[Senate Hearing 112-140]
[From the U.S. Government Publishing Office]
S. Hrg. 112-140
WOODS, DANIELSON, AND HARRIS NOMINATIONS
=======================================================================
HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
ON
THE NOMINATIONS OF GREGORY H. WOODS, TO BE GENERAL COUNSEL, DEPARTMENT
OF ENERGY, DAVID T. DANIELSON, TO BE AN ASSISTANT SECRETARY OF ENERGY
(ENERGY EFFICIENCY AND RENEWABLE ENERGY), DEPARTMENT OF ENERGY, AND
LADORIS G. HARRIS, TO BE DIRECTOR FOR THE OFFICE OF MINORITY ECONOMIC
IMPACT, DEPARTMENT OF ENERGY
__________
SEPTEMBER 15, 2011
Printed for the use of the
Committee on Energy and Natural Resources
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
JEFF BINGAMAN, New Mexico, Chairman
RON WYDEN, Oregon LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington MIKE LEE, Utah
BERNARD SANDERS, Vermont RAND PAUL, Kentucky
DEBBIE STABENOW, Michigan DANIEL COATS, Indiana
MARK UDALL, Colorado ROB PORTMAN, Ohio
JEANNE SHAHEEN, New Hampshire JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota DEAN HELLER, Nevada
JOE MANCHIN, III, West Virginia BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware
Robert M. Simon, Staff Director
Sam E. Fowler, Chief Counsel
McKie Campbell, Republican Staff Director
Karen K. Billups, Republican Chief Counsel
C O N T E N T S
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STATEMENTS
Page
Bingaman, Hon. Jeff, U.S. Senator From New Mexico................ 1
Danielson, David T. Nominee to be Assistant Secretary of Energy
(Energy Efficiency and Renewable Energy)....................... 8
LaDoris G. Harris, Nominee to be Director for the Office of
Minority Economic Impact....................................... 11
Murkowski, Hon. Lisa, U.S. Senator From Alaska................... 2
Woods, Gregory H., Nominee to be General Counsel................. 5
APPENDIX
Responses to additional questions................................ 37
WOODS, DANIELSON, AND HARRIS NOMINATIONS
----------
THURSDAY, SEPTEMBER 15, 2011
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The committee met, pursuant to notice, at 9:35 a.m. in room
SD-366, Dirksen Senate Office Building, Hon. Jeff Bingaman,
chairman, presiding.
OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW
MEXICO
The Chairman. OK. Why don't we get started? The committee
meets this morning to consider 3 nominations.
Before I start a very short statement describing those, let
me just make a short statement about the passing yesterday of
former Senator Malcolm Wallop of Wyoming, who served with great
distinction on this committee. He served in the Senate for 18
years from 1977 through 1995. He was a member of this Energy
and Natural Resources Committee for all but his first 2 years
in the Senate. He chaired the Subcommittee on Public Lands and
Reserved Water for three terms and served as the ranking member
of the full committee during his last 2 terms.
As ranking member, he worked closely and constructively
with Chairman Bennett Johnston to forge the landmark Energy
Policy Act of 1992. In addition to his work on this committee,
Senator Wallop took a very active role in defense and foreign
policy and trade and tax matters. I was fortunate to serve with
him on the Armed Services Committee as well.
He is survived by his wife, Isabel, and 4 children by a
previous marriage. We extend our condolences to all of them.
I didn't know if Senator Murkowski wanted to make any
statement about Senator Wallop before I go ahead with the
regular hearing.
Senator Murkowski. Thank you, Mr. Chairman. I did not have
the opportunity to really come to know Senator Wallop in a
working capacity. He had worked for many years with my father
when they were both members of this Energy Committee.
I can recall some of the stories that my father had shared.
Apparently he had a pretty good sense of humor and was an
individual that not only had the respect of his colleagues, but
who also shared his love for the land in ways that worked to
make a difference for our country.
He will be missed. I share your words in conveying our
condolences to the family.
The Chairman. Thank you.
As I indicated the committee meets this morning to consider
3 nominations for positions in the Department of Energy.
Gregory Woods, to be the General Counsel.
David Danielson, to be the Assistant Secretary for Energy
Efficiency and Renewable Energy.
LaDoris Harris, to be the Director of the Office of
Minority Economic Impact.
Mr. Woods is currently the Deputy General Counsel for the
Department of Transportation. He was previously a partner in
the law firm of Debevoise and Plimpton in New York. He was a
trial attorney in the Justice Department prior to that.
Dr. Danielson is currently a Program Director in the
Department of Energy's Advanced Research Projects Agency, known
as ARPA-E. Before that he was a Clean Energy Venture
Capitalist, specializing in financing of solar, wind, biofuels,
carbon capture and sequestration and advanced lighting
projects. He holds a Doctorate in Materials Science and
Engineering from MIT.
Ms. Harris is currently the President and Chief Executive
Officer of Jabo Industries. It's a minority, woman owned,
management consulting firm specializing in the Energy
Information Technology and Health Care Industries. She was
previously an Executive with General Electric Company and held
executive and management positions at ABB and at Westinghouse
before that.
All 3 nominees have demonstrated their ability and
qualifications for the positions to which the President has
nominated them by their professional training and experience. I
strongly support all 3 nominees. I'm delighted to welcome them
to the committee this morning.
Let me defer to Senator Murkowski for her statement.
STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR
FROM ALASKA
Senator Murkowski. Thank you, Mr. Chairman. Welcome to each
of you. Mr. Woods, Dr. Danielson, Ms. Harris, I appreciate you
being here and your willingness to serve.
Dr. Danielson, if confirmed as Assistant Secretary for
Energy and Efficiency and Renewable Energy, your task will be
to find the path for the eventual and inevitable transition
from fossil fuels to that next generation of energy
technologies. One of the issues that we continue to struggle
with and which is particularly acute in these difficult
economic times is what role the government really plays in this
transition. Earlier this week we had a kind of a round table
with a group of businessmen from the Bipartisan Policy Council.
Mr. Bill Gates was part of that group.
We discussed the importance of the government role in basic
R and D. While the availability of funding is certainly more of
an issue now than ever, I am one of those who believes that
there is a role for government in research and development. So
the real question is, what happens next?
We hear a lot about the valley of death for investment. But
it appears that there is more than just one valley of death out
there. The real question is whether or not it's the
government's responsibility to get businesses through each of
them.
In EPACT 2005 the Loan Guarantee Program was established to
attempt to deal with one valley of death toward
commercialization of new technologies. But it's unfortunate
that the original intent of the Loan Guarantee was subverted by
the Stimulus bill. The original Section 1702 and 1703 Loan
Guarantee process has requirements to prevent what we're seeing
in the Solyndra case, not least of which was the payment of the
subsidy cost by the borrower.
However in the Stimulus bill, Section 1705 was added along
with a large appropriation for Federal payment of the credit
subsidy for the renewable energy projects, setting the stage
for political convenience to trump wise, financial decisions.
There's also some evidence that the requirements of Section
1705 were simply ignored in the Solyndra case. This possibility
is one reason behind my support for the Clean Energy
Development Bank idea. The goal was to set up an independent
entity removing the Loan Guarantee from the political process
and hopefully ensure that the financial experts have the final
say.
I think the Solyndra case demonstrates that our problems
can't be solved by just pouring money on the problems. All of
the Loan Guarantees and subsidies in the world will eventually
be for naught if the technology can't stand on its own 2 feet
in the marketplace. That means competing on cost which requires
lower energy costs. Our economy needs abundant, inexpensive
energy to thrive.
So when we're talking about green energy and creating green
jobs, it's important to note that those jobs could be
counterproductive for the overall economy if it results in
increased energy costs. I think all of us can agree that we
face a range of difficult energy related challenges and the
appointees from within our executive agencies will be expected
to provide the leadership to help meet them. What we need right
now are smart people who will work with the private sector to
find the right policies, set the right conditions that will
ensure our Nation's continued prosperity.
I look forward to hearing from each of you today regarding
how we can exactly do that. I welcome you to the committee.
Thank you, Mr. Chairman.
The Chairman. Thank you very much.
The rules of our committee which apply to all nominees
require that nominees be sworn in in connection with their
testimony. I'd ask each of you to stand and raise your right
hand if you would please.
Do you solemnly swear that the testimony you're about to
give to the Senate Committee on Energy and Natural Resources
shall be the truth, the whole truth and nothing but the truth?
Mr. Woods. I do.
Mr. Danielson. I do.
Ms. Harris. I do.
The Chairman. Please be seated.
Before you begin your statements I'll ask 3 questions and
address them to each nominee before the committee today.
The first question is will you be available to appear
before this committee and other congressional committees to
represent Departmental positions and respond to issues of
concern to the Congress?
Yes, Mr. Woods.
Mr. Woods. I will, sir.
The Chairman. Dr. Danielson.
Mr. Danielson. I will.
The Chairman. Ms. Harris.
Ms. Harris. I will.
The Chairman. Thank you.
Second question. Are you aware of any personal holdings,
investments or interests that could constitute a conflict of
interest or create the appearance of such a conflict should you
be confirmed and assume the office to which you have been
nominated by the President?
Mr. Woods.
Mr. Woods. Mr. Chairman, my investments, personal holdings
and other interests have been reviewed both by myself and the
appropriate ethics counselors within the Federal Government.
I've taken appropriate action to avoid any conflicts of
interest. There are no conflicts of interest or appearances
thereof, to my knowledge.
The Chairman. Thank you.
Dr. Danielson.
Mr. Danielson. My investments, personal holdings and other
interests have been reviewed both by myself and the appropriate
ethics counselors within the Federal Government. I have taken
appropriate action to avoid any conflicts of interest. There
are no conflicts of interest or appearances thereof, to my
knowledge.
The Chairman. Thank you.
Ms. Harris.
Ms. Harris. My investments, personal holdings and other
interests have been reviewed both by myself and the appropriate
ethics counselors within the Federal Government. I have taken
appropriate action to avoid any conflicts of interest. There
are no interests--of conflicts of interest or appearance
thereof, to my knowledge. Thank you.
The Chairman. Thank you very much.
The final question we ask all nominees is are you involved
or do you have any assets that are held in a blind trust?
Mr. Woods.
Mr. Woods. No, sir.
The Chairman. Dr. Danielson.
Mr. Danielson. No, I do not.
The Chairman. Ms. Harris.
Ms. Harris. No, I do not.
The Chairman. Thank you all. At this point in our normal
procedure we invite nominees to introduce any family members
that are with them, if there are family members present today.
Mr. Woods, did you have anybody you wanted to introduce?
Mr. Woods. Yes, Mr. Chairman. Thank you very much. I'm
lucky that my wife is here, Mary, together with my children
Jamie and Ainsley Mae and my mother, Kathy.
The Chairman. We welcome them. Glad to have them here.
Dr. Danielson, did you have anyone you wanted to introduce?
Mr. Danielson. Yes. I'm lucky to have my parents, Paul and
Margaret Danielson and my girlfriend, Margaret Cantrell. My
parents flew in from California last night. I wanted to thank
them for all their love and support.
The Chairman. Thanks. We appreciate them being here and
welcome them.
Ms. Harris, did you have anyone you want to introduce?
Ms. Harris. Yes, Chairman. First I would like to say I have
a host of family and friends. I have with me my sons, Garry and
William Harris, my sister and business partner, Lillie Reed, my
assistant Martha Crawford, my cousin Sharon. I have my
Goddaughter, Yonni is here. Oh, boy, a whole host of others
here. Please stand up.
[Laughter.]
The Chairman. Good. We should have gotten a bigger hearing
room.
Ms. Harris. Yes.
[Laughter.]
The Chairman. We appreciate them being here. Welcome them
all.
At this point we would go ahead and defer to the nominees
to make their opening statements.
Mr. Woods, why don't you go ahead?
TESTIMONY OF GREGORY H. WOODS, NOMINEE TO BE GENERAL COUNSEL
Mr. Woods. Thank you, Mr. Chairman.
Chairman Bingaman, Ranking Member Murkowski, distinguished
members of the committee, thank you very much for the
opportunity to appear before you here today.
First, I'd like to thank President Obama for nominating me
to serve as General Counsel of the Department of Energy. I
intend to work hard to justify the confidence that he's placed
in me.
I wanted to also thank Secretary Chu for asking me to serve
as his Counsel. I look forward to the opportunity to advise him
and his team as they develop and implement policies to address
our Nation's energy needs.
I'd also like to thank Secretary LaHood and my colleagues
at the Department of Transportation, without whose tutelage and
support I couldn't have developed the skills that I have to
bring to further serve at the Department of Energy.
Finally, I'd like to thank my wife, Mary, my children
Ainsley Mae and Jaime and my family and friends both here and
afar for their love and support.
Mr. Chairman, Ranking Member Murkowski, as you both know,
the General Counsel is the principle legal officer of the
Department responsible for ensuring that the Department
operates in full compliance with the law. The General Counsel
provides legal advice and counsel to the Secretary and his
colleagues, represents the Department as counsel before other
Federal Governmental agencies and works with the Department of
Justice to represent the agency before the courts. Thankfully
for me, the General Counsel does not do all of this on his own.
The Department has a dedicated and energetic staff of career
attorneys and I look forward to working with that team and
drawing on its deep expertise.
Mr. Chairman, ranking member, this nomination is a great
honor for me. It's been a journey to get here. My wife and I
are raising our children in Washington Heights in New York
City, but I was raised alone by my mother as a single parent in
Philadelphia. My family's roots are in West Virginia.
Both my parents were born in Morgantown. My grandfather and
great grandfather were--both mined coal for a living. My mother
worked several jobs at a time while I was growing up to provide
the education that made it possible for me to be here today.
I'd like to give a special thanks to her for all that she's
done for me.
Sir, after graduating from Williams College in
Massachusetts I was fortunate to have the opportunity to attend
Yale Law School. Following my graduation from law school I
joined the United States Department of Justice as a trial
attorney, attracted by the prospect of serving the United
States. At the Justice Department I prosecuted fraud cases
against government contractors under the False Claims Act. That
was invaluable preparation.
I've had the personal experience of litigating on behalf of
the United States. I learned that intimately government
contracting process and how it can be abused. I left the
Department of Justice in 1998 to join Debevoise and Plimpton, a
leading New York based law firm.
After 6 years as an Associate in the firm's Corporate
Department I was promoted to become an Equity Partner of the
firm. My practice there was varied, but it focused on financing
complex acquisitions and joint venture arrangements. In each of
the last 3 years of my 5 years at their firm as a partner I was
recognized by Chambers as one of the leading lawyers in New
York in banking and finance.
In 2009 I left my firm to become Deputy General Counsel at
the Department of Transportation. There I helped to oversee and
manage the legal and regulatory affairs of the Cabinet
Department with over 55,000 employees and 500 lawyers. In my
work at DOT over the last two plus years, I've dealt with a
broad range of issues that regularly confront lawyers in
government service and I've learned from valued colleagues how
to cultivate and develop a strong legal team. I'll draw on that
experience to manage the legal affairs of the Department of
Energy.
I've learned from good experience also at the Department of
Transportation how important it is for government agencies to
have open and honest lines of communication with the Congress.
If confirmed I hope to have many opportunities to work with the
members of this committee and your staff as we go forward.
Mr. Chairman, Ranking Member Murkowski, I hope that you and
this committee will conclude that I have the qualifications
required for the position for which I've been nominated. I'll
come to the Department with a wide range of high level, legal
experience, management skills, dedication and judgment honed
during my years of practice in both government and the private
sector.
Thank you and the committee once again, for the opportunity
to appear before you. I'd be pleased to answer any questions
that you may have. Thank you.
[The prepared statement of Mr. Woods follows:]
Prepared Statement of Gregory H. Woods, Nominee to be General Counsel
Chairman Bingaman, Ranking Member Murkowski, distinguished Members
of the Committee, thank you very much for the opportunity to appear
before you today.
First, I would like to thank President Obama for nominating me to
serve as General Counsel of the U.S. Department of Energy. I intend to
work hard to justify the confidence that he has placed in me.
I also want to thank Secretary Chu for asking me to serve as his
counsel. I look forward to the opportunity to advise him and his team
as they develop and implement policies to address our Nation's energy
needs. I would also like to thank Secretary LaHood and my colleagues at
the Department of Transportation, without whose tutelage and support I
could not have developed the skills that I hope to bring to further
service at the Department of Energy.
Finally, I would like to thank my wife, Mary, my children, Ainsley
Mae and Jamie, and my family and friends, both present and afar, for
their love and support.
Mr. Chairman, as you know, the General Counsel is the principal
legal officer of the Department, responsible for ensuring that the
Department operates in full compliance with the law. The General
Counsel provides legal advice and counsel to the Secretary and his
colleagues, represents the Department as counsel before other Federal
governmental agencies, and works with the Department of Justice to
represent the agency before the courts. The General Counsel does not do
all of this on his own: the Department has a dedicated, energetic staff
of career attorneys. I look forward to working with that team and
drawing on its deep expertise.
This nomination is a great honor for me; it has been a journey for
me to get here. My wife and I are raising our children together in the
Washington Heights neighborhood of New York City, but I was raised
alone by my mother in Philadelphia, and my family's roots are in West
Virginia. Both of my parents were born in Morgantown; my grandfather
and great-grandfather mined coal for a living. My mother worked several
jobs at a time when I was growing up to provide the education that made
it possible for me to be here today.
After graduating from Williams College in Massachusetts, I was
fortunate to have the opportunity to attend Yale Law School. Following
my graduation from law school, I joined the United States Department of
Justice as a Trial Attorney, attracted by the prospect of serving the
United States. At the Justice Department, I prosecuted fraud cases
against government contractors under the False Claims Act. That was
invaluable preparation--I have had the personal experience of
litigating on behalf of the United States, and I learned intimately the
government contracting process and how it can be abused.
I left the Department of Justice in 1998 to join Debevoise &
Plimpton, a leading New York-based law firm. After six years as an
associate in the firm's corporate department, I was promoted to become
an equity partner of the firm. My practice was varied, but focused on
financing complex acquisitions and joint-venture arrangements. In each
of the last three years of my five years at the firm as a partner, I
was recognized by Chambers USA as one of the leading lawyers in New
York for banking and finance.
In 2009, I left my firm to become the Deputy General Counsel at the
Department of Transportation. There, I help to oversee and manage the
legal and regulatory affairs of a cabinet department with over 55,000
employees and 500 lawyers. In my work at DOT over the last two-plus
years, I have dealt with the broad range of issues that regularly
confront lawyers in government service and learned from valued
colleagues how to cultivate and develop a strong legal team. I will
draw on that experience to manage the legal affairs of the Department
of Energy.
I have learned from good experience at the Department of
Transportation how important it is for government agencies to have open
and honest lines of communication with the Congress. If confirmed, I
hope to have many opportunities to work closely with the Members of
this Committee and your staff.
Mr. Chairman, I hope that you and this Committee will conclude that
I have the qualifications required for the position for which I have
been nominated. I will come to the Department with a wide range of
high-level legal experience, management skills, dedication, and
judgment honed during my years of practice in government service and
the private sector.
Thank you and the Committee once again for this opportunity to
appear before you. I would be pleased to answer any questions you may
have.
The Chairman. Thank you very much. Let me just note for
Senator Manchin's information: Mr. Woods just told us that he's
a native of West Virginia. So maybe you knew that.
Senator Manchin. That's why I'm here.
The Chairman. I understand.
[Laughter.]
The Chairman. I knew there had to be an explanation.
[Laughter.]
The Chairman. Dr. Danielson, why don't you go ahead?
TESTIMONY OF DAVID T. DANIELSON, TO BE ASSISTANT SECRETARY OF
ENERGY (ENERGY EFFICIENCY AND RENEWABLE ENERGY)
Mr. Danielson. Thank you, Chairman.
Chairman Bingaman, Ranking Member Murkowski and
distinguished members of the committee, it is a distinct honor
and privilege to appear before you today as President Obama's
and Secretary Chu's nominee for Assistant Secretary for Energy
Efficiency and Renewable Energy. I wish to thank Secretary Chu
and President Obama for their support and confidence in
recommending and nominating me.
I also want to thank the committee for considering my
nomination.
I was born and raised in a middle class family in Salinas,
California where I attended public schools and developed a
lifelong love of math and science. My love for math and science
led me to pursue an undergraduate degree in Materials Science
and Engineering at the University of California Berkeley.
During my studies there I became keenly aware of energy's
critical role in America's national and economic security and
the profound opportunity that exists for our Nation to leverage
its world class, technical, entrepreneurial and industrial
talent to solve these challenges.
Fully committed to meeting these challenges I went on to
pursue a PhD at MIT to develop cutting edge, new energy
technologies. While at MIT I conducted research in solar power,
taught courses on advanced energy technologies and authored
more than 20 scientific articles. In addition to my research, I
founded the MIT Energy Club, a first of a kind, campus
organization devoted to building a multidisciplinary MIT energy
community through an outcome oriented, fact based, technology
agnostic approach to solving our Nation's energy challenges.
The club became the largest, most active organization on
campus, helped spawn the creation of MIT's Energy Initiative, a
325 million dollar energy research initiative that engages more
than 270 MIT faculty researchers and catalyzed the creation of
a network of more than 45 sister organizations at top
universities around the country with more than 10,000 members.
After my time at MIT I joined the private sector as an
energy venture capitalist, co founding the Clean Energy
Investment Practice at General Catalyst Partners, a Boston
based venture capital firm with $1.7 billion under management.
As a venture capitalist I helped create and grow American
energy startups in various advanced energy technology areas
including advanced biofuels, natural gas, solar power, wind
power, carbon capture and storage and efficient lighting. While
in venture capital I also co founded the New England Clean
Energy Council, a non-profit organization that built a strong
regional clean energy community and serves as a platform for
effective public/private partnerships.
Two and a half years ago, I left the private sector to help
establish the Department of Energy's Advanced Research Projects
Agency Energy, ARPA-E, as its first employee. At ARPA-E I
played a critical role in establishing and building the core
foundations of organizational, cultural and operational
excellence for this new agency. I'm proud to say that ARPA-E is
already yielding some very exciting, early results.
As ARPA-E's first Program Director I currently manage $100
million in investments and 24 high risk, high impact R and D
projects in next generation batteries for plug in electric
vehicles, grid scale storage, next generation solar wafers,
geothermal drilling, rare Earth magnets and waste heat
capturing thermal electric devices. With continued developments
for it, these ARPA-E projects could lead to the creation of
whole new energy technology industries and American leadership
in those industries. All the things that make American unique
put us in an incredibly strong position to create and lead the
energy industries of the future. We have the world's best and
most creative researchers in our universities and national labs
and our entrepreneurial ecosystem is second to none.
I believe that my technical and business background in a
wide variety of clean energy fields has provided me with the
experience and expertise necessary to lead the Office of Energy
Efficiency and Renewable Energy. EERE has played a pivotal role
in driving U.S. leadership to date in the emerging energy
efficiency and renewable energy sectors. Citing just one
example, EERE support has been critical to the development of
the batteries at the heart of today's hybrid electric vehicles
in addition to the batteries in both current and next
generation plug in hybrid electric vehicles. EERE's mission to
provide American companies with a clean energy technology
advantage has only become more urgent as countries like China
have begun to dramatically scale up their investments in clean
energy.
If confirmed I look forward to applying my full energy
commitment to advancing America's strong and growing energy
innovation ecosystem. I pledge to work closely with this
committee to lower our dependence on foreign oil, decrease
energy costs for American families and businesses and
reinvigorate the Nation's economy all while providing a better
environment for our children and grandchildren.
Mr. Chairman, Ranking Member Murkowski and members of the
committee, I thank you again for considering my nomination. If
confirmed I look forward to working with this committee and
others in Congress as we pursue the common goal of securing
America's energy future. Thank you. I look forward to answering
any questions you may have.
[The prepared statement of Mr. Danielson follows:]
Prepared Statement of David T. Danielson, to be Assistant Secretary of
Energy (Energy Efficiency and Renewable Energy)
Chairman Bingaman, Ranking Member Murkowski, and distinguished
members of the committee, it is a distinct honor and privilege to
appear before you today as President Obama's and Secretary Chu's
nominee for Assistant Secretary for Energy Efficiency and Renewable
Energy. I wish to thank Secretary Chu and President Obama for their
support and confidence in recommending and nominating me. I also want
to thank the Committee for considering my nomination.
Please allow me to start by introducing my parents, Paul and
Margaret Danielson, who just flew in from California, and my girlfriend
Margaret Cantrell. I want to thank them for all of their love and
support.
I was born and raised in a middle class family in Salinas,
California, where I attended public schools and developed a life-long
love of math and science.
My love for math and science led me to pursue an undergraduate
degree in Materials Science and Engineering at the University of
California, Berkeley. During my studies there, I became keenly aware of
energy's critical role in America's national and economic security and
the profound opportunity that exists for our nation to leverage its
world class technical, entrepreneurial, and industrial talent to solve
these challenges. Fully committed to meeting these challenges, I went
on to pursue a PhD at MIT to develop cutting-edge new energy
technologies.
While at MIT, I conducted research in solar power, taught courses
on advanced energy technologies, and authored more than 20 scientific
articles. In addition to my research, I founded the MIT Energy Club--a
first-of-a-kind campus organization devoted to building a multi-
disciplinary MIT energy community through an outcome-oriented, fact-
based, technology-agnostic approach to solving our nation's energy
challenges. This Club became the largest, most active organization on
campus, helped spawn the creation of MIT's Energy Initiative (a $325M
energy research initiative that engages more than 270 MIT faculty
researchers), and catalyzed the creation a network of more than 45
sister-clubs at top universities around the country with more than
10,000 student members.
After my time at MIT, I joined the private sector as an energy
venture capitalist, co-founding the clean energy investment practice at
General Catalyst Partners, a Boston-based venture capital firm with
$1.7B under management. As a venture capitalist, I helped create and
grow American energy start-ups in various advanced energy technology
areas including: advanced biofuels, natural gas, solar power, wind
power, carbon capture and storage, and efficient lighting. While in
venture capital, I also co-founded the New England Clean Energy
Council, a non-profit organization that built a strong regional clean
energy community and serves as a platform for effective public-private
partnerships.
Two and a half years ago, I left the private sector to help
establish the Department of Energy's Advanced Research Projects
Agency--Energy (ARPA-E) as its first employee. At ARPA-E, I played a
key role in establishing and building the core foundations of
organizational, cultural, and operational excellence for this new
agency. I am proud to say that ARPA-E is already yielding some very
exciting early results.
As ARPA-E's first Program Director, I currently manage $100M in
investments in 24 high-risk, high-impact R&D projects in next
generation batteries for plug-in electric vehicles, grid-scale storage,
next generation solar wafers, geothermal drilling, rare-earth free
magnets, and waste heat capturing thermoelectric devices. With
continued development and support, these ARPA-E projects could lead to
the creation of whole new energy technology industries and American
leadership in those industries.
All the things that make America unique put us in an incredibly
strong position to create and lead the energy industries of the future:
we have the world's best and most creative researchers in our
universities and national labs and our entrepreneurial eco-system is
second to none.
I believe that my technical and business background in a wide
variety of clean energy fields has provided me with the experience and
expertise necessary to lead the Office of Energy Efficiency and
Renewable Energy (EERE). EERE has played a pivotal role in driving U.S.
leadership to date in the emerging energy efficiency and renewable
energy sectors. Citing just one example, EERE support has been critical
to the development of the batteries at the heart of today's hybrid
electric vehicles, in addition to the batteries in both current and
next generation plug-in hybrid electric vehicles. EERE's mission to
provide American companies with a clean energy technology advantage has
only become more urgent as countries like China have begun to
dramatically scale up their investments in clean energy.
If confirmed, I look forward to applying my full energy and
commitment to advancing America's strong and growing energy innovation
ecosystem. I pledge to work closely with this committee to lower our
dependence on foreign oil, decrease energy costs for American families
and businesses, and re-invigorate the Nation's economy; all while
providing a better environment for our children and grandchildren.
Mr. Chairman, Ranking Member Murkowski, and members of the
committee, I thank you again for considering my nomination. If
confirmed, I look forward to working with this committee and others in
the Congress as we pursue the common goal of securing America's energy
future.
Thank you and I look forward to answering any questions you may
have.
The Chairman. Thank you very much.
Ms. Harris, go right ahead.
TESTIMONY OF LADORIS G. HARRIS, NOMINEE TO BE DIRECTOR FOR THE
OFFICE OF MINORITY ECONOMIC IMPACT
Ms. Harris. Chairman Bingaman, Ranking Member Murkowski and
distinguished members of the committee, I am humbled and
honored to come before you today as President Obama's nominee
for the Director of the Office of Minority Economic Impact for
the Department of Energy.
First I have to thank President Obama and Secretary Chu for
recognizing my abilities and nominating me for this position.
I'm also most appreciative of this committee for considering my
nomination. I am joined today, as I mentioned earlier, by a
host of family and friends who share my view that this position
is one that I have been preparing for my entire career.
I am a 29 year, energy industry leader, who with roles
spanning from field service engineer to corporate officer in
some of the world's largest engineering firms. I am currently
President CEO of Jabo Industry, a minority owned consulting
business focused primarily in energy information and health
care industries. My corporate and entrepreneur experience has
prepared me to effectively perform in the position to which
I've been nominated.
I was born in the small town of Denmark, South Carolina. I
am proud to be the daughter of William ``Jabo'' Guess, a wise
92 year old, who raised 13 children after my mother died of
breast cancer when I was only 8 years old. He raised us with
strong family values, unwavering integrity, robust work ethics,
commitment to education and faith in God, all wrapped in love
and laughter.
I was inspired to pursue an engineering career during a
field trip to the Savannah River Plant located in Aiken, South
Carolina, hosted by my chemistry teacher in high school. The
tour emphasized engineering as an attractive and challenging
career path for women and minorities. I later returned to
Savannah River as a summer intern while in college.
After graduating from the University of South Carolina with
a Bachelor of Science in Electrical Engineering, I joined
Westinghouse Electric Company as a field service engineer in
its nuclear services division. After increasing responsibility
and exceptional performance I became the youngest employee in
the history of the division to be promoted to management.
During my tenure at Westinghouse, I received my Masters of
Science in Technology Management from Southern Polytechnic
State University.
I also worked at Westinghouse at ABB services where I
received four promotions within a 5-year period. I was named
Vice President of Operations and Production for all operations
in the U.S. becoming the highest ranked African American female
in ABB worldwide. I later joined the executive ranks of the
General Electric Company where I held a number of leadership
positions in energy and industrial systems businesses.
My 29 year career in the energy industry has afforded me
experience working across many sectors of energy, including
renewable energy, electric utility, oil and gas industry and
commercial. My diverse leadership roles from operations,
engineering services, sales and marketing have prepared me for
the duties of the Office of Minority Economic Impact. My
technical and operational experience coupled with my strong
business acumen equips me with the expertise necessary to lead
and enhance this very important office of the Department.
Further, I will lead the office in supporting DOE's mission of
creating jobs, improving energy security and developing
innovative and competitive energy technology solutions for our
Nation.
My steadfast commitment to mentoring students, young
professionals and entrepreneurs would be most beneficial in
connecting with the citizens of which this office is dedicated
to serving. For example, as Chairman of the Entrepreneur
Committee for the American Association of Blacks in Energy I
increased membership by 85 percent thus resulting in winning
the 2010 Chairman's Cup Award.
Thus I fully commit to you that I will strive to fulfill
the duties of this position beyond expectations and to lead the
continued progression of small, disadvantaged and minority
businesses in helping to improve our Nation's economy. I am
committed to fully engaging this office as a critical conduit
to achieve the Department's overall goals and objectives as
well as ensure minority businesses, as well as minority
educational institutions enjoying full participation of the
Department's programs.
I would like to thank each of you for your time and
attention. If confirmed as Director of the Office of Minority
Economic Impact I will be honored to have the opportunity to
work closely with this committee. Thank you again and I welcome
any questions you may have.
[The prepared statement of Ms. Harris follows:]
Prepared Statement of LaDoris G. Harris, Nominee to be Director for the
Office of Minority Economic Impact
Chairman Bingaman, Ranking Member Murkowski, and distinguished
members of the Committee, I am humbled and honored to come before you
today as President Obama's nominee for Director of the Office of
Minority Economic Impact for the Department of Energy.
First, I have to thank President Obama and Secretary Chu for
recognizing my abilities and nominating me for this position. I am also
most appreciative of this Committee for considering my nomination.
I am joined today by a host of family and friends who share my view
that this position is one that I have been preparing for my entire
career.
I am a 29-year Energy industry leader, with roles spanning from
field service engineer to corporate officer in some of the world's
largest engineering firms. I am currently President & Chief Executive
Officer of Jabo Industries, LLC, a minority-woman owned management
consulting business concentrated primarily in the Energy, Information
Technology, and Healthcare industries. My corporate and entrepreneurial
experience has well prepared me to effectively perform in the position
for which I have been nominated.
I was born in the small town of Denmark, South Carolina. I am proud
to be the daughter of William ``Jabo'' Guess, a wise 92 year-old who
raised 13 children after my mother died of breast cancer when I was
only 8 years old. He raised us with strong family values, unwavering
integrity, robust work ethics, commitment to education and faith in
God, all wrapped in love and laughter.
I was inspired to pursue an engineering career during a field trip
to DuPont's Savannah River Site in Aiken, South Carolina, hosted by my
high school chemistry teacher. The tour guide emphasized engineering as
an attractive and challenging career path for women and minorities. I
returned to Savannah River as a summer intern while in college.
After graduating from the University of South Carolina with a
Bachelor of Science in Electrical Engineering, I joined Westinghouse
Electric Company as a field services engineer in its Nuclear Services
Division. After increasing responsibilities and exceptional
performance, I became the youngest employee in the history of the
division to be promoted to management. During my tenure at
Westinghouse, I received a Master of Science in Technology Management
from Southern Polytechnic State University. I worked for ABB Services,
Inc., where I received four promotions within five years. I was named
VP of Operations & Production for all operations in the U.S., becoming
the highest-ranked African American female in ABB worldwide. I later
joined the executive ranks of the General Electric Company, where I
held a number of leadership positions in its Energy and Industrial
Systems businesses.
My 29-year career in the energy industry has afforded me experience
working across many energy sectors, including renewable energy,
electric utility, oil & gas, industrial, and commercial. My diverse
leadership roles in operations, engineering, services, sales and
marketing, have prepared me for the duties of the Office of Minority
Economic Impact at the Department of Energy. My technical and
operational experience, coupled with strong business acumen, equips me
with the expertise needed to lead and enhance this important office
within the Department. Further, I will lead the Office in supporting
the DOE mission of creating jobs, improving energy security and
developing innovative and competitive energy technology solutions for
our nation. My steadfast commitment to mentoring students, young
professionals and entrepreneurs will be most beneficial in connecting
with the citizens the Office of Minority Economic Impact is dedicated
to serving. For example, as Chairman of the Entrepreneurs Committee for
the American Association of Blacks in Energy (AABE), I increased
membership by 85% thus resulting in winning the 2010 Chairman's Cup
Award.
Thus, I fully commit to you that I will strive to fulfill the
duties of this position beyond expectation and to lead the continued
progression of small, disadvantaged and minority businesses in helping
to improve our nation's economy. I am committed to fully engaging the
Office as a critical conduit to achieve the Department's overall goals
and objectives, assuring that minority businesses and minority
educational institutions enjoy full participation in the Department's
programs and opportunities.
I would like to thank each of you for your time and attention. If
confirmed as Director of the Office of Minority Economic Impact, I
would be honored to have the opportunity to work closely with this
Committee. Thank you again and I welcome any questions you may have.
The Chairman. Thank you and thank all of you for your
excellent statements. Let me start with a few questions.
Dr. Danielson, let me ask first of all about an issue that
is of concern to me and I think several on the committee here
that relates to the Energy Star program. This is a very highly
successful program, jointly run by the Department of Energy and
the EPA in partnership with thousands of private businesses and
organizations. I think everyone agrees that it does save
American consumers billions of dollars on their energy bills
every year.
It's a voluntary program, but perhaps because it is
voluntary my perception is that EPA has not always done a very
good job of taking the views and concerns of some of the
private companies into account in setting its standards. It's
something that has been brought to the attention of me and
others on the committee. I guess I would ask you if this is
something you would be willing to look into assuming you're
confirmed to ensure that the views of the program's
stakeholders are fully taken into account in the setting of
standards?
Mr. Danielson. Thank you, Chairman, for your question.
You know, energy efficiency is a huge opportunity, right? I
think the Secretary has been quoted as saying, It's not the low
hanging fruit, but the fruit, you know, sitting on the ground
rotting.'' So I consider energy efficiency and EERE considers
energy efficiency a high priority for the work that we're
doing.
I absolutely commit to working with you on this issue.
Fortunately the current--if confirmed. The current Deputy
Assistant Secretary of Energy Efficiency, Kathleen Hogan has
good ties to EPA. So I think that will allow us to make sure
that we coordinate in a strong way.
The Chairman. Very good.
Let me ask another question. The Energy Act we passed in
2007, the Energy Independence and Security Act of 2007,
authorizes the Department to award three prizes for more
efficient lights. The Department was able to award one of those
prizes by reprogramming funds. We, both Senator Murkowski and
I, were available to and participated in the awarding of that
prize.
But the Department has not yet requested any funds for the
other two prizes. I know that you can't commit the Department
to making any specific budget requests but would you be
willing, if confirmed, to work to see if you can't move ahead
with this part of the 2007 bill?
Mr. Danielson. If confirmed, I will be very happy to work
with you and this committee on that issue.
The Chairman. Alright.
I'll ask one other question of Mr. Woods. The Nuclear
Regulatory Commission announced a rather confusing decision
recently on the Department's application to construct a nuclear
waste repository. The decision neither allows the Department to
withdraw the application nor allows the Licensing Board to
continue working on it.
So that seems to leave the Department in a legal position
of being both statutorily and contractually obligated to
dispose of the Nation's nuclear waste, but having no plan to
meet that obligation other than to wait for the Blue Ribbon
Commission to come up with a plan. If confirmed, would you be
willing to take a more active role in helping to find a way for
the Department to meet its legal obligation under this law that
I've described?
Mr. Woods. Yes, sir. If confirmed as General Counsel I
believe it would be my job to ensure the Department complies
with its obligations under law. Thank you.
The Chairman. Very good.
Ms. Harris, let me just ask you. I recently wrote to
Secretary Chu about establishing a new, Small Business
Technical Assistance Program to provide support to small
business owners who face technical barriers to success.
Ms. Harris. Yes.
The Chairman. This would be modeled on the highly
successful program that NASA has. It would enable Department of
Energy laboratories and contractors to provide up to 40 hours
of technical expertise to help small businesses overcome
technological hurdles. Would you be willing to look into that
proposal if you're confirmed and see if that's something you
could support?
Ms. Harris. Absolutely, Chairman.
The Chairman. Alright. That's all I had.
Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman.
Mr. Woods, let me start with you. Earlier this year on the
committee, we had reported legislation on advanced vehicle
technologies. There was a little bit of a new wrinkle. Instead
of simply duplicating the Department's existing authorities,
which has been the traditional approach around here, we decided
to review everything on the books. We decided to repeal the
authorities that DOE would no longer need.
When we went through that process the Office of General
Counsel was really very helpful. But I think we recognize that
it was just a start. So my question to you is whether you will
commit to a full review of all of DOE's current authorizations
and to help us identify if there are any areas that are
duplicative and perhaps unnecessary?
Mr. Woods. Senator, yes. Thank you very much. I'm happy to
commit to work with you and your staff in your efforts. I think
it's a lot. We'll endeavor to try to ensure that there's not
unnecessary duplication of the statute.
Senator Murkowski. Good. Good. I appreciate that. As we
look to streamline the Department's authorities in other areas
we'll appreciate working with you, assuming that you are
confirmed, to do just that.
Mr. Woods. Thank you, Ma'am.
Senator Murkowski. Dr. Danielson, let me ask you the
question everyone is talking about, Solyndra. It's on the front
page of the newspapers seemingly everyday right now. It looks
like our first Federal loan guarantee is going to result in
some pretty tremendous losses at the expense of U.S. taxpayers.
Unfortunately we can't say that we weren't warned about
this. Last year there was a memo by Carol Browner and others
about the Loan Guarantee Program that suggested that the
guarantees were going to projects that perhaps really didn't
need them. As a result the Federal funds were accounting for
too large a proportion of their financing.
There's going to be a lot of Monday morning quarterbacking
going on here. But in reflection of those 2 events it appears
that the Stimulus loan guarantee program is being used to
support some companies that don't need support. Then at the
other end of the spectrum you have companies that won't succeed
even if we give that substantial Federal assistance.
So the real question is how do we find the middle because
right now I can tell you there's an awful lot of people that
are saying we need to get rid of the Loan Guarantee Program.
This is a case in point about how this simply doesn't work. The
question is how do we find that middle? How do we find those
projects that actually would help or benefit from a loan
guarantee?
Then I guess a bigger question is whether or not this is
actually an appropriate instrument for the government to use in
promoting innovative energy technologies?
Mr. Danielson. Thank you for your question, Ranking Member
Murkowski.
The President and Secretary Chu I believe nominated me for
the position at EERE because of my cutting edge, my background
in cutting edge R and D for my research at MIT and my
experience in very early stage venture capital which funds
those first few steps out of the gate for new technologies that
have great promise. If you look at EERE, the real focus of EERE
is all about funding cutting edge new technologies that can
lead to technical performance and cost performance that can
make them market competitive. Then let those technologies go
compete out on the market.
As nominee for EERE I don't have any direct purview over
the Loan Guarantee Program and my own personal expertise isn't
in the commercial side of finance. So I don't think I'm in a
position to directly address that issue.
Senator Murkowski. I think it is something that, from a
member's perspective, we need to be ensuring the wise and
prudent use of taxpayer dollars when they go out toward loan
guarantees whether it's for solar, whether it's for renewable
or whatever the initiative may be. This is something that we
need to get our arms around. Right now questions are being
legitimately asked about whether or not this is an appropriate
use and what the future of these loan guarantees truly may be.
I'm going to have some follow up for you. But before I do
let me just ask you, Ms. Harris, very quickly: You are very
familiar as one who has been involved with energy initiatives
and lots of different levels. You're very aware of the broad
range of new regulations that are facing our industries,
particularly some of these initiatives that are coming out of
the EPA.
We don't have the jurisdiction over the EPA here in this
committee, but we do oversee some of the agencies that are
responsible for ensuring the affordability and the reliability
of our energy supply. I have asked the FERC to do a full sum
assessment of what the cumulative impact of some of these EPA
regs will be on the reliability and the affordability of
energy. I have asked for that accounting.
What I would ask you today, if confirmed as the head of the
Office of Minority Economic Impact, can we count on you to
monitor the impacts of energy and pollution rules and to
provide the Secretary and other Administration officials and
even us here in Congress the full assessments of what we find?
Because I think in your capacity, you can be looking to the
impacts on our minorities where so many are in a position where
they are least able to afford higher utility bills, higher
costs of just living within their areas. So I'm asking you to
look to this cumulative impact and be available to report to
us.
Ms. Harris. Senator Murkowski, that is a very important
concern and issue. You can count on my support looking into
that.
Senator Murkowski. Thank you. I appreciate that.
Thank you, Mr. Chairman.
The Chairman. Senator Manchin.
Senator Manchin. Thank you, Mr. Chairman. Thank all of you
for appearing today.
Mr. Woods, we are proud that you're--that you have such
close ties and so much family still in West Virginia. I know
you know of our rich history of what we've done and energy we
produce for this country. We mine the coal that makes the still
that produces the manufacturing jobs that makes this country go
for many, many years and we want to continue to still help.
The Solyndra that my colleague, Senator Murkowski,
mentioned is very troublesome to us because it's very evident
and all the indicators are there that we, as a country, and
those in charge of trying to pick winners and losers by using
the taxpayer dollars. We don't think that you could ever make
that happen. We believe that there has to be a broad spectrum
as far as in our utility and also, as far as our energy
portfolio.
I would ask all three of you and I'll start with you, Mr.
Woods, do you believe energy independence is the most important
to our security and economic vitality of this country being
energy independent and using the resources we have.
Mr. Woods. Yes, sir. Personally I believe in the importance
of our energy independence.
Mr. Danielson--Dr. Danielson.
Mr. Danielson. Senator Manchin, thank you for the question.
I absolutely believe that energy independence is a key
priority that we need to have in our energy policy.
Senator Manchin. You believe that because of security or
economic vitality or both?
Mr. Danielson. Both.
Senator Manchin. OK.
Ms. Harris.
Ms. Harris. I am in full agreement. I feel that the small
business community will also be able to support us making sure
we have competitive, innovative technology to support that.
Senator Manchin. With that being said, you know, I know
that myself and my State coming from an energy producing State
and being a fossil fuel State which seems to be villianized
right now by many, many people around this country. I've said
all along that everyone should say a prayer for people that
produce the energy that give us the light that we have. With
that we're doing everything we possibly can, carbon
sequestration. We haven't, you know, basically it's done by the
private sector with a partnership with the public sector.
Going to the next generation as far as in coal fired plants
and utilizing that until we find the energy of the future. I
think, Dr. Danielson, as you're saying in renewables. We have
more wind and people don't realize this. In West Virginia we
have more wind power than most any State east of the
Mississippi. We have done everything.
We're using our hydro. We're using wind. We're using
biofuels. We're doing it all. But we know our staple, our
mainstay has been coal and now our natural gas with Marcellus.
It can be a game changer for the United States of America.
We just feel like we're hitting a brick wall. EPA has--the
regulatory agencies, you know. You'd like to think your
government is working with you not against you. We like to have
our government as our partner not our adversary.
I've got to be honest with you. People in my State and
people from any energy producing State believes that they're up
against a wall. They can't get past that.
You wonder why our unemployment is high. There's no,
basically, in the market right now, I don't know if you feel
the same as we feel. But I think the greatest things for job
creation would be some dependency understanding that the
regulatory agencies are working basically in a balance to find
how we can be less dependent on foreign oil, more dependent on
domestic energy whether it's renewables, whether it's using our
fossils in a cleaner fashion until we get there.
How will you all administer and try to help move that
agenda? I'll start with Mr. Woods, with you from the legal
counsel and try to give good, sound advice. I'm sure as a West
Virginian, common sense is something we value.
Mr. Woods. Thank you, Senator.
One thing that I said at the beginning was my grandfather
and great-grandfather were both coal miners. So I'm completely
appreciative of the jobs that those, and the opportunities that
those careers present. I know I couldn't have been here if not
for the availability of that work.
Sir, if I'm confirmed to be General Counsel I'm going to
try my best to provide strong leadership, provide the
Department with competent legal advice. My experience is in the
private sector and I hope that I bring that experience working
with companies to provide leadership of the Department while
ensuring that the Department complies with the applicable law.
Senator Manchin. Dr. Danielson, on the Solyndra, the
failure of Solyndra, half a billion dollars. Are--I mean, do
you advocate us trying to make a market when the market is not
there? The product can't compete in the marketplace?
Mr. Danielson. Thank you for your question.
Again, you know, the mission space of EERE is really
focused on engaging with Americas best innovators and really
supporting them to develop technologies that are going to go
out there and compete in the market on their own. So, in my
role at EERE, you know, if confirmed, I promise to do
everything we can to get those technologies out there that are
going to be cost effective--to develop those technologies that
are going to be cost effective and have superior performance to
the other products that are being used today.
Senator Manchin. But you can't guarantee they'll be
manufactured in the United States, right? That's what we're
finding out. I mean, we might be developing the technology but
it's not being manufactured here.
Mr. Danielson. Thank you for your question.
In terms of manufacturing one recent strong thrust at EERE
has been to try to develop new disruptive manufacturing process
technologies that would be able to be deployed in the United
States. Recently a program manager was brought in to run the
Industrial Technologies Program named Leo Christodoulou. We
brought him in. He's the lead manufacturing person at DARPA. So
that's a direction that going forward we'd like to move in and
would love to work with you on the issue of how we create
leadership in manufacturing technologies as well.
Senator Manchin. Thank you very much.
The Chairman. Senator Barrasso.
Senator Barrasso. Thank you very much, Mr. Chairman.
First I'd like to thank you and Ranking Member Murkowski
for their kind comments on the passing of our friend and
colleague, Senator Malcolm Wallop. On the front page of the
Casper newspaper today: ``Malcolm Wallop, 1933 to 2011: `A guy
you wanted on your side'.'' My wife, Bobbie, was on his staff
here in Washington and he was just a wonderful individual. We
will miss him and thank you very much to the both of you for
your kind comments.
Mr. Chairman, the nominations. I wanted to congratulate
each of you. It could not have come at a more critical time for
the Department of Energy. I think it's fair to say that the
Department now is facing a really critical time--a crisis--to
explain what role the Department played. I know you weren't
there to explain what role the Department played in the
collapse of the solar panel company, Solyndra, and how the
United States lost over $5 hundred million in loan money that
belonged to the taxpayers.
The nominees here today, if confirmed, are going to have a
tremendous responsibility, Mr. Chairman, to address this huge
failure and to prevent it from happening again. We don't yet
have all the facts. We don't know yet exactly what DOE
officials did or didn't do to prevent this bad bet.
An investigation has now been launched by the FBI and the
Treasury Department announced yesterday they're investigating.
We don't know yet what role, exact role, the White House played
in rushing reviewers to approve a decision on a centerpiece--
really the centerpiece--of President Obama's so-called stimulus
program.
Some folks have said mistakes were made. That seems to be
an understatement. This isn't me. This is on the front page of
the Washington Post yesterday. It says recently released emails
show that the White House was aggressively monitoring the
Energy Department's deliberations over the loan. We learned
that Department of Energy officials sat in on Solyndra board
meetings as observers. One presumed they observed the company
that was hurting toward bankruptcy.
Then yesterday's USA Today where they raised the question
that Senator Murkowski just raised: should Uncle Sam play
venture capitalist, consider Solyndra? What we have is the
Deputy Secretary of Energy writing that Solyndra was simply a
perfect storm of bad market conditions and other factors
outside of its control. I agree it was a perfect storm, but I
don't think we should be blaming China or the markets or a
previous Administration. The perfect storm appears to be a
Federal policy of rushed decisions and the demands of a pending
public relations campaign by the Administration who wanted
rapid answers so they could go and make press statements.
So we want to know what's next. We know that the
President's stimulus package allocated $6 billion for loans to
support green technology. Solyndra was the first.
There have been 17 loan guarantees, about $7.8 billion
given. The Department has commitments for an additional $10
billion. The Department of Energy has said it plans to close on
all of those pending loans before September 30th of this year.
We're talking 15 days from now. That's another $10 billion of
taxpayer money.
So the American people deserve more facts about how their
taxpayer dollars were wasted and how you, as the nominees, will
work to ensure it doesn't happen again. That's going to be the
questions that I want to get to. So I guess my question, Mr.
Woods, is, at yesterday's House hearing on the Department's
loan to Solyndra the role of the General Counsel was raised on
several occasions. It's my understanding that the Department
restructured the loans with Solyndra earlier this year.
When restructuring the loans the Department subordinated
the Federal Government's debt to private debt. According to
Jonathan Silver, the Executive Director of the Office of Loan
Programs, the General Counsel, and I know you weren't General
Counsel then, but the General Counsel reviewed the
restructuring of the Department's loan to Solyndra. But it's my
understanding that the Energy Policy Act of 2005 specifies that
a Federal obligation is not to be subordinated to private
financing.
So did the Administration violate the law when
restructuring the loan to Solyndra?
Mr. Woods. Sir, as you said--Thank you, Senator, thank you
very much for the question.
Sir, if I'm confirmed for this position as General Counsel,
I would accept it as my responsibility to provide correct,
adequate, legal counsel, properly interpreting the law and
ensuring that the loans that are granted by the Department are
issued in full compliance with the law.
Sir, I think that you're right that this is an area where
the Department will hopefully benefit from the leadership that
I would bring to this position. If confirmed I'd bring 11 years
of experience in the private sector representing institutions
and financial transactions. If confirmed I hope to bring that
both my care as a lawyer as well as my commercial expertise in
the private sector to these transactions.
Senator Barrasso. Thank you. Mr. Chairman, perhaps we can
get to a second round because I do have additional questions.
Just one final question. Do you believe that the law allows
private investors to get paid before taxpayers on loans
guaranteed by the government because you've had similar
positions in government? How's your understanding of how that
would work?
Mr. Woods. Sir, I'm sorry. I haven't reviewed that statute,
but I'd be more than happy to spend the time, if confirmed to
look into that question.
Senator Barrasso. Yes. I mean, this question has been all
over the papers for days now. I think the American people
really deserve an answer if the American people have to go
behind the private investors when their money is put up. So
thank you.
Mr. Woods. Thank you, sir.
Senator Barrasso. Thank you, Mr. Chairman.
The Chairman. Senator Shaheen.
Senator Shaheen. Thank you, Mr. Chairman. Thank you all
very much for being here today and for your willingness to
consider these very important appointments.
Because I've been working a lot this session on energy
efficiency most of my questions are for you, Dr. Danielson,
because as, should you be confirmed, and I hope you will be,
obviously your office will work on many of these issues. One of
the challenges that I think exists around energy efficiency
that perhaps is magnified by the way the Department of Energy
is structured is that energy efficiency is really a part of all
of our energy use. We need to think about how to incorporate it
into all of our energy use.
Because of the name of your office, Energy Efficiency and
Renewable Energy, there may be the impression that this is the
only place where we talk about energy efficiency within DOE. So
could you talk about how your agency will work with other
agencies within the Department of Energy or other offices
within the Department of Energy and how we can better
incorporate energy efficiency into everything we do around
energy?
Mr. Danielson. Thank you for your question, Senator
Shaheen.
At DOE over the last year or so as a member of the ARPA-E
team I've been involved with a number of--with a new concept
that we have now at the DOE called integrated technology teams.
These are teams that are getting everyone across from Office of
Science to EERE, ARPA-E, getting everyone together on a regular
basis to share best practices, talk about what they're doing,
make sure we're coordinating everything in a very productive
fashion.
I am not sure whether we have one for Energy Efficiency
yet. That is something that I would definitely create, if
confirmed.
Senator Shaheen. I look forward to getting a communication
from you as soon as that work task force has been created. So
you can let us know what it's doing.
One of the concerns that we're hearing from the energy
efficiency community and from industry, who are particularly
concerned about energy efficiency, is that there is a tug of
war going on about whether within DOE we're going to support
research and development or commercialization. I wonder if you
could talk about how you view the balance between those two
challenges for your office.
Mr. Danielson. Thank you, Senator, for your question.
I think there does need to be an awareness of
commercialization issues within the Office of EERE so that when
we fund R and D and we work with scientists and researchers
that we have a strong awareness of what are the product
attributes that these researchers should be moving toward.
Because researchers often will move in a direction of greatest
technical interest as opposed to one that might result in
techno-economic properties of a product that would result in
commercial adoption. So I believe we do need a balance of
knowledge within EERE on deep technical knowledge and on an
understanding of commercialization and how it works.
So I think a good example of one program, we have a suite
of great program managers who really understand this. In the
energy efficiency area that I know is of great interest to you,
Roland Risser, is running the building technologies program. He
has 31 years at PG and E, the largest utility in California. He
ran their energy efficiency programs and he's running the
buildings program. So, I think, he's an example of the kind of
leader we have within the Department who is able to merge those
2 communities, the R and D and the commercial communities.
Senator Shaheen. Thank you.
Ms. Harris, first of all let me say how impressive your
background is and I appreciated your willingness to share some
of your personal story about how you grew up. Everybody has an
impressive resume here. But I especially appreciated that.
Ms. Harris. Thank you.
Senator Shaheen. Can you talk about some of the particular
challenges that you see as you look at what minority businesses
are facing as they're trying to get into the energy area?
Ms. Harris. Thank you, first of all. Thank you very much.
You know, small businesses are the lifeline blood for the
country. The whole idea of making sure that we have
opportunities that come through this office, if I'm confirmed,
to be able to support those businesses. It's all about making
sure if you look at the Department of Energy, for example, is
second only to the Department of Defense in having the largest
number of government contracting--having a government contract
budget. So a substantial amount of that moneys will be supplied
to support small businesses.
So that's one area we would really focus on making sure we
connect that bridge or that conduit between this particular
office and with private sector and corporations in helping grow
the economy.
Senator Shaheen. Thank you.
Ms. Harris. Thank you.
Senator Shaheen. Thank you, Mr. Chairman.
The Chairman. Senator Sanders.
Senator Sanders. Thank you, Mr. Chairman. If Mr. Woods and
Ms. Harris will excuse me, I apologize, most of my questions
will also be for Dr. Danielson because energy efficiency and
sustainable energy are issues very, very important for the
State of Vermont.
I happen to believe A, that global warming is real.
B, that it is already causing very serious problems in the
United States and around the world in terms of severe weather
disturbances.
I think we have to move boldly and aggressively to
transform our energy system. I think energy efficiency
certainly is one way to go and sustainable energy is the other.
In the midst of that is the recent census report that just came
out indicates how middle class is collapsing and poverty is
increasing. We have lost millions of manufacturing jobs in
recent years. So I think we want to rebuild our manufacturing
sector.
One of the concerns that I have is that in recent years,
Dr. Danielson, China has put an enormous amount of money.
They've invested some $30 billion alone into solar financing
for its companies. In other words when they're attracting
American companies what they're saying is we're going to give
you 1 percent interest rate. We may build factories for you. We
may provide tax holidays for you.
Now how do we, at a time when the solar industry and solar
jobs in this country are exploding. We went from 46,000 to
93,000. You know, Mr. Chairman, there's been some certainly
negative problems within the solar industry.
We've heard some of them, but let's not forget in the last
year they've doubled. Solar jobs doubled from 46 to 93,000
between 2009 and 2010. Solar PV installations doubled as well
when we installed 878 megawatts of PV in 2010.
So the solar industry is exploding. But one of the concerns
that I have is with the huge subsidies that China is providing
to companies. How do we compete against that and create those
manufacturing jobs here?
Mr. Danielson. Thank you for your question, Senator
Sanders.
Going back to the role of EERE, when I, as formerly as a
venture capitalist and during my time at ARPA-E, I've crawled
through it feels like almost all the labs in the country. It's
phenomenal the kind of innovation you find. When you look at
these kinds of technologies that I think represent truly
disruptive technologies, these are the kind of technologies
that I think we're going to find are going to get manufactured
here in the United States.
I think--at ARPA-E I funded a technology to make solar
wafers 80 percent cheaper. That's real technology
differentiation. That's sustainable profit margin.
I think a couple of areas where I see--the visibility we
have at EERE is where we think solar prices can get down--
prices can get down where widespread unsubsidized economic
adoption will happen is in the solar area and in the battery
area.
Senator Sanders. Solar, I mean, as you know the price of
solar panels has just plummeted in recent years. I mean they've
really gone way, way down. But get back to this issue. We are
creating many, many solar jobs in America. But I'm worried
about the manufacturer of solar panels.
How do you compete against a country which is providing
massive subsidization for the solar industry in China? Do you
have any ideas on that?
Mr. Danielson. So as I discussed before one area that EERE
is really focusing on is developing completely game changing
new manufacturing technologies that have far superior
attributes to the kind of technologies that are being built up
in China right now.
Another element of this equation is demand for these
products in the United States. I've had the chance to tour and
spend quite a bit of time with a number of the companies that
have built battery factories in the Midwest. What has become
clear to me is just the way the auto industry works that if
you're going to build the plug in vehicle here, you're going to
build the battery here. The transportation costs are very high
and the just in time nature of the auto industry makes it so
that those are going to come together.
Senator Sanders. Thank you very much.
Mr. Chairman, you know, there is discussion about how the
government should not be in the business of picking winners and
losers. But I think everybody knows, of course, that's what we
do all the time. The question is whether we're smart or not.
Let me--Department of Energy. This is dated, when was this
dated? May 15, 2009. Secretary Chu announces $2.4 billion in
funding for carbon capture and storage projects. Mr. Manchin,
sounds to me like we're picking winners and losers.
Senate Republicans, we're building 100 new plants, nuclear
power plants as quickly as possible. We hope Democrats will
join us in that effort particularly now with the President's
call to action. Senate Minority Leader, Mitch McConnell, the
comment he said on the Senate Floor today. The President could
start by moving forward on the Nuclear Loan Guarantee program.
Sounds to me like we're picking winners and losers.
So my own point is I happen to believe wind, solar,
geothermal, biomass, have huge potential in transforming our
energy system, protecting our environment and creating jobs. So
let's not--let's end the nonsense about picking winners and
losers. That's what we're doing.
The issue is will we pick the smart winners. Will we pick
those industries that will protect the environment and create
jobs? That's the debate we should be having. Thank you.
The Chairman. Senator Udall.
Senator Udall. Thank you, Mr. Chairman. I just want to note
I think Senator Sanders made a very good point in the beginning
of his remarks about subsidies that the Chinese are putting in
place and we ought to fully investigate what's happening there.
So thank you, Senator Sanders.
Thank you to the panel for your willingness to serve the
country when confirmed.
Dr. Danielson, let me start with you, if I might. Because I
think you know several members of the House have sent a letter
recently questioning the value of the EERE programs. I don't
agree with that assessment. I'd point to the American Energy
Innovation Council Report that was released just this week by a
number of eminent business leaders including Bill Gates and
Norm Augustine about the critical role that our government
needs to play in clean energy technology development.
But I'd like you to respond to that letter and to the
debate we're having. Is there national value to EERE? What has
the office contributed to the Nation in the past? What will it
do under your leadership, if you are confirmed?
Mr. Danielson. Thank you for your question, Senator Udall.
It's a--first and foremost EERE is really there to focus on
developing, you know, working with universities, national labs
and private sector to develop a suite of technologies that are,
you know, that ultimately will compete in the market, in the
energy market. But that's going to require innovation. That's a
real focus at EERE.
Can I ask you to clarify your question a little further?
Senator Udall. Talk to me, and the committee, and the
Congress and country, about opportunities that you see for EERE
to build on its past leadership and its past successes. I mean,
you've already touched on some of that this morning, but I want
to give you an opportunity to fully share your vision.
Mr. Danielson. Right. Thank you very much. Thank you for
the clarification.
NREL, National Renewable Energy Lab in your own home State
was--played a critical role in the success of one of a great
American company in the Clean Energy area named First Solar,
which has developed a disruptive technology, a thin film
technology called Cadmium Telluride. That's the most valuable
solar company in the world, an eight billion dollar market
capitalization. NREL and EERE and NREL together played a
critical role at the early stages of helping them get their
technology up and running and then played a critical role in
helping them understand issues around materials availability.
In addition to potential toxicity issues of their product and
reports from NREL funded by EERE actually went into their early
sales meetings as I learned, recently, this week.
So First Solar is one great success. I'd say the batteries
program at EERE has had significant impact. The R and D down
there has had a significant impact in lowering battery cost
over the last at least 3 years from 2009 to current year.
Battery costs have gone down from $1,000 per kilowatt hour to
650. By 2015, if our R and D investments pan out, we think we
can get down to $300 per kilowatt hour. That's the point of
which a plug in hybrid vehicle actually becomes cost
competitive.
So those are a few of the areas where we've already made
impact. Going forward offshore wind is a big area, marine
hydrokinetic, geothermal and a number of other areas are areas
where we think that through significant R and D investments the
United States can become a world leader.
Senator Udall. In that context, do you think China is
investing in all these technologies just so that they can brag
about being green and feel good about being able to say they're
green or do you think there's a bigger strategy that they have
when it comes to their economic development and the potential
for profit?
Mr. Danielson. Thank you for this question.
The Chinese have rapidly growing energy demand. They're
using pretty much every technology you can think of to try to
meet that demand. China and India are going to be very rapidly
growing energy markets and they could be great opportunities
for American companies to be able to make and export products,
advanced energy products.
Senator Udall. So what I hear you saying implicitly is that
China is pursuing this policy because the job creation
potential, as well as the environmental benefits, as well as
their national security concerns, and now I'd editorialize.
Those are the very same reasons that I believe we need to be
investing fully in these areas. Understanding that we need an
all of the above strategy--there's no one silver bullet here.
There's silver buckshot, in my opinion. We need to be pursuing
all of these technologies.
Talk a little bit about--before my time expires, your
vision for providing leadership and oversight and stewardship
of the National Renewable Energy Lab which is based in
Colorado. I will confess I have a particular interest.
Mr. Danielson. Thank you for your question about NREL. The
National Renewable Energy Lab is EERE's national lab. It's a
jewel in the National Lab system. Tremendous talent there.
As I said before it has had a huge impact in the past. My
vision is to work very closely with NREL's Director Dan Arvizu
and with this committee to create a joint vision for NREL and
EERE together where we're sitting in the room together deciding
how we can use our resources to best effect and then executing
on that vision together.
Senator Udall. Excellent. I'm excited to hear that vision.
Mr. Chairman, thank you.
Ms. Harris, your story is inspiring. We look forward to
working with you.
Mr. Woods, you and I share the same alma mater, although I
don't think I could have been admitted at the time you did
because the standards were raised significantly.
[Laughter.]
Senator Udall. So congratulations and look forward to
working with you as well.
Thank you.
The Chairman. Senator Wyden.
Senator Wyden. Thank you, Mr. Chairman.
Dr. Woods--Dr. Danielson, Mr. Woods, I want to go at this
solar issue in a different way particularly because of the
ramifications from manufacturing in this country, American jobs
particularly in solar panels.
Roughly half the costs of a silicon solar cell is the cost
of the silicon wafer that is used to make it. Yet the
Department has refused to recognize the U.S. content of those
wafers in establishing standards for meeting the Buy American
provision included in the Recovery Act. Now Dr. Danielson, your
predecessor refused to look beyond the final assembly stages in
deciding whether a solar panel had U.S. content. That doesn't
make sense in the real world because of the global supply
chain.
Mr. Woods, it seems that the General Counsel's office went
along with this approach as well. So what I want to see this
morning from the two of you, Dr. Danielson and Mr. Woods, is a
commitment that the Department of Energy both on a policy basis
and a legal basis is going to take a more realistic look at
helping America energy equipment manufacturers compete no
matter where they are in the supply chain. So this is a
question about whether the Department will take a fresh look
and specifically at the question of all of the inputs from U.S.
manufacturing throughout the supply chain because I think if
that's done we'll be in a position to have solar manufacturing
in this country and not basically just get all the material
from China and end up with a installation business in the
United States and not a manufacturing business.
So, question. Will you take a fresh look at this?
Mr. Danielson. Thank you for your question, Senator Wyden.
Absolutely. Currently in the silicon solar value chain the U.S.
has a relatively strong position in polysilicon. But in terms
of wafers has a lower market share. Increasing that market
share with new technologies would be an absolute boon and I'd
love to look at this issue with you.
Senator Wyden. Mr. Woods.
Mr. Woods. Thank you very much for the question, Senator.
Senator Wyden. You're not going to be able to do it unless
you give him the legal green light I think.
[Laughter.]
Mr. Woods. Thank you, sir.
The Buy America provisions of the statute I think are
important. The policy purpose behind them as I understand is to
help protect and defend American industry and jobs. Sir, if I'm
confirmed I'll commit to looking at this issue and return the
Department--
Senator Wyden. The fresh eye on the global supply chain.
Those are the magical words.
Mr. Woods. I don't understand that issue, sir. But I'm
absolutely committed to looking at this issue with a fresh eye
as I get up to speed with all the Department's issues.
Senator Wyden. OK.
Dr. Danielson, obviously tough choices in the budget, the
renewable energy budget does seem to be trying to solve the
problem by cutting a number of the programs that are small and
I think are going to make a difference, water power and
hydrogen. One of the reasons I feel so strongly about this as
Chairman Bingaman, Senator Murkowski know we worked on the
alternative, you know, fuel vehicle issue. I'm concerned that
we not be in a position with these alternative fuel vehicles to
be putting all our eggs in one basket. I strongly support the
effort toward electric cars but I know one of the major
comments I got after the legislation was passed in this
committee is both domestic and international auto makers want
to make sure that the bill does allow for the development of
alternative vehicles particularly hydrogen vehicles.
Will you make sure, if confirmed, that your Renewable
Energy Program includes a balanced portfolio and will look
specifically at some of these technologies that seem to be
getting short shrift in the budget?
Mr. Danielson. Thank you for your question. In order to
achieve the President's goal of reducing oil imports by one-
third by 2025 we're going to need a portfolio of solutions. I
consider fuel cells and all the technologies in the EERE
portfolio to be part of that solution.
We see some of these as technologies that might get in--
that might reach cost parity and performance parity with
existing vehicles in the nearer term and some of these are a
little bit longer term investments. I will absolutely make sure
to have an appropriate balance in that portfolio, if confirmed.
Senator Wyden. One other quick question before my time
expires. I've come to the conclusion that we have special
opportunities in the area of energy storage. Chairman Bingaman
and I and other colleagues have worked in this area. Part of
this involves also the Finance Committee and some tax
incentives, but it's been brought to my attention that the
office that you're going to manage has refused to allow one
promising storage technology in the use of grid controlled
water heaters to be approved.
I'd like to hear as I wrap up what you're willing to do to
help develop that energy storage technology because I think we
understand what an important role they're going to play with
respect to intermittent, renewable generation.
Mr. Danielson. Thank you for that question. You know, water
heaters as a source of demand response is a very promising
technology. It could be very low cost. That's an interesting
place where it really sits at the intersection between the
Office of Electricity run by Patricia Hoffman and EERE, the
Office for which I've been nominated. If confirmed I promise
you that I will make sure that that technology doesn't fall
through the cracks.
Senator Wyden. If you're confirmed can you get back to me
within say 60 days particularly on the area of the technology,
storage technology, that the agency has refused to approve, the
grid controlled water heaters? Can you get back to me quickly
on that?
Mr. Danielson. Absolutely.
Senator Wyden. 60 days?
Mr. Danielson. Absolutely.
Senator Wyden. OK. Mr. Chairman, thank you.
The Chairman. Thank you. I did not have any questions in
the second round. Let me call on Senator Murkowski for her
questions.
Senator Murkowski. Thank you, Mr. Chairman.
A lot of discussion about jobs nowadays. The President has
made a key theme of his Administration of that, of green jobs
and there's a lot of discussion and debate as to what we're
actually creating. You talk to some and they say, well, we're
creating thousands of green jobs on a daily basis.
One of the stations this morning was reporting that of the
Stimulus dollars that were spent down from DOE, there's been
$19 billion of the $38 billion that was authorized in the
Stimulus. That $19 billion has created a total of 3,545 jobs.
You do the math on that and it comes down to $5 million,
$359,000 per job, over $5 million a job. It's almost
inconceivable. Whether that number is right or whether that
number is wrong this is something that we're all talking about
right now.
What it comes down to, I think from a discussion
perspective, is what is the priority here? Is the priority to
create green jobs just to say that we have created a green job
within the industry or is the priority to really provide for
lower cost energy because the rest of our economy relies on,
depends on our low cost energy?
Ms. Harris, this is going to certainly be an issue for you.
Sso I want to ask the question just from a 30,000 foot level.
Should our focus be on creating jobs in the energy sector
specific to green energy jobs creation or are we better served
by focusing on driving our costs down?
It goes back to the statement that I made in the opening
there that, you know, green jobs, in my opinion, should not
necessarily be the means to the end. What we need to be asking,
if in fact you're going to increase your cost of energy, is
have we really benefited America's families here? I think it
goes to the heart of what you will be dealing with, Dr.
Danielson. Is the priority here creating green energy jobs or
should the priority be focused on driving our energy costs
down?
Mr. Danielson. Thank you for your question, Ranking Member
Murkowski.
I believe that there's a strong interplay between
innovation and pushing innovation and making things. In 2
particular clean energy fields, solar power and in batteries
for electric vehicles, the Department has very aggressive R and
D programs that make us feel that we're going to get to
unsubsidized techno-economic parity with other energy sources
by the end of the decade. So we're committing the Sun Shot
Initiative is an initiative within the EERE that is committed
to getting to a dollar per watt installed in the field at which
point it would be six cent per kilowatt hour. So that
initiative is pushing R and D, pushing hard on new installation
technologies and actually helping work with permitting costs
which have actually become a significant part of the
installation there.
On the battery side we have the same situation where we
believe that by 2015 the technology will be at the point in
terms of cost and performance that it will be readily
economically adoptable without subsidies. So as we get to these
levels of performance and cost where unsubsidized adoption
becomes the economic thing to do we think that these areas are
going to skyrocket in terms of the size of these markets. We
also think it's important to have the interplay between the
manufacturing of these products and the innovation of these
products so that they can complement each other and to continue
to drive the cost down and the performance up.
Senator Murkowski. Let me ask you one last question very
quickly. This relates to a renewable energy source that in my
State is providing us with 25 percent of our renewable energy
and this is hydro. You have mentioned you've got great optimism
with marine hydrokinetic, geothermal, wind, solar, but you did
not mention hydro- electric generation which provides 7 percent
of our country's total electricity, two-thirds of it's
renewable power.
So as we seek to increase the contribution of renewables
where does hydro factor into your line of thinking?
Mr. Danielson. Thank you for your question, Ranking Member
Murkowski.
I believe that hydro, conventional hydro has a huge role to
play. If you--just looking at the analysis that EERE Water
Program has done. EERE believes that we can add another 100
gigawatts to the 70 gigawatts we have today by increasing
efficiency of existing turbines by taking dams that exist that
are not powered and also by increasing pumped hydro capacity
and some sustainable new development that we should be able to
double that amount in the next 20 years.
Senator Murkowski. We would like to work with you on that.
Mr. Danielson. Great.
Senator Murkowski. Thank you, Mr. Chairman.
The Chairman. Senator Manchin.
Senator Manchin. Thank you again, Chairman.
Dr. Danielson, I know you're getting an unfair portion of
these questions but you can tell how concerned that we are of
this proportionately shared money we're spending in different
directions. So with that being said, I hope that you're aware
of the National Energy Technology Laboratory in Morgantown,
West Virginia in your relationship. If you believe that you can
have a strong relationship they do some very unique things in
research capabilities. I would just like to know if you are
aware, if you've been working with them or if you have a
relationship with them.
Mr. Danielson. Thank you for your question, Senator
Manchin.
I know the Director Anthony Cugini personally, well. Just
visited them the other day. You know, NETL is a great lab.
In terms of the EERE mission as part of our, you know,
collaborative efforts between--across the Department, when I
was at ARPA-E I was involved with reviews that were performed
at NETL. The NETL staff in this, the area of energy storage
were phenomenally good.
Senator Manchin. Thank you.
Mr. Danielson. So I would look forward to--if confirmed I
would look forward to a continued engagement with the best and
brightest over at NETL.
Senator Manchin. Thank you. Switching back you mentioned
China and India as the merging countries with tremendous
appetite for energy. Where are they spending most of their
dollars right now in providing the energy? Where is that money
going and what type of energy are they producing right now to
provide for the growth and needs of their country and their
people?
Mr. Danielson. Thank you for that question. I don't have
the exact numbers in my mind right now. I'd be more than happy
to follow up with our DOE's Office of Policy and International
Affairs on that.
Mr. Danielson. But in general become aware of very large
initiatives in coal to liquids.
Very large efforts in clean coal.
Large efforts in advanced batteries for electrified
vehicles and solar power.
These are all areas that I've become aware of very strong--
--
Senator Manchin. Let me maybe help you a little bit with
that then because we've done a lot of research in this. If you
look at India and you look at China most of their dollars right
now for kilowatt power is coming from fossil because it's what
they have. We're not going to change that.
What we could do is change by proportionately putting money
into research of clean coal technology, of CO2
capturing and using the waste from CO2 as we did
with SO2. We're not proportionately putting the
money there because we're trying to pick winners and losers by
pushing it somewhere else. I'm a firm believer that we need to
produce or provide in the research that will find the fuel for
the future. But you've got to use what you have now and the
rest of the world is using it.
If we're truly going to be an innovator and creator of how
do we clean up this atmosphere and have a part with the
environment and the economy, it's by finding how/what the rest
of the world is using and figure out ways of maybe enhance them
to use it better with new technology. We're not doing it. We're
missing the boat there.
I can't figure out for the life of me. I mean, I applaud
the solar and wind and everything that we're doing. We're for
that.
But what we've got and what we know has got/brought us to
this. They say dance with who brung you. We know what got us to
the dance. Can't we make it better because China and India is
going in that direction whether you or I or anyone in America
wants them to do it or not.
It's what available for them. They're building coal fired
plants almost one a week. You're not going to stop them. So why
shouldn't we develop the technology?
You don't consider that renewables so that's not what
you're going is it?
Mr. Danielson. Yes, thank you for your comments and
question. It's clear that coal is--it's critical for our
Nation. You know, 50 percent of our power right now.
Senator Manchin. Right.
Mr. Danielson. We have vast reserves. China, India have
vast reserves.
Senator Manchin. But I don't hear any of you talking about
it how we can do it and use it better. I hear a little bit of a
nice little pat on the back every now and then. But basically
it's carrying the load.
Mr. Danielson. Yes. The nominee for the Office of Fossil
Energy, Chuck, Chuck McConnell and I have a great relationship.
Senator Manchin. Great.
Mr. Danielson. When I was in the private sector in a
venture capital firm I funded a CCS startup which is doing very
well. So I'm supportive of clean coal. But in my role in EERE I
would be focused on the clean energy and energy efficiency.
Senator Manchin. But one final--clean energy, one final
question to you. Do you believe proportionately we're spending
the amount of money with the energy that we're receiving from
the fossil to really find the new technology that we can
continue to use it until we find the fuel of the future? Are we
putting the same effort, the same resources as we are with
everything else trying to develop something that maybe the
market hasn't accepted as of yet or it's not competitive.
Do you believe that same effort is being put
proportionately?
Mr. Danielson. Thank you for your question. I can tell you
that the Office of Fossil Energy and EERE, if I'm confirmed,
are going to be very closely--
Senator Manchin. But do you believe--you've evaluated. Do
you believe the same amount of money, proportionately for what
we're receiving is being spent?
Mr. Danielson. I guess I can only comment that, you know,
under the EERE that the area that I'm being asked to really
cover, you know, I'm going to do absolutely everything I can to
make sure that we have our budget priorities right there and
spend dollars in very effective ways.
Senator Manchin. We'll talk later.
[Laughter.]
Mr. Danielson. I look forward to it.
The Chairman. Senator Barrasso.
Senator Barrasso. Thank you, Mr. Chairman.
I'd like to continue, if I could with Mr. Woods. Obviously
serious questions to be raised about political pressure the
White House exerted on the Office of Loan Programs to get the
Solyndra loan wrapped up. You know, in testimony before the
Energy Committee last February, actually of 2010, Secretary Chu
said that, with respect to President Obama's goal for stimulus
spending, ``We looked at the things where we know we can move
the money more quickly.''
Just yesterday the White House Press Secretary revealed
that a scheduled event for the President was creating pressure
for a decision. If confirmed what safeguards are you going to
put into place to protect the Department staff from the
political pressure of the White House?
Mr. Woods. Sir, in my role as General Counsel is confirmed
I think my job would be to ensure that all of these loans are
made in accordance with the law. I think that it's important
that loans be evaluated pursuant to and in accordance with
their technical and financial merit. That is the approach that
I'm familiar with from my years in the private sector.
As I come to this new position, if confirmed, I intend to
bring the same level of diligence to these transactions as I
did with my experience in the private sector, sir.
Senator Barrasso. Earlier all of you took an oath and
talked about coming freely to the committee. So I would ask, if
confirmed, will you report to this committee if and when you
believe or made aware that the Administration officials are
improperly trying to influence the decisionmaking of the DOE's
staff.
Mr. Woods. Sir, I look forward to working closely with the
members of this committee with respect to everything that you
have an interest in. I think that's an important part of our
relationship with the Members of the Congress. I absolutely
look forward to working with you and responding to any
questions that you have responsibly and quickly.
Senator Barrasso. Thank you.
Dr. Danielson, It's my understanding looking at your
biography, you co-founded a firm's clean energy investment
practice. Would you have invested $500 million of your client's
money looking at Solyndra?
Mr. Danielson. Thank you for your question, Senator
Barrasso.
I actually don't have any direct experience with Solyndra
as a company. So I wouldn't be able to make that retrospective
judgment right now.
Senator Barrasso. Look at the accountants. Others looked at
this and said this place is going to be bankrupt in 2 years.
They said that in 2009. They said probably by September 2011
and that day it went bankrupt--1,100 people out of work, the
taxpayers on the hook for $500 million.
When you try to make assessments of investments what role
does guaranteed loans from a government have to do with making
venture type investments?
Mr. Danielson. Thank you for your question. In my role at
General Catalyst Partners I was very focused on the earliest
stages of commercialization where it was really trolling the
labs and trying to find disruptive technologies and then trying
to see if those might be able to meet a market need sometime
down the road. So my personal expertise is more in that early
stage part of the investment cycle for these technologies.
Senator Barrasso. What about the role of having private
investors get paid before taxpayers on the loan guaranteed by
the government?
Mr. Danielson. Again, given my early stage finance
background and not the late stage of debt and equity finance
background I don't feel like I'm in a position to address that
direct question----
Senator Barrasso. It's kind of interesting because you're
being nominated for the whole country to be the Assistant
Secretary for Energy Efficiency and Renewable Energy. These are
key issues that we have to address as a Nation. Your
qualifications, your educational background is impeccable.
I'm just trying to figure out where we go. I follow Senator
Manchin in his thoughts and ideas. I met with Bill Gates in
this very room 2 days ago. We're very interested in energy and
using the technology and becoming more energy self sufficient.
We want to make energy as clean as we can, as fast as we can
and do it in ways that don't raise costs for American families.
So, you know, I'm asking specific questions. These are
questions that I'm hearing at home in Wyoming. I know Senator
Manchin is hearing them at home. We're all hearing them.
So, I mean, that's why I raise these issues.
It's also my understanding--this is for anyone, that the
Department has until September 30th to guarantee another $10
billion in loans. I don't know that the confirmation vote in
the Senate will be held between now and then. But in light of
the bankruptcy of Solyndra and the political pressure that the
White House appears to have exerted on the Department, do you
think it's appropriate to guarantee $10 billion more in loans
before September 30th?
Mr. Danielson. Is that addressed at me, Senator?
Senator Barrasso. Were you shaking your head no or were you
looking to see if someone else might----
Mr. Danielson. Is that addressed to me?
Senator Barrasso. Go right ahead. Then I can ask Mr. Woods.
Mr. Danielson. Thank you for the question, Senator
Barrasso.
If I am confirmed and I am in a position--if I am running
EERE at a relevant time in the timeframe you're talking about.
I would be doing everything I could to support any requests
that the Loan Guarantee Program gave the experts and the EERE
Program to give them advice.
Senator Barrasso. Mr. Woods.
It's a big dollar figure. It's 2 weeks away. We just saw
what happened with Solyndra where people in the government were
saying things are good, things are good. I think one person--
well, there were a couple of hiccups or a couple little speed
bumps--but people in government were saying everything is fine.
The American people know it's not. It seems it was a rushed
loan. Now they're looking at another $10 billion.
Mr. Woods. Right. Thank you, Senator.
If I'm confirmed before those decisions are made I will
look at the transactions that are before the Department and
ensure that my office has done the work necessary to make sure
that they've been done in compliance with the law.
Senator Barrasso. Thank you, Mr. Chairman.
The Chairman. Senator Murkowski, did you have anything
else?
Senator Murkowski. I just want to understand this a little
bit better. It's my understanding that within the Department of
Energy the Loan Guarantee Department is its own structure.
You've got a group of former investment bankers, the financial
guys, the wizards there that access the applicant's background
and do the vetting that Senator Barrasso has been talking about
and clearly failed in this one.
Mr. Woods or Dr. Danielson? Can either of you inform me
how, within the Department of Energy, the Loan Guarantee
Program intersects with the General Counsel's Office,
intersects with EERE, intersects with ARPA-E? My concern is we
have a colossal failure within the Department of Energy with
regards to this loan guarantee. It's calling into question
every loan guarantee that has been issued and quite clearly any
future loan guarantees that will go forward.
It would appear to me that we've got some structural issues
that we need to be dealing with. Can you educate me a little
bit further in terms of what you think needs to be done to make
sure that we are never in this situation again? I guess this is
from a process perspective.
Either one of you?
Mr. Woods. Thank you, Senator. I'd be happy to start us
off.
As I understand it there's an office within the Office of
Chief Counsel that works to support the Loan Guarantee Program,
a team of attorneys who review the transaction documents and
help to negotiate them to ensure that they are consistent with
the business deal that's been struck. That work to review to
ensure that the transactions are done in compliance with the
law. I don't believe the General Counsel's Office has anything
to do with, I'll call the underwriting process or analysis of
the financial merit of the transaction. I'm not sure which
office is responsible for that. But I think it is outside the
Office of General Counsel.
Senator Murkowski. Do you know, Dr. Danielson?
Mr. Danielson. Thank you for your question, Ranking Member
Murkowski.
In that I have not had experience with the Loan Guarantee
Program before and that it is not under the direct purview of
EERE, I'm not intimately familiar with their processes. But if
confirmed I would promise to you and to this committee that
anything that EERE could do to serve the Loan Guarantee Program
in its analysis would be offered up.
Senator Murkowski. It would seem to me that you've got to
have some kind of intersect or relationship with the Loan
Guarantee Office. They're not operating in a vacuum where
they're just kind of reviewing the financial paperwork. They
need to know from, I'm assuming, the experts within your
Department, if confirmed, or within ARPA-E that this company
has something that is even possible. You have to be the one
that says this is a good opportunity for us. This is one that
really does need that extra push and we can get it to stand on
its own. This is one worth taking the risk for.
Are you saying that you don't have that kind of
relationship within the Department?
Mr. Danielson. Thank you for your question.
No, I'm not saying that it doesn't exist. I'm saying I'm
just not aware of the detail of flow of the process. I would,
if confirmed, I would be more than happy to, either way, I'd be
more than happy to follow up with you on how that process, what
that process structure is today.
Senator Murkowski. I guess I'm less than assured by your
response. It has been my understanding that if you have
departments or divisions within the Department that are focused
on helping to build out some of this innovative technology,
that you would be working within the Department within those
available programs which are the Loan Guarantee Programs that
we set up through EPACT 2005, that there would be a real nexus
between what you're doing and what they're doing so that
everybody understands.
I'm hoping that the finance guys are not just checking the
boxes and saying, ``OK, this one meets the financial criteria''
without checking in with you to make sure that this is
something that we even need and/or want and vice versa. I'm
hoping that you're not sending up something that doesn't meet
the financial criteria, which apparently in this case was what
we saw with Solyndra. So I'm going to do a little more digging
in terms of how things are structured within DOE right now
because, right now, I don't have the level of confidence that I
want to have in ensuring the full faith and credit of what
we're offering up through the Department of Energy.
When we're putting taxpayer dollars at risk we want to know
for a fact that we've got systems that work.
Thank you, Mr. Chairman.
The Chairman. Thank you all very much for your testimony.
We appreciate your willingness to serve in the Administration.
We hope we can act on your nominations very soon.
That will conclude our hearing.
[Whereupon, at 11:12 a.m., the hearing was adjourned.]
APPENDIX
Responses to Additional Questions
----------
Responses of Gregory H. Woods to Questions From Senator Murkowski
Achieving the President's National Export Initiative goal for
expanding U.S. exports will substantially contribute to the domestic
economy in terms of employment, tax revenues and technological
innovation. Based on your previous experience with international
business issues while at Debevoise and Plimpton, you are familiar with
many of the competitive pressures that U.S. firms face in the
international marketplace. DOE's Office of the General Counsel will be
asked to promulgate regulations and develop policies that have direct
impact on the competitiveness of U.S. commercial nuclear suppliers in
the global market.
Question 1. Foreign nuclear firms typically have the full backing
of their national governments through direct investment and/or seamless
and extensive public-private partnerships that promote the expansion of
their national nuclear supply chain, including services. To date, U.S.
policies and programs related to civil nuclear exports have been a
patchwork of uncoordinated efforts and sometimes conflicting policies.
As the General Counsel at the Department of Energy, would you agree
that U.S. government policies should support the competitiveness of the
U.S. commercial nuclear industry in the global nuclear market?
Answer. Yes.
Question 2. U.S. suppliers of nuclear commodities and services have
repeatedly voiced frustration that the byzantine and expansive U.S.
nuclear export control system imposes major competitive disadvantages
on U.S. suppliers competing with state-owned international rivals. The
U.S. Department of Energy has jurisdiction over nuclear technology
exports under 10 CFR 810, which legal experts have found is more
restrictive, complex and time-consuming than that of foreign nuclear
supplier nations. Would you agree that this regulation should be
streamlined to focus exclusively on the transfer of technology that
would pose a significant security risk?
Answer. I understand that 10 CFR 810 implements the statutory
framework established in section 57 b. of the Atomic Energy Act (42
U.S.C. Sec. 2077). If confirmed, I would work to ensure that those
regulations function as efficiently as possible within the statutory
framework.
Question 2a. Delays in the licensing of exports can amount to a
significant commercial disadvantage for suppliers that have slower
regulators. DOE often takes over 1 year to process specific
authorizations for commercial nuclear transfers under 10 CFR 810. Would
you agree that these delays are unacceptable and that DOE should
undertake a thorough review of DOE's authorization process to improve
its efficiency?
Answer. I agree wholeheartedly that it is important to eliminate
unnecessary delay in this process and that the Department should strive
to improve its efficiency. If confirmed as General Counsel, I would
work closely with the Committee to ensure that these regulations
function as efficiently as possible.
The Department recently issued proposed amendments to Part 810, the
first comprehensive updating of the Department's export control
regulations since 1986 (76 Fed. Reg. 55278). I understand that many of
the proposed revisions to the rule respond to industry requests that
the existing rule be clarified and streamlined. If confirmed, I would
look forward to receiving comments on the proposed rule by the U.S.
nuclear industry and other interested parties, and would work to
finalize a revised Part 810 as soon as possible.
Question 3. In the wake of the recent Fukushima accident, certainty
in international nuclear liability arrangements is critical to allow
U.S. suppliers to enter key international markets. The Convention on
Supplementary Compensation (CSC) is the only international liability
regime that the U.S. is able to join and, as such, its entrance into
force is vital for U.S. suppliers. Would you agree that the U.S.
government should do more to bring the CSC into force?
a. As part of the implementing legislation for the CSC, the
Department of Energy was tasked with developing a Retrospective
Risk Pooling Program (RRPP) that allocate U.S. costs to
suppliers in the event that there was ever a call for damages
under the convention. What is your view on the importance of
reliable data to inform the development of rules that are both
rational and do not hinder the competitiveness of U.S.
suppliers?
b. Since the Convention is not in force, what is your view on
the wisdom of continuing the CSC RRPP rulemaking before
supporting data is collected and analyzed?
Answer. While I am not familiar with the specifics of the CSC and
the Department's rulemaking to develop a Retrospective Risk Pooling
Program, I understand that the U.S. Government supports widespread
adherence to the CSC and has been actively pursuing and encouraging
other nations to ratify the CSC and bring it into force. If confirmed
as the Department's General Counsel, I would support those continued
efforts by the U.S. Government.
I understand that the Department is acting under a statutory
mandate to issue a CSC RRPP rulemaking (42 U.S.C.
Sec. 17373(e)(2)(C)(i)). As a general matter, I do not believe that
rulemakings should be issued without development and analysis of a
complete factual record. If confirmed as General Counsel, I would work
to ensure that any rulemaking on this issue by the Department will have
a rational basis in fact and law, will be fair and equitable, and will
not unnecessarily hinder the competitiveness of U.S. nuclear suppliers
in the global nuclear market.
______
Responses of David T. Danielson to Questions From Senator Stabenow
Question 1. In its budget justification for fiscal year 2012, the
Department singled out funding for non-ARRA supported SuperTruck awards
for potential deferral or rescission. This program supports critical
research and development among commercial vehicles and any changes to
existing funding commitments would jeopardize important strides being
made to improve the fuel economy of these vehicles, especially in light
of the mandated standards on this sector of vehicles. Does EERE plan to
honor all the SuperTruck awards it has made from both ARRA and
discretionary fiscal year 2010 funding?
Answer. Yes, the Department plans to continue funding all
SuperTruck awards and the ARRA-supported SuperTruck awards are fully-
funded. SuperTruck projects incorporate multiple vehicle technologies
(e.g., hybridization, lightweighting, combustion, etc.), so several
Vehicles Technology Program (VTP) key activities will provide funding
to support this effort and there is some flexibility to change the
level of support by specific technology area, depending on availability
of funds.
Question 2. Enforcement actions, like the one in 2010 that banned
certain foreign manufacturers from using the ENERGY STAR label on
refrigerators, demonstrated DOE's commitment to protect the ENERGY STAR
and federal appliance standard programs.
However, recent reports suggest that problems persist. Just last
month, an investigation by Consumer Reports revealed certain foreign
manufactured refrigerators under-report energy use by more than 50% ,
with one foreign model potentially unable to meet even federal minimum
standards. What are your response to these troubling reports? How would
the Department respond under your guidance? How would you describe your
overall commitment to the enforcement of rules to ensure consumers are
given truthful information, and manufacturers compete by the same
rules?
Answer. Since DOE began enforcing energy efficiency standards,
manufacturers have certified compliance with the efficiency standards
for over 700,000 models of consumer products and commercial and
industrial equipment. DOE has set up a process for determining
compliance with both the ENERGY STAR specification and DOE Federal
energy conservation standards. Any ENERGY STAR model that is found to
be non-compliant with Federal energy conservation standards is subject
to enforcement actions by DOE and any model that is found to not meet
the ENERGY STAR specifications is referred to the Environmental
Protection Agency (EPA) for action.
During an investigation, DOE typically discusses the product with
the manufacturer, reviews manufacturer test data underlying certified
ratings, and undertakes additional testing, if needed. DOE initiates
enforcement investigations upon receiving complaints from interested
parties, including manufacturers, regarding potential non-compliant
products. For example, last year DOE investigated three refrigerator-
freezers claimed by Consumer Reports to fail either ENERGY STAR
requirements or federal standards. DOE determined, through testing in
accordance with federal test procedures, that all three models met both
the ENERGY STAR requirements and the federal standards.
This year, DOE adopted new regulations permitting the Department to
perform a single test on a product to determine whether further
investigation of the product is warranted. This ``assessment test'' is
a new investigatory tool to help the Department monitor compliance.
Prior to any penalty action, DOE conducts additional testing and
provides the manufacturer with notice of potential pending penalties.
The new regulations also permit DOE to test units obtained from retail
sources so as to ensure the units tested are representative of the
units a consumer would purchase.
Question 3. In DOE's budget request for FY 2012, what criteria did
the Department use to justify the recommended shift of funding from the
recently awarded Advanced Technology Powertrains for Light-Duty
Vehicles (ATP-LD) program, all of which were private sector/academic
partnerships that will increase fuel economy in light duty vehicles, in
favor of a computational modeling project that will take place at a
National Laboratory? What are the projected fuel economy gains of the
current ATP-LD projects versus the computational modeling project, and
over what time period will these fuel economy gains be achieved?
Answer. The goal for these projects is to develop technologies by
2015 that can increase the fuel economy of gasoline vehicles by 25% and
diesel vehicles by 40% when compared to a 2009 baseline gasoline
vehicle. These improvements will be achieved by increasing the
efficiency of the internal combustion engine.
The complexity of engine combustion and the revolutionary
approaches needed to further increase engine efficiency and allow for
increased use of alternative fuels require the Department to develop
simulation codes and computation platforms that are far more advanced
than those available today. Projects for the proposed large scale
computational simulations of combustion would be competitively
selected. Awardees would typically be required to provide a 50% cost
share and would most likely include teams consisting of industry,
national laboratories, and universities. The large scale computation
projects would provide the design tools for industry to improve engine
efficiencies by 30-50% at a third of the development time needed
currently. As a result of these projects, introduction of more fuel
efficient, environmentally compliant engines in our national fleet of
on-highway passenger and commercial vehicles could begin to take place
in 2017 and would enable potential national savings of over 5 million
barrels of oil per day, equivalent to $500 million per day, at today's
prices\1\.
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\1\ http://science.energy.gov//media/bes/pdf/reports/files/
PreSICE_rpt.pdf
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Responses of David T. Danielson to Questions From Senator Shaheen
The efficiency community and industry are particularly concerned
with DOE/EERE's support of US manufacturing moving forward,
particularly the Industrial Technologies Program (ITP). We have been
hearing more of a focus on R&D rather than commercialization. Both are
critical, but commercialization should not be left out nor its impact
for jobs ignored.
Question 1a. Will commercialization of existing technologies still
be a priority for you as Assistant Secretary?
Answer. Overcoming market barrier continues to be an important part
of EERE's ongoing work. ITP's focus on R&D is directed at the higher
Technology Readiness Levels (TRL 3-6) and not at basic research and
development (TRL 1-2). Attainment of the nation's long-term industrial
energy efficiency, economic competitiveness, and environmental
performance goals will require the kind of significant breakthroughs
achievable only through the innovation of new industrially-relevant and
scalable manufacturing processes and materials technologies. By
investing in later-stage scale-up and manufacturing technologies, ITP
promotes both the domestic manufacturing sector and job creation. This
effort is complementary to DOE's continued investment in technology
deployment and commercialization.
ITP is also aiding commercialization through Superior Energy
Performance (SEP)--a market-based, American National Standards
Institute-accredited certification program that provides industrial and
commercial facilities with a roadmap for continual improvement in
energy efficiency while boosting competitiveness. A key goal of SEP is
to foster a corporate culture that recognizes the importance of
improving energy efficiency, which, in turn, will accelerate
commercialization of existing energy efficiency technologies and best
practices.
Finally, ITP is evolving its industrial partnership program to
align it with President Obama's Better Buildings Challenge--a national
leadership initiative calling on chief executive officers, university
presidents, and state and local leaders to create American jobs through
energy efficiency. As the industrial component of the Better Buildings
Challenge, the Better Buildings, Better Plants initiative will provide
greater integration for ITP's commercialization efforts across the
industrial and commercial sectors. Participating companies will receive
access to technical assistance on how to develop an energy use
baseline, track progress against that baseline, identify energy saving
opportunities, and evaluate new technologies that could be purchased to
capture those opportunities.
Question 1b. How do you plan to engage industrial stakeholders
(i.e., trade associations and companies) in planning the ITP's
direction?
Answer. ITP considers stakeholder engagement to be an important
element of its planning processes and is in regular communication with
companies, trade associations, utilities, states, national labs and
academia. For example, meetings were recently held with the American
Council for an Energy-Efficient Economy (ACEEE) and the Alliance for
Materials and Manufacturing Excellence (AMMEX), an alliance
representing a range of companies and labor organizations in the
materials manufacturing sector--aluminum, chemicals, forest products,
glass metal casting and steel, along with several non-profit
stakeholders.
Over the past 18 months, ITP has worked with the United States
Energy Association on a major industry consultation effort to seek
stakeholder input on strategies for accelerating combined heat and
power (CHP) deployment in the United States. ITP has also conducted a
series of regional education workshops with the Industrial Energy
Consumers of America, bringing together manufacturers and utilities to
discuss market barriers to CHP implementation.
ITP is also participating in the first regional Advanced
Manufacturing Partnership outreach meeting, to be held by the
President's Council of Advisors on Science and Technology Working Group
on Advanced Manufacturing at the Georgia Institute of Technology on
October 14, 2011.\2\
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\2\ http://www.whitehouse.gov/administration/eop/ostp/pcast/amp/
meetings
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Question 1c. Under the severely constrained budgets that seem on
their way, do you support keeping a broad portfolio of both R&D and
deployment programs? Do you recognize the critical government role in
deployment as well as R&D?
Answer. ITP's efforts on both R&D and deployment are strategically
focused to maximize their respective impacts throughout the industrial
sector. ITP's R&D efforts are focused on developing and demonstrating
new, energy efficient manufacturing processes and materials
technologies at a convincing scale. In order for manufacturing
processes projects to become part of ITP's portfolio, they will need to
be broadly applicable, reduce energy intensity, and efficiently direct
energy to the task of forming the product. Likewise, in order for
materials technologies projects to become part of ITP's portfolio they
will need to focus on materials that will be pervasive; reduce life-
cycle energy requirements; and result in low-cost, high-performance
products.
Currently, ITP is soliciting applications for projects under its
Innovative Manufacturing Initiative (IMI)--a 3-year, cost shared R&D
funding opportunity to advance the development of transformational
manufacturing and materials technologies that could enable a doubling
of energy productivity in U.S. industry, revitalize existing
manufacturing industries, and support the development of new products
in existing and emerging industries. In order to achieve maximum
effectiveness in a constrained budget environment, ITP plans to co-
invest with other government programs at the Department of Energy and
the Department of Defense.
Specific to deployment, ITP continues to invest in and leverage a
suite of industrial energy efficiency tools, training, technical
assistance, and recognition to enhance the scope and speed of
improvement in energy management among manufacturers.
ITP's Industrial Assessment Centers (IACs)--a collection of 24
university-based programs throughout the country that provide
engineering students with extensive training in industrial processes,
energy assessment procedures, and energy management principles--address
energy efficiency improvements at small and medium-sized industrial and
manufacturing facilities. As a result, the IAC program helps local
companies and factories reduce waste, save money, and become more
economically competitive through energy efficiency improvements while
also helping students become the next generation of leaders in energy
efficiency.
Through Superior Energy Performance (SEP)--a market-based, American
National Standards Institute-accredited certification program--ITP
promotes standards as a means of providing industrial and commercial
facilities with a roadmap for continual improvement in energy
efficiency while boosting competitiveness.
Finally, ITP is evolving its industrial partnership program to
align it with President Obama's Better Buildings Challenge--a national
leadership initiative calling on chief executive officers, university
presidents, and state and local leaders to create American jobs through
energy efficiency. As the industrial component of the Better Buildings
Challenge, the Better Buildings, Better Plants initiative will provide
greater integration for ITP's commercialization and deployment efforts
across the industrial and commercial sectors.
Question 2. One of the areas that of interest to me is the
retrofitting of our existing building stock to improve their efficiency
and cut energy costs. Buildings account for 40% of our total energy use
and unlocking the potential that exists in retrofitting existing
buildings could make serious progress in addressing our energy
challenges.
A key barrier for building retrofits is access to capital, which is
why we included a provision in S. 1000 which would expand the existing
DOE Loan Guarantee Program to cover building retrofits and unlock
private capital to help finance these efficiency projects. DOE has yet
to take a position on this provision and I would appreciate if you
would get back to me in writing with your thoughts on this provision.
Answer. While the Administration does not yet have a position on
S.1000, it is my understanding that the Administration does believe
that federal financing may be an appropriate tool to leverage private
sector investment and stimulate energy efficient building retrofits, as
evidenced by the President's 2012 budget, which requests $105 million
to create a pilot program to provide loan guarantees to finance such
retrofits for Hospitals, Schools, and Universities. I support the
President's budget request and agree that improving the energy
efficiency of our existing building stock can help save energy and save
money for consumers and businesses.
Question 3. At the request of DOE and the Administration, several
stakeholders submitted the attached report last January detailing how
the existing DOE Loan Guarantee Program could be utilized to cover
retrofits of existing buildings without requiring new legislation. As
noted in the report, the term ``efficient end-use technologies''--a
phrase currently used in Section 1603, under the list of projects
eligible for loan guarantees--would allow for a pilot LG program for
building retrofits. Please see pp. 7-9 of ``Existing Authorities''
report.
a. Based on this interpretation of existing authority, does
DOE believes it has the current program authority for a
building retrofit loan guarantee pilot program. If not, why
not?
Answer. LPO is authorized to provide loan guarantees in support of
``efficient end-use energy technologies'' (Section 1703(b)(7)). LPO
believes that building retrofit projects intended to enhance energy
efficiency should generally qualify as ``efficient end-use energy
technologies''.
However, Section 1703 has an ``innovativeness'' requirement,
meaning that the Section 1703 program can only support projects using
energy efficiency technologies that are ``new or significantly
improved,'' as compared to commercial technologies currently in service
in the United States.
Thus, the 1703 program, as currently written, would not be an
option for projects seeking to conduct building retrofits using
conventional energy efficiency technologies. Additionally, a building
retrofit program would likely have to be administered and operated
differently from the existing Section 1703 program, potentially
creating administrative and operational challenges. For example, the
necessary financial due diligence conducted by the program would likely
be cost-prohibitive for a single-building retrofit project.
Question 3b. If DOE does not believe it has current 1603 program
authority, then why doesn't the Department more actively support the
loan guarantee language as set forth in S. 1000--which would clearly
give DOE the retrofit LG authority it thinks it currently lacks?
Answer. While the Administration does not yet have a position on
S.1000, it is my understanding the Administration does believe that
federal financing may be an appropriate tool to leverage private sector
investment and stimulate energy efficient building retrofits, as
evidenced by the President's 2012 budget, which requests $105 million
to create a pilot program to provide loan guarantees to finance such
retrofits for Hospitals, Schools, and Universities.
Question 4. With dramatically shrinking Federal facility budgets
and ambitious energy efficiency goals, will you be supportive of
greater use of energy savings performance contracts and other private
sector financing arrangements to upgrade federal facilities and reduce
the government's energy bill?
Answer. The use of energy savings performance contracts (ESPCs) and
other private sector financing arrangements is a key mechanism for
achieving our goals of upgrading federal facilities and reducing the
government's energy bill. The August 16, 2011 memo issued from OMB and
CEQ to Agency Senior Sustainability Officers, Supporting Energy and
Sustainability Goal Achievement Through Efficiency and Deployment of
Clean Energy Technology, confirms the Administration's support of the
increased Federal use of ESPCs. The Office of Energy Efficiency and
Renewable Energy's Federal Energy Management Program is actively
engaged in supporting Federal agencies use of ESPCs, utility energy
savings performance contracts, and other project funding mechanisms.
Question 5. I have noted on many occasions that energy efficiency
should be a part of a clean energy standard; however, it was notably
absent in the White House's original proposal. Since that time, White
House and DOE staff have told us that their position on efficiency is
still ``evolving'' and that a CES may be able to include efficiency
technologies, like combined heat and power and waste heat recovery. Do
you feel that ready-to-go energy efficiency technologies should be
included as part of any Clean Energy Standard proposal?
Answer. As envisioned by the President, a Clean Energy Standard
(CES) would be designed to be technology neutral. By defining clean
energy very broadly to include renewables, nuclear power, efficient
natural gas, and coal or natural gas with carbon capture and storage, a
CES is consistent with a very large number of possible technological
pathways, letting the market, rather than government, select the
technologies that can best meet the target. This is a flexible approach
that taps American ingenuity and innovation to enhance our energy
security. Energy efficiency has a central role to play in meeting our
clean energy goals, which is why the President has supported and
proposed a range of programs to promote greater energy efficiency in
America's homes, factories, and commercial buildings, including the
HOMESTAR program and the Better Buildings Initiative. As Congress
considers the President's CES proposal, if confirmed, I would be happy
to work with you and your colleagues to determine how to most
effectively incorporate energy efficiency into a CES.
Question 6. Affordable and reliable electricity supplies are vital
to the competitiveness of U.S. businesses and in particular to U.S.
manufacturers. We know that energy efficiency measures, such as
Combined Heat and Power, can effectively achieve both goals. Can you
describe the benefits that CHP offers to manufacturers and the size of
the opportunity to widely deploy CHP in this country?
Answer. Combined heat and power (CHP) benefits manufacturers in a
variety of ways. Most notably, CHP generates both the heat and power
needed for industrial processes on-site, offsetting the use of
electricity from the grid, and can be nearly twice as efficient as
conventional heat and power production. By making use of heat produced
during power generation on-site, CHP avoids losses from the generation
and transmission of energy off-site. CHP also offers flexibility in
fuel selection and can take advantage of both fossil fuels and locally-
sourced and renewable fuels. In these ways CHP reduces the risk of both
power disruptions and price uncertainty. Overall, in addition to
reducing carbon dioxide emissions and improving energy efficiency, CHP
helps to enhance energy reliability and security by diversifying our
generation portfolio and lessening stress on our transmission and
distribution system. CHP is also one of the most cost-effective options
to improve the competitive position of American industries and
manufacturers.
The opportunity to increase the deployment of CHP in the United
States is substantial. According to the 2008 report issued by the Oak
Ridge National Laboratory, CHP comprises 8.6% of US generating
capacity. Approximately 12 other countries have a higher share of their
power production from CHP\3\. In that same report, it was shown that,
if the US were to achieve 20% of its electric production capacity from
CHP, over five quadrillion British thermal units (BTUs) of fuel would
be saved, or nearly half of all the fuel consumed by U.S. households.
---------------------------------------------------------------------------
\3\ ``Combined Heat and Power: Effective Energy Solutions for a
Sustainable Future,'' ORNL, December 1, 2008, p. 22.
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Question 7. I am concerned that despite the sizable opportunity
presented by CHP, the technology has not been deployed as widely as
possible. A 2008 study by the Oak Ridge National Labs identified a
variety of challenges to wider CHP use, some technical and some
regulatory. What steps can EERE take to address these issues?
Answer. EERE is currently taking steps to resolve technical issues
inhibiting broader adoption of CHP through a competitively selected
research and development program, particularly for small (500 KW) to
mid-sized (5 MW) systems. In addition, through sponsorship of nine
regional Clean Energy Application Centers, EERE is working at the local
and state levels to identify and address the policy and regulatory
barriers that prevent CHP systems from being more widely adopted. This
latter activity is closely coordinated with activities of the DOE/EPA
State and Local Energy Efficiency Action Network. By convening
interested parties in relevant states through these activities, EERE is
helping to build a compelling case on the benefits of, and methods for
promoting, CHP adoption throughout industry.
Question 8. Through Clean Energy Application Centers, EERE provides
technical assistance to end-users seeking to install CHP, and to date
DOE has supported nearly 350 CHP projects. What is DOE's commitment to
these efforts and how do you think we can expand on them?
Answer. EERE currently sponsors nine Clean Energy Application
Centers--eight covering the 50 States and Puerto Rico, and one devoted
to increasing deployment of clean district heating systems. The Clean
Energy Application Centers were selected following a competitive
solicitation issued in 2009 and are under contract through 2013. EERE
intends to continue supporting Clean Energy Application Centers in
future fiscal years, and will also pursue performance reviews to
determine the extent to which expansion of the program is warranted.
Question 9. There is currently a tax deduction for energy efficient
commercial buildings at Section 179D of the Internal Revenue Code,
which was enacted as part of the Energy Policy Act of 2005. Many
believe that the 179D deduction has been underutilized since its
enactment because it is too difficult to meet some of the requirements.
Among other things, 179D directs the DOE to develop prescriptive
regulations for how the incentive can be best used for HVAC, window and
roof retrofits. Such regulations could provide much needed clarity on
how the 179D incentive could be better used in its current form. What
is the current status of DOE's efforts to draft these regulations and
when does the Department plan to issue them?
Answer. Statute 179d of the Internal Revenue Code directs the
Secretary of the Treasury to draft regulations on the application of a
building efficiency deduction to the tax code. The Department of Energy
has met with Treasury and IRS staff on multiple occasions to discuss
the current IRS regulation. If confirmed, I will continue to work on
this issue and will assist the Treasury on any changes they choose to
make in the current rule.
Responses of David T. Danielson to Questions From Senator Murkowski
Question 1. In August 2008, I understand you posted a note on the
MIT Energy Club's blog touting a number of new energy policies in
Massachusetts. You finished that post by suggesting what you believe
are the ideal elements of a national clean energy policy, including a
cap-and-trade system and mandates for clean fuels and electricity. Is
that still your vision of what the United States' energy policy should
look like? Has anything changed over the past three years, or are you
still pretty comfortable with that post?
Answer. As I did at the time of authoring the blog post to which
you refer, I continue to believe that a comprehensive and stable
national energy policy is critical to creating an environment in which
the U.S. private sector can rapidly develop and deploy advanced energy
technologies to reduce our oil imports, improve the nation's security,
create new American jobs, and reduce energy-related emissions. I am
supportive of the President's goals of reducing U.S. oil imports by
one-third by 2025; implementing the automobile efficiency standards he
has enacted that increase corporate average fuel economy to 35.5 mpg in
2016 and 54.5 mpg by 2025; putting 1 million plug-in vehicles on the
road by 2015; decreasing energy usage in commercial buildings by 20%;
and enacting his proposed Clean Energy Standard, which would aim to
increase the amount of clean electricity on the U.S. grid to 80% by
2035 and would include renewables, nuclear, coal with carbon capture
and storage, and efficient natural gas.
Question 2. High oil prices are one of the reasons our economy is
slipping back towards a double-dip recession. Can you describe your
views on how we can reduce those prices? Do you believe supply matters?
Would it be economically beneficial for our nation to tap into more of
its abundant natural resources, in place like Alaska and offshore?
Answer. On March 30, 2011, President Obama announced a
comprehensive energy plan to reduce the amount of oil we consume as a
Nation in his ``Blueprint for a Secure Energy Future.'' The Blueprint
includes the goal of reducing our oil imports by one-third by 2025
through reducing our oil consumption by improving the fuel efficiency
of our cars and trucks, by switching to alternate fuels, and by
producing more domestic oil. I support the President's plan and believe
it will both reduce our dependence on foreign sources of oil and put
downwards pressure on oil prices by reducing our oil demand.
An important part of President Obama's energy plan is to promote
oil development in selected areas of Alaska and certain offshore areas
in the continental United States. In Alaska, the Federal government has
already initiated leasing and development of selected lands offshore
while leaving other lands off-limits for development due to
environmental sensitivity. To ensure that development in Alaska fully
considers all points of view on development the President issued an
Executive Order on July 12, 2011 creating an Interagency Working Group
on coordination of domestic energy development and permitting in
Alaska. In this order, the President stated that, ``Interagency
coordination is important for the safe, responsible, and efficient
development of oil and natural gas resources in Alaska, both onshore
and on the Alaska Outer Continental Shelf (OCS), while protecting human
health and the environment, as well as indigenous populations.
Question 3. You came to the federal government from the world of
venture capitalism, and for the past several years, you've been at
ARPA-E. Do you think the federal government's support policies for
clean energy are appropriately oriented? What would you do to improve
these policies?
Answer. The government plays a key role in supporting domestic
clean energy industries that can out-innovate and out-compete the
industries of any country in the world. EERE works hard to ensure that
the projects it undertakes are in the areas of greatest interest to
U.S. businesses and insists that industry participate with increasing
levels of cost share as basic concepts approach a point where
proprietary products emerge. But the industry has been clear that in
order to compete with determined foreign competitors who receive strong
financial support from their governments, they need the U.S. government
to help them in key areas like advanced research, regulations that
encourage innovative solutions, and, in some cases, early stage
financing for first-of-a-kind production. Nearly all the key
technologies underlying today's clean energy equipment are the direct
result of federal research support--including EERE research--made over
the past several decades.
Well-crafted federal programs are essential to spurring private
innovation and investment, so EERE measures success by whether its work
translates into a successful U.S. business opportunity--when a company
can take a concept developed with EERE funding and make it a commercial
success.
Question 4. Earlier this week, the American Energy Innovation
Council released a new report suggesting a number of reforms for the
Department of Energy. One is that ARPA-E should be expanded. Do you
agree that ARPA-E should play a larger role in the Department's future?
What do you believe that role should encompass?
Answer. Having been a Program Director at ARPA-E since its creation
in April 2009, I am a true believer in its potential to develop game-
changing new energy technology pathways that could dramatically lower
U.S. oil imports, increase our energy security, create large numbers of
U.S. jobs, and decrease energy related emissions. I believe both ARPA-E
and the Office of Energy Efficiency and Renewable Energy (EERE) will
and should play a large role in the Department's future and I believe
that ARPA-E and EERE play highly synergistic and complimentary roles
within the Department of Energy. ARPA-E's role at the Department of
Energy is to explore and validate completely new high-risk energy
technology learning curves that have a high probability of failure, but
that if successful could leapfrog the technologies that are on today's
learning curves. The role of the EERE is to identify the most promising
new technologies that emerge from ARPA-E and other sources of U.S.
energy science and technology innovation and, in partnership with the
best and the brightest from the U.S. private sector, national
laboratories, and U.S. universities, provide the support required to
rapidly drive these advanced new energy technologies to the performance
and unsubsidized cost levels required for widespread commercial
adoption.
Question 5. As you know, we have a Super Committee that's been
tasked with reducing federal deficits by $1.5 trillion over the next 10
years. Just about every option appears to be on the table. Within our
jurisdiction, we have significant opportunities for revenues from new
resource production, but we may also see EERE and other program offices
returned to pre-stimulus funding levels. Do you have any comment on
that possibility? If EERE's budget is reduced, what do you think will
be most important for it to focus on?
Answer. The President's budget request includes funding levels for
EERE programs that would provide the resources to help meet our
nation's energy goals, while growing our economy and keeping America
competitive in the 21st century. Recognizing the need to exercise
budget restraint, the President rebalanced investments in the FY12
request to reflect a very clear and deliberate investment in Department
of Energy programs with the most direct impact on meeting our nation's
energy goals.
Question 6. As a program director at ARPA-E, you have significant
experience with energy storage technologies, which are widely seen as
critical to boosting the use of renewable energy. Please describe how
you believe the federal government can best promote the development and
use of energy storage technologies.
Answer. Energy storage technologies are indeed critical to boosting
the use of renewable energy. They will help increase the penetration of
renewable energy on the grid and enhance existing electric system
assets, increasing the reliability of electricity transmission and
distribution. To minimize the unreliability associated with the
intermittent nature of certain forms of renewable energy (e.g., solar
and wind), energy storage will address three critical functions:
regulation, ramping/load following, and bulk energy management.
In order to respond aggressively to meet the pressing future needs
for energy storage, DOE activities are being coordinated by an energy-
storage working group consisting of senior leadership and technology
experts from all relevant programs--including the Offices of Science/
Basic Energy Science, Energy Efficiency and Renewable Energy (EERE),
the Advanced Research Projects Agency--Energy (ARPA-E), Electricity
Delivery and Energy Reliability, as well as both the Offices of the
Under Secretaries for Energy and for Science.
The DOE approach is to accelerate research and demonstration to
minimize inefficiencies, and to anticipate industry needs. DOE has
outlined a number of specific short-term and long-term actions that
should be undertaken to meet long-term energy-storage targets.
Short-term actions lasting five years or less include advanced
research and development of alternative materials for energy storage
devices, setting standards and metrics (including analyzing
requirements related to frequency response times), simulation/modeling
(including projecting and assessing the impact on grid performance),
demonstrations, and deployment facilitations.
Long-term actions (greater than five years) involve both actions in
support of innovation as well as deployment. Innovation-focused actions
include fundamental research into new materials, design of more
effective storage technologies, research on self-balancing battery
chemistries, and other advanced technologies. Long-term actions could
include cost-shared large-scale deployment projects.
Working in collaboration with other stakeholders, DOE can support
its important energy storage objectives and advance the nation's use of
energy storage to derive the associated benefits--including advancing
science and innovation, increasing the use of clean secure energy
sources, enhancing economic prosperity, and reducing greenhouse gas
emissions.
Question 7. One of the largest challenges to the deployment of
electric vehicles is that we need batteries that are both far less
costly and far more efficient. Some believe that lithium ion batteries
can meet both of those goals, but quite a few others don't believe
that's possible. Can you comment on your experiences with battery
technologies, what you believe will be necessary for electric vehicles
to succeed, and the role you believe the federal government should play
in this area?
Answer. The Department of Energy (DOE) has a long and successful
track record of battery technology development. DOE-developed battery
technology is in all major electric drive vehicles on the road today.
Further R&D is needed, however. Current state-of-the-art lithium-
ion batteries are adequate for initial product launches, but we must
continue to improve battery performance and drive down costs to enable
future commercial competitiveness of electric vehicles without consumer
tax credits. A rich variety of new battery materials are currently
being developed that will provide substantial improvement in the energy
density and cost of lithium-ion batteries, and the electric vehicle
market will likely be dominated by lithium-ion batteries for at least
the next decade. However, broader market acceptance may require further
improvements in battery technology. Thus, DOE is researching new
battery concepts (such as lithium-air or lithium/sulfur batteries).
Global competition in advanced battery development is intense, and
battery technology is evolving rapidly. Strong Federal support for R&D
is needed to ensure that the U.S. maintains technology leadership. DOE
supports a broad portfolio of electric drive vehicle battery R&D that
spans basic research to applied development. The Office of Science/
Basic Energy Science programsupports fundamental research on enabling
materials through its Energy Frontiers Research Centers. The Advanced
Research Projects Agency--Energy (ARPA-E) conducts transformational
research on revolutionary, ``game-changing'' energy storage
technologies. EERE battery R&D is focused on applied development and
demonstration of advanced batteries to enable a large market
penetration of electric drive vehicles. Finally, the Department
envisions that an Energy Storage and Battery Hub it plans to establish
in FY 2012 would complement these existing programs, integrating
multiple disciplines in a single effort that could help speed the
development of next generation energy storage technologies.
Question 8. Our committee staff has heard from several Energy Star
stakeholders about the changing direction of that program. As you know,
Energy Star is a well-regarded, voluntary program and a brand that many
consumers look for when choosing home appliances and electronics. Will
you work with the stakeholders to address any concerns they may have
about the changing nature of the Energy Star?
Answer. DOE is the technical lead for the ENERGY STAR program
through its development of product test procedures and support of the
verification testing program. DOE remains committed to work with the
Environmental Protection Agency (EPA) and stakeholders on creating and
updating ENERGY STAR test procedures that are reflective of innovations
in the market place and address manufacturers concerns with test
procedures. As an example, DOE and EPA are working closely with the
Association of Home Appliance Manufacturers (AHAM) and major
refrigerator manufacturers in the development of test procedures to
support Smart Grid capability in ENERGY STAR refrigerators.
Question 9. Alaska that has the potential, according to the
Electric Power Research Institute, to generate 1,250 terrawatts of
energy from tidal and wave energy--also known as marine hydrokinetics.
As a Senator from Alaska, I'm extremely interested in making sure that
some of our research dollars are allocated to this part of the water
power industry to ensure that it not only survives, but thrives in the
future. I notice that while you were at General Catalyst Partners you
seemed more involved in wind, solar and biomass projects. What are your
views about the future of marine hydrokinetics and what would you like
DOE to do, if anything, to advance these technologies in the future?
a. I have legislation pending that would have DOE take over
verification of new marine hydrokinetic devices and provide
more robust funding for demonstration projects. What is your
view about my legislation, S. 630? More generally, what do you
see as the proper role, if any, for DOE and Congress to advance
marine hydrokinetic technology? What can we do to help the
industry get through permitting hassles and to pick up the pace
of getting projects into the water nationwide?
Answer. As you know, Steve Chalk, EERE's Deputy Assistant Secretary
for Renewable Energy, testified before your Committee on March 31,
2011, ``If funding is realized under S. 630, development of MHK [marine
and hydrokinetic] technologies would be accelerated, speeding their
transformation from promising but fledgling technologies to
commercially viable, clean, renewable energy sources.'' S. 630 would
accelerate the growth of the MHK industry through additional federal
aid, and expand the scope and scale of DOE's MHK activities. The
additional funding authorized by S. 630 would represent a significant
increase in DOE's program for MHK technologies, and is significantly
higher than either the FY 2012 Budget Request of $18 million or the FY
2010 Budget of $37 million. The President's FY 2012 budget represents
DOE's priorities for applied R&D in energy efficiency and renewable
energy technologies.
DOE is currently working to support the design, development and
testing of a variety of MHK systems, identifying key cost drivers and
performance characteristics, and investing in technology improvement
opportunities. DOE leverages its extensive expertise in technology
development to identify and fund research in areas where industry
currently lacks either the capabilities or financial resources. DOE is
very optimistic that it can play a major role in helping industry
commercialize this technology so it can make an impact in providing
affordable energy options for Alaska and other regions of the country.
To address the current challenges of siting and permitting projects
in U.S. waters, DOE organizes an ad-hoc interagency working group for
offshore renewable energy, under the Interagency Working Group on Ocean
Partnerships (IWG-OP), chartered by the Joint Subcommittee on Ocean
Science and Technology. Participants, which include NOAA, DOI's Bureau
of Ocean Energy Management, FERC, Navy, Coast Guard, EPA, Army Corps of
Engineers, and Fish and Wildlife Service, will continue ongoing
information sharing activities, pursue opportunities for interagency
research and development funding, and leverage support through the
National Oceanographic Partnership Program. Through Broad Area
Announcements under the National Oceanographic Partnership Program, DOE
has also co-funded research projects to develop environmental protocols
and monitoring strategies to support ocean renewable energy. Finally,
DOE supports MHK siting and market acceleration activities through
interagency MOUs. For example, in 2010 DOE and the Department of
Interior's Bureau of Ocean Energy signed an MOU to spur deployment of
offshore renewable energy projects, including those for wave energy. In
January 2011, DOE and NOAA signed an MOU to facilitate collaborative
work regarding modeling and forecasting for weather dependent
renewables.
Question 10. Geothermal is also a technology that I think holds
real promise to provide clean energy for the nation. What is your view
about what Congress and the Administration can do to further
geothermal's development? Are our current efforts sufficient, or is
there more that we should be doing?
Answer. To further the development of geothermal energy,
technologies must be developed that (1) reduce the cost and risk of
identifying and characterizing undiscovered hydrothermal resources, and
(2) enable the economical and sustainable extraction of heat from
enhanced geothermal systems. The Department of Energy's research,
development and demonstration efforts are focused on advanced
exploration technologies and reservoir creation tools that address
these two needs. Existing legislative authorizations, in combination
with the Administration's FY 2012 budget request for Geothermal
Technologies and loan guarantees, would likely be sufficient to advance
and commercialize emerging geothermal energy technologies. With reduced
risk and cost, it is also likely that the private sector would be more
willing to provide financing at affordable rates--leading to an
expansion of the geothermal industry.
Question 11. Back in 2007, in the Energy Independence and Security
Act, we approved a program for renewable energy deployment grants to
help renewable projects get `over the hump', but the Department has
never proposed any funding to implement the grants. What is your
philosophical view on this? Is appropriate for the federal government
to ever make grants available to help cover capital costs of a host of
renewable technologies, especially in areas where electric rates are
far above the national average? In Alaska, for example, there are towns
where people are paying more than $1 a kilowatt for diesel-fired
generation. Don't we have some responsibility to help reduce those
costs, which are about 10 times more than the average American pays for
power?
Answer. Section 803, titled ``Renewable Energy Deployment,'' of the
Energy Independence and Security Act (EISA) allows 50:50 cost share of
renewable energy construction grants. To date, the Department has not
requested funding for Section 803. Many of the incentives to
commercialize new technologies exist within DOE but outside of EERE,
for example in the Loan Guarantee Program. The Department also works
closely with other government agencies, such as the Internal Revenue
Service and the Department of the Treasury to support commercialization
via various tax policies.
However, R&D of innovative technologies is only effective if the
market knows those technologies exist. Accordingly, under the Recovery
Act, the Department made very large investments in renewable energy
deployment on a 50:50 cost share basis through the State Energy Program
and Energy Efficiency and Conservation Block Grant program. It is
believed that these renewable energy projects will be effective in
demonstrating economic feasibility and in laying the groundwork for
States and communities to expand deployment.
Section 625 of EISA, titled ``High Cost Geothermal Grant Program,''
authorizes DOE to conduct studies and demonstrations in regions with
electricity costs in excess of 150% of the U.S. average. To date, the
Department has not requested appropriations specifically for Section
625. However, in a recent Recovery Act competitive solicitation, we
identified this authority as a special policy consideration in
selecting projects. In future geothermal solicitations, DOE intends on
utilizing this policy as a way to help people from regions with much
higher energy costs than the rest of the Nation.
Over the last two years, the DOE has sponsored Brian Hirsch, a
renewable energy expert at the National Renewable Energy Laboratory, to
assist the State of Alaska in achieving its goal of 50% renewable
energy generation by 2025. Mr. Hirsch has initiated studies in biomass
utilization, district heating, wind energy and marine and hydrokinetic
devices to provide advice to many Alaskan organizations and technical
assistance to many remote tribes. If appropriations allow, DOE plans to
continue this vital support to Alaska in bringing more affordable
energy options to its citizens.
Question 12. Underground coal gasification has been pursued for
nearly a century around the world and produces syngas that can be used
in everything from power plants to stove-tops. Is the Department of
Energy pursuing the deployment of underground coal gasification
technologies, in addition to the more traditional gasification work of
the agency? If not, should the Department be pursuing this technology
more aggressively going forward?
Answer. I understand that DOE's Office of Fossil Energy (FE) is
working to develop certain technologies, such as syngas cleaning, that
will also be applicable to syngas from underground gasification (UG)
systems. However, the Department of Energy is not currently pursuing an
underground coal gasification technologies program. The Department
continues to monitor national and international UG developments. The
Department is committed to upholding the President's goals to expand
America's innovative competitive edge through strategic investments in
our Nation's clean energy research development and demonstrations
(RD&D). While every Office within the Department has had to make
difficult funding decisions in the current fiscal environment, overall
the Department continues to invest in 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 time frame needed
for deployment.
______
Responses of LaDoris G. Harris to Questions From Senator Murkowski
Question 1. You have a wealth of experience at various companies
throughout a good portion of the energy spectrum. In your new position,
you'll be focused on the economic impacts of energy prices,
regulations, and other federal policies. Generally, can you describe
whether you think low-cost energy should be a priority for our nation?
Where would you rank its importance compared to other goals, such as
making our energy supply cleaner?
Answer. Access to clean, affordable, secure, and reliable energy
has been a cornerstone of America's economic growth. Affordable energy
supports both quality of life and productivity across the economy and
is critical to maintaining manufacturing competitiveness in the United
States. In addition, increases in energy costs can have a
disproportionate impact on lower-income families. However, I do not
believe there should be a tradeoff between low-cost energy and clean
energy. President Obama and Secretary Chu have made the development of
low-cost clean energy a priority at the Department of Energy and I am
fully supportive of these programs.
Question 2. Back in 2005 Congress authorized grant aid to Indian
tribes and Alaska Native corporations to be provided by the Office of
Indian Energy. The Department has made some grants, but the assistance
for Native energy projects, both fossil fuel development and
renewables, has been sparse and uneven. I know you will say that is the
result of Congress not providing larger appropriations, but I also
don't remember the Department in its budget submission ever seeking
significant sums for the grants. They were authorized at $20 million a
year through 2016, but my memory is that DOE has never sought more than
about $6 million for the program. What can you do to advocate for more
assistance for Native energy project development on Native lands?
Answer. The Office of Indian Energy (IE) is the Department's lead
on implementation of the 2005 Energy Policy Act. If I am confirmed as
the Director of the Office of Minority Economic Impact, I will partner
with IE on tribal energy development and help build capacity in Indian
Country via small business supported contracts. One of the core
missions of the Office I will lead, if confirmed, is to be a
Department-wide resource to support other program offices' outreach to
underrepresented communities and to make these communities aware of
opportunities that exist within the DOE. Additionally, if confirmed, I
will use my experience in corporate America to ensure that the Office I
will lead is actively engaged with other Departmental offices,
including IE, to help increase the technical expertise that is
available to Indian Country to aid in energy development. For example,
the Office of Minority Economic Impact participates in DOE's Tribal
Steering Committee, which regularly meets to discuss how the Department
can better serve Tribal and Alaskan Native communities, and is an
active participant in the Interagency Working Group on Indian Affairs
which is intended to facilitate the collaboration of Federal agencies
as they work on cross-cutting issues such as natural resource
management and energy development.
a. Follow-Up: Title 5 of EPACT 05 also created a Department
Indian Energy Loan program to provide loans of up to $2 billion
for projects on Native/tribal lands. I am unaware of the
Department ever granting a loan to a reservation or Native
corporation over the past six years. What is your view as to
the importance of the loan program to aid minority development
of energy projects?
Answer. The Office of Indian Energy (IE) administers the Indian
Energy Loan program established in Title 5 of EPACT 05. If I am
confirmed as the Director of the Office of Minority Economic Impact, I
will work closely with IE to support its implementation of this
program.
Question 3. Given the amount of energy that lies on tribal lands,
notably coal in the American west and Alaska, but also hydrocarbons and
other minerals, shouldn't we be doing more to help tribal and
corporations develop their coal deposits in an environmentally safe
manner, either through underground coal gasification that largely
sequesters carbon underground, or by providing aid for coal-to-liquid
plants with carbon sequestration that will permit the coal to be
utilized profitably, while meeting the Administration's desires for
carbon emission reductions? I know there is an underground coal
gasification project being proposed on Native lands outside of
Anchorage right now, but am unaware of any DOE program to help it
proceed. What are your views on whether the Department could help such
a project proceed?
Answer. The DOE Office of Fossil Energy (FE) has the lead within
the Department on advanced coal development and carbon capture and
sequestration projects. If I am confirmed as the Director of the Office
of Minority Economic Impact, I will work closely with FE and with the
Office of Indian Energy (IE) to assess the viability of coal projects
on tribal lands.