    recommendations on those programs as proposed under the fiscal year
    2012 budget restructuring:
    Demonstrations
          Clean Coal Power Initiative.--For the third consecutive year, the
            administration did not request funding for large-scale
            demonstrations of advanced coal technology on the basis of
            funding provided by the Recovery Act for Clean Coal Power
            Initiative (CCPI) Round III. As with other new and emerging
            technologies supported by the Department, support cannot be
            discontinued with this limited number of demonstration
            projects. A sustained and expanded demonstration program is
            integral to the commercialization of advanced coal and CCS
            technologies. In its proposed program plan, the Department
            suggests that CCPI Round IV must be initiated in 2016 if the
            programmatic goal of demonstrating second-generation
            technologies by 2020 is to be achieved. Incremental funding for
            the CCPI IV program must be provided in the fiscal year 2012
            budget, and each year thereafter, in order to initiate a CCPI
            Round IV program in 2016.
          FutureGen.--Funding for FutureGen has been made available through
            the Recovery Act. CURC reiterates its support for this project
            as an important and necessary step in the demonstration of an
            integrated CCS system. This type of government-supported
            project is vital to make CCS a commercial reality.
    Power Systems Research and Development
                    Carbon Storage
        CURC recommends an increase of $10 million more than the
    President's request for a total of $125.5 million. This increase
    corresponds with the funding recommended in the CURC-EPRI roadmap and
    will allow for the Phase III Regional Carbon Sequestration Partnership
    tests to proceed as planned, and will allow a reasonably robust set of
    projects to be selected in the current small-scale-test funding
    opportunity announcement. The program should emphasize beneficial use
    of carbon dioxide for hydrocarbon recovery to accelerate the
    development of the infrastructure needed to permit full-scale
    deployment of CCS in the future.
                    Advanced Energy Systems
          Advanced Combustion Systems.--This program should support
            development of technologies that increase the efficiency of
            coal conversion to energy and contribute to reducing the costs
            of carbon capture from combustion-based power generation, for
            both new and existing steam powerplants. CURC recommends that
            the budget be increased by $20 million (for a total of $30.7
            million) in fiscal year 2012 as follows:
        --Restore the materials budget for ultrasupercritical (USC) (high
                temperature and pressure) boilers/steam turbines back to $5
                million. Without an increase, this program will be phased
                out and there will be no path forward toward a highly
                efficient, USC demonstration plant in the United States.
                Without DOE completing this program, the United States will
                lag behind India, China, and Japan on technology and
                competitiveness.
        --Add $5 million for efficiency and heat rate improvements (beyond
                just higher-steam temperature conditions) for both existing
                and advanced plants. Efficiency improvements are a
                fundamental step toward zero emission power and contribute
                toward reduced conventional emissions, reduced
                CO2 emissions, and lower cost CO2
                capture systems.
        --Increase the Advanced Combustion Systems budget for oxy-firing
                systems by $10 million. The proposed fiscal year 2012
                budget is well below the CURC-EPRI Roadmap and inadequate
                to fund both continuing oxy-fired projects plus a new
                funding opportunity that will focus on second-generation
                oxy-fired technologies.
          Gasification Systems.\2\--DOE studies have shown that integrated
            gasification combined cycle (IGCC) with carbon capture has the
            potential to achieve a cost of electricity at parity with
            current new coal generation without CCS. Achieving this goal
            requires:
        --technology improvements that reduce the parasitic losses of
                carbon capture;
        --reduction of IGCC base cost through advanced modeling and
                construction techniques; and
        --increasing gasifier availability to 90 percent.
          The proposed fiscal year 2012 budget reduction will add years and
            uncertainty to the schedules for validation and commercial
            availability of currently identified improvements, and it does
            not provide funding for new solicitations needed to advance
            technology innovations. CURC recommends that the fiscal year
            2012 gasification systems budget be increased by $26 million,
            for a funding total of $64.9 million, to support new RD&D
            opportunities that improve gasifier availability ($10 million);
            achieve major cost reductions ($10 million); and improve cost
            and performance for gasification-based coal conversion to
            chemicals and fuels ($6 million).
    ---------------------------------------------------------------------------
        \2\ It is also important to note that advances in this area not
    only support advanced IGCC, but support all gasification programs in
    general, including industrial gasification, biomass gasification,
    hydrogen and fertilizer production, SNG, and coal-to-liquids programs
    and to these ends this program should encompass the concept of advanced
    gasification technology.
    ---------------------------------------------------------------------------
          Advanced Turbines.--CURC recommends that the Advanced Turbine
            program be increased by $17.4 million for a total of $32
            million. The Department has been partnering with industry to
            develop the latest generation of advanced gas turbines (the
            ``G'' and ``H'' class of turbines), but these turbines are not
            yet ready to meet the demands of IGCC plants with high levels
            of CO2 capture. Reduced funding in the last few
            years has delayed progress and jeopardized DOE's goal of
            developing advanced turbines capable of improving the total
            efficiency of an IGCC plant by 5 percentage points by 2015. The
            proposed reductions to the turbine budget will lead to an even
            more significant delay in meeting the 2015 targets. These gas
            turbine technologies will be at risk of not being ready for the
            next CCPI demonstration program opportunity; thereby, extending
            the availability of critical technologies to help lower the
            cost of IGCC well into the next decade.
          Fuels.--Although the President's budget proposes to cut this
            program, CURC recommends the addition of $20 million to
            continue coal conversion RD&D under the fuels program. In 2008,
            we spent $388 billion on imported petroleum products, or 57
            percent of our balance-of-trade deficit. Production of liquid
            transportation fuels from 60-percent coal and 40-percent
            biomass could provide 3 million barrels per day of gasoline
            equivalent by 2020. This program would create new jobs through
            increased coal production, operating coal-to-liquid plants in
            widely dispersed geographic locations, and bolster our
            national, energy, and economic security through producing
            indigenous fuels. Coal plus biomass fuels meet the requirements
            of the Energy Policy Act of 2007 and have been shown to be net
            carbon sinks regarding carbon emissions. Funding should be
            directed toward simulation modeling and pilot plant testing on
            eastern, mid-content, and western coals, biomass
            characterization and feeding, and transformational research to
            reduce the energy penalty costs of conversion processes and
            plant capital costs which are currently a deterrent to
            implementation coal to liquids technologies.
                Carbon Capture
          Postcombustion Capture.--CURC agrees with the administration's
            request for fiscal year 2012 of $55.5 million for this program.
            However, funding should also target concepts at pilot scale as
            well as lab scale. In this program, DOE should also consider
            the development of technologies that capitalize on the use of
            hardware being installed or planned for other uses at existing
            facilities and that seek to co-benefit emission reductions that
            may achieve capture levels of less than 90 percent from flue
            gas streams. Technologies that have the ability to achieve
            incremental reductions at lower costs of electricity should be
            considered as part of the broader CCS goals of the DOE program.
          Pre-Combustion Capture.--CURC agrees with the administration's
            request for fiscal year 2012 of $13.4 million for this program.
            Likewise for pre-combustion capture, funding should be robust
            and target concepts at pilot scale as well as lab-scale.
    Cross-Cutting Research
        CURC recommends that funding for the Cross-Cutting Research program
    be increased by $15.4 million (for a total of $54.15 million) to
    support the following activities that will develop the next generation
    of advanced coal plants:
      --increase the budget for high-performance materials research from
            $0.973 to $5 million in order to support development of new
            high-temperature and pressure materials that will allow coal
            plants to generate electricity much more efficiently and,
            therefore, reduce overall emissions of both criteria pollutants
            and greenhouse gas emissions;
      --increase funding for university coal research from $2.4 to $4.8
            million to ensure there is a foundation for innovation with our
            university partners in developing advanced coal technologies;
            and
      --provide $5 million in funding for a water management research
            program to develop technologies that reduce water consumption
            for powerplant cooling.
        The new emphasis upon computational modeling in the DOE program is
    conceptually attractive as a means to evaluate different concepts that
    are being developed in the coal research program, and could be useful
    in moving those technologies from basic research into scalable
    component technologies. Modeling is also useful in directing attention
    to targeted areas where further engineering research is needed to solve
    operational problems. While modeling may be successful in reducing the
    amount of time and funding required to develop, demonstrate and deploy
    technology, modeling simply cannot replace practical applications and
    demonstrations of the technology. Members of CURC do not believe that
    modeling and simulation programs should serve as surrogates in lieu of
    demonstrations at any scale that provide real operating results. CURC
    is supportive of efforts to fund the development of computational
    models if the budget is robust enough to fund all of the priorities
    identified in this testimony, but CURC does not believe funding should
    be provided at the expense of funding other R&D and demonstration
    activities.
    Title XVII Loan Guarantee Program
        The DOE loan guarantee program is one of several important tools
    that act to reduce the large cost penalty associated with the
    installation of first-of-a-kind advanced coal systems with CCS. Other
    tools, such as the Department's CCPI demonstration program, as well as
    investment tax incentives and CO2 sequestration credits, are
    also necessary and equally as important, as these financial assistance
    programs must in some cases be used in combination in order to bring
    down the cost of first of a kind projects and/or provide different
    value to different business models, and therefore some tools may be
    used over others for specific projects and entities. CURC recommends
    that additional authority for fossil energy projects be provided in the
    fiscal year 2012 budget to ensure this tool is available to support the
    deployment of new fossil-based projects.
                                     ______

            Prepared Statement of the Colorado Oil & Gas Association

        The Colorado Oil & Gas Association (COGA) is submitting written
    testimony to express our concern with the President's fiscal year 2012
    budget request to eliminate funding for the Department of Energy's
    (DOE) Oil and Gas Research and Development Program (R&D program). COGA
    is worried that defunding a program designed to ensure the United
    States is able to take full advantage of clean and abundant domestic
    energy sources will curtail innovative technology, slow economic
    recovery, and increase our dependence on foreign energy sources.
        COGA is a Colorado nonprofit corporation formed to foster and
    promote the beneficial, efficient, responsible and environmentally
    sound development, production, and use of Colorado oil and natural gas.
    Colorado's oil and gas industry contributes to the economic recovery by
    supporting more than 190,000 jobs for families and much-needed revenues
    for State and local governments while providing Americans with clean,
    safe, affordable, and abundant domestic energy sources. The
    ramifications of defunding the R&D program will be felt across the
    Nation, including Colorado which has recently had vast amounts of
    extractable resources become economical because of technological
    innovation.
        Since the late 1970s the DOE has engaged in research and
    development for oil and gas, making valuable contributions to
    development of our vast domestic energy resources. DOE projects have
    achieved success in increasing exploration and production; addressing
    environmental protection through reduction of environmental impacts;
    and in the development of ``game changing'' technology such as fuel
    cells, gas turbines, and infrastructure improvements. Projects funded
    through the R&D program are essential to promote efficiency and
    responsibility in the extraction of our natural resources. Without
    adequate investment, domestic development of innovative technology will
    be hindered and further benefits go unrealized.
        The market alone will not drive technological and environmental
    innovations in the oil and gas industry. While many of the ``majors''
    (large companies with refining and marketing capabilities) engage in
    research and development, the reality is that 90 percent of all oil and
    gas wells are owned by independents (operations primarily dedicated to
    exploration and production). Although varied in size, the vast majority
    of independents do not have the resources to engage in research and
    development. Thus, without economic encouragement industry research and
    development is likely to yield lesser benefits.
        Additionally, the R&D program is essential in promoting cleaner and
    more environmentally friendly ways to extract oil and gas resources.
    Many independents lack the resources to pursue these R&D endeavors,
    thus technology to mitigate potential environmental disturbances is
    unlikely to reach its full potential.
        Increasing domestic oil and natural gas production will result in
    increased support for independent producers, less reliance on imported
    oil, and increased government revenues from royalties and taxes. We
    believe that our tremendous domestic oil and natural gas reserves
    provide a significant opportunity for the United States to reduce our
    dependence on foreign oil while reducing environmental impacts
    associated with energy development. But to do this, we need to work
    together in developing technology to ensure we have the energy to power
    our future. Thus, COGA respectfully urges the subcommittee to
    reconsider the proposed defunding of the DOE Oil and Gas Research and
    Development Program.
                                     ______

                       Prepared Statement of Cummins Inc.

        Cummins Inc., headquartered in Columbus, Indiana, is a corporation
    of complementary business units that design, manufacture, distribute
    and service engines and related technologies, including fuel systems,
    controls, air handling, filtration, emission solutions, and electrical
    power-generation systems. The funding requests outlined below are
    critically important to Cummins' research and development efforts and
    would also represent a sound Federal investment toward a cleaner
    environment and improved energy efficiency for our Nation. We request
    that the subcommittee fund the programs as identified below.

                         OFFICE OF VEHICLE TECHNOLOGIES

        Advanced Combustion Engine Research and Development.--Increase the
    request of $49 million by $20 million to bring the program total to $69
    million in fiscal year 2012, $56 million was appropriated in fiscal
    year 2010. Two important areas of research included in the Advanced
    Combustion Engine research and development (R&D) are:
      --the development of more energy-efficient technologies for diesel
            and gas engines, which will contribute to petroleum use
            reduction; and
      --the development of robust engineering design tools for large-scale
            computational combustion analysis to develop cost-effective and
            -efficient combustion engines.
        Light duty trucks continue to be a large segment of the surface
    transportation fleet. The Department of Energy launched the Advanced
    Power Train (APT) light duty (LD) initiative to reduce fuel consumption
    in this sector. The goal of the APT-LD program is to deliver cost-
    competitive technologies for a standard light duty pickup truck which
    can achieve at least a 40-percent improvement in fuel economy over the
    state-of-the-art gasoline engines while meeting Tier 2 Bin 2 tailpipe
    emissions (the same emissions standard required for gasoline powered
    vehicles). Class 2a trucks consume nearly 3.9 million oil barrels/day
    of petroleum fuel. A fuel efficiency enhancement of 40 percent can
    reduce petroleum consumption by 1.5 million oil barrels/day. This
    enhancement will provide energy security by lowering petroleum imports,
    greenhouse gas (GHG) emissions and the trade deficit. Innovative high-
    risk technologies, such as low-temperature combustion, variable-valve
    actuation and closed-loop selective catalytic reduction controls are
    planned under this project. The funding increase will address
    significant technology hurdles in the areas of on-board diagnostics,
    parasitic loss reduction, after-treatment requirements, and the use of
    renewable fuels. Without the increased funding, research activities
    would be significantly limited. We understand the President's budget
    would provide $10 million in funding for the APT-LD program. We believe
    $15 million is needed in this area to adequately cover all R&D
    activities.
        Advanced Computing, a large-scale computational simulation
    initiative, is targeted at achieving cost-effective means for even
    greater fuel efficiency; 60-percent thermal efficiency engines. Models
    will be developed for advanced chemical kinetics, computational fluid
    dynamics and large eddy simulations. These models will simulate
    advanced combustion regimes, transient events and cycle-to-cycle
    variability. Development of better solver algorithms will minimize
    cycle-to-cycle variations and more rapid optimization of overall
    engine.
        These projects are in line with the administrations investment in
    clean-energy technologies to reduce dependence on foreign oil. We
    understand the Department of Energy (DOE) intends to allocate $15
    million out of the Advanced Combustion Engine budget to fund Advanced
    Computing. We support this allocation. However, adequate funds do not
    exist with Advanced Combustion Engine to cover this activity.
    Therefore, we are requesting and additional $15 million in funding to
    cover these important activities.

                   OFFICE OF INDUSTRIAL TECHNOLOGIES PROGRAM

        Industries of the Future (Crosscutting)/Next-Generation
    Manufacturing Processes, Combined Heat and Power Generation --Advanced
    Reciprocating Engine Systems.--The Combined Heat and Power (CHP)
    Generation budget line includes the important Advanced Reciprocating
    Engine Systems (ARES) program funded at approximately $10 million in
    fiscal year 2012. We request that ARES program funding be increased by
    $3 million to $13 million in fiscal year 2012. The ARES program is an
    important component of distributed generation and has applications in
    CHP. The objective of this industry cost-shared program is to develop
    high-efficiency, low-emissions, and cost-effective technologies for
    stationary engine systems (500-6,500 kW) that can use natural gas or
    domestic renewable resources ``opportunity'' fuels. Natural gas-fueled
    reciprocating engine powerplants are preferred for point-of-use power
    generation, low-operating costs, and reliability. Opportunity fuels can
    be renewable fuels (e.g., landfill gases) which exhibit low BTU, lower
    methane number, and varying gas composition. Their use reduces the
    dependence on high-quality pipeline natural gas. Technologies sponsored
    by the ARES program have demonstrated 47-percent engine efficiency (a
    20-40-percent increase from the baseline engines), higher-power
    densities than current products, with an expected reduction in life-
    cycle costs and GHG emissions. Recent technology advances include
    advanced ignition systems, analytical tools for optimum combustion and
    prediction of onset of knock in a field test generator set. The funding
    increase in the fiscal year 2012 budget will support advanced
    technology challenges including combustion enhancements with low BTU
    and methane gases, nitrogen oxides (NOX) reductions,
    advanced sensors and controls, hardware durability, and lower life-
    cycle costs. The development of distributed power generation supports
    national energy security needs, improves protection of critical
    infrastructure and decreases dependence on the national electrical grid
    system through point-of-use energy production.

     INDUSTRIES OF THE FUTURE (CROSSCUTTING)/NEXT-GENERATION MANUFACTURING
                       PROCESSES, COMBINED HEAT AND POWER

        Support the Request of $25 Million in Fiscal Year 2012.--$24.7
    million was appropriated in fiscal year 2010. This project is to
    develop a flexible CHP system which can be deployed in commercial and
    light industrial (100-500kW) applications at a lower total cost of
    ownership. CHP systems offer higher system energy efficiency, lower
    emissions, and economic benefits. Combined heat and power systems use
    an internal combustion engine to produce electricity at point-of-use
    and recover waste heat for heating or cooling purposes. Energy
    intensity of the CHP systems can be reduced in excess of 35 percent due
    primarily to more efficient electrical generation and recovered waste
    heat. Modern engine designs operate with much lower regulated exhaust
    emissions and carbon dioxide. The fiscal year 2012 budget will support
    CHP performance modeling, cost-effective package design, remote
    modeling, and CHP system integration. The project will result in a
    system that is easy to use and inexpensive to install, while providing
    the lowest-emissions internal combustion natural gas engine for a CHP
    system of this size.
        Advanced Combustion Engines--Health Impacts.--No funds were
    requested by the administration for this program. We request an
    increase of $2 million to bring the program total to $2 million in
    fiscal year 2012. The objective of this program is to expand the
    knowledge base relating to the heath implications of emissions
    technologies being developed to meet energy-efficiency goals. The
    Advanced Collaborative Emissions Study (ACES) is funded under this
    program. The ACES program is a cooperative effort between Government
    (DOE, Environmental Protection Agency) and industry (EMA, MECA, API) to
    assess health effects of emissions from 2010 compliant heavy-duty
    engines. The ACES program will include emissions characterization,
    chronic exposure animal bioassays, and identification of any
    unanticipated emissions or health effects from new engine technologies.
    Continuous monitoring of air toxins and source apportionment techniques
    are also proposed.
                                     ______

               Prepared Statement of the Diesel Technology Forum

        The Diesel Technology Forum (DTF) www.dieselforum.org is a not-for-
    profit organization representing diesel engine and equipment makers,
    fuel suppliers and emissions control technology companies. We
    appreciate the opportunity to submit comments regarding certain aspects
    of the fiscal year 2012 proposed budget of the U.S. Department of
    Energy (DOE), particularly its Vehicle Technologies Program (VTP) and
    its various budget activities for commercial vehicles, advanced
    combustion engine research and development (ACE R&D), fuels technology
    and materials research.
        The fiscal year 2012 energy efficiency and renewable energy (EERE)
    budget proposes to substantially reduce investments in several key
    budget activity areas that impact heavy-duty diesel engines, commercial
    vehicles and truck efficiency programs. This includes ACE R&D (reduced
    12.4 percent from fiscal year 2010 appropriated levels; $55.987 million
    to $49 million); a reduction of $5 million for fuels technologies; and
    reduction of $2-$3 million in materials technologies.
        Because of well-established future need, proven past performance,
    and extended societal benefits, funding for Vehicle Technologies
    Programs including ACE R&D, fuels and materials technologies and
    SuperTruck activities has delivered proven benefits and must be
    restored.
        The subcommittee faces a difficult task of setting priorities among
    many competing programs with limited resources. The subcommittee should
    seek to strike a better balance between fully funding programs that are
    known to improve efficiency of existing energy-intensive sectors on a
    near-term basis while at the same time supporting a reasonable vision
    and funding for infrastructure development, deployment and
    electrification of passenger vehicles; the potential energy-saving
    benefits of which may not be realized for several decades or more. We
    recognize that savings will need to be found across all programs but
    are concerned about the disproportionate impact on proven existing
    programs while unprecedented significant new resources are being
    requested elsewhere for new initiatives.
        The commercial vehicle research activities have been cross-cutting
    in scope and shared risk and benefits between DOE, private industry,
    Department of Defense (DOD), Department of Transportation (DOT)and the
    Environmental Protection Agency (EPA). This suite of programs to make
    commercial vehicles more energy efficient--the 21st Century Truck
    Partnership and diesel engine and fuel research--have been among DOE
    EERE's most successful investments. They are proven to have helped meet
    important societal goals of economic growth and small business
    development (economics of more energy efficient commercial truck
    acquisition and ownership); cleaner air (reducing diesel engine
    emissions), reduced reliance on imported oil (increasing commercial
    truck energy efficiency). They have also enhanced our national
    security, through contributing to fuel savings of DOD military
    vehicles. Fuel accounts for 70 percent of the bulk tonnage transported
    to the battlefield and reducing consumption by 1 percent leads to 6,500
    fewer soldier trips, which has been identified with saving lives on the
    battlefield through reduced risk in transporting fuel.\1\
    ---------------------------------------------------------------------------
        \1\ Bochenek, Grace. ``U.S. Army Tank Automotive Research
    Development and Engineering Center, 2010''.
    ---------------------------------------------------------------------------
          Existing Department of Energy Energy Efficiency and Renewable
            Energy Commercial Vehicle and Engine Programs Have Delivered
            Substantial and Proven Economic, Environmental and Energy
            Saving Benefits.--For every $1 invested, advanced combustion
            research delivered $53 in benefits. According to a May 2010
            study \2\ previous advanced combustion research for laser and
            optical diagnostics along with combustion modeling undertaken
            by the DOE and now having been implemented in commercial
            vehicles on the road today saved 17.6 billion gallons of diesel
            fuel over a 12-year period (1995-2007); a 4.5-percent savings
            in fuel consumption more than what would have occurred without
            the program investments. This translates into a monetized
            saving of $34.5 billion in 2008 dollars, and reduction of more
            than 177 million tons of CO2 prevented.
    ---------------------------------------------------------------------------
        \2\ Link, Albert N. ``Retrospective Benefit-Cost Evaluation of U.S.
    DOE Vehicle Combustion Engine R&D Investments, Department of Economics,
    University of North Carolina at Greensboro''; May 2010.
    ---------------------------------------------------------------------------
        The established goal of improving fuel economy by 20 percent for
    commercial vehicles in the ACE R&D has the potential to save more
    energy than the electrification of 1 million cars. Past investments
    have contributed to diesel engine manufacturers being able to meet the
    most stringent emissions standards on record, resulting in today's
    clean diesel technology with near zero emissions of ozone forming
    compounds (nitrogen oxides) and particulate matter. The total health
    and environmental benefits in terms of savings in air pollution and
    energy savings exceed $70 billion according to the previously
    referenced May 2010 study.
          The Ongoing Need To Reduce Energy Consumption From Commercial
            Vehicles is Well Established.--Heavy-duty commercial trucks
            play the central role in the Nation's freight movement and
            goods delivery system, transporting 70 percent of the U.S.
            goods purchased. Diesel-power will be the primary technology of
            choice for providing this service in the foreseeable future due
            to its unmatched combination of efficiency, power, performance,
            reliability, and durability along with economical ownership and
            operation. Tractor-trailer type trucks (Class 8) use 80 percent
            of commercial trucking industry fuel. This accounts for 28
            percent of total U.S. fuel usage. According to DOT, from 1970-
            2007, the number of trucks more than doubled while the mileage
            increased by 3.9 percent during the same period. Economic
            growth and recovery demands more trucking services, more miles
            traveled and more energy consumption. These past and predicted
            future trends underscore the need for continued gains in fuel
            efficiency benefits from continued future investments in
            commercial truck and diesel engine efficiency. Further,
            according to the Advanced Energy Outlook (Figure 2, below) with
            a 75-percent reduction in light-duty oil consumption; heavy-
            duty vehicles will make up the largest share of the consumption
            in the future. As global commodity, heavy-duty petroleum
            consumption already rivals that of light-duty vehicles. U.S.-
            developed fuel efficient technology for commercial vehicles
            through the EERE has had and will continue to have a global
            impact, adding much greater leverage on petroleum demand and
            cost on a global scale.

     Figure 1. The Nation's economy is linked to truck transport. Source.--
                          Argonne National Laboratory.

          Future Societal and Technological Challenges Facing Commercial
            Vehicles are Significant, and Heighten the Need for Continued,
            Robust Government Energy Efficiency and Renewable Energy
            Program Investments.--A landmark final rule from the EPA and
            DOT--National Highway Traffic Safety Administration (NHTSA) is
            expected in July 2011 that will establish the first-ever
            greenhouse gas emissions reduction requirements for commercial
            trucks. Goals for near and long-term reductions in greenhouse
            gas emissions and fuel efficiency improvement will be
            established at that time and will likely stretch the limits of
            currently known technology capabilities. The significant
            funding reductions in the suite of EERE commercial vehicle and
            engine programs in the fiscal year 2012 budget could delay or
            jeopardize gains in meeting these important societal goals.

    Figure 2. Internal DOE analysis, August 2008, comparing Heavy Truck oil
     consumption at AEO 2008 reference case levels with a 75% reduction in
    high-duty oil consumption relative to EIA's AEO 2008 reference case due
     to significant light-duty fuel economy gains and fuel switching. (p.
                                      21)

        Reaching these challenging goals will require substantial
    manufacturer investment in the next 3-5 years at a time when economic
    recovery and market potential for heavy duty commercial trucks remains
    tentative. More than ever, the combined collaborative approach of the
    DOE program of shared research toward common energy saving objectives
    is needed and necessary to assure continued progress and increase the
    speed of development, deployment of technologies, and societal
    benefits.
          Fully Funding Commercial Vehicle Research Budgets Assures
            Continued Gains and Leverage of Ongoing Progress That Will Help
            Expedite Fuel-Saving Technology Development and Deployment
            While Managing Risks That Will Lead to Greater Future Fuel
            Savings.--Given the substantial progress made in the 21st
            century truck program, a framework of continuous progress has
            been developed over time that is a predictive indicator of
            potential future success. Adequate DOE program funding can
            assure that the commercial vehicle, engine and SuperTruck
            program goals of 50-percent increase in freight efficiency
            (ton-miles per gallon) will be more likely to be met. Truck and
            engine manufacturers face the unique challenge of competing
            societal demands of improved efficiency, near-zero emissions
            while meeting customer demands for lowest cost of operation.
            Significant investments in research are required but there are
            diminishing opportunities to recoup the substantial investments
            needed to meet these goals with only an average 200,000-250,000
            heavy duty trucks sold annually. A fully funded SuperTruck
            program can assure these goals are more likely to be
            accomplished earlier than if companies alone shoulder larger
            research demands.
          Commercial Vehicle, Engine and SuperTruck Efficiency Program
            Benefits Reach Beyond Private Industry in the United States, a
            Factor To Be Carefully Considered in the Final
            Decisionmaking.--Collateral benefits have accrued to the
            Department of Defense from the 21st Century Truck Partnership
            program through the efficiency advancements extending to
            military applications and a subsequent reduced dependence on
            petroleum. Continued funding of the vehicle technologies
            program, SuperTruck and ACE R&D will have long-term strategic
            value to reducing petroleum consumption of the U.S. military.
            The United States is the global leader in advanced clean diesel
            engines and efficiency gains here in the United States will
            ultimately impact the global marketplace.

                                  CONCLUSIONS

        There is an incontrovertible and established need to improve energy
    efficiency of the Nation's commercial vehicles. Commercial diesel-
    powered trucks are the backbone of the U.S. economy and the prime
    movers of the Nation's goods movement system, and will be for the
    foreseeable future. Fuel consumption in this sector is projected to
    continue to grow with the economy. Past EERE engine and vehicle
    efficiency programs have delivered substantial and well-documented
    economic, energy and environmental benefits to society. However the
    continued progress of these efforts is in jeopardy due to an imbalanced
    fiscal year 2012 budget request.
        An adequate Government funding stream for the suite of vehicle
    technology programs like SuperTruck and the ACE R&D, fuels technologies
    and materials must be restored to fiscal year 2010 levels to assure
    continued progress and accelerate development and deployment of energy-
    saving technologies. Proposed reductions to the fiscal year 2012 EERE
    funding will jeopardize continued progress at an especially critical
    time as the industry moves to meet new greenhouse gas emissions and
    fuel efficiency goals, near zero emissions levels along with competing
    customer demands with the backdrop of a weakened and recovering
    economy.
        A national energy strategy should seek to balance investments in
    near-term and long-term energy-saving strategies. Proven incremental
    gains in efficiency from existing fuels and technologies, particularly
    in sectors that use the most energy today without viable alternatives
    for the future must be a cornerstone of the national energy program and
    funded accordingly. While battery development and electric-powered
    vehicles may hold great promise, so too should investments in programs
    with assured near-term efficiency gains.
        The diesel engine is the prime mover of America's transportation,
    infrastructure and goods movement today and for the foreseeable future.
    Now near zero emissions and still as the most energy efficient internal
    combustion engine (30-percent more efficient than gasoline), clean
    diesel technology has made great progress and has substantial future
    potential efficiency gains to meet future societal goals.
        We appreciate the opportunity to file these comments. An ongoing
    dialogue with the subcommittee on making best use of limited dollars to
    achieve shared goals of greater energy efficiency while preserving a
    major economic force for the U.S. economy is essential.
                                     ______

                    Prepared Statement of Dr. Steven Bryant

        Defining priorities for Federal research funding is all the more
    important when reductions in overall Federal spending are being
    discussed. One such priority is the small but impactful Strategic
    Center for Natural Gas and Oil within the National Energy Technology
    Laboratory in the Department of Energy.
        The U.S. economy runs on fossil fuel, including 20 million barrels
    per day of crude oil, the greater part of which is imported. But 30
    billion barrels of this essential resource can be extracted from
    domestic reservoirs if improved technology for injecting CO2
    into these reservoirs can be developed. The Strategic Center for
    Natural Gas and Oil has established a visionary program for just this
    purpose.
        Continuation of this program is important for three compelling
    reasons:
      --Recent advances in science and technology outside the oil
            industry--including nanotechnology, novel synthetic chemistry,
            and efficient computational methods--have opened up truly new
            possibilities for substantially increasing recovery of oil by
            injecting carbon dioxide. The Strategic Center for Natural Gas
            and Oil has committed to exploiting these possibilities.
      --Independents and small operators, not the majors, are conducting
            essentially all the carbon dioxide injection for oil recovery
            in the United States. This segment of the oil and gas industry
            is eager to take advantage of new technology. But these
            operators do not have the wherewithal to conduct basic research
            needed to implement new ideas from outside the industry.
      --Federal funding is a critical mechanism for training the next
            generation of engineers and scientists who will implement these
            advanced technologies, working for domestic companies operating
            domestic oil fields--very good jobs that are a boon to local
            and regional economies.
        In view of the often strident discussion of budget priorities in
    Washington and the rest of the country, it seems timely to remind
    members of the subcommittee that over the last 60 years the United
    States has a proud history of investing in basic research at its
    universities. That investment has been repaid countless times over.
    Practitioners educated in this way have contributed to a decades-long
    stream of technical innovation which has maintained U.S. leadership of
    the global economy. CEOs from all business sectors are unanimous on
    this point: Without continued innovation, the U.S. economic leadership
    will surely falter.
        Many Federal programs have worthy justifications for their
    continued existence. But few can offer as large a return on the Federal
    investment as this one in the Strategic Center for Natural Gas and Oil.
    Even fewer provide that return in an area of unquestionably vital
    importance to the U.S. economy and national interest: the continued
    supply of domestically produced oil.
                                     ______

              Prepared Statement of the Edison Electric Institute

        The Edison Electric Institute (EEI) respectfully submits this
    written testimony for the record to the Senate Appropriations
    Subcommittee on Energy and Water Development.
        EEI is the association of U.S. shareholder-owned electric
    companies. Our members serve 95 percent of ultimate electricity
    customers in the shareholder-owned segment of the industry and
    represent approximately 70 percent of the U.S. electric power industry.
        EEI appreciates this opportunity to share our views on some of the
    Department of Energy's (DOE) programs for the fiscal year 2012. We
    believe a robust national energy policy that supports the full
    portfolio of energy resources is critical to our country's national
    security and economic growth. Therefore, we respectfully ask the
    subcommittee to direct sufficient resources toward these critically
    important activities.

                            ELECTRIC TRANSPORTATION

        EEI embraces the goal of having 1 million electric vehicles on the
    road by 2015. The United States faces numerous energy policy
    challenges, but perhaps none looms larger than energy security. Ongoing
    conflict in the Middle East and increasing demand as nations' economies
    recover have left crude oil prices hovering around $110 per barrel.
    U.S. drivers are now paying an average of $3.73 per gallon of gas, a
    65-percent increase in 4 months. We strongly support increasing
    domestic oil supply. Turning to electricity as a transportation fuel is
    critical, too.
        The transformation of the Nation's transportation fleet to one
    fueled in part by domestically produced electricity can gradually help
    reduce our dependence on foreign energy sources. Plug-in electric
    vehicles (PEVs) are being rolled out in major U.S. markets, as
    automobile manufacturers join utilities in embracing electricity as an
    important transportation fuel.
        The job creation potential behind electric transportation is
    enormous. As the Nation transitions to a new era of electric
    transportation, demand for jobs in this new technology sector will
    continue to increase. From manufacturing batteries to building the
    necessary electricity recharging stations, PEVs will create high-
    quality employment opportunities throughout the country. The Federal
    Government estimates that tens of thousands of American jobs will be
    created to manufacture PEV batteries and components.
        The Congress has a significant role to play in securing a place for
    electric vehicles in the transportation fleet. Federal funding is
    crucial to help break down market barriers to the commercial-scale
    deployment of electric vehicles and related infrastructure.
    Accordingly, EEI supports funding for DOE's PEV vehicle technology
    programming, including battery and electric drive technology
    development and grants to communities for the installation of PEV
    recharging infrastructure.

                                 FOSSIL ENERGY

        Coal generates almost 45 percent of our electricity and will
    continue to be an important fuel source for our Nation's electricity
    mix. Coal is the largest domestically produced source of energy in the
    United States.
        EEI urges strong support for carbon capture and storage (CCS) and
    advanced coal technology programs, including loan guarantee authority
    for advanced fossil projects. CCS is a promising and important
    technology that will allow continued utilization of our abundant
    domestic coal reserves to generate a reliable and affordable supply of
    electricity in a cleaner manner. CCS commercialization is still in the
    future, but demonstration technologies hold great promise, and we are
    working with the Congress and the administration to develop policies
    that will accelerate its commercial availability and deployment.

                                 NUCLEAR ENERGY

        EEI urges support for DOE's nuclear loan guarantee program and
    recommends approval of the additional $36 billion requested in loan
    volume for nuclear energy projects. Nuclear powerplants generate about
    20 percent of the industry's electricity and are the largest source of
    carbon-free electricity production in the country.

                                   SMART GRID

        EEI supports robust funding for smart grid programs. In addition to
    operational benefits such as automatic outage detection and automated
    meter reading, customers with smart meters receive other types of
    benefits, including easier energy management and the potential of the
    electric grid to act as a platform for future energy technologies,
    including plug-in electric vehicles and distributed generation.
    Currently, electric utilities install between 15,000 and 20,000 smart
    meters every day. By 2019, it is estimated that more than 58 million
    smart meters will be in use in more than one-half of all U.S.
    households.
        Deployment of smart grid technology means job creation across the
    economy. Researchers at the Milken Institute point out that smart grid
    construction requires highly skilled labor from various architectural
    and engineering occupations. Because smart grid investments have a
    significant economic impact, technology deployment would revitalize
    employment in research and development and in construction, where more
    that 1.3 million jobs were lost from 2007 to 2009.

             CYBER SECURITY AND PHYSICAL INFRASTRUCTURE RELIABILITY

        Protecting the Nation's electric grid and ensuring a reliable,
    affordable supply of power are EEI's member companies' top priorities.
    Indeed, system reliability requirements are what set electric utilities
    apart from most other industries. Utilities have an obligation to
    serve, to maintain exceptional reliability, and to keep their systems
    secure in an era of increasing cyber threats.
        The electric power industry is constantly making investments to
    strengthen and improve the operations and security of its cyber systems
    and to identify and address vulnerabilities. One research organization
    has projected that global spending on utility cyber security will top
    $21 billion over the next 5 years. Industry in the United States,
    however, cannot go it alone. We urge the Congress to continue public-
    private partnerships to help ensure a robust and resilient electric
    grid.

                      TRANSMISSION, SITING, AND PERMITTING

        Siting new transmission is critical for electric companies to be
    able to move power to where it is needed, to maintain a reliable
    electricity system, and to expand access to renewable energy resources.
        In 2009, shareholder-owned electric utilities and stand-alone
    transmission companies invested an unprecedented $9.3 billion in our
    Nation's transmission infrastructure. This represents a 9-percent
    increase more than 2008 levels and an 82-percent increase more than
    2000 investment levels. Since the beginning of 2000, industry has
    invested $68 billion in transmission. We anticipate at least $56
    billion in transmission system investments through 2020.
        The siting of new transmission lines, however, remains a difficult
    and lengthy endeavor, particularly where multiple States or regions
    must approve the project, or when the siting involves Federal lands.
    Sufficient funding to ensure timely coordination between Federal
    agencies and prompt issuance of Federal authorizations and permits is
    essential for a robust transmission system.

                               ENERGY EFFICIENCY

        Utility spending on energy efficiency continues to increase. Over
    the past 3 years, electric utilities doubled their budgets for energy
    efficiency, growing from $2.7 billion annually to $5.4 billion. Utility
    efficiency budgets are expected to reach or exceed $12 billion by 2020.
        As in the past, EEI recommends that Federal funding be used for the
    development and deployment of efficient energy technologies to help
    meet electricity demand growth, while enabling consumers to manage
    their energy usage.

                                RENEWABLE ENERGY

        EEI supports funding for renewable energy research and development
    to help make these resources cost-competitive. The Energy Information
    Administration projects that renewable energy resources will continue
    to increase their share of the Nation's generation mix--from 11 percent
    in 2009 to 14 percent in 2035. Twenty-nine States and the District of
    Columbia have renewable portfolio standards.

                          ENERGY STORAGE AND BATTERIES

        Improved energy storage is critical for enabling the widespread use
    of electric vehicles, efficient, and reliable smart electric grid
    technologies, and variable renewable energy resources. EEI supports
    Federal initiatives to advance and accelerate storage/battery
    technologies.
                                     ______

      Prepared Statement of the Electric Drive Transportation Association

        The Electric Drive Transportation Association is the cross-industry
    trade association promoting the advancement of electric drive
    technology and electrified transportation and we are writing regarding
    the fiscal year 2012 request for the Department of Energy's (DOE)
    Vehicle Technologies and other electric drive programs.
        Our members include vehicle manufacturers, battery and component
    manufacturers, utilities and energy companies, and smart grid and
    charging infrastructure developers. We are committed to realizing the
    economic, national security, and environmental benefits of displacing
    oil with battery electric, hybrid, plug-in hybrid, and fuel cell
    vehicles.
        Electric drive vehicles, from mild hybrids to full electrics are
    being introduced into the market place in passenger cars; commercial
    trucks, neighborhood electric vehicles, buses; tractors and ground
    support equipment and are poised to advance to commercial scale. As the
    uncertainties roiling the global oil market are spiking the cost of
    gasoline as well as consumer goods in the United States, it is more
    important than ever to push forward in our concerted efforts to
    increase electrification and reduce dependence on imported energy.
        DOE, working with the electric drive industry and other
    stakeholders, is helping to accelerate technology breakthroughs,
    promoting investment in manufacturing capacity and speeding deployment
    of electric drive vehicles and infrastructure.
        The Department's Vehicle Technologies program promotes government/
    industry partnerships and leverages private sector investments to
    accelerate technologies that serve our national energy goals.
    Specifically, we support the Department's efforts to advance energy
    storage technologies and the administration's request for the Batteries
    and Electric Drive Technology program, which will develop next-
    generation battery technologies that increase performance and bring
    down costs. We further support the proposed level for Vehicle and
    Systems Simulation and Testing programs, including the Advanced Vehicle
    Testing Activity (AVTA), which are advancing next-generation charging,
    systems integration and codes and standard for vehicle to grid
    communication.
        The Vehicle Technologies program is also home to important work in
    reducing the cost and expanding the abilities of medium- and heavy-duty
    electric drive trucks. Recognizing their enormous potential to
    transform the commercial fleet and reduce oil consumption in that
    transportation segment, we ask that the subcommittee direct sufficient
    resources toward program activities that advance electrification of
    medium and heavy duty vehicles, including work with industry partners
    to reduce component costs and further enhance performance.
        Another key focus for DOE advanced vehicle technology efforts is
    fuel cell electric vehicles, which are important zero emission/zero
    petroleum options that will be integral to meeting national goals for
    energy security and reduced emissions. The industry is meeting
    aggressive cost, performance, and deployment milestones as it pushes
    toward commercialization in 2015. A meaningful partnership with the
    Federal research and development community through the Hydrogen
    Technologies Program is critical to keeping that timeframe.
        We believe the fiscal year 2012 budget for Hydrogen should maintain
    the Department's commitment to hydrogen and fuel cell research,
    providing an expanded emphasis on programs that reinforce the vehicle
    commercialization effort. Specifically, we ask that funding for fuel
    cell electric vehicle and infrastructure deployment activities in
    Technology Validation and in early market development, including
    education and other enabling activities, be provided at levels
    sufficient to enable the industry to build on technology and market
    achievements to meet the 2015 target.
        Finally, we strongly support the Vehicle Technologies Deployment
    programs, including Clean Cities' mission of advancing the Nation's and
    energy security by reinforcing communities' own efforts to expand
    deployment of electric drive vehicles (battery electric, hybrid and
    fuel cell electric vehicles), other alternative fuel vehicles and
    recharging/fueling infrastructure. We are pleased that Department's
    fiscal year 2012 budget requests an expansion of these partnerships and
    supports additional resources for communities deploying electric drive
    vehicles and recharging infrastructure.
        Recognizing significant budgetary constraints that the subcommittee
    faces, we respectfully request that the subcommittee make the wise
    investment of resources in the DOE's electric drive programs that will
    enable the Department to continue to be an effective partner in
    accelerating the achievement of a secure and sustainable transportation
    sector.
        We thank you for your consideration.
                                     ______

        Prepared Statement of the Energy Committee of ASME's Technical
                                  Communities

        Mr. Chairman, ranking member, and members of the subcommittee: The
    Energy Committee (EnComm) of ASME's Technical Communities is pleased to
    provide this testimony on the fiscal year 2012 budget request for
    research and development (R&D) programs in the Department of Energy
    (DOE).

                                  INTRODUCTION

        The 125,000-member ASME is a nonprofit, worldwide educational and
    technical society. It conducts one of the world's largest technical
    publishing operations, holds more than 30 technical conferences and 200
    professional development courses each year, and sets some 600
    industrial and manufacturing standards, some of which have become de
    facto global technical standards. The Energy Committee of ASME's
    Technical Communities comprises 40 members from 17 Divisions of ASME,
    representing approximately 40,000 of ASME's members.
        ASME has long advocated a balanced mix of energy supplies to meet
    the Nation's energy needs, including advanced clean coal, petroleum,
    nuclear, natural gas, waste to energy, biomass, solar, wind, and
    hydroelectric power. ASME also supports energy efficient building and
    transportation technologies, as well as transmission and distribution
    infrastructure sufficient to satisfy demand under reasonably
    foreseeable contingencies. Only such a portfolio will allow the United
    States to maintain its quality of life while addressing future
    environmental and security challenges. Sustained growth in the energy
    systems on which the United States depends will also require stability
    in licensing and permitting processes not only for power-generating
    stations but also for transmission and transportation systems.
        A forward-looking energy policy will require enhanced and sustained
    levels of funding for R&D, as well as government policies that
    encourage deployment and commercialization. The Energy Committee
    supports much of the fiscal year 2012 budget request, especially the
    increases in funding for fundamental scientific research. The Energy
    Committee also wishes to emphasize that a balanced approach to our
    energy needs is critical, and this is why we remain concerned about the
    substantial decrease in funding for fossil energy, which is essential
    to meeting our national energy needs now and in the future.

                                 FOSSIL ENERGY

        The fiscal year 2012 budget request of $520.7 million for fossil
    energy represents a $206.7 million reduction compared to the fiscal
    year 2010 appropriation; a 44.5-percent decrease. Fossil Energy
    Research and Development (FE R&D) would be reduced by 31.3 percent, or
    $206 million to $452.9 million. The administration continues to point
    out that $3.4 billion was devoted to Fossil Research and Development as
    part of the American Recovery and Reinvestment Act (ARRA), and
    conceding this point, other offices, such as EERE and Science, also
    received funding in ARRA and are slated for substantial increases as
    part of the fiscal year 2012 budget.
        Funding for Natural Gas Technologies and for Unconventional Fossil
    Energy Technologies would again be targeted for elimination by the
    administration. The United States has access to significant
    unconventional gas resources with the potential to provide abundant,
    affordable, clean low-carbon energy source for years to come. Prior FE
    R&D has contributed to making this possible. However, this potential
    will not be realized unless this resource can be produced reliably,
    economically, safely and with minimal environmental impact.
    Accomplishing this task and keeping the United States in the forefront
    of unconventional fossil energy technology will require an investment
    in basic research, technology development, and investments in advances
    in low-impact environmental technologies that will not be undertaken by
    industry in the current economic climate. The budget for these efforts
    should be maintained at least at the fiscal year 2010 level. The EnComm
    encourages a restoration of funding for coal research programs to at
    least the levels appropriated for fiscal year 2010. Coal remains a
    critical resource for our Nation and its economy; however, we must
    continue to invest in technological advancements that will reduce
    environmental impacts for this energy. The use of more efficient
    processes for coal combustion, such as advanced integrated gasification
    combined cycle (IGCC) technology, combined with carbon sequestration
    will allow the United States to utilize its coal resources in a more
    environmentally sound and cost-effective manner. We encourage strong
    and consistent funding for these programs now and in future years. The
    administration has also requested to zero out the section 999 program
    of the Energy Policy Act that is administered by the Research
    Partnership to Restore Energy for America (RPSEA), with oversight by
    FE-National Energy Technology Laboratory. This program funds
    unconventional natural gas research, a small producers program and
    ultra-deep water. This program addresses needed technology developments
    in safety and environmental protection. The EnComm strongly supports
    the continuation of this important program,

                    ADVANCED RESEARCH PROJECTS AGENCY-ENERGY

        The EnComm supports the $550 million budget request for ARPA-E.
    ARPA-E represents a significant opportunity for the United States to
    cultivate technological breakthroughs related to energy sources and
    uses. A steady commitment to Advanced Research Projects Agency-Energy
    (ARPA-E) will encourage energy technology innovation and the committee
    believes that this is a worthwhile endeavor for the DOE as we seek to
    accomplish technological breakthroughs in energy technology.

                                 NUCLEAR ENERGY

        The EnComm is discouraged to see a slight reduction of $5 million
    in the fiscal year 2012 DOE Nuclear Energy budget request to $857
    million more than the fiscal year 2010 appropriated amount. Although,
    this represents a minor budget reduction, particularly during sensitive
    budget negotiations, the EnComm is disappointed to see that no funding
    was requested for the creation of the Regaining our ENERGY Science and
    Engineering Edge (RE-ENERGYSE) program, which was requested for $5
    million in fiscal year 2011. The Congress has not supported this
    program since it was first proposed in the fiscal year 2010 request and
    repackaged in the fiscal year 2011 proposal. Still, educating the next
    generation of nuclear engineers will be critical to the fulfillment of
    both the administration's Clean Energy Standard as well as national
    security. The EnComm is hopeful that the DOE will work to identify new
    opportunities for nuclear engineering scholarship.
        Similarly, the Energy Committee is concerned about the plan by the
    administration for a discontinuation of the Generation IV Nuclear
    Energy Systems program. The Energy Committee is curious to see how the
    proposed Reactor Concepts research, development, and deployment program
    distinguishes itself from the traditional R&D program under the Office
    of Nuclear Energy. Nuclear energy, as a low-carbon, nongreenhouse gas-
    emitting resource, is a critical component of a diverse U.S. power
    generation mix and should play a larger role in the Nation's base power
    supply. Given the President's proposed national ``clean-energy
    standard'' of 80 percent by 2035 the EnComm believes very strongly that
    sustained increases in nuclear power research are justified.

                     ENERGY EFFICIENCY AND RENEWABLE ENERGY

        EERE manages America's investments in research, development, and
    deployment of DOE's diverse energy efficiency and renewable energy
    applied science portfolio. The fiscal year 2012 request of $3.2
    billion, $943 million more than the fiscal year 2010 appropriated
    amount of $2.21 billion, and provides a broad and balanced set of
    approaches to address the urgent energy and environmental challenges
    currently facing our Nation. Most of the key EERE programs, including
    Biomass, Solar, Wind, Geothermal, Building Technologies, Vehicle
    Technologies, and Industrial technologies, would receive substantial
    increases in funding to support the growth of renewable energy. The
    EnComm is particularly pleased to see large increases for both the
    Industrial Technologies Program (ITP), as well as the Building
    Technologies Program. ITP conducts energy assessments for energy-
    intensive factories to identify low-cost methods to improve their
    efficiency. The EnComm encourages the Congress to include waste-to-
    energy as an important component of the country's Renewable Energy
    portfolio to provide it with the same benefits as energy from biomass.
        The EnComm believes that the development of transportation fuel
    systems that are not petroleum-based is a critical part of our future
    national energy policy. The fiscal year 2012 budget for biomass and
    bio-refinery systems R&D is slated to receive a $124 million increase
    to $340 million for fiscal year 2012, 57 percent more than the fiscal
    year 2010 appropriated amount. The Energy Committee supports the
    current appropriation and encourages the Congress to ensure that these
    research programs continue to receive adequate funding. We are also
    pleased to see the $273 million increase in the effort related to
    vehicle technologies emphasizing plug-in hybrid electric vehicles.
        The integration of all cost-effective electric generating
    technologies into the operation of the electricity distribution system
    is critical to economic operation of the national electric grid. The
    EnComm believes that R&D related to the integration of the electric
    grid and its control as a truly national system is imperative for the
    growth of effective and economic energy generation technologies and we
    encourage full funding for such research.

                 SCIENCE AND ADVANCED ENERGY RESEARCH PROGRAMS

        The EnComm is pleased by the request for the Office of Science (OS)
    which restores the funding trajectory mandated in the America COMPETES
    Act of 2007 (Public Law 109-69). The fiscal year 2012 budget proposal
    of $5.4 billion is an increase of $452 million from the fiscal year
    2010 appropriation. OS programs in high-energy physics, fusion energy
    sciences, biological and environmental research, basic energy sciences,
    and advanced scientific computing, serve, in some small way, every
    student in the country. These funds support not only research at the
    DOE laboratories, but also the work at a large number of universities
    and colleges. We believe that basic energy research will also improve
    U.S. energy security over the long term, through its support for R&D on
    cellulosic ethanol and other next-generation biofuels, advanced battery
    and energy storage systems, and fusion. The only program slated for a
    decrease in OS is Fusion Energy Sciences. The EnComm has some concerns
    about the recent delays for the International Thermonuclear
    Experimental Reactor (ITER) experiment being conducted in Cadarache,
    France. The EnComm would like to see ITER built by 2018, but in
    recognition that this is now unlikely; the EnComm will reserve further
    judgment until more information becomes available. The Energy Committee
    strongly supports the budget request for the Office of Science, as well
    as the proposed doubling track for the office by fiscal year 2017.
        The Office of Science, in collaboration with ARPA-E, has announced
    the ``Sunshot Initiative'' to scale down the cost of solar energy by
    roughly 75 percent to $1 per watt of electric power, or about 6 cents
    per kilowatt hour of electricity. The program would cost $425 million
    to begin according to the administration's fiscal year 2012 budget
    request. The EnComm believes that this type of collaboration represents
    a good opportunity to leverage the technical resources available to
    both ARPA-E and the Office of Science. The EnComm would like to see the
    DOE make a strong effort to demonstrate the distinction between this
    project and similar types of research efforts, like the Energy Frontier
    Research Centers, and the Innovation Hubs to avoid redundancy.

                      OTHER DEPARTMENT OF ENERGY PROGRAMS

        DOE is also very active in areas outside of R&D. The environmental
    remediation program that funds the decommissioning and decontamination
    of old DOE facilities is one such research area. The EnComm questions
    the advisability of flat funding for the Environmental Management
    program. The Yucca Mountain Waste Repository is a critical part of the
    environmental cleanup activity. Termination of this project, in the
    short term, will only extend and increase the final cost of the
    environmental management program. The EnComm does not support this
    backward step. The coming resurgence in the commercial nuclear arena is
    likely to deplete the trained professionals available for this program
    as engineers choose to move to the more stable commercial environment.
    The Congress should appropriate the funds to ensure that this work is
    accomplished in an expeditious manner.

                                   CONCLUSION

        Members of the EnComm consider the issues related to energy to be
    one of the most important issues facing our Nation. The need for a
    strong and coherent energy policy is apparent. We applaud the
    administration and the Congress for their understanding of the
    important role that scientific and engineering breakthroughs will play
    in meeting our energy challenges. In order to promote such innovation,
    strong support for energy research will be necessary across a broad
    range of technology options. DOE research can play a critical role in
    allowing the United States to use our current resources more
    effectively and to create more advanced energy technologies.
        Thank you for the opportunity to offer testimony regarding both the
    R&D and other parts of the proposed budget for the DOE. The EnComm is
    pleased to respond to requests for additional information or
    perspectives on other aspects of our Nation's energy programs.
                                     ______

             Prepared Statement of the Energy Efficiency Coalition

        We the undersigned represent a broad-based coalition of energy
    efficiency and environmental organizations, public interest
    organizations, and small and large businesses. We write today to ask
    your support for key energy efficiency programs within the Department
    of Energy (DOE). These programs provide the foundation for the clean-
    energy investments that will ensure the long-term sustainability of the
    clean-energy economy.
        Energy efficiency is our cheapest, fastest, and cleanest-energy
    resource and a necessary solution to address energy prices, energy
    security, air pollution, and global warming. Energy efficiency already
    is the equivalent of any of the Nation's other energy resources: since
    1973, we save more energy each year from efficiency measures than we
    get from any single energy source, including oil. The following fiscal
    year 2012 funding recommendations build on past successes and provide
    additional support for provisions funded as part of American Recovery
    and Reinvestment Act.
        In the months ahead it will be necessary for you to make difficult
    choices regarding budget priorities for the fiscal year 2012 budget. We
    believe that investments in programs that reduce costs for both
    individuals and businesses, and create greater economic prosperity and
    energy security for our Nation, should be maintained and in some
    instances enlarged. Energy efficiency programs are a source of savings
    that in turn are spent in other sectors of the economy, and it does not
    make sense to cut these programs, especially with our energy security
    imperiled by the turbulence in Libya and the Middle East.
        Now is not the time to cut energy-efficiency programs and
    initiatives which help to protect Americans from volatile energy
    prices. Rather, we must increase investment in energy efficiency
    programs in order to meet our country's energy needs and safeguard our
    energy future.
        We support the President's budget request for fiscal year 2012 for
    the Department of Energy's (DOE) Office of Energy Efficiency and
    Renewable Energy (EERE) and specifically for the following EERE
    programs:
      --Building Technologies Program, including the Better Buildings
            Initiative ($470 million);
      --Industrial Technologies Program ($319 million);
      --Weatherization Assistance ($320 million);
      --State Energy Program ($64 million); and
      --Federal Energy Management Program ($33 million).
        In addition to existing programs, it is important for America to
    maintain its competitive edge through continued research in new
    advanced energy efficiency technologies, such as the research
    undertaken by the DOE's ARPA-E program, for which the administration
    request is $550 million.
        The budget for the 2012 fiscal year presents both a challenge and
    an opportunity. By fully deploying the power of energy efficiency, we
    can help drive the economic recovery we all long for. Increased
    investment in critical energy efficiency programs will help those
    American families and businesses who are struggling today to lower
    their energy costs. It will improve our Nation's energy security in
    these uncertain times. We strongly urge your support for the programs
    identified in this letter, and welcome the opportunity to brief you or
    your staff on the benefits these energy efficiency programs provide to
    consumers and businesses in America.

                          ENERGY EFFICIENCY COALITION

        Alliance to Save Energy; American Council for an Energy-Efficient
    Economy; American Institute of Architects; American Public Power
    Association; Association of State Energy Research and Technology
    Transfer Institutions; Business Council for Sustainable Energy; Center
    for Environmental Innovation in Roofing; Citizens for Pennsylvania's
    Future (PennFuture); Copper Development Association; Danfoss; Direct
    Energy; Energy Future Coalition; Energy Platforms; Interfaith Power and
    Light; National Association for State Community Services Programs;
    National Association of Energy Service Companies; National Association
    of State Energy Officials; National Community Action Foundation;
    Natural Resources Defense Council; Polyisocyanurate Insulation
    Manufacturers Association; Rebuilding Together; Rinnai; Schneider
    Electric; Service Employees International Union; Sheet Metal and Air
    Conditioning Contractors National Association, Inc.; Sheet Metal
    Workers International Association; The Stella Group, Ltd.; U.S. Green
    Building Council; and United Technologies Corporation.
                                     ______

      Prepared Statement of the Executive Committee of the Fermi National
                   Accelerator Laboratory Users Organization

        We are the Executive Committee of the Users Organization of the
    Fermi National Accelerator Laboratory (Fermilab) located outside of
    Chicago, Illinois, and represent the 3000 user scientists of the
    premier U.S. laboratory for particle physics. Our membership includes
    researchers in high-energy physics (HEP) who study fundamental
    particles, astrophysics, and accelerators. Eight national laboratories
    are actively engaged in HEP research. These laboratories host
    facilities that are used by scientists from other national
    laboratories, from hundreds of U.S. universities, and from dozens of
    foreign institutions. Fermilab is the only one of the laboratories
    dedicated exclusively to the field.
        The Department of Energy (DOE) Office of Science and the National
    Science Foundation supports HEP research at U.S. national laboratories
    and universities. More than 160 U.S. institutions in 43 States host
    physicists, astrophysicists, engineers, and accelerator scientists who
    work in HEP. More than one-half of these institutions are funded
    through the DOE Office of Science.
        We urge the Senate to support sustained funding for fundamental
    science within DOE's Office of Science and the National Science
    Foundation. We request that the portfolio of funding for basic research
    be balanced. HEP research is a key part of these programs that yields
    valuable benefits to our Nation as described below. Our field is
    undergoing a transition with the Fermilab Tevatron accelerator program
    coming to a conclusion after an incredibly successful three decades.
    New programs are underway or just beginning that will provide the basis
    for vibrant, world-class research for the next several decades. This
    transition is a critical time for our field in the United States and
    requires sustained funding to maintain our leadership in HEP research.

                     VALUE OF HIGH-ENERGY PHYSICS RESEARCH

        In our modern economy, science and technology (S&T) are driving
    forces of national strength as detailed in the National Academies
    report ``Rising Above the Gathering Storm: Energizing and Employing
    America for a Brighter Economic Future'' and the 2010 update ``Rising
    Above the Gathering Storm Revisited''. Continued leadership in S&T
    fields is critical to our economic growth, national security, and world
    leadership. Innovation derived from a highly trained workforce is key.
        Without new technological developments within the United States,
    our economy will not grow and other countries will surpass us. But the
    most revolutionary technologies often require revolutions in our
    fundamental knowledge and understanding, or are invented in the
    research struggle of our most talented minds in pursuit of measuring,
    understanding, and testing new ideas and concepts. No one could have
    predicted the nature of our current society from the first studies of
    the electron; however we would not be communicating via email, fax, or
    text messages without them.
        HEP strives to understand the most fundamental aspects of nature.
    We can rarely predict the outcome, but the quest for knowledge has
    always led to numerous advances, some of which are listed below.
    Certain results are predictable: we will educate and train some of the
    best and brightest students who will contribute to our Nation in many
    different arenas.

                        VALUE OF TECHNOLOGY DEVELOPMENT

        While the primary purpose of HEP research is not the creation or
    development of new technology, our work often requires it to accomplish
    our goals. Many of our experiments require technology that does not
    exist when the project is started. Therefore, many of our researchers
    spend a significant part of their careers advancing high-tech particle
    detectors, developing complex computing algorithms, and pushing the
    limits of high-speed electronics. Without continuous innovation we
    would not be able to complete our experiments. But once these advances
    are made they are applied by industry.
        An example of this is the construction of the Fermilab Tevatron
    accelerator that reigned as the world's most powerful machine of its
    kind for nearly three decades. It required 1,000 superconducting
    magnets to be placed around a 4-mile ring. Creating superconducting
    magnets requires superconducting wire. At the start of the project in
    the 1970s, it was known how to make such wire, but the industry needed
    to make it did not exist. Fermilab researchers helped to build up that
    industry and advance their production techniques through a very
    successful joint government/business venture. Once the accelerator was
    complete in 1983, these businesses looked around to see what other
    projects could use superconducting wire. MRIs that are commonly used
    for medical imaging are an example. Because of the work of Fermilab,
    MRIs became much more widely available in the 1980s.
        A current experiment being led by Fermilab scientists is the Dark
    Energy Survey (DES). This experiment requires a digital camera larger
    than any ever built. Their technological developments will eventually
    influence the digital cameras available at your local electronics store
    as well as devices no one has even dreamed of yet.
        High-energy physicists have been the leaders in accelerator science
    since its beginning. Our work requires the most powerful particle
    accelerators that can be built. However, accelerators are now used in
    thousands of applications. More than 17,000 particle accelerators are
    used throughout the world, only a small fraction of these dedicated to
    HEP. Most are used by industry and for medical treatment. The tire
    industry, for example, now uses particle accelerators to treat their
    tires, which has resulted in a reduction of 3 pounds less rubber per
    tire and a reduction in the amount of chemicals needed in the
    production process. The industry is more efficient and better for our
    environment because of the application of particle accelerators. This
    success was unanticipated in the early days of accelerator development,
    but is certainly a positive result.

                               VALUE OF EDUCATION

        The United States has long been the destination of choice for the
    best science students from around the world. Our universities provide
    an education that is second to none. Our national laboratories provide
    research opportunities that are unavailable elsewhere. Fermilab is an
    excellent example of this. Numerous students from foreign institutions
    travel to Fermilab to complete their research. Many of these students
    then choose to stay in the United States after completing their
    degrees.
        Our students learn a variety of skills that are applicable in
    numerous fields. They learn how to work on problems where the answer is
    unknown and how to adapt to unforeseen challenges. They learn skills in
    computer programming, data analysis, simulation of complex problems,
    and electronics development, among others. They learn to work in teams
    and do collaborative projects. Most importantly, they learn how to take
    a project from start to finish, write a document detailing it, and
    present it to an audience. These skills are all highly desired by
    businesses.
        Many of our students choose to continue their immediate careers as
    postdoctoral associates. This provides a postgraduate education that
    further develops their skills. Postdocs generally take on more complex
    projects and develop leadership and management skills. Most HEP
    experiments involve 20 to 2,000 scientists and face challenges that are
    similar to those in many businesses.
        Scientists trained in HEP work in telecommunications, software
    development, aerospace, education, medicine, government, and finance,
    to name a few. Approximately one-fourth of our Ph.D. students enter new
    fields. Private businesses are the largest and most diverse employers
    of scientists trained in HEP. Several former HEP researchers have
    founded or led small and large companies, including Richard Wellner,
    chief scientist at Univa UD, a cloud management software company;
    Francisco Vaca, CEO of Vaca Capital Management LLC; George Coutrakon,
    director of operations at Loma Linda University Medical Center; and
    Homaira Akbair, CEO of SkyBitz, a satellite-based tracking company.
        Our researchers are engaged in all levels of education and
    understand the importance of scientific literacy in our society. We use
    numerous venues to advance this. Hundreds or thousands of public
    lectures are given around the country each year. Our scientists visit
    local schools to share the excitement of science through physics
    demonstrations or presentations of their work. The QuarkNet program,
    funded through the National Science Foundation, trains K-12 teachers in
    28 States in cutting-edge research so that they can take it back into
    the classroom. More than 38,000 students attend Fermilab education
    activities each year.

                             IMPACT OF BUDGET CUTS

        Continued funding of science research is critical to our Nation.
    Severe budgetary cuts will have devastating effects that will be felt
    for decades. Science opportunities will be delayed or lost to other
    nations. Our reputation as the place to be for the best and brightest
    will be damaged. The administration's request for fiscal year 2012
    maintains a funding level for science research that will allow us to
    avoid substantial damage.
        Large cuts will have immediate impacts on our universities and
    national laboratories. Layoffs and/or furloughs will be unavoidable if
    we return to fiscal year 2008 funding levels. Several Fermilab projects
    that were slated to start construction in fiscal year 2011 have already
    been delayed. These projects are key to the near-term future of the
    laboratory and the U.S. HEP program.
        However, the largest and longest-lasting impact will be in our
    training of the next generation of scientists. Severe cuts will force
    us to train fewer students. It will demoralize our current students and
    postdocs, and some will quit. And we will no longer attract the best
    students. It will take a long time to overcome even a short-term cut to
    funding. These young people will be the foundation on which our
    economic growth depends. Without the advanced training offered by
    fields such as HEP, they will lack the skills to develop the next
    technology or the next new industry. Or they will be trained in other
    countries and that innovation will occur overseas. It is critical that
    we remain attractive to U.S. and foreign students now and in the
    future.

                                    SUMMARY

        Scientific research in general, and HEP in particular, provides
    value to our Nation that will be lost without continued funding from
    the U.S. Government. The knowledge that is gained will lead to future
    innovation that will continue our world leadership. The path to that
    knowledge will lead to advances in technology that will help sustain
    our economic recovery. And the education of students from the United
    States and abroad will provide the knowledgeable workforce that will
    carry us through the next half century.
        It is critically important to maintain our leadership position in
    scientific research. The repercussions of severe cuts will be felt for
    a long time. We urge the Senate Appropriations Committee to support the
    President's request to maintain our scientific research program for the
    long-term health of the Nation.
                                     ______

        Prepared Statement of the Federation of American Societies for
                              Experimental Biology

        The Federation of American Societies for Experimental Biology
    (FASEB) respectfully requests an appropriation of $5.10 billion for the
    Department of Energy Office of Science (DOE SC) in fiscal year 2012.
    This figure is in keeping with President Obama's vision for strong
    national investment in innovation, and it would enable DOE SC to
    continue to support essential research programs that enhance human
    health and quality of life, invigorate the economy, bring the Nation
    closer to energy independence, and drive scientific advances.
        As a Federation of 23 scientific societies, FASEB represents more
    than 100,000 life scientists and engineers, making it the largest
    coalition of biomedical research associations in the United States.
    FASEB's mission is to advance health and welfare by promoting progress
    and education in biological and biomedical sciences, including the
    research funded by DOE SC, through service to its member societies and
    collaborative advocacy. FASEB enhances the ability of scientists and
    engineers to improve--through their research--the health, well-being,
    and productivity of all people.
        DOE SC provides more than 40 percent of the total funding for basic
    research in the physical sciences, including fundamental research in
    energy sciences, biological and environmental sciences, materials and
    chemical sciences, and computational science. In addition to supporting
    research at more than 300 colleges and universities, DOE SC funds and
    manages 10 world-class national laboratories.
        The DOE SC national laboratories, located in eight States across
    the country, maintain essential research and development facilities
    containing sophisticated instrumentation such as particle accelerators,
    advanced light sources, and supercomputers. Because large-scale
    facilities provide infrastructure beyond the budget of any individual
    research institution, tens of thousands of university and industry
    scientists rely heavily on access to unique DOE SC instrumentation in
    order to conduct cutting-edge research. For example, xray facilities
    housed at DOE SC national laboratories, such as the Advanced Photon
    Source at Argonne National Laboratory, are used by nearly all U.S.-
    based pharmaceutical and biotechnology companies to conduct protein
    structure studies critical to the drug design process. Furthermore, the
    oil and gas industry uses DOE SC instrumentation to study the atomic
    structure of chemicals used to process and refine fossil fuels. Without
    strong and sustained support for DOE SC, operations at national
    laboratory facilities could be limited or terminated, forcing U.S.
    companies that depend on them to move their research studies to
    overseas locations providing better access to instrumentation.
        At academic institutions and national laboratories across the
    country, DOE SC-funded scientists have uncovered a wealth of knowledge
    that has led to life-changing developments in energy, medicine,
    computer science, and other fields. For example, a team of DOE SC-
    funded scientists is studying a fungus capable of degrading plant
    material into the simple sugars necessary to make biofuels, possibly
    leading to a more economical means of manufacturing ethanol for
    industrial applications. DOE SC also partners with other Federal
    science agencies on projects requiring multidisciplinary resources and
    expertise. Along with the National Science Foundation and the National
    Eye Institute, DOE SC sponsored the research and development of an
    artificial retina to restore sight in patients blinded by eye diseases
    such as macular degeneration and retinitis pigmentosa. The study of
    artificial retina technology has advanced the general field of neural
    prostheses, which has the potential to improve the lives of people with
    spinal cord injuries, Parkinson's disease, deafness, and other
    neurological disorders.
        Now is not the time to abandon investment in the innovative
    research supported by DOE SC. Insufficient funding for the agency would
    curtail groundbreaking scientific discoveries by forcing essential
    research facilities to close, causing thousands of scientific jobs to
    be lost, and deterring the next generation of scientists and engineers.
    A source of abundant, safe, clean, and sustainable energy is critical
    to the Nation's future. Development of new energy sources that can be
    used in place of fossil fuels will create new industries, reduce U.S.
    dependency on foreign oil, protect the environment, provide economic
    opportunities, and strengthen national security. Furthermore, because
    of the collaborative work of science agencies and the increasingly
    interdisciplinary nature of scientific research, support for the
    Federal research and development portfolio has never been more
    important. With its vital mission and unique research facilities,
    investment in DOE SC programs should be one of our highest national
    priorities.
        Thank you for the opportunity to offer FASEB's support for DOE SC.
                                     ______

      Prepared Statement of the Fuel Cell and Hydrogen Energy Association

        On behalf of the members of the Fuel Cell and Hydrogen Energy
    Association, we are writing to urge your continued support for fuel
    cell and hydrogen energy programs for fiscal year 2012 Energy and Water
    Development appropriations. These critical programs create green jobs,
    increase the efficient use of our Nation's natural resources, reduce
    dependence on foreign oil and enhance energy security, while reducing
    criteria air pollutants and greenhouse gas emissions.
        As the subcommittee develops the fiscal year 2012 Energy and Water
    Development appropriations bill, we urge you to support the fuel cell
    and hydrogen programs at the fiscal year 2010 levels of $174 million
    managed by the Energy Efficiency and Renewable Energy (EERE) and $50
    million in Fossil Energy (FE) organizations at the Department of Energy
    (DOE). This amount would fully fund the critical research, development,
    demonstration and deployment of these technologies in order to gain a
    stronger foothold in current markets and move the others to
    commercialization in the near-term.
        Fuel cell and hydrogen technologies produce jobs and are a crucial
    part of the portfolio of advanced energy technologies that will help
    achieve the Nation's oil and greenhouse gas (GHG) reduction goals. Fuel
    cells for stationary power and material handling equipment are
    commercially available and creating jobs today in domestic and export-
    oriented manufacturing. The United States is poised to introduce fuel
    cell electric vehicles by 2015, as long as there is continued support
    for technology maturation, supplier development and infrastructure
    deployment. Advanced R&D in FE and EERE, market transformation,
    technology validation, and hydrogen efficiencies in EERE are key
    components of the fuel cell budget.
        The United States currently leads the world in fuel cell and
    hydrogen technologies. Japan, Germany, Korea, and China have made it a
    national priority to develop these technologies and attract the skills
    and intellectual property to create a domestic clean-energy business as
    a platform for a future export market. In the United States, fuel cell
    commercialization is underway, and businesses are making the necessary
    investments to bring fuel cell-powered products to American customers.
        President Obama has set strong targets for the Nation for clean-
    energy generation and manufacturing; and for increasing the number of
    vehicles fueled by biofuels, natural gas, and powered by electric drive
    trains. Fuel cells and hydrogen energy can help America meet those
    goals faster, more efficiently, and with less impact on the
    environment. Fuel cells are always the cleanest way to use any fuel,
    whether renewable or fossil, and all fuel cell electric vehicles are
    hybrids, as they use batteries to store energy; moreover, there is no
    cleaner way to use natural gas as a transportation fuel than to reform
    it for use in a fuel cell electric vehicle.
        What the industry needs now is help from DOE in leveraging these
    private dollars to help mature current markets and aid in creating a
    competitive landscape for budding ones. Realizing the budget
    constraints you are working under, a budget consistent with fiscal year
    2010 levels will send a strong, positive signal to other investors,
    companies investing in fuel cell products, auto makers, supply chain
    partners, and potential customers. We need a robust market for fuel
    cells and hydrogen energy in the United States if we want to keep these
    industry jobs and the resulting economic growth here, as well.
        Thank you for your consideration of our request.

               STRENGTHEN FEDERAL HYDROGEN AND FUEL CELL PROGRAMS

        Proposal.--Fund DOE fuel cell programs at a Congress-approved level
    for fiscal year 2010; restore reductions proposed by the administration
    for fiscal year 2012.
        DOE's Office of Fuel Cell Technologies, Fuel Cell and
    Infrastructure Technologies Program supports the development of fuel
    cells, hydrogen fuel and supporting infrastructure for power
    generation, backup power, industrial vehicles, portable applications,
    and passenger cars. The program has made exceptional progress in a few
    short years, helping to reduce the cost of fuel cells by 45 percent
    since 2007 and the cost of hydrogen produced from renewable sources and
    natural gas by 40 percent. The program has tested and evaluated 160
    fuel cell vehicles in real-world operation, led the development of
    safety codes and product standards, and helped deploy more than 1,000
    fuel cell systems to Federal agencies and early private sector
    customers where they are improving energy efficiency and security of
    supply with low or zero emissions.
        The United States is the recognized world leader in fuel cell
    technology. DOE research has supported more than 200 patents. But the
    full benefits of commercialization, including, by DOE's estimate, up to
    677,000 jobs in the next 25 years, will go where the Government
    policies and public-private partnerships are strongest. Germany, South
    Korea, Japan, and China, among others, are implementing long-term
    programs designed to capture the fuel cell lead and reap the economic
    and energy security benefits that will follow. The Obama
    administration's proposal to reduce fuel cell funding would send just
    the opposite signal to our domestic market, and have long-term
    undesirable consequences.
        Fuel cell technologies are a crucial part of the new energy network
    that is needed to achieve the Nation's energy policy and greenhouse gas
    reduction goals. DOE estimates fuel cells can reduce oil imports by
    nearly 8 billion barrels over the next 40 years, reduce CO2
    emissions by 2.4 billion tons, and save consumers $1.6 trillion. A
    robust public-private partnership focused on cost reduction and early
    deployment will accelerate commercialization and the benefits that
    accrue with marketplace success.
    Office of Energy Efficiency and Renewable Energy Programs--$174 Million
          Vehicles and Infrastructure.--Support for deployment and fueling
            infrastructure, backed by testing and evaluation, is essential
            to accelerating the transition to the marketplace. As its Phase
            I Technology Validation program winds down, DOE should evolve
            to support early volumes of commercial Fuel Cell Electric
            Vehicles and related infrastructure.
          Market Transformation.--The Market Transformation Program
            provides technical and financial support for purchase or lease
            of fuel cell systems entering the marketplace. The program
            creates U.S. jobs, improves security of air travel and
            communications, and enables a commercial transition in early
            markets by driving down costs through economies of scale. DOE
            should continue Market Transformation activities in all market
            sectors.
          Enabling Activities.--These programs prepare local communities
            for fuel cell installations, fueling stations and vehicles, and
            help DOE evaluate program options. Systems analysis, safety,
            codes and standards, education, and manufacturing technology
            programs all contribute to commercialization.
          Research and Development.--DOE's robust program of cost reduction
            via research into materials, catalysts, and components should
            continue. Hydrogen is one of a portfolio of fuels that together
            will achieve U.S. energy security while meeting greenhouse gas
            reduction goals. Improved hydrogen storage will reduce vehicle
            cost and improve capability, and will enable efficient use of
            hydrogen as a storage strategy for intermittent renewable
            resources, such as wind and solar power. Hydrogen from biomass
            uses a renewable domestic energy source and provides greater
            greenhouse gas reductions than biofuel combustion.
    Office of Fossil Energy: Solid State Conversion Alliance Program--$50
            Million
        Solid State Energy Conversion Alliance (SECA) is a cost-shared
    public-private partnership developing high-temperature solid oxide fuel
    cells (SOFCs) for stationary power generation that has met or exceeded
    every benchmark set for it by the Congress and the DOE in its more than
    10 years of existence. Industry has spent $3 for every $1 of Government
    funds, and decreased the cost of SOFCs tenfold, while increasing their
    efficiency and durability by 2 to 3 times. Continued support is needed
    to scale-up the technology to central power station levels. The United
    States lead in SOFCs, and has created commercially viable distributed
    power generation using natural gas, biogas, and landfill gas that emits
    zero criteria pollutants at a low-GHG intensity. Continued development
    and commercialization of SECA technology will deliver a significant
    return to the U.S. economy. Walking away now would hand the fruits of
    our investments to our foreign competitors.
                                     ______

               Prepared Statement of the Gas Technology Institute

        Gas Technology Institute (GTI) welcomes the opportunity to provide
    comments to the Appropriations Subcommittee on Energy and Water
    Development.
        GTI is an independent not-for-profit organization serving research,
    development, and training needs of the natural gas industry, gas
    consumers, and energy markets. Most of the 250-person GTI staff is
    based at GTI's headquarters located on an 18-acre campus in Des
    Plaines, Illinois. More than 70 percent of our personnel are
    technically trained engineers and scientists. GTI has more than 280,000
    square feet of office, laboratory, shop, library, and training space
    with more than 110,000 square feet devoted to laboratory, fabrication
    and testing facilities. GTI currently manages approximately $60 million
    in research and development contracts per year (more than 100
    projects), and has been managing contracts of this type since the
    1940s. GTI performs contract Research and Development (R&D) for the
    Department of Energy (DOE) and is very familiar with many of its
    programs.

                                  NATURAL GAS

        New opportunities for the production of natural gas in the United
    States will provide a jobs and economic boom to many parts of our
    Nation over the next 10 years. In the last year alone Pennsylvania has
    created 44,000 new jobs and their residents have received more than
    $389 million in lease payments from private companies for the right to
    explore natural gas trapped in shale formations. By 2020, 211,000 new
    jobs are expected to be created in Pennsylvania and lease payments more
    than $1.9 billion \1\ to be paid.
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        \1\ http://marcelluscoalition.org/wp-content/uploads/2010/05/PA-
    Marcellus-Updated-Economic-Impacts-5.24.10.3.pdf.
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        To assist in accomplishing the goals of energy independence,
    reducing emissions and creating hundreds of thousands of new jobs, the
    Congress and executive branch should provide similar attention and
    resources to the development and deployment of natural gas technologies
    as are provided to other energy sources. Today, the DOE spends billions
    of R&D dollars on wind, solar, coal, and more-efficient electric
    technologies. These are all important efforts, however, when reviewing
    the agency's entire R&D budget, less than 1 percent is spent on natural
    gas R&D even though natural gas represents 25 percent of our Nation's
    primary energy use and that is expected to grow over the next several
    decades and natural gas provides compelling public benefits in terms of
    domestic economic growth, improved energy security, source energy
    efficiency, and reduced carbon dioxide emissions.

            DEPARTMENT OF ENERGY'S RESEARCH AND DEVELOPMENT FUNDING

        For R&D related to natural gas, a review of the combined budgets of
    Energy Efficiency and Renewable Energy (EERE) and Fossil programs
    alone, show that in 2010, the U.S. Government provided an estimated $80
    million (3.5 percent), out of an almost $2.3 billion total. It is clear
    that if the United States wants to support an expanded role for clean-
    burning natural gas, leading to improved energy independence, energy
    efficiency, job creation and reduced emissions, scarce R&D dollars
    should be, in part, focused on natural gas. These new natural gas
    technologies could be utilized in all energy sectors including homes,
    businesses, manufacturing, power generation, and transportation; as
    well as to enhance reliability and safety of the natural gas production
    and delivery system.
    Natural Gas Research and Development Funding Information and
            Observations (Increase Funding for Natural Gas Research and
            Development)
        The $100 million Industrial Technology Program (ITP) continues to
    be the only program at DOE that focuses a portion of their budget on
    developing new more efficient technologies for manufacturing. Many of
    these technologies will be powered by natural gas.
        Approximately 60 percent of the $673 million 2010 fossil energy
    budget for R&D was appropriated for coal while only 2.5 percent was
    directed to natural gas.
        During 2010, Coal accounted for 22 percent of the country's primary
    energy use while natural gas represented 25 percent of the county's
    primary energy use. It would be fair and prudent to spend comparable
    R&D funding for natural gas.\2\
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        \2\ http://www.eia.gov/oiaf/aeo/tablebrowser/
    #release=AEO2011&subject=0-AEO2011&table=2-AEO2011®ion=1-
    0&cases=ref2011-d120810c.
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        The American Recovery and Reinvestment Act spending stimulus
    provided $3.4 billion to the Fossil Energy Program. All was spent on
    coal.
        The approximately $200 million buildings program at EERE has no
    specific program to support natural gas technologies for homes and
    businesses even though approximately 70,000,000 U.S. homes and
    businesses use natural gas.\3\
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        \3\ A.G.A. ``Gas Facts: with 2008 Data'', Tables 8-2 and 8-3.
    ---------------------------------------------------------------------------
        Currently natural gas vehicle (NGV) R&D at USDOE is $5 million.
    Electric vehicle R&D is approximately $128 million.
        The Office of Electricity and Energy Reliability only funds R&D
    programs for the Electric Grid, not the entire energy delivery system,
    thus discounting the importance of our Nation's gas pipeline
    infrastructure which currently supplies 21 percent of U.S. electricity.
        No money within the Renewable program is directed toward the
    development of technologies to produce renewable natural gas (RNG) from
    livestock manure, landfills, wastewater treatment, or woody-bio-mass
    even though RNG may offer the most efficient means to deliver nonwind
    or solar renewables to energy consumers.
        The current proposed DOE budget by the administration provides no
    funding or R&D program direction for natural gas vehicles, efficiency
    improvements for natural gas power generation or home appliances,
    efficiency for natural gas commercial cooking, natural gas carbon
    capture, renewable natural gas technology, or development of hybrid
    solar natural gas technologies.
        Following are recommendations that begin to address the lack of
    natural gas R&D at DOE. Within some of the recommendations are
    suggested resource amounts. GTI suggests these amounts as part of
    whatever allocated dollars are agreed upon between the Congress and the
    administration. We are not suggesting new money--just a reasonable and
    prudent refocus supporting an equitable approach for natural gas R&D.
        Residential homes and commercial buildings consume more than 40
    quadrillion Btus (or Quads) of energy. Developing building technologies
    that utilize the least amount of total energy; provide similar
    performance as existing technologies and take advantage of renewable
    opportunities can ensure the most efficient use of important domestic
    energy resources such as natural gas.
        Natural gas is an important domestic energy resource, with nearly
    all of U.S. demand for natural gas coming from North America and 52
    percent of all U.S. homes utilizing natural gas for space/hot water
    heating or cooking. While an expanding supply from new sources such as
    gas shales has resulted in a flattening of prices--a trend that is
    expected to continue, this domestic source of energy should be used in
    the most efficient and clean manner ensuring the maximum benefit of
    existing and future supply.

                               BUILDINGS PROGRAM

        The natural gas industry, manufacturers, and R&D performers will
    identify and capture financial support for this effort with 20 to 40
    percent co-funding expected, depending on the type of R&D performed.
        We recommend natural gas efficiency R&D within the DOE's Buildings
    Technology Program of $12 million. This is a very small request
    relative to their overall 2010 budget which was more than $200 million,
    and this request is supported by the American Gas Association (AGA) and
    numerous gas utilities and other gas related trade associations.
        Specific program initiatives include:
          Space Conditioning and Water Heating Efficiency and Operational
            Improvements.--$2.9 million.
          Building Systems and Community Energy System Technologies.--$2.6
            million.
          Breakthrough Technology Development.--$2.1 million.
          Development of Higher-Efficiency Commercial Food Service
            Equipment.--$1.6 million.
          Solar/Natural Gas Hybrid Systems.--$2.8 million.

                         INDUSTRIAL TECHNOLOGY PROGRAM

        Within ITP, we are concerned of the new focus proposed in the
    President's fiscal year 2012 budget proposal. This new focus of R&D
    support for manufacturing of advanced materials discounts the 20 years
    of stakeholder involvement by the steel, glass, aluminum, heat-treating
    food processing, and other energy intensive industries that have worked
    with the Industrial Technology Program to develop new processes and
    other means to reduce energy consumption and improve manufacturing
    technologies. Many of these stakeholders have already voiced their
    concerns to Members of Congress and DOE.
        GTI suggests that a good guide for ensuring that the ITP addresses
    the R&D needs of energy-intensive manufacturing industries can be found
    in section 452 of the ``Energy Independence and Security Act of 2007''.
    We are not suggesting the specific funding outlined in that section,
    but rather the language regarding the scope and focus of the ITP
    presented in section 452 titled ``Energy Intensive Industries
    Program.''
        We also recommend specifically that ITP include a focus on waste
    heat recovery, and combined heat and power.
      --Gas Heat Pump Technology (CHP);
      --Micro Combined Heat and Power Production Development (CHP); and
      --CHP Efficiency and Carbon Reduction Improvements (CHP).

                              VEHICLE TECHNOLOGIES

        As mentioned earlier the President's budget request for DOE in 2012
    provided no funding for natural gas vehicle R&D even though the request
    for the overall budget for the vehicle programs was $588 million. GTI
    proposes a budget of $30 million for natural gas vehicle R&D. This
    request is supported by AGA, numerous gas utilities, and NGV America.
        Specific program initiatives include:
      --Development of new engines to meet a wider range of applications.
      --Integrating natural gas engines into additional medium- and heavy-
            duty vehicle platforms such as buses, trash trucks, delivery
            trucks, and over-the-road trucks as well as marine and off-road
            applications.
      --Develop new natural gas hybrid-electric platforms.
      --Reduce cost and weight of compressed and liquefied natural gas
            storage systems.
        Renewables.--Ensure that some portion of the Renewables program
    area can support the demonstration of a renewable natural gas
    production facility utilizing gasification to produce pipeline quality
    gas from woody-biomass. (Excellent efficiency--low emissions).
        Fossil.--Currently there is no funding for natural gas and the
    President's USDOE Fossil Energy R&D budget request of $453 million is
    directed for coal carbon capture and sequestration. Program direction
    would be welcome for improving efficiency of natural gas power
    generation, natural gas exploration and production R&D to address
    environmental concerns, and natural gas power generation carbon
    capture.
        Office of Electricity and Energy Reliability.--All funding is
    focused on the electric grid. The President's proposed budget of $238
    million should provide program direction, at a minimum, to address the
    synergies of our Nation's pipeline infrastructure in relationship to
    electric grid reliability.

       SECTION 999/THE RESEARCH PARTNERSHIP TO SECURE ENERGY FOR AMERICA

        In 2005, as part of the Energy Policy Act, (section 999) funding
    was directed from the Nation's Oil and Gas Royalty Trust Fund to create
    a program that would focus on unconventional natural gas exploration
    and production R&D and on deepwater fossil fuel extraction R&D. The
    program was designed to provide $12.5 million to the National Energy
    Technology Laboratory (NETL) and $37.5 million to a nonprofit whose
    sole purpose was to manage and guide an energy R&D program as described
    above. This total of $50 million annually is directed spending.
        The Research Partnership to Secure Energy for America was
    eventually chosen by DOE to manage the $37.5 million R&D program.
    Today, RPSEA continues to manage $37.5 million of the program and
    provides a resource plan to DOE annually for the execution of the
    funding.
        RPSEA disseminates RFP's once USDOE approves its annual plan and a
    majority of the funding supports work performed by universities and
    nonprofits like GTI. The most recent annual plan delivered by RPSEA
    centers on performing environmentally focused R&D for shale gas and
    deepwater fossil fuel exploration. RPSEA stands ready to assist the
    Nation in better understanding and addressing the environmental issues
    related to shale gas and deepwater fossil fuel exploration and
    production.
        The Congress should continue support for section 999, (which funds
    RPSEA) at current or increased levels.
      --RPSEA continues to be a model of Private/Public R&D partnerships
            focused on delivering new technology and analysis.
      --RPSEA is developing environmental and process solutions for shale
            gas and deepwater fossil energy exploration.
      --Natural gas R&D funding in the 1980s and 1990s supported by the
            natural gas industry and the Federal Government helped to make
            possible the current and growing production of natural gas from
            shale formations, and contributed to the technological
            breakthroughs that reversed a 40-year decline in domestic oil
            production.\4\ \5\
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        \4\ http://www.whitehouse.gov/sites/default/files/microsites/ostp/
    pcast-energy-tech-report.pdf.
        \5\ http://mjperry.blogspot.com/2010/12/us-oil-and-gas-reserves-
    increased.html and http://www.eia.doe.gov/emeu/mer/pdf/pages/
    sec3_3.pdf.
    ---------------------------------------------------------------------------
      --RPSEA, while having considerably less financial resources than the
            R&D programs of the 1980s and 1990s, can help continue the
            development of breakthrough technologies and processes to
            improve and enhance natural gas exploration and production.
                                     ______

               Prepared Statement of the Gas Turbine Association

        The Gas Turbine Association (GTA) appreciates the opportunity to
    provide the Subcommittee on Energy and Water Development of the United
    States Senate Appropriations Committee with our industry's statement
    recommending fiscal year 2012 funding levels for the Department of
    Energy (DOE).
        While the GTA recognizes the need to reduce Federal spending in
    today's fiscal environment, we respectfully recommend that the fiscal
    year 2012 appropriation for fossil energy include $20 million for the
    Advanced Turbines Program research and development (R&D) to meet
    critical national goals of fuel conservation, greenhouse gas reduction,
    fuel flexibility (including syngas and hydrogen), and criteria
    pollutant reduction. A spending level of $20 million is more
    appropriate than the administration's recommendation $14.6 million
    considering the fiscal year 2010 spending level was $32 million. A
    spending level of $20 million would still represent a significant cut
    of 37 percent and will result in pushing out the timeline for the
    development and deployment of environmentally advanced gas turbines by
    several years.
        It is clear that dramatic reductions in greenhouse gas emissions
    are in the national interest. It is also clear that our economy needs
    more electric generation capacity to resume and promote further growth.
    Without new technology, the power generation industry will be hard
    pressed to produce additional electric capacity, while at the same time
    meeting the strict greenhouse gas emissions standards being set by
    States and the Federal Government.
        Federal investment in research and technology development for
    advanced gas turbines that are more efficient, versatile, cleaner, and
    have the ability to burn hydrogen-bearing reduced carbon synthetic
    fuels and carbon-neutral alternative fuels is needed to ensure the
    reliable supply of electricity in the next several decades. Domestic
    coal based Integrated Gasification Combined Cycle (IGCC) with carbon
    capture and storage is one such approach that would significantly
    supplement available supplies of domestic natural gas to guarantee an
    adequate supply of clean and affordable electric power. Alternative
    fuel choices range from imported liquefied natural gas (LNG), coal bed
    methane, and coal-derived synthetic or process gas to biogas, waste-
    derived gases and hydrogen. Research is needed to improve the
    efficiency, reduce capital and operating costs, and reduce emissions.

       TECHNOLOGIES FOR ADVANCED INTEGRATED GASIFICATION COMBINED CYCLE /
      H2 GAS TURBINE--REDUCING THE PENALTY FOR CO2
                                    CAPTURE

        At current rates of research and development it is unlikely that
    the Nation will have available the gas turbine technologies to meet the
    needs of carbon capture capable powerplants. The advancement of these
    technologies must be undertaken by the DOE since there is currently no
    pathway to the development, insertion, and maturation of these
    technologies into the Nation's electric power infrastructure based on
    market forces. Thus, a combined effort by the public and private
    sectors is necessary.
        The turbines and related technologies being developed under the DOE
    Fossil Energy Advanced Turbines program will directly advance the
    performance and capabilities of future power generation with
    CO2 capture and storage. Advances are needed to offset part
    of the powerplant efficiency and output reductions associated with
    CO2 capture. Program funding is required to cost-share in
    the technology development of advanced natural gas/hydrogen/syngas
    combustors and other components to realize the DOE goals.
        Several GTA member companies are working cost-share programs with
    the DOE to develop technologies for advanced gas turbine powerplants
    with carbon capture. These technologies will:
      --increase plant efficiency;
      --increase plant capacities; and
      --allow further reductions in combustion emissions of hydrogen rich
            fuels associated with CO2 capture and storage.
        This will help offset some of the efficiency and output penalties
    associated with CO2 capture. These programs are funding
    technology advancement at a much more rapid rate than industry can do
    on their own.
        The need for Federal cost-share funding is immediate. The funding
    levels in past years for the advanced turbines program has been
    inadequate to meet DOE's Advanced Power System goal of an IGCC power
    system with high efficiency (45-50 percent HHV), near-zero emissions
    and competitive capital cost. To meet this goal, the researchers must
    demonstrate a 2 to 3 percentage point improvement in combined cycle
    efficiency above current state-of-the-art Combined Cycle turbines in
    IGCC applications.
        The plan for the IGCC-based powerplants is to develop the
    flexibility in this same machine with modifications to operate on pure
    hydrogen as the primary energy source while maintaining the same levels
    of performance in terms efficiency and emissions. The goal is to
    develop the fundamental technologies needed for advanced hydrogen
    turbines and to integrate this technology with CO2
    separation, capture, and storage into a near-zero emission
    configuration that can provide electricity with less than a 10-percent
    increase in cost over conventional plants by 2012.
        The Advanced Turbines program is also developing oxygen-fired (oxy-
    fuel) turbines and combustors that are expected to achieve efficiencies
    in the 44-46 percent range, with near-100 percent CO2
    capture and near-zero NOX emissions. The development and
    integrated testing of a new combustor, turbine components, advanced
    cooling technology, and materials in oxy-fuel combustors and turbines
    is needed to make these systems commercially viable.
        The knowledge and confidence that generating equipment will operate
    reliably and efficiently on varying fuels is essential for the
    deployment of new technology. Years of continued under-funding of the
    Advanced Turbines program has already delayed the completion dates for
    turbine R&D necessary for advanced IGCC.

                MEGA-WATT SCALE TURBINE RESEARCH AND DEVELOPMENT

        In the 2005 Enabling Turbine Technologies for High-Hydrogen Fuels
    solicitation, the Office of Fossil Energy included a topic area
    entitled ``Development of Highly Efficient Zero Emission Hydrogen
    Combustion Technology for Mega-Watt Scale Turbines''. Turbine
    manufacturers and combustion system developers responded favorably to
    this topic, but DOE funding constraints did not allow any contract
    awards. The turbine industry recommends a follow-up to this
    solicitation topic that would allow the developed combustion technology
    to be tested in machines at full-scale conditions and allow for
    additional combustion technology and combustor development for both
    natural gas and high-hydrogen fuels.
        The turbine industry believes that this technology is highly
    relevant to industrial coal gasification applications including:
      --site-hardened black-start capability for integrated gasification
            combined cycle applications (the ability to restart an IGCC
            powerplant when the electric grid has collapsed);
      --supplying plant electric load fueled on syngas or hydrogen;
      --increasing plant steam cycle capacity on hot days when large
            amounts of additional power are needed; and
      --in gas turbines for compression of high-hydrogen fuels for pipeline
            transportation.
        The development of MW-scale turbines (1-100 MW) fueled with either
    natural gas or high-hydrogen fuels will promote the sustainable use of
    coal. In addition, highly efficient aeroderivative megawatt-scale
    engines operate under different conditions than their larger
    counterparts and are installed for peaking or distributed generation
    applications. Funding is required to design efficient and low emissions
    combustors that accommodate the new fuels.

                  GAS TURBINES REDUCE GREENHOUSE GAS EMISSIONS

        The gas turbine industry's R&D partnership with the Federal
    Government has steadily increased powerplant efficiency to the point
    where natural gas fired turbines can reach combined cycle efficiencies
    of 60 percent, and quick-start simple cycle peaking units can reach 46
    percent. The gas turbine's clean exhaust can be used to create hot
    water, steam, or even chilled water. In such combined heat and power
    applications, overall system efficiency levels can reach 60 to 85
    percent LHV. This compares to 40-45 percent for even the most advanced
    thermal steam cycles (most of which are coal fired).
        Gas turbines already play a very significant role in minimizing
    greenhouse gas emissions worldwide. Gas turbines are both more
    efficient and typically burn lower-carbon fuels compared to other types
    of combustion-based power generation and mechanical drive applications.
    The Nation needs to reinvigorate the gas turbine/government partnership
    in order to develop new, low-carbon powerplant solutions. This can be
    done by funding research to make gas turbines both efficient and more
    capable of utilizing hydrogen and synthetic fuels as well as increasing
    the efficiency, durability and emissions capability of natural gas
    fired turbines. If the Congress provides adequate funding to DOE's
    turbine R&D efforts, technology development and deployment will be
    accelerated to a pace that will allow the United States to achieve its
    emissions and energy security goals.

        GTA respectfully requests $20 million in fiscal year 2012
    appropriations for the Fossil Energy Advanced Turbines Program to meet
    critical national goals of fuel conservation, fuel flexibility
    (including natural gas, syngas, and hydrogen), greenhouse gas
    reduction, and criteria pollutant reduction.
        Gas Turbine Association Member Companies.--Alstom Power; GE Energy;
    Florida Turbine Technologies; Rolls-Royce; Siemens Energy; Solar
    Turbines; Pratt & Whitney Power Systems; Strategic Power Systems; and
    VibroMeter.
                                     ______

                        Prepared Statement of GE Energy

                                    OVERVIEW

        The following testimony is submitted on behalf of GE Energy (GE)
    for the consideration of the subcommittee during its deliberations
    regarding the fiscal year 2012 budget requests for the Department of
    Energy (DOE). GE recognizes that particularly difficult choices must be
    made in fiscal year 2012. These budget pressures make it essential that
    the subcommittee prioritize those programs that will contribute to
    economic growth and jobs creation and support core technology
    development. GE recommends:
      --in the coal budget, increased investment in integrated gasification
            combined cycle technology development;
      --funding at the levels requested by the administration for solar and
            wind technologies; and
      --support for Smart Grid Research and Development.

                                 FOSSIL ENERGY

        Coal Program, Advanced Energy Systems, Gasification Systems.--The
    proposed fiscal year 2012 budget would reduce gasification research and
    development (R&D) by 32 percent from the fiscal year 2010 funding
    level. This trend confirms a fundamental shift in DOE's focus to
    advanced combustion/postcombustion carbon capture--ostensibly due to
    potential application to new and existing plants. GE believes that this
    is a flawed strategy that compromises the future of coal. It ignores
    the superior environmental performance of Integrated Gasification
    Combined Cycle (IGCC) with respect to water usage, criteria pollutant
    emissions, hazardous air pollutants and useful coal byproducts. It also
    ignores the proven ability of IGCC with full-scale, commercially
    proven, pre-combustion carbon capture to provide the lowest avoided
    cost of CO2 compared to other technologies.
        It remains the case, however, that the base cost of IGCC must be
    reduced further to provide a low-carbon option for coal that does not
    depend on incentives. Today the higher initial capital cost of IGCC
    combined with the current low cost of natural gas places IGCC at a
    disadvantage. DOE studies have shown that IGCC with carbon capture and
    sequestration (CCS) can achieve a cost of electricity equal to current
    new coal generation without CCS, but not without further technology
    improvements. The fiscal year 2012 budget is insufficient to develop
    these improvements.
        DOE should prioritize technology programs having dual benefits in
    terms of reducing base plant cost that will also reduce the avoided
    cost of CO2 as compared to conventional coal with carbon
    capture. GE recommends that the fiscal year 2012 budget for IGCC
    restore the fiscal year 2010 funding level of $63 million to support
    programs having nearer term and dual benefits:
      --design for constructability and cost/technology tradeoff modeling
            ($8 million);
      --design methodologies and technologies for availability and
            reliability ($7 million); and
      --operational flexibility for tomorrow's grid ($5 million) (to
            support the higher penetration of renewable generation).
        Clean Coal Power Initiative.--The Clean Coal Power Initiative
    (CCPI) is an outlet for validation at commercial scale and prototype
    application of technology from the coal R&D programs. The
    oversubscription of the CCPI-3 solicitation demonstrated industry's
    interest in undertaking coal projects. However, the continuing
    uncertainty of carbon policy makes private investment in demonstrations
    that explicitly require carbon capture and sequestration--which reduces
    plant output, reduces efficiency, increases fuel consumption and
    exposes the project developer to potential legal risk--difficult to
    justify.
        Taking these concerns into consideration, GE recommends that DOE
    move forward with the development of a CCPI-4 solicitation no later
    2015. The solicitation should not exclusively require CCS, but should
    include EOR and other beneficial uses of CO2, and should
    allow for technologies that have dual benefits as described above. A
    phased program should be employed for projects that incorporate CCS, to
    begin with funding of front-end engineering designs (FEEDs) and site
    characterization before proceeding further. This will enable a utility
    to provide accurate cost data to its regulators and demonstrate that it
    has a sequestration resource with sufficient capacity for the life of
    its plant.
        Advanced Energy Systems, Hydrogen Turbines.--The proposed fiscal
    year 2012 budget will reduce funding for the Hydrogen Turbine program
    by 53 percent from fiscal year 2010. The program has been successful in
    meeting technical goals and working toward offsetting much of the
    performance penalty associated with coal-fueled IGCC carbon capture
    while also achieving very low NOX emissions. However,
    funding limitations have delayed the program from meeting its original
    2015 goals until 2016-2017, and the fiscal year 2012 budget reduction
    will extend the delay out until 2020. This presents a high risk of
    technology not being ready for the next CCPI demonstration opportunity.
    GE recommends funding of $45 million in fiscal year 2012 to help
    recover schedule so that advanced hydrogen turbine technology is ready
    for the next CCPI opportunity.
        Water Management.--Large amounts of water are needed to produce or
    extract energy, and large amounts of energy are needed to treat or
    transport water. EPA has recently released a proposed Cooling Water
    Intake Rule that underscores the important linkage between water use
    and energy generation. What is more, CO2 capture increases
    raw water usage by up to 125 percent, depending on the underlying
    technology. In order to achieve DOE's aggressive goals of reducing
    freshwater withdrawals and consumption 50 percent by 2015 and 70
    percent by 2020, water-related R&D funding is needed. Despite this
    need, yet again this year, DOE has requested no new funding for the
    Water Management subprogram, and also has stated that all projects
    involving Water Management are to be suspended.
        GE believes that funding should be provided for R&D for innovative
    water reuse technologies and demonstration projects including:
      --cooling tower blowdown reuse;
      --Flue Gas Desulphurization wastewater reuse and recovery;
      --ash pond solids reduction; and
      --treatment and reuse of produced water from unconventional oil and
            natural gas production to further reduce environmental impacts
            and operational costs of upstream energy processes.
        Support also is needed to advance reuse/treatment technologies for
    the conversion of impaired wastewater streams into sources of renewable
    water in areas of water scarcity, reducing the need to use energy to
    transport water over long distances and to support electricity
    generation.

                                RENEWABLE ENERGY

        Solar.--GE urges the Congress to fully fund the DOE's fiscal year
    2012 budget request for Solar Energy. This request for $457 million
    represents a necessary commitment to accelerate the development and
    deployment of solar, particularly Photovoltaics (PV). GE is investing
    significantly in solar PV technology with a focus on cost reduction.
    Public funding for technology innovation and R&D is critical to
    improving solar's cost competitiveness with traditional power-
    generation technologies and to achieving the ambitious goal of a
    dollar-a-watt installed price for solar electricity before the end of
    the decade. In addition, funding for Systems Integration will provide
    more solutions for higher penetration of PV on the grid. By enhancing
    the affordability and reliability of solar, these investments in R&D
    and grid integration can advance the adoption of this technology by
    utilities and other consumers.
        Wind.--GE also urges the Congress to fully fund the DOE's fiscal
    year 2012 budget request for Wind Energy of $127 million. This funding
    will support the continued evolution and scaling of this technology. GE
    is the leading wind turbine supplier in the United States and has
    invested more than $1 billion in wind technology development since
    2002. Further progress in improving the cost, performance, and
    reliability of wind technology is critical. In particular, we believe
    the program's increased focus on advanced drivetrains, control systems,
    and components represent important investments in areas where public
    R&D plays a critical role in accelerating technology development and
    deployment. In addition, continued support for the DOE's new offshore
    wind R&D and demonstration program will be essential to the development
    of a domestic offshore wind market and manufacturing base.

                                   SMART GRID

        Electricity Delivery and Energy Reliability.--GE supports the
    fiscal year 2012 budget request for Smart Grid Research and
    Development. R&D on Smart Grid technologies will advance reliable,
    affordable, efficient, and secure delivery of electric power to
    industrial, commercial, and residential customers, while at the same
    time transitioning the grid to support new forms of renewable energy.
    Integration of traditional grid electric infrastructures with modern IT
    computer and communications systems will be necessary, and GE is
    working closely with national and international standards development
    organizations in the development of Smart Grid interoperability
    standards. Cybersecurity is a fundamental design principle of this
    effort.
        R&D is required to develop advanced grid analytics software to
    optimize grid efficiency and reliability, including ``Big Data''
    storage and real time analysis and exascale computing. Funding through
    ARPA-E and its Wireless Innovation Fund also will be critical to the
    development of cutting edge wireless technologies needed for the
    acquisition of data for grid analytic programs.
        In order to reduce risk and accelerate the adoption of new advanced
    Smart Grid technologies R&D funding will be required for the
    development of Smart Grid modeling, simulation, and visualization of
    both the transmission and distribution networks. Advanced modeling
    capabilities will serve as a critical tool in the modernization of the
    electric grid by assisting grid operators in identifying the technical
    limits of conventional grid technologies, and facilitating development
    of new technologies and solutions to respond to a changing energy mix
    and an increasingly responsive consumer base. In addition, advanced
    modeling capabilities can enable grid operators and power systems
    planners to aggregate, analyze, and act upon the vast quantities of
    data collected by Smart Grid technologies, thereby unlocking the full
    potential of the Smart Grid. DOE should expand industry participation
    in this program to fully leverage work already underway.
        Smart Grid Renewables and EV Research and Development.--The Smart
    Grid can fundamentally change the way electricity is generated,
    transmitted, and consumed, thereby delivering substantial improvements
    in the efficiency and reliability of our Nation's electric grid.
    Additional research is needed in areas such as the integration of plug-
    in hybrid electric vehicles and advanced management of distribution
    voltage.
        GE recommends that in order to achieve higher levels of renewables
    penetration, R&D funding should be set aside for power electronics
    development. GE recommends that the Congress provide support for DOE to
    conduct research into applications of power electronics to support
    Smart Grid technologies.
        Energy Storage.--GE endorses the requested funding for further
    research into energy storage technologies. The fiscal year 2012 budget
    request appropriately broadens the scope of interest to include
    innovations in new battery chemistries. This could lead to radical
    improvements in energy storage performance. Electricity storage is a
    critical technology to enable both deployment of electric vehicles and
    improvements in grid stability and efficiency through utility-scale
    storage.
        GE recommends that equal attention should be given to both electric
    vehicles and storage. The requirements of utility-scale storage are
    quite different from those of electric vehicles. GE recommends
    inclusion of research into large-scale energy storage into this line
    item. This includes all potential storage modalities such as compressed
    air, pumped hydro, and flywheel technologies.

                            COMBINED HEAT AND POWER

        Industrial Technologies Program.--GE supports the request for $25
    million in funding for the Combined Heat and Power (CHP) Generation
    line item of the Industrial Technologies Program. This funding has
    enabled demonstration of a reciprocating natural gas engine operating
    at 47-percent efficiency, up from a baseline of 37 percent while
    preserving the exhaust heat for combined heat and power applications.
    When used in CHP applications the total efficiency can reach 90
    percent, making this by far the highest-efficiency and lowest-emission
    solution for distributed electricity generation. Gas engines also have
    rapid start and efficient load following capability making this a key
    technology to ensure continued stable electric grid operation with
    increasing addition of variable resources such as wind. Continued
    funding will enable completion of the final phase of demonstrating 50-
    percent efficiency.
                                     ______

                  Prepared Statement of GSI Environmental Inc.

        As an environmental consulting firm with more than 25 years
    experience in the oil and gas industry, we strongly encourage the U.S.
    Senate Appropriations Committee to continue to fund the important work
    of Department of Energy (DOE) Oil and Gas Research and Development
    Program for development of new and improved technologies for
    environmental management in the U.S. domestic oil and gas sector.
        Need for Improved Environmental Management Technology.--With the
    current expansion of the shale gas industry into new geographic regions
    of the United States and the over-riding goal of achieving U.S. energy
    independence, the coming years will see ever-increasing exploration,
    drilling, and production activity throughout the country. As this rapid
    expansion is underway, the general public and media are already
    demanding improved measures for protection of natural resources and
    public health.
        Key Role of DOE.--The DOE Oil and Gas Research and Development
    Program is the only Federal program currently dedicated to addressing
    these environmental concerns. The DOE, through the Research Partnership
    to Secure Energy for America (RPSEA), works with the scientific
    community and the oil and gas industry to develop new technologies for
    efficient resource development and environmental protection. This
    information is then shared with both large and small producers to
    improve environmental management practices nationwide.
        Benefits of DOE Environmental Research and Development Program.--
    The attached table identifies 10 examples of projects supported by the
    DOE RPSEA program which are providing practical, tangible benefits in
    terms of improved environmental management in the domestic oil and gas
    sector today, including:
      --Environmentally Friendly Drilling Practices to reduce the footprint
            of drilling operations and enhance environmental protection
            measures;
      --Treatment of Highly Saline Produced Water to allow reuse and
            recycling, rather than discharge, of valuable water resources,
            as well as recovery of a marketable salt product;
      --Protection of Sensitive Eco-Systems in Major Shale Gas Plays in
            Colorado and Utah, in order to reduce potential environmental
            impacts and costs of shale gas development;
      --Innovative Methods for Management of Produced Water including
            generation of electrical energy via waste heat recovery;
            reduction of saltwater production from mature oilfields by use
            of particle gel treatments; and improved management methods to
            reduce water demand and enhance water reuse for hydrofracturing
            operations;
      --New Road Building Techniques to reduce environmental impacts to
            sensitive desert terrains and ecosystems of the Western United
            States during transport of oil and gas production fluids.
        Cost-Effective Research and Development.--The RPSEA program
    provides a unique opportunity to leverage government funding with
    private sector resources. In all grants awarded by RPSEA, the recipient
    is required to secure sponsorship of industry partners and to provide
    matching resources for a significant percentage of the project budget.
    This policy not only ensures that the research work will be directly
    applicable to active oil and gas operations but leverages a relatively
    small investment by DOE to achieve significantly greater economic
    benefit.
        The DOE Oil and Gas Research and Development Program is the only
    supporter of these and other environmental management initiatives. At a
    time of increasing dependence upon domestic oil and gas resources and
    an unprecedented expansion of shale gas drilling activities throughout
    our country, the practical environmental solutions developed by RPSEA
    are critical for the continued protection of our environment and the
    continued leadership of the U.S. oil industry in the arena of
    environmental stewardship.
        We strongly encourage the U.S. Senate Appropriations Committee to
    preserve and expand the funding of the DOE Oil and Gas Research and
    Development Program and RPSEA so that they may continue the important
    work for energy independence and environmental protection.

      TABLE 1.--EXAMPLES OF RESEARCH AND DEVELOPMENT PROJECTS SUPPORTED BY
               RESEARCH PARTNERSHIP TO RESTORE ENERGY FOR AMERICA
    ------------------------------------------------------------------------
                   Project title                     Summary information
    ------------------------------------------------------------------------

                       2009

    Improvement of fracturing in gas  shales..  Use nondamaging fracturing
                                                 fluids and light weight
                                                 proppants combined with
                                                 foams to maximize fracture
                                                 length, minimize formation
                                                 damage, minimize use of
                                                 water in fracturing and
                                                 minimize disposal of fluids
                                                 for gas shale reservoirs.
    Electrical power generation from produced   Identify and demonstrate
     water--Field demonstration of ways to       technology that will reduce
     reduce operating costs of small producers.  the field operating cost of
                                                 electricity and minimize
                                                 environmental impacts by
                                                 creating green electricity
                                                 using produced water and no
                                                 additional fossil fuel.

                       2008

    The environmentally friendly drilling       Combine new low-impact
     systems program.                            technologies that reduce
                                                 the footprint of drilling
                                                 activities, integrate light
                                                 weight drilling rigs with
                                                 reduced emission engine
                                                 packages, address on-site
                                                 waste management, optimize
                                                 the systems to fit the
                                                 needs of a specific
                                                 development sites, and
                                                 provide stewardship of the
                                                 environment.
    Pretreatment and water management for       Evaluate the applicability
     fracturing water reuse and salt             of three pretreatment
     production.                                 processes to pretreat high-
                                                 total dissolved solids,
                                                 high-hardness fracturing
                                                 water, such as is found in
                                                 the Marcellus shale, for
                                                 thermal recovery of water
                                                 and a marketable salt
                                                 product for both stationary
                                                 and mobile pretreatment
                                                 facilities.
    Barnett and Appalachian shale water         Develop water management
     management and reuse technologies.          methods and technologies
                                                 that reduce demands for
                                                 freshwater, reduce
                                                 environmental impact of
                                                 brine disposal, and ensure
                                                 supplies of water for well
                                                 drilling and completion for
                                                 natural gas development in
                                                 the Barnett and Appalachian
                                                 Shale Plays.

                       2007

    Cost-effective treatment of produced water  Test a low-temperature
     using co-produced energy sources for        distillation unit for
     small producers.                            produced water purification
                                                 at the wellhead, yielding
                                                 water clean enough for
                                                 beneficial uses like
                                                 drilling, stimulating, or
                                                 waterflooding.
    Field site testing of low impact oil field  Reduce the environmental
     access roads--Reducing the footprint in     impact of mature field O&G
     desert ecosystems.                          operations and reduce the
                                                 costs and regulatory delays
                                                 associated with additional
                                                 resource development.
                                                 Identify and test new
                                                 techniques to reduce the
                                                 environmental impact of oil
                                                 field lease roads in desert-
                                                 like ecosystems.
    Mitigating water production and extending   Establish methods to
     the life of mature oil wells and further    optimize particle gel
     improve particle gel technology.            treatments to increase oil
                                                 recovery plus reduce water
                                                 production, by improving
                                                 waterflood sweep
                                                 efficiency. Anticipated
                                                 result will be reduction in
                                                 the water production rate
                                                 to decrease associated
                                                 environmental risks and
                                                 impact of any spills.
    Paleozoic shale gas resources of the        Objectives of this study are
     Colorado plateau and eastern great basin,   to identify and map the
     Utah: Multiple frontier exploration         major trends for target
     opportunities.                              shale intervals and
                                                 identify areas with the
                                                 greatest gas potential;
                                                 characterize the geologic,
                                                 geochemical, and
                                                 petrophysical rock
                                                 properties of those
                                                 reservoirs; reduce
                                                 exploration costs and
                                                 drilling risk especially in
                                                 environmentally sensitive
                                                 areas; and recommend the
                                                 best practices to complete
                                                 and stimulate these
                                                 frontier gas shales.
    An integrated framework for treatment and   Develop an Integrated
     management of produced water.               Decision Framework to
                                                 manage and treat produced
                                                 water that has the
                                                 potential to substantially
                                                 reduce the overall costs
                                                 and enhance gas recovery
                                                 and economic viability (and
                                                 longevity) of CBM and gas
                                                 shale fields while
                                                 minimizing potential
                                                 environmental impacts.
    ------------------------------------------------------------------------

                                     ______

      Prepared Statement of the National Association for State Community
                               Services Programs

        As Chair of the Board of Directors for the National Association for
    State Community Services Programs (NASCSP), I am pleased to submit
    testimony in support of the Department of Energy's (DOE) Weatherization
    Assistance Program (WAP) and in support of DOE's State Energy Programs
    (SEP). In these difficult budgetary times, we understand that tough
    decisions have to be made. However, WAP and SEP are proven, cost-
    effective, measurably successful, and vital to the Nation's energy
    security and energy-efficiency movements, delivering savings to low-
    income Americans, businesses, and industry. In order to sustain the
    infrastructure and training and technical assistance expertise and
    activities begun with the funding provided by the American Recovery and
    Reinvestment Act of 2009 (ARRA), we seek a fiscal year 2012
    appropriations level of $320 million for the WAP and $125 million for
    SEP. These funding levels are essential to continue and improve these
    outstanding programs for our citizens. Due to the close of ARRA funding
    in March 2012, normally appropriated funds are even more critical to
    allow the WAP network to fulfill its administrative duties and ensure
    continued quality and success at the expanded ARRA level.
        Some examples of the Program's accomplishments include:
      --Creation and continued support of more than 15,000 full-time,
            highly skilled jobs within the service delivery just in ARRA
            funds, with 8,000-10,000 additional jobs from annual grant
            funding, and many more in related businesses, such as materials
            suppliers;
      --Weatherization of an additional 650,000 homes occupied by low-
            income families due to ARRA and approximately 28,000 homes
            through annual appropriations, thereby reducing energy use and
            associated energy bills;
      --Served more than 6.7 million low-income homes since the program's
            inception, with an additional 38.3 million eligible;
      --Saves an estimated 35 percent of consumption for the typical home,
            with savings continuing year-after-year and actual $1 savings
            increasing as fuel prices increase;
      --Saves $437 in first-year energy savings for households weatherized;
      --Returns $2.51 for every $1 spent in energy and nonenergy benefits
            over the life of the weatherized home;
      --Serves as a foundation for residential energy-efficiency retrofit
            standards, technical skills, and workforce training for the
            emerging broader market;
      --Supports communities through local purchasing and jobs created
            nationwide;
      --Reduces residential and powerplant emissions of carbon dioxide by
            2.65 metric tons/year per home;
      --Decreases national energy consumption by the equivalent of 24.1
            million barrels of oil annually.
        WAP is the largest residential energy conservation program in the
    Nation and serves an essential function by helping low-income families
    reduce their energy use. The program was developed in the late-1970s as
    a response to rapidly rising energy costs associated with oil shortages
    created by oil embargoes. The Congress acknowledged that low-income
    families were particularly vulnerable to increased energy price
    fluctuations and created the program to assist those families by
    reducing the cost to heat their homes. WAP was institutionalized within
    the DOE in 1979 and today operates in all 50 States, the District of
    Columbia, five U.S. territories, and two Native American tribes.
    Approximately 1,000 local agencies provide services in every political
    jurisdiction of the country using direct hire crews and local
    contractors to do the work. These network providers use program funds
    to improve the energy efficiency of low-income dwellings, utilizing the
    most advanced technologies and testing protocols available in the
    housing industry. Since the Program's inception, more than 6.7 million
    homes have been weatherized using Federal, State, utility, and other
    monies.
        WAP is still as relevant now as it was when it was formed in
    response to the energy crisis 30 years ago. The savings to America's
    most vulnerable citizens are significant and make a huge, immediate
    difference in their lives. These families have an average energy
    burden--the percentage of their income needed to pay residential energy
    bills--around 15 percent of their income as compared to around 3-
    percent for nonlow income households, or five times greater. And the
    poorest families have a much higher energy burden than that. For
    example, in the State of California, subcommittee Chairman Dianne
    Feinstein's home State, there are more than 718,000 households below 50
    percent of the Federal poverty level. Those families have an energy
    burden of 36.5 percent--more than one-third of their income. With lower
    energy bills, these families can increase their usable income and buy
    other essentials like food, shelter, clothing, medicine, and
    healthcare. WAP provides a positive return on investment to meet its
    primary objectives of making homes warmer in winter and cooler in
    summer and creating safer and healthier indoor environments.
        Because of the advanced diagnostics and technology developed in
    WAP, the program is the foundation for the emerging green energy-
    efficiency retrofit workforce. There are approximately 25,000 jobs in
    the WAP network, with many more supported in related businesses, such
    as material suppliers. These jobs are good, living wage jobs, which are
    more important than ever due to the economic downturn in the housing
    and construction industries. Workers are highly trained and receive on-
    going instruction to further develop their skills. WAP is at the core
    of the larger energy-efficiency retrofit market, and its training
    curricula, methods, and centers play an integral role in developing
    tools and techniques and a workforce. WAP managers, trainers, and
    technical experts figure prominently in the Recovery through Retrofit
    Initiative, contributing their expertise to the Workforce Guidelines
    for Residential Energy Efficiency Workers and playing a key role in the
    development of standardized training curricula, worker certifications,
    and training facility accreditations.
        American Recovery and Reinvestment Act provided $5 billion over 3
    years for the WAP. This investment has allowed States and local
    agencies to increase significantly their efforts to weatherize 650,000
    homes. WAP has created more than 15,000 new jobs across the country
    since 2009, making it the 8th highest ARRA job creating program. This
    figure does not include the countless jobs and businesses supported
    with WAP money in the foundering housing industry during this period.
    Furthermore, the network has weatherized more than 380,000 homes
    through February 2011, and will reach its production goals before the
    conclusion of ARRA grants.
        While the ARRA invested significantly in energy efficiency and
    independence, in order to sustain the program beyond March 2012 it is
    critical that the WAP maintain adequate funding so the network can
    continue to provide jobs and support local economies as well as promote
    energy efficiency nationwide.
        NASCSP urges the subcommittee to fund WAP at $320 million while
    providing $125 million for SEP. The WAP remains a crucial component of
    our Nation's energy future. WAP is a clearly proven investment, has
    provided significant energy savings, and has helped more than 6.7
    million families live in safer, more comfortable living conditions.
    This is a program that has proved its worth and effectiveness for more
    than 30 years. NASCSP looks forward to working with subcommittee
    members in the future as we attempt to create energy self-sufficiency
    and good jobs for millions of American families through these
    invaluable national programs.
                                     ______

        Prepared Statement of the National Association of State Energy
                                   Officials

        Mr. Chairman and members of the subcommittee, I am Phil Giudice of
    Massachusetts and chair of the National Association of State Energy
    Officials (NASEO). NASEO is submitting this testimony in support of
    funding for a variety of Department of Energy (DOE) programs.
    Specifically, we are testifying in support of no less than $125 million
    for the State Energy Program (SEP), which is equal to the
    authorization. SEP is the most successful program supported by the
    Congress and DOE in this area. This should be base program funding,
    which allows States to set their own energy priorities while
    contributing to national energy goals, with no competitive portion
    which focuses primarily on DOE's internal priorities. SEP is focused on
    direct energy project development, where most of the resources are
    expended. SEP has set a standard for State-Federal cooperation and
    matching funds to achieve critical Federal and State energy goals. As
    American Recovery and Reinvestment Act (ARRA) winds down over the
    remainder of this year, the base SEP funds are the critical linchpin to
    help States in building on these activities and expanding energy-
    related economic development, much as SEP has done for 30 years. We
    also support the $320 million fiscal year 2012 budget request for the
    Weatherization Assistance Program (WAP). These programs are successful
    and have a strong record of delivering savings to low-income Americans,
    homeowners, businesses, and industry. We also support the budget
    request for the Energy Information Administration (EIA) of $124
    million. EIA's State-by-State data is very helpful. EIA funding is a
    critical piece of energy emergency preparedness and response, and there
    are significant new EIA responsibilities under EISA. NASEO continues to
    support funding for a variety of critical buildings programs, including
    Building Codes Training and Assistance, ENERGY STAR, the commercial
    buildings initiative/Better Buildings and residential energy efficiency
    at least at the fiscal year 2010 level. NASEO also supports funding for
    the Office of Electricity Delivery and Energy Reliability (OE), at
    least at the fiscal year 2010 funding level. Specific funding should be
    provided for the Division of Infrastructure Security and Energy
    Restoration of no less than $18 million, which funds critical energy
    assurance activities. We also strongly support the R&D function and
    Operations and Analysis function within OE. The industries program
    should be funded at least at the fiscal year 2010 level.
        Formula SEP funding provides a basis for States to share best
    practices among themselves. These best practices (even without stimulus
    funds) allow States to get a great deal accomplished. These types of
    activities include energy financing programs, revolving loans, utility-
    based programs, energy service performance contracts, etc.
        In January 2003 (and updated in 2005), Oak Ridge National
    Laboratory (ORNL) completed a study and concluded, ``The impressive
    savings and emissions reductions numbers, ratios of savings to funding,
    and payback periods . . . indicate that the State Energy Program is
    operating effectively and is having a substantial positive impact on
    the Nation's energy situation.'' ORNL found that $1 in SEP funding
    yields:
      --$7.22 in annual energy cost savings;
      --$10.71 in leveraged funding from the States and private sector in
            18 types of project areas;
      --annual energy savings of 47,593,409 million source BTUs; and
      --annual cost savings of $333,623,619.
        Energy price volatility makes the program more essential as
    businesses and States work together to maintain our competitive edge.

                        STIMULUS FUNDING IMPLEMENTATION

        We want to thank the subcommittee for the tremendous support
    provided in the stimulus package for a variety of State and local
    funding initiatives, including $3.1 billion for SEP, $5 billion for
    WAP, $3.2 billion for the Energy Efficiency and Conservation Block
    Grant and $300 million for the ENERGY STAR appliance rebate program.
    This is a major task. We have been working closely with DOE to
    implement these programs as quickly as possible. We have had regular
    calls with all the State energy officials to address implementation
    questions. We have also had a series of regional conference calls among
    the States, and we have seven regional coordinators helping to share
    ``best practices'' among the States. NASEO is sharing best practices
    and providing information to officials at all levels of government in
    order to more effectively coordinate this effort. We are convinced that
    these funds are helping to engineer major positive changes in the U.S.
    economy that will improve all sectors of the economy. NASEO believes it
    is important to maintain base levels of appropriations for critical
    programs, such as SEP and WAP, in order to avoid a huge decrease in
    funding after a rapid stimulus increase.
        With respect to ARRA spending for SEP, of the $3.1 billion
    appropriated, virtually all the money is now under contract and work is
    being implemented. We and DOE are working through the barriers that
    slowed spending, including National Environmental Policy Act
    compliance, Davis-Bacon wage rates, Buy-American clauses, historic
    preservation, lead paint requirements and general procurement issues.
    It is important to stress that the key figures are the ``commitment''
    and ``contracted'' amounts, because that is when people get hired and
    work commences. States generally do not pay until projects are actually
    completed and milestones are met. We do not pay-up front in most cases.
    In economics jargon, the Federal spending figure is actually a lagging
    indicator. Of the ARRA funds dedicated to SEP and Energy Efficiency and
    Conservation Block Grant, more than $1 billion has been dedicated to
    energy financing programs in cooperation with the private sector. This
    has the greatest long-term potential.
        Examples of Successful State Energy Program Activities.--The States
    have implemented thousands of projects. We have previously supplied to
    subcommittee staff examples of programs implemented under ARRA. Here
    are a few representative examples.
        Alabama.--The State has dedicated $25 million for an energy
    revolving loan fund for business and industry, and has dedicated
    millions for energy efficient school retrofit grants. The Walker County
    school project alone is saving $146,000 per year in energy costs with a
    $300,000 SEP investment.
        Alaska.--SEP-supported projects include the Village End-Use
    Efficiency Measures project, which assisted 31 remote villages. In the
    last year, more than 400 projects are now being implemented in order to
    reduce the terribly high-energy costs in these villages (they have
    historically paid, at a minimum, more than six times the national
    average for electricity costs).
        California.--The State is implementing a comprehensive residential
    and commercial ($18.8 million) building retrofit program, an energy
    finance program for municipalities, and State building retrofits
    through revolving loans (more than $25 million), clean-energy business
    financing, low-interest loans for local governments and ``Green Jobs''
    workforce training ($20 million). Jobs associated with the residential/
    commercial program total 1,200. The Energy Technology Assistance
    Program is creating more than 700 jobs.
        Hawaii.--This State is focused on energy efficiency and renewable
    energy projects intending to supplement existing efforts. For example,
    promotion of ENERGY STAR upgrades for hotels, technical assistance to
    develop green buildings and other energy efficient buildings, have been
    two major projects. Funds have supplemented the public benefits
    program, the county energy efficiency efforts and alternative fuel
    efforts. Electric vehicle development, including infrastructure
    expansion, has also been a focus.
        Illinois.--The SEP-supported Green Industry Business Development
    Program is supporting renewable energy and energy efficiency component
    manufacturers and manufacturers of recycled content products. One of
    the State's many school projects installed a geothermal heating and
    cooling system in four, Rantoul schools, which resulted in 145 local
    jobs and important training.
        Iowa.--This State has committed substantial funding to municipal
    energy-efficiency projects and green jobs initiatives. A good example
    has been Sun Prairie Vista Court Apartments where more than $110,000 is
    being saved annually and the owner contributed $1.7 million. They have
    also instituted an energy loan program. Funding has supplemented
    programs and projects conducted under the State-funded Iowa Power Fund.
    The energy office has also been very involved in preserving propane
    supplies to respond to emergencies.
        Kentucky.--$14 million has been dedicated to the Green Bank of
    Kentucky for energy efficiency financing for public buildings by
    utilizing revolving loans. In addition, funds were provided for an
    advanced energy efficient battery initiative, commercial office
    building energy efficiency retrofits, industrial facility energy
    efficiency retrofits, Home Performance with ENERGY STAR, utility smart
    grid activities, and $10 million for energy efficiency in K-12 schools.
    The school districts are targeting more than $14 million in savings for
    the program. The partnership with the University of Kentucky is also
    providing funds for ``circuit riders'' to work across the State on
    energy projects.
        Louisiana.--$25.7 million has been committed to energy efficiency
    retrofits in higher education buildings; $15.7 million is dedicated to
    retrofits of commercial buildings and energy efficiency for new and
    existing homes; and $10 million has been committed to renewable energy
    development. Their Home Energy Rebate Option (HERO) program provided
    energy-efficiency rebates of more than $1 million in 3 months for more
    than 400 homeowners. The commercial rebates are as high as $5,000 per
    facility.
        Maine.--The State's SEP-supported project fund helped match funding
    for Tex Tech (sports equipment manufacturer) in North Monmouth, that
    allowed the purchase of new biomass equipment saving $400,000 in fuel
    costs and retaining 40 local jobs. The State's new home energy
    efficiency retrofit program has now begun and is implementing
    residential retrofits.
        Mississippi.--$17 million was dedicated for energy efficient public
    buildings, including retrofits, performance contracting, and building
    energy codes; $10 million was allocated for renewable energy projects,
    smart meters on public facilities and support for community college
    workforce training. An additional $10 million was slated for businesses
    to implement energy efficiency or renewable energy upgrades. The
    Mississippi Job Protection through Energy Economic Development Program
    has provided grants to 55 companies for energy retrofits, with annual
    savings of almost $4 million. One example is the Laurel Machine and
    Foundry Company, where they are savings almost $100,000/year, and the
    company said that without these funds they would have closed and 32
    employees would have lost their jobs.
        Montana.--$22.3 million has been allocated to State universities,
    community colleges and other State facilities for energy efficiency
    projects; 89 projects are underway. The Montana Veterans Nursing Home
    in Columbia Falls has been the beneficiary of one of these projects,
    allowing the State to be repaid in only 3 months for the energy-
    efficiency upgrade, including cost share. Additional funds have been
    dedicated to renewable energy demonstration projects, including CORE
    Wind Power for a 3 MW facility in Ronan, Algae Aqua Culture
    Technologies for biomass projects, the biodiesel blend project in the
    Hi-Line area and a Chester-based oilseed processor project.
        New Jersey.--$7 million has been committed to fund solar
    installations on multi-family buildings; $4 million for residential
    energy efficiency financing; $4 million for multi-family energy
    efficiency loans; $17 million for municipal energy efficiency
    incentives; $6 million for State building energy efficiency; and an
    additional $15 million for grants and loans for energy efficiency and
    renewable energy applications. Recently, 430 home energy retrofits were
    completed under their Home Performance with ENERGY STAR program.
        Rhode Island.--Funds have been provided for a green building
    initiative in State facilities, a commercial/industrial energy
    efficiency initiative, building code upgrades and energy efficient
    transportation:
      --$8.4 million has been allocated for renewable energy loans;
      --$2.3 million has been allocated for a residential energy-efficiency
            initiative with approximately $7.5 million in leveraged funds
            projected.
        Larger (utility-scale) renewable projects received $5 million.
    Sixty-nine renewable energy projects were funded in the past year
    alone.
        South Carolina.--In 2010, the South Carolina Energy Office awarded
    grants to 12 nonprofit organizations, colleges, and governments to
    reduce energy costs and implement alternative energy projects. The
    Columbia College solar water heating systems for the dormitories are
    one example of this initiative. Other projects include solar absorption
    cooling at Claflin University, solar water heating for Central Electric
    Power Cooperative customers and solar projects for Furman University.
        South Dakota.--$20.5 million has been dedicated to a State
    revolving loan for public buildings, with $3 million for a limited
    number of grants. Thirty-six projects are underway and activities
    include energy-efficiency retrofits, LEED ratings, on site generation,
    etc. The 100-year-old State capitol building was retrofitted, saving $2
    million per year for that project alone.
        Tennessee.--The State committed substantial resources to a
    comprehensive solar development program; 108 grants totaling $9 million
    have been awarded to a variety of solar projects, leveraging $24
    million in private funds. These projects includes both consumer
    projects as well as manufacturing development. The State has also
    expanded its energy efficiency programs.
        Texas.--$137.8 million has been allocated for public sector
    building energy efficiency, including revolving loans for schools,
    hospitals, municipalities, public colleges, etc., $52 million has been
    allocated for a competitive renewable energy grant program.
    Transportation efficiency programs have also been funded. Fifteen
    cities and one county recently installed energy efficient streetlights
    (with $7.8 million in SEP funds) that use one-thirtieth of the energy
    of the old technology. In Beaumont alone, 62 of the 168 traffic signals
    were replaced with energy-efficient technology.
        Washington.--More than $20 million was allocated for an energy
    efficiency and renewable energy loan and grant program, including a $2
    million grant to Port Townsend Paper Corp. for a biomass project that
    is supporting 398 full- and part-time jobs and leveraged $53 million in
    other funds. More than 10 times the amount of available funds was
    requested by potential recipients. Additional funding of $5 million was
    provided for energy-efficiency credit enhancements (supporting $50
    million in total project expenditures). Community-wide residential and
    commercial energy efficiency pilots received $14 million in grants.
    Other projects include an ``electric highway initiative establishing
    recharging locations on I-5, support for a 7.5 MW wind turbine at the
    Grays Harbor Paper mill in Hoquiam in cooperation with the Grays Harbor
    PUD and a $1 million project for a wood-fired boiler at Forks Middle
    School in the Quillayute Valley Schools district.
                                     ______

           Prepared Statement of the National Hydropower Association

        The National Hydropower Association (NHA) \1\ appreciates the
    opportunity to submit this statement regarding hydropower research and
    development (R&D) funding priorities for the fiscal year 2012
    appropriations budget cycle.
    ---------------------------------------------------------------------------
        \1\ NHA is a nonprofit, national trade association dedicated to
    promoting the Nation's largest renewable resource and advancing the
    interests of the hydropower and new ocean, tidal, conduit and in-stream
    hydrokinetic industries and the consumers they serve.
    ---------------------------------------------------------------------------
        NHA requests $100 million in the fiscal year 2012 Energy and Water
    Development Appropriations bill for the Department of Energy's (DOE)
    Waterpower Program to support initiatives across all hydropower
    technology sectors. The types of technologies covered are conventional
    hydropower, including pumped storage, as well as marine and
    hydrokinetic (MHK) technologies that access energy in ocean waves,
    tides, and the flowing water in rivers and man-made channels.
        A $100 million funding level, split equally between the
    conventional and MHK programs, is necessary to support a national goal
    to double U.S. capacity of renewable hydropower and the research needed
    to increase production and create more than 1.4 million cumulative new
    jobs all across the country. Investment in hydropower R&D will drive
    innovation across the economy and maintain American competitiveness and
    create jobs.
        Taking maximum advantage of our Nation's hydropower infrastructure
    by increasing efficiencies at existing hydro facilities and adding
    capacity at nonpowered dams are two near-term steps in the long-term
    effort to expand hydropower resources. However, development of some of
    this capacity requires necessary and needed R&D investment (both short
    and long term) in order to advance the state of the technology, study
    potential impacts, understand the extent of the developable resource,
    and more.
        In particular, Government funding is needed at the front end when
    private investments would not recoup the full value of the resulting
    social good. This is especially true in the case of basic R&D
    initiatives, where under-investment is prevalent.

                HYDROPOWER'S CURRENT AND POTENTIAL CONTRIBUTION

        As America's leading renewable electricity resource, hydropower
    currently provides approximately 7 percent of our Nation's electricity
    supply and two-thirds of America's renewable electricity.\2\ In
    addition, hydropower is positioned to meet 20 percent of President
    Obama's goal of 80-percent clean energy by 2035.
    ---------------------------------------------------------------------------
        \2\ Based on 2009 generation data. Energy Information
    Administration. http://www.eia.doe.gov/cneaf/electricity/epm/
    table1_1.html.
    ---------------------------------------------------------------------------
        Looking to the future, NHA believes hydropower can double its
    contribution to the Nation's electricity portfolio, providing
    affordable, reliable, and sustainable baseload electricity through the
    responsible development and expanded use of conventional hydropower,
    pumped storage and new technologies, both MHK and conduit applications.
        Support for this forecast is evident. With approximately 100,000 MW
    of installed capacity today, recent studies have determined that 60,000
    MW of growth is possible by 2025 alone. Right now, there are projects
    with more than 88,000 MW of capacity before the Federal Energy
    Regulatory Commission (FERC). Applications for DOE Waterpower program
    funding opportunities in the past far outnumbered available funds--both
    for new MHK and conventional technologies. For example, in 2010 DOE
    awarded $32 million to seven projects to pursue upgrades to existing
    facilities, although dozens more projects submitted applications.
        In addition to the new generation this development will bring
    online, hydropower projects provide a host of ancillary services to the
    grid and environmental benefits. Hydropower facilities can quickly go
    from zero power to maximum output, making them exceptionally good at
    meeting rapidly changing demands for electricity throughout the day. In
    fact, because of its ability to be quickly dispatched, and its
    blackstart capability, hydropower was key in restoring power to the
    grid during the 2003 Northeast blackout. From a clean air perspective,
    hydropower generation in 2009 avoided more than 196 million metric tons
    of carbon emissions.\3\
    ---------------------------------------------------------------------------
        \3\ According to EPA Carbon Equivalencies Calculator http://
    www.epa.gov/cleanenergy/energy-resources/calculator.html#results.
    ---------------------------------------------------------------------------
    HYDROPOWER'S RESEARCH AND DEVELOPMENT NEEDS SPAN ALL INDUSTRY SECTORS--
         CONVENTIONAL, NEW HYDROKINETIC TECHNOLOGIES AND PUMPED STORAGE

        To realize the opportunity to increase hydropower generation that
    will strengthen our economy, environment and renewable energy supplies,
    continued and expanded funding support is needed to develop and deploy
    novel technologies, improve operational procedures, and provide
    rigorous analysis. Under a fully funded DOE Water Power program, all
    involved interests will have better access to information on the
    potential extractable energy from rivers and coastal waters; and
    technical support to harness this renewable resource through
    sustainable and cost-effective electric generation.
        Funding to support these goals should be directed to:
        Technology Development and Demonstration.--Improving hydropower
    technologies is the most important function of the Water Power program.
    Through previous funding, increases in efficiency and decreases in
    environmental impact have been realized. This investment must continue.
    New materials R&D and testing of better small- and low-head hydro
    technologies would bring down the costs of converting existing
    infrastructure for electricity generation and result in important
    upgrades and modernization of existing powerplants. Along these lines,
    initiatives that may be pursued include (but are not limited to):
      --Deployment support for projects, both MHK and conventional hydro;
      --Feasibility studies to identify additional low-cost, advanced-
            technology opportunities (Hydro Advancement Project); and
      --Development of operational tools, standard methods, and best
            practices to maximize generation at existing and new
            facilities.
        Resource Assessment/Environmental.--Innovation in the hydropower
    industry also goes beyond creating new technologies. The DOE program
    plays an important role in gathering baseline industry data, developing
    updated resource assessments and new growth analyses, studying project
    operations for maximization of both energy and environmental values, as
    well as studying new issues that may affect the industry--from
    potential effects of climate change on operations to addressing the
    energy storage needs to maintain a secure and functioning electric
    grid. Another key role for DOE is to determine the potential capacity
    on existing infrastructure. The work on the National Hydropower Assets
    Assessment Program is one example of a valuable tool that needs
    continued support. Also, the creation of a data clearing house of
    studies and funding for operations benchmarking would enable both the
    conventional and MHK industries to better forecast and model data and
    demonstrate the cost effectiveness of projects.
        Additional activities include:
      --Identify resources and address technology/policy needs to maximize
            medium- to long-term opportunities;
      --Integrate resource assessments and cost curves with key pumped
            storage and small hydro technology needs to identify critical
            U.S. Army Corps of Engineers (COE) drivers; and
      --Provide market analysis to accurately quantify and monetize
            hydropower ancillary services.
        Regulatory Analysis.--In addition to these areas, hydropower
    development faces a comprehensive regulatory approval process that
    involves many participants that includes FERC, Federal and State
    resource agencies, local governments, tribes, nongovernmental
    organizations, and the public. The system strives to promote
    development while protecting important environmental values. However,
    it can also contain redundancies and inefficiencies that unnecessarily
    slow the deployment of clean renewable hydropower and delay much-needed
    environmental enhancements and benefits. At a time when we need all the
    renewable, affordable, and reliable energy we can get, the United
    States needs an updated regulatory process that gets projects off the
    drawing board and puts people to work in a more efficient way. To
    support these efforts, programmatic funding could:
      --Engage regulators and environmental stakeholders to reduce license
            time and cost;
      --Align energy generation and environmental priorities across river
            basins to facilitate development; and
      --Generate data to more accurately correlate generation with
            environmental impacts.

    ASSOCIATED FUNDING SUPPORT FOR HYDROPOWER DEVELOPMENT WITHIN THE CIVIL
                 WORKS PROGRAMS OF THE ARMY CORPS OF ENGINEERS

        NHA is also working in partnership with Federal agencies to
    identify and pursue smarter and more efficient processes to develop
    hydropower projects on Federal facilities. A new Memorandum of
    Understanding signed recently by COE and FERC demonstrates an on-going
    and active commitment to work together and identify current challenges
    and opportunities to increase hydropower development.
        In this vein, NHA also calls for support of COE's own efforts to
    operate, maintain and upgrade its existing hydropower projects. NHA
    specifically supports the work COE is doing under its Hydropower
    Modernization Initiative (HMI) to develop a long-term capital
    investment strategy. One significant feature of the HMI is the Asset
    Investment Planning Tool, which was designed to:
      --analyze the condition of critical components and the consequences
            of failure;
      --determine the value of additional hydropower and its cost;
      --quantify risk exposure for capital investments; and
      --create 20-year funding scenarios to allow for timely and cost-
            effective rehabilitation or replacement of hydropower
            facilities and their components. To assist the Federal
            Government in rehabilitating aging equipment, COE also is
            pursuing increased use of non-Federal funds.

                                   CONCLUSION

        Unlocking the vast hydropower potential of our rivers, oceans,
    tides, and conduits requires funding the R&D initiatives that make
    innovative ideas a reality. The DOE Water Power program is an important
    source of support for the researchers, scientists, and developers
    working to grow hydropower's contribution to our country's clean-energy
    resources. Continued investment in this program is crucial to ensuring
    that innovative new technologies come to market and are able to
    generate the clean electricity America needs.
        And the hydropower industry itself is doing its part to support
    investment in new technologies and project improvements. Among the
    hundreds of millions of dollars invested each year in environmental
    enhancements at hydro facilities, companies are supporting the
    development of a new generation of turbines that improve fish passage,
    generate more power, utilize water more efficiently, and improve the
    oxygen content of the water released downstream of a facility, among
    many other inventive technological and operational advancements.
                                     ______

    Prepared Statement of the New Mexico Institute of Mining and Technology

        Dear subcommittee members: I am appealing to you to help deter the
    proposed budget cuts to the Department of Energy's (DOE) Fossil Energy
    Research and Development Program. My specific concern is for the
    National Energy Technology Laboratory (NETL) and its programs (such as
    Strategic Center for Natural Gas and Oil, NETL), which will be affected
    by the proposed cuts. The NETL provides the sustenance for important
    programs in research, education, and technology transfer.
        The NETL is the only U.S. National Laboratory dedicated to fossil
    energy technology. It funds a wide range of energy and environmental
    research and development programs that will benefit the United States
    for years to come. The NETL truly plays a crucial role in keeping
    oilfield research alive in the United States, increasing in importance
    in recent years as research activities within the oil industry decline
    drastically. Major companies have dramatically reduced their research
    capabilities while the independent oil and gas producers have virtually
    none. It is possible that the United States could lose its leadership
    role in oil and natural gas research and technology unless the oil and
    gas programs of the NETL can be maintained.
        It has been proposed that NETL's Natural Gas/Oil Technology program
    will be reduced in fiscal year 2011-2012. If this comes to pass,
    research programs both here at New Mexico Tech and all over the country
    could be severely impacted. Research conducted at American colleges and
    universities to increase domestic oil and natural gas production, to
    assist independent oil and natural gas producers, and to provide
    education and training in the newest technologies, will suffer. Efforts
    to provide technology transfer to the independent oil and natural gas
    producers of our oil and gas-producing States will likewise be
    drastically curtailed.
        The independent producers of the United States are now responsible
    for most domestic oil and gas production, as the major oil companies
    have increasingly sold their domestic oil assets to independents.
    Research sponsored by the DOE through such entities as NETL is the only
    significant source of unbiased technical research and development for
    these companies. As research at the National Laboratories, and the
    petroleum engineering departments and research institutes all over the
    United States will be severely impacted without this funding, service
    companies cannot fill the void created by this loss of research effort.
        Thus, one of the most strongly affected groups will be the
    independent oil and gas producers of the United States, who are now the
    backbone of the domestic industry. For many years, the NETL has
    supported enhanced oil recovery research in support of our Nation's
    independent producers, as well as natural gas research and technology.
    The lack of NETL-funded energy research may not be significant to major
    oil companies, but it will certainly burden these local, relatively
    smaller, independent oil and gas producers.
        Another facet of technology transfer that must not be overlooked is
    information. The information most needed by small producers are:
      --production data;
      --well information;
      --surface leasing information; and
      --many user-friendly software packages.
        DOE funding enables outreach groups affiliated with universities to
    offer these data free online. This in turn allows small producers to
    substantially reduce their overhead, thus enabling them to compete in
    the oil and gas industry.
        Finally, if oilfield research is discontinued, the vast amounts of
    residual oil remaining to be recovered in United States oilfields (more
    than 300 billion barrels) will be abandoned. Most of this cannot be
    recovered without the technological breakthroughs currently being
    sought through research funded by NETL. Reduced domestic oil production
    could potentially compromise our Nation's economic growth and security,
    forcing more and more reliance on imports.
        In conclusion, science and industry have looked to the NETL for
    many years to help provide solutions for the survival of domestic oil
    and gas production. The continued existence of many of our research
    organizations and academic departments depends on continuation of
    Federal funding in order to carry out their multiple missions of
    education, technology transfer and research, which will ultimately
    benefit the Nation. Loss of the NETL's oil and gas research funding, on
    the other hand, will damage these missions and ultimately diminish our
    pre-eminence.
                                     ______

               Prepared Statement of the Nuclear Energy Institute

        The Nuclear Energy Institute \1\ (NEI) supports the
    administration's request for fiscal year 2012 funding for the Nuclear
    Regulatory Commission (NRC) ($1.038 billion) and the following
    Department of Energy (DOE) programs:
    ---------------------------------------------------------------------------
        \1\ The Nuclear Energy Institute is the industry's policy
    organization, whose broad mission is to foster the beneficial uses of
    nuclear technology in its many commercial forms. Its membership, more
    than 350 corporate members in 17 countries, includes every U.S. utility
    that operates a nuclear powerplant as well as international utilities,
    plant designers, architect and engineering firms, uranium mining and
    milling companies, nuclear service providers, universities,
    manufacturers of radiopharmaceuticals, universities, labor unions, and
    law firms.
    ---------------------------------------------------------------------------
          Light Water Reactor/Small Modular Reactor Licensing Technical
            Support.--$67 million.
          Fuel Cycle Research and Development.--$155 million.
          Light Water Reactor Sustainability Program.--$21.3 million.
          Nuclear Energy Enabling Technologies.--$97 million.
          Integrated University Program.--$45 million.
          Next-Generation Nuclear Plant.--$49.5 million.
          Innovative Technology Loan Guarantee Program Office.--$36 billion
            in new loan guarantee authority for nuclear power projects.
        In addition, the nuclear energy industry strongly opposes
    legislation to impose a proposed tax on electric consumers for the
    uranium enrichment facility decontamination and decommissioning fund.

                ENSURING A STRONG NUCLEAR REGULATORY COMMISSION

        An independent, credible regulatory agency is required for public
    confidence in commercial nuclear energy facilities. During the next few
    years, NRC will be challenged to continue its inspection and licensing
    activities while analyzing the Fukushima Daiichi nuclear accident and
    determine what changes, if any, may be necessary in NRC requirements.
    Continuity and stability of the five-member commission during this
    critical time will be essential to ensure NRC staff and licensees have
    clear guidance on implementation of the lessons learned. NRC functions
    most effectively when it has a full complement of five commissioners,
    and the nuclear energy industry believes the Congress' highest priority
    should be ensuring that vacancies on the Commission do not occur.
        The industry supports fiscal year 2012 funding at the NRC's
    requested level of $1.038 billion, which is a $28.7 million decrease
    below its fiscal year 2010 funding levels. The industry remains
    concerned, however, at the steep escalation in agency budgets and
    staffing levels over the last decade, from 2,763 staff in fiscal year
    2001 to 3,981 staff proposed in fiscal year 2012, and from $487 million
    in fiscal year 2001 to more than $1 billion proposed in fiscal year
    2012. The industry recommends, therefore, that any additional
    Fukushima-related work be funded by re-allocating resources and
    achieving greater efficiencies, without compromising safety oversight
    of existing plants and ongoing licensing activities on license renewal,
    power uprates, reactor design certifications, combined construction and
    operating licenses and small modular reactor licensing issues. The
    industry believes the NRC can absorb additional analysis of the
    Fukushima accident without diverting resources from other programs. If
    the NRC cannot do so, the commission should explicitly provide the
    subcommittee with the specific resource needs and what the agency can
    do to accommodate new activities within its current budget.
        The industry applauds the continued oversight of the NRC by the
    Congress to prioritize agency actions. The agency has made some
    progress, but should continue to achieve greater transparency in its
    budgeting to reveal planned staffing and resource needs by individual
    divisions. This is particularly true concerning the defense and
    national interest programs funded by the taxpayer in appropriated
    funds. In any one year, NRC should ensure that these programs are
    funded at the entire 10 percent of available funds. A firewall should
    exist between fee and fee-relief sources of funds so the user fee is
    not used as an additional source of funding for appropriated programs.
    This would demonstrate to the Congress, the public and the industry,
    which pays 90 percent of the NRC's budget, that the budget fairly
    reflects those activities that are licensee-specific.
        Once again, the administration has proposed terminating the
    Integrated University Program, which supports the Nation's universities
    and community colleges. This program is unique in supporting important
    nuclear science and engineering research and workforce training. It is
    a vital program that provides financial support for students and junior
    faculty. The program is managed jointly with DOE's Office of Nuclear
    Energy and DOE's National Nuclear Security Administration and has been
    authorized by the Congress. NEI supports $15 million for NRC to
    continue its participation in the program in fiscal year 2012 and
    recommends that NRC fund the program at that level, not at the $11.5
    million it has proposed for fiscal year 2011.

                  DEVELOPMENT OF ADVANCED REACTOR TECHNOLOGIES

        DOE's Office of Nuclear Energy fiscal year 2012 budget as proposed
    by the administration is lower than what was appropriated in fiscal
    year 2010. NEI supports the fiscal year 2012 budget as it continues the
    new initiatives for the Office of Nuclear Energy requested in fiscal
    year 2011. NEI believes that the following programs deserve support and
    represent the highest priorities for the nuclear energy industry:
          Light Water Reactor Sustainability Program.--$21.3 million;
          Light Water Reactor Small Modular Reactor Licensing Technical
            Support.--$67 million;
          Nuclear Energy Enabling Technologies.--$97 million;
          Integrated University Program.--$45 million; and
          Next-Generation Nuclear Plant.--$49.5 million.
        The Idaho National Laboratory (INL) is designated as the lead lab
    for nuclear energy. INL maintains an extensive research infrastructure
    and workforce that will become even more vital for postaccident
    analysis and response to the radiological clean-up at Fukushima
    Daiichi.

     URANIUM ENRICHMENT DECONTAMINATION AND DECOMMISSIONING FUND TAX UNDUE
                              BURDEN ON CONSUMERS

        The administration's fiscal year 2012 budget calls for legislation
    to reinstate the uranium enrichment decontamination and decommissioning
    fund, with a proposed tax on electric consumers of $200 million a year
    for 10 years. Electric utilities have already paid twice for
    decommissioning and decontamination at uranium enrichment plants that
    were originally operated by the Energy Department--first as part of the
    price for uranium enrichment services from the facilities and again
    under provisions of the Energy Policy Act of 1992. Under the 1992 law,
    the tax on utilities was to end after 15 years or the collection of
    $2.25 billion, adjusted for inflation. The utilities paid this amount
    in full as specified by law. NEI will continue to oppose this proposal
    in legislation and appreciates the support of the subcommittee in
    rejecting this proposal in fiscal year 2010 and fiscal year 2011.

                    INTEGRATED USED FUEL MANAGEMENT PROGRAM

        The Government has an obligation under the Nuclear Waste Policy Act
    to dispose of used nuclear fuel from commercial reactors and defense
    applications. The industry believes licensing should be completed.
    Also, numerous State and local governments and the National Association
    of Regulatory Utility Commissioners are actively opposing DOE's
    withdrawal of the application for the Yucca Mountain repository at NRC
    and in the courts. The project should proceed and be funded so that the
    technical review of the license application is completed. The industry
    opposes the fiscal year 2012 budget request by the NRC to terminate the
    licensing proceeding. We urge the subcommittee to request a specific
    plan and resources required for continuing the Yucca Mountain licensing
    process, assuming the courts rule the application cannot be withdrawn.
        Given that it has been terminated, consumer payments into the
    Federal Nuclear Waste Fund should be suspended for the period of time
    for which there is no waste management program against which to assess
    costs. The industry supports a three-part integrated used fuel
    management strategy that includes:
      --on-site storage at reactor sites and development of centralized
            storage at volunteer locations;
      --research, development, and demonstration of advanced fuel cycle
            technologies; and
      --development of a permanent repository.
        NEI supports the work of the Blue Ribbon Commission on America's
    Nuclear Future to develop recommendations on how the Nation should
    manage used nuclear fuel and high-level radioactive waste and looks
    forward to reviewing the draft report scheduled for release this
    summer.
        Given the importance of this report, the subcommittee should
    encourage the commission to complete its work as soon as possible.
        The nuclear energy industry consistently has supported research and
    development of the advanced fuel-cycle technologies proposed in the
    Fuel Cycle Research and Development program ($155 million). DOE's plans
    should be adjusted based on its review of the recommendations of the
    Blue Ribbon Commission that the Congress accepts.

       INDUSTRY SUPPORTS $36 BILLION FOR DEPARTMENT OF ENERGY INNOVATIVE
                      TECHNOLOGIES LOAN GUARANTEE PROGRAM

        The nuclear industry appreciates the support provided by the
    subcommittee for the DOE loan guarantee program for nuclear energy
    plants and uranium fuel-cycle facilities. NEI urges members to maintain
    the appropriated funds for projects under development for fiscal year
    2011. The administration has requested an additional $36 billion in
    loan volume in fiscal year 2012. This would provide sufficient loan
    volume for projects already in due diligence at DOE, and would provide
    certainty to other projects in the development pipeline that financing
    support will be available. Absent some certainty that financing will be
    available, companies may slow development of these projects.
        Loan guarantees for nuclear energy projects are not a subsidy and
    there is no cost to the taxpayer. The use of loan guarantees will lower
    the overall cost of nuclear energy projects, ultimately reducing the
    cost of electricity to consumers. Companies granted loan guarantees by
    DOE for nuclear energy projects must pay a premium for use of the
    program, plus cover all administrative costs.
        Budget scoring is not required for nuclear energy loan guarantees,
    because simply approving loan ``volume'' is not an appropriation. It
    simply authorizes the agency to issue loan guarantees up to that
    amount. For most loan guarantee programs, in which the Federal
    Government pays the cost of the loan guarantee, the 1990 Federal Credit
    Reform Act (FCRA) requires authorization of loan volume in an
    appropriations bill. However, the Government Accountability Office
    determined that the clean energy loan guarantee program authorized by
    the 2005 Energy Policy Act should not be subject to this FCRA
    requirement, because the companies receiving the loan guarantee pay the
    cost to the Federal Government of providing that guarantee--not
    taxpayers.
        NEI continues to believe that the clean-energy loan guarantee
    program, although essential, is not yet a workable financing platform,
    and urges the subcommittee to exercise its oversight responsibilities
    on implementation by the executive branch, particularly on the issues
    of the credit subsidy cost that project sponsors are expected to pay.

                             ENVIRONMENTAL CLEAN UP

        NEI supports DOE's budget request of $6 billion for the
    Environmental Management Office.
                                     ______

                   Prepared Statement of NuScale Power, Inc.

        Dear Madam Chairman and ranking member: On behalf of NuScale Power,
    Inc. of Corvallis, Oregon we request that the subcommittee approve the
    President's budget request of $67 million for small, modular reactors
    (SMRs) within the Office of Advanced Reactor Research Development and
    Demonstration. This request includes both the research portion for
    advanced SMRs, but especially the commercialization cost-share portion
    for up to two light water reactor SMR designs.
        SMR technologies build on a rich history of American innovation and
    world-class nuclear design, manufacturing, and operations. The
    President has recognized the need for nuclear power as part of a
    comprehensive energy, environment and employment strategy for this
    country, including new financial incentives. NuScale is ready to
    deliver:
      --NuScale Power uses a one-third-scale test facility on the Campus of
            Oregon State University to document critical tests required to
            comply with Nuclear Regulatory Commission (NRC) design
            certification and licensing. The next phases of regulatory
            approval are costly in the United States and require Federal
            support.
      --Since last year NuScale Power has conducted extensive discussions
            with various government operations centers managed by both
            Department of Energy (DOE) and Department of Defense. We are in
            the process of scoping both research and deployment
            opportunities that have the potential to benefit the Federal
            Government directly by lowering the facilities' long-term costs
            and reducing their greenhouse gas impacts as an electric power
            consumer.
      --NuScale Power is constructing a full-scale control room simulator
            to specifically address digital instrumentation, control, and
            human factors analysis that will be integrated in all of the
            next-generation nuclear plants, regardless of size. NRC staff
            has visited Corvallis to review these plans and provide input.
      --As confirmed by a panel of independent experts whose work was
            presented to the NRC in September 2009, NuScale Power has
            achieved safety margins that are 10 times safer than the next
            generation of large nuclear plants. This translates into
            improved public safety and better financial risk management by
            using scalable technology.
      --NuScale Power's inherently safe technology has received
            considerable attention since the natural disaster and ensuing
            nuclear incident in Japan. We have developed a 9-page ``safety
            illustration'' that can be viewed on our Web site. It shows how
            our reactor and spent-fuel pool might have responded to similar
            events. From what we know now, the results are very positive.
      --Finally, in addition to the President's leadership in requesting
            funding for research, development, and demonstration of SMRs,
            NRC and its staff have also continued to provide the on-going
            licensing support efforts in their own separate budget request.
            In an NRC briefing held on March 29, 2011, NRC staff outlined
            for the Commission the planned approach to licensing SMRs.
            Staff concluded by saying, ''It's not a matter of whether we
            can license these plants but how we best proceed.'' This was
            encouraging to us, and is a positive sign that the Congress can
            move forward with taxpayer dollars to support the licensing
            efforts.
        Our company experienced a temporary financial setback earlier this
    year, but we are receiving considerable interest in new funding from a
    consortium that includes American manufacturers, fabricators,
    suppliers, constructors, and investment firms. We have advised DOE that
    we will be in a position to compete for Federal cost-sharing dollars as
    early as fiscal year 2011 if the program is approved by the Congress.
        NuScale Power wants to thank you and your subcommittee members for
    the support you have provided SMRs thus far. We look forward to
    continued work with you and your staff.
                                     ______

    Prepared Statement of Richard Newton Hill, Jr., Former President/Owner
                            of Hill Equipment Corp.

      ONE-HALF OF 1 PERCENT OF THE ENERGY IN THE OCEAN WAVES IS ENOUGH TO
                 PROVIDE THE ENTIRE WORLD'S ENERGY REQUIREMENTS

        I wish to introduce and obtain a grant for my wave-and-tide
    actuated renewable energy pump.

                           USE AND DISCLOSURE OF DATA

        This abstract includes data that shall not be disclosed outside the
    Government and shall not be duplicated, used, or disclosed--in whole or
    in part--for any purpose other than to evaluate this abstract in
    particular U.S. Patent Application continuation-in-part (CIP) 12220244.
    However, if an award is made as a result of--or in connection with--the
    submission of this data, the Government shall have the right to
    duplicate, use, or disclose the data to the extent provided in the
    resulting award. This restriction does not limit the Government's right
    to use information contained in this data if they are obtained from
    another source with restriction.
        Patent application CIP No. 12220244 is a continuation of U.S.
    Patent Application 10/600701. Patent Application 10/600701 was ready
    for issuance until this CIP was filed.
        I will explain my way of harnessing the energy in the ocean waves.
    You simply hang a great ballast weighted piston on a chain or cable
    attached to a float or ship. As the float or ship rises and falls the
    ballast-weighted piston located at or near the sea floor and enclosed
    in a pipe is raised and lowered, causing a pumping action that then can
    be converted into any form of energy you want. All other attempts up to
    this time, involve mounting fragile and/or complex structures at or
    near sea level to do the work. This gives you the task of dealing with
    changing tides and wave conditions and systems that do not hold up in
    the adverse conditions of the ocean. If you place the ballast weighted
    piston inside a tube, say going up 100 ft. high from the ocean floor,
    in say 200 ft. of water, you now have a simple, robust pump with an
    approximate vertical 100 ft. tide and wave range of operation.
    Alternatively, to use the same example, a hole could be drilled or
    excavated 100-200 feet deep in the ocean floor and the cylinder is
    placed in this hole. The pump, under this arrangement, then can be
    brought right up to the shoreline if needed.
        The initial steps are:
    Phase I
        Provide feasibility studies, which will include modeling.
        Build a laboratory/shop model prototype pump.
        Determine how much energy can be captured by my invention off the
    shores of the United States and its possessions.
        Determine how much energy can be captured by my invention off the
    shores of other countries.
        Determine the best design for the buoy or float and other
    components. Wave action is the result of molecular excitation and for
    practical purposes extends about 15 feet below the surface.
        Selection of materials for buoy, pump cylinder, and piston.
        Submit results to the Department of Energy for justification of
    additional funding.
    Phase II
        Build a hydroelectric power generating pilot plant approximately
    one-third the size of a full-scale electric powerplant capable of
    generating approximately 20 MW. This will be a permanent installation,
    will feed power into the power grid and be used to test any future
    modifications before they are put into general use. The renewable
    energy pumps will be placed in holes drilled in the ocean floor and/or
    on the ocean floor bed. The water they pump will be delivered to an
    enclosed dammed area and thence run through turbines to create
    electricity as the water flows back to the sea.
    Phase III
        Build a full-scale hydroelectric powerplant with accompanying pumps
    and dam based on the experience of phases I and II.
        I have determined five additional significant uses for this pump:
          Seafood Farming.--Pump water to a levied area and raise fish or
            shrimp, etc. When ready for harvest, you would let the water
            out and scoop up the fish or shrimp by hand or mechanically,
            eliminating the need for shrimp and fish trawlers, while
            guaranteeing a harvest or catch every time. This is similar to
            what is being done in some South American countries now, using
            their high tides to capture the water behind levees, and is the
            reason these countries can compete here in the United States
            with local fishermen.
          Land Reclamation From the Sea, Etc.--Again, a levee would be
            thrown up with the pump on the ocean or sea side. The suction
            would run under the levee and excavate the water behind the
            levee, leaving dry land.
          There Exists ``Dead'' Areas in the Sea, Depleted of Oxygen.--
            Pumps could be placed in these areas to circulate oxygen
            enriched sea water in and eliminate the ``dead'' areas.
          Oil Contaminant Reclamation.--At surface level, a containment
            barrier, as is used today, would be put in place. A skimmer
            funnel would be placed inside the containment area just below
            the surface, its' suction leading back down to one or more
            pumps. The contaminants could be pumped up to a Tender where
            further skimming would transpire. A final phase may be
            introducing the oil/sea water mix into boiling brine. The water
            would be absorbed into the brine and the difference in the
            specific gravity between oil and brine will allow for a clean
            cut in removing the oil. Alternatively, the contaminants could
            be moved to a refinery or pumped to a levied area on shore for
            further processing, containment, confinement, and removal. A
            similar process, but with the suction at the bottom of the
            ocean, can be developed for crude such as Bunker ``C'', which
            have a tendency to remain on the seabed floor and eventually
            wash ashore in balls of oil/sea water contaminants.
          Make the Deserts Bloom.--Pump the ocean water over or tunnel
            through mountain ranges, such as the Sierra Mountains on our
            west coast, spread the ocean water out on the desert floor.
            Hydroelectric power would be created, first to provide booster
            pumps, if needed, to assist moving the water over the
            mountains, then on the downside, the energy would again be
            reclaimed in the form of hydroelectric power, etc. The
            resultant evaporation from the desert floor would form clouds
            and the prevailing winds would carry the moisture eastward,
            causing rain to fall, ``Making the Deserts Bloom'', as the
            clouds meet the Rocky Mountains. If this proves feasible on our
            western deserts, then Morocco with the Atlas Mountains and the
            Sahara should become a top priority for me and the world to
            relieve the economic and political tensions building there and
            affecting us, bringing stability to that portion of the world.
            The Sahara is equal or larger in size than the entire United
            States. Hydroelectric power would again be created. Salt water
            basins could be created to concentrate and extract minerals
            from the sea as well as removing man made pollutants from the
            world's oceans. The world populations demand for potable or
            fresh water and food is projected to exceed the entire amount
            of fresh water and food available by the year 2020, making this
            the most important task to achieve as it will alleviate this
            projected problem. When fully deployed, the additional moisture
            added to the atmosphere will act like a ``radiator'' for the
            Earth, moderating the Earth's climate as well as providing a
            cleansing effect on the atmosphere by way of ``washing'' more
            pollutants out of the air.

                             BACKGROUND OF INVENTOR

        Richard Newton Hill, Jr., hereafter called ``inventor'', attended
    UCLA, majoring in physics and the Georgia Institute of Technology,
    majoring in chemical engineering. The inventor went to work as an
    oilfield roughneck, drilling for oil on offshore drilling rigs in the
    Gulf of Mexico off the coast of Louisiana for about 5 years then worked
    another 5 years as a sales engineer selling construction, marine,
    industrial and oilfield equipment in the Louisiana and gulf coast
    regions. In 1967, the inventor launched his own business, Hill
    Equipment Corp., selling, repairing, fabricating and inventing
    equipment for the construction, marine, industrial, aerospace and
    oilfield industries, including the National Aeronautics and Space
    Administration (NASA), Michoud, New Orleans, Louisiana for the
    manufacture of the NASA space shuttle.
        The inventor is currently writing three books, has filed outside
    witness testimony with the U.S. Congress Subcommittee on Commerce,
    Justice, Science, and Related Agencies regarding allegations of the
    sabotage of the Space Shuttle Columbia and the assassination of
    President John F. Kennedy. This and related information can be viewed
    at the inventor's Web sites--www.sabotagecolumbia.info and
    www.sabotagecolumbia.com.
        The inventor is well versed in the technical feasibility of his
    invention' and there is nothing proposed that is not now technically
    feasible.
                                     ______

         Prepared Statement of the Society for Industrial and Applied
                                  Mathematics

        We are Dr. Lloyd Nicholas Trefethen, president, and Dr. Reinhard
    Laubenbacher, vice president for Science Policy, of the Society for
    Industrial and Applied Mathematics (SIAM). On behalf of SIAM, we are
    submitting this written testimony for the record to the Subcommittee on
    Energy and Water Development of the Senate Committee on Appropriations.
        SIAM has approximately 13,000 members, including applied and
    computational mathematicians, computer scientists, numerical analysts,
    engineers, statisticians, and mathematics educators. They work in
    industrial and service organizations, universities, colleges, and
    government agencies and laboratories all over the world. In addition,
    SIAM has more than 400 institutional members--colleges, universities,
    corporations, and research organizations. SIAM members come from many
    different disciplines, but have a common interest in applying
    mathematics in partnership with computational science toward solving
    real-world problems.
        First, we would like to emphasize how much SIAM appreciates your
    subcommittee's continued leadership on and recognition of the critical
    role of the Department of Energy (DOE) Office of Science and its
    support for mathematics, science, and engineering in enabling a strong
    U.S. economy, workforce, and society. DOE was one of the first Federal
    agencies to champion computational science as one of the three pillars
    of science, along with theory and experiment, and SIAM deeply
    appreciates and values DOE activities.
        Today, we submit this testimony to ask you to continue your support
    of the DOE Office of Science in fiscal year 2012 and beyond. In
    particular, we request that you provide the Office of Science with
    $5.42 billion, the level requested in the fiscal year 2012 budget
    request. SIAM is aware of the significant fiscal constraints facing the
    administration and the Congress this year, but we note that, in the
    face of economic peril, Federal investments in mathematics, science,
    and engineering create and preserve good jobs and help to maintain U.S.
    pre-eminence in innovation, upon which our economy depends.

              THE ROLE OF MATHEMATICS IN MEETING ENERGY CHALLENGES

        The Nation faces critical challenges in energy, including in energy
    efficiency, renewable energy, improved use of fossil fuels and nuclear
    energy, future energy sources, and reduced environmental impacts of
    energy production and use. As DOE and the research community design a
    long-term strategy to tackle these issues, the tools of mathematics and
    computational science (theory, modeling, and simulation) have emerged
    as a central element in designing new materials, predicting the impact
    of new systems and technologies, and better managing existing
    resources. Already, mathematical and computing researchers in
    universities, national laboratories, and industry are providing
    insights that propel advances in such fields as nanotechnology,
    biofuels, genomics, climate modeling, and materials fabrication.
        To tackle many of these challenges, DOE must be able to understand
    complex systems such as the U.S. power grid, the dispersion of nuclear
    radiation after a disaster, and the Earth's climate system. These and
    other complex systems have high levels of uncertainty, lack master
    plans, and are susceptible to breakdowns that could have catastrophic
    consequences. Understanding complex systems helps mitigate these risks
    and facilitate the development of controls and strategies to make
    systems more efficient.
        These issues were addressed in a May 2008 report by an independent
    panel of mathematicians that reviewed the challenges and strategic
    plans of all units of DOE in order to better define the goals for the
    DOE Applied Mathematics Program, which is located within the Office of
    Advanced Scientific Computing Research (ASCR) in the Office of
    Science.\1\ In light of the broad need for complex systems
    understanding, the panel recommended that DOE focus on three strategies
    for addressing the gaps in our understanding:
    ---------------------------------------------------------------------------
        \1\ Applied Mathematics at the U.S. Department of Energy: Past,
    Present and a View to the Future. A Report by an Independent Panel from
    the Applied Mathematics Research Community, May 2008. Available on line
    at http://brownreport.siam.org/Document%20Library/Brown_
    Report_May_08.pdf.
    ---------------------------------------------------------------------------
      --Predictive modeling and simulation of complex systems.
      --Mathematical analysis of the behavior of complex systems.
      --Using models of complex systems to inform policy makers. (This
            includes advancing the mathematics that supports risk analysis
            techniques for policy-making involving complex systems that
            include natural and engineered components, and economic,
            security, and policy consequences.)
        While progress has been made in these areas since the 2008 report,
    further research is necessary to fully understand these systems and
    address our energy challenges.

                     DEPARTMENT OF ENERGY OFFICE OF SCIENCE

        Activities within ASCR play a key role in supporting research that
    begins to fulfill the needs described above. Particularly critical
    programs include: the Applied Mathematics program, the Scientific
    Discovery through Advanced Computing (SciDAC) program, and programs to
    maintain the pipeline of the mathematical workforce. SIAM supports the
    $466 million requested for ASCR for fiscal year 2012. SIAM appreciates
    that the requested increase for fiscal year 2012 is more balanced among
    ASCR programs and not entirely directed to investments in computing
    hardware as it was in the fiscal year 2011 request. Without investments
    in algorithm research, software development, and partnerships between
    mathematicians, disciplinary researchers, and computer and
    computational scientists, we cannot realize the full benefit of new
    high-performance computers or effectively develop the next generation
    of such computers.
        The applied mathematics and computational science and engineering
    work supported by the Applied Mathematics Program is a necessary
    element for many of the flagship efforts of the Office of Science and
    other units of DOE. Therefore, partnerships within the Department are
    critical for applying mathematics to key challenges in effective
    creation and use of a variety of energy sources. SIAM supports ASCR
    plans to initiate new partnerships with other DOE offices such as the
    Office of Electricity Delivery and Energy Reliability, the Office of
    Nuclear Energy, and the Office of Environmental Management. SIAM also
    supports the proposed activity on uncertainty and climate change within
    the Biological and Environmental Research Office, which will help to
    quantify the uncertainty in the predictions of current climate models,
    as well as the proposed activity on Computational Materials and
    Chemistry by Design within the Basic Energy Sciences Office.

            SUPPORTING THE PIPELINE OF MATHEMATICIANS AND SCIENTISTS

        Investing in the education and development of young scientists and
    engineers is a major step that the Federal Government can take to
    ensure the future prosperity and welfare of the United States.
    Currently, the economic situation is negatively affecting the job
    opportunities for young mathematicians--at universities, companies, and
    other research organizations. It is not only the young mathematicians
    who are not being hired who will suffer from these cutbacks. The
    research community at large will suffer from the loss of ideas and
    energy that these graduate students, postdoctoral fellows, and early
    career researchers bring to the field, and the country will suffer from
    the lost innovation.
        Maintaining the pipeline of the mathematical workforce with
    programs that fund research and students is especially important
    because of the foundational and cross-cutting role that mathematics and
    computational science play in sustaining the Nation's economic
    competitiveness and national security, and in making substantial
    advances on societal challenges such as energy. DOE programs support
    the educational and professional development of the researchers who
    will, at universities, companies, and the national laboratories, tackle
    the research problems (such as the complex system modeling described
    above) needed to change energy usage in this country. These young
    mathematicians and computational scientists are the drivers and
    employees of the clean-energy economy.
        Within the Office of Advanced Scientific Computing Research, the
    Computational Science Graduate Fellowship program is a highly
    successful and model program that enables students to receive robust
    training in mathematics and also learn to interface with a wide variety
    of other fields. We request that strong support for this program
    continue, as well as ongoing support for postdoctoral fellows at DOE
    national laboratories and universities. In addition, we endorse DOE's
    proposed continuation in fiscal year 2012 of the Office of Science
    Early Career Research Awards and Graduate Fellowships programs.

                        FISCAL YEAR 2011 APPROPRIATIONS

        Before concluding, we want to make a brief comment on the
    resolution of appropriations for fiscal year 2011. The 18-percent cut
    proposed for the Office of Science for the remainder of fiscal year
    2011 in H.R. 1 would devastate research that is critical for the
    country's energy and economic future while costing thousands of jobs at
    national laboratories and research universities across the country.
    SIAM urges you to provide at least the fiscal year 2010 level of
    funding for the Office of Science in fiscal year 2011.

                                   CONCLUSION

        The programs in the Office of Science, particularly those discussed
    above, are important elements of DOE's efforts to fulfill its mission.
    They contribute to the goals of dramatically transforming our current
    capabilities to develop new sources for renewable and low-carbon energy
    supplies and improve energy efficiency to ensure energy independence
    and facilitate DOE's effort to increase U.S. competitiveness by
    training and attracting the best scientific talent into DOE
    headquarters and laboratories, the American research enterprise, and
    the clean-energy economy.
        We would like to conclude by thanking you again for your ongoing
    support of the DOE Office of Science and the actions you have already
    taken to enable DOE and the research and education communities it
    supports, including thousands of SIAM members, to undertake the
    activities that contribute to the health, security, and economic
    strength of the United States. The DOE Office of Science needs
    sustained annual funding to maintain our competitive edge in science
    and technology, and therefore we respectfully ask that you continue
    your support of these critical programs.
        We appreciate the opportunity to provide testimony to the
    subcommittee on behalf of SIAM and look forward to providing any
    additional information or assistance you may ask of us during the
    fiscal year 2012 appropriations process.
                                     ______

               Prepared Statement of Southern Company Generation

        Mr. Chairman and members of the subcommittee: Southern Company
    operates the U.S. Department of Energy's (DOE) National Carbon Capture
    Center (NCCC) (http://nationalcarboncapturecenter.com) at the Power
    Systems Development Facility (PSDF) in Wilsonville, Alabama for DOE's
    National Energy Technology Laboratory (NETL) and several industrial
    participants.\1\ The PSDF was conceived as the premier advanced coal
    power generation research and development (R&D) facility in the world
    and has fulfilled this expectation. NETL responded to the need for
    cost-effective carbon dioxide (CO2) capture technologies by
    establishing the NCCC which is collaborating with technology developers
    world-wide in accelerating development of lower-cost CO2
    capture technology for application to coal-fueled powerplants.
    ---------------------------------------------------------------------------
        \1\ Current PSDF participants include Southern Company, the
    Electric Power Research Institute (EPRI), American Electric Power,
    Luminant, NRG, Peabody Energy, Arch Coal, Inc., and Rio Tinto.
    ---------------------------------------------------------------------------
        I would like to thank the Senate for its past support of the NCCC
    and request the subcommittee's continued support of the DOE's Fossil
    Energy R&D core budget at recently enacted levels of $404 million per
    year. The Obama administration's fiscal year 2012 budget request of
    $291 million per year for DOE coal R&D is inadequate to provide the
    robust Fossil Energy program needed to enable development of a range of
    advanced technologies necessary to assure continued use of coal. At a
    time when our country's economy is recovering, we need to assure
    continued utilization of domestically produced, low-cost, coal-based
    power generation. DOE's Fossil Energy R&D efforts have produced
    significant results to advance coal-based power. DOE's core R&D
    budgets, combined with investments by the private sector assure a
    sustainable technology base on which to address the environmental and
    economic challenges facing continued coal utilization. The continued
    operation of the NCCC in partnership with DOE will benefit the Nation
    by responding to the need for developing cost-effective CO2
    capture technology for coal-fueled power generation by teaming with
    technology developers funded through the DOE Fossil Energy program and
    accelerating the progress of those technologies toward commercial
    deployment by testing and evaluation at the NCCC.
        The NCCC offers a flexible applied R&D test facility which provides
    commercially representative flue gas and syngas and the necessary
    infrastructure in which developers' technologies are installed and
    tested to generate data for performance verification under industrially
    realistic operating conditions. This effort can bridge gaps between
    fundamental R&D and large-scale commercial demonstration and provides
    for a seamless transition for promising CO2 technologies to
    migrate from laboratory into commercial applications. The DOE program
    for CO2 capture in coal-fueled powerplants is divided into
    three areas:
      --postcombustion capture for conventional pulverized coal plants;
      --pre-combustion capture for coal gasification powerplants; and
      --oxy-combustion processes which produce a more CO2-rich
            flue gas than conventional combustion for easier CO2
            capture.
        The NCCC's CO2 capture efforts address all three areas.
        Southern Company also supports the goals of the Clean Coal
    Technology Roadmaps developed by DOE, EPRI, and the Coal Utilization
    Research Council (CURC). These Roadmaps identify the technical,
    economic, and environmental performance that advanced clean-coal
    technologies can achieve over the next 20 years. Over this time period,
    coal-fired power generation efficiency can be increased to more than 50
    percent (compared to the current fleet average of 32 percent) while
    producing de minimis emissions and developing cost-effective
    technologies for CO2 management.

                                    SUMMARY

        The United States has historically been a leader in energy
    research. Adequate funding for fossil energy research and development
    programs, including environmental and climate change technologies will
    provide our country with secure and reliable energy from domestic
    resources while protecting our environment. Current DOE Fossil Energy
    Research and Development programs for coal, if adequately funded, will
    assure that a wide range of electric generation options are available
    for future needs. The Congress faces difficult choices when examining
    near-term effects on the Federal budget of funding energy research.
    However, continued support for advanced coal-based energy research is
    essential to the long-term environmental and economic well being of the
    United States. Prior DOE clean-coal technology research has already
    provided the basis for $100 billion in consumer benefits at a cost of
    less than $4 billion. Funding the administration's budget request for
    DOE coal R&D and long-term support of the Clean Coal Technology Roadmap
    can lead to additional consumer benefits of between $360 billion and
    $1.38 trillion.\2\ But, for benefits to be realized, the critically
    important R&D program in the Clean Coal Technology Roadmap must be
    conducted.
    ---------------------------------------------------------------------------
        \2\ EPRI Report No. 1006954, ``Market-Based Valuation of Coal
    Generation and Coal R&D in the U.S. Electric Sector'', May 2002.
    ---------------------------------------------------------------------------
        One of the key national assets for achieving these benefits is the
    NCCC. The fiscal year 2012 funding for the NCCC needs to be about $45.4
    million to operate (and modify as needed) the facilities to test
    technologies that are critical to the goals of the DOE Carbon
    Sequestration Technology Roadmap and to the success of the development
    of cost-effective climate change technologies that will enable the
    continued use of coal to supply the Nation's energy needs. Any budget
    cuts (for example from $404 million to $291 million per year) in the
    DOE Fossil Energy Core R&D budget could proportionately impact the
    NCCC. A key feature of the NCCC is its flexibility to test new carbon
    capture technologies for coal-based power generation systems in an
    integrated fashion. The NCCC can evaluate solvent, sorbent, and
    membrane CO2 capture technologies as they are integrated
    into actual syngas (from gasification) or flue gas from actual
    powerplant operations. Integrated operation allows the effects of
    system interactions, typically missed in un-integrated, laboratory-
    based, component development programs, to be understood. Testing at the
    NCCC allows the maintenance, safety, and reliability issues of a
    technology to be investigated at a cost that is far lower than the cost
    of commercial-scale testing. The NCCC is large enough to produce data
    to support commercial-scale demonstration plant designs, yet small
    enough to be cost-effective and adaptable to a variety of technology
    research needs. Moreover, by operating a unique, but central R&D test
    facility, available to all CO2 technology developers,
    redundancy in testing sites and equipment is minimized and cost-
    effective use of R&D funds is achieved. The major accomplishments at
    the NCCC/PSDF to date and the current test program planned by DOE and
    the NCCC's industrial participants are summarized below.

                             PRIOR ACCOMPLISHMENTS

        The PSDF test-bed has operated successfully for many years in
    support of DOE's advanced coal program. The two significant
    achievements were in a gasifier suitable for use with low-rank fuels,
    and hot gas filtration to improve energy efficiency. These two
    technologies have progressed to commercialization with integrated
    gasification combined cycle (IGCC) powerplant being built at Kemper
    County, Mississippi, and Dong Guan, China. Skilled staff from
    disciplines essential for a successful research program has gained
    experience by designing and operating the test equipment and by working
    with vendors to develop and improve their technologies. The NCCC/PSDF
    has developed testing and technology transfer relationships with more
    than 50 vendors to ensure that test results and improvements developed
    at the NCCC/PSDF are incorporated into future plants. In some
    instances, testing has eliminated technologies from further
    consideration. Such screening is valuable in that it concentrates R&D
    effort on those technologies most likely to succeed and is an essential
    part of managing the DOE's financial resources. Major subsystems tested
    and some highlights of the test program at the NCCC/PSDF include:
      --the transport reactor;
      --Advanced particulate control systems;
      --Filter Safe-Guard Device; and
      --Coal feed and ash removal subsystems:
        --Syngas cooler enhancements; and
        --Sensors and controls automation improvements.
        These components were integrated into a Transport Integrated
    Gasification (TRIGTM) system and successfully tested at the
    NCCC/PSDF. The TRIGTM process is now being scaled-up for
    commercial deployment. However, the pilot-scale test components remain
    in place and form the basis of a highly flexible, unique testing
    infrastructure to enable pre-combustion (i.e., Gasification based)
    CO2 capture technologies to be evaluated.

              NATIONAL CARBON CAPTURE CENTER CURRENT TEST PROGRAM

        Building on success with TRIGTM, the NCCC/PSDF facility
    has now refocused its mission on supporting the development and scale-
    up of cost-effective, commercially viable carbon capture technologies
    for coal-fueled powerplants through collaboration with the DOE and
    third-party technology developers. Most of the current CO2
    capture technologies are being developed at laboratory- or bench-scale
    under ideal conditions. Continued R&D under realistic field conditions
    are needed to validate laboratory results and identify technical issues
    that are not present under ideal conditions. In collaboration with
    technology developers, the NCCC makes available coal-derived syngas and
    flue gas to carry out applied R&D on components or small pilot-scale
    systems to bridge gaps between fundamental R&D and large-scale
    commercial demonstration and provides for a seamless transition for
    promising technologies to migrate from laboratory into commercial
    applications.
        The NCCC is a unique applied R&D test facility that consists of two
    major sets of infrastructure to support CO2 capture
    technology development. One is the existing pilot-scale coal
    gasification facility that produces syngas for pre-combustion
    CO2 capture technology evaluation and the other is the newly
    constructed Post-Combustion Carbon Capture Center (PC4) which enables
    testing of capture technologies on flue gas from an adjacent pulverized
    coal powerplant. Both are readily adaptable to test a variety of
    technologies at multiple scales, providing data for scale-up to
    commercial applications. This flexibility in conjunction with real-
    world operating conditions, allows the NCCC to support developers in
    advancing the CO2 capture technologies that are critical to
    continued use of coal for power generation. Jointly with the DOE, NCCC
    has developed a Technology Screening Process which is a key evaluation
    tool to assess and prioritize technologies for testing at the facility.
    This process also ensures that final technology selection will form a
    balanced portfolio that promotes the advancement of both near-term and
    long-term candidate technologies.
        Postcombustion.--Today's postcombustion capture technology is
    estimated to increase the cost of electricity (COE) by up to 80
    percent.\3\ For both new and existing powerplants, postcombustion
    capture technology must be made more efficient and cost-effective by
    reducing parasitic power and capital cost requirements. In
    postcombustion capture, CO2 is separated from the flue gas
    in a conventional coal-combustion powerplant downstream of the
    pulverized coal boiler. Many postcombustion capture technologies need
    to be proven and integrated in an industrial powerplant setting.
    Activities at the NCCC for postcombustion capture technology include:
    ---------------------------------------------------------------------------
        \3\ ``Cost and Performance Baseline for Fossil Energy Plants,
    Volume 1: Bituminous Coal and Natural Gas to Electricity, Final
    Report''; NETL, May 2007.
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          Post-Combustion Carbon Capture Center.--This test facility is
            being built to accommodate tests of a wide-range of capture
            technologies from flue gas. The test facility includes three
            major test areas:
        --a pilot solvent test unit to test developers' next-generation
                CO2 absorption solvents;
        --a second test bay to support evaluation of fully integrated test
                systems supplied by technology developers; and
        --a bench-scale test area to accommodate up to four small test
                skids of emerging, advanced technologies such as sorbents
                or membrane systems.
          Pilot Solvent Test Unit.--This facility is designed and
            construction and commissioning were recently completed. Testing
            is underway with a reference solvent and will begin later this
            year on alternative advanced solvents with potential
            improvements in loading capacity, kinetics, or lower heats of
            regeneration.
          Advanced Technology.--Compact membrane contactors and solid phase
            CO2 sorbents, currently being investigated by DOE-
            NETL and private companies, will be assessed and installed.
            NCCC will provide such technologies a scaled-up testing
            platform as development progress warrants.
        Pre-Combustion.--In pre-combustion capture, CO2 is
    separated from the syngas produced by a coal-gasification process,
    prior to the combustion of the syngas in gas turbine for power
    generation. CO2 capture for IGCC is estimated to increase
    COE greater than 35 percent.\3\ Reducing parasitic power and capital
    cost requirements is also needed for development of efficient and cost-
    effective pre-combustion technology. R&D activities at NCCC for pre-
    combustion capture technology for application to gasification-based
    power generation include:
          Advanced CO2 Capture Systems.--New solvents and gas-
            liquid contacting devices are being assessed on syngas. New
            CO2 separation technologies (sorbents or membranes)
            are being scaled-up and tested based on fundamental R&D
            progress by third-party developers.
          Water Gas Shift Enhancements.--Water Gas Shift (WGS) catalyst
            test results have been conducted which reveal that parasitic
            steam consumption can be reduced, which in turn increases the
            net power output of an IGCC plant and reduces COE with
            CO2 capture. Results have been supplied to catalyst
            suppliers and findings are being implemented at a commercial
            IGCC plant currently under construction. Testing of various WGS
            catalysts will continue.
          Advanced Syngas Cleanup.--New advanced syngas cleanup systems are
            being tested for reducing hydrogen sulfide, hydrochloric acid,
            ammonia, and mercury to near-zero levels.
        Oxy-Combustion.--The NCCC is also evaluating the potential benefits
    of oxy-combustion CO2 capture using the pressurized
    transport reactor operating in oxygen combustion mode. Preliminary
    screening studies have been conducted with favorable results. Detailed
    system studies, modeling, and additional economic analysis are being
    conducted to evaluate the commercial feasibility of this technology.
        Gasification.--In developing a cost-effective advanced coal
    powerplant with CO2 capture, all process blocks within the
    powerplant must be optimized in addition to the capture block.
    Including CO2 capture in an advanced coal powerplant will
    increase the plant COE, so opportunities to reduce cost in every part
    of the process will be explored. With highest priority being given to
    low-cost CO2 capture process development, projects that
    reduce overall capital and operating costs will also be included in the
    NCCC test plan to partially offset incremental cost increases from
    CO2 capture addition. These cost reduction projects include
    technology development for syngas cleanup, particulate control, fuel
    cells, sensors and controls, materials, and feeders.

                                   CONCLUSION

        The collaboration among DOE Fossil Energy core R&D, technology
    developers, and private industry supported National Carbon Capture
    Center is making great strides toward advancing the next generation of
    CO2 capture technologies. These technologies hold the
    promise of reducing the costs of CO2 capture to levels
    necessary to assure that affordable, reliable coal-based electric power
    can be produced for America's economy, while also meeting all of the
    environmental challenges associated with coal use. The Congress should
    sustain the DOE Fossil Energy R&D budgets at historical levels.
                                     ______

                        Prepared Statement of Symbiotics

        On behalf of America's independent power producers and hydropower
    developers, I respectfully request the full appropriation in fiscal
    year 2012 of funds authorized in section 242 and section 243 of the
    Energy Policy Act of 2005 (Public Law 109-58). Full funding for the
    Hydroelectric Production Incentives and Hydroelectric Efficiency
    Improvements authorized in Public Law 109-58 is critical for getting
    new hydropower projects into production.
        Currently, there are numerous projects across the United States
    that are under construction, or nearing the construction phase, that
    would be eligible to receive these important incentives if they are
    appropriated for fiscal year 2012. These projects need the incentives
    to remain competitive for private financing. Without these production
    and efficiency incentives, many of the projects under development will
    become uneconomical and may never be built.
        As you may know, the provisions in section 242 and 243 of the
    Energy Policy Act of 2005 were critical in facilitating the financing
    necessary to make many hydroelectric projects economically feasible
    while pursuing the permitting processes. The subsequent appropriation
    of these funds would enable developers across the country to complete
    their projects. This would allow for the production of clean
    electricity that would be more cost effective than other forms of
    renewable energy including wind and solar. Furthermore, it would help
    our Nation achieve energy independence and foster significant new job
    creation.
        Since passage of the Energy Policy Act of 2005, appropriation of
    section 242 and 243 funds was unnecessary because no projects existed
    that were capable of utilizing them. Now, hydropower developers and
    producers are far enough in the development process that these funds
    could be used. In fact, the hydropower projects that are currently
    being developed represent the first new nonmunicipal hydro projects to
    come on line in more than two decades. Full appropriation of section
    242 and 243 funds would provide the critical assistance to get these
    vital projects into production.
        Symbiotics appreciates the opportunity to submit testimony for the
    record.
                                     ______

              Prepared Statement of Technology International, Inc.

        The development and acceptance by the industry of technology
    development designed to minimize drilling risks needs to be supported
    by the United States Government to assure the safety of offshore
    drilling, especially in the deep water Gulf of Mexico.
        Surface seismic surveys provide the initial reservoir information
    for well planning deepwater wells. Seismic techniques are increasingly
    being developed to better image potential drilling hazards, such as
    unstable shallow gas pockets and abnormal high pressures ahead of the
    bit using so-called ``look-ahead'' seismic. Accurate, high-resolution
    seismic data often are not available for critical deepwater development
    projects because of inherent limitations of surface seismic technology
    and difficulties in getting an accurate characterization of formations
    where salt layers are present. Using borehole seismic technology
    throughout the drilling process can play an important role in
    generating more accurate, higher-resolution seismic data for reducing
    the often substantial risks and uncertainty associated with deepwater
    drilling.
        Borehole seismic systems with a surface noise source and a downhole
    receiver are currently commercially available. However, these systems
    are expensive, cumbersome to deploy, have difficulty working in a salt
    environment, they do not provide the ability to ``look ahead of the
    drill bit'', and the information available at the surface for real-time
    decisionmaking is constrained by the bandwidth of the measurement while
    drilling communications link, making this type of seismic while
    drilling (SWD) less practical in deep Gulf of Mexico applications. SWD
    with a downhole noise source, currently not available, could
    effectively overcome these limitations. Seismic while drilling would
    help reduce uncertainty and risk, and improve safety in the deepwater
    well construction process.
        A workshop sponsored by the Department of Energy (DOE) funded
    Research Partnership to Secure Energy for America (RPSEA) included
    invited 125 industry experts, selected based on their individual
    technical qualifications. The workshop was held on July 22, 2010, at
    the Houston Area Research Council facility in Houston, where a diverse
    group of technologies that would help minimize drilling risks were
    identified and evaluated. Afterwards, a poll was taken of the workshop
    participants to identify those technologies that would be of greatest
    value for Gulf of Mexico drilling in deep water and should be the
    industry's highest priority. Two areas selected as highest priority to
    prevent another Gulf of Mexico well blowout were early detection of gas
    influx and better SWD data. Looking ahead of the bit, SWD using a
    downhole source is practical, and will, after sufficient funding
    becomes available, provide real-time seismic images used to accurately
    determine pressures ahead of the drill bit. The availability could be
    accelerated if DOE were to provide ``emerging technology funding'' to
    RPSEA to make ``look ahead'' seismic technologies available to the
    deepwater operators within 12-18 months.
                                     ______

       Prepared Statement of the Universities Research Association, Inc.

        Chairman Feinstein, Ranking Member Murkowski, members of the
    subcommittee, on behalf of Universities Research Association, Inc.
    (URA), I appreciate this opportunity to comment on the administration's
    fiscal year 2012 budget submission for the Department of Energy (DOE).
    URA, a nonprofit organization comprised of 86 member universities,
    serves together with the University of Chicago through the Fermi
    Research Alliance, LLC, as the DOE contractor for the management and
    operation of the Fermi National Accelerator Laboratory (Fermilab). I
    write to express our grave concern for the future of fundamental
    research in the physical sciences in light of the proposed 2012 budget.
        Scientific research is critical to innovation, which is fundamental
    to job creating, economic growth, and global competitiveness. Studies
    have demonstrated unequivocally double-digit percent returns on the
    Nation's investments in fundamental discovery research. Once in an
    unquestioned lead role across all fields of research, we now face
    significant competition from other countries, like China, that have
    understood the importance of investment in science and technology for
    economic growth.
        The President continues to place a priority on DOE in his fiscal
    year 2012 budget request, proposing $29.5 billion which represents an
    increase of $3.1 billion (11.8 percent) more than the fiscal year 2010
    enacted level. Within the President's proposed overall freeze on
    nonsecurity discretionary spending, this is a significant commitment by
    the administration. For DOE, as the Nation's premier funding agency for
    the physical sciences, it is welcome news that the President proposes
    $5.42 billion for the basic research carried out by the DOE Office of
    Science. The President would increase funding for fundamental research
    by about 9 percent more than the fiscal year 2010 level.
        However, the lack of balance within the research programs of the
    Office of Science is troubling. For example, the President proposes a
    24-percent funding increase for the Office of Basic Energy Sciences; a
    22-percent increase for the Office of Biological and Environmental
    Research; and a 21.5-percent increase for Advanced Scientific Computing
    Research. In contrast, High Energy Physics is essentially frozen at the
    fiscal year 2010 enacted level ($797.2 million, an increase of $6.4
    million or 0.8 percent), and Fusion Energy Sciences is reduced below
    the fiscal year 2010 funding request to $399.7 million (a reduction of
    $18 million or 4.3 percent).
        This is a particularly critical time for High Energy Physics as
    Fermilab, the Nation's only national laboratory devoted to research in
    particle physics, transitions from the highly successful running of the
    Tevatron Collider to new projects at the Intensity Frontier of particle
    physics. The Tevatron will shut down at the end of fiscal year 2011, as
    originally planned, now that the Large Hadron Collider in Europe has
    become the focus of research at the Energy Frontier. Fermilab is ready
    to begin new experiments that will put the United States at the
    forefront of studies of neutrinos, a key area of study to understand
    the Standard Model and how the universe began. The delay in completing
    the fiscal year 2011 appropriations bills, in turn, has delayed the
    start of the new undertakings critical to the future of the laboratory.
        High Energy Physics has blazed the path of international
    cooperation on large scientific projects with scientists collaborating
    on the planning, design, construction, and operation of facilities all
    over the world. The field hosts thousands of researchers each year at
    the various experiments and serves as a premier training ground for
    American university students to develop the next generation of
    scientists, engineers, and technicians to carry out discovery science
    and innovation. High Energy Physics, and Fermilab in particular, has
    long reached out to K-12 students to engage their interest in the
    science, technology, engineering, and mathematics fields, which are
    important to the future economic competitiveness of the Nation.
        The America COMPETES Act, reauthorized by the Congress only this
    past December, affirms a bipartisan commitment to double the science
    budgets of DOE and the National Science Foundation over the next 10
    years. The current budget situation is indeed critical. But the growth,
    prosperity, and employment increase needed to deal with it over the
    long term are not achievable without the vibrant economy made possible
    through the innovation and research in which the physical sciences play
    a key role.
        As a university-based organization in partnership to operate and
    manage Fermilab, we urge the subcommittee to support funding for High
    Energy Physics within an overall balanced research program in the basic
    physical sciences within the Office of Science. We urge that the
    subcommittee approve, at a minimum, the President's request for High
    Energy Physics and specifically that it approve the $56 million
    associated with the planned new experiments at Fermilab.
                                     ______

       Prepared Statement of the University Corporation for Atmospheric
                                    Research

        On behalf of the University Corporation for Atmospheric Research
    (UCAR) and the university community involved in Earth sciences research
    and education, I submit this written testimony for the record of the
    Senate Committee on Appropriations, Subcommittee on Energy and Water
    Development. UCAR is a consortium of 76 research universities that
    manages and operates the National Center for Atmospheric Research
    (NCAR) on behalf of the National Science Foundation and the university
    community.
        This Nation must deal with critical national and global energy
    challenges. At a time when we need more research, technological
    innovation, and solutions, I am deeply troubled by the level of cuts
    that the U.S. House of Representatives has proposed for DOE in fiscal
    year 2011, especially the truly destructive cuts proposed for the DOE
    Office of Science (DOE OS), whose basic research is among the most
    valuable and cross-cutting in the world. While I understand that the
    Congress faces difficult budget choices in reining in a growing
    deficit, it would be a mistake for the Congress to balance the budget
    on the back of DOE's research and development. I urge the subcommittee
    to fund the fiscal year 2012 budget request for the DOE OS at $5.42
    billion and the Office of Energy Efficiency and Renewable Energy (EERE)
    at $3.2 billion.
        DOE programs and initiatives in science and education directly
    support university and laboratory communities, funding the work of
    preeminent scientists in our field. Without DOE support, our capacity
    to understand and advance numerous fields of science, including the
    atmospheric sciences, would be seriously compromised. DOE is central to
    the country's economic and technological world leadership and to our
    ability to secure an economically and environmentally sustainable
    future for ourselves and our children. This is why the bipartisan
    National Commission on Fiscal Responsibility and Reform recommended
    that, even amidst major agency spending cuts, the Nation must continue
    to ``expand high-value research and development in energy and other
    critical areas''.
        With the following, I highlight several science research and
    education programs that represent DOE's critical contributions to
    American leadership in science and technology.

                       CLIMATE AND EARTH SYSTEM SCIENCES

        The Office of Biological and Environmental Research (BER) within
    DOE OS makes fundamental contributions to the Nation's premier Earth
    system models and data analysis infrastructure that provide the
    scientific foundation for future decisionmaking on environmental
    change. Without them we would not know the level of risk that cities,
    States, and businesses face from long-term weather trends and what
    societal preparation and adaptation might be needed.
        In particular, BER provides indispensable support to the Community
    Earth System Model (CESM), a joint DOE-NCAR effort that is a
    comprehensive and sophisticated model for analyzing Earth's past,
    present, and future. CESM is a major contributor to national and
    international assessments of environmental change. And while CESM is
    housed and managed at NCAR, it is an open-source climate model,
    involving scientists across the Nation and around the world in making
    contributions and improvements.
        Thanks in part to BER support, CESM and the Nation's other climate
    models are becoming more realistic, incorporating more precise and
    complex natural and human processes that are shaping the global
    climate. For example, the Climate Science for Sustainable Energy Future
    program, a joint effort between NCAR and DOE's Lawrence Berkeley
    Laboratory, is embedding the socioeconomic and energy technology
    components of integrated assessment models into the CESM model in order
    to better understand how the planting of biofuel crops will affect the
    atmosphere, soil, water, and agriculture. These new capabilities will
    allow the climate science community to address societally relevant
    questions in a way that has not been possible in the past.
        New in fiscal year 2012, BER-supported scientists will study
    methods to rapidly integrate new sub-models, datasets, and other model
    components into global Earth system models. Another focus will be
    enabling Earth system models to effectively use future computer
    architectures, such as the new IBM Blue Gene/Q being commissioned at
    Argonne National Laboratory. BER scientists will also expand arctic
    climate research activities and develop new observation capabilities
    for clouds, aerosols, and the terrestrial carbon cycle in this globally
    important and climatically sensitive region. A new Atmospheric
    Radiation Measurement Climate Research Facility site to be developed in
    the Azores will provide critical long-term observations for marine
    clouds and aerosols. Such new research efforts strengthen existing BER
    atmospheric process studies and modeling and are critical for the
    advancement of this scientific field.
        In order to develop more accurate, increasingly realistic, and
    higher-resolution Earth system models, with better environmental
    predictive capabilities for businesses and communities, I urge you to
    fund BER within the DOE OS at the requested $717.9 million for fiscal
    year 2012.

                     ADVANCED SCIENTIFIC COMPUTING RESEARCH

        Also within DOE OS, Advanced Scientific Computing Research (ASCR)
    delivers leading-edge computational and networking capabilities to
    scientists nationwide, enabling advances in computer science and the
    development of specialized software tools necessary to answer major
    scientific questions being addressed by OS and the larger university
    community.
        ASCR's continued progress is of particular importance to
    atmospheric scientists involved with Earth system model development.
    Representing the complex processes and interactions of the Earth's
    systems, while efficiently harnessing the enormous amount of computing
    power necessary, requires very advanced software engineering, computer
    science, and numerical techniques. Because the climate simulations
    using the CESM (described above) are too computationally intensive to
    be run at NCAR alone, they are outsourced to the DOE's Leadership
    Computing Facilities. At Oak Ridge National Laboratory, a new 2.33
    petaflop system is available to the scientific community, and Argonne
    National Laboratory (ALCF) has proposed building a 10 petaflop IBM Blue
    Gene/Q supercomputer next year. The fiscal year 2012 request supports
    continued operations of existing supercomputing systems as well as the
    new ALCF 10 petaflop system.
        DOE's computing capacity is essential to the country. Each major
    upgrade unlocks reams of new detail and data on the characteristics of
    our current and future Earth system. A failure to maintain and continue
    to upgrade these Leadership Computing Facilities would seriously
    undermine the steady progress of the scientific enterprise in this
    area.
        The results of this research and other research like it are brought
    to the broader scientific community through the Scientific Discovery
    through Advanced Computing (SciDAC) program. SciDAC facilitates the
    transfer of basic research into computational science applications
    through direct partnerships between applied mathematicians and computer
    scientists.
        I urge you to fund ASCR within DOE OS at the President's full
    fiscal year 2012 budget request of $465.6 million.

               WORKFORCE DEVELOPMENT FOR TEACHERS AND SCIENTISTS

        DOE OS's education programs, such as the Workforce Development for
    Teachers and Scientists (WDTS) program, are essential to maintaining
    U.S. leadership in science, technology, engineering, and mathematics
    (STEM). WDTS supports, educates, and trains the Nation's STEM workforce
    and facilitates the development of the knowledge and expertise that
    will prepare us to address future energy and environmental challenges.
        WDTS has launched the DOE OS Graduate Fellowship Program to support
    U.S. graduate students pursuing degrees in areas of basic science and
    engineering. The goal of the program is to encourage talented students
    to pursue research-focused graduate studies in physics, chemistry,
    biology, mathematics, computer science, engineering, and environmental
    science.
        Programs like WDTS have produced tens of thousands of leading
    scientists, engineers, and technicians who have dedicated their careers
    to working on the great challenges of the day, including climate
    change, while pursuing answers to many of the most important scientific
    questions in physics, chemistry, biology, environmental and atmospheric
    science, and other areas of basic science. Their work will be critical
    to our Nation's continued leadership in the 21st century.
        I urge you to fund the WDTS program within the DOE OS at the
    President's full fiscal year 2012 budget request of $35.6 million.

                   RENEWABLE ENERGY RESEARCH AND DEVELOPMENT

        Federal investment in the scientific research and technology
    development involved with renewable energy is one of the most important
    investments we can make in our Nation's future and our ability to build
    resilience to economic and environmental challenges. Renewable energy
    conveys numerous cross-cutting benefits to society, including reducing
    our dependence on foreign oil, driving innovation in the energy
    economy, decentralizing the energy market, providing new high-tech
    jobs, reducing the human toll on the environment, and improving air
    quality and public health outcomes.
        Our national research universities, along with DOE laboratories and
    an emerging private sector, are driving the country's growth in
    renewable energy and increasing the efficiency of new technologies. One
    example of such collaboration includes an expanding NCAR partnership
    with DOE's National Renewable Energy Laboratory and the regional
    utility company, Xcel Energy, to develop sophisticated wind energy
    forecasts for operational use. These provide critical information to
    select the most productive locations for new wind turbine farms, better
    integrate wind-generated electricity into the power grid, and make
    critical decisions about powering down traditional coal- and natural
    gas-fired plants when sufficient winds are predicted. To reduce the
    costs of integrating wind and solar energy into the electrical grid and
    to make renewable energy more cost effective, significant improvements
    in weather forecasting technologies are required and additional weather
    observations are needed in the lower atmosphere.
        Given the critical importance to the Nation of developing
    economically and environmentally sustainable technologies for producing
    energy, I urge the subcommittee to fully fund the fiscal year 2012
    budget request of $3.2 billion for EERE.
        I want to thank the members of the subcommittee in advance for
    supporting, through DOE, basic and cutting-edge scientific research and
    for promoting education and workforce development in the environmental
    and other Earth sciences. By doing so, you are advancing the Nation's
    economic recovery and sustaining our global scientific leadership.
                                     ______

                 Prepared Statement of West Virginia University

        This testimony is submitted on behalf of West Virginia University
    on topics including fossil energy coal, oil, and natural gas research
    and development programs; Office of Electricity Programs; and new
    initiatives. In our testimony, we make the following recommendations
    for fiscal year 2012 appropriations:
      --Restore the fuels program to $20 million for coal conversion
            research.
      --Restore the fuel cells program to $50 million.
      --Support both modeling and simulation, and experimental research
            programs for coal systems.
      --Restore funding for oil and natural gas programs, and increase
            budget to $80 million.
      --Do not repeal section 999 program in Energy Policy Act (EPAct)
            2005.
      --Maintain core Coal Research Program at $404 million.
      --Initiate programs in water availability, energy security, and rare
            earth minerals.

                                  INTRODUCTION

        Both the Department of Energy (DOE) Strategic Plan and the DOE
    Quadrennial Technology Review Framing Document cite a projected long-
    term dependency of our Nation on fossil fuels for electric power and
    transportation fuels. Time frames of 25 years and longer are considered
    in these projections. It is imperative that the United States place
    strategic importance on the use of our Nation's coal, oil, and natural
    gas resources to meet our energy needs. This testimony is directed
    toward key programs in coal, oil, and natural gas research.

                                 FUELS PROGRAM

        Consider transportation fuels. Patrolling oil transit routes adds
    an estimated $80 billion annually to our defense costs. In 2008, we
    spent $388 billion on imported petroleum products, 57 percent of our
    balance-of-trade deficit. Production of liquid transportation fuels
    from a mixture of 60-percent coal and 40-percent biomass could provide
    3 million barrels per day of gasoline equivalent by 2020. A coal-plus-
    biomass fuels program would create new jobs through increased coal
    production that could reach to upwards of 50 percent from our current
    levels. Coal-to-liquid plants located in widely dispersed geographic
    locations would support additional jobs and reduce the risks of supply
    interruptions from events such as major hurricanes in the Gulf of
    Mexico. These plants would bolster our national, energy, and economic
    security through utilizing and producing indigenous fuels. Coal-plus-
    biomass fuels meet the requirements of the Energy Policy Act of 2007
    regarding their CO2 footprint, compared to conventional
    petroleum, and have been shown to be net sinks regarding CO2
    emissions (National Academy of Sciences, 2010).
        We recommend restoring funding for the fuels program to a level of
    $20 million for coal conversion research using feedstocks such as coal
    and biomass for the production of liquid transportation fuels,
    chemicals, and synthetic natural gas. Funding should be directed toward
    simulation modeling and pilot plant testing on eastern, mid-content,
    and western coals, biomass characterization and feeding, and
    transformational research to reduce the energy penalty costs of
    conversion processes and plant capital costs, which are currently a
    deterrent to building a coal fuels and chemicals industry.

                               FUEL CELLS PROGRAM

        Solid oxide fuel cells (SOFC) operating on coal-based syngas can
    form a key component of the administration's goal of having 80 percent
    of our Nation's electricity generated by clean-energy technologies.
    SOFC technology can be deployed in both central station and distributed
    generation modes. A successful collaboration of government and industry
    under the Solid State Energy Conversion Alliance (SECA) is reducing the
    cost of SOFC. The SECA fuel cell program is a critical element of
    fossil energy's technology portfolio. Integrated gasification fuel cell
    (IGFC) systems are highly efficient with near-zero atmospheric
    emissions of CO2 and air pollutants, and use minimal amounts
    of water compared to traditional pulverized coal power generation
    systems. We disagree with the administration's recommendation to defund
    the fuel cell program and recommend continuation at a level of $50
    million.

                            MODELING AND SIMULATION

        The emphasis on computational modeling in the DOE program is
    attractive for evaluating new concepts at scales ranging from molecular
    interactions through system simulations. Information gained from
    modeling will be useful in moving new concepts from scientific research
    discoveries into scalable component technologies, with added benefits
    of attendant time and cost savings afforded by performing numerous
    inexpensive computer experiments versus numerous costly laboratory
    experiments. However, experimental research is an integral part of
    modeling and simulation in that experimental data are essential for
    validating the predictions of model studies. Modeling is also useful in
    directing attention to targeted areas where further engineering
    research is needed to solve operational problems. With successful
    modeling, we can reduce development times for scaling up promising
    technologies by factors of 10-to-15, versus a more conservative scale-
    up program in which the size of the system is increased by factors of
    3-to-5, for example.
        Industrial research often discovers unanticipated mechanisms in
    pilot and commercial-scale field research on actual systems that are
    not/cannot be predicted from modeling alone or laboratory-scale
    research. It is essential that the DOE Coal Program continues to
    support pilot-scale and commercial-scale experimental and demonstration
    research to allay the valid concerns of technology developers who must
    invest billions of dollars to prove the cost and performance viability
    of new systems. Close collaboration between computer modelers and
    industrial developers is recommended to ensure the effective use of
    funding in both the modeling and experimental aspects of developing and
    deploying new technologies.

                          OIL AND NATURAL GAS PROGRAMS

        We recommend restoration of the Oil and Natural Gas Programs in the
    Office of Fossil Energy at a funding level of $80 million for fiscal
    year 2012. We further recommend maintaining the program on offshore and
    unconventional onshore oil and natural gas research funded under
    section 999 of the EPAct.
        Shale Research.--National Energy Technology Laboratory (NETL)-
    developed technologies for directional drilling and hydraulic
    fracturing of formations can be applied to produce the plentiful
    natural gas reserves of the Marcellus and similar shale formations.
    Much work remains to be done, however, to validate estimates of how
    much gas can be recovered, to develop the geological sciences needed to
    understand these underground reservoirs, to effectively treat produced
    water, to protect groundwater supplies, and to allay the concerns of
    residents affected by drilling and fracking operations. We recommend
    that $40 million be directed to shale gas research programs and to
    related technology transfer programs to provide information on
    environmentally safe drilling practices. The Utica shale formation is
    also a national resource for which little is known and research on this
    formation is also recommended. With the administration's focus on using
    natural gas for transportation fuels in addition to current markets for
    chemicals production and home applications, it is necessary to ensure
    adequate supplies of natural gas since existing wells will deplete at
    approximately the same rate that Marcellus shale production is
    increasing, according to Environmental Protection Agency projections.
        Oil Research.--Funding of $25 million is recommended for advanced
    oil research to support programs such as the large-scale storage of
    carbon dioxide in enhanced oil recovery applications, and the
    development of new resources such as the Baaken shale and similar
    formations that are now commercially viable, which is accredited to the
    new drilling technologies. Research should be directed toward pilot
    tests, noncore studies, and advanced research and development for next-
    generation technologies.
        Methane Hydrates Research.--The remaining $15 million in our
    recommendation should be directed toward continuation of the methane
    hydrates program within the Office of Fossil Energy. This resource is
    extensive and will provide a needed supplement to our natural gas
    resource base if it can be successfully developed.
        Section 999 Program.--DOE Secretary Chu recently met with the
    Federal Advisory Committee Act committee providing guidance to the
    section 999 Offshore and Unconventional research program funded by
    royalties from offshore production of oil and natural gas. He asked
    that the program direct some of its activities to ensuring the safety
    of offshore drilling operations to avoid events such as the Macondo
    well accident of the past year. The section 999 program also provides
    support for small operators by funding collaborative research with
    national universities and for technology transfer programs. The past
    and present administrations have recommended that this program be
    repealed. We request support of the subcommittee in not repealing this
    program, especially in view of the need for increased safety in
    offshore drilling operations.

                CORE FOSSIL ENERGY SCIENTIFIC RESEARCH PROGRAMS

        The United States needs a strong core program of scientific
    research in fossil fuels. We recommend maintaining the core Coal
    Research Program at $404 million annually in addition to supporting the
    oil and natural gas program at the $80 million level discussed above.
        Fossil fuels are mainstays of our national energy demand for the
    foreseeable future. Our economic prosperity and national security are
    linked through investment in scientific research. More than one-half of
    our economic growth since World War II can be traced to science-driven
    technological innovation. Today's investments in fossil energy research
    will lead to tomorrow's discoveries that will build a better America.
        NETL, as a fossil energy field laboratory, has a long history of
    support for external entities such as industry and universities. As a
    national laboratory, NETL must also increase its level of program
    support for onsite scientific research. Significant past
    accomplishments include the drilling technologies described above and
    materials developed to reduce criteria pollutants from coal-based power
    systems. Present activities include developing excellence as a
    computational modeling and simulation center and serving as a regional
    engine for economic development through programs with local
    universities to stimulate advanced research that leads to spin-off
    industries under programs such as the Regional University Alliance
    (RUA). Within the funds provided, NETL should be encouraged to continue
    these scientific research and economic development programs.
        Core research programs should be expanded through the designation
    of additional funding to include an enhanced focus on water-related
    issues. Ground water contamination from Marcellus shale production can
    be addressed under the Oil and Natural Gas Programs described above.
    Additional funding should be identified to address a broader array of
    water issues associated with energy production. Powerplants need to
    reduce the amount of water both used and consumed in their operations.
    These needs are especially acute in areas of water shortages, such as
    the arid Western States. Production of fuels and chemicals will require
    additional water supplies. Coal conversion plants in China are
    producing liquid transportation fuels at a ratio of three barrels of
    water per barrel of fuel, a level we can attain in the United States
    through the investment of core research funds.

                                ENERGY SECURITY

        Fossil energy contributes approximately 70 percent of the
    electricity to the national grid. We recommend the programs in the
    Office of Electricity Delivery and Energy Reliability (OE) include
    components addressing the role of fossil energy in maintaining energy
    supply. Analytical tools should be developed to monitor energy supply
    and reduce risks from upsets in the fuel supply chain and energy
    production infrastructure. The role of the Office of Fossil Energy in
    the Future Smart Grid should be integrated into planning and analysis
    activities. Programs currently at NETL in areas such as energy
    efficiency of appliances can be used as a base to develop the next
    generation of ``smart grid ready'' appliances. We recommend an
    enhancement of the Office of Fossil Energy's role in energy security
    areas, given its expertise in these areas.

                                  RARE EARTHS

        Advanced materials will increasingly rely on rare earth elements.
    The Office of Fossil Energy has a long history of extraction expertise,
    tracing back from its origins as a part of the U.S. Bureau of Mines,
    and its work in coal cleaning and advanced separations technology that
    can be applied to helping ensure a supply of rare earth minerals
    through improved recovery and processing technologies. We recommend
    that the DOE engage the Office of Fossil Energy in programs to maintain
    our supply of rare earth elements.
                                     ______

        Prepared Statement of Wilkes University, College of Science and
                                  Engineering

        I am writing to provide support and a recommendation for the
    Subcommittee on Energy and Water Development to fund a Department of
    Energy (DOE) research program on Potential Impacts of Hydraulic
    Fracturing and Shale Gas Development on Drinking Water Resources and
    Environmental Systems (e.g., streams and rivers). I am an aquatic
    ecologist and Dean of the College of Science and Engineering at Wilkes
    University (Wilkes-Barre, Pennsylvania). In the interest of
    transparency, I also need to point out that I am a principal
    investigator on a 1-year water quality research project with DOE
    National Energy Technology Laboratory (NETL), Morgantown, West
    Virginia, at will be addressing short-term (1 year) concerns regarding
    surface water quality, watersheds, and aquatic ecology relative to
    selected sites and Marcellus gas development in northeastern and
    northcentral Pennsylvania; our project will also provide information
    based on the best science to the people in the region.
        It should be noted that I am not opposed to shale gas development
    in Pennsylvania (or elsewhere), but do believe this development needs
    to proceed with the necessary protection of public health and
    environmental safeguards for natural resources that are important to
    the State economy and quality of life (hunting, fishing, boating and
    canoeing, recreational use of natural areas, tourism, etc.). These
    safeguards of environment and public health must be based on good
    science (i.e., research that is sorely needed at present),
    comprehensive scientific data relative to regionally unique geology,
    ecology, and hydrology, and best engineering and industrial operations
    and practices by the energy companies.
        It has been my impression over the past year as a participant in
    various meetings, conferences, coordination with DOE, and exchanges
    with energy representatives that some of the leaders in energy
    development (e.g., Range Resources and Chesapeake Energy) are trying to
    implement best operational and engineering practices. Nevertheless, an
    independent research program by Federal agencies such as DOE is
    necessary for evaluating the outcome and appropriateness of these
    practices. Energy companies, concerned with community issues of safe
    drinking water and protection of aquatic resources, may be operating
    with good intentions, but there is no comprehensive research effort by
    a Federal agency to test and evaluate proposed best industrial
    practices (e.g., centralizing water reuse facilities, testing private
    drinking water wells beyond current regulations, providing equipment
    for environmental monitoring of water quality) on their actual
    effectiveness to protect human and environmental health. In short,
    there is little to no impartial, science-based validation of proposed
    best practices before they are widely implemented.
        I wish to make the following points in my testimony:
      --the important role that DOE must play in such a research program;
      --the need for new research on shale gas development due to the
            unique geology and hydrology of the Appalachian region (i.e.,
            methods developed for Texas and Alaska do not necessarily apply
            in Pennsylvania or New York);
      --relationship of DOE research to Environmental Protection Agency's
            (EPA) research plan on hydraulic fracturing and drinking water
            alone; and
      --the benefits of a broad-based research program to gain public
            acceptance, avoid lawsuits and extreme costs of clean-up, and
            avoid wide-scale public rejection.
    role and relevance of a department of energy research program for shale

                                GAS DEVELOPMENT

        The DOE National Laboratory System (including NETL) is ideally
    suited to address issues of public health and environmental integrity
    of natural resources from a holistic perspective. DOE is the primary
    Federal agency conducting research on technology to support commercial
    development of energy resources and is charged with promoting the
    energy security needs of our country. Almost all of the DOE national
    labs have a unique capability for environmental research. Before coming
    to Wilkes University in 1991, I spent 7 years as an environmental
    research scientist at DOE's Idaho National Engineering Laboratory (with
    EG&G Idaho, the prime contractor) and over a 2-year period, I was a
    research data facilitator for seven national labs from coast to coast.
    I am familiar with this research mission of the DOE national labs and
    know that its current research budget for the environmental aspects and
    potential impacts from shale gas development is very limited. The
    advantage that DOE has is its interdisciplinary approach to energy
    research, cost effectively matching technology with best engineering
    practice, to best protect human health and environmental integrity.

             UNIQUE GEOLOGY AND HYDROLOGY OF THE APPALACHIAN REGION

        Hydraulic fracturing for shale gas is not a new technology and it
    has been used in other regions of the United States. However, the
    geology and hydrology of the Appalachian region of the Marcellus Play
    differs considerably from these other regions (e.g., Texas, Oklahoma,
    and Alaska) where hydrofracing has been implemented with considerably
    less public concern about human health and the environment. Based on
    the experience of Wilkes University faculty geologists and hydrologists
    in northeastern Pennsylvania, our region is extremely variable and
    complex in its geology and groundwater hydrology. There are localized
    faults and fractures in various geologic and hydrologic structures that
    can affect quality of water supply even without the disruptive effects
    of drilling. In addition, Pennsylvania has one of the highest rural
    populations in the United States and many people rely on private
    drinking water wells. Furthermore, there are no State standards for
    casing and most private wells in Pennsylvania do not have casing, or at
    best have inadequate casing. Only good data, designed to ask the
    appropriate research questions, will avoid the ensuing problems of this
    unusual but critical set of circumstances:
      --local and regional faults and fractures in various geologic strata;
      --complex geology and hydrology;
      --high rural populations; and
      --lack of standards on well casings.
        Without an organized Federal research program in this regard, the
    public outcry and resistance will only increase. Clean-up costs where
    obvious accidents may occur could be enormous. An ounce of prevention
    (good research and data on the effectiveness of best practices) is
    worth a pound of cure.

          RELATIONSHIP OF THE DEPARTMENT OF ENERGY'S RESEARCH TO THE
                ENVIRONMENTAL PROTECTION AGENCY'S RESEARCH PLAN

        At this time, it appears that the Congress has provided some modest
    research funds for EPA's Draft Hydraulic Fracturing Study Plan that was
    posted for peer review by its (http://water.epa.gov/type/groundwater/
    uic/class2/hydraulicfracturing/index.cfm) Science Advisory Board on
    February 8, 2011. While this plan is a good start, it is inadequately
    funded for research and monitoring over the necessary longer time
    period of gas development, and it is focused totally on drinking water.
    Also, EPA is a regulatory agency, and its research will take that
    direction. In contrast, if funding is available (i.e., via this
    Subcommittee on Energy and Water Development) to DOE, then this
    agency's unique interdisciplinary mix of technological research with
    outstanding research expertise in environmental and ecological systems
    would complement EPA's expertise and regulatory focus. In short, DOE is
    well-positioned to support both technological advances and improvements
    to gas development and to assess its performance and outcome for
    effectiveness with research on critical environmental and ecological
    endpoints.

             BENEFITS OF A SHALE GAS RESEARCH PROGRAM TO THE PUBLIC

        Recent articles in the New York Times and the Philadelphia Enquirer
    highlight the growing distrust of the public regarding public health
    and protection of natural resources--for example see: (http://
    www.nytimes.com/2011/02/27/us/27gas.html?_r=1&ref=us) and (http://
    www.philly.com/philly/news/20110403_Shale-
    gas_regulation_near_river_divides_Pa_.html?viewAll=y&c=y),
    respectively. In some cases, public reaction amounts to fear of the
    unknown; in other cases, significant environmental or public health
    concerns are real and valid. Nevertheless, the concern by the public
    (and the scientific community) can only be addressed by an adequate
    research program aimed at an integrated approach to groundwater
    concerns (including drinking water wells), and the ecological health of
    streams and rivers, and natural areas (e.g., issues with forest and
    wildlife habitat fragmentation). The DOE national laboratory system is
    well suited to take on this challenge in an effective fashion and work
    with other Federal agencies in a collaborative fashion.

                                 RECOMMENDATION

        For these reasons, I strongly recommend that the Subcommittee on
    Energy and Water Development fund critically needed DOE research to
    help ensure public health and to safeguard environmental and ecological
    resources. A minimum DOE research budget of $10 million a year for at
    least 5 years is recommended. Thank you for considering my testimony.

                           DEPARTMENT OF THE INTERIOR

                             Bureau of Reclamation

             Prepared Statement of the APS Four Corners Power Plant

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah, and Wyoming, Indian
    tribes, Federal agencies and water, power, and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

                       Prepared Statement of Aurora Water

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah and Wyoming, Indian
    tribes, Federal agencies and water, power and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

               Prepared Statement of the BHP Navajo Coal Company

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah, and Wyoming, Indian
    tribes, Federal agencies and water, power and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    the BOR's continuing financial participation in these vitally important
    programs.
                                     ______

       Prepared Statement of the Central Utah Water Conservancy District

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah, and Wyoming, Indian
    tribes, Federal agencies and water, power, and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

                  Prepared Statement of the City of Farmington

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah, and Wyoming, Indian
    tribes, Federal agencies and water, power, and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

     Prepared Statement of the Colorado River Basin Salinity Control Forum

        This testimony is in support of funding for the title II Colorado
    River Basin Salinity Control Program. The Congress has designated the
    Department of the Interior, Bureau of Reclamation (BOR), to be the lead
    agency for salinity control in the Colorado River Basin. This role and
    the authorized program were refined and confirmed by the Congress when
    Public Law 104-20 was enacted. A total of $17,500,000 is requested for
    fiscal year 2012 to implement the needed and authorized program.
    Failure to appropriate these funds will result in significant economic
    damage in the United States and Mexico.
        In recent years, the President's requests have dropped to below $10
    million. The Colorado River Basin Salinity Control Forum (Forum) finds
    this unacceptable. BOR has requests for funding of many very cost-
    effective proposals through its Basinwide Program that far exceed this
    funding level. In the judgment of the Forum, this amount is
    inappropriately low. Water quality commitments to downstream United
    States and Mexican water users must be honored while the Basin States
    continue to develop their Colorado River Compact-apportioned waters.
    Concentrations of salts in the river cause about $353 million in
    quantified damage in the United States with significantly greater
    unquantified damages. Damages occur from:
      --A reduction in the yield of salt-sensitive crops and increased
            water use for leaching in the agricultural sector;
      --A reduction in the useful life of galvanized water pipe systems,
            water heaters, faucets, garbage disposals, clothes washers, and
            dishwashers, and increased use of bottled water and water
            softeners in the household sector;
      --An increase in the use of water for cooling, and the cost of water
            softening, and a decrease in equipment service life in the
            commercial sector;
      --An increase in the use of water and the cost of water treatment,
            and an increase in sewer fees in the industrial sector;
      --A decrease in the life of treatment facilities and pipelines in the
            utility sector;
      --Difficulty in meeting wastewater discharge requirements to comply
            with National Pollutant Discharge Elimination System permit
            terms and conditions, and an increase in desalination and brine
            disposal costs due to accumulation of salts in groundwater
            basins; and
      --Increased use of imported water for leaching and the cost of
            desalination and brine disposal for recycled water.
        The Forum, therefore, believes implementation of the program needs
    to be accelerated to a level beyond that requested by the President in
    the past.
        The program authorized by the Congress in 1995 has proven to be
    very successful and very cost effective. Proposals from the public and
    private sector to implement salinity control strategies have far
    exceeded the available funding and BOR has a backlog of proposals. BOR
    continues to select the best and most cost-effective proposals. Funds
    are available for the Colorado River Basin States' cost sharing for the
    level of Federal funding requested by the Forum. Water quality
    improvements accomplished under title II of the Colorado River Basin
    Salinity Control Act also benefit the quality of water delivered to
    Mexico. Although the United States has always met the commitments of
    the International Boundary and Water Commission's (Commission) Minute
    No. 242 to Mexico with respect to water quality, the United States
    section of the Commission is currently addressing Mexico's request for
    better water quality at the International Boundary.
        Some of the most cost-effective salinity control opportunities
    occur when BOR can improve irrigation delivery systems at the same time
    that the U.S. Department of Agriculture's (USDA) program is working
    with landowners (irrigators) to improve the on-farm irrigation systems.
    Through the USDA Environmental Quality Incentives Program, adequate on-
    farm funds appear to be available and adequate BOR funds are needed to
    maximize the effectiveness of the effort. These salinity control
    efforts have secondary water conservation benefits at the point of use
    and downstream at other points of use.

                                    OVERVIEW

        In 2000, the Congress reviewed the program as authorized in 1995.
    Following hearings, and with administration support, the Congress
    passed legislation that increased the ceiling authorized for this
    program by $100 million. BOR has received cost-effective proposals to
    move the program ahead and the Basin States have funds available to
    cost-share up-front.
        The Colorado River Basin Salinity Control Program was originally
    authorized by the Congress in 1974. The title I portion of the Colorado
    River Basin Salinity Control Act responded to commitments that the
    United States made, through Minute No. 242, to Mexico concerning the
    quality of water being delivered to Mexico below Imperial Dam. Title II
    of the act established a program to respond to salinity control needs
    of Colorado River water users in the United States and to comply with
    the mandates of the then newly legislated Clean Water Act. Initially,
    the Secretary of the Interior and BOR were given the lead Federal role
    by the Congress. This testimony is in support of adequate funding for
    the title II program.
        After a decade of investigative and implementation efforts, the
    Basin States concluded that the Salinity Control Act needed to be
    amended. The Congress revised the act in 1984. That revision, while
    leaving implementation of the salinity control policy with the
    Secretary of the Interior, also gave new salinity control
    responsibilities to the USDA and to the Bureau of Land Management
    (BLM). The Congress has charged the administration with implementing
    the most cost-effective program practicable (measured in dollars per
    ton of salt removed). The Basin States are strongly supportive of that
    concept as the Basin States cost share 30 percent of Federal
    expenditures up-front for the salinity control program, in addition to
    proceeding to implement salinity control activities for which they are
    responsible in the Colorado River Basin.
        The Forum is composed of gubernatorial appointees from Arizona,
    California, Colorado, Nevada, New Mexico, Utah, and Wyoming. The Forum
    has become the seven-state coordinating body for interfacing with
    Federal agencies and the Congress to support the implementation of the
    program necessary to control the salinity of the river system. In close
    cooperation with the Environmental Protection Agency (EPA) and pursuant
    to requirements of the Clean Water Act, every 3 years the Forum
    prepares a formal report analyzing the salinity of the Colorado River,
    anticipated future salinity, and the program elements necessary to keep
    the salinities at or below the concentrations in the river system in
    1972 at Imperial Dam, and below Parker and Hoover Dams.
        In setting water quality standards for the Colorado River system,
    the salinity concentrations at these three locations have been
    identified as the numeric criteria. The plan necessary for controlling
    salinity and reducing downstream damages has been captioned the ``Plan
    of Implementation.'' The 2008 Review of water quality standards
    includes an updated Plan of Implementation. The level of appropriation
    requested in this testimony is in keeping with the agreed-upon plan. If
    adequate funds are not appropriated, significant damages from the
    higher salt concentrations in the water will be more widespread in the
    United States and Mexico.

                                 JUSTIFICATION

        The $17,500,000 requested by the Forum on behalf of the seven
    Colorado River Basin States is the level of funding necessary to
    proceed with BOR's portion of the Plan of Implementation. In July 1995,
    the Congress amended the Colorado River Basin Salinity Control Act. The
    amended act gives BOR new latitude and flexibility in seeking the most
    cost-effective salinity control opportunities, and it provides for
    utilization of proposals from project proponents, as well as more
    involvement from the private as well as the public sector. The result
    is that salt loading is being prevented at costs often less than one-
    half the cost under the previous program. The Congress recommitted its
    support for the revised program when it enacted Public Law 106-459. The
    Basin States' cost sharing up-front adds 43 cents for every Federal
    dollar appropriated. The federally chartered Colorado River Basin
    Salinity Control Advisory Council, created by the Congress in the
    Salinity Control Act, has met and formally supports the requested level
    of funding. The Basin States urge the Energy and Water Development
    Subcommittee to support the funding as set forth in this testimony.

                         ADDITIONAL SUPPORT OF FUNDING

        In addition to the funding identified above for the implementation
    of the most recently authorized program, the Forum urges the Congress
    to appropriate funds requested by the administration to continue to
    maintain and operate salinity control facilities as they are completed
    and placed into long-term operation. Reclamation has completed the
    Paradox Valley unit which involves the collection of brines in the
    Paradox Valley of Colorado and the injection of those brines into a
    deep aquifer through an injection well. However, the only means of
    disposing of the brine collected is this injection well. This well has
    a limited life expectancy. Funds are needed now to allow for planning
    of alternatives as the end of the life expectancy of this injection
    well is approached. The continued operation of this project and the
    Grand Valley Unit will be funded primarily through the Facility
    Operations activity.
        The Forum also supports funding to allow for continued general
    investigation of the Salinity Control Program as requested by the
    administration for the Colorado River Water Quality Improvement
    Program. It is important that Reclamation have planning staff in place,
    properly funded, so that the progress of the program can be analyzed,
    coordination between various Federal and State agencies can be
    accomplished, and future projects and opportunities to control salinity
    can be properly planned to maintain the water quality standards for
    salinity so that the Basin States can continue to develop their
    Colorado River Compact-apportioned waters.
                                     ______

               Prepared Statement of the Colorado River District

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah and Wyoming, Indian
    tribes, Federal agencies and water, power and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

               Prepared Statement of the Colorado Water Congress

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah and Wyoming, Indian
    tribes, Federal agencies and water, power, and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

                       Prepared Statement of Denver Water

        Dear Chairman Feinstein and Senator Alexander: On behalf of Denver
    Water, I am writing to request your support for continued funding in
    fiscal year 2012 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming, Indian tribes, Federal agencies and water,
    power, and environmental interests. I request your support for an
    appropriation for fiscal year 2012 of $6,248,000 to the Bureau of
    Reclamation (BOR) within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

          Prepared Statement of the Dolores Water Conservancy District

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah, and Wyoming, Indian
    tribes, Federal agencies and water, power, and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

         Prepared Statement of the Grand Valley Water Users Association

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah, and Wyoming, Indian
    tribes, Federal agencies and water, power, and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

               Prepared Statement of the Jicarilla Apache Nation

        Dear Chairman Feinstein and Senator Alexander: On behalf of the
    Jicarilla Apache Nation, I am writing to request your support for
    continued funding in fiscal year 2012 for the Upper Colorado River
    Endangered Fish Recovery Program and the San Juan River Basin Recovery
    Implementation Program as authorized by Public Law 106-392. These two
    successful ongoing cooperative partnership programs involve the States
    of Colorado, New Mexico, Utah and Wyoming, Indian tribes, Federal
    agencies and water, power and environmental interests. Jicarilla Apache
    Nation has been a participant in the San Juan River Basin Recovery
    Implementation Program since its inception in 1992, and I want to
    stress that the continuation of the Program is of the utmost importance
    to the Nation and the economic viability of the region. Therefore, I
    request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

    Prepared Statements of the Lower Brule Rural Water System; Oglala Sioux
      Rural Water Supply System; Rosebud Rural Water System; and the West
                      River/Lyman Jones Rural Water System

                            FISCAL YEAR 2012 REQUEST

        The Mni Wiconi Project beneficiaries respectfully request $26.238
    million in appropriations for construction and $11.754 million for
    operation and maintenance (OMR) activities for fiscal year 2012, a
    total request of $37.992 million:

                         FISCAL YEAR 2012 TOTAL REQUEST
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Construction............................................     $26,238,000
    OMR.....................................................      11,754,000
                                                             ---------------
          Total.............................................      37,992,000
    ------------------------------------------------------------------------

        The construction request includes $0.960 million for Bureau of
    Reclamation (BOR) oversight, and the operation, maintenance, and
    replacement (OMR) request includes $1.447 million for BOR oversight.

                               CONSTRUCTION FUNDS

        Construction funds would be utilized as follows:

    ------------------------------------------------------------------------
                                                       Construction request
                      Project area                       fiscal year 2012
    ------------------------------------------------------------------------
    Oglala Sioux Rural Water Supply System:
        Core.......................................                  ( \1\ )
        Distribution...............................              $10,848,000
    West River/Lyman-Jones Rural Water Supply......                5,475,000
    Rosebud Rural Water Supply.....................                9,915,000
                                                    ------------------------
          Total....................................               26,238,000
    ------------------------------------------------------------------------
    \1\ Complete.

        As shown in the table below, the project will be 89 percent
    complete at the end of fiscal year 2011. Construction funds remaining
    to be spent after fiscal year 2011 will total $49.568 million within
    the current authorization (in October 2010 dollars). Additional
    administrative and overhead costs of extending the project, additional
    construction costs, and inflation at 3.89 percent over the next 2 years
    will increase remaining project costs to $83.217 million after fiscal
    year 2011.

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Total Federal construction funding (October 2010            $464,669,000
     dollars)...............................................
                                                             ===============
    Estimated Federal construction funding spent through        $415,101,000
     fiscal year 2011.......................................
                                                             ===============
    Percent spent through fiscal year 2011..................           89.33
                                                             ===============
    Amount remaining after 2010:
        Total authorized (October 2010 dollars).............     $49,568,000
        Adjusted for extension to fiscal year 2013 and other     $78,607,000
         costs..............................................
        Adjusted for annual inflation.......................     $83,217,000
    Completion fiscal year (Statutory fiscal year 2013;                 2013
     Public Law 110-161)....................................
    Years to complete.......................................               2
    Average annual required for fiscal year 2013 finish with     $41,609,000
     re-authorization.......................................
    Average annual required for fiscal year 2013 finish          $26,238,000
     without re-authorization...............................
    ------------------------------------------------------------------------

        Cost indexing over the last 5 years has averaged 3.89 percent for
    pipelines, primarily due to a 7.7-percent reduction in 2009 during
    recession. The increase in pipeline costs last year was 6.17 percent.
    Pipelines are the principal components yet to be completed (see chart
    below). Assuming average 3.89-percent inflation in construction costs
    over the remaining 2 years, average funding of $26.238 million is
    required to complete the project within the existing authorization, and
    $41.609 million is required to complete the project if re-authorized to
    finish the project as planned.

        The extension of the project from 2008 to 2013 did not provide for
    budgeting of BOR oversight, administration and other ``overhead''
    costs, which will total $27.157 million by the end of 2013. These costs
    have been and will be incurred at the expense of construction elements,
    and a $29.039 million re-authorization of the construction ceiling is
    needed to recover those overhead costs, due primarily to the slow pace
    of budgeting by the administration. The administration's budget for
    construction for fiscal year 2012 is $16 million, far less than the
    $26.238 million needed, and threatens to extend the project beyond 2013
    with continued increases in overhead costs and depletion of funds that
    would otherwise be applied to finishing construction.
        The request will create an estimated 210 full-time equivalent (FTE)
    construction jobs and 94 OMR jobs in an area of the Nation with the
    lowest per capita income and deepest poverty.
        Poverty is the harbinger of the severe healthcare crisis facing the
    Indian people in the Northern Great Plains. The present value of extra
    costs of healthcare during the lifetime of each 24,000 members of the
    Indian population in the Mni Wiconi Project is estimated at $1.12 to
    $2.25 billion (in 2010 dollars). The costs are based on extraordinarily
    high rates of mortality due to heart disease, cancer and diabetes. The
    Mni Wiconi Project has the direct effect of employing part of our
    unemployed and underemployed Indian population and creates the
    necessary infrastructure for more employment in indirect commercial and
    industrial development. This will reduce poverty, mortality and the
    national cost burden of Indian healthcare.

                     OGLALA SIOUX RURAL WATER SUPPLY SYSTEM

    Core System
        The Oglala Sioux Tribe has completed the core system. The
    completion of the Oglala Sioux Rural Water Supply System (OSRWSS) core
    system was an historic milestone and permits greater focus in remaining
    years of the project on completion of the distribution systems.

    Distribution System
        The Pine Ridge Indian Reservation will receive significantly more
    water from the OSRWSS core system in fiscal year 2011. Major segments
    of the main transmission system will be completed across the
    Reservation and connect many of the larger communities with safe and
    adequate drinking water. OSRWSS pipelines now deliver water from the
    Missouri River to the communities of Georgetown, Wanblee, Crazy Horse
    School, Lakota Fund Housing and Potato Creek Community and the large
    number of rural homes between the communities. The communities of
    Hisle, Kyle, Manderson, Red Shirt, Porcupine and Wounded Knee can be
    served with Missouri River water by the end of 2011.
        Fiscal year 2012 will be another historic year, but considerable
    work remains to distribute the water supply throughout the reservation.
    More than 40 percent of the project's population resides on the Pine
    Ridge Indian Reservation, and only 78 percent of the distribution
    system will be complete at the end of 2011. The reservation public
    received its first Missouri River supply in 2009 after waiting 15 years
    for construction of core facilities to the Reservation.
        Project funds in fiscal year 2012 will continue building the on-
    reservation transmission system. Funding will be used for transmission
    and service line development east of Pine Ridge Village between
    Wakpamni, Batesland, and Allen and south toward the Nebraska State
    line. This area has been deferred in the past due to funding
    constraints. The supervisory control and data acquisition (SCADA)
    facilities will be installed with state-of-the-art electronic
    equipment.
        As set forth above, activity on the Pine Ridge Indian Reservation
    in fiscal year 2012 continues to focus on constructing the transmission
    system that serves as the ``backbone'' of the Project on the
    Reservation from the White River in the northeast corner of the
    Reservation to Pine Ridge Village. The tribe will continue to focus on
    the disinfection requirements to blend Missouri River water and high-
    quality groundwater without creating harmful contaminants. State-of-
    the-art designs are being implemented for water quality control, and
    the Project will serve as a model for other projects requiring these
    facilities.
        The Oglala Sioux Tribe is supportive of the funding request of
    other sponsors.

                   WEST RIVER/LYMAN-JONES RURAL WATER SYSTEM

        West River/Lyman-Jones Rural Water System (WR/LJ RWS) projects for
    fiscal year 2012 include standby generation facilities, conversion of
    community water systems, storage reservoirs, SCADA, and cold storage
    additions.
        The upper Midwest and specifically the Mni Wiconi project area
    regularly experience power outages as the result of winter weather
    conditions. Regulatory authorities in South Dakota have recommended
    standby generation as the result of statewide power outages experienced
    during the winters of 2005-2006 and 2009-2010. BOR has concurred in the
    addition of standby generation to the Mni Wiconi plan of work. WR/LJ
    has outlined a 3-year standby generation project schedule.
        The WR/LJ project includes four areas in which area ranchers are
    served by a common well of limited capacity and unacceptable water
    quality. The construction of WR/LJ facilities to serve them as
    individual members of WR/LJ will provide the pipeline capacity and
    water quality meeting Mni Wiconi project design standards.
        Water storage needs include an elevated tower in the Reliance
    service area, a ground storage reservoir in Mellette County and
    supplemental storage in the Elbon service area.
        SCADA capability provides accurate and efficient transmission of
    data and allows remote control of pumping and storage facilities. The
    WR/LJ SCADA system will be completed using the requested funding.
        Storage facilities at the Murdo and Philip operations centers will
    complete the building components of the WR/LJ project.
        Previous Federal appropriations to the Mni Wiconi project have made
    possible the delivery of much needed quality water to members of the
    West River/Lyman-Jones RWS and to the livestock industry in the project
    area. This would not have been possible without State and Federal
    assistance.

               ROSEBUD SIOUX RURAL WATER SYSTEM--FISCAL YEAR 2012

        Funding for fiscal year 2012 will be used to complete two major
    projects begun in fiscal year 2011 and further work on the Rosebud
    Sioux Rural Water System (RSRWS or Sicangu Mni Wiconi) distribution
    system. In fiscal year 2011 work began on the water supply for the
    Rosebud Adult Correctional Facility (ACF). The ACF is a major project
    that will be constructed in 2011 and in operation in August 2012. The
    intent of locating the facility on Rosebud is that incarcerated
    individuals are closer to the family and culture and the recidivism
    rate will be lower and the local economy also benefits. The Mni Wiconi
    Project is responsible for delivering water to the ACF and providing
    adequate volumes to meet peak demands. An elevated storage tank appears
    to be the only feasible option available.
        The other major project initiated in fiscal year 2011 requiring
    fiscal year 2012 funds is the Sicangu Village Supply Project. Because
    of unexpected quality and quantity limitations of the aquifer in
    southern Todd County, high-quality surface water from OSRWSS will be
    conveyed by a transmission pipeline to a new elevated storage reservoir
    at Sicangu Village. The elevated reservoir is currently under contract
    and will be completed this summer. Sicangu Village is an expanding
    housing area and the local wells cannot meet demands of expansion. The
    transmission line and elevated reservoir will provide a reliable supply
    of high-quality water to the development corridor along Highway 83
    between Mission and Sicangu Village. It was hoped that this area of the
    Rosebud Reservation would not need to be connected to the Mni Wiconi
    Project because of the presence of the Ogallala aquifer. The estimated
    demands for the area were, however, included in system planning and it
    now appears this foresight was beneficial because portions of the
    aquifer have high nitrates and other areas are not as high yielding as
    originally thought.
        Distribution system projects will extend service to two schools in
    southern Todd County and meet domestic needs in other areas of the
    Primary Service Area (Todd and Mellette Counties). It was hoped to
    connect the Lakeview and Littleburg schools to the system in fiscal
    year 2011, but fiscal year 2011 funds are not sufficient. The wells
    that supply water to both of the schools have high nitrates. The Mni
    Wiconi Project will ensure that future generations on the Rosebud
    Reservation, both Indians and non-Indians alike, will be supplied with
    water that meets safe drinking water standards.
        The other distribution system expansion planned for 2012 is the
    completion of the East Todd Project. The initial phase of this project
    was completed by the Tribal Force Account Program in late 2009 and
    rights-of-way have now been obtained to undertake the remainder of the
    project. This project also serves an area where water quality has been
    declining due to elevated nitrate levels.
        The ongoing effort to connect rural homes to transmission and
    distribution lines will also continue in 2012. This work is undertaken
    through the Tribal Force Account Program. The Force Account Program not
    only provides a reliable source of high-quality water to rural homes,
    it also provides employment to numerous tribal members and helps
    circulate dollars on the reservation thereby stimulating the local
    economy.

                    OPERATION, MAINTENANCE, AND REPLACEMENT

        The Sponsors will continue to work with BOR to ensure that their
    budgets are adequate to properly operate, maintain, and replace
    respective portions of the core and distribution systems. The Sponsors
    will also continue to manage operation, maintenance, and replacement
    expenses to ensure that the limited funds can best be balanced between
    construction and OMR. Unfortunately the administration's budget for
    fiscal year 2012 ($10.058 million) is under-stated for the first time
    in the history of the project. The project needs $11.754 million. BOR's
    budget for 2012 will cause the project to fall into a state of
    disrepair and will threaten the considerable investment of the United
    States from 1994 to date.
        The project has been treating and delivering more water each year
    from the OSRWSS Water Treatment Plant near Fort Pierre as construction
    is advanced in the Rosebud, WRLJ and Oglala service areas. Completion
    of significant core and distribution pipelines has resulted in more
    deliveries to more communities and rural users. The need for sufficient
    funds to properly operate and maintain the functioning system
    throughout the project has grown as the project has now reached 89-
    percent completion. The OMR budget must be adequate to keep pace with
    the system that is placed in operation.
        The Lower Brule Rural Water System (LBRWS) is essentially complete
    with all major components such as the water treatment plant, booster
    stations, and tanks/reservoirs in full operation. As a result, LBRWS's
    operation and maintenance portion of the budget has reached a baseline
    amount to which only slight adjustments along with inflation should be
    made each year. The portion of the LBRWS OM&R budget that is somewhat
    variable is the Replacement Additions and Extraordinary (RAX)
    maintenance items. LBRWS will continue to work with BOR and the other
    sponsors to prioritize their needs and ensure that their system is
    operating to the standards that have been established over the past
    several years. With that in mind, the LBRWS request for OMR for fiscal
    year 2012 is $1,550,000.
        The RSRWS expanded significantly in 2010 and surface water now
    reaches Todd County. To accomplish this, two additional high-capacity
    pumping stations were added to the system. The new pumping stations
    increase operational costs for both energy, maintenance and personnel.
    In addition, energy costs increases have significantly impacted Rosebud
    for electrical costs and vehicle expenses. With the oldest parts of the
    system in service for 15 years replacement costs covered under RAX are
    also becoming more significant. RAX funds must be included in the Mni
    Wiconi Project appropriations because they are not funded through BOR's
    RAX program.
        OSRWSS will incur unanticipated core OMR expenses in fiscal year
    2012 to replace valves, remove sludge at the water treatment plant and
    supplement American Recovery and Reinvestment Act (ARRA) funds for
    chlorine booster stations and generators/transfer switches. The
    unanticipated costs are $661,000, which will improve facilities that
    benefit all project sponsors.
        The Mni Wiconi Project tribal beneficiaries (as listed below)
    respectfully request appropriations for OMR in fiscal year 2012 in the
    amount of $11.754 million.

                              FISCAL YEAR 2011 OMR
    ------------------------------------------------------------------------
                          Project area                            Request
    ------------------------------------------------------------------------
    Oglala Sioux Rural Water Supply System:
        Core................................................      $3,380,000
        Distribution........................................       3,100,000
    Lower Brule.............................................       1,550,000
    Rosebud RWS.............................................       2,277,000
    Reclamation.............................................       1,447,000
                                                             ---------------
          Total.............................................      11,754,000
    ------------------------------------------------------------------------

                              TRUST RESPONSIBILITY

        Public Law 100-516, the Mni Wiconi Project Act, provides that:

        ``. . . United States has a trust responsibility to ensure that
    adequate and safe water supplies are available to meet the economic,
    environmental, water supply, and public health needs of the . . .
    Indian Reservation[s] . . .''

        The field staff and the Regional Office of BOR have been extremely
    helpful in advancing this project, but there has been concern that BOR
    mid-managers and Office of Management and Budget (OMB) are making
    unilateral decisions that harm the trust relationship. The following
    are specific instances:
      --BOR has re-distributed funds allocated to the Oglala Sioux Tribe to
            West River/Lyman Jones without the urging of West River/Lyman
            Jones to further BOR performance objectives. While OSRWSS has
            consistently carried funds over from one fiscal year to
            another, there has never been an instance or a threat of an
            instance of not spending funding appropriated in a given year
            in that year or the year that follows. The rate of completion
            of the OSRWSS project is decelerated and the rate of other
            projects has been accelerated without the urging of recipients
            of re-distributed funding;
      --To our complete satisfaction on construction, BOR has yielded to
            the leadership of the Indian and non-Indian sponsors to permit
            their collaborative development of annual construction funding
            allocations and budgets. On the other hand, BOR has imposed its
            structure and budget specifics in lieu of Indian leadership on
            the formulation of annual OMR allocations and budgets;
      --OMB has budgeted funds to BOR for its Rural Water Program without
            separation of construction and OMR accounts, and the
            constraints on the total budget have fallen heavily on the
            funds available to complete construction. OMR budgeting has
            been held relatively constant with higher percentages of
            construction completion, and construction budgeting has
            decreased. The fixed level of OMR funding has constrained the
            activities needed on the Indian distribution systems. The
            construction budget is diminishing at a time when acceleration
            of construction is needed to deliver the benefits of the
            project to the Indian people. At a minimum, the construction
            budget should be a priority and should be held at a level
            needed to complete the project on the statutory schedule in
            2013 while providing an adequate OMR budget;
      --Mid-levels managers have often view the project as a BOR project,
            rather than as an Indian project as provided by Public Law 100-
            516, and their vision is affected.
        Improvement of the relationship and performance has been observed
    over the last year as BOR has responded to this concern.
                                     ______

       Prepared Statement of Matthew H. Mead, Governor, State of Wyoming

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support and assistance in insuring continued funding for
    the Upper Colorado River Endangered Fish Recovery Program and the San
    Juan River Basin Recovery Implementation Program. These two successful
    ongoing cooperative partnership programs involve the States of
    Colorado, New Mexico, Utah and Wyoming, Indian tribes, Federal agencies
    and water, power and environmental interests. Wyoming joins the other
    participating States and non-Federal partners in requesting your
    support for an appropriation for fiscal year 2012 of $6,248,000 to the
    Bureau of Reclamation (BOR) within the budget line item entitled
    ``Endangered Species Recovery Implementation Program'' for the Upper
    Colorado Region. Recognizing the need for fiscal responsibility, I must
    also point out, with respect to the fish recovery programs, that it
    will cost the program participants including, Wyoming, much more in
    terms of Endangered Species Act (ESA) costs if these programs do not
    continue.
        The Upper Colorado and San Juan recovery programs are national
    models of collaborative conservation partnerships working to recover
    endangered species while meeting water use and water development
    demands in compliance with the Federal ESA, State law, and interstate
    compacts in the Intermountain West.
        Since 1988, the two programs, collectively, have provided ESA
    section 7 compliance (without litigation) for more than 2,160 Federal,
    tribal, State, and privately managed water projects depleting more than
    3.7 million acre-feet of water per year. The Department of the Interior
    recognized these programs with its nation-wide Cooperative Conservation
    Award in April 2008 as outstanding collaborative partnerships
    accomplishing substantial on-the-ground conservation results.
    Substantial non-Federal cost-sharing funding exceeding 50 percent is
    occurring pursuant to their authorization in Public Law 106-392, as
    amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. On behalf of the citizens of Wyoming, I thank you for that
    support and request the subcommittee's assistance for fiscal year 2012
    funding to ensure BOR's continuing financial participation in these
    vitally important programs.
                                     ______

         Statement of the New Mexico State Engineer and the New Mexico
                          Interstate Stream Commission

                                    SUMMARY

        This statement is submitted in support of fiscal year 2012
    appropriations for the Colorado River Basin Salinity Control Program of
    the Department of the Interior's Bureau of Reclamation (BOR). The
    Congress designated BOR to be the lead agency for salinity control in
    the Colorado River Basin by the Colorado River Basin Salinity Control
    Act of 1974, and reconfirmed BOR's role by passage of Public Law 104-
    20. A total of $17,500,000 is requested for fiscal year 2012 to
    implement the authorized salinity control program of BOR. Recent years
    have followed a trend of inadequate funding for the needs of the
    program. An appropriation of $17,500,000 for BOR's salinity control
    program is necessary to restore the program to the level needed to
    protect water quality standards for salinity and to prevent unnecessary
    levels of economic damage from increased salinity in water delivered to
    the Lower Basin States of the Colorado River. In addition, funding for
    operation and maintenance of existing projects and sufficient general
    investigation funding is required to identify new salinity control
    opportunities.

                                   STATEMENT

        The water quality standards for salinity of the Colorado River must
    be protected while the Basin States continue to develop their compact
    apportioned waters of the river. The salinity standards for the
    Colorado River have been adopted by the seven Basin States and approved
    by the Environmental Protection Agency. While currently the standards
    have not been exceeded, salinity-control projects must be brought on-
    line in a timely and cost-effective manner to prevent future effects
    that could result in unnecessary damages from higher levels of salinity
    in the water delivered to the Lower Basin States of the Colorado River.
        The Colorado River Basin Salinity Control Act was authorized by the
    Congress and signed into law in 1974. The seven Colorado River Basin
    States, in response to the Clean Water Act of 1972, formed the Colorado
    River Basin Salinity Control Forum (Forum), a body comprised of
    gubernatorial representatives from the seven States. The Forum was
    created to provide for interstate cooperation in response to the Clean
    Water Act and to provide the States with information necessary to
    comply with sections 303(a) and (b) of the act. The Forum has become
    the primary means for the Basin States to coordinate with Federal
    agencies and the Congress to support the implementation of the salinity
    control program for the Colorado River Basin.
        BOR studies show that quantified damages from the Colorado River to
    United States water users are about $353 million per year. Unquantified
    damages are significantly greater. Damages are estimated at $75 million
    per year for every additional increase of 30 milligrams per liter in
    salinity of the Colorado River. Control of salinity is necessary for
    the States of the Colorado River Basin, including New Mexico, to
    continue to develop their compact-apportioned waters of the Colorado
    River.
        Timely appropriations for the funding of the salinity control
    program are essential to comply with the water quality standards for
    salinity, prevent unnecessary economic damages in the United States,
    and protect the quality of the water that the United States is
    obligated to deliver to Mexico. The Basin States and Federal agencies
    agree that increases in the salinity of the Colorado River will result
    in significant increases in damages to water users in the Lower
    Colorado River Basin. Although the United States has always met the
    water quality standard for salinity of water delivered to Mexico under
    Minute No. 242 of the International Boundary and Water Commission
    (IBWC), the United States through the United States section of IBWC is
    currently addressing a request by Mexico for better quality water.
    Continued strong support and adequate funding of the salinity control
    program is required to control salinity-related damages in the United
    States and Mexico.
        The Congress amended the Colorado River Basin Salinity Control Act
    in July 1995 (Public Law 104-20). The salinity control program
    authorized by the Congress by the amendment has proven to be very cost-
    effective, and the Basin States are standing ready with up-front cost-
    sharing. Proposals from public and private sector entities in response
    to BOR's requests for proposals and funding opportunity announcements
    have far exceeded available funding appropriated in recent years. Basin
    States cost-sharing funds are available for the $17.5 million
    appropriation request for fiscal year 2012. The Basin States' cost-
    sharing adds 43 cents for each Federal dollar appropriated.
        Public Law 106-459 gave BOR additional spending authority for the
    salinity control program. With the additional authority in place and
    significant cost-sharing available from the Basin States, it is
    essential that the salinity control program be funded at the level
    requested by the Forum and Basin States to protect the water quality of
    the Colorado River. Some of the most cost-effective salinity control
    opportunities occur when BOR improves irrigation delivery systems
    concurrently with on-farm irrigation improvements undertaken by the
    U.S. Department of Agriculture's Environmental Quality Incentives
    Program (EQIP). The Basin States cost-share funding is available for
    both on-farm and off-farm improvements. The EQIP funding appears to be
    adequate to accomplish the on-farm work. Adequate funding for BOR's
    off-farm work is needed to maintain timely implementation and
    effectiveness of salinity control measures.
        Maintenance and operation of BOR's salinity control projects and
    general investigations to identify new cost-effective salinity control
    projects are necessary for the continued success of the salinity
    control program. Investigation of new opportunities for salinity
    control is critical while the Basin States continue to develop and use
    their compact-apportioned waters of the Colorado River. The water-
    quality standards for salinity are dependent on timely implementation
    of salinity control projects, adequate funding to maintain and operate
    existing projects, and sufficient general investigation funding to
    determine new cost-effective opportunities for salinity control.
        Continued funding primarily through BOR's Facility Operations
    activity to support maintenance and operation of the Paradox Valley
    Unit and the Grand Valley Unit is critically needed. General
    Investigation funding through BOR's Colorado River Water Quality
    Improvement Program needs to be restored to a level that supports the
    need for identification and study of new salinity control opportunities
    to maintain the levels of salinity control needed to meet water quality
    standards and control economic damages in the Lower Colorado River
    Basin.
        I urge the Congress to appropriate $17.5 million to BOR for the
    Colorado River Basin Salinity Control Program, plus adequate funding
    for operation and maintenance of existing projects and adequate funding
    for general investigations to identify new salinity control
    opportunities. Also, I fully support testimony by the Forum's Executive
    Director, Don Barnett, in request of this appropriation, and the
    recommendation of an appropriation of the same amount by the federally
    chartered Colorado River Basin Salinity Control Advisory Council.
                                     ______

     Prepared Statement of the Northern Colorado Water Conservancy District

        Dear Chairman Feinstein and Senator Alexander: On behalf of the
    Boards of Directors of the Northern Colorado Water Conservancy District
    and Municipal Subdistrict, Northern Colorado Water Conservancy
    District, I am writing to request your support for continued funding in
    fiscal year 2012 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392.
        These two successful, ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah and Wyoming, Indian
    tribes, Federal agencies, and water, power and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region consistent with the President's
    recommended budget. Substantial non-Federal, cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts. The past support of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    thank you for the subcommittee's past support and request the
    subcommittee's assistance for fiscal year 2012 funding to ensure BOR's
    continuing financial participation in these vitally important programs.
                                     ______

           Prepared Statement of the Orchard Mesa Irrigation District

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah, and Wyoming, Indian
    tribes, Federal agencies and water, power, and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

                   Prepared Statement of PNM Resources, Inc.

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah, and Wyoming, Indian
    tribes, Federal agencies and water, power, and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

              Prepared Statement of the San Juan Water Commission

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah and Wyoming, Indian
    tribes, Federal agencies and water, power and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

              Prepared Statement of the Southern Ute Indian Tribe

        Dear Chairman Feinstein and Senator Alexander: On behalf of the
    Southern Ute Indian Tribe, I am writing to request your support for
    continued funding in fiscal year 2012 for the Upper Colorado River
    Endangered Fish Recovery Program and the San Juan River Basin Recovery
    Implementation Program as authorized by Public Law 106-392. These two
    successful ongoing cooperative partnership programs involve the States
    of Colorado, New Mexico, Utah and Wyoming, the Southern Ute Indian
    Tribe, the Ute Mountain Ute Indian Tribe, the Navajo Nation, the
    Jicarilla Apache Nation, Federal agencies and water, power, and
    environmental interests. The tribe requests your support for an
    appropriation for fiscal year 2012 of $6,248,000 to the Bureau of
    Reclamation (BOR) within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. The tribe thanks you for the subcommittee's past support and
    requests the subcommittee's assistance for fiscal year 2012 funding to
    ensure BOR's continuing financial participation in these vitally
    important programs.
                                     ______

       Prepared Statement of the Southwestern Water Conservation District

        Dear Chairman Feinstein and Senator Alexander: We are writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah and Wyoming, Indian
    tribes, Federal agencies and water, power, and environmental interests.
    We request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. Thank you for the subcommittee's past support and request the
    subcommittee's assistance for fiscal year 2012 funding to ensure BOR's
    continuing financial participation in these vitally important programs.
                                     ______

      Prepared Statement of the State of New Mexico, Office of the State
                               Engineer, Santa Fe

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support and assistance in insuring continued funding for
    the Upper Colorado River Endangered Fish Recovery Program and the San
    Juan River Basin Recovery Implementation Program. These two successful
    ongoing cooperative partnership programs involve the States of
    Colorado, New Mexico, Utah, and Wyoming, Indian tribes, Federal
    agencies and water, power, and environmental interests. The State of
    New Mexico requests your support for an appropriation in the
    President's recommended budget for fiscal year 2012 of $6,248,000 to
    the Bureau of Reclamation (BOR) within the budget line item entitled
    ``Endangered Species Recovery Implementation Program'' for the Upper
    Colorado Region.
        The Upper Colorado and San Juan recovery programs are national
    models of collaborative conservation partnerships working to recover
    endangered species while meeting water use and water development
    demands in compliance with the Federal Endangered Species Act (ESA),
    State law, and interstate compacts in the Intermountain West.
        Since 1988, the two programs, collectively, have provided ESA
    section 7 compliance (without litigation) for more than 2,160 Federal,
    tribal, State and privately managed water projects depleting more than
    3.7 million acre-feet of water per year. The Department of the Interior
    recognized these programs with its nationwide Cooperative Conservation
    Award in April 2008 as outstanding collaborative partnerships
    accomplishing substantial on-the-ground conservation results.
    Substantial non-Federal cost-sharing funding exceeding 50 percent is
    occurring pursuant to their authorization in Public Law 106-392, as
    amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. On behalf of the citizens of New Mexico, I thank you for that
    support and request the subcommittee's assistance for fiscal year 2012
    funding to ensure BOR's continuing financial participation in these
    vitally important programs.
                                     ______

                    Prepared Statement of The Navajo Nation

        Dear Chairman Feinstein and Senator Alexander: The Navajo Nation is
    an active participant in, and strong supporter of, the San Juan River
    Recovery Implementation Program. On behalf of the Navajo Nation, I am
    writing to request your support for continued funding in fiscal year
    2012 for the Upper Colorado River Endangered Fish Recovery Program and
    the San Juan River Basin Recovery Implementation Program as authorized
    by Public Law 106-392. These two successful ongoing cooperative
    partnership programs involve the States of Colorado, New Mexico, Utah,
    and Wyoming, Indian tribes, Federal agencies and water, power, and
    environmental interests. I request your support for an appropriation
    for fiscal year 2012 of $6,248,000 to the Bureau of Reclamation (BOR)
    within the budget line item entitled ``Endangered Species Recovery
    Implementation Program'' for the Upper Colorado Region, consistent with
    the President's recommended budget. Substantial non-Federal cost-
    sharing funding is occurring pursuant to Public Law 106-392, as
    amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. The Navajo Nation thanks the subcommittee for its past
    support and requests the subcommittee's assistance for fiscal year 2012
    funding to ensure BOR's continuing financial participation in these
    vitally important programs.
                                     ______

        Prepared Statement of the Tri-County Water Conservancy District

        Dear Chairman Feinstein and Senator Alexander: The Board of the
    Tri-County Water Conservancy District is writing to request your
    support for continued funding in fiscal year 2012 for the Upper
    Colorado River Endangered Fish Recovery Program and the San Juan River
    Basin Recovery Implementation Program as authorized by Public Law 106-
    392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah, and Wyoming, Indian
    tribes, Federal agencies and water, power, and environmental interests.
    We request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. We thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

       Prepared Statement of the Upper Gunnison River Water Conservancy
                                    District

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah and Wyoming, Indian
    tribes, Federal agencies and water, power, and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

             Prepared Statement of the Utah Water Users Association

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah and Wyoming, Indian
    tribes, Federal agencies and water, power and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to the Bureau of Reclamation (BOR) within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region, consistent with the President's
    recommended budget. Substantial non-Federal cost-sharing funding is
    occurring pursuant to Public Law 106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.
                                     ______

              Prepared Statement of the Wyoming Water Association

        Dear Chairman Feinstein and Senator Alexander: I am writing to
    request your support for continued funding in fiscal year 2012 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah and Wyoming, Indian
    tribes, Federal agencies and water, power, and environmental interests.
    I request your support for an appropriation for fiscal year 2012 of
    $6,248,000 to BOR within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multi-State, multi-agency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2012 funding to ensure
    BOR's continuing financial participation in these vitally important
    programs.

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page

    Alexander, Senator Lamar, U.S. Senator From Tenneessee:
        Opening Statement of.........................................
          126........................................................
        Questions Submitted by.....................................119, 188
        Statements of................................................ 3, 93
    Altira Group, LLC, Prepared Statement of the.....................
      224............................................................
    American:
        Association of Petroleum Geologists, Prepared Statement of
          the........................................................
          224........................................................
        Gas Association, Prepared Statement of the...................
          226........................................................
        Geological Institute, Prepared Statement of the..............
          229........................................................
        Public Power Association, Prepared Statement of the..........
          230........................................................
        Society:
            For Microbiology, Prepared Statement of the..............
              232....................................................
            Of:
                Agronomy, Prepared Statement of the..................
                  235................................................
                Plant Biologists, Prepared Statement of the..........
                  237................................................
        Wind Energy Association, Prepared Statement of the...........
          238........................................................
    Anadarko Petroleum Corporation, Prepared Statement of............
      241............................................................
    APS Four Corners Power Plant, Prepared Statement of the..........
      308............................................................
    Aurora Water, Prepared Statement of..............................
      308............................................................

    BHP Navajo Coal Company, Prepared Statement of the...............
      308............................................................
    Board of:........................................................
        Commissioners, Fifth Louisiana Levee District, Prepared
          Statement of the...........................................
          201........................................................
        Levee Commissioners for the Yazoo-Mississippi Delta, Prepared
          Statement of the...........................................
          202........................................................
        Mississippi Levee Commissioners, Prepared Statement of the...
          203........................................................
    Bob Lawrence & Associates, Inc., Prepared Statement of...........
      241............................................................
    Bryant, Dr. Steven, Prepared Statement of........................
      255............................................................

    Castle, Hon. Anne, Assistant Secretary for Water and Science,
      Bureau of Reclamation, Department of the Interior..............
      18.............................................................
        Prepared Statement of........................................
          19.........................................................
    Center for Advanced Separation Technologies, Prepared Statement
      of the.........................................................
      243............................................................
    Central Utah Water Conservancy District, Prepared Statement of
      the............................................................
      309............................................................
    Chu, Hon. Steven, Secretary, Office of the Secretary, Department
      of Energy......................................................
      125............................................................
        Prepared Statement of........................................
          130........................................................
        Summary Statement of.........................................
          128........................................................
    City of:
        Farmington, Prepared Statement of the........................
          309........................................................
        Morro Bay, California, Prepared Statement of the.............
          205........................................................
    Coal Utilization Research Council, Prepared Statement of the.....
      245............................................................
    Cochran, Senator Thad, U.S. Senator From Mississippi, Prepared
      Statement of...................................................
      4..............................................................
    Colorado:
        Oil & Gas Association, Prepared Statement of the.............
          248........................................................
        River:
            Basin Salinity Control Forum, Prepared Statement of the..
              309....................................................
            District, Prepared Statement of the......................
              311....................................................
        Water Congress, Prepared Statement of the....................
          312........................................................
    Connor, Hon. Michael L., Commissioner, Bureau of Reclamation,
      Department of the Interior.....................................
      25.............................................................
        Prepared Statement of........................................
          27.........................................................
        Questions Submitted to.......................................
          77.........................................................
    Cook, Dr. Donald, Deputy Administrator for Defense Programs,
      National Nuclear Security Administration, Department of Energy.
      91.............................................................
    Crop Science Society of America, Prepared Statement of the.......
      235............................................................
    Cummins Inc., Prepared Statement of..............................
      249............................................................

    D'Agostino, Hon. Thomas P., Under Secretary for Nuclear Security
      and Administration, National Nuclear Security Administration,
      Department of Energy...........................................
      91.............................................................
        Prepared Statement of........................................
          97.........................................................
        Summary Statement of.........................................
          95.........................................................
    Darcy, Hon. Jo-Ellen, Assistant Secretary of the Army (Civil
      Works), Corps of Engineers--Civil, Department of the Army,
      Department of Defense--Civil...................................
      1..............................................................
        Prepared Statement of........................................
          6..........................................................
        Questions Submitted to.......................................
          59.........................................................
        Summary Statement of.........................................
          5..........................................................
    Denver Water, Prepared Statement of..............................
      312............................................................
    Diesel Technology Forum, Prepared Statement of the...............
      251............................................................
    Dolores Water Conservancy District, Prepared Statement of the....
      312............................................................
    Donald, Admiral Kirkland, Deputy Administrator for Naval
      Reactors, National Nuclear Security Administration, Department
      of Energy......................................................
      91.............................................................

    Edison Electric Institute, Prepared Statement of the.............
      256............................................................
    Electric Drive Transportation Association, Prepared Statement of
      the............................................................
      258............................................................
    Energy:
        Committee of ASME's Technical Communities, Prepared Statement
          of the.....................................................
          259........................................................
        Efficiency Coalition, Prepared Statement of the..............
          261........................................................
    Environmental Council of the States, Prepared Statement of the...
      199............................................................
    EnviroScience, Inc., Prepared Statement of.......................
      206............................................................
    Executive Committee of the Fermi National Accelerator Laboratory
      Users Organization, Prepared Statement of the..................
      262............................................................

    Federation of American Societies for Experimental Biology,
      Prepared Statement of the......................................
      265............................................................
    Feinstein, Senator Dianne, U.S. Senator From California:
        Opening Statements of....................................1, 91, 125
        Questions Submitted by..................................65, 77, 112
    Fuel Cell and Hydrogen Energy Association, Prepared Statement of
      the............................................................
      266............................................................

    Gas:
        Technology Institute, Prepared Statement of the..............
          268........................................................
        Turbine Association, Prepared Statement of the...............
          271........................................................
    GE Energy, Prepared Statement of.................................
      273............................................................
    Graham, Senator Lindsey, U.S. Senator From South Carolina,
      Questions Submitted by.........................................
      192............................................................
    Grand Valley Water Users Association, Prepared Statement of the..
      313............................................................
    GSI Environmental Inc., Prepared Statement of....................
      276............................................................

    Harkin, Senator Tom, U.S. Senator From Iowa, Questions Submitted
      by.............................................................
      180............................................................
    Harrington, Anne, Deputy Administrator for Defense Nuclear
      Nonproliferation, National Nuclear Security Administration,
      Department of Energy...........................................
      91.............................................................
    Hill, Jr., Richard Newton, Former President/Owner of Hill
      Equipment Corp., Prepared Statement of.........................
      290............................................................

    Inouye, Senator Daniel K., U.S. Senator From Hawaii, Questions
      Submitted by...................................................
      196............................................................
    Izaak Walton League of America, Prepared Statement of the........
      207............................................................

    Jicarilla Apache Nation, Prepared Statement of the...............
      313............................................................
    Johnson, Senator Tim, U.S. Senator From South Dakota, Questions
      Submitted by..............................................75, 89, 178

    Landrieu, Senator Mary L., U.S. Senator From Louisiana, Questions
      Submitted by...................................................59, 75
    Lautenberg, Senator Frank R., U.S. Senator From New Jersey,
      Questions Submitted by.........................................
      180............................................................
    Little River Drainage District, Prepared Statement of the........
      218............................................................
    Lower Brule Rural Water System, Prepared Statement of the........
      213............................................................

    McConnell, Senator Mitch, U.S. Senator From Kentucky, Questions
      Submitted by.............................................62, 123, 192
    Mead, Matthew H., Governor, State of Wyoming, Prepared Statement
      of.............................................................
      318............................................................
    Mississippi Valley Flood Control Association, Prepared Statement
      of the.........................................................
      209............................................................
    Missouri River Association of States and Tribes, Prepared
      Statement of the...............................................
      212............................................................
    Moss Landing Harbor District, California, Prepared Statement of
      the............................................................
      215............................................................
    Murkowski, Senator Lisa, U.S. Senator From Alaska, Questions
      Submitted by...................................................
      63.............................................................
    Murray, Senator Patty, U.S. Senator From Washington, Questions
      Submitted by..............................................59, 89, 172
    Murray, Reed, Program Director, Central Utah Project Completion
      Act
      Office.........................................................
      18.............................................................

    National:
        Association:
            For State Community Services Programs, Prepared Statement
              of
              the....................................................
              278....................................................
            Of State Energy Officials, Prepared Statement of the.....
              280....................................................
        Hydropower Association, Prepared Statement of the............
          283........................................................
    Nature Conservancy, Prepared Statement of the....................
      219............................................................
    Navajo Nation, Prepared Statement of the.........................
      323............................................................
    New Mexico:
        Interstate Stream Commission, Prepared Statement of the......
          319........................................................
        Institute of Mining and Technology, Prepared Statement of the
          285........................................................
        State Engineer, Prepared Statement of the....................
          319........................................................
    Northern Colorado Water Conservancy District, Prepared Statement
      of the.........................................................
      320............................................................
    NuScale Power, Inc., Prepared Statement of.......................
      289............................................................
    Nuclear Energy Institute, Prepared Statement of the..............
      286............................................................

    Oglala Sioux Rural Water Supply System, Prepared Statement of the
      313............................................................
    Ohio Lake Management Society, Prepared Statement of the..........
      216............................................................
    Orchard Mesa Irrigation District, Prepared Statement of the......
      321............................................................

    PNM Resources, Inc., Prepared Statement of.......................
      321............................................................

    Reed, Senator Jack, U.S. Senator From Rhode Island, Questions
      Submitted by...................................................
      76.............................................................
    Rosebud Rural Water System, Prepared Statement of the............
      313............................................................

    San Juan Water Commission, Prepared Statement of the.............
      321............................................................
    Society for Industrial and Applied Mathematics, Prepared
      Statement of the...............................................
      292............................................................
    Soil Science Society of America, Prepared Statement of the.......
      235............................................................
    Southern:
        Company Generation, Prepared Statement of....................
          294........................................................
        Ute Indian Tribe, Prepared Statement of the..................
          322........................................................
    Southwestern Water Conservation District, Prepared Statement of
      the............................................................
      322............................................................
    State of New Mexico, Office of the State Engineer, Santa Fe,
      Prepared Statement of the......................................
      322............................................................
    Stockton Port District, California, Prepared Statement of the....
      216............................................................
    Symbiotics, Prepared Statement of................................
      297............................................................

    Technology International, Inc., Prepared Statement of............
      298............................................................
    Tester, Senator Jon, U.S. Senator From Montana, Questions
      Submitted by.................................................117, 183
    Tri-County Water Conservancy District, Prepared Statement of the.
      323............................................................

    Universities Research Association, Inc., Prepared Statement of
      the............................................................
      299............................................................
    University Corporation for Atmospheric Research, Prepared
      Statement of
      the............................................................
      300............................................................
    Upper Gunnison River Water Conservancy District, Prepared
      Statement of the...............................................
      324............................................................
    Utah Water Users Association, Prepared Statement of the..........
      324............................................................

    Van Antwerp, Lieutenant General Robert L., Chief of Engineers,
      Corps of Engineers--Civil, Department of the Army, Department
      of Defense--Civil..............................................
      13.............................................................
        Prepared Statement of........................................
          14.........................................................
        Questions Submitted to.......................................
          65.........................................................
    Ventura Harbor, Ventura Port District--California, Prepared
      Statement of the...............................................
      222............................................................

    West River/Lyman Jones Rural Water System, Prepared Statement of
      the............................................................
      313............................................................
    West Virginia University, Prepared Statement of..................
      302............................................................
    Wilkes University, College of Science and Engineering, Prepared
      Statement of...................................................
      305............................................................
    Wyoming Water Association, Prepared Statement of the.............
      324............................................................

                                 SUBJECT INDEX

                                  ----------

                          DEPARTMENT OF DEFENSE--CIVIL

                             Department of the Army

                           Corps of Engineers--Civil

                                                                       Page

    Additional Committee Questions...................................    58
    America's Great Outdoors Initiative and Civil Works Recreation...    11
    American Recovery and Reinvestment Act...........................    12
    Aquatic Ecosystem Restoration....................................     9
    California-Specific Questions....................................    73
    Coastal Restoration and Protection--Louisiana Coastal Area.......    61
    Completion of the Levee System for the Greater New Orleans Area..    59
    Construction Program.............................................    15
    Dam Safety.......................................................    67
    Direct Program...................................................    14
    Dredging Needs on the Mississippi................................    61
    Efficiency and Effectiveness of the Corps of Engineers Operations    16
    Emergency Response...............................................    17
    Fiscal Year 2012 Discretionary Funding Level.....................     7
    Harbor Maintenance Trust Fund....................................11, 65
    Infrastructure Recapitalization..................................    10
    Inland Waterway Trust Fund.......................................11, 62
    Investigations Program...........................................    14
    Levee:
        Certification................................................72, 75
        Vegetation...................................................    70
    Lower-Priority Programs..........................................    12
    National Defense.................................................    17
    New:
        Investments in Fiscal Year 2012..............................     9
        Starts.......................................................    69
    Operation and Maintenance Program................................    15
    Panama Canal.....................................................    76
    Planning:
        Improvements.................................................    11
        Program Modernization........................................    16
    Proposed Legislation.............................................    16
    Reimbursable Program.............................................    16
    Research and Development.........................................    17
    Small Ports......................................................    68
    Summary of Fiscal Year 2012 Program Budget.......................    14
    Veterans Curation Project........................................    12

                              DEPARTMENT OF ENERGY

    Additional Committee Questions...................................   171
    Advanced Cable and Conductors Program (Formerly High Temperature
      Superconducting Program).......................................   177
    American Recovery and Reinvestment Act...........................   189
    Biofuels.........................................................   180
    Blue Ribbon Commission on Nuclear Waste..........................   189
    Clean Renewable Energy Bonds.....................................   178
    Cleanup Budgets for the Nuclear Weapons Complex..................   199
    Contracts Management.............................................   190
    Coordination of Power Marketing Administrations and the
      Department of Energy Policy....................................   186
    Department of Energy Fiscal Year 2012 Program Office Highlights..   138
    Deep Underground Science and Engineering Laboratory at Homestake.   155
    Deepwater Offshore Wind Technologies.............................   159
    Distributed Wind...............................................182, 184
    Energy Research and Subsidies....................................   151
    Enriched Uranium Tails at Paducah................................   147
    Environmental:
        Impact of Fracking...........................................   151
        Management...................................................   172
    Fiscal Responsibility............................................   132
    Fossil Energy....................................................   192
    Fracking.........................................................   158
    Fuel Cells.......................................................   183
    Geothermal Funding...............................................   162
    Global Energy Race...............................................   150
    H-Canyon.........................................................   193
    High-Priority Experiments........................................   156
    Highlights of the Fiscal Year 2012 Budget Request................   132
    Hydrogen.........................................................   194
        Technologies.................................................   145
        And Fuel:
            Cell Technologies........................................   176
            Cells....................................................   182
    Leading in the Global Clean-Energy Economy.......................   131
    Loan:
        Guarantee Program............................................   172
            Credit Subsidies.........................................   167
        Guarantees for Advanced Technology Automobiles...............   157
    Mechanical Insulation Program....................................   187
    Mississippi River Level..........................................   157
    Nuclear:
        Energy and Energy Security...................................   153
        Fuel Rods and Dry Cast Storage...............................   170
        Safety and Security..........................................   132
    Oak Ridge Cleanup................................................   189
    Office of Environmental Management Budget and Nuclear Cleanup....   164
    Rural Implementation.............................................   186
    Savannah River Site Pensions.....................................   195
    Science Labs.....................................................   191
    Small Modular Reactors...........................................   169
    Solar:
        Energy Technology Program....................................   177
        Technology Prices/Subsidies..................................   146
    Spent Nuclear Fuel Storage.......................................   166
    State Environmental Agency Directors Support Fiscal Year 2012
      Funding Appropriation for U.S. Department of Energy's Nuclear
      Cleanup Work...................................................   199
    Strategic Petroleum Reserve....................................154, 192
    Supporting Groundbreaking Science................................   131
    Water Power Program..............................................   174
    Western Area Power Administration Transmission...................   184
    Yucca Mountain...................................................   163
        Nuclear Waste................................................   154

                    National Nuclear Security Administration

    Additional Committee Questions...................................   112
    Export Control Regulations.......................................   119
    Four-Year Effort.................................................   115
    Implementing the President's Nuclear Security Agenda.............    98
    Improving the Way National Nuclear Security Administration Does
      Business.......................................................    99
    Investing in the Future..........................................    97
    Material Consolidation...........................................   116
    Naval Reactors Facility, Idaho National Laboratory...............   120
    Small Modular Reactors Program...................................   122
    Technological Surprise...........................................   116
    Uranium Downblending.............................................   122

                           DEPARTMENT OF THE INTERIOR

                             Bureau of Reclamation

    Additional Committee Questions...................................    58
    Administrative Cost Savings and Management Efficiencies..........    31
    Aging Infrastructure.............................................    80
    Allocations Without Earmarks.....................................    39
    Bay-Delta Interagency Plan.......................................    82
    CALFED...........................................................    85
    California Bay-Delta Restoration Fund............................    32
    Cedar Rapids, Iowa...............................................    52
    Central:
        Utah Project Completion Act..................................    24
        Valley Project Restoration Fund..............................32, 84
    Chickamauga Lock.................................................    35
    Climate Change...................................................    81
    Continuing Authorities Program...................................    47
    Fiscal:
        Responsibility...............................................    21
        Year 2012 Planned Activities.................................    32
    Funding:
        Decisions....................................................    50
        Harbor Deepening.............................................    45
    Harbor Maintenance Trust Fund....................................    33
    Highlights of the Fiscal Year 2012 Request for Water and Related
      Resources......................................................    28
    Hydropower.......................................................    23
    Imperial, Coachella, and Metropolitan Water......................    87
    Indian Water Rights:
        Settlement...................................................    77
        Settlements..................................................    31
    Inland Waterway Trust Fund.......................................    36
    Investing in the Future..........................................    21
    Kennebec River...................................................    43
    Lake Powell/Lake Mead............................................    87
    Levee Certification..............................................42, 52
    Mississippi River and Tributaries Project........................    40
    Mni Wiconi.......................................................    79
    Needs Assessment.................................................    79
    Odessa Subarea Special Study.....................................    89
    Operation and Maintenance........................................    80
    Passaic River Basin..............................................    49
    Policy and Administration........................................    31
    Principles and Guidelines........................................    80
    Quagga Mussel....................................................    88
    Rural Water......................................................79, 89
    San Joaquin River Restoration....................................    86
        Fund.........................................................    32
    Secure Water.....................................................    81
    South of Delta Water Allocations.................................    83
    Title XVI Program................................................    82
    2010 Accomplishments.............................................    20
    Upper Mississippi River Navigation...............................    53
    Water and Related Resources......................................    28
    Yellowstone Intake Diversion Dam.................................    42

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